RESTRUCTURING SUPPORT AGREEMENT by and among HERCULESOFFSHORE, INC. AND ITS SUBSIDIARIES PARTY HERETO and THE UNDERSIGNED CREDITOR PARTIES dated as of May 26, 2016 RESTRUCTURING SUPPORT AGREEMENT

EX-10.2 7 d183686dex102.htm EX-10.2 EX-10.2

Exhibit 10.2

EXECUTION VERSION

THIS RESTRUCTURING SUPPORT AGREEMENT IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR A SOLICITATION OF VOTES WITH RESPECT TO A CHAPTER 11 PLAN OF REORGANIZATION. ANY SUCH OFFER OR SOLICITATION WILL COMPLY WITH ALL APPLICABLE SECURITIES LAWS AND/OR, AS APPLICABLE, PROVISIONS OF THE BANKRUPTCY CODE.

RESTRUCTURING SUPPORT AGREEMENT

by and among

HERCULES OFFSHORE, INC. AND ITS SUBSIDIARIES PARTY HERETO

and

THE UNDERSIGNED CREDITOR PARTIES

dated as of May 26, 2016

RESTRUCTURING SUPPORT AGREEMENT

This RESTRUCTURING SUPPORT AGREEMENT (as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and including all exhibits annexed hereto which are incorporated by reference herein, this “Agreement”), dated as of May 26, 2016, is entered into by and among (x) Hercules Offshore, Inc., a Delaware corporation (“HERO”), and each of the undersigned direct and indirect subsidiaries of HERO (the “Subsidiaries,” and together with HERO, the “HERO Entities”) and (y) each of the undersigned parties, severally and not jointly (each, together with their respective successors and permitted assigns and any subsequent holder of First Lien Claims (as defined below) that becomes party hereto in accordance with the terms hereof, collectively, an “Ad Hoc Group Member” and collectively, the “Ad Hoc Group”) who are holders of (i) First Lien Claims, and (ii) in certain cases, common shares issued by HERO (the “HERO Common Stock”). Each of the HERO Entities and the Ad Hoc Group Members is referred to herein individually as a “Party” and, collectively, as the “Parties”.

WHEREAS, HERO and its majority-owned subsidiaries provide shallow-water drilling and marine services to the oil and natural gas exploration and production industry globally through its domestic offshore, international offshore, and international liftboats segments;

WHEREAS, on November 6, 2015, the HERO Entities entered into that certain Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “First Lien Credit Agreement”), among HERO, as borrower, the Subsidiaries, as guarantors, Jefferies Finance LLC, as administrative agent and collateral agent (the “First Lien Agent”), and the lenders from time to time party thereto (the “First Lien Lenders”). Claims and Obligations (as defined in the First Lien Credit Agreement) owed under the First Lien Credit Agreement are collectively referred to herein as “First Lien Claims”;

WHEREAS, on April 18, 2016, HERO and certain of its subsidiaries (the “Loan Parties”) entered into that certain Forbearance Agreement and First Amendment to the Credit Agreement (the “Forbearance Agreement”), with the First Lien Agent for itself and certain First Lien Lenders designated therein, pursuant to which, the First Lien Lenders agreed to forbear from exercising their rights and remedies under the First Lien Credit Agreement with respect to the alleged failure by the Loan Parties to comply with certain specified affirmative covenants under the First Lien Credit Agreement through April 28, 2016 (the “Forbearance Period”);

WHEREAS, on April 28, 2016, the Loan Parties (as defined in the First Lien Credit Agreement) entered into Amendment No. 1 to Forbearance Agreement and First Amendment to Credit Agreement (“Amendment No. 1”) with the First Lien Agent and certain First Lien Lenders designated therein, which extended the Forbearance Period until the earliest to occur of: (i) the termination of the Forbearance Period as a result of any default; (ii) 11:59 p.m. (New York City time) on May 31, 2016; and (iii) 11:59 p.m. (New York City time) on the second Business Day following the Required Lenders’ delivery of written notice (which notice shall be effective only if delivered after 11:59 p.m. (New York City time) on May 4, 2016) to the Loan Parties (with a copy to the First Lien Agent and the Collateral Agent) in accordance with Section 10.01(a) of the Credit Agreement terminating the Forbearance Period;

WHEREAS, on the date hereof, the Loan Parties entered into that certain Amended and Restated Forbearance Agreement (the “Amended and Restated Forbearance Agreement”) with the First Lien Agent for itself and certain First Lien Lenders designated therein, pursuant to which, among other things, subject to the terms of the Amended and Restated Forbearance Agreement and without any waiver of the Specified Defaults (as defined in the Amended and Restated Forbearance Agreement), (i) forbear during the Forbearance Period (as defined in the Amended and Restated Forbearance Agreement) from exercising certain of their default-related rights and remedies against the Loan Parties with respect to the Specified Defaults (other than (w) the giving of written notice of the Specified Gibraltar Default (as defined in the Amended and Restated Forbearance Agreement) pursuant to Sections 8.01(e) and 10.01 of the First Lien Credit Agreement, (x) the acceleration of the Loans (as defined in the First Lien Credit Agreement) pursuant to Section 8.01 of the First Lien Credit Agreement, (y) the delivery of a written direction instructing the First Lien Agent to deliver a written instruction to the Escrow Agent (as defined in the First Lien Credit Agreement) to distribute all the funds in the Escrow Account (as defined in the First Lien Credit Agreement) to the First Lien Agent to prepay the Loans pursuant to Section III(d) of the Escrow Agreement during the Forbearance Period and (z) the delivery by the First Lien Agent of a written instruction to the Escrow Agent to distribute all of the funds in the Escrow Account to the First Lien Agent to prepay the Loans pursuant to III(d) of the Escrow Agreement, (ii) consent to release of liens contemplated by the release documents listed on Exhibit C to the Amended and Restated Forbearance Agreement, and (iii) upon the request of HERO after the Forbearance Effective Date (as defined in the Amended and Restated Forbearance Agreement), consent to the release of the Non-Debtor Loan Parties (as defined in the Amended and Restated Forbearance Agreement) from their Guarantee and release the Liens (as defined in the First Lien Credit Agreement) on and security interest in any and all assets and property of the Non-Debtor Loan Parties on the Effective Date of the Plan (as defined below);

WHEREAS, the HERO Entities and the Ad Hoc Group have negotiated, in good faith and at arms’ length, a transaction that will effectuate a financial restructuring of the HERO Entities’ capital structure and financial obligations (the “Restructuring”), on the terms and conditions set forth in this Agreement and the Term Sheet attached hereto as Exhibit A (including any annexes and schedules attached thereto, the “Term Sheet”) that is to be implemented through voluntary cases to be commenced (the date of such commencement, the “Petition Date”) by HERO, each of the Subsidiaries that is a domestic United States entity (other than Hercules Liftboat Company, LLC and Hercules Offshore International, LLC) (collectively, the “Debtors”) under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Code”), before the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), on a consensual basis pursuant to a joint “pre-packaged” chapter 11 plan to be confirmed under chapter 11 of the Bankruptcy Code, the terms and conditions of which will be on the terms described in this Agreement and the Term Sheet, and that is otherwise in form and substance reasonably acceptable to the Debtors and the Requisite Consenting Lenders (as defined below) (the “Plan”);

WHEREAS, as of the date hereof and upon the acceleration of the Obligations under the First Lien Credit Agreement but prior to the distribution by the Escrow Agent of all the funds in the Escrow Account to the First Lien Agent to prepay the First Lien Claims pursuant to Section III(d) of the Escrow Agreement and Section 2.10(a)(i) of the First Lien Credit Agreement, the HERO Entities owed $579 million (plus accrued and unpaid interest) under the First Lien Credit Agreement on account of principal indebtedness, unpaid accrued interest, and the Applicable Premium; it being understood that additional Fees (as defined in the First Lien Credit Agreement) and Obligations may also be due and owing;

WHEREAS, the Parties intend to implement the Restructuring contemplated herein through a “pre-packaged” chapter 11 plan, and in connection therewith, the Debtors have agreed, subject to the terms and conditions of this Agreement, (i) to prepare a disclosure statement containing “adequate information” (as that term is used in the Bankruptcy Code) with respect to the Plan and the Term Sheet and otherwise in form and substance reasonably acceptable to the Debtors and the Requisite Consenting Lenders (the “Disclosure Statement”), (ii) to solicit acceptances of the Plan from the First Lien Lenders and holders of HERO Common Stock publicly traded equity interests in accordance with applicable non-bankruptcy law, as permitted under sections 1125(g) and 1126(b) of the Bankruptcy Code, (iii) to prepare and file, in case(s) under chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”), the Plan and the Disclosure Statement, and (iv) to use commercially reasonably efforts to cause the Plan to be confirmed by the Bankruptcy Court and consummated thereafter, all in accordance with the terms of this Agreement and the Term Sheet;

WHEREAS, the Ad Hoc Group Members, who collectively hold more than 99% of the outstanding loans and commitments under the First Lien Credit Agreement and approximately 27% of the HERO Common Stock, as set forth on Schedule 1 hereto, have agreed, among other things, subject to the receipt of a Disclosure Statement, to vote in favor of, and not oppose, the Restructuring and the Plan on the terms and subject to the conditions set forth in this Agreement and the Term Sheet; and

WHEREAS, the Parties desire to express to each other their mutual support and commitment in respect of the Restructuring pursuant to the Plan on the terms and conditions contained in this Agreement and the attached Term Sheet.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Party, intending to be legally bound hereby, agrees as follows:

1. Incorporation of Term Sheet and Definitions; Interpretation.

The Term Sheet is expressly incorporated herein by reference and is made part of this Agreement. All references herein to this “Agreement” or “herein” shall include the Term Sheet where not expressly stated. The general terms and conditions of the Restructuring, as supplemented by the terms and conditions of this Agreement, are set forth in the Term Sheet. In the event the terms and conditions set forth in the Term Sheet and this Agreement are inconsistent, the terms and conditions set forth in the Term Sheet shall govern. Capitalized terms used and not defined in this Agreement shall have the meaning ascribed to them in the Term Sheet.

In this Agreement, unless the context otherwise requires:

words importing the singular also include the plural, and references to one gender include all genders;

the headings in this Agreement are inserted for convenience only and do not affect the construction of this Agreement and shall not be taken into consideration in its interpretation;

the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement;

the words “include,” “includes,” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “or” is not exclusive; and

references to any governmental entity or any governmental department, commission, board, bureau, agency, regulatory authority, instrumentality, or judicial or administrative body, in any jurisdiction shall include any successor to such entity.

2. Effectiveness; Entire Agreement.

This Agreement shall become effective as to the HERO Entities and each individual Ad Hoc Group Member upon delivery of counterpart signature pages to (i) this Agreement by and among (x) the Ad Hoc Group Members that together own and hold with the power to vote at least 99% of the aggregate amount of outstanding principal indebtedness under the First Lien Credit Agreement, and (y) the HERO Entities (such date, the “RSA Effective Date”).

Without limiting the rights and remedies of any Party arising from a breach of this Agreement prior to its valid termination, if this Agreement is validly terminated in its entirety in accordance with its terms, then this Agreement shall be null and void and have no further legal effect and none of the Parties shall have any liability or obligation arising under or in connection with this

Agreement; provided that if this Agreement is validly terminated in its entirety in accordance with its terms as to any Party but not as to all Parties, then this Agreement shall be null and void and have no further legal effect only with respect to such Party.

Each of the exhibits attached hereto is expressly incorporated herein and made a part of this Agreement, and all references to this Agreement shall include and incorporate the exhibits, including the Term Sheet. In the event of any inconsistency between this Agreement (without reference to the exhibits) and the exhibits, this Agreement (without reference to the exhibits) shall govern except in the case of the Term Sheet, in which case the terms provided in the Term Sheet shall govern.

With the exception of non-disclosure and confidentiality agreements among the Parties and the Amended and Restated Forbearance Agreement, this Agreement (including the Term Sheet) constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior agreements (oral and written) and all other prior negotiations.

3. Mutual Covenants of All Parties.

For so long as this Agreement has not been validly terminated in its entirety in accordance with its terms, and subject to the terms and conditions of this Agreement, the Parties agree severally and not jointly (in the case of any Ad Hoc Group Member, so long as it remains the legal owner, beneficial owner and/or investment advisor or manager of or with power and/or authority to bind any First Lien Claims and, if applicable, HERO Common Stock (provided that any transfer of First Lien Claims or, if applicable, HERO Common Stock is made in accordance with Section 10 herein)) to use commercially reasonable efforts to complete the Restructuring through the Plan within the timeframe contemplated by this Agreement and on terms and conditions consistent with those set forth herein and in the Term Sheet. For so long as this Agreement has not been validly terminated in its entirety in accordance with its terms, each Party hereby agrees and covenants severally (but not jointly) to:

cooperate with each other in good faith and coordinate their activities in connection with (i) the pursuit and implementation of the Restructuring, (ii) confirmation and consummation of the Plan, and (iii) in the event that the Debtors and the Requisite Consenting Lenders agree on an alternative structure that provides tax efficiencies and lower costs, implementing such an alternative Wind Down Entity structure, in each case as soon as reasonably practicable;

use commercially reasonable efforts and work in good faith to negotiate definitive documents implementing, achieving and relating to the Restructuring, including, but not limited to, (i) the Disclosure Statement, the motion seeking approval of the Disclosure Statement, the Plan, the order of the Bankruptcy Court confirming the Plan (such order, in form and substance reasonably acceptable to the Requisite Consenting Lenders, the “Confirmation

Order”), the motion seeking entry of the Confirmation Order, the plan supplement and its exhibits, the Solicitation Procedures (as defined below), the motion seeking the entry of orders approving the Debtors’ ability to use cash collateral on interim and final bases (collectively, the “Cash Collateral Orders”), and each of the organizational, governance and exit credit documents contemplated by the Term Sheet; (ii) such other related plan documents and ancillary agreements required to implement the Restructuring, the Plan and Disclosure Statement, each of which are more specifically described in the Term Sheet and shall contain terms and conditions substantially consistent in all respects with the Term Sheet and, if not specified in the Term Sheet, otherwise in form and substance reasonably acceptable to the Requisite Consenting Lenders and the Debtors (collectively, the “Definitive Documents”); and (iii) execute (to the extent they are a party thereto) the Definitive Documents and otherwise support and seek to effect the actions and transactions contemplated thereby, in each case as soon as reasonably practicable, provided that each of the Definitive Documents shall (A) contain terms and conditions consistent in all material respects with this Agreement and the Term Sheet and (B) otherwise be reasonably acceptable in all respects to the Debtors and the Requisite Consenting Lenders, including with respect to any modifications, amendments, or supplements to such Definitive Documents, provided further that each of the organizational, governance and exit credit documents contemplated by the Term Sheet shall be substantially consistent in all material respects with the Term Sheet and this Agreement and reasonably acceptable to the Requisite Consenting Lenders in all respects (it being understood that any objection by the Requisite Consenting Lenders to any provision of the organizational, governance or exit credit documents contemplated by this Agreement and the Term Sheet that would materially and adversely affect the recoveries of the First Lien Lenders contemplated therein, or to have a material and adverse impact on the governance structure of the Wind Down Entity shall be deemed to be reasonable);

use their commercially reasonable efforts to negotiate and execute all Definitive Documents reasonably necessary or otherwise required to commence solicitation for the Plan (“Solicitation”) by no later than May 31, 2016;

take such action as may be reasonably necessary to carry out the purposes and intent of this Agreement;

not take any action that is inconsistent in any material way with, or is intended to frustrate, delay or impede the timely approval and confirmation of the Plan and consummation of the transactions described in the Term Sheet and the Plan;

to the extent any legal or structural impediment arises that would prevent, hinder, or delay the consummation of the transactions contemplated herein, negotiate in good faith appropriate additional or alternative provisions to address any such impediment; provided, that the economic outcome for the Parties and other materials terms of this Agreement are preserved in any such provisions;

comply with all of its obligations under this Agreement and the exhibits annexed hereto (which exhibits are incorporated herein by reference) unless compliance is waived in writing by each of the other Parties;

comply with all of its obligations under the Amended and Restated Forbearance Agreement; and

support and use commercially reasonable efforts to (i) complete the Restructuring and all transactions contemplated under this Agreement, including, without limitation, those described in the Term Sheet (and the Plan) as soon as reasonably practicable, and in any event, not later than in accordance with the deadlines specified in the milestones set forth in the Term Sheet and in the section entitled “Additional Covenants of the Debtors” herein (collectively, as the same may be modified in accordance with the terms of this Agreement, the “Milestones”), (ii) take any and all reasonably necessary actions in furtherance of the Restructuring and the transactions contemplated under this Agreement, including, without limitation, as set forth in the Term Sheet (and once filed, the Plan), and (iii) obtain (solely as it relates to such Party) any and all required regulatory and/or third party approvals necessary to consummate the Restructuring.

4. Actions by the Ad Hoc Group.

Unless otherwise expressly set forth herein, matters herein requiring action by, or the consent of, the Ad Hoc Group shall be subject to the consent of Ad Hoc Group Members holding at least 50.1% of the outstanding, aggregate principal amounts owing under the First Lien Credit Agreement (the “Requisite Consenting Lenders”).

5. Additional Covenants of the Ad Hoc Group Members.

For so long as this Agreement has not been validly terminated in its entirety in accordance with its terms with respect to it, each Ad Hoc Group Member (solely on its own behalf and not on behalf of any other holder of First Lien Claims or, if applicable, HERO Common Stock) hereto agrees and covenants severally (but not jointly), so long as it remains the legal owner, beneficial owner and/or investment advisor or manager of or with power and/or authority to bind any First Lien Claims and, if applicable, HERO Common Stock (provided that any transfer of First Lien Claims or, if applicable, HERO Common Stock is made in accordance with Section 10 herein), to:

not, directly or indirectly, (i) object to, delay, impede, or take any other action to interfere with the acceptance, implementation, confirmation or consummation of the Restructuring and the Plan; (ii) seek, solicit, support, encourage, or vote any claims or equity interests for, consent to, or participate

in any discussions regarding the negotiation or formulation of any restructuring or reorganization for any of the Debtors that is inconsistent with this Agreement, the Term Sheet or the Plan in any respect; (iii) take any other action that would delay or obstruct the timely approval and consummation of the transactions contemplated by this Agreement, the Term Sheet or the Plan in any respect; (iv) commence or support any action or proceeding to shorten or terminate the period during which only the Debtors may propose and/or seek confirmation of a plan of reorganization; or (v) otherwise support any plan or sale process that is inconsistent with this Agreement, the Term Sheet or the Plan;

not instruct the First Lien Agent to take any action that is inconsistent with the terms and conditions of this Agreement or the Amended and Restated Forbearance Agreement and if the First Lien Agent takes or threatens to take any such action, direct the First Lien Agent not to take such action;

use commercially reasonable efforts to execute any document and give any notice, order, instruction, or direction necessary or reasonably requested by the Debtors to support, facilitate, implement, or consummate or otherwise give effect to the Restructuring;

(i) reasonably support the approval of the Disclosure Statement, the solicitation and the solicitation procedures (such procedures, in form and substance reasonably acceptable to the Requisite Consenting Lenders, the “Solicitation Procedures”), or any of the Definitive Documents by the Bankruptcy Court or any regulatory authority, (ii) reasonably support confirmation and consummation of the Plan, (iii) not oppose, object to or join in or support any objection to the Disclosure Statement, the solicitation and the Solicitation Procedures, or any of the Definitive Documents, or (iv) otherwise commence any proceeding to oppose or alter any of the terms of the Plan or any other document filed by Debtors (to the extent such document is in form and substance reasonably acceptable to the Requisite Consenting Lenders) in connection with the confirmation and consummation of the Plan;

(i) subject to receipt of the Disclosure Statement, vote, and cause its controlled affiliates and funds, as appropriate, to vote each of its First Lien Claims and, as applicable, any other voting claims against, or interests in, the Debtors, to accept the Plan by delivering its duly executed and completed ballot accepting the Plan on a timely basis following the commencement of the solicitation and its actual receipt of the Disclosure Statement and related solicitation materials that meet the requirements of applicable law, including sections 1125 and 1126 of the Bankruptcy Code; and (ii) to the extent such election is available, not elect on its ballot to preserve claims, if any, that each Ad Hoc Group Member may own or control that may be affected by any releases expressly contemplated by the Plan;

not change or withdraw (or cause to be changed or withdrawn) such vote; and

contemporaneously with the execution of this Agreement, enter into (and direct the First Lien Agent to enter into) the Amended and Restated Forbearance Agreement.

6. Additional Covenants of the Debtors.

For so long as this Agreement and the Amended and Restated Forbearance Agreement have not been validly terminated in their entirety in accordance with their terms, the Debtors agree and covenant to:

cause the sale process for the HERO Entities’ assets to continue during the Chapter 11 Cases. Purchase and sale agreements entered into by the HERO Entities contemplating the sale of any of the HERO Entities’ vessels that secure the First Lien Claims shall be subject to the approval of the Requisite Consenting Lenders, whether such agreements are entered into before, or during the Chapter 11 Cases, which consent of the Requisite Consenting Lenders shall not be unreasonably withheld;

provide draft copies of all “first day” motions or applications and other documents the Debtors intend to file with the Bankruptcy Court on the Petition Date to counsel to the Ad Hoc Group at least two (2) business days prior to the date on which the Debtors intend to file such documents and to consult in good faith with the Ad Hoc Group regarding the form and substance of any such proposed filing with the Bankruptcy Court. The Debtors will use good faith efforts to provide draft copies of all other material pleadings the Debtors intend to file with the Bankruptcy Court to counsel to the Ad Hoc Group within a reasonable time prior to filing such pleading to the extent practicable and shall consult in good faith with the Ad Hoc Group regarding the form and substance of any such proposed pleading;

conclude Solicitation (i) on or before June 3, 2016 for holders of First Lien Claims and (ii) on or before June 28, 2016 for holders of HERO Common Stock;

commence the Chapter 11 Cases on or before 7:00 a.m. New York City time on June 6, 2016;

file on the Petition Date such first day motions and pleadings as are reasonably acceptable, in form and substance, to the Requisite Consenting Lenders;

file the Plan, the motion to approve the use of cash collateral on an interim and final basis, and the Disclosure Statement and the motion to approve the Disclosure Statement with the Bankruptcy Court on the Petition Date;

obtain entry by the Bankruptcy Court of the interim Cash Collateral Order in form and substance reasonably acceptable to the Debtors and the Requisite Consenting Lenders on or before the date that is three (3) business days after the Petition Date;

The Bankruptcy Court shall have established a limited claims bar date for specific contingent and unliquidated claims, including, but not limited to, any claims asserting liability for personal injury, and claims in an amount in excess of $300,000 (the “Specified Claims”), in form and substance reasonably acceptable to the Debtors and the Requisite Consenting Lenders, on or before July 29, 2016; provided, however, that the Specified Claims shall specifically not include (i) claims of any taxing authorities, (ii) rejection damages claims, or (iii) any claims of the Executives (as defined below) or other employees who are parties to severance agreements with the Debtors; and the Executives and the other employees who are parties to severance agreements with the Debtors shall not be required to file any proofs of claim unless their applicable employment and/or severance agreements are rejected under the Plan by an order of the Court, which may be the Confirmation Order and such Executive or other employee has not been provided alternative severance compensation pursuant to the terms of the Plan or another agreement with the Debtors (with the consent of the Requisite Consenting Lenders) or the Wind Down Entity;

obtain approval by the Bankruptcy Court of the Disclosure Statement and the Solicitation Procedures and entry of the Confirmation Order on or before August 2, 2016, which Confirmation Order shall be a Final Order (as defined in the Term Sheet) on or before August 16, 2016;

use commercially reasonable efforts to consummate the Plan on or before August 16, 2016;

take no action that is materially inconsistent with this Agreement, the Term Sheet, or the Plan, or that would unreasonably delay approval or ratification, as applicable, of the Disclosure Statement, the solicitation and Solicitation Procedures, or confirmation and consummation of the Plan;

not directly or indirectly (A) join in or support any alternative plan or transaction other than the Plan; or (B) take any action to alter in any material respect, unreasonably delay, or impede the approval or ratification, as applicable, of the Disclosure Statement, the solicitation and Solicitation Procedures, and confirmation and consummation of the Plan;

object to any motion to approve or confirm, as applicable, any other plan of reorganization, sale transaction, or any motions related thereto, to the extent that the terms of any such motions, documents, or other agreements are inconsistent with this Agreement or the Term Sheet and such inconsistencies were not approved in writing by the Requisite Consenting Lenders;

continue to operate its businesses, market assets of the Debtors for sale, and conduct sale processes in accordance with its business judgment, and confer with the Ad Hoc Group, the Requisite Lenders, and their respective representatives, as reasonably requested, to report on operational matters, the asset sale process, and the general status of ongoing operations and dispositions;

use commercially reasonable efforts to provide prompt written notice to the Ad Hoc Group between the date hereof and the effective date of the Plan of (i) the occurrence, or failure to occur, of any event of which John Rynd, Troy Carson, Beau Thompson, Son Vann or Charlie Lestage (or the successors of the any of the foregoing) (the “Senior Executives”) have actual knowledge which occurrence or failure would be reasonably likely to cause (1) any representation or warranty of the Debtors contained in this Agreement to be untrue or inaccurate in any material respect, (2) any material covenant of the Debtors contained in this Agreement not to be satisfied in any material respect or (3) any condition precedent contained in the Plan or this Agreement not to occur or become impossible to satisfy, (ii) receipt of any written notice from any third party alleging that the consent of such party is or may be required as a condition precedent to consummation of the transactions contemplated by the Restructuring, (iii) receipt of any written notice from any governmental body that is material to the consummation of the transactions contemplated by the Restructuring, (iv) receipt of any written notice of any proceeding commenced, or, to the actual knowledge of the Senior Executives, threatened against the Debtors, that, if determined in a manner adverse to the Debtors, would be material to the consummation of the transactions contemplated by the Restructuring, and (v) any failure of the Debtors to comply, in any material respect, with or satisfy any covenant, condition or agreement to be complied with or satisfied by them hereunder hereunder as a condition precedent to the consummation of the transactions contemplated by the Restructuring;

use commercially reasonable efforts to obtain the earliest possible date for a hearing on confirmation of the Plan as the Bankruptcy Court may provide;

provide to the Ad Hoc Group and/or its professionals, upon reasonable advance notice to the Debtors, (i) reasonable access (without any material disruption to the conduct of the Debtors’ business) during normal business hours to the Debtors’ books, records and facilities, and (ii) reasonable access to the respective management and advisors of the Debtors during normal business hours for the purposes of evaluating the Debtors’ finances and operations and participating in the planning process with respect to the Restructuring; and

pay the reasonable and documented fees and expenses of Kirkland & Ellis LLP, as counsel to the Ad Hoc Group, White & Case LLP, as counsel to Luminus Management LLC and Soros Fund Management, LLC, and one local counsel to the Ad Hoc Group, and the reasonable and documented fees and expenses of other professionals retained by the Ad Hoc Group that have executed engagement letters with the Debtors, as well as the reasonable fees and expenses incurred by the First Lien Agent, including King & Spalding LLP, as restructuring counsel, White & Case LLP, as counsel with respect to the administration of the First Lien Credit Agreement and the other Loan Documents (as defined in the First Lien Credit Agreement), special maritime counsel and one local counsel, in each case incurred in connection with the Restructuring.

7. Preservation of Participation Rights. For the avoidance of doubt, nothing in this Agreement shall limit any rights of any Party, subject to applicable law, the Plan, and the Term Sheet, to (a) appear and participate as a party in interest in any contested matter to be adjudicated in the Chapter 11 Cases; (b) initiate, prosecute, appear, or participate as a party in interest in any adversary proceeding in the Bankruptcy Cases, so long as, in the case of each of (a) or (b), such appearance, initiation, prosecution or participation and the positions advocated in connection therewith are not materially inconsistent with this Agreement, the Amended and Restated Forbearance Agreement, the Plan or the Term Sheet, as applicable; (c) object to any motion to approve or confirm, as applicable, any other plan of reorganization or liquidation, sale transaction, or any motions related thereto, to the extent that the terms of any such motions, documents, or other agreements are materially inconsistent with this Agreement, the Plan or the Term Sheet and such inconsistencies were not approved in writing by each other Party; (d) file a copy of this Agreement (including all exhibits hereto) or a description of the matters herein with the Bankruptcy Court or as required under applicable non-bankruptcy law; (e) appear as a party in interest in the Chapter 11 Cases for the purpose of contesting whether any matter or fact is or results in a breach of, or is materially inconsistent with, this Agreement or the Amended and Restated Forbearance Agreement; and (f) as applicable, file any proof of claim.

8. Mutual Representations and Warranties of All Parties. Each Party represents and warrants to each of the other Parties that, as of the date hereof:

it has all requisite power and authority to enter into this Agreement and to carry out the transactions contemplated by, and perform its obligations under, this Agreement;

the execution and delivery of this Agreement and the performance of its obligations hereunder have been duly authorized by all necessary action on its part; and

this Agreement constitutes the legally valid and binding obligation of such Party, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

9. Additional Representations and Warranties by the Ad Hoc Group Members. Each Ad Hoc Group Member (solely on its own behalf and not on behalf of any other Ad Hoc Group Member) represents and warrants to the best of its knowledge, as of the date hereof that:

Holdings by Ad Hoc Group. As of the date hereof, with respect to the First Lien Claims and, if applicable, HERO Common Stock held by such Ad Hoc Group Member as set forth on Schedule 1 hereto, such Ad Hoc Group Member (A) either (i) is the sole beneficial owner of the principal amount of such First Lien Claims and, if applicable, HERO Common Stock, or (ii) has sole investment or voting discretion with respect to the principal amount of such First Lien Claims and, if applicable, HERO Common Stock as set forth herein and has the power and authority to bind the beneficial owners of such

First Lien Claims and, if applicable, HERO Common Stock to the terms of this Agreement, and (B) has full power and authority to act on behalf of, vote, and consent to matters concerning such First Lien Claims and, if applicable, HERO Common Stock and to dispose of, exchange, assign, and transfer such First Lien Claims and, if applicable, HERO Common Stock.

No Transfers. As of the date hereof, with respect to the First Lien Claims and, if applicable, HERO Common Stock held by such Ad Hoc Group Member as set forth on Schedule 1 hereto, such Ad Hoc Group Member has made no assignment, sale, participation, grant, conveyance, pledge, or other transfer of, and has not entered into any other agreement to assign, sell, use, participate, grant, convey, pledge, or otherwise transfer, in whole in or part, any portion of its right, title, or interests in any such First Lien Claims and, if applicable, HERO Common Stock that are subject to this Agreement that conflict with the representations and warranties of such Ad Hoc Group Member herein or would render such Ad Hoc Group Member otherwise unable to comply with this Agreement and perform its obligations hereunder.

Sufficiency of Information Received. Such Ad Hoc Group Member has reviewed, or has had the opportunity to review, with the assistance of professional and legal advisors of its choosing, all information it deems necessary and appropriate for such Ad Hoc Group Member to evaluate the risks inherent in the Restructuring and accept the terms of the Plan as set forth in the Term Sheet.

10. Transfer Restrictions. No Ad Hoc Group Member shall (i) sell, use, pledge, assign, transfer, permit the participation in, or otherwise dispose of any ownership (including any beneficial ownership) in the First Lien Claims and, if applicable, HERO Common Stock set forth on Schedule 1 hereto in whole or in part; or (ii) grant any proxies, deposit any of such Ad Hoc Group Member’s interests in First Lien Claims and, if applicable, HERO Common Stock as set forth on Schedule 1 hereto into a voting trust, or enter into a voting agreement with respect to any such interest (collectively, the actions described in clauses (i) and (ii), a “Transfer”), unless it satisfies the following requirement (a transferee that satisfies such requirements, a “Permitted Transferee,” and such Transfer, a “Permitted Transfer”): The intended transferee executes and delivers to counsel to HERO and counsel to the Ad Hoc Group on the terms set forth below an executed form of the transfer agreement in the form attached hereto as Exhibit B (a “Transfer Agreement”) before such Transfer is effective (it being understood that any Transfer shall not be effective until notification of such Transfer and a copy of the executed Transfer Agreement is received by counsel to HERO and counsel to the Ad Hoc Group, in each case, on the terms set forth herein).

Notwithstanding anything to the contrary herein, (i) the foregoing provisions shall not preclude any Ad Hoc Group Member from transferring First Lien Claims and/or HERO Common Stock to affiliates of such Ad Hoc Group Member (each, a “Creditor Affiliate”), which Creditor Affiliate automatically shall be bound by this Agreement and the Amended and Restated Forbearance Agreement upon the transfer of such First Lien Claims and/or HERO Common Stock, (ii) the foregoing provisions shall not preclude any Party from transferring First

Lien Claims and/or HERO Common Stock to any other Party hereto, and (iii) a Qualified Marketmaker¹ that acquires any of the First Lien Claims and/or HERO Common Stock with the purpose and intent of acting as a Qualified Marketmaker for such First Lien Claims and/or HERO Common Stock, shall not be required to execute and deliver to counsel a Transfer Agreement or otherwise agree to be bound by the terms and conditions set forth in this Agreement and the Amended and Restated Forbearance Agreement if such Qualified Marketmaker transfers such First Lien Claims and/or HERO Common Stock (by purchase, sale, assignment, participation, or otherwise) to an Ad Hoc Group Member or Permitted Transferee (including, for the avoidance of doubt, the requirement that such transferee execute a Transfer Agreement) and the transfer otherwise is a Permitted Transfer.

This Agreement shall in no way be construed to preclude any Ad Hoc Group Member or any of its affiliates from acquiring additional First Lien Claims, HERO Common Stock or any other claim against the HERO Entities or equity interest in HERO; provided, however, that (i) if any Ad Hoc Group Member acquires additional or transferred First Lien Claims, any other claims against any of the HERO Entities or HERO Common Stock, as applicable, after the RSA Effective Date, such Ad Hoc Group Member shall notify the other Parties promptly of such acquisition including the amount of such acquisition and (ii) such acquired First Lien Claims, other claims or HERO Common Stock, as the case may be, shall automatically and immediately upon acquisition by an Ad Hoc Group Member, as applicable, be deemed subject to the terms of this Agreement (regardless of when or whether notice of such acquisition is given to in accordance herewith).

Any Transfer made in violation of this provision shall be void ab initio. Any Ad Hoc Group Member that effectuates a Permitted Transfer to a Permitted Transferee shall have no liability under this Agreement arising from or related to the failure of the Permitted Transferee to comply with the terms of this Agreement.

11. Termination of Obligations.

(a) This Agreement shall terminate and all of the obligations of the Parties shall be of no further force or effect in the event that and upon the occurrence of any of the following events: (i) occurrence of the effective date of the Plan, (ii) an order denying confirmation of the Plan is entered, (iii) an order confirming the Plan is reversed or vacated, (iv) any court of competent jurisdiction has entered an order declaring this Agreement to be unenforceable, (v) the Parties mutually agree to termination of this Agreement in writing, (vi) the termination of the Amended and Restated Forbearance Agreement or (vii) this Agreement is terminated pursuant to paragraph (b), (c) or (d) of this Section 11.

(b) The HERO Entities may, in their discretion, terminate this Agreement by written notice to counsel for the Ad Hoc Group, upon the occurrence of any of the following events:

As used herein, the term “Qualified Marketmaker” means an entity that (a) holds itself out to the public or the applicable private markets as standing ready in the ordinary course of business to purchase from customers and sell to customers Claims of the Debtors (or enter with customers into long and short positions in Claims against the Debtors), in its capacity as a dealer or market maker in claims against the Debtors and (b) is, in fact, regularly in the business of making a market in claims against issuers or borrowers (including debt securities or other debt).

(i) a determination by HERO’s board of directors (the “Board”), in good faith, based on the advice of its outside counsel, that proceeding with the Restructuring and pursuit of confirmation and consummation of the Plan would be inconsistent with the continued exercise of fiduciary duties under applicable law;

(ii) a breach by any Ad Hoc Group Member of its material covenants or other material obligations hereunder, which breach is not cured within three (3) business days after the giving of written notice by HERO of such breach to such Ad Hoc Group Member, provided that so long as non-breaching Ad Hoc Group Members party hereto continue to hold at least 2/3rds of the outstanding First Lien Claims, such termination shall be effective only with respect to such breaching Ad Hoc Group Member;

(iii) any Ad Hoc Group Member shall assert after the RSA Effective Date any claim or cause of action against any Debtor or any of its current directors, officers or advisors relating to the First Lien Credit Agreement, the First Lien Claims, the HERO Common Stock or the Restructuring, except the First Lien Claims themselves or to enforce the terms of this Agreement, provided that so long as non-breaching Ad Hoc Group Members party hereto continue to hold at least 2/3rds of the outstanding First Lien Claims, such termination shall be effective only with respect to such breaching Ad Hoc Group Member;

(iv) any representation or warranty in this Agreement made by any Ad Hoc Group Member shall have been untrue in any material respect when made, and such breach remains uncured for a period of three (3) business days following the breaching Ad Hoc Group Member’s receipt of notice thereof from HERO, provided that so long as non-breaching Ad Hoc Group Members party hereto continue to hold at least two-thirds of the outstanding First Lien Claims, such termination shall be effective only with respect to such breaching Ad Hoc Group Member; or

(v) the Bankruptcy Court (or other court of competent jurisdiction) enters an order (A) invalidating, disallowing, subordinating or limiting the enforceability, priority or validity of any of the First Lien Claims, or (B) the effect of which would render the Plan incapable of consummation on the terms set forth in this Agreement and the Term Sheet;

provided, that upon a termination of this Agreement by the HERO Entities pursuant to this Section 11(b) with respect to any Ad Hoc Group Member or all Ad Hoc Group Members, (x) all obligations of each affected Ad Hoc Group Member hereunder shall immediately terminate without further action or notice by such Ad Hoc Group Member, and (y) the HERO Entities (and each of its directors, officers, employees, advisors, subsidiaries, and representatives) shall not have or incur any liability under this Agreement or otherwise on account of such termination.

(c) This Agreement may be terminated by the Requisite Consenting Lenders upon the occurrence of any of the following events (it being understood that the following termination events are intended solely for the benefit of the Ad Hoc Group) (the “Lender Termination Events”):

(i) filing by the Debtors of a plan (or disclosure statement related thereto) in the Chapter 11 Cases that is materially inconsistent with the terms of the Term Sheet and this Agreement and not otherwise in form and substance reasonably acceptable to the Requisite Consenting Lenders;

(ii) any representation or warranty in this Agreement made by the HERO Entities shall have been untrue in any material respect when made, and such breach remains uncured for a period of three (3) business days following HERO’s receipt of notice thereof from the Requisite Consenting Lenders;

(iii) any of the Debtors or their non-Debtor affiliates shall assert after the RSA Effective Date any claim or cause of action against the First Lien Agent or any First Lien Lender, except to enforce the terms of this Agreement;

(iv) after filing of the Plan, any amendment or modification to the Plan, or the filing of any pleading by any of the HERO Entities that seeks to amend or modify the Plan, which amendment, modification or filing is materially inconsistent with the terms of the Term Sheet or this Agreement and not otherwise in form and substance reasonably acceptable to the Requisite Consenting Lenders;

(v) a breach by any of the HERO Entities of its material covenants or other material obligations under this Agreement or the Term Sheet, which breach is not cured within three (3) business days after the giving of written notice by counsel for the Ad Hoc Group (acting at the direction of the Requisite Consenting Lenders) of such breach;

(vi) the Debtors (A) withdraw the Plan, (B) publicly announce their intention not to support the Plan or the Restructuring, (C) file a motion with the Bankruptcy Court seeking approval of any transaction that is inconsistent with the Restructuring, or (D) agree to pursue (including as may be evidenced by any term sheet, letter of intent or similar document) or publicly announce their intent to pursue any transaction that is inconsistent with the Restructuring;

(vii) the failure of the Debtors to comply with the Milestones within the periods specified therein, unless otherwise agreed in writing with the Requisite Consenting Lenders and the Debtors; it being understood that if a Milestone ends on a weekend or holiday on which the Bankruptcy Court is not open and holding hearings, such Milestone shall be automatically extended to the next business day on which the Bankruptcy Court is open and holding hearings;

(viii) the Bankruptcy Court enters an order modifying or terminating the Debtors’ exclusive right to file and/or solicit acceptances of a plan of reorganization (including the Plan);

(ix) the Bankruptcy Court (or other court of competent jurisdiction) enters an order (A) directing the appointment of an examiner with expanded powers or a trustee in any of the Chapter 11 Cases, (B) converting any of the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, (C) dismissing any of the Chapter 11 Cases, (D) invalidating, disallowing, subordinating or limiting the enforceability, priority or validity of any of the First Lien Claims, or (E) the effect of which would render the Plan incapable of consummation on the terms set forth in this Agreement and the Term Sheet; or

(x) the First Lien Agent shall not have received all the funds in the Escrow Account to prepay the First Lien Claims in accordance with the terms of the Term Sheet by the date that is three (3) business days after the delivery by the First Lien Agent of a written instruction to the Escrow Agent to distribute all of the funds in the Escrow Account to the First Lien Agent to prepay the Loans pursuant to III(d) of the Escrow Agreement and Section 2.10(a)(i) of the First Lien Credit Agreement.

(d) The HERO Entities or the Ad Hoc Group (by written notice executed by counsel at the direction of the Requisite Consenting Lenders) may terminate this Agreement by written notice to the Parties in the event that the Bankruptcy Court or other governmental authority shall have issued any order, injunction or other decree or take any other action, which restrains, enjoins or otherwise prohibits the implementation of the Restructuring and/or the Plan substantially on the terms and conditions set forth in this Agreement.

(e) This Agreement shall terminate solely as to any Ad Hoc Group Member on the date on which such Ad Hoc Group Member has transferred all (but not less than all) of its First Lien Claims (and HERO Common Stock, if any) in accordance with Section 9 of this Agreement.

(f) If this Agreement is terminated pursuant to this Section 11, all further obligations of the Parties hereunder shall be terminated and without further liability; provided that each Party shall have all rights and remedies available to it under applicable law. Upon a termination of this Agreement in accordance with this Section, no Party hereto shall have any continuing liability or obligation to any other Party hereto and the provisions of this Agreement shall have no further force or effect; provided that no such termination shall relieve any party from liability for its breach or non-performance of its obligations hereunder prior to the date of such termination.

12. Fiduciary Duties. Notwithstanding anything to the contrary herein, nothing in this Agreement shall require HERO, any of the other HERO Entities, or any of their respective officers or directors (in such person’s capacity as such) to take any action, or to refrain from taking any action, to the extent that taking such action or refraining from taking such action would be inconsistent with such person’s or entity’s fiduciary obligations under applicable law. HERO shall give the Ad Hoc Group not less than three (3) business days’ prior written notice before the exercise of rights under this Section 12 or the termination of this Agreement in accordance with Section 11(b)(i) of this Agreement (it being understood that the specific performance provisions of Section 13 of this Agreement shall not be applicable to the Parties with respect to the exercise of rights under this Section 12 or termination of this Agreement in accordance with Section 11(b)(i) of this Agreement). For the avoidance of doubt, the foregoing shall not preclude the Ad Hoc Group from challenging the appropriateness of the exercise of fiduciary duties as the basis for the exercise of rights under this Section 12 or the termination of this Agreement in accordance with Section 11(b)(i) of this Agreement.

13. Specific Performance. It is understood and agreed by the Parties that money damages would be an insufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief (without the posting of any bond and without proof of actual damages) as a remedy of any such breach, including an order of the Bankruptcy Court or other court of competent jurisdiction requiring any Party to comply promptly with any of its obligations hereunder. The Parties expressly consent to entry of orders by the Bankruptcy Court to enforce this Agreement.

14. Counterparts. This Agreement and any amendments, waivers, consents, or supplements hereto or in connection herewith may be executed in multiple counterparts (including by means of telecopied or electronically transmitted signature pages), all of which taken together shall constitute one and the same Agreement.

15. No Solicitation and Acknowledgements. Each Party acknowledges that (a) no securities of any of the HERO Entities are being offered or sold hereby and this Agreement neither constitutes an offer to sell nor a solicitation of an offer to buy any securities of any of the HERO Entities and (b) this Agreement is not, and shall not be deemed to be, a solicitation of a vote for the acceptance of any chapter 11 plan (including the Plan) pursuant to section 1125 of the Bankruptcy Code. The acceptance of votes from holders of claims against, and interests in, the Debtors, as applicable, will not be solicited until such holders have received the Disclosure Statement and related solicitation materials that meet the requirements of the Bankruptcy Code, including Bankruptcy Code sections 1125 and 1126.

16. Relationship Among Ad Hoc Group Members. The obligations of each Ad Hoc Group Member under this Agreement are several and not joint with the obligations of any other Ad Hoc Group Member, and no Ad Hoc Group Member shall be responsible in any way for the performance of the obligations of any other Ad Hoc Group Member under this Agreement. Each of the Ad Hoc Group Members, on the one hand, and the Debtors, on the other hand, acknowledge that they are in privity with each other and that no Ad Hoc Group Member is in privity with any other Ad Hoc Group Member in connection with this Agreement or any of the transactions contemplated hereby. It is understood and agreed that no Ad Hoc Group Member has any duty of trust or confidence of any kind or form with any other Ad Hoc Group Member, and, except as expressly provided in this Agreement, there are no commitments among or between them. In this regard, it is understood and agreed that any Ad Hoc Group Member may trade in and vote the First Lien Claims, or other debt or equity securities of the HERO Entities, including without limitation the HERO Equity Interests, without the consent of the HERO Entities or any other Ad Hoc Group Member, subject to the terms of this Agreement and applicable securities laws. Nothing contained in this Agreement, and no action taken by any Ad Hoc Group Member pursuant hereto shall be deemed to constitute the Ad Hoc Group as, and the Debtors agree that the Ad Hoc Group does not so constitute, a partnership, an association, a joint venture or any other kind of entity, or create a presumption that any Ad Hoc Group Member is in any way acting in concert or as a group, and the Debtors will not assert any such claim and the Debtors agree that the Ad Hoc Group Members are not acting in concert or as a group with respect to the transactions contemplated by this Agreement. The Debtors acknowledge and each Ad Hoc Group Member confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Ad Hoc Group Member shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Ad Hoc Group Member to be joined as an additional party in any proceeding for such purpose. No prior history, pattern or practice of sharing confidences among or between the Ad Hoc Group Members shall in any way affect or negate the understandings and agreements set forth in this Section 16.

17. Confidentiality. Other than as may be required by applicable law and regulation or by any governmental or regulatory authority or as may be required to comply with the terms of this Agreement, no Party shall make any public announcement regarding this Agreement without the consent of the other Parties, and each Party shall coordinate with the other Parties regarding communications with the press with respect to this Agreement; for the avoidance of doubt, each Party shall have the right, without any obligation to any other Party, to decline to comment to the press with respect to this Agreement.

18. Time is of the Essence. The Parties acknowledge and agree that time is of the essence, and that they must each use best efforts to effectuate and consummate the Restructuring as soon as reasonably practicable.

19. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

(a) By its execution and delivery of this Agreement, each of the Parties hereto irrevocably and unconditionally agrees for itself that any legal action, suit, or proceeding against it with respect to any matter under or arising out of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit, or proceeding, shall be brought, to the extent possible, in either the United States District Court for the Southern District of New York or any New York State Court sitting in New York City or following the Petition Date, the Bankruptcy Court (the “Chosen Courts”). By execution and delivery of this Agreement, each of the Parties irrevocably accepts and submits itself to the exclusive jurisdiction of the Chosen Courts, generally and unconditionally, with respect to any such action, suit, or proceeding, and waives any objection it may have to venue or the convenience of the forum.

(b) Each Party hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in any legal proceeding arising out of, or relating to, this Agreement or the transactions contemplated hereby (whether based on contract, tort, or any other theory). Each Party (i) certifies that no representative, agent, or attorney of any other Party has represented, expressly or otherwise, that such other Party would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other Parties have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 19.

20. Independent Analysis. Each Party hereby confirms that it has made its own decision to execute this Agreement based upon its own independent assessment of documents and information available to it, as it has deemed appropriate.

21. Third-Party Beneficiaries.

Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties hereto and no other person or entity shall be a third party beneficiary hereof.

22. Notices. Any notice, request, instruction or other document to be given hereunder by any party to the others shall be in writing and delivered personally or sent by registered or certified mail, postage prepaid, by email or overnight courier.

(a)	If to the Ad Hoc Group, to:

Brian S. Lennon

Robert A. Britton

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

***@***

(b)	If to any of the HERO Entities, to:

Beau M. Thompson

Senior Vice President, General Counsel and Secretary

Hercules Offshore, Inc.

9 Greenway Plaza, Suite 2200

Houston, Texas 77046

***@***

With a copy to:

Michael S. Stamer

Philip C. Dublin

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park

Bank of America Tower

New York, New York 10036

***@***

23. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the

remainder of such provision or the remaining provisions of this Agreement. In the event that any part of this Agreement is declared by any court or other judicial or administrative body to be null, void or unenforceable, said provision survives to the extent it is not so declared, and all of the other provisions of this Agreement remain in full force and effect only if, after excluding the portion deemed to be unenforceable, the remaining terms provide for the consummation of the transactions contemplated hereby in substantially the same manner as originally set forth at the later of the date this Agreement was executed or last amended.

24. Mutual Drafting. This Agreement is the result of the Parties’ joint efforts, and each of them and their respective counsel have reviewed this Agreement and each provision hereof has been subject to the mutual consultation, negotiation, and agreement of the Parties, and the language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and therefore there shall be no construction against either Party based on any presumption of that Party’s involvement in the drafting thereof.

25. Headings. The headings used in this Agreement are for convenience of reference only and do not constitute a part of this Agreement and shall not be deemed to limit, characterize, or in any way affect any provision of this Agreement, and all provisions of this Agreement shall be enforced and construed as if no headings had been used in this Agreement.

26. Amendments. Notwithstanding anything to the contrary contained herein, this Agreement may not be modified, amended, or supplemented, nor shall any provision or requirement hereof be waived, without the prior written agreement signed by both (a) the HERO Entities and (b) the Requisite Consenting Lenders; provided, that notwithstanding the foregoing, any modifications, amendments, or supplements or waivers to the Agreement, including any exhibits hereto (including any provision in the Term Sheet), to (i) the sub-provision entitled “First Lien Claims” in the provision entitled “Treatment of Claims and Interests” in the Term Sheet, (ii) the sub-provisions entitled “HERO Common Stock” and “Other Equity Interests” in the provisions entitled “Treatment of Claims and Interests” in the Term Sheet, (iii) any documentation with regard to (i) through (ii) above, (iv) any change to this Section 26, and (v) any proposed modification, amendment or supplement to, or waiver of, any provision of the Agreement that would, or would reasonably be expected to, materially and adversely affect any Ad Hoc Group Member in a manner that is disproportionate to any other Ad Hoc Group Member or the Ad Hoc Group as a whole, may not be made without the prior written consent of the HERO Entities and each member of the Ad Hoc Group (or, in the case of “subsection (v)”, by such Ad Hoc Group Member that would be so affected); provided further that with regard to the obligations of any Ad Hoc Group Member to vote its HERO Equity Interests pursuant to the terms of this Agreement, including, without limitation, any obligations in Section 5 of this Agreement, such provisions may be modified, amended or supplemented by any Ad Hoc Group Member, with respect to itself, and the Debtors, without the participation of, or consent of, any other Ad Hoc Group Member.

27. Several, Not Joint, Claims. The agreements, representations, warranties, and obligations of the Parties under this Agreement are, in all respects, several and not joint.

[Signature Pages Follow]

IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first above written.


HERCULES OFFSHORE, INC.

By:		/s/ Troy Carson
Name: Troy Carson
Title: SVP & CFO

CLIFFS DRILLING COMPANY FDT LLC
FDT HOLDINGS LLC
HERCULES DRILLING COMPANY, LLC
HERCULES OFFSHORE LIFTBOAT COMPANY LLC
HERO HOLDINGS, INC.
SD DRILLING LLC
THE OFFSHORE DRILLING COMPANY
THE ONSHORE DRILLING COMPANY
TODCO AMERICAS INC.
TODCO INTERNATIONAL INC.
HERCULES LIFTBOAT COMPANY, LLC
HERCULES OFFSHORE SERVICES LLC
HERCULES OFFSHORE INTERNATIONAL, LLC

By:		/s/ Troy Carson
Name: Troy Carson
Title: Vice President


HERCULES OFFSHORE (NIGERIA) LIMITED

By:		/s/ Troy Carson
Name: Troy Carson
Title: Authorized Signatory


DISCOVERY OFFSHORE (GIBRALTAR) LIMITED

By:		/s/ Troy Carson
Name: Troy Carson
Title: Authorized Signatory

By:		/s/ Beau Thompson
Name: Beau Thompson
Title: Authorized Signatory


DISCOVERY NORTH SEA LTD.
DISCOVERY OFFSHORE SERVICES LTD.
HERCULES ASSET MANAGEMENT LTD.
HERCULES INTERNATIONAL DRILLING LTD.
HERCULES INTERNATIONAL HOLDINGS, LTD.
HERCULES INTERNATIONAL MANAGEMENT
COMPANY LTD.
HERCULES INTERNATIONAL OFFSHORE, LTD.
HERCULES NORTH SEA, LTD.
HERCULES OFFSHORE ARABIA, LTD.
HERCULES OFFSHORE HOLDINGS LTD.
HERCULES OFFSHORE MIDDLE EAST LTD.
HERCULES OILFIELD SERVICES LTD.
TODCO TRINIDAD LTD.

By:		/s/ Claus E. Feyling
Name: Claus E. Feyling
Title: Director


HERCULES OFFSHORE LABUAN CORPORATION

By:		/s/ Claus E. Feyling
Name: Claus E. Feyling
Title: Director


HERCULES BRITANNIA HOLDINGS LIMITED
HERCULES BRITISH OFFSHORE LIMITED
HERCULES NORTH SEA DRILLER LIMITED
HERCULES OFFSHORE UK LIMITED

By:		/s/ Claus E. Feyling
Name: Claus E. Feyling
Title: Director


LUMINUS ENERGY MASTER FUND, LTD., as
Lender

By:		/s/ Jonathan Barrett
		Name : Jonathan Barrett
		Title : Director