Document:

exv4w4

Exhibit 4.4

EXECUTION VERSION

 

REGISTRATION RIGHTS AGREEMENT

Dated as of October 20, 2009

By and Among

Hercules Offshore, Inc.,

the Guarantors named herein

and

UBS SECURITIES LLC,

BANC OF AMERICA SECURITIES LLC,

DEUTSCHE BANK SECURITIES INC.,

MORGAN STANLEY & CO. INCORPORATED,

CAPITAL ONE SOUTHCOAST, INC.,

CREDIT SUISSE SECURITIES (USA) LLC,

GOLDMAN, SACHS & CO.,

MIZUHO SECURITIES USA INC.,

COMERICA SECURITIES, INC.,

FORTIS SECURITIES LLC

and

NATIXIS BLEICHROEDER INC.,

as Initial Purchasers

10.50% Senior Secured Notes due 2017

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	1. Definitions
	 	 	1	 
	 
	 	 	 	 
	2. Exchange Offer
	 	 	4	 
	 
	 	 	 	 
	3. Shelf Registration
	 	 	7	 
	 
	 	 	 	 
	4. Liquidated Damages
	 	 	8	 
	 
	 	 	 	 
	5. Registration Procedures
	 	 	9	 
	 
	 	 	 	 
	6. Registration Expenses
	 	 	16	 
	 
	 	 	 	 
	7. Indemnification
	 	 	17	 
	 
	 	 	 	 
	8. Rules 144 and 144A
	 	 	20	 
	 
	 	 	 	 
	9. Underwritten Registrations
	 	 	20	 
	 
	 	 	 	 
	10. Miscellaneous
	 	 	20	 
	 
	 	 	 	 
	(a) No Inconsistent Agreements
	 	 	20	 
	(b) Adjustments Affecting Registrable Notes
	 	 	20	 
	(c) Amendments and Waivers
	 	 	20	 
	(d) Notices
	 	 	21	 
	(e) Successors and Assigns
	 	 	22	 
	(f) Counterparts
	 	 	22	 
	(g) Headings
	 	 	22	 
	(h) Governing Law
	 	 	22	 
	(i) Severability
	 	 	22	 
	(j) Securities Held by the Issuers or Their Affiliates
	 	 	22	 
	(k) Third-Party Beneficiaries
	 	 	22	 
	(l) Attorneys’ Fees
	 	 	22	 
	(m) Entire Agreement
	 	 	23	 
	 
	 	 	 	 
	SIGNATURES
	 	 	S-1	 

-i-

 

REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (this “Agreement”) is dated as of October 20, 2009,
by and among Hercules Offshore, Inc. a Delaware corporation (the “Company”), and each of
the Guarantors (as defined herein) (the Company and the Guarantors are referred to collectively
herein as the “Issuers”), on the one hand, and UBS Securities LLC, Banc of America
Securities LLC, Deutsche Bank Securities Inc. and Morgan Stanley & Co. Incorporated (the
“Representatives”) and Capital One Southcoast, Inc., Credit Suisse Securities (USA) LLC,
Goldman, Sachs & Co., Mizuho Securities USA Inc., Comerica Securities, Inc., Fortis Securities LLC
and Natixis Bleichroeder Inc. (together with the Representatives, the “Initial
Purchasers”), on the other hand.

          This Agreement is entered into in connection with the Purchase Agreement, dated as of October
8, 2009, by and among the Issuers and the Initial Purchasers (the “Purchase Agreement”),
relating to the offering of $300,000,000 aggregate principal amount of 10.50% Senior Secured Notes
due 2017 of the Company (including the guarantees thereof by the Guarantors, the “Notes”).
The execution and delivery of this Agreement is a condition to the Initial Purchasers’ obligation
to purchase the Notes under the Purchase Agreement.

          The parties hereby agree as follows:

     Section 1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:

          “action” shall have the meaning set forth in Section 7(c) hereof.

          “Advice” shall have the meaning set forth in Section 5 hereof.

          “Affiliate” of any specified Person shall mean any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with, such specified
Person. For purposes of this definition, control of a Person shall mean the power, direct or
indirect, to direct or cause the direction of the management and policies of such Person whether by
contract or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative
to the foregoing.

          “Agreement” shall have the meaning set forth in the first introductory paragraph
hereto.

          “Applicable Period” shall have the meaning set forth in Section 2(b) hereof.

          “Board of Directors” shall have the meaning set forth in Section 5 hereof.

          “Business Day” shall mean a day that is not a Legal Holiday.

          “Commission” shall mean the U.S. Securities and Exchange Commission.

          “Company” shall have the meaning set forth in the introductory paragraph hereto and
shall also include the Company’s permitted successors and assigns.

          “Damages Payment Date” shall have the meaning set forth in Section 4(b) hereof.

          “day” shall mean a calendar day.

 

 

          “Delay Period” shall have the meaning set forth in Section 5 hereof.

          “Effectiveness Period” shall have the meaning set forth in Section 3(b) hereof.

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.

          “Exchange Date” shall have the meaning set forth in Section 2(a) hereof.

          “Exchange Notes” shall have the meaning set forth in Section 2(a) hereof.

          “Exchange Offer” shall have the meaning set forth in Section 2(a) hereof.

          “Exchange Offer Registration Statement” shall have the meaning set forth in Section
2(a) hereof.

          “FINRA” shall have the meaning set forth in Section 5(s) hereof.

          “Free Writing Prospectus” shall mean each free writing prospectus (as defined in Rule
405 under the Securities Act) prepared by or on behalf of the Company or used by the Company in
connection with the sale of the Notes or the Exchange Notes.

          “Freely Tradable” shall mean, with respect to any Note, a Note (i) that, at the time
of determination, would be permitted to be sold to the public without limitation in accordance with
Rule 144 by a Person who is not an Affiliate of the Company, (ii) with respect to which the Company
has enabled the applicable Holder to have any restrictive legends relating to the Securities Act
removed and (iii) that bears an unrestricted CUSIP number.

          “Guarantors” means each subsidiary of the Company listed on the signature page to this
Agreement and each Person who executes and delivers a counterpart of this Agreement after the date
hereof pursuant to Section 11(e) hereof.

          “Holder” shall mean any holder of a Registrable Note or Registrable Notes.

          “Indenture” shall mean the Indenture, dated as of October 20, 2009, by and among the
Issuers and US Bank National Association as trustee, pursuant to which the Notes are being issued,
as amended or supplemented from time to time in accordance with the terms thereof.

          “Initial Purchasers” shall have the meaning set forth in the first introductory
paragraph hereof.

          “Inspectors” shall have the meaning set forth in Section 5(n) hereof.

          “Issue Date” shall mean October 20, 2009, the date of original issuance of the Notes.

          “Issuers” shall have the meaning set forth in the first introductory paragraph hereto
and shall also include the Issuers’ permitted successors and assigns.

          “Legal Holiday” shall mean a Saturday, a Sunday or a day on which banking institutions
in New York, New York are required by law, regulation or executive order to remain closed.

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          “Liquidated Damages” shall have the meaning set forth in Section 4(a) hereof.

          “Losses” shall have the meaning set forth in Section 7(a) hereof.

          “Notes” shall have the meaning set forth in the second introductory paragraph hereto.

          “Participant” shall have the meaning set forth in Section 7(a) hereof.

          “Participating Broker-Dealer” shall have the meaning set forth in Section 2(b) hereof.

          “Person” shall mean an individual, trustee, corporation, partnership, joint venture
association, joint stock company, trust, unincorporated limited liability company, government or
any agency or political subdivision thereof or any other entity.

          “Private Exchange” shall have the meaning set forth in Section 2(b) hereof.

          “Private Exchange Notes” shall have the meaning set forth in Section 2(b) hereof.

          “Prospectus” shall mean the prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a prospectus that includes
any information previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such Prospectus.

          “Purchase Agreement” shall have the meaning set forth in the second introductory
paragraph hereof.

          “Records” shall have the meaning set forth in Section 5(n) hereof.

          “Registrable Notes” shall mean each Note upon its original issuance and at all times
subsequent thereto, each Exchange Note as to which Section 2(c)(iii) hereof is applicable upon
original issuance and at all times subsequent thereto and each Private Exchange Note upon original
issuance thereof and at all times subsequent thereto, in each case until (i) a Registration
Statement (other than, with respect to any Exchange Note as to which Section 2(c)(iii) hereof is
applicable, the Exchange Offer Registration Statement) covering such Note, Exchange Note or Private
Exchange Note has been declared effective by the Commission and such Note, Exchange Note or such
Private Exchange Note, as the case may be, has been disposed of in accordance with such effective
Registration Statement, (ii) such Note has been exchanged pursuant to the Exchange Offer for an
Exchange Note or Exchange Notes that may be resold without restriction under state and federal
securities laws, (iii) such Note, Exchange Note or Private Exchange Note, as the case may be,
ceases to be outstanding for purposes of the Indenture or (iv) such Note is Freely Tradable.

          “Registration Default” shall have the meaning set forth in Section 4(a) hereof.

          “Registration Statement” shall mean any appropriate registration statement of the
Issuers covering any of the Registrable Notes filed with the Commission under the Securities Act,
and all amendments and supplements to any such Registration Statement, including post-effective
amendments,

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in each case including the Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.

          “Representatives” shall have the meaning set forth in the first introductory paragraph
hereto.

          “Requesting Participating Broker-Dealer” shall have the meaning set forth in Section
2(b) hereof.

          “Rule 144” shall mean Rule 144 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter
adopted by the Commission providing for offers and sales of securities made in compliance therewith
resulting in offers and sales by subsequent holders that are not Affiliates of an issuer of such
securities being free of the registration and prospectus delivery requirements of the Securities
Act.

          “Rule 144A” shall mean Rule 144A promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter
adopted by the Commission.

          “Rule 415” shall mean Rule 415 promulgated under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission.

          “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.

          “Shelf Filing Event” shall have the meaning set forth in Section 2(c) hereof.

          “Shelf Registration” shall have the meaning set forth in Section 3(a) hereof.

          “Shelf Registration Statement” shall mean a Registration Statement filed in connection
with a Shelf Registration.

          “TIA” shall mean the Trust Indenture Act of 1939, as amended.

          “Trustee” shall mean the trustee under the Indenture and the trustee (if any) under
any indenture governing the Exchange Notes and Private Exchange Notes.

          “underwritten registration or underwritten offering” shall mean a registration in
which securities of the Issuers are sold to an underwriter for reoffering to the public.

     Section 2. Exchange Offer

          (a) The Issuers shall (i) file a Registration Statement (the “Exchange Offer Registration
Statement”) with the Commission on an appropriate registration form with respect to a
registered offer (the “Exchange Offer”) to exchange any and all of the Registrable Notes
for a like aggregate principal amount of notes (including the guarantees with respect thereto, the
“Exchange Notes”) that are identical in all material respects to the Notes (except that the
Exchange Notes shall not contain restrictive legends, terms with respect to transfer restrictions
or Liquidated Damages upon a Registration Default), (ii) use their reasonable efforts to cause the
Exchange Offer Registration Statement
to be declared effective under the Securities Act, (iii) upon the Exchange Offer Registration
Statement being declared effective by the

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Commission, offer the Exchange Notes in exchange for
surrender of the Notes, (iv) keep the Exchange Offer open for not less than 20 Business Days (or
longer if required by applicable law) after the date the notice of the Exchange Offer is mailed to
Holders, and (v) use their reasonable efforts to consummate the Exchange Offer within 220 days
after the Issue Date (the “Exchange Date”); provided, however, that,
subject to Section 2(c) and Section 4(a), the Issuers shall not be required to file the Exchange
Offer Registration Statement, commence the Exchange Offer or consummate the Exchange Offer if all
of the Notes held by Holders eligible to participate in such Exchange Offer are Freely Tradable on
the Exchange Date.

          Each Holder that participates in the Exchange Offer will be required to represent to the
Issuers in writing that (i) any Exchange Notes to be received by it will be acquired in the
ordinary course of its business, (ii) it has no arrangement or understanding with any Person to
participate in the distribution (within the meaning of the Securities Act) of the Exchange Notes in
violation of the provisions of the Securities Act, (iii) it is not an affiliate of the Company or
any Guarantor as defined by Rule 405 of the Securities Act, or, if it is an affiliate, it will
comply with the registration and prospectus delivery requirements of the Securities Act to the
extent applicable, (iv) if such Holder is not a broker-dealer, it is not engaged in, and does not
intend to engage in, a distribution of Exchange Notes and (v) if such Holder is a broker-dealer
that will receive Exchange Notes for its own account in exchange for Notes that were acquired as a
result of market-making or other trading activities, it will deliver a prospectus in connection
with any resale of such Exchange Notes.

          (b) The Issuers and the Initial Purchasers acknowledge that the staff of the Commission has
taken the position that any broker-dealer that elects to exchange Notes that were acquired by such
broker-dealer for its own account as a result of market-making or other trading activities for
Exchange Notes in the Exchange Offer (a “Participating Broker-Dealer”) may be deemed to be
an “underwriter” within the meaning of the Securities Act and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such Exchange Notes (other than
a resale of an unsold allotment resulting from the original offering of the Notes).

          The Issuers and the Initial Purchasers also acknowledge that the staff of the Commission has
taken the position that if the Prospectus contained in the Exchange Offer Registration Statement
includes a plan of distribution containing a statement to the above effect and the means by which
Participating Broker-Dealers may resell the Exchange Notes, without naming the Participating
Broker-Dealers or specifying the amount of Exchange Notes owned by them, such Prospectus may be
delivered by Participating Broker-Dealers to satisfy their prospectus delivery obligations under
the Securities Act in connection with resales of Exchange Notes for their own accounts, so long as
the Prospectus otherwise meets the requirements of the Securities Act.

          In light of the foregoing, if requested by a Participating Broker-Dealer (a “Requesting
Participating Broker-Dealer”), the Issuers agree to use their reasonable efforts to keep the
Exchange Offer Registration Statement continuously effective for a period of 180 days after the
date on which the Exchange Registration Statement is declared effective, or such longer period if
extended pursuant to any Delay Period in accordance with the last paragraph of Section 5 hereof
(such period, the “Applicable Period”), or such earlier date as all Requesting
Participating Broker-Dealers shall have notified the Company in writing that such Requesting
Participating Broker-Dealers have resold all Exchange Notes acquired in the Exchange Offer. The
Issuers shall include a plan of distribution in such Exchange Offer Registration Statement that
meets the requirements set forth in the preceding paragraph.

          If, prior to consummation of the Exchange Offer, any Initial Purchaser or any Holder, as the
case may be, holds any Notes acquired by it that have, or that are reasonably likely to be
determined

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to have, the status of an unsold allotment in an initial distribution, or if any Holder
is not entitled to participate in the Exchange Offer, the Issuers upon the request of any such
Initial Purchaser or any such Holder, as the case may be, shall simultaneously with the delivery of
the Exchange Notes in the Exchange Offer, issue and deliver to any such Initial Purchaser or any
such Holder, as the case may be, in exchange (the “Private Exchange”) for such Notes held
by any such Initial Purchaser or any such Holder, as the case may be, a like principal amount of
notes (the “Private Exchange Notes”) of the Issuers that are identical in all material
respects to the Exchange Notes except that the Private Exchange Notes may be subject to
restrictions on transfer and bear a legend to such effect. The Private Exchange Notes shall be
issued pursuant to the same indenture as the Exchange Notes and bear the same CUSIP number as the
Exchange Notes.

          For each Note surrendered in the Exchange Offer, the Holder will receive an Exchange Note
having a principal amount equal to that of the surrendered Note. Interest on each Exchange Note
and Private Exchange Note issued pursuant to the Exchange Offer and in the Private Exchange will
accrue from the last interest payment date on which interest was paid on the Notes surrendered in
exchange therefor or, if no interest has been paid on the Notes, from the Issue Date.

          Upon consummation of the Exchange Offer in accordance with this Section 2, the Issuers shall
have no further registration obligations other than the Issuers’ continuing registration
obligations with respect to (i) Private Exchange Notes, (ii) Exchange Notes held by Participating
Broker-Dealers and (iii) Notes or Exchange Notes as to which clause (c)(iv) of this Section 2
applies.

          In connection with the Exchange Offer, the Issuers shall:

     (1) mail or cause to be mailed to each Holder entitled to participate in the Exchange
Offer a copy of the Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents;

     (2) utilize the services of a depositary for the Exchange Offer with an address in the
Borough of Manhattan, The City of New York;

     (3) permit Holders to withdraw tendered Notes at any time prior to the close of
business, New York time, on the last Business Day on which the Exchange Offer shall remain
open; and

     (4) otherwise comply in all material respects with all applicable laws, rules and
regulations.

          As soon as practicable after the close of the Exchange Offer and the Private Exchange, if any,
the Issuers shall:

     (1) accept for exchange all Notes validly tendered and not validly withdrawn by the
Holders pursuant to the Exchange Offer and the Private Exchange, if any;

     (2) deliver or cause to be delivered to the Trustee for cancelation all Notes so
accepted for exchange; and

     (3) cause the Trustee to authenticate and deliver promptly to each such Holder of
Notes, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal
amount to the Registrable Notes of such Holder so accepted for exchange.

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          The Exchange Offer and the Private Exchange shall not be subject to any conditions, other than
that (i) the Exchange Offer or Private Exchange, as the case may be, does not violate applicable
law or any applicable interpretation of the staff of the Commission, (ii) no action or proceeding
shall have been instituted or threatened in any court or by any governmental agency which might
materially impair the ability of the Issuers to proceed with the Exchange Offer or the Private
Exchange, and no material adverse development shall have occurred in any existing action or
proceeding with respect to the Issuers and (iii) all governmental approvals shall have been
obtained, which approvals the Company deems necessary for the consummation of the Exchange Offer or
Private Exchange.

          The Exchange Notes and the Private Exchange Notes shall be issued under (i) the Indenture or
(ii) an indenture identical in all material respects to the Indenture (in either case, with such
changes as are necessary to comply with any requirements of the Commission to effect or maintain
the qualification thereof under the TIA) and which, in either case, has been qualified under the
TIA and shall provide that (a) the Exchange Notes shall not be subject to the transfer restrictions
set forth in the Indenture and (b) the Private Exchange Notes shall be subject to the transfer
restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the
Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent together on all
matters as one class and that none of the Exchange Notes, the Private Exchange Notes or the Notes
will have the right to vote or consent as a separate class on any matter.

          (c) In the event that (i) the applicable law or the interpretations of the staff of the
Commission do not permit the Issuers to effect the Exchange Offer, (ii) for any reason the Exchange
Offer is not consummated by the Exchange Date and any Notes are not Freely Tradable at any time
thereafter, (iii) any Holder, other than any Initial Purchaser, notifies the Company prior to the
twentieth Business Day following the consummation of the Exchange Offer that it is prohibited by
law or the applicable interpretations of the staff of the Commission from participating in the
Exchange Offer, (iv) in the case of any Holder who participates in the Exchange Offer, such Holder
does not receive Exchange Notes on the date of the exchange that may be sold without restriction
under state and federal securities laws (other than due solely to the status of such Holder as an
affiliate of any Issuer within the meaning of the Securities Act) or (v) any Initial Purchaser so
requests with respect to Notes or Private Exchange Notes that have, or that are reasonably likely
to be determined to have, the status of unsold allotments in an initial distribution (each such
event referred to in clauses (i) through (v) of this sentence, a “Shelf Filing Event”),
then the Issuers shall file a Shelf Registration pursuant to Section 3 hereof.

     Section 3. Shelf Registration

          If at any time a Shelf Filing Event shall occur, then:

          (a) Shelf Registration. The Issuers shall file with the Commission a Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all of the
Registrable Notes not exchanged in the Exchange Offer, Private Exchange Notes and Exchange Notes as
to which Section 2(c)(iv) is applicable (the “Shelf Registration”). The Issuers shall file
with the Commission the Shelf Registration as promptly as practicable. The Shelf Registration
shall be on Form S-1 or another appropriate form permitting registration of such Registrable Notes
for resale by Holders in the manner or manners designated by them (including, without limitation,
one or more underwritten
offerings). The Issuers shall not permit any securities other than the Registrable Notes to
be included in the Shelf Registration.

          (b) The Issuers shall (x) use their reasonable efforts to cause the Shelf Registration to be
declared effective under the Securities Act on or prior to the later of (A) 220 calendar days after
the

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Issue Date and (B) 90 days after the Shelf Registration is required to be filed with the
Commission and (y) keep the Shelf Registration continuously effective under the Securities Act for
the period ending on the date which is two years from the Issue Date, subject to extension pursuant
to the penultimate paragraph of Section 5 hereof (the “Effectiveness Period”), or such
shorter period ending when all Registrable Notes covered by the Shelf Registration have been sold
in the manner set forth and as contemplated in the Shelf Registration or become Freely Tradable;
provided, however, that (i) the Effectiveness Period in respect of the Shelf
Registration shall be extended to the extent required to permit dealers to comply with the
applicable prospectus delivery requirements of Rule 174 under the Securities Act and as otherwise
provided herein and (ii) the Company may suspend the effectiveness of the Shelf Registration
Statement by written notice to the Holders solely as a result of the filing of a post-effective
amendment to the Shelf Registration Statement to incorporate annual audited financial information
with respect to the Company where such post-effective amendment is not yet effective and needs to
be declared effective to permit Holders to use the related Prospectus.

          (c) Supplements and Amendments. The Issuers agree to supplement or make amendments to
the Shelf Registration Statement as and when required by the rules, regulations or instructions
applicable to the registration form used for such Shelf Registration Statement or by the Securities
Act or rules and regulations thereunder for shelf registration, or if reasonably requested by the
Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Shelf
Registration Statement or by any underwriter of such Registrable Notes.

     Section 4. Liquidated Damages

          (a) The Issuers and the Initial Purchasers agree that the Holders will suffer damages if the
Issuers fail to fulfill their obligations under Section 2 or Section 3 hereof and that it would not
be feasible to ascertain the extent of such damages with precision. Accordingly, the Issuers agree
that if the Notes are not Freely Tradable at any time on or after the Exchange Date and either:

     (i) the Exchange Offer is not consummated on or prior to the Exchange Date, or, if that day
is not a Business Day, the next day that is a Business Day; or

     (ii) the Shelf Registration Statement is required to be filed but is not declared effective
by the later of 220 calendar days after the Issue Date or 90 days after the Shelf
Registration is required to be filed with the Commission, or, if either such day is not a
Business Day, the next day that is a Business Day or is declared effective by such date but
thereafter ceases to be effective or usable (unless the Shelf Registration ceases to be
effective or usable as specifically permitted by the penultimate paragraph of Section 5
hereof);

(each such event referred to in clauses (i) and (ii) a “Registration Default”), liquidated
damages in the form of additional cash interest (“Liquidated Damages”) will accrue on the
affected Notes and the affected Exchange Notes, as applicable. The rate of Liquidated Damages will
be 0.25% per annum for the first 90-day period immediately following the occurrence of a
Registration Default, increasing by an additional 0.25% per annum with respect to each subsequent
90-day period up to a maximum amount of Liquidated Damages of 1.00% per annum, from and including
the date on which any such Registration
Default shall occur to, but excluding, the earlier of (1) the date on which all Registration
Defaults have been cured or (2) the date on which all the Notes and Exchange Notes otherwise become
Freely Tradable.

Notwithstanding the foregoing, (1) the amount of Liquidated Damages payable shall not increase
because more than one Registration Default has occurred and is pending and (2) a Holder of Notes or
Exchange Notes who is not entitled to the benefits of the Shelf Registration Statement
(i.e., such Holder has not

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elected to include information) shall not be entitled to
Liquidated Damages with respect to a Registration Default that pertains to the Shelf Registration
Statement.

          (b) So long as Notes remain outstanding, the Company shall notify the Trustee within five
Business Days after each and every date on which an event occurs in respect of which Liquidated
Damages is required to be paid. Any amounts of Liquidated Damages due pursuant to clauses (a)(i)
or (a)(ii) of this Section 4 will be payable in cash semi-annually on each October 15 and April 15
(each a “Damages Payment Date”), commencing with the first such date occurring after any
such Liquidated Damages commence to accrue, to Holders to whom regular interest is payable on such
Damages Payment Date with respect to Notes that are Registrable Securities. The amount of
Liquidated Damages for each Registrable Note will be determined by multiplying the applicable rate
of Liquidated Damages by the aggregate principal amount of such Registrable Note outstanding on the
Damages Payment Date following such Registration Default in the case of the first such payment of
Liquidated Damages with respect to a Registration Default (and thereafter at the next succeeding
Damages Payment Date until the cure of such Registration Default), and multiplying the product of
the foregoing by a fraction, the numerator of which is the number of days such Liquidated Damages
rate was applicable during such period (determined on the basis of a 360-day year comprised of
twelve 30-day months and, in the case of a partial month, the actual number of days elapsed), and
the denominator of which is 360.

     Section 5. Registration Procedures.

          In connection with the filing of any Registration Statement or Registration Statements
pursuant to Section 2 or 3 hereof, the Issuers shall effect such registrations to permit the sale
of the securities covered thereby in accordance with the intended method or methods of disposition
thereof, and pursuant thereto and in connection with any Registration Statement filed by the
Issuers hereunder, the Issuers shall:

     (a) Prepare and file with the Commission the Registration Statement or Registration
Statements prescribed by Section 2 or 3 hereof, and use their reasonable efforts to cause
each such Registration Statement to become effective and remain effective as provided
herein; provided, however, that if (1) such filing is pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period
relating thereto, before filing any Registration Statement or Prospectus or any amendments
or supplements thereto, the Issuers shall furnish to and afford the Holders of the
Registrable Notes covered by such Registration Statement or each such Participating
Broker-Dealer, as the case may be, their counsel (if requested by any such person) and the
managing underwriters, if any, a reasonable opportunity to review copies of all such
documents (including copies of any documents to be incorporated by reference therein and all
exhibits thereto) proposed to be filed (in each case at least five Business Days prior to
such filing). The Issuers shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto if the Holders of a majority in aggregate principal
amount of the Registrable Notes covered by such Registration Statement, or any such
Participating Broker-Dealer, as the case may be, their counsel, or the managing
underwriters, if any, shall reasonably object.

     (b) Prepare and file with the Commission such amendments and post-effective amendments
to each Shelf Registration Statement or Exchange Offer Registration Statement, as the case
may be, as may be necessary to keep such Registration Statement continuously effective for
the Effectiveness Period or the Applicable Period, as the case may be; cause the related
Prospectus to be supplemented by any prospectus supplement required by applicable law, and
as

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so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in
force) promulgated under the Securities Act; and comply with the applicable provisions of
the Securities Act and the Exchange Act with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities being sold by a
Participating Broker-Dealer covered by any such Prospectus, in each case, in accordance with
the intended methods of distribution set forth in such Registration Statement or Prospectus,
as so amended or supplemented.

     (c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating thereto
from whom the Company has received written notice that such Broker-Dealer will be a
Participating Broker-Dealer in the applicable Exchange Offer, notify the selling Holders of
Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their
counsel and the managing underwriters, if any, as promptly as possible, and, if requested by
any such Person, confirm such notice in writing, (i) when a Prospectus or any prospectus
supplement or post-effective amendment has been filed, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective under the
Securities Act (including in such notice a written statement that any Holder may, upon
request, obtain, at the sole expense of the Issuers, one conformed copy of such Registration
Statement or post-effective amendment including financial statements and schedules,
documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any preliminary prospectus or
the initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus
is required by the Securities Act to be delivered in connection with sales of the
Registrable Notes or resales of Exchange Notes by Participating Broker-Dealers the
representations and warranties of the Issuers contained in any agreement (including any
underwriting agreement) contemplated by Section 5(m)(i) hereof cease to be true and correct
in all material respects, (iv) of the receipt by any of the Issuers of any notification with
respect to the suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Notes or the Exchange Notes for offer or
sale in any jurisdiction, or the initiation or threatening of any proceeding for such
purpose, (v) of the happening of any event, the existence of any condition or any
information becoming known to any Issuer that makes any statement made in such Registration
Statement or related Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making of any
changes in or amendments or supplements to such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of the Prospectus, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading, and (vi) of the Company’s determination that a post-effective
amendment to a Registration Statement would be appropriate.

     (d) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use their
reasonable efforts to

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prevent the issuance of any order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any of the Registrable
Notes or the Exchange Notes, as the case may be, for sale in any jurisdiction, and, if any
such order is issued, to use their reasonable efforts to obtain the withdrawal of any such
order at the earliest practicable moment.

     (e) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period and if requested
by the managing underwriter or underwriters (if any), the Holders of a majority in aggregate
principal amount of the Registrable Notes covered by such Registration Statement or any
Participating Broker-Dealer, as the case may be, (i) promptly incorporate in such
Registration Statement or Prospectus a prospectus supplement or post-effective amendment
such information as the managing underwriter or underwriters (if any), such Holders or any
Participating Broker-Dealer, as the case may be (based upon advice of counsel), determine is
reasonably required to be included therein and (ii) make all required filings of such
prospectus supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment; provided, however, that the Issuers
shall not be required to take any action hereunder that would, in the written opinion of
counsel to the Issuers, violate applicable laws.

     (f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, furnish to each
selling Holder of Registrable Notes or each such Participating Broker-Dealer, as the case
may be, who so requests, their counsel and each managing underwriter, if any, at the sole
expense of the Issuers, one conformed copy of the Registration Statement or Registration
Statements and each post-effective amendment thereto, including financial statements and
schedules, and, if requested, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits.

     (g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, deliver to each
selling Holder of Registrable Notes or each such Participating Broker-Dealer, as the case
may be, their respective counsel, and the underwriters, if any, at the sole expense of the
Issuers, as many copies of the
Prospectus or Prospectuses (including each form of preliminary prospectus) and each
amendment or supplement thereto and any documents incorporated by reference therein as such
Persons may reasonably request; and, subject to the last paragraph of this Section 5, the
Issuers hereby consent to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case may be, and the underwriters or agents, if any, and dealers (if
any), in connection with the offering and sale of the Registrable Notes covered by, or the
sale by Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and
any amendment or supplement thereto.

     (h) Prior to any public offering of Registrable Notes or Exchange Notes or any delivery
of a Prospectus contained in the Exchange Offer Registration Statement by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use

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their reasonable efforts to register or qualify, and to cooperate with the selling Holders of
Registrable Notes or each such Participating Broker-Dealer, as the case may be, the managing
underwriter or underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or qualification) of such
Registrable Notes or Exchange Notes, as the case may be, for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as any selling
Holder, Participating Broker-Dealer, or the managing underwriter or underwriters reasonably
request; provided, however, that where Exchange Notes or Registrable Notes
are offered other than through an underwritten offering, the Issuers agree to cause the
Issuers’ counsel to perform Blue Sky investigations and file registrations and
qualifications required to be filed pursuant to this Section 5(h); keep each such
registration or qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and all other acts or
things reasonably necessary or advisable to enable the disposition in such jurisdictions of
such Exchange Notes or Registrable Notes covered by the applicable Registration Statement;
provided, however, that no Issuer shall be required to (A) qualify generally
to do business in any jurisdiction where it is not then so qualified, (B) take any action
that would subject it to general service of process in any such jurisdiction where it is not
then so subject or (C) subject itself to taxation in excess of a nominal dollar amount in
any such jurisdiction where it is not then so subject.

     (i) If a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the
selling Holders of Registrable Notes and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates representing Registrable
Notes to be sold, which certificates shall not bear any restrictive legends and shall be in
a form eligible for deposit with The Depository Trust Company and enable such Registrable
Notes to be in such denominations and registered in such names as the managing underwriter
or underwriters, if any, or selling Holders may request at least two Business Days prior to
any sale of such Registrable Notes or Exchange Notes.

     (j) Use their reasonable efforts to cause the Registrable Notes or Exchange Notes
covered by any Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be reasonably necessary to enable the seller or
sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of
such Registrable Notes or Exchange Notes, except as may be required solely as a consequence
of the nature of such selling Holder’s business, in which case the Issuers will cooperate in
all reasonable respects with the filing of such Registration Statement and the granting of
such approvals.

     (k) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, upon the
occurrence of any event contemplated by Section 5(c)(v) or 5(c)(vi) hereof, as promptly as
practicable prepare and (subject to Section 5(a) and the penultimate paragraph of this
Section 5) file with the Commission, at the sole expense of the Issuers, a supplement or
post-effective amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by reference,
or file any other required document so that, as thereafter delivered to the purchasers of
the Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to
whom such Prospectus will be delivered by a Participating Broker-Dealer, any such Prospectus
will not contain an untrue statement of a material fact or omit

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to state a material fact
required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

     (l) Prior to the effective date of the first Registration Statement relating to the
Registrable Notes, (i) provide the Trustee with certificates for the Registrable Notes in a
form eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP number
for the Registrable Notes.

     (m) In connection with any underwritten offering of Registrable Notes pursuant to a
Shelf Registration, enter into an underwriting agreement as is customary in underwritten
offerings of debt securities similar to the Notes and take all such other actions as are
reasonably requested by the managing underwriter or underwriters in order to expedite or
facilitate the registration or the disposition of such Registrable Notes and, in such
connection, (i) make such representations and warranties to the underwriter or underwriters
(and to any Holder that has advised the Company that such Holder may have a “due diligence”
defense under Section 11 of the Securities Act), and covenants with, the underwriters with
respect to the business of the Issuers and their subsidiaries, as then conducted (including
any acquired business, properties or entity, if applicable), and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, as are customarily made by issuers to underwriters in underwritten
offerings of debt securities similar to the Notes, and confirm the same in writing if and
when requested; (ii) use their reasonable efforts to obtain the written opinions of counsel
to the Issuers and written updates thereof in form, scope and substance reasonably
satisfactory to the managing underwriter or underwriters, addressed to the underwriters (and
to any Holder that has advised the Company that such Holder may have a “due diligence”
defense under Section 11 of the Securities Act) covering the matters customarily covered in
opinions requested in underwritten offerings and such other matters as may be reasonably
requested by the managing underwriter or underwriters; (iii) use their reasonable efforts to
obtain “cold comfort” letters and updates thereof in form, scope and substance reasonably
satisfactory to the managing underwriter or underwriters from the independent certified
public accountants of the Issuers (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data are, or are required to be, included or
incorporated by reference in the Registration Statement), addressed to each of the
underwriters (and to any Holder that has advised the Company that such Holder may have a
“due diligence” defense under Section 11 of the Securities Act), such letters to be in
customary form and covering matters of the type customarily covered in “cold comfort”
letters in connection with underwritten offerings; and (iv) if an underwriting agreement is
entered into, the same shall
contain indemnification provisions and procedures no less favorable than those set
forth in Section 7 hereof (or such other provisions and procedures acceptable to Holders of
a majority in aggregate principal amount of Registrable Notes covered by such Registration
Statement and the managing underwriter or underwriters or agents) with respect to all
parties to be indemnified pursuant to said Section; provided that the Issuers shall
not be required to provide indemnification to any underwriter selected in accordance with
the provisions of Section 9 hereof with respect to information relating to such underwriter
furnished in writing to the Company by or on behalf of such underwriter expressly for
inclusion in such Registration Statement. The above shall be done at each closing under
such underwriting agreement, or as and to the extent required thereunder.

     (n) If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a
Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is

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required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, make available
for inspection by any selling Holder of such Registrable Notes being sold or each such
Participating Broker-Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Notes, if any, and any attorney, accountant or other agent
retained by any such selling Holder or each such Participating Broker-Dealer, as the case
may be, or underwriter (collectively, the “Inspectors”), at the offices where
normally kept, during reasonable business hours, all financial and other records, pertinent
corporate documents and instruments of the Company and its subsidiaries (collectively, the
“Records”) as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors and employees
of the Company and its subsidiaries to supply all information reasonably requested by any
such Inspector in connection with such Registration Statement and Prospectus. Each
Inspector shall agree in writing that it will keep the Records confidential and that it will
not disclose, or use in connection with any market transactions in violation of any
applicable securities laws, any Records that the Company determines, in good faith, to be
confidential and that it notifies the Inspectors in writing are confidential unless (i) the
disclosure of such Records is necessary to avoid or correct a misstatement or omission in
such Registration Statement or Prospectus, (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction, (iii)
disclosure of such information is necessary or advisable in the opinion of counsel for an
Inspector in connection with any action, claim, suit or proceeding, directly or indirectly,
involving or potentially involving such Inspector and arising out of, based upon, relating
to, or involving this Agreement or the Purchase Agreement, or any transactions contemplated
hereby or thereby or arising hereunder or thereunder, or (iv) the information in such
Records has been made generally available to the public; provided, however,
that (i) each Inspector shall agree to use reasonable efforts to provide notice to the
Company of the potential disclosure of any information by such Inspector pursuant to clause
(i), (ii) or (iii) of this sentence to permit the Issuers to obtain a protective order (or
waive the provisions of this paragraph (n)) and (ii) each such Inspector shall take such
actions as are reasonably necessary to protect the confidentiality of such information (if
practicable) to the extent such action is otherwise not inconsistent with, an impairment of
or in derogation of the rights and interests of the Holder or any Inspector.

     (o) Provide an indenture trustee for the Registrable Notes or the Exchange Notes, as
the case may be, and cause the Indenture or the trust indenture provided for in Section 2(a)
hereof to be qualified under the TIA not later than the effective date of the Exchange Offer
or the first Registration Statement relating to the Registrable Notes; and in connection
therewith,
cooperate with the trustee under any such indenture and the Holders of the Registrable
Notes or Exchange Notes, as applicable, to effect such changes to such indenture as may be
required for such indenture to be so qualified in accordance with the terms of the TIA; and
execute, and use their reasonable efforts to cause such trustee to execute, all documents as
may be required to effect such changes, and all other forms and documents required to be
filed with the Commission to enable such indenture to be so qualified in a timely manner.

     (p) Comply with all applicable rules and regulations of the Commission and make
generally available to the Company’s securityholders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar
rule promulgated under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period is a fiscal
year) (i) commencing at the end of any fiscal quarter in which Registrable Notes or Exchange
Notes are sold to underwriters in a firm commitment or best efforts underwritten offering
and (ii) if not sold to

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underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company after the effective date of a Registration Statement,
which statements shall cover said 12-month periods consistent with the requirements of Rule
158.

     (q) Upon the request of a Holder, upon consummation of the Exchange Offer or a Private
Exchange, use their reasonable efforts to obtain an opinion of counsel to the Issuers, in a
form customary for underwritten transactions, addressed to the Trustee for the benefit of
all Holders of Registrable Notes participating in the Exchange Offer or the Private
Exchange, as the case may be, that the Exchange Notes or Private Exchange Notes, as the case
may be, and the related indenture constitute legal, valid and binding obligations of the
Issuers, enforceable against the Issuers in accordance with its respective terms, subject to
customary exceptions and qualifications.

     (r) If the Exchange Offer or a Private Exchange is to be consummated, upon delivery of
the Registrable Notes by Holders to the Company (or to such other Person as directed by the
Company) in exchange for the Exchange Notes or the Private Exchange Notes, as the case may
be, mark, or cause to be marked, on such Registrable Notes that such Registrable Notes are
being cancelled in exchange for the Exchange Notes or the Private Exchange Notes, as the
case may be; provided that in no event shall such Registrable Notes be marked as
paid or otherwise satisfied.

     (s) Cooperate with each seller of Registrable Notes covered by any Registration
Statement and each underwriter, if any, participating in the disposition of such Registrable
Notes and their respective counsel in connection with any filings required to be made with
the Financial Industry Regulatory Authority (the “FINRA”).

     (t) Use their reasonable efforts to take all other steps reasonably necessary or
advisable to effect the registration of the Exchange Notes and/or Registrable Notes covered
by a Registration Statement contemplated hereby.

          The Company may require each seller of Registrable Notes or Exchange Notes as to which any
registration is being effected to furnish to the Company such information regarding such seller and
the distribution of such Registrable Notes or Exchange Notes as the Company may, from time to time,
reasonably request. The Company may exclude from such registration the Registrable Notes of any
seller so long as such seller fails to furnish such information within a reasonable time after
receiving such request and in the event of such an exclusion, the Company shall have no further obligation
under this Agreement (including, without limitation, the obligations under Section 4) with respect
to such seller or any subsequent Holder of such Registrable Notes. Each seller as to which any
Shelf Registration is being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make any information previously furnished to the Company by
such seller not materially misleading.

          If any such Registration Statement refers to any Holder by name or otherwise as the holder of
any securities of the Issuers, then such Holder shall have the right to require (i) the insertion
therein of language, in form and substance reasonably satisfactory to such Holder, to the effect
that the holding by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the securities covered thereby and that such holding does
not imply that such Holder will assist in meeting any future financial requirements of the Issuers,
or (ii) in the event that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar federal statute then in force, the deletion of the reference to such
Holder in any amendment or supplement to the

-15-

 

applicable Registration Statement filed or prepared
subsequent to the time that such reference ceases to be required.

          Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by acquisition of
such Registrable Notes or Exchange Notes that, upon actual receipt of any notice from the Company
(x) of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iii), 5(c)(iv),
or 5(c)(v) hereof, or (y) that the Board of Directors of the Company (the “Board of
Directors”) has resolved that the Company has a bona fide business purpose for doing so, then,
upon providing such notice (which shall refer to this penultimate paragraph of this Section 5 and
comply with the provisions of the last paragraph of this Section 5), the Issuers may delay the
filing or the effectiveness of the Exchange Offer Registration Statement or the Shelf Registration
Statement (if not then filed or effective, as applicable) and shall not be required to maintain the
effectiveness thereof or amend or supplement the Exchange Offer Registration Statement or the Shelf
Registration, in all cases, for a period (a “Delay Period”) expiring upon the earlier to
occur of (i) in the case of the immediately preceding clause (x), such Holder’s or Participating
Broker-Dealer’s receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 5(k) hereof or until it is advised in writing (the “Advice”) by the Company that
the use of the applicable Prospectus may be resumed, and has received copies of any amendments or
supplements thereto or (ii) in the case of the immediately preceding clause (y), the date which is
the earlier of (A) the date on which such business purpose ceases to interfere with the Issuers’
obligations to file or maintain the effectiveness of any such Registration Statement pursuant to
this Agreement or (B) 60 days after the Company notifies the Holders of such good faith
determination. There shall not be more than 90 days of Delay Periods during any 12-month period.
Each of the Effectiveness Period and the Applicable Period, if applicable, shall be extended by a
number of days equal to the number of days during any Delay Period. Any Delay Period will not
alter the obligations of the Issuers to pay Liquidated Damages under the circumstances set forth in
Section 4 hereof.

          In the event of any Delay Period pursuant to clause (y) of the preceding paragraph, notice
shall be given as soon as practicable after the Board of Directors makes such a determination of
the need for a Delay Period and shall state, to the extent practicable, an estimate of the duration
of such Delay Period and shall advise the recipient thereof of the agreement of such Holder
provided in the next succeeding sentence. Each Holder, by his acceptance of any Registrable Note,
agrees that during any Delay Period, each Holder will discontinue disposition of such Notes or
Exchange Notes covered by such Registration Statement or Prospectus or Exchange Notes to be sold by
such Holder or Participating Broker-Dealer, as the case may be.

     Section 6. Registration Expenses

          All fees and expenses incident to the performance of or compliance with this Agreement by the
Issuers (other than any underwriting discounts or commissions) shall be borne by the Issuers,
whether or not the Exchange Offer Registration Statement or the Shelf Registration is filed or
becomes effective or the Exchange Offer is consummated, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with respect to filings
required to be made with the FINRA in connection with an underwritten offering and (B) fees and
expenses of compliance with state securities or Blue Sky laws (including, without limitation,
reasonable fees and disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Notes or Exchange Notes and determination of the eligibility of the Registrable Notes
or Exchange Notes for investment under the laws of such jurisdictions (x) where the holders of
Registrable Notes are located, in the case of an Exchange Offer, or (y) as provided in Section 5(h)
hereof, in the case of a Shelf Registration or in the case of Exchange Notes to be sold by a
Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses, including,
without limitation, expenses of printing certificates for Registrable Notes or Exchange Notes in

-16-

 

a form eligible for deposit with The Depository Trust Company and of printing prospectuses if the
printing of prospectuses is requested by the managing underwriter or underwriters, if any, or by
the Holders of a majority in aggregate principal amount of the Registrable Notes included in any
Registration Statement or in respect of Exchange Notes to be sold by any Participating
Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger, telephone and
delivery expenses, (iv) fees and disbursements of counsel for the Issuers and reasonable fees and
disbursements of one special counsel for all of the sellers of Registrable Notes (exclusive of any
counsel retained pursuant to Section 7 hereof), (v) fees and disbursements of all independent
certified public accountants referred to in Section 5(m)(iii) hereof (including, without
limitation, the expenses of any special audit and “cold comfort” letters required by or incident to
such performance), (vi) Securities Act liability insurance, if the Issuers desire such insurance,
(vii) fees and expenses of all other Persons retained by any of the Issuers, (viii) internal
expenses of the Issuers (including, without limitation, all salaries and expenses of officers and
employees of the Company or its subsidiaries performing legal or accounting duties), (ix) the
expense of any annual audit, (x) the fees and expenses incurred in connection with the listing of
the securities to be registered on any securities exchange, and the obtaining of a rating of the
securities, in each case, if applicable, and (xi) the expenses relating to printing, word
processing and distributing all Registration Statements, underwriting agreements, indentures and
any other documents necessary in order to comply with this Agreement. Notwithstanding the
foregoing or anything to the contrary, each Holder shall pay all underwriting discounts and
commissions of any underwriters with respect to any Registrable Notes sold by or on behalf of it.

     Section 7. Indemnification

          (a) The Issuers, jointly and severally, agree to indemnify and hold harmless each Holder of
Registrable Notes and each Participating Broker-Dealer selling Exchange Notes during the Applicable
Period, each Person, if any, who controls any such Person within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, the agents, employees, officers and directors
of each Holder and each such Participating Broker-Dealer and the agents, partners, members,
employees, officers, managers and directors of any such controlling Person (each, a
“Participant”) from and against any and all losses, liabilities, claims, damages and
expenses whatsoever (including, but not limited to, reasonable attorneys’ fees and any and all
reasonable expenses whatsoever actually incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and all reasonable
amounts paid in settlement of any claim or litigation (in the manner set forth in clause (c)
below)) (collectively, “Losses”) to which they or any of them may become
subject under the Securities Act, the Exchange Act or otherwise insofar as such Losses (or
actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement (or any amendment thereto) or
Prospectus (as amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus or Free Writing Prospectus, or caused by,
arising out of or based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, provided that the foregoing
indemnity shall not be available to any Participant insofar as such Losses are caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to such Participant furnished to the Company in writing by or
on behalf of such Participant expressly for use therein. This indemnity agreement will be in
addition to any liability that the Issuers may otherwise have, including, but not limited to,
liability under this Agreement.

-17-

 

          (b) Each Participant agrees, severally and not jointly, to indemnify and hold harmless each
Issuer, each Person, if any, who controls any Issuer within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, and each of their respective agents, partners,
members, employees, officers and directors and the agents, employees, officers and directors of any
such controlling Person from and against any Losses to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise insofar as such Losses (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement (or any amendment thereto) or Prospectus
(as amended or supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus or Free Writing Prospectus, or caused by, arising out of or
based upon any omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading, in each case to the extent, but only to the extent, that any such
Loss arises out of or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with information relating to such
Participant furnished in writing to the Company by or on behalf of such Participant expressly for
use therein.

          (c) Promptly after receipt by an indemnified party under subsection 7(a) or 7(b) above of
notice of the commencement of any action, suit or proceeding (collectively, an “action”),
such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is to be sought in
writing of the commencement of such action (but the failure so to notify an indemnifying party
shall not relieve such indemnifying party from any liability that it may have under this Section 7
except to the extent that it has been prejudiced in any material respect by such failure). In case
any such action is brought against any indemnified party, and it notifies an indemnifying party of
the commencement of such action, the indemnifying party will be entitled to participate in such
action, and to the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to assume the defense of
such action with counsel satisfactory to such indemnified party. Notwithstanding the foregoing,
the indemnified party or parties shall have the right to employ its or their own counsel in any
such action, but the reasonable fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall have been authorized
in writing by the indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii) the named parties to
such action (including any impleaded parties) include such indemnified party and the indemnifying
party or parties (or such indemnifying parties have assumed the defense of such action), and such
indemnified party or parties shall have reasonably concluded, that there may be defenses available
to it or them that are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of which events such
reasonable fees and expenses of counsel shall be borne by the indemnifying parties. In no event
shall the indemnifying party be liable for the fees and expenses of more than one counsel (together
with appropriate local counsel) at any time for all indemnified parties in connection with any one
action or separate but substantially similar or related actions arising in the same jurisdiction
out of the same general allegations or circumstances. Any such separate firm for the Participants
shall be designated in writing by Participants who sold a majority in interest of Registrable Notes
sold by all such Participants and shall be reasonably acceptable to the Company and any such
separate firm for the Issuers, their Affiliates, officers, directors, representatives, employees
and agents and such control Person of the Issuers shall be designated in writing by the Issuers and
shall be reasonably acceptable to the Holders. An indemnifying party shall not be liable for any

-18-

 

settlement of any claim or action effected without its written consent, which consent may not be
unreasonably withheld. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement (x) includes an unconditional release
of such indemnified party from all liability on claims that are the subject matter of such
proceeding and (y) does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.

          (d) In order to provide for contribution in circumstances in which the indemnification
provided for in this Section 7 is for any reason held to be unavailable from the indemnifying
party, or is insufficient to hold harmless a party indemnified under this Section 7, each
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of such aggregate Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by each indemnifying party, on the one hand, and each indemnified party, on the
other hand, from the sale of the Notes to the Initial Purchasers or the resale of the Registrable
Notes by such Holder, as applicable, or (ii) if such allocation is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of each indemnified party, on the one hand, and each
indemnifying party, on the other hand, in connection with the statements or omissions that resulted
in such Losses, as well as any other relevant equitable considerations. The relative benefits
received by the Issuers, on the one hand, and each Participant, on the other hand, shall be deemed
to be in the same proportion as (x) the total proceeds from the sale of the Notes to the Initial
Purchasers (net of discounts and commissions but before deducting expenses) received by the Issuers
are to (y) the total net profit received by such Participant in connection with the sale of the
Registrable Notes. The relative fault of the parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Issuers or such
Participant and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission or alleged statement or omission.

          (e) The parties agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to above. Notwithstanding the provisions
of this Section 7, (i) in no case shall any Participant be required to contribute any amount in
excess of the amount by which the net profit received by such Participant in connection with the
sale of the Registrable Notes exceeds the amount of any damages that such Participant has otherwise been required to
pay by reason of any untrue or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action against such party in respect of which a claim for
contribution may be made against another party or parties under this Section 7, notify such party
or parties from whom contribution may be sought, but the omission to so notify such party or
parties shall not relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 7 or otherwise, except to the extent that it has
been prejudiced in any material respect by such failure; provided, however, that no
additional notice shall be required with respect to any action for which notice has been given
under this Section 7 for purposes of indemnification. Anything in this section to the contrary
notwithstanding, no party shall be liable for contribution with respect to any action or claim
settled without its written consent, provided, however, that such written consent
was not unreasonably withheld.

-19-

 

     Section 8. Rules 144 and 144A

          The Issuers covenant that they will file the reports required, if any, to be filed by them
under the Securities Act and the Exchange Act and the rules and regulations adopted by the
Commission thereunder in a timely manner in accordance with the requirements of the Securities Act
and the Exchange Act and, if at any time the Issuers are not required to file such reports, they
will, upon the request of any Holder or beneficial owner of Registrable Notes, make available such
information necessary to permit sales pursuant to Rule 144A under the Securities Act. The Issuers
further covenant that for so long as any Registrable Notes remain outstanding they will take such
further action as any Holder of Registrable Notes may reasonably request from time to time to
enable such Holder to sell Registrable Notes without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144 and Rule 144A under the Securities Act,
as such Rules may be amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission.

     Section 9. Underwritten Registrations

          If any of the Registrable Notes covered by any Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager or managers that
will manage the offering will be selected by the Holders of a majority in aggregate principal
amount of such Registrable Notes included in such offering and shall be reasonably acceptable to
the Company.

          No Holder of Registrable Notes may participate in any underwritten registration hereunder if
such Holder does not (a) agree to sell such Holder’s Registrable Notes on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements
and (b) complete and execute all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting arrangements.

     Section 10. Miscellaneous

          (a) No Inconsistent Agreements. The Issuers have not, as of the date hereof, and
shall not, after the date of this Agreement, enter into any agreement with respect to any of their
securities that is inconsistent with the rights granted to the Holders of Registrable Notes in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not conflict with and
are not inconsistent with, in any material respect, the rights granted to the holders of any
of the Issuers’ other issued and outstanding securities under any such agreements. The Issuers
have not entered and will not enter into any agreement with respect to any of their securities
which will grant to any Person piggy-back registration rights with respect to any Registration
Statement.

          (b) Adjustments Affecting Registrable Notes. The Issuers shall not, directly or
indirectly, take any action with respect to the Registrable Notes as a class that would adversely
affect the ability of the Holders of Registrable Notes to include such Registrable Notes in a
registration undertaken pursuant to this Agreement.

          (c) Amendments and Waivers. The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to departures from the provisions hereof may not
be given except pursuant to a written agreement duly signed and delivered by (I) the Company on
behalf of all Issuers and (II)(A) the Holders of not less than a majority in aggregate principal
amount of the then outstanding Registrable Notes and (B) in circumstances that would adversely
affect the Participating Broker-Dealers, the Participating Broker-Dealers holding not less than a
majority in aggregate principal

-20-

 

amount of the Exchange Notes held by all Participating
Broker-Dealers; provided, however, that Section 7 and this Section 10(c) may not be
amended, modified or supplemented except pursuant to a written agreement duly signed and delivered
by the Company on behalf of all Issuers and each Holder and each Participating Broker-Dealer
(including any Person who was a Holder or Participating Broker-Dealer of Registrable Notes or
Exchange Notes, as the case may be, disposed of pursuant to any Registration Statement) affected by
any such amendment, modification, supplement or waiver. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders of Registrable Notes whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect, impair, limit or compromise
the rights of other Holders of Registrable Notes may be given by Holders of at least a majority in
aggregate principal amount of the Registrable Notes being sold pursuant to such Registration
Statement.

          (d) Notices. All notices and other communications (including, without limitation, any
notices or other communications to the Trustee) provided for or permitted hereunder shall be made
in writing by hand-delivery, registered first-class mail, next-day air courier or telecopier:

          (i) if to a Holder of the Registrable Notes or any Participating Broker-Dealer, at the most
current address of such Holder or Participating Broker-Dealer, as the case may be, set forth
on the records of the registrar under the Indenture.

          (ii) if to any Issuer, at the address as follows:

c/o Hercules Offshore, Inc.

9 Greenway Plaza, Suite 220

Houston, Texas 77046

Telephone: (713) 350-5100

Fax: 713-350-5105

Attention: James W. Noe

          (iii) if to the Initial Purchasers, at the address as follows:

UBS Securities LLC

677 Washington Boulevard

Stamford, Connecticut 06901

Telephone: (203) 719-3000

Fax: (212) 719-3667

Attention: Leveraged Capital Markets

With a copy at such address to the attention of Legal Department,

Fax: (203) 719-1075

          All such notices and communications shall be deemed to have been duly given: when delivered
by hand, if personally delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt is acknowledged by the recipient’s telecopier machine, if
telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.

          Copies of all such notices, demands or other communications shall be concurrently delivered by
the Person giving the same to the Trustee at the address and in the manner specified in such
Indenture.

-21-

 

          (e) Guarantors. So long as any Registrable Notes remain outstanding, the Issuers
shall cause each Person that becomes a guarantor of the Notes under the Indenture to execute and
deliver a counterpart to this Agreement which subjects such Person to the provisions of this
Agreement as a Guarantor. Each of the Guarantors agrees to join the Issuers in all of their
undertakings hereunder to effect the Exchange Offer for the Exchange Notes and the filing of any
Shelf Registration required hereunder.

          (f) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties hereto, the Holders and the
Participating Broker-Dealers; provided, however, that this Agreement shall not
inure to the benefit of or be binding upon a successor or assign of a Holder unless and to the
extent such successor or assign holds Registrable Notes.

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

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

          (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN
THE STATE OF NEW YORK.

          (j) Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and
shall in no way be affected, impaired or invalidated, and the parties hereto shall use their
best efforts to find and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

          (k) Securities Held by the Issuers or Their Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Registrable Notes is required hereunder,
Registrable Notes held by the Issuers or any of their affiliates (as such term is defined in Rule
405 under the Securities Act) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.

          (l) Third-Party Beneficiaries. Holders and beneficial owners of Registrable Notes and
Participating Broker-Dealers are intended third-party beneficiaries of this Agreement, and this
Agreement may be enforced by such Persons. No other Person is intended to be, or shall be
construed as, a third-party beneficiary of this Agreement.

          (m) Attorneys’ Fees. As between the parties to this Agreement, in any action or
proceeding brought to enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover reasonable
attorneys’ fees actually incurred in addition to its costs and expenses and any other available
remedy.

-22-

 

          (n) Entire Agreement. This Agreement, together with the Purchase Agreement and the
Indenture, is intended by the parties as a final and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained herein and therein
and any and all prior oral or written agreements, representations, or warranties, contracts,
understandings, correspondence, conversations and memoranda between the Holders on the one hand and
the Issuers on the other, or between or among any agents, representatives, parents, subsidiaries,
Affiliates, predecessors in interest or successors in interest with respect to the subject matter
hereof and thereof are merged herein and replaced hereby.

-23-

 

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

	 	 	 	 	 
	 	HERCULES OFFSHORE, INC.

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Senior Vice President, General Counsel,

Chief Compliance Officer and Secretary 	 
	 
	 	CLIFFS DRILLING COMPANY

CLIFFS DRILLING TRINIDAD L.L.C.

HERCULES DRILLING COMPANY, LLC

HERCULES OFFSHORE LIFTBOAT COMPANY LLC

THE HERCULES OFFSHORE DRILLING COMPANY LLC

THE OFFSHORE DRILLING COMPANY

THE ONSHORE DRILLING COMPANY

TODCO AMERICAS INC.

TODCO MANAGEMENT SERVICES, INC.

TODCO INTERNATIONAL INC.

TODCO MEXICO INC.
 	 
	 
	 	 	 
	 	By:  	               /s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President & Secretary 	 
	 
	 	HERCULES LIFTBOAT COMPANY, LLC

HERCULES OFFSHORE SERVICES LLC

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Secretary 	 
	 
	 	HERCULES OFFSHORE HOLDINGS, LTD.

HERCULES OFFSHORE MIDDLE EAST, LTD.

 	 
	 	By:  	/s/ Don P. Rodney
 	 
	 	 	Name:  	Don P. Rodney 	 
	 	 	Title:  	President 	 
	 

Signature Page to

Registration Rights Agreement

	 	 	 	 	 

 

 

	 	 	 	 	 
	 	DELTA TOWING HOLDINGS, LLC

DELTA TOWING, LLC

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 

Signature Page to

Registration Rights Agreement

 

 

	 	 	 	 	 
	 	UBS Securities LLC

Banc of America Securities LLC

Deutsche Bank Securities Inc.

Morgan Stanley & Co. Incorporated

Capital One Southcoast, Inc.

Credit Suisse Securities (USA) LLC

Goldman, Sachs & Co.

Mizuho Securities USA Inc.

Comerica Securities, Inc.

Fortis Securities LLC

Natixis Bleichroeder Inc.

By:    UBS SECURITIES LLC

         BANC OF AMERICA SECURITIES LLC

         DEUTSCHE BANK SECURITIES INC.

         MORGAN STANLEY & CO. INCORPORATED,

         as Representatives of the several Initial Purchasers
 	 
	 
	 	UBS SECURITIES LLC

 	 
	 	By:  	/s/ Francisco Pinto-Leite
 	 
	 	 	Name:  	Francisco Pinto-Leite 	 
	 	 	Title:  	Executive Director 	 
	 
	 	 	 
	 	By:  	                         /s/ Michele R. Cousins
 	 
	 	 	Name:  	Michele R. Cousins 	 
	 	 	Title:  	Director - Leveraged Capital Markets 	 
	 
	 	BANC OF AMERICA SECURITIES LLC

 	 
	 	By:  	/s/ Lex Maultsby
 	 
	 	 	Name:  	Lex Maultsby 	 
	 	 	Title:  	Managing Director 	 
	 
	 	DEUTSCHE BANK SECURITIES INC.

 	 
	 	By:  	/s/ Daniel J. Ward
 	 
	 	 	Name:  	Daniel J. Ward 	 
	 	 	Title:  	Managing Director 	 
	 
	 	 	 
	 	By:  	                         /s/ Sten L. Gustafson
 	 
	 	 	Name:  	Sten L. Gustafson 	 
	 	 	Title:  	Managing Director 	 
	 
	 	MORGAN STANLEY & CO. INCORPORATED

 	 
	 	By:  	/s/ John T. Roche	 
	 	 	Name:  	 John T. Roche
	 	 	Title: 	Vice President 	 
	 

Signature Page to

Registration Rights Agreementexv10w1

Exhibit 10.1

INTERCREDITOR AGREEMENT

Dated as of

October 20, 2009

Among

HERCULES OFFSHORE, INC.,

THE SUBSIDIARIES PARTY HERETO AS GUARANTORS,

UBS AG, STAMFORD BRANCH,

as Bank Collateral Agent,

U.S. BANK NATIONAL ASSOCIATION,

as Notes Collateral Agent,

and

each additional Authorized Representative from time to time party hereto

 

 

          INTERCREDITOR AGREEMENT (as amended, restated or otherwise modified from time to time, this
“Agreement”) dated as of October 20, 2009, among HERCULES OFFSHORE, INC., a Delaware corporation
(“Hercules”), each Subsidiary of Hercules listed on the signature pages hereto or which becomes a
party hereto (each such Subsidiary, individually a “Subsidiary Guarantor”, and collectively, the
“Subsidiary Guarantors”), UBS AG, STAMFORD BRANCH, as Authorized Representative for the Senior Loan
Secured Parties (in such capacity and together with its successors in such capacity, the “Bank
Collateral Agent”), U.S. BANK NATIONAL ASSOCIATION, as Authorized Representative and Senior
Representative for the Notes Secured Parties (in such capacity and together with its successors in
such capacity, the “Notes Collateral Agent”), and each additional Senior Representative from time
to time party hereto for the Additional Senior Debt Parties of the Series with respect to which it
is acting in such capacity.

          In consideration of the mutual agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Bank Collateral
Agent (for itself and on behalf of the Senior Loan Secured Parties), the Notes Collateral Agent
(for itself and on behalf of the Notes Secured Parties) and each additional Senior Representative
(for itself and on behalf of the Additional Senior Debt Parties of the applicable Series) agree as
follows:

ARTICLE I

Definitions

          SECTION 1.01 Construction; Certain Defined Terms.

          (a) 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”. Unless the context requires otherwise, (i)
any definition of or reference to any agreement, instrument, other document, statute or regulation
herein shall be construed as referring to such agreement, instrument, other document, statute or
regulation as from time to time amended, supplemented or otherwise modified, (ii) any reference
herein to any Person shall be construed to include such Person’s successors and assigns, but shall
not be deemed to include the subsidiaries of such Person unless express reference is made to such
subsidiaries, (iii) 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, (iv) all references herein to Articles, Sections and Annexes shall be construed to refer to
Articles, Sections and Annexes of this Agreement and (v) unless otherwise expressly qualified
herein, the words “asset” and “property” shall be construed to have the same meaning and effect and
to refer to any and all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

          (b) It is the intention of the Senior Secured Parties that:

 

 

          (1) the Notes Secured Parties (and not the Senior Secured Parties of any Series of
Senior Obligations) bear the risk of (i) any determination by a court of competent
jurisdiction that (x) any of the Note Obligations are unenforceable under applicable law or
are subordinated to any other obligations (other than to solely a Series of Senior
Obligations), (y) any of the Note Obligations do not have an enforceable security interest
in any of the Collateral securing any Series of Senior Obligations, including, without
limitation, pursuant to any preference or fraudulent conveyance or transfer action and/or
(z) any intervening security interest exists securing any other obligations (other than a
Series of Senior Obligations) on a basis ranking prior to the security interest of the Note
Obligations but junior to the security interest of any Series of Senior Obligations or (ii)
the existence of any Collateral for the Note Obligations that is not Shared Collateral (any
such condition referred to in the foregoing clauses (i) or (ii) with respect to the Note
Obligations, a “Notes Obligations Impairment”); and

          (2) the holders of Senior Obligations of each Series (and not the Notes Secured Parties
or the Senior Secured Parties of any other Series) bear the risk of (i) any determination by
a court of competent jurisdiction that (x) any of the Senior Obligations of such Series are
unenforceable under applicable law or are subordinated to any other obligations (other than
to solely to the Note Obligations or another Series of Senior Obligations), (y) any of the
Senior Obligations of such Series do not have an enforceable security interest in any of the
Collateral securing any other Series of Senior Obligations or the Note Obligations,
including, without limitation, pursuant to any preference or fraudulent conveyance or
transfer action and/or (z) any intervening security interest exists securing any other
obligations (other than the Note Obligations or another Series of Senior Obligations) on a
basis ranking prior to the security interest of such Series of Senior Obligations but junior
to the security interest of the Note Obligations or any other Series of Senior Obligations
or (ii) the existence of any Collateral for the Note Obligations or any other Series of
Senior Obligations that is not Shared Collateral (any such condition referred to in the
foregoing clauses (i) or (ii) with respect to any Series of Senior Obligations, a “Senior
Obligation Impairment” and together with a Notes Obligations Impairment, an “Impairment”).

          (3) In the event of any Impairment with respect to the Note Obligations or any Series
of Senior Obligations, the results of such Impairment shall be borne solely by the Notes
Secured Parties or the holders of such Series of Senior Obligations subject to such
Impairment, and the rights of the Notes Secured Parties or the holders of such Series of
Senior Obligations (including, without limitation, the right to receive distributions in
respect of the Note Obligations or such Series of Senior Obligations pursuant to Section
2.01) set forth herein shall be modified to the extent necessary so that the effects of such
Impairment are borne solely by the Notes Secured Parties or the holders of the Series of
such Senior Obligations subject to such Impairment. Additionally, in the event the Note
Obligations or the Senior Obligations of any Series are modified pursuant to applicable law
(including, without limitation, pursuant to Section 1129 of the Bankruptcy Code), any
reference to the Note Obligations or Note Documents or the Senior Obligations or the Senior
Debt Documents governing such Senior Obligations, as the case may be, shall refer to such
obligations or such documents as so modified.

2

 

          (c) Capitalized terms used but not otherwise defined herein shall have the meanings set
forth in the Senior Credit Agreement. As used in this Agreement, the following terms have the
meanings specified below:

          “Additional Senior Debt” means any Indebtedness of Hercules (other than Indebtedness
constituting Senior Loan Obligations or Note Obligations) or any Guarantor secured by the
Collateral on a pari passu basis with the Senior Loan Obligations (but without regard to control of
remedies); provided, however, that (i) such Indebtedness is permitted to be incurred, secured and
Guaranteed on such basis by each Senior Debt Document and Note Document and (ii) the Authorized
Representative for the holders of such Indebtedness shall have become party to this Agreement
pursuant to, and by satisfying the conditions set forth in, Section 5.02(c) hereof. Additional
Senior Debt shall include any Registered Equivalent Notes and Guarantees thereof by the Guarantors
issued in exchange thereof.

          “Additional Senior Debt Documents” means, with respect to any series, issue or class of
Additional Senior Debt, the promissory notes, indentures, collateral documents or other operative
agreements evidencing or governing such Indebtedness, in each case, as amended, restated,
Refinanced or otherwise modified from time to time.

          “Additional Senior Debt Facility” means each indenture or other governing agreement with
respect to any Additional Senior Debt, as amended, restated, Refinanced or otherwise modified
from time to time.

          “Additional Senior Debt Obligations” means, with respect to any series, issue or class of
Additional Senior Debt, (a) all principal of, and interest (including, without limitation, any
interest which accrues after the commencement of any Bankruptcy Proceeding, whether or not allowed
or allowable as a claim in any such proceeding) payable with respect to, such Additional Senior
Debt, (b) all other amounts payable to the related Additional Senior Debt Parties under the
related Additional Senior Debt Documents and (c) any renewals or extensions of the foregoing.

          “Additional Senior Debt Parties” means, with respect to any series, issue or class of
Additional Senior Debt, the holders of such Indebtedness, any trustee or agent therefor under any
related Additional Senior Debt Documents and the beneficiaries of each indemnification obligation
undertaken by Hercules or any Obligor under any related Additional Senior Debt Documents, but shall
not include the Obligors or any Affiliates thereof (unless such Obligor or Affiliate is a holder of
such Indebtedness, a trustee or agent therefor or beneficiary of such an indemnification obligation
named as such in an Additional Senior Debt Document).

          “Affiliate” of any Person means any other Person which directly or indirectly Controls or
is Controlled by, or is under direct or indirect common Control with, the referent Person.

          “Agreement” shall have the meaning assigned to such term in the introductory paragraph of
this Agreement.

3

 

          “Applicable Collateral Documents” shall have the meaning assigned to such term in Section
4.03(a).

          “Authorized Representative” means (i) in the case of any Senior Loan
Obligations or the Senior Loan Secured Parties, the Bank Collateral Agent, (ii) in the case of the
Note Obligations or the Notes Secured Parties, the Notes Collateral Agent and (iii) in the case of
any Series of Additional Senior Debt Obligations or Additional Senior Debt Parties that become
subject to this Agreement after the date hereof, the Senior Representative named for such Series in
the applicable Joinder Agreement.

          “Bank Collateral Agent” shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.

          “Bankruptcy Code” shall mean Title 11 of the United States Code, as amended.

          “Bankruptcy Law” shall mean the Bankruptcy Code and any similar Federal, state or foreign
law for the relief of debtors.

          “Bankruptcy Proceeding” means any proceeding under Title 11 of the U.S. Code or any other
Federal, state or foreign bankruptcy, insolvency, reorganization, receivership or similar law.

          “Business Day” means any day other than a Saturday, Sunday or day on which commercial banks
in New York City are authorized or required by law to close.

          “Collateral” means the “Collateral” or “Pledged Collateral” as defined in any Collateral
Document, and all other property of whatever kind and nature subject or purported to be subject
from time to time to a Lien under any Collateral Document securing the Note Obligations or any of
the Senior Obligations.

          “Collateral Documents” means, collectively, the Notes Collateral Documents, the Senior Loan
Collateral Documents and each of the security agreements and other instruments executed and
delivered by any Obligor pursuant to the Senior Credit Agreement, the Indenture or Additional
Senior Debt Facility for purposes of providing Collateral security or credit support for any Senior
Obligation or Note Obligation (including, in each case, any schedules, exhibits or annexes
thereto), as the same may be amended, restated, supplemented or otherwise modified from time to
time.

          “Collateral Suspension” shall mean, with respect to the Note Obligations or any Series of
Additional Senior Debt, the period during which the Liens granted on the Collateral pursuant to
the Collateral Documents applicable to the Note Obligations or such Series are suspended or
released in accordance with the terms of the Indenture or the Additional Senior Debt Facility
applicable to such Series, as the case may be.

          “Comparable Collateral Documents” shall have the meaning assigned to such term in Section
2.04(c).

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          “Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

          “Controlling Agent” means, with respect to any Shared Collateral, (i) until the Senior Loan
Obligations Payment Date, the Bank Collateral Agent and (ii) from and after the Senior Loan
Obligations Payment Date, the Major Additional Senior Representative.

          “Controlling Secured Parties” means, with respect to any Shared Collateral, the Senior
Secured Parties whose Senior Representative is the Controlling Agent for such Shared Collateral.

          “Credit Facilities” means one or more debt facilities (which may be outstanding at the same
time and including, without limitation, the Senior Credit Agreement) with banks or other
institutional lenders or investors or indentures providing for revolving credit loans, term loans,
letters of credit or other long-term Indebtedness, including any guarantees, collateral documents,
instruments and agreements executed in connection therewith, and, in each case, as such agreements
may be amended, Refinanced or otherwise restructured, in whole or in part from time to time
(including increasing the amount of available borrowings thereunder or adding Subsidiaries of
Hercules as additional borrowers or guarantors thereunder) with respect to all or any portion of
the Indebtedness under such agreement or agreements, any successor or replacement agreement or
agreements or any indenture or successor or replacement indenture and whether by the same or any
other agent, lender, group of lenders or investors.

          “Default” means a “Default” as defined in the Senior Credit Agreement, the Indenture or any
Additional Senior Debt Facility, including any event, occurrence or condition which is, or upon
notice, lapse of time or both would constitute, an Event of Default under the Indenture or such
Additional Senior Debt Facility.

          “DIP Financing” shall have the meaning assigned to such term in Section
2.05(b).

          “DIP Financing Liens” shall have the meaning assigned to such term in Section
2.05(b).

          “DIP Lenders” shall have the meaning assigned to such term in Section 2.05(b).

          “Equity Interests” means, with respect to any Person, any and all shares, interests,
participations or other equivalents, including membership interests (however designated, whether
voting or nonvoting), of equity of such person, including, if such person is a partnership,
partnership interests (whether general or limited) and any other interest or participation that
confers on a person the right to receive a share of the profits and losses of, or distributions of
property of, such partnership, but excluding debt securities convertible or exchangeable into such
equity.

          “Event of Default” means an “Event of Default” as defined in the Senior Credit Agreement,
the Indenture or any Additional Senior Debt Facility.

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          “GAAP” means generally accepted accounting principles in the United States applied on a
consistent basis.

          “Governmental Authority” means the government of the United States of America, any other
nation or any political subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to
government.

          “Guarantee” means a direct or indirect guarantee by any Person of any Indebtedness of any
other Person and includes any obligation, direct or indirect, contingent or otherwise, of such
Person (1) to purchase or pay (or advance or supply funds for the purchase or payment of)
Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase
arrangements are on arm’s-length terms and are entered into in the ordinary course of business),
to take-or-pay, or to maintain financial statement conditions or otherwise); or (2) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or in part);
“Guarantee,” when used as a verb, and “Guaranteed” have correlative meanings.

          “Guarantor” means each Subsidiary Guarantor and each other Person that is required to, or
at the election of Hercules does, become a guarantor by the terms of the Senior Debt Documents
or the Note Documents, in each case, until such Person is released from its Guarantee in
accordance with the terms of such Senior Debt Documents or Note Documents (subject to the terms
of this Agreement).

          “Hedging Agreement” means any swap, cap, collar, forward purchase or similar agreements or
arrangements dealing with interest rates, currency exchange rates or commodity prices, either
generally or under specific contingencies.

          “Hercules” shall have the meaning assigned to such term in the introductory paragraph of
this Agreement.

          “Impairment” shall have the meaning assigned to such term in Section 1.01(b)(2).

          “Indenture” means that certain Indenture dated as of October 20, 2009, among Hercules, the
Subsidiary Guarantors identified therein and U.S. Bank National Association, as trustee and
collateral agent.

          “Insolvency or Liquidation Proceeding” means:

          (a) any case commenced by or against Hercules or any Guarantor under any Bankruptcy Law, any
other proceeding for the reorganization, recapitalization or adjustment or marshalling of the
assets or liabilities of Hercules or any Guarantor, any receivership or assignment for the benefit
of creditors relating to Hercules or any Guarantor or any similar case or proceeding relative to
Hercules or any Guarantor or its creditors, as such, in each case whether or not voluntary; or

6

 

          (b) any liquidation, dissolution, marshalling of assets or liabilities or other winding up of
or relating to Hercules or any Guarantor, in each case whether or not voluntary and whether or not
involving bankruptcy or insolvency, except for any liquidation or dissolution permitted under the
Senior Debt Documents and the Note Documents.

          “Intervening Creditor” shall have the meaning assigned to such term in Section
2.01(a).

          “Joinder Agreement” means the documents required to be delivered by a Senior Representative
to the Controlling Agent pursuant to Section 5.12 in order to establish an additional Series of
Senior Obligations and Senior Secured Parties hereunder.

          “Lien” means, with respect to any asset, any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such asset.

          “Loans” means the loans made by the Lenders to Hercules pursuant to the Senior Credit
Agreement.

          “Major Additional Senior Representative” means (i) if the Note Obligations represent the
largest principal amount of Obligations secured by a Senior Lien as of the Senior Loan
Obligations Payment Date, the Notes Collateral Agent and (ii) if the Note Obligations do not
represent the largest principal amount of Obligations secured by a Senior Lien as of the Senior
Loan Obligations Payment Date, the Senior Representative in respect of the Additional Senior Debt
Facility under which the largest outstanding principal amount of Additional Senior Debt
Obligations are then outstanding.

          “Non-Controlling Secured Parties” means, with respect to any Shared Collateral, the Senior
Secured Parties that are not Controlling Secured Parties with respect to such Shared Collateral.

          “Note Documents” means the Indenture, the notes issued thereunder and the Notes
Collateral Documents.

          “Note Obligations” means all Obligations of Hercules and the Guarantors under the Indenture,
the notes issued thereunder and the Notes Collateral Documents. Note
Obligations shall include any Registered Equivalent Notes and Guarantees thereof by the
Guarantors issued in exchange thereof.

          “Notes Collateral Agent” shall have the meaning assigned to such term in the introductory
paragraph to this Agreement.

          “Notes Collateral Documents” means the Notes Security Agreement, the Notes Ship Mortgages, the
Notes Trademark Security Agreement, this Agreement and each other security document or pledge
agreement executed by Hercules or any Guarantor and delivered in accordance with applicable local
or foreign law to grant a valid, perfected security interest in any property as collateral for the
Note Obligations, in each case, as amended, restated or otherwise modified from time to time.

7

 

          “Notes Secured Parties” means the holders of any Note Obligations and the Notes
Collateral Agent.

          “Notes Security Agreement” means that certain Security Agreement, dated as of October 20,
2009, among Hercules and the Guarantors party thereto and the Notes Collateral Agent for the
benefit of the Notes Secured Parties, as amended, restated or otherwise modified from time to
time.

          “Notes Ship Mortgages” means any of the preferred mortgages or preferred fleet mortgages of a
vessel or vessels delivered by Hercules or Guarantor in favor of the Notes Collateral Agent, as
mortgage trustee, for the benefit of the Notes Collateral Agent for the benefit of the Notes
Secured Parties, as amended, restated or otherwise modified from time to time.

          “Notes Trademark Security Agreement” means the Trademark Security Agreement dated as of
October 20, 2009, by and among the Notes Collateral Agent, Hercules, Cliffs Drilling Company and
the other grantors party thereto, as amended, restated or otherwise modified from time to time.

          “Obligations” means any principal, interest, penalties, fees, indemnifications,
reimbursements, costs, expenses, damages and other liabilities payable under the documentation
governing any Indebtedness.

          “Obligors” means Hercules, the Subsidiary Guarantors and any other Person who is liable for
any of the Senior Obligations or the Note Obligations.

          “Person” means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other entity.

          “Possessory Collateral” means (a) any Shared Collateral in the possession of the Controlling
Agent (or its agents or bailees), to the extent that possession thereof perfects a Lien thereon
under the Uniform Commercial Code of any jurisdiction, (b) any rights to receive payments under any
insurance policy that constitute Shared Collateral and with respect to which the Controlling Agent
(or any of its agents) is named as a loss payee and/or (c) any other Shared Collateral (such as
motor vehicles) with respect to which a secured party must be listed on a certificate of title in
order to perfect a Lien thereon. Possessory Collateral includes any Certificated Securities,
Promissory Notes, Instruments, and Chattel Paper, in each case, delivered to or in the possession
of the Controlling Agent under the terms of the Applicable Collateral Documents. All capitalized
terms used in this definition and not defined elsewhere in this Agreement have the meanings
assigned to them in the UCC.

          “Proceeds” shall have the meaning assigned to such term in Section 2.01(a).

          “Reduction” means, when applied to any Senior Facility, (a) the permanent repayment of
outstanding loans under such Senior Facility, (b) the permanent reduction of outstanding
lending commitments under such Senior Facility or (c) the permanent cash collateralization of
outstanding letters of credit under such Senior Facility (together with the termination of any
lending commitments utilized by such letters of credit).

8

 

          “Reduction Event” means any Asset Sale or Casualty Event.

          “Refinance” means, with respect to any issuance of indebtedness, to replace, renew,
extend, refinance, repay, refund, repurchase, redeem, defease or retire, or to issue
Indebtedness in exchange or as a replacement therefor, including any successive Refinancing.
“Refinanced” and “Refinancing” shall have correlative meanings.

          “Registered Equivalent Notes” means, with respect to any notes originally issued in a Rule
144A or other private placement transaction under the Securities Act of 1933, substantially
identical notes (having the same Guarantees) issued in a dollar for dollar exchange therefor
pursuant to an exchange offer registered with the SEC.

          “Related Parties” means, with respect to any specified Person, such Person’s Affiliates and
the directors, officers, employees, agents, trustees and advisors of such Person and such Person’s
Affiliates.

          “SEC” means the United States Securities and Exchange Commission and any successor agency
thereto.

          “Security Agreement” means (a) with respect to the Senior Loan Obligations, the Senior Loan
Security Agreement, (b) with respect to the Note Obligations, the Notes Security Agreement, and (c)
with respect to any Series of Additional Senior Debt, the security agreement, by and among
Hercules, the Guarantors party thereto and the Senior Representative in respect of such Series of
Additional Senior Debt, in each case, as may be amended, modified or supplemented from time to
time.

          “Senior Class Debt” shall have the meaning assigned to such term in Section 5.12.

          “Senior
Class Debt Parties” shall have the meaning assigned to such term in Section 5.12.

          “Senior Class Debt Representative” shall have the meaning assigned to such term in Section
5.12.

          “Senior Credit Agreement” means the Credit Agreement, dated as of July 11, 2007, as amended,
restated or otherwise modified from time to time or Refinanced from time to time by one or more
Credit Facilities that are secured by the Collateral on the same priority basis as the Senior
Credit Agreement as in effect prior to such Refinancing, among Hercules, the Subsidiary Guarantors
party thereto, the Senior Lenders, UBS AG, Stamford Branch, as issuing bank, administrative agent
and collateral agent, Deutsche Bank AG Cayman Islands Branch and Jefferies Financial LLC, as
co-documentation agents, and UBS Loan Finance LLC, as swingline lender, and the other parties
thereto. In the event the Senior Credit Agreement is Refinanced in part (and not in whole), and the
Senior Credit Agreement in effect prior to such Refinancing (the “Existing Credit Agreement”)
remains effective after the consummation of such Refinancing, (i) the Existing Credit Agreement
shall constitute the “Senior Credit Agreement” and the Obligations of the Obligors in respect
thereof shall constitute “Senior Loan Obligations” for all purposes of this Agreement, (ii) each of
the Credit Facilities that are effectuated pursuant to such

9

 

Refinancing (other than the Existing Credit Agreement) shall be deemed to be an Additional Senior
Debt Facility and the Obligations of the Obligors in respect thereof shall constitute “Additional
Senior Debt Obligations” for all purposes of this Agreement and (iii) the Authorized Representative
under the Existing Credit Agreement shall continue as the Bank Collateral Agent and the Controlling
Agent until the occurrence of the Senior Loan Obligations Payment Date.

          “Senior Debt Documents” means (a) the Senior Loan Documents and (b) the Additional Senior
Debt Documents.

          “Senior Facilities” means the Senior Credit Agreement and any Additional Senior Debt
Facilities.

          “Senior Lender” means a “Lender” as defined in the Senior Credit Agreement.

          “Senior Lien” means the Liens on the Collateral in favor of the Senior Secured Parties
under the Collateral Documents.

          “Senior Loan Collateral Documents” means the Senior Loan Security
Agreement, the Senior Loan Ship Mortgages, the Senior Loan Trademark Security Agreement, this
Agreement and each other security document or pledge agreement executed by Hercules or any
Subsidiary Guarantor and delivered in accordance with applicable local or foreign law to grant a
valid, perfected security interest in any property as collateral for the Senior Loan Obligations,
in each case, as amended, restated or otherwise modified from time to time.

          “Senior Loan Documents” means the Senior Credit Agreement, any promissory notes issued to any
Senior Lender pursuant to the Senior Credit Agreement, the Senior Loan Collateral Documents and
the other “Loan Documents” (as defined in the Senior Credit Agreement).

          “Senior Loan Obligations Payment Date” means the date on which (a) the Senior Loan Obligations
have been paid in full in cash, (b) all lending commitments under the Senior Credit Agreement have
been terminated and (c) there are no outstanding letters of credit issued under the Senior Credit
Agreement other than such as have been fully cash collateralized under documents and arrangements
satisfactory to the issuer of such letters of credit.

          “Senior Loan Obligations” means all Obligations of the Obligors under the Senior Credit
Agreement, including (a) (i) obligations of Hercules and the Subsidiary Guarantors from time to
time arising under or in respect of the due and punctual payment of (x) the principal of and
premium, if any, and interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in
such proceeding) on the loans made under the Senior Credit Agreement, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (y) each payment
required to be made by Hercules and the Subsidiary Guarantors under the Senior Credit Agreement in
respect of any letter of credit issued under the Senior Credit Agreement, when and as due,
including payments in respect of reimbursement obligations, interest thereon and obligations to
provide cash collateral and (z) all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct,

10

 

contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of Hercules and the Subsidiary Guarantors under the Senior Credit
Agreement and the related loan documents, and (ii) the due and punctual performance of all
covenants, agreements, obligations and liabilities of Hercules and the Subsidiary Guarantors or
pursuant to the Senior Credit Agreement and the related loan documents, (b) the due and punctual
payment and performance of all obligations of Hercules and the Subsidiary Guarantors under each
Hedging Agreement entered into with any counterparty that is a Senior Loan Secured Party that was
an agent or a lender or an Affiliate of an agent or a lender under the Senior Credit Agreement at
the date such Hedging Agreement was entered into and (c) the due and punctual payment and
performance of all obligations of Hercules and the Subsidiary Guarantors (including overdrafts and
related liabilities) under each Treasury Services Agreement entered into with any counterparty that
is a Senior Loan Secured Party that was an agent or a lender or an Affiliate of an agent or a
lender under the Senior Credit Agreement at the date such Treasury Services Agreement was entered
into.

          “Senior Loan Secured Parties” means, collectively, (a) the administrative agent, the
collateral agent, each other agent, the lenders and the issuing bank, in each case, under the
Senior Credit Agreement, (b) each counterparty to a Hedging Agreement or Treasury Services
Agreement if at the date of entering into such Hedging Agreement or Treasury Services Agreement
such person was an agent or a lender under the Senior Credit Agreement or an Affiliate of an agent
or a lender under the Senior Credit Agreement, and (b) any other Secured Party (as defined in the
Senior Credit Agreement), and the successors and permitted assigns of each of the foregoing.

          “Senior Loan Security Agreement” means Security Agreement, dated as of July 11, 2007, among
Hercules and the Subsidiary Guarantors party thereto and the Bank Collateral Agent for the benefit
of the Senior Loan Secured Parties, as amended, restated or otherwise modified from time to time.

          “Senior Loan Ship Mortgage” means any of the first preferred mortgages or first preferred
fleet mortgages of a vessel or vessels delivered by Hercules or any Subsidiary Guarantor in favor
of Wilmington Trust Company, as mortgage trustee, for the benefit of the Bank Collateral Agent on
behalf of the Senior Loan Secured Parties, as amended, restated or otherwise modified from time to
time.

          “Senior Loan Trademark Security Agreement” mean the Trademark Security Agreement dated as of
July 11, 2007, by and among the Bank Collateral Agent, Hercules, Cliffs Drilling Company and the
other grantors party thereto, as amended, restated or otherwise modified from time to time.

          “Senior Obligations” means the Senior Loan Obligations and any Additional Senior Debt
Obligations.

          “Senior Representative” means (i) in respect of a Senior Facility, the trustee,
administrative agent, collateral agent, security agent or similar agent under such Senior
Facility, as the case may be, which Person shall also be the Authorized Representative for such
Senior

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Facility and each of their successors in such capacities and (ii) in respect of the Indenture,
the Notes Collateral Agent.

          “Senior Secured Parties” means, collectively, (i) the Senior Loan Secured Parties, (ii) the
Additional Senior Debt Parties of each Series of Senior Obligations for which a Collateral
Suspension is not in effect and (iii) the Notes Secured Parties so long as a Collateral
Suspension is not in effect with respect to the Note Obligations.

          “Series” means (a) with respect to any Senior Obligations, each of (i) the Senior Loan
Obligations and (ii) the Additional Senior Debt Obligations incurred pursuant to any Additional
Senior Debt Facility, which pursuant to any Joinder Agreement, are to be represented hereunder by a
common Authorized Representative (in its capacity as such for such Additional Senior Debt
Obligations) and (b) with respect to the Senior Secured Parties holding Senior Obligations, each of
(i) the Senior Loan Secured Parties (in their capacities as such) and (ii) the Additional Senior
Debt Parties that become subject to this Agreement after the date hereof that are represented by a
common Authorized Representative (in its capacity as such for such Additional Senior Debt Parties).

          “Shared Collateral” means, at any time, Collateral in which the Notes Collateral Agent (unless
a Collateral Suspension is in effect) and the holders of one or more Series of Senior Obligations
(or their respective Authorized Representatives) hold a valid and perfected security interest at
such time. If more than two Series of Senior Obligations are outstanding at any time and the
holders of fewer than all Series of Senior Obligations hold a valid and perfected security interest
in any Collateral at such time, then such Collateral shall constitute Shared Collateral for those
Series of Senior Obligations the holders of which hold a valid and perfected security interest in
such Collateral at such time and shall not constitute Shared Collateral for any Series of Senior
Obligations the holders of which do not have a valid and perfected security interest in such
Collateral at such time. Notwithstanding the foregoing, (i) all cash and cash equivalents held by
the Senior Lenders, the administrative agent under the Senior Credit Agreement or the Bank
Collateral Agent to cash collateralize letters of credit issued under the Senior Credit Agreement
or all proceeds of an event (including, without limitation, a Reduction Event or issuance of Equity
Interests or Indebtedness) requiring a Reduction of the Senior Facilities under the Senior Credit
Agreement which are deposited into an escrow account in accordance with the terms of the Senior
Credit Agreement and (ii) funds deposited for the discharge or defeasance of the Note Obligations
or Additional Senior Debt Obligations permitted under the Note Documents and the Senior Debt
Documents, shall not, in either case, constitute Shared Collateral.

          “Ship Mortgages” means the Senior Loan Ship Mortgages, the Notes Ship Mortgages and any
other preferred mortgages or first preferred fleet mortgages of a vessel or vessels delivered by
Hercules or any Subsidiary Guarantor in favor of Wilmington Trust Company, as mortgage trustee,
securing Senior Obligations or in favor of the Notes Collateral Agent, as mortgage trustee,
securing the Note Obligations, as the case may be.

          “Subsidiary” means, with respect to any person (the “parent”) at any date, (i) any person the
accounts of which would be consolidated with those of the parent in the parent’s consolidated
financial statements if such financial statements were prepared in accordance with

12

 

GAAP as of such date, and (ii) any other corporation, limited liability company, partnership,
association or other business entity of which securities or other ownership interests representing
more than 50% of the voting power of all Equity Interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Board of Directors or other
governing body thereof are, as of such date, owned, controlled or held by the parent and/or one or
more subsidiaries of the parent. Unless the context requires otherwise, “Subsidiary” refers to a
Subsidiary of Hercules.

          “Subsidiary Guarantor” shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.

          “Treasury Services Agreement” means any agreement relating to commercial credit cards, stored
value cards, treasury management services, depositary management services and cash management
services (including controlled disbursement, automated clearinghouse transactions, return items,
overdraft and interstate depository network services).

          “Uniform Commercial Code” or “UCC” means, unless otherwise specified, the Uniform Commercial
Code as from time to time in effect in the State of New York.

ARTICLE II

Priorities and Agreements with respect to Shared Collateral

          SECTION 2.01 Priority of Claims.

          (a) Anything contained herein or in any of the Senior Debt Documents or the Note Documents to
the contrary notwithstanding (but subject to Sections 1.01(b) and 2.01(d) and (e)), if an Event of
Default has occurred and is continuing, and the Controlling Agent or any Senior Secured Party is
taking action to enforce rights in respect of any Shared Collateral, or any distribution is made in
respect of any Shared Collateral in any Bankruptcy Proceeding of Hercules or any Subsidiary
Guarantor or any Senior Secured Party receives any payment with respect to any Shared Collateral or
the proceeds of any sale, collection or other liquidation of any such Shared Collateral by the
Controlling Agent or any other Senior Secured Party in connection with the enforcement of any right
it may have in respect of any Shared Collateral (or received by the Bank Collateral Agent or any
other Senior Secured Party pursuant to any intercreditor agreement with respect to such Shared
Collateral in connection with such enforcement), as applicable, the proceeds of any such
distribution or payment (all proceeds of any sale, collection or other liquidation of any
Collateral and all proceeds of any such distribution being collectively referred to as “Proceeds”),
shall (subject, in the case of any such distribution or payment, to the final sentence of this
Section 2.01(a)) be applied (A) FIRST, to the fees and expenses of, and reimbursements and
indemnification owed to, the Controlling Agent under this Agreement and under the Senior Debt
Documents or Note Documents, as applicable, to which it is a party that are unpaid as of the
applicable date of receipt of such proceeds, and to any Senior Secured Party which has theretofore
advanced or paid any such fees and expenses of, and reimbursements and indemnification owed to, the
Controlling Agent in an amount equal to the amount thereof so advanced or paid by such Senior
Secured Party, (B) SECOND, to the fees and expenses of, and reimbursements and indemnification owed
to, the Bank Collateral Agent pursuant to the Senior

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Credit Agreement that do not relate to the Collateral or the exercise of rights and remedies with
respect to thereto (which would be the subject of clause FIRST above) and, unless a Collateral
Suspension with respect to the Note Obligations or any Series of Additional Senior Debt is in
effect, in which case the Authorized Representative of the Note Obligations or such Series, as the
case may be, shall receive no amounts under this clause (B), to the Authorized Representative of
the Note Obligations pursuant to the Note Documents and each Series of Additional Senior Debt
pursuant to the Additional Senior Debt Facilities and the Applicable Collateral Documents, in each
case, pro rata based on the amount of such fees, expenses, reimbursements and indemnification
amounts, (C) THIRD, subject to Sections 1.01(b) and 2.01(d) and (e), to the payment of the Senior
Obligations (including, without limitation, obligations to cash collateralize letters of credit)
and the Note Obligations (unless a Collateral Suspension is in effect in respect of the Note
Obligations or any Series of Senior Obligations, in which case the Note Obligations or the Series
of Senior Obligations that is the subject of a Collateral Suspension, as the case may be, shall
receive no amounts under this Clause (C)) then due and owing, pro rata based on the amount of
Senior Obligations and the Note Obligations (unless a Collateral Suspension is in effect in respect
of the Note Obligations or any Series of Senior Obligations, in which case the amount of Note
Obligations or the Series of Senior Obligations that is the subject of a Collateral Suspension, as
the case may be, shall be excluded for purposes of this Clause (C)) then due and owing (after
giving effect to any payments previously made under this Section), and (D) FOURTH, to Hercules and
the Subsidiary Guarantors or their successors or assigns, as their interests may appear, or to
whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may
direct. Notwithstanding the foregoing, with respect to any Shared Collateral for which a third
party (other than a Senior Secured Party) has a lien or security interest that is junior in
priority to the security interest of the Note Obligations or any Series of Senior Obligations but
senior (as determined by appropriate legal proceedings in the case of any dispute) to the security
interest of the Note Obligations or any other Series of Senior Obligations (such third party an
“Intervening Creditor”), the value of any Shared Collateral or Proceeds which are allocated to such
Intervening Creditor shall be deducted on a ratable basis solely from the Shared Collateral or
Proceeds to be distributed in respect of the Note Obligations or the Series of Senior Obligations
with respect to which such third party lien or security interest exists.

          (b) It is acknowledged that the Note Obligations and the Senior Obligations of any Series may,
subject to the limitations set forth in the then extant Note Documents and Senior Debt Documents,
be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded,
Refinanced or otherwise amended or modified from time to time, all without affecting the priorities
set forth in Section 2.01(a) or the provisions of this Agreement defining the relative rights of
the Notes Secured Parties or the Senior Secured Parties of any Series.

          (c) Notwithstanding the date, time, method, manner or order of grant, attachment or perfection
of any Liens securing the Note Obligations or any Series of Senior Obligations granted on the
Shared Collateral and notwithstanding any provision of the Uniform Commercial Code of any
jurisdiction, or any other applicable law, the Note Documents or the Senior Debt Documents or any
defect or deficiencies in the Liens securing the Note Obligations or the Senior Obligations of any
Series or any other circumstance whatsoever (but, in each case, subject to Sections 1.01(b) and
2.01(d) and (e)), each Senior Secured Party hereby agrees that the Liens

14

 

securing the Note Obligations and each Series of Senior Obligations on any Shared Collateral
shall be pari passu and of equal priority.

          (d) Notwithstanding anything in this Agreement or the other Collateral Documents to the
contrary, (i) (A) any cash or cash equivalents held by the Senior Lenders, the administrative agent
under the Senior Credit Agreement or the Bank Collateral Agent to cash collateralize letters of
credit issued under the Senior Credit Agreement or (ii) (B) any proceeds of any event requiring a
Reduction of the Senior Facilities under the Senior Credit Agreement (including, without
limitation, a Reduction Event or issuance of Equity Interests or Indebtedness) which are deposited
into an escrow account in accordance with the terms of the Senior Credit Agreement will, in each
case, be applied in the manner specified in the Senior Credit Agreement and (ii) funds deposited
for the discharge or defeasance of the Note Obligations or any Additional Senior Debt Obligations
permitted under the Note Documents and the Senior Debt Documents will be applied in the manner
specified in the Note Documents or the Additional Senior Debt Document, as the case may be.

          (e) In the event that Hercules or any of its Subsidiaries shall at any time, or from time to
time, receive any Net Cash Proceeds of any Reduction Event, an amount equal to such Net Cash
Proceeds shall, in accordance with and to the extent required by the provisions of the Senior
Credit Agreement, be applied to the Reduction of the Senior Facilities established under the Senior
Credit Agreement. Net Cash Proceeds of a Reduction Event in excess of those applied in accordance
with the foregoing provision of this paragraph shall, if required pursuant to the terms of the
Notes Documents or any Additional Senior Debt Documents, be applied pro rata to the payment of the
Note Obligations and the Senior Obligations (other than the Senior Loan Obligations) then
outstanding in accordance with the terms of the Notes Documents or such Additional Senior Debt
Documents.

          SECTION 2.02 Actions With Respect to Shared Collateral; Prohibition on Contesting Liens.

          (a) With respect to any Shared Collateral, (i) only the Controlling Agent shall act or refrain
from acting with respect to the Shared Collateral (including with respect to any intercreditor
agreement with respect to any Shared Collateral) and shall have the right to instruct the
Authorized Representatives of the Non-Controlling Secured Parties to act or refrain from acting
with respect to the Shared Collateral, (ii) the Authorized Representatives of the Non-Controlling
Secured Parties shall follow all instructions with respect to such Shared Collateral (including
with respect to any intercreditor agreement with respect to any Shared Collateral) from any
representative of the Controlling Agent (and shall not comply with instructions with respect to
such Shared Collateral from any other Senior Secured Party (other than the Controlling Agent)) and
(iii) no Authorized Representative of any Non-Controlling Secured Party or other Senior Secured
Party (other than the Controlling Agent) shall, or shall have the right to, commence any judicial
or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver,
liquidator or similar official appointed for or over, attempt any action to take possession of,
exercise any right, remedy or power with respect to, or otherwise take any action to enforce its
security interest in or realize upon, or take any other action available to it in respect of, any
Shared Collateral (including with respect to any intercreditor agreement with respect to any Shared
Collateral), whether under any Collateral Document, applicable law or otherwise, it

15

 

being agreed that only the Controlling Agent shall be entitled to take any such actions or exercise
any such remedies with respect to Shared Collateral. Notwithstanding the equal priority of the
Liens, the Controlling Agent may deal with the Shared Collateral without regard to the equal
priority Lien of the Non-Controlling Secured Parties on such
Collateral. No Authorized Representative of any Non-Controlling Secured Party nor any Non-Controlling Secured Party will
contest, protest or object to any foreclosure proceeding or action brought by the Controlling
Agent or Controlling Secured Party or any other exercise by the Controlling Agent or Controlling
Secured Party of any rights and remedies relating to the Shared Collateral, or to cause the
Controlling Agent or Controlling Secured Party to do so. The foregoing shall not be construed to
limit the rights and priorities of any Senior Secured Party, the Controlling Agent or any
Authorized Representative with respect to any collateral not constituting Shared Collateral.

          (b) Each of the Authorized Representatives agrees that it will not accept any Lien on any
assets and properties of the Obligors for the benefit of the Senior Secured Parties of any Series
of Senior Obligations or the Notes Secured Parties (other than (i) Liens permitted under the Senior
Debt Documents and the Note Documents, (ii) funds deposited for the discharge or defeasance of Note
Obligations or any Additional Senior Debt Obligations permitted under the Note Documents and the
Senior Debt Documents, (iii) cash or cash equivalents held by the Senior Lenders, the
administrative agent under the Senior Credit Agreement or the Bank Collateral Agent to cash
collateralize letters of credit under the Senior Credit Agreement or (iv) the proceeds of any event
requiring a Reduction of the Senior Facilities established under the Senior Credit Agreement
(including, without limitation, a Reduction Event or issuance of Equity Interests or Indebtedness)
which are deposited into an escrow account in accordance with the terms of the Senior Credit
Agreement) unless the Senior Secured Parties of each other Series (other than a Series for which a
Collateral Suspension is then in effect) and the Notes Secured Parties (unless a Collateral
Suspension is then in effect) are granted an equal priority Lien on such assets and properties. In
connection with the acceptance of any Lien by any Authorized Representative on the assets or
properties of the Obligors, such Authorized Representative shall be entitled to accept such Lien in
reliance on a certificate of an authorized officer of Hercules stating that (x) such Lien is
permitted under the Senior Debt Documents and the Note Documents and (y) acceptance of such Lien is
permitted by the terms of this Agreement.

          (c) Each Authorized Representative on behalf of each Senior Secured Party represented by such
Authorized Representative (and each such Senior Secured Party by its acceptance of the benefits of
the Senior Debt Documents and the Note Documents) agrees that it will not (and hereby waives any
right to) contest or support any other Person in contesting, in any proceeding (including any
Insolvency or Liquidation Proceeding), the perfection, priority, validity, attachment, or
enforceability of a Lien held by or on behalf of any of the Senior Secured Parties in all or any
part of the Collateral; provided that nothing in this Agreement shall be construed to prevent or
impair the rights of any of the Controlling Agent or any Authorized Representative to enforce this
Agreement.

          SECTION 2.03 No Interference; Payment Over.

          (a) Each Senior Secured Party agrees that (i) it will not challenge in any proceeding the
validity or enforceability of any Senior Obligations of any Series, the Note Obligations or any
Collateral Document or the validity or enforceability of the priorities, rights

16

 

or duties established by or other provisions of this Agreement; (ii) it will not take or cause to
be taken any action the purpose or intent of which is, or could be, to interfere, hinder or delay,
in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other
disposition of the Shared Collateral by the Controlling Agent, (iii) except as provided in Section
2.02, it shall have no right to (A) direct any other Senior Secured Party to exercise any right,
remedy or power with respect to any Shared Collateral (including pursuant to any intercreditor
agreement) or (B) consent to the exercise by the Controlling Agent or any other Senior Secured
Party of any right, remedy or power with respect to any Shared Collateral, (iv) it will not
institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim
against the Controlling Agent or any other Senior Secured Party seeking damages from or other
relief by way of specific performance, instructions or otherwise with respect to any Shared
Collateral, and none of the Controlling Agent or any other Senior Secured Party shall be liable for
any action taken or omitted to be taken by the Controlling Agent or other Senior Secured Party with
respect to any Shared Collateral in accordance with the provisions of this Agreement, and (v) it
will not seek, and hereby waives any right, to have any Shared Collateral or any part thereof
marshaled upon any foreclosure or other disposition of such
Collateral; provided that nothing in
this Agreement shall be construed to prevent or impair the rights of any of the Controlling Agent
or any other Senior Secured Party to enforce this Agreement.

          (b) Each Authorized Representative on behalf of each Senior Secured Party represented by such
Authorized Representative (and each such Senior Secured Party by its acceptance of the benefits of
the Senior Debt Documents and the Note Documents) hereby agrees that if it shall obtain possession
of any Shared Collateral or shall realize any proceeds or payment in respect of any such Shared
Collateral pursuant to any Collateral Document or by the exercise of any rights available to it
under applicable law or in any Insolvency or Liquidation Proceeding or through any other exercise
of remedies (including pursuant to any intercreditor agreement), then it shall hold such Shared
Collateral, proceeds or payment in trust for the other Senior Secured Parties and promptly transfer
such Shared Collateral, proceeds or payment, as the case may be, to the Controlling Agent, to be
distributed in accordance with the provisions of Section 2.01.

          SECTION 2.04 Automatic Release of Liens; Amendments to Collateral Documents.

          (a) All Shared Collateral used, sold, transferred or otherwise disposed of in accordance with
the terms of the Senior Debt Documents and the Note Documents, including any waiver or amendment
of such Senior Debt Documents or Note Documents that is permitted by the other Senior Debt
Documents and the Note Documents, will automatically be released from the Liens securing the
Senior Obligations and the Note Obligations in order for such use, sale, transfer or other
disposition may be made free of such Liens.

          (b) If, at any time the Controlling Agent forecloses upon or otherwise exercises remedies
against any Shared Collateral resulting in a sale or disposition thereof, then (whether or not any
Insolvency or Liquidation Proceeding is pending at the time) the Liens in favor of the Notes
Collateral Agent, for the benefit of the Notes Secured Parties, and Authorized Representatives, for
the benefit of each Series of Senior Secured Parties, upon such Shared

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Collateral
will automatically be released and discharged; provided that any proceeds of any
Shared Collateral realized therefrom shall be applied pursuant to Section 2.01.

          (c) Each Senior Secured Party agrees that the Controlling Agent may enter into any amendment,
waiver or consent to any Collateral Document in respect of the Series of Senior Obligations or the
Note Obligations for which it is the Authorized Representative, and such amendment, waiver or
consent shall apply automatically to any comparable provision of the Collateral Documents of the
Note Obligations and each other Series of Senior Obligations (the “Comparable Collateral
Documents”) without the consent of the Authorized Representatives of the Note Obligations or any
such other Series of Senior Obligations or the Notes Secured Parties or the holders of such other
Series of Senior Obligations and without any action by such Authorized Representatives, such
holders, Hercules or any other Obligor; provided that, (A) no such amendment, waiver or consent
shall have the effect of (i) removing all or substantially all of the assets subject to the Lien of
the Comparable Collateral Documents, (ii) imposing duties, obligations or liabilities on, or
amending or waiving any indemnity or exculpatory provision existing for the benefit of, any such
Authorized Representatives without its consent or (iii) permitting other Liens on the Shared
Collateral not permitted under the terms of the Senior Debt Documents governing such Series of
Senior Obligations, the Note Documents or this Agreement and (B) notice of such amendment, waiver
or consent shall have been given to each such Authorized Representative (provided that the failure
of any such notice to be given shall not (i) impair or affect the obligations of the Senior Secured
Parties (other than the Controlling Agent and the Controlling Secured Parties) to the Controlling
Agent, the other Authorized Representatives and the Controlling Secured Parties, the Controlling
Agent’s and each Authorized Representative’s rights under this Agreement, the enforceability of
this Agreement or any Liens created or granted under the Collateral Documents or (ii) limit or
impair the effectiveness or effect of any such amendment, waiver or consent or the automatic
application thereof to any comparable provision of the Comparable Collateral Document).

          (d) Each of the Authorized Representatives agrees to execute and deliver (at the sole cost
and expense of Hercules and the Subsidiary Guarantors) all such documents, authorizations and
other instruments and take such actions (and, by accepting the benefits of the Senior Debt
Documents and the Note Documents, each of the Senior Secured Parties shall be deemed to have
consented to and authorized its applicable Authorized Representative to execute and deliver any
such document, authorization or instrument and take such actions) as shall reasonably be requested
by the Controlling Agent to evidence, confirm and, to the extent necessary, effectuate any release
of Shared Collateral or amendment, waiver or consent to any applicable Collateral Document
provided for in this Section. No such document, authorization, or instrument shall impose on any
such Authorized Representative duties, obligations or liabilities in addition to those set forth
in the Collateral Documents, the Note Documents or the Senior Debt Documents, or amend or waive
any indemnity or exculpatory provision existing for the benefit of any such Authorized
Representative set forth in the Collateral Documents, the Note Documents or the Senior Debt
Documents.

          (e) In no event shall the Lien of the Controlling Agent or the Controlling Secured Parties on
the Shared Collateral be required to be released in the event that the Lien of the Note Obligations
or any other Series of Senior Obligations is released (including as a result of a Collateral
Suspension), except to the extent the release of the Lien of the Controlling Agent or

18

 

the Controlling Secured Parties is expressly required under the terms of the Collateral
Documents applicable to the Controlling Agent and the Controlling Secured Parties.

          SECTION 2.05 Certain Agreements With Respect to Bankruptcy or Insolvency Proceedings.

          (a) This Agreement shall continue in full force and effect notwithstanding the commencement
of any Bankruptcy Proceeding by or against Hercules or any of its Subsidiaries.

          (b) If Hercules or any Subsidiary Guarantor shall become subject to a Bankruptcy Proceeding
and shall, as debtor(s)-in-possession, move for approval of financing (“DIP Financing”) to be
provided by one or more lenders (the “DIP Lenders”) under Section 364 of the Bankruptcy Code or any
equivalent provision of any other Bankruptcy Law or the use of cash collateral under Section 363 of
the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law, each Senior Secured
Party agrees that it will raise no objection to any such financing or to the Liens on the Shared
Collateral securing the same (“DIP Financing Liens”) or to any use of cash collateral that
constitutes Shared Collateral, unless any Controlling Secured Party, or an Authorized
Representative of any Controlling Secured Party, shall then oppose or object to such DIP Financing
or such DIP Financing Liens or use of cash collateral (and (i) to the extent that such DIP
Financing Liens are senior to the Liens on any such Shared Collateral for the benefit of the
Controlling Secured Parties, each Non-Controlling Secured Party will subordinate its Liens with
respect to such Shared Collateral on the same terms as the Liens of the Controlling Secured Parties
(other than any Liens of any Senior Secured Parties constituting DIP Financing Liens) are
subordinated thereto, and (ii) to the extent that such DIP Financing Liens rank pari passu with the
Liens on any such Shared Collateral granted to secure the Note Obligations or the Senior
Obligations of the Controlling Secured Parties, each Non-Controlling Secured Party will confirm the
priorities with respect to such Shared Collateral as set forth herein), in each case so long as (A)
the Senior Secured Parties retain the benefit of their Liens on all such Shared Collateral pledged
to the DIP Lenders, including proceeds thereof arising after the commencement of such proceeding,
with the same priority vis-a-vis all the other Senior Secured Parties (other than any Liens of the
Senior Secured Parties constituting DIP Financing Liens) as existed prior to the commencement of
the Bankruptcy Proceeding, (B) the Senior Secured Parties are granted Liens on any additional
Collateral pledged to any Senior Secured Parties as adequate protection or otherwise in connection
with such DIP Financing or use of cash collateral, with the same priority vis-a-vis the Senior
Secured Parties as set forth in this Agreement, (C) if any amount of such DIP Financing or cash
collateral is applied to repay any of the Note Obligations or the Senior Obligations, such amount
is applied pursuant to Section 2.01, and (D) if any Senior Secured Parties are granted adequate
protection, including in the form of periodic payments, in connection with such DIP Financing or
use of cash collateral, the proceeds of such adequate protection are applied pursuant to Section
2.01; provided that the Notes Secured Parties and the Senior Secured Parties of any Series shall
have a right to object to the grant of a Lien to secure the DIP Financing over any collateral
subject to Liens in favor of the Notes Secured Parties or the Senior Secured Parties of such Series
or their respective Authorized Representatives, respectively, that shall not constitute Shared
Collateral; and provided, further, that the Senior Secured Parties receiving adequate protection
shall not object to any other Senior Secured Party receiving adequate protection comparable to any
adequate protection granted to such Senior Secured Parties in connection with a DIP Financing or
use of cash collateral.

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          SECTION 2.06 Reinstatement. In the event that any of the Senior Obligations or the Note
Obligations shall be paid in full in cash and such payment or any part thereof shall subsequently,
for whatever reason (including an order or judgment for disgorgement of a preference under Title
11 of the United States Code, or any similar law, or the settlement of any claim in respect
thereof), be required to be returned or repaid, the terms and conditions of this Article II shall,
subject to the provisions of Section 1.01(b), be fully applicable thereto until all such Senior
Obligations or Note Obligations, as the case may be, shall again have been paid in full in cash.

          SECTION 2.07 Insurance. As between the Senior Secured Parties, the Controlling Agent
shall have the right, to the extent authorized by the applicable Security Agreement, to adjust
or settle any insurance policy or claim covering or constituting Shared Collateral in the
event of any loss thereunder and to approve any award granted in any condemnation or similar
proceeding affecting the Shared Collateral.

          SECTION 2.08 Refinancings. The Senior Obligations of any Series or the Note Obligations may be
increased, restated, supplemented, restructured, Refinanced or otherwise amended or modified from
time to time, in whole or in part, with other Senior Obligations or Note Obligations (as the case
may be), in each case, without notice to, or the consent (except to the extent a consent is
otherwise required to permit the Refinancing transaction under any Senior Debt Document or Note
Document) of any Senior Secured Party of any other Series or any Notes Secured Party, all without
affecting the priorities provided for herein or the other provisions
hereof; provided that if any
such Refinancing Indebtedness is to be secured by the Shared Collateral, the Authorized
Representative of the holders of any such Refinancing indebtedness shall have executed a Joinder
Agreement on behalf of the holders of such Refinancing indebtedness.

          SECTION 2.09 Controlling Agent as Agent for Perfection.

          (a) The Controlling Agent agrees to hold, maintain, control or be listed as a secured party on
any certificate of title or as a loss payee with respect to any Shared Collateral constituting
Possessory Collateral in its possession or control or with respect to which it is listed as a
secured party or a loss payee (or in the possession or control of its agents or with respect to
which its agent is listed as a secured party or loss payee) as agent for the benefit of each other
Senior Secured Party and acknowledges that it holds and controls such Possessory Collateral in its
possession or control on behalf of each other Senior Secured Party (and for each other Senior
Secured Party’s benefit), in each case, solely for the purpose of perfecting the security interest
granted in such Possessory Collateral, if any, pursuant to the applicable Collateral Documents, in
each case, subject to the terms and conditions of this Section 2.09. Pending delivery to the
Controlling Agent, each other Authorized Representative agrees to hold any Shared Collateral
constituting Possessory Collateral, from time to time in its possession or control, as agent for
the benefit of each other Senior Secured Party and acknowledges that it holds and controls any such
Possessory Collateral in its possession or control on behalf of each other Senior Secured Party
(and for each other Senior Secured Party’s benefit), solely for the purpose of perfecting the
security interest granted in such Possessory Collateral, if any, pursuant to the applicable
Collateral Documents, in each case, subject to the terms and conditions of this Section 2.09.

20

 

          (b) The duties or responsibilities of the Controlling Agent and each other Authorized
Representative under this Section 2.09 shall be limited solely to holding, or being listed as a
secured party or loss payee under, any Shared Collateral constituting Possessory Collateral as
agent for the benefit of each other Senior Secured Party for purposes of perfecting the Lien held
by such Senior Secured Parties therein.

          (c) In the event that the Senior Loan Obligations Payment Date shall have occurred, then, at
the sole cost and expense of Hercules and the other Obligors, (i) the Bank Collateral Agent shall
deliver any Shared Collateral constituting Possessory Collateral in its possession or control (or
in the possession or control of its agents) to the Major Additional Senior Representative (and each
Authorized Representative hereby agrees to accept such Possessory Collateral in the event that it
is (or becomes) the Major Additional Senior Representative), and (ii) the Obligors, the Bank
Collateral Agent and the Major Additional Senior Representative shall take such commercially
reasonable actions as may be necessary to cause the Major Additional Senior Representative to be
listed as a secured party or a loss payee in respect of any other Possessory Collateral with
respect to which the Bank Collateral Agent (or its agents) is listed as secured party or loss
payee; provided that until the completion of such delivery or listing the Bank Collateral Agent
shall hold such Possessory Collateral as agent of the Major Additional Senior Representative solely
for the purpose of perfecting the security interest granted in such Possessory Collateral.

          (d) In the event that the Person acting as the Controlling Agent is replaced or succeeded by
another Person (as a result of the resignation by the Person acting as the Controlling Agent prior
to giving effect to such replacement or succession (other than as a result of the occurrence the
Senior Loan Obligations Payment Date)) (such Person, the “Existing Controlling Agent”), then, at
the sole cost and expense of Hercules and the other Obligors, (i) the Existing Controlling Agent
shall deliver any Shared Collateral constituting Possessory Collateral in its possession or control
(or in the possession or control of its agents) to the replacement or successor Controlling Agent
(the “Successor Controlling Agent”), and (ii) the Obligors, the Existing Collateral Agent and the
Successor Controlling Agent shall take such commercially reasonable actions as may be necessary to
cause the Successor Controlling Agent to be listed as a secured party or a loss payee in respect of
any other Possessory Collateral with respect to which the Existing Controlling Agent (or its
agents) is listed as secured party or loss payee; provided that until the completion of such
delivery or listing the Existing Controlling Agent shall hold such Possessory Collateral as nominee
of the Successor Controlling Agent.

ARTICLE III

Existence and Amounts of Liens and Obligations

          Whenever the Controlling Agent or any other Authorized Representative shall be required, in
connection with the exercise of its rights or the performance of its obligations hereunder, to
determine the existence or amount of any Senior Obligations of any Series or any Note Obligations,
or the Shared Collateral subject to any Lien securing the Senior Obligations of any Series or the
Note Obligations, it may request that such information be furnished to it in writing by each other
Authorized Representative and shall be entitled to make such determination on the basis of, and in
reliance on any statement or representation made on or in

21

 

respect
of, the information so furnished; provided, however, that if an Authorized Representative
shall fail or refuse reasonably promptly to provide the requested information, the requesting
Controlling Agent or Authorized Representative shall be entitled to make any such determination by
such method as it may, in the exercise of its good faith judgment, determine, including by reliance
upon a certificate of Hercules. The Controlling Agent and each
Authorized Representative may rely conclusively, and shall be fully protected in so relying, on any
information furnished to it or any determination made by it in accordance with this Article III (or
as otherwise directed by a court of competent jurisdiction) and shall have no liability to
Hercules, any Subsidiary Guarantor, any Senior Secured Party or any other Person as a result of
such determination. In the event that the Controlling Agent shall receive notice that any Person
shall have asserted an adverse claim in respect of any Lien on the Shared Collateral of any Senior
Secured Party or the proceeds or other amounts received or receivable in respect of the Shared
Collateral, the Controlling Agent may (i) suspend disbursement of such proceeds or other amounts
(and deposit such proceeds or other amounts into an account of the Controlling Agent), without any
liability to Hercules, any Subsidiary Guarantor, any Senior Secured Party or any other Person,
until the Controlling Agent shall have received an appropriate court order or other assurances
reasonably acceptable to the Controlling Agent in its sole discretion that establishes that such
proceeds or other amounts may be disbursed in accordance with this Agreement and/or (ii) interplead
such proceeds or other amounts as permitted by applicable law.

ARTICLE IV

The Controlling Agent

          SECTION 4.01 Appointment and Authority.

          (a) Each Senior Representative (other than the Bank Collateral Agent), on behalf of the Senior
Secured Parties represented by it, hereby irrevocably appoints the Bank Collateral Agent (and any
successor thereto as Controlling Agent pursuant to the definition of the term “Controlling Agent”)
to act on its behalf as the Controlling Agent hereunder and under the Collateral Documents and
authorizes the Controlling Agent to take such actions on its behalf and to exercise such powers as
are delegated to the Controlling Agent by the terms hereof, including for purposes of acquiring,
holding and enforcing any and all Liens on Shared Collateral granted by Hercules and any Subsidiary
Guarantor to secure any of the Senior Obligations and Note Obligations, together with such powers
and discretion as are reasonably incidental thereto. In this connection, the Controlling Agent and
any agents, sub-agents, attorneys-in-fact appointed by the Controlling Agent or other Persons
(including, without limitation, Wilmington Trust Company, as mortgage trustee) acting on behalf or
for the benefit of the Controlling Agent in respect of any Shared Collateral pursuant to Section
4.05 or under the Collateral Documents to which it is a party for purposes of holding or enforcing
any Lien on the Shared Collateral (or any portion thereof) granted under any of the Collateral
Documents, or for exercising any rights and remedies thereunder, shall be entitled to the benefits
of all provisions of this Article IV and Article IX of the Senior Credit Agreement and the
equivalent provision of the Indenture or any Additional Senior Debt Facility (as though such
agents, sub-agents and attorneys-in-fact were the “Controlling Agent” under the Collateral
Documents) as if set forth in full herein with respect thereto.

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          (b) Upon execution and delivery of an instrument substantially in the form of Annex 2 by an
additional Senior Class Debt Representative in accordance with Section 5.12, each then-existing
Senior Class Debt Representative (the “Existing Debt Representatives”) hereby authorizes and
directs the Controlling Agent to execute and deliver such instrument substantially in the form of
Annex 2 on behalf of all Existing Debt Representatives and acknowledges and agrees that upon
execution and delivery of such instrument substantially in the form of Annex 2 and such other
Collateral Documents, if any, the Controlling Agent will act in its capacity as Controlling Agent
for all Existing Debt Representatives and such additional Senior Class Debt Representative.

          (c) Each Authorized Representative on behalf of each Non-Controlling Secured Party represented
by such Authorized Representative (and each such Non-Controlling Secured Party by its acceptance of
the benefits of the Senior Debt Documents and the Note Documents) acknowledges and agrees that the
Controlling Agent shall be entitled, for the benefit of the Senior Secured Parties, to sell,
transfer or otherwise dispose of or deal with any Shared Collateral as provided herein and in the
Applicable Collateral Documents, without regard to any rights to which the Non-Controlling Secured
Parties would otherwise be entitled as a result of the Senior Obligations or Note Obligations held
by such Non-Controlling Secured Parties. Without limiting the foregoing, each Non-Controlling
Secured Party agrees that none of the Controlling Agent or any other Senior Secured Party shall
have any duty or obligation first to marshal or realize upon any type of Shared Collateral (or any
other Collateral securing any of the Senior Obligations or Note Obligations), or to sell, dispose
of or otherwise liquidate all or any portion of such Shared Collateral (or any other Collateral
securing any Senior Obligations or Note Obligations), in any manner that would maximize the return
to the Non-Controlling Secured Parties, notwithstanding that the order and timing of any such
realization, sale, disposition or liquidation may affect the amount of proceeds actually received
by the Non-Controlling Secured Parties from such realization, sale, disposition or liquidation.
Each Authorized Representative on behalf of each Senior Secured Party represented by such
Authorized Representative (and each such Senior Secured Party by its acceptance of the benefits of
the Senior Debt Documents and the Note Documents) waives any claim it may now or hereafter have
against the Controlling Agent or the Authorized Representative of the Note Obligations or any other
Series of Senior Obligations or any other Senior Secured Party arising out of (i) any actions which
the Controlling Agent, any Authorized Representative or any Senior Secured Party takes or omits to
take (including actions with respect to the creation, perfection or continuation of Liens on any
Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or
failure to realize upon, any of the Collateral and actions with respect to the collection of any
claim for all or any part of the Senior Obligations or Note Obligations from any account debtor,
guarantor or any other party) in accordance with the applicable Collateral Documents or any other
agreement related thereto or to the collection of the Senior Obligations or Note Obligations or the
valuation, use, protection or release of any security for the Senior Obligations or Note
Obligations, (ii) subject to Section 2.05, any election by any Controlling Agent, any Authorized
Representative or any holders of Senior Obligations or Note Obligations, in any proceeding
instituted under the Bankruptcy Code or the application of Section 1111(b) of the Bankruptcy Code
or (iii) subject to Section 2.05, any borrowing by, or grant of a security interest or
administrative expense priority under Section 364 of the Bankruptcy Code by, Hercules or any of its
subsidiaries, as debtor-in-possession. Notwithstanding any other provision of this Agreement, the
Controlling Agent shall not accept any Shared Collateral in full or partial satisfaction of any

23

 

Senior Obligations or Note Obligations pursuant to Section 9-620 of the Uniform Commercial
Code of any jurisdiction, without the consent of each Authorized Representative representing
holders of Senior Obligations or Note Obligations for whom such Collateral constitutes Shared
Collateral.

          (d) The Controlling Agent’s sole duty with respect to the custody, safekeeping and physical
preservation of the Shared Collateral in its possession, under Section 9-207 of the UCC or
otherwise, shall be to deal with it in the same manner as the Controlling Agent deals with similar
property for its own account. The Controlling Agent shall be deemed to have exercised reasonable
care in the custody and preservation of any Shared Collateral in its possession if such Shared
Collateral is accorded treatment substantially equal to that which the Controlling Agent accords
its own property. Neither the Controlling Agent, any other Senior Secured Party nor any of their
respective officers, directors, employees or agents shall be liable for failure to demand, collect
or realize upon any of the Shared Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Shared Collateral upon the request of any Obligor
or any other Person or to take any other action whatsoever with regard to the Shared Collateral or
any part thereof. The powers conferred on the Controlling Agent and the other Senior Secured
Parties hereunder are solely to protect the Controlling Agent’s and the other Senior Secured
Parties’ interests in the Shared Collateral and shall not impose any duty upon the Controlling
Agent or any other Senior Secured Party to exercise any such powers.

          (e) Upon the occurrence of the Senior Loan Obligations Payment Date, the Major Additional
Senior Representative shall be the “Controlling Agent” for all purposes of this Agreement and,
except as expressly set forth herein, the Bank Collateral Agent shall be released from all of its
obligations hereunder as “Controlling Agent”.

          SECTION 4.02 Rights as a Senior Secured Party.

     The Person serving as the Controlling Agent or as an Authorized Representative hereunder shall
have the same rights and powers in its capacity as a Senior Secured Party under any Series of
Senior Obligations or the Note Obligations, as applicable, that it holds as any other Senior
Secured Party of such Series or as any other Notes Secured Party and may exercise the same as
though it were not the Controlling Agent or an Authorized Representative, as applicable, and the
term “Senior Secured Party” or “Senior Secured Parties” or (as applicable) “Senior Loan Secured
Party”, “Senior Loan Secured Parties”, “Notes Secured Party”, “Notes Secured Parties”, “Additional
Senior Debt Party” or “Additional Senior Debt Parties” shall, unless otherwise expressly indicated
or unless the context otherwise requires, include the Person serving as the Controlling Agent or an
Authorized Representative hereunder in its individual capacity. Such Person and its Affiliates may
accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with Hercules or any Subsidiary or other Affiliate
thereof as if such Person were not the Controlling Agent or an Authorized Representative hereunder
and without any duty to account therefor to any other Senior Secured Party.

24

 

          SECTION 4.03 Exculpatory Provisions.

          (a) Neither the Controlling Agent nor any other Authorized Representative shall have any
duties or obligations except those expressly set forth herein and in the Collateral Documents in
respect of the Series of Senior Obligations or Note Obligations for which it is the Authorized
Representative (the “Applicable Collateral Documents”). Without limiting the generality of the
foregoing, neither the Controlling Agent nor any other Authorized Representative:

	 	(i)	 	shall be subject to any fiduciary or other implied duties, regardless of whether
a Default has occurred and is continuing;
	 
	 	(ii)	 	shall have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated
hereby or by the Applicable Collateral Documents that the Controlling Agent or such
other Authorized Representative is required to exercise as directed in writing by,
in the case of the Controlling Agent, the Controlling Secured Parties or, in the
case of such other Authorized Representative, the requisite number of holders of the
applicable Series of Senior Obligations or Note Obligations, as applicable, in
accordance with the Applicable Collateral Documents; provided that neither
the Controlling Agent nor such other Authorized Representative shall be required to
take any action that, in its opinion or the opinion of its counsel, may expose the
Controlling Agent or such other Authorized Representative to liability or that is
contrary to any such Applicable Collateral Documents or applicable law;
	 
	 	(iii)	 	shall, except as expressly set forth herein and in the Applicable Collateral
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to Hercules, any of its Subsidiaries or any of
its Affiliates that is communicated to or obtained by the Person serving as the
Controlling Agent or such Authorized Representative or any of its Affiliates in any
capacity;
	 
	 	(iv)	 	shall be liable for any action taken or not taken by it (i) with the consent or
at the request of, in the case of the Controlling Agent, the Controlling Secured
Parties or, in the case of such other Authorized Representative, the requisite
number of holders of the applicable Series of Senior Obligations or Note
Obligations, as applicable, in accordance with the Applicable Collateral Documents
or (ii) in the absence of its own gross negligence or willful misconduct (it being
understood that each action taken or not taken shall be presumed to have been taken
(or not taken) in the absence of gross negligence or willful misconduct unless a
court of competent jurisdiction finds in a final judgment that such action taken (or
not taken) constituted gross negligence or willful misconduct), (iii) in reliance on
a certificate of an authorized officer of Hercules stating that such action is
permitted by the terms of this Agreement, any Senior Debt Document or any Note
Document, as the case may be, or (iv) in accordance with the advice of any counsel,

25

 

	 	 	 	accountants or experts as described in Section 4.04. Neither the Controlling
Agent nor such other Authorized Representative shall be deemed to have
knowledge of any Event of Default under any Series of Senior Obligations or the
Note Obligations unless and until notice describing such Event Default is
given, as applicable, (x) to the Controlling Agent by the Authorized
Representative of such Senior Obligations or the Note Obligations or Hercules
or (y) to such other Authorized Representative by Hercules; and

	 	(v)	 	shall be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this Agreement
or any other Collateral Document or any Senior Debt Document or Note Document, (ii)
the contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default or Event of Default under
any Senior Debt Document or Note Document, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Collateral Document, any
Senior Debt Document, any Note Document or any other agreement, instrument or
document, or the creation, perfection or priority of any Lien purported to be
created by the Collateral Documents, (v) the value or the sufficiency of any
Collateral for any Series of Senior Obligations or the Note Obligations, or (vi) the
satisfaction of any condition set forth in any Senior Debt Document or Note
Document, other than to confirm receipt of items expressly required to be delivered
to the Controlling Agent.

          SECTION 4.04 Reliance by the Controlling Agent and the Authorized Representatives.

          Each of the Controlling Agent and each Authorized Representatives shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing (including any electronic message,
Internet or intranet website posting or other distribution) believed by it to be genuine and to
have been signed, sent or otherwise authenticated by the proper Person. Each of the Controlling
Agent and each Authorized Representative also may rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. Each of the Controlling Agent and Authorized Representative may
consult with legal counsel (who may be counsel for Hercules), independent accountants and other
experts selected by it, and neither the Controlling Agent nor any Authorized Representative shall
be liable for any action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

          SECTION 4.05 Delegation of Duties.

          The Controlling Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Applicable Collateral Document by or through any one or more
sub-agents appointed by the Controlling Agent or other Persons acting on behalf

26

 

or for the benefit of the Controlling Agent in respect of any Shared Collateral under the
Collateral Documents to which it is a party (including, without limitation, Wilmington Trust
Company, as mortgage trustee, with respect to Ship Mortgages). The Controlling Agent and any such
sub-agent or such Person may perform any and all of its duties and exercise its rights and powers
by or through their respective Affiliates. The exculpatory provisions of this Article shall apply
to any such sub-agent or Person and to the Affiliates of the Controlling Agent and any such
sub-agent or Person. If any sub-agent appointed by the Controlling Agent has possession or control
of any Possessory Collateral, the Controlling Agent shall cause the sub-agent to acknowledge in
writing that it holds such Possessory Collateral for the benefit of the Senior Secured Parties.

          SECTION 4.06 Non-Reliance on Controlling Agent and other Senior Secured Parties.

          Each Authorized Representative of the Note Obligations and each Series of Additional Senior
Debt and each Notes Secured Party and Additional Senior Debt Party acknowledges that it has,
independently and without reliance upon the Controlling Agent, any Authorized Representative or any
other Senior Secured Party or any of their Affiliates and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter into this
Agreement, the Note Documents and the other Senior Debt Documents. Each such Person also
acknowledges that it will, independently and without reliance upon the Controlling Agent, any
Authorized Representative or any other Senior Secured Party or any of their Affiliates and based on
documents and information as it shall from time to time deem appropriate, continue to make its own
decisions in taking or not taking action under or based upon this Agreement, any Note Document, any
other Senior Debt Document or any related agreement or any document furnished hereunder or
thereunder.

          SECTION 4.07 Collateral and Guaranty Matters.

          Each Authorized Representative on behalf of each Senior Secured Party represented by such
Authorized Representative (and each such Senior Secured Party by its acceptance of the benefits
of the Senior Debt Documents and Note Documents) irrevocably authorizes the Controlling Agent, at
its option and in its discretion, to release any Lien on any property granted to or held by the
such Senior Secured Party (or its Authorized Representative) under any Collateral Document
governing the Series of Senior Obligations of such Senior Secured Party or the Note Obligations
in accordance with Section 2.04 or upon receipt of a written request from Hercules stating that
the release of such Lien is permitted by the terms of each then extant Senior Debt Document and
Note Document.

          SECTION 4.08 Resignation of Bank Collateral Agent.

          Each of the Senior Secured Parties acknowledges that the Bank Collateral Agent may resign as
collateral agent under the Senior Credit Agreement, in which event a successor collateral agent may
be appointed under the Senior Credit Agreement; provided that if no such successor shall have been
so appointed under the terms thereof, then such resignation may nonetheless become effective and
the retiring Bank Collateral Agent shall be discharged from its duties and obligations thereunder,
under the Senior Loan Documents and under this Agreement

27

 

(except that in the case of any collateral security held by the retiring Bank Collateral Agent, the
retiring Bank Collateral Agent shall continue to hold such collateral security as nominee until
such time as a successor collateral agent is appointed). Upon the acceptance of a successor’s
appointment as collateral agent under the Senior Credit Agreement, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the retiring (or
retired) Bank Collateral Agent, and the retiring Bank Collateral Agent shall be discharged from all
of its duties and obligations under the Senior Credit Agreement, under the Senior Loan Documents
and under this Agreement (if not already discharged therefrom as provided above in this paragraph).

ARTICLE V

Miscellaneous

          SECTION 5.01 Notices. All notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

          (a) if to the Bank Collateral Agent, to it at UBS AG, Stamford Branch, 677 Washington
Boulevard, Stamford, Connecticut 06901, Attention: Omar Musule, Telecopy No.: (203) 719-4176,
Email: DL-UBSAgency@ubs.com;

          (b) if to the Notes Collateral Agent, to it at U.S. Bank National Association, 5555 San
Felipe, Suite 1150, Houston, Texas 77056, Attention of Corporate Trust Services, Telecopy No. (713)
235-9213;

          (c) if to any other Senior Representative, to it at the address set forth in the
applicable Joinder Agreement.

Any party hereto may change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto. All notices and other communications given to any
party hereto in accordance with the provisions of this Agreement shall be deemed to have been given
on the date of receipt (if a Business Day) and on the next Business Day thereafter (in all other
cases) if delivered by hand or overnight courier service or sent by telecopy or on the date five
Business Days after dispatch by certified or registered mail if mailed, in each case delivered,
sent or mailed (properly addressed) to such party as provided in this Section 5.01 or in accordance
with the latest unrevoked direction from such party given in accordance with this Section 5.01. As
agreed to in writing among the Controlling Agent and each other Authorized Representative from time
to time, notices and other communications may also be delivered by e-mail to the e-mail address of
a representative of the applicable person provided from time to time by such person.

          SECTION 5.02 Waivers; Amendment; Joinder Agreements.

          (a) No failure or delay on the part of any party hereto in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such
right or power, or any abandonment or discontinuance of steps to enforce such a right or

28

 

power, preclude any other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to
any departure by any party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice or demand on any party
hereto in any case shall entitle such party to any other or further notice or demand in similar or
other circumstances.

          (b) Neither this Agreement nor any provision hereof may be terminated, waived, amended or
modified (other than pursuant to any Joinder Agreement) except pursuant to an agreement or
agreements in writing entered into by the Controlling Agent and each other Authorized
Representative (and with respect to any such termination, waiver, amendment or modification which
by the terms of this Agreement requires Hercules’ consent or which increases the obligations or
reduces the rights of Hercules or any Subsidiary Guarantor, with the consent of Hercules). Each
Obligor acknowledges and agrees that, pursuant to Section 8.01 of the Indenture (as in effect on
the date of this Agreement), the Notes Collateral Agent may (without the consent of any Notes
Secured Party) enter into amendments or supplements to this Agreement to cure any ambiguity,
defect or inconsistency.

          (c) Notwithstanding the foregoing, without the consent of any Senior Secured Party, any
Authorized Representative may become a party hereto by execution and delivery of a Joinder
Agreement in accordance with Section 5.12 and upon such execution and delivery, such Authorized
Representative and the Additional Senior Debt Parties and Additional Senior Debt Obligations of
the Series for which such Authorized Representative is acting shall be subject to the terms hereof
and the terms of the other Collateral Documents applicable thereto;
provided that, the Controlling
Agent shall be reasonably satisfied that the terms of any Series of Additional Senior Debt are not
inconsistent with the terms of the Senior Credit Agreement and, unless a Collateral Suspension is
in effect with respect to the Note Obligations, the Indenture.

          (d) Notwithstanding the foregoing, without the consent of any other Authorized Representative
or Senior Secured Party, the Controlling Agent may effect amendments and modifications to this
Agreement to the extent necessary to reflect any incurrence of any Additional Senior Debt in
compliance with the Senior Debt Documents and the Note Documents.

          SECTION 5.03 Parties in Interest. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns, as well as the other
Senior Secured Parties, all of whom are intended to be bound by this Agreement. Nothing in this
Agreement, expressed or implied, is intended to confer upon any Person (other than the Authorized
Representatives, the beneficiaries of indemnification obligations of the Obligors under this
Agreement, the Note Documents and the Senior Debt Documents, their respective successors and
assigns permitted hereunder and, to the extent expressly contemplated hereby, the Senior Secured
Parties (or Series of Senior Secured Parties or Notes Secured Parties)) any rights, remedies,
obligations or liabilities under or by reason of this Agreement.

          SECTION 5.04 Survival of Agreement. All covenants, agreements, representations and warranties
made by any party in this Agreement shall be considered to have

29

 

been relied upon by the other parties hereto and shall survive the execution and delivery of this
Agreement.

          SECTION 5.05 Counterparts. This Agreement may be executed in counterparts, each of which
shall constitute an original but all of which when taken together shall constitute a single
contract. Delivery of an executed signature page to this Agreement by facsimile or electronic
transmission shall be effective as delivery of a manually signed counterpart of this Agreement.

          SECTION 5.06 Severability. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.

          SECTION 5.07 Governing Law; Jurisdiction. This Agreement shall be construed in
accordance with and governed by the law of the State of New York.

          SECTION 5.08 Submission To Jurisdiction Waivers; Consent to Service of Process. The
Controlling Agent and each other Authorized Representative irrevocably and unconditionally:

          (a) submits for itself and its property in any legal action or proceeding relating to this
Agreement and the Collateral Documents, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America in the Southern District of New York, and appellate
courts from any thereof;

          (b) consents that any such action or proceeding may be brought in such courts and waives
any objection that it may now or hereafter have to the venue of any such action or proceeding in
any such court or that such action or proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;

          (c) agrees that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to such Person (or its Authorized Representative) at the address referred
to in 5.01;

          (d) agrees that nothing herein shall affect the right of any other party hereto (or any
Senior Secured Party) to effect service of process in any other manner permitted by law or shall
limit the right of any party hereto (or any Senior Secured Party) to sue in any other
jurisdiction; and

30

 

          (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section 5.08 any special, exemplary,
punitive or consequential damages.

          SECTION 5.09 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

          SECTION 5.10 Headings. Article, Section and Annex headings used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the construction of, or
to be taken into consideration in interpreting, this Agreement.

          SECTION 5.11 Provisions Solely to Define Relative Rights. The provisions of this Agreement are
and are intended solely for the purpose of defining the relative rights of the Senior Secured
Parties in relation to one another. None of Hercules, any Subsidiary Guarantor or any other
creditor thereof shall have any rights or obligations hereunder, except as expressly provided in
this Agreement (provided that nothing in this Agreement (other than Section 2.04, 2.05, 2.08, 2.09
or Article V) is intended to or will amend, waive or otherwise modify the provisions of any
Additional Senior Debt Facilities or Note Document), and none of Hercules or any Subsidiary
Guarantor may rely on the terms hereof (other than Sections 2.04, 2.05, 2.08, 2.09, 5.11 and 5.12).
Nothing in this Agreement is intended to or shall impair the obligations of Hercules or any
Subsidiary Guarantor, which are absolute and unconditional, to pay the Senior Obligations and the
Note Obligations as and when the same shall become due and payable in accordance with their terms.

          SECTION 5.12 Additional Senior Debt. To the extent, but only to the extent permitted by the
provisions of the Senior Debt Documents and the Note Documents, Hercules may incur or issue and
sell one or more series or classes of Senior Facilities. Any such additional class or series of
Additional Senior Debt (the “Senior Class Debt”) may be secured by the Senior Lien and may be
Guaranteed by the Subsidiary Guarantors on a senior basis, in each case under and pursuant to the
Collateral Documents, if and subject to the condition that the Authorized Representative of any
such Senior Class Debt (each, a “Senior Class Debt Representative”), acting on behalf of the
holders of such Senior Class Debt (such Representative and holders in respect of any Senior Class
Debt being referred to as the “Senior Class Debt Parties”), becomes a party to this Agreement by
satisfying the conditions set forth in clauses (i) through (v) of the immediately succeeding
paragraph.

          In order for a Senior Class Debt Representative to become a party to this Agreement,

	 	(i)	 	such Senior Class Debt Representative, the Controlling Agent, Hercules and each
Subsidiary Guarantor shall have executed and delivered an instrument substantially
in the form of Annex 2 (with such changes as may be approved by the Controlling
Agent and such Senior Class Representative) pursuant to

31

 

	 	 	 	which such Senior Class Debt Representative becomes an Authorized
Representative hereunder, and the Senior Class Debt in respect of which such
Senior Class Debt Representative is the Authorized Representative and the
related Senior Class Debt Parties become subject hereto and bound hereby;

	 	(ii)	 	Hercules shall have delivered to the Controlling Agent true and complete
copies of each of the Senior Debt Documents relating to such Senior Class Debt,
certified as being true and correct by a Financial Officer of Hercules;
	 
	 	(iii)	 	all filings, recordations and/or amendments or supplements to the Collateral
Documents necessary or desirable in the reasonable judgment of the Controlling Agent
to confirm and perfect the Senior Liens securing the relevant Senior Obligations
relating to such Senior Class Debt shall have been made, executed and/or delivered
(or, with respect to any such filings or recordations, acceptable provisions to
perform such filings or recordings have been taken in the reasonable judgment of the
Controlling Agent), and all fees and taxes in connection therewith shall have been
paid;
	 
	 	(iv)	 	the Senior Debt Documents, as applicable, relating to such Senior Class Debt
shall provide, in a manner reasonably satisfactory to the Controlling Agent, that
(x) each Senior Class Debt Party with respect to such Senior Class Debt will be
subject to and bound by the provisions of this Agreement in its capacity as a holder
of such Senior Class Debt and (y) in the event of any conflict between the terms of
such Senior Debt Documents and this Agreement, the terms of this Agreement shall
control; and
	 
	 	(v)	 	the Controlling Agent shall have received such opinions of outside counsel to
Hercules and such Senior Class Debt Representative as any of them may request and
such other documents relating to the matters referred to in clauses (i), (ii) and
(iii) as any of them may reasonably request, and such opinions and other documents
shall be reasonably satisfactory in form and substance to the Controlling Agent.

          SECTION 5.13 Integration. This Agreement together with the other Senior Debt Documents and
the Note Documents, including the Collateral Documents, represents the agreement of each of
Hercules, the Subsidiary Guarantors and the Senior Secured Parties with respect to the subject
matter hereof and there are no promises, undertakings, representations or warranties by Hercules,
any Subsidiary Guarantor, the Controlling Agent, any Authorized Representative or any other Senior
Secured Party relative to the subject matter hereof not expressly set forth or referred to herein
or in the other Senior Debt Documents, the Note Documents or the Collateral Documents.

          SECTION 5.14 Rights of Authorized Representatives. Any trustee or other Authorized
Representative under any Additional Senior Debt Facility that becomes a party hereto shall have
all the rights, privileges, protections, immunities, benefits and indemnities granted to it under
the applicable indenture or other agreement that constitutes such Additional

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Senior Debt Facility as if such rights, privileges, protections, immunities, benefits
and indemnities were set forth herein in full.

          SECTION 5.15 Payment of Expenses; Indemnification. The Obligors agree to pay (i) all
reasonable out-of-pocket expenses incurred by the Controlling Agent and its Affiliates (including
the reasonable fees, charges and disbursements of outside counsel for the Controlling Agent) with
respect to the preparation, negotiation, execution, delivery and administration of this Agreement,
the other Senior Debt Documents or the Note Documents or any amendment, amendment and restatement,
modification or waiver of the provisions hereof or thereof (including any proposed amendment,
amendment and restatement, modification or waiver), (ii) all out-of-pocket expenses incurred by the
Controlling Agent (including the fees, charges and disbursements of any counsel for the Controlling
Agent), in connection with the enforcement or protection of its rights in connection with this
Agreement, the other Senior Debt Documents and the Note Documents, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect of the Senior
Obligations and (iii) all documentary and similar taxes and charges in respect of this Agreement,
the other Senior Debt Documents and the Note Documents. The Obligors shall indemnify the
Controlling Agent (and any sub-agent thereof) and each Related Party of the Controlling Agent (each
such person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related out-of-pocket expenses (including the fees,
charges and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by Hercules or any other Obligor arising out of, in
connection with, or as a result of (i) the execution or delivery of this Agreement, any other
Senior Debt Document or any Note Document, or any amendment, amendment and restatement,
modification or waiver of the provisions hereof or thereof, or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any actual or alleged presence or Release or threatened Release of Hazardous
Materials on, at, under or from any property owned, leased or operated by any Obligor at any time,
or any Environmental Claim related in any way to any Obligor, (iii) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by Hercules or any other
Obligor, and regardless of whether any Indemnitee is a party thereto, (iv) any Environmental Law
applicable to Hercules or any Subsidiary or any of their properties, including without limitation,
the presence, generation, storage, release, threatened release, use, transport, disposal,
arrangement of disposal or treatment of oil, oil and gas wastes, solid wastes or hazardous
substances on any of their properties, (v) the breach or non-compliance by Hercules or any
Subsidiary of Hercules with any Environmental Law applicable to Hercules or any Subsidiary of
Hercules, (vi) the past ownership by Hercules or any Subsidiary of Hercules of any of their
properties or past activity on any of their properties which, though lawful and fully permissible
at the time, could result in present liability, (vii) the presence, use, release, storage,
treatment, disposal, generation, threatened release, transport, arrangement for transport or
arrangement for disposal of oil, oil and gas wastes, solid wastes or hazardous substances on or at
any of the properties owned or operated by Hercules or any Subsidiary of Hercules or any actual or
alleged presence or release of hazardous
 materials on or from any property owned or operated by
Hercules or any of its Subsidiaries, (viii) any liability pursuant to Environmental Laws or costs
of Response related in any way to Hercules or any of its Subsidiaries or (ix) any other

33

 

environmental, health or safety condition in connection with this Agreement, the other Senior Debt
Documents or the Note Documents; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted solely from the gross negligence or willful misconduct of such Indemnitee. For the
avoidance of doubt, each Indemnitee shall be deemed a third party beneficiary of this Agreement.
The agreements in this Section 5.15 shall survive repayment of the Senior Loan Obligations, the
Note Obligations, the Additional Senior Debt Obligations and all other amounts payable hereunder
and under the Note Documents and the other Senior Debt Documents and the removal or resignation of
the Controlling Agent. All obligations of the Obligors set forth in or arising under this
Agreement will be Senior Obligations and are secured by all Liens granted by the Collateral
Documents.

          SECTION 5.16 Termination. (a) Subject to clause (b) below (which clause (b) shall survive
the termination of this Agreement), this Agreement shall terminate upon the occurrence of any of
the following:

	 	(i)	 	the payment in full in cash of all Senior Obligations (including all Senior
Loan Obligations); or
	 
	 	(ii)	 	(x) the payment in full in cash of all Note Obligations or a Collateral
Suspension is in effect with respect to the Note Obligations, and (y) only one
Series of Senior Obligations remains outstanding at such time or only one Series of
Senior Obligations is secured by a Senior Lien at such time; or
	 
	 	(iii)	 	each of the Authorized Representatives party to this Agreement shall have
agreed to terminate this Agreement in writing.

          (b) Notwithstanding any termination of this Agreement pursuant to clause (ii) of Section
5.16(a) as a result of the effectiveness of a Collateral Suspension in respect of the Note
Obligations, in the event that (i) such Collateral Suspension ceases to be in effect and (ii) the
Senior Loan Obligations Payment Date has not occurred, each Authorized Representative, to the
extent such Authorized Representative represents the Note Obligations or a Series of Senior
Obligations that is secured by a Senior Lien at such time, shall (to the extent permitted under the
Note Documents or Senior Debt Documents, as applicable) within 30 days after such Collateral
Suspension ceases to be in effect, enter into an intercreditor agreement having terms substantially
similar to those set forth in this Agreement (as in effect immediately prior to such termination of
this Agreement) with such modifications as such Authorized Representatives shall agree (in good
faith) are responsive to the adoption or taking into effect of any law (including case law),
treaty, order, policy, rule or regulation, or any change in the interpretation thereof, in each
case, occurring after such termination of this Agreement. If such Authorized Representatives are
not able to agree upon modifications to the form of intercreditor agreement contemplated by the
preceding sentence within such 30-day period, then the Authorized Representatives shall enter into
an intercreditor agreement having terms substantially similar to those set forth in this Agreement
(as in effect immediately prior to such termination of this Agreement) but without any such
modifications. Hercules agrees to provide written notice to each Authorized
Representative party to this Agreement prior to such termination not later than five (5) days after

34

 

such Collateral Suspension ceases to be in effect, which notice shall refer to this Section
5.16(b) and request that such Authorized Representatives enter into an intercreditor agreement as
set forth in this Section 5.16(b).

[Remainder of this page intentionally left blank]

35

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first above written.

	 	 	 	 	 
	 	HERCULES OFFSHORE, INC.

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Senior Vice President, General Counsel,

Chief Compliance Officer and Secretary 	 
	 
	 	CLIFFS DRILLING COMPANY

CLIFFS DRILLING TRINIDAD L.L.C.

HERCULES DRILLING COMPANY, LLC

HERCULES OFFSHORE LIFTBOAT COMPANY LLC

THE HERCULES OFFSHORE DRILLING
COMPANY LLC

THE OFFSHORE DRILLING COMPANY

THE ONSHORE DRILLING COMPANY

TODCO AMERICAS INC.

TODCO INTERNATIONAL INC.

TODCO MANAGEMENT SERVICES, INC.

TODCO MEXICO INC.

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Vice President and Secretary 	 
	 
	 	HERCULES LIFTBOAT COMPANY, LLC

HERCULES OFFSHORE SERVICES LLC

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe 	 
	 	 	Title:  	Secretary 	 
	 
	 	HERCULES OFFSHORE HOLDINGS, LTD.

HERCULES OFFSHORE MIDDLE EAST, LTD.

 	 
	 	By:  	/s/ Don P. Rodney
 	 
	 	 	Name:  	Don P. Rodney 	 
	 	 	Title:  	President 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	DELTA TOWING HOLDINGS, LLC
 DELTA
TOWING, LLC

 	 
	 	By:  	/s/ James W. Noe
 	 
	 	 	Name:  	James W. Noe  	 
	 	 	Title:  	Vice President and Secretary 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	UBS AG, STAMFORD BRANCH, 

as Bank Collateral Agent

 	 
	 	By:  	/s/ Mary E. Evans
 	 
	 	 	Name:  	Mary E. Evans  	 
	 	 	Title:  	Associate Director 	 
	 
	 	 	 
	 	By:  	/s/ Irja R. Otsa
 	 
	 	 	Name:  	Irja R. Otsa  	 
	 	 	Title:  	Associate Director 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION, 

as Notes Collateral Agent

 	 
	 	By:  	/s/ Steven A. Finklea
 	 
	 	 	Name:  	Steven A. Finklea, CCTS  	 
	 	 	Title:  	Vice President 	 
	 

 

 

Annex 1 to the

Intercreditor Agreement

SUBSIDIARY GUARANTORS

	 	 	 
	1.	 	Hercules Drilling Company, LLC

	2.	 	Hercules Liftboat Company, LLC

	3.	 	Hercules Offshore Services LLC

	4.	 	THE Offshore Drilling Company

	5.	 	TODCO Mexico Inc.

	6.	 	TODCO Management Services, Inc.

	7.	 	Cliffs Drilling Company

	8.	 	TODCO Americas Inc.

	9.	 	TODCO International Inc.

	10.	 	Cliffs Drilling Trinidad L.L.C.

	11.	 	Delta Towing Holdings, LLC

	12.	 	Delta Towing, LLC

	13.	 	THE Onshore Drilling Company

	14.	 	THE Hercules Offshore Drilling Company LLC

	15.	 	Hercules Offshore Holdings Ltd.

	16.	 	Hercules Offshore Middle East Ltd.

	17.	 	Hercules Offshore Liftboat Company LLC

 

 

Annex 2 to the

Intercreditor Agreement

     REPRESENTATIVE SUPPLEMENT NO. dated as of      , to the INTERCREDITOR AGREEMENT dated as of October
20, 2009 (as amended, restated or otherwise modified from time to time, the “Intercreditor
Agreement”), among HERCULES OFFSHORE, INC., a Delaware corporation (“Hercules”), each Subsidiary of
Hercules from time to time party thereto, UBS AG, STAMFORD BRANCH (“UBS”), as Controlling Agent for
the Senior Secured Parties (in such capacity, the “Controlling Agent”), UBS, as Authorized
Representative for the Senior Loan Secured Parties (in such capacity, the “Bank Collateral Agent”),
U.S. BANK NATIONAL ASSOCIATION, as Notes Collateral Agent for the Notes Secured Parties, and the
additional Senior Representatives from time to time a party thereto.

          A. Capitalized terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Intercreditor Agreement.

          B. As a condition to the ability of Hercules to issue Additional Senior Debt and to secure
such Senior Class Debt with the Senior Lien and to have such Senior Class Debt guaranteed by the
Subsidiary Guarantors on a senior basis, in each case under and pursuant to the Collateral
Documents applicable to such Senior Class Debt, the Senior Class Debt Representative in respect of
such Senior Class Debt is required to become an Authorized Representative under, and such Senior
Class Debt and the Senior Class Debt Parties in respect thereof are required to become subject to
and bound by, the Intercreditor Agreement. Section 5.12 of the Intercreditor Agreement provides
that such Senior Class Debt Representative may become an Authorized Representative under, and such
Senior Class Debt and such Senior Class Debt Parties may
become subject to and bound by, the Intercreditor Agreement, pursuant to the execution and
delivery by the Senior Class Representative of an instrument in the form of this Representative
Supplement and the satisfaction of the other conditions set forth in Section 5.12 of the
Intercreditor Agreement. The undersigned Senior Class Debt Representative (the “New
Representative”) is executing this Representative Supplement in accordance with the requirements of
the Senior Debt Documents.

          Accordingly, the Controlling Agent and the New Representative agree as follows:

          SECTION 1. In accordance with Section 5.12 of the Intercreditor Agreement, the New
Representative by its signature below becomes an Authorized Representative under, and the related
Senior Class Debt and Senior Class Debt Parties become subject to and bound by, the Intercreditor
Agreement with the same force and effect as if the New Representative had originally been named
therein as an Authorized Representative, and the New Representative, on behalf of itself and such
Senior Class Debt Parties, hereby agrees to all the terms and provisions of the Intercreditor
Agreement applicable to it as a Senior Representative and Authorized Representative in respect of
such Senior Class Debt and to the Senior Class Debt Parties that it represents as Additional Senior
Debt Parties. Each reference to a “Senior Representative” or “Authorized Representative” in the
Intercreditor Agreement shall be deemed to include the New Representative. The Intercreditor
Agreement is hereby incorporated herein by reference.

          The New Representative hereby irrevocably (i) appoints the [Bank Collateral Agent] as
Controlling Agent for purposes of the Intercreditor Agreement and the other Collateral Documents,
(ii) authorizes the Controlling Agent to take such actions on its behalf and to

 

 

exercise such powers as are delegated to the Controlling Agent in the Collateral Documents,
together with such actions and powers as are reasonably incidental thereto, and (iii) agrees to
take (or cause to be taken) such actions and not take (or cause to be taken) such actions as the
Controlling Agent may instruct with respect to the Shared Collateral in accordance with, and
subject to, the Intercreditor Agreement. The New Representative hereby acknowledges and agrees
that the Controlling Agent in its capacity as such shall be acting on its behalf and on behalf of
all other Senior Secured Parties with respect to the Shared Collateral as set forth in the
Intercreditor Agreement.

          SECTION 2. The New Representative represents and warrants to the Controlling Agent and the
other Senior Secured Parties that (i) it has full power and authority to enter into this
Representative Supplement, in its capacity as [agent] [trustee], (ii) this Representative
Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with the terms of such Agreement and
(iii) the Additional Senior Debt Documents relating to such Senior Class Debt provide that, upon
the New Representative’s entry into this Agreement, the Senior Class Debt Parties in respect of
such Senior Class Debt will be subject to and bound by the provisions of the Intercreditor
Agreement as Additional Senior Debt Parties.

          SECTION 3. This Representative Supplement may be executed in counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Representative Supplement shall become effective when the Controlling Agent shall have
received a counterpart of this Representative Supplement that bears the signature of the New
Representative. Delivery of an executed signature page to this
Representative Supplement by facsimile transmission shall be effective as delivery of a manually
signed counterpart of this Representative Supplement.

          SECTION 4. Except as expressly supplemented hereby, the Intercreditor Agreement shall
remain in full force and effect.

          SECTION 5. THIS REPRESENTATIVE SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

          SECTION 6. In case any one or more of the provisions contained in this Representative
Supplement should be held invalid, illegal or unenforceable in any respect, no party hereto shall
be required to comply with such provision for so long as such provision is held to be invalid,
illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions
contained herein and in the Intercreditor Agreement shall not in any way be affected or impaired.
The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

          SECTION 7. All communications and notices hereunder shall be in writing and given as provided
in Section 5.01 of the Intercreditor Agreement. All communications and notices hereunder to the New
Representative shall be given to it at the address set forth below its signature hereto.

 

 

          By acknowledging and agreeing to this Representative Supplement, each of Hercules and the
Subsidiary Guarantors party hereto hereby reaffirms the security interests granted pursuant to
each of the Collateral Documents to which it is a party to secure the Senior Obligations.

 

 

          IN WITNESS WHEREOF, the New Representative and the Controlling Agent have duly executed this
Representative Supplement to the Intercreditor Agreement as of the day and year first above
written.

	 	 	 	 	 
	 	[NAME OF NEW REPRESENTATIVE], as [ 
]

 for the holders of [                ],

 	 
	 	By  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	Authorized Signatory 	 
	 

	 	 	 	 	 	 	 
	 	 	 	 	Address for notices:
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	attention of:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Telecopy:	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 
	

Acknowledged by:

[UBS AG, STAMFORD BRANCH],

as Bank Collateral Agent and as Controlling Agent,

 	 
	By  	
 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 
	THE SUBSIDIARY GUARANTORS

LISTED ON SCHEDULE 1 HERETO,

 	 
	By  	
 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

 

 

Annex 2 to the

Intercreditor Agreement

Subsidiary Guarantors

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