NOVATION AND ASSUMPTION AGREEMENT by and among THEBABCOCK & WILCOX COMPANY, a Delaware corporation, and BABCOCK & WILCOXENTERPRISES, INC., a Delaware corporation, and DAMPKRAFT INSURANCE COMPANY,a South Carolina corporation and CREOLE INSURANCE COMPANY, a South Carolina corporation, RECITALS

Exhibit 10.7

EXECUTION VERSION

NOVATION AND ASSUMPTION AGREEMENT

by and among

THE BABCOCK & WILCOX COMPANY,

a Delaware corporation,

and

BABCOCK & WILCOX ENTERPRISES, INC.,

a Delaware corporation,

and

DAMPKRAFT INSURANCE COMPANY, a South Carolina corporation

and

CREOLE INSURANCE COMPANY, a South Carolina corporation,

RECITALS

THIS NOVATION AND ASSUMPTION AGREEMENT (the “Agreement”), is entered into and effective as of June 19, 2015 (the “Effective Date”) by and among THE BABCOCK & WILCOX COMPANY, a Delaware corporation (“RemainCo”), BABCOCK & WILCOX ENTERPRISES, INC., a Delaware corporation (“SpinCo”), CREOLE INSURANCE COMPANY, a South Carolina corporation (“Creole”), and DAMPKRAFT INSURANCE COMPANY, LTD., a South Carolina corporation (“Dampkraft”) and, solely with respect to Sections 2(a)(ii) and 2(c)(ii), respectively, the other RemainCo Entities signatory hereto and the other SpinCo Entities signatory hereto.

WHEREAS, Creole has issued the Existing Policies to one or more RemainCo Entities and one or more SpinCo Entities;

WHEREAS, pursuant to the Existing Policies, Creole is obligated, among other things, to pay or reimburse RemainCo Entities and/or SpinCo Entities for certain obligations;

WHEREAS, SpinCo, prior to the Separation, is a wholly owned Subsidiary of RemainCo;

WHEREAS, RemainCo intends to spin-off SpinCo from RemainCo through a dividend of common stock of SpinCo to the shareholders of RemainCo (the “Separation”);

WHEREAS, in connection with the Separation, Creole desires to transfer and Dampkraft desires to assume any Transferable Creole Policies insofar as such policies relate to SpinCo Entities;

WHEREAS, RemainCo and SpinCo are parties, together with ACE American Insurance Company and certain of its affiliates (collectively, “ACE”) to a certain Assumption and Loss Allocation Agreement (the “ALAA”) that, among other things, assists in effecting the Separation by identifying certain RemainCo Obligations and certain SpinCo Obligations and allocating liability and responsibility therefor;

WHEREAS, certain of the liabilities of RemainCo and/or SpinCo and their respective Affiliates that are insured by the Existing Policies under this Agreement are RemainCo Obligations and/or SpinCo Obligations under the ALAA, and the parties desire that the allocation of liability in this Agreement conform to that in the ALAA insofar as such overlap may exist; and

WHEREAS, each of RemainCo and SpinCo, each for itself and for its respective Subsidiaries, is willing to consent to the transfer, assumption, and novation of the matters set forth herein, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual promises set out herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Definitions. The following terms used herein, including in the recitals and Exhibits hereto, shall have the following meanings:

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

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

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

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

“Assumption Time” means the time at which the Separation is effective on the Effective Date.

“Dampkraft Assumption and Novation” has the meaning set forth in Section 2(a)(i).

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

“Existing Policies” means the Transferable Creole Policies and the Wholly Retained Creole Policies.

“Insured,” as a noun in reference to one or more insurance policies, means any Person who is insured by such policy or policies, regardless of whether such Person is designated an “Insured” or a “Named Insured” in such policy or is otherwise expressly identified therein.

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“Insured SpinCo Obligation” means an obligation of Creole or Dampkraft under the Existing Policies that arises from an obligation, (a) to any insurance company that is an Obligation of a SpinCo Entity or (b) to ACE or its Affiliates that is a SpinCo Obligation under the ALAA.

“Insured RemainCo Obligation” means an obligation of Creole under the Existing Policies that arises from an obligation, (a) to any insurance company that is an Obligation of a RemainCo Entity or (b) to ACE or its Affiliates that is an RemainCo Obligation under the ALAA.

“Insurer,” as a noun in reference to one or more insurance policies, means the Person identified in such policy or policies as the insurer.

“Loss Portfolio” means (a) all of the accumulated reserves (actual and incurred but not reported) which Creole holds in respect of its liabilities (actual and contingent) under the Transferable Creole Policy, (b) the unearned premium reserve with respect to each Transferable Creole Policy, (c) the other liabilities (comprising accounts payable, accrued expenses and loss payables) and (d) an amount as agreed upon between Creole and Dampkraft with respect to a loss deterioration reserve under the Transferable Creole Policy.

“Master Separation Agreement” means a Master Separation Agreement to be entered into between RemainCo and SpinCo in connection with the Separation.

“Organizational Documents” means (a) with respect to any corporation, its certificate or articles of incorporation or organization and its bylaws, (b) with respect to any limited partnership, its certificate of limited partnership and its partnership agreement, (c) with respect to any general partnership, its partnership agreement, and (d) with respect to any limited liability company, its certificate or articles of formation or organization and its operating agreement or other organizational documents.

“Parties” means RemainCo, SpinCo, Dampkraft and Creole collectively (and each individually is a “Party”).

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, a union, an unincorporated organization or a governmental entity or any department, agency or political subdivision thereof.

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

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

“RemainCo Obligations” shall have the meaning ascribed to such term in the ALAA and shall be interpreted under this Agreement to conform to interpretations under the ALAA.

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

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

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

“SpinCo Obligations” shall have the meaning ascribed to such term in the ALAA and shall be interpreted under this Agreement to conform to interpretations under the ALAA.

“Subsidiary” means, with respect to any specified Person, any corporation, partnership, limited liability company, joint venture or other organization, whether incorporated or unincorporated, of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such specified Person or by any one or more of its Subsidiaries, or by such specified Person and one or more of its Subsidiaries.

“Transferable Creole Policy” means each insurance policy issued prior to the date hereof by Creole on which an SpinCo Entity is named or otherwise identified as an insured (including without limitation by being within a generic description such as “Affiliates” or “Subsidiaries”).

“Transferred Dampkraft Policy” means, as to any Transferable Creole Policy after the Assumption Time and giving effect to this Agreement, the aggregate of all rights, duties, and obligations of Dampkraft with respect to the SpinCo Entities that were, prior to the Assumption Time, Insureds of Creole under such Transferable Creole Policy

“Wholly Retained Creole Policy” means an insurance policy issued by Creole to one or more RemainCo Entities (and possibly others) that is not a Transferable Creole Policy.

2. Assumption.

(a) Dampkraft Assumption and Novation. Notwithstanding anything in any Transferable Creole Policy to the contrary, and effective as of the Assumption Time, Creole hereby transfers and assigns, and Dampkraft hereby assumes by novation, (x) so much of each Transferable Creole Policy as relates to SpinCo or any SpinCo Entity as an Insured thereunder; and (y) any and all rights and obligations of Creole under any of the Existing Policies that arise from Insured SpinCo Obligations. In connection with and implementation of such transfer, assignment, and novation:

(i) Dampkraft hereby agrees to observe, pay, perform, satisfy, fulfill and discharge any and all now existing and hereafter arising duties, terms, provisions, covenants, obligations and liabilities of Creole under the Transferable Creole Policies and with respect to the Insured SpinCo Obligations, both insofar as transferred above (the “Dampkraft Assumption and Novation”); and

(ii) Each SpinCo Entity that is a signatory hereto hereby consents to, and agrees to give full force and effect to, the Dampkraft Assumption and Novation. From and

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after the Assumption Time, Dampkraft and not Creole shall be treated as the applicable SpinCo Entity’s contractual counterparty with respect to the contracts and mutual rights and obligations subject to the Dampkraft Assumption and Novation. Without limitation, each SpinCo Entity:

(iii) With respect to each Transferable Creole Policy that is subject to the Dampkraft Assumption and Novation, the aggregate of rights, duties, and obligations set forth in subsections (a)(i) and (a)(ii) above shall be treated as the Transferred Dampkraft Policy relating to such Transferable Creole Policy.

(b) No Transfer or Novation of Insured RemainCo Obligations to SpinCo Entities. Except to the extent that the Wholly Retained Creole Policies are determined to cover Insured SpinCo Obligations notwithstanding the absence of any SpinCo Entity as an Insured thereunder, the Wholly Retained Creole Policies are not novated or otherwise affected by the Dampkraft Assumption and Novation. The Transferable Creole Policies are novated to Dampkraft as set forth above only to the extent that one or more SpinCo Entities is an insured thereunder. To the extent that RemainCo Entities are insureds under the Transferable Creole Policies, the Parties acknowledge that Creole and not Dampkraft shall continue to observe, pay, perform, satisfy, fulfill and discharge any and all now existing and hereafter arising duties, terms, provisions, covenants, obligations and liabilities of the Insurer under the Transferable Creole Policies. The Parties further acknowledge that Creole and not Dampkraft shall continue to observe, pay, perform, satisfy, fulfill and discharge any and all now existing and hereafter arising duties, terms, provisions, covenants, obligations and liabilities of the Insurer with respect to the Insured RemainCo Obligations.

(c) No Effect on Aggregate Limits of Liability. For the avoidance of doubt, it is understood and agreed that the aggregate liability of Creole and Dampkraft, taken together, is not intended to be, and shall be deemed not to be, increased by implementation of this Agreement. In particular, and without limitation, to the extent that any Transferable Creole Policy contains an aggregate limit of liability, that aggregate limit of liability shall, after the

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Assumption Time, apply as a single, joint aggregate limit of liability as between (i) the resulting Transferred Dampkraft Policy and (ii) the portions of the Transferable Creole Policy that are retained pursuant to Section 2(b) above. Disputes as to priority of claims and/or allocation of the single, joint aggregate limit of liability shall be resolved pursuant to Section 12 hereof.

(d) Transfer of Assets. In consideration of Dampkraft’s agreement to assume and discharge Creole’s obligations under each Transferable Creole Policy, Creole agrees to transfer to Dampkraft no later than 30 days after the Effective Date all of the assets, liabilities, rights and obligations comprising the aggregate value of the Loss Portfolio.

3. Amendments. Neither this Agreement nor any provision hereof may be amended, changed, waived, discharged or terminated except by a written instrument signed by each Party.

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

5. No Waiver. The failure or refusal by any Party to exercise any rights granted hereunder shall not constitute a waiver of such rights or preclude the subsequent exercise thereof, and no oral communication shall be asserted as a waiver of any such rights hereunder unless such communication shall be confirmed in a writing plainly expressing an intent to waive such rights and signed by the Party against whom such waiver is asserted.

6. Counterparts. This Agreement may be executed in any number of counterparts each of which when so executed and delivered shall constitute an original, but such counterparts together shall constitute one and the same agreement. The exchange of copies of this Agreement and of signature pages by facsimile or email transmission shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes. Signatures of the Parties and other Persons signatory hereto transmitted by facsimile or email shall be deemed to be their original signatures for all purposes.

7. No Third Party Beneficiary. This Agreement shall not be deemed to give any right or remedy to any third party whatsoever unless otherwise specifically granted hereunder.

8. Parties’ Representations. As of the Effective Date, each of the Parties expressly represents on its own behalf: (a) it is an entity in good standing in its jurisdiction of organization; (b) it has all requisite corporate power and authority to enter into this Agreement, and to perform its obligations hereunder; (c) the execution and delivery by it of this Agreement, and the performance by it of its obligations under this Agreement, have been duly authorized by all necessary corporate or other action; (d) this Agreement, when duly executed and delivered by it, and subject to the due execution and delivery hereof by the other Parties, will be a valid and binding obligation of it, enforceable against it, its successors and permitted assigns, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and general equity

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principles; (e) the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby in accordance with the respective terms and conditions hereof will not (i) violate any provision of its Organizational Documents, (ii) violate any applicable order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against it, or binding upon it, or any agreement with, or condition imposed by, any governmental or regulatory body, foreign or domestic, binding upon it as of the date hereof, or (iii) violate any agreement, contract, obligation, promise or undertaking that is legally binding and to which it is a party or by which it is bound; and (f) the signatory hereto on behalf of it is duly authorized and legally empowered to enter into this Agreement on its behalf.

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

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

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

11. Entire Agreement. THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT AMONG ALL OF THE PARTIES WITH RESPECT TO THE TRANSFERS, ASSUMPTIONS, AND NOVATIONS DESCRIBED HEREIN AND SUPERSEDES ALL OTHER PRIOR AGREEMENTS AND UNDERSTANDINGS, BOTH WRITTEN AND ORAL, WITH RESPECT TO THE SUBJECT MATTER HEREOF. SOLELY FOR INTERPRETATION PURPOSES, THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT IS INTENDED TO BE READ TOGETHER WITH THE ALAA, AND THE PARTIES FURTHER ACKNOWLEDGE THE CONTROLLING NATURE OF THE ALAA WITH RESPECT TO DISPUTE RESOLUTION, AS SET FORTH IN THE FOLLOWING PARAGRAPH.

12. Dispute Resolution. Any and all disputes arising out of this Agreement shall be resolved in accordance with the procedures set for in Section V of the Master Separation Agreement. Issues as to whether a given obligation is an Insured SpinCo Obligation or an Insured RemainCo Obligation shall be resolved as set forth in the ALAA, which resolution shall be binding for all purposes of this Agreement. Any such assertions may be made, to the extent appropriate, in connection with the dispute resolution under the ALAA but may not be made as a basis for challenging such resolution.

13. Severability. If any term or other provision of this Agreement or the Exhibits attached hereto is determined by a nonappealable decision by a court, administrative agency or arbitrator to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the court, administrative agency or arbitrator shall interpret this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the fullest extent possible. If any sentence in this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

14. Rules of Construction. The definitions of terms used herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified, (b) any reference herein to any law shall be construed as referring to such law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time, (c) any reference herein to any Person shall be construed to include such Person’s

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successors and assigns (subject to the restrictions contained herein), (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) with respect to the determination of any time period, the word “from” means “from and including” and the word “to” means “to and including” and (f) any reference herein to Articles, Sections and Exhibits shall be construed to refer to Articles and Sections of, and Exhibits to, this Agreement. No provision of this Agreement shall be interpreted or construed against any Person solely because such Person or its legal representative drafted such provision.

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

ACKNOWLEDGED AND AGREED FOR PURPOSES OF SECTION 2:

EXHIBIT I – SPINCO ENTITIES

See Schedule 1.1(d) and Schedule 1.1(l) attached hereto. No SpinCo Entity listed on Schedule 1.1(d) shall be deemed to be an “Insured”, a “Named Insured” or otherwise be deemed to be insured under any Existing Policy solely by virtue of being listed on such Schedule 1.1(d).

Schedule 1.1(d)

Designated SpinCo Entities

Schedule 1.1(l)

SpinCo Subsidiaries

EXHIBIT II – REMAINCO ENTITIES

See Schedule 1.1(b) and Schedule 1.1(e) attached hereto. No RemainCo Entity listed on Schedule 1.1(b) shall be deemed to be an “Insured”, a “Named Insured” or otherwise be deemed to be insured under any Existing Policy solely by virtue of being listed on such Schedule 1.1(b).

Schedule 1.1(b)

Designated RemainCo Entities

Schedule 1.1(e)

RemainCo Subsidiaries