Document:

Exhibit 10.3

 

EXECUTION VERSION

 

	
 
    

 

REGISTRATION RIGHTS AGREEMENT

 

by and among

 

Paragon Offshore Limited

 

and

 

the Holders party hereto

 

Dated as of July 18, 2017

 

	
 
    

 

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into as of July 18, 2017, by and among Paragon Offshore Limited, an exempted company limited by shares incorporated under the laws of the Cayman Islands (the “Company”), as successor to Paragon Offshore plc, a public limited company incorporated under the laws of England and Wales (“Old Paragon”), the investors signatory hereto and any Permitted Transferee (as defined below) who hereafter becomes a party to this Agreement as contemplated in Section 7(b) hereof (each such party, an “Initial Holder” and together with any Permitted Group (as defined below), a “Holder” and, collectively, the “Holders”).

 

On February 14, 2016, Old Paragon and certain of its Affiliates filed voluntary petitions with the bankruptcy court initiating cases under chapter 11 of the Bankruptcy Code (collectively, the “Chapter 11 Cases”).  On May 2, 2017, Old Paragon filed with the bankruptcy court a Fifth Joint Chapter 11 Plan of Paragon Offshore plc and its Affiliated Debtors (as may be further amended, supplemented or otherwise modified, the “Paragon Plan”), and the related Disclosure Statement for the Fifth Joint Chapter 11 Plan of Paragon Offshore plc and its Affiliated Debtors.

 

Pursuant to the Paragon Plan, and in relation to Old Paragon’s emergence from the Chapter 11 Cases as set forth in the Paragon Plan (the “Effective Date”), the Initial Holders will exchange their claims against Old Paragon for, among other consideration, shares of the Company’s common stock, par value $0.001 per share (“Common Stock”).

 

This Agreement is made for the benefit of the Holders.  In connection with the Paragon Plan, the Company has agreed to provide the registration rights set forth in this Agreement.

 

The parties hereby agree as follows:

 

Section 1.              Definitions.

 

As used in this Agreement, the following capitalized terms shall have the following meanings:

 

“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), when used with respect to any Person, means the possession, directly or indirectly, of the power to cause the direction of management and/or policies of such Person, whether through the ownership of voting securities by contract or otherwise.

 

“Business Day” means any day other than a Saturday, Sunday or U.S. federal holiday or a day on which banking institutions or trust companies located in New York, New

 

 

York are authorized or obligated to be closed.  If the time to perform any action hereunder falls on a day that is not a Business Day, such time will be extended to the next Business Day.

 

“Closing Price” means the closing price of a share of Common Stock as reported on the principal national securities exchange on which the shares of Common Stock are listed or admitted for trading or, if no such closing price on such date is reported, the average of the closing bid and asked prices on such date, as so reported; or (ii) if not then listed or admitted to trading on any securities exchange but it is designated as a national market system security by the National Association of Securities Dealers, Inc., the last trading price of a share of Common Stock on such date; or (iii) if the Common Stock is not so designated, the average of the reported closing bid and asked prices of a share of Common Stock on such date as shown by the National Market System of the National Association of Securities Dealers, Inc. Automated Quotations System and reported by any member firm of the New York Stock Exchange selected by the Company; (iv) if not so reported and shown by the National Market System of the National Association of Securities Dealers, Inc. Automated Quotations System, the average of the reported closing bid and asked prices of a share of Common Stock on such date in the over-the-counter market or comparable system as shown by a system of automated dissemination of quotations of securities prices then in common use comparable to the National Association of Securities Dealers, Inc. Automated Quotations System or (v) if not determined in accordance with clauses (i) through (iv) above, then as determined by the board of directors of the Company in good faith.

 

“Commission” means the Securities and Exchange Commission.

 

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

 

“FINRA” means the Financial Industry Regulatory Authority, Inc.

 

“Indemnified Holder” has the meaning set forth in Section 6(a) hereof.

 

“Permitted Group” means any two or more beneficial owners (who may include Initial Holders) of Common Stock who were beneficial owners of Common Stock as of the Effective Date and collectively hold at least 15% of the outstanding Common Stock as of the date of a request for a Demand Registration (as defined herein) proposing to sell shares of Common Stock in such offering at an anticipated aggregate offering price (calculated based upon the Closing Price of the Common Stock on the date on which the Company receives the written request for such Demand Registration) of at least $30,000,000.

 

“Permitted Transferee” means any transferee of Registrable Securities in a transaction not involving a public offering; provided that such transferee agrees in writing to become a party to this Agreement.

 

“Person” means an individual, partnership, corporation, limited liability company, trust or unincorporated organization, or a government or agency or political subdivision thereof.

 

“Prospectus” means the prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto,

 

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including post-effective amendments, and all material incorporated by reference into such Prospectus.

 

“Registrable Securities” means all Common Stock held by the Initial Holders or Holders from time to time following the consummation of the Paragon Plan.  Registrable Securities include any shares of capital stock, warrants or other securities of the Company issued as a dividend or other distribution with respect to or in exchange for or in replacement of Registrable Securities.  As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when:  (a) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred or otherwise disposed of in accordance with such Registration Statement; (b) such securities shall have ceased to be outstanding; or (c) the amount of Registrable Securities held by any Holder together with its Affiliates in the aggregate is less than 8.0% of the outstanding Common Stock of the Company.

 

“Registration Statement” means a registration statement filed by the Company with the Commission in compliance with the Securities Act for a public offering and sale of equity securities (other than a registration statement on Form S-4 or Form S-8 (or any successor or substantially similar form), or in connection with (i) an employee stock option, stock purchase or compensation plan or securities issued or issuable pursuant to any such plan or (ii) a dividend reinvestment plan).

 

“Securities Act” means the Securities Act of 1933, as amended.

 

Section 2.              Demand Registration.

 

(a)           Request for Demand Registration.  At any time and from time to time, following the Effective Date, an Initial Holder or a Permitted Group (collectively, the “Initiating Holders”) may make a written request to the Company to register, and the Company shall register on a Registration Statement, under the Securities Act (other than pursuant to a Registration Statement on Form S-4 or S-8, or with respect to shares issued in an acquisition or any debt securities), in accordance with the terms of this Agreement (a “Demand Registration”), the number of Registrable Securities (or, in the case of a Permitted Group, shares of Common Stock) stated in such request; provided, however, that the Company shall not be obligated to effect (i) more than two (2) such Demand Registrations on behalf of the Initial Holders and more than one (1) such Demand Registration on behalf of a Permitted Group (it being agreed and understood that once a Demand Registration has been made by a Permitted Group (and consented to by the Company hereunder) no other Permitted Group may make a Demand Registration hereunder), (ii) a Demand Registration by an Initial Holder to sell Registrable Securities in such Demand Registration at an anticipated aggregate offering price (calculated based upon the Closing Price of the Registrable Securities on the date on which the Company receives the written request for such Demand Registration) to the public of less than $4,000,000 unless such Demand Registration includes all of the then-outstanding Registrable Securities, (iii) any such Demand Registration within 90 days (or such shorter period as the Company may determine in its sole discretion) of the effective date of a prior Registration Statement for an offering of Common Stock (other than a Registration Statement on Form S-4 or S-8, or with respect to shares issued in an acquisition or any debt securities), (iv) any such

 

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Demand Registration, other than a Demand Registration requested by a Permitted Group, if at the time the Company is not filing reports pursuant to Sections 13(a) or 15(d) of the Exchange Act or (v) a Demand Registration on behalf of a Permitted Group without the consent of the Company, such consent not to be unreasonably withheld.  The Company shall give written notice to each member of the Permitted Group of its determination to refuse such Demand Registration promptly after the occurrence thereof.  If the Company refuses a Demand Registration, such request shall not count as a Demand Registration for purposes of clause (i) above.

 

In addition, if the board of directors of the Company, in its good faith judgment, determines that any registration of securities should not be made or continued because it would materially interfere with any material or potentially material financing, acquisition, corporate reorganization or merger or other transaction involving the Company, including negotiations related thereto, or require the Company to disclose any material nonpublic information which would reasonably be likely to be detrimental to the Company or otherwise make it undesirable for the Company to complete a Demand Registration at that time (a “Valid Business Reason”), (x) the Company may postpone filing a Registration Statement (but not the preparation of the Registration Statement) relating to a Demand Registration until such Valid Business Reason no longer exists, but in no event for more than ninety (90) days after the date when the Demand Registration was requested or, if later, after the occurrence of the Valid Business Reason and (y) in case a Registration Statement has been filed relating to a Demand Registration, the Company may postpone amending or supplementing such Registration Statement (in which case, if the Valid Business Reason no longer exists or if more than one 90-day period has passed since such postponement, the Initiating Holders may request a new Demand Registration (which request shall not be counted as an additional Demand Registration for purposes of clause (i) above) or request the prompt amendment or supplement of such Registration Statement).  The Company shall give written notice to all Holders participating in the relevant Registration Statement of its determination to postpone filing, amending or supplementing a Registration Statement and of the fact that the Valid Business Reason for such postponement no longer exists, in each case, promptly after the occurrence thereof.  Notwithstanding anything to the contrary contained herein, the Company may not postpone a filing, amendment or supplement under this Section 2(a) due to a Valid Business Reason for more than 120 days in the aggregate in any twelve month period.  Each request for a Demand Registration by the Initiating Holders shall state the type and amount of securities proposed to be sold and the intended method of disposition thereof.

 

(b)           Incidental or “Piggy-Back” Rights with Respect to a Demand Registration.  Any Initial Holder which has not requested a registration under Section 2(a) hereof may, pursuant to this Section 2(b), offer its Registrable Securities under any Demand Registration.  In addition, in any offering pursuant to a Demand Registration requested by a Permitted Group (but not by an Initial Holder), every other beneficial holder of Common Stock shall be entitled to participate.  The Company may also offer its Common Stock under any Demand Registration.  The Company shall (i) as promptly as practicable, give written notice thereof to all of the Holders (other than the Initiating Holders) (and in an offering requested by a Permitted Group, to all other beneficial holders of Common Stock), which notice shall specify the number of shares of Common Stock subject to the request for Demand Registration, the names of the Initiating Holders and the intended method of disposition of such Common Stock, and (ii) subject to Section 2(d) hereof, include in the Registration Statement

 

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filed pursuant to the Demand Registration all of the shares of Common Stock held by such Holders (and in an offering requested by a Permitted Group, other beneficial holders of Common Stock) from whom the Company has received a written request for inclusion therein within ten days of the date on which the Company sent the written notice referred to in clause (i) above.  Each such request by such Holders (or, in the case of an offering requested by a Permitted Group, other beneficial holders of Common Stock) shall specify the number of shares of Common Stock proposed to be registered.  The failure of any Holder to respond within such ten-day period referred to in clause (ii) above shall be deemed to be a waiver of such Holder’s rights under this Section 2(b) with respect to such Demand Registration.  Any Holder may waive its rights under this Section 2(b) by giving written notice to the Company.  Any notice required to be delivered by the Company pursuant to this Section 2(b) to persons other than Initial Holders shall be provided in the form of an “Online Notice,” as such term is defined in the Shareholders’ Agreement, dated as of July 18, 2017, among the Company and the beneficial owners of Common Stock (the “Shareholders’ Agreement”), and in accordance with Section 6.03 of the Shareholders’ Agreement.

 

(c)           Effective Demand Registration.  Subject to Section 2(a), the Company shall use its commercially reasonable efforts to (i) file a Registration Statement relating to the Demand Registration as promptly as practicable thereafter and in any event, no later than seventy five (75) days after it receives a request under Section 2(a) hereof (provided that if the request for a Demand Registration is made by a Permitted Group at any time before the Company is filing reports pursuant to Sections 13(a) or 15(d) of the Exchange Act, such Registration Statement shall be filed no later than ninety (90) days after it receives such request by a Permitted Group), (ii) cause such Registration Statement to become effective as promptly as practicable thereafter, so long as, prior to the Company’s request for effectiveness, the Registration Statement reflects or has been amended to reflect post-Effective Date fresh-start accounting, and (iii) cause such Registration Statement to remain continuously effective (subject to postponement or blackout pursuant to a Valid Business Reason) for the lesser of (i) the period during which all Common Stock registered in the Demand Registration are sold or (ii) one hundred twenty days.

 

(d)           Underwriting Procedures.  If the Initiating Holders so elect, the Company shall use its commercially reasonable efforts to cause the offering made pursuant to such Demand Registration pursuant to this Section 2 to be in the form of a firm commitment underwritten offering and the managing underwriter or underwriters selected for such offering shall be the Approved Underwriter selected in accordance with Section 2(e) hereof.  In connection with any Demand Registration under this Section 2 involving an underwritten offering, none of the Common Stock held by any holder making a request for inclusion of such Common Stock pursuant to Section 2(a) or 2(b) hereof shall be included in such underwritten offering unless such holder (i) accepts the terms of the offering as agreed upon by the Company, the Initiating Holders and the Approved Underwriter (including, without limitation, offering price, underwriting commissions or discounts and lockup agreement terms), and then only in such quantity as set forth below and (ii) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements.

 

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If the Approved Underwriter advises the Company that the aggregate amount of such Common Stock requested to be included in such offering is sufficiently large to have a material adverse effect on the distribution or sales price of the Common Stock in such offering, then the Company shall include in such Demand Registration, on a pari passu basis, to the extent of the amount that the Approved Underwriter believes may be sold in an orderly manner at a price that is acceptable to the Initiating Holders without causing such material adverse effect, shares of Common Stock of the holders requested to be registered pursuant to such Demand Registration allocated pro rata among such holders participating in the offering based on the number of shares of Common Stock held by each such holder; and if the Approved Underwriter determines that additional securities may be included in such offering after including all of the shares of Common Stock of the participating holders requested to be registered pursuant to such Demand Registration, then the offering may include securities offered by the Company for its own account.

 

(e)           Selection of Underwriters.  If any Demand Registration is in the form of an underwritten offering, the Company shall select and obtain one or more investment banking firms of national reputation to act as the managing underwriter or underwriters of the offering; provided, however, that such firm or firms shall, in any case, also be approved by the Initiating Holders, such approval not to be unreasonably delayed or withheld.  An investment banking firm or firms selected pursuant to this Section 2(e) shall be referred to as the “Approved Underwriter” herein.

 

(f)            Withdrawal.  The Initiating Holders shall be entitled to withdraw or revoke a request for a Demand Registration without the prior written consent of the Company if (i) such withdrawal or revocation is as a result of facts or circumstances arising after the date on which a request for a Demand Registration was made and the Initiating Holders reasonably determine that participation in such registration would have a material adverse effect on the Initiating Holders, (ii) the Closing Price is more than twenty percent lower than the Closing Price on the date the Initiating Holders requested such Demand Registration or (iii) the Initiating Holders agree to pay all fees and expenses incurred by the Company in connection with such withdrawn registration (each, a “Permitted Withdrawal”).  If a Permitted Withdrawal occurs under clause (i) above, the related Demand Registration shall be counted as a Demand Registration for purposes of Section 2(a) hereof, and if a Permitted Withdrawal occurs under clauses (ii) or (iii) above, the related Demand Registration shall not be counted as a Demand Registration for purposes of Section 2(a) hereof.  Any Permitted Withdrawal shall constitute and effect an automatic withdrawal by all Initiating Holders and any other holder participating in such Demand Registration pursuant to the provisions of Section 2(b) hereof.

 

Section 3.              Incidental or “Piggy-Back” Registration

 

(a)           Request for Incidental or “Piggy-Back” Registration.  At any time after the Effective Date, if the Company proposes to file a Registration Statement with respect to an offering of Common Stock by the Company for its own account (other than a Registration Statement on Form S-4 or S-8, or with respect to shares issued in an acquisition or any debt securities or a registration statement on Form S-1 or Form S-3 covering solely an employee benefit or dividend reinvestment plan) or for the account of any stockholder of the

 

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Company other than Holders pursuant to Section 2 hereof, then the Company shall give written notice of such proposed filing to each of the Initial Holders at least ten days before the anticipated filing date, which notice shall describe the proposed registration and distribution and offer such Initial Holders the opportunity to register the number of Registrable Securities that each such Initial Holder may request (an “Incidental Registration”).  The Company shall use its commercially reasonable efforts to cause the managing underwriter or underwriters in the case of a proposed underwritten offering (the “Company Underwriter”) to permit each Initial Holder who has requested in writing to participate in the Incidental Registration pursuant to this Section 3(a) to include the number of such Initial Holder’s Registrable Securities indicated by such Initial Holder in such offering on the same terms and conditions as the Common Stock of the Company or the account of such other stockholder, as the case may be, included therein.  Any withdrawal of the Registration Statement by the Company for any reason shall constitute and effect an automatic withdrawal of any Incidental Registration related thereto.  In connection with any Incidental Registration under this Section 3(a) involving an underwritten offering, the Company shall not be required to include any Registrable Securities in such underwritten offering unless the Holders thereof accept the terms of the underwritten offering as agreed upon between the Company, such other stockholders, if any, and the Company Underwriter (including, without limitation, offering price, underwriting commissions or discounts and lock-up agreement terms), and then only in such quantity as set forth below.  If the Company Underwriter determines that the aggregate amount of the securities requested to be included in such offering is sufficiently large to have a material adverse effect on the distribution or sales price of the securities in such offering, then the Company shall include in such Incidental Registration, to the extent of the amount that the Company Underwriter believes may be sold in an orderly manner at a price that is acceptable to the Company without causing such material adverse effect, all of the securities to be offered for the account of the Company, in the case of a Company initiated Incidental Registration; if the Company Underwriter determines that additional securities may be included in such offering after including all of the securities to be offered for the account of the Company, then the offering may include on a pari passu basis (i) all of the securities to be offered for the stockholders (other than Holders) who have requested such Incidental Registration, in the case of a stockholder initiated Incidental Registration, and (ii) any Registrable Securities to be included in such Incidental Registration, pro rata among the Holders and any other stockholders with comparable contractual registration rights based on the number of securities held by each such Holder and such other stockholders.  For purposes of clarity and the avoidance of doubt, in the event of a Company initiated Incidental Registration or other Registration Statement initiated by the Company, the Company shall at all times have the right (but not the obligation) to include all of its securities before any other stockholder, including any Holder, may include any of its securities.  The Company shall have the right to terminate or withdraw any Incidental Registration prior to effectiveness, whether or not any Holder has elected to include Registrable Securities in such Incidental Registration.

 

Section 4.              Registration Procedures.

 

(a)           In connection with any Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of securities, the Company shall:

 

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(i)              use commercially reasonable efforts to keep such Registration Statement continuously effective during the period required by this Agreement and provide all requisite financial statements for such period; upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of securities during the period required by this Agreement, the Company shall as promptly as reasonably practicable file an appropriate amendment to such Registration Statement, in the case of clause (A), correcting any such misstatement or omission, and, if Commission review is required, shall use commercially reasonable efforts to cause such amendment to be declared effective and such Registration Statement and the related Prospectus to become usable for their intended purpose(s) as soon as practicable thereafter;

 

(ii)             use commercially reasonable efforts to prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective time for the period required by this Agreement; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with any applicable provisions of Rules 424 and 430A under the Securities Act in a timely manner; and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the period required by this Agreement in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus;

 

(iii)            advise each holder whose securities have been included in a Registration Statement, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to such Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Registrable Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (D) of the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading.  If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the securities subject to a Registration Statement under state securities or blue sky laws, the Company shall use commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest possible time;

 

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(iv)          furnish without charge, upon request, to each selling holder named in a Registration Statement, and each of the underwriter(s), if any, before filing with the Commission, copies of the Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement to the extent not then available via the Commission’s EDGAR system, but only to the extent they expressly relate to any offering to be effected thereunder), which documents will be subject to the review and comment of such holders and underwriter(s) in connection with such sale, if any, for a period of at least three Business Days, and the Company will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference, but only to the extent they expressly relate to any offering to be effected thereunder) to which a holder of securities covered by such Registration Statement or the underwriter(s), if any, shall reasonably object in writing within three Business Days after the receipt thereof (such objection to be deemed timely made upon confirmation of telecopy transmission within such period).  The objection of a holder or underwriter, if any, shall be deemed to be reasonable if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission.  Notwithstanding the foregoing, the Company shall not be required to take, or refrain from taking, any actions under this clause (iv) that are not, in the reasonable opinion of counsel for the Company, in compliance with applicable law;

 

(v)           promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus (but only to the extent such incorporated document expressly relates to any offering to be effected thereunder) in connection with such registration or sale, if any, provide copies of such document to each selling holder named in the Registration Statement in connection with such registration or sale, if any, and to the underwriter(s), if any, make the Company’s representatives available for discussion of such document and other customary due diligence matters subject to execution and delivery of customary confidentiality agreements, and include such information in such document prior to the filing thereof as such selling holders or underwriter(s), if any, reasonably may request to correct any material misstatement or omission contained therein or omitted therefrom or in order to comply with the applicable requirements of the Securities Act or the rules and regulations promulgated thereunder;

 

(vi)          make available at reasonable times for inspection by the selling holders, the underwriter(s), if any, participating in any disposition pursuant to such Registration Statement and any attorney or accountant retained by such selling holders or any of the underwriter(s), all financial and other records, pertinent corporate documents and properties of the Company and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such holder, underwriter, attorney or accountant in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness and to participate in meetings with investors to the extent requested by the underwriter(s), if any; provided that any holder, underwriter or representative of any

 

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holder or underwriter requesting or receiving such information shall agree to be bound by reasonable confidentiality agreements and procedures with respect thereto;

 

(vii)                           if requested by any selling holders or the underwriter(s), if any, promptly incorporate in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling holders and underwriter(s), if any, may reasonably request to have included therein to correct any material misstatement or omission contained therein or omitted therefrom or in order to comply with the applicable requirements of the Securities Act or the rules and regulations promulgated thereunder, including, without limitation, information relating to the “Plan of Distribution” of the securities, information with respect to the number of securities being sold to such underwriter(s), the purchase price being paid therefor and any other terms of the offering of the securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment;

 

(viii)                        upon request, furnish to each selling holder and each of the underwriter(s), if any, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including financial statements and schedules (without all documents incorporated by reference therein or exhibits thereto, unless requested);

 

(ix)                              upon request, deliver to each selling holder and each of the underwriter(s), if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; provided, that if no Registration Statement is effective or no Prospectus is usable, the Company shall deliver to each selling holder a notice to that effect in response to such request; the Company hereby consents to the use (in accordance with law and this Agreement) of the Prospectus and any amendment or supplement thereto by each of the selling holders and each of the underwriter(s), if any, in connection with the offering and the sale of the securities covered by the Prospectus or any amendment or supplement thereto;

 

(x)                                 upon the reasonable request of such holder, use commercially reasonable efforts to enter into such agreements (including an underwriting agreement containing customary terms), and make such representations and warranties, and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the securities pursuant to a Registration Statement contemplated by this Agreement, all to such extent as may be customarily and reasonably requested by any such holder or underwriter in connection with any sale or resale pursuant to a Registration Statement contemplated by this Agreement; and whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration, the Company shall use commercially reasonable efforts to:

 

(A)                               upon the request of any holder, furnish to each underwriter, if any, in such substance and scope as they may reasonably request and as are

 

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customarily made by issuers to underwriters in primary underwritten offerings, upon the date of the effectiveness of the Registration Statement:

 

(1)                                 an opinion and 10b-5 letter in customary form of counsel for the Company, covering the matters customarily covered in opinions and 10b-5 letters requested in similar underwritten offerings and such other matters as such parties may reasonably request; and

 

(2)                                 obtain a customary comfort letter, dated the date of effectiveness of the Registration Statement, from the Company’s independent accountants, in the customary form and covering matters of the type customarily requested to be covered in comfort letters by underwriters in connection with primary underwritten offerings;

 

(B)                               deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with clause (A) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company; and

 

(C)                               upon the request of the Initiating Holders, Permitted Group or underwriter, seek to effect the listing of the securities being offered on a national securities exchange if the listing criteria of such exchange are then met or capable of being met;

 

(xi)                              prior to any public offering, cooperate with the selling holders, the underwriter(s), if any, and their respective counsel in connection with the registration and qualification of the securities to be sold under the state securities or blue sky laws of such jurisdictions within the United States of America as the selling holders or underwriter(s), if any, may reasonably request and do such other acts or things reasonably necessary or advisable to permit the disposition in such jurisdictions of the securities covered by the Registration Statement in a manner that is in compliance with the applicable laws of such jurisdiction provided that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (xi), (B) conform its capitalization or the composition of its assets at the time to the securities or blue sky laws of any such jurisdiction, (C) subject itself to taxation in any such jurisdiction or (D) consent to general service of process in any such jurisdiction;

 

(xii)                           if any fact or event contemplated by Section 4(a)(iii)(D) hereof shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of securities to be sold thereunder, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading;

 

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(xiii)                        cause its executive officers to use their commercially reasonable efforts to support the marketing of the securities covered by the Registration Statement (including participation in “road shows” in a customary manner) taking into account the Company’s business needs;

 

(xiv)                       cooperate and assist in any filings required to be made with FINRA and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter”) that is required to be retained in accordance with the rules and regulations of FINRA; and

 

(xv)                          otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 under the Securities Act (which need not be audited) for the twelve-month period commencing after the effective date of the Registration Statement.

 

(b)                                       Restrictions on Holders.

 

(i)                                     Subject to the provisions of this Section 4(b), following the effectiveness of a Registration Statement, the Company may direct the holders, in accordance with Section 4(b)(ii), to suspend sales of securities pursuant to such Registration Statement and the use of any Prospectus or preliminary Prospectus contained therein for such times as the Company reasonably may determine are necessary and advisable (but in no event, (A) in the case of clause (1) below, for more than 60 consecutive days and (B) in the case of clauses (1), (2) and (3) below, for more than an aggregate of 120 days in any consecutive 12-month period commencing on the date hereof or more than 90 days in any consecutive 120-day period, except, in the case of clause (B), as a result of a review of any post-effective amendment by the Commission prior to declaring any post-effective amendment to the Registration Statement effective, provided that the Company has used its commercially reasonable efforts to cause such post-effective amendment to be declared effective), if any of the following events shall occur:  (1) the representative of the underwriters of an underwritten offering of Common Stock has advised the Company that the sale of securities pursuant to such Registration Statement would have a material adverse effect on such underwritten offering; (2) the majority of the Company’s board of directors shall have determined in good faith that (a) the offer or sale of any securities would materially impede, delay or interfere with any proposed financing, offer or sale of securities, acquisition, merger, consolidation, business combination, disposition, tender offer, corporate reorganization or other significant transaction involving the Company, (b) upon the advice of counsel, the sale of securities pursuant to such Registration Statement would require disclosure of non-public material information not otherwise required to be disclosed under applicable laws or (c) (i) the Company has a bona fide business purpose for preserving the confidentiality of such transaction, (ii) disclosure would have a material adverse effect on the Company or the Company’s ability to consummate such transaction or (iii) the proposed transaction renders the Company unable to comply with Commission requirements, in each case under circumstances that would make it impractical or inadvisable to cause the

 

12

 

Registration Statement to become effective or to promptly amend or supplement the Registration Statement on a post-effective basis, as applicable; or (3) the majority of the Company’s board of directors shall have determined in good faith that it is required by law, rule or regulation or Commission-published release or interpretation to supplement the Registration Statement or file a post-effective amendment to the Registration Statement in order to incorporate information into the Registration Statement, including for the purpose of (a) including in the Registration Statement any prospectus required under Section 10(a)(3) of the Securities Act, (b) reflecting in the Prospectus any facts or events arising after the effective date of the Registration Statement (or of the most recent post-effective amendment) that, individually or in the aggregate, represents a fundamental change in the information set forth therein, or (c) including in the Prospectus any material information with respect to the plan of distribution not disclosed in the Registration Statement or any material change to such information.  Upon the occurrence of any such suspension, the Company shall use commercially reasonable efforts to cause the Registration Statement to become effective or to promptly amend or supplement the Registration Statement on a post-effective basis or to take such action as is necessary to make resumed use of the Registration Statement compatible with the Company’s best interests, as applicable, so as to permit the holders to resume sales of securities as soon as possible.

 

(ii)                                  Each holder agrees that, upon receipt of the notice referred to in Section 4(a)(iii)(C), any notice from the Company of the existence of any fact of the kind described in Section 4(a)(iii)(D) hereof or a notice from the Company of any of the events set forth in Section 4(b)(i) (in each case, a “Suspension Notice”), such holder will forthwith discontinue disposition of securities pursuant to the Registration Statement until (A) such holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 4(a)(xii) hereof, or (B) it is advised in writing by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus.  Each holder receiving a Suspension Notice hereby agrees that it will either (1) destroy any Prospectuses, other than permanent file copies, then in such holder’s possession that have been replaced by the Company with more recently dated Prospectuses, or (2) deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such holder’s possession, of the Prospectus covering such securities that was current at the time of receipt of such notice.

 

Section 5.                                           Registration Expenses.

 

(a)                                       Except as provided in Section 2(f) hereof, all expenses incident to the Company’s performance of or compliance with this Agreement (except for any underwriters’ discounts or commissions; provided, however, that during the five (5) years following the Effective Date, the Company agrees to pay all underwriters’ discounts and commissions relating to a Demand Registration requested by a Permitted Group pursuant to Section 2(a) hereof) will be borne by the Company regardless of whether a Registration Statement becomes effective, including, without limitation:  (i) all registration and filing fees and expenses (including filings made by any Holder with FINRA (and, if applicable, the fees and expenses of any “qualified independent underwriter” and its counsel that may be required by the

 

13

 

rules and regulations of FINRA)); (ii) all fees and expenses of compliance with federal securities and state securities or blue sky laws; (iii) all fees and disbursements of counsel for the Company and reasonable and documented fees and disbursements for one counsel for all of the holders of securities; and (iv) all fees and disbursements of independent certified public accountants of the Company (including the expenses of any special audit and comfort letters required by or incident to such performance).

 

The Company will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company.

 

(b)                                       In connection with a Registration Statement required by this Agreement, the Company will reimburse the holders of securities being registered pursuant to the Registration Statement for the reasonable and documented fees and disbursements of one counsel for all of such holders.

 

Section 6.                                           Indemnification.

 

For purposes of this Section 6, in connection with any offering by a Permitted Group, references to a “Holder” shall include all beneficial holders participating or proposing to participate in such offering.

 

(a)                                       The Company agrees to indemnify and hold harmless (i) each Holder and (ii) each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of the Persons referred to in this clause (ii) being hereinafter referred to as a “controlling person”) and (iii) the respective officers, directors, partners, employees, representatives and agents of any Holder or any controlling person (any Person referred to in clause (i), (ii) or (iii) may hereinafter be referred to as an “Indemnified Holder”), to the fullest extent lawful, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses (including, without limitation, and as incurred, reimbursement of all reasonable out-of-pocket costs of investigating, preparing, pursuing, settling, compromising, paying or defending any claim or action, or any investigation or proceeding by any governmental agency or body, commenced or threatened, including the reasonable fees and expenses of counsel to any Indemnified Holder), directly or indirectly caused by, related to, based upon, arising out of or in connection with any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or Prospectus (or any amendment or supplement thereto), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses are caused by an untrue statement or omission or alleged untrue statement or omission that is based upon information relating to any of the Holders furnished in writing to the Company by or on behalf of any of the Holders expressly for use therein or out of sales of securities made during a suspension period after notice is given pursuant to Section 4(b) hereof.  This indemnity agreement shall be in addition to any liability that the Company may otherwise have.

 

14

 

In case any action or proceeding (including any governmental or regulatory investigation or proceeding) shall be brought or asserted against any of the Indemnified Holders with respect to which indemnity may be sought against the Company, such Indemnified Holder (or the Indemnified Holder controlled by such controlling person) shall promptly notify the Company in writing; provided, however, that the failure to give such notice shall not relieve the Company of its obligations pursuant to this Agreement except to the extent that it had been materially prejudiced by such failure (through forfeiture of substantive rights).  The Company may assume the defense of such action or proceeding at its own expense, with counsel reasonably satisfactory to such Indemnified Holder, unless such assumption would be inappropriate due to actual or potential differing or conflicting interests between the Company and the Indemnified Holder.  In any such proceeding so assumed by the Company, any Indemnified Holder shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Holder unless (i) the Company and the Indemnified Holder shall have mutually agreed to the retention of such counsel, (ii) representation of both parties by the same counsel would be inappropriate due to actual or potential differing or conflicting interests between them or (iii) the Company does not assume the defense of such action or proceeding.  The Company shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for such Indemnified Holders, which firm shall be designated by the Holders.  The Company shall be liable for any settlement of any such action or proceeding effected with the Company’s prior written consent, which consent shall not be withheld unreasonably, and the Company agrees to indemnify and hold harmless any Indemnified Holder from and against any loss, claim, damage, liability or reasonable out-of-pocket expense by reason of any settlement of any action effected with the written consent of the Company.  The Company shall not, without the prior written consent of each Indemnified Holder, settle or compromise or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, claim, litigation or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not any Indemnified Holder is a party thereto), unless such settlement, compromise, consent or termination (i) includes an unconditional release of each Indemnified Holder from all liability arising out of such action, claim, litigation or proceeding and (ii) does not include a statement as to an admission of fault, culpability or a failure to act, by or on behalf of the Indemnified Holder.

 

(b)                                       Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company and the directors and officers of the Company who sign a Registration Statement, and any Person controlling (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) the Company, and the respective officers, directors, partners, employees, representatives and agents of each such Person, from and against any and all losses, claims, damages, liabilities, judgments, actions and expenses to the same extent as the foregoing indemnity from the Company to each of the Indemnified Holders, but only with respect to claims and actions based on information relating to such Holder furnished in writing by or on behalf of such Holder expressly for use in a Registration Statement.  In case any action or proceeding shall be brought against the Company or its directors or officers or any such controlling Person or its respective officers, directors, partners, employees, representatives and agents in respect of which indemnity may be sought against a Holder, such Holder shall have the

 

15

 

rights and duties given the Company, and the Company, its directors and officers, such controlling person and its respective officers, directors, partners, employees, representatives and agents shall have the rights and duties given to each Holder by the preceding paragraph.  Notwithstanding the provisions of this Section 6, the total amount to be paid by a Holder pursuant to this Section 6(b) shall be limited to the net proceeds (after deducting underwriters’ discounts and commissions) received by such Holder in the offering to which such Registration Statement or prospectus relates.

 

(c)                                        If the indemnification provided for in this Section 6 is unavailable to an indemnified party under Section 6(a) or (b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities, judgments, actions or expenses referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the Company, on the one hand, and the Holders, on the other hand, in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.  The relative fault of the Company, on the one hand, and of the Holders, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or the Holders, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.

 

The Company and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 6(c) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 6, the total amount to be contributed by a Holder pursuant to this Section 6 shall be limited to the net proceeds (after deducting underwriters’ discounts and commissions) received by such Holder in the offering to which such Registration Statement or prospectus relates.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  The Holders’ obligations to contribute pursuant to this Section 6(c) are several in proportion to the respective number of securities held by each of the Holders hereunder and not joint.

 

16

 

Section 7.                                           Miscellaneous.

 

(a)                                       Remedies.  The Company hereby agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

 

(b)                                       Assignment; No Third Party Beneficiaries; Additional Parties.  This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.  This Agreement and the rights, duties and obligations of the Holders hereunder may be freely assigned or delegated by such Holder in conjunction with and to the extent of any transfer of Registrable Securities by any such Holder to a Permitted Transferee.  This Agreement is not intended to confer any rights or benefits on any persons that are not party hereto other than as expressly set forth in this Section 7(b).  For the avoidance of doubt, this Agreement is intended to confer all rights and benefits relating to a Demand Registration initiated by a Permitted Group to members of such Permitted Group and any beneficial holder who participates in such Demand Registration, provided that such Permitted Group member or beneficial holder executes and delivers to the Company an instrument, in form and substance reasonably satisfactory to the Company, to evidence its agreement to be bound by, and to comply with, all of the obligations of a Holder hereunder.

 

(c)                                        No Inconsistent Agreements.  The Company will not on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.  The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company’s securities under any agreement in effect on the date hereof.

 

(d)                                       Amendments and Waivers.  The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless (i) the Company has obtained the written consent of Holders of a majority of the outstanding Registrable Securities then held by the Initial Holders (excluding any Registrable Securities held by the Company or its subsidiaries) and (ii) the Company has provided its consent to such amendment, modification, supplement, waiver, consent or departure; provided, however, that, with respect to any matter that directly or indirectly affects the rights of any Initial Holder hereunder, the Company shall obtain the written consent of each such Holder with respect to which such amendment, qualification, supplement, waiver, consent or departure is to be effective, and provided further, provisions herein related to offerings by a Permitted Group may not be amended in a manner materially adverse to any beneficial holder without the consent of the beneficial holders of two-thirds of the then outstanding Common Stock.

 

(e)                                        Notices.  (A) Except as set forth in paragraph (B) below, all notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, e-mail or air courier guaranteeing overnight delivery:

 

(i)                                     if to a Holder, at the address set forth on the signature page hereto; and

 

17

 

(ii)                                  if to the Company:

 

	
Paragon   Offshore Limited
    
	
3151   Briarpark Drive
    
	
Suite 700
    
	
Houston,   TX 77042
    
	
Attention:   Legal Department
    
	
Facsimile:   (832) 218-0694
    
	
Email:   TStrickler@paragonoffshore.com
    

 

All such notices and communications shall be deemed to have been duly given:  at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied or sent by e-mail; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

 

(B)                                     All notices and other communications provided for or permitted hereunder to be made to a holder who is not a Holder may be given by Online Notice and shall be deemed to have been given on the date the Company has posted or otherwise delivered such notice.

 

(f)                                         Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent Holders of Registrable Securities; provided, however, that this Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the extent such successor or assign is a Permitted Transferee of such Holder.

 

(g)                                        Counterparts.  This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

(h)                                       Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(i)                                           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws principles.

 

(j)                                          Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

(k)                                       Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive

 

18

 

statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Company with respect to the Registrable Securities.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

(l)                                           Use of Free Writing Prospectus.  No holder shall use a free writing prospectus prepared by or on behalf of the relevant holder or used or referred to by such holder in connection with the offering of securities pursuant to a Registration Statement without the prior written consent of the Company, which shall not be unreasonably withheld.

 

(m)                                   Rules 144 and 144A.  The Company shall make publicly available such information required by Rule 144(c) and Rule 144A(d)(4) for so long as necessary to permit sales pursuant to Rule 144 or Rule 144A  under the Securities Act, as such Rules may be amended from time to time or any similar rule or regulation hereafter adopted by the SEC (which replaces Rule 144 o Rule 144A), to enable such Holder to sell Registrable Securities without Registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144 or Rule 144A  under the Securities Act, as such rules may be amended or replaced from time to time.  Upon the request of any Holder, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements.

 

19

 

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

 

	
 
    	
PARAGON   OFFSHORE LIMITED
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Dean Edward Taylor
    
	
 
    	
 
    	
Name:   Dean Edward Taylor
    
	
 
    	
 
    	
Title:   Director
    

 

[Signature Page to Registration Rights Agreement]

 

 

The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written:

	
 
    	
LOOMIS,   SAYLES & COMPANY, L.P., as investment manager for Holders
    
	
 
    	
By:   LOOMIS, SAYLES & COMPANY, INCORPORATED
    
	
 
    	
Its   General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas H. Day
    
	
 
    	
 
    	
Name:   Thomas H. Day
    
	
 
    	
 
    	
Title:   Assistant General Counsel
    

 

[Signature Page to Registration Rights Agreement]Exhibit 10.4

 

EXECUTION VERSION

 

Dated as of July 18, 2017

 

PARAGON OFFSHORE LIMITED

 

and

 

the beneficial owners of ordinary shares of Paragon Offshore Limited

from time to time

 

	
 
    	
 
    	
 
    

 

SHAREHOLDERS’ AGREEMENT

	
 
    	
 
    	
 
    

 

 

Contents

 

	
Document
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I   DEFINITIONS
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE II   [INTENTIONALLY OMITTED]
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE III   PRE-EMPTIVE RIGHTS
    	
7
    
	
 
    	
 
    	
 
    
	
Section 3.01
    	
Pre-emptive Rights
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE IV   COVENANTS
    	
8
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
Notice of 10%   Ownership; Transfers
    	
8
    
	
 
    	
 
    	
 
    
	
Section 4.02
    	
Transactions with   Interested Shareholders
    	
9
    
	
 
    	
 
    	
 
    
	
Section 4.03
    	
Takeovers by   Controlling Persons
    	
9
    
	
 
    	
 
    	
 
    
	
Section 4.04
    	
Corporate Opportunities
    	
11
    
	
 
    	
 
    	
 
    
	
Section 4.05
    	
Deregistration
    	
11
    
	
 
    	
 
    	
 
    
	
Section 4.06
    	
DTC
    	
11
    
	
 
    	
 
    	
 
    
	
Section 4.07
    	
Information Rights
    	
12
    
	
 
    	
 
    	
 
    
	
Section 4.08
    	
Inspection Rights
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE V   TERM AND TERMINATION
    	
15
    
	
 
    	
 
    	
 
    
	
Section 5.01
    	
Termination
    	
15
    
	
 
    	
 
    	
 
    
	
Section 5.02
    	
Effect of Termination
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE VI   MISCELLANEOUS
    	
15
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Expenses
    	
15
    
	
 
    	
 
    	
 
    
	
Section 6.02
    	
Release of Liability
    	
16
    
	
 
    	
 
    	
 
    
	
Section 6.03
    	
Notices
    	
16
    
	
 
    	
 
    	
 
    
	
Section 6.04
    	
Interpretation
    	
16
    
	
 
    	
 
    	
 
    
	
Section 6.05
    	
Headings
    	
17
    
	
 
    	
 
    	
 
    
	
Section 6.06
    	
Severability
    	
17
    
	
 
    	
 
    	
 
    
	
Section 6.07
    	
Successors and Assigns
    	
17
    
	
 
    	
 
    	
 
    
	
Section 6.08
    	
No Third-party   Beneficiaries
    	
17
    
	
 
    	
 
    	
 
    
	
Section 6.09
    	
Amendment and   Modification; Waiver
    	
17
    
	
 
    	
 
    	
 
    
	
Section 6.10
    	
Governing Law
    	
18
    
	
 
    	
 
    	
 
    
	
Section 6.11
    	
Jurisdiction
    	
18
    
	
 
    	
 
    	
 
    
	
Section 6.12
    	
Waiver of Jury Trial
    	
18
    
	
 
    	
 
    	
 
    
	
Section 6.13
    	
Equitable Remedies
    	
18
    
				

 

 

	
 
    	
 
    	
 
    
	
Section 6.14
    	
Conflict with Articles
    	
19
    
	
 
    	
 
    	
 
    
	
Section 6.15
    	
Enforcement
    	
19
    
	
 
    	
 
    	
 
    
	
Section 6.16
    	
Transactions between   the Company and Directors or Officers
    	
19
    

 

ii

 

SHAREHOLDERS’ AGREEMENT (the “Agreement”) of Paragon Offshore Limited, an exempted company limited by shares incorporated under the laws of the Cayman Islands (the “Company”).

 

Recitals

 

WHEREAS, the Company has been incorporated pursuant to the fifth joint chapter 11 plan of reorganization of Paragon Offshore plc (in administration) and its affiliated debtors (the “Chapter 11 Plan”) for the purposes of serving as the holding company of the Transferred Subsidiaries;

 

WHEREAS, Neville Barry Kahn and David Philip Soden, each of Deloitte LLP, are the joint administrators of Paragon Offshore Plc (in administration) (the “Joint Administrators”), and the affairs, business and property of Paragon Offshore Plc (in administration) are managed by the Joint Administrators;

 

WHEREAS, pursuant to the United States Bankruptcy Court, District of Delaware court order confirming the Chapter 11 Plan (the “Confirmation Order”), this Agreement shall become effective on the Effective Date and shall bind the Company, all beneficial owners of Ordinary Shares as at the Effective Date (the “Initial Shareholders”) and all other beneficial owners of Ordinary Shares from time to time, and the Initial Shareholders’ and such other holders’ respective successors and assigns (such Persons collectively, the “Shareholders”), as if such Shareholders had duly executed this Agreement;

 

WHEREAS, pursuant to the U.K. Implementation Agreement, as of the date hereof, the Initial Shareholders have exchanged all of their Claims (as defined in the Chapter 11 Plan) for 100% of the issued Ordinary Shares of the Company (exclusive of any Ordinary Shares issued from time to time to management of the Company pursuant to the Management Incentive Plan);

 

WHEREAS, each Initial Shareholder holds its Ordinary Shares through DTC, such that DTC or its nominee holds the legal title to all Ordinary Shares but each Initial Shareholder is the beneficial owner of its Ordinary Shares;

 

WHEREAS, the Confirmation Order provides that, except as otherwise expressly provided in the Chapter 11 Plan or in the Confirmation Order, each Shareholder is enjoined from asserting, commencing or prosecuting any action against DTC in relation to the Shareholders Agreement or the Chapter 11 Plan; and

 

WHEREAS, the Initial Shareholders and the Company deem it in their best interests to set forth in this Agreement certain of the rights and obligations of the Shareholders and of the Company.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each Shareholder by virtue of its beneficial ownership of Ordinary Shares, and each of their respective successors and assigns, hereby agree as follows:

 

 

ARTICLE I
 DEFINITIONS

 

Capitalized terms used herein and not otherwise defined shall have the meanings set forth in this Article I.

 

“Acceptance Notice” has the meaning set forth in Section 4.03(c).

 

“Acceptance Period” has the meaning set forth in Section 4.03(c).

 

“Affiliate” means with respect to any Person, any other Person who, directly or indirectly (including through one or more intermediaries), controls, is controlled by, or is under common control with, such Person; and the term “Affiliated” shall have a correlative meaning. For purposes of this definition, “control,” when used with respect to any specified Person, shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities or partnership or other ownership interests, by contract or otherwise; and the terms “controlling” and “controlled” shall have correlative meanings.  For purposes of this Agreement, (i) no Shareholder shall solely by reason of this Agreement be deemed to be an Affiliate of any other Shareholder or of the Company or any of its Subsidiaries and (ii) neither DTC nor any similar nominee shall be an Affiliate of a Shareholder solely by reason of such Shareholder’s ownership of Ordinary Shares through DTC or any similar nominee.

 

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

 

“Applicable Law” means all applicable provisions of (a) constitutions, treaties, statutes, laws (including the common law), rules, regulations, decrees, ordinances, codes, proclamations, declarations or orders of any Governmental Authority, (b) any consents or approvals of any Governmental Authority and (c) any orders, decisions, advisory or interpretative opinions, injunctions, judgments, awards, decrees of, or agreements with, any Governmental Authority.

 

“Articles” means the memorandum and articles of association of the Company, as amended, modified, supplemented or restated from time to time in accordance with the terms thereof, this Agreement and Applicable Law.

 

“Board” means the board of directors of the Company from time to time.

 

“Business Combination” means:

 

(a)         any merger or consolidation (or similar transaction) of the Company or any of its Subsidiaries with (1) the Interested Shareholder or a Related Person thereof or (2) any other Person if the merger or consolidation (or similar transaction) is caused by the Interested Shareholder or its Related Persons and as a result of such merger or consolidation Section 4.02 hereof would not be applicable to the surviving entity;

 

(b)         any sale, lease, exchange, mortgage, pledge, transfer or other disposition, in one transaction or series of related transactions, to or with the Interested Shareholder

 

2

 

or a Related Person thereof (except proportionately with the other Shareholders of the Company), whether as part of a dissolution or otherwise, of assets of the Company or any of its Subsidiaries having an aggregate market value equal to 10% or more of either all of the assets of the Company determined on a consolidated basis or the Company’s then outstanding share capital;

 

(c)          any transaction which results in the issuance or Transfer by the Company or any of its Subsidiaries of any Securities or equity securities of any of the Company’s Subsidiaries to an Interested Shareholder or a Related Person thereof, except (1) pursuant to the exercise, exchange or conversion of Securities or equity securities of any of the Company’s Subsidiaries exercisable for, exchangeable for or convertible into Securities or equity securities of any of the Company’s Subsidiaries which Securities or equity securities were outstanding prior to the time that the Interested Shareholder became such, (2) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into Securities or equity securities of any of the Company’s Subsidiaries which are distributed, pro rata to all Shareholders subsequent to the time the Interested Shareholder became such or (3) pursuant to an exchange offer by the Company to purchase Ordinary Shares on the same terms to all Shareholders or (4) any issuance or transfer of Ordinary Shares; provided, however, that in no case under items (2) through (4) shall there be an increase in the Interested Shareholder’s or its Related Persons’ proportionate share of the share capital of the Company or any of its Subsidiaries;

 

(d)         any transaction with the Company or any of its Subsidiaries which, directly or indirectly, results in an increase of the Interested Shareholder’s or a Related Person thereof’s proportionate beneficial share of the share capital of the Company or any of its Subsidiaries except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any Securities not caused, directly or indirectly, by the Interested Shareholder or a Related Person thereof; or

 

(e)          any receipt by the Interested Shareholder or a Related Person thereof of any loans, advances, guarantees, pledges or other financial benefits, directly or indirectly (except proportionately as a Shareholder of the Company) by or through the Company or any of its Subsidiaries (other than as permitted by clauses (a) through (d) of this definition).

 

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in the City of New York or the Cayman Islands are authorized or required to close.

 

“Chapter 11 Plan” has the meaning set forth in the recitals.

 

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

 

“Confirmation Order” has the meaning set forth in the recitals.

 

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“Controlling Person” means any Person who, together with its Related Persons, beneficially owns, in the aggregate, more than 50% of the issued and outstanding Ordinary Shares.

 

“Corporate Opportunity” has the meaning set forth in Section 4.04.

 

“Debt Securities” means securities for indebtedness of the Company or its Subsidiaries evidenced by bonds, debentures, notes or other similar instruments and any other securities directly or indirectly exercisable for, convertible into or providing the economic benefit of such bonds, debentures, notes or other similar instruments.

 

“Director” means a member of the Board.

 

“DTC” means The Depository Trust Company or its successor or replacement.

 

“Effective Date” has the meaning set forth in the Chapter 11 Plan.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations thereunder, which shall be in effect at the time.

 

“Excluded Securities” means any Securities issued: (a) in connection with a grant to any existing or prospective consultants, employees, officers or Directors pursuant to any share option, employee share purchase or similar equity-based plans or other compensation agreements or arrangements, including the Management Incentive Plan; (b) in connection with the exercise or conversion of options to purchase Ordinary Shares, or Ordinary Shares issued to any existing or prospective consultants, employees, officers or Directors pursuant to any share option, employee share purchase or similar equity-based plans or any other compensation agreements or arrangements, including the Management Incentive Plan; (c) as consideration respecting any bona fide arms’ length acquisition of another Person, business or line or operating unit of any business by the Company or any of its Subsidiaries by merger, consolidation, stock purchase, purchase of assets or other similar transaction; (d) in connection with any joint venture with another Person; (e) ratably to each of the Shareholders pursuant to any reclassification, reorganization, subdivision, split or distribution in kind; or (f) in connection with a bona fide arms’ length change of control transaction of the Company or any of its Subsidiaries which triggers the making of a Takeover Offer pursuant to Section 4.03, in each case of the foregoing clauses (a) through (f), approved in accordance with the terms of this Agreement and the Articles.

 

“Exercise Period” has the meaning set forth in Section 3.01(c).

 

“Failed Issuance” has the meaning set forth in Section 3.01(d).

 

“Government Approval” means any authorization, consent, approval, waiver, exception, variance, order, exemption, publication, filing, declaration, concession, grant, franchise, agreement, permission, permit, or license of, from or with any Governmental Authority, the giving notice to, or registration with, any Governmental Authority or any other action in respect of any Governmental Authority.

 

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“Governmental Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of law), or any arbitrator, court or tribunal of competent jurisdiction.

 

“Initial Public Offering” means an underwritten public offering that results in the listing of Ordinary Shares for trading on the New York Stock Exchange, NASDAQ Stock Market, the London Stock Exchange or the Oslo Stock Exchange.

 

“Initial Shareholders” has the meaning set forth in the recitals.

 

“Interested Shareholder” means any Shareholder who, by itself or together with its Related Persons, beneficially owns, in the aggregate, 15% or more of the issued and outstanding Ordinary Shares.

 

“Issuance Acceptance” has the meaning set forth in Section 3.01(c).

 

“Issuance Notice” has the meaning set forth in Section 3.01(b).

 

“Lien” means any lien, claim, charge, mortgage, pledge, security interest, option, preferential arrangement, right of first offer, right of first refusal, encumbrance or other restriction or limitation of any nature whatsoever.

 

“Management Incentive Plan” has the meaning set forth in the Chapter 11 Plan.

 

“New Securities” has the meaning set forth in Section 3.01(a).

 

“Non-Controlling Shareholders” has the meaning set forth in Section 4.03(a).

 

“Offer Notice” has the meaning set forth in Section 4.03(b).

 

“Online Notice” shall mean a posting though a password-protected website or online data system accessible to each Shareholder that shall provide for automatic electronic notification to each Shareholder.

 

“Ordinary Shares” means the ordinary shares, par value $0.001 per share, of the Company and any Securities issued in respect thereof (including any Securities issued after the date of this Agreement), or in substitution therefor, in connection with any share split, dividend or combination, or any reclassification, recapitalization, merger, consolidation, exchange or similar reorganization, or otherwise.

 

“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association or other entity.

 

“Pre-emptive Pro Rata Portion” has the meaning set forth in Section 3.01(c).

 

“Pre-emptive Shareholder” has the meaning set forth in Section 3.01(a).

 

“Related Persons” means, with respect to any Person, (a) such Person’s Affiliates and (b) (i) any corporation, partnership, unincorporated association or other entity of which

 

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such Person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting shares; (ii) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (iii) if such Person is an individual, any relative or spouse of such Person, or any first degree “family member” of such Person; provided, that neither DTC nor any similar nominee shall be a Related Person of a Shareholder solely by reason of such Shareholder’s ownership of Ordinary Shares through DTC or any similar nominee.

 

“Representative” means, with respect to any Person, any and all directors, officers, managers, partners, trustees, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

 

“Revised Offer Notice” has the meaning set forth in Section 4.03(c).

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Securities” means Ordinary Shares, any other equity securities of the Company and any shares or other securities directly or indirectly exercisable for, convertible into or providing the economic benefit of such equity securities.

 

“Securities Act” means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations thereunder, which shall be in effect at the time.

 

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

 

“Subsidiary” means with respect to any Person, any other Person of which a majority of the outstanding shares or other equity interests having the power to vote for directors or comparable managers are owned, directly or indirectly, by the first Person.

 

“Takeover Offer” has the meaning set forth in Section 4.03(a).

 

“Transfer” means, subject to the immediately following sentence, to directly or indirectly sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any Ordinary Shares owned by a Person or any interest (including a beneficial interest) in any Ordinary Shares owned by a Person. Notwithstanding the foregoing, “Transfer” shall not include any indirect Transfer of Ordinary Shares resulting from a change of control of any Shareholder, but shall include any Transfer of Ordinary Shares by way of a transfer of securities in one or more direct or indirect special purpose vehicles or investment vehicles that hold the legal or beneficial title to any Ordinary Shares.

 

“Transferred Subsidiaries” has the meaning set forth in the Chapter 11 Plan.

 

“U.K. Implementation Agreement” has the meaning set forth in the Chapter 11 Plan.

 

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ARTICLE II
 [INTENTIONALLY OMITTED]

 

ARTICLE III
 PRE-EMPTIVE RIGHTS

 

Section 3.01                            Pre-emptive Rights

 

Subject to Section 4.02 and the Articles:

 

(a)                                 If the Company proposes to issue or sell new Securities or Debt Securities (other than any Excluded Securities) to any Shareholder or any Related Person thereof, the Company hereby grants to each other Shareholder (each, a “Pre-emptive Shareholder”) the right to purchase, directly or through DTC, its pro rata portion (as calculated pursuant to Section 3.01(c)) of any such new Securities or Debt Securities (the “New Securities”).  Notwithstanding the foregoing, to the extent that the delivery of an Issuance Notice (as defined below) or the issuance of New Securities would require registration with the SEC, the Company shall, in lieu of such registration, offer the New Securities only to Shareholders who are accredited investors (as defined in Rule 501 of the Securities Act), and only such Shareholders shall be deemed Pre-emptive Shareholders for all purposes hereunder, and comply with the applicable  requirements of Regulation D in offering and selling such New Securities.

 

(b)                                 The Company shall deliver by Online Notice to each Shareholder a notice (an “Issuance Notice”) of any proposed issuance or sale described in subsection (a) above to the Pre-emptive Shareholders promptly, and in any event within five (5) Business Days following any meeting of the Board at which any such issuance or sale is approved (or, if such issuance or sale is approved by the Directors in writing in accordance with the Articles, within five (5) Business Days following the date of such written resolution). The Issuance Notice shall set forth the material terms and conditions of the proposed issuance, including:

 

(i)                                     the number of New Securities proposed to be issued and the percentage of the Company’s outstanding Ordinary Shares, on a fully diluted basis, that such issuance would represent, if applicable;

 

(ii)                                  the name of the proposed offeree;

 

(iii)                               the proposed issuance date, which shall be a date no earlier than twenty-five (25) Business Days following the date of delivery of the Issuance Notice to all Pre-emptive Shareholders;

 

(iv)                              any material terms and conditions of the proposed issuance or sale; and

 

(v)                                 the proposed purchase price per share.

 

(c)                                  Each Pre-emptive Shareholder shall, within fifteen (15) Business Days following the delivery of an Issuance Notice (the “Exercise Period”), have the right to elect to purchase, directly or through DTC, at the purchase price set forth in the Issuance Notice, the amount of New Securities equal to the product of (x) the total

 

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number of New Securities to be issued by the Company on the issuance date and (y) a fraction determined by dividing (A) the number of Ordinary Shares beneficially owned by such Pre-emptive Shareholder immediately prior to such issuance by (B) the total number of Ordinary Shares outstanding on such date immediately prior to such issuance (the “Pre-emptive Pro Rata Portion”) by delivering a written notice to the Company (an “Issuance Acceptance”) of such Pre-emptive Shareholder’s election. Subject to Section 3.01(d), such Pre-emptive Shareholder’s election to purchase, whether directly or through DTC, New Securities shall be binding and irrevocable.

 

(d)                                 The Company shall be free to complete the proposed issuance or sale of New Securities described in the Issuance Notice with respect to any New Securities not elected to be purchased pursuant to Section 3.01(c) above or at a per share price that is no less than the per share price set forth in the applicable Issuance Notice and on other terms and conditions which are not materially different than those set forth in the Issuance Notice and in accordance with the terms and conditions set forth in the Issuance Notice (except that the amount of New Securities to be issued or sold by the Company may be reduced) so long as such issuance or sale is consummated within thirty (30) days after the expiration of the Exercise Period (subject to the extension of such thirty (30) day period for an additional thirty (30) days to the extent reasonably necessary to obtain any Government Approvals). In the event that (1) the Company has not sold such New Securities within such thirty (30) day period (or if extended for an additional thirty (30) days in accordance with the immediately preceding sentence, sixty (60) day period) or (2) the terms of the proposed issuance or sale of New Securities are materially different than those set forth in the applicable Issuance Notice (except that the amount of New Securities to be issued or sold by the Company may be reduced) or the proposed issuance is at a per share price that is less than the per share price set forth in the applicable Issuance Notice (each of the foregoing clauses (1) and (2) a “Failed Issuance”), the Company shall not thereafter issue or sell any New Securities without first again offering such securities to the Shareholders in accordance with the procedures set forth in this Section 3.01 and any Issuance Acceptance delivered in connection with such Failed Issuance shall be automatically null and void; provided, that each Shareholder’s right to deliver an Issuance Acceptance for any future issuance pursuant to Section 3.01(a) shall in no way be diminished following a Failed Issuance.

 

ARTICLE IV
 COVENANTS

 

Section 4.01                            Notice of 10% Ownership; Transfers

 

(a)                                 Any Shareholder that, together with its Related Persons, beneficially owns 10% or more of the outstanding Ordinary Shares shall deliver a written notice to the Company within five (5) Business Days following the date of the Transfer pursuant to which such Shareholder, together with its Related Persons, has met or exceeded such 10% threshold, which written notice shall include the name of such Shareholder’s Related Persons that beneficially hold Ordinary Shares and the percentage of Ordinary Shares that such Shareholder and its Related Persons

 

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beneficially hold in the aggregate. The Company shall, promptly following receipt of such notice, deliver such notice to all other Shareholders through an Online Notice.

 

(b)                                 Upon any Transfer by any Shareholder of any of its Ordinary Shares, in accordance with the terms of this Agreement, the transferee thereof shall be substituted for, and shall assume all the rights and obligations under this Agreement of, the transferor thereof automatically and without any action on the part of such transferee in accordance with the Confirmation Order.

 

(c)                                  For the avoidance of doubt, Ordinary Shares shall be at all times during the term of this Agreement freely transferable without restriction or limitation on transfer, subject to compliance with the Securities Act and other applicable securities laws, including transfers pursuant to any applicable exemptions or exceptions therefrom.

 

Section 4.02                            Transactions with Interested Shareholders

 

Notwithstanding any other provisions of this Agreement, the Company shall not engage in any Business Combination with any Interested Shareholder, or any Related Person thereof, for a period of three (3) years following the time that such Shareholder or any Related Person thereof became an Interested Shareholder, unless:

 

(a)                                 the Board has approved, in accordance with the Articles and Applicable Law, either the Business Combination or the transaction which resulted in such Shareholder becoming an Interested Shareholder;

 

(b)                                 upon consummation of the transaction which resulted in such Shareholder becoming an Interested Shareholder, the Interested Shareholder owned at least 85% of the Ordinary Shares outstanding at the time the transaction commenced; or

 

(c)                                  at or subsequent to such time, the Business Combination is (i) approved by the Board in accordance with the Articles and Applicable Law and (ii) approved by Shareholders representing two-thirds of the then issued and outstanding Ordinary Shares which are not owned by the Interested Shareholder.

 

Section 4.03                            Takeovers by Controlling Persons

 

(a)                                 Within twenty (20) Business Days following the time that any Person or any Related Person thereof agrees to effect a transaction pursuant to which such Person or any of its Related Persons would become a Controlling Person, such Person and its Related Persons, if applicable (the “Offeror”) shall make an irrevocable and binding offer (a “Takeover Offer”) to acquire the Ordinary Shares then held by each of the other Shareholders (the “Non-Controlling Shareholders”) for cash at a price per Ordinary Share no less than the highest price paid by such Person or its Related Persons per Ordinary Share in the twelve (12) month period prior to such agreement (including the offered price per Ordinary Share pursuant to which such Person or its Related Person would become a Controlling Person) or, if such Person or any of its Related Persons has not acquired any Ordinary Shares in such twelve (12) month period, the price to

 

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be paid per Ordinary Share in the transaction pursuant to which the relevant Person or its Related Person would become a Controlling Person, and otherwise in accordance with this Section 4.03.

 

(b)                                 A Takeover Offer shall be made, to the extent permitted by Applicable Law (and if not so permitted, shall be made in accordance with Applicable Law), by delivery of written notice (an “Offer Notice”) by the Offeror to the Company offering to acquire the Ordinary Shares then held by each Non-Controlling Shareholder.  The Offer Notice shall be irrevocable and binding on the Offeror and shall set forth in reasonable detail:

 

(i)                                     the identity of the Offeror;

 

(ii)                                  the proposed date, time and location of the closing of the Takeover Offer; and

 

(iii)                               the price per Ordinary Share.

 

The Offer Notice shall also include a copy of the form of any material agreements proposed to be executed in connection with the Takeover Offer.  Upon its receipt of an Offer Notice, the Company shall promptly deliver an Online Notice of such Offer Notice to each Non-Controlling Shareholder.

 

(c)                                  Each Non-Controlling Shareholder may exercise, in its sole discretion, its right to participate in the Takeover Offer on the terms set forth in the applicable Offer Notice by delivering to the Offeror a written notice (an “Acceptance Notice”) no later than twenty (20) Business Days after receipt of the Offer Notice (the “Acceptance Period”) stating its election to do so and specifying the number of Ordinary Shares to be Transferred by such Non-Controlling Shareholder.  In the event that the terms of a Takeover Offer materially change from the terms set forth in the applicable Offer Notice, such potential Controlling Person shall deliver a new Offer Notice (the “Revised Offer Notice”) to the Company, and the previous Offer Notice shall be automatically null and void. Upon its receipt of the Revised Offer Notice, the Company shall promptly deliver an Online Notice of such Revised Offer Notice to each Non-Controlling Shareholder. Any Revised Offer Notice shall restart the Acceptance Period.  For the avoidance of doubt, any change to the price per Ordinary Share contained in the Offer Notice shall be considered a material change.

 

(d)                                 Each Non-Controlling Shareholder who does not deliver an Acceptance Notice in compliance with Section 4.03(c) above shall have waived all of its rights to participate in such Takeover Offer.

 

(e)                                  The Offeror and each Non-Controlling Shareholder that delivers an Acceptance Notice shall take all actions as may be reasonably necessary to consummate the Takeover Offer, including entering into agreements and delivering certificates and instruments (including powers of attorney and proxies).

 

(f)                                   For the avoidance of doubt, and notwithstanding anything to the contrary contained herein, no (i) Shareholder or its Related Persons or Representatives and (ii) Person who Transfers, or agrees to Transfer, Ordinary Shares to a Controlling

 

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Person or to any Person or group of Persons who would, after giving effect to such Transfer, become a Controlling Person or a Related Person thereof, shall (x) be responsible for enforcing or ensuring compliance by any Person (other than such Shareholder and its Related Persons and Representatives) with the terms of this Section 4.03 or (y) have any liability or obligation (and are hereby released and held harmless) relating to the compliance by any Person (other than such Shareholder and its Related Persons and Representatives) with the terms of this Section 4.03.  This Section 4.03 shall not prevent any Shareholder from Transferring its Ordinary Shares to any Person (regardless of such Person’s percentage shareholding prior to or following such Transfer). The Company and any Non-Controlling Shareholder shall have the right to enforce the terms of this Section 4.03 (including the right to equitable remedies as contemplated by Section 6.13) only against a Controlling Person or Offeror, or Related Persons thereof, but not against any Person who has Transferred, or is proposing to Transfer, any Ordinary Shares to such Controlling Person, Offeror or Related Person.

 

Section 4.04                            Corporate Opportunities

 

No Shareholder or any of its Related Persons or Representatives (other than any such Representatives serving in their capacity as a Director or an officer of the Company) (a) shall have any duty to communicate or present an investment or business opportunity or prospective economic advantage to the Company or any of its Subsidiaries in which the Company or any of its Subsidiaries may, but for the provisions of this Section 4.04, have an interest or expectancy (a “Corporate Opportunity”), and (b) shall be deemed to have breached any fiduciary or other duty or obligation to the Company or any of its Subsidiaries solely by reason of the fact that any such Person pursues or acquires a Corporate Opportunity for itself or its Related Persons or directs, sells, assigns or transfers such Corporate Opportunity to another Person or does not communicate information regarding such Corporate Opportunity to the Company or its Subsidiaries. The Company renounces any interest in a Corporate Opportunity and any expectancy that a Corporate Opportunity will be offered to the Company.

 

Section 4.05                            Deregistration

 

To the extent it is permitted to do so by Applicable Law, upon the Effective Date, the Company shall deregister its Securities under all applicable sections of the Securities Exchange Act of 1934, as amended, and shall cease to file reports and other information with the SEC.

 

Section 4.06                            DTC

 

The provisions of this Agreement (including this Section 4.06) are binding only on the Company and the beneficial owners of Ordinary Shares and each of their respective successors and assigns, and (a) DTC does not in any way undertake to monitor or ascertain, and shall not have any responsibility for monitoring or ascertaining, whether any Transfer of Ordinary Shares is in compliance with the provisions of this Agreement, and (b) any provisions in this Agreement relating to any Transfer of Ordinary Shares shall not (i) prohibit any Transfer of Ordinary Shares to or from, or the holding of Ordinary Shares by, DTC or a nominee of DTC that holds the legal title to the Ordinary Shares on behalf of any Shareholder, nor shall any such provisions prohibit or restrict

 

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DTC from transferring interests in the Ordinary Shares on the books of DTC and (ii) prevent companies that regularly hold securities for others in “street name” from doing so provided that such companies are holding the Ordinary Shares as legal holders for the benefit of other legal holders or beneficial owners but not themselves as beneficial owners. Neither the Shareholders nor any of their respective successors or assigns shall have any right to bring any claim against DTC in connection with any Transfer of Ordinary Shares that was not in compliance with the provisions of this Agreement and each of them and their respective successors and assigns shall not make any such claim.  DTC shall be an express third party beneficiary to, and shall be entitled to enforce the terms of, this Section 4.06.  For the avoidance of doubt, for the purposes of this Agreement, the term Shareholder, “transferee” and “transferor” shall refer to the beneficial owner of an Ordinary Share (or the transferee of a beneficial interest in an Ordinary Share, where such Ordinary Share is beneficially owned by more than one Person) and shall not refer to DTC or any nominee of DTC which holds the legal title to any Ordinary Share on behalf of such beneficial owner, nor to any companies that regularly hold securities for others in “street name” so long as such companies are holding the Ordinary Shares as legal holder for the benefit of other legal holders or beneficial owners but not themselves as beneficial owners.

 

Section 4.07                            Information Rights

 

(a)                                 In addition to, and without limiting any rights that a Shareholder or legal holder may have with respect to inspection of the books and records of the Company under Applicable Law, the Company shall furnish to each Shareholder (by making available on the Company’s website), the following information:

 

(i)                                     all annual and quarterly financial information that would be required to be contained in a filing by a non-accelerated filer with the SEC on Forms 10-K and 10-Q for periods ending as of June 30, 2017 (and thereafter) if the Company were required to file such forms, and with respect to the annual financial information, a report on the annual financial statements by the Company’s independent registered public accounting firm; provided, however, that such information shall not be required to include the information contemplated by Items 1B, 4 and 5 of Form 10-K, and by Items 2 and 4 of Part II of Form 10-Q; and

 

(ii)                                  for events occurring after the Effective Date, the information that would be required to be contained in filings with the SEC on Form 8-K under Items 1.01, 1.02, 1.03, 2.01, 2.02, 2.03, 2.04, 2.05, 2.06, 3.02, 3.03, 4.01, 4.02, 5.01, 5.02, 5.03, 5.07 and 9.01 if the Company were required to file such reports; provided, however, that no such current report will be required to be furnished if the Board determines in its good faith judgment that such event is not material to the Shareholders or to the business, assets, operations, financial position or prospects of the Company and its Subsidiaries, taken as a whole,

 

and in each case, provided, that all such reports shall not be required to comply with Section 302 or Section 404 of the Sarbanes-Oxley Act of 2002, or related items 307 or 308 of Regulation S-K promulgated by the SEC, or Item 10(e) of

 

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Regulation S-K (with respect to any non-GAAP measures contained therein), or Item 402 of Regulation S-K, and shall not be required to include information of the type that would be required by Rule 3-10 or Rule 3-16 of Regulation S-X of the Securities Act.

 

(b)                                 All such annual reports shall be furnished within 90 days after the end of the fiscal year to which they relate, and all such quarterly reports shall be furnished within 45 days after the end of the fiscal quarter to which they relate; provided, however, that the reports required to be furnished for the fiscal quarters ended June 30, 2017 and September 30, 2017 shall be required to be furnished within 90 days after such fiscal quarter-end, and the report required to be furnished for the fiscal year ended December 31, 2017 shall be required to be furnished within 120 days after such fiscal year-end. All such current reports shall be furnished 10 Business Days after the occurrence of each event that would be required to be reported in such current report.

 

(c)                                  Notwithstanding the foregoing, in the event that the Company becomes a public reporting company and is required to file the forms of reports required pursuant to Section 4.07(a), then the Company shall satisfy the delivery requirements under this Section 4.07 upon the filing of such reports with the SEC and making the same available on the Company’s website.

 

(d)                                 To the extent such information is not otherwise made publicly available (within the meaning of Rule 144(c) under the Securities Act) pursuant to paragraphs (a) through (c) above, the Company shall make publicly available such information required by Rule 144(c) and Rule 144A(d)(4) for so long as necessary to permit sales pursuant to Rule 144 or Rule 144A under the Securities Act, as such rules may be amended from time to time or any similar rule or regulation hereafter adopted by the SEC (which replaces Rule 144 or Rule 144A), to enable such Shareholder and legal holder to sell Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 or Rule 144A under the Securities Act, as such rules may be amended or replaced from time to time.  Upon the request of any Shareholder, the Company will deliver to such Shareholder a written statement as to whether it has complied with such requirements.

 

Section 4.08                            Inspection Rights

 

(a)                                 The Company shall, and shall cause its officers, Directors and employees to, (i) afford each Shareholder who together with its Related Persons beneficially owns at least 5% of the then issued and outstanding Ordinary Shares, and the Representatives of each such Shareholder, for any proper purpose related to such Shareholder’s ownership of Ordinary Shares, during normal business hours and upon reasonable notice, reasonable access at all reasonable times to its officers, employees, auditors, properties, offices, plants and other facilities and to all books and records of the Company and its Subsidiaries and (ii) afford such Shareholder the opportunity to consult with its officers from time to time regarding the Company’s and its Subsidiaries’ affairs, finances and accounts as each such Shareholder may reasonably request upon reasonable advance written notice;

 

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provided, that (a) subject to Section 4.08(b), any such Shareholder shall, and shall cause its Related Persons and Representatives to, keep confidential any information concerning the Company and its Subsidiaries which it obtains pursuant to this Section 4.08(a) (and, for the avoidance of doubt, all information obtained pursuant to Section 4.07 shall not be considered obtained pursuant to this Section 4.08(a)), and (b) the Company shall have the right to restrict any access to information that the Directors consider to be competitively sensitive information.

 

(b)                                 Nothing herein shall prevent any Shareholder who obtains information pursuant to Section 4.08(a) from disclosing such information (i) upon the order of any court or administrative agency having competent jurisdiction, (ii) upon the demand of any regulatory agency or authority having competent jurisdiction over such Shareholder, (iii) to the extent compelled by legal process or required pursuant to subpoena, interrogatories or other discovery requests, (iv) to the extent necessary in connection with the exercise of any remedy hereunder, or (v) to such Shareholder’s Related Persons and such Shareholder’s and Related Persons’ Representatives that in the reasonable judgment of such Shareholder need to know such information; provided, that in the case of clause (i), (ii) or (iii), such Shareholder shall notify (other than in connection with a routine regulatory examination) the Company of the proposed disclosure, if practicable, as far in advance of such disclosure as reasonably practicable and use reasonable efforts to obtain a protective order or other remedy to prevent such disclosure and if no such order or remedy is obtained, ensure that any information so disclosed is accorded confidential treatment (including in connection with a routine regulatory examination). The restrictions of Section 4.08(a) shall not apply to information that (1) is or becomes generally available to the public other than as a result of a disclosure by such Shareholder or any of its Related Persons or Representatives in violation of this Agreement, (2) is already in the possession of  such Shareholder or any of its Related Persons or Representatives on a non-confidential basis prior to its disclosure to such Shareholder, Related Persons or Representatives, (3) is or has been independently developed or conceived by such Shareholder without use of the information or (4) becomes available to such Shareholder or any of its Related Persons or Representatives on a non-confidential basis from a source other than the Company or its Related Persons, any other Shareholder or any Related Persons thereof or any of their respective Representatives, provided, that such source is not known by the recipient of the information to be bound by duty of confidentiality with the disclosing Shareholder or any of its Related Persons or Representatives.

 

(c)                                  The rights set forth in this Section 4.08 shall not and are not intended to limit any rights which the Shareholders or legal holders may have with respect to the books and records of the Company or its Subsidiaries, or to inspect its properties or discuss its affairs, finances and accounts under Applicable Law.

 

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ARTICLE V
 TERM AND TERMINATION

 

Section 5.01                            Termination

 

This Agreement shall terminate upon the earliest of:

 

(a)                                 the consummation of an Initial Public Offering;

 

(b)                                 the consummation of a merger or other business combination involving the Company whereby the Ordinary Shares become a security that is listed or admitted to trading on the New York Stock Exchange, NASDAQ Stock Market, the London Stock Exchange or the Oslo Stock Exchange;

 

(c)                                  the dissolution, liquidation, or winding up of the Company;

 

(d)                                 by the passing of a Special Resolution (as defined in the Articles) in accordance with the Articles of, or by an agreement, consent, proxy or other written instrument signed by, Shareholders beneficially owning at least two-thirds of the then issued and outstanding Ordinary Shares, agreeing to terminate this Agreement; or

 

(e)                                  as to any Shareholder, the date upon which such Shareholder no longer beneficially owns any Ordinary Shares.

 

Section 5.02                            Effect of Termination

 

(a)                                 The termination of this Agreement shall terminate all further rights and obligations of the Shareholders under this Agreement except that such termination shall not affect:

 

(i)                                     the existence of the Company (other than if this Agreement is terminated pursuant to Section 5.01(c));

 

(ii)                                  the obligation of any Person hereunder to pay any amounts due arising on or prior to the date of termination, or as a result of or in connection with such termination, or any liability for willful and material breach of this Agreement; or

 

(iii)                               the rights which any Shareholder may have by operation of law or in equity as a Shareholder of the Company.

 

(b)                                 The following provisions shall survive the termination of this Agreement: this Section 5.02, Section 6.01, and Section 6.03 through Section 6.13.

 

ARTICLE VI
 MISCELLANEOUS

 

Section 6.01                            Expenses

 

Except as otherwise expressly provided herein, all costs and expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with

 

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this Agreement and the transactions contemplated hereby shall be paid by the Person incurring such costs and expenses.

 

Section 6.02                            Release of Liability

 

In the event any Shareholder shall Transfer all of the Ordinary Shares beneficially held by such Shareholder in compliance with the provisions of this Agreement without retaining any interest therein, then such Shareholder shall cease to be bound by this Agreement and shall be relieved and have no further liability or obligation arising hereunder for events occurring from and after the date of such Transfer.  For the avoidance of doubt, and notwithstanding anything to the contrary contained herein, no Shareholder or its Related Persons or Representatives shall (i) be responsible for enforcing or ensuring compliance by any Person (other than such Shareholder and its Related Persons and Representatives) with the terms of this Agreement or (ii) have any liability or obligation (and are hereby released and held harmless) relating to the compliance by any Person (other than such Shareholder and its Related Persons and Representatives) with the terms of this Agreement.

 

Section 6.03                            Notices

 

All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be (a) delivered by Online Notice where such notice is delivered by the Company to the Shareholders (or any of them) and be deemed to have been given on the date the Company has posted such notice or (b) in writing if delivered by a Shareholder to the Company or any other Shareholder and shall be deemed to have been given (i) when delivered by hand (with written confirmation of receipt), (ii) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested), (iii) on the date sent by facsimile or email of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (iv) on the third (3rd) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.

 

Section 6.04                            Interpretation

 

For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. The definitions given for any defined terms in this Agreement shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. Unless the context otherwise requires, references herein: (x) to Articles, Sections, and Exhibits mean the Articles and Sections of, and Exhibits attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be

 

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drafted. The Exhibits referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein.

 

Section 6.05                            Headings

 

The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

Section 6.06                            Severability

 

If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, a court of competent jurisdiction shall be empowered to modify this Agreement so as to effect the original intent thereof as closely as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

 

Section 6.07                            Successors and Assigns

 

This Agreement shall be binding upon and shall inure to the benefit of the Company, the Shareholders and their respective successors and permitted assigns.  A Shareholder may transfer or assign any of its rights, interests, or obligations hereunder only in connection with a Transfer of any Ordinary Shares by such Shareholder to a transferee permitted under the terms of this Agreement.  Any assignment in contravention of this Section 6.07 shall be null and void, ab initio.

 

Section 6.08                            No Third-party Beneficiaries

 

Except as set forth in Section 4.06, this Agreement is for the sole benefit of the Company and the Shareholders and their successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

Section 6.09                            Amendment and Modification; Waiver

 

This Agreement may only be amended, modified or supplemented by an agreement, consent, proxy or other instrument, in writing signed by the Company and approved by the passing of a Special Resolution (as defined in the Articles) in accordance with the Articles, or by an agreement, consent, proxy or other written instrument signed by, Shareholders beneficially owning at least two-thirds of the then issued and outstanding Ordinary Shares. No waiver by the Company or any Shareholder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Person so waiving. No waiver by the Company or any Shareholder shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege

 

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hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

Section 6.10                            Governing Law

 

This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of laws rules of such state.

 

Section 6.11                            Jurisdiction

 

Any suit, action or proceeding seeking to enforce any provision of, or based on any mater arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York state court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the Shareholders and the Company irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any Person bound by the terms hereof anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, service of process on the Company or any Shareholder as provided in Section 6.03 shall be deemed effective service of process on such Person.

 

Section 6.12                            Waiver of Jury Trial

 

EACH OF THE COMPANY AND THE SHAREHOLDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGS ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 6.13                            Equitable Remedies

 

The Company and each Shareholder would be irreparably damaged in the event of a breach or threatened breach by any other Person of any of its obligations under this Agreement and hereby agrees that in the event of a breach or a threatened breach by other Person of any such obligations (including, without limitation, Section 5.05 hereof), each other Person bound hereby shall (and DTC shall in relation to the enforcement of Section 5.05), in addition to any and all other rights and remedies that may be available to them in respect of such breach, be entitled to an injunction from a court of competent jurisdiction (without any requirement to post bond) granting such Person specific performance by such other Person of its obligations under this Agreement. In the event of suit to enforce the covenants contained in this Agreement (or obtain any other remedy in respect of any breach thereof), the prevailing party in the suit shall be entitled to receive in addition to all other damages to which it may be entitled, the costs incurred by such party in conduction the suit, including reasonable attorney’s fees and expenses.

 

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Section 6.14                            Conflict with Articles

 

In the event of any conflict between the provisions of the Articles and this Agreement, the provisions of this Agreement shall prevail and each Shareholder shall take all such steps as are required (including instructing DTC to vote its Ordinary Shares) to amend the provisions of the Articles to reflect the provisions of this Agreement.

 

Section 6.15                            Enforcement

 

Notwithstanding that a Shareholder is not the legal holder of its Ordinary Shares, such Shareholder may (acting through DTC) enforce, and may institute and maintain, any suit, action or proceeding against the Company to enforce, any breach or failure to comply with the provisions of the Articles by the Company (and, for the avoidance of doubt, a Shareholder shall be entitled to directly enforce this Agreement against the Company notwithstanding that such Shareholder is not a legal holder of its Ordinary Shares).

 

Section 6.16                            Transactions between the Company and Directors or Officers

 

No contract or transaction between the Company and one or more of the Directors or officers of the Company, or between the Company and any other corporation, partnership, association, or other organization in which one or more of the Directors or officers of the Company, are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the Director or officer is present at or participates in the meeting of the Board or committee which authorizes the contract or transaction, or solely because any such Director’s or officer’s votes are counted for such purpose, if:

 

(a)                                 the material facts as to the Director’s or officer’s relationship or interest and as to the contract or transaction are disclosed by such interested Director or officer at or prior to its consideration and any vote thereon or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested Directors, even though the disinterested Directors be less than a quorum (provided, that interested Directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction); or

 

(b)                                 the material facts as to the Director’s or officer’s relationship or interest and as to the contract or transaction are disclosed to the legal holders entitled to vote thereon, and the contract or transaction is specifically approved by Ordinary Resolution (as defined in the Articles).

 

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

 

	
 
    	
PARAGON   OFFSHORE LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Dean Edward Taylor
    
	
 
    	
 
    	
Name:   Dean Edward Taylor
    
	
 
    	
 
    	
Title:   Director
    

 

[Signature Page to Shareholders’ Agreement]

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