Exhibit 10.4

EXECUTION COPY

TAX SUPPORT AGREEMENT

This TAX SUPPORT AGREEMENT (this “Agreement”) is entered into as of August 4,
2009, between Pride International, Inc., a Delaware corporation (“Pride”), and
Seahawk Drilling, Inc., a Delaware corporation (“Seahawk”). Capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed to
such terms in the Master Separation Agreement referred to below.

RECITALS

WHEREAS, the Board of Directors of Pride has determined that it would be
appropriate and desirable for Pride to distribute (the “Distribution”) on a pro
rata basis to the holders of outstanding shares of common stock, par value $.01
per share, of Pride all of the outstanding shares of common stock, par value
$.01 per share, of Seahawk owned by Pride;

WHEREAS, in order to effectuate the foregoing, Pride and Seahawk have entered
into a Master Separation Agreement, dated as of the date hereof (the “Master
Separation Agreement”), which provides, among other things, upon the terms and
subject to the conditions thereof, for the separation of the respective
businesses of Pride and Seahawk and the Distribution, and the execution and
delivery of certain other agreements, including this Agreement, in order to
facilitate and provide for the foregoing;

WHEREAS, Seahawk has received certain tax assessments from the Mexican Hacienda
(as defined below) for past tax years, and Seahawk is contesting such tax
assessments pursuant to proceedings that are pending as of the date hereof;

WHEREAS, such tax assessments are Seahawk Liabilities, and Seahawk intends to
continue to contest such tax assessments from and after the Distribution Time;

WHEREAS, Seahawk is required to provide security in favor of the Mexican
Hacienda while certain of such contest proceedings are pending and is expected
to be required to provide additional security in favor of the Mexican Hacienda
at a future date; and

WHEREAS, Pride is willing to provide credit support for such required security
on the terms and conditions contained herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties, intending to be legally bound, agree
as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. As used in this Agreement, the following terms have the
meanings specified below:

“Aggregate Credit Support Exposure” means, at any time, the sum of the Credit
Support Exposures under all Pride Credit Support Instruments outstanding at such
time.

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“Cash Collateral Account” means a blocked deposit account or accounts to be
established and maintained in the name of Pride at the office of one or more
financial institutions selected by Pride, as collateral security for all
Obligations.

“Category 1 Tax Assessment Obligations” means all payment obligations of Seahawk
and/or any of its Subsidiaries in respect of the Category 1 Tax Assessments.

“Category 2 Tax Assessment Obligations” means all payment obligations of Seahawk
and/or any of its Subsidiaries in respect of the Category 2 Tax Assessments.

“Category 3 Tax Assessment Obligations” means all payment obligations of Seahawk
and/or any of its Subsidiaries in respect of the Category 3 Tax Assessments.

“Category 4 Tax Assessment Obligations” means all payment obligations of Seahawk
and/or any of its Subsidiaries in respect of the Category 4 Tax Assessments.

“Category 1 Tax Assessments” mean the Tax Assessments described under the
heading “Category 1 Tax Assessments” on Schedule 1 hereto (including any
ordinary course increases for penalties and interest and other changes to such
Tax Assessments as from time to time may be made by the Mexican Hacienda to the
extent that such changes arise from the same statutory issues that formed the
basis for the Mexican Hacienda’s original imposition of such Tax Assessments),
as such Tax Assessments may be renumbered from time to time after the date
hereof.

“Category 2 Tax Assessments” mean the Tax Assessments described under the
heading “Category 2 Tax Assessments” on Schedule 1 hereto (including any
ordinary course increases for penalties and interest and other changes to such
Tax Assessments as from time to time may be made by the Mexican Hacienda to the
extent that such changes arise from the same statutory issues that formed the
basis for the Mexican Hacienda’s original imposition of such Tax Assessments),
as such Tax Assessments may be renumbered from time to time after the date
hereof.

“Category 3 Tax Assessments” mean the Tax Assessments described under the
heading “Category 3 Tax Assessments” on Schedule 1 hereto (including any
ordinary course increases for penalties and interest and other changes to such
Tax Assessments as from time to time may be made by the Mexican Hacienda to the
extent that such changes arise from the same statutory issues that formed the
basis for the Mexican Hacienda’s original imposition of such Tax Assessments),
as such Tax Assessments may be renumbered from time to time after the date
hereof.

“Category 4 Tax Assessments” mean the Tax Assessments described under the
heading “Category 4 Tax Assessments” on Schedule 1 hereto (including any
ordinary course increases for penalties and interest and other changes to such
Tax Assessments as from time to time may be made by the Mexican Hacienda to the
extent that such changes arise from the same statutory issues that formed the
basis for the Mexican Hacienda’s original imposition of such Tax Assessments),
as such Tax Assessments may be renumbered from time to time after the date
hereof.

 

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“Change in Circumstance” means, with respect to any Seahawk Credit Support
Instrument with respect to which Seahawk has requested pursuant to
Section 2.2(a) that any Pride Credit Support Instrument be issued, any of the
following events: (a) any of the events or conditions described in
Section 3.1(f) or (g) occurs with respect to the Seahawk Credit Support Provider
that has issued or has proposed issuing such Seahawk Credit Support Instrument;
(b) such Seahawk Credit Support Provider changes the terms on which it is
willing to issue such Seahawk Credit Support Instrument in any material respect,
including a change to the type or types of Pride Credit Support Instruments that
such Seahawk Credit Support Provider is willing to accept; or (c) there shall
occur a material disruption of, or a material adverse change in, financial,
banking, surety or capital market conditions.

“Continuing Directors” means, as of any date of determination, any member of the
board of directors (or persons, committees or other group performing similar
functions) of Seahawk who (i) was a member of such board of directors (or
persons, committee or other group performing similar functions) on the
Distribution Date or (ii) was nominated for election or elected to such board of
directors (or persons, committees or other group performing similar functions)
with the approval of a majority of the Continuing Directors who were members of
such board of directors (or persons, committees or other group performing
similar functions) at the time of such nomination or election.

“Credit Support Availability Period” means the period from the Distribution Date
to the date that is sixty (60) days prior to the Credit Support Termination
Date.

“Credit Support Exposure” means, with respect to any outstanding Pride Credit
Support Instrument provided in favor of any Seahawk Credit Support Provider at
any time of determination, the maximum amount payable by Pride to such Seahawk
Credit Support Provider under such Pride Credit Support Instrument (or, in the
case of any Pride Credit Support Instrument of the type described in clause (c)
or, if applicable, clause (d) of the definition thereof, the maximum amount
payable by Pride to the issuer of such Pride Credit Support Instrument in order
to reimburse such issuer for amounts it pays to such Seahawk Credit Support
Provider) at such time. For the avoidance of doubt, Pride will have Credit
Support Exposure under any Pride Credit Support Instrument provided in favor of
any Seahawk Credit Support Provider until either (i) such Seahawk Credit Support
Provider agrees to the termination or cancellation of, and/or releases Pride
from all of its obligations under, such Pride Credit Support Instrument (and, in
the case of any Pride Credit Support Instrument of the type described in clause
(c) or, if applicable, clause (d) of the definition thereof, such Seahawk Credit
Support Provider returns such Pride Credit Support Instruments to Pride), or
(ii) the Seahawk Credit Support Instrument with respect to which such Pride
Credit Support Instrument has been provided has been canceled or terminated and
returned by the Mexican Hacienda to such Seahawk Credit Support Provider.

“Credit Support Fee” has the meaning set forth in Section 2.7(a).

“Credit Support Instrument” means any letter of credit, surety bond or other
similar financial instrument.

“Credit Support Termination Date” means the sixth anniversary of the
Distribution Date.

 

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“Designated Subsidiaries” means, collectively, as of any date of determination,
(a) each of the entities identified in Schedule 1 hereto that is a Subsidiary of
Seahawk and is subject to an unresolved Tax Assessment on such date, and
(b) each Subsidiary of Seahawk that, on such date, would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date
hereof.

“Event of Default” has the meaning set forth in Section 3.1.

“Existing Credit Support Instruments” means the letters of credit and surety
bonds issued in favor of the Mexican Hacienda that are outstanding as of the
date hereof, as more fully described on Schedule 2 hereto.

“LIBO Business Day” means any day that is (i) a Business Day and (ii) a day on
which dealings in deposits in U.S. dollars are conducted by and between banks in
the London interbank eurodollar market.

“LIBO Rate” means, for any date of determination, the rate per annum (expressed
as a percentage) equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR from time to time), at approximately 11:00
a.m., London time, two LIBO Business Days prior to such day, for deposits in
U.S. dollars (for delivery on such day), with a term of six (6) months
commencing on such day. If such rate is not commercially available as set forth
above on any date of determination for any reason, then the LIBO Rate for such
day shall be the rate per annum (expressed as a percentage) for deposits in U.S.
dollars that is described as the six-month “London interbank offered rate” in
the Money Rates section of The Wall Street Journal for the second LIBO Business
Day immediately preceding such day. If neither of the preceding rates is
available on any date of determination for any reason, then the LIBO Rate for
such day shall be the product of (i) the rate per annum (expressed as a
percentage) for deposits in U.S. dollars that is described as the six-month
“London interbank offered rate” in the Money Rates section of The Wall Street
Journal most recently published on or prior to such day, multiplied by
(ii) 1.25. To the extent that the LIBO Rate is being determined on any date of
determination by reference to the Money Rates section of The Wall Street Journal
and more than one “London interbank offered rate” for a six-month period is
published in such section, the highest of such rates will be the rate used for
such day.

“Mexican Hacienda” means the Servicio de Administración Tributaria, an agency of
the Secretaría de Hacienda y Crédito Público of Mexico.

“Obligations” means all obligations (liquidated, contingent or otherwise) from
time to time owed by Seahawk to Pride pursuant to, or arising under, this
Agreement, including all obligations to reimburse Pride for any Pride Payments,
all accrued and unpaid interest (including interest which accrues during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), all
accrued and unpaid fees, and all obligations to pay expenses, reimbursements,
indemnities and other amounts.

 

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“Pride Credit Support Instrument” means, with respect to a Seahawk Credit
Support Instrument, any of the following: (a) a guarantee by Pride of all
amounts payable by Seahawk or any of its Subsidiaries to the applicable Seahawk
Credit Support Provider in the event such Seahawk Credit Support Provider makes
any payment under such Seahawk Credit Support Instrument, (b) an agreement by
Pride to indemnify such Seahawk Credit Support Provider for any amounts paid by
such Seahawk Credit Support Provider under such Seahawk Credit Support
Instrument, (c) a letter of credit, surety bond or other similar financial
instrument issued by any third party for the account of Pride or any of its
Subsidiaries, which backstops all or a portion of such Seahawk Credit Support
Instrument, or (d) any agreement or instrument that is similar to any of the
foregoing which has the effect of assuring the applicable Seahawk Credit Support
Provider of reimbursement for any amounts it pays under such Seahawk Credit
Support Instrument.

“Pride Payment” has the meaning set forth in Section 2.3.

“Proposed Credit Support Delivery Date” has the meaning set forth in
Section 2.2(a).

“Seahawk Change of Control” means the occurrence of any of the following events:

(a)   any acquisition pursuant to which any Person or group (as defined in
Section 13(d)(3) or 14(d)(2) of the Exchange Act) has become the direct or
indirect beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
more than 35% of the Voting Stock of Seahawk;

(b)   Seahawk is merged with or into or consolidated with another Person and,
immediately after giving effect to the merger or consolidation, less than a
majority of the outstanding voting securities entitled to vote generally in the
election of directors or persons who serve similar functions of the surviving or
resulting Person are then beneficially owned (within the meaning of Rule 13d-3
of the Exchange Act) in the aggregate by (i) the stockholders of Seahawk
immediately prior to such merger or consolidation, or (ii) if the record date
has been set to determine the stockholders of Seahawk entitled to vote on such
merger or consolidation, the stockholders of Seahawk as of such record date;

(c)   Seahawk, either individually or in conjunction with one or more of its
Subsidiaries, sells, conveys, transfers or leases, or its Subsidiaries sell,
convey, transfer or lease, all or substantially all of the assets of Seahawk and
its Subsidiaries, taken as a whole (either in one transaction or a series of
related transactions), including equity interests of its Subsidiaries, to any
Person other than Seahawk of one or more or if Subsidiaries;

(d)   the liquidation or dissolution of Seahawk; or

(e)   a majority of the individuals who constitute the board of directors of
Seahawk are not Continuing Directors;

provided that, if the definition of “Change of Control” (or any comparable term)
in the Seahawk Credit Agreement (or any defined term used in such definition) is
amended in a manner that results in events in addition to those described in
clauses (a) through (e) above constituting a

 

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“Change of Control” (or any comparable term) under the Seahawk Credit Agreement,
then the term Seahawk Change of Control shall automatically be deemed to
include, in addition to the events described in clauses (a) through (e) above,
such additional events.

“Seahawk Credit Agreement” means that certain Revolving Credit Agreement dated
as of August 4, 2009 among Seahawk as Borrower, certain subsidiaries thereof, as
Guarantors, the Lenders from time to time party thereto, as Lenders, and
Natixis, New York Branch as Administrative Agent, Issuing Bank, Lead Arranger
and Sole Bookrunner, as amended, supplemented, restated, modified, renewed,
refunded, replaced or refinanced (including refinancing with any capital markets
transaction) from time to time.

“Seahawk Indebtedness” means Indebtedness of Seahawk or any of its Subsidiaries
in an aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit agreement) exceeding the Threshold Amount.

“Seahawk Credit Support Instrument” means any Credit Support Instrument
(including the Existing Credit Support Instruments) issued for the account of
Seahawk or any of its Subsidiaries, which Credit Support Instrument is issued
for the benefit of the Mexican Hacienda in connection with any Specified Tax
Assessment Contest.

“Seahawk Credit Support Provider” means a financial institution or other Person
not an Affiliate of Seahawk or Pride that issues a Seahawk Credit Support
Instrument (including the issuers of the Existing Credit Support Instruments).

“Specified Seahawk Indebtedness” means Indebtedness of Seahawk or any of its
Subsidiaries in an aggregate outstanding principal amount (including amounts
owing to all creditors under any combined or syndicated credit agreement, but
excluding undrawn committed or available amounts) exceeding the Threshold
Amount.

“Specified Tax Assessments” means the Category 1 Tax Assessments, the Category 2
Tax Assessments, the Category 3 Tax Assessments and the Category 4 Tax
Assessments.

“Specified Tax Assessment Contests” means the contests by Seahawk and/or certain
of its Subsidiaries of the Specified Tax Assessments, which are pending as of
the date hereof.

“Tax Assessment” means any of the tax assessments levied against Seahawk and/or
certain of its Subsidiaries in 2006, 2007 and February 2009 by the Mexican
Hacienda related to the tax years 2001 through 2004.

“Threshold Amount” means $2,500,000; provided that, if the “cross-default
threshold” in the Seahawk Credit Agreement is amended to be an amount other than
$2,500,000, the Threshold Amount shall automatically be deemed to be such other
amount.

“Voting Stock” means, with respect to any entity, equity interests of such
entity of any class or classes, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of members of the
board of directors (or persons, committees or groups performing similar
functions) of such entity.

 

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Section 1.2   Terms Generally.   The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”. The
word “or” is not exclusive. Unless the context requires otherwise, (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, and
(d) all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement. In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including”; the words “to”
and “until” each mean “to but excluding”; and the word “through” means “to and
including”.

ARTICLE II

PRIDE CREDIT SUPPORT

Section 2.1   Pride Credit Support Instruments.   Subject to the terms and
conditions set forth herein, in connection with any Specified Tax Assessment
Contest, Pride agrees to provide, from time to time during the Credit Support
Availability Period upon the request of Seahawk in accordance with Section 2.2,
one or more Pride Credit Support Instruments in favor of any Seahawk Credit
Support Provider that has issued one or more Seahawk Credit Support Instruments
in connection with such Specified Tax Assessment Contest; provided that:

(a)   Pride shall determine in its sole discretion the type or types of Pride
Credit Support Instruments it will provide in favor of such Seahawk Credit
Support Provider, provided that such type or types of Pride Credit Support
Instruments must be reasonably acceptable to such Seahawk Credit Support
Provider;

(b)   the Credit Support Exposure with respect to such Pride Credit Support
Instruments shall not exceed the aggregate amount payable by such Seahawk Credit
Support Provider to the Mexican Hacienda under the Seahawk Credit Support
Instruments supported by such Pride Credit Support Instruments;

(c)   Pride shall have no obligation to provide any Pride Credit Support
Instrument if the Credit Support Exposure in respect thereof is not subject to a
specified monetary cap;

 

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(d)   Seahawk shall not be entitled to request that any Pride Credit Support
Instruments be provided in support of any Seahawk Credit Support Instruments
that secure any Category 1 Tax Assessment Obligations if the Proposed Credit
Support Delivery Date therefor is on or after May 31, 2012;

(e)   Seahawk shall not be entitled to request that any Pride Credit Support
Instruments be provided in support of any Seahawk Credit Support Instruments
that secure any Category 2 Tax Assessment Obligations if the Proposed Credit
Support Delivery Date therefor is on or after May 31, 2013;

(f)   Seahawk shall not be entitled to request that any Pride Credit Support
Instruments be provided in support of any Seahawk Credit Support Instruments
that secure any Category 3 Tax Assessment Obligations if the Proposed Credit
Support Delivery Date therefor is on or after May 31, 2014.

For the avoidance of doubt, Pride has no obligation to provide any credit
support for any Credit Support Instruments that Seahawk may post in favor of the
Mexican Hacienda in connection with any proceedings maintained by Seahawk or any
of its Subsidiaries contesting tax assessments other than the Specified Tax
Assessments.

Section 2.2   Requests for Pride Credit Support Instruments.

(a)   In order to request that Pride provide a Pride Credit Support Instrument
to a Seahawk Credit Support Provider, Seahawk shall submit a written request to
Pride at least 45 days prior to the date on which Seahawk desires that Pride
provide such Pride Credit Support Instrument (the “Proposed Credit Support
Delivery Date”), which written request shall include the following information:

(i)   an identification of the applicable Specified Tax Assessment Contest;

(ii)   a description of the Seahawk Credit Support Instrument or proposed
Seahawk Credit Support Instrument with respect to which Seahawk requests that
such Pride Credit Support Instrument be issued, including a description of the
type of such Seahawk Credit Support Instrument, the applicable Seahawk Credit
Support Provider, the expiration or maturity date thereof, the amounts that may
be payable by such Seahawk Credit Support Provider to the Mexican Hacienda
thereunder and any other material terms of such Seahawk Credit Support
Instrument;

(iii)   an identification of the types of Pride Credit Support Instruments that
the applicable Seahawk Credit Support Provider reasonably deems acceptable to be
provided in its favor to support the applicable Seahawk Credit Support
Instrument it has issued or proposes to issue; and

(iv)   the Proposed Credit Support Delivery Date, which shall be a Business Day
during the Credit Support Availability Period and shall comply with the terms of
Section 2.1.

 

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(b)   So long as (i) the type and terms of the Seahawk Credit Support Instrument
that Seahawk has posted or proposes to post are acceptable to Pride, (ii) the
issuer thereof is acceptable to Pride, (iii) Seahawk has provided to Pride all
the information specified in Section 2.2(a) and, if any, all other information
timely requested by Pride pursuant to Section 2.2(c) and (iv) no Event of
Default then exists (and Seahawk certifies in writing that no Event of Default
then exists), Pride shall deliver to the applicable Seahawk Credit Support
Provider on the Proposed Credit Support Delivery Date (or, if reasonably
required by such Seahawk Credit Support Provider and if it is commercially
reasonable for Pride to do so, on a day not more than three Business Days prior
to the Proposed Credit Support Delivery Date) one or more Pride Credit Support
Instruments that support Seahawk’s or any of its Subsidiaries’ payment
obligations in respect of such Seahawk Credit Support Instrument.

(c)   If (i) the type or terms of the Seahawk Credit Support Instrument that
Seahawk has posted or proposes to post are not acceptable to Pride, (ii) the
issuer of such Seahawk Credit Support Instrument or Instruments is not
acceptable to Pride and/or (iii) Pride requires any information other than as
specified in Section 2.2(a) which it reasonably believes is necessary for it to
issue the requested Pride Credit Support Instrument, then Pride shall notify
Seahawk (in writing or by way of a telephone call to an officer of Seahawk,
which telephone call shall be promptly followed by a confirmatory writing to
Seahawk), within 10 days after Pride’s receipt of the applicable request made by
Seahawk pursuant to Section 2.2(a), of the type of Seahawk Credit Support
Instrument, or the changes in the terms thereof, that would be acceptable to
Pride, the names of potential issuers of Seahawk Credit Support Instruments that
would be acceptable to Pride, and/or such other information that Pride
reasonably believes is necessary for it to issue the requested Pride Credit
Support Instrument, as applicable. If (1)(x) Seahawk does not receive a writing
or telephone call of the nature described in the preceding sentence within 10
days after Pride’s receipt of a request made by Seahawk pursuant to
Section 2.2(a), or (y) Seahawk timely receives such a writing or telephone call,
and Seahawk is able to procure one or more Seahawk Credit Support Instruments
that are acceptable to Pride from an issuer or issuers acceptable to Pride
and/or Seahawk furnishes all such information that Pride reasonably believes is
necessary for it to issue the requested Pride Credit Support Instrument, as
applicable, and (2) no Event of Default then exists (and Seahawk certifies in
writing that no Event of Default then exists), then Pride shall deliver to the
applicable Seahawk Credit Support Provider on the Proposed Credit Support
Delivery Date (or, if reasonably required by such Seahawk Credit Support
Provider and if it is commercially reasonable for Pride to do so, on a day not
more than three Business Days prior to the Proposed Credit Support Delivery
Date) one or more Pride Credit Support Instruments that support Seahawk’s or any
of its Subsidiaries’ payment obligations in respect of such Seahawk Credit
Support Instrument.

(d)   Notwithstanding anything to the contrary contained herein, Pride shall
have the right to refuse to provide any Pride Credit Support Instrument
requested by Seahawk if the type, terms or issuer of the Seahawk Credit Support
Instrument that Seahawk has posted or proposes to post are not acceptable to
Pride; provided that, if the conditions set forth in clauses (i) through
(iii) of Section 2.2(b) have been satisfied with respect to any Pride Credit
Support Instrument requested to be provided to support any Seahawk Credit
Support Instrument, Pride shall not be able subsequently to refuse to

 

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provide such Pride Credit Support Instrument unless a Change in Circumstance has
occurred (in which case Pride shall be able to refuse to provide such Pride
Credit Support Instrument). Seahawk acknowledges and agrees that the Seahawk
Credit Support Instruments that are acceptable to Pride may be more expensive
for Seahawk to procure than other types of Credit Support Instruments, and that
the fees and charges of issuers of Seahawk Credit Support Instruments that are
acceptable to Pride may be greater than the fees and charges of other issuers of
Credit Support Instruments. Pride acknowledges and agrees that the Existing
Credit Support Instruments are acceptable to Pride and that each issuer of an
Existing Credit Support Instrument is acceptable to Pride (but only in its
capacity as the issuer of such Existing Credit Support Instrument); provided
that Pride shall have the right to require Seahawk to provide one or more
replacement Seahawk Credit Support Instruments for the Existing Credit Support
Instruments on the terms and conditions set forth in Section 2.2(e).

(e)   Once a Pride Credit Support Instrument has been provided in support of a
Seahawk Credit Support Instrument, Pride shall have the right to require, upon
not less than 45 days’ prior written notice, that Seahawk arrange for the
replacement of such Seahawk Credit Support Instrument with a different type of
Seahawk Credit Support Instrument acceptable to Pride in its sole discretion on
the date (or, if such date is not a Business Day, on the next succeeding
Business Day) that is one year prior to the date on which Seahawk is required to
ensure that Pride has no more Credit Support Exposure under such Pride Credit
Support Instrument pursuant to Section 2.4(a), (b), (c) or (d). The failure of
Seahawk to arrange for the issuance of such a replacement Seahawk Credit Support
Instrument on such date shall constitute an Event of Default under
Section 3.1(c).

Section 2.3   Reimbursement of Amounts Paid under Pride Credit Support
Instruments.   In the event that Pride makes any payment pursuant to or in
connection with any Pride Credit Support Instrument (a “Pride Payment”), Seahawk
shall immediately and unconditionally pay to Pride upon demand the amount of
such payment. If Seahawk shall fail to pay to Pride the amount of any such Pride
Payment immediately upon demand, such overdue amount shall bear interest, after
as well as before judgment, at a rate per annum equal to 7.50% plus the LIBO
Rate. Such interest shall be payable in arrears on demand.

Section 2.4   Termination of Pride Credit Support Instruments.

(a)   Seahawk shall take all actions necessary in order to ensure that, on
July 31, 2012 (or, if such day is not a Business Day, on the next succeeding
Business Day), either (i) the applicable Seahawk Credit Support Providers have
agreed to the termination or cancellation of, and/or have released Pride from
all of its obligations under, all Pride Credit Support Instruments provided in
support of Seahawk Credit Support Instruments issued by such Seahawk Credit
Support Providers that secure any Category 1 Tax Assessment Obligations (and, in
the case of any such Pride Credit Support Instruments of the type described in
clause (c) or, if applicable, clause (d) of the definition thereof, such Seahawk
Credit Support Providers have returned such Pride Credit Support Instruments to
Pride), or (ii) all such Seahawk Credit Support Instruments securing any
Category 1 Tax Assessment Obligations with respect to which any Pride Credit
Support Instruments have been provided have been canceled or terminated and
returned by the Mexican Hacienda to such Seahawk Credit Support Providers.

 

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(b)   Seahawk shall take all actions necessary in order to ensure that, on
July 31, 2013 (or, if such day is not a Business Day, on the next succeeding
Business Day), either (i) the applicable Seahawk Credit Support Providers have
agreed to the termination or cancellation of, and/or have released Pride from
all of its obligations under, all Pride Credit Support Instruments provided in
support of Seahawk Credit Support Instruments issued by such Seahawk Credit
Support Providers that secure any Category 2 Tax Assessment Obligations (and, in
the case of any such Pride Credit Support Instruments of the type described in
clause (c) or, if applicable, clause (d) of the definition thereof, such Seahawk
Credit Support Providers have returned such Pride Credit Support Instruments to
Pride), or (ii) all such Seahawk Credit Support Instruments securing any
Category 2 Tax Assessment Obligations with respect to which any Pride Credit
Support Instruments have been provided have been canceled or terminated and
returned by the Mexican Hacienda to such Seahawk Credit Support Providers.

(c)   Seahawk shall take all actions necessary in order to ensure that, on
July 31, 2014 (or, if such day is not a Business Day, on the next succeeding
Business Day), either (i) the applicable Seahawk Credit Support Providers have
agreed to the termination or cancellation of, and/or have released Pride from
all of its obligations under, all Pride Credit Support Instruments provided in
support of Seahawk Credit Support Instruments issued by such Seahawk Credit
Support Providers that secure any Category 3 Tax Assessment Obligations (and, in
the case of any such Pride Credit Support Instruments of the type described in
clause (c) or, if applicable, clause (d) of the definition thereof, such Seahawk
Credit Support Providers have returned such Pride Credit Support Instruments to
Pride), or (ii) all such Seahawk Credit Support Instruments securing any
Category 3 Tax Assessment Obligations with respect to which any Pride Credit
Support Instruments have been provided have been canceled or terminated and
returned by the Mexican Hacienda to such Seahawk Credit Support Providers.

(d)   Seahawk shall take all actions necessary in order to ensure that, on the
Credit Support Termination Date (or, if such day is not a Business Day, on the
next succeeding Business Day), either (i) the applicable Seahawk Credit Support
Providers have agreed to the termination or cancellation of, and/or have
released Pride from all of its obligations under, all Pride Credit Support
Instruments provided in support of Seahawk Credit Support Instruments issued by
such Seahawk Credit Support Providers that secure any Category 4 Tax Assessment
Obligations (and, in the case of any such Pride Credit Support Instruments of
the type described in clause (c) or, if applicable, clause (d) of the definition
thereof, such Seahawk Credit Support Providers have returned such Pride Credit
Support Instruments to Pride), or (ii) all such Seahawk Credit Support
Instruments securing any Category 4 Tax Assessment Obligations with respect to
which any Pride Credit Support Instruments have been provided have been canceled
or terminated and returned by the Mexican Hacienda to such Seahawk Credit
Support Providers.

 

11

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(e)   If at any time any Seahawk Credit Support Provider notifies Seahawk or any
of its Subsidiaries in writing (including by electronic mail) that such Seahawk
Credit Support Provider no longer requires any Pride Credit Support Instrument
provided in its favor to remain effective, Seahawk shall promptly, and in any
event within three Business Days after receiving such notification, notify Pride
thereof and shall take all commercially reasonable actions necessary to ensure
the prompt termination (and, if applicable, return to Pride) of such Pride
Credit Support Instrument.

Section 2.5   Reductions in Credit Support Exposure.

(a)   If at any time any Seahawk Credit Support Provider notifies Seahawk or any
of its Subsidiaries in writing (including by electronic mail) that such Seahawk
Credit Support Provider no longer requires the full value of any Pride Credit
Support Instrument provided in its favor to remain effective, Seahawk shall
promptly, and in any event within three Business Days after receiving such
notification, notify Pride thereof and shall take all commercially reasonable
actions necessary to ensure that the value of such Pride Credit Support
Instrument is reduced by the amount that such Seahawk Credit Support Provider no
longer requires be maintained.

(b)   If, as a result of a settlement or other disposition of all or any part of
any Specified Tax Assessment Contest or otherwise, the maximum amount payable
under any Seahawk Credit Support Instrument is reduced or any Seahawk Credit
Support Instrument is terminated, then Seahawk shall promptly, and in any event
within three Business Days after such reduction or termination, notify Pride
thereof and take all commercially reasonable actions necessary to ensure that
the value of the Pride Credit Support Instrument or Instruments supporting such
Seahawk Credit Support Instrument is reduced by a corresponding amount or such
Pride Credit Support Instrument or Instruments are terminated (and, if
applicable, returned to Pride), as applicable.

Section 2.6   Modifications of Seahawk Credit Support Instruments.   At any time
that a Pride Credit Support Instrument is outstanding, Seahawk shall not make or
consent to any increase in, amendment to or other modification of (in each case,
that is not expressly contemplated herein) the Seahawk Credit Support Instrument
or Instruments that are supported by such Pride Credit Support Instrument
without the prior written consent of Pride, which consent may not be
unreasonably withheld, conditioned or delayed. For the avoidance of doubt, if
Seahawk proposes to effect any increase in the amounts that may be payable by
the applicable Seahawk Credit Support Provider to the Mexican Hacienda under any
such Seahawk Credit Support Instrument other than as expressly contemplated
herein, Pride’s withholding of its consent to such increase shall be deemed to
be reasonable.

Section 2.7   Fees.

(a)   Seahawk agrees to pay to Pride a credit support fee (the “Credit Support
Fee”), which shall accrue at a rate equal to 5.25% per annum on the Aggregate
Credit Support Exposure on each day during the period from the Distribution Date
to the Credit Support Termination Date; provided that, if Pride continues to
have any Credit Support Exposure after the Credit Support Termination Date, then
the Credit Support Fee shall continue to accrue on the Aggregate Credit Support
Exposure on each day during the period from the Credit Support Termination Date
to the date on which Pride ceases to have any Credit Support Exposure. Accrued
Credit Support Fees shall be payable in

 

12

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arrears on the last day of March, June, September and December of each year and
on the Credit Support Termination Date (or, if any such day is not a Business
Day, on the next succeeding Business Day), commencing on the first such date to
occur after the Distribution Date; provided that any Credit Support Fees
accruing after the Credit Support Termination Date shall be payable on demand.
All Credit Support Fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day). Once paid, Credit Support Fees shall not be
refundable for any reason.

(b)   If any Credit Support Fee is not paid when due, such overdue Credit
Support Fee shall bear interest, after as well as before judgment, at a rate per
annum equal to 7.50% plus the LIBO Rate. Such interest shall be payable in
arrears on demand.

Section 2.8   Information Regarding Specified Tax Assessment Contests.   Seahawk
shall notify Pride in writing of any material developments with respect to any
of the Specified Tax Assessment Contests promptly after the occurrence thereof
(each such notice to describe such developments in reasonable detail). In
addition, Seahawk shall, promptly after any request therefor, provide Pride with
all information regarding the Specified Tax Assessment Contests as Pride may
reasonably request from time to time.

Section 2.9   Settlement of Specified Tax Assessment Contests.   Seahawk shall
not enter into or agree to any settlement with the Mexican Hacienda in respect
of any Specified Tax Assessment Contest unless (a) Seahawk reasonably believes
that Seahawk is able to pay the amount of such proposed settlement in accordance
with the terms of such settlement (taking into account all availability under
the Seahawk Credit Agreement and other financial sources available to Seahawk or
its Subsidiaries) and (b) Seahawk provides Pride not less than 15 days’ prior
written notice of such settlement.

ARTICLE III

EVENTS OF DEFAULT

Section 3.1   Events of Default.   If any of the following events (“Events of
Default”) shall occur:

(a)   Seahawk shall fail to pay any reimbursement obligation in respect of any
Pride Payment when and as the same shall become due and payable;

(b)   Seahawk shall fail to pay any interest or any fee or any other amount
(other than an amount referred to in clause (a) of this Section 3.1) payable
under this Agreement, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of five Business Days;

(c)   Seahawk shall fail to observe or perform any covenant, condition or
agreement contained in (i) clause (a), (b), (c) or (d) of Section 2.4,
(ii) Section 2.6 or (iii) Section 2.9;

 

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(d)   Seahawk shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in
clauses (a), (b) and (c) of this Section 3.1 and in Section 2.8) to be observed
or performed by it pursuant to any of the provisions hereof, and such failure
continues unremedied for 15 days after Pride has given Seahawk written notice
thereof;

(e)   Seahawk or any or its Subsidiaries shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Seahawk
Indebtedness, when and as the same shall become due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise);

(f)   any event or condition occurs that results in any Seahawk Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Seahawk Indebtedness or any trustee or agent on its or their behalf to
cause any Seahawk Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (f) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;

(g)   an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of Seahawk or any of its Designated Subsidiaries or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for Seahawk or any of its Designated Subsidiaries or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

(h)   Seahawk or any of its Designated Subsidiaries shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (f) of this Section 3.1, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Seahawk or any of its
Designated Subsidiaries or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing;

(i)   Seahawk or any of its Subsidiaries shall generally not pay its debts as
they become due, or admit in writing its inability to pay its debts generally;
or

(j)   a Seahawk Change of Control shall occur;

 

14

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then, and in every such event (other than any event described in clause (g) or
(h) of this Section), and at any time thereafter during the continuance of such
event, Pride may terminate its obligation to provide any additional Credit
Support Instruments in favor of any Seahawk Credit Support Provider, and
thereupon such obligation shall terminate immediately; and in case of any event
described in clause (g) or (h) of this Section, the obligation of Pride to
provide any additional Credit Support Instruments in favor of any Seahawk Credit
Support Provider shall automatically terminate. Upon the occurrence and during
the continuance of an Event of Default, Pride may exercise any rights and
remedies available to it under this Agreement or at law or equity.

Section 3.2   Events of Default Requiring Cash Collateralization.   If any of
the following events shall occur:

(a)   any Event of Default described in clause (a), (b), (c)(ii), (c)(iii), (g),
(h), (i) or (j) of Section 3.1 shall occur;

(b)   Seahawk or any or its Subsidiaries shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Specified
Seahawk Indebtedness, when and as the same shall become due and payable (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise);
or

(c)   any event or condition occurs that results in any Specified Seahawk
Indebtedness becoming due prior to its scheduled maturity; provided that this
clause (c) shall not apply to secured Indebtedness that becomes due as a result
of the voluntary sale or transfer of the property or assets securing such
Indebtedness;

then, and in every such event (other than any event described in Section 3.1(g)
or (h)), and at any time thereafter during the continuance of such event, Pride
may require Seahawk to cash collateralize the Aggregate Credit Support Exposure
by paying to Pride immediately available funds in an amount equal to the then
Aggregate Credit Support Exposure, which funds shall be deposited into the Cash
Collateral Account; and in case of any event described in Section 3.1(g) or (h),
Seahawk shall forthwith, without any demand or the taking of any other action by
Pride, cash collateralize the Aggregate Credit Support Exposure by paying to
Pride immediately available funds in an amount equal to the then Aggregate
Credit Support Exposure, which funds shall be deposited into the Cash Collateral
Account.

Section 3.3   Additional Events of Default Requiring Cash Collateralization.

(a)   If Seahawk shall fail to perform its obligations under Section 2.4(a),
Seahawk shall forthwith, without any demand or the taking of any other action by
Pride, cash collateralize the aggregate Credit Support Exposures under all Pride
Credit Support Instruments provided in support of Seahawk Credit Support
Instruments that secure any Category 1 Tax Assessments by paying to Pride
immediately available funds in an amount equal to such aggregate Credit Support
Exposures, which funds shall be deposited into the Cash Collateral Account. If,
by September 30, 2012, the items described in clause (i) or (ii) of
Section 2.4(a) have not been effected, Seahawk shall forthwith, without any
demand or the taking of any other action by Pride, cash collateralize the
aggregate Credit Support Exposures under all Pride Credit Support

 

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Instruments provided in support of Seahawk Credit Support Instruments that
secure any Category 2 Tax Assessments, Category 3 Tax Assessments or Category 4
Tax Assessments by paying to Pride immediately available funds in an amount
equal to such aggregate Credit Support Exposures, which funds shall be deposited
into the Cash Collateral Account.

(b)   If Seahawk shall fail to perform its obligations under Section 2.4(b),
Seahawk shall forthwith, without any demand or the taking of any other action by
Pride, cash collateralize the aggregate Credit Support Exposures under all Pride
Credit Support Instruments provided in support of Seahawk Credit Support
Instruments that secure any Category 2 Tax Assessments by paying to Pride
immediately available funds in an amount equal to such aggregate Credit Support
Exposures, which funds shall be deposited into the Cash Collateral Account. If,
by September 30, 2013, the items described in clause (i) or (ii) of
Section 2.4(b) have not been effected, Seahawk shall forthwith, without any
demand or the taking of any other action by Pride, cash collateralize the
aggregate Credit Support Exposures under all Pride Credit Support Instruments
provided in support of Seahawk Credit Support Instruments that secure any
Category 3 Tax Assessments or Category 4 Tax Assessments by paying to Pride
immediately available funds in an amount equal to such aggregate Credit Support
Exposures, which funds shall be deposited into the Cash Collateral Account.

(c)   If Seahawk shall fail to perform its obligations under Section 2.4(c),
Seahawk shall forthwith, without any demand or the taking of any other action by
Pride, cash collateralize the aggregate Credit Support Exposures under all Pride
Credit Support Instruments provided in support of Seahawk Credit Support
Instruments that secure any Category 3 Tax Assessments by paying to Pride
immediately available funds in an amount equal to such aggregate Credit Support
Exposures, which funds shall be deposited into the Cash Collateral Account. If,
by September 30, 2014, the items described in clause (i) or (ii) of
Section 2.4(c) have not been effected, Seahawk shall forthwith, without any
demand or the taking of any other action by Pride, cash collateralize the
aggregate Credit Support Exposures under all Pride Credit Support Instruments
provided in support of Seahawk Credit Support Instruments that secure any
Category 4 Tax Assessments by paying to Pride immediately available funds in an
amount equal to such aggregate Credit Support Exposures, which funds shall be
deposited into the Cash Collateral Account.

(d)   If Seahawk shall fail to perform its obligations under Section 2.4(d),
Seahawk shall forthwith, without any demand or the taking of any other action by
Pride, cash collateralize the aggregate Credit Support Exposures under all Pride
Credit Support Instruments provided in support of Seahawk Credit Support
Instruments that secure any Category 4 Tax Assessments by paying to Pride
immediately available funds in an amount equal to such aggregate Credit Support
Exposures, which funds shall be deposited into the Cash Collateral Account.

(e)   To the extent Seahawk is required to cash collateralize any Credit Support
Exposures pursuant to any of clauses (a) through (d) above and Seahawk has
previously cash collateralized all or a portion of such Credit Support Exposures
and such cash remains on deposit in the Cash Collateral Account, the amount of
cash required to be provided to Pride in order to effect such cash
collateralization shall be reduced by the amount of such cash that is on deposit
in the Cash Collateral Account at such time.

 

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Section 3.4   Cash Collateral Account.

(a)   Seahawk hereby pledges to Pride, and hereby grants to Pride a first
priority security interest in, all funds held in the Cash Collateral Account
from time to time and all proceeds thereof, as security for the payment of all
Obligations. Pride shall have sole control over the Cash Collateral Account and
shall from time to time withdraw funds then held in the Cash Collateral Account
to satisfy the payment of the Obligations as shall have become or shall become
due and payable under this Agreement. Pride shall exercise reasonable care in
the custody and preservation of any funds held in the Cash Collateral Account
and shall be deemed to have exercised such care if such funds are accorded
treatment substantially equivalent to that which Pride accords its own property,
it being understood that Pride shall not have any responsibility for taking any
necessary steps to preserve rights against any parties with respect to any such
funds or for investing such funds.

(b)   If at any time the amount of funds on deposit in the Cash Collateral
Account exceeds the sum of the Aggregate Credit Support Exposure at such time
and Pride’s reasonable estimate of additional penalties and interest that will
be required to be secured during the pendency of all Specified Tax Assessment
Contests, upon the request of Seahawk, Pride shall withdraw the amount of such
excess from the Cash Collateral Account and turn over the amount of such excess
to Seahawk.

Section 3.5   Failure to Deposit Cash Collateral.   If Seahawk fails to cash
collateralize all or any part of the Aggregate Credit Support Exposure as
required by Section 3.1 within five Business Days after the occurrence of any
Event of Default, Seahawk shall pay interest on the portion of the Aggregate
Credit Support Exposure that has not been so cash collateralized at a rate per
annum equal to 7.50% plus the LIBO Rate. Such interest shall be payable in
arrears on demand.

ARTICLE IV

MISCELLANEOUS

Section 4.1   Entire Agreement.   This Agreement, the Master Separation
Agreement, the other Ancillary Agreements and the Schedules attached hereto and
thereto constitute the entire agreement between the parties with respect to the
subject matter hereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof.

Section 4.2   Governing Law.   This Agreement shall be governed and construed
and enforced in accordance with the laws of the State of Texas as to all matters
regardless of the laws that might otherwise govern under the principles of
conflicts of laws applicable thereto.

Section 4.3   Termination.   This Agreement may be terminated at any time prior
to the Distribution Date upon the termination of the Master Separation
Agreement. In the event of termination pursuant to this Section, neither party
shall have any Liability of any kind to the other party.

 

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Section 4.4   Notices. Except in the case of notices, requests, demands and
other communications expressly permitted to be given by telephone, all notices,
requests, demands and other communications hereunder shall be in writing and
shall be deemed to be duly given (i) when personally delivered or (ii) if mailed
by registered or certified mail, postage prepaid, return receipt requested, on
the date the return receipt is executed or the letter is refused by the
addressee or its agent or (iii) if sent by overnight courier which delivers only
upon the signed receipt of the addressee, on the date the receipt acknowledgment
is executed or refused by the addressee or its agent or (iv) if sent by
facsimile or electronic mail, on the date confirmation of transmission is
received (provided that a copy of any notice delivered pursuant to this
clause (iv) shall also be sent pursuant to clause (i), (ii) or (iii)), addressed
as follows:

 

  (a)

if to Pride, to:

Pride International, Inc.

Attention: Chris Weber

5847 San Felipe, Suite 3300

Houston, Texas 77057

; and

 

  (b)

if to Seahawk, to:

Seahawk Drilling, Inc.

Attention: Alejandro Cestero

5847 San Felipe, Suite 1600

Houston, Texas 77057.

Section 4.5   Costs and Expenses.   Seahawk agrees to pay, upon demand by Pride,
all legal and other costs and expenses of Pride incurred during the existence of
an Event of Default in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement or the
protection of Pride’s rights in connection with this Agreement.

Section 4.6   Counterparts.   This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one agreement binding on Seahawk and Pride.

Section 4.7   Binding Effect; Assignment.   This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives and successors, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement. This Agreement may
not be assigned by any party hereto.

Section 4.8   No Third Party Beneficiaries.   This Agreement is solely for the
benefit of the parties hereto and their respective Subsidiaries and is not
intended to confer upon any other Person except the parties hereto and their
respective Subsidiaries any rights or remedies hereunder.

 

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Section 4.9   Severability.   If any term or other provision of this Agreement
or the Schedules attached hereto is determined by a nonappealable decision by a
court, administrative agency or arbitrator to be invalid, illegal or incapable
of being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to either party. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the court, administrative agency or arbitrator
shall interpret this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the fullest extent possible.
If any sentence in this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.

Section 4.10  Failure or Indulgence Not Waiver; Remedies Cumulative.   No
failure or delay on the part of either party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any agreement herein, nor shall any single or
partial exercise of any such right preclude other or further exercise thereof or
of any other right. All rights and remedies existing under this Agreement are
cumulative and are not exclusive of any rights or remedies otherwise available.

Section 4.11  Amendment.   No change or amendment will be made to this Agreement
except by an instrument in writing signed on behalf of each of the parties to
this Agreement.

Section 4.12  Arbitration; Dispute Resolution.   The procedures for negotiation
and binding arbitration set forth in Article V of the Master Separation
Agreement shall apply to any dispute, controversy or claim (whether sounding in
contract, tort or otherwise) that arises out of or relates to this Agreement,
the alleged breach hereof, or the transactions contemplated hereby (including
all actions taken in furtherance of the transactions contemplated hereby on or
prior to the date hereof).

Section 4.13  Interest Rate Limitation.   Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any amount payable
hereunder, together with all fees, charges and other amounts which are treated
as interest on such amount under applicable law (collectively the “Charges”),
shall exceed the maximum lawful rate (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved in accordance with
applicable law, the rate of interest payable in respect of such amount
hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such amount but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to Pride in respect of other amounts or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount
shall have been received by Pride.

Section 4.14  Construction.   This Agreement shall be construed as if jointly
drafted by Seahawk and Pride and no rule of construction or strict
interpretation shall be applied against either party. The parties represent that
this Agreement is entered into with full consideration of

 

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any and all rights which the parties may have. The parties have relied upon
their own knowledge and judgment and upon the advice of the attorneys of their
choosing. The parties have received independent legal advice, have conducted
such investigations they and their counsel thought appropriate, and have
consulted with such other independent advisors as they and their counsel deemed
appropriate regarding this Agreement and their rights and asserted rights in
connection therewith. The parties are not relying upon any representations or
statements made by any other party, or such other party’s employees, agents,
representatives or attorneys, regarding this Agreement, except to the extent
such representations are expressly incorporated in this Agreement. The parties
are not relying upon a legal duty, if one exists, on the part of any other party
(or such other party’s employees, agents, representatives or attorneys) to
disclose any information in connection with the execution of this Agreement or
its preparation, it being expressly understood that no party shall ever assert
any failure to disclose information on the part of the other party as a ground
for challenging this Agreement.

Section 4.15  Headings.   The headings contained in this Agreement, in any
Schedule hereto and in the table of contents of this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

[Remainder of page intentionally left blank; signature page follows]

 

20

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WHEREFORE, the parties have signed this Tax Support Agreement effective as of
the date first set forth above.

 

PRIDE INTERNATIONAL, INC. By:    

/s/ Brian C. Voegele

  Name:     Brian C. Voegele   Title:  

Senior Vice President and Chief

Financial Officer

 

SEAHAWK DRILLING, INC. By:    

/s/ Randall D. Stilley

  Name:     Randall D. Stilley   Title:   President and Chief Executive Officer

Signature Page to Tax Support Agreement

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Schedule 1

Specified Tax Assessments

Category 1 Tax Assessments

 

Tax Year  

 

  

Company

 

  

Tax Assessment Number

 

  

Amount of Tax
Assessment

 

 

2001

 

  

 

Mexico Drilling Limited LLC

 

  

330-SAT-VII-1966

 

   28,361,723

 

 

2002

 

  

 

Mexico Drilling Limited LLC

 

  

330-SAT-VII-14302

 

   71,610,374

 

 

2002

 

  

 

Pride Central America, LLC

 

  

330-SAT-VII-14301

 

   214,591,219

 

Category 2 Tax Assessments

 

Tax Year  

 

  

Company

 

  

Tax Assessment Number

 

  

Amount of Tax
Assessment

 

 

2003

 

  

 

Mexico Drilling Limited LLC

 

  

900 07 02-2009-20217

 

   225,339,353

 

 

2003

 

  

Pride Drilling, LLC

 

  

330-SAT-VII-14303

 

   240,366,626

 

Category 3 Tax Assessments

 

Tax Year  

 

  

Company

 

  

Tax Assessment Number

 

  

Amount of Tax
Assessment

 

 

2004

 

  

 

Pride Drilling, LLC

 

  

900 07 02-2009-20215

 

   431,345,792

 

Category 4 Tax Assessments

 

Tax Year  

 

  

Company

 

  

Tax Assessment Number

 

  

Amount of Tax
Assessment

 

 

2003

 

  

 

Pride Central America, LLC

 

  

900 07 02-2009-20218

 

   388,709,177

 

All assessment amounts as of June 30, 2009, in Mexican pesos. Assessment amounts
include amounts required to be secured for penalties and interest, where
applicable.

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Schedule 2

Existing Credit Support Instruments

 

Issuer of Letter of Credit
or Surety Bond

 

  

Letter of Credit or
Surety Bond Number

 

  

Issuance Date

 

  

Expiration Date

 

Calyon

 

  

723537018

 

  

8/23/2007

 

  

8/31/2009

 

Fianzas Atlas, S.A.,
as fronting issuer for Fidelity & Deposit

 

   III-381214-RC    11/12/2008    Evergreen

Fianzas Atlas, S.A.,
as fronting issuer for Fidelity & Deposit

 

   III-381215-RC    11/12/2008    Evergreen

Fianzas Atlas, S.A.,
as fronting issuer for Fidelity & Deposit

 

   III-381216-RC    11/12/2008    Evergreen