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Prospectus

PROSAFE SE

(a European public limited liability company registered with the Registrar of Companies and Official Receiver

of the Republic of Cyprus, with the registration number SE4)

Subsequent Offering of up to 504,000,000 Offer Shares Subscription Price: NOK 0.25 per Offer Share

Subscription Period: From 17 October 2016 to 31 October 2016 at 16:30 Oslo time Listing of 4,376,600,000 new shares issued in a private placement (the “Private Placement Shares”), offering and listing of up to 504,000,000 shares to be issued in connection with the Subsequent Offering (the "Offer Shares"), listing of 1,400,839,757 new shares issued in connection with a bond conversion ("Bond Conversion Shares"), all with a nominal value of EUR 0.001 per share, and listing of convertible bonds ("New Convertible Bonds").

Prosafe SE (the “Company”, together with its subsidiaries the “Group”) is offering up to 504,000,000 Offer Shares in the Company with a nominal value of EUR 0.001 each at a subscription price of NOK 0.25 per Offer Share (the “Subsequent Offering”). Holders of the Company's shares (the “Shares”) as of 12 July 2016, as registered in the Norwegian Securities Depository (the “VPS”) as of 14 July 2016 who are not resident in a jurisdiction where such offering would be unlawful, or would (in jurisdictions other than Norway) require any prospectus filing, registration or similar action and who did not participate in the Private Placement (the “Eligible Shareholders”) are being granted non-tradable subscription rights (the “Subscription Rights”) that, subject to applicable law, provide preferential rights to subscribe for and be allocated Offer Shares in the Subsequent Offering. Eligible Shareholders will be granted 3.56 Subscription Rights for each Share held. Each Subscription Right will give the right to subscribe for one (1) Offer Share. The subscription period commences on 17 October 2016 and expires on 31 October 2016 at 16:30 CET (the “Subscription Period”). Subscription Rights that are not used to subscribe for Offer Shares before expiry of the Subscription Period will have no value and will lapse without compensation. The Company is not taking any action to permit a public offering of the Subscription Rights or the Offer Shares in any jurisdiction outside Norway. The Offer Shares are being offered only in those jurisdictions in which, and only to those persons to whom, offers of the Offer Shares (pursuant to the exercise of Subscription Rights or otherwise) may lawfully be made. For more information regarding restrictions in relation to the Subsequent Offering pursuant to this Prospectus, please see section 14. Investing in the Company's Shares, including the Offer Shares involves certain risks. See section 2 “Risk Factors”.

Managers

ABG Sundal Collier DNB Markets Nordea Markets Pareto Securities SEB

14 October 2016

IMPORTANT INFORMATION

For the definition of certain capitalised terms used throughout this Prospectus, please see Section 16 “Definitions and Glossary of Terms” which also applies to the front page.

Readers are expressly advised that the Shares are exposed to financial and legal risk and they should therefore read this Prospectus in its entirety, in particular Section 2 “Risk Factors”. The contents of this Prospectus are not to be construed as legal, financial or tax advice. Each reader should consult his, her or its own legal adviser, independent financial adviser or tax adviser for legal, financial or tax advice.

This Prospectus has been prepared by the Company in order to provide a presentation of the Group in connection with the listing of the Private Placement Shares, Bond Conversion Shares and the offer and listing of the Offer Shares , as defined and described herein. This Prospectus has been prepared to comply with the Securities Trading Act sections 7-2 and 7-3 and related legislation and regulations, including the Commission Regulation (EC) No. 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in Prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements. This Prospectus has been prepared solely in the English language.

The information contained herein is as of the date of this Prospectus and subject to change, completion and amendment without notice. In accordance with section 7-15 of the Securities Trading Act, any new circumstance, material error or inaccuracy relating to information included in this Prospectus, which may have significance for the assessment of the Private Placement Shares, Offer Shares, Bond Conversion Shares respectively, and arises between the date of this Prospectus and before the such Shares are listed on Oslo Børs, will be presented in a supplement to this Prospectus. Publication of this Prospectus shall not create any implication that there has been no change in the Company’s affairs or that the information herein is correct as of any date subsequent to the date of this Prospectus.

All inquiries relating to this Prospectus must be directed to the Company. No other person is authorised to give information or to make any representation in connection with the listing of the Private Placement Shares, Bond Conversion Shares or the offer and listing of the Offer Shares. If any such information is given or made, it must not be relied upon as having been authorised by the Company or by any of the employees, affiliates or advisers of any of the foregoing.

No action has been or will be taken in any jurisdiction other than Norway by the Company that would permit the possession or distribution of this Prospectus, any documents relating thereto, or any amendment or supplement thereto, in any country or jurisdiction where this is unlawful or specific action for such purpose is required. The distribution of this Prospectus in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus may come are required by the Company to inform themselves about and to observe such restrictions. The Company shall not be responsible or liable for any violation of such restrictions by prospective investors. The restrictions and limitations listed and described herein are not exhaustive, and other restrictions and limitations in relation to this Prospectus that are not known or identified at the date of this Prospectus may apply in various jurisdictions. This Prospectus serves as a listing prospectus as required by applicable laws and regulations only. This Prospectus does not constitute an offer to buy, subscribe or sell any of the securities described herein, and no securities are being offered or sold pursuant to it.

The securities described herein have not been and will not be registered under the US Securities Act of 1933 as amended (the “US Securities Act”), or with any securities authority of any state of the United States. Accordingly, the securities described herein may not be offered, pledged, sold, resold, granted, delivered, allotted, taken up, or otherwise transferred, as applicable, in the United States, except in transactions that are exempt from, or in transactions not subject to, registration under the US Securities Act and in compliance with any applicable state securities laws.

This Prospectus is subject to Norwegian law, unless otherwise indicated herein. Any dispute arising in respect of this Prospectus is subject to the exclusive jurisdiction of the Norwegian courts with Oslo District Court as legal venue in the first instance.

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TABLE OF CONTENTS

1. EXECUTIVE SUMMARY ..................................................................................................................................................................... 5

2. RISK FACTORS .................................................................................................................................................................................. 14

2.1 STRATEGIC RISK .................................................................................................................................................................... 14 2.2 NON-STRATEGIC RISK ........................................................................................................................................................... 14 2.3 RISKS RELATED TO THE SHARES AND THE NEW CONVERTIBLE BONDS ................................................................. 16

3. STATEMENTS..................................................................................................................................................................................... 18

3.1 RESPONSIBILITY FOR THE PROSPECTUS .......................................................................................................................... 18 3.2 INFORMATION SOURCED FROM THIRD PARTIES ........................................................................................................... 19 3.3 NOTICE REGARDING FORWARD-LOOKING STATEMENTS ........................................................................................... 19

4. THE REFINANCING ........................................................................................................................................................................... 20

4.1 BACKGROUND ........................................................................................................................................................................ 20 4.2 THE MAIN TERMS OF THE REFINANCING ......................................................................................................................... 20 4.2.3.1. MAIN TERMS OF THE NEW CONVERTIBLE BONDS ........................................................................................................ 21 4.3 CONDITIONS FOR COMPLETION OF THE REFINANCING AND RESOLUTIONS .......................................................... 23 4.4 ADVISORS ................................................................................................................................................................................ 24

5. THE SUBSEQUENT OFFERING ........................................................................................................................................................ 26

5.1 GENERAL .................................................................................................................................................................................. 26 5.2 RESOLUTION REGARDING THE SUBSEQUENT OFFERING ............................................................................................ 26 5.3 ELIGIBLE SHAREHOLDERS AND RECORD DATE............................................................................................................. 26 5.4 OFFER SHARES AND SUBSCRIPTION RIGHTS .................................................................................................................. 26 5.5 SUBSCRIPTION PERIOD ......................................................................................................................................................... 27 5.6 SUBSCRIPTION PRICE ............................................................................................................................................................ 27 5.7 SUBSCRIPTION PROCEDURES AND SUBSCRIPTION OFFICE ......................................................................................... 27 5.8 FINANCIAL INTERMEDIARIES ............................................................................................................................................. 28 5.9 ALLOCATION ........................................................................................................................................................................... 29 5.10 PAYMENT FOR THE OFFER SHARES................................................................................................................................... 29 5.11 PUBLICATION OF INFORMATION RELATING TO THE SUBSEQUENT OFFERING ..................................................... 30 5.12 VPS REGISTRATION ............................................................................................................................................................... 30 5.13 DELIVERY AND LISTING OF THE OFFER SHARES ........................................................................................................... 30 5.14 SHARE CAPITAL FOLLOWING THE SUBSEQUENT OFFERING ...................................................................................... 30 5.15 TRANSFERABILITY OF THE OFFER SHARES .................................................................................................................... 30 5.16 EXPENSES AND NET PROCEEDS ......................................................................................................................................... 30 5.17 DILUTION ................................................................................................................................................................................. 31 5.18 SHAREHOLDERS’ RIGHTS RELATING TO THE OFFER SHARES .................................................................................... 31 5.19 INTEREST OF NATURAL AND LEGAL PERSONS .............................................................................................................. 31 5.20 MANAGERS AND ADVISOR .................................................................................................................................................. 31

6. PRESENTATION OF THE COMPANY AND ITS BUSINESS .......................................................................................................... 32

6.1 CORPORATE INFORMATION ................................................................................................................................................ 32 6.2 DESCRIPTION OF THE GROUP.............................................................................................................................................. 32 6.3 INTRODUCTION AND HISTORY ........................................................................................................................................... 33 6.4 PRINCIPAL ACTIVITIES ......................................................................................................................................................... 34 6.5 THE FLEET................................................................................................................................................................................ 35 6.6 FLEET CONTRACT STATUS .................................................................................................................................................. 43 6.7 RISK MANAGEMENT (SEE SECTION 2 FOR RISK FACTORS) ......................................................................................... 43 6.8 TREND INFORMATION .......................................................................................................................................................... 46 OUTLOOK ................................................................................................................................................................................................ 46 6.9 EMPLOYEES ............................................................................................................................................................................. 47

7. MARKET OVERVIEW........................................................................................................................................................................ 47

7.1 INTRODUCTION ...................................................................................................................................................................... 47 7.2 THE GLOBAL ACCOMMODATION MARKET ..................................................................................................................... 48

8. ORGANISATION, BOARD OF DIRECTORS AND MANAGEMENT ............................................................................................. 54

8.1 EXECUTIVE MANAGEMENT ................................................................................................................................................. 54 8.2 BOARD OF DIRECTORS ......................................................................................................................................................... 56

9. FINANCIAL INFORMATION ............................................................................................................................................................ 60

9.1 ACCOUNTING PRINCIPLES ................................................................................................................................................... 60 9.2 HISTORICAL FINANCIAL ACCOUNTS ................................................................................................................................ 60 9.3 OPERATING AND FINANCIAL REVIEW .............................................................................................................................. 63 9.4 INVESTMENTS ......................................................................................................................................................................... 68 9.5 WORKING CAPITAL ............................................................................................................................................................... 69 9.6 CAPITALISATION AND INDEBTEDNESS ............................................................................................................................ 69 9.7 SIGNIFICANT CHANGES AFTER 30 JUNE 2016 .................................................................................................................. 73 9.8 THE COMPANY'S AUDITOR .................................................................................................................................................. 73 9.9 PROPERTY, PLANTS AND EQUIPMENT .............................................................................................................................. 73 9.10 RELATED PARTY TRANSACTIONS ..................................................................................................................................... 73

10. SHARES AND SHARE CAPITAL ...................................................................................................................................................... 73

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10.1 SHARE CAPITAL AND SHARES ............................................................................................................................................ 73 10.2 HISTORICAL DEVELOPMENT IN SHARE CAPITAL AND NUMBER OF SHARES ......................................................... 74 10.3 BOARD AUTHORISATION TO ISSUE SHARES ................................................................................................................... 74 10.4 BOARD AUTHORISATION TO REPURCHASE SHARES .................................................................................................... 74 10.5 OPTIONS AND WARRANTS ................................................................................................................................................... 74 10.6 OWN SHARES .......................................................................................................................................................................... 74 10.7 OWNERSHIP STRUCTURE ..................................................................................................................................................... 74 10.8 LISTING, SHARE REGISTRAR AND SECURITIES NUMBER ............................................................................................. 75 10.9 DIVIDEND ................................................................................................................................................................................. 75 10.10 SHAREHOLDER AGREEMENTS ............................................................................................................................................ 75

11. SHAREHOLDER MATTERS AND COMPANY AND SECURITIES LAW ..................................................................................... 75

11.1 SHAREHOLDERS RIGHTS ...................................................................................................................................................... 75 11.2 ADDITIONAL RIGHTS OF SHAREHOLDERS ...................................................................................................................... 76 11.3 LIMITATIONS ON THE RIGHT TO OWN AND TRANSFER SHARES ............................................................................... 77 11.4 GENERAL MEETINGS ............................................................................................................................................................. 77 11.5 ALTERATION OF CAPITAL.................................................................................................................................................... 77 11.6 PURCHASE OF OWN SHARES AND REDEMPTION ........................................................................................................... 78 11.7 VOTING RIGHTS ...................................................................................................................................................................... 78 11.8 PRE-EMPTION RIGHTS ........................................................................................................................................................... 79 11.9 REGULATION OF DIVIDENDS .............................................................................................................................................. 79 11.10 LIABILITY OF DIRECTORS .................................................................................................................................................... 80 11.11 DISTRIBUTION OF ASSETS ON LIQUIDATION .................................................................................................................. 80 11.12 SUMMARY OF CERTAIN PROVISIONS OF THE COMPANY’S CONSTITUTIONAL DOCUMENTS............................. 80 11.13 CYPRUS LAW DISCLOSURE OBLIGATIONS ...................................................................................................................... 81 11.14 APPLICABLE TAKEOVER BID REGULATIONS .................................................................................................................. 81 11.15 APPLICABLE SQUEEZE OUT AND SELL OUT REGULATIONS ....................................................................................... 82

12. TAXATION .......................................................................................................................................................................................... 84

12.1 CYPRUS TAXATION ............................................................................................................................................................... 84 12.2 NORWEGIAN TAXATION; OVERVIEW ............................................................................................................................... 90

13. LEGAL MATTERS .............................................................................................................................................................................. 92

13.1 DISPUTES – ACTUAL AND POTENTIAL DISPUTES .......................................................................................................... 92 14. SELLING AND TRANSFER RESTRICTIONS .................................................................................................................................. 93

14.1 GENERAL .................................................................................................................................................................................. 93 14.2 UNITED STATES ...................................................................................................................................................................... 94 14.3 EEA SELLING RESTRICTIONS .............................................................................................................................................. 95 14.4 NOTICE TO AUSTRALIAN ELIGIBLE SHAREHOLDERS ................................................................................................... 96 14.5 NOTICE TO CANADIAN ELIGIBLE SHAREHOLDERS ....................................................................................................... 96 14.6 NOTICE TO HONG KONG ELIGIBLE SHAREHOLDERS .................................................................................................... 96 14.7 NOTICE TO JAPANESE ELIGIBLE SHAREHOLDERS ......................................................................................................... 97 14.8 NOTICE TO SWISS ELIGIBLE SHAREHOLDERS ................................................................................................................ 97

15. ADDITIONAL INFORMATION ......................................................................................................................................................... 97

15.1 DOCUMENTS ON DISPLAY ................................................................................................................................................... 97 15.2 INCORPORATION BY REFERENCE ...................................................................................................................................... 97

16. DEFINITIONS AND GLOSSARY OF TERMS .................................................................................................................................. 99

APPENDIX 1 – SUBSCRIPTION FORM APPENDIX 2 – BOND AGREEMENT

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1. EXECUTIVE SUMMARY

Summaries are made up of disclosure requirements known as “Elements”. These Elements are numbered in Sections A– E (A.1 – E.7) below. This summary contains all the Elements required to be included in a summary for this type of securities and the Company. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of securities and Company, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of “not applicable”. Section A – Introduction and Warnings A.1 Warning This summary should be read as introduction to this Prospectus;

any decision to invest in the securities should be based on consideration of this Prospectus as a whole by the investor;

where a claim relating to the information contained in this Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating this Prospectus before the legal proceedings are initiated; and civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such securities.

A.2 Consent to use of prospectus by financial intermediaries

Not applicable. The Prospectus will not be used for subsequent resale or final placement by financial intermediaries.

Section B - Company B.1 Legal and

commercial name The legal and commercial name of the Company is Prosafe SE

B.2 Domicile and legal form, legislation and country of incorporation

The Company is a European public limited liability company registered with the Registrar of Companies and Official Receiver of the Republic of Cyprus, with the registration number SE4.

B.3 Nature of current operations, principal activities /products and markets

The Group owns 10 semi-submersible accommodation vessels, one Tender support vessel (TSV) and has one semi-submersible accommodation vessel under construction. Safe Britannia, Jasminia and Safe Hibernia have recently been sold for scrap/recycling in the US. As of September 2016, five vessels are in operation, five vessels are off-hire and/or stacked, one vessel (Safe Notos) is in transit to Brazil and one vessel is at the yard (Safe Eurus). Accommodation vessels are used when there is a need for additional accommodation, engineering, construction or storage capacity offshore. Typically, these vessels will be utilised in connection with installation and commissioning of new facilities, upgrades, modifications and maintenance of existing installations, hook-ups of satellite fields to existing infrastructure, and decommissioning and removal of installations. Safe Scandinavia as a TSV is supporting drilling operations on Oseberg Øst by providing mud pumping, mud mixing and storage, cuttings and slop handling and extra offices and accommodation. The drilling campaign at Oseberg Øst, which could not have been carried out without a support vessel like Safe Scandinavia, is an important measure towards increasing recovery rates and extending the lifetime of Oseberg Øst. The Group's vessels have accommodation capacity (i.e. max number of beds) for 306-780 people depending on the type of vessel and offer high quality welfare and catering facilities, storage, workshops, offices, medical services,

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deck cranes and lifesaving and fire fighting equipment. The vessels are positioned alongside the host installation and are connected by means of a telescopic gangway so that personnel can walk to work. The Group has extensive experience from operating gangway connected to fixed installations, FPSOs, TLPs, Semis and Spars. The Group’s track record comprises operations offshore including Norway, UK, Denmark, Brazil, Tunisia, West Africa, North-west and South Australia, the Philippines, Russia, USA and the Gulf of Mexico. The Group's activities fall within the latter part of an oil field’s life cycle. The majority of the Group's operations are related to maintenance and modification of installations on fields already in production, while some activity is also related to commissioning and decommissioning.

B.4a Recent trends The accommodation support segment is late cyclical by nature. Historically, more than three quarters of the work has been related to producing fields, whereas the remainder has been related to hook-up and commissioning of new fields. Accommodation support vessels are also used during decommissioning of offshore installations. The supply side is seeing significant growth in size during the period from 2012 to 2016 with the entry into the market of a number of new semi-submersible accommodation support vessels. However the growth is expected to be lower than earlier anticipated as a result of the extended down-cycle which may lead to both scrapping and delays or even cancellations of new builds. 2015 saw a continued slow-down in contracting activity and the gross value of charter contracts, including clients’ extension options, was reduced by approximately 13 % to USD 1,595 million (USD 1,843 million). The industry has seen deferral of several projects, as well as focus on cash preservation by way of contract renegotiations and contract cancellations. As all providers of oil services are dependent on oil companies’ cash flow, reductions of spending plans have led to a substantial decrease in demand for oilfield services, including accommodation support vessels. This has increasingly been evident in all geographical markets. Despite the current down-turn and the supply side growth, the longer term prospects are promising as it is expected that field life extensions continue through enhanced oil recovery efforts. Further, in the years ahead new fields will come on stream in parallel with decommissioning of old platforms gradually becoming an interesting source of demand. In Mexico, the Group's ultimate client Pemex has been cutting spending in order to adjust its budget to an oil price of USD 25 per barrel. This development has considerably affected the Group's operations in this region. Contracts for vessels operating in Mexico were either not being renewed or were cancelled or suspended, which means that currently the Group does not have any vessels operating in Mexico. Future demand might result from new fields being developed in deeper waters offshore Mexico longer-term or from maintenance and construction medium-term. The near and medium term outlook is also uncertain in Brazil. Even though accommodation support vessels are mostly used for safety and maintenance purposes on fields that are already producing, the financial situation of Petrobras has inevitably resulted in reduced activity and as a result cancellation

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or renegotiation by Petrobras of contracts to preserve liquidity. The longer term outlook is, however, expected to present further opportunities. The general down turn in the market combined with in particular the non-extension of contracts in Mexico has led to reduced fleet utilisation and consequently reduced charter revenues for the Group. Total order backlog as of 31 December 2015 amounted to USD 997 million of which USD 598 million related to firm contracts and USD 399 million related to options. As of end 2015, secured utilisation for 2016 was 37%. For 2017 and 2018, secured utilisation was 19% and 16%, respectively. Market outlook remains uncertain in the near term, and although there are a number of prospects, 2017 is expected to be the low point in activity level. In general, the company sees the demand returning more to the traditional demand related to maintenance and modification projects with shorter lead times compared to hook-up projects. In 2016-17, approximately 40% of the market was related to maintenance and modifications and about 60% related to hook-up and commissioning work. The Company expects a slowdown of work relating to hook-ups in 2018-2020 as a result of few decisions being made in respect of development of new fields in 2015-2017. However the Company expects to see an improvement from 2021, as more plans for development and operation (PDO) are expected going forward. In general, in the coming years the Company anticipates the demand split reverting to that prior to 2015, when maintenance and modification work accounted generally to approximately 75% of the market and hook-up and commissioning work was approximately 25% of the market. Cost reductions in the E&P sector are expected to contribute to more projects becoming economically viable. Combined with continued focus on asset integrity and maintenance on offshore installations, the Company expects a market recovery from 2018 onwards. The Group has scrapped three vessels and it is likely that other suppliers’ vessels will be scrapped and/or exit the high-end market of the North Sea. As a consequence of this, the supply-demand environment is expected to become more balanced by 2020. With a high quality and versatile fleet and an unmatched operational track record in respect of accommodation operations worldwide, the Group should be well placed in this competitive landscape.

B.5 The Group The Company is the parent company of the Group and directly or indirectly owns 100 % of the shares in its subsidiaries, which own and operate the vessels. The parent company provides certain Group functions such as legal, insurance, accounting and internal audit.

B.6 Interests in the Company's capital and/or voting rights

As of the date of this Prospectus, as follows from the Company's shareholder register in the VPS, the following shareholders hold a notifiable ownership interest (i.e. over 5%) as of the date of the Prospectus:

Name of shareholder

Ordinary Shares

Class A Shares No. of Shares %

NORTH SEA STRATEGIC INVESTMENTS

47,940,903 1,500,000,000 1,547,940,903 25.6%

STATE STREET BANK AND TRUST

47,069,070 1,213,200,000 1,260,269,070 20.9%

* Ownership percentage of total Shares (i.e. both Class A Shares and Ordinary Shares)

Furthermore, pursuant to disclosures of large shareholdings to the market, the Company is aware that funds managed by Pareto Asset Management AS and

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DNB Asset Management AS holds in aggregate 5.142% and 5.27% of the total Shares in the Company.

B.7 Selected historical key financial information

(Figures in USD million)

Q2 16 Q2 15 6M 16 6M 15 2015 2014 2013

Operating revenues 115.4 92.5 218.4

216.7 474.7 548.7 523.5

Operating expenses (53.8) (51.0) (111.5)

(102.8) (211.8) (236.1) (216.9)

Operating profit before depreciation and impairment 61.6 41.5 106.9 113.9 262.9 312.6 306.6 Depreciation (29.1) (18.7) (52.5) (35.7) (86.5) (64.3) (61.5) Impairment 0.0 0.0 0.0 0.0 (145.6) 0.0 0.0 Operating profit

32.5 22.8 54.4 78.2 30.8 248.3 245.1

Interest income 0.1 0.1 0.1 0.1 0.2 0.3 1.3 Interest expenses (18.6) (12.8) (38.5) (23.0) (41.6) (37.3) (34.2) Other financial items (7.9) 5.7 (8.3) (10.2) (29.5) (20.0) (8.5) Net financial items (26.4) (7.0) (46.7)

(33.1) (70.9) (57.0) (41.4)

Profit/(Loss) before taxes 6.1 15.8 7.7

45.1

(40.1) 191.3 203.7

Taxes (0.9) (3.6) (4.3) (5.9) (10.5) (12.5) (4.6) Net (loss)/profit 5.2 12.2 3.4

39.2 (50.6) 178.8 199.1

EPS 0.02 0.05 0.01 0.17 (0.21) 0.76 0.85 Diluted EPS 0.02 0.05 0.01 0.17 (0.21) 0.76 0.85

Balance Sheet (Figures in USD million) 30.06.16 31.12.15 30.06.15 31.12.14 31.12.13

Goodwill 226.7 226.7 226.7 226.7 226.7

Vessels 1 559.0 1 578.6 1 611.5 1 027.3 946.9

New builds 654.9 228.5 211.1 311.8 248.9

Other non-current assets 4.3 4.9 6.0 5.7 4.9

Total non-current assets 2 444.9 2 038.7 2 055.3 1 571.5 1 427.4 Cash and deposits 68.2 57.1 94.9 122.4 113.4

Other current assets 86.6 91.4 91.5 122.9 79.1

Total current assets 154.8 148.5 186.4 245.3 192.5

Total assets 2 599.7 2 187.2 2 241.7 1 816.8 1 619.9

Share capital 72.1 72.1 65.9 65.9 65.9

Other equity 606.4 643.1 694.7 682.6 673.8

Total equity 678.5 715.2 760.6 748.5 739.7 Interest-free long-term liabilities 98.4 58.9 59.4 55.9 25.1

Interest-bearing long-term debt 1 520.7 1 107.5 1 185.6 830.1 779.6

Total long-term liabilities 1 619.1 1 166.4 1 245.0 886.0 804.7

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Other interest-free current liabilities 106.1 166.1 203.1 182.3 75.5

Current portion of long-term debt 196.0 139.5 33.0 0.0 0.0

Total current liabilities 302.1 305.6 236.1 182.3 75.5

Total equity and liabilities 2 599.7 2 187.2 2 241.7 1 816.8 1 619.9

B.8 Selected key pro forma financial information

Not applicable. The Prospectus does not contain any pro forma financial information.

B.9 Profit forecast or estimate

Not applicable. The Prospectus does not contain any profit forecasts or estimates.

B.10 Audit report qualifications

Not applicable. The audit reports do not include any qualifications.

B.11 Working capital The Board is of the opinion that the working capital of the Company is sufficient for the Group's present requirements in a twelve months perspective as from the date of this Prospectus.

B.17 Credit ratings Not applicable. No credit ratings have been assigned to the Company or the New Convertible Bonds at the request of or with the cooperation of the issuer in the rating process.

Section C - Securities C.1 Type and class of

securities The Ordinary Shares of the Company in the issued share capital are registered with ISIN CY0100470919. New shares to be issued as Ordinary Shares will be issued and registered with ISIN CY0100470919. New Shares issued as Class A Shares are registered with ISIN CY0106610914.

Please see element C.3 and C.4 for information on the interim separate class of Shares.

C.2 Currency of the securities issue

Norwegian kroner (NOK)

C.3 Number of shares in issue and nominal value

The Company’s issued share capital consists of 6,049,010,116Shares, of which 259,570,359 are Ordinary Shares of nominal value EUR 0.001 and 5,789,439,757 are Class A Shares of nominal value EUR 0.001.

As resolved by the extraordinary general meeting of the Company held on 23 August 2016, the Company has carried out a share capital reduction pursuant to which the nominal value of the issued Ordinary Shares was reduced from Euro 0.25 to Euro 0.001 after which the Class A Shares will, following the publication of this Prospectus, be converted into Ordinary Shares.

C.4 Rights attaching to the securities

The Shares have voting rights, the right to receipt of dividend when declared and a right to share in the return of capital available for distribution in a winding up of the Company. The Class A Shares have the same rights as the Ordinary Shares except that the Class A Shares are automatically convertible into Ordinary Shares following the completion of the Capital Reduction and publication of this Prospectus. Each Share gives the right to one vote at the Company's general meeting.

C.5 Transferability The Shares of the Company are freely transferable subject to local regulatory transfer restrictions.

The New Convertible Bonds are freely transferable

C.6 Admission to trading

The Ordinary Shares of the Company are listed on the Oslo Stock Exchange. Pending completion of the Capital Reduction and publication of this Prospectus, the Company has registered the Class A Shares on the N-OTC

C.7 Dividend policy Prosafe’s aim is that its shareholders receive a competitive return on their Shares through a combination of share price appreciation and a direct return in the form of dividends. As part of the agreed amendments to its credit facilities, Prosafe has agreed that

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it will not issue any dividends, bond or complete any equity buy-back from 31 December 2015 unless all voluntary skipped amortisations have been prepaid or cancelled and a 12-month financial forecast has been provided which confirms compliance with original financial covenants (except for the equity ratio which must be a minimum of 35 %).

C.8 Rights attaching to the New Convertible Bonds

The New Convertible Bonds constitute subordinated unsecured obligations of the Company. The New Convertible Bonds are subordinated to the senior debt of the Company, however the New Convertible Bonds shall rank pari passu with similarly subordinated debt of the Company (save for such claims which are preferred by bankruptcy, insolvency, liquidation or other similar laws of general application), shall rank ahead of all amounts payable in respect of the share capital of the Company or other capital of the Company subordinated in rank to the New Convertible Bonds. Each Bondholder has the right to convert each New Convertible Bond into Shares at the Conversion Price in effect on the relevant Conversion Date. Furthermore, the bondholders shall have preferential allocation of common equity in line with holders of common equity. The New Convertible Bonds are convertible at the Company's option at the following times: • Maturity • Formal insolvency proceedings of the Company or one or both of its

material asset owning subsidiaries • Upon a material refinancing of the majority of the financial indebtedness of

the Group in connection with actual or potential financial difficulties.

C.9 Terms of the New Convertible Bonds

Please see Element C.8 for the rights attached to the New Convertible Bonds.

Conversion price……………………….

NOK 0.25

Conversion Date Date falling ten (10) Business Days after the Paying Agent has received an exercise notice pursuant to clause 13.4 of the Bond Agreement

Coupon rate………………………

Zero coupon

Issue date………………………

14 September 2016

Maturity date ...................... 23 August 2021

Interest payment……… The Company shall not pay any interest on the New Convertible Bonds

Bondholders’ representatives ....................

Nordic Trustee ASA.

C.10 Derivative component in the interest payments on New Convertible

Not applicable. There are no interest payments on the New Convertible Bonds.

C.11 Admission to trading of the New Convertible Bonds

The Company intends to apply for the New Convertible Bonds to be admitted to trading on the Oslo Stock Exchange.

| Section D - Risks

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D.1 Key risks specific to the Company or its industry

• Demand and supply in the market in which the Company operates is

subject to cyclical movements in both the global economy and in regional economies. These movements may be driven by a number of factors such as political processes, changing trading patterns, changes in productivity, technological shifts, and monetary imbalances.

• Demand for the Company's services may be affected negatively by oil companies’ earnings. Changes in the oil price affect oil companies’ cash flows adversely impacting their willingness to invest in exploration and production. If the oil price drops significantly, oil companies may reduce spending, which in turn may lead to lower demand for accommodation vessels. Furthermore, in the long-term demand will depend on the oil companies’ replacement ratio. If oil companies fail to replace reserves, ultimately leading to lower production volumes, demand for accommodation vessels may also be reduced. The Company's customer base is fairly well diversified, although certain customers may, to a varying degree over time, make up substantial parts of the contract backlog. In line with industry practice, a contract normally contains early cancellation provisions for the customer in specific circumstances. Subject to termination not being due to a breach or negligence on the part of the Company, the effect on results in such cases will normally be wholly or partly offset by a financial settlement in the Group’s favour.

• Any significant increases in the fleet of available accommodation vessels and/or reduction of oil prices and consequent reduction of demand may affect utilization rates and/or day rates negatively, potentially adversely impacting the Company's financial results and cash flows.

• As the Company is partly financed by interest-bearing debt it is subject to credit risk. All its loans have a defined maturity date and there will always be a risk that debt cannot be fully refinanced. This could relate to Company specific factors, such as excessive leverage, falling asset values or low earnings/cash flow or it could have to do with macro-economic factors and the general development in the global credit markets. Failure to refinance debt may have a material adverse impact on the Company’s financial position. The Company's loan agreements contain various covenants. Breach of one or more of the covenants may lead to higher cost of debt or, ultimately, mandatory pre-payment of loans.

D.3 Key risks specific to the securities

• If there proves to be no active trading market for the Shares, the price of the Shares may be more volatile and it may be more difficult to complete a buy or sell order for Shares

• The trading price of the Shares could fluctuate significantly in

response to a number of factors.

• Shareholders may be diluted if they are unable to participate in future offering

• No liquid market currently exists for trading of the New Convertible Bonds and it is not possible to predict whether, if the New Convertible Bonds are listed on Oslo Børs, this may provide increased liquidity.

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• Bondholders will bear the risk of fluctuation in the price of the Company's Shares

• The New Convertible Bonds are subordinated to all senior indebtedness of the Company.

Section E - Offer E.1 Proceeds and

expenses The gross proceeds from the Private Placement will amount to NOK 1,094 million with estimated expenses amounting to approximately NOK 40 million. Consequently, the net proceeds will be approximately NOK 1,054 million. The gross proceeds from the Subsequent Offering will amount to up to NOK 126 million with estimated expenses amounting to approximately NOK 5 million. Consequently, the net proceeds will, if the Subsequent Offering is fully subscribed, be approximately NOK 121 million.

E.2a Reasons for the issuance of new shares and use of proceeds

The negative development in the offshore oil service markets in 2015/16, coupled with an overspend and further delay in the start-up of the Safe Scandinavia Tender Support Vessel (“TSV”), suspension of additional Mexico contracts (including cancellation of a letter of intent for a new 4.5 year contract of ca USD 145 million for Safe Notos) and a consequent deterioration of the Group's contract backlog, as well as the unavailability of the bond market as a refinancing source, led to a situation where the Group's financial covenants would have been under pressure. The Company therefore engaged legal and financial advisors and initiated a review of the Company’s strategic options and funding situation.

Following discussions with key stakeholders, including secured bank lenders, major bondholders and shareholders, the Company announced on 7 July 2016, the terms of a comprehensive refinancing (the "Refinancing") for the purpose of improving the Company´s financial situation. The Refinancing comprised a solution involving new capital, amortization relief and covenant ease from senior lenders and conversion (equitization) of bond debt. The Refinancing will provide greater financial flexibility for the Company throughout the period until the end of 2020 including a solid liquidity buffer to weather a prolonged market downturn. The combined effect of the Refinancing is expected to improve the Company's liquidity by approximately USD 478 million over a five year period, and reduce the net interest bearing debt by approximately USD 395 million through 100% conversion of senior unsecured bonds, in addition to the contribution of new equity. The Refinancing will result in a substantial dilution of existing shareholders not participating in the Private Placement, and the contemplated Subsequent Offering will not fully compensate the dilutive effect for the remaining shareholders. Having considered available alternatives, the Board was however of the opinion that such deviation from the equal treatment principle was fair and necessary, given the challenging financial situation of the Company, the prevailing market conditions, the agreed terms of the Refinancing and the Company's need for certainty and flexibility when seeking to secure new equity. The proceeds from the Private Placement will be used to strengthen the Company's balance sheet, bond redemption and liquidity position as well as for general corporate purposes. USD 40 million of the proceeds from the Private Placement will be used to buy-back part of the Company's bonds.

E.2b Reasons for the issuance of new shares and use of proceeds from the New Convertible

Please see element E.2a

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Bonds

E.3 Terms and conditions

The issuing of the Private Placement Shares, Bond Conversion Shares and Offer Shares were conditional on valid corporate resolutions being made to issue such Shares.

E.4 Interests material to the issue

The Managers and their affiliates have provided from time to time, and may provide in the future, investment and commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may have received and may continue to receive customary fees and commissions. The Managers, its employees and any affiliate may currently own existing Shares in the Company. The Managers do not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligation to do so. The Managers will receive a success fee of a fixed percentage of the gross proceeds raised in the Subsequent Offering and, as such, have an interest in the Subsequent Offering.

E.5 Selling shareholders and lock-up

Not applicable. All Offer Shares will be newly issued Shares and no subscriber will be subject to lock-up.

E.6 Dilution As a consequence of the issuance of the Private Placement Shares and the Bond Conversion Shares, the shareholders who did not participate were diluted by approximately 96% (this does not take into account any Shares under the New Convertible Bond). The immediate dilution of ownership for shareholders not participating in the Subsequent Offering will be approximately 8% (given full subscription).

E.7 Estimated expenses charged to investor

Not applicable. No expenses will be charged to the investor by the Company.

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2. RISK FACTORS

Investing in the Company involves inherent risks. Prospective investors should consider carefully, among other things, all of the information set forth in this Prospectus, and in particular, the specific risk factors set out below. An investment in the Shares is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of the investment. If any of the risks described below materialises, individually or together with other circumstances, they may have a material adverse effect on the Company’s business, operating results and financial condition, which may cause a decline in the value and trading price of the Shares that could result in a loss of all or part of any investment in the Shares. The order in which the risks are presented below is not intended to provide an indication of the likelihood of their occurrence nor of their severity or significance.

2.1 STRATEGIC RISK Unlike risks related to assets, operations, projects, legal compliance/legal and finance, where the Company seeks to reduce exposure as far as reasonably and practically possible, strategic risk is the only category that the Group actively accepts in order to generate a return for its shareholders. The Company will create shareholder value by allocating capital and resources to the commercial opportunities that yield the best return in relation to the risks involved within its specified strategic direction.

2.1.1 Macro risk Demand and supply in the market in which the Company operates is subject to cyclical movements in both the global economy and in regional economies. These movements may be driven by a number of factors such as political processes, changing trading patterns, changes in productivity, technological shifts, and monetary imbalances.

2.1.2 Demand risk (clients) Demand for the Company's services may be affected negatively by oil companies’ earnings. Changes in the oil price affect oil companies’ cash flows adversely impacting their willingness to invest in exploration and production. If the oil price drops significantly, oil companies may reduce spending, which in turn may lead to lower demand for accommodation vessels. Furthermore, in the long-term demand will depend on the oil companies’ replacement ratio. If oil companies fail to replace reserves, ultimately leading to lower production volumes, demand for accommodation vessels may also be reduced. The Company's customer base is fairly well diversified, although certain customers may, to a varying degree over time, make up substantial parts of the contract backlog. In line with industry practice, a contract normally contains early cancellation provisions for the customer in specific circumstances. Subject to termination not being due to a breach or negligence on the part of the Company, the effect on results in such cases will normally be wholly or partly offset by a financial settlement in the Group’s favour.

2.1.3 Supply risk (competition) Any significant increases in the fleet of available accommodation vessels and/or reduction of oil prices and consequent reduction of demand may affect utilization rates and/or day rates negatively, potentially adversely impacting the Company's financial results and cash flows.

2.2 NON-STRATEGIC RISK

2.2.1 Asset and other liabilities risk Operational risks may result in injury to personnel, damage or loss of a vessel, property, equipment and accidental discharges/ emissions to the natural environment. To mitigate these risks, most of the Group's assets, are insured at the estimated replacement cost taking into consideration applicable industry standards, regulations and all requirements set out in any finance facility documentation. Insurance is taken out with reputable international insurance companies and in accordance with good market practice. The Company's insurances cover its assets (both operated and non-operated vessels), third party liabilities, pollution and environmental risks, cargo and non-marine risks. However, insurance will not always provide full coverage of all risks resulting from operations and there can be no assurance that all risks can be adequately insured against all potential liabilities or that any insured sum will be paid which in turn may adversely affect the Company's financial position.

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2.2.2 Operational risk In most of the Group’s contracts the day rate received will be subject to gangway uptime. Consequently, any operating failure leading to down time on the gangway connection may affect the Company's results negatively. Such downtime may be caused by human errors, breakdown of equipment or an otherwise difficult operating environment.

2.2.3 Health Safety and Environment risk The work processes onboard the Group’s vessels can be complex and may have to be undertaken in a potentially difficult environment. Consequently, there is a risk that personnel may be injured and/or equipment damaged. Furthermore, the business entails risk of accidental discharges/emissions to the natural environment.

2.2.4 Key personnel and crew risk The Company is operating in a complex industry. Although measures are taken to reduce dependency on any individual employee, the Company may in certain situations be dependent on the competency and experience of key personnel. Consequently, any such person leaving the Company may affect processes and operations negatively. Having a competent and experienced crew on the vessels is vital for achieving high operational standards. The competition for such key personnel is intense, and the loss of the services of one or more of these individuals without adequate replacements or the inability to attract new qualified personnel at a reasonable cost could have a material adverse effect. If increased competition for qualified personnel were to intensify in the future, the Company may experience increases in costs or limits on operations.

2.2.5 Hazard risk Given the nature of the Company's business, any operating failure or loss of asset integrity may cause serious accidents that could lead to critical damage and, ultimately, a total loss of the asset. This could have a severe impact on the Company's financial position.

2.2.6 Project execution and construction risk The Company will from time to time undertake larger projects related to new builds or upgrades of existing vessels. Such projects carry considerable risks related to cost overruns and delayed completion that may have a material adverse impact on the Company’s financial position.

2.2.7 Technical and unexpected repair costs risk Technical risk involves future demand for certain technical specifications and a supplier’s or yard’s ability to deliver in line with the specifications required. These future demands may have significant impact on the financial statements of the Group. The timing and costs of unexpected repairs on the Company’s vessels are difficult to predict with certainty and may be substantial. Many of these expenses, such as special survey and certain repairs for normal wear and tear are typically not covered by insurance. Large repair expenses could decrease the Company’s profits. In addition, repair time may result in a loss of revenue for the Company.

2.2.8 Regulatory risk The Company is involved in an industry that is highly regulated by different international and national Governmental bodies. Non-compliance with relevant regulations may lead to suspended operations, prosecutions and/or the imposition of fines which in turn may cause financial losses. Furthermore, in order to comply with changes to regulations the Company may, from time to time, incur substantial capital and operating costs. Such changes to regulations may also affect the Company's vessels. This could adversely impact the commercial and strategic position of the Company and affect its ability to expand or even maintain its current market position.

2.2.9 Legal proceedings and contractual disputes risk In the course of its activities, the Company may become involved in contractual and other disputes and legal proceedings where the final outcome is subject to uncertainties. Such proceedings may cause the Company to incur unforeseen expenses and could occupy a significant amount of management’s time and attention. Depending on the outcome, such proceedings may have a negative impact on the financial position and operations of the Company. For a description of current material disputes, please refer to section 13.1.

2.2.10 Interest rate risk The Company's fleet is partly financed by interest-bearing debt. Although the Company seeks to mitigate such risk by different hedging arrangements, increases in interest rates may have a material adverse impact on the Company's earnings and cash flows.

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2.2.11 Currency risk The Company is exposed to several currencies. The bulk of revenues are in United States Dollars (USD) and vessels owned by the Company are valued and financed in USD. Accounts are therefore compiled in USD. During certain periods, however, depending on the country of operation, the Company will have contracts that yield GBP, NOK and BRL revenues, with a consequent reduction in net currency exposure. Operating expenses are mainly denominated in USD, GBP, NOK, SGD and BRL, but depending on the country of operation and nationality of the crew, operating expenses can also be in other currencies, such as EUR and SEK. Fluctuations in the mentioned currencies versus the USD may have significant impact on the financial statements of the Company.

2.2.12 Credit risk As the Company is partly financed by interest-bearing debt it is subject to credit risk. All its loans have a defined maturity date and there will always be a risk that debt cannot be fully refinanced. This could relate to Company specific factors, such as excessive leverage, falling asset values or low earnings/cash flow or it could have to do with macro-economic factors and the general development in the global credit markets. Failure to refinance debt may have a material adverse impact on the Company’s financial position. The Company's loan agreements contain various covenants. Breach of one or more of the covenants may lead to higher cost of debt or, ultimately, mandatory pre-payment of loans.

2.2.13 Counter-party risk The Company's clients are mostly reputable national oil companies, super majors, majors and larger independent oil companies. However, if a client should default on any obligation it could have a material negative impact on the Company's earnings and cash flows.

2.3 RISKS RELATED TO THE SHARES AND THE NEW CONVERTIBLE BONDS

2.3.1 There may not be a liquid market for the Shares Active, liquid trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors. If there proves to be no active trading market for the Shares, the price of the Shares may be more volatile and it may be more difficult to complete a buy or sell order for Shares. Even if there is an active public trading market, there may be little or no market demand for the Shares, making it difficult or impossible to resell the shares, which would have an adverse effect on the resale price, if any, of the Shares. Furthermore, there can be no assurance that the Company will maintain its listing on Oslo Børs. A delisting from Oslo Børs would make it more difficult for shareholders to sell their Shares and could have a negative impact on the market value of the Shares.

2.3.2 Volatility of the share price The trading price of the Shares could fluctuate significantly, inter alia, in response to quarterly variations in operating results, general economic outlook, adverse business developments, interest rate changes, changes in financial estimates by securities analysts, matters announced in respect of competitors or changes to the regulatory environment in which the Company operates. Market conditions may affect the Shares regardless of the Company’s operating performance or the overall performance in the industry. Accordingly, the market price of the Shares may not reflect the underlying value of the Group’s net assets, and the price at which investors may dispose of their Shares at any point in time may be influenced by a number of factors, only some of which may pertain to the Company, while others of which may be outside the Company’s control. The market price of the Shares could decline due to sales of a large number of Shares in the Company in the market or the perception that such sales could occur. Such sales could also make it more difficult for the Company to offer equity securities in the future at a time and at a price that are deemed appropriate.

2.3.3 Shareholders may be diluted if they are unable to participate in future offerings The development of the Group’s business may, inter alia, depend upon the Company’s ability to obtain equity financing. Unless otherwise dis-applied by resolution of the general meeting, shareholders in Cypriot public companies such as the Company have statutory pre-emptive rights proportionate to the aggregate amount of the shares they hold with respect to new shares issued by the Company for cash. Shareholders that do not exercise granted pre-emptive rights may be diluted. Furthermore, shareholders may be unable to participate in future offerings, where the shareholders pre-emptive rights have been dis-applied in order to raise equity on short notice in the investor market, or for reasons relating to foreign securities laws or other factors, and as such have their shareholdings diluted.

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2.3.4 Pre-emptive rights may not be available to U.S. holders and certain other foreign holders of the Shares

Under Cyprus law, prior to the Company’s issuance of any new Shares for consideration in cash, the Company must offer holders of the Company’s then issued Shares pre-emptive rights to subscribe and pay for a sufficient number of Shares to maintain their existing ownership percentages, unless these rights are waived at a general meeting of the Company’s shareholders. U.S. holders of the Shares may not be able to trade or exercise pre-emptive rights for new Shares unless a registration statement under the U.S. Securities Act is effective with respect to such rights or an exemption from the registration requirements of the U.S. Securities Act is available. The Company is not a registrant under the U.S. securities laws. If U.S. holders of the Shares are not able to trade or exercise pre-emptive rights granted in respect of their Shares in any rights offering by the Company, then they may not receive the economic benefit of such rights. In addition, their proportional ownership interests in the Company will be diluted. Similar restrictions may apply to other foreign holders of Shares, including, but not limited to shareholders in Australia, Canada, Hong Kong, Japan and Switzerland.

2.3.5 Holders of Shares that are registered in a nominee account may not be able to exercise voting rights as readily as shareholders whose Shares are registered in their own names with the Norwegian Central Securities Depository

Beneficial owners of the Company’s Shares that are registered in a nominee account (e.g., through brokers, dealers or other third parties) may not be able to vote for such Shares unless their ownership is re-registered in their names with the VPS prior to the Company’s general meetings. The Company cannot guarantee that beneficial owners of the Company’s Shares will receive the notice for a general meeting in time to instruct their nominees to either effect a re-registration of their Shares or otherwise vote for their Shares in the manner desired by such beneficial owners.

2.3.6 The transfer of Shares is subject to restrictions under the securities laws of the United States and other jurisdictions

The Company has not registered the Shares under the U.S. Securities Act or the securities laws of other jurisdictions than Norway and the Company does not expect to do so in the future. The Shares may not be offered or sold in the United States, nor may they be offered or sold in any other jurisdiction in which the registration of the Shares is required but has not taken place, unless an exemption from the applicable registration requirement is available, or the offer or sale of the Shares occurs in connection with a transaction that is not subject to these provisions. In addition, there can be no assurances that shareholders residing or domiciled in the United States will be able to participate in future capital increases or exercise subscription rights.

2.3.7 Liquidity of the New Convertible Bonds No liquid market currently exists for trading of the New Convertible Bonds and it is not possible to predict whether, if the New Convertible Bonds are listed on Oslo Børs, this may provide increased liquidity.

2.3.8 Bondholders will bear the risk of fluctuation in the price of the Company's Shares The market price of the New Convertible Bonds is expected to be affected by fluctuations in the market price of the Company’s Shares and it is impossible to predict whether the price of the Shares will rise or fall. Any decline in the price of the Shares may have an adverse effect on the market price of the New Convertible Bonds.

2.3.9 Risk related to subordination of the New Convertible Bond The New Convertible Bonds are subordinated to all senior indebtedness of the Company. Rights to receive payment on the New Convertible Bonds in a default situation will therefore be subject to all senior lenders first receiving due payment. Furthermore, the Company may always choose to settle its obligations under the New Convertible Bonds with delivery of Shares.

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3. STATEMENTS

3.1 RESPONSIBILITY FOR THE PROSPECTUS We, the Board of Directors of Prosafe SE (the "Board"), hereby declare that, having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is, to the best of our knowledge, in accordance with the facts and contain no omissions likely to affect its import.

14 October 2016

The Board of Prosafe SE

Glen Ole Rødland Non-executive interim chairman

Roger Cornish Non-executive director

Nancy Ch. Erotocritou Non-executive director

Carine Smith Ihenacho Non-executive director

Anastasis Ziziros Non-executive director

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3.2 INFORMATION SOURCED FROM THIRD PARTIES In certain sections of this Prospectus information sourced from third parties has been reproduced. In such cases, the source of the information is always identified. Such third party information has been accurately reproduced. As far as the Company is aware, and is able to ascertain from information published by the relevant third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

3.3 NOTICE REGARDING FORWARD-LOOKING STATEMENTS

Sections 6, 7 and 9 include “forward-looking” statements, including, without limitation, projections and expectations regarding the Company’s future financial position, business strategy, plans and objectives. All forward-looking statements included in this document are based on information available to the Company, and views and assessment of the Company, as of the date of this Prospectus. The Company expressly disclaims any obligation or undertaking to release any updates or revisions of the forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, unless such update or revision is prescribed by law.

When used in this document, the words “anticipate”, “believe”, “estimate”, “expect”, “seek to”, “may”, “plan” and similar expressions, as they relate to the Company, its subsidiaries or its management, are intended to identify forward-looking statements. The Company can give no assurance as to the correctness of such forward-looking statements and investors are cautioned that any forward-looking statements are not guarantees of future performance. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company and its subsidiaries, or, as the case may be, the industry, to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company and its subsidiaries are operating or will operate. Factors that could cause the Company’s actual results, performance or achievements to materially differ from those in the forward-looking statements include, but are not limited to, those described in Section 2 “Risk Factors” and elsewhere in this Prospectus.

Given the aforementioned uncertainties, readers are cautioned not to place undue reliance on any of these forward-looking statements.

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4. THE REFINANCING

4.1 BACKGROUND The negative development in the offshore oil service markets in 2015/16, coupled with an overspend and further delay in the start-up of the Safe Scandinavia Tender Support Vessel (“TSV”), suspension of additional Mexico contracts (including cancellation of a letter of intent for a new 4.5 year contract of approximately USD 145 million for Safe Notos) and a consequent deterioration of the Group's contract backlog, as well as the unavailability of the bond market as a refinancing source, led to a situation where the Group's financial covenants would have been under pressure. The Company therefore engaged legal and financial advisors and initiated a review of the Company’s strategic options and funding situation.

Following discussions with key stakeholders, including secured bank lenders, major bondholders and shareholders, the Company announced on 7 July 2016, the terms of a comprehensive refinancing (the "Refinancing") for the purpose of improving the Company´s financial situation. The Refinancing comprised a solution involving new capital, amortization relief and covenant ease from senior lenders and conversion (equitization) of bond debt. The Refinancing will provide greater financial flexibility for the Company throughout the period until the end of 2020 including a solid liquidity buffer to weather a prolonged market downturn. The combined effect of the Refinancing is expected to improve the Company's liquidity by approximately USD 478 million (approximately NOK 4,005 million) over a five year period, and reduce the net interest bearing debt by approximately USD 395 million (approximately NOK 3,310) through 100% conversion of senior unsecured bonds, in addition to the contribution of new equity. The Refinancing results in a substantial dilution of existing shareholders not participating in the Private Placement, and the contemplated Subsequent Offering will not fully compensate the dilutive effect for the remaining shareholders. Having considered available alternatives, the Board was however of the opinion that such deviation from the equal treatment principle was fair and necessary, given the challenging financial situation of the Company, the prevailing market conditions, the agreed terms of the Refinancing and the Company's need for certainty and flexibility when seeking to secure new equity.

4.2 THE MAIN TERMS OF THE REFINANCING

4.2.1 The Private Placement As part of the Refinancing, the Company launched a Private Placement of minimum USD 130 million (approximately NOK 1,094 million) and maximum USD 150 million (approximately NOK 1,260 million) at an issue price of NOK 0.25 per Share, of which NOK 712 million (approx. USD 85 million) was pre-subscribed by Prosafe's two largest shareholders, North Sea Strategic Investments AS and M&G (the "Anchor shareholders"), but always on condition that the Anchor shareholders' individual shareholdings post the Refinancing did not exceeded 29.9% of the enlarged share capital of the Company post-Refinancing. The gross proceeds in the Private Placement amounted to approximately NOK 1,094 million (approximately USD 130 million). Costs attributable to the Private Placement will be borne by the Company. The total costs amounted to approximately NOK 40 million (approximately USD 5.3 million) and as such the net proceeds will amount to approximately NOK 1,054 million (approximately USD 124.7 million). The costs relate to fees to Finanstilsynet, fees to financial and legal advisors and costs to the Company’s auditor. The proceeds from the Private Placement will be used to strengthen the Company's balance sheet, bond redemption and liquidity position as well as for general corporate purposes. USD 40 million of the proceeds from the Private Placement will be used to buy-back part of the Company's bonds. The Private Placement was carried out through an accelerated book-building, with minimum order and allocation level equal to the NOK equivalent of EUR 100,000. Existing shareholders received preferred allocation for the first USD 130 million, and existing bondholders received preferred allocation for the remaining USD 20 million as well as for any Shares not subscribed for by existing shareholders. The book-building period commenced on 7 July 2016 at 16:30 hours (CET) and closed at 16:30 hours (CET) on 12 July 2016. The Private Placement was fully subscribed. The final amount of Private Placement Shares was determined on the basis of the amount required for the cash-out of bonds under the Refinancing (as described in section 4.2.3 below). As a result of the minimum cash-out amount being exercised, the Company issued 4,376,600,000 (USD 130 million) Private Placement Shares. As a consequence of the issuance of the Private Placement Shares and the Bond Conversion Shares, the shareholders who did not participate were diluted by approximately 96%.

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The Private Placement Shares were registered with the Norwegian Central Securities Depository (the "VPS") on 13 September 2016 and delivered to the subscribers against payment on 14 September 2016. Pending the Capital Reduction (as described below in section 4.2.5), the Private Placement Shares were issued and registered electronically in book-entry form in accordance with the Companies Law as Class A Shares on a separate ISIN being CY0106610914 and with a nominal value of EUR 0.001, such Shares to have equal rights in all respects as the existing Ordinary Shares from the time of issuance, including with respect to dividends and voting, except that such Shares are convertible to Ordinary Shares following the completion of the Capital Reduction and publication of this Prospectus. As the Capital Reduction has now been completed, the Class A Shares will following the publication of this Prospectus be converted into Ordinary Shares and listed on Oslo Børs on the Company's ordinary ISIN CY0100470919, under ticker code "PRS". Pending such listing and conversion, the Private Placement Shares are not listed or tradable on Oslo Børs, but registered on N-OTC on an interim basis. In order to be able to complete the Private Placement, the Board proposed to the EGM that existing shareholders' pre-emptive rights to subscribe the Private Placement Shares were dis-applied. The EGM resolved in favor of the proposal. The Board believes that this was necessary and in the best interest of the Company and its shareholders and other stakeholders as it secured the financing required by the Restructuring and provided for timely commitments.

4.2.2 Subsequent Offering The Company plans to conduct a subsequent equity offering (the "Subsequent Offering") of up to NOK 126,000,000 (approximately USD 15 million) for the purpose of facilitating subscription by existing shareholders who did not participate in the Private Placement. For further information on the terms of the Subsequent Offering, please refer to section 5.

4.2.3 Senior unsecured bonds NOK 2.4 billion (equivalent to approx. USD 290 million) in aggregate face value of the Company's outstanding senior unsecured bonds in PRS08, PRS09, PRS10 and PRS11 (the "Senior Unsecured Bonds") was converted into new Shares (the "Bond Conversion Shares") at 30% of the face value and/or cash (the "Cash-Out Option") at the option of each bondholder. The Bond Conversion Shares were issued at NOK 0.25. The bondholders received a cash-out offer to tender bonds for cash of minimum USD 40 million and maximum USD 60 million. The cash-out offer was structured as a reverse book-building whereby bondholders applied for their preferred cash redemption in the range 25%-35% of the face value. Bondholders that could not hold shares due to restrictions in their mandates had an option to choose a convertible bond (the "New Convertible Bond") as an alternative to Bond Conversion Shares. In total, the Cash-out Option was exercised for NOK 242 million. As the Cash-out Option was exercised for less than the minimum cash-out amount of NOK 336 million, the clearing price has per the terms of the proposed Refinancing has been set to 35% of current face value of the bonds and the difference between NOK 84.7 million (35% of NOK 242 million) and the minimum cash-out amount (NOK 336 million) has been applied for a pro-rata redemption across remaining bonds. Based upon received requests from bondholders, the New Convertible Bond was issued in the amount of NOK 81.79 million convertible into 327,160,052 new Shares in Prosafe. Adjusted for the cash-out amount and the New Convertible Bond, remaining bonds were converted to 1,400,839,757 Bond Conversion Shares. Following the issuance of the New Convertible Bond, New Convertible Bonds of nominal value NOK 3 million has been converted into 12,000,000 new Class A Shares.

4.2.3.1. Main terms of the new convertible bonds The following overview provides a summary of the main terms applicable to the New Convertible Bonds. The full terms in respect of the New Convertible Bonds are given in the convertible bond agreement dated 9 September 2016 (the "Bond Agreement") which is attached hereto as Appendix 2. Any terms in the below overview which is not defined herein shall have the same meaning as the definition in the Bond Agreement. Name ............................................. Prosafe SE Subordinated Convertible Bond Issue 2016/2021 Governing law and jurisdiction ...... Norwegian law and the courts of Norway Registration and registrar ............... The New Convertible Bonds have ISIN NO 001 077102.5 and are registered

electronically in book-entry form in the VPS with DNB Bank ASA, Registrars Department, 0021 Oslo, Norway as registrar

Currency ......................................... NOK Ranking .......................................... The New Convertible Bonds constitute subordinated unsecured obligations of the

Company. The New Convertible Bonds are subordinated to the senior debt of the Company, however the New Convertible Bonds shall rank pari passu with similarly

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subordinated debt of the Company (save for such claims which are preferred by bankruptcy, insolvency, liquidation or other similar laws of general application), shall rank ahead of all amounts payable in respect of the share capital of the Company or other capital of the Company subordinated in rank to the New Convertible Bonds.

Bondholders meetings .................... The bondholders' meeting represents the supreme authority of the bondholders community in all matters relating to the New Convertible Bonds, and has the power to make all decisions altering the terms and conditions of the New Convertible Bonds, including, but not limited to, any reduction of principal or interest and any conversion of the New Convertible Bonds into other capital classes. The authority, procedures and resolutions applicable to the bondholders' meeting are further set out in clause 20 of the Bond Agreement

Right to convert into shares ............ Each Bondholder has the right to convert each New Convertible Bond into Shares at the Conversion Price in effect on the relevant Conversion Date. Furthermore, the bondholders shall have preferential allocation of common equity in line with holders of common equity. The New Convertible Bonds are convertible at the Company's option at the following times: • Maturity • Formal insolvency proceedings of the Company or one or both of its material

asset owning subsidiaries • Upon a material refinancing of the majority of the financial indebtedness of the

Group in connection with actual or potential financial difficulties

Shares issued upon conversion of the New Convertible Bonds will be fully paid and will in all respects rank pari passu with (and be registered under the same ISIN as) the other Shares (as the case may be) in issue on the relevant Conversion Date. The Conversion terms are further described in clause 13 of the Bond Agreement

Conversion price……………………….

NOK 0.25. The Conversion Price may be adjusted in, among other situations, the event of a share split or reverse split, bonus issue, dividend payment or de-listing of the Shares. Further details concerning adjustment of Conversion Price is described in clauses 14 and 15 in the Bond Agreement.

Conversion Date Date falling ten (10) Business Days after the Paying Agent has received an exercise notice pursuant to clause 13.4 of the Bond Agreement

Coupon rate………………………………

Zero coupon

Issue date………………………

14 September 2016

Maturity date ..................................

23 August 2021

Interest payment………

The Company shall not pay any interest on the New Convertible Bonds

Bondholders’ representatives .........

Nordic Trustee ASA. The trustee shall monitor the compliance by the Company of its obligations under this Bond Agreement and applicable laws and regulations which are relevant to the terms of this Bond Agreement, including supervision of timely and correct payment of principal or interest, (however, this shall not restrict the trustee from discussing matters of confidentiality with the Company), arrange bondholders' meetings, and make the decisions and implement the measures resolved pursuant to this Bond Agreement. The trustee is not obligated to assess the Company's financial situation beyond what is directly set out in this Bond Agreement.

Transferability ................................ The New Convertible Bonds are freely transferable subject to any local regulatory restrictions.

Listing

The New Convertible Bonds will be sought listed on Oslo Børs.

4.2.4 Amended bank facilities The Refinancing also includes a reduction of amortisation on bank facilities for 4 years from Q1 2017 until and including Q4 2020, with a total positive liquidity effect for the Company of USD 478 million. Significant financial covenant relief on all facilities will furthermore provide the Company with sufficient headroom to

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operate. A cash sweep mechanism will also be included and effective from Q1 2018 with payments being made only if there is available excess cash (as defined the detailed refinancing term sheet) which will be shared between Company and the bank lenders. Interest margins on the bank facilities will be calculated based on the existing leverage-based margin ratchet with additional flexibility introduced to allow the Company to pay part of the interest in PIK until and including Q2 2019. For further information on the Company's bank facilities, see section 9.6.

4.2.5 The Capital Reduction As part of the Refinancing, the Company has carried out a capital reduction in order to reduce the nominal value of the issued Ordinary Shares from EUR 0.25 to EUR 0.001 (the "Capital Reduction"). This reduction was resolved by the extraordinary general meeting of the Company on 23 August and was carried out as a reduction of share capital without distribution. The process of the share capital reduction required the approval and sanction of the Cypriot courts the process was completed on the registration of the court order and share capital reduction by the Cyprus Registrar of Companies on 12 October 2016. Please refer to Section 4.3 for details on the resolution.

4.2.6 Agreements with Cosco As part of and subject to the Refinancing, the Company has negotiated and agreed with Cosco (Quidong) Offshore Co. Ltd. ("Cosco") deferred delivery of Safe Eurus to Q4 2019 (or such earlier time required by the Company) and a limitation on any further liability in the event the Group does not take delivery of the vessel, giving the Company increased flexibility and reduced financing risk. In addition, the Group and Cosco have also agreed a deferral of the final repayment of the USD 29 million seller's credit for Safe Notos to Q4 2019.

4.3 CONDITIONS FOR COMPLETION OF THE REFINANCING AND RESOLUTIONS The Refinancing was conditional upon approval by bondholders' meeting in the Senior Unsecured Bonds and by the shareholders in an extraordinary general meeting. In addition, the Refinancing was conditional upon relevant approvals by the bank lenders, definitive agreement with Cosco as outlined herein and customary closing conditions. The Company has obtained support from large bondholders in all bond series and from the Company's largest shareholders. The extraordinary general meeting on 23 August 2016 passed a number of resolutions to facilitate and enable the implementation of the transactions under the Refinancing. The general meeting approved, inter alia, the following:

Approval of increase of authorised share capital:

the authorised share capital of the Company be and is hereby increased from EUR 68,981,037 to EUR 75,677,037 by the creation of 6,696,000,000 new undesignated shares, each with a nominal value of EUR 0.001, so that following the increase, the authorised share capital of the Company will be EUR 75,677,037 divided into (i) 275,924,148 ordinary shares of nominal value Euro 0.25 each, (ii) 6,696,000,000 undesignated shares of nominal value Euro 0.001 each.

Approval of disapplication of pre-emptive rights:

consent is hereby given to the issue or agreement to issue of 6,696,000,000 shares and the issue of New Convertible Bonds, as in each case, the directors deem fit and further any pre-emption rights under the articles of association of the Company and Section 60B of the Companies Law, Cap 113, as well as any other pre-emption rights or rights of first refusal, howsoever arising, be and are hereby waived and dis-applied, for a period of 5 years from the date of this extraordinary general meeting, up to and including 23 August 2021.

Amendment to the Articles of Association:

the articles of association of the Company be and are hereby amended as follows: (i) Regulation 4.1 of the Articles be and is hereby deleted and replaced/substituted with the following: ‘4.1 The Board of Directors shall have authority to allot and issue shares from the authorised unissued share capital of the Company as the General Meeting may from time to time determine by ordinary resolution.’ (ii) Regulation 5 of the Articles be and is hereby deleted and replaced/substituted with the following: ‘5 The Company may have more than one class of shares. Shares in the share capital of the Company which are designated or classified as "Class A Shares" shall carry or confer the following special rights and/or restrictions:

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1. DIVIDENDS AND RETURN OF CAPITAL: The Class A Shares shall notwithstanding the nominal value per Class A Share, rank for dividend and interim dividend as well as on a return of capital in a winding up of the Company, pari passu with the ordinary shares as one and the same class of shares and of equal nominal value per share, notwithstanding the nominal value of, or the paid up capital on, the Class A Shares provided always that the Class A Shares are fully paid up. 2. RE-CLASSIFICATION/DESIGNATION (CONVERSION): 2.1 The Class A Shares shall be convertible into, and liable to be re-classified and designated as, "Ordinary Shares" (on a share for share basis), as provided herein. Each and every Class A Share shall automatically and without notice, be converted into, and re-classified and designated as, an “Ordinary Share” ranking pari passu in all respects and for all purposes with each and every pre-existing (outstanding) Ordinary Share in the event that: 2.1.1 the share capital reduction resulting from the reduction of the nominal value of the Ordinary Shares from Euro 0.25 to Euro 0.001 is completed; and 2.1.2 a listing prospectus for the Class A Shares is approved and published; (each a "Class A Conversion Event"), on the date on which the last of such Class A Conversion Events shall occur. 2.2 A certificate issued by the Company signed by the secretary or a director confirming that a Class A Conversion Event has occurred and the date on which it has occurred shall, in absence of manifest error, be conclusive evidence of such fact. 2.3 The Company shall forthwith record in its statutory books (including the register kept by the Registrar) the conversion, re-classification and designation effected pursuant to the foregoing paragraphs and make such announcements and forward such notifications as required by applicable law and further, in the case of shares not being uncertificated shares, the Company shall recall for cancellation of the share certificates in respect of Class A Shares so converted and re-classified and designated and subject to receiving the same, the holders shall forthwith be entitled to receive new share certificates accordingly PROVIDED THAT until an entry or record has been made in the statutory books of the Company (including the register kept by the Registrar) of any such conversion, reclassification and designation as aforesaid, any references in the statutory books to any such shares so converted shall be construed accordingly. 2.4 MISCELLANEOUS: The Class A Shares shall constitute a different and separate class of shares for the purposes of the Articles and except as otherwise provided in this Regulation, the Class A Shares and the Ordinary Shares shall rank pari passu in all respects and for all purposes notwithstanding their nominal value.’ (iii) Regulation 25 of the Articles be and is hereby deleted and replaced/substituted with the following: ‘25 The Company may from time to time by ordinary resolution increase its authorised share capital by the creation of new shares of any nominal value as the resolution shall prescribe.’ Authorisation to the Board of Directors to allot and issue shares from the unissued authorized share capital until 23 August 2021: the Board of Directors be and are hereby authorised to allot and issue shares from the unissued authorised share capital of the Company (including as increased from time to time), as ordinary shares and/or class A shares and/or shares on such terms as the Board of Directors deems fit, for a period up to and including the 5th anniversary of the date of this extraordinary general meeting i.e. 23 August 2021.

Reduction of Share Capital:

(i) the share capital of the Company be reduced by cancelling paid up nominal capital (in lieu and without cancelling any shares per se) to the extent of Euro 0.249 per share on each of the 259,570,359 ordinary shares that have been issued and are fully paid up and reducing the nominal value of all such ordinary shares from Euro 0.25 each to Euro 0.001 each (“Share Capital Reduction”) with the corresponding effect on the authorized share capital; (ii) the entire amount of Euro 64,633,019.391 corresponding to the amount cancelled from the Company's paid up share capital (through the reduction of the nominal value of each ordinary share as aforesaid)be transferred and credited into the capital reduction reserve fund in pursuance of Section 64(1)(e) of the Companies Law, Cap 113

4.4 ADVISORS Advokatfirmaet Schjødt AS (Norwegian law) and Harneys Aristodemou Loizides Yiolitis LLC (Cyprus law) are acting as legal advisors to the Company. ABG Sundal Collier, Pareto Securities AS, DNB Markets, a part of DNB Bank ASA, Nordea Markets, a part of Nordea Bank Norge ASA, Skandinaviska Enskilda Banken AB (publ.) Oslo Branch and Moelis & Company

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have acted as financial advisors to the Company in connection with the Refinancing. Clarkson Platou Securities AS has provided independent fairness advice to the Company's board.

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5. THE SUBSEQUENT OFFERING

5.1 GENERAL For information concerning the Refinancing and the background for the Subsequent Offering, please refer to Section 4.1 and 4.2.2. The Subsequent Offering consists of an offer by the Company to issue up to 504,000,000 Offer Shares at a subscription price of NOK 0.25 per share, thereby raising gross proceeds of up to NOK 126 million. The Company intends to use the proceeds for financing, repayment of debt, and general corporate purposes. Please also refer to section 4.2.1 for use of proceeds. Eligible Shareholders will based on their registered holding of Shares in VPS at the end of the Record Date, be granted non-tradable subscription rights providing a preferential right to subscribe for and be allocated Offer Shares in the Subsequent Offering. The Company will issue 3.56 non-tradable Subscription Rights per 1 (one) Share held in the Company on the Record Date. The number of Subscription Rights issued to each shareholder will be rounded down to the nearest whole number of Subscription Rights. Each Subscription Right grants the owner the right to subscribe for and be allocated one (1) Offer Share in the Subsequent Offering. Over-subscription by holders of Subscription Rights is permitted. However, there can be no assurance that Offer Shares will be allocated for such subscriptions. If allocations for over-subscriptions are made, such allocations will be made in accordance with the principles set forth in section 5.9 below. The below timetable sets out certain key dates for the Subsequent Offering:

Last day of trading in the Shares incl. Subscription Rights............................. 12 July 2016

First day of trading in the Shares excl. Subscription Rights............................ 13 July 2016

Record Date ............................................................................................. 14 July 2016

Start of Subscription Period ....................................................................... 17 October 2016

End of Subscription Period ........................................................................ 31 October 2016

Allocation of Offer Shares ......................................................................... 1 November 2016

Allocation letters distributed ...................................................................... On or about 1 November 2016

Payment Date for the Offer Shares .............................................................. 4 November 2016

Issuance, registration in the VPS and delivery of Offer Shares ....................... On or about 10 November 2016

Listing and first day of trading of the Offer Shares on Oslo Børs .................... On or about 10 November 2016

The above dates are indicative and subject to change. No action will be taken to permit a public offering of the Subscription Rights and the Offer Shares in any jurisdiction outside Norway.

5.2 RESOLUTION REGARDING THE SUBSEQUENT OFFERING Please refer to section 4.3 for the resolutions passed by the extraordinary general meeting on 23 August 2016 which also concern the Subsequent Offering.

5.3 ELIGIBLE SHAREHOLDERS AND RECORD DATE The Company will issue subscription rights to the Company’s shareholders as of close of trading on 12 July 2016, as registered in the VPS on 14 July 2016 (the “Record Date”), who are not resident in a jurisdiction where such offering would be unlawful, or would (in jurisdictions other than Norway) require any prospectus filing, registration or similar action and who did not participate in the Private Placement. Eligible Shareholders will receive non-transferable Subscription Rights equal to their pro-rata shareholding as of the Record Date. One subscription right will grant the right to subscribe for one (1) Offer Share. The subscription rights will be distributed free of charge, and the recipient of subscription rights will not be debited any cost. The Subscription Rights will be registered in each Eligible Shareholders’ VPS account on or about 17 October 2016.

5.4 OFFER SHARES AND SUBSCRIPTION RIGHTS The Subsequent Offering comprises 504,000,000 subscription rights (the “Subscription Rights”), where each Subscription Right grants the right to subscribe for one (1) Offer Share.

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Eligible Shareholders will be allowed to subscribe for more Offer Shares than the number of Subscription Rights held by Eligible Shareholders. See section 5.9 for allotment criteria. The Subscription Price for one Offer Share is NOK 0.25. No fractional Offer Shares will be issued. Fractions will not be compensated, and all fractions will be rounded down to the nearest integer that provides issue of whole numbers of said securities to each participant. The Subscription Rights will be non-transferable and hence not listed on the Oslo Stock Exchange during the Subscription Period. The Subscription Rights will be transferred to the Eligible Shareholders’ VPS-accounts on or about 17 October 2016. Each Eligible Shareholder will receive 3.56 Subscription Rights for every Share held as of the Record Date. Over-subscription is allowed, and allocations for over-subscriptions (if any) will be made as set out in section 5.9 below. After the expiry of the Subscription Period, the Subscription Rights will be of no value and automatically lapse. Eligible Shareholders not subscribing for entitled Offer Shares will entail no rights after expiry of the Subscription Period. Subscription Rights of shareholders resident in jurisdictions where the Prospectus may not be distributed and/or with legislation that, according to the Company's assessment, prohibits or otherwise restricts subscription for Offer Shares ("Ineligible Jurisdiction") will initially be credited to such persons' ("Ineligible Shareholders") VPS accounts. Such credit specifically does not constitute an offer to Ineligible Shareholders. The Company will instruct the Managers, as far as possible, to withdraw the Subscription Rights from such Ineligible Shareholders’ VPS accounts. If the relevant Ineligible Shareholder by 16:30 Oslo time on 31 October 2016 documents to the Company a right to receiving the Subscription Rights withdrawn from its VPS account, the Managers will re-credit the withdrawn Subscription Rights to the VPS account of the relevant Ineligible Shareholder.

5.5 SUBSCRIPTION PERIOD The Subscription Period in the Subsequent Offering will commence on 17 October 2016 and expire on 31 October at 16:30 Oslo time. The Subscription Period may not be closed earlier than 16:30 Oslo time on 31 October 2016. The Subscription Period may not be extended.

5.6 SUBSCRIPTION PRICE The subscription price for one (1) Offer Share is NOK 0.25 (the “Subscription Price”). The Subscription Price is equal to the subscription price in the Private Placement. The subscribers will not incur any costs related to the subscription for, or allotment of, the Offer Shares.

5.7 SUBSCRIPTION PROCEDURES AND SUBSCRIPTION OFFICE Subscriptions for Offer Shares must be made on a Subscription Form attached as Appendix 1 hereto. Subscribers who are Norwegian citizens may also subscribe for Offer Shares by following the link on ww.abgsc.no, www.paretosec.com, www.dnb.no/emisjoner, www.nordea.no/prs, www.seb.no which will redirect the subscriber to the VPS online subscription system. In order to use the online subscription system, the subscriber must have, or obtain, a VPS account number. All online subscribers must verify that they are Norwegian citizens by entering their national identity number (Norwegian: “personnummer”). Online subscriptions must be submitted, and accurately completed Subscription Forms must be received by the Managers by 16:30 CET time on 31 October 2016. Neither the Company nor the Managers may be held responsible for postal delays, unavailable fax lines, internet lines or servers or other logistical or technical problems that may result in subscriptions not being received on time or at all by the Managers. Subscription Forms received after the end of the Subscription Period and/or incomplete or incorrect Subscription Forms and any subscription that may be unlawful may be disregarded at the sole discretion of the Company and/or the Managers without notice to the subscriber. Properly completed and signed Subscription Forms may be faxed, mailed or delivered to the Managers at either of the addresses set out below: ABG Sundal Collier Munkedamsveien 45e, 7th floor, 0250 Oslo, Norway Tel: +47 22 01 60 00 Mail: [email protected]

Pareto Securities Dronning Mauds gate 3, N-0115 Oslo, Norway Tel: +47 22 87 87 00 Mail: [email protected]

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DNB Markets, Registrars Department Dronning Eufemias gate 30, N-0021 Oslo, Norway Tel: +47 23 26 81 01 Mail: [email protected]

Nordea Markets Essendropsgate 7, P.O. Box 1166 Sentrum, N-0107 Oslo, Norway Tel: +47 24 01 34 62 Mail: [email protected]

SEB Filipstad Brygge 1, N-0123 Oslo, Norway Tel: +47 22 82 70 00 Mail: [email protected]

Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or modified by the subscriber after having been received by the Managers. The subscriber is responsible for the correctness of the information entered into the Subscription Form. By signing and submitting a Subscription Form, the subscribers confirm and warrant that they have read this Prospectus and are eligible to subscribe for Offer Shares under the terms set forth herein. There is no minimum subscription amount for which subscriptions in the Subsequent Offering must be made. Over-subscription (i.e., subscription for more Offer Shares than the number of Subscription Rights held by the subscriber entitles the subscriber to be allocated) is permitted. However, there can be no assurance that Offer Shares will be allocated for such subscriptions. See section 5.8.1 and 5.9 below for further details on applicable allocation principles. Multiple subscriptions (i.e., subscriptions on more than one Subscription Form) are allowed. Please note, however, that two separate Subscription Forms submitted by the same subscriber with the same number of Offer Shares subscribed for on both Subscription Forms will only be counted once unless otherwise explicitly stated in one of the Subscription Forms. In the case of multiple subscriptions through the VPS online subscription system or subscriptions made both on a Subscription Form and through the VPS online subscription system, all subscriptions will be counted. The Company is not aware of whether any members of the Company’s Management or Board of Directors intend to subscribe for Offer Shares in the Subsequent Offering, or whether any person intends to subscribe for more than 5% of the Offer Shares, however to the extent that such persons are Eligible Shareholders they will receive Subscription Rights.

5.8 FINANCIAL INTERMEDIARIES All persons or entities holding Shares or Subscription Rights through financial intermediaries (i.e., brokers, custodians and nominees) should read this section. All questions concerning the timeliness, validity and form of instructions to a financial intermediary in relation to the exercise of Subscription Rights should be determined by the financial intermediary in accordance with its usual customer relations procedure or as it otherwise notifies each beneficial shareholder. The Company is not liable for any action or failure to act by a financial intermediary through which Shares or Subscription Rights are held.

5.8.1 Subscription Rights If an Eligible Shareholder holds Shares registered through a financial intermediary on the Record Date, the financial intermediary will customarily give the Eligible Shareholder details of the aggregate number of Subscription Rights to which it will be entitled. The relevant financial intermediary will customarily supply each Eligible Shareholder with this information in accordance with its usual customer relations procedures. Eligible Shareholders holding Shares through a financial intermediary should contact the financial intermediary if they have received no information with respect to the Subsequent Offering. Ineligible Shareholders holding their Shares through a financial intermediary will not be entitled to exercise their Subscription Rights.

5.8.2 Subscription Period The time by which notification of exercise instructions for subscription of Offer Shares must validly be given to a financial intermediary may be earlier than the expiry of the Subscription Period. Such deadline will depend on the financial intermediary. Eligible Shareholders who hold their Shares through a financial intermediary should contact their financial intermediary if they are in any doubt with respect to deadlines.

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5.8.3 Subscription Any shareholder who is not an Ineligible Shareholder and who holds its Subscription Rights through a financial intermediary and wishes to exercise its Subscription Rights, should instruct its financial intermediary in accordance with the instructions received from such financial intermediary. The financial intermediary will be responsible for collecting exercise instructions from the Eligible Shareholders and for informing the Managers of their exercise instructions. Please refer to section 14 “Selling and transfer restrictions” for a description of certain restrictions and prohibitions applicable to the exercise of Subscription Rights in certain jurisdictions outside Norway.

5.8.4 Method of Payment Any Eligible Shareholder who holds its Subscription Rights through a financial intermediary should pay the Subscription Price for the Offer Shares that are allocated to it in accordance with the instructions received from the financial intermediary. The financial intermediary must pay the Subscription Price in accordance with the instructions in this Prospectus. Payment by the financial intermediary for the Offer Shares must be made to the Managers in accordance with section 5.10 “Payment for the Offer Shares” no later than the Payment Date. Accordingly, financial intermediaries may require payment to be provided to them prior to the Payment Date.

5.9 ALLOCATION Allotment of the Offer Shares is expected to take place on or about 1 November. The following allocation criteria will be used for allotment of Offer Shares in the Subsequent Offering: 1. Firstly, allocation to subscriptions made on the basis of Subscription Rights. 2. Secondly, over-subscriptions by Eligible Shareholders up to an additional 40,000 shares. 3. Thirdly, pro rata allocations to oversubscribing Eligible Shareholders (based on subscription rights). General information regarding the result of the Subsequent Offering is expected to be published on or about 1 November 2016 in the form of a stock exchange release through www.newsweb.no. All subscribers being allotted Offer Shares will receive a letter from the Managers confirming the number of Offer Shares allotted to the subscriber and the corresponding amount which will be debited from the subscriber’s account. This letter is expected to be mailed on or about 1 November 2016. Investors with access to VPS Investor Services will also be able to see their allocated Offer Shares through such service.

5.10 PAYMENT FOR THE OFFER SHARES The payment for Offer Shares allocated to a subscriber falls due on 4 November 2016 (the “Payment Date”). Payment must be made in accordance with the requirements set out below.

5.10.1 Subscribers who have a Norwegian bank account Subscribers who have a Norwegian bank account must, and will by signing the Subscription Form, provide the Managers with a one-time irrevocable authorisation to debit a specified bank account with a Norwegian bank for the amount payable for the Offer Shares which are allocated to the subscriber. The specified bank account is expected to be debited on or after the Payment Date. The Managers are only authorised to debit such account once, but reserve the right to make up to three debit attempts, and the authorisation will be valid for up to seven working days after the Payment Date. The subscriber furthermore authorises the Managers to obtain confirmation from the subscriber’s bank that the subscriber has the right to dispose over the specified account and that there are sufficient funds in the account to cover the payment. If there are insufficient funds in a subscriber’s bank account or if it for other reasons is impossible to debit such bank account when a debit attempt is made pursuant to the authorisation from the subscriber, the subscriber’s obligation to pay for the Offer Shares will be deemed overdue. If payment for the allotted Offer Shares is not received when due, the Offer Shares will not be delivered to the subscriber, and the Board reserves the right, at the risk and cost of the subscriber, to cancel the subscription in respect of the Offer Shares for which payment has not been made, or to sell or otherwise dispose of the Offer Shares, and hold the subscriber liable for any loss, cost or expense suffered or incurred in connection therewith. The original subscriber remains liable for payment of the entire amount due, including interest, costs, charges and expenses accrued, and the Managers may enforce payment of any such amount outstanding.

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Payment by direct debiting is a service that banks in Norway provide in cooperation. In the relationship between the subscriber and the subscriber’s bank, the standard terms and conditions for “Payment by Direct Debiting – Securities Trading”, which are set out on page 2 of the Subscription Form, will apply, provided, however, that subscribers who subscribe for an amount exceeding NOK 5 million by signing the Subscription Form provide the Managers with a one-time irrevocable authorisation to directly debit the specified bank account for the entire subscription amount.

5.10.2 Subscribers who do not have a Norwegian bank account Subscribers who do not have a Norwegian bank account must ensure that payment with cleared funds for the Offer Shares allocated to them is made on or before the Payment Date. Prior to any such payment being made, the subscriber must contact the Managers for further details and instructions.

5.10.3 Overdue payments Overdue and late payments will be charged with interest at the applicable rate from time to time under the Norwegian Act on Interest on Overdue Payment of 17 December 1976 No. 100, currently 8.5% per annum. If a subscriber fails to comply with the terms of payment, the Offer Shares will, at the discretion of the Manager, not be delivered to the subscriber.

5.11 PUBLICATION OF INFORMATION RELATING TO THE SUBSEQUENT OFFERING Publication of information related to any changes in the Subsequent Offering and the amount subscribed, will be published on www.newsweb.no under the Company’s ticker “PRS”, and will also be available on the Company’s website www.prosafe.com. The announcement regarding the amount subscribed is expected to be made on or about 1 November 2016.

5.12 VPS REGISTRATION The Offer Shares will be issued in accordance with the Companies law and registered electronically in book-entry form with VPS, under the Company’s ordinary ISIN CY0100470919. The Offer Shares will not be delivered to the subscribers' VPS accounts before they are fully paid and registered in the VPS. See section 10.8 for information regarding the Company’s registrar.

5.13 DELIVERY AND LISTING OF THE OFFER SHARES All subscribers subscribing for Offer Shares must have a valid VPS account (established or maintained by an investment bank or Norwegian bank that is entitled to operate VPS accounts) to receive Offer Shares. Assuming that payments from all subscribers are made when due, the delivery of the Offer Shares will take place on or about 10 November 2016. The Offer Shares will not be sought or admitted to trading on any other regulated market than Oslo Børs.

5.14 SHARE CAPITAL FOLLOWING THE SUBSEQUENT OFFERING The final number of Offer Shares to be issued in connection with the Subsequent Offering will depend on the number of Offer Shares subscribed for. The maximum number of Offer Shares to be issued is 504,000,000 all with a nominal value of EUR 0.001 per Share which will give a further increase in the Company’s total number of issued Shares after the Private Placement from 6,049,010,116 to a maximum of 6,553,010,116 each with a nominal value of EUR 0.001 per Share. See section 10 for a further description of the Company’s share capital.

5.15 TRANSFERABILITY OF THE OFFER SHARES The Offer Shares may not be transferred or traded before they are fully paid and the Offer Shares have been registered in the VPS. The Offer Shares are expected to be delivered to the subscribers’ VPS accounts on or about 10 November 2016. For further details on selling and transfer restrictions, please refer to section 14.

5.16 EXPENSES AND NET PROCEEDS Transaction costs and all other directly attributable costs in connection with the Subsequent Offering that will be borne by the Company are estimated to approximately NOK 5 million, thus resulting in net proceeds of approximately NOK 121 million, if the Subsequent Offering is fully subscribed.

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5.17 DILUTION As a consequence of the issuance of the Private Placement Shares and the Bond Conversion Shares, the shareholders who did not participate were diluted by approximately 96% (this does not take into account any further Shares under the New Convertible Bond). The immediate dilution of ownership for shareholders not participating in the Subsequent Offering will be approximately 8% (given full subscription).

5.18 SHAREHOLDERS’ RIGHTS RELATING TO THE OFFER SHARES

The rights attached to the Offer Shares will be the same as those attached to the Company’s existing Shares. The Offer Shares will rank pari passu with existing Shares in all respects including the right to receive dividend from the time of issuance. Please see section 11 on more details regarding shareholding in a European Public Limited Liability Company registered in Cyprus.

5.19 INTEREST OF NATURAL AND LEGAL PERSONS

The Managers and their affiliates have provided from time to time, and may provide in the future, investment and commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may have received and may continue to receive customary fees and commissions. The Managers, its employees and any affiliate may currently own existing Shares in the Company. The Managers do not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligation to do so. The Managers will receive a success fee of a fixed percentage (3%) of the gross proceeds raised in the Subsequent Offering and, as such, have an interest in the Subsequent Offering.

5.20 MANAGERS AND ADVISOR

The Managers for the Subsequent Offering are ABG Sundal Collier ASA, Pareto Securities AS, DNB Markets, a part of DNB Bank ASA, Nordea Markets, a part of Nordea Bank Norge ASA and Skandinaviska Enskilda Banken AB (publ.) Oslo branch. Advokatfirmaet Schjødt AS (Norwegian law) and Harneys Aristodemou Loizides Yiolitis LLC (Cyprus law) are acting as legal advisors to the Company.

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6. PRESENTATION OF THE COMPANY AND ITS BUSINESS

6.1 CORPORATE INFORMATION Prosafe SE is a European public limited liability company, organised under the laws of the Republic of Cyprus. The Company is registered with the Registrar of Companies and Official Receiver of the Republic of Cyprus, with the registration number SE4 and was incorporated on 26 March 1997. Certain aspects of the Company's activities are governed by Norwegian law pursuant to the listing agreement between Oslo Børs (the Oslo Stock Exchange) and the Company. In particular, the Norwegian Securities Trading Act and the Norwegian Stock Exchange Regulations will apply. The Company’s Shares are listed on the Oslo Stock Exchange (ticker: PRS) and are registered in VPS under ISIN CY0100470919. The Company’s register of shareholders in VPS is administered by DNB Bank ASA, Registrars Department, 0021 Oslo. Registered office: 126 Stadiou, 6020 Larnaca, Cyprus Telephone: +357 2462 2450 Fax: +357 2462 2480. Website: www.prosafe.com

6.2 DESCRIPTION OF THE GROUP Prosafe SE is the parent company which directly or indirectly owns 100 % of the shares in its subsidiaries, which inter alia, own and operate the vessels. The parent company provides certain Group functions such as legal, insurance, accounting and internal audit. Prosafe SE is headquartered in Larnaca (Cyprus). The Group also has offices in Aberdeen (Scotland), Rio de Janeiro (Brazil), Singapore, Stavanger (Norway) and Jersey. In addition, the Group may have local representation in the countries where its vessels are operating. The Group has approximately 706 employees, (including agency employees) at the date of this Prospectus. The Company has the overall responsibility for legal matters, corporate policies and procedures, insurances and reporting to the Board of Directors. The Company is also responsible for certain accounting, internal audit and finance functions. The various subsidiaries typically act as operating companies or provide services to internal or external clients. Prosafe Rigs Pte. Ltd ("PRPL"). and Prosafe Offshore Pte. Limited are the vessel owning entities in the Group. In line with industry practice, the Company has issued parent company guarantees to customers, vendors and banks on behalf of its subsidiaries in connection with the award and performance of contracts and the fulfillment of other contractual obligations. Currently, the total estimated amount of such guarantees in connection with contracts with currently uncompleted operations is approximately USD 414.45 million (“Parent Guaranteed Amounts”). This estimate is inter alia based on the current contract value of the relevant customer contracts and the obligors' liability caps under such contracts. Accordingly, the Parent Guaranteed Amounts may change in line with changes in the contract prices. In addition there are certain exclusions to the liability caps including but not limited to, inter alia, the obligors' indemnities related to interest, tax, damage to own property, personnel and pollution. In addition, PRPL has provided one bank guarantee in the amount of approximately USD 31 million, issued by Nordea Bank Finland PLC in favour of Westcon Yards AS. The Company has issued a parent company guarantee of approximately USD 36 million in favour of Nordea Bank Finland PLC under a counter-indemnity agreement with respect to this bank guarantee, which has been included in the reference to Parent Guaranteed Amounts specified above. The Company will, in general, be dependent on supply of liquidity from subsidiaries in order to discharge its obligations. As a part of its cost efficiency measures, the Group is implementing a reorganisation of the Group's shore-based business resulting in a leaner organisation, a smaller and partly changed Group management team and a rationalisation program across its workforce. Governed from the head office in Cyprus, the new organisational model of the Group is based on the principle of a lean line organisation focusing on the core business of safe and efficient management of the fleet.

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The rationalisation is necessary to ensure that the Group remains competitive in the current difficult market conditions and in a solid position for future growth when the industry starts to recover. The proposed workforce rationalisation is ongoing and will occur gradually throughout the remainder of 2016. The rationalisation program includes a substantial headcount reduction across the Group. Group structure as at the date of the Prospectus:

Company subsidiaries as at the date of the Prospectus:

Prosafe Offshore Limited Angola is branch of Prosafe Offshore Limited, which is in the process of deregistration. Prosafe Rigs Nigeria Ltd is in the course of being wound up

The parent company Prosafe SE is ultimately the owner of all subsidiaries but refer to the organogram for the structure.

6.3 INTRODUCTION AND HISTORY The Company’s vision is to be a leading and innovative provider of technology and services in selected niches of the global oil and gas industry.

Company name Country of incorporation Ownership Voting shareProsafe AS Norway 100 % 100 %Prosafe Management AS Norway 100 % 100 %Prosafe Offshore AS Norway 100 % 100 %Prosafe (UK) Holdings Limited United Kingdom 100 % 100 %Prosafe Rigs Limited United Kingdom 100 % 100 %Prosafe Offshore Limited United Kingdom 100 % 100 %Prosafe Rigs (Cyprus) Limited Cyprus 100 % 100 %Prosafe Holding Limited Cyprus 100 % 100 %Prosafe Offshore Accommodation Ltd Jersey 100 % 100 %Prosafe Rigs Pte. Ltd. Singapore 100 % 100 %Prosafe Offshore Pte. Limited Singapore 100 % 100 %Prosafe Offshore Employment Company Pte. Limited Singapore 100 % 100 %Prosafe Offshore Services Pte. Ltd. Singapore 100 % 100 %Prosafe Offshore Asia Pacific Pte. Ltd. Singapore 100 % 100 %Prosafe Offshore S.a.r.l. Luxembourg 100 % 100 %Prosafe Offshore Sp.zo.o. Poland 100 % 100 %Prosafe Offshore BV Netherlands 100 % 100 %Prosafe Services Maritimos Ltda Brazil 100 % 100 %Prosafe Offshore Limited Angola Angola 100 % 100 %Prosafe Rigs Nigeria Ltd Nigeria 100 % 100 %

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The Company was formed in 1997, when the platform drilling and technical services divisions de-merged from Transocean as a separate company and became listed on the Oslo Stock Exchange as Procon Offshore ASA ("Procon"). Procon merged with Safe Offshore ASA, thereby entering the business segment of accommodation/service vessels, and changed its name to Prosafe ASA. Prosafe ASA acquired the floating production company Nortrans Offshore in 2001, extending its activities to include the conversion, chartering and operation of Floating Production, Storage and Offloading (FPSOs /FSOs). In 2005, the Company refined its commercial portfolio with the sale of the drilling services division. In 2006, the Company acquired Consafe Offshore AB, which owned three semi-submersible accommodation/service vessels and one accommodation jack-up. In 2007 Prosafe transferred its headquarters to Cyprus and was registered as a European Public Limited Liability Company. In May 2008, the Floating Production division was spun off by establishing a subsidiary, Prosafe Production Public Limited, and by distributing 90.1 % of the shares to the shareholders of the Company. Prosafe Production Public Limited was listed on the Oslo Stock Exchange on 2 June 2008. Prosafe SE sold its 9.9 % stake in Prosafe Production Public Limited in 2010. The Group has strengthened its market position by investing in the existing fleet and constructing four new, technologically advanced, units. In 2011 and 2012, the Group ordered two Norway compliant, semi-submersible accommodation vessels, Safe Boreas and Safe Zephyrus, from Jurong Shipyard Pte Ltd in Singapore. The vessels were delivered from the yard in 2015 and 2016. The Group believes that the vessels are the most sophisticated and well-equipped accommodation vessels in the market, in terms of technical specifications and operational efficiency. In 2013, the Group ordered two harsh environment semi-submersible accommodation vessels, Safe Notos and Safe Eurus, from Cosco. Safe Notos was delivered from the yard in Q1 2016. The Group believes that the new build vessels are the most sophisticated and efficient harsh environment accommodation vessels available on the market. See additional specific comments for each vessel in section 6.5 of this Prospectus. As part of the Refinancing, the Group has negotiated and agreed with Cosco deferred delivery of Safe Eurus to Q4 2019 (or such earlier time required by the Group) and a limitation on any further liability in the event the Group does not take delivery of the vessel, giving the company increased flexibility and reduced financing risk. In addition, the Group and Cosco have also agreed a deferral of the final repayment of the USD 29 million seller's credit for Safe Notos to Q4 2019. In 2015 and 2016 the Safe Scandinavia was converted to a Tender support vessel (TSV). The TSV modification cost was in excess of USD 300 million compared to the USD 140 initially budgeted. In Q1 2016 contracts in Mexico were suspended including cancellation of a letter of intent for a new 4.5 year contract of ca USD 145 million for Safe Notos. As a consequence there was a deterioration of the Group's contract backlog.

6.4 PRINCIPAL ACTIVITIES The Group owns 10 semi-submersible accommodation vessels, one Tender support vessel (TSV) and has one semi-submersible accommodation vessel under construction. Safe Britannia, Jasminia and Safe Hibernia have recently been sold for scrap/recycling in the US. As of the date of this Prospectus, five vessels are in operation, five vessels are off-hire and/or stacked, one vessel (Safe Notos) is in transit to Brazil and one vessel is at the yard (Safe Eurus). Accommodation vessels are used when there is a need for additional accommodation, engineering, construction or storage capacity offshore. Typically, these vessels will be utilised in connection with installation and commissioning of new facilities, upgrades, modifications and maintenance of existing installations, hook-ups of satellite fields to existing infrastructure, and decommissioning and removal of installations. The Group's vessels have accommodation capacity (i.e. max number of beds) for 306-780 people depending on the type of vessel and offer high quality welfare and catering facilities, storage, workshops, offices, medical services, deck cranes and lifesaving and fire fighting equipment. The vessels are positioned alongside the host installation and are connected by means of a telescopic gangway so that personnel can walk to work.

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When on a timecharter contract in accommodation operation alongside platforms, the Group has the responsibility for the marine operations (station keeping etc.) and catering and cleaning services are outsourced. Compass Group/ESS is currently main supplier for catering and cleaning services on the vessels. Safe Scandinavia as a TSV is supporting drilling operations on Oseberg Øst by providing mud pumping, mud mixing and storage, cuttings and slop handling and extra offices and accommodation. For the TSV operations, the drilling support services are outsourced to KCA Deutag. The drilling campaign at Oseberg Øst, which could not have been carried out without a support vessel like Safe Scandinavia, is an important measure towards increasing recovery rates and extending the lifetime of Oseberg Øst. The Group has extensive experience from operating gangway connected to fixed installations, FPSOs, TLPs, Semis and Spars. The Group’s track record comprises operations offshore including Norway, UK, Denmark, Brazil, Tunisia, West Africa, North-west and South Australia, the Philippines, Russia, USA and the Gulf of Mexico. To be able to operate in the harshest offshore environments such as in the North Sea, a large semi-submersible is required, compared to when operating in more benign water regions, where a smaller semi-submersible is sufficient. To be able to operate in Norway, any vessel owning subsidiary needs to have an Acknowledgement of Compliance (AoC). The Group is therefore dependent on receiving an AoC to operate in Norway. An AoC is an acknowledgement from the Petroleum Safety Directorate (PSA) to the effect that a mobile facility’s technical condition and the companies' organisation and management system are assessed to be in conformity with relevant requirements of Norwegian petroleum regulations. Currently four of the Group's vessels have an AoC. The Group's activities fall within the latter part of an oil field’s life cycle. The majority of the Group's operations are related to maintenance and modification of installations on fields already in production, while some activity is also related to commissioning and decommissioning.

Currently all the contracts are timecharter contracts, meaning that the Group is operating the vessels for customers/oil companies and as such bears the risk for downtime which is caused by an error on the part of the Group. Historically the Group had bareboat contracts in Mexico with Cotemar, which operated the vessels for the end user Pemex.

6.5 THE FLEET The Group has a strong track record in carrying out demanding operations world wide, with first class operational performance and good safety results. With seven dynamically positioned, two anchored vessels, one thruster assisted moored vessel and one completed dynamically positioned vessel being preserved by Cosco for potential later delivery (Safe Eurus), the Group's fleet is versatile and able to operate in nearly all offshore environments. The Group is responsible for carrying out maintenance and five year Special periodic surveys (SPS) for the vessels in between contracts.

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Safe Boreas

Safe Boreas was built at Jurong Shipyard in Singapore g to the GVA 3000E design utilising GVA’s extensive semi-submersible design experience. The vessel is designed for worldwide operations in the harshest offshore environments including the North Sea and can operate both in DP and anchored mode, providing maximum cost efficiency and flexibility. Built to comply with stringent Norwegian and UK regulations, the accommodation incorporates two large atriums allowing natural daylight into the central cabins, mess room and recreational areas. Safe Boreas has been granted the Acknowledgement of Compliance (AoC) from the Norwegian Petroleum Safety Authority (PSA) allowing the vessel to operate in Norway. Safe Boreas was delivered from the yard in 2015. Main vessel data Registered name Safe Boreas Built 2015 Design GVA 3000E Max no of beds 450 (all in single cabins) Deck area approx. 2,100 m2 Gangway Telescopic hydraulic 38.5 m +/- 7.5 m Mooring system 12 point mooring system Station keeping DP3 Thrusters 6 x 4.4 MW Azimuthing Safe Zephyrus

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Safe Zephyrus was built at Jurong Shipyard in Singapore to the GVA 3000E design utilising GVA’s extensive semi-submersible design experience. The vessel is designed for worldwide operations in the harshest offshore environments including the North Sea. Built to comply with stringent Norwegian and UK regulations, the accommodation incorporates two large atriums allowing natural daylight into the central cabins, mess room and recreational areas. Safe Zephyrus has been granted the Acknowledgement of Compliance (AoC) from the Norwegian Petroleum Safety Authority (PSA) allowing the vessel to operate in Norway. Safe Zephyrus was delivered from the yard in Q1 2016. Main vessel data Registered name Safe Zephyrus Built 2016 Design GVA 3000E Max no of beds 450 (all in single cabins) Deck area approx. 2,100 m2 Gangway Telescopic hydraulic 38.5 m +/-7.5m Mooring system 12 point mooring system Station keeping DP3 Thrusters 6 x 4.4 MW Azimuthing Safe Notos

Safe Notos was built at Cosco to an enhanced Gusto MSC’s Ocean 500 design incorporating DP3 station keeping systems, 10-point chain mooring and variable draft operations in the harshest offshore environments, excluding Norway.

Safe Notos was delivered from the yard in Q1 2016.

Main vessel data Registered name Safe Notos Built 2016 Design GustoMSC’s Ocean 500 Max no of beds 500 Deck area approx. 1,500 m2 Gangway Telescopic hydraulic 38.5 m +/-7.5m

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Mooring system 10 point mooring system Station keeping DP3 Thrusters 6 x 3.7 MW Azimuthing Regalia

Regalia is a semi-submersible vessel able to work in all geographical areas, including harsh environments such as the UK and Norwegian Continental Shelves. Regalia has been granted the Acknowledgement of Compliance (AoC) from the Norwegian Petroleum Safety Authority (PSA) allowing the vessel to operate in Norway. Regalia underwent a major refurbishment in 2008/2009, extending the life of the vessel substantially. Main vessel data Registered name Regalia Built, upgraded 1985, 2003/2009 Design GVA 3000 - Enhanced Max no of beds 306 (NCS: 282) Workshop 380 m2 Power generation 19 560 kW (6 diesel generator sets) Gangway Telescopic Hydraulic 38m +/- 7.5m Station keeping NMD3 Thrusters 6 x 2.64 MW Azimuthing Safe Scandinavia

Safe Scandinavia is a versatile semi-submersible accommodation vessel capable of operating in all geographical areas including the UK Continental Shelf and Norwegian Continental Shelf. Safe Scandinavia has been granted the Acknowledgement of Compliance (AoC) from the Norwegian Petroleum Safety Authority (PSA) allowing the vessel to operate in Norway. Safe Scandinavia was built in 1984 at the Aker Verdal yard to an Aker H-3.2E design. The vessel was upgraded in 2003 and completed and life extension refurbishment in 2014.

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Safe Scandinavia completed a large scale conversion to a tender support vessel (‘TSV’) in 2016. Main vessel data Registered name Safe Scandinavia Built, upgraded 1984, 2003 / 2005 / 2014 Design Aker H-3.2E Max no of beds 583 (NCS: 292) (in accommodation mode) Power generation 6 780 kW (3 diesel generator sets) Gangway Telescopic Hydraulic 36.5m +/- 6.0m Mooring system 12 Point Chain Winches Station keeping Moored Safe Caledonia

Safe Caledonia is a thruster assisted moored semi-submersible accommodation vessel capable of operating in the most demanding geographical areas. The Safe Caledonia was built in 1982 at the GVA / Kockums yard in Sweden to a Pacesetter design, and completed a 20 year life extension in 2012/13. Main vessel data Registered name Safe Caledonia Built, upgraded 1982, 2004, 2012 Design Pacesetter Max no of beds 454 Deck area 350 m2 Power generation 16 900 KW (6 diesel generator sets) Gangway Telescopic 36.5 +/- 5.5 m Mooring system 10 Point Wire Winches Station keeping DP2 / POSMOOR Thrusters 4 x 2.4 MW Azimuthing

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Safe Lancia

Safe Lancia is a semi-submersible accommodation and service vessel. Safe Lancia is able to operate in benign and moderately harsh environments. Safe Lancia was built in 1982 at the GVA/Kockums yard in Sweden to a GVA 2000 design. Safe Lancia is currently located in Port Isabel USA. The vessel is cold stacked, sitting on seabed with no crew. Main vessel data Registered name Safe Lancia Built, upgraded 1984, 2003 Design GVA 2000 Max no of beds 605 Deck area 1 100 m2 Power generation 14 500 kW (6 diesel generator sets) Gangway Telescopic Hydraulic 27.5 + 6.5m /-5.5m Mooring system 7 Point Wire Winches Station keeping DP2 Thrusters 4 x 2.4 MW Azimuthing Safe Regency

Safe Regency is a purpose built semi-submersible accommodation and service vessel which was built in 1982 at the FELS yard in Singapore to a Pacesetter design. She was upgraded in 2003 and 2008. The vessel is able to operate in benign to moderately harsh environments. Safe Regency has transited from Aruba and is now preparing for lay-up in Curaçao. Main vessel data Registered name Safe Regency Built, upgraded 1982, 2003/2008 Design Pacesetter

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Max no of beds 780 Power generation 13 225 kW (6 diesel generator sets) Gangway Telescopic Hydraulic 36.5 m +/- 6m Mooring system 8 Point Wire Winches Station keeping DP2 Thrusters 4 x 2.4 MW Azimuthing Safe Concordia

Safe Concordia is a self-propelled semi-submersible accommodation and service vessel of twin hull configuration, capable of operating in benign to moderately harsh environments. Safe Concordia was built at the Keppel FELS shipyard in Singapore and was delivered in March 2005. Vessel data Registered name Safe Concordia Built 2005 Max no of beds 461 Design Deepwater Technology Group Deck area 1 300 m2 (laydown) Power generation 18 550 kW (5 diesel generator sets) Gangway Telescopic Hydraulic 29.5 +/- 5 m Mooring system 4 Point Wire Winches Station keeping DP2 Thrusters 4 x 2.5 MW Azimuthing Safe Astoria

Safe Astoria is a semi-submersible accommodation vessel capable of operating in benign and moderately harsh environments. Safe Astoria was converted to an accommodation and service vessel at Keppel FELS Shipyard in Singapore in 2004/2005. She is currently stacked in Asia.

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Main vessel data Registered name Safe Astoria Built, conversion 1983, 2005 Design Sedco 600 Max no of beds 349 Deck area 1 050 m2 (laydown) Workshop 551 m2 Power generation 6 115 kW (4 diesel generator sets) Gangway Telescopic 36.5 +/- 6m Mooring system 8 Point Wire Winches Station keeping Moored Safe Bristolia

Safe Bristolia is a semi-submersible accommodation and service vessel which can operate in benign and moderately harsh environments. Safe Bristolia was converted into a service/accommodation vessel at Yantai Raffles Shipyard in China in 2006. In 2007/2008 she underwent further refit and modification work to qualify her for work in the UK Continental Shelf. Main vessel data Registered name Safe Bristolia Built, conversion 1983, 2006 / 2008 Design Sedco 600 Max no of beds 587 Deck area 400 m2 (laydown) Workshop 340 m2 Power generation 6 420 kW (4 diesel generator sets) Gangway Telescopic 35.5 +/- 6m Mooring system 8 Point Wire Winches Station keeping Moored Safe Eurus Safe Eurus (sister vessel of Safe Notos) has been constructed to an enhanced Gusto MSC’s Ocean 500 design incorporating DP3 station keeping systems, 10-point chain mooring and variable draft for operations in the harshest offshore environments, excluding Norway. The Company has negotiated and agreed with Cosco deferred delivery of Safe Eurus to Q4 2019 (or such earlier time required by the Company).

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For more technical information about the fleet see: http://www.prosafe.com/fleet/category62.html

6.6 FLEET CONTRACT STATUS As at September 2016

6.7 RISK MANAGEMENT (SEE SECTION 2 FOR RISK FACTORS) Strategic risk Demand risk (clients) Most of the Group’s activities are centered around the production and maintenance phase of oil and gas fields. Traditionally, this represents the part of the value chain that has usually been least affected by oil price variations and associated fluctuations in the pace of oil companies’ investments and development. Nevertheless, in the current downturn, these activities have also clearly been affected with lower activity. The Group's vessels are able to operate in all important offshore regions of the world, which means that the Group’s risk is substantially diversified in geographical terms. Supply risk (competition) Aiming for the optimal combination of day rates and utilisation, and allocating the vessels between markets to achieve supply-demand balance, the Group is working continuously to secure the highest possible short and long-term return from its vessels. Non-strategic risk Asset and other liabilities risk The Company's insurance policies have been adopted with the aim of reducing the financial risks of any incidents and casualties, to the extent that such cover is available and reasonably priced. Risks are insured with appropriate levels of deductible as are standard in the industry and the Group shall, where possible, endeavour to retain no greater risks than are necessary or appropriate in the relevant circumstances. The Company's

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insurances cover damage to its vessels (both operated and non-operated), pollution and environmental risks, cargo, injury to crew, loss of revenue, third-party liabilities - including oil spill and wreck removal.,. Insurance is taken out with reputable international insurance companies and in accordance with good market practice. Cover under hull and machinery and loss-of-hire policies are related to the vessel’s estimated market value and the value or a substantial part (eg. 70%) of the value of the individual charter respectively, so that the impact of a possible loss on results is minimised. Cover for third party liability, personal injury to crew, oil spill and wreck removal is taken out though a Protection & Indemnity Club which insures mobile offshore units and follows applicable industry standards. The Group's has also taken out war risk insurance to cover physical damage and liability arising from war and terrorist actions. The Group employee’ insurances are taken out in accordance with industry standards. Liability insurances include general third party liability for onshore activities, directors and officers insurance, special contingency insurance and professional liability insurance, if required. Operational risk The Group works proactively and constructively with its customers and suppliers on setting in-house goals, making continuous improvements to its routines and procedures, so as to ensure that the Group delivers operational standards that are amongst the best in the offshore industry. Health Safety and Environment risk The Group's aims to avoid harm to personnel and equipment, as well as accidental discharges/emissions. Potential incidents are reported immediately and followed up to limit possible harm and prevent repetition. In addition, the Group endeavours to train its employees and to positively influence its partners so as to protect personnel and equipment from harm, and the natural environment from pollution caused by its own operations and those of its partners. Key personnel and crew risk Although measures are taken to reduce dependency on any individual employee, the Company may in certain situations be dependent on the competency and experience of key personnel. The Group works proactively to train and retain key personnel to avoid the negative consequences of such individuals leaving the Company. Hazard risk See Asset risk. Project execution and construction risk Analysis of project execution/construction risk is undertaken to consider the possibility of cost overruns and delays. Continuous improvement of systems and work processes is vital to manage this type of risk as is a focus on securing continuity in the organisation and key positions, and maintaining relations with subcontractors and equipment suppliers. Credit assessment of yards, sub-contractors and equipment suppliers is part of the Group's project evaluations and risk analyses. Technical risk Technical risk analysis involves an assessment of three critical factors. First, a thorough market analysis is conducted to provide guidance in terms of future demand for certain technical specifications. Secondly, the yard’s ability to deliver in line with these specifications is evaluated. Thirdly, the project’s fit with the overall business plan and strategic direction of the Group is established. Regulatory risk The Group works proactively and constructively with the relevant regulatory authorities to ensure that rules and regulations reflect a reasonably high standard for offshore accommodation vessels and operations, and to ensure that the relevant guidelines are adhered to. If relevant regulatory authorities change the rules and regulations there might be a risk that a specific Group vessel cannot operate in that specific country going forward or that certain modifications must be carried out to the relevant vessels to enable them to continue to operate in the specific country where such rules and regulations have changed. At the date of this prospectus, no such changes to rules and regulations are known to the Group. Legal risk

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The Group uses both internal and external legal resources aiming at protecting the Group's financial and other interests in the best possible manner. The Group´s internal and external legal counsel assist the Group, amongst other things (i) to comply with relevant rules and regulations; (ii) to take appropriate measures to protect assets; (iii) to avoid and manage contractual disputes, legal proceedings and other claims; and (iv) to mitigate contractual and other risks related to the Group's activities Interest rate risk Interest on debt is in principle floating, but has been hedged to reduce the variability of cash flows in the interest payments through the use of interest rate swap agreements. The Group evaluates the hedge profile in relation to the repayment schedule of its loans, the company’s portfolio of contracts, cash flow and cash in hand. The proportion hedged will normally lie between 75 and 100 % for all loans. Currency risk The Group is exposed to currencies other than USD associated with operating expenditure, capital expenditure, interest-bearing debt, tax, cash and deposits. Cash and deposits are mainly denominated in USD, GBP, EUR and NOK. Cash and deposits in currencies other than USD, are to a certain extent natural hedges for any GBP, EUR and NOK liabilities. The proportion of the total currency exposure hedged by use of financial derivatives will normally lie between 50% and 75% for the next 12-month period, by using forward contracts. Liquidity risk The Group is exposed to liquidity risk in a scenario when the Group’s cash flow from operations is insufficient to cover payments of financial liabilities. Liquidity and funding is managed on a Group level. In order to mitigate the liquidity risk, the Group makes active use of a system for planning and forecasting the development of its liquidity, and utilises scenario analyses to secure stable and sound development in order to maintain sufficient cash to cover its financial and operational obligations. The continued negative development in the oil and gas industry has increased the risk of reduced charter revenues in the short and mid term. This development has increased the liquidity risk compared to prior years and led to the Company initiating the Refinancing (see section 4 and 9.6). As of 31 December 2015, the Group's main financial liabilities had the following remaining contractual maturities:

Credit risk The Group is exposed to credit risk as it is financed by interest-bearing debt with defined maturities. For that reason, the Group makes active use of a system for planning and forecasting the development of its liquidity, and utilises scenario analyses to secure stable and sound development in order to maintain sufficient cash to cover its financial and operational obligations, and to ensure compliance with financial covenants. Capital management The primary objective of the Group's capital management is to ensure that it maintains a healthy capital structure in line with economic conditions. The Group manages the total of shareholder's equity and long term debt as their capital. The Group's main tool to assess its capital structure is the leverage ratio, which is calculated by dividing net interest-bearing debt (excluding debt related to newbuilds) including bank guarantees, by EBITDA over the last 12 months.

Per year 2016 2017 2018 2019 2020 →

Interest-bearing debt (downpayments) 1) 139,5 210,8 233,5 233,5 429,7Interest-bearing debt (interest including interest swaps) 2) 74,5 84,4 85,0 86,3 146,4Accounts payable and other current liabilities 17,8 0,0 0,0 0,0 0,0

Total 231,8 295,2 318,5 319,8 576,1

Per quarter 2016 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Total

Interest-bearing debt (downpayments) 1) 84,5 0,0 55,0 0,0 139,5Interest-bearing debt (interest including interest swaps) 2) 19,9 17,5 17,5 19,6 74,5Accounts payable and other current liabilities 17,8 0,0 0,0 0,0 17,8Total 122,2 17,5 72,5 19,6 231,8

1) In January 2016, the syndicate banks granted two voluntary skip options in an aggregate amount of USD 130 million for the USD 1,300 million credit facilities. Prosafe has the right to exercise the options until and including 31 December 2017.

2) Based on forecasted average debt, average LIBOR per 31 December 2015 and average weighted margin.

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Counter-party risk The Company's clients are mostly reputable national oil companies, super majors, majors and larger independent oil companies. Notwithstanding this fact the financial position of a potential counter-party is always evaluated when tendering for work or contracting with other vendors. An overall understanding and management of the above-mentioned risk factors is important in order to ensure stable value creation for Prosafe’s shareholders.

6.8 TREND INFORMATION Outlook The accommodation support segment is late cyclical by nature. Historically, more than three quarters of the work has been related to producing fields, whereas the remainder has been related to hook-up and commissioning of new fields. Accommodation support vessels are also used during decommissioning of offshore installations. The supply side is seeing significant growth in size during the period from 2012 to 2016 with the entry into the market of a number of new semi-submersible accommodation support vessels. However the growth is expected to be lower than earlier anticipated as a result of the extended down-cycle which may lead to both scrapping and delays or even cancellations of new builds. In addition there is scope for potential consolidation of vessel suppliers which may affect the number of available vessels in the market. 2015 saw a continued slow-down in contracting activity and the gross value of charter contracts, including clients’ extension options, was reduced by approximately 13 % to USD 1,595 million (USD 1,843 million). The industry has seen deferral of several projects, as well as focus on cash preservation by way of contract renegotiations and contract cancellations. As all providers of oil services are dependent on oil companies’ cash flow, reductions of spending plans have led to a substantial decrease in demand for oilfield services, including accommodation support vessels. This has increasingly been evident in all geographical markets. Despite the current down-turn and the supply side growth, the longer term prospects are promising as it is expected that field life extensions continue through enhanced oil recovery efforts. Further, in the years ahead new fields will come on stream in parallel with decommissioning of old platforms gradually becoming an interesting source of demand. In Mexico, the Group's ultimate client Pemex has been cutting spending in order to adjust its budget to an oil price of USD 25 per barrel. This development has considerably affected the Group's operations in this region. Contracts for vessels operating in Mexico were either not being renewed or were cancelled or suspended, which means that currently the Group does not have any vessels operating in Mexico. Future demand might result from new fields being developed in deeper waters offshore Mexico longer-term or from maintenance and construction medium-term. The near and medium term outlook is also uncertain in Brazil. Even though accommodation support vessels are mostly used for safety and maintenance purposes on fields that are already producing, the financial situation of Petrobras has inevitably resulted in reduced activity and as a result cancellation or renegotiation by Petrobras of contracts to preserve liquidity. The longer term outlook is, however, expected to present further opportunities. The general down turn in the market combined with in particular the non-extension of contracts in Mexico has led to reduced fleet utilisation and consequently reduced charter revenues for the Group. Total order backlog as of 31 December 2015 amounted to USD 997 million of which USD 598 million related to firm contracts and USD 399 million related to options. As of end 2015, secured utilisation for 2016 was 37%. For 2017 and 2018, secured utilisation was 19% and 16%, respectively. Market outlook remains uncertain in the near term, and although there are a number of prospects, 2017 is expected to be the low point in activity level. In general, the Company sees the demand returning more to the traditional demand related to maintenance and modification projects with shorter lead times compared to hook-up projects. In 2016-17, approximately 40% of the market was related to maintenance and modifications and about 60% related to hook-up and commissioning work. The Company expects a slowdown of work relating to hook-ups in 2018-2020 as a result of few decisions being made in respect of development of new fields in 2015-2017. However the Company expects to see an improvement from 2021, as more plans for development and

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operation (PDO) are expected going forward. In general, in the coming years the Company anticipates the demand split reverting to that prior to 2015, when maintenance and modification work accounted generally to approximately 75% of the market and hook-up and commissioning work was approximately 25% of the market. Cost reductions in the E&P sector are expected to contribute to more projects becoming economically viable. Combined with continued focus on asset integrity and maintenance on offshore installations, the Company expects a market recovery from 2018 onwards. The Group has scrapped three vessels and it is likely that other suppliers’ vessels will be scrapped and/or exit the high-end market of the North Sea. As a consequence of this, the supply-demand environment is expected to become more balanced by 2020. With a high quality and versatile fleet and an unmatched operational track record in respect of accommodation operations worldwide, the Group should be well placed in this competitive landscape.

6.9 EMPLOYEES Number of employees at year-end for the three consecutive years:

At the date of this Prospectus, the Group has approximately 706 employees. Due to the ongoing downturn the Group is currently in a down manning process.

7. MARKET OVERVIEW

7.1 INTRODUCTION The oil price has dropped significantly over the last few years. Consequently, investments in exploration, field developments and production have been cut dramatically which again has had a severe impact across several sectors of the oil services industry globally. The main cause for the recent decline in the oil price from the USD 100-120 level observed from 2011 – 2014 is that the market has experienced significant excess supply. This excess supply can be explained by several factors, including (i) increased US shale production, (ii) OPECs decision to defend market share and not reduce production as well as (iii) rising production levels from Iran after the lifting of export sanctions. Additionally, uncertainties related to weaker global demand, particularly form emerging markets has reinforced the supply/demand imbalance. As illustrated in the graph below, the impact from the recent events has brought the oil price down from USD 100-120 to around USD 40-50. Year-to-date, the oil price has recovered somewhat from the 13-year low level of USD 28 observed on 20. January 2016.

31 Dec 2015 31 Dec 2014 31 Dec 2013Onshore 189 170 133Offshore 662 626 437Total 851 796 570

Firm 727 645 393Agency/ 124 151 177ContractorsTotal 851 796 570

48

Brent spot (USD/bbl)

Source: Factset database as of 25 July 2016

The drop in the oil price has been a game changer for players in the oil services industry, as many oil companies have entered into a protective mode with focus on cost cutting and cash preservation. Consequently, spending reductions have led to a substantial decrease in demand across several sectors of the oil services industry globally. As illustrated in the graph below, global E&P spending was down 22% in 2015 and is expected to be negative also in 2016.

E&P spending growth (%)

Source: ABG Sundal Collier Research database as of 25 July 2016

7.2 THE GLOBAL ACCOMMODATION MARKET

7.2.1 Introduction The Group operates as owner and operator of accommodation vessels. Accommodation vessels are used wherever there is a need for additional accommodation, engineering, construction or storage capacity offshore. The vessels are positioned alongside the host installation and are connected by means of a telescopic gangway so that personnel can “walk to work”. Accommodation vessels enable oil companies to operate more efficiently compared to using accommodation quarters on the platform or the use of helicopters to shuttle workers. Companies in need of maintenance and modification (MMO) of existing installations, hook-ups and commissioning and decommissioning often require accommodation services. The Group's activities fall within the latter part of an oil field’s life cycle. The majority of the Group's operations are related to maintenance and modification of installations on fields already in production, while some activity is also related to commissioning and decommissioning.

0

20

40

60

80

100

120

140

160

Jan-

00Ju

l-00

Jan-

01Ju

l-01

Jan-

02Ju

l-02

Jan-

03Ju

l-03

Jan-

04Ju

l-04

Jan-

05Ju

l-05

Jan-

06Ju

l-06

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

16

USD

/bbl

1%

14% 20%

41%

29%

16% 27%

-15%

13% 15% 11% 7% 4%

-22% -30%-20%-10%

0%10%20%30%40%50%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E&P spending growth estimate

49

7.2.2 Type of work The demand for floating accommodation services is driven by the need to accommodate personnel carrying out offshore work. This overall demand is typically divided into three groups:

• Hook-up and commissioning of new platforms

• Modification and maintenance

• Decommissioning

Hook-up and commissioning

Hook-up and commissioning begin as soon as the facilities modules have been installed on the support vessels and consists of topside installation and preparing for production. The workforce increase significantly in this phase and accommodation vessels are therefore needed as a supplement to the limited number of permanent platform beds available. Work in relation to hook-ups and commissioning constitutes 10-30% of the mobile accommodation market and sanctioning of new projects as well as new discoveries will naturally be a key market driver as new projects trigger the need for accommodation vessels. Accommodation vessels are usually engaged for up to one year during new platform installations, but some markets, which are dominated by FPSOs, are less likely to use accommodation vessels. The visibility in this type of work is quite high compared to other type of work, due to long lead time on these opportunities (~2-3 years).

Modification and maintenance

A typical design lifetime of a platform is 20-25 years and platforms with an aging installed base are more likely to need maintenance or life-extension work. Platforms older than 15 years are hence viewed as the most relevant candidates for MMO. Larger modifications and maintenance campaigns such as turnaround trigger the need for accommodation vessels as this type of work need a lot of extra working personnel and expertise. For

Seismic

surveys

Pre-engineering/

concept

studies

Hook-ups /

commissioning

E&D

drilling Operations &

maintenance Decommissioning

AN OIL FIELD`S LIFE CYCLE

PROSAFE`S POSITION

Source: Page 16, “Offshore Floating Accommodation Market Drivers”, Report to Prosafe by Rystad Energy, April 20, 2016

Explo-

ration Production Develop-

ment Decomm-

issioning Hook-

up/commis-

sioning

50

accommodation support vessels, contracts related to maintenance and modification constitutes 60-80% of the mobile accommodation market. Historically, with undersupply in the accommodation market, demand has been driven a lot by available accommodation vessels. The lead time is often very short (average lead time is approximately one year, but could be as low as 180 days), and the visibility in this part of the market is consequently low. When it comes to the duration of a modification project, this varies a lot with the nature of the project, but on average, an accommodation vessel contract is engaged for six to eight months. In the recent downturn, some oil companies have deferred platform modification and maintenance as demand for this type of work also depends on the oil companies’ cash flow.

Decommissioning

Platforms typically consist of two parts for decommissioning purposes: the topside (the structure visible above the waterline) and the substructure (the parts between the surface and the seabed, or mudline). Normally, the operational parts on the topsides are usually taken to shore for re-cycle while the substructure is removed and sold as scrap for recycling or fixed in order to for used for installation at a different location. Decommissioning naturally triggers demand for accommodation units as this process is very demanding and requires an increased workforce. Currently, this part of the market function as a relatively smaller driver for accommodation units, with less than 10 % share of the mobile accommodation market. However, demand for additional beds could be triggered by increased decommissioning activity in the current market environment. A decline in the oil price could have a positive effect on the rate of decommissioning, as it might become unprofitable to produce remaining reserves. Furthermore, with an old base of installed platforms in some geographical markets, platform facilities are prone to shut down in the coming years.

7.2.3 Geographical overview Since the Group's fleet exclusively consists of semi-submersible accommodation vessels, the company typically operates in areas where other types of floating accommodation vessels (ships, barges) do not offer sufficient stability. The North Sea, Mexico and Brazil are the three core markets for semi-submersible accommodation vessels. Alongside these, the market for accommodation services also include promising areas outside Australia, the US Gulf of Mexico, Asia Pacific and West Africa. New areas and higher accommodation activity are a result of increased general offshore activity, combined with a higher global awareness concerning safety and quality issues. As a result, both factors are calling for higher specified accommodation vessels to support and secure offshore facilities, maintenance and production. Accommodation barges and monohull/ship-shaped vessels might be a cost efficient solution in the benign waters, but in harsh environment areas like the North Sea, the characteristics and capabilities of semi-submersibles are proven necessary. Furthermore, as the main driver for offshore accommodation is related to modification and maintenance, attractive markets are typically mature markets with an aging base of installed platforms.

51

Geographical overview

North Sea:

The environment in the North Sea is harsh and the basin is mature, which is good for demand for semi-submersible accommodation vessels. There are naturally high barriers to entry in this market, and only semi-submersibles can operate all year round. With an increasing average age of installed base of platforms, accommodation in connection with modification and maintenance constitutes the most important demand driver. The demand for accommodation vessels has, however, during recent years been driven mainly by new projects, such as Edvard Grieg, Ivar Aasen, Gina Krog and Martin Linge in Norway, as well as several other projects in the UK. Going forward, decommissioning in the UK is expected to increase future demand in accommodation vessels as a number of shutdowns in the UK is expected in the coming years. Tie-back development activity is Norway is also expected to increase in the coming years, but this is partly dependent on a positive development of the oil price. When tying fields to existing platforms, many changes are needed at the host platform and this might lead to additional maintenance campaigns. Mexico:

Mexico is a mature market, characterised by Pemex’s efforts to fight rapidly declining oil production, especially on the Cantarell field. An aging base of installed platforms generally require a high level of platform maintenance, but the market currently experiences reduced activity as Pemex now focus on cost reductions. Several planned projects were cancelled and deferred when Pemex adjusted its budget to an oil price of USD 25. Although recent developments have increased uncertainty in the near and medium term, the demand for accommodation vessels is expected to stabilize in the longer term. Brazil:

Brazil has represented a growing market for accommodation vessel capacity and (historically) low barriers to entry as Petrobras has accepted unconventional assets and operators. However, the projected new FPSOs to come on-stream in Brazil are mostly commissioned and it is not likely that they will use accommodation vessels in connection with hookup and commissioning. Demand is increasing somewhat for maintenance and modification in Campos with an installed and aging base. Demand from Santos may still be a few years out, with hook-ups and commissioning being the first to occur. On the negative side, Petrobras announced in January 2016 that the planned capital expenditure will be reduced in the coming years - a total reduction by more than 50 % compared to original plans. Moreover, Petrobras has also commented that it is in negotiating terms on existing contracts.

52

7.2.4 Semi-submersible accommodation fleet

There are several concepts for offshore accommodation. Accommodation barges and monohull/ship-shaped vessels, (often referred to as the low-end of the market), work well in benign waters. In harsher environments and deepwater areas, (often referred to as the high-end of the market), dynamically positioned semi-submersibles are unsurpassed. Accommodation concepts

In recent years, the worldwide fleet of accommodation vessels has experienced a strong growth in number of vessels. The impact of this supply growth is most visible in the low-end of the market, i.e. for smaller accommodation vessels of various types, as opposed to harsh environment and deepwater markets with higher entry barriers, such as the North Sea. Including vessels under construction, 29 vessels are expected in operation by December 2016, representing an increase of 12 vessels from 2012. In addition to new-builds, the supply side has seen an improvement in the quality of vessels as several existing vessels have been through refurbishments and life-extension programs. The growth in accommodation vessels is naturally driven by increased demand related to continuous growth in installed base and numerous new fields in production.

The Group is currently the largest player with 40-45% of the global fleet (i.e. supply), followed by Floatel International Ltd. and Cotemar, S.A. DE C.V.. Out of the 29 vessels in operation today, 16 units are capable of operating in the North Sea. The graph below sets out the number of existing semi-submersible accommodation vessels in the high-end of the market in which the Group is operating.

53

Semi-submersible accommodation vessels by owner

Source: Prosafe estimates as of 25 July 2016

The vessels are either provided on a time charter basis where the accommodation service company (i.e. the relevant Prosafe Group company) man and operate the vessels directly, or on a bareboat basis where the accommodation service company provides only the vessel to a third party who is then responsible to man and operate the vessel. The graph below sets out the average dayrate equivalent for semi-submersible accommodation vessels in the high-end of the market in which the Group is operating. Average dayrate (Prosafe fleet) – North Sea (USD / day)

Source: Prosafe

0

50 000

100 000

150 000

200 000

250 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e

54

8. ORGANISATION, BOARD OF DIRECTORS AND MANAGEMENT

8.1 EXECUTIVE MANAGEMENT

8.1.1 Executive management The executive management is responsible for the daily management and the operations of the Company. As of date of publication of this Prospectus, the Company’s executive management consists of the following individuals:

Stig Harry Christiansen, ACTING CHIEF EXECUTIVE OFFICER PROSAFE MANAGEMENT AS Mr Christiansen (born 1968) has been Acting Chief Executive Officer of the Group since April 2016. He holds an MBA in International Business Economics from the University of Aalborg, Denmark, and a Bachelor of Commerce from the University of Birmingham, UK. Mr Christiansen has more than 20 years of experience from management and finance positions in the oil and gas industry. He has been Chief Executive Officer of the international oil service provider Add Energy Group AS and Senior Vice President – Group Finance in Statoil. Mr. Christiansen was employed by the Group in the period from 1997 to 2005, the last five years of which as Chief Financial Officer for the Group. Robin Laird, ACTING CHIEF FINANCIAL OFFICER, PROSAFE OFFSHORE SERVICES PTE LTD Mr Laird (born 1963) has been Acting Chief Financial Officer of the Group since July 2016. He holds a BCom from Edinburgh University and is a chartered public accountant in Scotland. Mr Laird was appointed Vice President Finance in 1995. Before that, he held positions with Ben Line Group and KPMG in Edinburgh.

Georgina Georgiou, GENERAL MANAGER, PROSAFE SE Ms Georgiou (born 1956) has been General Manager of Prosafe SE since May 2011. She has a Bachelor of Laws from the University of London (SOAS) and qualified as a Solicitor in 1981. Ms Georgiou has 35 years experience in private practise and in various listed companies and industries, including British Airways, BTG and BP.

Ian Young, CHIEF OPERATING OFFICER, PROSAFE OFFSHORE LTD Mr Young (born 1966) has been with the Group since 1998 and has been Chief Operating Officer since June 2013. Mr Young has a BA Hons in Business Management from the Robert Gordon University. Mr Young served as a Marine Engineer in the Royal Navy until 1990 when he moved into the offshore flotel business. Since then, he has held a number of senior management positions both offshore and onshore.

Ryan Stewart, CHIEF COMMERCIAL OFFICER, PROSAFE OFFSHORE ACCOMMODATION LIMITED Mr Stewart (born 1973) joined in 2001 and has been Chief Commercial Officer of the Group since June 2013. He holds an LLM in Oil and Gas Law from the Robert Gordon University and a BSc in Engineering, also from The Robert Gordon University. Mr Stewart joined the Group in 2001 and has held several positions, last as Commercial Director. Prior to joining the Group, he held various positions in the North Sea oil industry. Eirik Fjelde, ACTING CHIEF INFORMATION OFFICER, PROSAFE MANAGEMENT AS Mr Fjelde (born 1971) has been Acting Chief Information Officer since July 2016. He joined the Group as IT Director in January 2013 and became Executive Director IT in June 2013. Mr Fjelde has a technical background and has 17 years of experience in consulting and management of consulting services, primarily from the oil and gas industry. Before joining the Group, he held the position of Business Analyst in Bouvet, specializing in management systems, business intelligence and real-time data for onshore/offshore decision support. The Company's registered address serves as the management's address in relation to their position in the Company.

8.1.2 Executive Management’s shareholdings Shares held by the Executive management as of the date of this Prospectus (including Shares held through private investment companies):

55

Name: Number of Shares:

Stig Harry Christiansen 0

Robin Laird 58 000

Georgina Georgiou 0

Ian Young 635

Ryan Stewart 25 173

Eirik Fjelde 554

The Company does not currently have any agreements with key employees concerning allocation of Shares, subscription rights, options and other forms of remuneration linked to Shares.

8.1.3 The Executive Management’s current and previous directorship and partnership

8.1.4 Conflict of interest There are no potential conflicts of interest between any duties to the Company of the members of the administrative, management or supervisory bodies, and their private interests and/or other duties. During the last five years preceding the date of this Prospectus no member of the Board of Directors or any executive management has:

• any convictions in relation to fraudulent offences;

• been involved in any bankruptcies, receiverships or liquidations in his/her capacity as a member of the administrative, management or supervisory bodies, as partner with unlimited liability, founder or senior manager and;

• received any official public incrimination and/or sanctions by statutory or regulatory authorities (including designated professional bodies) or ever been disqualified from a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct affairs of any issuer.

8.1.5 Corporate Governance Corporate governance, based on the principles set forth in the Norwegian Code of Practice for Corporate Governance (the "Corporate Governance Code"), dated October 30, 2014, is the basis for the activity of the Company. The Company’s corporate governance principles are based on, and comply with, the Corporate Governance Code with no significant deviations.

Name:

Current membership of the administrative management, supervisory bodies and/or partnerships (other than within the Group):

Previous membership of the administrative management, supervisory bodies and/or partnerships during the five years preceding the date of this Prospectus (other than within the Group):

Stig Harry Christiansen Board member Viking AS Chief Executive Officer, Add Energy Group AS

Robin Laird None None Georgina Georgiou Director Consulting Legal

Limited None

Ian Young None None Ryan Stewart None None Eirik Fjelde None None

56

8.1.6 Pension, severance pay and other obligations Certain members of the executive management have agreements on severance pay. Under these agreements, the Company guarantees a remuneration corresponding to the base salary received at the time of departure for a period of up to one or two years (depending on the agreement) after the normal six-month period of notice. As of 31 December 2015, the Company had USD 0.5 million in gross pension obligations related to management. The Company does not have a current employee share option programme, and there are no outstanding options under the former programme as of the date of this Prospectus.

8.1.7 Remuneration In 2015, the Group paid the following in remuneration to members of the management, which the Company is required to disclose pursuant to applicable law:

Senior officers

Other (USD 1 000) Year Salary Bonus 1) Pension 2) benefits Karl Ronny Klungtvedt (CEO in 2015) 2015 498 213 159 28 Robin Laird (Deputy CEO in

2015)

2015 523 251 79 189 Stig Christiansen (CFO from Aug 2015) 2015 117 0 18 10 Sven Børre Larsen (CFO to Aug 2015) 2015 227 127 29 25

1) Payment based on previous year's achievements 2) For Karl Ronny Klungtvedt, the figures include increase in early retirement pension liability

8.2 BOARD OF DIRECTORS The overall management and conduct of the affairs of the Company is the responsibility of the Board which oversees the proper organisation of the business. The Board usually schedules six meetings annually (of which four are quarterly meetings) in advance with a tentative agenda and holds additional meetings on an ad hoc basis as and when necessary to discuss commercial, financial and other issues arising and for strategic planning. The auditors attend the Board meeting at least once a year. The members of the Board are elected by the General Meeting and the Board has no powers under the Articles of Association to appoint any member to the board of directors, neither as an additional member or to fill a vacancy. The General Meeting also resolves the annual remuneration of the Board based on the proposal made by the Election Committee. At an extraordinary general meeting of the Company held on 15 March 2016, the shareholders resolved that the number of directors would be increased from six, to up to seven. The Company’s current Board is comprised of five members, all of which have been elected by the shareholders. Please refer to section 8.2.1 below. Pursuant to the Articles of Association, all directors serve for a period of two years unless the General Meeting decides that a director should serve for a specified period of less than two years.

8.2.1 Members of the Board of Directors The Board of Directors currently comprise the following persons: Board member: Director since: Current term expires: Glen Ole Rødland

2016 2017

Roger Cornish

2009 2017

Carine Smith Ihenacho

2011 2017

Nancy Ch. Erotocritou

2014 2017

Anastasis Ziziros

2014 2017

57

The Company's registered address serves as the Board's address in relation to their position in the Company. Glen Ole Rødland, Interim Chairman Born:1964 Mr Rødland has 25 years experience in shipping, oil and gas and other industries. He has extensive experience as an analyst and in corporate finance generally. Currently, Mr Rødland is a senior partner at HitecVision. Mr Rødland also has considerable experience as a board member and chairman of several Norwegian public companies and other international companies. He is currently Chairman of Aqualis ASA and board member in Spectrum ASA . Mr. Rødland’s qualifications include an MBA and Postgraduate Studies in Finance completed at the Norwegian School of Economics and Business Administration (NHH) and UCLA. Roger Cornish Born:1948 Mr Cornish has 16 years previous experience as a geologist with Shell and BP. Thereafter, he was Chairman for five years and CEO for 12 years at Interconnector UK. He also held posts as President and General Manager of BP Exploration in Indonesia, Chief Representative and General Manager for BP in Egypt and was Regional Manager for Shell Canada Minerals. He is currently a Non-Executive Director of Gasrec Ltd. Mr Cornish holds a Higher National Diploma in Business Studies and a BSC (Hons) Geology from the University of Leicester. Carine Smith Ihenacho Born:1962 Ms Smith Ihenacho has an extensive legal commercial background, including being the General Counsel (GC) of Aibel Group. Past positions include in the European Bank of Reconstruction and Development (EBRD), the law firm, BAHR, Kvaerner and Norsk Hydro. Currently she is Vice President Legal for Statoil ASA, where she is responsible for legal support to Statoil’s international business. Ms Smith Ihenacho is a graduate of University of Oslo, the Norwegian School of Economics and Business Administration, and has a Masters of Law (LL.M.) from Harvard University. She has served as an independent Non-Executive Director in several other boards, including BW Offshore and Prosafe Production. Nancy Ch. Erotocritou Born:1983 Ms Erotocritou is a partner at the international law firm Harneys (Harneys Aristodemou Loizides Yiolitis LLC) and has extensive legal experience advising in the fields of banking and finance, corporate and capital markets transactions. Ms Erotocritou holds a LLB from Sheffield University, an LLM in International Corporate and Commercial law from University College London and has completed the Legal Practice Course (LPC) of the Law Society of England and Wales. She is a Cyprus qualified lawyer and member of the Cyprus Bar Association and the Women’s International Shipping and Trading Association. She is the exclusive banking and finance representative of the Women’s Law Network in Cyprus and is a member of the board of directors and executive committee of the Norwegian Business Association in Cyprus. Anastasis Ziziros Born:1972 Mr Ziziros has extensive experience in international debt capital markets, treasury and corporate finance and has worked for a number of financial institutions including London Forfaiting and Morgan Stanley. He is currently a member of the executive management team at Joannou & Paraskevaides (Overseas) Limited, a leading international engineering and construction company with a strong involvement in the energy sector. Mr Ziziros holds a BA (Hons) in Economics, a MA in Economics from the University of Cambridge and a MBA from INSEAD. He has held a number of directorships and is currently a Non-Executive Director of Airport International Group, Jordan and TFI Public Company Limited and is a member of various audit committees. None of the members of the Board of Directors has a service contract with the Company or any of its subsidiaries providing for benefits upon termination of their role as Board members.

8.2.2 Director’s shareholdings Shares held by members of the Board of Directors as of the date of this Prospectus (including Shares held through private investment companies): Name of director: Number of Shares: Glen Ole Rødland

0*

Roger Cornish 7 000

58


0


0

AnastasisZiziros

0

*Mr. Rødland has a small indirect ownership interest in Prosafe due to his indirect ownership interest in HitecVision VII, L.P.

8.2.3 The Board of Directors current and previous directorship and partnership Over the five years preceding the date of this Prospectus, the Board of Directors hold or have held the following directorships and partnerships:

8.2.4 Election committee The Election Committee (otherwise known as the nomination committee) is an independent committee elected by the shareholders, whose responsibility is, (amongst other things), to nominate candidates to be elected by the shareholders as members of the Board of Directors. As far as possible, the Election Committee shall announce its nominations in the shareholders notice of the Company’s Annual General Meeting or any relevant Extraordinary General Meeting. The Election Committee also proposes remuneration of the members of the Board of Directors and the Election Committee. The Election Committee consists of the following members:

Name of director:

Current membership of the administrative management, supervisory bodies and/or partnerships:

Previous membership of the administrative management, supervisory bodies and/or partnerships during the five years preceding the date of this Prospectus:

Glen Ole Rødland Chairman of Aqualis ASA

Board member of Spectrum ASA

Senior Partner HitecVision

Chairman Weifa ASA, Spectrum ASA, NEL AS and Prospector Offshore Drilling SA Board Member Prospector Offshore Drilling SA Partner at Ferncliff TIH

Roger Cornish Non-Executive Director of Gasrec Ltd. Non-executive Chairman of Interconnector (UK) Ltd

Managing Director with M E Zukerman Investments and Co

Carine Smith Ihenacho Vice President Legal for Statoil ASA Non-Executive Director BW Offshore, Prosafe Production and AWilhelmsen AS, Chief Compliance Officer Statoil ASA

Nancy Ch. Erotocritou Partner Harneys (Harneys Aristodemou Loizides Yiolitis LLC) and Director Norwegian Business Association in Cyprus (NBAC) Limited

Non-Executive Director Songa Offshore SE

Anastasis Ziziros Member of the executive management team at Joannou & Paraskevaides (Overseas) Limited and Non-Executive Director of Airport International Group, Jordan and TFI Public Company Limited

None

59

Thomas Raaschou (chairman) Annette Malm Justad

8.2.5 Audit committee The Board of Directors has elected an Audit Committee amongst the members of the Board of Directors consisting of:

Anastasis Ziziros (chairman)


The audit committee's work includes the following:

• preparation for the Board of Directors' supervision of, inter alia, the Company’s financial reporting process, internal accounting controls and auditing procedures.

• following up on material investments’ capital expenditure

• monitoring the systems for internal control, risk management and special projects and making appropriate recommendations to the Board of Directors;;

• having continuous contact with the Company's auditor regarding the audit of the annual accounts; and

• reviewing and monitoring the independence of the Company's auditor, including in particular the extent to which services other than auditing provided by the auditor or the audit firm represent a threat to the independence of the auditor.

8.2.6 Compensation committee The Board of Directors has elected a Compensation Committee which is responsible for recommending policies and programs that govern the Company’s compensation and incentive award plans. The Compensation Committee consists of: Roger Cornish (chairman) Glen Ole Rødland

8.2.7 Remuneration The Board of Directors received the following remuneration in 2015: Board of directors

Board

(USD 1 000) Year fees 1)

Harald Espedal (chair from Oct 2015)

2015 25

Ronny Johan Langeland (chair to Oct 2015) 2015 113

Christian Brinch

2015 119

Roger Cornish

2015 101

Anastasis Ziziros

2015 87


2015 85


2015 81

1) IF APPLICABLE, FIGURES INCLUDE FEES RELATING TO AUDIT COMMITTEE AND COMPENSATION COMMITTEE APPOINTMENTS, AND ANY APPOINTMENT AS A BOARD REPRESENTATIVE OF THE ELECTION COMMITTEE.

60

9. FINANCIAL INFORMATION

The following discussion of the financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto that have been included elsewhere in this Prospectus. The selected consolidated financial data presented below has been derived from the Group’s audited consolidated financial statements as of and for the years ended 31 December 2013, 2014 and 2015 and the Group’s unaudited interim consolidated financial statement for the 3 and 6 months ended 30 June 2016 (with comparable figures for the 3 and 6 months ended 30 June 2016), prepared in accordance with International Financial reporting Standards (IFRS) as adopted by the European Union (EU). The following discussion contains forward-looking statements that are based on current assumptions and estimates by the Group’s management regarding future events and circumstances. The Group’s actual results could differ materially from those expressed or implied by the forward-looking statements as a result of many factors, including those described in Section 2 “Risk factors”. Annual reports including audited historical financial information and audit reports with respect to 2013, 2014, and 2015, and unaudited interim financial reports for Q2 for 2016 and 2015, are incorporated by reference to this Prospectus (see Section 15.2 “Incorporation by reference”). The financial reports and information are also available at the Company’s website www.prosafe.com and at www.newsweb.no under the ticker PRS.

9.1 ACCOUNTING PRINCIPLES The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU. The IFRS principles have been applied consistently for 2013, 2014, 2015 and 2016. The Group’s accounting principles and notes are incorporated by reference to this Prospectus (see Section 15.2 “Incorporation by Reference”).

9.2 HISTORICAL FINANCIAL ACCOUNTS The selected historical consolidated financial information set forth in this section has been derived from the Group’s audited consolidated financial statements for the financial years 2013, 2014 and 2015 and unaudited interim financial reports for Q2 2016 and Q2 2015. The selected historical consolidated financial information for the Group set forth in this section should be read in conjunction with the financial statements as incorporated by reference in this Prospectus (see section 15.2 “Incorporation by Reference”).

9.2.1 Income statement

(Figures in USD million)

Q2 16

Q2 15

6M 16

6M 15

2015

2014

2013

Operating revenues 115.4 92.5 218.4 216.7 474.7 548.7 523.5 Operating expenses (53.8) (51.0) (111.5) (102.8) (211.8) (236.1) (216.9) Operating profit before depreciation and impairment 61.6 41.5 106.9 113.9 262.9 312.6 306.6 Depreciation (29.1) (18.7) (52.5) (35.7) (86.5) (64.3) (61.5) Impairment 0.0 0.0 0.0 0.0 (145.6) 0.0 0.0

Operating profit

32.5 22.8 54.4

78.2 30.8 248.3 245.1

Interest income 0.1 0.1 0.1

0.1 0.2 0.3 1.3 Interest expenses (18.6) (12.8) (38.5)

(23.0) (41.6) (37.3) (34.2)

Other financial items (7.9) 5.7 (8.3)

(10.2) (29.5) (20.0) (8.5)

Net financial items (26.4) (7.0) (46.7)

(33.1) (70.9) (57.0) (41.4)

Profit/(Loss) before taxes

6.1 15.8 7.7 45.1 (40.1) 191.3 203.7

Taxes (0.9) (3.6) (4.3)

(5.9) (10.5) (12.5) (4.6)

Net (loss)/profit 5.2 12.2 3.4 39.2 (50.6) 178.8 199.1

EPS 0.02 0.05 0.01 0.17 (0.21) 0.76 0.85 Diluted EPS 0.02 0.05 0.01 0.17 (0.21) 0.76 0.85

61

9.2.2 Balance sheet

(Figures in USD million) 30.06.16 31.12.15 30.06.15 31.12.14 31.12.13

Goodwill

226.7 226.7 226.7 226.7 226.7

Vessels

1 559.0 1 578.6 1 611.5 1 027.3 946.9

New builds

654.9 228.5 211.1 311.8 248.9

Other non-current assets

4.3 4.9 6.0 5.7 4.9

Total non-current assets

2 444.9 2 038.7 2 055.3 1 571.5 1 427.4 Cash and deposits

68.2 57.1 94.9 122.4 113.4

Other current assets

86.6 91.4 91.5 122.9 79.1

Total current assets

154.8 148.5 186.4 245.3 192.5

Total assets

2 599.7 2 187.2 2 241.7 1 816.8 1 619.9

Share capital

72.1 72.1 65.9 65.9 65.9

Other equity

606.4 643.1 694.7 682.6 673.8

Total equity

678.5 715.2 760.6 748.5 739.7 Interest-free long-term liabilities 98.4 58.9 59.4 55.9 25.1

Interest-bearing long-term debt 1 520.7 1 107.5 1 185.6 830.1 779.6

Total long-term liabilities

1 619.1 1 166.4 1 245.0 886.0 804.7 Other interest-free current liabilities 106.1 166.1 203.1 182.3 75.5

Current portion of long-term debt 196.0 139.5 33.0 0.0 0.0

Total current liabilities

302.1 305.6 236.1 182.3 75.5

Total equity and liabilities

2 599.7 2 187.2 2 241.7 1 816.8 1 619.9

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9.2.3 Cash flow statement

(Figures in USD million) Q2 16 Q2 15

Year ended 31

December 2015

Year ended 31

December 2014

Year ended 31

December 2013

(Loss)/Profit before taxes

6.1 15.8 (40.1) 191.3 203.7

Unrealised currency (gain)/loss on debt (2.8) 9.8 (56.6) (83.7) (27.1)

Loss on sale of non-current assets 0.0 0.0 1.4 2.3 2.4

Depreciation

29.1 18.7 86.5 64.3 61.5

Impairment

0.0 0.0 145.6 0.0 0.0

Financial income

(0.1) (0.1) (0.2) (0.3) (1.3)

Financial costs

18.6 12.8 41.6 37.3 34.2

Change in working capital

(4.8) 9.3 15.3 63.0 5.8

Other items from operating activities (1.7) (1.1) (22.0) (25.9) (11.3)

Net cash flow from operating activities 44.4 65.2 171.5 248.3 267.9 Acquisition of tangible assets (26.1) (177.6) (700.7) (211.0) (227.2)

Proceeds from sale of tangible assets 0.4 0.0 0.0 0.3 16.4

Interests received

0.1 0.1 0.2 0.3 1.3

Net cash flow from investing activities (25.6) (177.5) (700.5) (210.4) (209.5) Proceeds from new interest-bearing debt 0.0 80.0 1 290.0 332.2 404.1

Repayment of interest-bearing debt (3.0) 0.0 (816.5) (198.0) (407.8)

New share issue

0.0 0.0 65.8 0.0 128.9

Dividends paid

0.0 (11.4) (34.0) (125.8) (139.6)

Interests paid

(18.6) (12.8) (41.6) (37.3) (34.2)

Net cash flow from financing activities (21.6) 55.8 463.7 (28.9) (48.6)

Net cash flow

(2.8) (56.5) (65.3) 9.0 9.8 Cash and deposits at beginning of period 71.0 151.4 122.4 113.4 103.6

Cash and deposits at end of period 68.2 94.9 57.1 122.4 113.4

9.2.4 Statement of changes in equity

(Figures in USD million) Q2 16 Q2 15 2015 2014 2013

Equity at beginning of period 682.5 745.1 748.5 739.7 516.3

New share issue

0.0 0.0 65.8 0.0 128.9

Comprehensive income for the period (4.0) 26.9 (65.1) 134.6 234.1

Dividends

0.0 (11.4) (34.0) (125.8) (139.6)

Equity at end of period

678.5 760.6 715.2 748.5 739.7

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9.3 OPERATING AND FINANCIAL REVIEW The management’s comments to the operational development and financial statements for the fiscal years 2013, 2014, 2015 and Q2 2015 and Q2 2016 are set out below. The figures in brackets correspond to the comparative numbers from the previous financial period.

9.3.1 Financial period ended 30 June 2016 Income statement Second quarter The fleet utilisation rate in the second quarter of 2016 was 41 per cent (Q2 2015: 58 per cent). This is a low utilisation level for a second quarter and reflects the current difficult market situation (however, positive long-term market outlook from accumulating demand and anticipated improved market balance). Revenues for the second quarter of 2016 were USD 115.4 million (USD 92.5 million). This increase reflects that units which generate a relatively high day rate have been on contract during the second quarter this year as opposed to last year. This has been partly offset by the finalisation of the Gulf of Mexico contracts which generated relatively low day rates. Operating expenses increased slightly to USD 53.8 million (USD 51 million). Cost saving initiatives implemented in 2015/2016 have reduced operating expenses in the second quarter. This effect is however to a large degree offset by non-recurring costs relating to the vessels which previously operated in the Gulf of Mexico. EBITDA increased to USD 61.6 million (USD 41.5 million). This improvement is mainly due to higher average day rates as described above. Depreciation has increased to USD 29.1 million (USD 18.7 million) mainly due to the new build Safe Boreas and the Safe Scandinavia TSV project. Operating profit came to USD 32.5 million (USD 22.8 million). Net financial expenses for the second quarter were USD 26.4 million (USD 7.0 million). This change is mainly due to currency effects and higher interest costs. Net profit amounted to USD 5.2 million (USD 12.2 million). 6M ending 30 June 2016 Revenues for the period were USD 218.4 million (USD 216.7 million). This increase reflects that units which generate a relatively high day rate have been on contract this year as opposed to last year. This has been partly offset by the finalisation of the Gulf of Mexico contracts which generated relatively low day rates. Operating expenses increased slightly to USD 111.5 million (USD 102.8 million). Cost saving initiatives implemented in 2015/2016 have reduced operating expenses, but this effect is to a large degree offset by non-recurring costs relating to the vessels which previously operated in the Gulf of Mexico. EBITDA increased to USD 106.9 million (USD 113.9 million). Depreciation has increased to USD 52.5 million (USD 35.7 million) mainly due to the new build Safe Boreas and the Safe Scandinavia TSV project. Operating profit came to USD 54.4 million (USD 78.2 million). Net financial expenses for the period were USD 46.7 million (USD 33.1 million). This change is mainly due to higher interest costs. Net profit amounted to USD 3.4 million (USD 39.2 million). Balance sheet Total assets at 30 June amounted to USD 2,599.7 million (USD 2,241.7 million). Total shareholders’ equity amounted to USD 678.5 million (USD 760.6 million), resulting in a book equity ratio of 26.1 % (33.9 %). Net interest-bearing debt stood at USD 1,648.5 million (USD 1,123.7 million).

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Negative fair value of interest rate swap agreements amounted to USD 88.2 million and is included in interest-free long-term liabilities. Negative fair value of forward exchange contracts equalled USD 10.7 million and is included in other interest-free current liabilities. Cash flow Net cash flow in the second quarter equalled USD 2.8 million negative (USD 56.5 million negative). Net cash flow from operating activities was USD 44.4 million, and is mainly the net effect of EBITDA less currency effects and less change in working capital. Net repayment of interest-bearing debt equalled USD 3 million (USD 80 million increase). Investments in tangible assets totalled USD 26.1 million (USD 177.6 million). Net cash flow in the six months ending 30 June 2016 equalled USD 11.1 million (USD 27.5 million negative). Net cash flow from operating activities was USD 38.3 million, and is mainly the net effect of EBITDA less currency effects and less change in working capital. Repayment of interest-bearing debt equalled USD 32.9 million (USD 701.5 million), whereas proceeds from new interest-bearing debt amounted to USD 503.3 million (USD 1,110 million). Investments in tangible assets totalled USD 459.6 million (USD 519.5 million). As of 30 June 2016, cash and deposits amounted to USD 68.2 million. There are no legal or economic constraints, e.g. taxation consequences, on cash dividends from subsidiaries to the parent company which would have any impact on the company’s ability to meet its cash obligations.

9.3.2 Financial year ended 31 December 2015 Income statement Operating revenues totalled USD 474.7 million in 2015 (2014: USD 548.7 million), with utilisation of the fleet dropping to 70 % (87 %). This is a relatively low utilisation level and reflects the current difficult market situation. Charter revenues and non-charter revenues reached USD 425.4 million (USD 481.2 million) and USD 49.3 million (USD 67.5 million), respectively. Revenues in 2015 were lower than in 2014 as a consequence of fleet utilisation of 70% in 2015 compared to 87% in 2014. This compares to an average fleet utilisation of just over 80% over the last few years. The main reason for the reduction in utilisation was non-extension of the contract relating to Jasminia in Mexico and the yard stay for the Safe Scandinavia where she was undergoing conversion to a tender support vessel (TSV) at Ølensvåg in Norway. The vessel is now on contract for Statoil Petroleum AS at the Oseberg Øst field on the Norwegian Continental Shelf. The main markets for the Group's vessels are currently the North Sea and Brazil, serving primarily oil and gas operating companies as end clients on projects typically related to installation or maintenance and modification of offshore oil and gas fields. The vessels are either provided on a time charter basis where the Group man and operate the vessels directly, or on a bareboat basis where the Group provides only the vessel to a third party who is then responsible to man and operate the vessel. Total operating expenses decreased to USD 211.8 million (USD 236.1 million), largely as a result of the lower fleet utilisation. Depreciation increased to USD 86.5 million (USD 64.3 million) as a result of life extension investments of several vessels, as well as the delivery of the new build Safe Boreas in Q1 2015. In addition, there was an impairment charge of USD 145.6 million in the 2015 accounts related to Jasminia, Safe Hibernia, Safe Britannia, Safe Regency, Safe Lancia, Safe Bristolia, Safe Astoria and Safe Concordia. Compared to the Q4 2015 report published on 4 February 2016, the final accounts for 2015 contain an additional impairment charge of USD 136.2 million. The resulting operating profit amounts to USD 30.8 million (USD 248.3 million). Net interest expenses totalled USD 41.4 million (USD 37.0 million). This increase is mainly due to higher interest-bearing debt following the delivery and financing of the new build Safe Boreas in 2015. In accordance with IFRS, interest costs totalling USD 12.8 million (USD 7.9 million) have been allocated to new build and refurbishment projects and consequently capitalised as part of the vessel investment costs.

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Other financial items amounted to USD -29.5 million (USD -20.0 million). This figure includes changes in value of financial currency hedging instruments and currency gains and losses. The figure also includes USD 12.8 million in amortised borrowing costs related to the new builds. Taxes for 2015 were USD 10.5 million (USD 12.5 million). Net loss amounted to USD 50.6 million (net profit of USD 178.8 million), resulting in basic and diluted earnings per share of USD -0.21 (USD 0.76). Balance sheet Total assets amounted to USD 2,187.2 million (USD 1,816.8 million) at the end of 2015. As at year-end 2015, the Group had total liquid assets of USD 57.1 million (USD 122.4 million). The liquidity reserve (liquid assets plus undrawn credit facilities) totalled USD 157.1 million (USD 337.4 million). Total shareholders’ equity amounted to USD 715.2 million (USD 748.5 million), resulting in a book equity ratio of 32.7 % (41.2 %). Interest-bearing debt amounted to USD 1,247 million (USD 830.1 million) at year-end. The interest-bearing debt agreements are subject to termination, repayment or buy back clauses in the event of a change of control of the Company (as control is defined in the relevant agreements). In February 2015, the Company secured a new credit facility of USD 1,300 million for the refinancing of the existing USD 1,100 million and USD 420 million credit facilities. The credit facility, which has a maturity of seven years with semi-annual amortisations of USD 65 million, consists of two term loan tranches totalling USD 800 million (drawn on closing) and USD 200 million and a revolver loan tranche of USD 300 million. The USD 200 million tranche was drawn on delivery of the Safe Zephyrus in January 2016. In December 2015, Prosafe raised NOK 590 million in a private placement of Shares. The private placement was over-subscribed and supported by existing shareholders. Cash flow Net cash flow equalled USD 65.3 million negative (USD 9 million positive) in 2015. Net cash flow from operating activities was USD 171.5 million, and is mainly the net effect of EBITDA plus change in working capital less currency effects and tax payments. Interest-bearing debt increased by USD 473.5 million (USD 134.2 million) mainly as a result of the delivery of Safe Boreas and the TSV project. Repayments of debt totalled USD 816.5 million (USD 198.0 million) and gross increase in borrowing amounted to USD 1,290.0 million (USD 332.2 million). Investments in tangible assets totalled USD 700.7 million (USD 211.0 million). The investments in 2015 mainly relate to the delivery of the new build Safe Boreas, upgrade of the Safe Scandinavia to a tender support vessel (TSV), project expenses related to three new build vessels and the five-year special periodic survey (SPS) for the Safe Bristolia and the Safe Concordia. The cash inflow relating to the share issue in December 2015 amounted to USD 65.8 million. During 2015, dividends of USD 34 million were paid to shareholders. As of 31 December 2015, cash and deposits amounted to USD 57.1 million and the availability under the credit facilities totalled USD 1,533 million (USD 388 million undrawn credit lines). Emphasis of matter The auditors, without qualifying their audit opinion expressed on the financial statements for the year ended 31 December 2015, drew attention to the Group’s and the Company’s financial position, which along with other matters referred to in notes 24 and 25 of the Group’s financial statements and note 16 and 17 of the Company’s financial statement indicated a material uncertainly as the Group’s and the Company’s ability to continue as a going concern. The Auditors report is included in pages 88 – 89 in the Company’s 2015 annual report which is incorporated by reference to this Prospectus in section 15.2

9.3.3 Financial year ended 31 December 2014 Income statement Operating revenues totalled USD 548.7 million in 2014 (USD 523.5 million in 2013), with utilisation of the fleet rising to 87 % (83 %). Charter revenues reached USD 481.2 million (USD 469.2 million), and non-charter revenues increased from USD 54.3 million to USD 67.5 million.

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Total operating expenses increased to USD 236.1 million (USD 216.9 million), largely as a result of the higher activity level. Depreciation increased to USD 64.3 million (USD 61.5 million). The resulting operating profit amounts to USD 248.3 million (USD 245.1 million). Net interest expenses totalled USD 37.0 million (USD 32.9 million). This increase is mainly due to higher interest-bearing debt. In accordance with IFRS, interest costs totalling USD 7.9 million (USD 4.5 million) have been allocated to new build and refurbishment projects, and consequently capitalised as part of the vessel investment costs. Net other financial items amounted to USD -20 million (USD -8.5 million). These figures include the net effect from changes in value of financial currency hedging instruments and revaluation of NOK denominated bond loans. Taxes for 2014 were USD 12.5 million (USD 4.6 million). This increase is mainly due to increased tax on operations on the UK continental shelf. Net profit amounted to USD 178.8 million (USD 199.1 million), resulting in diluted earnings per share of USD 0.76 (USD 0.85). Balance sheet Total assets amounted to USD 1 816.8 million (USD 1 619.9 million) at the end of 2014. As at year-end 2014, the Group had total liquid assets of USD 122.4 million (USD 113.4 million). The liquidity reserve (liquid assets plus undrawn credit facilities) totalled USD 337.4 million (USD 486.4 million). Total shareholders’ equity amounted to USD 748.5 million (USD 739.7 million), resulting in a book equity ratio of 41.2 % (45.7 %). Interest-bearing debt amounted to USD 830.1 million (USD 779.6 million) at year-end. Repayments of debt totalled USD 198 million (USD 407.8 million), while gross increase in borrowing amounted to USD 332.2 million (USD 404.1 million). In May 2014, the company secured a new credit facility which has a maturity of seven years, consists of two tranches of USD 144 million (USD 288 million in total) that can be drawn upon delivery of the two new builds, Safe Notos and Safe Eurus. The availability under each tranche is reduced quarterly with USD 3 million, starting 3 months after delivery of the tranche security. The annual interest rate on the credit facility is 2.25 % above 3-month LIBOR. In February 2015, the company also secured a new credit facility of USD 1 300 million for the refinancing of the existing USD 1 100 million and USD 420 million credit facilities. The credit facility, which has a maturity of seven years, consists of two term loan tranches totalling USD 800 million (drawn on closing) and USD 200 million (drawn on delivery of the Safe Zephyrus) and a revolver loan tranche of USD 300 million. The availability under the term loan tranches is reduced semi-annually, starting 6 months after delivery of the tranche security, with an amount that reduces the term loan commitments to zero by the final maturity. The annual interest rate on the credit facility is 1.90 % above 3-month LIBOR for the first five years and 2.15 % above 3-month LIBOR thereafter. Cash flow Net cash flow equalled USD 9 million (USD 9.8 million) in 2014. Net cash flow from operating activities was USD 248.3 million, and is mainly the net effect of EBITDA plus change in working capital less currency effects and tax payments. Interest-bearing debt increased by USD 134.2 million (USD 3.7 million decline). During 2014, dividends of USD 125.8 million (USD 139.6 million) were paid to shareholders. Investments in tangible assets totalled USD 211 million (USD 227.2 million). The investments in 2014 include the upgrade of Safe Scandinavia and project expenses related to four new build vessels. As of 31 December 2014, cash and deposits amounted to USD 122.4 million and the availability under the credit facility totalled USD 655 million (USD 215 million undrawn credit lines).

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9.3.4 Financial year ended 31 December 2013 Income statement Operating revenues totalled USD 523.5 million in 2013 (USD 510.4 million in 2012), with utilisation of the fleet rising to 83 % (82 %). Charter revenues reached USD 469.2 million (423.9 million), while non-charter revenues declined from 86.5 million to USD 54.3 million. The increase in charter revenues is attributable to a higher average day rate level. Total operating expenses declined to USD 216.9 million (USD 230.3 million), largely as a result of a decline in reimbursable non-charter expenses. Depreciation increased to USD 61.5 million (USD 57.7 million) mainly due to a planned replacement of the cranes on Regalia. The residual value of USD 3.4 million of the replaced cranes has been written down to the estimated scrap value. Operating profit came to USD 245.1 million (USD 222.4 million). Net interest expenses totalled USD 32.9 million (USD 39.8 million). This decline is mainly due to a reduction in the average interest rate on the hedged debt. In accordance with IFRS, interest costs totalling USD 4.5 million (USD 3.7 million) have been allocated to new build and refurbishment projects, and consequently capitalised as part of the vessel costs. Other financial items amounted to USD -8.5 million (USD -4.6 million). These figures include the net effect from changes in value of financial currency hedging instruments and revaluation of NOK denominated bond loans. Taxes for 2013 were USD 4.6 million (USD 0.5 million). The 2012 figure included a reversal of around USD 1.4 million of previously expensed taxes in Russia related to the operation of Safe Astoria at the Sakhalin field in 2007-09. Net profit amounted to USD 199.1 million (USD 177.5 million), resulting in diluted earnings per share of USD 0.85 (USD 0.80). Balance sheet Total assets amounted to USD 1 619.9 million (USD 1 487.2 million) at the end of 2013. Interest-bearing debt amounted to USD 779.6 million (USD 810.4 million) at year-end. Repayments of debt totalled USD 407.8 million (USD 282.2 million), while gross increase in borrowing amounted to USD 404.1 million (USD 317.1 million). On 4 January 2013, Prosafe successfully completed a NOK 500 million unsecured bond issue maturing in January 2020. In connection with this bond issue, Prosafe bought back NOK 156 million of one of the existing bonds, PRS06 PRO, which matured on 14 October 2013 at 102.25. As at year-end 2013, the Group had total liquid assets of USD 113.4 million (USD 103.6 million). The liquidity reserve (liquid assets plus undrawn credit facilities) totalled USD 486.4 million (USD 464.6 million). Total shareholders’ equity amounted to USD 739.7 million (USD 516.3 million), resulting in a book equity ratio of 45.7 % (34.7 %). On 14 March 2013, the company successfully completed a private placement of 13 million new shares. The proceeds of USD 128.9 million will be used to fund value enhancing growth investments. Cash flow Net cash flow equalled USD 9.8 million in 2013. Net cash flow from operating activities was USD 267.9 million, and is mainly the net effect of EBITDA plus change in working capital less currency effects and tax payments. Investments in tangible assets totalled USD 227.2 million (USD 188.1 million). The investments in 2013 include the upgrades of Safe Caledonia and Safe Scandinavia, the first instalment on the two new builds Safe Eurus and Safe Notos, and project expenses related to the new builds Safe Boreas and Safe Zephyrus. In 2013, the Company paid dividends of USD 139.6 million (USD 118.6 million). As of 31 December 2013, cash and deposits amounted to USD 113.4 million and the availability under the credit facility totalled USD 791 million (USD 373 million undrawn credit lines).

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9.3.5 SEGMENT INFORMATION The Group has one segment, which is chartering and operation of accommodation/service vessels.

Operating revenues by geographical location 2015 2014 2013

Europe excl. Cyprus

307,3 322,8 342,5

Cyprus

0,0 0,0 0,0

Americas

111,5 165,2 175,3

Australia/Asia

55,9 60,7 5,7

Total operating revenues

474,7 548,7 523,5 The revenue allocation is based on place of operation of the vessel.

9.4 INVESTMENTS

9.4.1 Historical investments 2013 Total capital expenditure of USD 224 million. Main items: Safe Notos first instalment USD 42 million Safe Eurus first instalment USD 42 million Safe Scandinavia SPS/upgrade USD 42 million Safe Caledonia SPS/upgrade USD 35 million Regalia SPS/upgrade USD 25 million Safe Boreas project USD 20 million Other USD 18 million Safe Eurus and Safe Notos first yard instalments (20 per cent of yard cost) were paid in December 2013. Safe Scandinavia started her SPS, refurbished her mooring winches and started a life extension programme. The SPS/life extension of Safe Caledonia was completed. Regalia started her SPS. Further capex was related to Safe Boreas and Safe Zephyrus new builds and general fleet capex. 2014 Total capital expenditure of USD 211 million. Main items: Safe Scandinavia SPS/upgrade USD 102 million Safe Boreas project USD 27 million Safe Zephyrus project USD 20 million Regalia SPS/upgrade USD 18 million Safe Concordia upgrade USD 17 million Other USD 27 million The SPS/upgrade of Safe Scandinavia was completed at the beginning of 2014. The Safe Boreas and Safe Zephyrus projects were ongoing, and the Regalia completed her SPS/upgraded at the beginning of the year. Further capex was related to Safe Concordia and general fleet capex. 2015 Total capital expenditure of USD 701 million. Main items: Safe Scandinavia TSV conversion USD 294 million

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Safe Boreas project USD 268 million Safe Concordia SPS/upgrade USD 47 million Safe Bristolia repair/upgrade USD 35 million Safe Zephyrus project USD 27 million Other USD 30 million The TSV conversion of Safe Scandinavia was started in 2015. Safe Boreas was delivered and the final yard instalment (80 per cent of yard instalment) was paid. The TSV conversion capex was in excess of USD 300 million and the major part of this conversion capex was taken during 2015. Further capex was related to the Safe Concordia SPS/upgrade, the Safe Bristolia repair/upgrade and general fleet capex. 2016 (first half) Total capital expenditure of USD 460 million for the first half of 2016. Main items: Safe Zephyrus delivery USD 242 million Safe Notos delivery USD 187 million Safe Bristolia SPS USD 17 million Other USD 14 million In Q1 2016, the Group took delivery of Safe Zephyrus and Safe Notos and the final yard instalments for these vessels were paid in Q1 2016. The final delivery instalments for Safe Zephyrus and Safe Notos were 80 per cent of the yard cost and therefore constitute the majority part of the capex for 2016. Safe Scandinavia conversion to TSV was completed in Q1 2016. Other capex was related to SPS of Safe Bristolia and general fleet capex.

9.4.2 Ongoing investments The capex guidance for 2016 is approximately USD 500 million of which approximately USD 460 million has already been paid in the first half of 2016 as described in section 9.4.1 above. For the second half 2016, approximately USD 40 million in capex is expected. This capex relates to final capex for Safe Notos and other general fleet capex and is expected to be financed by existing cash and operating revenue. Initially Safe Eurus was scheduled to be delivered in 2016. The Group has negotiated and agreed with Cosco deferred delivery of Safe Eurus to Q4 2019 (or such earlier time required by the Group) and a limitation on any further liability in the event the Group does not take delivery of the vessel, giving the Company increased flexibility and reduced financing risk. A credit facility of USD 144 million related to the delivery of the Safe Eurus is in place with a syndicate of banks, to be drawn if the Group takes delivery of the vessel. The remaining part of the delivery payment for Safe Eurus will be financed from operational cash flow and retained earnings or a sellers credit from the yard.

9.4.3 Planned and committed investments The Group has negotiated and agreed with Cosco deferred delivery of Safe Eurus to Q4 2019 (or such earlier time required by the Group) and a limitation on any further liability in the event the Group does not take delivery of the vessel, giving the Company increased flexibility and reduced financing risk. During the next couple of years the Company does not have any major capex programmes planned or committed. The company expect to see an annual fleet/maintenance capex for the fleet of approximately USD 20-30 million for 2017 (not committed).

9.5 WORKING CAPITAL The Board is of the opinion that the working capital of the Company is sufficient for the Group's present requirements in a twelve months perspective as from the date of this Prospectus.

9.6 CAPITALISATION AND INDEBTEDNESS Year end 2015 As of 31 December 2015, the Group had a liquidity reserve totalling USD 157.1 million (cash and deposits of USD 57.1 million and undrawn portion of revolving credit facility of USD 100 million). Under the credit facility agreements, the Group is required to maintain minimum liquidity of USD 65 million (including up to USD 25 million of total commitments available for utilisation). As of 31 December 2015, the commitments under the USD 1,300 million credit facility totalled USD 1,245 million (including the USD 200 million term loan for financing of Safe Zephyrus), of which USD 945 million

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was utilised. As of year-end, the available amount under the revolving credit facility was USD 100 million. Following delivery of Safe Zephyrus, scheduled semi-annual amortisations amount to USD 65 million. At year-end, the USD 288 million facility was unutilised and consisted of two tranches of USD 144 million each. Following delivery of Safe Notos and Safe Eurus, each tranche will be reduced quarterly with USD 3 million.

As per 31 December 2015 Prosafe SE had five senior unsecured callable bonds outstanding; Loan Principal Outstanding Maturity Interest Loan margin PRS07 NOK 260 million NOK 260 million Feb 2016 3m Nibor 3.50% PRS08 NOK 500 million NOK 500 million Feb 2017 3m Nibor 3.75% PRS09 NOK 500 million NOK 500 million Jan 2020 3m Nibor 3.75% PRS10 NOK 700 million NOK 700 million Oct 2018 3m Nibor 2.95% PRS11 NOK 700 million NOK 700 million Sep 2019 3m Nibor 3.10%

Post Refinancing – as of the date of the Prospectus The Group is financed by secured bank debt. The USD 288 million credit facility has a maturity of seven years, and consists of two tranches of USD 144 million for the two new builds, Safe Notos and Safe Eurus. At the date of this Prospectus only one tranche for the Safe Notos has been drawn. Under this facility, the banks have first priority mortgages in Safe Notos and Safe Eurus. The Group also has a USD 1,300 million facility and the banks have first priority mortgages in the remaining vessels, except for Safe Lancia and Safe Regency. There is no available amount to be drawn under the MUSD 1300 facility. Revised covenants after the refinancing are as follows: Liquidity shall be a minimum of USD 65 million. Interest coverage ratio

• Minimum 1.0 X (from closing of transaction until 31 Dec’ 2019) • Minimum 1.5 X (from 1 Jan’ 2020 onwards)

Leverage ratio • Suspended until 31 Dec’ 2020

Minimum market value • Suspended until 31 Dec’ 2018

Dividend restrictions • No distributions until all bank lenders received repayments equal to all deferred instalments

The Company has achieved amortisation relief of bank facilities of USD 128 million in 2017 and 2018 (90 per cent reduction), USD 114 million in 2019 (90 per cent reduction in H1 and 70 per cent reduction in H2) and USD 108 million in 2020 (70 per cent reduction). This is a total positive liquidity effect for the Company of USD 478 million. Interest on bank facilities Interest is USD Libor plus margin. Revised margin on outstanding amounts after the refinancing are as follows: MUSD 1,300 facility MUSD 288 facility Applicable Leverage ratio Until 30 June 2019 From 1

July 2019 Until 30 June 2019 From 1

July 2019

Cash Margin

PIK Margin

Cash Margin

Cash Margin

PIK Margin

Cash Margin

Less than or equal to 3.00:1

2.00% - 2.00% 2.15% 0,10% 2.25%

Above 3.00:1 and less than or equal to 4.00:1

2.15% - 2.15% 2.15% 0,10% 2.25%


2.15% 0.15% 2.30% 2.15% 0.15% 2.30%


2.15% 0.35% 2.50% 2.15% 0.35% 2.50%

Above 5.50:1 2.15% 0.60% 2.75% 2.15% 0.60% 2.75% Payment in kind (PIK) will be added to the final balloon payment.

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NOK 2.4 billion in aggregate face value of the Company's outstanding senior unsecured bonds in PRS08, PRS09, PRS10 and PRS11 was converted into a mix of ordinary shares at 30 per cent of face value, convertible bonds and cash. The cash-out was at 35 per cent of face value. The NOK 81,790,013 New Convertible Bond issued as part of the Refinancing is a five year, zero coupon unsecured and subordinated bond. The New Convertible Bond is convertible at the Company’s option upon; maturity, formal insolvency proceedings of Prosafe SE or one or both of its material asset owning subsidiaries, or upon a material refinancing of the majority of the financial indebtedness of the Group in connection with actual or potential financial difficulties. Repayment or redemption of the New Convertible Bond can only be executed through conversion into equity or issuance of new equity. The table below shows the maturity profile for interest-bearing debt: 2016 2017 2018 2019 2020 2021 2022 USD 1.300 million bank debt 0 13 13 26 39 130 1024 USD 288 million bank debt* 9 1 1 2 7 121 0 Seller’s credit Jurong 0 30 0 0 0 0 0 Seller’s credit Cosco 3 4 4 18 0 0 0 * Assuming Safe Eurus bank debt not drawn (assuming Safe Eurus not being delivered in the period) The table below sets forth the Group’s statements of capitalisation and indebtedness based on the latest interim balance sheet as of 30 June 2016. This has been extracted from the unaudited interim financial report for Q2 2016.

TOTAL CAPITALISATION Per date of Prospectus

Change 30.06.2016

(USD million)

Total current debt 48.0

(148.0)1) 196.0

-Guaranteed - - -

-Secured2) 18.0 (88.3)3) 106.3

-Unguaranteed/Unsecured4) 30.0 (59.7)5) 89.7

Total non-current debt 1,383.0 (137.7)6) 1,520.7

- Guaranteed 0.0 0.0 0.0

-Secured7) 1,383.0 89.18) 1,293.9

-Unguaranteed/Unsecured 9) 0.0 (226.8)10) 226.8

Total shareholders' equity 1,069.5 391.011) 678.5

a. Share capital 8.0 (64.1)12) 72.1

b. Legal reserve

c. Other reserves 1,061.5 455.113) 606.4

Total 2,500.5 105.3 2,395.2

NET FINANCIAL INDEBTEDNESS Per date of Prospectus

Change 30.06.2016

(USD million)

A. Cash 173.5 105.314) 68.2 B. Cash equivalents C. Traded securities and other financial instruments

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D. Liquidity (A)+(B)+(C) 173.5 105.3 68.2

E. Current financial receivables

F. Current debt 0.0 (59.7)15) 59.7 G. Current portion of non-current debt 18.0 (59.0)16) 77.0 H. Other current financial debt 30.0 (29.3)17) 59.3 I. Current financial debt (F)+(G)+(H) 48.0 (148.0) 196.0

J. Net current financial indebtedness (I)-(E)-(D) (125.5) (253.3) 127.8

K. Non-current bank loans 1,353.7 59.818) 1,293.9 L. Bonds issued 0 (226.8) 19) 226.8 M. Other non-current loans 29.3 29.320) 0.0 N. Non-current financial indebtedness (K)+(L)+(M) 1,383.0 (137.7) 1,520.7

O. Net financial indebtedness (J)+(N) 1,257.5 (391.0) 1,648.5 1) See comments for change of Guaranteed, Secured and Unguaranteed/Unsecured (3 and 5)

2) Short term portion of bank debt secured by first priority mortgages. In MUSD 1,300 facility, the banks have security in Safe Boreas, Safe Zephyrus, Safe Scandinavia,

Regalia, Safe Caledonia, Safe Bristolia, Safe Astoria and Safe Concordia. In MUSD 288 facility, the banks have security in Safe Notos. In the seller credit in favour of Cosco

(Qidong), Cosco has 2nd priority mortgage in Safe Notos.

3) As part of refinancing, reduced downpayments on seller credit and MUSD 1,300 and MUSD 288 bank facilities with reduced amortisation of 90% in H1 2017.

4) Unsecured/unguaranteed MNOK 500 bond debt (PRS08). Unsecured seller credit of USD 30 million from Jurong shipyard to Prosafe Rigs Pte Ltd.

5) As part of refinancing, the MNOK 500 Bond (PRS08) with maturity in February 2017 was as of date of Prospectus redeemed (converted to equity/convertible bond/cash).

6) See comments for change of Guaranteed, Secured and Unguaranteed/Unsecured (8 and 10).

7) Bank debt secured by first priority mortgages in the vessels. In the MUSD 1300 facility, the banks have security in Safe Boreas, Safe Zephyrus, Safe Scandinavia, Regalia,

Safe Caledonia, Safe Bristolia, Safe Astoria and Safe Concordia. In the MUSD 288 facility, the banks have security in Safe Notos.

8) Reduced downpayments the next 12 months on loans have been put on maturity of the loans (becoming non-current instead of current). Also the maturity on the seller

credit for Safe Notos has been extended, meaning that the seller credit as of end June 2016 was secured current debt, but as of date of Prospectus is secured non-current debt.

9) Unsecured/unguaranteed MNOK bond debt (PRS09, PRS10, PRS11).

10) As part of refinancing, the MNOK Bonds PRS09 (500), PRS10 (700), PRS11 (700) were as of date of Prospectus redeemed (converted to equity/convertible bond/cash).

11) Sum of Share capital and Other reserves (12 and 13).

12) Capital reduction -71.0, conversion bonds 1.5, private placem. 4.8 and rep. issue 0.6

13) Capital reduction 71.0, conversion bonds 234.3, private placem. 125.5, rep. issue 14.4 and convertible bond 9.9.

14) Cash out bondholders -40.0, private placem. 130.3, rep. issue 15.0

15) As part of refinancing, the MNOK 500 Bond (PRS08) with maturity in February 2017 was as of date of Prospectus redeemed (converted to equity/convertible bond/cash)

16) As part of refinancing, reduced downpayments of MUSD 59 on MUSD 1300 and MUSD 288 facilities.

17) The maturity of the seller credit for Safe Notos at date of the Prospectus was extended to 2019. At 30 June 2016, the maturity of the seller credit was Q4 2016.

18) Reduced downpayments at the date of Prospectus for the next 12 months is decreased on current-loans (re note 10 above) and increased on non-current loans.

19) The MNOK Bonds PRS09 (500), PRS10 (700), PRS11 (700) were as of date of Prospectus redeemed (converted to equity/convertible bond/cash).

20) The maturity of the seller credit for Safe Notos at date of the Prospectus was extended to 2019 (non-current loan).

In the table above Interest-free long-term liabilities and Other interest-free current liabilities in the balance sheet are not included. The USDNOK exchange rate used for Q2 figures 30 June 2016 was 8.38 and the USDNOK exchange rate used per the date of Prospectus was 8.40. In addition to secured bank debt as of the date of the Prospectus, the Group has a current seller's credit in favour of Jurong Shipyard Pte. Ltd and a non-current seller credit in favour of Cosco. Total current debt was USD 48 million per Q2 2016 post Refinancing, consisting of guaranteed/secured short term bank debt and seller credit in favour of Jurong. Total non-current debt was USD 1383 million per Q2 2016 post Refinancing, consisting of guaranteed/secured long-term bank debt and seller credit in favour of Cosco.

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Book equity ratio was 26 % as of end June 2016. As of end June 2016, interest coverage ratio (EBITDA last 12 months/interest last 12 months) was 4.5. For financial risk management, please refer to section 6.7.

9.7 SIGNIFICANT CHANGES AFTER 30 JUNE 2016 Other than the Refinancing, as further described in sections 4 and 9.6, there has not been any significant change to the Group's financial or trading position since 30 June 2016 through to the date of this Prospectus.

9.8 THE COMPANY'S AUDITOR The Company's auditor is KPMG Limited, with registered address: Name KPMG Limited Address KPMG Center,

No.11, 16th June 1943 Street, 3022 Limassol, Cyprus

The Company’s auditor for 2014 and 2013 was Ernst & Young Cyprus Limited.

9.9 PROPERTY, PLANTS AND EQUIPMENT Other than the vessels as described in section 6.5, there are no other existing or planned material tangible fixed assets of relevance to the Group. As of the date of this prospectus, there are no environmental issues which have arisen of which we are aware that would affect the Group's utilisation of the tangible fixed assets. The Group is obliged to comply with all applicable law or regulation which relates to the pollution or protection of the environment, harm to or the protection of human health, the conditions of the workplace, or any emission or substance capable of causing harm to any living organism or the environment. Fleet utilization as at June 2016:

9.10 RELATED PARTY TRANSACTIONS The Company has not during the las three financial years and up until the date of this Prospectus had any related party transactions other than intragroup transactions and balances. Please refer to Note 22 in the annual reports for 2013, 2014 and 2015 which are incorporated into this Prospectus by reference.

10. SHARES AND SHARE CAPITAL

10.1 SHARE CAPITAL AND SHARES The authorised share capital of the Company at the date of this Prospectus is EUR 11,044,017.609 divided into 16,353,789 Ordinary Shares of nominal value EUR 0.25 each, 259,570,359 Ordinary Shares of nominal value EUR 0.001 each, 906,560,243 undesignated shares of nominal value EUR 0.001 each and 5,789,439,757 Class A Shares of nominal value EUR 0.001 each.

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The issued share capital of the Company at the date of this Prospectus is EUR 6,049,010.116 divided into 6,049,010,116 Shares of which 259,570,359 are Ordinary Shares of nominal value EUR 0.001 and 5,789,439,757 are Class A Shares of nominal value EUR 0.001. The Shares are fully paid-up. The Ordinary Shares are registered in the VPS register with ISIN CY0100470919. The Class A Shares are registered in the VPS register with ISIN CY0106610914 pending the publication of this Prospectus. The Ordinary Shares are equal in all respects and each share carries one vote at the Company’s General Meeting. The Class A Shares have the same rights as to voting, dividend and return of capital on winding up as the Ordinary Shares, however they have conversion rights attached to them. Specifically, the Class A Shares are automatically convertible into Ordinary Shares on completion of the Capital Reduction and publication of this Prospectus.

10.2 HISTORICAL DEVELOPMENT IN SHARE CAPITAL AND NUMBER OF SHARES The development of the Company’s share capital since 1 January 2013 is set forth in the table below. Time Event Capital

increase/decrease (EUR)

Par value

(EUR)

Share price

Share capital (EUR) New Shares issued

Total Shares

15.03.13 Private placement

3,250,000 0.25 NOK 58

60,734,197 13,000,000 242,936,790

14.05.13 Cancellation of treasury shares

0.25 - - 6,963,731 235,973,059

04.12.15 Private Placement

5,899,325 0,25 NOK 25

64,892,589.75 23,597,300 259,570,359

End of year 2015

259,570,359

Beginning of year 2016

259,570,359

14.09.16 Private Placement

4,376,600 0.001 NOK 0.25

69,269,189.75 4,376,600,000

4,636,170,359

19.09.16 Bond conversion

1,400,839.757 0.001 - 70,670,029.507 1,400,839,757

6,037,010,116

23.09.16 Conversion of convertible bonds

12,000 0.001 NOK 0.25

70,670,041.507 12,000,000 6,049,010,116

12.10.16 Capital Reduction

64,633,019.391 0.001 - 6,049,010.116 - 6,049,010,116

10.3 BOARD AUTHORISATION TO ISSUE SHARES The EGM, at the meeting held on 23 August 2016, authorized the Board to allot and issue shares from the unissued authorised share capital of the Company (including as increased from time to time), as ordinary shares and/or Class A Shares and/or shares on such terms as the Board deems fit, for a period up to and including the 23 August 2021. The unissued authorised share capital of the Company as at the date of this Prospectus amounts to 16,353,789 ordinary shares of nominal value EUR 0.25 and 906,560,243 undesignated shares of nominal value EUR 0.001.

10.4 BOARD AUTHORISATION TO REPURCHASE SHARES The Board does not currently have any authorisation to repurchase Shares.

10.5 OPTIONS AND WARRANTS The Company has not issued any warrants, options and/or other subscription rights.

10.6 OWN SHARES As of the date of this Prospectus the Company does not hold any treasury Shares.

10.7 OWNERSHIP STRUCTURE As of the date of this Prospectus, as follows from the Company's shareholder register in the VPS, the following shareholders hold more than 5% of the Shares in the Company: Name of shareholder Ordinary

Shares Class A Shares No. of Shares Percentage*

NORTH SEA STRATEGIC INVESTMENTS

47,940,903 1,500,000,000 1,547,940,903 25.6%

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STATE STREET BANK AND TRUST

47,069,070 1,213,200,000 1,260,269,070 20.9%

* Ownership percentage of total Shares (i.e. both Class A Shares and Ordinary Shares). Furthermore, pursuant to disclosures of large shareholdings to the market, the Company is aware that funds managed by Pareto Asset Management AS and DNB Asset Management AS holds in aggregate 5.142% and 5.27% of the total Shares in the Company. Except for the above, the Company is not aware of any other shareholders or consolidated groups of shareholders owning more than 5% of the Shares. As of the date of this Prospectus, the Company is not aware of any entity controlling directly or indirectly the Company nor is the Company aware of any arrangements or agreements that may result in, prevent, or restrict a change of control in the Company.

10.8 LISTING, SHARE REGISTRAR AND SECURITIES NUMBER The Shares are registered in the VPS. The Ordinary Shares’ current securities number is ISIN CY0100470919. The Class A Shares' securities number is ISIN CY0106610914 pending the publication of this Prospectus, following which they will be converted into Ordinary Shares and assume the Company's ordinary ISIN. The Registrar for the Shares is DNB Verdipapirservice, Dronning Eufemias gate 30, 0191 Oslo, Norway.

The Ordinary Shares are listed on Oslo Stock Exchange under ticker code "PRS". No Shares or any interests in Shares or other securities of the Company are listed, and no application has been filed for listing, on any other stock exchange or regulated market than Oslo Børs, however the Class A Shares are currently registered on N-OTC pending conversion to Ordinary Shares, see section 4.21 and 5.13.

10.9 DIVIDEND Prosafe’s aim is that its shareholders receive a competitive return on their Shares through a combination of share price appreciation and a direct return in the form of dividends. As part of the agreed amendments to its credit facilities, Prosafe has agreed that it will not issue any dividends, bond or complete any equity buy-back from 31 December 2015 unless all voluntary skipped amortisations have been prepaid or cancelled and a 12-month financial forecast has been provided which confirms compliance with original financial covenants (except for the equity ratio which must be a minimum of 35 %). Dividends the past three years:

2015 2014 2013

Total dividends declared (USD million)

34 125,8 139,6

Dividends per share (NOK)

1,12 3,29 3,47

10.10 SHAREHOLDER AGREEMENTS The Company is not aware of any shareholder agreements in respect of the Shares.

11. SHAREHOLDER MATTERS AND COMPANY AND SECURITIES LAW

11.1 SHAREHOLDERS RIGHTS

All issued Shares in the Company are vested with equal shareholder rights (as between the classes) in all respects and no issued Shares have different voting rights. The Company has, temporarily, two classes of Shares in issue as further described in section 10.1. All Shares are freely transferable. The Company’s Articles of Association do not contain any provisions imposing any limitations on the ownership or the tradability of the Shares other than as set out in paragraph 11.3 below.

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11.2 ADDITIONAL RIGHTS OF SHAREHOLDERS

The Companies Law contains provisions implementing Directive 2007/36/EC on the exercise of certain rights of shareholders in listed companies. Key provisions include:

• irrespective of any provisions contained in the articles of association of a Cypriot company listed on a regulated market, members who hold not less than 5% of the paid-up share capital and who have voting rights in General Meetings can call an extraordinary General Meeting;

• notice of General Meetings must be served by Cypriot companies listed on regulated markets without charge to every member and must include, among other things, the place, time and the agenda of the General Meeting and the procedures for adding a new subject to the agenda, appointing proxies and voting. Furthermore, Cypriot companies listed on regulated markets shall also provide their members through their websites with a notice of the meeting, the agenda and the documents that must be used for appointing proxies and for voting (if applicable) by mail or by electronic means; the Company has adopted such practises;

• members holding not less than 5% of the issued share capital (representing at least 5% of the total voting rights of those who have the right to vote in the meeting) of a Cypriot company listed on a regulated market can propose a subject to be added to the agenda of an annual general through electronic means or by post. Proposed agenda items must be received by the company at least 42 days prior to the date of the annual general meeting and the company must provide the amended agenda prior to the annual general meeting using a method similar to that used to provide the original agenda;

• a person must be registered as a member in the relevant register of members (including the register kept abroad) on the record date in order to be able to attend and vote at a General Meeting of a Cypriot company listed on a regulated market. Any amendment to the relevant register after the record date will not be taken into account when determining the rights of any person to attend and vote in the meeting. The right of a member to attend a General Meeting and vote in respect of his or her shares is not subject to a condition that the shares be deposited with, or transferred to another person or registered in the name of another person, prior to the General Meeting. Furthermore, a member is free to sell or otherwise transfer his or her shares in a Cypriot company listed on a regulated market at any time between the record date and the General Meeting, provided that such right to sell would not otherwise be subject to any restrictions;

• Cypriot companies listed on regulated markets may make voting by electronic means available to their members and without the need for the member or their proxies to be present and may also provide real time communication; the Company’s Articles allow for voting by electronic means;

• members of Cypriot companies listed on regulated markets may appoint more than one proxy if their shares are held in different security accounts;

• members entitled to more than one vote (either in person or through a proxy) in a meeting of members of a Cypriot company listed on a regulated market are not obliged to use all of the votes or to cast all of votes in the same manner; and

• when members of Cypriot companies listed on regulated markets apply for a full report of the voting results of a General Meeting, the company shall announce, for every resolution proposed:

(a) the number of shares on which votes were validly placed;

(b) the proportion of issued share capital at the end of the day before the meeting which is represented by such votes;

(c) the total number of valid votes; and

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(d) the number of votes which were cast in favour and against every proposed resolution and, if counted, the number of abstentions.

If no members apply for such a full report, it will be sufficient for Cypriot companies listed on regulated markets to announce the results on their websites within 14 days of the meeting and only to the extent necessary in order to ensure that the required majority was reached for every resolution.

11.3 LIMITATIONS ON THE RIGHT TO OWN AND TRANSFER SHARES

The Shares are freely transferable. The Companies Law does contain any provisions imposing limitations on the ownership of the Shares and there are no limitations under Cypriot law on the rights of non-residents or foreign owners to hold or vote for the Shares. The Articles of Association of the Company generally do not impose limitations on ownership of the Shares, save a discretion to the Board provided by Regulation 16 of the Articles of Association to refuse to register a transfer of shares and direct the VPS to refuse to do so where such transfer would (amongst other) be likely to result in 50% or more of the votes attached to all the issued shares of the Company being directly or indirectly held by individuals or legal persons resident for tax purposes in Norway. The Board has not historically exercised this discretion. The transfer of ownership of the Shares registered with the VPS is generally unrestricted from pre-emption rights and first rights of refusal and other similar rights ordinarily applicable to private companies.

11.4 GENERAL MEETINGS

The shareholders collective membership rights and powers are exercisable in General Meetings of the Company. In accordance with the Companies Law (section 125), every annual General Meeting shall take place not more than 15 months from the previous annual General Meeting. The Articles specify that the annual General Meeting is held on or prior to 30 June each year. The following business will be transacted at the annual general meeting:

• declaring dividends;

• presentation of the reports:

(i) on the financial statements; (ii) of the Directors; and (iii) of the Auditors; and

• in the place of those retiring the appointment of, and fixing of the remuneration of, the Auditors.

In addition to the annual General Meeting, extraordinary General Meetings of shareholders may be held if deemed necessary by the Board of Directors. An extraordinary General Meeting must also be convened by the Board at a written request of the Company’s shareholders representing a total of at least 5% of the issued and paid up share capital carrying a right to vote and in default may be convened by such shareholders themselves. In accordance with the Companies Law, a written notice shall be sent to all shareholders at least 21 days prior to an annual General Meeting and any other General Meeting at which a special resolution is proposed to be passed. All other extraordinary General Meetings shall be called by at least 14 days’ notice, if the shareholders are able to cast votes electronically and if the calling of such a meeting by at least 14 days’ notice has been approved by the shareholders in a General Meeting prior to the proposed extraordinary General Meeting. The shareholders may participate at a General Meeting in person or by proxy. A proxy need not be a member of the Company. The instrument appointing a proxy shall be in writing in usual form or in any form approved by the Company and is ordinarily enclosed in the notice calling the General Meeting. The instrument appointing the proxy and any authority under which it is executed is deposited at the registered office of the Company or otherwise delivered to the Company in the manner set out in the notice calling the General Meeting. The quorum required for business to be transacted at a General Meeting is any number of shareholders present in person, or participating by proxy or by electronic means (where provided for by the Company) and entitled to vote. Pursuant to the Articles of Association any resolution put to vote at a General Meeting is decided by poll vote.

11.5 ALTERATION OF CAPITAL

The Company may by ordinary resolution in a General Meeting:

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• increase its authorised share capital by the creation of new shares of any nominal value as the resolution shall prescribe;

• consolidate and divide all or part of its share capital into shares of larger nominal value than that of its existing shares;

• subdivide the existing shares, or any of them, into shares of smaller nominal amount than is fixed by the Memorandum subject, nevertheless, to the provisions of section 60(1)(d) of the Companies Law; and

• cancel any shares which, at the date of the passing of the resolution, have not been allotted or agreed to be allotted to any person.

The Company may also, by special resolution in a General Meeting, reduce its issued share capital, any capital redemption reserve fund or any share premium account in any manner and with, and subject to, any incident authorised and any consent required, by the Companies Law. The Board of Directors shall have authority to allot and issue shares from the authorised unissued share capital of the Company as the General Meeting may from time to time determine by ordinary resolution.

11.6 PURCHASE OF OWN SHARES AND REDEMPTION

The Company may, subject to and in accordance with the provisions of sections 57 and 57A to 57F (both inclusive) of the Company Law, purchase a number of its shares as permitted, and may transfer such shares within the time limits imposed by the Companies Law or cancel them.

11.7 VOTING RIGHTS

At the date of this Prospectus, all the issued shares rank pari passu and each issued share in the Company confers at the General Meeting on its holder on poll vote, a right to one vote for each share of which he is a holder. As a general rule (and except where otherwise required by the law or the articles of association), all matters raised at the General Meeting require decision by simple majority (more than 50% of the votes cast). Under the Companies Law and the Articles of Association, a special resolution adopted by a majority in favour of at least 75% of the votes cast is required, inter alia, in respect of the following matters:

• amendments to the Articles of Association;

• change of name of the Company;

• reduction of the issued share capital (which also requires sanction of the Court);

• reduction of the share premium account (which also requires sanction of the Court);

• reduction of the capital redemption reserve (which also requires sanction of the Court);

• merger and de-merger;

• amendment to the objects clause of the Memorandum of Association (which also requires sanction of the Court);

In order to be entitled to vote at a General Meeting, a shareholder must, as a general rule, be registered as owner of the Shares in the Company’s shareholder register kept by the VPS. The rights attached to any class of the Company’s shares may be varied by the sanction of the General Meeting taken by separate vote of each class, by a specified majority, being a majority in favour of over one half of all the votes cast if the attendance represents not less than half the issued share capital and a majority in favour of not less than two-thirds of the votes cast in all other cases. Section 70 of the Companies Law provides that the holders of not less than 15% of the issued shares of the class being varied, being persons who did not consent to or vote in favour of the resolution for the variation may apply to the Courts of Cyprus to have the variation

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cancelled and where such an application is made the variation shall not have effect unless and until it is confirmed by the Court.

11.8 PRE-EMPTION RIGHTS

Where the share capital is proposed to be increased by consideration in cash, the existing shareholders have a right of pre-emption to subscribe for new shares to be issued in proportion to the aggregate number of such shares of the shareholder. Rights of pre-emption are also applicable to the issuance of securities which are convertible to shares. Such rights may be restricted or dis-applied in accordance with the provisions of the Companies Law. Specifically, a disapplication of pre-emption rights requires a resolution of the general meeting which is passed by a specified majority, being a majority in favour of over one half of all the votes cast if the attendance represents not less than half the issued share capital and a majority in favour of not less than two-thirds of the votes cast in all other cases. The waiver may be specific for the particular proposed issuance of shares or general, provided that in such case reference is made to the maximum number of shares to which it relates and maximum period for which the relevant shares may be issued. In connection with such a waiver, the directors have an obligation to present to the relevant general meeting a written report explaining the reasons for the proposal. There are no pre-emption rights with respect to shares issued for non-cash consideration or shares issued on the conversion of convertible instruments or the exercise of options.

11.9 REGULATION OF DIVIDENDS

Pursuant to the Articles of Association and provided that the Company has sufficient distributable profits, the Company may, at a General Meeting of its shareholders, declare by ordinary resolution (simple majority) dividends to be paid out of profits but no dividend will exceed the amount recommended by the Board. The General Meeting and the Board may declare interim dividends as such may appear to the Board to be justified by the profits of the Company. Interim dividends declared by the General Meeting shall not exceed the amount recommended by the Board. No distribution to shareholders may be made when on the closing date of the last financial year the net assets, as already set out in the Company’s annual accounts are, or following such a distribution would become, lower than the amount of the subscribed capital plus those reserves which may not be distributed under the Company Law or the Company’s Articles of Association. In addition to the above, dividends may be declared only if the following conditions are satisfied:

• In relation to interim dividends, interim accounts are prepared which show that the funds available are sufficient for the distribution of interim dividends; and

• Generally in relation to dividends, the amount to be distributed cannot exceed the total profits made since the end of the last financial year, increased by the amounts of the profits that have been brought forward from the last financial year and the retentions from the reserves that are available for this purpose, but reduced by the amount of losses of previous financial years as well as by the amounts that need to be credited to the reserves in accordance with the provisions of the law or the Articles of Association of the Company.

The shareholders who have received dividend, in contravention to any of the above provisions of the Companies Law, may be liable to return it to the Company provided the Company proves that the said shareholders:

• had knowledge of the irregularity of the payments made in their favour; or

• could not, in view of the circumstances have been unaware of it.

The Board will consider the amount of dividend (if any) to recommend for approval by the Company’s shareholders, based upon the earnings of the Company and the financial situation of the Company at the relevant point in time. Dividend will be declared in EUR. Shareholders who maintain a Norwegian address with the VPS or have supplied VPS with details of their NOK account, shall receive their dividend payment in NOK to such account. For further matters relating to Dividends please refer to section 10.9.

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11.10 LIABILITY OF DIRECTORS

The duties of Directors of Cyprus companies are not comprehensively codified and are set out, amongst others, in the Companies Law, common law principles, duties provided for in a company’s Articles of Association and respective EU directives transposed into law in Cyprus. There are four main common law fiduciary duties that the directors owe to the Company and must take into account when they are acting for the Company, these are to:

• act in good faith for the benefit of the company and for proper purpose;

• avoid conflicts of interests;

• exercise independent judgment; and

• act with due care and skill.

Their principal task is to safeguard the interests of the Company. Pursuant to the Articles, directors are required to declare the nature of any interest in a contract or proposed contract with the Company in accordance with s.191 of the Companies Law and notwithstanding that such director may vote and be counted in the quorum, any decision must be approved at a meeting of directors at which at least one of the independent non-executive directors is present. Members of the Board of Directors may each be held liable for any damage they cause the Company through gross negligence or wilful misconduct. Subject to the Company Law, each of the current or former officers of the Company may be indemnified out of the Company assets against any losses or liabilities which he or she may sustain or incur in or about the execution of his or her duties. This includes liability incurred by him or her in defending any proceedings, whether civil or criminal, in which judgment is given in his or her favour or in which he or she is acquitted, or in connection with any application under section 383 of the Companies Law in which relief is granted to him or her by the court from liability for negligence, default, breach of duty or breach of trust in respect of the affairs of the Company. This is reflected in the Company’s Articles.

11.11 DISTRIBUTION OF ASSETS ON LIQUIDATION

According to the Companies Law, the Company may be wound-up voluntarily or involuntarily. In the case of voluntary winding up and where the Company is solvent a special resolution would be required to be passed in a General Meeting of the Company. The Shares rank pari passu in the event of a return of capital by the Company upon a winding-up or otherwise. If the Company is wound up, the liquidator may, amongst other things, in accordance with the Articles of Association, with the sanction of an extraordinary resolution of the shareholders and any other sanction required by the Companies Law:

• divide among the shareholders in specie or in kind the whole or any part of the property of the Company;

• for that purpose set a value as the liquidator considers fair on any property to be so divided;

• decide how the division is to be carried out as between the shareholders; and

• vest the whole or any part of the property of the Company in trustees upon such trusts, for the benefit of the contributories as the liquidator shall think fit, but so that no shareholder shall be compelled to accept any shares or other securities whereon there is any liability.

11.12 SUMMARY OF CERTAIN PROVISIONS OF THE COMPANY’S CONSTITUTIONAL DOCUMENTS

Certain provisions of the Company’s Articles of Association have already been addressed in preceding sections. The following is a summary of certain provisions of the Company’s Memorandum of Association which have not been addressed in the preceding sections. The Company’s Articles of Association and Memorandum of Association are incorporated by reference to this Prospectus.

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The main objects of the Company include, without limitation, the ownership of vessels, the provision of related services to exploration and drilling for petroleum deposits and the carrying anywhere in the world the business of an investment company. Additionally the Company has, inter alia, the power to raise money, lend money, to issue securities, to establish offices anywhere in the world, to establish companies and to distribute assets.

11.13 CYPRUS LAW DISCLOSURE OBLIGATIONS

Periodic Financial Reporting by the Company Under Cyprus law, the Company has periodic financial reporting obligations. Specifically, it is obliged to file with the Cyprus Securities and Exchange Commission (“CySEC”) and make available to the public the following periodic reports: (a) an annual financial report comprising of, amongst other things, the audited annual financial

statements, the management report and responsibility statements.

(b) a half yearly financial report covering the first six months of the financial year comprising of, amongst other things, the interim financial statements, the interim management report and responsibility statements.

(c) an interim management statement during the first and second six (6) month periods of the financial year explaining, among other things, material events and transactions and their impact on the financial position of the Company and its subsidiaries, and a general description of the financial position and performance of the Company and its subsidiaries. This is not required where a Company publishes quarterly financial reports pursuant to the rules of the regulated market which includes quarterly interim financial statements. The Company publishes quarterly reports.

(d) an indicative result (net gain or loss after tax) for the full financial year which must be disclosed as soon as possible and at the latest, within two (2) months from the end of the period relevant to the annual financial reports.

Disclosure of acquisition/disposal of own shares The Company is under an obligation to disclose to public, the regulated market and CySec, the latest within the next working day, any acquisition or disposal of its own shares where the total proportion of its own shares reaches or exceeds or fall below the threshold of five percent (5%) or ten percent (10%) of the total voting right in the case of an acquisition or disposal of own shares. Refer also to section 13.12 Purchase of Own Shares. Disclosure of acquisition/disposal of shares Under Cyprus law, any shareholder, natural person or entity that acquires or disposes of Shares with voting rights attached, or the right to acquire or exercise voting rights, or financial instruments (in accordance with Directive 2007/14/EC), resulting in direct or indirect ownership or beneficial ownership, the holding of which meets or exceeds or falls below the thresholds of 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% of the total voting rights of the Company, has an obligation to notify the Company, the regulated market on which the Shares are admitted to listing, and CySEC. Notifications should be sent in prescribed format to CySEC by e-mail ([email protected]) or fax (+357-22-754671) and hard copies should follow to Cyprus Securities and Exchange Commission, Issuing Department, PO. Box 24996, 1306 Nicosia, Cyprus.

11.14 APPLICABLE TAKEOVER BID REGULATIONS

Cyprus has implemented the Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids ("Takeover Bids Directive”) by Law No.41(I) of 2007, as amended ("Takeover Bids Law"), which provides mandatory takeover bid rules where a person, as a result of his own acquisition or the

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acquisition by persons acting in concert with him, holds securities of a company which, added to his existing holdings and the holdings of persons acting in concert with him, directly or indirectly give him a percentage of 30% or more of existing voting rights in that company at the date of the acquisition. The rule triggers an obligation on such a person to make a bid at the earliest opportunity to all the other holders. The bid must be addressed to all the remaining shareholders and must be at a fair price. The obligation to make a mandatory bid is valid when, following the acquisition, the offeror holds at least 30 %. of the voting rights of a company. The following cases constitute a non-exhaustive list of situations where the obligation to make a bid applies:

(i) where the offeror holds no securities or holds securities representing less than 30 % of the voting rights of a company and with an acquisition of securities he/she reaches or supersedes 30 % of the voting rights of a company; or

(ii) where the offeror already holds a percentage equal to or greater than 30 % and below 50 % of the voting rights of a company and increases his/her percentage of holding.

The competence to regulate issues relating to takeover bids is separated between the competent authorities in Norway (Oslo Børs) and in Cyprus (the Cyprus Securities and Exchange Commission). Article 4(2) lit. e) of the Take-Over Directive stipulates that matters relating to the consideration offered in the case of a bid, in particular the price, and matters relating to the bid procedure, in particular the information on the offeror’s decision to make a bid, the contents of the offer document and the disclosure of the bid, shall be dealt with in accordance with the rules of Chapter 6 of the Norwegian Securities Trading Act. Under Norwegian law, a mandatory offer and the mandatory offer document will be subject to approval by Oslo Børs before submission of the offer to the target’s shareholders. The offer price must be at least as high as the highest price paid or agreed by the offeror in the six month period prior to the mandatory bid was triggered, but equal to the market price if the market price was higher when the offer was triggered. In the event that the offeror thereafter, but prior to the expiration of the bid period acquires, or agrees to acquire, additional shares at a higher price, the offeror is obliged to restate its bid at that higher price. A mandatory offer must be in cash or contain a cash alternative at least equivalent to any other consideration offered. A shareholder who fails to make the required offer must within four weeks dispose of sufficient shares so that the obligation ceases to apply. Oslo Børs may impose a daily fine upon a shareholder who fails to make the required offer. Matters relating to the information to be provided to the employees of the target company and in matters relating to company law, in particular the percentage of voting rights which triggers the obligation to launch a mandatory bid, as well as the conditions under which the board of directors of the target company may undertake any action which might result in the frustration of the bid, the applicable rules and the competent authority shall be those of Cyprus. Pursuant to section 34(1) of the Takeover Bids Law, the Board of Directors of the Company may not take any action, other than seeking alternative bids, which may result in the frustration of the bid without prior authorization of the General Meeting. There have not been any public takeover bids in respect of the Company's Shares during the current and last financial year.

11.15 APPLICABLE SQUEEZE OUT AND SELL OUT REGULATIONS

A person who becomes a majority shareholder holding 90% or more of the issued Shares carrying voting rights and not less than 90% of the voting rights of the Company or who has irrevocably agreed to acquire the same, is, for a period of 90 days, entitled to acquire the Shares of the remaining holders, and the remaining holders are also entitled to cause such majority shareholder to buy their Shares. Such compulsory acquisition would imply that the majority shareholder becomes the owner of the then acquired shares with immediate effect. The price to be paid by the majority shareholder for the compulsory acquisition shall, in the absence of an agreement between the minority shareholder and the majority shareholder within 10 days from the notice of compulsory acquisition, be determined on the basis of the provisions for determining the purchase price per share under the mandatory offer regulations pursuant to the Norwegian Securities Trading Act, see section 11.14 “Applicable takeover bid regulations”. Similarly, section 37(1) of the Takeover Bids Law allows for the holder of the remaining shares (i.e. the remaining 1-10%) of the offeree company to require the offeror (holding not less than 90% of the capital carrying voting rights and not less than 90% of the voting rights or who has irrevocably agreed to acquire the

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same) to buy his/her shares from him/her at a fair price, provided that this right is exercised within three months of the end of the time allowed for acceptance of the bid.

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12. TAXATION

Set out below is a summary of certain Cyprus and Norwegian tax matters related to investments in the Company. The summary is based on Cyprus and Norwegian laws, rules and regulations applicable as of the date of this Prospectus, which may be subject to any changes in law occurring after such date. Such changes could possibly be made on a retroactive basis. The summary is of a general nature and does not purport to be a comprehensive description of all tax considerations that may be relevant for a decision to acquire, own or dispose of Shares. Shareholders who wish to clarify their own tax situation should consult with and rely upon their own tax advisors.

12.1 CYPRUS TAXATION

12.1.1 Tax residency for companies and individuals

A company which is considered to be a resident for tax purposes in Cyprus is subject to corporate income tax in Cyprus (the “Corporate Income Tax”) on its worldwide income, subject to certain exemptions. A company is considered to be a resident of Cyprus for tax purposes if its management and control is exercised from Cyprus. A tax resident company is a company which is considered to be managed and controlled from Cyprus. Cypriot residence for tax purposes for corporate taxpayers is determined on the basis of place of management and control. There is no definition in the Cypriot tax legislation of the management and control requirement. In practice and in line with international tax practices and for the purposes of obtaining tax residency certificates from the Cyprus Tax Authorities, it is generally accepted and in line with international tax practices that the following conditions should be considered to determine if a company classifies as a resident of Cyprus for tax purposes:

1. Majority of important decisions are taken in Cyprus. This is achieved by either having the majority of directors residents of Cyprus or having meetings of the Board of Directors take place in Cyprus or providing a broad power of attorney to Cypriot entities or individuals, empowering them to manage the affairs of the company;

2. Minutes of board meetings are kept in Cyprus;

3. The company has not issued any general power of attorney to a non-Cyprus tax resident;

4. Books and records are kept in Cyprus;

5. Agreements relating to the business or the assets of the company are executed or signed in Cyprus;

6. Bank accounts are operated from Cyprus, even if the accounts are maintained with banks established outside Cyprus;

7. An actual fully fledged office is maintained in Cyprus;

8. Hard copies of commercial documentation (agreements, invoices, etc.) are stored in the office facilities of the Cypriot entity.

With respect to the individual shareholders, an individual is considered to be a tax resident of Cyprus if he or she is physically present in Cyprus for a period or periods exceeding in aggregate more than 183 days in any calendar year.

12.1.2 Domicile concept for individuals

The Special Contribution for Defence Law (the “SCD Law”) was amended in July 2015 and the new term of “domicile” was introduced. For the purposes of the SCD Law, an individual has a domicile in the Republic if he/she has a domicile of origin in Cyprus based on the provisions of the Wills and Succession Law (the “WS Law”) (i.e. domicile of the father at the time of birth), except for:

i) an individual who has acquired and maintains a domicile of choice outside Cyprus based on the provisions of the WS Law (i.e. factual concept – an individual permanently lives and intends to live

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in another country), provided that he/she has not been resident in Cyprus for any period of at least 20 consecutive years prior to the relevant tax year, or

ii) an individual who has not been resident in Cyprus for a period of at least 20 consecutive years prior to the entry into force of the provisions of this SCD Law.

It is provided that regardless of the domicile of origin, any individual who is resident in Cyprus for at least 17 out of the last 20 years prior to the relevant tax year, will be deemed domiciled in Cyprus for the purposes of this SCD Law.

12.1.3 Rates of taxation

The rate of Corporate Income Tax in Cyprus is 12.5%. A Special contribution for the Defence (the “SCD”) is levied on certain types of income. SCD is applied, subject to any available exemptions, at the following tax rates:

• 3% on 75% of certain rental income;

• 30% on interest income not arising in the ordinary course of business or in close connection with the ordinary business activity (passive interest income); and

• 17% on dividend income received or deemed to be received from a company located abroad. Such dividends are exempt from SCD if (i) the foreign company paying the dividend does not engage more than 50% directly or indirectly in activities which lead to passive income (non-trading income), or (ii) the foreign tax burden on the income of the company paying the dividend is not substantially lower than the tax burden in Cyprus (e.g., a tax rate of 6.25% or more is not considered to be substantially lower).

SCD is levied on the gross amount of income without any deduction for expenses. Capital gains tax (the “Capital Gains Tax”) is levied in Cyprus at a rate of 20% on profits from disposal of immovable property situated in Cyprus or shares of companies which own immovable property situated in Cyprus (unless the shares are listed on a recognised stock exchange). Following amendments to the Capital Gains Tax Law, with effect from 17 December 2015 Capital Gains Tax is also imposed on the sale of shares which directly or indirectly participate in other companies which hold immovable property situated in Cyprus, provided that at least 50% of the market value of the shares sold is derived from immovable property situated in Cyprus. In calculating whether the value of the immovable property represents at least 50% of the market value of the shares, any liabilities should be ignored.

12.1.4 Determination of taxable income

Determination of taxable income is generally based on accounts prepared in accordance with international financial reporting standards (IFRS), subject to certain adjustments and provisions. Certain types of income are exempt from taxation in Cyprus. The general principle of the Cyprus Income Tax law is that for an expense to be allowed as a deduction it must have been incurred wholly and exclusively for the production of taxable income. In accordance with Circular numbered 14/2008 issued by the Commissioner of Taxation, all direct expenses relating to the income from exempt activities should be deducted from such income (i.e. disallowed for corporation tax purposes) in arriving at the income to be treated as tax exempt. All general administration expenses should be allocated to the activities of the company proportionately using either the balance sheet method (for example, cost of investments/total assets * administration expenses) or the profit and loss method (income from exempt activities/total income * administration expense) or another method to be pre-agreed with the Cyprus Tax Authorities. It is noted that the disposal of fixed assets or investments which generate a gain or loss of a capital nature does not constitute an exempt activity for the purposes of apportionment of general expenses (overheads). The expenses, however, which directly or indirectly relate to such disposals, reduce the income arising from the disposal.

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12.1.5 Tax losses

Tax losses can be carried forward and be set-off against the company’s taxable income for the next five years from the end of the tax year in which they were incurred. However, if: • within any three-year period there is any change in the ownership of the shares of a company and a

substantial change in the nature of the business of a company; or

• at any time since the scale of the company’s activities has diminished or has become negligible and before any substantial reactivation of the business, there is a change in the ownership of the company’s shares;

no loss which has been incurred before the change in ownership of the shares of the company shall be carried forward in the years subsequent to such change. There is a change in the ownership of the shares of the company if: • a person acquires more than half of the ordinary share capital of the company, or;

• two or more persons jointly or severally acquire at least 5% of the ordinary share capital of the company so that all together acquire more than half of the ordinary share capital of the company.

Tax losses may also be surrendered by a company resident in the Republic (“the surrendering company”) to another company resident in the Republic (“the claimant company”) provided that the surrendering company and the claimant company are both members of the same group for the whole of the year of assessment. Any company acquired / incorporated by its parent during the tax year, will be deemed to be a member of the group for group relief purposes for that tax year. Two companies shall be deemed to be members of a group if one is at least seventy five % (75%) subsidiary of the other or both, each one separately, are at least seventy five % (75%) subsidiaries of a third company. Following amendments to the Income Tax Law, with effect from 01 January 2015, Tax losses may be surrendered to a Cyprus tax resident company by a company tax resident in another Member State of the European Union provided that such company has exhausted all the possibilities of carrying forward or surrendering its losses in its resident state or in another Member State where an intermediary holding company may be based.

In establishing whether two Cyprus tax resident companies are eligible for group relief, the interposition of a non-Cyprus tax resident company will not affect their group relief eligibility as long as the interposed non-Cyprus tax resident is tax resident in an EU Member State or in any other country with which Cyprus signed either a (bilateral or multilateral) tax treaty or an exchange of information agreement. Losses from a permanent establishment abroad (PE) can be set off with profits of the company in Cyprus. Subsequent profits of the foreign PE are taxable up to the amount of losses previously utilised in Cyprus.

12.1.6 Administration

The tax year in Cyprus is the calendar year. Corporate income tax is payable by 1 August following the tax income year. However, an estimate of tax due is due by 31 July of the tax year, and provisional tax is payable in two equal instalments on 31 July and 31 December. The final tax return has to be filed electronically through a system called TAXISnet by 31 March of the year after the next year.

12.1.7 Taxation of income and gains of the Company

The Company is resident in Cyprus for tax purposes. Gains from the disposal of securities Any gain from disposal of securities by the Company shall be exempt from Corporate Income Tax irrespective of the nature of the gain (capital or trading), the number of shares held or the holding period and shall not be subject to SCD. Such gains are also outside the scope of Capital Gains Tax provided that the company whose

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shares are disposed of does not own any immovable property situated in Cyprus, or even if it does own directly or indirectly any immovable property situated in Cyprus its shares are listed on a recognised stock exchange. The definition of securities includes amongst others shares, bonds and debentures of companies or legal persons wherever incorporated and options thereon. Dividends to be received by the Company Dividend income received by a Cyprus tax resident company (whether received from Cypriot resident or non-resident companies) is exempt from Corporate Income Tax in Cyprus. Following amendments to the Income Tax Law, with effect as from 01 January 2016, Where a Cyprus tax resident company or a PE situated in Cyprus of a non-Cyprus resident company receives dividend income from another company, the Corporate Income Tax exemption shall not apply to the extent that such dividends are deductible from the taxable income of the dividend paying company. It is explicitly stated that dividends that do not qualify for the Corporate Income Tax exemption are not considered as dividends for SCD purposes. In case where dividend income is received from a company resident in another EU Member State and such dividend income is subject to Corporate Income Tax in Cyprus, unilateral tax relief for the foreign underlying tax paid may not be credited against the Cyprus tax liability if an arrangement is considered to have been put in place that has no valid commercial reasons and aims to obtain a tax benefit.. Dividend income received from Cypriot resident companies is also exempt from SCD. As from 01 January 2012, SCD will be imposed on dividends which are indirectly paid by a company resident in the Republic, to another company, resident in the Republic, after four years from the end of the year in which the profits which were distributed as dividends were earned. However, following the issue of a Circular numbered 2011/10 by the Commissioner of Taxation, it has been clarified that the four year rule does not apply to companies or groups ultimately held by non-Cyprus tax residents. Dividend income received from non-Cypriot resident companies is exempt from SCD, unless the company paying the dividend engages, directly or indirectly, for more than 50% in activities which generate investment income and the foreign tax burden of the company paying the dividend is significantly lower than the tax burden of the company in Cyprus receiving the dividend (in practice “significantly lower” is interpreted as lower than 6.25%). Therefore, any dividends received by the Company from its non-Cyprus tax resident subsidiary, should be exempt from SCD provided the non-Cyprus tax resident subsidiary is not engaged, directly or indirectly, in activities which generate investment income exceeding total income by more than 50% and the foreign tax burden on its income is not substantially lower than the tax burden of the Company. If the exemption for SCD does not apply, dividends from non-Cypriot resident companies are subject to 17% SCD. In cases where the dividends are not exempt, tax credit for any taxes withheld abroad on the dividends and for the underlying taxes in case the dividends are received from another EU Member State is available against the 17% SCD. Profits from permanent establishments abroad of the Company Profits from a PE abroad of the Company are exempt from Corporate Income Tax in Cyprus unless the permanent establishment abroad engages, directly or indirectly, for more than 50% in activities which generate investment income and the foreign tax burden on the income of the permanent establishment abroad is significantly lower than the tax burden of the company in Cyprus (in practice “significantly lower” is interpreted as lower than 6.25%). Interest income Any interest accruing to the Company which is considered to arise in the ordinary course of its business, including interest which is closely connected with the ordinary course of its business qualifies as business income and shall be subject to Corporate Income Tax in Cyprus at a rate of 12.5%. Such interest income shall be exempt from SCD. Deemed distribution rules As from the tax year 2003 onwards, companies are deemed to have distributed to their Cyprus tax resident shareholders 70% of their accounting profits after the deduction of corporation tax at the end of two years from the end of the year in which the profits were earned. On such a deemed distribution, 17% SCD should be withheld and paid over to the Tax Authorities. The deemed distribution provisions do apply even to tax resident corporate shareholders but do not apply to non-Cyprus tax resident shareholders.

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As from 1 January 2011 the term “corporation tax” has been extended and the Corporate Income Tax, the SCD, the Capital Gains Tax and any taxes paid abroad that have not been credited against the Cyprus taxes are now taken into consideration for the calculation of the company’s accounting profits subject to deemed distribution. 'Through a Circular numbered 2011/10, the Commissioner of Taxation has clarified that the deemed distribution rules should apply only in cases where the ultimate (beneficial) shareholders of a Cyprus tax resident company are considered to be residents of Cyprus (and with the recent introduction of the domicile concept, they are also considered to be domiciled in Cyprus). Certain declarations should be filed with the tax authorities in case the direct registered shareholder(s) is a company considered to be resident for the tax purposes of Cyprus. Withholding taxes No withholding taxes shall apply in Cyprus with respect to payments of interest by a Cyprus tax resident Company to non-resident lenders (both corporations and individuals). There is also no withholding tax in Cyprus on interest paid to Cypriot tax resident corporate lenders, unless the resident lender receiving the interest is considered to have generated this interest not in the course of its ordinary activities or in connection with activities closely connected to the ordinary carrying on of its business. In such a case, the Company would have an obligation to withhold SCD at a rate of 30% on payments made in favour of Cypriot tax resident corporations. Also the Company would generally have an obligation to withhold SCD at a rate of 30% on payments of interest to Cyprus tax resident individuals who are also domiciled in Cyprus. There will also be no withholding tax in Cyprus on any dividends paid by a Cyprus tax resident Company to any shareholder except Cyprus tax resident and domiciled individuals; in the latter case the Company would have an obligation to withhold SCD at the rate of 30%. Interest expenses Interest expense is tax deductible if it is incurred wholly and exclusively for the production of taxable income. However, no deduction shall be allowed for interest applicable or deemed to be applicable to the cost of purchasing of any asset not used in the business. This provision applies for a period of 7 years from the date of purchase of the relevant asset and following the elapse of this 7-year period the interest expense can be deducted. Investment in shares is considered as a non-business asset and any interest expense that relates (or is deemed to relate) to the acquisition or financing of such asset is considered not to be tax deductible. The restricted interest expense is usually determined by the following apportionment methodology: cost of the investment in shares multiplied by the average interest borrowing rate. A circular has been issued by the Cypriot tax authorities providing guidance on the method of calculation of the amount of interest to be restricted and on certain exemptions that apply. As from 1 January 2012, restriction of interest does not apply in cases where shares are acquired directly or indirectly in a wholly owned subsidiary provided that this subsidiary does not own any assets which are not used in the business. If this subsidiary owns assets that are not used in the business the restriction of interest will only correspond to the percentage of the assets not used in the business. Notional Interest Deduction The Income Tax Law has been amended and Notional Interest Deduction (NID) on equity was introduced with effect from 01 January 2015. According to PE in Cyprus are entitled to a NID on equity, which is effectively a tax allowable deduction against the taxable profits of the company. The NID is calculated by multiplying the “new equity’’ held and used by the business in the carrying on of its activities with the “reference interest rate’’. For the purpose of the Law:

a) “Reference interest rate” is the yield of the 10 year government bond of the state in which the new equity is invested plus a 3% premium, having as a minimum rate the 10 year Cyprus government bond yield as at 31 December of the tax year preceding the relevant tax year, plus a 3% premium.

b) “New equity” is the equity introduced in the business on or after 01 January 2015 in the form of issued share capital and share premium (provided that these are fully paid) and does not include amounts that have been capitalised and which were derived from revaluation of movable or immovable property.

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It is provided that any new equity that has been introduced in a company on or after 01 January 2015 which directly/indirectly emanates from reserves existing as at 31 December 2014 but does not relate to the financing of new assets used in the business, is not deemed as new equity. The NID granted on new equity cannot exceed 80% of the taxable profit as calculated before allowing the NID. It is further provided that in the case of a loss such deduction is not granted. A company may in any given tax year elect to claim the whole or part of the amount of the NID available. Anti-abuse measures: In the case where the new equity of a Cyprus tax resident company or a non-Cyprus tax resident company which maintains a PE in Cyprus, is derived directly/indirectly from the new equity of another Cyprus tax resident company or a non-Cyprus tax resident company which maintains a permanent establishment in Cyprus, the NID on the new equity is available only to one of the two respective companies. In the case where the new equity emanates directly/indirectly from loans on which interest expense deduction is claimed, the NID on the new equity is reduced by the amount of the interest expense deduction claimed. In the case where equity is contributed in the form of assets in kind, the amount of equity for the purposes of NID may not exceed the market value of the assets at the date of their introduction into the business, and their market value must be substantiated by the Commissioner of Taxation’s judgement. In the case where reorganization is carried out without generating profits subject to taxation, the NID on equity is calculated as if the reorganization has not taken place. The Commissioner of Taxation may not grant the NID, if in his judgment actions/transactions have taken place without substantial economic or commercial purpose or the new equity on which the NID is claimed emanates from equity that existed prior to 01 January 2015 and is presented as new equity through actions/transactions with related parties, with the aim of claiming NID.

12.1.8 Capital duty

Capital duty in the form of registration fees is payable to the Department of Official Receiver and Registrar of Companies in Cyprus in respect of the registered authorised and issued share capital of a Cypriot company upon its incorporation and upon subsequent increases in share capital thereon. The capital duty rates for subsequent changes of the registered authorised and issued share capital are as follows:

• capital duties of 0.6% of the nominal value of additional registered authorised share capital (no capital duty is payable on share premium); and

• allotment fees fixed at EUR 20 flat duty on every issue, whether the shares are issued at their nominal value or at a premium. No capital duty is payable on share premium.

12.1.9 Stamp duty

Stamp duty is levied in Cyprus on every instrument if:

• it relates to any property situated in Cyprus; or

• it relates to any matter or thing which is performed or done in Cyprus, irrespective of the place where it is executed.

Stamp duty on a contractual agreement entered into on or after 1 March 2013 is levied at the following progressive rates:

• no stamp duty is payable on the first €5,000 of consideration stated in the contract;

• on consideration between €5,001 to €170,000 the rate is 0.15%;

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• on consideration exceeding €170,000 the rate is 0.2%.

The maximum amount of stamp duty payable is €20,000 per contract which applies to contracts with a consideration value of €10.046.250 or more.

12.2 NORWEGIAN TAXATION; OVERVIEW The summary below is aimed at describing certain main rules of Norwegian domestic tax law applicable to shareholders, bondholders and holders of subscription rights in the Company. The summary is based on applicable Norwegian laws, rules and regulations as at the date of this Prospectus. Such laws, rules and regulations may be subject to changes after this date, possibly on a retroactive basis. The summary is of a general nature and does not purport to be a comprehensive description of all tax considerations that may be relevant and does not address taxation in any other jurisdiction than Norway. Each shareholder, bondholders and holder of subscription rights, and specifically non-Norwegians, should consult with and rely upon their own tax advisers to determine their particular tax consequences. The summary below is based on the assumptions that the Company is considered to be (a) genuinely established and conduct genuine economic business activities in Cyprus and (b) a tax resident of Cyprus both according to current Cypriot tax legislation and the double taxation convention between Norway and Cyprus. The Company is of the opinion that these assumptions are correct. If the Company is controlled by Norwegian taxpayers (more than 50% control), Norwegian CFC-regulations (Norwegian: NOKUS) may apply. Taxation pursuant to CFC-regulations will imply that Norwegian shareholders may be taxed directly for their proportionate part of the taxable net income in the Company's subsidiaries controlled indirectly (through the Company's shareholding) by Norwegian taxpayers. Please also see section 11.3 above. Please note that for the purpose of the summary below, a reference to a Norwegian or Non-Norwegian shareholder, bondholder, holder of subscription rights or taxpayer refers to the tax residency rather than the nationality of the shareholder, bondholder, holder of subscription rights or taxpayer.

12.2.1 Norwegian taxpayers Unlimited tax liability Persons and companies considered tax resident in Norway are subject to Norwegian tax on their worldwide income (unlimited tax liability). Double taxation will however in general be prevented by applicable double taxation conventions, such as that between Norway and Cyprus, and to some extent domestic Norwegian law. Taxation of dividends Norwegian corporate shareholders Dividends distributed from the Company to Norwegian corporate shareholders (i.e. limited liability companies and certain similar entities) are generally exempt from tax pursuant to the participation exemption method (Norwegian: Fritaksmetoden). However, 3 pct. of such dividends are taxable as general income at a current rate of 25 pct., implying that dividends distributed from the Company to Norwegian corporate shareholders are effectively taxed at a rate of 0.75 pct. Norwegian personal shareholders Dividends distributed from the Company to Norwegian personal shareholders are taxed as ordinary income at a current effective rate of 28.75 pct. to the extent the dividends exceed a statutory tax-exempt allowance (Norwegian: Skjermingsfradrag). The allowance is calculated and applied on a share-by-share basis. The allowance for each share equals the cost price of the share multiplied by a risk-free interest rate determined based on the effective rate after tax on interest on treasury bills (Norwegian: “statskasseveksler”) with three months maturity. The allowance one year is allocated to the shareholder owning the share on 31 December. Norwegian personal shareholders who transfer shares during an income year will thus not be entitled to deduct any calculated allowance related to the transaction year. The Directorate of Taxes announces the risk free-interest rate in January the year after the income year. The risk-free interest rate for 2015, announced in January 2016, was 0.6 pct. Any part of the calculated allowance one year exceeding distributed dividend on a share (“excess allowance”) can be carried forward and set off against future dividends (or capital gains) on the same share (but may not be

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set off against taxable dividends or capital gains on other shares). Furthermore, for the purpose of calculating the allowance the following years, any excess allowance is added to the cost price of the share and thereby included in the basis for the calculation of allowance the following years. Credit for withholding taxes Norwegian taxpayers will in general get a tax credit for withholding taxes (if any) imposed by the dividend distributing company's resident state. The credit will in such case be limited to the imposed Norwegian tax related to the same income/dividend. Taxation upon realization of shares Norwegian corporate shareholders For Norwegian corporate shareholders capital gains upon realization of shares in the Company are generally exempt from tax pursuant to the participation exemption method (Norwegian: Fritaksmetoden). Losses are not deductible. Norwegian personal shareholders For Norwegian personal shareholders capital gains upon realization of shares in the Company are taxable as ordinary income in the year of realization, and have a corresponding right to deduct losses that arise upon such realization. The tax liability applies irrespective of time of ownership and the number of shares realized. Capital gains are taxed as ordinary income at a current effective rate of 28.75 pct. The taxable gain or loss is calculated per share as the difference between the consideration received and the cost price of the share, including any costs incurred upon acquisition or realization of the share. Any unused allowance on a share (see above) may be set off against capital gains on the same share, but will not lead to or increase a deductible loss. I.e. any unused allowance exceeding the capital gain upon realization of the share will be annulled. Any unused allowance may not be set of against gains on other shares. If a shareholder disposes of shares acquired at different times, the shares that were first acquired will be deemed as first disposed (the FIFO-principle) when calculating a taxable gain or loss. Special exit tax rules apply for resident personal shareholders that cease to be tax resident in Norway. Taxation of subscription rights Subscription for shares in the Company pursuant to a subscription right to shares in the Company is not subject to Norwegian taxation. Costs related to subscription for shares will be added to the cost price of the shares. Taxation of bonds Received interest, and any other income, on bonds prior to disposal or redemption is taxable as ordinary income at a current rate of 25 pct. for both personal and corporate Norwegian bondholders. Interest is in general taxed on an accrual basis, i.e. regardless of actual payment, with certain exceptions for default situations. Disposal, redemption and conversion is treated as realization of the bonds and any capital gain is taxed at a current rate of 25 pct. Losses are deductible. Net wealth tax Norwegian corporate taxpayers are not subject to net wealth tax. Norwegian personal taxpayers are generally subject to net wealth taxation at a current rate of 0.85 pct. on net tax assets exceeding NOK 1 400 000. Shares and bonds will be included in the net wealth tax assets with their listed value as of 1 January in the assessment year.

12.2.2 Non-Norwegian taxpayers Non-Norwegians will not be subject to taxation in Norway on net wealth, dividend, capital gain, interest or other income from shares, bonds or subscription rights in a non-Norwegian company (such as the Company), unless (i) the shares, bonds or subscription rights are effectively connected with business activities carried out or managed in Norway, or (ii) the shares, bonds or subscription rights are held by an individual who has been a resident of Norway for tax purposes with unsettled/postponed exit tax.

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13. LEGAL MATTERS

13.1 DISPUTES – ACTUAL AND POTENTIAL DISPUTES The Company is and will in the future be involved in disputes and potentially legal proceedings in the course of its regular business operations. WESTCON DISPUTE Westcon Yards AS and PRPL entered into an engineering, procurement, and construction contract (EPC) on 25 February 2015 for the conversion of Safe Scandinavia into a tender support vessel. The conversion of the vessel has experienced a major cost overrun compared to the price estimate given by Westcon Yards AS when the contract was entered into. The contract price estimate was approx. NOK 1,076 million, while the final cost is approx. NOK 2,428 million. To date PRPL has paid to Westcon Yards AS an amount of NOK 2,077 million. Another NOK 45 million was paid on 13 September 2016 (six months following the vessel's sail away). Westcon Yards AS submitted on 16 June 2016 a Writ of Summons to Stavanger City Court claiming payment of approx. NOK 306 million (plus interest). PRPL submitted Reply to the court on 15 September 2016. PRPL's present position is that it will claim repayment of NOK 225 million (plus interest) and that it should not be liable for any further payments, including the abovementioned NOK 45 million which was paid on 13 September 2016. Hence, in total the disputed amount is almost NOK 600 million. There is a risk that PRPL is not awarded its claim and that it will have to pay the claim from Westcon Yards AS, plus legal fees accrued for both Westcon Yards AS and PRPL. Except as described above, neither the Company and/or the Group is, or has been, involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware), as of the date of this Prospectus, and for the preceding 12 months, which may have, or have had in recent past significant negative effects on the Company's and/or the Group’s financial position or profitability.

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14. SELLING AND TRANSFER RESTRICTIONS

14.1 GENERAL

The grant of Subscription Rights and issue of Offer Shares upon exercise of Subscription Rights and the offer of unsubscribed Offer Shares to persons resident in, or who are citizens of countries other than Norway, may be affected by the laws of the relevant jurisdiction. Eligible Shareholders should consult their professional advisers as to whether they require any governmental or other consent or need to observe any other formalities to enable them to exercise Subscription Rights or subscribe for Offer Shares. The Company does not intend to take any action to permit a public offering of the Offer Shares in any jurisdiction other than Norway. Receipt of this Prospectus will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, this Prospectus is for information only and should not be copied or redistributed. Except as otherwise disclosed in this Prospectus, if an Eligible Shareholder receives a copy of this Prospectus in any territory other than Norway, the Eligible Shareholder may not treat this Prospectus as constituting an invitation or offer to it, nor should the Eligible Shareholder in any event deal in the Offer Shares, unless, in the relevant jurisdiction, such an invitation or offer could lawfully be made to that Eligible Shareholder, or the Offer Shares could lawfully be dealt in without contravention of any unfulfilled registration or other legal requirements. Accordingly, if an Eligible Shareholder receives a copy of this Prospectus, the Eligible Shareholder should not distribute or send the same, or Offer Shares to any person or in or into any jurisdiction where to do so would or might contravene local securities laws or regulations. If the Eligible Shareholder forwards this Prospectus into any such territories (whether under a contractual or legal obligation or otherwise), the Eligible Shareholder should direct the recipient’s attention to the contents of this section 14.1. Except as otherwise noted in this Prospectus and subject to certain exceptions: (i) the Offer Shares being granted or offered, respectively, in the Subsequent Offering may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into, Member States of the EEA that have not implemented the Prospectus Directive, Australia, Canada, Hong Kong, Japan, the United States or any other jurisdiction in which it would not be permissible to offer the Offer Shares (the “Ineligible Jurisdictions”); (ii) this Prospectus may not be sent to any person in any Ineligible Jurisdiction; and (iii) the crediting of Subscription Rights to an account of an Ineligible Shareholder or other person in an Ineligible Jurisdiction or a citizen of an Ineligible Jurisdiction (referred to as “Ineligible Persons”) does not constitute an offer to such persons of the Offer Shares. Ineligible Persons may not exercise Subscription Rights. If an Eligible Shareholder exercises Subscription Rights to obtain Offer Shares or trades or otherwise deals in the Offer Shares, that Eligible Shareholder will be deemed to have made or, in some cases, be required to make, the following representations and warranties to the Company and any person acting on the Company’s or its behalf:

(i) the Eligible Shareholder is not located in an Ineligible Jurisdiction; (ii) the Eligible Shareholder is not an Ineligible Person; (iii) the Eligible Shareholder is not acting, and has not acted, for the account or benefit of an Ineligible

Person; (iv) the Eligible Shareholder is located outside the United States and any person for whose account or

benefit it is acting on a non-discretionary basis is located outside the United States and, upon acquiring Offer Shares, the Eligible Shareholder and any such person will be located outside the United States;

(v) the Eligible Shareholder understands that the Offer Shares have not been and will not be registered under the US Securities Act and may not be offered, sold, pledged, resold, granted, delivered, allocated, taken up or otherwise transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, registration under the US Securities Act; and

(vi) the Eligible Shareholder may lawfully be offered, take up, subscribe for and receive Subscription Rights and Offer Shares in the jurisdiction in which it resides or is currently located.

The Company and any persons acting on behalf of the Company, including the Manager, will rely upon the Eligible Shareholder’s representations and warranties. Any provision of false information or subsequent breach of these representations and warranties may subject the Eligible Shareholder to liability. If a person is acting on behalf of a holder of Subscription Rights (including, without limitation, as a nominee, custodian or trustee), that person will be required to provide the foregoing representations and warranties to the Company with respect to the exercise of Subscription Rights on behalf of the holder. If such person cannot or is unable to provide the foregoing representations and warranties, the Company will not be bound to authorize the allocation of any of the Subscription Rights and Offer Shares to that person or the person on whose behalf the other is acting. Subject to the specific restrictions described below, if an Eligible Shareholder (including, without

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limitation, its nominees and trustees) is outside Norway and wishes to exercise or otherwise deal in or subscribe for Subscription Rights and/or Offer Shares, the Eligible Shareholder must satisfy itself as to full observance of the applicable laws of any relevant territory including obtaining any requisite governmental or other consents, observing any other requisite formalities and paying any issue, transfer or other taxes due in such territories. The information set out in this section 14.1 is intended as a general overview only. If the Eligible Shareholder is in any doubt as to whether it is eligible to trade Subscription Rights or subscribe for, or purchase or sell, Offer Shares, that Eligible Shareholder should consult its professional adviser without delay. Subscription Rights will initially be credited to financial intermediaries for the accounts of shareholders who hold Shares registered through a financial intermediary on the Record Date. Subject to certain exceptions, financial intermediaries, which include brokers, custodians and nominees, may not exercise any Subscription Rights on behalf of any person in the Ineligible Jurisdictions or any Ineligible Persons and may be required in connection with any exercise of Subscription Rights to provide certifications to that effect. Subject to certain exceptions, financial intermediaries are not permitted to send this Prospectus or any other information about the Subsequent Offering in or into any Ineligible Jurisdiction or to any Ineligible Persons. Subject to certain exceptions, exercise instructions or certifications sent from or postmarked in any Ineligible Jurisdiction will be deemed to be invalid and Offer Shares will not be delivered to an addressee in any Ineligible Jurisdiction. The Company reserves the right to reject any exercise (or revocation of such exercise) in the name of any person who provides an address in an Ineligible Jurisdiction for acceptance, revocation of exercise or delivery of such Subscription Rights and Offer Shares, who is unable to represent or warrant that such person is not in an Ineligible Jurisdiction and is not an Ineligible Person, who is acting on a non-discretionary basis for such persons, or who appears to the Company or its agents to have executed its exercise instructions or certifications in, or dispatched them from, an Ineligible Jurisdiction. Furthermore, the Company reserves the right, with sole and absolute discretion, to treat as invalid any exercise or purported exercise of Subscription Rights which appears to have been executed, effected or dispatched in a manner that may involve a breach or violation of the laws or regulations of any jurisdiction. Notwithstanding any other provision of this Prospectus, the Company reserves the right to permit a holder to exercise its Subscription Rights if the Company, at its absolute discretion, is satisfied that the transaction in question is exempt from or not subject to the laws or regulations giving rise to the restrictions in question. Applicable exemptions in certain jurisdictions are described further below. In any such case, the Company does not accept any liability for any actions that a holder takes or for any consequences that it may suffer as a result of the Company accepting the holder’s exercise of Subscription Rights. No action has been or will be taken by the Manager to permit the possession of this Prospectus (or any other offering or publicity materials or application or subscription form(s) relating to the Subsequent Offering) in any jurisdiction where such distribution may lead to a breach of any law or regulatory requirement. Neither the Company nor the Manager, nor any of their respective representatives, is making any representation to any offeree, subscriber or recipient of Subscription Rights and/or Offer Shares regarding the legality of an investment in the Offer Shares by such offeree, subscriber or purchaser under the laws applicable to such offeree, subscriber or recipient. Each Eligible Shareholder should consult its own advisers before subscribing for Offer Shares or purchasing Offer Shares. Eligible Shareholders are required to make their independent assessment of the legal, tax, business, financial and other consequences of a subscription for Offer Shares. A further description of certain restrictions in relation to the Offer Shares in certain jurisdictions is set out below.

14.2 UNITED STATES

The Offer Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, transferred or delivered, directly or indirectly, within the United States. There will be no public offer of the Offer Shares in the United States. A notification of exercise of Subscription Rights and subscription of Offer Shares in contravention of the above may be deemed to be invalid. The Offer Shares are being offered and sold outside the United States in reliance on Regulation S under the US Securities Act. Any offering of the Offer Shares by the Company to be made in the United States will be made only to a limited number of “qualified institutional buyers” (as defined in Rule 144A under the U.S. Securities Act) pursuant to an exemption from registration under the U.S. Securities Act who have executed and returned an U.S. investor letter to the Company prior to exercising their Subscription Rights. Prospective recipients are

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hereby notified that sellers of the Offer Shares may be relying on an exemption from the provisions of Section 5 of the U.S. Securities Act provided by Rule 144A. Accordingly, this document will not be sent to any shareholder with a registered address in the United States. In addition, the Company and the Managers reserve the right to reject any instruction sent by or on behalf of any account holder with a registered address in the United States in respect of the Subscription Rights and/or the Offer Shares. Until 40 days after the commencement of the Subsequent Offering, any offer or sale of the Offer Shares within the United States by any dealer (whether or not participating in the Subsequent Offering) may violate the registration requirements of the US Securities Act. The Offer Shares have not been approved or disapproved by the United States Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Offer Shares or the accuracy or adequacy of this document. Any representation to the contrary is a criminal offense in the United States. Each person to which Offer Shares are distributed, offered or sold in the United States, by accepting delivery of this Prospectus or by its subscription for Offer Shares, will be deemed to have represented and agreed, on its behalf and on behalf of any Eligible Shareholder accounts for which it is subscribing for Offer Shares, as the case may be, that:

(i) it is a “qualified institutional buyer” as defined in Rule 144A under the U.S. Securities Act, and that it has executed and returned an Eligible Shareholder letter to the Company prior to exercising their Subscription Rights; and

(ii) the Offer Shares have not been offered to it by the Company by means of any form of “general solicitation” or “general advertising” (within the meaning of Regulation D under the U.S. Securities Act).

Each person to which Offer Shares are distributed, offered or sold outside the United States will be deemed, by its subscription for Offer Shares or purchase of Offer Shares, to have represented and agreed, on its behalf and on behalf of any Eligible Shareholder accounts for which it is subscribing for Offer Shares or Offer Shares, as the case may be, that:

(i) it is acquiring the Offer Shares from the Company or the Managers in an "offshore transaction" as defined in Regulation S under the US Securities Act; and

(ii) the Offer Shares have not been offered to it by the Company or the Underwriters by means of any "directed selling efforts" as defined in Regulation S under the US Securities Act.

14.3 EEA SELLING RESTRICTIONS

In relation to each Member State of the EEA other than Norway, which has implemented the Prospectus Directive (each a “Relevant Member State”), with effect from and including the relevant implementation date, an offer to the public of any Offer Shares which are the subject of the Subsequent Offering contemplated by this Prospectus may not be made in that Relevant Member State, other than the Subsequent Offering in Norway as described in this Prospectus, once the Prospectus has been prepared and published in accordance with the Prospectus Directive as implemented in Norway, except that an offer to the public in that Relevant Member State of any Offer Shares may be made at any time with effect from and including the relevant implementation date under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(i) to legal entities which are qualified investors as defined in the Prospectus Directive; (ii) to fewer than 150, natural or legal persons (other than qualified investors as defined in the

Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the Managers for any such offer; or

(iii) in any other circumstances falling within Article 3(2) of the Prospectus Directive;

provided that no such offer of Offer Shares shall require the Company or any Manager to publish a Prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

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For the purposes of this provision, the expression an “offer to the public” in relation to any Offer Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Offer Shares to be offered so as to enable an Eligible Shareholder to decide to subscribe for any Offer Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State. The EEA selling restriction is in addition to any other selling restrictions set out in this Prospectus.

14.4 NOTICE TO AUSTRALIAN ELIGIBLE SHAREHOLDERS

This Prospectus is not a disclosure document under Chapter 6D of the Corporations Act 2001 (Cth) (the “Australian Corporations Act”), has not been lodged with the Australian Securities and Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the Australian Corporations Act. Accordingly:

a) the offer of the Offer Shares in Australia may only be made to persons who are "sophisticated Eligible Shareholders" (within the meaning of section 708(8) of the Australian Corporations Act) or to "professional Eligible Shareholders" (within the meaning of section 708(11) of the Australian Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708(8) of the Australian Corporations Act, so that it is lawful to offer, or invite applications for, the Subscription Rights and Offer Shares without disclosure to persons under Chapter 6D of the Australian Corporations Act; and

b) this Prospectus may only be made available in Australia to persons as set forth in clause (a) above. If you acquire Offer Shares, then you (i) represent and warrant that you are a person to whom an offer of securities can be made without a disclosure document in accordance with subsections 708(8) or (11) of the Australian Corporations Act and (ii) agree not to sell or offer for sale any Offer Shares in Australia within 12 months after their issue to the offeree or invitee under this Prospectus, except in circumstances where disclosure to Eligible Shareholders under Chapter 6D would not be required under the Australian Corporations Act. No person receiving a copy of this Prospectus and/or receiving a credit of Subscription Rights to an account in VPS with a bank or financial institution in Australia may treat the same as constituting an invitation or offer to such person.

14.5 NOTICE TO CANADIAN ELIGIBLE SHAREHOLDERS

The Offer Shares have not been and will not be qualified by a prospectus for sale to the public in Canada under applicable Canadian securities laws, and accordingly, any offer or sale of Offer Shares in Canada must be made pursuant to an exemption from the applicable prospectus and registration requirements, and otherwise in compliance with applicable Canadian laws.

14.6 NOTICE TO HONG KONG ELIGIBLE SHAREHOLDERS

The contents of this Prospectus have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the Subsequent Offering. If you are in any doubt regarding any of the contents of this Prospectus, you should obtain independent professional advice. This Prospectus does not constitute an offer or sale in Hong Kong of the Offer Shares and no person may offer or sell in Hong Kong, by means of this Prospectus other than to (a) professional Eligible Shareholders within the meaning of Part I of Schedule 1 to the Securities and Futures Ordinance of Hong Kong (Cap. 571) (“SFO”) and any rules made under the SFO (“professional Eligible Shareholders”) or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance of Hong Kong (Cap. 32) (“CO”) or which do not constitute an offer or invitation to the public for the purposes of the CO or the SFO. No person shall issue or possess for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to Offer Shares which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to those Offer Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to such professional Eligible Shareholders. Existing shareholders agree not to offer or sell in Hong Kong any Offer Shares other than (a) to professional Eligible Shareholders; or (b) in other circumstances which do not result in the document offering for sale the

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Offer Shares being a “prospectus” as defined in the CO or which do not constitute an offer to the public within the meaning of the CO or the SFO. Existing shareholders also agree not to issue or have in their possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Offer Shares, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the Offer Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to professional Eligible Shareholders.

14.7 NOTICE TO JAPANESE ELIGIBLE SHAREHOLDERS

The Subsequent Offering hereby has not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the “Financial Instruments and Exchange Law”). Accordingly, each Underwriter has represented, warranted and agreed that the Offer Shares to which it each subscribes will be subscribed by it as principal and that, in connection with the offering made hereby, it will not, directly or indirectly, offer or sell any Offer Shares in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan) or to others for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and other relevant laws and regulations of Japan.

14.8 NOTICE TO SWISS ELIGIBLE SHAREHOLDERS

This Prospectus is not being publicly distributed in Switzerland. Each copy of this document is addressed to a specifically named recipient and may not be passed on to third parties. The Offer Shares are not being offered to the public in or from Switzerland, and neither this document, nor any other offering material in relation to the Offer Shares may be distributed in connection with any such public offering.

15. ADDITIONAL INFORMATION

15.1 DOCUMENTS ON DISPLAY For the life of this Prospectus the following documents (and copies thereof) are available for inspection at the Company’s offices and can be downloaded from the Company's web page www.prosafe.com: • Articles of Association of the Company • All reports, letters and other documents, historical financial information, valuations and statements

prepared by any expert at the Company's request any part of which is included or referred to in the registration document;

• Historical financial information for the Company’s annual accounts for 2015, 2014 and 2013; • Historical financial information for the Company’s quarterly accounts for the period ending 30 June

2016 • Historical financial information for the Company’s subsidiaries for the last two financial years; and • Stock exchange notices, including quarterly reports, distributed by the Company through Oslo Stock

Exchange’ information system NewsWeb.

15.2 INCORPORATION BY REFERENCE The information incorporated by reference in this Prospectus shall be read in connection with the cross-reference list as set out in the table below except as provided in this Section, no other information is incorporated by reference into this Prospectus. The Annual Reports for 2015, 2014 and 2013, quarterly reports for the period ending 30 June 2016, 30 June 2015 and 30 September 2014 as well as the Company’s Articles of Association and Memorandum of Association are incorporated by reference. Incorporated by reference

Website Section in the Prospectus

Q2 Report 2016 http://www.prosafe.com/getfile.php/PDF%20Filer/Financial%20reports/2016%20Q2%20report.pdf

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Q2 Report 2015 http://www.prosafe.com/getfile.php/PDF%20Filer/Financial%20reports/2015%20Q2%20report.pdf

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Annual report 2015 http://www.prosafe.com/getfile.php/PDF%20Filer/Annual%20reports/Annual%20report%202015.pdf

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Annual report 2014 http://www.prosafe.com/getfile.php/2014%20annual%20report/Prosafe%20annual%20report%202014.pdf

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Annual report 2013 http://www.prosafe.com/getfile.php/2013%20annual%20repor 9

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t/Annual%20report%202013.pdf Articles of association http://www.prosafe.com/getfile.php/PDF%20Filer/Articles%2

0of%20association%20-%20Unofficial%20consolidated%20version.pdf

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Memorandum of association

http://www.prosafe.com/getfile.php/PDF%20Filer/20150513-UNOFFICIAL%20CONSOLIDATED%20MEMORANDUM%20PROSAFE%20-%20ENG%20final.pdf

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16. DEFINITIONS AND GLOSSARY OF TERMS

Anchor Shareholders North Sea Strategic Investments AS and M&G Annual Report The Company’s consolidated annual report Annual General Meeting The annual general meeting of the Company

Anti-Money Laundering Legislation The Norwegian Money Laundering Act No. 11 of 6 March 2009 and the Norwegian Money Laundering Regulations No. 302 of 13 March 2009

Articles of Association The Company’s articles of association

Capital Reduction Share capital reduction of the nominal value of the Company’s issued Ordinary Shares from EUR 0.25 to EUR 0.001 as resolved by the Company’s extraordinary general meeting on 23 August 2016

Cash-Out Option Cash option in connection with the conversion of the Senior Unsecured Bonds as described in section 4.2.3

Class A Shares Shares issued in an interim separate class of shares, Class A, with a nominal value of EUR 0.001 each.

Company Prosafe SE

Companies Law The Companies Law, Chapter 113 of the statutes of the Republic of Cyprus (as amended from time to time)

Cosco Cosco (Quidong) Offshore Co. Ltd Board of Directors or Board The board of directors of the Company Bond Agreement The convertible bond agreement dated

Bond Conversion Shares 1,400,839,757shares issued in connection with the Refinancing as part of the conversion of the Senior Unsecured Bonds.

CEO Chief Executive Officer CFO Chief Financial Officer Corporate Governance Code Norwegian Code of Practice for Corporate Governance of 30 October 2014 EBT Earnings Before Tax EBIT Earnings Before Interest and Tax EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation

Eligible Shareholders

Holders of the Company's shares as of 12 July 2016, as registered in the Norwegian Securities Depository as of 14 July 2016 who are not resident in a jurisdiction where such offering would be unlawful, or would (in jurisdictions other than Norway) require any prospectus filing, registration or similar action and who were not able to participate in the Private Placement

EU/EEA The European Union / European Economic Area

EUR, USD, GBP, NOK The lawful currencies of the European Union, Unites States of America, United Kingdom and Norway

Executive Management The executive management team of the Company Extraordinary General Meeting The extraordinary general meeting of the Company E&P Exploration and production Foreign Corporate EEA Shareholders Foreign Shareholders who are corporations tax-resident within the EEA

Foreign Personal EEA Shareholders Foreign Shareholders who are individuals tax-resident within the EEA for tax purposes

Foreign Shareholders Shareholders that are not resident in Norway for Norwegian tax purposes

Forward-looking statements

Statements regarding future developments, including, without limitation, projections and expectations regarding the Company’s future financial position, business strategy, plans and objectives, all of which are based on information available to the Company, and views and assessment of the Company, as of the date of this Prospectus.

General Meeting The general meeting of the shareholders of the Company. IFRS International Financial Reporting Standards

Ineligible Jurisdiction Jurisdictions where the Prospectus may not be distributed and/or with legislation that, according to the Company's assessment, prohibits or otherwise restricts subscription for Offer Shares

Ineligible Shareholders Shareholders resident in Ineligible Jurisdictions ISIN International Securities Identification Number

Managers ABG Sundal Collier ASA, Pareto Securities AS, DNB Markets, a part of DNB Bank ASA, Nordea Markets, a part of Nordea Bank Norge ASA and Skandinaviska Enskilda Banken AB (publ.) Oslo branch

New Convertible Bonds The convertible bonds with ISN NO 001 077102.5 issued in connection with the Refinancing.

Norwegian Corporate Shareholders Shareholders that are limited liability companies, equities funds, savings banks, mutual insurance companies or similar entities tax-resident in Norway

Norwegian Personal Shareholders Shareholders who are individuals tax-resident in Norway NCS Norwegian Continental Shelf Group The Company with its consolidated subsidiaries Offer Shares The shares to be issued in the Subsequent Offering Ordinary Shares The ordinary shares of the company, currently with a nominal value of EUR 0.001 and

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with ISIN CY0100470919

Parent Guaranteed Amounts Parent Company Guarantees of approximately USD 377 million in connection with currently uncompleted contracts

PIK Payment-in-kind

Private Placement The Private Placement of 4,376,600,000 Private Placement Shares conducted on 12 July 2016

Private Placement Shares The Shares issued in the Private Placement Procon Procon Offshore ASA PRPL Prosafe Rigs Pte. Ltd. Prospectus This Prospectus dated 14 October 2016 Record Date 14 July 2016

Refinancing The comprehensive refinancing of the Company announced on 7 July 2016 as described in section 4.

Securities Trading Act The Norwegian Securities Trading Act of 29 June 2007 No. 75 (as amended) Senior Unsecured Bonds The Company's senior unsecured bonds PRS08, PRS09, PRS10 and PRS11 Shares The existing issued shares of the Company, both Ordinary Shares and Class A Shares Subscription Period From 17 October 2016 to 31 October 2016 at 16:30 Oslo time Subscription Price NOK 0.25 Subscription Rights Subscription rights granted to Eligible Shareholders Subsequent Offering The offering of up to 504,000,000 Offer Shares directed towards Eligible Shareholders

Takeover Bids Directive Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids

Takeover Bids Law Law No.41(I) of 2007 TSV Tender Support Vessel CySEC The Cyprus Securities and Exchange Commission VPS The Norwegian Central Securities Depository or "Verdipapirsentralen"

APPENDIX 1 – SUBSCRIPTION FORM

PROSAFE SE SUBSEQUENT OFFERING OCTOBER 2016

In order for investors to be certain to participate in the Subsequent Offering, Subscription Forms must be received no later than 31 October 2016 at 16:30 (CET). The Subscriber bears the risk of any delay in the postal communication, busy facsimiles and data problems preventing orders from being received by the Managers.

SUBSCRIPTION FORM Properly completed Subscription Forms must be submitted to the Managers as set out below:

ABG Sundal Collier ASA Munkedamsveien 45, PO Box 1444 Vika NO-0115, Oslo E-mail: [email protected]

Pareto Securities Dronning Mauds gate 3, N-0115 Oslo, Norway Mail: [email protected]

DNB Markets, Registrars Department Dronning Eufemias gate 30, N-0021 Oslo, Norway Mail: [email protected]

Nordea Markets Essendropsgate 7, P.O. box 1166 Sentrum, N-0107 Oslo, Norway Mail: [email protected]

SEB Filipstad Brygge 1, N-0123 Oslo, Norway Mail: [email protected]

Norwegian subscribers domiciled in Norway can in addition subscribe for shares at ww.abgsc.no, www.paretosec.com, www.dnb.no/emisjoner, www.nordea.no/prs, www.seb.no

General information: The terms and condition for the subsequent offering (the “Subsequent Offering”) in Prosafe SE (“Prosafe” or the “Company”) of up to 504,000,000 offer shares (the “Offer Shares”) to be issued pursuant to a resolution by the Company’s board of directors (the “Board of Directors”) 2016, based on an authorisation to increase the share capital by the Company’s extraordinary general meeting on 23 August 2016 (the “EGM”) are set out in the prospectus dated 14 October 2016 (the “Prospectus”). Terms defined in the Prospectus shall have the same meaning in this Subscription Form. The notice of, and the minutes from, the EGM minutes (with appendices), the minutes of the Company’s Board meeting, the Articles of Association and the annual accounts for the last three years, are available at the Company’s registered office. All announcements referred to in this Subscription Form will be made through Oslo Børs’ information system under the Company’s ticker “PRS”. This Subscription Form may only be distributed together with this Prospectus. In case of any discrepancies between the Subscription Form and the Prospectus, the Prospectus shall prevail.

Offer Shares and Subscription Rights: The Subsequent Offering comprises 504,000,000 non-tradable subscription rights (the “Subscription Rights”), where each Subscription Right, subject to applicable securities law, give the right to subscribe for and be allocated one (1) Offer Share. Over- subscription is allowed by holders of Subscription Rights. No fractional Offer Shares will be issued.

Subscription Period: The subscription period is from and including 17 October 2016 to 16:30 (CET) on 31 October 2016 (the “Subscription Period”). Neither the Company nor the Managers may be held responsible for delays in the mail system or for Subscription Forms forwarded by facsimile that are not received in time by the Managers. It is not sufficient for the Subscription Form to be postmarked within the deadline. The Managers have discretion to refuse any improperly completed, delivered or executed Subscription Forms or any subscription which may be unlawful. Subscription Forms that are received too late or are incomplete or erroneous are therefore likely to be rejected without any notice to the subscriber. The subscription for Offer Shares is irrevocable and may not be withdrawn, cancelled or modified once it has been received by the Managers. Multiple subscriptions are allowed.

Subscription price: The subscription price for one (1) Offer Share is NOK 0.25.

Right to subscribe: The Subscription Rights will be issued to the Company’s shareholders as of close of trading on 12 July 2016, as appeared in VPS on 14 July 2016 (the “Record Date”), the Eligible Shareholders (“Eligible Shareholders”). Each Eligible Shareholder will be granted 3.56 Subscription Rights for every 1 Share owned as of the Record Date. Subscription Rights not used to subscribe for the Offer Shares will lapse without any compensation upon expiry of the Subscription Period and will consequently be of no value. The number of Subscription Rights allocated to each Eligible Shareholder will be rounded down to the nearest whole Subscription Right.

Allocation: The allocation criteria are set out in the Prospectus. All Subscribers being allotted Offer Shares will receive a letter from the Managers confirming the number of Offer Shares allotted to the Subscriber. This letter is expected to be mailed on or about 1 November 2016.

Payment: The payment for the Offer Shares falls due on 4 November 2016 (the “Payment Date”). By signing the Subscription Form, each Subscriber having a Norwegian bank account authorises the Managers to debit the bank account specified by the Subscriber below for payment of the allotted Offer Shares for transfer to one of the Managers. The Managers reserves the right to make up to three attempts to debit the Subscribers’ accounts if there are insufficient funds on the account on previous debit dates. Subscribers who do not have a Norwegian bank account must ensure that payment with cleared funds for the Offer Shares allocated to them is made on or before the Payment Date and should contact the Managers in this respect for further details and instructions.

DETAILS OF THE SUBSCRIPTION

Subscriber’s VPS account Number of Subscription Rights

Number of Offer Shares subscribed for (incl. over-subscription)

(For broker: Consecutive no.)

SUBSCRIPTION RIGHTS GIVE THE RIGHT TO BE ALLOCATED ONE (1) OFFER SHARE

Subscription price per Offer Share

1 NOK 0.25

Total Subscription amount to

be paid

NOK

IRREVOCABLE AUTHORISATION TO DEBIT ACCOUNT (MUST BE COMPLETED)

My Norwegian bank account to be debited for the consideration for Offer Shares allotted (number of Offer Shares allotted x subscription price)

(Norwegian bank account no. 11 digits) In accordance with the terms and conditions set out in the Prospectus and this Subscription Form, I/we hereby irrevocably (i) confirm my/our request to subscribe for the number of Offer Shares specified above and authorise each of the Managers, and anyone appointed by any of them, to subscribe in my/our name and/or on my/our behalf for such Offer Shares (for my/our account and risk) and to take all and any action to effectuate the same, (ii) and grant the Managers, or any one of them, authorisation to debit (by direct or manual debiting as described above) the specified bank account for the payment of the Offer Shares allotted to me/us, and (iii) confirm and warrant to have read the Prospectus and that I/we are eligible to subscribe for Offer Shares under the terms and conditions set out in the Prospectus..

Place and date

Must be dated in the Subscription Period

Binding signature. The Subscriber must have legal capacity. When signed on behalf of a company or pursuant to an authorisation, documentation in the form of a company certificate or power of attorney should be attached.

INFORMATION ON THE SUBSCRIBER (MUST BE COMPLETED)

Subscriber’s VPS account number

Forename

Surname/company

Street address (for private: home address):

Post code/district/ Country

Personal ID number / Organisation number

Norwegian Bank Account for dividends

Nationality

Daytime telephone number

E-mail address:

ADDITIONAL GUIDLINES FOR THE SUBSCRIBERS

Regulatory matters: In accordance with the Markets in Financial Instruments Directive (“MiFID”) of the European Union, Norwegian securities law imposes requirements in relation to business investments. In this respect, the Managers must categorize all new clients in one of three categories: eligible counterparties, professional and non-professional clients. All subscribers in the Subsequent Offering who/which are not existing clients of one of the Managers will be categorized as Non-professional clients. Subscribers can, by written request to the Managers, ask to be categorized as a professional client if the subscriber fulfils the applicable requirements of the Norwegian Securities Trading Act. For further information about the categorization, the subscriber may contact the Managers. The subscriber represents that he/she/it is capable of evaluating the merits and risks of an investment decision to invest in the Company by subscribing for Offer Shares, and is able to bear the economic risk, and to withstand a complete loss, of an investment in the Offer Shares.

Selling restrictions: The attention of persons who wish to subscribe for Offer Shares is drawn to section 14 “Selling and transfer restrictions” of the Prospectus. The making or acceptance of the Subsequent Offering to or by persons who have registered addresses outside

Norway or who are resident in, or citizens of, countries outside Norway, may be affected by the laws of the relevant jurisdiction. Those persons should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to subscribe for Offer Shares. It is the responsibility of any person outside Norway wishing to subscribe for Offer Shares under the Subsequent Offering to satisfy himself/herself as to the full observance of the laws of any relevant jurisdiction in connection therewith, including obtaining any governmental or other consent which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes due in such territories. The Subscription Rights and Offer Shares have not been registered and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or under the securities law of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, delivered or transferred, directly or indirectly, within the United States. There will be no public offer of the Subscription Rights and Offer Shares in the United States. The Subscription Rights and Offer Shares have not been and will not be registered under the applicable securities laws of Australia or Switzerland and may not be offered, sold, resold or delivered, directly or indirectly, in or into Australia or Switzerland except pursuant to an applicable exemption from applicable securities laws. This Subscription Form does not constitute an offer to sell or a solicitation of an offer to buy Offer Shares in any jurisdiction in which such offer or solicitation is unlawful. Subject to certain exceptions, the Prospectus will not be distributed in the United States, Australia or Switzerland. Except as otherwise provided in the Prospectus, the Subscription Rights and the Offer Shares may not be transferred, sold or delivered in the United States, Australia or Switzerland. Exercise of Subscription Rights and subscription of Offer Shares in contravention of the above restrictions and those set out in the Prospectus may be deemed to be invalid.

Execution only: The Managers will treat the Subscription Form as an execution-only instruction. The Managers are not required to determine whether an investment in the Offer Shares is appropriate or not for the subscriber. Hence, the subscriber will not benefit from the protection of the relevant conduct of business rules in accordance with the Norwegian Securities Trading Act.

Information exchange: The subscriber acknowledges that, under the Norwegian Securities Trading Act and the Norwegian Commercial Banks Act and foreign legislation applicable to the Managers there is a duty of secrecy between the different units of the Managers as well as between the Managers and the other entities in the Managers’ group. This may entail that other employees of the Managers or the Managers’ group may have information that may be relevant to the subscriber and to the assessment of the Offer Shares, but which the Managers will not have access to in their capacity as managers for the Subsequent Offering.

Information barriers: The Managers are investments firms that offer a broad range of investment services. In order to ensure that assignments undertaken in the Managers’ corporate finance department are kept confidential, the Managers’ other activities, including analysis and stock broking, are separated from the Managers’ corporate finance department by information walls. Consequently, the subscriber acknowledges that the Managers’ analysis and stock broking activity may act in conflict with the subscriber’s interests with regard to transactions of the Shares, including the Offer Shares or the Subscription Rights, as a consequence of such information walls.

VPS account and mandatory anti-money laundering procedures: The Subsequent Offering is subject to the Norwegian Money Laundering Act No. 11 of March 6, 2009 and the Norwegian Money Laundering Regulations No. 302 of March 13, 2009 (collectively the “Anti-Money Laundering Legislation”). Subscribers who are not registered as existing customers with the Managers must verify their identity in accordance with the requirements of the Anti-Money Laundering Legislation, unless an exemption is available. Subscribers who have designated an existing Norwegian bank account and an existing VPS account on the Subscription Form are exempted, unless verification of identity is requested by the Managers. The verification of identity must be completed prior to the end of the Subscription Period. Subscribers that have not completed the required verification of identity may not be allocated Offer Shares. Further, in participating in the Subsequent Offering, each subscriber must have a VPS account. The VPS account number must be stated on the Subscription Form. VPS accounts can be established with authorised VPS registrars, which can be Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA. Establishment of a VPS account requires verification of identity before the VPS registrar in accordance with the Anti-Money Laundering Legislation. Non-Norwegian investors may, however, use nominee VPS accounts registered in the name of a nominee. The nominee must be authorized by the Financial Supervisory Authority of Norway.

Terms and conditions for payment by direct debiting – securities trading: Payment by direct debiting is a service provided by the banks in Norway in cooperation. In the relationship between the payer and the payer’s bank, the following applies as standard conditions:

1. The service “payment by direct debiting – securities trading” is supplemented by the account agreement between the payer and the payer’s bank, ref. in particular Section C of the account agreement, General terms and conditions for deposits and payment instructions.

2. Costs related to payment based on “payment by direct debiting – securities trading” are found in the bank’s prevailing price list, account information and/or are provided in other suitable manner. The bank will charge the incurred costs on the designated account.

3. The authorisation for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank who in turn will charge the payer’s bank.

4. In case of withdrawal of the authorisation for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Norwegian Financial Contracts Act, the payer’s bank shall assist if the payer withdraws a payment instruction that has not been completed. Such withdrawal may be regarded as a breach of the agreement between the payer and the beneficiary.

5. The payer cannot authorize payment of a higher amount than the funds available on the payer’s account at the time of payment. The payer’s bank will normally perform a verification of available funds prior to the account being charged. If the account has been charged with an amount higher than the funds available, the difference shall immediately be covered by the payer.

6. The payer’s account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorization for direct debiting, the account will be charged as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not, however, take place after the authorization has expired as indicated above. Payment will normally be credited the beneficiary’s account between one and three working days after the indicated date of payment/delivery.

7. If the payer’s account is wrongfully charged after direct debiting, the payer’s right repayment of the charged amount will be governed by the account agreement and the Norwegian Financial Agreement Act.

Overdue and missing payments: Overdue and late payments will be charged with interest at the applicable rate from time to time under the Norwegian Act on Interest on Overdue Payment of 17 December 1976 no. 100, currently 8.50% per annum. If a subscriber fails to comply with the terms of payment, the Offer Shares will, subject to the restrictions in the Norwegian Public Limited Companies Act and at the discretion of the Managers, not be delivered to the subscriber. In order to enable timely registration of the share capital increase relating to the Subsequent Offering with the Norwegian Company Register, the Company reserves the right to make arrangements for advances of payment on behalf of subscribers who have not made payment of the Offer Shares by the Payment Date by a person other than the subscriber (a "Payment Advancing Person") pursuant to Section 10-12 of the Norwegian Public Limited Companies Act. To the extent such payment advance is made on behalf of a non-paying subscriber, the Offer Shares subscribed by the non-paying subscriber shall be provisionally registered in a separate account with the VPS, in anticipation of settlement by the non-paying subscriber. If the non-paying subscriber has not made payment within three days after the Payment Date, the Payment Advancing Person may from and including the fourth day after the Payment Due Date either assume ownership of the Offer Shares subscribed by the non-paying subscriber by notifying the Company, or sell such Offer Shares for the non-paying subscriber's account and risk without further notice to the subscriber in question in accordance with Section 10-12, fourth paragraph of the Norwegian Public Limited Companies Act. The non-paying subscriber will be liable for any loss, cost and expenses suffered or incurred by the Company and/or a Payment Advancing Persons as a result of or in connection with such disposals. The non-paying subscriber shall remain liable for payment of the entire amount due; interest, costs, charges and expenses accrued (and will not be entitled to profits, if any), and the Company and/or the Payment Advancing Person may enforce payment for any such amount outstanding.

Selling and transfer restrictions: Please refer to Section 14 ("Selling and transfer restrictions") of the Prospectus. Please note that certain persons that are resident in, or who are citizens of countries other than Norway, may be required to give certain representations and warranties and to execute additional documents or letters to confirm their eligibility to participate in the Subsequent Offering.

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ISIN NO 001 077102.5

BOND AGREEMENT

between

Prosafe SE (as Issuer)

and

Nordic Trustee ASA

(as Bond Trustee)

on behalf of

the Bondholders

in the bond issue

Prosafe SE Subordinated Convertible Bond Issue 2016/2021

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TABLE OF CONTENTS

1 INTERPRETATION 3

2 THE BONDS 8

3 LISTING 8

4 REGISTRATION IN THE SECURITIES DEPOSITORY 8

5 PURCHASE AND TRANSFER OF BONDS 9

6 CONDITIONS PRECEDENT 9

7 REPRESENTATIONS AND WARRANTIES 9

8 STATUS OF THE BONDS AND SECURITY 11

9 INTEREST 11

10 MATURITY OF THE BONDS AND REDEMPTION 11

11 PAYMENTS 13

12 ISSUER'S ACQUISITION OF BONDS 14

13 CONVERSION TERMS 14

14 ADJUSTMENTS OF THE CONVERSION PRICE 16

15 ADJUSTMENT OF THE CONVERSION PRICE IF THE SHARES ARE DE-LISTED 22

16 MERGER AND DE-MERGER 23

17 COVENANTS 24

18 FEES AND EXPENSES 26

19 EVENTS OF DEFAULT 27

20 BONDHOLDERS' MEETING 29

21 THE BOND TRUSTEE 31

22 MISCELLANEOUS 33

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This agreement dated 9 September 2016, has been entered into by and between:

(1) Prosafe SE, a public limited liability company existing under the laws of Cyprus with registration number SE4, as issuer (the "Issuer"), and

(2) Nordic Trustee ASA, a public limited liability company existing under the laws of Norway with registration number 963 342 624, as bond trustee (the "Bond Trustee").

1 Interpretation

1.1 Definitions

In this Bond Agreement:

"Account Manager" means a Bondholder's account manager in the Securities Depository.

"Additional Cash Settlement Amount" shall have the meaning given to it in Clause 14.6.

"Additional Redemption Settlement Shares" shall have the meaning given to it in Clause 10.2.4.

"Additional Shares" shall have the meaning given to it in Clause 14.5.

"Attachment" means any attachment to this Bond Agreement.

"Bond Agreement" means this bond agreement, including any Attachments to it, each as amended from time to time.

"Bond Issue" means the bond issue constituted by the Bonds.

"Bondholder" means a holder of Bond(s), as registered in the Securities Depository, from time to time.

"Bondholders' Meeting" means a meeting of Bondholders, as set out in Clause 20.

"Bonds" means the convertible debt instruments issued by the Issuer pursuant to this Bond Agreement.

"Business Day" means any day on which commercial banks in Norway and New York are open for general business, and can settle foreign currency transactions in Norway and New York.

"Business Day Convention" means that no adjustment will be made, notwithstanding the Payment Date occurs on a day that is not a Business Day, and if such date is not a Business Day, payments of interest and/or principal (as the case may be) will be made on the first following day that is a Business Day (No Adjustments of Business Day).

"Capital Reduction" means a reduction of the nominal value of the Ordinary Shares from EUR 0.25 to EUR 0.001 through a reduction of issued share capital of the Issuer.

"Cash Dividend" shall have the meaning given to it in Clause 14.13.

"Cash Settlement Amount" shall have the meaning given to it in Clause 13.8.

"Cash Settlement Calculation Period" shall have the meaning given to it in Clause 13.8.

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"Class A Shares" means fully paid class A shares issued by the Issuer with nominal value of EUR 0.001, ranking for voting, dividend and interim dividend as well as on a return of capital in a winding up of the Issuer, pari passu with the Ordinary Shares as one and the same class of shares and of equal nominal value per share and carrying the rights of conversion to ordinary shares as set out in the articles of association of the Company as at the date hereof, and registered in the Securities Depositary under ISIN CY 0106610914.

"Compliance Certificate" shall have the meaning given to it in Clause 17.2.2.

"Conversion Date" means the date falling ten (10) Business Days after the Paying Agent has received an exercise notice pursuant to Clause 13.4.

"Conversion Price" means NOK 0.25, always subject to adjustments as set out herein.

"Conversion Right" means the right of each Bondholder to convert each Bond into Shares at the Conversion Price in effect on the relevant Conversion Date.

"Current Market Price" shall have the meaning given to it in Clause 14.13.

"Current Value" shall have the meaning given to it in Clause 10.2.2.

"Decisive Influence" means a person (i) holding, directly or indirectly, more than 50% of the outstanding share capital of another person, and/or (ii) having, as a result of an agreement, understanding and/or other arrangement and/or through the direct and/or indirect ownership of shares and/or other ownership interests in another person: (a) a majority of the voting rights in that other person; or (b) a right to elect or remove a majority of the members of the board of directors of that other person. When determining the relevant person's number of voting rights in the other person or the right to elect and remove members of the board of directors, rights held by the parent company of the relevant person and the parent company's Subsidiaries shall be included.

"Defeasance Pledge" shall have the meaning given to it in Clause 22.2.

"Dividend" shall have the meaning given to it in Clause 14.13.

"EUR" means the single currency introduced at the start of the third stage of the European Economic and Monetary Union.

"Event of Default" means the occurrence of an event or circumstance specified in Clause 19.1.

"Exchange" means the Oslo Stock Exchange.

"Exercise Period" means the period commencing on the Issue Date and ending ten (10) Business Days prior to the Maturity Date.

"Face Value" means the denomination of each of the Bonds, as set out in Clause 2.2.

"Fair Market Value" shall have the meaning given to it in Clause 14.13.

"Finance Documents" means (i) this Bond Agreement, (ii) the agreement between the Bond Trustee and the Issuer referred to in Clause 18.2, and (iii) any other document which is executed at any time by the Issuer or any other person in relation to any amount payable under this Bond Agreement.

"Financial Indebtedness" means any indebtedness for or in respect of: (a) moneys

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borrowed; (b) any amount raised by acceptance under any acceptance credit facility or dematerialized equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS applicable on the Issue Date, be treated as finance or capital lease; (e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); (f) any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the mark to market value shall be taken into account); and (h) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (g) above.

"Financial Statements" means the audited unconsolidated and consolidated annual financial statements of the Issuer for any financial year, drawn up according to IFRS, such accounts to include a profit and loss account, balance sheet, cash flow statement and management commentary or report from the Board of Directors.

"Formal Insolvency Event" means an event whereby formal insolvency proceedings of the Issuer or one or both of its material asset owning subsidiaries are initiated in any relevant jurisdiction.

"Group" means the Issuer and its Subsidiaries, and a "Group Company" means the Issuer or any of its Subsidiaries.

"IFRS" means International Financial Reporting Standards, and guidelines and interpretations issued thereto by the International Accounting Standards Board, in force from time to time.

"Independent Financial Adviser" shall have the meaning given to it in Clause 14.13.

"Interim Accounts" means the unaudited consolidated quarterly financial statements of the Issuer for any quarter ending on a Quarter Date, drawn up according to IFRS, such accounts to include a profit and loss account, balance sheet, cash flow statement and management commentary or report from the Board of Directors.

"ISIN" means International Securities Identification Number – the identification number of the Bond Issue.

"Issue Date" means 14 September 2016.

"Issuer's Bonds" mean any Bonds owned by the Issuer, any person or persons who has Decisive Influence over the Issuer or any person or persons over whom the Issuer has Decisive Influence.

"Managers" mean the managers for the Bond Issue, being ABG Sundal Collier ASA, Nordea Markets, a part of Nordea Bank Norge, Pareto Securities AS, DNB Markets, a part of DNB Bank ASA, and Skandinaviska Enskilda Banken AB (publ.) Oslo Branch.

"Material Adverse Effect" means a material adverse effect on: (a) the Issuer's ability to perform and comply with its obligations under any of the Finance Documents; or (b) the validity or enforceability of any of the Finance Documents.

"Maturity Date" means 23 August 2021. Any adjustment will be made according to the Business Day Convention.

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"NOK" means Norwegian kroner, being the lawful currency of Norway.

"Non-Cash Dividend" shall have the meaning given to it in Clause 14.13.

"Ordinary Shares" means fully paid ordinary shares issued by the Issuer with nominal value of EUR 0.25 (to be reduced to EUR 0.001 through the Capital Reduction) and registered in the Securities Depositary under ISIN CY0100470919.

"Outstanding Bonds" means the Bonds not redeemed or otherwise discharged. "Party" means a party to this Bond Agreement (including its successors and permitted transferees).

"Paying Agent" means Nordea Bank Norge ASA or such other legal entity appointed by the Issuer to acts as its paying agent in the Securities Registry with respect to the Bonds.

"Payment Date" means a date for payment of principal under this Bond Agreement.

"Prevailing Rate" shall have the meaning given to it in Clause 14.13.

"QIB" means "Qualified Institutional Buyers" or "QIBs" within the meaning of Rule 144A under the US Securities Act.

"Quarter Date" means each 31 March, 30 June, 30 September and 31 December.

"Redemption Settlement Shares" shall have the meaning given to it in Clause 10.2.2.

"Reference Date" shall have the meaning given to it in Clause 14.5.

"Refinancing" means the refinancing of the Issuer's two senior bank facilities and four existing senior unsecured bond issues.

"Refinancing Event" means a material refinancing of the majority of the financial indebtedness of the Group in connection with actual or potential financial difficulties.

"Release Agreement" means the release agreement dated on the date of this Bond Agreement and entered into between Nordic Trustee ASA and the Issuer, whereby the Issuer's four existing senior unsecured bond issues are released and discharged as part of the Refinancing.

"Relevant Page" shall have the meaning given to it in Clause 14.13.

"Relevant Stock Exchange" shall have the meaning given to it in Clause 14.13.

"Retroactive Adjustment" shall have the meaning given to it in Clause 14.5.

"Securities" shall have the meaning given to it in Clause 14.13.

"Securities Depository" means the securities depository in which the Bond Issue is registered, being Verdipapirsentralen ASA (VPS) in Norway.

"Security" means any encumbrance, mortgage, charge, pledge, lien or other encumbrance or security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

"Security and Covenant Defeasance" shall have the meaning given to it in Clause 22.2.

"Share Settlement Event" shall have the meaning given to it in Clause 10.2.1.

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"Share Settlement Option" shall have the meaning given to it in Clause 10.2.1.

"Share Settlement Option Notice" shall have the meaning given to it in Clause 10.2.2.

"Share Settlement Reference Date" shall have the meaning given to it in Clause 10.2.4.

"Share Settlement Retroactive Adjustment" shall have the meaning given to it in Clause 10.2.4.

"Shares" means: (i) at any time prior to the completion of the Capital Reduction, Class A Shares, and (ii) at any time after completion of the Capital Reduction, Ordinary Shares.

"Specified Share Day" shall have the meaning given to it in Clause 14.13.

"Spin-Off" shall have the meaning given to it in Clause 14.13.

"Spin-Off Securities" shall have the meaning given to it in Clause 14.13.

"Stamdata" means the web site www.stamdata.no, maintained by the Bond Trustee.

"Subsidiary" means a company over which another company has Decisive Influence.

"Trading Day" has the meaning given to it in Clause 14.13.

"USD" means US dollars, the lawful currency of the United States of America.

"US Securities Act" means the US Securities Act of 1933, as amended.

"Valuation Date" shall have the meaning given to it in Clause 10.2.2.

"Volume Weighted Average Price" shall have the meaning given to it in Clause 14.13.

"Voting Bonds" means the Outstanding Bonds less the Issuer's Bonds.

1.2 Construction

In this Bond Agreement, unless the context otherwise requires:

(a) headings are for ease of reference only;

(b) words denoting the singular number shall include the plural and vice versa;

(c) references to Clauses are references to the Clauses of this Bond Agreement;

(d) references to a time is a reference to Oslo time unless otherwise stated herein;

(e) references to a provision of law is a reference to that provision as it may be amended or re-enacted, and to any regulations made by the appropriate authority pursuant to such law, including any determinations, rulings, judgments and other binding decisions relating to such provision or regulation;

(f) an Event of Default is "continuing" if it has not been remedied or waived; and

(g) references to a "person" shall include any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality)

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2 The Bonds

2.1 Binding nature of this Bond Agreement

2.1.1 By virtue of being registered as a Bondholder (directly or indirectly) with the Securities Depository, the Bondholders are bound by the terms of this Bond Agreement and any other Finance Document, without any further action required to be taken or formalities to be complied with, see also Clause 22.1.

2.1.2 This Bond Agreement is available to anyone and may be obtained from the Bond Trustee or the Issuer. The Issuer shall ensure that this Bond Agreement is available to the general public throughout the entire term of the Bonds. This Bond Agreement may be published on Stamdata or such other venues as decided by the Bond Trustee.

2.2 The Bonds

2.2.1 The Issuer has resolved to issue a series of Bonds in the maximum amount of NOK 82,790,939 (Norwegian kroner eightytwomillonsevenhundredninetythousandninehundredthirtynine).

2.2.2 The Face Value is NOK 1. The Bonds shall rank pari passu between themselves.

2.2.3 The Bond Issue will be described as "Prosafe SE Subordinated Convertible Bond Issue 2016/2021".

2.2.4 The ISIN of the Bond Issue will be NO 001 077102.5.

2.2.5 The tenor of the Bonds is from and including the Issue Date to the Maturity Date.

2.3 Purpose and utilization

The Bonds will be used as consideration for redemption of existing bonds of the Issuer pursuant to the Refinancing.

3 Listing

3.1 The Issuer shall within six (6) months from the Issue Date apply for listing of the Bonds on the Exchange.

3.2 If the Bonds are listed, the Issuer shall ensure that the Bonds remain listed until the earlier of (i) the Bonds having been discharged in full and (ii) the Shares are delisted.

4 Registration in the Securities Depository

4.1 The Bond Issue and the Bonds shall be registered in the Securities Depository according to the Norwegian Securities Depository Act (Act 2002/64) and the terms and conditions of the Securities Depository.

4.2 The Issuer shall ensure that correct registration in the Securities Depository is made and shall notify the Securities Depository of any changes in the terms and conditions of this Bond Agreement. The Bond Trustee shall receive a copy of the notification. The registration may be executed by the Paying Agent.

4.3 The Bonds have not been registered under the US Securities Act, and the Issuer is under no obligation to arrange for registration of the Bonds under the US Securities Act.

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5 Purchase and transfer of Bonds

5.1 Bondholders may be subject to purchase or transfer restrictions with regard to the Bonds, as applicable from time to time under local laws to which a Bondholder may be subject (due e.g. to its nationality, its residency, its registered address, its place(s) for doing business). Each Bondholder must ensure compliance with applicable local laws and regulations at its own cost and expense.

5.2 Notwithstanding the above, a Bondholder which has purchased the Bonds in breach of applicable mandatory restrictions may nevertheless utilize its rights (including, but not limited to, voting rights) under this Bond Agreement.

6 Conditions Precedent

The issuance of the Bonds is subject to the conditions precedent set out in the Release Agreement.

7 Representations and Warranties

7.1 The Issuer represents and warrants to the Bond Trustee that:

(a) Status

It is a European public limited liability company, duly incorporated and validly existing and registered under the laws of Cyprus, and has the power to own its assets and carry on its business as it is being conducted.

(b) Power and authority

It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, this Bond Agreement and any other Finance Document to which it is a party and the transactions contemplated by those Finance Documents.

(c) Valid, binding and enforceable obligations

This Bond Agreement and each other Finance Document to which it is a party constitutes (or will constitute, when executed by the respective parties thereto) its legal, valid and binding obligations, enforceable in accordance with their respective terms, and (save as provided for therein) no further registration, filing, payment of tax or fees or other formalities are necessary or desirable to render the said documents enforceable against it.

(d) Non-conflict with other obligations

The entry into and performance by it of this Bond Agreement and any other Finance Document to which it is a party and the transactions contemplated thereby do not and will not conflict with (i) any law or regulation or judicial or official order; (ii) its constitutional documents; or (iii) any agreement or instrument which is binding upon it or any of its assets.

(e) No Event of Default

(i) No Event of Default exists or is likely to result from the issue of Bonds under this Bond Agreement or the entry into, the performance of, or any transaction contemplated by, any Finance Document.

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(ii) No other event or circumstance is outstanding which constitutes (or with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (howsoever described) under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries') assets are subject which has or is likely to have a Material Adverse Effect.

(f) Authorizations and consents

All authorisations, consents, approvals, resolutions, licenses, exemptions, filings, notarizations or registrations required:

(i) to enable it to enter into, exercise its rights and comply with its obligations under this Bond Agreement or any other Finance Document to which it is a party; and

(ii) to carry on its business as presently conducted and as contemplated by this Bond Agreement,

have been obtained or effected and are in full force and effect.

(g) Share Conversion

It will, during the Exercise Period, have the authority to issue and allot, free from pre-emption rights, sufficient Shares to enable the Conversion Right to be satisfied in full at the Conversion Price.

(h) Litigation

Except as publicly disclosed by the Issuer in accordance with the rules of the Exchange, no litigation, arbitration or administrative proceedings or investigations of or before any court, arbitral body or agency which, if adversely determined, is likely to have a Material Adverse Effect have been started or threatened against it or any of its Subsidiaries.

(i) Financial Statements

Its most recent Financial Statements and Interim Accounts fairly and accurately represent the assets and liabilities and financial condition as at their respective dates, and have been prepared in accordance with IFRS, consistently applied.

(j) No Material Adverse Effect

Since the date of the most recently published Financial Statements, there has been no change in its business, assets or financial condition that is likely to have a Material Adverse Effect.

(k) No misleading information

Any factual information provided by it to the subscribers or the Bond Trustee for the purposes of this Bond Issue was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.

(l) No withholdings

The Issuer is not required to make any deduction or withholding from any payment which it may become obliged to make to the Bond Trustee or the Bondholders under this Bond Agreement.

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(m) Ranking

Its payment obligations under this Bond Agreement or any other Finance Document to which it is a party rank at least as set out in Clause 8.

(n) Insolvency

No corporate steps have been taken or legal proceedings have been started or, to the best of the Issuer's knowledge and belief, threatened against the Issuer or the Group, for the winding up, liquidation, insolvency, cessation of payments, reorganization or similar procedures.

7.2 The representations and warranties set out in Clause 7.1 are made on the execution date of this Bond Agreement, and shall be deemed to be repeated on the Issue Date.

8 Status of the Bonds and security

8.1 The Bonds (including any interest accrued thereon) shall constitute subordinated unsecured obligations of the Issuer.

8.2 The Bonds and accrued interest shall be subordinated to the senior debt of the Issuer, however the Bonds and accrued interest shall rank pari passu with similarly subordinated debt of the Issuer (save for such claims which are preferred by bankruptcy, insolvency, liquidation or other similar laws of general application), shall rank ahead of all amounts payable in respect of the share capital of the Issuer or other capital of the Issuer subordinated in rank to the Bonds.

8.3 As set out in Clause 17, the Bond Trustee and the Bondholders may only require repayment and redemption of the Bonds through conversion into Shares pursuant to the terms hereof.

9 Interest

The Issuer shall not pay any interest on the Bonds.

10 Maturity of the Bonds and Redemption

10.1 Maturity

At the Maturity Date, the Bonds shall at the option of the Issuer either (i) be repaid by the Issuer at par (100%) using only proceeds from an equity issue for such purpose or (ii) be converted to Shares at the prevailing Conversion Price as set out in Clause 10.2, in each case if not previously converted into Shares.

10.2 Share settlement option (forced conversion)

10.2.1 Notwithstanding any other provisions of this Clause 10, the Issuer shall have the right at the option of the Issuer to force early conversion of all (but not only some) Bonds to Shares at the following events (the “Share Settlement Option”):

(a) at the Maturity Date;

(b) upon a Formal Insolvency Event; or

(c) upon a Refinancing Event;

each such event a "Share Settlement Event".

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10.2.2 To exercise its Share Settlement Option, the Issuer shall give a notice to such effect (the "Share Settlement Option Notice") to the Bond Trustee and to the Bondholders (in the case of the Bondholders, in writing via the Securities Depository). The Share Settlement Option Notice shall be given not more than sixty (60) nor less than ten (10) calendar days prior to the day on which the conversion shall be carried out.

10.2.3 Where the Issuer shall have exercised the Share Settlement Option, the Issuer shall effect redemption in respect of the Bonds by issuing or transferring and delivering to the relevant Bondholder such number of Shares as is determined by dividing the aggregate principal amount of such Bondholder's Bonds by the Conversion Price in effect on the Valuation Date.

"Valuation Date" shall for this purpose mean (i) in respect of the Maturity Date the date five Trading Days prior to the Maturity Date, (ii) in respect of a Formal Insolvency Event, the day the Formal Insolvency Event occurred, and (iii) in respect of a Refinancing Event, the date falling five Trading Days prior to the notification of the exercise of the Share Settlement Option.

Fractions of Shares will not be issued or transferred or delivered pursuant to this Clause 10.2 (and, for the avoidance of doubt, no cash payment will be made in lieu thereof).

Shares to be delivered in the manner contemplated in this Clause 10.2 (other than pursuant to Clause 10.2.4 below) upon exercise of the Share Settlement Option are referred to as "Redemption Settlement Shares".

If the Issuer elects to exercise the Share Settlement Option with respect to the Bonds, the following provisions shall apply:

(i) Shares to be issued or transferred and delivered as contemplated by this Clause 10.2 shall be deemed to be issued or transferred and delivered as of the relevant Share Settlement Event, in the case of any Additional Redemption Settlement Shares (as defined below), as of the relevant Share Settlement Reference Date (as defined below). The Issuer shall, no later than ten (10) Business Days after the Valuation Date, register the Redemption Settlement Shares and any Additional Redemption Settlement Shares in the Securities Depository and immediately thereafter procure that the relevant Redemption Settlement Shares or Additional Redemption Settlement Shares are listed and tradeable on the Exchange.

(ii) A Bondholder must pay any taxes and capital, stamp, issue and registration and transfer taxes or duties arising on the relevant Redemption Settlement Shares or Additional Redemption Settlement Shares (other than any taxes and capital, stamp, issue and registration duties payable in Cyprus or Norway arising on conversion and on the issue and delivery of Shares, which shall be paid by the Issuer) and such Bondholder must pay all, if any, taxes arising by reference to any disposal or deemed disposal of a Bond or interest thereon in connection with such redemption.

(iii) The Redemption Settlement Shares will be fully paid and will in all respects rank pari passu with the fully paid Shares in issue on the Maturity Date or, in the case of Additional Redemption Settlement Shares (which will be fully paid), on the relevant Share Settlement Reference Date, except in any such case for any right excluded by mandatory provisions of applicable law and except that such Shares or, as the case may be, Additional Redemption Settlement Shares will not rank for any rights, distributions or payments the record date (or other due date for the establishment of entitlement) for which falls prior to the Share Settlement Event or, as the case may be, the relevant Share Settlement Reference Date.

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10.2.4 If the Valuation Date in relation to the conversion of any Bond shall be after the record date in respect of any consolidation or sub-division as is mentioned in Clause 14.1, or after the record date or other due date for the establishment of entitlement for any such issue, distribution, grant or offer (as the case may be) as is mentioned in Clauses 14.2 or 14.3but before the relevant adjustment becomes effective under Clause 14 (such adjustment, a "Share Settlement Retroactive Adjustment"), then the Issuer shall (conditional upon the relevant adjustment becoming effective) procure that there shall be issued or transferred and delivered to the relevant Bondholder, such additional number of Shares (if any) (the "Additional Redemption Settlement Shares") as, together with the Shares issued or to be transferred and delivered on redemption of the relevant Bond, is equal to the number of Shares which would have been required to be issued or delivered on redemption of such Bond if the relevant adjustment (more particularly referred to in the said provisions of Clause 14) to the Conversion Price had been made and become effective immediately prior to the relevant Valuation Date. Additional Redemption Settlement Shares will be delivered to Bondholders not later than ten (10) Business Days following the date the relevant Share Settlement Retroactive Adjustment becomes effective (the "Share Settlement Reference Date").

11 Payments

11.1 Covenant to pay or redeem

11.1.1 The Issuer will on any Payment Date (or any other due date pursuant to any Finance Document) unconditionally pay or redeem to or to the order of the Bond Trustee all amounts due under this Bond Agreement or any other Finance Document.

11.1.2 The covenant contained in Clause 11.1.1 shall be for the benefit of the Bond Trustee and the Bondholders.

11.2 Payment mechanics

11.2.1 If no specific order is made by the Bond Trustee under Clause 11.1.1, and subject to any settlement in Shares, the Issuer shall pay all amounts due to the Bondholders under this Bond Agreement or any other Finance Document by crediting the bank account nominated by each Bondholder in connection with its securities account in the Securities Depository.

11.2.2 Payment shall be deemed to have been made once the amount has been credited to the bank which holds the bank account nominated by the Bondholder in question, but if the paying bank and the receiving bank are the same, payment shall be deemed to have been made once the amount has been credited to the bank account nominated by the Bondholder in question, see however Clause 11.3.

11.2.3 In case of irregular payments, the Bond Trustee may instruct the Issuer or Bondholders of other payment mechanisms than described in Clause 11.2.1 or 11.2.2 above. The Bond Trustee may also obtain payment information regarding Bondholders' accounts from the Securities Depository or Account Managers.

11.2.4 Subject to Clause 11.3, payment by the Issuer in accordance with this Clause 11.2 shall constitute good discharge of its obligations under Clause 11.1.1.

11.3 Currency

11.3.1 Except as otherwise expressly provided, all amounts payable under this Bond Agreement and any other Finance Document shall be payable in the same currency as the Bonds are denominated in.

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11.3.2 Amounts payable in respect of costs, expenses, taxes and other liabilities of a similar nature shall be payable in the currency in which they are incurred.

11.4 Set-off and counterclaims

Except as otherwise expressly provided herein with respect to conversion to Shares, the Issuer may not apply or perform any counterclaims or set-off against any payment obligations pursuant to this Bond Agreement or any other Finance Document.

11.5 Partial payments

If the Bond Trustee or the Paying Agent receives a payment that is insufficient to discharge all the amounts then due and payable under the Finance Documents, that payment shall be applied in the following order:

(a) first, in or towards payment of any unpaid fees, costs and expenses of the Bond Trustee under the Finance Documents;

(b) secondly, in or towards payment of any accrued interest due but unpaid under the Bond Agreement, pro rata and without any preference or priority of any kind; and

(c) thirdly, in or towards payment of any principal due but unpaid under the Bond Agreement, pro rata and without any preference or priority of any kind.

12 Issuer's acquisition of Bonds

The Issuer has the right to acquire Bonds. The Issuer's holding of Bonds shall be immediately discharged.

13 Conversion terms

13.1 Each Bondholder may exercise one or more of his Conversion Right(s) at the Conversion Price at any time during the Exercise Period provided that notification thereof is given pursuant to Clause 13.4.

13.2 The Conversion Right cannot be separated from the Bond.

13.3 The number of Shares to be issued on exercise of a Conversion Right shall be determined by dividing the Face Value of the relevant Bond or Bonds by the Conversion Price in effect on the relevant Conversion Date. The Conversion Price shall be subject to adjustment pursuant to Clauses 14 and 15.

13.4 In order to exercise a Conversion Right, the Bondholder shall deliver to the Paying Agent (via its Account Manager) a duly completed, irrevocable and signed exercise notice. Request for conversion takes place by the Bondholder notifying his Account Manager of the number of Bonds which shall be converted. The Account Manager will then promptly forward the request to the Issuer (via the Paying Agent).

13.5 Conversion will be effected by a set-off of the total Face Value of the Bonds to be converted against the issuing of the whole number of Shares resulting from dividing the total Face Value of the Bonds to be converted by the Conversion Price. Any excess amount beyond the whole number of Shares converted by the Bonds shall fall to the Issuer and accordingly fractions of Shares will not be issued or transferred upon exercise of a Conversion Right and no cash payment will be made in lieu thereof. Where Conversion Rights are exercised by a Bondholder in respect of more than one Bond, the number of Shares to be issued will be

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determined on the basis of the aggregate Face Value of such Bonds.

The Issuer shall pay all (if any) taxes and capital, stamp, issue and registration duties payable in Cyprus and Norway arising on conversion and on the issue and delivery of Shares upon conversion.

13.6 The Issuer shall (if relevant via the Paying Agent) on or with effect from the Conversion Date (i) carry the notified conversion into effect by issuing the relevant number of new Shares, (ii) ensure the due registration of the new Shares in the Securities Depository (at the account of the converting Bondholder) and (subject to the terms herein) listing (if relevant) of the new Shares on the Exchange (and shall deliver any such documents and do any acts necessary in relation thereto), and (iii) ensure that the Outstanding Bonds shall be written down.

13.7 Shares issued upon conversion of the Bonds will be fully paid and will in all respects rank pari passu with (and be registered under the same ISIN as) the other Shares (as the case may be) in issue on the relevant Conversion Date or, in the case of Additional Shares, on the relevant Reference Date, except in any such case for any right excluded by mandatory provisions of applicable law and except that such Shares or, as the case may be, Additional Shares will not rank for any rights, distributions or payments the record date (or other due date for the establishment of entitlement) for which falls prior to the relevant Conversion Date or, as the case may be, the relevant Reference Date.

Where Shares are issued on conversion of the Bonds or pursuant to the Share Settlement Option, the share capital contribution for the Shares to be issued shall be settled by set-off of the principal amount of the Bonds to be converted or, as the case may be, the subject of the Share Settlement Option, such principal amount to be translated into NOK at the Prevailing Rate on the third Business Day prior to the relevant Conversion Date or Valuation Date, as the case may be, but this paragraph shall not affect the number of Shares to be delivered on conversion of the Bonds or pursuant to the Share Settlement Option, which shall be determined as provided in this Bond Agreement.

13.8 Without prejudice to Clause 14.12, if for any reason the Conversion Price falls below the

nominal value of the Shares, the Issuer shall always be obliged to either (i) ensure that the nominal value is reduced to a value below the Conversion Price or (ii) settle any exercise of a Conversion Right by cash settlement, in respect of a Bond, of an amount (the "Cash Settlement Amount") determined in accordance with the following formula:

where:

CSA is the Cash Settlement Amount;

S is the number of Shares (including, for this purpose, any fraction of a Share but

rounded, if necessary, to five decimal places, with 0.000005 being rounded up) to which the relevant Bondholder would have been entitled upon exercise of the Conversion Right in the absence of a cash settlement being applicable to such exercise;

Pn is the Volume Weighted Average Price of the Shares on the nth Trading Day of the

Cash Settlement Calculation Period; and

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N is 15, being the number of Trading Days in the Cash Settlement Calculation Period,

provided that if the record date or other due date for any Dividend or other entitlement as mentioned in Clause 14.2 or 14.3 with respect to the Shares is after the Conversion Date and the Conversion Date falls before the relevant adjustment becomes effective under Clause 14 and the price determined as provided above is based on a price ex-Dividend or ex-any other entitlement, then such price shall be increased by an amount equal to the Fair Market Value of any such Dividend or other entitlement per Share as at the date of the first public announcement of such Dividend or entitlement. In the event of any consolidation or sub-division of Shares following the Conversion Date, the price determined as provided above, shall be calculated as if that consolidation or sub-division had taken place. The Issuer will pay the Cash Settlement Amount by not later than five (5) Business Days following the last day of the Cash Settlement Calculation Period by transfer to a NOK account. Any amounts shall be translated into NOK at the Prevailing Rate on the third Business Day prior to the relevant payment date. "Cash Settlement Calculation Period" means the period of fifteen (15) consecutive Trading Days commencing on the Conversion Date.

14 Adjustments of the conversion price

Upon the occurrence of any of the events described below, the Conversion Price shall be adjusted as follows:

14.1 If and whenever there shall be a consolidation or subdivision of the Shares, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such consolidation or subdivision by the following fraction:

A B

where:

A is the aggregate number of Shares in issue immediately before such consolidation or subdivision, as the case may be; and

B is the aggregate number of Shares in issue immediately after, and as a result of, such consolidation or subdivision, as the case may be.

Such adjustment shall become effective on the date the consolidation or subdivision, as the case may be, takes effect.

14.2 If and whenever the Issuer shall issue any Shares credited as fully paid to the Shareholders by way of capitalisation of profits or reserves (including any share premium account or capital redemption reserve) other than (i) where any such Shares are issued instead of the whole or part of a Dividend in cash which the Shareholders would or could otherwise have received or (ii) where the Shareholders may elect to receive a Dividend in cash in lieu of such Shares, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such issue by the following fraction:

A B

where:

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A is the aggregate nominal amount of the Shares in issue immediately

before such issue; and

B is the aggregate nominal amount of the Shares in issue immediately after such issue.

Such adjustment shall become effective on the date of issue of such Shares.

14.3 If and whenever the Issuer shall pay or make any Dividend to Shareholders, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the relevant Dividend by the following fraction:

A – B A

where:

A is the Current Market Price of one Share on the Trading Day immediately preceding the date of the first public announcement of the relevant Dividend or, in the case of a purchase of Shares or any receipts or certificates representing Shares by or on behalf of the Issuer or any Subsidiary of the Issuer, on which such Shares are purchased or, in the case of a Spin-Off, is the mean of the Volume Weighted Average Prices of a Share for the five (5) consecutive Trading Days ending on the Trading Day immediately preceding the first date on which the Shares are traded ex- the relevant Spin-Off; and

B is the portion of the Fair Market Value, with such portion being determined by dividing the Fair Market Value of the aggregate Dividend by the number of Shares entitled to receive the relevant Dividend (or, in the case of a purchase of Shares or any receipts or certificates representing shares by or on behalf of the Issuer or any Subsidiary of the Issuer, by the number of Shares in issue immediately prior to such purchase), of the Dividend attributable to one Share.

Such adjustment shall become effective on the first date on which the Shares are traded ex- the relevant Dividend on the Relevant Stock Exchange or, in the case of a purchase of Shares or any receipts or certificates representing Shares, on the date such purchase is made or, in the case of a Spin-Off, the first date on which the Shares are traded ex- the relevant Spin-Off.

For the purposes of the above, the Fair Market Value of a Cash Dividend shall (subject as provided in paragraph (a) of the definition of "Dividend" and in the definition of "Fair Market Value") be determined as at the first date on which the Shares are traded ex- the relevant Dividend on the Relevant Stock Exchange, and in the case of a Non-Cash Dividend, the Fair Market Value of the relevant Dividend shall be the Fair Market Value of the relevant Spin-Off Securities or, as the case may be, the relevant property or assets.

14.4 Notwithstanding the foregoing provisions, where the events or circumstances giving rise to any adjustment pursuant to this Clause 14 have already resulted or will result in an adjustment to the Conversion Price or where the events or circumstances giving rise to any adjustment arise by virtue of any other events or circumstances which have already given or will give rise to an adjustment to the Conversion Price or where more than one event which gives rise to an adjustment to the Conversion Price occurs within such a short period of time that, in the opinion of the Bond Trustee, a modification to the operation of the adjustment

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provisions is required to give the intended result, such modification shall be made to the operation of the adjustment provisions as may be advised by an Independent Financial Adviser to be in its opinion appropriate to give the intended result.

14.5 If the Conversion Date in relation to the conversion of any Bond shall be after any consolidation or sub-division as is mentioned in Clause 14.1, or after the record date or other due date for the establishment of entitlement for any such issue, distribution, grant or offer (as the case may be) as is mentioned in Clause 14.2 or 14.3, in any case in circumstances where the relevant Conversion Date falls before the relevant adjustment becomes effective under Clause 14 (such adjustment, a "Retroactive Adjustment"), then the Issuer shall (conditional upon the relevant adjustment becoming effective) procure that there shall be issued or delivered to the converting Bondholder, such additional number of Shares (if any) (the "Additional Shares") as, together with the Shares issued or to be issued or delivered on conversion of the relevant Bond (together with any fraction of a Share not so issued), is equal to the number of Shares which would have been required to be issued or delivered on conversion of such Bond if the relevant adjustment (more particularly referred to in the said provisions of Clause 14) to the Conversion Price had in fact been made and become effective immediately prior to the relevant Conversion Date. Additional Shares will be delivered to Bondholders not later than 10 Business Days following the date the relevant Retroactive Adjustment becomes effective (the "Reference Date").

14.6 If there is a Retroactive Adjustment following the exercise of Conversion Rights by a Bondholder where that Bondholder has received or is to receive a Cash Settlement Amount , the Issuer shall pay to the relevant Bondholder an additional amount (the "Additional Cash Settlement Amount") equal to that by which the Current Market Price on the Reference Date of such number of Shares equal to the number of Shares by reference to which the Cash Settlement Amount shall have been determined and would have been increased if the relevant adjustment to the Conversion Price had been made and become effective immediately prior to the relevant Conversion Date.

14.7 The Issuer will pay the Additional Cash Settlement Amount not later than five (5) Business Days following the relevant Reference Date by transfer to a NOK account in accordance with instructions contained in the relevant notice delivered pursuant to Clause 13.4.

14.8 No adjustment will be made to the Conversion Price where Shares or other Securities (including rights, warrants and options) are issued, offered, exercised, allotted, appropriated, modified or granted to, or for the benefit of, employees or former employees (including Directors holding or formerly holding executive office or the personal service company of any such person) or their spouses or relatives, in each case, of the Issuer or any of its Subsidiaries or any associated company or to trustees to be held for the benefit of any such person, in any such case pursuant to any employees' share or option scheme.

14.9 On any adjustment, the resultant Conversion Price, if not in an integral multiple of USD 0.0001, shall be rounded down to the nearest whole multiple of USD 0.0001. No adjustment shall be made to the Conversion Price where such adjustment (rounded down if applicable) would be less than one per cent. (1%) of the Conversion Price then in effect. Any adjustment not required to be made, and/or any amount by which the Conversion Price has been rounded down, shall be carried forward and taken into account in any subsequent adjustment, and such subsequent adjustment shall be made on the basis that the adjustment not required to be made had been made at the relevant time.

14.10 Notice of any adjustments to the Conversion Price shall be given by the Issuer to Bondholders and the Bond Trustee promptly after the determination thereof.

14.11 If changes are made in the share capital other than those mentioned above, which are

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unfavourable to the Bondholders compared to the Shareholders, the Bond Trustee and the Issuer shall agree on a new Conversion Price. This also applies to other transactions, which are unfavourable to the Bondholders.

14.12 The Conversion Price shall not in any event be reduced to below the nominal value of the Shares and the Issuer undertakes that it shall not take any action, and shall procure that no action is taken, that would otherwise result in an adjustment to the Conversion Price to below such nominal value.

14.13 Definitions

"Cash Dividend" means (i) any Dividend which is to be paid or made in cash (in whatever currency), but other than falling within paragraph (b) of the definition of "Spin-Off" and (ii) any Dividend determined to be a Cash Dividend pursuant to paragraph (a) of the definition of "Dividend", and for the avoidance of doubt, a Dividend falling within paragraph (c) or (d) of the definition of "Dividend" shall be treated as being a Non-Cash Dividend.

"Current Market Price" means, in respect of a Share at a particular date, the average of the Volume Weighted Average Price of a Share for the five (5) consecutive Trading Days ending on the Trading Day immediately preceding such date; provided that if at any time during the said five-dealing-day period the Volume Weighted Average Price shall have been based on a price ex-Dividend (or ex- any other entitlement) and during some other part of that period the Volume Weighted Average Price shall have been based on a price cum-Dividend (or cum- any other entitlement), then:

(a) if the Shares to be issued or transferred do not rank for the Dividend (or

entitlement) in question, the Volume Weighted Average Price on the dates on which the Shares shall have been based on a price cum-Dividend (or cum- any other entitlement) shall for the purpose of this definition be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value of any such Dividend or entitlement per Share as at the Adjustment Effective Date relating to such Dividend (or entitlement); or

(b) if the Shares to be issued or transferred do rank for the Dividend (or entitlement) in question, the Volume Weighted Average Price on the dates on which the Shares shall have been based on a price ex-Dividend (or ex- any other entitlement) shall for the purpose of this definition be deemed to be the amount thereof increased by an amount equal to the Fair Market Value of any such Dividend or entitlement per Share as at the Adjustment Effective Date relating to such Dividend (or entitlement),

and provided further that, if on each of the said five (5) Trading Days the Volume Weighted Average Price shall have been based on a price cum-Dividend (or cum-any other entitlement) in respect of a Dividend (or other entitlement) which has been declared or announced but the Shares to be issued do not rank for that Dividend (or other entitlement) the Volume Weighted Average Price on each of such dates shall for the purposes of this definition be deemed to be the amount thereof reduced by an amount equal to the Fair Market Value of any such Dividend or entitlement per Share as at the date of the first public announcement of such Dividend or entitlement, and provided further that, if the Volume Weighted Average Price of a Share is not available on one or more of the said five (5) Trading Days, then the average of such Volume Weighted Average Prices which are available in that five-dealing-day period shall be used (subject to a minimum of two such prices) and if only one, or no such Volume Weighted Average Price is available in the relevant period the Current Market Price shall be determined in good faith by

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an Independent Financial Adviser.

"Dividend" means any dividend or any form of distribution to Shareholders (including a Spin-Off) whether of cash, assets or other property, and whenever paid or made and however described (and for these purposes a distribution of assets includes without limitation an issue of Shares, or other Securities credited as fully or partly paid up by way of capitalisation of profits or reserves) provided that:

(a) where a Dividend in cash is announced which is to be, or may at the election of a Shareholder or Shareholders be, satisfied by the issue or delivery of Shares or other property or assets, or where a capitalisation of profits or reserves is announced which is to be, or may at the election of a Shareholder or Shareholders be, satisfied by the payment of the Dividend in cash, then for the purposes of this definition the Dividend in question shall be treated as a Cash Dividend of the greater of (i) such cash amount and (ii) the Fair Market Value (on the date of the first public announcement of such Dividend or capitalisation (as the case may be) or if later, the date on which the number of Shares (or amount of property or assets, as the case may be) which may be issued or delivered is determined), of such Shares or other property or assets;

(b) any issue of Shares falling within Clause 14.2 shall be disregarded;

(c) a purchase or redemption or buy back of share capital of the Issuer by the Issuer or any Subsidiary of the Issuer shall not constitute a Dividend unless, in the case of purchases, redemptions or buy backs of Shares by or on behalf of the Issuer or any of its Subsidiaries, the weighted average price per Share (before expenses) on any one day (a "Specified Share Day") in respect of such purchases, redemptions or buy backs (translated, if not in NOK, into NOK at the spot rate ruling at the close of business on such day as determined in good faith by an Independent Financial Adviser (or if no such rate is available on that date, the equivalent rate on the immediately preceding date on which such rate is available), exceeds by more than five per cent. (5%) the average of the closing prices of the Shares on the Relevant Stock Exchange (as published by or derived from the Relevant Stock Exchange) on the five (5) Trading Days immediately preceding the Specified Share Day or, where an announcement (excluding, for the avoidance of doubt for these purposes, any general authority for such purchases approved by a general meeting of Shareholders or any notice convening such a meeting of Shareholders) has been made of the intention to purchase Shares at some future date at a specified price, on the five (5) Trading Days immediately preceding the date of such announcement in which case such purchase shall be deemed to constitute a Dividend in NOK to the extent that the aggregate price paid (before expenses) in respect of such Shares purchased by the Issuer or, as the case may be, any of its Subsidiaries (translated where appropriate into NOK as provided above) exceeds the product of (i) one hundred five per cent. (105%) of the average closing price of the Shares determined as aforesaid and (ii) the number of Shares so purchased; and

(d) if the Issuer or any of its Subsidiaries shall purchase any receipts or certificates representing Shares the provisions of paragraph (c) shall be applied in respect thereof in such manner and with such modifications (if any) as shall be determined in good faith by an Independent Financial Adviser.

"Fair Market Value" means, with respect to any property on any date, the fair market value of that property as determined in good faith by an Independent Financial Adviser provided, that:

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(i) the Fair Market Value of a Cash Dividend paid or to be paid shall be the amount of

such Cash Dividend; (ii) the Fair Market Value of any other cash amount shall be the amount of such cash; (iii) where Securities, Spin-Off Securities, options, warrants or other rights are publicly

traded in a market of adequate liquidity (as determined by an Independent Financial Adviser), the fair market value (a) of such Securities or Spin-Off Securities shall equal the arithmetic mean of the daily Volume Weighted Average Prices of such Securities or Spin-Off Securities and (b) of such options, warrants or other rights shall equal the arithmetic mean of the daily closing prices of such options, warrants or other rights, in the case of both (a) and (b) during the period of five Trading Days on the relevant market commencing on such date (or, if later, the first such trading day such Securities or Spin-Off Securities, options, warrants or other rights are publicly traded); and

(iv) in the case of (i) converted into USD (if declared or paid in a currency other than

USD) at the rate of exchange used to determine the amount payable to Shareholders who were paid or are to be paid or are entitled to be paid the Cash Dividend in NOK; and in any other case, converted into USD (if expressed in a currency other than USD) at such rate of exchange as may be determined in good faith by an Independent Financial Adviser to be the spot rate ruling at the close of business on that date (or if no such rate is available on that date the equivalent rate on the immediately preceding date on which such a rate is available).

"Independent Financial Adviser" means an independent investment bank of international repute appointed by the Issuer and approved in writing by the Bond Trustee or, if the Issuer fails to make such appointment and such failure continues for a reasonable period (as determined by the Bond Trustee) and the Bond Trustee is indemnified and/or secured as to costs to its satisfaction against the costs, fees and expenses of such adviser, appointed by the Bond Trustee following notification to the Issuer. "Non-Cash Dividend" means any Dividend which is not a Cash Dividend, and shall include a Spin-Off.

"Prevailing Rate" means, in respect of any currencies on any calendar day, the spot rate of exchange between the relevant currencies prevailing as at or about 12 noon (Oslo time) on that date as appearing on or derived from the Relevant Page or, if such a rate cannot be determined at such time, the rate prevailing as at or about 12 noon (Oslo time) on the immediately preceding day on which such rate can be so determined or if such rate cannot be so determined by reference to the Relevant Page, the rate determined in such other manner as an Independent Adviser shall consider in good faith appropriate. "Relevant Page" means the relevant page on Bloomberg or such other information service provider that displays the relevant information. "Relevant Stock Exchange" means the Exchange or; if at the relevant time, neither the Ordinary Shares nor the Class A Shares are at that time listed and admitted to trading on the Exchange, the principal stock exchange or securities market on which the Ordinary Shares or the Class A Shares are then listed or quoted or dealt in. "Securities" means any securities including, without limitation, Shares, or options, warrants or other rights to subscribe for or purchase or acquire Shares.

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"Spin-Off" means: (a) a distribution of Spin-Off Securities by the Issuer to Shareholders as a class; or (b) any issue, transfer or delivery of any property or assets (including cash or shares or securities of or in or issued or allotted by any entity) by any entity (other than the Issuer) to Shareholders as a class, pursuant in each case to any arrangements with the Issuer or any of its Subsidiaries.

"Spin-Off Securities" means equity share capital of an entity other than the Issuer or options, warrants or other rights to subscribe for or purchase equity share capital of an entity other than the Issuer.

"Trading Day" means a day on which the Relevant Stock Exchange is open for business, (other than a day on which the Relevant Stock Exchange is scheduled to or does close prior to its regular weekday closing time). "Volume Weighted Average Price" means, in respect of a Share, Security or, as the case may be, a Spin-Off Security on any Trading Day, the volume-weighted average price of a Share, Security or; as the case may be, a Spin-Off Security published by or derived (in the case of a Share) from 'Bloomberg page <PRS NO EQUITY VWAP> or (in the case of a Security or Spin-Off Security) from the principal stock exchange or securities market on which such Securities or Spin-Off Securities are then listed or quoted or dealt in, if any or, in any such case, such other source as shall be determined to be appropriate by an Independent Financial Adviser on such Trading Day, provided that if on any such Trading Day where such price is not available or cannot otherwise be determined as provided above, the Volume Weighted Average Price of a Share, Security or a Spin-Off Security, as the case may be, in respect of such Trading Day shall be the Volume Weighted Average Price, determined as provided above, on the immediately preceding Trading Day on which the same can be so determined. References to any issue or offer or grant to Shareholders "as a class" or "by way of rights" shall be taken to be references to an issue or offer or grant to all or substantially all Shareholders other than Shareholders to whom, by reason of the laws of any territory or requirements of any recognised regulatory body or any other stock exchange or securities market in any territory or in connection with fractional entitlements, it is determined not to make such issue or offer or grant. In making any calculation or determination of Current Market Price or Volume Weighted Average Price, such adjustments (if any) shall be made as an Independent Financial Adviser considers appropriate to reflect any consolidation or sub-division of the Shares or any issue of Shares by way of capitalisation of profits or reserves, or any like or similar event.

15 Adjustment of the Conversion Price if the Shares are de-listed

If the Shares are no longer listed on the Exchange, the adjustment provisions in this Clause 15 shall apply.

15.1 In the event of a new issue of Shares in which shareholders have preferential rights to subscribe for the new shares, each Bondholder shall have the same subscription right as the shareholders, as if the Bondholder already had exercised his conversion right.

15.2 If and whenever the Issuer or any Subsidiary of the Issuer or (at the direction or request of or pursuant to any arrangements with the Issuer or any Subsidiary of the Issuer) any other company, person or entity shall issue wholly for cash or for no consideration any Securities (other than the Bonds), which by their terms of issue carry (directly or indirectly) rights of conversion into, or exchange or subscription for, Shares (or shall grant any such rights in respect of existing Securities so issued) or Securities which by their terms might be

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redesignated as Shares, and the existing shareholders of the Issuer have preferential rights to subscribe for such Securities, each Bondholder shall have the same subscription right as the shareholders, as if the Bondholder already had exercised his conversion right.

15.3 In the event of a capital write-down of the Issuer's share capital and subsequent repayment to shareholders, the Conversion Price shall be reduced with an amount equal to the amount repaid per Share.

Reduction of the share capital without repayment to the shareholders shall have no influence on the Conversion Price.

15.4 In the event of a bonus issue of new Shares (with the exception of shares issued in settlement of a merger offer), split or consolidation, the new Conversion Price shall be fixed as follows:

If the Shares are split into more than one class of shares, the conversion right shall be adjusted so that Bondholders' interest in the separate share classes remains unchanged, regardless of whether the Bondholder elects to convert prior to, or after the date on which the shares are quoted post split.

A bonus issue writing up the par value of the shares in the Issuer shall have no influence of the Conversion Price.

15.5 Should the Issuer make a dividend payment to shareholders of the Issuer, the Conversion Price shall be adjusted according to the principles of Clause 15.3.

15.6 If changes are made in the share capital other than those mentioned in Clauses 15.1 to 15.5 above, which are unfavourable to the Bondholders compared to the shareholders, the Loan Trustee and the Issuer shall agree on a new Conversion Price. This also applies to other transactions, which are unfavourable to the Bondholders compared to the shareholders. The principles expressed in Clauses 15.1 to 15.5 above shall always be the basis for any adjustments pursuant to this Clause.

15.7 If the Conversion Price falls below the nominal value of the Shares, Clause 13.8 shall apply.

15.8 If an adjustment of the Conversion Price requires a conversion to USD, the exchange rate shall be the Prevailing Rate on the date triggering such adjustment. For the avoidance of doubt, when calculating weighted averages over several days, each day should apply the Prevailing Rate for that day.

16 Merger and de-merger

16.1 In the case of any consolidation, amalgamation or merger of the Issuer with any other corporation (other than a consolidation, amalgamation or merger in which the Issuer is the continuing corporation), or in the case of any sale or transfer of all, or substantially all of the assets of the Issuer, the Issuer will take such steps as shall be required by the Bond Trustee (including the execution of an agreement supplemental to or amending the Bond Agreement) to ensure that each Bond then outstanding will (during the period in which Conversion Rights may be exercised) be converted into the class and amount of shares and other

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securities and property receivable upon such consolidation, amalgamation, merger, sale or transfer by a holder of the number of Shares which would have become liable to be issued upon exercise of Conversion Rights immediately prior to such consolidation, amalgamation, merger, sale or transfer. Such supplemental agreement deed will provide for adjustments which will be as nearly equivalent as may be practicable to the adjustments provided for in Clause 14. The above will apply, mutatis mutandis to any subsequent consolidations, amalgamations, mergers, sales or transfers.

16.2 If the Issuer decides on a merger in which the Issuer is the acquiring company, and the shareholders of the acquired company receive settlement in the form of shares only, subject to confirmation from an Independent Financial Adviser that such is the case, no adjustment will be made to the Conversion Price. If the shareholders of the acquired company receive settlement in any other form, in full or partly, the Conversion Price shall be adjusted according to such provision of Clause 14, or in such other manner; as an Independent Financial Adviser shall determine to be most appropriate.

16.3 The provisions in this Clause 16 have no limitation on the creditor's right of objection (if any) to the merger or de-merger.

17 Covenants

17.1 General

17.1.1 The Issuer undertakes from the date of this Bond Agreement and until such time that no amounts are outstanding under this Bond Agreement or any other Finance Document, to the Bond Trustee, as further set out in this Clause 17.

17.2 Information Covenants

17.2.1 The Issuer shall:

(a) without being requested to do so, promptly inform the Bond Trustee in writing of any Event of Default, any event or circumstance which the Issuer understands or ought to understand may lead to an Event of Default and any other event which may have a Material Adverse Effect;

(b) without being requested to do so, inform the Bond Trustee in writing if the Issuer agrees to sell or dispose of all or a substantial part of its assets or operations, or change the nature of its business;

(c) without being requested to do so, prepare Financial Statements and make them available on its website in the English language (alternatively by arranging for publication at Stamdata) as soon as they become available, and not later than 120 days after the end of the financial year;

(d) without being requested to do so, prepare Interim Accounts and make them available on its website in the English language (alternatively by arranging for publication on Stamdata) as soon as they become available, and not later than 60 days after the end of the relevant quarter;

(e) at the request of the Bond Trustee, report the balance of the Issuer's Bonds;

(f) without being requested to do so, send the Bond Trustee copies of any statutory notifications of the Issuer, including but not limited to in connection with mergers, de-mergers and reduction of the Issuer's share capital or equity;

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(g) if the Bonds are listed on the Exchange, without being requested to do so, send a copy to the Bond Trustee of its notices to the Exchange;

(h) if the Issuer and/or the Bonds are rated, without being requested to do so, inform the Bond Trustee of its and/or the rating of the Bond Issue, and any changes to such rating;

(i) without being requested to do so, inform the Bond Trustee of changes in the registration of the Bonds in the Securities Depository; and

(j) within a reasonable time, provide such information about the Issuer's business, assets and financial condition as the Bond Trustee may reasonably request.

17.2.2 The Issuer shall in connection with the publication of its financial reports under Clause 17.2.1(c) and (d), confirm to the Bond Trustee in writing the Issuer's compliance with the covenants in this Clause 17, unless the Bond Trustee explicitly waives such requirement. Such confirmation shall be undertaken in a certificate, substantially in the form set out in Attachment 1 hereto, signed by the Chief Executive Officer or Chief Financial Officer of the Issuer (a "Compliance Certificate"). In the event of non-compliance, the Compliance Certificate shall describe the non-compliance, the reasons therefore as well as the steps which the Issuer has taken and will take in order to rectify the non-compliance.

17.3 General Covenants

(a) Ranking

The Issuer shall ensure that its obligations under this Bond Agreement and any other Finance Document shall at all times rank at least as set out in Clause 8.

(b) Mergers

The Issuer shall not, and shall ensure that no other Group Company shall, carry out any merger or other business combination or corporate reorganization involving a consolidation of the assets and obligations of the Issuer or any other Group Company with any other companies or entities if such transaction would have a Material Adverse Effect. The Issuer shall notify the Bond Trustee of any such transaction, providing the relevant details thereof, as well as, if applicable, its reasons for believing that the proposed transaction would not have a Material Adverse Effect.

(c) De-mergers

The Issuer shall not, and shall ensure that no other Group Company shall, carry out any de-merger or other corporate reorganization involving a split of the Issuer or any other Group Company into two or more separate companies or entities, if such transaction would have a Material Adverse Effect. The Issuer shall notify the Bond Trustee of any such transaction, providing the relevant details thereof, as well as, if applicable, its reasons for believing that the proposed transaction would not have a Material Adverse Effect.

(d) Disposal of assets/business

The Issuer shall not, and shall ensure that no other Group Company shall, sell or otherwise dispose of all or a substantial part of the Group's assets or operations unless (a) the transaction is carried out at fair market value, on terms and conditions customary for such transactions; and (b) such transaction would not have a Material Adverse Effect.

(e) Arm's length transactions

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The Issuer shall not engage in, or permit any other Group Company to engage in, directly or indirectly, any transaction with any related third party (excluding, for the avoidance of doubt, other Group Companies) (without limitation, the purchase, sale or exchange of assets or the rendering of any service), except in the ordinary course of business and pursuant to the reasonable requirement of the Issuer's or such other Group Company's business and upon fair and reasonable arm's length terms.

(f) Corporate status

The Issuer shall not change its type of organization or jurisdiction of registration.

(g) Compliance with laws

The Issuer shall, and shall ensure that all other Group Companies shall, carry on its business in accordance with acknowledged, careful and sound practices in all material aspects and comply in all material respects with all laws and regulations it or they may be subject to from time to time.

(h) Equity participation rights

The Issuer shall ensure that the Bondholders shall have preferential allocation of Shares, Securities or other rights to subscribe for, convert into, purchase or otherwise acquire Shares of the Issuer in line with the holders of Shares, as if the Bondholders already had exercised their Conversion Right.

18 Fees and expenses

18.1 The Issuer shall cover all costs and expenses incurred by it or the Bond Trustee in connection with this Bond Agreement and the fulfilment of its obligations under this Bond Agreement or any other Finance Document, including in connection with the negotiation, preparation, execution and enforcement of this Bond Agreement and the other Finance Documents and any registration or notifications relating thereto (including any stamp duty), the listing of the Bonds on an Exchange (if applicable), and the registration and administration of the Bonds in the Securities Depository. The Bond Trustee may withhold funds from any escrow account (or similar arrangement) or from other funds received from the Issuer or any other person, irrespective of such funds being subject to Security under a Finance Documents, to set-off and cover any such costs and expenses.

18.2 The fees, costs and expenses payable to the Bond Trustee shall be paid by the Issuer and are set out in a separate agreement between the Issuer and the Bond Trustee.

18.3 Fees, costs and expenses payable to the Bond Trustee which, due to the Issuer's insolvency or similar circumstances, are not reimbursed in any other way may be covered by making an equivalent reduction in the proceeds to the Bondholders hereunder of any costs and expenses incurred by the Bond Trustee in connection with the restructuring or default of the Bond Issue and the enforcement of any Security.

18.4 Any public fees levied on the trade of Bonds in the secondary market shall be paid by the Bondholders, unless otherwise provided by law or regulation, and the Issuer is not responsible for reimbursing any such fees.

18.5 The Issuer is responsible for withholding any withholding tax imposed by applicable law on any payments to the Bondholders.

18.6 If the Issuer is required by law to withhold any withholding tax from any payment under any

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Finance Document:

(a) the amount of the payment due from the Issuer shall be increased to such amount which is necessary to ensure that the Bondholders receive a net amount which is (after making the required withholding) equal to the payment which would have been due if no withholding had been required; and

(b) the Issuer shall at the request of the Bond Trustee deliver to the Bond Trustee evidence that the required tax reduction or withholding has been made.

18.7 If any withholding tax is imposed due to subsequent changes in applicable law after the date

of this Bond Agreement, the Issuer shall have the right to call all but not some of the Bonds at par value plus accrued interest. Such call shall be notified by the Issuer in writing to the Bond Trustee and the Bondholders at least thirty (30) Business Days prior to the settlement date of the call.

19 Events of Default

19.1 The Bond Trustee may declare the Bonds to be in default upon occurrence of any of the following events:

(a) Non-payment

The Issuer fails to fulfil any payment obligation due under this Bond Agreement or any Finance Document when due, unless, in the opinion of the Bond Trustee, it is likely that such payment will be made in full within five (5) Business Days following the original due date.

(b) Breach of other obligations

The Issuer does not comply with any provision pursuant to this Bond Agreement or any other Finance Document, unless, in the opinion of the Bond Trustee, such failure is capable of being remedied and is remedied within ten (10) Business Days after notice thereof is given to the Issuer by the Bond Trustee.

(c) Cross default

If for the Issuer.

(i) any Financial Indebtedness is not paid when due nor within any originally applicable grace period;

(ii) any Financial Indebtedness is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described);

(iii) any commitment for any Financial Indebtedness is cancelled or suspended by a creditor as a result of an event of default (however described); or

(iv) any creditor becomes entitled to declare any Financial Indebtedness due and payable prior to its specified maturity as a result of an event of default (however described),

always provided that a threshold in the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (i) to (iv) above of a total of USD 10 million, or the equivalent thereof in other currencies, shall apply.

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(d) Misrepresentations

Any representation, warranty or statement (including statements in compliance certificates) made under this Bond Agreement or any other Finance Document or in connection therewith is or proves to have been incorrect, inaccurate or misleading in any material respect when made or deemed to have been made.

(e) Insolvency

(i) The Issuer is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.

(ii) The value of the assets of the Issuer is less than its liabilities (taking into account contingent and prospective liabilities).

(iii) A moratorium is declared in respect of any indebtedness of the Issuer.

(f) Insolvency proceedings and dissolution

If for the Issuer, any corporate action, legal proceedings or other procedure step is taken in relation to:

(i) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) other than solvent liquidation or reorganization;

(ii) a composition, compromise, assignment or arrangement with any creditor, having an adverse effect on the Issuer's ability to perform its payment obligations hereunder;

(iii) the appointment of a liquidator (other than in respect of a solvent liquidation), receiver, administrative receiver, administrator, compulsory manager or other similar officer of any of its assets; or

(iv) its dissolution,

or any analogous procedure or step is taken in any jurisdiction.

(g) Creditors' process

The Issuer has a substantial proportion of the assets impounded, confiscated, attached or subject to distraint, or is subject to enforcement of any Security over any of its assets.

(h) Impossibility or illegality

It is or becomes impossible or unlawful for the Issuer to fulfil or perform any of the terms of any Finance Document to which it is a party.

(i) Material Adverse Change

Any other event or circumstance occurs which, in the reasonable opinion of the Bond Trustee, after consultations with the Issuer, would have a Material Adverse Effect.

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19.2 In the event that one or more of the circumstances mentioned in Clause 19.1 occurs and is continuing, the Bond Trustee can, in order to protect the interests of the Bondholders, declare the Outstanding Bonds including accrued interest, costs and expenses to be in default and due for immediate redemption.

Notwithstanding any provision of this Bond Agreement, the Bond Trustee (on behalf of the Bondholders) may only require repayment and redemption of the Bonds through conversion into Shares on the terms set out herein.

In the event that one or more of the circumstances mentioned in Clause 19.1 occurs and is continuing, the Bond Trustee shall declare the Outstanding Bonds including accrued interest, costs and expenses to be in default and require immediate redemption through conversion into Shares if:

(a) the Bond Trustee receives a demand in writing that a default shall be declared from Bondholders representing at least 1/5 of the Voting Bonds, and the Bondholders' Meeting has not decided on other solutions, or

(b) the Bondholders' Meeting has with simple majority decided to declare the Outstanding Bonds in default and due for payment.

In either case the Bond Trustee shall take every measure necessary to effect the repayment and redemption through conversion into Shares.

19.3 In the event that the Bond Trustee pursuant to the terms of Clauses 19.2 declares the Outstanding Bonds to be in default and due for payment, the Bond Trustee shall immediately deliver to the Issuer a notice demanding payment of interest and principal due to the Bondholders under the Outstanding Bonds including accrued interest and interest on overdue amounts and expenses through conversion to Shares on the terms set out herein.

20 Bondholders' Meeting

20.1 Authority of the Bondholders' Meeting

20.1.1 The Bondholders' Meeting represents the supreme authority of the Bondholders community in all matters relating to the Bonds, and has the power to make all decisions altering the terms and conditions of the Bonds, including, but not limited to, any reduction of principal or interest and any conversion of the Bonds into other capital classes.

20.1.2 The Bondholders' Meeting cannot resolve that any overdue payment of any instalment shall be reduced unless there is a pro rata reduction of the principal that has not fallen due, but may resolve that accrued interest (whether overdue or not) shall be reduced without a corresponding reduction of principal.

20.1.3 If a resolution by or an approval of the Bondholders is required, such resolution shall be passed at a Bondholders' Meeting, see however Clause 21.1. Resolutions passed at Bondholders' Meetings shall be binding upon all Bondholders and prevail for all the Bonds.

20.2 Procedural rules for Bondholders' meetings

20.2.1 A Bondholders' Meeting shall be held at the written request of:

(a) the Issuer;

(b) Bondholders representing at least 1/10 of the Voting Bonds;

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(c) the Exchange, if the Bonds are listed; or

(d) the Bond Trustee.

20.2.2 The Bondholders' Meeting shall be summoned by the Bond Trustee. A request for a Bondholders' Meeting shall be made in writing to the Bond Trustee, and shall clearly state the matters to be discussed.

20.2.3 If the Bond Trustee has not summoned a Bondholders' Meeting within ten (10) Business Days after having received a valid request, then the requesting party may summons the Bondholders' Meeting itself.

20.2.4 The summons to a Bondholders' Meeting shall be dispatched no later than ten (10) Business Days prior to the date of the Bondholders' Meeting. The summons and a confirmation of each Bondholder's holdings of Bonds shall be sent to all Bondholders registered in the Securities Depository at the time of distribution. The Exchange shall also be informed if the Bonds are listed.

20.2.5 The summons shall specify the agenda of the Bondholders' Meeting. The Bond Trustee may in the summons also set out other matters on the agenda than those requested. If amendments to this Bond Agreement have been proposed, the main content of the proposal shall be stated in the summons.

20.2.6 The Bond Trustee may restrict the Issuer from making any changes in the number of Voting Bonds in the period from distribution of the summons until the Bondholders' Meeting, by serving notice to it to such effect.

20.2.7 Matters that have not been reported to the Bondholders in accordance with the procedural rules for summoning of a Bondholders' Meeting may only be adopted with the approval of all Voting Bonds.

20.2.8 The Bondholders' Meeting shall be held on premises designated by the Bond Trustee. The Bondholders' Meeting shall be opened and shall, unless otherwise decided by the Bondholders' Meeting, be chaired by the Bond Trustee. If the Bond Trustee is not present, the Bondholders' Meeting shall be opened by a Bondholder, and be chaired by a representative elected by the Bondholders' Meeting.

20.2.9 Minutes of the Bondholders' Meeting shall be kept. The minutes shall state the numbers of Bondholders and Bonds represented at the Bondholders' Meeting, the resolutions passed at the meeting, and the result of the voting. The minutes shall be signed by the chairman and at least one other person elected by the Bondholders' Meeting. The minutes shall be deposited with the Bond Trustee and shall be available to the Bondholders.

20.2.10 The Bondholders, the Bond Trustee and – provided the Bonds are listed – representatives of the Exchange, have the right to attend the Bondholders' Meeting. The chairman may grant access to the meeting to other parties, unless the Bondholders' Meeting decides otherwise. Bondholders may attend by a representative holding proxy. Bondholders have the right to be assisted by an advisor. In case of dispute the chairman shall decide who may attend the Bondholders' Meeting and vote for the Bonds.

20.2.11 Representatives of the Issuer have the right to attend the Bondholders' Meeting. The Bondholders' Meeting may resolve that the Issuer's representatives may not participate in particular matters. The Issuer has the right to be present under the voting.

20.3 Resolutions passed at Bondholders' Meetings

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20.3.1 At the Bondholders' Meeting each Bondholder may cast one vote for each Voting Bond owned at close of business on the day prior to the date of the Bondholders' Meeting in accordance with the records registered in the Securities Depository. The Bond Trustee may, at its sole discretion, accept other evidence of ownership. Whoever opens the Bondholders' Meeting shall adjudicate any question concerning which Bonds shall count as the Issuer's Bonds. The Issuer's Bonds shall not have any voting rights.

For this purpose, a Bondholder that has a Bond that is nominee registered shall be deemed as the Bondholder of such Bond (instead of the nominee) provided that the Bondholder presents relevant evidence stating that the relevant Bondholder is the Bondholder of the Bond and the amount of Bonds held by such Bondholder.

20.3.2 In all matters, the Issuer, the Bond Trustee and any Bondholder have the right to demand vote by ballot. In case of parity of votes, the chairman shall have the deciding vote, regardless of the chairman being a Bondholder or not.

20.3.3 In order to form a quorum, at least half (1/2) of the Voting Bonds must be represented at the meeting, see however Clause 20.4. Even if less than half (1/2) of the Voting Bonds are represented, the Bondholders' Meeting shall be held and voting completed.

20.3.4 Resolutions shall be passed by simple majority of the Voting Bonds represented at the Bondholders' Meeting, unless otherwise set out in Clause 20.3.5.

20.3.5 A majority of at least 2/3 of the Voting Bonds represented at the Bondholders' Meeting is required for any waiver or amendment of any terms of this Bond Agreement.

20.3.6 The Bondholders' Meeting may not adopt resolutions which may give certain Bondholders or others an unreasonable advantage at the expense of other Bondholders.

20.3.7 The Bond Trustee shall ensure that resolutions passed at the Bondholders' Meeting are properly implemented, however, the Bond Trustee may refuse to carry out resolutions being in conflict with this Bond Agreement (or any other Finance Document) or any applicable law.

20.3.8 The Issuer, the Bondholders and the Exchange shall be notified of resolutions passed at the Bondholders' Meeting.

20.4 Repeated Bondholders' meeting

20.4.1 If the Bondholders' Meeting does not form a quorum pursuant to Clause 20.3.3, a repeated Bondholders' Meeting may be summoned to vote on the same matters. The attendance and the voting result of the first Bondholders' Meeting shall be specified in the summons for the repeated Bondholders' Meeting.

20.4.2 A valid resolution may be passed at a repeated Bondholders' meeting even though less than half (1/2) of the Voting Bonds are represented.

21 The Bond Trustee

21.1 The role and authority of the Bond Trustee

21.1.1 The Bond Trustee shall monitor the compliance by the Issuer of its obligations under this Bond Agreement and applicable laws and regulations which are relevant to the terms of this Bond Agreement, including supervision of timely and correct payment of principal or interest, (however, this shall not restrict the Bond Trustee from discussing matters of

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confidentiality with the Issuer), arrange Bondholders' Meetings, and make the decisions and implement the measures resolved pursuant to this Bond Agreement. The Bond Trustee is not obligated to assess the Issuer's financial situation beyond what is directly set out in this Bond Agreement.

21.1.2 The Bond Trustee may take any step it in its sole discretion considers necessary or advisable to ensure the rights of the Bondholders in all matters pursuant to the terms of this Bond Agreement and is entitled to rely on advice from professional advisors. The Bond Trustee may in its sole discretion postpone taking action until such matter has been put forward to the Bondholders' Meeting. The Bond Trustee is not obliged to take any steps to ascertain whether any Event of Default has occurred and until it has actual knowledge or express notice to the contrary the Bond Trustee is entitled to assume that no Event of Default has occurred.

21.1.3 The Bond Trustee may make decisions binding for all Bondholders concerning this Bond Agreement, including amendments to this Bond Agreement and waivers or modifications of certain provisions, which in the opinion of the Bond Trustee, do not materially and adversely affect the rights or interests of the Bondholders pursuant to this Bond Agreement.

21.1.4 The Bond Trustee may reach decisions binding for all Bondholders in circumstances other than those mentioned in Clause 21.1.3 provided that prior notification has been made to the Bondholders. Such notice shall contain a proposal of the amendment and the Bond Trustee's evaluation. Further, such notification shall state that the Bond Trustee may not reach a decision binding for all Bondholders in the event that any Bondholder submits a written protest against the proposal within a deadline set by the Bond Trustee. Such deadline may not be less than five Business Days following the dispatch of such notification.

21.1.5 The Bond Trustee may reach other decisions than set out in Clauses 21.1.3 or 21.1.4 to amend or rectify decisions which due to spelling errors, calculation mistakes, misunderstandings or other obvious errors do not have the intended meaning.

21.1.6 The Bond Trustee may not adopt resolutions which may give certain Bondholders or others an unreasonable advantage at the expense of other Bondholders.

21.1.7 The Issuer, the Bondholders and the Exchange shall be notified of decisions made by the Bond Trustee pursuant to Clause 21.1 unless such notice obviously is unnecessary.

21.1.8 The Bondholders' Meeting can decide to replace the Bond Trustee without the Issuer's approval, as provided for in Clause 20.3.5.

21.1.9 The Bond Trustee may act as bond trustee and/or security agent for several bond issues relating to the Issuer notwithstanding potential conflicts of interest. The Bond Trustee may delegate exercise of its powers to other professional parties.

21.1.10 The Bond Trustee may instruct the Paying Agent to split the Bonds to a lower denomination in order to facilitate partial redemptions or restructuring of the Bonds or other situations.

21.2 Liability and indemnity

21.2.1 The Bond Trustee is liable only for direct losses incurred by Bondholders or the Issuer as a result of gross negligence or wilful misconduct by the Bond Trustee in performing its functions and duties as set out in this Bond Agreement. Such liability is limited to the maximum amount set out in Clause 2.2. The Bond Trustee is not liable for the content of information provided to the Bondholders on behalf of the Issuer.

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21.2.2 The Issuer is liable for, and shall indemnify the Bond Trustee fully in respect of, all losses, expenses and liabilities incurred by the Bond Trustee as a result of negligence by the Issuer (including its directors, management, officers, employees, agents and representatives) to fulfil its obligations under the terms of this Bond Agreement and any other Finance Document, including losses incurred by the Bond Trustee as a result of the Bond Trustee's actions based on misrepresentations made by the Issuer in connection with the establishment and performance of this Bond Agreement and any other Finance Document.

21.2.3 The Bond Trustee can as a condition for carrying out an instruction from the Bondholders (including, but not limited to, instructions set out in Clause 19.2(a) or 20.2.1 (b), require satisfactory security and indemnities for any possible liability and anticipated costs and expenses, from those Bondholders who requested that instruction and/or those who voted in favour of the decision to instruct the Bond Trustee. Any instructions from the Bondholders may be put forward to the Bondholders' Meeting by the Bond Trustee before the Bond Trustee takes any action.

21.3 Change of Bond Trustee

21.3.1 Change of Bond Trustee shall be carried out pursuant to the procedures set out in Clause 20. The Bond Trustee shall continue to carry out its duties as bond trustee until such time that a new Bond Trustee is elected.

21.3.2 The fees and expenses of a new bond trustee shall be covered by the Issuer pursuant to the terms set out in Clause 18, but may be recovered wholly or partially from the Bond Trustee if the change is due to a breach by the Bond Trustee of its duties pursuant to the terms of this Bond Agreement or other circumstances for which the Bond Trustee is liable.

21.3.3 The Bond Trustee undertakes to co-operate so that the new bond trustee receives without undue delay following the Bondholders' Meeting the documentation and information necessary to perform the functions as set out under the terms of this Bond Agreement.

22 Miscellaneous

22.1 The community of Bondholders

By virtue of holding Bonds, which are governed by this Bond Agreement (which pursuant to Clause 2.1.1 is binding upon all Bondholders), a community exists between the Bondholders, implying, inter alia, that:

(a) the Bondholders are bound by the terms of this Bond Agreement;

(b) the Bond Trustee has power and authority to act on behalf of, and/or represent; the Bondholders, in all matters, included but not limited to taking any legal or other action, including enforcement of the Bond Issue and/or any Security, opening of bankruptcy or other insolvency proceedings;

(c) the Bond Trustee has, in order to manage the terms of this Bond Agreement, access to the Securities Depository to review ownership of Bonds registered in the Securities Depository; and

(d) this Bond Agreement establishes a community between Bondholders meaning that:

(i) the Bonds rank pari passu between each other; (ii) the Bondholders may not, based on this Bond Agreement, act directly

towards the Issuer and may not themselves institute legal proceedings

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against the Issuer, however not restricting the Bondholders to exercise their individual rights derived from this Bond Agreement;

(iii) the Issuer may not, based on this Bond Agreement, act directly towards the Bondholders;

(iv) the Bondholders may not cancel the Bondholders' community; and (v) the individual Bondholder may not resign from the Bondholders'

community.

22.2 Defeasance

22.2.1 The Issuer may, at its option and at any time, elect to have certain obligations discharged (see Clause 22.2.2) upon complying with the following conditions ("Security and Covenant Defeasance"):

(a) the Issuer shall have irrevocably pledged to the Bond Trustee for the benefit of the Bondholders cash or government bonds accepted by the Bond Trustee (the "Defeasance Pledge") in such amounts as will be sufficient for the payment of principal (including if applicable premium payable upon exercise of a Call Option) and interest on the Outstanding Bonds to Maturity Date (or redemption upon an exercise of a notified Call Option) or any other amount agreed between the Parties;

(b) no Event of Default shall have occurred and be continuing on the date of establishment of the Defeasance Pledge, or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time during any hardening period applicable to the Defeasance Pledge (or the relevant period for non-Norwegian companies) or any other date agreed between the Parties;

(c) if the Bonds are secured, the Defeasance Pledge shall be considered as a replacement of the Security established prior to the Defeasance Pledge;

(d) the Issuer shall have delivered to the Bond Trustee a certificate signed by its Chief Executive Officer that the Defeasance Pledge was not made by the Issuer with the intent of preferring the Bondholders over any other creditors of the Issuer or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuer or others; and

(e) the Issuer shall have delivered to the Bond Trustee any certificate or legal opinion reasonably required by the Bond Trustee regarding the Security and Covenant Defeasance or Defeasance Pledge, including any certificate or legal opinion on (i) the compliance of the conditions of the Security and Covenant Defeasance, (ii) that the Defeasance Pledge constitutes a valid, perfected and enforceable Security in favour of the Bond Trustee for the benefit of the Bondholders which will not be subject to any rights of creditors of the Issuer or any bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally under the laws of the jurisdiction where the Defeasance Pledge was established and the corporate domicile of the Issuer, (iii) any relevant tax issues concerning the Bondholders, (iv) any valuation of any assets or (vii) any other certificate or opinion regarding the Security and Covenant Defeasance or the Defeasance Pledge.

22.2.2 Upon the exercise by the Issuer of its option under Clause 22.2.1:

(a) the Issuer shall be released from their obligations under all provisions in Clause17, except Clauses 17.2.1(a), (e), (h), (i) and (j), or as otherwise agreed;

(b) the Issuer shall not (and shall ensure that all Group Companies shall not) take any

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actions that may cause the value of the Security created by this Security and Covenant Defeasance to be reduced, and shall at the request of the Bond Trustee execute, or cause to be executed, such further documentation and perform such other acts as the Bond Trustee may reasonably require in order for the Security to remain valid, enforceable and perfected by the Bond Trustee for the account of the Bondholders;

(c) any Guarantor(s) shall be discharged from their obligations under the Guarantee(s), and the Guarantee(s) shall cease to have any legal effect, or as otherwise agreed;

(d) any Security other than the Defeasance Pledge shall be discharged, and the Bond Trustee shall take all steps reasonably possible for it to cause such discharge to be effected, by way of deletion of the relevant Security Document from the relevant register, notice to third parties or as otherwise required, or as otherwise agreed; and

(e) all other provisions of this Bond Agreement (except (a) – (c) above) shall remain fully in force without any modifications, or as otherwise agreed.

22.2.3 All amounts owed by the Issuer hereunder covered by the Defeasance Pledge shall be applied by the Bond Trustee, in accordance with the provisions of this Bond Agreement, against payment to the Bondholders of all sums due to them under this Bond Agreement on the due date thereof.

Any excess funds not required for the payment of principal, premium and interest to the Bondholders (including any expenses, fees etc. due to the Bond Trustee hereunder) shall be returned to the Issuer.

22.3 Limitation of claims

All claims under the Bonds and this Bond Agreement for payment, including interest and principal, shall be subject to the time-bar provisions of the Norwegian Limitation Act of May 18, 1979 No. 18.

22.4 Access to information

22.4.1 This Bond Agreement is available to anyone and copies may be obtained from the Bond Trustee or the Issuer. The Bond Trustee shall not have any obligation to distribute any other information to the Bondholders or others than explicitly stated in this Bond Agreement. The Issuer shall ensure that a copy of this Bond Agreement is available to the general public until all the Bonds have been fully discharged.

22.4.2 The Bond Trustee shall, in order to carry out its functions and obligations under this Bond Agreement, have access to the Securities Depository for the purposes of reviewing ownership of the Bonds registered in the Securities Depository.

22.5 Amendments

All amendments of this Bond Agreement shall be made in writing, and shall unless otherwise provided for by this Bond Agreement, only be made with the approval of all parties hereto.

22.6 Notices, contact information

22.6.1 Written notices, warnings, summons etc. to the Bondholders made by the Bond Trustee shall be sent via the Securities Depository with a copy to the Issuer and the Exchange. Information to the Bondholders may also be published at Stamdata only. Any such notice or communication shall be deemed to be given or made as follows:

36 (38)

(a) if by letter via the Securities Depository, when sent from the Securities Depository; and

(b) if by publication on Stamdata, when publicly available.

22.6.2 The Issuer's written notifications to the Bondholders shall be sent via the Bond Trustee, alternatively through the Securities Depository with a copy to the Bond Trustee and the Exchange.

22.6.3 Unless otherwise specifically provided, all notices or other communications under or in connection with this Bond Agreement between the Bond Trustee and the Issuer shall be given or made in writing, by letter, e-mail or fax. Any such notice or communication shall be deemed to be given or made as follows:

(a) if by letter, when delivered at the address of the relevant Party;

(b) if by e-mail, when received; and

(c) if by fax, when received.

22.6.4 The Issuer and the Bond Trustee shall ensure that the other party is kept informed of changes in postal address, e-mail address, telephone and fax numbers and contact persons.

22.6.5 When determining deadlines set out in this Bond Agreement, the following shall apply (unless otherwise stated):

(a) If the deadline is set out in days, the first day when the deadline is in force shall not be inclusive, however, the meeting day or the occurrence the deadline relates to, shall be included.

(b) If the deadline is set out in weeks, months or years, the deadline shall end on the day in the last week or the last month which, according to its name or number, corresponds to the first day the deadline is in force. If such day is not a part of an actual month, the deadline shall be the last day of such month.

(c) If a deadline ends on a day which is not a Business Day, the deadline is postponed to the next Business Date.

22.7 Dispute resolution and legal venue

22.7.1 This Bond Agreement and all disputes arising out of, or in connection with this Bond Agreement between the Bond Trustee, the Bondholders and the Issuer, shall be governed by Norwegian law.

22.7.2 All disputes arising out of, or in connection with this Bond Agreement between the Bond Trustee, the Bondholders and the Issuer, shall, subject to paragraph c) below, be exclusively resolved by the courts of Norway, with the District Court of Oslo as sole legal venue.

22.7.3 Clause 22.7.2 is for the benefit of the Bond Trustee only. As a result, the Bond Trustee shall not be prevented from taking proceedings relating to a dispute in any other courts with jurisdiction. To the extent allowed by law, the Bond Trustee may take concurrent proceedings in any number of jurisdictions.

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22.8 Process Agent

The Issuer shall, prior to the Issue Date, nominate a process agent in Norway for the purpose of serving a writ of summons and/or any other act of process in respect of the courts in Norway, or any notices as set out in this Bond Agreement.

* * * * *

On behalf of the Issuer Prosafe SE __________________________________ Name: Capacity: On behalf of the Bond Trustee Nordic Trustee ASA __________________________________ Name: Capacity:

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Attachment 1

COMPLIANCE CERTIFICATE Nordic Trustee ASA P.O. Box 1470 Vika N-0116 Oslo Norway Fax: + 47 22 87 94 10 E-mail: [email protected]

[date] Dear Sirs, PROSAFE SE SUBORDINATED CONVERTIBLE BOND ISSUE 2016/2021 - ISIN 001 077102.5 We refer to the Bond Agreement for the abovementioned Bond Issue made between Nordic Trustee ASA as Bond Trustee on behalf of the Bondholders, and the undersigned as Issuer under which a Compliance Certificate shall be issued. This letter constitutes the Compliance Certificate for the period [PERIOD]. Capitalised terms used herein shall have the same meaning as in this Bond Agreement. With reference to Clause 17.2.2 we hereby certify that: 1. all information contained herein is true and accurate and there has been no change which would

have a Material Adverse Effect on the financial condition of the Issuer since the date of the last accounts or the last Compliance Certificate submitted to you.

2. the covenants set out in Clause 17 are satisfied;

Copies of our latest consolidated [Financial Statements] / [Interim Accounts] are enclosed. Yours faithfully, Prosafe SE ___________________ Name of authorized person Enclosure: [copy of any written documentation]

101

Prosafe SE 126 Stadiou, 6020 Larnaca, Cyprus

Telephone: +357 2462 2450 Fax: +357 2462 2480.

www.prosafe.com