Document:

Exhibit 4.4

 

Exhibit 4.4

     THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY STATE SECURITIES COMMISSION,
AND MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A REGISTRATION STATEMENT
WHICH IS EFFECTIVE UNDER THE SECURITIES ACT AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS,
IMMEDIATELY PRIOR TO THE TIME SET FOR TRANSFER, THE HOLDER PROVIDES A REASONABLY ACCEPTABLE LEGAL
OPINION TO THE COMPANY THAT SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF THE SECURITIES ACT
AND OTHER APPLICABLE STATE LAWS AND RULES.

SERVICEWARE TECHNOLOGIES, INC.

WARRANT

Warrant
No. 2005-_________                                                
                        
                        
                        
             Dated: February 8, 2005

     ServiceWare Technologies, Inc., a Delaware corporation (the “Company”), hereby certifies that,
for value received, ____________or its registered assigns (including permitted
transferees, the “Holder”), is entitled to purchase from the Company up to a total of
___________shares (as adjusted from time to time as provided in Section
9) of Common Stock (as defined below) (each such share, a “Warrant Share” and all such shares,
the “Warrant Shares”) at an exercise price equal to $7.20 per share (as adjusted from time to time
as provided in Section 9, the “Exercise Price”), at any time and from time to time on or
after the Original Issue Date (as defined below) through and including January 30, 2009 (the
“Expiration Date”), and subject to the following terms and conditions. This Warrant is one of a
series of similar warrants (the “Warrants”) issued pursuant to that certain Amended and Restated
Agreement and Plan of Merger, dated as of February 8, 2005, by and among the Company, Kanisa Inc.,
a Delaware corporation (“Kanisa”) and SVCW Acquisition, Inc., a Delaware corporation (the “Merger
Agreement”), providing for the issuance of Common Stock and Warrants by the Company to certain
stockholders of Kanisa, and subject to that certain Registration Rights Agreement, dated as of
February 8, 2005, by the among the Company and the parties thereto (the “Registration Rights
Agreement”).

     1. Definitions. The capitalized terms used herein and not otherwise defined shall
have the meanings set forth below:

          “Affiliate” of any specified Person means any other person or entity directly or indirectly
controlling, controlled by or under direct or indirect common control with such specified Person.
For purposes of this definition, “control” means the power to direct the management and policies of
such Person or firm, directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.

 

          “Common Stock” means the common stock of the Company, $0.01 par value per share, as
constituted on the Original Issue Date.

          “Company Offer” means any tender offer (including exchange offer), as amended from time to
time, made by the Company or any of its subsidiaries for the purchase (including the acquisition
pursuant to an exchange offer) of all or any portion of the outstanding shares of Common Stock,
except as permitted pursuant to Rule 10b-18 promulgated under the Exchange Act.

          “Eligible Market” means any of the New York Stock Exchange, the American Stock Exchange or
Nasdaq.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          “Market Price” shall mean

          (i) if the principal trading market for such securities is an exchange, the average of the
last reported sale prices per share for the last five previous Trading Days in which a sale was
reported, as officially reported on any consolidated tape,

          (ii) if clause (i) is not applicable, the average of the closing bid price per share for the
last five previous Trading Days as set forth by Nasdaq or on the OTC Bulletin Board, or

          (iii) if clauses (i) and (ii) are not applicable, the average of the closing bid price per
share for the last five previous Trading Days as set forth in the National Quotation Bureau sheet
listing for such securities.

          Notwithstanding the foregoing, if there is no reported sales price or closing bid price, as
the case may be, on any of the ten Trading Days preceding the event requiring a determination of
Market Price hereunder, then the Market Price shall be determined in good faith by resolution of
the Board of Directors of the Company, based on the best information available to it.

          “Nasdaq” means the Nasdaq SmallCap Market or Nasdaq National Market.

          “Original Issue Date” means February 8, 2005.

          “Other Securities” refers to any capital stock (other than Common Stock) and other securities
of the Company or any other Person which the Holder of this Warrant at any time shall be entitled
to receive, or shall have received, upon the exercise of this Warrant, in lieu of or in addition to
Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or
in replacement of Common Stock or Other Securities pursuant to Section 9 hereof or
otherwise.

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          “Person” means any court or other federal, state, local or other governmental
authority or other individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind.

          “Registration Statement” shall mean a registration statement under the Securities Act filed by
the Company and declared effective by the Securities and Exchange Commission registering the resale
of Warrant Shares by the Holder.

          “Trading Day” means (a) any day on which the Common Stock is listed or quoted and traded on
any Eligible Market or (b) if the Common Stock is not then quoted and traded on any Eligible
Market, then a day on which trading occurs on the OTC Bulletin Board (or any successor thereto).

          “Transfer Agent” shall mean American Stock Transfer & Trust Company or such other Person as
the Company may appoint from time to time.

          “Warrant Shares” shall initially mean shares of Common Stock and in addition may include Other
Securities and Distributed Property (as defined in Section 9(e)) issued or issuable from
time to time upon exercise of this Warrant.

     2. Registration of Warrant. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.

     3. Registration of Transfers. The Company shall register the transfer of any portion
of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of
Assignment attached hereto as Appendix A duly completed and signed, to the Company at its
address specified herein. Upon any such registration and transfer, a new warrant in substantially
the form of a Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this
Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder.
The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations of a holder of a Warrant.

     4. Exercise and Duration of Warrant.

          (a) This Warrant shall be exercisable by the registered Holder at any time and from time to
time on and after the Original Issue Date through and including the Expiration Date. At 5:00 P.M.,
New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto
shall be and become void and of no value.

          (b) A Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in
the form attached hereto as Appendix B (the “Exercise Notice”),

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          appropriately completed and duly signed, and (ii) payment of the Exercise Price for the number
of Warrant Shares as to which this Warrant is being exercised (as set forth in Section 4(c)
below), and the date such items are received by the Company is an “Exercise Date.” Execution and
delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant
and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant
Shares.

          (c) The Holder shall pay the Exercise Price (i) in cash or by certified bank check payable to
the order of the Company or (ii) if at any time on or after the Original Issue Date (x) there is no
effective Registration Statement registering the resale of the Warrant Shares by the Holder and (y)
the Market Price exceeds the Exercise Price, by means of a “cashless exercise”, by presenting and
surrendering to the Company this Warrant, in which event the Company shall issue to the Holder the
number of Warrant Shares determined as follows:

	 	 
	 	X = Y {(A-B)/A}

	 	 
	 	where:

	 	 
	 	X = the number of Warrant Shares to be issued to the Holder.

	 	 
	 	Y = the number of Warrant Shares with respect to which this Warrant is being
exercised.

	 	 
	 	A = the Market Price on the Exercise Date.

	 	 
	 	B = the Exercise Price

          (d) If an exercise of this Warrant is to be made in connection with a registered public
offering or sale of the Company, such exercise may, at the election of the Holder, be conditioned
on the consummation of the public offering or sale of the Company, in which case such exercise
shall not be deemed effective until the consummation of such transaction.

     5. Delivery of Warrant Shares.

          (a) Upon exercise of this Warrant, the Company shall promptly issue or cause to be issued and
deliver or cause to be delivered to the Holder, in such name or names as the Holder may designate,
a certificate for the Warrant Shares issuable upon such exercise bearing the following restrictive
legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY STATE SECURITIES COMMISSION AND MAY NOT BE
TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A REGISTRATION STATEMENT WHICH IS
EFFECTIVE UNDER THE SECURITIES ACT AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY
PRIOR

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TO THE TIME SET FOR TRANSFER, THE HOLDER PROVIDES A REASONABLY ACCEPTABLE OPINION TO THE COMPANY
THAT SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF THE SECURITIES ACT AND OTHER APPLICABLE
STATE LAWS AND RULES.”

          (b) The Holder, or any Person so designated by the Holder to receive the Warrant Shares, shall
be deemed to have become holder of record of such Warrant Shares as of the Exercise Date.

          (c) This Warrant is exercisable, either in its entirety or, from time to time, for a portion
of the number of Warrant Shares. Upon surrender of this Warrant following one or more partial
exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing
the right to purchase the remaining number of Warrant Shares.

     6. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue
or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect
of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any certificates for Warrant Shares or
Warrant in a name other than that of the Holder. The Holder shall be responsible for all other tax
liability that may arise as a result of holding or transferring this Warrant or receiving Warrant
Shares upon exercise hereof.

     7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon
cancellation hereof, or in lieu of and in substitution for this Warrant, a New Warrant, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction
and customary and reasonable indemnity, if requested.

     8. Reservation of Warrant Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon
exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable
and deliverable upon the exercise of this entire Warrant, free from all taxes, liens, claims,
encumbrances with respect to the issuance of such Warrant Shares and will not be subject to any
pre-emptive rights or similar rights (taking into account the adjustments and restrictions of
Section 9 hereof). The Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued, fully paid and nonassessable. The
Company will take all such action as may be necessary to assure that such shares of Common Stock
may be issued as provided herein without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation system upon which the Common Stock
may be listed or quoted, as the case may be.

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     9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon
exercise of this Warrant are subject to adjustment from time to time as set forth in this
Section 9.

          (a) Stock Dividends. If the Company, at any time while this Warrant is outstanding, pays a
dividend on its Common Stock payable in additional shares of Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common Stock, then in each
such case the Exercise Price shall be multiplied by a fraction, (A) the numerator of which shall be
the number of shares of Common Stock outstanding immediately prior to the opening of business on
the day after the record date for the determination of stockholders entitled to receive such
dividend or distribution and (B) the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such event. Any adjustment made pursuant to this Section
9(a) shall become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution.

          (b) Stock Splits. If the Company, at any time while this Warrant is outstanding, (i)
subdivides outstanding shares of Common Stock into a larger number of shares, or (ii) combines
outstanding shares of Common Stock into a smaller number of shares, then in each such case the
Exercise Price shall be multiplied by a fraction, (A) the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such event and (B) the denominator of which
shall be the number of shares of Common Stock outstanding immediately after such event. Any
adjustment pursuant to this Section 9(b) shall become effective immediately after the
effective date of such subdivision or combination.

          (c) Reclassifications. A reclassification of the Common Stock (other than any such
reclassification in connection with a merger or consolidation to which Section 9(f)
applies) into shares of any other class of stock shall be deemed:

                    (i) a distribution by the Company to the holders of its Common Stock of such shares of such
other class of stock for the purposes and within the meaning of this Section 9; and

                    (ii) if the outstanding shares of Common Stock shall be changed into a larger or smaller
number of shares of Common Stock as part of such reclassification, such change shall be deemed a
subdivision or combination, as the case may be, of the outstanding shares of Common Stock for the
purposes and within the meaning of Section 9(b).

          (d) Self-Tender Offers. In the event, at any time or from time to time after the Original
Issue Date while the Warrants remain outstanding and unexpired, in whole or in part, a Company
Offer shall be made and expire, then and in each such event the Exercise Price in effect
immediately prior to close of business on the date of the last time (the “Expiration Time”) tenders
could have been made pursuant to such Company Offer shall be decreased by multiplying such Exercise
Price by a fraction (not to be greater than 1):

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                    (i) the numerator of which shall be equal to (A) the product of (1) the Market Price per share
of the Common Stock on the date of the Expiration Time and (2) the number of shares of Common Stock
outstanding (including any tendered shares) at the Expiration Time less (B) the fair market value
(as determined in good faith by the Board of Directors of the Company) of the aggregate
consideration payable to stockholders based on the acceptance (up to any maximum specified in the
terms of the Company Offer) of all shares validly tendered and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any maximum amount provided for in connection with such
Company Offer, being referred to as the “Purchased Shares”); and

                    (ii) the denominator of which shall be equal to the product of (A) the Market Price per share
of the Common Stock on the date of the Expiration Time and (B) the number of shares of Common Stock
outstanding (including any tendered shares) on the Expiration Time less the number of Purchased
Shares.

          Any adjustment under this Section 9(d) shall become effective immediately prior to the
opening of business on the day after the Expiration Time.

          (e) Other Distributions. If the Company, at any time while this Warrant is outstanding,
distributes to holders of Common Stock (i) evidences of its indebtedness, (ii) any security (other
than a distribution of Common Stock covered by Section 9(a)), (iii) rights or warrants to
subscribe for or purchase any security or (iv) any other asset (in each case, “Distributed
Property”), then in each such case the Exercise Price in effect immediately prior to the record
date fixed for determination of stockholders entitled to receive such distribution (and the
Exercise Price thereafter applicable) shall be adjusted (effective on and after such record date)
to equal the product of such Exercise Price multiplied by a fraction, (A) the numerator of which
shall be Market Price on such record date less the then fair market value per share of the
Distributed Property distributed in respect of one outstanding share of Common Stock, which, if the
Distributed Property is other than cash or marketable securities, shall be as determined in good
faith by the Board of Directors of the Company, and (B) the denominator of which shall be the
Market Price on such record date.

          (f) Fundamental Transactions. If, at any time while this Warrant is outstanding, (i) the
Company effects any merger or consolidation of the Company with or into another Person, (ii) the
Company effects any sale of all or substantially all of its assets in one or a series of related
transactions or (iii) there shall occur any merger of another Person into the Company whereby the
Common Stock is cancelled, converted or reclassified into or exchanged for other securities, cash
or property (in any such case, a “Fundamental Transaction”), then, as a condition to the
consummation of such Fundamental Transaction, the Company shall (or, in the case of any Fundamental
Transaction in which the Company is not the surviving entity, the Company shall take all reasonable
steps to cause such other Person to) execute and deliver to each Holder of Warrants a written
instrument providing that:

                    (x) so long as any Warrant remains outstanding on such terms and subject to such conditions as
shall be nearly equivalent as may be practicable to the provisions set forth

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in this Warrant, each Warrant, upon the exercise thereof at any time on or after the
consummation of such Fundamental Transaction, shall be exercisable into, in lieu of Common Stock
issuable upon such exercise prior to such consummation, the securities or other property (the
“Substituted Property”) that would have been received in connection with such Fundamental
Transaction by a holder of the number of shares of Common Stock into which such Warrant was
exercisable immediately prior to such Fundamental Transaction, assuming such holder of Common
Stock:

                                        (A) is not a Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as the case may be (a
“Constituent Person”), or an Affiliate of a Constituent Person; and

                                        (B) failed to exercise such Holder’s rights of election, if any, as to the kind or amount of
securities, cash and other property receivable in connection with such Fundamental Transaction
(provided, however, that if the kind or amount of securities, cash or other property receivable in
connection with such Fundamental Transaction is not the same for each share of Common Stock held
immediately prior to such Fundamental Transaction by a Person other than a Constituent Person or an
Affiliate thereof and in respect of which such rights of election shall not have been exercised (a
“Non-Electing Share”), then, for the purposes of this Section 9(f), the kind and amount of
securities, cash and other property receivable in connection with such Fundamental Transaction by
each Non-Electing Share shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares); and

                              (y) the rights and obligations of the Company (or, in the event of a transaction in which the
Company is not the surviving Person, such other Person) and the Holders in respect of Substituted
Property shall be as nearly equivalent as may be practicable to the rights and obligations of the
Company and Holders in respect of Common Stock hereunder.

                    Such written instrument shall provide for adjustments which, for events subsequent to the
effective date of such written instrument, shall be as nearly equivalent as may be practicable to
the adjustments provided for in Section 9. The above provisions of this Section
9(f) shall similarly apply to successive Fundamental Transactions.

                    (g) Adjustment of Warrant Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to paragraphs (a) through (e) of this Section 9, the number of Warrant Shares that
may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so
that after such adjustment the aggregate Exercise Price payable hereunder for the increased or
decreased number of Warrant Shares shall be the same as the aggregate Exercise Price payable for
the Warrant Shares immediately prior to such adjustment.

                    (h) Calculations. All calculations under this Section 9 shall be made to the nearest
cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for the account of the
Company, and the disposition of any such shares shall be considered
an issue or sale of Common Stock.

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                    (i) Adjustments. Notwithstanding any provision of this Section 9, no adjustment of
the Exercise Price shall be required if such adjustment is less than $0.01; provided, however, that
any adjustments which by reason of this Section 9(i) are not required to be made shall be
carried forward and taken into account for purposes of any subsequent adjustment.

                    (j) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company will promptly deliver to the Holder a certificate executed by the
Company’s Chief Financial Officer setting forth, in reasonable detail, the event requiring such
adjustment and the method by which such adjustment was calculated, the adjusted Exercise Price and
the adjusted number or type of Warrant Shares or other securities issuable upon exercise of this
Warrant (as applicable). The Company will retain at its office copies of all such certificates and
cause the same to be available for inspection at said office during normal business hours by the
Holder or any prospective purchaser of the Warrant designated by the Holder.

                    (k) Notice of Corporate Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common Stock, including,
without limitation, any granting of rights or warrants to subscribe for or purchase any capital
stock of the Company or any subsidiary of the Company, (ii) authorizes, approves, enters into any
agreement contemplating, or solicits stockholder approval for, any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then
the Company shall deliver to the Holder a notice describing the material terms and conditions of
such transaction at least 15 calendar days prior to the applicable record or effective date on
which a Person would need to hold Common Stock in order to participate in or vote with respect to
such transaction, and the Company will take all steps reasonably necessary in order to ensure that
the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to
participate in or vote with respect to such transaction; provided, however, that the failure to
deliver such notice or any defect therein shall not affect the validity of the corporate action
required to be described in such notice.

     10. Fractional Shares. The Company shall not be required to issue or cause to be
issued fractional Warrant Shares on the exercise of this Warrant. If any fraction of a Warrant
Share would, except for the provisions of this Section, be issuable upon exercise of this Warrant,
the Company shall make a cash payment to the Holder equal to (a) such fraction multiplied by (b)
the Market Price on the Exercise Date of one full Warrant Share.

     11. Restricted Securities. The Holder represents and warrants that it (i) understands
that the Warrant and the Warrant Shares have not been registered under the Securities Act and (ii)
understands the restrictions set forth on the legend printed on the face of this Warrant.

     12. Listing on Securities Exchanges; Registration Rights. In furtherance and not in
limitation of any other provision of this Warrant, if the Company at any time shall list any Common
Stock on any Eligible Market, the Company will, at its expense, simultaneously list the Warrant
Shares (and maintain such listing) on such Eligible Market, upon official notice of

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issuance following the exercise of this Warrant; and the Company will so list, register and
maintain such listing on any Eligible Market any Other Securities, if and at the time that any
securities of like class or similar type shall be listed on such Eligible Market by the Company.
The Warrant Shares are also subject to and have registration rights under the Registration Rights
Agreement.

     13. Remedies. The Company stipulates that the remedies at law of the Holder of this
Warrant in the event of any default or threatened default by the Company in the performance of or
compliance with any of the terms of this Warrant are not and will not be adequate, and that such
terms may be specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms hereof or otherwise.

     14. Notices. Any and all notices or other communications or deliveries hereunder
(including without limitation any Exercise Notice) shall be in writing and shall be mailed by
certified mail, return receipt requested, or by a nationally recognized courier service or
delivered (in person or by facsimile), against receipt to the party to whom such notice or other
communication is to be given. The address for such notices or communications shall be as set forth
in the Merger Agreement for notices to the Company and as set forth on the Warrant Register for
notices to the Holder. Any notice or other communication given by means permitted by this
Section 14 shall be deemed given at the time of receipt thereof.

     15. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon
30 days’ notice to the Holder, the Company may appoint a new warrant agent. Any Person into which
any new warrant agent may be merged, any Person resulting from any consolidation to which any new
warrant agent shall be a party or any Person to which any new warrant agent transfers substantially
all of its corporate trust or shareholders services business shall be a successor warrant agent
under this Warrant without any further act. Any such successor warrant agent shall promptly cause
notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to
the Holder at the Holder’s last address as shown on the Warrant Register.

     16. Miscellaneous. (a) The terms and conditions of this Warrant will inure to the
benefit of and be binding upon the respective successors and permitted assigns of the parties. The
Company shall not assign this Warrant or any rights or obligations hereunder without the prior
written consent of the Holder, except to a successor in the event of a Fundamental Transaction.
This Warrant may be assigned by the Holder, provided that such transfer is in compliance with the
terms and provisions of this Warrant and permitted by federal and state securities laws. This
Warrant may be amended only in writing signed by the Company and the Holder and their successors
and assigns.

          (b) The Company will not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all

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such terms and in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder against impairment. Without limiting the generality of the
foregoing, the Company (i) will not increase the par value of any Warrant Shares above the amount
payable therefor upon exercise thereof, (ii) will take all such action as may be reasonably
necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares on the exercise of this Warrant, free from all taxes, liens, claims
and encumbrances and (iii) will not close its shareholder books or records in any manner which
interferes with the timely exercise of this Warrant.

          (c) This Warrant shall be governed by and construed and enforced in accordance with the laws
of the State of Delaware without regard to conflicts of laws principles thereof. THE PARTIES
HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY.

          (d) Neither party shall be deemed in default of any provision of this Warrant, to the extent
that performance of its obligations or attempts to cure a breach hereof are delayed or prevented by
any event reasonably beyond the control of such party, including, without limitation, war,
hostilities, acts of terrorism, revolution, riot, civil commotion, national emergency, strike,
lockout, unavailability of supplies, epidemic, fire, flood, earthquake, force of nature, explosion,
embargo, or any other Act of God, or any law, proclamation, regulation, ordinance, or other act or
order of any court, government or governmental agency, provided that such party gives the other
party written notice thereof promptly upon discovery thereof and uses reasonable efforts to cure or
mitigate the delay or failure to perform.

          (e) The headings herein are for convenience only, do not constitute a part of this Warrant and
shall not be deemed to limit or affect any of the provisions hereof.

          (f) In case any one or more of the provisions of this Warrant shall be deemed invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt
in good faith to agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision
in this Warrant.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.

	 	 	 	 	 
	 	 	SERVICEWARE TECHNOLOGIES, INC.
	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	Name:
	

	 	 	 	Title:

 

 

SIGNATURE PAGE TO WARRANT

 

APPENDIX A

FORM OF ASSIGNMENT

(to be completed and signed only upon transfer of Warrant)

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_____________________ the right represented by the within Warrant to purchase
_________ shares of Common Stock of ServiceWare Technologies, Inc. to which the within
warrant relates and appoints __________________ attorney to transfer said right on the
books of ServiceWare Technologies, Inc. with full power of substitution in the premises.

	 	 	 
	Dated:__________________

	 	_________________________________
	

	 	(Signature must conform in all
respects to name of

Holder as specified on face of the Warrant)
	 	 	 
	

	 	Address of Transferee:
	 	 	 
	

	 	___________________________
	 	 	 
	

	 	___________________________
	 	 	 
	

	 	___________________________
	In the presence of:
	 	 
	 	 	 
	_____________________
	 	 

 

 

SIGNATURE PAGE TO WARRANT

 

APPENDIX B

FORM OF EXERCISE NOTICE

(to be executed by the Holder to exercise the right to purchase shares of

Common Stock under the foregoing Warrant)

To: ServiceWare Technologies, Inc.

The undersigned is the Holder
of Warrant No. 2005-_____________ (the “Warrant”) issued by ServiceWare
Technologies, Inc., a Delaware corporation (the “Company”). Capitalized terms used herein and not
otherwise defined have the respective meanings set forth in the Warrant.

	1.  	The Warrant is currently exercisable to purchase a total of
_____________________________ Warrant
Shares.

	2.  	The undersigned Holder hereby exercises its right to purchase
_____________________________ Warrant
Shares pursuant to the Warrant.

3.  The Holder intends that payment of the Exercise Price shall be made as (check one):

                    Cash
Exercise _____________________________

                    Cashless
Exercise _____________________________

	4.  	If the Holder has elected a Cash Exercise, the Holder shall pay the sum of
$_________________ to the Company in accordance with the terms of the Warrant.

	5.  	If the Holder has elected a Cashless Exercise, a certificate shall be issued to the Holder
for the number of shares equal to the whole number portion of the product of the calculation
set forth below, which is ________________. The Company shall pay a cash adjustment in
respect of the fractional portion of the product of the calculation set forth below in an
amount equal to the product of the fractional portion of such product and the Market Price on
the Exercise Day, which product is _______________.

	 	 	 
	

	 	X = Y[(A-B)/A]
	 	 
	

	 	X = the number of Warrant Shares to be issued to the Holder.
	 	 
	

	 	Number of Warrant Shares being exercised: ______________________ (“Y”).
	 	 
	

	 	Market Price on the Exercise Day: ______________________ (“A”).
	 	 
	

	 	Exercise Price:
______________________ (“B”).

	6.  	Pursuant to this exercise, the Company shall deliver to the Holder Warrant Shares in
accordance with the terms of the Warrant.

14

 

	7.  	Following this exercise, the Warrant shall be exercisable to purchase a total of
______________________ Warrant Shares.

	 	 	 
	Dated: ______________________

	 	Name of Holder:
	 	 	 
	

	 	(Print) ________________________ 
	 	 	 
	

	 	By: ___________________________ 
	 	 	 
	

	 	Name: _________________________ 
	 	 	 
	

	 	Title: __________________________ 
	 	 	 
	

	 	(Signature must conform in all respects to name of
Holder as specified on the face of the Warrant)<PAGE>

                                CHANGE IN CONTROL
                                    AGREEMENT

THIS AGREEMENT is made as of the 14th day of March, 2005 by and between
McDermott International, Inc., a corporation duly organized under the laws of
the Republic of Panama (the "Company") and Bruce W. Wilkinson ("Executive".)

In consideration of the mutual covenants and agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby expressly acknowledged, the parties hereto agree as follows:

I.    Obligations of the Company Upon Termination of Executive After Change In
      Control. Following the Effective Date of a Change In Control, in the event
      Executive's employment by the Company is terminated before the one-year
      anniversary of the Effective Date of a Change In Control either (i) by the
      Company for any reason other than Cause, or (ii) by the Executive for Good
      Reason, then subject to the provisions of paragraph (b) below, the Company
      shall:

            (a)   Pay to the Executive within thirty days after the date of
                  termination of Executive's employment (or such earlier time as
                  may be required by law) the Accrued Benefits;

            (b)   In the event that a bonus is paid after the date of
                  Executive's termination of employment under the Company's
                  Executive Incentive Compensation Plan ("EICP") for the year
                  prior to the year in which the termination takes place (the
                  "Measurement Period"), pay to the Executive in a lump sum, at
                  the same time such bonus is paid to other EICP participants, a
                  cash bonus equal to the product of the multiplier used for
                  Chief Executive Officer and Executive's annual base salary for
                  the Measurement Period.

<PAGE>

            (c)   Pay to Executive in a lump sum in cash within thirty days
                  after the date of termination of Executives employment a
                  payment equal to the product of Executive's target bonus under
                  EICP for the year in which the termination takes place and a
                  fraction, the numerator of which is the number of days that
                  have elapsed in the year in which the termination takes place
                  through the date of termination of Executive's employment and
                  the denominator of which is 365.

            (d)   Pay to Executive in a lump sum in cash as soon as
                  administratively practicable after the date of termination of
                  Executive's employment 200% of the sum of (1) Executive's
                  annual base salary as in effect immediately prior to the date
                  of termination of Executive's employment, and (2) Executive's
                  target bonus under EICP for the year in which the termination
                  takes place.

            (e)   In the event that it is determined that any payment or
                  distribution of any type to or for the benefit of the
                  Executive made by the Company, by any of its affiliates, by
                  any person who acquires ownership or effective control or
                  ownership of a substantial portion of the Company's assets
                  (within the meaning of section 280G of the Internal Revenue
                  Code of 1986, as amended, and the regulations thereunder (the
                  "Code")) or by any affiliate of such person, whether paid or
                  payable or distributed or distributable pursuant to the terms
                  of this Agreement or otherwise (the "Total Payments") would be
                  subject to the excise tax imposed by Section 4999 of the Code
                  (the "Excise Tax"), then the Executive shall be entitled to
                  receive an additional payment (an "Excise Tax Restoration
                  Payment") in an amount that shall fund the payment by the
                  Executive of any Excise Tax on the Total Payments as well as
                  all income taxes imposed on the Excise Tax Restoration
                  Payment, and any Excise Tax imposed on the Excise Tax
                  Restoration Payment.

                                       2
<PAGE>

II.   Participation In Other Company Programs.

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

III.  Confidential and Proprietary Information.

      Executive acknowledges and agrees that any and all non-public information
      regarding the Company, any of its Subsidiaries and its or their customers
      (including but not limited to any and all information relating to its or
      their business practices, products, services, finances, management,
      strategy, profits and overhead) is confidential and the unauthorized
      disclosure of such confidential information will result in irreparable
      harm to the Company. Executive shall not, during his employment by the
      Company or any of its Subsidiaries and for a period of five years after
      termination of such employment (or such shorter period as may be required
      by law), disclose or permit the

                                       3
<PAGE>

      disclosure of any such confidential information to any person other than
      an employee of the Company or its Subsidiaries or an individual engaged by
      the Company or its Subsidiaries to render professional services to the
      Company or its Subsidiaries under circumstances that require such person
      to maintain the confidentiality of such information, except as such
      disclosure may be required by law. The provisions of this Section III
      shall survive any termination of this Agreement. For purposes of this
      Section III, the term "confidential information" shall not include
      information that was or becomes generally available to the public other
      than as a result of disclosure by Executive. Executive acknowledges that
      the execution of this Agreement and the payments described in Section I
      herein constitute consideration for the limitations on activities set
      forth in this Section III, the adequacy of which is hereby expressly
      acknowledged by Executive. Executive understands and agrees that the
      Company shall suffer irreparable harm if Executive breaches Section III
      hereof, and that monetary damages shall be inadequate to address any such
      breach. Accordingly, Executive agrees that the Company shall have the
      right, to the extent permitted by applicable law, and in addition to any
      other rights or remedies it may have, to obtain from any court of
      competent jurisdiction, injunctive relief to restrain any breach or
      threatened breach hereof or otherwise to specifically enforce the
      provisions hereof.

IV.   Notices.

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

                                       4
<PAGE>

                  If to Executive:  Bruce W. Wilkinson
                                    3771 Robinhood
                                    Houston, TX  77005

                        Email:      bwwilkinson@mcdermott.com

                        Facsimile:  281-870-5015

                  If to the Company:

                        McDermott International, Inc.
                        c/o         Louis J. Sannino
                                    Executive Vice President, Human Resources
                                    757 N. Eldridge Parkway
                                    Houston, TX  77079

                        Email:      ljsannino@mcdermott.com

                        Facsimile:  281-870-5095

      or to such other address as any party may have furnished to the other in
      writing in accordance with this Agreement.

V.    Governing Law.

      The provisions of this Agreement shall be interpreted and construed in
      accordance with, and enforcement may be made under, the law of the State
      of Texas without reference to principles of conflict of laws.

VI.   Successors and Assigns.

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

                                       5
<PAGE>

      (b)   This Agreement shall be binding upon and shall inure to the benefit
            of the Company and its successors and assigns.

      (c)   The Company will require that any successor to all or substantially
            all of its business and/or assets (whether such successor acquires
            such business and/or assets directly or indirectly, and whether by
            purchase, merger, consolidation or otherwise) expressly assume and
            agree to perform this Agreement in the same manner and to the same
            extent that the Company would be required to perform it if no such
            succession had taken place. As used in this Agreement, "Company"
            shall mean the Company as herein defined and any successor to its
            business and/or assets.

VII.  Employment by Subsidiaries.

      If Executive is not employed by McDermott International, Inc., but is only
      employed by one or more Subsidiaries of McDermott International, Inc.,
      then (a) the "Company" as defined herein shall be deemed to include such
      Subsidiary or Subsidiaries, and (b) termination of employment shall be
      determined with reference to Executive's employment by all such
      Subsidiaries. Further, the Company agrees that it will perform its
      obligations hereunder without regard to whether Executive is employed by
      the Company or by a Subsidiary or Subsidiaries of the Company.

VIII. Severability.

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

                                       6
<PAGE>

IX.   Entire Agreement; Amendment.

      This Agreement sets forth the entire Agreement of the parties hereto and
      supersedes all prior agreements, understandings and covenants between the
      parties with respect to the subject matter hereof. Except as provided in
      Section X, paragraphs (d) and (f) or Section XI, this Agreement may be
      amended or terminated only by mutual agreement of the parties in writing.

X.    Miscellaneous.

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

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

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

      (d)   Executive and the Company acknowledge that, except as may otherwise
            be provided under any other written agreement between Executive and
            the Company, the employment of Executive by the Company is "at will"
            and, subject to the last sentence of paragraph (f) of Section XII
            hereof, Executive's employment may be terminated by either Executive
            or the Company at any time prior to the Effective Date of a Change
            In Control, in which case this

                                       7
<PAGE>

            Agreement shall terminate as provided in Section XI below and
            Executive shall have no further rights under this Agreement.

      (e)   For purposes of this Agreement, the date of termination of
            Executive's employment shall be: (i) if Executive's employment is
            terminated by the Company for Cause, the date on which the Company
            delivers to Executive the resolution referred to in the last
            sentence of Section XII, paragraph (c), or, with respect to a
            termination under Section XII, paragraph (c)(iii), the date on which
            the Company notifies Executive of such termination, (ii) if
            Executive's employment is terminated by the Company because of
            Executive's Disability or for a reason other than Cause or
            Executive's death or Disability, the date on which the Company
            notifies Executive of such termination, (iii) if executive's
            employment is terminated by Executive for Good Reason, the date on
            which Executive notifies the Company of such termination (after
            having given the Company notice and a thirty-day cure period), or
            (iv) if Executive's employment is terminated by reason of death, the
            date of death of executive.

      (f)   The Company may terminate this Agreement at any time prior to a
            Change In Control upon giving Executive written notice of such
            termination at least thirty days prior to the date of termination if
            either of the following circumstances take place: (i) Executive's
            position with the Company is changed so that he ceases to be an
            officer of the Company, or (ii) Executive ceases to be a fulltime
            employee; provided that if a Change In Control is announced or
            occurs during such thirty-day period, the termination shall not be
            effective.

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

      (h)   In the event the Executive's employment is terminated following the
            Effective Date of a Change In Control and before the one-year
            anniversary of the

                                       8
<PAGE>

            Effective Date of a Change In Control (i) by the Company for Cause
            or an a result of Executive's death or disability, or (ii) by
            Executive without Good Reason, Executive shall not be entitled to
            the payments described in Section 1 hereof.

XI.   Term.

      This Agreement shall terminate on the earliest to occur of (i) termination
      by the Company in accordance with Section X, paragraph (f) above, (ii) the
      date one year after the Effective Date of a Change or Control, or (iii)
      the date on which Executive's employment with the Company is terminated
      (subject to the last sentence of Section XII, paragraph (g)); provided,
      however, that if Executive's employment with the Company is terminated
      under any of the circumstances described in Section I hereof, Executive's
      rights hereunder shall continue following the termination of his/her
      employment with the Company until all benefits to which Executive is
      entitled hereunder has been paid and the Company's rights hereunder shall
      continue until all obligations owed to it hereunder have been satisfied.

XII.  Definitions.

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

      (a)   "Accrued Benefits" shall mean:

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

            (ii)  Reimbursement for any and all amounts advanced in connection
                  with Executive's employment for reasonable and necessary
                  expenses incurred by Executive through the date of termination
                  of Executive's

                                       9
<PAGE>

                  employment in accordance with the Company's policies and
                  procedures on reimbursement of expenses;

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

            (iv)  All other payments and benefits to which Executive may be
                  entitled under the terms of any applicable compensation
                  arrangement or benefit plan or program of the Company that do
                  not specify the time of distribution; provided that Accrued
                  Benefits shall not include any entitlement to severance under
                  any severance policy of the Company generally applicable to
                  the salaried employees of the Company.

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

      (c)   "Cause" shall mean:

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

                                       10
<PAGE>

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

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

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

      (d)   "Change In Control" shall be deemed to occur if:

            (i)   When any "person" or "group" of persons (as such terms are
                  used in Section 13 and 14 of the Securities Exchange Act of
                  1934, as amended from time to time (the "Exchange Act")),
                  other than the Company or any employee benefit plan sponsored
                  by the Company, becomes the "beneficial owner" (as such term
                  is used in Section 13 of the Exchange Act) of 25 percent or
                  more of the total number of the Company's common shares at the
                  time outstanding; or

                                       11
<PAGE>

            (ii)  of the approval by the vote of the Company's stockholders
                  holding at least 50 percent (or such greater percentage as may
                  be required by the Certificate of Incorporation or Bylaws of
                  the Company or by law) of the voting stock of the Company of
                  any merger, consolidation, sales of assets, liquidation or
                  reorganization in which the Company will not survive as a
                  publicly owned corporation or;

            (iii) when the individuals who, at the beginning of any period of
                  two years or less, constituted the Board of Directors of the
                  Company cease, for any reason, to constitute at least a
                  majority thereof, unless the election or nomination for
                  election of each new director was approved by the vote of at
                  least a majority of the directors then still in office who
                  were directors at the beginning of such period.

            A Change In Control shall not result from any transaction
            precipitated by the Company's insolvency, appointment of a
            conservator or determination by a regulatory agency that the Company
            is insolvent.

      (e)   "Disability" shall mean circumstances that qualify Executive for
            long-term disability benefits under the Company's Long-Term
            Disability Plan as in effect immediately prior to the Change In
            Control.

      (f)   "Effective Date" with respect to a Change In Control for purposes of
            this Agreement shall be the earliest to occur of (i) the date on
            which the Company receives a copy of a Schedule 13D disclosing
            beneficial ownership of shares in accordance with Section XII,
            paragraph (d)(i) above; (ii) the effective date of the consummation
            of a merger, consolidation, share exchange or similar form of
            corporate transaction or liquidation or reorganization in accordance
            with Section XII, paragraph (d)(ii); or (iii) the date of the annual
            or special meeting of shareholders at which the last director
            necessary to meet the requirements of Section XII, paragraph
            (d)(iii) is elected. Upon the occurrence of the Effective

                                       12
<PAGE>

            Date of a Change In Control, the Board of Directors or its designee
            shall, within thirty days thereof, provide written notice to
            Executive of the Effective Date of the Change In Control.
            Notwithstanding anything to the contrary in this Agreement, if a
            Change In Control occurs and if Executive's employment with the
            Company is terminated within the ninety days prior to the Effective
            Date of the Change In Control as determined in accordance with the
            first sentence of this paragraph (f), and if it is reasonably
            demonstrated by Executive that such termination of employment was at
            the request of a third party who has taken steps reasonably
            calculated to effect a Change In Control, or otherwise arose in
            connection with or in anticipation of a Change In Control, then for
            all purposes of this Agreement, the "Effective Date" of the Change
            In Control shall mean the date immediately prior to the date of such
            termination of employment.

      (g)   "Good Reason" shall mean:

            (i)   the assignment to Executive of duties that are materially
                  inconsistent with Executive's position, authority, duties or
                  responsibilities immediately prior to the Change In Control,
                  or any other action by the Company which results in a material
                  diminution in such position, authority, duties or
                  responsibilities;

            (ii)  requiring Executive, without his consent, to be based at any
                  office or location other than the office or location a which
                  Executive was employed immediately prior to the Change In
                  Control; provided, however, that any such relocation requests
                  shall not be grounds for resignation with Good Reason if such
                  relocation is within a twenty-mile radius of the location at
                  which Executive was based prior to the Effective Date of a
                  Change In Control;

                                       13
<PAGE>

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

            (iv)  a change in Executive's eligibility to participate in
                  incentive compensation plans as in effect immediately prior to
                  the Change In Control; or

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

            Upon the occurrence of any of the events described above, Executive
            shall give the Company written notice that such event constitutes
            Good Reason and the Company shall thereafter have thirty days in
            which to cure. If the Company has not cured in that time, the event
            shall constitute Good Reason.

      (h)   "Subsidiaries" shall mean every, limited liability company,
            partnership or other entity of which 50% or more of the total
            combined voting power of all classes of voting securities or other
            equity interests is owned, directly or indirectly, by McDermott
            International, Inc.

                                       14
<PAGE>

XIII. Arbitration

      Any controversy or claim arising out of or relating to this Agreement (or
      the breach thereof) shall be settled by final and binding arbitration in
      Houston, Texas by one arbitrator selected in accordance with the
      Commercial Arbitration Rules (the "Rules") of the American Arbitration
      Association (the "Association") then in effect. Subject to the following
      provisions, the arbitration shall be conducted in accordance with the
      Rules then in effect. Any award entered by the arbitrator shall be final
      and binding, and judgment may be entered thereon by any party hereto in
      any court of law having competent jurisdiction. This arbitration provision
      shall be specifically enforceable. The Company and the Executive shall
      each pay half of the administrative fees of the Association and the
      compensation of the arbitrator and shall each be responsible for its or
      his/her own attorney's fees and expenses relating to the conduct of the
      arbitration.

IN WITHNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

                                         McDERMOTT INTERNATIONAL, INC.

                                 By:      ___________________________________

                                 Printed Name:   Robert L. Howard

                                 Title:   Chairman of the Compensation Committee

                                 Date:    __________________________________

                                 Executive: ________________________________

                                 Date:         ________________________________

                                       15

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