Mcdermott INTERNATIONAL, INC. (Exact Name of Registrant As Specified in Its Charter)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-K

(Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-08430

McDERMOTT INTERNATIONAL, INC. (Exact name of registrant as specified in its charter)

REPUBLIC OF PANAMA 72-0593134 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.)

757 N. Eldridge Parkway HOUSTON, TEXAS 77079 (Address of Principal Executive Offices) (Zip Code) Registrant’s Telephone Number, Including Area Code: (281) 870-5000 Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each Exchange on which registered Common Stock, $1.00 par value MDRIQ (1) OTC Pink Marketplace (1) Securities registered pursuant to Section 12(g) of the Act: None

(1) On February 6, 2020, the New York Stock Exchange filed a Form 25 with the Securities and Exchange Commission to delist the common stock, $1.00 par value (the “Common Stock”), of McDermott International, Inc. (the “Registrant”) from the New York Stock Exchange. The delisting was effective 10 days after the Form 25 was filed. The deregistration of the Common Stock under Section 12(b) of the Act will become effective 90 days after the filing date of the Form 25, at which point the Common Stock will be deemed registered under Section 12(g) of the Act. The Registrant’s Common Stock began trading on the OTC Pink Marketplace on January 22, 2020 under the symbol “MDRIQ.” ______Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☑ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑ The aggregate market value of the registrant’s common stock held by nonaffiliates of the registrant on the last business day of the registrant’s most recently completed second fiscal quarter (based on the closing sales price on the New York Stock Exchange on June 28, 2019) was approximately $1.8 billion. The number of shares of the registrant’s common stock outstanding at February 26, 2020 was 193,081,224. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 in connection with the registrant’s 2020 Annual Meeting of Stockholders, or an amendment to Form 10-K to be filed not later than 120 days from the end of the registrant’s most recent fiscal year, are incorporated by reference into Part III of this report.

TABLE OF CONTENTS

McDERMOTT INTERNATIONAL, INC. INDEX—FORM 10-K

PAGE PART I Item 1. Business 1 Item 1A. Risk Factors 16 Item 1B. Unresolved Staff Comments 38 Item 2. Properties 39 Item 3. Legal Proceedings 41 Item 4. Mine Safety Disclosures 41 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 42 Item 6. Selected Financial Data 44 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 46 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 84 Item 8. Financial Statements and Supplementary Data 85 Reports of Independent Registered Public Accounting Firms 88 Consolidated Statements of Operations 89 Consolidated Statements of Comprehensive Income (Loss) 90 Consolidated Balance Sheets 91 Consolidated Statements of Cash Flows 92 Consolidated Statements of Equity 93 Notes to Consolidated Financial Statements 94 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 160 Item 9A. Controls and Procedures 160 Item 9B. Other Information 161 PART III Item 10. Directors, Executive Officers and Corporate Governance 163 Item 11. Executive Compensation 163 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 163 Item 13. Certain Relationships and Related Transactions, and Director Independence 163 Item 14. Principal Accountant Fees and Services 163 PART IV Item 15. Exhibits and Financial Statement Schedules 164 Item 16. Form 10-K Summary 170 Signatures 171

ITEM 1. BUSINESS

Statements we make in this Annual Report on Form 10-K which express a belief, expectation or intention, as well as those that are not historical fact, are forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks, uncertainties and assumptions, including those to which we refer under the headings “Cautionary Statement Concerning Forward-Looking Statements” and “Risk Factors” in Items 1 and 1A of Part I of this Annual Report on Form 10-K.

PART I

Item 1. BUSINESS

The Company

McDermott International, Inc. (“McDermott”), a corporation incorporated under the laws of the Republic of Panama in 1959, is a fully integrated provider of engineering, procurement, construction and installation (“EPCI”) and technology solutions to the energy industry. We design and build end-to-end infrastructure and technology solutions to transport and transform oil and gas into a variety of products. Our proprietary technologies, integrated expertise and comprehensive solutions are utilized for offshore, subsea, power, liquefied natural gas (“LNG”) and downstream energy projects around the world. Our customers include national, major integrated and other oil and gas companies as well as producers of petrochemicals and electric power, and we operate in most major energy producing regions throughout the world.

In this report, unless the context otherwise indicates, “McDermott,” “we,” “our” or “us” mean McDermott and its consolidated subsidiaries, and references to any of the Notes to the accompanying Consolidated Financial Statements refer to the Notes to the Consolidated Financial Statements included in Item 8 of Part II.

On May 10, 2018 (the “Combination Date”), we completed our combination with Chicago Bridge & Iron Company N.V. (“CB&I”) through a series of transactions (the “Combination”) (see Note 3, Business Combination, to the accompanying Consolidated Financial Statements for further discussion). Since we completed the Combination, we have incurred losses on several projects (the “Focus Projects”) that were undertaken by CB&I and its subsidiaries, in amounts that have substantially exceeded the amounts estimated by CB&I prior to the Combination and by us subsequent to the Combination. Two of those projects, the Cameron LNG export facility project in Hackberry, Louisiana and the Freeport LNG export facility project in Freeport, Texas, remain ongoing. These projects have used substantial amounts of cash in each of the periods following completion of the Combination. The usage of cash on these projects, coupled with the substantial amounts of letters of credit and procurement funding needed to secure and commence work on new contracts reflected in our near-record level of backlog, which was $18.6 billion as of December 31, 2019, has strained our liquidity and capital resources. As a result of these and other factors, we determined in September 2019 that there was a significant level of uncertainty as to whether we would be in compliance with several financial covenants in the second half of 2019, such as the leverage ratio and fixed charge coverage ratio covenants under the Credit Agreement and the Letter of Credit Agreement (each as defined and described in Note 13, Debt). In the absence of appropriate amendments or waivers, our failure to remain in compliance with these financial covenants would have triggered an event of default under the Credit Agreement and the Letter of Credit Agreement and a potential cross default under the Senior Notes Indenture (as defined and described in Note 13, Debt).

As a result of the uncertainty described above and our ongoing liquidity requirements, as of December 31, 2019, we had taken the actions described below. • We retained legal and financial advisors to help us evaluate strategic and capital structure alternatives. • We appointed a Chief Transformation Officer to report to McDermott’s CEO and the Board of Directors of McDermott. • We announced the commencement of a process to explore strategic alternatives for our Technology segment. • On October 21, 2019, we entered into a superpriority senior secured credit facility (the “Superpriority Credit Agreement”) which provided for borrowings and letters of credit in an aggregate principal amount of $1.7 billion, consisting of (1) a $1.3 billion term loan facility (the “New Term Facility”) and (2) a $400 million letter of credit facility (the “New LC Facility”). Upon the closing of the Superpriority Credit Agreement, we were provided access to $650 million of capital (“Tranche A”), comprised of $550 million under the New Term Facility, before reduction for related fees and expenses, and $100 million under the New LC Facility.

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• On October 21, 2019, we entered into the Credit Agreement Amendment and the LC Agreement Amendment (each as defined and described in Note 13, Debt), which, among other things, amended our leverage ratio, fixed charge coverage ratio and minimum liquidity covenant under the Credit Agreement (each as defined and described in Note 13, Debt) for each fiscal quarter through December 31, 2021 and also modified certain affirmative covenants, negative covenants and events of default to, among other things, make changes to allow for the incurrence of indebtedness and pledge of assets under the Superpriority Credit Agreement. • We entered into consent and waiver agreements with holders of our 12% Redeemable Preferred Stock on October 21, 2019 and December 1, 2019, respectively, to: (1) permit us to enter into the Superpriority Credit Agreement, the Credit Agreement Amendment and the LC Agreement Amendment; and (2) allow for the incurrence of additional indebtedness under the Superpriority Credit Agreement. • Our applicable subsidiaries elected not to make the payment, when due, of approximately $69 million in interest due on their 10.625% senior notes due 2024 (the “Senior Notes”) on November 1, 2019. As a result of the non-payment, a 30-day grace period following non-payment of the interest commenced. • On December 1, 2019, we entered into Credit Agreement Amendment No. 2 and the LC Agreement Amendment No. 2 (each as defined and described in Note 13, Debt), which amended, among other things, the events of default under the Credit Agreement to provide that, for so long as the Forbearance Agreement (as defined below) was in effect and the Senior Notes (as defined below) were not accelerated, the failure to make the payment of $69 million of interest (the “Interest Payment”) on the Senior Notes would not constitute an event of default. • On December 1, 2019, we entered into a forbearance agreement with holders of over 35% of the Senior Notes (the “Forbearance Agreement”). Under the terms of the Forbearance Agreement, holders of over 35% of the Senior Notes agreed to forbear from exercising any rights related to the interest payment due on November 1, 2019, subject to certain conditions. The forbearance period extended through January 15, 2020 and was subject to further extension by a majority of the holders who were party to the Forbearance Agreement. • On December 1, 2019, we entered into Amendment No. 1 to the Superpriority Credit Agreement (the “Superpriority Amendment”), which amended the Superpriority Credit Agreement to, among other things: (1) waive certain conditions precedent to the Tranche B funding to facilitate such funding; (2) provide for the acknowledgement and consent by the lenders under the Superpriority Credit Agreement of our compliance with required business plan milestones; and (3) modify the cross-default provisions contained in the Superpriority Credit Agreement related to the failure to pay interest on the Senior Notes. • On December 4, 2019, we were provided access to $350 million of capital (“Tranche B”) under the Superpriority Credit Agreement, comprised of $250 million under the New Term Facility, before reduction for related fees and expenses, and $100 million under the New LC Facility. Prior to the funding of Tranche B, we issued approximately 11 million shares of our common stock, 0.09 million of Series B Warrants (that entitle each holder to purchase one share of our common stock at a purchase price of $0.01 per share) and 0.56 million shares of a newly designated series of preferred stock, Series A Preferred Stock, to certain of the lenders under the terms of the Superpriority Credit Agreement, in accordance with the terms of the Superpriority Credit Agreement.

Ultimately, subsequent to December 31, 2019, we concluded, even after taking the actions described above, we would not have sufficient liquidity to satisfy our debt service obligations and meet other financial obligations as they came due. We concluded that a reduction in our long-term debt and cash interest obligations was required to improve our financial position and flexibility.

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Recent Developments

Restructuring Support Agreement and Chapter 11 Proceedings

On January 21, 2020 (the “Petition Date”), McDermott and certain of its subsidiaries (collectively, the “Debtors”): (1) entered into a Restructuring Support Agreement (together with all exhibits and schedules thereto, the “RSA”) with certain of their lenders, letter of credit issuers and holders of the Senior Notes issued by certain of the Debtors and guaranteed by McDermott and certain of the other Debtors (such lenders, letter of credit issuers and holders of the Senior Notes are referred to below as the “Consenting Parties”); and (2) filed voluntary petitions (the “Bankruptcy Petitions”) for reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) to pursue a Joint Prepackaged Chapter 11 Plan of Reorganization of the Debtors (as proposed pursuant to the RSA, the “Plan of Reorganization”). At the time of filing the Chapter 11 cases (the “Chapter 11 Cases”), the Debtors had the support of more than two-thirds of all of their funded debt creditors for the RSA. The Chapter 11 Cases are being jointly administered under the caption In re McDermott International, Inc., Case No. 20-30336. The Debtors continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

In connection with the RSA and the Chapter 11 Cases, certain Consenting Parties or their affiliates have provided the Debtors with superpriority debtor-in-possession financing pursuant to a new credit agreement (the “DIP Credit Agreement”). The DIP Credit Agreement provides for, among other things, term loans and letters of credit in an aggregate principal amount of up to $2.81 billion, including (1) up to $2,067 million under a term loan facility consisting of (a) a $550 million tranche that was made available at closing, (b) a $650 million tranche that was made available upon entry of the Final DIP Order (as defined in the RSA), (c) a $823 million tranche consisting of the principal amount of term loans outstanding under Tranche A and Tranche B of the New Term Loan Facility under our Superpriority Credit Agreement and accrued interest and fees related to term loans outstanding under Tranche A and Tranche B of the New Term Loan Facility under our Superpriority Credit Agreement and the New LC Facility under our Superpriority Credit Agreement, in each case that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order and (d) a $44 million tranche consisting of the make-whole amount owed to the lenders under our Superpriority Credit Agreement that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order (the “DIP Term Facility”) and (2) up to $743 million under a letter of credit facility consisting of (a) $300 million made available at closing, (b) $243 million that was made available upon entry of the Final DIP Order and (c) $200 million amount of term loans outstanding under Tranche A and Tranche B of the New LC Facility under our Superpriority Credit Agreement that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order (the “DIP LC Facility” and, together with the DIP Term Facility, the “DIP Facilities”). The Final DIP Order was entered by the Bankruptcy Court on February 24, 2020. We intend to use proceeds of the DIP Facilities to, among other things: (1) pay certain fees, interest, payments and expenses related to the Chapter 11 Cases; (2) pay adequate protection payments; (3) fund our working capital needs and expenditures during the Chapter 11 proceedings; (4) fund the Carve-Out (as defined below), which accounts for certain administrative, court and legal fees payable in connection with the Chapter 11 Cases; and (5) pay fees and expenses related to the transactions contemplated by the DIP Facilities.

In addition to the DIP Facilities, the RSA contemplates that, on the Effective Date, the Debtors will (1) conduct a non-backstopped equity rights offering (the “Rights Offering”) and (2) enter into new exit credit facilities (the “Exit Facilities”), as described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Accordingly, consummation of the Plan of Reorganization will require that the Debtors meet all of the conditions to completion of the Exit Facilities.

• holders of claims arising under the DIP Credit Agreement shall be paid in full, in cash, on the Effective Date, funded from the proceeds of the Lummus Technology sale or, to the extent not paid in full from the proceeds of the Lummus Technology sale: • holders of claims arising under the DIP Term Loans (as defined in the Plan of Reorganization) other than the Make Whole Amount (as defined in the Plan of Reorganization) shall receive cash on hand and proceeds from the Exit Facilities; • holders of claims arising under the DIP Term Loans constituting the Make Whole Amount shall receive their respective pro rata shares of the term loans arising under the Make Whole Tranche (as defined in the Plan of Reorganization); and

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• holders of claims arising under drawn DIP Letters of Credit (as defined in the Plan of Reorganization) that have not been reimbursed in full in cash as of the Effective Date shall receive payment in full in cash. • holders of DIP Cash Secured Letters of Credit (as defined in the Plan of Reorganization) shall receive participation in the Cash Secured Exit Facility (as defined in the RSA) in amounts equal to their respective DIP Cash Secured Letter of Credit Claims (as defined in the Plan of Reorganization; provided that any such cash collateral in the DIP Cash Secured LC Account (as defined in the DIP Credit Facility Term Sheet) shall collateralize the Cash Secured LC Exit Facility); • holders of claims arising under the DIP Letters of Credit (other than the DIP Cash Secured Letters of Credit) shall receive participation in the Super Senior Exit Facility in amounts equal to their respective DIP Letter of Credit Facility commitments; • holders of claims arising under the (1) 2021 LC Facility (as defined in the Plan of Reorganization), (2) the 2023 LC Facility (as defined in the Plan of Reorganization), (3) the Revolving Credit Facility (as defined in the Plan of Reorganization) and (4) the Lloyds’ LC Facility (as defined in the Plan of Reorganization) shall receive participation rights in the Roll-Off LC Exit Facility (as defined in the Plan of Reorganization) or receive their respective pro rata shares of the Secured Creditor Funded Debt Distribution (as defined in the Plan of Reorganization), depending upon the nature of such claims; • holders of claims arising under the Term Loan Facility and Credit Agreement Hedging Claims (as defined in the Plan of Reorganization) other than hedging obligations rolled into the DIP Facilities and the Exit Facilities, will receive pro rata shares of the Secured Creditor Funded Debt Distribution; • holders of claims arising under the Senior Notes will receive their pro rata shares of (a) 6% of the new common equity interests in the reorganized McDermott (the “New Common Stock”), plus additional shares of New Common Stock as a result of the Prepetition Funded Secured Claims Excess Cash Adjustment (as defined in the Plan of Reorganization), subject to dilution on account of the New Warrants and a new Management Incentive Plan (each as defined in the RSA); and (b) the New Warrants; • holders of general unsecured claims shall either (1) have their claims reinstated or (2) be paid in full in cash; • each existing equity interest in any of the Debtors other than McDermott shall be reinstated or cancelled, released and extinguished without any distribution at the Debtors’ election and with the consent of the Required Consenting Lenders (as defined in the Plan of Reorganization); and • each existing equity interest in McDermott will be cancelled, released and extinguished without any distribution.

The deadline to vote on the Plan of Reorganization was February 19, 2020, and the results of that voting continued to reflect the support of more than two-thirds of all the Debtors’ funded debt creditors. The Bankruptcy Court has set March 12, 2020 as the date for the hearing on confirmation of the Plan of Reorganization.

The RSA contains certain covenants on the part of the Debtors and the Consenting Parties, including that the Consenting Parties, among other things, (1) vote in favor of the Plan of Reorganization in the Chapter 11 Cases and (2) otherwise support and take all actions that are necessary and appropriate to facilitate the confirmation of the Plan of Reorganization and consummation of the Debtors’ restructuring in accordance with the RSA. The RSA further provides that the Consenting Parties shall have the right, but not the obligation, to terminate the RSA upon the occurrence of certain events, including the failure of the Debtors to achieve certain milestones.

The RSA also contemplates that, on or prior to the Effective Date, we will complete the Lummus Technology sale. In order to pursue the satisfaction of that requirement, we have entered into a Share and Asset Purchase Agreement (the “SAPA”) with a “stalking horse” bidder. The Lummus Technology sale will be subject to the approval of the Bankruptcy Court. Under the terms of the SAPA, the stalking horse bidder has agreed, absent any higher or otherwise better bid, to acquire the Lummus Technology business from us for a purchase price of $2.725 billion, subject to certain adjustments. If we receive any bids that are higher or otherwise better than the terms reflected in the SAPA, we expect to conduct an auction for the Lummus Technology business on March 9, 2020. If we consummate an alternative sale of the Lummus Technology business to any person other than the stalking horse bidder, we would be required to pay to the stalking horse bidder a break-up fee equal to 3% of the purchase price and reimburse certain expenses associated with the negotiation, drafting and execution of the SAPA. On February 24, 2020, the Bankruptcy Court approved the selection of the stalking horse bidder and the contractual protections provided to that bidder described above, as well as the bidding procedures for the ultimate sale process.

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The foregoing descriptions of the RSA, the Plan of Reorganization, the DIP Facilities and the SAPA are not complete and are qualified in their entirety by reference to the full text of each of those documents, copies of which are filed as exhibits to this report.

Debtor-in-Possession Financing

As described above, in connection with the RSA and the Chapter 11 Cases, certain Consenting Parties or their affiliates provided us with superpriority debtor-in- possession financing pursuant to the DIP Credit Agreement. All loans outstanding under the DIP Term Facility bear interest at an adjusted LIBOR rate plus 9.00% per annum. All undrawn letters of credit under the DIP LC Facility (other than cash secured letters of credit) bear interest at a rate of 9.00% per annum. During the continuance of an event of default, the outstanding amounts under the DIP Facilities would bear interest at an additional 2.00% per annum above the interest rate otherwise applicable.

The lenders under the DIP Facility, Crédit Agricole Corporate and Investment Bank (“CACIB”), as collateral agent and revolving administrative agent under the DIP Facilities, and Barclays Bank PLC (“Barclays”), as term loan administrative agent under the DIP Term Facility, subject to the Carve-Out (as defined below) and the terms of the Interim DIP Order (as defined in the RSA), at all times: (1) are entitled to joint and several super-priority administrative expense claim status in the Chapter 11 Cases; (2) have a first priority lien on substantially all assets of the Debtors; (3) have a junior lien on any assets of the Debtors subject to a valid, perfected and non- avoidable lien as of the Petition Date, other than such liens securing the obligations under the Credit Agreement, the Superpriority Credit Agreement, the Lloyds’ LC Facility and the 2021 LC Facility; and (4) have a first priority pledge of 100% of the stock and other equity interests in each of McDermott’s direct and indirect subsidiaries. The Debtors’ obligations to the DIP Lenders and the liens and superpriority claims are subject in each case to a carve out (the “Carve-Out”) that accounts for certain administrative, court and legal fees payable in connection with the Chapter 11 Cases.

The DIP Facilities are subject to certain affirmative and negative covenants, including, among other covenants we believe to be customary in debtor-in-possession financings, reporting by the Debtors in the form of a budget and rolling 13-week cash flow forecasts, together with a reasonably detailed written explanation of all material variances from the budget.

Debtor-in-Possession Financial Covenants Covenants—The DIP Facilities include the following financial covenants: • as of any Variance Testing Date (as defined in the DIP Facilities), we shall not allow (i) our aggregate cumulative actual total receipts for such variance testing period to be less than the projected amount therefor set forth in the most recently delivered Approved Budget (as defined in the DIP Facilities) by more than 15%, (ii) our aggregate cumulative actual total disbursements (A) for the variance testing period to exceed the projected amount therefor set forth in the most recently delivered Approved Budget by more than 15% and (B) for each week within such variance testing period, to exceed the projected amount therefor set forth in the most recently delivered Approved Budget by more than (x) 20%, with respect to each of the first week and on a cumulative basis for the two- week period ending with the second week of such variance testing and (y) 15% on a cumulative basis with respect to the three-week period ending with the third week and the four week period ending with the fourth week, in each case of such variance testing period, and (iii) our aggregate cumulative actual vendor disbursements and JV infusions with respect to the Specified Projects (as defined in the DIP Facilities) to exceed the projected amount therefore set forth in the most recently delivered Approved Budget by more than 15% for such variance testing period and for each week within such variance testing period by more than (x) 20% with respect to each of the first week and on a cumulative basis for the two-week period ending with the second week of such variance testing and (y) 15% on a cumulative basis with respect to the three-week period ending with the third week and the four week period ending with the fourth week, in each case of such variance testing period • beginning with the fiscal quarter ended June 30, 2020, our adjusted EBITDA (as defined in the DIP Facilities) for the most recently ended four fiscal quarter period for which consolidated financial statements have been delivered pursuant to the DIP Facilities shall not be less than the minimum amount set forth below as set forth opposite such ended fiscal quarter:

Adjusted EBITDA Test Period End Date (In millions) June 30, 2020 230 September 30, 2020 410 December 31, 2020 640

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• beginning with the fiscal quarter ended December 31, 2019, the Project Charges (as defined in the DIP Facilities) for the most recently ended fiscal quarter for which consolidated financial statements have been delivered pursuant to the DIP Facilities shall not be more than the maximum amount set for the below as set forth opposite such ended fiscal quarter:

Maximum Project Charges Test Period End Date (In millions) December 31, 2019 260 March 31, 2019 50 June 30, 2020 50 September 30, 2020 40 December 31, 2020 30

As of December 31, 2019, we were in compliance with our maximum project charges covenant under the DIP Facilities.

The DIP Facilities contain certain events of default we believe to be customary in debtor-in-possession financings, including: (1) conversion of the Chapter 11 Cases to a Chapter 7 case; (2) appointment of a trustee, examiner or receiver in the Chapter 11 Cases; and (3) the final order not being entered by the Bankruptcy Court within 30 days of the interim order relating to the DIP Facilities.

The DIP Facilities will mature on the earliest of (1) nine months after the Petition Date, which date shall be extended automatically by an additional 90 days if certain conditions are satisfied, (2) the Effective Date and (3) the date of acceleration of the obligations under the DIP Facilities following an event of default.

On January 23, 2020, we received $550 million, before reduction for related fees and expenses of $87 million, under the DIP Term Facility, and $300 million of letter of credit capacity under the DIP LC Facility. On February 26, 2020, we received $650 million (related fees and expenses were immaterial), under the DIP Term Facility, and $243 million of letter of credit capacity under the DIP LC Facility.

Going Concern and Financial Reporting in Reorganization

Our commencement of the Chapter 11 Cases and weak industry conditions have negatively impacted our results of operations and cash flows and may continue to do so in the future. These factors raise substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles which contemplate the continuation of the Company as a going concern. See Note 2, Basis of Presentation and Significant Accounting Policies, to the accompanying Consolidated Financial Statements and Item 1A. Risk Factors for additional information regarding our debt instruments and bankruptcy proceedings under Chapter 11.

Delisting of our Common Stock from the New York Stock Exchange

Our common stock was previously listed on the New York Stock Exchange (the “NYSE”) under the symbol “MDR.” As a result of our failure to satisfy the continued listing requirements of the NYSE, on January 22, 2020, our common stock ceased to trade on the NYSE. Since January 23, 2020, our common stock has been quoted on the OTC Pink marketplace maintained by the OTC Markets Group, Inc. (“OTC Pink”) under the symbol “MDRIQ.” On February 6, 2020, the NYSE filed a Form 25 with the SEC to delist our common stock from the NYSE. The delisting was effective 10 days after the Form 25 was filed. The deregistration of the Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), will become effective 90 days after the filing date of the Form 25.

Review of Business Portfolio and Strategic Transactions

We performed a review of our business portfolio, which included businesses acquired in the Combination. Our review sought to determine if any portions of our business were non-core for purposes of our vertically integrated offering model. This review initially identified our pipe fabrication and industrial storage tank businesses as non- core. We completed the sale of Alloy Piping Products LLC (“APP”), a portion of the pipe fabrication business, during the second quarter of 2019. We are continuing to pursue the sale of the remaining portion of the pipe fabrication business. In the third quarter of 2019, we terminated the sales process for our industrial storage tank business, as we concluded that the net cash proceeds from the sale, if completed, would likely be significantly below initial expectations.

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Business Segments

Through our five business segments, we deliver a broad services offering that addresses four key end markets, as follows:

Offshore and subsea—We offer a comprehensive range of technology and EPCI services for the upstream oil & gas sector, including any combination of front-end design, engineering, procurement, fabrication, construction, installation, hook-up, start-up and commissioning services across all phases of the project life cycle. We have a particular focus on installation of offshore oil & gas production systems, including jackets, topsides and floating production, storage and offloading (FPSO) vessels and pipelines, as well as installation of subsea production systems.

LNG—We offer a full range of technology and engineering, procurement, fabrication and construction services for the LNG industry, with a focus on natural gas liquefaction plants and LNG regasification terminals. We provide a full range of services, including conceptual design, detailed engineering, material procurement, pipe and storage tank fabrication, construction, project management, compliance support, commissioning and startup, and operator training.

Downstream—We design, build, and offer technology licenses and services for state-of-the-art petrochemical and refinery process units and plants. Our comprehensive services include market-leading proprietary technologies, process design, front-end engineering and design, detailed engineering, material procurement, pipe and storage tank fabrication, construction, permitting assistance, operator training, commissioning and startup. We offer solutions for clean fuels production, including low sulfur gasoline and diesel, as well as a wide range of refinery process units and related ancillary facilities.

Power—We design and build new combined-cycle and simple-cycle gas-fired power generation projects and provide related engineering, procurement, construction and commissioning services. Additionally, we are a joint venture partner of NET Power, LLC, a company that is developing a new natural gas power generation technology that produces low-cost electricity while reducing air emissions. In January 2020, as part of our strategic realignment, we announced plans to wind down our power portfolio.

Contracts

Our contracts are awarded on a competitively bid and negotiated basis. We execute our contracts through a variety of methods, principally fixed-price, but also including cost reimbursable, cost-plus, day-rate and unit-rate basis or some combination of those methods. Factors that customers may consider include price, facility or equipment availability, technical capabilities of equipment and personnel, efficiency, safety record and reputation.

Fixed-price contracts are for a fixed amount to cover costs and any profit element for a defined scope of work. Fixed-price contracts can involve more risk to us because they require us to predetermine both the quantities of work to be performed and the costs associated with executing the work. See “Risk Factors—We are subject to risks associated with contractual pricing in our industry, including the risk that, if our actual costs exceed the costs we estimate on our fixed-price contracts, our profitability will decline and we may suffer losses” in Item 1A.

We have contracts that extend beyond one year. Most of our long-term contracts have provisions for progress payments. We attempt to cover anticipated increases in labor, material and service costs of our long-term contracts either through an estimate of such charges, which is reflected in the original price, or through risk-sharing mechanisms, such as escalation or price adjustments for items such as labor and commodity prices.

We generally recognize our contract revenues and related costs on a percentage-of-completion basis. Accordingly, for each contract, we regularly review contract price and cost estimates as the work progresses and reflect adjustments in profit proportionate to the percentage of completion of the related project in the period when we revise those estimates. To the extent these adjustments result in a reduction or elimination of previously reported profits with respect to a project, we recognize a charge against current earnings, which could be material.

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Our arrangements with customers frequently require us to provide letters of credit, bid and performance bonds or guarantees to secure bids or performance under contracts. While these letters of credit, bonds and guarantees may involve significant dollar amounts, historically there have been no material payments to our customers under these arrangements.

Change orders, which are a normal and recurring part of our business, can increase (sometimes substantially) the future scope and cost of a job. Therefore, change order awards (although frequently beneficial in the long term) can have the short-term effect of reducing the job percentage of completion and thus the revenues and profits recognized to date. We regularly review contract price and cost estimates as the work progresses and reflect adjustments in profit, proportionate to the job percentage of completion in the period when those estimates are revised. Revenue from unapproved change orders is recognized to the extent of amounts management expects to recover or costs incurred. Unapproved change orders that are disputed by the customer are treated as claims.

In the event of a contract deferral or cancellation, we generally would be entitled to recover costs incurred, settlement expenses and profit on work completed prior to deferral or termination. Significant or numerous cancellations could adversely affect our business, financial condition, results of operations and cash flows.

Some of our contracts, regardless of type, may operate under joint venture, consortium or other collaborative arrangements. Typically, we enter into these arrangements with reputable companies with whom we have worked previously. These arrangements are generally made to strengthen our market position or technical skills, or where the size, scale or location of the project warrants the use of such arrangements.

Remaining Performance Obligations (“RPOs”)

RPOs represent the amount of revenues we expect to recognize in the future from our contract commitments on projects. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook—Remaining Performance Obligations” for discussion and quantification of our RPO’s. See also “Risk Factors—Our RPOs are subject to unexpected adjustments and cancellations” in Item 1A.

Competition

We operate in a competitive environment. Technology performance, price, timeliness of completion, quality, safety record, track record and reputation are principal competitive factors within our industry. There are numerous regional, national and global competitors that offer similar services to those offered by each of our operating groups, including Axens SA; Bechtel Group Inc.; China Offshore Oil Engineering Co. Ltd.; Fluor Corporation; Honeywell/UOP; Hyundai Heavy Industrial Co. Ltd.; KBR Inc.; Kiewit Corporation; Larsen and Toubro Ltd.; Lyondell Basell Industries N.V.; Petrofac International Ltd.; Saipem S.P.A.; Samsung Heavy Industries Co., Ltd.; Subsea 7 S.A.; Techidas Reunidas, S.A; TechnipFMC plc; Wood plc; WorleyParsons Limited and W.R. Grace & Co.

Significant Customers

See Note 24, Segment Reporting, to the accompanying Consolidated Financial Statements for information on customers that accounted for significant percentages of our consolidated revenues.

Raw Materials and Suppliers

The principal raw materials we use are metal plate, structural steel, pipe, fittings, catalysts, proprietary equipment and selected engineered equipment such as pressure vessels, exchangers, pumps, valves, compressors, motors and electrical and instrumentation components. Most of these materials are available from numerous suppliers worldwide, with some furnished under negotiated supply agreements. We anticipate being able to obtain these materials for the foreseeable future; however, the price, availability and scheduled deliveries offered by our suppliers may vary significantly from year to year due to various factors, including supplier consolidations, supplier raw material shortages, costs, surcharges, supplier capacity, customer demand, market conditions and any duties and tariffs imposed on the materials.

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We use subcontractors where it assists us in meeting customer requirements with regard to resources, schedule, cost or technical expertise. These subcontractors may range from small local entities to companies with global capabilities, some of which may be utilized on a repetitive or preferred basis.

Employees

At December 31, 2019, we employed approximately 42,600 persons worldwide, comprised of approximately 14,400 salaried employees and approximately 28,200 hourly and craft employees. Our number of employees, particularly hourly and craft, varies in relation to the location, number and size of projects we have in process at any given time. To preserve our project management and technological expertise as core competencies, we continuously recruit and develop qualified personnel, and maintain ongoing training programs for all our key personnel.

The percentage of our employees represented by unions at December 31, 2019 was approximately 5% to 10%. We have agreements, which we customarily renew periodically, with various unions representing groups of employees at project sites and fabrication facilities in the U.S. and Canada and various other countries. We consider our relationships with our employees and the applicable labor unions to be satisfactory.

Patents and Licenses

We have numerous active patents and patent applications throughout the world, the majority of which are associated with technologies licensed by our Technology operating group. We continue to invest in research and development to ensure that our portfolio of patents remains competitive and we also acquire rights to technologies when we consider it advantageous for us to do so. However, no individual patent is so essential that its loss would materially affect our business.

Hazard Risks and Loss Control Systems

Our operations present risks of injury to or death of people, loss of or damage to property and damage to the environment. We conduct difficult and frequently precise operations in very challenging and dynamic locations. We have created loss control systems to assist us in the identification and treatment of the hazard risks presented by our operations, and we endeavor to make sure these systems are effective.

As loss control measures will not always be successful, we seek to establish various means of funding losses and liability related to incidents or occurrences. We primarily seek to do this through contractual protections, including waivers of consequential damages, indemnities, caps on liability, liquidated damage provisions and access to the insurance of other parties. We also procure insurance for certain potential losses or liabilities, operate our own “captive” insurance company or establish funded or unfunded reserves. In cases where we place insurance, we are subject to the credit worthiness of the relevant insurer(s), the available limits of the coverage, our retention under the relevant policy, exclusions in the policy and gaps in coverage. There can be no assurance that our insurance arrangements will adequately address all risks. See “Item 1A, Risk Factors—Risk Factors Relating to Our Business Operations—Our operations are subject to operating risks and limits on insurance coverage and contractual indemnity protections, which could expose us to potentially significant liabilities and costs.”

Our wholly owned “captive” insurance subsidiaries provide coverage for our retentions under employer’s liability, general and products liability, automotive liability and workers’ compensation insurance and, from time to time, builder’s risk and marine hull insurance within certain limits. We may also have business reasons in the future to arrange for our insurance subsidiary to insure other risks which we cannot or do not wish to transfer to outside insurance companies. Premiums charged and reserves related to these insurance programs are based on the facts and circumstances specific to historic losses, loss factors and the performance of the outside insurance market for the type of risk at issue. The actual outcome of insured claims could differ significantly from estimated amounts. We maintain actuarially determined accruals in our consolidated balance sheets to cover losses in our captive insurance programs. These accruals are based on certain assumptions developed utilizing historical data to project future losses. Loss estimates in the calculation of these accruals are adjusted as required based upon reported claims, actual claim payments and settlements and claim reserves. Claims as a result of our operations, if greater in frequency or severity than actuarially predicted, could adversely impact the ability of our captive insurance subsidiaries to respond to all claims presented.

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Governmental Regulations and Environmental Matters

General

Many aspects of our operations and properties are affected by political developments and are subject to both domestic and foreign governmental regulations, including those relating to: • constructing and equipping offshore production platforms and various onshore and offshore facilities; • workplace health and safety, including marine vessel safety; • the operation of foreign-flagged vessels in the coastal trade; • the Foreign Corrupt Practices Act and similar anti-corruption laws; • data privacy; • currency conversions and repatriation; • taxation of unremitted earnings and earnings of expatriate personnel; and • protecting the environment.

In addition, we depend on the demand for certain of our services from the oil and gas industry and, therefore, are affected by changing taxes, price controls and other laws and regulations relating to the oil and gas industry generally. The adoption of laws and regulations curtailing offshore exploration and development drilling for oil and gas for environmental, economic and other policy reasons would adversely affect our operations by limiting demand for our services.

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our operations.

The exploration and development of oil and gas properties on the continental shelf of the United States is regulated primarily under the U.S. Outer Continental Shelf Lands Act and related regulations. These laws require the construction, operation and removal of offshore production facilities located on the outer continental shelf of the United States to meet stringent engineering and construction specifications. Similar regulations govern the plugging and abandoning of wells located on the outer continental shelf of the United States and the removal of all production facilities. Violations of regulations issued pursuant to the U.S. Outer Continental Shelf Lands Act and related laws can result in substantial civil and criminal penalties, as well as injunctions curtailing operations.

We cannot determine the extent to which new legislation, new regulations or changes in existing laws or regulations may affect our future operations.

Environmental

Our operations and properties are subject to a wide variety of increasingly complex and stringent foreign, federal, state and local environmental laws and regulations, including those governing discharges into the air and water, the handling and disposal of solid and hazardous wastes, the remediation of soil and groundwater contaminated by hazardous substances and the health and safety of employees. Sanctions for noncompliance may include revocation of permits, corrective action orders, administrative or civil penalties and criminal prosecution. Some environmental laws provide for strict, joint and several liability for remediation of spills and other releases of hazardous substances, as well as damage to natural resources. In addition, companies may be subject to claims alleging personal injury or property damage as a result of alleged exposure to hazardous substances. Such laws and regulations may also expose us to liability for the conduct of or conditions caused by others or for our acts that were in compliance with all applicable laws at the time such acts were performed.

These laws and regulations include the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (“CERCLA”), the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act and similar laws that provide for responses to, and liability for, releases of hazardous substances into the environment. These laws and regulations also include similar foreign, state or local counterparts to these federal laws, which regulate air emissions, water discharges and hazardous substances and waste management and disposal, and require public disclosure related to the use of various hazardous substances. Our operations are also governed by laws and regulations relating to workplace safety and worker health, including, in the United States, the Occupational Safety and Health Act and regulations promulgated thereunder.

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In addition, offshore construction and drilling in some areas have been opposed by environmental groups and, in some areas, have been restricted. To the extent laws are enacted or other governmental actions are taken that prohibit or restrict offshore construction and drilling or impose environmental protection requirements that result in increased costs to the oil and gas industry in general and the offshore construction industry in particular, our business and prospects could be adversely affected.

We have been identified as a potentially responsible party at various cleanup sites under the CERCLA. CERCLA and other environmental laws can impose liability for the entire cost of cleanup on any of the potentially responsible parties, regardless of fault or the lawfulness of the original conduct.

In connection with the historical operation of our facilities, including those associated with acquired operations, substances which currently are or might be considered hazardous were used or disposed of at some sites that will or may require us to make expenditures for remediation. In addition, we have agreed to indemnify parties from whom we have purchased or to whom we have sold facilities for certain environmental liabilities arising from acts occurring before the dates those facilities were transferred. Generally, however, where there are multiple responsible parties, a final allocation of costs is made based on the amount and type of wastes disposed of by each party and the number of financially viable parties, although this may not be the case with respect to any particular site. We have not been determined to be a major contributor of waste to any of these sites. On the basis of our relative contribution of waste to each site, we expect our share of the ultimate liability for the various sites will not have a material adverse effect on our consolidated financial condition, results of operations or cash flows in any given year.

We believe we are in compliance, in all material respects, with applicable environmental laws and regulations and maintain insurance coverage to mitigate our exposure to environmental liabilities. We do not anticipate we will incur material capital expenditures for environmental control facilities or for the investigation or remediation of environmental conditions during 2020 or 2021. As of December 31, 2019, we had no environmental reserve recorded. See Note 23, Commitments and Contingencies, to the accompanying Consolidated Financial Statements for additional information.

Cautionary Statement Concerning Forward-Looking Statements

We are including the following discussion to inform our existing and potential security holders generally of some of the risks and uncertainties that can affect our company and to take advantage of the “safe harbor” protection for forward-looking statements that applicable federal securities law affords.

From time to time, our management or persons acting on our behalf make “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, to inform existing and potential security holders about our company. These statements may include projections and estimates concerning the scope, execution, timing and success of specific projects and our future remaining performance obligations (“RPOs”), revenues, income and capital spending. Forward-looking statements are generally accompanied by words such as “achieve,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “strategy” or other words that convey the uncertainty of future events or outcomes. Sometimes we will specifically describe a statement as being a forward-looking statement and refer to this cautionary statement.

In addition, various statements in this report, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. Those forward-looking statements appear in Item 1, Business, and Item 3, Legal Proceedings, in Part I of this report and in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in the Notes to our Consolidated Financial Statements and elsewhere in this report.

These forward-looking statements include, but are not limited to, statements that relate to, or statements that are subject to risks, contingencies or uncertainties that relate to: • expectations relating to the duration, effects and ultimate outcome of the Chapter 11 cases; • the adequacy of our sources of liquidity and capital resources, including after entering into the DIP Credit Agreement and after completing the Exit Facilities; • future levels of revenues, operating margins, operating income (loss), cash flows, net income (loss) or earnings (loss) per share; • the outcome of project awards and scope, execution and timing of specific projects, including timing to complete and cost to complete these projects;

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• future project activities, including the commencement and subsequent timing of, and the success of, operational activities on specific projects, and the ability of projects to generate sufficient revenues to cover our fixed costs; • estimates of revenues over time and contract profits or losses; • expectations regarding the acquisition or divestiture of assets, including the completion of the Lummus Technology sale and the sale of the remaining portion of our pipe fabrication business and the timing of, and use of proceeds from, those transactions; • anticipated levels of demand for our products and services; • global demand for oil and gas and fundamentals of the oil and gas industry; • expectations regarding offshore development of oil and gas; • market outlook for the EPCI market; • expectations regarding cash flows from operating activities; • expectations regarding RPOs; • future levels of capital, environmental or maintenance expenditures; • the success or timing of completion of ongoing or anticipated capital or maintenance projects; • the adequacy of our sources of liquidity and capital resources; • the ability to alleviate substantial doubt regarding our ability to continue as a going concern; • the impact of the NYSE delisting of our common stock on the liquidity and market price of our common stock; • interest expense; • the effectiveness of our derivative contracts in mitigating foreign currency and interest rate risks; • results of our capital investment program; • the impact of U.S. and non-U.S. tax law changes; • the potential effects of judicial or other proceedings on our business, financial condition, results of operations and cash flows; and • the anticipated effects of actions of third parties such as competitors, or federal, foreign, state or local regulatory authorities, or plaintiffs in litigation.

These forward-looking statements speak only as of the date of this report; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following: • risks and uncertainties relating to the Chapter 11 Cases, including, but not limited to: • our ability to obtain the Bankruptcy Court’s approval with respect to motions or other requests made to the Bankruptcy Court in the Chapter 11 Cases, including maintaining strategic control as debtor-in-possession; • our ability to retain the exclusive right to propose a Plan of Reorganization and our ability to achieve confirmation of such plan; • the effects of the Chapter 11 Cases on us and our various constituents, including our stockholders; • Bankruptcy Court rulings in the Chapter 11 Cases as well as the outcome of all other pending litigation and the outcome of the Chapter 11 Cases in general; • third-party motions in the Chapter 11 Cases, which may interfere with our ability to consummate the Plan of Reorganization;

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• uncertainties and risks associated with the completion of the Lummus Technology sale, which is a condition to consummation of the Plan of Reorganization; • our ability to maintain relationships with suppliers, customers, employees and other third parties as a result of the Chapter 11 Cases; • the length of time we will operate under the Chapter 11 Cases; • attendant risks associated with restrictions on our ability to pursue some of our business strategies; • the potential adverse effects of the Chapter 11 Cases on our liquidity and results of operations; • the potential adverse effects of the Chapter 11 Cases on our access to capital resources, including our continuing access to bilateral letter of credit facilities; • the cancellation of our common stock in the Chapter 11 Cases; • the impact of the NYSE delisting of our common stock on the liquidity and market price of our common stock; • the potential material adverse effect of claims that are not discharged in the Chapter 11 Cases; • uncertainties regarding our ability to retain key personnel; • uncertainties regarding the reactions of our customers, subcontractors, prospective customers, suppliers and service providers to the Chapter 11 Cases; and • uncertainties and continuing risks associated with our ability to achieve our stated goals and continue as a going concern; • general economic and business conditions and industry trends; • general developments in the industries in which we are involved; • the volatility of oil and gas prices; • decisions about capital investment to be made by oil and gas companies and other participants in the energy and natural resource industries, demand from which is the largest component of our revenues; • other factors affecting future levels of demand, including investments across the natural gas value chain, including LNG and petrochemicals, investments in power and petrochemical facilities and investments in various types of facilities that require storage structures and pre-fabricated pipe; • the highly competitive nature of the businesses in which we are engaged; • uncertainties as to timing and funding of new contract awards; • our ability to appropriately bid, estimate and effectively perform projects on time, in accordance with the schedules established by the applicable contracts with customers; • changes in project design or schedule; • changes in scope or timing of work to be completed under contracts; • cost overruns on fixed-price or similar contracts or failure to receive timely or proper payments on cost-reimbursable contracts, whether as a result of improper estimates, performance, disputes or otherwise; • changes in the costs or availability of, or delivery schedule for, equipment, components, materials, labor or subcontractors; • risks associated with labor productivity; • cancellations of contracts, change orders and other modifications and related adjustments to RPOs and the resulting impact from using RPOs as an indicator of future revenues or earnings; • the collectability of amounts reflected in change orders and claims relating to work previously performed on contracts; • our ability to settle or negotiate unapproved change orders and claims and estimates regarding liquidated damages; • the capital investment required to construct new-build vessels and maintain and/or upgrade our existing fleet of vessels; • the ability of our suppliers and subcontractors to deliver raw materials in sufficient quantities and/or perform in a timely manner;

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• volatility and uncertainty of the credit markets; • our ability to comply with covenants in our credit agreements and other debt instruments and the availability, terms and deployment of capital; • the unfunded liabilities of our pension and other post-retirement plans, which may negatively impact our liquidity and, depending upon future operations, may impact our ability to fund our pension obligations; • the continued availability of qualified personnel; • the operating risks normally incident to our lines of business, which could lead to increased costs and affect the quality, costs or availability of, or delivery schedule for, equipment, components, materials, labor or subcontractors and give rise to contractually imposed liquidated damages; • natural or man-caused disruptive events that could damage our facilities, equipment or our work-in-progress and cause us to incur losses and/or liabilities; • equipment failure; • changes in, or our failure or inability to comply with, government regulations; • adverse outcomes from legal and regulatory proceedings; • impact of potential regional, national and/or global requirements to significantly limit or reduce greenhouse gas and other emissions in the future; • changes in, and liabilities relating to, existing or future environmental regulatory matters; • changes in U.S. and non-U.S. tax laws or regulations; • the continued competitiveness and availability of, and continued demand and legal protection for, our intellectual property assets or rights, including the ability of our patents or licensed technologies to perform as expected and to remain competitive, current, in demand, profitable and enforceable; • our ability to keep pace with rapid technological changes or innovations; • the risk that we may not be successful in updating and replacing current information technology and the risks associated with information technology systems interruptions and cybersecurity threats; • the risks associated with failures to protect data privacy in accordance with applicable legal requirements and contractual provisions binding upon us; • difficulties we may encounter in obtaining regulatory or other necessary approvals of any strategic transactions; • the risks associated with negotiating divestitures of assets with third parties; • the risks associated with integrating acquired businesses; • the risks associated with forming and operating joint ventures, including exposure to joint and several liability for failures in performance by our co-venturers; • social, political and economic situations in countries where we do business; • the risks associated with our international operations, including risks relating to local content or similar requirements; • the consequences of significant changes in foreign currency and interest rate risks and our ability to manage or obtain adequate hedge arrangements for those or similar risks; • interference from adverse weather or sea conditions; • the possibilities of war, other armed conflicts or terrorist attacks; • the effects of asserted and unasserted claims and the extent of available insurance coverages; • our ability to obtain surety bonds, letters of credit and new financing arrangements; • our ability to maintain builder’s risk, liability, property and other insurance in amounts and on terms we consider adequate and at rates that we consider economical;

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• the aggregated risks retained in our captive insurance subsidiaries; and • the impact of the loss of insurance rights as part of the Chapter 11 Bankruptcy settlement concluded in 2006 involving several of our former subsidiaries.

We believe the items we have outlined above are important factors that could cause estimates in our consolidated financial statements to differ materially from actual results and those expressed in a forward-looking statement made in this report or elsewhere by us or on our behalf. We have discussed many of these factors in more detail elsewhere in this report, including those mentioned under the caption “Risk Factors.” These factors are not necessarily all the factors that could affect us. Unpredictable or unanticipated factors we have not discussed in this report could also have material adverse effects on actual results of matters that are the subject of our forward-looking statements. We do not intend to update our description of important factors each time a potential important factor arises, except as required by applicable securities laws and regulations. We advise our security holders that they should (1) be aware that factors not referred to above could affect the accuracy of our forward-looking statements and (2) use caution and common sense when considering our forward-looking statements.

Available Information

Our website address is www.mcdermott.com. We make available through the Investors section of this website under “Financial Information,” free of charge, our Annual Reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, statements of beneficial ownership of securities on Forms 3, 4 and 5 and amendments to those reports as soon as reasonably practicable after we electronically file those materials with, or furnish those materials to, the Securities and Exchange Commission (the “SEC”). In addition, the SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. We have also posted on our website our: Corporate Governance Guidelines; Code of Ethics for our Chief Executive Officer and Senior Financial Officers; Board of Directors Conflicts of Interest Policies and Procedures; Officers, Board Members and Contact Information; Amended and Restated Articles of Incorporation; Amended and Restated By-laws; and charters for the Audit, Compensation and Governance Committees of our Board.

Use of our Website to Distribute Material Company Information

In accordance with guidance provided by the SEC regarding use by a company of its website as a means to disclose material information to investors and to comply with its disclosure obligations under SEC Regulation FD, we hereby notify investors, the media and other interested parties that we intend to continue to use our website at www.mcdermott.com to publish important information about McDermott, including information that may be deemed material to investors. We routinely post on our website important information, including press releases, investor presentations and financial information, which may be accessed by clicking on the Investors section of our website. We also use our website to expedite public access to time-critical information regarding our company in advance of or in lieu of distributing a press release or a filing with the SEC disclosing the same information. We therefore encourage investors, the media, and other interested parties to review the information posted on our website as described above, in addition to information announced through our SEC filings, press releases and public conference calls and webcasts.

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Item 1A. RISK FACTORS

You should carefully consider each of the following risks and all of the other information contained in this report. If any of these risks develop into actual events, our business, financial condition, results of operations or cash flows could be materially and adversely affected, and, as a result, the trading price of our common stock could decline. Additional risks not presently known to us or that we currently deem immaterial individually or in the aggregate may also materially and adversely affect us.

Risk Factors Relating to the Chapter 11 Cases

The Chapter 11 Cases may have a material adverse impact on our business, financial condition and results of operations. In addition, the consummation of the Plan of Reorganization will result in the cancellation and discharge of our equity securities, including our common stock.

As previously disclosed, we engaged legal and financial advisors to assist us in evaluating potential alternatives available to us to reduce or restructure our significant outstanding indebtedness. These efforts led to the execution of the RSA and the commencement of the Chapter 11 Cases on January 21, 2020.

The Chapter 11 Cases could have a material adverse effect on our business, financial condition and results of operations. So long as the Chapter 11 Cases continue, our management may be required to spend a significant amount of time and effort dealing with the restructuring rather than focusing exclusively on our business operations. Bankruptcy Court protection and operating as debtors in possession also may make it more difficult to retain management and the key personnel necessary to the success of our business. In addition, during the pendency of the Chapter 11 Cases, our customers, subcontractors and suppliers might lose confidence in our ability to reorganize our business successfully and may seek to establish alternative commercial relationships, renegotiate the terms of our agreements, terminate their relationships with us or require financial assurances from us. Customers may lose confidence in our ability to provide them the level of service they expect, resulting in a significant decline in our revenues, profitability and cash flow.

Other significant risks include or relate to the following: • the effects of the filing of the Chapter 11 Cases on our business and the interests of various constituents, including our stockholders; • Bankruptcy Court rulings in the Chapter 11 Cases, including with respect to our motions and third-party motions, as well as the outcome of other pending litigation; • our ability to operate within the restrictions and the liquidity limitations of the DIP Credit Agreement and any related orders entered by the Bankruptcy Court in connection with the Chapter 11 Cases; • our ability to maintain strategic control as debtor-in-possession during the pendency of the Chapter 11 Cases; • the length of time that we will operate with Chapter 11 protection and the continued availability of operating capital during the pendency of the Chapter 11 Cases; • increased advisory costs during the pendency of the Chapter 11 Cases; • the risks associated with restrictions on our ability to pursue some of our business strategies during the pendency of the Chapter 11 Cases; • our ability to complete the Lummus Technology sale and financing contemplated by the Exit Facilities, and to satisfy all the other conditions to consummation of the Plan of Reorganization; • the potential adverse effects of the Chapter 11 Cases on our business, cash flows, liquidity, financial condition and results of operations; • the ultimate outcome of the Chapter 11 Cases in general; • the cancellation of our existing equity, including our outstanding shares of common stock, in the Chapter 11 Cases; • the potential material adverse effects of claims that are not discharged in the Chapter 11 Cases; • uncertainties regarding the reactions of our customers, subcontractors, prospective customers, suppliers and service providers to the Chapter 11 Cases;

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• uncertainties regarding our ability to retain and motivate key personnel; and • uncertainties and continuing risks associated with our ability to achieve our stated goals and continue as a going concern.

Further, under Chapter 11, transactions outside the ordinary course of business are subject to the prior approval of the Bankruptcy Court, which may limit our ability to respond in a timely manner to certain events or take advantage of certain opportunities or to adapt to changing market or industry conditions.

Because of the risks and uncertainties associated with the Chapter 11 Cases, we cannot predict or quantify the ultimate impact that events occurring during the Chapter 11 Cases may have on our business, cash flows, liquidity, financial condition and results of operations, nor can we provide any assurance as to our ability to continue as a going concern.

As a result of the Chapter 11 Cases, realization of assets and liquidation of liabilities are subject to uncertainty. While operating under the protection of the Bankruptcy Code, and subject to Bankruptcy Court approval or otherwise as permitted in the normal course of business, we may sell or otherwise dispose of assets and liquidate or settle liabilities for amounts other than those reflected in our consolidated financial statements. Further, the Plan of Reorganization, if consummated, will materially change the amounts and classifications reported in our historical consolidated financial statements, which do not give effect to any adjustments to the carrying value of assets or amounts of liabilities that will be necessary as a consequence of confirmation of the Plan of Reorganization.

Delays in the Chapter 11 Cases may increase the risks of our being unable to reorganize our business and emerge from bankruptcy and increase our costs associated with the bankruptcy process.

There can be no assurance that the Plan of Reorganization will become effective in accordance with its terms on the timeline we anticipate or at all. Prolonged Chapter 11 proceedings could adversely affect our relationships with customers, subcontractors, suppliers and employees, among other parties, which in turn could adversely affect our business, competitive position, financial condition, liquidity and results of operations and our ability to continue as a going concern. A weakening of our financial condition, liquidity and results of operations could adversely affect our ability to implement the Plan of Reorganization (or any other Chapter 11 plan). If we are unable to consummate the Plan of Reorganization, we may be forced to liquidate our assets. we are subject to the risks and uncertainties associated with our exclusive right to file a plan of reorganization.

At the outset of the Chapter 11 Cases, the Bankruptcy Code provides debtors-in-possession the exclusive right to file and solicit acceptance of a plan of reorganization for the first 120 days of the bankruptcy case, subject to extension at the discretion of the court. All other parties are prohibited from filing or soliciting a plan of reorganization during this period. If the Bankruptcy Court terminates that right or the exclusivity period expires, there could be a material adverse effect on our ability to achieve confirmation of a plan in order to achieve our stated goals. The possible decision of creditors and/or other third parties, whose interest may be inconsistent with our own, to file alternative plans of reorganization could further protract the Chapter 11 Cases, leading us to continue to incur significant professional fees and costs. Because of these risks and uncertainties associated with the termination or expiration of our exclusivity rights, we cannot predict or quantify the ultimate impact that events occurring during the Chapter 11 Cases may have on our business, cash flows, liquidity, financial condition and results of operations, nor can we predict the ultimate impact that events occurring during the Chapter 11 Cases may have on our corporate or capital structure.

Adverse publicity in connection with the Chapter 11 Cases or otherwise could negatively affect our businesses.

Adverse publicity or news coverage relating to us, including, but not limited to, publicity or news coverage in connection with the Chapter 11 Cases, may negatively impact our efforts to establish and promote a positive image after emergence from the Chapter 11 Cases.

Trading in our common stock during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks.

All of our indebtedness is senior to the existing common stock in our capital structure. The RSA and the Plan of Reorganization contemplate that our existing equity interests will be cancelled and discharged in connection with the Chapter 11 Cases and the holders of those equity interests, including the holders of our common stock, will be entitled to no recovery. Accordingly, any trading in our common stock during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks to purchasers of our common stock.

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The RSA is subject to significant conditions and milestones that may be difficult for us to satisfy.

There are certain material conditions we must satisfy under the RSA, including the timely satisfaction of milestones in the Chapter 11 Cases, which include the consummation of the Lummus Technology sale, the financing contemplated by the Exit Facilities and other transactions contemplated by the Plan of Reorganization. Our ability to timely complete such milestones is subject to risks and uncertainties, many of which are beyond our control.

The Plan of Reorganization may not become effective.

Even if the Plan of Reorganization is confirmed by the Bankruptcy Court, it may not become effective because it is subject to the satisfaction of certain conditions precedent (some of which are beyond our control). There can be no assurance that such conditions will be satisfied and, therefore, that the Plan of Reorganization will become effective and that the Debtors will emerge from the Chapter 11 Cases as contemplated by the Plan of Reorganization. If the Effective Date is delayed, the Debtors may not have sufficient cash available to operate their businesses. In that case, the Debtors may need new or additional post-petition financing, which may increase the cost of consummating the Plan of Reorganization. There can be no assurance of the terms on which such financing may be available or if such financing will be available. If the transactions contemplated by the Plan of Reorganization are not completed, it may become necessary to amend the Plan of Reorganization. The terms of any such amendment are uncertain and could result in material additional expense and result in material delays to the Chapter 11 Cases.

Even if the Plan of Reorganization or another Chapter 11 plan of reorganization is consummated, we may not be able to achieve our stated goals.

Even if the Plan of Reorganization or any other Chapter 11 plan of reorganization is consummated, we may continue to face a number of risks, such as changes in economic conditions, changes in our industry, changes in demand for our services and increasing expenses. Some of these risks become more acute when a case under the Bankruptcy Code continues for a protracted period without indication of how or when the transactions under the Plan of Reorganization or any other Chapter 11 plan of reorganization will actually close. As a result of these and other risks, we cannot guarantee that the Plan of Reorganization or any other Chapter 11 plan of reorganization will achieve our stated goals. Furthermore, even if our debts are reduced or discharged through the Plan of Reorganization or any other plan of reorganization, we may need to raise additional funds through public or private debt or equity financing or other various means to fund our business after the completion of the Chapter 11 Cases. Our access to additional financing may be limited, if it is available at all. Therefore, adequate funds may not be available when needed or may not be available on favorable terms.

Therefore, the Plan of Reorganization may not become effective and, thus, we cannot assure you of our ability to continue as a going concern.

Our long-term liquidity requirements and the adequacy of our capital resources are difficult to predict at this time.

We face uncertainty regarding the adequacy of our liquidity and capital resources and have extremely limited, if any, access to additional financing. In addition to the cash requirements necessary to fund our ongoing operations, we have incurred significant professional fees and other costs in connection with preparation for the Chapter 11 Cases and expect that we will continue to incur significant professional fees and costs throughout the Chapter 11 Cases. We cannot assure you that cash on hand and cash flow from operations will be sufficient to continue to fund our operations and allow us to satisfy our obligations related to the Chapter 11 Cases. Although we entered into the DIP Credit Agreement providing for an aggregate principal amount of up to $2.81 billion pursuant to the DIP Facilities, in connection with the Chapter 11 Cases, we cannot assure you that such financing sources will be sufficient, that we will be able to secure additional interim financing or adequate exit financing sufficient to meet our liquidity needs (or if sufficient funds are available, that they will be offered to us on acceptable terms).

Our liquidity, including our ability to meet our ongoing operational obligations, depends on, among other things: (1) our ability to comply with the terms and conditions of any order governing the use of cash collateral that may be entered by the Bankruptcy Court in connection with the Chapter 11 Cases, (2) our ability to access credit under the DIP Facilities, (3) our ability to maintain adequate cash on hand, (4) our ability to generate cash flow from operations, (5) our ability to consummate the Plan of Reorganization or other alternative restructuring transaction, and (6) the cost, duration and outcome of the Chapter 11 Cases.

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In certain limited instances, a Chapter 11 case may be converted to a case under Chapter 7 of the Bankruptcy Code.

Upon a showing of cause, the Bankruptcy Court may convert the Chapter 11 Cases to cases under Chapter 7 of the Bankruptcy Code. In such event, a Chapter 7 trustee would be appointed or elected to liquidate our assets for distribution in accordance with the priorities established by the Bankruptcy Code. We believe that liquidation under Chapter 7 would result in significantly smaller distributions being made to our creditors than those provided for in the Plan of Reorganization because of: (1) the likelihood that the assets would have to be sold or otherwise disposed of in a distressed fashion over a short period of time rather than in a controlled manner and as a going concern; (2) additional administrative expenses involved in the appointment of a Chapter 7 trustee; and (3) additional expenses and claims, some of which would be entitled to priority, that would be generated during the liquidation and from the rejection of executory contracts in connection with a cessation of operations.

The consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2019 contain disclosures that express substantial doubt about our ability to continue as a going concern.

The consolidated financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2019 have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and other commitments in the normal course of business and does not include any adjustments that might result from uncertainty about our ability to continue as a going concern. Such assumption may not be justified. Our liquidity has been negatively impacted by the prolonged downturn in the offshore oil and gas market, losses incurred on several fixed-price, long-term EPCI contracts and our substantial indebtedness and associated debt-related expenses. As a result of these and other factors, we entered into the RSA and commenced the Chapter 11 cases. The RSA and the Plan of Reorganization contemplate that our equity investors, including the holders of our common stock, will lose the entire value of their investment in our business. The inclusion of disclosures that express substantial doubt about our ability to continue as a going concern may negatively impact the trading price of our common stock and have an adverse impact on our relationships with third parties with whom we do business, including our customers, subcontractors, suppliers and employees, and could have a material adverse impact on our business, financial condition and results of operations.

As a result of the Chapter 11 Cases, our historical financial information may not be indicative of our future performance, which may be volatile.

During the Chapter 11 Cases, we expect our financial results to continue to be volatile as restructuring activities and expenses impact our consolidated financial statements. As a result, our historical financial performance is likely not indicative of our financial performance after the date of the filing of the Chapter 11 Cases. In addition, if we emerge from Chapter 11, the amounts reported in subsequent consolidated financial statements may materially change relative to our historical consolidated financial statements. We also will be required to adopt fresh start accounting, in which case our assets and liabilities will be recorded at fair value as of the fresh start reporting date, which may differ materially from the recorded values of assets and liabilities on our historical consolidated balance sheets. Our financial results after the application of fresh start accounting may be different from historical trends.

The actual results achieved during the periods covered by our recently issued projections will vary from those set forth in those projections, and such variations may be material.

In connection with the commencement of the Chapter 11 Cases, we were required to file with the SEC certain projections that we had previously provided to our lenders and others under confidentiality arrangements (the “Projections”). Although we believe the Projections were made on a reasonable basis, no representation was or can be made regarding, and there can be no assurance as to, their attainability. Our actual results achieved during the periods covered by the Projections will vary from those set forth in the Projections, and those variations may be material. The Projections are dependent upon numerous assumptions with respect to commodity prices, development capital, operating expenses, backlog, availability and cost of capital and performance. In addition, as disclosed elsewhere in this “Risk Factors” section, our business and operations are subject to substantial risks which increase the uncertainty inherent in the Projections. Many of the facts disclosed in this “Risk Factors” section could cause actual results to differ materially from those projected in the Projections. The Projections were not prepared with a view towards public disclosure or complying with the guidelines established by the American Institute of Certified Public Accountants or the SEC’s published guidelines regarding projections or forecasts. Our independent public accountants did not examine, compile, review or perform any procedures with respect to the Projections, and, accordingly, assumed no responsibility for the Projections. No independent expert reviewed the Projections on our behalf. The Projections have not been included or incorporated by reference in this annual report on Form 10-K, and, except as may be required by applicable law, we do not intend to update or otherwise revise the Projections, even if any or all the underlying assumptions are not realized.

19 ITEM 1A. RISK FACTORS we may be subject to claims that will not be discharged in the Chapter 11 Cases, which could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

The Bankruptcy Code provides that the confirmation of a plan of reorganization pursuant to Chapter 11 discharges a debtor from, among other things, substantially all debts arising prior to consummation of a plan of reorganization. Except for the obligations relating to certain credit agreement indebtedness and the Senior Notes, as well as the existing equity interests in McDermott, no claims against the Debtors that arose prior to January 21, 2020 or before consummation of the Plan of Reorganization would be subject to compromise or discharge. As a result, such claims that ultimately are not discharged pursuant to the Plan of Reorganization, including contingent claims, could be asserted against the reorganized entities and may have an adverse effect on our business, cash flows, liquidity, financial condition and results of operations on a post-reorganization basis.

The Chapter 11 Cases limit the flexibility of our management team in running our business.

While we operate our businesses as debtor-in-possession under supervision by the Bankruptcy Court, we are required to obtain the approval of the Bankruptcy Court, and in some cases certain lenders, prior to engaging in activities or transactions outside the ordinary course of business. Bankruptcy Court approval of non-ordinary course activities entails preparation and filing of appropriate motions with the Bankruptcy Court, negotiation with the various creditors’ committees and other parties-in-interest and one or more hearings. The creditors’ committees and other parties-in-interest may be heard at any Bankruptcy Court hearing and may raise objections with respect to these motions. This process may delay major transactions and limit our ability to respond quickly to opportunities and events. Furthermore, in the event the Bankruptcy Court does not approve a proposed activity or transaction, we would be prevented from engaging in activities and transactions that we believe are beneficial to us. we may experience employee attrition as a result of the Chapter 11 Cases.

As a result of the Chapter 11 Cases, we may experience employee attrition, and our employees may face considerable distraction and uncertainty. A loss of key personnel or material erosion of employee morale could adversely affect our business and results of operations. Our ability to engage, motivate and retain key employees or take other measures intended to motivate and incentivize key employees to remain with us through the pendency of the Chapter 11 Cases is limited by restrictions on the implementation of incentive programs under the Bankruptcy Code. The loss of services of members of our senior management team could impair our ability to execute our business strategies and implement operational initiatives, which may have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Upon emergence from bankruptcy, the composition of our board of directors will change significantly.

The composition of our board of directors is expected to change significantly following the Chapter 11 Cases. Any new directors may have different backgrounds, experiences and perspectives from those individuals who previously served on our board of directors and, thus, may have different views on the issues that will determine the future of our company. As a result, our future strategy and plans may differ materially from those of the past. we may not be able to fully utilize our U.S. net operating loss carryforwards.

As of December 31, 2019, we had U.S. federal net operating loss carryforwards of approximately $386 million. In assessing the value of deferred tax assets as of December 31, 2019, we considered whether it was more likely than not that some or all of the deferred tax assets would not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on these considerations, we relied upon the reversal of certain deferred tax liabilities to realize a portion of our deferred tax assets and established a valuation allowance as of December 31, 2019 for other deferred tax assets because of uncertainty regarding their ultimate realization.

We expect that a significant portion of our net operating loss carryforwards will be eliminated as a result of the cancellation of most of our debt pursuant to the Plan of Reorganization. Furthermore, to the extent that any net operating loss carryforwards remain after the reorganization, our ability to use such net operating loss carryforwards could be significantly limited because the reorganization will constitute an “ownership change” as defined in Section 382 of the Internal Revenue Code.

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Risk Factors Relating to Our Operations we derive substantial revenues from companies in various energy-related industries, including the oil and natural gas exploration and development industry, a historically cyclical industry with levels of activity that are significantly affected by the levels and volatility of oil and natural gas prices.

The demand for our EPCI services from companies in various energy-related industries, particularly the oil and gas exploration and development industry, has traditionally been cyclical, depending primarily on the capital expenditures of oil and gas exploration and development companies. These capital expenditures are influenced by such factors as: • prevailing oil and natural gas prices; • expectations about future prices; • the cost of exploring for, producing and delivering hydrocarbons; • the sale and expiration dates of available offshore leases; • the discovery rate, size and location of new hydrocarbon reserves, including in offshore areas; • the rate of decline of existing hydrocarbon reserves; • laws and regulations related to environmental matters, including those addressing alternative energy sources and the risks of global climate change; • the development and exploitation of alternative fuels or energy sources; • domestic and international political, military, regulatory and economic conditions; • technological advances, including technology related to the exploitation of shale oil; and • the ability of oil and gas companies to generate funds for capital expenditures.

Prices for oil and natural gas have historically been, and we anticipate they will continue to be, extremely volatile and react to changes in the supply of and demand for oil and natural gas (including changes resulting from the ability of the Organization of Petroleum Exporting Countries to establish and maintain production quotas), domestic and worldwide economic conditions and political instability in oil producing countries. Material declines in oil and natural gas prices have affected, and will likely continue to affect, the demand for and pricing of our EPCI services. In response to currently prevailing industry conditions, many oil and gas exploration and development companies and other energy companies have made significant reductions in their capital expenditure budgets over the past three years. In particular, some of our customers have reduced their spending on exploration, development and production programs, new LNG import and export facilities and power plant projects. Sustained lower relative oil prices have already adversely affected demand for our services, and even lower relative oil prices could, over a sustained period of time, have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Our results of operations and operating cash flows depend on us obtaining significant EPCI contracts, primarily from companies in the oil and gas exploration and development, petrochemical, natural resources and power industries. The timing of or failure to obtain contracts, delays in awards of contracts, cancellations of contracts, delays in completion of contracts, or failure to obtain timely payments from our customers, could result in significant periodic fluctuations in our results of operations and operating cash flows. In addition, many of our contracts require us to satisfy specific progress or performance milestones in order to receive payment from the customer. As a result, we may incur significant costs for engineering, materials, components, equipment, labor or subcontractors prior to receipt of payment from a customer. Such expenditures could reduce our cash flows and necessitate borrowings under our credit agreements. If customers do not proceed with the completion of significant projects or if significant defaults on customer payment obligations to us arise, or if we encounter disputes with customers involving such payment obligations, we may face difficulties in collecting payment of amounts due to us, including for costs we previously incurred. In addition, some of our customers for large EPCI projects are project-specific entities that do not have significant assets other than their interests in the EPCI project, and it may be even more difficult to collect amounts owed to us by those customers if any of the problems or issues referred to above arise. Our failure to collect amounts owed to us could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

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we are subject to risks associated with contractual pricing in our industry, including the risk that, if our actual costs exceed the costs we estimate on our fixed-price contracts, our profitability will decline, and we may suffer losses.

We offer our customers a range of commercial options for our contracts, including fixed-price, cost-reimbursable and hybrid, which has both fixed-price and cost- reimbursable components. Under fixed-price contracts, we perform our services and execute our projects at an established price. Under cost-reimbursable contracts, we generally perform our services in exchange for a price that consists of reimbursement of all customer-approved costs and a profit component, which is typically a fixed rate per hour, an overall fixed fee, or a percentage of total reimbursable costs. Under cost-reimbursable contracts, if we are unable to obtain proper reimbursement for all costs incurred due to improper estimates, performance issues, customer disputes, or any of the other factors noted below for fixed-price contracts, the project may be less profitable than we expect.

We are engaged in a highly competitive industry, and we have contracted for a substantial number of projects on a fixed-price basis. In many cases, these projects involve complex design and engineering, significant procurement of equipment and supplies and extensive construction management and other activities conducted over extended time periods, sometimes in remote locations. Our actual costs related to these projects could exceed our projections. We attempt to cover the increased costs of anticipated changes in labor, material and service costs of long-term contracts, either through estimates of cost increases, which are reflected in the original contract price, or through price escalation clauses. Despite these attempts, however, the cost and gross profit we realize on a fixed-price contract could vary materially from the estimated amounts because of supplier, contractor and subcontractor performance, our own performance, including the quality and timeliness of work performed, failure to properly estimate costs of engineering, materials, components, equipment, labor or subcontractors, changes in job conditions, unanticipated weather conditions, variations in labor and equipment productivity and associated costs, increases in the cost of raw materials, particularly steel, over the term of the contract, difficulties in obtaining required governmental permits or approvals, changes in laws and regulations and changes in general economic conditions.

In the future, these factors and other risks generally inherent in the industry in which we operate may result in actual revenues or costs being different from those we originally estimated and may result in reduced profitability or losses on projects. Some of these risks include: • our engineering, procurement and construction projects may encounter difficulties related to the procurement of materials, or due to schedule disruptions, equipment performance failures or other factors that may result in additional costs to us, reductions in revenues, claims or disputes; • we may not be able to obtain compensation for additional work we perform or expenses we incur as a result of customer change orders or our customers providing deficient design or engineering information or equipment or materials; • we may be required to pay significant amounts of liquidated damages upon our failure to meet schedule or performance requirements of our contracts; and • difficulties in engaging third-party subcontractors, equipment manufacturers or materials suppliers or failures by third-party subcontractors, equipment manufacturers or materials suppliers to perform could result in project delays and cause us to incur additional costs.

Performance problems relating to any significant existing or future contract arising as a result of any of these or other risks could cause our actual results of operations to differ materially from those we anticipate at the time we enter into the contract and could cause us to suffer damage to our reputation within our industry and our customer base. We believe that some of our current projects may incur losses, which may be material, over their lifetimes due to material cost overruns. As a result, we may experience asset impairments and be required to establish reserves with respect to projects if and when cost overruns are expected, and our results of operations and financial condition could be materially adversely affected.

Additionally, we may be at a greater risk of reduced profitability or losses with respect to our contracts with companies in the oil and gas exploration and development industry in the current low-oil-price environment due to pricing pressures, potential difficulties in obtaining customer approvals of change orders or claims, deterioration in contract terms and conditions, including customer-required extended-payment terms, unexpected project delays, suspensions and cancellations or changes or reductions in project scope or schedule and other factors.

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Our use of “over time” revenue recognition could result in volatility in our results of operations.

We recognize revenues and profits from our long-term contracts over time as work progresses for contracts that satisfy the criteria for “over time” recognition. Accordingly, we review contract price and cost estimates periodically as the work progresses and reflect adjustments proportionate to the percentage of completion in income in the period when we revise those estimates. To the extent these adjustments result in a reduction or an elimination of previously reported profits with respect to a project, we would recognize a charge against current earnings, which could be material. Our current estimates of our contract costs and the profitability of our long-term projects, although reasonably reliable when made, could change as a result of the uncertainties associated with these types of contracts, and if adjustments to overall contract costs are significant, the reductions or reversals of previously recorded revenues and profits could be material in future periods. In addition, change orders, which are a normal and recurring part of our business, can increase (and sometimes substantially) the future scope and cost of a job. Therefore, change order awards (although frequently beneficial in the long term) can have the short-term effect of reducing the job percentage of completion and thus the revenues and profits that otherwise would be recognized to date. Additionally, to the extent that claims included in our RPOs, including those which arise from change orders which are under dispute or which have been previously rejected by the customer, are not resolved in our favor, there could be reductions in, or reversals of, previously reported amounts of revenues and profits, and charges against current earnings, all of which could be material.

Our RPOs are subject to unexpected adjustments and cancellations.

The revenues projected in our RPOs may not be realized or, if realized, may not result in profits. Because of project cancellations or changes in project scope and schedule, we cannot predict with certainty when or if projects reflected in our RPOs will be performed. In addition, even where a project proceeds as scheduled, it is possible that contracted parties may default and fail to pay amounts owed to us, or poor project performance could increase the cost associated with a project. Delays, suspensions, cancellations, payment defaults, scope changes and poor project execution could materially reduce the revenues and reduce or eliminate profits that we actually realize from projects reflected in our RPOs.

Reductions in our RPOs due to cancellation or modification by a customer or for other reasons may adversely affect, potentially to a material extent, the revenues and earnings we actually receive from contracts included in our RPOs. Many of the contracts included in our RPOs provide for cancellation fees in the event customers cancel projects. These cancellation fees usually provide for reimbursement of our out-of-pocket costs, revenues for work performed prior to cancellation and a varying percentage of the profits we would have realized had the contract been completed. However, we typically have no contractual right upon cancellation to the total revenues reflected in our RPOs. Projects may remain in our RPOs for extended periods of time. If we experience significant project suspensions, cancellations or scope adjustments to contracts reflected in our RPOs, our business, financial condition, results of operations and cash flows may be materially and adversely impacted. we may be exposed to additional risks as we obtain significant new awards and execute our RPOs, including greater RPOs concentration in fewer projects, potential cost overruns and increasing requirements for letters of credit, each of which could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

As we obtain significant new project awards and convert the RPOs into revenues, these projects may use larger sums of working capital than other projects and may be concentrated among a smaller number of customers. If any significant projects currently included in our RPOs or awarded in the future were to have material cost overruns, or are significantly delayed, modified or canceled, and we are unable to replace the projects in our RPOs, our business, financial condition, results of operations and cash flows could be materially and adversely impacted.

Additionally, as we convert our significant projects from RPOs into active operational phases, we may face significantly greater requirements for the provision of working capital, letters of credit or other forms of credit enhancement. We can provide no assurance that we will be able to access such capital and credit as may be needed or that we would be able to do so on terms we believe to be economically attractive.

The agreements that govern our indebtedness contain various covenants that impose restrictions on us and certain of our subsidiaries that may affect our ability to operate our business.

The agreements that govern our indebtedness contain various affirmative and negative covenants that, subject to various exceptions, restrict our ability and the ability of certain of our subsidiaries to, among other things, incur indebtedness, allow our property to be subject to liens, make investments and acquisitions, make dividends and other distributions, change the nature of our business, transact business with affiliates, merge or consolidate and sell or convey our assets. In addition, some of the agreements that govern the indebtedness contain covenants that require the maintenance of specified financial ratios. Our ability and our subsidiaries’ ability to comply with those provisions may be affected by events beyond our control. Failure to comply with our debt covenants could result in an event of default, which, if not cured or waived, could accelerate the applicable repayment obligations.

23 ITEM 1A. RISK FACTORS

The United Kingdom’s withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business.

We are a Panamanian corporation with a tax residency in the United Kingdom (“U.K.”) and with worldwide operations, including material business operations in Europe. In June 2016, a majority of voters in the U.K. voted in favor of the U.K.’s withdrawal from the European Union in a national referendum (“Brexit”). Brexit has created significant uncertainty about, among other things, the future relationship between the U.K. and the European Union.

The referendum was advisory, and the U.K. government served notice under Article 50 of the Treaty of the European Union in March 2017 to formally initiate the withdrawal process. On October 18, 2019, the U.K. and the European Union agreed on a new withdrawal agreement which set January 31, 2020 as the date for the U.K.’s departure from the European Union and established a transition period during which European Union law will continue to apply until December 31, 2020. The legislation implementing the withdrawal agreement into U.K. law was approved by the U.K. Parliament, and the U.K. formally departed on January 31, 2020, with a transitional regime coming into effect on February 1, 2020. The agreement governing the terms of the U.K.’s future relationship with the European Union following the end of the transition period is yet to be negotiated. It is uncertain whether any agreement will be reached by December 31, 2020 and whether the transition period will be extended beyond that date in order to allow more time for agreement. For these reasons, there remains a possibility that there will be no agreement governing the U.K.’s future relationship with the European Union beyond December 31, 2020.

These developments, or the perception that any of them could occur, could have a material adverse effect on global economic conditions and the stability of the global financial markets and could also significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets. Asset valuations, currency exchange rates and credit ratings may be especially subject to increased market volatility. Lack of clarity about applicable future laws, regulations or treaties governing the U.K.’s future relationship with the European Union, including financial laws and regulations, tax and free trade agreements, intellectual property rights, supply chain logistics, environmental, health and safety laws and regulations, immigration laws, employment laws, and other rules that could apply to us and our subsidiaries, could increase our costs, restrict our access to capital within the U.K. and the European Union, depress economic activity and further decrease foreign direct investment in the U.K. For example, withdrawal from the European Union could, depending on the terms of the future relationship between the U.K. and the European Union, eliminate the benefit of certain tax-related European Union directives currently applicable to U.K.-tax-resident companies such as us, including the Parent-Subsidiary Directive and the Interest and Royalties Directive, which could, subject to any relief under an available tax treaty, raise our tax costs.

If the U.K. and the European Union are unable to agree on mutually acceptable terms (or if other European Union member states pursue withdrawal), barrier-free access between the U.K. and other European Union member states or within the European Economic Area overall could be diminished or eliminated. Any of these factors could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations. we have a substantial investment in our marine fleet. At times, a vessel or several vessels may require increased levels of maintenance and capital expenditures, may be less efficient than competitors’ vessels for certain projects, and may experience mechanical failure with the inability to economically return to service. If we are unable to manage our fleet efficiently and find profitable market opportunities for our vessels, our results of operations may deteriorate and our financial condition and cash flows could be materially and adversely affected.

We operate a fleet of construction and multi-service vessels of varying ages. Some of our competitors’ fleets and competing vessels in those fleets may be substantially newer than ours and more technologically advanced. Our vessels may not be capable of serving all markets and may require additional maintenance and capital expenditures, due to age or other factors, creating periods of downtime. In addition, customer requirements and laws of various jurisdictions may limit the use of older vessels or a foreign-flagged vessel, unless we are able to obtain an exception to such requirements and laws, which may not be available. Our ability to continue to upgrade our fleet depends, in part, on our ability to economically commission the construction of new vessels, as well as the availability to purchase in the secondary market newer, more technologically advanced vessels with the capabilities that may be required by our customers. If we are unable to manage our fleet efficiently and find profitable market opportunities for our vessels, our results of operations may deteriorate and our financial condition and cash flows could be materially and adversely affected.

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Vessel construction, upgrade, refurbishment and repair projects are subject to risks, including delays and cost overruns, which could have an adverse impact on our available cash resources and results of operations.

We expect to make significant new construction and upgrade, refurbishment and repair expenditures for our vessel fleet from time to time, particularly in light of the aging nature of our vessels and requests for upgraded equipment from our customers. Some of these expenditures may be unplanned. Vessel construction, upgrade, refurbishment and repair projects may be subject to the risks of delay or cost overruns, including delays or cost overruns resulting from any one or more of the following: • unexpectedly long delivery times for, or shortages of, key equipment, parts or materials; • shortages of skilled labor and other shipyard personnel necessary to perform the work; • shipyard delays and performance issues; • failures or delays of third-party equipment vendors or service providers; • unforeseen increases in the cost of equipment, labor and raw materials, particularly steel; • work stoppages and other labor disputes; • unanticipated actual or purported change orders; • disputes with shipyards and suppliers; • design and engineering problems; • latent damages or deterioration to equipment and machinery in excess of engineering estimates and assumptions; • financial or other difficulties at shipyards; • interference from adverse weather conditions; • difficulties in obtaining necessary permits or in meeting permit conditions; and • customer acceptance delays.

Significant cost overruns or delays could materially affect our financial condition and results of operations. Additionally, capital expenditures for vessel construction, upgrade, refurbishment and repair projects could materially exceed our planned capital expenditures. The failure to complete such a project on time, or the inability to complete it in accordance with its design specifications, may, in some circumstances, result in loss of revenues, penalties, or delay, renegotiation or cancellation of a contract. In the event of termination of one of these contracts, we may not be able to secure a replacement contract on as favorable terms. Moreover, our vessels undergoing upgrade, refurbishment and repair activities may not earn revenues during periods when they are out of service.

A change in tax laws could have a material adverse effect on us by substantially increasing our corporate income taxes and, consequently, decreasing our future net income and increasing our future cash outlays for taxes.

As a result of a reorganization completed in 1982, McDermott International, Inc. is a corporation organized under the laws of the Republic of Panama. Subsequent to the completion of the Combination, we established our tax residency in the United Kingdom. Tax legislative proposals intending to eliminate some perceived tax advantages of companies that have legal domiciles outside the U.S. but operate in the U.S. through one or more subsidiaries have been introduced in the U.S. Congress in the past. Examples include, but are not limited to, legislative proposals that would broaden the circumstances in which a non-U.S. company would be considered a U.S. resident for U.S. tax purposes. It is possible that, if legislation were to be enacted in these areas, we could be subject to a substantial increase in our corporate income taxes and, consequently, a decrease in our future net income and an increase in our future cash outlays for taxes. We are unable to predict the form in which any proposed legislation might become law or the nature of regulations that may be promulgated under any such future legislative enactments. For a discussion of the impact of the new U.S. tax legislation on our financial results, see Note 18, Income Taxes, to the accompanying Consolidated Financial Statements.

Our operations are subject to operating risks and limits on insurance coverage and contractual indemnity protections, which could expose us to potentially significant liabilities and costs.

We are subject to a number of risks inherent in our operations, including: • accidents resulting in injury or the loss of life or property;

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• environmental or toxic tort claims, including delayed manifestation claims for personal injury or loss of life; • pollution or other environmental mishaps; • hurricanes, tropical storms and other adverse weather conditions; • mechanical or equipment failures, including with respect to newer technologies; • collisions; • property losses; • business interruption due to political action or terrorism (including in foreign countries) or other reasons; and • labor stoppages.

We have been, and in the future we may be, named as defendants in lawsuits asserting large claims as a result of litigation arising from events such as these. In addition, we design, engineer, procure, construct, install and provide services (including fabrication of pipe, tanks, platforms and other large, complex structures) for large industrial facilities in which system failure can be disastrous. We may be subject to claims resulting from the subsequent operations of facilities we have designed, engineered, constructed or installed or for which we have provided other services. Under some of our contracts, we must use customer-specified metals or processes for producing or fabricating items for our customers. The failure of any of these metals or processes (whether or not customer-specified) could result in warranty claims against us for significant replacement or rework costs, which could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Insurance against some of the risks inherent in our operations is either unavailable or available only at rates that we consider uneconomical. Also, catastrophic events customarily result in decreased coverage limits, more limited coverage, additional exclusions in coverage, increased premium costs and increased deductibles and self- insured retentions. Risks that we have frequently found difficult to cost-effectively insure against include, but are not limited to, business interruption (including from the loss of or damage to a vessel), property losses from wind, flood and earthquake events, war and confiscation or seizure of property (including by act of piracy), acts of terrorism, strikes, riots, civil unrest and malicious damage, pollution liability, liabilities related to occupational health exposures (including asbestos), professional liability, such as errors and omissions coverage, coverage for costs incurred for investigations related to breaches of laws or regulations, the failure, misuse or unavailability of our information systems or security measures related to those systems, and liability related to risk of loss of our work in progress and customer-owned materials in our care, custody and control. Depending on competitive conditions and other factors, we endeavor to obtain contractual protection against certain uninsured risks from our customers. When obtained, such contractual indemnification protection may not be as broad as we desire or may not be supported by adequate insurance maintained by the customer. In addition, we may have difficulty enforcing our contractual rights with others following a material loss. Insurance or contractual indemnity protection may not be sufficient or effective under all circumstances or against all hazards to which we may be subject. A successful claim for which we are not insured, for which we are underinsured or for which our contractual indemnity is insufficient could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

We have captive insurance company subsidiaries which provide us with various insurance coverages. Claims could adversely impact the ability of our captive insurance company subsidiaries to respond to all claims presented.

Additionally, upon the February 2006 consummation of the Chapter 11 proceedings involving several subsidiaries of our former subsidiary, the Babcock & Wilcox Company, most of our then-existing subsidiaries contributed substantial insurance rights providing coverage for, among other things, asbestos and other personal injury claims, to the asbestos personal injury trust. With the contribution of these insurance rights to the asbestos personal injury trust, we may have underinsured or uninsured exposure for non-derivative asbestos claims or other personal injury or other claims that would have been insured under these coverages had the insurance rights not been contributed to the asbestos personal injury trust.

Our failure to successfully defend against claims made against us by customers, suppliers or subcontractors, or our failure to recover adequately on claims made by us against customers, suppliers or subcontractors, could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Our projects generally involve complex design and engineering, significant procurement of equipment and supplies and construction management. We may encounter difficulties in design or engineering, equipment or supply delivery, schedule changes and other factors, some of which are beyond our control, that affect our ability to complete projects in accordance with the original delivery schedules or to meet other contractual performance obligations. We occasionally bring claims against customers for additional costs exceeding contract prices or for amounts not included in original contract prices. These types of claims may arise due to matters such

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as customer-caused delays or changes from the initial project scope, which may result in additional costs, both direct and indirect. From time to time, claims are the subject of lengthy and expensive arbitration or litigation proceedings, and it is often difficult to accurately predict when those claims will be fully resolved. When these types of events occur, and unresolved claims are pending, we may invest significant working capital in projects to cover cost overruns pending the resolution of the claims. In addition, claims may be brought against us by customers in connection with our contracts. Claims brought against us may include back charges for alleged defective or incomplete work, breaches of warranty and/or late completion of the work and claims for cancelled projects. The claims can involve actual damages, as well as contractually agreed-upon liquidated sums. Claims among us and our suppliers and subcontractors include claims similar to those described above. These claims, if not resolved through negotiation, may also become subject to lengthy and expensive arbitration or litigation proceedings. Claims among us, our customers, suppliers and subcontractors could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

In addition, we are from time to time involved in various litigation and other matters related to hazardous substances encountered in our business. In particular, the numerous operating hazards inherent in our business increase the risk of toxic tort litigation relating to any and all consequences arising out of human exposure to hazardous substances, including, without limitation, current or past claims involving asbestos-related materials, formaldehyde, Cesium 137 (radiation), mercury and other hazardous substances, or related environmental damage. As a result, we are subject to potentially material liabilities related to personal injuries or property damages that may be caused by hazardous substance releases and exposures. The outcome of such litigation is inherently uncertain and adverse developments or outcomes can result in significant monetary damages, penalties, other sanctions or injunctive relief against us, limitations on our property rights, or regulatory interpretations that increase our operating costs. If any of these disputes result in a substantial monetary judgment against us or an adverse legal interpretation is settled on unfavorable terms, or otherwise affects our operations, it could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations. we depend on a relatively small number of customers.

We derive a significant amount of our revenues and profits from a relatively small number of customers in a given year. Our significant customers include major integrated and national oil and gas exploration and development companies. Our inability to continue to perform substantial services for our large existing customers (whether due to our failure to satisfy their bid tender requirements, disappointing project performance, the adequacy of our sources of liquidity and credit capacity, changing political conditions and changing laws and policies affecting trade and investment, disagreements with respect to new (or potentially new) ventures or other business opportunities), or delays in collecting receivables from these customers, could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations. we may not be able to compete successfully against current and future competitors.

The industry in which we operate is highly competitive and requires substantial resources and capital investment in equipment, technology and skilled personnel, as well as credit capacity. Several of our competitors have greater financial or other resources than we have. Competition also places downward pressure on our contract prices and margins. Intense competition is expected to continue in our markets, presenting us with significant challenges in our ability to maintain strong growth rates and acceptable margins. In particular, some of our competitors or potential competitors serving the offshore oil and gas exploration and development industry offer a broader range of SPS and SURF services than we provide and have been gaining success in marketing those services on an integrated or “packaged” basis to customers around the world. Our operations may be adversely affected if our current competitors or new market entrants successfully offer SPS and SURF services on an integrated basis in a manner that we may be unable to match, even with our alliance and joint venture arrangements, or introduce new facility designs or improvements to engineering, procurement, construction or installation services. If we are unable to meet these and other competitive challenges, we could lose market share to our competitors and experience reductions in our results of operations and cash flows.

Our employees work on projects that are inherently dangerous. If we fail to maintain safe work sites, we can be exposed to significant financial losses and reputational harm.

Safety is a leading focus of our business, and our safety record is critical to our reputation and is of paramount importance to our employees, customers and stockholders. However, we often work on large-scale and complex projects which can place our employees and others near large mechanized equipment, moving vehicles, dangerous processes or highly regulated materials and in challenging environments. Although we have a functional group whose primary purpose is to implement effective quality, health, safety, environmental and security procedures throughout our company, if we fail to implement effective safety procedures, our employees and others may become injured, disabled or lose their lives, our projects may be delayed and we may be exposed to litigation or investigations.

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Unsafe conditions at project work sites also have the potential to increase employee turnover, increase project costs and raise our operating costs. Additionally, many of our customers require that we meet certain safety criteria to be eligible to bid for contracts, and our failure to maintain adequate safety standards could result in reduced profitability or lost project awards or customers. Any of the foregoing could result in financial losses or reputational harm, which could have a material adverse impact on our business, financial condition and results of operations. we are exposed to potential risks and uncertainties associated with our use of joint venture arrangements and our subcontracting and vendor arrangements to execute certain projects.

In the ordinary course of business, we execute specific projects and conduct certain operations through joint venture, consortium and other collaborative arrangements (collectively referred to as “joint ventures”). We have various ownership interests in these joint ventures, with such ownership typically proportionate to our decision- making and distribution rights. Services may be performed directly by the joint ventures or in combination with us or our co-venturers.

The use of these joint ventures exposes us to a number of risks, including the risk that our co-venturers may be unable or unwilling to provide their share of capital investment to fund the operations of the joint ventures or complete their obligations to us, the joint ventures or, ultimately, the customers. Differences in opinions or views among co-venturers could also result in delayed decision-making or failure to agree on material issues, which could adversely affect the business and operations of the applicable joint venture. In addition, agreement terms may subject us to joint and several liability for our co-venturers, and the failure of our co-venturers to perform their obligations could impose additional performance and financial obligations on us. For example, the contractual arrangements relating to our existing LNG projects provide for joint and several liability of the co-venturers for contractual liabilities to the applicable customers. These factors could result in unanticipated costs to complete projects, liquidated damages or contract disputes, including claims against our co-venturers, any of which could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Additionally, we rely on third parties, including equipment manufacturers and subcontractors, to assist in the completion of our projects. To the extent these parties cannot execute their portion of the work and are unable to deliver their services, equipment or materials according to the contractual terms, or to the extent we cannot engage subcontractors or acquire equipment or materials, our ability to complete a project in a timely manner may be impacted. If the amount we are required to pay for these goods and services exceeds the amount we have included in the estimates for our work, we could experience project losses or a reduction in estimated profitability. we face risks associated with investing in foreign subsidiaries and joint ventures, including the risks that our joint ventures may not be able to effectively or efficiently manage their operations, that joint venture operations create a liability, known or unknown, and that we may be restricted in our ability to access the cash flows or assets of those entities.

We conduct substantial operations through foreign subsidiaries and joint ventures. We do not fully control all of our joint ventures. Even in those joint ventures that we fully control, we may be required to consider the interests of the other joint venture participants in connection with decisions concerning the operations of the joint ventures, which in our belief may not be as efficient or effective as in our wholly owned subsidiaries. We may also be affected by the known or unknown actions or omissions of the joint venture and the other joint venture participants, to the extent that they affect the operations of the applicable joint venture. We may experience difficulties relating to the assimilation of personnel, services and systems in the joint venture’s operations or the appropriate transfer of communications and data between us and the joint venture. Any failure to efficiently and effectively operate a joint venture with the other joint venture participants may cause us to fail to realize the anticipated benefits of entering into the joint venture and could adversely affect our operating results for the joint venture. Also, our foreign subsidiaries and joint ventures sometimes face governmentally imposed restrictions on their ability to transfer funds to us. As a result, arrangements involving foreign subsidiaries and joint ventures may restrict us from gaining access to the cash flows or assets of these entities. Additionally, complexities may arise from the termination of our ownership interests in foreign subsidiaries and joint ventures (whether through a sale of equity interests, dissolution, winding-up or otherwise). Those complexities may include issues such as proper valuations of assets, provisions for resolution of trailing liabilities and other issues as to which we may not be aligned with other owners, participants, creditors, customers, governmental entities or other persons or entities that have relationships with such foreign subsidiaries and joint ventures. Resolution of any such issues could give rise to unanticipated expenses or other cash outflows, the loss of potential new contracts or other adverse impacts on our business, any of which could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

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Our international operations are subject to political, economic and other uncertainties.

We derive substantial revenues from international operations. Our international operations are subject to political, economic and other uncertainties. These include: • risks of war, terrorism, piracy and civil unrest; • public health threats, such as the coronavirus, Severe Acute Respiratory Syndrome, severe influenza and other highly communicable viruses or diseases, that could limit access to our facilities or offices or those of our customers, subcontractors or suppliers, impose travel restrictions on our personnel or otherwise adversely affect our operations or demand for our services; • expropriation, confiscation or nationalization of our assets; • renegotiation or nullification of our existing contracts; • changing political conditions and changing laws and policies affecting trade and investment; • increased costs, lower revenues and RPOs and decreased liquidity resulting from a full or partial break-up of the EU or its currency, the Euro; • the lack of well-developed legal systems in some countries in which we make capital investments, operate or provide services, which could make it difficult for us to enforce our rights; • overlap of multiple tax regimes; • risk of changes in currency exchange rates and currency exchange restrictions that limit our ability to convert local currencies into U.S. dollars; and • risks associated with the assertion of national sovereignty over areas in which our operations are conducted.

We also may be particularly susceptible to regional conditions that may adversely affect our operations. Our major marine construction vessels typically require relatively long periods of time to mobilize over long distances, which could affect our ability to withdraw them from areas of conflict. Additionally, certain of our fabrication facilities are located in regions where conflicts may occur and limit or disrupt our operations. Certain of our insurance coverages could also be cancelled by our insurers. The impacts of these risks are very difficult to cost effectively mitigate or insure against and, in the event of a significant event impacting the operations of one or more of our fabrication facilities, we will very likely not be able to easily replicate the fabrication capacity needed to meet existing contractual commitments, given the time and cost involved in doing so. Any failure by us to meet our material contractual commitments could give rise to loss of revenues, claims by customers and loss of future business opportunities, which could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Various foreign jurisdictions have laws limiting the right and ability of foreign subsidiaries and joint ventures to pay dividends and remit earnings to affiliated companies. Our international operations sometimes face the additional risks of fluctuating currency values, hard currency shortages and controls of foreign currency exchange.

Employee, agent, representative or co-venturer misconduct or our overall failure to comply with laws or regulations could weaken our ability to win contracts, lead to the suspension of our operations and result in reduced revenues and profits.

Misconduct, fraud, non-compliance with applicable laws and regulations, or other improper activities or detrimental business practices by one or more of our employees, agents, representatives or co-venturers (or any of their employees, agents or representatives) could have a significant negative impact on our business and reputation, even if unrelated to the conduct of our business and otherwise unrelated to us. Such misconduct could include the failure to comply with regulations on lobbying or similar activities, regulations pertaining to the internal control over financial reporting and various other applicable laws or regulations. The precautions we and our joint ventures take to prevent and detect fraud, misconduct or failures to comply with applicable laws and regulations may not be effective. A failure by our or any of our joint ventures’ employees, agents or representatives to comply with applicable laws or regulations or acts of fraud or misconduct or other improper activities or detrimental business practices, even if unrelated to the conduct of our business and otherwise unrelated to us, could subject us to fines and penalties, lead to the suspension of operations and/or result in reduced revenues and profits.

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we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act, U.K. Bribery Act, other applicable worldwide anti-corruption laws or our 1976 Consent Decree.

The U.S. Foreign Corrupt Practices Act (“FCPA”) and other applicable worldwide anti-corruption laws generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business. These laws include the U.K. Bribery Act, which is broader in scope than the FCPA, as it contains no facilitating payments exception. Additionally, in 1976 we entered into a Consent Decree with the SEC, which, among other things, forbids us from making payments in the nature of a commercial bribe to any customer or supplier to induce the purchase or sale of goods, services or supplies. We and several of our joint ventures operate in some countries that international corruption monitoring groups have identified as having high levels of corruption. Those activities create the risk of unauthorized payments or offers of payments by one of our employees, agents or representatives (or those of our joint ventures) that could be in violation of the FCPA or other applicable anti-corruption laws. Our training program and policies mandate compliance with applicable anti- corruption laws and the 1976 Consent Decree. Additionally, our global operations include the import and export of goods and technologies across international borders, which requires a robust compliance program. Although we have policies, procedures and internal controls in place to monitor internal and external compliance, we cannot assure that our policies and procedures will protect us from governmental investigations or inquiries surrounding actions of our employees, agents or representatives (or those of our joint ventures). If we or any of our joint ventures are found to be liable for violations of the FCPA, other applicable anti-corruption laws, other applicable laws and regulations or the 1976 Consent Decree (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others), civil and criminal penalties or other sanctions could be imposed, and negative or derivative consequences could materialize, all of which could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Environmental laws and regulations and civil liability for contamination of the environment or related personal injuries may result in increases in our operating costs and capital expenditures and decreases in our earnings and cash flows.

Governmental requirements relating to the protection of the environment, including those requirements relating to solid waste management, air quality, water quality, generation, storage, handling, treatment and disposal of waste materials and cleanup of contaminated sites, as well as laws and regulations relating to human health and safety, have had a substantial impact on our operations. These requirements are complex and subject to frequent change as well as new restrictions. For example, because of concerns that carbon dioxide, methane and certain other so-called “greenhouse gases” in the Earth’s atmosphere may produce climate changes that have significant adverse impacts on public health and the environment, various governmental authorities have considered and are continuing to consider the adoption of regulatory strategies and controls designed to reduce the emission of greenhouse gases resulting from regulated activities, which adoption in areas where we conduct business could require us or our customers to incur added costs to comply, may result in delays in pursuit of regulated activities and could adversely affect demand for the oil and natural gas that some of our customers produce, thereby potentially limiting the demand for our services. Failure to comply with these requirements may result in the assessment of administrative, civil and criminal penalties, the imposition of investigatory or remedial obligations or the issuance of orders enjoining performance of some or all of our operations. In some cases, they can impose liability for the entire cost of cleanup on any responsible party without regard to negligence or fault and impose liability on us for the conduct of others or conditions others have caused, or for our acts that complied with all applicable requirements when we performed them. Our compliance with amended, new or more stringent requirements, stricter interpretations of existing requirements or the future discovery of contamination may require us to make material expenditures or subject us to liabilities that we currently do not anticipate. Such expenditures and liabilities could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

In addition, our businesses often involve working around and with volatile, toxic and hazardous substances and other highly regulated pollutants, substances or wastes, for which the improper characterization, handling or disposal could constitute violations of U.S. federal, state or local laws and regulations and laws of other countries and result in criminal and civil liabilities. Environmental laws and regulations generally impose limitations and standards for certain pollutants or waste materials and require us to obtain permits and comply with various other requirements. Governmental authorities may seek to impose fines and penalties on us, or revoke or deny issuance or renewal of operating permits for failure to comply with applicable laws and regulations. We are also exposed to potential liability for personal injury or property damage caused by any release, spill, exposure or other accident involving such pollutants, substances or wastes.

We may incur liabilities that may not be covered by insurance policies, or, if covered, the financial amount of such liabilities may exceed our policy limits or fall within applicable deductible or retention limits. A partially or completely uninsured claim, if successful and of significant magnitude, could cause us to suffer a significant loss and reduce cash available for our operations.

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Our businesses require us to obtain, and to comply with, government permits, licenses and approvals.

Our businesses are required to obtain, and to comply with, government permits, licenses and approvals. Any of these permits, licenses or approvals may be subject to denial, revocation or modification under various circumstances. Failure to obtain or comply with the conditions of permits, licenses or approvals may adversely affect our operations by temporarily suspending our activities or curtailing our work and may subject us to penalties and other sanctions. Although existing permits and licenses are routinely renewed by various regulators, renewal could be denied or jeopardized by various factors, including: • failure to provide adequate financial assurance for closure; • failure to comply with environmental and safety laws and regulations or permit conditions; • local community, political or other opposition; • executive action; and • legislative action.

In addition, if new environmental legislation or regulations are enacted or implemented, or existing laws or regulations are amended or are interpreted or enforced differently, we may be required to obtain additional operating permits, licenses or approvals. Our inability to obtain, and to comply with, the permits, licenses and approvals required for our businesses could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Our customers’ and our co-venturers’ abilities to receive applicable regulatory and environmental approvals for our projects and the timeliness of those approvals could adversely affect us.

The regulatory permitting process for various of our projects, particularly power projects, requires significant investments of time and money by our customers and sometimes by us and our co-venturers. There are no assurances that we or our customers will obtain the necessary permits for these projects. Applications for permits to operate newly constructed facilities, including air emissions permits, may be opposed by government entities, individuals or environmental groups, resulting in delays and possible non-issuance of the permits. we are subject to government regulations that may adversely affect our future operations.

Many aspects of our operations and properties are affected by political developments and are subject to both domestic and foreign governmental regulations, including those relating to: • constructing and equipping of production platforms and other offshore facilities; • marine vessel safety; • the operation of foreign-flagged vessels in coastwise trade; • currency conversions and repatriation; • oil exploration and development; • clean air and other environmental protection legislation; • taxation of foreign earnings and earnings of expatriate personnel; • required use of local employees and suppliers by foreign contractors; and • requirements relating to local ownership.

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In addition, we depend to a large extent on the demand for certain of our services from the oil and gas exploration and development industry and, therefore, we are generally affected by changing taxes and price controls, as well as new or amendments to existing laws, regulations, or other government controls imposed on the oil and gas exploration and development industry generally, whether due to a particular incident or because of shifts in political decision making. The adoption of laws and regulations curtailing offshore exploration and development drilling for oil and gas for economic and other policy reasons could adversely affect our operations by limiting the demand for our services. In the U.S. Gulf of Mexico, regulatory initiatives developed and implemented at the federal level have imposed stringent safety, permitting and certification requirements on oil and gas companies pursuing exploration, development and production activities, which, at times, have resulted in increased compliance costs, added delays in drilling and a more aggressive enforcement regimen by regulators.

Additionally, certain ancillary activities related to the offshore construction business, including the transportation of personnel and equipment between ports and the fields of work in the same country’s waters, may constitute “coastwise trade” within the meaning of laws and regulations of the U.S. and other countries. Under these laws and regulations, often referred to as cabotage laws, including the Merchant Marine Act of 1920, as amended (the “Jones Act”), in the U.S., only vessels meeting specific national ownership and registration requirements or which are subject to an exception or exemption, may engage in such “coastwise trade.” When we operate our foreign-flagged vessels, we operate within the current interpretation of such cabotage laws with respect to permitted activities for foreign-flagged vessels. Significant changes in cabotage laws or to the interpretation of such laws in the places where we perform offshore activities could affect our ability to operate, or competitively operate, our foreign-flagged vessels in those waters. We are also subject to the risk of the enactment or amendment of cabotage laws in other jurisdictions in which we operate, which could negatively impact our operations in those jurisdictions.

We cannot determine the extent to which our future operations and earnings may be affected by new legislation, new regulations or changes in existing regulations.

The loss of the services of one or more of our key personnel, or our failure to attract, assimilate and retain trained personnel at a competitive cost, or decreased productivity of such personnel, could disrupt our operations and have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Our success depends on the continued active participation of our executive officers and key operating personnel. The unexpected loss of the services of any one of these persons could adversely affect our operations and future operating results. This may adversely affect our ability to attract and retain key personnel, which could adversely affect our performance.

Our operations require the services of employees having the technical training and experience necessary to obtain the proper operational results. As such, our operations depend, to a considerable extent, on the continuing availability and productivity of such personnel. If we should suffer any material loss of personnel to competitors, have decreased labor productivity of employed personnel for any reason, or be unable to employ additional or replacement personnel with the requisite level of training and experience to adequately operate our businesses, our operations could be adversely affected. A significant increase in the wages or other compensation paid by other employers could result in a reduction in our workforce, increases in wage rates, or both. Our industry has historically experienced high demand for the services of employees and escalating wage rates. If any of these events occurred for a significant period of time, they could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations. work stoppages, union negotiations and other labor problems could adversely affect us.

A portion of our employees are represented by labor unions. A lengthy strike or other work stoppage at any of our facilities or involving any of our significant projects could have an adverse effect on us. There is inherent risk that ongoing or future negotiations relating to collective bargaining agreements or union representation may not be favorable to us. From time to time, we also have experienced attempts to unionize some of our nonunion operations. Such efforts can often disrupt or delay work and present risk of labor unrest.

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we rely on intellectual property law and confidentiality agreements to protect our intellectual property. we also rely on intellectual property we license from third parties. Our failure to protect our intellectual property rights, our inability to obtain or renew licenses to use intellectual property of third parties, or the obsolescence of our technology, could adversely affect our business.

We believe that we are an industry leader by owning or having access to our technologies. We protect our technology positions through patent registrations, license restrictions and our research and development program. However, our intellectual property could be challenged, invalidated, circumvented or rendered unenforceable. In addition, effective intellectual property protection may be limited or unavailable in some foreign countries where we operate. Further, our competitors may independently develop or obtain access to technologies that are similar or superior to our technologies.

Our failure to protect our intellectual property rights may result in the loss of valuable technologies or adversely affect our competitive business position. We rely significantly on proprietary technology, information, processes and know-how that are not subject to patent or copyright protection. We seek to protect this information through trade secret or confidentiality agreements with our employees, consultants, subcontractors or other parties, as well as through other security measures. These agreements and security measures may be inadequate to deter or prevent misappropriation of our confidential information. In the event of an infringement of our intellectual property rights, a breach of a confidentiality agreement or divulgence of proprietary or confidential information, we may not have adequate legal remedies to protect our intellectual property or other proprietary and confidential information. Litigation to determine the scope of our legal rights, even if ultimately successful, could be costly and could divert management’s attention away from other aspects of our business.

In some instances, we have augmented our technology base by licensing the proprietary intellectual property of third parties. In the future, we may not be able to obtain necessary licenses on commercially reasonable terms, which could adversely affect our business. we rely on information technology systems and other information technologies to conduct our business, and any failure, interruption or security breach of these systems or technologies could adversely impact us.

In order to achieve our business objectives, we rely heavily on information technology systems and other information technologies, many of which require regular upgrades or improvements and some of which are approaching the point at which they will need to be replaced in the near future. The failure or interruption of these systems or technologies, or the potential implementation of replacements, particularly with respect to our existing key financial and human resources legacy systems, could have a material adverse effect on us. Also, our implementation of new information technology systems or upgrades to existing systems may not result in improvements at the levels anticipated, or at all. In addition, the implementation of new information technology systems or upgrades to existing systems subjects us to inherent costs and risks, including potential disruptions in our business or in our internal control structure, substantial capital expenditures, the alteration, loss or corruption of data, demands on management time and other risks. Any such disruptions or other effects, if not anticipated and appropriately mitigated, could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Our operations are also subject to the risk of cyberattacks and security breaches. Threats to our information technology systems associated with cybersecurity risks and cyber incidents or attacks continue to grow. In addition, a cyberattack or security breach of some of our systems could go undetected for extended periods of time. As a result of a breach or failure of our computer systems or networks, or those of our customers, vendors or others with whom we do business, or a failure of any of those systems to protect against cybersecurity risks, our business operations could be materially interrupted. In addition, any such breach or failure could result in the alteration, loss, theft or corruption of data or unauthorized release of confidential, proprietary or sensitive data concerning our company, business activities, employees, customers or vendors, as well as increased costs to prevent, respond to, or mitigate cybersecurity attacks. These risks could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding data privacy and protection.

The regulatory environment surrounding data privacy and protection is evolving and can be subject to significant change. In addition, new laws and regulations relating to data privacy and the unauthorized disclosure of confidential information, including the European Union General Data Protection Regulation and recent legislation and regulations adopted in the various U.S. jurisdictions, pose complex compliance challenges and may result in increased costs, and any failure to comply with these laws and regulations (or contractual provisions requiring similar compliance) could result in negative publicity and significant penalties or other liabilities. As noted above, we are also subject to the possibility of security and privacy breaches, some of which may result in a violation of these laws. Additionally, if we acquire a company that has violated or is not in compliance with applicable data privacy and protection laws (or contractual provisions), we may experience similar adverse consequences.

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Our business strategy includes acquisitions and joint ventures with other parties to continue our growth. Acquisitions of other businesses and joint ventures can create certain risks and uncertainties.

We intend to pursue additional growth through joint ventures, alliances and consortia with other parties as well as the acquisition of businesses or assets that we believe will enable us to strengthen or broaden the types of projects we execute and also expand into new businesses and regions. We may be unable to continue this growth strategy if we cannot identify suitable joint venture, alliance or consortium participants, businesses or assets, reach agreement on acceptable terms or for other reasons. We may also be limited in our ability to pursue acquisitions or joint ventures by the terms and conditions of our current financing arrangements. Moreover, joint ventures, alliances and consortia and acquisitions of businesses and assets involve certain risks, including: • difficulties relating to the assimilation of personnel, services and systems of an acquired business and the assimilation of marketing and other operational capabilities; • challenges resulting from unanticipated changes in customer, supplier or subcontractor relationships subsequent to an acquisition or joint venture, alliance or consortium formation; • additional financial and accounting challenges and complexities in areas such as tax planning, treasury management, financial reporting and internal controls; • assumption of liabilities of an acquired business or a co-venturer, including liabilities that were unknown at the time the acquisition transaction was negotiated and joint and several liability for failures in performance by our co-venturers; • diversion of management’s attention from day-to-day operations; • failure to realize anticipated benefits, such as cost savings and revenue enhancements; • potentially substantial transaction costs associated with business combinations; and • potential impairment of goodwill or other intangible assets resulting from the overpayment for an acquisition.

Acquisitions and joint ventures may be funded by the issuance of additional equity or new debt financing, which may not be available on attractive terms. Moreover, to the extent an acquisition transaction financed by non-equity consideration results in goodwill, it will reduce our tangible net worth, which might have an adverse effect on potential credit and bonding capacity.

Additionally, an acquisition or joint venture, alliance or consortium may bring us into businesses we have not previously conducted and expose us to additional business risks that are different than those we have historically experienced. we recorded a significant amount of goodwill as a result of the Combination. Subsequent to the Combination Date, we recorded material charges resulting from the impairment of the acquired goodwill. we could record additional material charges if all or a portion of the remaining goodwill became impaired in the future.

In accordance with Accounting Standards Codification Topic ASC 805, Business Combinations, we accounted for the Combination in accordance with the acquisition method of accounting for business combinations. We recorded net tangible and identifiable intangible assets acquired and liabilities assumed from CB&I at their respective fair values as of the date of the closing of the Combination. The excess of the purchase price over the fair value of the identifiable assets of CB&I was recorded as goodwill.

We are required to assess goodwill for impairment at least annually. In conjunction with our 2018 and 2019 impairment assessments, we recorded charges of approximately $2.2 billion and $1.43 billion, respectively. If our remaining goodwill were to become impaired in the future, we may be required to incur additional material charges relating to such impairment. Such a potential impairment charge could have a material adverse effect on our business, financial condition and results of operations. See Note 9, Goodwill and Other Intangible Assets, to the accompanying Consolidated Financial Statements for further discussion.

Our results of operations could be affected by natural disasters in locations in which we and our customers and suppliers operate.

Our customers and suppliers have operations in locations that are subject to natural disasters, such as flooding, hurricanes, tsunamis, earthquakes, volcanic eruptions or other disasters. The occurrence of any of these events and the impacts of such events could disrupt and adversely affect the operations of our customers and suppliers as well as our operations in the areas in which these types of events occur.

34 ITEM 1A. RISK FACTORS

war, other armed conflicts or terrorist attacks could have a material adverse effect on our business.

War, terrorist attacks and unrest have caused and may continue to cause instability in the world’s financial and commercial markets, have significantly increased political and economic instability in some of the geographic areas in which we operate and have contributed to high levels of volatility in prices for oil and gas. Instability and unrest in the Middle East and Asia, as well as threats of war or other armed conflict elsewhere, may cause further disruption to financial and commercial markets and contribute to even higher levels of volatility in prices for oil and gas. In addition, unrest in the Middle East and Asia, or elsewhere, could lead to acts of terrorism in the United States or elsewhere, and acts of terrorism could be directed against companies such as ours. Also, acts of terrorism and threats of armed conflicts in or around various areas in which we operate, such as the Middle East and Asia, could limit or disrupt our markets and operations, including disruptions from evacuation of personnel, cancellation of contracts or the loss of personnel or assets. Armed conflicts and terrorism, and their effects on us or our markets, may significantly affect our business and results of operations in the future.

Risk Factors Relating to Our Liquidity and Capital Resources and Financial Markets we are vulnerable to significant fluctuations in our liquidity that may vary substantially over time.

Our operations could require us to utilize large sums of working capital, sometimes on short notice and sometimes without assurance of recovery of the expenditures. Circumstances or events that could create large cash outflows include increased costs or losses resulting from fixed-price or hybrid contracts, inability to achieve contractual billing or payment milestones, inability to recover unapproved change orders or claims, environmental liabilities, litigation risks, unexpected costs or losses resulting from previous acquisitions, contract initiation or completion delays, political conditions, customer payment problems, foreign exchange risks and professional and product liability claims.

Volatility and uncertainty of the financial markets may negatively impact us.

We intend to finance our existing operations and initiatives, primarily with cash and cash equivalents, investments, cash flows from operations and borrowings from our lenders. We also enter into various financial derivative contracts, including foreign currency forward contracts and interest rate swaps with banks and other financial institutions, to manage our foreign exchange rate risk and interest rate risk. In addition, we maintain our cash balances and short-term investments in accounts held by major banks and financial institutions located globally, and some of those accounts hold deposits that exceed available insurance. If national and international economic conditions deteriorate, it is possible that we may not be able to refinance our outstanding indebtedness when it becomes due, and we may not be able to obtain alternative financing on favorable terms. It is possible that one or more of the financial institutions in which we hold our cash and investments could become subject to bankruptcy, receivership or similar proceedings. As a result, we could be at risk of not being able to access material amounts of our cash, which could result in a temporary liquidity crisis that could impede our ability to fund operations. Some of our customers, suppliers and subcontractors have traditionally accessed commercial financing and capital markets, as well as government backed export credit agency support to fund their operations or projects, and the availability of funding from those sources could be adversely impacted by a volatile credit markets. A deterioration in the credit markets could adversely affect the ability of many of our customers to pursue new projects requiring our services or to pay us on time, and the ability of many of our suppliers and subcontractors to meet our needs on a competitive basis. Our financial derivative contracts involve credit risk associated with our hedging counterparties, and a deterioration in the financial markets, including the markets with respect to any particular currencies, such as the Euro, could adversely affect our hedging counterparties and their abilities to fulfill their obligations to us.

Our debt and related debt service obligations could have negative consequences.

Our debt and related debt service obligations could have negative consequences, including: • requiring us to dedicate significant cash flows from operations to the payment of principal, interest and other amounts payable on our debt, which would reduce the funds we have available for other purposes, such as working capital, capital expenditures and acquisitions; • making it more difficult or expensive for us to obtain any necessary future financing for working capital, capital expenditures, debt service requirements, debt refinancing, acquisitions or other purposes; • reducing our flexibility in planning for or reacting to changes in our industry and market conditions; • making us more vulnerable in the event of a downturn in our business; and • exposing us to increased interest rate risk given that a portion of our debt obligations are at variable interest rates.

35 ITEM 1A. RISK FACTORS

Maintaining adequate letter of credit and bonding capacity is necessary for us to successfully bid on and win various contracts.

In line with industry practice, we are often required to post standby letters of credit to customers or enter into surety bond arrangements in favor of customers. Those letters of credit and surety bond arrangements generally indemnify or protect customers against our failure to perform our obligations under the applicable contracts. However, the terms of those letters of credit, including terms relating to the customer’s ability to draw upon the letter of credit and the amount of the letter of credit required, can vary significantly. If a letter of credit or surety bond is required for a particular project and we are unable to obtain it due to insufficient liquidity or other reasons, we may not be able to pursue that project. We have limited capacity for letters of credit, and we rely substantially on bilateral letters of credit from various issuing banks in a number of foreign markets. Moreover, due to events that affect the credit markets generally, letters of credit may be more difficult to obtain in the future or may only be available at significant additional cost. Letters of credit, including through our bilateral arrangements (which are cancelable in the discretion of the issuing banks), may not continue to be available to us on reasonable terms. Our inability to obtain adequate letters of credit and surety bonds and, as a result, to bid on new work could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Changes in the method of determining the London Interbank Offered Rate (“LIBOR”), or the replacement of LIBOR with an alternative reference rate, may adversely affect interest rates.

It is expected that a number of private-sector banks currently reporting information used to set LIBOR will stop doing so after 2021, when their current reporting commitment ends, which could either cause LIBOR to stop publication immediately or cause LIBOR’s regulator to determine that its quality has degraded to the degree that it is no longer representative of its underlying market. It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after 2021, or whether different benchmark rates used to price indebtedness will develop. Substantial amounts of our outstanding borrowings bear interest at rates tied to LIBOR, and future indebtedness we incur (including pursuant to the Exit Facilities) may similarly bear interest at rates tied to LIBOR. The Exit Facilities are expected to include a mechanism to amend the facilities to reflect the establishment of an alternative rate of interest upon the occurrence of certain events related to the phase-out of LIBOR. However, we have not yet pursued any specific contractual alternative to address this matter and are currently evaluating the impact of the potential replacement of LIBOR. If no such amendment or other contractual alternative is established on or prior to the phase-out of LIBOR, interest on borrowings under the Exit Facilities may bear interest at higher rates based on a prime rate until such amendment or other contractual alternative is established. In addition, to the extent we have entered into interest rate swaps or other derivative instruments for purposes of managing our interest rate exposure, our hedging strategies may not be effective as a result of the replacement or phasing out of LIBOR, and we may incur losses as a result. In addition, the overall financial market may be disrupted as a result of the phase-out or replacement of LIBOR. Disruption in the financial market could have a material adverse effect on our business, cash flows, liquidity, financial condition and results of operations.

Foreign exchange risks and fluctuations may affect our profitability on certain projects.

We operate on a worldwide basis with substantial operations outside the U.S. that subject us to currency exchange risks. In order to manage some of the risks associated with foreign currency exchange rates, we seek to enter into foreign currency derivative (hedging) instruments, especially when there is currency risk exposure that is not naturally mitigated via our contracts. However, these instruments may not always be available to us and, even if available, may not always eliminate all currency risk exposure, in particular for our long-term contracts. A disruption in the foreign currency markets, including the markets with respect to any particular currencies, could adversely affect our hedging instruments and subject us to additional currency risk exposure. We do not enter into derivative instruments for trading or other speculative purposes. Our operational cash flows and cash balances may consist of different currencies at various points in time in order to execute our project contracts globally and meet transactional requirements. Non-U.S. asset and liability balances are subject to currency fluctuations when measured period to period for financial reporting purposes in U.S. dollars.

Pension and post-retirement expenses associated with our retirement benefit plans may fluctuate significantly depending on changes in actuarial assumptions, future market performance of plan assets and legislative or other regulatory actions.

A portion of our current and retired employee population is covered by pension and post-retirement benefit plans, the costs and funding requirements of which depend on various assumptions, including estimates of rates of return on benefit-related assets, discount rates for future payment obligations, rates of future cost growth and trends for future costs. Variances from these estimates could have a material adverse effect on us. In addition, funding requirements for benefit obligations of our pension and post-retirement benefit plans are subject to legislative and other government regulatory actions.

36 ITEM 1A. RISK FACTORS

Risk Factors Relating to Our Common Stock

Our common stock has been delisted from the new york Stock Exchange.

On January 22, 2020, we received written notification from the NYSE that, as a result of the commencement of the Chapter 11 Cases, and in accordance with Section 802.01D of the NYSE Listed Company Manual, the NYSE commenced proceedings to delist our common stock from the NYSE and indefinitely suspended trading of our common stock. On February 6, 2020, the NYSE filed a Form 25 with the SEC to delist our common stock. The delisting was effective 10 days after the Form 25 was filed.

Risks of trading in an over-the-counter market.

Since January 22, 2020, our common stock has been trading on the OTC Pink Marketplace maintained by the OTC Markets Group, Inc., under the symbol “MDRIQ.” Securities traded in the over-the-counter market generally have significantly less liquidity than securities traded on a national securities exchange, due to factors such as a reduction in the number of investors that will consider investing in the securities, the number of market makers in the securities, reduction in securities analyst and news media coverage and lower market prices than might otherwise be obtained. In addition to those factors, the market for the outstanding shares of our common stock has been adversely affected by the provisions of the RSA and the Plan of Reorganization that contemplate that our existing equity interests will be cancelled and discharged in connection with the Chapter 11 Cases and the holders of those equity interests, including the holders of our outstanding shares of common stock, will be entitled to no recovery relating to those equity interests. We can provide no assurance that our common stock will continue to trade on the OTC Pink Marketplace, whether broker-dealers will continue to provide public quotes of our common stock on that market, whether the trading volume of our common stock will be sufficient to provide for an efficient trading market or whether quotes for our common stock will continue to be provided on that market in the future. See “— Risks Related to the Chapter 11 Cases — Trading in our common stock during the pendency of our Chapter 11 Cases is highly speculative and poses substantial risks.”

37 ITEM 1B. UNRESOLVED STAFF COMMENTS

Item 1B. UNRESOLVED STAFF COMMENTS

None.

38 ITEM 2. PROPERTIES

Item 2. PROPERTIES

Real Estate

The following table provides the segment name, location, and principal use of each of our significant properties at December 31, 2019 that we own or lease:

Business Segment and Location Principal Use Owned/Leased NCSA Altamira, Mexico Administrative Office/Fabrication Facility Owned/Leased Charlotte, North Carolina Operations and sales office Leased Clearfield, Utah Fabrication facility Leased Clive, Iowa Fabrication facility Owned El Dorado, Arkansas Fabrication facility Owned Gulfport, Mississippi Administrative Office/Fabrication Facility Leased Houston, Texas Operations office, fabrication facility, warehouse and distribution facility Owned/Leased Houston, Texas Engineering and operations office Leased Lake Charles, Louisiana Fabrication facility Leased New Brunswick, New Jersey Fabrication and distribution facility Leased Niagara-on-the-Lake, Canada Engineering office Leased Plainfield, Illinois Engineering and operations office Owned/Leased Walker, Louisiana Administrative and operations office, fabrication facility and warehouse Owned Tyler, Texas (1) Engineering and operations office Leased EARC Brno, Czech Republic Engineering office Leased London, England Engineering and sales office Leased Moscow, Russia (1) Administrative, operations and sales office Leased The Hague, The Netherlands (1) Administrative, engineering, operations and sales office Leased Feltham, England Engineering office Leased Maputo, Mozambique Project engineering and sales office Leased MENA Abu Dhabi, UAE Operations office and fabrication facility Owned/Leased Al Aujam, Saudi Arabia Fabrication facility and warehouse Owned Al Khobar, Saudi Arabia Operations/Engineering/Administrative Office Leased Askar, Bahrain Operations office and fabrication facility Leased Dammam, Saudi Arabia Fabrication Facility Leased Jubail, Saudi Arabia Operations Office Leased Doha, Qatar Operations/Engineering/Administrative Office Leased Dubai, UAE (1) Operations/Engineering/Fabrication Facility/Administrative Office Leased APAC Batam Island, Indonesia Fabrication Facility Leased Chennai, India Engineering Office Leased Gurgaon, India (1) Engineering Office Leased Kuala Lumpur, Malaysia Operations/Engineering/Administrative Office Leased Kwinana, Australia Operations/Engineering/Administrative Office Owned Perth, Australia Operations and Administrative Office Leased Qingdao, China Fabrication Facility Leased Sattahip, Thailand (1) Operations office and fabrication facility Leased Technology Beijing, China Sales and operations office Leased Bloomfield, New Jersey Administrative, engineering and operations office Leased Ludwigshafen, Germany Research and development office Leased Mannheim, Germany Engineering and operations office Leased Pasadena, Texas Research and development office and manufacturing facility Owned/Leased The Woodlands, Texas Administrative Office Leased Corporate Houston, Texas (1) Administrative Office Leased

(1) These offices also serve our Technology segment.

Fabrication Facility Utilization— During 2019, our actual fabrication facilities utilization was 15 million man-hours compared to 20 million of combined standard man- hours. The combined standard man-hours represent the expected annual utilization of our fabrication facilities.

39 ITEM 2. PROPERTIES

Saudi Aramco Long-Term Lease— In March 2019, pursuant to a Memorandum of Understanding signed between Saudi Aramco and McDermott in 2017, we signed an agreement to enter into a long-term land lease agreement with Saudi Aramco to establish a fabrication facility located within the new King Salman International Complex for Maritime Industries being developed by Saudi Aramco in Ras Al-Khair, Saudi Arabia. Construction activities are now in progress and the new facility is expected to be operational by 2022.

Other—We also lease a number of other, smaller sales, administrative and field construction offices, warehouses and equipment maintenance centers strategically located throughout the world. We consider each of our significant properties to be suitable and adequate for its current and anticipated use.

Vessels

We operate a fleet of construction and multi-service vessels. Our pipelay and derrick vessels are equipped with revolving cranes, auxiliary cranes, welding equipment, pile-driving hammers, anchor winches and a variety of additional equipment. Our multi-service vessels have capabilities which include subsea construction, pipelay, cable lay and dive support. Seven of our owned and/or operated major construction and multi-service vessels are self-propelled. We also have a substantial inventory of specialized support equipment for intermediate water and deepwater construction and pipelay. In addition, we own or lease a substantial number of other vessels, such as tugboats, utility boats, launch barges and cargo barges, to support the operations of our major marine construction vessels.

The following table sets forth certain information with respect to the major construction and multi-service vessels currently utilized to conduct our operations, including the reporting segments in which they were operating as of December 31, 2019:

Maximum Year Entered Derrick Lift Maximum Pipe Location and Vessel Name Vessel Type Service/Upgraded (tons) Diameter (inches) NCSA DB 50(1)(2) Pipelay/Derrick 1988/2012 4,400 - Intermac 650(2) Launch/Cargo Barge 1980/2006 - - Amazon(1)(3)(5) Multi-Service Vessel 2014 880 -

MENA DB 27(2) Pipelay/Derrick 1974/1984 2,400 60 DB 32(2) Pipelay/Derrick 2010/2013 1,650 60 Thebaud Sea(1)(2)(6) Multi-Service Vessel 1999/2010 55 - Emerald Sea(1)(2) Multi-Service Vessel 1996/2007 110 -

APAC LV 108(1)(2) Multi-Service Vessel 2014 440 - DLV 2000(1)(2) Multi-Service Vessel 2016 2,200 60 North Ocean 105(1)(3)(4) Multi-Service Vessel 2012 440 16 North Ocean 102(1)(2) Multi-Service Vessel 2009 275 - DB 30(3) Pipelay/Derrick 1975/1999 3,080 60

(1) Vessel with dynamic positioning capability. (2) Vessels subject to mortgages securing our outstanding secured indebtedness and letter of credit obligations. (3) Vessels not subject to mortgages. (4) North Ocean 105 (“NO 105”) is currently subject to a mortgage securing indebtedness of the entity that owns that vessel. For further discussion see Note 13, Debt, to the accompanying Consolidated Financial Statements. (5) Leased vessel. (6) Thebaud Sea was no longer in service as of December 31, 2019 due to a strategic decision to scrap the vessel. See Note 16, Fair Value Measurements, to the accompanying Consolidated Financial Statements, for impairment discussion.

As security for the indebtedness under our Credit Agreement, the Letter of Credit Agreement, the Superpriority Credit Agreement and the DIP Credit Agreement, we have pledged all of the capital stock of our subsidiaries that own the vessels that are mortgaged to secure that indebtedness.

During 2019, our actual offshore and subsea vessels utilization was 1,170 and 660 days, compared to 1,500 and 1,250 of combined standard days, respectively. The combined standard days is the expected annual utilization of our vessels.

Governmental regulations, our insurance policies and some of our financing arrangements require us to maintain our vessels in accordance with standards of seaworthiness and safety set by applicable governmental authorities or classification societies, such as American Bureau of Shipping, Den Norske Veritas, Lloyd’s Register of Shipping and other world-recognized classification societies.

40 ITEM 3. LEGAL PROCEEDINGS

Item 3. LEGAL PROCEEDINGS

The information set forth under the heading “Investigations and Litigation” in Note 23, Commitments and Contingencies, to the accompanying Consolidated Financial Statements included in this Annual Report on Form 10-K is incorporated by reference into this Item 3.

For information, on the Chapter 11 Cases, see Item 1. “Business—Recent Developments—Restructuring Support Agreement and Chapter 11 Proceedings,” which information is incorporated herein by reference.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

41 ITEM 6. SELECTED FINANCIAL DATA

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Stock Information

General—On December 13, 2019, the NYSE notified us that we no longer satisfied the continued listing compliance standards of the NYSE Listed Company Manual because the average closing price of McDermott’s common stock, par value $1.00 per share, was below $1.00 over a 30 consecutive trading-day period that ended December 13, 2019.

On January 22, 2019, the NYSE notified us that, as a result of the commencement of the Chapter 11 Cases, and in accordance with Section 802.01D of the NYSE Listed Company Manual, the NYSE commenced proceedings to delist our common stock from the NYSE and indefinitely suspended trading of our common stock. On February 6, 2020, the NYSE filed a Form 25 with the SEC to delist our common stock from the NYSE. The delisting was effective 10 days after the Form 25 was filed. As a result, trading in our common stock currently is available only in the over-the-counter market on the OTC Pink Marketplace maintained by the OTC Markets Group, Inc., under the symbol “MDRIQ.” Securities traded in the over-the-counter market generally have significantly less liquidity than securities traded on a national securities exchange. Over-the-counter market quotations may reflect inter-dealer prices, without any retail mark-up, mark-down or commission and may not necessarily represent actual transactions. As of February 26, 2020, there were approximately 1,928 holders of record of shares of our common stock.

Dividends—We have not paid cash dividends on our common stock since the second quarter of 2000 and do not currently have plans to reinstate a cash dividend.

Effects of the Chapter 11 Cases on the Common Stock — The provisions of the RSA and the Plan of Reorganization contemplate that our existing equity interests will be cancelled and discharged in connection with the Chapter 11 Cases and the holders of those equity interests, including the holders of our outstanding shares of common stock, will be entitled to no recovery relating to those equity interests.

Equity Compensation Plan Information

Number of Securities to Weighted-Average be Issued Upon Exercise Exercise Price of Number of Securities

of Outstanding Options, Outstanding Options, Remaining Available for Plan Category Warrants and Rights Warrants and Rights Future Issuance (In whole shares) Equity compensation plans approved by security holders: 3,209,912 Stock options and stock appreciation rights (1) 316,517 $ 31.24 Other equity compensation awards (2) 5,248,641 N/A

Equity compensation plans not approved by security holders N/A N/A N/A 5,565,158 3,209,912 Total

(1) As of December 31, 2019, there were approximately 316,517 shares of common stock reserved for issuance upon the exercise of outstanding options and stock appreciation rights. The weighted-average exercise price reflects only the weighted-average exercise price of stock options and stock appreciation rights outstanding. (2) As of December 31, 2019, there were approximately 5,248,641 securities reserved for issuance upon vesting of outstanding restricted stock units or performance units. Certain award agreements for the legacy McDermott awards of restricted stock units granted in 2017, 2018 and 2019, the performance units granted in 2017 (which have since been converted to restricted stock units) and the performance units granted in 2018 and 2019 provide that the awards may be settled in shares, cash equal to the fair market value of the shares otherwise deliverable on the vesting date, or any combination thereof in the sole discretion of the Compensation Committee. There is no exercise price associated with the awards of restricted stock units or performance units. The award agreements for the legacy CB&I awards of restricted stock units outstanding may only be settled in shares of common stock.

The provisions of the RSA and the Plan of Reorganization contemplate that securities to be issued as part of equity compensation plans will be cancelled and discharged in connection with the Chapter 11 Cases.

42 ITEM 6. SELECTED FINANCIAL DATA

Corporate Performance Graph

The following graph provides a comparison of our five-year, cumulative total stockholder return(1) from December 2014 through December 2019 to the return of S&P 500 and our 2019 peer group. Our peer group consists of companies utilized for executive compensation benchmarking. All companies from the 2019 peer group were also included in the 2018 peer group.

(1) Total stockholder return assuming $100 invested on December 31, 2014 and reinvestment of dividends on daily basis.

The 2019 peer group was comprised of the following companies:

● AECOM ● Mastec, Inc.

● Dover Corporation ● National Oilwell Varco, Inc.

● Fluor Corporation ● Parker-Hannifin Corporation

● EMCOR Group, Inc. ● Quanta Services, Inc.

● Ingersoll-Rand plc ● Stanley Black & Decker, Inc.

● Jacobs Engineering Group Inc. ● Weatherford International plc

● KBR, Inc.

43 ITEM 6. SELECTED FINANCIAL DATA

Item 6. SELECTED FINANCIAL DATA

The following selected financial data was derived from our Consolidated Financial Statements. This data should be read in conjunction with the accompanying Consolidated Financial Statements, and related notes thereto and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

For the Years Ended December 31, 2019 2018 (1) 2017 2016 2015 (Dollars in millions, except for per share amounts) Statement of Operations Data: Revenues $ 8,431 $ 6,705 $ 2,985 $ 2,636 $ 3,070 Project intangibles and inventory related amortization (2) 34 83 - - - Other intangibles amortization (3) 87 62 - - - Transaction costs (4) 57 48 9 - - Restructuring and integration costs (5) 114 134 - 11 41 Goodwill impairment (6) 1,430 2,168 - - - Intangible assets impairment (7) 162 - - - - Other asset impairment (8) 18 58 1 55 7

Operating (loss) income (2,082) (2,256) 307 138 121

Net (loss) income (2,884) (2,678) 178 36 (9) Less: net income (loss) attributable to noncontrolling 25 9 (1) 2 9 interest Net (loss) income attributable to McDermott (2,909) (2,687) 179 34 (18) Dividends on redeemable preferred stock (9) (44) (3) - - - Accretion of redeemable preferred stock (10) (16) (1) - - - Net (loss) income attributable to common stockholders $ (2,969) $ (2,691) $ 179 $ 34 $ (18)

Net (loss) income per share attributable to common stockholders Basic $ (16.31) $ (17.94) $ 1.97 $ 0.43 $ (0.23) Diluted $ (16.31) $ (17.94) $ 1.88 $ 0.36 $ (0.23)

Other Data: Cash and cash equivalents $ 800 $ 520 $ 390 $ 596 $ 665 Total assets 8,737 9,440 3,223 3,222 3,387 Current debt (11) 5,107 30 24 48 24 Long-term debt - 3,393 512 701 815 Long-term lease obligations 304 66 1 2 2 Redeemable preferred stock 290 230 - - - Total stockholders' equity (2,143) 823 1,789 1,595 1,547 Total cash (used in) provided by operating activities (976 ) (71) 136 178 55 RPO (12) 18,638 10,913 3,901 4,322 4,231 New awards 16,150 5,649 2,564 2,726 3,701 Number of employees: Salaried 14,400 14,600 5,000 7,800 6,400 Hourly and craft 28,200 17,300 10,000 5,200 4,700

(1) Results for 2018 reflect impacts of the Combination from the Combination Date. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operating Results,” for further discussion and quantification of impacts of the Combination on 2018 results. (2) Represents amortization of fair value adjustments for RPOs acquired in the Combination and normalized profit margin fair value associated with acquired long-term contracts that were deemed to be lower than market value as of the Combination Date. Also included is amortization associated with fair value adjustments to inventory balances acquired in the Combination.

44 ITEM 6. SELECTED FINANCIAL DATA

(3) Represents amortization of other intangible assets acquired in the Combination. See Note 9, Goodwill and Other Intangible Assets, to the accompanying Consolidated Financial Statements for further discussion. (4) 2019—primarily relates to legal and professional fees associated with the sale processes for the pipe fabrication business and the Lummus Technology business and the now-terminated effort to sell our industrial storage tanks business, as well as professional and other fees associated with the Chapter 11 Cases. 2018—primarily relates to professional service fees (including audit, legal and advisory services) associated with the Combination. See Note 3, Business Combination, to the accompanying Consolidated Financial Statements for further discussion. (5) Primarily relates to costs to achieve our profitability initiatives. See Note 12, Restructuring and Integration Costs, to the accompanying Consolidated Financial Statements for further discussion. (6) Represents impairment of goodwill resulting from our impairment assessment. See Note 9, Goodwill and Other Intangible Assets, to the accompanying Consolidated Financial Statements for further discussion. (7) Represents impairment of intangible assets, primarily in our NCSA segment. See Note 9, Goodwill and Other Intangible Assets, to the accompanying Consolidated Financial Statements for further discussion. (8) During 2019 and 2018 we recorded charges associated with the impairment of certain marine assets within our Corporate operating group due to changes in their level of planned utilization. See Note 16, Fair Value Measurements, to the accompanying Consolidated Financial Statements for further discussion. (9) Represents dividends on shares of 12% Redeemable Preferred Stock we issued on November 29, 2018. See Note 21, Redeemable Preferred Stock, to the accompanying Consolidated Financial Statements for further discussion. (10) Represents accretion of the 12% Redeemable Preferred Stock. See Note 21, Redeemable Preferred Stock, to the accompanying Consolidated Financial Statements for further discussion. (11) As of December 31, 2019, current debt included $801 million of revolving credit facility indebtedness. As a result of the debt covenant compliance matters and substantial doubt regarding our ability to continue as a going concern, we determined that the classification of all of our long-term debt obligations, including finance lease obligations, was current as of December 31, 2019. See Note 13, Debt, to the accompanying Consolidated Financial Statements, for further discussion. (12) Represents the amount of revenues we expect to recognize in the future from our contract commitments on projects. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook—Remaining Performance Obligations,” and Note 5, Revenue Recognition, to the accompanying Consolidated Financial Statements for further discussion.

45 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Statements we make in the following discussion which express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements that are subject to risks, uncertainties and assumptions. Our actual results, performance or achievements, or industry results, could differ materially from those we express in the following discussion as a result of a variety of factors, including the risks and uncertainties we have referred to under the headings “Cautionary Statement Concerning Forward-Looking Statements” and “Risk Factors” in Items 1 and 1A of Part I of this Annual Report on Form 10-K.

This section of this Form 10-K generally discusses 2019 and 2018 items and year-to-year comparisons between 2019 and 2018. Discussions of 2017 items and year-to- year comparisons between 2018 and 2017 are not included in this Form 10-K and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Company Overview

Overview

We are a fully integrated provider of engineering, procurement, construction and installation (“EPCI”) and technology solutions to the energy industry and design and build end-to-end infrastructure and technology solutions to transport and transform oil and gas into a variety of products. Our customers include national, major integrated and other oil and gas companies as well as producers of petrochemicals and electric power. Our proprietary technologies, integrated expertise and comprehensive solutions are utilized for liquefied natural gas (“LNG”), power, offshore and subsea, and downstream (includes downstream oil and gas processing facilities and licensed technologies and catalysts) energy projects around the world. We execute our contracts through a variety of methods, principally fixed-price, but also including cost reimbursable, cost-plus, day-rate and unit-rate basis or some combination of those methods. Contracts are usually awarded through a competitive bid process.

46 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Recent Developments

Restructuring Support Agreement and Chapter 11 Proceedings

47 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

thirds of all of their funded debt creditors for the RSA. The Chapter 11 Cases are being jointly administered under the caption In re McDermott International, Inc., Case No. 20-30336. The Debtors continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

In connection with the RSA and the Chapter 11 Cases, certain Consenting Parties or their affiliates have provided the Debtors with superpriority debtor-in-possession financing pursuant to a new credit agreement (the “DIP Credit Agreement”). The DIP Credit Agreement provides for, among other things, term loans and letters of credit in an aggregate principal amount of up to $2.81 billion, including (1) up to $2,067 million under a term loan facility consisting of (a) a $550 million tranche that was made available at closing, (b) a $650 million tranche that was made available upon entry of the Final DIP Order (as defined in the RSA), (c) a $823 million tranche consisting of the principal amount of term loans outstanding under Tranche A and Tranche B of the New Term Loan Facility under our Superpriority Credit Agreement and accrued interest and fees related to term loans outstanding under Tranche A and Tranche B of the New Term Loan Facility under our Superpriority Credit Agreement and the New LC Facility under our Superpriority Credit Agreement, in each case that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order and (d) a $44 million tranche consisting of the make-whole amount owed to the lenders under our Superpriority Credit Agreement that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order (the “DIP Term Facility”) and (2) up to $743 million under a letter of credit facility consisting of (a) $300 million made available at closing, (b) $243 million that was made available upon entry of the Final DIP Order and (c) $200 million amount of term loans outstanding under Tranche A and Tranche B of the New LC Facility under our Superpriority Credit Agreement that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order (the “DIP LC Facility” and, together with the DIP Term Facility, the “DIP Facilities”). The Final DIP Order was entered by the Bankruptcy Court on February 24, 2020.We intend to use proceeds of the DIP Facilities to, among other things: (1) pay certain fees, interest, payments and expenses related to the Chapter 11 Cases; (2) pay adequate protection payments; (3) fund our working capital needs and expenditures during the Chapter 11 proceedings; (4) fund the Carve-Out (as defined below), which accounts for certain administrative, court and legal fees payable in connection with the Chapter 11 Cases; and (5) pay fees and expenses related to the transactions contemplated by the DIP Facilities.

In addition to the DIP Facilities, the RSA contemplates that, on the Effective Date, the Debtors will (1) conduct the Rights Offering (as defined and described under “– Liquidity and Capital Resources”) and (2) enter into the “Exit Facilities (as defined and described under “–Liquidity and Capital Resources”). Accordingly, consummation of the Plan of Reorganization will require that the Debtors meet all of the conditions to completion of the Exit Facilities.

48 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• holders of claims arising under the (1) 2021 LC Facility (as defined in the Plan of Reorganization), (2) the 2023 LC Facility (as defined in the Plan of Reorganization), (3) the Revolving Credit Facility (as defined in the Plan of Reorganization) and (4) the Lloyds’ LC Facility (as defined in the Plan of Reorganization) shall receive participation rights in the Roll-Off LC Exit Facility (as defined in the Plan of Reorganization) or receive their respective pro rata shares of the Secured Creditor Funded Debt Distribution (as defined in the Plan of Reorganization), depending upon the nature of such claims; • holders of claims arising under the Term Loan Facility and Credit Agreement Hedging Claims (as defined in the Plan of Reorganization) other than hedging obligations rolled into the DIP Facilities and the Exit Facilities, will receive pro rata shares of the Secured Creditor Funded Debt Distribution; • holders of claims arising under the Senior Notes will receive their pro rata shares of (a) 6% of the new common equity interests in the reorganized McDermott (the “New Common Stock”), plus additional shares of New Common Stock as a result of the Prepetition Funded Secured Claims Excess Cash Adjustment (as defined in the Plan of Reorganization), subject to dilution on account of the New Warrants and a new Management Incentive Plan (each as defined in the RSA); and (b) the New Warrants; • holders of general unsecured claims shall either (1) have their claims reinstated or (2) be paid in full in cash; • each existing equity interest in any of the Debtors other than McDermott shall be reinstated or cancelled, released and extinguished without any distribution at the Debtors’ election and with the consent of the Required Consenting Lenders (as defined in the Plan of Reorganization); and • each existing equity interest in McDermott will be cancelled, released and extinguished without any distribution.

Debtor-in-Possession Financing

49 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Adjusted EBITDA Test Period End Date (In millions) June 30, 2020 230 September 30, 2020 410 December 31, 2020 640

Maximum Project Charges Test Period End Date (In millions) December 31, 2019 260 March 31, 2019 50 June 30, 2020 50 September 30, 2020 40 December 31, 2020 30

50 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As of December 31, 2019, we were in compliance with our maximum project charges covenant under the DIP Facilities.

Going Concern and Financial Reporting in Reorganization

Delisting of our Common Stock from the New York Stock Exchange

Business Segments

Following completion of the Combination, during the second quarter of 2018, we reorganized our operations into five business segments. This reorganization is intended to better serve our global clients, leverage our workforce, help streamline operations and provide enhanced growth opportunities. Our five business segments, which represent our reportable segments are: North, Central & South America (“NCSA”); Europe, Africa, Russia & the Caspian (“EARC”); Middle East & North Africa (“MENA”); Asia Pacific (“APAC”); and Technology. The segment information presented for the prior periods has been recast to conform to the 2018 presentation. We also report certain corporate and other non-operating activities under the heading “Corporate and Other.” Corporate and Other primarily reflects costs that are not allocated to our segments. For financial information about our segments, see Note 24, Segment Reporting, to the accompanying Consolidated Financial Statements. • NCSA—Our NCSA segment designs, engineers and constructs upstream offshore oil and gas facilities, downstream oil & gas facilities and pipelines, gas-fired power plants, LNG import and export terminals, atmospheric and refrigerated storage vessels and terminals and water storage and treatment facilities and performs pipe and module fabrication. Our December 31, 2019 RPOs composition by product offering was 55% LNG, 32% Downstream, 10% Offshore & Subsea and 3% Power. We anticipate the majority of future opportunities over the intermediate term are likely to be in the U.S. LNG and petrochemical markets. Our December 31, 2019 RPOs distribution for this segment by contracting type was approximately 90% fixed-price and hybrid and 10% cost- reimbursable and other. • EARC―Our EARC segment designs, engineers and constructs upstream offshore oil and gas facilities, downstream oil and gas facilities and pipelines, LNG import and export terminals and atmospheric and refrigerated storage vessels and terminals. Our December 31, 2019 RPOs composition by product offering was 70% LNG, 20% Offshore & Subsea and 10% Downstream and was primarily comprised of fixed-price contracts. We anticipate the majority of future opportunities over the intermediate term are likely to be in the downstream oil & gas markets in Russia and upstream and LNG projects in Africa.

51 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• MENA―Our MENA segment designs, engineers and constructs upstream and downstream offshore oil and gas facilities and pipelines, hydrocarbon processing facilities, atmospheric and refrigerated storage vessels and terminals, and performs pipe fabrication and manufacturing. Our December 31, 2019 RPOs composition by product offering was 93% Offshore & Subsea and 7% Downstream and was primarily comprised of fixed-price contracts. We anticipate the majority of future opportunities over the intermediate term are likely to be in the Middle East offshore market. • APAC—Our APAC segment designs, engineers and constructs upstream offshore oil and gas facilities and pipelines, refining and petrochemical facilities, hydrocarbon processing facilities, LNG import and export terminals and atmospheric and refrigerated storage vessels and terminals. Our December 31, 2019 RPOs composition by product offering was 97% Offshore & Subsea and 3% Downstream, which was primarily comprised of fixed-price contracts. We anticipate the majority of future opportunities over the intermediate term are likely to be in India and Australia. • Technology―Our Technology segment is a leading technology licensor of proprietary gas processing, refining, petrochemical and coal gasification technologies as well as a supplier of proprietary catalysts, equipment and related engineering services. These technologies are critical in the refining of crude oil into gasoline, diesel, jet fuel and lubes, the manufacturing of petrochemicals and polymers, as well as the gasification of coal into syngas. The Technology segment also has a 50% owned unconsolidated joint venture that provides proprietary process technology licenses and associated engineering services and catalysts, primarily for the refining industry. Our December 31, 2019 RPOs composition for this segment was 100% Downstream and primarily comprised of fixed-price contracts.

Subsequent to December 31, 2019, we entered into the SAPA, providing for the sale of the equity interests in our subsidiaries that conduct our Technology business. See “Restructuring Support Agreement and Chapter 11 Proceedings” above.

Loss Projects

Our accrual of provisions for estimated losses on active uncompleted contracts as of December 31, 2019 was $124 million and included $45 million related to the Cameron LNG project. Our accrual of provisions for estimated losses on active uncompleted contracts as of December 31, 2018 was $266 million and primarily related to the Cameron LNG, Freeport LNG Trains 1 & 2, Calpine and Abkatun-A2 projects. Our Freeport LNG Train 3 project is not anticipated to be in a loss position.

Our subsea pipeline flowline installation project in support of the Ayatsil field offshore Mexico for Pemex (“Line 1 and Line 10”), Asheville power plant project for a unit of Duke Energy Corp. and pipeline design and EPCI project for Rota 3 gas export system in Brazil (“Rota 3 pipeline project”) were also determined to be in substantial loss positions as of December 31, 2019, as discussed further below. The Abkatun-A2 project was substantially completed as of December 31, 2019.

For purposes of the discussion below, when we refer to a percentage of completion on a cumulative basis, we are referring to the cumulative percentage of completion, which includes progress made prior to the Combination Date. In accordance with U.S. GAAP, as of the Combination Date, we reset the progress to completion for all of CB&I’s projects then in progress to 0% for accounting purposes based on the remaining costs to be incurred as of that date.

Summary information for our significant ongoing loss projects as of December 31, 2019 is as follows:

Cameron LNG―At December 31, 2019, our U.S. LNG export facility project in Hackberry, Louisiana for Cameron LNG (being performed by our NCSA operating group) was approximately 87% complete on a post-Combination basis (approximately 96% on a cumulative basis) and had an accrued provision for estimated losses of approximately $45 million. During 2019, we recognized approximately $180 million of increases in cost estimates on this project, primarily resulting from poor labor productivity and increases in construction and subcontractor costs. The impact of this charge was offset by recognition in 2019 of $200 million of incentives related to the projected achievement of progress milestones.

Freeport LNG―At December 31, 2019, Trains 1 & 2 of our U.S. LNG export facility project in Freeport, Texas for Freeport LNG (being performed by our NCSA operating group) were approximately 97% complete on a post-Combination basis (approximately 99% on a cumulative basis) and had an accrued provision for estimated losses of approximately $8 million. During 2019, the project was negatively impacted by $127 million of increases in cost estimates, primarily resulting from increases in construction and subcontractor costs. During 2019, we also recognized approximately $5 million of incentive revenues on this project.

During 2019, Freeport LNG Train 3 was negatively impacted by $8 million of changes in cost estimates and remained in the profitable position as of December 31, 2019.

52 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

During 2019, the Freeport LNG project, as a whole, had an overall negative $130 million impact on operating margin.

Rota 3 pipeline project―As of December 31, 2019, our project in Brazil involving the design and detailed engineering, procurement, construction and installation of a rigid concrete coated gas pipeline export system (being performed by our NCSA operating group) was approximately 66% complete and had an accrued provision for estimated losses of approximately $26 million. During the third and fourth quarters of 2019, the project was negatively impacted by charges of $78 million, primarily due to changes in cost estimates and additional charges associated with equipment downtime. The project is expected to be completed in the second quarter of 2020.

Asheville power plant project―As of December 31, 2019, our power project located in Arden, North Carolina (being performed by our NCSA operating group) was approximately 98% complete and had an accrued provision for estimated losses of approximately $1 million. During 2019, the project was negatively impacted by charges of $97 million, net, primarily due to increases in labor and subcontractor costs, partially offset by a settlement of a claim. The project is expected to be completed in the first quarter of 2020.

Line 1 and Line 10―As of December 31, 2019, our subsea pipeline flowline installation project in support of the Ayatsil field offshore Mexico (being performed by our NCSA operating group) was approximately 99% complete and had an accrued provision for estimated losses of approximately $1 million. During 2019, the project was negatively impacted by $32 million of changes in cost estimates associated with unexpected schedule extensions, resulting in additional vessel and labor costs. The project is expected to be completed in the first quarter of 2020.

Goodwill Impairment

During the third quarter of 2019, we experienced significant and sustained deterioration in our enterprise market capitalization due to a decline in the trading price of our common stock. In addition, during the third quarter of 2019, we recognized incremental unfavorable changes in cost estimates to complete the Cameron and Freeport LNG projects (see Note 5, Revenue Recognition, and Note 6, Project Changes in Estimates, to the accompanying Consolidated Financial Statements), which resulted in a deterioration in our future cash flow expectations and an increase in our associated risk assumptions. As a result of these triggering events and circumstances, we determined that it was more likely than not that the fair values of our reporting units were below their respective carrying values. Accordingly, we performed an interim quantitative impairment assessment as of August 31, 2019 on our NCSA, EARC, MENA and Technology reporting units. Based on our assessments, goodwill for our NCSA reporting unit was fully impaired, and goodwill for our EARC reporting unit was partially impaired by $259 million. We determined the goodwill associated with our MENA and Technology reporting units was not impaired, as the fair value of each such reporting unit exceeded its net book value by more than 96% and 28%, respectively.

During the fourth quarter of 2019, we identified additional indicators of impairment related to the goodwill allocated to our EARC reporting unit, primarily driven by further deterioration in the reporting unit’s actual financial performance during 2019, reduced attributable cash flows reflected in our 2020 management budget and an increase in our discount rate assumption from 33.5% to 35.5%, resulting in further impairment of EARC goodwill by $60 million.

See Note 9, Goodwill and Other Intangible Assets, to the accompanying Consolidated Financial Statements and under the caption “—Critical Accounting Policies and Estimates—Goodwill” below for further discussion.

Outlook

Business Outlook

The demand for our services is affected to a large extent by the capital expenditure decisions of oil and gas producers, petrochemical firms and producers of electric power. Material movements in oil and natural gas prices have affected, and will likely continue to affect, the demand for and pricing of our EPCI services. Many of our customers make their capital expenditure decisions based on their long-term view of energy and petrochemical demand and the economics of specific projects. We operate in most major energy and petrochemical producing regions of the world, work on both new and existing projects and provide services that require a varying amount of technical complexity. As a result, the economics of specific projects that we provide services for varies considerably.

Many energy companies reduced, deferred or otherwise constrained their infrastructure spending in recent years. We now believe that the industry may be approaching a point at which the global balance between supply and demand is beginning to tighten, a cyclical trend that historically has led to an improved market environment for us.

53 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In the current environment, we will continue to maintain our focus on delivering complete, innovative solutions as a trusted global service provider, enabling our customers to maximize the potential of natural resources. Our specific objectives include efficient execution and asset utilization, risk management and cost and liquidity management.

Review of Business Portfolio and Strategic Transactions

Remaining Performance Obligations

RPOs represent the amount of revenues we expect to recognize in the future from our contract commitments on projects. RPOs include the entire expected revenue values for joint ventures we consolidate and our proportionate values for consortiums we proportionately consolidate. We do not include expected revenues of contracts related to unconsolidated joint ventures in our RPOs, except to the extent of any subcontract awards we receive from those joint ventures.

RPOs for each of our segments can consist of up to several hundred contracts. These contracts vary in size from less than one hundred thousand dollars in contract value to several billion dollars, with varying durations that can exceed five years. The timing of awards and differing types, sizes and durations of our contracts, combined with the geographic diversity and stages of completion of the associated projects, often results in fluctuations in our quarterly segment results as a percentage of total revenue. RPOs may not be indicative of future operating results, and projects in our RPOs may be cancelled, modified or otherwise altered by customers. We can provide no assurance as to the profitability of our contracts reflected in RPOs. It is possible that our estimates of profit could increase or decrease based on, among other things, changes in productivity, actual downtime and the resolution of change orders and claims with the customers, and therefore our future profitability is difficult to predict.

The timing of our revenue recognition may be impacted by the contracting structure of our contracts. Under fixed-price contracts, we perform our services and execute our projects at an established price. Fixed-price contracts, and hybrid contracts with a more significant fixed-price component, tend to provide us with greater control over project schedule and the timing of when work is performed and costs are incurred, and, accordingly, when revenue is recognized. Under cost-reimbursable contracts, we generally perform our services in exchange for a price that consists of reimbursement of all customer-approved costs and a profit component, which is typically a fixed rate per hour, an overall fixed fee or a percentage of total reimbursable costs. Cost-reimbursable contracts, and hybrid contracts with a more significant cost- reimbursable component, generally provide our customers with greater influence over the timing of when we perform our work, and, accordingly, such contracts often result in less predictability with respect to the timing of revenue recognition. Our shorter-term contracts and services are generally provided on a cost-reimbursable, fixed- price or unit price basis.

Our RPOs by business segment as of December 31, 2019 and 2018 were as follows:

December 31, 2019 (1) December 31, 2018 Change (2) (Dollars in millions) NCSA $ 7,070 38% $ 5,649 52% $ 1,421 25% EARC 3,415 18% 1,378 12% 2,037 148% MENA 6,047 33% 1,834 17% 4,213 230% APAC 1,487 8% 1,420 13% 67 5% Technology 619 3% 632 6% (13) -2% Total $ 18,638 100% $ 10,913 100% $ 7,725 71%

(1) Approximately 66% of our RPOs as of December 31, 2019 were derived from projects outside the United States. (2) Our RPOs increased by $7.7 billion from December 31, 2018 due to new awards and change orders of approximately $16.1 billion exceeding the recognition of revenues of $8.4 billion.

54 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Of the RPOs as of December 31, 2019, we expect to recognize revenues as follows:

2020 2021 Thereafter (In millions) $ 9,512 $ 4,959 $ 4,167 Total RPOs

Operating Results

2019

RPO—Our RPOs as of December 31, 2019 were approximately $18.6 billion and included the following significant 2019 awards: a construction project to build an LNG export terminal, awarded by Golden Pass Products LLC, a joint venture between units of Qatar Petroleum and ExxonMobil Corporation, in our NCSA segment; a project to provide engineering, procurement, construction and installation of a gas-oil separation plant through a consortium with China Offshore Oil Engineering Company, in our MENA segment; a project to provide fabrication of tie-in and wellhead platforms, awarded by Saudi Aramco, in our MENA segment; and a project for the onshore engineering, procurement and construction for all components of an onshore LNG facility, in a consortium with Saipem S.p.a and Chiyoda Corporation, in our EARC segment.

Revenues—Revenues increased by $1.7 billion during 2019 compared to 2018. 2018 revenues included CB&I’s results from the Combination Date. The key projects driving 2019 revenues were our two U.S. LNG export facility projects, various U.S. ethane projects and various U.S. power projects in our NCSA segment and the Safaniya phase 6 project in our MENA segment.

Operating Loss—Our 2019 operating loss was approximately $2 billion and included: • a goodwill impairment of $1.1 billion and $319 million in our NCSA and EARC segments, respectively; • net charges of approximately $700 million resulting from changes in cost estimates to complete several projects, primarily within our NCSA segment, as discussed in Note 6, Project Changes in Estimates, to the accompanying Consolidated Financial Statements; • an impairment of $162 million of intangible assets, primarily in our NCSA segment; • a $101 million loss on the sale of APP recognized in our NCSA segment, as discussed in Note 4, Acquisition and Disposition Transactions, to the accompanying Consolidated Financial Statements; • transaction costs of $57 million, primarily related to legal and other professional fees associated with the sale processes for the pipe fabrication business and the Lummus Technology business and the now-terminated effort to sell our industrial storage tanks business, as well as professional and other fees associated with the Chapter 11 Cases; and • a non-cash impairment loss of $18 million associated with the net book value write-down of our marine assets.

2018

RPO—Our RPOs as of December 31, 2018 were approximately $11 billion and included the following significant 2018 awards: a high-density polyethylene plant project awarded by Bayport Polymers LLC in our NCSA segment; a subsea project awarded by Oil and Natural Gas Corporation (“ONGC”) in our APAC segment; a power project awarded by Entergy Corporation and a MEG unit project awarded by Gulf Coast Growth Ventures (a project involving units of Exxon Mobil Corporation and Saudi Arabia Basic Industries Corp., or “SABIC”), in our NCSA segment.

Revenues—Revenues increased by $3.7 billion during 2018 compared to 2017, primarily due to the Combination (approximately $4.4 billion), the majority of which benefited our NCSA segment. The key projects driving 2018 revenues within our NCSA segment were our two U.S. LNG export facility projects, various U.S. ethane projects and various U.S. power projects. The Safaniya phase 5 and 6 projects in our MENA segment also contributed significantly to revenues.

55 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Operating Loss—Operating results decreased by $2.6 billion from $307 million of operating income in 2017 to $2.3 billion of operating loss in 2018. Our 2018 operating results included $18 million of operating loss from the Combination (including $157 million of project-related and other intangible assets, inventory and investment in unconsolidated affiliates related amortization). Our operating loss also included: • goodwill impairment of $2.2 billion, resulting from our first annual quantitative impairment analysis during the fourth quarter of 2018; • restructuring and integration costs of $134 million, primarily relating to costs to achieve our Combination profitability initiative (“CPI”), launched in the second quarter of 2018, with the goal of realizing transformative cost savings; • a net benefit of $29 million resulting from changes in estimates to complete various projects; • a non-cash impairment loss of $58 million associated with the net book value write-down of two of our vessels; • transaction costs of $48 million, primarily relating to the Combination; and • incremental expense of $25 million associated with the need to make alternate arrangements for a third-party vessel charter, because the previously designated vessel was withdrawn from the market.

2019 Versus 2018

Revenues

Revenues increased by 26%, or $1.7 billion, in 2019 compared to 2018 across all segments. Revenues for 2018 included the impact of CB&I activity from the Combination Date.

CY Year ended December 31, 2019 2018 Change (In millions) Percentage Revenues: NCSA $ 4,627 $ 3,928 $ 699 18 % EARC 761 271 490 181 MENA 1,790 1,704 86 5 APAC 666 411 255 62 Technology 587 391 196 50 Total revenues $ 8,431 $ 6,705 $ 1,726 26 %

56 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

NCSA—Revenues increased by 18%, or $699 million, in 2019 compared to 2018.

In 2019, a variety of projects and activities contributed to revenues, including: • construction progress on our two U.S. LNG export facility projects (approximately $1.2 billion combined), including incentive revenues recognized on our Cameron, Louisiana LNG export facility project; • construction progress on our ethane projects in Texas and Louisiana (approximately $728 million combined); and • various power projects in the United States.

In 2018, a variety of projects and activities contributed to revenues, including: • construction progress on our two U.S. LNG export facility projects (approximately $1.3 billion combined); • construction progress on our ethane projects in Texas and Louisiana (approximately $1 billion combined); • various power projects in the U.S.; • fabrication and marine activity progress on the Abkatun-A2 platform, a turnkey EPCI project in the Gulf of Mexico; and • various other U.S. and offshore projects.

EARC—Revenues increased by 181%, or $490 million, in 2019 compared to 2018.

In 2019, a variety of projects and activities contributed to revenues, including: • progress on engineering, procurement and fabrication activities on the Tyra Redevelopment EPCI project, awarded in the fourth quarter of 2017; • progress on construction activities for a deep conversion complex built at a refinery in central Russia; • progress on engineering and additional scope activities on an oil refinery expansion project in Russia; • progress on engineering and procurement activities on the BP Tortue EPCI project; and • various other projects.

In 2018, a variety of projects and activities contributed to revenues, including: • progress on the Tyra Redevelopment EPCI project; • ongoing activities for an oil refinery expansion project in Russia; • engineering, procurement and supply of process equipment for the deep conversion complex built at a refinery in central Russia; and • various other projects.

MENA—Revenues increased by 5%, or $86 million, in 2019 compared to 2018.

In 2019, a variety of projects and activities contributed to revenues, including: • procurement, fabrication, marine and hookup activities on the Saudi Aramco Safaniya Phase 6 project, awarded in the fourth quarter of 2017; • engineering, fabrication, procurement and marine activities on the Bul Hanine EPCI project for Qatar Petroleum, awarded in the fourth quarter of 2017; • engineering and procurement progress on the Abu Dhabi National Oil Company (“ADNOC”) crude flexibility project in Ruwais, UAE, awarded in the first quarter of 2018; • engineering, fabrication and procurement activities on the Aramco Marjan TP10 project, awarded in the first quarter of 2019; • marine hook-up activities on the Aramco LTA II project; and • various other projects.

57 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In 2018, a variety of projects and activities contributed to revenues, including: • completion of engineering, fabrication and procurement activity and structural demolition and installation works by our DB 32 and DB 30 vessels on the Saudi Aramco Safaniya phase 5 project; • engineering, fabrication and procurement progress on the Saudi Aramco Safaniya phase 6 project; • engineering, fabrication and procurement progress and offshore installation of the 13 jackets by our DB27 and DB 30 vessels on the Saudi Aramco 13 Jackets project, awarded in the first quarter of 2018; • marine hook-up activities utilizing a jack-up barge on the lump-sum EPCI project under the LTA II; • pipelay, deck installation, tie-ins, fabrication and hook up activities on the Saudi Aramco Header 9 Facilities project; • engineering, fabrication and procurement progress on the Bul Hanine EPCI project for Qatar Petroleum; • engineering and procurement progress on ADNOC crude flexibility project; • engineering, procurement and construction progress on the LIWA EPC project for ORPIC; and • various other projects.

APAC—Revenues increased 62%, or $255 million, in 2019 compared to 2018.

In 2019, a variety of projects and activities contributed to revenues, including: • substantial completion of the initial offshore campaign by our DLV 2000 vessel on a subsea installation project offshore India; • the commencement of an early first gas offshore campaign by our NO 105 and LV 108 vessels in India; • the offshore installation campaign by our DB 30 vessel for the transportation and installation of offshore structures, pipelines and pre-commissioning project for the Pan Malaysia field development and ONGC Season 1 scope; and • progress on various other projects.

In 2018, a variety of projects and activities contributed to revenues, including: • completion of pipelay campaign and offshore construction on the Greater Western Flank Phase 2 project in Australia; • the Inpex Ichthys project in Australia and Vashishta subsea field infrastructure development project in India; • commencement of activities on a subsea installation project in India, awarded in the fourth quarter of 2017; and • various other projects.

Technology— Revenues increased by 50%, or $196 million, in 2019 compared to 2018. Revenues during both periods were associated with licensing and proprietary equipment activities in the petrochemical and refining market and the sale of catalysts.

58 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Segment Operating Income

Segment operating loss in 2019 was $1.5 billion compared to segment operating loss of $1.7 billion in 2018. Our 2019 operating results included approximately $1.1 billion and $259 million of goodwill impairment within our NCSA and EARC operating segments, respectively, as discussed below. Operating results for 2018 included the impact of CB&I activity from the Combination Date.

Year ended December 31, 2019 2018 Change (In millions) Percentage Segment operating income: NCSA $ (1,546) $ (1,537) $ (9) (1) % EARC (319) (74) (245) (331) MENA 181 328 (147) (45) APAC 1 56 (55) (98) Technology 156 (519) 675 130 Total $ (1,527) $ (1,746) $ 219 13 %

NCSA—Segment operating loss was approximately $1.5 billion during both 2019 and 2018.

In 2019 a variety of items negatively impacted our NCSA segment operating results, including: • goodwill and intangible assets impairment charges of $1.1 billion and $160 million, respectively, resulting from our 2019 impairment assessments, as discussed in Note 9, Goodwill and Other Intangible Assets, to the accompanying Consolidated Financial Statements; • net charges of approximately $689 million resulting from changes in cost estimates to complete several projects, as discussed in Note 6, Project Changes in Estimates, to the accompanying Consolidated Financial Statements, including charges on our loss projects, as discussed above under the caption “Company Overview—Loss Projects”; and • a $101 million loss on the sale of APP, as discussed in Note 4, Acquisition and Disposition Transactions, to the accompanying Consolidated Financial Statements.

In 2018 a variety of items negatively impacted our NCSA segment operating results, including: • a goodwill impairment charge of $1.5 billion, resulting from our annual impairment assessment; • charges resulting from changes in estimates for our Cameron LNG and Calpine loss projects, as discussed in the “Company Overview—Loss Projects” section; and • charges resulting from changes in estimates for our offshore Abkatun-A2 platform loss project, including the reversal of previously recognized profit.

These charges were partly offset by a variety of projects and activities that contributed to operating income, including: • construction progress and cost savings on our ethane projects in Texas and Louisiana; • construction progress and cost savings on various power projects in the U.S.; and • various other projects in the U.S.

EARC—Segment operating losses were $319 million and $74 million during 2019 and 2018, respectively.

In 2019, a variety of items negatively impacted our EARC segment operating results, including: • a goodwill impairment charge of $319 million resulting from our impairment assessment, as discussed in Note 9, Goodwill and Other Intangible Assets, to the accompanying Consolidated Financial Statements; and • net charges of approximately $45 million resulting from changes in cost estimates on several projects, primarily the Tyra Redevelopment project.

59 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

These charges were partially offset by: • progress on engineering and additional scope activities on the oil refinery expansion project in Russia; and • progress on various ongoing projects.

In 2018, EARC project results were offset by the selling, general and administrative expenses and losses from our investment in the io Oil and Gas unconsolidated joint venture. Our 2018 results were also impacted by a goodwill impairment charge of $40 million, resulting from our annual impairment assessment, and the project related and other intangible assets amortization.

MENA—Segment operating income was $181 million and $328 million during 2019 and 2018, respectively.

In 2019, a variety of projects and activities contributed to operating income, including: • procurement, fabrication and marine and hookup activities on the Saudi Aramco Safaniya Phase 6 project; • marine hook-up activities on the Aramco LTA II project; • close-out activities and cost savings on the substantially completed Saudi Aramco Safaniya Phase 5 project; • engineering and procurement progress on the ADNOC crude flexibility projects in Ruwais, UAE; • income from our unconsolidated joint venture with CTCI, partly offset by investment in unconsolidated affiliate related amortization associated with purchase accounting; and • various other projects.

In 2018, a variety of projects and activities contributed to operating income, including: • completion of engineering, fabrication, procurement activity and structural demolition and installation works by our DB 32 and DB 30 vessels on the Saudi Aramco Safaniya phase 5 project, as well as productivity improvements and cost savings on the project; • pipelay, deck installation, tie-ins, fabrication and hook up activities on the Saudi Aramco Header 9 Facilities project, as well as productivity improvements and cost savings on the project; • marine and hook-up activities utilizing a jack-up barge on the lump-sum EPCI project under the LTA II; • engineering, procurement and construction progress on the LIWA EPC project for ORPIC, as well as cost savings on the project; • engineering, fabrication, procurement progress and offshore installation of the 13 jackets by our DB27 and DB 30 vessels on the Saudi Aramco 13 Jackets project, awarded in the first quarter of 2018; • engineering, fabrication and procurement progress on the Saudi Aramco Safaniya phase 6 project; • a demolition campaign on the Saudi Aramco Marjan power systems replacement project; • a favorable settlement on the Saudi Aramco Safaniya phase 1 project, completed in 2016; • various other projects; and • income from our unconsolidated joint venture with CTCI, partly offset by investment in unconsolidated affiliate related amortization associated with purchase accounting.

APAC—Segment operating income was $1 million and $56 million during 2019 and 2018, respectively.

In 2019, cost savings and close-out activities on completed projects contributed to operating income, partially offset by cost increases, weather downtime and mechanical equipment downtime on certain projects.

60 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In 2018, a variety of projects and activities contributed to operating income, including: • cost savings and the close-out of outstanding change orders on active and completed projects; and • cost savings upon the commencement and substantial completion of pipelay campaign and offshore construction on the Greater Western Flank Phase 2 project in Australia.

These benefits were partially offset by a goodwill impairment charge of $52 million, resulting from our annual impairment assessment and cost increases and weather downtime on various projects.

Technology— Segment operating income was $156 million in 2019 and segment operating loss was $519 million in 2018.

In both periods, operating results were associated with licensing and proprietary equipment activity, as well as the supply of catalysts, and included $27 million of equity income, in both periods, which includes our portion of income from the Chevron-Lummus Global joint venture, an unconsolidated affiliate.

In addition, segment operating results were negatively impacted by: • 2019—$69 million of project-related and other intangible assets and investment in unconsolidated affiliate related amortization associated with purchase accounting; and • 2018—a $592 million goodwill impairment charge, resulting from our annual impairment assessment and $89 million of project-related and other intangible assets and investment in unconsolidated affiliate related amortization associated with purchase accounting.

Other Items in Operating Income Corporate and Other

Year ended December 31, 2019 2018 Change (In millions) Percentage Corporate and Other $ (555) $ (510) $ (45) (9) %

The increase in Corporate and other expenses was primarily due to increased selling, general and administrative expenses for a full year of the combined organization in 2019, which was partially offset by lower impairment of our marine assets and lower integration costs in 2019 compared to 2018 (see Note 16, Fair Value Measurements, and Note 12, Restructuring and Integration Costs and Transaction Costs, to the accompanying Consolidated Financial Statements).

Other non-operating Items

Interest expense, net—Interest expense, net was $735 million and $259 million during 2019 and 2018, respectively. Interest expense in 2019 included the accelerated amortization of deferred issuance costs (“DIC”) due to the noncompliance with certain financial covenants and other obligations as of December 31, 2019 and expected outcomes of lender negotiations following the Chapter 11 Cases.

Interest expense in 2019 was primarily comprised of: • $166 million of interest expense and $87 million of DIC amortization associated with the Term Facility; • $139 million of interest expense and $52 million of DIC amortization associated with the Senior Notes; • $130 million of DIC and lenders’ fees amortization and $15 million of interest expense associated with the Superpriority Credit Agreement; • $67 million associated with our interest rate swap arrangement, reclassified from accumulated other comprehensive income (loss) (“AOCI”) into interest expense (see Note 17, Derivative Financial Instruments, to the accompanying Consolidated Financial Statements); • $38 million of interest expense and $29 million of DIC amortization associated with the revolving credit facility and LC facility under the Credit Agreement; and • $12 million associated with debtor-in-possession financing, discussed below.

61 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For further discussion of our financing arrangements see Note 13, Debt, to the accompanying Consolidated Financial Statements and “—Liquidity and Capital Resources.”

Interest expense in 2018 was primarily comprised of: • $97 million of interest expense and $6 million of DIC amortization associated with the issuance of $1.3 billion principal amount of Senior Notes; • $113 million of interest expense and $9 million of deferred DIC amortization associated with our $2.26 billion senior secured Term Facility; • $17 million of deferred DIC amortization associated with the revolving credit facility and LC facility under the Credit Agreement; and • $14 million of interest expense associated with our 8.000% second-lien notes, which were redeemed in May 2018.

Other non-operating expense, net—Other non-operating expense, net was $9 million in 2019 and primarily related to a $6 million year-end, non-cash actuarial pension mark-to-market loss associated with our defined benefit pension and other postretirement plans. See Note 15, Pension and Postretirement Benefits, to the accompanying Consolidated Financial Statements for further discussion.

Other non-operating expense, net was $56 million in 2018 and primarily related to a $47 million year-end, non-cash actuarial pension mark-to-market loss associated with our defined benefit pension and other postretirement plans and a $10 million make-whole fee and $4 million of charges relating to the write-off of deferred DIC, associated with the redemption of our 8.000% second-lien notes in May 2018.

Income tax (benefit) expense— For the year ended December 31, 2019, we recognized loss before provision for income taxes of ($2,826) million, compared to loss before provision for income taxes of ($2,571) million for the year ended December 31, 2018. In the aggregate, the provision for income taxes was $58 million and $104 million for the years ended December 31, 2019 and 2018, respectively. Our provision for income taxes reflected an effective tax rate of approximately (2%) and (4%) in 2019 and 2018, respectively.

The 2019 effective tax rate of (2%) was primarily driven by the impairment of goodwill and intangibles (11%) and setting up of the deferred tax asset valuation allowance of (7%).

The 2018 effective tax rate of (4%) was primarily driven by the impairment of goodwill and intangibles (14%) and setting up of the deferred tax asset valuation allowance of (11%).

Inflation and Changing Prices

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), generally using historical U.S. dollar accounting (“historical cost”). Statements based on historical cost, however, do not adequately reflect the cumulative effect of increasing costs and changes in the purchasing power of the dollar, especially during times of significant and continued inflation.

In order to minimize the negative impact of inflation on our operations, we attempt to cover the increased cost of anticipated changes in labor, material and service costs either through an estimate of those changes, which we reflect in the original price, or through price escalation clauses in our contracts.

Liquidity and Capital Resources

Historically, prior to filing the Chapter 11 Cases, our primary sources of liquidity were cash and cash equivalents on hand, cash flows generated from operations and capacity under our credit and other facilities. Our credit and other facilities were also available to provide letters of credit, which are generally issued to customers in the ordinary course of business to support advance payments and performance guarantees in lieu of retention on our contracts, or in certain cases, are issued in support of our insurance programs.

62 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our filing of the Chapter 11 Cases constituted an event of default that accelerated our obligations under the Credit Agreement, the Letter of Credit Agreement, the Superpriority Credit Agreement and the Senior Notes ( each as defined and described in Note 13, Debt, to the accompanying Consolidated Financial Statements ). However, the ability of the creditors to exercise remedies under the agreements was stayed upon commencement of the Chapter 11 Cases, subject to certain limited exceptions provided by the Bankruptcy Code.

In addition to the DIP Facilities, the RSA contemplates that, on the Effective Date, the Debtors will (a) conduct a non-backstopped equity rights offering (the “Rights Offering”) and (b) enter into new exit credit facilities (the “Exit Facilities”), consisting of (1) a super senior exit facility comprised of a letter of credit facility in an amount of $743 million (the “Super Senior Exit Facility”), (2) a super senior term loan facility in an amount of any portion of the Make Whole Amount (as defined in the RSA) outstanding and not repaid at emergence (the “Make Whole Exit Facility”); (3) a senior secured letter of credit exit facility in an amount up to $1.326 billion for new letters of credit (the “Senior LC Exit Facility”), (4) a senior secured letter of credit exit facility reflecting existing letters of credit (the “Roll-Off LC Exit Facility” and, together with the Super Senior Exit Facility and the Senior LC Exit Facility, the “LC Exit Facilities”), (5) a senior secured term loan facility in an amount of $500 million of take-back debt (the “Term Loan Exit Facility”), and (6) a cash secured letter of credit exit facility in an amount up to $371 million (the “Cash Secured LC Facility”). The aggregate amount of commitments under the LC Exit Facilities and the Cash Secured LC Exit Facility will be approximately $2.4 billion.

The RSA contemplates that the Exit Facilities will contain customary affirmative and negative covenants of the Debtors, including the ability to incur additional indebtedness. An exception is that the Debtors can enter into a revolving loan facility, subject to the terms to be mutually agreed, in a principal amount up to $450 million, provided that, on the date such facility is entered into, the (1) Super Senior Exit Facility has been terminated, (2) the Debtors shall have, as of the last day of the most recently ended fiscal quarter prior to such date (the “Test Date”) on a pro-forma basis, a minimum fixed charge coverage ratio at a level to be mutually agreed and (3) the Debtors shall have, as of the Test Date on a pro-forma basis, a maximum “contingent leverage” ratio at a level to be mutually agreed.

63 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As discussed above under “Outlook—Review of Business Portfolio and Strategic Transactions,” we completed the sale of APP during the second quarter of 2019. We are continuing to pursue the sale of the remaining portion of the pipe fabrication business. In the third quarter of 2019, we terminated the sales process for our industrial storage tank business, as we concluded that the net cash proceeds from the sale, if completed, would likely be significantly below initial expectations.

There can be no assurance that funding sources will continue to be available, as our ability to generate cash flows from operations, our ability to continue to access the DIP Facilities and our ability to sell non-core assets, at reasonable terms or at all, may be impacted by a variety of business, economic, legislative, financial and other factors, which may be outside of our control.

The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. As a result of the Chapter 11 Cases, the realization of assets and the satisfaction of liabilities are subject to uncertainty. While operating as debtors-in-possession under Chapter 11, we may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business, for amounts other than those reflected in the accompanying consolidated financial statements. Further, the Plan of Reorganization could materially change the amounts and classifications of assets and liabilities reported in the consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern or as a consequence of the Chapter 11 Cases.

As a result of our financial condition, the defaults under our debt agreements and the risks and uncertainties surrounding the Chapter 11 Cases, substantial doubt exists regarding our ability to continue as a going concern. We believe that,w once we receive the approval of the Plan of Reorganization by the Bankruptcy Court, our successful implementation of the Plan of Reorganization and the finalization of the Lummus Technology sale, among other factors, substantial doubt regarding our ability to continue as a going concern would be alleviated.

Cash, Cash Equivalents and Restricted Cash

As of December 31, 2019, we had $1.193 billion of cash, cash equivalents and restricted cash, as compared to $845 million as of December 31, 2018. Approximately $213 million of our cash and cash equivalents as of December 31, 2019 was within our variable interest entities (“VIEs”) associated with our joint venture and consortium arrangements, which is generally only available for use in our operating activities when distributed to the joint venture and consortium participants. As of December 31, 2019, we had approximately $316 million of cash in jurisdictions outside the U.S., principally in China, Italy, the United Arab Emirates, Ireland, the Netherlands and the United Kingdom. Approximately 1% of our outstanding cash balance is held in countries that have established government imposed currency restrictions that could impede the ability of our subsidiaries to transfer funds to us.

Cash Flow Activities

Operating activities―Net cash used in operating activities in 2019 and 2018 was approximately $976 million and $71 million, respectively. Net cash provided by operating activities in 2017 was $136 million.

The cash (used in) provided by operating activities primarily reflected our net (loss) income, adjusted for non-cash items and changes in components of our working capital and changes in our current and non-current liabilities. The changes in our working capital during 2019 were primarily driven by accounts receivable, contracts in progress, net of advance billings on contracts, and accounts payable. Fluctuations in working capital are normal in our business. Working capital is impacted by the size of our projects and the achievement of billing milestones on RPOs as we complete different phases of our projects.

As of December 31, 2019 and 2018, negative working capital associated with the Calpine power project and our aggregate proportionate shares of the Cameron LNG and Freeport LNG projects (collectively, the “Focus Projects”) was approximately $228 million and $815 million, respectively.

During 2019, the Cameron LNG project’s operating margin was positively impacted by recognition of approximately $200 million of incentives related to the projected achievement of progress milestones. That incentive has two cash components: • $137.5 million collected as of December 31, 2019; and

• $62.5 million expected to be collected in 2020.

64 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In 2019, net cash used by working capital was approximately $335 million.

The components of working capital that used cash were: • Contracts in progress/Advance billings on contracts—a net increase of $627 million, primarily due to the impact of progress on projects within our NCSA segment (including approximately $289 million used for the Focus Projects) and projects within our EARC and APAC segments; and • Accounts receivable—a net increase of $205 million, primarily due to billings in our NCSA, MENA and APAC segments.

This increase was partially offset by: • Accounts payable—an increase of $497 million, primarily driven by the timing of billings and vendor payments.

In the year ended December 31, 2018, net cash used by working capital was approximately $134 million.

The components of working capital that used cash were: • Contracts in progress/Advance billings on contracts—a net increase of $278 million, primarily due to the impact of progress on projects within our NCSA segment (including approximately $610 million used for the Focus Projects), partially offset by projects within our other segments. • Accounts payable—a decrease of $156 million, primarily due to payments related to our MENA and NCSA segments.

This increase was partially offset by: • Accounts receivable—a net decrease of $300 million, primarily due to collections in our NCSA segment (including approximately $85 million from the Focus Projects), partially offset by billings within our other segments.

In the year ended December 31, 2017, net cash used by working capital was approximately $254 million. Contracts in progress, net of Advance billings on contracts increased by $450 million primarily due to progress on: • the Abkatun-A2 project in our NCSA segment; • various Saudi Aramco projects, including the lump-sum EPCI project under the LTA II, and the Berri platform, and the Safaniya Phase 5 and the Header 9 Facilities projects in our MENA segment; and • the Ichthys and Vashishta projects in our APAC segment.

This increase was partially offset by: • Accounts receivable—collections across all segments reduced our accounts receivable by $91 million; and • Accounts payable—an increase of $105 million was driven by project progress across all segments.

Investing activities―Our net cash used in investing activities was $278 million, $2.6 billion and $65 million in 2019, 2018 and 2017, respectively.

Net cash used in investing activities was primarily associated with: • outflows from advances of $258 million to our third-party consortium participants of proportionately consolidated consortiums (see Note 10, Joint Venture and Consortium Arrangements, to the accompanying Consolidated Financial Statements); and • capital expenditures of $92 million.

Cash outflows during 2019 were partially offset by $83 million in net proceeds from the sale of APP (see Note 4, Acquisition and Disposition Transactions, to the accompanying Consolidated Financial Statements).

65 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Net cash used in investing activities in 2018 was primarily associated with: • the cash portion of the Combination consideration ($2.4 billion, net of cash acquired of $498 million – see Note 3, Business Combination, to the accompanying Consolidated Financial Statements for further discussion); • net outflows from advances of $241 million with our third-party consortium participants of proportionately consolidated consortiums (see Note 10, Joint Venture and Consortium Arrangements, to the accompanying Consolidated Financial Statements for further discussion); and • capital expenditures of $86 million.

These outflows were partially offset by proceeds from asset dispositions of $69 million, approximately $52 million of which were associated with the sale of CB&I’s former administrative headquarters.

Net cash used in investing activities in 2017 included the acquisition and subsequent sale leaseback of the Amazon vessel and upgrade costs for other marine vessels and proceeds from disposition of assets provided cash of $56 million.

Financing activities―In 2019, net cash provided by financing activities was $1.6 billion, as compared to $3.2 billion in 2018. Net cash used in financing activities in 2017 was $275 million.

Net cash provided in 2019 was primarily attributable to: • $801 million of net borrowings under the Credit Agreement; • $800 million provided under the Superpriority Credit Agreement; • $237 million of net inflows attributable to advances from our equity method joint ventures and proportionately consolidated consortiums; and • $32 million provided under the structured equipment financing discussed below.

The inflows in 2019 were partially offset by: • $160 million of DIC and lenders’ fees associated with the Superpriority Credit Agreement; • $23 million and $8 million of principal payments under the Term Facility and North Ocean financing, respectively, and $8 million of finance lease payments; • $15 million of distributions to a former joint venture member (see Note 20, Stockholders’ Equity and Equity-Based Incentive Plans, to the accompanying Consolidated Financial Statements) and $28 million of distributions to a non-controlling interest (see Note 20, Stockholders’ Equity, to the accompanying Consolidated Financial Statements); and • $4 million of repurchases of common stock tendered by participants in our long-term incentive plans for payment of applicable withholding taxes upon vesting of awards under those plans.

Net cash provided in 2018 was primarily attributable to: • borrowings of $2.26 billion under the Term Facility; • the issuance of $1.3 billion in aggregate principal amount of the Senior Notes; • net proceeds of $290 million from the private placement of 12% Redeemable Preferred Stock and associated warrants; and • net inflows from advances of $158 million with our equity method joint ventures and proportionately consolidated consortiums.

The inflows in 2018 were partly offset by: • redemption of the entire $500 million aggregate principal amount of our 8.000% second-lien notes and a $10 million make-whole fee associated with the early repayment; • $217 million of DIC associated with the Credit Agreement, Senior Notes and Letter of Credit Agreement discussed below; • $18 million of issuance costs associated with the 12% Redeemable Preferred Stock;

66 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• $17 million of Term Facility payments, $16 million of vendor equipment financing payments and $12 million of other debt and capital lease payments; and • repurchases of common stock of $14 million tendered by participants in our long-term incentive plans for payment of applicable withholding taxes upon vesting of awards under those plans.

Net cash used in 2017 was primarily attributable to: • $218 million of repayments of our prior term loan; • $17 million of repayments of other debt; • $21 million of DIC associated with our previous credit agreements paid during 2017; • $11 million for the acquisition of the North Ocean AS 105 noncontrolling interest in the second quarter of 2017; and • $7 million for repurchases of common stock tendered by participants in our long-term incentive plans for payment of applicable withholding taxes upon vesting of awards under those plans.

Effects of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash—During 2019 and 2018, our cash, cash equivalents and restricted cash balance decreased by $22 million and $45 million, respectively, due to the impact of changes in functional currency exchange rates against the U.S. Dollar for non-U.S. Dollar cash balances, primarily for net changes in the Australian Dollar, British Pound and Euro exchange rates. The net unrealized loss on our cash, cash equivalents and restricted cash resulting from these exchange rate movements is reflected in the cumulative translation adjustment component of Other comprehensive income (loss). Our cash, cash equivalents and restricted cash held in non-U.S. Dollar currencies are used primarily for project-related and other operating expenditures in those currencies, and, therefore, our exposure to realized exchange gains and losses is not anticipated to be material.

During 2017, the effect of exchange rate changes on cash, cash equivalents and restricted cash was not material.

Credit and Other Financing Arrangements

Superpriority Credit Agreement

On October 21, 2019, McDermott, as a guarantor, entered into a superpriority senior secured credit agreement (the “Superpriority Credit Agreement”) with three of our wholly owned subsidiaries, McDermott Technology (Americas), Inc. (“MTA”), McDermott Technology (US), Inc. (“MTUS”), and McDermott Technology, B.V. (“MTBV”), as co-borrowers (collectively, the “Borrowers”), a syndicate of lenders and letter of credit issuers, Barclays Bank PLC, as administrative agent for the New Term Facility (as defined below), and Crédit Agricole Corporate and Investment Bank, as administrative agent for the New LC Facility (as defined below).

The Superpriority Credit Agreement provides for borrowings and letters of credit in an aggregate principal amount of $1.7 billion, consisting of (1) a $1.3 billion term loan facility (the “New Term Facility”) and (2) a $400 million letter of credit facility (the “New LC Facility”). Proceeds of the loans under the New Term Facility are to be used for general corporate purposes and to pay fees and expenses in connection with the Superpriority Credit Agreement and related transactions.

Upon the closing of the Superpriority Credit Agreement, we were provided access to $650 million of capital, comprised of $550 million under the New Term Facility, before reduction for related fees and expenses, and $100 million under the New LC Facility (“Tranche A”).

On December 1, 2019, we entered into Amendment No. 1 to the Superpriority Credit Agreement (the “Superpriority Amendment”), which amended the Superpriority Credit Agreement to, among other things: (1) waive certain conditions precedent to the Tranche B funding to facilitate such funding; (2) provide for the acknowledgement and consent by the lenders under the Superpriority Credit Agreement of our compliance with required business plan milestones; and (3) modify the cross-default provisions contained in the Superpriority Credit Agreement related to the failure to pay interest on the Senior Notes. Upon signing of the Superpriority Amendment and in connection with the funding of Tranche B under the Superpriority Credit Agreement, we were provided with access to $350 million of capital, comprised of $250 million under the New Term Facility and $100 million under the New LC Facility (“Tranche B”).

67 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain features within the Superpriority Credit Agreement were identified as embedded derivatives and, therefore, bifurcated. The fair value of the embedded derivatives, which was determined using a discounted cash flow approach, was $60 million as of October 21, 2019. The embedded derivatives were recognized as a reduction to the debt outstanding under the Superpriority Credit Agreement and recorded in accrued liabilities. The fair value of the embedded derivatives, re-measured as of December 31, 2019, was $28 million. Changes in fair value have been recorded in interest expense, net. The inputs to the fair value measurement of the embedded derivatives are unobservable and reflect our estimates of forward yield, using a risk-free rate and a USD Energy CCC yield curve and thus represent a level 3 input.

As of December 31, 2019, we had $800 million in borrowings outstanding under the New Term facility, prior to bifurcation of $60 million of embedded derivatives discussed above, and there were $200 million of letters of credit issued (or deemed issued) under the New LC Facility.

On January 9, 2020, we entered into Amendment No. 2 to the Superpriority Agreement (the “Superpriority Amendment No. 2”). The Superpriority Amendment No. 2: (1) amended, among other things, the events of default under the Superpriority Credit Agreement to provide that through January 21, 2020 the acceleration of the Senior Notes would not constitute an event of default; and (2) allows ordinary course auto-renewals of letters of credit despite any acceleration, bankruptcy or other event of default.

The indebtedness and other obligations under the Superpriority Credit Agreement are unconditionally guaranteed by McDermott and substantially all of its direct and indirect wholly owned subsidiaries (the “Superpriority Guarantors”), other than several captive insurance subsidiaries and certain other designated or immaterial subsidiaries. The indebtedness and other obligations under the Superpriority Credit Agreement are secured by super-priority liens on substantially all of the Borrowers’, McDermott’s and the other Superpriority Guarantors’ assets.

The New Term Facility and the New LC Facility will bear interest at the Borrowers’ option at either (1) the Eurodollar rate plus a margin of 10.00% per year, or (2) the base rate plus a margin of 9.00% per year. The weighted average interest rate for borrowings under the New Term Facility and the new LC facility was 11.99%, inclusive of the applicable margin during the year ended December 31, 2019. The Borrowers are charged a commitment fee of 1.50% per year on the daily amount of the unused portions of the commitments under the New LC Facility. Additionally, with respect to all letters of credit outstanding under the New LC Facility, the Borrowers are charged a fronting fee of 0.50% per year. The Borrowers are also required to pay issuance fees and other fees and expenses in connection with the issuance of letters of credit under the New LC Facility. We paid upfront fees, commitment fees, agent fees and other fees to certain lenders, arrangers and agents for the Superpriority Credit Agreement.

The Superpriority Credit Agreement includes mandatory commitment reductions and prepayment requirements in connection with certain asset sales and casualty events. In addition, the Borrowers will be required to make an annual prepayment of loans under the New Term Facility and reduce commitments under the New LC Facility with 75% of “excess cash flow” (as defined in the Superpriority Credit Agreement). The Superpriority Credit Agreement otherwise only requires periodic interest payments until maturity. Certain mandatory prepayments and voluntary prepayments of loans under the New Term Facility must be accompanied by the payment of a premium of (x) during the first six months after the closing (other than with respect prepayments for certain asset sales), up to the greater of 3.0% of the aggregate principal amount of term loans being repaid and the sum of the present values of the term loans, being repaid, the accrued interest on such term loans and 3.0% of the principal amount of such term loans and (y) during the period after the first six months after the closing but prior to the end of the first 18 months (and with respect to prepayments for certain asset sales), 3.0% of the aggregate principal amount of term loans being repaid. The Borrowers may terminate in whole or reduce in part the unused portion of the New LC Facility at any time without premium or penalty (other than customary LIBOR breakage costs), subject to certain notice requirements.

The Superpriority Credit Agreement requires us to comply with the following financial covenants: • limitations on specified variances from receipts and disbursements set forth in our budget; • minimum Adjusted EBITDA (as defined in the Superpriority Credit Agreement), tested on a trailing four-quarters basis at the end of each fiscal quarter; • minimum liquidity of no less than $75 million at any time; and • maximum project charges to specified projects for the quarter ended December 31, 2019 not to exceed $260 million.

68 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• concurrently with the funding of Tranche B, McDermott issue equity, so that participating lenders receive equity in McDermott totaling up to an aggregate of 15% of McDermott’s issued and outstanding shares of common stock (on a pro rata basis relative to each lender’s commitment amount); and

• in addition to customary periodic financial reporting obligations, McDermott deliver periodic cash flow forecasts and variance reports to the lenders under the Superpriority Credit Agreement.

Superpriority Credit Agreement Covenants—The Superpriority Credit Agreement includes the following financial covenants: • (a) as of any Variance Testing Date (as defined in the Superpriority Credit Agreement), we shall not allow (i) our aggregate cumulative actual total receipts for such variance testing period to be less than the projected amount therefor set forth in the most recently delivered Approved Budget (as defined in the Superpriority Credit Agreement) by more than 20%, (ii) the aggregate cumulative actual total disbursements (A) for the variance testing period to exceed the projected amount therefor set forth in the most recently delivered Approved Budget by more than 20% and (B) for each week within such variance testing period, to exceed the projected amount therefor set forth in the most recently delivered Approved Budget by more than 20%, with respect to each of the first week and on a cumulative basis for the two-week period ending with the second week of such variance testing, in each case of such variance testing period and (b) at any time, our liquidity shall not be less than $100 million. • beginning with the fiscal quarter ended December 31, 2019, our adjusted EBITDA (as defined in the Superpriority Credit Agreement) for the most recently ended four fiscal quarter period for which consolidated financial statements have been delivered pursuant to the Superpriority Credit Agreement shall not be less than the minimum amount set forth below as set forth opposite such ended fiscal quarter:

Adjusted EBITDA Test Period End Date (In millions) December 31, 2019 $ 430 March 31, 2020 470 June 30, 2020 530 September 30, 2020 880 December 31, 2020 960 March 31, 2021 1,090 June 30, 2021 1,210

• The minimum liquidity (as defined in the Superpriority Credit Agreement, but generally meaning the sum of McDermott’s unrestricted cash and cash equivalents plus unused commitments under the Superpriority Credit Agreement available for revolving borrowings) shall be $75 million.

In addition, the Superpriority Credit Agreement contains various covenants that, among other restrictions, limit our ability to:

• incur or assume indebtedness; • grant or assume liens; • make acquisitions or engage in mergers; • sell, transfer, assign or convey assets; • make investments; • repurchase equity and make dividends and certain other restricted payments; • change the nature of our business; • engage in transactions with affiliates; • enter into burdensome agreements; • modify our organizational documents; • enter into sale and leaseback transactions;

69 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• make capital expenditures; • enter into speculative hedging contracts; and • make prepayments on certain junior debt.

The Superpriority Credit Agreement contains events of default that we believe are customary for a senior secured credit facility. If an event of default relating to a bankruptcy or other insolvency event occurs, all obligations under the Superpriority Credit Agreement will immediately become due and payable. If any other event of default exists under the Superpriority Credit Agreement, the lenders may accelerate the maturity of the obligations outstanding under the Superpriority Credit Agreement and exercise other rights and remedies. In addition, if any event of default exists under the Superpriority Credit Agreement, the lenders may commence foreclosure or other actions against the collateral.

Credit Agreement

On May 10, 2018, we entered into a Credit Agreement (the “Credit Agreement”) with a syndicate of lenders and letter of credit issuers, Barclays Bank PLC, as administrative agent for a term facility under the Credit Agreement, and Crédit Agricole Corporate and Investment Bank, as administrative agent for the other facilities under the Credit Agreement. The Credit Agreement provides for borrowings and letters of credit in the aggregate principal amount of $4.7 billion, consisting of the following: • a $2.26 billion senior secured, seven-year term loan facility (the “Term Facility”), the full amount of which was borrowed, and $319.3 million of which has been deposited into a restricted cash collateral account (the “LC Account”) to secure reimbursement obligations in respect of up to $310.0 million of letters of credit (the “Term Facility Letters of Credit”); • a $1.0 billion senior secured revolving credit facility (the “Revolving Credit Facility”); and • a $1.44 billion senior secured letter of credit facility (the “LC Facility”), which includes a $50 million increase pursuant to an Increase and Joinder Agreement we entered into with Morgan Stanley Senior Funding, Inc. as of May 24, 2019.

The Credit Agreement provides that:

• Term Facility Letters of Credit can be issued in an amount up to the amount on deposit in the LC Account ($319.7 million at December 31, 2019), less an amount equal to approximately 3% of such amount on deposit (to be held as a reserve for related letter of credit fees), not to exceed $310 million; • subject to compliance with the financial covenants in the Credit Agreement, the full amount of the Revolving Credit Facility is available for revolving loans; • subject to our utilization in full of our capacity to issue Term Facility Letters of Credit, the full amount of the Revolving Credit Facility is available for the issuance of performance letters of credit and up to $200 million of the Revolving Credit Facility is available for the issuance of financial letters of credit; and • the full unused amount of the LC Facility is available for the issuance of performance letters of credit.

Borrowings are available under the Revolving Credit Facility for working capital and other general corporate purposes. Certain existing letters of credit outstanding under our previously existing Amended and Restated Credit Agreement, dated as of June 30, 2017 (the “Prior Credit Agreement”), and certain existing letters of credit outstanding under CB&I’s previously existing credit facilities have been deemed issued under the Credit Agreement, and letters of credit were issued under the Credit Agreement to backstop certain other existing letters of credit issued for the account of McDermott, CB&I and their respective subsidiaries and affiliates.

The Credit Agreement includes mandatory commitment reductions and prepayments in connection with, among other things, certain asset sales and casualty events. In addition, we are required to make annual prepayments of term loans under the Term Facility and cash collateralize letters of credit issued under the Revolving Credit Facility and the LC Facility with 75% of excess cash flow (as defined in the Credit Agreement).

70 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

On October 21, 2019, we entered into Consent and Amendment No. 1 to the Credit Agreement (the “Credit Agreement Amendment”). The Credit Agreement Amendment, among other things, amended our leverage ratio, fixed charge coverage ratio and minimum liquidity covenant for each fiscal quarter through December 31, 2021. The Credit Agreement Amendment also modified certain affirmative covenants, negative covenants and events of default to, among other things, make changes to allow for the incurrence of indebtedness and pledge of assets under the Superpriority Credit Agreement and eliminate our reinvestment rights with respect to proceeds from asset sales. The Credit Agreement Amendment also modified the participation fees we are charged for letters of credit, as described below.

On December 1, 2019, we entered into Amendment No. 2 to the Credit Agreement (the “Credit Agreement Amendment No. 2”). The Credit Agreement No. 2 amended, among other things, the events of default under the Credit Agreement to provide that, for so long as the Forbearance Agreement (as defined below) was in effect and the Senior Notes were not accelerated, the failure to make the payment of $69 million of interest on the Senior Notes would not constitute an event of default.

On January 9, 2020, we entered into Amendment No. 3 to the Credit Agreement (the “Credit Agreement Amendment No. 3”). The Credit Agreement Amendment No. 3: (1) amended, among other things, the events of default under the Credit Agreement to provide that through January 21, 2020, the acceleration of the Senior Notes would not constitute an event of default under the Credit Agreement; and (2) allows ordinary course auto-renewals of letters of credit despite any acceleration, bankruptcy or other event of default.

Term Facility—As of December 31, 2019, we had $2.2 billion of borrowings outstanding under the Term Facility. Proceeds from our borrowing under the Term Facility were used, together with proceeds from the issuance of the Senior Notes and cash on hand, (1) to consummate the Combination in 2018, including the repayment of certain existing indebtedness of CB&I and its subsidiaries, (2) to redeem $500 million aggregate principal amount of our 8.000% second-lien notes, (3) to prepay existing indebtedness under, and to terminate in full, the Prior Credit Agreement, and (4) to pay fees and expenses in connection with the Combination, the Credit Agreement and the issuance of the Senior Notes.

Principal under the Term Facility is payable quarterly and interest is assessed at either (1) the Eurodollar rate plus a margin of 5.00% per year or (2) the base rate (the highest of the Federal Funds rate plus 0.50%, the Eurodollar rate plus 1.0%, or the administrative agent’s prime rate) plus a margin of 4.00%, subject to a 1.0% floor with respect to the Eurodollar rate and is payable periodically dependent upon the interest rate in effect during the period. On May 8, 2018, we entered into a U.S. dollar interest rate swap arrangement to mitigate exposure associated with cash flow variability on $1.94 billion of the $2.26 billion Term Facility. However, due to circumstances described in Note 2, Basis of Presentations and Significant Accounting Policies, our hedge accounting under this arrangement ceased as of December 31, 2019. This resulted in a weighted average interest rate of 7.70%, inclusive of the applicable margin during the period ended December 31, 2019. The Credit Agreement requires us to prepay a portion of the term loans made under the Term Facility on the last day of each fiscal quarter in an amount equal to $5.65 million.

The future scheduled maturities of the Term Facility are:

(In millions) 2020 $ 23 2021 23 2022 23 2023 23 2024 23 Thereafter 2,105

$ 2,220

Additionally, as of December 31, 2019, there were approximately $305 million of Term Facility letters of credit issued (including $49 million of financial letters of credit) under the Credit Agreement, leaving approximately $5 million of available capacity under the Term Facility.

Revolving Credit Facility and LC Facility—We have a $1.0 billion Revolving Credit Facility which is scheduled to expire in May 2023. As of December 31, 2019, we had approximately $801 million in borrowings and $194 million of letters of credit outstanding (including $49 million of financial letters of credit) under the Revolving Credit Facility, leaving $5 million of available capacity under this facility. During 2019, the maximum outstanding borrowing under the Revolving Credit Facility was $801 million.

We also have a $1.440 billion LC Facility that is scheduled to expire in May 2023. As of December 31, 2019, we had approximately $1.252 billion of letters of credit outstanding, leaving $188 million of available capacity under the LC Facility.

71 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Under the Revolving Credit Facility, interest will be assessed at either the base rate plus a floating margin ranging from 2.75% to 3.25% (3.25% at December 31, 2019) or the Eurodollar rate plus a floating margin ranging from 3.75% to 4.25% (4.25% at December 31, 2019), in each case depending on our leverage ratio (calculated quarterly). We are charged a commitment fee of 0.50% per year on the daily amount of the unused portions of the commitments under the Revolving Credit Facility and the LC Facility. Additionally, with respect to all letters of credit outstanding under the Credit Agreement, we are charged a fronting fee of 0.25% per year and, with respect to all letters of credit outstanding under the Revolving Credit Facility and the LC Facility and issued prior to the Credit Agreement Amendment, we are charged a participation fee of (i) between 3.75% to 4.25% (4.25% at December 31, 2019) per year in respect of financial letters of credit and (ii) between 1.875% to 2.125% (2.125% at December 31, 2019) per year in respect of performance letters of credit, in each case depending on our leverage ratio (calculated quarterly). After the Credit Agreement Amendment, we are now charged a 5% participation fee on any outstanding letter of credit for any newly issued letter of credit and with respect to any increase in the amount of any existing letter of credit. We are also required to pay customary issuance fees and other fees and expenses in connection with the issuance of letters of credit under the Credit Agreement.

Credit Agreement Covenants—The Credit Agreement, as amended by the Credit Agreement Amendment, includes the following financial covenants that are tested on a quarterly basis: • the minimum permitted fixed charge coverage ratio (as defined in the Credit Agreement) is (i) 0.70:1.00 for the fiscal quarters ending December 31, 2019 through June 30, 2020; (ii) 1.10:1.00 for the fiscal quarters ending September 30, 2020 and December 31, 2020; (iii) 1.20:1.00 for the fiscal quarter ending March 31, 2021; (iv) 1.40:1.00 for the fiscal quarter ending June 30, 2021; (v) 1.30:1.00 for the fiscal quarters ending September 30, 2021 and December 31, 2021; and (vi) 1.50:1.00 for each fiscal quarter ending after December 31, 2021. • the maximum permitted leverage ratio is (i) 11.70:1.00 for the fiscal quarter ended December 31, 2019; (ii) 11.60:1.00 for each fiscal quarter ending March 31, 2020; (iii) 10.30:1.00 for the fiscal quarter ending June 30, 2020; (iv) 6.50:1.00 for the fiscal quarter ending September 30, 2020; (v) 6.00:1.00 for the fiscal quarter ending December 31, 2020; (vi) 5.30:1.00 for the fiscal quarter ending March 31, 2021; (vii) 4.80:1.00 for the fiscal quarter ending June 30, 2021; (viii) 4.70:1.00 for the fiscal quarter ending September 30, 2021; (ix) 4.80:1.00 for the fiscal quarter ending December 31, 2021; and (x) 3.25:1.00 for each fiscal quarter ending after December 31, 2021. • the minimum liquidity (as defined in the Credit Agreement, but generally meaning the sum of McDermott’s unrestricted cash and cash equivalents plus unused commitments under the Credit Agreement available for revolving borrowings) is $200 million.

In addition, the Credit Agreement contains various covenants that, among other restrictions, limit our ability to:

72 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Credit Agreement contains events of default that we believe are customary for a secured credit facility. If an event of default relating to bankruptcy or other insolvency event occurs, all obligations under the Credit Agreement will immediately become due and payable. If any other event of default exists under the Credit Agreement, the lenders may accelerate the maturity of the obligations outstanding under the Credit Agreement and exercise other rights and remedies. In addition, if any event of default exists under the Credit Agreement, the lenders may commence foreclosure or other actions against the collateral.

Letter of Credit Agreement

On October 30, 2018, we, as a guarantor, entered into a Letter of Credit Agreement (the “Letter of Credit Agreement”) with McDermott Technology (Americas), Inc., McDermott Technology (US), Inc. and McDermott Technology, B.V., each a wholly owned subsidiary of ours, as co-applicants, and Barclays Bank PLC, as administrative agent. The Letter of Credit Agreement provides for a facility for extensions of credit in the form of performance letters of credit in the aggregate face amount of up to $230 million (the “$230 Million LC Facility” or the “2021 LC Facility”). The $230 Million LC Facility is scheduled to expire in December 2021. The obligations under the Letter of Credit Agreement are unconditionally guaranteed on a senior secured basis by us and substantially all of our wholly owned subsidiaries, other than the co-applicants (which are directly obligated thereunder) and several captive insurance subsidiaries and certain other designated or immaterial subsidiaries. The liens securing the $230 Million LC Facility will rank equal in priority with the liens securing obligations under the Credit Agreement. The Letter of Credit Agreement includes financial and other covenants and provisions relating to events of default that are substantially the same as those in the Credit Agreement. As of December 31, 2019, there were approximately $228 million of letters of credit issued (or deemed issued) under the $230 Million LC Facility, leaving approximately $2 million of available capacity.

On October 21, 2019, we entered into Consent and Amendment No. 1 to the Letter of Credit Agreement (the “LC Agreement Amendment”). The LC Agreement Amendment amends, among other things, the compliance levels for McDermott’s leverage ratio and fixed charge coverage ratio for each fiscal quarter through December 31, 2021. The LC Agreement Amendment also modifies (i) the event of default provisions and (ii) covenant provisions in the same manner as provided in the Credit Agreement Amendment. The LC Agreement Amendment also modifies the participation fee we are charged for newly issued letters of credit or with respect to any increase in the amount of any existing letter of credit to 5%.

On December 1, 2019, we entered into Amendment No. 2 to the Letter of Credit Agreement (the “Letter of Credit Agreement Amendment No. 2”). The Letter of Credit Agreement No. 2 amended, among other things, the events of default under the Letter of Credit Agreement to provide that, for so long as the Forbearance Agreement (as defined below) was in effect and the Senior Notes were not accelerated, the failure to make the payment of $69 million of interest on the Senior Notes would not constitute an event of default.

On January 9, 2020, we entered into Amendment No. 3 to the Letter of Credit Agreement (the “Letter of Credit Agreement Amendment No. 3”). The Letter of Credit Agreement Amendment No. 3: (1) amended, among other things, the events of default under the Letter of Credit Agreement to provide that through January 21, 2020, the acceleration of the Senior Notes would not constitute an event of default under the Letter of Credit Agreement; and (2) allows ordinary course auto-renewals of letters of credit despite any acceleration, bankruptcy or other event of default.

Senior Notes

On April 18, 2018, we issued $1.3 billion in aggregate principal of Senior Notes, pursuant to an indenture we entered into with Wells Fargo Bank, National Association, as trustee (the “Senior Notes Indenture”). Interest on the Senior Notes is payable semi-annually in arrears, and the Senior Notes are scheduled to mature in May 2024. However, at any time or from time to time on or after May 1, 2021, we may redeem the Senior Notes, in whole or in part, at the redemption prices (expressed as percentages of principal amount of the Senior Notes to be redeemed) set forth below, together with accrued and unpaid interest to (but excluding) the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period beginning on May 1 of the years indicated:

Optional redemption

Year price 2021 105.313% 2022 102.656% 2023 and thereafter 100.000%

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In addition, prior to May 1, 2021, we may redeem up to 35.0% of the aggregate principal amount of the outstanding Senior Notes, in an amount not greater than the net cash proceeds of one or more qualified equity offerings (as defined in the Senior Notes Indenture) at a redemption price equal to 110.625% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to (but excluding) the date of redemption (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), subject to certain limitations and other requirements. The Senior Notes may also be redeemed, in whole or in part, at any time prior to May 1, 2021 at our option, at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed, plus the applicable premium (as defined in the Senior Notes Indenture) as of, and accrued and unpaid interest to (but excluding) the applicable redemption date (subject to the right of the holders of record on the relevant record date to receive interest due on the relevant interest payment date).

On November 1, 2019, a scheduled interest payment of approximately $69 million was due on the Senior Notes. On November 1, 2019, we did not pay the scheduled interest payment and entered into a 30-day grace period to defer the interest payment in accordance with the Senior Notes Indenture. If we do not make the interest payment within the 30-day grace period, an event of default will have occurred pursuant to the terms of the Senior Notes Indenture. Upon an event of default, the trustee of the Senior Notes or the holders of at least 25% in aggregate principal amount of the Senior Notes then outstanding may declare the principal of and accrued interest on the Senior Notes to be immediately due and payable.

On December 1, 2019, we entered into a Forbearance Agreement (the “Forbearance Agreement”) with an ad hoc group (the “Ad Hoc Group”) of holders of approximately 35% of the Senior Notes. Pursuant to the Forbearance Agreement, the Ad Hoc Group has agreed to forbear from the exercise of certain rights and remedies under the Indenture and supporting documents, including agreeing not to accelerate the Senior Notes obligations (and to instruct the trustee not to accelerate the Senior Notes obligations) as a result of the failure to make the $69 million interest payment. They have agreed to continue this forbearance until January 15, 2020.

Senior notes Covenants—The Senior Notes Indenture contains covenants that, among other things, limit our ability to: (1) incur or guarantee additional indebtedness or issue preferred stock; (2) make investments or certain other restricted payments; (3) pay dividends or distributions on our capital stock or purchase or redeem our subordinated indebtedness; (4) sell assets; (5) create restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us; (6) create certain liens; (7) sell all or substantially all of our assets or merge or consolidate with or into other companies; (8) enter into transactions with affiliates; and (9) create unrestricted subsidiaries. Those covenants are subject to various exceptions and limitations.

Other Financing Arrangements north Ocean (“nO”) Financing―On September 30, 2010, McDermott International, Inc., as guarantor, and NO 105 AS, in which we then had a 75% ownership interest, as borrower, entered into a financing agreement to pay a portion of the construction costs of the NO 105. Borrowings under the agreement are secured by, among other things, a pledge of all of the equity of NO 105 AS, a mortgage on the NO 105, and a lien on substantially all of the other assets of NO 105 AS. The financing agreement requires principal repayment in 17 consecutive semiannual installments of approximately $4 million, which commenced on October 1, 2012.

As of December 31, 2019, the outstanding borrowing under this facility was approximately $8 million and is scheduled to mature in 2020.

Receivables Factoring ―During 2019, we sold, without recourse, approximately $65 million of receivables under an uncommitted receivables purchase agreement in Mexico at a discount rate of applicable LIBOR plus a margin of 1.40%-2.00% and Interbank Equilibrium Interest Rate in Mexico plus a margin of 1.40% - 1.70%. We recorded approximately $2 million of factoring costs in other operating expense during 2019. Ten percent of the receivables sold are withheld and received on the due date of the original invoice. We have received cash, net of fees and amounts withheld, of approximately $57 million under these arrangements during 2019.

Structured Equipment Financing―In the second quarter of 2019, we entered into a $37 million uncommitted revolving re-invoicing facility for the settlement of certain equipment supplier invoices. As of December 31, 2019, we received approximately $32 million under this arrangement, with repayment obligations maturing in January 2020. Interest expense and origination fees associated with this facility were not material.

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Uncommitted Facilities—We are party to a number of short-term uncommitted bilateral credit facilities and surety bond arrangements (the “Uncommitted Facilities”) across several geographic regions, as follows:

December 31, 2019 December 31, 2018 Uncommitted Uncommitted Line Line Capacity Utilized Capacity Utilized (In millions) Bank Guarantee and Bilateral Letter of Credit (1) $ 1,842 $ 1,293 $ 1,669 $ 1,060 (2) 835 601 842 475 Surety Bonds

(1) Approximately $175 million of this capacity is available only upon provision of an equivalent amount of cash collateral.

(2) Excludes approximately $312 million of surety bonds maintained on behalf of CB&I’s former Capital Services Operations, which were sold to CSVC Acquisition Corp (“CSVC”) in June 2017. We also continue to maintain guarantees on behalf of CB&I’s former Capital Services Operations business and we are entitled to an indemnity from CSVC for the surety bonds and guarantees.

The financial institutions that provide the Uncommitted Facilities have no obligation to issue letters of credit or bank guarantees, or to post surety bonds, on our behalf, and they may be able to demand that we provide them with cash or other collateral to backstop these liabilities.

Covenants Compliance

As of December 31, 2019, we were not in compliance with certain covenants and other obligations under our financing arrangements, including (1) the minimum fixed charge coverage and maximum total leverage ratios covenants under the Credit Agreement and the Letter of Credit Agreement; (2) the adjusted EBITDA covenant under the Superpriority Credit Agreement; (3) our obligation to make interest payments as a result of the failure to make the $69 million interest payment due with respect to the Senior Notes; (4) financial covenants under the North Ocean financing agreement; and (5) certain covenants under several of our short-term uncommitted bilateral credit facilities.

The commencement of the Chapter 11 Cases constituted events of default that accelerated our obligations under these facilities. However, the ability of the lenders to exercise remedies was stayed upon commencement of the Chapter 11 Cases and continues to be stayed.

Capital Lease Obligations

Our finance leases as of December 31, 2019 and 2018, included the lease of the Amazon, a pipelay and construction vessel, which was purchased by us in February 2017, sold to an unrelated third party (the “Amazon Owner”) and leased back under a long-term bareboat charter that gave us the right to use the vessel and was recorded as an operating lease. On July 27, 2018, we entered into agreements (the “Amazon Modification Agreements”) providing for certain modifications to the Amazon vessel and related financing and amended bareboat charter arrangements. The total cost of the modifications, including project management and other fees and expenses, is expected to be in the range of approximately $260 million to $290 million. The Amazon Owner is expected to fund the cost of the modifications primarily through an export credit-backed senior loan provided by a group of lenders, supplemented by expected direct capital expenditures by us of approximately $58 million over the course of the modifications. The amended bareboat charter arrangement is accounted for as a finance lease, recognizing Property, plant and equipment and Lease obligation for the present value of future minimum lease payments. The cost of modifications will be recorded in Property, plant and equipment with a corresponding liability for direct capital expenditures not incurred by us. The finance lease obligation will increase upon completion of the modifications and funding by the Amazon Owner. As of December 31, 2019 and 2018, Property, plant and equipment, net included a $49 million and $52 million asset, respectively (net of accumulated amortization of $6 million and $3 million, respectively), and a finance lease liability of approximately $46 million and $53 million, respectively, associated with the Amazon vessel.

Our finance leases as of December 31, 2018 also included $17 million associated with the jack-up barge in our MENA region, leased under a charter agreement, stipulating a purchase obligation at the end of the lease term. On November 11, 2019, we signed a charter modification agreement. Under the modified terms the lease is no longer considered a finance lease and is accounted for as an operating lease as of December 31, 2019.

75 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The commencement of the Chapter 11 Cases constituted events of default under the Amazon charter and the jack-up barge charter. However, the ability of the owners to exercise remedies was stayed upon commencement of the Chapter 11 Cases and continues to be stayed.

Redeemable Preferred Stock

On November 29, 2018 (the “Closing Date”), we completed a private placement of (1) 300,000 shares of 12% Redeemable Preferred Stock, par value $1.00 per share (the “Redeemable Preferred Stock”), and (2) Series A Warrants (the “Series A Warrants”) to purchase approximately 6.8 million shares of our common stock, with an initial exercise price per share of $0.01, for aggregate proceeds of $289.5 million, before payment of approximately $18 million of directly related issuance costs.

Redeemable Preferred Stock—The Redeemable Preferred Stock initially had an Accreted Value (as defined in the Certificate of Designation with respect to the Redeemable Preferred Stock (the “Certificate of Designation”)) of $1,000.00 per share. Pursuant to the Certificate of Designation, the holders of the Redeemable Preferred Stock are entitled to receive cumulative compounding preferred cash dividends quarterly in arrears at a fixed rate of 12.0% per annum compounded quarterly (of which 3.0% accrues each quarter) on the Accreted Value per share (the “Dividend Rate”). The cash dividends are payable only when, as and if declared by our Board of Directors out of funds legally available for payment of dividends. The Certificate of Designation provides that, if a cash dividend is not declared and paid in respect of any dividend payment period ending on or prior to December 31, 2021, then the Accreted Value of each outstanding share of Redeemable Preferred Stock will automatically be increased by the amount of the dividend otherwise payable for such dividend payment period, except the applicable dividend rate for this purpose is 13.0% per annum (the “PIK Dividend Rate”). Such automatic increase in the Accreted Value of each outstanding share of Redeemable Preferred Stock would be in full satisfaction of the preferred dividend that would have otherwise accrued for such dividend payment period. Our Board of Directors declared, and we paid cash dividends on the Redeemable Preferred Stock on the first dividend payment date (December 31, 2018), but our Board of Directors did not declare cash dividends on the Redeemable Preferred Stock on the March 31, June 30, September 30 and December 31, 2019 dividend payment dates and, as a result, the Accreted Value of the Redeemable Preferred Stock was increased by the amount of the accrued but unpaid dividends (i.e., a paid-in-kind (“PIK”) dividend).

On October 21, 2019, in connection with our entering into the Superpriority Credit Agreement, the Credit Agreement Amendment and the LC Agreement Amendment, we entered into a consent and waiver agreement (the “Consent and Waiver Agreement”) with the holders of the Redeemable Preferred Stock. Pursuant to the Consent and Waiver Agreement, we agreed to, among other things: (1) issue to the holders of the Redeemable Preferred Stock shares of Redeemable Preferred Stock in an aggregate amount equal to 3.0% of the Accreted Value; and (2) issue an additional number of Series A Warrants to purchase Common Stock with an initial exercise price per share of $0.01, subject to certain adjustments equal to the product of 1.5% times the total number of shares of Common Stock outstanding as of October 21, 2019. Additionally, we agreed to increase the Dividend Rate and the PIK Dividend Rate to 14.0% per annum and 15.0% per annum, respectively, per share of Redeemable Preferred Stock. The Consent and Waiver Agreement allowed us to incur the indebtedness and other obligations pursuant to Tranche A under the Superpriority Credit Agreement. Additionally, on December 1, 2019 we entered into a second consent and waiver agreement, which allowed us to incur additional indebtedness under the Superpriority Credit Agreement.

The provisions of the RSA and the Plan of Reorganization contemplate that our existing equity interests will be cancelled and discharged in connection with the Chapter 11 Cases and the holders of those equity interests, including the holders of the Redeemable Preferred Stock and the Series A Warrants, will be entitled to no recovery relating to those equity interests.

The fair value upon issuance represented the net impact of $289.5 million of aggregate proceeds, less $18 million of fees and $43 million of fair value assigned to the Series A Warrants (included within Capital in excess of par value in our Balance Sheet). The fair value measurement upon issuance was based on inputs that were not observable in the market and thus represented level 3 inputs. We record accretion as an adjustment to Retained earnings (deficit) over the seven years from the Closing Date through the expected redemption date of November 29, 2025 using the effective interest method. From the Closing Date through December 31, 2019, we recorded cumulative accretion of approximately $17 million with respect to the Redeemable Preferred Stock. As of December 31, 2019, the Redeemable Preferred Stock balance was $290 million, adjusted for accretion and PIK dividends of approximately $44 million. During 2018, approximately $3 million of cash dividends were paid to the holders of the Redeemable Preferred Stock. The fair value measurement of the Series A Warrants was based on the market-observable fair value of our common stock upon issuance and thus represented a level 1 input. The fair value of the additional Series A Warrants issued in connection with the Consent and Waiver Agreement entered into on October 21, 2019 was $5 million as of December 31, 2019 (included within Capital in excess of par value on our Balance Sheet as of December 31, 2019).

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Capital Expenditures

As part of our strategic growth program, our management regularly evaluates our marine vessel fleet and our fabrication yard construction capacity to ensure our fleet and construction capabilities are adequately aligned with our overall growth strategy. These assessments may result in capital expenditures to construct, upgrade, acquire or operate vessels or acquire or upgrade fabrication yards that would enhance or grow our technical capabilities, or may involve engaging in discussions to dispose of certain marine vessels or fabrication yards.

Capital expenditures for 2019, 2018 and 2017 were $92 million, $86 million and $119 million, respectively, and primarily related to: • 2019—our vessel upgrades (including upgrades to the Amazon) and information technology upgrades and our new administrative headquarters in Houston, Texas; • 2018—our vessel upgrades (including upgrades to the Amazon) and information technology upgrades; and • 2017—the acquisition (prior to its subsequent sale-leaseback) of the Amazon vessel, as well as costs associated with upgrading the capabilities of other marine vessels.

In 2020, we expect to spend approximately $169 million for capital projects, such as upgrades to the Amazon, construction associated with a long-term land lease agreement with Saudi Aramco to establish a fabrication facility in Ras Al-Khair, Saudi Arabia, information technology upgrades and capital maintenance projects.

Contractual Obligations

The following table summarizes the company’s consolidated contractual obligations as of December 31, 2019, and the effect such obligations, inclusive of interest costs, are expected to have on our liquidity and cash flows in future periods. Certain amounts included in this table are based on some estimates and assumptions about these obligations, including their duration, anticipated actions by third parties and other factors. The contractual and other obligations we will actually pay in future periods may vary from those reflected in the table, because some estimates and assumptions are subjective.

Long-term debt obligations are shown below according to their stated maturities. All of our debt, including our finance lease obligations, is shown as a current liability in our consolidated balance sheet as of December 31, 2019, as a result of various events of default.

Less than 1-3 3-5 More than Total 1 Year Years Years 5 Years (In millions) Debt $ 4,360 $ 63 $ 845 $ 1,345 $ 2,107 Finance lease obligations 47 4 10 12 21 Estimated interest payments 1,680 410 690 524 56 Information technology obligations (1) 57 21 30 6 - Operating lease obligations (2) 670 102 166 115 287 Self-insurance obligations (3) 19 19 - - Pension funding obligations (4) 17 17 - - - Postretirement benefit funding obligations (4) 2 2 - - - Purchase obligations (5) 13 10 3 - - Unrecognized tax benefits (6) - - - - -

(1) Represents commitments on IT technical support and software maintenance contracts. (2) Represents undiscounted cash payments and does not include the impact of interest. (3) Represents expected 2020 payments associated with our self-insurance programs. Payments beyond one year have not been included, as such amounts are not determinable. (4) Represents expected 2020 contributions to fund our defined benefit pension and other postretirement plans. Contributions beyond one year have not been included, as such amounts are not determinable.

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(5) In the ordinary course of business we enter into commitments (which are expected to be recovered from our customers) for the purchase of materials and supplies on our projects. We do not enter into long-term purchase commitments on a speculative basis for fixed or minimum quantities. (6) Payments for income tax reserves of $68 million are not included, as the timing of specific tax payments is not determinable.

New Accounting Standards

See Note 2, Basis of Presentation and Significant Accounting Policies, to the accompanying Consolidated Financial Statements for a discussion of the potential impact of new accounting standards on our consolidated financial statements.

Critical Accounting Policies and Estimates

Our Consolidated Financial Statements and accompanying notes are presented in U.S. Dollars and prepared in accordance with GAAP. We base our estimates on historical experience and on various other assumptions we believe to be reasonable according to the current facts and circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We believe the following are our most critical accounting policies applied in the preparation of our Consolidated Financial Statements. These policies require our most difficult, subjective and complex judgments, often as a result of the need to make estimates of matters that are inherently uncertain. This discussion should be read in conjunction with our Consolidated Financial Statements and related notes included in this Annual Report on Form 10-K.

78 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

achievement of contractual performance requirements; and contingency, among others. The cumulative impact of revisions in total cost estimates during the progress of work is reflected in the period in which these changes become known, including, to the extent required, the reversal of profit recognized in prior periods and the recognition of losses expected to be incurred on contracts in progress. Additionally, external factors such as weather, customer requirements and other factors outside of our control may affect the progress and estimated cost of a project’s completion and, therefore, the timing and amount of recognition of revenues and income. Due to the various estimates inherent in our contract accounting, actual results could differ from those estimates, which could result in material changes to our consolidated financial statements and related disclosures. See Note 5, Revenue Recognition, to the accompanying Consolidated Financial Statements for further discussion. • Performance Obligation Satisfied at a Point-in-Time Method—Contracts with performance obligations that do not meet the criteria to be recognized over time are required to be recognized at a point-in-time, whereby revenues and gross profit are recognized only when a performance obligation is complete and a customer has obtained control of a promised asset. Revenues for contracts recognized at a point in time include our “generic” catalysts supply and certain manufactured products (which are recognized upon shipment) and certain non-engineering and non-construction oriented services (which are recognized when the services are performed). In determining when a performance obligation is complete for contracts with revenues recognized at a point-in-time, we measure transfer of control considering physical possession of the asset, legal transfer of title, significant risks and rewards of ownership, customer acceptance and our rights to payment. See Note 5, Revenue Recognition, to the accompanying Consolidated Financial Statements for further discussion. • Remaining Performance Obligations (“RPOs”)―RPOs represent the amount of revenues we expect to recognize in the future from our contract commitments on projects. RPOs include the entire expected revenue values for joint ventures we consolidate and our proportionate value for consortiums we proportionately consolidate. We do not include expected revenues of contracts related to unconsolidated joint ventures in our RPOs, except to the extent of any subcontract awards we receive from those joint ventures. Currency risks associated with RPOs which are not mitigated within the contracts are generally mitigated with the use of foreign currency derivative (hedging) instruments, when deemed significant. However, these actions may not eliminate all currency risk exposure included within our long-term contracts. RPOs may not be indicative of future operating results, and projects included in RPOs may be cancelled, modified or otherwise altered by customers. See Note 5, Revenue Recognition, to the accompanying Consolidated Financial Statements for further discussion. • Variable Consideration―Transaction prices for our contracts may include variable consideration, which includes increases to transaction prices for approved and unapproved change orders, claims, incentives and bonuses, and reductions to transaction price for liquidated damages or penalties. Change orders, claims and incentives are generally not distinct from the existing contracts due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. We estimate variable consideration for a performance obligation at the most likely amount to which we expect to be entitled (or the most likely amount we expect to incur in the case of liquidated damages), utilizing estimation methods that best predict the amount of consideration to which we will be entitled (or will be incurred in the case of liquidated damages). We include variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenues recognized will not occur or when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determinations of whether to include estimated amounts in transaction prices are based largely on assessments of our anticipated performance and all information (historical, current and forecasted) reasonably available to us. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenues on a cumulative catch-up basis. To the extent unapproved change orders and claims reflected in transaction price (or excluded from transaction price in the case of liquidated damages) are not resolved in our favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue. See Note 5, Revenue Recognition, to the accompanying Consolidated Financial Statements for further discussion. • Loss Recognition―Revenues from customers may not cover increases in our costs or our total estimated costs. It is possible that current estimates could materially change for various reasons. For all contracts, if a current estimate of total contract cost indicates a loss, the projected loss is recognized in full immediately and reflected in Cost of operations in the Statements of Operations. It is possible that these estimates could change due to unforeseen events, which could result in adjustments to overall contract revenues and costs. Variations from estimated contract performance could result in material adjustments to operating results for any fiscal quarter or year. In our Consolidated Balance Sheets (our “Balance Sheets”), accruals of provisions for estimated losses on all active uncompleted projects are included in Advance billings on contracts. See Note 5, Revenue Recognition, to the accompanying Consolidated Financial Statements for further discussion. • Accounts Receivable and Contract Balances―The timing of when we bill our customers is generally dependent upon advance billing terms, milestone billings based on the completion of certain phases of the work, or when the services are provided or products are shipped.

79 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• Accounts Receivable― Any uncollected billed amounts for our performance obligations recognized over time, including contract retainages to be collected within one year, are recorded within Accounts receivable-trade, net. Any uncollected billed amounts, unbilled receivables for which we have an unconditional right to payment, and unbilled receivables for our performance obligations recognized at a point in time are also recorded within Accounts receivable–trade, net. Contract retainages to be collected beyond one year are recorded within Accounts receivable–long–term retainages. We establish allowances for doubtful accounts based on our assessments of collectability. See Note 8, Accounts Receivable, to the accompanying Consolidated Financial Statements for further discussion. • Contracts in Progress—Projects with performance obligations recognized over time that have revenues recognized to date in excess of cumulative billings are reported within Contracts in progress on our Balance Sheets. We expect to invoice customers for all unbilled revenues, and our payment terms are generally for less than 12 months upon billing. Our contracts typically do not include a significant financing component. • Advance Billings on Contracts—Projects with performance obligations recognized over time that have cumulative billings in excess of revenues are reported within Advance billings on contracts on our Balance Sheets. Our Advance billings on contracts balance also includes our accruals of provisions for estimated losses on all active projects.

Combination-Related Purchase Price Allocation— The aggregate purchase price noted above was allocated to the major categories of assets and liabilities acquired based upon their estimated fair values at the Combination Date, which were based, in part, upon external appraisal and valuation of certain assets, including specifically identified intangible assets and property and equipment. The excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired, totaling approximately $5 billion, was recorded as goodwill. Our final purchase price allocation was completed in the second quarter of 2019. See Note 3, Business Combination and Note 9, Goodwill and Other Intangible Assets, to the accompanying Consolidated Financial Statements for further discussion.

Goodwill—Goodwill represents the excess of the purchase price over the fair value of net assets acquired in connection with the Combination. Goodwill is not amortized, but instead is reviewed for impairment at least annually at a reporting unit level, absent any interim indicators of impairment. Interim testing for impairment is performed if indicators of potential impairment exist. We perform our annual impairment assessment on October 1 of each year. We identify a potential impairment by comparing the fair value of the applicable reporting unit to its net book value, including goodwill. If the net book value exceeds the fair value of the reporting unit, we measure the impairment by comparing the carrying value of the reporting unit to its fair value.

To determine the fair value of our reporting units and test for impairment, we utilize an income approach (discounted cash flow method) as we believe this is the most direct approach to incorporate the specific economic attributes and risk profiles of our reporting units into our valuation model. We generally do not utilize a market approach, given the lack of relevant information generated by market transactions involving comparable businesses. However, to the extent market indicators of fair value become available, we consider such market indicators in our discounted cash flow analysis and determination of fair value. See Note 3, Business Combination and Note 9, Goodwill and Other Intangible Assets, to the accompanying Consolidated Financial Statements, for further discussion.

Intangible and Other Long-Lived Assets—Our finite-lived intangible assets resulted from the Combination and are amortized over their estimated remaining useful economic lives. Our project-related intangible assets are amortized as the applicable projects progress, customer relationships are amortized utilizing an accelerated method based on the pattern of cash flows expected to be realized, taking into consideration expected revenues and customer attrition, and our other intangibles are amortized utilizing a straight-line method.

We review tangible assets and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of the asset may not be recoverable. If a recoverability assessment is required, the estimated future undiscounted cash flow associated with the asset or asset group will be compared to its respective carrying amount to determine if an impairment exists. If the asset or asset group fails the recoverability test, we will perform a fair value measurement to determine and record an impairment charge. See Note 9, Goodwill and Other Intangible Assets and Note 16, Fair Value Measurements, to the accompanying Consolidated Financial Statements, for additional information about our impairment analysis and associated impairment charges related to our tangible assets and finite- lived intangible assets during 2019.

80 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Leases—We classify an arrangement as a lease at inception if we have the right to control the use of an identified asset we do not legally own for a period of time in exchange for consideration. In general, leases with an initial term of 12 months or less are not recorded on our Balance Sheet unless it is reasonably certain we will renew the lease. All leases with an initial term of more than 12 months, whether classified as operating or finance, are recorded on our Balance Sheet based on the present values of lease payments over the respective lease term, determined at lease commencement. Determination of the present values of lease payments requires the use of discount rates. We use the implicit rate in each applicable lease agreement when available. Most of our leases do not provide an implicit interest rate; therefore, we use an incremental borrowing rate based on information available at the commencement date for each such lease.

Our lease terms may include options to extend or terminate the lease. Lease expense for operating leases and the amortization of the right-of-use asset for finance leases are recognized on a straight-line basis over the respective lease terms, in each case taking into account such option when it is reasonably certain we will exercise that option.

We have lease agreements with lease and non-lease components, which are generally accounted for separately for all leases other than leases at our construction project sites. Non-lease components included in assets and obligations under operating leases are not material to our consolidated financial statements.

For our joint ventures, consortiums and other collaborative arrangements (referred to as “joint ventures” and “consortiums”), the right-of-use asset and lease obligations are generally recognized by the party that enters into the lease agreement, which could be the joint venture directly, one of our joint venture members or us. We have recognized our proportionate share of leases entered into by our joint ventures, where the joint venture has the right to control the use of an identified leased asset.

Derivative Financial Instruments—We utilize derivative financial instruments in certain circumstances to mitigate the effects of changes in foreign currency exchange rates and interest rates, as described below. • Foreign Currency Rate Derivatives— We do not engage in currency speculation. However, we utilize foreign currency exchange rate derivatives on an ongoing basis to hedge against certain foreign currency related operating exposures. We generally apply hedge accounting treatment for contracts used to hedge operating exposures and designate them as cash flow hedges. Therefore, gains and losses are included in AOCI until the associated underlying operating exposure impacts our earnings, at which time the impact of the hedge is recorded within the income statement line item associated with the underlying exposure. Changes in the fair value of instruments that we do not designate as cash flow hedges are recognized in the Statement of Operations line item associated with the underlying exposure. • Interest Rate Derivatives— On May 8, 2018, we entered into a U.S. dollar interest rate swap arrangement to mitigate exposure associated with cash flow variability on the Term Facility in an aggregate notional value of $1.94 billion. The swap arrangement had been designated as a cash flow hedge. As of December 31, 2019, in light of the circumstances described in Note 2, Basis of Presentation and Significant Accounting Policies, to the accompanying Consolidated Financial Statements, we believe that our hedged forecasted transaction is not probable to occur and, as such, our hedge accounting has ceased and our previously recognized unrealized losses in AOCI of approximately $67 million have been reclassified into interest expense in our Statement of Operations for the year ended December 31, 2019.

See Note 16, Fair Value Measurements, and Note 17, Derivative Financial Instruments, to the accompanying Consolidated Financial Statements for further discussion.

Joint Venture and Consortium Arrangements—In the ordinary course of business, we execute specific projects and conduct certain operations through joint venture, consortium and other collaborative arrangements (referred to as “joint ventures” and “consortiums”). We have various ownership interests in these joint ventures and consortiums, with such ownership typically proportionate to our decision making and distribution rights. The joint ventures and consortiums generally contract directly with their third-party customers; however, services may be performed directly by the joint ventures and consortium, us, our co-venturers, or a combination thereof.

Joint ventures and consortium net assets consist primarily of working capital and property and equipment, and assets may be restricted from use for obligations outside of the joint venture or consortiums. These joint ventures and consortiums typically have limited third-party debt or have debt that is non-recourse in nature. They may provide for capital calls to fund operations or require participants in the joint venture or consortiums to provide additional financial support, including advance payment or retention letters of credit.

81 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Each joint venture or consortium is assessed at inception and on an ongoing basis as to whether it qualifies as a Variable Interest Entity (“VIE”) under the consolidations guidance in ASC Topic 810, Consolidations. A venture generally qualifies as a VIE when it (1) meets the definition of a legal entity, (2) absorbs the operational risk of the projects being executed, creating a variable interest, (3) lacks sufficient capital investment from the co-venturers, potentially resulting in the joint venture or consortium requiring additional subordinated financial support to finance its future activities, (4) structured with non-substantive voting rights, and (5) the equity holders, as a group, lack the characteristics of a controlling financial interest.

If at any time a joint venture or consortium qualifies as a VIE, we perform a qualitative assessment to determine whether we are the primary beneficiary of the VIE and therefore need to consolidate the VIE. We are the primary beneficiary if we have (1) the power to direct the economically significant activities of the VIE and (2) the right to receive benefits from and obligation to absorb losses of the VIE. If the joint venture or consortium is a VIE and we are the primary beneficiary, or we otherwise have the ability to control the joint venture or consortium, it is consolidated. If we determine we are not the primary beneficiary of the VIE or only have the ability to significantly influence, rather than control the joint venture or consortium, it is not consolidated.

We account for unconsolidated joint ventures and consortium arrangements using either (1) proportionate consolidation for both the Balance Sheet and Statement of Operations when we meet the applicable accounting criteria to do so, or (2) the equity method. For incorporated unconsolidated joint ventures and consortiums where we utilize the equity method of accounting, we record our share of the profit or loss of the investments, net of income taxes, in the Statements of Operations. Results from unconsolidated joint ventures that are deemed to be integral to our operations are recorded within Income (loss) from investments in unconsolidated affiliates in the Statements of Operations, and results from any other joint ventures are recorded within Non-operating loss from investments in unconsolidated affiliates in the Statements of Operations. We evaluate our equity method investments for impairment when events or changes in circumstances indicate the carrying value of such investments may have experienced an other-than-temporary decline in value. When evidence of loss in value has occurred, we compare the estimated fair value of our investment to the carrying value of our investment to determine whether an impairment has occurred. If the estimated fair value is less than the carrying value and we consider the decline in value to be other-than-temporary, the excess of the carrying value over the estimated fair value is recognized in the Consolidated Financial Statements as an impairment. See Note 10, Joint Venture and Consortium Arrangements, to the accompanying Consolidated Financial Statements for further discussion.

Insurance and Self-Insurance—Our wholly owned “captive” insurance subsidiaries provide coverage for our retentions under employer’s liability, general and products liability, automobile liability and workers’ compensation insurance and, from time to time, builder’s risk and marine hull insurance within certain limits. We may also have business reasons in the future to arrange for our insurance subsidiaries to insure other risks which we cannot or do not wish to transfer to outside insurance companies. Premiums charged and reserves related to these insurance programs are based on the facts and circumstances specific to the insurance claims, our past experience with similar claims, loss factors and the performance of the outside insurance market for the type of risk at issue. The actual outcome of insured claims could differ significantly from estimated amounts. We maintain actuarially determined accruals in our Consolidated Balance Sheets to cover self-insurance retentions for the coverages discussed above. These accruals are based on various assumptions developed utilizing historical data to project future losses. Loss estimates in the calculation of these accruals are adjusted as required based upon reported claims, actual claim payments and settlements and claim reserves. These loss estimates and accruals recorded in our Consolidated Financial Statements for claims have historically been reasonably accurate. Claims as a result of our operations, if greater in frequency or severity than actuarially predicted, could adversely impact the ability of our captive insurance subsidiaries to respond to all claims presented. A hypothetical ten percent change in our self-insurance reserves at December 31, 2019 would have impacted our pre-tax income by approximately $10 million for 2019.

Pension and Postretirement Benefit Plans—We have both defined benefit (funded and unfunded) and defined contribution plans. For the defined benefit plans, a projected benefit obligation is calculated annually by independent actuaries using the unit credit method. We recognize actuarial gains and losses on pension and postretirement benefit plans immediately in our operating results. These gains and losses are generally measured annually, as of December 31, and, accordingly, will normally be recorded during the fourth quarter, unless an earlier remeasurement is required. Should actual experience differ from actuarial assumptions, the projected pension benefit obligation and net pension cost and accumulated postretirement benefit obligation and postretirement benefit cost would be affected in future years. Pension costs primarily represent the increase in the actuarial present value of the obligation for pension benefits based on employee service during the year and the interest on this obligation in respect of employee service in previous years, offset by expected return on plan assets.

82 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

We estimate income or expense related to our pension and postretirement benefit plans based on actuarial assumptions, including assumptions regarding discount rates and expected returns on plan assets, adjusted for current period actuarial gains and losses. We determine our discount rate based on a review of published financial data and discussions with our third-party actuary regarding rates of return on high-quality, fixed-income investments currently available and expected to be available during the period to maturity of our pension obligations. Based on historical data and discussions with our investment consultant, we determine our expected return on plan assets, utilizing the expected long-term rate of return on our plan assets and the market value of our plan assets. The expected long-term rate of return is based on the expected return of the various asset classes held in the plan, weighted by the target allocation of the plan’s assets. Changes in these assumptions can result in significant changes in our estimated pension income or expense and our consolidated financial condition. We revise our assumptions annually based on changes in current interest rates, return on plan assets and the underlying demographics of our workforce. These assumptions are reasonably likely to change in future periods and may have a material impact on our future earnings. See Note 15, Pension and Postretirement Benefits, to the accompanying Consolidated Financial Statements for further discussion.

Loss Contingencies—We record liabilities for loss contingencies when it is probable that a liability has been incurred and the amount of loss is reasonably estimable. We provide disclosure when there is a reasonable possibility that the ultimate loss will exceed by a material amount the recorded provision or if the loss is not reasonably estimable but is expected to be material to our financial results. We are currently involved in litigation and other proceedings, as discussed in Note 23, Commitments and Contingencies, to the accompanying Consolidated Financial Statements. We have accrued our estimates of the probable losses associated with these matters, and associated legal costs are generally recognized as incurred. However, our losses are typically resolved over long periods of time and are often difficult to estimate due to various factors, including the possibility of multiple actions by third parties. Therefore, it is possible future earnings could be affected by changes in our estimates related to these matters.

Income Taxes—Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using currently enacted income tax rates for the years in which the differences are expected to reverse. We provide for income taxes based on the tax laws and rates in the countries in which we conduct our operations. McDermott International, Inc. is a Panamanian corporation that earns all of its income outside of Panama. As a result, we are not subject to income tax in Panama. During 2018, following the Combination, McDermott became a U.K. tax resident. We operate in numerous taxing jurisdictions around the world. Each of these jurisdictions has a regime of taxation that varies, not only with respect to statutory rates, but also with respect to the basis on which these rates are applied. These variations, along with changes in our mix of income or loss from these jurisdictions, may contribute to shifts, sometimes significant, in our effective tax rate.

On a periodic and ongoing basis, we evaluate our net deferred tax assets (“DTAs”) (including our net operating loss (“NOL”) DTAs), and assess the appropriateness of our valuation allowances (“VAs”). A VA is provided to offset any net DTAs if, based on the available evidence, it is more likely than not that some or all of the DTAs will not be realized. The realization of our net DTAs depends on our ability to generate sufficient future taxable income of the appropriate character and in the appropriate jurisdictions. In assessing the need for a VA, we consider both positive and negative evidence related to the likelihood of realization of the DTAs. If, based on the weight of available evidence, our assessment indicates it is more likely than not a DTA will not be realized, we record a VA. Our assessments include, among other things, the amount of taxable temporary differences which will result in future taxable income, evaluations of existing and anticipated market conditions, analysis of recent and historical operating results (including cumulative losses over multiple periods) and projections of future results, strategic plans and alternatives for associated operations, as well as asset expiration dates, where applicable.

Income tax and associated interest and penalty reserves, where applicable, are recorded in those instances where we consider it more likely than not that additional tax will be due in excess of amounts reflected in income tax returns filed worldwide, irrespective of whether we have received tax assessments. We continually review our exposure to additional income tax obligations and, as further information becomes known or events occur, changes in our tax, interest and penalty reserves may be recorded within income tax expense. See Note 18, Income Taxes, to the accompanying Consolidated Financial Statements for further discussion.

83 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Exchange Risk

In the normal course of business, our results of operations are exposed to certain market risks, primarily associated with fluctuations in currency exchange rates.

We have operations in many locations around the world and are involved in transactions in currencies other than those of our entity’s functional currencies, which could adversely affect our results of operations due to changes in currency exchange rates or weak economic conditions in foreign markets. We manage these risks associated with currency exchange rate fluctuations by hedging those risks with foreign currency derivative instruments. Historically, we have hedged those risks with foreign currency forward contracts. In certain cases, contracts with our customers may contain provisions under which payments from our customers are denominated in U.S. dollars and in a foreign currency. The payments denominated in a foreign currency are designed to compensate us for costs that we expect to incur in such foreign currency. In these cases, we may use derivative instruments to reduce the risks associated with currency exchange rate fluctuations arising from differences in timing of our foreign currency cash inflows and outflows. The related gains and losses on these contracts are either: (1) deferred as a component of AOCI until the hedged item is recognized in earnings; (2) offset against the change in fair value of the hedged firm commitment through earnings; or (3) recognized immediately in earnings.

As of December 31, 2019, the notional value of our outstanding forward contracts to hedge certain foreign currency exchange-related operating exposures was $664 million. The total fair value of these contracts was a net liability of approximately $9 million as of December 31, 2019. The potential change in fair value for our outstanding contracts resulting from a hypothetical ten percent change in quoted foreign currency exchange rates would have been approximately $12 million as of December 31, 2019. This potential change in fair value of our outstanding contracts would be offset by the change in fair value of the associated underlying operating exposures.

We are exposed to fluctuating exchange rates related to the effects of translating financial statements of entities with functional currencies other than the U.S. Dollar into our reporting currency. Net movements in the Australian Dollar, British Pound, and Euro exchange rates against the U.S. Dollar unfavorably impacted the cumulative translation adjustment component of AOCI by approximately $24 million, net of tax, and our cash balance by approximately $22 million as of December 31, 2019. We generally do not hedge our exposure to potential foreign currency translation adjustments.

Interest Rate Risk

On May 8, 2018, we entered into a U.S. dollar interest rate swap arrangement to mitigate exposure associated with cash flow variability on the Term Facility in an aggregate notional value of $1.94 billion. The swap arrangement had been designated as a cash flow hedge. As of December 31, 2019, in light of the circumstances described in Note 2, Basis of Presentation and Significant Accounting Policies, to the accompanying Consolidated Financial Statements, we believe that our hedged forecasted transaction is not probable to occur and as such, our hedge accounting has ceased and our previously recognized unrealized losses in AOCI of approximately $67 million have been reclassified into interest expense in our Statement of Operations for the year ended December 31, 2019.

As of December 31, 2019, the fair values of obligations outstanding under the Term Facility, Senior Notes and the Superpriority Agreement, based on current market rates for debt with similar credit risk and maturities, were approximately $1.3 billion, $130 million and $826 million, respectively, and were categorized within level 2 on the valuation hierarchy. See Note 16, Fair Value Measurements, to the accompanying Consolidated Financial Statements for further discussion of our financial instruments.

84 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of McDermott International, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of McDermott International, Inc. (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) and our report dated February 28, 2020, expressed an unqualified opinion thereon.

The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring operating losses, has a working capital deficiency and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. In addition, the Company is not in compliance with the covenants included in its loan agreements with banks. Management’s evaluation of the events and conditions and management’s plans regarding these matters also are described in Note 2. The December 31, 2019 consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

Adoption of ASU No. 2016-02

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases in 2019 due to the adoption of ASU No. 2016- 02, Leases.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

85 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue recognition under long-term contracts

Description of the As described in Note 2 to the financial statements, the Company generally recognizes revenue for fixed price contracts over time using an Matter input method described as the cost-to-cost approach to determine the extent of progress towards completion of performance obligations and an estimate of total contract revenue. Under the cost-to-cost approach, the determination of the progress towards completion requires management to prepare estimates of the costs to complete. These estimates are subject to considerable judgment and could be impacted by such items as changes to the project schedule; the cost of labor, material, and subcontractors; and productivity. In addition, the Company’s contracts may include variable consideration, which includes increases to transaction prices for approved and unapproved change orders, claims, incentives and bonuses, and reductions to transaction price for liquidated damages or penalties. Management must also estimate the variable consideration the Company expects to receive in order to estimate the total contract revenue.

Auditing management’s estimate of the progress towards completion of its projects was complex and subjective because of the considerable judgment required to evaluate management’s determination of the forecasted costs to complete its fixed price contracts as future results may vary significantly from past estimates due to changes in facts and circumstances. In addition, auditing the Company’s measurement of variable consideration was also complex and highly judgmental as increases to transaction prices for approved and unapproved change orders, claims, incentives and bonuses, and reductions to transaction price for liquidated damages or penalties can have a material effect on the amount of revenue recognized and require significant estimation by management regarding various possible outcomes.

How We Addressed the We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company's processes and controls related Matter in Our Audit to contract revenue recognition, including key controls related to monitoring projected project costs, profit estimates, and variable consideration. To test the Company’s cost-to-cost estimates, our audit procedures included, among others, evaluating the appropriate application of the cost-to-cost method; testing the significant assumptions discussed above used to develop the estimated cost to complete; and testing the completeness and accuracy of the underlying data. To assess management’s estimated costs, we performed audit procedures that included, among others, agreeing the estimates to supporting documentation; conducting interviews with and reviewing questionnaires prepared by project personnel; attending selected project review meetings; performing site visits to selected projects to observe progress; analyzing trends of productivity; reviewing support for estimates of project contingencies; and performing lookback analyses to historical actual costs to assess management’s ability to estimate. To test the estimated variable consideration, we performed audit procedures that included, among other things, obtaining and reviewing executed contracts including any significant amendments, change orders or claims, confirming key terms directly with the Company’s customers, and evaluating management’s estimates related to pending change orders, claims, liquidated damages or penalties by obtaining management’s probability assessments, corroborating key data points to contractual language and entitlement clauses, assessing historical price recovery rates on similar variable considerations, and considering the relationship between the Company and its customer to assess management’s judgment.

86 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Valuation of Goodwill

Description of the At December 31, 2019, the Company had $1,286 million of goodwill. As described in Note 2 to the consolidated financial statements, Matter goodwill is reviewed for impairment at least annually in the fourth quarter at a reporting unit level. Interim testing for impairment is performed if indicators of potential impairment exist. As further discussed in Note 9, in the current year the Company recorded impairments to goodwill of $1,111 million and $319 million in its North, Central and South America (“NCSA”) and Europe, Africa, Russia and Caspian (“EARC”) reporting units, respectively.

Auditing management’s goodwill impairment test was complex and highly judgmental due to the significant estimation required in determining the fair values of the reporting units. Fair value was estimated by management based on an income approach using a discounted cash flow model. These fair value estimates were sensitive to significant assumptions such as the weighted average cost of capital including company specific risk premiums, revenue and gross margin projections, and terminal values, which reflect management’s expectations about future market or economic conditions.

How We Addressed the We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s goodwill Matter in Our Audit impairment review process, including management’s review of the significant assumptions used to determine the fair values of the reporting units. To test the estimated fair value of the Company’s reporting units, we performed audit procedures that included, among others, assessing the methodology and testing the significant assumptions and the underlying data used by the Company in its analyses. We compared the revenue and gross margin projections used by management to recent forecasts, current backlog and project estimates, and the Company’s historical results. We assessed the historical accuracy of management’s revenue and gross margin projections. We compared the growth rates to current industry and economic trends and other guideline companies within the same industry. We performed sensitivity analyses of the significant assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in these assumptions. We searched for and evaluated information that corroborates or contradicts the Company’s assumptions, such as market indicators of value. In addition, when relevant, we reviewed the reconciliation of the fair value of all reporting units to the market capitalization of the Company, including assessing the implied control premium. Finally, we involved our valuation specialists to assist in reviewing the valuation methodology and testing the terminal values and weighted average cost of capital, including company specific risk premiums for each reporting unit.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2018. Houston, Texas February 28, 2020

87 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of McDermott International, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of operations, comprehensive income, cash flows, and equity of McDermott International, Inc. and subsidiaries (the “Company”) for the year ended December 31, 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

/s/ DELOITTE & TOUCHE LLP Houston, Texas February 21, 2018 (July 31, 2018 as to notes 2, 5, 18 19, 20, 22, and 24 to the consolidated financial statements) We began serving as the Company’s auditor in 2006. In 2018 we became the predecessor auditor.

88 CONSOLIDATED FINANCIAL STATEMENTS

McDERMOTT INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS

Year ended December 31, 2019 2018 2017 (In millions, except per share amounts) Revenues $ 8,431 $ 6,705 $ 2,985

Costs and Expenses: Cost of operations 8,210 ` 6,104 2,449 Project intangibles and inventory-related amortization 34 83 - Total cost of operations 8,244 6,187 2,449 Research and development expenses 36 20 5 Selling, general and administrative expenses 284 282 204 Other intangibles amortization 87 62 - Transaction costs 57 48 9 Restructuring and integration costs 114 134 - Goodwill impairment 1,430 2,168 - Intangible assets impairment 162 - - Other asset impairments 18 58 1 Loss (gain) on asset disposals 104 3 (2) Total expenses 10,536 8,962 2,666

Income (loss) from investments in unconsolidated affiliates 34 13 (12) Investment in unconsolidated affiliates-related amortization (11) (12) - Operating (loss) income (2,082) (2,256) 307

Other expense: Interest expense, net (735) (259) (63) Other non-operating income (expense), net (9) (56) 5 Total other expense, net (744) (315) (58)

(Loss) income before provision for income taxes (2,826) (2,571) 249

Income tax expense 58 104 69

Non-operating loss from investments in unconsolidated affiliates - (3) (2)

Net (loss) income (2,884) (2,678) 178

Less: Net income (loss) attributable to noncontrolling interests 25 9 (1)

Net (loss) income attributable to McDermott $ (2,909) $ (2,687) $ 179

Dividends on redeemable preferred stock (44) (3) - Accretion of redeemable preferred stock (16) (1) -

Net (loss) income attributable to common stockholders (2,969) (2,691) 179

Net (loss) income per share attributable to common stockholders Basic $ (16.31) $ (17.94) $ 1.97 Diluted $ (16.31) $ (17.94) $ 1.88

Shares used in the computation of net (loss) income per share Basic 182 150 91 182 150 95 Diluted

See accompanying Notes to the Consolidated Financial Statements.

89 CONSOLIDATED FINANCIAL STATEMENTS

McDERMOTT INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Year ended December 31, 2019 2018 2017 (In millions) Net (loss) income $ (2,884) (2,678) $ 178 Other comprehensive (loss) income, net of tax: (Loss) gain on derivatives 28 (38) 23 Actuarial pension gains - 6 - Foreign currency translation (24) (24) (7) Total comprehensive (loss) income (2,880) (2,734) 194 Less: Comprehensive income (loss) attributable to noncontrolling interests 25 9 (1) $ (2,905) $ (2,743) $ 195 Comprehensive (loss) income attributable to McDermott

See accompanying Notes to the Consolidated Financial Statements.

90 CONSOLIDATED FINANCIAL STATEMENTS

McDERMOTT INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS December 31, 2019 2018 (In millions, except per share amounts) Assets Current assets: Cash and cash equivalents ($213 and $146 related to variable interest entities ("VIEs")) $ 800 $ 520 Restricted cash and cash equivalents 393 325 Accounts receivable—trade, net ($102 and $29 related to VIEs) 1,087 932 Accounts receivable—other ($32 and $57 related to VIEs) 185 175 Contracts in progress ($195 and $144 related to VIEs) 795 704 Project-related intangible assets, net 48 137 Inventory 52 101 Other current assets ($25 and $24 related to VIEs) 195 139 Total current assets 3,555 3,033 Property, plant and equipment, net 2,129 2,067 Operating lease right-of-use assets 364 - Accounts receivable—long-term retainages 24 62 Investments in unconsolidated affiliates 455 452 Goodwill 1,286 2,654 Other intangibles, net 751 1,009 Other non-current assets 173 163 Total assets $ 8,737 $ 9,440

Liabilities, Mezzanine Equity and Stockholders' Equity Current liabilities: Revolving credit facility $ 801 $ - Debt 4,306 30 Lease obligations 145 8 Accounts payable ($182 and $277 related to VIEs) 1,105 595 Advance billings on contracts ($542 and $717 related to VIEs) 1,419 1,954 Project-related intangible liabilities, net 10 66 Accrued liabilities ($69 and $136 related to VIEs) 1,658 1,564 Total current liabilities 9,444 4,217 Long-term debt - 3,393 Long-term lease obligations 304 66 Deferred income taxes 59 47 Other non-current liabilities 783 664 Total liabilities 10,590 8,387 Commitments and contingencies Mezzanine equity: Redeemable preferred stock 290 230 Stockholders' equity: Common stock, par value $1.00 per share, authorized 255 shares; issued 196 and 183 shares, respectively 196 183 Capital in excess of par value 3,553 3,539 Accumulated deficit (5,693) (2,719) Accumulated other comprehensive loss (103) (107) Treasury stock, at cost: 3 and 3 shares, respectively (96) (96) Total McDermott Stockholders' Equity (2,143) 800 Noncontrolling interest - 23 Total stockholders' equity (2,143) 823 $ 8,737 $ 9,440 Total liabilities and stockholders' equity

See accompanying Notes to the Consolidated Financial Statements.

91 CONSOLIDATED FINANCIAL STATEMENTS

McDERMOTT INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended December 31, 2019 2018 2017 (In millions) Cash flows from operating activities: Net (loss) income $ (2,884) $ (2,678) $ 178 Non-cash items included in net (loss) income: Goodwill impairment 1,430 2,168 - Depreciation and amortization 267 279 101 Intangible assets impairment 162 - - Loss on disposal of APP 101 - - Debt issuance cost amortization 313 36 13 Other asset impairment 18 58 1 Stock-based compensation charges 20 44 23 Deferred taxes 12 21 7 Actuarial pension loss (gain) 6 47 (5) Other non-cash items - - (6) Changes in operating assets and liabilities, net of effects of businesses acquired (disposed): Accounts receivable (205) 300 91 Contracts in progress, net of advance billings on contracts (627) (278) (450) Inventory (24) - - Accounts payable 497 (156) 105 Other current and non-current assets (16) 63 (22) Investments in unconsolidated affiliates (12) (9) 14 Other current and non-current liabilities (34) 34 86 Total cash (used in) provided by operating activities (976) (71) 136

Cash flows from investing activities: Business combinations, net of cash acquired (7) (2,374) - Proceeds from asset disposals, net 83 69 56 Purchases of property, plant and equipment (92) (86) (119) Advances related to proportionately consolidated consortiums (258) (241) - Investments in unconsolidated affiliates (4) (16) (2) Total cash used in investing activities (278) (2,648) (65)

Cash flows from financing activities: Revolving credit facility borrowings 2,451 - - Revolving credit facility repayments (1,650) - - Structured equipment financing 32 - - Proceeds from debt 800 3,560 - Repayment of debt and finance lease obligations (39) (545) (235) Proceeds from issuance of redeemable preferred stock - 290 - Dividends paid to holders of redeemable preferred stock - (3) - Advances related to equity method joint ventures and proportionately consolidated consortiums 237 158 - Debt and letter of credit issuance costs (160) (217) (21) Redeemable preferred stock issuance costs - (18) - Debt extinguishment costs - (10) - Repurchase of common stock (4) (14) (7) Acquisition of NCI - - (11) Distributions to joint venture members (43) - (1) Total cash provided by (used in) financing activities 1,624 3,201 (275)

Effects of exchange rate changes on cash, cash equivalents and restricted cash (22) (45) - Net increase in cash, cash equivalents and restricted cash 348 437 (204) Cash, cash equivalents and restricted cash at beginning of period 845 408 612 Cash, cash equivalents and restricted cash at end of period $ 1,193 $ 845 $ 408

Supplemental Cash Flow Information: Cash paid for interest 283 212 50 Cash paid for income taxes, net 96 141 45 Supplemental Disclosure of Noncash Investing Activities: Assets acquired through capital lease - 72 - Supplemental Disclosure of Noncash Financing Activities: Capital lease - 72 - Vendor equipment financing - - 16 Note payable in connection with noncontrolling interest distribution - - (5)

See accompanying Notes to the Consolidated Financial Statements.

92 CONSOLIDATED FINANCIAL STATEMENTS

McDERMOTT INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Retained Accumulated Common Capital in Earnings/ Other Noncontrolling Stock Par Excess of (Accumulated Comprehensive Treasury Stockholders' Interest Total Value Par Value Deficit) Loss ("AOCI") Stock Equity ("NCI") Equity (In millions) Balance at December 31, 2016 83 1,862 (227) (67) (95) 1,556 39 1,595 Net income (loss) - - 179 - - 179 (1) 178 Other comprehensive income (loss), net of tax - - - 16 - 16 - 16 Common stock issued 15 (15) ------Stock-based compensation charges - 15 - - - 15 - 15 Purchase of treasury shares - - - - (7) (7) - (7) Retirement of common stock - (6) - - 6 - - - Purchase of shares from NCI - 2 - - - 2 (10) (8) Balance at December 31, 2017 98 1,858 (48) (51) (96) 1,761 28 1,789 Adoption of ASC 606 - - 20 - - 20 - 20 Balance at January 1, 2018 98 1,858 (28) (51) (96) 1,781 28 1,809 Net (loss) income - - (2,687) - - (2,687) 9 (2,678) CB&I Combination 85 1,608 - - - 1,693 (14) 1,679 Other comprehensive loss, net of tax - - - (56) - (56) - (56) Common stock issued 1 (1) ------Stock-based compensation charges - 44 - - - 44 - 44 Warrants - 43 - - 43 - 43 Accretion and dividends on redeemable preferred stock - - (4) - - (4) - (4) Purchase of treasury shares - - - - (14) (14) - (14) Retirement of common stock (1) (13) - - 14 - - - Balance at December 31, 2018 $ 183 $ 3,539 $ (2,719) $ (107) $ (96) $ 800 $ 23 $ 823 Net (loss) income - - (2,909) - - (2,909) 25 (2,884) Other comprehensive loss, net of tax - - - 4 - 4 - 4 Common stock issued 13 (13) ------Stock-based compensation charges - 20 - - - 20 - 20 Warrants 5 (5) - Accretion and dividends on redeemable preferred stock - - (60) - - (60) - (60) Conversion of non-controlling interest - 2 - - - 2 (48) (46) Purchase of treasury shares - - - - (4) (4) - (4) Retirement of common stock (1) (3) - - 4 - - - Other 1 3 - - - 4 - 4 Balance at December 31, 2019 $ 196 $ 3,553 $ (5,693) $ (103) $ (96) $ (2,143) $ - $ (2,143)

See accompanying Notes to the Consolidated Financial Statements.

93 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

McDERMOTT INTERNATIONAL, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS

PAGE Note 1—Nature of Operations and Organization 95 Note 2—Basis of Presentation and Significant Accounting Policies 95 Note 3—Business Combination 106 Note 4—Acquisition and Disposition Transactions 109 Note 5—Revenue Recognition 110 Note 6—Project Changes in Estimates 113 Note 7— Cash, Cash Equivalents and Restricted Cash 114 Note 8—Accounts Receivable 114 Note 9—Goodwill and Other Intangible Assets 114 Note 10—Joint Venture and Consortium Arrangements 117 Note 11—Supplemental Balance Sheet Detail 120 Note 12—Restructuring and Integration Costs 120 Note 13—Debt 121 Note 14—Capital Lease Obligations 132 Note 15—Pension and Postretirement Benefits 134 Note 16—Fair Value Measurements 140 Note 17—Derivative Financial Instruments 141 Note 18—Income Taxes 143 Note 19—Equity-based Compensation 146 Note 20—Stockholders’ Equity 148 Note 21—Redeemable Preferred Stock 149 Note 22—Earnings per Share 150 Note 23—Commitments and Contingencies 151 Note 24—Segment Reporting 154 Note 25—Quarterly Financial Data (unaudited) 158

94 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

McDERMOTT INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019

NOTE 1—NATURE OF OPERATIONS AND ORGANIZATION nature of Operations

McDermott International, Inc. (“McDermott,” “we” or “us”), a corporation incorporated under the laws of the Republic of Panama in 1959, is a fully integrated provider of engineering, procurement, construction and installation (“EPCI”) and technology solutions to the energy industry. We design and build end-to-end infrastructure and technology solutions to transport and transform oil and gas into a variety of products. Our proprietary technologies, integrated expertise and comprehensive solutions are utilized for offshore, subsea, power, liquefied natural gas (“LNG”) and downstream energy projects around the world. Our customers include national, major integrated and other oil and gas companies as well as producers of petrochemicals and electric power, and we operate in most major energy producing regions throughout the world. We execute our contracts through a variety of methods, principally fixed-price, but also including cost reimbursable, cost-plus, day-rate and unit-rate basis or some combination of those methods.

Organization

Our business is organized into five operating groups, which represent our reportable segments consisting of: North, Central and South America (“NCSA”); Europe, Africa, Russia and Caspian (“EARC”); the Middle East and North Africa (“MENA”); Asia Pacific (“APAC”); and Technology. See Note 24, Segment Reporting, for further discussion.

NOTE 2—BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

We have presented our Consolidated Financial Statements in U.S. Dollars in accordance with accounting principles generally accepted in the United States (“GAAP”). These Consolidated Financial Statements reflect all wholly owned subsidiaries and those entities we are required to consolidate. See the discussion below under the caption “Joint Venture and Consortium Arrangements” in this footnote for further discussion of our consolidation policy for those entities that are not wholly owned. In the opinion of our management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. Intercompany balances and transactions are eliminated in consolidation. Values presented within tables (excluding per share data) are in millions and may not sum due to rounding.

Restructuring Support Agreement and Chapter 11 Proceedings

95 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Plan of Reorganization, which remains subject to the approval of the Bankruptcy Court, provides that, among other things, on the effective date of the Plan of Reorganization (the “Effective Date”): • holders of claims arising under the DIP Credit Agreement shall be paid in full, in cash, on the Effective Date, funded from the proceeds of the Lummus Technology sale or, to the extent not paid in full from the proceeds of the Lummus Technology sale: • holders of claims arising under the DIP Term Loans (as defined in the Plan of Reorganization) other than the Make Whole Amount (as defined in the Plan of Reorganization) shall receive cash on hand and proceeds from the Exit Facilities; • holders of claims arising under the DIP Term Loans constituting the Make Whole Amount shall receive their respective pro rata shares of the term loans arising under the Make Whole Tranche (as defined in the Plan of Reorganization); and • holders of claims arising under drawn DIP Letters of Credit (as defined in the Plan of Reorganization) that have not been reimbursed in full in cash as of the Effective Date shall receive payment in full in cash. • holders of DIP Cash Secured Letters of Credit (as defined in the Plan of Reorganization) shall receive participation in the Cash Secured Exit Facility (as defined in the RSA) in amounts equal to their respective DIP Cash Secured Letter of Credit Claims (as defined in the Plan of Reorganization; provided that any such cash collateral in the DIP Cash Secured LC Account (as defined in the DIP Credit Facility Term Sheet) shall collateralize the Cash Secured LC Exit Facility); • holders of claims arising under the DIP Letters of Credit (other than the DIP Cash Secured Letters of Credit) shall receive participation in the Super Senior Exit Facility in amounts equal to their respective DIP Letter of Credit Facility commitments; • holders of claims arising under the (1) 2021 LC Facility (as defined in the Plan of Reorganization), (2) the 2023 LC Facility (as defined in the Plan of Reorganization), (3) the Revolving Credit Facility (as defined in the Plan of Reorganization) and (4) the Lloyds’ LC Facility (as defined in the Plan of Reorganization) shall receive participation rights in the Roll-Off LC Exit Facility (as defined in the Plan of Reorganization) or receive their respective pro rata shares of the Secured Creditor Funded Debt Distribution (as defined in the Plan of Reorganization), depending upon the nature of such claims; • holders of claims arising under the Term Loan Facility and Credit Agreement Hedging Claims (as defined in the Plan of Reorganization) other than hedging obligations rolled into the DIP Facilities and the Exit Facilities, will receive pro rata shares of the Secured Creditor Funded Debt Distribution;

96 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

• holders of claims arising under the Senior Notes will receive their pro rata shares of (a) 6% of the new common equity interests in the reorganized McDermott (the “New Common Stock”), plus additional shares of New Common Stock as a result of the Prepetition Funded Secured Claims Excess Cash Adjustment (as defined in the Plan of Reorganization), subject to dilution on account of the New Warrants and a new Management Incentive Plan (each as defined in the RSA); and (b) the New Warrants; • holders of general unsecured claims shall either (1) have their claims reinstated or (2) be paid in full in cash; • each existing equity interest in any of the Debtors other than McDermott shall be reinstated or cancelled, released and extinguished without any distribution at the Debtors’ election and with the consent of the Required Consenting Lenders (as defined in the Plan of Reorganization); and • each existing equity interest in McDermott will be cancelled, released and extinguished without any distribution.

These Consolidated Financial Statements have been prepared assuming that we will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. As a result of the Chapter 11 Cases, the realization of assets and the satisfaction of liabilities are subject to uncertainty. While operating as debtors-in-possession under Chapter 11, we may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business, for amounts other than those reflected in these Consolidated Financial Statements. Further, the plan of reorganization could materially change the amounts and classifications of assets and liabilities reported in these Consolidated Financial Statements. The accompanying consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities or any other adjustments that might be necessary should we be unable to continue as a going concern or as a consequence of the Chapter 11 Cases.

As a result of our financial condition, the defaults under our debt agreements and the risks and uncertainties surrounding the Chapter 11 Cases, substantial doubt exists regarding our ability to continue as a going concern. We believe that, once we receive the approval of the Plan of Reorganization by the Bankruptcy Court, our successful implementation of the Plan of Reorganization and the finalization of the Lummus Technology sale, among other factors, substantial doubt regarding our ability to continue as a going concern would be alleviated.

97 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Reclassifications

Bidding and Proposal Costs— We began classifying bid and proposal costs in Cost of operations in our Statements of Operations in the second quarter of 2018, as a result of our realignment of commercial personnel within our operating groups in conjunction with the Combination. For periods reported prior to the second quarter of 2018, bid and proposal costs were included in Selling, general and administrative (“SG&A”) expenses. For the years ended December 31, 2018 and 2017, our SG&A expenses included bid and proposal expenses of $10 million and $37 million, respectively.

Income (Loss) from Investments in Unconsolidated Affiliates—Our Statement of Operations for the year ended December 31, 2017 reflects the reclassification of a $12 million loss from investments in unconsolidated affiliates associated with our ongoing io Oil and Gas and Qingdao McDermott Wuchuan Offshore Engineering Company Ltd. joint ventures to Operating income to conform to our current presentation. Previously, results from these unconsolidated joint ventures were presented below Operating income, as we did not consider the activities of the unconsolidated joint ventures to be integral to our operations. Based on an expected expansion in activity of these unconsolidated joint ventures in 2018 and in the future, we now believe the activities of these unconsolidated joint ventures are integral to our ongoing operations and are most appropriately reflected in Operating income. Income (loss) from investments in unconsolidated affiliates that are not integral to our operations will continue to be presented below Operating income. See Note 10, Joint Venture and Consortium Arrangements, for further discussion of our unconsolidated joint ventures.

Reverse Common Stock Split—We amended our Amended and Restated Articles of Incorporation during the second quarter of 2018 to effect a three-to-one reverse stock split of McDermott common stock, effective May 9, 2018. Common stock, capital in excess of par, share and per share (except par value per share, which was not affected) information for all periods presented has been recast in these Consolidated Financial Statements to reflect the reverse stock split.

Pension and Postretirement Benefit Costs—In conjunction with our adoption of Accounting Standards Update (“ASU”) 2017-07 in the first quarter of 2018, we reclassified non-service costs relating to our pension and postretirement plans from SG&A to Other non-operating income (expense) for all historical periods presented. The reclassification did not result in a material impact.

Loss on Asset disposals—In the second quarter of 2019, we sold Alloy Piping Products LLC (“APP”), as discussed in Note 4, Acquisition and Disposition Transactions. Loss from the disposition of APP is included in Loss on asset disposals in our Consolidated Statements of Operations (our “Statements of Operations”). To conform to current period presentation, $3 million loss and $2 million gain on asset disposals presented in Other operating expense during the years ended December 31, 2018 and 2017, respectively, has been reclassified to Loss on asset disposals.

Use of Estimates and judgments

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosures of contingent assets and liabilities. We believe the most significant estimates and judgments are associated with: • revenue recognition for our contracts, including estimating costs to complete each contract and the recognition of incentive fees and unapproved change orders and claims; • determination of fair value related to the embedded derivatives within the Superpriority Credit Agreement; • determination of fair value with respect to acquired assets and liabilities; • assessment of our ability to continue as a going concern; • classification of all of our long-term debt obligations, including finance lease obligations, as current as of December 31, 2019; • fair value and recoverability assessments that must be periodically performed with respect to long-lived tangible assets, goodwill and other intangible assets; • valuation of deferred tax assets and financial instruments; • the determination of liabilities related to loss contingencies, self-insurance programs and income taxes; • the determination of pension-related obligations; and • consolidation determinations with respect to our joint venture and consortium arrangements.

98 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

If the underlying estimates and assumptions upon which the Consolidated Financial Statements are based change in the future, actual amounts may differ from those included in the Consolidated Financial Statements.

Significant Accounting Policies

Revenue Recognition—Our revenue is primarily derived from long-term contracts with customers, and we determine the appropriate accounting treatment for each contract at inception in accordance with ASU 2014-09 (Accounting Standards Codification (“ASC”) Topic 606), Revenue from Contracts with Customers. Our contracts primarily relate to: EPCI services; engineering services; construction services; pipe and steel fabrication services; engineered and manufactured products; technology licensing; and catalysts supply. An EPCI contract may also include technology licensing, and our services may be provided between or among our reportable segments. • Contracts—Our contracts are awarded on a competitively bid and negotiated basis, and the timing of revenue recognition may be impacted by the terms of such contracts. We use a range of contracting options, including fixed-price, cost-reimbursable and hybrid, which has both cost-reimbursable and fixed-price characteristics. Fixed-price contracts, and hybrid contracts with a more significant fixed-price component, tend to provide us with greater control over project schedule and the timing of when work is performed and costs are incurred, and, accordingly, when revenue is recognized. Cost-reimbursable contracts, and hybrid contracts with a more significant cost-reimbursable component, generally provide our customers with greater influence over the timing of when we perform our work, and, accordingly, such contracts often result in less predictability regarding the timing of revenue recognition. A contract may include technology licensing services, which may be provided between our reportable segments. • Performance Obligations—A performance obligation is a promise in a contract to transfer a distinct good or service to a customer and is the unit of account in ASC Topic 606. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Our contract costs and related revenues are generally recognized over time as work progresses due to continuous transfer to the customer. To the extent a contract is deemed to have multiple performance obligations, we allocate the transaction price of the contract to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. In addition, certain contracts may be combined and deemed to be a single performance obligation. Our EPCI contracts are generally deemed to be single performance obligations and our contracts with multiple performance obligations were not material as of December 31, 2019. • Performance Obligations Satisfied Over Time—Revenues for our contracts that satisfy the criteria for over time recognition are recognized as the work progresses. Revenues for contracts recognized over time include revenues for contracts to provide: EPCI services; engineering services; construction services; pipe and steel fabrication services; engineered and manufactured products; technology licensing; and “non-generic” catalysts supply. We measure transfer of control utilizing an input method to measure progress of the performance obligation based upon the cost-to-cost measure of progress, as it best depicts the transfer of assets to the customer, with Cost of operations including direct costs, such as materials and labor, and indirect costs that are attributable to contract activity. Under the cost-to-cost approach, the use of estimated costs to complete each performance obligation is a significant variable in the process of determining recognized revenues and is a significant factor in the accounting for such performance obligations. Significant estimates impacting the cost to complete each performance obligation are: costs of engineering, materials, components, equipment, labor and subcontracts; vessel costs; labor productivity; schedule durations, including subcontractor or supplier progress; contract disputes, including claims; achievement of contractual performance requirements; and contingency, among others. The cumulative impact of revisions in total cost estimates during the progress of work is reflected in the period in which these changes become known, including, to the extent required, the reversal of profit recognized in prior periods and the recognition of losses expected to be incurred on contracts in progress. Additionally, external factors such as weather, customer requirements and other factors outside of our control, may affect the progress and estimated cost of a project’s completion and, therefore, the timing and amount of recognition of revenues and income. Due to the various estimates inherent in our contract accounting, actual results could differ from those estimates, which could result in material changes to our consolidated financial statements and related disclosures. See Note 5, Revenue Recognition, for further discussion. • Performance Obligation Satisfied at a Point-in-Time Method—Contracts with performance obligations that do not meet the criteria to be recognized over time are required to be recognized at a point in time, whereby revenues and gross profit are recognized only when a performance obligation is complete and a customer has obtained control of a promised asset. Revenues for contracts recognized at a point in time include our “generic” catalysts supply and certain manufactured products (which are recognized upon shipment) and certain non-engineering and non-construction oriented services (which are recognized when the services are performed). In determining when a performance obligation is complete for contracts with revenues recognized at a point in time, we measure transfer of control considering physical possession of the asset, legal transfer of title, significant risks and rewards of ownership, customer acceptance and our rights to payment. See Note 5, Revenue Recognition, for further discussion.

99 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

• Remaining Performance Obligations (“RPOs”)―RPOs represent the amount of revenues we expect to recognize in the future from our contract commitments on projects. RPOs include the entire expected revenue values for joint ventures we consolidate and our proportionate value for consortiums we proportionately consolidate. We do not include expected revenues of contracts related to unconsolidated joint ventures in our RPOs, except to the extent of any subcontract awards we receive from those joint ventures. Currency risks associated with RPOs which are not mitigated within the contracts are generally mitigated with the use of foreign currency derivative (hedging) instruments, when deemed significant. However, these actions may not eliminate all currency risk exposure included within our long-term contracts. RPOs may not be indicative of future operating results, and projects included in RPOs may be cancelled, modified or otherwise altered by customers. See Note 5, Revenue Recognition, for further discussion. • Variable Consideration―Transaction prices for our contracts may include variable consideration, which includes increases to transaction prices for approved and unapproved change orders, claims, incentives and bonuses, and reductions to transaction price for liquidated damages or penalties. Change orders, claims and incentives are generally not distinct from the existing contracts due to the significant integration service provided in the context of the contract and are accounted for as a modification of the existing contract and performance obligation. We estimate variable consideration for a performance obligation at the most likely amount to which we expect to be entitled (or the most likely amount we expect to incur in the case of liquidated damages), utilizing estimation methods that best predict the amount of consideration to which we will be entitled (or will be incurred in the case of liquidated damages). We include variable consideration in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenues recognized will not occur or when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determinations of whether to include estimated amounts in transaction prices are based largely on assessments of our anticipated performance and all information (historical, current and forecasted) reasonably available to us. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenues on a cumulative catch-up basis. To the extent unapproved change orders and claims reflected in transaction price (or excluded from transaction price in the case of liquidated damages) are not resolved in our favor, or to the extent incentives reflected in transaction price are not earned, there could be reductions in, or reversals of, previously recognized revenue. See Note 5, Revenue Recognition, for further discussion. • Loss Recognition―Revenues from customers may not cover increases in our costs or our total estimated costs. It is possible that current estimates could materially change for various reasons. For all contracts, if a current estimate of total contract cost indicates a loss, the projected loss is recognized in full immediately and reflected in Cost of operations in the Statements of Operations. It is possible that these estimates could change due to unforeseen events, which could result in adjustments to overall contract revenues and costs. Variations from estimated contract performance could result in material adjustments to operating results for any fiscal quarter or year. In our Consolidated Balance Sheets (our “Balance Sheets”), accruals of provisions for estimated losses on all active uncompleted projects are included in Advance billings on contracts. See Note 5, Revenue Recognition, for further discussion. • Accounts Receivable and Contract Balances―The timing of when we bill our customers is generally dependent upon advance billing terms, milestone billings based on the completion of certain phases of the work, or when the services are provided or products are shipped. • Accounts Receivable―Any uncollected billed amounts for our performance obligations recognized over time, including contract retainages to be collected within one year, are recorded within Accounts receivable-trade, net. Any uncollected billed amounts, unbilled receivables for which we have an unconditional right to payment, and unbilled receivables for our performance obligations recognized at a point in time are also recorded within Accounts receivable-trade, net. Contract retainages to be collected beyond one year are recorded within Accounts receivable—long-term retainages. We establish allowances for doubtful accounts based on our assessments of collectability. See Note 8, Accounts Receivable, for further discussion. • Contracts in Progress—Projects with performance obligations recognized over time that have revenues recognized to date in excess of cumulative billings are reported within Contracts in progress on our Balance Sheets. We expect to invoice customers for all unbilled revenues, and our payment terms are generally for less than 12 months upon billing. Our contracts typically do not include a significant financing component. • Advance Billings on Contracts—Projects with performance obligations recognized over time that have cumulative billings in excess of revenues are reported within Advance billings on contracts on our Balance Sheets. Our Advance billings on contracts balance also includes our accruals of provisions for estimated losses on all active projects.

100 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Concentration of Credit Risk—Our principal customers are businesses in the oil and gas exploration and development, petrochemical, natural resources and power industries. This concentration of customers may impact our overall exposure to credit risk, either positively or negatively, in that our customers may be similarly affected by changes in economic or other conditions. In addition, we and many of our customers operate worldwide and are therefore exposed to risks associated with the economic and political forces of various countries and geographic areas. We generally do not obtain any collateral for our receivables. See Note 24, Segment Reporting, for additional information about our operations in different geographic areas.

Bidding and Proposal Costs―Bidding and proposal costs are generally charged to Cost of operations as incurred, but in certain cases their recognition may be deferred if specific probability criteria are met. We had no significant deferred bidding and proposal costs at December 31, 2019.

Transaction Costs—Transaction costs in 2019 primarily related to legal and other professional fees associated with the sale processes for the pipe fabrication business and the Lummus technology business and the now-terminated effort to sell our industrial storage tanks business, as well as professional and other fees associated with the Chapter 11 Cases.

Restructuring and Integration Costs—Restructuring and integration costs primarily relate to the costs to achieve our combination profitability initiative (“CPI”). See Note 12, Restructuring and Integration Costs, for further discussion.

Stock-Based Compensation—Equity instruments are measured at fair value on the grant date. Stock-based compensation expense is generally recognized on a straight- line basis over the requisite service periods of the awards. We use a Black-Scholes model to determine the fair value of certain share-based awards, such as stock options. Additionally, we use a Monte Carlo model to determine the fair value of certain share-based awards that contain market and performance-based conditions. The use of these models requires highly subjective assumptions, such as assumptions about the expected life of the award, vesting probability, expected dividend yield and the volatility of our stock price. See Note 19, Equity-based Compensation, for additional information.

Cash, Cash Equivalents and Restricted Cash—Our cash and cash equivalents are highly liquid investments with maturities of three months or less when we purchase them. We record cash and cash equivalents as restricted when we are unable to freely use such cash and cash equivalents for our general operating purposes. A majority of our restricted cash and cash equivalents serves as cash collateral deposits for our letter of credit facilities, as further discussed in Note 13, Debt.

Leases—We classify an arrangement as a lease at inception if we have the right to control the use of an identified asset we do not legally own for a period of time in exchange for consideration. In general, leases with an initial term of 12 months or less are not recorded on our Balance Sheet unless it is reasonably certain we will renew the lease. All leases with an initial term of more than 12 months, whether classified as operating or finance, are recorded on our Balance Sheets based on the present value of lease payments over the lease term, determined at lease commencement. Determination of the present value of lease payments requires a discount rate. We use the implicit rate in the lease agreement when available. Most of our leases do not provide an implicit interest rate; therefore, we use an incremental borrowing rate based on information available at the commencement date.

Our lease terms may include options to extend or terminate the lease. Lease expense for operating leases and the amortization of the right-of-use asset for finance leases are recognized on a straight-line basis over the lease terms, in each case taking into account such option when it is reasonably certain we will exercise that option.

Property, Plant and Equipment—We carry our property, plant and equipment at depreciated cost. Except for major marine vessels, we depreciate our property, plant and equipment using the straight-line method, over the estimated economic useful lives of three to 46 years for buildings and three to 28 years for machinery and equipment. We do not depreciate property, plant and equipment classified as held for sale. See Note 11, Supplemental Balance Sheet Detail, for disclosure of the components of property, plant and equipment.

101 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

We depreciate major marine vessels using the units-of-production method based on the utilization of each vessel. Our units-of-production method of depreciation involves the calculation of depreciation expense on each vessel based on the product of actual utilization for the vessel for the period and the applicable daily depreciation value (which is based on vessel book value, standard utilization and vessel life) for the vessel. Our actual utilization is determined based on the actual days that the vessel was working or otherwise actively engaged (other than in transit between regions) under a contract, as determined by daily vessel operating reports prepared by the crew of the vessel. Our standard utilization is determined by vessel at least annually based on recent actual utilization combined with an expectation of future utilization, both of which allow for idle time. In periods of very low utilization, a minimum amount of depreciation expense of at least 25% of an equivalent straight-line depreciation expense (which is based on an initial 25-year life) is recorded.

We capitalize drydocking costs in other current assets and other assets when incurred and amortize the costs over the period of time between two drydock periods, which is generally five years. We expense the costs of other maintenance, repairs and renewals, which do not materially prolong useful life of an asset, as we incur them.

To determine the fair value of our reporting units and test for impairment, we utilize an income approach (discounted cash flow method) as we believe this is the most direct approach to incorporate the specific economic attributes and risk profiles of our reporting units into our valuation model. We generally do not utilize a market approach, given the lack of relevant information generated by market transactions involving comparable businesses. However, to the extent market indicators of fair value become available, we consider such market indicators in our discounted cash flow analysis and determination of fair value. See Note 3, Business Combination, and Note 9, Goodwill and Other Intangible Assets, for further discussion.

We review tangible assets and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of the asset may not be recoverable. If a recoverability assessment is required, the estimated future undiscounted cash flow associated with the asset or asset group will be compared to its respective carrying amount to determine if an impairment exists. If the asset or asset group fails the recoverability test, we will perform a fair value measurement to determine and record an impairment charge. See Note 3, Business Combination, Note 9, Goodwill and Other Intangible Assets, and Note 16, Fair Value Measurements, for additional information.

Foreign Currency—The nature of our business activities involves the management of various financial and market risks, including those related to changes in foreign currency exchange rates. The effects of translating financial statements of foreign operations into our reporting currency are recognized as a cumulative translation adjustment in accumulated other comprehensive income (loss) (“AOCI”), which is net of tax, where applicable.

102 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

• Interest Rate Derivatives— On May 8, 2018, we entered into a U.S. dollar interest rate swap arrangement to mitigate exposure associated with cash flow variability on the Term Facility in an aggregate notional value of $1.94 billion. The swap arrangement had been designated as a cash flow hedge. As of December 31, 2019, in light of the circumstances described in “—Basis of Presentation,” we believe that our hedged forecasted transaction is not probable to occur and as such, our hedge accounting has ceased and our previously recognized unrealized losses in AOCI of approximately $67 million have been reclassified into the interest expense in our Statement of Operations for the year ended December 31, 2019.

See Note 16, Fair Value Measurements, and Note 17, Derivative Financial Instruments, for further discussion.

103 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For defined contribution plans, we make employer contributions pursuant to the terms of those plans. The employer contributions are recognized as employee benefit expense when due.

Loss Contingencies—We record liabilities for loss contingencies when it is probable that a liability has been incurred and the amount of loss is reasonably estimable. We provide disclosure when there is a reasonable possibility that the ultimate loss will exceed by a material amount the recorded provision or if the loss is not reasonably estimable but is expected to be material to our financial results. We are currently involved in litigation and other proceedings, as discussed in Note 23, Commitments and Contingencies. We have accrued our estimates of the probable losses associated with these matters, and associated legal costs are generally recognized as incurred. However, our losses are typically resolved over long periods of time and are often difficult to estimate due to various factors, including the possibility of multiple actions by third parties. Therefore, it is possible future earnings could be affected by changes in our estimates related to these matters.

On a periodic and ongoing basis, we evaluate our net DTAs (including our NOL DTAs) and assess the appropriateness of our VAs. A VA is provided to offset any net DTAs if, based on the available evidence, it is more likely than not that some or all of the DTAs will not be realized. The realization of our net DTAs depends on our ability to generate sufficient future taxable income of the appropriate character and in the appropriate jurisdictions. In assessing the need for a VA, we consider both positive and negative evidence related to the likelihood of realization of the DTAs. If, based on the weight of available evidence, our assessment indicates it is more likely than not a DTA will not be realized, we record a VA. Our assessments include, among other things, the amount of taxable temporary differences which will result in future taxable income, evaluations of existing and anticipated market conditions, analysis of recent and historical operating results (including cumulative losses over multiple periods) and projections of future results, strategic plans and alternatives for associated operations, as well as asset expiration dates, where applicable.

104 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Preferred Stock—We issued Redeemable Preferred Stock and Series A Warrants in a private placement in 2018 (See Note 21, Redeemable Preferred Stock, for further discussion). Total net consideration, after deduction for direct issuance costs, was allocated to the Redeemable Preferred Stock and the Series A Warrants based on their relative fair value. We may redeem the Redeemable Preferred Stock at any time, and the Redeemable Preferred Stock is contingently redeemable at the option of the holders after seven years or upon a change of control. As a result of the holders’ contingent redemption rights that are outside of our control, our Redeemable Preferred Stock is classified outside of stockholders’ equity in the mezzanine section of our Balance Sheet.

As the holders’ redemption option is only subject to passage of time, the carrying value of the Redeemable Preferred Stock is accreted to its redemption value using the effective interest method from the date of issuance through the earliest assumed date of redemption. Accretion and accrued dividends are treated as a reduction to the calculation of net income attributable to common shareholders. We record a liability for dividends in the period they are declared.

In conjunction with the private placement, we also issued Series A Warrants to purchase a number of shares of our common stock. Our Series A Warrants are considered standalone financial instruments and are recorded within stockholder’s equity. Equity classified Series A Warrants are recognized based on the allocated consideration on the date of issuance, recorded in Capital in excess of par value and not re-measured.

Recently Adopted Accounting Guidance

Leases—In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires entities that lease assets—referred to as “lessees”—to recognize on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months. We adopted this ASU effective January 1, 2019 using the modified retrospective application, applying the new standard to leases in place as of the adoption date. Prior periods have not been adjusted.

We elected to apply certain practical expedients allowed upon the adoption of this ASU, which, among other things, allowed us to: not reassess whether any expired or existing contracts contain leases; carry forward the historical lease classification; and not have to reassess any initial direct cost of any expired or existing leases. Adoption of the new standard resulted in the recording of Operating lease right-of-use assets, Current portion of long-term lease obligations and Long-term lease obligations of approximately $424 million, $101 million and $342 million, respectively, as of January 1, 2019. The adoption of this ASU did not have a material impact on our Statement of Operations, Consolidated Statement of Cash Flows (“Statement of Cash Flows”) or the determination of compliance with financial covenants under our current debt agreements. See Note 14, Lease Obligations, for further discussion.

Income Taxes—In January 2018, the FASB issued ASU 2018-02, Reporting Comprehensive Income (Topic 220). This ASU gives entities the option to reclassify to retained earnings the tax effects resulting from the U.S. Tax Cuts and Jobs Act related to items in AOCI that the FASB refers to as having been stranded in AOCI. We adopted this ASU effective January 1, 2019. The adoption of this ASU did not have a material impact on the Consolidated Financial Statements and related disclosures.

Derivatives—In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815). This ASU includes financial reporting improvements related to hedging relationships to better report the economic results of an entity’s risk management activities in its financial statements. Additionally, this ASU makes certain improvements to simplify the application of the hedge accounting guidance. We adopted this ASU effective January 1, 2019. The adoption of this ASU did not have a material impact on the Consolidated Financial Statements. See Note 17, Derivative Financial Instruments, for related disclosures.

In October 2018, the FASB issued ASU No. 2018-16, Derivatives and Hedging: Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes, which expands the list of benchmark interest rates permitted in the application of hedge accounting. This ASU permits the use of an OIS rate based on the SOFR as a U.S. benchmark interest rate for hedge accounting purposes. We adopted this ASU effective January 1, 2019. The adoption of this ASU did not have a material impact on the Consolidated Financial Statements and related disclosures. See Note 17, Derivative Financial Instruments.

105 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Accounting Guidance Issued but not Adopted as of December 31, 2019

Financial Instruments—In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU will require a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected. A valuation account, allowance for credit losses, will be deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. This ASU is effective for interim and annual periods beginning after December 15, 2019. We are adopting the new standard effective January 1, 2020.

We are currently finalizing our methodology, process and controls associated with estimating expected credit losses as prescribed in ASU 2016-13. Based on our developed method, which considers historical credit losses and the probability of default for relevant counterparties, the overall impact of the adoption of ASC 326 is not expected to have a material impact on our future consolidated financial statements and related disclosures.

Defined Benefit Pension Plans—In August 2018, the FASB issued ASU No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20). This ASU eliminates, modifies and adds disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This ASU is effective for fiscal years ending after December 15, 2020, with early adoption permitted. We are evaluating the impact of the new guidance on our future disclosures.

Consolidation—In October 2018, the FASB issued ASU No. 2018-17, Consolidation: Targeted Improvements to Related Party Guidance for Variable Interest Entities (“VIE”). This ASU amends the guidance for determining whether a decision-making fee is a variable interest, which requires companies to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety. The ASU is effective for annual and interim periods beginning after December 15, 2019. We are adopting the new standard effective January 1, 2020. The adoption of this ASU is not expected to have a material impact on our future consolidated financial statements and related disclosures.

Collaborative Arrangements—In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606. This ASU clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account. In addition, unit-of-account guidance in Topic 808 was aligned with the guidance in Topic 606 (that is, a distinct good or service) when assessing whether the collaborative arrangement or a part of the arrangement is within the scope of Topic 606. This ASU is effective for interim and annual periods beginning after December 15, 2019. We are adopting the new standard effective January 1, 2020. The adoption of this ASU is not expected to have a material impact on our future consolidated financial statements and related disclosures.

NOTE 3—BUSINESS COMBINATION

General―On December 18, 2017, we entered into an agreement to combine our business with CB&I, an established downstream provider of industry-leading petrochemical, refining, power, gasification and gas processing technologies and solutions. On May 10, 2018 (the “Combination Date”) we completed the Combination.

Transaction Overview―On the Combination Date, we acquired the equity of certain U.S. and non-U.S. CB&I subsidiaries that owned CB&I’s technology business, as well as certain intellectual property rights, for $2.87 billion in cash consideration that was funded using debt financing, as discussed further in Note 13, Debt, and existing cash. Also, on the Combination Date, CB&I shareholders received 0.82407 shares of McDermott common stock for each share of CB&I common stock tendered in the exchange offer. Each remaining share of CB&I common stock held by CB&I shareholders not acquired by McDermott in the exchange offer was effectively converted into the right to receive the same 0.82407 shares of McDermott common stock that was paid in the exchange offer, together with cash in lieu of any fractional shares of McDermott common stock, less any applicable withholding taxes. Stock-settled equity-based awards relating to shares of CB&I’s common stock were either canceled and converted into the right to receive cash or were converted into comparable McDermott awards on generally the same terms and conditions as prior to the Combination Date. We issued 84.5 million shares of McDermott common stock to the former CB&I shareholders and converted CB&I stock-settled equity awards into McDermott stock-settled equity-based awards to be settled in approximately 2.2 million shares of McDermott common stock.

106 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Transaction Accounting―The Combination was accounted for using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. McDermott is considered the acquirer for accounting purposes based on the following facts at the Combination Date: (1) McDermott’s stockholders owned approximately 53 percent of the combined business on a fully diluted basis; (2) a group of McDermott’s directors, including the Chairman of the Board, constituted a majority of the Board of Directors; and (3) McDermott’s President and Chief Executive Officer and Executive Vice President and Chief Financial Officer continued in those roles immediately after the completion of the Combination. The series of transactions resulting in McDermott’s acquisition of CB&I’s entire business is being accounted for as a single accounting transaction, as such transactions were entered into at the same time in contemplation of one another and were collectively designed to achieve an overall commercial effect.

Purchase Consideration―We completed the Combination for a gross purchase price of approximately $4.6 billion ($4.1 billion net of cash acquired), detailed as follows (in millions, except per share amounts):

(In millions, except per share amounts) CB&I shares for Combination consideration 103 Conversion Ratio: 1 CB&I share = 0.82407 McDermott shares 85 McDermott stock price on May 10, 2018 19.92 Equity Combination consideration transferred $ 1,684 Fair value of converted awards earned prior to the Combination 9 Total equity Combination consideration transferred 1,693 Cash consideration transferred 2,872 Total Combination consideration transferred 4,565 Less: Cash acquired (498) Total Combination consideration transferred, net of cash acquired $ 4,067

Purchase Price Allocation— The aggregate purchase price noted above was allocated to the major categories of assets and liabilities acquired based upon their estimated fair values at the Combination Date, which were based, in part, upon external appraisal and valuation of certain assets, including specifically identified intangible assets and property and equipment. The excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired, totaling approximately $5 billion, was recorded as goodwill. Our final purchase price allocation was completed in the second quarter of 2019.

The following summarizes our final purchase price allocation at the Combination Date (in millions):

May 10, 2018 Net tangible assets: Cash $ 498 Accounts receivable 791 Inventory 111 Contracts in progress 272 Assets held for sale (1) 70 Other current assets 272 Investments in unconsolidated affiliates (2) 426 Property, plant and equipment 396 Other non-current assets 127 Accounts payable (499) Advance billings on contracts (3) (2,410) Deferred tax liabilities (16) Other current liabilities (1,237) Other non-current liabilities (453) Noncontrolling interest 14 Total net tangible liabilities (1,638) Project-related intangible assets/liabilities, net (4) 150 Other intangible assets (5) 1,063 Net identifiable liabilities (425) Goodwill (6) 4,990 Total Combination consideration transferred 4,565 Less: Cash acquired (498) Total Combination consideration transferred, net of cash acquired $ 4,067

(1) Assets held for sale included CB&I’s former administrative headquarters within Corporate and various fabrication facilities within NCSA. During the third quarter of 2018, we completed the sale of CB&I’s former administrative headquarters for proceeds of $52 million.

107 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(2) Investments in unconsolidated affiliates includes a fair value adjustment of $215 million associated with the Combination. Approximately $146 million of the fair value adjustment is attributable to the basis difference between McDermott’s investment and the underlying equity in identifiable assets of unconsolidated affiliates and will be amortized to Investment in unconsolidated affiliates-related amortization over a range of two to 30 years based on the life of assets to which the basis difference is attributed. (3) Advance billings on contracts includes accrued provisions for estimated losses on projects of $374 million, primarily associated with the Cameron LNG and Freeport LNG Trains 1 and 2 projects, the now-substantially completed gas power project for a unit of Calpine Corporation (“Calpine”) and the now-completed gas power project for Indianapolis Power & Light Company. (4) Project-related intangible assets/liabilities, net includes intangible asset and liabilities of $259 million and $109 million, respectively. The balances represent the fair value of acquired remaining performance obligations (“RPOs”) and normalized profit margin fair value associated with acquired long-term contracts that were deemed to be lower than fair value (excluding amounts recorded in Advance billings on contracts and Contracts in progress) as of the Combination Date. The project related intangible assets and liabilities will be amortized as the applicable projects progress over a range of two to six years within Project-related intangibles amortization in our Statements of Operations.

(5) Other intangible assets are reflected in the table below and recorded at estimated fair value, as determined by our management, based on available information, which includes final valuations prepared by external experts. The estimated useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows.

May 10, 2018 Weighted Average

Fair value Useful Life Range Useful Life (In millions) Process technologies $ 511 10-30 27 Trade names 400 10-20 12 Customer relationships 126 4-11 10 Trademarks 26 10 10 Total $ 1,063

(6) Goodwill resulted from the acquired established workforce, which does not qualify for separate recognition, as well as expected future cost savings and revenue synergies associated with the combined operations. Of the $5 billion of goodwill recorded in conjunction with the Combination, $2.7 billion, $461 million, $50 million, $52 million and $1.7 billion was allocated to our NCSA, EARC, MENA, APAC and Technology reporting segments, respectively. Approximately $1.7 billion of the opening goodwill balance is deductible for tax purposes. See Note 9, Goodwill and Other Intangible Assets, for our discussion of impairment charges recorded during 2019 and our changes in estimates.

Impact on RPOs—CB&I RPOs totaled approximately $8.3 billion at the Combination Date, after considering conforming accounting policies and project adjustments for acquired in-process projects.

108 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Pro Forma Information (Unaudited)—The following unaudited pro forma financial information reflects the Combination and the related events as if they occurred on January 1, 2017 and gives effect to pro forma events that are directly attributable to the Combination, factually supportable, and expected to have a continuing impact on our combined results, following the Combination. The pro forma financial information includes adjustments to: (1) include additional intangibles amortization, investment in unconsolidated affiliates-related amortization, depreciation of property, plant and equipment and net interest expense associated with the Combination; (2) exclude restructuring, integration and transaction costs and debt extinguishment costs that were included in McDermott and CB&I’s historical results and are expected to be non-recurring; and (3) reflect adjustments to 2017 cost of operations for CB&I’s pension actuarial gains and losses to conform to McDermott’s mark-to-market pension accounting policy. This pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the pro forma events taken place on the dates indicated. Further, the pro forma financial information does not purport to project the future operating results of the combined business operations following the Combination.

Year ended December 31, 2018 (1) 2017 (1) (In millions, except per share amounts) Pro forma revenue $ 9,208 $ 9,658 Net (loss) income attributable to common stockholders (2,523) (1,189) Pro forma net loss per share attributable to common stockholders Basic $ (13.94) $ (6.57) Diluted $ (13.94) $ (6.57)

Basic (2) 181 181 Diluted 181 181

(1) Adjustments, net of tax, included in the pro forma net income above that were of a non-recurring nature include:

2018—elimination of (1) restructuring and integration costs ($112 million); (2) transaction costs ($37 million); and (3) debt extinguishment costs ($11 million); and

2017—elimination of restructuring costs ($81 million).

These pro forma results exclude the effect of adjustments to the opening balance sheet associated with fair value purchase accounting estimates. (2) Pro forma net (loss) income per share was calculated using weighted average basic and diluted shares outstanding during 2018. The effects of restricted stock, warrants and redeemable preferred stock were not included in the calculation of diluted earnings per share for 2018 and 2017, due to the net losses in those periods.

NOTE 4— ACQUISITION AND DISPOSITION TRANSACTIONS

Siluria Technologies acquisition—On July 15, 2019, we acquired the assets of Siluria Technologies (“Siluria”), including various intellectual property and research and development assets, for approximately $7 million. In connection with the acquisition we recorded approximately $6 million of intangible assets within our Technology segment.

APP disposition—On June 27, 2019, we completed the sale of APP, the distribution and manufacturing arm of our pipe fabrication business, previously included in our NCSA segment.

109 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Loss on the APP sale is included in Loss on asset disposals in our Statement of Operations and is summarized as follows:

(In millions) Assets Inventory $ 69 Property and equipment 25 Goodwill 90 Other assets 11 Assets sold $ 195

Liabilities Accounts payable $ 8 Other liabilities 3 Liabilities sold $ 11

Net assets sold $ 184

Sale proceeds (net of transaction costs of $2) 83

$ 101 Loss on net assets sold

Results of APP’s operations during the years ended December 31, 2019 and 2018 were not material to McDermott, as a whole. We are continuing to pursue the sale of the remaining portion of the pipe fabrication business, subject to approval by our Board of Directors.

NOTE 5—REVENUE RECOGNITION

Remaining Performance Obligations (“RPOs”)

Our RPOs by segment were as follows:

December 31, 2019 December 31, 2018 (Dollars in millions) NCSA $ 7,070 38% $ 5,649 52% EARC 3,415 18% 1,378 12% MENA 6,047 33% 1,834 17% APAC 1,487 8% 1,420 13% Technology 619 3% 632 6% Total $ 18,638 100% $ 10,913 100%

Of the December 31, 2019 RPOs, we expect to recognize revenues as follows:

2020 2021 Thereafter (In millions) $ 9,512 $ 4,959 $ 4,167 Total RPOs

110 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Revenue Disaggregation Our revenue by product offering, contract types and revenue recognition methodology was as follows:

Year ended December 31, 2019 (2) 2018 (2) 2017 (2) (In millions) Revenue by product offering: Offshore and subsea $ 2,845 $ 2,289 $ 2,985 LNG 1,445 1,309 - Downstream (1) 3,173 2,224 - Power 968 883 - $ 8,431 $ 6,705 $ 2,985

Revenue by contract type: Fixed price $ 6,835 $ 5,239 $ 2,895 Reimbursable 926 1,004 - Hybrid 485 260 - Unit-basis and other 185 202 90 $ 8,431 $ 6,705 $ 2,985

Revenue by recognition methodology: Over time $ 8,283 $ 6,628 $ 2,985 At a point in time 148 77 - $ 8,431 $ 6,705 $ 2,985

(1) Includes the results of our Technology operating group. (2) Intercompany amounts have been eliminated in consolidation.

Other

During 2019, we recognized approximately $144 million of revenues resulting from changes in transaction prices associated with performance obligations satisfied in prior periods, primarily in our NCSA segment. Revenues reported for 2019 include a $121 million settlement of claims on a substantially complete project.

During 2018, we recognized $81 million of revenues primarily resulting from changes in transaction prices during the first half of 2018 associated with performance obligations satisfied in prior periods, mainly in our APAC and MENA segments. The change in transaction prices primarily related to reimbursement of costs incurred in prior periods.

Revenues recognized during 2019 with respect to amounts included in our Advance billings on contracts balance as of December 31, 2018 were approximately $1.6 billion.

Unapproved Change Orders, Claims and Incentives

Unapproved Change Orders, Claims and Incentives—As of December 31, 2019, we had unapproved change orders and claims included in transaction prices aggregating to approximately $231 million, of which approximately $60 million was included in our RPO balance. As of December 31, 2018, we had unapproved change orders and claims included in transaction prices for our projects aggregating to approximately $428 million, of which approximately $130 million was included in our RPO balance.

Incentives—As of December 31, 2019, we had incentives included in transaction prices for our projects aggregating to approximately $218 million, primarily associated with our Cameron LNG project, of which approximately $28 million was included in our RPO balance. As of December 31, 2018, we did not have any material incentives included in transaction prices for our projects.

The amounts recorded in contract prices and recognized as revenues reflect our best estimates of recovery; however, the ultimate resolution and amounts received could differ from these estimates and could have a material adverse effect on our results of operations, financial position and cash flow.

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Loss Projects

Summary information for our significant ongoing loss projects as of December 31, 2019 is as follows:

During 2019, Freeport LNG Train 3 was negatively impacted by $8 million of changes in cost estimates and remained in the profitable position as of December 31, 2019.

During 2019, the Freeport LNG project, as a whole, had an overall negative $130 million impact on operating margin.

112 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6—PROJECT CHANGES IN ESTIMATES

Our RPOs for each of our operating groups generally consist of several hundred contracts, and our results may be impacted by changes in estimated margins. The following is a discussion of our most significant changes in cost estimates that impacted 2019, 2018 and 2017 segment operating results. For discussion of significant changes in estimates resulting from changes in transaction prices, see Note 5, Revenue Recognition.

2019

Segment operating results in 2019 were impacted by unfavorable changes in cost estimates totaling approximately $700 million, primarily in our NCSA segment. Unfavorable changes in estimates in our EARC (primarily on the Tyra Redevelopment project) and APAC (primarily on the project for the Pan Malaysia field development) segments of approximately $45 million and $40 million, respectively, were partially offset by favorable changes in our MENA segment of approximately $74 million.

NCSA—Our segment results in 2019 were negatively impacted by net unfavorable changes in cost estimates aggregating approximately $689 million. The net unfavorable changes were due to cost increases on: • the Cameron LNG project – $180 million; • the Freeport LNG project, as a whole – $138 million; • Power projects, including the Asheville project - $144 million; • Downstream petrochemical projects – $44 million; • the Calpine project - $28 million; • the Abkatun-A2, Line 1 and Line 10 and Xanab projects for Pemex – $46 million; • the Rota 3 pipeline project – $78 million; and • various other projects.

See Note 5, Revenue Recognition, for further discussion of our Freeport LNG project, as a whole, and the Asheville power plant, Rota 3 pipeline and Pemex Line 1 and Line 10 projects.

2018

Segment operating income in 2018 was impacted by net favorable changes in estimates totaling approximately $29 million, primarily in our MENA and APAC segments, partially offset by our NCSA segment.

NCSA—Our segment results for the year ended December 31, 2018 were negatively impacted by net unfavorable changes in estimates aggregating approximately $190 million, primarily due to cost increases on our Cameron LNG and Calpine loss projects in the United States and the Abkatun-A2 platform project in Mexico (see Note 5, Revenue Recognition for discussion), partially offset by savings on various projects in the United States.

MENA—Our segment results in 2018 were positively impacted by net favorable changes in estimates aggregating approximately $163 million, primarily due to productivity improvements and cost savings on marine, fabrication and other activities related to three of our projects in the Middle East.

APAC—Our segment results in 2018 were positively impacted by net favorable changes in estimates aggregating approximately $56 million. The net favorable changes were due to reductions in costs to complete on offshore campaigns and several other active projects, primarily on two of our Australian projects, partially offset by cost increases and weather downtime on various projects.

2017

Segment operating income in 2017 was positively impacted by net favorable changes in estimates totaling approximately $165 million, primarily in our MENA (approximately $103 million) and APAC (approximately $62 million) segments.

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NOTE 7—CASH, CASH EQUIVALENTS AND RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the totals of such amounts shown in the Consolidated Statements of Cash Flows.

2019 2018 (In millions) Cash and cash equivalents $ 800 $ 520 Restricted cash and cash equivalents (1) 393 325 Total cash, cash equivalents and restricted cash shown in the $ 1,193 $ 845 Statements of Cash Flows

(1) Our restricted cash balances primarily served as cash collateral deposits for our letter of credit facilities. See Note 13, Debt, for further discussion.

NOTE 8—ACCOUNTS RECEIVABLE

Accounts Receivable—Trade, Net―Our trade receivable balances at December 31, 2019 and 2018 included the following:

December 31, 2019 2018 (In millions) Contract receivables (1) $ 969 $ 794 Retainages (2) 148 155 Less allowances (30) (17) Accounts receivable—trade, net $ 1,087 $ 932

(1) Unbilled receivables for our performance obligations recognized at a point in time are recorded within accounts receivable and were approximately $44 million and $31 million as of December 31, 2019 and 2018, respectively. (2) Retainages classified within Accounts receivable-trade, net are amounts anticipated to be collected within one year and as to which we have an unconditional right to collect from the customer, subject only to the passage of time. Retainages anticipated to be collected beyond one year are classified as Accounts receivable long- term retainages on our Balance Sheet and totaled $24 million, of which $18 million and $6 million are anticipated to be collected in 2021 and thereafter, respectively.

NOTE 9 – GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

Our goodwill balance is attributable to the excess of the purchase price over the fair value of net assets acquired in connection with the Combination. The changes in the carrying amount of goodwill by reporting units, which represent our reporting segments, for 2019 were as follows:

NCSA EARC MENA Technology Total (In millions) Balance as of December 31, 2018 (1) $ 1,041 $ 421 $ 46 $ 1,146 $ 2,654 Adjustments to finalize purchase accounting estimates (2) 160 - 4 4 168 Allocation to APP disposition (90) - - - (90) Currency translation adjustments - (5) - (11) (16) Goodwill impairment (1,111) (319) - - (1,430) Balance as of December 31, 2019 $ - $ 97 $ 50 $ 1,139 $ 1,286

(1) As of December 31, 2018, we had approximately $2.2 billion of cumulative impairment charges recorded in conjunction with our impairment assessment performed during the fourth quarter of 2018, as previously described in the 2018 Form 10-K. (2) Our purchase accounting allocation was finalized in the second quarter of 2019. See Note 3, Business Combination, for further discussion.

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Impairment Assessment— During the third quarter of 2019, we experienced significant and sustained deterioration in our enterprise market capitalization due to a decline in the trading price of our common stock. In addition, during the third quarter of 2019, we recognized incremental unfavorable changes in cost estimates to complete the Cameron and Freeport LNG projects (see Note 5, Revenue Recognition, and Note 6, Project Changes in Estimates, for discussion), which resulted in a deterioration in our future cash flow expectations and an increase in our associated risk assumptions. As a result of these triggering events and circumstances, we determined that it was more likely than not that the fair values of our reporting units were below their respective carrying values. Accordingly, we performed an interim quantitative impairment assessment as of August 31, 2019 on our NCSA, EARC, MENA and Technology reporting units.

To determine the fair value of our reporting units and test for impairment, we utilized an income approach (discounted cash flow method), as we believed this was the most direct approach to incorporate the specific economic attributes and risk profiles of our reporting units into our valuation model. We generally do not utilize a market approach, given the lack of relevant information generated by market transactions involving comparable businesses. However, to the extent market indicators of fair value become available, we consider such market indicators as well as market participant assumptions in our discounted cash flow analysis and determination of fair value. The discounted cash flow methodology is based, to a large extent, on assumptions about future events, which may or may not occur as anticipated, and such deviations could have a significant impact on the calculated estimated fair values of our reporting units. These assumptions included the use of significant unobservable inputs, representative of a Level 3 fair value measurement, and included, but were not limited to, estimates of discount rates, future growth rates and terminal values for each reporting unit.

The discounted cash flow analysis for each of our reporting units included forecasted cash flows over a five-year forecast period (2020 through 2024), with our updated 2019 management budget used as the basis for our projections. These forecasted cash flows took into consideration historical and recent results, the reporting unit’s backlog and near-term prospects and management’s outlook for the future. A terminal value was also calculated using a terminal value growth assumption to derive the annual cash flows after the discrete forecast period. A reporting unit specific discount rate was applied to the forecasted cash flows and terminal cash flows to determine the discounted future cash flows, or fair value, of each reporting unit. Our assessment took into consideration the incremental changes in project estimates discussed above and reflected the increased market risk surrounding the award and execution of future projects. We also adjusted our cost of capital assumptions to be in-line with recent market indicators for our company and industry.

Based on our quantitative assessments, goodwill for our NCSA reporting unit was fully impaired, and goodwill for our EARC reporting unit was partially impaired. We determined the goodwill associated with our MENA and Technology reporting units was not impaired, as the fair value of each such reporting unit exceeded its net book value by more than 96% and 28%, respectively. The impairment did not have a net tax benefit.

The impairment primarily resulted from updates to the 2019 management budget and increases in our discount rate assumptions driven by increases in our cost of capital and risk premium assumptions associated with forecasted cash flows.

Key assumptions used in deriving the reporting units’ fair values in our interim quantitative impairment assessment were as follows:

Compound Discount annual growth Terminal rate rate growth rate NCSA 33.0% 29% 2% EARC 33.5% 46% 2% MENA 34.0% 17% 2% Technology 15.0% 8% 2%

During the fourth quarter of 2019, we identified indicators of impairment related to the goodwill allocated to our EARC reporting unit, primarily driven by further deterioration in the actual financial performance during 2019, reduced attributable cash flows reflected in our 2020 management budget and an increase in our discount rate assumption from 33.5% to 35.5%. To determine the fair value of EARC as of December 31, 2019 and test for impairment, we utilized an income approach (discounted cash flow method), discussed above. The discounted cash flow analysis for EARC included forecasted cash flows over a five-year forecast period (2020 through 2024), with our updated 2020 management budget used as the basis for our projections. These forecasted cash flows took into consideration historical and recent results, EARC backlog and near-term prospects and management’s outlook for the future. A terminal value was also calculated using a terminal value growth assumption to derive the annual cash flows after the discrete forecast period. A reporting unit specific discount rate (35.5%) was applied to the forecasted cash flows and terminal cash flows to determine the discounted future cash flows, or fair value. Based on our quantitative assessment, goodwill associated with our EARC reporting unit was further impaired by $59 million in the fourth quarter of 2019, and the remaining EARC goodwill balance was $97 million as of December 31, 2019.

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Project-Related and Other Intangibles

During the third quarter of 2019, we determined there were indicators of impairment related to our trade names intangible asset, resulting from incremental unfavorable changes in estimates to complete certain key projects, including the Cameron and Freeport LNG projects (see Note 5, Revenue Recognition and Note 6, Project Changes in Estimates, for discussion). This determination resulted in a decrease in our future attributable cash flow expectations.

In light of the impairment indicators, we also performed a review of the useful life estimate of the trade names intangible asset allocated to our NCSA reporting unit. Our assessment of the useful life took into consideration the estimated future attributable cash flows from the trade names asset based on an evaluation of associated backlog, key loss projects that remain incomplete, expected future awards and opportunities and the forecast financial performance of the NCSA reporting unit. Using our updated estimate, which reflects lower attributable cash flow benefits from the trade names intangible asset, we determined the remaining useful life of the trade names associated with our NCSA reporting unit (other than the storage tanks business) to be 1.8 years, compared to our previous estimate of 8.7 years.

Using our revised remaining useful life, a test of recoverability was performed as of August 31, 2019, indicating that the trade names intangible asset, within other intangible assets, had an undiscounted value below carrying value. As a result, we determined the fair value of the trade names intangible asset, resulting in an impairment of $140 million. Key inputs leading to the impairment included the shortened remaining useful life of the asset, updated estimated attributable cash flows based on revenue obsolescence assumptions and reductions in management’s budget. The fair value of the impaired intangible asset was determined using an income approach and was estimated based on the present value of projected future cash flows attributable to the asset. These estimates were based on unobservable inputs requiring significant judgement and were representative of a Level 3 fair value measurement.

Subsequent to the August 2019 impairment test, during the fourth quarter of 2019, we identified further triggers indicating impairment of the NCSA trade names intangible asset and the EARC process technologies intangible asset, primarily driven by a deterioration in attributable cash flows as reflected in our 2020 management budget. We utilized an income approach to estimate the updated fair values of the NCSA trade names and EARC process technologies intangible assets as of December 31, 2019, resulting in impairments of $17 million and $2 million, respectively.

Following the impact of the 2019 impairment charges and reductions to the carrying value, the impact of this change in the useful life for the NCSA trade names intangible asset was not material to the operating results in 2019 and is expected to result in lower amortization expense in 2020 and 2021 by approximately $15 million and $21 million, respectively.

Our other intangible assets at December 31, 2019 and 2018, including the December 31, 2019 weighted-average useful lives, were as follows:

December 31, 2019 December 31, 2018 Weighted Average Gross Net Gross Net Useful Carrying Accumulated Carrying Carrying Accumulated Carrying Life Amount Amortization Amount Amount Amortization Amount (In years) (In millions) Process technologies 27 $ 509 $ (36) $ 473 $ 514 $ (14) $ 500 Trade names 13 212 (31) 181 401 (23) 378 Customer relationships 10 123 (47) 76 129 (23) 106 Trademarks 10 26 (5) 21 27 (2) 25 Total (1) 21 $ 870 $ (119) $ 751 $ 1,071 $ (62) $ 1,009

(1) The decrease in other intangible assets during 2019 primarily related to an impairment charge of $159 million, amortization expense of $87 million, intangible assets allocated to the disposition of APP and the impact of foreign currency translation, partially offset by an increase of approximately $6 million due to the acquisition of the assets of Siluria, discussed in Note 4, Acquisition and Disposition Transactions. Amortization expense is anticipated to be $75 million, $64 million, $52 million, $51 million and $50 million for 2020, 2021, 2022, 2023 and 2024, respectively.

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Our project-related intangibles at December 31, 2019 and 2018, including the December 31, 2019 weighted-average useful lives, were as follows:

December 31, 2019 December 31, 2018 Weighted Average Gross Net Gross Net Useful Carrying Accumulated Carrying Carrying Accumulated Carrying Life Amount Amortization Amount Amount Amortization Amount (In years) (In millions) Project-related intangible assets 4 $ 246 $ (198) $ 48 $ 259 $ (122) $ 137 Project-related intangible liabilities 2 (109) 99 (10) (109) 43 (66) Total (1) $ 137 $ (99) $ 38 $ 150 $ (79) $ 71

(1) The decrease in project-related intangible assets during 2019 primarily related to net amortization expense of $34 million, impairment of $3 million and the impact of foreign currency translation. Net amortization expense is anticipated to be $22 million, $5 million, $8 million and $2 million for 2020, 2021, 2022 and 2023, respectively.

NOTE 10 – JOINT VENTURE AND CONSORTIUM ARRANGEMENTS

As discussed in Note 2, Basis of Presentation and Significant Accounting Policies, we account for our unconsolidated joint ventures or consortiums using either proportionate consolidation, when we meet the applicable accounting criteria to do so, or the equity method. Further, we consolidate any joint venture or consortium that is determined to be a VIE for which we are the primary beneficiary or which we otherwise effectively control.

Proportionately Consolidated Consortiums—The following is a summary description of our significant consortiums that have been deemed to be VIEs where we are not the primary beneficiary and are accounted for using proportionate consolidation: • McDermott/Zachry Industrial Inc. (“Zachry”)—We have a 50%/50% consortium with Zachry to perform engineering, procurement and construction (“EPC”) work for two LNG liquefaction trains in Freeport, Texas. In addition, we have subcontract and risk sharing arrangements with a unit of Chiyoda Corporation (“Chiyoda”) to support our responsibilities to the venture. The costs of these arrangements are recorded in Cost of operations. • McDermott/Zachry/Chiyoda—We have a consortium with Zachry and Chiyoda (MDR—33.3% / Zachry—33.3% / Chiyoda—33.3%) to perform EPC work for an additional LNG liquefaction train at the project site in Freeport, Texas. • McDermott/Chiyoda—We have a 50%/50% consortium with Chiyoda to perform EPC work for three LNG liquefaction trains in Hackberry, Louisiana. • McDermott/CTCI—We have a 42.5%/57.5% consortium with a unit of CTCI Corporation (“CTCI”) to perform EPC work for a mono-ethylene glycol facility in Gregory, Texas. • CCS JV s.c.a.r.l.—We have a joint venture with Saipem and Chiyoda (MDR—24.983% / Saipem— 74.949% / Chiyoda— 0.068%) for the turnkey construction of two natural gas liquefaction trains and the relevant supporting structures in the Republic of Mozambique.

The following table presents summarized balance sheet information for our share of our proportionately consolidated consortiums:

December 31, 2019 December 31, 2018 (In millions) Current assets (1) $ 529 $ 299 Non-current assets 6 10 Total assets $ 535 $ 309

Current liabilities $ 671 $ 992

(1) Our consortium arrangements may allow for excess working capital of the consortium to be advanced to the consortium participants. Such advances are returned to the ventures for working capital needs as necessary. Accordingly, at a reporting period end a consortium may have advances to its participants which are reflected as an advance receivable within current assets of the consortium. As of December 31, 2019 and 2018, Accounts receivable—other included $41 million and $44 million, respectively, related to our proportionate share of advances from the consortiums to the other consortium participants.

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As of December 31, 2019 and 2018, Accrued liabilities on the Balance Sheets included $29 million and $53 million, respectively, related to advances from these consortiums.

Collaborative Arrangement— The following is a summary description of our significant consortium that has been deemed a collaborative arrangement, in which we are not the primary beneficiary and we record our share of the consortium’s revenues, costs and profits: • McDermott/Zachry/Chiyoda—We have a consortium with Zachry and Chiyoda to perform EPC work for a natural gas liquefaction facility in Sabine Pass, Texas. The collaborative arrangement includes an underlying primary consortium with all three parties sharing equal interests. This primary consortium has subcontract relationships with a separate consortium between Zachry and McDermott, with equal interests and separate scopes of work to be executed by each consortium party.

The following table presents summarized balance sheet information for our share of that proportionately consolidated collaborative arrangement:

December 31, 2019 (In millions) Current assets $ 180 Non-current assets - Total assets $ 180

Current liabilities $ 175

Equity Method Joint Ventures—The following is a summary description of our significant joint ventures accounted for using the equity method: • Chevron Lummus Global, L.L.C. (“CLG”)—We have a 50%/50% joint venture with a unit of Chevron Corporation which provides proprietary process technology licenses and associated engineering services and catalysts, primarily for the refining industry. As sufficient capital investments in CLG have been made by the joint venture participants, it does not qualify as a VIE. • NET Power, LLC (“NET Power”)—We have a joint venture with a unit of Exelon Corporation (“Exelon”), 8 Rivers Capital and Oxy Low Carbon Ventures LLC, a subsidiary of Occidental Petroleum Corporation (“Oxy”), (MDR—32.5% / Exelon—32.5% / 8 Rivers Capital—29.6% / Oxy— 5.4%) to commercialize a new natural gas power generation system that recovers the carbon dioxide produced during combustion. NET Power is building a first-of-its- kind demonstration plant which is being funded by contributions and services from the joint venture participants and other parties. On November 8, 2018, NET Power signed an investment agreement for Oxy to purchase 10% of the company for $60 million over a three-year period. On March 8, 2019 and September 30, 2019, Oxy paid $20 million and $11 million, respectively, and received a 5.4% interest in NET Power. We have determined the joint venture to be a VIE; however, we are not the primary beneficiary and therefore do not consolidate it. • McDermott/CTCI—We have a 50%/50% joint venture with CTCI to perform EPC work for a liquids ethylene cracker and associated units at Sohar, Oman. We have determined the joint venture to be a VIE; however, we are not the primary beneficiary and therefore do not consolidate it. Our joint venture arrangement allows for excess working capital of the joint venture to be advanced to the joint venture participants. Such advances are returned to the joint venture for working capital needs as necessary. As of December 31, 2019 and 2018, Accrued liabilities on our Balance Sheet included $95 million related to advances from this joint venture. • io Oil and Gas—We co-own several 50%/50% joint venture entities with Baker Hughes, a GE company. These joint venture entities focus on the pre-FEED phases of projects in offshore markets, bring comprehensive field development expertise and provide technically advanced solutions in new full field development concept selection and evaluation. • Qingdao McDermott Wuchuan Offshore Engineering Company Ltd.—We have a 50%/50% joint venture with Wuhan Wuchuan Investment Holding Co., Ltd., a leading shipbuilder in China. This joint venture provides project management, procurement, engineering, fabrication, construction and pre-commissioning of onshore and offshore oil and gas structures, including onshore modules, topsides, floating production storage, off-loading modules, subsea structures and manifolds.

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Amortization expense associated with fair value adjustments recorded to Investments in unconsolidated affiliates in conjunction with the Combination was $11 million and $12 million for the years ended December 31, 2019 and 2018, respectively.

Dividends received from our equity method joint ventures were approximately $22 million and $4 million in 2019 and 2018, respectively. There were no dividends received in 2017.

Consolidated Joint Ventures—The following is a summary description of our significant joint ventures we consolidate due to their designations as VIEs for which we are the primary beneficiary: • McDermott/Orano— We have a joint venture with Orano, of which we own 70% and Orano owns 30%, relating to a mixed oxide fuel fabrication facility in Aiken, South Carolina. In addition, we have a profit sharing agreement to transfer to Orano 18% of the profits attributable to us. The project was substantially complete as of December 31, 2019. In the fourth quarter of 2019, we made a $25 million disbursement to Orano in partial settlement of its non-controlling interest. • McDermott/Kentz—We have a venture with Kentz Engineers & Constructors, a unit of SNC-Lavalin Group “Kentz” (McDermott—65% / Kentz—35%), to perform the structural, mechanical, piping, electrical and instrumentation work on, and to provide commissioning support for, three LNG trains, including associated utilities and a gas processing and compression plant, for the Gorgon LNG project, located on Barrow Island, Australia. The project is substantially complete. The joint venture remains in operation to complete various post-project activities.

The following table presents summarized balance sheet information for our consolidated joint ventures, including other consolidated joint ventures that are not individually material to our financial results:

December 31, 2019 December 31, 2018 (In millions) Current assets $ 39 $ 102 Non-current assets 16 15 Total assets $ 55 $ 117

Current liabilities $ 120 $ 138

Other— The use of joint ventures and consortiums exposes us to a number of risks, including the risk that the third-party joint venture or consortium participants may be unable or unwilling to provide their share of capital investment to fund the operations of the joint venture or consortium or complete their obligations to us, the joint venture or consortium, or ultimately, our customer. Differences in opinions or views among joint venture or consortium participants could also result in delayed decision- making or failure to agree on material issues, which could adversely affect the business and operations of a joint venture or consortium. In addition, agreement terms may subject us to joint and several liability for the third-party participants in our joint ventures or consortiums, and the failure of any of those third parties to perform their obligations could impose additional performance and financial obligations on us. These factors could result in unanticipated costs to complete the projects, liquidated damages or contract disputes.

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NOTE 11—SUPPLEMENTAL BALANCE SHEET DETAIL

The components of property, plant and equipment, other current assets, and other current and non-current liabilities as of December 31, 2019 and 2018 were as follows:

December 31, 2019 2018 (In millions) Property, plant and equipment Marine vessels $ 1,723 $ 1,686 Construction and other equipment 643 704 Buildings 296 292 Company equipment under construction 204 99 Assets under finance lease 59 75 Land 39 41 Other 282 185 Total property, plant and equipment 3,246 3,082 Accumulated depreciation (1) (1,117) (1,015) Property, plant and equipment, net $ 2,129 $ 2,067

Accrued liabilities Accrued contract costs $ 767 $ 796 Advances from equity method and proportionally consolidated joint ventures and consortiums (2) 124 148 Income taxes payable 70 69 Accrued interest payable 126 32 Other accrued liabilities (3) 571 519 Accrued liabilities $ 1,658 $ 1,564

Other non-current liabilities Pension, post-retirement medical and other employee benefit obligations $ 338 $ 324 Self-insurance reserve 76 80 Income tax reserves 84 86 Other (4) 285 174 Other non-current liabilities $ 783 $ 664

(1) Our depreciation expense was approximately $128 million, $115 million and $93 million in 2019, 2018 and 2017, respectively. For a discussion relating to impairments of marine-vessel-related property, plant and equipment, see Note 16, Fair Value Measurements. (2) Represents advances from our joint ventures and consortiums in which we participate. See Note 10, Joint Venture and Consortium Arrangements for further discussion. (3) Represents various accruals that are individually less than 5% of total current liabilities. (4) Includes $129 million in 2019 and $17 million in 2018 associated with accrued liabilities incurred in connection with the Amazon Modification Agreements, as defined in Note 14, Lease Obligations.

Interest Capitalization—We incurred interest of $749 million, $270 million and $67 million and capitalized $7 million, $4 million and $2 million of interest in 2019, 2018 and 2017, respectively. The capitalized interest primarily related to information technology projects and vessels under construction.

NOTE 12—RESTRUCTURING AND INTEGRATION COSTS AND TRANSACTION COSTS

2019— Restructuring and integration costs were $114 million, and included change-in-control, severance, professional fees and costs of settlement of litigation, as well as costs to achieve our combination profitability initiative (“CPI”) program. We launched the CPI program in the second quarter of 2018, with the goal of realizing transformative cost savings across our business. The program incorporates the activities of our Fit 2 Grow program previously announced in the fourth quarter of 2017 and targets a significant improvement in cost controls across five main opportunity areas: (1) procurement and supply chain; (2) systems, applications and support; (3) assets and facilities; (4) perquisites, travel and other; and (5) workforce efficiency. Our accrued liability associated with these costs was not material as of December 31, 2019.

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Transaction costs were $57 million and primarily related to legal and other professional fees associated with the sale processes for the pipe fabrication business and the Lummus technology business and the now-terminated effort to sell our industrial storage tanks business, as well as professional and other fees associated with the Chapter 11 Cases. Our accrued liability associated with transaction costs was approximately $6 million as of December 31, 2019.

2018—Restructuring and integration costs were $134 million and primarily related to costs to achieve our CPI program. Transaction costs were $48 million and related to professional service fees (including audit, legal and advisory services) associated with the Combination. Our accrued liability associated with these costs was not material as of December 31, 2018.

2017—No restructuring, integration or material transaction costs were incurred.

Restructuring and integration costs and transaction costs are recorded within our Corporate operating results.

NOTE 13—DEBT

The carrying values of our long-term debt obligations are as follows:

December 31, 2019 2018 (In millions) Current Revolving credit facility $ 801 $ -

New Term Facility $ 746 $ - Term Facility 2,220 23 10.625% senior notes 1,300 - Structured equipment financing 32 - North Ocean 105 construction financing 8 8 Less: unamortized debt issuance costs - (1) Current debt, net of unamortized debt issuance costs 4,306 30

Long-term Term Facility $ - $ 2,243 10.625% senior notes - 1,300 North Ocean 105 construction financing - 16 Less: current maturities of long-term debt - (30) Less: unamortized debt issuance costs - (136) Long-term debt, net of unamortized debt issuance costs $ - $ 3,393

As a result of the debt compliance matters discussed below, and substantial doubt regarding our ability to continue as a going concern, we determined that the classification of all of our long-term debt obligations, including finance lease obligations, was current as of December 31, 2019. Accordingly, those obligations have been recorded within Current Liabilities on the Balance Sheet.

Superpriority Credit Agreement

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The Superpriority Credit Agreement contains various affirmative covenants, including requirements that: • McDermott appoint a Chief Transformation Officer, to report to McDermott’s CEO and Board of Directors (the “Board”); • concurrently with the funding of Tranche B, McDermott issue equity, so that participating lenders receive equity in McDermott totaling up to an aggregate of 15% of McDermott’s issued and outstanding shares of common stock (on a pro rata basis relative to each lender’s commitment amount); and • in addition to customary periodic financial reporting obligations, McDermott deliver periodic cash flow forecasts and variance reports to the lenders under the Superpriority Credit Agreement.

Adjusted EBITDA Test Period End Date (In millions) December 31, 2019 $ 430 March 31, 2020 470 June 30, 2020 530 September 30, 2020 880 December 31, 2020 960 March 31, 2021 1,090 June 30, 2021 1,210

In addition, the Superpriority Credit Agreement contains various covenants that, among other restrictions, limit our ability to:

• incur or assume indebtedness; • grant or assume liens; • make acquisitions or engage in mergers; • sell, transfer, assign or convey assets;

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• make investments; • repurchase equity and make dividends and certain other restricted payments; • change the nature of our business; • engage in transactions with affiliates; • enter into burdensome agreements; • modify our organizational documents; • enter into sale and leaseback transactions; • make capital expenditures; • enter into speculative hedging contracts; and • make prepayments on certain junior debt.

Credit Agreement

The Credit Agreement provides that:

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The future scheduled maturities of the Term Facility are:

(In millions) 2020 $ 23 2021 23 2022 23 2023 23 2024 23 Thereafter 2,105

$ 2,220

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In addition, the Credit Agreement contains various covenants that, among other restrictions, limit our ability to:

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• enter into burdensome agreements; • modify our organizational documents; • enter into sale and leaseback transactions; • make capital expenditures; • enter into speculative hedging contracts; and • make prepayments on certain junior debt.

Letter of Credit Agreement

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Senior Notes

Optional redemption

Year price 2021 105.313% 2022 102.656% 2023 and thereafter 100.000%

As of December 31, 2019, the outstanding borrowing under this facility was approximately $8 million and is scheduled to mature in 2020.

128 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(3) Approximately $175 million of this capacity is available only upon provision of an equivalent amount of cash collateral.

(4) Excludes approximately $312 million of surety bonds maintained on behalf of CB&I’s former Capital Services Operations, which were sold to CSVC Acquisition Corp (“CSVC”) in June 2017. We also continue to maintain guarantees on behalf of CB&I’s former Capital Services Operations business and we are entitled to an indemnity from CSVC for the surety bonds and guarantees.

Covenants Compliance

Debtor-in-Possession Financing

In connection with the RSA and the Chapter 11 Cases, certain Consenting Parties or their affiliates provided us with superpriority debtor-in-possession financing pursuant to the DIP Credit Agreement. The DIP Credit Agreement provides for, among other things, term loans and letters of credit in an aggregate principal amount of up to $2.81 billion, including: (1) up to $2,067 million under a term loan facility consisting of (a) a $550 million tranche that was made available at closing, (b) a $650 million tranche that was made available upon entry of the Final DIP Order (as defined in the RSA), (c) a $823 million tranche consisting of the principal amount of term loans outstanding under Tranche A and Tranche B of the New Term Loan Facility under our Superpriority Credit Agreement and accrued interest and fees related to term loans outstanding under Tranche A and Tranche B of the New Term Loan Facility under our Superpriority Credit Agreement and the New LC Facility under our Superpriority Credit Agreement, in each case that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order and (d) a $44 million tranche consisting of the make-whole amount owed to the lenders under our Superpriority Credit Agreement that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order (the “DIP Term Facility”) and (2) up to $743 million under a letter of credit facility consisting of (a)

129 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

$300 million made available at closing, (b) $ 243 million that was made available upon entry of the Final DIP Order and (c) $200 million amount of term loans outstanding under Tranche A and Tranche B of the New LC Facility under our Superpriority Credit Agreement that was rolled up from the Superpriority Credit Agreement and deemed issued under the DIP Credit Agreement upon entry of the Final DIP Order (the “DIP LC Facility” and, together with the DIP Term Facility, the “DIP Facilities”). The Final DIP Order was entered by the Bankruptcy Court on February 24, 2020.

We intend to use proceeds of the DIP Facilities to, among other things: (1) pay certain fees, interest, payments and expenses related to the Chapter 11 Cases; (2) pay adequate protection payments; (3) fund our working capital needs and expenditures during the Chapter 11 proceedings; (4) fund the Carve-Out (as defined below), which accounts for certain administrative, court and legal fees payable in connection with the Chapter 11 Cases; and (5) pay fees and expenses related to the transactions contemplated by the DIP Facilities.

All loans outstanding under the DIP Term Facility bear interest at an adjusted LIBOR rate plus 9.00% per annum. All undrawn letters of credit under the DIP LC Facility (other than cash secured letters of credit) bear interest at a rate of 9.00% per annum. During the continuance of an event of default, the outstanding amounts under the DIP Facilities would bear interest at an additional 2.00% per annum above the interest rate otherwise applicable.

130 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

• beginning with the fiscal quarter ended June 30, 2020, our adjusted EBITDA (as defined in the DIP Facilities) for the most recently ended four fiscal quarter period for which consolidated financial statements have been delivered pursuant to the DIP Facilities shall not be less than the minimum amount set forth below as set forth opposite such ended fiscal quarter:

Adjusted EBITDA Test Period End Date (In millions) June 30, 2020 230 September 30, 2020 410 December 31, 2020 640

Maximum Project Charges Test Period End Date (In millions) December 31, 2019 260 March 31, 2019 50 June 30, 2020 50 September 30, 2020 40 December 31, 2020 30

As of December 31, 2019, we were in compliance with our maximum project charges covenant under the DIP Facilities.

Debt Issuance Costs

During 2019, we paid approximately $160 million of fees and expenses, primarily relating to the establishment of the Superpriority Credit Agreement.

In December 2019, primarily due to our non-compliance with certain covenants and other obligations contained in our financing arrangements, as discussed above, we recognized in interest expense in our Consolidated Statement of Operations approximately $316 million of debt issue costs (“DIC”), primarily associated with the accelerated amortization of DIC on: (1) the New Term Facility under the Superpriority Credit Agreement ($130 million); (2) the Term Facility ($87 million); (3) the Senior Notes ($52 million); and (4) the revolving credit facility under the Credit Agreement ($18 million).

131 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14—LEASE OBLIGATIONS

The following tables summarize our leased assets and lease liability obligations:

December 31, December 31, 2019 2018 (In millions) Leases Classification Assets Operating lease assets Operating lease right-of-use assets $ 364 $ - Finance lease assets Property, plant and equipment, net 50 70 Total leased assets 414 70 Liabilities Current Current portion of long-term lease Operating 98 - obligations Finance (1) Finance lease obligation 47 8 145 8 Noncurrent Operating Long-term lease obligations 304 - Finance Finance lease obligation - 66 304 66

Total lease liabilities $ 449 $ 74

(1) As a result of the debt compliance matters, we determined that the classification our finance lease obligations was current and, accordingly, we recorded those obligations within Current Liabilities on the Balance Sheet as of December 31, 2019.

132 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Our lease cost was as follows:

Year ended December 31, 2019 Lease cost Classification in the Statement of Operations (In millions) Operating lease cost (1) SG&A expenses $ 52 Operating lease cost (1) Cost of operations 89 Finance lease cost Amortization of leased assets Cost of operations 3 Interest on lease liabilities Net interest expense 4 Net lease cost $ 148

(1) Includes short-term leases and immaterial variable lease costs.

Future minimum lease payments for our operating and finance lease obligations as of December 31, 2019 are as follows:

Operating leases Finance leases Total (In millions) 2020 $ 102 $ 8 $ 110 2021 89 8 97 2022 77 8 85 2023 61 8 69 2024 54 8 62 After 2024 287 24 311 Total lease payments 670 64 734 Less: Interest (268) (17) (285)

Present value of lease liabilities $ 402 $ 47 $ 449

Lease term and discount rates for our operating and finance lease obligations are as follows:

Lease Term and Discount Rate December 31, 2019 Weighted-average remaining lease term (years) Operating leases 7.5 Finance leases 8.1 Weighted-average discount rate Operating leases 9.8% Finance leases 9.9%

Supplemental information for our operating and finance lease obligations are as follows:

Other information December 31, 2019 (In millions) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ (106) Financing cash flows from finance leases (6) Leased assets obtained in exchange for new operating lease liabilities 364 Leased assets obtained in exchange for new finance lease liabilities -

133 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15—PENSION AND POSTRETIREMENT BENEFITS

Defined Contribution Plans

We sponsor multiple defined contribution plans for eligible employees with various features, including voluntary employee pre-tax and Roth-based contributions, and employer matching and other contributions. We expensed $37 million in 2019, $22 million in 2018 (including $16 million associated with the acquired CB&I plans from the Combination Date through December 31, 2018), and $5 million in 2017 for these plans. We also provide benefits under the McDermott International, Inc. Director and Executive Deferred Compensation Plan (the “Deferred Compensation Plan”), which is a non-qualified defined contribution plan. In addition, we sponsor multiple defined contribution plans that cover eligible employees for which we do not provide contributions. The cost of these plans was not significant to us in 2019, 2018 or 2017.

Defined Benefit Pension and Other Postretirement Plans We sponsor various defined benefit pension plans covering eligible employees and provide specific post-retirement benefits for eligible retired U.S. employees and their dependents through health care and life insurance benefit programs. These plans may be changed or terminated by us at any time. The following tables present information for our material defined benefit pension and other postretirement plans:

Components of Net Periodic Benefit Cost

U. S. Pension Plans Non-U. S. Pension Plans Other Postretirement Plans Year Ended December 31, Year Ended December 31, Year Ended December 31, 2019 2018 2017 2019 2018 2017 2019 2018 2017 (In millions) Components of periodic benefit cost: Service cost $ - $ - $ - $ 11 $ 8 $ - $ - $ - $ - Interest cost 19 18 20 18 12 1 1 1 - Expected return on plan assets (17) (19) (20) (23) (17) (1) - - - Amortization of prior service costs ------(1) - - Actuarial loss (gain) (1) (21) 15 (5) 30 33 - (2) (1) -

Net periodic benefit cost (income) (2) (3) $ (19) $ 14 $ (5) $ 36 $ 36 $ - $ (2) $ - $ -

(1) Actuarial loss for 2019 was $6 million and was primarily associated with loss in the Netherlands plan ($37 million) partially offset by actuarial gains in the United States ($23 million) and the United Kingdom ($7 million) plans. (2) The components of periodic benefit cost (income) other than the service cost component are included within Other non-operating expense (income) in our Statements of Operations. The service cost component is included in Cost of operations and SG&A expenses, in our Statements of Operations, along with other compensation costs rendered by the participating employees. (3) Net periodic benefit cost for 2018 included expense of $37 million for the acquired CB&I plans from the Combination Date through December 31, 2018.

134 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Change in Projected Benefit Obligation and Plan Assets

U. S. Pension Non-U. S. Pension Other Postretirement

Plans Plans Plans 2019 2018 2019 2018 2019 2018 (In millions) Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 481 $ 511 $ 902 $ - $ 20 $ - Acquisition (1) - 16 - 933 - 31 Service cost - - 11 8 - - Interest cost 19 18 18 12 1 1 Actuarial loss (gain) 40 (27) 96 (7) (2) (1) Prior service cost (2) - - - 5 - (11) Plan participants' contribution - - 3 2 - 1 Benefits paid (37) (37) (38 ) (27) (1) (1) Currency translation - - - (24) - - Projected benefit obligation at end of year $ 503 $ 481 $ 992 $ 902 $ 18 $ 20

Change in plan assets: Fair value of plan assets at beginning of year $ 450 $ 497 $ 703 $ 1 $ - $ - Acquisition (1) - 12 - 763 - - Actual return (loss) on plan assets 78 (23) 90 (23) - - Company contributions 1 1 14 5 1 1 Plan participants' contributions - - 3 2 - - Benefits paid (37) (37) (38 ) (25) (1) (1) Currency translation - - 3 (20) - - Fair value of plan assets at end of year 492 450 775 703 - - Net funded status $ (11) $ (31) $ (217) $ (199) $ (18) $ (20)

Amounts recognized in balance sheet consist of: Prepaid benefit cost within Other non-current $ 9 $ - $ 9 $ 4 $ - $ - assets Accrued benefit cost within accrued liabilities (1) (2) (2) (2) (2) (2) Accrued benefit cost within Other non-current (19) (29) (224) (201) (16) (18) liabilities Net funded status recognized $ (11) $ (31) $ (217) $ (199) $ (18) $ (20)

Unrecognized net prior service cost (credits) $ - $ - $ 4 $ 4 $ (10) $ (11)

Accumulated other comprehensive loss $ - $ - $ 4 $ 4 $ (10) $ (11) (income), before taxes

(1) Acquisition amounts include the benefit obligation and plan assets at the Combination Date associated with acquired CB&I pension plans. (2) Prior service cost for 2018 primarily related to plan changes for our plans in the United Kingdom and our U.S. retiree welfare plan. Prior service cost for plan changes is deferred to AOCI and amortized into Other non-operating expense (income).

135 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Accumulated Benefit Obligations—As of December 31, 2019 and 2018, the accumulated benefit obligation for all defined benefit pension plans was $1.5 billion and $1.4 billion, respectively. The following table includes summary information for those defined benefit plans with an accumulated benefit obligation in excess of plan assets:

U. S. Pension Non-U. S Other Postretirement

Plans Pension Plans Plans 2019 (1) 2018 2019 2018 2019 2018 (In millions) Projected benefit obligation $ 32 $ 481 $ 877 $ 796 $ 17 $ 20 Accumulated benefit obligation $ 32 $ 481 $854 $ 777 $ 17 $ 20

Fair value of plan assets $ 12 $ 450 $ 651 $ 594 $ - $ -

(1) The decrease from 2018 to 2019 primarily related to our U.S. qualified plan being in a net funded position in 2019, as the plan’s fair value exceeded its accumulated benefit obligation.

Plan Assumptions —The following table presents the weighted-average assumptions used to measure our defined benefit pension and other postretirement plans:

U. S. Pension Non-U. S. Pension Other Postretirement Plans Plans Plans 2019 2018 2019 2018 2019 2018 Weighted average assumptions used to determine net periodic benefit obligations at December 31, Discount rate 3.0% 4.1% 1.3% 2.1% 3.1% 4.1% Rate of compensation increase (1) N/A N/A 1.3% 1.6% N/A N/A Weighted average assumptions used to determine

net periodic benefit cost: Discount rate 4.1% 3.6% 2.1% 2.1% 4.1% 4.1% Expected return on plan assets (2) 4.0% 4.0% 3.5% 3.5% N/A N/A

Rate of compensation increase (1) N/A N/A 1.3% 1.6% N/A N/A

(1) The rate of compensation increase relates solely to the defined benefit plans that factor compensation increases into the valuation. (2) The expected long-term rate of return on plan assets was derived using historical returns by asset category and expectations of future performance.

The following table illustrates the sensitivity to changes in certain assumptions, holding all other assumptions constant, for our pension plans.

Effect on Pretax Pension Pension Benefit Expense in Obligation at 2019 (1) December 31, 2019 (in millions) 25-basis-point change in discount rate $ 52 $ 53

(1) A 25-basis-point change in the expected rate of return on plan assets would not have a material impact on pretax pension expense in 2019.

Investment Strategy—Our investment strategy for defined benefit plan assets seeks to optimize the proper risk-return relationship considered appropriate for each respective plan’s investment goals, using a global portfolio of various asset classes diversified by market segment, economic sector and issuer. The primary goal is to optimize the asset mix to fund future benefit obligations, while managing various risk factors and each plan’s investment return objectives.

136 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Our defined benefit plan assets in the U.S. are invested in well-diversified portfolios of equity (including U.S. large, mid and small-capitalization and international equities) and fixed income securities (including corporate and government bonds). Non-U.S. defined benefit plan assets are similarly invested in well-diversified portfolios of equity, fixed income and other securities. As of December 31, 2019, our target weighted-average asset allocations by asset category were: equity securities (20%-25%), fixed income securities (70%-75%) and other investments (5%-10%).

Our pension assets are categorized within the valuation hierarchy based on the lowest level of input that is significant to the fair value measurement. Assets that are valued using quoted prices are classified within level 1 of the valuation hierarchy, assets that are valued using internally developed models that use, as their basis, readily observable market parameters, are classified within level 2 of the valuation hierarchy, and assets that are valued based on models with significant unobservable market parameters are classified within level 3 of the valuation hierarchy.

The following tables present the fair values of our plan assets by investment category and valuation hierarchy level as of December 31, 2019 and 2018:

December 31, 2019 Level 1 Level 2 Level 3 Total Asset category (In millions) Fixed income securities: U.S. fixed income securities $ 168 $ 228 $ 4 $ 400 International government bonds (1) - 254 - 254 International corporate bonds (2) - 99 - 99 International mortgage funds (3) - 66 - 66 All other fixed income securities (4) - 46 - 46 Equity securities: U.S. equities 73 - - 73 International funds (5) - 197 - 197 Emerging markets growth funds - 16 - 16 U.S. equity funds - 15 - 15 Other investments: Asset allocation funds (6) - 86 - 86 Cash and accrued Items 15 - 15 Total Investments $ 256 $ 1,007 $ 4 $ 1,267

December 31, 2018 Level 1 Level 2 Level 3 Total Asset category (In millions) Fixed income securities: U.S. fixed income securities $ 148 $ 223 $ 6 $ 377 International government bonds - 245 - 245 International corporate bonds - 94 - 94 International mortgage funds - 69 - 69 All other fixed income securities - 41 - 41 Equity securities: U.S. equities 57 - - 57 International funds - 157 - 157 Emerging markets growth funds - 13 - 13 U.S. equity funds - 12 - 12 Other investments: Asset allocation funds - 74 - 74 Cash and accrued Items 14 - - 14

Total Investments $ 219 $ 928 $ 6 $ 1,153

The following provides descriptions for plan asset categories with significant balances in the tables above: (1) Investments in predominately E.U. government securities and U.K. Treasury securities, with credit ratings primarily AAA.

137 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(2) Investments in European and U.K. fixed interest securities, with credit ratings of primarily BBB and above. (3) Investments in international mortgage funds. (4) Investments predominantly in various international fixed income obligations that are individually insignificant. (5) Investments in various funds that track international indices. (6) Investments in fixed income securities, equities and alternative asset classes, including commodities and property assets.

Benefit Payments —The following table includes the expected defined benefit and other postretirement plan payments for the next 10 years:

Other U. S. pension Non-U. S. pension postretirement plans plans plans (In millions) Expected employer contributions to trusts of defined benefit plans: 2020 $ 3 $ 14 $ 2 Expected benefit payments: 2020 $ 37 $ 35 $ 2 2021 36 35 1 2022 36 36 1 2023 35 37 1 2024 34 38 1

2025-2029 159 192 5

Health Care Cost Inflation—As noted above, we provide specific postretirement health care benefits for eligible retired U.S. employees and their dependents. Eligible current retirees can elect coverage on a retiree-pay-all basis; there is no longer a company subsidy for the cost of coverage. Future retirees and new employees are not eligible for these post-retirement health care benefits. Additionally, there is a closed group of retirees for which we assume some or all of the cost of coverage. For this group, health care cost trend rates are projected at annual rates ranging from 6.25% in 2020 down to 5.0% in 2025 and after. A change in the assumed health care cost trends by one percentage point is estimated to have an immaterial impact on the total service and interest cost components of net postretirement health care cost for 2019 and the accumulated postretirement benefit obligation as of December 31, 2019.

138 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Multi-Employer Pension Plans

We contribute to certain union sponsored multi-employer defined benefit pension plans in the United States and Canada, all resulting from the acquired CB&I operations. Benefits under these plans are generally based upon years of service and compensation levels. Under U.S. legislation regarding such pension plans, the risks of participation are different than single-employer pension plans as (1) assets contributed to the plan by a company may be used to provide benefits to participants of other companies, (2) if a participating company discontinues contributions to a plan, other participating companies may have to cover any unfunded liability that may exist, and (3) a company is required to continue funding its proportionate share of a plan’s unfunded vested benefits in the event of withdrawal (as defined by the legislation) from a plan or plan termination. The following table provides additional information regarding our significant multi-employer defined benefit pension plans, including the funding level of each plan (or zone status, as defined by the Pension Protection Act), whether actions to improve the funding level of the plan have been implemented, where required (a funding improvement plan (“FIP”) or rehabilitation plan (“RP”)), and our contributions to each plan and total contributions for 2019, among other disclosures:

Expiration Date Pension Protection Act Total Company of Collective

(% Funded) (1) Contributions (2) Bargaining Agreement (3) (4) Plan Year FIP/RP Pension Fund EIN/Plan Number End 2019 2018 Plan 2019 2018 Boilermaker-Blacksmith National Pension Trust 48-6168020-001 12/31 Less Than 65% 65%-80% Yes $ 11 $ 6 Various (5) Boilermakers' National Pension Plan (Canada) 366708 12/31 N/A N/A N/A 2 1 04/19 All Other (6) 2 3 Total $ 15 $ 10

(1) Pension Protection Act Zone Status and FIP/RP plans are applicable to our U.S.-registered plans only, as these terms are not defined within Canadian pension legislation. In the United States, plans funded less than 65% are in the red zone, plans funded at least 65%, but less than 80%, are in the yellow zone, and plans funded at least 80% are in the green zone. The requirement for FIP or RP plans in the United States is based on the funding level or zone status of the applicable plan. (2) Our 2019 contributions as a percentage of total plan contributions were not available for any of our plans. The level of our contributions to each plan noted above varies from period to period based upon the level of work being performed that is covered under the applicable collective bargaining agreement. (3) The expiration dates of our labor agreements associated with the plans noted as “Various” above vary based upon the duration of the applicable projects. (4) If a revised collective-bargaining agreement has not been concluded before the expiration date of this Agreement, it may be extended beyond that date to whatever extent may be mutually agreed to between the Union and the BCA of Alberta, or as provided by applicable laws, statutes or regulations. (5) For both the 2019 and 2018 plan years, the plan utilized an amortization extension. Additionally, in 2019, the plan adopted a rehabilitation plan to enable the plan to reach a funded status of 65% or greater by the end of the rehabilitation period ending in December 31, 2031.

(6) Our remaining contributions in 2019 to various U.S. and Canadian plans were individually immaterial.

We also contribute to our multi-employer plans for annuity benefits covered under the defined contribution portion of the plans as well as health benefits. In 2019, we made contributions to our multi-employer plans of $11 million for these additional benefits.

139 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16—FAIR VALUE MEASUREMENTS

Fair value of financial instruments

Financial instruments are required to be categorized within a valuation hierarchy based upon the lowest level of input that is available and significant to the fair value measurement. The three levels of the valuation hierarchy are as follows: • Level 1—inputs are based on quoted prices for identical instruments traded in active markets. • Level 2—inputs are based on quoted prices for similar instruments in active markets, quoted prices for similar or identical instruments in inactive markets and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets and liabilities. • Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar valuation techniques.

The following table presents the fair value of our financial instruments as of December 31, 2019 and 2018 that are (1) measured and reported at fair value in the Consolidated Financial Statements on a recurring basis and (2) not measured at fair value on a recurring basis in the Consolidated Financial Statements:

December 31, 2019 Carrying Amount Fair Value Level 1 Level 2 Level 3 (In millions) Measured at fair value on recurring basis Forward contracts (1) $ (75) (75) $ - $ (75) $ - Embedded derivatives (2) (28) (28) - - (28) Not measured at fair value on recurring basis Debt and finance lease obligations (3) (4,353) (2,362) - (2,275) (87)

December 31, 2018 Carrying Amount Fair Value Level 1 Level 2 Level 3 (In millions) Measured at fair value on recurring basis Forward contracts $ (39) $ (39) $ - $ (39) $ - Not measured at fair value on recurring basis Debt and finance lease obligations (3,633) (3,287) - (3,197) (90)

(1) The fair value of forward contracts is classified as Level 2 within the fair value hierarchy and is valued using observable market parameters for similar instruments traded in active markets. Where quoted prices are not available, the income approach is used to value forward contracts. This approach discounts future cash flows based on current market expectations and credit risk. (2) The fair value of the embedded derivatives, discussed in Note 13, Debt, is determined using a discounted cash flow approach and is classified as Level 3 because the inputs to the fair value measurement of the embedded derivatives are unobservable and reflect our estimates of forward yield, using a risk-free rate and a USD Energy CCC yield curve. (3) Our debt instruments are generally valued using a market approach based on quoted prices for similar instruments traded in active markets and are classified as Level 2 within the fair value hierarchy. Quoted prices were not available for the NO 105 construction financing, vendor equipment financing or finance leases. Therefore, these instruments were valued based on the present value of future cash flows discounted at estimated borrowing rates for similar debt instruments or on estimated prices based on current yields for debt issues of similar quality and terms and are classified as Level 3 within the fair value hierarchy.

The carrying amounts that we have reported for our other financial instruments, including cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, accounts payable and revolving credit facility debt approximate their fair values due to the short maturity of those instruments.

140 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Fair value of non-financial instruments

We evaluate the vessels in our fleet for impairment whenever events or changes in circumstances indicate their carrying amount may not be recoverable. In those evaluations, we compare estimated future undiscounted cash flows generated by each asset to the carrying value of the asset to determine if a write-down may be required. If the undiscounted cash flow test is failed, we estimate the fair value of the asset and compare such estimated fair value to the carrying value of the asset to determine if there has been an impairment. The fair value measurement is based on inputs that are not observable in the market and thus represent level 3 inputs.

During the third quarter of 2019, indicators of impairment were present for our Thebaud Sea vessel, which was previously impaired in the fourth quarter of 2018, and two of our offshore diving operations saturation support systems. Those indicators of impairment were primarily related to a lack of future utilization plans. We determined the aggregate carrying value of these assets ($26 million) was in excess of their estimated fair value, which approximated the estimated market value ($8 million) and recorded an $18 million non-cash impairment in our Corporate segment. We are considering scrapping or selling these assets.

During the fourth quarter of 2018, indicators of impairment were present for two of our vessels, the Emerald Sea and the Thebaud Sea, and were primarily related to lower levels of planned future utilization. We determined the aggregate carrying value of these vessels ($77 million) was in excess of the estimated fair value ($19 million) and recorded a $58 million non-cash impairment. We determined the estimated fair value using a discounted cash flow method.

Impairment charges for 2019 and 2018 were recorded in our Corporate segment.

NOTE 17—DERIVATIVE FINANCIAL INSTRUMENTS

Foreign Currency Exchange Rate Derivatives—The notional value of our outstanding foreign exchange rate derivative contracts totaled $664 million as of December 31, 2019, with maturities extending through September 2023. These instruments consist of contracts to purchase or sell foreign-denominated currencies. As of December 31, 2019, the fair value of these contracts was in a net liability position totaling approximately $9 million. The fair value of outstanding derivative instruments is determined using observable financial market inputs, such as quoted market prices, and is classified as Level 2 in nature.

As of December 31, 2019, we deferred approximately $12 million of net losses in AOCI in connection with foreign exchange rate derivatives designated as cash flow hedges, and we expect to reclassify approximately $6 million of deferred losses out of AOCI by December 31, 2020, as hedged items are recognized in earnings.

Interest Rate Derivatives—On May 8, 2018, we entered into a U.S. dollar interest rate swap arrangement to mitigate exposure associated with cash flow variability on the Term Facility in an aggregate notional value of $1.94 billion. The swap arrangement was designated as a cash flow hedge at inception and through September 30, 2019. Accordingly, changes in the fair value of the swap arrangement were previously deferred in AOCI until the associated underlying exposure impacts our interest expense. As of December 31, 2019, the fair value of the swap arrangement was in a net liability position totaling approximately $67 million. The fair value of outstanding derivative instruments is determined using observable financial market inputs, such as quoted market prices, and is classified as Level 2 in nature. As of December 31, 2019, in light of the circumstances described in Note 2, Basis of Presentation and Significant Accounting Policies, we believe that our hedged forecasted transaction is no longer probable to occur, and as such, our hedge accounting has ceased and our previously deferred unrealized losses in AOCI of approximately $67 million have been reclassified into interest expense in our Statement of Operations for the year ended December 31, 2019.

141 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the total fair value of the derivatives by underlying risk and balance sheet classification:

December 31, 2019 December 31, 2018 Derivatives Derivatives Not Derivatives Derivatives not designated as Designated Designated designated as cash flow as cash flow as cash flow cash flow hedges hedges hedges hedges (In millions) Other current assets $ 3 $ 1 $ 3 $ 3 Other non-current assets 1 - - - Total derivatives asset $ 4 $ 1 $ 3 $ 3

Accrued liabilities $ 10 $ 68 $ 10 $ 3 Other non-current liabilities 2 - 32 - Total derivatives liability $ 12 $ 68 $ 42 $ 3

The following table presents the total value, by underlying risk, recognized in other comprehensive income and reclassified from AOCI to Cost of operations (foreign currency derivatives) and Interest expense, net (interest rate derivatives) in the Statements of Operations for the years ended December 31, 2019, 2018 and 2017:

Year ended December 31, 2019 2018 2017 (In millions) Amount of (loss) gain recognized in other comprehensive income (loss) Foreign exchange hedges $ (13) $ (14) $ 16 Interest rate hedges (44) (32) - Gain (loss) recognized on derivatives designated as cash flow hedges Foreign exchange hedges Revenue 8 - - Cost of operations 2 7 5 Interest rate hedges Interest expense 8 1 - Loss recognized on derivatives not designated as cash flow hedges Foreign exchange hedges Revenue (2) - - Cost of operations (1) (14) - Interest rate hedges 67 - - Interest expense

142 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18—INCOME TAXES

McDermott International, Inc. is a Panamanian corporation that earns all of its income outside of Panama and, as a result, is not subject to income tax in Panama. During 2018, subsequent to the Combination, McDermott became a tax resident of the United Kingdom. We operate in various taxing jurisdictions around the world. Each of these jurisdictions has a regime of taxation that varies, not only with respect to nominal rate, but also with respect to the basis on which these rates are applied. These variations, aligned with the changes in our mix of income or loss from these jurisdictions, may contribute to shifts, sometimes significant, in our effective tax rate.

The components of our provision (benefit) for income taxes were as follows:

Year Ended December 31, 2019 2018 2017 (In millions) U.S.: Current $ (16) $ - $ - Deferred 6 - - Other than U.S.: Current 62 82 62 Deferred 6 22 7 $ 58 $ 104 $ 69 Total provision for income taxes

The geographic sources of (loss) income before income taxes are as follows:

Year Ended December 31, 2019 2018 2017 (In millions) U.S. $ (2,031) $ (2,450) $ 123 Other than U.S. (795) (121) 126 $ (2,826) $ (2,571) $ 249 (Loss) income before provision for income taxes

The following is a reconciliation of the U.K. statutory federal tax rate for 2019 and 2018 and the Panamanian statutory federal tax rate for 2017 to the consolidated effective tax rates:

Year Ended December 31, 2019 2018 2017 Federal statutory rate 19% 19% 25% Goodwill impairment (11%) (14%) - Non-Panama operations - - 16% Change in valuation allowance for deferred tax assets - the U.S. (4%) (7%) (18%) Change in valuation allowance for deferred tax assets - Others (3%) (3%) 3% Audit settlements and reserves - - 1% Other (3%) 1% 1% Effective tax rate (2%) (4%) 28%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes, as well as operating loss and tax credit carryforwards.

143 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Significant components of deferred tax assets and liabilities were as follows:

December 31, 2019 2018 (In millions) Deferred tax assets: U.S. Federal net operating loss carryforward and other credits $ 454 $ 294 State net operating loss carryforward and other credits 196 248 Non-U.S. net operating losses 233 189 Accounts receivable basis difference 114 161 Partnership investments 75 153 Depreciation and amortization 115 64 Disallowed interest 108 51 Pension liability 49 49 Accrued liabilities for incentive compensation 20 32 Contract revenue and cost/long-term contracts 69 17 Insurance and legal reserves 20 17 Operating lease liability 66 - Other 20 32 Total deferred tax assets 1,539 1,307 Valuation allowance for deferred tax assets (1,472) (1,307) Deferred tax assets $ 67 $ -

Deferred tax liabilities: Investments in foreign subsidiaries 38 33 Depreciation and amortization 15 7 Pension liability 2 - Right of use assets 67 - Other 4 7 Total deferred tax liabilities 126 47

Net deferred tax liabilities $ (59) $ (47)

Deferred tax assets and liabilities are recorded net by tax jurisdiction in the accompanying Consolidated Balance Sheets. Deferred tax assets and liabilities were as follows:

December 31, 2019 2018 (In millions) Deferred tax assets $ - $ -

Deferred tax liabilities 59 47

Net deferred tax liabilities $ (59) $ (47)

144 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Valuation Allowance

At December 31, 2019, we had a VA of approximately $1.47 billion for DTAs that we expect cannot be realized through carrybacks, future reversals of existing taxable temporary differences or based on our estimate of future taxable income. After completion of the Combination in 2018, we incurred losses primarily resulting from goodwill impairments (See Note 9, Goodwill and Other Intangible Assets) and project charges (see Note 5, Revenue Recognition). As a result of such losses, we have a cumulative consolidated loss for the three years ended December 31, 2019. Accordingly, in assessing the positive and negative evidence related to the likelihood of utilizing the U.S. DTAs, and giving consideration to all such evidence, we believe we are precluded from using projections of future book income to support our DTAs because we believe the negative evidence outweighs the positive and have concluded that it is not more likely than not that we would utilize our DTAs as of December 31, 2019.

Changes in the VA for deferred tax assets were as follows:

Year Ended December 31, 2019 2018 2017 (In millions) Balance at beginning of period $ 1,307 $ 200 $ 335 Addition due to the Combination 39 836 - 2018 Federal benefit of state adjustment (1) (62) - - Charged to costs and expenses 206 250 (32) Charged to other accounts (18) 21 (103) $ 1,472 $ 1,307 $ 200 Balance at end of period

(1) The change in the 2018 Federal Benefit of State (FBOS) VA was included in the State tax, not in the VA. The change in the 2019 FBOS VA is included in the VA. Therefore, the 2018 FBOS VA was adjusted to reflect the adjusted beginning balance with FBOS.

Other

Our net operating loss DTAs, valuation allowance and expiration dates for Non-U.S., U.S. and State DTAs were as follows:

Net operating Valuation loss DTAs allowance Expiration (In millions) Non-U.S. $ 233 $ (233) 2020- Unlimited U.S. 386 (386) 2031- Unlimited State 192 (192) 2020- 2039

As of December 31, 2019, we did not provide deferred income taxes on temporary differences of our subsidiaries which are indefinitely reinvested. The amount of those temporary differences is approximately $210 million, the reversal of which would result in withholding tax of $18 to $20 million. We do not foresee having to reverse the outside basis differences in those entities as a result of the current bankruptcy filing. Our cash and debt structure allows us to access funds outside the U.S. and its foreign subsidiaries, which can be used to fund the U.S. and non-U.S. operations and service the debt. Deferred income taxes are provided as necessary with respect to basis differences that are not indefinitely reinvested.

We operate under a tax holiday in Malaysia, effective through December 31, 2020, which may be extended for an additional five years if we satisfy certain requirements. The Malaysian tax holiday reduced our foreign income tax expense by $17.4 million and $17.5 million in 2019 and 2018, respectively. The benefit of the tax holiday on net income per share (diluted) was $0.10 for 2019.

We conduct business globally and, as a result, we or our various affiliated entities file income tax returns in a number of jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as Malaysia, Australia, Indonesia, Singapore, Saudi Arabia, Kuwait, India, Qatar, Brunei, the U.K., Canada and the United States. With few exceptions, we are no longer subject to tax examinations for years prior to 2011.

145 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of unrecognized tax benefits is as follows:

Year Ended December 31, 2019 2018 2017 (In millions) Balance at beginning of period $ 58 $ 39 $ 41 Changes due to the Combination - 14 - Changes due to exchange rate fluctuations - (1) 1 Increases based on tax positions taken in the current year 4 2 1 Increases based on tax positions taken in prior years 5 9 4 Decreases based on tax positions taken in prior years (9) (5) (2) Decreases due to settlements - - (6) Decreases due to lapse of applicable statute of limitation (2) - - $ 56 $ 58 $ 39 Balance at end of period

Approximately $52 million of the balance of unrecognized tax benefits at December 31, 2019 would reduce our effective tax rate if recognized. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. At December 31, 2019, 2018 and 2017, we had recorded liabilities of approximately $12 million, $20 million and $24 million, respectively, for the payment of tax-related interest and penalties.

NOTE 19—EQUITY-BASED COMPENSATION

General—In May 2019, our stockholders approved the 2019 McDermott International, Inc. Long-Term Incentive Plan (the “2019 LTIP”). Under the 2019 LTIP we can award stock-based compensation to members of our Board of Directors, employees and consultants in a number of forms, including incentive and non-qualified stock options, restricted stock, restricted stock units (“RSUs”), and performance shares or units. As of December 31, 2019, there were 3.2 million shares remaining available for future awards under these equity-based compensation plans.

Our plans are administered by the Compensation Committee of our Board of Directors, which selects those employees eligible to receive awards and determines the number of shares or stock options subject to each award, as well as the terms, conditions, performance measures and other provisions of the award.

Combination―As of the Combination Date, unvested and unexercised stock-settled equity-based awards (which included approximately 2.1 million RSUs and stock options and stock appreciation rights with respect to 0.1 million shares) relating to shares of CB&I’s common stock were cancelled and converted into comparable McDermott stock-settled awards with generally the same terms and conditions as those prior to the Combination Date. The restricted stock units generally vest over a period ranging from three to four years from the original grant date.

Equity-Based Compensation Expense― Compensation expense is generally recognized on a straight-line basis over the requisite service periods of the awards we expect to ultimately vest. We recognize forfeitures as they occur, rather than estimating expected forfeitures.

Equity instruments, such as RSUs, are measured at fair value on the grant date. Equity awards expected to be settled in cash are designated as liability awards and are valued at the market price of the underlying stock on the date of payment. Compensation cost for the liability awards is re-measured at the end of each reporting period and is recognized as an expense over the applicable service period.

146 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Total compensation expense, primarily recognized within SG&A, was as follows:

2019 2018 (1) 2017 (In millions) RSUs $ 20 $ 44 $ 15 Liability awards 1 8 8 $ 21 $ 52 $ 23 Total

(1) Compensation expense in 2018 included $26 million, recorded within Restructuring costs in our Consolidated Statements of Operations, associated with accelerated vesting for employees who were terminated as a result of the Combination.

The components of the total gross unrecognized estimated compensation expense for equity awards and their expected remaining weighted-average periods for expense recognition are as follows:

Amount Weighted-Average (In millions) Period(years) (1) $ 24 1.7 Restricted stock and restricted stock units

(1) Excludes liability awards.

Stock Options―There were no stock options granted in 2019, 2018 or 2017. CB&I’s stock options that were cancelled and converted in connection with the Combination were not material.

There were no stock options exercised during 2019 and 2017, and stock options exercised during 2018 were not material.

As of December 31, 2019, we had outstanding stock options to purchase 0.5 million shares with a weighted-average exercise price per share of approximately $37. All outstanding stock options vested prior to December 31, 2019.

Had all option holders exercised their options on December 31, 2019, the aggregate intrinsic value of the options would have been negative, as their exercise price was higher than the closing price of our common stock on December 31, 2019.

Restricted Stock Units (“RSUs”)― RSUs and changes during 2019 were as follows (share data in millions):

Weighted-Average Grant Number of Shares Date Fair Value Outstanding as of December 31, 2018 3 $ 19.39 Granted 2 8.67 Vested (2) 11.52 3 12.32 Outstanding as of December 31, 2019

There were no tax benefits realized related to RSUs and RSAs that lapsed or vested during 2019, 2018 and 2017.

Liability awards―Approximately 2 million, 0.4 million and 0.2 million shares awarded in 2019, 2018 and 2017, respectively, were classified as liability awards. As of December 31, 2019, we had approximately 3 million shares classified as liability awards outstanding.

As of December 31, 2019, the unrecognized compensation cost related to liability awards was $1.3 million, calculated based on the December 31, 2019 fair value of these awards, and is expected to be recognized over a weighted average period of two years.

Effects of the Chapter 11 Cases on the Common Stock — The provisions of the RSA and the Plan of Reorganization contemplate that the obligations to issue securities under our equity compensation plans will be cancelled and discharged in connection with the Chapter 11 Cases.

147 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20— STOCKHOLDERS’ EQUITY

Shares Outstanding and Treasury Shares―The changes in the number of shares outstanding and treasury shares held by us are as follows (in millions):

Year ended December 31, 2019 2018 Shares outstanding Beginning balance 181 95 Common stock issued (1) 13 2 Shares issued in the Combination (Note 3, Business Combination) (2) - 85 Purchase of common stock (1) (1) Ending balance 193 181

Shares held as Treasury shares Beginning balance 3 3 Purchase of common stock 1 1 Retirement of common stock (1) (1) Ending balance 3 3

196 183 Ordinary shares issued at the end of the period

(1) In December 2019, in connection with the Superpriority Credit Agreement, discussed in Note 13, Debt, we issued approximately 11 million shares of McDermott common stock, 0.09 million of Series B Warrants (that will entitle each holder to purchase one share of common stock of McDermott, par value $1.00 per share, at a purchase price of $0.01 per share) (the “Series B Warrants” and, together with the Series A Warrants, the “Warrants”) and 0.56 million shares of Series A Preferred Stock with par value of 0.001 per share, to certain Superpriority Credit Agreement lenders. (2) As discussed in Note 3, Business Combination, in May 2018, we issued 84.5 million shares of McDermott common stock to the former CB&I shareholders. Additionally, effective as of the Combination Date, unvested and unexercised stock-settled equity-based awards (which included 2.1 million of CB&I restricted stock units and stock options to purchase 0.1 million shares of CB&I’s common stock) were canceled and converted into comparable McDermott stock-settled awards with generally the same terms and conditions as those prior to the Combination Date. The restricted stock units generally vest over a period ranging from three to four years from the original grant date.

Accumulated Other Comprehensive (Loss) Income―The components of AOCI included in stockholders’ equity are as follows:

December 31, 2019 2018 (In millions) Foreign currency translation adjustments ("CTA") $ (97) $ (73) Net unrealized loss on derivative financial instruments (12) (40) Defined benefit pension and other postretirement plans 6 6 Accumulated other comprehensive loss $ (103) $ (107)

148 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the components of AOCI and the amounts that were reclassified during the periods indicated:

Defined Net unrealized benefit Foreign loss on pension and Currency derivative other Translation financial postretirement adjustments instruments (1) plans TOTAL (In millions) January 1, 2018 $ (49) $ (2) $ - $ (51) Other comprehensive (loss) income before reclassification (24) (46) 6 (64)

Amounts reclassified from AOCI (2) - 8 - 8 Net current period other comprehensive income (24) (38) 6 (56) December 31, 2018 $ (73) $ (40) $ 6 $ (107) Other comprehensive (loss) income before reclassification (24) (57) - (81)

Amounts reclassified from AOCI (2) - 85 - 85 Net current period other comprehensive (loss) income (24) 28 - 4 December 31, 2019 $ (97) $ (12) $ 6 $ (103)

(1) Refer to Note 17, Derivative Financial Instruments, for additional details. (2) Amounts are net of tax, which was not material in 2019 and 2018.

Noncontrolling Interest―In 2002, P.T. Sarana Interfab Mandiri (“PTSIM”) acquired a 25% participating interest in our subsidiary, PT McDermott Indonesia (“PTMI”). After two years, PTSIM had the option to sell its interest to us for $5 million plus PTSIM’s share of PTMI’s undistributed earnings to the date of such sale. In January 2019, McDermott and PTSIM entered into framework agreement, restructuring the PTMI shareholders agreement, whereby PTSIM waived its put option right and exchanged its participating interest in PTMI for a non-participating interest, in exchange for a payment of approximately $29 million. In 2019, we paid the first two installments, totaling approximately $15 million, and had a remaining liability of approximately $14 million as of December 31, 2019, scheduled to be payable in early 2020.

NOTE 21—REDEEMABLE PREFERRED STOCK

149 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 22—EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per common share.

Year ended December 31, 2019 (1) 2018 (1) 2017 (2) (In millions, except per share amounts) Net (loss) income attributable to McDermott $ (2,909) $ (2,687) $ 179 Dividends on redeemable preferred stock (44) (3) - Accretion of redeemable preferred stock (16) (1) - Net (loss) income attributable to common stockholders $ (2,969) $ (2,691) $ 179

Weighted average common stock (basic) 182 150 91 Effect of dilutive securities: Restricted stock and tangible equity units - - 4 Potential dilutive common stock 182 150 95

Net (loss) income per share attributable to common stockholders Basic: $ (16.31) $ (17.94) $ 1.97 $ (16.31) $ (17.94) $ 1.88 Diluted:

(1) The effects of restricted stock, warrants and redeemable preferred stock were not included in the calculation of diluted earnings per share for 2019 and 2018 due to the net losses for each such year.

(2) Approximately 0.5 million shares of underlying outstanding stock-based awards in 2017 were excluded from the computation of diluted earnings per share during such year because the exercise price of those awards was greater than the average market price of our common stock, and the inclusion of such shares would have been antidilutive during such year.

150 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 23—COMMITMENTS AND CONTINGENCIES

Investigations and Litigation

General—Due to the nature of our business, we and our affiliates are, from time to time, involved in litigation or subject to disputes, governmental investigations or claims related to our business activities, including, among other things: • performance or warranty-related matters under our customer and supplier contracts and other business arrangements; and • workers’ compensation claims, Jones Act claims, occupational hazard claims, premises liability claims and other claims.

Based upon our prior experience, we do not expect that any of these other litigation proceedings, disputes, investigations and claims will have a material adverse effect on our consolidated financial condition, results of operations or cash flows; however, because of the inherent uncertainty of litigation and other dispute resolution proceedings and, in some cases, the availability and amount of potentially applicable insurance, we can provide no assurance the resolution of any particular claim or proceeding to which we are a party will not have a material effect on our consolidated financial condition, results of operations or cash flows for the fiscal period in which that resolution occurs.

Project Arbitration Matters—We are in arbitration (governed by the arbitration rules of the International Chamber of Commerce) entitled Refineria de Cartagena S.A. v. Chicago Bridge & Iron Company N.V., et al., which was commenced on March 8, 2016 in connection with a large, cost reimbursable refinery construction project in Colombia completed by CB&I in 2015. Refineria de Cartagena, the customer on the project, is alleging that we are responsible for certain cost overruns, delays and consequential damages on the project. The customer is claiming total damages in excess of $4.5 billion. We have asserted a counterclaim against the customer for approximately $250 million. The parties have submitted final witness statements, expert reports and other filings. Hearings are expected to commence in the fourth quarter of 2020 and, after a multi-month hiatus, conclude in the second quarter of 2021. The venue for the arbitration hearings is expected to be in Washington, D.C.. We do not believe a risk of material loss is probable related to this matter, and accordingly, our reserves for this matter were not significant as of December 31, 2019. While it is possible that a loss may be incurred, we are unable to estimate the range of potential loss, if any.

In addition, we are in arbitration (governed by the arbitration rules of the United Nations Commission on International Trade Law) entitled CBI Constructors Pty & Kentz Pty Ltd and Chevron Australia Pty Ltd., which was commenced on or about May 17, 2017, with the customer for one of CB&I’s previously completed consolidated joint venture projects, regarding differing interpretations of the contract related to reimbursable billings. The matter has been bifurcated, with hearings on entitlement held in November 2018 and hearings on the amount of damages presently anticipated to begin in August, 2020, subject to the lifting of the automatic stay pursuant to section 362(a) of the Bankruptcy Code. In December 2018, the tribunal issued an interim award on entitlement, finding that the joint venture was not overpaid for its craft labor but that certain overpayments were made to the joint venture for its staff. As a result, we and our joint venture counterparty are asserting claims against the customer of approximately $103 million for certain unpaid invoices and other set-offs, and the customer is asserting that it has overpaid the joint venture by $78.6 million. Accordingly, as of December 31, 2019, we have established a reserve of approximately $55 million in the acquired balance sheet from the Combination, which equates to $85 million at the joint venture level.

Asbestos Litigation—We are a defendant in numerous lawsuits wherein plaintiffs allege exposure to asbestos at various locations. We review and defend each case on its own merits and make accruals based on the probability of loss and best estimates of potential loss. We do not believe any unresolved asserted claim will have a material adverse effect on our future results of operations, financial position or cash flow. With respect to unasserted asbestos claims, we cannot identify a population of potential claimants with sufficient certainty to determine the probability of loss or estimate future losses. We do not believe a risk of material loss is probable related to these matters, and, accordingly, our reserves were not significant as of December 31, 2019. While we continue to pursue recovery for recognized and unrecognized contingent losses through insurance, indemnification arrangements and other sources, we are unable to quantify the amount that we may recover because of the variability in coverage amounts, limitations and deductibles or the viability of carriers, with respect to our insurance policies for the years in question.

Mercury Litigation— Certain of our subsidiaries are co-defendants in a group of consolidated “toxic exposure” claims, involving 54 plaintiffs who allege they were exposed to mercury while working in a chlorine manufacturing facility located in Muscle Shoals, Alabama. The matter was commenced on December 14, 2011 and is captioned Aretha Abernathy, et al. v. Occidental Chemical Corp., et al., CV 11-900266, Circuit Court of Colbert County, Alabama. The plaintiffs consist of former employees of subsidiaries of CB&I, as well as other defendants.

151 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On October 18, 2019, prior to the start of the trial of the claims of the first four plaintiffs, the parties reached a settlement resolving all claims of all 54 plaintiffs and several potential plaintiffs. The settlement amount will be paid directly by our insurance carriers.

As a result of the settlement, under the terms of certain insurance policies, additional deductible amounts may be due. We do not believe a risk of material loss is probable for additional deductible amounts due upon resolution of these matters, and accordingly, our reserves for this matter were not significant as of December 31, 2019.

Labor Litigation— A former employee of one of our subsidiaries commenced a class action lawsuit under the Fair Labor Standards ACT (“FLSA”) entitled Cantrell v. Lutech Resources, Inc., (S.D. Texas 2017) Case No. 4:17-CV-2679 on or about September 5, 2017, alleging that he and his fellow class members were not paid one and one half times their normal hourly wage rates for hours worked that exceeded 40 hours in a work week. Our subsidiary has yet to answer the allegations in the complaint, as agreed by the parties, in order to allow mediation to take place. The first mediation session commenced in October 2018, and a settlement has been reached between the parties. We do not believe a risk of material loss is probable related to this matter, and, accordingly, our reserves for this matter were not significant as of December 31, 2019.

Pre-Combination CB&I Securities Litigation—On March 2, 2017, a complaint was filed in the United States District Court for the Southern District of New York seeking class action status on behalf of purchasers of CB&I common stock and alleging damages on their behalf arising from alleged false and misleading statements made during the class period from October 30, 2013 to June 23, 2015. The case is captioned: In re Chicago Bridge & Iron Company N.V. Securities Litigation, No. 1:17- cv-01580-LGS (the “Securities Litigation”). The defendants in the case are: CB&I; a former chief executive officer of CB&I; a former chief financial officer of CB&I; and a former controller and chief accounting officer of CB&I. On June 14, 2017, the court named ALSAR Partnership Ltd. as lead plaintiff. On August 14, 2017, a consolidated amended complaint was filed alleging violations of Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 thereunder, arising out of alleged misrepresentations about CB&I’s accounting for the acquisition of The Shaw Group, CB&I’s accounting with respect to the two nuclear projects being constructed by The Shaw Group, and CB&I’s financial reporting and public statements with respect to those two projects. On May 24, 2018, the court denied defendants’ motion to dismiss. The parties have completed fact discovery and are currently engaged in expert discovery. On February 4, 2019, lead plaintiff ALSAR Partnership Ltd. and additional plaintiffs Iron Workers Local 40, 361, & 417 – Union Security Funds and Iron Workers Local 580 – Joint Funds moved for class certification and appointment as class representatives. On October 16, 2019, the court-appointed special master issued a report and recommendation regarding class certification and appointment of class representatives and class counsel, recommending that the court grant the plaintiffs’ motion. We are not able at this time to determine the likelihood of loss, if any, arising from this matter and, accordingly, no amounts have been accrued as of December 31, 2019. We believe the claims are without merit and intend to defend against them vigorously.

On October 26, 2018, two actions were filed by individual plaintiffs based on allegations similar to those alleged in the Securities Litigation. On February 25, 2019, a third action was filed by an individual plaintiff based on similar allegations. All three actions were filed in the United States District Court for the Southern District of New York and are captioned Gotham Diversified Neutral Master Fund, LP, et al. v. Chicago Bridge & Iron Company N.V. et al., Case No. 1:18-cv-09927 (the “Gotham Action”); Appaloosa Investment L.P., et al., v. Chicago Bridge & Iron Company N.V., et al., Case No. 1:18-cv-09928 (the “Appaloosa Action”) and CB Litigation Recovery I, LLC v. Chicago Bridge & Iron Company N.V., et al., Case No. 1:19-cv-01750 (the “CB Litigation Recovery Action”). Besides CB&I, the other defendants in all three cases are the same individual defendants as in the Securities Litigation described above. Plaintiffs assert causes of action based on alleged violations of Sections 10(b), 18 and 20(a) of the Exchange Act and Rule 10b-5 thereunder, along with common law causes of action. On January 25, 2019, the defendants filed in the Gotham and Appaloosa Actions partial motions to dismiss the causes of actions asserted under Section 18 of the Exchange Act and the common law causes of action. On March 25, 2019, the court entered a stipulation and order staying the CB Litigation Recovery Action pending a ruling on the partial motions to dismiss in the Gotham and Appaloosa Actions and making the decision on the partial motions to dismiss the Gotham and Appaloosa Actions applicable to the CB Litigation Recovery Action. On August 23, 2019, the court issued an order on the defendants’ motions to dismiss the Gotham and Appaloosa Actions, dismissing the causes of actions asserted under Section 18 of the Exchange Act but denying the motion to dismiss the common law causes of action. On October 16, 2019, the court issued an order consolidating the Gotham, Appaloosa and CB Litigation Recovery Actions (the “Consolidated Action”) and staying the Consolidated Action pending the court’s determination of the motion for class certification in the Securities Litigation. We are not able at this time to determine the likelihood of loss, if any, arising from these matters and, accordingly, no amounts have been accrued as of December 31, 2019. We believe the claims are without merit and intend to defend against them vigorously.

152 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On or about November 2, 2017, a complaint was filed in the District Court of Montgomery County, Texas by Daniel Cohen and associated individuals and corporations, alleging causes of action under both common and state law for alleged false and misleading statements related to CB&I’s acquisition of The Shaw Group in 2013, particularly with regard to two nuclear projects being constructed by Shaw in South Carolina and Georgia. The case is captioned Daniel Cohen, et al. v. Chicago Bridge & Iron Company, N.V., et al., No. 17-10-12820. The other defendants are the same individual defendants as in the Securities Litigation described above. The plaintiffs alleged that the individual defendants made, or had authority over the content and method of communicating information to the public, including the alleged misstatements and omissions detailed in the complaint, resulting in a financial loss on shares of stock purchased by the plaintiffs. Discovery in this matter is proceeding. We are not able at this time to determine the likelihood of loss, if any, arising from this matter and, accordingly, no amounts have been accrued as of December 31, 2019. We believe the claims are without merit and intend to defend against them vigorously.

Post-Combination McDermott Securities Litigation— On November 15, 2018, a complaint was filed in the United States District Court for the Southern District of Texas seeking class action status on behalf of purchasers of McDermott common stock and alleging damages on their behalf arising from allegedly false and misleading statements made during the class period from January 24, 2018 to October 30, 2018. The case is captioned: Edwards v. McDermott International, Inc., et al., No. 4:18-cv- 04330. The defendants in the case are: McDermott; David Dickson, our president and chief executive officer; and Stuart Spence, our former chief financial officer. The plaintiff has alleged that the defendants made material misrepresentations and omissions about the integration of the CB&I business, certain CB&I projects and their fair values, and our business, prospects and operations. The plaintiff asserts claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 thereunder. On January 14, 2019, a related action was filed in the United States District Court for the Southern District of Texas seeking class action status on behalf of all shareholders of McDermott common stock as of April 4, 2018 who had the right to vote on the Combination, captioned: The Public Employees Retirement System of Mississippi v. McDermott International, Inc., et al., No. 4:19-cv-00135. The plaintiff has alleged the defendants (which include our chief executive officer and former chief financial officer) made material misrepresentations and omissions in the proxy statement we used in connection with the Combination. The plaintiff asserted claims under Section 14(a) and 20(a) of the Exchange Act. We filed a motion to consolidate the two actions, and the court granted that motion on February 22, 2019. The court appointed lead plaintiffs for both sets of claims on June 5, 2019. The plaintiffs subsequently filed amended pleadings to, among other things, add Chicago Bridge & Iron N.V. (“CB&I”) and CB&I’s former chief executive officer as additional defendants, and, on January 30, 2020, we filed motions to dismiss all of the claims. We are not able at this time to determine the likelihood of loss, if any, arising from these matters and, accordingly, no amounts have been accrued as of December 31, 2019. We believe the claims are without merit and we intend to defend against them vigorously

SEC and Federal Grand jury Investigations—By letter dated July 26, 2019, together with accompanying subpoenas, the U.S. Securities and Exchange Commission (the “SEC”) notified us that it is conducting an investigation related to disclosures we made concerning the reporting of projected losses associated with the Cameron LNG project. We have been and intend to continue cooperating with the SEC in this investigation, including by producing documents requested by the SEC. Also, by letter dated February 25, 2020, together with an accompanying subpoena, the office of the United States Attorney for the Southern District of Texas within the U.S. Department of Justice notified us that a Federal Grand Jury is conducting a criminal investigation and requested various documents, including cost forecasts and other financial- related information, related to the Cameron LNG project. We intend to cooperate with the United States Attorney’s office and the Federal Grand Jury in this investigation, including by producing the documents that have been requested.

Saudi Arabia Customs Audit— During the fourth quarter of 2019, McDermott Arabia Co. Ltd received a customs audit report from the General Directorate of Customs Audit department in Saudi Arabia, stating that additional custom duties are applicable on structures and platforms imported during the period from 2014 to 2019. The audit report claims that customs on imported structures and platforms of $64.7 million are owed to the Saudi Arabia Customs Authority. We are currently assessing the customs audit report and are required to post a bond for the assessed amount; however, we do not believe a risk of material loss is probable related to this matter and, accordingly, no amounts have been accrued as of December 31, 2019. We believe the audit report is incorrect, and we intend to challenge the assessment vigorously.

Environmental Matters

We have been identified as a potentially responsible party at various cleanup sites under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (“CERCLA”). CERCLA and other environmental laws can impose liability for the entire cost of cleanup on any of the potentially responsible parties, regardless of fault or the lawfulness of the original conduct.

153 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

We believe we are in compliance, in all material respects, with applicable environmental laws and regulations and maintain insurance coverage to mitigate our exposure to environmental liabilities. We do not anticipate we will incur material capital expenditures for environmental matters or for the investigation or remediation of environmental conditions during 2020 and 2021. As of December 31, 2019, we had no environmental reserve recorded.

Asset Retirement Obligations (“ARO”)

In March 2019, pursuant to a Memorandum of Understanding signed between Saudi Aramco and McDermott in 2017, we signed an agreement to enter into a long-term land lease agreement with Saudi Aramco, to establish a fabrication facility located within the new King Salman International Complex for Maritime Industries being developed by Saudi Aramco in Ras Al-Khair, Saudi Arabia. Construction activities are now in progress and the new facility is expected to be operational by 2022. In connection with the contemplated lease, the closure of our current fabrication facility in Dubai, United Arab Emirates, is expected to occur in 2030. ARO recorded as of December 31, 2019 was equal to the present value of the estimated costs to decommission the current fabrication facility and was not material.

Contracts Containing Liquidated Damages Provisions

Some of our contracts contain provisions that require us to pay liquidated damages if we are responsible for the failure to meet specified contractual milestone dates and the applicable customer asserts a claim under those provisions. Those contracts define the conditions under which our customers may make claims against us for liquidated damages. In many cases in which we have historically had potential exposure for liquidated damages, such damages ultimately were not asserted by our customers. As of December 31, 2019, we determined that we had approximately $171 million of potential liquidated damages exposure, based on performance under contracts to date, and included $24 million as a reduction in transaction prices related to such exposure. We believe we will be successful in obtaining schedule extensions or other customer-agreed changes that should resolve the potential for the liquidated damages where we have not made a reduction in transaction prices. However, we may not achieve relief on some or all of the issues involved and, as a result, could be subject to liquidated damages being imposed on us in the future.

NOTE 24—SEGMENT REPORTING

We disclose the results of each of our reportable segments in accordance with ASC 280, Segment Reporting. Each of the reportable segments is separately managed by a senior executive who is a member of our Executive Committee (“EXCOM”). Our EXCOM is led by our Chief Executive Officer, who is the chief operating decision maker (“CODM”). Discrete financial information is available for each of the segments, and the EXCOM uses the operating results of each of the reportable segments for performance evaluation and resource allocation.

Upon completion of the Combination, during the second quarter of 2018, we reorganized our operations around five operating segments. This reorganization is intended to better serve our global clients, leverage our workforce, help streamline operations, and provide enhanced growth opportunities. Our five operating groups are: NCSA; EARC; MENA; APAC; and Technology. The segment information for the prior periods presented has been recast to conform to the current presentation. We also report certain corporate and other non-operating activities under the heading “Corporate and Other.” Corporate and Other primarily reflects corporate expenses, certain centrally managed initiatives (such as restructuring charges), impairments, year-end mark-to-market pension actuarial gains and losses, costs not attributable to a particular reportable segment and unallocated direct operating expenses associated with the underutilization of vessels, fabrication facilities and engineering resources.

Intersegment sales are recorded at prices we generally establish by reference to similar transactions with unaffiliated customers and were not material during 2019, 2018 and 2017 and are eliminated upon consolidation.

154 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Operating Information by Segment

Year ended December 31, 2019 2018 2017 (In millions) Revenues: NCSA $ 4,627 $ 3,928 $ 246 EARC 761 271 19 MENA 1,790 1,704 2,120 APAC 666 411 600 Technology 587 391 - Total revenues $ 8,431 $ 6,705 $ 2,985

Operating (loss) income: Segment operating (loss) income: NCSA $ (1,546) $ (1,537) $ (4) EARC (319) (74) (13) MENA 181 328 451 APAC 1 56 93 Technology 156 (519) - Total segment operating (loss) income (1,527) (1,746) 527 Corporate (1) (555) (510) (220) Total operating (loss) income $ (2,082) $ (2,256) $ 307

Goodwill impairment (2): NCSA $ 1,111 $ 1,484 $ - EARC 319 40 - APAC - 52 - Technology - 592 - Total goodwill impairment $ 1,430 $ 2,168 $ -

Depreciation and amortization: NCSA $ 65 $ 59 $ 26 EARC 14 13 - MENA 50 51 31 APAC 15 19 36 Technology 74 92 - Corporate 49 45 8 Total depreciation and amortization $ 267 $ 279 $ 101

Capital expenditures (3): NCSA $ 7 $ 5 $ 23 EARC 2 - - MENA 18 19 31 APAC 8 12 9 Technology 2 - - Corporate (4) 55 50 56 Total Capital expenditures $ 92 $ 86 $ 119

Income (loss) from investments in unconsolidated affiliates: NCSA $ 1 $ - $ (1) EARC (5) (5) (4) MENA 12 5 - APAC 4 (8) (7) Technology 27 27 - Corporate (5) (6) - Total income (loss) from investments in unconsolidated affiliates: $ 34 $ 13 $ (12)

155 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2019 2018 (In millions) Segment assets: NCSA $ 1,826 $ 3,257 EARC 554 1,169 MENA 1,317 1,472 APAC 1,518 1,147 Technology 2,590 2,752 Corporate (5) 932 (357) Total assets $ 8,737 $ 9,440

Investments in unconsolidated affiliates (6): EARC $ 1 $ 2 MENA 70 60 APAC 3 - Technology 381 385 Corporate - 5 $ 455 $ 452 Total investments in unconsolidated affiliates

(1) Corporate operating results include: 2019 • $57 million in transaction costs (see Note 12, Restructuring and Integrations Costs and Transaction Costs); • $114 million in restructuring and integration costs (see Note 12, Restructuring and Integrations Costs and Transaction Costs); and • $18 million of impairment charges associated with our marine vessels (see Note 16, Fair Value Measurements). 2018 • $48 million in transaction costs associated with the Combination; • $134 million in restructuring and integration costs; • $58 million of vessel related impairment charges; and • $25 million of expense associated with the need to make alternate arrangements for a third-party vessel charter, because the previously designated vessel was withdrawn from the market. 2017 • $4 million gain on sale of assets; and • $9 million in transaction costs associated with the Combination (see Note 3, Business Combination). (2) Represents impairment of goodwill associated with our NCSA and EARC reporting units in 2019 and our NCSA, EARC, APAC and Technology reporting units in 2018. See Note 9, Goodwill and Other Intangible Assets, for further discussion. The goodwill impairment values are included within the applicable operating group’s Operating loss. (3) Capital expenditures reported represent cash purchases. At December 31, 2019, 2018 and 2017, we had approximately $160 million, $26 million and $8 million, respectively, of accrued and unpaid capital expenditures reported in PP&E and accrued liabilities. (4) Corporate capital expenditures in 2019 and 2018 include upgrades to the Amazon. Corporate capital expenditures in 2017 include the purchase of the Amazon, a pipelay and construction vessel described in Note 14, Lease Obligations. Following the purchase, we sold this vessel to an unrelated third party and simultaneously entered into an 11-year bareboat charter agreement. (5) Corporate assets at December 31, 2018 include negative cash balances associated with our international cash pooling program, which ceased in the fourth quarter of 2019. (6) The Consolidated Balance Sheets as of December 31, 2019 and 2018 include approximately $48 million and $15 million of accounts receivable, respectively, from our unconsolidated affiliates.

156 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Significant Customer Information

Our significant customers by segments during 2019, 2018 and 2017 were as follows:

% of Consolidated Reportable Revenues Segment Year Ended December 31, 2019: Saudi Aramco 11% MENA Year Ended December 31, 2018: Saudi Aramco 19% MENA Cameron LNG 10% NCSA Year Ended December 31, 2017: Saudi Aramco 63% MENA Inpex Operations Australia Pty Ltd 11% APAC

Operating Information by Geography

Year Ended December 31, 2019 2018 2017 (In millions) Geographic revenues: United States $ 4,431 $ 3,695 $ 102 Saudi Arabia 999 1,304 1,965 Qatar 467 173 149 India 373 144 201 Denmark 332 118 - Russia 303 96 - United Arab Emirates 271 130 5 Mexico 216 191 143 Australia 168 253 344 Other countries 871 601 76 $ 8,431 $ 6,705 $ 2,985 Total revenue

157 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2019 2018 (In millions) Property, plant and equipment, net (1): India $ 798 $ 429 United States 324 797 Netherlands 222 - Sri Lanka 209 - Mexico 180 192 Qatar 160 2 Indonesia 47 246 Other countries 189 401 $ 2,129 $ 2,067 Total property, plant and equipment, net

(1) Our marine vessels are included in the area in which they were located as of the reporting date.

NOTE 25—QUARTERLY FINANCIAL DATA (UNAUDITED)

The following tables set forth selected unaudited quarterly financial information for the quarterly periods in 2019 and 2018:

2019 March 31 June 30 September 30 December 31 (In millions, except per share data amounts) Revenues $ 2,211 $ 2,137 $ 2,121 1,962 Project intangibles and inventory related amortization (1) 10 10 7 7 Gross profit 183 178 (59) (115) Other intangibles amortization (2) 22 22 21 22 Transaction costs (3) 4 11 14 28 Restructuring and integration costs (4) 69 20 14 11 Goodwill impairment (5) - - 1,370 60 Intangible Asset impairments (6) - - 143 19 Other asset impairments (7) - - 18 - Loss on asset disposals - 102 - 2 Net loss (8) (57) (114) (1,864) (849) Net loss attributable to McDermott (56) (132) (1,873) (848) Dividends on redeemable preferred stock (9) (10) (10) (10) (14) Accretion of redeemable preferred stock (9) (4) (4) (4) (4) Net loss attributable to common stockholders (70) (146) (1,887) (866)

Income (loss) per share Basic $ (0.39) $ (0.80) $ (10.37) (4.69) Diluted $ (0.39) $ (0.80) $ (10.37) (4.69)

158 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2018 (10) March 31 June 30 September 30 December 31 (In millions, except per share data amounts) Revenues $ 608 $ 1,735 $ 2,289 $ 2,073 Project intangibles and inventory related amortization (1) $ - $ 12 $ 30 41 Gross profit 130 237 273 (122) Other intangibles amortization (2) - 10 25 27 Transaction costs (3) 3 37 5 3 Restructuring and integration costs (4) 12 63 31 28 Goodwill impairment (5) - - - 2,168 Other asset impairments (7) - - - 58 Net income (loss) 34 45 - (2,757) Net income (loss) attributable to McDermott 35 47 2 (2,771) Dividends on redeemable preferred stock (9) - - - (3) Accretion of redeemable preferred stock (9) - - - (1) Net income (loss) attributable to common stockholders 35 47 2 (2,775)

Income (loss) per share Basic $ 0.12 $ 0.33 $ 0.01 $ (15.33) Diluted $ 0.12 $ 0.33 $ 0.01 $ (15.33)

(1) Represents amortization of fair value adjustments for RPOs acquired in the Combination and normalized profit margin fair value associated with acquired long-term contracts that were deemed to be lower than market value as of the Combination Date. Also included is amortization associated with fair value adjustments to inventory balances acquired in the Combination. (2) Represents amortization of other intangible assets acquired in the Combination. See Note 9, Goodwill and Other Intangible Assets, for further discussion. (3) 2019—primarily relates to legal and other professional fees associated with the sale processes for the pipe fabrication business and the Lummus Technology business and the now-terminated effort to sell our industrial storage tanks business, as well as professional and other fees associated with the Chapter 11 Cases. 2018—primarily relates to professional service fees (including audit, legal and advisory services) associated with the Combination. See Note 3, Business Combination, for further discussion. (4) Primarily represents costs related to achieve our CPI. See Note 12, Restructuring and Integration Costs, for further discussion. (5) 2019—represents impairment of goodwill associated with our NCSA and EARC reporting units, resulting from our interim and annual impairment assessment. See Note 9, Goodwill and Other Intangible Assets, for further discussion. 2018—represents impairment of goodwill associated with our NCSA, EARC, APAC and Technology reporting units, resulting from our annual impairment assessment. (6) Represents impairment of intangible assets, primarily in our NCSA segment. See Note 9, Goodwill and Other Intangible Assets, for further discussion. (7) Represents charges associated with the impairment of vessels and other marine equipment, due to changes in their level of planned utilization. See Note 16, Fair Value Measurements, for further discussion. (8) Net loss for the quarter ended December 31, 2019 included the impact on interest expense of: (1) $316 million of DIC amortization, primarily associated with the accelerated DIC amortization due to our non-compliance with certain covenants and other obligations contained in our financing arrangements, discussed in Note 13, Debt; (2) $67 million of expense associated with our interest rate swap arrangement, reclassified from AOCI into interest expense, discussed in Note 17, Derivative Financial Instruments; and (3) a $32 million of gain associated with the valuation of the Superpriority Credit Agreement embedded derivative, discussed in Note 13, Debt. (9) Represents dividends paid and accrued on the shares of 12% Redeemable Preferred Stock and accretion of the stock over the seven years from November 29, 2018 through the expected redemption date of November 29, 2025, using the effective interest method. See Note 21, Redeemable Preferred Stock, for further discussion. (10) Results in the second, third and fourth quarters of 2018 reflect impacts of the Combination from the Combination Date.

159 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

Item 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) adopted by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Our disclosure controls and procedures were developed through a process in which our management applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding the control objectives. You should note that the design of any system of disclosure controls and procedures is based in part upon various assumptions about the likelihood of future events, and we cannot assure you that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Based on the evaluation referred to above, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures are effective as of December 31, 2019 to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and such information is accumulated and communicated to management, including our principal executive and principal financial officers or persons performing similar functions, as appropriate to allow timely decisions regarding disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d- 15(f) under the Securities Exchange Act of 1934) and for our assessment of the effectiveness of internal control over financial reporting. Our internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of our Consolidated Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and Board of Directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the Consolidated Financial Statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, including our Chief Executive Officer and Chief Financial Officer, has conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2019, based on the framework established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 (the “COSO Framework”). This assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of those controls. Based on our assessment under the criteria described above, management has concluded that our internal control over financial reporting was effective as of December 31, 2019. The Company’s independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on the Company’s internal control over financial reporting as of December 31, 2019. This report is included with this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting, which was identified in connection with the evaluation required by paragraph (d) of Rules 13a- 15 and 15d-15 under the Exchange Act, during the quarter ended December 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

160 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Item 9B. Other Information

On February 24, 2020, certain of the Debtors entered into an amendment to the DIP Facilities (the “DIP Facilities Amendment”) with the Consenting Parties and/or their affiliates party thereto, which amends, among other things: • the purposes for which letters of credit can be issued under the DIP LC Facility; • the conditions precedent to the Final Facility Effective Date (as defined in the DIP Facilities); and • the events of default to remove the event of default that the credit agreement with respect to the Exit Facilities (as defined in the RSA) must be in substantially final form by the date of entry of the Final DIP Order (as defined in the DIP Facilities).

The foregoing description of the DIP Facilities Amendment does not purport to be complete and is qualified in its entirety by reference to the final, executed documents memorializing the DIP Facilities and the DIP Facilities Amendment, as approved by the Court, copies of which are filed as Exhibit 4.22 and 4.23, respectively, to this Annual Report on Form 10-K.

161 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of McDermott International, Inc.

Opinion on Internal Control over Financial Reporting We have audited McDermott International, Inc.’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, McDermott International, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2019 consolidated financial statements of the Company and our report dated February 28, 2020, expressed an unqualified opinion thereon. Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying “Management’s Report on Internal Control Over Financial Reporting.” Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Houston, Texas February 28, 2020

162 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item with respect to directors and executive officers is incorporated by reference to the material appearing under the headings “Election of Directors” and “Executive Officer Profiles,” respectively, in the Proxy Statement for our 2020 Annual Meeting of Stockholders (the “2020 Proxy Statement”) or an amendment to Form 10-K to be filed not later than 120 days from the end of our most recent fiscal year. The information required by this item with respect to the Audit Committee and Audit Committee financial experts is incorporated by reference to the material appearing in the “Board Committees” and “Audit Committee” sections under the heading “Corporate Governance—Board of Directors and Its Committees” in the 2020 Proxy Statement or an amendment to Form 10-K to be filed not later than 120 days from the end of our most recent fiscal year.

We have adopted a Code of Business Conduct for our employees and directors, including, specifically, our chief executive officer, our chief financial officer and our other executive officers. Our code satisfies the requirements for a “code of ethics” within the meaning of SEC rules. A copy of the code is posted on our Web site, www.mcdermott.com/ under “Ethics—Code of Business Conduct.”

Item 11. EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to the material appearing under the headings “Compensation Discussion and Analysis,” “Compensation of Directors,” “Executive Compensation Tables,” “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report” in the 2020 Proxy Statement or an amendment to Form 10-K to be filed not later than 120 days from the end of our most recent fiscal year.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item is incorporated by reference the material appearing under the headings “Security Ownership of Directors and Executive Officers” and “Security Ownership of Certain Beneficial Owners” in the 2020 Proxy Statement or an amendment to Form 10-K to be filed not later than 120 days from the end of our most recent fiscal year.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item is incorporated by reference to the material appearing under the headings “Corporate Governance—Related Party Transactions” and “Corporate Governance—Director Independence” in the 2020 Proxy Statement or an amendment to Form 10-K to be filed not later than 120 days from the end of our most recent fiscal year.

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item is incorporated by reference to the material appearing under the heading “Ratification of Appointment of Independent Registered Public Accounting Firm for Year Ending December 31, 2020” in the 2020 Proxy Statement or an amendment to Form 10-K to be filed not later than 120 days from the end of our most recent fiscal year.

163 EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULE The following documents are filed as part of this Annual Report or incorporated by reference: I. CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm Consolidated Statements of Operations for the Years Ended December 31, 2019, 2018 and 2017 Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2019, 2018 and 2017 Consolidated Balance Sheets as of December 31, 2019 and 2018 Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, 2018 and 2017 Consolidated Statements of Equity for the Years Ended December 31, 2019, 2018 and 2017 Notes to Consolidated Financial Statements for the Years Ended December 31, 2019, 2018 and 2017

II. CONSOLIDATED FINANCIAL STATEMENT SCHEDULE All schedules for which provision is made of the applicable regulations of the SEC have been omitted because they are not required under the relevant instructions or because the required information is included in the consolidated financial statements or the related Notes contained in this Annual Report on Form 10-K.

III. EXHIBITS EXHIBIT INDEX Exhibit Number Description

2.1 Business Combination Agreement dated as of December 18, 2017 by and among McDermott International, Inc., McDermott Technology, B.V., McDermott Technology (Americas), LLC, McDermott Technology (US), LLC, Chicago Bridge & Iron Company N.V., Comet I B.V., Comet II B.V, CB&I Oil & Gas Europe B.V., CB&I Group UK Holdings, CB&I Nederland B.V. and The Shaw Group, Inc. (incorporated by reference to Exhibit 2.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on December 18, 2017 (File No. 1-08430)).

2.2 Amendment No. 1 and Partial Assignment and Assumption of Business Combination Agreement dated as of January 24, 2018 by and among McDermott International, Inc., McDermott Technology, B.V., McDermott Technology (Americas), LLC, McDermott Technology (US), LLC, McDermott Technology (2), B.V., McDermott Technology (3), B.V., Chicago Bridge & Iron Company N.V., Comet I B.V., Comet II B.V, CB&I Oil & Gas Europe B.V., CB&I Group UK Holdings, CB&I Nederland B.V. and The Shaw Group, Inc. (incorporated by reference to Exhibit 2.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on January 24, 2018 (File No. 1-08430)).

2.3 Joint Chapter 11 Plan of Reorganization of McDermott International, Inc. and its Debtor Affiliates, dated January 21, 2020 (Incorporated by reference to Exhibit A of the Disclosure Statement for the Joint Prepackaged Chapter 11 Plan of Reorganization of McDermott International, Inc. and its Affiliated Debtors dated January 21, 2020, filed as Exhibit 99.2 to McDermott’s Form 8-K filed on January 21, 2020).

3.1 McDermott International, Inc.’s Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to McDermott International, Inc.’s Post-Effective Amendment No. 1 on Form S-8 to Registration Statement on Form S-4 filed with the SEC on May 11, 2018 (Reg. No. 333-222662).

3.2 McDermott International, Inc.’s Amended and Restated By-laws (incorporated by reference to Exhibit 3.2 to McDermott International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (file No. 1-08430)).

3.3 Certificate of Designation of 12% Redeemable Preferred Stock (incorporated by reference to Exhibit 3.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on October 30, 2018 (File No. 1-08430)).

3.4 Certificate of Amendment to the Certificate of Designation of 12% Redeemable Preferred Stock of McDermott International, Inc., dated October 24, 2019 (incorporated by reference to Exhibit 3.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on October 29, 2019 (File No. 1-08430)).

3.5 Certificate of Amendment to the Certificate of Designation of 12% Redeemable Preferred Stock of McDermott International, Inc., dated December 2, 2019 (incorporated by reference to Exhibit 3.2 to McDermott International, Inc.’s Current Report on Form 8-K filed on December 6, 2019 (File No. 1- 08430)).

3.6 Certificate of Designation of Series A Preferred Stock of McDermott International, Inc., dated December 2, 2019 (incorporated by reference to Exhibit 3.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on December 6, 2019 (File No. 1-08430)).

164 EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

Exhibit Number Description 4.1† Description of Common Stock

4.2 Indenture, dated as of April 18, 2018, by and among McDermott Escrow 1, Inc., to be merged with and into McDermott Technology (Americas), Inc., and McDermott Escrow 2, Inc., to be merged with and into McDermott Technology (US), Inc., and Wells Fargo Bank, National Association, as Trustee, relating to 10.625% Senior Notes due 2024 (incorporated by reference to Exhibit 4.1 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on April 18, 2018 (File No. 1-08430)).

4.3 First Supplemental Indenture, dated May 10, 2018, among the Escrow Issuers, the Post-Merger Co-Issuers, certain of the Guarantors (each, as defined therein) and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.2 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on May 11, 2018 (File No. 1-08430)).

4.4 Second Supplemental Indenture, dated May 10, 2018, among the Post-Merger Co-Issuers, certain of the Guarantors (each, as defined therein) and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.3 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on May 11, 2018 (File No. 1-08430)).

4.5 Third Supplemental Indenture, dated July 8, 2019, among CB&I Storage Tank Solutions LLC, McDermott Technology (Americas), Inc. and McDermott Technology (US), Inc., and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.1 to McDermott International, Inc.’s Quarterly Report on Form 10-Q filed with the SEC on July 29, 2019 (File No. 1-08430)).

4.6 Fourth Supplemental Indenture, dated September 3, 2019, among CB&I STS Delaware LLC, CB&I STS Holdings LLC CBI Company Ltd., McDermott Technology (Americas), Inc. and McDermott Technology (US), Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.1 to McDermott International, Inc.’s Quarterly Report on Form 10-Q filed with the SEC on November 4, 2019 (File No. 1-08430)).

4.7 Fifth Supplemental Indenture, dated October 22, 2019, among McDermott Servicos offshore Do Brasil Ltda., McDermott Technology (Americas), Inc. and McDermott Technology (US), Inc. and Wells Fargo Bank, National Association. (incorporated by reference to Exhibit 4.2 to McDermott International, Inc.’s Quarterly Report on Form 10-Q filed with the SEC on November 4, 2019 (File No. 1-08430)).

4.8† Supplemental Indenture, dated December 20, 2019, among CB&I (US) Holdings, Limited, McDermott Technology, LLC, McDermott Technology (Americas), Inc., McDermott Technology (US), Inc., and UMB Bank, N.A.

4.9 Form of 10.625% Senior Notes due 2024 (incorporated by reference to Exhibit 4.2 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on April 18, 2018 (File No. 1-08430)).

4.10 Credit Agreement, dated as of May 10, 2018, by and among McDermott International, Inc., a syndicate of lenders and letter of credit issuers, and Crédit Agricole Corporate and Investment Bank, as administrative agent and collateral agent, and Barclays Bank PLC, as administrative agent (incorporated by reference to Exhibit 4.1 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on May 11, 2018 (File No. 1-08430)).

4.11 Letter of Credit Agreement, dated as of October 30, 2018, by and among McDermott International, Inc., as a guarantor, McDermott Technology (Americas), Inc., McDermott Technology (US), Inc. and McDermott Technology, B.V., as co-applicants, a syndicate of participants and letter of credit issuers, and Barclays Bank PLC, as administrative agent (incorporated by reference to Exhibit 4.1 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on October 30, 2018 (File No. 1-08430)).

4.12 Warrant Agreement, dated as of November 29, 2018, among McDermott International, Inc., Computershare Inc. and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on November 29, 2018 (File No. 1-08430)).

4.13 Superpriority Senior Secured Credit Agreement, dated as of October 21, 2019, by and among McDermott International, Inc., a syndicate of lenders and letter of credit issuers, and Crédit Agricole Corporate and Investment Bank, as administrative agent and collateral agent, and Barclays Bank PLC, as administrative agent (incorporated by reference to Exhibit 10.3 to McDermott International, Inc.’s Current Report on Form 8-K filed on October 21, 2019 (File No. 1-08430)).

165 EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

Exhibit Number Description

4.14 Amendment No. 1 to Superpriority Senior Secured Credit Agreement, dated as of December 1, 2019, by and among McDermott International, Inc., a syndicate of lenders and letter of credit issuers, and Crédit Agricole Corporate and Investment Bank, as administrative agent and collateral agent, and Barclays Bank PLC, as administrative agent (incorporated by reference to Exhibit 10.3 to McDermott International, Inc.’s Current Report on Form 8-K filed on December 2, 2019 (File No. 1-08430)).

4.15 Amendment No. 2 to Superpriority Senior Secured Credit Agreement, dated as of January 9, 2020, by and among McDermott International, Inc., a syndicate of lenders and letter of credit issuers, and Crédit Agricole Corporate and Investment Bank, as administrative agent and collateral agent, and Barclays Bank PLC, as administrative agent (incorporated by reference to Exhibit 10.3 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on January 15, 2020 (File No. 1-08430))).

4.16 Consent and Amendment No. 1 to Credit Agreement, dated October 21, 2019, by and among McDermott International, Inc., McDermott Technology (Americas), Inc., McDermott Technology (US), Inc. and McDermott Technology, B.V., a syndicate of lenders and letter of credit issuers, and Crédit Agricole Corporate and Investment Bank, as administrative agent and collateral agent, and Barclays Bank PLC, as administrative agent (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on October 21, 2019 (File No. 1-08430)).

4.17 Consent and Amendment No. 1 to Letter of Credit Agreement, dated as of October 21, 2019, by and among McDermott International, Inc., as a guarantor, McDermott Technology (Americas), Inc., McDermott Technology (US), Inc. and McDermott Technology, B.V., as co-applicants, a syndicate of participants and letter of credit issuers, and Barclays Bank PLC, as administrative agent (incorporated by reference to Exhibit 10.2 to McDermott International, Inc.’s Current Report on Form 8-K filed on October 21, 2019 (File No. 1-08430)).

4.18 Amendment No. 2 to Credit Agreement, dated as of December 1, 2019, by and among McDermott International, Inc., McDermott Technology (Americas), Inc., McDermott Technology (US), Inc. and McDermott Technology, B.V., a syndicate of lenders and letter of credit issuers, and Crédit Agricole Corporate and Investment Bank, as administrative agent and collateral agent, and Barclays Bank PLC, as administrative agent (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on December 2, 2019 (File No. 1-08430)).

4.19 Amendment No. 2 to Letter of Credit Agreement, dated as of December 1, by and among McDermott International, Inc., as a guarantor, McDermott Technology (Americas), Inc., McDermott Technology (US), Inc. and McDermott Technology, B.V., as co-applicants, a syndicate of participants and letter of credit issuers, and Barclays Bank PLC, as administrative agent (incorporated by reference to Exhibit 10.2 to McDermott International, Inc.’s Current Report on Form 8-K filed on December 2, 2019 (File No. 1-08430)).

4.20 Amendment No. 3 to Credit Agreement, dated as of January 9, 2020, by and among McDermott International, Inc., McDermott Technology (Americas), Inc., McDermott Technology (US), Inc. and McDermott Technology, B.V., a syndicate of lenders and letter of credit issuers, and Crédit Agricole Corporate and Investment Bank, as administrative agent and collateral agent, and Barclays Bank PLC, as administrative agent (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on January 15, 2020 (File No. 1-08430)).

4.21 Amendment No. 3 to Letter of Credit Agreement, dated as of January 9, 2020, by and among McDermott International, Inc., as a guarantor, McDermott Technology (Americas), Inc., McDermott Technology (US), Inc. and McDermott Technology, B.V., as co-applicants, a syndicate of participants and letter of credit issuers, and Barclays Bank PLC, as administrative agent (incorporated by reference to Exhibit 10.2 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on January 15, 2020 (File No. 1-08430)).

4.22† Superpriority Senior Secured Debtor-in-Possession Credit Agreement, dated as of January 23, 2020, by and among McDermott International, Inc., as a guarantor, McDermott Technology (Americas), Inc., McDermott Technology (US), Inc. and McDermott Technology, B.V. as borrowers, a syndicate of lenders and issuers party thereto, Crédit Agricole Corporate and Investment Bank, as revolving administrative agent. Barclays Bank PLC, as term loan administrative agent, Barclays Bank PLC, Royal Bank of Canada, Crédit Agricole Corporate and Investment Bank and ABN AMRO Capital USA LLC, as lead arrangers for the term facilities and the revolving facility, Barclays Bank PLC, as sole bookrunner for the term facilities and Crédit Agricole Corporate and Investment Bank, as sole bookrunner for the revolving facility.

166 EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

Exhibit Number Description

4.23† Amendment No. 1 to Superpriority Senior Secured Debtor-in-Possession Credit Agreement, dated as of February 24, 2020, by and among McDermott International, Inc., as a guarantor, McDermott Technology (Americas), Inc., McDermott Technology (US), Inc. and McDermott Technology, B.V. as borrowers, a syndicate of lenders and issuers party thereto, Crédit Agricole Corporate and Investment Bank, as revolving administrative agent. Barclays Bank PLC, as term loan administrative agent, Barclays Bank PLC, Royal Bank of Canada, Crédit Agricole Corporate and Investment Bank and ABN AMRO Capital USA LLC, as lead arrangers for the term facilities and the revolving facility, Barclays Bank PLC, as sole bookrunner for the term facilities and Crédit Agricole Corporate and Investment Bank, as sole bookrunner for the revolving facility.

10.1* 2009 McDermott International, Inc. Long-Term Incentive Plan (incorporated by reference to Appendix A to McDermott International, Inc.’s Proxy Statement on Schedule 14A filed on March 27, 2009 (File No. 1-08430)).

10.2 Rabbi Trust Agreement by and between McDermott International, Inc. and Mellon Bank, N.A., as amended as of November 18, 2010 (incorporated by reference to Exhibit 10.43 to McDermott International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2010 (file No. 1-08430)).

10.3* Form of 2009 LTIP 2012 Stock Option Grant Agreement (incorporated by reference to Exhibit 10.3 to McDermott International, Inc.’s Current Report on Form 8-K filed on March 6, 2012 (file No. 1-08430)).

10.4* Form of 2009 LTIP March 5, 2013 Performance Share Grant Agreement (incorporated by reference to Exhibit 10.32 to McDermott International, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2012 (file No. 1-08430)).

10.5* Letter Agreement dated October 17, 2013 between McDermott International, Inc. and David Dickson (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 (File No. 1-08430)).

10.6* Change of Control Agreement among McDermott International, Inc., McDermott, Inc. and David Dickson (incorporated by reference to Exhibit 10.2 to McDermott International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 (File No. 1-08430)).

10.7* McDermott International, Inc. Director and Executive Deferred Compensation Plan, as Amended and Restated May 6, 2014 (incorporated by reference to Exhibit 10.4 to McDermott International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (File No. 1-08430)).

10.8* McDermott International, Inc. 2014 Long-Term Incentive Plan (incorporated by reference to Appendix A to McDermott International, Inc.’s Proxy Statement on Schedule 14A filed on March 24, 2014 (File No. 1-08430)).

10.9* Form of 2016 Restricted Stock Unit Grant Agreement (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed with the Commission on March 3, 2016 (File No. 1-08430)).

10.10* McDermott International, Inc. Executive Incentive Compensation Plan (incorporated by reference to Appendix A to McDermott International Inc.’s Proxy Statement on Schedule 14A filed on March 18, 2016 (File No. 1-08430)).

10.11* 2016 McDermott International, Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed with the Commission on April 14, 2016 (File No, 1-08430)).

10.12* Form of 2017 Restricted Stock Unit Grant Agreement (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on March 3, 2017 (File No. 1-08430)).

10.13* Form of 2018 Restricted Stock Unit Grant Agreement (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on March 7, 2018 (File No. 1-08430)).

10.14* Form of Amended and Restated RSU Grant Agreement (Replacing 2016 Performance Unit Grant Agreements (incorporated by reference to Exhibit 10.3 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on March 7, 2018 (File No. 1-08430)).

10.15* Form of Amended and Restated RSU Grant Agreement (Replacing 2017 Performance Unit Grant Agreements) (incorporated by reference to Exhibit 10.4 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on March 7, 2018 (File No. 1-08430)).

167 EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

Exhibit Number Description

10.16* The Chicago Bridge & Iron 2008 Long-Term Incentive Plan As Amended May 8, 2008 (incorporated by reference to Annex B to CB&I’s 2008 Definitive Proxy Statement filed with the SEC on April 8, 2008 (File No. 1-12815)).

10.17* 2009 Amendment to the Chicago Bridge & Iron 2008 Long-Term Incentive Plan (incorporated by reference to Annex B to CB&I’s 2009 Definitive Proxy Statement filed with the SEC on March 25, 2009 (File No. 1-12815)).

10.18* 2012 Amendment to the Chicago Bridge & Iron 2008 Long-Term Incentive Plan (incorporated by reference to Annex A to CB&I’s 2012 Definitive Proxy Statement filed with the SEC on March 22, 2012 (File No. 1-12815)).

10.19* 2015 Amendment to the Chicago Bridge & Iron 2008 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to CB&I’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2015, filed with the SEC on April 24, 2015 (File No. 1-12815)).

10.20* 2016 Amendment to the Chicago Bridge & Iron 2008 Long-Term Incentive Plan (incorporated by reference to Annex A to CB&I’s 2016 Definitive Proxy Statement filed with the SEC on March 24, 2016 (File No. 1-12815)).

10.21* The Shaw Group Inc. 2008 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.8 to The Shaw Group’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2009, filed with the SEC on April 9, 2009 (File No. 1-12227)).

10.22* First Amendment to The Shaw Group Inc. 2008 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to The Shaw Group’s Current Report on Form 8-K filed with the SEC on January 20, 2011 (File No. 1-12815)).

10.23* Second Amendment to The Shaw Group Inc. 2008 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 to The Shaw Group’s Current Report on Form 8-K filed with the SEC on January 20, 2011 (File No. 1-12227)).

10.24* Third Amendment to The Shaw Group Inc. 2008 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to CB&I’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2014, filed with the SEC on April 24, 2014 (File No. 1-12227)).

10.25* Fourth Amendment to The Shaw Group Inc. 2008 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.2 to CB&I’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2015, filed with the SEC on April 24, 2015 (File No. 1-12815)).

10.26* Form of 2018 Performance Unit Grant Agreement (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on June 12, 2018 (File No. 1-08430)).

10.27* Form of 2019 Restricted Stock Unit Grant Agreement (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on March 5, 2019 (File No. 1-08430)).

10.28* Form of 2019 Performance Unit Grant Agreement (incorporated by reference to Exhibit 10.2 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on March 5, 2019 (File No. 1-08430)).

10.29* Form of Change in Control Agreement (incorporated by reference to Exhibit 10.3 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on March 5, 2019 (File No. 1-08430)).

10.30* Form of Change in Control Agreement for Operational Officers (incorporated by reference to Exhibit 10.4 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on March 5, 2019 (File No. 1-08430)).

10.31* Amended and Restated Chicago Bridge & Iron 2008 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.5 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on March 5, 2019 (File No. 1-08430)).

10.32* Form of 2019 Non-Employee Director Restricted Stock Unit Grant Agreement (incorporated by reference to Exhibit 4.1 to McDermott International, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 (File No. 1-08430)).

10.33* Separation Agreement dated effective November 6, 2019 by and between Stuart Spence and McDermott, Inc. (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on November 13, 2019 (File No. 1-08430)).

10.34* Form of Change in Control Agreement among McDermott International, Inc., McDermott, Inc. and Christopher A. Krummel (incorporated by reference to Exhibit 10.2 to McDermott International, Inc.’s Current Report on Form 8-K filed on November 13, 2019 (File No. 1-08430)).

168 EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

Exhibit Number Description

10.35*† Form of Retention Bonus Award Agreement.

10.36*† Form of Retention Bonus Award Agreement for Certain Executives.

10.37 Registration Rights Agreement, dated as of November 29, 2018, by and among McDermott International, Inc., West Street Capital Partners VII Offshore Investments, L.P., West Street Capital Partners VII Investments B, L.P. and West Street Capital Partners VII – Parallel B, L.P. (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on November 29, 2018 (File No. 1-08430)).

10.38 Consent and Waiver Agreement, dated October 21, 2019, by and among McDermott International, Inc., West Street Capital Partners VII Offshore Investments, L.P., West Street Capital Partners VII - Parallel B, L.P., West Street Capital Partners VII B, L.P. and Apicorp Managed Account Investment Vehicle, L.P. (incorporated by reference to Exhibit 10.4 to McDermott International, Inc.’s Current Report on Form 8-K filed on October 21, 2019 (File No. 1-08430)).

10.39 Amendment No. 1 to Registration Rights Agreement, dated as of October 25, 2019, by and between McDermott International, Inc. and the holders party thereto (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on October 29, 2019 (File No. 1- 08430)).

10.40 Securities Purchase Agreement, dated as of October 30, 2018, by and between McDermott International, Inc. and the Purchasers named therein (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on October 31, 2018 (File No. 1-08430)).

10.41 Amendment No. 1 to Securities Purchase Agreement, dated as of October 25, 2019, by and between McDermott International, Inc. and the parties thereto (incorporated by reference to Exhibit 10.4 to McDermott International, Inc.’s Current Report on Form 8-K filed on October 29, 2019 (File No. 1-08430)).

10.42 Amendment No. 1 to Consent and Waiver Agreement, dated October 28, 2019, by and among McDermott International, Inc., West Street Capital Partners VII Offshore Investments, L.P., West Street Capital Partners VII - Parallel B, L.P., West Street Capital Partners VII B, L.P. and Apicorp Managed Account Investment Vehicle, L.P. (incorporated by reference to Exhibit 10.5 to McDermott International, Inc.’s Current Report on Form 8-K filed on October 29, 2019 (File No. 1-08430)).

10.43 Forbearance Agreement, dated as of December 1, 2019, by and among McDermott Technology (Americas), Inc., McDermott Technology (US), Inc., McDermott International, Inc., each of the guarantors party thereto, and each of the holders party thereto (incorporated by reference to Exhibit 10.4 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on December 2, 2019 (File No. 1-08430)).

10.44 Second Consent and Waiver Agreement, dated as of December 1, 2019, by and among McDermott International, Inc., West Street Capital Partners VII Offshore Investments, L.P., West Street Capital Partners VII - Parallel B, L.P., West Street Capital Partners VII B, L.P. and Apicorp Managed Account Investment Vehicle, L.P. (incorporated by reference to Exhibit 10.5 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on December 2, 2019 (File No. 1-08430)).

10.45 Tripartite Agreement, dated as of December 2, 2019, by and among McDermott Technology (Americas), Inc., McDermott Technology (US), Inc., Wells Fargo Bank, National Association and UMB Bank, N.A. (incorporated by reference to Exhibit 4.1 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on December 6, 2019 (File No. 1-08430)).

10.46 Form of Registration Rights Agreement by and among McDermott International, Inc. and the purchasers party thereto (incorporated by reference to Exhibit 10.2 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on December 6, 2019 (File No. 1-08430)).

10.47 Restructuring Support Agreement, dated January 21, 2020 by and among the McDermott International, Inc., the debtor subsidiaries party thereto and a syndicate of lenders and letter of credit issuers (incorporated by reference to Exhibit B of the Disclosure Statement for the Joint Prepackaged Chapter 11 Plan of Reorganization of McDermott International, Inc. and its Affiliated Debtors dated January 21, 2020 filed as Exhibit 99.2 to McDermott International, Inc.’s Current Report on Form 8-K filed with the SEC on January 21, 2020 (File No. 1-08430))).

10.48 Amendment No. 1 to Warrant Agreement, dated as of October 25, 2019, by and between McDermott International, Inc., Computershare Inc. and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 10.2 to McDermott International, Inc.’s Current Report on Form 8-K filed on October 29, 2019 (File No. 1-08430)).

169 EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

Exhibit Number Description

10.49 Warrant Agreement, dated as of October 25, 2019, by and between McDermott International, Inc., Computershare Inc. and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 10.3 to McDermott International, Inc.’s Current Report on Form 8-K filed on October 29, 2019 (File No. 1-08430)).

10.50 Warrant Agreement, dated as of December 2, 2019, by and between McDermott International, Inc., Computershare Inc. and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 10.1 to McDermott International, Inc.’s Current Report on Form 8-K filed on December 6, 2019 (File No. 1-08430)).

10.51 Share and Asset Purchase Agreement, dated January 21, 2020, by and among MTA, MTUS, MTBV and J. Ray Holdings, Inc. and Illuminate Buyer, LLC (incorporated by reference to Exhibit 10.2 to McDermott International, Inc.’s Current Report on Form 8-K filed on January 21, 2020 (File No. 1-08430)).

10.52† McDermott International, Inc. 2020 Key Employee Retention Plan

10.53† McDermott International, Inc. 2020 Key Employee Incentive Plan

21.1† Significant Subsidiaries of the Registrant.

31.1† Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer.

31.2† Rule 13a-14(a)/15d-14(a) certification of Chief Financial Officer.

32.1† Section 1350 certification of Chief Executive Officer.

32.2† Section 1350 certification of Chief Financial Officer.

* Management contract or compensatory plan or arrangement. † Filed herewith.

101.INS XBRL Inline XBRL Instance Document – The instance document does not appear in the interactive date file because its XBRL tags are embedded within the Inline XBRL document

101.SCH XBRL Inline XBRL Taxonomy Extension Schema Document

101.CAL XBRL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB XBRL Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF XBRL Inline XBRL Taxonomy Extension Definition Linkbase Document

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Item 16. FORM 10-K SUMMARY.

None.

170 SIGNATURES

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

McDERMOTT INTERNATIONAL, INC. By: /s/ DAVID DICKSON David Dickson February 28, 2020 President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on the date indicated.

Signature Title

/s/ DAVID DICKSON President and Chief Executive Officer and Director David Dickson (Principal Executive Officer)

/s/ CHRISTOPHER A. KRUMMEL Executive Vice President and Chief Financial Officer Christopher A. Krummel (Principal Financial Officer)

/s/ DALE SUDERMAN Vice President and Chief Accounting Officer Dale Suderman (Principal Accounting Officer)

/s/ FORBES I.J. ALEXANDER Director Forbes I.J. Alexander

/s/ PHILIPPE BARRIL Director Philippe Barril

/s/ JOHN F. BOOKOUT, III Director John F. Bookout, III

/s/ ALAN J. CARR Director Alan J. Carr

/s/ L. RICHARD FLURY Director L. Richard Flury

/s/ W. CRAIG KISSEL Director W. Craig Kissel

/s/ GARY P. LUQUETTE Director, Chairman of the Board Gary P. Luquette

/s/ JAMES H. MILLER Director James H. Miller

/s/ WILLIAM H. SCHUMANN, III Director William H. Schumann, III

/s/ MARY L. SHAFER-MALICKI Director Mary L. Shafer-Malicki

/s/ HEATHER L. SUMMERFIELD Director Heather L. Summerfield

/s/ MARSHA C. WILLIAMS Director Marsha C. Williams

February 28, 2020

171 Exhibit 4.1 DESCRIPTION OF COMMON STOCK REGISTERED UNDER SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

As of February 28, 2020, McDermott International, Inc. (“we,” “us” or “our”) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): common stock, par value $1.00 per share (“common stock”). The following description of our common stock and related information is a summary and does not purport to be complete. It is subject to, and qualified in its entirety by reference to, our amended and restated articles of incorporation, as amended (our “articles of incorporation”), our amended and restated by-laws (our “by-laws”), the certificate of designation, as amended (the “Certificate of Designation”), relating to our 12% Redeemable Preferred Stock, par value $1.00 per share (the “Redeemable Preferred Stock”), which we have incorporated by reference as exhibits to our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”), to which this Description of Common Stock is included as an exhibit. You should read the provisions of our articles of incorporation, our by-laws and the Certificate of Designation as currently in effect for more details regarding the provisions described below and for other provisions that may be important to you.

Description of Common Stock

Our authorized common stock consists of 255,000,000 shares. Each authorized share of common stock has a par value of $1.00. As of February 28, 2020, 193,081,224 shares of common stock were outstanding, and 2,845,860 shares of common stock were held by us as treasury stock. As described in the 2019 Form 10-K, on January 21, 2020, we and various of our subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas to pursue a joint prepackaged Chapter 11 plan of reorganization (the “Plan of Reorganization”). The Plan of Reorganization contemplates, among other things, that all of our currently outstanding equity interests, including all the outstanding shares of our common stock, will be cancelled and discharged in connection with the Chapter 11 cases, and the holders of those equity interests, including the holders of the outstanding shares of our common stock, will be entitled to no recovery. In contemplation of the implementation of the Plan of Reorganization, our board of directors recently authorized the termination of our registration with the Panamanian National Securities Commission.

Each share of common stock has one vote in the election of each director and on all other matters voted on generally by our stockholders. No share of common stock has any cumulative voting rights. This means that the holders of a majority of the voting power of the shares voting for the election of directors can elect all directors to be elected if they choose to do so. Our board of directors may grant holders of preferred stock, in the resolutions creating the series of preferred stock, the right to vote on the election of directors or any questions affecting us.

The presence at a meeting of our stockholders, in person or by proxy, of holders of a majority of the outstanding shares of common stock as of the record date for that meeting will constitute a quorum. Some business combination transactions require more than a simple majority vote. We have described these business combination transactions below under “Other Matters—Business Combination Transactions Requiring More Than a Majority Vote.”

Otherwise, stockholder approvals generally require the affirmative vote of a majority of the outstanding shares of common stock present in person or represented by proxy at the meeting and entitled to vote and actually voting on the matter.

Holders of common stock will be entitled to dividends in such amounts and at such times as our board of directors in its discretion may declare out of funds legally available for the payment of dividends. We generally do not pay cash dividends, and we intend to retain future earnings to provide funds for use in the operation and expansion of our business. In addition, the payment of dividends on the common stock may be limited by obligations we may have to holders of any preferred stock, including the Redeemable Preferred Stock (as described below), or by the provisions of the terms of the credit agreements, indentures and other agreements we may enter into from time to time.

If we liquidate or dissolve our business, the holders of common stock will share ratably in all assets available for distribution to stockholders after our creditors are paid in full and the holders of all series of our outstanding preferred stock, including the Redeemable Preferred Stock, receive their liquidation preferences in full.

The common stock has no preemptive or subscription rights and is not convertible or redeemable or entitled to the benefits of any sinking or repurchase fund. All issued and outstanding shares of common stock are fully paid and nonassessable.

Our outstanding shares of the common stock are quoted on the OTC Pink Marketplace and trade under the symbol “MDRIQ.”

The transfer agent and registrar for the common stock is Computershare Trust Company, N.A.

Description of Redeemable Preferred Stock

General

Under the terms of our articles of incorporation, in November 2018, our board of directors designated a series of preferred stock as our Redeemable Preferred Stock and authorized the issuance of 300,000 shares of Redeemable Preferred Stock. On October 21, 2019, in connection with, among other things, our entering into the Superpriority Credit Agreement described in the 2019 Form 10-K, we entered into a consent and waiver agreement (the “Consent and Waiver Agreement”) with the holders of the Redeemable Preferred Stock, pursuant to which we agreed to, among other things, issue to the holders of the Redeemable Preferred Stock shares of Redeemable Preferred Stock in an aggregate amount equal to 3.0% of the Accreted Value (as defined in the Certificate of Designation). As of February 28, 2020, we have 300,000 shares of Redeemable Preferred Stock outstanding. The following description of the Redeemable Preferred Stock is included because various terms of the Redeemable Preferred Stock could impact our common stock. However, as noted above, the Plan of Reorganization contemplates, among other things, that all of our currently outstanding equity interests, including all the outstanding shares of Redeemable Preferred Stock, will be cancelled and discharged in connection with the Chapter 11 cases.

Rank

The Redeemable Preferred Stock ranks:

• senior to all classes of our common stock and each other class or series of our capital stock established after the date of issuance of the Redeemable Preferred Stock (the “Issue Date”) by our board of directors, the terms of which do not expressly provide that such class or series ranks senior to or on a parity with the Redeemable Preferred Stock as to dividend rights or rights upon our liquidation, winding-up or dissolution;

• on parity with any class or series of our capital stock established after the Issue Date, the terms of which expressly provide that such class or series will rank on a parity with the Redeemable Preferred Stock as to dividend rights or rights upon our liquidation, winding-up or dissolution; and

• junior to each class of our capital stock established after the Issue Date, the terms of which expressly provide that such class or series will rank senior to the Redeemable Preferred Stock as to dividend rights or rights upon our liquidation, winding-up or dissolution.

Dividends; Liquidation; Maturity

The Redeemable Preferred Stock has an initial Accreted Value of $1,000 per share. Subject to the rights of holders of any stock ranking senior to the Redeemable Preferred Stock, the holders of our Redeemable Preferred Stock are entitled to receive cumulative compounding preferred cash dividends quarterly in arrears at a fixed rate of 12.0% per annum compounded quarterly (of which 3.0% accrues each quarter) on the Accreted Value per share (the “Dividend Rate”) (equal to $120 per share annualized). Dividends on the Redeemable Preferred Stock will accrue on a daily basis, whether or not declared. Quarterly dividends will be payable only when, as and if authorized and declared by our board of directors. If a cash dividend is not declared and paid in respect of any dividend payment period ending on or prior to December 31, 2021, then the Accreted Value of each outstanding share of Redeemable Preferred Stock will automatically be increased by the amount of the dividend otherwise payable for such dividend payment period, except that the applicable dividend rate for this purpose is 13.0% per annum (the “PIK Dividend Rate”). Such automatic increase in the Accreted Value of each outstanding share of Redeemable Preferred Stock is in full satisfaction of the preferred dividend that would have otherwise accrued for such dividend payment period. The Certificate of Designation provides that, if we fail to pay in full any cash dividends when due and payable for any quarter after December 31, 2021, then the holders of the Redeemable Preferred Stock would be entitled to additional rights, as described below. Pursuant to the Consent and Waiver Agreement, we agreed to increase the Dividend Rate and the PIK Dividend Rate to 14.0% per annum and 15.0% per annum, respectively, per share of Redeemable Preferred Stock.

The Redeemable Preferred Stock has a liquidation preference equal to the then applicable Minimum Return (the “Liquidation Preference”) plus accrued and unpaid dividends. The Liquidation Preference will initially be equal to $1,200. The “Minimum Return” is equal to a

multiple of MOIC (as defined in the Certificate of Designation) as follows, exclusive of cash dividends previously paid:

• prior to January 1, 2020, a MOIC multiple of 1.2;

• on or after January 1, 2020 but prior to January 1, 2022, a MOIC multiple of 1.25;

• on or after January 1, 2022 but prior to January 1, 2023, a MOIC multiple of 1.20;

• on or after January 1, 2023 but prior to January 1, 2025, a MOIC multiple of 1.15; and

• on or after January 1, 2025, a MOIC multiple of 1.20.

The Redeemable Preferred Stock has no stated maturity and will remain outstanding indefinitely unless repurchased or redeemed by us.

Redemption

Optional Redemption

We may redeem the Redeemable Preferred Stock at any time for an amount per share of Redeemable Preferred Stock equal to the Liquidation Preference of each such share plus all accrued dividends on such share (such amount per share, the “Redemption Consideration”).

Holder Redemption Right

At any time after the seventh anniversary of the Issue Date, each holder of the Redeemable Preferred Stock may elect to have us fully redeem such holder’s then outstanding Redeemable Preferred Stock in cash, to the extent that we have funds legally available therefor, at a redemption price per share equal to the Redemption Consideration for each share.

Change of Control

Upon a Change of Control (as defined in the Certificate of Designation), if we have not previously redeemed the Redeemable Preferred Stock as described under “ Redemption—Optional Redemption” and the holders of a majority of the then-outstanding Redeemable Preferred Stock do not agree with us to an alternative treatment, then in connection with such Change of Control, each holder may elect either: (1) to cause us to redeem all, but not less than all, of its outstanding Redeemable Preferred Stock at a redemption price per share equal to the Redemption Consideration, which will be payable in full in cash or, if any of the 10.625% senior notes due 2024 issued by certain of our subsidiaries (and guaranteed by us) are then outstanding, payable partially in cash in an amount equal to 101% of the Share Purchase Price (as defined in the Certificate of Designation) (or such lower amount as may be required under the indenture governing such senior notes) and the remainder in our common stock based on a per share price equal to 96% of the volume-weighted average price of our common stock on the New York Stock Exchange during the 10 trading days prior to the announcement of such change of control; (2) to receive a substantially equivalent security to the Redeemable Preferred Stock in the surviving entity of the change of control; or (3) to continue to hold the Redeemable Preferred

Stock if we are the surviving entity in the change of control. However, any such redemption in cash will be tolled until a date that will not result in the Redeemable Preferred Stock being characterized as “disqualified stock,” “disqualified equity interest” or a similar concept under our debt instruments.

Consent Rights; Board Observer

So long as there are any shares of Redeemable Preferred Stock outstanding, the consent of the holders of a majority of the then- outstanding shares of Redeemable Preferred Stock will be necessary for us or any of our wholly owned subsidiaries to effect, subject to certain exceptions:

(1) any amendment, modification, alteration or supplement to our amended and restated articles of incorporation or the Certificate of Designation in a manner that would adversely affect the rights, preferences, privileges or power of the Redeemable Preferred Stock;

(2) the issuance of stock senior to or on parity with the Redeemable Preferred Stock, or convertible or exercisable into such senior or parity stock, or preferred stock that would share voting rights with the Redeemable Preferred Stock;

(3) a filing for bankruptcy or certain comparable actions;

(4) certain distributions on or repurchases of our common stock or junior stock;

(5) the incurrence of indebtedness that would cause us to exceed a specified leverage ratio;

(6) the entry into or amendment of certain debt agreements that would expressly prohibit or be more restrictive on dividends or redemption payments on the Redeemable Preferred Stock than those existing on the closing date for the issuance of the Redeemable Preferred Stock;

(7) the entry into a change of control transaction if our debt agreements would prohibit or otherwise prevent the redemption contemplated under “Change of Control” above, unless we redeem or otherwise satisfy the Redeemable Preferred Stock in cash at the Minimum Return plus accrued and unpaid dividends prior to or concurrently with such change of control transaction:

(8) certain restricted payments and payments on junior priority indebtedness;

(9) certain equity issuances of subsidiaries or, if prohibited under our debt agreements, the formation of certain subsidiaries or the making of certain investments; or

(10) certain transactions with affiliates.

Moreover, for as long as the initial purchasers (the “Purchasers”) of the Redeemable Preferred Stock are the beneficial owners of at least 51% of the outstanding shares of the Redeemable Preferred Stock, the Purchasers will be entitled to designate one board observer to attend meetings of our board of directors, except during the term of office of any Redeemable

Preferred Director (as defined below). For so long as the Purchasers own at least 25% but less than 51% of the outstanding shares of the Redeemable Preferred Stock, other than during the term of office of any Redeemable Preferred Director, the Purchasers will be entitled to receive, upon request, the same materials that a board observer would have received but will not be entitled to attend meetings of our board of directors.

Additional holder Rights

If we fail to pay in full any cash dividends when due and payable for any quarter after December 31, 2021, then, until such failure is cured by payment in full of all arrearages: (1) dividends on the Redeemable Preferred Stock will thereafter accrue at the Dividend Rate plus an additional 0.25% per dividend payment period (1.0% per annum) upon each such failure up to an additional 1.0% per dividend payment period (4.0% per annum) in the aggregate (the “Payment Default Rate”); and (2) the amount of such accrued but unpaid cash dividends will constitute arrearages that accrue and accumulate (and compound quarterly) at the Dividend Rate plus the Payment Default Rate until paid.

Furthermore, if we fail to pay in cash the quarterly dividend in respect of any two consecutive quarters after December 31, 2021 or if at any time we fail to redeem the Redeemable Preferred Stock in cash as required by the Certificate of Designation in connection with a holder’s exercise of its redemption right or in connection with a change of control, then a majority of the holders of the then-outstanding shares of Redeemable Preferred Stock, voting as a separate class, will be entitled to elect one director (the “Redeemable Preferred Director ”) to our board of directors to serve until such time as all such dividends in arrears or redemption payments, as applicable, have been paid in full in cash.

Limitation on Directors’ Liability

Our articles of incorporation limit the liability of the members of our board of directors by providing that no director will be personally liable to us or our stockholders for monetary damages for any breach of the director’s fiduciary duty as a director, except for liability:

• for any breach of the director’s duty of loyalty to us or our stockholders;

• for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

• for unlawful payments of dividends or unlawful stock purchases or redemptions; and

• for any transaction from which the director derived an improper personal benefit.

This provision could have the effect of reducing the likelihood of litigation against our directors and may discourage or deter our stockholders or management from bringing a lawsuit against our directors for breach of their duty of care, even though such an action, if successful, might otherwise have benefited us and our stockholders. Our by-laws provide indemnification to our officers and directors and other specified persons with respect to their conduct in various capacities.

Other Matters

Some of the provisions of our articles of incorporation and by-laws and Panamanian law discussed below may have the effect, either alone or in combination, of making more difficult or discouraging a tender offer, proxy contest, merger or other takeover attempt that our board of directors opposes but that a stockholder might consider to be in its best interest.

Action by written Consent

Under Panamanian law, our stockholders may act by written consent without a meeting. However, any such consent must be either: (1) signed by all our stockholders or their respective representatives or proxies; or (2) signed by the holders of at least a majority of our outstanding shares of capital stock entitled to vote (or, in the case of an amendment to the provisions of our articles of incorporation described below relating to business combination transactions or the number, election and classification of directors, the holders of at least two-thirds of our outstanding shares of capital stock entitled to vote) or their respective representatives or proxies, provided that written waivers of a meeting are obtained by all stockholders who have not signed the written consent (which waivers may be obtained after the consents have been obtained). The practical effect of these provisions is that our stockholders cannot take action by written consent without unanimous concurrence by the stockholders in the action to be taken.

Business Combination Transactions Requiring More Than a Majority Vote

Under our articles of incorporation, whenever applicable law requires the vote or consent of our stockholders to authorize or approve a sale, lease or exchange of all or substantially all our property or assets or to adopt or approve an agreement of merger or consolidation of our company with or into any other corporation or to merge any other corporation into our company, the vote of at least two-thirds of our outstanding capital stock entitled to vote on that transaction is required for any such authorization, adoption or approval.

The super-majority requirement described above could:

• cause a delay, deferral or prevention of a change in control of our company;

• entrench management; or

• make it more difficult to effect a business combination transaction even if the transaction is favored by a majority of our stockholders.

Filling Vacancies on our Board of Directors

Although members of our board of directors may be removed by a majority vote of our stockholders entitled to vote in the election of directors and actually voting on the matter, our articles of incorporation provide that any vacancies will be filled only by the affirmative vote of a majority of our remaining directors, even if less than a quorum. Therefore, without an amendment to our articles of incorporation, our board of directors could prevent any stockholder from removing directors or enlarging our board of directors and filling the vacancies with that stockholder’s own nominees.

Stockholder Board nominations and Other Proposals

Our by-laws establish an advance-notice procedure for stockholders to make nominations of candidates for election as directors or to bring other business before a meeting of our stockholders. Our by-laws provide that, at any meeting of our stockholders, only such business may be conducted as shall have been brought before the meeting by or at the direction of our board of directors or by a stockholder who has given timely written notice meeting the requirements we describe below and who is a stockholder of record as of the time such stockholder gives that notice and will be entitled to vote at the meeting.

Under these provisions, for notice of stockholder director nominations or proposals to be made at an annual meeting to be timely, the notice must generally be received by us:

• not less than 120 days nor more than 180 days prior to the first anniversary of the previous year’s annual meeting of stockholders; or

• if the date of the annual meeting is advanced by more than 30 days prior to or delayed by more than 60 days after that anniversary date, not earlier than the 180th day before the meeting and not later than the close of business on the later of (1) the 120th day before the meeting and (2) the tenth day after we first make a public announcement of the date of the meeting.

Under the by-laws, a stockholder’s notice to us proposing to nominate an individual for election as a director or relating to the conduct of business other than the nomination of directors at a meeting must contain specified information, including:

• the name and address of the stockholder and the beneficial owner, if any, on whose behalf the nomination or proposal is made;

• a representation that the stockholder is entitled to vote at the meeting and a statement of the number of shares of our capital stock the stockholder owns and the number of shares of our capital stock the beneficial owner, if any, beneficially owns;

• a representation that the stockholder intends to appear in person or by proxy at that meeting to nominate the person or persons or to propose the business specified in the notice; and

• either,

• as to each person the stockholder proposes to nominate for election or re-election as a director, the name and address of that person and all other information regarding that nominee which would be required in a proxy statement filed under the rules of the U.S. Securities and Exchange Commission if our board of directors had nominated that nominee, and a description of any arrangements or understandings between the stockholder and that nominee and any other persons under which the

nomination is to be made, and the written consent of each such nominee to being named in the proxy statement as a nominee and to serve as a director if elected, or

• as to each matter the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting that business at the meeting and any material interest of the stockholder in that business.

The chairman of the meeting may refuse to permit any business to be brought before a meeting by a stockholder if that business was not brought before the meeting in compliance with the advance-notice provisions.

The advance-notice procedure may have the effect of precluding a contest for the election of directors or the consideration of stockholder proposals if the proper procedures are not followed, and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal, without regard to whether consideration of those nominees or proposals might be harmful or beneficial to our company and our stockholders.

Amendments to Articles of Incorporation and By-Laws

An amendment to our articles of incorporation generally requires the approval of the holders of a majority of our outstanding capital stock entitled to vote and actually voting on the amendment. However, the affirmative vote of two-thirds of our outstanding capital stock entitled to vote is required to amend, alter, change or repeal the provisions of our articles of incorporation regarding:

• the votes required for business combinations described above, and

• the number and election of our directors.

Our board of directors may amend, alter or repeal our by-laws and adopt new by-laws. In addition to requiring compliance with the advance-notice provisions described above, our by-laws provide that the vote of the holders of at least two-thirds of the voting power of the then outstanding shares of our capital stock entitled to vote is required for stockholders to amend, alter or repeal certain provisions of our by-laws relating to the powers and composition of our board of directors.

Issuance of Preferred Stock

Our certificate of incorporation authorizes up to 25,000,000 shares of preferred stock, of which 300,000 shares has been designated as Redeemable Preferred Stock, as described above, and 560,083 shares have been designated as Series A Preferred Stock, as described in the 2019 Form 10-K. Preferred stock may, by resolution, from time to time, be issued in one or more series as may be determined by our board of directors, and the board of directors, without further approval of the stockholders, is authorized to determine the number of shares of each series of preferred stock and, subject to some limitations our articles of incorporation set forth, the voting

powers, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions applicable to any of those rights, including dividend rights, conversion or exchange rights, terms of redemption and liquidation preferences, of each series. The issuance of shares of preferred stock may adversely affect the rights of the holders of our common stock. For example, any preferred stock issued may rank prior to our common stock as to dividend rights, liquidation preference or both, may have full or limited voting rights and may be convertible into shares of common stock. As a result, the issuance of shares of preferred stock may discourage bids for shares of our common stock or may otherwise adversely affect the market price of our common stock. Furthermore, undesignated preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a tender offer, proxy contest, merger or otherwise, and to thereby protect the continuity of our management.

Exhibit 4.8

FOURTH SUPPLEMENTAL INDENTURE AND GUARANTEE

This Fourth Supplemental Indenture and Guarantee, dated as of December 20, 2019 (this “Supplemental Indenture” or “Guarantee”), among CB&I (US) Holdings, Limited, a company organized under the laws of England and Wales, and McDermott Technology, LLC, a Delaware limited liability company (collectively, the “New Guarantors”), McDermott Technology (Americas), Inc., a Delaware corporation, and McDermott Technology (US), Inc., a Delaware corporation, as the Issuers, and UMB Bank, N.A., as successor Trustee, paying agent and registrar to Wells Fargo Bank, National Association, under the Indenture referred to below.

W I T N E S S E T H:

WHEREAS, the Issuers, the Guarantors and the Trustee are parties to an Indenture, dated as of April 18, 2018 (as amended, supplemented, waived or otherwise modified, the “Indenture”), providing for the issuance of an unlimited aggregate principal amount of 10.625% Senior Notes due 2024 of the Issuers (the “Notes”);

WHEREAS, Section 4.17 and Article X of the Indenture provide that the Issuers will cause any Restricted Subsidiary that guarantees any Indebtedness of an Issuer or any Guarantor under a Credit Facility consisting of debt for borrowed money (including for the avoidance of doubt, the Credit Agreement) to execute and deliver a Guarantee pursuant to which such Restricted Subsidiary will unconditionally Guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any, and interest on the Notes and all other obligations of the Issuers under the Indenture on the same terms and conditions as those set forth in the Indenture;

WHEREAS, pursuant to Section 9.1(4) of the Indenture, the Trustee and the Issuers are authorized to execute and deliver this Supplemental Indenture to amend the Indenture, without the consent of any Holder, to add additional Guarantors.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantors, the Issuers and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

ARTICLE I Definitions

Section 1.1 Defined Terms. As used in this Supplemental Indenture, capitalized terms defined in the Indenture or in the preamble or recitals thereto are used herein as therein defined. The words “herein,” “hereof’ and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.

ARTICLE II Agreement to be Bound Guarantee

Section 2.1 Agreement to be Bound. Each of the New Guarantors hereby becomes a party to the Indenture as Guarantors and as such shall have all of the rights and be subject to all of

the obligations and agreements of a Guarantor under the Indenture. Each of the New Guarantors agree to be bound by all of the provisions of the Indenture applicable to a Guarantor and to perform all of the obligations and agreements of a Guarantor under the Indenture.

Section 2.2 Guarantee. Each of the New Guarantors hereby fully, unconditionally and irrevocably guarantees, as primary obligors and not merely as a surety, jointly and severally with each other Guarantor, to each Holder and the Trustee, the full and punctual payment when due, whether at maturity, by acceleration, by redemption or otherwise, of the Obligations of the Issuers pursuant to the Notes and the Indenture in accordance with Section 10.1(a) of the Indenture.

ARTICLE III Miscellaneous

Section 3.1 Notices. All notices and other communications to the New Guarantors shall be given as provided in the Indenture to the New Guarantors, at their addresses set forth below, with a copy to the Issuer as provided in the Indenture for notices to the Issuers.

CB&I (US) Holdings, Limited 757 North Eldridge Parkway Houston, Texas 77079 Attention: Treasurer

McDermott Technology, LLC 757 North Eldridge Parkway Houston, Texas 77079 Attention: Treasurer

Section 3.2 Parties. Nothing expressed or mentioned herein is intended or shall be construed to give any Person, firm or corporation, other than the Holders and the Trustee, any legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture or the Indenture or any provision herein or therein contained.

Section 3.3 Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

Section 3.4 Service of Process. Each of the Issuers and each non-U.S. Guarantor (including, if applicable, the New Guarantors) hereby appoints McDermott Technology (Americas), Inc. as its agent for service of process in any suit, action or proceeding with respect to this Supplemental Indenture, the Indenture, the Notes or the Guarantees and for actions brought under federal or state securities laws brought in any federal or state court located in The City of New York.

Section 3.5 Severability Clause. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

Section 3.6 Ratification of Indenture; Supplemental Indentures Part of Indenture; No Liability of Trustee. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of a Note heretofore or hereafter authenticated and delivered shall be bound hereby. The Trustee makes no representation or warranty as to the validity or sufficiency of this Supplemental Indenture or the New Guarantor s’ Guarantee s. Additionally, the Trustee shall not be responsible in any manner whatsoever for or with respect to any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Issuers, the New Guarantors and the Guarantors, and the Trustee makes no representation with respect to any such matters.

Section 3.7 Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. This Supplemental Indenture may be executed in multiple counterparts, which, when taken together, shall constitute one instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmissions shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

Section 3.8 Headings. The headings of the Articles and the sections in this Supplemental Indenture are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

[Signatures on following page]

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

MCDERMOTT TECHNOLOGIES (AMERICAS), INC.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

MCDERMOTT TECHNOLOGIES (US), INC.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

CB&I (US) HOLDINGS, LIMITED, as a Guarantor

By: /s/ Christopher A. Krummel Name: Christopher A. Krummel Title: Authorized Person

Witnessed By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

MCDERMOTT TECHNOLOGY, LLC, as a Guarantor

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

UMB BANK, N.A., as Trustee

By: /s/ Gordon Gendler Name: Gordon Gendler Title: Senior Vice President

[Signature Page - Supplemental Indenture]

4 Exhibit 4.22

SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

Dated as of January 23, 2020

among MCDERMOTT TECHNOLOGY (AMERICAS), INC., MCDERMOTT TECHNOLOGY (US), INC., and MCDERMOTT TECHNOLOGY, B.V., each a Borrower and a debtor and debtor-in-possession under the Bankruptcy Code and MCDERMOTT INTERNATIONAL, INC., as Parent and a debtor and debtor-in-possession under the Bankruptcy Code and THE LENDERS AND ISSUERS PARTY HERETO and CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Revolving Administrative Agent and BARCLAYS BANK PLC, as Term Loan Administrative Agent and BARCLAYS BANK PLC, ROYAL BANK OF CANADA, CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, and ABN AMRO CAPITAL USA LLC, as Lead Arrangers for the Term Facilities and CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, BARCLAYS BANK PLC, ROYAL BANK OF CANADA, and ABN AMRO CAPITAL USA LLC, as Lead Arrangers for the Revolving Facility and BARCLAYS BANK PLC, as Sole Bookrunner for the Term Facilities and CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Sole Bookrunner for the Revolving Facility

TABLE OF CONTENTS

PAGE

ARTICLE I Definitions, Interpretation And Accounting Terms 2

Section 1.1 Defined Terms 2 Section 1.2 Computation of Time Periods 51 Section 1.3 Accounting Terms and Principles 51 Section 1.4 Certain Terms 51 Section 1.5 Dutch Terms 52

ARTICLE II The Loans and Letters of Credit 54

Section 2.1 Term Commitments 54 Section 2.2 Borrowing Procedures for the Term Loans 55 Section 2.3 [Reserved] 56 Section 2.4 Letters of Credit 56 Section 2.5 [Reserved] 58 Section 2.6 Cash Secured Letters of Credit 59 Section 2.7 Letters of Credit Generally 62 Section 2.8 Reduction and Termination of the Commitments 68 Section 2.9 Repayment at Maturity 68 Section 2.10 Evidence of Debt 68 Section 2.11 Voluntary Prepayments 69 Section 2.12 Mandatory Prepayments 70 Section 2.13 Interest 72 Section 2.14 Conversion/Continuation Option 73 Section 2.15 Fees 74 Section 2.16 Payments and Computations 75 Section 2.17 Special Provisions Governing Eurodollar Rate Loans 79 Section 2.18 Capital Adequacy 82 Section 2.19 Taxes 82 Section 2.20 Substitution of Lenders 86 Section 2.21 Mitigation 87 Section 2.22 Cash Collateral 87 Section 2.23 Defaulting Lenders 88 Section 2.24 Priority and Liens. 90

ARTICLE III Conditions To Loans And Letters Of Credit 91

Section 3.1 Conditions Precedent to the Effective Date 91 Section 3.2 Conditions Precedent to Final Facility Effective Date 94 Section 3.3 Conditions Precedent to Each Loan and Letter of Credit 95

-i- TABLE OF CONTENTS (CONTINUED) ARTICLE IV Representations and Warranties 96

Section 4.1 Corporate Existence; Compliance with Law 96 Section 4.2 Corporate Power; Authorization; Enforceable Obligations 96 Section 4.3 Ownership of Borrowers; Subsidiaries 98 Section 4.4 Financial Statements 99 Section 4.5 Material Adverse Effect 99 Section 4.6 [Reserved] 99 Section 4.7 Litigation 100 Section 4.8 Taxes 100 Section 4.9 Full Disclosure 100 Section 4.10 Margin Regulations 100 Section 4.11 No Burdensome Restrictions; No Defaults 101 Section 4.12 Statutory Indebtedness Restrictions 101 Section 4.13 Use of Proceeds 101 Section 4.14 Insurance 102 Section 4.15 Labor Matters 102 Section 4.16 ERISA 102 Section 4.17 Environmental Matters 103 Section 4.18 Intellectual Property 104 Section 4.19 Title; Real Property 104 Section 4.20 Mortgaged Vessels 105 Section 4.21 Anti-Corruption Laws and Sanctions 106 Section 4.22 EEA Financial Institution 106 Section 4.23 Security Instruments 106 Section 4.24 Regulation H 106 Section 4.25 USA Patriot Act 107 Section 4.26 Status of Obligations; Perfection and Priority of Security Interests 107 Section 4.27 DIP Orders 107

ARTICLE V Financial Covenants 107

Section 5.1 Permitted Budget Variances 107 Section 5.2 Minimum Adjusted EBITDA 108 Section 5.3 [Reserved] 108 Section 5.4 Maximum Specified Project Charges 108

ARTICLE VI Reporting Covenants 109

Section 6.1 Financial Statements 109 Section 6.2 Collateral Reporting Requirements 112 Section 6.3 Default Notices 113 Section 6.4 Litigation 114 Section 6.5 Labor Relations 114 Section 6.6 Tax Returns 114

-ii- TABLE OF CONTENTS (CONTINUED) Section 6.7 Insurance 114 Section 6.8 ERISA Matters 115 Section 6.9 Environmental Matters 116 Section 6.10 Patriot Act Information 116 Section 6.11 Other Information 116

ARTICLE VII Affirmative Covenants 117

Section 7.1 Preservation of Corporate Existence, Etc. 117 Section 7.2 Compliance with Laws, Etc. 117 Section 7.3 Conduct of Business 117 Section 7.4 Payment of Taxes, Etc. 118 Section 7.5 Maintenance of Insurance 118 Section 7.6 Access 119 Section 7.7 Keeping of Books 119 Section 7.8 Maintenance of Properties, Etc. 119 Section 7.9 Application of Proceeds 119 Section 7.10 Environmental 120 Section 7.11 Additional Collateral and Guaranties. 122 Section 7.12 Real Property 123 Section 7.13 Undertaking with Respect to NO 105 124 Section 7.14 Additional Undertakings 125 Section 7.15 Maintenance of Rating 125 Section 7.16 [Reserved] 125 Section 7.17 Chief Transformation Officer 125 Section 7.18 Delivery of Bankruptcy Documents. 125

ARTICLE VIII Negative Covenants 126

Section 8.1 Indebtedness 126 Section 8.2 Liens, Etc. 128 Section 8.3 Acquisitions 129 Section 8.4 Sale of Assets 129 Section 8.5 Restricted Payments 131 Section 8.6 Restriction on Fundamental Changes 133 Section 8.7 Change in Nature of Business 134 Section 8.8 Transactions with Affiliates 134 Section 8.9 Restrictions on Subsidiary Distributions; No New Negative Pledge 134 Section 8.10 Modification of Documents 135 Section 8.11 Accounting Changes; Fiscal Year 135 Section 8.12 Margin Regulations 135 Section 8.13 Sale/Leasebacks 135 Section 8.14 Capital Expenditures 135 Section 8.15 Cancellation of Indebtedness Owed to It 135 Section 8.16 Hedging 136

-iii- TABLE OF CONTENTS (CONTINUED) Section 8.17 Post-Termination Benefits 136 Section 8.18 Activities in Panama 136 Section 8.19 Vessel Flags 136 Section 8.20 Payments of Junior Priority Indebtedness 137 Section 8.21 Payments of Existing Senior Indebtedness 137 Section 8.22 Use of Proceeds 137 Section 8.23 Cash Management. 138 Section 8.24 Changes to DIP Orders. 138 Section 8.25 Actions Requiring Prior Requisite Lender Consent. 138

ARTICLE IX Events of Default 139

Section 9.1 Events of Default 139 Section 9.2 Remedies 143 Section 9.3 Actions in Respect of Letters of Credit 144

ARTICLE X The Administrative Agents and Other Agents 144

Section 10.1 Authorization and Action 144 Section 10.2 Administrative Agent’s Reliance, Etc. 146 Section 10.3 The Agents Individually 147 Section 10.4 Lender Credit Decision 147 Section 10.5 Indemnification 147 Section 10.6 Successor Agents 148 Section 10.7 Concerning the Collateral and the Collateral Documents 149 Section 10.8 Collateral Matters Relating to Related Obligations 151 Section 10.9 Other Agents 152 Section 10.10 Certain ERISA Matters 152 Section 10.11 Non-Reliance on Administrative Agent and Other Lenders; Disclosure of Information by Agents 154

ARTICLE XI Miscellaneous 154

Section 11.1 Amendments, Waivers, Etc. 154 Section 11.2 Assignments and Participations 159 Section 11.3 Costs and Expenses 166 Section 11.4 Indemnities 167 Section 11.5 Limitation of Liability 169 Section 11.6 Right of Set-off 170 Section 11.7 Sharing of Payments, Etc. 170 Section 11.8 Notices, Etc. 171 Section 11.9 No Waiver; Remedies 174 Section 11.10 Binding Effect 175 Section 11.11 Governing Law 175 Section 11.12 Submission to Jurisdiction; Service of Process 175 Section 11.13 Waiver of Jury Trial 176

-iv- TABLE OF CONTENTS (CONTINUED) Section 11.14 Marshaling; Payments Set Aside 176 Section 11.15 Section Titles 176 Section 11.16 Execution in Counterparts 176 Section 11.17 Entire Agreement 176 Section 11.18 Confidentiality 177 Section 11.19 Judgment Currency 177 Section 11.20 Severability 178 Section 11.21 Acknowledgement and Consent to Bail-In of EEA Financial Institutions 179 Section 11.22 Interest Rate Limitation 179 Section 11.23 Obligations Joint and Several and Unconditional 180 Section 11.24 DIP Orders 180

ARTICLE XII Guaranty 180

Section 12.1 The Guaranty 180 Section 12.2 Obligations Unconditional 181 Section 12.3 Reinstatement 182 Section 12.4 Certain Additional Waivers 181 Section 12.5 Remedies 182 Section 12.6 Guarantee of Payment; Continuing Guarantee 182

ARTICLE XIII Certain Collateral Agency Provisions 182

Section 13.1 Application of Proceeds of Collateral 182 Section 13.2 Application of Withheld Amounts 183 Section 13.3 Release of Amounts in Collateral Account 183 Section 13.4 Collateral Proceeds Distribution Date 184

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Schedules

Schedule I – Revolving Commitments Schedule II – Revolving Letter of Credit Issuer Commitments Schedule III – Term Commitments Schedule IV – Milestones Schedule V – Guarantors Schedule VI – Scheduled Dispositions Schedule 1.1 – Effective Date Joint Ventures Schedule 3.1 – Effective Date Deliverables Schedule 3.1(d) – Excluded Good Standing Certificates Schedule 3.1(h) – Excluded Equity Certificates Schedule 4.3 – Ownership of Subsidiaries Schedule 4.7 – Litigation Schedule 4.15 – Labor Matters Schedule 4.16(d) – ERISA Events Schedule 4.17 – Environmental Matters Schedule 4.19 – Real Property Schedule 7.14 – Post-Effective Date Deliverables and Undertakings Schedule 8.1 – Existing Indebtedness Schedule 8.2 – Existing Liens Schedule 8.5 – Existing Investments Schedule 8.8 – Affiliate Agreements Schedule 8.19 – Permitted Flags

Annexes

Annex 3.2 – Conditions Precedent to Final Facility Effective Date

Exhibits

Exhibit A – Form of Assignment and Acceptance Exhibit B – Form of Term Promissory Note Exhibit C – Form of Notice of Term Borrowing Exhibit D – Form of Interim DIP Order Exhibit E – Form of Letter of Credit Request Exhibit F – Form of Notice of Conversion or Continuation Exhibit G – Global Intercompany Note Exhibit H – Form of Compliance Certificate Exhibit I – Forms of Tax Certificates

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THIS SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT (this “Agreement”) dated as of January 23, 2020 is among McDermott Technology (Americas), Inc., a Delaware corporation, McDermott Technology (US), Inc., a Delaware corporation and McDermott Technology, B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands (each a “Borrower” and a debtor and debtor-in-possession under the Bankruptcy Code and collectively , the “ Borrowers”), McDermott International, Inc., a Panamanian corporation (the “Parent” and a debtor and debtor-in-possession under the Bankruptcy Code), the Lenders (as defined below), the Issuers (as defined below), Credit Agricole Corporate and Investment Bank, as administrative agent for the Revolving Facility (as defined below) (in such capacity, and together with its successors pursuant to Section 10.6, the “Revolving Administrative Agent”) and Barclays Bank PLC as administrative agent for the Term Facilities (as defined below) (in such capacity, and together with its successors pursuant to Section 10.6, the “Term Loan Administrative Agent” and together with the Revolving Administrative Agent, each an “Administrative Agent” and together the “Administrative Agents”).

INTRODUCTION

A. On or about January 21, 2020 (the “Petition Date”) the Parent, the Borrowers and certain Subsidiaries of the Parent (each a “Debtor” and, together with any other Subsidiaries of the Parent that become debtors-in-possession in the Cases, the “Debtors”) filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (each case of the Borrowers and each other Debtor, a “Case” and collectively, the “Cases”).

B. The Borrowers have requested that the Lenders provide the Borrowers with a debtor-in-possession, superpriority, senior secured credit facility in an aggregate principal amount of up to $2,809,000,000.00 in Commitments and Loans from the Lenders, which shall consist of (x) term loan credit facilities consisting of (i) a new money term loan facility in the aggregate principal amount of up to $1,200,000,000.00 and (ii) a $800,000,000.00 term loan to roll up the Existing Super-Priority Term Loans, certain interest and fees accrued and unpaid in respect of the Existing Super-Priority Term Loans and the make-whole amount due in respect of the Existing Super-Priority Term Loans as of the Petition Date, (y) a letter of credit facility of up to $743,000,000.00 for the issuance of Letters of Credit (including the roll up and deemed issuance hereunder of the Existing Super-Priority Letters of Credit) and (z) the roll-up of certain fees and other amounts accrued and unpaid in respect of the Existing Super-Priority Letters of Credit. The debtor-in-possession, superpriority, senior secured credit facility shall be afforded the liens and priority set forth in the DIP Orders and as set forth in the other Loan Documents and shall be used during the Cases for the purposes set forth in Section 4.13, subject in all respects to the terms set out herein and in the other Loan Documents. All of the claims and the Liens granted under the DIP Orders to the Administrative Agents and the Lenders in respect of the Facilities shall be subject to the Carve Out.

C. The Lenders are willing to extend such credit to the Borrowers, on the terms and subject to the conditions set forth herein and, when entered, the DIP Orders.

Therefore, the parties to this Agreement agree as follows:

ARTICLE I

DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

Section 1.1 Defined Terms

As used in this Agreement, the following terms have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Acquisition” means, with respect to any Person, any transaction, or series of related transactions by which such Person (a) acquires any ongoing business or all or substantially all of the assets of any Person or group of Persons, or division thereof constituting an ongoing business, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage or voting power) of the outstanding ownership interests of a partnership, limited liability company, or other entity that is not a corporation constituting an ongoing business; provided, however, that any acquisition of assets, equity securities or ownership interests of a Person that is a Subsidiary of such Person prior to such acquisition shall not constitute an “Acquisition” hereunder.

“Adequate Protection Liens” has the meaning ascribed to such term in the Interim DIP Order or, upon entry of the Final DIP Order, in the Final DIP Order, as applicable.

“Adequate Protection Payments” means the adequate protection payments to the Prepetition Secured Parties pursuant to the terms of the DIP Orders.

“Administrative Agents” has the meaning specified in the preamble to this Agreement.

“Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Applicable Administrative Agent.

“Affiliate” means, with respect to any Person, any other Person, directly or indirectly, controlling or that is controlled by or is under common control with such Person. For the purposes of this definition, “control” means the possession of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise, but excluding any rights under the Restructuring Support Agreement. The terms “controlled” and “controlling” shall have the meaning correlative thereto.

“Agents” means each of the Administrative Agents, the Collateral Agent, the Arrangers and the Bookrunners.

“Agreement” has the meaning specified in the preamble to this Agreement.

“Altamira Yard” means the property in the industrial development zone adjacent to the Altamira Port, with a surface of 232,511.663 square meters and identified as Polygon 1 “D” (Polígono “D”), located in Altamira, State of Tamaulipas, Mexico.

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“Alternate Program” means any program providing for the sale or other disposition of trade or other receivables entered into by the Parent or a Restricted Subsidiary of the Parent on terms customary for such financing transactions, the terms of which arrangement do not impose any recourse or repurchase obligations upon the Parent or any Restricted Subsidiary except for reasonably customary representations, warranties, covenants and indemnities in connection therewith.

“Alternate Program Indebtedness” means, as to any Person at any time, the liabilities of such Person under an Alternate Program that would be outstanding at such time thereunder if the same were structured as a secured lending arrangement rather than a purchase and sale arrangement.

“Alternative Currency” means, at any time, any lawful currency (other than Dollars) of any of the G-20 Countries (or any other currency acceptable to each Administrative Agent in its sole discretion) that at such time is readily available and freely transferable and convertible into Dollars.

“Alternative Currency Cap” means $150,000,000.00.

“Amazon” means the marine construction vessel with IMO number 9698094.

“Amazon Entity” means McDermott (DLV 2000) Chartering, Inc., a Panamanian corporation.

“Amazon Letter of Credit” means the letter of credit number 932438049 issued by Credit Agricole Corporate and Investment Bank New York to back the demand guarantee issued by Credit Agricole Corporate and Investment Bank Sweden Branch in favor of OMP NSF Malta Ltd. for an amount of USD $59,800,000.00 in relation to the Amended and Restated Bareboat Charter contract dated 27 July 2018 by and between OMP NSF Malta Ltd and McDermott (Amazon Chartering), Inc.

“Ancillary Tech Sale” means, unless done in connection with the Technology Business Sale, the disposition of certain assets and equity interests of Lummus Consultants International Ltd. and Lummus Consultants International LLC.

“Ankura” means Ankura Consulting Group, LLC.

“Anti-Corruption Laws” means any laws, rules or regulations applicable to the Parent or its Subsidiaries relating to bribery or corruption, including (a) the United States Foreign Corrupt Practices Act of 1977, as amended, (b) the United Kingdom Bribery Act of 2010, as amended, and (c) any other similar law, rule or regulation in any jurisdiction applicable to the Parent or any of its Subsidiaries.

“Anti-Money Laundering Laws” means any laws or regulations relating to money laundering or terrorist financing in any jurisdiction applicable to the Parent or any of its Subsidiaries.

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“Applicable Administrative Agent” means (a) in respect of the Revolving Facility, the Revolving Administrative Agent and (b) in respect of the Term Facilities, the Term Loan Administrative Agent.

“Applicable Commitments” means (a) in respect of the Revolving Facility, the Revolving Commitments and (b) in respect of the New Money Term Facility, the Term Commitments.

“Applicable Lenders” means (a) with respect to the Revolving Facility, the Revolving Lenders, (b) with respect to the Term Facilities as a whole, the Term Lenders, (c) with respect to the New Money Term Facility, the Term Lenders thereunder and (d) with respect to the Refinanced Term Facility, the Term Lenders thereunder.

“Applicable Lending Office” means, with respect to each Lender, its Domestic Lending Office in the case of a Base Rate Loan, and its Eurodollar Lending Office in the case of a Eurodollar Rate Loan.

“Applicable Reimbursement Obligations” means (a) in respect of the Revolving Letters of Credit, the Revolving Reimbursement Obligations and (b) in respect of the Cash Secured Letters of Credit, the Cash Secured Reimbursement Obligations.

“Applicable Requisite Lenders” means (a) in respect of the Revolving Facility, the Requisite Revolving Lenders and (b) in respect of the Term Facilities, the Requisite Term Lenders.

“Approved Budget” means the 13-week cash flow and Letter of Credit forecast most recently approved pursuant to Section 6.1(d); provided that until the first such delivery under Section 6.1(d), “Approved Budget” means the 13-week cash flow and Letter of Credit forecast delivered to the Lenders before the Effective Date.

“Approved Fund” means, with respect to a Lender, any Fund that is advised or managed by (a) such Lender, (b) an Affiliate of such Lender or (c) an entity or Affiliate of an entity that administers or manages such Lender.

“Arrangers” means each of ABN AMRO Capital USA LLC, Barclays, Credit Agricole, and Royal Bank of Canada, as a lead arranger for the credit facilities evidenced by this Agreement.

“Asset Sale” has the meaning specified in Section 8.4.

“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an Eligible Assignee in substantially the form of Exhibit A or any other form approved by the Applicable Administrative Agent.

“Authorized Officer” means any Responsible Officer or any other Person designated as an “Authorized Officer” or “Authorized Person” of a Loan Party by prior written notice from such Loan Party to each Administrative Agent, including, without limitation, pursuant to any certificate delivered pursuant to Section 3.1.

“Automatic Stay” means the automatic stay under Section 362 of the Bankruptcy Code in respect of the Cases.

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“Auto-Renewal LC” has the meaning set forth in Section 2.7(b).

“Avoidance Actions” has the meaning set forth in Section 2.24(a)(ii).

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101–1532, as may be amended from time to time.

“Bankruptcy Court” shall mean the United States Bankruptcy Court for the Southern District of Texas (or any other court having jurisdiction over the Cases from time to time).

“Barclays” means Barclays Bank PLC.

“Base Rate” means, for any period, a fluctuating interest rate per annum as shall be in effect from time to time, which rate per annum shall be equal to the greatest of the following:

(a) the Prime Rate then in effect;

(b) 0.5% per annum plus the Federal Funds Rate then in effect; and

If the Applicable Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Federal Funds Rate or the Eurodollar Rate for any reason, including the inability of such Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the “Base Rate” for the Facilities over which such Administrative Agent is the Applicable Administrative Agent shall be determined without regard to clause (b) or (c), as applicable, above until the circumstances giving rise to such inability no longer exist; provided that at no time will the Base Rate be deemed to be less than 0% per annum. Any change in the Base Rate due to a change in the Eurodollar Rate, the Federal Funds Rate or the Prime Rate shall be effective on the effective date of such change in the Eurodollar Rate, the Federal Funds Rate or the Prime Rate, respectively.

“Base Rate Loan” means any Loan during any period in which it bears interest based on the Base Rate.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code that is subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

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“Bookrunners” means each of Barclays, as sole bookrunner for the Term Facilities, and Credit Agricole, as sole bookrunner for the Revolving Facility.

“Borrower” has the meaning specified in the preamble to this Agreement.

“Borrowing” means Term Loans to the same Borrower of the same Type and Facility made, converted or continued on the same date and, in the case of Eurodollar Rate Loans, as to which a single Interest Period is in effect.

“Business Combination” shall have the meaning set forth in the Existing First-Lien Credit Agreement.

“Business Day” means a day of the year on which banks are not required or authorized to close in New York City and, if the applicable Business Day relates to notices, determinations, fundings and payments in connection with the Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in Dollar deposits are also carried on in the London interbank market.

“Capital Expenditures” means, with respect to any Person for any period:

(a) the aggregate of amounts that would be reflected as additions to property, plant or equipment on a consolidated balance sheet of such Person and its Subsidiaries prepared in conformity with GAAP, excluding interest capitalized during construction; minus

(b) the aggregate of such amounts used to acquire assets useful in the Parent’s and its Restricted Subsidiaries’ business to the extent such amounts arose from a sale or disposition of equipment described in Section 8.4(c); excluding, however, in the case of the above clause (a), (i) such amounts to the extent financed with the proceeds of Indebtedness permitted to be incurred under Section 8.1(d), (ii) such amounts to the extent financed with insurance or condemnation proceeds received with respect to loss of, damage to or taking of property of the Parent or any of its Subsidiaries, (iii) such amounts that are capitalized and are relating to asset retirement obligations, and (iv) such amounts recovered or recoverable in the price of a contract with a customer of the Parent or a Restricted Subsidiary.

“Capital Lease” means, with respect to any Person, any lease of (or other arrangement conveying the right to use) property by such Person as lessee that would be accounted for as a capital lease on a balance sheet of such Person prepared in conformity with GAAP. Notwithstanding the foregoing, any lease that would have been accounted for as an operating lease on a balance sheet of such Person prepared in conformity with GAAP as in effect on December 31, 2017 shall be deemed not to be a Capital Lease.

“Capital Lease Obligations” means, with respect to any Person, the capitalized amount of all obligations of such Person or any of its Restricted Subsidiaries under Capital Leases, as determined on a consolidated basis in conformity with GAAP.

“Captive Insurance Subsidiary” means each captive insurance company that is a Subsidiary of the Parent. As of the Effective Date, the only Captive Insurance Subsidiaries are (a) Boudin Insurance Company, Ltd., a Bermuda corporation, (b) Woodlands International Insurance Ltd, an Irish corporation, and (c) Lone Star Risk Corporation, a Texas corporation.

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“Carve Out” shall have the meaning assigned to such term in the Interim DIP Order or, following entry of the Final DIP Order, the Final DIP Order.

“Cases” shall have the meaning assigned to such term in the recitals hereto.

“Cash Equivalents” means:

(a) securities issued or fully guaranteed or insured by the United States government or any agency thereof;

(b) certificates of deposit, eurodollar time deposits, overnight bank deposits and bankers’ acceptances of (i) any commercial bank organized under the laws of the United States, any state thereof, the District of Columbia, any foreign bank organized in a country belonging to the OECD, or any branch or agency of any of the foregoing, in each case if such bank has a minimum rating at the time of investment of A-1+ by S&P or P-1 by Moody’s, or (ii) any Revolving Lender or any branch or agency of any Revolving Lender;

(c) commercial paper with a minimum rating of A-1 or AAA by S&P or P-1 or Aaa by Moody’s at the time of acquisition thereof;

(d) demand deposit accounts;

(e) (i) shares of any money market fund that has net assets of not less than $500,000,000.00 and satisfies the requirements of rule 2a-7 under the Investment Company Act of 1940 and (ii) shares of any offshore money market fund that has net assets of not less than $500,000,000.00 and a $1.00 net asset mandate;

(f) fully collateralized repurchase agreements; and

(g) other investments permitted by the McDermott International Investments Co., Inc. Enhanced Liquidity Portfolio Guidelines dated as of July 21, 2008 (as amended and delivered to the Administrative Agents prior to the Effective Date and as may be otherwise amended from time to time in a manner reasonably satisfactory to each Administrative Agent (provided that the foregoing restriction on amendments shall only be in respect of the inclusion of Cash Equivalents pursuant to this clause (g) and shall not be deemed to be a restriction on any amendment thereto)), or any other cash management guidelines approved by the Parent and the Administrative Agents;

provided, however, that the maturities of all obligations of the type described in clauses (a), (b) and (c) above shall not exceed one year from the date of acquisition thereof.

“Cash Management Order” means the Final Order entered by the Bankruptcy Court (i) authorizing the Debtors to continue using their existing cash management system post-petition in the ordinary course, and (ii) granting certain related relief, in form and substance satisfactory to the Administrative Agents and the Collateral Agent (in their capacities as such), the Requisite Revolving Lenders and the Requisite Term Lenders, as the same may be amended, modified or supplemented from time to time with the prior written consent of the Administrative Agents, the Collateral Agent, the Requisite Revolving Lenders and the Requisite Term Lenders.

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“Cash Secured LC Cash Collateral Account” means the cash collateral deposit account or securities account established pursuant to, and subject to the terms of, Section 2.6(b) for the purpose of cash collateralizing the obligations in respect of Cash Secured Letters of Credit.

“Cash Secured LC Cash Collateral Account Balance” means, at any time, the aggregate amount on deposit in the Cash Secured LC Cash Collateral Account.

“Cash Secured LC Cash Collateral Account Control Agreement” means a control agreement dated on or after the Effective Date among one or more Borrowers, the Collateral Agent, and the applicable depositary bank or securities intermediary in form and substance satisfactory to each of the parties thereto.

“Cash Secured LC Cash Coverage Requirement” shall have the meaning assigned to it in Section 2.6(b).

“Cash Secured LC Facility” means the letter of credit facility evidenced by this Agreement and described in Section 2.6.

“Cash Secured LC Issuer” means each Person that becomes a Cash Secured LC Issuer with the approval of the Revolving Administrative Agent and the Borrowers and that has executed an agreement with and in form and substance satisfactory to the Revolving Administrative Agent and the Borrowers to be bound by the terms hereof applicable to Cash Secured LC Issuers.

“Cash Secured LC Obligations” means, at any time, without duplication, the aggregate amount equal to the sum of (a) the Cash Secured Reimbursement Obligations at such time (or, for any Cash Secured Reimbursement Obligations in any Alternative Currency, the Dollar Equivalent thereof at such time) and (b) the Cash Secured LC Undrawn Amounts at such time.

“Cash Secured LC Undrawn Amounts” means, at any time, the aggregate undrawn amount of all Cash Secured Letters of Credit outstanding at such time (or, for any Cash Secured Letter of Credit denominated in an Alternative Currency, the Dollar Equivalent thereof at such time).

“Cash Secured Letter of Credit” means each letter of credit issued pursuant to Section 2.6.

“Cash Secured Reimbursement Obligations” means all outstanding matured reimbursement or repayment obligations payable to any Cash Secured LC Issuer with respect to amounts drawn under Cash Secured Letters of Credit.

“CBI Legacy Projects” means the projects known or referred to as Cameron LNG, Freeport LNG, Duke Asheville, LACC, Calpine, IPL – Eagle Valley, Entergy – St. Charles, Entergy – Lake Charles, Entergy – Montgomery County, Entergy – NOLA, TOTAL Ethane and MOX.

“Centerview” means Centerview Partners LLC.

“Change in Law” means the occurrence, after the Effective Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive

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(whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or United States or foreign regulatory agencies, in each case, pursuant to Basel III or CRR, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Change of Control” means any of the following:

(a) any “person” or “group” (within the meaning of Rule 13d-5 of the Securities Exchange Act of 1934 as in effect on the date hereof) (excluding the Parent and its Subsidiaries and excluding underwriters in the course of their distribution of Voting Stock in an underwritten registered public offering provided such underwriters shall not hold such Stock for longer than five Business Days) (i) shall own directly or indirectly, beneficially or of record, Stock representing more than 40% of either the aggregate ordinary voting power or the aggregate equity value represented by the issued and outstanding Stock in the Parent or (ii) shall have obtained the power (whether or not exercised) to elect a majority of the members of the board of directors of the Parent; or

(b) the Parent shall cease to own and control, directly or indirectly, 100% of the issued and outstanding Voting Stock of any Borrower on a fully diluted basis.

“Chief Transformation Officer” means John Castellano or another Person reasonably acceptable to the Requisite Lenders, in each case, who has been appointed to serve as the Parent’s chief transformation officer and who shall report to the Parent’s chief executive officer and board of directors.

“Closing Date Financial Statements” means (a) audited consolidated balance sheets of the Parent as at the end of each of the 2017 and 2018 Fiscal Years, and related statements of operations, comprehensive income (loss), stockholders’ equity and cash flows of the Parent for each of the 2017 and 2018 Fiscal Years and (b) an unaudited consolidated balance sheet of the Parent as at the end of, and related statements of operations, comprehensive income (loss) and cash flows of the Parent for, each Fiscal Quarter (and the corresponding quarter in the prior Fiscal Year), other than the fourth Fiscal Quarter of the Parent’s Fiscal Year, subsequent to the date of the most recent audited financial statements of the Parent and ended more than 45 days prior to the Effective Date.

“Code” means the Internal Revenue Code of 1986 (or any successor legislation thereto).

“Collateral” means all property and interests in property and proceeds thereof now owned or hereafter acquired by any Loan Party in or upon which a Lien is granted or purported to be granted under any Collateral Document, including, for the avoidance of doubt, pursuant to the DIP Orders. For the avoidance of doubt, “Collateral” shall in no event include Separate Collateral (as defined in the Existing Collateral Agency and Intercreditor Agreement).

“Collateral Account” has the meaning set forth in the Collateral Agency Agreement.

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“Collateral Agency Agreement” means that certain Collateral Agency Agreement dated as of the Effective Date, by and among the Borrowers, the Parent, the other Grantors (as such term is defined therein) party thereto from time to time, Credit Agricole, as Revolving Administrative and Collateral Agent (as such term is defined therein) and Barclays, as Term Loan Administrative Agent (as such term is defined therein).

“Collateral Agent” has the meaning set forth in the Collateral Agency Agreement.

“Collateral Documents” means the DIP Orders, the Pledge and Security Agreement, the Mortgages, and any other document executed and delivered by a Loan Party granting or perfecting a Lien on any of its property to secure payment of the Obligations.

“Collateral Proceeds Distribution Date” has the meaning set forth in Section 13.1.

“Commitment” means, with respect to each Lender, its Revolving Commitment or Term Commitment.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Compliance Certificate” has the meaning specified in Section 6.1(c).

“Confirmation Order” means an order of the Bankruptcy Court entered in the Cases pursuant to section 1129 of the Bankruptcy Code, which order shall confirm the Plan of Reorganization, and shall be in form and substance satisfactory to the Requisite Term Lenders and Requisite Revolving Lenders and, solely with respect to provisions that affect the Administrative Agents (in their capacity as such), satisfactory to the Administrative Agents.

“Consolidated Net Income” means, for any period, the net income (or loss) of the Parent and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

“Constituent Documents” means, with respect to any Person, (a) the articles of incorporation, certificate of incorporation or certificate of formation (or the equivalent organizational documents) of such Person and (b) the by‑laws, operating agreement or partnership agreement (or the equivalent governing documents) of such Person.

“Contaminant” means any material, substance or waste that is classified, regulated or otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant or a pollutant or by other words of similar meaning or regulatory effect, including any petroleum or petroleum‑derived substance or waste, asbestos and polychlorinated biphenyls.

“Contingent Obligation” as applied to any Person, means any Contractual Obligation, contingent or otherwise, of that Person with respect to any Indebtedness of another or other obligation or liability of another, including, without limitation, any such Indebtedness, obligation or liability of another directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business), co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable, including

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Contractual Obligations (contingent or otherwise) arising through any agreement to purchase, repurchase, or otherwise acquire such Indebtedness, obligation or liability or any security therefor, or to provide funds for the payment or discharge thereof (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain solvency, assets, level of income, or other financial condition of another Person, or to make payment on behalf of another Person other than for value received. The amount of any Contingent Obligation shall be equal to the present value of (x) the portion of the stated or determinable obligation so guaranteed or otherwise supported, in the case of known obligations, and (y) the maximum reasonably anticipated liability of such Person in respect of the portion of the obligation so guaranteed or otherwise supported assuming such Person is required to perform thereunder, in all other cases.

“Contractual Obligation” of any Person means any obligation, agreement, undertaking or similar provision of any Security issued by such Person or of any agreement, undertaking, contract, lease, indenture, mortgage, deed of trust or other instrument (excluding the Loan Documents) to which such Person is a party or by which it or any of its property is bound.

“Control Agreement” means an agreement of the type described in Section 5.13 or Section 5.14 of the Pledge and Security Agreement, as applicable.

“Credit Agricole” means Crédit Agricole Corporate and Investment Bank.

“CRR” means Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012.

“Customary Permitted Liens” means, with respect to any Person, any of the following Liens:

(a) Liens with respect to the payment of Taxes, assessments or governmental charges, including any netting or set-off, arising as a result of the existence of a fiscal unity (fiscale eenheid) for Dutch tax purposes, in each case that are not yet due or that are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained to the extent required by GAAP and, in the case of any Collateral, there is no material risk of forfeiture of such property;

(b) Liens of landlords arising by statute or lease contracts entered into in the ordinary course, inchoate, statutory or construction liens, maritime liens and liens of suppliers, mechanics, carriers, materialmen, warehousemen, producers, operators or workmen and other liens imposed by law created in the ordinary course of business for amounts not yet due or that are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained to the extent required by GAAP;

(c) liens, pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance or other types of social security benefits, assessments, statutory obligations or other similar charges or to secure the performance of bids, tenders, sales, leases, contracts (other than for the repayment of borrowed money) or in connection with surety, appeal, customs or performance bonds or other similar instruments;

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(d) encumbrances arising by reason of zoning restrictions and other restrictions on use imposed by any Governmental Authority, easements, licenses, reservations, covenants, rights-of-way, restrictions and other similar encumbrances on the Real Property, and minor defects in the chain of title, not materially interfering with the ordinary conduct of the business conducted at such Real Property by the Parent or any of its Subsidiaries as currently used;

(e) encumbrances arising under leases or subleases of, or other use or occupancy agreements for, the Real Property or to which such leases, subleases or other occupancy agreements are subject, that do not, individually or in the aggregate, materially interfere with the ordinary conduct of the business conducted at such Real Property by the Parent or any of its Subsidiaries as currently conducted;

(f) Liens arising under any indenture or other instrument governing similar term Indebtedness, in each case that is permitted pursuant to the terms of Section 8.1 hereof, to secure obligations in favor of the trustee, agent or representative under such indenture or other instrument; provided that such Liens (i) are solely for the benefit of the trustees, agents or representatives in their capacities as such, (ii) do not secure indebtedness for borrowed money and (iii) are not for the benefit of the holders of or lenders under such Indebtedness;

(g) liens, pledges or deposits relating to escrows established in connection with the purchase or sale of property otherwise permitted hereunder and the amounts secured thereby shall not exceed the aggregate consideration in connection with such purchase or sale (whether established for an adjustment in purchase price or liabilities, to secure indemnities, or otherwise); and

(h) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by the Parent or any Restricted Subsidiary of the Parent, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness.

“Davis Polk” means Davis Polk & Wardwell LLP.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“Debtors” is defined in the recitals hereto.

“Default” means any event that, with the passing of time or the giving of notice or both, would become an Event of Default.

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“Defaulting Lender” means, subject to Section 2.23(b), any Lender that, as determined by the Applicable Administrative Agent:

(a) has failed to perform any of its funding obligations hereunder, including in respect of its Loans or its participations in respect of Letters of Credit, within three Business Days of the date required to be funded by it hereunder unless such Lender notifies the Applicable Administrative Agent and the Parent in writing that such failure is the result of such Lender’s good faith determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied;

(b) has notified the Parent, a Borrower, an Administrative Agent or any Lender that it does not intend to comply with its funding obligations hereunder or has made a public statement to that effect with respect to its funding obligations hereunder or generally under other agreements in which it commits to extend credit (unless such writing or public statement relates to such Lender’s funding obligations hereunder and states that such position is based on such Lender’s good faith determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied);

(c) has failed, within three Business Days after delivery of a request in writing by the Applicable Administrative Agent, to confirm in a manner satisfactory to such Administrative Agent that it will comply with its funding obligations hereunder;

(d) has, or has a direct or indirect parent company that has, other than via an Undisclosed Administration, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or a custodian appointed for it, or (iii) taken any action in furtherance of, or indicated its consent to, approval of or acquiescence in any such proceeding or appointment; or

(e) has, or has a direct or indirect parent company that has, become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority.

“DIP Orders” means the Interim DIP Order and the Final DIP Order, as applicable.

“Disclosure Statement” means any disclosure statement related to the Plan of Reorganization, as may be amended, supplemented, or modified from time to time, including all exhibits and schedules thereto and references therein that relate to the Plan of Reorganization, that is prepared and distributed in accordance with the Bankruptcy Code, and any other applicable law, in each case, in form and substance reasonably satisfactory to the Administrative Agents, the Requisite Term Lenders and the Requisite Revolving Lenders.

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“Disqualified Stock” means, with respect to any Person, any Stock of such Person that, by its terms, or by the terms of any related agreement or of any Security into which it is convertible or puttable or exchangeable (in each case, at the option of the holder thereof) is, or upon the happening of any event or the passage of time would be, required to be redeemed by such Person at the option of the holder thereof, or, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is exchangeable for Indebtedness of such Person at the option of the holder thereof in whole or in part, on or prior to the date that is 5 years and 91 days after the Scheduled Term Maturity Date (other than any preferred stock of the Parent issued and outstanding on the Effective Date and any amendments thereto after the Effective Date that do not add a mandatory redemption or right to exchange into Indebtedness of such Person at the option of the holder thereof in whole or in part on or prior to the date that is 5 years and 91 days after the Scheduled Term Maturity Date).

“Dollar Equivalent” means, with respect to any Alternative Currency at the time of determination thereof, the equivalent of such currency in Dollars determined by using the rate of exchange quoted by (a) in the case the payment and reimbursement of a drawing under a Letter of Credit issued in an Alternative Currency, the Issuer of such Letter of Credit and (b) in all other cases, Credit Agricole in New York, New York at 11:00 a.m. (New York time) on the date of determination to prime banks in New York for the spot purchase in the New York foreign exchange market of such amount of Dollars with such Alternative Currency.

“Dollars” and the sign “$” each mean the lawful money of the United States of America.

“Domestic Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Domestic Lending Office” from time to time to the Parent and the Applicable Administrative Agent.

“Dutch Loan Party” means any Loan Party which is incorporated or established in the Netherlands.

“EBITDA” means, for any period:

(a) Consolidated Net Income for such period; plus

(b) the sum of, in each case to the extent deducted in the calculation of such Consolidated Net Income, but without duplication:

(i) any provision for income Taxes;

(ii) Interest Expense;

(iii) depreciation expense;

(iv) amortization of intangibles or financing or acquisition costs;

(v) any aggregate net loss from the sale, exchange or other disposition of any property, plant or equipment or any Stock of any Restricted Subsidiary by the Parent or its Restricted Subsidiaries;

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(vi) dry dock amortization expense;

(vii) [reserved];

(viii) any fee or other expense (including expenses for counsels and advisors) of the Parent or any Restricted Subsidiary relating to (a) the negotiation, preparation, execution and delivery of this Agreement and the other Loan Documents, or granting or perfecting any Lien purported to be granted thereunder, (b) the Transactions, (c) the execution, delivery and performance by each Loan Party of the “Loan Documents” (as defined in each of the Prepetition Credit Agreements), including any amendments thereto entered into on or prior to the Effective Date, (d) and transactions permitted hereunder, including any asset sales, debt issuances, restructurings and reorganizations involving the Parent or any Restricted Subsidiary and (e) to the extent not duplicative of the foregoing, Restructuring Costs;

(ix) any charges identified in the Approved Budget;

(x) Restructuring Charges;

(xi) Permitted Project Charges through the Fiscal Quarter ending June 30, 2020;

(xii) each of the following to the extent it represents a non-cash charge or a non-cash loss: (A) pension amortization expense and any loss related to pension obligations; (B) stock-based compensation expense; (C) impairment of plant, property, and equipment (other than net losses from sale), intangible assets and goodwill (other than Restructuring Charges); and (D) equity in losses of unconsolidated Affiliates;

(xiii) [reserved]; and

(xiv) legal expense or settlements incurred for any four Fiscal Quarter period;

minus

(c) the sum of, in each case to the extent included in the calculation of such Consolidated Net Income, but without duplication:

(i) any credit for income Tax;

(ii) non-cash interest income;

(iii) any other non-cash gains or income which have been added in determining Consolidated Net Income, including (A) equity in income of nonconsolidated Affiliates and (B) any gain related to pension obligations;

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(iv) the income of any Restricted Subsidiary that is not a Guarantor to the extent that the declaration or payment of dividends or similar distributions or transfers or loans by such Restricted Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, statute, rule or governmental regulation applicable to such Restricted Subsidiary;

(v) [reserved];

(vi) the income of any Unrestricted Subsidiary or any Person (other than a Restricted Subsidiary) in which any other Person (other than the Parent or a Wholly-Owned Restricted Subsidiary or any director or other Person holding qualifying shares in accordance with applicable law) has an interest, except without duplication, (A) to the extent of the amount of dividends or other distributions or transfers or loans actually paid to the Parent or a Wholly-Owned Restricted Subsidiary by such Unrestricted Subsidiary or Person during such period and (B) in the case of Joint Ventures, equity in the earnings of the Joint Venture; and

(vii) any aggregate net gains from the sale, exchange or other disposition of property, plant, or equipment or Stock of a Subsidiary by the Parent or its Subsidiaries.

EBITDA for a consecutive four-quarter period shall be calculated after giving effect, on a pro forma basis, to Acquisitions made by the Parent or its Restricted Subsidiaries during such period and the sale, exchange or other disposition of business units by the Parent or its Restricted Subsidiaries out of the ordinary course of business during such period as if such Acquisitions or sale, exchange or other disposition occurred on the first day of the period so long as the Parent provides to each Administrative Agent reconciliations and other detailed information relating to adjustments to the relevant financial statements (including copies of financial statements of the Person or assets acquired in such Acquisition) used in computing EBITDA (and the relevant elements thereof) sufficient to demonstrate such pro forma calculations in reasonable detail.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is the parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Effective Date” has the meaning set forth in Section 3.1.

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“Eligible Assignee” means (a) with respect to an assignment of a Term Commitment or Term Loans, an Eligible Term Assignee, and (b) with respect to an assignment of a Revolving Commitment or Revolving Letter of Credit Obligations, an Eligible Revolving Assignee.

“Eligible Line of Business” means the businesses and activities engaged in by the Parent and its Subsidiaries on the Original Effective Date (after giving effect to the Business Combination), any other businesses or activities reasonably related or incidental thereto and any other businesses that, when taken together with the existing businesses of the Parent and its Subsidiaries, are immaterial with respect to the assets and liabilities of the Parent and its Subsidiaries, taken as a whole.

“Eligible Revolving Assignee” means (a) a Revolving Lender or any Affiliate of a Revolving Lender, (b) a commercial bank having total assets in excess of $5,000,000,000.00 or (c) a savings and loan association or savings bank organized under the laws of the United States or any State thereof having a net worth, determined in accordance with GAAP, in excess of $250,000,000.00; provided that the term Eligible Revolving Assignee shall exclude any competitor of the Parent or any of its Subsidiaries that is primarily engaged in an Eligible Line of Business and that has been specifically identified as such in writing by the Borrowers to the Revolving Administrative Agent, which exclusion shall not apply retroactively to exclude or disqualify any parties that have previously acquired an assignment or participation interest in a Revolving Commitment or Revolving Letter of Credit Obligations.

“Eligible Term Assignee” means (a) a Lender or any Affiliate of a Lender or an Approved Fund with respect to a Lender and (b) any other Person (other than, the case of each of clauses (a) and (b), (i) a natural person, or (ii) the Parent, any Subsidiary of the Parent or any other Affiliate of the Parent); provided that the term Eligible Term Assignee shall exclude any competitor of the Parent or any of its Subsidiaries that is primarily engaged in an Eligible Line of Business and that has been specifically identified as such in writing by the Borrowers to the Term Loan Administrative Agent, which exclusion shall not apply retroactively to exclude or disqualify any parties that have previously acquired an assignment or participation interest in a Term Commitment or Term Loan.

“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed to by, the Parent, any of its Subsidiaries, any Guarantor or any of their respective ERISA Affiliates.

“Environmental Laws” means all applicable Requirements of Law now or hereafter in effect and as amended or supplemented from time to time, relating to pollution or the regulation and protection of human health, safety, the environment or natural resources, including the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. § 9601 et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C. § 1801 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. § 136 et seq.); the Resource Conservation and Recovery Act, as amended (42 U.S.C. § 6901 et seq.); the Toxic Substance Control Act, as amended (15 U.S.C. § 2601 et seq.); the Clean Air Act, as amended (42 U.S.C. § 7401 et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C. § 1251 et seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. § 651 et seq.); the Safe Drinking Water Act, as amended (42 U.S.C. § 300f et seq.); the Oil Pollution Act of 1990; and each of their state and local counterparts or equivalents.

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“Environmental Liabilities and Costs” means, with respect to any Person, all liabilities, obligations, responsibilities, Remedial Actions, losses, damages, punitive damages, consequential damages, treble damages, costs and expenses (including all fees, disbursements and expenses of counsel, experts and consultants and costs of investigation and feasibility studies), fines, penalties, sanctions and interest incurred as a result of any claim or demand by any other Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute and arising under any Environmental Law, Permit, order or agreement with any Governmental Authority or other Person, in each case relating to and resulting from the past, present or future operations of, or ownership of property by, such Person or any of its Subsidiaries.

“Environmental Lien” means any Lien in favor of any Governmental Authority pursuant to any Environmental Law.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control or treated as a single employer with the Parent, any of its Subsidiaries or any Guarantor within the meaning of Section 414(b), (c), (m) or (o) of the Code. Any former ERISA Affiliate of the Parent, any of its Subsidiaries or any Guarantor shall continue to be considered an ERISA Affiliate of the Parent, such Subsidiary or such Guarantor within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of the Parent, such Subsidiary or such Guarantor and with respect to liabilities arising after such period for which the Parent, such Subsidiary or such Guarantor could be liable under the Code or ERISA.

“ERISA Event” means (a) a reportable event described in Section 4043(b) or 4043(c) of ERISA with respect to a Title IV Plan, (b) the withdrawal of the Parent, any of its Subsidiaries, any Guarantor or any ERISA Affiliate from a Title IV Plan subject to Section 4063 or Section 4064 of ERISA during a plan year in which any such entity was a “substantial employer” (as defined in Section 4001(a) (2) of ERISA) or the termination of any such Title IV Plan resulting, in either case, in a material liability to any such entity, (c) the “complete or partial withdrawal” (within the meaning of Sections 4203 and 4205 of ERISA) of the Parent, any of its Subsidiaries, any Guarantor or any ERISA Affiliate from any Multiemployer Plan where the Withdrawal Liability could reasonably be expected to exceed $15,000,000.00 (individually or in the aggregate), (d) notice of reorganization, insolvency, intent to terminate or termination of a Multiemployer Plan is received by the Parent, any of its Subsidiaries, any Guarantor or any ERISA Affiliate, (e) the filing of a notice of intent to terminate a Title IV Plan under Section 4041(c) of ERISA or the treatment of a plan amendment as a termination under Section 4041(e) of ERISA, where such termination constitutes a “distress termination” under Section 4041(c) of ERISA, (f) the institution of proceedings to terminate a Title IV Plan by the PBGC, (g) the failure to make any required contribution to a Title IV Plan or Multiemployer Plan or to meet the minimum funding standard of Section 412 of the Code (in either case, whether or not waived in accordance with Section 412(c) of the Code), (h) the determination that any Title IV Plan is in “at-risk status” (within the meaning of Section 430 of the Code or Section 303 of ERISA) or that a Multiemployer Plan is in “endangered status”, “seriously endangered” or “critical status” (within the meaning of Section 432 of the Code or Section 305 of ERISA), (i) any other event or condition that might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or the

-18- imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, (j) the imposition of liability on the Parent, any of its Subsidiaries, any Guarantor or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA, (k) the imposition of a Lien upon the Parent, any of its Subsidiaries, any Guarantor or any ERISA Affiliate pursuant to Section 436(f) or Section 430(k) of the Code or Section 303(k) of ERISA, (l) the occurrence of an act or omission which could reasonably be expected to give rise to the imposition on the Parent, any Borrower, any of their respective Subsidiaries, any Guarantor or any of their respective ERISA Affiliates of fines, penalties, Taxes or related charges under Chapter 43 of the Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any “employee pension plan” (within the meaning of Section 3(2) of ERISA) or (m) receipt from the IRS of notice of the failure of any employee pension plan that is intended to be qualified under Section 401(a) of the Code to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any such employee pension plan to qualify for exemption from taxation under Section 501(a) of the Code.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“Eurodollar Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Eurodollar Lending Office” from time to time to the Borrowers and the Applicable Administrative Agent.

“Eurodollar Rate” means, for any Interest Period, a fluctuating rate per annum equal to (x) the rate per annum determined by the Applicable Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the beginning of such Interest Period to be the London interbank offered rate for such Interest Period, as currently published on the applicable Reuters screen page (or such other commercially available source providing such quotation of such rate as may be designated by the Applicable Administrative Agent from time to time) for a period equal to such Interest Period, or (y) if the rate in clause (x) above does not appear on such page or service or if such page or service is not available, the rate per annum determined by the Applicable Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the beginning of such Interest Period to be the offered rate for a period equal to such Interest Period on such other page or other service which displays an average London interbank offered rate (the preceding clauses (x) and (y), the “LIBO Screen Rate”); provided that at no time will the Eurodollar Rate be deemed to be (a) with respect to the Term Facilities, less than 1.00% per annum or (b) with respect to the Revolving Facility, less than 0% per annum.

“Eurodollar Rate Loan” means any Loan that bears interest based on the Eurodollar Rate.

“Event of Default” has the meaning specified in Section 9.1.

“Excepted Consent” means, at any time, any consent, authorization, approval, filing or registration with or from any non-U.S. Governmental Authority that is listed on Schedule 7.14 with respect to which the time periods set forth opposite each such item or action on Schedule 7.14 (or such longer period permitted by each Administrative Agent in its sole discretion) have not expired.

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“Excluded Subsidiary” means, at any time, (a) any non-U.S. Subsidiary if at such time such Subsidiary’s Guarantee is prohibited by (x) any Governmental Authority with authority over such non-U.S. Subsidiary or (y) applicable law or regulation or analogous restriction, or such Subsidiary’s Guarantee would result in a substantial risk to the officers or directors of such Subsidiary of a civil or criminal liability, (b) any non-U.S. Subsidiary under circumstances where each of the Administrative Agents determines in its sole discretion (in consultation with the Parent and the Requisite Lenders) that the cost, burden, difficulty or consequence of providing such Guarantee at such time is excessive in relation to the value afforded thereby, and (c) McDermott Arabia Company Limited, McDermott Trinidad Ltd., the North Ocean Entity, and McDermott Asia Pacific Sdn. Bhd. If any Subsidiary of the Parent is an Excluded Subsidiary solely as a result of clause (a) of the preceding sentence, the Parent shall use commercially reasonable efforts (as determined by the Administrative Agents in their sole discretion) to obtain the relevant governmental or third party consent or other authority that would permit such Subsidiary to become a Guarantor or to mitigate any such risk of liability in connection therewith.

“Excluded Swap Obligations” means, with respect to any Loan Party (other than the Parent and the Borrowers), any Swap Obligation entered into after the Effective Date if, and to the extent that, after giving effect to the keepwell agreement in Section 2 of the Guaranty Agreement and any other “keepwell, support, or other agreement” among the Loan Parties for purposes of Section 1a(18)(A)(v) (II) of the Commodity Exchange Act, all or a portion of the Guarantee of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Loan Party or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation entered into after the Effective Date arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Lender, Issuer or Administrative Agent or required to be withheld or deducted from a payment to a Lender, Issuer or Administrative Agent: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Lender, Issuer or Administrative Agent being organized under the laws of, or having its principal office or, in the case of any Lender, its Applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes (other than U.S. withholding Taxes to the extent such Taxes (A) would not be imposed or payable (including, without limitation, as the result of an applicable income Tax treaty that otherwise would reduce or eliminate the Tax) if any Borrower was a “United States person” within the meaning of Section 7701(a)(30) of the Code or (B) are imposed with respect to payments from any United States person to the Borrowers) imposed on payments to or for the account of such Lender under the Loan Documents pursuant to a law in effect on the Effective Date or the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Parent or a Borrower) or (ii) such Lender changes its lending office, except in each

-20- case to the extent that, pursuant to Section 2.19, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Lender, Issuer or Administrative Agent’s failure to comply with Section 2.19(e) (other than if such failure is due to a change in any applicable Requirement of Law occurring after the date on which a form originally was required to be provided) and (d) any U.S. federal withholding Taxes imposed under FATCA.

“Existing Collateral Agency and Intercreditor Agreement” means the Collateral Agency and Intercreditor Agreement (as defined in the Existing First-Lien Credit Agreement).

“Existing First-Lien Agent” means each of (a) Credit Agricole, in its capacity as revolving and letter of credit administrative agent under the Existing First-Lien Credit Agreement, or any successor in such capacity and (b) Barclays, in its capacity as term loan administrative agent under the Existing First-Lien Credit Agreement, or any successor in such capacity.

“Existing First-Lien Credit Agreement” means that certain Credit Agreement dated as of May 10, 2018 (as amended, amended and restated, supplemented or otherwise modified from time to time prior to the Petition Date), among the Parent, as guarantor, the Borrowers, as borrowers, the lenders and issuers party thereto, Credit Agricole, as revolving and letter of credit administrative agent, and Barclays, as term loan administrative agent.

“Existing LC Agreement Agent” means Barclays in its capacity as administrative agent under the Existing Letter of Credit Agreement, or any successor in such capacity.

“Existing Letter of Credit Agreement” means that certain Letter of Credit Agreement dated as of October 30, 2018 (as amended, amended and restated, supplemented or otherwise modified from time to time prior to the Petition Date), among the Parent, the Borrowers, as applicant, the participants and issuers party thereto, and Barclays, as administrative agent.

“Existing Senior Indebtedness” means, at any time, any and all Indebtedness and other obligations of the Loan Parties outstanding under and pursuant to the documentation relating to the Prepetition Credit Facilities or the Lloyds Facility at such time.

“Existing Super-Priority Agent” means each of (a) Credit Agricole, in its capacity as revolving administrative agent and collateral agent under the Existing Super-Priority Credit Agreement, or any successor in such capacity, and (b) Barclays, in its capacity as term loan administrative agent under the Existing Super-Priority Credit Agreement, or any successor in such capacity.

“Existing Super-Priority Collateral Agency Agreement” means the “Collateral Agency Agreement” as defined in the Existing Super-Priority Credit Agreement.

“Existing Super-Priority Collateral Documents” means the “Collateral Documents” as defined in the Existing Super-Priority Credit Agreement.

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“Existing Super-Priority Credit Agreement” means that certain Superpriority Senior Secured Credit Agreement dated as of October 21, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time prior to the Petition Date), among the Parent, as guarantor, the Borrowers, as borrowers, the lenders and issuers (collectively, the “Super-Priority Lenders”) party thereto, Credit Agricole, as revolving administrative agent, and Barclays, as term loan administrative agent.

“Existing Super-Priority Guaranty Agreement” means the “Guaranty Agreement” as defined in the Existing Super-Priority Credit Agreement.

“Existing Super-Priority Letters of Credit” means, at any time, each “Letter of Credit” (as defined in the Existing Super- Priority Credit Agreement) issued and outstanding under the Existing Super-Priority Credit Agreement.

“Existing Super-Priority Term Loans” means the “Term Loans” as defined in the Existing Super-Priority Credit Agreement.

“Exposure” means, collectively, Revolving Exposure and Term Exposure.

“Facility” means each of the Revolving Facility, the New Money Term Facility, the Refinanced Term Facility and the Cash Secured LC Facility.

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller, in a transaction not involving distress or necessity of either party; provided that for any determination of Fair Market Value for a Mortgaged Vessel in connection with an Asset Sale to be made pursuant to Section 8.4(g), (h), or (i) in which the Fair Market Value of the properties disposed of in such Asset Sale exceeds $1,000,000.00, the Borrowers shall provide evidence reasonably satisfactory to each Administrative Agent with respect to the calculation of such Fair Market Value; provided that if any appraisal of a marine vessel contains a range of values for such marine vessel, the “Fair Market Value” of such marine vessel shall be deemed to be an amount equal to the midpoint of such range.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted by a Governmental Authority pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities entered into in connection with the implementation of the foregoing.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the immediately preceding Business Day as so published on the next succeeding Business Day; provided, further, that if no such rate is published on such next succeeding Business Day, the Applicable Administrative Agent may, in its discretion, determine the Federal Funds Rate for such day by reference to the average rate charged to the Applicable Administrative Agent on such day on such transactions as determined by such Administrative Agent.

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“Federal Reserve Board” means the Board of Governors of the United States Federal Reserve System, or any successor thereto.

“FEMA” has the meaning set forth in Section 7.5.

“Final DIP Order” means the order of the Bankruptcy Court that is not subject to a stay and has not been reversed or vacated or otherwise modified or amended without the consent of the the Administrative Agents and the Collateral Agent (in each case in their capacities as such), and the Requisite Revolving Lenders and the Requisite Term Lenders, (a) authorizing the Debtors, on a final basis, to (i) obtain post-petition secured financing pursuant to this Agreement and (ii) use cash collateral during the pendency of the Cases, and (b) granting certain related relief, in substantially the form of the Interim Order and in form and substance satisfactory to the Administrative Agents and the Collateral Agent (in each case in their capacities as such), the Requisite Revolving Lenders and the Requisite Term Lenders, as the same may be amended, modified or supplemented from time to time with the prior written consent of the Administrative Agents (in their capacities as such), the Requisite Revolving Lenders and the Requisite Term Lenders.

“Final Facility Effective Date” has the meaning set forth in Section 3.2.

“Final New Money Term Commitment” means, with respect to each Term Lender, the commitment of such Term Lender to make term loans to the Borrowers pursuant to Section 2.1(a)(ii) in an aggregate principal amount not to exceed the amount set forth opposite such Term Lender’s name on Part B of Schedule III , as such amount may be adjusted from to time pursuant to this Agreement. “Final New Money Term Commitments” means the aggregate of such commitments for all Term Lenders, and the aggregate amount of the Final New Money Term Commitments as of the Effective Date is $650,000,000.00.

“Final New Money Term Loan” has the meaning set forth in Section 2.1(a)(ii).

“Final Order” means an order or judgment of the Bankruptcy Court, or court of competent jurisdiction with respect to the subject matter, as entered on the docket in any Case or the docket of any court of competent jurisdiction, and as to which the time to appeal, or seek certiorari or move for a new trial, reargument, or rehearing has expired and no appeal or petition for certiorari or other proceedings for a new trial, reargument, or rehearing has been timely taken, or as to which any appeal that has been taken or any petition for certiorari that has been or may be timely filed has been withdrawn or resolved by the highest court to which the order or judgment was appealed or from which certiorari was sought or the new trial, reargument, or rehearing was denied, resulted in no stay pending appeal of such order, or has otherwise been dismissed with prejudice; provided that the possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy Rules, may be filed with respect to such order will not preclude such order from being a Final Order.

“Final Satisfaction Date” shall be the date on which each of the following have occurred: (a) all Obligations have been paid or otherwise satisfied in full in cash (other than in respect of any contingent indemnification or expense reimbursement obligations for which no claim has been asserted), (b) all Commitments have terminated or expired and the obligations of the Issuers to issue Letters of Credit hereunder have terminated, and (c) each Letter of Credit has expired or has been cash collateralized, back-stopped or otherwise secured to the satisfaction of the applicable Issuers.

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“Financial Letter of Credit” means a Letter of Credit other than a Performance Letter of Credit.

“Financial Statements” means the financial statements of the Parent and its Subsidiaries delivered in accordance with Section 3.1(b) or Section 6.1(a) or (b).

“Fiscal Quarter” means the fiscal quarter of the Parent ending on March 31, June 30, September 30 or December 31 of the applicable Fiscal Year, as applicable.

“Fiscal Year” means the fiscal year of the Parent, which is the same as the calendar year.

“Flood Hazard Property” means any Mortgaged Property on which a “Building” or a “Manufactured (Mobile) Home” (in each case, as defined in the applicable Flood Insurance Regulation) is located that is in an area designated by the Federal Emergency Management Agency as having special flood or mudslide hazards.

“Fronting Exposure” means, at any time there is a Defaulting Lender, with respect to any Revolving Issuer, such Defaulting Lender’s Ratable Portion of the outstanding Revolving Letter of Credit Obligations of such Revolving Issuer, other than Revolving Letter of Credit Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Revolving Lenders or cash collateralized in accordance with the terms hereof.

“Fronting Fee” means the Fronting Fee specified in Section 2.15(c)(i).

“FTI” means FTI Consulting, Inc.

“Fund” means any Person (other than a natural person) that is or will be engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course.

“Funded Portion” means, as to any Term Lender, the aggregate principal amount of Term Loans held by such Term Lender at such time divided by the aggregate principal of all Term Loans at such time.

“G-20 Countries” means Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States of America.

“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time.

“Global Intercompany Note” means the global intercompany note substantially in the form of Exhibit G hereto.

“Governmental Authority” means any nation, sovereign or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, including any central bank (including any supra-national bodies such as the European Union or the European Central Bank).

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“Guarantee” means (a) in the case of the Parent, each Borrower and each other Subsidiary Guarantor, the guarantees of the Obligations contained in the Guaranty Agreement or any other Loan Document and (b) additionally in the case of the Parent, the guarantee of the Obligations contained in Article XII of this Agreement.

“Guarantor” means the Parent and each Subsidiary of the Parent (including each Borrower) that has guaranteed the Obligations pursuant to the Guaranty Agreement, until such time as such Subsidiary ceases to guarantee the Obligations pursuant to the terms of any such agreement. As of the Effective Date, the Parent, each Borrower and each Subsidiary of the Parent listed on Schedule V hereto is a Guarantor.

“Guaranty Agreement” means, collectively, (a) the Guaranty Agreement executed by the Borrowers and certain other Subsidiary Guarantors in favor of the Collateral Agent on the Effective Date and (b) any other guaranty agreement executed and delivered by any Restricted Subsidiary in form and substance satisfactory to each Administrative Agent, pursuant to which such Restricted Subsidiary makes a Guarantee.

“Guaranty Obligation” means, as applied to any Person, without duplication, any direct or indirect liability, contingent or otherwise, of such Person with respect to any Indebtedness of another Person, if the purpose of such Person in incurring such liability is to provide assurance to the obligee of such Indebtedness that such Indebtedness will be paid or discharged, or that any agreement relating thereto will be complied with, or that any holder of such Indebtedness will be protected (in whole or in part) against loss in respect thereof, including (a) the direct or indirect guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co‑making, discounting with recourse or sale with recourse by such Person of Indebtedness of another Person and (b) any liability of such Person for Indebtedness of another Person through any agreement (contingent or otherwise) (i) to purchase, repurchase or otherwise acquire such Indebtedness or any security therefor, or to provide funds for the payment or discharge of such Indebtedness (whether in the form of a loan, advance, stock purchase, capital contribution or otherwise), (ii) to maintain the solvency or any balance sheet item, level of income or financial condition of another Person, (iii) to make take‑or‑pay or similar payments, regardless of non‑performance by any other party or parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against loss or (v) to supply funds to, or in any other manner invest in, such other Person (including to pay for property or services irrespective of whether such property is received or such services are rendered), if (and only if) in the case of any agreement described under clause (b) (i), (ii), (iii), (iv) or (v) above the primary purpose or intent thereof is to provide assurance to the obligee of Indebtedness of any other Person that such Indebtedness will be paid or discharged, or that any agreement relating thereto will be complied with, or that any holder of such Indebtedness will be protected (in whole or in part) against loss in respect thereof. The amount of any Guaranty Obligation shall be equal to the amount of the Indebtedness so guaranteed or otherwise supported or, if such amount is not stated or otherwise determinable, the maximum reasonable anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. For the avoidance of doubt, the term “Guaranty Obligation” shall not include reimbursement or other obligations with respect to unmatured or undrawn, as applicable, Performance Guarantees.

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“Hedging Contracts” means all Interest Rate Contracts, foreign exchange contracts, currency swap or option agreements, forward contracts, commodity swap, purchase or option agreements, other commodity price hedging arrangements, and all other similar agreements or arrangements designed to mitigate the risks of any Person arising from fluctuations in interest rates, currency values or commodity prices.

“Hedging Obligations” has the meaning given to such term in the definition of “Obligations”.

“Indebtedness” of any Person means, without duplication:

(a) all indebtedness of such Person for borrowed money;

(b) all obligations of such Person evidenced by promissory notes, bonds, debentures or similar instruments;

(c) all matured reimbursement obligations with respect to letters of credit, bankers’ acceptances, surety bonds, performance bonds, bank guarantees, and other similar obligations;

(d) all other obligations with respect to letters of credit, bankers’ acceptances, surety bonds, performance bonds, bank guarantees and other similar obligations, whether or not matured, other than unmatured or undrawn, as applicable, obligations with respect to Performance Guarantees;

(e) all indebtedness for the deferred purchase price of property or services, other than trade payables incurred in the ordinary course of business;

(f) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement (other than operating leases) with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property);

(g) all Capital Lease Obligations of such Person;

(h) all Guaranty Obligations of such Person;

(i) all obligations of such Person to purchase, redeem, retire, defease or otherwise acquire for value any Disqualified Stock of such Person, valued, in the case of redeemable preferred Disqualified Stock, at the greater of its voluntary liquidation preference and its involuntary liquidation preference plus accrued and unpaid dividends;

(j) net payments that such Person would have to make in the event of a termination of the Hedging Contracts of such Person if such termination occurred on the date Indebtedness of such Person is being determined;

(k) all Alternate Program Indebtedness of such Person; and

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(l) all Indebtedness of the type referred to above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and general intangibles) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, but amounts of such Indebtedness shall be the lesser of the value of the property owned by such Person securing such Indebtedness and the principal amount of such Indebtedness.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation, limited liability company or other entity in which the liability of the joint venturer is limited) in which such Person is a general partner or a joint venturer, except to the extent such Person’s liability for such Indebtedness is otherwise limited by applicable law or contract. For the avoidance of doubt, the term “Indebtedness” shall not include reimbursement or other obligations with respect to unmatured or undrawn, as applicable, Performance Guarantees.

“Indemnified Matters” has the meaning specified in Section 11.4(a).

“Indemnitee” has the meaning specified in Section 11.4(a).

“Information” means all information received from the Parent or any of its Subsidiaries relating to the Parent or any of its Subsidiaries or any of their respective businesses after the date hereof that is posted to IntraLinks, DebtDomain, SyndTrak or a similar service or otherwise clearly identified at the time of delivery as confidential other than any such information that is available to each Administrative Agent, any Lender or any Issuer on a nonconfidential basis prior to disclosure by the Parent or any of its Subsidiaries.

“Insurance/Condemnation Event” means any casualty or other insured damage to, or any taking under the power of eminent domain or by condemnation or similar proceeding of, or any disposition under a threat of such taking of, all or any part of any assets of the Parent or any Restricted Subsidiary, resulting in aggregate Net Cash Proceeds exceeding $10,000,000.00.

“Interest Expense” means, for the Parent for any period, total interest expense of the Parent and its Restricted Subsidiaries for such period, as determined on a consolidated basis in conformity with GAAP and including, in any event (without duplication for any period or any amount included in any prior period):

(a) net costs under Interest Rate Contracts for such period;

(b) any commitment fee (including the Revolving Commitment Fees) accrued, accreted or paid by such Person during such period;

(c) any fees and other obligations (other than reimbursement obligations) with respect to letters of credit (including the Letter of Credit Participation Fees) and bankers’ acceptances (whether or not matured) accrued, accreted or paid by such Person for such period, plus (without duplication) any such amounts that are included in the cost of operations on the consolidated statement of operations of such Person prepared in conformity with GAAP; and

(d) the Fronting Fee.

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For purposes of the foregoing, interest expense shall (i) be determined after giving effect to any net payments made or received by the Parent or any Subsidiary with respect to interest rate Hedging Contracts and (ii) exclude interest expense accrued, accreted or paid by the Parent or any Subsidiary of the Parent to the Parent or any Subsidiary of the Parent. Notwithstanding the foregoing, the interest component of all payments associated with any lease that would have been accounted for as an operating lease on a balance sheet of such Person prepared in conformity with GAAP as in effect on the Effective Date and amounts included for any Fiscal Quarter attributable to any upfront fees and similar one-time fees paid in connection with this Agreement shall each be excluded from Interest Expense.

“Interest Period” means, in the case of any Eurodollar Rate Loan, initially, the period commencing on the date such Eurodollar Rate Loan is made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate Loan and ending one, two, three or six months thereafter, as selected by a Borrower in its Notice of Borrowing or Notice of Conversion or Continuation given to the Applicable Administrative Agent pursuant to Section 2.2 or 2.14, and thereafter, if such Loan is continued, in whole or in part, as a Eurodollar Rate Loan pursuant to Section 2.14, a period commencing on the last day of the immediately preceding Interest Period therefor and ending one, two, or three months thereafter, as selected by a Borrower in its Notice of Conversion or Continuation given to the Applicable Administrative Agent pursuant to Section 2.14; provided, however, that no Interest Period shall extend beyond the Term Maturity Date; provided, further, however, that all of the foregoing provisions relating to Interest Periods in respect of Eurodollar Rate Loans are subject to the following:

(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless the result of such extension would be to extend such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day;

(ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month;

(iii) the Borrower may not select any Interest Period in respect of Loans having an aggregate principal amount of less than $5,000,000.00; and

(iv) there shall be outstanding at any one time no more than 10 Interest Periods in the aggregate.

“Interest Rate Contracts” means all interest rate swap agreements, interest rate cap agreements and interest rate collar agreements.

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“Interim DIP Order” means the interim order entered by the Bankruptcy Court, in the form set forth in Exhibit D, (i) authorizing, on an interim basis, the Debtors to (a) obtain post-petition secured financing pursuant to this Agreement and (b) use cash collateral during the pendency of the Cases, and (ii) granting certain related relief, in form and substance satisfactory to the Administrative Agents and the Collateral Agent (in each case in their capacities as such), the Requisite Revolving Lenders and the Requisite Term Lenders, as the same may be amended, modified or supplemented from time to time with the prior written consent of the Administrative Agents and the Collateral Agent (in each case in their capacities as such), the Requisite Revolving Lenders and the Requisite Term Lenders.

“Interim New Money Term Commitment” means, with respect to each Term Lender, the commitment of such Term Lender to make term loans to the Borrowers pursuant to Section 2.1(a) in an aggregate principal amount not to exceed the amount set forth opposite such Term Lender’s name on Part A of Schedule III, as such amount may be adjusted from to time pursuant to this Agreement. “Interim New Money Term Commitments” means the aggregate of such commitments for all Term Lenders, and the aggregate amount of the Interim New Money Term Commitments as of the Effective Date is $550,000,000.00.

“Interim New Money Term Loan” has the meaning set forth in Section 2.1(a)(i).

“Inventory” has the meaning specified in the Pledge and Security Agreement.

“Investment” means, with respect to any Person, any investment of such Person so classified under GAAP, and whether or not so classified, any loan, advance, extension of credit that constitutes Indebtedness of the Person to whom it is extended, any direct or indirect guaranty in respect of the Indebtedness of another Person by such Person, or contribution of capital by such Person, and any stocks, bonds, mutual funds, partnership interests, notes (including structured notes), debentures or other securities owned by such Person; excluding, however, (a) capital expenditures of such Person determined in accordance with GAAP, (b) prepayments or deposits made in the ordinary course of business, (c) accounts receivable and similar items made or incurred in the ordinary course of business and (d) the payment of the operating expenses and capital expenditures of a Restricted Subsidiary, so long as such payment is in the ordinary course of business and consistent with past business practices with respect to such Subsidiary prior to the date hereof. For the avoidance of doubt, the term “Investment” shall not include reimbursement or other obligations with respect to unmatured or undrawn, as applicable, Performance Guarantees.

“IRS” means the Internal Revenue Service of the United States or any successor thereto.

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of Issuance).

“Issue” means, with respect to any Letter of Credit, to issue, extend the expiry of, renew (but excluding any auto-renewal thereof) or increase the maximum stated amount (including by deleting or reducing any scheduled decrease in such maximum stated amount) of, such Letter of Credit. The terms “Issued” and “Issuance” shall have a corresponding meaning.

“Issuer” means any Revolving Issuer or any Cash Secured LC Issuer.

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“Joint Venture” means any Person that is not a Subsidiary of the Parent and (a) in which the Parent or any Subsidiary of the Parent, directly or indirectly, owns at least 25% of the Stock or Stock Equivalents of such Person or (b) in which the Parent or any Subsidiary of the Parent owns at least a 25% interest in such joint venture if such Person is unincorporated and such Person’s financial information is consolidated or proportionally consolidated with the Parent in accordance with GAAP. As of the Effective Date, the Persons listed on Schedule 1.1 are Joint Ventures.

“Junior Priority Indebtedness” means any Indebtedness for borrowed money of the Parent or any Restricted Subsidiary (other than the Obligations and the Existing Senior Indebtedness).

“LACC Letter of Credit” means the Letter of Credit anticipated on the Effective Date to be issued to backstop that certain letter of credit issued under the Lloyds Facility on 12/23/2015 for the benefit of LACC LLC (# NYSB2015222) that was extended on 1/10/2020 until 5/31/2020.

“LC Cap” has the meaning set forth in Section 2.4(b)(iii).

“LC Backstop Participant” means any Person that holds a participation in the Revolving Commitments and Revolving Exposure of any Revolving Lender, provided that such Person or any of its Affiliates is, or at any time during the term of this Agreement was, a party to the Restructuring Support Agreement.

“LC Facilities Cash Collateral Account” means the cash collateral deposit account or securities account established pursuant to, and subject to the terms of, Section 2.6(b) for the purpose of cash collateralizing the Obligations under the Revolving Facility.

“LC Facilities Cash Collateral Account Control Agreement” means the Securities Account Control Agreement dated as of the Effective Date among one or more Borrowers, the Collateral Agent, the applicable depositary bank or the securities intermediary with respect to the LC Facilities Cash Collateral Account.

“Leases” means, with respect to any Person, all of the leasehold estates in Real Property of such Person, as lessee, as such may be amended, supplemented or otherwise modified from time to time.

“Lender” means each Revolving Lender and each Term Lender.

“Letter of Credit” means each Revolving Letter of Credit issued or deemed issued hereunder and each Cash Secured Letter of Credit.

“Letter of Credit Participation Fee” has the meaning specified in Section 2.15(c)(ii).

“Letter of Credit Reimbursement Agreement” has the meaning specified in Section 2.7(e).

“Letter of Credit Request” has the meaning specified in Section 2.7(c).

“LIBO Screen Rate” has the meaning specified in the definition of “Eurodollar Rate”.

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“Lien” means any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any Indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement, the interest of a lessor under a Capital Lease and any financing lease having substantially the same economic effect as any of the foregoing.

“Liquidity Lender Steering Committee” shall have the meaning set forth in the Restructuring Support Agreement.

“Lloyds” means Lloyds Bank Corporate Markets plc.

“Lloyds Facility” means that certain Amended and Restated Master Agreement for Stand-by Letters of Credit, dated May 10, 2018 (as the same may be amended, amended and restated, supplemented, extended, or otherwise modified from time to time), among Lloyds and certain of the Loan Parties.

“Loan” means any loan made or deemed made by any Lender pursuant to this Agreement.

“Loan Documents” means, collectively, this Agreement, the Notes (if any), the Guaranty Agreement, the Collateral Documents, the Collateral Agency Agreement, the Global Intercompany Note, each fee letter entered into by any Loan Party in connection with this Agreement, any agreement executed and delivered, or authorized, by any Loan Party creating or perfecting rights in cash collateral pursuant to this Agreement and each certificate, agreement or document executed by a Loan Party and delivered to any Administrative Agents, the Collateral Agent or any Lender in connection with or pursuant to any of the foregoing.

“Loan Party” means each Borrower and each Guarantor.

“Make-Whole Amount” has the meaning set forth in Section 2.1(b).

“Material Adverse Effect” means a material adverse effect upon (a) the condition (financial or otherwise), business, results of operations or properties of the Borrowers and the Guarantors taken as a whole, other than by virtue of the commencement of the Cases and the events and circumstances giving rise thereto; (b) the perfection or priority of the Liens granted pursuant to the Collateral Documents; (c) the Loan Parties’ ability to perform their respective obligations under the Loan Documents; or (d) the validity, binding effect or enforceability against the Loan Parties of the Loan Documents or the rights or remedies of any Administrative Agent, the Collateral Agent, the Lenders or the Issuers thereunder.

“Material Intellectual Property” means intellectual property owned by the Parent or any of its Wholly-Owned Subsidiaries that is material to the business operations of the Parent and its Restricted Subsidiaries, taken as a whole.

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“Material Subsidiary” means, with respect to any date of determination, (a) a Restricted Subsidiary contributing (or, if such Restricted Subsidiary was not a Subsidiary of the Parent for the entire Fiscal Year immediately preceding such date, that would have contributed) more than (i) 2.5% of the EBITDA or (ii) 2.5% of total assets (as determined in accordance with GAAP) of the Parent and its Restricted Subsidiaries on a consolidated basis, in each case in the Fiscal Year immediately preceding such date or (b) two or more Restricted Subsidiaries contributing (or, if any such Restricted Subsidiary was not a Subsidiary of the Parent for the entire Fiscal Year immediately preceding such date, that would have contributed) more than (i) 2.5% of the EBITDA or (ii) 2.5% of total assets (as determined in accordance with GAAP) of the Parent and its Restricted Subsidiaries on a consolidated basis, in each case in the Fiscal Year immediately preceding such date. Notwithstanding the forgoing, each Borrower and each Wholly-Owned Subsidiary that owns any Material Intellectual Property shall at all times be a Material Subsidiary.

“Material Wholly-Owned Subsidiary” means each Debtor other than an Excluded Subsidiary.

“Maximum Rate” has the meaning set forth in Section 11.22.

“Milestone” means each milestone set forth in the attached Schedule IV.

“MNPI” means material non-public information (within the meaning of the United States Federal, state or other applicable securities laws) with respect to the Parent and its Affiliates or their Securities.

“Moody’s” means Moody’s Investors Services, Inc., and its successors.

“Mortgaged Properties” means, each parcel of Real Property and the improvements thereto owned or leased by a Loan Party with respect to which a Lien is granted pursuant to the DIP Orders or a Mortgage.

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“Mortgaged Vessel Owning Subsidiary” means, at any time, any Subsidiary of the Parent that owns a marine vessel that is or that is required at such time to be a Mortgaged Vessel under the terms of this Agreement or the other Loan Documents. As of the Effective Date, the Mortgaged Vessel Owning Subsidiaries and the Mortgaged Vessels owned by each are as follows:

Mortgaged Vessel Owning Subsidiary Jurisdiction of Mortgaged Vessel Vessel Flag Organization Hydro Marine Services, Inc. Panama McDermott Derrick Barge Panama No. 27

Intermac 650 Panama McDermott Derrick Barge Panama No. 32 DLV 2000 Panama Lay Vessel 108 Malta J. Ray McDermott (Norway), AS Norway North Ocean 102 Malta J. Ray McDermott International Vessels, Ltd. Cayman Islands McDermott Derrick Barge Panama No. 50 McDermott Gulf Operating Company, Inc. Panama Thebaud Sea Canada (bareboat registered in Barbados)

McDermott International Vessels, Inc. Panama Emerald Sea Barbados

“Mortgaged Vessels” means at any time the marine vessels of the Loan Parties that are subject to a Lien under the Collateral Documents at such time. The Mortgaged Vessels shall consist of the following as of the Effective Date:

Vessel Name Flag McDermott Derrick Barge No. 27 Panama McDermott Derrick Barge No. 50 Panama McDermott Derrick Barge No. 32 Panama DLV 2000 Panama North Ocean 102 Malta Lay Vessel 108 Malta Intermac 650 Panama Thebaud Sea Canada (bareboat registered in Barbados) Emerald Sea Barbados

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“Mortgages” means (a) the fee or leasehold mortgages or deeds of trust, assignments of leases and rents and other security documents or instruments (including the DIP Order s) granting a Lien on any Real Property to secure the Obligations and (b) the mortgages and other security documents or instruments (including the DIP Orders) granting a Lien on any Mortgaged Vessel to secure the Obligations, in the case of each of clauses (a) and (b) each in form and substance reasonably satisfactory to the Collateral Agent, as the same may be amended, supplemented, replaced or otherwise modified from time to time in accordance with this Agreement.

“Multiemployer Plan” means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which the Parent, any of its Subsidiaries, any Guarantor or any ERISA Affiliate has any obligation or liability, contingent or otherwise.

“Net Cash Proceeds” means, with respect to any event, proceeds received by the Parent or any Restricted Subsidiary after the Effective Date in cash or Cash Equivalents in respect of such event, net of (a) the reasonable cash costs (including underwriting commissions, legal, investment banking, brokerage and accounting and other professional fees and sales commissions) paid or reasonably estimated (to the extent reserves for such estimations are maintained in accordance with GAAP) in connection with such event by the Debtors to Persons that are not Debtors, and (b) in the case of any Asset Sale or Insurance/Condemnation Event, Taxes paid or reasonably estimated to be payable by the Debtors as a result thereof (including, for the avoidance of doubt, as a result of any distribution of such proceeds to the Parent or any Restricted Subsidiary).

“New Money Term Facility” means, collectively, the Term Commitments and the New Money Term Loans.

“New Money Term Loan” means each Interim New Money Term Loan and each Final New Money Term Loan.

“NO 105” means M.V. Lay Vessel North Ocean 105.

“NO 105 Indebtedness” means Indebtedness for borrowed money incurred under the North Ocean 105 Credit Agreement and existing as of the Effective Date.

“Non-Consenting Lender” has the meaning specified in Section 11.1(c).

“Non-Defaulting Lender” means a Lender that is not a Defaulting Lender.

“Non-Primed Excepted Liens” means Customary Permitted Liens that are (x) valid mechanics liens and other similar liens, (y) valid, perfected and unavoidable liens in existence as of the Petition Date (other than the Primed Liens) or (z) valid and unavoidable liens in existence for amounts outstanding as of the Petition Date that are perfected after the Petition Date as permitted by Section 546(b) of the Bankruptcy Code, but in each case under the foregoing clauses (y) and (z), only to the extent such valid, perfected and unavoidable liens are by operation of law senior in priority to the Liens securing the obligations under the Prepetition Credit Facilities.

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“Non-Recourse Indebtedness” means Indebtedness of a Subsidiary of the Parent (in each case that is not a Loan Party) (a) that is on terms and conditions reasonably satisfactory to each Administrative Agent, (b) that is not, in whole or in part, Indebtedness of any Loan Party (and for which no Loan Party has created, maintained or assumed any Guaranty Obligation) and for which no holder thereof has or could have upon the occurrence of any contingency, any recourse against any Restricted Subsidiary or the assets thereof (other than the Stock or Stock Equivalents issued by the Subsidiary primarily obligated on such Indebtedness that are owned by a Restricted Subsidiary) for the repayment of such Indebtedness, and (c) owing to an unaffiliated third-party (which for the avoidance of doubt does not include the Parent, any Subsidiary thereof, any other Loan Party, any Joint Venture (or owner of any interest therein) and any Affiliate of any of them).

“North Ocean 105 Credit Agreement” means the facility agreement dated as of September 30, 2010, among North Ocean 105 AS, as borrower, the Parent, as guarantor, BNP Paribas and Credit Agricole, as mandated lead arrangers, BNP Paribas, as facility agent, security agent, ECA coordinator and documentation bank, and the lenders from time to time party thereto.

“North Ocean Entity” means North Ocean 105 AS, a private limited liability company organized and existing under the laws of Norway. As of the Effective Date, the North Ocean Entity is a Wholly-Owned Subsidiary of the Parent.

“Note” means a promissory note of any Borrower payable to any Lender and its registered assigns evidencing the aggregate Indebtedness of such Borrower to such Lender resulting from the Loans owing to such Lender.

“Notice of Borrowing” means a Notice of Term Borrowing.

“Notice of Conversion or Continuation” has the meaning specified in Section 2.14(a).

“Notice of Term Borrowing” has the meaning specified in Section 2.2.

“Obligations” means the Loans, the Revolving Letter of Credit Obligations and all other amounts, obligations, covenants and duties owing by the Borrowers and the other Loan Parties to the Agents, any Lender, any Issuer, any Affiliate of any of them or any Indemnitee, of every type and description (whether by reason of an extension of credit, opening or amendment of a letter of credit or payment of any draft drawn thereunder, loan, guaranty, indemnification, foreign exchange or currency swap transaction, interest rate hedging transaction or otherwise), present or future, arising under (a) this Agreement or any other Loan Document, (b) any Treasury Management Arrangements that are entered into after the Effective Date with a counterparty that was, at the time such Treasury Management Agreements were entered into, an Administrative Agent, a Revolving Lender or any Affiliate of any of the foregoing (the Obligations described in this clause (b) being referred to herein as “Treasury Management Obligations”), or (c) any Hedging Contract that is (i) (A) in effect on the Effective Date with a counterparty that is an Administrative Agent, a Revolving Lender or any Affiliate of any of the foregoing (or, subject to the consent of the Revolving Administrative Agent in its sole discretion, any other Person) and (B) that is a transaction that constitutes a DIP Roll-Up Hedging Obligation (as defined in the DIP Orders) or (ii) entered into after the Effective Date with a counterparty that was, at the time such Hedging Contract was entered into, an Administrative Agent, a Revolving Lender or any Affiliate of any of

-35- the foregoing (or, subject to the consent of the Revolving Administrative Agent in its sole discretion, any other Person) (the Obligations described in this clause (c) being referred to herein as “Hedging Obligations”), in each case whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired and whether or not evidenced by any note, guaranty or other instrument or for the payment of money, including all letter of credit and other fees (including the Revolving Commitment Fees and the Fronting Fee), interest (including post-petition interest, whether or not allowed in a bankruptcy proceeding), charges, expenses, attorneys’ fees and disbursements and other sums chargeable to any Borrower under this Agreement or any other Loan Document and all obligations of any Borrower under any Loan Document to provide cash collateral for Obligations in respect of Letters of Credit; provided, however, that “Obligations” shall specifically exclude all Excluded Swap Obligations.

“OFAC” means the Office of Foreign Assets Control of the U.S. Department of the Treasury.

“Original Currency” has the meaning specified in Section 11.19(a).

“Original Effective Date” means May 10, 2018.

“Other Borrower Obligations” has the meaning specified in Section 11.23.

“Other Connection Taxes” means, with respect to any Lender or Issuer or any Administrative Agent, Taxes imposed as a result of a present or former connection between such Lender or Issuer or any Administrative Agent and the jurisdiction imposing such Tax (other than connections arising from such Person having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Currency” has the meaning specified in Section 11.19(a).

“Other Documents” has the meaning set forth in Section 12.1.

“Other Taxes” has the meaning specified in Section 2.19(b).

“Parallel Debt” has the meaning specified in the Collateral Agency Agreement.

“Parent” has the meaning specified in the preamble to this Agreement.

“Parent’s Accountants” means the Parent’s accountants, which shall be Deloitte & Touche LLP or another firm of independent nationally recognized public accountants.

“Participant” has the meaning specified in Section 11.2(d).

“Participant Register” has the meaning specified in Section 11.2(d).

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

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“Performance Guarantee” of any Person means (a) any letter of credit, banker’s acceptance, surety bond, performance bond, bank guarantee or other similar obligation issued for the account of such Person to support only trade payables or nonfinancial performance obligations of such Person, (b) any letter of credit, banker’s acceptance, surety bond, performance bond, bank guarantee or other similar obligation issued for the account of such Person to support any letter of credit, banker’s acceptance, surety bond, performance bond, bank guarantee or other similar obligation issued for the account of a Subsidiary or joint venture of such Person to support only trade payables or non-financial performance obligations of such Subsidiary or joint venture, and (c) any parent company guarantee or other direct or indirect liability, contingent or otherwise, of such Person with respect to trade payables or non-financial performance obligations of a Subsidiary or joint venture of such Person, if the purpose of such Person in incurring such liability is to provide assurance to the obligee that such contractual obligation will be performed, or that any agreement relating thereto will be complied with.

“Performance Letter of Credit” means (a) a letter of credit issued to secure ordinary course performance obligations in connection with marine installation, project engineering, procurement, construction, maintenance and other similar projects (including projects about to be commenced) or bids for prospective marine installation, project engineering, procurement, construction, maintenance and other similar projects, (b) a letter of credit issued to back a bank guarantee, surety bond, performance bond or other similar obligations issued to support ordinary course performance obligations in connection with marine installation, project engineering, procurement, construction, maintenance and other similar projects (including projects about to be commenced) or bids for prospective marine installation, project engineering, procurement, construction, maintenance and other similar projects, (c) a letter of credit qualifying as a “performance-based standby letter of credit” under 12 CFR Part 3, Appendix A, Section 3(b)(2)(i) or any successor U.S. Comptroller of the Currency regulation or (d) the Amazon Letter of Credit.

“Permit” means any permit, approval, authorization, license, variance or permission required from a Governmental Authority under an applicable Requirement of Law.

“Permitted Project Charges” means the amount of any Project Charges that are permitted pursuant to Section 5.4 of this Agreement.

“Person” means an individual, partnership, corporation (including a business trust), joint stock company, estate, trust, limited liability company, unincorporated association, joint venture or other entity, or a Governmental Authority.

“Petition Date” has the meaning assigned to such term in the recitals hereto.

“Pipe Fab Sale” means the disposition of certain assets and equity interests of Shaw Pipe Manufacturing Holdings, LLC, CB&I Laurens, Inc., CB&I Group, Inc., CB&I Lake Charles, LLC, CB&I El Dorado, Inc., CB&I Clearfield, Inc., CB&I Middle East Holdings, Inc., Shaw Overseas (Middle East) Ltd., CB&I Nass Pipe Fabrication WLL, CB&I SKE&C Middle East, Shaw Emirates Pipes Manufacturing LLC, CB&I Walker LA LLC in relation to the sale of pipe fabrication business.

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“Plan Effective Date” has the meaning assigned to such term in the Restructuring Support Agreement.

“Plan of Reorganization” means a plan of reorganization that is prepared and distributed in accordance with the Bankruptcy Code, consistent in all respects with the terms of the Restructuring Support Agreement and otherwise in form and substance satisfactory to the Requisite Revolving Lenders and the Requisite Term Lenders and, solely with respect to provisions that affect the Administrative Agents and the Collateral Agent (in their capacity as such), satisfactory to the Administrative Agents and Collateral Agent.

“Pledge and Security Agreement” means the Pledge and Security Agreement dated as of the Effective Date executed by the Parent, the Borrowers, each other Guarantor party thereto and the Collateral Agent.

“Pledged Notes” has the meaning specified in the Pledge and Security Agreement.

“Pledged Stock” has the meaning specified in the Pledge and Security Agreement.

“Prepetition Agent” means (a) each Existing First-Lien Agent, (b) the Existing LC Agreement Agent, (c) each Existing Super- Priority Agent, (d) Credit Agricole, in its capacity as collateral agent under the Existing Collateral Agency and Intercreditor Agreement, or any successor in such capacity and (e) Credit Agricole, in its capacity as collateral agent under the Existing Super-Priority Collateral Agency Agreement, or any successor in such capacity.

“Prepetition Credit Agreements” means (a) the Existing First-Lien Credit Agreement, (b) the Existing Letter of Credit Agreement, and (c) the Existing Super-Priority Credit Agreement.

“Prepetition Credit Facilities” means the credit facilities established under and pursuant to the Prepetition Credit Agreements.

“Prepetition Secured LC Obligations” means the LC Facility Obligations (as defined in the Existing First-Lien Credit Agreement), the Revolving Letter of Credit Obligations (as defined in the Existing First-Lien Credit Agreement), the Cash Secured Letter of Credit Obligations (as defined in the Existing First-Lien Credit Agreement), the Obligations (as defined in the Lloyds Facility), the “Revolving Letter of Credit Obligations” (as defined in the Existing Super-Priority Credit Agreement), and the Letter of Credit Obligations (as defined in the Existing Letter of Credit Agreement).

“Prepetition Secured Obligations” means (a) the “Secured Obligations” as defined in the Existing Collateral Agency and Intercreditor Agreement, (b) the “Term Issuer Obligations” as defined in the Existing Collateral Agency and Intercreditor Agreement, (c) the “Claims” as defined in the Existing Collateral Agency and Intercreditor Agreement, and (d) the “Obligations” as defined in the Existing Super-Priority Credit Agreement.

“Prepetition Secured Parties” means any holder of Prepetition Secured Obligations.

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“Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases to quote such rate, the highest rate per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Applicable Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Applicable Administrative Agent).

“Primed Liens” has the meaning set forth in Section 2.24.

“Priming Liens” has the meaning set forth in Section 2.24.

“Professional Fees” means attorneys’ fees, costs and expenses and the fees, costs and expenses of any other professionals.

“Project Charges” means the change in project gross profit between one Fiscal Quarter’s earnings release and the next Fiscal Quarter’s earnings release related to the Specified Projects and any other projects not listed which incur charges substantial enough to require disclosure in the Company’s earnings release.

“Projections” means those financial projections of the Parent and its Subsidiaries delivered to each Administrative Agent by the Parent covering the Fiscal Years 2019 through 2023.

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“Public-Side Lenders” means Lenders that do not wish to receive MNPI.

“Purchasing Lenders” has the meaning specified in Section 11.7(a)(i).

“Purchasing Revolving Lender” has the meaning specified in Section 11.7(a)(i).

“Purchasing Term Lender” has the meaning specified in Section 11.7(a).

“Ratable Portion” means, subject to adjustment as provided in Section 2.15(f), Section 2.16(e) and Section 2.23(a)(iv):

(a) for purposes of Section 10.5, with respect to any Lender at any time, the percentage obtained by dividing (x) (i) the Revolving Commitment of such Lender at such time plus (ii) such Lender’s Term Exposure at such time by (y) the sum of (i) the aggregate Revolving Commitments of all Lenders at such time plus (ii) the aggregate Term Exposure of all Lenders at such time; provided that if the Revolving Commitments have been terminated, then the Ratable Portion of any Revolving Lender shall be determined based on the Revolving Commitments of the Lenders immediately prior to such termination, and provided further that if the aggregate Term Exposure is reduced to $0.00 or the Term Exposure of any Term Lender is reduced due to a reduction in its Term Commitment without a funding thereunder, then the Ratable Portion of such Lender shall be determined based on the Term Exposure used for purposes of this clause (a) of the Lenders immediately before such reduction;

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(b) except as provided in clause (a) above, with respect to the Revolving Commitments or Revolving Obligations of any Revolving Lender at any time, the percentage obtained by dividing (i) the Revolving Commitments of such Revolving Lender at such time by (ii) the aggregate Revolving Commitments of all Revolving Lenders at such time; provided that if the Revolving Commitments have been terminated, then the Ratable Portion of such Revolving Lender shall be determined based on the Ratable Portions of such Revolving Lender, and of all other Revolving Lenders, immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof;

(d) except as provided in clause (a) above, with respect to the Term Commitments or the Term Loans of any Term Lender at any time, the percentage obtained by dividing (i) the Funded Portion of such Term Lender at such time by (ii) the Funded Portion of all Term Lenders at such time (or, as the context requires with respect to the New Money Term Facility or the Refinanced Term Facility at any time, as applicable, the percentage obtained by dividing (i) the Funded Portion in respect of the New Money Term Facility or the Refinanced Term Facility, as applicable, of such Term Lender at such time by (ii) the Funded Portion in respect of the New Money Term Facility or the Refinanced Term Facility, as applicable, of all Term Lenders at such time).

“Real Property” means all Mortgaged Property and all other real property owned or leased from time to time by any Loan Party or any of its Restricted Subsidiaries.

“Refinanced Make-Whole Term Loan” has the meaning set forth in Section 2.1(b).

“Refinanced Term Loans” has the meaning set forth in Section 2.1(b).

“Refinanced Term Facility” means the Refinanced Make-Whole Term Loans and the Refinanced Term Loans.

“Regulation S-X” means Regulation S-X under the Securities Act of 1933.

“Regulation T” means Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by and to brokers and dealers of securities for the purpose of purchasing or carrying margin stock (as defined therein).

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks, non-banks and non-broker lenders for the purpose of purchasing or carrying margin stock applicable to member banks of the Federal Reserve System.

“Related Obligations” has the meaning specified in Section 10.8.

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“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, representatives, attorneys, consultants, advisors and trustees of such Person and of such Person’s Affiliates.

“Release” means, with respect to any Person, any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration, in each case, of any Contaminant into the indoor or outdoor environment or into or out of any property owned by such Person, including the movement of Contaminants through or in the air, soil, surface water, ground water or property and, in each case, in violation of Environmental Law.

“Remedial Action” means all actions required by any applicable Environmental Law to (a) clean up, remove, treat or in any other way address any Contaminant in the indoor or outdoor environment, (b) prevent the Release or threat of Release or minimize the further Release so that a Contaminant does not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment or (c) perform pre‑remedial studies and investigations and post‑remedial monitoring and care.

“Requirement of Law” means, with respect to any Person, the common law and all federal, state, local and foreign laws, rules and regulations, orders, judgments, decrees and other determinations of any Governmental Authority or arbitrator, applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, including, without limitation, foreign exchange control, United States foreign assets control, and currency reporting laws and regulations, now or hereafter applicable, and all licensing and other formalities, necessary for the import, export and transport of any property, including, without limitation, those required by the regulations of the Export Administration of the Bureau of Industry and Security.

“Requisite Lenders” means at any time, Lenders having Exposure and unused Commitments representing at least a majority of the sum of all Exposure outstanding and unused Commitments at such time; provided that the Commitments and Exposure of any Defaulting Lender shall be excluded for purposes of making a determination of Requisite Lenders.

“Requisite Revolving Lenders” means, at any time, Lenders having Revolving Exposure and unused Revolving Commitments (as set forth on Part B of Schedule I) representing at least a majority of the sum of all Revolving Exposure outstanding at such time and unused Revolving Commitments (as set forth on Part B of Schedule I) at such time; provided that the Revolving Commitments and Revolving Exposure of any Defaulting Lender shall be excluded for purposes of making a determination of Requisite Revolving Lenders.

“Requisite Term Lenders” means, at any time, Lenders having Term Exposure representing at least a majority of the sum of the Term Exposure of all Lenders at such time.

“Responsible Officer” means, with respect to any Person, any of the principal executive officers, managing members, managing directors or general partners of such Person but, in any event, with respect to financial matters, the chief financial officer, treasurer, assistant treasurer or controller of such Person.

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“Restricted Payment” means:

(a) any dividend, interest or any other distribution or payment (exclusive of any interest paid in kind on preferred stock outstanding on the date hereof), whether direct or indirect, on account of any Stock or Stock Equivalents of the Parent or any of its Restricted Subsidiaries now or hereafter outstanding, except a dividend, interest or any other distribution or payment payable solely in Stock or Stock Equivalents (other than Disqualified Stock) or a dividend or distribution payable solely to the Borrowers or one or more of the other Subsidiary Guarantors;

(b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Stock or Stock Equivalents of the Parent or any of its Restricted Subsidiaries now or hereafter outstanding other than one payable solely to the Borrowers or one or more of the other Subsidiary Guarantors; and

“Restricted Subsidiary” means a Subsidiary that is not an Unrestricted Subsidiary. For the avoidance of doubt, the Borrowers shall at all times be Restricted Subsidiaries. Except where context requires otherwise, a reference to a “Restricted Subsidiary” shall be a reference to a Restricted Subsidiary of the Parent.

“Restructuring Charges” means, the amount of (a) any restructuring charges, accruals or reserves, including any such charges related to the Cases and (b) without duplication of the foregoing in clause (a), any impairment charges, asset write-offs and other similar charges and any restructuring charges, accruals or reserves related to the consolidation, termination, closing or demobilization of facilities, plants, software, equipment or other assets and (c) any net loss incurred from the early extinguishment of any indebtedness, obligations under swap contracts or other derivative instruments.

“Restructuring Costs” means, without duplication, all restructuring-related fees, charges and expenses incurred by Parent or its Consolidated Subsidiaries, including, without limitation, all fees and expenses incurred or payable by Parent and its Subsidiaries in connection with this Agreement and the Prepetition Credit Agreements, including, without limitation, (a) advisory fees, amendment fees, accounting fees, transaction fees, upfront fees, arrangement fees, commitment fees, engagement fees, legal fees and other similar types of fees and (b) employee and management severance costs and expenses and retention program costs and expenses (including any bonuses in connection therewith).

“Restructuring Support Agreement” means the Restructuring Support Agreement dated as of January 21, 2020, among the Parent, certain of the Parent’s Subsidiaries and the consenting parties thereto, and all annexes, attachments and exhibits thereto, as amended in accordance with the terms thereof.

“Revolving Administrative Agent” has the meaning specified in the preamble to this Agreement.

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“Revolving Commitment” means, with respect to each Revolving Lender, on any day, the commitment of such Revolving Lender to participate in Revolving Letters of Credit, in the aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule I; provided that, notwithstanding the foregoing, if such day is prior to the Final Facility Effective Date, such amount shall be as set forth on Part A of such Schedule I, and upon the Final Facility Effective Date, such amount shall be as set forth on Part B of such Schedule I, or, in each case, in the Assignment and Acceptance pursuant to which such Revolving Lender becomes a party hereto, as any such amount may be adjusted from time to time pursuant to this Agreement.

“Revolving Commitment Fee” has the meaning specified in Section 2.15(a)(i).

“Revolving Commitments” means the aggregate of such commitments for all Revolving Lenders, which as of the Effective Date is $300,000,000.00, and as of the Final Facility Effective Date, is $743,000,000.00.

“Revolving Exposure” means, with respect to any Revolving Lender, at any time, such Revolving Lender’s Ratable Portion of the Revolving Letter of Credit Obligations at such time.

“Revolving Facility” means the letter of credit facility evidenced by this Agreement and described in Section 2.4.

“Revolving Issuer” means (a) as to the Existing Super-Priority Letters of Credit, the issuer thereof, and (b) otherwise, each Person that (i) is listed on Schedule II as a Revolving Issuer or (ii) (A) is, at the time it becomes a “Revolving Issuer” hereunder, a Revolving Lender or Affiliate of a Revolving Lender and (B) hereafter becomes a Revolving Issuer with the approval of the Revolving Administrative Agent and the Borrowers and that has executed an agreement with, and in form and substance reasonably satisfactory to, the Revolving Administrative Agent and the Borrowers, to be bound by the terms hereof applicable to Revolving Issuers.

“Revolving Lender” means each financial institution or other entity that (a) is listed on the signature pages of the Agreement as a “Revolving Lender” or (b) from time to time becomes a party hereto as a Revolving Lender by execution of an Assignment and Acceptance or an Increase and Joinder Agreement.

“Revolving Letter of Credit” means, without duplication, each Performance Letter of Credit issued pursuant to Section 2.4 and, on and after the Final Facility Effective Date, each Existing Super-Priority Letter of Credit.

“Revolving Letter of Credit Issuer Commitment” means (a) the amount set forth on Schedule II for each Revolving Issuer as its Revolving Letter of Credit Issuer Commitment or (b) such other amount as any Revolving Issuer and the Borrowers may agree in writing delivered to the Revolving Administrative Agent at the time such Revolving Issuer becomes a “Revolving Issuer” hereunder.

“Revolving Letter of Credit Obligations” means, at any time, without duplication, the aggregate amount equal to the sum of (a) the Revolving Reimbursement Obligations at such time (or, for any Revolving Reimbursement Obligations in any Alternative Currency, the Dollar Equivalent thereof at such time) and (b) the Revolving Letter of Credit Undrawn Amounts at such time.

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“Revolving Letter of Credit Undrawn Amounts” means, at any time, the aggregate undrawn amount of all Revolving Letters of Credit outstanding at such time (or, for any Revolving Letter of Credit denominated in an Alternative Currency, the Dollar Equivalent thereof at such time).

“Revolving Maturity Date” means the earliest to occur of (a) nine months after the Petition Date, which date shall be extended automatically by an additional 90 days if the following conditions are satisfied on the date that is ten business days prior to the date that is nine months after the Petition Date: (i) No Default or Event of Default shall exist, (ii) the representations and warranties set forth in Article IV hereof that have no materiality or Material Adverse Effect qualification shall be true and correct in all material respects and the representations and warranties set forth in Article IV hereof that have a materiality or Material Adverse Effect qualification shall be true and correct in all respects, in each case with the same effect as though made on and as of such date or, to the extent such representations and warranties expressly relate to an earlier date, as of such earlier date, (iii) the Restructuring Support Agreement has not been terminated other than as to the Consenting Noteholders (as defined in the Restructuring Support Agreement), (iv) an order approving the Technology Business Sale has been entered by the Bankruptcy Court and (v) the Technology Business Sale has not closed solely due to regulatory approvals remaining outstanding; (b) the Plan Effective Date; and (c) acceleration of the Revolving Letter of Credit Obligations pursuant to the terms hereunder following the occurrence of an Event of Default.

“Revolving Register” has the meaning specified in Section 11.2(c)(i).

“Revolving Reimbursement Obligations” means all outstanding matured reimbursement or repayment obligations payable to any Revolving Issuer with respect to amounts drawn under Revolving Letters of Credit.

“Revolving Termination Date” means the earliest to occur of (a) the Revolving Maturity Date, (b) the date of termination of all the Revolving Commitments pursuant to Section 2.8 or Section 9.2, and (c) the date on which all Revolving Letter of Credit Obligations become due and payable pursuant to Section 9.2.

“Rolled-Up Additional Obligations” means any interest and fees (including Commitment Fees (as defined in the Existing Super-Priority Credit Agreement) due in respect of the Existing Super-Priority Term Loans and the Existing Super-Priority Letters of Credit as of the Final Facility Effective Date.

“Roll-Up Term Lender” has the meaning specified in Section 2.1(b).

“S&P” means S&P Global Ratings, a division of S&P Global, Inc., and its successors.

“Sanctioned Country” means, at any time, a country or territory which is, or whose government is, the subject or target of any Sanctions.

“Sanctioned Person” means, at any time, (a) any vessel or Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, any EU member state, the United Kingdom or Canada, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person.

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“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, Her Majesty’s Treasury of the United Kingdom or Global Affairs Canada.

“Scheduled Term Maturity Date” means the earliest to occur of (a) nine months after the Petition Date, which date shall be extended automatically by an additional 90 days if the following conditions are satisfied on the date that is ten business days prior to the date that is nine months after the Petition Date: (i) No Default or Event of Default shall exist, (ii) the representations and warranties set forth in Article IV hereof that have no materiality or Material Adverse Effect qualification shall be true and correct in all material respects and the representations and warranties set forth in Article IV hereof that have a materiality or Material Adverse Effect qualification shall be true and correct in all respects, in each case with the same effect as though made on and as of such date or, to the extent such representations and warranties expressly relate to an earlier date, as of such earlier date, (iii) the Restructuring Support Agreement has not been terminated other than as to the Consenting Noteholders (as defined in the Restructuring Support Agreement), (iv) an order approving the Technology Business Sale has been entered by the Bankruptcy Court and (v) the Technology Business Sale has not closed solely due to regulatory approvals remaining outstanding; (b) the Plan Effective Date; and (c) acceleration of the Term Loans pursuant to the terms hereunder following the occurrence of an Event of Default.

“SEC” means the U.S. Securities and Exchange Commission.

“Secured Parties” means the Lenders, the Issuers, each Agent and any other holder of any Obligation.

“Security” means any Stock, Stock Equivalent, voting trust certificate, bond, debenture, promissory note or other evidence of Indebtedness, whether secured, unsecured, convertible or subordinated, or any certificate of interest, share or participation in, or any temporary or interim certificate for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing, but shall not include any evidence of the Obligations.

“Security Principles” means, other than pursuant to the DIP Orders, (A) no actions shall be required under the law of any non- U.S. jurisdiction in order to create or perfect any security interest other than (x) in respect of Mortgaged Vessels, (y) actions required under the laws of the jurisdictions listed on Schedule 7.14 and (z) actions reasonably requested by either Administrative Agent or the Collateral Agent in any other jurisdiction taking into account (1) the materiality of the relevant Collateral, (2) the cost thereof and (3) the benefits to the Lenders afforded thereby, and (B) no Lien by any Person organized outside of the United States shall be made that would result in any breach of any law or regulation (or analogous restriction) of the jurisdiction of organization of such Person or result in a substantial risk to the officers or directors of such Person of a civil or criminal liability; provided that if any actions are not taken in respect of Collateral solely as a result of this sub-clause (B), the Parent shall, at the reasonable request of either Administrative Agent or the Collateral Agent, diligently pursue any relevant governmental or third party consents or other authority to permit such subsidiary to create or perfect a security interest in such Collateral or to mitigate such risk of liability.

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“Selling Lenders” has the meaning specified in Section 11.7(a)(i).

“Selling Revolving Lender” has the meaning specified in Section 11.7(a)(i).

“Selling Term Lender” has the meaning specified in Section 11.7(a).

“Special Purpose Vehicle” means any special purpose funding vehicle identified as such in writing by any Lender to each Administrative Agent and controlled by that Lender.

“Specified Asset Sale” means (a) any Asset Sale made in reliance on clause (g), (h), (i), (j), (n) or (o) of Section 8.4, (b) any sale by the Parent or any of its Restricted Subsidiaries of any equity interests in any Restricted Subsidiary and (c) any issuance of Stock or Stock Equivalents by any Restricted Subsidiary, in each case of the foregoing clauses (a) through (c), resulting in aggregate Net Cash Proceeds exceeding $5,000,000.00 during the term of this Agreement. The term “Specified Asset Sale” shall not include any Insurance/Condemnation Event or the Technology Business Sale.

“Specified Projects” means Cameron, Duke Asheville, Calpine, MOX, Tyra Pkg 1 & 3, Freeport 1&2, Freeport 3, ROTA-3 PIPELINE, KGD 98/2 SPS Surf, Golden Pass, Mozambique, TOTAL Ethane, Borstar, Entergy – Lake Charles, Entergy – St. Charles and Entergy – Montgomery County.

“Stock” means shares of capital stock (whether denominated as common stock or preferred stock), partnership or membership interests, equity participations or other equivalents (regardless of how designated) of or in a corporation, partnership, limited liability company or similar business entity, whether voting or non‑voting.

“Stock Equivalents” means all securities convertible into or exchangeable for Stock and all warrants, options or other rights to purchase or subscribe for any Stock, whether or not presently convertible, exchangeable or exercisable.

“Subsidiary” means, with respect to any Person, a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares or securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person and in relation to a person incorporated (or established) in the Netherlands, a “dochtermaatschappij” within the meaning of section 2:24a DCC (regardless whether the shares or voting rights on the shares in such company are held directly or indirectly through another “dochtermaatschappij”). Unless otherwise specified, all references herein to a “Subsidiary”, “Restricted Subsidiary”, “Restricted Subsidiaries” or “Subsidiaries” shall refer to a Subsidiary, Restricted Subsidiary, Restricted Subsidiaries or Subsidiaries of the Parent.

“Subsidiary Guarantor” means each Guarantor other than the Parent. As of the Effective Date, each Subsidiary of the Parent listed on Schedule V hereto is a Subsidiary Guarantor.

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“Super-Priority Lender” has the meaning set forth in the definition of “Existing Super-Priority Credit Agreement”.

“Supermajority Lenders” means Supermajority Revolving Lenders and Supermajority Term Lenders, each voting as a separate class.

“Supermajority Revolving Lenders” means, at any time, Lenders having Revolving Exposure and unused Revolving Commitments representing at least 66 2/3% of the sum of all Revolving Exposure outstanding and unused Revolving Commitments at such time; provided that the Revolving Commitment and Revolving Exposure of any Defaulting Lender shall be excluded for purposes of making a determination of Supermajority Revolving Lenders.

“Supermajority Term Lenders” means, at any time, Lenders holding Term Exposure with an aggregate principal amount of at least 66 2/3% of the sum of all Term Exposure outstanding at such time; provided that the Term Exposure of any Defaulting Lender shall be excluded for purposes of making a determination of Supermajority Term Lenders.

“Superpriority Claim” has the meaning set forth in Section 2.24(a).

“Swap Obligation” means, with respect to any Subsidiary Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Tax Affiliate” means, with respect to any Person, (a) any Subsidiary of such Person, and (b) any Affiliate of such Person with which such Person files or is eligible to file affiliated, consolidated, combined, unitary or other similar Tax Returns.

“Tax Returns” has the meaning specified in Section 4.8.

“Taxes” has the meaning specified in Section 2.19(a).

“Tech Sale Proceeds Account” has the meaning specified in Section 2.12(c).

“Technology Business” means, collectively, (a) the technology business segment operated by the Parent and its Subsidiaries which provides proprietary technology licenses, associated engineering services, proprietary equipment and catalysts, primarily for the petrochemical and refining industries, and (b) the engineered products business segment operated by the Parent and its Subsidiaries which provides engineered products for the oil and gas, petrochemical, power generation, water and wastewater, mining and mineral processing industries, provided that, the “Technology Business” shall exclude, for the avoidance of doubt, (i) the minority ownership interest in Net Power LLC owned by Lummus Technology LLC and (ii) know-how and intellectual property of the Parent and its Subsidiaries, including its patents, designs, digital infrastructure and service techniques, in each case not primarily used in the ordinary course of the business segments described in (a) and (b), which have been transferred to Lummus Technology and its affiliates pursuant to the Transfer of Proprietary Rights Agreement dated May 10, 2018 between Lummus Technology LLC and J. Ray Holdings Inc., the Transfer of Propriety Rights Agreement dated May 10, 2018 between McDermott Technology (Americas), Inc., McDermott Technology (US), Inc. and Chicago Bridge & Iron Company and the Transfer of Propriety Rights Agreement dated May

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10, 2018 between Lummus Technology LLC, McDermott Technology (Americas), Inc. and McDermott Technology (US), Inc., and otherwise; provided, further, that, the “Technology Business” shall also exclude all of the equity interests of Lummus Consultants International Ltd. and Lummus Consultants International LLC unless the purchaser in the Technology Business Sale elects to acquire such equity interests pursuant to the definitive documentation for such Technology Business Sale.

“Technology Business Sale” has the meaning specified in the Restructuring Support Agreement.

“Term Commitment” means, with respect to each Term Lender, such Term Lender’s commitment consisting of its Interim New Money Term Commitment and Final New Money Term Commitment. “Term Commitments” means the aggregate of such commitments for all Term Lenders, and the aggregate amount of the Term Commitments on the Effective Date is $1,200,000,000.00.

“Term Exposure” means, with respect to any Term Lender, at any time, the sum of (a) the unfunded Term Commitment of such Term Lender at such time and (b) the aggregate principal amount of the outstanding Term Loans held by such Term Lender at such time.

“Term Facilities” means, collectively, the New Money Term Facility and the Refinanced Term Facility.

“Term Lenders” means Lenders (including Roll-Up Term Lenders) having a Term Commitment and/or owed Term Loans.

“Term Loan” means each New Money Term Loan, each Refinanced Term Loan and each Refinanced Make-Whole Term Loan.

“Term Loan Ad Hoc Group” has the meaning specified in the Restructuring Support Agreement.

“Term Loan Administrative Agent” has the meaning specified in the preamble to this Agreement.

“Term Maturity Date” means the earliest to occur of (a) the Scheduled Term Maturity Date, and (b) the date on which all Term Loans and interest thereon become due and payable pursuant to Section 9.2.

“Term Register” has the meaning specified in Section 11.2(c)(ii).

“Treasury Management Obligations” has the meaning given to such term in the definition of “Obligations”.

“Title IV Plan” means a pension plan, other than a Multiemployer Plan, covered by Title IV of ERISA and to which the Parent, any of its Subsidiaries, any Guarantor or any ERISA Affiliate has any obligation or liability (contingent or otherwise).

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“Transactions” means the execution, delivery and performance by each Loan Party of the Loan Documents to which it is to be a party, the creation of the Liens provided for in the Collateral Documents and, in the case of the Borrowers, the borrowing of Loans, the use of the proceeds thereof, and the issuance of Letters of Credit hereunder.

“Treasury Management Arrangement” means any arrangement for credit card, cash management, clearing house, wire transfer, depository, treasury or investment services in connection with any transfer or disbursement of funds through an automated clearing house or on a same day or immediate or accelerated availability basis (including all monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise of the Parent or any of its Subsidiaries arising out of any cash management, clearing house, wire transfer, depository, treasury or investment services) provided to the Parent or any of its Subsidiaries. The designation of any such arrangement as a Treasury Management Arrangement shall not create in favor of the counterparty that is a party thereto any rights in connection with the management, enforcement or release of any Collateral.

“Treasury Regulations” means the final and temporary income Tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

“Type” when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Eurodollar Rate or the Base Rate.

“UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

“Undisclosed Administration” means, in relation to a Lender or its direct or indirect parent company, the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the law in the country where such Lender or such parent company is subject to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed; provided that such appointment does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or appointed Person) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Lender.

“Unrestricted Subsidiary” means:

(a) any Captive Insurance Subsidiary;

(b) the Amazon Entity; and

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“U.S. Subsidiary” means any Subsidiary of the Parent that is organized under the laws of the United States of America, any State thereof or the District of Columbia.

“U.S. Tax Compliance Certificate” has the meaning specified in Section 2.19(e).

“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001)) and the regulations and rules promulgated thereunder.

“Variance Receipts Testing Date” has the meaning ascribed to it in Section 6.1(d)(iii).

“Variance Receipts Testing Period” has the meaning ascribed to it in Section 6.1(d)(iii).

“Variance Disbursement Testing Date” has the meaning ascribed to it in Section 6.1(d)(ii).

“Variance Disbursement Testing Period” has the meaning ascribed to it in Section 6.1(d)(ii).

“Variance Testing Date” means (a) with respect to any test relating to cash disbursements or vendor disbursements and JV infusions, the Variance Disbursement Testing Date and (b) with respect to any test relating to cash receipts, the Variance Receipts Testing Date.

“Variance Testing Period” means (a) with respect to any test relating to cash disbursements or vendor disbursements and JV infusions, the Variance Disbursement Testing Period and (b) with respect to any test relating to cash receipts, Variance Receipts Testing Period.

“Voting Stock” means Stock of any Person having ordinary power to vote in the election of members of the board of directors, managers, trustees or similar controlling Persons of such Person (irrespective of whether, at the time, Stock of any other class or classes of such entity shall have or might have voting power by reason of the happening of any contingency).

“Wholly-Owned” means, in respect of any Person, any Subsidiary of such Person, all of the Stock of which (other than director’s qualifying shares, and the like, as may be required by applicable law) is owned by such Person, either directly or indirectly through one or more Wholly-Owned Subsidiaries thereof.

“Withdrawal Liability” means, with respect to the Parent, any of its Subsidiaries, any Guarantor or any ERISA Affiliate at any time, the aggregate liability incurred (whether or not assessed) with respect to all Multiemployer Plans pursuant to Section 4201 of ERISA.

“Withholding Agent” means any Loan Party and any Administrative Agent.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

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Section 1.2 Computation of Time Periods

In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and, where applicable, the words “to” and “until” each mean “to but excluding” and the word “through” means “to and including.”

Section 1.3 Accounting Terms and Principles

(a) Except as set forth below, all accounting terms not specifically defined herein shall be construed in conformity with GAAP and all accounting determinations required to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in conformity with GAAP.

(b) If any change in the accounting principles used in the preparation of the most recent Financial Statements referred to in Section 6.1 is hereafter required or permitted by the rules, regulations, pronouncements and opinions of the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or any successors thereto) and such change is adopted by the Parent without objection from the Parent’s Accountants and results in a change in any of the calculations required by Article V or VIII had such accounting change not occurred, the parties hereto agree to enter into good faith negotiations in order to amend such provisions so as to equitably reflect such change with the desired result that the criteria for evaluating compliance with such covenants by the Loan Parties shall be the same after such change as if such change had not been made; provided, however, that no change in GAAP that would affect a calculation that measures compliance with any covenant contained in Article V or VIII shall be given effect until such provisions are amended to reflect such changes in GAAP.

(c) Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Statement of Financial Account Standards 159 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Parent or any of its Subsidiaries at “fair value”, as defined therein.

Section 1.4 Certain Terms

(a) The words “herein,” “hereof” and “hereunder” and similar words refer to this Agreement as a whole, and not to any particular Article, Section, subsection or clause in this Agreement.

(b) Unless otherwise expressly indicated herein, (i) references in this Agreement to an Exhibit, Schedule, Article, Section, clause or sub-clause refer to the appropriate Exhibit or Schedule to, or Article, Section, clause or sub-clause in this Agreement, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, and (iii) the words “above” and “below”, when following a reference to a clause or a sub-clause of any Loan Document, refer to a clause or sub-clause within, respectively, the same Section or clause.

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(c) Each agreement defined in this Article I shall include all appendices, exhibits and schedules thereto. Unless otherwise specified, references in this Agreement to an agreement shall be to such agreement as so amended, restated, supplemented or modified, unless (i) any consent is required hereunder for an amendment, restatement, supplement or other modification to any such agreement and such consent is not obtained or (ii) it is otherwise specified that such reference refers to such agreement as of a particular date.

(d) References in this Agreement to any statute shall be to such statute as amended or modified, together with any successor legislation, in each case in effect at the time any such reference is operative unless it is otherwise specified that such reference refers to such statute as of a particular date.

(e) The term “including” when used in any Loan Document means “including without limitation” except when used in the computation of time periods. The phrase “in the aggregate”, when used in any Loan Document, means “individually or in the aggregate,” unless otherwise expressly noted.

(f) Upon the appointment of any successor Administrative Agent pursuant to Section 10.6, the reference to Credit Agricole or Barclays, as applicable, in the definition of Dollar Equivalent shall be deemed to refer to the financial institution then acting as the Applicable Administrative Agent or one of its Affiliates if it so designates.

(g) Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any issuer document related thereto, provides for one or more automatic increases after such time in the stated amount thereof, the amount of such Letter of Credit shall be deemed for all purposes (other than determining the Letter of Credit Participation Fees and Fronting Fees payable in connection with such Letter of Credit) to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time or may occur in the future.

(h) The phrase “unmatured or undrawn” when used in any Loan Document with respect to any unfunded obligation means that (i) the beneficiary of the applicable letter of credit, bankers’ acceptance, surety bond, performance bond, bank guarantee or other similar obligation has not made a bona fide drawing or other demand for funding under such letter of credit, bankers’ acceptance, surety bond, performance bond, bank guarantee or other similar obligation and (ii) the issuer of such letter of credit, bankers’ acceptance, surety bond, performance bond, bank guarantee or other similar obligation shall not have a favorable legal judgment to obtain cash collateral in respect thereof.

Section 1.5 Dutch Terms

(a) In relation to any entity that is incorporated, or where applicable, has its centre of main interest in the Netherlands, a reference to:

(i) a moratorium includes voorlopige surseance van betaling or surseance van betaling;

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(ii) winding up, liquidation and reorganization (and any of those terms) includes an entity being declared bankrupt (failliet verklaard), dissolved (ontbonden) or subjected to any emergency regulations;

(iii) admit in writing its inability to pay its debts generally includes with respect to an entity the filing of any notice under section 36 of the Tax Collection Act of the Netherlands (Invorderingswet 1990) (“TCA”) or section 60 paragraphs 2 and/or 3 of the Social Insurance Financing Act of the Netherlands (Wet Financiering Sociale Verzekeringen) in conjunction with section 36 of the TCA;

(iv) a security interest includes any mortgage (hypotheek), pledge (pandrecht), retention of title arrangement (eigendomsvoorbehoud), privilege (voorrecht), right of retention (recht van retentie), right to reclaim goods (recht van reclame), and any other rights in rem (zakelijke rechten) or other rights created for the purpose of granting security;

(v) all necessary corporate, limited liability company or partnership action includes, without limitation, where applicable, (i) compliance with any requirements of the Dutch Works Councils Act (Wet op de ondernemingsraden) or the European Works Councils Act (Wet op de Europese ondernemingsraden) and (ii) having obtained an (x) unconditional neutral advice (advies) or unconditional positive advice, or (y) a conditional positive advice, from the competent works council.

For the purpose of this Section 1.5(a)(v):

(A) “unconditional neutral advice” and “unconditional positive advice” means an advice which can be read as an advice to execute and proceed with the proposed decision(s) as described in the request for advice; and

(B) “conditional positive advice” means an advice of which all conditions can reasonably be expected to be satisfied without having a Material Adverse Effect;

(vi) an administrator includes a bewindvoerder and a stille bewindvoerder;

(vii) a distribution or dividend includes any distribution of profits (winstuitkering) or the distribution of reserves (uitkering uit reserves);

(viii) “organizational documents” means a copy of:

(1) the articles of association (statuten);

(2) the deed of incorporation (akte van oprichting); and

(3) an up-to-date extract (uittreksel) from the trade register (Handelsregister) of the Dutch chamber of commerce (Kamer van Koophandel); and

(b) officers include managing directors of a Dutch entity.

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ARTICLE II

THE LOANS AND LETTERS OF CREDIT

Section 2.1 Term Commitments

(a) On the terms and subject to the conditions contained in this Agreement and the DIP Orders, each Term Lender severally agrees to make the following New Money Term Loans to the Borrowers; provided, however that the aggregate principal amount of all New Money Term Loans funded by such Lender shall not exceed such Lender’s Term Commitment and the aggregate amount of all New Money Term Loans funded by the Term Lenders shall not exceed the Term Commitments:

(i) a new money term loan (such term loan, an “Interim New Money Term Loan”) to the Borrowers in a single Borrowing on the Effective Date (which shall be a Business Day) in Dollars in an aggregate principal amount not to exceed such Term Lender’s Interim New Money Term Commitment; and

(ii) a new money term loan (such term loan, a “Final New Money Term Loan”) to the Borrowers in a single Borrowing on the Final Facility Effective Date (which shall be a Business Day) in Dollars in an aggregate principal amount not to exceed the sum of (x) such Term Lender’s Final New Money Term Commitment plus (y) any unfunded portion of such Term Lender’s Interim New Money Term Commitment. Each Term Lender’s Term Commitment shall terminate immediately and without any further action upon the making of such Final New Money Term Loans by such Term Lender.

(b) On the terms and subject to the conditions contained in this Agreement and the DIP Orders, on the Final Facility Effective Date, each Term Lender that is a Super-Priority Term Lender (a “Roll-Up Term Lender”) severally agrees that (i) (A) the aggregate outstanding principal amount of Existing Super-Priority Term Loans held by such Roll-Up Term Lender as of the Petition Date and (B) the Rolled-Up Additional Obligations due in respect of the Existing Super-Priority Term Loans to such Roll-Up Term Lender, shall be deemed exchanged for, repaid by and converted into a term loan to the Borrowers hereunder (each, a “Refinanced Term Loan”) and (ii) the aggregate outstanding amount (the “Make-Whole Amount”) of the “Applicable Premium” (as defined in the Existing Super-Priority Credit Agreement) due to such Roll-Up Term Lender pursuant to Section 2.11(b) of the Existing Super-Priority Credit Agreement as of the Petition Date, shall be deemed exchanged for, repaid by and converted into a term loan to the Borrowers hereunder (each, a “Refinanced Make-Whole Term Loan”), in each case of clauses (i) and (ii) above, on a dollar-for-dollar basis, which exchange and conversion (for the avoidance of doubt) shall not constitute a novation. Subject to the terms and conditions set forth herein and in the DIP Orders, and without any further action by any party to this Agreement, each Roll-Up Term Lender’s Refinanced Term Loans and Refinanced Make-Whole Term Loans shall, on the Final Facility Effective Date, be deemed to be Term Loans and administered hereunder. For the avoidance of doubt, until such Refinanced Term Loans and Refinanced Make-Whole Term Loans are deemed to be Term Loans hereunder and approved by the DIP Orders, such Existing Super-Priority Term Loans, Rolled-Up Additional Obligations due in respect of the Existing Super-Priority Term Loans and Make-Whole Amount of each Roll-Up Term Lender shall continue to be

-54- guaranteed by the applicable guarantors under the Existing Super-Priority Guaranty Agreement and secured by and entitled to the benefits of all Liens created and arising under the Existing Super-Priority Collateral Documents, which Liens shall remain in full force and effect on a continuous basis, unimpaired, uninterrupted and undischarged, and having the same perfected status and priority. To the extent not all such Existing Super-Priority Term Loans, Rolled-Up Additional Obligations due in respect of the Existing Super-Priority Term Loans and Make-Whole Amount of each Roll-Up Term Lender are deemed to be Term Loans hereunder and approved by the DIP Orders, the amount of Refinanced Term Loans and Refinanced Make-Whole Term Loans indefeasibly deemed to be Term Loans hereunder and approved by the DIP Orders, shall be allocated on a pro rata basis to the Roll-Up Term Lenders. The Refinanced Term Loans and the Refinanced Make-Whole Term Loans shall jointly constitute a single, fungible tranche of Term Loans hereunder and under the other Loan Documents and a single Facility hereunder. For the avoidance of doubt, such tranche shall be separate and distinct from the single, fungible tranche of Term Loans consisting of the New Money Term Loans (which shall constitute a separate Facility hereunder). The Refinanced Term Loans and the Refinanced Make-Whole Term Loans shall share a CUSIP number. The New Money Term Loans shall have a different CUSIP number than the Refinanced Term Loans and the Refinanced Make-Whole Term Loans.

Section 2.2 Borrowing Procedures for the Term Loans

(a) There shall be one Borrowing of Interim New Money Term Loans on the Effective Date, which shall be made on notice given by the Borrowers to the Term Loan Administrative Agent not later than 11:00 a.m. (New York time) (A) one Business Day prior to the Borrowing date (or such shorter period as acceptable to the Term Loan Administrative Agent in its sole discretion), in the case of a Borrowing of Base Rate Loans and (B) three Business Days prior to the Borrowing date (or such shorter period as acceptable to the Term Loan Administrative Agent in its sole discretion), in the case of a Borrowing of Eurodollar Rate Loans. Such notice shall be in substantially the form of Exhibit C (a “Notice of Term Borrowing”), specifying (1) the Effective Date (which shall be a Business Day) as the date of such proposed Borrowing, (2) the aggregate amount of such proposed Borrowing, (3) whether any portion of the proposed Borrowing will be of Base Rate Loans or Eurodollar Rate Loans, (4) the initial Interest Period or Interest Periods for any such Eurodollar Rate Loans, and (5) remittance instructions. The Interim New Money Term Loans shall be made as Base Rate Loans unless, subject to Section 2.17, the Notice of Term Borrowing specifies that all or a portion thereof shall be Eurodollar Rate Loans. The Borrowing of Interim New Money Term Loans shall be allocated in accordance with each Term Lender’s Interim New Money Term Commitment.

(b) There shall be one Borrowing of Final New Money Term Loans on the Final Facility Effective Date, which shall be made on a Notice of Term Borrowing given by the Borrowers to the Term Loan Administrative Agent not later than 11:00 a.m. (New York time) (A) one Business Day prior to the Final Facility Effective Date, in the case of a Borrowing of Base Rate Loans and (B) three Business Days prior to the Final Facility Effective Date, in the case of a Borrowing of Eurodollar Rate Loans. Such Notice of Term Borrowing shall specify (1) the Final Facility Effective Date (which shall be a Business Day) as the date of such proposed Borrowing, (2) the aggregate amount of such proposed Borrowing, (3) whether any portion of the proposed

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Borrowing will be of Base Rate Loans or Eurodollar Rate Loans, (4) the initial Interest Period or Interest Periods for any such Eurodollar Rate Loans, and (5) remittance instructions. The Final New Money Term Loans shall be made as Base Rate Loans unless, subject to Section 2.17, the Notice of Term Borrowing specifies that all or a portion thereof shall be Eurodollar Rate Loans. The Borrowing of such Final New Money Term Loans shall be allocated in accordance with each Term Lender’s Final New Money Term Commitment. Unless the Term Loan Administrative Agent shall have received notice from a Term Lender prior to the Effective Date or the Final Facility Effective Date, as applicable, that such Term Lender shall not make available to the Term Loan Administrative Agent such Term Lender’s portion of the Borrowing to be made on such date (or any portion thereof), the Term Loan Administrative Agent may assume that such Term Lender has made such portion available to the Term Loan Administrative Agent on the Effective Date or the Final Facility Effective Date, as applicable, in accordance with this Section 2.2 and the Term Loan Administrative Agent may, in reliance upon such assumption, make available to the Borrowers on such date a corresponding amount. If and to the extent that such Term Lender shall not have so made such portion available to the Term Loan Administrative Agent, such Term Lender and the Borrowers agree to repay to the Term Loan Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrowers until the date such amount is repaid to the Term Loan Administrative Agent, at (i) in the case of the Borrowers, the interest rate applicable at the time to the Term Loans comprising such Borrowing and (ii) in the case of such Term Lender, the Federal Funds Rate for the first Business Day and thereafter at the interest rate applicable at the time to the Term Loans comprising such Borrowing. If such Term Lender shall repay to the Term Loan Administrative Agent such corresponding amount, such corresponding amount so repaid shall constitute such Term Lender’s Term Loan as part of such Borrowing for purposes of this Agreement. If the Borrowers shall repay to the Term Loan Administrative Agent such corresponding amount, such payment shall not relieve such Term Lender of any obligation it may have hereunder to the Borrowers.

(c) The failure of any Term Lender to make its Term Loan or any payment required by it on the date specified, shall not relieve any other Term Lender of its obligations to make its Term Loan or payment on such date but no such other Term Lender shall be responsible for the failure of any Term Lender to make a Term Loan or payment required under this Agreement.

Section 2.3 [Reserved]

Section 2.4 Letters of Credit

(a) On the terms and subject to the conditions contained in this Agreement and the DIP Orders, on the Final Facility Effective Date (i) the Existing Super-Priority Letters of Credit shall be rolled up and deemed to have been issued under the Revolving Facility pursuant to, and shall constitute Letters of Credit for all purposes under, this Agreement and (ii) all Rolled-Up Additional Obligations due with respect to the Existing Super-Priority Letters of Credit as of the Final Facility Effective Date shall be rolled up and deemed to be accrued Obligations under this Agreement and shall be due and payable on the next applicable payment date for such type of Obligation hereunder. For the avoidance of doubt, until any Existing Super-Priority Letters of Credit have been deemed Letters of Credit hereunder and approved by the DIP Orders, the Existing

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Super-Priority Letters of Credit and the amount set forth in the foregoing clause (ii) shall continue to be guaranteed by the applicable guarantors under the Existing Super-Priority Guaranty Agreement and secured by and entitled to the benefits of all Liens created and arising under the Existing Super-Priority Collateral Documents, which Liens shall remain in full force and effect on a continuous basis, unimpaired, uninterrupted and undischarged, and having the same perfected status and priority.

(b) On the terms and subject to the conditions contained in this Agreement and the DIP Orders, each Revolving Issuer agrees to Issue one or more Revolving Letters of Credit at the request of, and for the account of, a Borrower to support obligations of the Parent, such Borrower, any of the Parent’s Subsidiaries or any Joint Venture, from time to time on any Business Day during the period commencing on the Effective Date and ending on the Revolving Maturity Date; provided that no Revolving Issuer shall Issue any Revolving Letter of Credit upon the occurrence of any of the following:

(i) any order, judgment or decree of any Governmental Authority or arbitrator shall purport by its terms to enjoin or restrain such Revolving Issuer from Issuing such Letter of Credit or any Requirement of Law applicable to such Revolving Issuer (including, without limitation, any applicable “know your customer” and anti-money laundering rules and regulations) or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Revolving Issuer shall prohibit, or request that such Revolving Issuer refrain from, the Issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Revolving Issuer with respect to such Letter of Credit any restriction or reserve or capital requirement (for which such Revolving Issuer is not otherwise compensated) not in effect on the date of this Agreement or result in any unreimbursed loss, cost or expense that was not applicable, in effect or known to such Revolving Issuer as of the date of this Agreement and that such Revolving Issuer in good faith deems material to it;

(ii) such Revolving Issuer shall have received written notice from the Revolving Administrative Agent, any Revolving Lender or a Borrower, on or prior to the requested date of Issuance of such Letter of Credit, that one or more of the applicable conditions contained in Section 3.2 (with respect to an Issuance on the Effective Date) or 3.3 is not then satisfied or duly waived in accordance with Section 11.1, and such notice has not been revoked by the Person that delivered such notice;

(iii) after giving effect to the Issuance of such Revolving Letter of Credit, (w) the Revolving Letter of Credit Obligations would exceed (A) the Revolving Commitments in effect at such time minus (B) the aggregate amount of all Cash Secured Letters of Credit then outstanding, (x) the aggregate outstanding amount of all Letters of Credit issued by such Revolving Issuer would exceed its Revolving Letter of Credit Issuer Commitment, or (y) the aggregate amount of outstanding Revolving Letter of Credit Obligations, Cash Secured LC Obligations, and Prepetition Secured LC Obligations would exceed, $2,440,000,000.00 (the “LC Cap”);

(iv) any fees due to the applicable Revolving Issuer in connection with a requested Issuance have not been paid;

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(v) such Letter of Credit is requested to be issued in a form that is not acceptable to such Revolving Issuer, in its sole discretion exercised in a commercially reasonable manner;

(vi) with respect to any requested Letter of Credit denominated in an Alternative Currency, (A) the Revolving Issuer or the Revolving Administrative Agent shall not have approved such Issuance or (B) the Revolving Issuer receives notice from the Revolving Administrative Agent at or before 11:00 a.m. (New York time) on the date of the proposed Issuance of such Letter of Credit that, immediately after giving effect to the Issuance of such Letter of Credit, the sum of the Dollar Equivalent of the Revolving Letter of Credit Obligations at such time in respect of each Revolving Letter of Credit denominated in an Alternative Currency would exceed the Alternative Currency Cap on the date of such proposed Issuance;

(vii) such Letter of Credit does not comply with such Revolving Issuer’s internal policies with respect thereto;

(viii) such Letter of Credit is a trade or commercial letter of credit or bank guarantee;

(ix) such Letter of Credit (other than the Amazon Letter of Credit and the LACC Letter of Credit) supports Indebtedness, supports any hedging obligations, bilateral letter of credit obligations or surety bond obligations of the Debtors or obligations to make any payments to trade vendors for penalty interest payments (including liquidated damages, but excluding, for the avoidance of doubt, customary liquidated damages to customers);

(x) more than $125,000,000.00 face amount of letters of credit under the Prepetition Credit Agreements or the Lloyds Facility, collectively (other than letters of credit fully secured by cash collateral) shall have been drawn and have not been reimbursed (in full in cash) at such time;

(xi) such Letter of Credit contains a draw mechanism that expressly allows the beneficiary to draw such Letter of Credit upon the occurrence of an insolvency event;

(xii) such Revolving Letter of Credit is to be used for anything other than (A) a new project, (B) incremental letters of credit for an existing project, or (C) replacement of a letter of credit under any of the Prepetition Credit Agreements or the Lloyds Facility that is not an auto-renew letter of credit; or

(xiii) such Letter of Credit is a Financial Letter of Credit.

Section 2.5 [Reserved]

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Section 2.6 Cash Secured Letters of Credit

(a) On the terms and subject to the conditions contained in this Agreement, each Cash Secured LC Issuer may, in its sole discretion, Issue one or more Letters of Credit at the request of, and for the account of, the Borrowers to support obligations of the Borrowers, Parent and any of the Parent’s Restricted Subsidiaries or any Joint Venture, from time to time on any Business Day during the period commencing on the Effective Date and ending on the Revolving Maturity Date, and each such Letter of Credit shall be a “Cash Secured Letter of Credit” if it is identified as such in the applicable Letter of Credit Request; provided that no Cash Secured LC Issuer shall Issue any Letter of Credit upon the occurrence of any of the following:

(i) any order, judgment or decree of any Governmental Authority or arbitrator shall purport by its terms to enjoin or restrain such Cash Secured LC Issuer from Issuing such Cash Secured Letter of Credit or any Requirement of Law applicable to such Cash Secured LC Issuer (including, without limitation, any applicable “know your customer” and anti- money laundering rules and regulations) or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Cash Secured LC Issuer shall prohibit, or request that such Cash Secured LC Issuer refrain from, the Issuance of letters of credit generally or such Cash Secured Letter of Credit in particular or shall impose upon such Cash Secured LC Issuer with respect to such Cash Secured Letter of Credit any restriction or reserve or capital requirement (for which such Cash Secured LC Issuer is not otherwise compensated) not in effect on the date of this Agreement or result in any unreimbursed loss, cost or expense that was not applicable, in effect or known to such Cash Secured LC Issuer as of the date of this Agreement and that such Cash Secured LC Issuer in good faith deems material to it;

(ii) such Cash Secured LC Issuer shall have received written notice from the Revolving Administrative Agent, any other Cash Secured LC Issuer or the Borrowers, on or prior to the requested date of Issuance of such Cash Secured Letter of Credit, that one or more of the applicable conditions contained in Section 3.2 (with respect to an Issuance on the Effective Date) or 3.3 is not then satisfied or duly waived in accordance with Section 11.1, and such notice has not been revoked by the Person that delivered such notice;

(iii) after giving effect to the Issuance of such Cash Secured Letter of Credit, (x) the Cash Secured LC Cash Coverage Requirement would not be satisfied; or (y) the aggregate amount of outstanding Revolving Letter of Credit Obligations, Cash Secured LC Obligations, and Prepetition Secured LC Obligations would exceed the LC Cap;

(iv) any fees due to the applicable Cash Secured LC Issuer in connection with a requested Issuance have not been paid;

(v) such Cash Secured Letter of Credit is requested to be issued in a form that is not acceptable to such Cash Secured LC Issuer, in its sole discretion exercised in a commercially reasonable manner;

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(vi) with respect to any requested Cash Secured Letter of Credit denominated in an Alternative Currency, (A) the Cash Secured LC Issuer or the Revolving Administrative Agent shall not have approved such Issuance or (B) the Cash Secured LC Issuer receives notice from the Revolving Administrative Agent at or before 11:00 a.m. (New York time) on the date of the proposed Issuance of such Cash Secured Letter of Credit that, immediately after giving effect to the Issuance of such Cash Secured Letter of Credit, the sum of the Dollar Equivalent of the Cash Secured LC Obligations at such time in respect of each Cash Secured Letter of Credit denominated in an Alternative Currency would exceed the Alternative Currency Cap on the date of such proposed Issuance;

(vii) such Cash Secured Letter of Credit does not comply with such Cash Secured LC Issuer’s internal policies with respect thereto;

(viii) such Cash Secured Letter of Credit is a Financial Letter of Credit and such Cash Secured LC Issuer has not agreed in its sole discretion to Issue Financial Letters of Credit;

(ix) such Letter of Credit supports any hedging obligations, bilateral letter of credit obligations or surety bond obligations of the Debtors or obligations to make any payments to trade vendors for penalty interest payments (including liquidated damages but excluding, for the avoidance of doubt, customary liquidated damages to customers);

(x) more than $125,000,000.00 face amount of letters of credit under the Prepetition Credit Agreements or the Lloyds Facility (other than letters of credit fully secured by cash collateral) shall have been drawn and have not been reimbursed (in full in cash) at such time;

(xi) such Letter of Credit contains a draw mechanism that expressly allows the beneficiary to draw such Letter of Credit upon the occurrence of an insolvency event;

(xii) such Cash Secured Letter of Credit is to be used for anything other than (A) a new project, (B) incremental letters of credit for an existing project, or (C) replacement of a letter of credit under any of the Prepetition Credit Agreements or the Lloyds Facility that is not an auto-renew letter of credit; or

(xiii) after giving effect to the Issuance of such Cash Secured Letter of Credit, the face amount of all Cash Secured Letters of Credit would exceed $100,000,000.00. provided, however, that the stated amount of any Cash Secured Letter of Credit with respect to which another Cash Secured Letter of Credit is to be (or has been) issued to replace such Cash Secured Letter of Credit shall be excluded in calculating the Cash Secured LC Obligations in connection with any determination of compliance with clause (iii)(y) above so long as and only so long as the Cash Secured LC Cash Coverage Requirement shall, at all times prior to the termination and cancellation of the Cash Secured Letter of Credit that is being (or has been) replaced (as notified to the Revolving Administrative Agent and the Borrowers by the Cash Secured LC Issuer thereof), be satisfied (including with respect to the Cash Secured Letter of Credit that is being (or has been) replaced and the related replacement Cash Secured Letter of Credit).

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(b) On the Effective Date (or promptly thereafter but prior to any issuance of Cash Secured Letters of Credit hereunder), one or more Borrowers shall establish (y) the Cash Secured LC Cash Collateral Account for the benefit of the Collateral Agent on behalf of the Cash Secured LC Issuers for the purpose of cash collateralizing the Borrowers’ obligations (including Cash Secured LC Obligations) to each Cash Secured LC Issuer in respect of the Cash Secured Letters of Credit and (z) the LC Facilities Cash Collateral Account for the benefit of the Collateral Agent on behalf of the Revolving Lenders for the purpose of cash collateralizing the Borrowers’ Obligations in respect of the Revolving Letters of Credit.

(i) The Borrowers agree that at all times, they shall cause all cash collateral securing either (A) the Cash Secured Letter of Credit Obligations (as defined in the Existing First-Lien Credit Agreement) or (B) obligations under the Lloyds Facility to be deposited into the LC Facilities Cash Collateral Account immediately upon its release under such facilities.

(ii) The Borrowers agree that at all times, they shall cause the Cash Secured LC Cash Collateral Account Balance to be at least equal to 105% of the Cash Secured LC Obligations with respect to all Cash Secured Letters of Credit (the “Cash Secured LC Cash Coverage Requirement”). Amounts on deposit in the LC Facilities Cash Collateral Account may be transferred from the LC Facilities Cash Collateral Account to the Cash Secured LC Cash Collateral Account from time to time in order to satisfy the Cash Secured LC Cash Coverage Requirement (subject to Section 2.12(i)), and if at any time the Cash Secured LC Cash Collateral Account Balance exceeds the Cash Secured LC Cash Coverage Requirement, the Borrowers shall immediately direct such excess to be transferred to the LC Facilities Cash Collateral Account. Except as provided in the foregoing sentence, funds shall at no time be released from the Cash Secured LC Cash Collateral Account except to reimburse for overdue reimbursement obligations. The Borrowers agree that if at any time the balance in either the Cash Secured LC Cash Collateral Account or the LC Facilities Cash Collateral Account is reduced, other than pursuant to a transfer in accordance with the preceding sentence, the Borrower shall immediately deposit cash in the applicable account in the amount of such reduction.

(iii) Pursuant to the Pledge and Security Agreement, the Cash Secured LC Cash Collateral Account Control Agreement, the LC Facilities Cash Collateral Account Control Agreement and the DIP Orders, a security interest in each of the Cash Secured LC Cash Collateral Account and the LC Facilities Cash Collateral Account has been granted and amounts on deposit therein shall be applied as set forth in the Collateral Agency Agreement and this Agreement. Except as expressly provided herein or in any other Loan Document, no Person shall have the right to make any withdrawal from the Cash Secured LC Cash Collateral Account or the LC Facilities Cash Collateral Account or to exercise any right or power with respect thereto, and amounts in the Cash Secured LC Cash Collateral Account and the LC Facilities Cash Collateral Account shall not be released until the Final Satisfaction Date; provided that at any time the Borrowers shall fail to reimburse any Cash Secured LC Issuer for any payment or disbursement made by a Cash Secured LC Issuer under any Cash Secured Letter of Credit in accordance with Section 2.7, the Borrowers hereby absolutely, unconditionally and irrevocably agree that the Collateral Agent shall be entitled to instruct the applicable depositary bank or securities intermediary to withdraw therefrom and pay to such Cash Secured LC Issuer amounts equal to such

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payment or disbursement (and to transfer funds from the LC Facilities Cash Collateral Account to the Cash Secured LC Cash Collateral Account for such purpose), subject to Section 2.12(i). Amounts in the Cash Secured LC Cash Collateral Account and the LC Facilities Cash Collateral Account shall be invested by the applicable depositary bank in accordance with the terms of the Cash Secured LC Cash Collateral Account Control Agreement and the LC Facilities Cash Collateral Account Control Agreement, respectively. The Borrowers shall bear the risk of loss of principal with respect to any investment of the investments and funds on deposit in the Cash Secured LC Cash Collateral Account and the LC Facilities Cash Collateral Account.

Section 2.7 Letters of Credit Generally

(a) None of the Lenders (other than the Issuers in their capacity as such and on the terms and conditions hereof) shall have any obligation to Issue any Letter of Credit.

(b) In no event shall the expiration date of any Letter of Credit be later than the date that is 12 months from the date of Issuance or auto-renewal thereof or such later date as the applicable Issuer may agree in its sole discretion; provided, however, that if the applicable Issuer agrees in its sole discretion, any Letter of Credit with a fixed term may provide for the auto-renewal thereof for additional periods of not more than 12 months each (each, an “Auto-Renewal LC”); provided, further, that any such Auto-Renewal LC must permit the applicable Issuer to prevent any such extension at least once in each 12 month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof.

(c) In connection with the Issuance of each Letter of Credit, the Borrowers shall give the relevant Issuer and the Revolving Administrative Agent, at least three Business Days’ (unless the relevant Issuer otherwise agrees) prior written notice, in substantially the form of Exhibit E (or in such other written or electronic form as is acceptable to such Issuer) of the requested Issuance of such Letter of Credit (a “Letter of Credit Request”). Such notice shall be irrevocable on and after the Issuance of such Letter of Credit (and, prior to such Issuance, may be revoked only with the consent of the Issuer) and shall specify the Issuer of such Letter of Credit, the stated amount of the Letter of Credit requested, the date of Issuance of such requested Letter of Credit, the date on which such Letter of Credit is to expire (which date shall be a Business Day) and the Person for whose benefit the requested Letter of Credit is to be issued. Unless the Issuer and Revolving Administrative Agent otherwise agree, such notice, to be effective, must be received by the relevant Issuer and the Revolving Administrative Agent, not later than 11:00 a.m. (New York time) on the second Business Day prior to the requested Issuance of such Letter of Credit. In connection with the auto-renewal of each Auto-Renewal LC, the Issuer shall allow such Auto-Renewal LC to auto-renew unless the Borrowers and the beneficiary thereof have agreed in documentation satisfactory to such Issuing Bank not to renew or terminate such Auto-Renewal LC without a drawing thereof.

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(d) Subject to (x) the satisfaction of the conditions set forth in this Section 2.7 and (y) receipt from the Revolving Administrative Agent, if requested by the Issuer, of the total outstanding amount of Applicable Reimbursement Obligations at such time and any fees and expenses related to Letters of Credit that are due and payable at such time (including the amount of any outstanding requests for Issuance), the relevant Issuer shall, on the requested date, Issue a Letter of Credit on behalf of the Borrowers in accordance with such Issuer’s usual and customary business practices. No Issuer shall Issue any Letter of Credit in the period commencing on the first Business Day after it receives written notice from the Revolving Administrative Agent or any Revolving Lender that one or more of the conditions precedent contained in Section 3.3 shall not on such date be satisfied, and ending when such conditions are satisfied. The relevant Issuer shall not otherwise be required to determine that, or take notice whether, the conditions precedent set forth in Sections 2.4 (or Section 2.6, as applicable) and 3.3 have been satisfied in connection with the Issuance of any Letter of Credit.

(e) If requested by the relevant Issuer, prior to the first Issuance of a Letter of Credit by such Issuer, and as a condition of such Issuance and of the participation of each Revolving Lender in the Revolving Letter of Credit Obligations arising with respect thereto, the Borrowers and Parent shall have delivered to such Issuer a letter of credit reimbursement agreement, in such form as the Issuer may employ in its ordinary course of business for its own account (a “Letter of Credit Reimbursement Agreement”), signed by the Borrowers and the Parent, and such other documents or items as may be required pursuant to the terms thereof. In the event of any conflict between the terms of any Letter of Credit Reimbursement Agreement and this Agreement, the terms of this Agreement shall govern.

(f) Each Revolving Issuer shall:

(i) give the Revolving Administrative Agent written notice (or telephonic notice confirmed promptly thereafter in writing, which writing may be a telecopy or, if consented to by the Revolving Administrative Agent, electronic mail), within 3 Business Days, of the Issuance or renewal of a Letter of Credit issued by it (which notice shall include a copy of such Letter of Credit), of all drawings under a Revolving Letter of Credit issued by it, the payment (or the failure to pay when due) by the Borrowers of any Revolving Reimbursement Obligation and of the cancellation, termination or expiration of any Letter of Credit (of which notice the Revolving Administrative Agent shall, in the case of a Revolving Letter of Credit, promptly notify each Lender under the Revolving Facility);

(ii) upon the request of any Revolving Lender, furnish to such Revolving Lender copies of any Letter of Credit Reimbursement Agreement to which such Revolving Issuer is a party and such other documentation as may reasonably be requested by such Revolving Lender; and

(iii) no later than five Business Days following the last Business Day of each calendar quarter, provide to the Revolving Administrative Agent (and the Revolving Administrative Agent shall provide a copy to each Revolving Lender requesting the same) and the Borrowers a schedule of Letters of Credit issued by it, in form and substance reasonably satisfactory to the Revolving Administrative Agent, setting forth the aggregate Revolving Letter of Credit Obligations and Cash Secured LC Obligations outstanding at the end of each calendar quarter and any information requested by the Borrowers or the Revolving Administrative Agent relating thereto.

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(g) Each Cash Secured LC Issuer shall:

(ii) no later than five Business Days following the last Business Day of each calendar quarter, provide to the Revolving Administrative Agent and the Borrowers a schedule of Cash Secured Letters of Credit issued by it, in form and substance reasonably satisfactory to the Revolving Administrative Agent, setting forth the aggregate Cash Secured LC Obligations outstanding at the end of each calendar quarter and any information requested by the Borrowers or the Revolving Administrative Agent relating thereto.

(h) Effective immediately upon the Issuance by a Revolving Issuer of a Revolving Letter of Credit or the auto-renewal of an Auto-Renewal Letter of Credit in accordance with the terms and conditions of this Agreement, each Revolving Issuer shall be deemed to have sold and transferred to each Revolving Lender and each Revolving Lender shall be deemed irrevocably and unconditionally to have purchased and received from such Revolving Issuer, without recourse or warranty, an undivided interest and participation, to the extent of such Revolving Lender’s Ratable Portion in such Letter of Credit and the obligations of the Borrowers with respect thereto (including all Revolving Letter of Credit Obligations with respect thereto) and any security therefor and guaranty pertaining thereto.

(i) (i) The Borrowers jointly and severally agree to pay to the Issuer of any Letter of Credit the amount of all Applicable Reimbursement Obligations owing to such Issuer in respect of any Letter of Credit in Dollars (based on the Dollar Equivalent of such payment if such payment was made in an Alternative Currency) no later than the date that is the next succeeding Business Day after the Borrowers receive notice from such Issuer (or, if such notice is not received prior to 11:00 a.m. (New York Time) on any Business Day, then no later than 10:00 a.m. (New York Time) on the next succeeding Business Day) that payment has been made under such Letter of Credit, irrespective of any claim, set-off, defense or other right that any Borrower may have at any time against such Issuer or any other Person.

(ii) If any Revolving Issuer makes any payment under any Revolving Letter of Credit and a Borrower shall not have repaid such amount to such Revolving Issuer pursuant to the foregoing clause (i)(i) or any such payment in respect thereof is rescinded or set aside for any reason, such Revolving Reimbursement Obligation shall be immediately due and payable with interest thereon computed at the rate of interest per annum equal to the rate of interest applicable during such period to Term Loans that are Base Rate Loans plus 2.00%, and such Revolving Issuer shall promptly notify the Revolving Administrative Agent, and the Revolving Administrative Agent shall promptly notify each

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Revolving Lender of such failure, and each Revolving Lender shall promptly and unconditionally pay to the Revolving Administrative Agent for the account of such Revolving Issuer the amount of such Revolving Lender’s Ratable Portion in Dollars (based on the Dollar Equivalent thereof if such payment was made in an Alternative Currency) and in immediately available funds. If the Revolving Administrative Agent so notifies such Revolving Lender prior to 11:00 a.m. (New York time) on any Business Day, such Revolving Lender shall make available to the Revolving Administrative Agent for the account of such Revolving Issuer its Ratable Portion of the amount of such payment on such Business Day in immediately available funds as set forth in the immediately preceding sentence. Whenever any Revolving Issuer receives from a Borrower a payment of a Revolving Reimbursement Obligation as to which the Revolving Administrative Agent has received for the account of such Revolving Issuer any payment from a Revolving Lender pursuant to this clause (i), such Revolving Issuer shall pay to the Revolving Administrative Agent and the Revolving Administrative Agent shall promptly pay to such Revolving Lender in immediately available funds, an amount equal to such Revolving Lender’s Ratable Portion of the amount of such payment adjusted, if necessary, to reflect the respective amounts the Revolving Lenders have paid in respect of such Revolving Reimbursement Obligation.

(iii) If any Cash Secured LC Issuer makes any payment under any Cash Secured Letter of Credit and a Borrower shall not have repaid such amount to such Cash Secured LC Issuer pursuant to clause (i)(i) above or any such payment in respect thereof is rescinded or set aside for any reason, such Cash Secured Reimbursement Obligation shall be immediately due and payable with interest thereon computed at the rate of interest per annum equal to the rate of interest applicable during such period to Term Loans that are Base Rate Loans plus 2.00%, and such Revolving Issuer shall promptly notify the Revolving Administrative Agent.

(j) Each Borrower’s obligation to pay each Applicable Reimbursement Obligation and the obligations of the applicable Lenders to make payments to the Revolving Administrative Agent for the account of the applicable Issuers with respect to Letters of Credit shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under any and all circumstances whatsoever, including the occurrence of any Default or Event of Default, and irrespective of any of the following:

(i) any lack of validity or enforceability of any Letter of Credit or any Loan Document, or any term or provision therein;

(ii) any amendment or waiver of or any consent to departure from all or any of the provisions of any Letter of Credit or any Loan Document;

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(iii) the existence of any claim, set-off, defense or other right that the Parent, any Borrower, any other party guaranteeing, or otherwise obligated with, the Parent, any Borrower, any Subsidiary or other Affiliate thereof or any other Person may at any time have against the beneficiary under any Letter of Credit, any Issuer, any Administrative Agent, any Lender or any other Person, whether in connection with this Agreement, any other Loan Document or any other related or unrelated agreement or transaction;

(iv) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;

(v) payment by the Issuer under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit; or

(vi) any other act or omission to act or delay of any kind of the Issuer, the Lenders, the Administrative Agents or any other Person or any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.7, constitute a legal or equitable discharge of a Borrower’s obligations hereunder.

Any action taken or omitted to be taken by the relevant Issuer under or in connection with any Letter of Credit, if taken or omitted in the absence of gross negligence or willful misconduct, shall not put such Issuer under any resulting liability to a Borrower or any Lender. In determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof, the Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary and, in making any payment under any Letter of Credit, the Issuer may rely exclusively on the documents presented to it under such Letter of Credit as to any and all matters set forth therein, including reliance on the amount of any draft presented under such Letter of Credit, whether or not the amount due to the beneficiary thereunder equals the amount of such draft and whether or not any document presented pursuant to such Letter of Credit proves to be insufficient in any respect, if such document on its face appears to be in order, and whether or not any other statement or any other document presented pursuant to such Letter of Credit proves to be forged or invalid or any statement therein proves to be inaccurate or untrue in any respect whatsoever. Any noncompliance in any immaterial respect of the documents presented under such Letter of Credit with the terms thereof shall, in any case, be deemed not to constitute willful misconduct or gross negligence of the Issuer. Notwithstanding the foregoing, nothing in this clause (j) shall be deemed to release any Issuer from liability with respect to its gross negligence or willful misconduct.

(k) If and to the extent any Lender shall not have so made its Ratable Portion of the amount of the payment required by clause (i) above available to the Revolving Administrative Agent for the account of an Issuer, such Lender agrees to pay to the Revolving Administrative Agent for the account of such Issuer forthwith on demand any amount so unpaid together with interest thereon, for the first Business Day after payment was first due at the Federal Funds Rate, and thereafter until such amount is repaid to the Revolving Administrative Agent for

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(l) The Revolving Administrative Agent shall determine the Dollar Equivalent of the maximum stated amount of each Letter of Credit denominated in an Alternative Currency and each obligation due with respect thereto, and a determination thereof by the Revolving Administrative Agent shall be conclusive absent manifest error. The Dollar Equivalent of each Applicable Reimbursement Obligation with respect to a drawn Letter of Credit shall be calculated on the date the Issuer pays the draw giving rise to such Applicable Reimbursement Obligation. The Revolving Administrative Agent shall determine or redetermine the Dollar Equivalent of the maximum stated amount of each Letter of Credit denominated in an Alternative Currency on the date of Issuance of such Letter of Credit and at any other time, in the Revolving Administrative Agent’s sole discretion. The Revolving Administrative Agent may determine or redetermine the Dollar Equivalent of any Letter of Credit denominated in an Alternative Currency at any time upon request of any Lender or Issuer.

(m) The Borrowers shall furnish each Administrative Agent with (i) a copy of each Letter of Credit promptly upon the Issuance or renewal of such Letter of Credit and (ii) a copy of any amendment to such Letter of Credit promptly upon the effectiveness of such amendment.

(n) Notwithstanding anything in this Agreement to the contrary, no Revolving Issuer shall be under any obligation to Issue any Letter of Credit if any Revolving Lender is at that time a Defaulting Lender, unless such Revolving Issuer has entered into arrangements, including the delivery of cash collateral, satisfactory to such Revolving Issuer (in its sole discretion) with the Borrowers to eliminate such Revolving Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.23(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be Issued or that Letter of Credit and all other Revolving Letter of Credit Obligations as to which such Revolving Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.

Unless otherwise expressly agreed by the applicable Issuer and the applicable Borrower when a Letter of Credit is Issued, (i) the rules of the ISP shall apply to each standby Letter of Credit and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of Issuance shall apply to each commercial Letter of Credit.

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Section 2.8 Reduction and Termination of the Commitments

The applicable Borrower may, upon at least three Business Days’ prior notice to the Revolving Administrative Agent, terminate in whole the Revolving Commitments if the Final Satisfaction Date occurs simultaneously therewith. A notice of termination of the Revolving Commitments may state that such notice is conditioned upon the effectiveness of other credit facilities or other financing transactions, and if any notice so states it may be revoked by the applicable Borrower by notice to the Applicable Administrative Agent on or prior to the date specified for the termination of the Revolving Commitments that the refinancing condition has not been met and the termination is to be revoked.

Section 2.9 Repayment at Maturity

(a) The Borrowers promise to repay (in cash, in full and in immediately available funds) the entire unpaid principal amount of the Term Loans on the Term Maturity Date (it being understood that other provisions of this Agreement may require all or part of such Obligations to be repaid earlier).

(b) The Borrowers promise to repay (in cash, in full and in immediately available funds) the entire unpaid principal amount of the Revolving Reimbursement Obligations on the Revolving Termination Date (it being understood that other provisions of this Agreement may require all or part of such Obligations to be repaid earlier).

(c) The Borrowers promise to repay (in cash, in full and in immediately available funds) the entire unpaid principal amount of the Cash Secured Reimbursement Obligations on the Revolving Termination Date (it being understood that other provisions of this Agreement may require all or part of such Obligations to be repaid earlier).

Section 2.10 Evidence of Debt

(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing Indebtedness of the Borrowers to such Lender resulting from each Loan of, and Applicable Reimbursement Obligations owed to, such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

(b) The Term Loan Administrative Agent shall maintain accounts in accordance with its usual practice in which it shall record (A) the amount of each Term Loan made or deemed made, and, if a Eurodollar Rate Loan, the Interest Period applicable thereto, (B) the amount of any principal or interest due and payable by the Borrowers to each Term Lender hereunder and (C) the amount of any sum received by the Term Loan Administrative Agent hereunder from the Borrowers, whether such sum constitutes principal or interest (and the type of Term Loan to which it applies), fees, expenses or other amounts due under the Loan Documents and each Term Lender’s share thereof, if applicable.

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(c) The entries made in the accounts maintained pursuant to clauses (a) and (b) above shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations recorded therein; provided, however, that the failure of any Lender or any Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrowers to repay the Loans and Applicable Reimbursement Obligations in accordance with their terms.

(d) Notwithstanding any other provision of this Agreement, if any Term Lender requests that a Borrower execute and deliver a promissory note or notes payable to such Lender in order to evidence the Indebtedness owing to such Lender by the Borrowers hereunder, such Borrower shall promptly execute and deliver a Note or Notes to such Lender evidencing any Term Loans of such Lender substantially in the form of Exhibit B.

Section 2.11 Voluntary Prepayments

The Borrowers may, at any time, prepay the outstanding principal amount of the Term Loans in whole or in part and without premium or penalty, so long as the Borrowers provide cash collateral by depositing cash into the LC Facilities Cash Collateral Account such that the aggregate amount of such prepayment of Term Loans plus the amount of cash so deposited into the LC Facilities Cash Collateral Account is applied to such prepayment and cash collateralization on a pro rata basis based upon the outstanding principal amount of the Term Loans outstanding at such time and the Revolving Commitments in effect at such time; provided, however, that if any prepayment of any Borrowing of Eurodollar Rate Loans is made by the Borrowers other than on the last day of an Interest Period for such Borrowing, the Borrowers shall also pay any amounts owing pursuant to Section 2.17(e); provided, further, that each partial prepayment shall be in an aggregate principal amount that is an integral multiple of $1,000,000.00. Upon the giving of such notice of prepayment, the principal amount of Term Loans specified to be prepaid shall become due and payable on the date specified for such prepayment; provided that a notice of prepayment of the outstanding principal amount of the Term Loans in whole or in part may state that such notice is conditioned upon the effectiveness of other credit facilities or other financing transactions, and if any notice so states it may be revoked by the Borrowers by notice to the Term Loan Administrative Agent on or prior to the date specified for such prepayment that the refinancing condition has not been met and the notice of such prepayment is to be revoked (it being understood that any Term Loans outstanding at the time of such notice or drawn thereafter will, upon such revocation, be continued as Base Rate Loans and, thereafter, may be converted to Eurodollar Rate Loans pursuant to Section 2.14). Voluntary prepayments of Term Loans hereunder shall be applied ratably to the tranche of Term Loans consisting of the Refinanced Term Loans and the Refinanced Make-Whole Term Loans and to the tranche of Term Loans consisting of the New Money Term Loans. Amounts required to be deposited in the LC Facilities Cash Collateral Account under this Section 2.11 are in addition to any other requirement hereunder to deposit cash into the LC Facilities Cash Collateral account, and no such other obligation shall be satisfied by deposits made pursuant to this Section 2.11.

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Section 2.12 Mandatory Prepayments

(a) Not later than the first Business Day following the date of receipt by the Parent or any Restricted Subsidiary of any Net Cash Proceeds in respect of any Specified Asset Sale, the Parent shall notify each Administrative Agent of such receipt. On the third Business Day following the receipt by the Parent or any Restricted Subsidiary of any Net Cash Proceeds in respect of any Specified Asset Sale, the Borrowers shall first prepay, without premium or penalty, the Term Loans then outstanding and provide cash collateral by depositing cash into the LC Facilities Cash Collateral Account to secure the Revolving Letter of Credit Obligations on a pro rata basis (based upon the outstanding principal amount of the Term Loans and the Revolving Commitments in effect at such time) in an aggregate amount equal to such Net Cash Proceeds; second, if the Final Facility Effective Date has not yet occurred, reduce the Final New Money Term Commitment and provide cash collateral by depositing cash into the LC Facilities Cash Collateral Account to secure the Revolving Letter of Credit Obligations on a pro rata basis (based upon the principal amount of the Final New Money Term Commitment and the Revolving Commitments as set forth on Part B of Schedule I) in an aggregate amount equal to the balance of such Net Cash Proceeds; and third, retain the balance of such Net Cash Proceeds; provided that, so long as no Default or Event of Default shall have occurred and be continuing, the Parent may, on or prior to the date of the required prepayment, subject to the following sentence, deliver to each Administrative Agent a certificate of a Responsible Officer of the Parent certifying that the Parent intends to cause such Net Cash Proceeds (or a portion thereof specified in such certificate) to be reinvested in long-term assets that are used or useful in the business of the Parent and its Restricted Subsidiaries on or prior to the date that is 180 days after the receipt of such Net Cash Proceeds, and certifying that, as of the date thereof, no Default or Event of Default has occurred and is continuing, in which case during such period the Borrowers shall not be required to make such prepayment to the extent of the amount intended to be so reinvested as set forth in such certificate; provided further any such Net Cash Proceeds that are not so reinvested by the end of such period shall be applied to prepay the Term Loans and provide cash collateral for the Revolving Letter of Credit Obligations by funding the LC Facilities Cash Collateral Account as provided above promptly upon the expiration of such period. With respect to any Specified Asset Sale other than pursuant to clause (j) of Section 8.4, the Borrowers may reinvest not more than $10,000,000 of Net Cash Proceeds in the aggregate.

(b) Not later than the first Business Day following the date of receipt by the Parent or any Restricted Subsidiary, or by any Agent as loss payee, of any Net Cash Proceeds in respect of any Insurance/Condemnation Event, the Parent shall notify each Administrative Agent of such receipt. On the third Business Day following the receipt by the Parent or any Restricted Subsidiary, or by any Agent as loss payee, of any Net Cash Proceeds in respect of any Insurance/Condemnation Event, the Borrowers shall first prepay, without premium or penalty, the Term Loans then outstanding and provide cash collateral by depositing cash into the LC Facilities Cash Collateral Account to secure the Revolving Letter of Credit Obligations on a pro rata basis (based upon the outstanding principal amount of the Term Loans and the Revolving Commitments in effect at such time) in an aggregate amount equal to such Net Cash Proceeds; second, if the Final Facility Effective Date has not yet occurred, reduce the Final New Money Term Commitment and provide cash collateral by depositing cash into the LC Facilities Cash Collateral Account to secure the Revolving Letter of Credit Obligations on a pro rata basis (based upon the principal amount of the Final New Money Term Commitment and the Revolving Commitments as set forth

-70- on Part B of Schedule I) in an aggregate amount equal to the balance of such Net Cash Proceeds; and third, retain the balance of such Net Cash Proceeds; provided that, so long as no Default or Event of Default shall have occurred and be continuing, the Parent may, on or prior to the date of the required prepayment, deliver to each Administrative Agent a certificate of a Responsible Officer of the Parent certifying that the Parent intends to cause such Net Cash Proceeds (or a portion thereof specified in such certificate) to be reinvested in long-term assets that are used or useful in the business of the Parent and its Restricted Subsidiaries (including through the repair, restoration or replacement of the damaged, destroyed or condemned assets) on or prior to the date that is 180 days after the receipt of such Net Cash Proceeds, and certifying that, as of the date thereof, no Default or Event of Default has occurred and is continuing, in which case during such period the Borrowers shall not be required to make such prepayment to the extent of the amount intended to be so reinvested as set forth in such certificate; provided further any such Net Cash Proceeds that are not so reinvested by the end of such period shall be applied to prepay the Term Loans and by providing cash collateral for the Revolving Letter of Credit Obligations by funding the LC Facilities Cash Collateral Account as provided above promptly upon the expiration of such period.

(c) Not later than the same Business Day of receipt by the Parent or any Subsidiary of any Net Cash Proceeds in respect of the Technology Business Sale or any other Asset Sale of all or any portion of the Technology Business (whether or not permitted under this Agreement, provided that this Section 2.12(c) shall not be construed to permit any Asset Sale that is not otherwise permitted under this Agreement or waive any Event of Default that would result therefrom), the Parent shall notify each Administrative Agent of such receipt and shall immediately deposit such Net Cash Proceeds into a special-purpose blocked account (the “Tech Sale Proceeds Account”) in the name of and under the sole dominion and control of the Collateral Agent, acting for this purpose at the direction of all of the Lenders. The agreement governing the Tech Sale Proceeds Account shall provide that amounts therein may only be released on the earlier of (i) Plan Effective Date, for application in accordance with the Plan of Reorganization or (ii) the occurrence of the Term Maturity Date or Revolving Termination Date (including any acceleration of the Obligations pursuant to Section 9.2) for application solely in accordance with Section 2.16(f).

(d) [Reserved].

(e) If, at any time, the aggregate principal amount of Revolving Letter of Credit Obligations exceeds the aggregate Revolving Commitments at such time, the Borrowers shall immediately provide cash collateral in respect of the Revolving Letter of Credit Obligations in the manner set forth in Section 9.3 in an amount equal to 105% of such excess.

(f) [Reserved].

(g) Prior to or concurrently with any mandatory prepayment, cash collateralization or reduction pursuant to this Section 2.12, the Borrowers (i) shall notify each Administrative Agent of such prepayment, cash collateralization or reduction and (ii) shall deliver to each Administrative Agent a certificate of a Responsible Officer of the Parent setting forth the calculation of the amount of the applicable prepayment, cash collateralization or reduction. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Loan or Applicable Reimbursement Obligation or portion thereof to be prepaid or cash

-71- collateralized (with such specification to be in accordance with this Section 2.12), or the effective date and the amount of any such reduction, as applicable, and shall be given in writing. Promptly following receipt of any such notice, the Term Loan Administrative Agent shall advise the Lenders of the details thereof. Each mandatory prepayment of any Loans and each Commitment reduction shall be allocated among the Lenders under such Facility in accordance with their applicable Ratable Portions. Mandatory prepayments of Term Loans hereunder shall be applied ratably to the tranche of Term Loans consisting of the Refinanced Term Loans and the Refinanced Make-Whole Term Loans and to the tranche of Term Loans consisting of the New Money Term Loans.

(h) Each holder of Term Loans may decline all or any portion of any prepayment allocable to it pursuant to clauses (a) or (b) of this Section 2.12.

(i) No amount of any cash collateral deposited into the LC Facilities Cash Collateral Account pursuant to Section 2.11 or Section 2.12 shall be transferred to the Cash Secured LC Cash Collateral Account at any time.

(j) Amounts required to be deposited in the LC Facilities Cash Collateral Account under this Section 2.12 are in addition to any other requirement hereunder to deposit cash into the LC Facilities Cash Collateral account, and no such other obligation shall be satisfied by deposits made pursuant to this Section 2.12.

Section 2.13 Interest

(a) Term Loan Rate of Interest. All Term Loans shall bear interest on the unpaid principal amount thereof from the date such Term Loans are made until paid in full, except as provided in clause (d) below, as follows:

(i) if a Base Rate Loan, at a rate per annum equal to the sum of (A) the Base Rate as in effect from time to time plus (B) 8.00%; and

(ii) if a Eurodollar Rate Loan, at a rate per annum equal to the sum of (A) the Eurodollar Rate determined for the applicable Interest Period plus (B) 9.00%.

(b) Other Facility Rate of Interest. The outstanding amount of all Obligations (other than the Applicable Reimbursement Obligations, which shall bear interest as set forth in Section 2.7(i)(ii) or Section 2.7(i)(iii), and Term Loans, which shall bear interest as set forth in Section 2.13(a)) shall bear interest, from the date such other Obligations are due and payable until, in all cases, paid in full, except as otherwise provided in clause (d) below, at a rate per annum equal to the sum of (A) the Base Rate as in effect from time to time plus (B) 8.00%.

(c) Interest Payments. (i) Interest accrued on each Base Rate Loan shall be payable in arrears (A) on the last Business Day of each calendar quarter and (B) if not previously paid in full, at maturity (whether by acceleration or otherwise) of such Base Rate Loan, (ii) interest accrued on each Eurodollar Rate Loan shall be payable in arrears (A) on the last day of each Interest Period applicable to such Loan and, if such Interest Period has a duration of more than three months, on each day during such Interest Period occurring every three months from the first day of such Interest Period, (B) upon the payment or prepayment thereof in full or in part and (C) if not previously paid in full, at maturity (whether by acceleration or otherwise) of such Eurodollar Rate Loan and (iii) interest accrued on the amount of all other Obligations shall be payable on demand from and after the time such Obligation becomes due and payable (whether by acceleration or otherwise).

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(d) Default Interest. Notwithstanding the rates of interest specified in clauses (a) and (b) above or elsewhere herein, effective immediately upon the occurrence of an Event of Default and for as long thereafter as such Event of Default shall be continuing, the interest rate otherwise in effect shall increase 2.00% per annum; provided that, the applicable rates of interest with respect to overdue amounts other than principal shall be the rate specified in clause (b)(i) above plus 2.00% per annum.

(e) Additional Reserve Requirements. The Borrowers shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Eurodollar Rate Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which in each case shall be due and payable on each date on which interest is payable on such Loan provided the Borrowers shall have received at least 10 days’ prior notice (with a copy to each Administrative Agent) of such additional interest or costs from such Lender. If a Lender fails to give notice 10 days prior to the relevant interest payment date, such additional interest or costs shall be due and payable 10 days from receipt of such notice.

Section 2.14 Conversion/Continuation Option

(a) The Borrowers may elect (i) at any time on any Business Day to convert Base Rate Loans or any portion thereof to Eurodollar Rate Loans and (ii) at the end of any applicable Interest Period, to convert Eurodollar Rate Loans or any portion thereof into Base Rate Loans or to continue such Eurodollar Rate Loans or any portion thereof for an additional Interest Period; provided, however, that the aggregate amount of the Eurodollar Rate Loans for each Interest Period must be in an amount that is an integral multiple of $1,000,000.00. Each conversion or continuation shall be allocated among the Loans subject to such conversion or continuation of each Applicable Lender in accordance with such Lender’s Ratable Portion. Each such election shall be in substantially the form of Exhibit F (a “Notice of Conversion or Continuation”) and shall be made by giving the Applicable Administrative Agent at least three Business Days’ prior written notice specifying, in each case, (A) the amount, Facility and Type of Loans being converted or continued, (B) in the case of a conversion to or a continuation of Eurodollar Rate Loans, the applicable Interest Period and (C) in the case of a conversion, the date of conversion.

(b) The Applicable Administrative Agent shall promptly notify each Applicable Lender of its receipt of a Notice of Conversion or Continuation and of the options selected therein. Notwithstanding the foregoing, no conversion in whole or in part of Base Rate Loans to Eurodollar Rate Loans, and no continuation in whole or in part of Eurodollar Rate Loans upon the expiration of any applicable Interest Period, shall be permitted at any time during which (i) a Default or an Event of Default shall have occurred and be continuing or (ii) the continuation

-73- of, or conversion into, a Eurodollar Rate Loan would violate any provision of Section 2.17. If, within the time period required under the terms of this Section 2.14, the Applicable Administrative Agent does not receive a Notice of Conversion or Continuation from the Borrowers containing a permitted election to continue any Eurodollar Rate Loans for an additional Interest Period or to convert any such Loans, then, upon the expiration of the applicable Interest Period, such Loans shall be automatically converted to Base Rate Loans. Each Notice of Conversion or Continuation shall be irrevocable.

Section 2.15 Fees

(a) Commitment Fees. The Borrowers jointly and severally agree to pay to the Revolving Administrative Agent for the account of each Lender (except for any Defaulting Lender) a commitment fee (the “Revolving Commitment Fee”), accruing at a rate per annum equal to 0.50% on the actual daily amount by which the Revolving Commitment of such Lender exceeds such Lender’s Revolving Exposure during the period from the Effective Date until the Revolving Termination Date payable in arrears (i) no later than the fifth Business Day after the date on which the Borrowers receive an invoice for the amount of the Revolving Commitment Fees due and payable for the period, and (ii) on the Revolving Termination Date.

(b) [Reserved].

(c) Letter of Credit Fees. The Borrowers jointly and severally agree to pay the following amounts with respect to Letters of Credit issued by any Issuer:

(i) to the Revolving Administrative Agent for the account of each Issuer of a Letter of Credit, with respect to each Letter of Credit issued by such Issuer, an issuance fee of 0.50% per annum (“Fronting Fees”) of the daily maximum amount available to be drawn under such Letter of Credit (in the case of Letters of Credit denominated in a currency other than Dollars, based on the Dollar Equivalent of such amount on the last Business Day of such calendar quarter), payable in arrears (A) no later than the fifth Business Day after the date on which the Borrowers receive an invoice for the amount of the Fronting Fees due and payable for the period and (B) on the Revolving Termination Date;

(ii) to the Revolving Administrative Agent for the account and ratable benefit of the Revolving Lenders (except for any Defaulting Lender that has not provided cash collateral satisfactory to the applicable Issuers pursuant to Section 2.7(n)), with respect to each Revolving Letter of Credit (but excluding that portion of any such Revolving Letter of Credit that has been cash collateralized by the Borrowers pursuant to Section 2.7(n) as a result of any Defaulting Lender), a fee (the “Letter of Credit Participation Fee”) accruing at a rate per annum equal to 9.00% on the daily maximum amount available to be drawn under such Revolving Letter of Credit (in any case, in the case of any Revolving Letter of Credit denominated in a currency other than Dollars, based on the Dollar Equivalent of such amount on the last Business Day of such calendar quarter) payable in arrears (x) no later than the fifth Business Day after the date on which the Borrowers receive an invoice for the amount of the Letter of Credit Participation Fees due and payable for the period and (y) on the Revolving Termination Date, as applicable; provided, however, that during the continuance of an Event of Default, such fee shall be increased by 2.00% per annum and shall be payable on demand upon the election of the Requisite Revolving Lenders (except, in each case, if an Event of Default has occurred under Section 9.1(a) or (f), in which case such increase shall be immediate); and

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(iii) to the Issuer of any Letter of Credit, with respect to the Issuance, amendment or transfer of each Letter of Credit and each drawing made thereunder, documentary and processing charges in accordance with such Issuer’s standard schedule for such charges in effect at the time of Issuance, amendment, transfer or drawing, as the case may be.

(d) [Reserved].

(e) Additional Fees. The Parent and the Borrowers have agreed to pay to the Agents, the Arrangers, the Lenders and the Bookrunners additional fees, the amount and dates of payment of which are embodied in certain fee letters executed and delivered by the Parent or any Borrowers in connection with this Agreement and as may otherwise have been separately agreed upon by the Parent or any Borrower in writing in connection herewith or therewith.

(f) Payment of Fees to Lenders. The Revolving Administrative Agent hereby agrees to pay to each Revolving Lender such Revolving Lender’s Ratable Portion of the Revolving Commitment Fees and the Letter of Credit Participation Fee, as applicable, received by the Revolving Administrative Agent in its capacity as such, promptly following receipt of each of the same from (and only to the extent each such fee is received from) the Borrowers or any other Loan Party; provided that (i) the Ratable Portion of any Revolving Commitment Fee shall be calculated without giving effect to the Commitment of any Defaulting Lender and (ii) any Letter of Credit Participation Fees otherwise payable for the account of a Defaulting Lender with respect to any Letter of Credit as to which neither such Defaulting Lender nor the Borrower has provided cash collateral satisfactory to the Issuer pursuant to Section 2.7(n) shall be payable, to the maximum extent permitted by applicable law, to the other Revolving Lenders in accordance with the upward adjustments in their respective Ratable Portions allocable to such Letter of Credit pursuant to Section 2.23(a)(iv), with the balance of such fee, if any, payable to the Issuer for its own account.

Section 2.16 Payments and Computations

(a) The Borrowers shall make each payment hereunder (including fees and expenses) not later than 3:00 p.m. (New York time) on the day when due, in Dollars, to the Applicable Administrative Agent at its address referred to in Section 11.8 in immediately available funds without set-off or counterclaim. The Applicable Administrative Agent shall promptly thereafter cause to be distributed immediately available funds relating to the payment of principal, interest or fees to the applicable Lenders, in accordance with the application of payments set forth in clauses (e) or (f) below, as applicable, for the account of their respective Applicable Lending Offices; provided, however, that amounts payable pursuant to Section 2.18, Section 2.19 or Section 2.17(c) or (d) shall be paid only to any affected Lender. Payments received by any Administrative Agent after 3:00 p.m. (New York time) shall be deemed (in such Administrative Agent’s sole discretion) to be received on the next Business Day.

(b) All computations of interest and of fees shall be made by the Applicable Administrative Agent on the basis of the actual number of days elapsed (in each case calculated to include the first day but exclude the last day) (i) over a year of 365 or 366 days, as the case may be, in the case of interest accruing at the Base Rate when the Base Rate is determined by reference to the Prime Rate, and (ii) over a year of 360 days at all other times. Each determination by the Applicable Administrative Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

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(c) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or fees, as the case may be; provided, however, that if such extension would cause payment to be made in the next calendar month, such payment shall be made on the immediately preceding Business Day. All repayments of any Loans under any Facility shall be applied as follows: first, to repay Loans under such Facility outstanding as Base Rate Loans and then, to repay Loans under such Facility outstanding as Eurodollar Rate Loans, with those Eurodollar Rate Loans having earlier expiring Interest Periods being repaid prior to those having later expiring Interest Periods.

(d) Unless an Administrative Agent shall have received notice from the Borrowers prior to the date on which any payment is due hereunder that the Borrowers will not make such payment in full, such Administrative Agent may assume that the Borrowers have made such payment in full to such Administrative Agent on such date and such Administrative Agent may, in reliance upon such assumption, cause to be distributed to each applicable Lender on such due date an amount equal to the amount then due such Lender. If and to the extent that the Borrowers shall not have made such payment in full to such Administrative Agent, each applicable Lender shall repay to such Administrative Agent forthwith on demand such amount distributed to such Lender together with interest thereon at the Federal Funds Rate, for the first three Business Days, and, thereafter, at the rate applicable to Base Rate Loans, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to such Administrative Agent.

(e) Subject to the provisions of clause (f) below and the provisions of Section 2.12 with respect to the application of mandatory prepayments, all payments and any other amounts received by the Administrative Agents from or for the benefit of any Borrower shall be applied as follows: first, to pay principal of, and interest on, any portion of the Loans an Administrative Agent may have advanced pursuant to the express provisions of this Agreement on behalf of any Lender, for which such Administrative Agent has not been reimbursed by such Lender or the Borrowers, second, to pay all other Obligations as provided in the Loan Documents, and third, as the Borrowers so designate. Payments in respect of Loans or Revolving Reimbursement Obligations received by an Administrative Agent shall, subject to Section 2.23, be distributed to each applicable Lender in accordance with such Lender’s Ratable Portion (calculated (i) in the case of principal payments, without giving effect to the Commitments of any Defaulting Lender that has not fully funded its share of the Loans or Revolving Reimbursement Obligations being repaid and (ii) in the case of interest and fee payments, without giving effect to the Commitments of any Defaulting Lender for the amount of interest, Revolving Commitment Fees or Letter of Credit Participation Fees payable in respect of Loans or Revolving Letter of Credit Obligations for which such Defaulting Lender has not fully funded its share of the Loans or Revolving Letter of Credit Obligations) and as adjusted in accordance with Section 2.15(f) and Section 2.23(a)(iv).

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(f) Each Borrower hereby irrevocably waives the right to direct the application of any and all payments in respect of the Obligations and any net proceeds of Collateral after the occurrence and during the continuance of an Event of Default, whether from a Loan Party’s sale of Collateral or the Collateral Agent’s or any Secured Party’s receipt of proceeds from any exercise of remedies, and each Borrower and each Lender and each Issuer agrees that, during such time, upon either (A) the written direction of the Requisite Revolving Lenders or the Requisite Term Lenders or (B) the acceleration of any Obligations pursuant to Section 9.2, each Administrative Agent shall (x) apply all payments in respect of any Obligations and all other proceeds of Collateral (other than, except as set forth in clauses (y) and (z) below, with respect to the Cash Secured LC Cash Collateral Account and LC Facilities Cash Collateral Account), in the following order (subject to Section 13.1 and any adjustments under Section 2.23(a)(ii)):

first, to pay interest on and then principal of (i) the Term Loans that any Administrative Agent may have advanced on behalf of any Lender for which such Administrative Agent has not then been reimbursed by such Lender or the Borrowers and (ii) the Revolving Reimbursement Obligations owed to any Issuer for which such Issuer has not then been reimbursed by any Lender or the Borrowers;

second, to pay Obligations in respect of any expense reimbursements or indemnities (including fees and expenses in respect of Treasury Management Arrangements) then due to any Administrative Agent and the Collateral Agent;

third, to pay Obligations in respect of any expense reimbursements or indemnities (including fees and expenses in respect of Treasury Management Arrangements) then due to the Lenders and the Issuers;

fourth, to pay Obligations in respect of any fees (other than Letter of Credit Participation Fees) then due to any Administrative Agent, the Collateral Agent, the Lenders and the Issuers;

fifth, to pay (i) interest then due and payable in respect of the Term Loans (ratably to the aggregate principal amount of such Term Loans) and (ii) Letter of Credit Participation Fees and interest due and payable in respect of Applicable Reimbursement Obligations;

sixth, to pay or prepay the Term Loans, Applicable Reimbursement Obligations and other Obligations (including Hedging Obligations) and to provide cash collateral for outstanding Revolving Letter of Credit Undrawn Amounts in the manner described in Section 9.3, ratably based upon the aggregate outstanding amount of such Term Loans, Revolving Reimbursement Obligations, other Obligations (including Hedging Obligations) and Revolving Letter of Credit Undrawn Amounts; and

seventh, to such other Persons entitled thereto under applicable contractual arrangements or as otherwise required by applicable law or court order.

provided, however, that if sufficient funds are not available to fund all payments to be made in respect of any Obligation described in any of clauses first through sixth above, the available funds being applied with respect to any such Obligation (unless otherwise specified in such clause) shall be allocated to the payment of such Obligations ratably, based on the proportion of the interest of the Agent, Lender, Issuer or other Person holding such Obligations in the aggregate outstanding Obligations described in such clauses;

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(y) with respect to the Cash Secured LC Cash Collateral Account (and all amounts and Securities deposited therein or credited thereto), any amounts so received shall be applied (subject to the Collateral Agency Agreement and the DIP Orders):

first, on a pro rata basis, to the payment of all amounts due to each Cash Secured LC Issuer under any of the Loan Documents, excluding the Cash Secured Reimbursement Obligations;

second, on a pro rata basis, to the payment of all amounts due to each Cash Secured LC Issuer in an amount equal to 100% of all Cash Secured Reimbursement Obligations;

third, on a pro rata basis, to any Secured Party which has theretofore advanced or paid any fees to a Cash Secured LC Issuer, other than any amounts covered by priority second, an amount equal to the amount thereof so advanced or paid by such Secured Party and for which such Secured Party has not previously been reimbursed; and

fourth, to provide cash collateral equal to 105% of the outstanding Cash Secured LC Undrawn Amounts; and

fifth, the balance, if any, after all of the relevant Cash Secured LC Obligations have been indefeasibly paid in full in cash and priorities first through fourth of this clause (y) have otherwise been complied with, to the Revolving Administrative Agent for application to the payment of the Obligations in respect of the Revolving Facility pursuant to clause (z) below; and

(z) with respect to the LC Facilities Cash Collateral Account (and all amounts and Securities deposited therein or credited thereto) and, to the extent required pursuant to clause (y) above, the Cash Secured LC Cash Collateral Account (and all amounts and Securities deposited therein or credited thereto), any amounts so received shall be applied (subject to the Collateral Agency Agreement and the DIP Orders):

first, to pay interest on and then principal of the Revolving Reimbursement Obligations owed to any Revolving Issuer for which such Revolving Issuer has not then been reimbursed by any Lender or the Borrowers;

second, to pay Obligations in respect of any expense reimbursements or indemnities then due to the Revolving Administrative Agent;

third, to pay Obligations in respect of any expense reimbursements or indemnities then due to the Revolving Lenders and the Revolving Issuers;

fourth, to pay Obligations in respect of any fees (other than Letter of Credit Participation Fees) then due to the Revolving Lenders and the Revolving Issuers;

fifth, to pay Letter of Credit Participation Fees and interest due and payable in respect of Revolving Reimbursement Obligations;

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sixth, to pay or prepay the Revolving Reimbursement Obligations and to provide cash collateral for outstanding Revolving Letter of Credit Undrawn Amounts in the manner described in Section 9.3, ratably based upon the aggregate outstanding amount of such Revolving Reimbursement Obligations and Revolving Letter of Credit Undrawn Amounts; and

seventh, the balance, if any, to the Administrative Agents for application to the payment of the Obligations pursuant to clause (x) above.

If any Secured Party collects or receives any amounts or obtains any payment (whether voluntary, involuntary, through the exercise of any right of set-off or otherwise) on account of the Obligations to which it is not entitled under or in excess of the amount it would be entitled under this Section 2.16(f) if such payment had been received by an Administrative Agent or the Collateral Agent, such Secured Party shall hold the same in trust for the applicable Secured Parties entitled thereto and shall forthwith deliver the same to an Administrative Agent, for the account of such Secured Parties, to be applied in accordance with this Section 2.16(f), in each case until the prior payment in full in cash of the applicable Obligations of such Secured Parties.

Section 2.17 Special Provisions Governing Eurodollar Rate Loans

(a) Determination of Interest Rate. The Eurodollar Rate for each Interest Period for Eurodollar Rate Loans shall be determined by the Applicable Administrative Agent pursuant to the procedures set forth in the definition of “Eurodollar Rate.” An Administrative Agent’s determination shall be presumed to be correct absent manifest error and shall be binding on the Borrowers.

(b) Interest Rate Unascertainable, Inadequate or Unfair.

(i) If (A) an Administrative Agent determines that adequate and fair means do not exist for ascertaining the applicable interest rates by reference to which the Eurodollar Rate then being determined is to be fixed (including, without limitation, because the LIBO Screen Rate is not available or published on a current basis) or (B) the Applicable Requisite Lenders notify the Applicable Administrative Agent that the Eurodollar Rate for any Interest Period will not adequately reflect the cost to the Lenders of making or maintaining such Loans for such Interest Period or calendar quarter, such Administrative Agent shall forthwith so notify the Borrowers and the Applicable Lenders, whereupon each Eurodollar Rate Loan in respect of such Facility shall automatically, on the last day of the current Interest Period for such Loan, convert into a Base Rate Loan and the obligations of the Applicable Lenders to make Eurodollar Rate Loans or to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended until such Administrative Agent shall notify the Borrowers that the Applicable Requisite Lenders have determined that the circumstances causing such suspension no longer exist, which notice shall be given promptly following such determination. Thereafter, the Borrowers’ right to request, and the Applicable Lenders’ obligations, if any, to make Eurodollar Rate Loans shall be restored.

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(ii) If at any time an Administrative Agent determines (which determination shall be conclusive absent manifest error) that (A) the circumstances set forth in clause (b)(i)(A) or (b)(i)(B) have arisen and such circumstances are unlikely to be temporary or (B) the circumstances set forth in clause (b)(i)(A) or (b)(i)(B) have not arisen but the supervisor for the administrator of the LIBO Screen Rate or a Governmental Authority having jurisdiction over such Administrative Agent has made a public statement identifying a specific date after which the LIBO Screen Rate shall no longer be used for determining interest rates for loans, then the Administrative Agents and the Borrowers shall endeavor to establish an alternate rate of interest to the LIBO Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable; provided that, if such alternate rate of interest shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement. Notwithstanding anything to the contrary in Section 11.1, such amendment shall become effective with regard to each Facility without any further action or consent of any other party to this Agreement so long as the Applicable Administrative Agent shall not have received, within five Business Days of the date notice of such alternate rate of interest is provided to the Lenders, a written notice from the Applicable Requisite Lenders stating that such Lenders object to such amendment.

(c) Increased Costs. If at any time any Lender or an Issuer determines that any Change in Law (including any change by way of imposition or increase of reserve requirements included in determining the Eurodollar Rate) shall (i) have the effect of increasing the cost to such Lender or such Issuer of agreeing to make or making, funding or maintaining any Eurodollar Rate Loan, or (ii) subject any Lender or any Issuer to any Tax (except for Taxes or Other Taxes indemnifiable pursuant to Section 2.19) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital and the result of any of the foregoing shall be to increase the cost to such Lender or Issuer of making, continuing or maintaining any Eurodollar Rate Loan or of maintaining its obligation to make any such Eurodollar Rate Loan, or to increase the cost to such Lender or Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or Issuer hereunder with respect to a Eurodollar Rate Loan or Letter of Credit (whether of principal, interest or any other amount) then the Borrowers shall from time to time, upon demand by such Lender or such Issuer (with a copy of such demand to the Applicable Administrative Agent), pay to the Applicable Administrative Agent for the account of such Lender or such Issuer additional amounts sufficient to compensate such Lender or such Issuer for such additional cost incurred or reduction suffered. A certificate as to the amount of such increased cost shall be, together with supporting documents, submitted to the Borrowers and the Applicable Administrative Agent by such Lender or such Issuer and shall be conclusive and binding for all purposes, absent manifest error. Notwithstanding the foregoing, except to the extent, if any, the change (or compliance) referred to in such certificate shall be retroactive, the Borrowers shall not be required to compensate a Lender or an Issuer pursuant to this clause (c) for any increased costs or reduction incurred more than 180 days prior to the date of such certificate. The Borrowers shall pay such Lender or such Issuer the amount shown as due on any such certificate within 30 days after its receipt of the same. Notwithstanding the foregoing, no Person shall be entitled to demand compensation for any additional cost or reduction pursuant to this Section 2.17(c) if it is not the general policy or practice of such Person to demand it in similar circumstances under comparable provisions of other credit agreements (as reasonably determined by such Person).

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(d) Illegality. Notwithstanding any other provision of this Agreement, if any Lender determines that the introduction of, or any change in or in the interpretation of, any law, treaty or governmental rule, regulation or order after the date of this Agreement shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for any Lender or its Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to fund or maintain Eurodollar Rate Loans, then, on notice thereof and demand therefor by such Lender to the Borrowers through the Applicable Administrative Agent, (i) the obligation of such Lender to make or to continue Eurodollar Rate Loans and to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended, and each such Lender shall make a Base Rate Loan as part of any requested Borrowing of Eurodollar Rate Loans and (ii) if the affected Eurodollar Rate Loans are then outstanding, the Borrowers shall immediately convert each such Loan into a Base Rate Loan. If, at any time after a Lender gives notice under this Section 2.17(d), such Lender determines that it may lawfully make Eurodollar Rate Loans, such Lender shall promptly give notice of that determination to the Borrowers and the Applicable Administrative Agent. The Borrowers’ right to request, and such Lender’s obligation, if any, to make Eurodollar Rate Loans shall thereupon be restored.

(e) Breakage Costs. In addition to all amounts required to be paid by the Borrowers pursuant to Section 2.13, the Borrowers shall compensate each Lender, upon demand, for all losses, expenses and liabilities (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain such Lender’s Eurodollar Rate Loan to the Borrowers, but excluding any loss of profit on the relevant Loans) that such Lender may sustain (i) if for any reason a proposed Borrowing or continuation of, or conversion into, Eurodollar Rate Loans does not occur on a date specified therefor in a Notice of Borrowing or a Notice of Conversion or Continuation given by the Borrowers or in a telephonic request by it for borrowing or conversion or continuation or a successive Interest Period does not commence after notice therefor is given pursuant to Section 2.14, (ii) if for any reason any Eurodollar Rate Loan is prepaid by reason of an increase or a reduction in Commitments on a date that is not the last day of the applicable Interest Period, (iii) as a consequence of a required conversion of a Eurodollar Rate Loan to a Base Rate Loan as a result of any of the events indicated in clause (d) above, (iv) as a consequence of any failure by the Borrowers to repay Eurodollar Rate Loans when required by the terms hereof, or (v) as a consequence of the assignment of any Eurodollar Rate Loan other than on the last day of an Interest Period therefor as a result of a request by the Borrowers pursuant to Section 2.20 or Section 11.1(c). The Lender making demand for such compensation shall deliver to the Borrowers concurrently with such demand a written statement as to such losses, expenses and liabilities, and this statement shall be conclusive as to the amount of compensation due to such Lender, absent manifest error.

(f) Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers under this Section 2.17 shall survive the termination of this Agreement, the Commitments and the repayment, and the satisfaction or discharge of the Obligations.

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Section 2.18 Capital Adequacy

If at any time any Lender or any Issuer determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or such Issuer’s (or any Person controlling such Lender’s or such Issuer’s) capital as a consequence of its obligations hereunder, under or in respect of any Letter of Credit to a level below that which such Lender or such Issuer or Person could have achieved but for such Change in Law, then, upon demand from time to time by such Lender or such Issuer, the Borrowers shall pay to the Applicable Administrative Agent for the account of such Lender or such Issuer, from time to time as specified by such Lender or such Issuer, additional amounts sufficient to compensate such Lender or such Issuer for such reduction. A certificate as to such amounts setting forth in reasonable detail the basis for such demand and a calculation for such amount shall be submitted to the Borrowers and the Applicable Administrative Agent by such Lender or such Issuer and shall be conclusive and binding for all purposes absent manifest error; provided that no such certificate need disclose any information that is sensitive, confidential or legally restricted. Notwithstanding the foregoing, except to the extent, if any, the change (or compliance) referred to in any such certificate shall be retroactive, the Borrowers shall not be required to compensate a Lender or such Issuer pursuant to this Section 2.18 for any reduction in rates of return with respect to any period prior to the date that is 180 days prior to the date of each such certificate. Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers under this Section 2.18 shall survive the termination of this Agreement, the Commitments and the repayment, and the satisfaction or discharge of the Obligations.

Section 2.19 Taxes

(a) All payments by or on account of any obligation of any Loan Party to or for the account of any Lender or Issuer or any Administrative Agent hereunder or under each Loan Document shall be made free and clear of and without deduction or withholding for any and all taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto (“Taxes”), except pursuant to a Requirement of Law (which for purposes of this Section 2.19 shall include FATCA). If a Withholding Agent shall be required by law (as determined in the good faith discretion of such Withholding Agent) to deduct or withhold any Taxes from or in respect of any such payment to any Lender or the Applicable Administrative Agent then, (i) the applicable Withholding Agent shall be entitled to make such deductions or withholdings, (ii) the applicable Withholding Agent shall timely pay the full amount withheld or deducted by it to the relevant Governmental Authority in accordance with the applicable Requirement of Law, and (iii) the applicable Withholding Agent shall furnish to such Administrative Agent (in case the applicable Withholding Agent is a Loan Party) or to the Borrowers (in case the applicable Withholding Agent is the Applicable Administrative Agent) the original or a certified copy of a receipt evidencing payment thereof, a copy of the return reporting such payment, or other evidence of such payment reasonably satisfactory to such Administrative Agent or the Borrowers (as applicable) within 30 days after such payment is made. In addition, in the case of any Taxes or Other Taxes (as defined below) that are, in either case, (i) deducted or withheld by a Withholding Agent pursuant to the immediately preceding sentence and (ii) not an Excluded Tax, the sum payable by the Borrowers under the applicable Loan Document shall be increased as necessary so that after making all such required deductions or withholdings for such Taxes or Other Taxes (including deductions applicable to additional sums payable under this Section 2.19) such Lender or such Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions or withholdings been made.

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(b) In addition, the Borrowers shall timely pay to the relevant Government Authority any stamp, court or documentary, intangible, recording, filing or similar Taxes (including any interest, additions to Tax or penalties applicable thereto), in each case arising from any payment made under any Loan Document or from the execution, delivery or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.20) (“Other Taxes”) or, at the option of the Applicable Administrative Agent, timely reimburse it for the payment of Other Taxes.

(c) The Borrowers hereby agree to indemnify, jointly and severally, each Administrative Agent, each Issuer and each Lender, for the full amount of Taxes (other than Excluded Taxes) imposed on or with respect to a payment made by or on account of an obligation of any Loan Party under any Loan Document or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts payable under this Section 2.19(c)) deducted or withheld by the Borrowers or paid by the Applicable Administrative Agent or such Lender and any penalties, interest and reasonable expenses arising therefrom or with respect thereto whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted. Payments due under this indemnification shall be made within 10 days of the date such Administrative Agent or such Lender makes demand therefor. A certificate as to the amount of such payment or liability delivered to the Borrowers by a Lender or any Administrative Agent on its own behalf or on behalf of a Lender or any other Administrative Agent, shall be conclusive absent manifest error.

(d) Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the parties contained in this Section 2.19 shall survive the resignation and/or replacement of any Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of this Agreement, the Commitments and the repayment, and the satisfaction or discharge of the Obligations.

(e) Any Lender (including, solely for this purpose, each Administrative Agent and any Issuer) that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver, to the Borrowers and the Applicable Administrative Agent, at the time or times reasonably requested by the Borrowers or the Applicable Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrowers or such Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrowers or the Applicable Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrowers or such Administrative Agent as will enable the Borrowers or such Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in sub-clause (ii)(A), (B) or (D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

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(ii) Without limiting the generality of the foregoing, in the event that a Borrower is a “United States person” within the meaning of Section 7701(a)(30) of the Code:

(A) any Lender that is a United States Person shall deliver to the Borrowers and the Applicable Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrowers or such Administrative Agent), properly completed and executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding Tax;

(B) any non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrowers and the Applicable Administrative Agent (in such number of copies as shall be requested by the applicable recipient) on or prior to the date on which such non-U.S. Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrowers or such Administrative Agent), whichever of the following is applicable:

(1) in the case of a non-U.S. Lender claiming the benefits of an income Tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, properly completed and executed copies of IRS Form W-8BEN-E or IRS Form W-8BEN, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such Tax treaty and (y) with respect to any other applicable payments under any Loan Document, properly completed and executed copies of IRS Form W-8BEN-E or IRS Form W-8BEN, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such Tax treaty;

(2) properly completed and executed copies of IRS Form W-8ECI;

(3) in the case of a non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit I-1 to the effect that such non-U.S. Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10-percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) properly completed and executed copies of IRS Form W-8BEN-E or IRS Form W-8BEN, as applicable; or

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(4) to the extent a non-U.S. Lender is not the beneficial owner, properly completed and executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W- 8BEN-E or IRS Form W-8BEN, as applicable, a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-2 or Exhibit I-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the non-U.S. Lender is a partnership and one or more direct or indirect partners of such non-U.S. Lender are claiming the portfolio interest exemption, such non-U.S. Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-4 on behalf of each such direct and indirect partner;

(C) any non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrowers and the Applicable Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such non-U.S. Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrowers or such Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrowers or such Administrative Agent to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrowers and the Applicable Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrowers or such Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code), and such additional documentation reasonably requested by the Borrowers or such Administrative Agent as may be necessary for the Borrowers and such Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this sub-clause (D), “FATCA” shall include any amendments made to FATCA after the date of this agreement.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrowers and the Applicable Administrative Agent in writing of its legal inability to do so.

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(f) If any Lender, Issuer or the Applicable Administrative Agent receives a refund (or a credit claimed in lieu of a refund) in respect of any Taxes or Other Taxes as to which it has received a payment from or has been indemnified by a Loan Party pursuant to this Section 2.19 or a similar provision of any Loan Document, which refund or credit in solely the good faith judgment of such Lender or Issuer or such Administrative Agent, as the case may be, is attributable to such payment or indemnification made by the Loan Party or the associated Tax or Other Tax, it shall notify the Borrowers of such receipt and shall, within 30 days after the later of the receipt of a written request by the Borrowers or the receipt or application of such refund or credit (unless such Lender reasonably expects that it shall be required to repay such refund or credit to the relevant Governmental Authority), pay the amount of such refund or credit to the Borrowers, net of all out-of-pocket expenses of such Lender and Taxes imposed on the Lender or Issuer or an Administrative Agent with respect to such amounts, without interest thereon and subject to Section 11.6; provided, however, that the Borrowers jointly and severally agree to return such refund or credit paid by the Lender, Issuer or the Applicable Administrative Agent pursuant to this paragraph (f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Lender or Issuer or such Administrative Agent within 30 days after receipt of written notice in the event that such Lender or Issuer or such Administrative Agent is required to repay such refund or credit to the relevant Governmental Authority. Notwithstanding anything to the contrary in this paragraph (f), in no event will a Lender or Issuer or the Applicable Administrative Agent be required to pay any amount to any Loan Party pursuant to this paragraph (f) the payment of which would place the Lender or Issuer or such Administrative Agent in a less favorable net after-Tax position than the Lender or Issuer or such Administrative Agent would have been in if the Tax subject to indemnification and giving rise to such refund or credit had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. Nothing contained in this Section 2.19 shall require any Lender or the Applicable Administrative Agent to make available to any Loan Party any Tax Return or any other document containing information that it deems to be confidential.

Section 2.20 Substitution of Lenders

If any Lender becomes a Defaulting Lender, the Borrowers may, at Borrowers’ sole effort and expense, substitute another financial institution for such Defaulting Lender hereunder, upon reasonable prior written notice (which written notice must be given within 90 days following the notification to the Borrowers thereof) by the Borrowers to the Applicable Administrative Agent and the Defaulting Lender that the Borrowers intend to make such substitution. A substitute financial institution (x) must be an Eligible Assignee and (y) if not already a Lender in respect of such Facility, must be acceptable to the Applicable Administrative Agent and, in the case of the Revolving Facility, each Issuer (each such consent not to be unreasonably withheld, conditioned or delayed). If the proposed substitute financial institution or other entity meets the conditions set forth in clauses (x) and (y) above and the written notice was properly issued under this Section 2.20, the Defaulting Lender shall sell and the substitute financial institution or other entity shall purchase, at par plus accrued interest and Letter of Credit Participation Fees, all rights and claims of such Defaulting Lender under the Loan Documents and such substitute financial institution or other entity shall assume, and the Defaulting Lender shall be relieved of, its Applicable Commitments and all other prior unperformed obligations of the Defaulting Lender under the Loan Documents (other than in respect of any damages (other than exemplary or punitive damages, to the extent permitted by applicable law) in respect of any such unperformed

-86- obligations). Such Defaulting Lender, upon the effectiveness of such sale, purchase and assumption (that, in any event shall be conditioned upon the payment in full by the Borrowers in cash of all fees, unreimbursed costs and expenses and indemnities accrued and unpaid through such effective date to such Defaulting Lender), the substitute financial institution or other entity shall become a “Lender” hereunder in respect of the applicable Facility for all purposes of this Agreement (x) having a Commitment in the amount of such Defaulting Lender’s Commitment assumed by it (if any) and such Commitment of the Defaulting Lender shall be terminated and (y) holding the amount of Applicable Loans and Applicable Reimbursement Obligations held by the Defaulting Lender; provided, however, that all indemnities under the Loan Documents shall continue in favor of such Defaulting Lender. Such Defaulting Lender shall execute and deliver to the Applicable Administrative Agent an Assignment and Acceptance to evidence such transfer; provided, however, that the failure of the Defaulting Lender to execute and deliver such Assignment and Acceptance shall not invalidate such assignment, and such Assignment and Acceptance shall be deemed to be executed and delivered upon receipt by such Defaulting Lender of such payment in full.

Section 2.21 Mitigation

If any Lender requests compensation under Section 2.17(c), or requires the Borrowers to pay any Taxes or additional amounts to any Lender, any Administrative Agent or any Governmental Authority for the account of any Lender pursuant to Section 2.19, then such Lender shall (at the request of the Borrowers) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.17(c) or 2.19, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

Section 2.22 Cash Collateral

(a) Certain Credit Support Events. At any time that there shall exist a Revolving Lender that is a Defaulting Lender, promptly (but in any event within five Business Days) after the request of any Administrative Agent or any Revolving Issuer, the Borrowers shall deliver to the Collateral Agent cash collateral in an amount sufficient to cover all Fronting Exposure (after giving effect to Section 2.23(a)(iv) and any cash collateral provided by the Defaulting Lender).

(b) Grant of Security Interest. All cash collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked deposit or securities accounts at the Collateral Agent (including, in the case of cash collateral provided pursuant to Section 9.3, the LC Facilities Cash Collateral Account). To the extent provided by the Borrowers, the Borrowers, and to the extent provided by any Lender, such Lender, hereby grants to (and subjects to the control of) the Collateral Agent, for the benefit of the Collateral Agent, the Administrative Agents, the Issuers and the Revolving Lenders, a security interest in all such cash, deposit and securities accounts and all balances therein, and in all proceeds of the foregoing, and to maintain such security interest as a first-priority security interest, all as security for the obligations to which

-87- such cash collateral may be applied pursuant to clause (c) below. If at any time the Collateral Agent determines that cash collateral is subject to any right or claim of any Person other than the Collateral Agent as herein provided, or that the total amount of such cash collateral is less than the applicable Fronting Exposure and other obligations secured thereby, the Borrowers or the relevant Defaulting Lender will, promptly (but in any event within five Business Days) after demand by the Collateral Agent, pay or provide to the Collateral Agent additional cash collateral in an amount sufficient to eliminate such deficiency.

(c) Application. Notwithstanding anything to the contrary contained in this Agreement, cash collateral provided hereunder in respect of Letters of Credit shall be held and applied to the satisfaction of the specific Revolving Letter of Credit Obligations and Cash Secured LC Obligations, as applicable, obligations to fund participations therein (including, as to cash collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which such cash collateral was so provided, prior to any other application of such property as may be provided for herein.

(d) Release. Cash collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the Lender (or, as appropriate, its assignee following compliance with Section 11.2(b)(iv)) or (ii) the Collateral Agent’s good faith determination that there exists excess cash collateral; provided, however, that (x) cash collateral furnished by or on behalf of a Loan Party shall not be released during the continuance of a Default or Event of Default (and following application as provided in this Section 2.22 may be otherwise applied in accordance with Section 2.16(e) and (f), and (y) the Person providing cash collateral and the relevant Issuer may agree that cash collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

Section 2.23 Defaulting Lenders

(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

(i) Waivers and Amendments. Each Lender hereby agrees that notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and each Lender hereby agrees that any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the Lenders other than Defaulting Lenders), except as provided in the last sentence of Section 11.1(a).

(ii) Reallocation of Payments. Any payment of principal, interest, fees or other amounts received by any Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 2.12 or otherwise, and including any amounts made available to such Administrative Agent by the Defaulting Lender pursuant to Section 11.6), shall be applied at such time or times as may be determined by such Administrative Agent as follows:

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first, to the payment of any amounts owing by that Defaulting Lender to an Administrative Agent hereunder;

second, to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to a Revolving Issuer hereunder;

third, if so determined by the Revolving Administrative Agent or requested by an Issuer, to be held as cash collateral for future funding obligations of that Defaulting Lender of any participation in any Letter of Credit;

fourth, as the Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Term Loan Administrative Agent;

fifth, if so determined by the Term Loan Administrative Agent and the Borrowers, to be held in a deposit account or securities account and released in order to satisfy obligations of that Defaulting Lender to fund Loans under this Agreement;

sixth, to the payment of any amounts owing to the other Lenders or Issuers as a result of any judgment of a court of competent jurisdiction obtained by any Lender or any Issuer against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement;

seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and

eighth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction.

Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section 2.23(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

(iii) Certain Fees. (x) No Defaulting Lender shall be entitled to receive any Revolving Commitment Fee for any period during which that Lender is a Defaulting Lender (and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender) and (y) each Defaulting Lender shall be limited in its right to receive Letter of Credit Participation Fees as provided in Section 2.15(c)(ii).

(iv) Reallocation of Ratable Portions to Reduce Fronting Exposure. During any period in which there is a Revolving Lender that is a Defaulting Lender, for purposes of computing the amount of the obligation of each Revolving Lender that is a Non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit pursuant to Section 2.7, the “Ratable Portion” of each Revolving Lender that is a Non-Defaulting Lender shall be computed without giving effect to the Commitment of that

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Defaulting Lender; provided that, (i) each such reallocation shall be given effect only if, at the date the Lender becomes a Defaulting Lender, no Default or Event of Default exists; and (ii) the aggregate obligation of a Non-Defaulting Lender to acquire, refinance or fund participations in Letters of Credit shall not exceed the positive difference, if any, of (1) the Revolving Commitment of that Non-Defaulting Lender minus (2) the aggregate Revolving Letter of Credit Obligations of that Lender.

(b) Defaulting Lender Cure. If the Borrowers, the Revolving Administrative Agent, and each Issuer agree in writing in their sole discretion that a Revolving Lender that is a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Revolving Administrative Agent will so notify the Borrowers, the Revolving Lenders and the Issuers, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any cash collateral), that Lender will, to the extent applicable, purchase that portion of outstanding Revolving Letter of Credit Obligations of the other Revolving Lenders and take such other actions as the Revolving Administrative Agent may determine to be necessary to cause the Revolving Letter of Credit Obligations and participations in Letters of Credit to be held on a pro rata basis by the Revolving Lenders in accordance with their Ratable Portions (without giving effect to clause (a)(iv) above), whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Non-Defaulting Lender and no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(c) Replacement of Defaulting Lenders. If any Lender is a Defaulting Lender, then the Borrowers may, at their sole expense and effort, upon notice to such Lender and the Revolving Administrative Agent, require such Lender to be replaced in accordance with Section 2.20.

Section 2.24 Priority and Liens.

(a) Each of the Loan Parties hereby covenants and agrees that upon the entry of, and subject to, the Interim DIP Order (and, when entered, the Final DIP Order) and subject to the Carve Out in all respects, the Obligations:

(i) pursuant to Section 364(c)(1) of the Bankruptcy Code, shall at all times constitute an allowed super-priority administrative expense claim in the Cases (the “Superpriority Claim”), subject only to the Carve Out and having priority over any and all other administrative expenses, diminution claims and all other priority claims against the Debtors, now existing or hereafter arising, of any kind whatsoever, including, without limitation, all other administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code, and over any and all other administrative expenses or other claims arising under sections 105, 326, 327, 328, 330, 331, 365, 503(b), 506(c), 507(a), 507(b), 726, 1113 or 1114 of the Bankruptcy Code, which super-priority claims in respect of the Facilities shall rank pari passu with each other;

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(ii) pursuant to section 364(c)(2) of the Bankruptcy Code, shall be secured by a valid, binding, continuing, enforceable, fully perfected first priority Lien on all Collateral that is not subject to valid, perfected and unavoidable Liens; it being agreed that such Collateral shall exclude claims and causes of action under sections 502(d), 544, 545, 547, 548, 550 and 553 of the Bankruptcy Code (collectively “Avoidance Actions”) but include, subject to the entry of the Final DIP Order by the Bankruptcy Court, the proceeds thereof, and

(iii) pursuant to Section 364(d)(l) of the Bankruptcy Code, shall be secured by a valid, binding, continuing, enforceable, fully perfected first priority senior priming Lien on all Collateral, which Liens shall be senior to the Liens (the “Primed Liens”) securing the Prepetition Credit Facilities and any Liens to which the Primed Liens are senior or rank pari passu, and which shall also prime any Liens granted after the commencement of the Cases to provide Adequate Protection Liens to the extent of any diminution in the value of the collateral of the Primed Liens as provided in the DIP Orders in respect of any of the Primed Liens, subject in each case only to (1) Non-Primed Excepted Liens, (2) the Carve Out and (3) and as otherwise set forth in the DIP Orders (the “Priming Liens”); and

(iv) pursuant to Section 364(c)(3) of the Bankruptcy Code, shall be secured by a valid, binding, continuing, enforceable fully perfected Lien on all Collateral that is subject to Customary Permitted Liens;

(b) The Priming Liens (i) shall be subject and junior to the Carve Out in all respects, (ii) shall be junior to Liens that are senior to the Primed Liens (unless such Liens are themselves Primed Liens), (iii) shall be senior to any Liens to which the Primed Liens are senior or rank pari passu, (iv) shall be senior in all respects to the interests in such property of the holders of the obligations in respect of the Primed Liens (other than the Prepetition Cash Collateralized LC Liens, as defined in the Interim DIP Order), and (v) shall also be senior to any Liens granted after the Petition Date to provide adequate protection in respect of the Primed Liens.

(c) The relative priorities of the Liens described in this Section 2.24 with respect to the Collateral shall be as set forth in the DIP Orders and the Collateral Documents. In accordance with the DIP Orders, all of the Liens described in this Section 2.24 shall be effective and perfected upon entry of the DIP Orders, without the necessity of the execution, recordation or filings by the Debtors of security agreements, control agreements, financing statements or other similar documents, or the possession or control by the Collateral Agent of, or over, any Collateral, as set forth in the DIP Orders.

ARTICLE III

CONDITIONS TO LOANS AND LETTERS OF CREDIT

Section 3.1 Conditions Precedent to the Effective Date

The effectiveness of this Agreement and the obligation of the Term Lenders to make the Interim New Money Term Loans and the obligation of each Issuer to Issue Letters of Credit shall not become effective until the date on which the Administrative Agents shall have received this Agreement, executed and delivered by each of the parties hereto and all of the following conditions precedent are satisfied or duly waived by each Lender, each Issuer and each Agent (such date, the “Effective Date”):

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(a) Deliveries at Effective Date. The Administrative Agents shall have received (i) if requested by any Lender, promissory notes substantially in the form of Exhibit B, each executed and delivered by a Responsible Officer of each Borrower, (ii) the Guaranty Agreement, in form and substance reasonably satisfactory to the Administrative Agents, executed and delivered by a Responsible Officer of the Parent and each Subsidiary of the Parent (including each Borrower) listed on Schedule V hereto and (iii) each of the other documents listed in Schedule 3.1 hereto, each in form and substance reasonably satisfactory to each Administrative Agent, executed and delivered by a Responsible Officer of the Loan Parties and each other party thereto.

(b) Financial Statements. Each Administrative Agent shall have received, for delivery to the Applicable Lenders, (i) the Closing Date Financial Statements and (ii) the Projections.

(c) Legal Opinions. Each Administrative Agent shall have received, on behalf of itself, the Collateral Agent, the Lenders and the Issuers, favorable written opinions, each in form and substance reasonably satisfactory to each Administrative Agent, of Kirkland & Ellis LLP, special counsel to the Loan Parties, on the Effective Date dated as of the Effective Date and addressed to each Administrative Agent, the Collateral Agent, the Lenders and the Issuers and addressing such other matters any Administrative Agent may reasonably request.

(d) Certificates. Each Administrative Agent shall have received (i) a copy of the certificate or articles of incorporation or other formation documents, including all amendments thereto, of each Person listed on Schedule V hereto, certified, in the case of Loan Parties incorporated in the United States, as of a recent date by the appropriate governmental authority of the jurisdiction of its organization, and a certificate as to the good standing (if applicable in such jurisdiction) of each Loan Party (other than those listed on Schedule 3.1(d)) from such governmental authority; (ii) a certificate of an Authorized Officer, the Secretary or the Assistant Secretary of such Loan Party and with respect to a Dutch Loan Party, by an authorized representative of such Dutch Loan Party, dated the Effective Date and certifying (A) that attached thereto is a true and complete copy of the by-laws or similar document of such Loan Party as in effect on the Effective Date and at all times since a date prior to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors (or similar governing body) of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such Person is a party and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (C) that the certificate or articles of incorporation or other formation documents of such Loan Party have not been amended since the date of the last amendment thereto furnished pursuant to clause (i) above and (D) as to the incumbency and specimen signature of each officer executing any Loan Document or any other document delivered in connection herewith on behalf of such Loan Party and (iii) a certificate of another officer as to the incumbency and specimen signature of the Authorized Officer, or authorized representative in the case of a Dutch Loan Party, executing the certificate pursuant to clause (ii) above.

(e) [Reserved].

(f) Approved Budget. Each Administrative Agent shall have received the initial Approved Budget, in form and substance reasonably acceptable to the Requisite Revolving Lenders and the Requisite Term Lenders.

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(g) Bankruptcy Related Conditions.

(i) The Loan Parties shall have filed the Cases with the Bankruptcy Court on the Petition Date.

(ii) None of the Cases shall have been dismissed or converted to a Chapter 7 case.

(iii) No trustee under Chapter 7 or Chapter 11 of the Bankruptcy Code or examiner with enlarged powers beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code shall have been appointed in the Cases.

(iv) The Bankruptcy Court shall have entered the Interim DIP Order in form and substance acceptable to the Administrative Agents and the Collateral Agent (in their capacities as such), the Requisite Revolving Lenders and the Requisite Term Lenders and reasonably acceptable to the Borrower within five (5) Business Days after the Petition Date and not more than one (1) Business Day prior to the Effective Date and the Interim DIP Order shall be in full force and effect; all material governmental and third party consents and approvals necessary in connection with this Agreement and the transactions contemplated hereby shall have been obtained.

(v) The making of the Interim New Money Term Loan and the issuance of Letters of Credit shall not violate any requirement of law in any material respect and shall not be enjoined, temporarily, preliminarily or permanently, and the amount of the New Money Term Loan to be made on the Effective Date shall not exceed the amount authorized by the Interim DIP Order.

(vi) The Restructuring Support Agreement shall not have terminated and shall be in full force and effect.

(vii) All “first day orders” entered in the Cases at the time of commencement of the Cases shall be reasonably satisfactory in form and substance to the Requisite Revolving Lenders, the Requisite Term Lenders and the Administrative Agents.

(h) Collateral Documents. The Collateral Agent shall have received the results of a recent customary Lien search in each relevant jurisdiction in the United States with respect to the Parent, the Borrowers and each Person that shall be a Guarantor as of the Effective Date (whether as a condition to the Effective Date or subsequent to the occurrence thereof). The Secured Parties shall have valid and perfected Liens on the Collateral, to the extent contemplated hereby, and pursuant to the other Loan Documents, including the Interim DIP Order. The Pledge and Security Agreement and the other Collateral Documents listed on Schedule 3.1 shall be in full force and effect on the Effective Date, and each document (including each Uniform Commercial Code financing statement) shall have been delivered to the Collateral Agent. The Pledged Stock and the Pledged Notes shall be duly and validly pledged to the Collateral Agent for the ratable benefit of the Secured Parties, and, subject to Section 7.14, certificates representing such pledged Collateral (if any), accompanied by instruments of transfer and stock powers endorsed in blank other than the certificates and stock powers representing equity interest in Schedule 3.1(h), shall have been delivered to the Collateral Agent.

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(i) Effective Date Certificate. Each Administrative Agent shall have received a certificate of a Responsible Officer of the Parent and each Borrower to the effect that the condition set forth in Section 3.3(b) has been satisfied.

(j) USA Patriot Act. To the extent requested at least ten days prior to the Effective Date, the Agents and the Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act at least five days prior to the Effective Date.

(k) Fees and Expenses; Advisor Engagement. There shall have been paid (i) to each Administrative Agent, for the account of each Administrative Agent and the Lenders, as applicable, and to the Arrangers and the Bookrunners, for its own account, all invoiced fees and expenses (including fees and expenses of counsel to each Administrative Agent and the Collateral Agent to the extent the Borrowers receive invoices therefor at least one Business Day prior to the Effective Date) due and payable in connection with this Agreement or the Prepetition Credit Facilities on or before the Effective Date, and (ii) to each Lender, an initial yield payment equal to the sum of (x) 2.25% of any Revolving Commitments (as if the Effective Date were the Final Facility Effective Date) of such Lender, but excluding any amount of any Active Revolving Commitments (as defined in the Existing Super-Priority Credit Agreement) of such Lender that are to be rolled up in accordance with Section 2.4 and (y) 2.25% of any Term Commitments (as of the Effective Date) of such Lender and (iii) to the Persons entitled thereto, their respective portions of a backstop fee equal to the sum of (x) 2.25% of the Revolving Commitments (as if the Effective Date were the Final Facility Effective Date), but excluding the amount of any Active Revolving Commitments (as defined in the Existing Super-Priority Credit Agreement) that are to be rolled up in accordance with Section 2.4 and (y) 2.25% of the Term Commitments (as of the Effective Date).

Section 3.2 Conditions Precedent to Final Facility Effective Date

The obligation of the Term Lenders to make Term Loans pursuant to Section 2.1(a)(ii) and any applicable increase in the Revolving Commitments on the Final Facility Effective Date contemplated in the definition thereof shall not become effective until the date after the Effective Date on which each of the following conditions precedent shall have been satisfied or duly waived by the Requisite Term Lenders and the Requisite Revolving Lenders (such date, the “Final Facility Effective Date”):

(a) Deliveries at Final Facility Effective Date. All of the conditions precedent set forth on Annex 3.2 shall have been satisfied or duly waived by the Requisite Term Lenders and Requisite Revolving Lenders; and

(b) Bankruptcy Related Conditions.

(i) The Final DIP Order (A) shall have been entered on the docket of the Bankruptcy Court and the Final DIP Order shall approve the full amount of the Facilities and (B) shall be in full force and effect and shall not have been vacated, stayed, reversed, modified or amended in any respect without the written consent of the Requisite

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Term Lenders and Requisite Revolving Lenders (such consent not to be unreasonably withheld) , and no motion for reconsideration of the Final DIP Order shall have been timely filed by a Debtor or any of their Subsidiaries.

(ii) All “second day orders” entered in the Cases at the time of entry of the Final DIP Order shall be reasonably satisfactory in form and substance to the Requisite Term Lenders, the Requisite Revolving Lenders, and the Administrative Agents.

(c) Effective Date Certificate. Each Administrative Agent shall have received a certificate of a Responsible Officer of the Parent and each Borrower to the effect that the condition set forth in Section 3.3(b) has been satisfied.

(d) Fees and Expenses; Advisor Engagement. (i) There shall have been paid to each Administrative Agent, for the account of each Administrative Agent and the Lenders, as applicable, all fees and expenses (including fees and expenses of counsel to each Administrative Agent and the Collateral Agent to the extent the Borrowers receive invoices therefor at least one Business Day prior to the Final Facility Effective Date) due and payable in connection with this Agreement or the Prepetition Credit Facilities on or before the Final Facility Effective Date.

(e) Revolving Letter of Credit Issuer Commitments. The aggregate Revolving Letter of Credit Issuer Commitments of Revolving Issuers under this Agreement as of the Final Facility Effective Date shall total at least $743,000,000.00.

Section 3.3 Conditions Precedent to Each Loan and Letter of Credit

The obligation of the Lenders to make any Loan and of each Issuer on any date to Issue any Letter of Credit is subject to the satisfaction of each of the following conditions precedent:

(a) Request for Borrowing of Loans or Issuance of Letter of Credit. With respect to any Loan, the Applicable Administrative Agent shall have received a duly executed Notice of Borrowing, and, with respect to any Letter of Credit, the Issuer and the Revolving Administrative Agent shall have received a duly executed Letter of Credit Request.

(b) Representations and Warranties; No Defaults. The following statements shall be true on the date of such Loans or Issuance, both before and after giving effect thereto and, in the case of any Loan, to the application of the proceeds therefrom:

(i) the representations and warranties set forth in Article IV and in the other Loan Documents that have no materiality or Material Adverse Effect qualification shall be true and correct in all material respects and the representations and warranties set forth in Article IV and in the other Loan Documents that have a materiality or Material Adverse Effect qualification shall be true and correct in all respects, in each case with the same effect as though made on and as of such date or, to the extent such representations and warranties expressly relate to an earlier date, as of such earlier date; and

(ii) no Default or Event of Default shall have occurred and be continuing or shall occur as a result of such Loan or Issuance or from the application of proceeds thereof.

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(c) Alternative Currencies. Immediately after giving effect to any proposed Issuance of a Letter of Credit denominated in an Alternative Currency, the sum of the Dollar Equivalent of the Revolving Letter of Credit Obligations or Cash Secured LC Obligations, as applicable, at such time in respect of each Letter of Credit denominated in an Alternative Currency would not exceed the Alternative Currency Cap as a result of such proposed Issuance.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

To induce the Lenders, the Issuers and each Administrative Agent to enter into this Agreement, the Parent and each Borrower party hereto represents and warrants each of the following to the Lenders, the Issuers and each Administrative Agent, on and as of the Effective Date and on and as of each date as required by Section 3.3(b)(i).

Section 4.1 Corporate Existence; Compliance with Law

Each of the Parent, each Borrower and each Restricted Subsidiary (a) is duly organized, validly existing and, except where the failure to be in good standing could not reasonably be expected to have a Material Adverse Effect, in good standing, to the extent applicable, under the laws of the jurisdiction of its organization, (b) is duly qualified to do business as a foreign corporation and in good standing, to the extent applicable, under the laws of each jurisdiction where such qualification is necessary, except where the failure to be so qualified or in good standing could not reasonably be expected to have a Material Adverse Effect, (c) subject to any restrictions arising on account of such Loan Party’s status as a “debtor” under the Bankruptcy Code, has all requisite corporate or other organizational power and authority and the legal right to own, pledge, mortgage and operate its properties, to lease the property it operates under lease and to conduct its business as now or currently proposed to be conducted, (d) is in compliance with its Constituent Documents, (e) is in compliance with all Requirements of Law, including the Investment Company Act of 1940, as amended, except where the failure to be in compliance could not reasonably be expected to have a Material Adverse Effect; provided, however, that where such compliance relates to any Anti-Corruption Laws, Anti-Money Laundering Laws or Sanctions, each of the Parent, each Borrower and the Parent’s Subsidiaries are in compliance in all material respects; and (f) subject to entry of the DIP Orders, has all necessary licenses, permits, consents or approvals from or by, has made all necessary filings with, and has given all necessary notices to, each Governmental Authority having jurisdiction, to the extent required for such ownership, operation and conduct, except for licenses, permits, consents, approvals or filings that can be obtained or made by the taking of ministerial action to secure the grant or transfer thereof or the failure of which to obtain or make could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 4.2 Corporate Power; Authorization; Enforceable Obligations

(a) Subject to entry and the terms of the DIP Orders and to any restrictions arising on account of any Loan Party’s status as a “debtor” under the Bankruptcy Code, the execution, delivery, and performance by each Loan Party of the Loan Documents to which it is a party and the consummation of the Transactions:

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(i) are within such Loan Party’s corporate, limited liability company, partnership or other organizational powers;

(ii) have been or, at the time of delivery thereof pursuant to this Agreement will have been duly authorized by all necessary corporate, limited liability company or partnership action, including the consent of shareholders, partners and members where required;

(iii) do not and will not (A) contravene such Loan Party’s respective Constituent Documents, (B) violate any other Requirement of Law applicable to such Loan Party (including Regulations T, U and X of the Federal Reserve Board), or any order or decree of any Governmental Authority or arbitrator applicable to such Loan Party, other than any violation of any Requirement of Law relating to (I) any Excepted Consent having not been obtained at the time such representation is made or (II) any consent, authorization, approval, filing or registration with or from any non-U.S. Governmental Authority outside the control of the Parent or its Restricted Subsidiaries that each Administrative Agent agrees, in its sole discretion, to be obtained, delivered or filed after the date on which the representation in this clause (iii) is made, (C) conflict with or result in the breach of, or constitute a default under, or result in or permit the termination or acceleration of, any lawful Contractual Obligation of such Loan Party or any of its Restricted Subsidiaries, other than in the case of this clause (C) any such conflict, breach, default, termination or acceleration that could not reasonably be expected to have a Material Adverse Effect, or (D) result in the creation or imposition of any Lien upon any property of such Loan Party, other than those in favor of the Secured Parties pursuant to the Collateral Documents and the DIP Orders; and

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(iv) do not require the consent of, authorization by, approval of, notice to, or filing or registration with, any Governmental Authority (other than the DIP Orders) or any other Person, other than (A) those that have been obtained or made and are in full force and effect, (B) resolutions of the board of directors or other similar authority of each Loan Party that have been (or such later date upon which such Person becomes a Guarantor), obtained or made, (C) the Excepted Consents, (D) any consent, authorization, approval, filing or registration with or from any non-U.S. Governmental Authority outside the control of the Parent or its Restricted Subsidiaries that each Administrative Agent agrees, in its sole discretion, to be obtained, delivered or filed after the date on which the representation in this clause (iv) is made, and (E) with respect to the Collateral, filings required to perfect the Liens created by the Collateral Documents.

(b) Subject to entry and the terms of the DIP Orders, this Agreement has been, and each of the other Loan Documents will have been upon delivery thereof pursuant to the terms of this Agreement, duly executed and delivered by each Loan Party who is a party thereto. Subject to entry and the terms of the DIP Orders, this Agreement is, and the other Loan Documents will be, when delivered, the legal, valid and binding obligation of each Loan Party who is a party thereto, enforceable against such Loan Party in accordance with its terms, subject to (i) except in the case of each Loan Party that is a Debtor, applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and (ii) general principles of equity, regardless of whether considered in a proceeding in equity or at law.

Section 4.3 Ownership of Borrowers; Subsidiaries

(a) All of the outstanding capital stock of the Parent and each Borrower is validly issued, fully paid and nonassessable.

(b) Set forth on Schedule 4.3 is a complete and accurate list showing, as of the Effective Date, all Subsidiaries of the Parent and, as to each such Subsidiary, its correct legal name, the jurisdiction of its organization, the number of shares of each class of Stock authorized (if applicable), the number outstanding on the Effective Date and the percentage of the outstanding shares of each such class owned (directly or indirectly) by the Parent. Except as set forth on Schedule 4.3, as of the Effective Date no Stock of any Restricted Subsidiary of the Parent is subject to any outstanding option, warrant, right of conversion or purchase of any similar right. Except as set forth on Schedule 4.3, all of the outstanding Stock of each Restricted Subsidiary of the Parent owned (directly or indirectly) by the Parent has been validly issued, is fully paid and non-assessable (to the extent applicable) and is owned by the Parent or a Subsidiary of the Parent, free and clear of all Liens, options, warrants, rights of conversion or purchase or any similar rights. As of the Effective Date, except as set forth on Schedule 4.3, neither the Parent nor any such Restricted Subsidiary is a party to, or has knowledge of, any agreement restricting the transfer or hypothecation of any Stock of any such Subsidiary, other than the Loan Documents and, with respect to any Subsidiary that is not a Wholly-Owned Subsidiary, the governing documents of such Subsidiary.

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Section 4.4 Financial Statements

(a) The Closing Date Financial Statements, copies of which have been furnished to each Lender, fairly present in all material respects the consolidated financial condition of the Persons covered thereby as at such dates and the consolidated results of the operations of the Persons covered thereby for the period ended on such dates, all in conformity with GAAP (subject to the absence of footnote disclosure and normal year-end audit adjustments in the case of the Closing Date Financial Statements referenced in clause (b) of the definition thereof).

(b) The Projections have been prepared by the Parent taking into consideration past operations of its business, and reflect in all material respects as of the Effective Date, projections for the period beginning approximately January 1, 2019 and ending approximately December 31, 2023 on a Fiscal Year by Fiscal Year basis. The Projections are based upon estimates and assumptions stated therein, all of which the Parent believes in all material respects as of the Effective Date, to be reasonable in light of current conditions and current facts known to the Parent (other than any necessary adjustments due to fees payable in accordance herewith) and, as of the Effective Date, reflect the Parent’s good faith estimates of the future financial performance of the Parent and its Subsidiaries and of the other information projected therein for the periods set forth therein (it being understood and agreed that financial projections are not a guarantee of financial performance and are subject to significant uncertainties and contingencies many of which are beyond the Parent’s control, no assurance can be given that any projections may be realized, and actual results may differ from the Projections and such differences may be material).

(c) Neither the Parent nor any of its Subsidiaries has, as of the Effective Date, any material obligation, contingent liability or liability for Taxes, long-term leases (other than operating leases) or unusual forward or long-term commitment that is not reflected in the financial statements referred to in clause (a) above and not otherwise permitted by this Agreement.

(d) [Reserved].

(e) The consolidated balance sheets and the related statements of income and cash flow delivered following the Effective Date pursuant to Section 6.1, copies of which shall be furnished to each Lender, shall fairly present in all material respects the consolidated financial condition of the Persons covered thereby as at such dates and the consolidated results of the operations of the Persons covered thereby for the period ended on such dates, all in conformity with GAAP.

Section 4.5 Material Adverse Effect

Since the Effective Date there has been no event or development that has had or could reasonably be expected to have a Material Adverse Effect.

Section 4.6 [Reserved]

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Section 4.7 Litigation

Other than the Cases, and except as set forth on Schedule 4.7, there are no pending or, to the knowledge of the Parent or Borrowers, threatened actions, investigations or proceedings against the Parent, any Borrower, or any of the Parent’s other Restricted Subsidiaries before any court, Governmental Authority or arbitrator other than those that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect. Schedule 4.7 lists all litigation pending against any Loan Party as of the Effective Date that, if adversely determined, could be reasonably expected to have a Material Adverse Effect.

Section 4.8 Taxes

Except to the extent prohibited by the Bankruptcy Code and not otherwise authorized by the Bankruptcy Court, all federal income and other material tax returns, reports and statements (collectively, the “Tax Returns”) required to be filed by the Parent or a Borrower or any other Tax Affiliates have been filed with the appropriate Governmental Authorities in all jurisdictions in which such Tax Returns are required to be filed, all such Tax Returns are true and correct in all material respects, and all material Taxes, charges and other impositions reflected therein or otherwise due and payable have been paid prior to the date on which any fine, penalty, interest, late charge or loss may be added thereto for non-payment thereof (whether or not shown on any Tax Return) except where contested in good faith and by appropriate proceedings if adequate reserves therefor have been established on the books of the Parent, the Borrowers or such Tax Affiliate in conformity with GAAP. Except to the extent prohibited by the Bankruptcy Code and not otherwise authorized by the Bankruptcy Court, the Parent, each Borrower and each other Tax Affiliate have deducted and withheld and timely paid to the respective Governmental Authorities all material amounts required to be deducted and withheld.

Section 4.9 Full Disclosure

All information prepared or furnished by or on behalf of any Loan Party and delivered to the Lenders in writing in connection with this Agreement or the consummation of the transactions contemplated hereunder or thereunder (in each case, taken as a whole), other than any information of a general economic or industry specific nature, does not, as of the time of delivery of such information, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein or herein not misleading, other than information of a general economic or industry nature; provided, however, that, to the extent any such information was based upon, or constituted, a forecast or projection, such Loan Party represents only, in respect of such projection or forecast, that it acted in good faith and utilized reasonable assumptions and due care in the preparation of such information.

Section 4.10 Margin Regulations

No Loan Party is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Federal Reserve Board), and no proceeds of any Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock, (i) directly or indirectly in connection with the consummation of the Business Combination or (ii) in all other cases, in contravention of Regulation T, U or X of the Federal Reserve Board. Margin stock constitutes less than 25% of the value of those assets of the Parent and its Subsidiaries, taken as a group, which are subject to any limitation on sale, pledge, or other restriction hereunder.

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Section 4.11 No Burdensome Restrictions; No Defaults

(a) Neither the Parent, any Borrower, nor any other Restricted Subsidiary of the Parent (i) is a party to any Contractual Obligation (x) the compliance with which could reasonably be expected to have a Material Adverse Effect or (y) the performance of which by any thereof would result in the creation of a Lien (other than a Lien permitted under Section 8.2) on the property or assets of any thereof or (ii) is subject to any charter restriction that could reasonably be expected to have a Material Adverse Effect.

(b) Except to the extent subject to the Automatic Stay, neither the Parent, any Borrower, nor any other Restricted Subsidiary of the Parent is in default under or with respect to any Contractual Obligation owed by it, other than, in either case, those defaults that could not reasonably be expected to have a Material Adverse Effect.

Section 4.12 Statutory Indebtedness Restrictions

Neither the Parent, any Borrower, nor any other Restricted Subsidiary of the Parent is (a) an “investment company” or a company “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended or (b) subject to regulation under the Federal Power Act.

Section 4.13 Use of Proceeds

(a) The proceeds of the Term Loans are being used solely by the Borrowers for the following purposes: (i) to pay certain costs, fees, interest, payments and expenses related to the this Agreement or the Cases, including funding the Carve Out and payment of Professional Fees, (ii) to pay Adequate Protection Payments, (iii) to fund the working capital needs, capital improvements and expenditures of the Loan Parties during the Cases (other than payments to trade vendors for penalty interest payments (including liquidated damages but excluding, for the avoidance of doubt, customary liquidated damages to customers) unless such payments have otherwise been specified in the Approved Budget or authorized pursuant to the DIP Orders), and (iv) fund the costs of the administration of the Cases and the consummation of the restructuring, in each case subject to the Approved Budget. The proceeds of the Term Loans shall not be used to support any hedging obligations (other than the Hedging Obligations), any bilateral letter of credit obligations or surety obligations or to make any payments to trade vendors for penalty interest payments (including liquidated damages but excluding, for the avoidance of doubt, customary liquidated damages to customers) unless otherwise specified in the Approved Budget or authorized pursuant to the DIP Orders.

(b) Letters of Credit are being used solely by the Borrowers to support warranties, bid bonds, payment or performance obligations and for other general corporate purposes by the Borrowers, the Parent, the Parent’s Subsidiaries, Joint Ventures and Affiliates, in each case in accordance with the Approved Budget, but shall not support any hedging obligations, any bilateral letter of credit obligations or surety obligations or to make any payments to trade vendors for penalty interest payments (including liquidated damages but excluding, for the avoidance of doubt, customary liquidated damages to customers) unless otherwise specified in the Approved Budget or authorized pursuant to the DIP Orders.

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Section 4.14 Insurance

All material policies of insurance of any kind or nature currently maintained by the Parent, a Borrower or any other Restricted Subsidiary, including policies of fire, theft, property damage, other commercial general liability, employee fidelity and workers’ compensation, are in full force and effect and are of a nature and provide such coverage as is sufficient and as is customarily carried by businesses of the size and character of such Person.

Section 4.15 Labor Matters

(a) There are no strikes, work stoppages, slowdowns or lockouts pending or, to the knowledge of the Parent and each Borrower, threatened against or involving the Parent or any of its Restricted Subsidiaries, other than those that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(b) There are no unfair labor practices, grievances or complaints pending, or, to the knowledge of the Parent and each Borrower, threatened, against or involving the Parent or any of its Restricted Subsidiaries, nor, to the knowledge of the Parent and each Borrower, are there any unfair labor practices, arbitrations or grievances threatened involving the Parent or any of its Restricted Subsidiaries, other than those that if resolved adversely to the Parent or any of its Restricted Subsidiaries, as applicable, could not reasonably be expected to have a Material Adverse Effect.

(c) Except as set forth on Schedule 4.15, as of the Effective Date, there is no collective bargaining agreement covering any employee of the Parent, the Borrowers or any other Restricted Subsidiary. Except as set forth on Schedule 4.15, with respect to employees of the Parent, the Borrowers or any other Restricted Subsidiary not already covered by a collective bargaining agreement set forth on Schedule 4.15, as of the Effective Date no union representation question exists with respect to such employees and, to the knowledge of the Parent and each Borrower, no union organization activity is taking place as of the Effective Date.

Section 4.16 ERISA

(a) Each Employee Benefit Plan that is intended to qualify under Section 401 of the Code has received a favorable determination letter from the IRS indicating that such Employee Benefit Plan is so qualified and nothing has occurred subsequent to the issuance of such determination letter which could cause such Employee Benefit Plan to lose its qualified status and any trust created under any Employee Benefit Plan is exempt from Tax under the provisions of Section 501 of the Code, except where such failures could not reasonably be expected to have a Material Adverse Effect.

(b) The Parent, each Borrower and each other Restricted Subsidiary, each Guarantor and each of their respective ERISA Affiliates is in material compliance with all applicable provisions and requirements of ERISA, the Code and applicable Employee Benefit Plan provisions with respect to each Employee Benefit Plan except for non-compliances that could not reasonably be expected to have a Material Adverse Effect.

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(c) With respect to each Title IV Plan and each Multiemployer Plan, the Parent, each Borrower and each other Restricted Subsidiary, and each of their respective ERISA Affiliates has made all contributions required under ERISA and the Code and, in respect of each Title IV Plan, are in material compliance with the minimum funding standard of Section 412 of the Code (in each case, whether or not waived in accordance with Section 412(c) of the Code).

(d) Except as set forth on Schedule 4.16(d) to this Agreement, there has not been, nor is there reasonably expected to occur, any ERISA Event other than those that, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(e) Except (i) to the extent required under Section 4980B of the Code or similar state laws, and (ii) with respect to which the aggregate liability, calculated on a FAS 106 basis as of December 31, 2017, does not exceed $65,000,000.00, no Employee Benefit Plan provides health or welfare benefits (through the purchase of insurance or otherwise) to any retired or former employees, consultants or directors (or their dependents) of the Parent, any Borrower or any other Restricted Subsidiary of the Parent, or any of their respective ERISA Affiliates.

(f) Except as set forth on Schedule 4.16(d) to this Agreement, none of the Parent, any Borrower or any other Restricted Subsidiary of the Parent, or any of their respective ERISA Affiliates has incurred or reasonably expects to incur any Withdrawal Liability with respect to any Multiemployer Plan. The Parent, each Borrower and each other Restricted Subsidiary of the Parent and each of their respective ERISA Affiliates has complied with the requirements of Section 515 of ERISA with respect to each Multiemployer Plan and are not in material “default” (as defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan.

(g) The Loan Parties are not and will not be using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans to repay the Loans, the Letters of Credit or the Commitments.

Section 4.17 Environmental Matters

Except as disclosed on Schedule 4.17 to this Agreement:

(a) The operations of the Parent, each Borrower and each other Restricted Subsidiary have been and are in compliance with all Environmental Laws, including obtaining and complying with all required environmental, health and safety Permits, other than non-compliances that, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(b) None of the Parent, any Borrower or any other Restricted Subsidiary or any Real Property currently or, to the knowledge of the Parent or any Borrower, previously owned, operated or leased by or for the Parent, a Borrower or any other Restricted Subsidiary is subject to any pending or, to the knowledge of the Parent or any Borrower, threatened, claim, order, agreement, notice of violation, notice of potential liability or is the subject of any pending or threatened proceeding or governmental investigation under or pursuant to Environmental Laws other than those claims, orders, agreements, notices, proceedings or investigations that, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

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(c) To the knowledge of the Parent or any Borrower, there are no facts, circumstances or conditions arising under Environmental Law relating to the operations or ownership of the Parent or any of its Restricted Subsidiaries or of Real Property owned, operated or leased by the Parent or any of its Restricted Subsidiaries that are not specifically included in the financial information furnished to the Lenders other than those that, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

Section 4.18 Intellectual Property

Except where the failure to do so could not, taken as a whole, reasonably be expected to have a Material Adverse Effect, the Parent, the Borrowers and the other Restricted Subsidiaries own or license or otherwise have the right to use all licenses, permits, patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, copyright applications, franchises, authorizations and other intellectual property rights (including all Intellectual Property as defined in the Pledge and Security Agreement) that are necessary for the operations of their respective businesses, without infringement upon or conflict with the rights of any other Person with respect thereto. Except where the failure to do so could not, taken as a whole, reasonably be expected to have a Material Adverse Effect, no slogan or other advertising device, product, process, method, substance, part or component, or other material now employed, or now contemplated to be employed, by the Parent, the Borrowers or any other Restricted Subsidiary infringes upon or conflicts with any rights owned by any other Person, and no claim or litigation regarding any of the foregoing is pending or threatened.

Section 4.19 Title; Real Property

(a) Each of the Parent, each Borrower and the other Restricted Subsidiaries has good and marketable title (or the applicable jurisdictional equivalent of good and marketable title) to, or valid leasehold interests in, or other valid contractual occupancy or use right in, all of its material properties and assets (including each Mortgaged Property) and good title to, or valid leasehold interests in, all personal property, in each case that is purported to be owned or leased by it, including those reflected on the most recent Financial Statements delivered by the Parent, and none of such properties and assets is subject to any Lien, except Liens permitted under Section 8.2. The information provided by the Parent to the Administrative Agents, the Collateral Agent and the Lenders with respect to each Mortgaged Property is true and correct in all material respects; provided that any information provided by or on behalf of the Loan Parties in response to flood due diligence and flood insurance compliance inquiries shall be true and correct in all respects.

(b) Set forth on Schedule 4.19 is a complete and accurate list, as of the Effective Date of all (a) owned Real Property of the Loan Parties (i) located in the United States with a reasonably estimated Fair Market Value in excess of $10,000,000.00 showing, as of the Effective Date, the street address, county and the record owner thereof and (ii) located outside of the United States with a reasonably estimated Fair Market Value in excess of $5,000,000.00 showing, as of the Effective Date, the street address, jurisdiction and the record owner thereof and (b) leased Real Property of the Loan Parties (i) located in the United States with net annual lease payments in excess of $10,000,000.00 showing, as of the Effective Date, the street address (or other readily identifiable description) and county thereof and (ii) located outside of the United States with net annual lease payments in excess of $5,000,000.00 showing, as of the Effective Date, the street address (or other readily identifiable description) and jurisdiction thereof.

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(c) No portion of any Real Property has suffered any material damage by fire or other casualty loss that has not heretofore been completely repaired and restored to its original condition other than those that could not reasonably be expected to have a Material Adverse Effect.

(d) Except as could not reasonably be expected to have a Material Adverse Effect, (a) each Loan Party has obtained and holds all Permits required in respect of its Real Property and for the operation of each of its businesses as presently conducted and as proposed to be conducted, (b) all such Permits are in full force and effect, and each Loan Party has performed and observed all requirements of such Permits, (c) no event has occurred that allows or results in, or after notice or lapse of time would allow or result in, revocation or termination by the issuer thereof or in any other impairment of the rights of the holder of any such Permit, (d) [reserved], (e) each Loan Party reasonably believes that each of its Permits will be timely renewed and complied with, and that any additional Permits that may be required of such Person will be timely obtained and complied with, and (f) neither the Parent, nor either Borrower has any knowledge or reason to believe that any Governmental Authority is considering limiting, suspending, revoking or renewing on materially burdensome terms any such Permit.

(e) None of the Parent, any Borrower or any other Restricted Subsidiary has received any notice, or has any knowledge, of any pending condemnation proceeding, or of any condemnation proceeding threatened in writing, affecting any material Real Property or any part thereof, except those that could not reasonably be expected to have a Material Adverse Effect.

(f) Each of the Loan Parties, and, to the knowledge of the Parent and each Borrower, each other party thereto, has complied with all material obligations under all Leases to which it is a party other than those the failure with which to comply could not reasonably be expected to have a Material Adverse Effect and, to the knowledge of the Parent and each Borrower, all such leases are legal, valid, binding and in full force and effect and are enforceable in accordance with their terms other than those the failure of which to so comply with the foregoing could not reasonably be expected to have a Material Adverse Effect. No landlord Lien has been filed of record, and, to the knowledge of the Parent and each Borrower, no claim is being asserted, with respect to any lease payment under any Lease other than those that could not reasonably be expected to have a Material Adverse Effect.

(g) There are no pending or, to the knowledge of the Parent and each Borrower, proposed special or other assessments for public improvements or otherwise affecting any material portion of the Real Property, nor are there any contemplated improvements to such owned Real Property that may result in such special or other assessments, other than those that could not reasonably be expected to have a Material Adverse Effect.

Section 4.20 Mortgaged Vessels

Each Mortgaged Vessel (a) is owned and operated by a Subsidiary Guarantor, (b) that is operated, is operated in all material respects in compliance with all Requirements of Law applicable to it (including, in the case of each Mortgaged Vessel that is in class on the Effective Date, compliance in all material respects with all requirements of such classification as required by the relevant classification society for such Mortgaged Vessel) and (c) is maintained in all material respects in accordance with all requirements set forth in the Collateral Documents. Each Mortgaged Vessel is covered by all such insurance as is required by the respective Mortgage with respect to such Mortgaged Vessel.

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Section 4.21 Anti-Corruption Laws and Sanctions

The Parent has implemented, maintains in effect and enforces policies and procedures intended to ensure compliance by the Parent, each Borrower, the other Subsidiaries of the Parent and their respective directors, officers, employees and agents (in their respective activities on behalf of the Parent, each Borrower and the other Subsidiaries of the Parent) with applicable Anti-Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions, and the Parent, each Borrower and the other Restricted Subsidiaries of the Parent, its and their respective officers and directors and, to the knowledge of the Parent and each Borrower, employees and agents (in their respective activities on behalf of the Parent, each Borrower and the other Restricted Subsidiaries of the Parent), are in compliance with applicable Anti-Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions, in each case in all material respects. None of the Parent, any Borrower, any other Restricted Subsidiary of the Parent, any of their respective directors or officers or any Borrower or such Subsidiary, or, to the knowledge of the Parent or any Borrower, any of their respective employees or any of their agents that will act in any capacity in connection with or benefit from the credit facilities established hereby, (a) is a Sanctioned Person with whom the Parent, the Borrowers or such Restricted Subsidiary, as applicable, is prohibited from transacting business pursuant to any applicable Sanction or (b) is currently engaging or has engaged in any dealings or transactions with, involving or for the benefit of a Sanctioned Person, or in or involving any Sanctioned Country, in each case in violation of applicable Sanctions.

Section 4.22 EEA Financial Institution

No Loan Party is an EEA Financial Institution.

Section 4.23 Security Instruments

Subject to the entry of the DIP Orders and to the Security Principles, the security interests created in favor of the Collateral Agent for the benefit of the Secured Parties under the Collateral Documents constitute first priority perfected security interests (subject to Liens permitted by Section 8.2) in the Collateral referred to therein to the extent that the creation, perfection or priority, as applicable, is governed by the laws of the United States, any State thereof or any other jurisdiction under whose laws the Collateral Agent or any Administrative Agent has reasonably requested action to be taken under Section 7.11.

Section 4.24 Regulation H

No Mortgaged Property located in the United States is a Flood Hazard Property unless the Collateral Agent shall have received the following: (a) the applicable Loan Party’s written acknowledgment of receipt of written notification from the Collateral Agent (i) as to the fact that such Mortgaged Property is a Flood Hazard Property, (ii) as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program and (iii) such other flood hazard determination forms, notices and confirmations thereof as reasonably requested by the Collateral Agent and (b) copies of insurance policies or customary certificates of insurance of the applicable Loan Party evidencing flood insurance and naming the Collateral Agent as loss payee on behalf of the Lenders. All flood hazard insurance policies required hereunder have been obtained and remain in full force and effect, and the premiums thereon have been paid in full.

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Section 4.25 USA Patriot Act

Each of the Loan Parties and their respective Subsidiaries are in compliance, in all material respects, with (a) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto and (b) the USA Patriot Act.

Section 4.26 Status of Obligations; Perfection and Priority of Security Interests

The Obligations shall have the status and priority set forth in Section 2.24, subject to the Carve Out in all respects. The Cash Secured LC Obligations shall have the status and priority set forth in Section 2.24.

Section 4.27 DIP Orders

The DIP Orders are in full force and effect and shall not have been vacated, stayed, reversed, modified or amended in any respect without the written consent of the Administrative Agents and the Collateral Agent (in each case in their capacities as such) and the Requisite Revolving Lenders and the Requisite Term Lenders, and no motion for reconsideration of any DIP Order has been timely filed by a Debtor or any of their Subsidiaries.

ARTICLE V

FINANCIAL COVENANTS

From and after the Effective Date, the Parent and the Borrowers agree with the Lenders, the Issuers and the Administrative Agents that:

Section 5.1 Permitted Budget Variances

As of any Variance Testing Date, the Loan Parties shall not allow (i) the aggregate cumulative actual total receipts of the Parent and its Restricted Subsidiaries for such Variance Testing Period to be less than the projected amount therefor set forth in the most recently delivered Approved Budget by more than 15%, (ii) the aggregate cumulative actual total disbursements (as noted in the most recently delivered Approved Budget as “Total Covenant Disbursements”) by the Parent and its Restricted Subsidiaries (A) for the Variance Testing Period to be more than the projected amount therefor set forth in the most recently delivered Approved Budget by more than 15% and (B) for each week within such Variance Testing Period, to be more than the projected amount therefor set forth in the most recently delivered Approved Budget by more than (x) 20%, with respect to each of the first week and on a cumulative basis for the two-week period ending with the second week of such Variance Testing Period and (y) 15% on a cumulative basis with respect to the three-week period ending with the third week and the four-week period ending with the fourth week, in each case of such Variance Testing Period and (iii) the aggregate cumulative actual vendor disbursements and JV infusions by the Parent and its Restricted Subsidiaries with respect to the Specified Projects (as noted in the most recently delivered Approved Budget as “Specified Project Cash Flow Forecast”) for such Variance Testing Period to be more than the projected amount therefor set forth in the most recently delivered Approved Budget by more than

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15% and for each week within such Variance Testing Period, to be more than the projected amount therefor set forth in the most recently delivered Approved Budget by more than (x) 20%, with respect to each of the first week and on a cumulative basis for the two-week period ending with the second week of such Variance Testing Period and (y) 15% on a cumulative basis with respect to the three-week period ending with the third week and the four-week period ending with the fourth week, in each case of such Variance Testing Period.

Section 5.2 Minimum Adjusted EBITDA

Beginning with the Fiscal Quarter ending March 31, 2020, the Parent and each Borrower shall not permit EBITDA for the most recently ended four Fiscal Quarter period for which financial statements have been delivered pursuant to Section 6.1(a) or (b) to be less than the minimum amount set forth below as set forth opposite such ended Fiscal Quarter:

Test Period End Date Adjusted EBITDA

March 31, 2020 Not tested.

June 30, 2020 $230,000,000.00

September 30, 2020 $410,000,000.00

December 31, 2020 $640,000,000.00

Section 5.3 [Reserved]

Section 5.4 Maximum Specified Project Charges

Beginning with the Fiscal Quarter ending December 31, 2019, the Parent and each Borrower shall not allow the Project Charges for the most recently ended Fiscal Quarter period for which financial statements have been delivered pursuant to Section 6.1(a) or (b) to be more than the maximum amount set forth below as set forth opposite such ended Fiscal Quarter:

Test Period End Date Maximum Project Charges

December 31, 2019 $260,000,000.00

March 31, 2020 $50,000,000.00

June 30, 2020 $50,000,000.00

September 30, 2020 $40,000,000.00

December 31, 2020 $30,000,000.00

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The calculation of the Project Charges in reasonable detail, certified by the Borrower, shall be delivered concurrently with the financial statements under Section 6.1(a) or (b) for the Fiscal Quarter then ended.

ARTICLE VI

REPORTING COVENANTS

From and after the Effective Date, the Parent and each Borrower jointly and severally agree with the Lenders, the Issuers and each Administrative Agent to each of the following, as long as any Obligation or any Commitment remains outstanding, except as expressly directed otherwise in the DIP Orders:

Section 6.1 Financial Statements

The Parent and each Borrower shall furnish each of the following to each Administrative Agent, for delivery to the Applicable Lenders:

(a) Quarterly Reports. Within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year (unless such period is extended pursuant to applicable U.S. securities laws, rules, or regulations or SEC guidelines, in which case such deadline will be extended to the earlier of (x) the end of such period and (y) 60 days after the end of such Fiscal Quarter), consolidated unaudited balance sheets as of the close of such quarter and the related statements of income and cash flow for such quarter and that portion of the Fiscal Year ending as of the close of such quarter, setting forth in comparative form the figures for the corresponding period in the prior year, in each case certified by a Responsible Officer of the Parent as fairly presenting in all material respects the consolidated financial condition of the Parent and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in accordance with GAAP (subject to the absence of footnote disclosure and normal year-end audit adjustments) and accompanied by customary management discussion and analysis.

(b) Annual Reports. Within 75 days after the end of each Fiscal Year (unless such period is extended pursuant to applicable U.S. securities laws, rules, or regulations or SEC guidelines, in which case such deadline will be extended to the earlier of (x) the end of such period and (y) 120 days after the end of such Fiscal Year, consolidated balance sheets of the Parent and its Subsidiaries as of the end of such Fiscal Year and related statements of income and cash flows of the Parent and its Subsidiaries for such Fiscal Year, all prepared in conformity with GAAP and accompanied by customary management discussion and analysis and an audit opinion from Parent’s Accountants and certified, in the case of such consolidated financial statements, without qualification as to the scope of the audit or as to the Parent being a going concern (other than resulting from (x) impending debt maturities and (y) any prospective or actual breach of any financial covenant) by the Parent’s Accountants, together with the report of such accounting firm stating that (i) such financial statements fairly present in all material respects the consolidated financial condition of the Parent and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except for changes with which the Parent’s Accountants shall concur and that shall have been disclosed in the notes to the financial statements) and (ii) the examination by the Parent’s Accountants in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards.

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(c) Compliance Certificate. Together with each delivery of any financial statement pursuant to clause (a) or (b) above, a certificate of a Responsible Officer of the Parent substantially in the form of Exhibit H (each, a “Compliance Certificate”) (i) demonstrating compliance with each of the financial covenants contained in Article V (as applicable) (other than Section 5.1) in reasonable detail, (ii) identifying any Asset Sale permitted by clauses (g), (h), (i) or (n) of Section 8.4 during the Fiscal Quarter as to which such Compliance Certificate relates (or, in the case of any Compliance Certificate delivered in connection with the financial statements delivered pursuant to clause (b) above, in the last Fiscal Quarter of such Fiscal Year to which such Compliance Certificate relates) and identifying the aggregate consideration received in connection with each such identified Asset Sale, (iii) setting forth each Person that is a Material Wholly-Owned Subsidiary of the Parent that is not a Loan Party on the last day of the most recently ended Fiscal Quarter or Fiscal Year for which financial statements have been delivered pursuant clause (a) or (b) above, as applicable and (iv) stating that no Default or Event of Default has occurred and is continuing or, if a Default or an Event of Default has occurred and is continuing, stating the nature thereof and the action which the Parent has taken or proposes to take with respect thereto.

(d) Forecast and Variance Report.

(i) No later than 5:00 p.m. New York time on Wednesday, January 29, 2020, and on the fourth Wednesday after the most recently delivered Approved Budget (or, if such Wednesday is not a Business Day, the next Business Day thereafter), in each case a rolling 13-week cash flow and Letter of Credit forecast for the Parent and its Restricted Subsidiaries starting with the Saturday following such Wednesday (or, if such Wednesday is not a Business Day, such next Business Day thereafter) substantially in the form provided to the Lenders prior to the Effective Date or in a form reasonably acceptable to the Requisite Lenders and in each case in substance reasonably satisfactory, to the Requisite Lenders (the “Approved Budget”); provided that the Required Lenders shall be deemed to be satisfied by such 13-week cash flow and Letter of Credit forecast unless the Required Lenders, Centerview or FTI shall have objected by written notice to the Borrowers or their advisors (which writing may be by electronic mail) within three (3) Business Days after receipt thereof.

(ii) No later than 5:00 p.m. New York time on Friday, February 14, 2020, and on each Friday thereafter (or, if such Friday is not a Business Day, the next Business Day thereafter), with respect to Friday, February 7, 2020, and each Friday thereafter (or, if such Friday is not a Business Day, the next Business Day thereafter) (each, a “Variance Disbursement Testing Date”), in each case a variance report in a form reasonably acceptable to the Requisite Lenders setting forth the numerical variance of the actual results for disbursements as noted in the Approved Budget as “Total Covenant Disbursements” and vendor disbursements and JV infusions as noted in the Approved Budget as “Specified Project Cash Flow Forecast” in respect of each four-week period after the Effective Date (each such period, “Variance Disbursement Testing Period”) as compared to the line item included in the most recent 13-week cash flow and Letter of Credit forecast previously delivered to the Lenders, together with a qualitative explanation for any material variances.

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(iii) No later than 5:00 p.m. New York time on Friday, March 6, 2020, and on each fourth Friday thereafter (i.e., occurring 4 weeks after the immediately preceding Variance Testing Date) (or, if such Friday is not a Business Day, the next Business Day thereafter), with respect to Friday, February 28, 2020, and each fourth Friday thereafter (or, if such Friday is not a Business Day, the next Business Day thereafter) (each, a “Variance Receipts Testing Date”), in each case a variance report in a form reasonably acceptable to the Requisite Lenders setting forth the numerical variance of the actual results for cumulative total cash receipts as noted in the Approved Budget in respect of the four-week period ending on the immediately preceding Variance Receipts Testing Date (each such period, “Variance Receipts Testing Period”) as compared to the line item included in the most recent 13-week cash flow and Letter of Credit forecast previously delivered to the Lenders, together with a qualitative explanation for any material variances.

(e) [Reserved].

(f) CBI Report. After the Effective Date, no later than 5:00 p.m. New York time on the 17th day of each month (or, if such day is not a Business Day, the next Business Day thereafter), a report on CBI Legacy Projects, Entergy – Lake Charles, Entergy – St. Charles and Entergy – Montgomery County, Duke Asheville, Golden Pass, Mozambique, and all new projects in excess of $500 million substantially in the form provided to the Lenders prior to the Effective Date or otherwise reasonably acceptable to the Requisite Lenders.

(g) [Reserved].

(h) New Contracts.

(i) Promptly after the end of each Fiscal Quarter, (x) Parent shall deliver to FTI and Centerview a copy of the Parent’s risk committee materials (it being understood that such materials shall not be further distributed to the Lenders unless the Parent shall have approved such distribution in its sole discretion) relating to any project with a value in excess of $1 billion reviewed or discussed in such committee’s most recent meeting and (y) promptly following such delivery pursuant to clause (i) above, Parent shall upon request by FTI or Centerview conduct a conference call that Centerview, FTI and Ankura may attend to discuss such materials, at a date and time to be determined by the Parent.

(ii) Within 15 days after the end of each calendar month, the Parent shall deliver to FTI and Centerview a report (it being understood that such report shall not be further distributed to the Lenders unless the Parent shall have approved such distribution in its sole discretion) containing (x) any new projects with a value in excess of $1 billion have been reviewed by the Parent’s risk committee, (y) the aggregate amount of projected financing and letter of credit needs associated with such new projects, and (z) the number of such new projects since the last monthly report.

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(iii) No later than Friday of each week (or if such Friday is not a Business Day, then the next Business Day), the Parent shall deliver to Centerview, Ankura and FTI a weekly report relating to any new bids (since the most recent report delivered by the Parent) with a value in excess of $500 million and containing a summary of bid reviews in respect of each such new bid (including access to management upon reasonable notice and materials in substantially the form delivered by the Parent prior to the Effective Date or such other form reasonably acceptable to such advisors).

The Parent, each Borrower and each Lender acknowledge that certain of the Lenders may be Public-Side Lenders and, if documents or notices required to be delivered pursuant to this Section 6.1 or otherwise are being distributed through IntraLinks, Debtdomain, SyndTrak, Donnelley Financial Solutions Venue or a similar service, any document or notice that the Parent or any Borrower has indicated contains MNPI shall not be posted on the portion of such service that is designated for Public-Side Lenders. The Parent and each of the Borrowers jointly and severally agree to clearly identify, in writing on the face of such information, all information provided to each Administrative Agent by or on behalf of any Loan Party that is suitable to make available to Public-Side Lenders. If neither the Parent nor any Borrower has indicated that a document, notice or other information contains MNPI, the Revolving Administrative Agent reserves the right, but shall have no obligation, to post such document or notice on the portion of Debtdomain or other similar service that is designated for Revolving Lenders that wish to receive MNPI. If neither the Parent nor any Borrower has indicated that a document, notice or other information contains MNPI, the Term Loan Administrative Agent shall post such document or notice solely on the portion of IntraLinks that is designated for Lenders that wish to receive MNPI.

Information required to be delivered pursuant to this Section 6.1 shall be deemed to have been delivered if such information, or one or more annual or quarterly reports containing such information, shall have been posted by any Administrative Agent on IntraLinks, Debtdomain, SyndTrak, Donnelley Financial Solutions Venue or a similar service or shall be available on the website of the SEC at http://www.sec.gov or on the website of the Parent (provided, in each case, that the Parent has notified the Administrative Agents that such information is available on such website and, if requested by an Administrative Agent, shall have provided hard copies to such Administrative Agent). Information required to be delivered pursuant to this Section 6.1 may also be delivered by electronic communications pursuant to procedures approved by each Administrative Agent.

Section 6.2 Collateral Reporting Requirements

The Parent and each Borrower shall furnish to each Administrative Agent or the Collateral Agent, as applicable, for delivery to the Applicable Lenders, each of the following:

(a) Updated Corporate Chart. If requested by an Administrative Agent, together with each delivery of any financial statement pursuant to Section 6.1(b), (i) a corporate organizational chart or other equivalent list, current as of the date of delivery, in form and substance reasonably acceptable to such Administrative Agent, setting forth, for each of the Loan Parties, all Persons subject to Section 7.11(a)(iii), all Subsidiaries of any of them and any Joint Ventures entered into by any of the foregoing, and (ii) a schedule setting forth, in respect of each such Person, (A) its full legal name, (B) its jurisdiction of organization and organizational number (if any) and (C) the number of shares of each class of its Stock authorized (if applicable), the number outstanding as of the date of delivery, and the number and percentage of the outstanding shares of each such class owned (directly or indirectly) by the Parent.

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(b) Additional Information. From time to time, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral, all as an Administrative Agent or Collateral Agent may reasonably request, and in reasonable detail.

(c) Additional Filings. At any time and from time to time, upon the reasonable request of the Collateral Agent, and at the sole expense of the Loan Parties, duly executed, delivered and recorded instruments and documents for the purpose of obtaining or preserving the full benefits of this Agreement, the Pledge and Security Agreement and each other Loan Document and of the rights and powers herein and therein granted (and each Loan Party shall take such further action as the Collateral Agent may reasonably request for such purpose), including the filing of any financing or continuation statement under the UCC or other similar Requirement of Law in effect in any domestic jurisdiction with respect to the security interest created by the Pledge and Security Agreement.

(d) Mortgaged Vessels. If requested by an Administrative Agent or the Collateral Agent, an operating report for the Mortgaged Vessels showing the current customers of such vessels and the current locations of such vessels. In addition, if requested by an Administrative Agent or the Collateral Agent, the Parent shall give such Administrative Agent or the Collateral Agent written notice of (i) any Mortgaged Vessel commencing a new contract or moving to a work site outside the U.S. Gulf of Mexico and (ii) any bareboat charters of any Mortgaged Vessel and copies of such charter.

(e) [Reserved].

The reporting requirements set forth in this Section 6.2 are in addition to, and shall not modify and are not in replacement of, any rights and other obligation set forth in any Loan Document (including notice and reporting requirements) and satisfaction of the reporting obligations in this Section 6.2 shall not, by itself, operate as an update of any Schedule or any schedule of any other Loan Document and shall not cure, or otherwise affect in any way, any Default or Event of Default, including any failure of any representation or warranty of any Loan Document to be correct in any respect when made.

Section 6.3 Default Notices

(a) Promptly and in any event within five Business Days after a Responsible Officer of the Parent or any Borrower obtains actual knowledge of the existence thereof, the Parent or such Borrower, as applicable, shall give each Administrative Agent, for delivery to the Applicable Lenders, notice of any Default or Event of Default specifying the details of the occurrence referred to therein, describing with particularity any and all provisions of this Agreement and any other Loan Document that have been breached, the anticipated effect thereof, and stating what action such Borrower has taken and proposes to take with respect thereto.

(b) Each notice delivered pursuant to this Section 6.3, if given by telephone, shall be promptly confirmed in writing on or before the next Business Day.

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Section 6.4 Litigation

Promptly after a Responsible Officer of the Parent or any Borrower obtains actual knowledge of the commencement thereof, the Parent shall give each Administrative Agent, for delivery to the Applicable Lenders, written notice of the commencement of all actions, suits and proceedings before any domestic or foreign Governmental Authority or arbitrator (other than the Cases), regarding the Parent, any Borrower, any of their respective Subsidiaries or any Joint Venture that (i) seeks injunctive or similar relief that, in the reasonable judgment of any Borrower, if adversely determined, could reasonably be expected to result in a Material Adverse Effect or (ii) in the reasonable judgment of the Parent could expose a Borrower, the Parent, any Subsidiary or any Joint Venture to liability in an amount aggregating $45,000,000.00 or more or that, if adversely determined, could reasonably be expected to have a Material Adverse Effect.

Section 6.5 Labor Relations

Promptly after a Responsible Officer of the Parent or a Borrower has actual knowledge of the same, the Parent shall give each Administrative Agent, for delivery to the Applicable Lenders, written notice of (a) any material labor dispute to which the Parent, a Borrower or any of their respective Subsidiaries is a party, including any strikes, lockouts or other material disputes relating to any of such Person’s plants and other facilities if such dispute, strike or lockout involves a work stoppage exceeding 30 days, (b) any material Worker Adjustment and Retraining Notification Act or related liability incurred with respect to the closing of any plant or other facility of any such Person affecting 300 or more employees of the Parent, the Borrowers and their respective Subsidiaries and (c) any material union organization activity with respect to employees of the Parent, the Borrowers or any of their respective Subsidiaries not covered by a collective bargaining agreement as of the Effective Date.

Section 6.6 Tax Returns

Upon the request of any Lender through an Administrative Agent, the Parent and each Borrower shall provide copies of all Tax Returns and reports filed by the Parent, a Borrower, any of their respective Subsidiaries or any Joint Venture in respect of Taxes measured by income (excluding sales, use and like Taxes).

Section 6.7 Insurance

As soon as is practicable and in any event within 90 days after the end of each Fiscal Year, the Parent shall furnish each Administrative Agent, for delivery to the Applicable Lenders, with a report in form and substance reasonably satisfactory to each Administrative Agent outlining all material insurance coverage maintained as of the date of such report by the Parent and its Restricted Subsidiaries and the duration of such coverage.

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Section 6.8 ERISA Matters

The Parent shall furnish each Administrative Agent, for delivery to the Applicable Lenders, with each of the following:

(a) promptly and in any event within 30 days after a Responsible Officer of the Parent or a Borrower knows, or has reason to know, that any ERISA Event (except for those events set forth on Schedule 4.16(d) to this Agreement) has occurred that, alone or together with any other ERISA Event, could reasonably be expected to result in liability of the Parent, a Borrower, any Restricted Subsidiary, any Guarantor and/or any ERISA Affiliate in an aggregate amount exceeding $50,000,000.00, written notice describing the nature thereof, what action the Parent, a Borrower, any Subsidiary, any Guarantor or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known by such Responsible Officer, any action taken or threatened by the IRS, the Department of Labor or the PBGC with respect to such event;

(b) promptly and in any event within 10 days after a Responsible Officer of the Parent or a Borrower knows, or has reason to know, that a request for a minimum funding waiver under Section 412 of the Code has been filed with respect to any Title IV Plan, a written statement of an Authorized Officer of the Parent describing such waiver request and the action, if any, the Parent, a Borrower, their respective Subsidiaries and their respective ERISA Affiliates propose to take with respect thereto and a copy of any notice filed with the PBGC or the IRS pertaining thereto;

(c) simultaneously with the date that the Parent, a Borrower, any Subsidiary or any ERISA Affiliate files with the PBGC a notice of intent to terminate any Title IV Plan, if, at the time of such filing, such termination would require material additional contributions in order to be considered a standard termination within the meaning of Section 4041(b) of ERISA, a copy of each notice; and

(d) promptly, copies of (i) each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by the Parent, a Borrower, any Subsidiary, any Guarantor or any of their respective ERISA Affiliates with the IRS with respect to each Title IV Plan; (ii) all notices received by the Parent, a Borrower, any Subsidiary, any Guarantor or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event that, alone or together with any other ERISA Event, could reasonably be expected to result in liability of the Parent, a Borrower, any Restricted Subsidiary, any Guarantor and/or any ERISA Affiliate in an aggregate amount exceeding $50,000,000.00; and (iii) copies of such other documents or governmental reports or filings relating to any Employee Benefit Plan as any Administrative Agent shall reasonably request.

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Section 6.9 Environmental Matters

The Parent shall provide each Administrative Agent, for delivery to the Applicable Lenders, promptly, and in any event in the case of clauses (a) through (c) within 20 Business Days after any Responsible Officer of the Parent or any Borrower obtains actual knowledge of any of the following, written notice of each of the following:

(a) that any Loan Party or any Mortgaged Vessel is or may be liable to any Person as a result of a Release or threatened Release that could reasonably be expected to subject such Loan Party to Environmental Liabilities and Costs of $35,000,000.00 or more;

(b) the receipt by any Loan Party of notification that any material real or personal property or any Mortgaged Vessel of such Loan Party is or is reasonably likely to be subject to any Environmental Lien;

(c) the receipt by any Loan Party of any notice of violation of or potential liability under, or knowledge by a Responsible Officer of the Parent or a Borrower that there exists a condition that could reasonably be expected to result in a violation of or liability under, any Environmental Law, except for violations and liabilities the consequence of which, in the aggregate, could not reasonably be expected to subject the Loan Parties collectively to Environmental Liabilities and Costs of $35,000,000.00 or more; and

(d) promptly following reasonable written request by any Lender through an Administrative Agent, a report providing an update of the status of any environmental, health or safety compliance, hazard or liability issue identified in any notice or report delivered pursuant to this Section 6.9.

Section 6.10 Patriot Act Information

Each Lender, each Issuer, the Collateral Agent and each Administrative Agent (each for itself and not on behalf of any other Person) hereby notifies the Parent and the Borrowers that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record information that identifies the Parent and the Borrowers, which information includes the name and address of the Parent and the Borrowers and other information that will allow such Lender, such Issuer, the Collateral Agent or such Administrative Agent, as applicable, to identify the Parent and the Borrowers in accordance with the USA Patriot Act. The Parent and the Borrowers shall promptly, following a request by any Agent, any Issuer or any Lender, provide all documentation and other information that such Agent, such Issuer or such Lender reasonably requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the USA Patriot Act.

Section 6.11 Other Information

The Parent and each Borrower shall promptly provide each Administrative Agent, any Lender or any Issuer with any information reasonably requested by any Administrative Agent, such Lender or such Issuer through an Administrative Agent respecting the business, properties, condition, financial or otherwise, or operations of the Parent, a Borrower, any Subsidiary or any Joint Venture, including any information requested by an Administrative Agent or any Lender

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ARTICLE VII

AFFIRMATIVE COVENANTS

Section 7.1 Preservation of Corporate Existence, Etc.

The Parent and the Borrowers shall, and shall cause each of their respective Restricted Subsidiaries to, preserve and maintain its legal existence, rights (charter and statutory) and franchises, except as permitted by Sections 8.4, 8.5 and 8.6 and except if, in the reasonable business judgment of the Parent or the Borrowers, it is in the business interest of the Parent, a Borrower or such Restricted Subsidiary not to preserve and maintain such legal existence (except with respect to the Borrowers), rights (charter and statutory) and franchises, and such failure to preserve the same could not reasonably be expected to have a Material Adverse Effect and could not reasonably be expected to materially affect the interests of the Secured Parties under the Loan Documents or the rights and interests of any of them in the Collateral.

Section 7.2 Compliance with Laws, Etc.

(a) Except as otherwise excused by the Bankruptcy Code, the Parent and the Borrowers shall, and shall cause each of their respective Restricted Subsidiaries to, comply with all applicable Requirements of Law, Contractual Obligations and Permits, except where the failure so to comply could not reasonably be expected to have a Material Adverse Effect.

(b) The Parent and the Borrowers shall at all times maintain in effect and enforce policies and procedures intended to ensure compliance by the Parent, its Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions.

Section 7.3 Conduct of Business

Except to the extent prohibited by the Bankruptcy Code and not otherwise authorized by the Bankruptcy Court, each of the Parent and the Borrowers shall, and shall cause each of their respective Restricted Subsidiaries to, (a) conduct its business in the ordinary course (except for non-material changes in the nature or conduct of its business as carried on as of the Effective Date) and (b) use its reasonable efforts, in the ordinary course, to preserve its business and the goodwill and business of the customers, suppliers and others having business relations with the Parent, the Borrowers, or any of its Restricted Subsidiaries, except where the failure to comply with the covenants in each of clauses (a) and (b) above could not reasonably be expected to have a Material Adverse Effect.

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Section 7.4 Payment of Taxes, Etc.

Except to the extent prohibited by the Bankruptcy Code and not otherwise authorized by the Bankruptcy Court, subject to the DIP Orders, the Parent and the Borrowers shall, and shall cause each of their respective Restricted Subsidiaries to, pay and discharge before the same shall become delinquent, all lawful governmental claims, Taxes, assessments, charges and levies, except where (a) contested in good faith, by proper proceedings and adequate reserves therefor have been established on the books of the Parent, the Borrowers or the appropriate Restricted Subsidiary in conformity with GAAP or (b) the failure to so pay and discharge could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 7.5 Maintenance of Insurance

The Parent and the Borrowers shall, and shall cause each of its Restricted Subsidiaries to, (a) maintain insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as, in the reasonable determination of the Parent, is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which the Parent or such Subsidiary operates; provided that, with respect to the Mortgaged Vessels, the Parent shall be required to provide or cause to be provided only such insurance as is required by the Collateral Documents, (b) the Parent, the Borrowers and each other applicable Loan Party shall, without limiting the foregoing, at all times, (i) maintain, if available, fully paid flood hazard insurance with respect to each Mortgaged Property containing a Building (as defined in Section 208.25 of Regulation H of the FRB) that is located in a special flood hazard area, as designated by the Federal Emergency Management Agency of the United States Department of Homeland Security (“FEMA”), on such terms and in such amounts as required by The National Flood Insurance Reform Act of 1994 or as otherwise reasonably required by the Collateral Agent, (ii) upon request, furnish to the Collateral Agent, for delivery to the Applicable Lenders, evidence of the renewal of all such policies, and (iii) furnish to the Collateral Agent, for delivery to the Lenders, written notice of any redesignation by FEMA of any such Building into or out of a special flood hazard area promptly upon obtaining knowledge of such redesignation. Additionally, the Parent and the Borrowers shall deliver to the Collateral Agent, for delivery to the Lenders, (x) standard flood hazard determination forms and (y) if any Mortgaged Property is located in a special flood hazard area (A) notices to (and confirmations of receipt by) such Loan Party as to the existence of a special flood hazard and, if applicable, the unavailability of flood hazard insurance under the National Flood Insurance Program and (B) evidence of applicable flood insurance, if available, in each case in such form, on such terms and in such amounts as required by The National Flood Insurance Reform Act of 1994 or as otherwise required by the Collateral Agent, and (c) cause all property and general liability insurance policies (i) to name the Collateral Agent on behalf of the Secured Parties as additional insured with respect to liability policies or lender’s loss payee with respect to property policies (or a loss payee for any property policy the insurance provider for which will not agree to provide a lender’s loss payee endorsement), as appropriate, and (ii) to provide that no cancellation shall be effective until at least 30 days after receipt by the Collateral Agent of written notice thereof (and the Borrowers jointly and severally agree to provide to each Administrative Agent prompt written notice of any material change in amount or material change in coverage). Subject to Section 2.12(b), so long as an Event of Default is not then continuing, the Collateral Agent, on behalf of the Secured Parties, agrees to promptly release, endorse and turn over to the Parent or the applicable Subsidiary any insurance proceeds received by the Collateral Agent.

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Section 7.6 Access

The Parent and the Borrowers shall from time to time during normal business hours permit any Administrative Agent, the Collateral Agent, the Lenders, the Issuers, or any agents or representatives thereof within two Business Days after written notification of the same (except that during the continuance of an Event of Default, no such notice shall be required) to (a) examine and make copies of and abstracts from the records and books of account of the Parent, the Borrowers and each of their respective Subsidiaries, (b) visit the properties of the Parent, the Borrowers and each of their respective Subsidiaries, (c) discuss the affairs, finances and accounts of the Parent, the Borrowers and each of their respective Subsidiaries with any of their respective officers or directors (subject to their availability, taking into account business travel and vacations) and (d) examine their respective financial and accounting records and other material data relating to their respective businesses or the transactions contemplated hereby (including, without limitation, in connection with environmental compliance, hazard or liability); provided that the Parent will not be required to permit any examination or visit as set forth in clauses (a) and (b) above with respect to each of the Administrative Agents and the Lenders (or any agents or representatives thereof) unless such visit is coordinated through an Administrative Agent.

Section 7.7 Keeping of Books

The Parent and the Borrowers shall, and shall cause each of their respective Subsidiaries to, keep proper books of record and account, in which full and correct entries shall be made of the financial transactions and assets and business of the Parent, the Borrowers and each of their respective Subsidiaries; provided that the consolidated books of the Parent, the Borrowers and each of their respective Subsidiaries shall be in conformity with GAAP on a consolidated basis.

Section 7.8 Maintenance of Properties, Etc.

(a) Subject to any necessary order or authorization of the Bankruptcy Court, the Parent and the Borrowers shall, and shall cause each of their respective Subsidiaries to, maintain and preserve (i) in good working order and condition (ordinary wear and tear excepted) all of its properties necessary in the conduct of its business, (ii) all rights, permits, licenses, approvals and privileges (including all Permits) necessary in the conduct of its business and (iii) all Material Intellectual Property (such term as used in this Section 7.8(a) only shall have the meaning assigned to it in the Pledge and Security Agreement), except where failure to so maintain and preserve the items set forth in clauses (i), (ii) and (iii) above could not reasonably be expected to have a Material Adverse Effect; provided that, with respect to the Mortgaged Vessels, the Parent and the Borrowers will, or will cause the Mortgaged Vessel Owning Subsidiaries to, maintain and keep such Mortgaged Vessels in such condition, repair and working order as is required by the Collateral Documents.

(b) The Parent and the Borrowers shall cause all Material Intellectual Property to be owned by a Loan Party.

Section 7.9 Application of Proceeds

The Borrowers shall use the entire amount of the proceeds of the Loans and the Issuance of Letters of Credit as provided in Section 4.13.

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Section 7.10 Environmental

(a) The Parent and the Borrowers shall, and shall cause each of its Restricted Subsidiaries to, exercise reasonable due diligence in order to comply in all material respects with all Environmental Laws.

(b) The Parent agrees that each Administrative Agent may, from time to time, retain, at the expense of the Parent, an independent professional consultant reasonably acceptable to the Parent to review any report relating to Contaminants prepared by or for the Parent or the Borrowers and to conduct its own investigation (the scope of which investigation shall be reasonable based upon the circumstances) of any property currently owned, leased, operated or used by the Parent, the Borrowers or any of their respective Restricted Subsidiaries, if (x) a Default or an Event of Default shall have occurred and be continuing, or (y) such Administrative Agent reasonably believes (1) that an occurrence relating to such property is likely to give rise to any Environmental Liabilities and Costs in excess of $35,000,000.00 or (2) that a violation of an Environmental Law on or around such property has occurred or is likely to occur, which could, in either such case, reasonably be expected to result in Environmental Liabilities and Costs in excess of $35,000,000.00, provided that, unless an Event of Default shall have occurred and be continuing, such consultant shall not drill on any property of the Parent or any of its Restricted Subsidiaries without the Parent’s prior written consent. The Parent and the Borrowers shall use their reasonable efforts to obtain for each Administrative Agent and its agents, employees, consultants and contractors the right, upon reasonable notice to Parent, to enter into or on to the facilities or Mortgaged Vessels currently owned, leased, operated or used by the Parent, a Borrower or any of their respective Restricted Subsidiaries to perform such tests on such property as are necessary to conduct such a review and/or investigation. Any such investigation of any property shall be conducted, unless otherwise agreed to by the Parent and the Applicable Administrative Agent, during normal business hours and shall be conducted so as not to unreasonably interfere with the ongoing operations at any such property or Mortgaged Vessel or to cause any damage or loss at such property or Mortgaged Vessel. The Parent, the Borrowers and each Administrative Agent hereby acknowledge and agree that any report of any investigation conducted at the request of any Administrative Agent pursuant to this subsection will be obtained and shall be used by such Administrative Agent and the Lenders for the purposes of the Lenders’ internal credit decisions, to monitor the Loans, Revolving Letter of Credit Obligations and Cash Secured LC Obligations and to protect the Lenders’ security interests created by the Loan Documents, and each Administrative Agent and the Lenders hereby acknowledge and agree any such report will be kept confidential by them to the extent permitted by law except as provided in the following sentence. Each Administrative Agent agrees to deliver a copy of any such report to the Parent with the understanding that the Parent acknowledges and agrees that (i) it will indemnify and hold harmless each Administrative Agent and each Lender from any costs, losses or liabilities relating to the Parent’s use of or reliance on such report, (ii) no Administrative Agent nor any Lender makes any representation or warranty with respect to such report, and (iii) by delivering such report to the Parent, no Administrative Agent nor any Lender is requiring or recommending the implementation of any suggestions or recommendations contained in such report.

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(c) Promptly after a Responsible Officer of the Parent or any Borrower obtains actual knowledge thereof, the Parent or such Borrower shall advise each Administrative Agent, for delivery to the Applicable Lenders, in writing and in reasonable detail of (i) any Release or threatened Release of any Contaminants required to be reported by the Parent or its Restricted Subsidiaries, to any Governmental Authorities under any applicable Environmental Laws and which could reasonably be expected to have Environmental Liabilities and Costs in excess of $35,000,000.00, (ii) any and all written communications with respect to any pending or threatened claims under Environmental Law in each such case which, individually or in the aggregate, have a reasonable possibility of giving rise to Environmental Liabilities and Costs in excess of $35,000,000.00, (iii) any Remedial Action performed by the Parent or any other Person in response to (x) any Contaminants on, under or about any property, the existence of which has a reasonable possibility of resulting in Environmental Liabilities and Costs in excess of $35,000,000.00, or (y) any other Environmental Liabilities and Costs that could reasonably be expected to result in Environmental Liabilities and Costs in excess of $35,000,000.00, (iv) discovery by the Parent or its Restricted Subsidiaries of any occurrence or condition on any material property that could cause the Parent’s or its Restricted Subsidiaries’ interest in any such property to be subject to any restrictions on the ownership, occupancy, transferability or use thereof under any applicable Environmental Laws or Environmental Liens other than those that could not reasonably be expected to result in a Material Adverse Effect, and (v) any written request for information from any Governmental Authority that fairly suggests such Governmental Authority is investigating whether the Parent or any of its Restricted Subsidiaries may be potentially responsible for a Release or threatened Release of Contaminants which has a reasonable possibility of giving rise to Environmental Liabilities and Costs in excess of $35,000,000.00.

(d) The Parent shall promptly notify each Administrative Agent, for delivery to the Applicable Lenders, of (i) any proposed acquisition of Stock, assets, or property by the Parent or any of its Restricted Subsidiaries that could reasonably be expected to expose the Parent or any of its Restricted Subsidiaries to, or result in, Environmental Liabilities and Costs in excess of $35,000,000.00 and (ii) any proposed action to be taken by the Parent or any of its Restricted Subsidiaries to commence manufacturing, industrial or other similar operations that could reasonably be expected to subject the Parent or any of its Restricted Subsidiaries to additional Environmental Laws, that are materially different from the Environmental Laws applicable to the operations of the Parent or any of its Subsidiaries as of the Effective Date.

(e) The Parent shall, at its own expense, provide copies of such documents or information as an Administrative Agent or Lender may reasonably request in relation to any matters disclosed pursuant to this Section 7.10.

(f) To the extent required by Environmental Laws or Governmental Authorities under applicable Environmental Laws, the Parent shall promptly take, and shall cause each of its Restricted Subsidiaries promptly to take, any and all necessary Remedial Action in connection with the presence, handling, storage, use, disposal, transportation or Release or threatened Release of any Contaminants on, under or affecting any property in order to comply in all material respects with all applicable Environmental Laws and Governmental Authorities under applicable Environmental Laws. In the event the Parent or any of its Restricted Subsidiaries undertakes any Remedial Action with respect to the presence, Release or threatened Release of any Contaminants on or affecting any property, the Parent or any of its Subsidiaries shall conduct and complete such

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Remedial Action in material compliance with all applicable Environmental Laws, and in material accordance with the applicable policies, orders and directives of all relevant Governmental Authorities except when, and only to the extent that, the Parent or any such Subsidiaries’ liability for such presence, handling, storage, use, disposal, transportation or Release or threatened Release of any Contaminants is being contested in good faith by Parent or any of such Subsidiaries. In the event the Parent fails to take required actions to address such Release or threatened Release of Contaminants or to address a violation of or liability under Environmental Law, any Administrative Agent may, upon providing the Parent with 20 Business Days’ prior written notice, enter the property and, at the Parent’s sole expense, perform whatever action such Administrative Agent reasonably deems prudent to rectify the situation.

Section 7.11 Additional Collateral and Guaranties.

Except to the extent prohibited by the Bankruptcy Court:

(a) To the extent not delivered to each Administrative Agent or Collateral Agent, as applicable, on or before the Effective Date, the Parent and the Borrowers jointly and severally agree to do promptly each of the following (in each case subject to the Security Principles):

(i) execute and deliver and cause each Guarantor to execute and deliver to each Administrative Agent such amendments to the Collateral Documents or enter into such new Collateral Documents as are necessary, or deemed by an Administrative Agent or the Collateral Agent to be reasonably advisable, in order to grant to the Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in the Stock and Stock Equivalents and other debt Securities of any Subsidiary (other than Excluded Assets (as defined in the Pledge and Security Agreement) that are owned by the Parent, a Borrower or any other Guarantor and to perfect such Lien as a first-priority Lien (it being agreed that such actions shall be required in the United States of America and, at the reasonable request of any Administrative Agent, any other jurisdiction);

(ii) deliver and cause each Guarantor to deliver to the Collateral Agent the certificates (if any) representing such Stock and Stock Equivalents and other debt Securities, together with (A) in the case of such certificated Stock and Stock Equivalents, undated stock powers or other instruments of transfer endorsed in blank and (B) in the case of such certificated debt Securities, endorsed in blank, in each case executed and delivered by a Responsible Officer of the Parent, a Borrower or other Guarantor, as the case may be;

(iii) in the case of any Material Wholly-Owned Subsidiary, cause such Subsidiary (x) in the case of any direct holder of equity interests in a Borrower, concurrently with such Person acquiring such equity interests in a Borrower and (y) otherwise, not later than 30 days (or such later date permitted by each Administrative Agent in its sole discretion) after the earlier of the date of delivery of any Compliance Certificate or the deadline for delivery of such Compliance Certificate, (A) to become a Guarantor, (B) to become a party to the Pledge and Security Agreement (or another security instrument executed and delivered by such Material Wholly-Owned Subsidiary in form and substance satisfactory to each Administrative Agent, pursuant to which such Material Wholly-Owned

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Subsidiary grants a Lien to the Collateral Agent) and the applicable Collateral Documents and (C) to take such actions necessary or advisable to grant to the Collateral Agent, for the ratable benefit of the Secured Parties, a security interest, and to perfect such security interest, in the Collateral described in the Collateral Documents with respect to such Subsidiary, including the filing of UCC financing statements in such jurisdictions as may be required by the Collateral Documents or by law or as may be reasonably requested by any Administrative Agent or the Collateral Agent (it being understood that such actions shall be required in the United States of America and, at the reasonable request of an Administrative Agent or the Collateral Agent, any other jurisdiction); and

(iv) in the case of any Excluded Subsidiary, use commercially reasonable efforts (as determined by the Administrative Agents and the Collateral Agent in their sole discretion) to obtain any relevant governmental or third party consent or other authority that would permit such Excluded Subsidiary to become a Guarantor or to mitigate any risk of liability in connection therewith.

(b) If any Loan Party owns or acquires any marine vessel with a Fair Market Value in excess of $10,000,000.00, then such Loan Party shall execute and deliver such mortgages and other security instruments as shall be necessary to cause such vessel to become a Mortgaged Vessel subject to a perfected first-priority security interest (subject to any permitted Liens specified in the applicable Mortgage) within 20 Business Days of such Person becoming a Loan Party or such acquisition, as applicable.

(c) If the Fair Market Value of any marine vessel owned by any Loan Party increases to an amount in excess of $10,000,000.00 because of improvements to such marine vessel, then such Loan Party shall, within 20 Business Days of a Responsible Officer of the Parent learning of such increase in Fair Market Value, execute and deliver such mortgages and other security instruments as shall be necessary to cause such vessel to become a Mortgaged Vessel subject to a perfected first-priority security interest (subject to any permitted Liens specified in the applicable Mortgage).

(d) If requested by any Administrative Agent or Collateral Agent, the Parent, Borrower or Loan Party, as applicable, shall deliver to each Administrative Agent, the Collateral Agent and the other Secured Parties customary legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to such Agent.

Section 7.12 Real Property

With respect to any (a) fee interest in any Real Property located in the United States with a reasonably estimated Fair Market Value of $10,000,000.00 or more, or, upon the request of the Collateral Agent or any Administrative Agent, any leasehold interest in any Real Property (other than in respect of any leasehold interest in any Real Property used primarily for offices of the Parent or any of its Subsidiaries) with net lease payments of more than $10,000,000.00 annually and (b) any fee interest in any Real Property located outside of the United States with a reasonably estimated Fair Market Value of $5,000,000.00 or more, or, upon the request of the Collateral Agent or any Administrative Agent, any leasehold interest in any Real Property (other than in respect of

-123- any leasehold interest in any Real Property used primarily for offices of the Parent or any of its Subsidiaries) with net lease payments of more than $5,000,000.00 annually, in each case acquired or leased after the Effective Date by the Parent, a Borrower or any other Loan Party (other than any such Real Property acquired with Indebtedness permitted by Section 8.1(d) or (m)), the Parent or the applicable Loan Party shall promptly (and, in any event, within 60 days following the date of such acquisition or such later date permitted by the Administrative Agents in their sole discretion) (i) execute and deliver a first priority Mortgage (subject only to Liens permitted by this Agreement) in favor of the Collateral Agent, for the benefit of the Secured Parties, covering such Real Property and complying with the provisions herein and in the Collateral Documents, and shall take such further action and deliver or cause to be delivered such further documents as the Collateral Agent or any Administrative Agent may reasonably request to effect the transactions contemplated by the provisions herein and in the Collateral Documents, (ii) if reasonably requested by the Collateral Agent or any Administrative Agent and available in such jurisdiction, (1) provide the Secured Parties with title reports and title insurance policies (with endorsements) in an amount at least equal to the purchase price of such Real Property (or such other amount as the Collateral Agent or any Administrative Agent shall reasonably specify), and, if applicable, (2) lease estoppel certificates, (3) provide the Secured Parties with evidence of zoning compliance, ALTA surveys, appraisals, environmental assessments and reports, mortgage tax affidavits and declarations and other customary similar information and related affidavits and certifications as are reasonably requested by, and in form and substance reasonably acceptable to, the Collateral Agent and the Administrative Agents from time to time, and (4) provide the Secured Parties with evidence that the casualty and other insurance (including, without limitation, flood insurance) required pursuant to the Loan Documents is in full force and effect; provided that notwithstanding anything to the contrary in any of the foregoing, no Mortgage described in this Section 7.12 shall be completed prior to the receipt by each Lender of each item requested in clause (ii) above and any other information as needed for the Collateral Agent and each Administrative Agent to conduct its flood due diligence, and (iii) if reasonably requested by an Administrative Agent or the Collateral Agent, deliver to each Administrative Agent, the Collateral Agent and the other Secured Parties legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to each Administrative Agent and the Collateral Agent requesting the same.

Section 7.13 Undertaking with Respect to NO 105

Within 45 days (or such longer period permitted by each Administrative Agent in its sole discretion) following the repayment in full of the NO 105 Indebtedness (it being agreed that such 45-day period shall not commence until repayment in full of the NO 105 Indebtedness has been completed and all related termination and release documents have been properly tendered, filed and/or registered, as applicable), the Parent or the applicable Subsidiary of the Parent shall execute and deliver such mortgages and other security instruments as shall be necessary to cause the NO 105 to become a Mortgaged Vessel subject to a perfected first-priority security interest (other than permitted Liens specified in the applicable Mortgage).

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Section 7.14 Additional Undertakings

Except to the extent prohibited by the Bankruptcy Code and not otherwise authorized by the Bankruptcy Court, the Borrowers shall (a) deliver to each Administrative Agent each of the agreements, documents, instruments or certificates described on Schedule 7.14, each in form and substance reasonably satisfactory to each Administrative Agent and (b) perform each of the actions described on Schedule 7.14, in each case by the date set forth opposite each such item or action on Schedule 7.14 or such later date permitted by the Revolving Administrative Agent (acting at the direction of the Requisite Revolving Lenders).

Section 7.15 Maintenance of Rating

The Parent will at all times from and after the Effective Date use commercially reasonable efforts to obtain and maintain public ratings with (but not to obtain or maintain a specific public rating) S&P and Moody’s with respect to a Borrower and the Parent, as applicable, the Term Loans and the Revolving Facility and will use commercially reasonable efforts to cause such rating to be updated on an annual basis. The Parent or the applicable Borrower will provide each Administrative Agent with a copy of any such credit rating promptly following receipt thereof.

Section 7.16 [Reserved]

Section 7.17 Chief Transformation Officer

The Parent will at all times from and after the Effective Date engage a Chief Transformation Officer, which officer shall report to Parent’s chief executive officer and board of directors.

Section 7.18 Delivery of Bankruptcy Documents.

The Borrower will deliver to counsel to each of the Administrative Agents and to Davis Polk as counsel to the Term Loan Ad Hoc Group, the following documents at least three (3) Business Days prior to date on which the Borrower or any of its Affiliates intend to file such documents (a) the proposed DIP Orders (which must be in form and substance satisfactory to the Administrative Agents and the Collateral Agent (in each case in their capacities as such) and the Requisite Revolving Lenders and the Requisite Term Lenders), (b) all “first day motions and orders”, (c) the Plan of Reorganization, including the proposed Disclosure Statement related to such Plan of Reorganization and (d) any other material agreements, motions, pleadings, briefs, applications, orders, and other filings with the Bankruptcy Court (each in form and substance satisfactory to the Administrative Agents, solely to the extent they affect the Administrative Agents (in their capacities as such)); provided that if delivery of such documents (other than the DIP Orders, the Plan, the Disclosure Statement or Confirmation Order or any amendments thereto) at least three (3) Business Days in advance is not reasonably practicable, such document shall be delivered as soon as reasonably practicable prior to filing. The Borrower shall consult in good faith with the Liquidity Lender Steering Committee, the Term Loan Ad Hoc Group and with Davis Polk as counsel to the Term Loan Ad Hoc Group regarding the form and substance of any such proposed filing with the Bankruptcy Court (other than the DIP Orders, the Plan, the Disclosure Statement and the Confirmation Order, which documents shall be subject to consent rights set forth herein).

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ARTICLE VIII

NEGATIVE COVENANTS

Section 8.1 Indebtedness

None of the Parent or any Borrower shall (x) and shall not permit any Captive Insurance Subsidiary or any of the Parent’s Restricted Subsidiaries to, directly or indirectly create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness or (y) issue Disqualified Stock except for the following:

(a) the Obligations;

(b) (i) Indebtedness existing on the Effective Date and (x) disclosed on Schedule 8.1 or (y) incurred in compliance with the Prepetition Credit Facilities and (ii) the Existing Senior Indebtedness;

(c) Guaranty Obligations incurred by any Loan Party in respect of Indebtedness of any Loan Party that is permitted by this Section 8.1;

(d) (i) secured Indebtedness of the Parent or any Restricted Subsidiary consisting of Capital Lease Obligations and purchase money Indebtedness incurred by the Parent or a Restricted Subsidiary of the Parent to finance (concurrently with or within 90 days after) the acquisition of tangible property (including marine vessels) and Indebtedness in respect of sale and leaseback transactions permitted under Section 8.13, and (ii) Unsecured Indebtedness of the Parent or any Restricted Subsidiary in respect of any joint and several liability arising as a result of the existence of a fiscal unity (fiscale eenheid) for Dutch tax purposes, not to exceed an aggregate outstanding principal amount of $10,000,000 at any time; for all of the foregoing Indebtedness described in clauses (i) and (ii) above not to exceed an aggregate outstanding principal amount of $50,000,000.00 at any time;

(e) [reserved];

(f) Indebtedness arising from intercompany loans that are Investments permitted under, or not prohibited by, Section 8.5 (i) from any Loan Party to any other Loan Party; (ii) from any Subsidiary of the Parent to any Loan Party; (iii) from any Subsidiary of the Parent that is not a Loan Party to any Restricted Subsidiary of the Parent that is not a Loan Party; (iv) from any Loan Party to any Restricted Subsidiary of the Parent that is not a Loan Party; or (v) existing on the Effective Date and incurred in compliance with the Prepetition Credit Facilities; provided, however, that:

(A) all such Indebtedness of the types described in clauses (i), (ii), (iv) and (v) above is evidenced by the Global Intercompany Note, subject to a first priority Lien pursuant to the Pledge and Security Agreement or another Collateral Document if the payee is a Loan Party,

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(B) all such Indebtedness of the type described in clause (ii) or clause (v) above may not be paid except as permitted by the DIP Order, the Cash Management Order, or the Approved Budget, unless such payment is being made to a Loan Party, and

(C) any payment by any Guarantor under any guaranty of the Obligations shall result in a pro tanto reduction of the amount of any Indebtedness owed by such Guarantor to the Borrowers or to any of the other Loan Parties for whose benefit such payment is made;

(g) [reserved];

(h) Indebtedness under or in respect of Hedging Contracts permitted under Section 8.16;

(i) Indebtedness in respect of Treasury Management Arrangements;

(j) Indebtedness in respect of any insurance premium financing for insurance being acquired by the Parent or any Restricted Subsidiary under customary terms and conditions and not in connection with the borrowing of money;

(k) [reserved];

(l) [reserved];

(m) [reserved];

(n) Indebtedness in respect of matured or drawn Performance Guarantees;

(o) Indebtedness in respect of letters of credit, bank guarantees and other similar obligations in an aggregate outstanding amount not to exceed $25,000,000.00 at any time;

(p) [reserved];

(q) Indebtedness evidenced by letters of credit, bank guarantees or other similar instruments in an aggregate face amount not to exceed at any time $20,000,000.00 issued in the ordinary course of business to secure obligations of the Parent and its Restricted Subsidiaries under workers’ compensation and other social security programs, and Contingent Obligations with respect to any such permitted letters of credit, bank guarantees or other similar instruments;

(r) [reserved];

(s) unsecured Indebtedness incurred by any Borrower or any other Subsidiary Guarantor and owing to a Joint Venture in which any Borrower or any other Subsidiary Guarantor owns any interest in an aggregate outstanding amount not to exceed $750,000,000.00 at any time;

(t) [reserved];

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(u) [reserved]; and

(v) Investments permitted under Section 8.5 constituting Indebtedness.

Notwithstanding the foregoing, the basket amounts set forth in clause (s) shall be reduced by the amount of such Indebtedness existing on the Effective Date while such Indebtedness remains outstanding.

Section 8.2 Liens, Etc.

The Parent and the Borrowers shall not, and shall not permit any of their Restricted Subsidiaries to, create or suffer to exist any Lien upon or with respect to any of their respective properties or assets, whether now owned or hereafter acquired, or assign, or permit any of their Restricted Subsidiaries to assign, any right to receive income, except for the following:

(a) Liens created pursuant to the Loan Documents or the DIP Orders, in each case securing the Obligations;

(b) Liens existing on the Effective Date and (x) disclosed on Schedule 8.2 or (y) incurred in accordance with the Prepetition Credit Facilities;

(d) Liens securing Indebtedness permitted under Section 8.1(d)(i) in property subject to and acquired, constructed or improved with the proceeds of a Capital Lease or purchase money Indebtedness (including any sale and leaseback transaction permitted under Section 8.13), in each case if (A) the Indebtedness secured thereby is incurred within 90 days after the date of such acquisition, construction or improvement of such property and does not exceed the lesser of the cost or Fair Market Value of such property at the time of such acquisition, construction or improvement and (B) such Liens do not apply to any other property (other than proceeds of such acquired, constructed or improved property) or assets of the Parent or any of its Restricted Subsidiaries;

(e) any Lien securing the renewal, extension, refinancing or refunding of any Indebtedness (other than the NO 105 Indebtedness) secured by any Lien disclosed on Schedule 8.2 permitted by clause (b) above without any material change in the assets subject to such Lien;

(f) Liens in favor of lessors securing operating leases not prohibited hereunder;

(g) Liens arising out of judgments or awards and not constituting an Event of Default under Section 9.1(g);

(h) Liens encumbering inventory, work-in-process and related property in favor of customers or suppliers securing obligations and other liabilities (other than Indebtedness) to such customers or suppliers to the extent such Liens are granted in the ordinary course of business and are consistent with past business practices;

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(i) Liens on pledged cash of the Parent and its Restricted Subsidiaries required for notional cash pooling arrangements in the ordinary course of business;

(j) Liens securing the payment of obligations under the Prepetition Credit Facilities in existence on the Effective Date and Adequate Protection Liens;

(k) Liens securing insurance premium financing permitted under Section 8.1(j) under customary terms and conditions; provided that no such Lien may extend to or cover any property other than the insurance being acquired with such financing, the proceeds thereof and any unearned or refunded insurance premiums related thereto;

(l) [reserved];

(m) [reserved];

(n) [reserved];

(o) Liens consented to by Requisite Lenders on receivables and related rights sold or purported to be sold pursuant to any Alternate Program in accordance with Section 8.4(k) (or any document executed by the Parent or any Restricted Subsidiary of the Parent in connection therewith with the consent of Requisite Lenders);

(p) [reserved]; and

(q) Liens securing Prepetition Secured Obligations.

Without limiting the foregoing limitations, (x) unless the NO 105 is a Mortgaged Vessel, the Parent and the Borrowers shall not, and shall not permit any of their respective Subsidiaries to (i) create or suffer to exist any Lien upon or with respect to the NO 105 or (ii) assign any right to receive income with respect to the NO 105, in either case to secure Indebtedness for borrowed money other than NO 105 Indebtedness and (y) the Parent and the Borrowers shall not, and shall not permit any of their respective Subsidiaries to (i) create or suffer to exist any Lien upon or with respect to the Altamira Yard or (ii) assign any right to receive income with respect to the Altamira Yard, in either case to secure Indebtedness for borrowed money other than hereunder.

Section 8.3 Acquisitions

The Parent and the Borrowers shall not, and shall not permit any of their respective Restricted Subsidiaries to, directly or indirectly, make any Acquisitions.

Section 8.4 Sale of Assets

Each of the Parent and the Borrowers shall not, and shall not permit any of its Restricted Subsidiaries to, sell, convey, transfer, lease or otherwise dispose of any of their respective assets or any interest therein (including the sale or factoring of any accounts) to any Person, or permit or suffer any other Person to acquire any interest in any of their respective assets or, in the case of any Restricted Subsidiary, issue or sell any shares of such Restricted Subsidiary’s Stock or Stock Equivalent (any such disposition being an “Asset Sale”), except for the following:

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(a) the sale or disposition of inventory (including fabricated projects for customers, such as offshore production platforms and related components) in the ordinary course of business;

(b) transfers resulting from any taking or condemnation of any property of the Parent or any of its Restricted Subsidiaries (or, as long as no Default or Event of Default has occurred and is continuing or would result therefrom, deed in lieu thereof);

(c) as long as no Default or Event of Default is continuing or would result therefrom, the sale or disposition of equipment that the Parent reasonably determines is no longer useful in its or its Subsidiaries’ business, has become obsolete, damaged or surplus or is replaced in the ordinary course of business;

(d) as long as no Default or Event of Default is continuing or would result therefrom, the lease or sublease or chartering of property not constituting a sale and leaseback, to the extent not otherwise prohibited by this Agreement or the other Loan Documents;

(e) as long as no Default or Event of Default is continuing or would result therefrom, discounts, adjustments, settlements and compromises of accounts in the ordinary course of business;

(f) any Asset Sale (i) to the Parent, a Borrower or any Loan Party Wholly-Owned by a Borrower or (ii) by any Restricted Subsidiary that is not a Loan Party to the Parent, a Borrower or another Restricted Subsidiary;

(g) as long as no Default or Event of Default is continuing or would result therefrom, and subject to Section 2.12(a), any other Asset Sale (other than an Asset Sale in respect of a Mortgaged Vessel or Stock in a Mortgaged Vessel Owning Subsidiary or any Asset Sale of all or any portion of the Technology Business) for Fair Market Value, at least 100% of which is payable in cash, Cash Equivalents or Specified Other Consideration upon such sale. For purposes of this clause (g), “Specified Other Consideration” means, with respect to any Asset Sale of any assets or property directly related to the Amazon, the amount of any liabilities or other obligations of the Parent, a Borrower or any other Restricted Subsidiary that is expressly assumed by the transferee of any such assets or property; provided that the aggregate gross proceeds of any or all assets subject to an Asset Sale pursuant to this clause (g) and clauses (h) and (i) below shall not exceed $10,000,000.00 during the term of this Agreement;

(h) any Asset Sale of one or more Mortgaged Properties or Mortgaged Vessels or Stock in a Mortgaged Vessel Owning Subsidiary or a Subsidiary which directly or indirectly owns a Mortgaged Vessel Owning Subsidiary, subject to Section 2.12(a), and so long as (i) no Default or Event of Default is continuing or would result therefrom, (ii) the Asset Sale is for Fair Market Value, (iii) except to the extent that a Loan Party receives one or more marine vessels from another Person in trade or exchange for such assets so disposed of, at least 100% of the consideration for such Asset Sale consists of cash or Cash Equivalents received at closing of such Asset Sale and (iv) any marine vessel received from another Person in trade or exchange for such assets so disposed of shall concurrently with its acquisition be added to the Collateral; provided that the aggregate gross proceeds of any or all assets subject to an Asset Sale pursuant to this clause (h) and clause (g) above and clause (i) below shall not exceed $10,000,000.00 during the term of this Agreement;

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(i) as long as no Default or Event of Default is continuing or would result therefrom, any Asset Sale of the Stock of any Captive Insurance Subsidiary for Fair Market Value, at least 100% of which is payable in cash or Cash Equivalents upon such sale; provided that the aggregate gross proceeds of any or all assets subject to an Asset Sale pursuant to this clause (i) and clauses (g) and (h) above shall not exceed $10,000,000.00 during the term of this Agreement;

(j) as long as no Default or Event of Default is continuing or would result therefrom, the Pipe Fab Sale and the Ancillary Tech Sale, in each case, for Fair Market Value, at least 100% of which is payable in cash or Cash Equivalents upon such sale;

(k) dispositions of any receivables and related rights pursuant to any Alternate Program permitted hereunder;

(l) the Technology Business Sale;

(m) as long as no Default or Event of Default is continuing or would result therefrom, non-exclusive assignments and licenses of intellectual property of the Parent and its Restricted Subsidiaries in the ordinary course of business;

(n) any Asset Sale (other than an Asset Sale of a Mortgaged Vessel) pursuant to a single transaction or series of related transactions in which the Parent or its Restricted Subsidiaries receive aggregate consideration of $10,000,000.00 or less; provided that such Asset Sale complies with the requirements of Section 2.12(a) to the extent applicable;

(o) the sale or disposition of equipment in the ordinary course of business to Joint Ventures and Restricted Subsidiaries that are not Loan Parties in an aggregate amount since the Effective Date not to exceed $10,000,000.00;

(p) the sales or dispositions listed on Schedule VI attached hereto; and

(q) any other sales or dispositions authorized by the Bankruptcy Court and consented to by the Requisite Revolving Lenders and the Requisite Term Lenders.

Section 8.5 Restricted Payments

The Parent and the Borrowers shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, declare, order, pay or make any sum for any Restricted Payment except for:

(a) Restricted Payments by the Parent to any other Loan Party;

(b) Restricted Payments by (i) any Restricted Subsidiary of the Parent to any Loan Party or (ii) any Restricted Subsidiary that is not a Loan Party to another Restricted Subsidiary that is not a Loan Party;

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(c) Restricted Payments by any Restricted Subsidiary that is not a Wholly-Owned Subsidiary to any Loan Party and to holders of equity interests in such Restricted Subsidiary to the extent (i) such Restricted Payments are made pro rata among the holders of the equity interests in such Restricted Subsidiary or (ii) pursuant to the terms of the joint venture, charter, bylaws or other distribution agreement for such Restricted Subsidiary (A) as in effect on the Petition Date or (B) in form and substance expressly approved by the Requisite Lenders (such approval not to be unreasonably withheld or delayed);

(d) (i) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Stock or Stock Equivalents of the Parent or any of its Restricted Subsidiaries (x) made solely with the proceeds received from the exercise of any warrant, option or other similar instrument or (y) that is deemed to occur upon the cashless exercise of stock options, warrants or other similar instruments and (ii) the repurchase, redemption or other acquisition or retirement for value of any Stock or Stock Equivalents of the Parent or any Restricted Subsidiary held by any current or former officer, director or employee pursuant to any equity-based compensation plan, equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement (including pursuant to the “Chicago Bridge & Iron 2008 Long-Term Incentive Plan, as Amended”) in accordance with the Approved Budget;

(e) [reserved];

(f) Investments existing on the Effective Date and (x) disclosed on Schedule 8.5 or (y) incurred in accordance with Sections 8.5(j), (m), (q), (r), or (s) of the Existing First-Lien Credit Agreement, and any refinancings of such Investments to the extent constituting Indebtedness otherwise permitted under Section 8.1(b), provided such refinancing complies with the provisions of Section 8.1(e);

(g) Investments in cash and Cash Equivalents;

(h) Investments in accounts, contract rights and chattel paper (each as defined in the UCC), notes receivable and similar items arising or acquired from the sale of Inventory in the ordinary course of business consistent with the past practice of the Parent and its Restricted Subsidiaries;

(i) Investments received in settlement of amounts due to the Parent or any Restricted Subsidiary of the Parent effected in the ordinary course of business;

(j) Investments by (i) any Loan Party in any other Loan Party or (ii) a Restricted Subsidiary of the Parent that is not a Loan Party in the Parent or any other Restricted Subsidiary of the Parent;

(k) loans or advances to employees of the Borrower or any of its Restricted Subsidiaries (or guaranties of loans and advances made by a third party to employees of the Borrower or any of its Restricted Subsidiaries) in the ordinary course of business in an aggregate outstanding principal amount not to exceed $1,000,000.00 at any time;

(l) Guaranty Obligations permitted by Section 8.1;

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(m) other direct or indirect Investments, including Letters of Credit and other credit support obligations, in Joint Ventures in accordance with the Approved Budget or the Cash Management Order;

(n) [reserved];

(o) [reserved];

(p) other Investments in Restricted Subsidiaries (i) in the ordinary course of business consistent with past practice for payroll and cash management activities or (ii) in accordance with the DIP Orders, the Cash Management Order or as expressly provided for in the Approved Budget;

(q) [reserved];

(r) [reserved];

(s) other Investments in an aggregate amount not to exceed $10,000,000.00 at any time;

(t) Investments resulting from any non-cash consideration received in an Asset Sale permitted by Section 8.4; and

(u) repurchases, redemptions or other acquisitions or retirements for value of Stock of the Parent made in lieu of withholding Taxes in connection with any vesting of restricted Stock or any exercise, vesting or exchange of stock options, warrants or other similar rights.

Section 8.6 Restriction on Fundamental Changes

Other than in connection with the commencement of the Cases or as otherwise authorized by the Bankruptcy Court and consented to by the Requisite Lenders, the Parent shall not, and shall not permit any of its Restricted Subsidiaries to:

(a) merge or consolidate with any Person (provided that, if at the time thereof and immediately after giving effect thereto no Event of Default or Default shall have occurred and be continuing (i) any Wholly-Owned Restricted Subsidiary (other than a Borrower) may merge into a Borrower so long as such Borrower is the surviving company, (ii) any Wholly-Owned Restricted Subsidiary (other than a Borrower) may merge into or consolidate with any other Wholly-Owned Restricted Subsidiary (other than a Borrower) in a transaction in which the surviving entity is a Wholly-Owned Restricted Subsidiary and no Person other than a Borrower or a Wholly-Owned Restricted Subsidiary of a Borrower receives any consideration (provided that if any party to any such transaction is a Loan Party, the surviving entity of such transaction shall be a Loan Party), (iii) any Restricted Subsidiary of the Parent (other than a Borrower) may merge with another Person in a transaction constituting an Asset Sale permitted hereunder, and (iv) any Person (other than the Parent or a Borrower) may merge or consolidate with or into any Restricted Subsidiary in a transaction in which the surviving entity is a Restricted Subsidiary (and, if any party to such merger or consolidation is a Borrower, is a Borrower and otherwise, if any party to such merger or consolidation is a Guarantor, is a Guarantor)); or

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(b) acquire or create any Subsidiary unless, after giving effect to such acquisition or creation, (i) the Parent and each Borrower is in compliance with Section 7.11 and (ii) the Investment in such Subsidiary is permitted under Section 8.5.

Section 8.7 Change in Nature of Business

The Parent and the Borrowers shall not, and shall not permit any of its Restricted Subsidiaries to, engage in any business other than the Eligible Line of Business.

Section 8.8 Transactions with Affiliates

The Parent and the Borrowers shall not, and shall not permit any of their respective Restricted Subsidiaries to, enter into any transaction of any kind with any Affiliate of the Parent, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Parent, such Borrower or such Restricted Subsidiary as would be obtainable by the Parent, such Borrower or such Restricted Subsidiary at the time in a comparable arm’s length transaction with a Person other than an Affiliate except (a) transactions among the Parent and its Restricted Subsidiaries, (b) Restricted Payments otherwise permitted by this Agreement, (c) the payment of the operating expenses and capital expenditures of a Subsidiary of the Parent, so long as such payment is in the ordinary course of business and consistent with past business practices with respect to such Subsidiary prior to the date hereof and the Approved Budget, (d) transactions in accordance with the agreements listed on Schedule 8.8 hereto as the same may be amended with the prior consent of each Administrative Agent, (e) the Transactions, (f) transactions between the Parent or any Restricted Subsidiary and any Person that is an Affiliate solely due to the fact that a director or member of such Person is also director of the Parent or a direct or indirect parent of the Parent, and (g) any transaction with an Affiliate of the Parent authorized or approved pursuant to the DIP Orders.

Section 8.9 Restrictions on Subsidiary Distributions; No New Negative Pledge

Other than (a) pursuant to the Loan Documents or (b) pursuant to any secured Indebtedness or Capital Lease Obligations permitted by Section 8.1(b), (d), (e), (m) or (r) so long as any prohibition or limitation is only effective against the assets securing such Indebtedness, the Parent and the Borrowers shall not, and shall not permit any Restricted Subsidiaries to, (i) other than for Joint Ventures and Subsidiaries that are not required to be Guarantors hereunder, agree to, enter into or suffer to exist or become effective any consensual encumbrance or consensual restriction of any kind on the ability of such Subsidiary to pay dividends or make any other distribution or transfer of funds or assets or make loans or advances to or other Investments in, or pay any Indebtedness owed to, the Parent, a Borrower or any other Restricted Subsidiary of the Parent or (ii) other than customary non-assignment provisions in contracts entered into in the ordinary course of business or in any lease, license, contract, property right (including, without limitation, interests in Inventory (as defined in the Pledge and Security Agreement)) or agreement to which any Guarantor is a party or any of its rights or interests thereunder if and only for so long as the grant of a security interest hereunder shall constitute or result in a breach, termination or default under any such lease, license, contract, property right or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any other applicable Laws or principles of equity), enter into or

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Section 8.10 Modification of Documents

The Parent and the Borrowers shall not, and shall not permit any of their respective Restricted Subsidiaries to, amend its Constituent Documents except those that do not materially and adversely affect the interests of the Secured Parties under the Loan Documents or the rights and interests of any of them in the Collateral.

Section 8.11 Accounting Changes; Fiscal Year

Each of the Parent and the Borrowers shall not, and shall not permit any of their respective Restricted Subsidiaries to, (a) make any material change in its accounting treatment and reporting practices or Tax reporting practices, except as required by GAAP or any Requirement of Law and disclosed to the Lenders and each Administrative Agent or (b) change its Fiscal Year.

Section 8.12 Margin Regulations

The Parent and the Borrowers shall not, and shall not permit any of their respective Restricted Subsidiaries to, use all or any portion of the proceeds of any credit extended hereunder to purchase or carry margin stock (within the meaning of Regulation U of the Federal Reserve Board) (i) directly or indirectly in connection with the Business Combination or (ii) in all other cases in contravention of any applicable legal and regulatory requirements including, without limitation, Regulations T, U and X, the Securities Act of 1933, and the Securities Exchange Act of 1934 and the regulations promulgated thereunder.

Section 8.13 Sale/Leasebacks

The Parent and the Borrowers shall not, and shall not permit any of their respective Restricted Subsidiaries to, enter into any sale and leaseback transaction after the Effective Date other than sale and leaseback transactions existing as of the Effective Date and incurred in compliance with the Existing Credit Facilities.

Section 8.14 Capital Expenditures

Subject to the DIP Orders, the Parent and the Borrowers shall not make or incur, or permit any of their respective Restricted Subsidiaries to make or incur, Capital Expenditures other than those consistent with the Approved Budget.

Section 8.15 Cancellation of Indebtedness Owed to It

Subject to the DIP Orders or pursuant to and upon consummation of the Plan of Reorganization, the Parent and the Borrowers shall not, and shall not permit any of their respective Restricted Subsidiaries to, cancel any material claim or Indebtedness owed to any of them except

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(a) in the ordinary course of business, or (b) if such Indebtedness is owed by a Guarantor to a Loan Party (other than the Parent), and such Indebtedness is either (i) cancelled in exchange for Stock of such Guarantor, (ii) converted into Stock of such Guarantor or (iii) converted such that it increases the paid-in-capital of such Loan Party in such Guarantor.

Section 8.16 Hedging

(a) The Parent and the Borrowers shall not, and shall not permit any of their respective Restricted Subsidiaries to, engage in any material speculative transaction or in any material transaction involving the entry into of (i) Hedging Contracts by such Person except for the sole purpose of hedging in the ordinary course of business or (ii) any Hedging Contract other than in respect of interest rates or foreign exchange exposure.

(b) In no event shall the Hedging Contracts of the Parent, the Borrowers and their respective Restricted Subsidiaries designed to mitigate the risks of any Person arising from fluctuations in interest rates exceed, at any time, an aggregate outstanding notional amount of $500,000,000.00.

(c) In no event shall the Hedging Contracts of the Parent, the Borrowers and their respective Restricted Subsidiaries designed to mitigate the risks of any Person arising from fluctuations in currency values exceed, at any time, an aggregate outstanding notional amount of $1,000,000,000.00.

Section 8.17 Post-Termination Benefits

Except to the extent required under Section 4980B of the Code or similar state laws, the Parent, the Borrowers and the Guarantors shall not, and shall not permit any of their respective Restricted Subsidiaries to, adopt any new employee benefit plan that provides health or welfare benefits (through the purchase of insurance or otherwise) to any retired or former employees, consultants or directors (or their dependents) of the Parent or any of its Subsidiaries, which plan, when combined with any existing post-retirement benefit plan of the Parent or the Borrowers or any of their Restricted Subsidiaries would reasonably be expected to result in aggregate liability, calculated on a FAS 106 basis as of the end of any fiscal year, in excess of $65,000,000.00.

Section 8.18 Activities in Panama

The Parent and the Borrowers shall not, and shall not permit any of their respective Restricted Subsidiaries to, invest the proceeds of any Loan in any activity within the territory of the Republic of Panama if such activity will (i) generate taxable income under Panamanian Tax laws that will have to be paid by the Parent or any of its Subsidiaries to a Panamanian Governmental Authority; or (ii) cause any payment to a Lender or any Administrative Agent to be subject to Panamanian Tax, including withholding Tax.

Section 8.19 Vessel Flags

The Parent and the Borrowers shall not, and shall not permit any of their respective Restricted Subsidiaries to, change the flag under which any Mortgaged Vessel is registered or register a Mortgaged Vessel under any flag.

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Section 8.20 Payments of Junior Priority Indebtedness

Except as otherwise permitted by the DIP Orders, the Cash Management Order, or pursuant to and upon consummation of the Plan of Reorganization, the Parent and the Borrowers shall not, and shall not permit any of their respective Restricted Subsidiaries to, make any cash payment or prepayment (including any redemption, purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar payment) on account of principal of any Junior Priority Indebtedness.

Section 8.21 Payments of Existing Senior Indebtedness

Except as otherwise permitted by the DIP Orders, the Parent and the Borrowers shall not, and shall not permit any of their respective Restricted Subsidiaries to, make any voluntary prepayment (including any voluntary redemption, purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar voluntary payment) on account of the principal of any Existing Senior Indebtedness.

Section 8.22 Use of Proceeds

(a) The Parent and the Borrowers shall not use, and shall not cause or permit any Subsidiary to use, whether directly or indirectly, the proceeds of any Borrowing or any Letter of Credit, (i) in any manner that would constitute a violation of Sanctions by any party hereto or (ii) for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in each case in violation of any Anti-Corruption Law applicable to the Parent, the Borrowers or their applicable Subsidiaries.

(b) The Borrowers shall not, directly or indirectly, fund all or part of any repayment or reimbursement of the Obligations out of proceeds derived from any transaction or activity involving a Sanctioned Person or Sanctioned Country, in each case in violation of Sanctions applicable to the Borrowers or its applicable Subsidiaries.

(c) Proceeds of the Loans or the issuance of Letters of Credit shall not be used (i) by any Borrower, any Guarantor or any of their representatives to challenge or otherwise contest or institute any proceeding to determine (x) the validity, perfection or priority of security interests in favor of any of the Lenders or the Prepetition Secured Parties, or (y) the enforceability of the obligations of the Borrower or any Guarantor under this Agreement or any Prepetition Credit Agreement, (ii) to investigate, commence, prosecute or defend any claim, motion, proceeding or cause of action against any of the Lenders or the Prepetition Secured Parties, each in such capacity, and their respective agents, attorneys, advisors or representatives, including, without limitation, any lender liability claims or subordination claims, (iii) to fund acquisitions, capital expenditures, capital leases, or any other expenditure other than as set forth in the Approved Budget or the Carve Out, or (iv) until the occurrence of the Final Satisfaction Date, to pay Prepetition Secured Obligations, except as permitted by the DIP Orders or this Agreement.

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(d) The Borrowers will not request any Borrowing or Issuance of a Letter of Credit, and the Parent and each Borrower shall not use, and shall procure that the Parent’s Subsidiaries and their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, in either case in violation of any Sanctions applicable to such Borrower and its Subsidiaries, or (iii) in any manner that would result in the violation of any Sanctions applicable to any Loan Party or, to the knowledge of the Parent or either Borrower, any other Person.

Section 8.23 Cash Management.

Subject to authorizations under the DIP Orders, the Cash Management Order, the Approved Budget or the Carve Out, the Parent and the Borrowers shall not, and shall not permit any of its Restricted Subsidiaries to change, modify or otherwise act in a manner materially inconsistent with past practice with respect to the cash management system or activities of the Parent, the Borrowers and their Restricted Subsidiaries.

Section 8.24 Changes to DIP Orders.

Without the consent of the Administrative Agents and the Collateral Agent (in each case in their capacities as such) and the Requisite Revolving Lenders and the Requisite Term Lenders, none of the Debtors shall file a motion (or support any motion) seeking to amend or otherwise modify any DIP Order.

Section 8.25 Actions Requiring Prior Requisite Lender Consent.

Without the consent of the Requisite Revolving Lenders and Requisite Term Lenders (such consent not to be unreasonably withheld), the Parent, the Borrowers and the Guarantors will not, and will not permit any Restricted Subsidiary to, (i) enter into any settlements with respect to the assumption, assumption and assignment or rejection of any executory contracts or unexpired leases under the Bankruptcy Code, or fail to consult with the Lenders with respect to any such assumption or such assumption and assignment or such rejection before the motion therefor is entered by the Bankruptcy Court, regardless of whether any settlement is contemplated, (ii) make any motion to the Bankruptcy Court to authorize any actions or transactions (including authorization to sell assets) under Section 363 of the Bankruptcy Code (except for asset sales that are permitted under the Loan Documents, including, for the avoidance of doubt, the Technology Business Sale), (iii) make any motions to approve any compromise or settlement under Rule 9019, (iv) file with the Bankruptcy Court any plan of reorganization or liquidation and related disclosure statement; or (v) support any motion for relief from the Automatic Stay.

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ARTICLE IX

EVENTS OF DEFAULT

Section 9.1 Events of Default

Each of the following events shall be an “Event of Default”:

(a) the Borrowers shall fail to pay any principal of any Loan or any Applicable Reimbursement Obligation when the same becomes due and payable; or

(b) the Borrowers shall fail to pay when due and payable any interest on any Loan, any fee under any of the Loan Documents or any other Obligation (other than one referred to in clause (a) above) and such non-payment continues for a period of three Business Days after the due date therefor; or

(c) any representation or warranty made or deemed made by any Loan Party in any Loan Document shall prove to have been incorrect in any material respect when made or deemed made; or

(d) any Loan Party shall fail to perform or observe (i) any term, covenant or agreement contained in Section 2.6(b)(ii), Section 2.11 or Section 2.12 (in each case, only to the extent the Borrowers fail to post cash collateral or make mandatory prepayments as required under such section and not with respect to other requirements thereunder), Article V, Section 6.3, Section 7.1, Section 7.6, Section 7.9, Section 7.13, Section 7.17, Section 7.18, Section 7.19 or Article VIII; (ii) any term, covenant or agreement contained in Section 6.1 (other than Section 6.1(d)) if such failure shall remain unremedied for five (5) Business Days; (iii) any term, covenant or agreement contained in Section 6.1(d) if such failure shall remain unremedied for one (1) Business Days or (iv) any other term, covenant or agreement contained in this Agreement or in any other Loan Document if such failure under this clause (iv) shall remain unremedied for 30 days after the earlier of (A) the date on which a Responsible Officer of the Parent or a Borrower obtains actual knowledge of such failure and (B) the date on which written notice thereof shall have been given to the Parent or a Borrower by any Administrative Agent or any Lender; or

(e) (i) the Parent, a Borrower or any of the Parent’s Material Subsidiaries shall fail to make any payment on any Indebtedness of the Borrowers or any such Material Subsidiary (other than (v) the Obligations, (w) Non-Recourse Indebtedness, other than any Indebtedness of any Debtor that was incurred prior to the Petition Date (or, if later, the date on which such Person became a Debtor), other than any Indebtedness arising after the Petition Date as a result of a draw or demand on a letter of credit or surety bond outstanding as of the Petition Date and (z) Indebtedness for which the exercise of remedies is stayed under the Bankruptcy Code) or any Guaranty Obligation in respect of Indebtedness of any other Person, and, in each case, such failure (A) constitutes a failure to pay the principal amount of such Indebtedness when due and payable (whether at maturity or otherwise) or constitutes a failure to make any other payment where such failure permits (with the giving of notice if required), at the time of determination under this Section 9.1(e), the acceleration of such Indebtedness and (B) relates to Indebtedness having a principal amount of $35,000,000.00 or more, (ii) any other event shall occur or condition shall exist under any agreement or instrument relating to any Indebtedness having a principal amount

-139- of $35,000,000.00 or more, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness or (iii) any Indebtedness having a principal amount of $35,000,000.00 or more shall become or be declared to be due and payable, or required to be prepaid or repurchased (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof; provided that clauses (ii) and (iii) above shall not apply to any secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; or

(f) (i) any of the Parent’s Material Subsidiaries that is not a Debtor (any such Subsidiary that is not a Debtor, an “Applicable Subsidiary”) shall generally not pay its debts as such debts become due, shall admit in writing its inability to pay its debts generally or shall make a general assignment for the benefit of creditors, (ii) any proceeding shall be instituted by or against an Applicable Subsidiary seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts, under any Requirement of Law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a custodian, receiver, trustee or other similar official for it or for any substantial part of its property; provided, however, that, in the case of any such proceedings instituted against any Applicable Subsidiary (but not instituted by the Parent or any of its Subsidiaries), either such proceedings shall remain undismissed or unstayed for a period of 45 days or more or an order or decree approving or ordering any of the foregoing shall be entered, or (iii) an Applicable Subsidiary shall take any corporate action to authorize any action set forth in clause (i) or (ii) above, in each case, unless (x) prior to such filing or other circumstance such Applicable Subsidiary becomes a Subsidiary Loan Party, (ii) within 5 Business Days of filing or other circumstance, such Applicable Subsidiary’s chapter 11 case becomes jointly administered with that of the Borrowers, and (iii) each of the Interim DIP Order (within 5 Business Days of the commencement of such proceeding or other circumstance) and Final DIP Order (within 35 days of the commencement of such proceeding or other circumstance) are made applicable to such Applicable Subsidiary; or

(g) other than as a result of the filing of the Cases, one or more judgments, injunctions or orders (or other similar process) (which, in the case of the Debtors only, arose post-petition) involving, in the case of a money judgment, an amount in excess of $35,000,000.00 in the aggregate (to the extent not covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage), shall be rendered against one or more of the Parent, a Borrower and the Parent’s Material Subsidiaries (excluding any order fixing the amount of any claim in the Cases) and shall remain unpaid and either (x) enforcement proceedings shall have been commenced by any creditor upon such judgment, injunction or order or (y) there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment (including the Automatic Stay under the Cases), injunction or order, by reason of a pending appeal or otherwise, shall not be in effect; or

(h) (i) one or more ERISA Events (except for those events set forth on Schedule 4.16(d) to this Agreement) shall occur and the amount of all liabilities and deficiencies resulting therefrom imposed on or which could reasonably be expected to be imposed directly on the Parent, a Borrower, any of their respective Restricted Subsidiaries or any Guarantor, whether or not assessed, when taken together with amounts of all such liabilities and deficiencies for all other such ERISA Events exceeds $35,000,000.00 in the aggregate, or (ii) there exists any fact or circumstance that reasonably could be expected to result in the imposition of a Lien or security interest under Section 430 of the Code or under ERISA; or

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(i) any provision of any Collateral Document or any other Loan Document (including this Agreement) shall for any reason, except as permitted by the Loan Documents, cease to be valid and binding on, or enforceable against, any Loan Party which is a party thereto, or any Loan Party shall so state in writing; or

(j) the Collateral Documents (or any of them) shall for any reason fail or cease to create a valid Lien on any Collateral with an aggregate value of $15,000,000.00 or more purported to be covered thereby or, except as permitted by the Loan Documents, such Lien shall fail or cease to be perfected or have the priority described herein and in the DIP Orders or any Loan Party shall so state in writing; or

(k) there shall occur any Change of Control; or

(l) [reserved]; or

(m) [reserved]; or

(n) [reserved]; or

(o) any of the Cases of the Debtors shall be dismissed or converted to a case under Chapter 7 of the Bankruptcy Code or any Debtors shall file a motion or other pleading seeking the dismissal of any of Case of any Debtor under Section 1112 of the Bankruptcy Code or otherwise; or

(p) an order shall be entered terminating the Loan Parties’ exclusivity period for proposing a plan of reorganization in the Cases; or

(q) an order with respect to any of the Cases shall be entered appointing, or any Loan Party shall file an application for an order with respect to any of the Cases seeking the appointment of, in either case, (i) a trustee under Section 1104 of the United States Bankruptcy Code or (ii) an examiner or any other Person with enlarged powers relating to the operation of the business of any Loan Party (i.e., powers beyond those set forth in Sections 1104(d) and 1106(a)(3) and (4) of the United States Bankruptcy Code) under Section 1106(b)(3) and 1106(b)(4) of the United States Bankruptcy Code; or

(r) the Bankruptcy Court shall enter an order or orders granting relief from the automatic stay applicable under Section 362 of the Bankruptcy Code to any third party to permit foreclosure (or the granting of a deed in lieu of foreclosure or the like) on any Collateral of any of the Debtors which has a value in excess of $15,000,000.00 in the aggregate; or

(s) an application shall be filed by any Debtor for the approval of, or an order of the Bankruptcy Court shall be entered granting, any other Liens or claims (as such word is defined in the Bankruptcy Code), other than the Carve Out, in any of the Cases of the Debtors that is pari passu with or senior to the claims (as such word is defined in the Bankruptcy Code) or Liens of the Administrative Agent, the Lenders or the other Secured Parties on the Collateral against the Borrowers or any other Loan Party or (ii) any Liens or claims (as such word is defined in the Bankruptcy Code) senior to or pari passu with the claims (as such word is defined in the Bankruptcy Code) or Liens of the Administrative Agent, the Lenders or the other Secured Parties on the Collateral (other than the Carve Out or any Permitted Liens) against the Borrowers or any other Loan Party shall be discovered to exist, arise or otherwise be granted); or

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(t) an order of the Bankruptcy Court shall be entered denying or terminating the use of cash collateral by any Loan Party or imposing any additional conditions on such use in excess of those set forth in the Cash Collateral Order or the DIP Orders; (ii) the DIP Orders shall cease to create (x) a valid and perfected Liens on the Collateral described therein or (y) Superpriority Claims in respect of the Obligations or the DIP Order shall cease to be in full force and effect; (iii) an order in the Cases shall be entered staying, reversing, vacating, or otherwise modifying the DIP Order, unless consented to by the Administrative Agents, the Requisite Revolving Lenders and the Requisite Term Lenders; (iv) an order in the Cases shall be entered charging any of the Collateral under Section 506(c) of the Bankruptcy Code against the Lenders; (v) any order shall be entered in the Cases providing adequate protection, other than the DIP Orders; or (vi) the entry of an order in the Cases (other than the DIP Orders) authorizing use of cash collateral or postpetition financing (other than the Facilities) pursuant to Section 364 of the Bankruptcy Code (other than the Facilities), unless such financing would (and actually does) provide for payment in full of all Obligations and terminate all Commitments upon the consummation thereof; or

(u) an order shall be entered by the Bankruptcy Court confirming a plan under Section 1129 of the Bankruptcy Code other than a Plan of Reorganization; or

(v) failure of any Loan Party (or any Subsidiary thereof) to comply with the DIP Orders; or

(w) any Loan Party (or any direct or indirect parent company or Subsidiary thereof), or any Person claiming by or through the Loan Parties or any of their Subsidiaries, shall (x) obtain court authorization to commence, or shall commence, join in, assist or otherwise participate as an adverse party in any suit or other proceeding against any of the Administrative Agents or any Lender (in any of their respective capacities as such) relating to the Facilities, unless such suit or other proceeding is in connection with the enforcement of the Loan Documents against the Administrative Agent or any Lender, in their capacities as such or (y) file, assist or otherwise participate in any pleading that, if the relief requested therein were granted, would result in an Event of Default); or

(x) the payment by any Loan Party of any Pre-Petition Debt other than (i) as permitted by the DIP Orders, or (ii) as permitted by any order entered by the Bankruptcy Court; provided that such order is reasonably acceptable to the Requisite Revolving Lenders and the Requisite Term Lenders and provided further that such payments are pursuant to the Approved Budget; or

(y) any material portion of the Collateral ceases to be, or otherwise fails to be, covered by any Lien or superpriority claim granted with respect to this Agreement, the Interim DIP Order or the Final DIP Order to be valid, perfected and enforceable in all respects with the priority described herein; or

(z) an application for an order described in clause (t) above shall be made by (i) a Loan Party or (ii) a Person other than a Loan Party and such application is not contested on a timely basis by the Loan Parties in good faith, in each case, other than any such application made in contemplation of the occurrence of the Final Satisfaction Date, provided that concurrently therewith the Final Satisfaction Date occurs; or

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(aa) the commencement of any adversary proceeding, contested matter or other action by any Loan Party asserting in writing any claims or defenses against any of the Prepetition Agents or the Prepetition Secured Parties with respect to the obligations of any Loan Party thereunder or the Liens granted to the Prepetition Agents or Prepetition Secured Parties to secure the Prepetition Secured Obligations, except as permitted under the Interim DIP Order or the Final DIP Order; or

(bb) the termination of the Restructuring Support Agreement or any agreement attached as an exhibit thereto, either in whole or in part, or any modification, amendment or supplement of the Restructuring Support Agreement, including the exhibits thereto, without the prior written consent of the Requisite Term Lenders and the Requisite Revolving Lenders; or

(cc) failure to timely comply with any of the Milestones, as such Milestone may be extended to a later date with the consent of the Requisite Revolving Lenders and the Requisite Term Lenders; or

(dd) the Liquidity Lender Steering Committee and Term Loan Ad Hoc Group shall not have mutually determined that the credit agreement with respect to the Exit Facilities (as defined in the Restructuring Support Agreement) is in substantially final form by the date of entry of the Final DIP Order; or

(ee) an order shall be entered approving the sale of all or substantially all assets of the Debtors.

Section 9.2 Remedies

(a) During the continuance of any Event of Default, subject to the terms of the DIP Orders and this Agreement, (i) the Requisite Term Lenders or the Term Loan Administrative Agent at the direction of the Requisite Term Lenders may immediately (x) deliver a notice of an Event of Default and (y) terminate all or any portion of the Commitments of the Term Lenders, (ii) the Requisite Revolving Lenders or the Revolving Administrative Agent at the direction of the Requisite Revolving Lenders may immediately (x) deliver a notice of an Event of Default and (y) terminate all or any portion of the Commitments of the Revolving Lenders.

(b) In addition to the foregoing, upon the occurrence and during the continuation of an Event of Default, upon three (3) Business Days prior written notice to the Parent from either the Requisite Term Lenders or the Requisite Revolving Lenders or the respective Administrative Agent at the direction thereof, (a) (x) in the case of such notice from the Requisite Term Lenders, the Obligations with respect to the Term Facilities shall be accelerated and (y) in the case of such notice from the Requisite Revolving Lenders, the Obligations with respect to the Revolving Facility shall be accelerated, (b) the Obligations shall accrue interest at the Default Rate, (c) the Automatic Stay shall be terminated without order of the Bankruptcy Court, without the need for filing any motion for relief from the Automatic Stay or any other pleading, for the purpose of permitting the Requisite Term Lenders or the Requisite Revolving Lenders to do any of the following: (i) direct the relevant Administrative Agents to foreclose on the Collateral and (ii) enforce all of their rights under the Loan Documents or available under applicable Law or equity.

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Section 9.3 Actions in Respect of Letters of Credit

Upon the Revolving Termination Date and as required by Section 2.12, the Borrowers shall pay to the Revolving Administrative Agent in immediately available funds at the Revolving Administrative Agent’s office referred to in Section 11.8, for deposit in the LC Facilities Cash Collateral Account in accordance with Section 2.22(b), an amount equal to 105% of the sum of all outstanding Revolving Letter of Credit Obligations (or such lesser amount as is required to cash collateralize Revolving Letter of Credit Obligations under Section 2.12, as applicable). The Revolving Administrative Agent may, from time to time after funds are deposited in the LC Facilities Cash Collateral Account (and while an Event of Default has occurred and is continuing or after the acceleration of the Loans), apply funds then held in the LC Facilities Cash Collateral Account to the payment of any amounts as shall have become or shall become due and payable by the Borrowers to the Issuers or Revolving Lenders in respect of the Revolving Letter of Credit Obligations. The Revolving Administrative Agent shall promptly give written notice of any such application; provided, however, that the failure to give such written notice shall not invalidate any such application.

ARTICLE X

THE ADMINISTRATIVE AGENTS AND OTHER AGENTS

Section 10.1 Authorization and Action

(a) Appointment and Authority. (i) Each of the Revolving Lenders and each Issuer hereby irrevocably appoints Credit Agricole to act on its behalf as the Revolving Administrative Agent hereunder and under the other Loan Documents and authorizes the Revolving Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Revolving Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto, (ii) each of the Lenders, the Issuers and the other Secured Parties irrevocably authorizes and directs each Administrative Agent to enter into the Collateral Agency Agreement pursuant to which each Administrative Agent, on behalf of the Secured Parties, will irrevocably appoint Credit Agricole to act on its behalf as the Collateral Agent hereunder and under the Collateral Documents and authorizes the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Collateral Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto and (iii) each of the Term Lenders hereby irrevocably appoints Barclays to act on its behalf as the Term Loan Administrative Agent hereunder and under the other Loan Documents and authorizes the Term Loan Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Term Loan Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article X are solely for the benefit of each Administrative Agent, the Collateral Agent, the Lenders and the Issuers, and neither the Parent, the Borrowers nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions or any obligations with respect thereto.

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(b) Exculpatory Provisions. Neither any Administrative Agent nor the Collateral Agent shall have any duties or obligations except those expressly set forth herein, in the other Loan Documents and in the Collateral Agency Agreement. Without limiting the generality of the foregoing, neither any Administrative Agent or the Collateral Agent: (i) shall be subject to any fiduciary or other implied duties, regardless of whether a Default or an Event of Default has occurred and is continuing; (ii) shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that such Administrative Agent or the Collateral Agent, as applicable, is required to exercise as directed in writing by the Applicable Requisite Lenders (or such other number or percentage of the Lenders, Term Lenders, or Revolving Lenders, as applicable, as shall be expressly provided for herein or in the other Loan Documents), provided that no Administrative Agent nor the Collateral Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary to any Loan Document or applicable law; and (iii) shall, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, nor shall be liable for the failure to disclose, any information relating to the Parent, the Borrowers or any of its Affiliates that is communicated to or obtained by the Person serving as any Administrative Agent, the Collateral Agent or any Affiliates of the foregoing in any capacity.

Neither any Administrative Agent or the Collateral Agent shall be liable for any action taken or not taken by it (A) with the consent or at the request of the Applicable Requisite Lenders (or such other number or percentage of the Lenders as shall be necessary, or as any Administrative Agent or the Collateral Agent, as applicable, shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.1 and 9.2) or (B) in the absence of its own gross negligence or willful misconduct. Each Administrative Agent and the Collateral Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to each Administrative Agent or the Collateral Agent, as applicable, by the Parent, the Borrowers, a Lender or an Issuer.

Neither any Administrative Agent or the Collateral Agent shall be responsible for or have any duty to ascertain or inquire into (u) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (v) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (w) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (x) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (y) the value or the sufficiency of any Collateral, or (z) the satisfaction of any condition set forth in Article III or elsewhere herein, other than to confirm receipt of items expressly required to be delivered such Administrative Agent or the Collateral Agent, as applicable.

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Each party hereto (whether it is a party to this Agreement as of the Effective Date or becomes a party to this Agreement after the Effective Date) acknowledges and agrees that, in connection with the primary syndication of the New Money Term Loans, consistent with the agreement among the Borrowers, the Term Loan Ad Hoc Group (as defined in the Restructuring Support Agreement) and the Other Backstop Parties (as defined in the DIP Credit Facility Term Sheet attached to the Restructuring Support Agreement), the method of allocation of the New Money Term Loans was to be as follows: (x) $1,053,407,438.00 of New Money Term Loans allocated pro rata based on total outstanding term loans of such primary syndicate members under the Existing Super-Priority Credit Agreement and on total outstanding term loans under the Existing First-Lien Credit Agreement of the Term Loan Ad Hoc Group (as defined in the Restructuring Support Agreement) (with the determination of such amount of term loans under the Existing First-Lien Credit Agreement based solely upon the representation of each such member of the Term Loan Ad Hoc Group (as defined in the Restructuring Support Agreement) to the Term Loan Administrative Agent with respect to itself, including with respect to unsettled trades) and (y) $146,592,562.00 of New Money Term Loans allocated to the Other Backstop Parties (as defined in the DIP Credit Facility Term Sheet attached to the Restructuring Support Agreement) pro rata based on their backstop commitments with respect to such $146,592,562.00 of New Money Term Loans.

(c) Delegation of Duties. Each Administrative Agent and the Collateral Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub agents appointed by such Administrative Agent or the Collateral Agent, as applicable. Each Administrative Agent, the Collateral Agent and any such sub agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub agent and to the Related Parties of any Administrative Agent, the Collateral Agent and any such sub agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent or Collateral Agent, as applicable.

Section 10.2 Administrative Agent’s Reliance, Etc.

Each Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. Each Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the Issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuer, each Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuer unless such Administrative Agent shall have received notice to the contrary from such Lender or the Issuer prior to the making of such Loan or the Issuance of such Letter of Credit. Each Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers or any other Loan Party), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

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Section 10.3 The Agents Individually

The Person serving as each Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not such Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Persons serving as the Agents hereunder in such Person’s individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrowers or any Subsidiary or other Affiliate thereof as if such Person were not an Agent hereunder and without any duty to account therefor to the Lenders.

Section 10.4 Lender Credit Decision

Each Lender and each Issuer acknowledges that it has, independently and without reliance upon any Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and each Issuer also acknowledges that it will, independently and without reliance upon any Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

Section 10.5 Indemnification

(a) Each Lender agrees to indemnify each Administrative Agent, the Collateral Agent and each Issuer (in such capacities) and each of their respective Affiliates, and each of their respective Related Parties (to the extent not reimbursed by the Borrowers), from and against such Lender’s aggregate Ratable Portion (determined at the time such indemnity is made) of any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements (including fees, expenses and disbursements of financial and legal advisors) of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against, an Administrative Agent, the Collateral Agent or such Issuer or any of their respective Related Parties in any way relating to or arising out of this Agreement or the other Loan Documents or any action taken or omitted by an Administrative Agent, the Collateral Agent, or such Issuer under this Agreement or the other Loan Documents; provided, however, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from an Administrative Agent’s, Collateral Agent’s or such Issuer’s or such Related Party’s gross negligence or willful misconduct. Without limiting the foregoing, each Lender agrees to reimburse each Administrative Agent, the Collateral Agent, or each Issuer, as applicable, promptly upon demand for its Ratable Portion (determined at the time such reimbursement is made) of any out-of- pocket expenses (including fees, expenses and disbursements of financial and legal advisors) incurred by such Administrative Agent, the Collateral Agent, or such Issuer, as applicable, in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of its rights or responsibilities under, this Agreement or the other Loan Documents, to the extent that such Administrative Agent, the Collateral Agent, or such Issuer, as applicable, is not reimbursed for such expenses by the Borrowers or another Loan Party.

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(b) To the extent required by any applicable law, each Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding Tax. If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that any Administrative Agent did not properly withhold Tax from amounts paid to or for the account of any Lender because the appropriate form was not delivered, was not properly executed or because such Lender failed to notify such Administrative Agent of a change in circumstances that rendered the exemption from, or reduction of, withholding Tax ineffective or for any other reason, or if an Administrative Agent determines that it otherwise did not withhold an applicable Tax from amounts paid to or for the account of any Lender, such Lender shall indemnify such Administrative Agent fully for all amounts paid, directly or indirectly, by such Administrative Agent in respect of Tax or otherwise, including any penalties and interest and together with any all costs and expenses (including legal expenses, and any out of pocket expenses) incurred, whether or not such Tax was correctly or legally imposed or asserted by the relevant Governmental Authority.

Section 10.6 Successor Agents

Each Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuers and the Borrowers. Upon receipt of any such notice of resignation, (x) with respect to the Revolving Facility, the Requisite Revolving Lenders and (y) with respect to the Term Facilities, the Requisite Term Lenders shall have the right, in consultation with the Borrowers, to appoint a successor, which shall be a bank (other than a Defaulting Lender) with an office in the United States of America, or an Affiliate of any such bank with an office in the United States of America. If no successor shall have been so appointed by the Applicable Requisite Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the Issuers, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if such Administrative Agent shall notify the Borrowers and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by such Administrative Agent on behalf of or for the benefit of the Lenders or the Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security and the rights and obligations under the Parallel Debt until such time as a successor Administrative Agent is appointed and all rights and obligations of the retiring Administrative Agent under the Parallel Debt have been assigned and assumed by such successor Administrative Agent) and (2) all payments, communications and determinations provided to be made by, to or through such Administrative Agent (other than, for the avoidance of doubt, with respect to the Parallel Debt) shall instead be made by or to each applicable Lender and each applicable Issuer directly, until such time as the Applicable Requisite Lenders appoint a successor Administrative Agent as provided for above in this paragraph. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties (including all rights and obligations with respect to the Parallel Debt) of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this paragraph). Each party to the Collateral Documents governed

-148- by Dutch law shall enter into any documents as reasonably necessary or reasonably requested by the successor Collateral Agent to ensure that the successor Collateral Agent shall have substantially the same rights and obligations under the Collateral Documents governed by Dutch law as it would have had if such successor had been an original party thereto. The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article X and Sections 11.3 and 11.4 shall continue in effect for the benefit of such retiring Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

Section 10.7 Concerning the Collateral and the Collateral Documents

(a) Each Lender and each Issuer agrees that any action taken by an Administrative Agent, the Collateral Agent or the Requisite Lenders (or, where required by the express terms of this Agreement, a different proportion of the Lenders) in accordance with the provisions of this Agreement or the other Loan Documents or the Collateral Agency Agreement, and the exercise by an Administrative Agent, the Collateral Agent or the Requisite Lenders (or, where so required, such other proportion) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be deemed authorized by and shall be binding upon all of the Lenders, Issuers and other Secured Parties. Without limiting the generality of the foregoing:

(i) the Revolving Administrative Agent shall have the sole and exclusive right and authority to (A) act as the disbursing and collecting agent for the Revolving Lenders and the Issuers, with respect to all payments and collections arising in connection herewith and with the Collateral Documents, (B) execute and deliver the Collateral Agency Agreement, and (C) except as may be otherwise specifically restricted by the terms hereof or of any other Loan Document, exercise all remedies given to such Administrative Agent, the Revolving Lenders and the Issuers, with respect to the Collateral under the Loan Documents relating thereto, applicable law or otherwise;

(ii) the Term Loan Administrative Agent shall have the sole and exclusive right and authority to (A) act as the disbursing and collecting agent for the Term Lenders with respect to all payments and collections arising in connection herewith and with the Collateral Documents, (B) execute and deliver the Collateral Agency Agreement, and (C) except as may be otherwise specifically restricted by the terms hereof or of any other Loan Document, exercise all remedies given to such Administrative Agent, the Term Lenders with respect to the Collateral under the Loan Documents relating thereto, applicable law or otherwise; and

(iii) the Collateral Agent shall, in accordance with the Collateral Agency Agreement, have the sole and exclusive authority to (A) act as collateral agent for the Lenders, the Issuers and the other Secured Parties for purposes of the perfection of all security interests and Liens created by such agreements and all other purposes stated therein, (B) manage, supervise and otherwise deal with the Collateral, (C) take such action

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as is necessary or desirable to maintain the perfection and priority of the security interests and Liens created or purported to be created by the Collateral Documents and (D) except as may be otherwise specifically restricted by the terms hereof or of any other Loan Document, exercise all remedies given to such Administrative Agent, the Collateral Agent, the Lenders, the Issuers and the other Secured Parties with respect to the Collateral under the Loan Documents relating thereto, applicable law or otherwise.

(b) Each of the Lenders and the Issuers hereby irrevocably consents, in accordance with the terms hereof, to the Collateral Agent’s release (or, in the case of clause (ii) below, release or subordination), at the direction of each Administrative Agent who (without limiting the right of the Administrative Agents to otherwise provide such direction) shall act on the basis of appropriate certifications of the Parent and the Borrowers, of any Lien held by the Collateral Agent for the benefit of the Secured Parties against any of the following:

(i) all of the Collateral, upon termination or expiration of the Commitments and payment in full of all Loans, Applicable Reimbursement Obligations and all other Obligations, including the cash collateralization or other required arrangements in respect of any obligations in respect of Letters of Credit to the extent required under this Agreement (other than contingent indemnification obligations for which no claims has been asserted, any Treasury Management Obligations and any Hedging Obligations) that each Administrative Agent has been notified in writing are then due and payable (and, in respect of Contingent Obligations in respect of Letters of Credit, with respect to which cash collateral has been deposited or a back-up letter of credit has been issued, in either case on terms reasonably satisfactory to the Applicable Administrative Agent and the applicable Issuers);

(ii) any assets that are subject to a Lien permitted by Section 8.2(b), (d)(ii), (d)(iii) or (l) or any refinancings thereof permitted under Section 8.2(e);

(iii) if such sale or disposition is permitted by this Agreement (or permitted pursuant to a waiver or consent of a transaction otherwise prohibited by this Agreement), any Collateral sold or disposed of by a Loan Party and/or the guaranty of any Subsidiary Guarantor which has been voluntarily sold or disposed of by a Loan Party or otherwise ceases to be a Subsidiary of the Parent as a result of a transaction permitted by this Agreement; and

(iv) to the extent certified in writing by the Parent, any other Collateral that is no longer required to be subject to a Lien pursuant to the Loan Documents.

Each of the Lenders and the Issuers hereby irrevocably consents, in accordance with the terms hereof, to the Collateral Agent’s release, at the direction of each Administrative Agent who (without limiting the right of the Administrative Agents to otherwise provide such direction) shall act on the basis of appropriate certifications of the Parent and the Borrowers, of any Guarantor from its Guarantee or its obligations under the Pledge and Security Agreement and any other Collateral Document if such release is permitted by Section 11.1(a) (ix). Each of the Lenders and the Issuers hereby irrevocably consents to the Collateral Agent’s and each Administrative Agent’s execution, delivery and filing of such termination and partial release statements and such other things as are necessary to release Liens and guaranties to be released pursuant to this Section 10.7 promptly upon the effectiveness of any such release.

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(c) Each Administrative Agent and the Collateral Agent are hereby authorized to enter into the Collateral Agency Agreement. A copy of any documents evidencing such intercreditor arrangements will be made available to each Secured Party upon request. Each Secured Party (by receiving the benefits thereunder) acknowledges and agrees to the terms of such intercreditor arrangements and agrees that the terms thereof shall be binding on such Secured Party and its successors and assigns as if it were a party thereto.

Section 10.8 Collateral Matters Relating to Related Obligations

The benefit of the Loan Documents and of the provisions of this Agreement relating to the Collateral shall extend to and be available in respect of any Obligation that is otherwise owed to Persons other than any Administrative Agent, the Collateral Agent, the Lenders and the Issuers (collectively, “Related Obligations”) solely on the condition and understanding, as among the Collateral Agent and all Secured Parties, that (a) the Related Obligations shall be entitled to the benefit of the Loan Documents and the Collateral to the extent expressly set forth in this Agreement and the other Loan Documents and to such extent the Collateral Agent shall hold, and have the right and power to act with respect to, the Collateral Documents and the Collateral on behalf of and as agent for the holders of the Related Obligations, but the Collateral Agent is otherwise acting solely as agent for the Lenders and the Issuers and shall have no fiduciary duty, duty of loyalty, duty of care, duty of disclosure or other obligation whatsoever to any holder of Related Obligations, (b) all matters, acts and omissions relating in any manner to the Collateral Documents, the Collateral, or the omission, creation, perfection, priority, abandonment or release of any Lien, shall be governed solely by the provisions of this Agreement and the other Loan Documents and no separate Lien, right, power or remedy shall arise or exist in favor of any Secured Party under any separate instrument or agreement or in respect of any Related Obligation, (c) each Secured Party shall be bound by all actions taken or omitted, in accordance with the provisions of this Agreement and the other Loan Documents, by each Administrative Agent, the Collateral Agent and the Applicable Requisite Lenders (or such other group of the Lenders as shall be expressly provided for herein or in the other Loan Documents), each of whom shall be entitled to act at its sole discretion and exclusively in its own interest given its own Commitment and its own interest in the Loans, Revolving Letter of Credit Obligations, Cash Secured LC Obligations and other Obligations arising under this Agreement or the other Loan Documents, without any duty or liability to any other Secured Party or as to any Related Obligation and without regard to whether any Related Obligation remains outstanding or is deprived of the benefit of the Collateral or becomes unsecured or is otherwise affected or put in jeopardy thereby, and (d) no holder of Related Obligations and no other Secured Party (except any Administrative Agent, the Collateral Agent, the Lenders and the Issuers, to the extent set forth in this Agreement) shall have any right to be notified of, or to direct, require or be heard with respect to, any action taken or omitted in respect of the Collateral or under this Agreement or the Loan Documents. Without limiting the provisions of Section 10.7(b) and notwithstanding any other provision of any Loan Document to the contrary, no Administrative Agent shall be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Treasury Management Obligations and Obligations arising under Hedging Contracts.

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Section 10.9 Other Agents

Anything herein to the contrary notwithstanding, none of the Documentation Agents, the Arrangers or the Bookrunners listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as an Administrative Agent, the Collateral Agent, a Lender or an Issuer hereunder.

Section 10.10 Certain ERISA Matters

(a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of each Administrative Agent and the Arrangers and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:

(i) such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, Letters of Credit or the Commitments,

(ii) the prohibited transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable so as to exempt from the prohibitions of ERISA Section 406 and Code Section 4975, such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,

(iii) (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or

(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

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(b) In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of each Administrative Agent and the Arrangers and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that:

(i) none of the Administrative Agents, the Arrangers or any of their respective Affiliates are a fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agents under this Agreement, any Loan Document or any documents related to hereto or thereto),

(ii) the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),

(iii) the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the Obligations),

(iv) the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to the Loans, the Letters of Credit, the Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder, and

(v) no fee or other compensation is being paid directly to an Administrative Agent, Arranger or any of their respective Affiliates for investment advice (as opposed to other services) in connection with the Loans, the Letters of Credit, the Commitments or this Agreement.

(c) The Administrative Agents and the Arrangers hereby inform the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters of Credit, or the Commitments for an amount less than the amount being paid for an

-153- interest in the Loans, the Letters of Credit, or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

Section 10.11 Non-Reliance on Administrative Agent and Other Lenders; Disclosure of Information by Agents

Each Lender acknowledges that no Agent or their Related Parties has made any representation or warranty to it, and that no act by any Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Loan Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by an Agent or their Related Parties to any Lender as to any matter, including whether an Agent or their Related Parties have disclosed material information in their possession. Each Lender represents to each Agent that it has, independently and without reliance upon any Agent or their Related Parties and based on such documents and information as it has deemed appropriate, made its own appraisal of, and investigation into, the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties and their respective Subsidiaries, and all applicable bank or other regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrowers and the other Loan Parties hereunder. Each Lender also represents that it will, independently and without reliance upon the Administrative Agents, any other Agent or their Related Parties, or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrowers and the other Loan Parties. Except for notices, reports and other documents expressly required to be furnished to the Lenders by any Agent herein, such Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any of the Loan Parties or any of their respective Affiliates which may come into the possession of any Agent or their Related Parties.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Amendments, Waivers, Etc.

(a) No amendment or waiver of any provision of this Agreement or any other Loan Document nor consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be in writing and signed by the Requisite Lenders (or by the Applicable Administrative Agents with the consent of the Requisite Lenders) and, in the case of any amendment, by the Borrowers, and then any such waiver or consent shall be effective only in

-154- the specific instance and for the specific purpose for which given; provided, however, notwithstanding the foregoing, each Loan Document may be amended in accordance with its express terms; provided, further, that no amendment, waiver or consent shall, unless in writing and signed by each Lender or Issuer directly affected thereby (or the Administrative Agents with the consent of each such Lender or Issuer thereof), or as otherwise specifically provided below in this Section 11.1(a), do any of the following:

(i) [reserved];

(ii) [reserved];

(iii) increase the Commitment of such Lender (it being agreed that a waiver of any condition precedent or the waiver of any Default, Event of Default or mandatory prepayment and any increase in Revolving Commitments occurring as a result of the occurrence of the Final Facility Effective Date will not constitute a Commitment increase governed by this clause (iii));

(iv) extend the scheduled final maturity of any Loan owing to such Lender or any Applicable Reimbursement Obligation payable to such Lender, or waive, reduce or postpone any scheduled date fixed for the payment or reduction of principal of any such Loan or Applicable Reimbursement Obligation or for the reduction of such Lender’s Commitment, including by amending, waiving or modifying Section 2.9 in a manner having such effect (it being agreed that (x) a waiver of any condition precedent or the waiver of any Default, Event of Default or mandatory prepayment will not constitute an extension, waiver, reduction or postponement under this clause (iv), and (y) the waiver of any condition to the automatic extension of the Revolving Maturity Date or the Scheduled Term Maturity Date, in each case, as set forth in clauses (a)(i)-(a)(v) of such definition, may be effected with only the consent of the Requisite Revolving Lenders and the Requisite Term Lenders);

(v) reduce the principal amount of any Loan owing to such Lender or any Applicable Reimbursement Obligation payable to such Lender, including by amending, waiving or modifying Section 2.9 (in each case, other than by the payment or prepayment thereof in cash in immediately available funds) (it being agreed that a waiver of any condition precedent or the waiver of any Default, Event of Default or mandatory prepayment will not constitute a reduction in the principal amount of any Loan or any Applicable Reimbursement Obligation under this clause (v));

(vi) reduce the rate or amount of interest on any Loan outstanding to such Lender or any Applicable Reimbursement Obligations outstanding or any fee payable hereunder to such Lender; provided, however, that only the consent of the Requisite Revolving Lenders shall be necessary to waive any obligation of the Borrowers to pay interest or Letter of Credit Participation Fees at the default rate set forth in Section 2.7(i)(ii), and Section 2.15(c)(ii), respectively, and only the consent of the Requisite Lenders shall be necessary to waive any obligation of the Borrowers to pay interest at the default rate set forth in Section 2.13(d);

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(vii) postpone any scheduled date fixed for payment of interest or fees owing to such Lender (it being agreed that a waiver of any condition precedent or the waiver of any Default, Event of Default or mandatory prepayment will not constitute a postponement under this clause (vii));

(viii) (x) alter the manner in which payments or prepayments of principal, interest or other amounts hereunder (including (A) by amending Sections 2.11 or 2.12 in a manner having such effect and (B) with respect to any provision of cash collateral) shall be applied as among the Lenders or (y) change the percentage of Lenders required for any or all Lenders to take any action hereunder;

(ix) (x) release all or substantially all of the Collateral (or all or any part of the Collateral constituting all or any material portion of the Technology Business) except as provided in Section 10.7(b)(i) or amend, waive, consent or otherwise modify any condition in Section 2.12(c) to the release of the Net Cash Proceeds of the Technology Business Sale from the Tech Sale Proceeds Account, (y) release a Borrower from its payment obligation to such Lender under this Agreement or the Notes owing to such Lender (if any) or (z) release any Guarantor from its Guarantee or its obligations under the Pledge and Security Agreement except (I) in connection with the sale or other disposition of such Guarantor (or all or substantially all of the assets thereof) permitted by this Agreement (or permitted pursuant to a waiver or consent of a transaction otherwise prohibited by this Agreement) and (II) in connection with any other transaction permitted pursuant to this Agreement in which such Subsidiary Guarantor ceases to be a Guarantor (including, without limitation, in connection with any transaction permitted pursuant to Section 8.6); provided, however, that notwithstanding the foregoing clause (z), each of the following may be released: (x) any Guarantor that ceases to be a Subsidiary of the Parent as the result of a transaction permitted hereunder and (y) with the consent of each Administrative Agent, any Guarantor that, as a result of its status as a Guarantor, would be required to take any action that at such time (I) is prohibited by (A) any Governmental Authority with authority over such Guarantor or (B) applicable law, (II) requires the consent of a Governmental Authority that has not been obtained or (III) is not within such Guarantor’s legal capacity or authority;

(x) amend Section 2.16(e) or (f), Section 10.7(b), this Section 11.1, the sharing provisions of Section 11.7 or the definitions of the terms “Funded Portion”, “Requisite Lenders”, “Requisite Revolving Lenders”, “Requisite Term Lenders”, or “Ratable Portion”, “Supermajority Lenders”, “Supermajority Revolving Lenders” or “Supermajority Term Lenders”;

(xi) except as provided in Section 2.6(b) or Section 10.7(b), and excluding any application of Collateral to the applicable obligations, release any Collateral or subordinate the Lien securing the Obligations to any other indebtedness without the consent of each Lender, it being agreed that only the consent of the Supermajority Lenders shall be necessary to permit any other indebtedness to be secured by a Lien on the Collateral (other than the LC Facilities Cash Collateral Account or the Cash Secured LC Cash Collateral Account) on a pari passu basis with the Obligations;

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(xii) amend or modify the Superpriority Claim status of the Lenders under the DIP Orders or under any Loan Document; or

(xiii) amend the definitions of the terms “Performance Letter of Credit,” “Revolving Letter of Credit” or any other definition or other provision that would have the effect of permitting any Letter of Credit that is not a Performance Letter of Credit to be issued or outstanding under the Revolving Facility, provided, further, that without limiting the foregoing: (p) no amendment, waiver or consent, shall amend, waive, consent to any departure from or otherwise modify Section 2.4 or Section 2.6 without the approval of the Requisite Revolving Lenders (it being agreed that the approval of any other Lender shall not be required unless otherwise expressly specified in this proviso), (q) no amendment, waiver or consent, shall amend, waive, consent to any departure from or otherwise modify Section 3.2 (including any Annex or Schedule referenced in such Section) without the approval of the Requisite Term Lenders and Requisite Revolving Lenders, (r) without the consent of the Requisite Term Lenders and Requisite Revolving Lenders, no amendment, waiver or consent shall amend, waive, consent to any departure from or otherwise modify Section 8.4 or Section 10.7; provided that any amendment, waiver or consent to any departure from or other modification of Section 2.12(c) or the definition of “Technology Business Sale,” or any modification of this Agreement to permit the sale, transfer or other disposition of all or a portion of the Technology Business on terms other than pursuant to the definition of Technology Business Sale and Section 2.12(c) shall require the consent of the Supermajority Lenders, (s) without the consent of the Requisite Term Lenders and Requisite Revolving Lenders, no amendment, waiver or consent shall amend, waive, consent to any departure from or otherwise modify Section 4.27, Section 7.18, Section 8.24, Section 8.25, any of Section 9.1(m) through Section 9.1(ee) (inclusive), other than Section 9.1(dd), or the definitions of the terms “DIP Orders”, “Final DIP Order”, “Interim DIP Order”, “Milestone” (including Schedule IV), “Plan of Reorganization”, and “Restructuring Support Agreement”, (t) without the consent of the Requisite Revolving Lenders and the Requisite Term Lenders, as applicable, no amendment, waiver or consent shall amend, waive, consent to any departure from or otherwise modify any section or defined term of this Agreement requiring the consent, satisfaction or approval of the Requisite Revolving Lenders and/or the Requisite Term Lenders hereunder, (u) without the prior written consent of each of the Cash Secured LC Issuers to whom Cash Secured LC Obligations are then owing, no amendment, waiver or consent shall amend, waive, consent to any departure from or otherwise modify the definition of the term “Cash Secured LC Cash Collateral Account” or the provisions of any Loan Documents related thereto, (v) without the prior written consent of each of the Revolving Lenders and the Revolving Issuers, no amendment, waiver or consent shall amend, waive, consent to any departure from or otherwise modify the definition of the term “LC Facilities Cash Collateral Account” or the provisions of any Loan Documents related thereto, (v) neither the aggregate Revolving Commitments or the LC Cap (or any component of the calculation thereof) shall be increased without the prior written consent of each of the Revolving Lenders, (w) none of Section 2.4(b)(iii), Section 2.6(a)(iii) or any definition used therein shall be amended without the prior written consent of each of the Revolving Lenders, (x) the aggregate principal amount of the Loans and the Commitments shall not be increased without the prior written consent of the Supermajority Lenders, (y) no amendment shall be made to this clause (a) without the prior written consent of each Lender, (z) no amendment, waiver or consent shall, unless in writing and signed by any Special Purpose Vehicle that has been granted an option pursuant to Section 11.2(g), affect the grant or nature of such option or the right or duties of such Special Purpose Vehicle hereunder,

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(aa) (i) no amendment, waiver or consent shall, unless in writing and signed by the Applicable Administrative Agent in addition to the Lenders required above to take such action, affect the rights or duties of such Administrative Agent under this Agreement or the other Loan Documents or amend or modify the Superpriority Claim status of such Administrative Agent under the DIP Orders or under any Loan Document and (ii) no amendment, waiver or consent shall, unless in writing and signed by the Collateral Agent in addition to the Lenders required above to take such action, affect the rights or duties of the Collateral Agent under this Agreement or the other Loan Documents, (bb) no amendment, waiver or consent shall, unless in writing and signed by such Issuer, affect the rights or duties of any Issuer under this Agreement or the other Loan Documents, and (cc) Section 2.4(b)(xiii) shall not be modified without the consent of each of the Revolving Lenders. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the Lenders other than Defaulting Lender), except that (x) the Commitments of any Defaulting Lender may not be increased or extended without the consent of such Lender if such increase or extension would require the consent of such Lender under clause (iii) or (iv) above were such Lender not a Defaulting Lender, (y) the principal amount of any Loan owing to a Defaulting Lender or any Applicable Reimbursement Obligation payable to such Defaulting Lender may not be reduced without the consent of such Lender (in each case, other than by the payment or prepayment thereof) and (z) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender.

Notwithstanding the foregoing: (I) any modification or amendment to any Collateral Document or the Guaranty Agreement to modify or amend the form, scope or content of any such Collateral Document or the Guaranty Agreement to conform or comply with local law requirements or custom shall only require the consent of each Administrative Agent and the Collateral Agent, (II) each fee letter entered into by a Loan Party in connection with this Agreement may be amended, or rights or privileges thereunder waived, in writing executed only by the parties thereto and (III) only the consent of each Administrative Agent shall be required for the amendments contemplated by Section 2.17(b)(ii).

For the avoidance of doubt, no direction to an Agent may have the effect of an amendment or waiver of any provision of this Agreement or consent to any departure by any Loan Party therefrom unless such direction is given by the number of Lenders required to effect such amendment, waiver or consent directly under this Section 11.1. For the purposes of determining whether any consent contemplated in this Section 11.1(a) has been obtained, each Lender may specify the aggregate amount of Commitments and Exposure in respect of which its consent is provided, and the balance thereof shall be deemed non-consenting.

(b) Each Administrative Agent may, but shall have no obligation to, with the concurrence of any Applicable Lender, execute amendments, modifications, waivers or consents on behalf of such Lender. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on a Borrower in any case shall entitle the Borrowers to any other or further notice or demand in similar or other circumstances.

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(c) If, in connection with any proposed amendment, modification, waiver or termination requiring the consent of all affected Lenders, the consent of Requisite Lenders is obtained but the consent of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained as described in this Section 11.1(c) being referred to as a “Non-Consenting Lender”), then, at the Borrowers’ request, the Administrative Agents or an Eligible Assignee reasonably acceptable to the Administrative Agents (provided that any Lender, Affiliate of a Lender or an Approved Fund shall be acceptable) shall have the right (but shall have no obligation) to purchase from such Non-Consenting Lender, and such Non-Consenting Lender agrees that it shall, upon such request and acceptance, sell and assign to such Lender, Affiliate of a Lender, Approved Fund or Eligible Assignee, all of the Applicable Commitments and Revolving Letter of Credit Obligations of such Non-Consenting Lender for an amount equal to the principal balance of all Loans and other applicable Obligations held by the Non-Consenting Lender and all accrued interest and fees with respect thereto and other amounts due and payable hereunder through the date of sale, such purchase and sale to be consummated pursuant to an Assignment and Acceptance delivered to the Applicable Administrative Agent, and the Eligible Assignee shall pay any processing and recordation fee (which fee may be waived or reduced in the sole discretion of the Applicable Administrative Agent); provided, however, that the failure to execute and deliver such Assignment and Acceptance by the Non-Consenting Lender shall not invalidate such assignment, and such Assignment and Acceptance shall be deemed to be executed and delivered upon receipt by such Non-Consenting Lender of the proceeds of such sale and acceptance.

Section 11.2 Assignments and Participations

(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agents and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of clause (b) below, (ii) by way of participation in accordance with the provisions of clause (d) below or (iii) by way of pledge or assignment of a security interest subject to the restrictions of clause (f) below (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in clause (d) below and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agents, the Collateral Agent, the Arrangers, the Bookrunners, the Lenders, and the Issuers) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Commitment, Term Commitment, the Loans and the Applicable Reimbursement Obligations at the time owing to it); provided that any such assignment shall be subject to the following conditions:

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(i) Minimum Amounts.

(A) Revolving Facility. (1) In the case of an assignment of the entire remaining amount of the assigning Lender’s Revolving Commitment and the Applicable Reimbursement Obligations at the time owing to it or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and (2) in any case not described in clause (1) above, the aggregate amount of the Revolving Commitment (which for this purpose includes Revolving Letter of Credit Obligations outstanding thereunder) or, if the Revolving Commitment is not then in effect, the principal outstanding balance of the Applicable Reimbursement Obligations of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Revolving Administrative Agent or, if “Trade Date” is specified in the Assignment and Acceptance, as of the Trade Date) shall not be less than $5,000,000.00 unless the Revolving Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrowers otherwise consent (each such consent not to be unreasonably withheld or delayed).

(B) Term Loan Facility. (1) In the case of an assignment of the entire remaining amount of the assigning Lender’s Term Commitment and the Term Loans at the time owing to it, no minimum amount need be assigned; and (2) in any case not described in clause (1) above, the aggregate amount of the Term Commitment and the outstanding balance of the Term Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Term Loan Administrative Agent or, if “Trade Date” is specified in the Assignment and Acceptance, as of the Trade Date) shall not be less than $1,000,000.00 unless the Term Loan Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrowers otherwise consent (each such consent not to be unreasonably withheld or delayed).

(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of (A) with respect to the Revolving Facility, the assigning Revolving Lender’s rights and obligations under this Agreement with respect to the Revolving Facility, (B) with respect to the New Money Term Facility, the assigning Term Lender’s rights and obligations under this Agreement with respect to the New Money Term Loans and the Term Commitment on a proportionate basis, as applicable and (C) with respect to the Refinanced Term Facility, the assigning Term Lender’s rights and obligations under this Agreement with respect to the Refinanced Make-Whole Term Loans and the Refinanced Term Loans on a proportionate basis. For the avoidance of doubt, assignments in respect of the New Money Term Facility and the Refinanced Term Facility are not required to be in proportionate amounts as with respect to the other Facility.

(iii) Required Consents. No consent shall be required for any assignment except to the extent required by clauses (b)(i)(A)(2) and (b)(i)(B)(2) above and, in addition, (1) in the case of assignments of Revolving Commitments and Revolving

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Letter of Credit Obligations only: (A) the consent of the Borrowers (such consent not to be unreasonably withheld) shall be required unless (x) an Event of Default under Section 9.1(a), (b) or (f) has occurred and is continuing at the time of such assignment or (y) such assignment is to a Revolving Lender, an Affiliate of a Revolving Lender or an Approved Fund with regard to a Revolving Lender; provided that a Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Revolving Administrative Agent within five Business Days after having received notice thereof; (B) the consent of the Revolving Administrative Agent and each Issuer (such consents not to be unreasonably withheld or delayed) shall be required if such assignment is to a Person that is not a Revolving Lender, an Affiliate of such Revolving Lender or an Approved Fund with respect to such Revolving Lender; and (C) the consent of each Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding) and (2) in the case of assignments of Term Loans: (A) the consent of the Borrowers (such consent not to be unreasonably withheld) shall be required unless (x) an Event of Default under Section 9.1(a), (b) or (f) has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund with regard to a Lender, as applicable or (z) such assignment is an assignment by Barclays to any Term Lender (as defined in the Existing Super-Priority Credit Agreement) (or, without duplication, to any (i) assignee of any such Term Lender to the extent a trade confirmation has been entered into and delivered to Barclays as Term Loan Administrative Agent (as defined in the Existing Super-Priority Credit Agreement) but has not yet been recorded in the Term Register (as defined in the Existing Super-Priority Credit Agreement) as of January 17, 2020 or (ii) any subsequent assignee of any such assignee referred to in the foregoing clause (i) or in this clause (ii) to the extent a trade confirmation has been entered into and delivered to Barclays as Term Loan Administrative Agent (as defined in the Existing Super-Priority Credit Agreement) but has not yet been recorded in the Term Register (as defined in the Existing Super-Priority Credit Agreement) as of January 17, 2020 (it being understood for purposes of this clause (z) that Barclays will provide Borrowers a consolidated schedule of all such assignments); provided that a Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Term Loan Administrative Agent within five Business Days after having received notice thereof and (B) the consent of the Term Loan Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to a Person that is not a Term Lender, an Affiliate of such Term Lender or an Approved Fund with respect to such Term Lender.

(iv) Assignment and Acceptance. The parties to each assignment (A) under the Revolving Facility shall execute and deliver to the Revolving Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500.00, and the assignee, if it is not a Revolving Lender, shall deliver to the Revolving Administrative Agent an Administrative Questionnaire and (B) under the Term Facilities shall execute and deliver to the Term Loan Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500.00, and the assignee, if it is not a Term Lender, shall deliver to the Term Loan Administrative Agent an Administrative Questionnaire.

(v) [Reserved].

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(vi) No Assignment to Borrowers. No such assignment under the Revolving Facility shall be made to the Parent, the Borrowers or any of the Parent’s Affiliates or Subsidiaries.

(vii) No Assignment to Natural Persons. No such assignment shall be made to a natural person.

(viii) No Assignment to Defaulting Lenders. No such assignment shall be made to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons.

(ix) [Reserved].

(x) [Reserved].

(xi) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Revolving Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrowers and the Revolving Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Revolving Administrative Agent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Applicable Administrative Agent pursuant to clause (c) below, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.17, 11.4 and 11.5 with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with clause (d) below.

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(i) The Revolving Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrowers, shall maintain at its address referred to in Section 11.8 a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Revolving Lenders and Issuers, and the Revolving Commitments of, and principal amounts of (and stated interest on) the Applicable Reimbursement Obligations owing to, each Revolving Lender and Issuer, pursuant to the terms hereof from time to time (the “Revolving Register”). The entries in the Revolving Register shall be conclusive absent manifest error, and the Borrowers, the Revolving Administrative Agent, the Revolving Lenders and the Issuers shall treat each Person whose name is recorded in the Revolving Register pursuant to the terms hereof as a Revolving Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Revolving Administrative Agent shall maintain on the Revolving Register information regarding the designation, and revocation of designation, of any Revolving Lender as a Defaulting Lender. The Revolving Register shall be available for inspection by the Borrowers, the Issuers, and any Revolving Lender (solely with respect to its own commitments) at any reasonable time and from time to time upon reasonable prior notice.

(ii) The Term Loan Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrowers, shall maintain at its address referred to in Section 11.8 a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Term Lenders and the Term Commitments of, and principal amounts of (and stated interest on) the Term Loans of each Term Lender pursuant to the terms hereof from time to time (the “Term Register”). The entries in the Term Register shall be conclusive absent manifest error, and the Borrowers, the Term Loan Administrative Agent and Term Lenders, shall treat each Person whose name is recorded in the Term Register pursuant to the terms hereof as a Term Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. In addition, the Term Loan Administrative Agent shall maintain on the Term Register information regarding the designation, and revocation of designation, of any Term Lender as a Defaulting Lender. The Term Register shall be available for inspection by the Borrowers and any Term Lender (solely with respect to its own commitments), at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time after the Effective Date without the consent of, or notice to, the Borrowers or any Administrative Agent, sell participations to any Person (other than a natural person, a Defaulting Lender, the Parent, any Borrower, or any of the Parent’s other Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Term Commitment, Revolving Commitment, and/or the Loans and Applicable Reimbursement Obligations owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, each Administrative Agent, the Lenders, and the Issuers shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Each Lender that sells a participation shall, acting solely for

-163- this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Treasury Regulations Section 5f.103-1(c) and proposed Treasury Regulations Section 1.163-5(b) (or any amended or successor version). The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, no Administrative Agent (in its capacity as Administrative Agent) shall have any responsibility for maintaining a Participant Register.

Any agreement or instrument pursuant to which a Lender sells such a participation, other than to an LC Backstop Participant, shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver which would (x) reduce the amount, or postpone any date fixed for any amount (whether of principal, interest or fees) payable to such Participant under the Loan Documents, to which such Participant would otherwise be entitled under such participation, (y) increase the commitment applicable to such Participant or (z) result in the release of all or substantially all of the Collateral or the release of all or substantially all of the Guarantees. Subject to clause (e) below, each Borrower jointly and severally agrees that each Participant shall be entitled to the benefits of Section 2.17 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) above. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.6 as though it were a Lender, provided such Participant agrees to be subject to Section 11.7 as though it were a Lender. Notwithstanding the foregoing, the Agents shall be entitled to rely solely upon instructions, agreements, and directions provided by Lenders of record, and shall have no obligation or liability to any LC Backstop Participant for instructions, agreements or directions received by any Agent from such a Lender. Without limiting the foregoing, the Agents shall have no duty to inquire with respect to any such arrangements relating to LC Backstop Participants and are deemed to have no knowledge of any such arrangements for purposes of executing their Agent duties under the Loan Documents.

(e) Limitations upon Participant Rights. A Participant (other than an LC Backstop Participant) shall not be entitled to receive any greater payment under Sections 2.17(c), 2.18 and 2.19 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant unless the sale of the participation to such Participant is made with the Borrowers’ prior written consent, except to the extent such entitlement to receive a greater payment results from a change in applicable Requirement of Law that occurs after the Participant acquired the applicable participation. A Participant shall be entitled to the benefits of Section 2.19 as if it were a Lender which received its interest pursuant to an assignment pursuant to paragraph (b) of this Section 11.2(e), but only if each Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Sections 2.19, 2.20 and 2.21 as though it were a Lender.

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(f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or any central bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(g) In addition to the other assignment rights provided in this Section 11.2, at any time after the Effective Date, each Lender may (i) grant to a Special Purpose Vehicle the option to make all or any part of any Loan that such Lender would otherwise be required to make hereunder and the exercise of such option by any such Special Purpose Vehicle and the making of Loans pursuant thereto shall satisfy (once and to the extent that such Loans are made) the obligation of such Lender to make such Loans thereunder, provided, however, that nothing herein shall constitute a commitment or an offer to commit by such a Special Purpose Vehicle to make Loans hereunder and no such Special Purpose Vehicle shall be liable for any indemnity or other Obligation (other than the making of Loans for which such Special Purpose Vehicle shall have exercised an option, and then only in accordance with the relevant option agreement), and (ii) assign, as collateral or otherwise, any of its rights under this Agreement, whether now owned or hereafter acquired (including rights to payments of principal or interest on the Loans) to (y) any trustee for the benefit of the holders of such Lender’s Securities or any other holder of a Lender’s debt obligations or representative of such holder or (z) any Special Purpose Vehicle to which such Lender has granted an option pursuant to clause (i) above, in each case without notice to or consent of the Borrowers or any Administrative Agent; and provided, further, that no such assignment or grant shall release such Lender from any of its obligations hereunder except as expressly provided in clause (i) above, and the Loan Parties shall continue to deal directly with the Lender and the Lender shall retain the sole right to enforce the Loan Documents and to approve of any consents, amendments or other modifications thereto. Each Lender agrees that neither the grant to any Special Purpose Vehicle nor the exercise by any Special Purpose Vehicle shall increase the costs or expenses or otherwise change the obligations of the Loan Parties under this Agreement. The parties hereto acknowledge and agree that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any such Special Purpose Vehicle, it will not institute against, or join any other Person in instituting against, any Special Purpose Vehicle that has been granted an option pursuant to this clause (g) any bankruptcy, reorganization, insolvency or liquidation proceeding (such agreement shall survive the payment in full of the Obligations and the termination of this Agreement).

(h) Any Issuer may, with, unless an Event of Default under Section 9.1(a), (b) or (f) has occurred and is continuing, the prior written consent of the Borrowers (such consent not to be unreasonably withheld or delayed) at any time assign its rights and obligations hereunder to any other Revolving Lender (with respect to the Revolving Facility) that is not a Defaulting Lender by an instrument in form and substance satisfactory to the Borrowers, the Revolving Administrative Agent, such Issuer and such Lender. If any Issuer ceases to be a Lender hereunder by virtue of any assignment made pursuant to this Section 11.2(h), then, as of the effective date of such cessation, such Issuer’s obligations to Issue Letters of Credit pursuant to Section 2.4 shall terminate and such Issuer shall be an Issuer hereunder only with respect to outstanding Letters of Credit issued prior to such date.

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Section 11.3 Costs and Expenses

(a) The Parent and the Borrowers jointly and severally agree upon demand to pay, or reimburse each Administrative Agent and the Collateral Agent for all of such Agent’s reasonable external audit, valuation, filing, document duplication and reproduction and investigation expenses and all reasonable and documented out-of-pocket legal expenses (including the reasonable and documented fees, expenses and disbursements of the Collateral Agent’s counsel, Bracewell LLP, the Revolving Administrative Agent’s counsels, Bracewell LLP and Linklaters LLP, the Term Loan Administrative Agent’s counsel, Latham & Watkins, LLP, Davis Polk as counsel to certain of the Term Lenders, and local legal counsel in each relevant jurisdiction) and for all of such Agent’s other reasonable and documented out-of-pocket costs and expenses of every type and nature (including, without limitation, the reasonable and documented fees, expenses and disbursements of the Revolving Administrative Agent’s financial advisor, FTI, and other auditors, accountants, printers, insurance and environmental advisors, and consultants and agents, including any third party consultant engaged by any Administrative Agent or the Collateral Agent to evaluate the Parent and its Subsidiaries) reasonably incurred by any Agent (without duplication) in connection with any of the following: (i) any Administrative Agent’s audit and investigation of the Parent and its Subsidiaries in connection with the preparation, negotiation or execution of any Loan Document or an Administrative Agent’s periodic audits of the Parent or any of its Subsidiaries, as the case may be, (ii) the preparation, negotiation, execution or interpretation of this Agreement (including, without limitation, the satisfaction or attempted satisfaction of any condition set forth in Article III, any Loan Document or any proposal letter or engagement letter issued in connection therewith, or the making of the Loans hereunder), (iii) the creation, perfection or protection of the Liens under any Loan Document, (iv) the ongoing administration of this Agreement and the Loans and Letters of Credit, including consultation with attorneys in connection therewith and with respect to any Administrative Agent’s and the Collateral Agent’s rights and responsibilities hereunder and under the other Loan Documents, (v) the protection, collection or enforcement of any Obligation or the enforcement of any Loan Document, (vi) the commencement, defense or intervention in any court proceeding relating in any way to the Obligations, any Loan Party, any of the Parent’s Subsidiaries, this Agreement or any other Loan Document, (vii) the response to, and preparation for, any subpoena or request for document production with which any Agent is served or deposition or other proceeding in which any Agent is called to testify, in each case, relating in any way to the Obligations, any Loan Party, any of the Parent’s Subsidiaries, this Agreement or any other Loan Document, or (viii) any amendment, consent, waiver, assignment, restatement, or supplement to any Loan Document or the preparation, negotiation, and execution of the same; provided, however, that the Borrowers shall not have any obligation under clauses (vi) and (vii) hereunder in connection with any action brought by one Secured Party against another Secured Party (except in its capacity as an Agent, if applicable). The Borrowers also agree upon demand to pay all reasonable and documented out-of-pocket expenses incurred by an Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder.

(b) The Parent and the Borrowers further jointly and severally agree to pay or reimburse each Agent and each of the Lenders and Issuers upon demand for all reasonable and documented out-of-pocket costs and expenses, including, without limitation, reasonable and documented out-of-pocket attorneys’ fees (including allocated costs of settlement, but excluding in-house counsel), including the reasonable and documented fees, expenses and disbursements of

-166- the Collateral Agent and Revolving Administrative Agent’s counsels, Bracewell LLP and Linklaters LLP, the Term Loan Administrative Agent’s counsel, Latham & Watkins LLP, Davis Polk, as counsel to certain of the Term Lenders, and local legal counsel in each relevant jurisdiction, incurred by such Agent, such Lenders or Issuers in connection with any of the following: (i) in enforcing any Loan Document or any security therefor or exercising or enforcing any other right or remedy available by reason of an Event of Default, (ii) following the occurrence and during the existence of an Event of Default, in connection with any refinancing or restructuring of the credit arrangements provided hereunder in the nature of a “work-out” or in any insolvency or bankruptcy proceeding, including the Cases, (iii) in commencing, defending or intervening in any litigation or in filing a petition, complaint, answer, motion or other pleadings in any legal proceeding relating to the Obligations, any Loan Party, any of the Parent’s Subsidiaries and related to or arising out of the transactions contemplated hereby or by any other Loan Document, including the Cases or (iv) in taking any other action in or with respect to any suit or proceeding (bankruptcy or otherwise) described in clause (i), (ii) or (iii) above; provided, however, that the Borrower shall not have any obligation under clause (iii) hereunder in connection with any action brought by one Secured Party against another Secured Party (except in its capacity as an Agent, if applicable).

(c) Without prejudice to the survival of any other agreement of the Parent and the Borrowers hereunder, the agreements and obligations of the Parent and the Borrowers contained in this Section 11.3 shall survive the resignation and/or replacement of any Administrative Agent or Collateral Agent, any assignment of rights by, or the replacement of, a Lender or an Issuer, the termination of this Agreement, the Revolving Commitments, or the Term Commitments and the repayment, and the satisfaction or discharge of the Obligations.

Section 11.4 Indemnities

(a) The Parent and the Borrowers jointly and severally agree to and hereby do indemnify and hold harmless each Administrative Agent, the Collateral Agent, Arrangers, Bookrunners, Issuers, and Lender (together with their respective Affiliates (and controlling persons) and the respective officers, directors, employees, agents, members (and successors and assigns) of each of the foregoing, each such Person being an “Indemnitee”) from and against any and all claims, damages, liabilities, obligations, losses, penalties, actions, judgments, suits, costs, disbursements and expenses of any kind or nature (including reasonable, documented and customary fees, disbursements and expenses of financial and legal advisors to any such Indemnitee; provided that legal advisors shall be limited to the reasonable and documented fees, disbursements and expenses of (x) one firm of counsel for each Agent, one firm of counsel for the Term Lenders and one firm of counsel for the Issuers, (y) one firm of local counsel in each relevant jurisdiction, and (z) in the case of an actual or perceived conflict of interest where the person affected by such conflict retains its own counsel, of another firm of counsel for such affected person in each relevant jurisdiction) that may be imposed on, incurred by or asserted against any such Indemnitee in connection with or arising out of any investigation, litigation or proceeding, whether or not any such Indemnitee is a party thereto and regardless of whether such matter is initiated by a third party or by the Borrowers or any of its Affiliates, whether direct, indirect, or consequential and whether based on any federal, state or local law or other statutory regulation, securities or commercial law or regulation, or under common law or in equity, or on contract, tort or otherwise, in any manner relating to or arising out of this Agreement, any other Loan Document, any Obligation, any Letter of Credit, or any act, event or transaction related or attendant to any thereof, or the use or intended use of the proceeds of the Loans or Letters of Credit or in connection

-167- with any investigation of any potential matter covered hereby (collectively, the “Indemnified Matters”); provided, however, that the Borrowers shall not have any obligation under this Section 11.4 to an Indemnitee with respect to (i) any Indemnified Matter caused by or resulting from the gross negligence, bad faith or willful misconduct of such Indemnitee, as determined by a court of competent jurisdiction in a final non-appealable judgment or order or order of an arbitral tribunal, (ii) a material breach of the Loan Documents by such Indemnitee, as determined by a court of competent jurisdiction in a final non-appealable judgment or order or order of an arbitral tribunal and (iii) any action brought by one Indemnitee against another Indemnitee (except in its capacity as an Agent) which does not involve an act or omission by the Parent or any of its Affiliates or (iv) any settlement entered into by such Indemnitee without the Parent’s written consent (such consent not to be unreasonably withheld, conditioned or delayed); provided that the foregoing indemnity will apply to any such settlement in the event that the Parent was offered the ability to assume the defense of the action that was the subject matter of such settlement and elected not to so assume; provided, further, that if there is a final and non-appealable judgment by a court of competent jurisdiction, the Parent agrees to indemnify and hold harmless each Indemnitee from and against any and all losses, claims, damages, liabilities and expenses by reason of such settlement or judgment in accordance with the other provisions of this Section 11.4. Without limiting the foregoing, but subject to the express limitations of the foregoing, “Indemnified Matters” include (i) all Environmental Liabilities and Costs arising from or connected with the past, present or future operations of the Parent, the Borrowers, or any of their respective Subsidiaries involving any property subject to a Collateral Document, or damage to real or personal property or natural resources or harm or injury alleged to have resulted from any Release of Contaminants on, upon or into such property or any contiguous real estate, (ii) any costs or liabilities incurred in connection with any Remedial Action concerning the Parent, the Borrowers, or any of their respective Subsidiaries, (iii) any costs or liabilities incurred in connection with any Environmental Lien and (iv) any costs or liabilities incurred in connection with any other matter under any Environmental Law, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980, (49 U.S.C. § 9601 et seq.) and applicable state property transfer laws, whether, with respect to any such matter, such Indemnitee is a mortgagee pursuant to any leasehold mortgage, a mortgagee in possession, the successor in interest to the Parent or any of its Subsidiaries, or the owner, lessee or operator of any property of the Parent or any of its Subsidiaries by virtue of foreclosure, except, with respect to those matters referred to in clauses (i), (ii), (iii) and (iv) above, to the extent (x) incurred following foreclosure (or deed in lieu thereof) by any Administrative Agent, any Lender or any Issuer, or any Administrative Agent, the Collateral Agent, any Lender or any Issuer having become the successor in interest to the Parent, the Borrowers, or any of their respective Subsidiaries and (y) attributable solely to acts of such Administrative Agent, such Lender or such Issuer or any agent on behalf of such Administrative Agent, such Lender or such Issuer. This Section 11.4(a) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

(b) The Parent and each Borrower shall and does hereby jointly and severally indemnify each Agent, each Lender and each Issuer for, and hold each Agent, each Lender and each Issuer harmless from and against, any and all claims for brokerage commissions, fees and other compensation made against any Agent, any Lender and any Issuer for any broker, finder or consultant with respect to any agreement, arrangement or understanding made by or on behalf of any Loan Party or any of its Subsidiaries in connection with the transactions contemplated by this Agreement.

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(c) Promptly after receipt by an Indemnitee of service of any complaint or the commencement of any action or proceeding with respect to an Indemnified Matter, such Indemnitee will notify the Parent in writing of such complaint or of the commencement of such action or proceeding, but failure to so notify the Parent will relieve the Parent or the Borrowers from the obligation to indemnify such Indemnitee only if and only to the extent that such failure results in the forfeiture by the Parent or the Borrowers of substantial rights and defenses that actually and materially prejudice the Parent or the Borrowers, and will not in any event relieve the Parent or the Borrowers from any other obligation or liability that the Parent or the Borrowers may have to any Indemnitee otherwise than in accordance with the provisions hereof. If the Parent or any Borrower so elects following its acknowledgment of its obligation to indemnify the Indemnitee, or if requested by such Indemnitee, the Parent or such Borrower will assume the defense of such action or proceeding, including the employment of counsel reasonably satisfactory to such Indemnitee and the payment of the reasonable, documented, and customary fees and disbursements of such counsel. In the event, however, such Indemnitee reasonably determines in its judgment that having common counsel would present such counsel with a conflict of interest or if the defendants in or targets of any such action or proceeding include an Indemnitee and the Parent or the Borrowers and such Indemnitee reasonably concludes that there may be legal defenses available to it or other Indemnitees that are different from or in addition to those available to the Parent or the Borrowers, or if the Parent or the Borrowers fail to assume the defense of the action or proceeding or to employ counsel reasonably satisfactory to such Indemnitee in a timely manner, then such Indemnitee may employ separate counsel to represent or defend it in any such action or proceeding and the Parent and the Borrowers will pay the reasonable, documented, and customary fees and disbursements of such counsel; provided, however, that the Parent and the Borrowers will not be required to pay the fees and disbursements of more than one separate counsel (in addition to local counsel) for such Indemnitee in any jurisdiction in any single action or proceeding. In any action or proceeding the defense of which the Parent or the Borrowers assume, the Indemnitee will have the right to participate in such litigation and to retain its own counsel at such Indemnitee’s own expense.

(d) The Parent and the Borrowers jointly and severally agree that any indemnification or other protection provided to any Indemnitee pursuant to this Agreement (including pursuant to this Section 11.4) or any other Loan Document shall (i) survive the termination of this Agreement and the payment in full of the Obligations and (ii) inure to the benefit of any Person that was at any time an Indemnitee under this Agreement or any other Loan Document.

Section 11.5 Limitation of Liability

The Parent and the Borrowers jointly and severally agree that no Indemnitee shall have any liability (whether direct or indirect, in contract, tort or otherwise) to any Loan Party or any of their respective Subsidiaries or any of their respective equity holders or creditors for or in connection with the transactions contemplated hereby and in the other Loan Documents, except for direct damages (as opposed to special, indirect, consequential or punitive damages (including, without limitation, any loss of profits, business or anticipated savings)) determined in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnitee’s gross negligence, bad faith or willful misconduct. The Parent and each Borrower hereby waives, releases and agrees (for itself and on behalf of its Subsidiaries) not to sue upon any such claim for any special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or suspected to exist in its favor.

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Section 11.6 Right of Set-off

Upon the occurrence and during the continuance of any Event of Default, each Revolving Lender and each Affiliate of any of them is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender or any of their respective Affiliates to or for the credit or the account of the Parent or any Borrower against any and all of the Obligations now or hereafter existing whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and even though such Obligations may be unmatured. Each Lender agrees promptly to notify the Parent or such Borrower after any such set-off and application made by such Lender or its respective Affiliates; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. In the event that any Defaulting Lender shall exercise any right of setoff, (x) all amounts so set off shall be paid over immediately to the Revolving Administrative Agent for further application in accordance with the provisions of Section 2.23 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Revolving Administrative Agent and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Revolving Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender under this Section 11.6 are in addition to the other rights and remedies (including other rights of set-off) that such Lender may have.

Section 11.7 Sharing of Payments, Etc.

Subject to Section 2.16(f):

(a) if any Term Lender obtains any payment (whether voluntary, involuntary, through the exercise of any right of set-off or otherwise) of the Term Loans owing to it, any interest thereon, fees in respect thereof or other Obligations in respect of the Term Loans hereunder (other than payments pursuant to Section 2.17, 2.18 or 2.19) in excess of its Ratable Portion of all payments of such Obligations obtained by all the Term Lenders, such Term Lender (each, a “Purchasing Term Lender”) shall forthwith purchase from the other Term Lenders (each, a “Selling Term Lender”) such participations in their Term Loans as shall be necessary to cause such Purchasing Term Lender to share the excess payment ratably with each of them.

(i) If any Revolving Lender obtains any payment (whether voluntary, involuntary, through the exercise of any right of set-off or otherwise) of the Revolving Letter of Credit Obligations owing to it, any interest thereon, fees in respect thereof or other Revolving Letter of Credit Obligations hereunder (other than payments pursuant to Section 2.17, 2.18 or 2.19) in excess of its Ratable Portion of all payments of such Obligations obtained by all the Revolving Lenders, except as a result of a refinancing of such Obligations, such Revolving Lender (each, a “Purchasing Revolving Lender” and, together with the Purchasing Term Lenders, the “Purchasing Lenders”) shall forthwith purchase from the other Revolving Lenders (each, a “Selling Revolving Lender” and, together with the Selling Term Lenders, the “Selling Lenders”) such participations in the Revolving Letter of Credit Obligations as shall be necessary to cause such Purchasing Revolving Lender to share the excess payment ratably with each of them.

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(ii) Except as expressly provided otherwise with respect to Defaulting Lenders, each payment of the Revolving Commitment Fees and each reduction of the Revolving Commitments shall be allocated pro rata among the Revolving Lenders in accordance with their respective Revolving Commitments (or, if the Revolving Commitments shall have expired or been terminated, in accordance with their respective Revolving Exposure).

(A) Except as expressly provided otherwise with respect to Defaulting Lenders, each Borrowing, each payment or prepayment of principal of any Borrowing, each payment of interest on the Term Loans, each reduction of the Term Commitments and each conversion of any Borrowing to or continuation of any Borrowing shall be allocated pro rata among the Term Lenders in accordance with their respective Term Exposure. Each Term Lender agrees that in computing such Term Lender’s portion of any Term Borrowing to be made hereunder, the Term Loan Administrative Agent may, in its discretion, round each Term Lender’s percentage of such Borrowing to the next higher or lower whole dollar amount.

(B) [Reserved].

(b) If all or any portion of any payment received by a Purchasing Lender is thereafter recovered from such Purchasing Lender, such purchase from each applicable Selling Lender shall be rescinded and such Selling Lender shall repay to the Purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Selling Lender’s ratable share (according to the proportion of (i) the amount of such Selling Lender’s required repayment in relation to (ii) the total amount so recovered from the Purchasing Lender) of any interest or other amount paid or payable by the Purchasing Lender in respect of the total amount so recovered.

(c) Each Borrower jointly and severally agrees that any Purchasing Lender so purchasing a participation from a Selling Lender pursuant to this Section 11.7 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Purchasing Lender were the direct creditor of such Borrower in the amount of such participation.

Section 11.8 Notices, Etc.

All notices, demands, requests and other communications provided for in this Agreement shall be given in writing, or, if consented to by the Applicable Administrative Agent, by any telecommunication device capable of creating a written record (including electronic mail), and addressed to the party to be notified as follows:

(a) if to the Parent or the Borrowers:

McDermott International, Inc. 757 North Eldridge Parkway Houston, Texas 77079 Attention: Treasurer

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with a copy to:

McDermott International, Inc. 757 North Eldridge Parkway Houston, Texas 77079 Attention: General Counsel

and (which shall not constitute notice)

Kirkland & Ellis LLP 609 Main Street Houston, TX 77002 Attention: Lucas E. Spivey E-Mail Address: [email protected]

(b) if to any Lender, at its Domestic Lending Office;

(c) if to any Issuer, (i) at its Domestic Lending Office, if such Issuer is a Lender or (ii) otherwise, at the Domestic Lending Office of any Lender Affiliated therewith or, in each case at any other address set forth in a notice sent to each Administrative Agent and the Borrowers;

(d) if to the Revolving Administrative Agent:

Crédit Agricole Corporate and Investment Bank 1301 Avenue of the Americas New York, NY 10019 Attention: Shonda Fisher Telecopy No.: (917) 849-5463 or (917) 849-5456;

with a copy (which shall not constitute notice) to:

Bracewell LLP 1251 Avenue of the Americas, 49th Floor New York, New York 10020 Attention: Jeris D. Brunette E-Mail Address: [email protected]

and (which shall not constitute notice):

Linklaters LLP 1345 Avenue of the Americas New York, NY 10105 Attention: Penelope Jensen E-Mail Address: [email protected]

and

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(e) if to the Term Loan Administrative Agent:

Notices (other than for delivery of any Notice of Borrowing or Notice of Conversion or Continuation):

Barclays Bank PLC Bank Debt Management Group 745 Seventh Avenue New York, NY 10019 Attn: Robert Walsh Tel: (212) 526-6047 Email: [email protected]

with a copy (which shall not constitute notice) to:

Latham & Watkins LLP 885 Third Avenue New York, NY 10022 Attention: Melissa Alwang Email: [email protected]

For payments and for delivery of any Notice of Borrowing or Notice of Conversion or Continuation:

Barclays Bank PLC Loan Operations 400 Jefferson Park, 3rd Floor, Whippany, NJ 07981 Attn: Agency Services – McDermott International; Contact Name – Kevin Leamy Tel: (302) 286-1984 Email: [email protected] and to [email protected] or at such other address as shall be notified in writing (x) in the case of the Borrowers and any Administrative Agent, to the other parties and (y) in the case of all other parties, to the Borrowers and each Administrative Agent. All such notices and communications shall be effective upon personal delivery (if delivered by hand, including any overnight courier service), when deposited in the mails (if sent by mail), or when properly transmitted (if sent by a telecommunications device or through the Internet); provided, however, that notices and communications to an Administrative Agent pursuant to Article II or X shall not be effective until received by such Administrative Agent (unless otherwise expressly provided hereunder).

Each Public-Side Lender agrees to cause at least one individual at or on behalf of such Public-Side Lender to at all times have selected the “Private-Side Information” or similar designation on the content declaration screen of IntraLinks, Debtdomain, SyndTrak or Donnelley Financial Solutions Venue in order to enable such Public-Side Lender or its delegate, in accordance with such Public-Side Lender’s compliance procedures and applicable law, including United States federal and state

-173- securities laws, to make reference to information that is not made available through the “Public-Side Information” portion of IntraLinks and that may contain MNPI. In the event that any Public-Side Lender has determined for itself to not access any information disclosed through IntraLinks, Debtdomain, SyndTrak, Donnelley Financial Solutions Venue or otherwise, such Public-Side Lender acknowledges that (x) other Lenders may have availed themselves of such information and (y) neither any Loan Party nor any Agent has any responsibility for such Public-Side Lender’s decision to limit the scope of the information it has obtained in connection with this Agreement and the other Loan Documents. Notwithstanding anything in any Loan Document or any other agreement to the contrary (other than the parentheticals in Section 6.1(h)(i) and (ii), which shall continue to apply notwithstanding this sentence), any information provided by the Parent, any of its subsidiaries or their advisors to FTI may be freely shared by FTI with the Revolving Administrative Agent and the other Revolving Lenders in accordance with the provisions set forth herein relating to information that the Parent has identified as containing MNPI.

Section 11.9 No Waiver; Remedies

No failure on the part of any Lender, any Issuer, any Collateral Agent or any Administrative Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Applicable Administrative Agent and the Collateral Agent in accordance with Section 9.2 for the benefit of all the Secured Parties; provided, however, that the foregoing shall not prohibit (a) any Administrative Agent or the Collateral Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent or Collateral Agent) hereunder and under the other Loan Documents, (b) the Issuers from exercising the rights and remedies that inure to their respective benefit (solely in their capacity as Issuers) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.6 (subject to the terms of Section 11.7), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Revolving Administrative Agent, Term Loan Administrative Agent or Collateral Agent hereunder, as the case may be, and under the other Loan Documents, then (i) the Applicable Requisite Lenders under the applicable Facility and Requisite Lenders, respectively, shall have the rights otherwise ascribed to the Applicable Administrative Agent or Collateral Agent, respectively, pursuant to Section 9.2 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) above and subject to Section 11.7, any Lender may, with the consent of the Requisite Lenders, enforce any rights and remedies available to it and as authorized by the Requisite Lenders.

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Section 11.10 Binding Effect

This Agreement shall become effective when it shall have been executed by each of the parties hereto and when each Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto.

Section 11.11 Governing Law

This Agreement and the rights and obligations of the parties hereto (including the submission to jurisdiction in Section 11.12) shall be governed by, and construed and interpreted in accordance with, the law of the State of New York and, to the extent applicable, the Bankruptcy Code, without regard to its conflicts of laws provisions.

Section 11.12 Submission to Jurisdiction; Service of Process

(a) Any legal action or proceeding with respect to this Agreement or any other Loan Document shall be brought in the Bankruptcy Court, or to the extent that the Bankruptcy Court does not have (or abstains from exercising) jurisdiction, in the courts of the State of New York sitting in New York County or of the United States of America for the Southern District of New York, and, by execution and delivery of this Agreement, each Loan Party hereby accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts, except that each of the Agents, Issuers or Lenders may bring legal action or proceedings in other appropriate jurisdictions with respect to the enforcement of its rights with respect to the Collateral. The parties hereto hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to the bringing of any such action or proceeding in such respective jurisdictions.

(b) The Parent and each Borrower irrevocably consents to the service of any and all process in any such action or proceeding by the mailing (by registered or certified mail, postage prepaid) of copies of such process to J. Ray McDermott Holdings, LLC (at 757 North Eldridge Parkway, Houston, Texas 77079) or the Parent at its address specified in Section 11.8. The Parent and each Borrower agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(c) Nothing contained in this Section 11.12 shall affect the right of any Administrative Agent or any Lender to serve process in any other manner permitted by law or commence legal proceedings or otherwise proceed against the Borrowers or any other Loan Party in any other jurisdiction.

(d) To the extent that either the Parent or a Borrower has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether from service or notice, attachment prior to judgment, attachment in aid of execution of a judgment, execution or otherwise), such Person hereby irrevocably waives such immunity in respect of its obligations hereunder.

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Section 11.13 Waiver of Jury Trial

EACh AGEnT AnD EACh OF ThE LEnDERS, ThE ISSUERS, ThE PAREnT AnD EACh BORROwER wAIVES TRIAL By jURy In Any ACTIOn OR PROCEEDInG wITh RESPECT TO ThIS AGREEMEnT OR Any OThER LOAn DOCUMEnT.

Section 11.14 Marshaling; Payments Set Aside

None of the Administrative Agents, the Collateral Agent, any Lender or any Issuer shall be under any obligation to marshal any assets in favor of the Borrowers or any other party or against or in payment of any or all of the Obligations. To the extent that any Borrower makes a payment or payments to any Administrative Agent, the Collateral Agent, the Lenders or the Issuers or any such Person receives payment from the proceeds of the Collateral or exercises its rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, right and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

Section 11.15 Section Titles

The section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto, except when used to reference such section. If a numbered reference to a clause, sub-clause or subsection hereof is immediately followed by a reference in parenthesis to the title of a section hereof containing such clause, sub-clause or subsection, the reference is only to such clause, sub-clause or subsection and not to the section generally. If a numbered reference to a section hereof is immediately followed by a reference in parenthesis to a section hereof, the title reference shall govern in case of direct conflict.

Section 11.16 Execution in Counterparts

This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are attached to the same document. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart hereof.

Section 11.17 Entire Agreement

This Agreement, together with all of the other Loan Documents and all certificates and documents delivered hereunder or thereunder, embodies the entire agreement of the parties and supersedes all prior agreements and understandings relating to the subject matter hereof. Delivery of an executed signature page of this Agreement by facsimile transmission or other electronic imaging means shall be as effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all parties shall be lodged with the Borrowers and each Administrative Agent.

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Section 11.18 Confidentiality

Each Administrative Agent, each Lender and each Issuer agrees to maintain the confidentiality of the Information, except that Information may be disclosed (i) to its Affiliates and to its and its Affiliates’ respective Related Parties, to any insurance broker, and to any provider of credit protection (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement (provided that information delivered pursuant to Section 6.1(h) to FTI may not be disclosed to any Participant or any prospective assignee or Participant in reliance on this clause (A)), (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrowers and its obligations or (C) any Special Purpose Vehicle that is a grantee of any option described in Section 11.2(g) or to any pledgee referred to in Section 11.2(f) or (g) (other than a pledgee to which disclosure is permitted under clause (ii) above), (vii) with the consent of the Borrowers or (viii) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section 11.18 or (y) becomes available to any Administrative Agent, any Lender, any Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than the Parent and its Subsidiaries. Any Person required to maintain the confidentiality of Information as provided in this Section 11.18 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Each Administrative Agent, each Lender and each Issuer acknowledges that (a) the Information may include MNPI concerning the Parent or its Subsidiaries, as the case may be and (b) it has developed compliance procedures regarding the use of such MNPI. Notwithstanding the foregoing, each Administrative Agent, the Arrangers and each Lender may disclose the existence of the Facilities and information about the Facilities to market data collectors, similar services providers to the lending industry, and service providers to each of the foregoing in connection with the Facilities and the other Loan Documents.

Section 11.19 Judgment Currency

(a) If, for the purposes of obtaining or enforcing any judgment or award in any court, or for making or filing a claim or proof, it is necessary to convert a sum due hereunder in any currency (the “Original Currency”) into another currency (the “Other Currency”), the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be that at which, in accordance with normal banking procedures, the Administrative Agents could purchase the Original Currency with such Other Currency in New York, New York on the Business Day immediately preceding the day on which any such judgment, or any relevant part thereof, is given.

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(b) The obligations of the Parent or any Borrower in respect of any sum due from it to any Agent or Lender hereunder shall, notwithstanding any judgment or award in such Other Currency, be discharged only to the extent that on the Business Day following receipt by such Agent or Lender of any sum adjudged to be so due in such Other Currency such Agent or Lender may in accordance with normal banking procedures purchase the Original Currency with such Other Currency; if the Original Currency so purchased is less than the sum originally due such Agent or Lender in the Original Currency, the Borrowers jointly and severally agree, as a separate obligation and notwithstanding any such judgment, to indemnify such Agent or Lender against such loss, and if the Original Currency so purchased exceeds the sum originally due to such Agent or Lender in the Original Currency, such Agent or Lender shall remit such excess to the Borrowers.

Section 11.20 Severability

If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 11.20, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by each Administrative Agent, or any Issuer, then such provisions shall be deemed to be in effect only to the extent not so limited.

Section 11.21 Acknowledgement and Consent to Bail-In of EEA Financial Institutions

Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by (a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and (b) the effects of any Bail-In Action on any such liability, including, if applicable, (i) a reduction in full or in part or cancellation of any such liability; (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or (iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

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Section 11.22 Interest Rate Limitation

Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If any Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, to cash collateralize the Applicable Reimbursement Obligations, in either case in respect of the Facility for which such interest was paid, or if no such Applicable Reimbursement Obligations are outstanding, refunded to the Borrowers. In determining whether the interest contracted for, charged, or received by an Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, in its sole discretion, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

Section 11.23 Obligations Joint and Several and Unconditional

The obligations of each Borrower under this Agreement and each other Loan Document are joint and several and absolute and unconditional irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of any other Borrower under this Agreement or any other Loan Document (collectively, the “Other Borrower Obligations”), or any substitution, release or exchange of any other guarantee of or security for any of the Other Borrower Obligations, and, to the fullest extent permitted by applicable Requirement of Law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor (other than a defense of payment or performance hereunder or thereunder), it being the intent of this Section 11.23 and this Agreement that the obligations of each Borrower under this Agreement shall be absolute and unconditional under any and all circumstances (other than to the extent already paid or performed hereunder or thereunder). Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not affect the liability of any Borrower under this Agreement or any other agreement referred to herein:

(a) at any time or from time to time, without notice to any Borrower, the time for any performance of or compliance with any of the Other Borrower Obligations shall be extended, or such performance or compliance shall be waived;

(b) any of the acts mentioned in any of the provisions of this Agreement or any other agreement or instrument referred to herein or therein shall be done or omitted;

(c) the maturity of any of the Other Borrower Obligations shall be accelerated, or any of the Other Borrower Obligations shall be modified, supplemented or amended in any respect, or any right under this Agreement or any other Loan Document shall be waived or any other guarantee of any of the Other Borrower Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or

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(d) any lien or security interest granted to, or in favor of, any Administrative Agent, any Issuer or any Lender or Lenders as security for any of the Other Borrower Obligations shall fail to be perfected.

Section 11.24 DIP Orders

In the case of any conflict or inconsistency between the terms of this Agreement and the DIP Orders, the terms of the DIP Orders shall govern and control.

ARTICLE XII

GUARANTY

Section 12.1 The Guaranty

The Parent hereby guarantees to each Secured Party as hereinafter provided, as primary obligor and not as surety, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof. The Parent hereby further agrees that if any of the Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the Parent will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms thereof.

Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents or the other documentation governing the Obligations (such other documentation, the “Other Documents”), the obligations of the Parent under this Agreement and the other Loan Documents shall be limited to an aggregate amount equal to the largest amount that would not render such obligations subject to avoidance under Debtor Relief Laws or any comparable provisions of any applicable state law.

Section 12.2 Obligations Unconditional

The obligations of the Parent under Section 12.1 are absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Loan Documents, the Other Documents or any other agreement or instrument referred to therein, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor (other than defense of payment or satisfaction), it being the intent of this Section 12.2 that the obligations of the Parent hereunder shall be absolute and unconditional under any and all circumstances. The Parent agrees that it shall have no right of subrogation, indemnity, reimbursement or contribution against either the Borrowers or any other Loan Party for amounts paid under this Section 12.2 until the Final Satisfaction Date. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by law, the occurrence

-180- of any one or more of the following shall not alter or impair the liability of the Parent hereunder, which shall remain absolute and unconditional as described above:

(a) at any time or from time to time, without notice to the Parent, the time for any performance of or compliance with any of the Obligations shall be extended, or such performance or compliance shall be waived;

(b) [reserved];

(c) the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended in any respect, or any right under any of the Loan Documents, the Other Documents or any other agreement or instrument referred to therein shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with;

(d) any Lien granted to, or in favor of, any Secured Party as security for any of the Obligations shall fail to attach or be perfected; or

(e) any of the Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of the Parent) or shall be subordinated to the claims of any Person (including, without limitation, any creditor of the Parent).

With respect to its obligations hereunder, the Parent hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that any Secured Party exhaust any right, power or remedy or proceed against any Person under any of the Loan Documents, the Other Documents or any other agreement or instrument referred to therein or against any other Person under any other guarantee of, or security for, any of the Obligations.

Section 12.3 Reinstatement

The obligations of the Parent under this Article XII shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and the Parent agrees that it will indemnify in accordance with Section 11.4 each Indemnitee on demand for all documented and reasonable costs and expenses (including, without limitation, the documented and reasonable fees, charges and disbursements of counsel) incurred by such Indemnitee in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

Section 12.4 Certain Additional Waivers

The Parent further agrees that it shall have no right of recourse to security for the Obligations until the Final Satisfaction Date.

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Section 12.5 Remedies

The Parent agrees that, to the fullest extent permitted by law, as between the Parent, on the one hand, and the Secured Parties, on the other hand, the commitments hereunder may be terminated and the Obligations may be declared to be forthwith due and payable as provided in Section 9.2 (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section 9.2) for purposes of this Article XII notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the commitments hereunder from being terminated and the Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or such commitments being deemed to have been terminated and the Obligations being deemed to have become automatically due and payable), the Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Parent for purposes of Section 12.1. The Parent acknowledges and agrees that its obligations hereunder are secured in accordance with the terms hereof and of the Other Documents and that the Secured Parties may exercise their remedies thereunder in accordance with the terms thereof.

Section 12.6 Guarantee of Payment; Continuing Guarantee

The guarantee in this Article XII is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to all Obligations whenever arising.

ARTICLE XIII

CERTAIN COLLATERAL AGENCY PROVISIONS

Section 13.1 Application of Proceeds of Collateral

If, pursuant to the exercise by the Collateral Agent of any rights and remedies set forth in any Loan Document and in accordance with the terms of the Collateral Agency Agreement, any Collateral is sold or otherwise realized upon by the Collateral Agent, the proceeds received by the Collateral Agent in respect of such Collateral (other than funds and Securities deposited in, or credited to, the LC Facilities Cash Collateral Account and the Cash Secured LC Cash Collateral Account) shall be deposited in the Collateral Account, and all such moneys held by the Collateral Agent in the Collateral Account (and all such moneys and Securities held by the Collateral Agent in the LC Facilities Cash Collateral Account and the Cash Secured LC Cash Collateral Account), shall, to the extent available for distribution, and subject to Sections 13.2 and 13.3 below, be distributed by the Collateral Agent on each date upon which a distribution is made in accordance with Section 13.4 (each, a “Collateral Proceeds Distribution Date”) as follows:

FIRST, to pay Obligations in respect of any expense reimbursements or indemnities then due to the Collateral Agent pursuant to any Loan Document, including the reimbursement to any Secured Party of any amounts theretofore advanced by such Secured Party for the payment of such fees, costs and expenses;

SECOND, to pay Obligations in respect of any fees then due to the Collateral Agent pursuant to any Loan Document; and

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THIRD, to the Administrative Agents to be applied in accordance with Section 2.16.

Section 13.2 Application of Withheld Amounts

If on any Collateral Proceeds Distribution Date any amounts on deposit to the Collateral Account (or, in the case of amounts and Securities on deposit, or credited to, the LC Facilities Cash Collateral Account or the Cash Secured LC Cash Collateral Account) are distributable to the Administrative Agents, and if either Administrative Agent (who, without limiting the right of the Administrative Agents to otherwise provide such notice, shall act at the direction of the Requisite Lenders) shall have given notice to the Collateral Agent on or prior to such Collateral Proceeds Distribution Date that all or a portion of such proceeds which are otherwise distributable to the Administrative Agents shall be held by the Collateral Agent on behalf of the Administrative Agents for the benefit of the Secured Parties, then the Collateral Agent shall hold such amount in a separate cash collateral account of the Collateral Agent for the benefit of the Administrative Agents and Secured Parties, until such time as either Administrative Agent shall deliver a written request for the delivery thereof from such account to such Administrative Agent. If after the deposit of any proceeds into a separate cash account pursuant to the foregoing sentence, upon notice by such Administrative Agent, the Obligations shall have been repaid in full in cash in accordance with the Loan Documents, then (a) upon the written request of an Authorized Officer of the Parent certifying as to such payment in full in cash in accordance with the Loan Documents, and (b) after delivery of a copy of such request by the Collateral Agent to the Administrative Agents, together with notice that any objection must be made within five Business Days, if the Collateral Agent shall not have received a written notice of objection from either Administrative Agent within five Business Days after such Administrative Agent’s receipt of such copy, promptly following such five Business Days (or the earlier receipt by the Collateral Agent of the written consent of either Administrative Agent), any amounts held on account for the Administrative Agents pursuant to this Section 13.2 shall be again deposited by the Collateral Agent in the Collateral Account and thereafter distributed as provided in Section 13.1. If the Borrowers shall have failed to deliver to the Collateral Agent the request provided for in clause (a) of the immediately preceding sentence, the Collateral Agent shall take instructions from one or more of the Administrative Agents (who, without limiting the ability of the Administrative Agents to otherwise provide such instructions, shall act at the direction of the Requisite Lenders), and the Collateral Agent shall not be required to make any distributions until such instructions are received. The Collateral Agent shall invest amounts on deposit to any such account in accordance with the provisions of the Collateral Agency Agreement.

Section 13.3 Release of Amounts in Collateral Account

Amounts distributable to one or more of the Administrative Agents on any Collateral Proceeds Distribution Date shall be paid to either Administrative Agent for the benefit of the Administrative Agents and the Secured Parties by the Collateral Agent (or deposited to a cash collateral account for the benefit of the Administrative Agents and the Secured Parties pursuant to Section 13.2) upon receipt by the Collateral Agent of a written certificate of either Administrative Agent setting forth appropriate payment instructions for such Administrative Agent. If no such certificate is delivered by either Administrative Agent within five Business Days, the Collateral Agent shall deposit amounts otherwise distributable to either Administrative Agent to a cash collateral account for the benefit of the Administrative Agents and the Secured Parties pursuant to Section 13.2.

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Section 13.4 Collateral Proceeds Distribution Date

Upon the occurrence and during the continuance of an Event of Default, any amounts on deposit in the Collateral Account shall, on the date directed by one or more of the Administrative Agents (who, without limiting the ability of the Administrative Agents to otherwise provide such direction, shall act at the direction of the Requisite Lenders), be distributed as provided in this Article XIII.

[Remainder of this page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

MCDERMOTT TECHNOLOGY (AMERICAS), INC., as Borrower

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

MCDERMOTT TECHNOLOGY (US), INC., as Borrower

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

MCDERMOTT TECHNOLOGY, B.V., as Borrower

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Attorney

MCDERMOTT INTERNATIONAL, INC., as Parent

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Vice President, Treasurer

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

ADMINISTRATIVE AGENT OF THE REVOLVING CREDIT FACILITY:

CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Revolving Administrative Agent, Issuer, and Revolving Lender

By: /s/ Yurly A. Tsyganov Name: Yurly A. Tsyganov Title: Director

By: /s/ Ronald E. Spitzer Name: Ronald E. Spitzer Title: Managing Director

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

ACKNOWLEDGED AND AGREED WITH RESPECT TO ITS OBLIGATIONS UNDER ARTICLE XIII: CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Collateral Agent for the Facilities

By: /s/ Yurly A. Tsyganov Name: Yurly A. Tsyganov Title: Director

By: /s/ Ronald E. Spitzer Name: Ronald E. Spitzer Title: Managing Director

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

ADMINISTRATIVE AGENT:

BARCLAYS BANK PLC, as Term Loan Administrative Agent

By: /s/ Gary Sultan Name: Gary Sultan Title: Managing Director

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

LENDER:

BARCLAYS BANK PLC, as Term Lender

By: /s/ Gary Sultan Name: Gary Sultan Title: Managing Director

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

BARCLAYS BANK PLC, as Revolving Lender

By: /s/ Robert Silverman Name: Robert Silverman Title: Authorized Signatory

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

BARCLAYS BANK PLC, as Issuer

By: /s/ Robert Silverman Name: Robert Silverman Title: Authorized Signatory

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

ABN AMRO Capital USA LLC, as an Issuer and Revolving Lender

By: /s/ Hugo Diogo Name: Hugo Diogo Title:

By: /s/ Francis Ballard, Jr. Name: Francis Ballard, Jr. Title: Director

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

ROYAL BANK OF CANADA, as an Issuer and Revolving Lender

By: /s/ Leslie P. Vowell Name: Leslie P. Vowell Title: Authorized Signatory

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

ARAB BANKING CORPORATION (B.S.C.), as an Issuer

By: /s/ Diane Pockaj Name: Diane Pockaj Title: Head of Corporates, New York Branch

By: /s/ David Giacalone Name: David Giacalone Title: Chief Risk Officer, New York Branch

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

ARAB BANKING CORPORATION (B.S.C.), as a Revolving Lender

By: /s/ Diane Pockaj Name: Diane Pockaj Title: Head of Corporates, New York Branch

By: /s/ David Giacalone Name: David Giacalone Title: Chief Risk Officer, New York Branch

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

BANC OF AMERICA CREDIT PRODUCTS, INC., as a Revolving Lender

By: /s/ Gerry Nader Name: Gerry Nader Title: Vice President

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

EVEREST INSURANCE (IRELAND), DAC, as a Revolving Lender

By: /s/ Mark Kealy Name: Mark Kealy Title: Chief Underwriting Officer

By: /s/ Graham Pitt Name: Graham Pitt Title: Head of International Surety

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

MARKEL INTERNATIONAL INSURANCE COMPANY LIMITED, as a Revolving Lender

By: /s/ Jonathan Finch Name: Jonathan Finch Title: Senior Underwriter Surety

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

GOLDMAN SACHS BANK USA, as a Revolving Lender

By: /s/ Keith C. Braun Name: Keith C. Braun Title: Managing Director

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

NIBC BANK N.V., as a Revolving Lender

By: /s/ Erwin Keller Name: Erwin Keller Title: Associate Director

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

WELLS FARGO BANK, N.A., as a Revolving Lender

By: /s/ Christine Gardiner Name: Christine Gardiner Title: Directo

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

[Roll-Up Term Lender Signature Pages on File with the Term Loan Administrative Agent]

SIGNATURE PAGE TO SUPERPRIORITY SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

EXHIBIT A

TO CREDIT AGREEMENT

FORM OF ASSIGNMENT AND ACCEPTANCE

This Assignment and Acceptance (this “Assignment and Acceptance”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below, receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto (the “Standard Terms and Conditions”) are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Acceptance as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Applicable Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the Credit Agreement (including without limitation any letters of credit and guarantees included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the “Assigned Interest”). Each such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Acceptance, without representation or warranty by the Assignor.

A-1 #6072630.24

Assignor:

Assignee: [and is a Lender/an Affiliate/Approved Fund of [identify Lender]1]

Borrowers: McDermott Technology (Americas), Inc., McDermott Technology (US), Inc., and McDermott Technology, B.V.

Applicable Administrative Agent: [Crédit Agricole Corporate and Investment Bank/Barclays Bank PLC], as the [Revolving/Term Loan] Administrative Agent under the Credit Agreement

Credit Agreement: the Superpriority Senior Secured Debtor-In-Possession Credit Agreement dated as of January [__], 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among the Borrowers, McDermott International, Inc., a Panamanian corporation (the “Parent”), the Lenders, the Issuers, Crédit Agricole Corporate and Investment Bank, as administrative agent for the Revolving Facility (in such capacity, and together with its successors pursuant to Section 10.6 of the Credit Agreement, the “ Revolving Administrative Agent”), and Barclays Bank PLC, as administrative agent for the Term Facility (in such capacity, and together with its successors pursuant to Section 10.6 of the Credit Agreement, the “ Term Loan Administrative Agent” and together with the Revolving Administrative Agent, each an “Administrative Agent”).

Assigned Interest:

Aggregate Amount of Applicable Commitments/Obligations in respect of such Amount of Applicable Commitments/ Percentage Assigned of Applicable Applicable Commitments for all Applicable Obligations in respect of such Applicable Commitments/ Obligations in respect of such Lenders2 Commitments Assigned Applicable Commitments 3 $ $ % $ $ %

Trade Date: 4

Effective Date: ______, 20___5

1 If applicable. 2 Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date. 3 Set forth, to at least 9 decimals, as a percentage of the Applicable Commitments and Applicable Loans of all Applicable Lenders, as applicable, thereunder. 4 To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date. 5 To be inserted by Applicable Administrative Agent following receipt of a processing and recordation fee of $3,500 and an administrative questionnaire (if required), and which shall be the Effective Date of recordation of transfer in the register therefor.

A-2

The terms set forth in this Assignment and Acceptance are hereby agreed to:

ASSIGNOR [NAME OF ASSIGNOR]

By: Title:

ASSIGNEE [NAME OF ASSIGNEE]

By: Title:

[Consented to: [CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK/BARCLAYS BANK PLC], as [Revolving/Term Loan] Administrative Agent

By: Title:]6

6 To be added only if the consent of the Applicable Administrative Agent is required by the terms of the Credit Agreement.

A-3

[Consented to: MCDERMOTT TECHNOLOGY (AMERICAS), INC.

By: Title:

MCDERMOTT TECHNOLOGY (US), INC.

By: Title:

MCDERMOTT TECHNOLOGY, B.V.

By: Title:]7

[NAME OF APPLICABLE ISSUER

By: Title:]8

7 To be added only if the consent of the Borrowers is required by the terms of the Credit Agreement. 8 To be added only if the consent of the Applicable Issuers is required by the terms of the Credit Agreement. Duplicate Issuer signature blocks as needed.

A-4

Annex 1 to Assignment and Acceptance

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ACCEPTANCE

Representations and Warranties.

Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrowers, the Parent, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrowers, the Parent, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a Lender or Issuer (as applicable) under the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender or Issuer (as applicable) thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender or Issuer (as applicable) thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.1 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on any Administrative Agent or any other Lender, Issuer or any of their Related Parties, (v) attached to this Assignment and Acceptance is the documentation referred to in Section 2.19(e) of the Credit Agreement and any other documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee, (vi) it is not a Borrower, the Parent, nor is it an Affiliate or Subsidiary of any Borrower or the Parent, as applicable, (vii) it is not a natural person and (viii) it is not a Defaulting Lender or a Subsidiary of a Defaulting Lender or a Person who, upon becoming a Lender under the Credit Agreement, would constitute any of the foregoing Persons; and (b) agrees that (i) it will, independently and without reliance on any Administrative Agent, the Assignor or any other Lender, Issuer or their Related Parties and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis and decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender or Issuer (as applicable).

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Payments. From and after the Effective Date, the Applicable Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

General Provisions. This Assignment and Acceptance shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Acceptance may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are attached to the same document. Delivery of an executed counterpart of a signature page of this Assignment and Acceptance by telecopy or by other electronic imaging means shall be effective as delivery of a manually executed counterpart thereof. This Assignment and Acceptance and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York, without regard to its conflicts of laws provisions.

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EXHIBIT B TO CREDIT AGREEMENT

FORM OF TERM PROMISSORY NOTE

THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE TERM LOAN ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.

$[______] New York, NY [______]

FOR VALUE RECEIVED, each Borrower (as hereinafter defined) hereby unconditionally, jointly and severally promises to pay to [______] (the “Lender”) or its registered assigns at the office specified in the Credit Agreement (as hereinafter defined) in lawful money of the United States and in immediately available funds, on the Term [Maturity Date] the principal amount of (a) [______] DOLLARS ($[______]), or, if less, (b) the aggregate unpaid principal amount of all Term Loans made by the Lender to such Borrower pursuant to the Credit Agreement. Each Borrower further agrees to pay interest in like money at such office specified in the Credit Agreement on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in Section 2.13 of the Credit Agreement.

The registered holder of this Note (this “Note”) is authorized to endorse on the schedules annexed hereto and made a part hereof or on a continuation thereof, which shall be attached hereto and made a part hereof, the date, type and amount of each Term Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each continuation thereof, each conversion of all or a portion thereof to another type and, in the case of Eurodollar Rate Loans, the length of each Interest Period with respect thereto. Each such endorsement shall constitute prima facie evidence of the accuracy of the information so endorsed. The failure to make any such endorsement or any error in any such endorsement shall not affect the obligations of any Borrower in respect of any Term Loan.

This Note (a) is one of the promissory notes relating to Term Loans referred to in the Superpriority Senior Secured Debtor-In- Possession Credit Agreement dated as of January [__], 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among McDermott Technology (Americas), Inc., a Delaware corporation, McDermott Technology (US), Inc., a Delaware corporation, and McDermott Technology, B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands (each a “Borrower” and collectively the “Borrowers”), McDermott International, Inc., a Panamanian corporation (the “Parent”), the Lenders, the Issuers, Crédit Agricole Corporate and Investment Bank, as administrative agent for the Revolving Facility, and Barclays Bank PLC, as administrative agent for the Term Facility (in

B-1 such capacity, and together with its successors, the “Term Loan Administrative Agent”), (b) is subject to the provisions of the Credit Agreement and (c) is subject to prepayment in whole or in part as provided in the Credit Agreement. This Note is secured and guaranteed as provided in the Loan Documents. Reference is hereby made to the Loan Documents for a description of the properties and assets in which a security interest has been granted, the nature and extent of the security and the guarantees, the terms and conditions upon which the security interests and each guarantee were granted and the rights of the registered holder of this Note in respect thereof. Terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

Upon the occurrence of any one or more of the Events of Default, all principal and all accrued interest then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided in the Loan Documents.

All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind, except as expressly set forth in the Credit Agreement.

Each Borrower promises to pay all costs and expenses, including reasonable attorneys’ fees, all as provided in the Credit Agreement, incurred in the collection and enforcement of this Note. Each Borrower and its successors or assigns hereby waive diligence, presentment, protest, demand notice of every kind and, to the full extent permitted by law, the right to plead any statute of limitations as a defense to any demand hereunder.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 11.2 OF THE CREDIT AGREEMENT.

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THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICTS OF LAWS PROVISIONS.

BORROWERS:

MCDERMOTT TECHNOLOGY (AMERICAS), INC.

By: Name: Title:

MCDERMOTT TECHNOLOGY (US), INC.

By: Name: Title:

MCDERMOTT TECHNOLOGY, B.V.

By: Name: Title:

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Schedule A to Promissory Note

LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS

Amount of Base Rate Loans Amount of Converted to Unpaid Principal Amount of Base Amount Converted Principal of Base Eurodollar Rate Balance of Base Date Rate Loans to Base Rate Loans Rate Loans Repaid Loans Rate Loans Notation Made By

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Schedule B to Promissory Note

LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR RATE LOANS

Amount of Amount Interest Period Amount of Eurodollar Rate Unpaid Principal Amount of Converted to and Eurodollar Principal of Loans Converted Balance of Eurodollar Rate Eurodollar Rate Rate with Eurodollar Rate to Base Rate Eurodollar Rate Notation Made Date Loans Loans Respect Thereto Loans Repaid Loans Loans By

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EXHIBIT C TO CREDIT AGREEMENT

FORM OF NOTICE OF TERM BORROWING

Barclays Bank PLC, as Term Loan Administrative Agent for the Lenders referred to below, Loan Operations 1301 Avenue of the Americas New York, NY 10019

[Date]

Attention of: Agency Services – McDermott International; [Contact Name]

Ladies and Gentlemen:

The undersigned, McDermott Technology (Americas), Inc., a Delaware corporation, McDermott Technology (US), Inc., a Delaware corporation, and McDermott Technology, B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands (each a “Borrower” and collectively the “Borrowers”), refer to the Superpriority Senior Secured Debtor-In-Possession Credit Agreement dated as of January [__], 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; terms used herein and not otherwise defined herein having the meanings attributed thereto in the Credit Agreement) among the Borrowers, McDermott International, Inc., a Panamanian corporation (the “Parent”), the Lenders, the Issuers, Crédit Agricole Corporate and Investment Bank, as administrative agent for the Revolving Facility and Barclays Bank PLC, as administrative agent for the Term Facility (in such capacity, and together with its successors, the “Term Loan Administrative Agent”), and hereby give you irrevocable notice pursuant to Section 2.2(a) of the Credit Agreement that the undersigned hereby request a Borrowing of Term Loans, and in connection with that request set forth below the information relating to such Borrowing (the “Proposed Borrowing”) as required by Section 2.2(a) of the Credit Agreement:

(i) Date of Proposed Borrowing9: [Effective Date]

(ii) Proposed Borrowing will be composed of:[Base][Eurodollar] Rate Loans

(iii) Aggregate amount of Proposed Borrowing:$______

9 Notice of Borrowing must be received by the Term Loan Administrative Agent not later than 11:00 a.m. (New York time) (A) one Business Day prior to the Effective Date, in the case of a Borrowing of Base Rate Loans and (B) three Business Days prior to the Effective Date, in the case of a Borrowing of Eurodollar Rate Loans.

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(iv) Initial Interest Period10: ______

(v) Funds are requested to be disbursed to the Borrowers’ account with ______(Account No. ______).

[Each Borrower hereby certifies that the following statements will be true on the date of the Proposed Borrowing, both before and after giving effect thereto and to any application of the proceeds therefrom on such date:

(A) (i) The representations and warranties contained in Article IV of the Credit Agreement and in the other Loan Documents that have no materiality or Material Adverse Effect qualification are true and correct in all material respects and (ii) the representations and warranties set forth in Article IV of the Credit Agreement and in the other Loan Documents that have a materiality or Material Adverse Effect qualification are true and correct in all respects, in each case with the same effect as though made on and as of such date or, to the extent such representations and warranties expressly relate to an earlier date, as of such earlier date; and

(B) No Default or Event of Default has occurred and is continuing or will occur as a result of the Proposed Borrowing or from the application of proceeds thereof.]11

Very truly yours,

MCDERMOTT TECHNOLOGY (AMERICAS), INC.

By: Name: Title:

MCDERMOTT TECHNOLOGY (US), INC.

By: Name: Title:

MCDERMOTT TECHNOLOGY, B.V.

By: Name: Title:

10 Which shall be subject to the definition of “Interest Period” and Sections 2.13 and 2.14 of the Credit Agreement and end not later than the Term Maturity Date (applicable for Eurodollar Rate Loans only). 11 Bracketed text only to be included for borrowing after the Effective Date.

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EXHIBIT D TO CREDIT AGREEMENT

FORM OF INTERIM DIP ORDER

[To be included.]

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EXHIBIT E TO CREDIT AGREEMENT

FORM OF LETTER OF CREDIT REQUEST

Reference is made to the Superpriority Senior Secured Debtor-In-Possession Credit Agreement dated as of January [__], 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among McDermott Technology (Americas), Inc., a Delaware corporation, McDermott Technology (US), Inc., a Delaware corporation, and McDermott Technology, B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands (each a “Borrower” and collectively the “Borrowers”), McDermott International, Inc., a Panamanian corporation (the “Parent”), the Lenders, the Issuers, Crédit Agricole Corporate and Investment Bank, as administrative agent for the Revolving Facility, and Barclays Bank PLC, as administrative agent for the Term Facility. Terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

Pursuant to Section 2.7 of the Credit Agreement, the Borrowers request a [Performance/Financial] Letter of Credit to be issued in accordance with the terms and conditions of the Credit Agreement on [__/__/20__12] (the “Credit Date”) in an aggregate face amount of $[__,__,__].

Attached hereto for each such Letter of Credit are the following:

(a) the requested Issuer of such Letter of Credit;

(b) the stated amount of such Letter of Credit;

(d) the expiration date;13 and

(e) either (i) the verbatim text of such proposed Letter of Credit or (ii) a description of the proposed terms and conditions of such Letter of Credit, including a precise description of any documents to be presented by the beneficiary which, if presented by the beneficiary prior to the expiration date of such Letter of Credit, would require the Issuer to make payment under such Letter of Credit.

12 Unless the Issuer otherwise agrees, such notice, to be effective, must be received by the relevant Issuer not later than 11:00 a.m. (New York time) on the second Business Day prior to the Credit Date. 13 The expiration date must be a Business Day.

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The Borrowers hereby certify that the following statements will be true on the Credit Date, both before and after giving effect to the Issuance requested hereunder:

(B) No Default or Event of Default has occurred and is continuing or will occur as a result of the proposed Issuance or from the application of proceeds thereof.

[Immediately after giving effect to this proposed Issuance of a Letter of Credit, the sum of the Dollar Equivalent of the Letter of Credit Obligations in respect of each Letter of Credit denominated in an Alternative Currency does not exceed the Alternative Currency Cap as a result of this proposed Issuance.]14

Very truly yours, Date: __/__/20___

MCDERMOTT TECHNOLOGY (AMERICAS), INC.

By: Name: Title:

MCDERMOTT TECHNOLOGY (US), INC.

By: Name: Title:

MCDERMOTT TECHNOLOGY, B.V.

By: Name: Title:

14 To be included for any proposed Issuance of a Letter of Credit denominated in an Alternative Currency.

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EXHIBIT F TO CREDIT AGREEMENT

FORM OF NOTICE OF CONVERSION OR CONTINUATION

Pursuant to Section 2.14 of the Credit Agreement, the undersigned desire to convert or to continue the following [Revolving/Term] Loans, each such conversion and/or continuation to be effective as of __/__/20__15:

The aggregate amount of [Revolving/Term] Loans being converted or continued is $[___,___,___], [$[ ] of which are Eurodollar Rate Loans with an Interest Period ending [ ]] [and] [ $[ ] of which are Base Rate Loans]

$[___,___,___] Eurodollar Rate Loans to be continued with Interest Period of _____ month(s)

$[___,___,___] Base Rate Loans to be converted to Eurodollar Rate Loans with Interest Period of _____ month(s)

$[___,___,___] Eurodollar Rate Loans to be converted to Base Rate Loans

15 The Applicable Administrative Agent shall have at least three Business Days’ prior written notice.

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The Borrowers hereby certify that as of the date hereof, no Default or Event of Default has occurred and is continuing or would result from the consummation of the conversion and/or continuation contemplated hereby.

Date: __/__/20___

MCDERMOTT TECHNOLOGY (AMERICAS), INC.

By: Name: Title:

MCDERMOTT TECHNOLOGY (US), INC.

By: Name: Title:

MCDERMOTT TECHNOLOGY, B.V.

By: Name: Title:

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EXHIBIT G TO CREDIT AGREEMENT

FORM OF GLOBAL INTERCOMPANY NOTE

New York, New York [__], 20[_]

FOR VALUE RECEIVED, McDermott Technology (Americas), Inc., a Delaware corporation, McDermott Technology (US), Inc., a Delaware corporation, and McDermott Technology, B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands (each a “Borrower” and collectively the “Borrowers”), McDermott International, Inc., a Panamanian corporation (the “Parent”) and each of the Parent’s Restricted Subsidiaries which is a party (each, a “Payor”) to this Second Amended and Restated Global Intercompany Note (this “Intercompany Note”), hereby unconditionally promises to pay on demand to the Borrowers, the Parent and each of their Affiliates which is a party to this Intercompany Note as a payee (each, a “Payee”) at such place as such Payee may direct in writing, the principal amount of this Intercompany Note, determined as described below, together with interest thereon at the rate per annum as shall be agreed upon from time to time by any Payor and any Payee. This Intercompany Note is the Global Intercompany Note referred to in (i) the Credit Agreement dated as of May 10, 2018 as amended by the Amendment No. 1 to Credit Agreement dated as of October 21, 2019, the Amendment No. 2 to Credit Agreement dated as of December 1, 2019 and the Amendment No. 3 to Credit Agreement dated as of January 9, 2020 (as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among the Borrowers, the Parent, the Lenders, the Issuers, Crédit Agricole Corporate and Investment Bank, as administrative agent for the Revolving Facility and the LC Facility (in such capacity, and together with its successors, the “Revolving and LC Administrative Agent”), and Barclays Bank PLC, as administrative agent for the Term Facility (in such capacity, and together with its successors, the “Term Loan Administrative Agent” and together with the Revolving and LC Administrative Agent, each an “Administrative Agent” and together the “Administrative Agents”), (ii) the Superpriority Senior Secured Credit Agreement dated as of October 21, 2019 as amended by the Amendment No. 1 to Credit Agreement dated as of December 1, 2019 and the Amendment No. 2 to Credit Agreement dated as of January 9, 2020 (as further amended, restated, supplemented or otherwise modified from time to time, the “SP Credit Agreement”) among the Borrowers, the Parent, the Lenders (as defined therein, the “SP Lenders”), the Issuers (as defined therein, the “SP Issuers”), Crédit Agricole Corporate and Investment Bank, as administrative agent for the Revolving Facility (as defined therein) (in such capacity, and together with its successors, the “SP Revolving Administrative Agent”), and Barclays Bank PLC, as administrative agent for the Term Facility (as defined therein) (in such capacity, and together with its successors, the “SP Term Loan Administrative Agent” and together with the SP Revolving Administrative Agent, each an “SP Administrative Agent” and together the “SP Administrative Agents”), and (iii) the Superpriority Senior Secured Debtor-In-Possession Credit Agreement dated on or about the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “DIP Credit Agreement”) among the Borrowers, the Parent, the Lenders (as defined therein, the “DIP Lenders”), the Issuers (as defined therein, the “DIP Issuers”), Crédit Agricole

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Corporate and Investment Bank, as administrative agent for the Revolving Facility (as defined therein) (in such capacity, and together with its successors, the “DIP Revolving Administrative Agent”), and Barclays Bank PLC, as administrative agent for the Term Facility (as defined therein) (in such capacity, and together with its successors, the “DIP Term Loan Administrative Agent” and together with the DIP Revolving Administrative Agent, each a “DIP Administrative Agent” and together the “DIP Administrative Agents”). Terms used herein and not otherwise defined herein shall, as the context requires, have the meanings assigned to such terms in (i) the Credit Agreement or (ii) that certain Collateral Agency and Intercreditor Agreement (as the same may be amended, amended and restated, supplemented or otherwise modified, renewed or replaced from time to time, the “Collateral Agency and Intercreditor Agreement”) dated as of May 10, 2018 among the Borrowers, the Parent, the other “Guarantors” party thereto from time to time, the Revolving and LC Administrative Agent, the Collateral Agent, the Term Loan Administrative Agent and Lloyds TSB Bank PLC as a Secured Debt Representative (as defined therein) and the other financial institutions from time to time party thereto. Each Payee by accepting or executing this Intercompany Note agrees that the indebtedness evidenced by this Intercompany Note is subordinated in right of payment to the occurrence of (a) the Final Satisfaction Date (as defined in the DIP Credit Agreement), (b) the Final Satisfaction Date (as defined in the SP Credit Agreement), (c) the Final Satisfaction Date, (d) the payment or otherwise satisfaction in full of all other Obligations (used herein as defined in the Collateral Agency and Intercreditor Agreement) other than in respect of any contingent indemnification or expense reimbursement obligations for which no claim has been asserted and to the extent not yet due and payable, and the expiration or termination of all commitments under each Secured Debt Document (as defined in the Collateral Agency and Intercreditor Agreement) and (e) the payment in full in cash of all obligations with respect to the Senior Notes, and that such subordination is for the benefit of and enforceable by (i) in respect of the Obligations (as defined in the DIP Credit Agreement, the “DIP Obligations”), the Collateral Agent (as defined in the DIP Credit Agreement, the “DIP Collateral Agent”) under the Pledge and Security Agreement (as defined in the DIP Credit Agreement, the “DIP Pledge and Security Agreement”), (ii) in respect of the Obligations (as defined in the SP Credit Agreement, the “SP Obligations”), the Collateral Agent (as defined in the SP Credit Agreement, the “SP Collateral Agent”) under the Pledge and Security Agreement (as defined in the SP Credit Agreement, the “SP Pledge and Security Agreement”), (iii) in respect of the Obligations, the Collateral Agent under the Pledge and Security Agreement and (iv) in respect of the obligations described in the immediately preceding clause (e) (the “Notes Obligations”), Wells Fargo Bank, National Association, in its capacity as trustee with respect to the Senior Notes (in such capacity, together with its successors and assigns, the “Notes Trustee”) under the Indenture, dated April 18, 2018 (the “Indenture”), among McDermott Technology (Americas), Inc. (as successor by merger with McDermott Escrow 1, Inc.) and McDermott Technology (US), Inc. (as successor by merger with McDermott Escrow 2, Inc.), as the issuers, the Parent and certain other subsidiaries of the Parent, as guarantors, and the Notes Trustee. Upon any payment or distribution of the assets of any Borrower to creditors upon a total or partial liquidation or a total or partial dissolution of any Borrower or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to any Borrower or its property, (A)(w) the DIP Collateral Agent, the DIP Administrative Agents, the DIP Lenders and the DIP Issuers shall be entitled to receive payment in full in cash or cash equivalents of the DIP Obligations, (x) the SP Collateral Agent, the SP Administrative Agents, the SP Lenders and the SP Issuers shall be entitled to receive payment in full in cash or cash equivalents of the SP Obligations, (y) the Collateral Agent, the Administrative Agents, the Lenders and the Issuers shall

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be entitled to receive payment in full in cash or cash equivalents of the Obligations and (z) the Notes Trustee shall be entitled to receive payment in full in cash or cash equivalents of the Notes Obligations, in each case before any Payee shall be entitled to receive any payment hereunder, and (B) until the DIP Obligations, the SP Obligations, the Obligations and the Notes Obligations are paid in full in cash, any payment or distribution to which any Payee would be entitled but for this paragraph shall be made in lawful money of the United States of America and in immediately available funds, to holders of the DIP Obligations, SP Obligations, the Obligations and the holders of the Notes Obligations as their interests may appear. Each Payor may pay, and each Payee may receive payment of, the principal or interest evidenced by this Intercompany Note; provided, that (i) no Payor may pay the principal of or interest on this Intercompany Note at any time (a) except as permitted by the DIP Order (as defined in the DIP Credit Agreement), the Cash Management Order (as defined in the DIP Credit Agreement) or the Approved Budget (as defined in the DIP Credit Agreement), (b) that an Event of Default under clauses (a), (b) or (f) of Section 9.1 of the SP Credit Agreement, (c) that an Event of Default under clauses (a), (b) or (f) of Section 9.1 of the Credit Agreement or (d) that an Event of Default (as defined in the Indenture) under clauses (1), (2) or (8) of Section 6.1 of the Indenture, has occurred and is continuing, in any case unless the Payee is a Borrower (as defined in the DIP Credit Agreement) or a Guarantor (as defined in the DIP Credit Agreement), a Borrower (as defined in the SP Credit Agreement) or a Guarantor (as defined in the SP Credit Agreement), a Borrower or a Guarantor, or an Issuer (as defined in the Indenture, each a “Notes Issuer”) or a Guarantor (as defined in the Indenture and, each such Guarantor, together with each Notes Issuer, collectively, the “Notes Parties”), (ii) no Payor that is a Loan Party (as defined in the DIP Credit Agreement), a Loan Party (as defined in the SP Credit Agreement), a Loan Party or a Note Party may pay the principal of or interest on this Intercompany Note at any time, except as permitted by the DIP Order (as defined in the DIP Credit Agreement), the Cash Management Order (as defined in the DIP Credit Agreement) or the Approved Budget (as defined in the DIP Credit Agreement), or at any time that an Event of Default (as defined in the SP Credit Agreement), an Event of Default or an Event of Default (as defined in the Indenture) is continuing unless the Payee is a Loan Party (as defined in the DIP Credit Agreement), a Loan Party (as defined in the SP Credit Agreement), a Loan Party or a Note Party and (iii) no Payor that is a Borrower, the Parent or any of its Restricted Subsidiaries (as defined in the DIP Credit Agreement), a Borrower, the Parent or any of its Restricted Subsidiaries (as defined in the SP Credit Agreement) or a Borrower, the Parent or any of its Restricted Subsidiaries may pay the principal of or interest on this Intercompany Note to any Affiliate of any Borrower (other than a Borrower, the Parent or any of its Restricted Subsidiaries (as defined in the DIP Credit Agreement), a Borrower, the Parent or any of its Restricted Subsidiaries (as defined in the SP Credit Agreement) or a Borrower, the Parent or any of its Restricted Subsidiaries) in violation of Section 8.5 of the DIP Credit Agreement, Section 8.5 of the SP Credit Agreement, Section 8.5 of the Credit Agreement or Section 4.7 of the Indenture. If any payment or distribution is made to any Payee that because of this paragraph should not have been made to it or which such Payee is otherwise not entitled to retain under the provisions of this paragraph, such Payee shall hold it in trust for the holders of the DIP Obligations, the holders of the SP Obligations, the holders of the Obligations and the holders of the Notes Obligations and pay it over to the DIP Collateral Agent, the SP Collateral Agent, the Collateral Agent or the Notes Trustee, as applicable, on their behalf as their interests may appear.

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The aggregate principal amount of this Intercompany Note at any time shall be equal to the aggregate unpaid principal amount of all loans and extensions of credit to any Payor by any Payee, as adjusted on a regular basis to reflect any payments made by any Payor in respect of the principal of this Intercompany Note, any additional advances to any Payor from any Payee or any accrued interest which is added to the principal amount hereof in accordance with the terms hereof, in each case, as reflected on the books and records of the applicable Payee. Subject to the third and fourth paragraphs of this Intercompany Note (the “Subordination Provision”), loans hereunder may be prepaid at the option of the Payor. Principal not paid or prepaid pursuant to the terms hereof shall be payable on the date that is the later of (i) one year after the Final Satisfaction Date (as defined in the DIP Credit Agreement), (ii) the Final Satisfaction Date (as defined in the SP Credit Agreement), (iii) the Final Satisfaction Date and (iv) the Stated Maturity (as defined in the Indenture) of the Senior Notes. Subject to the Subordination Provision, payments of interest, if any, on this Intercompany Note shall be payable in the manner separately agreed by the Payor and the Payee. Subject to the Subordination Provision, this Intercompany Note shall also be payable in full or in part pursuant to a written demand to a Payor (a “Demand”) from a Payee or, during the continuance of an Event of Default (as defined in the DIP Credit Agreement), an Event of Default (as defined in the SP Credit Agreement), an Event of Default or an Event of Default (as defined in the Indenture), the Applicable Administrative Agent (as defined in the DIP Credit Agreement), the Applicable Administrative Agent (as defined in the SP Credit Agreement), the Applicable Administrative Agent or the Notes Trustee, as applicable, at which time the Payor shall make all payments of the amounts so demanded to the account designated in the Demand on the date specified in the Demand. Following delivery of a Demand, all payments shall be made in accordance with instructions in the Demand. If payment hereunder is due on a day that is not a Business Day, the date for such payment shall be the immediately succeeding Business Day. The obligations of each Payor under this Note shall be absolute and each Payor hereby irrevocably waives any right (whether arising by operation of law or otherwise) to any setoff, counterclaim or reduction of its obligations with respect to any amounts payable under this Intercompany Note based on any claims that such Payor has against each Payee, its affiliates or any other person. Each Payor hereby waives presentment for payment, demands, notice of dishonor and protest of this Intercompany Note and further agrees that none of its terms or provisions may be waived, altered, modified or amended except as each Payee may consent in a writing duly signed for and on its behalf. No failure or delay on the part of any Payee in exercising any of its rights, powers or privileges hereunder shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The remedies provided herein are cumulative and are not exclusive of any remedies provided by law. Each Payor also agrees to pay on demand all costs and expenses (including fees and expenses of counsel) incurred by each Payee or its successors and assigns in enforcing this Intercompany Note. This Intercompany Note is binding upon each Payor and its successors and assigns and is for the benefit of each Payee and its successors and assigns, except that the Payor may not assign or otherwise transfer its rights or obligations under this Intercompany Note except in connection with a transaction permitted by the DIP Credit Agreement, the SP Credit Agreement

G-4

and the Credit Agreement. Each Payor hereby acknowledges and consents to (x) the assignment by each Payee that is a Grantor (as defined in the Pledge and Security Agreement) to the Collateral Agent of all of its right, title and interest in this Intercompany Note and all collateral security therefor in accordance with the Pledge and Security Agreement, (y) the assignment by each Payee that is a Grantor (as defined in the SP Pledge and Security Agreement) to the SP Collateral Agent of all of its right, title and interest in this Intercompany Note and all collateral security therefor in accordance with the SP Pledge and Security Agreement, and (z) the assignment by each Payee that is a Grantor (as defined in the DIP Pledge and Security Agreement) to the DIP Collateral Agent of all its right, title and interest in this Intercompany Note and all collateral security thereof in accordance with the DIP Pledge and Security Agreement. Each Payor and each Payee, by its acceptance hereof, agree for the benefit of the DIP Collateral Agent, the SP Collateral Agent and the Collateral Agent not to amend, modify or terminate the provisions of, or assign any of their respective rights or obligations under, this Intercompany Note without the prior written consent of (x) the DIP Administrative Agents and the DIP Collateral Agent as long as any amounts are payable to the DIP Administrative Agents, the DIP Collateral Agent, the DIP Lenders or the DIP Issuers under the Loan Documents (as defined in the DIP Credit Agreement), (y) the SP Administrative Agents and the SP Collateral Agent as long as any amounts are payable to the SP Administrative Agents, the SP Collateral Agent, the SP Lenders or the SP Issuers under the Loan Documents (as defined in the SP Credit Agreement), and (z) the Administrative Agents and the Collateral Agent as long as any amounts are payable to the Administrative Agents, the Collateral Agent, the Lenders or the Issuers under the Loan Documents. EACH PAYOR AND EACH PAYEE HEREBY (A) AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS INTERCOMPANY NOTE SHALL BE BROUGHT IN THE BANKRUPTCY COURT OR, TO THE EXTENT THAT THE BANKRUPTCY COURT DOES NOT HAVE (OR ABSTAINS FROM EXERCISING) JURISDICTION, THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS INTERCOMPANY NOTE, EACH PAYOR AND EACH PAYEE HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND (B) IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. EACH PAYOR AND EACH PAYEE FURTHER WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INTERCOMPANY NOTE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES. EACH PAYOR AND EACH PAYEE IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING (BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID) OF COPIES OF SUCH PROCESS TO MCDERMOTT INTERNATIONAL, INC. (AT ITS ADDRESS FOR NOTICES IN ACCORDANCE WITH SECTION 11.8 OF THE DIP CREDIT

G-5

AGREEMENT). EACH PAYOR AND EACH PAYEE AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE DIP ADMINISTRATIVE AGENTS, THE DIP COLLATERAL AGENT, ANY DIP LENDER, THE SP ADMINISTRATIVE AGENTS, THE SP COLLATERAL AGENT, ANY SP LENDER, THE ADMINISTRATIVE AGENTS, THE COLLATERAL AGENT, ANY LENDER OR THE NOTES TRUSTEE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PAYOR OR ANY PAYEE IN ANY OTHER JURISDICTION. TO THE EXTENT THAT ANY PAYOR OR ANY PAYEE HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), SUCH PAYOR OR PAYEE (AS THE CASE MAY BE) HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS HEREUNDER. All payments made under this Intercompany Note to holders of the DIP Obligations, holders of the SP Obligations, holders of the Obligations or the holders of the Notes Obligations shall be made in Dollars, and, if for any reason any payment made hereunder is made in a currency other than Dollars (the “Other Currency”), then to the extent that the payment actually received by any Payee when converted into Dollars at the Rate of Exchange (as defined below) on the date of payment (or as soon thereafter as it is practicable for such Payee to purchase Dollars, or, in the case of the liquidation, insolvency, bankruptcy or analogous process of the applicable Payor, at the Rate of Exchange on the latest date permitted by applicable law for the determination of liabilities in such liquidation, insolvency, bankruptcy or analogous process) falls short of the amount due hereunder, such Payor shall, as a separate and independent obligation of such Payor, indemnify such Payee and hold such Payee harmless against the amount of such shortfall. As used in this Intercompany Note, the term “Rate of Exchange” means the rate at which the applicable Payee is able on the relevant date to purchase Dollars with the Other Currency and shall include any premiums and costs of exchange payable in connection with the purchase of, or conversion into, Dollars. Each Payor and each Payee which is also a Dutch pledgor under the Dutch law governed omnibus deed of pledge dated on or about the date hereof and made between the Dutch pledgors as listed in schedule 1 thereto as Dutch pledgors and Crédit Agricole Corporate and Investment Bank as pledgee (the “Dutch Omnibus Pledge (Third Ranking)”), hereby notifies each other Payor and Payee that under the Dutch Omnibus Pledge (Third Ranking) it has created (and has created in advance (bij voorbaat)) a third ranking right of pledge (pandrecht derde in rang) on all of its present and future rights (vorderingen op naam) (whether actual or contingent) exercisable against each such Payor or Payee, as security in favor of Crédit Agricole Corporate and Investment Bank for, inter alia, its obligations under the DIP Credit Agreement. Until further written notice from Crédit Agricole Corporate and Investment Bank each Payor and each Payee remains authorized to pay all claims directly to the relevant Dutch pledgor in accordance with, and subject to, the terms of this Intercompany Note.

G-6

Each Payor and each Payee which is also a pledgor under the Curacao law governed omnibus deed of pledge dated on or about the date hereof and made between Chicago Bridge & Iron (Antilles) N.V., MC Dermott International Marine Investments N.V., Mc Dermott Overseas Investment Co. N.V. and Varsy International N.V. as pledgors and Crédit Agricole Corporate and Investment Bank as pledgee (the "Curacao Omnibus Pledge (Third Ranking)"), hereby notifies each other Payor and Payee that under the Curacao Omnibus Pledge (Third Ranking), it has created (and has created in advance (bij voorbaat)) a third ranking right of pledge (pandrecht derde in rang) on all of its present and future rights (vorderingen op naam) (whether actual or contingent) exercisable against each such Payor or Payee, as security in favor of Crédit Agricole Corporate and Investment Bank for, inter alia, its obligations under the DIP Credit Agreement. Until further written notice from Crédit Agricole Corporate and Investment Bank each Payor and each Payee remains authorized to pay all claims directly to the relevant Pledgor in accordance with, and subject to, the terms of this Intercompany Note.

This Intercompany Note amends, restates and supersedes (but does not extinguish the indebtedness evidenced by or constitute a novation of) that certain Amended and Restated Intercompany Note dated as of October 21, 2019, among certain of the Payees and certain of the Payors, as amended and restated or supplemented prior to the date hereof (the “Prior Note”) and all indebtedness previously evidenced by such Prior Note shall hereafter be evidenced by this Intercompany Note. This Intercompany Note is subject to the terms of the DIP Orders (as defined in the DIP Credit Agreement) and in the case of any conflict or inconsistency between the terms of this Intercompany Note and the DIP Orders (as defined in the DIP Credit Agreement ), the terms of the DIP Orders (as defined in the DIP Credit Agreement) shall control. THIS INTERCOMPANY NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE WITHOUT REGARD TO ITS CONFLICTS OF LAWS PROVISIONS.

[Signature Pages Follow]

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IN WITNESS WHEREOF, each Payor and each Payee has caused this Intercompany Note to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written.

MCDERMOTT TECHNOLOGY (AMERICAS), INC.

By: Name: Title:

MCDERMOTT TECHNOLOGY (US), INC.

By: Name: Title:

MCDERMOTT TECHNOLOGY, B.V.

By: Name: Title:

[PAYOR/PAYEE]

By: Name: Title:

G-8

EXHIBIT H TO CREDIT AGREEMENT

FORM OF COMPLIANCE CERTIFICATE

For Fiscal [Quarter/Year] Ended [______], 20[__] (the “Calculation Period”)

This certificate dated as of [______], 20[__] is prepared pursuant to the Superpriority Senior Secured Debtor-In- Possession Credit Agreement dated as of January [__], 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among McDermott Technology (Americas), Inc., a Delaware corporation, McDermott Technology (US), Inc., a Delaware corporation, and McDermott Technology, B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands (each a “Borrower” and collectively the “Borrowers”), McDermott International, Inc., a Panamanian corporation (the “Parent”), the Lenders, the Issuers, Crédit Agricole Corporate and Investment Bank, as administrative agent for the Revolving Facility (in such capacity, and together with its successors, the “Revolving Administrative Agent”), and Barclays Bank PLC, as administrative agent for the Term Facility. The terms used herein and not otherwise defined herein have the meanings attributed thereto in the Credit Agreement.

The undersigned hereby certifies to the Revolving Administrative Agent in his or her capacity as a Responsible Officer of the Parent and not in his or her individual capacity that (a) except as disclosed on Schedule [_] hereto, during the Calculation Period (or during the last Fiscal Quarter of the Calculation Period if such Calculation Period is in respect of a Fiscal Year), the Parent, the Borrowers and their Restricted Subsidiaries have not undertaken any Asset Sale permitted by clauses (g), (h) or (i) of Section 8.4 of the Credit Agreement (and that such schedule identifies the aggregate consideration received in connection with such Asset Sale(s) if such aggregate consideration exceeds $10,000,000.00), (b) that[, except as disclosed on Schedule [_] hereto (including the nature thereof and the action with the Borrowers have taken or proposed to take with respect thereto)], no Default or Event of Default has occurred and is continuing, (c) except as disclosed on Schedule [_] hereto, as of the last day of the most recently ended Fiscal Quarter or Fiscal Year for which financial statements have been delivered pursuant to clause (a) or (b), as applicable, of Section 6.1 of the Credit Agreement, there are no new Material Wholly-Owned Subsidiaries that are not Loan Parties and (d) that as of the last day of the Calculation Period, the following amounts and calculations were true and correct:

H-1

1. Section 5.2 – Minimum Adjusted EBITDA

EBITDA for the most recently ended four Fiscal Quarter period for which financial statements have been delivered pursuant to Section 6.1(a) or (b) of the Credit Agreement ______(a)

Minimum Adjusted EBITDA amount for applicable Test Period End Date as listed in Section 5.2 of the Credit Agreement ______(b)

Compliance (1)(a) must exceed (1)(b) Yes No

2. Section 5.4 – Maximum Specified Project Charges

(a) Project gross profit as of the Fiscal Quarter’s (which precedes the most recently ended Fiscal Quarter) earnings release related to Cameron, Duke Asheville, Calpine, MOX, Tyra Pkg 1 & 3, Freeport 1 & 2, Freeport 3, ROTA-3 PIPELINE, TOTAL Ethane, and any projects not listed which incur charges substantial enough to require disclosure in the Company’s earnings release (collectively, the “Projects”). ______(a)

(b) Project gross profit as of the most recently ended Fiscal Quarter’s earnings release related to the Projects. ______(b)

(d) Maximum Project Charges for applicable Test Period End Date as listed in Section 5.4 of the Credit Agreement $______(d)

Compliance (2)(c) must not exceed (2)(d) Yes No

H-2

IN WITNESS WHEREOF, I have hereto signed my name to this Revolving Facility Compliance Certificate as of the date first above written.

MCDERMOTT INTERNATIONAL, INC.

By: Name: Title:

H-3

EXHIBIT I-1 TO CREDIT AGREEMENT

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Superpriority Senior Secured Debtor-In-Possession Credit Agreement dated as of January [__], 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among McDermott Technology (Americas), Inc., a Delaware corporation, McDermott Technology (US), Inc., a Delaware corporation, and McDermott Technology, B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands (each a “Borrower” and collectively the “Borrowers”), McDermott International, Inc., a Panamanian corporation (the “Parent”), the Lenders, the Issuers, Crédit Agricole Corporate and Investment Bank, as administrative agent for the Revolving Facility, and Barclays Bank PLC, as administrative agent for the Term Facility.

Pursuant to the provisions of Section 2.19(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Applicable Administrative Agent and the Borrowers with a certificate of its non-U.S. Person status on IRS Form W-8BEN-E or IRS Form W-8BEN, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrowers and the Applicable Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrowers and the Applicable Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]

By: Name: Title: Date: ______, 20[ ]

I1-1

EXHIBIT I-2 TO CREDIT AGREEMENT

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.19(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN-E or IRS Form W-8BEN, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

By: Name: Title: Date: ______, 20[ ]

I2-1

EXHIBIT I-3 TO CREDIT AGREEMENT

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.19(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its direct or indirect partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN-E or IRS Form W-8BEN, as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN-E or IRS Form W-8BEN, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

By: Name: Title: Date: ______, 20[ ]

I3-1

EXHIBIT I-4 TO CREDIT AGREEMENT FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax Purposes) Reference is hereby made to the Superpriority Senior Secured Debtor-In-Possession Credit Agreement dated as of January [__], 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among McDermott Technology (Americas), Inc., a Delaware corporation, McDermott Technology (US), Inc., a Delaware corporation, and McDermott Technology, B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands (each a “Borrower” and collectively the “Borrowers”), McDermott International, Inc., a Panamanian corporation (the “Parent”), the Lenders, the Issuers, Crédit Agricole Corporate and Investment Bank, as administrative agent for the Revolving Facility, and Barclays Bank PLC, as administrative agent for the Term Facility. Pursuant to the provisions of Section 2.19(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to the Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code. The undersigned has furnished the Applicable Administrative Agent and the Borrowers with IRS Form W-8IMY accompanied by one of the following forms from each of its direct or indirect partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN-E or IRS Form W-8BEN, as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN-E or IRS Form W-8BEN, as applicable, from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrowers and the Applicable Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrowers and the Applicable Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. [NAME OF LENDER] By: ______Name: Title: Date: ______, 20[ ]

Exhibit 4.23 Execution Version AMENDMENT NO. 1 TO CREDIT AGREEMENT

This AMENDMENT NO. 1 TO CREDIT AGREEMENT (“Amendment”) entered into and effective as of February 24, 2020 (the “Amendment No. 1 Effective Date”) is by and among McDermott Technology (Americas), Inc., a Delaware corporation (“MTA”), McDermott Technology (US), Inc. a Delaware corporation (“MTUS”), McDermott Technology B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands (“MTBV” and together with MTA and MTUS, collectively the “Borrowers”, each a “Borrower”), McDermott International, Inc. a Panamanian corporation (the “Parent”), the Revolving Lenders party hereto, the Term Lenders party hereto, in each case, as defined in the Credit Agreement (as defined below) , and the Guarantors, as defined in the Credit Agreement (as defined below).

RECITALS

A. Whereas, reference is made to that certain Superpriority Senior Secured Debtor-in-Possession Credit Agreement dated as of January 23, 2020 among the Borrowers, the Parent, the Lenders and Issuers party thereto from time to time (“Lenders”), Credit Agricole Corporate and Investment Bank, as administrative agent for the Revolving Facility (the “Revolving Administrative Agent”) and Barclays Bank PLC, as administrative agent for the Term Facility (as defined in the Credit Agreement) (in such capacity, the “Term Loan Administrative Agent” and, together with the Revolving Administrative Agent, the “Administrative Agents” and each an “Administrative Agent”) (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).

B. Whereas the Parent and the Borrowers have requested that the Requisite Lenders, the Requisite Revolving Lenders and Requisite Term Lenders consent to certain amendments as more fully set forth herein.

C. Whereas, subject to the terms and conditions set forth herein, the parties hereto wish to amend the Credit Agreement.

NOW THEREFORE, in consideration of the premises and the mutual covenants, representations and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Defined Terms. As used in this Amendment, each of the terms defined in the opening paragraph and the Recitals above shall have the meanings assigned to such terms therein. Each term defined in the Credit Agreement and used herein without definition shall have the meaning assigned to such term in the Credit Agreement (as amended hereby), unless expressly provided to the contrary.

2. Other Definitional Provisions. Article, Section, Schedule, and Exhibit references are to Articles and Sections of and Schedules and Exhibits to this Amendment, unless otherwise specified. The words “hereof”, “herein”, and “hereunder” and words of similar import when used in this Amendment shall refer to this Amendment as a whole and not to any particular provision

#6127896.2 of this Amendment. The term “including” means “including, without limitation,”. Paragraph headings have been inserted in this Amendment as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Amendment and shall not be used in the interpretation of any provision of this Amendment.

3. Amendments to Credit Agreement. Subject to the satisfaction of the conditions set forth in Section 5 herein:

(a) Section 2.4(b)(xii) of the Credit Agreement is hereby amended by amending and restating it in its entirety as follows:

(xii) such Revolving Letter of Credit is to be used for anything other than (A) a new project, (B) incremental letters of credit for an existing project, (C) insurance purposes or (D) replacement of a letter of credit under any of the Prepetition Credit Agreements or the Lloyds Facility that is not an auto-renew letter of credit; or

(b) Section 2.6(a)(xii) of the Credit Agreement is hereby amended by amending and restating it in its entirety as follows:

(xii) such Cash Secured Letter of Credit is to be used for anything other than (A) a new project, (B) incremental letters of credit for an existing project, (C) insurance purposes, or (D) replacement of a letter of credit under any of the Prepetition Credit Agreements or the Lloyds Facility that is not an auto-renew letter of credit; or

(e) [Reserved].

(d) Section 9.1(dd) of the Credit Agreement is hereby amended by amending and restating it in its entirety as follows:

(dd) [Reserved]; or

4. Representations and Warranties. Each Loan Party represents and warrants that:

(a) after giving effect to this Amendment, all representations and warranties made by any Loan Party in the Credit Agreement and the other Loan Documents that have no materiality or Material Adverse Effect qualification are true and correct in all material respects and the representations and warranties in the Credit Agreement and in the other Loan Documents that have a materiality or Material Adverse Effect qualification are true and correct in all respects, in each case with the same effect as though made on and as of the Amendment No. 1 Effective Date or, to the extent such representations and warranties expressly relate to an earlier date, as of such earlier date;

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(b) after giving effect to this Amendment, no Default or Event of Default exists and is continuing as of the Amendment No. 1 Effective Date;

(c) the execution, delivery and performance of this Amendment are within the Borrowers’, Guarantors’ and the Parent’s corporate, limited liability company, partnership or other organizational powers, as applicable, and have been duly authorized by appropriate organizational and governing action and proceedings;

(d) each person who is executing this Amendment on behalf of the Borrowers, the Parent and each other Guarantor has the full power, authority and legal right to do so, and this Amendment has been duly executed by such person and delivered to the Administrative Agent; and

(e) this Amendment is the legal, valid and binding obligation of each Loan Party, enforceable against such Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

5. Conditions to Effectiveness. This Amendment shall become effective as of the Amendment No. 1 Effective Date and enforceable against the parties hereto upon the occurrence of the following conditions precedent:

(a) Each Administrative Agent shall have received this Amendment, executed by each Borrower, the Parent, each Guarantor, the Requisite Lenders, the Requisite Revolving Lenders and the Requisite Term Lenders in such counterparts as shall be acceptable to each Administrative Agent.

(b) The representations and warranties of each Loan Party contained in this Amendment, the Credit Agreement and the other Loan Documents that have no materiality or Material Adverse Effect qualification shall be true and correct in all material respects and the representations and warranties set forth in this Amendment, the Credit Agreement and in the other Loan Documents that have a materiality or Material Adverse Effect qualification shall be true and correct in all respects, in each case with the same effect as though made on and as of the Amendment No. 1 Effective Date or, to the extent such representations and warranties expressly relate to an earlier date, as of such earlier date.

(c) After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing as of the Amendment No. 1 Effective Date.

6. Reaffirmation of Credit Support.

(a) The Loan Parties acknowledge that on and as of the Amendment No. 1 Effective Date all Obligations are payable without defense, offset, counterclaim or recoupment. Each of the Borrowers and each Guarantor (collectively, the “Credit Support Parties”) has read this Amendment and consents to the terms hereof and further hereby confirms and agrees that, notwithstanding the effectiveness of this Amendment, the obligations of such Credit Support Party under, and the Liens granted by such Credit Support Party as collateral security for the

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Indebtedness, obligations and liabilities evidenced by the Credit Agreement and the other Loan Documents (as amended hereby) pursuant to, each of the Loan Documents (as amended hereby) to which such Credit Support Party is a party shall not be impaired, and each of the Loan Documents (as amended hereby) to which such Credit Support Party is a party is, and shall continue to be, in full force and effect and are hereby confirmed and ratified in all respects.

(b) Each Credit Support Party (other than the Borrowers) acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this Amendment, such Credit Support Party is not required by the terms of the Credit Agreement or any other Loan Document to consent to the amendments to the Credit Agreement effected pursuant to this Amendment and (ii) nothing in the Credit Agreement (as amended hereby), this Amendment or any other Loan Document (as amended hereby) shall be deemed to require the consent of such Credit Support Party to any future amendments to the Credit Agreement.

7. Acknowledgments and Agreements.

(a) The Borrowers do hereby adopt, ratify, and confirm the Credit Agreement, as amended hereby, and acknowledge and each agree that the Credit Agreement, as amended hereby, is and remains in full force and effect, and each Borrower acknowledges and agrees that its liabilities and obligations under the Credit Agreement, as amended hereby, and the other Loan Documents, are not impaired in any respect by this Amendment.

(b) From and after the Amendment No. 1 Effective Date, all references to the Credit Agreement and the Loan Documents shall mean such Credit Agreement and such Loan Documents as amended by this Amendment and the other documents executed pursuant hereto. This Amendment is a Loan Document for the purposes of the provisions of the other Loan Documents. Without limiting the foregoing, any breach of representations, warranties, and covenants under this Amendment shall be a Default or Event of Default, as applicable, under the Credit Agreement.

8. Miscellaneous.

(a) Except as specifically modified by this Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.

(b) The execution, delivery and performance of this Amendment shall not constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of any Agent, Lender or Issuer under, the Credit Agreement or any of the other Loan Documents.

9. Counterparts. This Amendment may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are attached to the same document. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart hereof.

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10. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted pursuant to the Credit Agreement; provided that, notwithstanding anything herein to the contrary, the parties hereto hereby agree that each of Collateral Agent, Barclays Bank PLC, in its capacity as Term Loan Administrative Agent and Credit Agricole Corporate and Investment Bank, in its capacity as Revolving Administrative Agent, shall have rights as a third party beneficiary to the terms, conditions and provisions of this Amendment.

11. Severability. If any provision of this Amendment is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Amendment shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

12. Governing Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO (INCLUDING THE SUBMISSION TO JURISDICTION IN SECTION 11.12 OF THE CREDIT AGREEMENT) SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE, WITHOUT REGARD TO ITS CONFLICTS OF LAWS PROVISIONS.

13. Entire Agreement. THIS AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS COLLECTIVELY REPRESENT THE FINAL AGREEMENT BY AND AMONG LENDERS, ISSUERS, ADMINISTRATIVE AGENTS AND LOAN PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF LENDERS, ISSUERS, ADMINISTRATIVE AGENTS AND LOAN PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG LENDERS, ISSUERS, ADMINISTRATIVE AGENTS AND LOAN PARTIES.

14. Release. EACH OF THE PARENT, EACH BORROWER AND THE OTHER LOAN PARTIES AND THEIR AFFILIATES ON BEHALF OF THEMSELVES AND THEIR FORMER AND CURRENT RELATED PARTIES AND EACH OF THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS (THE “RELEASING PARTIES”) HEREBY ACKNOWLEDGES AND AGREES THAT IT DOES NOT HAVE ANY CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, OR LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE AMENDMENT NO. 1 EFFECTIVE DATE IN CONNECTION WITH THE CREDIT AGREEMENT, COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT OR ANY LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREUNDER, IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR

-5-

REGULATIONS, OR OTHERWISE (EACH A “CAUSE OF ACTION”) THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF THE LIABILITY OF ANY BORROWER TO REPAY OR ANY GUARANTOR TO GUARANTEE THE OBLIGATIONS AS PROVIDED IN THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM ANY AGENT, ANY LENDER OR ANY ISSUER OR ANY OF THEIR RESPECTIVE CURRENT OR FORMER RELATED PARTIES AND EACH OF THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”). EACH OF THE RELEASING PARTIES HEREBY VOLUNTARILY AND KNOWINGLY, FOR VALUABLE CONSIDERATION RECEIVED, RELEASES AND FOREVER DISCHARGES THE RELEASED PARTIES FROM ALL POSSIBLE CAUSES OF ACTION (AS DEFINED ABOVE) WHICH ANY OF THE RELEASING PARTIES MAY NOW HAVE AGAINST THE RELEASED PARTIES, IF ANY, INCLUDING, WITHOUT LIMITATION, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION AND EXECUTION OF THIS AMENDMENT.

[SIGNATURES BEGIN ON NEXT PAGE]

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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written.

MCDERMOTT TECHNOLOGY (AMERICAS), INC., as Borrower

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

MCDERMOTT TECHNOLOGY (US), INC., as Borrower

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

MCDERMOTT TECHNOLOGY, B.V., as Borrower

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Attorney

MCDERMOTT INTERNATIONAL, INC., as Parent

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Vice President, Treasurer

DIP Credit Agreement - Amendment No. 1

CB&I BRAZIL HOLDINGS, INC. CB&I ENERGY SERVICES, LLC CB&I FABRICATION, LLC CB&I GROUP INC. CB&I HOLDCO INTERNATIONAL, LLC CB&I HOLDCO, LLC CB&I INTERNATIONAL, INC. CB&I INTERNATIONAL, LLC CB&I LAKE CHARLES, L.L.C. CB&I OFFSHORE SERVICES, INC. CB&I POWER INTERNATIONAL, INC. CB&I POWER, LLC CB&I RIO GRANDE HOLDINGS, L.L.C. CB&I RIO GRANDE VALLEY FABRICATION & MANUFACTURING, L.L.C. CB&I WALKER LA, L.L.C. INTERNATIONAL CONSULTANTS, L.L.C. J. RAY HOLDINGS, INC. MCDERMOTT, INC. PIKE PROPERTIES II, INC. SHAW ENERGY SERVICES, INC. SHAW FABRICATORS, INC. SHAW HOME LOUISIANA, LLC SHAW JV HOLDINGS, L.L.C. SHAW MANAGED SERVICES, LLC SHAW NUCLEAR ENERGY HOLDINGS (UK), INC. SHAW POWER DELIVERY SYSTEMS, INC. SHAW POWER SERVICES, LLC SHAW PROCESS FABRICATORS, INC. SHAW SERVICES, L.L.C. SHAW SSS FABRICATORS, INC.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Assistant Treasurer

DIP Credit Agreement - Amendment No. 1

CATALYTIC DISTILLATION TECHNOLOGIES CB&I INTERNATIONAL ONE, LLC CBI SERVICES, LLC CHEMICAL RESEARCH & LICENSING, LLC EDS EQUIPMENT COMPANY, LLC LUMMUS CONSULTANTS INTERNATIONAL, LLC S C WOODS, L.L.C. SHAW FAR EAST SERVICES, LLC SHAW POWER SERVICES GROUP, L.L.C. CB&I STORAGE TANK SOLUTIONS LLC CB&I STS DELAWARE LLC CB&I STS HOLDINGS LLC CBI COMPANY LTD. CSA TRADING COMPANY LTD. OCEANIC CONTRACTORS, INC. SHAW NC COMPANY, INC.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorized Person

DIP Credit Agreement - Amendment No. 1

SHAW BENECO, INC. SHAW MANAGEMENT SERVICES ONE, INC. SHAW TRANSMISSION & DISTRIBUTION SERVICES, INC. SHAW INTERNATIONAL MANAGEMENT SERVICES TWO, INC. SHAW POWER TECHNOLOGIES, INC.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Assistant Treasurer

DIP Credit Agreement - Amendment No. 1

HYDRO MARINE SERVICES, INC. J. RAY MCDERMOTT INTERNATIONAL, INC. J. RAY MCDERMOTT, S.A. MCDERMOTT (AMAZON CHARTERING), INC. MCDERMOTT GULF OPERATING COMPANY, INC. MCDERMOTT INTERNATIONAL MANAGEMENT, S. DE RL. MCDERMOTT INTERNATIONAL TRADING CO., INC. MCDERMOTT INTERNATIONAL VESSELS, INC. J. RAY MCDERMOTT FAR EAST, INC. J. RAY MCDERMOTT UNDERWATER SERVICES, INC. MCDERMOTT CASPIAN CONTRACTORS, INC. MCDERMOTT INTERNATIONAL INVESTMENTS CO., INC. MCDERMOTT MIDDLE EAST, INC. MCDERMOTT OLD JV OFFICE, INC. MCDERMOTT OVERSEAS, INC. MCDERMOTT SUBSEA, INC. EASTERN MARINE SERVICES, INC. MCDERMOTT OFFSHORE SERVICES COMPANY, INC. NORTH ATLANTIC VESSEL, INC.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

CBI PANAMA, S.A.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorized Person

DIP Credit Agreement - Amendment No. 1

Executed as a Deed by CB&I MIDDLE EAST HOLDING, INC.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed as a Deed by ENVIRONMENTAL SOLUTIONS (CAYMAN) LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

DIP Credit Agreement - Amendment No. 1

Executed as a Deed by ENVIRONMENTAL SOLUTIONS HOLDING LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed as a Deed by ENVIRONMENTAL SOLUTIONS LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorized Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed as a Deed by HIGHLAND TRADING COMPANY, LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorized Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

DIP Credit Agreement - Amendment No. 1

Executed as a Deed by OASIS SUPPLY COMPANY, LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorized Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed as a Deed by SHAW E & I INTERNATIONAL LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed as a Deed by SHAW OVERSEAS (MIDDLE EAST) LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

DIP Credit Agreement - Amendment No. 1

Executed as a Deed by J. RAY MCDERMOTT INTERNATIONAL VESSELS, LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed as a Deed by MCDERMOTT CAYMAN LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Assistant Treasurer

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed as a Deed by OFFSHORE PIPELINES INTERNATIONAL, LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Assistant Treasurer

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

DIP Credit Agreement - Amendment No. 1

J. RAY MCDERMOTT (NORWAY), AS

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

DIP Credit Agreement - Amendment No. 1

CB&I CANADA LTD. HORTON CBI, LIMITED LUTECH RESOURCES CANADA LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorized Person

DIP Credit Agreement - Amendment No. 1

MCDERMOTT TECHNOLOGY, B.V. CB&I COJAFEX B.V. CB&I EUROPE B.V. CB&I HOLDINGS B.V. CB&I POWER COMPANY B.V. CB&I RUSLAND B.V. CBI COMPANY B.V. CBI COMPANY TWO B.V. CHICAGO BRIDGE & IRON COMPANY B.V. COMET II B.V. LEALAND FINANCE COMPANY B.V. LUMMUS TECHNOLOGY B.V. LUTECH PROJECT SOLUTIONS B.V. LUTECH PROJECTS B.V. MCDERMOTT TECHNOLOGY (2), B.V. MCDERMOTT TECHNOLOGY (3), B.V. NETHERLANDS OPERATING COMPANY B.V.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Attorney

DIP Credit Agreement - Amendment No. 1

NOVOLEN TECHNOLOGY HOLDINGS C.V. By: McDermott Technology (3), B.V., acting in its capacity as general partner

/s/ Kevin Hargrove Name: Kevin Hargrove Title: Attorney

DIP Credit Agreement - Amendment No. 1

Executed by McDermott Australia Pty. Ltd. ACN 002 736 352 in accordance with section 127(1) of the Corporations Act 2001 (Cth) by authority of its directors:

/s/ Vassily Calligeros...... /s/ Ian F. Prescott ...... Signature of director Signature of director/company secretary Vassily Calligeros...... Ian F. Prescott ...... Name of director (print) Name of director/company secretary (print) Executed by J. Ray McDermott (Aust.) Holding Pty. Limited. ACN 002 797 668 in accordance with section 127(1) of the Corporations Act 2001 (Cth) by authority of its directors:

/s/ Vassily Calligeros ...... /s/ Ian F. Prescott...... Signature of director Signature of director/company secretary Vassily Calligeros...... Ian F. Prescott...... Name of director (print) Name of director/company secretary (print) Executed by CBI Constructors Pty Ltd ACN 000 612 411 in accordance with section 127(1) of the Corporations Act 2001 (Cth) by authority of its directors:

DIP Credit Agreement - Amendment No. 1

CHICAGO BRIDGE & IRON (ANTILLES) N.V. MC DERMOTT INTERNATIONAL MARINE INVESTMENTS N.V. MC DERMOTT OVERSEAS INVESTMENT CO. N.V. VARSY INTERNATIONAL N.V.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Attorney

DIP Credit Agreement - Amendment No. 1

SIGNED AND DELIVERED for and on behalf of and as the deed of CB & I FINANCE COMPANY LIMITED by its lawfully appointed attorney

KEVIN HARGROVE Kevin Hargrove in the presence of: Attorney

(Signature of Witness): /s/ Traci Brown

(Name of Witness): Traci Brown

(Address of Witness): 757 N. Eldridge Parkway Houston, Texas 77079

(Occupation of Witness): Paralegal

DIP Credit Agreement - Amendment No. 1

Executed and Delivered as a Deed by AITON & CO LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed and Delivered as a Deed by CB&I CONSTRUCTORS LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed and Delivered as a Deed by CB&I GROUP UK HOLDINGS

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

DIP Credit Agreement - Amendment No. 1

Executed and Delivered as a Deed by CB&I HOLDINGS (UK) LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed and Delivered as a Deed by CB&I LONDON

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed and Delivered as a Deed by CB&I PADDINGTON LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

DIP Credit Agreement - Amendment No. 1

Executed and Delivered as a Deed by CB&I POWER LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed and Delivered as a Deed by CB&I UK LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed and Delivered as a Deed by CB&I (US) HOLDINGS, LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

DIP Credit Agreement - Amendment No. 1

Executed and Delivered as a Deed by CBI UK CAYMAN ACQUISITION LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed and Delivered as a Deed by LUMMUS CONSULTANTS INTERNATIONAL LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed and Delivered as a Deed by LUTECH RESOURCES LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

DIP Credit Agreement - Amendment No. 1

Executed and Delivered as a Deed by OXFORD METAL SUPPLY LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

DIP Credit Agreement - Amendment No. 1

Executed and Delivered as a Deed by PIPEWORK ENGINEERING AND DEVELOPMENTS LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed and Delivered as a Deed by SHAW DUNN LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

DIP Credit Agreement - Amendment No. 1

Executed and Delivered as a Deed by SHAW GROUP UK LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed and Delivered as a Deed by WHESSOE PIPING SYSTEMS LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

DIP Credit Agreement - Amendment No. 1

Executed and Delivered as a Deed by MCDERMOTT HOLDINGS (U.K.) LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

Executed and Delivered as a Deed by MCDERMOTT MARINE CONSTRUCTION LIMITED

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorised Person

Witnessed

By: /s/ Traci Brown Name: Traci Brown Title: Paralegal

DIP Credit Agreement - Amendment No. 1

CBI EASTERN ANSTALT

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorized Person

DIP Credit Agreement - Amendment No. 1

J. RAY MCDERMOTT DE MÉXICO, S.A. DE C.V. MCDERMOTT MARINE MÉXICO, S.A. DE C.V. SERVICIOS DE FABRICACIÓN DE ALTAMIRA, S.A. DE C.V. SERVICIOS PROFESIONALES DE ALTAMIRA, S.A. DE C.V. CB&I MATAMOROS, S. DE R. L. DE C.V.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

CHICAGO BRIDGE DE MÉXICO, S.A. DE C.V.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorized Person

DIP Credit Agreement - Amendment No. 1

CB&I NEDERLAND B.V. CB&I OIL & GAS EUROPE B.V. LUMMUS TECHNOLOGY HEAT TRANSFER B.V. LUTECH RESOURCES B.V.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Attorney

DIP Credit Agreement - Amendment No. 1

CHARTERING COMPANY (SINGAPORE) PTE. LTD J. RAY MCDERMOTT (QINGDAO) PTE. LTD. MCDERMOTT ASIA PACIFIC PTE. LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Assistant Treasurer

CB&I GLOBAL OPERATIONS INTERNATIONAL, PTE. LTD. CB&I GLOBAL OPERATIONS US PTE. LTD. CB&I SINGAPORE PTE. LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorized Person

DIP Credit Agreement - Amendment No. 1

CB&I EL DORADO, INC. CBI HOLDCO TWO INC. CB&I LLC CONSTRUCTORS INTERNATIONAL, L.L.C. CHICAGO BRIDGE & IRON COMPANY HOWE-BAKER ENGINEERS, LTD. CHICAGO BRIDGE & IRON COMPANY HOWE-BAKER HOLDINGS, L.L.C. J. RAY MCDERMOTT TECHNOLOGY, INC. HOWE-BAKER INTERNATIONAL MANAGEMENT, LUMMUS GASIFICATION TECHNOLOGY LICENSING LLC LLC MCDERMOTT BLACKBIRD HOLDINGS, LLC HOWE-BAKER INTERNATIONAL, L.L.C. MCDERMOTT INVESTMENTS, LLC HOWE-BAKER MANAGEMENT, L.L.C. OPI VESSELS, INC. J. RAY MCDERMOTT SOLUTIONS, INC. 850 PINE STREET LLC LUMMUS TECHNOLOGY INTERNATIONAL LLC A & B BUILDERS, LTD. LUMMUS TECHNOLOGY LLC ASIA PACIFIC SUPPLY CO. LUMMUS TECHNOLOGY OVERSEAS LLC ATLANTIC CONTINGENCY CONSTRUCTORS II, LLC LUMMUS TECHNOLOGY SERVICES LLC ATLANTIS CONTRACTORS INC. LUMMUS TECHNOLOGY VENTURES LLC CB&I CLEARFIELD, INC. MATRIX ENGINEERING, LTD. CB&I CONNECTICUT, INC. MATRIX MANAGEMENT SERVICES, LLC CB&I FINANCIAL RESOURCES LLC MCDERMOTT ENGINEERING, LLC CB&I GLOBAL, L.L.C. MCDERMOTT SUBSEA ENGINEERING, INC. CB&I HOUSTON 06 LLC NUCLEAR ENERGY HOLDINGS, L.L.C. CB&I HOUSTON 07 LLC PROSPECT INDUSTRIES (HOLDINGS) INC. CB&I HOUSTON 08 LLC SHAW CONNEX, INC. CB&I HOUSTON 09 LLC SHAW INTERNATIONAL INC. CB&I HOUSTON 10 LLC SHAW TRANSMISSION & DISTRIBUTION SERVICES CB&I HOUSTON 11 LLC INTERNATIONAL, INC. CB&I HOUSTON 12 LLC SPARTEC, INC. CB&I HOUSTON 13 LLC TVL LENDER II, INC. CB&I HOUSTON LLC CB&I PROJECT SERVICES GROUP, LLC CB&I TYLER LLC CBI OVERSEAS, LLC CBI AMERICAS LTD. LUTECH RESOURCES INC. CBI OVERSEAS (FAR EAST) INC. MCDERMOTT TECHNOLOGY, LLC CBI US HOLDING COMPANY INC. CENTRAL TRADING COMPANY LTD. HBI HOLDINGS, LLC CB&I LAURENS, INC. CB&I NORTH CAROLINA, INC. CHICAGO BRIDGE & IRON COMPANY (DELAWARE)

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

DIP Credit Agreement - Amendment No. 1

J. RAY MCDERMOTT HOLDINGS, LLC MCDERMOTT FINANCE L.L.C.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Vice President, Treasurer

DIP Credit Agreement - Amendment No. 1

MCDERMOTT SERVIÇOS OFFSHORE DO BRASIL LTDA.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Attorney

DIP Credit Agreement - Amendment No. 1

ARABIAN CBI CO. LTD. ARABIAN CBI TANK MANUFACTURING CO. LTD. LUMMUS ARABIA LTD. CO.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Authorized Person

DIP Credit Agreement - Amendment No. 1

MCDERMOTT EASTERN HEMISPHERE, LTD.

By: /s/ Kevin Hargrove Name: Kevin Hargrove Title: Treasurer

DIP Credit Agreement - Amendment No. 1

LENDERS: CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Revolving Lender

By: /s/ Ronald E. Spitzer Name: Ronald E. Spitzer Title: Managing Director

By: /s/ Pierre Bennnaim Name: Pierre Bennnaim Title: Managing Director

DIP Credit Agreement - Amendment No. 1

ROYAL BANK OF CANADA, as a Revolving Lender

By: /s/ H. Christopher DeCotiis Name: H. Christopher DeCotiis Title: Authorized Signatory

DIP Credit Agreement - Amendment No. 1

BARCLAYS BANK PLC, as a Revolving Lender

By: /s/ Marc Glogoff Name: Marc Glogoff Title: Managing Director

ABN AMRO CAPITAL USA LLC, as a Revolving Lender,

By: /s/ Hugo Diogo Name: H. Diogo Title: Executive Director

By: /s/ Francis Ballard, Jr. Name: Francis Ballard, Jr. Title: Director

DIP Credit Agreement - Amendment No. 1

GOLDMAN SACHS BANK USA, as a Revolving Lender

By: /s/ Jamie Minieri Name: Jamie Minieri Title: Authorized Signatory

DIP Credit Agreement - Amendment No. 1

ADMINISTRATIVE AGENT: BARCLAYS BANK PLC, as Term Loan Administrative Agent

By: /s/ Gary Sultan Name: Gary Sultan Title: Managing Director

DIP Credit Agreement - Amendment No. 1

[Term Lender Signature Pages on File with the Term Loan Administrative Agent]

DIP Credit Agreement - Amendment No. 1 Exhibit 10.35 MCDERMOTT INTERNATIONAL, INC.

Personal and Confidential

October 17, 2019

Re: Retention Bonus

Dear [●]:

On behalf of McDermott International, Inc. (the “Company”), I am pleased to offer you the opportunity to receive a cash retention bonus if you agree to the terms and conditions contained in this letter agreement (this “Agreement”), which will be effective as of the date you execute and return a copy of this Agreement to the Company (such date, the “Effective Date”). Capitalized terms used but not otherwise defined herein will have the meaning ascribed to such terms in Section 2.

1. Retention Bonus. Subject to the terms and conditions set forth herein, you will receive a cash lump sum payment in the amount of $[●] (the “Retention Bonus”) within thirty (30) days of the Effective Date. You agree that in the event your employment with the Company Group terminates for any reason other than a Qualifying Termination before December 31, 2020 (the “Completion Date”), you will be required to repay to the Company Group within thirty (30) days of such termination 100% of the After- Tax Value of the Retention Bonus. For the sake of clarity, you will not be required to repay any portion of the Retention Bonus if you are employed by the Company Group on the Completion Date.

2. Definitions. For purposes of this Agreement:

“After-Tax Value of the Retention Bonus” means the aggregate amount of the Retention Bonus net of any taxes you are required to pay in respect thereof and determined taking into account any tax benefit that may reasonably be available in respect of such repayment. The Company Group will determine in good faith the After-Tax Value of the Retention Bonus, which determination will be conclusive and binding.

“Cause” means “Cause” as defined in any employment, change-in-control or severance agreement between you and the Company Group or in any severance plan of the Company Group in which you participate, or, if no such agreement or plan exists or such term is not defined therein, “Cause” means your (i) material and intentional breach of your duties and responsibilities, which is not remedied promptly after the Company gives you written notice specifying such breach, (ii) commission of a felony, (iii) commission of or engaging in any act of fraud, embezzlement, theft, a material breach of trust or any material act of dishonesty involving the Company Group or (iv) significant violation of the code of conduct of the Company Group or of any statutory or common law duty of loyalty to the Company Group.

“Company Group” means the Company and its direct and indirect affiliates and subsidiaries.

1 “Disability” means “Disability” as defined in any employment, change-in-control or severance agreement between you and the Company Group or in any severance plan of the Company Group in which you participate, or, if no such agreement or plan exists or such term is not defined therein, “Disability” means your inability, due to physical or mental incapacity, to perform the essential functions of your job, for two hundred seventy (270) consecutive days.

“Good Reason” means “Good Reason” as defined in any employment, change-in-control or severance agreement between you and the Company Group or in any severance plan of the Company Group in which you participate, or, if no such agreement or plan exists or such term is not defined therein, “Good Reason” means any of the following, in each case, without your consent: (i) a change in your title or any material diminution of your responsibilities or authority or the assignment of any duties inconsistent with your position, in each case, compared to what was in effect as of the Effective Date; (ii) a reduction of your annual base salary and/or target bonus as in effect on the Effective Date; or (iii) a relocation of your principal office location more than fifty (50) miles from the Company’s offices at which you are based as of the Effective Date (except for required travel on the Company’s business to an extent substantially consistent with your business travel obligations as of the Effective Date). Notwithstanding the foregoing, the occurrence of an event that would otherwise constitute Good Reason will cease to be an event constituting Good Reason upon any of the following: (x) your failure to provide written notice to the Company within thirty (30) days of the first occurrence of such event; (y) substantial correction of such occurrence by the Company within thirty (30) days following receipt of your written notice described in (x); or (z) your failure to actually terminate employment within the ten (10) day period following the expiration of the Company’s thirty (30)-day cure period.

“Qualifying Termination” means the termination of your employment before the Completion Date (i) by the Company Group for a reason other than Cause, (ii) by you for Good Reason, or (iii) due to your death or Disability if, and only if, you execute and do not revoke a customary general release of claims that is reasonably satisfactory to the Company Group (the “Release”), and such Release becomes irrevocable, within 60 days of your termination, in which case the effective date of the Qualifying Termination will be deemed to have occurred on your date of termination. For the sake of clarity, a termination of employment will not be a Qualifying Termination if you do not execute, or if you revoke, the Release, in which case you will be required to repay the After-Tax Value of the Retention Bonus within ten (10) days after the expiration of the 60-day period.

3. Withholding Taxes. The Company Group may withhold from any and all amounts payable to you hereunder such federal, state and local taxes as the Company Group determines in its sole discretion may be required to be withheld pursuant to any applicable law or regulation.

4. No Right to Continued Employment. Nothing in this Agreement will confer upon you any right to continued employment with the Company Group (or their respective successors) or to interfere in any way with the right of the Company Group (or their respective successors) to terminate your employment at any time.

2 5. Other Benefits. The Retention Bonus is a special payment to you and will not be taken into account in computing the amount of salary or compensation for purposes of determining any bonus, incentive, pension, retirement, death or other benefit under any other bonus, incentive, pension, retirement, insurance or other employee benefit plan of the Company Group, unless such plan or agreement expressly provides otherwise.

6. Governing Law. This Agreement will be governed by, and construed under and in accordance with, the internal laws of the State of Texas, without reference to rules relating to conflicts of laws.

7. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.

8. Entire Agreement; Amendment. This Agreement constitutes the entire agreement between you and the Company Group with respect to the Retention Bonus and supersedes any and all prior agreements or understandings between you and the Company Group with respect to the Retention Bonus, whether written or oral. This Agreement may be amended or modified only by a written instrument executed by you and the Company Group.

9. Section 409A Compliance. The intent of the parties is that the Retention Bonus be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the regulations and guidance promulgated thereunder, and accordingly, to the maximum extent permitted, this Agreement will be interpreted in a manner consistent therewith.

10. Administration. The Company Group will have full power and authority to construe and interpret this Agreement, and any interpretation by the Company Group will be binding on you and your representatives and will be accorded the maximum deference permitted by law. The Company Group, in its sole discretion, will have the right to modify, supplement, suspend or terminate this Agreement at any time; provided that, except as required by law, in no event will any amendment or termination adversely affect your rights without your prior written consent. Subject to the foregoing, this Agreement will terminate upon the satisfaction of all obligations of the Company Group or its successor entities hereunder.

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3 This Agreement is intended to be a binding obligation on you and the Company Group. If this Agreement accurately reflects your understanding as to the terms and conditions of the Retention Bonus, please sign, date, and return to me one copy of this Agreement. You should make a copy of the executed Agreement for your records.

Very truly yours,

MCDERMOTT INTERNATIONAL, INC.

The above terms and conditions accurately reflect our understanding regarding the terms and conditions of the Retention Bonus, and I hereby confirm my agreement to the same.

Dated: ______

Signed: ______

Signature Page to Agreement

Exhibit 10.36 MCDERMOTT INTERNATIONAL, INC.

Personal and Confidential

October 17, 2019

Re: Retention Bonus

Dear [●]:

On behalf of McDermott International, Inc. (the “Company”), I am pleased to offer you the opportunity to receive a cash retention bonus in the aggregate amount of $[ ● ] (the “Retention Bonus”), if you agree to the terms and conditions contained in this letter agreement (this “Agreement”), which will be effective as of the date you execute and return a copy of this Agreement to the Company (such date, the “Effective Date”). Capitalized terms used but not otherwise defined herein will have the meaning ascribed to such terms in Section 2.

1. Retention Bonus. Subject to the terms and conditions set forth herein and your continued and uninterrupted employment with the Company Group through each applicable payment date, the Retention Bonus will be payable as follows: (i) 1/3rd of the Retention Bonus will be paid on the Effective Date (the “First Retention Payment”), (ii) 1/3rd of the Retention Bonus will be paid on the Tranche B Funding Date (the “Second Retention Payment”) and (iii) 1/3rd of the Retention Bonus will be paid on the Tranche C Funding Date (the “Third Retention Payment”). Notwithstanding anything to the contrary contained herein, in the event of either your Qualifying Termination or the Company’s good faith determination (in consultation with Company Counsel) that the Company is likely to commence a voluntary proceeding under chapter 11 of title 11 of the United States Code (the “Chapter 11 Determination Date”), you will be paid any unpaid portion of the Retention Bonus immediately following either your Qualifying Termination date or the Chapter 11 Determination Date, as applicable. You further agree that in the event your employment with the Company Group terminates for any reason other than due to a Qualifying Termination, you will be obligated to repay to the Company Group within thirty (30) days of such termination a portion of the After-Tax Value of the Retention Bonus previously paid as follows: (i) the after-tax value of the First Retention Payment if such termination occurs prior to the six (6)-month anniversary of the Effective Date, (ii) the after-tax value of the Second Retention Payment if such termination occurs after the Tranche B Funding Date but prior to the six (6) month anniversary of the Tranche B Funding Date, (iii) and the after-tax value of the Third Retention Payment if such termination occurs after the Tranche C Funding Date but prior to December 31, 2020 (the “Completion Date”). For the sake of clarity, you will not be required to repay any portion of the Retention Bonus if you are employed by the Company Group on the Completion Date.

1 KE-64742104.5 Exhibit 10.36 2. Definitions. For purposes of this Agreement:

“Credit Agreement” means that certain Superpriority Senior Secured Credit Agreement dated as of October [●], 2019, by and among McDermott Technology (Americas), Inc., a Delaware corporation, as borrower, McDermott Technology (US), Inc., a Delaware corporation, as borrower, and McDermott Technology, B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, as borrower, McDermott International, Inc., a Panamanian corporation, the financial institutions from time to time party thereto as lenders, Credit Agricole Corporate and Investment Bank, as administrative agent for the Revolving Facility (as defined in the Credit Agreement), and as collateral agent, and Barclays Bank PLC, as administrative agent for the Term Facility (as defined in the Credit Agreement) (as amended, restated, supplemented or otherwise modified from time to time)

“Company Group” means the Company and its direct and indirect affiliates and subsidiaries.

“Disability” means “Disability” as defined in any employment, change-in-control or severance agreement between you and the Company Group or in any severance plan of the Company Group in which you participate, or, if no such agreement or plan exists or such term is not defined therein, “Disability” means your inability, due to physical or mental incapacity, to perform the essential functions of your job, for two hundred seventy (270) consecutive days.

2 than fifty (50) miles from the Company’s offices at which you are based as of the Effective Date (except for required travel on the Company’s business to an extent substantially consistent with your business travel obligations as of the Effective Date). Notwithstanding the foregoing, the occurrence of an event that would otherwise constitute Good Reason will cease to be an event constituting Good Reason upon any of the following: (x) your failure to provide written notice to the Company within thirty (30) days of the first occurrence of such event; (y) substantial correction of such occurrence by the Company within thirty (30) days following receipt of your written notice described in (x); or (z) your failure to actually terminate employment within the ten (10) day period following the expiration of the Company’s thirty (30)-day cure period. Notwithstanding the foregoing, for the purposes of this Agreement, Good Reason, whether defined herein or in any employment, change-in-control or severance agreement between you and the Company Group or in any severance plan of the Company Group in which you participate, will not exist under this Agreement due to any diminution in your duties related to the appointment of a CTO.

“Tranche B Funding Date” has the meaning set forth in the Credit Agreement.

“Tranche C Funding Date” has the meaning set forth in the Credit Agreement.

5. Other Benefits. The Retention Bonus is a special payment to you and will not be taken into account in computing the amount of salary or compensation for purposes of determining any bonus, incentive, pension, retirement, death or other benefit under any other bonus, incentive, pension, retirement, insurance or other employee benefit plan of the Company Group, unless such plan or agreement expressly provides otherwise.

6. Governing Law. This Agreement will be governed by, and construed under and in accordance with, the internal laws of the State of Texas, without reference to rules relating to conflicts of laws.

3 7. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.

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4 This Agreement is intended to be a binding obligation on you and the Company Group. If this Agreement accurately reflects your understanding as to the terms and conditions of the Retention Bonus, please sign, date, and return to me one copy of this Agreement. You should make a copy of the executed Agreement for your records.

Very truly yours,

MCDERMOTT INTERNATIONAL, INC.

The above terms and conditions accurately reflect our understanding regarding the terms and conditions of the Retention Bonus, and I hereby confirm my agreement to the same.

Dated: ______

______

Signature Page to Agreement

Exhibit 10.52

MCDERMOTT INTERNATIONAL, INC. 2020 KEY EMPLOYEE RETENTION PLAN

1. Purpose. This McDermott International, Inc. 2020 Key Employee Retention Plan (the “Plan”) is designed to align the interests of McDermott International, Inc. (the “Company”) and eligible key employees of the Company.

2. Effective Date. The Company, intending to be legally bound, hereby adopts the Plan effective as of January 1, 2020 (the “Effective Date”). The Plan will continue from the Effective Date until December 31, 2020, unless earlier terminated by the Company in accordance with Section 7(e) (the “Term”). The expiration of the Term shall not in any event reduce or adversely affect any amounts due to any Participant hereunder.

3. General. The compensation provided under the Plan is intended to be in addition to all other compensation payable to Participants under any employment agreement or incentive plan or program in effect with the Company Group.

4. Definitions. For purposes of this Plan:

“Board” means the Company’s Board of Directors.

“Cause” means, with respect to a Participant, “Cause” as defined in any employment agreement between the Participant, on the one hand, and the Company or any of its subsidiaries, on the other hand, or, if no such agreement exists or such term is not defined therein, means any of the Participant’s (a) continued failure to perform substantially the Participant’s duties with the Company Group (occasioned by reason other than the Participant’s physical or mental illness, death, or Disability) after a written demand for substantial performance is delivered to the Participant by the Senior Vice President, Chief Human Resources Officer, which specifically identifies the manner in which the Senior Vice President, Chief Human Resources Officer or the Chief Executive Officer believes that the Participant has not substantially performed his or her duties, after which he or she shall have 30 days to defend or remedy such failure to substantially perform his or her duties, (b) the Participant engaging in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company Group, or (c) the Participant’s conviction of, with no further possibility of appeal for, or the Participant’s plea of guilty or nolo contendere to, any felony.

“Code” means the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder.

“Committee” means the Compensation Committee of the Board.

“Company Group” means the Company and its direct and indirect affiliates and subsidiaries.

KE 6455075

“Disability” means, with respect to a Participant, “Disability” as defined in any employment agreement between the Participant, on the one hand, and the Company and any of its subsidiaries, on the other hand, or, if no such agreement exists or such term is not defined therein, means a “permanent and total disability” within the meaning of Section 22(e)(3) of the Code, as determined by the Senior Vice President, Chief Human Resources Officer in good faith, upon receipt of medical advice that the Senior Vice President, Chief Human Resources Officer deems sufficient and competent, from one or more individuals selected by the Senior Vice President, Chief Human Resources Officer who are qualified to provide professional medical advice.

“Effective Date” has the meaning set forth in Section 2.

“Emergence Date” means the effective date of the Plan of Reorganization.

“Participant” has the meaning set forth in Section 5.

“Participation Period” means each successive calendar quarter commencing during the Term. For the sake of clarity, the first Participation Period is January 1, 2020 through March 31, 2020, the second Participation Period is the April 1, 2020 through June 30, 2020, the third Participation Period is July 1, 2020 through September 30, 2020, and the fourth Participation Period is the October 1, 2020 through December 31, 2020.

“Plan” has the meaning set forth in Section 1.

“Plan of Reorganization” means the Chapter 11 Plan of Reorganization of McDermott International, Inc. and its Debtor Affiliates, as finally approved by the U.S. Bankruptcy Court.

“Qualifying Termination” means a termination of a Participant’s employment with the Company and its subsidiaries due to death or Disability or by the Company without Cause.

“Quarterly Retention Opportunity” means, in the case of any Participant, (a) the incentive payable to such Participant under the Plan for the applicable Participation Period, as determined by the Company at the time of the Participant’s selection to participate in the Plan and (b) to the extent the Company implements an equity incentive plan following the Emergence Date and the Participant is eligible to participate in such plan and granted an award thereunder in accordance with allocation schedule set forth in the Plan of Reorganization, then, for each Participation Period starting after the date on which such award is granted, the Participant’s annual target bonus opportunity for 2019.

“Section 409A” means Section 409A of the Code.

“Term” has the meaning set forth in Section 2.

5. Eligible Participants. Each person designated by the Committee from time to time shall be a “Participant” under the Plan and eligible to receive a Quarterly Retention Opportunity with respect to each Participation Period.

6. Term of Participation.

(a) Subject to the provisions of the Plan and any participation agreement granted hereunder, each Participant shall earn a Quarterly Retention Opportunity as of the end of each Participation Period so long as the Participant remains employed by the Company Group through the end of the applicable Participation Period. Notwithstanding the foregoing, if a Participant incurs a Qualifying Termination prior to the end of a Participation Period, such Participant shall be entitled to receive the full Quarterly Retention Opportunity for such Participation Period.

(b) The Participant shall not be eligible to earn a Quarterly Retention Opportunity with respect to any calendar quarter that commences following the end of the Term.

(c) Any Quarterly Retention Opportunity required to be made under the Plan shall be paid on a fully vested basis by the Company as soon as possible after the end of the applicable Participation Period and in no event later than 45 days following the end of the applicable Participation Period (or, if the Participant becomes entitled to such Quarterly Retention Opportunity as a result of a Qualifying Termination prior to the end of a Participation Period, then as soon as possible after such Qualifying Termination and in no event later than 30 days following such Qualifying Termination).

7. Plan Administration. The Plan shall be administered by the Company. The Company is given full authority and discretion within the limits of the Plan to establish such administrative measures as may be necessary to administer and attain the objectives of the Plan. The Company shall have full power and authority to construe and interpret the Plan and any interpretation by the Company shall be binding on all Participants and shall be accorded the maximum deference permitted by law.

(a) All rights and interests of Participants under the Plan shall be non-assignable and nontransferable, and otherwise not subject to pledge or encumbrance, whether voluntary or involuntary, other than by will or by the laws of descent and distribution. In the event of any sale, transfer, or other disposition of all or substantially all of the Company’s assets or business, whether by merger, stock sale, consolidation, or otherwise, the Company may assign the Plan.

(b) Any payment to a Participant in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Company Group, and the Company may require Participant, as a condition precedent to such payment, to execute a receipt and release to such effect.

(c) Payment of amounts due under the Plan shall be provided to a Participant in the same manner as such Participant receives his or her regular paycheck or by mail at the last known address of such Participant in the possession of the Company. The Company will deduct all applicable taxes and any other withholdings required to be withheld with respect to the payment of any award pursuant to the Plan.

(d) The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to ensure the payment of any award provided for hereunder. Quarterly Retention Opportunity payments shall not be considered as extraordinary, special incentive compensation, and it will not be included as “earnings,” “wages,” “salary,” or “compensation” in any pension, welfare, life insurance, or other employee benefit plan or arrangement of the Company Group.

(e) The Company, in its sole discretion, will have the right to modify, supplement, suspend, or terminate the Plan at any time; provided that, except as required by law, the Plan may not be amended or terminated in any way adverse to any Participant unless (i) Committee obtains the prior written consent of the affected Participants or (ii) the Committee reasonably determines such change is reasonably necessary to obtain any governmental (including court) approvals required to make the Plan effective before the Emergence Date; and provided, further, that, on and following the Emergence Date and prior to the end of the Term, the Plan shall not be terminated without the consent of all Participants in the Plan.

(f) Nothing contained in the Plan shall in any way affect the right and power of the Company to discharge any Participant or otherwise terminate his or her employment at any time or for any reason or to change the terms of his or her employment in any manner.

(g) Except as otherwise provided under the Plan, any expense incurred in administering the Plan shall be borne by the Company.

(h) Captions preceding the sections hereof are inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision hereof.

(i) The administration of the Plan shall be governed by the laws of the State of Texas, without regard to the conflict of law principles of any state. Any persons or corporations who now are or shall subsequently become parties to the Plan shall be deemed to consent to this provision.

(j) The Plan is intended to either comply with, or be exempt from, the requirements of Section 409A. To the extent that the Plan is not exempt from the requirements of Section 409A, the Plan is intended to comply with the requirements of Section 409A and shall be limited, construed, and interpreted in accordance with such intent. Notwithstanding the foregoing, in no event whatsoever shall the Company be liable for any additional tax, interest, income inclusion, or other penalty that may be imposed on a Participant by Section 409A or for damages for failing to comply with Section 409A.

****

IN WITNESS WHEREOF, the Company has caused the Plan to be signed by its duly authorized officer as of the date first set forth above.

MCDERMOTT INTERNATIONAL, INC.

By: /s/ Tosha Perkins Name: Tosha Perkins Title: Senior Vice President, Chief Human Resources Officer

[Signature Page to 2020 Key Employee Retention Plan] Exhibit 10.53 MCDERMOTT INTERNATIONAL, INC. 2020 KEY EMPLOYEE INCENTIVE PLAN

1. Purpose. This McDermott International, Inc. 2020 Key Employee Incentive Plan (the “Plan”) is designed to align the interests of McDermott International, Inc. (the “Company”) and eligible key employees of the Company.

2. Adoption of the Plan. The Company, intending to be legally bound, hereby adopts the Plan on February 10, 2020 (the “Adoption Date”). The Plan will be effective as of January 1, 2020 (the “Effective Date”) and continue until December 31, 2020, unless earlier terminated by the Company in accordance with Section 8(e) (the “Term”). The expiration or termination of the Term will not in any event reduce or adversely affect any amounts due to any Participant hereunder for any Performance Period ending on or before such date.

4. Definitions. For purposes of this Plan:

“Applicable Percentage” means, with respect to a Performance Metric, the percentage of the Performance Bonus that is payable based on satisfaction of the Performance Goals established by the Committee with respect to such Performance Metric.

“Board” means the Company’s Board of Directors.

“Cause” means, with respect to a Participant, “Cause” as defined in any employment, change-in-control, or severance agreement between the Participant, on the one hand, and any member of the Company Group, on the other hand, or in any severance plan of the Company Group in which the Participant participates, or, if no such agreement or plan exists or such term is not defined therein, means the Participant’s (a) material and intentional breach of the Participant’s duties and responsibilities, which is not remedied promptly after the Company gives the Participant written notice specifying such breach, (b) commission of a felony, (c) commission of or engaging in any act of fraud, embezzlement, theft, a material breach of trust, or any material act of dishonesty involving the Company Group, or (d) significant violation of the code of conduct of the Company Group or of any statutory or common law duty of loyalty to the Company Group.

“Committee” means the Compensation Committee of the Board.

“Company Group” means the Company and its direct and indirect affiliates and subsidiaries.

“Disability” means, with respect to a Participant, “Disability” as defined in any employment, change-in-control, or severance agreement between the Participant, on the one hand, and any member of the Company Group, on the other hand, or in any severance plan of the Company Group in which the Participant participates, or, if no such agreement or plan exists or such term is not defined therein, means the Participant’s inability, due to physical or mental incapacity, to perform the essential functions of the Participant’s job, for 270 consecutive days.

“Emergence Date” means the effective date of the Plan of Reorganization.

“Emergence Performance Bonus” means the bonus payment payable to a Participant under the Plan upon the occurrence of the Emergence Date.

“Emergence Performance Goal” means the threshold, target, and maximum performance goals established by the Committee with respect to each applicable Performance Metric that is measured as of the Emergence Date.

“Good Leaver” means a Participant whose employment with the Company Group is terminated for any reason other than by the Company for Cause or voluntarily by the Participant without Good Reason.

“Good Reason” means, with respect to a Participant, “Good Reason” as defined in any employment, change-in-control, or severance agreement between the Participant, on the one hand, and any member of the Company Group, on the other hand, or in any severance plan of the Company Group in which the Participant participates, or, if no such agreement or plan exists or such term is not defined therein, means any of the following, in each case, without the Participant’s consent: (a) a change in the Participant’s title or any material diminution of the Participant’s responsibilities or authority or the assignment of any duties inconsistent with the Participant’s position, in each case, compared to what was in effect as of the Adoption Date; (ii) a reduction of the Participant’s annual base salary and/or target bonus as in effect on the Adoption Date; or (iii) a relocation of the Participant’s principal office location more than 50 miles from the Company’s offices at which the Participant is based as of the Adoption Date (except for required travel on the Company’s business to an extent substantially consistent with the Participant’s business travel obligations as of the Adoption Date). Notwithstanding the foregoing, the occurrence of an event that would otherwise constitute Good Reason will cease to be an event constituting Good Reason upon any of the following: (i) the Participant’s failure to provide written notice to the Company within 30 days of the first occurrence of such event; (ii) substantial correction of such occurrence by the Company within 30 days following receipt of the Participant’s written notice described in clause (i); or (iii) the Participant’s failure to actually terminate employment within the 10-day period following the expiration of the Company’s 30-day cure period.

“Participant” has the meaning ascribed thereto in Section 5.

“Participation Agreement” means the agreement or notification provided to a Participant granting such Participant the opportunity to earn a Performance Bonus under this Plan.

“Performance Bonus” means each Quarterly Performance Bonus and each Emergence Performance Bonus.

“Performance Goals” means, collectively, the Quarterly Performance Goals and Emergence Performance Goals.

“Performance Metric” means the specific performance criteria used in determining Performance Goals for the Performance Period; provided that each Performance Metric will be adjusted on a pro forma basis to take into account any acquisitions or dispositions consummated during the Performance Period and to the extent relevant, to exclude costs and benefits associated with the Company’s restructuring.

“Performance Period” means (a) each Quarterly Performance Period for Quarterly Performance Goals and (b) the period ending on the Emergence Date for Emergence Performance Goals.

“Plan of Reorganization” means the Chapter 11 Plan of Reorganization of McDermott International, Inc. and its Debtor Affiliates, as finally approved by the U.S. Bankruptcy Court.

“Quarterly Performance Bonus” means the bonus payment payable to a Participant under the Plan for the applicable Quarterly Performance Period.

“Quarterly Performance Goal” means (a) with respect to Quarterly Performance Bonuses payable under Section 6(a)(i), the threshold, target, and maximum performance goals established by the Committee with respect to each applicable Performance Metric; and (b) with respect to the Catch-Up Payments payable pursuant to Section 6(a)(ii), the cumulative threshold, target, and maximum performance goals established by the Committee with respect to each applicable Performance Metric

“Quarterly Performance Period” means each successive calendar quarter commencing during the Term.

“Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended.

“Target Performance Bonus” means, (a) for any Performance Metric measured as of the Emergence Date and each Performance Metric measured during a Quarterly Performance Period starting on or before the Emergence Date, the “target performance bonus” for each Participant as specified in the Participant’s Participation Agreement and (b) to the extent the Company implements an equity incentive plan following the Emergence Date and the Participant is granted an award thereunder in accordance with allocation schedule set forth in the Plan of Reorganization, then, for each Performance Metric measured during a Quarterly Performance Period starting after the date on which such award is granted, the Participant’s annual target bonus opportunity for 2019, as set forth in the Participation Agreement.

“Target Quarterly Performance Bonus” means, for a particular Quarterly Performance Period, 25% of the Participant’s Target Performance Bonus for that Quarterly Performance Period.

5. Eligible Participants. Each person designated by the Committee from time to time and who executes a Participation Agreement will be a “Participant” under the Plan and eligible to receive a Performance Bonus with respect to each Performance Period.

6. Term of Participation.

(a) Quarterly Performance Bonuses.

(i) Single Quarter Measurement. Subject to the provisions of the Plan and any Participation Agreement, each Participant will earn a Quarterly Performance Bonus as of the end of each Quarterly Performance Period, depending upon the extent to which the Quarterly Performance Goals have been achieved for such Quarterly Performance Period.

(ii) Cumulative Measurement. In addition to being measured on a quarterly basis, each Performance Metric subject to quarterly measurement will also be measured cumulatively a s of the end of the second Quarterly Performance Period and each Quarterly Performance Period thereafter (a “Relevant Performance Period”). An additional payment (a “Catch-Up Payment”) will be made to the extent the Company equals or exceeds a cumulative Quarterly Performance Goal for the applicable Relevant Performance Period. With respect to each Relevant Performance Period (other than the final Relevant Performance Period) and each applicable Performance Metric , the amount of the Catch-Up Payment will be equal to the excess of (A) the lesser of (1) the aggregate Quarterly Performance Bonus payable for such Relevant Performance Period and Performance Metric based on the achievement of the applicable cumulative Quarterly Performance Goals for such Relevant Performance Period and Performance Metric and (2) the cumulative Target Quarterly Performance Bonus payable for such Relevant Performance Period and Performance Metric, over (B) the aggregate amount of Quarterly Performance Bonuses previously paid to the Participant and the amount payable to the Participant under Section 6(a) for such Relevant Performance Period and Performance Metric. With respect to the final Relevant Performance Period and each applicable Performance Metric, the amount of the Catch-Up Payment will be equal to the excess of (x) the aggregate Quarterly Performance Bonus payable for such Relevant Performance Period and Performance Metric based on the achievement of the applicable cumulative Quarterly Performance Goals for such Relevant Performance Period and Performance Metric over (y) the aggregate amount of Quarterly Performance Bonuses previously paid to the Participant and the amount payable to the Participant under Section 6(a) for such Relevant Performance Period and Performance Metric.

(iii) Quarter of Emergence. With respect to each Performance Metric subject to quarterly measurement that is designated on Exhibit A attached hereto as an “Accelerated Measurement Metric,” (A) the Quarterly Performance Period in which the Emergence Date occurs shall be truncated to end on the Emergence Date, (B) performance with respect to each such Performance Metric will be measured as of the latest administratively practicable date preceding the Emergence Date, and (C) each Participant shall earn a Quarterly Performance Bonus and, if applicable, Catch-Up Payments in accordance with Sections 6(a)(i) and 6(a)(ii), respectively, subject, in each case, to Section 6(d).

(b) Emergence Performance Bonuses. Subject to the provisions of the Plan and any Participation Agreement, each Participant will earn an Emergence Performance Bonus as of the Emergence Date, depending upon the extent to which the Emergence Performance Goals have been achieved.

(c) Performance Goals. Exhibit A attached hereto sets forth the relevant Performance Goals for each Performance Period and the Applicable Percentage of each Participant’s Target Performance Bonus amount payable upon the achievement of the applicable Performance Goals. The payout of a Participant’s Performance Bonus will be based on (i) such Participant’s individual Target Performance Bonus that has been approved by the Committee and included in the Participant’s Participation Agreement and (ii) the level of achievement of the applicable Performance Metrics for a particular Performance Period. Except as otherwise may be provided by the Committee, in its sole discretion, no Performance Bonus will be payable for a Performance Metric unless the threshold Performance Goals for such Performance Metric are achieved.

(d) Continued Employment. Except as set forth below, to earn a Performance Bonus for any Performance Period, a Participant must remain employed by the Company Group through the end of such Performance Period (the “Vesting Date”). Except as set forth in this Section 6(d), a Participant whose employment with the Company Group terminates for any reason before the Vesting Date will forfeit the right to any Performance Bonus for that Performance Period. Notwithstanding the foregoing, a Participant who becomes a Good Leaver during a Performance Period will be entitled to a pro rata portion (based on the percentage of the Performance Period the Participant was employed by the Company Group) of the Performance Bonus that would otherwise have been earned for such Performance Period.

7. Performance Certification. Promptly after the end of each Performance Period, the Committee will certify the degree to which the applicable Performance Goals have been achieved and the amount of Performance Bonus payable to each Participant hereunder. Any Performance Bonus required to be made under the Plan will be paid on a fully vested basis by the Company as soon as possible after the end of the applicable Performance Period, but in any event within 45 days following the end of any Quarterly Performance Period (in the case of any Quarterly Performance Goal) or within five days following the Emergence Date (in the case of any payments under Section 6(a)(iii) and in the case of any Emergence Performance Goal).

8. Plan Administration. The Plan will be administered by the Committee. The Committee is given full authority and discretion within the limits of the Plan to establish such administrative measures as may be necessary to administer and attain the objectives of the Plan and may delegate the authority to administer the Plan to an officer of the Company. The Committee (or its delegate, as applicable) will have full power and authority to construe and interpret the Plan and any interpretation by the Committee will be binding on all Participants and will be accorded the maximum deference permitted by law.

(a) All rights and interests of Participants under the Plan will be non-assignable and nontransferable, and otherwise not subject to pledge or encumbrance, whether voluntary or involuntary, other than by will or by the laws of descent and distribution. In the event of any sale, transfer, or other disposition of all or substantially all of the Company’s assets or business, whether by merger, stock sale, consolidation, or otherwise, the Company may assign the Plan.

(b) Any payment to a Participant in accordance with the provisions of the Plan will, to the extent thereof, be in full satisfaction of all claims against the Company Group related to the Plan, and the Company may require Participant, as a condition precedent to such payment, to execute a receipt and release to such effect.

(c) Payment of amounts due under the Plan will be provided to a Participant in the same manner as such Participant receives his or her regular paycheck or by mail at the last known address of such Participant in the possession of the Company, at the discretion of Committee. The Company may deduct all applicable taxes and any other withholdings required to be withheld with respect to the payment of any award pursuant to the Plan.

(d) The Company will not be required to establish any special or separate fund or to make any other segregation of assets to ensure the payment of any award provided for hereunder. Performance Bonus payments will not be considered as extraordinary, special incentive compensation, and will not be included as “earnings,” “wages,” “salary,” or “compensation” in any pension, welfare, life insurance, or other employee benefit plan or arrangement of the Company Group.

(e) The Company, in its sole discretion, will have the right to modify, supplement, suspend, or terminate this Plan at any time; provided that, except as required by law, the Plan may not be amended in any way adverse to any Participant unless (i) the Committee obtains the prior written consent of the affected Participants or (ii) the Committee reasonably determines such change is reasonably necessary to obtain any governmental (including court) approvals required to make the Plan effective before the Emergence Date; and provided, further, that, on and following the Emergence Date and prior to the end of the Term, the Plan shall not be terminated without the consent of all Participants in the Plan.

(f) Nothing contained in the Plan will in any way affect the right and power of the Company to discharge any Participant or otherwise terminate his or her employment at any time or for any reason or to change the terms of his or her employment in any manner.

(g) Except as otherwise provided under the Plan, any expense incurred in administering the Plan will be borne by the Company.

(h) Captions preceding the sections hereof are inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provision hereof.

(i) The administration of the Plan will be governed by the laws of the State of Texas, without regard to the conflict of law principles of any state. Any persons or corporations who now are or will subsequently become parties to the Plan will be deemed to consent to this provision.

(j) The Plan is intended to either comply with, or be exempt from, the requirements of Section 409A. To the extent that the Plan is not exempt from the requirements of Section 409A, the Plan is intended to comply with the requirements of Section 409A and will be limited, construed, and interpreted in accordance with such intent. Notwithstanding the foregoing, in no event whatsoever will the Company be liable for any additional tax, interest, income inclusion, or other penalty that may be imposed on a Participant by Section 409A or for damages for failing to comply with Section 409A.

* ***

IN WITNESS WHEREOF, the Company has caused the Plan to be signed by its duly authorized officer as of the date first set forth above.

MCDERMOTT INTERNATIONAL, INC.

By: /s/ Tosha Perkins Name: Tosha Perkins Title: Senior Vice President, Chief Human Resources Officer

[Signature Page to 2020 Key Employee Incentive Plan] Exhibit A PERFORMANCE METRICS AND GOALS

Performance Metrics

The Performance Metrics established for the Term are as follows:

“Adjusted EBITDA” means EBITDA (as defined in that certain Superpriority Senior Secured Debtor-in-Possession Credit Agreement, dated as of January 23, 2020, by and among the Company, certain subsidiaries of the Company, and certain other parties thereto), without regard to clause (b)(xi) thereof (relating to “permitted project charges” through June 30, 2020).

“Available Cash Balance” means cash per the books and records of the Company, determined in accordance with GAAP, less cash held by any joint ventures or consortiums, cash held by any captive insurance companies, and cash held in foreign jurisdictions.

“Letter of Credit Relief Achievement Target” means a reduction in letter of credit requirements for customers, including, without limitation, the accelerated cancellation of existing letters of credit and any reduction in prospective letter of credit requirements.

“Projected Gross Profit Achievement Target” means agreements from customers resulting in projected gross profit improvement to the Company.

“Risk Mitigation Achievement Target” means agreements from customers resulting in the mitigation of potential risks to the economic performance of the Company’s projects.

“Safety” means the Company’s total recordable incident rate.

“Technology Business Sale Proceeds” has the meaning set forth in the Plan of Reorganization.

A-1

Quarterly Performance Metrics and Performance Goals

Adjusted EBITDA (Applicable Percentage: 27.5% of Target Quarterly Performance Bonus)

First Performance Period Second Performance Period Third Performance Period Fourth Performance Period ($ millions) ($ millions) ($ millions) ($ millions) Quarterly Threshold 51.6 92.2 78.4 139.7 Target 64.5 115.2 98.0 174.6 Maximum 96.8 172.8 147.0 261.9

Cumulative Threshold — 143.8 222.2 361.9 Target — 179.7 277.7 452.3 Maximum — 269.6 416.6 678.5

Available Cash Balance (Applicable Percentage: 27.5% of Target Quarterly Performance Bonus)*

First Performance Period Second Performance Period Third Performance Period Fourth Performance Period ($ millions) ($ millions) ($ millions) ($ millions) Quarterly Threshold 840.0 600.0 650.0 610.0 Target 890.0 650.0 700.0 660.0 Maximum 990.0 750.0 800.0 760.0

Cumulative Threshold — 600.0 650.0 610.0 Target — 650.0 700.0 660.0 Maximum — 750.0 800.0 760.0

Safety (Applicable Percentage: 15.0% of Target Quarterly Performance Bonus)*

First Performance Period Second Performance Period Third Performance Period Fourth Performance Period (TRIR) (TRIR) (TRIR) (TRIR) Quarterly Threshold ≤ 0.2875 ≤ 0.2875 ≤ 0.2875 ≤ 0.2875 Target ≤ 0.2500 ≤ 0.2500 ≤ 0.2500 ≤ 0.2500 Maximum ≤ 0.2125 ≤ 0.2125 ≤ 0.2125 ≤ 0.2125

Cumulative Threshold — ≤ 0.2875 ≤ 0.2875 ≤ 0.2875 Target — ≤ 0.2500 ≤ 0.2500 ≤ 0.2500 Maximum — ≤ 0.2125 ≤ 0.2125 ≤ 0.2125

* Designates an Accelerated Measurement Metric.

A-2

Emergence Performance Metrics and Performance Goals

Technology Business Sale Proceeds (15.0% of Target Performance Bonus)

Technology Business Sale Proceeds (USD millions) Threshold Base Purchase Price Target Base Purchase Price + Initial Minimum Overbid Amount Maximum Base Purchase Price + Initial Minimum Overbid Amount + 3% of Base Purchase Price

Projected Gross Profit Achievement Target (5.0% of Target Performance Bonus)

As of the Emergence Date (USD millions) Threshold 15.0 Target 20.0 Maximum 40.0

Letter of Credit Relief Achievement Target (5.0% of Target Performance Bonus)

As of the Emergence Date (USD millions) Threshold 2.0 Target 15.0 Maximum 30.0

Risk Mitigation Achievement Target (5.0% of Target Performance Bonus)

As of the Emergence Date (USD millions) Threshold 35.0 Target 40.0 Maximum 80.0

A-3

Determination of Quarterly Performance Bonus and Catch-Up Payments

Quarterly Performance Bonus

The amount of the Quarterly Performance Bonus under Section 6(a)(i) shall be calculated with respect to each Quarterly Performance Period and each quarterly Performance Metric as follows:

Performance Level Quarterly Performance Bonus Threshold Performance Achieved 50% of the Applicable Percentage of Target Quarterly Performance Bonus Target Performance Achieved 100% of the Applicable Percentage of Target Quarterly Performance Bonus Maximum Performance Achieved 200% of the Applicable Percentage of Target Quarterly Performance Bonus

If actual performance with respect to a particular Performance Metric is between the established Quarterly Performance Goals with respect to such Performance Metric, linear interpolation shall be used to determine the amount of the Quarterly Performance Bonus.

Catch-Up Payments

The aggregate amount of the Quarterly Performance Bonus for purposes of determining any Catch-Up Payments under Section 6(a)(ii) shall be calculated with respect to each Quarterly Performance Period (other than the first Performance Period) and each Performance Metric as follows:

Performance Level Aggregate Quarterly Performance Bonus Cumulative Threshold Performance Achieved 50% of the Applicable Percentage of the aggregate Target Quarterly Performance Bonus through the end of the Relevant Performance Period Cumulative Target Performance Achieved 100% of the Applicable Percentage of the aggregate Target Quarterly Performance Bonus through the end of the Relevant Performance Period Cumulative Maximum Performance Achieved 200% of the Applicable Percentage of the aggregate Target Quarterly Performance Bonus through the end of the Relevant Performance Period

If actual performance with respect to a particular Performance Metric is between the established Performance Goals with respect to such Performance Metric, linear interpolation shall be used to determine the amount of the Quarterly Performance Bonus; provided that the amount of the Quarterly Performance Bonus for the second Relevant Performance Period and third Relevant Performance Period shall not be greater than the Target Quarterly Performance Bonus for each Relevant Performance Period, respectively.

A-4

Determination of Emergence Performance Bonus

Emergence Performance Bonus

The amount of the Emergence Performance Bonus under Section 6(b) shall be calculated as of the Emergence Date and each applicable Performance Metric as follows:

Performance Level Emergence Performance Bonus Threshold Performance Achieved 50% of the Applicable Percentage of Target Performance Bonus Target Performance Achieved 100% of the Applicable Percentage of Target Performance Bonus Maximum Performance Achieved 200% of the Applicable Percentage of Target Performance Bonus

If actual performance with respect to a particular Performance Metric is between the established Emergence Performance Goals with respect to such Performance Metric, linear interpolation shall be used to determine the amount of the Emergence Performance Bonus.

A-5

Exhibit 21.1

McDERMOTT INTERNATIONAL, INC. SIGNIFICANT SUBSIDIARIES OF THE REGISTRANT YEAR ENDED DECEMBER 31, 2019

McDermott International, Inc. Panama McDermott International Management, S. de RL. Panama J. Ray McDermott, S.A. Panama Hydro Marine Services, Inc. Panama J. Ray McDermott International, Inc. Panama McDermott Technology (US), Inc. Delaware McDermott Technology, B.V. The Netherlands Comet II B.V. The Netherlands Lealand Finance Company B.V. The Netherlands Chicago Bridge & Iron Company B.V. The Netherlands CB&I Oil & Gas Europe B.V. The Netherlands CBI Company Two B.V. The Netherlands CBI Company B.V. The Netherlands CB&I (US) Holdings, Limited England & Wales CBI US Holding Company Inc. Delaware CBI HoldCo Two Inc. Delaware Chicago Bridge & Iron Company Delaware CB&I Group Inc. Louisiana CB&I Holdco, LLC Louisiana CB&I LLC Texas J. Ray Holdings, Inc. Delaware J. Ray McDermott Holdings, LLC Delaware McDermott, Inc. Delaware Delaware

The subsidiaries omitted from the foregoing list, considered in the aggregate as a single subsidiary, do not constitute a significant subsidiary.

Exhibit 31.1

CERTIFICATIONS

I, David Dickson, certify that: 1. I have reviewed this annual report on Form 10-K of McDermott International, Inc. for the year ended December 31, 2019; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 28, 2020

/s/ DAVID DICKSON David Dickson President and Chief Executive Officer

Exhibit 31.2

I, Christopher Krummel certify that: 1. I have reviewed this annual report on Form 10-K of McDermott International, Inc. for the year ended December 31, 2019; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

February 28, 2020

/s/ CHRISTOPHER A. KRUMMEL Christopher A. Krummel Executive Vice President and Chief Financial Officer

Exhibit 32.1

MCDERMOTT INTERNATIONAL, INC. Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), I, David Dickson, President and Chief Executive Officer of McDermott International, Inc., a Panamanian corporation (the “Company”), hereby certify, to my knowledge, that: (1) the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 28, 2020 /s/ DAVID DICKSON David Dickson President and Chief Executive Officer

Exhibit 32.2

MCDERMOTT INTERNATIONAL, INC. Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), I, Christopher Krummel, Executive Vice President and Chief Financial Officer of McDermott International, Inc., a Panamanian corporation (the “Company”), hereby certify, to my knowledge, that: (1) the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 28, 2020 /s/ CHRISTOPHER A. KRUMMEL Christopher A. Krummel Executive Vice President and Chief Financial Officer