Exhibit 99.2

UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE

DISCLOSURE STATEMENT FOR FIFTH JOINT CHAPTER 11 PLAN

OF PARAGON OFFSHORE PLC AND ITS AFFILIATED DEBTORS

(1)  The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, as applicable, are: Paragon Offshore plc (6017); Paragon Offshore Finance Company (6632); Paragon International Finance Company (8126); Paragon Offshore Holdings US Inc. (1960); Paragon Offshore Drilling LLC (4541); Paragon FDR Holdings Ltd. (4731); Paragon Duchess Ltd.; Paragon Offshore (Luxembourg) S.à r.l. (5897); PGN Offshore Drilling (Malaysia) Sdn. Bhd. (9238); Paragon Offshore (Labuan) Pte. Ltd. (3505); Paragon Holding SCS 2 Ltd. (4108); Paragon Asset Company Ltd. (2832); Paragon Holding SCS 1 Ltd. (4004); Paragon Offshore Leasing (Luxembourg) S.à r.l. (5936); Paragon Drilling Services 7 LLC (7882); Paragon Offshore Leasing (Switzerland) GmbH (0669); Paragon Offshore do Brasil Ltda.; Paragon Asset (ME) Ltd. (8362); Paragon Asset (UK) Ltd.; Paragon Offshore International Ltd. (6103); Paragon Offshore (North Sea) Ltd.; Paragon (Middle East) Limited (0667); Paragon Holding NCS 2 S.à r.l. (5447); Paragon Leonard Jones LLC (8826); Paragon Offshore (Nederland) B.V.; and Paragon Offshore Contracting GmbH (2832).  The Debtors’ mailing address is 3151 Briarpark Drive, Suite 700, Houston, Texas 77042.

DISCLOSURE STATEMENT, DATED May 2, 2017

Solicitation of Votes on the
Plan of Reorganization of

PARAGON OFFSHORE PLC, ET AL.

from the holders of outstanding

·                  SECURED LENDER CLAIMS

·                  SENIOR NOTES CLAIMS

·                  GENERAL UNSECURED CLAIMS

THE VOTING DEADLINE TO ACCEPT OR REJECT THE PLAN IS 5:00 P.M., PREVAILING EASTERN TIME ON MAY 31, 2017, UNLESS EXTENDED BY THE DEBTORS.  THE RECORD DATE FOR DETERMINING WHICH HOLDERS OF CLAIMS MAY VOTE ON THE PLAN IS APRIL 28, 2017 (THE “RECORD VOTING DATE”).

RECOMMENDATION BY THE DEBTORS

The Board of Directors of Paragon Offshore plc (“Paragon Parent”) and the board of directors, managers, members, or partners, as applicable, of each of its affiliated Debtors (as of the date hereof) have unanimously approved the transactions contemplated by the Solicitation and the Plan and recommend that all creditors whose votes are being solicited submit ballots to accept the Plan. 

RECOMMENDATION BY THE CREDITORS’ COMMITTEE

The members of the Creditors’ Committee have unanimously approved the transactions contemplated by the Solicitation and the Plan and recommend that all Senior Noteholders and holders of General Unsecured Claims whose votes are being solicited submit ballots to accept the Plan.

HOLDERS OF CLAIMS SHOULD NOT CONSTRUE THE CONTENTS OF THIS DISCLOSURE STATEMENT AS PROVIDING ANY LEGAL, BUSINESS, FINANCIAL, OR TAX ADVICE AND SHOULD CONSULT WITH THEIR OWN ADVISORS BEFORE VOTING ON THE PLAN.

CERTAIN STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT, INCLUDING STATEMENTS INCORPORATED BY REFERENCE, PROJECTED FINANCIAL INFORMATION, AND OTHER FORWARD-LOOKING STATEMENTS, ARE BASED ON ESTIMATES AND ASSUMPTIONS.  THERE CAN BE NO ASSURANCE THAT SUCH STATEMENTS WILL BE REFLECTIVE OF ACTUAL OUTCOMES.  FORWARD-LOOKING STATEMENTS ARE PROVIDED IN THIS DISCLOSURE STATEMENT PURSUANT TO THE SAFE HARBOR ESTABLISHED UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND SHOULD BE EVALUATED IN THE CONTEXT OF THE ESTIMATES, ASSUMPTIONS, UNCERTAINTIES, AND RISKS DESCRIBED HEREIN.

FURTHER, READERS ARE CAUTIONED THAT ANY FORWARD-LOOKING STATEMENTS HEREIN ARE BASED ON ASSUMPTIONS THAT ARE BELIEVED TO BE REASONABLE, BUT ARE SUBJECT TO A WIDE RANGE OF RISKS IDENTIFIED IN THIS DISCLOSURE STATEMENT.  DUE TO THESE UNCERTAINTIES, READERS CANNOT BE ASSURED THAT ANY FORWARD-LOOKING STATEMENTS WILL PROVE TO BE CORRECT.  THE DEBTORS ARE UNDER NO OBLIGATION TO (AND EXPRESSLY DISCLAIM ANY OBLIGATION TO) UPDATE OR ALTER ANY FORWARD-LOOKING STATEMENTS WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS, OR OTHERWISE, UNLESS INSTRUCTED TO DO SO BY THE BANKRUPTCY COURT.

NO INDEPENDENT AUDITOR OR ACCOUNTANT HAS REVIEWED OR APPROVED THE FINANCIAL PROJECTIONS OR THE LIQUIDATION ANALYSIS HEREIN.  THE DEBTORS HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR ADVICE, OR TO MAKE ANY REPRESENTATION, IN CONNECTION WITH THE PLAN OR THIS DISCLOSURE STATEMENT.

THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE AS OF THE DATE HEREOF UNLESS OTHERWISE SPECIFIED.  THE TERMS OF THE PLAN GOVERN IN THE EVENT OF ANY INCONSISTENCY WITH THE SUMMARIES IN THIS DISCLOSURE STATEMENT.

THE INFORMATION IN THIS DISCLOSURE STATEMENT IS BEING PROVIDED SOLELY FOR PURPOSES OF VOTING TO ACCEPT OR REJECT THE PLAN OR OBJECTING TO CONFIRMATION.  NOTHING IN THIS DISCLOSURE STATEMENT MAY BE USED BY ANY PARTY FOR ANY OTHER PURPOSE.  ALL EXHIBITS TO THE DISCLOSURE STATEMENT ARE INCORPORATED INTO AND ARE A PART OF THIS DISCLOSURE STATEMENT AS IF SET FORTH IN FULL HEREIN.

TABLE OF CONTENTS

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I.
INTRODUCTION

The Debtors submit this Disclosure Statement in connection with the solicitation (the “Solicitation”) of votes on the Fifth Joint Chapter 11 Plan of Paragon Offshore plc and its Affiliated Debtors, dated May 2, 2017 (the “Plan,” attached hereto as Exhibit A).  The debtors under the Plan are Paragon Offshore plc and its affiliates that are issuers of or guarantors under the company’s debt (together with Paragon Parent, the “Debtors”).(2)  Capitalized terms used in this Disclosure Statement, but not defined herein, have the meanings ascribed to them in the Plan.  To the extent any inconsistencies exist between this Disclosure Statement and the Plan, the Plan governs.

The Debtors are commencing this Solicitation after extensive discussions over the past several months among Paragon Parent, the Debtors, and certain of their key creditor constituencies.  As a result of these negotiations, the Debtors, the Term Loan Agent, the Revolving Credit Facility Agent, the Steering Committee of Revolving Lenders, the Ad Hoc Committee of Term Lenders (together with the Steering Committee of Revolving Lenders, the “Requisite Lenders”), and the Creditors’ Committee (as defined below) have reached a comprehensive settlement on a deleveraging transaction that would restructure the existing debt obligations of the Debtors in chapter 11 through the Plan (the “Restructuring”).

As of the Effective Date, the Plan represents a full, final, integrated, complete, and good faith compromise, settlement, release, and resolution of, among other matters, disputes and potential litigation among the Debtors, the Term Loan Agent, the Revolving Credit Facility Agent, the Revolving Lenders, the Term Lenders (together with the Revolving Lenders, the “Secured Lenders”), and the Creditors’ Committee regarding all Secured Lender Claims, all Senior Notes Claims, all General Unsecured Claims, all rights, Claims, and interests arising out of the Adequate Protection Order, all disputes and issues in connection with or relating to encumbered and unencumbered assets and to the validity, extent, and priority of the Liens securing the Secured Lender Claims, including with respect to Cash held by Paragon Parent and Intercompany Claims, all disputes and issues relating to the Senior Notes Claims’ makewhole claims, and the matters, disputes, and litigations described in the Plan.

There are three (3) primary creditor groups whose acceptances of the Plan are being solicited:

1.              Holders of a Secured Lender Claim (Class 3);

2.              Holders of a Senior Notes Claim (Class 4); and

3.              Holders of a General Unsecured Claim (Class 5).

Below is a short summary of the treatment of various creditor groups under the Plan.  Greater detail on such treatment is provided later in this Disclosure Statement.

On the Effective Date, each holder of an Allowed Revolver Claim, which Claims are deemed Allowed in the aggregate principal amount of approximately Seven Hundred Fifty-Six Million Dollars ($756,000,000), or an Allowed Term Loan Claim, which Claims are deemed Allowed in the aggregate principal amount of approximately Six Hundred Forty-Two Million Dollars ($642,000,000), will receive, in full and final satisfaction, compromise, settlement, release, and discharge of, in exchange for and on account of such Allowed Revolver Claim or Allowed Term Loan Claims, as applicable, its Pro Rata share of (i) Four Hundred Ten Million Dollars ($410,000,000) in Cash, (ii) the Take Back Debt, (iii) fifty percent (50%) of the New Equity Interests (subject to dilution by the Management Incentive Plan

(2)  Capitalized terms used but not otherwise defined herein will have the meaning ascribed to such terms in the Plan.

Securities), (iv) fifty percent (50%) of the Class A Litigation Trust Interests, and (v) twenty-five percent (25%) of the Class B Litigation Trust Interests.  For the avoidance of doubt, the Existing Letters of Credit will continue to remain outstanding, pursuant to and subject to the terms of the Existing L/C Escrow Agreement(s) and the New Letter of Credit Agreement; provided that and that notwithstanding entry of the Confirmation Order or the occurrence of the Effective Date, the Term Loan Agreement and the other Credit Documents (as defined therein) will continue in effect for purposes of: (i) allowing the Term Lenders to receive distributions under the Plan; (ii) allowing the Term Loan Agent to make distributions in accordance with the Plan; (iii) preserving any rights of the Term Loan Agent to payment of fees, expenses and indemnification obligations as against any money or property distributable to Term Lenders under the Term Loan Agreement and the other Credit Documents, including any rights to priority of payment; (iv) allowing the Term Loan Agent to enforce any obligations owed to it under the Plan; and (v) continuing the provisions set forth in Section 11.10 of the Term Loan Agreement (Participations in Loans and Term Loan Notes; Sales and Transfers of Loans and Term Loan Notes) in order to, among other purposes, permit the Term Loan Agent to receive, process and accept Assignment Agreements with respect to Term Loan Claims, which will (x) continue solely for the purpose of permitting the Term Loan Agent to maintain a register with respect to distributions of consideration distributed pursuant to the Existing L/C Escrow Agreement(s) and (y) on the Effective Date be in an aggregate principal amount of the Allowed aggregate principal amount of Term Loan Claims, less the value of aggregate consideration paid to the Term Lenders on the Effective Date pursuant to the Plan in such amount as directed in writing to the Term Loan Agent by the Reorganized Debtors.  The Term Loan Agent be entitled to rely, without any independent investigation, upon, and will not incur any liability for relying upon, any such direction of the Reorganized Debtors.

For purposes of treatment in Class 4, on the Effective Date, each holder of an Allowed Senior Notes Claim, which Claims are deemed Allowed in the aggregate principal amount of approximately One Billion Twenty-One Million Dollars ($1,021,000,000), will receive, in full and final satisfaction, compromise, settlement, release, and discharge of, in exchange for and on account of such Allowed Senior Notes Claim, its Pro Rata share of (i) (A) One Hundred Five Million Dollars ($105,000,000) in Cash, (B) fifty percent (50%) of the New Equity Interests (subject to dilution by the Management Incentive Plan Securities), (C) fifty percent (50%) of the Class A Litigation Trust Interests, and (D) seventy-five percent (75%) of the Class B Litigation Trust Interests; (ii) payment in full of the Noteholders’ Professional Fees, provided, that the Noteholders’ Professional Fees paid to Ducera Partners LLC will be net of any and all fees and expenses paid to Ducera Partners LLC pursuant to the Application for Order Authorizing the Employment and Retention of Ducera Partners LLC as Financial Advisor to the Official Committee of Unsecured Creditors of Paragon Offshore plc, et al., Nunc Pro Tunc to January 20, 2017 (Docket No. 1192); and (iii) the reasonable and documented fees and expenses of the Senior Notes Indenture Trustee, whose fees and expenses shall not exceed Seven Hundred Thousand Dollars ($700,000).

Except to the extent that a holder of an Allowed General Unsecured Claim and the Debtors or Reorganized Debtors, as applicable, agree to a less favorable treatment, on the later of the Effective Date and the date on which such General Unsecured Claim becomes an Allowed Claim, or, in each case, as soon thereafter as is reasonably practicable, each holder of an Allowed General Unsecured Claim will receive, in full and final satisfaction, compromise, settlement, release, and discharge of, in exchange for, and on account of such holder’s rights with respect to and under such Allowed General Unsecured Claim its Pro Rata share of the General Unsecured Claims Distribution, subject to Section 7.7 of the Plan.

After giving effect to the Restructuring Transactions, all Parent Interests (Class 8) will be deemed valueless and will not receive any distribution under the Plan.  Parent Interests will be treated in accordance with the U.K. Administration.

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Prior to the Effective Date, the directors of Paragon Parent will seek an administration order from the English Court pursuant to paragraph 13 of Schedule B1 of the Insolvency Act 1986 to appoint the U.K. Administrators to implement the U.K. Sale Transaction of all or substantially all of Paragon Parent’s Assets to a new holding company (“Reorganized Paragon”) on or prior to the Effective Date pursuant to the U.K. Implementation Agreement.  Upon appointment, the U.K. Administrators will assume all powers necessary or expedient to effectuate the reorganization contemplated in the U.K. Implementation Agreement (including the power to effect the U.K. Sale Transaction).

The U.K. Implementation Agreement will effect the transfer of the Transferred Subsidiaries to Reorganized Paragon and will provide for the wind-down of the Liquidating Subsidiaries which consist of dormant entities and discontinued businesses.

The Restructuring, including the U.K. Administration, will leave the Debtors’ ongoing business intact under Reorganized Paragon and will substantially de-lever it, providing for the reduction of approximately $2.3 billion of the Debtors’ debt and $58 million of the Debtors’ annual cash interest expense upon the completion of the Restructuring.  This deleveraging will enhance the Debtors’ long-term growth prospects and competitive position and allow the Debtors to emerge from their chapter 11 cases (the “Chapter 11 Cases”) as reorganized entities better positioned to withstand a depressed market for offshore contract drilling.

THE PLAN PROVIDES THAT HOLDERS OF ALL CLAIMS OR INTERESTS WHO VOTE TO ACCEPT THE PLAN, HOLDERS OF CLAIMS OR INTERESTS THAT ARE UNIMPAIRED UNDER THE PLAN AND DO NOT TIMELY OBJECT TO THE RELEASES PROVIDED FOR IN THE PLAN, HOLDERS OF CLAIMS OR INTERESTS WHOSE VOTE TO ACCEPT OR REJECT THE PLAN IS SOLICITED BUT WHO DO NOT VOTE EITHER TO ACCEPT OR TO REJECT THE PLAN AND DO NOT OPT OUT OF GRANTING THE RELEASES SET FORTH IN THE PLAN, AND HOLDERS OF CLAIMS OR INTERESTS WHO VOTE TO REJECT THE PLAN BUT DO NOT OPT OUT OF GRANTING THE RELEASES SET FORTH IN THE PLAN ARE DEEMED TO HAVE GRANTED THE RELEASES THEREIN.

WHO IS ENTITLED TO VOTE:  Under the Bankruptcy Code, only holders of claims or interests in “impaired” Classes are entitled to vote on the Plan (unless, for reasons discussed in more detail below, such holders are deemed to reject the Plan pursuant to section 1126(g) of the Bankruptcy Code).  Under section 1124 of the Bankruptcy Code, a class of claims or interests is deemed to be “impaired” under the Plan unless (i) the Plan leaves unaltered the legal, equitable, and contractual rights to which such claim or interest entitles the holder thereof or (ii) notwithstanding any legal right to an accelerated payment of such claim or interest, the Plan, among other things, cures all existing defaults (other than defaults resulting from the occurrence of events of bankruptcy) and reinstates the maturity of such claim or interest as it existed before the default.

The following table summarizes, assuming an Effective Date of July 31, 2017, (i) the treatment of Claims and Interests under the Plan, (ii) which Classes are impaired by the Plan, (iii) which Classes are entitled to vote on the Plan, and (iv) the estimated recoveries for holders of Claims and Interests.  The table is qualified in its entirety by reference to the full text of the Plan.  For a more detailed summary of the terms and provisions of the Plan, see Section VI—Summary of the Plan below.  A detailed discussion of the analysis underlying the estimated recoveries, including the assumptions underlying such analysis, is set forth in the Valuation Analysis in Section VIII.

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(3)  This approximate percentage recovery does not include estimated amounts for recoveries, if any, for the Noble Claims.

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(4)  This approximate percentage recovery does not include estimated amounts for recoveries, if any, for the Noble Claims.

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(5)  This amount does not include estimated amounts for any rejection damages claims that may be asserted at a later date.

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WHERE TO FIND ADDITIONAL INFORMATION:  Paragon Parent currently files quarterly and annual reports with, and furnishes other information to, the Securities and Exchange Commission (“SEC”).  Copies of any document filed with the SEC may be obtained by visiting the SEC website at http://www.sec.gov and performing a search under the “Company Filings” link.  Each of the following filings is incorporated as if fully set forth herein and is a part of this Disclosure Statement.  Later information filed with the SEC that updates information in the filings incorporated by reference will update and supersede that information:

·                  Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on March 10, 2017.

·                  Form 8-K filed with the SEC on March 31, 2017, February 28, 2017, February 8, 2017, February 1, 2017, January 18, 2017, and January 4, 2017.

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II.
OVERVIEW OF THE DEBTORS’ OPERATIONS

A.                        The Debtors’ Business

Paragon Parent, along with its Debtor and non-Debtor subsidiaries (collectively, the “Paragon Group” or the “Company”), is a global provider of offshore drilling rigs.  Paragon’s operated fleet includes 34 jackups, including two high-specification, heavy duty/harsh environment jackups, and five floaters (four drillships and one semisubmersible).  Paragon’s primary business is contracting its rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for its exploration and production customers on a dayrate basis around the world.  Paragon’s principal executive offices are located in Houston, Texas.  Paragon Parent is a public limited company registered in England and Wales with company number 08814042 and registered office at 20-22 Bedford Row, London, WC1R 4JS, England.

For the year ended December 31, 2016, the audited and consolidated financial statements of the Paragon Group reflected total revenues of approximately $636,176,000 and a net loss of $338,356,000.  As of December 31, 2016, the Paragon Group’s audited and consolidated balance sheet reflected assets totaling approximately $1,903,731,000 and liabilities totaling approximately $2,736,488,000.  Each of the Debtors is either an issuer or guarantor of the Paragon Group’s debt.

B.                        The Company’s Drilling Fleet and Drilling Contracts

The Company’s drilling fleet is composed of 34 jackup rigs, four drillships, and one semisubmersible.  Jackup rigs are mobile, self-elevating drilling platforms equipped with legs that can be lowered to the ocean floor.  Each of the Company’s jackups is cantilevered, meaning that the drilling platform may be extended out from the hull to perform drilling or workover operations over pre-existing platforms or structures.  Drillships are self-propelled vessels that maintain their position over a well through the use of a fixed mooring system or a computer-controlled dynamic positioning system.  Semisubmersibles are floating platforms that can be submerged to a predetermined depth so that a portion of the hull is below the water surface during drilling in order to improve stability.  Similar to drillships, semisubmersibles maintain their position over a well through the use of a fixed mooring system or a computer-controlled dynamic positioning system.

The Company operates for leading national, international, and independent oil and gas companies in active hydrocarbon producing markets, principally in the North Sea, the Middle East, and India.

1.                          The North Sea

The Company presently has nine jackups and one semisubmersible in the North Sea.  The units typically operate in the British and Dutch sectors of the North Sea for independent oil and gas companies.  Two of the nine jackups are high-specification rigs currently operating in the North Sea that were acquired through Paragon Parent’s acquisition in late 2014 and early 2015 of Prospector Offshore Drilling S.A. (“Prospector”).  Additionally, Paragon Parent acquired certain subsidiaries of Prospector that have contracted to build three new high specification rigs.  The acquisition of the Prospector assets, which are owned by non-Debtor subsidiaries and are not subject to these proceedings, is described further in Section II.C herein.  The remainder of the North Sea assets are standard specification rigs.  The Company currently has six jackups and one semisubmersible that are stacked in the North Sea.

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2.                          Africa

The Company presently has three jackups in West Africa, where the Company’s customers are predominantly a mix of U.S. (e.g., Noble Energy, Marathon Oil Corporation), European (e.g., Perenco, Dana Incorporated, Glencore) and indigenous African (e.g., South Atlantic Petroleum, PanAfrican Energy) independent exploration and production companies.  Currently, all three of the Company’s jackups in West Africa are stacked.  On April 25, 2017, the Bankruptcy Court entered the Order Authorizing the Debtors to Sell the Paragon L782 Rig and the Paragon L783 Rig Free and Clear of all Liens, Claims, Encumbrances, and Other Interests to Dixstone Holdings Limited (Docket No. 1405).

3.                          The Middle East

The Company presently has seven jackups in the Middle East, working primarily for national oil companies in the United Arab Emirates (“UAE”).  Five of the Company’s jackups in the Middle East are currently stacked.  The Company also has one drillship stacked in the Middle East.

4.                          India

The Company presently has three jackups operating via modified bareboat charters in India.  Through this structure, the Company charters these jackups to a local operating company, which then contracts these jackups to the Oil and Natural Gas Corporation, the Indian state-owned oil company.

5.                          Mexico and the U.S. Gulf of Mexico

Eleven jackup rigs and one drillship are stacked in the U.S. Gulf of Mexico.  The Debtors’ previous operations in Mexico were entirely with Petróleos Mexicanos (“Pemex”), the Mexican state-owned oil company.  Pemex accounted for 3% of the Debtors’ operating revenues in 2016, 9% of the Debtors’ operating revenues in 2015, 16% of the Debtors’ operating revenues in 2014, and 19% of the Debtors’ operating revenues in 2013.

6.                          Southeast Asia

The Company has one jackup stacked in Malaysia.

7.                          Puerto Rico

The Company has two drillships stacked in Puerto Rico.

C.                        The Debtors’ History and Organizational Structure

1.                          Spin-Off from Noble Corporation

The Company was founded through a spin-off from Noble Corporation plc (“Noble”), an offshore drilling company incorporated as a public limited company under the laws of England and Wales with a principal place of business in Houston, Texas.  Paragon Parent was incorporated on December 13, 2013 as “Noble Spinco Limited” and, on February 7, 2014, changed its name to “Paragon Offshore Limited.”  On July 17, 2014, Paragon Parent was re-registered as “Paragon Offshore plc,” a public limited company under the laws of England and Wales with a principal place of business in Houston, Texas.

On August 1, 2014, Noble completed the spin-off of the Company by (i) transferring to Paragon Parent the assets and liabilities constituting most of Noble’s standard specification drilling business (the

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“Separation”) and (ii) making a pro rata distribution to its shareholders of all of Paragon Parent’s issued and outstanding ordinary shares (the “Distribution” and, together with the Separation, the “Spin-Off”).  The rigs comprising Noble’s standard specification business consisted of 34 jackups, five drillships, three semisubmersibles, a floating production, storage, and offloading vessel (“FPSO”), and related assets and businesses.  In exchange, Paragon Parent granted Noble an intercompany note in the amount of approximately $1,730,000,000 and incurred various liabilities accruing before and after completion of the Spin-Off.  Additionally, Paragon Parent borrowed $650,000,000 under the Term Loan Agreement and issued $1,080,000,000 under the Senior Notes Indenture.  Paragon Parent used these borrowings to satisfy the intercompany note.  The rigs transferred to the Company through the Spin-Off had an average age of 35 years.  Paragon Parent did not have any material assets or liabilities prior to the Spin-Off.

During 2014, the Company identified indicators of impairment, including lower crude oil prices, a decrease in contractual activities particularly for floating rigs, and resultant projected declines in dayrates and utilization.  In the fourth quarter of 2014, the Company concluded that a triggering event occurred requiring it to perform an impairment analysis of its fleet of drilling rigs. The Company compared the net book value of its drilling rigs to the relative recoverable value, which was determined using an undiscounted cash flow analysis.  As a result of this analysis, Paragon Parent determined that three of its rigs and its FPSO were impaired.  Paragon Parent also decided to scrap four other vessels at this time.  Each of these rigs was acquired from Noble in connection with the Spin-Off.  Paragon Parent’s estimate of fair value of these drilling rigs resulted in the recognition of an impairment loss of $1.1 billion for the year ended December 31, 2014.

2.                          Prospector Acquisition

On November 17, 2014, Paragon Parent acquired 89.3 million, or 94.4%, of the outstanding shares of Prospector, an offshore drilling company organized in Luxembourg and traded on the Oslo Axess, from certain shareholders and in open market purchases for approximately $190 million in cash.  In December 2014, Paragon Parent purchased an additional 4.1 million shares of Prospector for approximately $10 million in cash, increasing its ownership to approximately 93.4 million shares, or 98.7%.  On January 22, 2015, Paragon Parent settled a mandatory tender offer for additional outstanding shares, increasing its ownership to approximately 99.6% of the outstanding shares of Prospector.  Finally, on February 23, 2015, Paragon Parent acquired all remaining issued and outstanding shares in Prospector.  In the aggregate, Paragon Parent spent approximately $202 million to acquire 100% of Prospector and funded the purchase of these shares using proceeds from the Revolving Credit Facility and cash on hand.  During the first quarter of 2015, Paragon Parent repurchased $100 million par value of Prospector’s 2019 Second Lien Callable Bonds at a price of 101% of par, plus accrued interest, pursuant to change of control provisions under the bonds.  Paragon Parent also repaid the principal balance outstanding under Prospector’s 2018 Senior Secured Credit Facility, which totaled approximately $261 million (including accrued interest).  Paragon Parent made these payments through the use of cash on hand and borrowings under the Revolving Credit Facility.

The Prospector acquisition expanded and enhanced Paragon’s global fleet by adding two high specification jackups contracted to Total E&P U.K. Limited and Elf Exploration U.K. Limited for use in the United Kingdom region of the North Sea.  Moreover, Paragon acquired subsidiaries of Prospector that contracted for the construction of three newbuild high specification jackup rigs in China by Shanghai Waigaoqiao Ship Co. Ltd. (“SWS”).  The three rigs are currently scheduled for delivery in October 2017.  Each newbuild is being built pursuant to a contract between one of Prospector’s subsidiaries and SWS, without a Paragon Parent or Prospector parent company guarantee or other direct recourse to any other subsidiary of Paragon Parent other than the applicable Prospector subsidiary.

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On July 24, 2015, the Company executed a combined $300 million transaction with subsidiaries of SinoEnergy (collectively, the “Lessors”) relating to the two high specification jackup units acquired in the Prospector acquisition.  The Company sold these rigs to the Lessors and immediately leased them from Lessors for a period of five years with a repurchase obligation at the end of the lease term pursuant to a lease agreement for each unit (the “Lease Agreements”).  The Lease Agreements provide for an event of default if Paragon Parent files a case under chapter 11 of the Bankruptcy Code.  Due to the filing of its Chapter 11 Cases, Paragon Parent negotiated a forbearance under the Lease Agreements through April 15, 2016, which was subsequently extended through March 7, 2017.  On March 7, 2017, the Company obtained a forbearance through August 1, 2017, that becomes a permanent waiver of the event of default upon the Effective Date of the Plan.  Approximately 44% of Paragon’s EBITDA for calendar year 2016 was attributable to the Prospector entities.

3.                          Corporate Structure

The Debtors have incorporated entities in a number of jurisdictions, including the Bahamas, Bermuda, Brazil, Cayman Islands, Cyprus, Delaware, Hungary, India, Luxembourg, Malaysia, Mexico, the Netherlands, Nigeria, Norway, Scotland, Singapore, Switzerland, and Venezuela.  All of the Debtors are direct or indirect subsidiaries of Paragon Parent, and, together, constitute the issuers and guarantors of all of the Paragon Group’s debt.  Paragon’s corporate structure chart, attached hereto as Exhibit B, along with the Prospector corporate structure chart, attached hereto as Exhibit C, provide an illustrative representation of the corporate structure of the Paragon Group and Prospector.

D.                        Directors and Officers

Paragon Parent’s current board of directors is composed of J. Robinson West, Chairman, Anthony R. Chase, Thomas L. Kelly II, John P. Reddy, Dean E. Taylor, and William L. Transier.

Paragon Parent’s current senior management team is composed of Dean E. Taylor, Interim President and Chief Executive Officer, Lee M. Ahlstrom, Senior Vice President and Interim Chief Financial Officer, William C. “Charlie” Yester, Senior Vice President—Operations, Andrew W. Tietz, Senior Vice President—Marketing and Contracts, Anirudha “Sunil” Pangarkar, Senior Vice President—Special Projects, Supply Chain and Maintenance, Todd D. Strickler, Senior Vice President of Administration, General Counsel and Corporate Secretary, and Ale Veltmann, Vice President—Chief Accounting Officer.

On November 10, 2016, the Company’s board of directors announced that it had appointed Dean E. Taylor to serve as Interim President and Chief Executive Officer, and Lee M. Ahlstrom to serve as Interim Chief Financial Officer.

The composition of the board of directors of each Reorganized Debtor will be disclosed prior to the entry of the order confirming the Plan in accordance with 11 U.S.C. § 1129(a)(5).

E.                        Regulation of the Debtors’ Business

The Debtors’ operations are conducted in the United States and foreign jurisdictions and are subject to governmental laws, regulations, and treaties in the countries in which they operate.  The laws, regulations, and treaties that impact the Debtors’ operations include those relating to the operation of drilling units, environmental protection, health and safety, various restrictions on oil and natural gas exploration and development, taxation of the Debtors’ earnings and the earnings of the Debtors’ expatriate personnel, immigration restrictions for expatriate personnel, minimum requirements for the use of local employees and suppliers, duties and restrictions on the importation and exportation of drilling units and other equipment, local currency requirements, and restrictions on repatriated cash.

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F.                         The Debtors’ Capital Structure

1.                          Equity Ownership

Paragon Parent is a public company and files annual reports with, and furnishes other information to, the SEC.  Before December 18, 2015, the ordinary shares of Paragon Parent were traded on the New York Stock Exchange (the “NYSE”) under the symbol “PGN.”  On August 6, 2015, Paragon Parent received a letter from the NYSE stating that Paragon Parent was not in compliance with the NYSE’s continued listing standards.  Specifically, the letter noted that for 30 consecutive trading days, the average closing price for the ordinary shares of Paragon Parent was below the minimum $1.00 per share requirement for continued listing on the NYSE.  On December 17, 2015, Paragon Parent received a letter (the “Suspension Notice”) from the NYSE notifying the Company that the NYSE had suspended trading in Paragon Parent’s shares effective immediately.  The NYSE determined that Paragon Parent’s ordinary shares were no longer suitable for listing based on “abnormally low” price levels.  Paragon Parent’s ordinary shares have been trading on the over the counter markets under the trading symbol “PGNPF” between December 18, 2015 and February 12, 2016 and under the symbol “PGNPQ” since February 14, 2016.

2.                          Prepetition Indebtedness

The Debtors’ significant prepetition indebtedness included secured financing obligations in the amount of approximately $1,419,550,000 and unsecured financing obligations in the amount of approximately $1,021,000,000.  The Debtors’ secured and unsecured financing obligations are described in greater detail below.  Such description is for informational purposes only and is qualified in its entirety by reference to the documents setting forth the specific terms of such obligations and their respective related agreements.  As noted above, substantially all of the Paragon Group’s debt is issued or guaranteed by the Debtors.

(a)                     Revolving Credit Facility

Paragon Parent and Paragon International Finance Company are borrowers under that certain Senior Secured Revolving Credit Agreement, dated as of June 17, 2014, by and among Paragon Parent and Paragon International Finance Company, as borrowers, the lenders and issuing banks party thereto from time to time, JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Facility Agent”), J.P. Morgan Securities LLC, Deutsche Bank Securities Inc. and Barclays Bank plc, as Joint Lead Arrangers and Joint Lead Bookrunners, and certain other parties thereto, (as amended, restated, modified, or supplemented from time to time, the “Revolving Credit Agreement”).  The Revolving Credit Agreement provides for revolving credit commitments, including letter of credit commitments and swingline commitments, in an aggregate principal amount of $800,000,000 (the “Revolving Credit Facility,” and the amounts outstanding thereunder, the “Revolving Loans”).  The Revolving Credit Agreement is secured by a first priority lien as described in clause (c) below.  The Revolving Credit Agreement matures in July 2019.

On September 3, 2015, Paragon Parent borrowed approximately $332,000,000 under the Revolving Credit Agreement, which represented substantially all of the remaining undrawn amount that was available to Paragon Parent under the Revolving Credit Facility at that time.  On December 23, 2015, Paragon Parent borrowed an additional $11,500,000 under the Revolving Credit Facility.  Such proceeds are being held in a deposit account in the name of Paragon Parent and have not been commingled with other funds.  As of the date hereof, the aggregate principal amount outstanding under the Revolving Credit Agreement is $709,100,000 in unpaid principal, plus interest, fees, and other expenses, in addition to approximately $46,664,000 of letters of credit.  The Revolving Loans bear interest, at Paragon Parent’s option, at either (i) an adjusted LIBOR plus an applicable margin ranging between 1.50% to 2.50%,

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depending on the Leverage Ratio (as defined in the Revolving Credit Agreement), or (ii) a base rate plus an applicable margin ranging between 0.50% to 1.50%, depending on the Leverage Ratio (as defined in the Revolving Credit Agreement).

(b)                     Term Loan

Paragon Offshore Finance Company is the borrower under that certain Senior Secured Term Loan Agreement, dated as of July 18, 2014, by and among Paragon Parent, as the parent guarantor, Paragon Offshore Finance Company, as borrower, the lenders party thereto, and Cortland Capital Market Services LLC, as successor administrative agent (as amended, restated, modified, or supplemented from time to time, the “Term Loan Agreement”).  The Secured Term Loan Agreement provided for a term loan in an aggregate principal amount of $650,000,000 (the “Term Loan”).  The Term Loan is secured by a first priority lien as described in clause (c) below.  The Term Loan matures in July 2021.

As of the date hereof, the aggregate principal amount outstanding under the Term Loan Agreement is approximately $641,875,000 in unpaid principal, plus interest, fees, and other expenses.  The Term Loan bears interest at LIBOR plus 2.75%, subject to a minimum LIBOR rate of 1% or a base rate plus 1.75%, at Paragon Offshore Finance Company’s option.

(c)                      Guaranty and Collateral Agreement

The obligations of Paragon Parent, Paragon International Finance Company, Paragon Offshore Finance Company, and the Debtor-guarantors, as applicable, under the Revolving Credit Agreement and the Term Loan Agreement are together secured pursuant to that certain Guaranty and Collateral Agreement, dated as of July 18, 2014 (as amended, restated, modified, or supplemented from time to time, the “Guaranty and Collateral Agreement”), in favor of JPMorgan Chase Bank, N.A., as collateral agent (the “Collateral Agent”).  Pursuant to the Guaranty and Collateral Agreement, each of the Debtors granted a first-priority lien on substantially all of its property other than “Excluded Assets,” which Excluded Assets include, among other things, any deposit accounts and securities accounts, any Capital Stock in Unrestricted Subsidiaries (as defined in the Revolving Credit Agreement and Term Loan Agreement), and owned or leased real property.  The collateral includes the Collateral Rigs (as defined in the Revolving Credit Agreement and Term Loan Agreement), capital stock of (i) the owners of the Collateral Rigs, (ii) Paragon International Finance Company, and (iii) Paragon Offshore Finance Company and certain other property pledged under the Collateral Documents (as defined in the Revolving Credit Agreement and Term Loan Agreement).  In addition, certain guarantors under the Guaranty and Collateral Agreement executed and delivered to the Collateral Agent mortgages for each of the Collateral Rigs.

(d)                     6.75% and 7.25% Senior Notes

Paragon Parent is party to that certain Senior Notes Indenture, dated as of July 18, 2014, by and among Paragon Parent, as issuer, each of the guarantors named therein, and Deutsche Bank Trust Company Americas, as trustee, and the other parties thereto (as amended, restated, modified, or supplemented from time to time, the “Senior Notes Indenture”), pursuant to which the Company issued 6.75% Senior Notes due 2022 in the aggregate principal amount of $500,000,000 (the “6.75% Senior Notes”) and 7.25% Senior Notes due 2024 in the aggregate principal amount of $580,000,000 (the “7.25% Senior Notes” and, together with the 6.75% Notes, the “Notes”).  As of the date hereof, the aggregate amount outstanding under the 6.75% Senior Notes is approximately $456,572,000 in unpaid principal, plus interest, fees, and other expenses, and the aggregate amount outstanding under the 7.25% Senior Notes is approximately $527,010,000 plus interest, fees, and other expenses.

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G.                       Significant Prepetition Contracts and Leases

As more fully described in this Disclosure Statement, the Paragon Group’s most significant contracts are, and have been, its revenue contracts with its customers, which include, and have included, leading national, international, and independent oil and gas companies.  The Company contracts its rigs, related equipment and work crews to conduct oil and gas drilling and workover operations for its exploration and production customers on a dayrate basis around the world.  These contracts may vary in duration, as the Company contracts its services for a specific period of time or a period necessary to drill a defined number of wells.  The Company also has contracts with numerous vendors, some of which are key to its business, relating to the provision of equipment, personnel, or services necessary to support its business.  During its Chapter 11 Cases, the Company plans to operate in the ordinary course and to continue its relationships with its contract counterparties and vendors without interruption.

In connection with the Spin-Off, Noble, Paragon Parent, and certain of their respective subsidiaries entered into the following agreements (collectively, the “Separation Agreements”) (6):

·                                          that certain Master Separation Agreement (the “Master Separation Agreement”), dated as of July 31, 2014, by and between Noble and Paragon Parent, which details the actions necessary to effectuate the Spin-Off;

·                                          that certain Tax Sharing Agreement (the “Tax Sharing Agreement”), dated as of July 31, 2014, by and between Noble and Paragon Parent, which generally requires Paragon Parent to indemnify Noble for all taxes attributable to the standard specification drilling business, and in turn requires Noble to indemnify Paragon Parent against all taxes attributable to the high specification drilling business; and

·                                          that certain Employee Matters Agreement, dated as of July 31, 2014, by and between Noble and Paragon Parent, under which Paragon Parent assumed certain Noble employment plans and created certain new plans to provide employee benefits.  Each of the Agreements is governed by New York law.

In addition to their contracts in the ordinary course of business and the Separation Agreements, the Debtors have an office lease in Houston, Texas, where their corporate headquarters are located.  The Debtors also own and lease administrative offices, marketing offices, and sites used primarily for storage, maintenance, and repairs for drilling rigs and equipment in various locations worldwide.

III.
KEY EVENTS LEADING TO THE COMMENCEMENT OF CHAPTER 11 CASES

A.                        Collapse in Oil Prices

Demand for drilling services depends on, among other things, commodity prices, actual or potential changes in these prices, and the level of activity in offshore oil and gas exploration and development and production markets (which may be significantly affected by the prices of these commodities).  As a result, the offshore contract drilling industry is a cyclical business, with periods of high demand, short rig supply, and high dayrates when the price of oil is high, followed by periods of lower demand, excess rig supply, and low dayrates when the price of oil is low.  Additionally, the offshore drilling business is

(6)  Descriptions of the Agreements provided herein are for the convenience of the Bankruptcy Court and parties in interest.  To the extent there are any ambiguities or inconsistencies between the summaries and the corresponding document, the terms of the latter will govern in all respects.

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highly competitive.  Contracts are traditionally awarded on a competitive bid basis and, in times of low oil prices, offshore drilling companies may be forced to idle, stack, or scrap rigs, adversely affecting their revenues and profitability.

In the summer of 2014, Brent crude oil prices — a key factor in determining customer activity levels — began to decline, dropping from roughly $115 per barrel in June 2014 to approximately $60 per barrel by December of the same year.  As a result of this swift and substantial decline in oil prices, many of the Debtors’ customers (which include national, international, and independent oil and gas companies) reduced their exploration and development capital expenditures by as much as 20 to 25% in 2015.  Oil prices continued to decline in 2015, closing at $37.28 per barrel on December 31, 2015 — an additional 35% decrease over the course of a volatile year.  This reduced demand has led to an oversupply of rigs competing for limited tendering activity.  The oversupply of rigs has been compounded by a significant expansion of supply of (mostly non-contracted) newbuild rigs in recent years.  As of the Petition Date, Brent crude oil prices had declined by an additional approximately 10%.  Several exploration and production companies announced that they planned to reduce capital spending by 20% or more in 2016 as a result of expectations of continued low commodity prices.

Because of the amount of debt the Debtors incurred in connection with the Spin-Off and the nature of the assets acquired, the Debtors were not equipped to absorb the ongoing and precipitous decline in oil and gas prices and the corresponding decline in demand for their services.  Although the Debtors do not face any maturities on their secured debt until 2019, the severity and duration of the market downturn has increased the risk that existing customer contracts, some of which are due to expire in the near term, will not be renewed or will be renewed at materially reduced prices.  The Debtors have also suffered the effects of termination of longer-term contracts, such as the Pemex Contracts and Petrobras Contracts (as defined and described below).

B.                        Contract Terminations and Renegotiations

Throughout 2015, a number of drilling contractors reported contract cancellations by their customers.  The terms of certain of the Paragon Group’s drilling contracts permit early termination of the contract by the customer, without cause, generally exercisable upon advance notice to the Company and, in some cases, without requiring an early termination payment.  In May 2015, one of Paragon Parent’s subsidiaries received written notices of termination from Pemex with respect to drilling contracts on three of the Company’s jackups (the “Pemex Contracts”).  Under these contracts, Pemex had the right to terminate upon 30 days’ notice without making an early termination payment.  The three rigs are currently stacked.  Additionally, Pemex offered Paragon Parent the option of accepting significantly lower dayrates or facing early termination with respect to rigs that remained under contract to Pemex.  By the end of 2015, Pemex went from being one of Paragon Parent’s largest customers to employing only a single working rig.  The Company’s last remaining contract with Pemex terminated in March of 2016.

In addition to Pemex, another large customer, Petrobras, has contested the term of each of the Company’s drilling contracts (the “Petrobras Contracts”) for the Paragon DPDS2 and the Paragon DPDS3 in connection with the length of prior shipyard projects relating to these rigs and released the Paragon DPDS2 effective September 29, 2015. Under the Company’s interpretation of the Petrobras Contracts, the Paragon DPDS3 was scheduled to work until August 2017.  However, in accordance with Petrobras’ interpretation of the Petrobras Contracts, the Paragon DPDS3 was released in August 2016.  Both rigs are currently stacked in a shipyard in Puerto Rico.  Backlog related to this dispute is not included in the Company’s reported backlogs as of September 30, 2016. Paragon will vigorously pursue all legal remedies available to it under the Petrobras Contracts.

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Furthermore, as exploration and production companies seek to reduce expenses, they have approached the Company and other drilling companies to seek reductions in current contract dayrates.  Referred to as “blend and extend” discussions, these conversations are sometimes mutually beneficial — for example, if a drilling contractor agrees to lower its contract dayrate in exchange for an exploration and production company’s agreement to add time to the contract term.  In some cases, such as those the Company faced in Mexico, drilling contractors may have no choice but to lower their dayrates or face termination.  The Company has been (and may continue to be) engaged in similar discussions, which could have negative near-term impacts on revenues despite potentially providing longer-term contracts.

C.                        Prepetition Deleveraging Initiatives

In the fall of 2015, facing a continuing decline in Brent crude oil prices and corresponding decline in demand for offshore drilling services, the Debtors, under the direction of an independent committee of Paragon Parent’s Board of Directors, retained restructuring advisors to explore long-term solutions to improve Paragon Parent’s overall balance sheet strength and to engage the company’s lenders and noteholders with the intent of maximizing value for the company’s shareholders and other stakeholders.  On February 12, 2016, the Debtors entered into a plan support agreement (the “Plan Support Agreement”) with the Revolving Lenders and an ad hoc group of holders of Senior Notes Claims (the “Noteholders”) regarding the terms of a consensual restructuring.

As discussed further below, on November 29, 2016, the Revolving Lenders and the Noteholders gave notice of the termination of the Plan Support Agreement, effective December 2, 2016, as a result of, among other things, the lapse of the outside milestone date required under the Plan Support Agreement for confirmation of the Second Amended Plan (as defined herein).

IV.
EVENTS DURING THE CHAPTER 11 CASES

The Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code on February 14, 2016 (the “Petition Date”).  The filing of the petitions commenced the Chapter 11 Cases, at which time the Debtors were afforded the benefits, and became subject to the limitations, of the Bankruptcy Code.

A.                        Commencement of Chapter 11 Cases and First Day Motions

The Debtors are operating their business in the ordinary course during the pendency of the Chapter 11 Cases as they had prior to the Petition Date.  To facilitate the prompt and efficient implementation of the Plan through the Chapter 11 Cases, shortly after the Petition Date, the Debtors obtained authority to have the Chapter 11 Cases administered jointly before the Honorable Christopher S. Sontchi.  On the Petition Date, the Debtors also filed various motions seeking relief from the Bankruptcy Court to ensure a seamless transition between the Debtors’ prepetition and postpetition business operations, facilitate a smooth reorganization through the Chapter 11 Cases, and minimize any disruptions to the Debtors’ operations.  The following is a brief overview of the relief the Debtors obtained to maintain their operations in the ordinary course.

1.                          Cash Management System

The Debtors maintain a centralized cash management system designed to receive, monitor, aggregate, and distribute cash among the Paragon Group.  On the Petition Date, the Debtors filed a motion seeking authority from the Bankruptcy Court to continue the use of their existing cash management system, bank accounts, and related business forms, as well as to continue their intercompany arrangements with non-Debtors to avoid a disruption in the Debtors’ operations and facilitate the efficient administration of the

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Chapter 11 Cases.  The Bankruptcy Court granted this relief on an interim basis on February 17, 2016, and on a final basis on April 6, 2016.

2.                          Use of Cash Collateral

To address their working capital needs and fund their reorganization efforts, the Debtors require the use of cash subject to liens (the “Cash Collateral”) granted in favor of the holders of the Revolver Claims and the Term Loan Claims pursuant to the Guaranty and Collateral Agreement.  On the Petition Date, the Debtors filed a motion seeking authority from the Bankruptcy Court to continue to use the Cash Collateral in the ordinary course of business subject to certain restrictions.  The Bankruptcy Court granted this relief on an interim basis on February 17, 2016, and on a final basis on March 9, 2016 (Docket No. 140) (as further supplemented and amended, the “Final Cash Collateral Order”).  The Bankruptcy Court further extended this relief on September 26, 2016 and December 20, 2016.  On March 8, 2017, the Debtors filed a motion with the Bankruptcy Court requesting a further extension of this relief through June 5, 2017 (Docket No. 1222).  In exchange for the continued use of the Cash Collateral, the Debtors are providing the holders of the Revolver Claims and the holders of the Term Loan Claims with, among other things, first priority replacement liens on the Debtors’ unencumbered property and junior replacement liens on certain of the Debtors’ encumbered property as adequate protection for any diminution in value of their respective interests in the collateral securing the Revolving Loans under the Revolving Credit Agreement and the Term Loan.  In addition, the Debtors’ adequate protection obligations constitute superpriority claims under section 507(b) of the Bankruptcy Code.

On February 3, 2017, the Creditors’ Committee filed a motion (Docket No. 1078) seeking, the following modifications, among others, to the Final Cash Collateral Order:  (i) the Creditors’ Committee should receive an additional 45 days from the entry of an order granting the motion to challenge the enforceability, priority or extent of the Revolving Lenders’ and Term Lenders’ prepetition liens (the “Challenge Period”); (ii) up to $150,000 of the Revolving Lenders’ and Term Lenders’ prepetition collateral should be made available for the Creditors’ Committee to challenge the enforceability, priority or extent of the Revolving  Lenders’ and Term Lenders’ prepetition liens; (iii) the fees of the Creditors’ Committee’s professionals should be included in the Final Cash Collateral Order’s fee carveout; and (iv) the Creditors’ Committee should receive the same reports relating to Cash Collateral as provided to other parties.  On February 21, 2017, the Bankruptcy Court denied the Creditors’ Committee’s request to extend the Challenge Period, along with the Creditors’ Committee’s request for $150,000 to be made available to fund an investigation of the prepetition liens.  However, the Debtors and the Requisite Lenders agreed that the Creditors’ Committee’s professional fees will be included in the Final Cash Collateral Order’s fee carveout and that the Creditors’ Committee will receive the requested reports.

3.                          Taxes

Pursuant to the Plan, the Debtors intend to pay all taxes and regulatory obligations in full.  To minimize any disruption to the Debtors’ operations and ensure the efficient administration of the Chapter 11 Cases, on the Petition Date, the Debtors filed a motion seeking authority from the Bankruptcy Court to pay all taxes, fees, and similar charges and assessments that arose prepetition, including any such amounts that become due and owing postpetition, to the appropriate taxing, regulatory, or other governmental authority in the ordinary course of the Debtors’ business.  The Bankruptcy Court granted this relief on an interim basis on February 17, 2016, and on a final basis on March 8, 2016.

4.                          Utilities

In the ordinary course of business, the Debtors incur certain expenses related to essential utility services, such as electricity, gas, water, satellite, and telecommunications.  Accordingly, on the Petition Date, the

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Debtors filed a motion seeking (i) authority from the Bankruptcy Court to continue payments to such utility providers in the ordinary course and (ii) approval of procedures to provide such utility providers with adequate assurance that the Debtors will continue to honor their obligations in the ordinary course.  The Bankruptcy Court granted this relief on an interim basis on February 17, 2016, and on a final basis on March 8, 2016.

5.                          Insurance

As is common in the contract offshore drilling industry, the Debtors maintain a complex and comprehensive insurance program (the “Paragon Insurance Program”) designed to protect their property, assets, key personnel, and business operations.  The maintenance of certain insurance coverage is essential to the Debtors’ operations and is required by laws, various regulations, financing agreements, and revenue contracts.  The Debtors believe that the satisfaction of their obligations relating to the Paragon Insurance Program, whether arising pre- or postpetition, is necessary to maintain the Debtors’ relationships with their insurance providers and ensure the continued availability and commercially reasonable pricing of such insurance coverage.  Accordingly, on the Petition Date, the Debtors filed a motion seeking authority from the Bankruptcy Court to continue to honor their obligations under the Paragon Insurance Program in the ordinary course.  The Bankruptcy Court granted this relief on an interim basis on February 17, 2016, and on a final basis on March 9, 2016.

6.                          Employee Wages and Benefits

The Debtors’ business, including the operation of the Debtors’ drilling assets, is labor intensive and relies upon thousands of employees, crew members, and contractors worldwide.  Additionally, many of the Debtors’ employees are employed by non-Debtor affiliates who are dependent on funding from the Debtors to compensate these employees.  To minimize the uncertainty and potential distractions associated with the Chapter 11 Cases and the potential disruption of the Debtors’ operations resulting therefrom, on the Petition Date, the Debtors filed a motion seeking authority from the Bankruptcy Court to continue to honor their obligations to their workforce in the ordinary course of business, including (i) the payment of pre- and postpetition wages, salaries, reimbursable employee expenses, and accrued and unpaid employee benefits and (ii) the continuation of the Debtors’ benefit programs and policies.  The Bankruptcy Court granted this relief on an interim basis on February 17, 2016, and on a final basis on March 8, 2016.

7.                          Trade Payables

In the ordinary course of business, the Paragon Group incurs various fixed, liquidated, and undisputed payment obligations (the “Trade Payables”) to various third-party providers of goods and services that facilitate the Debtors’ business operations (the “Trade Creditors”).  On the Petition Date, the Debtors filed a motion seeking interim and final authority from the Bankruptcy Court to pay, in the ordinary course of business, allowed prepetition claims (the “Trade Claims”) of the Trade Creditors, many of which are located in jurisdictions outside the United States.  The Bankruptcy Court granted this relief on an interim basis on February 17, 2016, and on a final basis on March 8, 2016 (the “Trade Creditors Order”).  Since the Petition Date, approximately $34.6 million of Trade Claims have been paid pursuant to the Trade Creditors Order.

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B.                        Other Procedural Motions and Retention of Professionals

The Debtors have filed several other motions that are common to chapter 11 proceedings of similar size and complexity as the Chapter 11 Cases, including applications to retain various professionals to assist the Debtors in the Chapter 11 Cases.

C.                        The Original Plan, the Second Amended Plan, and Settlement of Secured Lender Claims and Senior Notes Claims

On April 19, 2016, the Debtors filed the Second Amended Joint Chapter 11 Plan of Paragon Offshore plc and its Affiliated Debtors (Docket No. 318) (together with all supplements thereto, the “Original Plan”).  The Bankruptcy Court held a confirmation hearing on the Original Plan, which commenced on June 21, 2016 and continued on June 22, 23, 29, and 30, 2016.  Thereafter, on July 8, 2016, the Bankruptcy Court conducted a chambers conference with representatives of the Debtors, the Revolving Lenders, the Term Lenders, and the Noteholders.  At the chambers conference, the Bankruptcy Court communicated its concerns regarding the feasibility of the Original Plan, including with respect to the achievability of the projected dayrates and rig utilization contemplated by the Debtors’ business projections.

To address the Bankruptcy Court’s concerns, on August 15, 2016, the Debtors filed the Modified Second Amended Joint Chapter 11 Plan of Paragon Offshore plc and its Affiliated Debtors, dated August 15, 2016 (Docket No. 644) (together with the Original Plan, and with all supplements thereto, the “Second Amended Plan”).  In connection with the Second Amended Plan, the Debtors prepared an update to their projections reflecting actual financial results through June 30, 2016, and the impact of certain known contracting delays.  In addition, the Debtors prepared a downside sensitivity case to their projections illustrating the additional liquidity and financial covenant flexibility required to operate the Debtors’ business if the expected market recovery were to be delayed an additional 12 to 18 months (for a total of approximately four (4) years) from what was contemplated under the original projections—including if both dayrates and utilization rates for the Debtors’ offshore drilling rigs were significantly lower than expected in their business plan.  The Debtors, together with the Revolving Lenders and Noteholders, negotiated certain modifications to the Original Plan that established cushions and additional flexibility even in a downside scenario.

The confirmation hearing on the Second Amended Plan commenced on September 27, 2016 and concluded on September 30, 2016.  By oral ruling on October 28, 2016, and by order dated November 15, 2016, the Bankruptcy Court denied confirmation of the Second Amended Plan (Docket No. 890) (the “Confirmation Decision”).

Consequently, on November 29, 2016, the Revolving Lenders and the Noteholders gave notice of the termination of the Plan Support Agreement, effective December 2, 2016, as a result of, among other things, the lapse of the outside milestone date required under the Plan Support Agreement for confirmation of the Second Amended Plan.

After the Confirmation Decision, the Debtors devoted their time to developing an alternative chapter 11 restructuring proposal that would address the concerns raised by the Bankruptcy Court and form the basis for a consensual deal.  First, as the foundation of any restructuring proposal, the Debtors developed a new business plan (the “New Business Plan”) using significantly more conservative dayrate and rig utilization expectations and assumptions, which have been adjusted as a result of, among other things, the Court’s Confirmation Decision and the Debtors’ actual financial performance in chapter 11 over the course of this past year.  The New Business Plan reflects countless hours of input from the full management team and their professional advisors.  The New Business Plan aims to achieve the following goals, among others: (i) reduce cash burn to make the Debtors’ business cash flow neutral on an operating basis (excluding

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discontinued operations, working capital swings and start-up capital and financing expenditures) in the near-term; (ii) right-size the Debtors’ business by reducing its asset base and focusing their operations on key geographical areas, allowing the Debtors to recapitalize with significantly lower fixed costs, less capital, and less debt; and (iii) maximize optionality and value by increasing the runway for the Debtors until a market turnaround at no, or greatly reduced, cost.  The New Business Plan was validated by an independent third party and approved by the board of directors of Paragon Parent.

The Plan and the New Business Plan address the concerns that the Bankruptcy Court expressed in the Confirmation Decision about the feasibility of the Second Amended Plan and the Debtors’ previous business plan.  The key differences between the Plan and Second Amended Plan are, among others:  (i) under the Plan, the Debtors will emerge from bankruptcy with only $85 million in debt, whereas, under the Second Amended Plan, the Debtors would have emerged from bankruptcy with over $1.2 billion in debt; and (ii) the reduced size of the Debtors’ business upon implementation of the New Business Plan will reduce the future operating costs and cash needs of the Company.  The Debtors believe that the Restructuring contemplated by the Plan will enable the Debtors to meet their obligations upon emergence from chapter 11, and confirmation of a Plan is not likely to be followed by liquidation or the need for further financial reorganization.

The Debtors presented the New Business Plan to all three major creditor groups — the Revolving Lenders, the Term Lenders, and the Noteholders — and their advisors, provided their thoughts about the current market and future prospects, and outlined potential constructs for a chapter 11 restructuring that all three creditor groups could support.  The Debtors spent hours meeting with and negotiating with all three creditor groups regarding potential proposals for a consensual plan.  During these meetings, some of which were held with all creditor groups and others with specific creditor groups, a number of important legal and factual issues were discussed.  In addition, since October 2016, the Debtors have responded to each group’s numerous diligence requests, held a number of conference calls and face to face meetings with advisors, and in some instances, with principals to discuss the parties’ questions and positions regarding the same legal and factual issues.

On April 5, 2017, in an effort to reach a global settlement in these cases, the Debtors, the Term Loan Agent, the Revolving Credit Facility Agent, and the Creditors’ Committee attended a mediation (the “Mediation”) with the Honorable Kevin J. Carey as mediator (the “Mediator”) to address certain issues relating to the Plan and potential settlement.

As the result of countless hours of negotiations, the urging of this Court, and the assistance of the Mediator, the parties have reached a global resolution which includes, among other things, the following proposed recoveries to creditors:

·                  Secured Lenders will receive (i) Four Hundred Ten Million Dollars ($410,000,000) in Cash, (ii) the Take Back Debt, (iii) fifty percent (50%) of the New Equity Interests (subject to dilution by the Management Incentive Plan Securities), (iv) fifty percent (50%) of the Class A Litigation Trust Interests, and (v) twenty-five percent (25%) of the Class B Litigation Trust Interests;

·                  Senior Noteholders will receive (i) One Hundred Five Million Dollars ($105,000,000) in Cash, (ii) fifty percent (50%) of the New Equity Interests (subject to dilution by the Management Incentive Plan Securities), (iii) fifty percent (50%) of the Class A Litigation Trust Interests, and (iv) seventy-five percent (75%) of the Class B Litigation Trust Interests; and

·                  Holders of General Unsecured Claims will receive their Pro Rata share of the General Unsecured Claims Distribution, including Cash in the amount equal to the lesser of (a) 30% of the amount of

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such holder’s Allowed General Unsecured Claim and (b) its Pro Rata share of Five Million Dollars ($5,000,000).

This settlement (the “Plan Settlement”) satisfies the requirements of Bankruptcy Rule 9019, which governs the approval of compromises and settlements.  Bankruptcy Rule 9019 provides that “[o]n motion by the [debtor in possession] and after notice and a hearing, the court may approve a compromise or settlement.”  A settlement does not have to be the best possible compromise; rather, a court should canvass the issues to see whether the settlement “falls below the lowest point in the range of reasonableness.”  In re World Health Alts., Inc., 344 B.R. 291, 296 (Bankr. D. Del. 2006) (quoting In re W.T. Grant Co., 699 F.2d 599, 608 (2d Cir. 1983)); see also In re Key3Media Grp., Inc., 336 B.R. 87, 93 (Bankr. D. Del. 2005) (internal quotations and citations omitted).

Ultimately, a settlement must be fair, reasonable, and in the best interests of the debtors’ estates.  See Law Debenture Trust Co. of New York v. Kaiser Aluminum Corp. (In re Kaiser Aluminum Corp.), 339 B.R. 91, 95-96 (D. Del. 2006) (citing Myers v. Martin (In re Martin), 91 F.3d 389, 394 (3d Cir. 1996)) (citations omitted).  In determining whether a settlement should be approved under Bankruptcy Rule 9019, a court must assess and balance the value of the claim being compromised against the value to the estate of the acceptance of the compromise in light of several factors:  (i) the probability of success in litigation; (ii) the likely difficulties in collection; (iii) the complexity of the litigation involved, and the expense, inconvenience, and delay necessarily attending it; and (iv) the paramount interest of the creditors.  In re Martin, 91 F.3d at 393.

The Debtors, with the assistance of their legal and financial advisors, have determined that the benefits of the settlement of the Secured Lender Claims and Senior Notes Claims outweigh the benefits of litigation, the outcome of which would be uncertain, complex, protracted, and expensive.  Absent a resolution of the Secured Lender Claims and Senior Notes Claims, the Debtors would not have been able to achieve consensus with the Creditors’ Committee and Requisite Lenders on the term of the Restructuring.  Accordingly, the Debtors believe that the Plan Settlement is fair, reasonable and in the best interests of the Debtors’ estates.

D.                        Appointment of Official Committee of Unsecured Creditors

On January 27, 2017, the United States Trustee for the District of Delaware (the “U.S. Trustee”) appointed a Committee of Unsecured Creditors (the “Creditors’ Committee”) (Docket No. 1059).  The three members of the Creditors’ Committee are:  (i) Loomis Sayles and Co., L.P.; (ii) Arosa Capital Management, L.P.; and (iii) Angelo Gordon & Co., LP.  The Creditors’ Committee has retained Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel (Docket No. 1225) and Young Conaway Stargatt & Taylor, LLP as local counsel (Docket No. 1224).  On March 2, 2017, the Creditors’ Committee filed an application seeking to retain Ducera Partners LLC as financial advisor (Docket No. 1192) (the “Ducera Application”).  The Term Loan Agent filed a limited objection to the Ducera Application (Docket No. 1262), to which the Revolving Credit Facility Agent joined (Docket No. 1264).  The Ducera Application is scheduled to be heard by the Bankruptcy Court on May 30, 2017.

E.                        Request for Equity Committee

By letter dated January 30, 2017, counsel to certain holders of Paragon equity interests requested that the U.S. Trustee appoint an official committee of equity holders (the “Equity Committee”).  By letter dated February 17, 2017, the U.S. Trustee declined to appoint an Equity Committee.  On March 9, 2017, an unofficial committee of shareholders of Paragon Parent filed a motion (the “Equity Committee Motion”) with the Bankruptcy Court requesting the appointment of an Equity Committee (Docket No. 1223).   On March 20, 2017, the Debtors (Docket No. 1260) and the Revolving Credit Facility Agent and the Term

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Loan Agent (Docket No. 1261) filed objections (collectively, the “Equity Committee Motion Objections”) to the Equity Committee Motion. On March 23, 2017, the unofficial committee of shareholders of Paragon Parent filed a reply (Docket No. 1276) to the Equity Committee Motion Objections.  By oral ruling on March 27, 2017, the Bankruptcy Court denied the Equity Committee Motion.

On February 22, 2017, Paragon Parent received a request (the “EGM Request”) for an Extraordinary General Meeting (“EGM”) from certain of its shareholders.  As disclosed in a Schedule 14N filed with the SEC on February 22, 2017, these shareholders have nominated three (3) board members to replace Paragon Parent’s existing board of directors.  By letter dated March 10, 2017, J. Robinson West, Chairman of the Board of Paragon Parent, responded to the EGM Request (the “EGM Response”).  The EGM Response stated, among other things, that the EGM Request did not comply with Paragon Parent’s articles of association or U.S. securities law and, therefore, was an invalid request.  Paragon Parent does not intend to call an EGM until a valid EGM Request is received.

On March 16, 2017, Paragon Parent received a reply to the EGM Response (the “EGM Reply”).  The EGM Reply, among other things, renewed the request for an EGM and requested assistance from Mr. West in remedying the infirmities in the EGM Request.  On March 22, 2017, Mr. West responded to the EGM Reply.  The response stated, among other things, that Paragon Parent could not advise the shareholders on the specific steps to take to cure the infirmities in the EGM Request and suggested that the shareholders seek independent advice on the matter.

F.                         Claims Administration

On December 16, 2016, the Bankruptcy Court entered an order (Docket No. 958) establishing the following bar dates for the filing of Proofs of Claim in these Chapter 11 Cases:

·                  February 10, 2017 at 5:00 p.m. (prevailing Eastern Time), as the general bar date (the “General Bar Date”) for all Claims (including Claims by governmental units), except as noted below;

·                  the later of (a) the General Bar Date and (b) thirty (30) days after the claimant is served with notice of entry of an order of the Bankruptcy Court authorizing the rejection of such executory contract or unexpired lease as the deadline for any claims arising from such rejection; and

·                  the later of (a) the General Bar Date; and (b) twenty-one (21) days after the claimant is served with notice of an amendment or supplement to the Schedules as the bar date for Claims amended or supplemented by the Debtors’ amended or supplemented Schedules.

The General Bar Date has passed, and the Debtors and their advisors are reviewing and analyzing the proofs of claim that have been filed.

G.                       Sale Procedures Motion

As discussed above, the New Business Plan calls for a reduction in the Debtors’ fleet to allow them to recapitalize with significantly lower fixed costs, less capital, and less debt.  Consequently, on February 2, 2017, the Debtors filed a motion with the Bankruptcy Court seeking approval of sale procedures to sell de minimis assets, including the rigs and related equipment that are not part of the New Business Plan (Docket No. 1074) (the “Sale Procedures Motion”).  The rigs that the Debtors intend to sell are not being used and will be sold for scrap value.  The Debtors received and resolved certain informal comments received from the Creditors’ Committee and the U.S. Trustee.  On February 14, 2017, DC Capital Advisors, Ltd., a shareholder holding approximately 3.5 million shares in Paragon Parent, filed an

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objection to the Sale Procedures Motion (Docket No. 1117).  The Sale Procedures Motion was approved and an order was entered by the Bankruptcy Court on April 28, 2017 (Docket No. 1426) (the “Sales Procedures Order”).

The Sale Procedures Order grants the Debtors the authority to sell or transfer de minimis assets — including rigs and related equipment — free and clear of all liens, claims, interests, and encumbrances thereon, subject to the approved sale procedures (the “Sale Procedures”).  Pursuant to the Sale Procedures, for sales that generate net proceeds of less than $100,000, the Debtors may make the sale or transfer without providing notice or hearing.  If the sale or transfer will generate net proceeds of $100,000-$2.5 million, the Debtors must provide a notice of sale to certain parties including, among others, the Requisite Lenders and any other party that may have an interest in the asset.  The notice parties will have 10 days to object to the sale or transfer, and any unresolved objections must be filed with the Bankruptcy Court.  If no objections are made, the sale or transfer may proceed.  The sale procedures are designed to reduce the burden of seeking court approval for each rig that will be sold for little or no net proceeds.

H.                       The U.K. Administration

Under English law, a public limited company, such as Paragon Parent, cannot cancel its existing equity interests or amend its articles of association and issue new shares of a company to creditors through the chapter 11 proceeding absent shareholder consent. As such shareholder consent will not be sought, to effectuate the reorganization contemplated in the Plan, Paragon Parent is required to implement the U.K. Sale Transaction, pursuant to which Paragon Parent will, among other things, transfer the New Equity Interests (among other consideration) to holders of Allowed General Unsecured Claims on account of such Claims.  Following implementation of the U.K. Sale Transaction, the existing equity of Paragon Parent will be deemed valueless and will not receive any distribution under the Plan. Under English law, absent shareholder consent, Paragon Parent cannot effectuate the reorganization contemplated in the Plan unless it commences the U.K. Administration.

Accordingly, prior to the Effective Date, the directors of Paragon Parent will seek an administration order from the English Court pursuant to paragraph 13 of Schedule B1 of the Insolvency Act 1986 to appoint the U.K. Administrators to, among other things, implement the U.K. Sale Transaction pursuant to the U.K. Implementation Agreement.  Although the directors of Paragon Parent intend to seek appointment of the U.K. Administrators after the Confirmation Hearing but prior to the Effective Date, if circumstances warrant, the directors of Paragon Parent may seek an administration order from the English Court even earlier, including prior to the Confirmation Hearing.  Upon appointment, the U.K. Administrators will assume all powers necessary or expedient to effectuate the reorganization contemplated in the U.K. Implementation Agreement (including the power to effect the U.K. Sale Transaction in relation to Paragon Parent).

The proposed U.K. Administrators will be certain partners of Deloitte LLP (“Deloitte”).  Prior to the appointment of the U.K. Administrators, Deloitte will conduct due diligence and complete other preparatory work, including negotiating the U.K. Implementation Agreement with the relevant counterparties.  The Bankruptcy Court has approved Deloitte’s retention to perform these services (Docket No. 1044).

The Plan contemplates that the Debtors will effectuate the U.K. Sale Transaction and the Corporate Restructuring (the reorganization of the Paragon Entities in accordance with the terms of the U.K. Implementation Agreement).  As fully set forth in Section VI.D.13 below, and in Section 5.13 of the Plan, prior to or substantially contemporaneously with the Effective Date, following completion of the Corporate Restructuring and pursuant to the terms of the U.K. Implementation Agreement and the Plan,

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Paragon Parent will distribute the New Equity Interests to holders of Allowed General Unsecured Claims and will distribute Cash to the holders of certain Allowed Claims in consideration for the release in full of such Allowed Claim.  Reorganized Paragon will enter into the Take Back Debt Agreement, among other documents, with the holders of Allowed Revolver Claims and Allowed Term Loan Claims, in consideration for the release of such Allowed Revolver Claim or Allowed Term Loan Claim, as applicable.

V.
MATTERS INVOLVING PARAGON PARENT AND NON-DEBTORS

A.                        Litigation

1.                          Pending Litigation

The Company is involved in a number of lawsuits and matters which have arisen in the ordinary course of business.  The Company does not expect any liability it may have in these matters to have a material adverse effect on its consolidated financial statements.  The Company, however, cannot predict with certainty the outcome or effect of pending or threatened litigation or legal proceedings, and the eventual outcome could materially differ from its current estimates.

B.                        Tax Disputes

In connection with the Spin-Off, Paragon Parent and Noble entered into the Tax Sharing Agreement, under which Paragon Parent is generally responsible for all taxes attributable to its business, whether accruing before, on, or after the date of the Spin-Off.  Noble is generally responsible for any taxes arising from the Spin-Off (and certain related transactions) that are imposed on Paragon Parent, Noble, or any of Noble’s subsidiaries, with the exception that Paragon Parent is responsible for any such taxes resulting from certain actions or failures to act by Paragon Parent after the effective date of the Tax Sharing Agreement.

As of December 31, 2016, the Company has received certain tax audit claims, primarily in Mexico and Brazil, attributable to the Company’s income, customs and other business taxes.  The Company has contested, or intends to contest, these assessments, including through litigation if necessary.  The Company has no surety bonds or letters of credit associated with tax audit claims outstanding as of December 31, 2016.

In addition to the tax audit claims, in January 2015, a subsidiary of Noble received an unfavorable ruling from the Mexican Supreme Court on a tax depreciation position claimed in periods prior to the Spin-Off.  Although the ruling does not constitute mandatory jurisprudence in Mexico, and the amount of the final liability is generally only a fraction of that initially assessed, the ruling creates potential indemnification exposure for Paragon Parent under the Tax Sharing Agreement.  Noble is the primary obligor to the Mexican tax authorities.

Prior to the Petition Date, Paragon Parent negotiated a settlement agreement under which it agreed to release Noble, on the Effective Date, with respect to certain claims, in exchange for Noble’s agreement to provide direct bonding necessary for Paragon Parent to challenge the Mexican tax assessments.  The terms of such agreement are set forth in the Noble Settlement Agreement, filed as Exhibit D to the Plan Supplement dated May 20, 2016 (Docket No. 399).

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In its objection to the approval of the Disclosure Statement (Docket No. 1214) (the “Committee Objection”), the Creditors’ Committee asserted that the Debtors should disclose certain “material” changes in circumstance that may impact the value of the Noble Settlement to the Debtors’ estates, including: (i) pursuant to certain changes in Mexican law, bonding for the Mexican tax assessments may no longer be required; (ii) the Plan and the New Business Plan project more limited activity in Mexico than the previous business plan; and (iii) the Mexican tax authorities have not filed any proofs of claim in these cases. The Creditors Committee further asserted the Debtors will need to explain the purported benefits of the settlement in light of these changes.

Following further review and subsequent events, including the development of the Restructuring Transactions, the Debtors believe that further efforts to effectuate the Noble Settlement would not be in the best interests of the Debtors’ estates.  Accordingly, the Debtors are not seeking approval of the Noble Settlement.  Moreover, any Cause of Action, including, but not limited to, those arising under, relating to or in connection with the Spin-Off, (the “Noble Claims”) against Noble and its affiliates and subsidiaries and their respective officers and directors (collectively, the “Noble Entities”) will be preserved and transferred to the Litigation Trust for the benefit of holders of Allowed Revolver Claims, Allowed Term Loan Claims, and Allowed Senior Notes Claims, as provided in the Plan and Litigation Trust Agreement.

VI.
SUMMARY OF THE PLAN

This section of the Disclosure Statement summarizes the Plan, a copy of which is annexed hereto as Exhibit A.  This summary is qualified in its entirety by reference to the Plan.

A.                        Administrative Expense Claims, Fee Claims, and Priority Tax Claims

1.                          Treatment of Administrative Expense Claims

Except to the extent that a holder of an Allowed Administrative Expense Claim (other than a Fee Claim) and the Debtors or Reorganized Debtors, as applicable, agree to a less favorable treatment, on the later of the Effective Date and the date on which such Administrative Expense Claim becomes an Allowed Claim, or, in each case, as soon thereafter as is reasonably practicable, each holder of an Allowed Administrative Expense Claim will receive, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for such Allowed Administrative Expense Claim, Cash in an amount equal to the Allowed amount of such Claim; provided, that Allowed Administrative Expense Claims that arise in the ordinary course of the Debtors’ business, as Debtors in Possession, will be paid by the Debtors or the Reorganized Debtors, as applicable, in the ordinary course of business, consistent with past practice and in accordance with the terms and subject to the conditions of any orders or agreements governing, instruments evidencing, or other documents relating to such transactions, without further actions by holders of such Allowed Administrative Expense Claims or further approval by the Bankruptcy Court.  For the avoidance of doubt, this Section of the Plan will not be applicable to any Restructuring Expenses, which will be paid pursuant to Section 5.17 of the Plan.

2.                          Treatment of Fee Claims

All Professional Persons seeking awards by the Bankruptcy Court of compensation for services rendered or reimbursement of expenses incurred through and including the Effective Date under sections 327, 328, 330, 331, 503(b)(2), 503(b)(3), 503(b)(4), 503(b)(5), 503(b)(6), or 1103 of the Bankruptcy Code will (a) file, on or before the date that is sixty (60) days after the Effective Date, their respective applications

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for final allowances of compensation for services rendered and reimbursement of expenses incurred and (b) be paid in full, in Cash, in such amounts as are Allowed by the Bankruptcy Court in accordance with the order(s) relating to or allowing any such Fee Claim.  The Allowed amounts of such Fee Claims will be determined by the Bankruptcy Court after notice and a hearing in accordance with the procedures established by the Bankruptcy Code, the Bankruptcy Rules, and any prior order of the Bankruptcy Court.

Retained Amount:  On or before the Effective Date, the Debtors will establish the Fee Claim Escrow Account with Cash equal to the aggregate Fee Claim Retained Amount for all Professional Persons.  The funding of the Fee Claim Escrow Account will be deemed a disbursement under 28 U.S.C. §1930.  To receive payment for unbilled fees and expenses incurred through the Effective Date, all Professional Persons will (i) estimate their accrued Fee Claims prior to and as of the Effective Date and (ii) estimate for expected fees and expenses for professional services rendered or costs incurred on account of these Chapter 11 Cases following the Effective Date and will deliver such estimates to the Debtors on or before the Effective Date.  If a Professional Person does not provide such estimates, the Debtors or Reorganized Debtors, as applicable, may estimate the unbilled fees and expenses of such Professional Persons; provided, that such estimate will not be considered an admission or limitation with respect to the fees and expenses of such Professional Person.  The Fee Claim Escrow Account will be maintained in trust for the Professional Persons.  Such funds in the Fee Claim Escrow Account will not constitute property of the Reorganized Debtors.  Subject to Section 2.2(a) of the Plan, Fee Claims owing to the Professional Persons and unpaid as of the Effective Date will be paid in Cash by the Reorganized Debtors from the Fee Claim Escrow Account, without interest or other earnings therefrom, as and when such Fee Claims are Allowed by a Bankruptcy Court order.  When all Allowed Fee Claims have been paid in full, any amounts remaining in the Fee Claim Escrow Account, if any, will be distributed as provided in Section 6.16 of the Plan.  If the Fee Claim Escrow Account is insufficient to pay the full Allowed amounts of the Fee Claims, remaining unpaid Allowed Fee Claims will be promptly paid by the Reorganized Debtors without any further action or order of the Bankruptcy Court.

Except as otherwise specifically provided in the Plan, from and after the Effective Date, each Debtor and Reorganized Debtor, as applicable, will pay in Cash the reasonable and documented legal fees and expenses incurred by such Debtor or Reorganized Debtor, as applicable, after the Effective Date in the ordinary course of business and without any further notice to or action, order or approval of the Bankruptcy Court.  With respect to fees and expenses incurred on or after the Effective Date, any requirement that Professional Persons comply with sections 327 through 331 and 1103 of the Bankruptcy Code will terminate, and each Debtor or Reorganized Debtor, as applicable, may employ and pay any Professional Person in the ordinary course of business without any further notice to or action, order, or approval of the Bankruptcy Court.

3.                          Treatment of Priority Tax Claims

Except to the extent that a holder of an Allowed Priority Tax Claim and the Debtors or Reorganized Debtors, as applicable, agree to a less favorable treatment, on the later of the Effective Date and the date on which such Priority Tax Claim becomes an Allowed Claim, or, in each case, as soon thereafter as is reasonably practicable, each holder of an Allowed Priority Tax Claim will receive, at the option of the Debtors or the Reorganized Debtors, as applicable, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for such Allowed Priority Tax Claim, (i) Cash in an amount equal to the Allowed amount of such Claim, or (ii) equal annual installment payments in Cash (x) beginning on the Effective Date or as soon thereafter as reasonably practicable, or such later date as the Claim is due in the ordinary course over a period ending not later than five (5) years after the Petition Date, together with interest at the applicable non-bankruptcy rate as of the Confirmation Date, subject to the sole option of the Reorganized Debtors to prepay the entire amount of the Allowed Priority Tax Claim and (y) in a manner not less favorable than the most favored non-priority unsecured claim provided for by

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the Plan; provided, that Allowed Priority Tax Claims that arise in the ordinary course of the Debtors’ business, as Debtors in Possession, will be paid by the Debtors or the Reorganized Debtors, as applicable, in the ordinary course of business, consistent with past practice and in accordance with the terms and subject to the conditions of any orders or agreements governing, instruments evidencing, or other documents relating to such transactions, without further actions by holders of such Priority Tax Claims or further approval by the Bankruptcy Court.

B.                        Classification of Claims and Interests

1.                          Classification in General

A Claim or Interest is placed in a particular Class for all purposes, including voting, confirmation, and distribution under the Plan and under sections 1122 and 1123(a)(1) of the Bankruptcy Code; provided, that a Claim or Interest is placed in a particular Class for the purpose of receiving distributions pursuant to the Plan only to the extent that such Claim or Interest is an Allowed Claim or Allowed Interest in that Class and such Claim or Interest has not been satisfied, released, or otherwise settled prior to the Effective Date.

2.                          Formation of Debtor Groups for Convenience Only

The Plan groups the Debtors together solely for the purpose of describing treatment under the Plan, confirmation of the Plan, and making Plan Distributions in respect of Claims against and Interests in the Debtors under the Plan.  Unless expressly set forth in the Plan or in the Plan Supplement, the Plan will not affect any Debtor’s status as a separate legal Entity, change the organizational structure of the Debtors’ business enterprise, constitute a change of control of any Debtor for any purpose, cause a merger or consolidation of any legal Entities, or cause the transfer of any Assets.  The Plan is not premised upon and will not cause the substantive consolidation of the Debtors or any non-Debtor affiliate, and, except as otherwise provided by or permitted under the Plan, all Debtors will continue to exist as separate legal Entities.

3.                          Summary of Classification of Claims and Interests

The following table designates the Classes of Claims against and Interests in the Debtors and specifies which Classes are: (i) Impaired and Unimpaired under the Plan; (ii) entitled to vote to accept or reject the Plan in accordance with section 1126 of the Bankruptcy Code, and (iii) deemed to accept or reject the Plan:

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4.                          Separate Classification of Other Secured Claims

Although all Other Secured Claims have been placed in one Class for purposes of nomenclature within the Plan, each Other Secured Claim, to the extent secured by a Lien on Collateral different from the Collateral securing another Other Secured Claim, will be treated as being in a separate sub-Class for the purposes of receiving Plan Distributions.

5.                          Elimination of Vacant Classes

Any Class that, as of the commencement of the Confirmation Hearing, does not have at least one holder of a Claim or Interest that is Allowed in an amount greater than zero for voting purposes will be considered vacant, deemed eliminated from the Plan for purposes of voting to accept or reject the Plan, and disregarded for purposes of determining whether the Plan satisfies section 1129(a)(8) of the Bankruptcy Code with respect to such Class.

6.                          Voting Classes; Presumed Acceptance by Non-Voting Classes

If a Class contains Claims eligible to vote and no holder of Claims eligible to vote in such Class votes to accept or reject the Plan, the Plan will be presumed accepted by the holders of such Claims in such Class.

7.                          Voting; Presumptions; Solicitation

(a)                                 Acceptance by Certain Impaired Classes.  Only holders of Allowed Claims in Classes 3, 4 and 5 are entitled to vote to accept or reject the Plan.  An Impaired Class of Claims will have accepted the Plan if (i) the holders of at least two-thirds (2/3) in amount of the Allowed Claims actually voting in such Class have voted to accept the Plan and (ii) the holders of more than one-half (1/2) in number of the Allowed Claims actually voting in such Class have voted to accept the Plan.  Holders of Claims in Classes 3, 4 and 5 will receive ballots containing detailed voting instructions.

(b)                                 Deemed Acceptance by Unimpaired Classes.  Holders of Claims and Interests in Classes 1, 2, and 6, and to the extent holders of Interests in Class 9 are Unimpaired by the Plan pursuant to Section 4.9 of the Plan, Class 9 are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code.  Accordingly, such holders are not entitled to vote to accept or reject the Plan.

(c)                                  Deemed Rejection by Impaired Classes.  Holders of Claims and Interests in Classes 7 and 8, and, to the extent holders of Interests in Class 9 are Impaired by the Plan pursuant to Section 4.9 of the Plan, Class 9 are conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code.  Accordingly, such holders are not entitled to vote to accept or reject the Plan.

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8.                          Cramdown

If any Class of Claims entitled to vote on the Plan does not vote to accept the Plan, the Debtors may (a) seek confirmation of the Plan under section 1129(b) of the Bankruptcy Code or (b) amend or modify the Plan in accordance with the terms hereof and the Bankruptcy Code.

9.                          No Waiver

Nothing contained in the Plan will be construed to waive a Debtor’s or other Person’s right to object on any basis to any Claim, except upon the Effective Date, with respect to settled claims.

C.                        Treatment of Claims and Interests

1.                          Class 1: Priority Non-Tax Claims

The legal, equitable, and contractual rights of the holders of Allowed Priority Non-Tax Claims are unaltered by the Plan.  Except to the extent that a holder of an Allowed Priority Non-Tax Claim and the Debtors or Reorganized Debtors, as applicable, agree to a less favorable treatment, on the later of the Effective Date and the date on which such Priority Non-Tax Claim becomes an Allowed Claim, or, in each case, as soon thereafter as is reasonably practicable, each holder of an Allowed Priority Non-Tax Claim will receive, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for such Allowed Claim, Cash in an amount equal to the Allowed amount of such Claim; provided, that Allowed Priority Non-Tax Claims that arise in the ordinary course of the Debtors’ business, will be paid by the Debtors or the Reorganized Debtors, as applicable, in the ordinary course of business, consistent with past practice and in accordance with the terms and subject to the conditions of any orders or agreements governing, instruments evidencing, or other documents establishing, such liabilities without further actions by holders of such Priority Non-Tax Claims or further approval by the Bankruptcy Court.

2.                          Class 2: Other Secured Claims

The legal, equitable, and contractual rights of the holders of Allowed Other Secured Claims are unaltered by the Plan.  Except to the extent that a holder of an Allowed Other Secured Claim and the Debtors or Reorganized Debtors, as applicable, agree to a less favorable treatment, on the later of the Effective Date and the date on which such Other Secured Claim becomes an Allowed Claim, or, in each case, as soon thereafter as is reasonably practicable, each holder of an Allowed Other Secured Claim will receive in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for such Allowed Claim, at the option of the Reorganized Debtors: (i) Cash in an amount equal to the Allowed amount of such Claim, (ii) Reinstatement or such other treatment sufficient to render such holder’s Allowed Other Secured Claim Unimpaired pursuant to section 1124 of the Bankruptcy Code, or (iii) such other recovery necessary to satisfy the provisions of section 1129(a)(9) of the Bankruptcy Code.

3.                          Class 3: Secured Lender Claims

On the Effective Date, each holder of an Allowed Revolver Claim, which Claims are deemed Allowed in the aggregate principal amount of approximately Seven Hundred Fifty-Six Million Dollars ($756,000,000), or an Allowed Term Loan Claim, which Claims are deemed Allowed in the aggregate principal amount of approximately Six Hundred Forty-Two Million Dollars ($642,000,000), will receive, in full and final satisfaction, compromise, settlement, release, and discharge of, in exchange for and on account of such Allowed Revolver Claim or Allowed Term Loan Claims, as applicable, its Pro Rata share of (i) Four Hundred Ten Million Dollars ($410,000,000) in Cash, (ii) the Take Back Debt, (iii) fifty

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percent (50%) of the New Equity Interests (subject to dilution by the Management Incentive Plan Securities), (iv) fifty percent (50%) of the Class A Litigation Trust Interests, and (v) twenty-five percent (25%) of the Class B Litigation Trust Interests.  For the avoidance of doubt, the Existing Letters of Credit will continue to remain outstanding, pursuant to and subject to the terms of the Existing L/C Escrow Agreement(s) and the New Letter of Credit Agreement; provided that and that notwithstanding entry of the Confirmation Order or the occurrence of the Effective Date, the Term Loan Agreement and the other Credit Documents (as defined therein) will continue in effect for purposes of: (i) allowing the Term Lenders to receive distributions under the Plan; (ii) allowing the Term Loan Agent to make distributions in accordance with the Plan; (iii) preserving any rights of the Term Loan Agent to payment of fees, expenses and indemnification obligations as against any money or property distributable to Term Lenders under the Term Loan Agreement and the other Credit Documents, including any rights to priority of payment; (iv) allowing the Term Loan Agent to enforce any obligations owed to it under the Plan; and (v) continuing the provisions set forth in Section 11.10 of the Term Loan Agreement (Participations in Loans and Term Loan Notes; Sales and Transfers of Loans and Term Loan Notes) in order to, among other purposes, permit the Term Loan Agent to receive, process and accept Assignment Agreements with respect to Term Loan Claims, which will (x) continue solely for the purpose of permitting the Term Loan Agent to maintain a register with respect to distributions of consideration distributed pursuant to the Existing L/C Escrow Agreement(s) and (y) on the Effective Date be in an aggregate principal amount of the Allowed aggregate principal amount of Term Loan Claims, less the value of aggregate consideration paid to the Term Lenders on the Effective Date pursuant to the Plan in such amount as directed in writing to the Term Loan Agent by the Reorganized Debtors.  The Term Loan Agent be entitled to rely, without any independent investigation, upon, and will not incur any liability for relying upon, any such direction of the Reorganized Debtors.

4.                          Class 4: Senior Notes Claims

For purposes of treatment in Class 4, on the Effective Date, each holder of an Allowed Senior Notes Claim, which Claims are deemed Allowed in the aggregate principal amount of approximately One Billion Twenty-One Million Dollars ($1,021,000,000), will receive, in full and final satisfaction, compromise, settlement, release, and discharge of, in exchange for and on account of such Allowed Senior Notes Claim, its Pro Rata share of (i) (A) One Hundred Five Million Dollars ($105,000,000) in Cash, (B) fifty percent (50%) of the New Equity Interests (subject to dilution by the Management Incentive Plan Securities), (C) fifty percent (50%) of the Class A Litigation Trust Interests, and (D) seventy-five percent (75%) of the Class B Litigation Trust Interests; (ii) payment in full of the Noteholders’ Professional Fees, provided, that the Noteholders’ Professional Fees paid to Ducera Partners LLC will be net of any and all fees and expenses paid to Ducera Partners LLC pursuant to the Application for Order Authorizing the Employment and Retention of Ducera Partners LLC as Financial Advisor to the Official Committee of Unsecured Creditors of Paragon Offshore plc, et al., Nunc Pro Tunc to January 20, 2017 (Docket No. 1192); and (iii) the reasonable and documented fees and expenses of the Senior Notes Indenture Trustee, whose fees and expenses shall not exceed Seven Hundred Thousand Dollars ($700,000).

5.                          Class 5: General Unsecured Claims

Except to the extent that a holder of an Allowed General Unsecured Claim and the Debtors or Reorganized Debtors, as applicable, agree to a less favorable treatment, on the later of the Effective Date and the date on which such General Unsecured Claim becomes an Allowed Claim, or, in each case, as soon thereafter as is reasonably practicable, each holder of an Allowed General Unsecured Claim will receive, in full and final satisfaction, compromise, settlement, release, and discharge of, in exchange for, and on account of such holder’s rights with respect to and under such Allowed General Unsecured Claim its Pro Rata share of the General Unsecured Claims Distribution, subject to Section 7.7 of the Plan.

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Retained Amount: On and after the Effective Date, the Debtors or the Reorganized Debtors, as applicable, will maintain the General Unsecured Claims Reserve in Cash.  Distributions from the General Unsecured Claims Reserve will be available for General Unsecured Claims that are not Allowed Claims as of the Effective Date but become Allowed Claims thereafter.  Any amounts remaining after payment of all Allowed General Unsecured Claims will be distributed as provided in Sections 6.16 and 7.7 of the Plan.

6.                          Class 6: Intercompany Claims

The holders of Intercompany Claims will be paid, adjusted, continued, settled, reinstated, discharged, eliminated, or otherwise managed, in each case to the extent determined to be appropriate by any Debtor or any Reorganized Debtor in their sole discretion and in accordance with the terms of the U.K. Implementation Agreement and the Subordination Agreements.

7.                          Class 7: Subordinated Claims

Subordinated Claims are subordinated to Claims in Class 5 or to the same priority as Parent Interests in Class 8, as applicable, pursuant to the Plan and section 510 of the Bankruptcy Code. The holders of Subordinated Claims will not receive or retain any property under the Plan on account of such Claims.

8.                          Class 8: Parent Interests

After giving effect to the Restructuring Transactions, all Parent Interests will be deemed valueless and will not receive any distribution under the Plan.  Parent Interests will be treated in accordance with the U.K. Administration.

9.                          Class 9: Intercompany Interests

On the Effective Date, at the option of the Reorganized Debtors and with the reasonable consent of the Creditors’ Committee, the Term Loan Agent and the Revolving Credit Facility Agent, all Allowed Intercompany Interests will either (i) remain unaffected by the Plan and continue in place following the Effective Date or (ii) be cancelled (or otherwise eliminated) and holders of such cancelled Intercompany Interests will not receive or retain any property under the Plan.

10.                   Debtors’ Rights in Respect of Unimpaired Claims

Except as otherwise provided in the Plan, nothing under the Plan will affect the rights of the Reorganized Debtors in respect of any Unimpaired Claim, including all rights in respect of legal and equitable defenses to, or setoffs or recoupments against, any such Unimpaired Claim.

11.                   Treatment of Vacant Classes

Any Claim or Interest in a Class that is considered vacant under Section 3.5 of the Plan will receive no Plan Distribution.

D.                        Means for Implementation; Post-Effective Date Governance

1.                          Settlement of Secured Lender Claims and Senior Notes Claims

Pursuant to Bankruptcy Code sections 1123(a)(5) and 1123(b)(3) and Bankruptcy Rule 9019, and in consideration for the Plan Distributions and other benefits provided under the Plan, the Plan incorporates

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and is expressly conditioned upon the approval and effectiveness of a comprehensive compromise and settlement by and among the Debtors, the Term Loan Agent, the Revolving Credit Facility Agent, the Requisite Lenders, and the Creditors’ Committee of numerous issues and disputes relating to the Adequate Protection Obligations, the Term Loan Claims, the Revolver Claims, the Senior Notes Claims, and the allowance and treatment of such Claims.  As of the Effective Date, the Plan accordingly represents a full, final, integrated, complete, and good faith compromise, settlement, release, and resolution of, among other matters, disputes and potential litigation of all claims and controversies relating to the rights that a holder of a Claim may have with respect to such Claim or any Plan Distribution on account thereof, including: (i) the amount, value, and treatment under the Plan of the Term Loan Claims, the Revolver Claims, and the Senior Notes Claims against the Debtors; (ii) the issues and disputes related to the “Applicable Premium” (as defined in the Senior Notes Indenture); (iii) the issues and disputes relating to the Adequate Protection Obligations; (iv) the validity, scope, extent, and priority of the Liens securing the Term Loan Claims and the Revolver Claims including with respect to Cash held by the Debtors; (v) the valuation of encumbered and unencumbered assets; (vi) any Causes of Action that the Debtors or the Reorganized Debtors, as applicable, could potentially assert against the holders of Term Loan Claims, the Revolver Claims, and the Senior Notes Claims; and (vii) the rights with respect to, and security interests, in the Debtors’ Intercompany Claims

The entry of the Confirmation Order will constitute the Bankruptcy Court’s approval, as of the Effective Date, of each of the compromises and settlements embodied in the Plan, and the Bankruptcy Court’s finding that all such compromises or settlements are: (i) in the best interest of the Debtors, the Estates, the Reorganized Debtors, and their respective property and stakeholders; and (ii) fair, equitable and within the range of reasonableness.  This comprehensive compromise and settlement will be binding on the Debtors or the Reorganized Debtors, as applicable, on all Persons who have asserted or could assert any potential Causes of Action, the Creditors’ Committee, the Senior Noteholders, the Term Lenders, and the Revolving Lenders concerning such claims compromised and settled under the Plan.  This comprehensive compromise and settlement is the fundamental foundation of the Plan.  As such, the approval and consummation of the Plan will conclusively bind all holders of Claims against or Interests in the Debtors and other parties in interest, and the releases and settlements effected under the Plan will be operative as of the Effective Date and subject to enforcement by the Bankruptcy Court from and after the Effective Date, including pursuant to the injunctive provisions of Sections 10.4, 10.5, and 10.8 of the Plan.

2.                          Continued Corporate Existence

(a)                     Except as otherwise provided in the Plan or pursuant to the U.K. Administration and U.K. Implementation Agreement, the Debtors will continue to exist after the Effective Date as Reorganized Debtors in accordance with the applicable laws of the respective jurisdictions in which they are incorporated or organized and pursuant to the Amended Certificates of Incorporation and the Amended By-Laws.  On or after the Effective Date, each Reorganized Debtor may, in its sole discretion, take such action as permitted by applicable law and such Reorganized Debtor’s organizational documents as such Reorganized Debtor may determine is reasonable and appropriate, including causing: (i) a Reorganized Debtor to be merged into another Reorganized Debtor or an affiliate of a Reorganized Debtor; (ii) a Reorganized Debtor to be liquidated and dissolved; (iii) the legal name of a Reorganized Debtor to be changed; or (iv) the closure of a Reorganized Debtor’s Chapter 11 Case on the Effective Date or any time thereafter.

(b)                     On the Effective Date or as soon thereafter as is reasonably practicable, the Reorganized Debtors may take all actions as may be necessary or appropriate to effect any transaction described in, approved by, or necessary or appropriate to effectuate the Plan, including: (i) the execution

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and delivery of appropriate agreements or other documents of merger, consolidation, restructuring, conversion, disposition, transfer, dissolution, or liquidation containing terms that are consistent with the terms of the Plan and the Plan Documents and that satisfy the requirements of applicable law and any other terms to which the applicable Entities may agree; (ii) the execution and delivery of appropriate instruments of transfer, assignment, assumption, or delegation of any asset, property, right, liability, debt, or obligation on terms consistent with the terms of the Plan and having other terms to which the applicable parties agree; (iii) the filing of appropriate certificates of incorporation and memoranda and articles of association and amendments thereto, reincorporation, merger, consolidation, conversion, or dissolution pursuant to applicable law; (iv) the Restructuring Transactions; and (v) all other actions that the applicable Entities determine to be necessary or appropriate, including making filings or recordings that may be required by applicable law.

3.                          Authorization, Issuance, and Delivery of New Equity Interests

On the Effective Date, Paragon Parent is authorized to distribute and Reorganized Paragon is authorized to issue or cause to be issued and will issue or cause to be issued the New Equity Interests, for distribution in accordance with the terms of the Plan, without the need for any further corporate, partnership, limited liability company, or shareholder action.  Upon the Effective Date, after giving effect to the U.K. Sale Transaction, the authorized capital stock of Reorganized Paragon will be that number of shares of New Equity Interests as may be designated in the Amended Certificate of Incorporation of Reorganized Paragon, and the New Equity Interests will be subject to the terms contained in the Amended Certificate of Incorporation of Reorganized Paragon, the Shareholders Agreement, and the Registration Rights Agreement.  The New Equity Interests will not be stapled with the Take Back Debt; New Equity Interests may be sold, assigned, transferred, hypothecated, or otherwise disposed of without any principal amount of Take Back Debt; and Take Back Debt may be sold, assigned, transferred, hypothecated, or otherwise disposed of without any number of New Equity Interests, in each case, subject to any transfer restrictions thereon.

4.                          Take Back Debt Agreement, New Letter of Credit Agreement, and Existing L/C Escrow Agreement(s)

(a)                                 On the Effective Date, the Reorganized Debtors are authorized to execute, deliver, and enter into or cause to be executed, delivered, and entered into, and will execute, deliver, and enter into or cause to be executed, delivered, and entered into, all plan-related documents, including the Take Back Debt Agreement, the New Letter of Credit Agreement, the Existing L/C Escrow Agreement(s) and any related documents, agreements, instruments, or certificates, without the need for any further corporate, partnership, limited liability company, or shareholder action.  The Take Back Debt Agreement, the New Letter of Credit Agreement, and the Existing L/C Escrow Agreement(s) will constitute legal, valid, and binding obligations of Reorganized Paragon enforceable in accordance with their terms.

(b)                                 On the Effective Date, (i) upon the granting of Liens and the continuation of existing Liens in accordance with the Take Back Debt Agreement, the lenders thereunder will have valid, binding, and enforceable Liens on the collateral specified in the Take Back Debt Agreement and related guarantee and collateral documentation; and (ii) upon the granting of guarantees, mortgages, pledges, Liens, and other security interests and the continuation of existing guarantees, mortgages, pledges, Liens, and other security interests in accordance with the Take Back Debt Agreement, the guarantees, mortgages, pledges, Liens, and other security interests granted and continued to secure the obligations arising under the Take Back Debt Agreement will be granted and continued in good faith as an inducement to the lenders thereunder to convert to term loans and/or extend credit thereunder and will be deemed not to constitute a fraudulent conveyance or fraudulent transfer, will not otherwise be subject to avoidance, and the priorities of such Liens and security interests will be as set forth in the Take Back Debt

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Agreement and related guarantee, collateral documentation, and intercreditor arrangements.  All Liens and security interests securing the Revolver Claims (other than with respect to the Existing Letters of Credit) and the Term Loan Claims, as such Liens and security interests relate to assets of Reorganized Debtors (other than, for the avoidance of doubt, Liens against and security interests in the assets of the Liquidating Subsidiaries and Paragon Parent, which will be fully released and discharged as of the Effective Date), as of the Petition Date are unaltered by the Plan, and all such Liens and security interests are created and perfected with respect to the obligations arising under the Take Back Debt Agreement to the same extent, in the same manner and on the same terms as they were with respect to the Revolver Claims (other than with respect to the Existing Letters of Credit) and Term Loan Claims (other than with respect to such Liens and security interests in the assets of the Liquidating Debtors and Paragon Parent).  The Take Back Debt Agreement and the other Credit Documents (as such term is defined in the Take Back Debt Agreement) will constitute legal, valid, and binding obligations of the Reorganized Debtors party thereto or otherwise bound thereby, enforceable in accordance with their terms.

(c)                                  On the Effective Date, the Existing Letters of Credit will be deemed issued under the New Letter of Credit Agreement; on and after the Effective Date, the Revolving Lenders will continue to hold participations in the Existing Letters of Credit in accordance with their existing percentages as of immediately prior to the Effective Date.  On and after the Effective Date, (i) Reorganized Paragon will not have any ongoing draw reimbursement obligations on account of the Existing Letters of Credit, other than such reimbursement obligations as are set forth in the Plan and such letter of credit fees calculated based on percentages in effect under the Revolving Credit Agreement immediately prior to the Effective Date (which obligations will also be reflected in the New Letter of Credit Agreement), and (ii) the Reorganized Debtors will use commercially reasonable efforts to cause the Existing Letters of Credit to be returned undrawn.

On the Effective Date, the Existing L/C Escrow Agreement(s) will be executed in accordance with the terms set forth therein.

5.                          Cancellation of Certain Existing Agreements

Except for the purpose of evidencing a right to a Plan Distribution, the 6.75% Notes, the 7.25% Notes, and the Senior Notes Indenture will be deemed cancelled on the Effective Date and obligations of the Debtors thereunder will be discharged.  The Senior Notes Indenture Trustee will be released from all duties under the Senior Notes Indenture; provided, however, that notwithstanding confirmation of the Plan or the occurrence of the Effective Date, the Senior Notes Indenture will continue in effect for the purposes of permitting the Senior Notes Indenture Trustee to (a) make distributions under the Plan as provided in the Plan and perform such other necessary functions with respect thereto, (b) seek compensation and/or reimbursement of fees and expenses in accordance with the terms of the Plan, and (c) maintain and assert any rights or exercise any charging liens for reasonable fees, costs, and expenses thereunder, including, without limitation, the right to seek indemnification.

6.                          Release of Liens

Except as otherwise provided in the Plan or in any contract, instrument, release or other agreement or document entered into or delivered in connection with the Plan, upon the full payment or other satisfaction with respect to the applicable Claims made pursuant to the Plan, all Liens, Claims, or Interests in or against the property of the Estates will be fully released, terminated, extinguished, and discharged, including with respect to Liens against and security interests in the assets of the Liquidating Subsidiaries and Paragon Parent, in each case without further notice to or order of the Bankruptcy Court, act or action under applicable law, regulation, order, or rule or the vote, consent, authorization, or approval of any

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Entity.  Any Entity holding such Liens, Claims, or Interests will, if necessary, pursuant to section 1142 of the Bankruptcy Code, promptly execute and deliver to the Reorganized Debtors such instruments of termination, release, satisfaction, and/or assignment (in recordable form) as may be reasonably requested by the Reorganized Debtors and will incur no liability to any Entity in connection with its execution and delivery of any such instruments.

7.                          Preservation of Rights of Action; Resulting Claim Treatment

(a)                                 Except for the Noble Claims and as otherwise provided in the Plan, the Confirmation Order, or the Plan Supplement, and in accordance with Section 1123(b) of the Bankruptcy Code, on the Effective Date, each Debtor or Reorganized Debtor will retain all of its Litigation Rights that such Debtor or Reorganized Debtor may hold against any Person. Each Debtor or Reorganized Debtor will retain and may enforce, sue on, settle, or compromise (or decline to do any of the foregoing) all such Litigation Rights.

(b)                                 On the Effective Date, the Debtors and the Estates will preserve and transfer to the Litigation Trust the Noble Claims, with good, clean title to such property, free and clear of all liens, charges, Claims, encumbrances and interests, to be pursued, pursuant to the Litigation Trust Agreement, by the Litigation Trust Management for the benefit of holders of the Litigation Trust Interests.  The Litigation Trust will be established for the sole purpose of prosecuting the Noble Claims and distributing the proceeds thereof in accordance with the Plan and the Litigation Trust Agreement, with no objective to continue or engage in the conduct of a trade or business.

(c)                                  The Litigation Trust will be administered by the Litigation Trust Management and overseen by the Litigation Trust Committee, all of whom will be identified prior to the conclusion of the Confirmation Hearing.

(d)                                 Upon creation of the Litigation Trust, holders of Allowed Revolver Claims, Allowed Term Loan Claims, and Allowed Senior Notes Claims will become the beneficiaries of the Litigation Trust as their respective interests may appear in accordance with the terms of the Plan.  The Litigation Trust Management may, pursuant to the Litigation Trust Agreement, make interim distributions to beneficiaries of the Litigation Trust in the exercise of its reasonable business judgment. Upon the settlement, conclusion of litigation and collection of all of the claims in the Litigation Trust, after the payment of all costs and expenses of collection, the Litigation Trust Management must distribute the corpus of the Litigation Trust Pro Rata to the beneficiaries of the Litigation Trust in accordance with their holdings of Litigation Trust Interests.

(e)                                  The Litigation Trust Management appointed pursuant to the Litigation Trust Agreement will, subject to the terms of the Litigation Trust Agreement and the Litigation Trust Committee, have full power, authority, and standing to prosecute, compromise, or otherwise resolve the Noble Claims. The Reorganized Debtors will not be subject to any counterclaims with respect to the Noble Claims.

(f)                                   As soon as practicable after the Effective Date, Reorganized Paragon and/or certain of the Transferred Subsidiaries will enter into the Litigation Trust Loan in the maximum amount of $10 million to pay certain of the expenses of the Litigation Trust Management and its professionals for administering the Litigation Trust and prosecuting the Noble Claims in the Litigation Trust in accordance with the Plan. The Litigation Trust Management may be able to supplement this initial funding through settlement payments and the collection of judgments, by borrowing funds to finance litigation, or by retaining contingent fee counsel.

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(g)                                  For avoidance of doubt, the Litigation Trust is a party in interest with respect to all objections to any Claim filed by any Noble Entity or Non-Released Party and all compromises of such claim objections.

(h)                                 For the avoidance of doubt, the Debtors, all holders of Litigation Trust Interests, the Litigation Trust Management, and the Litigation Trust Committee will be bound by the terms of the Litigation Trust Agreement.

8.                          Officers and Boards of Directors

(a)                                 The officers and the composition of each board of directors of the Reorganized Debtors, including the New Board, will be disclosed prior to the entry of the Confirmation Order to the extent required by section 1129(a)(5) of the Bankruptcy Code.

(b)                                 Except to the extent that a member of the board of directors of a Debtor continues to serve as a director of such Debtor on the Effective Date, the members of the board of directors of each Debtor prior to the Effective Date, in their capacities as such, will have no continuing obligations to the Reorganized Debtors on or after the Effective Date and each such member will be deemed to have resigned or will otherwise cease to be a director of the applicable Debtor on the Effective Date without any further action required on the part of any such Debtor or member.  Commencing on the Effective Date, each of the directors of each of the Reorganized Debtors will serve pursuant to the terms of the applicable organizational documents of such Reorganized Debtor and may be replaced or removed in accordance with such organizational documents.

(c)                                  Subject to the discretion of the New Board, the Reorganized Debtors will enter into new employment agreements with key executives on a case by case basis.

9.                          Deemed Execution

On the Effective Date, (i) each Person that receives any portion of the New Equity Interests will be deemed to have executed, without any further action by any party, the Shareholders Agreement,  (ii) each Person that upon receipt of any portion of the New Equity Interests pursuant to the Plan holds ten percent (10%) or more of the total outstanding New Equity Interests as of the Effective Date will be deemed to have executed, without any further action by any party, the Registration Rights Agreement, (iii) each Person that receives any portion of the Take Back Debt will be deemed to have executed, without any further action by any party, the Take Back Debt Agreement, and (iv) each Person that is party to the New Letter of Credit Agreement will be deemed to have executed, without any further action by any party, the Existing L/C Escrow Agreement(s).

10.                   Management Incentive Plan

After the Effective Date, the New Board will implement the Management Incentive Plan, the terms of which, including eligibility to participate therein, the amount and timing of any award and the vesting conditions of any award will be determined by the New Board in its sole discretion.  Confirmation of the Plan will not constitute the Bankruptcy Court’s approval or endorsement of any terms that the New Board may determine.  Any Management Incentive Plan Securities issued pursuant to the Management Incentive Plan will proportionally dilute all the New Equity Interests to be issued in accordance with the Plan.

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11.                   Intercompany Interests

To the extent an Intercompany Interest is not cancelled pursuant to the Plan, on the Effective Date and without the need for any further corporate action or approval of any board of directors, management, or shareholders of any Debtor or Reorganized Debtor, as applicable, such Intercompany Interest will be unaffected by the Plan and continue in place following the Effective Date.

12.                   Restructuring Transactions

On the Effective Date or as soon as reasonably practicable thereafter, the Debtors or Reorganized Debtors, as applicable, may take all actions as may be necessary or appropriate to effect any transaction described in, approved by, contemplated by, or necessary to effectuate the Restructuring Transactions under and in connection with the Plan.

13.                   U.K. Administrators, U.K. Administration, and U.K. Sale Transaction

(a)                     Prior to the Effective Date, the directors of Paragon Parent will seek an administration order from the English Court pursuant to paragraph 13 of Schedule B1 of the Insolvency Act 1986 to appoint the U.K. Administrators to, among other things, implement the U.K. Sale Transaction pursuant to the U.K. Implementation Agreement.  Upon appointment, the U.K. Administrators will assume all powers necessary or expedient to effectuate the reorganization contemplated in the U.K. Implementation Agreement (including the power to effect the U.K. Sale Transaction in relation to Paragon Parent).

(b)                     U.K. Sale Transaction.  Prior to or substantially contemporaneously with the Effective Date, following completion of the Corporate Restructuring and pursuant to the terms of the U.K. Implementation Agreement and the Plan, Paragon Parent will distribute the New Equity Interests to holders of Allowed Secured Lender Claims and Allowed Senior Notes Claims, will distribute Cash to the holders of certain Allowed Claims, and will make any other distribution or transfer contemplated by the Plan on behalf of Paragon Parent as described in Article IV of the Plan in consideration for the release in full of such Allowed Claim.  Reorganized Paragon will enter into the Take Back Debt Agreement, among other documents, with the holders of Allowed Revolver Claims and Allowed Term Loan Claims, as applicable.  In furtherance of the foregoing and the implementation of the Plan, the following transactions will occur in the following order on or prior to the Effective Date (as indicated below).

(i)                                     Prior to the Effective Date, Reorganized Paragon will be formed and will enter into the U.K. Implementation Agreement with, among others, Paragon Parent, certain of the Debtors and certain non-Debtor affiliates of the Debtors.  On or prior to the Effective Date and immediately upon completion of the transactions specified below, the Amended By-Laws and Amended Certificate of Incorporation governing Reorganized Paragon will be in full force and effect.

(ii)                                  Prior to the Effective Date, certain Debtors and non-Debtor affiliates of the Debtors (including Reorganized Paragon) will take such actions as are necessary to implement the Corporate Restructuring in accordance with the terms of the Plan and the U.K. Implementation Agreement.  For the avoidance of doubt, all Cash held by Paragon Parent immediately prior to the Corporate Restructuring, other than Cash required to be retained in Paragon Parent as the U.K. Administration Reserve, will be available for distribution in accordance with the Plan.

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(iii)                               In accordance with, and subject to the terms of, the treatment sections of the Plan, the following transactions will occur prior to or substantially contemporaneously with the Effective Date:

(a)                                 Certain rights and obligations of the Liquidating Subsidiaries and the Transferred Subsidiaries arising under or in connection with the Intercompany Claims will be assigned to and/or assumed by an alternative Liquidating Subsidiary or Transferred Subsidiary (as applicable) pursuant to the terms of the Plan and the U.K. Implementation Agreement.

(b)                                 In consideration for the release in full of certain Allowed Claims and pursuant to the terms of the Plan and the U.K. Implementation Agreement, Paragon Parent will: (i) distribute the New Equity Interests to holders of Allowed Secured Lender Claims and Allowed Senior Notes Claims; (ii) distribute Cash to holders of such Allowed Claims, and (iii) make any other distribution or transfer contemplated by the Plan on behalf of Paragon Parent, and Reorganized Paragon will enter into the Take Back Debt Agreement, among other documents, with the holders of Allowed Revolver Claims and Allowed Term Loan Claims, as applicable.

(c)                                  On the Effective Date, the New Board will be appointed to serve pursuant to the terms of the applicable new organizational documents of Reorganized Paragon.

(d)                                 In connection with the U.K. Sale Transaction, Paragon Parent will assume and assign to Reorganized Paragon all of its executory contracts and unexpired leases to which it is party that are not specifically designated on the Schedule of Rejected Contracts and Leases.  Paragon Parent’s assumption and assignment of such executory contracts and unexpired leases will be consistent with the procedures set forth in the Plan, and any requirements to obtain consent in connection with such assumption and assignment will be deemed satisfied by Paragon Parent’s compliance with the procedures outlined in the Plan.

(c)                      Dissolution of Liquidating Subsidiaries.  Following the Effective Date, each Liquidating Subsidiary will be liquidated and dissolved in accordance with the applicable laws of the respective jurisdictions in which they are incorporated or organized (the “Liquidating Subsidiary Wind-Down”).  The U.K. Administrators will co-ordinate the Liquidating Subsidiary Wind-Down in accordance with their duties to the creditors of Paragon Parent under English law.  If the liquidation or winding down of Paragon Parent results in the realization of any residual proceeds available for distribution to creditors of Paragon Parent then such residual proceeds will be distributed to Reorganized Paragon and/or certain Transferred Subsidiaries pursuant to the terms of the U.K. Implementation Agreement.

(d)                     Approval of Corporate Restructuring, U.K. Sale Transaction and Liquidating Subsidiary Wind-Down.  The Confirmation Order will authorize the Corporate Restructuring, the U.K. Sale Transaction and the Liquidating Subsidiary Wind-Down pursuant to sections 363, 1123(a)(5), 1123(b)(4), 1123(b)(6), 1145, and 1146(a) of the Bankruptcy Code under the terms and conditions of the U.K. Implementation Agreement.  Upon the Confirmation Date, the Debtors will be authorized to take any and all actions necessary to consummate the Corporate Restructuring, the U.K. Sale Transaction and the Liquidating Subsidiary Wind-Down, including, for the avoidance of doubt, commencing the U.K. Administration (to the extent not commenced prior to the Confirmation Date).

(e)                      Sale Free and Clear.  On the closing date of the Corporate Restructuring, pursuant to the terms of the U.K. Implementation Agreement and the Confirmation Order, certain Assets will be purchased by and vested in Reorganized Paragon free and clear of all Claims, Parent Interests, Liens, charges, encumbrances, and other interests, other than the liabilities expressly assumed pursuant to

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the U.K. Implementation Agreement and those Claims, Liens, charges, encumbrances, and other interests expressly provided or assumed pursuant to the Plan or the documents included in the Plan Supplement.

14.                   Retained Accounts

On or prior to, and after, the Effective Date, the Debtors or Reorganized Debtors, as applicable, may take all actions as may be necessary or appropriate to maintain and/or establish the Retained Accounts.

15.                   Separability

Notwithstanding the combination of separate plans of reorganization for the Debtors set forth in the Plan for purposes of economy and efficiency, the Plan constitutes a separate chapter 11 plan for each Debtor.  Given the integrated nature of the settlement embodied in the Plan, if the Bankruptcy Court does not confirm the Plan with respect to one or more Debtors or Paragon Parent, the Plan may not be confirmed absent the reasonable consent of the Creditors’ Committee and Requisite Lenders with respect to any other Debtor that satisfies the confirmation requirements of section 1129 of the Bankruptcy Code.

16.                   Other Settlements of Claims and Controversies

(a)                     Pursuant to section 1123(b)(3)(A) of the Bankruptcy Code and Bankruptcy Rule 9019, and in consideration for the Plan Distributions and other benefits provided under the Plan, the provisions of the Plan will constitute a good faith compromise and settlement of all Claims and controversies relating to the rights that a holder of a Claim or Interest may have with respect to any Allowed Claim or Allowed Interest or any Plan Distribution on account thereof.  The entry of the Confirmation Order will constitute the Bankruptcy Court’s approval, as of the Effective Date, of the compromise or settlement of all such claims or controversies and the Bankruptcy Court’s finding that all such compromises or settlements are: (i) in the best interest of the Debtors, the Estates, the Reorganized Debtors, and their respective property and stakeholders, and (ii) fair, equitable, and reasonable.

17.                   Restructuring Expenses

(a)                     On the Effective Date, or as soon as reasonably practicable thereafter, the Debtors or the Reorganized Debtors, as applicable, will pay in full, without interest or other earnings therefrom, (i) all outstanding Restructuring Expenses billed through the Effective Date, in accordance with the terms of the applicable orders, engagement letters, or other applicable contractual arrangements, but without regard to any notice and objection period as may be contained in such applicable orders, engagement letters, or other applicable arrangements; (ii) the Noteholders’ Professional Fees, provided, that the Noteholders’ Professional Fees paid to Ducera Partners LLC will be net of any and all fees paid to Ducera Partners LLC pursuant to the Application for Order Authorizing the Employment and Retention of Ducera Partners LLC as Financial Advisor to the Official Committee of Unsecured Creditors of Paragon Offshore plc, et al., Nunc Pro Tunc to January 20, 2017 (Docket No. 1192); and (iii) the reasonable and documented fees and expenses of the Senior Notes Indenture Trustee, whose fees and expenses shall not exceed Seven Hundred Thousand Dollars ($700,000).  To receive payment for unbilled fees and expenses incurred through the Effective Date, all Revolving Lenders’ Professionals and Term Lenders’ Professionals will estimate their accrued Restructuring Expenses prior to and as of the Effective Date and will deliver such estimates to the Debtors at least five days before the Effective Date; provided, that such estimate will not be considered an admission or limitation with respect to the fees and expenses of such Revolving Lenders’ Professional or Term Lenders’ Professional.  On the Effective Date, all Revolving Lenders’ Professionals and Term Lenders’ Professionals will submit final bills for all Restructuring Expenses incurred prior to and as of the Effective Date.  On the Effective Date, the Reorganized Debtors will pay the Restructuring Expenses of the Term Lenders’ Professionals and the Revolving Lenders’ Professionals incurred prior to

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and as of the Effective Date, and such payments will be made in Cash without any further notice to or action, order, or approval of the Bankruptcy Court.

E.                        Distributions

1.                          Distributions Generally

The Disbursing Agent will make all Plan Distributions to the appropriate holders of Allowed Claims in accordance with the terms of the Plan; provided, that the Debtors or Reorganized Debtors, as applicable, will disburse the New Equity Interests to the holders of Allowed Secured Lender Claims and Allowed Senior Notes Claims.

2.                          Plan Funding

Plan Distributions of Cash will be funded from the Debtors’ and the Reorganized Debtors’ Cash and the unrestricted Cash of non-Debtor affiliates.

3.                          No Postpetition Interest on Claims

Except as otherwise specifically provided for in the Plan, including in Sections 4.2 and 4.3 of the Plan, the Confirmation Order, or another order of the Bankruptcy Court or required by the Bankruptcy Code, postpetition interest will not accrue or be paid on any Claims, and no holder of a Claim will be entitled to interest accruing on such Claim on or after the Petition Date.

4.                          Date of Distributions

Unless otherwise provided in the Plan, on the Effective Date or as soon as reasonably practicable thereafter (or, if a Claim is not an Allowed Claim on the Effective Date, on the date that such Claim becomes Allowed or as soon as reasonably practicable thereafter), each holder of an Allowed Claim will receive the full amount of the distributions that the Plan provides for such Allowed Claims in their applicable Class.  In the event that any payment or act under the Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on the next succeeding Business Day, but will be deemed to have been completed as of the required date.  If and to the extent there are any residual funds remaining in the Retained Accounts, final distributions from the Retained Accounts of such residual amounts will be made in accordance with Section 6.16 of the Plan.  If and to the extent that there are Disputed Claims, distributions on account of any such Disputed Claims will be made pursuant to the provisions set forth in Article VII of the Plan.  Except as otherwise provided in the Plan or the documents included in the Plan Supplement, holders of Claims will not be entitled to interest, dividends, or accruals on any Plan Distributions.

5.                          Distribution Record Date

As of the close of business on the Distribution Record Date, the various lists of holders of Claims in each Class, as maintained by the Debtors or their agents, will be deemed closed, and there will be no further changes in the record holders of any Claims after the Distribution Record Date.  Neither the Debtors, the Reorganized Debtors, nor the Disbursing Agent will have any obligation to recognize any transfer of a Claim occurring after the close of business on the Distribution Record Date.  In addition, with respect to payment of any Cure Amounts or disputes over any Cure Amounts, neither the Debtors, the Reorganized Debtors, nor the Disbursing Agent will have any obligation to recognize or deal with any party other than the non-Debtor party to the applicable executory contract or unexpired lease, even if such non-Debtor party has sold, assigned, or otherwise transferred its Claim for a Cure Amount.

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6.                          Disbursing Agent

All distributions under the Plan will be made by the Disbursing Agent on and after the Effective Date as provided in the Plan.  The Disbursing Agent will not be required to give any bond or surety or other security for the performance of its duties.  The Reorganized Debtors will use all commercially reasonable efforts to provide the Disbursing Agent (if other than the Reorganized Debtors) with the amounts of Claims and the identities and addresses of holders of Claims, in each case, as set forth in the Debtors’ or Reorganized Debtors’ books and records.  The Reorganized Debtors will cooperate in good faith with the applicable Disbursing Agent (if other than the Reorganized Debtors) to comply with the reporting and withholding requirements outlined in Section 6.18 of the Plan.

7.                          Delivery of Distributions

The Disbursing Agent will issue or cause to be issued, the applicable consideration under the Plan and, subject to Bankruptcy Rule 9010, will make all distributions to any holder of an Allowed Claim as and when required by the Plan at: (i) the address of such holder on the books and records of the Debtors or their agents or (ii) at the address in any written notice of address change delivered to the Debtors or the Disbursing Agent, including any addresses included on any transfers of Claim filed pursuant to Bankruptcy Rule 3001.  In the event that any distribution to any holder is returned as undeliverable, no distribution or payment to such holder will be made unless and until the Disbursing Agent has been notified of the then-current address of such holder, at which time or as soon thereafter as reasonably practicable such distribution will be made to such holder without interest.

With respect to the New Equity Interests to be distributed to holders of Allowed Secured Lender Claims and Allowed Senior Notes Claims, all of the shares of the New Equity Interests will, to the extent such shares are permitted to be issued through DTC’s book-entry system, be issued in the name of such holder or its nominee(s) in accordance with DTC’s book-entry exchange procedures.  No distributions will be made other than through DTC if the New Equity Interests are permitted to be held through DTC’s book entry system.  Any distribution that otherwise would be made to any holder eligible to receive a distribution who does not own or hold an account eligible to receive a distribution through DTC on a relevant distribution date will be forfeited.  To the extent none of the New Equity Interests are eligible for issuance through DTC’s book-entry system, the Reorganized Debtors will take all such reasonable actions as may be required to cause distributions of the New Equity Interests under the Plan.

8.                          Unclaimed Property

One year from the later of: (a) the Effective Date and (b) the date that is ten (10) Business Days after the date a Claim is first Allowed, all distributions payable on account of such Claim that are not deliverable and remain unclaimed will be deemed unclaimed property under section 347(b) of the Bankruptcy Code and will revert to the Reorganized Debtors or their successors or assigns, and all claims of any other Entity (including the holder of a Claim in the same Class) to such distribution will be discharged and forever barred.  The Reorganized Debtors and the Disbursing Agent will have no obligation to attempt to locate any holder of an Allowed Claim other than by reviewing the Debtors’ books and records and filings with the Bankruptcy Court.

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9.                          Satisfaction of Claims

Unless otherwise provided in the Plan, any distributions and deliveries to be made on account of Allowed Claims under the Plan will be in complete and final satisfaction, settlement, and discharge of and exchange for such Allowed Claims.

10.                   Manner of Payment Under Plan

Except as specifically provided in the Plan, at the option of the Debtors or the Reorganized Debtors, as applicable, any Cash payment to be made under the Plan may be made by a check or wire transfer or as otherwise required or provided in applicable agreements or customary practices of the Debtors.

11.                   Fractional Shares and De Minimis Cash Distributions

No fractional New Equity Interests will be distributed.  When any distribution would otherwise result in the issuance of a number of New Equity Interests that is not a whole number, the New Equity Interests subject to such distribution will be rounded to the next higher or lower whole number as follows: (a) fractions equal to or greater than 1/2 will be rounded to the next higher whole number and (b) fractions less than 1/2 will be rounded to the next lower whole number.  The total number of New Equity Interests to be distributed on account of Allowed Secured Lender Claims and Allowed Senior Notes Claims will be adjusted as necessary to account for the rounding provided for in the Plan.  No consideration will be provided in lieu of fractional shares that are rounded down.  Neither the Reorganized Debtors nor the Disbursing Agent will have any obligation to make a distribution that is less than one (1) share of New Equity Interests or Fifty Dollars ($50.00) in Cash.  Fractional New Equity Interests that are not distributed in accordance with this section will be returned to, and ownership thereof will vest in, Reorganized Paragon.

12.                   No Distribution in Excess of Amount of Allowed Claim

Notwithstanding anything to the contrary in the Plan, no holder of an Allowed Claim will receive, on account of such Allowed Claim, Plan Distributions in excess of the Allowed amount of such Claim plus any postpetition interest on such Claim, to the extent such interest is permitted by Section 6.3 of the Plan.

13.                   Allocation of Distributions Between Principal and Interest

Except as otherwise provided in the Plan and subject to Section 6.3 of the Plan, to the extent that any Allowed Claim entitled to a distribution under the Plan is comprised of indebtedness and accrued but unpaid interest thereon, such distribution will be allocated first to the principal amount of the Claim (as determined for U.S. federal income tax purposes) and then, to the extent of any excess, to the remainder of the Claim, including any Claim for accrued but unpaid interest.

14.                   Exemption from Securities Laws

The issuance of and the distribution under the Plan of the New Equity Interests will be exempt from registration under the Securities Act and any other applicable securities laws to the fullest extent permitted by section 1145 of the Bankruptcy Code.  These securities may be resold without registration under the Securities Act or other federal securities laws pursuant to the exemption provided by section 4(a)(1) of the Securities Act, unless the holder is an “underwriter” with respect to such securities, as that term is defined in section 1145(b) of the Bankruptcy Code.  In addition, such section 1145 exempt securities generally may be resold without registration under state securities laws pursuant to various exemptions provided by the respective laws of the several states.

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15.                   Setoffs and Recoupments

Each Debtor or Reorganized Debtor, as applicable, or such Entity’s designee, as instructed by such Reorganized Debtor, may, pursuant to section 553 of the Bankruptcy Code or applicable nonbankruptcy law, offset or recoup against any Allowed Claim and the distributions to be made pursuant to the Plan on account of such Allowed Claim any and all Claims, rights, and Causes of Action that such Debtor or Reorganized Debtor or its successors may hold against the holder of such Allowed Claim; provided, that neither the failure to effect a setoff or recoupment nor the allowance of any Claim under the Plan will constitute a waiver or release by a Debtor or Reorganized Debtor or its successor of any Claims, rights, or Causes of Action that a Reorganized Debtor or its successor or assign may possess against such holder.

16.                   Release of Retained Funds

(a)                                 Any Cash remaining in the Fee Claim Escrow Account, after all applicable distributions or other payments have been made from such Retained Account will be released therefrom by the Disbursing Agent and revert to the Reorganized Debtors or their successors or assigns at such dates as may be determined by the Disbursing Agent, but in no event later than the date that is sixty (60) days after all applicable distributions or other payments have been made from such Retained Account.

(b)                                 Any Cash remaining in the General Unsecured Claims Reserve after all Disputed General Unsecured Claims have been adjudicated will be released therefrom by the Disbursing Agent and revert to the Reorganized Debtors or their successors or assigns at such dates as may be determined by the Disbursing Agent, but in no event later than the date that is sixty (60) days after the date the last Disputed General Unsecured Claim is adjudicated.

(c)                                  Any Cash remaining in the U.K. Administration Reserve or held on account of the indemnification obligations owing under the U.K. Indemnification Agreement after all applicable distributions or other payments have been made from such Retained Account will be released as provided in the U.K. Implementation Agreement.

17.                   Rights and Powers of Disbursing Agent

(a)                     Powers of Disbursing Agent.  The Disbursing Agent will be empowered to: (i) effect all actions and execute all agreements, instruments, and other documents necessary to perform its duties under the Plan; (ii) make all applicable distributions or payments provided for under the Plan; (iii) employ professionals to represent it with respect to its responsibilities; and (iv) exercise such other powers (A) as may be vested in the Disbursing Agent by order of the Bankruptcy Court (including any order issued after the Effective Date) or pursuant to the Plan or (B) as deemed by the Disbursing Agent to be necessary and proper to implement the provisions of the Plan.

(b)                     Expenses Incurred on or After the Effective Date.  To the extent the Disbursing Agent is an Entity other than a Debtor or Reorganized Debtor, except as otherwise ordered by the Bankruptcy Court and subject to the written agreement of the Reorganized Debtors, the amount of any reasonable fees and expenses incurred by the Disbursing Agent on or after the Effective Date (including taxes) and any reasonable compensation and expense reimbursement Claims (including for reasonable attorneys’ and other professional fees and expenses) made by the Disbursing Agent will be paid in Cash by the Reorganized Debtors.

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18.                   Withholding and Reporting Requirements

In connection with the Plan and all instruments issued in connection therewith and distributed thereon, the Reorganized Debtors and the Disbursing Agent will comply with all applicable withholding and reporting requirements imposed by any federal, state, local, or foreign taxing authority, and all distributions under the Plan will be subject to any such withholding or reporting requirements.  In the case of a non-Cash distribution that is subject to withholding, the distributing party may withhold an appropriate portion of such distributed property and sell such withheld property to generate Cash necessary to pay over the withholding tax. Any amounts withheld pursuant to the preceding sentence will be deemed to have been distributed to and received by the applicable recipient for all purposes of the Plan.

Notwithstanding the above, each holder of an Allowed Claim that is to receive a distribution under the Plan will have the sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed on such holder by any Governmental Unit, including income, withholding, and other tax obligations, on account of such distribution.

The Reorganized Debtors and the Disbursing Agent may require, as a condition to receipt of a distribution, that the holder of an Allowed Claim provide any information reasonably necessary to allow the distributing party to comply with any such withholding and reporting requirements imposed by any federal, state, local, or foreign taxing authority (including, for the avoidance of doubt, an appropriate Form W-9 or (if the holder is a foreign Person) Form W-8, unless such Person is exempt from information reporting requirements under the Internal Revenue Code of 1986, as amended, and so notifies the Reorganized Debtors and the Disbursing Agent).

F.                         Procedures for Resolving Claims

1.                          Disputed Claims Generally

Except insofar as a Claim is Allowed under the Plan, the Debtors or the Reorganized Debtors, as applicable, will have and retain any and all rights and defenses such Debtor has with respect to any Disputed Claim, including the Causes of Action retained pursuant to Section 10.10 of the Plan.  Any objections to Claims will be served and filed on or before: (a) the one hundred twentieth (120th) day following the later of (i) the Effective Date and (ii) the date that a proof of Claim is filed or amended or a Claim is otherwise asserted or amended in writing by or on behalf of a holder of such Claim; or (b) such later date as may be fixed by the Bankruptcy Court.  All Disputed Claims not objected to by the end of such one hundred twenty (120) day period will be deemed Allowed unless such period is extended upon approval of the Bankruptcy Court.

2.                          Resolution of Disputed Claims

(a)                     On and after the Effective Date, the Reorganized Debtors will have the authority to (i) litigate, compromise, settle, otherwise resolve, or withdraw any objections to all Claims against the Debtors and to compromise and settle any such Disputed Claims without any further notice to or action, order, or approval by the Bankruptcy Court or any other party and (ii) administer and adjust the Claims Register to reflect any such settlements or compromises without any further action, order, notice to, or approval by the Bankruptcy Court or any other party.

(b)                     Expungement of, or Adjustment to, Paid, Satisfied, or Superseded Claims.  Any Claim that has been paid, satisfied, or superseded, or any Claim that has been amended or superseded, may be adjusted or expunged on the Claims Register by the Reorganized Debtors without a claims

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objection having to be filed and without any further notice to or action, order, or approval of the Bankruptcy Court.

(c)                      Disallowance of Claims.  EXCEPT AS OTHERWISE AGREED, ANY AND ALL PROOFS OF CLAIM FILED AFTER THE APPLICABLE DEADLINE FOR FILING SUCH PROOFS OF CLAIM WILL BE DEEMED DISALLOWED AND EXPUNGED AS OF THE EFFECTIVE DATE WITHOUT ANY FURTHER NOTICE TO OR ACTION, ORDER, OR APPROVAL OF THE BANKRUPTCY COURT, AND HOLDERS OF SUCH CLAIMS MAY NOT RECEIVE ANY DISTRIBUTIONS ON ACCOUNT OF SUCH CLAIMS, UNLESS SUCH LATE PROOF OF CLAIM IS DEEMED TIMELY FILED BY A FINAL ORDER OF THE BANKRUPTCY COURT ON OR BEFORE THE LATER OF THE CONFIRMATION HEARING AND THE DATE THAT IS FORTY-FIVE (45) DAYS AFTER THE APPLICABLE DEADLINE FOR FILING SUCH PROOFS OF CLAIM.

3.                          Objections to Fee Claims

Any objections to Fee Claims will be served and filed (a) no later than thirty (30) days after the filing of the final applications for compensation or reimbursement by the applicable Professional Person or (b) such later date as ordered by the Bankruptcy Court.

4.                          Estimation of Claims

The Debtors or the Reorganized Debtors, as applicable, may at any time request that the Bankruptcy Court estimate any contingent, unliquidated, or Disputed Claim pursuant to section 502(c) of the Bankruptcy Code, regardless of whether the Debtors had previously objected to or otherwise disputed such Claim or whether the Bankruptcy Court has ruled on any such objection.  The Bankruptcy Court will retain jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim, including during the pendency of any appeal relating to any such objection.  In the event that the Bankruptcy Court estimates any contingent, unliquidated, or Disputed Claim, the amount so estimated will constitute either the Allowed amount of such Claim or a maximum limitation on such Claim, as determined by the Bankruptcy Court.  If the estimated amount constitutes a maximum limitation on the amount of such Claim, the Reorganized Debtors may pursue supplementary proceedings to object to the allowance of such Claim.

5.                          Claims Resolution Procedures Cumulative

All of the objection, estimation, and resolution procedures in the Plan are intended to be cumulative and not exclusive of one another.  Claims may be estimated and subsequently settled, compromised, withdrawn, or resolved in accordance with the Plan by any mechanism approved by the Bankruptcy Court.

6.                          No Distributions Pending Allowance

No payment or distribution provided under the Plan will be made on account of a Disputed Claim unless and until (and only to the extent that) such Claim becomes an Allowed Claim.

7.                          Disputed General Unsecured Claims

(a)                     A General Unsecured Claims Reserve will be managed by the Disbursing Agent.  The General Unsecured Claims Reserve will be funded with the amount of Cash allocable to holders of General Unsecured Claims that are not Allowed on the Effective Date.  The Cash in the General

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Unsecured Claims Reserve will be allocable to holders of Disputed General Unsecured Claims, based on their Pro Rata share of the General Unsecured Claims Distribution, as if such Disputed General Unsecured Claims were Allowed Claims on the Effective Date, together with all earnings thereon (net of any expenses relating thereto, including any taxes imposed thereon or otherwise payable by the General Unsecured Claims Reserve).  The Disbursing Agent will hold in the General Unsecured Claims Reserve all interests, payments, and other distributions made on account of, as well as any obligations arising from, property held in the General Unsecured Claims Reserve, to the extent that such property continues to be so held at the time such distributions are made or such obligations arise, and such interests, payments, or other distributions will be held for the benefit of holders of Disputed General Unsecured Claims whose Claims are subsequently Allowed against any of the Debtors and any other parties entitled thereto hereunder.  To the extent that a Disputed General Unsecured Claim becomes an Allowed Claim after the Effective Date, the Disbursing Agent will distribute to the holder thereof the distribution, if any, of Cash to which such holder is entitled hereunder out of the General Unsecured Claims Reserve.  No interest will be paid with respect to any Disputed General Unsecured Claim that becomes an Allowed Claim after the Effective Date.

(b)                     Subject to definitive guidance from the IRS or a court of competent jurisdiction to the contrary, or the receipt of a determination by the IRS, the Disbursing Agent will (i) treat any Cash reserved on account of Disputed General Unsecured Claims (i.e., the General Unsecured Claims Reserve) as a “disputed ownership fund” governed by Treasury Regulation section 1.468B-9, and (ii) to the extent permitted by applicable law, report consistently with the foregoing for state and local income tax purposes.  All parties (including, without limitation, the Debtors, Reorganized Paragon, the Disbursing Agent, and the holders of General Unsecured Claims) will report for tax purposes consistently with such treatment.  The Disbursing Agent will be responsible for payment, out of the Cash in the General Unsecured Claims Reserve held in respect of such Disputed General Unsecured Claims, of any taxes imposed on the General Unsecured Claims Reserve or its assets.

8.                          Distributions After Allowance

To the extent that a Disputed Claim ultimately becomes an Allowed Claim, distributions (if any) will be made to the holder of such Allowed Claim in accordance with the provisions of the Plan.  As soon as practicable after the date on which the order or judgment of the Bankruptcy Court allowing any Disputed Claim becomes a Final Order, the Disbursing Agent will provide to the holder of such Claim the distribution (if any) to which such holder is entitled under the Plan as of the Effective Date, without any interest to be paid on account of such Claim unless required by the Bankruptcy Code.

G.                       Executory Contracts and Unexpired Leases

1.                          Assumption and Rejection of Executory Contracts and Unexpired     Leases

(a)                     As of and subject to the occurrence of the Effective Date and the payment of any applicable Cure Amount, all executory contracts and unexpired leases to which the Debtors are party will be deemed assumed except for an executory contract or unexpired lease that (i) has previously been assumed or rejected pursuant to a final order of the Bankruptcy Court, (ii) is specifically designated on the Schedule of Rejected Contracts and Leases filed and served prior to commencement of the Confirmation Hearing, or (iii) is the subject of a separate (A) assumption motion filed by the Debtors or (B) rejection motion filed by the Debtors under section 365 of the Bankruptcy Code before the Confirmation Date.  The Debtors reserve the right to modify the treatment of any particular executory contract or unexpired lease pursuant to the Plan.

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(b)                     Subject to the occurrence of the Effective Date, the payment of any applicable Cure Amount, and the resolution of any Cure Dispute, the entry of the Confirmation Order by the Bankruptcy Court will constitute approval of the rejections, assumptions, and assumptions and assignments provided for in the Plan pursuant to sections 365(a) and 1123 of the Bankruptcy Code.  Unless otherwise indicated or provided in a separate order of the Bankruptcy Court, rejections, assumptions, or assumptions and assignments of executory contracts and unexpired leases pursuant to the Plan are effective as of the Effective Date.  Each executory contract and unexpired lease assumed pursuant to the Plan or by order of the Bankruptcy Court but not assigned to a third party before the Effective Date will vest in and be fully enforceable by the applicable Reorganized Debtor in accordance with its terms, except as modified by the provisions of the Plan, any order of the Bankruptcy Court authorizing and providing for its assumption, or applicable law.

2.                          Determination of Cure Disputes and Deemed Consent

(a)                     With respect to each executory contract or unexpired lease to be assumed or assumed and assigned by the Debtors, unless otherwise determined by the Bankruptcy Court pursuant to a Final Order or agreed to by the parties thereto prior to the Effective Date, the dollar amount required to Cure any defaults of the Debtors existing as of the Confirmation Date will be the Cure Amount set in the Cure Notice.  The Cure Amount will be satisfied, under section 365(b)(1) of the Bankruptcy Code, by the Debtors or Reorganized Debtors, as applicable, upon assumption of the relevant executory contract or unexpired lease.  Following the Petition Date, the Debtors will have served a notice on parties to executory contracts and unexpired leases to be assumed reflecting the Debtors’ intent to assume the contract or lease in connection with the Plan and setting forth the proposed Cure Amount (if any).  If a counterparty to any executory contract or unexpired lease that the Debtors intend to assume does not receive such a notice, the proposed Cure Amount for such executory contract or unexpired lease will be deemed to be Zero Dollars ($0).  Upon payment in full of the Cure Amount, any and all proofs of Claim based upon an executory contract or unexpired lease that has been assumed in the Chapter 11 Cases or under the Plan will be deemed Disallowed and expunged without any further notice to or action by any party or order of the Bankruptcy Court.

(b)                     If there is a dispute regarding (i) any Cure Amount, (ii) the ability of the Debtors to provide adequate assurance of future performance (within the meaning of section 365 of the Bankruptcy Code) under the contract or lease to be assumed, or (iii) any other matter pertaining to assumption or assumption and assignment, such dispute will be heard by the Bankruptcy Court prior to such assumption or assumption and assignment being effective.  Any counterparty to an executory contract or unexpired lease that fails to object timely to the notice of the proposed assumption or assumption and assignment of such executory contract or unexpired lease or the relevant Cure Amount within fifteen (15) days of the Debtors’ notice of intent to assume or assume and assign, will be deemed to have consented to such assumption or assumption and assignment and the Cure Amount (even if Zero Dollars ($0)), and will be forever barred, estopped, and enjoined from challenging the validity of such assumption or assumption and assignment or the amount of such Cure Amount thereafter.

(c)                      In the event that the rejection of an executory contract or unexpired lease under the Plan results in damages to the other party or parties to such contract or lease, any Claim for such damages, if not heretofore evidenced by a timely filed proof of Claim, will be forever barred and will not be enforceable against the Debtors or the Reorganized Debtors, or their respective Estates, properties or interests in property, unless a proof of Claim is filed with the Bankruptcy Court and served upon the Debtors or the Reorganized Debtors, as applicable, no later than thirty (30) days after the later of (i) the Confirmation Date or (ii) the effective date of the rejection of such executory contract or unexpired lease, as set forth on the Schedule of Rejected Contracts and Leases or order of the Bankruptcy Court.  The

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Confirmation Order will constitute the Bankruptcy Court’s approval of the rejection of all the leases and contracts identified in the Schedule of Rejected Contracts and Leases.

3.                          Survival of the Debtors’ Indemnification and Reimbursement Obligations

Any obligations of the Debtors pursuant to their corporate charters, by-laws, limited liability company agreements, memorandum and articles of association, other organizational documents, deeds of indemnity, or similar contractual agreements to indemnify, directors, officers, agents, and/or employees who serve in such capacity as of or after January 18, 2017, and any other directors or officers as may be agreed upon by and among the Creditors’ Committee, the Requisite Lenders, and the Debtors or the Reorganized Debtors, as applicable with respect to all present and future actions, suits, and proceedings against the Debtors or such officers, directors, agents, or employees based upon any act or omission for or on behalf of the Debtors will not be discharged, impaired, or otherwise affected by the Plan; provided, that the Reorganized Debtors will not indemnify directors or officers of the Debtors for any Claims or Causes of Action arising out of or relating to any act or omission that is a criminal act or constitutes intentional fraud as determined by a Final Order.  All such obligations, including any obligations of the Liquidating Debtors, will be deemed and treated as executory contracts to be assumed by the Debtors under the Plan (and assigned to the Reorganized Debtors if necessary) and will continue as obligations of the Reorganized Debtors.  Any claim based on the Debtors’ obligations in the Plan will not be a Disputed Claim or subject to any objection, in either case, by reason of section 502(e)(1)(B) of the Bankruptcy Code.  After the Effective Date, the Reorganized Debtors will not terminate or otherwise reduce the coverage under any directors’ and officers’ insurance policies (including any “tail policy”) in effect as of the Petition Date, and all members, managers, directors, and officers of the Debtors who served in such capacity at any time prior to the Effective Date will be entitled to the full benefits of any such policy for the full term of such policy regardless of whether such members, managers, directors, and/or officers remain in such positions after the Effective Date.

4.                          Compensation and Benefit Plans

Unless otherwise provided in the Plan, all employment and severance policies, and all compensation and benefits plans, policies, and programs of the Debtors applicable to their respective employees, retirees, and non-employee directors, including all savings plans, retirement plans, healthcare plans, disability plans, severance benefit plans, incentive plans, and life and accidental death and dismemberment insurance plans, are deemed to be, and will be treated as, executory contracts under the Plan and, on the Effective Date, will be assumed pursuant to sections 365 and 1123 of the Bankruptcy Code.  For the avoidance of doubt, any awards granted under the Management Incentive Plan will be governed by such plan and will not be subject to any provisions of the foregoing assumed plans, programs, or arrangements.

5.                          Insurance Policies.

All insurance policies to which any Debtor is a party as of the Effective Date will be deemed to be and treated as executory contracts, will be assumed or assumed and assigned by the applicable Debtor, and will vest in the Reorganized Debtors and continue in full force and effect thereafter in accordance with their respective terms.

6.                          Reservation of Rights

(a)                                 Neither the exclusion nor the inclusion by the Debtors of any contract or lease on any exhibit, schedule, or other annex to the Plan or in the Plan Supplement, nor anything contained in the Plan, will constitute an admission by the Debtors that any such contract or lease is or is not an executory

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contract or unexpired lease or that the Debtors or the Reorganized Debtors or their respective affiliates has any liability thereunder.

(b)                                 Except as otherwise provided in the Plan, or in a previously entered order of the Bankruptcy Court, nothing will waive, excuse, limit, diminish, or otherwise alter any of the defenses, claims, Causes of Action, or other rights of the Debtors or the Reorganized Debtors under any executory or non-executory contract or unexpired or expired lease.

(c)                                  Nothing in the Plan will increase, augment, or add to any of the duties, obligations, responsibilities, or liabilities of the Debtors or the Reorganized Debtors, as applicable, under any executory or non-executory contract or unexpired or expired lease.

(d)                                 If there is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of its assumption under the Plan, the Debtors or Reorganized Debtors, as applicable, will have sixty (60) days following entry of a Final Order resolving such dispute to alter their treatment of such contract or lease.

H.                       Conditions Precedent to the Occurrence of the Effective Date

1.                          Conditions Precedent to the Effective Date

The Effective Date will not occur unless all of the following conditions precedent have been satisfied or waived in accordance with Section 9.2 of the Plan:

(a)                                 the Bankruptcy Court has entered the Confirmation Order, which order will not be subject to a stay of execution;

(b)                                 the Plan Documents are reasonably satisfactory in all respects to the Debtors, the Creditors’ Committee, and the Requisite Lenders;

(c)                                  all conditions precedent to effectiveness of the Take Back Debt Agreement, the New Letter of Credit Agreement, the Existing L/C Escrow Agreement(s), the U.K. Implementation Agreement, the U.K. Indemnification Agreement, the Registration Rights Agreement, and the Shareholders Agreement will have been satisfied or waived in accordance with the terms of the Plan;

(d)                                 all Restructuring Expenses and Noteholders’ Professional Fees payable under the Plan will be paid by the Debtors before or on the Effective Date without any further notice to or action, order, or approval of the Bankruptcy Court in accordance with Sections 4.4 and 5.17 of the Plan;

(e)                                  the amount of the Retained Accounts will have been either (i) agreed to by the Debtors, the Creditors’ Committee, and Requisite Lenders or (ii) determined by the Bankruptcy Court, if applicable;

(f)                                   the aggregate amount of all Allowed General Unsecured Claims will not exceed $20 million;

(g)                                  the U.K. Administration will have been commenced and the U.K. Sale Transaction will have been effectuated in accordance with the U.K. Implementation Agreement;

(h)                                 all governmental and third-party approvals and consents, including Bankruptcy Court approval, necessary in connection with the transactions provided for in the Plan have been

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obtained, are not subject to unfulfilled conditions, and are in full force and effect, and all applicable waiting periods have expired without any action having been taken by any competent authority that would restrain, prevent, or otherwise impose materially adverse conditions on such transactions; and

(i)                                     the Litigation Trust Committee and the Litigation Trust Management will have been appointed and the Litigation Trust Agreement will be in full force and effect.

2.                          Waiver of Conditions Precedent

(a)                                 Each of the conditions precedent to the occurrence of the Effective Date (other than Section 9.1(a) of the Plan) may be waived in writing by the Debtors subject to the written consent of the Creditors’ Committee and the Requisite Lenders.  If any such condition precedent is waived pursuant to this Section and the Effective Date occurs, each party agreeing to waive such condition precedent will be estopped from withdrawing such waiver after the Effective Date or otherwise challenging the occurrence of the Effective Date on the basis that such condition was not satisfied.  If the Plan is confirmed for fewer than all of the Debtors subject to Section 5.15 of the Plan, only the conditions applicable to the Debtor or Debtors for which the Plan is confirmed must be satisfied or waived for the Effective Date to occur.

(b)                                 The stay of the Confirmation Order pursuant to Bankruptcy Rule 3020(e) will be deemed waived by and upon the entry of the Confirmation Order, and the Confirmation Order will take effect immediately upon its entry.

3.                          Effect of Failure of a Condition

If the conditions listed in Section 9.1 of the Plan are not satisfied or waived in accordance with Section 9.2 of the Plan on or before July 31, 2017, or by such later date as may be later agreed to by the Creditors’ Committee, the Requisite Lenders and the Debtors and as set forth by the Debtors in a notice filed with the Bankruptcy Court prior to the expiration of such period, the Plan will be null and void in all respects and nothing contained in the Plan or the Disclosure Statement will (a) constitute a waiver or release of any Claims by or against or any Interests in the Debtors, (b) prejudice in any manner the rights of any Entity, or (c) constitute an admission, acknowledgement, offer, or undertaking by the Debtors, the Creditors’ Committee, any of the Term Lenders, the Revolving Lenders, the Senior Noteholders, or any other Entity.

I.                            Effect of Confirmation

1.                          Binding Effect

Except as otherwise provided in section 1141(d)(3) of the Bankruptcy Code, and subject to the occurrence of the Effective Date, on and after the entry of the Confirmation Order, the provisions of the Plan will bind every holder of a Claim against or Interest in any Debtor and inure to the benefit of and be binding on such holder’s respective successors and assigns, regardless of whether the Claim or Interest of such holder is impaired under the Plan and whether such holder has accepted the Plan.

2.                          Vesting of Assets

Except as otherwise provided in the Plan, including with respect to the Assets contributed to the Litigation Trust, on and after the Effective Date, all Assets of the Estates, including all claims, rights, and Causes of Action and any property acquired by the Debtors or Reorganized Paragon under or in connection with the Plan or the U.K. Administration, will vest in each respective Reorganized Debtor free

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and clear of all Claims, Liens, charges, other encumbrances, and Interests.  Subject to the terms of the Plan, on and after the Effective Date, the Reorganized Debtors may operate their businesses and may use, acquire, and dispose of property and prosecute, compromise, or settle any Claims (including any Administrative Expense Claims) and Causes of Action without supervision of or approval by the Bankruptcy Court and free and clear of any restrictions of the Bankruptcy Code or the Bankruptcy Rules other than restrictions expressly imposed by the Plan or the Confirmation Order.

3.                          Discharge of Claims Against and Interests in the Debtors

Upon the Effective Date and in consideration of the distributions to be made under the Plan, except as otherwise provided in the Plan or in the Confirmation Order, each holder (as well as any trustee or agent on behalf of such holder) of a Claim or Interest and any successor, assign, and affiliate of such holder will be deemed to have forever waived, released, and discharged the Debtors, to the fullest extent permitted by section 1141 of the Bankruptcy Code, of and from any and all Claims, Interests, rights, and liabilities that arose prior to the Effective Date.  Except as otherwise provided in the Plan, upon the Effective Date, all such holders of Claims and Interests and their successors, assigns, and affiliates will be forever precluded and enjoined, pursuant to sections 105, 524, and 1141 of the Bankruptcy Code, from prosecuting or asserting any such discharged Claim against or terminated Interest in any Debtor or any Reorganized Debtor.

4.                          Term of Pre-Confirmation Injunctions and Stays

Unless otherwise provided in the Plan, all injunctions and stays arising under or entered during the Chapter 11 Cases, whether under sections 105 or 362 of the Bankruptcy Code or otherwise, and in existence on the date of entry of the Confirmation Order, will remain in full force and effect until the later of the Effective Date and the date indicated in the order providing for such injunction or stay.

5.                          Plan Injunction

(a)                     Except as otherwise provided in the Plan or in the Confirmation Order, as of the entry of the Confirmation Order but subject to the occurrence of the Effective Date, all Entities who have held, hold, or may hold Claims or Interests are, with respect to any such Claim or Interest, permanently enjoined after the entry of the Confirmation Order from: (i) commencing, conducting, or continuing in any manner, directly or indirectly, any suit, action, or other proceeding of any kind (including any proceeding in a judicial, arbitral, administrative, or other forum) against or affecting, directly or indirectly, a Debtor, a Reorganized Debtor, or an Estate or the property of any of the foregoing, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing Entities mentioned in this subsection (i) or any property of any such transferee or successor; (ii) enforcing, levying, attaching (including any prejudgment attachment), collecting, or otherwise recovering in any manner or by any means, whether directly or indirectly, any judgment, award, decree, or order against a Debtor, a Reorganized Debtor, or an Estate or its property, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing Entities mentioned in this subsection (ii) or any property of any such transferee or successor; (iii) creating, perfecting, or otherwise enforcing in any manner, directly or indirectly, any encumbrance of any kind against a Debtor, a Reorganized Debtor, or an Estate or any of its property, or any direct or indirect transferee of any property of, or successor in interest to, any of the foregoing Entities mentioned in this subsection (iii) or any property of any such transferee or successor; (iv) acting or proceeding in any manner, in any place whatsoever, that does not conform to or comply with the provisions of the Plan to the full extent permitted by applicable law; and (v) commencing or continuing, in any manner or in any place, any action that does not comply with or is inconsistent with the provisions

52

of the Plan; provided, that nothing contained in the Plan will preclude such Entities who have held, hold, or may hold Claims against or Interests in a Debtor or an Estate from exercising their rights, or obtaining benefits, pursuant to and consistent with the terms of the Plan and the Plan Documents.

(b)                     By accepting distributions pursuant to the Plan, each holder of an Allowed Claim or Allowed Interest will be deemed to have affirmatively and specifically consented to be bound by the Plan, including the injunctions set forth in Section 10.5 of the Plan.

6.                          Releases

(a)                                 Releases by the Debtors.  As of the Effective Date, except for the rights that remain in effect from and after the Effective Date to enforce the Plan, and the Plan Documents, for good and valuable consideration, the adequacy of which is confirmed by the Plan, including the service of the Released Parties to facilitate the reorganization of the Debtors and the implementation of the Restructuring, and except as otherwise provided in the Plan or in the Confirmation Order, the Released Parties are deemed forever released and discharged by the Debtors, the Reorganized Debtors, and the Estates from any and all claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action, losses, and liabilities whatsoever, including any derivative claims, asserted or assertable on behalf of the Debtors, the Reorganized Debtors, or their Estates, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, existing or thereinafter arising, in law, equity, or otherwise, that the Debtors, the Reorganized Debtors, or their Estates would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the holder of any Claim or Interest or other Entity, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Chapter 11 Cases, the purchase, sale, or rescission of the purchase or sale of any security of the Debtors or the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in the Plan, the business or contractual arrangements between any Debtor and any Released Party, the Restructuring, the restructuring of any Claim or Interest before or during the Chapter 11 Cases, the Restructuring Transactions, the Disclosure Statement, and the Plan and related agreements, instruments, and other documents (including the Plan Documents), and the negotiation, formulation, or preparation thereof, the solicitation of votes with respect to the Plan, or any other act or omission, other than Claims or Causes of Action arising out of or related to any act or omission of a Released Party that is a criminal act or constitutes intentional fraud, willful misconduct, or gross negligence as determined by a Final Order.

“Released Parties” means, collectively, and in each case solely in their capacities as such: (a) the Debtors; (b) the Debtors’ non-Debtor affiliates; (c) the Term Lenders; (d) the Revolving Lenders; (e) the Creditors’ Committee (f) the Revolving Credit Facility Agent; (g) the Term Loan Agent; (h) the Senior Notes Indenture Trustee; (i) each of the Global Coordinators, Joint Lead Arrangers, Joint Bookrunners, Senior Managing Agents, and Managing Agents named in the Term Loan Agreement; (j) JPMorgan Chase Bank, N.A., in its capacity as former administrative agent under the Term Loan Agreement; (k) the Disbursing Agent; (l) each of the Syndication Agents, Documentation Agents, Joint Lead Arrangers and Joint Lead Bookrunners named in the Revolving Credit Agreement; (m) each of the Issuing Banks under the Revolving Credit Agreement; (n) the U.K. Administrators; and (o) with respect to each of the foregoing entities, such entities’ predecessors (other than the Non-Released Parties), professionals, restructuring advisors, successors, assigns, subsidiaries, affiliates, managed accounts and funds, current and former officers and directors (other than the Non-Released Parties), principals, shareholders, members, partners, managers, employees, subcontractors, agents, advisory board members, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, management companies, fund advisors, and

53

other professionals, and such entities’ respective heirs, executors, estates, servants, and nominees, in each case in their capacity as such and, in respect of the Senior Noteholders on the Creditors’ Committee who also were members of an ad hoc group of Senior Noteholders earlier in these Chapter 11 Cases in their capacity as members of the Creditors’ Committee and of an ad hoc group of Senior Noteholders.

“Releasing Parties” means, collectively, and in each case solely in their capacities as such: (a) the holders of all Claims or Interests who vote to accept the Plan; (b) the holders of Claims or Interests that are Unimpaired under the Plan and do not timely object to the releases provided for in the Plan; (c) the holders of Claims or Interests whose vote to accept or reject the Plan is solicited but who do not vote either to accept or to reject the Plan and do not opt out of granting the releases set forth in the Plan; (d) the holders of Claims or Interests who vote to reject the Plan but do not opt out of granting the releases set forth in the Plan; (e) the Revolving Credit Facility Agent; (f) the Term Loan Agent; (g) the Senior Notes Indenture Trustee; (h) each of the Global Coordinators, Joint Lead Arrangers, Joint Bookrunners, Senior Managing Agents, and Managing Agents named in the Term Loan Agreement; (i) JPMorgan Chase Bank, N.A., in its capacity as former administrative agent under the Term Loan Agreement; (j) the Disbursing Agent; (k) each of the Syndication Agents, Documentation Agents, Joint Lead Arrangers and Joint Lead Bookrunners named in the Revolving Credit Agreement; (l) each of the Issuing Banks under the Revolving Credit Agreement; and (m) with respect to each of the foregoing entities, such entities’ predecessors, professionals, restructuring advisors, successors, assigns, subsidiaries, affiliates, managed accounts and funds, current and former officers and directors, principals, shareholders, members, partners, managers, employees, subcontractors, agents, advisory board members, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, management companies, fund advisors, and other professionals, and such entities’ respective heirs, executors, estates, servants, and nominees, in each case in their capacity as such.

(b)                                 Releases by Holders of Claims and Interests.  As of the Effective Date, except for the rights that remain in effect from and after the Effective Date to enforce the Plan and the Plan Documents, for good and valuable consideration, the adequacy of which is confirmed by the Plan, including the service of the Released Parties to facilitate the reorganization of the Debtors and the implementation of the Restructuring, and except as otherwise provided in the Plan or in the Confirmation Order, the Released Parties are deemed forever released and discharged by the Releasing Parties from any and all claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action, losses, and liabilities whatsoever, including any derivative claims, asserted or assertable on behalf of the Debtors, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity, or otherwise, that such holders or their affiliates would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the holder of any Claim or Interest or other Entity, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Chapter 11 Cases, the purchase, sale, or rescission of the purchase or sale of any security of the Debtors or the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in the Plan, the business or contractual arrangements between any Debtor and any Released Party, the Restructuring, the restructuring of any Claim or Interest before or during the Chapter 11 Cases, the Restructuring Transactions, the Disclosure Statement, and the Plan and related agreements, instruments, and other documents (including the Plan Documents), and the negotiation, formulation, or preparation thereof, the solicitation of votes with respect to the Plan, or any other act or omission, other than Claims or Causes of Action arising out of or related to any act or omission of a Released Party that is a criminal act or constitutes intentional fraud, willful misconduct, or gross negligence as determined by a Final Order.

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(c)                                  Special Provisions for Governmental Units.  Notwithstanding any language to the contrary contained in the Plan, no provision of the Plan will (i) preclude any Governmental Unit from enforcing its police or regulatory powers or (ii) release any non-Debtor from liability in connection with any legal or equitable action or claim brought by any Governmental Unit.

7.                          Exculpation.

To the extent permitted by applicable law, no Exculpated Party will have or incur, and each Exculpated Party is released and exculpated by the Plan from, any claim, obligation, suit, judgment, damage, demand, debt, right, Cause of Action, loss, and liability for any claim in connection with or arising out of the administration of the Chapter 11 Cases; the negotiation and pursuit of any disclosure statements, including the Disclosure Statement, the Restructuring Transactions, any plans of reorganization, including the Plan, and all related agreements, instruments, and other documents (including the Plan Supplement), or the solicitation of votes for, or pursuit of confirmation of any plans of reorganization, including the Plan; the funding of the Plan; the occurrence of the Effective Date; the administration of the Plan or the property to be distributed under the Plan; the issuance of securities under or in connection with the Plan; or the transactions in furtherance of any of the foregoing; except to the extent arising out of or related to any act or omission of an Exculpated Party that is a criminal act or constitutes intentional fraud, willful misconduct, or gross negligence as determined by a Final Order.  This exculpation will be in addition to, and not in limitation of, all other releases, indemnities, exculpations and any other applicable law or rules protecting such Exculpated Parties from liability.

“Exculpated Parties” means, collectively, and in each case in their capacities as such: (a) the Debtors; (b) the Disbursing Agent; (c) the U.K. Administrators; (d) Deloitte; (e) the Creditors’ Committee; (f) the Professional Persons; and (g) with respect to clauses (a) through (e), such entities’ predecessors (other than the Non-Released Parties), professionals, successors, assigns, subsidiaries, affiliates, managed accounts and funds, current and former officers and directors (other than the Non-Released Parties), principals, shareholders, members, partners, managers, employees, subcontractors, agents, advisory board members, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, management companies, fund advisors, and other professionals, and such entities’ respective heirs, executors, estates, servants, and nominees, in each case in their capacity as such.

8.                          Injunction Related to Releases and Exculpation

Except for the rights that remain in effect from and after the Effective Date to enforce the Plan and the Plan Documents, the Confirmation Order will permanently enjoin the commencement or prosecution by any Entity, whether directly, derivatively, or otherwise, of any Claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action, losses, or liabilities released or exculpated pursuant to the Plan.

9.                          Subordinated Claims

The allowance, classification, and treatment of all Allowed Claims and Allowed Interests and the respective distributions and treatments thereof under the Plan take into account and conform to the relative priority and rights of the Claims and Interests in each Class in connection with any contractual, legal, and equitable subordination rights relating thereto, whether arising under general principles of equitable subordination, sections 510(a), 510(b), or 510(c) of the Bankruptcy Code, or otherwise.  Pursuant to section 510 of the Bankruptcy Code, the Debtors reserve the right to reclassify any Allowed Claim or Allowed Interest in accordance with any contractual, legal, or equitable subordination relating thereto.

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10.                   Retention of Causes of Action and Reservation of Rights

Subject to Sections 10.6, 10.7, and 10.8 of the Plan, nothing contained in the Plan or the Confirmation Order will be deemed to be a waiver or relinquishment of any rights, claims, Causes of Action, rights of setoff or recoupment, or other legal or equitable defenses that the Debtors had immediately before the Effective Date on behalf of the Estates or of themselves in accordance with any provision of the Bankruptcy Code or any applicable nonbankruptcy law.  Subject to Sections 10.6, 10.7, and 10.8 of the Plan, the Reorganized Debtors will have, retain, reserve, and be entitled to assert all such claims, Causes of Action, rights of setoff or recoupment, and other legal or equitable defenses as fully as if the Chapter 11 Cases had not been commenced, and all of the Debtors’ legal and equitable rights in respect of any Unimpaired Claim may be asserted after the Effective Date to the same extent as if the Chapter 11 Cases had not been commenced.

11.                   Ipso Facto and Similar Provisions Ineffective

Any term of any policy, contract, or other obligation applicable to a Debtor will be void and of no further force or effect with respect to any Debtor to the extent that such policy, contract, or other obligation is conditioned on, creates an obligation of the Debtor as a result of, or gives rise to a right of any Entity based on any of the following: (a) the insolvency or financial condition of a Debtor; (b) the commencement of the Chapter 11 Cases; (c) the confirmation or consummation of the Plan, including any change of control that will occur as a result of such consummation; (d) any change of control resulting from the U.K. Sale Transaction; (e) the commencement of the U.K. Administration; or (f) the Restructuring.

J.                          Retention of Jurisdiction

Pursuant to sections 105(c) and 1142 of the Bankruptcy Code and notwithstanding entry of the Confirmation Order and the occurrence of the Effective Date, on and after the Effective Date, the Bankruptcy Court will retain exclusive jurisdiction, pursuant to 28 U.S.C. §§ 1334 and 157, over all matters arising in or related to the Chapter 11 Cases, other than those matters administered in the U.K. Administration, for, among other things, the following purposes:

(a)                     to hear and determine applications for the assumption of executory contracts or unexpired leases and any disputes over Cure Amounts resulting therefrom;

(b)                     to determine any motion, adversary proceeding, application, contested matter, and other litigated matter in the Chapter 11 Cases pending on or commenced after the entry of the Confirmation Order;

(c)                      to hear and resolve any disputes arising from or related to (i) any orders of the Bankruptcy Court granting relief under Bankruptcy Rule 2004 or (ii) any protective orders entered by the Bankruptcy Court in connection with the foregoing;

(d)                     to ensure that distributions to holders of Allowed Claims are accomplished as provided in the Plan and the Confirmation Order;

(e)                      to consider Claims or the allowance, classification, priority, compromise, estimation, or payment of any Claim, including any Administrative Expense Claim;

(f)                       to enter, implement, or enforce such orders as may be appropriate in the event that the Confirmation Order is for any reason stayed, reversed, revoked, modified, or vacated;

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(g)                      to issue and enforce injunctions and releases, enter and implement other orders, and take such other actions as may be necessary or appropriate to restrain interference by any Entity with the consummation, implementation, or enforcement of the Plan, the Confirmation Order, or any other order of the Bankruptcy Court;

(h)                     to hear and determine any application to modify the Plan in accordance with section 1127 of the Bankruptcy Code to remedy any defect or omission or reconcile any inconsistency in the Plan, the Disclosure Statement, or any order of the Bankruptcy Court, including the Confirmation Order, in such a manner as may be necessary to carry out the purposes and effects thereof;

(i)                         to hear and determine all Fee Claims;

(j)                        to resolve disputes concerning Disputed Claims and any retained amounts with respect to Disputed Claims or the administration thereof;

(k)                     to hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of the Plan, the Confirmation Order, any transactions or payments in furtherance of either, or any agreement, instrument, or other document governing or related to any of the foregoing;

(l)                         to take any action and issue such orders, including any such action or orders as may be necessary after entry of the Confirmation Order or the occurrence of the Effective Date, as may be necessary to construe, enforce, implement, execute, and consummate the Plan, including any release, exculpation, or injunction provisions set forth in the Plan, or to maintain the integrity of the Plan following the occurrence of the Effective Date;

(m)                 to determine such other matters and for such other purposes as may be provided in the Confirmation Order;

(n)                     to hear and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;

(o)                     to hear and determine any other matters related to the Chapter 11 Cases and not inconsistent with the Bankruptcy Code or title 28 of the United States Code;

(p)                     to resolve any disputes concerning whether an Entity had sufficient notice of the Chapter 11 Cases, the Disclosure Statement, any solicitation conducted in connection with the Chapter 11 Cases, any bar date established in the Chapter 11 Cases, or any deadline for responding or objecting to a Cure Amount, in each case, for the purpose for determining whether a Claim or Interest is discharged under the Plan or for any other purpose;

(q)                     to recover all Assets of the Debtors and property of the Estates, wherever located;

(r)                        to adjudicate the Noble Claims to the fullest extent permitted by law;

(s)                       to adjudicate disputes relating to the Litigation Trust and Litigation Trust Agreement, including, but not limited to, any distributions from the Litigation Trust; and

(t)                        to enter a final decree closing each of the Chapter 11 Cases;

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provided, that, on and after the Effective Date, the Bankruptcy Court will not retain jurisdiction over any matters arising out of or related to the Take Back Debt Agreement, the New Letter of Credit Agreement, the Existing L/C Escrow Agreement(s), the Registration Rights Agreement, or the Shareholders Agreement.

K.                       Miscellaneous Provisions

1.                          Amendments.

(a)                     Plan Modifications.  Subject to the reasonable consent of the Creditors’ Committee and the Requisite Lenders, the Plan may be amended, modified, or supplemented by the Debtors in the manner provided for by section 1127 of the Bankruptcy Code or as otherwise permitted by law, without additional disclosure pursuant to section 1125 of the Bankruptcy Code, except as otherwise ordered by the Bankruptcy Court.  In addition, after the Confirmation Date, so long as such action does not materially and adversely affect the treatment of holders of Allowed Claims or Allowed Interests pursuant to the Plan and subject to the reasonable consent of the Creditors’ Committee and the Requisite Lenders, the Debtors may remedy any defect or omission or reconcile any inconsistencies in the Plan or the Confirmation Order with respect to such matters as may be necessary to carry out the purposes or effects of the Plan, and any holder of a Claim or Interest that has accepted the Plan will be deemed to have accepted the Plan as amended, modified, or supplemented.

(b)                     Certain Technical Amendments.  Prior to the Effective Date, the Debtors may make appropriate technical adjustments and modifications to the Plan without further order or approval of the Bankruptcy Court; provided, that such technical adjustments and modifications do not adversely affect the treatment of holders of Allowed Claims or Allowed Interests under the Plan.

2.                          Revocation or Withdrawal of Plan

Subject to the reasonable consent of the Creditors’ Committee and the Requisite Lenders, the Debtors reserve the right to revoke or withdraw the Plan prior to the Effective Date as to any or all of the Debtors.  If, with respect to a Debtor, the Plan has been revoked or withdrawn prior to the Effective Date, or if confirmation or the occurrence of the Effective Date as to such Debtor does not occur on the Effective Date, then, with respect to such Debtor: (a) the Plan will be null and void in all respects; (b) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount any Claim or Interest or Class of Claims or Interests), assumption of executory contracts or unexpired leases affected by the Plan, and any document or agreement executed pursuant to the Plan will be deemed null and void; and (c) nothing contained in the Plan will (i) constitute a waiver or release of any Claim by or against, or any Interest in, such Debtor or any other Entity; (ii) prejudice in any manner the rights of such Debtor or any other Person or Entity; or (iii) constitute an admission of any sort by any Debtor or any other Person or Entity.

3.                          Dissolution of Creditors’ Committee

Except to the extent provided in the Plan, upon the Effective Date, the current and former members of the Creditors’ Committee, and their respective officers, employees, counsel, advisors, and agents, will be released and discharged of and from all further authority, duties, responsibilities, and obligations related to and arising from and in connection with the Chapter 11 Cases; provided, however, that following the Effective Date, the Creditors’ Committee will continue in existence and have standing and a right to be heard for the following limited purposes: (a) Claims and/or applications for compensation by Professional Persons; (b) any appeals of the Confirmation Order; (c) any appeals to which the Creditors’ Committee is a named party; and (d) any adversary proceedings or contested matters as of the Effective Date to which

58

the Creditors’ Committee is a named party.  Following the completion of the Creditors’ Committee’s remaining duties set forth above, the Creditors’ Committee will be dissolved, and the retention or employment of the Creditors’ Committee’s respective attorneys, accountants, and other agents will terminate.

4.                          Exemption from Certain Transfer Taxes

Pursuant to section 1146 of the Bankruptcy Code, the issuance, transfer, or exchange of any security or other property under the Plan, including, to the fullest extent permitted by applicable law, all sale transactions consummated by the Debtors and approved by the Bankruptcy Court on and after the Confirmation Date through and including the Effective Date, including any transfers effectuated under the Plan, and any assumption, assignment, or sale by the Debtors of their interests in unexpired leases of nonresidential real property or executory contracts pursuant to section 365(a) of the Bankruptcy Code, will constitute a “transfer under a plan” within the purview of section 1146 of the Bankruptcy Code and will not be subject to any stamp, real estate transfer, mortgage recording, or other similar tax.

5.                          Payment of Statutory Fees

All fees payable under section 1930 of chapter 123 of title 28 of the United States Code will be paid on the Effective Date, or as soon as practicable thereafter, by the Debtors or Reorganized Debtors.  Quarterly fees owed to the U.S. Trustee will be paid when due in accordance with applicable law and the Debtors and Reorganized Debtors will continue to file reports to show the calculation of such fees for the Debtors’ Estates until the Chapter 11 Cases are closed under section 350 of the Bankruptcy Code.  Each and every one of the Debtors will remain obligated to pay quarterly fees to the U.S. Trustee until the earliest of that particular Debtor’s case is closed, dismissed, or converted to a case under Chapter 7 of the Bankruptcy Code.

6.                          Severability

Subject to Section 5.15 of the Plan, if, prior to the entry of the Confirmation Order, any term or provision of the Plan is held by the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court, at the request of the Debtors with the reasonable consent of the Creditors’ Committee and the Requisite Lenders, will have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void, or unenforceable, and such term or provision will then be applicable as altered or interpreted.  Notwithstanding any such holding, alteration, or interpretation by the Bankruptcy Court, the remainder of the terms and provisions of the Plan will remain in full force and effect and will in no way be affected, impaired, or invalidated by such holding, alteration, or interpretation.  The Confirmation Order will constitute a judicial determination and will provide that each term and provision of the Plan, as it may have been altered or interpreted in accordance with this Section, is valid and enforceable pursuant to its terms.

7.                          Governing Law

Except to the extent that the Bankruptcy Code or other federal law is applicable or to the extent that a Plan Document provides otherwise, the rights, duties, and obligations arising under the Plan and the Plan Documents will be governed by, and construed and enforced in accordance with, the internal laws of the State of New York, without giving effect to the principles of conflict of laws thereof.

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8.                          Immediate Binding Effect

Notwithstanding Bankruptcy Rules 3020(e), 6004(h), 7062, or otherwise, upon the occurrence of the Effective Date, the terms of the Plan and the Plan Documents will be immediately effective and enforceable and deemed binding upon and inure to the benefit of the Debtors, the Reorganized Debtors, the holders of Claims and Interests, the Released Parties, the Exculpated Parties, and each of their respective successors and assigns.

9.                          Successors and Assigns

The rights, benefits, and obligations of any Entity named or referred to in the Plan will be binding on and will inure to the benefit of any heir, executor, administrator, successor, or permitted assign, if any, of each such Entity.

10.                   Entire Agreement

On the Effective Date, the Plan, the Plan Supplement, and the Confirmation Order will supersede all previous and contemporaneous negotiations, promises, covenants, agreements, understandings, and representations on such subjects, all of which have become merged and integrated into the Plan.

11.                   Computing Time

In computing any period of time prescribed or allowed by the Plan, unless otherwise set forth in the Plan or determined by the Bankruptcy Court, the provisions of Bankruptcy Rule 9006 will apply.

12.                   Exhibits to Plan

All exhibits, schedules, supplements, and appendices to the Plan (including the Plan Supplement) are incorporated into and are a part of the Plan as if set forth in full in the Plan.

13.                   Notices

All notices, requests, and demands to or upon the Debtors or Reorganized Debtors, as applicable, will be in writing (including by email transmission) and, unless otherwise provided in the Plan, will be deemed to have been duly given or made only when actually delivered, addressed as follows:

(a)                                 If to the Debtors or Reorganized Debtors:

Paragon Offshore plc
c/o Paragon Offshore Services LLC
3151 Briarpark Drive
Houston, Texas  77042
Attn:                    Todd Strickler, Senior Vice President of Administration, General Counsel, and Corporate Secretary
Telephone: (832) 783-4000
Email:            tstrickler@paragonoffshore.com

— and —

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Richards, Layton & Finger, P.A.
One Rodney Square

920 North King Street

Wilmington, Delaware 19801

Attn:                    Mark D. Collins, Esq.

Telephone:  (302) 651-7700

Email:            collins@rlf.com

— and —

Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York  10153
Attn:                    Gary T. Holtzer, Esq.

Stephen A. Youngman, Esq.
Telephone:  (212) 310-8000
Email:            gary.holtzer@weil.com
                                                stephen.youngman@weil.com

(b)                                 If to the Revolving Credit Facility Agent and/or the Steering Committee of Revolving Lenders:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attn:                    Sandeep Qusba, Esq.

Kathrine A. McLendon, Esq.

Telephone: (212) 455-2000

Email:            squsba@stblaw.com

kmclendon@stblaw.com

— and —

Landis Rath & Cobb LLP

919 Market Street, Suite 1800
Wilmington, Delaware 19801
Attn:                    Adam G. Landis, Esq.
                                                Kerri K. Mumford, Esq.
Telephone:  (302) 467-4400
Facsimile:  (302) 467-4450
Email:            landis@lrclaw.com
                                                mumford@lrclaw.com

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(c)                                  If to the Term Loan Agent and/or the Ad Hoc Committee of Term Lenders:

Freshfields Bruckhaus Deringer LLP
601 Lexington Avenue, 31st Floor
New York, New York 10022
Attn:                    Madlyn Gleich Primoff
                                                Mark F. Liscio, Esq.
                                                Scott Talmadge, Esq.
Telephone: (212) 277-4000
Facsimile: (212) 277-4001
Email:            madlyn.primoff@freshfields.com
                                                mark.liscio@freshfields.com
                                                scott.talmadge@freshfields.com

— and —

Potter Anderson & Corroon LLP
1313 North Market Street, 6th Floor, P.O. Box 951
Wilmington, Delaware  19899-0951
Attn:                    Jeremy W. Ryan, Esq.
                                                Ryan M. Murphy, Esq.
Telephone:  (302) 984-6000
Facsimile: (302) 658-1192
Email:            jryan@potteranderson.com
                                                rmurphy@potteranderson.com

(d)                                 If to the Creditors’ Committee:

Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019
Attn:                    Brian S. Hermann, Esq.
                                                Samuel E. Lovett, Esq.
Telephone: (212) 373-3000
Email:            bhermann@paulweiss.com
                                                slovett@paulweiss.com

— and —

Young Conway Stargatt & Taylor LLP
Rodney Square, 1000 North King Street
Wilmington, Delaware 19801
Attn: Pauline K. Morgan, Esq.
Telephone:  (302) 571 6600
Email:  pmorgan@ycst.com

(e)                                  If to the Senior Notes Indenture Trustee:

Morgan, Lewis, & Bockius LLP
101 Park Avenue
New York, New York 10178
Attn:                    Glenn E. Siegel
                                                James O. Moore
Telephone: (212) 309-6000
Facsimile: (212) 309-6001
Email:            glenn.siegel@morganlewis.com
                                                james.moore@morganlewis.com

After the occurrence of the Effective Date, the Reorganized Debtors have authority to send a notice to Entities that to continue to receive documents pursuant to Bankruptcy Rule 2002, such Entities must file a

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renewed request to receive documents pursuant to Bankruptcy Rule 2002.  After the occurrence of the Effective Date, the Reorganized Debtors are authorized to limit the list of Entities receiving documents pursuant to Bankruptcy Rule 2002 to those Entities that have filed such renewed requests.

14.                   Reservation of Rights

Except as otherwise provided in the Plan, the Plan will be of no force or effect unless the Bankruptcy Court enters the Confirmation Order.  None of the filing of the Plan, any statement or provision of the Plan, or the taking of any action by the Debtors with respect to the Plan will be or will be deemed to be an admission or waiver of any rights of the Debtors with respect to any Claims or Interests prior to the Effective Date.

VII.
FINANCIAL INFORMATION AND PROJECTIONS

A.                        Consolidated Condensed Projected Financial Information

The Debtors believe that the Plan meets the feasibility requirement set forth in section 1129(a)(11) of the Bankruptcy Code (see Section XIII.C hereof), as confirmation is not likely to be followed by liquidation or the need for further financial reorganization of the Debtors or any successor under the Plan.  In connection with the development of the Plan and for the purposes of determining whether the Plan satisfies the feasibility standard, the Debtors analyzed their ability to satisfy their financial obligations while maintaining sufficient liquidity and capital resources.  The Debtors have prepared financials for 2016 and financial projections (the “Projections”) for 2017 through 2021 (the “Projection Period”), as set forth below.  The Debtors do not, as a matter of course, publish their business plans or strategies, projections or anticipated financial position.  Accordingly, the Debtors do not anticipate that they will, and disclaim any obligation to, furnish updated business plans or Projections to holders of Claims or other parties in interest after the Confirmation Date, or to include such information in documents required to be filed with the SEC or otherwise make such information public, unless required to do so by the SEC or other regulatory bodies pursuant to the provisions of the Plan.  In connection with the development of the Plan, the Projections were prepared by the Debtors, with the assistance of their advisors, to present the anticipated impact of the Plan.  The Projections assume that the Plan will be implemented in accordance with its stated terms.  The Projections are based on forecasts of key economic variables and may be significantly impacted by, among other factors, oil and natural gas prices, expectations regarding future commodity prices, the level of activity of oil and natural gas exploration, development, and production globally, demand for drilling services, competition and supply of competing rigs, changes in the political environment of the countries in which the Paragon Group operates, regulatory changes, and/or a variety of other factors.  Consequently, the estimates and assumptions underlying the Projections are inherently uncertain and are subject to material business, economic, and other uncertainties.  Therefore, such Projections, estimates, and assumptions are not necessarily indicative of current values or future performance, which may be significantly less or more favorable than set forth herein.  The Projections included herein were last updated on April 28, 2017.

The Projections should be read in conjunction with the significant assumptions, qualifications, and notes set forth below.

THE DEBTORS PREPARED THE PROJECTIONS WITH THE ASSISTANCE OF THEIR ADVISORS.  THE DEBTORS DID NOT PREPARE SUCH PROJECTIONS TO COMPLY WITH THE GUIDELINES FOR PROSPECTIVE FINANCIAL STATEMENTS PUBLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND THE RULES AND REGULATIONS OF THE SEC.  EXCEPT FOR PURPOSES OF THIS DISCLOSURE STATEMENT,

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THE DEBTORS DO NOT PUBLISH PROJECTIONS OF THEIR ANTICIPATED FINANCIAL POSITION OR RESULTS OF OPERATIONS.

MOREOVER, THE PROJECTIONS CONTAIN CERTAIN STATEMENTS THAT ARE “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.  THESE STATEMENTS ARE SUBJECT TO A NUMBER OF ASSUMPTIONS, RISKS, AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE DEBTORS, INCLUDING THE IMPLEMENTATION OF THE PLAN, THE CONTINUING AVAILABILITY OF SUFFICIENT BORROWING CAPACITY OR OTHER FINANCING TO FUND OPERATIONS, ACHIEVING OPERATING EFFICIENCIES, EXISTING AND FUTURE GOVERNMENTAL REGULATIONS AND ACTIONS OF GOVERNMENTAL BODIES, INDUSTRY-SPECIFIC RISK FACTORS, AND OTHER MARKET AND COMPETITIVE CONDITIONS.  HOLDERS OF CLAIMS AND INTERESTS ARE CAUTIONED THAT THE FORWARD-LOOKING STATEMENTS SPEAK AS OF THE DATE MADE AND ARE NOT GUARANTEES OF FUTURE PERFORMANCE.  ACTUAL RESULTS OR DEVELOPMENTS MAY DIFFER MATERIALLY FROM THE EXPECTATIONS EXPRESSED OR IMPLIED IN THE FORWARD-LOOKING STATEMENTS, AND THE DEBTORS UNDERTAKE NO OBLIGATION TO UPDATE ANY SUCH STATEMENTS.

THE PROJECTIONS, WHILE PRESENTED WITH NUMERICAL SPECIFICITY, ARE NECESSARILY BASED ON A VARIETY OF ESTIMATES AND ASSUMPTIONS WHICH, THOUGH CONSIDERED REASONABLE BY THE DEBTORS, MAY NOT BE REALIZED AND ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC, INDUSTRY, REGULATORY, LEGAL, MARKET, AND FINANCIAL UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE REORGANIZED DEBTORS’ CONTROL.  THE DEBTORS CAUTION THAT NO REPRESENTATIONS CAN BE MADE OR ARE MADE AS TO THE ACCURACY OF THE PROJECTIONS OR TO THE REORGANIZED DEBTORS’ ABILITY TO ACHIEVE THE PROJECTED RESULTS.  SOME ASSUMPTIONS INEVITABLY WILL BE INCORRECT.  MOREOVER, EVENTS AND CIRCUMSTANCES OCCURRING SUBSEQUENT TO THE DATE ON WHICH THE DEBTORS PREPARED THESE PROJECTIONS MAY BE DIFFERENT FROM THOSE ASSUMED, OR, ALTERNATIVELY, MAY HAVE BEEN UNANTICIPATED, AND THUS THE OCCURRENCE OF THESE EVENTS MAY AFFECT FINANCIAL RESULTS IN A MATERIALLY ADVERSE OR MATERIALLY BENEFICIAL MANNER.  EXCEPT AS OTHERWISE PROVIDED IN THE PLAN OR THIS DISCLOSURE STATEMENT, THE DEBTORS AND REORGANIZED DEBTORS, AS APPLICABLE, DO NOT INTEND AND UNDERTAKE NO OBLIGATION TO UPDATE OR OTHERWISE REVISE THE PROJECTIONS TO REFLECT EVENTS OR CIRCUMSTANCES EXISTING OR ARISING AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.  THEREFORE, THE PROJECTIONS MAY NOT BE RELIED UPON AS A GUARANTEE OR OTHER ASSURANCE OF THE ACTUAL RESULTS THAT WILL OCCUR.  IN DECIDING WHETHER TO VOTE TO ACCEPT OR REJECT THE PLAN, HOLDERS OF CLAIMS MUST MAKE THEIR OWN DETERMINATIONS AS TO THE REASONABLENESS OF SUCH ASSUMPTIONS AND THE RELIABILITY OF THE PROJECTIONS AND SHOULD CONSULT WITH THEIR OWN ADVISORS.

The Projections should be read in conjunction with the assumptions, qualifications, and explanations set forth in this Disclosure Statement, the Plan, and the Plan Supplement, in their entirety, and the historical consolidated financial statements (including the notes and schedules thereto).(7)

(7)  Note:  Projected balance sheet does not reflect fresh-start accounting.  Balances are likely to be adjusted after emergence.

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PROJECTED INCOME STATEMENT