tsamermaidexecutionversi






                                                                                                                                                              EXECUTION VERSION                                     DATED                                 2018                                  MERMAID INTERNATIONAL VENTURES                       MERMAID MARITIME PUBLIC COMPANY LIMITED                                      SEADRILL LIMITED                                              and                              ASIA OFFSHORE DRILLING LIMITED                          __________________________________________                            TRANSACTION SUPPORT AGREEMENT                      __________________________________________                                                                                                                  551054107 





 






                                                                                      CONTENTS                                                                                       Page   1.      Interpretation                                                                5   2.      Effectiveness of this Agreement                                              12   3.      New Seadrill Accession Notice                                                11   4.      RigCo Accession Notice                                                       12   5.      Mermaid Parent Undertaking                                                   13   6.      Chapter 11 Filing                                                            13   7.      Undertakings                                                                 13   8.      Put Option and Call Option                                                   16   9.      Valuation of Mermaid AOD Shares                                              19   10.     Amendments to terms                                                          20   11.     Releases                                                                     20   12.     Other rights                                                                 21   13.     Representations, Warranties and Covenants                                    21   14.     Information updates                                                          21   15.     Termination                                                                  22   16.     Remedies and Waivers                                                         22   17.     Entire Agreement                                                             22   18.     Notices                                                                      23   19.     Language                                                                     25   20.     Costs and Expenses                                                           25   21.     Execution of Agreement                                                       25   22.     Invalidity                                                                   25   23.     Permitted Disclosures                                                        25 





 






                                               24.     Third Parties and Assignment                                                 26   25.     Specific Performance                                                         26   26.     Governing law and Jurisdiction                                               26                                         SCHEDULES   Schedule 1 (Term Sheet)                                                              29   Schedule 2 (Put Option Notice and Call Option Notice)                                35   Schedule 3 (RSA)                                                                     37   Schedule 4 (Valuation Principles)                                                   592   Schedule 5 (Form of RigCo Accession Notice)                                         597   Schedule 6 (Form of New Seadrill Accession Notice)                                  598 





 






                                               THIS AGREEMENT is made on                                       2018   AMONG:    1.     MERMAID   INTERNATIONAL VENTURES,        a company incorporated under the laws of          the Cayman Islands, whose principal office is at Clifton House, 75 Fort Street, P.O. Box          1350, Grand Cayman KY1-1108, Cayman Islands (“Mermaid”);     2.     MERMAID  MARITIME  PUBLIC  COMPANY  LIMITED,        a  company  incorporated  under          the  laws  of  the  Kingdom  of  Thailand,  with  registered  number  0107550000017  and          whose principal office is at 26/28-29, Orakarn Building, 9th Floor, Soi Chidlom, Ploenchit          Road, Lumpinee, Pathumwan, Bangkok 10330, Thailand (“Mermaid Parent”);    3.     SEADRILL  LIMITED,  a  company  incorporated  under  the  laws  of  Bermuda,  with          organization number 36832 and whose principal office is at Par-la-Ville Place, 4th Floor,          14 Par-la-Ville Road, Hamilton, HM 08 Bermuda (“Seadrill Limited”); and    4.     ASIA  OFFSHORE  DRILLING  LIMITED,     a  company  incorporated  under  the  laws  of          Bermuda, with organization number 44712 and whose   principal office is at Par-la-Ville          Place, 4th Floor, 14 Par-la-Ville Road, Hamilton, HM 08 Bermuda (“AOD”),    each a “Party” and together the “Parties”.   BACKGROUND:   (A)     Seadrill  is  undertaking  a  restructuring  and  recapitalisation  in  respect  of  the  Seadrill          group’s capital structure, as contemplated in the RSA (defined below).   (B)     Seadrill, amongst others, is a party to the RSA.  It is anticipated that AOD will become a          party to the RSA on or around the date of this Agreement.   (C)     As  part  of  the restructuring,  it  is  anticipated that  certain  amendments  will  be made  in          relation to the US$360,000,000 senior secured credit facility agreement originally dated          9 April  2013  between,  amongst  others,  Asia  Offshore  Rig  1  Limited  (“AOD  1”),  Asia          Offshore  Rig  2  Limited  (“AOD  2”)  and Asia  Offshore  Rig  3  Limited  (“AOD  3)”  and          together  with  AOD  1  and  AOD  2,  the  “AOD  Subsidiaries”)  as  borrowers  and  ABN          AMRO  Bank  N.V.  as  agent,  as  summarised  in  the Term  Sheet and  the  RSA  Term          Sheets (as defined below).   (D)     It  is  anticipated  that  Seadrill  will transfer  its  shareholding  in  AOD  to  a  new  holding          company (“RigCo”), which will be a wholly-owned Subsidiary of an intermediate holding          company (“IHCo”). IHCo will be a wholly-owned Subsidiary of Seadrill.   (E)     It is also anticipated that certain amendments will need to be made to, amongst other          documents,  the AOD  Shareholders’ Agreement  (as  defined  below)  and  the AOD  Bye-         Laws  (as  defined  below)  in  order  to  implement  and  give  effect  to  the  transactions          contemplated in the Term Sheet. 





 






                                               THE PARTIES AGREE as follows:   1.      Interpretation   1.1     Terms  defined  in  the  RSA,  unless  otherwise  defined  herein  or  the  context  otherwise          requires,  shall  have  the  same meanings  when  used  in  this Agreement  (but  excluding          Schedule 1) and in addition:              “Additional Valuer”            has  the  meaning  given  to  it  in  Clause 1.5(C) of                                          Schedule 4.            “Affiliate”                    means, in relation to any person, a Subsidiary of that                                          person or a Holding Company of that person or any                                          other Subsidiary of that Holding Company.            “Approved Restructuring        means     (A)   the   restructuring   transactions           Transaction”                   contemplated  by  the  RSA  (which  at  the  time  of                                          signing  this  Agreement  have  the  requisite  levels  of                                          support  to  be  approved  by  the  United  States                                          Bankruptcy Court, which approval is expected to be                                          obtained at a hearing on or around 17 April 2018) or                                          (B) a restructuring transaction which is approved by                                          each of Seadrill, AOD (including the directors of AOD                                          appointed  by  Mermaid  and  the  directors  of  AOD                                          appointed by RigCo) and by Mermaid whether under                                          a  replacement  restructuring  support  and  lock-up                                          agreement or otherwise.            “AOD Bye-Laws”                 means the bye-laws of AOD originally adopted on 1                                          November 2010 and as subsequently amended from                                          time to time.            “AOD Facility Agreement”       means  the  US$360,000,000  senior  secured  credit                                          facility  agreement  originally  dated  9  April  2013                                          between,  amongst  others, the AOD  Subsidiaries as                                          borrowers,  AOD  and  Seadrill  as  guarantors, and                                          ABN AMRO Bank N.V. as agent.            “AOD Shareholders’             means  the  shareholders’  agreement  in  respect  of           Agreement”                     AOD  dated  8  March  2013  between  Seadrill  and                                          Mermaid.            “AOD Transactions”             means  the  transactions  contemplated  in  the  Term                                          Sheet.            “Arbitrator”                   means  a  sole  arbitrator  located  in  Singapore  to  be                                          appointed under the SIAC Rules.            “Authorisation”                means    any   authorisation,  consent,  approval,                                          resolution,  licence,  exemption,  filing,  notarisation  or 





 






                                                                     registration.   “Business Day”                 means  a day  that  is  not  a  Saturday, a Sunday  or a                                 national public holiday in Bangkok, London or Oslo.   “Calculated Share Price”       means the amount determined by multiplying (a) the                                 Fair Market Value by (b) a number, the numerator of                                 which equals the  number of shares in AOD held by                                 Mermaid  and  the  denominator  of  which  equals  the                                 total  number  of  shares  of  AOD  issued  and                                 outstanding.   “Call Option Period”           means,  subject  to  Clause  8.6,  the  six month period                                 commencing  on  1  October  2020 and  ending  on 31                                 March 2021.   “Cause of Action”              means  any  action,  Claim,  cause  of  action,                                 controversy, demand, right, action, charge against or                                 interest  in  property  to  secure  payment  of  a  debt  or                                 performance  of  an  obligation,  indemnity,  guaranty,                                 suit, obligation, liability, damage, judgment, account,                                 defense,  offset,  power,  privilege,  license,  and                                 franchise  of  any  kind  or  character  whatsoever,                                 whether    known,    unknown,     contingent   or                                 noncontingent, matured or unmatured, suspected or                                 unsuspected,  liquidated  or  unliquidated,  disputed  or                                 undisputed,  secured  or  unsecured,  assertable                                 directly or derivatively, in contract or in tort, in law or                                 in equity, or pursuant to any other theory of law.   “Ceiling Price”                means US$125,000,000.   “Chapter 11”                   means  title 11 of the United States Code, 11 U.S.C.                                 §§ 101–1532.    “Chapter 11 Cases”             means  the  procedurally  consolidated  Chapter  11                                 cases  pending  for Seadrill  and  certain  of  the                                 Subsidiaries  of  Seadrill in  the  United  States                                 Bankruptcy Court for the Southern District of Texas,                                 Victoria  Division  (or  such  other  court  having                                 jurisdiction  over  the  Chapter  11  Cases) pursuant  to                                 the Order (i) Directing Joint Administration of Chapter                                 11 Cases and (ii) Granting Related Relief Docket No.                                 40.    “Claim”                        means  (i)  a  right  to  payment,  whether  or  not  such                                 right is reduced to judgment, liquidated, unliquidated,                                 fixed,  contingent,  matured,  unmatured,  disputed,                                 undisputed,  legal,  equitable,  secured,  or  unsecured                                 and  calculated  together  with  all  applicable  accrued 





 






                                                                     interest, fees and commission due, owing or incurred                                 from  time  to  time  by  any  Party or  (ii)  a  right  to  an                                 equitable  remedy  for  breach of  performance if  such                                 breach  gives  rise  to  a  right  to  payment,  whether  or                                 not such right to an  equitable remedy  is reduced to                                 judgment,  fixed,  contingent,  matured,  unmatured,                                 disputed, undisputed, secured, or unsecured. For the                                 avoidance of doubt, the definition of Claim as defined                                 in this Agreement is no less broad than the definition                                 of claim as defined in section 101(5) of title 11 of the                                 United States Code.   “Completion”                   means a date, which shall be agreed between RigCo                                 and  Mermaid  (but  which  shall  be  no  later  than 15                                 calendar days after the Option Exercise Date) as the                                 date on which RigCo and Mermaid take each action                                 set  out  in  Clause  8.14  in  connection  with  the  sale                                 and purchase of the Mermaid AOD Shares.   “Contingent Liability”         means any contingent liability which is:                                  (A)    noted in AOD’s audited financial statements;                                        or                                  (B)    as determined by an Expert,                                  in  each  case  above, in  accordance  with  accounting                                 standards,  and  principally  in  accordance  with  ASC                                 450 of the U.S. GAAP and which is considered owed                                 to a third party pursuant to a valid court order or valid                                 legal  action  undertaken  or  made  by  that  third  party                                 and not owed to RigCo or Mermaid, or to any Affiliate                                 of  RigCo  or  Mermaid  or  to  the  shareholders  of  any                                 such Affiliate.   “Corporate Management          means  the  corporate  management  agreement  Agreement”                     originally entered into between AOD and Mermaid on                                 30 November 2010, and novated to different parties,                                 most  recently  to  the  AOD  Subsidiaries,  Seadrill                                 Management UK Ltd and Seadrill Management AME                                 Ltd,  and  as  amended  supplemented  or  restated  by                                 this Agreement or otherwise.    “Corporate Management          means the daily corporate management fee for day- Fees”                          to-day  corporate  management  of  AOD  and  its                                 Subsidiaries  as  further  described  in  Schedule  1  of                                 the Corporate Management Agreement. 





 






                                      “Encumbrance”                  means  any  mortgage,  charge,  pledge,  lien, option,                                 restriction,  right of  first  refusal,  right  of  pre-emption,                                 third  party  right  or  interest,  other  encumbrance  or                                 security  interest  of  any  kind,  and  any  other  type  of                                 preferential  arrangement    (including,  without                                 limitation,  title  transfer  and  retention  arrangements)                                 having a similar effect.   “Expert”                       means  the  Copenhagen  office  or  branch  of  one  of                                 the following accounting firms:                                   (A)    Deloitte Touche Tohmatsu Limited;                                   (B)    Ernst & Young;                                   (C)    PricewaterhouseCoopers; or                                   (D)    KPMG.   “Fair Market Value”            means:                                   (A)    the  value  agreed  between  the  Parties                                        pursuant to Clause 9.1; or                                  (B)    the  value  determined  by  the  Expert  in                                        accordance with the Valuation Principles.   “Floor Price”                  means US$75,000,000.   “Holding Company”              means a person from time to time which:                                  (A)    has  direct  or  indirect  control of  another                                        person; or                                  (B)    owns directly or indirectly more than fifty per                                        cent (50%) (votes and/or capital) of another                                        person.   “Mermaid AOD Shares”           means all the shares in AOD legally and beneficially                                 owned by Mermaid or a Subsidiary of Mermaid.   “New Seadrill”                 means a company to be incorporated under the laws                                 of Bermuda and whose principal office will be at Par-                                la-Ville  Place,  4th  Floor,  14  Par-la-Ville  Road,                                 Hamilton, HM 08 Bermuda.     “New Seadrill Accession        means the accession notice substantially in the form  Notice”                        as  set  out  in  Schedule 6 (Form  of New  Seadrill                                 Accession Notice) or any other form agreed between 





 






                                                                     the Parties.   “NYSE”                         means the New York Stock Exchange.   “Option Exercise Date”         means the date on which (as applicable) RigCo and                                 Seadrill  receive  an  Option  Notice  in  respect  of  the                                 Put Option or Mermaid receives an Option Notice in                                 respect of the Call Option.    “Option Notice”                means a notice in the form set out in Schedule 2 in                                 relation  to  the  exercise  of (as  applicable)  the  Put                                 Option or  the  Call  Option under the  terms  of  this                                 Agreement.   “OSE”                          means the Oslo Stock Exchange.   “Other Net Assets”             means  all  of AOD’s  assets  and  property  other  than                                 the  Rigs,  minus  all  liabilities  and  also taking  into                                 consideration Contingent Liabilities.    “Put Option Period”            means,  subject  to  Clause  8.4, the  12 month  period                                 commencing  on  1  October  2019  and  ending  on  30                                 September 2020.   “Restructuring Fees”           means the restructuring fees incurred by Seadrill and                                 members of the Seadrill group in connection with the                                 Restructuring Transactions, as defined in the RSA.   “Rig Management Fees”          means  the  daily  management  fee  per  rig  for  the                                 operation of each of the jack-up rigs AOD I, AOD II                                 and  AOD  III  as  set  out  in the  applicable  rig                                 management agreements pursuant to Clause 3.2 of                                 the Corporate Management Agreement.   “RigCo Accession Notice”       means the accession notice substantially in the form                                 as set out in Schedule 5 (Form of RigCo Accession                                 Notice)  or  any  other  form  agreed  between  the                                 Parties.   “Rigs”                         means  the  three  (3)  KFELS  Mod  V-B  Class  mobile                                 offshore drilling units owned and operated by AOD or                                 the AOD Subsidiaries, such Rigs being AOD I, AOD                                 II and AOD III respectively.   “Rigs Market Value”            means  the  value  of the  Rigs  as  determined  in                                 accordance with Schedule 4 (Valuation Principles).   “RSA”                          means  the  restructuring  support  and  lock-up                                 agreement  dated  12  September  2017  entered  into                                 between,  amongst  others,  Seadrill,  certain  of 





 






                                                                     Seadrill’s direct and indirect Subsidiaries and certain                                 of  Seadrill’s  stakeholders  in  substantially  the  same                                 form as set out in Schedule 3 (RSA).   “RSA Term Sheets”              means  the  term  sheets  set  out  at  Exhibit  A  to  the                                 RSA.   “Scheme of Arrangement”        means a creditor scheme of arrangement under:                                  (A)    Part  26  of  the  Companies Act  2006  (United                                        Kingdom);                                  (B)    Section  99  of  the  Companies  Act  1981                                        (Bermuda); or                                  (C)    the  Laws  of  any  other  relevant  jurisdiction,                                        as determined by the Parties,                                  with respect to the AOD Facility Agreement.   “Seadrill”                     means  Seadrill  Limited  until  the  Restructuring                                 Effective Date as defined in the RSA at which point                                 references to Seadrill shall mean New Seadrill.   “Seadrill Debtors”             means  Seadrill  and  the  Subsidiaries  of  Seadrill  in                                 respect  of  which  the  Chapter  11  Cases  were                                 commenced.   “SIAC Rules”                   means  the  Arbitration  Rules  of  the  Singapore                                 International Arbitration Centre in effect from time to                                 time.   “Subsidiary”                   means an entity from time to time of which a person:                                  (A)    has direct or indirect control; or                                  (B)    owns directly or indirectly more than fifty per                                        cent (50%) (votes and/or capital).   “Term Sheet”                   means the Term Sheet set out in Schedule 1  (Term                                 Sheet).   “Transaction Documents”        means  all  agreements  and  other  documents                                 necessary or desirable to implement or give effect to                                 the AOD Transactions.   “Valuation Notice”             means  a  notice  served  by  Mermaid  or  RigCo  (as                                 applicable),  requesting  a  valuation  of  the  Mermaid                                 AOD  Shares  in  accordance  with  Clause  9  and  the 





 






                                                                                       Valuation Principles.            “Valuation Principles”         means the valuation principles set out in Schedule 4                                          (Valuation Principles).            “Valuer”                       means either:                                            (A)    an  internationally recognised  independent                                                 valuation expert or appraiser with at least ten                                                 (10) years of experience in or relating to the                                                 offshore  drilling  rig  industry,  including                                                 experience  during  the  five  (5)  years                                                 immediately    preceding    a    proposed                                                 appointment  hereunder,  in  valuing  rigs                                                 similar  to  the  Rigs,  and who is  capable  of                                                 providing   a   professional  independent                                                 valuation in  respect  of the  Rigs  Market                                                 Value; or                                            (B)    a rig brokerage firm with industry-recognized                                                 key employees with at least ten (10) years of                                                 experience  in  or  relating  to  the  offshore                                                 drilling  rig  industry,  including  experience                                                 during  the  five  (5)  years  immediately                                                 preceding    a    proposed    appointment                                                 hereunder, in valuing rigs similar to the Rigs,                                                 and   which  is  capable  of  providing  a                                                 professional  independent    valuation  in                                                 respect of the Rigs Market Value; or                                           (C)    a  valuer  that  may  not  meet  the  aforesaid                                                 qualifications  but  is  mutually   agreed by                                                 Mermaid and RigCo.            “Valuer’s Report”              means the report issued by a Valuer setting out their                                          valuation of the Rigs in accordance with Schedule 4                                          (Valuation Principles).   1.2            In this Agreement, unless otherwise specified:           (A)    references to clauses and Schedules are to clauses of, and Schedules to, this                 Agreement;           (B)    in  the  appropriate  context,  each  term,  whether  stated  in  the  singular  or  the                 plural, shall include both the singular and the plural, and pronouns stated in the                 masculine, feminine or neuter gender shall include the masculine, feminine and                 the neuter gender;           (C)    capitalised  terms  defined  only  in  the  plural  or  singular  form  shall  nonetheless                 have their defined meanings when used in the opposite form; 





 






                                                       (D)    any  reference  to  a  contract  or  other  agreement  or  document  being  in  a                 particular form or on particular terms and conditions means that such document                 shall be substantially in such form or substantially on such terms and conditions;           (E)    a  reference  to  any  statute  or  statutory  provision  shall  be  construed  as  a                 reference  to  the  same  as  it  may  have  been,  or  may  from  time  to  time  be,                 amended, modified or re-enacted and shall include any subordinate legislation                 made from time to time under that statute or statutory provision;           (F)    any reference to a document shall mean such document as it may have been or                 may be amended, modified, supplemented and/or novated (other than in breach                 of the provisions of this Agreement) from time to time;           (G)    references to a “company” shall be construed so as to include any corporation                 or other body corporate, wherever and however incorporated or established;           (H)    references to a “person” shall be construed so as to include any individual, firm,                 company, corporation, body corporate, government, state or agency of a state,                 local  or  municipal  authority  or  government  body  or  any  joint  venture,                 association,  partnership  or  other  unincorporated  body  (whether  or  not  having                 separate legal personality);           (I)    the use of “include” or “including” is without limitation, whether stated or not;           (J)    all headings and titles are inserted for convenience only and do not affect the                 interpretation of this Agreement; and           (K)    the Schedules form part of this Agreement and any reference to this Agreement                 shall include the Schedules.   2.      Effectiveness of this Agreement           This Agreement  shall  become  effective  and  binding  upon  each  of  the Parties  on  and          from the date on which all Parties have duly executed this Agreement.   3.      New Seadrill Accession Notice    3.1     The  Parties  irrevocably  agree  that  New  Seadrill  shall  accede  to  this  Agreement  by          delivering the New Seadrill Accession Notice to Mermaid and AOD.   3.2     Seadrill undertakes to incorporate New Seadrill as soon as reasonably practicable and          procure that New Seadrill will deliver the New Seadrill Accession Notice to Mermaid and          AOD as soon as is reasonably practicable following New Seadrill’s incorporation.   4.      RigCo Accession Notice    4.1     The Parties irrevocably agree that RigCo shall accede to this Agreement by delivering          the RigCo Accession Notice to Mermaid and AOD. 





 






                                               4.2     Seadrill  undertakes  to  incorporate  RigCo  as  soon  as  reasonably  practicable  and          procure  that RigCo  will  deliver  the  RigCo Accession  Notice  to  Mermaid  and AOD  as          soon as is reasonably practicable following RigCo’s incorporation.   5.      Mermaid Parent Undertaking            Mermaid Parent undertakes to procure that Mermaid will fulfil its obligations under this          Agreement.   6.      Chapter 11 Filing   6.1     Subject to Clause 6.2, the Parties acknowledge and agree that it is the current intention          of  the  Parties  to  use  reasonable  efforts  to  avoid AOD  commencing  a  voluntary  case          under  Chapter  11.  If  (and  only  for  so  long  as)  each  lender (including  any  successor          thereof) under the AOD Facility supports an Approved Restructuring Transaction, AOD          shall  not  commence  a  voluntary  case  under  Chapter  11  or  any  other  insolvency          proceeding without the unanimous approval of the board of directors of AOD.   6.2     Clause 6.1 is not intended to limit the requirement for the directors of AOD to comply          with their fiduciary duties and to consider alternative options if facts and circumstances          change after this Agreement becomes effective.   7.      Undertakings   7.1     Each  of  Seadrill,  Mermaid,  Mermaid  Parent,  RigCo  and AOD  undertakes  that  it  shall,          and AOD undertakes to procure that its Subsidiaries shall:           (A)    without prejudice to Clause 7.1(B), take all actions and exercise all rights and                 powers available to it (including any rights or powers it has as a shareholder) in                 order  to  implement,  consummate  or  otherwise  give  effect  to  the  AOD                 Transactions and the Transaction Documents, including to support and take all                 commercially reasonable actions necessary or reasonably requested by Seadrill                 or AOD to give effect to a Scheme of Arrangement, provided that there are no                 changes to the Term Sheet or provisions in the Transaction Documents which                 are materially prejudicial to Seadrill, AOD, Mermaid or Mermaid Parent (as the                 case may be) or materially alter the economic substance and commercial terms                 of the AOD Transactions;            (B)    enter into amendments to the AOD Shareholders’ Agreement and the AOD Bye-                Laws which are necessary in order to:                  (i)     reflect  that  Seadrill’s  stake  in AOD  will  be  hived  down  to  a  newly                        incorporated indirect Subsidiary, RigCo (as set out in section 2 (Equity                        in AOD) of the Term Sheet);                  (ii)    implement and give effect to the contemplated rights of AOD to make,                        and the rights of the shareholders of AOD to receive, distributions as set                        out in section 3 (AOD Participation in Cross-Collateralisation and Cash                        Pooling) of the Term Sheet; 





 






                                              (iii)   implement and give effect to the contemplated rights and obligations of                AOD to make loans to the shareholders of AOD as set out in section 3                (AOD Participation in Cross-Collateralisation  and Cash Pooling)  of the                Term Sheet and to call for repayment of such loans on a pro rata basis                as set out in section 3 (AOD Participation in Cross-Collateralisation and                Cash Pooling) of the Term Sheet; and   (C)    implement and give effect to:          (i)     the obligations of each shareholder of AOD to repay any loan made by                AOD to it (as referred to in Clause 7.1(B)(iii) above and as set out in                section 3 (AOD Participation in Cross-Collateralisation and Cash                Pooling) of the Term Sheet); and          (ii)    implement and give effect to the contemplated rights and obligations of                each director of AOD appointed by Mermaid or by RigCo with regards to                consents  and  approvals  concerning  the  making  of  loans  to  Mermaid                and/or  to RigCo and/or  the borrowing  of  loan  amounts from  RigCo by                AOD or its Subsidiaries,          and  provided  that  Seadrill  and  Mermaid  shall  first  discuss  in  good  faith  the         precise  form  of  such  amendments  and  that  all  amendments  to  the  AOD         Shareholders’  Agreement  and  the  AOD  Bye-Laws  shall be  subject  to  the         express consent and approval of Seadrill and Mermaid;    (D)    take all actions and exercise all rights and powers available to it (including any         rights or powers it has as a shareholder) in order to make such amendments to:          (i)     bye-law 49 in the AOD Bye-Laws (a) to enable the AOD Transactions to                be  implemented,  consummated  and  carried  out  without  requiring  any                further  resolutions,  vote  or  approvals  (whether  of  the  directors  or                shareholders of AOD or otherwise) and (b) so that bye-law 49 applies                only where  the  relevant  actions,  transactions  or  arrangements  involve                AOD and/or its Subsidiaries; and          (ii)    bye-law 51 in the AOD Bye-Laws so that bye-law 51 does not apply to                loans  made  by  AOD  to  its  shareholders  or  to  any  of  the  AOD                Transactions,          and  provided  that  Seadrill  and  Mermaid  shall  first  discuss  in  good  faith  the         precise  form  of  such  amendments  and  that  all  amendments  to  the AOD  Bye-        Laws  shall  be  subject  to  the  express  consent  and  approval  of  Seadrill  and         Mermaid;   (E)    negotiate  in  good  faith  and  consult  with each  other Party,  any  relevant  third         party  and  their  respective  advisers  to  agree  and  finalise  the  Transaction         Documents  in  a  timely  manner  in  a  form  which  is  consistent  in  all  material         respects  with  the Term  Sheet  and  this Agreement  and  satisfactory  to  each  of         Seadrill, Mermaid and AOD (acting reasonably); and 





 






                                                       (F)    use commercially reasonable efforts to execute and deliver in a timely manner                 those Transaction Documents to which it will be a party,           in  each  case,  provided  that  such  action  is  consistent  in  all  material  respects  with  the          terms of this Agreement.   7.2     Each  of  Mermaid,  Seadrill  and AOD  agrees  that  it  shall  not,  and AOD undertakes  to          procure  that  its  Subsidiaries  shall  not,  object  to,  delay,  impede  or  prevent  the          implementation or consummation of the AOD Transactions, provided that:           (A)    AOD has entered into the RSA or the board of directors of AOD has approved                 the AOD Transactions; and           (B)    nothing in this Agreement shall limit the right of any Party to exercise any right                 or remedy provided under any Definitive Document (as defined in the RSA) or                 Transaction Document.   7.3     Except as required by the terms of this Agreement, Mermaid and Seadrill shall continue          to perform their respective obligations under the AOD Shareholders’ Agreement.   7.4     The  Parties  acknowledge  and  agree  that  AOD  has  been  charged  US$5,000,000  of          Restructuring  Fees  incurred  by AOD  prior  to  the  date  of  this Agreement. The  Parties          further  acknowledge and  agree  that  a discount  of  50%  shall  be applied to AOD’s  pro          rata share of the Restructuring Fees incurred from and after 1 November 2017 and that          in any event AOD shall not be required to pay an amount that exceeds US$2,000,000 in          respect  of  the  Restructuring  Fees  incurred  from  and  after  1  November  2017.  Seadrill          further represents, warrants and covenants that the amount of the Restructuring Fees          incurred by AOD shall not be more than the pro rata amount of the Restructuring Fees          that is determined by applying a percentage to the Restructuring Fees that represents          the total amount outstanding under the AOD Facility as a proportion of the total debt of          the Seadrill group under each of the secured facility agreements entered into by Seadrill          and  various  Subsidiaries  of  Seadrill,  excluding  costs  specifically  related  to  Seadrill’s          voluntary  Chapter  11  Cases.  Seadrill  shall  provide  Mermaid  a  summary  of  the          Restructuring Fees incurred.   7.5     The Parties agree that AOD will reimburse Mermaid’s documented external legal costs          incurred in connection with this Agreement, subject to a cap of US$250,000.   7.6     The Rig Management Fees incurred by AOD and the AOD Subsidiaries on and from 1          January 2018 will be reduced to US$7,500 per day per rig, unless otherwise reduced or          increased with the prior written agreement of RigCo and Mermaid.   7.7     The Corporate Management Fees incurred by AOD and the AOD Subsidiaries on and          from 1 January 2018 will be reduced to US$2,000 per day, unless otherwise agreed to          be reduced or increased with the prior written consent of RigCo and Mermaid.   7.8     Seadrill shall provide Mermaid copies of documents which demonstrate:  





 






                                                       (A)    the basis on which the Rig Management Fees  which are incurred and paid by                 AOD and the AOD Subsidiaries are calculated including regional, corporate and                 pro-rata allocation mechanisms; and            (B)    that the Rig Management Fees represent only the costs and expenses actually                 incurred  by  Seadrill  in  connection  with  the  operation  of  each  of  the  Rigs  and                 that, notwithstanding applicable  compulsory  transfer  pricing  regulations,  no                 profit will accrue to Seadrill or its Subsidiaries from the Rig Management Fees.   8.      Put Option and Call Option    8.1     Mermaid  shall  have  the  right  (with  no  obligation)  at  any  time  during  the  Put  Option          Period  to  sell  the  Mermaid AOD  Shares  to  RigCo  (the  “Put  Option”).  Mermaid  may          issue  a  Valuation  Notice  to  RigCo  (or  otherwise  prepare  for  the  exercise  of  the  Put          Option)  from  up  to  three  (3)  months  prior  to  the  commencement  of  the  Put  Option          Period  and  at  any  time  until  the  end  of  the  Put  Option  Period  (the  “Put  Option          Valuation Notice Period”), and RigCo shall co-operate accordingly.   8.2     RigCo shall have the right (with no obligation) at any time during the Call Option Period          to purchase the Mermaid AOD Shares (the “Call Option”). RigCo may issue a Valuation          Notice to Mermaid (or otherwise prepare for the exercise of the Call Option) at any time          from up to three (3) months prior to the commencement of the Call Option Period and at          any  time  until  the  end  of  the  Call  Option  Period  (the  “Call Option  Valuation  Notice          Period”), and Mermaid shall co-operate accordingly.   8.3     If Mermaid has issued a Valuation Notice, Mermaid may in its discretion issue an Option          Notice to RigCo with a copy to Seadrill within three (3) months of receipt by RigCo and          Mermaid  of  a  Valuer’s  Report.  On  receipt  of  the  Option  Notice,  and  upon  receipt  of          notice of the Fair Market Value and the Calculated Share Price and notwithstanding any          other  provisions  to  the  contrary,  RigCo  unconditionally  and  irrevocably  undertakes  to          purchase during the  Put Option Period the  Mermaid AOD  Shares  at  Completion. The          purchase price for the Mermaid AOD Shares  pursuant to this Clause 8.3 shall be the          lesser of the Calculated Share Price and the Ceiling Price (the “Put Option Price”).   8.4     If, for any reason  whatsoever,  Seadrill Limited does  not emerge from Chapter  11 with          AOD signed up  to an Approved Restructuring Transaction by 30 September 2018, the          Put Option  Period shall  instead  commence  one  year  and  one  day  after  the  date  on          which Seadrill  Limited  emerges  from  Chapter  11  with AOD  signed  up  to an Approved          Restructuring Transaction and the Put Option Period shall end twelve months later.   8.5     If  RigCo  has  issued  a  Valuation  Notice,  RigCo  may  in  its  discretion  issue  an  Option          Notice to Mermaid with a copy to Seadrill within three (3) months of receipt by RigCo          and Mermaid of a Valuer’s Report. On receipt of the Option Notice, and upon receipt of          notice of the Fair Market Value and the Calculated Share Price and notwithstanding any          other provisions to the contrary, Mermaid unconditionally and irrevocably undertakes to          sell  during  the  Call  Option  Period the  Mermaid  AOD  Shares  at  Completion.  The          purchase  price  for  Mermaid’s  AOD  Shares  pursuant  to  this  Clause 8.5 shall  be  the          greater of the Calculated Share Price and the Floor Price (the “Call Option Price”). 





 






                                               8.6     If, for any reason  whatsoever, Seadrill Limited does  not emerge from Chapter  11 with          AOD signed up to an Approved Restructuring Transaction by 30 September 2018, the          Call Option  Period  shall  instead  commence two years and  one  day  after  the  date  on          which Seadrill  Limited  emerges  from  Chapter  11  with AOD signed  up  to an Approved          Restructuring Transaction and the Call Option Period shall end on  the date falling six          months thereafter.   8.7     For the avoidance of doubt, there shall be no limit on the number of Valuation Notices          that  Mermaid  or  RigCo  may  issue  in  accordance  with  Clause  8.1  or  Clause  8.2  (as          applicable) during the Put Option Valuation Notice Period or the Call Option Valuation          Notice Period.   8.8     In the event that any disagreement or dispute is referred to an Additional Valuer or an          Arbitrator  in accordance with the Valuation  Principles, the Call  Option Period and Put          Option Period shall be extended by the equivalent duration of any delay caused by the          disagreement  or  dispute.  The  cost  of a  third  Valuer  and/or  Arbitrator  shall  be  borne          equally by RigCo and Mermaid.  Where a Party issues a Valuation Notice and does not          proceed  to  issue  an  Option  Notice  within  three  (3)  months  of receipt  of  a  Valuer’s          Report,  the cost of the third Valuer shall be borne solely by that Party.     8.9     An Option Notice may not be withdrawn once given.   8.10    On the receipt of an Option Notice, the recipient shall, no  later than two (2) Business          Days following receipt, sign the acknowledgement at the back of the Option Notice and          return it to the sender.   8.11    If the Call Option or the Put Option is exercised, then:           (A)    subject  to  the  terms  of  this  Agreement, Mermaid shall  sell  and RigCo shall                 purchase  the Mermaid AOD   Shares free  from  all  Encumbrances  and  with  all                 rights  attached  or  accruing  to  them  at  Completion,  in  accordance  with  the                 provisions of this Agreement;            (B)    all dividends and other distributions resolved or declared to be paid or made by                 AOD   in  respect  of  the Mermaid  AOD Shares  by  reference  to  a  record  date                 which  falls  on  or  before  Completion  shall  belong  to,  and  be  payable  to,                 Mermaid; and           (C)    Mermaid shall repay the total amount outstanding under the loans advanced to                 it  by AOD,  including  pursuant  to  Schedule  1  of  this Agreement,  including  any                 accrued interest (the “AOD Mermaid Loan Amount”) prior to Completion.    8.12    If  Mermaid  has  not  repaid  to AOD  the AOD  Mermaid  Loan Amount one  (1)  Business          Day prior to Completion, RigCo shall be entitled to deduct an amount equal to the AOD          Mermaid Loan Amount from the cash consideration payable in accordance with Clause          8.14(A)(i) below (the “AOD Mermaid Loan Set Off”).    8.13    If RigCo elects to make the AOD Mermaid Loan Set Off, RigCo undertakes to pay an          amount  equal  to  the AOD  Mermaid  Loan  Amount to  AOD  on  Completion  and  AOD          irrevocably consents to RigCo making the AOD Mermaid Loan Set Off. 





 






                                               8.14    At Completion:           (A)    Consideration for the Mermaid AOD Shares shall be satisfied by:                  (i)     Subject  to  Clause 8.12,  RigCo  paying  US$50  million  in  cash  into                        Mermaid’s nominated bank account; and                  (ii)    Seadrill  issuing  ordinary  shares  to  Mermaid  or  a Mermaid  nominated                        entity.  The  value  of  each  share  to  be  issued  to  Mermaid  shall  be                        calculated  by  reference  to  and  shall  be  the  volume-weighted  average                        price  during  the  sixty  (60)  calendar  day  period  ending  two  (2)  Stock                        Exchange Trading Days prior to Completion (the “New Seadrill Share                        Value”).  The  quantity  of  shares  to  be  issued  shall  be  determined  by                        subtracting  US$50  million  from  the  Put  Option  Price  or  Call  Option                        Price,  as  applicable  (the  difference being  the  “Excess Amount”),  and                        dividing the Excess Amount by the New Seadrill Share Value (the “New                        Seadrill  Share  Consideration”),  where  “Stock  Exchange  Trading                        Day” means:                                 (1)    (where  the  New  Seadrill  Share  Consideration  will  be                                       issued in the form of ordinary shares that are listed on                                       the NYSE) a day on which the NYSE is open;                                 (2)    (where  the  New  Seadrill  Share  Consideration  will  be                                       issued in the form of ordinary shares that are listed on                                       the OSE) a day on which the OSE is open; and                                 (3)    (where  the  New  Seadrill  Share  Consideration  will  be                                       issued in the form of ordinary shares that are listed and                                       freely  tradeable  on  any  other  recognised  stock                                       exchange  agreed  by  the  Parties  in  accordance  with                                       Clause 8.14(B)) a day on which that stock exchange is                                       open.           (B)    Seadrill  shall  issue  to  Mermaid  or  its  designee  the  whole  of  the  New  Seadrill                 Share Consideration in ordinary shares that are  listed and freely tradeable on                 the  NYSE,  the  OSE  and/or  any  recognised  stock  exchange  agreed  by  the                 Parties. If the shares are listed on multiple stock exchanges, Mermaid shall be                 entitled  to  specify  the  stock  exchange  on  which  the  shares  to  be  issued  to                 Mermaid are listed.            (C)    If at Completion the shares representing the New Seadrill Share Consideration                 are  not  listed  on  the  NYSE,  the  OSE  and/or  any  recognised  stock  exchange                 agreed by the Parties at Completion, Seadrill shall pay to Mermaid at or prior to                 Completion the full  amount  of  the  New  Seadrill  Consideration  in cash  (unless                 otherwise agreed by Seadrill and Mermaid).           (D)    Mermaid will:                   (i)     deliver to RigCo a duly executed instrument of transfer, together with all 





 






                                                                     relevant share certificates and other documents of title, in respect of the                        Mermaid AOD Shares, executed in favour of RigCo or its nominee;                   (ii)    deliver to RigCo all waivers or consents as may be required by law, any                        regulatory requirement, the bye-laws of AOD or any agreement to which                        AOD is a party in order to enable RigCo or its nominee to be registered                        as legal and beneficial holder of the Mermaid AOD Shares; and                  (iii)   at  the  expense  of  Mermaid,  do  such  things  and  execute  such                        documents as shall be necessary or as RigCo may reasonably request                        to  give  effect  to  the  sale  of  the  Mermaid  AOD  Shares  with  full  title                        guarantee and free from any Encumbrance.   8.15    Mermaid agrees that it will not (or enter into any agreement or arrangement to) directly          or  indirectly  sell,  assign,  transfer  or  otherwise  dispose  of  or  convey  any  legal  or          beneficial  interest  in  any  of  the  Mermaid  AOD  Shares (a  “Proposed AOD Share          Transfer”) to any person (a “Proposed Purchaser”) without the prior written consent of          RigCo which shall not be subject to unreasonable conditions, nor unreasonably withheld          or delayed.    8.16    As  a  condition  to  any  consent  to  a Proposed  AOD  Share  Transfer,  Mermaid  must          procure  that  any  person  to  whom  it  proposes  to sell,  assign,  transfer  or  otherwise          dispose  of  or  convey the  Mermaid  AOD  Shares  accedes  to  or  otherwise  becomes          bound  by  the  terms  of  this  Agreement  in  the  place  of  Mermaid  (the  “Mermaid  TSA          Obligations”).    8.17    RigCo  may, acting  reasonably,  make  its  consent  to  a Proposed AOD  Share  Transfer          subject  to  conditions  in  addition  to  the  condition  in  Clause 8.16,  including  without          limitation,  receipt  of  financial  information  and  other  information  relating  to  the          incorporation  and  corporate  status  of  a  Proposed  Purchaser,  the  shareholders  and          activities of a Proposed Purchaser and information that demonstrates the ability of the          Proposed Purchaser to perform the Mermaid TSA Obligations.   9.      Valuation of Mermaid AOD Shares   9.1     Mermaid  and  RigCo  shall within  five  (5)  Business  Days  after  receipt of  a  Valuation          Notice promptly meet in person or telephonically and use reasonable efforts to agree on          the Fair Market Value.   9.2     If within ten (10) Business Days of receipt of a Valuation Notice, Mermaid and RigCo fail          for any reason to agree on the Fair Market Value:            (A)    Mermaid  and  RigCo  shall  promptly  and  in  no  event  later  than  fifteen  (15)                 Business Days of receipt by the recipient of the Valuation Notice (i) each select                 a  Valuer  and  (ii)  give  notice  to  the  other  Party  of  such  Valuer’s  name  and                 address. If either Mermaid or RigCo fails to select a Valuer and give notice of                 such selection to the other Party as provided herein, the Party who has selected                 a Valuer shall appoint two Valuers each of whom shall prepare and provide to                 the  Parties  a  Valuer’s Report. Each  Valuer  shall  provide  a  Valuer’s  Report  to                 Mermaid and RigCo within one (1) month from the date of its appointment; and    





 






                                                       (B)    AOD shall promptly, and by mutual agreement by RigCo and Mermaid, and in                 no event later than fifteen (15) Business Days of receipt of the Valuation Notice                 appoint  the  Expert,  to  conduct  a  valuation  of  the  Other  Net  Assets  and  to                 determine the Fair Market Value based on the Rigs Market Value and the value                 of  the  Other  Net  Assets. If  Mermaid  and  RigCo  have  failed  to  agree  on an                 Expert within this fifteen (15) Business Day period, then either Party shall have                 the right to refer the matter to an Arbitrator who shall appoint an Expert within                 fifteen  (15)  calendar  days  of  his  appointment. The  Expert  shall  provide  its                 valuation  of the  value of  the  Other  Net Assets  within one (1) month  from  the                 date of its appointment.   9.3     The  Parties  agree  and  acknowledge  that  the  provisions  set  out  in  Schedule  4  shall          apply  to  the  appointment  of,  and  the  work  to  be  performed  by,  the Valuers  and  the          Expert and that breach of the provisions of Schedule 4 which has a material effect on          the Rigs  Market  Value or  Other  Net  Assets  shall  give  rise  to  the  Parties’  rights  to          arbitration as provided under Clause 26 (Governing Law and Jurisdiction).    10.     Amendments to terms           Each Party hereby acknowledges that the Term Sheet and the RSA (including the RSA          Term Sheets) set out in summary only the key terms and steps which may be pursued          in order to effect the AOD Transactions, and the Parties agree that Seadrill may make          any  amendment,  variation  and/or  addition  to  the  Term  Sheet,  the  RSA  and  the  RSA          Term Sheets, provided that:           (A)    any  such  amendment,  variation  or  addition  is  not  materially  adverse  to  the                 interests of Mermaid, Mermaid Parent or AOD; and           (B)    the  provisions  of  this Agreement  (excluding  (i)  the Term  Sheet  other  than  the                 provisions of the Term Sheet that relate to AOD’s participation in the RigCo cash                 pooling  arrangements  and  the  application  of  Excess  Sales  Proceeds  (as                 defined  in  the  Term  Sheet)  as  far  as  they  relate  to  rigs  owned  by  the  AOD                 Subsidiaries and (ii) the RSA other than the provisions in Exhibit A to the RSA                 that  relate  to  AOD,  its  creditors  and  its shareholders)  may  only  be  modified,                 amended, varied or waived in accordance with Clause 17.2 (Entire Agreement).           For  the  avoidance  of  doubt,  any  amendment,  variation  and/or  addition  to  the  Term          Sheet, the RSA or the RSA Term Sheets which is materially adverse to the interests of          Mermaid, Mermaid Parent or AOD or affecting the AOD Shareholders’ Agreement shall          require the prior written consent of Mermaid, Mermaid Parent and/or AOD (as the case          may be).   11.     Releases           (A)    For good and valuable consideration, effective upon bankruptcy court approval                 of this Agreement, each Party hereby releases and discharges each other Party                 from  any  and  all  Causes  of Action,  whether  known  or  unknown,  asserted  on                 behalf  of  such  releasing  Party  or  that  such  releasing  Party  would  have  been                 legally  entitled  to  assert  (whether  individually  or  collectively),  arising  on  or 





 






                                                              before  the date  of  this  Agreement directly from  any  Party’s  negotiation  of or                 entry into this Agreement.            (B)    The  releases  set  forth  in Clause 11(A) above  do  not  release  any  Causes  of                 Action to the extent any such Cause of Action, as determined by a final order of                 a court of competent jurisdiction, arises out of or relates to any act or omission                 of a Party that constitutes actual fraud, wilful misconduct, or gross negligence.    12.     Other rights           Notwithstanding anything contained in this Agreement, nothing in this Agreement shall:            (A)    be constructed to prohibit any Party from contesting whether any matter, fact or                 thing is a breach of, or is inconsistent with, this Agreement;            (B)    prevent any Party from enforcing this Agreement;            (C)    require any Party to take any action which is prohibited by applicable law;           (D)    prevent  any Party  from  taking  any  action  which  is  required by  applicable law;                 and           (E)    prevent any Party by reason of this Agreement or the AOD Transactions from                 making, seeking or receiving any Authorisations.   13.     Representations, Warranties and Covenants           Each of the Parties represents, warrants and covenants to each other Party, as of the          date such party executed and delivers this Agreement:           (A)    it  is  validly  existing  and  in  good  standing  under  the  laws  of  the  state  of its                 organisation, and this Agreement is a legal, valid and binding obligation of such                 Party,  enforceable  against  it  in  accordance  with  its  terms,  except  as                 enforcement may be limited by equitable principles relating to enforceability;           (B)    the entry into and performance by it of, and the transactions contemplated by,                 this Agreement do not, and will not, conflict in any material respect with any law                 or  regulation  applicable  to  it  or  with  any  of  its  articles  of  association,                 memorandum of association or other constitutional documents; and           (C)    except  as  expressly  provided  in  this  Agreement,  it  has  (or  will  have,  at  the                 relevant time) all requisite corporate or other power and authority to enter into,                 execute and deliver this Agreement and to effectuate the AOD Transactions as                 contemplated by, and perform its respective obligations under, this Agreement.   14.     Information updates           Seadrill agrees to keep AOD and Mermaid informed as to the progress of the material          aspects  of  Seadrill’s  restructuring  process  which  are  relevant  to  AOD  and  Mermaid 





 






                                                       (including  Seadrill’s  voluntary  case  under  Chapter  11)  on  a  monthly  basis,  or  at such          other frequency or times as requested by AOD or Mermaid (acting reasonably).   15.     Termination   15.1    This Agreement may be terminated by agreement in writing between the Parties.   15.2    This  Agreement  may  be  terminated  by  any  Party  upon the  breach  in  any  material          respect by one or more of the other Parties of any provision set forth in this Agreement          that remains uncured for a period of ten (10) Business Days after the receipt by the non-         terminating Parties of notice of such breach.    15.3    This  Agreement  shall  terminate  automatically  without  any  further  required  action  or          notice  on  termination  of  the  RSA  in  accordance  with  its  terms,  other  than  if  the  RSA          terminates under section 13.07 (Automatic Termination) of the RSA.   15.4    If  this Agreement  terminates  in  accordance  with  this  Clause  15  all  obligations  of  the          Parties shall end (except for the provisions of Clause 7.6, Clause 7.7, Clauses 8 (Put          Option  and  Call  Option),  Clause  9  (Valuation  of  Mermaid  AOD  Shares),  Clause  11          (Releases),  17 (Entire  Agreement),  18  (Notices),  19  (Language),  20  (Costs  and          Expenses), 21 (Execution of Agreement), 22 (Invalidity), 23 (Permitted Disclosures) 24          (Third  Parties  and  Assignment),  25 (Specific  Performance),  26  (Governing  law and          Jurisdiction) and Schedule 4. For the avoidance of doubt all rights and liabilities of the          Parties which have accrued before termination shall continue to exist.   16.     Remedies and Waivers   16.1    No delay or omission by any Party in exercising any right, power or remedy provided by          law or under this Agreement shall:           (A)    affect that right, power or remedy; or           (B)    operate as a waiver of it.   16.2    All rights, powers, and remedies provided under this Agreement or otherwise available          in  respect  hereof  at  law  or  in  equity  shall  be  cumulative  and  not  alternative,  and  the          exercise  of  any  right,  power  or  remedy  thereof  by  any Party  shall  not  preclude  the          simultaneous or later exercise of any other such right, power or remedy by such Party.   17.     Entire Agreement   17.1    This Agreement constitutes the entire agreement among the Parties with respect to the          subject matter hereof and supersedes all prior agreements, oral or written, among the          Parties with respect thereto, other than the RSA.   17.2    This  Agreement (excluding  (i)  the  Term  Sheet  other  than  the  provisions  of  the  Term          Sheet that relate to AOD’s participation in the RigCo cash pooling arrangements and the          application  of  Excess  Sales  Proceeds  (as  defined  in  the  Term  Sheet)  as  far  as  they          relate to rigs owned by the AOD Subsidiaries and (ii) the RSA) may only be varied in 





 






                                                       writing signed by each of the Parties.  For this purpose, a variation to this Agreement          shall include any addition, deletion, supplement or replacement, howsoever effected.   18.     Notices   18.1    All  notices  hereunder  shall  be  deemed  given  if  in  writing  and  delivered,  if  sent  by          electronic mail, courier, or  registered or certified mail  (return receipt requested) to the          following addresses (or at such other addresses as shall be specified by like notice):          Party and title of individual  Address          Mermaid Maritime Public        26/28-29, Orakarn Building, 9th Floor          Company Limited                Soi Chidlom, Ploenchit Road, Lumpinee,                                        Pathumwan, Bangkok 10330,                                         Thailand                                         Attention: Vincent Siaw, Chief Operating Officer                                         E-mail address: vincent.s@mermaid-group.com                                         With copies for information only (which shall not                                        constitute notice) to:                                                                                Attention: Phiboon Buakhunngamcharoen                                        E-mail address: phiboon.b@mermaid-group.com                                                                                Attention: Wuthichai Chongcharoenrungrot                                        E-mail address: wuthichai.c@mermaid-group.com                                                  Mermaid International          Clifton House,          Ventures                       75 Fort Street,                                         P.O. Box 1350,                                         Grand Cayman KY1-1108,                                         Cayman Islands                                         Attention: Vincent Siaw, Chief Operating Officer                                         E-mail address: vincent.s@mermaid-group.com                                         With copies for information only (which shall not                                        constitute notice) to:                                                                                Attention: Phiboon Buakhunngamcharoen                                        E-mail address: phiboon.b@mermaid-group.com                                                                                 Attention: Wuthichai Chongcharoenrungrot                                        E-mail address: wuthichai.c@mermaid-group.com                                                 New Seadrill                   New Seadrill                                        Par-la-Ville Place 





 






                                                                                     14 Par-la-Ville Road                                        Hamilton HM 08, Bermuda                                        Attention: Georgina Sousa                                        E-mail address: Gsousa@front.bm                                         with copies for information only (which shall not                                        constitute notice) to:                                         Seadrill Management Ltd.                                        (Corporate Headquarters)                                        2nd Floor                                        Building 11                                        Chiswick Business Park                                        566 Chiswick High Road                                        London W4 5YS                                        United Kingdom                                        Attention:  Chris Edwards                                        E-mail address:  Chris.Edwards@seadrill.com          Seadrill Limited               Seadrill Limited                                        Par-la-Ville Place                                        14 Par-la-Ville Road                                        Hamilton HM 08, Bermuda                                        Attention: Georgina Sousa                                        E-mail address: Gsousa@front.bm                                                                                with copies for information only (which shall not                                        constitute notice) to:                                         Seadrill Management Ltd.                                        (Corporate Headquarters)                                        2nd Floor                                        Building 11                                        Chiswick Business Park                                        566 Chiswick High Road                                        London W4 5YS                                        United Kingdom                                        Attention:  Chris Edwards                                        E-mail address:  Chris.Edwards@seadrill.com          Asia Offshore Drilling Limited Asia Offshore Drilling Limited                                        Par-la-Ville Place                                        14 Par-la-Ville Road                                        Hamilton HM 08, Bermuda                                        Attention:  Clare Burnard                                        E-mail address:  cburnard@front.bm                                        Attention:  Jon Olav Østhus                                        E-mail address:  jon.olav.osthus@seadrill.com    18.2    Any notice given by delivery, mail or courier shall be effective when received. 





 






                                               19.     Language   19.1    Each notice or  other  communication  under  or  in connection  with this Agreement  shall          be:           (A)    in English; or           (B)    if not in English, accompanied by an English translation made by a translator,                 and certified by an officer of the Party giving the notice to be accurate,           and in the case of any conflict between a notice and its English translation, the English          translation shall prevail.   19.2    The  receiving Party  shall  be  entitled  to  assume  the  accuracy  of  and  rely  upon  any          English translation of any document provided pursuant to Clause 19.1(B).   20.     Costs and Expenses           Except as otherwise stated in this Agreement, each Party shall pay its own costs and          expenses in relation to the negotiation, preparation, execution and carrying into effect of          this Agreement.   21.     Execution of Agreement           This Agreement may be executed and delivered in any number of counterparts and by          way  of  electronic  signature  and  delivery,  each  such  counterpart,  when  executed  and          delivered,  shall  be  deemed  an  original,  and  all  of  which  together  shall  constitute  the          same  agreement.   Except  as  expressly  provided  in  this  Agreement, each  individual          executing  this  Agreement  on  behalf  of  a Party  has  been  duly  authorised  and          empowered to execute and deliver this Agreement on behalf of said Party.   22.     Invalidity           If  at  any  time  any  provision  of  this  Agreement  is  or  becomes  illegal,  invalid  or          unenforceable in any respect under the law of any jurisdiction, that shall not affect or          impair:           (A)    the legality, validity or enforceability in that jurisdiction of any other provision of                 this Agreement; or           (B)    the  legality,  validity  or  enforceability  under  the law  of  any  other  jurisdiction  of                 that or any other provision of this Agreement.   23.     Permitted Disclosures   23.1    Each of the Parties may disclose this Agreement (or the contents of this Agreement) to          their Affiliates, to their and their Affiliates’ legal and professional advisers, to any person          to whom information is required to be disclosed by any governmental, banking, taxation          or  other  regulatory  authority  or  similar  body,  or  by  the  rules  of  any  relevant  stock          exchange  or  pursuant  to  a  request  by  any  such  body  with which  a  person  would  be 





 






                                                       reasonably expected to comply, or pursuant to any applicable law or regulation, in each          case on a confidential basis.    23.2    Without prejudice to Clause 23.1, RigCo and Seadrill may also disclose this Agreement          (or  the  contents  of  this  Agreement)  to  the  lenders  under  each  of  the  secured  credit          facility agreements entered into by Seadrill, RigCo and their respective Subsidiaries, to          each  other  “Consenting  Stakeholder”  under  and  as  defined  in  the  RSA,  and  to  each          other  bank,  financial  institution  or  entity  that  participates  in  the  restructuring  and          recapitalisation  in  respect  of  the  Seadrill  group’s  capital  structure,  as  contemplated  in          the  RSA,  in  each  case  only  to  the  extent  required  in  order  for  RigCo  or  Seadrill  to          comply with its obligations under the RSA, and in each case on a confidential basis.   23.3    Subject as provided in Clause 23.4, no Party shall make any public announcement in          relation to this Agreement and the transactions or arrangements hereby contemplated          or herein referred to or any matter ancillary hereto or thereto without the respective prior          written consent of the other Parties (which consent shall not be unreasonably withheld          or delayed).   23.4    This Clause shall not apply to any announcement required to be made pursuant to any          stock exchange listing rules or as required to be made as part of the Chapter 11 Cases           as to the contents of  which the Party making the same shall  have obtained the other          Parties’ consent (which consent shall not be unreasonably withheld or delayed).   24.     Third Parties and Assignment           This  Agreement  is  intended  to  bind  and  inure  to  the  benefit  of  the Parties  and  their          respective successors and permitted assigns, as applicable.  There are no  third party          beneficiaries under this Agreement, and the rights or obligations of any Party under this          Agreement may not be assigned, delegated or transferred to any other person or entity          (other than, for the avoidance of doubt, any successor of Seadrill or any entity to which          all or substantially all of Seadrill’s material assets are directly or indirectly transferred)          without the prior written consent of the other Parties.    25.     Specific Performance           It is understood and agreed by the Parties that money damages would be an insufficient          remedy for any breach of this Agreement by any Party and each non-breaching Party          shall be entitled to specific performance and injunctive or other equitable relief (without          the posting of any bond and without proof of actual damages) as a remedy of any such          breach, including an order of any court of competent jurisdiction requiring any Party to          comply promptly with any of its obligations hereunder.   26.     Governing law and Jurisdiction    26.1    This Agreement is governed by the laws of England and Wales.   26.2    Any dispute arising out of or in connection with this Agreement including any question          regarding its existence, validity or termination, shall be referred to and finally resolved          by  arbitration  administered  by  the  Singapore  International  Arbitration  Centre  in 





 






                                                       accordance  with  the  SIAC  Rules,  which  rules  are  deemed  to  be  incorporated  by          reference in this clause.    26.3    The  seat  of  the  arbitration  shall  be  Singapore.  The  Tribunal  shall  consist  of  one  (1)          arbitrator. The language of the arbitration shall be the English language.  





 






                                               IN WITNESS WHEREOF, the Parties have executed this Agreement on the date which first  appears above.      MERMAID MARITIME PUBLIC COMPANY LIMITED      By: _____________________________________   Name:   Title:      MERMAID INTERNATIONAL VENTURES      By: _____________________________________   Name:   Title:      SEADRILL LIMITED      By: _____________________________________   Name:   Title:      ASIA OFFSHORE DRILLING LIMITED      By: _____________________________________   Name:   Title: 





 






                                                                                       Schedule 1                                        (Term Sheet)                  SEADRILL LIMITED - RECAPITALISATION PLAN PROPOSAL           ASIA OFFSHORE DRILLING LIMITED - SUMMARY OF PROPOSED TERMS    This  document  sets  out a  summary  of the  terms  and  conditions  for  Asia  Offshore  Drilling  Limited’s (“AOD”) participation  in  the  RigCo  cross-collateralisation  and  cash  pooling  structure  under the recapitalisation plan for Seadrill Limited and its subsidiaries (including AOD) pursuant  to the RSA.  Further details of the terms and conditions of the recapitalisation plan are set out in  the term sheets at Exhibit A of the RSA and which are referenced in this term sheet.   1.      OVERVIEW OF SEADRILL LIMITED GROUP RECAPITALISATION PLAN   IHCo-RigCo-          A  new  intermediate  holding  company,  IHCo,  is  to  be  put  in  place  as  a  direct  NSNCo Structure      wholly-owned subsidiary of Seadrill Limited.                        A second new intermediate holding company, NSNCo, is to be put in place as a                       direct  wholly-owned  subsidiary  of  IHCo.   Seadrill  Limited’s  interests  in  certain                       entities to be hived down to sit directly or indirectly below NSNCo.                        A third new  intermediate  holding  company,  RigCo, is  to  be  put  in  place  as  a                       direct  wholly-owned  subsidiary  of  IHCo.  Rig-owners  and  intra-group  charterers                       and  Seadrill  Limited’s  interest  in  North  Atlantic  Drilling  Limited,  Asia  Offshore                       Drilling Limited and Sevan Drilling Limited to be hived down to sit directly below                       RigCo.  Seadrill  Management  Limited  and  Seadrill  Global  Services  Limited  to                       also be hived down to sit below RigCo.                        Subject  to  ongoing  discussions  with  lenders  under  the existing secured  facility                       agreements  entered  into  by  various  members  of   the  Seadrill  Limited                       consolidated group (the “Secured Facility Agreements”), it is currently intended                       that  a  new  UK-incorporated  entity  (“Cash  Pool  Co”)  will  be  established  as  a                       wholly  owned  subsidiary  of  RigCo  and  will  be  the  header  of  the  RigCo  Group                       cash pool.                        As part of the implementation of the recapitalisation plan, Seadrill  Limited may                       transfer  all  or  substantially  all  of  its  assets  to  a  new  holding  company,  with                       Seadrill  Limited  subsequently  liquidated.   For  the  purposes  of  this  term  sheet,                       references  to  “Seadrill  Limited”  therefore  include any  successor  of  Seadrill                       Limited or any entity to which all or substantially all of Seadrill Limited’s material                       assets are directly or indirectly transferred.   Secured Facility     Various amendments will be made to the Secured Facility Agreements, including  Agreements           the US$360,000,000 senior secured credit facility  agreement originally  dated 9                       April 2013 between, amongst others, Asia Offshore Rig 1 Limited, Asia Offshore                       Rig  2  Limited  and Asia  Offshore  Rig  3  Limited  as  borrowers  and ABN AMRO                       Bank  N.V. as  agent  (the  “AOD  Facility  Agreement”).  These  amendments  are                       intended to create an approximately five year runway, including by reprofiling the    551054107 





 






                                                                    maturity and amortisation schedules, and involve, amongst other things:                        •   maturity extensions of approximately 4 to 5.5 years;                        •   amendments  to  the  amortisation  profile  such  that  amended  amortisation                           payments commence from Q1 2020 with a  semi-annual mandatory sweep                           of 75% of excess cash held by RigCo and its subsidiaries above US$1.25                           billion to the lenders under the Secured Facility Agreements from 30 June                           2021 (the “Bank Mandatory Cash Sweep”); and                         •   a reset of financial covenants with the ability to equity cure.  Other than a                           RigCo  minimum  liquidity  covenant  which  applies  at  all  times,  no  financial                           covenants  which  trigger  an  event  of  default  will  apply  until  2022.   From                           2022,  there  will  be  new  RigCo  Debt  Service  Cover  Ratio  and  RigCo  Net                           Leverage financial covenants.  All  other financial covenants (including  the                           minimum market value covenant) to be deleted or waived.                        In return, amongst other things margins across the Secured Facility Agreements                       will  increase  by  100bps  and  consent  fees  will  be  payable.   In  addition,  the                       lenders under the Secured Facility Agreements will retain the benefit of existing                       security interests and guarantees granted in their favour and in addition will be                       cross-collateralised by being granted a shared guarantee and security package.                          Given  the  ownership  structure  of  AOD,  it  is  proposed  that  the  cross-                      collateralisation and cash pooling arrangements be modified in relation to AOD’s                       participation in the structure.  This is set out in further detail in Section 3 (AOD                       Participation in Cross-collateralisation and Cash Pooling) below.                        Refer to the term sheets at Exhibit A of the RSA for further detail on the terms of                       the  amendments  to  the  Secured  Facility  Agreements. In  the  event  of any                       inconsistency between the terms detailed in this Term Sheet and the provisions                       of the term sheets at Exhibit A of the RSA that relate to AOD, its creditors and its                       shareholders, this Term Sheet shall prevail.   New capital          Seadrill Limited will raise new capital in the amount of approximately US$1,080                       million which it is currently expected will be through:                        •  US$880 million of notes issued by NSNCo (the “New Secured Notes”); and                        •  US$200 million of new equity issued by Seadrill Limited.                        The form of the new capital is subject to change, including in a non-consensual                       implementation scenario.                        Refer to the term sheet for the New Secured Notes at Exhibit A of the RSA for                       further detail.   Implementation       It is anticipated that the Seadrill Limited recapitalisation plan will be implemented                       under voluntary cases commenced under chapter 11 of the US Bankruptcy Code 





 






                                                                    (“Chapter 11”).   2.      EQUITY IN AOD     Equity in AOD        Seadrill  Limited’s  shares  in  AOD  will  be  transferred  to  RigCo. Mermaid                       International Ventures (“Mermaid”) will retain its existing shares in AOD (subject                       to  the  exercise  of  put  option  and  call  option  rights  under  the  terms  of  a                       transaction  support  agreement  entered  into  between  Seadrill,  RigCo,  Mermaid                       and Mermaid Maritime Public Company Limited.   3.      AOD PARTICIPATION IN CROSS-COLLATERALISATION AND CASH POOLING   Cross-               The existing bank security and guarantee package (including as far as it applies  collateralisation    to assets of AOD and its subsidiaries) will remain in place.  First ranking security  security and         will also be granted in favour of the lenders under the respective Secured Facility  guarantee            Agreements  over  intercompany  loans  owed  to  RigCo  or  Cash  Pool  Co  by  a  structure            subsidiary  of  RigCo  subject  to  existing  share  security.  For  the  avoidance  of                       doubt, no additional security will be granted over AOD or any of its subsidiaries                       or any of their assets in favour of the lenders under any of the Secured Facility                       Agreements other than the AOD Facility Agreement.                         In  addition  cross-collateralisation to  be  implemented between the  Secured                       Facility Agreements by providing the following in favour of the lenders under the                       Secured Facility Agreements collectively:                        •   First ranking security over the shares in RigCo and Cash Pool Co                        •   First ranking security over intercompany loans made by RigCo to IHCo and                           by Cash Pool Co to RigCo                         •   First ranking security over intercompany loans made by IHCo to RigCo and                           by RigCo to Cash Pool Co                        •   First  ranking  security  over the  excess  sales  proceeds  escrow  accounts                           established  by  RigCo  and  any  other  members  of  the  RigCo  Group                           (excluding, for the avoidance of doubt, AOD or any of its subsidiaries), the                           bank  account  into  which  IHCo  (via  RigCo)  funds  contributions  and  the                           periodic  cash  sweep  accounts  established  by  cash  Pool  Co  and  other                           members of the RigCo Group (excluding, for the avoidance of doubt, AOD                           or any of its subsidiaries)                        •   First  ranking  security  (pari  passu  with  the  New  Secured  Notes)  over  the                           IHCo bank accounts                        •   First  ranking  security  over  the  bank  account  at  RigCo  which  will  hold                           contributions from RigCo which RigCo will pass on to Cash Pool Co                         •   First ranking security over the shares in certain newbuild entities, subject to 





 






                                                                        certain conditions                        •   First ranking guarantee from RigCo                        Refer to the term sheets at Exhibit A of the RSA for further detail.   RigCo cash           The  movement  of  cash  within  the  Seadrill  Limited  group  will  be  subject  to  the  pooling              terms  set  out  in  the  cash  pooling  term  sheet  at  Exhibit  A  of  the  RSA.   The                       provisions of the cash pooling term sheet will apply to AOD on the modified basis                       that is set out directly below.                         In  particular,  there  will  be  a  periodic  cash sweep of  cash  balances  held  by                       subsidiaries  of  RigCo but this  will  not apply  to AOD  in the  same way  as  it  will                       apply  to the  wholly-owned  subsidiaries  of RigCo. The cash pooling term sheet                       will allow AOD excess cash to be paid to Mermaid and RigCo in pro rata shares                       in the form of dividends or loans, on the terms set out below. The cash pooling                       term  sheet  will  require  that  any  pro  rata  share  of AOD  cash  paid  to  RigCo  is                       applied in accordance with cash sweep mechanics agreed with Seadrill’s lenders                       and investors. These principles will not apply to any pro rata share of AOD cash                       paid to Mermaid.                        •   AOD  will  not  pay  dividends  until  after 15 June  2021  (being  the  date  on                           which the Bank Mandatory Cash Sweep commences).                        •   Up to 15 June 2021, any cash held by AOD and its subsidiaries in excess                          of the higher of US$20 million and the amount of cash required by AOD and                          its subsidiaries to (i) meet its debt service obligations under the AOD Facility                          Agreement  (or  any  replacement  secured  credit  facility  agreement) for  the                          next  six  months,  (ii)  repay  any  loans  made  by RigCo  or  Cash  Pool  Co  to                          AOD  or AOD’s  subsidiaries and  (iii)  meet  ongoing  financial  and  operating                          costs and liabilities, may at the election of the directors of AOD appointed by                          Mermaid and the directors of AOD appointed by RigCo be paid  pro rata to                          RigCo and Mermaid (in each case pro rata to its equity stake in AOD) by way                          of  an  intercompany  loan  on  terms  to  be  agreed  (but  provided  that  the                          interest rate on such loans shall not be lower than the interest rate payable                          on  the  AOD  Facility  Agreement  and  AOD  shall  be  entitled  to  request                          repayment of such loans  on demand to the extent  that it requires funds to                          meet  its  operational  commitments,  and  provided  further  that  where  AOD                          requests  repayment  of  such  loans,  AOD  shall  request  repayment  of  such                          loans  by  each  of  RigCo  and  Mermaid,  in  each  case  pro  rata  to  its  equity                          stake in AOD) and on payment terms to be agreed between AOD and each                          of RigCo and Mermaid, respectively prior to drawdown.                        •   Mermaid,  RigCo  and  AOD  may  also  agree  that  guarantees  may  be                           provided by a Mermaid entity or by Seadrill Limited on terms to be agreed                           to  provide  credit  support  in  relation  to  repayment  of  the  loans  described                           above and directly below.                        •   On the last day of each semi-annual period, starting with the semi-annual 





 






                                                                        period  ending 15 June  2021,  any  cash held  by AOD  and  its  subsidiaries                           over the amount of cash required by AOD and its subsidiaries to (i) meet its                           debt service obligations for the next six months, (ii) fund any cash sweep as                           described in section C2 of the Secured Facilities term sheet in relation to                           the  AOD  Facility  Agreement on that  date,  (iii)  repay  any  loans  made  by                           RigCo  or  Cash  Pool  Co to  AOD  or  AOD’s  subsidiaries  and  (iv)  meet                           ongoing financial and operating costs and liabilities, shall be paid pro rata to                           RigCo and  Mermaid  (in each case pro rata to its equity stake in AOD) by                           way  of  intercompany  loans  on  terms  to  be  agreed  (but  provided  that  the                           interest rate on such loans shall not be lower than the interest rate payable                           on  the  AOD  Facility  Agreement  and  AOD  shall  be  entitled  to request                           repayment of such loans, on demand to the extent that it requires funds to                           meet its financial and operational costs and liabilities, and provided further                           that  where  AOD  requests  repayment  of  such  loans,  AOD  shall  request                           repayment of such loans by each of RigCo and Mermaid, in each case pro                           rata  to  its  equity  stake  in  AOD) and on  payment  terms  to  be  agreed                           between  AOD  and  each  of  RigCo  and  Mermaid,  respectively  prior  to                           drawdown.                             During  this  period  provided  that  the  cash  required  to  meet  the  items                           described in paragraphs (i) to (iv) above has been retained by AOD and its                           subsidiaries  and  AOD  and  its  subsidiaries  additionally  have  (and  will                           continue to have after any such dividend is paid) at least a free cash float in                           an  amount  to  be  agreed  with  the  lenders  under  the Secured  Facility                           Agreements  generated  from  its  own funds, the board  of  directors  of AOD                           may,  if  they  consider  it  appropriate,  elect  to  pay  dividends  to  the                           shareholders  of  AOD  instead  of  making  these  upstream  loans,  such                           dividends  to  be  paid  on a  pro  rata  basis  according  to  the  shareholders’                           shareholdings.     Excess sale          An excess sales proceeds escrow account will be established at RigCo. Further  proceeds             excess  sales proceeds  escrow  accounts  may  also  be  established  in other                       members  of  the  RigCo  group where  necessary  or  where  there  are  legal                       restrictions on upstreaming moneys to Cash Pool Co.                        Security  will  be  granted  over  the  excess  sales  proceeds  escrow  account(s) in                       favour of the lenders  under the Secured Facility Agreements on a first ranking                       basis and the holders of the New Secured Notes on a second ranking basis.                          Where  any  disposal  proceeds  remain  after  application  pursuant  to  the                       mandatory  prepayment requirements of a Secured Facilities Agreement (in the                       case  of  a  non-distressed  disposal) or  after  application  pursuant  to  a  Secured                       Facilities Agreement of recoveries following an enforcement sale (in the case of                       a distressed disposal) and after the payment of costs and expenses (including                       taxation)  of  the  disposal  (“Excess  Sales  Proceeds”), then such  Excess  Sales                       Proceeds  will  be  paid  into  the  relevant  excess  sales  proceeds  escrow                       account(s), provided that, for so long as there is a minority shareholder of AOD,                       any Excess Sale Proceeds relating to the AOD Facility Agreement will be applied 





 






                                                                    as follows:                        (A)    first,  to  repay  any  loans  made  by  RigCo  or  Cash  Pool  Co  to AOD  or                              AOD’s  subsidiaries,  and  such  amounts  shall  be  paid  into  the  relevant                              excess sales proceeds escrow account(s) at RigCo;                         (B)    RigCo’s  pro  rata  portion  (pro  rata  to  its  equity  stake  in  AOD)  of  any                              remaining  amounts  after  application  in  accordance  with  paragraph  (A)                              above  will  be  paid  into  the  relevant  excess  sales  proceeds  escrow                              account(s) at RigCo; and                        (C)    Mermaid’s  pro  rata  portion  (pro  rata  to  its  equity  stake in AOD)  of  any                              remaining  amounts  after  application  in  accordance  with  paragraph  (A)                              above will be available to be distributed to Mermaid.     4.      OTHER   Documentation        Amendments to the Secured Facility Agreements to be implemented by way  of                       amendment  and  restatement  agreements,  together  with  other  related                       documentation   including  security  documents,   intercreditor  agreement,                       contribution agreement and others to be agreed with the relevant parties.                        Seadrill Limited, RigCo and Mermaid to enter into an amendment in relation to                       the  existing  shareholders’  agreement  relating  to  AOD  in  order  to  reflect  the                       transactions contemplated in this Term Sheet.                        AOD’s bye-laws to be amended to reflect the transactions contemplated in this                       Term Sheet.    





 






                                                                                      Schedule 2                          (Put Option Notice and Call Option Notice)                                                                                                                   FORM OF PUT OPTION NOTICE / CALL OPTION NOTICE   To:                                     With a copy to                          For the attention of                                                                                                     Date [●]   Dear Sirs,   Transaction  Support  Agreement  between  Mermaid  International  Ventures,     Mermaid  Maritime  Public  Company  Limited,  Seadrill  Limited, [New  Seadrill], [RigCo]  and  Asia  Offshore Drilling Limited dated [●] (the “Agreement”)   We refer to the Agreement. Terms defined in the Agreement shall have the same meaning when  used in this letter.   We hereby:           (A)    give notice in accordance with Clause [8.1]/[8.2] of the Agreement that we are                 exercising the [Call] [Put] Option; and           (B)    acknowledge that this notice is irrevocable.   Clause 26 (Governing law and Jurisdiction) is incorporated into this letter as if set out in full and  as if references therein to “this Agreement” were references to “this letter”.   Yours faithfully,      ....................................................  For and on behalf of  [●]   





 






                                               ____________________________________________________________________________                                     ACKNOWLEDGMENT   [RigCo / Mermaid] acknowledges that it has received the [Put/Call] Option Notice from [RigCo /  Mermaid] given pursuant to the Transaction Support Agreement between Mermaid International  Ventures, Mermaid Maritime Public Company Limited, Seadrill Limited, [New Seadrill], [RigCo]  and Asia Offshore Drilling Limited dated [●]  (the “Agreement”) and that there subsists a binding  contract for the sale and purchase of the Mermaid AOD Shares (as that term is defined in that  Agreement) between Mermaid and RigCo on such terms and subject to such conditions as set  out in the Agreement.   Dated: [●]   Signed by............................................................     For and on behalf of [●]     





 






        Schedule 3     (RSA) 





 






                                                                                      Schedule 4                                    (Valuation Principles)   1.      Valuation Principles    1.1     For the avoidance of doubt, a reference to “Party” in this Schedule 4 is a reference to          either Mermaid or RigCo and a reference to “Parties” is to both Mermaid and RigCo.   1.2     With  respect  to  respective  appointments  of  and  work  to  be  performed  by  the  Valuers          and the Expert pursuant hereto, the following provisions shall apply:           (A)    the Parties (or in the case where both Valuers are selected by one Party then                 that  Party)  shall  enter  into  an  appropriate  form  of  appointment in  respect  of                 each of the Valuers and AOD with respect to the Expert, as soon as reasonably                 practicable  following  the  selection  of  the  Valuers  and  the  appointment  of  the                 Expert.  The  Parties  (or  in  the  case where  both  Valuers  are  selected by  one                 Party then that Party) shall act reasonably in agreeing the terms and conditions                 of such appointment, including (without limitation) in respect of fees, customary                 confidentiality  and  non-disclosure  obligations,  and  any  exclusions  and                 limitations of liability where it can be reasonably demonstrated that such terms                 and conditions reflect market standard provisions for such appointments;           (B)    the  Parties  shall  use  all  reasonable  endeavours  to  procure  that  each  of  the                 Valuers and the Expert appointed pursuant to this Agreement is promptly given                 all  such  assistance  and  access  to  all  such  information,  documentation  and                 personnel in its possession or control as each such Valuer and such Expert may                 each reasonably require in order to make his determination. This shall include                 without limitation unrestricted access to the books and records of AOD, the Rigs                 and Other Net Assets and the employees of AOD as well as to the employees of                 either Party having information about AOD and its business;             (C)    the  Valuers  and  the  Expert  shall  act  as  independent  experts  and  not  as                 arbitrators; and save in the case of fraud or manifest error (including the case                 where any Valuer fails to take into account any of the factors listed out in clause                 1.6  of  Schedule 4  which has  a material  effect  on  the  value  of  the  Rig  Market                 Value or Other Net Assets), the determination of the Rigs Market Value based                 on the valuations provided by the Valuers and the determination of the value of                 the Other Net Assets by the Expert as provided herein shall be final and binding                 on the Parties;            (D)    the  costs  of  each  of  the  Valuers  and  of  the  Expert  shall  be approved  by                 Mermaid and RigCo prior to their engagement and shall be borne by Mermaid                 and RigCo in equal amounts. Where a Party issues a Valuation Notice and does                 not proceed to issue an Option Notice within three (3) months of receipt of the                 Valuer’s  Report,   the  cost  of  each  of  the  Valuers  and  of  the  Expert  shall  be                 borne solely by that Party; and             (E)    each Party shall act reasonably and co-operate to give effect to the provisions                 of  this  Clause 1.2 and  otherwise  do  nothing  to  hinder  or  prevent  the  Valuers                 from reaching their valuation and the Expert from reaching its determination. 





 






                                               1.3     If the Valuer appointed by an Arbitrator in accordance with Clause 1.5(C) below fails for          any reason to render a determination on the Rigs Market Value within the relevant time          period,  either  Party  may  refer  the  matter  to  an  Arbitrator  who  shall  appoint  another          Valuer  that  he  considers  appropriate  to  replace this  additional Valuer  within  fourteen          (14) calendar days of his or her appointment.    1.4     If either  Party  determines  that  there  is a  manifest  error (which  is  supported  by          reasonably detailed evidence and includes the case where any Valuer fails to take into          account any of the factors listed in Clause 1.6 of Schedule 4 which has a material effect          on  the Rigs  Market  Value or  Other  Net  Assets) in the  calculation  of either  the  Rigs          Market Value or the Other Net Assets, the relevant Party may notify the Valuer and the          Expert within three (3) Business Days of such manifest error being determined by the          relevant Party. If, the Valuer or Expert (as applicable) fails to rectify the manifest error          within three (3) Business Days of notification by the relevant Party (the “Rectification          Period”), either Party may refer such manifest error to an Arbitrator by no later than the          date falling three (3) Business Days after the end of the Rectification Period.   1.5     Unless  otherwise  mutually agreed  by  the  Parties,  the  price  payable  for the  Mermaid          AOD Shares shall be determined as follows:            (A)    In the case of RigCo exercising the Call Option, if the Calculated Share Price of                 the Mermaid AOD Shares is less than the Floor Price, such valuation shall be                 deemed  to  be  the  Floor  Price  for  all  purposes  hereunder.  In  the  case  of                 Mermaid  exercising the  Put  Option,  if  the Calculated  Share  Price of  the                 Mermaid AOD Shares is greater than the Ceiling Price such valuation shall be                 deemed to be the Ceiling Price for all purposes hereunder.           (B)    In the event the value of the Rigs provided by the two Valuers are not equal, but                 the lower valuation is at least 90% of the higher valuation, then the Rigs Market                 Value shall be the average of the valuations provided by the two Valuers.           (C)    In the event the value of the Rigs provided by the two Valuers are not equal and                 the lower  valuation  is less  than 90% of the higher valuation, then either Party                 may,  within  ten  (10)  Business  Days  after  its  receipt  of  the  Valuer’s  Report,                 object  to  the  Rigs  Market  Value  being  the  average  of  the  two  valuations  and                 notify  the  other  Party  accordingly.  Both  Parties  shall  then  jointly  instruct  the                 Valuers  to  appoint  a  third  Valuer (an  “Additional  Valuer”).  If  within  ten  (10)                 Business Days of receipt of notice of objection the Valuers cannot agree upon                 an Additional Valuer, then either Party shall have the right to refer the matter to                 an Arbitrator who shall appoint an Additional Valuer within fifteen (15) calendar                 days  of  his  appointment. The  Arbitrator need  not  have  the  credentials  of  a                 Valuer or an Expert, but shall be an arbitrator with experience and expertise in                 handling  international  commercial  disputes  arising  in  the  offshore  oil  and  gas                 sector.                  Within ten (10) Business Days after its appointment, the Additional Valuer shall                 deliver  to  each  Party  a  valuation  report  that  sets  out  its  determination  of  the                 value of the Rigs, together with a detailed explanation of its rationale and bases                 for such determination. The Rigs Market Value shall be the average of the value                 of  the  Rigs provided  by  the Additional Valuer  and  the value  of  the  Rigs 





 






                                                              determined by the one of the first two Valuers whose value determination was                 closest  to  that  determined  by  the Additional Valuer;  provided,  however,  if  the                 Additional Valuer’s valuation is  within ten  percent (10%) of the average of the                 first two valuations, whether higher or lower, then the Rigs Market Value will be                 the average of all three Valuers’ valuations.                   If RigCo and Mermaid fail to object to the valuation with ten (10) Business Days                 after its receipt of the Valuer’s Report, the Rig Market Value will be the average                 of the two valuations provided by the two Valuers.   1.6     Each of the Valuers shall:           (A)    make  its  valuation  on  the  basis  that  the  price  shall  be  no  less  than  the  most                 probable price which a willing purchaser would offer to a willing seller at arm’s                 length transaction for the Rigs;           (B)    take  into  account  the  technical  specification  and  status  of  the  Rigs,  including                 customized  modifications,  age,  type,  design,  classification  status,  overall                 performance  capabilities,  water  depth  range,  variable  load  capacity  and                 environmental criteria;            (C)    take  into  account  the  supply  and  demand  for  offshore  mobile  drilling  units  of                 similar  age, type, design,  overall  performance capabilities,  water  depth range,                 variable  load  capacity  and  environmental  criteria  as  the  Rigs,  located  and                 operating in the same region and in other major oil and gas regions around the                 world;           (D)    take into account the principal commercial and legal terms of prevailing drilling                 contracts including options and potential drilling contracts under negotiation for                 the Rigs that are effective at the time of valuation as well as then-applicable day                 rates in the relevant region and world-wide, for offshore mobile drilling units of                 similar age, type, design, classification status, overall performance capabilities,                 water  depth  range,  variable  load  capacity  and  environmental  criteria  as  the                 Rigs;           (E)    take  into  account  the  cost  of  replacement  of  offshore  mobile  drilling  units,                 construction  and  delivery  to  the  same  region  and  world-wide  of  new  offshore                 mobile drilling units similar to the Rigs;           (F)    take  into  account  the  cash  flow  and  earnings  potential  of  the  Rigs  including                 appropriate cash flow discount rates and terminal value;           (G)    take  into  account general  market  information  collected  by  the  Valuers  (or  the                 Expert) in the ordinary course of business;            (H)    take  into  account  regular  discussions  with  participants  in  the  offshore  drilling                 market,  including  owners  and/or  operators  of  offshore  mobile  drilling units,  oil                 companies, shipyards, financial institutions and other market participants; and 





 






                                                       (I)    not  take  into  account  distressed  sales  or  transactions  in  which  the  sale  of                 offshore mobile drilling units operating in the same market segment as the Rigs                 is affected by special adverse circumstances except to the extent that any such                 distressed sale or specific adverse circumstances is  affecting the overall world-                wide offshore jack-up drilling market.    1.7     If any Valuer provides a range for its Rigs Market Value, the Parties agree to use the          mid-point of such range as the Rigs Market Value of the respective Valuer.   1.8     The Expert appointed by AOD shall provide its valuation of the Other Net Assets within          the  time  period  set  out in  Clause 9.2(B) of  the  Agreement and  shall  provide  its          determination  of  the  Fair  Market  Value and  the  Calculated  Share  Price including  its          detailed rationale and bases for its decision within ten (10) calendar days after receiving          written  notice  from  AOD of  the  Rigs  Market  Value.  The  Fair  Market  Value  shall  be          calculated as the sum of the Rigs Market Value and the value of the Other Net Assets   1.9     The Expert shall determine the Fair Market Value on the basis that it would be the most          probable price for the entire share capital of AOD that is available or could be obtained          in  an  open  and  unrestricted  market  in  a  transaction  between  an  informed  and  willing          buyer and an informed and willing seller acting at arms’ length and under no compulsion          to act, expressed  in terms  of money  or  money’s  worth and disregarding  (i)  any  value          that might be assigned by a purchaser or seller with a special interest, (ii) any value that          might be assigned in the event of a distressed sale or (iii) another situation where the          sale is affected by special circumstances.   1.10    If a Party  does  not  agree  on  the  Expert’s  valuation  of  the  Contingent  Liabilities,  the          Parties  shall  use  good  faith  reasonable  efforts  to  agree  on  a  valuation of  such          Contingent  Liabilities.  If  the  Parties  cannot  agree  on  a valuation of  the Contingent          Liabilities within  (10)  Business  Days  of  receiving  the  Expert’s  valuation,  the  Expert’s          valuation  shall  stand and  AOD  shall  use  its  best  efforts  to  resolve  such  Contingent          Liabilities  as  promptly  as  reasonably  possible  with  time  being  of  the  essence. With          respect to:            (A)    any  Contingent  Liability  less  than  or  equal  to  US$  1,000,000 that crystallises                 within 12 months of Completion, the difference between the Expert’s valuation                 of  the  Contingent  Liability  and  the amount  the Contingent Liability  crystallised                 for will be multiplied by the percentage the Mermaid AOD Shares represent of                 the entire issued share capital of AOD; and            (B)    any Contingent Liability in excess of US$ 1,000,000 that crystallises  within 18                 months  of  Completion,  the  difference  between  the  Expert’s  valuation  of  the                 Contingent Liability and the amount the Contingent Liability crystallised for will                 be  multiplied  by  the  percentage  the  Mermaid  AOD  Shares  represent  of  the                 entire issued share capital of AOD,            (the result of such multiplication in either case, being the “Contingent Liability True Up          Amount”). Where the Contingent Liability True Up Amount is a positive number, RigCo          will pay this  amount to  Mermaid. Where the Contingent  Liability True  Up Amount is a          negative amount, Mermaid will pay this amount to RigCo. The Contingent Liability True 





 






                                                       Up Amount  shall  be  paid  within  fifteen  (15)  Business  Days  of  the  Contingent  Liability          True Up Amount being determined.   1.11    Any Arbitrator appointed pursuant to this Agreement shall be instructed to, among other          issues,  take into  relevant  consideration this Agreement  and  the  input  provided  by  the          Valuers and/or an Expert, as applicable.     





 






                                                                                      Schedule 5                              (Form of RigCo Accession Notice)   To:     Mermaid Maritime Public Company Limited           Mermaid International Ventures           Asia Offshore Drilling Limited    From:   [RigCo] (the “Acceding Party”)   Date:   [●]   TRANSACTION  SUPPORT  AGREEMENT  ENTERED  INTO  BETWEEN  MERMAID  INTERNATIONAL  VENTURES,  MERMAID  MARITIME  PUBLIC  COMPANY  LIMITED,  SEADRILL  LIMITED  AND  ASIA  OFFSHORE  DRILLING  LIMITED  DATED  [●]  AS  SUPPLEMENTED, EXTENDED, RESTATED OR REPLACED (THE AGREEMENT)   We  refer  to the  Agreement. Terms  defined  in  the  Agreement  have  the  same meaning  in this  Accession Notice.   For  the  benefit  of  all  of  the  other  Parties,  the  Acceding  Party  undertakes  to  perform  all  the  obligations  expressed  in  the Agreement  to  be  assumed  by  RigCo and  agrees  that  it  shall  be  bound  by  all  the  provisions  of  the  Agreement,  as  if  it  had  been  an  original  party  to  the  Agreement.   The address, telephone number, email address and attention details for notices to the Acceding  Party are [●].   Clause 26 (Governing law  and Jurisdiction) is incorporated into this Accession Notice as if set  out  in full  and as  if  references  therein to “this Agreement”  were  references  to “this Accession  Notice”.   This Accession Notice has been executed into on the date stated above.   SIGNED by                                                     _________________________________________                     for and on behalf of [RigCo]                





 






                                                                                      Schedule 6                           (Form of New Seadrill Accession Notice)   To:     Mermaid Maritime Public Company Limited           Mermaid International Ventures           Asia Offshore Drilling Limited    From:   [New Seadrill] (the “Acceding Party”)   Date:   [●]   TRANSACTION  SUPPORT  AGREEMENT  ENTERED  INTO  BETWEEN  MERMAID  INTERNATIONAL  VENTURES,  MERMAID            MARITIME  PUBLIC  COMPANY  LIMITED,  SEADRILL  LIMITED  AND  ASIA  OFFSHORE  DRILLING  LIMITED  DATED  [●]  AS  SUPPLEMENTED, EXTENDED, RESTATED OR REPLACED (THE AGREEMENT)   We refer  to the  Agreement. Terms  defined  in  the  Agreement  have  the  same meaning  in this  Accession Notice.   For  the  benefit  of  all  of  the  other  Parties,  the  Acceding  Party  undertakes  to  perform  all  the  obligations expressed in the Agreement to be assumed by [New Seadrill] and agrees that it shall  be  bound  by  all  the  provisions  of  the  Agreement,  as  if  it had  been  an  original  party  to  the  Agreement.   The address, telephone number, email address and attention details for notices to the Acceding  Party are [●].   Clause 26 (Governing law  and Jurisdiction) is incorporated into this Accession Notice as if set  out  in full  and as  if  references  therein to “this Agreement”  were  references  to “this Accession  Notice”.   This Accession Notice has been executed into on the date stated above.   SIGNED by                                                     _________________________________________                     for and on behalf of [New Seadrill]