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                                                                     Exhibit 4-E


                                                                  EXECUTION COPY



                    PREFERRED SECURITIES GUARANTEE AGREEMENT

                              HERCULES INCORPORATED

                          Dated as of November 12, 1998

                                HERCULES TRUST V
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                                TABLE OF CONTENTS

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                                                                                             PAGE
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                                    ARTICLE 1
                         DEFINITIONS AND INTERPRETATION

SECTION 1.01.  Definitions and Interpretation...................................................2

                                    ARTICLE 2
                               TRUST INDENTURE ACT

SECTION 2.01.  Trust Indenture Act; Application.................................................6
SECTION 2.02.  Lists of Holders of Securities...................................................6
SECTION 2.03.  Reports by the Preferred Securities Guarantee Trustee............................7
SECTION 2.04.  Periodic Reports to Preferred Securities Guarantee
                 Trustee........................................................................7
SECTION 2.05.  Evidence of Compliance with Conditions Precedent.................................7
SECTION 2.06.  Events of Default; Waiver........................................................7
SECTION 2.07.  Event of Default; Notice.........................................................8
SECTION 2.08.  Conflicting Interests............................................................8

                                    ARTICLE 3
               POWERS, DUTIES AND RIGHTS OF PREFERRED SECURITIES GUARANTEE TRUSTEE

SECTION 3.01.  Powers and Duties of the Preferred Securities Guarantee
                 Trustee........................................................................8
SECTION 3.02.  Certain Rights of Preferred Securities Guarantee Trustee........................10
SECTION 3.03.  Not Responsible for Recitals or Issuance of Preferred
                 Securities Guarantee..........................................................13

                                    ARTICLE 4
                     PREFERRED SECURITIES GUARANTEE TRUSTEE

SECTION 4.01.  Preferred Securities Guarantee Trustee; Eligibility.............................13
SECTION 4.02.  Appointment, Removal and Resignation of Preferred
                 Securities Guarantee Trustee..................................................14

                                    ARTICLE 5
                                    GUARANTEE

SECTION 5.01.  Guarantee.......................................................................15
SECTION 5.02.  Waiver of Notice and Demand.....................................................15
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SECTION 5.03.  Obligations Not Affected........................................................16
SECTION 5.04.  Rights of Holders...............................................................16
SECTION 5.05.  Guarantee of Payment............................................................17
SECTION 5.06.  Subrogation.....................................................................17
SECTION 5.07.  Independent Obligations.........................................................17

                                    ARTICLE 6
                    LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.01.  Limitation of Transactions......................................................17
SECTION 6.02.  Ranking.........................................................................18

                                    ARTICLE 7
                                   TERMINATION

SECTION 7.01.  Termination.....................................................................19

                                    ARTICLE 8
                         EXCULPATION AND INDEMNIFICATION

SECTION 8.01.  Exculpation.....................................................................19
SECTION 8.02.  Indemnification.................................................................19

                                    ARTICLE 9
                                  COMPENSATION

SECTION 9.01.  Compensation....................................................................20

                                   ARTICLE 10
                                  MISCELLANEOUS

SECTION 10.01.  Successors and Assigns.........................................................21
SECTION 10.02.  Amendments.....................................................................21
SECTION 10.03.  Notices........................................................................21
SECTION 10.04.  Benefit........................................................................22
SECTION 10.05.  Governing Law..................................................................23
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                    PREFERRED SECURITIES GUARANTEE AGREEMENT

         THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (the "PREFERRED
SECURITIES GUARANTEE"), dated as of November 12, 1998, is executed and delivered
by Hercules Incorporated, a Delaware corporation (the "GUARANTOR"), and The
Chase Manhattan Bank, a New York banking corporation, as trustee (the "PREFERRED
SECURITIES GUARANTEE TRUSTEE"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
Hercules Trust V, a statutory business trust formed under the laws of the State
of Delaware (the "ISSUER").

         WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"TRUST AGREEMENT"), dated as of November 12, 1998, among the Trustees of the
Issuer, the Guarantor, as sponsor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 200,000 Auction Rate Reset Preferred Securities,
having an aggregate Liquidation Amount of $200,000,000 (collectively, the
"PREFERRED SECURITIES").

         WHEREAS, as an incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein.

         WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "COMMON SECURITIES GUARANTEE") with substantially identical terms
to this Preferred Securities Guarantee, for the benefit of the holders of the
Common Securities (as defined herein), except that if an event of default under
the Trust Agreement has occurred and is continuing, the rights of holders of the
Common Securities to receive Guarantee Payments under the Common Securities
Guarantee are subordinated, to the extent and in the manner set forth in the
Common Securities Guarantee, to the rights of Holders of Preferred Securities to
receive Guarantee Payments under this Preferred Securities Guarantee.

         NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby acknowledges shall
benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of the Holders.
<PAGE>   5
                                    ARTICLE 1
                         DEFINITIONS AND INTERPRETATION

         SECTION 1.01. Definitions and Interpretation. In this Preferred
Securities Guarantee, unless the context otherwise requires:

          (a) capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings assigned to them
in this Section 1.01;

          (b) terms defined in the Trust Agreement as of the date of execution
of this Preferred Securities Guarantee have the same meaning when used in this
Preferred Securities Guarantee unless otherwise defined in this Preferred
Securities Guarantee;

          (c) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;

          (d) all references to "THE PREFERRED SECURITIES GUARANTEE" or "THIS
PREFERRED SECURITIES GUARANTEE" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;

          (e) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;

          (f) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless otherwise defined in
this Preferred Securities Guarantee or unless the context otherwise requires;
and

          (g) a reference to the singular includes the plural and vice versa.

         "AFFILIATE" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule thereunder.

         "BUSINESS DAY" means any day other than a Saturday or a Sunday, or a
day on which banking institutions in The City of New York or Wilmington,
Delaware are authorized or required by law, regulation or executive order to
close and, until the Remarketing Settlement Date on which Replacement Securities
are issued, that is also a London Banking Day.


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         "COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer.

         "CORPORATE TRUST OFFICE" means the office of the Preferred Securities
Guarantee Trustee for the conduct of corporate trust business at which matters
related to this Preferred Securities Guarantee shall, at any particular time, be
principally administered, which office at the date of execution of this
Preferred Securities Guarantee is located at One Liberty Place, 52nd Floor, 1650
Market Street, Philadelphia, Pennsylvania 19103.

         "COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.

         "EVENT OF DEFAULT" means (i) a default by the Guarantor in respect of
any of its payment or other obligations under this Preferred Securities
Guarantee or (ii) if applicable, the failure of the Guarantor to deliver the
required securities upon an appropriate election by any Holder of Preferred
Securities to convert such Preferred Securities into such securities in
accordance with their terms.

         "GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accumulated and unpaid Distributions that
are required to be paid on such Preferred Securities, to the extent the Issuer
has funds legally available therefor at such time, (ii) the redemption price
(including the Mandatory Redemption Price), including all accumulated and unpaid
Distributions to the date of redemption (the "REDEMPTION PRICE"), to the extent
the Issuer has funds legally available therefor at such time, with respect to
any Preferred Securities called for redemption by the Issuer, and (iii) upon a
voluntary or involuntary dissolution and liquidation of the Issuer (other than
in connection with the distribution of the Subordinated Notes to Holders of the
Preferred Securities or the redemption of the Preferred Securities as provided
in the Trust Agreement, the lesser of (a) the aggregate of the Liquidation
Amount and all accumulated and unpaid Distributions on the Preferred Securities
to the date of payment, to the extent the Issuer has funds legally available
therefor at such time, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "LIQUIDATION DISTRIBUTION"). If an event of default under the Trust
Agreement has occurred and is continuing, no Guarantee Payments under the Common
Securities Guarantee with respect to the Common Securities or any guarantee
payment under any Other Common Securities Guarantees shall be made until the
Holders of Preferred Securities shall be paid in full the Guarantee Payments to
which they are entitled under this Preferred Securities Guarantee.


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         "HOLDER" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "HOLDER"
shall not include the Guarantor or any Affiliate of the Guarantor.

         "INDEMNIFIED PERSON" means the Preferred Securities Guarantee Trustee,
any Affiliate of the Preferred Securities Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Preferred Securities Guarantee Trustee.

         "INDENTURE" means the Junior Subordinated Debenture Indenture dated as
of November 12, 1998, between the Hercules Incorporated, as Issuer (the
"DEBENTURE ISSUER"), and The Chase Manhattan Bank, as Trustee, as supplemented
by the First Supplemental Indenture dated as of November 12, 1998, pursuant to
which the Subordinated Notes are to be issued to the Property Trustee of the
Issuer.

         "LIQUIDATION AMOUNT" means $1000 per Preferred Security.

         "LIST OF HOLDERS" has the meaning set forth in Section 2.02.

         "LONDON BANKING DAY" means any day on which dealings in deposits in
U.S. dollars are transacted in the London interbank market.

         "MAJORITY IN LIQUIDATION AMOUNT OF THE PREFERRED SECURITIES" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the aggregate
Liquidation Amount (including the amount payable on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of all Preferred Securities.

         "OFFICERS' CERTIFICATE" means, with respect to any person, a
certificate signed by either Co-Chief Executive Officer, the President or a Vice
President, and by the Treasurer, the Secretary or an Assistant Secretary of the
Guarantor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Securities Guarantee shall include:

           (a) a statement that each officer signing the Officers' Certificate
         has read the covenant or condition and the definitions relating
         thereto; and


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           (b) a brief statement of the nature and scope of the examination or
         investigation undertaken by each officer in rendering the Officers'
         Certificate;

           (c) a statement that each such officer has made such examination or
         investigation as, in such officer's opinion, is necessary to enable
         such officer to express an informed opinion as to whether or not such
         covenant or condition has been complied with; and

           (d) a statement as to whether, in the opinion of each such officer,
         such condition or covenant has been complied with.

         "OTHER COMMON SECURITIES GUARANTEES" shall have the same meaning as
"OTHER GUARANTEES" in the Common Securities Guarantee.

         "OTHER DEBENTURES" means all junior subordinated debentures issued by
the Guarantor from time to time and sold to trusts established by the Guarantor,
in each case similar to the Issuer.

         "OTHER GUARANTEES" means all guarantees issued by the Guarantor with
respect to preferred securities similar to the Preferred Securities issued by
other trusts established by the Guarantor, in each case similar to the Issuer.

         "PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

         "PREFERRED SECURITIES GUARANTEE TRUSTEE" means The Chase Manhattan
Bank, a New York banking corporation, until a Successor Preferred Securities
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Preferred Securities Guarantee and thereafter means each
such Successor Preferred Securities Guarantee Trustee.

         "RESPONSIBLE OFFICER" means, with respect to the Preferred Securities
Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred Securities Guarantee Trustee, including any vice-president, any
assistant vice-president, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the Preferred
Securities Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer of the Preferred
Securities Guarantee Trustee to whom


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such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.

         "SUBORDINATED NOTES" means the series of junior subordinated debt
securities of the Guarantor designated the Auction Rate Reset Junior
Subordinated Notes Series A, of the Issuer held by the Property Trustee.

         "SUCCESSOR PREFERRED SECURITIES GUARANTEE TRUSTEE" means a successor
Preferred Securities Guarantee Trustee possessing the qualifications to act as
Preferred Securities Guarantee Trustee under Section 4.01.

         "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended.

         "TRUST SECURITIES" means, collectively, the Common Securities and the
Preferred Securities.



                                    ARTICLE 2
                               TRUST INDENTURE ACT

         SECTION 2.01. Trust Indenture Act; Application. (a) This Preferred
Securities Guarantee is subject to the provisions of the Trust Indenture Act
that are required to be part of this Preferred Securities Guarantee and shall,
to the extent applicable, be governed by such provisions.

          (b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.

         SECTION 2.02. Lists of Holders of Securities. (a) The Guarantor shall
provide the Preferred Securities Guarantee Trustee (unless the Preferred
Securities Guarantee Trustee is otherwise the registrar of the Preferred
Securities) with a list, in such form as the Preferred Securities Guarantee
Trustee may reasonably require, of the names and addresses of the Holders of the
Preferred Securities ("LIST OF HOLDERS"), (i) within 14 days after each record
date for payment of Distributions, as of such record date and (ii) at any other
time within 30 days of receipt by the Guarantor of a written request for a List
of Holders as of a date no more than 14 days before such List of Holders is
given to the Preferred Securities Guarantee Trustee, provided that the Guarantor
shall not be obligated to provide such List of Holders at any time the List of
Holders does not differ from the most


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recent List of Holders given to the Preferred Securities Guarantee Trustee by
the Guarantor. The Preferred Securities Guarantee Trustee may destroy any List
of Holders previously given to it on receipt of a new List of Holders.

          (b) The Preferred Securities Guarantee Trustee shall comply with the
obligations set forth under Sections 311(a), 311(b) and Section 312(b) of the
Trust Indenture Act.

         SECTION 2.03. Reports by the Preferred Securities Guarantee Trustee.
Within 60 days after September 1 of each year, commencing September 1, 1999, the
Preferred Securities Guarantee Trustee shall provide to the Holders of the
Preferred Securities such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by Section 313 of
the Trust Indenture Act. The Preferred Securities Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.

         SECTION 2.04. Periodic Reports to Preferred Securities Guarantee
Trustee. The Guarantor shall provide to the Preferred Securities Guarantee
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act. Delivery of such
reports, information and documents to the Preferred Securities Guarantee Trustee
is for informational purposes only and the Preferred Securities Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Guarantor's compliance with any of its covenants
hereunder (as to which the Preferred Securities Guarantee Trustee is entitled to
rely exclusively on Officers' Certificates).

         SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Preferred Securities Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.

         SECTION 2.06. Events of Default; Waiver. The Holders of a Majority in
Liquidation Amount of Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default and
its consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured,


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for every purpose of this Preferred Securities Guarantee, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.

         SECTION 2.07. Event of Default; Notice. (a) The Preferred Securities
Guarantee Trustee shall, within 90 days after the occurrence of a default with
respect to this Preferred Securities Guarantee, mail by first class postage
prepaid, to all Holders of the Preferred Securities, notices of all defaults
actually known to a Responsible Officer of the Preferred Securities Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, except in the case of default in the payment of any Guarantee
Payment, the Preferred Securities Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors and/or Responsible Officers of the
Preferred Securities Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Preferred
Securities.

          (b) The Preferred Securities Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Preferred Securities Guarantee
Trustee shall have received written notice or a Responsible Officer of the
Preferred Securities Guarantee Trustee shall have obtained actual knowledge of
such Event of Default.

         SECTION 2.08. Conflicting Interests. The Indenture shall be deemed to
be specifically described in this Preferred Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.



                                    ARTICLE 3
       POWERS, DUTIES AND RIGHTS OF PREFERRED SECURITIES GUARANTEE TRUSTEE

         SECTION 3.01. Powers and Duties of the Preferred Securities Guarantee
Trustee. (a) This Preferred Securities Guarantee shall be held by the Preferred
Securities Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Securities Guarantee Trustee shall not transfer
this Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.04(b) or to a
Successor Preferred Securities Guarantee Trustee on acceptance by such Successor
Preferred Securities Guarantee Trustee of its appointment to act as Successor
Preferred Securities Guarantee Trustee. The right, title and interest of


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the Preferred Securities Guarantee Trustee shall automatically vest in any
Successor Preferred Securities Guarantee Trustee, and such vesting and
succession of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor
Preferred Securities Guarantee Trustee.

          (b) If an Event of Default actually known to a Responsible Officer of
the Preferred Securities Guarantee Trustee has occurred and is continuing, the
Preferred Securities Guarantee Trustee shall enforce this Preferred Securities
Guarantee for the benefit of the Holders of the Preferred Securities. In such
event, any moneys collected shall first be paid to the Preferred Securities
Guarantee Trustee for amounts due under Section 8.03 and then to the Holders of
the Preferred Securities.

          (c) The Preferred Securities Guarantee Trustee, before the occurrence
of any Event of Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Preferred Securities Guarantee, and no implied covenants shall
be read into this Preferred Securities Guarantee against the Preferred
Securities Guarantee Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.06) and is actually known to a
Responsible Officer of the Preferred Securities Guarantee Trustee, the Preferred
Securities Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Preferred Securities Guarantee, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.

          (d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Securities Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, its own bad
faith or its own willful misconduct, except that:

              (i) prior to the occurrence of any Event of Default and after the
         curing or waiving of all such Events of Default that may have occurred:

                       (A) the duties and obligations of the Preferred
                  Securities Guarantee Trustee shall be determined solely by the
                  express provisions of this Preferred Securities Guarantee, and
                  the Preferred Securities Guarantee Trustee shall not be liable
                  except for the performance of such duties and obligations as
                  are specifically set forth in this Preferred Securities
                  Guarantee, and no implied covenants or obligations shall be
                  read into this Preferred Securities Guarantee against the
                  Preferred Securities Guarantee Trustee; and


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<PAGE>   13
                       (B) in the absence of bad faith on the part of the
                  Preferred Securities Guarantee Trustee, the Preferred
                  Securities Guarantee Trustee may conclusively rely, as to the
                  truth of the statements and the correctness of the opinions
                  expressed therein, upon any certificates or opinions furnished
                  to the Preferred Securities Guarantee Trustee and conforming
                  to the requirements of this Preferred Securities Guarantee;
                  provided, however, that in the case of any such certificates
                  or opinions that by any provision hereof are specifically
                  required to be furnished to the Preferred Securities Guarantee
                  Trustee, the Preferred Securities Guarantee Trustee shall be
                  under a duty to examine the same to determine whether or not
                  they conform to the requirements of this Preferred Securities
                  Guarantee (but shall not be required to confirm or investigate
                  the accuracy of mathematical calculations or other facts
                  stated therein);

                  (ii) the Preferred Securities Guarantee Trustee shall not be
         liable for any error of judgment made in good faith by a Responsible
         Officer of the Preferred Securities Guarantee Trustee, unless it shall
         be proved that the Preferred Securities Guarantee Trustee was negligent
         in ascertaining the pertinent facts upon which such judgment was made;

                  (iii) the Preferred Securities Guarantee Trustee shall not be
         liable with respect to any action taken or omitted to be taken by it in
         good faith in accordance with the direction of the Holders of a
         Majority in Liquidation Amount of the Preferred Securities relating to
         the time, method and place of conducting any proceeding for any remedy
         available to the Preferred Securities Guarantee Trustee, or exercising
         any trust or power conferred upon the Preferred Securities Guarantee
         Trustee under this Preferred Securities Guarantee; and

                  (iv) no provision of this Preferred Securities Guarantee shall
         require the Preferred Securities Guarantee Trustee to expend or risk
         its own funds or otherwise incur personal financial liability in the
         performance of any of its duties or in the exercise of any of its
         rights or powers, if the Preferred Securities Guarantee Trustee shall
         have reasonable grounds for believing that the repayment of such funds
         or liability is not reasonably assured to it under the terms of this
         Preferred Securities Guarantee or indemnity reasonably satisfactory to
         the Preferred Securities Guarantee Trustee against such risk or
         liability is not reasonably assured to it.

         SECTION 3.02. Certain Rights of Preferred Securities Guarantee Trustee.


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<PAGE>   14
         (a) Subject to the provisions of Section 3.01:

                  (i) The Preferred Securities Guarantee Trustee may
         conclusively rely and shall be fully protected in acting or refraining
         from acting upon any resolution, certificate, statement, instrument,
         opinion, report, notice, request, direction, consent, order, bond,
         debenture, note, other evidence of indebtedness or other paper or
         document believed by it to be genuine and to have been signed, sent or
         presented by the proper party or parties.

                  (ii) Any direction or act of the Guarantor contemplated by
         this Preferred Securities Guarantee may be sufficiently evidenced by an
         Officers' Certificate.

                  (iii) Whenever, in the administration of this Preferred
         Securities Guarantee, the Preferred Securities Guarantee Trustee shall
         deem it desirable that a matter be proved or established before taking,
         suffering or omitting any action hereunder, the Preferred Securities
         Guarantee Trustee (unless other evidence is herein specifically
         prescribed) may, in the absence of bad faith on its part, request and
         conclusively rely upon an Officers' Certificate which, upon receipt of
         such request, shall be promptly delivered by the Guarantor.

                  (iv) The Preferred Securities Guarantee Trustee shall have no
         duty to see to any recording, filing or registration of any instrument
         (including any financing or any continuation statement or any filing
         under tax or securities laws) or any re-recording, refiling or
         registration thereof.

                  (v) The Preferred Securities Guarantee Trustee may consult
         with counsel or other experts of its selection, and the advice or
         opinion of such counsel and experts with respect to legal matters or
         advice within the scope of such experts' area of expertise shall be
         full and complete authorization and protection in respect of any action
         taken, suffered or omitted by it hereunder in good faith and in
         accordance with such advice or opinion. Such counsel may be counsel to
         the Guarantor or any of its Affiliates and may include any of its
         employees. The Preferred Securities Guarantee Trustee shall have the
         right at any time to seek instructions concerning the administration of
         this Preferred Securities Guarantee from any court of competent
         jurisdiction.

                  (vi) The Preferred Securities Guarantee Trustee shall be under
         no obligation to exercise any of the rights or powers vested in it by
         this Preferred Securities Guarantee at the request or direction of any
         Holder, unless such Holder shall have provided to the Preferred
         Securities


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<PAGE>   15
         Guarantee Trustee such security and indemnity, reasonably satisfactory
         to the Preferred Securities Guarantee Trustee, against the costs,
         expenses (including reasonable attorneys' fees and expenses and the
         expenses of the Preferred Securities Guarantee Trustee's agents,
         nominees or custodians) and liabilities that might be incurred by it in
         complying with such request or direction, including such reasonable
         advances as may be requested by the Preferred Securities Guarantee
         Trustee; provided that, nothing contained in this Section 3.02(a)(vi)
         shall be taken to relieve the Preferred Securities Guarantee Trustee,
         upon the occurrence of an Event of Default, of its obligation to
         exercise the rights and powers vested in it by the terms of this
         Preferred Securities Guarantee.

                  (vii) The Preferred Securities Guarantee Trustee shall not be
         bound to make any investigation into the facts or matters stated in any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, direction, consent, order, bond, debenture, note,
         other evidence of indebtedness or other paper or document, but the
         Preferred Securities Guarantee Trustee, in its discretion, may make
         such further inquiry or investigation into such facts or matters as it
         may see fit.

                  (viii) The Preferred Securities Guarantee Trustee may execute
         any of the trusts or powers hereunder or perform any duties hereunder
         either directly or by or through agents, nominees, custodians or
         attorneys, and the Preferred Securities Guarantee Trustee shall not be
         responsible for any misconduct or negligence on the part of any agent
         or attorney appointed with due care by it hereunder.

                  (ix) Any action taken by the Preferred Securities Guarantee
         Trustee or its agents hereunder shall bind the Holders of the Preferred
         Securities, and the signature of the Preferred Securities Guarantee
         Trustee or its agents alone shall be sufficient and effective to
         perform any such action and no third party shall be required to inquire
         as to the authority of the Preferred Securities Guarantee Trustee to so
         act or as to its compliance with any of the terms and provisions of
         this Preferred Securities Guarantee, both of which shall be
         conclusively evidenced by the Preferred Securities Guarantee Trustee's
         or its agent's taking such action.

                  (x) Whenever in the administration of this Preferred
         Securities Guarantee the Preferred Securities Guarantee Trustee shall
         deem it desirable to receive instructions with respect to enforcing any
         remedy or right or taking any other action hereunder, the Preferred
         Securities Guarantee Trustee (A) may request instructions from the
         Holders of a Majority in Liquidation Amount of the Preferred
         Securities, (B) may


                                       12
<PAGE>   16
         refrain from enforcing such remedy or right or taking such other action
         until such instructions are received, and (C) shall be protected in
         conclusively relying on or acting in accordance with such instructions.

                  (xi) Except as otherwise expressly provided by this Preferred
         Securities Guarantee, the Preferred Securities Guarantee Trustee shall
         not be under any obligation to take any action that is discretionary
         under the provisions of this Preferred Securities Guarantee Agreement.

                  (xii) The Preferred Securities Guarantee Trustee shall not be
         liable for any action taken, suffered, or omitted to be taken by it in
         good faith, without negligence, and reasonably believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Preferred Securities Guarantee.

          (b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Securities Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Preferred Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Preferred Securities Guarantee
Trustee shall be construed to be a duty.

         SECTION 3.03. Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee. The recitals contained in this Preferred Securities
Guarantee shall be taken as the statements of the Guarantor, and the Preferred
Securities Guarantee Trustee does not assume any responsibility for their
correctness. The Preferred Securities Guarantee Trustee makes no representation
as to the validity or sufficiency of this Preferred Securities Guarantee.



                                    ARTICLE 4
                     PREFERRED SECURITIES GUARANTEE TRUSTEE

         SECTION 4.01. Preferred Securities Guarantee Trustee; Eligibility. (a)
There shall at all times be a Preferred Securities Guarantee Trustee which
shall:

                  (i) not be an Affiliate of the Guarantor; and


                                       13
<PAGE>   17
                  (ii) be a corporation organized and doing business under the
         laws of the United States of America or any State or Territory thereof
         or of the District of Columbia, or a corporation or Person permitted by
         the Securities and Exchange Commission to act as an institutional
         trustee under the Trust Indenture Act, authorized under such laws to
         exercise corporate trust powers, having a combined capital and surplus
         of at least $50,000,000, and subject to supervision or examination by
         Federal, State, Territorial or District of Columbia authority. If such
         corporation publishes reports of condition at least annually, pursuant
         to law or to the requirements of the supervising or examining authority
         referred to above, then, for the purposes of this Section 4.01(a)(ii),
         the combined capital and surplus of such corporation shall be deemed to
         be its combined capital and surplus as set forth in its most recent
         report of condition so published.

          (b) If at any time the Preferred Securities Guarantee Trustee shall
cease to be eligible to so act under Section 4.01(a), the Preferred Securities
Guarantee Trustee shall immediately resign in the manner and with the effect set
out in Section 310(b) of the Trust Indenture.

          (c) If the Preferred Securities Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Securities Guarantee Trustee and Guarantor shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

         SECTION 4.02.  Appointment, Removal and Resignation of Preferred
Securities Guarantee Trustee.

          (a) Subject to Section 4.02, the Preferred Securities Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor
except during the occurrence and continuance of an Event of Default.

          (b) The Preferred Securities Guarantee Trustee shall not be removed in
accordance with Section 4.02(a) until a Successor Preferred Securities Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Preferred Securities Guarantee Trustee and
delivered to the Guarantor.

          (c) The Preferred Securities Guarantee Trustee shall hold office until
a Successor Preferred Securities Guarantee Trustee shall have been appointed or
until its removal or resignation. The Preferred Securities Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Securities Guarantee Trustee and
delivered to the Guarantor, which resignation shall not take effect until a


                                       14
<PAGE>   18
Successor Preferred Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Preferred Securities Guarantee Trustee and delivered to the Guarantor and the
resigning Preferred Securities Guarantee Trustee.

          (d) If no Successor Preferred Securities Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.02 within
60 days after delivery of an instrument of removal or resignation, the Preferred
Securities Guarantee Trustee resigning or being removed may petition any court
of competent jurisdiction for appointment of a Successor Preferred Securities
Guarantee Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Preferred Securities Guarantee
Trustee.

          (e) No Preferred Securities Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Preferred Securities Guarantee
Trustee.

          (f) Upon termination of this Preferred Securities Guarantee or removal
or resignation of the Preferred Securities Guarantee Trustee pursuant to this
Section 4.02, the Guarantor shall pay to the Preferred Securities Guarantee
Trustee all amounts due to the Preferred Securities Guarantee Trustee accrued to
the date of such termination, removal or resignation.



                                    ARTICLE 5
                                    GUARANTEE

         SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.

         SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of this Preferred Securities Guarantee and of any liability
to which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.


                                       15
<PAGE>   19
         SECTION 5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Preferred Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:

          (a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;

          (b) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;

          (c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;

          (d) any invalidity of, or defect or deficiency in, the Preferred
Securities;

          (e) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or

          (f) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor; it being the intent of
this Section 5.03 that the obligations of the Guarantor with respect to the
Guarantee Payments shall be absolute and unconditional under any and all
circumstances. There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

         SECTION 5.04. Rights of Holders. (a) The Holders of a Majority in
Liquidation Amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Preferred Securities Guarantee Trustee in respect of this Preferred
Securities Guarantee or exercising any trust or power conferred upon the
Preferred Securities Guarantee Trustee under this Preferred Securities
Guarantee.

          (b) If the Preferred Securities Guarantee Trustee fails to enforce
this Preferred Securities Guarantee, any Holder of Preferred Securities may
institute a legal proceeding directly against the Guarantor to enforce the
rights of such Holder under this Preferred Securities Guarantee, without first
instituting a legal


                                       16
<PAGE>   20
proceeding against the Issuer, the Preferred Securities Guarantee Trustee or any
other person or entity. The Guarantor waives any right or remedy to require that
any action be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.

         Notwithstanding the foregoing, if the Guarantor has failed to make a
required Guarantee Payment, a Holder of Preferred Securities may directly
institute a proceeding against the Guarantor for enforcement of this Preferred
Securities Guarantee for such Guarantee Payment.

         SECTION 5.05.  Guarantee of Payment.  This Preferred Securities
Guarantee creates a guarantee of payment and not of collection.

         SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders of Preferred Securities against the Issuer in respect
of any amounts paid to such Holders by the Guarantor under this Preferred
Securities Guarantee; provided, however, that the Guarantor shall not (except to
the extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Preferred Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Preferred Securities Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.

         SECTION 5.07. Independent Obligations. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Preferred Securities Guarantee notwithstanding the occurrence of
any event referred to in subsections (a) through (f), inclusive, of Section 5.03
hereof.



                                    ARTICLE 6
                    LIMITATION OF TRANSACTIONS; SUBORDINATION

         SECTION 6.01. Limitation of Transactions. So long as any Preferred
Securities remain outstanding, the Guarantor shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation


                                       17
<PAGE>   21
payment with respect to, any of the Guarantor's capital stock (which includes
common and preferred stock), (ii) make any payment of principal, interest or
premium, if any, on or repay or repurchase or redeem any debt securities of the
Guarantor (including any Other Debentures) that rank pari passu with or junior
in right of payment to the Debentures or (iii) make any guarantee payments with
respect to any guarantee by the Guarantor of the debt securities of any
subsidiary of the Guarantor (including Other Guarantees) if such guarantee ranks
pari passu or junior in right of payment to the Debentures (other than (a)
dividends or distributions in shares of, or options, warrants or rights to
subscribe for or purchase shares of, common stock of the Guarantor; (b) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto; (c)
payments under the Preferred Securities Guarantee; (d) as a result of a
reclassification of the Guarantor's capital stock or the exchange or the
conversion of one class or series of the Guarantor's capital stock for another
class or series of the Guarantor's capital stock; (e) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged; and (f) purchases of common stock related to the issuance of common
stock or rights under any of the Guarantor's benefit and compensation plans for
its directors, officers or employees or any of the Guarantor's dividend
reinvestment plans) if at such time (i) there shall have occurred any event of
which the Guarantor has actual knowledge that is, or with the giving of notice
or the lapse of time, or both, would be an Event of Default or (ii) the
Guarantor shall be in default with respect to its payment obligations under this
Preferred Securities Guarantee.

         SECTION 6.02. Ranking. This Preferred Securities Guarantee will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor except any liabilities (including the Other Guarantees, the Common
Securities Guarantee and the Other Common Securities Guarantees) that may be
pari passu or junior expressly by their terms, and (ii) senior to the
Guarantor's capital stock now or hereafter issued by the Guarantor, if any, and
with any guarantee now or hereafter entered into by the Guarantor in respect of
any preferred or preference stock of any Affiliate of the Guarantor. The
foregoing subordination shall not apply to amounts payable under Article 8.


                                       18
<PAGE>   22
                                    ARTICLE 7
                                   TERMINATION

         SECTION 7.01. Termination. This Preferred Securities Guarantee shall
terminate upon (i) full payment of the Redemption Price of all Preferred
Securities, or (ii) liquidation of the Issuer, the full payment of the amounts
payable in accordance with the Trust Agreement or the distribution of the
Debentures to the Holders of all of the Preferred Securities. Notwithstanding
the foregoing, this Preferred Securities Guarantee will continue to be effective
or will be reinstated, as the case may be, if at any time any Holder of
Preferred Securities must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities Guarantee.



                                    ARTICLE 8
                         EXCULPATION AND INDEMNIFICATION

         SECTION 8.01. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage, liability, expense or claim incurred by
reason of any act or omission performed or omitted by such Indemnified Person in
good faith in accordance with this Preferred Securities Guarantee and in a
manner that such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Preferred
Securities Guarantee or by law, except that this provision shall not be deemed
to modify Section 3.01(d).

          (b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.

         SECTION 8.02. Indemnification. The Guarantor agrees to indemnify each
Indemnified Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or


                                       19
<PAGE>   23
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against, or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The obligation
to indemnify as set forth in this Section 8.02 shall survive the termination of
this Preferred Securities Guarantee or the resignation or removal of the
Preferred Securities Guarantee Trustee.

         The Preferred Securities Guarantee Trustee will not claim or exact any
lien or charge on any Guarantee Payments as a result of any amount due to it
under this Preferred Securities Guarantee.



                                    ARTICLE 9
                                  COMPENSATION

         SECTION 9.01.  Compensation.  The Guarantor agrees:

          (a) to pay to the Preferred Securities Guarantee Trustee from time to
time such compensation as shall be agreed in writing between the Company and the
Preferred Securities Guarantee Trustee for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust); and

          (b) to reimburse the Preferred Securities Guarantee Trustee upon its
request for reasonable expenses, disbursements and advances incurred or made by
the Preferred Securities Guarantee Trustee in accordance with any provision of
this Preferred Securities Guarantee (including the reasonable compensation and
the expenses and advances of its agents and counsel), except any such expense or
advance as may be attributable to its negligence or bad faith.

          (c) Subject to Section 8.02, the Preferred Securities Guarantee
Trustee shall have a claim and lien prior to the Preferred Securities holders as
to all property and funds held by it hereunder for any amount owing to it or any
predecessor Preferred Securities Guarantee Trustee for fees and expenses
pursuant to this Article.


                                       20
<PAGE>   24
                                   ARTICLE 10
                                  MISCELLANEOUS

         SECTION 10.01. Successors and Assigns. All guarantees and agreements
contained in this Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding.

         Except in connection with any merger or consolidation of the Guarantor
with or into another entity permitted by the Indenture or any sale, transfer or
lease of the Guarantor's assets to another entity permitted by the Indenture,
the Guarantor may not assign its rights or delegate its obligations under this
Preferred Securities Guarantee.

         SECTION 10.02. Amendments. Except with respect to any changes that do
not materially adversely affect the rights of Holders (in which case no approval
of Holders will be required), this Preferred Securities Guarantee may only be
amended with the prior approval of the Holders of a Majority in Liquidation
Amount of the outstanding Preferred Securities (including the amount payable on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined). The provisions of
Section 12.2 of the Trust Agreement with respect to meetings of Holders of the
Securities apply to the giving of such approval. Except in connection with any
permitted merger or consolidation of the Guarantor with or into another entity
or any permitted sale, transfer or lease of the Guarantor's assets to another
entity (as described in Article 5 of the Indenture), the Guarantor may not
assign its rights or delegate its obligations under the Common Securities
Guarantee without the prior approval of the Holders of at least a Majority in
Liquidation Amount of the Common Securities then outstanding.

         SECTION 10.03. Notices. All notices provided for in this Preferred
Securities Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by first class mail, as
follows:

          (a) If given to the Issuer, in care of the Administrative Trustee at
the Issuer's mailing address set forth below (or such other address as the
Issuer may give notice of to the Holders of the Common Securities):

                                    Hercules Trust V
                                    c/o Hercules Incorporated
                                    Hercules Plaza
                                    1313 North Market Street


                                       21
<PAGE>   25
                                    Wilmington, Delaware 19894-0001
                                    Attention: Israel J. Floyd Esq.
                                    Administrative Trustee
                                    Telecopy: (302) 594-7252

          (b) If given to the Preferred Securities Guarantee Trustee, at the
Preferred Securities Guarantee Trustee's mailing address set forth below (or
such other address as the Preferred Securities Guarantee Trustee may give notice
of to the Holders of the Preferred Securities):

                                    The Chase Manhattan Bank
                                    One Liberty Place, 52nd Floor
                                    1650 Market Street
                                    Philadelphia, Pennsylvania  19103
                                    Attention:  Corporate Trust Department
                                    Telecopy:   (215) 972-8372

          (c) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):

                                    Hercules Incorporated
                                    Hercules Plaza
                                    1313 North Market Street
                                    Wilmington, Delaware 19894-0001
                                    Attention:   Vice President and Treasurer
                                    Telecopy: (302) 594-5210

                                    Hercules Incorporated
                                    Hercules Plaza
                                    1313 North Market Street
                                    Wilmington, Delaware 19894-0001
                                    Attention:   Corporate Secretary
                                    Telecopy:  (302) 594-7252

          (d) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.

         All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice


                                       22
<PAGE>   26
or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.

         SECTION 10.04. Benefit. This Preferred Securities Guarantee is solely
for the benefit of the Holders of the Preferred Securities and, subject to
Section 3.01(a), is not separately transferable from the Preferred Securities.

         SECTION 10.05.  Governing Law.

         THIS PREFERRED SECURITIES GUARANTEE AND THE RIGHTS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED
BY SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.


                                       23
<PAGE>   27
         THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.

                                          HERCULES INCORPORATED,
                                          as Guarantor


                                          By: /s/ R. K Elliott                 
                                               Name: R. Keith Elliott
                                               Title: Chairman and Co-Chief
                                                          Executive Officer


                                          THE CHASE MANHATTAN BANK,
                                          as Preferred Securities Guarantee
                                          Trustee


                                          By:     /s/ J D Heaney              
                                               Name: James D. Heaney
                                               Title: Vice President


                                        1