Document:

License Agreement

 Exhibit 10.23 
 CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION 
 LICENSE AGREEMENT 
 This LICENSE AGREEMENT (the “Agreement”) is executed as of March 24, 2011 with an effective date of January 6, 2011 (the “Effective Date”) by and between
Ligand Pharmaceuticals Incorporated, a corporation organized under the laws of Delaware and having a place of business at 11085 North Torrey Pines Road, Suite 300, La Jolla, CA, 92037 (“Ligand”) and Chiva Pharmaceuticals,
Inc. (formerly known as Elite Mind Investments Limited), a corporation organized under the laws of the Cayman Islands whose registered office is situated at Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand Cayman KY1-1112, Cayman
Islands (“Chiva”). Ligand and Chiva are each referred to herein by name or, individually, as a “Party” or, collectively, as “Parties.” 

BACKGROUND 
 WHEREAS, Ligand owns or has rights under certain patent rights and know-how which relate to Pradefovir, MB07133 and HepDirect Technology (each as defined below); 

WHEREAS, Chiva desires to obtain certain exclusive and non-exclusive licenses under such patent rights and know-how for the
development and commercialization of Pradefovir and MB07133 in the Field in China, and other novel compounds in the Field worldwide as set forth herein; and 
 WHEREAS, Ligand desires to grant such licenses to Chiva, all in accordance with the terms and conditions herein. 
 NOW, THEREFORE, in consideration of the mutual covenants and agreements provided herein below and other consideration, the receipt and sufficiency of which is hereby acknowledged, Ligand and Chiva
hereby agree as follows: 
 ARTICLE 1 
 DEFINITIONS 
 As used in this Agreement, capitalized terms shall have the
meanings indicated in this Article 1 or as specified elsewhere in this Agreement: 
 1.1
“Affiliate” means, with respect to a Person, any Person that is controlled by, controls, or is under common control with such first Person, as the case may be. For purposes of this Section 1.1, the term
“control” means (a) direct or indirect ownership of [* * *] or more of the voting interest in the entity in question, or [* * *] or more interest in the income of the entity in 

 
  

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 1 

 
question; provided, however, that if local Law requires a minimum percentage of local ownership of greater than [* * *], control will be established by direct or indirect beneficial ownership of [* * *] of the maximum ownership
percentage that may, under such local Law, be owned by foreign interests, or (b) possession, directly or indirectly, of the power to direct or cause the direction of management or policies of the entity in question (whether through ownership of
securities or other ownership interests, by contract or otherwise). 
 1.2 “China” means the
People’s Republic of China as in existence as of the Effective Date (including Hong Kong, Taiwan and Macau). 
 1.3
“China Business Opportunity” has the meaning set forth in Section 2.7(a). 
 1.4
“China Negotiation Period” has the meaning set forth in Section 2.7(a). 
 1.5
“Chiva Indemnitees” has the meaning set forth in Section 9.2. 
 1.6 “Claim
Notice” has the meaning set forth in Section 9.3. 
 1.7 “Clinical Trial” means an
investigation in human subjects and/or patients intended to discover or verify the clinical, pharmacological and/or other pharmacodynamic effects of a Licensed Product, and/or to identify any adverse reactions to a Licensed Product, and/or to study
absorption, distribution, metabolism, and/or excretion of a Licensed Product with the objective of ascertaining its safety, activity and/or efficacy. 
 1.8 “Confidential Information” means any information of a confidential and proprietary nature, including know-how, information, invention disclosures, patent applications,
proprietary materials and/or technologies, economic information, business or research strategies, trade secrets, and material embodiments thereof, disclosed by a Party to the other Party and characterized to the receiving Party as confidential.

 1.9 “Control” or “Controlled” means, with respect to any information, material or
intellectual property right, that a Party owns or has a license to such information, material or intellectual property right, as applicable, and has the ability to grant to the other Party access to, or a license or sublicense under, such
information, material or intellectual property right as provided under the terms of this Agreement. 
 1.10
“Develop” or “Development” means pre-clinical and clinical research and development activities, including toxicology and other pre-clinical development efforts, stability testing, process development,
formulation development, delivery system development, quality assurance and quality control development, statistical analysis, clinical pharmacology, clinical studies (including Clinical Trials), regulatory affairs, and Regulatory Approval and
clinical study regulatory activities. 
 1.11 “Dispute” has the meaning set forth in
Section 12.11. 
  
  

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 2 

 1.12 “Executive” shall mean for Ligand, the Chief Executive Officer
of Ligand (or such individual’s designee), and, for Chiva, the Chief Executive Officer of Chiva (or such individual’s designee). If either position is vacant or either position does not exist, then the person having the most nearly
equivalent position (or such individual’s designee) shall be deemed to be the Executive of the relevant Party. 
 1.13
“FDA” means the U.S. Food and Drug Administration, or any successor agency thereto. 
 1.14
“FD&C Act” means the U.S. Federal Food, Drug, and Cosmetic Act (21 U.S.C. §301, et seq.), including any amendments or supplements thereto. 
 1.15 “Field” means the HCC Field, the HepB Field and the HepC Field. 
 1.16 “First Commercial Sale” means, with respect to each Licensed Product, the first sale of such Licensed Product by Chiva or its Affiliates or sublicensees to a Third Party for
which payment has been received in any country in the Territory. 
 1.17 “Governmental Entity” means any
regional, central, federal, state, provincial or local court, commission or governmental, regulatory or administrative body, board, bureau, agency, instrumentality, authority or tribunal or any subdivision thereof. 

1.18 “HCC Compound” means any Licensed Compound other than MB07133 developed using or incorporating HepDirect
Technology, which is selected by Chiva for Development and/or commercialization by Chiva in the HCC Field pursuant to Section 3.1. 
 1.19 “HCC Field” means the treatment or prevention of hepatocellular carcinoma in humans. 
 1.20 “HCC Product” means any product intended for use in the HCC Field that contains a HCC Compound, whether alone or in combination with another active pharmaceutical ingredient,
the manufacture, use, sale, offer for sale, import, or export of which would, but for the rights granted pursuant to Section 2.3, infringe a Valid Claim. 
 1.21 “HepB Compound” means any Licensed Compound other than Pradefovir developed using or incorporating HepDirect Technology, which is selected by Chiva for use in the HepB Field
pursuant to Section 3.1. 
 1.22 “HepB Field” means the treatment or prevention of hepatitis
B virus infection in humans. 
 1.23 “HepB Product” means any product intended for use in the HepB Field
that contains a HepB Compound, whether alone or in combination with another active pharmaceutical ingredient, the manufacture, use, sale, offer for sale, import, or export of which would, but for the rights granted pursuant to
Section 2.3, infringe a Valid Claim. 

  
 3 

 1.24 “HepC Compound” means any Licensed Compound developed using or
incorporating HepDirect Technology, which is selected by Chiva and Ligand confirms is available for use in the HepC Field pursuant to Section 3.1. 
 1.25 “HepC Field” means the treatment or prevention of hepatitis C virus infection in humans. 
 1.26 “HepC Product” means any product intended for use in the HepC Field that contains a HepC Compound, whether alone or in combination with another active pharmaceutical
ingredient, the manufacture, use, sale, offer for sale, import, or export of which would, but for the rights granted pursuant to Section 2.3, infringe a Valid Claim. 

1.27 “HepDirect” means the proprietary prodrug technology that targets delivery of drugs to
the liver by using compositions, and methods of making and using the same, of any and all [* * *]. 
 1.28 “HepDirect Business Opportunity” has the meaning
set forth in Section 2.7(a). 
 1.29 “HepDirect Know-How” means all Know-How Controlled by
Ligand or any of its Affiliates as of the Effective Date that is (a) necessary in connection with the use of HepDirect in the Field, each in the Territory and (b) not included in the HepDirect Patents. 

1.30 “HepDirect Negotiation Period” has the meaning set forth in Section 2.7(a). 

1.31 “HepDirect Patents” means those Patents Controlled by Ligand or any of its Affiliates listed in
Schedule 1.31 attached hereto. For clarity, the HepDirect Patents do not include any of the Pradefovir Patents or the MB07133 Patents. 
 1.32 “HepDirect Technology” means the HepDirect Know-How and the HepDirect Patents. 
 1.33 “Improvement” means any discovery, invention, contribution, method, finding, or improvement, whether or not patentable, and all intellectual property therein, that is
conceived, reduced to practice, or otherwise developed by or on behalf of a Party, during the Term, that is a modification, improvement or enhancement to the Licensed Patents and is dominated by the claims of one or more of the patent rights
described in Section 1.40. 
 1.34 “IND” means an Investigational New Drug application,
Clinical Study Application, Clinical Trial Exemption, or similar application or submission for approval to conduct human clinical investigations filed with or submitted to a Regulatory Authority in the Territory in conformance with the requirements
of such Regulatory Authority. 
 1.35 “Intellectual Property Rights” means Patents, copyrights, trade
secrets, database rights, proprietary know-how and similar rights of any type (excluding trademarks) under the laws of any Governmental Entity, including all applications, registrations, extensions and renewals relating to any of the foregoing.

  
  

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 4 

 1.36 “Know-How” means all technical information and other technical
subject matter, proprietary methods, ideas, concepts, formulations, discoveries, inventions, devices, technology, trade secrets, compositions, designs, formulae, know-how, show-how, specifications, drawings, techniques, results, data, processes,
methods, procedures and/or designs, whether or not patentable. 
 1.37 “Law” means, individually and
collectively, any and all laws, ordinances, orders, rules, rulings, directives and regulations of any kind whatsoever of any Governmental Entity or Regulatory Authority within the applicable jurisdiction. 

1.38 “Licensed Compound” means any compound developed by or on behalf of Chiva, its Affiliates or its
sublicensees, including any complexes, chelates, clathrates, acids, bases, esters, salts, isomers, stereoisomers, enantiomers, pro-drug form, metabolite, hydrate, solvate, polymorph, and crystalline forms thereof, the manufacture, use, sale, offer
for sale, import, or export of which would, but for the rights granted pursuant to Section 2.3, infringe a Valid Claim under the Licensed Patents; provided, however, that “Licensed Compound” shall not include
those HepC Compounds which are unavailable for Development pursuant to Section 3.1. 
 1.39 “Licensed
Know-How” means the HepDirect Know-How, the MB07133 Know-How and the Pradefovir Know-How. 
 1.40
“Licensed Patents” means the HepDirect Patents, the MB07133 Patents and the Pradefovir Patents. 
 1.41
“Licensed Product” means each of Pradefovir, MB07133, a HCC Product, a HepB Product and a HepC Product. 

1.42 “Licensed Technology” means the HepDirect Technology, the MB07133 Technology and the Pradefovir Technology.

 1.43 “Ligand Indemnitees” has the meaning set forth in Section 9.1. 

1.44 “Major European Market” means the European Union as a whole or any one of the following countries: the
United Kingdom, France, Germany, Italy, Spain (or, for patent purposes, the European Patent Office). 
 1.45
“Major Market” means each of the United States, Japan and Major European Market. 

1.46 “MB07133” means all forms of [* * *] developed using or incorporating HepDirect Technology and as
identified in Exhibit B, including any complexes, chelates, clathrates, acids, bases, esters, salts, isomers, stereoisomers, enantiomers, pro-drug form, metabolite, hydrate, solvate, polymorphy, and crystalline forms thereof.

  
  

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 5 

 1.47 “MB07133 Know-How” means all Know-How Controlled by Ligand or
any of its Affiliates as of the Effective Date that is (a) necessary in connection with the making, using, selling, offering to sell, exporting and importing MB07133 in the HCC Field in the Territory and (b) not included in the MB07133
Patents. 
 1.48 “MB07133 Patents” means those Patents Controlled by Ligand or any of its Affiliates
listed in Schedule 1.48 attached hereto. For clarity, the MB01775 Patents do not include any of the Pradefovir Patents or the HepDirect Patents. 
 1.49 “MB07133 Technology” means the MB07133 Know-How and the MB07133 Patents. 
 1.50 “NDA” means a “New Drug Application,” as defined in the FD&C Act and applicable regulations promulgated thereunder by the FDA and all amendments and supplements
thereto filed with the FDA, or the equivalent application filed with any Regulatory Authority, including all documents, data, and other information concerning a Licensed Product which are necessary for gaining Regulatory Approval to market and sell
such Licensed Product in the relevant jurisdiction. 
 1.51 “Net Sales” means gross
amounts invoiced by or on behalf of Chiva and any of its Affiliates or sublicensees for Licensed Products sold to Third Parties who are not Affiliates or sublicensees of Chiva, unless such Affiliate or sublicensee is the end user of such Licensed
Products, in which case the amount billed therefor shall be deemed to be the amount that would be billed to a Third Party end user in bona fide, arms-length transactions, less the following deductions, as determined in accordance with Chiva’s
usual and customary accounting methods, which are in accordance with United States GAAP (as generally and consistently applied throughout Chiva’s organization) to the extent included in the gross invoiced sales price of any Licensed Products or
otherwise directly paid or incurred by Chiva, its Affiliates or sublicensees with respect to the sale of such Licensed Products: [* * *]; and [* * *] to the extent such amounts are [* * *] listed above and are [* * *]. Each of the deductions set forth above
shall be determined on an accrual basis in accordance with GAAP. 
 1.52 “Patents” means all:
(a) United States and foreign patents, re-examinations, reissues, renewals, extensions and term restorations, inventors’ certificates and counterparts thereof; and (b) pending applications for United States and foreign patents,
including, without limitation, provisional applications, continuations, continued prosecution, divisional and substitute applications, and counterparts thereof. 
 1.53 “Person” means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof.

  
  

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 6 

 1.54 “Phase I Clinical Trial” means, as to a Licensed Product, a
Clinical Trial which meets the definition of a Phase 1 trial as set forth in 21 C.F.R. 312.21(a), as amended from time to time, or, if conducted for the purpose of seeking Regulatory Approval in a jurisdiction in the Territory other than the U.S., a
Clinical Trial that meets the definition of a Phase 1 trial in the corresponding regulation in such jurisdiction. “Initiation” of a Phase I Clinical Trial means the first dosing of a subject in such Phase I Clinical Trial. 

1.55 “Phase III Clinical Trial” means, as to a Licensed Product, a Clinical Trial which meets the definition of a
Phase 3 trial as set forth in 21 C.F.R. 312.21(c), as amended from time to time, or, if conducted for the purpose of seeking Regulatory Approval in a jurisdiction in the Territory other than the U.S., a Clinical Trial that meets the definition of a
Phase 3 trial in the corresponding regulation in such jurisdiction. “Initiation” of a Phase III Clinical Trial means the first dosing of a patient in such Phase III Clinical Trial. 

1.56 “Pradefovir” means all forms of the [* * *] developed using or incorporating HepDirect Technology and as
identified in Exhibit A, including any complexes, chelates, clathrates, acids, bases, esters, salts, isomers, stereoisomers, enantiomers, pro-drug form, metabolite, hydrate, solvate, polymorphy, and crystalline forms thereof.

 1.57 “Pradefovir Know-How” means all Know-How Controlled by Ligand or any of its Affiliates as of the
Effective Date that is (a) necessary in connection with the making, using, selling, offering to sell, exporting and importing of Pradefovir in the HepB Field and in the Territory and (b) not included in the Pradefovir Patents. 

1.58 “Pradefovir Patents” means those Patents Controlled by Ligand or any of its Affiliates listed in
Schedule 1.58 attached hereto. For clarity, the Pradefovir Patents do not include any of the HepDirect Patents or the MB07133 Patents. 
 1.59 “Pradefovir Technology” means the Pradefovir Know-How and the Pradefovir Patents. 
 1.60 “Prosecute” or “Prosecution” means, with respect to Patents, the filing for, prosecuting, responding to oppositions, nullity actions, re-examinations,
revocation actions and similar proceedings (including without limitation conducting or participating in interference and oppositions) filed by Third Parties against, and maintaining, Patents. 

1.61 “Regulatory Authority” means any national (e.g., the FDA), supranational (e.g., the EMEA), regional, state
or local regulatory agency, department bureau, commission, council or other Governmental Entity in any jurisdiction of the world involved in the granting of Regulatory Approval for pharmaceutical products. 

1.62 “Regulatory Approval” means, with respect to a country or jurisdiction within the Territory, (i) any
approvals, licenses, registrations or authorizations necessary for the manufacture, marketing and sale of a Licensed Product in such country or jurisdiction, and (ii) where relevant, pricing approvals necessary to obtain reimbursement from a
Governmental Entity with respect to a Licensed Product in such country or jurisdiction. 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 7 

 1.63 “Regulatory Documentation” means all submissions to Regulatory
Authorities and other Governmental Entities, including for Clinical Trials, preclinical trials, tests, and biostudies, relating to the Licensed Products, including all INDs, NDAs and Regulatory Approvals, as well as all correspondence with
Governmental Entities (registration and licenses, pricing and reimbursement correspondence, regulatory drug lists, advertising and promotion documents), adverse event files, complaint files, manufacturing records and inspection reports. 

1.64 “Research Plan” has the meaning set forth in Section 5.2(a). 

1.65 “Sublicense Agreement” has the meaning set forth in Section 2.5. 

1.66 “Term” has the meaning set forth in Section 11.1. 

1.67 “Third Party” means any Person other than Ligand, Chiva or any Affiliate of either Ligand or Chiva.

 1.68 “Valeant” means Valeant Pharmaceuticals North America, a Delaware corporation and successor in
interest to Valeant Research & Development, or any successor in interest. 
 1.69 “Valeant
Agreement” means that certain Assignment and Assumption Agreement by and among Metabasis Therapeutics, Inc., Schering Corporation and Valeant, effective as of January 9, 2007, and that certain Termination Agreement, by and among
Metabasis Therapeutics, Inc., Schering Corporation and Valeant, effective as of September 19, 2007, each as amended by that certain Amendment Agreement on September 24, 2008. 

1.70 “Valid Claim” means (a) any claim of an issued and unexpired patent within the Licensed Patents that
has not been held unenforceable or invalid by a court or other governmental agency of competent jurisdiction in a decision that is not appealed or is unappealable, and which patent has not been disclaimed or admitted to be invalid or unenforceable
through reissue or otherwise, or (b) a pending claim in a pending patent application within the Licensed Patents that has not been abandoned, finally rejected, or expired without the possibility of appeal or refilling. 

1.71 Unless the context of this Agreement otherwise requires: (a) words of any gender include each other gender;
(b) words using the singular or plural number also include the plural or singular number, respectively; (c) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire
Agreement; (d) the terms “Article,” “Section” or “Exhibit” refer to the specified Article, Section or Exhibit of this Agreement; (e) the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase, “and/or”; and (f) the term “including” means “including without limitation.” Whenever this Agreement refers to a number of days, such number shall refer to calendar days.

 1.72 “Exclusive License” means Ligand will not license or otherwise grant to any Third Party any rights
regarding the Licensed Compounds/Licensed Products in the Territory within the Field. For purposes of this Agreement, the term “Territory” means China. 

  
 8 

 ARTICLE 2 
 LICENSES AND TECHNOLOGY TRANSFER 
 2.1 Exclusive License for HepB
Compounds/Products. During the Term, subject to the terms and conditions of this Agreement, Ligand hereby grants to Chiva and its Affiliates an exclusive, royalty-bearing right and license under the Pradefovir Technology to make, have made, use,
sell, have sold, import and export Pradefovir and other HepB Compounds and HepB Products in the HepB Field in China.  

2.2 Exclusive License for HCC Compounds/Products. During the Term, subject to the terms and conditions of this Agreement, Ligand
hereby grants to Chiva and its Affiliates an exclusive, royalty-bearing right and license under the MB07133 Technology to make, have made, use, sell, have sold, import and export MB07133 and other HCC Compounds and HCC Products in the HCC Field in
China.  
 2.3 Non-Exclusive HepDirect Technology Licenses. During the Term, subject to the terms and conditions
of this Agreement, including Section 3.1, Ligand hereby grants to Chiva and its Affiliates a non-exclusive, royalty-bearing right and license under the HepDirect Patents to Develop, make, have made, use, sell, have sold, import and
export HepB Compounds and HepB Products in the HepB Field, HCC Compounds and HCC Products in the HCC Field, and HepC Compounds and HepC Products in the HepC Field, each in the Territory. 

2.4 Rights to Improvements.  
 (a) Chiva shall have a right to make Improvements to the Licensed Technology, and to utilize such Improvements to make, have made, use, sell, have sold and import Licensed Products in the
Territory. Chiva hereby grants to Ligand a non-exclusive, perpetual right and license in the Territory, without the right to grant sublicenses, to make, have made, use, sell, have sold, import and export Improvements made by or on behalf of Chiva
during the Term. 
 (b) Subject to the license granted to Ligand pursuant to Section 2.4(a), Improvements
made by or on behalf of Chiva shall be owned and/or controlled exclusively by Chiva. For purposes of this Section 2.4(b), ownership of an Improvement shall be based on inventorship as determined in accordance with the patent law of the
country in which the Improvement is reduced to practice. 
 2.5 Sublicenses. The rights and licenses granted pursuant to
Sections 2.1, 2.2, and 2.3 include the right to grant sublicenses pursuant to a written sublicense agreement (each a “Sublicense Agreement”); provided, however, that (i) any such Sublicense
Agreement shall be consistent with and subject to the terms and conditions of this Agreement; (ii) Chiva shall remain fully responsible to Ligand for the performance of its sublicensee(s); (iii) Chiva shall reserve the right under each
Sublicense Agreement to conduct an audit of its sublicensee in a comparable manner to Section 4.11 of this Agreement; (v) Chiva shall provide a complete, executed copy of 

  
 9 

 
any Sublicense Agreement within [* * *] of execution thereof; and (v) each sublicense granted by Chiva shall terminate no later than termination of this Agreement, unless otherwise agreed by the Parties. Chiva shall remain obligated to
make all payments due to Ligand under the terms of this Agreement with respect to the activities of its sublicensees. 
 2.6
Right of First Negotiation for Exclusive License. 
 (a) In the event that Ligand, at any time during the Term,
desires to grant exclusive rights to a Third Party, under the HepDirect Patents, to Develop, make, have made, use, sell, have sold, import and export HepB Compounds and HepB Products in the HepB Field, or HCC Compounds and HCC Products in the HCC
Field, in the Territory (any such potential grant referred to as a “HepDirect Business Opportunity”), Ligand agrees to notify Chiva of such HepDirect Business Opportunity, and provide Chiva with information available to Ligand that
is reasonably necessary for Chiva to evaluate the HepDirect Business Opportunity. The Parties shall negotiate in good faith the terms pursuant to which Chiva may obtain such HepDirect Business Opportunity for a period of [* * *] days following the
date of such notice (such period referred to as a “HepDirect Negotiation Period”). 
 (b) Unless
otherwise agreed between the Parties, Ligand will not negotiate or discuss the HepDirect Business Opportunity with any Third Party, or disclose to any Third Party any of the information regarding the HepDirect Business Opportunity, until the expiry
of the HepDirect Negotiation Period. In the event that Ligand and Chiva have not agreed upon the terms and conditions pursuant to which Ligand would grant such rights to Chiva within the HepDirect Negotiation Period, Ligand shall be free to discuss
the HepDirect Business Opportunity with and disclose information regarding the same to any Third Party. 
 2.7 Right of First
Negotiation for China. 
 (a) In the event that Ligand, at any time during the Term, desires to grant exclusive rights
to a Third Party, under any other Ligand technology, to make, have made, use, sell, have sold, import and export any other Ligand product in China (any such potential grant referred to as an “China Business Opportunity”), Ligand
agrees to notify Chiva of such China Business Opportunity, and provide Chiva with information available to Ligand that is reasonably necessary for Chiva to evaluate the China Business Opportunity. The Parties shall negotiate in good faith the terms
pursuant to which Chiva may obtain such China Business Opportunity for a period of [* * *] following the date of such notice (such period referred to as a “China Negotiation Period”). For the avoidance of doubt, this right of first
negotiation shall not apply to any worldwide or other opportunities that involve any countries or regions beyond China. 

(b) Unless otherwise agreed between the Parties, Ligand will not negotiate or discuss the China Business Opportunity with any
Third Party, or disclose to any Third Party any of the information regarding the China Business Opportunity, until the expiry of the China Negotiation Period. In the event that Ligand and Chiva have not agreed upon the terms and conditions pursuant
to which Ligand would grant such rights to Chiva within the China Negotiation Period, Ligand shall be free to discuss the China Business Opportunity with and disclose information regarding same to any Third Party. 

 
  

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 10 

 2.8 Technology Transfer. Within [* * *] after the Effective Date, to the extent not previously provided to
Chiva or otherwise in Chiva’s possession, Ligand shall use commercially reasonable efforts disclose and provide to Chiva key Licensed Technology and Regulatory Documentation critical to the Licensed Products in existence as of the Effective
Date. Following such [* * *] period, Ligand shall reasonably consider any commercially reasonable request by Chiva to disclose and provide additional key Licensed Technology and Regulatory Documentation critical to the Licensed Products in existence
as of the Effective Date. 
 2.9 No Other Rights. Ligand and Chiva each acknowledges and agrees that, except as
expressly granted under this Agreement, no right, title, or interest of any nature whatsoever is granted whether by implication, estoppel, reliance, or otherwise, by either Party to the other Party. All rights with respect to technology, Patents or
other intellectual property rights that are not specifically granted herein are reserved. 
 2.10 Bankruptcy. All rights
and licenses granted under or pursuant to this Agreement, including amendments hereto, are, for all purposes of 11 U.S.C. § 365(n), licenses of rights to intellectual property as defined in the United States Bankruptcy Code, and any comparable
Law of a relevant jurisdiction. Each Party may elect to retain and may fully exercise all of its rights and elections under 11 U.S.C. § 365(n). 
 ARTICLE 3 
 NOTICE REGARDING ADDITIONAL LICENSED COMPOUNDS

 3.1 Notice Regarding Additional Licensed Compounds. Chiva shall have the right to Develop multiple Licensed
Compounds concurrently, and shall provide written notice to Ligand of each Licensed Compound (including the structure) it selects for Development as a Licensed Product within [* * *] of such selection, but in all events prior [* * *]. In the event
that a HepC Compound selected by Chiva for Development is unavailable for Development as a result of contractual rights granted by Ligand prior to the receipt of such written notice or otherwise as a result of being included in one or more packages
of contractual rights that Ligand intends to grant to one or more Third Parties as part of a transaction involving the program that [* * *], Ligand shall promptly provide written notice to Chiva, and Chiva may not commence (or continue, if
previously commenced) Development on such HepC Compound. For clarity, any such HepC Compound(s) shall not be a Licensed Compound hereunder. For this purpose Ligand hereby confirms that it has no objection to Chiva’s plan to develop HepC
Compounds and HepC Products using HepDirect Technology that [* * *]. 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 11 

 ARTICLE 4 
 COMPENSATION 
 4.1 License Issuance Fee. In partial
consideration of the rights and licenses granted by Ligand hereunder, Chiva shall pay a one-time, non-refundable and non-creditable license issuance fee of one hundred fifty thousand US Dollars for Predafovir (US$150,000) and three hundred fifty
thousand US Dollars ($350,000) for MB07133 to Ligand on or before March 31, 2011. 
 4.2 Equity.
In further consideration of the rights and licenses granted by Ligand hereunder, Chiva shall issue shares of its Common Stock to Ligand within [* * *] of Ligand’s first notification to Chiva of a [* * *] China Business Opportunity under Section 2.7(a) pursuant to a
Stock Purchase Agreement substantially in the form attached hereto as Exhibit C (the “Stock Purchase Agreement”), so as to provide Ligand with a ten percent (10%) ownership stake in Chiva. For clarity, in the
event that the Parties do not enter into a Stock Purchase Agreement substantially in the form attached hereto within [* * *] of the date of first [* * *] notification to Chiva under Section 2.7(a), Ligand may terminate this Agreement and no
payment obligation shall be obligated, assumed and effective by either party pursuant to this agreement. For purposes of this Agreement, [* * *]. 
 4.3 Milestone Payments. 
 (a) In partial consideration of the rights
and licenses granted by Ligand hereunder, Chiva shall pay a one-time, non-refundable and non-creditable milestone fee of one hundred fifty thousand US Dollars for Pradefovir (US$150,000) and three hundred fifty thousand US Dollars ($350,000) for
MB07133 to Ligand on December 31, 2011. 
 (b) In further consideration of the rights and licenses granted by Ligand
hereunder, Chiva shall pay to Ligand the non-refundable and non-creditable milestone payments within [* * *] of the achievement by Chiva or its Affiliates or sublicensees of each of the corresponding events: 

(1) for Pradefovir and for each other HepB Product with its composition of matter claimed in a Licensed Patent as of the Effective Date
(for instance, HepB Products with no claim related to its composition of matter in a Licensed Patent as of the Effective Date, or with respect to which only a method of treatment is disclosed as of the Effective Date), as set forth under the column
“Pradefovir and Certain Other HepB Products”; 
 (2) for MB07133 and for each other HCC Product with its composition
of matter claimed in a Licensed Patent as of the Effective Date (for instance, HCC Products with no claim related to its composition of matter in a Licensed Patent as of the Effective Date, or with respect to which only a method of treatment is
disclosed as of the Effective Date), as set forth under the column “MB07133 and Certain Other HCC Products”; and 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 12 

 (3) for each HepB Product other than a HepB Product with its composition of matter claimed
in a Licensed Patent as of the Effective Date, for each HCC Product and and for each HepC Product as set forth under the applicable column “All Other HepB Products, HCC Products and HepC Products” below. 

 

							
	 	  	 Pradefovir and

Certain Other HepB
 Products
	  	 MB07133 and

Certain Other HCC
 Products
	  	 All Other HepB

Products, HCC

Products and HepC
 Products

	 Initiation of Phase I

Clinical Trial
	  	None	  	None	  	 Five Hundred
 Thousand
U.S.
 Dollars (US$500,000)

				
	 Initiation of Phase III

Clinical Trial
	  	None	  	None	  	 One Million U.S.

Dollars
 (US$1,000,000)

				
	 NDA filing in China
	  	None	  	None	  	None
				
	 Receipt of

Regulatory Approval

in China
	  	 Four Million U.S.

Dollars
 (US$4,000,000)
	  	 Four Million U.S.

Dollars
 (US$4,000,000)
	  	 Six Million U.S.

Dollars
 (US$6,000,000)

				
	 NDA filing in First

Major Market
	  	Not Applicable	  	None	  	None
				
	 Receipt of

Regulatory Approval

in first Major Market
	  	Not Applicable	  	None	  	 Seventeen Million
 U.S.
Dollars
 (US$17,000,000)

				
	 Achievement of

$500M in total
 cumulative Net Sales
	  	 Twenty Million U.S.

Dollars
 (US$20,000,000)
	  	 Fifteen Million U.S.

Dollars
 (US$15,000,000)
	  	 Fifteen Million U.S.

Dollars

(US$15,000,000)

For clarity, it is expressly agreed that the milestone payments set forth in each column above will be payable once only for each
Licensed Product to achieve the event. If, however, Chiva is developing two Licensed Products, even if both are a HepB Product, HCC Product or HepC Product, as applicable, each of the milestone payments under the column “HepB Products, HCC
Products and HepC Products” shall be paid for each such Licensed Product. 

  
 13 

 4.4 Payment of Royalties 

(a) Royalty Rates. In further consideration of the rights and licenses granted by Ligand hereunder, Chiva shall pay to
Ligand five percent (5%) of aggregate Net Sales of Licensed Products, except for Pradefovir which shall be paid at the percentage of eight percent (8%) of aggregate Net Sales. . If a generic version of a Licensed Product enters the market,
then the royalty rate will be reduced by [* * *] for that Licensed Product from [* * *]. 
 (b) Sublicensing. In
the event Chiva grants a sublicense under Section 2.5 to a sublicensee to make, use, import, sell, offer to sell, import or export a Licensed Product, such Sublicense Agreement shall require the sublicensee to account for and report its
Net Sales of the Licensed Product on the same basis as if such sales were Net Sales of the Licensed Product by Chiva, and Chiva shall pay royalties on such sales as if the Net Sales of the sublicensees were Net Sales of Chiva. 

(c) Payment of Royalties. Chiva shall pay on a calendar quarterly basis all royalties due and payable on Net Sales in each
calendar quarter pursuant to this Section 4.4 within [* * *] after the last day of each calendar quarter in which the applicable Net Sales underlying such royalties were billed or invoiced by Chiva. 

(d) Royalty Term. The obligation of Chiva to pay royalties to Ligand under this Section 4.4 shall commence on
the date of the First Commercial Sale of a Licensed Product and continue, [* * *] the [* * *]. Thereafter, Chiva shall have a paid up, royalty-free license with respect to such Licensed Product in the applicable country. 

4.5 License Maintenance Fee. Chiva shall pay to Ligand an annual license maintenance fee of Twenty-Five Thousand U.S. Dollars
(US$25,000), due within thirty (30) days after the start of each calendar year. 
 4.6 Sublicense Fees. In partial
consideration of the rights and licenses granted by Ligand hereunder, if Chiva sublicenses any of its rights under this Agreement pursuant to Section 2.5 above to a Third Party to make, have made, use, sell, have sold, import and export
a Licensed Product in a Major Market, Chiva shall pay to Ligand an amount (the “Sublicense Fee”) equal to five percent (5%) of all up-front payments, option fees, license fees, milestone payments, royalties or other
consideration of any kind received under the applicable Sublicense Agreement. If Chiva receives any non-cash consideration (including, for example, options, stock, property or intellectual property rights), then it shall calculate the cash value of
such consideration in U.S. Dollars for the purposes of determining the Sublicense Fee and Ligand shall be entitled to engage an independent accountant to confirm Chiva’s determination of such cash value within [* * *] of receipt of notice of
Chiva’s determination. Sublicense Fee payments shall be due and payable to Ligand within [* * *] of receipt by Chiva of any payments from its sublicensee(s). For the avoidance of doubt, the payments due to Ligand under this
Section 4.6 are in addition to the payments owed by Chiva to Ligand under Sections 4.1, 4.2, 4.3, 4.4(a) and 4.4(b) above. 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 14 

 4.7 Payment Method. All payments made by Chiva under this Agreement shall be made in
U.S. Dollars, and such payments shall be made by check or wire transfer to one or more bank accounts to be designated in writing by Ligand. 
 4.8 Currency Conversion. In the event that Licensed Products are sold in currencies other than U.S. Dollars, Net Sales shall be calculated by Chiva in accordance with U.S. generally accepted
accounting principles, consistently applied. Net Sales in currencies other than U.S. Dollars shall be converted into U.S. Dollars using the average official rate of exchange for such currencies published in The Wall Street Journal,
Eastern Edition, [* * *]. If an exchange rate for any particular currency is not published in The Wall Street Journal, the rate of exchange to be used for such currency shall be determined using average conversion rates published by
the Bank of China or such conversion rates that generally are accepted in the industry [* * *]. Sublicense Fee payments due to Ligand pursuant to Section 4.6 shall be calculated in U.S. Dollars as set forth above. 

4.9 Late Payment Interest. Any payment due and payable to Ligand under the terms and conditions of this Agreement, including any
royalty payment, made by Chiva after the date such payment is due and payable shall bear interest as of the day after the date such payment was due and payable and shall continue to accrue such interest until such payment is made at a rate equal to
the lesser of either (a) [* * *], as of the date such payment was due and payable, or (b) the maximum rate permitted by applicable Law; provided, however, that the total interest accrued shall be no greater than [* * *] of
the payment due and payable. 
 4.10 Records and Reports. All payments made to Ligand hereunder shall
be accompanied by a written statement setting forth in reasonable detail the calculation thereof, including, for example, in the case of royalty payments, the gross amount billed or invoiced by Chiva, Affiliate or sublicensee for sale or other
disposition of Licensed Products on a country-by-country basis in the local currency, itemized deductions against such gross amount in accordance with Section 1.51, Net Sales on a country-by-country basis, and, if applicable, the
exchange rate utilized to convert a local currency to U.S. Dollars. Chiva shall maintain complete and accurate records sufficient to enable accurate calculation of royalties and other payments due Ligand hereunder. Such records and books of account
shall be preserved by Chiva for a period of [* * *] after
the end of the period covered by such records and books of account, which obligation shall survive expiration or termination of this Agreement. Chiva must ensure that its sublicensees provide reports and keep records in a manner consistent with this
Section 4.10. Chiva shall provide reports received from sublicensees to Ligand with the applicable payment. 
 4.11 Audit Rights. Chiva shall permit an independent public accountant designated by Ligand and reasonably acceptable to Chiva, to have access, no more than [* * *] in each [* * *] 

 
  

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 15 

 
during the Term and no more than [* * *] during the [* * *] following the expiration or termination of this Agreement, during regular business hours and upon at least [* * *] written notice, to
Chiva’s records and books to the extent necessary to determine the accuracy of Net Sales reported, and payments made, by Chiva to Ligand within the [* * *] immediately preceding such an audit. The independent public accountant shall be under a
confidentiality obligation to Chiva to disclose to Ligand only (a) the accuracy of Net Sales reported and the basis for royalty and other payments made to Ligand under this Agreement and (b) the difference, if any, such reported and paid
amounts vary from amounts determined as a result of the audit. If such examination results in a determination that Net Sales or payments have been misstated, over or under paid amounts due shall be paid promptly to the appropriate Party. If Net
Sales are understated by greater than [* * *], the fees and expenses of such accountant shall be paid by Chiva; otherwise the fees and expenses of such accountant shall be paid by Ligand. All matters reviewed by such independent public accountant
shall be deemed Confidential Information of Chiva and shall subject to ARTICLE 7. 
 ARTICLE 5 

PRODUCT ACTIVITIES 
 5.1 Diligence. Chiva shall diligently Develop Licensed Compounds and Develop, manufacture and sell Licensed Products, and shall use commercially reasonable efforts to develop markets for Licensed
Products, in both cases either directly or through a sublicensee. In addition, Chiva, either directly or through a sublicensee, shall achieve the events described in Schedule 5.1 within the time periods set forth in Schedule
5.1. Chiva, either directly or through a sublicensee, shall obtain all necessary Regulatory Approvals in each country where Licensed Products are made, used, sold, imported, or offered for sale. Ligand may terminate this Agreement in
accordance with Section 11.2(b) if Chiva (i) fails to achieve a milestone by the milestone achievement date as set out in Schedule 5.1 (or such later date as may be agreed by the Parties in
writing) or (ii) has not sold Licensed Product for any [* * *] period after Chiva’s First Commercial Sale of a Licensed Product. 
 5.2 Research Plan; Progress Reports. 
 (a) Chiva shall develop a
research plan detailing the work it will perform and associated timelines to Develop Licensed Products and to obtain Regulatory Approval and sell Licensed Products (the “Research Plan”). Chiva will provide a copy of the Research
Plan to Ligand within [* * *] and any updates as these become available from time to time. 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 16 

 (b) By [* * *] and [* * *] of each year, Chiva shall submit a written report to
Ligand covering the preceding [* * *] period. Each report will describe: Chiva’s progress in accordance with the Research Plan and towards commercialization of Licensed Products, including work completed, key scientific discoveries, summary of
work-in-progress, current schedules or anticipated events or milestones, market plans for introduction of Licensed Product, and significant corporate transaction(s) involving Licensed Products. Chiva shall also provide to Ligand copies of any
reports received from its sublicensees, within [* * *] of receipt. 
 5.3 Regulatory Responsibilities. 

(a) The Parties shall meet periodically as needed to discuss the regulatory plans and strategies for Pradefovir or MB07133 in
China. Chiva shall, at Chiva’s expense, promptly deliver to Ligand copies of Regulatory Documentation and significant correspondence to and from all Regulatory Authorities Controlled by Chiva related to Pradefovir or MB07133 in China, and shall
keep Ligand informed of material regulatory developments related to Pradefovir or MB07133 in China. Ligand shall keep Chiva informed of material regulatory developments related to Pradefovir or MB07133 in territories outside of China. Each Party
shall provide the other Party with reasonable cooperation and assistance in connection with regulatory activities for Pradefovir and MB07133 in the Field in the other Party’s territory, including responding to reasonable requests by the other
Party for additional Regulatory Documentation (and information and clinical data contained therein) related to Pradefovir or MB07133. 
 (b) To the extent permitted by the applicable Regulatory Authority, Chiva shall allow representatives of Ligand to participate in any material scheduled conference calls and meetings between Chiva
and the Regulatory Authority. If Ligand elects not to participate in such calls or meetings, Chiva shall keep Ligand reasonably apprised of the discussions between Chiva and the Regulatory Authority that take place during such calls or meetings.

 (c) Chiva shall permit Ligand to access, and shall provide Ligand with rights to reference and/or use in association
with Pradefovir or MB07133, all of its, its Affiliates’, and its licensees’ or sublicensees’ Regulatory Documentation (and information and clinical data contained therein) related to Pradefovir or MB07133. 

(d) Chiva shall be responsible for ensuring, at its sole expense, that the Development and commercialization of all Licensed
Products in its applicable territory are in compliance with applicable Laws in all material respects, including all rules and regulations promulgated by applicable Regulatory Authorities. Specifically and without limiting the foregoing, Chiva shall
file all compliance filings, certificates and safety reporting for the Licensed Products at its sole expense in its applicable territory. 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 17 

 ARTICLE 6 
 INTELLECTUAL PROPERTY 
 6.1 Patent Maintenance and Prosecution.

 (a) Ligand shall, at [* * *], and [* * *], Prosecute the Licensed Patents that are Controlled by Ligand; provided that, Ligand shall make
available to Chiva copies of material correspondence with any patent office regarding the Licensed Patents to the extent they relate to Licensed Products. [* * *]. In the event that Ligand decides to cease activities relating to Prosecuting any
Licensed Patent, Ligand shall provide written notice thereof to Chiva and, prior to taking action that would result in the abandonment of any such Patent, Ligand shall engage in good faith discussions with Chiva, such discussions to occur at least
[* * *] prior to the date when government rights would be lost as a consequence of abandonment of such Patent. 
 (b)
Chiva shall, at Chiva’s sole cost and expense, and in its sole discretion, Prosecute any Patents covering Improvements. In the event that Chiva decides to cease activities relating to Prosecuting any such Patents, Chiva shall provide
written notice thereof to Ligand and, prior to taking action that would result in the abandonment of any Patent covering such Improvement, Chiva shall engage in good faith discussions with Ligand, such discussions to occur at least [* * *] prior to
the date when government rights would be lost as a consequence of abandonment of such Patent. 
 6.2 Patent Enforcement and
Defense. 
 (a) Notification. Each Party shall notify the other Party of any infringement of any of the
Licensed Patents by a Third Party in the HepB Field, HCC Field and HepC Field, as the case may be, which becomes known to such Party, and of any claim of infringement by a Third Party that the activities of a Party infringe patent rights of such
Third Party. 
 (b) Licensed Patents. As between the Parties, Ligand shall have the first right, but not an
obligation, to initiate, maintain and control, at Ligand’s expense, legal action against any infringement of the Licensed Patents by a Third Party in the HepB Field, HCC Field or HepC Field, as the case may be. In the event that Ligand
initiates legal action against infringement of the Licensed Patents by a Third Party in the HepB Field, HCC Field or HepC Field, as the case may be, Ligand shall notify Chiva in writing. Thereafter, Chiva shall have a right, in Chiva’s sole
discretion and, notwithstanding Section 6.3, at Chiva’s expense, to join or otherwise participate or not to join or otherwise participate in such legal action with legal counsel selected by Chiva. Any recovery received by Ligand
from legal action initiated pursuant to this Section 6.2(b), whether by judgment, award, decree or settlement, shall be used first to reimburse Ligand for Ligand’s out-of-pocket costs and expenses actually incurred in pursuing

  
  

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 18 

 
such legal action, and second to reimburse Chiva for Chiva’s costs and expenses actually incurred in connection with such legal action. The remainder of any recovery or distribution received
by Ligand under this Section 6.2(b), after reimbursement of costs and expenses of Ligand and Chiva, shall be [* * *]. 
 6.3 Cooperation. In any suit, proceeding or dispute involving the infringement of any of the Licensed Patents in the HepB Field, HCC Field or HepC Field, as the case may be, the Parties shall
provide each other with reasonable cooperation, and, upon the request and at the expense of the Party bringing suit, the other Party shall make available to the Party bringing suit, at reasonable times and under appropriate conditions, all relevant
personnel, records, papers, information, samples, specimens, and the like in its possession. Notwithstanding any other provision of this ARTICLE 6, [* * *]. 

ARTICLE 7 

CONFIDENTIALITY 
 7.1 Confidentiality Obligations. Each Party agrees that, during the Term and for [* * *] thereafter, all Confidential Information of the other Party shall be maintained in strict
confidence, and shall not be used for any purpose other than the purposes expressly permitted by this Agreement, and shall not be disclosed to any Third Party. The foregoing obligations will not apply to any portion of Confidential Information to
the extent that it can be established by competent proof that such portion: 
 (a) was already known to the recipient as
evidenced by its written records, other than under an obligation of confidentiality, at the time of disclosure; 
 (b)
was generally available to the public or was otherwise part of the public domain at the time of its disclosure to the recipient; 
 (c) became generally available to the public or otherwise becomes part of the public domain after its disclosure and other than through any act or omission of the recipient in breach of this
Agreement; or 
 (d) was subsequently lawfully disclosed to the recipient by a Third Party other than in contravention of
a confidentiality obligation of such Third Party to the disclosing party. 
 7.2 Permitted Usage. Each Party may use and
disclose Confidential Information of the other Party as follows: (a) under appropriate confidentiality provisions no less restrictive than those in this Agreement, in connection with the performance of its obligations or exercise of rights
granted to or retained by such Party in this Agreement; (b) in connection with the Prosecution or 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 19 

 
enforcement of Licensed Patents or Improvements, in accordance with this Agreement; or (c) in connection with prosecuting or defending litigation, complying with applicable governmental
regulations, filing for, obtaining and maintaining Regulatory Approvals, or as otherwise required by Law, but provided that if a Party is required by Law to make any disclosure of the other Party’s Confidential Information, it will give
reasonable advance notice to the other Party of such disclosure requirement, it will disclose only for the sole purpose of and solely to the extent required by such Law, and it will use its reasonable efforts to secure confidential treatment of such
Confidential Information required to be disclosed. 
 7.3 Terms of Agreement. The terms of this Agreement shall be
Confidential Information of both Parties, and subject to the terms of this ARTICLE 7. Notwithstanding the foregoing, either Party may make a disclosure of terms of this Agreement (i) to any financial advisors, accountants, potential
sublicensees, investors, or potential acquirers, (ii) if required by applicable Law, or (iii) as otherwise permitted pursuant to Section 7.4. Except as otherwise permitted for disclosures pursuant to Section 7.4,
the disclosing Party shall use all commercially reasonable efforts to preserve the confidentiality of this Agreement and the terms thereof notwithstanding any required disclosure. A Party will give the other Party written notice of any required
disclosure under (ii) above, which notice shall, to the extent reasonably practicable, be given a reasonable period of time in advance of such required disclosure. In the event either Party is required to file this Agreement with the U.S.
Securities and Exchange Commission or any comparable Chinese or other non-U.S. Governmental Entity, such Party shall apply for confidential treatment of this Agreement to the fullest extent permitted by applicable Law, shall provide the other Party
a copy of the confidential treatment request far enough in advance of its filing to give the other Party a meaningful opportunity to comment thereon, and shall incorporate in such confidential treatment request any reasonable comments of the other
Party. 
 7.4 Public Announcements. The Parties will mutually agree on a press release to be issued upon execution of
this Agreement or reasonably soon thereafter. Neither Party shall make any subsequent public announcement concerning this Agreement or the terms hereof not previously made public without the prior written approval of the other Party with regard to
the form, content, and precise timing of such announcement, except as may be required to be made by either Party in order to comply with applicable Law, regulations, court orders, or tax, securities filings, financing arrangements, acquisitions, or
sublicenses. Such consent shall not be unreasonably withheld or delayed by such other Party. Prior to any such public announcement, the Party wishing to make the announcement will submit a draft of the proposed announcement to the other Party in
sufficient time to enable such other Party to consider and comment thereon. 
 7.5 Cooperation. In
any suit, proceeding or dispute involving the infringement of any of the Licensed Patents in the HepB Field, HCC Field or HepC Field, as the case may be, the Parties shall provide each other with reasonable cooperation, and, upon the request and at
the expense of the Party bringing suit, the other Party shall make available to the Party bringing suit, at reasonable times and under appropriate conditions, all relevant personnel, records, papers, information, samples, specimens, and the like in
its possession. Notwithstanding any other provision of this ARTICLE 6, [* * *]. 
  
  

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 20 

 ARTICLE 8 
 REPRESENTATIONS, WARRANTIES AND COVENANTS 
 8.1 General. Each Party
represents and warrants to the other that: 
 (a) it is duly organized and validly existing under the Law of the
jurisdiction of its incorporation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof; 
 (b) it is qualified to do business and is in good standing in each jurisdiction in which it conducts business; 
 (c) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the individual executing this Agreement on its behalf has been duly authorized to do so
by all requisite corporate action; 
 (d) this Agreement is legally binding upon it and enforceable in accordance with
its terms and the execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material Law; and

 (e) it is not aware of any action, suit or inquiry or investigation instituted by any Person which questions or
threatens the validity of this Agreement. 
 8.2 Representations of Ligand. 

(a) Ligand owns the Licensed Compounds/Products/Technology as of the Effective Date. There are no adverse actions, suits, or claims
pending or to the knowledge of Ligand, threatened against Ligand in any court or by or before any governmental body or agency with respect to the Licensed Compounds/Products/Technology and, to the actual knowledge of Ligand, there are no Third Party
patents which would reasonably be expected to give rise to such actions, suits or claims. 
 (b) Ligand has not initiated
or been involved in any proceedings or claims in which it alleges that any Third Party is or was infringing or misappropriating the Licensed Technology, nor have any proceedings been threatened by Ligand, nor to the knowledge of Ligand is there any
valid basis for any such proceeding. 

  
 21 

 (c) Ligand has not granted a license for HepB Compounds/Products pursuant to section
2.1, HCC Compounds/Products pursuant to section 2.2 to any Third Party or Affiliate in China that would prevent Chiva from exercising its rights under this Agreement. 
 8.3 Covenants of Ligand. Ligand covenants that it will not, during the Term, undertake any obligation, or grant any right, license, interest or lien, that conflicts with its obligations, or the
rights and licenses granted to Chiva, under the terms of this Agreement, or impairs the rights granted by Ligand to Chiva under the terms of this Agreement. 
 8.4 Disclaimer. EXCEPT AS PROVIDED IN THIS ARTICLE 8, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY (EXPRESS, IMPLIED, STATUTORY OR OTHERWISE) WITH RESPECT TO THE SUBJECT MATTER OF THIS
AGREEMENT, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND ALL WARRANTIES AND CONDITIONS OF THE VALIDITY OF THE LICENSED PATENTS OR NONINFRINGEMENT OF
THIRD PARTY INTELLECTUAL PROPERTY RIGHTS. THIS SECTION 8.3 SHALL NOT BE CONSTRUED TO LIMIT EITHER PARTY’S OBLIGATIONS UNDER ARTICLE 9. 
 ARTICLE 9 
 INDEMNIFICATION 

9.1 Indemnification by Chiva. Chiva shall indemnify, defend and hold Ligand and its Affiliates, agents, employees, officers, and
directors (the “Ligand Indemnitees”) harmless from and against any and all liability, damage, loss, cost, or expense (including without limitation reasonable attorneys’ fees) arising out of Third Party claims or suits related
to: (a) breach by Chiva of any of its representations, warranties, or covenants under this Agreement; (b) the negligence or willful misconduct of Chiva or its Affiliates, and its or their directors, officers, agents, employees, or
consultants; and (c) any exploitation by, or under the authority of, Chiva of the licenses granted under Sections 2.1, 2.2, and 2.3 (including by any Affiliate or sublicensee); provided, however, that
Chiva’ obligations pursuant to this Section 9.1 will not apply to the extent such claims or suits result from the negligence or willful misconduct of any of the Ligand Indemnitees or breach by Ligand of its representations,
warranties, or covenants set forth in this Agreement, or to the extent that Ligand has indemnification obligations with respect to such claims or suits under Section 9.2. 

9.2 Indemnification by Ligand. Ligand shall indemnify, defend, and hold Chiva and its Affiliates, sublicensees, agents, employees,
officers, and directors (the “Chiva Indemnitees”) harmless from and against any and all liability, damage, loss, cost, or expense (including without limitation reasonable attorneys’ fees) arising out of Third Party claims or
suits related to breach by Ligand of any of its representations, warranties, or covenants under this Agreement; provided, however, that Ligand’s obligations pursuant to this Section 9.2 will not apply to the extent
such claims or suits result from the negligence or willful misconduct of any of the Chiva Indemnitees or breach by Chiva of its representations, warranties, or covenants set forth in this Agreement, or to the extent that Chiva has indemnification
obligations with respect to such claims or suits under Section 9.1. 

  
 22 

 9.3 Procedure. As a condition to a Party’s right to receive
indemnification under Section 9.1 or Section 9.2, it shall: (a) promptly deliver notice in writing (a “Claim Notice”) to the other Party as soon as it becomes aware of a claim or suit for which
indemnification may be sought pursuant to Section 9.1 or Section 9.2 (provided that the failure to give a Claim Notice promptly shall not prejudice the rights of an indemnified Party except to the extent that the failure to
give prompt notice materially adversely affects the ability of the indemnifying Party to defend the claim or suit); (b) cooperate with the indemnifying Party in the defense of such claim or suit, at the expense of the indemnifying Party; and
(c) if the indemnifying Party confirms in writing to the indemnified Party its intention to defend such claim or suit within [* * *] after receipt of the Claim Notice, permit the indemnifying Party to control the defense of such claim or suit, including
without limitation the right to select defense counsel; provided that, if the indemnifying Party fails to (i) provide such confirmation in writing within such [* * *] period or (ii) after providing such confirmation, diligently and
reasonably defend such suit or claim at any time, the indemnifying Party’s right to defend the claim or suit shall terminate immediately in the case of (i) and otherwise upon [* * *] written notice by the indemnified Party to the
indemnifying Party, and the indemnified Party may assume the defense of such claim or suit at the sole expense of the indemnifying Party but may not settle or compromise such claim or suit without the consent of the indemnifying Party, not to be
unreasonably withheld or delayed. In no event, however, may the indemnifying Party compromise or settle any claim or suit in a manner which admits fault or negligence on the part of any indemnified Party or that otherwise materially affects such
indemnified Party’s rights under this Agreement or requires any payment by an indemnified Party without the prior written consent of such indemnified Party. Except as expressly provided above, the indemnifying Party will have no liability under
this ARTICLE 9 with respect to claims or suits settled or compromised without its prior written consent. 
 ARTICLE 10

 LIMITATION OF LIABILITY 
 10.1 EXCEPT FOR ANY LIABILITY THAT IS THE CONSEQUENCE OF WILLFUL MISCONDUCT OF A PARTY, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR
INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME), HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY ARISING OUT OF THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR
OTHERWISE, AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN. THIS ARTICLE 10 SHALL NOT BE
CONSTRUED TO LIMIT EITHER PARTY’S OBLIGATIONS UNDER ARTICLE 9. P-n ol 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 23 

 ARTICLE 11 
 TERM AND TERMINATION 
 11.1 Term. Unless terminated earlier pursuant
to Section 11.2, the term of this Agreement shall commence on the Effective Date and continue in full force and effect until, and terminate upon, the expiration, lapse or invalidation of the last to expire of the Licensed Patents (the
“Term”). 
 11.2 Termination. 
 (a) For Convenience. Any provision herein notwithstanding, Chiva shall have the right to terminate this Agreement in its entirety at will upon ninety (90) days prior written notice to Ligand.

 (b) For Material Breach. If either Party shall at any time breach any material term, condition or agreement herein,
and shall fail to have initiated and actively pursued remedy of any such default or breach within sixty (60) days after receipt of written notice thereof by the other Party, that other Party may, at its option, terminate this Agreement and
revoke any rights and licenses herein. Any termination of this Agreement under this Section 11.2(b) shall not, however, prejudice the right of the Party who terminates this Agreement to recover any payment due at the time of such
cancellation, and it being understood that if within sixty (60) days after receipt of any such notice the breaching Party shall have initiated and actively pursued remedy of its default, then the rights and licenses herein granted shall remain
in force as if no breach or default had occurred on the part of the breaching Party, unless such breach or default is not in fact remedied within sixty (60) days of such notice. 

11.3 Effect of Termination/Expiration. 
 (a) Rights and Obligations Upon Expiration. Upon expiration (but not earlier termination) of this Agreement, all rights and licenses granted by Ligand to Chiva hereunder that were in effect
immediately prior to the effective date of such expiration shall become irrevocable, perpetual and fully-paid. 
 (b) Rights
and Obligations Upon Termination. As of the effective date of a termination (but not expiration) of this Agreement for any reason, this Agreement and all rights and licenses granted to Chiva under Sections 2.1, 2.2, and 2.3 shall
terminate and all rights in the Licensed Technology shall revert to Ligand; (ii) Chiva shall return to Ligand the Licensed Know-How and shall transfer to Ligand all then-existing Regulatory Documentation; and (iii) each Party shall return
to the other Party and cease using all Confidential Information of the other; provided that each Party may retain one (1) copy of such Confidential Information for archival purposes. 

(c) Accrued Rights. Termination or expiration of this Agreement for any reason will be without prejudice to any rights that will
have accrued to the benefit of a Party prior to such termination or expiration. Such termination or expiration will not relieve a Party from accrued payment obligations or from obligations which are expressly indicated to survive termination or
expiration of this Agreement. 

  
 24 

 (d) Survival. Articles 1, 7, 9, 10 and 12, and Sections 4.11 and 11.3 shall survive
the expiration and any termination of this Agreement. Except as otherwise provided in this Section 11.3, all other provisions of this Agreement shall terminate upon the expiration or termination of this Agreement. 

ARTICLE 12 

GENERAL PROVISIONS 
 12.1 Entire Agreement. The Parties acknowledge that this Agreement, together with the exhibits attached hereto, sets forth the entire agreement and understanding of the Parties as to the subject
matter hereof, and supersedes all prior and contemporaneous discussions, agreements and writings in respect hereto. No waiver, modification, amendment or alteration of any provision of this Agreement will be valid or effective unless made in writing
and signed by each of the Parties. 
 12.2 Modification; Waiver. This Agreement may not be altered, amended or modified
in any way except by a writing signed by both Parties. The failure of a Party to enforce any rights or provisions of the Agreement shall not be construed to be a waiver of such rights or provisions, or a waiver by such Party to thereafter enforce
such rights or provision or any other rights or provisions hereunder. No waiver shall be effective unless made in writing and signed by the waiving Party. 
 12.3 Further Assurances. Each Party agrees to execute, acknowledge, and deliver such further instruments and to do all such other acts as may be necessary or appropriate in order to carry out the
express provisions of this Agreement. 
 12.4 Force Majeure. Neither Party shall be held responsible
for any delay or failure in performance hereunder caused by strikes, embargoes, unexpected government requirements, civil or military authorities, acts of God, earthquake, or by the public enemy or other causes reasonably beyond such Party’s
control and without such Party’s fault or negligence; provided that the affected Party notifies the unaffected Party as soon as reasonably possible, and resumes performance hereunder as soon as reasonably possible following cessation of
such force majeure event; and provided further that no such delay or failure in performance shall continue for more than [* * *]. In the event that a delay or failure in performance by Chiva under this Section 12.4 continues longer than
[* * *], then Ligand may terminate this Agreement in accordance with the terms and conditions of Section 11.2(b). 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 25 

 12.5 Assignments. Neither this Agreement nor any interest hereunder may be assigned,
nor any other obligation delegated, by a Party without the prior written consent of the other Party; provided, however, that a Party shall have the right to assign this Agreement without consent of the other Party to an Affiliate of
the assigning Party or to any successor in interest to the assigning Party by operation of law, merger, consolidation, or other business reorganization or the sale of all or substantially all of its assets relating to the subject matter of this
Agreement in a manner such that the assigning Party will remain liable and responsible for the performance and observance of all of its duties and obligations hereunder. This Agreement shall be binding upon successors and permitted assigns of the
Parties. Any assignment not in accordance with this Section 12.4 will be null and void. 
 12.6 Performance by
Affiliates. The Parties recognize that each may perform some or all of its obligations under this Agreement through Affiliates or may exercise some or all of its rights under this Agreement through Affiliates, provided, however,
that each Party shall remain responsible and be guarantor of the performance by its Affiliates and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. In particular and without limitation,
all Affiliates of a Party that receive Confidential Information of the other Party pursuant to this Agreement shall be governed and bound by all obligations set forth in ARTICLE 7. Each Party will prohibit all of its Affiliates from taking
any action that such Party is prohibited from taking under this Agreement as if such Affiliates were parties to this Agreement. 

12.7 Relationship of the Parties. The Parties shall perform their obligations under this Agreement as independent contractors and
nothing in this Agreement is intended or will be deemed to constitute a partnership, agency or employer-employee relationship between the Parties. Neither Party will have any right, power or authority to assume, create, or incur any expense,
liability, or obligation, express or implied, on behalf of the other. 
 12.8 No Use of Names. Except as otherwise
required under applicable Law, or as otherwise permitted under Section 7.4, neither Party will use the name of the other Party in its advertising, press releases or promotional materials without the prior written consent of such other
Party. 
 12.9 Notices. Any notice, request, delivery, approval or consent required or permitted to be given under this
Agreement will be in writing and will be deemed to have been sufficiently given if delivered in person, transmitted by facsimile (receipt verified) or by express courier service (signature required) or five (5) days after it was sent by
registered letter, return receipt requested (or its equivalent); provided that no postal strike or other disruption is then in effect or comes into effect within two (2) days after such mailing, to the Party to which it is directed at
its address or facsimile number shown below or such other address or facsimile number as such Party will have last given by notice to the other Party. 
  

			
	If to Ligand:	  	Ligand Pharmaceuticals Incorporated
		  	11085 North Torrey Pines Road, Suite 300
		  	La Jolla, CA, 92037
		  	Attention: General Counsel
		  	Fax: (858) 550-7272

  
 26 

 With a copy to (which shall not constitute notice hereunder): 

 

			
	 :
	  	Latham & Watkins LLP
		  	12626 High Bluff Drive, Suite 400
		  	San Diego, CA, 92130
		  	Attention: Faye H. Russell, Esq.
		  	Fax: (858) 523-5450
		
	 If to Chiva:
	  	Chiva Pharmaceuticals, Inc.
		  	c/o 22nd Floor, Hang Lung Centre,
		  	2-20 Paterson Street, Causeway Bay,
		  	Hong Kong
		  	Attention: Legal Counsel
		  	 Fax: (852) 2577 3509

 12.10 Governing Law. The rights and obligations of the Parties under this Agreement shall be governed, and shall be interpreted, construed, and enforced, in all respects by the Law of the State of
California, without giving effect to any conflict of Law rule that would result in the application of the Law of any jurisdiction other than the internal Law of the State of California to the rights and duties of the Parties. 

12.11 Dispute Resolution. The Parties agree that the procedures set forth in this Section 12.11 shall be the exclusive
mechanism for resolving any bona fide disputes, controversies or claims (collectively, “Disputes”) between the Parties that arise from time to time pursuant to this Agreement relating to any Party’s rights and/or obligations
hereunder that cannot be resolved through good faith negotiation between the Parties. 
 (a) Executive
Mediation. Any Dispute shall first be referred to an Executive from each Party for attempted resolution by good faith negotiations. Any such Dispute shall be submitted to such Executives no later than [* * *] following such request by either Party. Such Executives shall attempt
in good faith to resolve any such Dispute [* * *] after submission of the Dispute. In the event the Executives are unable to resolve the Dispute, the Parties shall otherwise negotiate in good faith and use reasonable efforts to settle. 

(b) Arbitration. If the Parties are not able to fully settle a Dispute pursuant to Section 12.11(a) above, and a Party
wishes to pursue the matter, each such Dispute that is not an Excluded Claim shall be finally resolved by binding arbitration in accordance with the Commercial Arbitration Rules and Supplementary Procedures for Large Complex Disputes of the American
Arbitration Association (“AAA”), and judgment on the arbitration award may be entered in any court having jurisdiction thereof. 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 27 

 (1) The arbitration shall be conducted by a panel of three persons
experienced in the pharmaceutical business: within [* * *]
after initiation of arbitration, each Party shall select one person to act as arbitrator and the two Party-selected arbitrators shall select a third arbitrator within [* * *] of their appointment. If the arbitrators selected by the Parties are
unable or fail to agree upon the third arbitrator, the third arbitrator shall be appointed by the AAA. The place of arbitration shall be [* * *], and all proceedings and communications shall be in English. 

(2) Either Party may apply to the arbitrators for interim injunctive relief until the arbitration award is rendered or the controversy
is otherwise resolved. Either Party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any injunctive or provisional relief necessary to protect the rights or property of that Party pending the
arbitration award. The arbitrators shall have no authority to award punitive or any other type of damages not measured by a Party’s compensatory damages. Each Party shall bear its own costs and expenses and attorneys’ fees and [* * *].

 (3) Except to the extent necessary to confirm an award or as may be required by law, neither a Party nor an arbitrator may
disclose the existence, content, or results of an arbitration without the prior written consent of both Parties. In no event shall an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute,
controversy or claim would be barred by the applicable California statute of limitations. 
 (c) As used in this Section,
the term “Excluded Claim” shall mean a Dispute that concerns (a) the validity or infringement of a patent, trademark or copyright; or (b) any antitrust, anti-monopoly or competition law or regulation, whether or not statutory.
For all Excluded Claims, the Parties hereby submit to the exclusive jurisdiction of the courts of the State of California, in and for the County of San Diego, or of the United States of America for the Southern District of California. 

12.12 Headings. The article, section and subsection headings contained herein are for the purposes of convenience only and are not
intended to define or limit the contents of the articles, sections or subsections to which such headings apply. 
 12.13
Severability. When possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under Law, but, if any provision of this Agreement is held to be prohibited by or invalid under Law, such provision
will be ineffective but only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or of this Agreement. The Parties will make a good faith effort to replace the invalid or unenforceable provision with
a valid one which in its economic effect is most consistent with the invalid or unenforceable provision. 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

  
 28 

 12.14 Counterparts. This Agreement may be executed in counterparts (including by
facsimile or electronic signature), each of which shall be deemed an original and all of which together shall constitute one instrument. 
 [Signature Page Follows] 

  
 29 

 IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their
duly authorized representatives as of the Effective Date. 
  

									
	LIGAND PHARMACEUTICALS INCORPORATED	 		 	 CHIVA PHARMACEUTICALS, INC.
 (formerly, Elite Mind Investments Ltd.)

			
	(“Ligand”)	 		 	(“Chiva”)
					
	By:	 	 /s/ Charles Berkman
	 		 	By:	 	 /s/ Zhigian (David) Xi

	Name:	 	 Charles Berkman
	 		 	Name:	 	 Zhigian (David) Xi

	Title:	 	 Vice President, General Counsel & Secretary
	 		 	Title:	 	 Chief Executive Officer

  
 30 

 EXHIBIT A 

[* * *] 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

 EXHIBIT B 

[* * *] 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

 EXHIBIT C 
 (Form of Stock Purchase Agreement to be inserted here) 

 Schedule 1.31 
 HepDirect Patents 
  

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

											
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	
	 [* * *]

 
  

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	 [* * *]

					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	
	 [* * *]

					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

 Schedule 1.48 
 MB07133 Patents 
  

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
	
	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

 Schedule 1.58 
 Pradefovir Patents 
  

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]

					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

									
	 [* * *]

	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]
	  	 [* * *]

	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]
					
	 [* * *]
	  	[* * *]	  	[* * *]	  	[* * *]	  	[* * *]

  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions. 

 Schedule 5.1 

For each of Pradefovir and MB07133: 
 [* * *] 
  

 

	***	Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted
portions.Separation Agreement

 Exhibit 10.5 
 SEPARATION AGREEMENT 
 This Separation Agreement (the
“Agreement”) is entered into by and between, and shall inure to the benefit of and be binding upon, the following parties: 
 JOHN T. NESSER, III, hereinafter referred to as “Mr. Nesser”; and 
 MCDERMOTT, INC., hereinafter referred to as the “Company.” 

WITNESSETH: 
 WHEREAS, pursuant to the letter attached hereto as Exhibit A, Mr. Nesser has tendered his resignation effective July 29, 2011 (“Resignation Date”); and 

WHEREAS, the Company and Mr. Nesser mutually desire to establish and agree upon the terms and conditions of Mr. Nesser’s
separation from service. 
 NOW, THEREFORE, in consideration of the mutual promises and obligations set forth herein,
Mr. Nesser and the Company hereby agree as follows: 
  

	1.	Termination Date and Type. For purposes of interpreting and applying the provisions of the Restructuring Transaction Retention Agreement by and between
Mr. Nesser and McDermott International, Inc., dated as of December 10, 2009 (“Retention Agreement”), a copy of which is attached hereto as Exhibit B and incorporated herein by reference, (a) Mr. Nesser’s
date of termination shall be the Resignation Date, (b) Mr. Nesser’s termination of employment shall be treated as by Mr. Nesser for “Good Reason” as defined in the Retention Agreement, (c) any notice or cure period
described in Section XI(e)(iii) of the Retention Agreement shall be inapplicable, and (d) subject to complying with the requirements of this Agreement, Mr. Nesser shall be entitled to the benefits provided in this Agreement.

  

	2.	 Benefits and Payments Under Retention Agreement. Subject to the execution of this Agreement, including the Release in Paragraph 6 hereunder, by
Mr. Nesser and the lapse of the seven (7) day revocation period referenced in Paragraph 11 below (“Revocation Period”) without revocation of the Agreement or any part hereof by Mr. Nesser, Mr. Nesser

	 	 
shall be entitled to receive the payments and benefits detailed in Section I of the Retention Agreement, in accordance with the terms therein. All payments made pursuant to this Paragraph 2 shall
be subject to appropriate tax withholdings. The payments and benefits are subject to all the terms and conditions of this Agreement. 

  

	3.	Incentive Payments. During 2010, Mr. Nesser received the following incentive awards under the 2009 McDermott International, Inc. Long-Term Incentive Plan
(the “2009 LTIP”): 

  

	 	(a)	On March 4, 2010, a grant of 12,810 Restricted Stock Units which was adjusted in connection with the spin-off of The Babcock & Wilcox Company from
McDermott International, Inc. (“Spin-Off”) to 24,828 Restricted Stock Units (“2010 RSU Award”); and 

  

	 	(b)	On March 4, 2010, a grant of 18,996 nonqualified Stock Options which was adjusted in connection with the Spin-Off to 36,818 nonqualified Stock Options
(“2010 Option Award”). 

 Subject to the provisions of Paragraph 8 below, the 66 2/3% of each of
(i) the 2010 RSU Award and (ii) the 2010 Option Award which would, absent Mr. Nesser’s termination of employment, vest during the period between the Resignation Date and March 4, 2013 (“Extended Vesting
Period”) shall remain in full force and effect during the Extended Vesting Period and shall become vested and payable in accordance with the terms of the 2009 LTIP and the applicable Grant Agreement as if Mr. Nesser’s employment
had continued to the end of the Extended Vesting Period. Any other outstanding unvested equity awards granted to Mr. Nesser, including, but not limited to, the award granted to Mr. Nesser under Section II of the Retention Agreement, shall
be forfeited on the Resignation Date, provided, however, that the equity awards described in Section I(f) and Schedule A of the Retention Agreement shall vest as provided therein and in Paragraph 2 above. 

 

	4.	Retirement Benefits. Mr. Nesser shall be entitled to benefits under the McDermott (U.S.) Retirement Plan and under the Restoration of Retirement Income Plan
(the “Excess Plan”) in accordance with the applicable terms of each such plan. 

	5.	Consulting Services. During the period beginning on August 1, 2011 and ending on January 31, 2012 (the “Consulting Period”),
Mr. Nesser shall provide such cooperation and consulting services as the Company requests in accordance with the terms and conditions set forth in Exhibit C which is attached hereto and incorporated herein by reference. The Consulting Period
may be extended by written agreement of the Company and Mr. Nesser. It is expressly understood and agreed by the parties that in no event will the level of consulting services performed by Mr. Nesser hereunder exceed 20% of the average
level of services he performed over the 36 month period ending on the Resignation Date. 

  

	6.	 Release of Claims. In lieu of the release required by the Retention Agreement and in consideration of the foregoing, the adequacy of which is
hereby expressly acknowledged, Mr. Nesser hereby unconditionally and irrevocably releases and forever discharges, to the fullest extent applicable law permits, the Company, its predecessors, successors and assigns and past, present and future
affiliates, subsidiaries, divisions, parent corporations and joint ventures and all their respective past, present and future officers, directors, managers, shareholders, employee benefit plan administrators, employees and agents, individually and
in their respective capacities (each a “Releasee” and, collectively, “Releasees”) from any and every action, cause of action, complaint, claim, demand, administrative charge, legal right, compensation, obligation,
damages (including consequential, exemplary and punitive damages), liability, cost and/or expense (including attorney’s fees) that he has, may have or may be entitled to from or against the Releasees, whether legal, equitable or administrative,
in any forum or jurisdiction, whether known or unknown, foreseen or unforeseen, matured or unmatured, accrued or not accrued which arises directly or indirectly out of, or is based on or related in any way to Mr. Nesser’s employment with
or termination of employment from the Releasees, including, without limitation, any such matter arising from the negligence, gross negligence or willful misconduct of the Releasees, (together, the “Released Claims”); provided,
however, that this Release does not apply (a) to any claims arising solely and specifically under the Age Discrimination in Employment Act of 1967, as amended, arising after the date this Agreement is executed, (b) to any claim for
indemnification (including, without limitation, under the Company’s organizational documents or insurance policies) arising in connection with an action instituted by a third party against the Company, its affiliates

	 	 
or Mr. Nesser in his capacity as a former officer or director of the Company or its affiliates, or (c) to any claim arising from any breach or failure to perform this Agreement.

 The parties intend this Release to cover any and all such Released Claims, whether arising under any
employment contract (express or implied), policies, procedures or practices of any of the Releasees, and/or by any acts or omissions of any of the Releasees’ agents or employees or former agents or employees and/or whether arising under any
state or federal statute, including but not limited to Texas’ employment discrimination laws, all federal discrimination laws, the Age Discrimination in Employment Act of 1967, as amended, the Employee Retirement Income Security Act of 1974, as
amended, all local laws and ordinances and/or common law, without exception. As such, it is expressly acknowledged and agreed that this Release is a general release, representing a full and complete disposition and satisfaction of all of the
Company’s real or alleged legal obligations to Mr. Nesser with the exceptions noted above. 
 Mr. Nesser expressly
agrees that neither he nor any person acting on his behalf will file or permit to be filed any action for legal or equitable relief against the Releasees involving any matter related in any way to his employment with, or resignation from employment
with the Releasees, including the matters covered by the Released Claims. In the event that such an action is filed, Mr. Nesser agrees that the Releasees are entitled to legal and equitable remedies against him, including an award of
attorney’s fees. However, it is expressly understood and agreed that the foregoing sentence shall not apply to any charge filed by Mr. Nesser with the Equal Employment Opportunity Commission or to any action filed by Mr. Nesser that
is narrowly limited to seeking a determination as to the validity of this Agreement and enforcement thereof. Should Mr. Nesser file a charge with the Equal Employment Opportunity Commission, or should any governmental entity, agency, or
commission file a charge, action, complaint or lawsuit against any of the Releasees based on any Released Claim, Mr. Nesser agrees not to seek or accept any resulting relief whatsoever. 

 

	7.	 Undertakings By Mr. Nesser. Mr. Nesser shall immediately return to the Company any and all documents, records, files, reports,
memoranda, books, papers, plans, letters and 

	 	 
any other data in his possession regardless of the medium held or stored that relate in any way to the business of the Company or its past, present and future parent corporations, subsidiaries,
divisions, affiliates and/or joint ventures (the Company and each such entity a “Company Entity” and collectively, the “Company Entities”), other than any such data that the Company deems necessary for the provision
of consulting services requested pursuant to Paragraph 5 above, and any credit cards, keys, access cards, calling cards, computer equipment and software, telephone, facsimile or other equipment or property of the Company Entities. The Company agrees
that during the Consulting Period Mr. Nesser may retain his Company provided computer and mobile telephone. 

  

	8.	Confidentiality and Non-Competition Agreement. 

  

	 	(a)	Definition of Trade Secrets and Confidential Business Information. Mr. Nesser acknowledges and agrees that any and all non-public information regarding the
Company Entities and their customers (including but not limited to any and all information relating to their business practices, products, services, finances, customers, equipment, marketing programs and other business systems and materials,
management, strategy, profits and overhead) is confidential and the unauthorized disclosure of such confidential information will result in irreparable harm to the Company Entities. Such confidential information includes each Company Entity’s
property interest in its trade secrets, including, without limitation, its lists of customers and prospective customers, and other information that has recognized value and that is not generally available through other sources (“Trade
Secrets”), and information regarding its various products, services, procedures and systems that is treated as confidential by the Company Entity which may not rise to the level of a Trade Secret (“Confidential Business
Information”). Confidential Business Information does not include information that properly and lawfully has become generally known to the public other than as a result of the act or omission of Mr. Nesser. Collectively, Trade Secrets
and Confidential Business Information are referred to hereafter as “Confidential Information.” These obligations are in addition to any confidentiality obligations Mr. Nesser may have under any other agreements or arrangements
with a Company Entity. 

	 	(b)	Importance of Confidential Information. The parties hereby agree that Mr. Nesser will be provided with Confidential Information during the period beginning
with the execution of this Agreement and extending through the Consulting Period. By signing this Agreement, Mr. Nesser acknowledges delivery and receipt of Confidential Information. Mr. Nesser acknowledges that during the period beginning
with the execution of this Agreement and extending through the Consulting Period he will be making use of, acquiring, accessing and/or adding to such Confidential Information. Mr. Nesser further acknowledges that the preservation and protection
of the Confidential Information is an essential part of Mr. Nesser’s consulting with the Company and that Mr. Nesser has a duty of fidelity and trust to the Company Entities in handling the Confidential Information.

  

	 	(c)	Non-Disclosure or Misuse. Mr. Nesser agrees that he will not disclose or take away any of the Confidential Information, directly or indirectly, or use such
information in any way, except as required in the ordinary course of providing consulting services for the benefit of the Company or as may be required by law. 

 

	 	(d)	Return of Confidential Information. At the termination of the Consulting Period for any reason, all documents or other information containing or referring to the
Confidential Information of the Company Entities as may be in Mr. Nesser’s possession, or over which Mr. Nesser may have control, and all other documents, data, records, materials, notes, reports and other property of the Company
Entities retained by or provided to Mr. Nesser in connection with his performance of consulting services, regardless of whether prepared by Mr. Nesser, shall be returned by Mr. Nesser to the Company immediately, with no request being
required (and Mr. Nesser shall not retain, recreate or deliver to anyone else such information). 

  

	 	(e)	 Noncompetition Agreement. Mr. Nesser acknowledges and agrees that information, including the Confidential Information, Mr. Nesser has
acquired and will acquire in connection with the performance of consulting services will enable him to irreparably injure the Company if he should engage in competition during the period beginning with the execution of this Agreement and extending
through 

	 	 
the last day of the Consulting Period (“Non-Compete Period”). Ancillary to the above agreements and in consideration of the consulting fees, additional equity vesting pursuant to
Paragraph 3, receipt of the payments and benefits described in Section I of the Retention Agreement and Confidential Information provided to Mr. Nesser, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Mr. Nesser hereby agrees that the following covenants are reasonable and necessary protective covenants for the protection of the value of the agreements described in subparagraphs (a), (b), (c) and (d) above and
the other terms and conditions contained in this Agreement: 

  

	 	(i)	During the Non-Compete Period, Mr. Nesser shall not, directly or indirectly, without the prior written approval of Stephen M. Johnson on behalf of the Company, act
in any capacity for, be employed by, provide services to, or contract with any other company or entity engaged in Competing Services (a “Competitive Entity”), or acquire any interest of any type in any Competitive Entity; provided,
however, that the foregoing shall not be deemed to prohibit Mr. Nesser from acquiring, solely as an investment and through market purchases, securities of any Competitive Entity which are registered under Section 12(b) or 12(g) of the
Securities and Exchange Act of 1934 and which are publicly traded, so long as Mr. Nesser is not part of any control group of such Competitive Entity and such securities, including converted securities, do not constitute more than one percent of
the outstanding voting power of that entity. For the purposes of this Agreement, the phrase “Competing Services” shall mean any services that are the same as or similar to the services currently being provided or offered by the
Company Entities and/or which are provided or offered by the Company Entities during the Non-Compete Period. Competing Services include, but are not limited to, engineering services, construction services, installation services and project
management services to offshore oil and gas field development; 

  

	 	(ii)	 During the Non-Compete Period, Mr. Nesser shall not, directly or indirectly, solicit any Company Entity’s Protected Customers for the

	 	 
purpose of engaging in any business which is the same as or similar to the business in which a Company Entity is engaged. The phrase “Protected Customers” means all persons or
entities with whom Mr. Nesser has had contact with by virtue of Mr. Nesser’s position with a Company Entity, and to whom a Company Entity has sold any product or service, whether or not for compensation, within a period of three
(3) years prior to the time the Consulting Period terminates. 

  

	 	(iii)	During the Non-Compete Period, Mr. Nesser shall not, on his own behalf or on behalf of any other person or entity, solicit, divert or recruit any person who is,
during such time frame, an employee of a Company Entity to leave such employment or in any other manner attempt, directly or indirectly, to influence, induce, or encourage any employee of a Company Entity to leave the employment of the Company
Entity. 

  

	 	(iv)	Notwithstanding the foregoing, if Mr. Nesser provides professional legal services either as in-house or outside counsel to a person or an entity that competes with
a Company Entity, he shall not be subject to the enforcement provisions described in Paragraph 8(f) but shall be subject to the repayment and forfeiture provisions of Paragraph 8(h). 

It is expressly agreed by the parties that following the conclusion of the Non-Compete Period, no further restrictions shall apply under
this Section 8(e). 
  

	 	(f)	 Enforcement of Covenants. Either party may seek a temporary restraining order, preliminary injunction, specific performance or other equitable
relief regarding the other party’s obligations set forth in this Paragraph 8 before a court of law pending a final resolution of the disputes between the parties before an arbitrator, and either party may seek a judgment including a permanent
injunction, if appropriate, from the court based on the final decision of the arbitrator. In addition, in the event that the Company determines that Mr. Nesser has breached any term of this Paragraph 8, in addition to any other remedies at law
or in equity the Company may have available to it, it is agreed that the Company shall be entitled, upon application to any court of proper jurisdiction, to a temporary restraining order or preliminary injunction (without the necessity of
(i) proving 

	 	 
irreparable harm, (ii) establishing that monetary damages are inadequate, or (iii) posting any bond with respect thereto) against Mr. Nesser prohibiting such breach or attempted or
threatened breach by proving only the existence of such breach or attempted or threatened breach. It is expressly agreed by the parties that each of the parties shall act reasonably in any actions taken under the terms of this Section 8(f).

  

	 	(g)	Right of Court or Arbitrator to Reform Restrictions. The Company and Mr. Nesser state that it was their intent to enter into a valid and enforceable
agreement. Mr. Nesser and the Company hereby acknowledge the reasonableness of the restrictions set forth in this Paragraph 8, including the reasonableness of the geographic area, duration as to time and scope of activity restrained.
Mr. Nesser agrees that if a court or arbitrator finds that this Paragraph 8 contains limitations as to geographic area, time or scope of activity to be restrained that are not reasonable and impose a greater restraint than is necessary to
protect the goodwill or other business interest of the Company Entities, the court or arbitrator may reform the covenants to the extent necessary to cause the limitations contained in this Paragraph 8 as to geographic area, time or scope of activity
to be reasonable and to impose a restraint that is not greater than necessary to protect the goodwill or other business interest of the Company Entities and enforce Paragraph 8 of this Agreement. 

 

	 	(h)	 Repayment and Forfeiture. Mr. Nesser agrees that in the event that (i) he breaches any term of Paragraph 6 or Paragraph 8 of this
Agreement, or (ii) Mr. Nesser challenges the validity of all or any part of Paragraph 8, and all or any part of Paragraph 8 is found invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction or an arbitrator in a
proceeding between Mr. Nesser and a Company Entity, in addition to any other remedies at law or in equity the Company may have available to it, the Company shall not be obligated to make any of the payments and may cease to make such payments
or to provide for any of the benefits specified in Paragraphs 2 and 3 of this Agreement, and shall be entitled to recoup from Mr. Nesser (I) any and all of the value of the 2010 RSU Award and/or the 2010 Option Award that have vested
pursuant to 

	 	 
Paragraph 3 and (II) consulting fees under Exhibit C hereto, but in each case only to the extent paid or vesting on and/or following the Resignation Date through either (A) the date of a
material breach by Mr. Nesser of the provisions of Paragraph 6 or 8, which breach continues without having been cured within fifteen (15) days after written notice to Mr. Nesser specifying the breach in reasonable detail, or
(B) the date of the determination of invalidity or unenforceability by the court or arbitrator, as applicable. 

  

	9.	Miscellaneous Provisions. 

  

	 	(a)	Failure on the part of the Company or Mr. Nesser at any time to insist on strict compliance by the other party with any provisions of this Agreement shall not
constitute a waiver of either party’s obligations in respect thereof, or of either party’s right hereunder to require strict compliance therewith in the future. 

 

	 	(b)	The obligations set forth in this Agreement are severable and divisible, and the unenforceability of any clause or portion thereof shall not affect the enforceability
of the remainder of such clause or of any other obligation contained herein. 

  

	10.	Entire Agreement. Mr. Nesser and the Company agree and acknowledge that this Agreement, including the Exhibits hereto, contains and comprises the entire
agreement and understanding between the parties, that no other representation, promise, covenant or agreement of any kind whatsoever has been made to cause any party to execute this Agreement, and that all agreements and understandings between the
parties are embodied and expressed in this Agreement. The parties also agree that the terms of this Agreement shall not be amended or changed except in writing and signed by Mr. Nesser and a duly authorized agent of the Company. The parties to
this Agreement further agree that this Agreement shall be binding on and inure to the benefit of Mr. Nesser, the Company and the Releasees as defined in this Agreement. Any other agreements or understandings between the parties, whether written
or oral, are hereby null and void. Notwithstanding the foregoing, except as otherwise specified in this Agreement, the Retention Agreement shall remain in full force and effect in accordance with its terms. 

 

	11.	 Timing and Consultation with Counsel. Mr. Nesser acknowledges that he has been given a reasonable period of time, not less than twenty-one
(21) days, within which to consider 

	 	 
this Agreement and has been advised to discuss the terms of this Agreement with legal counsel. Mr. Nesser acknowledges that this Agreement was offered to him on May 6, 2011, and he was
advised that if accepted (i) it must be executed on or prior to May 27, 2011, and (ii) the Agreement could be revoked, in writing, for up to seven (7) days following the date of such acceptance. Based upon his review,
Mr. Nesser acknowledges that he fully and completely understands and accepts the terms of this Agreement, including the Release in Paragraph 6, and enters into it freely, voluntarily and of his own free will. 

 

	12.	Applicable Law. This Agreement shall be interpreted and construed in accordance with the laws of the State of Texas. 

 

	13.	Section 409A. This Agreement is intended to provide payments that are exempt from or compliant with the provisions of Section 409A of the Internal
Revenue Code of 1986 (the “Code”) and related regulations and Treasury pronouncements (“Section 409A”), and the Agreement shall be interpreted accordingly. Notwithstanding anything herein to the contrary, if on the
date of his separation from service Mr. Nesser is a “specified employee,” as defined in Section 409A, then all or a portion of any severance payments, or benefits under this Agreement that would be subject to the additional tax
provided by Section 409A(a)(1)(B) of the Code if not delayed as required by Section 409A(a)(2)(B)(i) of the Code shall be delayed until the first day of the seventh month following his separation from service date (or, if earlier,
Mr. Nesser’s date of death) and shall be paid as a lump sum (without interest) on such date. For purposes of this Agreement, a termination of Mr. Nesser’s employment must be a “separation from service” for purposes of
Section 409A. 

 [Signature page follows] 

 I HAVE READ THE FOREGOING SEPARATION AGREEMENT, FULLY UNDERSTAND IT AND HAVE VOLUNTARILY EXECUTED IT ON THE
DATE WRITTEN BELOW, SIGNIFYING THEREBY MY ASSENT TO, AND WILLINGNESS TO BE BOUND BY, ITS TERMS: 
  

							
	Date:	 	 May 10, 2011
	 		 	 /s/ John T. Nesser, III

		 		 		 	 John T. Nesser, III

 Before me, a Notary Public in and for Harris County, Texas, and for Mr. Nesser, personally appeared the above-named Mr. Nesser, who acknowledged that he did sign the foregoing instrument, and
that the same is his free act and deed. 
 IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Houston,
Texas, this 10 day of May, 2011. 
  

			
	 /s/ Angela R. Smith

	NOTARY PUBLIC
	
	McDERMOTT, INC.
		
	By:	 	 /s/ Stephen M. Johnson

Before me, a Notary Public in and for Harris County, Texas, personally appeared the above-named McDermott, Inc. through Stephen M.
Johnson, its President and Chief Executive Officer, who acknowledged that he did sign the foregoing instrument for and on behalf of McDermott, Inc., and that the same is the free act and deed of McDermott, Inc. and the free act and deed of him as
its agent. 
 IN WITNESS WHEREOF, I have hereunto set my hand and official seal at Houston, Texas, this 10 day of May, 2011.

  

	
	 /s/ Angela R. Smith

	NOTARY PUBLIC

 EXHIBIT A 

May 10, 2011 
 Stephen M.
Johnson, President and CEO 
 McDermott International, Inc. 
 757 N. Eldridge Parkway 
 Houston, TX 77079 

 

	RE:	Resignation 

 Dear Mr. Johnson:

 I hereby tender my resignation from employment with McDermott, Inc. and from all officer, director, manager and other
positions and appointments held with McDermott International, Inc. and its subsidiaries, affiliates, divisions and/or joint ventures, including but not limited to those as reflected on the attachment hereto, effective as of July 29, 2011.

  

	
	Very truly yours,
	
	 /s/ John T. Nesser, III

	 John T. Nesser, III

 Corporate Information System 
 Positions Held by Nesser, John, T 
 Legal Entity Types and Status: All, Current

 Foreign and Domestic Entities, Current Positions Only 
 Committee Type: All 
  

							
	 LE #
	  	 Legal Entity Name
	  	 Title
	  	Current
	 0159
	  	Delta Catalytic (Holland) B.V.	  	Managing Director	  	Y
				
	 0301
	  	DHEC Corporation	  	Director	  	Y
				
		  		  	President	  	Y
				
	 0249
	  	Global Energy - McDermott Limited	  	Director	  	Y
				
		  		  	President	  	Y
				
	 0309
	  	Hudson Engineering (Canada), Ltd.	  	President	  	Y
				
	 2036
	  	J. Ray Holdings, Inc.	  	Director	  	Y
				
	 0220
	  	J. Ray McDermott Far East, Inc.	  	Director	  	Y
				
	 0211
	  	J. Ray McDermott Holdings, LLC	  	Executive Vice President and Chief Operating Officer	  	Y
				
	 0627
	  	J. Ray McDermott International Vessels, Ltd.	  	Director	  	Y
				
	 0602
	  	J. Ray McDermott International, Inc.	  	Executive Vice President and Chief Operating Officer	  	Y
				
	 0160
	  	J. Ray McDermott Investments B.V.	  	Managing Director	  	Y
				
	 0239
	  	J. Ray McDermott Solutions, Inc.	  	Director	  	Y
				
	 0625
	  	J. Ray McDermott Technology, Inc.	  	Director	  	Y
				
		  		  	President	  	Y
				
	 1960
	  	J. Ray McDermott Underwater Services, Inc.	  	Director	  	Y
				
		  		  	President	  	Y
				
	 0248
	  	J. Ray McDermott West Africa Holdings, Inc.	  	Director	  	Y

 Corporate Information System 
 Positions Held by Nesser, John, T 
 Legal Entity Types and Status: All, Current

 Foreign and Domestic Entities, Current Positions Only 
 Committee Type: All 
  

							
	 LE #
	  	 Legal Entity Name
	  	 Title
	  	Current
	0248	  	J. Ray McDermott West Africa Holdings, Inc.	  	President	  	Y
				
	0244	  	J. Ray McDermott West Africa, Inc.	  	Director	  	Y
				
		  		  	President	  	Y
				
	0207	  	J. Ray McDermott, S.A.	  	Director	  	Y
				
		  		  	Executive Vice President and Chief Operating Officer	  	Y
				
	0183	  	McDermott Azerbaijan Marine Construction, Inc.	  	Director	  	Y
				
		  		  	President	  	Y
				
	1950	  	McDermott Engineering, LLC	  	Manager	  	Y
				
	0133	  	McDermott Gulf Operating Company, Inc.	  	Director	  	Y
				
	0119	  	McDermott International Marine Investments N.V.	  	Managing Director	  	Y
				
	0213	  	McDermott International Marketing, Inc.	  	Director	  	Y
				
		  		  	President	  	Y
				
	0130	  	McDermott International Trading Co., Inc.	  	Director	  	Y
				
		  		  	President	  	Y
				
	1971	  	McDermott International Vessels, Inc.	  	Director	  	Y
				
	0100	  	McDermott International, Inc.	  	Executive Vice President and Chief Operating Officer	  	Y
				
	0136	  	McDermott Middle East, Inc.	  	Director	  	Y
				
	0135	  	McDermott Offshore Services Company, Inc.	  	Director	  	Y

 Corporate Information System 
 Positions Held by Nesser, John, T 
 Legal Entity Types and Status: All, Current

 Foreign and Domestic Entities, Current Positions Only 
 Committee Type: All 
  

							
	 LE #
	  	 Legal Entity Name
	  	 Title
	  	Current
	0135	  	McDermott Offshore Services Company, Inc.	  	President	  	Y
				
	0176	  	McDermott Old JV Office, Inc.	  	Director	  	Y
				
		  		  	President	  	Y
				
	0390	  	McDermott Overseas, Inc.	  	Director	  	Y
				
		  		  	President	  	Y
				
	0306	  	McDermott Subsea Engineering, Inc.	  	Director	  	Y
				
	0320	  	McDermott Trade Corporation	  	Director	  	Y
				
		  		  	President	  	Y
				
	0601	  	McDermott, Inc.	  	Executive Vice President and Chief Operating Officer	  	Y
				
	0612	  	Offshore Pipelines International, Ltd.	  	Director	  	Y
				
		  		  	President	  	Y
				
	0626	  	OPI Vessels, Inc.	  	Director	  	Y
				
		  		  	President	  	Y
				
	0623	  	OPMI, Ltd.	  	Director	  	Y
				
		  		  	President	  	Y
				
	0636	  	Sabine River Realty, Inc.	  	Director	  	Y
				
		  		  	President	  	Y
				
	0640	  	SparTEC, Inc.	  	Director	  	Y
				
	0145	  	Varsy International N.V.	  	Managing Director	  	Y

 EXHIBIT B 

RESTRUCTURING TRANSACTION 
 RETENTION AGREEMENT 
 THIS AGREEMENT is made by and
between McDermott International, Inc., a corporation duly organized under the laws of the Republic of Panama (the “Company”) and John T. Nesser, III (“Employee”) as of the
10th day of December, 2009 (this “Agreement”).

 In consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby expressly acknowledged, the parties hereto agree as follows: 
 If the Company, with
the prior approval of the Board of Directors of the Company, engages in a transaction that results in the sale or other disposition of all or substantially all of the operations of either of its subsidiaries The Babcock & Wilcox Company or
J. Ray McDermott, S.A. (each an “Operating Sub” and, together, the “Operating Subs”), whether by sale of the capital stock or assets of one or both of the Operating Subs, spinoff of one or both of the Operating Subs or otherwise,
with an Effective Date (this term and other terms that are capitalized (but not otherwise defined herein) are used as defined in Section XIII of this Agreement) within the 24-month period beginning on the date of this Agreement (a
“Restructuring Transaction”), Employee shall be entitled to compensation and benefits under the circumstances set out below. In addition, if Employee’s employment is terminated under certain circumstances set out below before a
Restructuring Transaction, Employee will be entitled to the compensation and benefits set out below. The sale or disposition of less than 100% of the assets or stock of an Operating Sub shall not be considered a sale or other disposition of
substantially all of the operations of such Operating Sub unless it is a sale or other disposition of at least 80% of the stock or assets of such Operating Sub. 
  

	I.	Obligations of the Company or a Successor Upon Termination of Employee In Connection With or After a Restructuring Transaction. 

In the event that either 
  

	 	(X)	while employed by the Company, Employee’s employment by the Company is terminated following the date of this Agreement and before the earlier of (A) the
termination of this Agreement in accordance with Section XII and (B) the one-year anniversary of the Effective Date of a Restructuring Transaction, either (i) by the Company for any reason other than Cause or Employee’s Disability or
(ii) by Employee for Good Reason or 

  

	 	(Y)	while employed by a Successor, Employee’s employment by such Successor is terminated following the Effective Date of a Restructuring Transaction and before the
one-year anniversary of such Effective Date, either (i) by the Successor for any reason other than Cause or Employee’s Disability or (ii) by Employee for Good Reason (in the case of either of the immediately preceding clause
(i) or this clause (ii), the Successor being substituted for the Company in the definitions of Cause and Good Reason herein), 

  
 1 

 then, in either case, the Company or such Successor, as applicable, shall (in all cases,
subject to the proviso in clause (f) below with respect to awards described in that clause, no later than March 15 following the year in which Employee so terminates); provided that by such date, Employee has signed an agreement that is no
longer subject to rescission prepared by the Company or Successor, as applicable, which is solely a release of the Company, Successor (if applicable), and each of their respective affiliates, directors, officers and other customary persons from any
claim or liability arising out of or related to Employee’s employment with or termination from the Company or a Successor, except for amounts to which Employee is legally entitled pursuant to employee benefit plans or this Agreement, and rights
to insurance coverage or indemnification: 
  

	 	(a)	pay to Employee within 30 days after the date of termination of Employee’s employment (or such earlier time as may be required by applicable law) the Accrued
Benefits; 

  

	 	(b)	in the event that a bonus is paid after the date of Employee’s termination of employment under the Company’s or such Successor’s Executive Incentive
Compensation Plan (such plan or any successor or replacement plan, including any annual bonus plan of such Successor, in any case in which Employee was a participant immediately prior to such termination being hereinafter referred to as the
“EICP”), as applicable, for the year prior to the year in which the termination takes place (the “Measurement Period”), pay to Employee in a lump sum, at the same time such bonus is paid to other participants in the EICP, a cash
bonus equal to the product of the multiplier used for Employee’s position during the Measurement Period and Employee’s annual base salary for the Measurement Period; 

 

	 	(c)	pay to Employee in a lump sum, in cash, within 30 days after the date of termination of Employee’s employment, a payment equal to the product of Employee’s
target bonus under the EICP as in effect immediately prior to the date of termination and a fraction, the numerator of which is the number of days that have elapsed in the year in which the termination takes place through the date of termination of
Employee’s employment and the denominator of which is 365; 

  

	 	(d)	pay to Employee in a lump sum, in cash, as soon as administratively practicable after the date of termination of Employee’s employment, 200% of the sum of
(1) Employee’s annual base salary as in effect immediately prior to the date of termination of Employee’s employment and (2) Employee’s target bonus under the EICP as in effect immediately prior to the date of termination;

  

	 	(e)	 (1) pay to Employee in a lump sum, in cash, within 30 days after the date of termination of Employee’s employment, a payment equal to two times
the full annual cost of coverage for medical, dental and vision benefits provided to 

  
 2 

	 	 
Employee and Employee’s covered dependents by the Company and, if applicable, a Successor for the year in which Employee’s termination takes place and (2) permit Employee and
Employee’s covered dependents to be covered under the Company’s, or if applicable, a Successor’s medical, dental and vision benefits for 48 months provided Employee pays the full then applicable COBRA premium;

  

	 	(f)	as of the date of Employee’s termination of employment, cause Employee to have a fully vested and nonforfeitable interest in each of the awards identified on the
attached Schedule A (as the same may be modified pursuant to the terms of the applicable plans and award agreements in connection with the Restructuring Transaction), and to the extent applicable immediately pay such awards to Employee; provided
that none of the awards subject to Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), will be paid on a date earlier than as provided in the applicable award agreements without regard to this Agreement;

  

	 	(g)	as of the date of Employee’s termination of employment, cause Employee to have a fully vested and nonforfeitable interest in Employee’s account balance in the
McDermott International, Inc. New Supplemental Executive Retirement Plan (“SERP”); provided that, notwithstanding anything to the contrary, Employee’s SERP benefits shall be distributed in accordance with the terms of the SERP; and

  

	 	(h)	pay to Employee within 30 days after the date of termination of Employee’s employment an amount equal to the portion of Employee’s account under the Thrift
Plan for Employees of McDermott Incorporated and Participating Subsidiary and Affiliated Companies that was not vested as of the date of termination of Employee’s employment. 

Notwithstanding the foregoing provisions of Section I, payments and benefits shall be subject to reduction as set out in Schedule B.

  

	II.	Obligations of the Company if Employee remains employed through the Effective Date of a Restructuring Transaction. 

In the event that Employee’s employment by the Company is not terminated as of the Effective Date of the Restructuring Transaction
under circumstances entitling Employee to benefits under Section I above, and if Employee has remained employed with the Company through the Effective Date of the Restructuring Transaction, then the Company or, if applicable, the Successor shall
cause Employee to be granted the number of whole shares of restricted stock under the Company’s or Successor’s, as applicable, stock plan, as near equal in value to, but not greater than, 50% of the amount described in Section I(d) above,
on terms and conditions set forth in the grant agreement approved in accordance with such stock plan; provided, however, the restricted stock shall vest on the first anniversary of the Effective Date of the Restructuring Transaction if, and only if,
Employee remains employed with the Company or the Successor through such first anniversary. 

  
 3 

	III.	Participation In Other Company Programs. 

 Nothing in this Agreement shall prevent or limit Employee’s continuing or future participation in any plan, program, policy or practice provided by the Company for which Employee may qualify, nor
shall anything herein limit or otherwise affect such rights as Employee may have under any other contract or agreement with the Company, except as provided in Section X of this Agreement. Amounts which are vested benefits or which Employee is
otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company at or subsequent to the date of termination of Employee’s employment shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly modified by this Agreement. Notwithstanding the foregoing, it is expressly understood and acknowledged by Employee that any payment by the Company or a Successor under Section
I of this Agreement shall be in lieu of any obligation on the part of the Company or such Successor for payment of severance benefits under the Severance Plan for Employees of McDermott Incorporated and Participating Subsidiary and Affiliated
Companies or any successor thereto or any other plan, policy or agreement of the Company or such Successor in the event of termination of Employee’s employment as provided in Section I of this Agreement with the Company or such Successor during
the one-year period following the Effective Date of a Restructuring Transaction. 
  

	IV.	Confidential and Proprietary Information. 

 Employee acknowledges and agrees that any and all non-public information regarding the Company, any of its Subsidiaries and its or their customers (including but not limited to any and all information
relating to its or their business practices, products, services, finances, management, strategy, profits and overhead) is confidential and the unauthorized disclosure of such confidential information will result in irreparable harm to the Company.
Employee shall not, during Employee’s employment by the Company or any of its Subsidiaries and for a period of five years after termination of such employment (or such shorter period as may be required by law), disclose or permit the disclosure
of any such confidential information to any person other than an employee or director of the Company or its Subsidiaries or any successor thereto or an individual engaged by the Company or its Subsidiaries or any successor thereto to render
professional services to the Company or its Subsidiaries under circumstances that require such person to maintain the confidentiality of such information, except as such disclosure may be required by law. The provisions of this Section IV shall
survive any termination of this Agreement. For purposes of this Section IV, the term “confidential information” shall not include information that was or becomes generally available to the public other than as a result of disclosure by
Employee. Employee acknowledges that the execution of this Agreement and the payments described in Section I of this Agreement constitute consideration for the limitations on activities set forth in this Section IV, the adequacy of which is hereby
expressly acknowledged by Employee. Employee understands and agrees that the Company shall suffer irreparable harm if Employee breaches Section IV of this Agreement, and that monetary damages shall be inadequate to address any such breach.
Accordingly, Employee agrees that the Company shall have the right, to the extent permitted by applicable law, and in addition to any other rights or remedies it may 

  
 4 

 
have, to obtain from any court of competent jurisdiction, injunctive relief to restrain any breach or threatened breach hereof or otherwise to specifically enforce the provisions hereof. For
purposes of this Section IV, the term “Company” shall include a Successor. 
  

	V.	Notices. 

 All notices and other
communications provided for by this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered by hand, (b) sent by facsimile to the facsimile number given below, provided that a copy is also sent by a
nationally recognized overnight delivery service, (c) the day after being sent by a nationally recognized overnight delivery service, or (d) three days after being mailed by United States Certified Mail, return receipt requested, postage
prepaid, addressed as follows: 
  

			
	If to Employee:	  	 John T. Nesser, III
 874
Country Lane
 Houston, Texas 77024

		
	 Facsimile:
	  	713-467-2336
	
	If to the Company or a Successor:
	
	 McDermott International, Inc.

Vice President, Human Resources
 777 N. Eldridge Parkway
 Houston, TX 77079

		
	 Facsimile:
	  	281-870-5095

 or to such other address as
Employee, the Company or a Successor may hereafter specify in a notice furnished in writing in accordance with this Section V. 
  

	VI.	Governing Law. 

 The provisions
of this Agreement shall be interpreted and construed in accordance with, and enforcement may be made under, the law of the State of Texas without giving effect to any principles of conflict of laws thereof which would result in the application of
the laws of any other jurisdiction. 
  

	VII.	Successors and Assigns. 

  

	 	(a)	This Agreement is personal to Employee and, without the prior written consent of the Company, shall not be assignable by Employee otherwise than by will or the laws of
descent and distribution. 

  
 5 

	 	(b)	This Agreement shall be binding upon and shall inure to the benefit of Employee, and of the Company and any Successor and their respective successors and assigns.

  

	 	(c)	The Company will require that any successor to all or substantially all of its business and/or assets (other than a Successor, as to which the last sentence of this
Section VII(c) shall apply) (whether such successor acquires such business and/or assets directly or indirectly, and whether by purchase, merger, consolidation or otherwise) expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as herein defined and any such successor to its business and/or assets.
In the event that Employee becomes employed by a Successor in connection with a Restructuring Transaction, the Company shall require such Successor to expressly assume and adopt this Agreement and to honor the terms and conditions of this Agreement
applicable to such Successor, unless Employee terminates Employee’s employment within thirty-one days after the Effective Date of the Restructuring Transaction for a Good Reason event which occurs upon the consummation of such Restructuring
Transaction (in which case the Company shall remain obligated under this Agreement). 

  

	VIII.	Employment by Subsidiaries. 

 If
Employee is not employed by McDermott International, Inc., but is only employed by a Subsidiary of McDermott International, Inc., then, except for purposes of determining whether a Restructuring Transaction has occurred, (a) the
“Company” as defined herein shall be deemed to include such Subsidiary, and (b) termination of employment shall be determined with reference to Employee’s employment by such Subsidiary, but, in each case, only if such Subsidiary
is not a Successor. Further, the Company agrees that it will perform its obligations hereunder without regard to whether Employee is employed by the Company or by a Subsidiary of the Company. 

 

	IX.	Severability. 

 If any provision
or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by
applicable law. 
  

	X.	Entire Agreement; Amendment. 

This Agreement sets forth the entire Agreement of the parties hereto and supersedes all prior agreements, understandings and covenants
between the parties with respect to the subject matter hereof; provided that: if Employee is entitled to payments and benefits under both Section I of this Agreement and the Change in Control Agreement between the Company and Employee, dated as of
October 1, 2008 (the “Change in Control Agreement”), Employee will receive payments and benefits only under Section I of this 

  
 6 

 
Agreement (and not under the Change in Control Agreement), except that Section I(f) of the Change in Control Agreement will continue to apply, with the payments (if any) under such Section I(f)
limited to those which would have been payable had Employee received the payments and benefits under the Change in Control Agreement (and not under this Agreement) (it being the intention of the parties hereto that, in no event, shall substantially
the same benefits become payable under both the Change in Control Agreement and Section I of this Agreement). This Agreement may be amended or terminated (other than pursuant to Section XII of this Agreement) only by mutual agreement of the parties
in writing. 
  

	XI.	Miscellaneous. 

  

	 	(a)	The captions and headings of this Agreement are not part of the provisions hereof and shall have no force or effect. 

 

	 	(b)	The Company (or a Successor) shall be entitled to withhold from any amounts payable under this Agreement such Federal, state, local, foreign or excise taxes as shall be
required or permitted to be withheld pursuant to any applicable law or regulation. 

  

	 	(c)	Employee’s or the Company’s (or a Successor’s) failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any
right Employee or the Company (or a Successor) may have hereunder, including, without limitation, the right of Employee to terminate employment for Good Reason pursuant to paragraph (f) of Section XIII of this Agreement, shall not be deemed to
be a waiver of such provision or right or any other provision or right of this Agreement. 

  

	 	(d)	Employee and the Company acknowledge that, except as may otherwise be provided under any other written agreement between Employee and the Company, the employment of
Employee by the Company is “at will.” 

  

	 	(e)	For purposes of this Agreement, the date of termination of Employee’s employment shall be: (i) if Employee’s employment is terminated by the Company (or
a Successor) for Cause, the date on which the Company (or a Successor) delivers to Employee the resolution referred to in the last sentence of Section XIII, paragraph (c), or, with respect to a termination as described in this Agreement under
Section XIII, paragraph (c)(iii), the date on which the Company (or a Successor) notifies Employee of such termination, (ii) if Employee’s employment is terminated by the Company (or a Successor) for a reason other than Cause (including on
account of Disability), the date on which the Company (or a Successor) notifies Employee of such termination, or such later date as is reflected in such notification, (iii) if Employee’s employment is terminated by Employee for Good
Reason, the date on which Employee notifies the Company (or a Successor) of such termination (after having given the Company (or such Successor) notice and a 30-day cure period), or (iv) if Employee’s employment is terminated by reason of
death, the date of death of Employee. 

  
 7 

	 	(f)	This Agreement may be executed in two counterparts, each of which shall be deemed an original and together shall constitute one and the same agreement, with one
counterpart being delivered to each party hereto. 

  

	 	(g)	In the event Employee’s employment is terminated (i) by the Company (or a Successor) for Cause or as a result of Employee’s Disability, (ii) by
Employee without Good Reason, or (iii) on account of Employee’s death, Employee shall not be entitled to the payments described in Section 1 of this Agreement. 

 

	XII.	Term. 

 This Agreement shall
terminate on the earliest to occur of (i) the date one year after the Effective Date of a Restructuring Transaction, or (ii) the date on which Employee’s employment with the Company (or a Successor) is terminated; provided, however,
that if Employee’s employment with the Company (or a Successor) is terminated under any of the circumstances described in Section I of this Agreement, Employee’s rights hereunder shall continue following the termination of Employee’s
employment until all benefits to which Employee is entitled hereunder has been paid and the Company’s (or a Successor’s) rights hereunder shall continue until all obligations owed to it hereunder have been satisfied. Notwithstanding the
foregoing: (a) if no Restructuring Transaction shall have been completed with an Effective Date on or before the second anniversary of the date of this Agreement, then this Agreement shall automatically terminate on such second anniversary; and
(b) the provisions of this Section XII and Sections II, XIII and XIV shall survive any termination of this Agreement. 
  

	XIII.	Definitions. 

 For purposes of
this Agreement, the following terms shall have the meanings given them in this Section XIII. 
  

	 	(a)	“Accrued Benefits” shall mean: 

  

	 	(i)	Any portion of Employee’s Annual Base Salary earned through the date of termination of Employee’s employment and not yet paid; 

 

	 	(ii)	Reimbursement for any and all amounts advanced in connection with Employee’s employment for reasonable and necessary expenses incurred by Employee through the date
of termination of Employee’s employment in accordance with the Company’s (or a Successor’s) policies and procedures on reimbursement of expenses; 

 

	 	(iii)	Any earned vacation pay not theretofore used or paid in accordance with the Company’s (or a Successor’s) policy for payment of earned and unused vacation
time; and 

  

	 	(iv)	 All other payments and benefits to which Employee may be entitled under the terms of any applicable compensation arrangement or benefit plan or program
of the Company (or a Successor) that do not specify the time of 

  
 8 

	 	 
distribution; provided that Accrued Benefits shall not include any entitlement to severance under any severance policy of the Company (or such Successor) generally applicable to the salaried
employees of the Company (or such Successor). 

  

	 	(b)	“Annual Base Salary” shall mean Employee’s annual rate of pay excluding all other elements of compensation such as, without limitation, bonuses,
perquisites, expatriate or hardship premiums, restricted stock awards, stock options and retirement and welfare benefits. 

  

	 	(c)	“Cause” shall mean: 

  

	 	(i)	the willful and continued failure of Employee to perform substantially Employee’s duties with the Company (occasioned by reason other than physical or mental
illness or disability of Employee) after a written demand for substantial performance is delivered to Employee by the Compensation Committee of the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which
the Compensation Committee of the Board or the Chief Executive Officer believes that Employee has not substantially performed Employee’s duties, after which Employee shall have thirty days to defend or remedy such failure to substantially
perform Employee’s duties; 

  

	 	(ii)	the willful engaging by Employee in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company; or 

 

	 	(iii)	the conviction of Employee with no further possibility of appeal or, or plea of guilty or nolo contendere by Employee to, any felony. 

The cessation of employment of Employee under subparagraph (i) and (ii) above shall not be deemed to be for “Cause”
unless and until there shall have been delivered to Employee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Compensation Committee of the Board of Directors of
the Company at a meeting of such Committee called and held for such purpose (after reasonable notice is provided to Employee and Employee is given an opportunity, together with Employee’s counsel, to be heard before such Committee), finding
that, in the good faith opinion of such Committee, Employee is guilty of the conduct described in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail. 

 

	 	(d)	“Disability” shall mean circumstances that would qualify Employee for long-term disability benefits under the Company’s Long-Term Disability Plan as in
effect immediately prior to the Restructuring Transaction, whether or not such Plan remains in effect subsequent to the Restructuring Transaction. 

  

	 	(e)	“Effective Date” with respect to a Restructuring Transaction for purposes of this Agreement shall be the effective date of date of the consummation of the
spinoff or split off (i.e., the date shares of the Subsidiary subject to the spinoff or split off are first distributed to the Company’s stockholders) or sale (i.e., the closing date for the sale) that results in the completion of
the Restructuring Transaction. 

  
 9 

	 	(f)	“Good Reason” shall mean: 

  

	 	(i)	any action by the Company which results in a material diminution in Employee’s position, authority, duties or responsibilities immediately prior to the date of
this Agreement; but, for the avoidance of doubt, if Employee has a position with either the Company or a Successor and, in either case, the employer is publicly traded, a material diminution in position, authority, duties or responsibilities will
not have occurred if Employee has a position, authority, duties and responsibilities substantially the same as those attendant to Employee’s position with the Company immediately prior to the date of this Agreement (notwithstanding that the
business operations of the Company or such Successor may be smaller or less complex). 

  

	 	(ii)	Requiring Employee, without Employee’s consent, to be based at any office or location other than the office or location at which Employee was employed immediately
following the date of this Agreement; provided, however, that any such relocation requests shall not be grounds for resignation with Good Reason if such relocation is within a fifty mile radius of the location at which Employee was employed
immediately following the date of this Agreement or such relocation does not result in an increase in Employee’s actual commuting distance from his principal residence to Employee’s new office or location; 

 

	 	(iii)	a material reduction in Employee’s Annual Base Salary in effect immediately prior to the date of this Agreement or a material reduction in the target multiplier
used to calculate the annual bonus awarded to Employee below the target multiplier used to calculate the bonus paid to Employee under the EICP immediately prior to the date of this Agreement, provided, however that in either case a material
reduction in the Annual Base Salary or the target bonus multiplier shall not be considered “Good Reason” with respect to any year for which such reduction is part of a reduction uniformly applicable to all similarly situated employees;

  

	 	(iv)	a material adverse change in Employee’s eligibility to participate in long-term incentive compensation plans as in effect immediately prior to the date of this
Agreement, unless Employee is eligible to participate in a comparable plan; or 

  

	 	(v)	any material breach of this Agreement by the Company, excluding for this purpose an isolated, insubstantial or inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by Employee. 

  
 10 

 In the event (A) any of the events described above occurs (an “Event”) or
(B) the Company, in connection with but prior to the Effective Date of a Restructuring Transaction, notifies Employee in writing that the terms and conditions of Employee’s employment will be changed in connection with the consummation of
a Restructuring Transaction in a manner that would constitute Good Reason (a “Company Notice”), Employee shall give the Company or Successor written notice (the “Employee Notice”) within 60 days following Employee’s
knowledge of an Event or receipt of the Company Notice, as applicable, that such change in employment terms or conditions would constitute Good Reason and Employee intends to terminate employment as a result. The Company or Successor shall have
thirty days following receipt of the Employee Notice in which to cure the Event or retract the Company Notice, or amend the Company Notice such that the proposed changes in employment terms or conditions do not constitute Good Reason. If the Company
does not take such action within that time, the Event, or the event described in the Company Notice when it would have occurred, as applicable, shall constitute Good Reason. If Employee does not provide the Employee Notice within 60 days as required
above in this clause (f), then the Event, or the change in employment terms and conditions described in the Company Notice, as applicable, shall not constitute Good Reason, and thereafter, for purposes of determining whether Employee has Good
Reason, Employee's terms and conditions of employment after the occurrence of the Event or the implementation of the changes described in the Company Notice, as applicable, shall be substituted for those terms and conditions of Employee's employment
in effect immediately prior to the date of this Agreement in each of clauses (i), (ii), (iii) and (iv) above. 
  

	 	(g)	“Subsidiaries” shall mean every corporation, limited liability company, partnership or other entity of which 50% or more of the total combined voting power of
all classes of voting securities or other equity interests is owned, directly or indirectly, by McDermott International, Inc. or, upon and following a Restructuring Transaction, by the Successor. 

 

	 	(h)	“Successor” shall mean an entity that has acquired a separate reporting segment of the Company (by reference to the Company’s audited consolidated
financial statements as of and for the year ended December 31, 2008) from the Company in a Restructuring Transaction or a Subsidiary that is sold or spun off to the stockholders of the Company in a Restructuring Transaction.

  

	XIV.	Arbitration. 

 Any controversy or
claim arising out of or relating to this Agreement (or the breach thereof) shall be settled by final and binding arbitration in Houston, Texas by one arbitrator selected in accordance with the Commercial Arbitration Rules (the “Rules”) of
the American Arbitration Association (the “Association”) then in effect. Subject to the following provisions, the arbitration shall be conducted in accordance with the Rules then in effect. Any award entered by the arbitrator shall be
final and binding, and judgment may be entered thereon by any party hereto in any court of law having competent 

  
 11 

 
jurisdiction. This arbitration provision shall be specifically enforceable. The Company (or a Successor, if applicable) and Employee shall each pay half of the administrative fees of the
Association and the compensation of the arbitrator and shall each be responsible for its own attorney’s fees and expenses relating to the conduct of the arbitration. 
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. 

 

					
	MCDERMOTT INTERNATIONAL, INC.
		
	By:	 	 /s/ Preston Johnson, Jr.

	Printed Name:	  	 Preston Johnson, Jr.

	Title:	 	 Senior Vice President, Human Resources

	Date:	 	 December 10, 2009

		
	EMPLOYEE:	  	 /s/ John T. Nesser, III

	Date:	 	 December 10, 2009

  
 12 

 SCHEDULE A 

 

	(a)	2008 Performance Shares Agreement dated March 3, 2008, between Employee and the Company, the amount of shares calculated as if the Restructuring Transaction were a
“change in control” as defined in such grant agreement. 

  

	(b)	2008 Restricted Stock Grant Agreement dated March 3, 2008, between Employee and the Company. 

 

	(c)	2008 Performance Shares Agreement dated August 14, 2008, between Employee and the Company, the amount of shares calculated as if the Restructuring Transaction were
a “change in control” as defined in such grant agreement. 

  

	(d)	2008 Restricted Stock Grant Agreement dated August 14, 2008, between Employee and the Company. 

 

	(e)	2009 Performance Share Grant Agreement dated March 5, 2009, between the Company and Employee, applicable only as to the Initial Grant of shares.

  

	(f)	2009 Deferred Stock Unit Grant Agreement dated March 5, 2009, between the Company and Employee. 

 

	(g)	2009 Stock Option Grant Agreement dated March 5, 2009, between the Company and Employee. 

 Effective as of the date of this Agreement, any of the foregoing awards that are subject to Section 409A of the Code are hereby modified to provide that no “Change in Control” (as defined
in the applicable award) shall occur unless it is a change in control within the meaning of Section 409A of the Code. 

  
 13 

 SCHEDULE B 
 Excise Tax Modified Cutback Provisions 
 Anything in this Agreement to the
contrary notwithstanding, in the event the Firm (as defined below) shall determine that Employee shall become entitled to payments and/or benefits provided by this Agreement which would be subject to the excise tax imposed by Section 4999 of
the Code (the “Payments”), the Firm shall determine whether to reduce any of the Payments to the Reduced Amount (as defined below). The Payments shall be reduced to the Reduced Amount only if the Firm determines that Employee would
have a greater Net After-Tax Receipt (as defined below) of aggregate Payments if the Employee’s Payments were reduced to the Reduced Amount. If such a determination is not made by the Firm, Employee shall receive all Payments to which Employee
is entitled under this Agreement. 
 If the Firm determines that aggregate Payments should be reduced to the Reduced Amount, the
Company shall promptly give Employee notice to that effect and a copy of the detailed calculation thereof. All determinations made by the Firm under this Schedule B shall be binding upon the Company and Employee absent manifest error and shall be
made as soon as reasonably practicable and in no event later than 15 business days of the receipt of notice from the Company that there has been a Payment, or such earlier time as is requested by the Company. For purposes of reducing the Payments to
the Reduced Amount, only amounts payable under this Agreement (and no other Payments) shall be reduced. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing, in order, cash payments otherwise due under clauses
(c), (d), (e) and (h) of Section I of this Agreement, and then by reducing equity-based compensation otherwise due under clause (f) of Section I of this Agreement in chronological order with the most recent equity-based compensation
awards reduced first. 
 As a result of the uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of Employee pursuant to this Agreement which should not have been so paid or distributed
(“Overpayment”) or that additional amounts which will have not been paid or distributed by the Company to or for the benefit of Employee pursuant to this Agreement could have been so paid or distributed
(“Underpayment”), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Firm, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or
Employee which the Firm believes has a high probability of success determines that an Overpayment has been made, Employee shall pay any such Overpayment to the Company together with interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code; provided, however, that no amount shall be payable by Employee to the Company if and to the extent such payment would not either reduce the amount on which Employee is subject to tax under Section 1
and Section 4999 of the Code or generate a refund of such taxes. In the event that the Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be paid promptly
(and in no event later than 60 days following the date on which the Underpayment is determined) by the Company to or for the benefit of Employee together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the
Code. 

  
 14 

 For purposes hereof, the following terms have the meanings set forth below: 

“Firm” shall mean an internationally recognized accounting or employee benefits consulting firm selected
by the Company with the input of Employee (but without Employee’s consent) and which shall not, during the one year preceding the date of its selection, have acted in any way on behalf of the Company or its affiliated companies. 

“Net After-Tax Receipt” shall mean the present value (as determined in accordance with Sections
280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a Payment net of all taxes imposed on Employee with respect thereto under Sections 1 and 4999 of the Code and under applicable state and local laws, determined by applying the highest marginal rate
under Section 1 of the Code and under state and local laws which applied to the Employee’s taxable income for the immediately preceding taxable year, or such other rate(s) as Employee certifies, in Employee’s sole discretion, as
likely to apply to him in the relevant tax year(s). 
 “Reduced Amount” shall mean the greatest
amount of Payments that can be paid that would not result in the imposition of the excise tax under Section 4999 of the Code if the Firm determines to reduce Payments pursuant to paragraph (a) of this Attachment A. 

  
 15 

 EXHIBIT C 

CONSULTING SERVICES 
 TERMS AND CONDITIONS 
  

	1.	Description of Services. As requested by the Company, Mr. Nesser shall serve as a special consultant furnishing advice, consultation and related services
including but not limited to: 

  

	 	•	 	 Provide advice and counsel on strategic issues; 

  

	 	•	 	 Provide input on organizational structure and key personnel; 

 

	 	•	 	 Provide advice and counsel on project issues as they arise; 

 

	 	•	 	 Provide input on key client and business partner issues as requested; and 

 

	 	•	 	 Provide such other services and advice as shall be agreed by the parties. 

 

	2.	Status. During the Consulting Period, Mr. Nesser shall be an independent contractor and shall not be an employee of the Company. The Company shall not be
entitled to exercise supervision over the details or methods of performance by Mr. Nesser hereunder or to require adherence to specific procedures in performing services hereunder. Except as provided herein, Mr. Nesser shall not be subject
to rules or regulations applicable to Company’s employees or any established work schedule or routine or other supervision of or direction by Company, as to hours worked or otherwise, provided, however, that all services rendered hereunder
shall be so rendered to the satisfaction of Company. Mr. Nesser shall not have authority to obligate the Company to any agreement or to exercise any supervision or direction over the Company’s employees. Since the Consultant is not an
employee of the Company, he is not entitled to participate in any of the Company’s employee benefit plans, programs or arrangements provided, however, the retirement and other payments or benefits that he may be entitled to as a result of
previous employment with the Company shall continue uninterrupted in accordance with the terms and conditions of each respective benefit plan or arrangement. 

 

	3.	Compensation. Mr. Nesser’s individual contact shall be Stephen M. Johnson, or his designee, who shall be responsible for transmitting requests for such
advice and consultation from the Company where necessary to enable Mr. Nesser to carry out his responsibilities hereunder. During the Consulting Period, the Company agrees to pay $25,000 per month, which amount will be payable on the last day
of each calendar month. The Company also agrees to reimburse Mr. Nesser actual reasonable costs and expenses of first class airfare and other travel, meals and lodging necessarily incurred by Mr. Nesser in rendering services hereunder, but
not any other fees, costs, or expenses. Mr. Nesser shall submit a statement for each month in which services are rendered showing costs and expenses payable with respect to services rendered during such month, along with documentation
substantiating expenses for which reimbursement is sought. The Company agrees to remit to Mr. Nesser the appropriate amount upon receipt of such invoices. Mr. Nesser will be responsible for income or other taxes assessed on his receipt of
the monthly fee and expense reimbursement from the Company. 

  

	4.	 Security and Non-Disclosure of Information. Mr. Nesser shall be responsible for, and bear the expense of, compliance with governmental laws
and regulations applicable to the 

  
 C-1

	 	 
procurement, utilization or production of information in connection with the furnishing of services hereunder. Mr. Nesser agrees that during the Consulting Period he will refrain from
performing any act or engaging in any course of conduct which has or may reasonably have the effect of demeaning the name or business reputation of the Company or affects adversely or may reasonably affect adversely the Company’s best
interests, economic or otherwise. Mr. Nesser also acknowledges that applicable securities laws prohibit the trading of Company securities while in possession of any material non-public information, including information concerning the financial
condition, results of operations, business or prospects of the Company. 

  

	5.	Property and Information. All property and information, including but not limited to reports, findings, recommendations, plans, data, and memoranda of every
description, and all copies thereof, furnished to Mr. Nesser or developed in the course of or relating to the services rendered hereunder shall be the property of the Company, and Mr. Nesser shall not retain copies of any such matter or
material. Mr. Nesser agrees that all inventions, discovery or improvements (whether patentable or not) made or conceived by Mr. Nesser are and will remain the sole property of the Company, and Mr. Nesser further agrees to assist the
Company in obtaining patents in the Company’s name covering any such inventions, discoveries or improvements. 

  

	6.	Law. Mr. Nesser will comply with all applicable laws and regulations in the course of his activities on the Company’s behalf. 

 

	7.	Code of Business Conduct. Mr. Nesser expressly acknowledges that he has received and reviewed the most recent McDermott International, Inc. Code of Business
Conduct, and Mr. Nesser will conform his activities undertaken for or on behalf of the Company consistent with the principles of the highest ethical behavior as described therein. 

 

									
	Signature:	 	 /s/ John T. Nesser, III
	 		  	Date:	 	 May 10, 2011

		 	      John T. Nesser, III	 		  		 	

  

	8.	Reports. Mr. Nesser agrees that, upon request, he will file periodic reports on his activities on the Company’s behalf. 

 

	9.	Indemnity. Company agrees to protect, hold harmless, defend, and indemnify Mr. Nesser from and against any and all claims, suits, and demands, of any kind
whatsoever, by whomsoever asserted, as a result of, or arising from, the activities of Mr. Nesser under this Agreement; provided, however, that the Company shall have no liability or responsibility under this provision for any such claim, suit,
or demand resulting from the gross negligence or intentional misconduct of Mr. Nesser. 

  

	10.	Conflict of Interest. Mr. Nesser agrees that he is not presently engaged and will not engage during the term of this Agreement in any activity which might
reasonably create a conflict of interest between him and the Company or which might reasonable and adversely affect his judgment with respect to the business of the Company. Mr. Nesser further agrees that he will accept no payment from any
competitor or supplier of materials or services, customer, borrower, or lender of the Company. 

  
 C-2

	11.	Consulting Period. The Consulting Period shall begin on August 1, 2011 and continue through January 31, 2012, unless terminated earlier by
Mr. Nesser upon thirty (30) days advance written notice to the Company. The Consulting Period will be terminated without further liability or obligation on the part of the Company should Mr. Nesser breach any of the terms or covenants
of the Agreement or Exhibits B or C thereto. 

  

	12.	Amendment and Extension. This Consulting Agreement may be amended and/or extended by written agreement of the Company and Mr. Nesser.

  
 C-3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}]]