Document:

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

 Exhibit 10.4 

TRANSITION SERVICES AGREEMENT 

BETWEEN 
 THE
BABCOCK & WILCOX COMPANY 
 (as service provider) 

and 
 MCDERMOTT
INTERNATIONAL, INC. 
 (as service receiver) 

Dated [                    ], 2010

  
  

 TABLE OF CONTENTS 

 

					
	 	 	 	  	Page No.
	 ARTICLE I
	 	 DEFINITIONS
	  	1
	 Section 1.1
	 	 Definitions
	  	1
			
	 ARTICLE II
	 	 SERVICES
	  	2
	 Section 2.1
	 	 Services
	  	2
	 Section 2.2
	 	 Service Coordinators
	  	2
	 Section 2.3
	 	 Additional Services
	  	2
	 Section 2.4
	 	 Third Party Services
	  	3
	 Section 2.5
	 	 Standard of Performance; Limitation of Liability
	  	3
	 Section 2.6
	 	 Service Boundaries and Scope
	  	4
	 Section 2.7
	 	 Cooperation
	  	4
	 Section 2.8
	 	 Transitional Nature of Services; Changes
	  	4
	 Section 2.9
	 	 Access
	  	4
			
	 ARTICLE III
	 	 SERVICE CHARGES
	  	5
	 Section 3.1
	 	 Compensation
	  	5
			
	 ARTICLE IV
	 	 PAYMENT
	  	5
	 Section 4.1
	 	 Payment
	  	5
	 Section 4.2
	 	 Payment Disputes
	  	5
	 Section 4.3
	 	 Review of Charges; Error Correction
	  	5
	 Section 4.4
	 	 Taxes
	  	6
	 Section 4.5
	 	 Records
	  	6
			
	 ARTICLE V
	 	 TERM
	  	6
	 Section 5.1
	 	 Term
	  	6
			
	 ARTICLE VI
	 	 DISCONTINUATION OF SERVICES
	  	6
	 Section 6.1
	 	 Discontinuation of Services
	  	6
	 Section 6.2
	 	 Procedures Upon Discontinuation or Termination of Services
	  	7
			
	 ARTICLE VII
	 	 DEFAULT
	  	7
	 Section 7.1
	 	 Termination for Default
	  	7
			
	 ARTICLE VIII
	 	 INDEMNIFICATION AND WAIVER
	  	7
	 Section 8.1
	 	 Waiver of Consequential Damages
	  	7
	 Section 8.2
	 	 Services Received
	  	8
	 Section 8.3
	 	 Express Negligence
	  	8
			
	 ARTICLE IX
	 	 CONFIDENTIALITY
	  	8
	 Section 9.1
	 	 Confidentiality
	  	8
	 Section 9.2
	 	 System Security
	  	9
			
	 ARTICLE X
	 	 FORCE MAJEURE
	  	9
	 Section 10.1
	 	 Performance Excused
	  	9
	 Section 10.2
	 	 Notice
	  	10
	 Section 10.3
	 	 Cooperation
	  	10
			
	 ARTICLE XI
	 	 MISCELLANEOUS
	  	10
	 Section 11.1
	 	 Entire Agreement
	  	10
	 Section 11.2
	 	 Binding Effect; No Third-Party Beneficiaries; Assignment
	  	10
	 Section 11.3
	 	 Amendment; Waivers
	  	10
	 Section 11.4
	 	 Notices
	  	10
	 Section 11.5
	 	 Counterparts
	  	10

  

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	 	 	 	  	Page No.
	 Section 11.6
	 	 Severability
	  	10
	 Section 11.7
	 	 Governing Law
	  	11
	 Section 11.8
	 	 Performance
	  	11
	 Section 11.9
	 	 Relationship of Parties
	  	11
	 Section 11.10
	 	 Regulations
	  	11
	 Section 11.11
	 	 Construction
	  	11
	 Section 11.12
	 	 Effect if Separation does not Occur
	  	11

  

 ii 

 TRANSITION SERVICES AGREEMENT 

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

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

ARTICLE I 

DEFINITIONS 

Section 1.1 Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

 “Additional Services” has the meaning set forth in Section 2.3. 

“Agreement” has the meaning set forth in the preamble. 

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

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

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

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

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

“McDermott” has the meaning set forth in the preamble. 

“Schedules” means Schedules [    ] through [    ]
attached hereto. 
 “Security Regulations” has the meaning set forth in
Section 9.2(a). 
 “Service Coordinator” has the meaning set forth in
Section 2.2. 
 “Services” has the meaning set forth in Section 2.1(a).

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

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

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

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 ARTICLE II 

SERVICES 

Section 2.1 Services. 

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

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

(c) Notwithstanding anything to the contrary in this Agreement, B&W and members of the B&W Group
shall not be required to perform Services hereunder or take any actions relating thereto that conflict with or violate any applicable law, contract, license, authorization, certification or permit or B&W’s Code of Business Conduct or other
governance policies, as they may be amended from time to time. 
 Section 2.2 Service Coordinators. Each
party will nominate in writing a representative to act as the primary contact with respect to the provision of the Services and the resolution of disputes under this Agreement (each such person, a “Service Coordinator”). The initial
Service Coordinators shall be [            ] and [            ] (or their designated delegates) for each of McDermott and
B&W, respectively. The Service Coordinators shall meet as expeditiously as possible to resolve any dispute hereunder; and any dispute that is not resolved by the Service Coordinators within 45 days shall be resolved in accordance with the
dispute resolution procedures set forth in Article V of the Master Separation Agreement. Each party hereto may treat an act of a Service Coordinator of the other party hereto which is consistent with the provisions of this Agreement as being
authorized by such other party without inquiring behind such act or ascertaining whether such Service Coordinator had authority to so act; provided, however, that no such Service Coordinator shall have authority to amend this
Agreement. McDermott and B&W shall advise each other promptly (in any case no more than three Business Days) in writing of any change in their respective Service Coordinators, setting forth the name of the replacement, and stating that the
replacement Service Coordinator is authorized to act for such party in accordance with this Section 2.2. 

Section 2.3 Additional Services. McDermott may request additional Services (the “Additional Services”)
from B&W by providing written notice. Upon the mutual written agreement as to the nature, cost, duration and scope of such Additional Services, McDermott and B&W shall supplement in writing the Schedules hereto to include such Additional
Services. Subject to the other limitations in this Agreement, including the provisions in Section 2.6, but nothwithstanding the foregoing provisions of this Section 2.3, in addition to providing the Services specified in the Schedules,
B&W, acting directly and/or through its Affiliates and their respective employees, agents, contractors or independent third parties designated by any of them, shall use commercially reasonable efforts to provide or to cause to be provided
additional, de minimis administrative support services to 
  

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the MII Group as may be requested by any member of the MII Group from time to time, at no cost beyond the amounts set forth in the Schedules (as the amounts set forth in the Schedules contemplate
such additional, de minimis administrative support services); provided, however, that, for any such additional services to be considered de minimis for purposes of this sentence, such additional services shall not require the attention of
(i) any one employee of any member of the B&W Group for more than 2 hours in any single calendar month or (ii) any group of employees of any one or more members of the B&W Group for more than 30 hours in any single calendar month.
Except where the context otherwise indicates or requires, any such additional services referred to in the immediately preceding sentence shall be deemed to be “Services” under this Agreement. 

Section 2.4 Third Party Services. B&W shall have the right to hire third-party subcontractors to provide all
or part of any Service hereunder; provided, that B&W shall consult in good faith with McDermott regarding the proposed hiring of any third-party subcontractor that has not previously been involved in the activities relating to such Service prior
to the date hereof; provided, further, that, in the event such subcontracting is inconsistent with the practice applied by B&W generally from time to time within its own organization, B&W shall give notice to McDermott of its intent to
subcontract any portion of the Services and McDermott shall have 20 days (or such lesser period set forth in the notice as may be practicable in the event of exigent circumstances) to determine, in its sole discretion, whether to permit such
subcontracting or whether to cancel such Service in accordance with Article VI hereof. If McDermott opts to cancel a Service pursuant to the immediately preceding sentence, it shall not be liable to B&W pursuant to Section 6.1 for any costs
or expenses B&W or any member of the B&W Group remains obligated to pay to the third-party subcontractor identified in the notice provided by B&W as described above. B&W shall not be required to give notice of its intent to
subcontract Services to any party listed on Exhibit 2.4 hereto, nor shall McDermott have any right to cancel any Service subcontracted to any such listed party pursuant to this Section 2.4 (provided, that this sentence shall not prevent
McDermott from cancelling any Service pursuant to Section 6.1). 
 Section 2.5 Standard of Performance;
Limitation of Liability. 
 (a) The Services to be provided hereunder shall be performed with
the same general degree of care, at the same general level and at the same general degree of accuracy and responsiveness, as when performed within the McDermott organization (including, for this purpose, B&W and its subsidiaries) prior to the
date of this Agreement. It is understood and agreed that B&W and the members of the B&W Group are not professional providers of the types of services included in the Services and that B&W personnel performing Services have other
responsibilities and will not be dedicated full-time to performing Services hereunder. 
 (b) In
the event B&W or any member of the B&W Group fails to provide, or cause to be provided, the Services in accordance with the standard of service set forth in Section 2.5(a) or Section 2.5(c), the sole and exclusive remedy of
McDermott shall be, at McDermott’s sole discretion, within 90 days from the date that B&W or such member of the B&W Group first fails to provide such Service, to not pay for such Service; provided that in the event B&W
defaults in the manner described in clause (ii) of Section 7.1, McDermott shall have the further rights set forth in Article VII. 

(c) EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 2.5, NO REPRESENTATIONS OR WARRANTIES OF ANY KIND,
EXPRESSED OR IMPLIED (INCLUDING THE WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION), ARE MADE BY B&W OR ANY MEMBER OF THE B&W GROUP WITH RESPECT TO THE
SERVICES UNDER THIS AGREEMENT AND, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ALL SUCH REPRESENTATIONS OR WARRANTIES ARE HEREBY WAIVED AND DISCLAIMED. MCDERMOTT (ON ITS OWN BEHALF AND ON BEHALF OF EACH OTHER MEMBER OF THE MII GROUP) HEREBY
EXPRESSLY WAIVES ANY RIGHT MCDERMOTT OR ANY MEMBER OF THE MII GROUP MAY OTHERWISE HAVE FOR ANY LOSSES, TO ENFORCE SPECIFIC PERFORMANCE OR TO PURSUE ANY OTHER REMEDY AVAILABLE IN CONTRACT, AT LAW OR IN EQUITY IN THE EVENT OF ANY NON-PERFORMANCE,
INADEQUATE PERFORMANCE, 
  

 3 

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

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

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

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

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

 4 

 ARTICLE III 

SERVICE CHARGES 

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

ARTICLE IV 

PAYMENT 

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

Section 4.2 Payment Disputes. McDermott may object to any amounts for any Service at any time before, at the time
of, or after payment is made, provided such objection is made in writing to B&W within 120 days following the date of the disputed invoice. McDermott shall timely pay the disputed items in full while resolution of the dispute is pending;
provided, however, that B&W shall pay interest at a rate of five percent (5%) per annum (compounded monthly) on any amounts it is required to return to McDermott upon resolution of the dispute. Payment of any amount shall not constitute
approval thereof. The Service Coordinators shall meet as expeditiously as possible to resolve any dispute. Any dispute that is not resolved by the Service Coordinators within 45 days shall be resolved in accordance with the dispute resolution and
arbitration procedures set forth in Article V of the Master Separation Agreement. Neither party (or any member of its respective Group) shall have a right of set-off against the other party (or any member of its respective Group) for billed
amounts hereunder. Upon written request, B&W will provide to McDermott reasonable detail and support documentation to permit McDermott to verify the accuracy of an invoice. 

Section 4.3 Review of Charges; Error Correction. B&W shall maintain accurate books and records (including
invoices of third parties) related to the Services sufficient to calculate, and allow McDermott to verify, the amounts owed under this Agreement. From time to time until 120 days following the termination of this Agreement, McDermott shall have the
right to review, and B&W shall provide access to, such books and records 
  

 5 

 
to verify the accuracy of such amounts, provided that such reviews shall not occur more frequently than once per calendar quarter. Each such review shall be conducted during normal business hours
and in a manner that does not unreasonably interfere with the operations of B&W. If, as a result of any such review, McDermott determines that it overpaid any amount to B&W, then McDermott may raise an objection pursuant to the provisions of
Section 4.2. McDermott shall bear the cost and expense of any such review. B&W shall make adjustments to charges as required to reflect the discovery of errors or omissions in charges. 

Section 4.4 Taxes. All transfer taxes, excises, fees or other charges (including value added, sales, use or
receipts taxes, but not including a tax on or measured by the income, net or gross revenues, business activity or capital of a member of the B&W Group), or any increase therein, now or hereafter imposed directly or indirectly by law upon any
fees paid hereunder for Services, which a member of the B&W Group is required to pay or incur in connection with the provision of Services hereunder (“Tax”), shall be passed on to McDermott as an explicit surcharge and shall be paid by
McDermott in addition to any Service fee payment, whether included in the applicable Service fee payment, or added retroactively. If McDermott submits to B&W a timely and valid resale or other exemption certificate acceptable to B&W and
sufficient to support the exemption from Tax, then such Tax will not be added to the Service fee payable pursuant to Article III; provided, however, that if a member of the B&W Group is ever required to pay such Tax, McDermott will promptly
reimburse B&W for such Tax, including any interest, penalties and attorney’s fees related thereto. The parties will cooperate to minimize the imposition of any Taxes. 

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

 ARTICLE V 

TERM 

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

DISCONTINUATION OF SERVICES 

Section 6.1 Discontinuation of Services. Unless otherwise provided in the relevant Schedule for a particular
Service, at any time after the Distribution Date, McDermott may, without cause and in accordance with the terms and conditions hereunder and the Master Separation Agreement, request the discontinuation of one or more

  

 6 

 
specific Services by giving B&W at least 30 days’ prior written notice; provided, however, that any such discontinuation will not affect the amounts payable to B&W hereunder unless
(and then only to the extent that) the charges for the discontinued Services have been separately identified in the applicable Schedule. McDermott shall be liable to B&W for all costs and expenses B&W or any member of the B&W Group
remains obligated to pay in connection with any discontinued Service or Services, except in the case of a Service terminated by McDermott pursuant to clause (ii) of the first sentence of Section 7.1 hereof. The parties shall cooperate as
reasonably required to effectuate an orderly and systematic transfer to the MII Group of all of the duties and obligations previously performed by B&W or a member of the B&W Group under this Agreement. 

Section 6.2 Procedures Upon Discontinuation or Termination of Services. Upon the discontinuation or termination of
a Service hereunder, this Agreement shall be of no further force and effect with respect to such Service, except as otherwise provided in a Schedule for a specific Service and except as to obligations accrued prior to the date of discontinuation or
termination; provided, however, that Articles I, IV, VIII, IX and XI and Section 2.5(c) of this Agreement shall survive such discontinuation or termination. Each party and the applicable member(s) of its respective Group shall, within 60
days after discontinuation or termination of a Service, deliver to the other party and the applicable member(s) of its respective Group originals of all books, records, contracts, receipts for deposits and all other papers or documents in its
possession which pertain exclusively to the business of the other party and relate to such Service; provided that a party may retain copies of material provided to the other party pursuant to this Section 6.2 as it deems necessary or
appropriate in connection with its financial reporting obligations or internal control practices and policies. 
 ARTICLE VII

 DEFAULT 

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

 INDEMNIFICATION AND WAIVER 

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

 7 

 Section 8.2 Services Received. McDermott hereby acknowledges and
agrees that: 
 (a) the Services to be provided hereunder are subject to and limited by the
provisions of Section 2.5, Article VII and the other provisions hereof, including the limitation of remedies available to McDermott that restricts available remedies resulting from a Service not provided in accordance with the terms hereof to
non-payment and, in certain limited circumstances, the right to terminate this Agreement; 
 (b)
the Services are being provided solely to facilitate the transition of McDermott as a separate company as a result of the Distribution, and B&W and its Affiliates do not provide any such Services to non-Affiliates; 

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

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

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

ARTICLE IX 

CONFIDENTIALITY 

Section 9.1 Confidentiality. B&W and McDermott each acknowledge and agree that the terms of Section 6.9
of the Master Separation Agreement shall apply to information, documents, plans and other data made available or disclosed by one party to the other in connection with this Agreement. B&W and McDermott each

  

 8 

 
acknowledge and agree that any third party Information (to the extent such Information does not constitute B&W Books and Records) provided by any member of the MII Group to any member of the
B&W Group after the Distribution Date in connection with the provision of the Services by any member of the B&W Group, or generated, maintained or held in connection with the provision of the Services by any member of the B&W Group after
the Distribution Date, in each case that primarily relates to the MII Business, the MII Assets, or the MII Liabilities, shall not be considered Privileged Information of B&W or Confidential Information of B&W. 

Section 9.2 System Security. 

(a) If any party hereto is given access to the other party’s computer systems or software
(collectively, the “Systems”) in connection with the Services, the party given access (the “Availed Party”) shall comply with all of the other party’s system security policies, procedures and requirements that have been
provided to the Availed Party in advance and in writing (collectively, “Security Regulations”), and shall not tamper with, compromise or circumvent any security or audit measures employed by such other party. The Availed Party shall access
and use only those Systems of the other party for which it has been granted the right to access and use. 

(b) Each party hereto shall use commercially reasonable efforts to ensure that only those of its personnel
who are specifically authorized to have access to the Systems of the other party gain such access, and use commercially reasonable efforts to prevent unauthorized access, use, destruction, alteration or loss of information contained therein,
including notifying its personnel of the restrictions set forth in this Agreement and of the Security Regulations. 

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

 ARTICLE X 

FORCE MAJEURE 

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

 

 9 

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

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

MISCELLANEOUS 

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

Section 11.3 Amendment; Waivers. No change or amendment may be made to this Agreement except by an instrument in
writing signed on behalf of both of the parties hereto. Either party hereto may, at any time, (i) extend the time for the performance of any of the obligations or other acts of the other, (ii) waive any inaccuracies in the representations
and warranties of the other contained herein or in any document delivered pursuant hereto, and (iii) waive compliance by the other with any of the agreements, covenants or conditions contained herein. Any such extension or waiver shall be valid
only if set forth in an instrument in writing signed by the party to be bound thereby. No failure or delay on the part of either party hereto in the exercise of any right hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, covenant or agreement contained herein, nor shall any single or partial exercise of any such right preclude other or further exercise thereof or of any other right. 

Section 11.4 Notices. Unless otherwise expressly provided herein, all notices, claims, certificates, requests,
demands and other communications hereunder shall be in writing and shall be deemed to be duly given (i) when personally delivered or (ii) if mailed by registered or certified mail, postage prepaid, return receipt requested, on the date the
return receipt is executed or the letter is refused by the addressee or its agent or (iii) if sent by overnight courier which delivers only upon the signed receipt of the addressee, on the date the receipt acknowledgment is executed or refused
by the addressee or its agent or (iv) if sent by facsimile or electronic mail, on the date confirmation of transmission is received (provided that a copy of any notice delivered pursuant to this clause (iv) shall also be sent pursuant to
clause (i), (ii) or (iii)), addressed to the attention of the addressee’s General Counsel at the address of its principal executive office or to such other address or facsimile number for a party hereto as it shall have specified by like
notice. 
 Section 11.5 Counterparts. This Agreement, including the Schedules hereto and the other
documents referred to herein, may be executed in multiple counterparts, each of which when executed shall be deemed to be an original but all of which together shall constitute one and the same agreement. 

Section 11.6 Severability. If any term or other provision of this Agreement or the Schedules attached hereto is
determined by a nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this

  

 10 

 
Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to
either party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the court, administrative agency or arbitrator shall interpret this Agreement so as to effect the original intent of
the Parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent possible. If any sentence in this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable. 
 Section 11.7 Governing Law. This Agreement shall be
governed by, and construed and enforced in accordance with, the substantive laws of the State of Texas, without regard to any conflicts of law provisions thereof that would result in the application of the laws of any other jurisdiction. 

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

Section 11.9 Relationship of Parties. This Agreement does not create a fiduciary relationship, partnership, joint
venture or relationship of trust or agency between the parties. The parties hereto agree that B&W (and any other member of the B&W Group which performs Services hereunder) is an independent contractor in the performance of Services for the
MII Group under this Agreement. 
 Section 11.10 Regulations. All employees of B&W and the members of
the B&W Group shall, when on the property of McDermott, conform to the rules and regulations of McDermott concerning safety, health and security which are made known to such employees in advance in writing. 

Section 11.11 Construction. This Agreement shall be construed as if jointly drafted by the parties hereto and no
rule of construction or strict interpretation shall be applied against either party. In this Agreement, unless the context clearly indicates otherwise, words used in the singular include the plural and words used in the plural include the singular;
and if a word or phrase is defined in this Agreement, its other grammatical forms, as used in this Agreement, shall have a corresponding meaning. Whenever the context requires, the gender of all words used in this Agreement includes the masculine,
feminine and the neuter. Unless the context otherwise requires, the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation,” and the word “or”
shall have the inclusive meaning represented by the phrase “and/or.” The words “shall” and “will” are used interchangeably in this Agreement and have the same meaning. Relative to the determination of any period of time
hereunder, “from” means “from and including,” “to” means “to but excluding” and “through” means “through and including.” All references herein to a specific time of day in this Agreement
shall be based upon Central Standard Time or Central Daylight Savings Time, as applicable, on the date in question. Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified. Any
reference herein to any Article, Section, Exhibit or Schedule means such Article or Section of, or such Exhibit or Schedule to, this Agreement, as the case may be, and references in any Section or definition to any clause means such clause of such
Section or definition. As used in this Agreement, the words “this Agreement,” “herein,” “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a
whole and not to any particular Section or other provision of this Agreement. The titles to Articles and headings of Sections contained in this Agreement, in any Exhibit or Schedule and in the table of contents to this Agreement have been inserted
for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement. 

Section 11.12 Effect if Separation does not Occur. If the Distribution does not occur, then all actions and events
that are, under this Agreement, to be taken or occur effective as of or following the Distribution Date, or otherwise in connection with the Distribution, shall not be taken or occur except to the extent specifically agreed by the parties and
neither party shall have any liability or further obligation to the other party under this Agreement. 
 [Signature page
follows.] 
  

 11 

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

			
	 THE BABCOCK & WILCOX COMPANY

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	

  

			
	 MCDERMOTT INTERNATIONAL, INC.

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	

 [Signature Page to Transition Services Agreement] 

 

 12Assumption and Loss Allocation Agreement

 Exhibit 10.5 

EXECUTION VERSION 

ASSUMPTION AND LOSS ALLOCATION AGREEMENT 

by and among 

ACE American Insurance Company, 

acting for itself and the ACE Affiliates (as defined below) 

and 
 MCDERMOTT
INTERNATIONAL, INC., 
 a Panamanian corporation 

and 

BABCOCK & WILCOX HOLDINGS, INC., 

a corporation organized and existing under the laws of the State of Delaware 

RECITALS 

THIS ASSUMPTION AND LOSS ALLOCATION AGREEMENT (the “Agreement”), is entered into and effective as
of May 18, 2010 (the “Effective Date”) by and among ACE AMERICAN INSURANCE COMPANY, individually and acting for the ACE Affiliates (in such capacities, the “Company”), MCDERMOTT INTERNATIONAL, INC., a
Panamanian corporation (“MII”), BABCOCK & WILCOX HOLDINGS, INC., a Delaware corporation (“B&W”), to be succeeded by The Babcock & Wilcox Company, a Delaware corporation, after the effective
time of the Merger, and, solely with respect to Sections 2, 3 and 5(c), the other MII Entities signatory hereto and the other B&W Entities signatory hereto. 

WHEREAS, the Company and/or the ACE Affiliates have issued the Existing Policies to one or more MII Entities and
one or more B&W Entities; and 
 WHEREAS, in connection with the Existing Policies, the Company, the
ACE Affiliates, one or more MII Entities, and/or one or more B&W Entities entered into various Existing Insurance Agreements; and 

WHEREAS, pursuant to the Existing Policies and the Existing Insurance Agreements, the MII Entities and the B&W
Entities are obligated, among other things, to pay or reimburse the Company and/or the ACE Affiliates for certain Obligations, which Obligations are secured by the Existing Collateral; and 

WHEREAS, B&W, prior to the Separation, is a wholly owned Subsidiary of MII; and 

WHEREAS, MII intends to spin-off B&W from MII through a dividend of common stock of B&W to the
shareholders of MII (the “Separation”); and 
 WHEREAS, in connection with the
Separation: (a) the MII Entities desire to transfer and the B&W Entities desire to assume any B&W Obligations that were incurred by, or with respect to which there exists any obligation of, an MII Entity, whether such B&W
Obligations were existing, accruing or arising before, on or after the Effective Date; and (b) the B&W Entities desire to transfer and the MII Entities desire to assume any MII Obligations that were incurred by, or with respect to which
there exists any obligation of, a B&W Entity, whether such MII Obligations were existing, accruing or arising before, on or after the Effective Date; and 

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

NOW, THEREFORE, in consideration of the mutual promises set out herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, including a one-time administrative fee of $25,000 (the “Fee”), and intending to be legally bound, the Parties agree as follows: 

1. Definitions. The following terms used herein, including in the recitals and Exhibits hereto, shall have
the following meanings: 
 “ACE Affiliate” means each Affiliate of ACE American
Insurance Company that is listed on Exhibit V attached hereto and made a part hereof that has issued an Existing Policy or is party to an Existing Insurance Agreement. 

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

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

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

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

“B&W Assumed Obligations” has the meaning set forth in Section 5(b). 

“B&W Assumption” has the meaning set forth in Section 2(a). 

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

“B&W LOC” has the meaning set forth in Section 5(b). 

“B&W Obligations” means any Obligations of, or to the extent arising from the
operations, business, or property of, a B&W Entity for which any MII Entity is responsible under the terms of an Existing Policy or Existing Insurance Agreement, whether arising prior to, at or after the Effective Date. 

“B&W Retained Obligations” has the meaning set forth in Section 2(d).

 “Cash Collateral” has the meaning set forth in Section 7. 

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

“Company Designation” has the meaning set forth in Section 4(a). 

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

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

“Existing Collateral” means any and all of the following forms of security held by the
Company or any ACE Affiliate under the terms of any Existing Policy or Existing Insurance Agreement in order to secure any Obligations outstanding as of the date hereof: (i) any and all letters of credit outstanding as of the date hereof
provided by or required to be provided by a B&W Entity or a MII Entity; (ii) any and all Cash Collateral provided by or required to be provided by a B&W Entity or a MII Entity; (iii) any securities account pledged by a B&W
Entity or a MII Entity pursuant to any Existing Insurance Agreement; or (iv) any other collateral or security previously provided by a B&W Entity or a MII Entity under the terms of any Existing Policy or Existing Insurance Agreement in
order to secure any Obligations outstanding as of the date hereof. 
  

 2 

 “Existing ESIS Agreement” means any
agreement relating to claims or losses under one or more Existing Policies in which ESIS is in direct contractual privity with any MII Entity or any B&W Entity. 

“Existing Insurance Agreement” means any agreement entered into on or prior to the date
hereof by or on behalf of (or which is otherwise binding on) any B&W Entity and/or MII Entity with the Company or an ACE Affiliate in connection with an Existing Policy, including, without limitation, any high deductible agreement, any notice of
election, any collateral agreement, any agreement relating to any deductible or paid loss retrospectively rated insurance program, any agreement relating to deductibles under any of the Existing Policies, any letter or agreement relating to policy
dividends, any early close-out agreement relating to any Existing Policy or Existing Insurance Agreement and any agreement described on Exhibit II and Exhibit VI attached hereto and made a part hereof. 

“Existing Policy” means each policy of general liability insurance, automobile liability
insurance and workers compensation insurance (other than any insurance policy that is the subject of any reinsurance agreement) issued prior to the date hereof by the Company or an ACE Affiliate to a B&W Entity or a MII Entity, as applicable,
including those policies identified on Exhibit III and Exhibit VII attached hereto and made a part hereof. 

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

“Foreign Insurance Agreements” means the Existing Insurance Agreements listed on
Exhibit VI attached hereto and made a part hereof and any other similar written agreements entered into between the Company or any of its Affiliates and a MII Entity or a B&W Entity in connection with or relating to insurance policies
issued to cover risks located primarily outside of the continental United States during the period from January 1, 1974 through May 7, 2010. 

“Foreign Policies” means the Existing Policies listed on Exhibit VII attached
hereto and made a part hereof and any other general liability insurance policy issued by the Company or any of its Affiliates to a MII Entity or a B&W Entity to cover risks located primarily outside of the continental United States during the
period from January 1, 1974 through May 7, 2010. 
 “Master Separation
Agreement” means a Master Separation Agreement to be entered into between MII and The Babcock & Wilcox Company in connection with the Separation. 

“Merger” means the merger, to occur after the date hereof, of Babcock & Wilcox
Holdings, Inc., a Delaware corporation, with and into The Babcock & Wilcox Company, a Delaware corporation and the surviving entity of such Merger. 

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

“MII Cash Collateral” has the meaning set forth in Section 5(a). 

“MII Assumed Obligations” has the meaning set forth in Section 5(a). 

“MII Assumption” has the meaning set forth in Section 2(c). 

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

“MII LOC” has the meaning set forth in Section 5(a). 

“MII Obligations” means any Obligations of, or to the extent arising from the operations,
business, or property of, a MII Entity for which any B&W Entity is responsible under the terms of an Existing Policy or Existing Insurance Agreement, whether arising prior to, at or after the Effective Time. 

“MII Retained Obligations” has the meaning set forth in Section 2(b). 

“Obligations” means any and all amounts, duties, liabilities and obligations, whether
accrued, fixed or contingent, mature or inchoate, known or unknown, including deductibles and premium adjustments, payable by or to be performed by a MII Entity or a B&W Entity to the Company or any ACE Affiliate under the terms of any Existing
Policy or any Existing Insurance Agreement. 
  

 3 

 “Organizational Documents” means
(a) with respect to any corporation, its certificate or articles of incorporation or organization and its bylaws, (b) with respect to any limited partnership, its certificate of limited partnership and its partnership agreement,
(c) with respect to any general partnership, its partnership agreement, and (d) with respect to any limited liability company, its certificate or articles of formation or organization and its operating agreement or other organizational
documents. 
 “Parties” means the Company, MII and B&W, collectively (and
each individually is a “Party”). 
 “Person” means an individual, a
partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, a union, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

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

 “Subsidiary” means, with respect to any specified Person, any corporation,
partnership, limited liability company, joint venture or other organization, whether incorporated or unincorporated, of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a
majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such specified Person or by any one or more of its Subsidiaries, or by
such specified Person and one or more of its Subsidiaries. 
 “Substituted
Collateral” means (i) the MII LOC and the B&W LOC and (ii) any other collateral or security to be provided on or after the date hereof by a B&W Entity or a MII Entity under the terms of any Existing Policy or Existing
Insurance Agreement in order to secure any Obligations outstanding as of the date hereof. 
 2.
Assumption. 
 (a) B&W Assumption. Notwithstanding anything in any Existing
Insurance Agreement or Existing Policy to the contrary, each MII Entity that is a signatory hereto hereby transfers and assigns, and B&W does hereby assume, effective as of the Assumption Time, the B&W Obligations; and B&W hereby agrees
to observe, pay, perform, satisfy, fulfill and discharge any and all now existing and hereafter arising duties, terms, provisions, covenants, obligations and liabilities of any MII Entity under the Existing Policies and Existing Insurance Agreements
in respect of the B&W Obligations (the “B&W Assumption”). The Company, on its own behalf and on behalf of the ACE Affiliates, hereby consents to, and agrees to give full force and effect to, the B&W Assumption. From and
after the Assumption Time, the Company (and/or the applicable ACE Affiliate): (i) may enforce its rights under the Existing Policies and the Existing Insurance Agreements in respect of the B&W Obligations against B&W to the same extent
such Person could, prior to the B&W Assumption, enforce such rights against the applicable MII Entity and (ii) releases each MII Entity from its obligation to observe, pay, perform, satisfy, fulfill or discharge any such B&W
Obligations. 
 (b) MII Retained Obligations. MII hereby agrees to continue to observe,
pay, perform, satisfy, fulfill and discharge any and all of its now existing and hereafter arising Obligations (other than B&W Obligations) (the “MII Retained Obligations”) in accordance with the terms of this Agreement and the
applicable Existing Policy and Existing Insurance Agreement. 
 (c) MII Assumption.
Notwithstanding anything in any Existing Insurance Agreement or Existing Policy to the contrary, each B&W Entity that is a signatory hereto hereby transfers and assigns, and MII does hereby assume, effective as of the Assumption Time, the MII
Obligations; and MII hereby agrees to observe, pay, perform, satisfy, fulfill and discharge any and all now existing and hereafter arising duties, terms, provisions, covenants, obligations and liabilities of any B&W Entity under the Existing
Policies and Existing Insurance Agreements in respect of the MII Obligations (the “MII Assumption”). The Company, on its own behalf and on behalf of the ACE Affiliates, hereby consents to, and agrees to give full force and effect
to, the MII Assumption. From and after the Assumption Time, the Company (and/or the applicable ACE Affiliate): (i) may enforce its rights under the Existing Policies and the Existing Insurance Agreements

  

 4 

 
in respect of the MII Obligations against MII to the same extent such Person could, prior to the MII Assumption, enforce such rights against the applicable B&W Entity and (ii) releases
each B&W Entity from its obligation to observe, pay, perform, satisfy, fulfill or discharge any such MII Obligations. 

(d) B&W Retained Obligations. B&W hereby agrees to continue to observe, pay, perform,
satisfy, fulfill and discharge any and all of its now existing and hereafter arising Obligations (other than MII Obligations) (the “B&W Retained Obligations”) in accordance with the terms of this Agreement and the applicable
Existing Policy and Existing Insurance Agreement. 
 (e) Obligations of the Company and the
ACE Affiliates. For the avoidance of doubt, the Parties acknowledge that nothing in this Agreement shall discharge, limit or in any way affect the obligations of the Company or the ACE Affiliates as insurers under any of the Existing Policies.
Such obligations shall continue to be performed to the extent and in the manner set forth in the applicable Existing Policy by the Company and/or by the ACE Affiliates, as the case may be, for the benefit of such Persons who are entitled to such
performance under the applicable Existing Policy, provided, however, that to the extent that such performance gives rise to Obligations, the responsibility for such Obligations shall be governed by this Agreement. 

(f) Existing ESIS Agreements. The Parties shall use commercially reasonable efforts to enter into
an agreement with ESIS promptly after the date hereof pursuant to which ESIS shall acknowledge and consent to the B&W Assumption and the MII Assumption and the other provisions of this Agreement with respect to determining any MII Obligations,
MII Retained Obligations, B&W Obligations or B&W Retained Obligations (or allocations thereof) in respect of any Existing ESIS Agreement. 

3. Joinder. As of the Effective Date, (a) to the extent that B&W is not already a party thereto
and an Existing Insurance Agreement contains any B&W Obligations, each Existing Insurance Agreement is hereby deemed amended to add B&W as an “Insured” or other such obligor thereunder solely to the extent necessary to give effect
to the B&W Assumption and (b) to the extent that MII is not already a party thereto and an Existing Insurance Agreement contains any MII Obligations, each Existing Insurance Agreement is hereby deemed amended to add MII as an
“Insured” or other such obligor thereunder solely to the extent necessary to give effect to the MII Assumption. 

4. Allocation. 

(a) Company Designations. (i) MII shall continue to pay or perform any and all Obligations
constituting MII Retained Obligations pursuant to and in the manner set forth in the applicable Existing Policy and the applicable Existing Insurance Agreement giving rise to such Obligations and (ii) B&W shall continue to pay or perform
any and all Obligations constituting B&W Retained Obligations pursuant to and in the manner set forth in the applicable Existing Policy and the applicable Existing Insurance Agreement giving rise to such Obligations; provided,
however, that in each case, MII and B&W shall provide to the Company on a timely basis such information as the Company may request so that the Company may determine whether the Obligations constitute MII Retained Obligations or B&W
Retained Obligations. The Company shall determine whether such Obligations constitute MII Retained Obligations or B&W Retained Obligations (the “Company Designation”) and shall notify the applicable Party of any such Company
Designation. With respect to the Obligations arising out of or relating to the Foreign Policies or the Foreign Insurance Agreements, if the Company is unable to make a determination as to whether any such Obligations constitute MII Retained
Obligations or B&W Retained Obligations based upon the information available to the Company, the Company will deem the Company Designation for such Obligations to be MII Retained Obligations. B&W agrees that, notwithstanding any dispute or
disagreement it may have with respect to any Company Designation, it will pay any B&W Retained Obligation pursuant to and in the manner set forth in the applicable Existing Policy and the applicable Existing Insurance Agreement giving rise to
such B&W Retained Obligation; and MII agrees that, notwithstanding any dispute or disagreement it may have with respect to any Company Designation, it will pay such MII Retained Obligation pursuant to and in the manner set forth in the
applicable Existing Policy and the applicable Existing Insurance 
  

 5 

 
Agreement giving rise to such MII Retained Obligation; provided, however, that such payment shall not be construed as prejudicial to either Party in any dispute between MII and
B&W with respect to any such Company Designation. 
 (b) Disputes. Notwithstanding any
dispute or disagreement between MII and B&W concerning a Company Designation, the applicable Party shall pay any amount payable pursuant to a Company Designation as set forth in Section 4(a), and any such dispute or disagreement between MII
and B&W shall be resolved pursuant to Article V of the Master Separation Agreement; provided, that (i) until the Master Separation Agreement is executed and delivered by all parties thereto, the reference to such agreement
herein shall be deemed to refer to the draft thereof dated as of April 28, 2010; (ii) the Company will not be made a party to any arbitration proceeding arising from such dispute or disagreement, but may be called as a witness;
(iii) any costs incurred by the Company in respect of any such arbitration proceeding will be fully reimbursed to the Company equally by the Disputing Parties promptly following receipt of a reimbursement demand from the Company;
(iv) under no circumstances will MII or B&W, as a result of such arbitration proceeding, require the Company to return any amount received by the Company pursuant to a prior Company Designation, whether such amount was received as a result
of the Company’s draw against security posted for its benefit or otherwise, and (v) the Company shall comply with the allocation or other resolution of such dispute established by any award or order of such arbitration, or settlement
between the Disputing Parties; and (vi) any indemnification and reimbursement of the Company by B&W and MII pursuant to this Agreement, the Existing Policies and the Existing Insurance Agreements and any other agreement relating to the
disputed Company Designation shall be in accordance with the allocation established by such award, order or settlement of such dispute. 

5. Collateral and Fee. 

(a) MII LOC. 

(i) MII will, within fifteen (15) days after the Effective Date, provide to the Company, as
beneficiary thereof, (A) cash collateral in an amount of $687,236 in respect of its Obligations under the Existing Insurance Agreements and the Existing Policies (other than the Foreign Insurance Agreements and Foreign Policies) and
(B) cash collateral in an amount of $6,074,640 in respect of the Foreign Insurance Agreements and Foreign Policies (such cash collateral individually and collectively being referred to herein as the “MII Cash Collateral”). The
Company shall return the MII Cash Collateral to MII promptly upon receipt of the MII LOC as set forth below. MII will, within fifteen (15) days after July 1, 2010, provide to the Company, as beneficiary thereof, (A) a clean,
irrevocable and unconditional letter of credit in an amount of $687,236 in respect of its Obligations under the Existing Insurance Agreements and the Existing Policies (other than the Foreign Insurance Agreements and Foreign Policies) and (B) a
clean, irrevocable and unconditional letter of credit in an amount of $6,074,640 in respect of the Foreign Insurance Agreements and Foreign Policies (each such letter of credit individually and collectively being referred to herein as the
“MII LOC”), issued in a form and by a bank or other financial institution, in each case acceptable to the Company; and/or such other forms of collateral as the Company may permit from time to time. The MII LOC shall be in an
aggregate amount that is less than the aggregate amount of the Existing Collateral provided by MII and shall secure the MII Retained Obligations and the Obligations assumed by MII in the MII Assumption (the “MII Assumed
Obligations”). 
 (ii) The MII LOC shall be “evergreen,” meaning that it shall
provide by its terms that it will be renewed automatically each year for an additional year unless written notice of non-renewal is received by the Company at least sixty (60) days prior to the MII LOC’s anniversary date. If the Company
permits MII to provide collateral in a form other than the MII LOC, MII shall provide such collateral in an amount and form acceptable to the Company. 

(iii) MII shall keep the MII LOC in place (or other collateral acceptable to the Company) as security for
payment of the MII Retained Obligations and the MII Assumed Obligations, until the 
  

 6 

 
Company determines in its sole discretion that there is no longer any need for such collateral. If there shall be a material deterioration in the financial condition of the bank or other
financial institution which has issued the MII LOC, the Company shall have the right to require MII to replace the MII LOC with a new letter of credit with similar terms issued by a bank or other financial institution then acceptable to the Company.

 (iv) The Company shall have the right to draw against the MII LOC and/or other collateral in
each instance where any portion of the MII Retained Obligation or the MII Assumed Obligations for any reason is not fulfilled in the manner and within the time periods required under this Agreement or the Existing Policies or Existing Insurance
Agreements giving rise thereto. 
 (v) Annually, the Company shall review and redetermine the
amount of the MII Retained Obligations and the MII Assumed Obligations and the amount of collateral security required pursuant to this Agreement. At such time, MII will provide its most recent audited financial statements, interim financial
statements, and any other financial information reasonably requested by the Company for the purpose of evaluating the financial condition of MII. MII will provide any needed increases in the amount of the MII LOC (and/or other collateral if
acceptable to the Company) within thirty (30) days of the Company’s written request for any additional required amount of the MII LOC. The Company will effect any decreases in the amount of the MII LOC (and/or other collateral) promptly,
provided that MII is not in breach of any of its obligations under this Agreement, the Existing Policies or any Existing Insurance Agreement. 

(b) B&W LOC. 

(i) B&W will, within fifteen (15) days after the Effective Date, provide to the Company, as
beneficiary thereof, (A) a clean, irrevocable and unconditional letter of credit in an amount of $33,828,776 in respect of its Obligations under the Existing Insurance Agreements and the Existing Policies (other than the Foreign Insurance
Agreements and Foreign Policies) and (B) a clean, irrevocable and unconditional letter of credit in an amount of $200,000 in respect of the Foreign Insurance Agreements and Foreign Policies (each such letter of credit individually and
collectively being referred to herein as the “B&W LOC”), issued in a form and by a bank or other financial institution, in each case acceptable to the Company; and/or such other forms of collateral as the Company may permit from
time to time. The B&W LOC shall be in an aggregate amount that is less than the aggregate amount of the Existing Collateral provided by B&W and shall secure the B&W Retained Obligations and the Obligations assumed by B&W in the
B&W Assumption (the “B&W Assumed Obligations”). 
 (ii) The B&W LOC
shall be “evergreen,” meaning that it shall provide by its terms that it will be renewed automatically each year for an additional year unless written notice of non-renewal is received by the Company at least sixty (60) days prior to
the B&W LOC’s anniversary date. If the Company permits B&W to provide collateral in a form other than the B&W LOC, B&W shall provide such collateral in an amount and form acceptable to the Company. 

(iii) B&W shall keep the B&W LOC in place (or other collateral acceptable to the Company) as
security for payment of the B&W Retained Obligations and the B&W Assumed Obligations, until the Company determines in its sole discretion that there is no longer any need for such collateral. If there shall be a material deterioration in the
financial condition of the bank or other financial institution which has issued the B&W LOC, the Company shall have the right to require B&W to replace the B&W LOC with a new letter of credit with similar terms issued by a bank or other
financial institution then acceptable to the Company. 
 (iv) The Company shall have the right to
draw against the B&W LOC and/or other collateral in each instance where any portion of the B&W Retained Obligations or the B&W Assumed Obligations for any reason is not fulfilled in the manner and within the time periods required under
this Agreement or the Existing Policies or Existing Insurance Agreements giving rise thereto. 
  

 7 

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

(c) Substituted Collateral. Notwithstanding anything in any Existing Policy or Existing Insurance
Agreement to the contrary, the Parties, each B&W Entity that is a party hereto and each MII Entity that is a party hereto hereby agree that, upon receipt of the Substituted Collateral as set forth in Section 5(a)(i) and 5(b)(i), the
Existing Collateral shall be replaced with such Substituted Collateral and, accordingly, shall be released by the Company and the ACE Affiliates. 

(d) Fee. No later than fifteen (15) days after the Effective Date, MII shall pay to the
Company the Fee, which shall be paid pursuant to the Company’s wire instructions as provided to MII in writing prior to the date such Fee is payable. 

6. Existing Collateral. The Substituted Collateral required to be provided by MII and B&W hereunder
shall, except to the extent provided otherwise in this Agreement, be subject to all of the terms and conditions applicable to the Existing Collateral pursuant to the Existing Insurance Agreements to the same extent that such terms and conditions
applied to the Existing Collateral thereunder. 
 7. Security Interest. Each of MII and B&W
will separately provide (or have provided) to the Company and ESIS, from time to time, funds to be credited to paid loss deposit funds, deductible funds and/ or loss funds (collectively, “Cash Collateral”) that the Company or ESIS
shall hold pursuant to the Existing Insurance Agreements with respect to the MII Retained Obligations and the MII Assumed Obligations, in the case of MII, and with respect to the B&W Retained Obligations and the B&W Assumed Obligations, in
the case of B&W. Each of MII and B&W hereby grant to the Company, for its benefit and the benefit of the ACE Affiliates, a continuing first priority security interest in and lien on all of their respective right, title and interest, if any,
in and to the Cash Collateral and all proceeds thereof as security for their now existing and hereafter arising Obligations to the Company or such ACE Affiliates. The Company shall hold the Cash Collateral in accordance with the terms of the
applicable Existing Insurance Agreement pursuant to which such Cash Collateral was provided to the Company or the applicable ACE Affiliate. The Company shall have the sole and exclusive right, and is hereby authorized, to use the Cash Collateral to
pay any and all Obligations of MII and/or B&W in accordance with the Company Designation in accordance with the terms of the applicable Existing Insurance Agreement and this Agreement. 

8. Billing. On and after the Effective Date, the Company (or any third party administrator acting on behalf
of the Company in respect of an Existing Policy) will, in each case in accordance with the billing procedures set forth in the applicable Existing Policy and Existing Insurance Agreement: 

(a) bill MII directly for the MII Retained Obligations and the MII Assumed Obligations; and 

(b) bill B&W directly for the B&W Retained Obligations and the B&W Assumed Obligations.

 9. Amendments. Neither this Agreement nor any provision hereof may be amended, changed, waived,
discharged or terminated except by a written instrument signed by the Company, B&W, MII and each other Party, if any, against whom enforcement of such amendment, change, waiver, discharge or termination is sought. 

 

 8 

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

12. No Waiver. The failure or refusal by any Party to exercise any rights granted hereunder shall not
constitute a waiver of such rights or preclude the subsequent exercise thereof, and no oral communication shall be asserted as a waiver of any such rights hereunder unless such communication shall be confirmed in a writing plainly expressing an
intent to waive such rights and signed by the Party against whom such waiver is asserted. 
 13.
Counterparts. This Agreement may be executed in any number of counterparts each of which when so executed and delivered shall constitute an original, but such counterparts together shall constitute one and the same agreement. The exchange
of copies of this Agreement and of signature pages by facsimile transmission or by electronic mail shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all
purposes. Signatures of the Parties and other Persons signatory hereto transmitted by facsimile or by electronic mail shall be deemed to be their original signatures for all purposes. 

14. No Third Party Beneficiary. This Agreement shall not be deemed to give any right or remedy to any third
party whatsoever unless otherwise specifically granted hereunder. 
 15. Parties’
Representations. As of the Effective Date, each of the Parties expressly represents on its own behalf: (a) it is an entity in good standing in its jurisdiction of organization; (b) it has all requisite corporate power and authority
to enter into this Agreement, and to perform its obligations hereunder; (c) the execution and delivery by it of this Agreement, and the performance by it of its obligations under this Agreement, have been duly authorized by all necessary
corporate or other action; (d) this Agreement, when duly executed and delivered by it, and subject to the due execution and delivery hereof by the other Parties, will be a valid and binding obligation of it, enforceable against it, its
successors and permitted assigns, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity principles; (e) the
execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby in accordance with the respective terms and conditions hereof will not (i) violate any provision of its Organizational Documents,
(ii) violate any applicable order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against it, or binding upon it, or any agreement with, or condition imposed by, any governmental or regulatory
body, foreign or domestic, binding upon it as of the date hereof, or (iii) violate any agreement, contract, obligation, promise or undertaking that is legally binding and to which it is a party or by which it is bound; and (f) the
signatory hereto on behalf of it is duly authorized and legally empowered to enter into this Agreement on its behalf. 
  

 9 

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

					
	If to the Company	  	 ACE American Insurance Company

225 E. John Carpenter Freeway, Suite 1300

Irving, TX 75062

		  	 Attention:
	  	 Underwriting Manager

ACE Risk Management

			
		  	 Telephone:
	  	 (972) 465.7500

		  	 Facsimile:
	  	 (972) 465.7826

		
	If to any MII Entity:	  	 McDermott International, Inc.

757 N. Eldridge Parkway

Houston, Texas 77079

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

			
		  	 Telephone:
	  	 281-870-5785

		  	 Telecopier:
	  	 281-870-5923

		  	 Electronic Mail:
	  	 twoodard@mcdermott.com

		
	If to any B&W Entity:	  	 Prior to the Separation:

		
		  	 Babcock & Wilcox Holdings, Inc.

800 Main Street

Lynchburg, Virginia 24504

		  	 Attention:
	  	 Director, Risk Management (with copy to General Counsel)

		  	 Telephone:
	  	 434-522-6800

			
		  	 with a copy to:
	  	
		  	 McDermott International, Inc.

777 N. Eldridge Parkway

Houston, Texas 77079

		  	 Attention:
	  	 Director, Risk Management (with copy to General Counsel)

			
		  	 Telephone:
	  	 281-870-5476

		  	 Telecopier:
	  	 281-870-5923

		  	 Electronic Mail:
	  	 cjryan@mcdermott.com

		
		  	 On and After the Separation:

		
		  	 The Babcock & Wilcox Company

The Harris Building

13024 Ballantyne Corporate Place, Suite 700

Charlotte, North Carolina

		  	 Attention:
	  	 Director, Risk Management (with copy to General Counsel)

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

(A) upon personal delivery; or 

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

 

 10 

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

18. Entire Agreement. This Agreement, together with the Existing Policies and Existing Insurance
Agreements, constitute the entire agreement among all of the Parties and supersedes all other prior agreements and understandings, both written and oral, with respect to the subject matter hereof. 

19. Dispute Resolution. If a dispute between either MII or B&W, on the one hand, and the Company or any
ACE Affiliate, on the other hand, involves rights or obligations arising under this Agreement, or any of the Existing Policies or Existing Insurance Agreements, the arbitration provisions in the most recent Existing Insurance Agreement referenced in
Exhibit II shall govern the resolution of the entire dispute in all respects. In any such arbitration brought by or against MII or B&W, the other of B&W or MII, as applicable, shall have right to associate effectively in the defense and/or
prosecution of such arbitration. 
 20. Severability. If any term or other provision of this
Agreement or the Exhibits attached hereto is determined by a nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being enforced, the court, administrative agency or arbitrator shall interpret this Agreement so as to effect the original intent of the Parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent possible. If any sentence in this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is
enforceable. 
 21. Rules of Construction. The definitions of terms used herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified,
(b) any reference herein to any law shall be construed as referring to such law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time, (c) any reference herein to any Person shall be construed to
include such Person’s successors and assigns (subject to the restrictions contained herein), (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (e) with respect to the determination of any time period, the word “from” means “from and including” and the word “to” means “to and
including” and (f) any reference herein to Articles, Sections and Exhibits shall be construed to refer to Articles and Sections of, and Exhibits to, this Agreement. No provision of this Agreement shall be interpreted or construed against
any Person solely because such Person or its legal representative drafted such provision. 
 [Remainder of Page Intentionally
Left Blank] 
  

 11 

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

			
	 ACE AMERICAN INSURANCE COMPANY,

on behalf of itself and the ACE Affiliates

		
	 By:
	 	 /S/    LAURA
VEST        

	 Name:
	 	Laura Vest
	 Title:
	 	Vice President
	
	MCDERMOTT INTERNATIONAL, INC.
		
	 By:
	 	 /S/    LIANE K.
HINRICHS        

	 Name:
	 	Liane K. Hinrichs
	 Title:
	 	Senior Vice President
	
	BABCOCK & WILCOX HOLDINGS, INC.
		
	 By:
	 	 /S/    MICHAEL S.
TAFF        

	 Name:
	 	Michael S. Taff
	 Title:
	 	Senior Vice President

Signature Page to Assumption and Loss Allocation Agreement 

 ACKNOWLEDGED AND AGREED FOR PURPOSES OF SECTIONS 2, 3 and 5(c):

			
	B&W ENTITIES:
	
	AMERICON EQUIPMENT SERVICES, INC.
	
	AMERICON, INC.
	
	APPLIED SYNERGISTICS, INC.
	
	BABCOCK & WILCOX CANADA LTD.
	
	BABCOCK & WILCOX CHINA HOLDINGS, INC.
	
	BABCOCK & WILCOX CONSTRUCTION CO., INC.
	
	BABCOCK & WILCOX DE MONTERREY, S.A. DE C.V.
	
	BABCOCK & WILCOX DENMARK HOLDINGS, INC.
	
	BABCOCK & WILCOX EBENSBURG POWER, INC.
	
	BABCOCK & WILCOX EQUITY INVESTMENTS, INC.
	
	BABCOCK & WILCOX INDIA HOLDINGS, INC.
	
	BABCOCK & WILCOX INTERNATIONAL SALES AND SERVICE CORPORATION
	
	BABCOCK & WILCOX INTERNATIONAL, INC.
		
	 By:
	 	 /S/    BENJAMIN H.
BASH        

	 Name:
	 	Benjamin H. Bash
	 Title:
	 	Assistant Secretary of each of the above

Signature Page to Assumption and Loss Allocation Agreement 

			
	 BABCOCK & WILCOX MODULAR

NUCLEAR ENERGY LLC

	
	BABCOCK & WILCOX NUCLEAR OPERATIONS GROUP, INC.
	
	 BABCOCK & WILCOX NUCLEAR ENERGY,

INC.

	
	 BABCOCK & WILCOX NUCLEAR

SERVICES (U.K.) LIMITED

	
	 BABCOCK & WILCOX TECHNICAL

SERVICES CLINCH RIVER, LLC

	
	 BABCOCK & WILCOX POWER

GENERATION GROUP, INC.

	
	 BABCOCK & WILCOX TECHNICAL

SERVICES GROUP, INC.

	
	 BABCOCK & WILCOX TECHNICAL

SERVICES SAVANNAH RIVER COMPANY

	
	BABCOCK & WILCOX VOLUND A/S
	
	BCE PARTS LTD.
	
	BWX TECHNOLOGIES, INC.
	
	BWXT FEDERAL SERVICES, INC.
	
	BWXT HANFORD COMPANY
	
	BWXT OF IDAHO, INC.
	
	BWXT OF OHIO, INC.
	
	BWXT WASHINGTON, INC.
		
	 By:
	 	/S/    BENJAMIN H.
BASH        
	 Name:
	 	Benjamin H. Bash
	 Title:
	 	Assistant Secretary of each of the above

Signature Page to Assumption and Loss Allocation Agreement 

			
	CREOLE INSURANCE COMPANY, LTD.
	
	DELTA POWER SERVICES, LLC
	
	DIAMOND OPERATING CO., INC.
	
	DIAMOND POWER AUSTRALIA HOLDINGS, INC.
	
	DIAMOND POWER CHINA HOLDINGS, INC.
	
	 DIAMOND POWER EQUITY INVESTMENTS,

INC.

	
	DIAMOND POWER INTERNATIONAL, INC.
	
	 DIAMOND POWER SPECIALTY

(PROPRIETARY) LIMITED

	
	DPS BERKELEY, LLC
	
	DPS CADILLAC, LLC
	
	DPS FLORIDA, LLC
	
	DPS GREGORY, LLC
	
	DPS LOWELL COGEN, LLC
	
	DPS MECKLENBURG, LLC
	
	DPS MICHIGAN, LLC
	
	DPS MOJAVE, LLC
	
	DPS SABINE, LLC
	
	GUMBO INSURANCE COMPANY, LTD.
		
	By:	 	/S/    BENJAMIN H.
BASH        
	 Name:
	 	Benjamin H. Bash
	 Title:
	 	Assistant Secretary of each of the above

Signature Page to Assumption and Loss Allocation Agreement 

			
	INTECH INTERNATIONAL INC.
	
	INTECH, INC.
	
	IVEY-COOPER SERVICES, L.L.C.
	
	MARINE MECHANICAL CORPORATION
	
	NFS HOLDINGS, INC.
	
	NOG-ERWIN HOLDINGS, INC.
	
	NORTH COUNTY RECYCLING, INC.
	
	NUCLEAR FUEL SERVICES, INC.
	
	O&M HOLDING COMPANY
	
	SOFCO - EFS HOLDINGS LLC
		
	By:	 	/S/    BENJAMIN H.
BASH        
	 Name:
	 	Benjamin H. Bash
	 Title:
	 	Assistant Secretary of each of the above
	
	 BABCOCK & WILCOX TECHNICAL

SERVICES (U.K.) LIMITED

		
	By:	 	/S/    BENJAMIN H.
BASH        
	 Name:
	 	Benjamin H. Bash
	 Title:
	 	Joint Secretary

Signature Page to Assumption and Loss Allocation Agreement 

			
	B&W DE PANAMA, INC.
	
	 BABCOCK & WILCOX INTERNATIONAL

INVESTMENTS CO., INC.

	
	 BABCOCK & WILCOX INVESTMENT

COMPANY

		
	By:	 	/S/    MICHAEL S.
TAFF        
	 Name:
	 	Michael S. Taff
	 Title:
	 	Senior Vice President, of each of the above

Signature Page to Assumption and Loss Allocation Agreement 

			
	 BABCOCK & WILCOX INDIA PRIVATE

LIMITED

	
	DIAMOND POWER SPECIALTY LIMITED
		
	By:	 	/S/    ROBERT E.
STUMPF        
	 Name:
	 	Robert E. Stumpf
	 Title:
	 	Assistant Secretary
	
	NATIONAL ECOLOGY COMPANY
		
	By:	 	/S/    ROBERT E.
STUMPF        
	 Name:
	 	Robert E. Stumpf
	 Title:
	 	Secretary
	
	DIAMOND POWER DO BRASIL LIMITADA

  

			
	DIAMOND POWER INTERNATIONAL, INC.
	
	 BABCOCK & WILCOX

INTERNATIONAL SALES AND
 SERVICE
CORPORATION
 (as Shareholders of Diamond Power do

Brasil Limitada)

		
	By:	 	/S/    ROBERT E.
STUMPF        
	 Name:
	 	Robert E. Stumpf
	 Title:
	 	Assistant Secretary of each of the Shareholders

Signature Page to Assumption and Loss Allocation Agreement 

			
	P. T. BABCOCK & WILCOX ASIA
	
	 SERVICIOS DE FABRICACION DE VALLE

SOLEADO, S.A. DE C.V.

	
	 SERVICOS PROFESIONALES DE VALLE

SOLEADO, S.A. DE C.V.

		
	By:	 	/S/    LIANE K.
HINRICHS        
	 Name:
	 	Liane K. Hinrichs
	 Title:
	 	Secretary

Signature Page to Assumption and Loss Allocation Agreement 

			
	 DIAMOND POWER CENTRAL & EASTERN

EUROPE S.R.O.

	
	DIAMOND POWER FINLAND OY
		
	By:	 	/S/    JUHA K.
MUSTONEN        
	 Name:
	 	Juha K. Mustonen
	 Title:
	 	Managing Director

Signature Page to Assumption and Loss Allocation Agreement 

			
	 DIAMOND POWER MACHINE (HUBEI) CO.,

INC.

		
	By:	 	/S/    DAVID R.
GIBBS        
	 Name:
	 	David R. Gibbs
	 Title:
	 	Director

Signature Page to Assumption and Loss Allocation Agreement 

			
	DIAMOND POWER SWEDEN AB
		
	By:	 	/S/    MIKA J.
HAIKOLA        
	 Name:
	 	Mika J. Haikola
	 Title:
	 	Managing Director

Signature Page to Assumption and Loss Allocation Agreement 

 ACKNOWLEDGED AND AGREED FOR PURPOSES OF SECTIONS 2, 3 and 5(c):

  

			
	MII ENTITIES:
	
	 CHARTERING COMPANY (SINGAPORE)

PTE. LTD.

	
	 J. RAY MCDERMOTT (QINGDAO) PTE.

LTD.

	
	 J. RAY MCDERMOTT ASIA PACIFIC PTE.

LTD.

	
	MALMAC SDN. BHD.
	
	 MCDERMOTT (MALAYSIA) SENDIRIAN

BERHAD

		
	By:	 	/S/    JEFF J.
HIGHTOWER        
	 Name:
	 	Jeff J. Hightower
	 Title:
	 	Director of each of the above
	
	BOUDIN INSURANCE COMPANY, LTD.
	
	 J. RAY MCDERMOTT EASTERN

HEMISPHERE LIMITED

	
	LAGNIAPPE INSURANCE COMPANY, LTD.
		
	By:	 	/S/    LIANE K.
HINRICHS        
	 Name:
	 	Liane K. Hinrichs
	 Title:
	 	Assistant Secretary, of each of the above

Signature Page to Assumption and Loss Allocation Agreement 

			
	J. RAY MCDERMOTT UK LTD.
		
	By:	 	/S/    LIANE K.
HINRICHS        
	 Name:
	 	Liane K. Hinrichs
	 Title:
	 	Joint Secretary
	
	EASTERN MARINE SERVICES, INC.
	
	 GLOBAL ENERGY - MCDERMOTT

LIMITED

	
	HYDRO MARINE SERVICES, INC.
	
	J. RAY MCDERMOTT (CASPIAN), INC.
	
	J. RAY MCDERMOTT (NIGERIA) LTD.
	
	J. RAY MCDERMOTT (NORWAY), AS
	
	 J. RAY MCDERMOTT CANADA HOLDING,

LTD.

	
	J. RAY MCDERMOTT CANADA, LTD.
	
	J. RAY MCDERMOTT CONTRACTORS, INC.
	
	 J. RAY MCDERMOTT DE MEXICO, S.A. DE

C.V.

		
	By:	 	/S/    LIANE K.
HINRICHS        
	 Name:
	 	Liane K. Hinrichs
	 Title:
	 	Secretary of each of the above

Signature Page to Assumption and Loss Allocation Agreement 

			
	
	J. RAY MCDERMOTT ENGINEERING SERVICES PRIVATE LIMITED
	
	J. RAY MCDERMOTT ENGINEERING, LLC
	
	J. RAY MCDERMOTT FAR EAST, INC.
	
	 J. RAY MCDERMOTT INTERNATIONAL,

INC.

	
	 J. RAY MCDERMOTT INTERNATIONAL

VESSELS, LTD.

	
	J. RAY MCDERMOTT INVESTMENTS B.V.
	
	J. RAY MCDERMOTT KAZAKHSTAN LLP
	
	 J. RAY MCDERMOTT LOGISTIC SERVICES

PVT. LIMITED

	
	J. RAY MCDERMOTT MIDDLE EAST, INC.
	
	J. RAY MCDERMOTT SOLUTIONS, INC.
	
	J. RAY MCDERMOTT TECHNOLOGY, INC.
	
	 J. RAY MCDERMOTT UNDERWATER

SERVICES, INC.

	
	 J. RAY MCDERMOTT WEST AFRICA

HOLDINGS, INC.

	
	J. RAY MCDERMOTT WEST AFRICA, INC.
		
	By:	 	/S/    LIANE K.
HINRICHS        
	 Name:
	 	Liane K. Hinrichs
	 Title:
	 	Secretary of each of the above

Signature Page to Assumption and Loss Allocation Agreement 

			
	
	 MCDERMOTT CASPIAN CONTRACTORS,

INC.

	
	MCDERMOTT FAR EAST, INC.
	
	 MCDERMOTT GULF OPERATING

COMPANY, INC.

	
	MCDERMOTT INTERNATIONAL B.V.
	
	 MCDERMOTT INTERNATIONAL

INVESTMENTS CO., INC.

	
	 MCDERMOTT INTERNATIONAL MARINE

INVESTMENTS N.V.

	
	 MCDERMOTT INTERNATIONAL TRADING

CO., INC.

	
	 MCDERMOTT INTERNATIONAL VESSELS,

INC.

	
	 MCDERMOTT MARINE MEXICO, S.A. DE

C.V.

	
	 MCDERMOTT OFFSHORE SERVICES

COMPANY, INC.

	
	MCDERMOTT OLD JV OFFICE, INC.
	
	 MCDERMOTT OVERSEAS INVESTMENT

CO. N.V.

	
	MCDERMOTT OVERSEAS, INC.
	
	MCDERMOTT TRADE CORPORATION
		
	By:	 	/S/    LIANE K.
HINRICHS        
	 Name:
	 	Liane K. Hinrichs
	 Title:
	 	Secretary of each of the above

Signature Page to Assumption and Loss Allocation Agreement 

			
	 MENTOR SUBSEA TECHNOLOGY

SERVICES, INC.

	
	NORTH ATLANTIC VESSEL, INC.
	
	 OFFSHORE PIPELINES INTERNATIONAL,

LTD.

	
	OPI VESSELS, INC.
	
	OPMI, LTD.
	
	SABINE RIVER REALTY, INC.
	
	 SERVICIOS DE FABRICACION DE

ALTAMIRA, S.A. DE C.V.

	
	 SERVICOS PROFESIONALES DE

ALTAMIRA, S.A. DE C.V.

	
	SPARTEC, INC.
	
	VARSY INTERNATIONAL N.V.
		
	By:	 	/S/    LIANE K.
HINRICHS        
	 Name:
	 	Liane K. Hinrichs
	 Title:
	 	Secretary of each of the above
	
	MCDERMOTT KFT.
		
	By:	 	/S/    LIANE K.
HINRICHS        
	 Name:
	 	Liane K. Hinrichs
	 Title:
	 	Managing Director

Signature Page to Assumption and Loss Allocation Agreement 

			
	 J. RAY MCDERMOTT (AUST.) HOLDING

PTY. LIMITED

	
	MCDERMOTT AUSTRALIA PTY. LTD.
		
	By:	 	/S/    LIANE K.
HINRICHS        
	 Name:
	 	Liane K. Hinrichs
	 Title:
	 	Corporate Officer of each of the above
	
	MCDERMOTT INCORPORATED
	
	MCDERMOTT PANAMA HOLDINGS, S.A.
	
	J. RAY MCDERMOTT HOLDINGS, LLC
	
	J. RAY MCDERMOTT, INC.
	
	J. RAY MCDERMOTT, S.A.
	
	MCDERMOTT CAYMAN LTD.
		
	By:	 	/S/    LIANE K.
HINRICHS        
	 Name:
	 	Liane K. Hinrichs
	 Title:
	 	Senior Vice President of each of the above
	
	 MCDERMOTT INTERNATIONAL

MARKETING, INC.

		
	By:	 	/S/    LIANE K.
HINRICHS        
	 Name:
	 	Liane K. Hinrichs
	 Title:
	 	President

Signature Page to Assumption and Loss Allocation Agreement 

					
	FLOATEC, LLC
		
	By:	 	/S/    ROBERT E.
STUMPF        
	 Name:
	 	Robert E. Stumpf
	 Title:
	 	Assistant Secretary
	
	MCDERMOTT HOLDINGS (U.K.) LIMITED
	
	 MCDERMOTT MARINE CONSTRUCTION

LIMITED

		
	By:	 	/S/    ROBERT E.
STUMPF        
	 Name:
	 	Robert E. Stumpf
	 Title:
	 	Joint Secretary of each of the above
	
	 MCDERMOTT SERVICOS DE

CONSTRUCAO, LTDA.

		
		 	J. RAY MCDERMOTT INC.
		
		 	 MCDERMOTT OVERSEAS, INC.,

(as Shareholders)

			
		 	By:	 	/S/    ROBERT E.
STUMPF        
		 	 Name:
	 	Robert E. Stumpf
		 	 Title:
	 	Assistant Secretary
	
	OFFSHORE PIPELINES SDN. BHD.
		
		 	 OFFSHORE PIPELINES SDN. BLD.

(as Sole Shareholder)

			
		 	By:	 	/S/    ROBERT E.
STUMPF        
		 	 Name:
	 	Robert E. Stumpf
		 	 Title:
	 	Assistant Secretary

Signature Page to Assumption and Loss Allocation Agreement 

			
	INTERNATIONAL VESSELS LTD.
		
	By:	 	/S/    STEVEN W.
ROLL        
	 Name:
	 	Steven W. Roll
	 Title:
	 	Director

Signature Page to Assumption and Loss Allocation Agreement 

			
	PT. BAJA WAHANA INDONESIA
		
	By:	 	/S/    SCOTT
CUMMINS        
	 Name:
	 	Scott Cummins
	 Title:
	 	President Director

Signature Page to Assumption and Loss Allocation Agreement 

			
	SINGAPORE HUANGDAO PTE. LTD.
		
	By:	 	/S/    ROCKNE L.
MOSELEY        
	 Name:
	 	Rockne L. Moseley
	 Title:
	 	Director

Signature Page to Assumption and Loss Allocation Agreement

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