8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (date of earliest event reported): November 15, 2016

HERCULES OFFSHORE, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-37623	56-2542838
(State of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)
9 Greenway Plaza, Suite 2200
Houston, Texas		77046
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (713) 350-5100

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.03. Bankruptcy or Receivership.

As previously disclosed by Hercules Offshore, Inc. (the “Company”) on the Current Report on Form 8-K filed on June 6, 2016, the Company and certain of its U.S. domestic direct and indirect subsidiaries (together with the Company, the “Debtors”) filed under chapter 11 of the United States Bankruptcy Code (“Chapter 11”) on June 5, 2016 in the United States Bankruptcy Court for the District of Delaware (the “Court”). The Chapter 11 case (the “Chapter 11 Case”) is being administered under the caption In re: Hercules Offshore, Inc. (Case No. 16-11385).

On November 1, 2016, the Court issued a memorandum decision determining to confirm the Debtors’ Modified Joint Prepackaged Chapter 11 Plan (incorporating mediation settlement) (the “Plan”). On November 15, 2016, the Court entered an order (the “Confirmation Order”) confirming the Plan. The Plan contemplates a controlled wind down of the operations of the Debtors and certain of the Company’s other domestic and foreign direct and indirect subsidiaries (collectively with the Debtors, the “HERO Entities”). Pursuant to the Plan, all equity interests in the Company are being canceled and extinguished and a liquidation trust (referred to in the Plan as the Wind Down Entity, the “Wind Down Entity”) is being formed to sell, monetize or otherwise dispose of the assets of the HERO Entities. Beneficial interests in the Wind Down Entity will be distributed to former holders of common stock of the Company upon consummation of the Plan.

A copy of the Confirmation Order is filed as Exhibit 2.1 hereto and is incorporated herein by reference. A copy of the Plan is filed as Exhibit 2.2 hereto and is incorporated herein by reference. Information regarding the assets and liabilities of the Debtors, as of the most recent practicable date, was included in the Monthly Operating Report filed by the Debtors with the Court for the period from September 1, 2016 and ending on September 30, 2016 (the “September Monthly Operating Report”). The September Monthly Operating Report is attached hereto as Exhibit 99.3 and described in Item 7.01 below.

Item 7.01. Regulation FD Disclosure.

The Debtors filed a monthly operating report for (i) the period beginning July 1, 2016 and ending July 31, 2016 (the “July Monthly Operating Report”), (ii) the period beginning August 1, 2016 and ending August 31, 2016 (the “August Monthly Operating Report”) and (iii) the September Monthly Operating Report (collectively with the July Monthly Operating Report, the August Monthly Operating Report and the September Monthly Operating Report, the “Monthly Operating Reports”) with the Court. The July Monthly Operating Report, the August Monthly Operating Report and the September Monthly Operating Report are furnished as Exhibits 99.1, 99.2 and 99.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

The information in this Item 7.01 and the exhibits hereto are being furnished, not filed. Accordingly, such information will not be incorporated by reference into any registration statement filed by the Company under the Securities Act of 1933, as amended. By filing this Form 8-K and furnishing this information, the Company makes no statement or admission as to the materiality of any information in Item 7.01 or the exhibits hereto.

Cautionary Statement Regarding Monthly Operating Reports

The Company cautions investors and potential investors not to place undue reliance upon the information contained in the Monthly Operating Reports, which were not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of the Company. Each Monthly Operating Report is limited in scope, covers a limited time period and has been prepared solely for the purpose of complying with the monthly reporting requirements applicable in the Chapter 11 Case and is in a format acceptable to the U.S. Trustee (as defined in the Plan). The forecasts contained in each Monthly Operating Report reflect estimates and assumptions made by management of the Company with respect to cash receipts and disbursements, as well as numerous other factors. These factors are difficult to predict accurately and in many cases are outside of the Company’s control. Consequently, it is likely that actual results will differ from those reflected in the Monthly Operating Reports and such differences may be significant. The Company has not made and does not make any representation to any person regarding the Company’s future results. Furthermore, the Company is not required to publicly update the Monthly Operating Reports to reflect more current facts or estimates or the occurrence of future events, including if the facts, estimates and assumptions upon which each Monthly Operating Report is based are erroneous. The Monthly Operating Reports were not audited or reviewed by independent accountants, were not prepared in accordance with generally accepted accounting principles in the United States, are in a format prescribed by applicable bankruptcy laws, and are subject to future adjustment (which may be material) and reconciliation. There can be no assurance that, from the perspective of an investor or potential investor in the Company’s securities, the Monthly Operating Reports are complete. Each Monthly Operating Report also contains information for periods which are shorter or otherwise different from those required in the Company’s reports pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such information might not be indicative of the Company’s financial condition or operating results for the period that would be reflected in the Company’s financial statements or in its reports pursuant to the Exchange Act. Results set forth in the Monthly Operating Reports should not be viewed as indicative of future results.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
2.1	Confirmation Order for Joint Prepackaged Chapter 11 Plan.
2.2	Debtors’ Modified Joint Prepackaged Chapter 11 Plan.
99.1	Monthly Operating Report for the period beginning July 1, 2016 and ending July 31, 2016.
99.2	Monthly Operating Report for the period beginning August 1, 2016 and ending August 31, 2016.
99.3	Monthly Operating Report for the period beginning September 1, 2016 and ending September 30, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HERCULES OFFSHORE, INC.
Date: November 17, 2016	By:	/s/ Beau M. Thompson
		Beau M. Thompson
		Senior Vice President, General Counsel
		and Secretary

EXHIBIT INDEX

Exhibit Number	Description
2.1	Confirmation Order for Joint Prepackaged Chapter 11 Plan.
2.2	Debtors’ Modified Joint Prepackaged Chapter 11 Plan.
99.1	Monthly Operating Report for the period beginning July 1, 2016 and ending July 31, 2016.
99.2	Monthly Operating Report for the period beginning August 1, 2016 and ending August 31, 2016.
99.3	Monthly Operating Report for the period beginning September 1, 2016 and ending September 30, 2016.

EX-2.1

Exhibit 2.1

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re	)	Chapter 11
	)
HERCULES OFFSHORE, INC., et al.,	)	Case No. 16-11385 (KJC)
	)
Debtors.1	) )	(Jointly Administered)
	)

ORDER APPROVING THE DEBTORS’ DISCLOSURE STATEMENT FOR,

AND CONFIRMING, THE DEBTORS’ JOINT PREPACKAGED CHAPTER 11 PLAN

The above-captioned debtors and debtors in possession (collectively, the “Debtors”) having:²

a. distributed, on or about May 31, 2016 (i) the Debtors’ Joint Prepackaged Chapter 11 Plan [Docket No. 18] (the “Initial Plan”), (ii) the Disclosure Statement for the Joint Prepackaged Chapter 11 Plan [Docket No. 19] (the “Disclosure Statement”), and (iii) appropriate ballots for voting on the Initial Plan to holders of Claims entitled to vote on the Plan, namely holders of Class 3 First Lien Claims, and holders of Class 7 HERO Common Stock, in accordance with the terms of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”), the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local Rules”);

b. commenced, on June 5, 2016 (the “Petition Date”), the Chapter 11 Cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code;

c. filed,³ on June 6, 2016, the Initial Plan and the Disclosure Statement;

¹  The Debtors in the Chapter 11 Cases, along with the last four digits of each Debtor’s federal tax identification number, are: Cliffs Drilling Company (8934); Cliffs Drilling Trinidad L.L.C. (5205); FDT LLC (7581); FDT Holdings LLC (4277); Hercules Drilling Company, LLC (2771); Hercules Offshore, Inc. (2838); Hercules Offshore Services LLC (1670); Hercules Offshore Liftboat Company LLC (5303); HERO Holdings, Inc. (5475); SD Drilling LLC (8190); THE Offshore Drilling Company (4465); THE Onshore Drilling Company (1072); TODCO Americas Inc. (0289); and TODCO International Inc. (0326). The Debtors’ corporate headquarters are located at, and the mailing address for each Debtor is, 9 Greenway Plaza, Suite 2200, Houston, TX 77046.

²  Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Plan (as defined herein), the Disclosure Statement (as defined herein), or the Bankruptcy Code (as defined herein), as applicable. The rules of interpretation set forth in Article 1.B of the Plan apply.

³  Unless otherwise indicated, use of the term “filed” herein refers also to the service of the applicable document filed on the docket in the Chapter 11 Cases, as applicable.

d. filed, on June 6, 2016, the Motion of Hercules Offshore, Inc., et al., for Entry of an Order (A) Scheduling a Combined Disclosure Statement Approval and Plan Confirmation Hearing, (B) Establishing a Plan and Disclosure Statement Objection Deadline and Related Procedures, (C) Approving the Solicitation Procedures, and (D) Approving the Confirmation Hearing Notice [Docket No. 16] (the “Scheduling and Solicitation Procedures Motion”);

e. filed, on June 6, 2016, the Declaration of Troy L. Carson in Support of First Day Motions [Docket No. 3] (the “First Day Declaration”), detailing the facts and circumstances giving rise to the need for commencement of the Chapter 11 Cases and relief being sought in the First Day Motions;

f. filed, on June 6, 2016, the Preliminary Declaration of Christina Pullo of Prime Clerk LLC Regarding Solicitation of Votes and Tabulation of Ballots Cast on the Debtors’ Joint Prepackaged Chapter 11 Plan [Docket No. 20], which detailed the preliminary result of the Initial Plan voting process (the “Preliminary Voting Report”);

g. filed, on June 6, 2016, the Affidavit of Service of Solicitation Materials [Docket No. 52];

h. served, on or about June 16, 2016, the Notice of (A) Commencement of Prepackaged Chapter 11 Bankruptcy Cases, (B) Combined Hearing on the Disclosure Statement, Confirmation of the Joint Prepackaged Chapter 11 Plan, and Related Matters, and (C) Objection Deadlines, and Summary of the Debtors’ Joint Prepackaged Chapter 11 Plan [Docket No. 121] (the “Confirmation Hearing Notice”), which contained notice of the commencement of the Chapter 11 Cases, the date and time set for the hearing to consider approval of the Disclosure Statement and Confirmation of the Plan (the “Confirmation Hearing”), and the deadline for filing objections to the Initial Plan and the Disclosure Statement, on all creditors and equity holders of the Debtors;

i. published, on June 21, 2016, in The Wall Street Journal (National Edition), as evidenced by the Affidavit of Publication [Docket No. 133] (the “First Publication Affidavit”), the Confirmation Hearing Notice, consistent with the order granting the Scheduling and Solicitation Procedures Motion [Docket No. 51] (the “Scheduling and Solicitation Procedures Order”);

j. filed, on June 20, 2016, the Affidavit of Service of the Confirmation Hearing Notice [Docket No. 106] (the “Confirmation Hearing Affidavit of Service”);

k. filed, on June 24, 2016, the Affidavit of Publication of the Confirmation Hearing Notice [Docket No. 133] (the “Confirmation Hearing Affidavit of Publication” and, together with the Confirmation Hearing Affidavit of Service, the “Confirmation Hearing Notice Affidavits”);

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l. filed, on June 30, 2016, the Notice of Rescheduled (A) Combined Hearing on the Disclosure Statement, Confirmation of the Joint Prepackaged Chapter 11 Plan, and Related Matters, (B) Related Objection Deadlines and (C) Voting Deadline for Holders of HERO Common Stock [Docket No. 148] (the “Rescheduled Confirmation Hearing Notice”), which contained notice of the amended date for the Confirmation Hearing, the amended deadline for filing objections to the Initial Plan and the Disclosure Statement, and the amended deadline for holders of HERO Common Stock to vote on the Initial Plan;

m. published, on July 6, 2016, in The Wall Street Journal (National Edition), as evidenced by the Affidavit of Publication [Docket No. 176], (the “Second Publication Affidavit”), the Rescheduled Hearing Notice, consistent with the order amending the Scheduling and Solicitation Procedures Order [Docket No. 144] (the “Amended Scheduling Order”);

n. filed, on July 7, 2016, the Affidavit of Service of the Rescheduled Confirmation Hearing Notice [Docket No. 173] (the “Rescheduled Confirmation Hearing Notice Affidavit”);

o. filed, on July 18, 2016, the Supplemental Declaration of Christina Pullo of Prime Clerk LLC Regarding Solicitation of Votes and Tabulation of Ballots Cast on the Debtors’ Joint Prepackaged Chapter 11 Plan [Docket No. 225], which detailed the final results of the Initial Plan voting process (the “Final Voting Report” and, together with the Preliminary Voting Report, the “Voting Reports”);

p. filed, on July 22, 2016 the Plan Supplement for the Debtors’ Joint Prepackaged Chapter 11 Plan [Docket No. 240] (as modified, amended, or supplemented from time to time, the “Initial Plan Supplement” and which, for purposes of the Plan and this Confirmation Order, is included in the definition of “Plan”, except to the extent that the Initial Plan Supplement has been modified by the Amended Plan Supplement (as defined below));

q. filed, on July 22, 2016, the Notice of Debtors Proposed Assumption and Assignment of Executory Contracts and Unexpired Leases [Docket No. 241] (the “Assumption Notice”);

r. filed, on July 27, 2016, the Affidavit of Service of the Assumption Notice [Docket No. 249] (the “Assumption Notice Affidavit”);

s. filed, on July 28, 2016, the Supplemental Notice of Debtors Proposed Assumption and Assignment of Executory Contracts and Unexpired Leases [Docket No. 261] (the “Supplemental Assumption Notice”);

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t. filed, on August 2, 2016, the Amended Affidavit of Service of the Supplemental Assumption Notice [Docket No. 279] (the “Supplemental Assumption Notice Affidavit”);

u. filed, on August 4, 2016, the Notice of Rescheduled (A) Combined Hearing on the Disclosure Statement, Confirmation of the Joint Prepackaged Chapter 11 Plan, and Related Matters, (B) Related Objection Deadlines and (C) Voting Deadline for Holders of HERO Common Stock [Docket No. 299] (the “Second Rescheduled Confirmation Hearing Notice”), which contained notice of the amended date for the Confirmation hearing;

v. filed, on August 5, 2016, the Debtors’ Memorandum of Law in Support of an Order Approving the Debtors’ Disclosure Statement for, and Confirming, the Debtors’ Joint Prepackaged Chapter 11 Plan [Docket Nos. 301, 308] (the “Confirmation Brief”) and the Declaration of Troy L. Carson in Support of Confirmation of the Debtors’ Joint Prepackaged Chapter 11 Plan [Docket No. 302] (the “Carson Declaration” and, together with the First Day Declaration, the “Declarations”);

w. filed, on August 9, 2016, the Affidavit of Service of the Second Rescheduled Confirmation Hearing Notice [Docket No. 314] (the “Second Rescheduled Confirmation Hearing Notice Affidavit”);

x. filed, on August 9, 2016, the Second Supplemental Notice of Debtors Proposed Assumption and Assignment of Executory Contracts and Unexpired Leases [Docket No. 360] (the “Second Supplemental Assumption Notice”);

y. filed, on September 13, 2016, the Affidavit of Service of the Second Supplemental Assumption Notice [Docket No. 360] (the “Second Supplemental Assumption Notice Affidavit”);

z. filed, on September 15, 2016, the Debtors’ Joint Prepackaged Chapter 11 Plan (Incorporating Mediation Settlement) [Docket No. 369] (the “First Modified Plan”);

aa. filed, on September 15, 2016, the Notice of Filing of Updated Recovery Analysis [Docket No. 371] (the “Updated Recovery Analysis”);

bb. filed, on September 19, 2016, the Affidavit of Service of the First Modified Plan and the Updated Recovery Analysis [Docket No. 376] (the “First Modified Plan Affidavit”);

cc. filed, on October 18, 2016, the Debtors’ Modified Joint Prepackaged Chapter 11 Plan (Incorporating Mediation Settlement) [Docket No. 436] (the “Plan”);

dd. filed, on October 18, 2016, the First Amended Plan Supplement for the Debtors’ First Modified Joint Prepackaged Chapter 11 Plan [Docket No. 438] (the “Amended Plan Supplement” and, together with the Initial Plan Supplement, the “Plan Supplement” and which, for purposes of the Plan and this Confirmation Order, is included in the definition of “Plan”);

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ee. filed, on October 18, 2016, the Statement of Stipulated Facts [Docket No. 431] (the “Statement of Stipulated Facts”) and the Debtors’ Post-Trial Memorandum of Law [Docket No. 434] (the “Post-Trial Brief”);

ff. filed, on October 21, 2016, the Affidavit of Service of the Plan and the Amended Plan Supplement [Docket No. 444] (the “Plan Affidavit”);

gg. filed, on November 4, 2016, the Third Supplemental Notice of Debtors’ Proposed Assumption and Assignment of Executory Contracts and Unexpired Leases and of Proposed Cure Claims [Docket No. 477] (the “Third Supplemental Assumption Notice” and, together with the Assumption Notice, the Supplemental Assumption Notice and the Second Supplemental Assumption Notice, the “Assumption Notices”);

hh. filed, on November 7, 2016, the Affidavit of Service of the Third Supplemental Assumption Notice [Docket No. 479] (together with the Confirmation Hearing Notice Affidavit, the First Publication Affidavit, the Rescheduled Confirmation Hearing Notice Affidavit and the Second Publication Affidavit, the Assumption Notice Affidavit, the Supplemental Assumption Notice Affidavit, the Second Supplemental Assumption Notice Affidavit and the Plan Affidavit, the “Affidavits”); and

ii. operated their businesses and managed their properties during the Chapter 11 Cases as debtors in possession pursuant to Bankruptcy Code sections 1107(a) and 1108.

The Court having:

a. entered, on June 15, 2016, the Scheduling and Solicitation Procedures Order [Docket No. 101], by which the Court also approved (1) the procedures used by the Debtors for soliciting and tabulating votes on the Initial Plan, and (2) the ballots.

b. entered, on June 29, 2016, the Amended Scheduling Order [Docket No. 144], by which the Court amended certain deadlines in connection with the Confirmation Hearing and voting on the Initial Plan;

c. set September 22, 2016 at 10:00 A.M. (prevailing Eastern Time), as the date and time for the Confirmation Hearing, pursuant to Bankruptcy Rules 3017 and 3018 and Bankruptcy Code sections 1126, 1128, and 1129, as set forth in the Amended Scheduling Order;

d. reviewed the Plan, the Disclosure Statement, the Plan Supplement, the Assumption Notices, the Confirmation Brief, the Declarations, the Stipulated Facts, the Post-Trial Brief, the Voting Reports, the Confirmation Hearing Notice,

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the Rescheduled Confirmation Hearing Notice, the Second Rescheduled Confirmation Hearing Notice, the Affidavits, and all filed pleadings, exhibits, statements, and comments regarding approval of the Disclosure Statement and Confirmation, including all objections, statements, and reservations of rights;

e. held the Confirmation Hearing;

f. heard the statements and arguments made by counsel in respect of approval of the Disclosure Statement and Confirmation;

g. considered all oral representations, testimony, documents, filings, and other evidence regarding approval of the Disclosure Statement and Confirmation;

h. taken judicial notice of all pleadings and other documents filed, all orders entered, and all evidence and arguments presented in the Chapter 11 Cases; and

i. entered its Opinion on Confirmation [Docket No. 465] (the “Opinion”).

NOW, THEREFORE, it appearing to the Court that notice of the Confirmation Hearing, the Plan and the opportunity for any party in interest to object to approval of the Disclosure Statement and Confirmation have been adequate and appropriate as to all parties affected or to be affected by the Plan and the transactions contemplated thereby and that any party in interest so affected has had the opportunity to object to Confirmation, and the record of the Chapter 11 Cases and the legal and factual bases set forth in the documents filed in support of approval of the Disclosure Statement and Confirmation and other evidence presented at the Confirmation Hearing establish just cause for the relief granted herein; and after due deliberation thereon and good cause appearing therefor, and the Court having entered the Opinion ruling that the Plan satisfies the requirements for Confirmation, the Court makes and issues the findings of fact and conclusions of law set forth in the Opinion and herein, and orders:

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FINDINGS OF FACT AND CONCLUSIONS OF LAW

IT IS DETERMINED, FOUND, ADJUDGED, DECREED, AND ORDERED THAT:

A. Findings and Conclusions.

1. The findings and conclusions set forth herein, in the record of the Confirmation Hearing and in the Opinion constitute the Court’s findings of fact and conclusions of law under Rule 52 of the Federal Rules of Civil Procedure, as made applicable herein by Bankruptcy Rules 7052 and 9014. For the avoidance of doubt, the findings of fact and conclusions of law contained in the Opinion are incorporated herein in their entirety by reference. To the extent any of the following conclusions of law constitute findings of fact, or vice versa, they are adopted as such.

B. Jurisdiction, Venue, and Core Proceeding.

2. The Court has jurisdiction over the Chapter 11 Cases pursuant to sections 157 and 1334 of title 28 of the United States Code and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated February 29, 2012. The Court has exclusive jurisdiction to determine whether the Disclosure Statement and the Plan comply with the applicable provisions of the Bankruptcy Code and should be approved and confirmed, respectively. Venue is proper in this district pursuant to sections 1408 and 1409 of title 28 of the United States Code. Consideration of approval of the Disclosure Statement, including associated Solicitation Procedures (as defined below), and Confirmation of the Plan are core proceedings within the meaning of section 157(b)(2) of title 28 of the United States Code.

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C. Eligibility for Relief.

3. The Debtors have been and remain entities eligible for relief under Bankruptcy Code section 109 and the Debtors are proper proponents of the Plan under Bankruptcy Code section 1121(a).

D. Commencement and Joint Administration of the Chapter 11 Cases.

4. On the Petition Date, each of the Debtors commenced a voluntary case under chapter 11 of the Bankruptcy Code. In accordance with the Order Directing Joint Administration of the Debtors’ Chapter 11 Cases [Docket No. 64], the Chapter 11 Cases have been consolidated for procedural purposes only and are being jointly administered pursuant to Bankruptcy Rule 1015. Since the Petition Date, the Debtors have operated their businesses and managed their properties as debtors in possession pursuant to Bankruptcy Code sections 1107(a) and 1108. No trustee or examiner has been appointed in the Chapter 11 Cases. On June 20, 2016, the United States Trustee for Region 3 (the “U.S. Trustee”) appointed the official committee of equity security holders (the “Equity Committee”) pursuant to Bankruptcy Code section 1102 [Docket No. 109]. No request for appointment of a trustee or examiner has been made in the Chapter 11 Cases.

E. Judicial Notice.

5. The Court takes judicial notice of (and deems admitted into evidence for purposes of Confirmation) the docket of the Chapter 11 Cases maintained by the Clerk of the Court, including all pleadings and other documents filed, all orders entered, and all evidence and arguments made, proffered, adduced, or admitted at the hearings held before the Court during the pendency of the Chapter 11 Cases.

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F. Objections.

6. The following objections to the Initial Plan, the First Modified Plan, the Plan or the Disclosure Statement were filed (i) the objection of the Equity Committee, dated July 27, 2016 [Docket No. 251], (ii) the objection of the U.S. Trustee, dated July 27, 2016 [Docket No. 246], (iii) the objection of Axon Pressure Products, Inc. (f/k/a Church Energy Services, Ltd.), Axon EP, Inc. and Axon Energy Products AS, dated July 27, 2016 [Docket No. 245], (iv) the objection of the Securities and Exchange Commission, dated July 28, 2016 [Docket No. 259], (v) the objection of the United States, on behalf of the Internal Revenue Service, dated July 28, 2016 [Docket No. 260], (vi) the objection of the United States, on behalf of the Department of Health and Human Services and the Coast Guard, an agency of the Department of Homeland Security, dated July 29, 2016 [Docket No. 266], (vii) the objection of Arena Offshore, LP, dated July 27, 2016 [Docket No. 248], (viii) the objection of Cypress-Fairbanks Independent School District, Fort Bend County and Harris County, dated July 27, 2016 [Docket No. 244] and (ix) the objection of the Fort Bend Independent School District, dated July 27, 2016 [Docket No. 247]. All parties have had a full and fair opportunity to litigate all issues raised, or which might have been raised, by solicitation or confirmation of the Plan. Any resolutions of objections explained on the record at the Confirmation Hearing are incorporated herein by reference. All unresolved objections, statements, and reservations of rights, if any, related to the Disclosure Statement, the Initial Plan, the First Modified Plan, the Plan or Confirmation are OVERRULED on the merits, in all respects, with prejudice for the reasons set forth in the Opinion and this Confirmation Order. All withdrawn objections, if any, are deemed withdrawn with prejudice.

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G. Burden of Proof—Confirmation of the Plan.

7. The Debtors, as proponents of the Plan, have met their burden of proving all applicable elements of Bankruptcy Code sections 1129(a) and 1129(b) by a preponderance of the evidence, which is the applicable evidentiary standard for Confirmation, establishing the predicate for the findings set forth herein.

H. Notice.

8. As evidenced by the Affidavits, due, adequate, and sufficient notice of the Disclosure Statement, the Initial Plan, the First Modified Plan, the Plan, and the Confirmation Hearing, together with all deadlines for voting to accept or reject the Initial Plan as well as objecting to the Disclosure Statement, the Initial Plan, the First Modified Plan, the Plan, the proposed rejection of Executory Contracts and Unexpired Leases, and the proposed assumption of Executory Contracts or Unexpired Leases and the associated proposed Cure Claims, has been provided to: (a) the Office of the United States Trustee for the District of Delaware; (b) the holders of the 35 largest unsecured claims against the Debtors (on a consolidated basis); (c) Kirkland & Ellis LLP, as lead counsel, and Klehr Harrison Harvey Branzburg LLP, as Delaware counsel, to the Ad Hoc Group; (d) King & Spalding LLP, as counsel to the First Lien Agent; (e) White & Case LLP, as counsel to Luminus Management LLC and Soros Fund Management LLC (and, from and after June 10, 2016, co-lead counsel to the Ad Hoc Group); (f) counsel to the Equity Committee; (g) the United States Environmental Protection Agency; (h) the United States Attorney’s Office for the District of Delaware; (i) the Internal Revenue Service; (j) the office of the attorneys general for the states in which the Debtors operate; (k) the Securities and Exchange Commission; and (l) any party that has requested notice pursuant to Bankruptcy Rule 2002 (the parties identified in clauses (a) through (l), collectively, the “Core Notice Parties”). The Rescheduled Confirmation Hearing Notice was mailed to all known holders of Claims and Equity Interests as of the Petition Date and was published in The Wall Street Journal (National Edition) on July 6, 2016 in compliance with Bankruptcy Rule 2002(l). In addition, the Second Rescheduled Confirmation Hearing Notice was mailed to the Core Notice Parties on August 5, 2016. Such notice was adequate and sufficient pursuant to Bankruptcy Code section 1128, Bankruptcy Rules 2002 and 3020, and other applicable law and rules, and no other or further notice is or shall be required.

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I. Disclosure Statement.

9. The Disclosure Statement contains (a) sufficient information of a kind necessary to satisfy the disclosure requirements of all applicable nonbankruptcy laws, rules, and regulations, including the Securities Act, (b) “adequate information” (as such term is defined in Bankruptcy Code section 1125(a) and used in Bankruptcy Code section 1126(b)(2)) with respect to the Debtors, the Plan, and the transactions contemplated therein, (c) specific descriptions of releases and injunctions related thereto in accordance with Bankruptcy Rule 3016(c), and (d) is approved in all respects. The filing of the Disclosure Statement with the Clerk of the Court satisfied Bankruptcy Rule 3016(b).

J. Ballots.

10. The Classes of Claims and Equity Interests entitled under the Plan to vote to accept or reject the Plan (the “Voting Classes”) is set forth below:

Class	Designation
3	First Lien Claims
7	HERO Common Stock

11. As set forth and approved in the Scheduling and Solicitation Procedures Order, the ballots the Debtors used to solicit votes to accept or reject the Initial Plan from holders in the Voting Class adequately addressed the particular needs of the Chapter 11 Cases and were appropriate for holders in the Voting Class to vote to accept or reject the Initial Plan. No other further ballots were required to solicit votes to accept or reject the Initial Plan, the First Modified Plan or the Plan.

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K. Solicitation.

12. As described in the Voting Reports and the Opinion, the solicitation of votes on the Initial Plan, the First Modified Plan, and the Plan complied with (i) the solicitation procedures set forth in the Scheduling and Solicitation Procedures Motion and approved in the Scheduling and Solicitation Procedures Order (the “Solicitation Procedures”), and (ii) the provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any other applicable rules, laws, and regulations, including the registration requirements under the Securities Act and was appropriate and satisfactory based upon the circumstances of the Chapter 11 Cases, as applicable.

13. As described in the Voting Reports, the Declarations and the Affidavits, as applicable, prior to the Petition Date, the Initial Plan, the Disclosure Statement, and the ballots (collectively, the “Solicitation Packages”), and, following the Petition Date, the First Modified Plan, the Plan, the Confirmation Hearing Notice and the Rescheduled Hearing Notice, were transmitted and served in compliance with the Bankruptcy Code, including sections 1125 and 1126 thereof, the Bankruptcy Rules, including Bankruptcy Rules 3017 and 3018, the Local Rules, the Scheduling and Solicitation Procedures Order, the Amended Scheduling Order and any applicable nonbankruptcy law. Transmission and service of the Solicitation Packages, the First Modified Plan, the Plan, the Confirmation Hearing Notice, and the Rescheduled Hearing Notice were timely, adequate, and sufficient. No further notice is or was required.

14. As set forth in the Voting Reports, the Solicitation Packages were distributed to holders in the Voting Classes that held a Claim or Equity Interests as of May 23, 2016 (the date specified in such documents for the purpose of the solicitation). The establishment and notice of the Voting Record Date were reasonable and sufficient.

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15. The period during which the Debtors solicited acceptances or rejections to the Initial Plan was a reasonable and sufficient period of time for holders in the Voting Classes to make an informed decision to accept or reject the Initial Plan.

16. Under Bankruptcy Code section 1126(f), the Debtors were not required to solicit votes from the holders of Claims in the Unimpaired Classes (defined below), each of which is conclusively presumed to have accepted the Plan. Also, the Debtors were not required to solicit votes from the holders of Equity Interests in Class 8 (Other Equity Interests), who are deemed to have rejected the Plan (the “Deemed Rejecting Class”).

L. Voting.

17. As evidenced by the Voting Reports, votes to accept or reject the Plan have been solicited and tabulated fairly, in good faith, and in compliance with the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the Disclosure Statement, and any applicable non-bankruptcy law, rule, or regulation.

M. Plan Supplement.

18. The Plan Supplement complies with the Bankruptcy Code and the terms of the Plan, and the filing and notice of such documents are good and proper in accordance with the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules, and no other or further notice is required. Through the Assumption Notices, the Schedule of Assumed Executory Contracts and Unexpired Leases was served on the applicable contract counterparties. All documents included in the Plan Supplement are integral to, part of, and incorporated by reference into the Plan. Subject to the terms of the Plan, and only consistent therewith, the Debtors reserve the right to alter, amend, update, or modify the Plan Supplement as well as the documents set forth therein (including the Schedule of Assumed Executory Contracts and Unexpired Leases) before the Effective Date and any such alterations, amendments, updates or modifications shall be deemed

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incorporated into the Plan. The Debtors timely filed and served the Plan Supplement on the Core Notice Parties and served the Schedule of Assumed Executory Contracts and Unexpired Leases (through the Assumption Notices) on the relevant contract counterparties, providing them with due, adequate and sufficient notice of—and ample time to review—the Plan Supplement prior to the Confirmation Hearing.

N. Notice of Plan Modifications.

19. Adequate and sufficient notice of the modifications to the Initial Plan and the First Modified Plan has been given, and no other or further notice, or resolicitation of votes on the Initial Plan or the First Modified Plan with respect thereto, is or shall be required. The Plan satisfied Bankruptcy Code section 1127 and does not require any additional postpetition disclosure or solicitation.

O. Compliance with Bankruptcy Code Requirements—Bankruptcy Code Section 1129(a)(1).

20. The Plan complies with all applicable provisions of the Bankruptcy Code as required by Bankruptcy Code section
1129(a)(1). In addition, the Plan is dated and identifies the Entities submitting it, thereby satisfying Bankruptcy Rule 3016(a).

(i) Proper Classification— Bankruptcy Code Sections 1122 and 1123(a)(1).

21. The Plan satisfies the requirements of Bankruptcy Code sections 1122(a) and 1123(a)(1). Article III of the Plan provides for the separate classification of Claims and Equity Interests into 8 Classes. Valid business, factual, and legal reasons exist for the separate classification of such Classes of Claims and Equity Interests. The classifications reflect no improper purpose and do not unfairly discriminate between, or among, holders of Claims or Equity Interests. The classification of Claims and Equity Interests in the Plan is reasonable and necessary to implement the Plan. Each Class of Claims and Equity Interests contains only Claims or Equity Interests that are substantially similar to the other Claims or Equity Interests within that Class.

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(ii) Specified Unimpaired Classes—Bankruptcy Code Section 1123(a)(2).

22. The Plan satisfies the requirements of Bankruptcy Code section 1123(a)(2). Article III of the Plan specifies that Claims and Equity Interests, as applicable, in the following Classes (the “Unimpaired Classes”) are Unimpaired under the Plan within the meaning of Bankruptcy Code section 1124:

Class	Designation
1	Priority Non-Tax Claims
2	Other Secured Claims
4	General Unsecured Claims
5	Intercompany Claims

23. Additionally, Article II of the Plan specifies that Allowed Administrative Claims, Fee Claims, Priority Tax Claims and fees due and owing to the U.S. Trustee will be paid in full in accordance with the terms of the Plan, although these Claims are not classified under the Plan.

(iii) Specified Treatment of Impaired Classes—Bankruptcy Code Section 1123(a)(3).

24. The Plan satisfies the requirements of Bankruptcy Code section 1123(a)(3). Article III of the Plan specifies that Claims and Equity Interests, as applicable, in the following Classes (the “Impaired Classes”) are Impaired under the Plan within the meaning of Bankruptcy Code section 1124, and describes the treatment of such Classes:

Class	Designation
3	First Lien Claims
6	Intercompany Interests
7	HERO Common Stock
8	Other Equity Interests

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(iv) No Discrimination—Bankruptcy Code Section 1123(a)(4).

25. The Plan satisfies the requirements of Bankruptcy Code section 1123(a)(4). The Plan provides for the same treatment by the Debtors for each Claim or Equity Interest in each respective Class unless the holder of a particular Claim or Equity Interest has agreed to a less favorable treatment of such Claim or Equity Interest, as the case may be.

(v) Adequate Means for Plan Implementation—Bankruptcy Code Section 1123(a)(5).

26. The Plan satisfies the requirements of Bankruptcy Code section 1123(a)(5). The provisions in Article IV and elsewhere in the Plan, and in the exhibits and attachments to the Plan and the Disclosure Statement, provide, in detail, adequate and proper means for the Plan’s implementation, including, among other things, regarding: (a) the establishment and governance of the Wind Down Entity; (b) the vesting of the Post-Effective Date Assets in the Wind Down Entity; (c) the funding of the Wind Down Entity; (d) the establishment of the Disputed Claims Reserve and the Allowed Claims Reserve; (e) the preservation of Causes of Action not expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or a Final Order; (f) the cancellation of certain indebtedness, agreements, and existing securities; (g) the substantive consolidation of the Debtors’ Estates for Plan purposes only; and (h) the indemnification of directors, officers, and employees.

(vi) Voting Power of Equity Securities—Bankruptcy Code Section 1123(a)(6).

27. The Plan satisfies the requirements of Bankruptcy Code section 1123(a)(6). The Plan does not contemplate the offer or issuance of any interests or other instruments that would constitute “securities” under applicable U.S. securities law, and the charter of each Debtor will, after the Effective Date, no longer be valid and existing.

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(vii) Directors and Officers—Bankruptcy Code Section 1123(a)(7).

28. The Plan satisfies the requirements of Bankruptcy Code section 1123(a)(7). Article V.B.5 of the Plan, the Restructuring Support Agreement and the Wind Down Entity Agreement contain provisions regarding the manner of selection of the members of the Wind Down Entity Board. In addition, the members of the Wind Down Entity Board and the identity of the Wind Down Representative are identified in Exhibits B and C, respectively, to the Plan Supplement, which may be modified and/or supplemented prior to the Effective Date. The selection of the Wind Down Entity Board and the Wind Down Representative is consistent with the interests of all holders of Claims and Equity Interests and public policy.

(viii) Impairment/Unimpairment of Classes—Bankruptcy Code Section 1123(b)(1).

29. The Plan is consistent with Bankruptcy Code section 1123(b)(1). Article III of the Plan impairs or leaves Unimpaired each Class of Claims and Equity Interests.

(ix) Assumption—Bankruptcy Code Section 1123(b)(2).

30. The Plan is consistent with Bankruptcy Code section 1123(b)(2). Article VIII of the Plan provides for the assumption, assumption and assignment or rejection of the Debtors’ Executory Contracts and Unexpired Leases not previously assumed, assumed and assigned, or rejected during the Chapter 11 Cases pursuant to Bankruptcy Code section 365.

(x) Settlement, Releases, Exculpation, Injunction, and Preservation of Claims and Causes of Action—Bankruptcy Code Section 1123(b)(3).

31. The Plan is consistent with Bankruptcy Code section 1123(b)(3). In accordance with Bankruptcy Code section 363 and Bankruptcy Rule 9019, and in consideration of the distributions, settlements, and other benefits provided under the Plan and for the reasons set forth in the Opinion, the provisions of the Plan constitute a good-faith compromise of all Claims, Equity Interests, and controversies relating to the contractual, legal, and subordination rights that

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a holder of a Claim or Equity Interest may have with respect to any Allowed Claim or Equity Interest, or any distribution to be made on account of such Allowed Claim or Equity Interest. The compromise and settlement of such Claims and Equity Interests embodied in the Plan is in the best interests of the Debtors, the Estates, and all holders of Claims and Equity Interests, and are fair, equitable, and reasonable.

32. Article V.D of the Plan describes certain releases granted by the Debtors (the “Debtor Releases”). As set forth in the Opinion, the Debtors have satisfied the business judgment standard with respect to the propriety of the Debtor Releases. Such releases constitute a necessary and integral element of the Plan, and are fair, reasonable, and in the best interests of the Debtors, the Estates, and holders of Claims and Equity Interests. Also, the Debtor Releases are: (a) in exchange for the good and valuable consideration provided by the Released Parties; (b) a good-faith settlement and compromise of the Claims released by Article V.D of the Plan; (c) given, and made, after due notice and opportunity for hearing; and (d) a bar to any of the Debtors, the Estates or any person or entity claiming through, on behalf of, or for the benefit of the Debtors or the Estates, asserting any Claim or Cause of Action released by Article V.D of the Plan.

33. Article V.E of the Plan describes certain releases granted by the Releasing Parties (the “Third-Party Release”) of the Released Parties which include, among others, the Debtors, the Wind Down Entity, the Non-Debtor Subsidiaries, the Ad Hoc Group, the Ad Hoc Group Members, the Consenting First Lien Lenders, each of the Consenting First Lien Lenders, the First Lien Agent, the First Lien Lenders, each holder of HERO Common Stock that is also a Consenting First Lien Lender and the parties related to all of the foregoing as more fully set forth in Art. I.A.106. As set forth in the Opinion, the Third-Party Release is consensual with respect

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to the Releasing Parties. In addition, the Third-Party Release is a necessary and integral element of the Plan, and is fair, equitable, reasonable, and in the best interests of the Debtors, the Estates, and all holders of Claims and Equity Interests. Also, the Third-Party Release is: (a) in exchange for the good and valuable consideration provided by the Released Parties; (b) a good faith settlement and compromise of the claims released by the Third-Party Release; (c) in the best interests of the Debtors and all holders of Claims and Equity Interests; (d) fair, equitable, and reasonable; (e) given and made after due notice and opportunity for hearing; and (f) a bar to any of the Releasing Parties, or any person or entity claiming through, on behalf of, or for the benefit of the Releasing Parties, asserting any claim or Cause of Action released pursuant to the Third-Party Release.

34. The exculpation, described in Article V.F of the Plan (the “Exculpation”), is appropriate under applicable law because it was proposed in good faith, was formulated following extensive good-faith, arm’s-length negotiations with key constituents, and is appropriately limited in scope.

35. The injunction provision set forth in Article V.G of the Plan (the “Injunction”) is necessary to implement, preserve, and enforce the Debtor Releases, the Third-Party Release, and the Exculpation, and is narrowly tailored to achieve this purpose.

36. Article IV.C of the Plan appropriately provides that the Debtors will convey to the Wind Down Entity all rights to commence, prosecute and settle, as appropriate, any and all Causes of Action, except for Causes of Action that have been expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or a Final Order, in accordance with Bankruptcy Code section 1123(b), whether arising before or after the Petition Date. The provisions regarding the preservation of Causes of Action in the Plan are appropriate, fair, equitable, and reasonable, and are in the best interests of the Debtors, the Estates, and holders of Claims and Equity Interests.

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37. The full release and discharge of all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates described in Article V.C of the Plan (the “Lien Release”), except as otherwise expressly provided in the Plan or this Confirmation Order, is necessary to implement the Plan. The provisions of the Lien Release are appropriate, fair, equitable, and reasonable and are in the best interests of the Debtors, the Estates, and holders of Claims and Equity Interests.

(xi) Additional Plan Provisions—Bankruptcy Code Section 1123(b)(6).

38. The other discretionary provisions of the Plan are appropriate and consistent with the applicable provisions of the Bankruptcy Code, thereby satisfying Bankruptcy Code section 1123(b)(6).

(xii) Cure of Defaults—Bankruptcy Code Section 1123(d).

39. In accordance with Bankruptcy Code section 1123(d), Article VIII.B of the Plan provides for the satisfaction of Cure Claims associated with each Executory Contract or Unexpired Lease to be assumed or assumed and assigned pursuant to the Plan in accordance with Bankruptcy Code section 365(b)(1). All Cure Claims will be determined in accordance with the underlying agreements and applicable bankruptcy or nonbankruptcy law.

P. Debtor Compliance with the Bankruptcy Code—Bankruptcy Code Section 1129(a)(2).

40. The Debtors have complied with the applicable provisions of the Bankruptcy Code and, thus, satisfied the requirements of Bankruptcy Code section 1129(a)(2). Specifically, each Debtor:

a. is an eligible debtor under Bankruptcy Code section 109, and a proper proponent of the Plan under Bankruptcy Code section 1121(a);

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b. has complied with applicable provisions of the Bankruptcy Code, except as otherwise provided or permitted by orders of the Court; and

c. complied with the applicable provisions of the Bankruptcy Code, including Bankruptcy Code sections 1125 and 1126, the Bankruptcy Rules, the Local Rules, any applicable nonbankruptcy law, rule and regulation, the Scheduling and Solicitation Procedures Order, the Amended Scheduling Order, and all other applicable law, in transmitting the Solicitation Packages, and related documents and notices, and in soliciting and tabulating the votes on the Initial Plan.

Q. Plan Proposed in Good Faith—Bankruptcy Code Section 1129(a)(3).

41. As set forth in the Opinion, the Plan satisfies the requirements of Bankruptcy Code section 1129(a)(3). The Debtors have proposed the Plan in good faith and not by any means forbidden by law. In so determining based on the evidence presented to this Court, including the Declarations, the Plan, the Disclosure Statement and the other motions and pleadings filed and the testimony elicited, the Court has examined the totality of the circumstances surrounding the filing of the Chapter 11 Cases, the Plan itself (including the Plan Supplement), the Restructuring Support Agreement, the process leading to Confirmation, and the transactions to be implemented pursuant to the Plan. The Chapter 11 Cases were filed, and the Plan was proposed, with the legitimate purpose of allowing the Debtors to conduct an orderly wind-down of their operations and to monetize their remaining assets and those of the Non-Debtor Subsidiaries in a controlled manner in order to maximize the value of the Debtors’ Estates and the assets of the Non-Debtor Subsidiaries for the benefit of all of the Debtors’ stakeholders. The Plan is the product of extensive arm’s-length negotiations, in good faith, among the Debtors, the Ad Hoc Group, the Consenting First Lien Lenders and other parties in interest, and is in the best interests of the Debtors, the Estates and holders of Claims and Equity Interests.

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R. Payment for Services or Costs and Expenses—Bankruptcy Code Section 1129(a)(4).

42. The procedures set forth in the Plan for the Court’s review and ultimate determination of the fees and expenses to be paid by the Debtors in connection with the Chapter 11 Cases, including, but not limited to, Accrued Professional Compensation and, as per the terms of the Cash Collateral Order, all of the fees and expenses of the Ad Hoc Group’s, the First Lien Agent’s, and Luminus Management LLC and Soros Fund Management LLC’s professionals, or in connection with the Plan and incident to the Chapter 11 Cases, satisfy the objectives of, and are in compliance with, Bankruptcy Code section 1129(a)(4).

S. Directors, Officers, and Insiders—Bankruptcy Code Section 1129(a)(5).

43. The Debtors have satisfied the requirements of Bankruptcy Code section 1129(a)(5). Article IV.B of the Plan, in conjunction with Exhibits B and C to the Plan Supplement, disclose the identity and affiliations of the individuals proposed to serve as members of the Wind Down Entity Board, and the identity and nature of any compensation for the Wind Down Entity Representative. The proposed Wind Down Entity Representative is qualified, and the appointment to such position is consistent with the interests of the holders of Claims and Equity Interests and with public policy.

T. No Rate Changes—Bankruptcy Code Section 1129(a)(6).

44. Bankruptcy Code section 1129(a)(6) is not applicable to the Chapter 11 Cases. The Plan proposes no rate change subject to the jurisdiction of any governmental regulatory commission.

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U. Best Interest of Creditors—Bankruptcy Code Section 1129(a)(7).

45. As set forth in the Opinion, the Plan satisfies the requirements of Bankruptcy Code section 1129(a)(7). The Liquidation Analysis attached to the Disclosure Statement as Exhibit D and the other evidence related thereto in support of the Plan that was proffered or adduced in the Declarations or at, prior to, or in connection with the Confirmation Hearing: (a) are reasonable, persuasive, credible, and accurate as of the dates such analysis or evidence was prepared, presented, or proffered; (b) utilize reasonable and appropriate methodologies and assumptions; (c) have not been controverted by other evidence; and (d) establish that each holder of an Allowed Claim and Equity Interest in an Impaired Class (i) has accepted the Plan or (ii) will receive or retain at least as much under the Plan on account of such Claim or Equity Interest, as of the Effective Date, as such holder would receive if the Debtors were liquidated, on the Effective Date, under chapter 7 of the Bankruptcy Code.

V. Acceptance by Certain Classes—Bankruptcy Code Section 1129(a)(8).

46. Classes 1, 2, 4, and 5 constitute Unimpaired Classes, each of which is conclusively presumed to have accepted the Plan in accordance with Bankruptcy Code section 1126(f). One of the Voting Classes, Class 3, has voted to accept the Plan. The other Voting Class, Class 7, has voted to reject the Plan. Moreover, holders of Other Equity Interests in Class 8 were not solicited and are deemed to have rejected the Plan. Accordingly, although the Plan does not satisfy Bankruptcy Code section 1129(a)(8), based upon the record before this Court, the Plan is confirmable because it satisfies Bankruptcy Code sections 1129(a)(10) and 1129(b).

W. Treatment of Claims Entitled to Priority Under Bankruptcy Code Section 507(a)—Bankruptcy Code Section 1129(a)(9).

47. The treatment of Administrative Claims, Professional Claims, and Priority Tax Claims under Article II of the Plan, and of Priority Non-Tax Claims under Article III of the Plan, satisfies the requirements of, and complies in all respects with, Bankruptcy Code section 1129(a)(9).

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X. Acceptance by At Least One Impaired Class—Bankruptcy Code Section 1129(a)(10).

48. The Plan satisfies the requirements of Bankruptcy Code section 1129(a)(10). As evidenced by the Voting Reports, holders of Class 3 First Lien Claims voted overwhelmingly to accept the Initial Plan by more than the requisite numbers and amounts of Claims, determined without including any acceptance of the Initial Plan by any insider (as that term is defined in Bankruptcy Code section 101(31)), specified under the Bankruptcy Code.

Y. Feasibility—Bankruptcy Code Section 1129(a)(11).

49. The Plan satisfies the requirements of Bankruptcy Code section 1129(a)(11). As noted in the Opinion, the evidence supporting Confirmation of the Plan proffered or adduced by the Debtors in the Declaration or at, prior to, or in connection with, the Confirmation Hearing: (a) is reasonable, persuasive, credible, and accurate as of the dates such analysis or evidence was prepared, presented, or proffered; (b) utilizes reasonable and appropriate methodologies and assumptions; (c) has not been controverted by other evidence; and (d) establishes that the Wind Down Entity will have sufficient funds available to meet its obligations under the Plan. The Debtors have demonstrated a reasonable assurance of the Plan’s prospects for success.

Z. Payment of Fees—Bankruptcy Code Section 1129(a)(12).

50. The Plan satisfies the requirements of Bankruptcy Code section 1129(a)(12). Article II.D of the Plan provides for the payment of all fees payable by the Debtors under 28 U.S.C. § 1930(a).

AA. Continuation of Employee Benefits—Bankruptcy Code Section 1129(a)(13).

51. The Debtors do not incur liability for retiree benefits or the payment of retiree benefits subject to Bankruptcy Code sections 1114 or 1129(a)(13). Accordingly, Bankruptcy Code section 1129(a)(13) is inapplicable to the Chapter 11 Cases.

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BB. Non-Applicability of Certain Sections—Bankruptcy Code Sections 1129(a)(14), (15), and (16).

52. Bankruptcy Code sections 1129(a)(14), 1129(a)(15), and 1129(a)(16) do not apply to the Chapter 11 Cases. The Debtors owe no domestic support obligations, are not individuals, and are not nonprofit corporations.

CC. “Cram Down” Requirements—Bankruptcy Code Section 1129(b).

53. For the reasons set forth in the Opinion, the Plan satisfies the requirements of Bankruptcy Code section 1129(b). Notwithstanding the fact that Class 7 has voted to reject the Initial Plan, and that Class 8 has been deemed to reject the Plan, the Plan may be confirmed pursuant to Bankruptcy Code section 1129(b)(l). First, all of the requirements of Bankruptcy Code section 1129(a) other than section 1129(a)(8) have been met. Second, the Plan is fair and equitable with respect to Classes 6, 7 and 8. The Plan has been proposed in good faith, is reasonable and meets the requirements that no Holder of any Claim or Equity Interest that is junior to each such Class will receive or retain any property under the Plan on account of such junior Claim or Equity Interest and no Holder of a Claim in a Class senior to such Classes is receiving more than 100% on account of its Claim. Third, the Plan is fair and equitable and does not discriminate unfairly with respect to Classes 6, 7 and 8 because similarly situated creditors and holders of Equity Interests will receive substantially similar treatment on account of their Claims and Equity Interests irrespective of Class. The Plan may therefore be confirmed despite the fact that not all Impaired Classes have voted to accept the Plan.

DD. Only One Plan—Bankruptcy Code Section 1129(c).

54. The Plan satisfies the requirements of Bankruptcy Code section 1129(c). The Plan is the only chapter 11 plan filed in each of the Chapter 11 Cases.

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EE. Principal Purpose of the Plan—Bankruptcy Code Section 1129(d).

55. The Plan satisfies the requirements of Bankruptcy Code section 1129(d). As evidenced by its terms, the principal purpose of the Plan is not the avoidance of taxes or the avoidance of the application of section 5 of the Securities Act, and there has been no filing by a governmental unit asserting any such attempted avoidance.

FF. Small Business Case—Bankruptcy Code Section 1129(e).

56. The Chapter 11 Case is not a small business case within the meaning of the Bankruptcy Code. Accordingly, Bankruptcy Code section 1129(e) is inapplicable to the Chapter 11 Case.

GG. Good Faith Solicitation—Bankruptcy Code Section 1125(e).

57. Based on the record before the Court, each of (a) the Debtors, (b) the Consenting First Lien Lenders and (c) the Professionals of the Debtors and the legal and financial advisors to the Consenting First Lien Lenders, as applicable, (i) have acted in “good faith” within the meaning of Bankruptcy Code section 1125(e) and in compliance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules and the Local Rules in connection with their respective activities relating to the solicitation of acceptances to the Plan and any applicable nonbankruptcy law and (ii) have participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and applicable nonbankruptcy law in the offer, issuance, sale, or purchase of a security, offered or sold under the Plan, and are entitled to the protections afforded by Bankruptcy Code section 1125(e).

HH. Satisfaction of Confirmation Requirements

58. Based on the foregoing, the Plan satisfies the requirements for Confirmation set forth in Bankruptcy Code section 1129.

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II. Likelihood of Satisfaction of Conditions Precedent to the Effective Date.

59. Each of the conditions precedent to the Effective Date, as set forth in Article IX.A of the Plan, has been or is reasonably likely to be satisfied or waived in accordance with Article IX.B of the Plan.

JJ. Implementation of Plan.

60. All documents and agreements necessary to implement the Plan, including those contained in the Plan Supplement, and all other relevant and necessary documents and agreements, and any actions required of the Debtors or the Wind Down Entity pursuant to the Plan, are essential elements of the Plan and consummation of each such agreement or the taking of any such action is in the best interests of the Debtors, the Estates, and holders of Claims and Equity Interests. The Debtors have exercised reasonable business judgment in determining to enter into the contemplated agreements, and the agreements have been negotiated in good faith, at arm’s-length, are fair and reasonable, and shall, upon completion of such documentation and execution, be valid, binding, and enforceable agreements and not be in conflict with any federal or state law.

KK. Executory Contracts and Unexpired Leases.

61. Article VIII of the Plan provides, pursuant to Bankruptcy Code sections 365 and 1123(b)(2), for the assumption, assumption and assignment, or rejection of certain Executory Contracts and Unexpired Leases. The Debtors’ determination regarding the assumption, assumption and assignment or rejection of Executory Contracts and Unexpired Leases is based on, and within the sound business judgment of, the Debtors, is necessary to the implementation of the Plan, and is in the best interests of the Debtors, the Estates, holders of Claims, and other parties in interest in the Chapter 11 Case. The Debtors have provided notice that they are rejecting all Executory Contracts and Unexpired Leases of the Debtors that are not listed in Schedule of Assumed Executory Contracts and Unexpired Leases, as supplemented from time to time, and that no cure amounts are owed with respect to those Executory Contracts and Unexpired Leases that are being assumed.

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LL. Global Settlement Under the Plan.

62. For the reasons set forth in the Opinion, the provisions of the Plan constitute a good-faith compromise and settlement pursuant to Bankruptcy Rule 9019 and Bankruptcy Code section 1123, among the Debtors, the Non-Debtor Subsidiaries and the holders of First Lien Claims of any and all disputes among the parties or any Causes of Action of the Debtors, the Estates or the Non-Debtor Subsidiaries against the holders of First Lien Claims and the consideration therefor shall consist of the receipt by the holders of the First Lien Claims of the releases contemplated by Article V of the Plan in exchange for their agreement to compromise their First Lien Claims as set forth in the Plan (including through the Mediation Settlement, their agreement to the Rejection Shareholder Cash Distribution and the reduction by the First Lien Claim Reduction Amount of Cash to be distribution on account of Allowed First Lien Claims), and, among other things, their enabling holders of Allowed General Unsecured Claims to be paid in full under the Plan, holders of claims against the Non-Debtor Subsidiaries to be paid in full, and holders of HERO Common Stock to receive their Pro Rata share of the Rejection Shareholder Cash Distribution and 100% of the Rejection Wind Down Entity Interests notwithstanding the fact that (x) the Rejection Shareholder Cash Distribution will be distributed to holders of HERO Common Stock prior to any distribution on the Rejection Lender Wind Down Claim and (y) holders of First Lien Claims will not be paid in full as a result of their agreement to reduce the amount of the Rejection Lender Wind Down Claim by the First Lien Claim Reduction Amount, allowing the Debtors to use the First Lien Lenders’ cash collateral, and allowing the Debtors and the Non-Debtors Subsidiaries to continue operating for so long as

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is necessary to engage in a controlled and unrushed monetization of their assets, ensuring maximum asset recoveries. For the avoidance of doubt, upon Consummation, the Plan shall also constitute a good faith compromise and settlement of the objections to the First Lien Claims set forth in the First Lien Claim Objection and any and all Claims and Causes of Actions addressed in the Standing Motion.

63. For the reasons set forth in the Opinion, the entry of this Confirmation Order constitutes the Court’s approval of each of the compromises and settlements embodied in the Plan (including the Mediation Settlement), and the Court’s findings shall constitute its determination that such compromises and settlements are in the best interests of the Debtors, the Estates, creditors, holders of HERO Common Stock and other parties in interest, and are fair, equitable, and within the range of reasonableness. See Myers v. Martin (In re Martin), 91 F.3d 389, 393 (3d Cir. 1996). In the event that, for any reason, the Effective Date does not occur, the Debtors, the Non-Debtor Subsidiaries and the holders of First Lien Claims reserve all of their respective rights with respect to any and all disputes that would have been resolved and settled under the Plan (including in connection with the Mediation Settlement) had the Effective Date occurred.

MM. Releases, Exculpations and Injunctions of Released Parties, Exculpated Parties and Solicitation Parties.

64. For the reasons set forth in the Opinion, the Debtor Releases, the Third-Party Release, the Exculpation, and the Injunction contained in the Plan (collectively, the “Releases”) constitute good-faith compromises and settlements of the matters covered thereby. Such compromises and settlements are made in exchange for good and valuable consideration and (i) are in the best interests of the Debtors, their Estates and Holders of Claims and Equity Interests; (ii) are fair, equitable, and reasonable; and (iii) are integral elements of the restructuring and

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resolution of the Chapter 11 Cases in accordance with the Plan and the Restructuring Support Agreement. Each provision of the Releases (i) is within the jurisdiction of the Court under 28 U.S.C. § 1334; (ii) is an essential means of implementing the Plan pursuant to Bankruptcy Code sections 1123(a)(5) and (b); (iii) is an integral element of the settlements and transactions incorporated into the Plan; (iv) confers a material benefit on, and is in the best interests of, the Debtors, their Estates, and Holders of Claims and Equity Interests; (v) is important to the overall objectives of the Plan to finally resolve all Claims and Equity Interests among or against the parties in interest in the Chapter 11 Cases; and (vi) is consistent with Bankruptcy Code sections 105, 1123 and 1129 and all other applicable law.

65. In addition, the Exculpation set forth in Article V.F of the Plan is essential to the Plan. The record in the Chapter 11 Cases fully supports the Exculpation set forth in Article V.F of the Plan, which is appropriately tailored to protect the Exculpated Parties. In light of among other things, the critical nature of the exculpation to the Plan and the substantial contribution of the Exculpated Parties to the Chapter 11 Cases, the Exculpation contained in Article V.F is appropriate.

66. Accordingly, in light of all of the circumstances and for the reasons set forth in the Opinion, the Releases satisfy the applicable standards contained in In re Washington Mutual, Inc., 442 B.R. 314, 346 (Bankr. D. Del. 2011), In re Zenith Electronics Corp., 241 B.R. 92, 110 (Bankr. D. Del. 1999) and In re Exide Technologies, 303 B.R. 48, 71-72 (Bankr. D. Del. 2003).

NN. Disclosure of Facts.

67. The Debtors have disclosed all material facts regarding the Disclosure Statement and the Plan, including (i) the Recovery Analysis, including updates thereto, (ii) the Wind Down Entity Agreement, (iii) the identity of the members of the Wind Down Entity Board and the Wind Down Entity Representative, (iv) the funding of the Wind Down Entity, (v) the establishment of the Disputed Claims Reserve, the Allowed Claims Reserve and the Accrued Professional Compensation Account and (vi) the Liquidation Analysis.

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OO. Good Faith.

68. The Debtors, the Released Parties, and the Releasing Parties have been and will be acting in good faith if they: (a) consummate the Plan and the agreements, settlements, transactions, and transfers contemplated thereby; and (b) take the actions authorized and directed by this Confirmation Order to wind down the operations of the Debtors and Non-Debtor Subsidiaries, to monetize the Post-Effective Date Assets, and consummate the other transactions contemplated under the Plan.

PP. The Wind Down Entity Agreement.

69. The terms and conditions of the Wind Down Entity Agreement have been negotiated in good faith, at arm’s length, are fair and reasonable and are approved. The Wind Down Entity Agreement is an essential element of the Plan, and entry into and consummation of the transactions contemplated by the Wind Down Entity Agreement are in the best interests of the Debtors, the Estates and holders of Claims and Equity Interests, and are approved. The Debtors have exercised reasonable business judgment in determining to enter into the Wind Down Entity Agreement and have provided sufficient and adequate notice of the Wind Down Entity Agreement. The Debtors and the Wind Down Entity Representative are authorized, without further notice to, or action, order or approval of, the Court, to execute and deliver all agreements, documents, instruments and certificates relating thereto and to perform their obligations thereunder. The Wind Down Entity Agreement shall, upon execution, be valid, binding and enforceable, and shall not be in conflict with any federal or state law.

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RR. Waiver of Stay.

70. Under the circumstances, it is appropriate that the 14-day stay imposed by Bankruptcy Rules 3020(e) and 7062(a) be waived.

ORDER

NOW, THEREFORE, IT IS ORDERED, ADJUDGED, DECREED AND DETERMINED THAT:

1. Findings of Fact and Conclusions of Law. The above-referenced findings of fact and conclusions of law are hereby incorporated by reference as though fully set forth herein and constitute findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052, made applicable herein by Bankruptcy Rule 9014. To the extent that any finding of fact is determined to be a conclusion of law, it is deemed so, and vice versa.

2. Disclosure Statement. For the reasons set forth herein and in the Opinion, the Disclosure Statement (a) contains sufficient information of a kind necessary to satisfy the disclosure requirements of all applicable nonbankruptcy laws, rules and regulations, including the Securities Act, (b) contains “adequate information” (as such term is defined in Bankruptcy Code section 1125(a)(1) and used in Bankruptcy Code section 1126(b)(2)) with respect to the Debtors, the Plan and the transactions contemplated therein and (c) is approved in all respects.

3. Ballots. The ballots, which were approved in all respects pursuant to the Scheduling and Solicitation Procedures Order, are in compliance with Bankruptcy Rule 3018(c) and conform to Official Form B14.

4. Solicitation. The solicitation of votes on the Initial Plan complied with Bankruptcy Code sections 1125 and 1126, Bankruptcy Rules 3017 and 3018, all other provisions of the Bankruptcy Code, and all other applicable rules, laws, and regulations, and was appropriate and satisfactory and is approved in all respects.

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5. Notice of the Confirmation Hearing. Notice of the Confirmation Hearing was appropriate and satisfactory and is approved in all respects.

6. Modifications to the Plan. Modifications made to the Initial Plan following the solicitation of votes thereon satisfied the requirements of Bankruptcy Code section 1127 and Bankruptcy Rule 3019, and no further solicitation is required.

7. Deemed Acceptance of the Plan as Modified. In accordance with Bankruptcy Code section 1127 and Bankruptcy Rule 3019, all holders of Claims who voted to accept the Initial Plan or who are conclusively presumed to have accepted the Initial Plan are deemed to have accepted the Plan as modified. No holder of a Claim shall be permitted to change its vote as a consequence of such modifications.

8. Confirmation of the Plan. The Plan is approved in its entirety and CONFIRMED under Bankruptcy Code section 1129. The terms of the Plan, including the Plan Supplement, are incorporated by reference into and are an integral part of this Confirmation Order.

9. Objections. All objections, responses to, statements and comments, if any, in opposition to, and all reservations of rights pertaining to Confirmation or approval of the Disclosure Statement that have not been withdrawn, waived, or settled are overruled in their entirety on the merits. All withdrawn objections, if any, are deemed withdrawn with prejudice.

10. No Action Required. Under the provisions of the Delaware General Corporation Law, including section 303 thereof, the comparable provisions of the Delaware Limited Liability Company Act, other applicable non-bankruptcy law and Bankruptcy Code section 1142(b), no action of the respective directors, equity holders, managers, or members of the Debtors is required to authorize the Debtors to enter into, execute, deliver, file, adopt, amend, restate,

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consummate, or effectuate, as the case may be, the Plan, the transactions contemplated thereby, and any contract, assignment, certificate, instrument, or other document to be executed, delivered, adopted, or amended in connection with the implementation of the Plan, including, without limitation: (a) the execution of the Wind Down Entity Agreement, (b) the authorization, issuance, and distribution the Wind Down Entity Interests, (c) the authorization and issuance of the Lender Wind Down Claim and (d) the adoption, or assumption, or assumption and assignment of Executory Contracts or Unexpired Leases, as applicable.

11. Binding Effect. Upon the occurrence of the Effective Date, the terms of the Plan (including all documents and agreements executed pursuant thereto or in connection therewith, including those contained the Plan Supplement) and this Confirmation Order are immediately effective and enforceable and deemed binding on the Debtors, the Wind Down Entity, and any and all holders of Claims or Equity Interests (regardless of whether such holders of Claims or Equity Interests have, or are deemed to have, accepted the Plan), all Entities that are parties to or are subject to the settlements, compromises, releases, exculpations and injunctions described in the Plan, each Entity acquiring property under the Plan, any and all non-Debtor parties to Executory Contracts and Unexpired Leases with the Debtors, any Person making an appearance in the Chapter 11 Cases and any other party in interest in the Chapter 11 Cases. The rights, benefits and obligations of any Entity named or referred to in the Plan shall be binding on, and shall inure to the benefit of, any heir, executor, administrator, successor or assign of such Entity.

12. Substantive Consolidation for Plan Purposes Only. Entry of this Confirmation Order constitutes the approval of the deemed substantive consolidation of the Chapter 11 Cases of the Debtors for purposes of voting on, confirmation of, and distributions under the Plan, effective as of the Effective Date, pursuant to Bankruptcy Code section 105(a). For Plan

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purposes only, the Debtors shall be deemed merged into HERO, and (a) all assets and liabilities of the Debtors shall be deemed merged into HERO, (b) all guaranties of any Debtor of the payment, performance, or collection of the obligations of another Debtor shall be eliminated and cancelled, (c) any obligation of any Debtor and all guaranties thereof executed by one or more of the other Debtors shall be treated as a single obligation, and such guaranties shall be deemed a single Claim against the consolidated Debtors, (d) all joint obligations of two or more Debtors, and all multiple Claims against such Entities on account of such joint obligations shall be treated and allowed only as a single Claim against the consolidated Debtors, and (e) each Claim filed in the Chapter 11 Cases of any Debtor shall be deemed filed against the consolidated Debtors and a single obligation of the Debtors on and after the Effective Date.

13. Compromise of Controversies. In consideration for the distributions and other benefits, including releases, provided under the Plan and for the reasons set forth herein and in the Opinion, the provisions of the Plan constitute a good faith compromise and settlement of all Claims, Equity Interests, and controversies resolved under the Plan (including through the Mediation Settlement), and the entry of this Confirmation Order constitutes approval of such compromise and settlement under Bankruptcy Rule 9019. On the Effective Date, all settlements, compromises, releases (including, without limitation, the Releases), waivers, exculpations, and injunctions set forth in the Plan shall be effective and binding on all Persons. The Plan and this Confirmation Order shall have res judicata, collateral estoppel, and estoppel (judicial, equitable, or otherwise) effect with respect to all matters provided for in, or resolved pursuant to, the Plan and/or this Confirmation Order, including, without limitation, the release, injunction, exculpation, discharge, and compromise provisions contained in the Plan and/or this Confirmation Order.

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14. Approval of Consents and Authorization to Take Acts Necessary to Implement the Plan. Pursuant to the appropriate provisions of the corporate or business organizations law of the applicable state of organization of each Debtor and Bankruptcy Code section 1142, each of the Debtors is hereby authorized, without further notice to or action, order or approval of the Court or further action by the respective officers, directors, members or stockholders of the Debtors, to take such actions and to perform such acts as may be necessary, desirable or appropriate to comply with, implement or execute the Plan, the documents included in the Plan Supplement and all other documents relating to the Plan, and the obligations thereunder shall constitute legal, valid, binding and authorized obligations of each of the respective parties thereto, enforceable in accordance with their terms. On and after the Effective Date, the Wind Down Entity, the Wind Down Entity Board or the Wind Down Entity Representative, as applicable, are authorized to and may issue, deliver, execute and deliver the agreements, documents and instruments contemplated by the Plan, the documents included in the Plan Supplement and all documents, instruments and agreements related thereto in the name of and on behalf of the Wind Down Entity.

15. This Confirmation Order shall constitute all approvals and consents required, if any, by the laws, rules or regulations of any state or any other governmental authority with respect to the implementation or consummation of the Plan and any documents, instruments or agreements, and any amendment or modifications thereto, and any other acts referred to in or contemplated by the Plan, and any documents, instruments or agreements, and any amendments or modifications thereto.

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16. Establishment of the Wind Down Entity and Appointment of the Wind Down Entity Representative. The Wind Down Entity shall be established in accordance with the terms of the Plan and become effective for the benefit of the holders of the Lender Wind Down Claim and the Wind Down Entity Interests and for the purpose of, among other things, (i) monetizing the Post-Effective Date Assets and winding down the remainder of the Debtors’ businesses and operations in a controlled, efficient and value-maximizing (adjusting for risk) manner; (ii) administering the Lender Wind Down Claim, (iii) issuing the Wind Down Entity Interests in accordance with the Plan; (iv) making distributions in accordance with the Plan; (v) overseeing and administering (a) the termination of the Debtors’ qualified 401(k) retirement plans and any related trusts and the distribution of such plans’ assets to participants and for fulfilling statutory and regulatory requirements related to such plans and (b) any statutory and regulatory requirements related to any terminated Debtor employee benefit plans; and (vi) performing such other services as are contemplated by the Plan and the Wind Down Entity Agreement. TJB Management Consulting, LLC is authorized to be and hereby is appointed as the Wind Down Entity Representative. The Wind Down Entity Representative and the Wind Down Entity Board shall thereafter be authorized and appointed to take all actions necessary to operate the Wind Down Entity pursuant to the terms of the Wind Down Entity Agreement. The Wind Down Entity is intended to qualify as a liquidating trust pursuant to Treasury Regulation section 301.7701-4(d), with no objective to continue or engage in the conduct of a trade or any other business, except to the extent reasonably necessary to, and consistent with, the purpose of the Wind Down Entity. The Wind Down Entity shall not be deemed a successor in interest of the Debtors for any purpose other than as specifically set forth herein or in the Wind Down Entity Agreement. On the Effective Date, the Debtors shall transfer, without recourse, to the Wind Down Entity all of their right, title and interest in the Post-Effective Date Assets. Upon the transfer by the Debtors of the Post-Effective Date Assets (including the Initial Wind Down

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Funding Amount) to the Wind Down Entity, the Debtors will have no reversionary or further interest in or with respect to the Post-Effective Date Assets or the Wind Down Entity. On the Effective Date, all of the Post-Effective Date Assets, as well as the rights and powers of each Debtor in such Post-Effective Date Assets, shall automatically vest in the Wind Down Entity, free and clear of all Claims and Equity Interests for the benefit of the holders of the Lender Wind Down Claim and the Wind Down Entity Interests. The Post-Effective Date Assets may be transferred subject to certain liabilities, as provided in the Plan or the Wind Down Entity Agreement. Such transfer shall be exempt from any stamp, real estate transfer, mortgage reporting, sales, use or other similar tax, pursuant to Bankruptcy Code section 1146(a).

17. Wind Down Entity Liens and the Lender Wind Down Claim. On the Effective Date, the Wind Down Entity shall have valid, binding, continuing, enforceable, fully-perfected first-lien, first-priority security interests and Liens on the assets of the Entities owned directly and indirectly by the Wind Down Entity, as set forth in the Plan and in the Wind Down Entity Agreement; provided that such Liens and security interests may be subject to certain Liens that were permitted under the First Lien Credit Agreement. With respect to the Lender Wind Down Claim: (a) the Wind Down Entity shall be required to make payments in respect of the Lender Wind Down Claim as set forth in the Plan; (b) the Wind Down Entity shall be required to make distributions to the extent of such Lender Wind Down Claim without reference to a fixed maturity date or the granting of remedies for non-payment (other than the ability to assert a claim against the Wind Down Entity for breach of the organizational and/or trust documents, as applicable, governing the Wind Down Entity); and (c) the Lender Wind Down Claim will be transferable in a manner generally consistent with the transferability of bankruptcy claims (provided that (i) no filings evidencing any such transfer need be filed on the docket of the Chapter 11 Cases and (ii) the Wind Down Entity Representative shall be provided with notice of any such transfer for recordation in the register of the Lender Wind Down Claim).

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18. Issuance of the Lender Wind Down Claim. On the Effective Date, the Wind Down Entity shall record the Lender Wind Down Claim for the benefit of the holders of the Lender Wind Down Claim in a register in accordance with the terms of the Wind Down Entity Agreement. From and after the Effective Date, the Wind Down Entity Representative shall record any transfers of the Lender Wind Down Claim in such register, and shall make any distributions on the Lender Wind Down Claim to the entity or entities listed as the beneficial owner(s) of such claims in such register.

19. Disputed Claims Reserve. On the Effective Date, the Wind Down Entity shall establish and maintain the Disputed Claims Reserve in accordance with the terms of the Plan and the order granting the Debtors’ Motion for Entry of an Order Establishing the Amount of the Disputed Claims Reserve.

20. Allowed Claims Reserve. On the Effective Date, the Wind Down Entity shall establish and fund the Allowed Claims Reserve with Cash in an amount equal to the amount of all Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Non-Priority Tax Claims, Allowed Other Secured Claims and Allowed General Unsecured Claims that are not otherwise paid on or prior to the Effective Date. The Allowed Claims Reserve shall be maintained in trust for holders of Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Non-Priority Tax Claims, Allowed Other Secured Claims and Allowed General Unsecured Claims not otherwise paid on or prior to the Effective Date. Each such Claim shall be paid in full in Cash from funds held in the Allowed Claims Reserve as soon as practicable after the Effective Date. Such Claims shall be paid first from amounts in the Allowed Claims Reserve

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and then from the assets of the Wind Down Entity only if no funds remain in the Allowed Claims Reserve. When all such Claims have been paid in full, amounts remaining in the Allowed Claims Reserve, if any, shall be returned to the Wind Down Entity and shall be used by the Wind Down Entity Board to (a) first, satisfy the Rejection Shareholder Cash Distribution remaining amount, if any, (b) then, satisfy the remaining amount of the Lender Wind Down Claim, if any, and (c) then, to the holders of the Wind Down Entity Equity Interests in accordance with their respective percentage interests.

21. Cancellation of Existing Agreement, Notes and Equity Interests. On the Effective Date, except as otherwise specifically provided for in the Plan, the obligations of the Debtors under the Restructuring Support Agreement, the First Lien Credit Agreement and any other certificate, share, note, bond, indenture, purchase right, option, warrant, or other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of or ownership interest in any of the Debtors giving rise to any Claim or Equity Interest or any option, warrant, or right, contractual or otherwise, to acquire an Equity Interest (except such certificates, notes, or other instruments or documents evidencing indebtedness or obligations of any Debtors that are specifically reinstated pursuant to the Plan), shall be cancelled as to any such Debtors, and the Wind Down Entity shall not have any continuing obligations thereunder; and the obligations of any of the Debtors pursuant, relating, or pertaining to any agreements, indentures, certificates of designation, by-laws, or certificate or articles of incorporation or similar documents governing the Restructuring Support Agreement, the First Lien Credit Agreement and any other shares, certificates, notes, bonds, purchase rights, options, warrants, or other instruments or documents evidencing or creating any indebtedness or obligation of any of the Debtors (except such agreements, certificates, notes, or other instruments evidencing

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indebtedness or obligations of any Debtors that are specifically reinstated pursuant to the Plan or assumed by any such Debtors) shall be released and discharged; provided, however, that, notwithstanding the occurrence of the Confirmation Date or the Effective Date, any such agreement that governs the rights of the holder of a Claim shall continue in effect solely for purposes of (a) allowing holders of such Claims to receive distributions under the Plan as provided herein, (b) resolving disputes with respect to the allowance of any Claim, (c) allowing the First Lien Agent to make distributions under the Plan as provided herein and therein, and deduct therefrom such reasonable compensation, fees, and expenses due thereunder or incurred in making such distributions, to the extent not paid by the Debtors and authorized under such agreement, and (d) allowing the First Lien Agent to seek and receive compensation and/or reimbursement of fees and expenses in accordance with the terms of the Plan. For the avoidance of doubt, nothing in this paragraph shall affect the discharge of or result in any obligation, liability, or expense of the Debtors or the Wind Down Entity, or affect the discharge of Claims or Equity Interests pursuant to the Bankruptcy Code, the Confirmation Order, or the Plan, or result in any additional obligation, expense, or liability of the Debtors or the Wind Down Entity. On and after the Effective Date, all duties and responsibilities of the First Lien Agent under the First Lien Credit Agreement and the other Loan Documents (as defined in the First Lien Credit Agreement) shall be discharged except to the extent required to effectuate the Plan.

22. Distributions. The procedures governing distributions contained in Article VI of the Plan shall be, and hereby are, approved in their entirety.

23. Disallowance of Claims. Except as otherwise specifically provided for in the Plan or this Confirmation Order or otherwise agreed, any and all proofs of Claim (other than proofs of Claim filed on account of Specified Claims or Rejection Damage Claims) shall be

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deemed expunged from the claims register on the Effective Date without any further notice to or action, order, or approval of the Court and the Claim on which such proof of Claim was filed shall be determined, resolved, or adjudicated, as the case may be, in the manner as if the Chapter 11 Cases had not been commenced and shall survive the Effective Date as if the Chapter 11 Cases had not been commenced.

24. Preservation of Causes of Action. Unless any Cause of Action against an Entity is expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or a Final Order, in accordance with Bankruptcy Code section 1123(b), the Debtors shall convey to the Wind Down Entity all rights to commence, prosecute or settle, as appropriate, any and all Causes of Action, whether arising before or after the Petition Date, which shall vest in the Wind Down Entity pursuant to the terms of the Plan and the Wind Down Entity Agreement. The Wind Down Entity may enforce all rights to commence, prosecute, or settle, as appropriate, any and all Causes of Action, whether arising before or after the Petition Date, and the Wind Down Entity’s rights to commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date. The Wind Down Entity may pursue such Causes of Action and may retain and compensate professionals in the analysis or pursuit of such Causes of Action to the extent the Wind Down Entity deems appropriate, including on a contingency fee basis. No Entity may rely on the absence of a specific reference in the Plan or the Disclosure Statement to any Cause of Action against them as any indication that the Debtors or the Wind Down Entity will not pursue any and all available Causes of Action against them. The Debtors and the Wind Down Entity expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as otherwise expressly provided in the Plan. Unless any Cause of Action against an Entity is expressly waived, relinquished, exculpated, released,

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compromised, or settled in the Plan or a Final Order, the Wind Down Entity expressly reserves all Causes of Action for later adjudication, and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of the Confirmation or Consummation. The Wind Down Entity reserves and shall retain the foregoing Causes of Action notwithstanding the rejection of any Executory Contract or Unexpired Lease during the Chapter 11 Cases or pursuant to the Plan. The Wind Down Entity shall have the exclusive right, authority, and discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action, or to decline to do any of the foregoing, without the consent or approval of any third party or any further notice to or action, order, or approval of the Court.

25. Subordination. Except as expressly provided in the Plan or this Confirmation Order, the allowance, classification and treatment of all Allowed Claims and Equity Interests and the respective distributions and treatments under the Plan take into account and conform to the relative priority and rights of the Claims and Equity Interests in each Class in connection with any contractual, legal, and equitable subordination rights relating thereto. However, the Debtors reserve the right to reclassify any Allowed Claim or Equity Interest in accordance with any contractual, legal or equitable subordination relating thereto, unless otherwise provided in a settlement agreement concerning such Allowed Claim or Equity Interest.

26. Release of Liens. Except as otherwise provided herein, in the Plan or in any contract, instrument, release, or other agreement or document created pursuant to the Plan, on the Effective Date, all mortgages, deeds of trust, Liens, pledges, and other security interests against any property of the Debtors’ Estates shall be fully released and discharged, and all of the right, title, and interest of any holder of such mortgages, deeds of trust, Liens, pledges, and other security interests shall revert to the Wind Down Entity and each of their successors and assigns.

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27. Severance and Incentive Plan; Employment Agreements. On the Effective Date, the existing employment agreements for each of the Executives shall be rejected, and each of the Executives shall be granted, in accordance with Bankruptcy Code section 502(b)(7), an Allowed General Unsecured Claim in an amount equal to the amount of the base salary (as of May 26, 2016) and benefits provided by their respective employment agreements, without acceleration, for one year following the Petition Date, plus any unpaid base salary, unpaid benefits and unpaid expense reimbursements due under such employment agreements, without acceleration, as of the Petition Date; provided, however, that (i) the aggregate amount of the portions of all such Allowed General Unsecured Claims of the Executives related to base salary (excluding unpaid base salary) shall not exceed $2.09 million, and (ii) the amount of the portion of each such Allowed General Unsecured Claim of an Executive related to benefits (excluding unpaid benefits) shall not exceed $24,000.

28. Any employment agreement or similar benefits agreement between any executive, contractor or other employee that is not an Executive and any Debtor shall, unless otherwise agreed among the Debtors and the Requisite Consenting Lenders, be rejected immediately prior to the Effective Date of the Plan unless otherwise agreed among such executive, contractor or other employee and the Requisite Consenting Lenders.

29. Claims By or Against Non-Debtor Subsidiaries. Notwithstanding anything to the contrary in the Plan or this Confirmation Order, any Claim, Cause of Action, or remedy asserted by any Debtor against any Non-Debtor Subsidiary or any Non-Debtor Subsidiary against any Debtor shall be, as of the Effective Date, reinstated, adjusted (including by

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contribution, distribution in exchange for new debt or equity, or otherwise), paid, continued, cancelled, or discharged to the extent determined appropriate by the applicable Debtor or the Wind Down Entity and applicable Non-Debtor Subsidiary, as applicable, subject to the consent of the Requisite Consenting Lenders, which consent shall not be unreasonably withheld. Any such transaction may be effectuated prior to, on or subsequent to the Effective Date without any further action by the Court or by the holders of Wind Down Entity Interests.

30. Assumption or Rejection of Executory Contracts and Unexpired Leases. Except for Executory Contracts and Unexpired Leases specifically designated as assumed on the Schedule of Assumed Executory Contracts and Unexpired Leases, each Executory Contract and Unexpired Lease shall be deemed rejected as of the Effective Date under Bankruptcy Code section 365. This Confirmation Order constitutes an order of the Court approving the assumption or rejection of Executory Contracts and Unexpired Leases pursuant to Bankruptcy Code sections 365 and 1123 as of the Effective Date.

31. The assumption of any Executory Contracts and Unexpired Leases in the Chapter 11 Cases or otherwise through the Confirmation Order (or other order by the Court) may include the assignment of certain of such contracts to the Wind Down Entity or the Non-Debtor Subsidiaries, each of which shall be deemed to have provided adequate assurance of future performance pursuant to section 365(b) of the Bankruptcy Code in accordance with the terms of the Plan and this Confirmation Order.

32. Cure Claims. At the election of the Debtors (with the reasonable consent of the Requisite Consenting Lenders) or the Wind Down Entity, as applicable, any monetary defaults under each Executory Contract and Unexpired Lease to be assumed and assigned under the Plan shall be satisfied pursuant to Bankruptcy Code section 365(b)(1) in one of the following ways:

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(i) payment of the Cure Claim in Cash on or as soon as reasonably practicable following the occurrence of (A) thirty (30) days after the determination of the Cure Claim, and (B) the Effective Date or such other date as may be set by the Court; or (ii) on such other terms as agreed to by the Debtors (with the reasonable consent of the Requisite Consenting Lenders) or the Wind Down Entity and the non-Debtor counterparty to such Executory Contract or Unexpired Lease. In the event of a dispute pertaining to assumption or assignment, the Cure Claim payments required by Bankruptcy Code section 365(b)(1) shall be made following the resolution of the dispute in accordance with Article VIII.B of the Plan.

33. Adequate Assurance of Future Performance. Except as otherwise provided in this Confirmation Order, the only adequate assurance of future performance of any executory contract or unexpired lease that is assumed in connection with the Plan shall be the promise of the Wind Down Entity or applicable Non-Debtor Subsidiary to perform all obligations under any executory contract or unexpired lease under the Plan.

34. Rejection Damage Claims. If the rejection or repudiation of an Executory Contract or Unexpired Lease pursuant to the Plan results in a Rejection Damage Claim, then such Rejection Damage Claim shall be forever barred and shall not be enforceable against the Debtors or the Wind Down Entity or their properties, or any of their interests in properties as agent, successor or assign, unless a proof of Claim is filed with the Claims and Noticing Agent and served upon counsel to the Debtors or the Wind Down Entity, as applicable, within thirty (30) days after the later of (i) service of the Confirmation Order and (ii) service of notice of the effective date of rejection or repudiation of the Executory Contract or Unexpired Lease. The Debtors shall give notice of the bar date established by Article VIII.D of the Plan to the non-Debtor counterparties to the Executory Contracts, including any Existing Benefits Agreements,

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and Unexpired Leases that are not identified in the Schedule of Assumed Executory Contracts and Unexpired Leases by service of the Plan, this Confirmation Order, or otherwise. Unless otherwise provided herein, the Wind Down Entity shall object to such Rejection Damage Claims by the Claims Objection Deadline.

35. Indemnification. Notwithstanding any other provisions of the Plan or this Confirmation Order, from and after the Effective Date, indemnification obligations owed by the Debtors or the Wind Down Entity to directors, officers, or employees of the Debtors who served or were employed by the Debtors before, on or after the Petition Date, to the extent provided in the articles or certificates of incorporation, by-laws or similar constituent documents, by statute or by written agreement, policies or procedures of the Debtors, will be deemed to be, and treated as though they are, Executory Contracts that are assumed pursuant to the Plan and Bankruptcy Code section 365. All such indemnification obligations shall survive confirmation of the Plan, remain unaffected thereby, and not be discharged, irrespective of whether indemnification, defense, reimbursement or limitation is owed in connection with an event occurring before, on, or after the Petition Date and the Wind Down Entity shall indemnify all directors, officers or employees of the Wind Down Entity (including the Wind Down Entity Representative) to the same extent as to which the Debtors were obligated to indemnify their directors, officers and employees prior to the Petition Date or during the pendency of these Chapter 11 Cases.

36. Release, Exculpation, and Injunction Provisions. For the reasons set forth herein and in the Opinion, the release, exculpation, injunction, and related provisions set forth in Article V of the Plan, all of which are incorporated herein by reference, are approved and authorized in their entirety, and such provisions are effective and binding on all Persons or Entities to the extent provided herein and therein.

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37. Authorization to Consummate. The Debtors are authorized to consummate the Plan at any time after the entry of this Confirmation Order subject to satisfaction or waiver (by the required parties) of the conditions precedent to Consummation set forth in Article IX of the Plan.

38. Administrative Claims Bar Date. The holder of an Administrative Claim, other than (i) a Fee Claim, (ii) a liability incurred and payable in the ordinary course of business by a Debtor (and not past due), or (iii) an Administrative Claim that has been Allowed on or before the Effective Date, must file with the Court and serve on the Wind Down Entity Representative and its counsel notice of such Administrative Claim within thirty (30) days after service of notice of the Effective Date. Such notice must include at a minimum (i) the name of the Debtor(s) purported to be liable for the Administrative Claim, (ii) the name of the holder of the Administrative Claim, (iii) the amount of the Administrative Claim, and (iv) the basis for the Administrative Claim. Failure to file and serve such notice timely and properly shall result in the Administrative Claim being forever barred.

39. Professional Compensation. All requests for compensation or reimbursement of Fee Claims shall be filed and served on the Debtors, counsel to the Debtors, the Wind Down Entity, counsel to the Wind Down Entity, the U.S. Trustee, counsel to the Ad Hoc Group, and such other entities who are designated by the Bankruptcy Rules, the Confirmation Order, or other order of the Court, no later than forty-five (45) days after the Effective Date. Holders of Fee Claims that are required to file and serve applications for final allowance of their Fee Claims that do not file and serve such applications by the required deadline shall be forever barred from asserting such Claims against the Debtors, the Wind Down Entity, or their respective properties, and such Fee Claims shall be deemed discharged as of the Effective Date. Objections to any Fee

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Claims must be filed and served on the Debtors, counsel to the Debtors, the Wind Down Entity, counsel to the Wind Down Entity, counsel to the Ad Hoc Group, and the requesting party no later than thirty (30) days after the filing of the final applications for compensation or reimbursement (unless otherwise agreed by the party requesting compensation of a Fee Claim).

40. Statutory Fees. Notwithstanding anything to the contrary contained in the Plan or this Confirmation Order, on the Effective Date, the Debtors shall pay, in full, in Cash, any fees due and owing to the U.S. Trustee at the time of Confirmation. On and after the Effective Date, the Wind Down Entity shall be responsible for filing required post-confirmation reports and paying quarterly fees due to the U.S. Trustee for the Wind Down Entity until the entry of a final decree in the Chapter 11 Cases.

41. Accrued Professional Compensation Account. On the Effective Date, the Debtors and/or the Wind Down Entity shall establish the Accrued Professional Compensation Account and shall deposit therein an amount equal to all Accrued Professional Compensation. The Accrued Professional Compensation Account shall be maintained in trust for the Professionals. Each Allowed Fee Claim shall be paid in full in Cash from funds held in the Accrued Professional Compensation Account as soon as practicable after the date on which an applicable Fee Claim becomes an Allowed Fee Claim. When all Allowed Fee Claims have been paid in full, amounts remaining in the Accrued Professional Compensation Account, if any, shall be returned to the Wind Down Entity and shall be used by the Wind Down Entity Board to pay the Lender Wind Down Claim and, if the Lender Wind Down Claim has been paid in full in Cash, to fund the activities of the Wind Down Entity and to make distributions to holders of Wind Down Entity Interests.

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42. Fees and Expenses of the Ad Hoc Group, Certain Ad Hoc Group Members and the First Lien Agent. On the Effective Date, as per the terms of the Cash Collateral Order, the Debtors shall pay all unpaid reasonable and documented fees and expenses of Kirkland & Ellis LLP and White & Case LLP, as counsel to the Ad Hoc Group, White & Case LLP, as counsel to Luminus Management LLC and Soros Fund Management LLC, and Klehr, Harrison, Harvey, Branzburg LLP, as local counsel to the Ad Hoc Group, and 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 reasonable fees and expenses incurred by the First Lien Agent, including the unpaid reasonable and documented (in summary form) fees and expenses of King & Spalding LLP, as restructuring counsel, White & Case LLP as counsel with respect to the administration of the First Lien Credit Agreement and other Loan Documents (as defined in the First Lien Credit Agreement), special maritime counsel and Bayard, P.A., as local counsel, in each case incurred in connection with the Restructuring.

43. Axon Claims. To the extent any Claims of Axon Pressure Products, Inc., Axon EP Inc. and/or Axon Energy Products AS (collectively “Axon”) against the Debtors or any of the Non-Debtors Subsidiaries, including without limitation, Claims for contribution and indemnity against Hercules Offshore, Inc., Hercules Drilling Company, LLC and/or SD Drilling LLC (collectively “Hercules”) become Allowed Claims, the sole sources of recovery for Axon with respect to such Claims shall be: (1) a $2.0 million claims reserve for Axon; (2) Hercules’s insurance policies, to the extent of the coverage and limits provided in those policies; and (3) recoveries, if any, Hercules obtains from Walter Oil & Gas Corporation (“Walter”) or its insurers based on: (a) any and all indemnity rights, including rights of indemnity for defense, to be held harmless, and for breach of release, but not including any recovery to Hercules from Walter or its

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insurers for Hercules’s own fees and costs (including, without limitation, fees and expenses of legal advisors); and/or (b) additional insured rights Hercules has against Walter and its insurers arising out of the blowout of the A-3 Well located in South Timbalier Block 220, on the Outer Continental Shelf in the Gulf of Mexico, which claims for recoveries, if any, Hercules undertakes to continue to prosecute in good faith and with due diligence. In addition, notwithstanding the disallowance or expungement of the proofs of Claim filed by Axon following prosecution of the section 502(e)(1)(b) objection filed by Hercules, Axon shall still be entitled to the recoveries, if any, provided in (2) and (3) above in this paragraph. Axon otherwise agrees that the release provisions contained in the Plan shall be binding on Axon.

44. Certain Underwriter’s at Lloyd’s, London. In connection with the assumption of Policy Number B070GA024940c and Policy Number UMRGU024940k (collectively, the “Lloyd’s Policies”), and the assignment of the Lloyd’s Policies to the Wind Down Entity, the Debtors or the Wind Down Entity, as applicable, shall continue to maintain the rigs covered by the Lloyd’s Policies in the same manner and in the same condition as such rigs were maintained by the Debtors prior to the assumption and assignment of the Lloyd’s Policies until such time as the rigs are sold by the Debtors or the Wind Down Entity, as applicable, or the expiry of the policy, whichever is first.

45. Department of Health and Human Services and Coast Guard. Nothing in the Plan, the Confirmation Order or the related Plan documents discharges or releases the Debtors, the Wind Down Entity or any other entity from any debt, obligation, claim, liability or cause of action of the United States Department of Health and Human Services (“HHS”) and the United States Coast Guard (“Coast Guard”) or impairs the ability of HHS and Coast Guard to pursue any debt, obligation, claim, liability or cause of action against any Debtor, the Wind Down

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Entity or any non-Debtor. All claims, liabilities, or causes of action of, or to, HHS and Coast Guard shall survive the Chapter 11 Cases as if the cases had not been commenced and be paid and determined in the manner and by the administrative or judicial tribunals in which such rights or claims would have been resolved or adjudicated if the Chapter 11 Cases had not been commenced. Without limiting the foregoing, for the avoidance of doubt: (1) HHS and Coast Guard shall not be required to file any claims in the Debtors’ Chapter 11 Cases; (2) nothing shall affect or impair the exercise of HHS and Coast Guard’s police and regulatory powers against the Debtors and/or the Wind Down Entity; and (3) nothing shall affect or impair any Governmental Unit’s rights to assert setoff and recoupment, including contingent or unliquidated rights, against the Debtors and/or the Wind Down Entity.

46. Internal Revenue Service. Notwithstanding any provision to the contrary in the Plan, this Confirmation Order or any implementing Plan documents (collectively, the “Documents”), nothing shall: (i) affect the ability of the Internal Revenue Service (the “IRS”) to pursue any non-Debtors to the extent allowed by non-bankruptcy law for any liabilities that may be related to any applicable federal laws and regulations; (ii) affect the rights of the United States to assert setoff and recoupment and such rights are expressly preserved and nothing shall affect the rights of the Debtor or the Wind Down Entity to object to any such asserted setoff or recoupment; (iii) discharge any Claim of the IRS or release the Debtors or any other entity from any debt, obligation, Claim, liability or Cause of Action held by the IRS or impair the ability of the IRS to pursue any debt, obligation, Claim, liability or Cause of Action against any Debtor, the Wind Down Entity or Non-Debtor Subsidiary; (iv) require the IRS to file an Administrative Claim in order to receive payment for any liability described in Bankruptcy Code section 503(b)(1)(B) and (C); or (v) subject the IRS to the exclusive jurisdiction of the Court. To the

52

extent the IRS has Allowed Priority Tax Claims (including any penalties, interest or additions to tax entitled to priority under the Bankruptcy Code) that are not paid in full in Cash on the Effective Date, then such Claims shall accrue interest commencing on the Effective Date at the rate and method set forth in 26 U.S.C. §§ 6621 and 6622. All Priority Tax Claims held by the IRS that are Allowed as of the Effective Date shall be paid on the Effective Date. To the extent that a Priority Tax Claim is not Allowed on the Effective Date, such Claim shall be paid within 30 days after the date on which such Claim becomes Allowed. To the extent the IRS has Administrative Claims that are Allowed pursuant to the Plan or Bankruptcy Code section 503, such Administrative Claims shall accrue interest and penalties as provided by non-bankruptcy law until paid in full. To the extent the IRS holds Administrative Claims that are Allowed pursuant to the Plan or Bankruptcy Code section 503 as of the Effective Date, such Administrative Claims shall be paid on the Effective Date. Without limiting the foregoing, nothing in the Documents shall: (a) be construed as a compromise or settlement of any IRS Claim or interest; (b) effect a release, discharge or otherwise preclude any Claim whatsoever against any Debtor or the Wind Down Entity by or on behalf of the IRS relating to any liability arising out of any unfiled prepetition or postpetition tax return or any pending audit or audit which may be performed with respect to any prepetition or postpetition tax return; (c) enjoin the IRS from amending any Claim against any Debtor or the Wind Down Entity with respect to any tax liability arising out of prepetition or postpetition tax periods for which a required return has not been filed or from a pending audit or audit that may be performed with respect to any prepetition or postpetition tax return; (d) subject the IRS to the estimation procedures of Bankruptcy Code section 502(c). To the extent the IRS has any Liens securing its Claims, such Liens shall pass through the Chapter 11 Cases unaffected. The intended tax consequences of the

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Plan, including, but not limited to, the classification of the Wind Down Entity as a liquidating trust and any valuation of assets, shall not bind the IRS’ to such classifications or valuations. The Debtors and the Wind Down Entity reserve any and all defenses to Claims asserted by the IRS. Nothing in the Plan or this Confirmation Order shall be deemed to waive, release or limit setoff or recoupment rights, if any.

47. Environmental Protection Agency. Nothing in this Confirmation Order or the Plan discharges, releases, precludes, exculpates, or enjoins any police or regulatory liability to any governmental unit as defined in 11 U.S.C. § 101(27) (a “Governmental Unit”). Nor shall anything in this Confirmation Order or the Plan enjoin or otherwise bar a Governmental Unit from asserting or enforcing, outside this Court, any liability described in the preceding sentence. Nothing in this Confirmation Order or the Plan shall affect any setoff or recoupment rights of any Governmental Unit. Nothing in this Confirmation Order divests any tribunal of any jurisdiction it may have under police or regulatory law to interpret this Confirmation Order or the Plan or to adjudicate any defense asserted under this Confirmation Order or the Plan.

48. Federal Communications Commission. No provision in the Plan or this Confirmation Order relieves any of the Debtors, as licensees (each, a “Licensees”), or the Wind Down Entity from their obligations to comply with the Communications Act of 1934, as amended, and the rules, regulations and orders promulgated thereunder by the Federal Communications Commission (“FCC”). No transfer of control of a Licensee or transfer of any license or any other federal license or authorization issued by the FCC shall take place prior to the issuance of FCC regulatory approval for such transfer of control or transfer of license or authorization pursuant to applicable FCC regulations. The FCC’s rights and powers to take any action pursuant to its regulatory authority, including, but not limited to, imposing any regulatory conditions on such transfers, are fully preserved, and nothing herein shall proscribe or constrain the FCC’s exercise of such power or authority.

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49. Texas Taxing Authorities. Notwithstanding anything to the contrary contained within the Plan, any secured ad valorem tax Claims held by Cypress-Fairbanks Independent School District, Fort Bend Independent School District, Fort Bend County and Harris County (collectively, the “Texas Taxing Authorities”) for tax year 2016 shall be paid in the ordinary course of business prior to delinquency. The Texas Taxing Authorities shall retain their statutory liens securing their prepetition ad valorem tax Claims until such time as such Claims are paid in full. In the event the prepetition ad valorem tax Claims are not timely paid in the ordinary course of business, the Texas Taxing Authorities shall be have the right to pursue their state law remedies for collection of all such prepetition ad valorem tax Claims, penalties and interest due pursuant to the Texas Property Tax Code without further notice or order of the Court.

50. Assuranceforeningen SKULD (Gensidig). Notwithstanding the assumption and assignment hereunder by the Debtors of certain certificates of insurance issued by Assuranceforeningen SKULD (Gjensidig) (“SKULD”), nothing in this Confirmation Order or the Plan shall prejudice the rights of SKULD to argue that (i) any certificates of insurance provided by SKULD to the Debtors were not executory contracts as of the Petition Date or (ii) such certificates of insurance may not be assigned by the Wind Down Entity without SKULD’s consent.

51. Oracle America, Inc. The limited objection to Confirmation filed by Oracle America, Inc. (“Oracle”) is resolved, provided that (i) the Debtors will amend the Schedule of Assumed Executory Contracts and Unexpired Leases in advance of the Effective Date to include descriptions of the Oracle contracts to be assumed (the “Oracle Agreements”) as such descriptions are agreed to between the parties, and (ii) in the event the Debtors seek to assign the Oracle Agreements, the Debtors agree to execute any additional documentation required by Oracle, including entering into an assignment agreement, if necessary.

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52. Return of Utilities Deposits. On the Effective Date, all deposits in the escrow account established to provide utilities with adequate assurance of performance under Bankruptcy Code section 366 during the Chapter 11 Cases shall be promptly released and returned to the Debtors or the Wind Down Entity, as the case may be.

53. Preservation of Insurance. Nothing in the Plan or this Confirmation Order shall diminish or impair the enforceability of any insurance policy that may provide coverage for claims against the Debtors, the Wind Down Entity, the Non-Debtor Subsidiaries, their current and former directors and officers, or any other Person.

54. Compliance with Tax Requirements. Each holder of an Allowed Claim or Equity Interest that is to receive a distribution under the Plan shall have the sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed by any governmental unit, including income, withholding, and other tax obligations, on account of such distribution. Any party issuing any instrument or making any distribution under the Plan has the right, but not the obligation, to not make a distribution until such holder has made arrangements satisfactory to such issuing or distributing party for payment of any such tax obligations, and, if any party issuing any instrument or making any distribution under the Plan fails to withhold with respect to any such holder’s distribution and is later held liable for the amount of such withholding, the holder shall reimburse such party. The Wind Down Entity Representative or other distribution agent, as applicable, may require, as a condition to the receipt of a distribution, that the holder complete the appropriate Form W-8 or W-9, as applicable to each holder. If the

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holder fails to comply with such a request within 180 days, such distribution shall be deemed an unclaimed distribution and treated in accordance with Articles VI.B.4 and VI.B.6 of the Plan. Except as otherwise provided in the Plan or this Confirmation Order, the aggregate consideration paid to holders of Allowed Claims shall be treated as first satisfying an amount equal to the principal amount of the Allowed Claim for such holders, and any remaining consideration as satisfying accrued, but unpaid interest, as applicable.

55. Exemption from Transfer Taxes. Pursuant to, and to the fullest extent permitted by, Bankruptcy Code section 1146(a), all transfers of property pursuant to the Plan, including (i) the transfer of the Post-Effective Date Assets to the Wind Down Entity, (ii) the issuance, transfer, or exchange under the Plan of Wind Down Entity Interests and the security interests in favor of the Wind Down Entity, (iii) the making or assignment of any lease or sublease, or (iv) the making or delivery of any other instrument whatsoever, in furtherance of or in connection with the Plan, shall not be subject to any stamp, conveyance, mortgage, sales or use, real estate transfer, recording, or other similar tax or governmental assessment, and upon entry of this Confirmation Order, the appropriate state or local governmental officials or agents shall forgo the collection of any such tax or governmental assessment and accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax, recordation fee, or governmental assessment.

56. Documents, Mortgages, and Instruments. Each federal, state, commonwealth, local, foreign, or other governmental agency is authorized to accept any and all documents, mortgages, and instruments necessary or appropriate to effectuate, implement, or consummate the Plan and this Confirmation Order.

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57. Continued Effect of Stays and Injunction. Except as otherwise set forth in the Plan or this Confirmation Order, all injunctions or stays in effect in the Chapter 11 Cases under Bankruptcy Code sections 105 or 362, or otherwise, and in existence on the Confirmation Date, shall remain in full force and effect until the Effective Date.

58. Record Date. Notwithstanding anything to the contrary in the Plan or this Confirmation Order, there shall not be a Record Date for distributions to holders of Equity Interests.

59. Nonseverability of Plan Provisions Upon Confirmation. Each provision of the Plan is: (a) valid and enforceable in accordance with its terms; (b) integral to the Plan and may not be deleted or modified without the Debtors’ consent in accordance with the terms set forth in the Plan; and (c) nonseverable and mutually dependent.

60. Post-Confirmation Modifications. Subject to the limitation set forth in Article IX.E of the Plan, and subject to the terms of the Restructuring Support Agreement, after entry of this Confirmation Order, the Debtors or the Wind Down Entity, as the case may be, may, upon order of the Court, amend or modify the Plan, in accordance with Bankruptcy Code section 1127(b), provided, however, that such action does not materially and adversely affect the benefits and rights of the First Lien Agent thereunder without the express prior written consent of the First Lien Agent. Notwithstanding the foregoing, the Debtors (with the reasonable consent of the Requisite Consenting Lenders) or the Wind Down Entity, as the case may be, are authorized to make appropriate technical adjustments, remedy any defect or omission, or reconcile any inconsistencies in the Plan, the documents included in the Plan Supplement, any and all exhibits to the Plan, and/or this Confirmation Order, as may be necessary to carry out the purposes and effects of the Plan; provided, however, that such action does not materially and

58

adversely affect the treatment of holders of Allowed Claims or Equity Interests pursuant to the Plan. Subject to certain restrictions and requirements set forth in Bankruptcy Code section 1127 and Bankruptcy Rule 3019 and those restrictions on modifications set forth in the Restructuring Support Agreement, the Debtors and the Wind Down Entity expressly reserve their respective rights to revoke or withdraw, or to alter, amend, or modify materially the Plan with respect to such Debtor, one or more times after Confirmation, and, to the extent necessary, may initiate proceedings in the Court to so alter, amend, or modify the Plan, or remedy any defect or omission, or reconcile any inconsistencies in the Plan, the Disclosure Statement, or this Confirmation Order, in such manner as may be necessary to carry out the purposes and intent of the Plan.

61. Applicable Nonbankruptcy Law. The provisions of this Confirmation Order, the Plan and related documents, or any amendments or modifications thereto, shall apply and be enforceable notwithstanding any otherwise applicable nonbankruptcy law.

62. Waiver of Filings. Any requirement under Bankruptcy Code section 521 or Bankruptcy Rule 1007 obligating the Debtors to file any list, schedule, or statement with the Court or the Office of the U.S. Trustee is permanently waived as to any such list, schedule, or statement not filed as of the Confirmation Date.

63. Governmental Approvals Not Required. This Confirmation Order shall constitute all approvals and consents required, if any, by the laws, rules, or regulations of any state, federal, or other governmental authority with respect to the dissemination, implementation, or consummation of the Plan and the Disclosure Statement, any certifications, documents, instruments or agreements, and any amendments or modifications thereto, and any other acts referred to in, or contemplated by, the Plan and the Disclosure Statement.

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64. Section 1145 Exemption. The offering, issuance, and distribution of the Wind Down Entity Interests, to the extent such interests constitute or may be deemed to constitute securities under applicable U.S. securities law, shall be exempt from the registration and prospectus delivery requirements of the Securities Act and any other applicable state and federal law requiring registration and/or delivery of a prospectus prior to the offering, issuance, distribution, or sale of securities pursuant to Bankruptcy Code section 1145.

65. Notices of Confirmation and Effective Date. The Debtors or Wind Down Entity shall serve notice of entry of this Confirmation Order in accordance with Bankruptcy Rules 2002 and 3020(c) on all holders of Claims and Equity Interests and the Core Notice Parties within ten Business Days after the date of entry of this Confirmation Order. As soon as reasonably practicable after the Effective Date, the Wind Down Entity shall file notice of the Effective Date and shall serve a copy of the same on the above-referenced parties. The notice of the Effective Date may be included in the Confirmation Order Notice. Notwithstanding the above, no notice of Confirmation or consummation or service of any kind shall be required to be mailed or made upon any Person to whom the Debtors mailed notice of the Confirmation Hearing, but received such notice returned marked “undeliverable as addressed,” “moved, left no forwarding address” or “forwarding order expired,” or similar reason, unless the Debtors have been informed in writing by such Person, or are otherwise aware, of that Person’s new address. The above-referenced notices are adequate under the particular circumstances of the Chapter 11 Cases and no other or further notice is necessary.

66. Reversal. If any or all of the provisions of this Confirmation Order are hereafter reversed, modified or vacated by subsequent order of this Court or any other court, such reversal, modification or vacatur shall not affect the validity of the acts or obligations incurred or

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undertaken under or in connection with the Plan prior to the Debtors’ receipt of written notice of such order. Notwithstanding any such reversal, modification or vacatur of this Confirmation Order, any such act or obligation incurred or undertaken pursuant to, and in reliance on, this Confirmation Order prior to the effective date of such reversal, modification or vacatur shall be governed in all respects by the provisions of this Confirmation Order and the Plan and all related documents or any amendments or modifications thereto. Upon entry of a final order reversing, modifying or vacating the Confirmation Order, the Plan shall be null and void in all respects, and nothing contained in the Plan shall: (i) constitute a waiver, release, or discharge of any Claim or Equity Interest; (ii) prejudice in any manner the rights of the holder of any Claim or Equity Interest; (iii) prejudice in any manner any right, remedy, or claim of the Debtors or the Non-Debtor Subsidiaries; or (iv) be deemed an admission against interest by the Debtors or the Non-Debtor Subsidiaries.

67. Failure of Consummation. If the Effective Date does not occur, then the Plan shall be null and void in all respects, and nothing contained in the Plan shall: (i) constitute a waiver, release, or discharge of any Claims or Equity Interests; (ii) prejudice in any manner the rights of the holder of any Claim or Equity Interest; (iii) prejudice in any manner any right, remedy, or claim of the Debtors or the Non-Debtor Subsidiaries; or (iv) be deemed an admission against interest by the Debtors or the Non-Debtor Subsidiaries.

68. Termination of the Restructuring Support Agreement. On the Effective Date, the Restructuring Support Agreement will terminate in accordance with section 11 thereof.

69. Cash Collateral Order. The Cash Collateral Order shall remain in full force and effect in accordance with its terms pending the occurrence of the Effective Date. On the Effective Date, the Debtors shall pay all amounts due, including postpetition interest (calculated at the non-default rate), computed in accordance with the terms of the First Lien Credit Agreement, that has accrued and remains unpaid as of the Effective Date, pursuant to paragraphs 13(a) and 16 of the Cash Collateral Order.

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70. First Lien Claim Objection and Standing Motion. For the reasons set forth in the Opinion, the First Lien Claim Objection is overruled and the Standing Motion is denied.

71. Substantial Consummation. On the Effective Date, the Plan shall be deemed to be substantially consummated under Bankruptcy Code sections 1101 and 1127.

72. Governing Law. Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules) or unless otherwise specifically stated in any document, the laws of the State of Delaware, without giving effect to the principles of conflicts of laws shall govern the rights, obligations, construction and implementation of the Plan and any agreements, documents, instruments or contracts executed or entered into in connection with the Plan, unless otherwise specified.

73. Waiver of Stay. For good cause shown, the stay of this Confirmation Order provided by any Bankruptcy Rule is waived, and this Confirmation Order shall be effective and enforceable immediately upon its entry by the Court.

74. References to and Omissions of Plan Provisions. References to articles, sections, and provisions of the Plan are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of the Plan. The failure to specifically include or to refer to any particular article, section, or provision of the Plan in this Confirmation Order shall not diminish or impair the effectiveness of such article, section, or provision, it being the intent of the Court that the Plan be confirmed in its entirety, except as expressly modified herein, and incorporated herein by this reference.

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75. Headings. Headings utilized herein are for convenience and reference only, and do not constitute a part of the Plan or this Confirmation Order for any other purpose.

76. Effect of Conflict. Unless otherwise specified, this Confirmation Order supersedes any Court order issued prior to the Confirmation Date that may be inconsistent with this Confirmation Order. If there is any inconsistency between the terms of the Plan and the terms of this Confirmation Order, the terms of this Confirmation Order govern and control.

77. Order Effective Immediately. Notwithstanding Bankruptcy Rules 3020(e) or 7062 or otherwise, the stay provided for under Bankruptcy Rule 3020(e) shall be waived and this Confirmation Order shall be effective and enforceable immediately upon entry. The Debtors are authorized to consummate the Plan and the transactions contemplated thereby immediately after entry of this Confirmation Order and upon, or concurrently with, satisfaction of the conditions set forth in the Plan.

78. Final Order. This Confirmation Order is a Final Order and the period within which an appeal must be filed shall commence upon the date of entry hereof.

79. Retention of Jurisdiction. The Court may properly, and upon the Effective Date shall, to the full extent set forth in the Plan, retain jurisdiction over all matters arising out of, and related to, the Chapter 11 Cases, including the matters set forth in Article VII of the Plan and Bankruptcy Code section 1142. Notwithstanding anything in this Confirmation Order or the Plan, including subpart v of Article VII thereof, the Court shall not have exclusive jurisdiction with respect to resolution of disputes related to or the pursuit or exercise of any applicable nonbankruptcy legal, equitable and/or contractual rights of holders of General Unsecured Claims.

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Wilmington, Delaware

Dated: November 15, 2016

/s/ Kevin J. Carey 

THE HONORABLE KEVIN J. CAREY

UNITED STATES BANKRUPTCY JUDGE

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EX-2.2

Exhibit 2.2

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

	)
In re:	)	Chapter 11
	)
HERCULES OFFSHORE, INC., et al.,1	)	Case No. 16-11385 (KJC)
	)
Debtors.	)	Jointly Administered
	)

DEBTORS’ MODIFIED JOINT PREPACKAGED CHAPTER 11 PLAN

(INCORPORATING MEDIATION SETTLEMENT)

AKIN GUMP STRAUSS HAUER & FELD LLP Michael S. Stamer (admitted pro hac vice) Philip C. Dublin (admitted pro hac vice) David H. Botter (admitted pro hac vice) One Bryant Park New York, New York 10036-6745 Telephone: (212) 872-1000 Facsimile: (212) 872-1002   Kevin M. Eide (admitted pro hac vice) 1333 New Hampshire Avenue NW Washington, DC 20036 Telephone: (202) 887-4000 Facsimile: (202) 887-4288   Co-counsel to the Debtors and Debtors in Possession   Dated: October 18, 2016 MORRIS, NICHOLS, ARSHT & TUNNELL LLP Robert J. Dehney Eric D. Schwartz Matthew B. Harvey 1201 N. Market Street, 16th Floor Wilmington, Delaware 19801 Telephone: (302) 658-9200 Facsimile: (302) 658-3989

¹  The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are: Cliffs Drilling Company (8934); Cliffs Drilling Trinidad L.L.C. (5205); FDT LLC (7581); FDT Holdings LLC (4277); Hercules Drilling Company, LLC (2771); Hercules Offshore, Inc. (2838); Hercules Offshore Services LLC (1670); Hercules Offshore Liftboat Company LLC (5303); HERO Holdings, Inc. (5475); SD Drilling LLC (8190); THE Offshore Drilling Company (4465); THE Onshore Drilling Company (1072); TODCO Americas Inc. (0289); and TODCO International Inc. (6326). The Debtors’ corporate headquarters are located at, and the mailing address for each Debtor is, 9 Greenway Plaza, Suite 2200, Houston, TX 77046.

Table of Contents

		Page
INTRODUCTION			1
ARTICLE I. DEFINITIONS AND CONSTRUCTION OF TERMS			1
A.	Definitions.		1
B.	Interpretation, Application of Definitions, and Rules of Construction.		18
C.	Computation of Time.		18
ARTICLE II. ADMINISTRATIVE CLAIMS, FEE CLAIMS, AND PRIORITY CLAIMS			18
A.	Administrative Claims (Other Than Fee Claims).		18
B.	Fee Claims.		19
C.	Priority Tax Claims.		20
D.	U.S. Trustee Fees.		20
ARTICLE III. CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS			20
A.	Classification of Claims and Equity Interests.		20
B.	Record Date.		21
C.	Summary of Classification and Class Identification.		21
D.	Treatment of Classified Claims and Equity Interests.		21
E.	Special Provision Regarding Unimpaired and Reinstated Claims.		25
F.	Voting of Claims.		26
G.	Nonconsensual Confirmation.		26
ARTICLE IV. MEANS FOR IMPLEMENTATION OF THE PLAN			26
A.	Operations Between the Confirmation Date and Effective Date.		26
B.	Wind Down Entity.		26
C.	Preservation of Causes of Action.		37
D.	Corporate Action.		38
E.	Cancellation of Certain Indebtedness, Agreements, and Existing Securities.		38
F.	Substantive Consolidation for Plan Purposes Only.		39
G.	Section 1145 Exemption.		40
H.	Effectuating Documents; Further Transactions.		40
I.	No Further Approvals.		40
J.	Pre-Effective Date Injunctions or Stays.		40
K.	Intercompany Claims.		40
L.	Claims By/Against Non-Debtor Subsidiaries.		41

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M.	Existing Benefits Agreements and Retiree Benefits.	41
N.	Severance and Incentive Plan; Employment Agreements.	41
O.	Indemnification of Directors, Officers, and Employees.	42
P.	Fees and Expenses of the Ad Hoc Group and the First Lien Agent.	42
ARTICLE V. SETTLEMENT, RELEASE, INJUNCTION AND RELATED PROVISIONS		42
A.	General Settlement of Claims and Interests.	42
B.	Subordination of Claims	44
C.	Release of Liens.	44
D.	Releases by the Debtors.	44
E.	Releases by Holders of Claims and Equity Interests.	45
F.	Exculpation.	46
G.	Injunction.	46
H.	Limitations on Exculpations and Releases.	47
I.	Preservation of Insurance.	47
ARTICLE VI. DISTRIBUTIONS UNDER THE PLAN		47
A.	Procedures for Treating Disputed Claims.	47
B.	Allowed Claims and Equity Interests.	48
C.	Allocation of Consideration.	50
D.	Estimation.	50
E.	Insured Claims.	50
ARTICLE VII. RETENTION OF JURISDICTION		51
ARTICLE VIII. EXECUTORY CONTRACTS AND UNEXPIRED LEASES		52
A.	Assumption and Rejection of Executory Contracts and Unexpired Leases.	52
B.	Cure Claims.	53
C.	Rejection and Repudiation of Executory Contracts and Unexpired Leases.	54
D.	Rejection Damage Claims.	54
E.	Reservation of Rights.	55
F.	Assignment.	55
G.	Insurance Policies.	55
H.	Postpetition Contracts and Leases.	56
ARTICLE IX. EFFECTIVENESS OF THE PLAN		56
A.	Conditions Precedent to Effectiveness.	56
B.	Waiver of Conditions Precedent to Effectiveness.	57
C.	Effect of Failure of Conditions.	57

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D.	Vacatur of Confirmation Order.	57
E.	Modification of the Plan.	57
F.	Revocation, Withdrawal, or Non-Consummation.	58
ARTICLE X. MISCELLANEOUS PROVISIONS		58
A.	Immediate Binding Effect.	58
B.	Governing Law.	58
C.	Dissolution of the Committee	59
D.	Filing or Execution of Additional Documents.	59
E.	Term of Injunctions or Stays.	59
F.	Withholding and Reporting Requirements.	59
G.	Exemption From Transfer Taxes.	59
H.	Plan Supplement.	60
I.	Notices.	60
J.	Conflicts.	60

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INTRODUCTION

Hercules Offshore, Inc. and its affiliated Debtors jointly propose the following prepackaged chapter 11 plan under Bankruptcy Code section 1121(a). The Debtors seek to consummate the transactions contemplated hereby on the Effective Date of the Plan. Each of the Debtors is a proponent of the Plan within the meaning of Bankruptcy Code section 1129.

Reference is made to the Disclosure Statement accompanying the Plan, including the exhibits thereto, for a discussion of the Debtors’ history, business, results of operations, and projections for future operations and risk factors, together with a summary and analysis of the Plan.

THE PLAN SHOULD BE CONSIDERED ONLY IN CONJUNCTION WITH THE DISCLOSURE STATEMENT AND RELATED MATERIALS TRANSMITTED HEREWITH. THE DISCLOSURE STATEMENT IS INTENDED TO PROVIDE YOU WITH INFORMATION YOU NEED TO MAKE AN INFORMED JUDGMENT WHETHER TO ACCEPT OR REJECT THE PLAN.

ARTICLE I.

DEFINITIONS AND CONSTRUCTION OF TERMS

A. Definitions.

Unless otherwise defined herein, the following terms shall have the respective meanings set forth below:

1.    Acceptance Lender Wind Down Claim: means a non-interest bearing senior claim against the Wind Down Entity in the amount of $510 million, plus accrued and unpaid interest on the First Lien Claims as of the Effective Date, less the Escrow Release Payment and any payments of principal or Applicable Premium under the First Lien Credit Agreement previously made to the First Lien Lenders during the Chapter 11 Cases.

2.    Acceptance Wind Down Entity Interests: means, collectively, the Class A Wind Down Entity Interests and the Class B Wind Down Entity Interests.

3.    Accrued Professional Compensation: means, at any given time, and regardless of whether such amounts are billed or unbilled, all accrued, contingent, and/or unpaid fees and expenses (including success fees) for legal, financial advisory, accounting, and other services, and reimbursement of expenses by any Professional that the Court has not, as of the Effective Date, denied by Final Order (i) all to the extent that any such fees and expenses have not been previously paid (regardless of whether a fee application has been filed for any such amount) and (ii) after applying the remaining balance of any retainer that has been provided by a Debtor to such Professional. To the extent the Court denies or reduces by a Final Order any amount of a Professional’s fees or expenses, then those reduced or denied amounts shall no longer constitute Accrued Professional Compensation.

4.    Accrued Professional Compensation Account: means an interest-bearing account, which shall be funded by the Debtors on the Effective Date with Cash in an amount equal to all Accrued Professional Compensation as of the Effective Date and which shall be held and maintained by the Wind Down Entity in trust for the Professionals.

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5.    Ad Hoc Group: means, collectively, certain funds managed by: Luminus Energy Partners Master Fund, Ltd; Bowery Investment Management, LLC; Simplon International Ltd; Soros Fund Management LLC; T. Rowe Price Associates, Inc.; Third Avenue Management LLC; and Western Asset Management Company.

6.    Ad Hoc Group Member: means each of the funds that are part of the Ad Hoc Group.

7.    Administrative Claim: means a Claim for any cost or expense of administration during the Chapter 11 Cases pursuant to Bankruptcy Code sections 328, 330, 363, 364(c)(1), 365, 503(b), 507(a)(2) or 1114(e)(2), including, but not limited to, (i) any actual and necessary costs and expenses incurred after the Petition Date and through the Effective Date of (a) preserving the Estates, and (b) operating and/or winding down the Debtors’ businesses, (ii) any indebtedness or obligations assumed by the Debtors in connection with the conduct and/or the wind down of their businesses, (iii) all Fee Claims, (iv) any fees or charges assessed against the Estates under section 1930 of title 28 of the United States Code, and (v) any Claim for goods delivered to the Debtors within twenty (20) days of the Petition Date and entitled to administrative priority pursuant to Bankruptcy Code section 503(b)(9).

8.    Allowed: means, (i) with respect to any Claim, (a) following the Claims Objection Deadline, any Claim (other than a General Unsecured Claim in Class 4 that a Debtor or the Wind Down Entity disputes, and which dispute shall be determined, resolved or adjudicated in the manner as if the Chapter 11 Cases had not been commenced) as to which no objection or request for estimation has been filed prior to the Claims Objection Deadline, (b) a Claim that has been expressly allowed by Final Order, (c) a Claim as to which the Debtors with the consent of the Requisite Consenting Lenders (which consent shall not be unreasonably withheld) or the Wind Down Entity agree to the amount and/or priority thereof in writing, (d) a Claim that is expressly allowed pursuant to the terms of the Plan, or (e) a Claim that is listed in the Schedules (to the extent the Debtors file Schedules in the Chapter 11 Cases) as liquidated, non-contingent, and undisputed and as to which no objection has been filed and (ii) with respect to any Equity Interest, such Equity Interest which is reflected as outstanding in the stock transfer ledger or similar register of any of the Debtors on the Record Date and is not subject to any objection or challenge. If a Claim or Equity Interest is Allowed only in part, any provisions in the Plan with respect to Allowed Claims or Allowed Equity Interests are applicable solely to the Allowed portion of such Claim or Equity Interest. For the avoidance of doubt, (a) there is no requirement to file a proof of Claim (or move the Court for allowance) to be an Allowed Claim under the Plan (provided that holders of (i) Fee Claims shall be required to file applications for allowance and payment of their Fee Claims in accordance with Article II.B hereof, (ii) holders of Specified Claims shall be required to file proofs of Claim prior to the Limited Bar Date in accordance with the Limited Bar Date Order and (iii) holders of Rejection Damage Claims shall be required to file proofs of Claim in accordance with Article VIII.D hereof) and (b) Unimpaired Claims for which there is no requirement to file a proof of Claim shall be Allowed to the same extent such Claims would be Allowed under applicable nonbankruptcy law.

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9.    Allowed Claims Reserve: means an interest-bearing account, held and maintained by the Wind Down Entity solely for the purpose of paying Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Non-Priority Tax Claims, Allowed Other Secured Claims and Allowed General Unsecured Claims not otherwise paid on the Effective Date.

10.    Amended and Restated Forbearance Agreement: means that certain Amended and Restated Forbearance Agreement, dated May 26, 2016, by and between the HERO Entities, the Administrative Agent, and certain of the First Lien Lenders.

11.    Applicable Premium: has the meaning attributed to it in the First Lien Credit Agreement.

12.    Ballots: means each of the ballots distributed prior to the commencement of the Chapter 11 Cases with the Disclosure Statement and the other solicitation materials to holders of First Lien Claims and HERO Common Stock.

13.    Bankruptcy Code: means title 11 of the United States Code, 11 U.S.C. §§ 101-1532, as in effect with respect to the Chapter 11 Cases.

14.    Bankruptcy Rules: means the Federal Rules of Bankruptcy Procedure as promulgated by the United States Supreme Court under section 2075 of title 28 of the United States Code, and local rules of the Court, as the context may require, as in effect with respect to the Chapter 11 Cases.

15.    Business Day: means any day on which commercial banks are open for business, and not authorized to close, in New York, New York, except any day designated as a legal holiday by Bankruptcy Rule 9006(a).

16.    Cash: means legal tender of the United States of America.

17.    Cash Collateral Order: means the interim and final orders authorizing the Debtors to use cash collateral, and granting adequate protection to the First Lien Lenders or otherwise in form and substance reasonably acceptable to the Debtors, the Requisite Consenting Lenders and the First Lien Agent, as such may be amended or modified from time to time in accordance with the terms thereof or by stipulation among the Debtors, the Requisite Consenting Lenders and the First Lien Agent and approval thereof by the Bankruptcy Court.

18.    Causes of Action: means any and all claims, causes of actions, cross-claims, counterclaims, third-party claims, indemnity claims, reimbursement claims, contribution claims, defenses, demands, rights, actions, debts, damages, judgments, remedies, Liens, indemnities, guarantees, suits, obligations, liabilities, accounts, offsets, recoupments, powers, privileges, licenses, and franchises of any kind or character whatsoever, known or unknown, contingent or noncontingent, matured or unmatured, suspected or unsuspected, disputed or undisputed, foreseen or unforeseen, direct or indirect, choate or inchoate, whether arising before, on, or after the Petition Date, including through the Effective Date, in contract or in tort, in law or in equity, or pursuant to any other theory of law. For the avoidance of doubt, the term “Causes of Action” shall include: (i) all rights of setoff, counterclaim, or recoupment and claims on contracts or for breaches of duties imposed by law or in equity; (ii) the right to

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object to Claims; (iii) all claims pursuant to Bankruptcy Code sections 362, 510, 542, 543, 544 through 550, 552 or 553; (iv) all claims and defenses, including fraud, mistake, duress, and usury and any other defenses set forth in Bankruptcy Code section 558; and (v) any state law fraudulent transfer claims.

19.    Chapter 11 Cases: means the cases commenced by the Debtors under chapter 11 of the Bankruptcy Code.

20.    Claim: means a “claim” against any Debtor, as such term is defined in Bankruptcy Code section 101(5).

21.    Claims and Noticing Agent: means Prime Clerk LLC, employed by the Debtors as the official claims, noticing and balloting agent in the Chapter 11 Cases pursuant to an order of the Court.

22.    Claims Objection Deadline: means the first Business Day that is the later of (i) one-hundred fifty (150) days after the Effective Date or (ii) such other later date the Court may establish upon a motion by the Debtors or the Wind Down Entity. 

23.    Class: means a category of Claims or Equity Interests classified under Article III of the Plan pursuant to Bankruptcy Code section 1122.

24.    Class A Wind Down Entity Interests: means interests in the Wind Down Entity distributed to holders of Allowed First Lien Claims under the Plan in the event the Plan is accepted by Class 7 HERO Common Stock, which shall represent 85% of the Acceptance Wind Down Entity Interests.

25.    Class B Wind Down Entity Interests: means interests in the Wind Down Entity distributed to holders of HERO Common Stock under the Plan in the event the Plan is accepted by Class 7 HERO Common Stock, which shall represent 15% of the Acceptance Wind Down Entity Interests.

26.    Confirmation: means the entry, within the meaning of Bankruptcy Rules 5003 and 9021, of the Confirmation Order on the docket of the Chapter 11 Cases by the Court.

27.    Confirmation Date: means the date upon which Confirmation occurs.

28.    Confirmation Hearing: means the hearing held by the Court pursuant to Bankruptcy Rule 3020(b)(2) and Bankruptcy Code section 1128, including any adjournments thereof, at which the Court will consider confirmation of the Plan, the adequacy of information in the Disclosure Statement and other related matters.

29.    Confirmation Order: means the order entered by the Court confirming the Plan pursuant to Bankruptcy Code section 1129, which order shall be substantially consistent in all respects with the terms and conditions of the Restructuring Support Agreement and otherwise in form and substance reasonably acceptable to the Debtors and the Requisite Consenting Lenders.

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30.    Consenting First Lien Lenders: means, collectively and subject to the terms of the Restructuring Support Agreement including, without limitation section 16 thereof, the holders of First Lien Claims that are party to the Restructuring Support Agreement.

31.    Consenting First Lien Lender: means each Consenting First Lien Lender.

32.    Consummation: means the occurrence of the Effective Date.

33.    Court: means (i) the United States Bankruptcy Court for the District of Delaware, (ii) if there is no reference pursuant to section 157 of title 28 of the United States Code, the United States District Court for the District of Delaware, and (iii) any other court having jurisdiction over the Chapter 11 Cases or proceedings arising therein.

34.    Cure Claim: means a Claim in an amount equal to all unpaid monetary obligations under an Executory Contract or Unexpired Lease assumed by the Debtors pursuant to Bankruptcy Code section 365, to the extent such obligations are enforceable under the Bankruptcy Code and applicable nonbankruptcy law. Any Cure Claim to which the holder thereof disagrees with the priority and/or amount thereof as determined by the Debtors (with the reasonable consent of the Requisite Consenting Lenders) shall be deemed a Disputed Claim under the Plan.

35.    Debtors: means, collectively, each of the Debtor Subsidiaries and HERO.

36.    Debtor Subsidiaries: means, collectively, each of the following: Cliffs Drilling Company; Cliffs Drilling Trinidad LLC; FDT LLC; FDT Holdings LLC; Hercules Drilling Company, LLC; Hercules Offshore Services LLC; Hercules Offshore Liftboat Company LLC; HERO Holdings, Inc.; SD Drilling LLC; THE Offshore Drilling Company; THE Onshore Drilling Company; TODCO Americas Inc.; and TODCO International Inc.

37.    Definitive Documents: means, pursuant to the Restructuring Support Agreement: (i) the Disclosure Statement, the motion seeking approval of the Disclosure Statement, the Plan, the Confirmation Order, the motion seeking entry of the Confirmation Order, the plan supplement and its exhibits, the Solicitation Procedures, the motion seeking the entry of the Cash Collateral Order, and each of the organizational, governance and exit credit documents contemplated by the Plan 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 Plan Term Sheet and which contain terms and conditions substantially consistent in all respects with the Plan 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.

38.    Disclosure Statement: means the Disclosure Statement for Debtors’ Joint Prepackaged Chapter 11 Plan, dated May 31, 2016, which was included with the solicitation materials distributed prior to the commencement of the Chapter 11 Cases to holders of First Lien Claims and HERO Common Stock.

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39.    Disputed: means, with respect to any Claim or Equity Interest, other than a Claim or Equity Interest that has been Allowed pursuant to the Plan or a Final Order, a Claim or Equity Interest (i) that is listed in the Schedules (to the extent the Debtors file Schedules in the Chapter 11 Cases) as unliquidated, contingent, or disputed, and as to which no request for payment or proof of Claim or Equity Interest has been filed, (ii) as to which a proper request for payment or proof of Claim or Equity Interest has been filed, but with respect to which an objection or request for estimation has been filed and has not been withdrawn or determined by a Final Order, (iii) that is disputed in accordance with the provisions of the Plan, or (iv) that is otherwise subject to a dispute that is being adjudicated, determined, or resolved in accordance with applicable law, pursuant to Article VI.A.3 of the Plan.

40.    Disputed Claims Reserve: means one or more interest-bearing accounts, held and maintained by the Wind Down Entity, containing Cash in an amount or amounts reasonably acceptable to the Debtors and the Requisite Consenting Lenders and approved by the Court, solely for the purpose of paying Priority Tax Claims, Non-Priority Tax Claims, Other Secured Claims and General Unsecured Claims that are Disputed or not yet Allowed as of the Effective Date and not paid prior to the Effective Date or as part of the distributions provided for under the Plan, but that are or become Allowed after the Effective Date, and the administration thereof.

41.    Effective Date: means the date which is the first Business Day selected by the Debtors, upon consultation with the Requisite Consenting Lenders, on which (a) all of the conditions to the occurrence of the Effective Date specified in Article IX.A of the Plan have been satisfied or waived in accordance with Article IX.B of the Plan and (b) no stay of the Confirmation Order is in effect.

42.    Entity: means an “entity” as such term is defined in Bankruptcy Code section 101(15).

43.    Equity Committee: means the official committee of equity security holders appointed by the U.S. Trustee pursuant to Bankruptcy Code section 1102(a), as it may be reconstituted from time to time.

44.    Equity Interest: means any “equity security” (as such term is defined in Bankruptcy Code section 101(16)) in any of the Debtors, including any issued and outstanding or authorized but unissued share of common stock, preferred stock, or other instrument evidencing an ownership interest in one of the Debtors, whether or not transferable, and any option, warrant, or right, contractual or otherwise, to acquire any such interest in any of the Debtors (including any stock-based performance award, incentive stock option, restricted stock, restricted stock unit, stock appreciation right, dividend equivalent, or other stock based award) that existed immediately prior to the Effective Date, and any Claim against any of the Debtors subordinated pursuant to Bankruptcy Code section 510(b).

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45.    Escrow Agent: means Wilmington Trust, National Association, and its successors and assigns under the Escrow Agreement.

46.    Escrow Release Payment: means payments made pursuant to the Amended and Restated Forbearance Agreement by the Escrow Agent to the First Lien Agent to prepay amounts due under the First Lien Credit Agreement pursuant to Section III(d) of the Escrow Agreement and Section 2.10(a)(i) of the First Lien Credit Agreement.

47.    Escrow Agreement: means that certain escrow agreement substantially in the form attached as Exhibit G to the First Lien Credit Agreement, among Hercules Offshore, Inc., the First Lien Agent for the benefit of the First Lien Lenders and the Escrow Agent.

48.    Estate: means the estate of any Debtor created in the applicable Debtor’s Chapter 11 Case pursuant to Bankruptcy Code section 541.

49.    Exchange Act: means the Securities Exchange Act of 1934, as amended.

50.    Exculpated Parties: means (i) each Debtor and (ii) the current and former officers, directors, professionals, advisors, accountants, attorneys, investment bankers, consultants, employees, agents and other representatives of the Debtors.

51.    Executives: means John Rynd, chief executive officer of HERO, Troy Carson, as chief financial officer of HERO, Beau Thompson, as general counsel of HERO, Son Vann, as treasurer and vice president of corporate development of HERO, Charles Lestage, as deputy general counsel and chief administrative officer of HERO, and John Wasmuth, as vice president of tax of HERO.

52.    Executory Contract: means a contract to which one or more Debtors is a party that is subject to assumption or rejection under Bankruptcy Code section 365, including, but not limited to, each Existing Benefits Agreement.

53.    Existing Benefits Agreement: means each and collectively all employment, retirement, severance, indemnification, and similar or related agreements, arrangements, plans and policies with the members of the Debtors’ management team or directors as of the Petition Date, other than the Debtors’ 401(k) plan.

54.    Fee Claim: means a Claim for Accrued Professional Compensation.

55.    Final Order: means an order or judgment of the Court or any other court or adjudicative body of competent jurisdiction that has not been modified, amended, reversed, vacated, or stayed, and as to which (a) the time to appeal, petition for certiorari, or move for a new trial, stay, reargument, or rehearing has expired and as to which no appeal, petition for certiorari, or motion for new trial, stay, reargument, or rehearing shall then be

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pending or (b) if an appeal, writ of certiorari, new trial, stay, reargument, or rehearing thereof has been sought, such order or judgment of the Court shall have been affirmed by the highest court to which such order was appealed, or certiorari shall have been denied, or a new trial, stay, reargument, or rehearing shall have been denied or resulted in no modification of such order, and the time to take any further appeal, petition for certiorari, or move for a new trial, stay, reargument, or rehearing shall have expired, as a result of which such order shall have become final in accordance with Bankruptcy Rule 8002; provided that the possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure, Bankruptcy Rule 9024 or Bankruptcy Code Section 502(j), or any analogous rule under the Bankruptcy Rules, may be filed relating to such order, shall not cause an order not to be a Final Order.

56.    First Lien Agent: means Jefferies Finance LLC, as administrative agent and collateral agent under the First Lien Credit Agreement, and its successors and assigns.

57.    First Lien Claim Objection: means the Objection to First Lien Claims [D.I. 252, 255] filed by the Equity Committee in the Chapter 11 Cases.

58.    First Lien Claim Reduction Amount: means $32,500,000.

59.    First Lien Claims: means any and all Claims of the First Lien Agent and the First Lien Lenders against any of the Debtors arising under or relating to the First Lien Credit Agreement, including, but not limited to, the First Lien Guaranty Claims and the Applicable Premium.

60.    First Lien Credit Agreement: means that certain Credit Agreement, dated as of November 6, 2015, among HERO, as borrower, the First Lien Guarantors, as guarantors, the First Lien Agent, and the First Lien Lenders (as amended, supplemented, or modified from time to time) and any and all other loan documents evidencing obligations of HERO and the First Lien Guarantors arising thereunder, including any and all guaranty, security and collateral documents.

61.    First Lien Guarantor: means any Debtor Subsidiary or Non-Debtor Subsidiary that has guaranteed the obligations of HERO under the First Lien Credit Agreement.

62.    First Lien Guaranty Claims: means any and all Claims of the First Lien Lenders against any First Lien Guarantor that is a Debtor Subsidiary arising under or relating to the First Lien Credit Agreement.

63.    First Lien Lenders: means the financial institutions or other Persons that are lenders under the First Lien Credit Agreement.

64.    Forbearance Amendment: means each and collectively, that certain (i) Forbearance Agreement and First Amendment to Credit Agreement, (ii) Amendment No. 1 to Forbearance Agreement and First Amendment to Credit Agreement, and (iii) Amended and Restated Forbearance Agreement entered into between the Debtors, the First Lien Agent and certain First Lien Lenders prior to the Petition Date.

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65.    General Unsecured Claim: means any Claim that is not Secured or entitled to priority under the Bankruptcy Code or an order of the Court, including any Rejection Damage Claim, other than (i) an Intercompany Claim or (ii) any Claim against any of the Debtors subordinated pursuant to Bankruptcy Code section 510(b).

66.    Governmental Unit: has the meaning set forth in Bankruptcy Code section 101(27).

67.    HERO: means Hercules Offshore, Inc.

68.    HERO Common Stock: means the approximately 20 million of outstanding common shares that are publicly traded on the NASDAQ under the HERO ticker.

69.    HERO Entities: means, collectively, HERO and the First Lien Guarantors.

70.    HERO Equity Interest: means any Equity Interest in HERO.

71.    Impaired: means, when used with respect to Claims or Equity Interests, Claims or Equity Interests that are “impaired” within the meaning of Bankruptcy Code section 1124.

72.    Initial Wind Down Funding Amount: means, after all payments required to be made on the Effective Date to (i) the holders of Allowed Claims, (ii) fund the Reserves and (iii) if applicable, pay the Shareholder Effective Date Cash Distribution, 100% of the Debtors’ remaining cash on hand as of the Effective Date after taking into account all payments required to be made on the Effective Date; provided that the Initial Wind Down Funding Amount shall not exceed $85 million, and any Cash on hand of the HERO Entities in excess of such amount shall be applied first to fund the Rejection Shareholder Cash Distribution on the Effective Date and then to pay down the First Lien Claims (and the original principal amount of the Lender Wind Down Entity Claim) on the Effective Date; and provided, further, that, to the extent Class 7 HERO Common Stock has voted to accept the Plan and payments on the First Lien Claims shall have reached $420 million (inclusive of the Escrow Release Payment and any payments of principal or Applicable Premium under the First Lien Credit Agreement previously made to the First Lien Lenders during the Chapter 11 Cases, but exclusive of interest and periodic adequate protection payments other than adequate protection payments designed as principal payments or payments of Applicable Premium) and the Shareholder Supplemental Cash Distribution Reserve has not already been established, such excess shall be used to fund the Shareholder Supplemental Cash Distribution until such distribution is satisfied in full and thereafter distributions shall be made in accordance with the Wind Down Entity Waterfall.

73.    Insured Claim: means any Claim or portion of a Claim that is, or may be, insured under any of the Debtors’ insurance policies.

74.    Intercompany Claim: means any Claim held by any Debtor against any other Debtor.

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75.    Intercompany Interests: means any Equity Interest held by any Debtor or any Non-Debtor Subsidiary but excluding HERO Equity Interests.

76.    Lender Wind Down Claim: means the Acceptance Lender Wind Down Claim or the Rejection Lender Wind Down Claim, as applicable, based on the acceptance or rejection of the Plan by Class 7 HERO Common Stock.

77.    Lien: has the meaning set forth in Bankruptcy Code section 101(37).

78.    Limited Bar Date: means a bar date of on or before July 29, 2016, requested by the Debtors pursuant to a separate motion and established by the Court pursuant to the Limited Bar Date Order for filing proofs of Claim in respect of Specified Claims in the Chapter 11 Cases, which shall be in form and substance reasonably acceptable to the Debtors and the Requisite Consenting Lenders.

79.    Limited Bar Date Order: means an order of the Court entered in the Chapter 11 Cases, pursuant to Bankruptcy Rule 3003(c), (i) establishing a bar date for filing proofs of Claim in respect of Specified Claims in the Chapter 11 Cases; (ii) establishing ramifications for failure to comply therewith; (iii) approving a proof of Claim form and notice of the Limited Bar Date; and (iv) approving notice procedures.

80.    Mediation: means the mediation held pursuant to the Order Appointing Mediator and Governing Mediation Procedure dated August 17, 2016 [D.I. 319].

81.    Mediation Settlement: means the settlement reached in connection with the Mediation and pursuant to Bankruptcy Rule 9019 among the Debtors and certain of the First Lien Lenders with respect to any and all Causes of Action that may be asserted by the Debtors or on behalf of the Estates against any holder of the First Lien Claims pursuant to which the amount of the Rejection Lender Wind Down Claim will be reduced by the First Lien Claim Reduction Amount, and subject to and upon the occurrence of the Effective Date, the First Lien Claims will be subordinated in priority of payment to the HERO Common Stock to the extent, and only to the extent, necessary to provide for payment of the Rejection Shareholder Cash Distribution.    

82.    Non-Debtor Subsidiaries: means, collectively: TODCO Trinidad Ltd.; Cliffs Drilling (Barbados) Holdings SRL; Cliffs Drilling (Barbados) SRL; Cliffs Drilling Trinidad Offshore Limited; Hercules Offshore Holdings, Ltd.; Hercules Discovery Ltd.; Hercules Offshore Middle East Ltd.; Hercules Offshore Arabia Ltd.; Hercules Oilfield Services Ltd.; Hercules International Offshore, Ltd.; Hercules Offshore (Nigeria) Limited; Hercules International Management Company Ltd.; Hercules International Drilling Ltd.; Hercules Offshore Labuan Corporation; Hercules Tanjung Asia Sdn Bhd; Hercules Britannia Holdings Limited; Hercules Offshore UK Limited; Hercules Offshore de Mexico S de R L de CV; Discovery Offshore (Gibraltar) Limited; Discovery North Sea Ltd.; Discovery Offshore Services Ltd.; Hercules North Sea Driller Limited; Hercules Liftboat Company, LLC; Hercules Asset Management Ltd.; Hercules Offshore International, LLC; Hercules British Offshore Limited; Hercules International Holdings, Ltd.; and Hercules North Sea, Ltd.

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83.    Non-Debtor Subsidiary Interest: means any equity interest in any of the Non-Debtor Subsidiaries, including any issued and outstanding or authorized but unissued share of common stock, preferred stock, or other instrument evidencing an ownership interest in one of the Non-Debtor Subsidiaries, whether or not transferable, and any option, warrant, or right, contractual or otherwise, to acquire any such interest in any of the Non-Debtor Subsidiaries that existed immediately prior to the Effective Date.

84.    Other Equity Interest: means any HERO Equity Interests other than the HERO Common Stock.

85.    Other Secured Claim: means any Claim that is Secured, other than a First Lien Claim.

86.    Person: means any individual, corporation, partnership, limited liability company, association, indenture trustee, organization, joint stock company, joint venture, estate, trust, Governmental Unit or any political subdivision thereof, or any other Entity.

87.    Petition Date: means the date on which the Debtors commenced the Chapter 11 Cases.

88.    Plan: means this chapter 11 plan, together with all addenda, exhibits, schedules, or other attachments, if any, including the Plan Supplement, each of which is incorporated herein by reference, and as the same may be amended, modified, or supplemented from time to time in accordance with the terms hereof.

89.    Plan-Related Action: means any act taken or omitted to be taken in connection with, or arising from or relating in any way to, the Chapter 11 Cases or the wind down of the Debtors’ businesses and operations, including but not limited to, (a) negotiation, formulation and preparation of the Restructuring Support Agreement; (b) the management and operation of the Debtors’ businesses and the discharge of their duties under the Bankruptcy Code during the pendency of the Chapter 11 Cases; (c) implementation of any of the transactions provided for, or contemplated in, the Plan or the Plan Supplement; (d) any action taken in the negotiation, formulation, development, proposal, solicitation, disclosure, Confirmation, or implementation of the Plan or Plan Supplement; (e) formulating, negotiating, preparing, disseminating, implementing, administering, confirming and/or effecting the Restructuring Support Agreement, the Disclosure Statement, the Plan, the Plan Supplement, the execution and issuance, as applicable, of the documents evidencing the Lender Wind Down Claim, the issuance of Wind Down Entity Interests in connection with the Plan, and any related contract, instrument, release or other agreement or document created or entered into in connection therewith (including the solicitation of votes for the Plan and other actions taken in furtherance of Confirmation and Consummation of the Plan); (f) the administration of the Plan or the assets and property to be distributed pursuant to the Plan; (g) any other prepetition or postpetition act taken or omitted to be taken in connection with or in contemplation of the bankruptcy of the Debtors; and (h) the preparation and filing of the Chapter 11 Cases.

90.    Plan Scheduling Motion: means the motion filed by the Debtors, substantially contemporaneously with the filing of the Chapter 11 Cases, seeking entry of an

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order (a) scheduling the Confirmation Hearing, (b) approving the form and notice of the Confirmation Hearing, (c) establishing procedures for objections to the Solicitation Procedures, the Disclosure Statement and the Plan, (d) approving Solicitation Procedures, and (e) granting related relief.

91.    Plan Scheduling Order: means the order granting the Plan Scheduling Motion entered by the Court.

92.    Plan Supplement: means the compilation of documents and forms of documents, schedules, and exhibits to the Plan to be filed with the Court on notice to parties-in-interest, including, but not limited to, the following, each of which must be substantially consistent in all respects with the terms and conditions of the Restructuring Support Agreement and otherwise in form and substance reasonably acceptable to the Debtors and satisfactory to the Requisite Consenting Lenders: (i) the Wind Down Entity Agreement; (ii) the identity and affiliations of the members of the Wind Down Entity Board; (iii) the documents evidencing the Lender Wind Down Claim; (iv) the identity of the Wind Down Entity Representative and the terms of the Wind Down Entity Representative’s compensation; and (v) the Schedule of Assumed Executory Contracts and Unexpired Leases. The Debtors shall file forms of the materials comprising the Plan Supplement no later than the Plan Supplement Filing Date.

93.    Plan Supplement Filing Date: means the date that is five (5) days prior to the deadline to object to the confirmation of the Plan.

94.    Plan Term Sheet: means that certain Hercules Offshore, Inc., et al. Plan Term Sheet attached as Exhibit A to the Restructuring Support Agreement.

95.    Post-Effective Date Assets: means all of the remaining assets of the Debtors’ Estates on the Effective Date, including, but not limited to, the Wind-Down Funding Amount and Non-Debtor Subsidiary Interests, which assets shall be transferred to the Wind Down Entity on the Effective Date of the Plan.

96.    Priority Non-Tax Claims: means any Claim other than an Administrative Claim or a Priority Tax Claim that is entitled to priority in payment as specified in Bankruptcy Code section 507(a).

97.    Priority Tax Claim: means any Secured or unsecured Claim of the kind entitled to priority in payment as specified in Bankruptcy Code sections 502(i) and 507(a)(8).

98.    Professional: means any professional employed or retained in the Chapter 11 Cases pursuant to Bankruptcy Code sections 327, 328, 363 or 1103.

99.    Pro Rata: means, with respect to (a) any First Lien Claim, the proportion that the amount of such Claim bears to the aggregate amount of all First Lien Claims, (b) any HERO Common Stock, the proportion that such HERO Common Stock bears to the aggregate amount of all HERO Common Stock and (c) any Wind Down Entity Interest, the proportion that such Wind Down Entity Interests bears to the aggregate amount of all Wind Down Entity Interests.

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100.    Record Date: means, for purposes of making distributions under the Plan on the Effective Date, (i) the Confirmation Date, for holders of Claims or (ii) the Effective Date, for holders of Equity Interests.

101.    Reinstated: means, with respect to a Claim, (a) in accordance with Bankruptcy Code section 1124(1), being treated such that the legal, equitable, and contractual rights to which such Claim entitles its holder are left unaltered, or (b) if applicable under Bankruptcy Code section 1124: (i) having all prepetition and postpetition defaults with respect thereto other than defaults relating to the insolvency or financial condition of the Debtors or their status as debtors under the Bankruptcy Code cured, (ii) having its maturity date reinstated, (iii) compensating the holder of such Claim for damages incurred as a result of its reasonable reliance on a provision allowing the Claim’s acceleration, and (iv) not otherwise altering the legal, equitable and contractual rights to which the Claim entitles the holder thereof.

102.    Rejection Damage Claims: means Claims for damages arising from the rejection of Executory Contracts or Unexpired Leases.

103.    Rejection Lender Wind Down Claim: means a non-interest bearing senior claim against the Wind Down Entity in the amount of $546.5 million, plus accrued and unpaid interest on the First Lien Claims as of the Effective Date, less the Escrow Release Payment and any payments of principal or Applicable Premium under the First Lien Credit Agreement previously made to the First Lien Lenders during the Chapter 11 Cases.

104.    Rejection Shareholder Cash Distribution: means an aggregate distribution of $15,000,000 in Cash to be made to holders of Class 7 HERO Common Stock on the Effective Date or as soon as reasonably practicable thereafter upon the Wind Down Entity Board determining that, through the proceeds of assets sales or the Claims reconciliation process, sufficient Cash is available to fund the Wind Down Entity and make such distribution.

105.    Rejection Wind Down Entity Interest: means, in the event Class 7 HERO Common Stock votes to reject the Plan, the interests in the Wind Down Entity distributed to holders of HERO Common Stock under the Plan, which shall represent 100% of such interests.

106.    Released Parties: means each of: (a) the Debtors, (b) the Wind Down Entity; (c) the Non-Debtor Subsidiaries; (d) the Ad Hoc Group; (e) the Ad Hoc Group Members; (f) the Consenting First Lien Lenders; (g) each Consenting First Lien Lender; (h) the First Lien Agent; (i) the First Lien Lenders; (j) each holder of HERO Common Stock that is also a Consenting First Lien Lender; (k) with respect to each of the foregoing Entities in clauses (a) through (j), such Entity’s predecessors, successors and assigns, current and former affiliates, subsidiaries, funds, portfolio companies, and management companies; and (l) with respect to each of the foregoing Persons in clauses (a) through (k), each of their respective current and former officers, directors, professionals, advisors, accountants, attorneys, investment bankers, consultants, employees, agents and other representatives (each solely in their capacity as such).

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107.    Releasing Parties: means each of: (a) the Debtors, (b) the Wind Down Entity; (c) the Non-Debtor Subsidiaries; (d) the Ad Hoc Group; (e) the Ad Hoc Group Members; (f) the Consenting First Lien Lenders; (g) each Consenting First Lien Lender; (h) the First Lien Agent; (i) the First Lien Lenders; (j) each holder of HERO Common Stock that is also a Consenting First Lien Lender; (k) with respect to each of the foregoing Entities in clauses (a) through (j), such Entity’s predecessors, successors and assigns, current and former affiliates, subsidiaries, funds, portfolio companies, and management companies; and (l) with respect to each of the foregoing Persons in clauses (a) through (k), each of their respective current and former officers, directors, professionals, advisors, accountants, attorneys, investment bankers, consultants, employees, agents and other representatives (each solely in their capacity as such).

108.    Requisite Consenting Lenders: means First Lien Lenders holding at least 50.1% of the outstanding, aggregate principal amounts owing under the First Lien Credit Agreement.

109.    Reserves: means, collectively, the Accrued Professional Compensation Account, the Allowed Claims Reserve and the Disputed Claims Reserve.

110.    Restructuring: means a transaction that will effectuate a financial restructuring of the HERO Entities’ capital structure and financial obligations.

111.    Restructuring Support Agreement: means the agreement, including all exhibits and supplements annexed thereto and including, without limitation, the Plan Term Sheet, dated as of May 26, 2016 (as it may be amended, supplemented or otherwise modified from time to time) among the HERO Entities and the Consenting First Lien Lenders, a copy of which is attached as Exhibit B to the Disclosure Statement.

112.    Schedule of Assumed Executory Contracts and Unexpired Leases: means the schedule of Executory Contracts and/or Unexpired Leases to be assumed by the Debtors pursuant to the Plan in the form filed as part of the Plan Supplement (as the same may be amended, modified, or supplemented from time to time), which shall be in form and substance reasonably acceptable to the Debtors and the Requisite Consenting Lenders.

113.    Schedules: means, to the extent the Court has not waived the requirement to file the Schedules, the schedules of assets and liabilities, statements of financial affairs, filed with the Court by the Debtors, including any amendments or supplements thereto.

114.    Secured: means when referring to a Claim: (a) secured by a Lien on property in which any of the Estates has an interest, which Lien is valid, perfected, and enforceable pursuant to applicable law or by reason of a Court order, or that is subject to setoff pursuant to Bankruptcy Code section 553, to the extent of the value of the Claim holder’s interest in such Estate’s interest in such property or to the extent of the amount subject to setoff, as applicable, as determined pursuant to Bankruptcy Code section 506(a) or (b) otherwise Allowed pursuant to the Plan as a Claim that is Secured.

115.    Securities Act: means the Securities Act of 1933, as amended.

116.    Shareholder Effective Date Cash Distribution: means Cash in an amount equal to $12.5 million, subject to reduction by $450,000 for each full calendar day following the seventy-second (72nd) day after the Petition Date that the Confirmation Order is

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not a Final Order to the extent such delay is the result of actions taken directly or indirectly by holders of HERO Equity Interests, their representatives, and/or any other persons (including any HERO Entity) acting in concert with the holders of HERO Equity Interests, as reasonably determined by the Debtors and Requisite Consenting Lenders.

117.    Shareholder Supplemental Cash Distribution: means, if Class 7 HERO Common Stock votes to accept the Plan, the next $15 million in Cash that will be distributed to holders of HERO Common Stock or Class B Wind Down Entity Interests on the later of (i) the Effective Date and (ii) after $420 million (in the aggregate) has been paid to the First Lien Lenders and holders of the Acceptance Lender Wind Down Claim on account of (a) the First Lien Claims (inclusive of the Escrow Release Payment and any payments of principal or Applicable Premium under the First Lien Credit Agreement previously made to the First Lien Lenders during the Chapter 11 Cases, but exclusive of interest and periodic adequate protection payments other than adequate protection payments designated as principal payments or payments of Applicable Premium), and (b) the Acceptance Lender Wind Down Claim.

118.    Shareholder Supplemental Cash Distribution Reserve: means, in the event that $420 million has been paid on account of the First Lien Claims (inclusive of the Escrow Release Payment and any payments of principal or Applicable Premium under the First Lien Credit Agreement previously made to the First Lien Lenders during the Chapter 11 Cases, but exclusive of interest and periodic adequate protection payments other than adequate protection payments designated as principal payments or payments of Applicable Premium), and subject to the use of the proceeds of sales of assets owned by the Non-Debtor Subsidiaries to first satisfy the outstanding liabilities of such Non-Debtor Subsidiaries, $15 million in proceeds of asset sales or excess cash above the Initial Wind Down Entity Funding Amount, as applicable, to be reserved by the Debtors for payment of the Shareholder Supplemental Cash Distribution in the event that Class 7 HERO Common Stock votes to accept the Plan.

119.    Solicitation Parties: means each of the following in its capacity as such: (a) the Debtors, (b) the Consenting First Lien Lenders and (c) the Professionals of the Debtors and the legal and financial advisors to the Consenting First Lien Lenders.

120.    Solicitation Procedures: means the procedures with respect to the solicitation and tabulation of votes to accept or reject the Plan as described in the Plan Scheduling Motion, which shall be substantially consistent in all respects with the terms and conditions of the Restructuring Support Agreement and otherwise in form and substance reasonably acceptable to the Debtors and the Requisite Consenting Lenders.

121.    Specified Claims: means certain specific contingent and unliquidated claims, including, but not limited to, any claims asserting liability for personal injury, and claims arising from a single occurrence or transaction in an amount in excess of $300,000, which claims shall be subject to the Limited Bar Date Order; provided, however, that the Specified Claims shall specifically not include (i) claims of any Tax Authorities; (ii) Rejection Damages Claims; or (iii) any claims of the Executives 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

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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.

122.    Standing Motion: means the Motion of the Official Committee of Equity Security Holders for Leave, Standing and Authority to Prosecute Claims on Behalf of the Debtors’ Estates and for Related Relief [D.I. 253, 256] filed by the Equity Committee in the Chapter 11 Cases.

123.    Tax Authority: means a federal, state, local or foreign government or agency, instrumentality or employee thereof, or a court or other body charged with the administration of any law relating to Taxes.

124.    Tax Code: means the Internal Revenue Code of 1986, as amended.

125.    Taxes: means all (i) federal, state, local or foreign taxes, including, without limitation, all net income, alternative minimum, net worth or gross receipts, capital, value-added, franchise, profits and estimated taxes and (ii) interest, penalties, fines, additions to tax or additional amounts imposed by any Tax Authority or paid in connection with any item described in clause (i) hereof.

126.    Unscheduled Specified Claims: means all Specified Claims that are not estimated by the Debtors in the limited Schedules filed by the Debtors in the Chapter 11 Cases.

127.    Unexpired Lease: means a lease to which one or more of the Debtors is a party that is subject to assumption or rejection under Bankruptcy Code section 365.

128.    Unimpaired: means any Class of Claims or Equity Interests that is not Impaired under the Plan within the meaning of Bankruptcy Code section 1124.

129.    U.S. Trustee: means the United States Trustee for the District of Delaware.

130.    Voting Deadline: means, (a) for holders of First Lien Claims, June 3, 2016 at 4:00 p.m. (prevailing Eastern Time), the deadline for holders of First Lien Claims submitting Ballots to either accept or reject the Plan in accordance with Bankruptcy Code section 1126 under the Solicitation Procedures and (b) for holders of HERO Common Stock, June 28, 2016 at 4:00 p.m. (prevailing Eastern Time), the deadline for holders of HERO Common Stock submitting Ballots to either accept or reject the Plan in accordance with Bankruptcy Code section 1126 under the Solicitation Procedures.

131.    Voting Record Date: means May 23, 2016.

132.    Wind Down Entity: means the liquidating trust or other legal Entity (as determined by the Debtors and the Requisite Consenting Lenders in their reasonable discretion in accordance with the terms of the Restructuring Support Agreement) established on

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the Effective Date to, among other things: (i) monetize the Post-Effective Date Assets and wind down the remainder of the Debtors’ businesses and operations in a controlled, efficient and value-maximizing manner; (ii) enter into and issue, as applicable, the documents evidencing the Lender Wind Down Claim, (iii) issue the Wind Down Entity Interests in accordance with the Plan; (iv) make distributions in accordance with the Plan; (v) oversee and administer (a) the termination of the Debtors’ qualified 401(k) retirement plans and any related trusts and the distribution of such plans’ assets to participants and for fulfilling statutory and regulatory requirements related to such plans and (b) any statutory and regulatory requirements related to any terminated Debtor employee benefit plans; and (vi) perform such other services as are contemplated by the Plan and the Wind Down Entity Agreement.

133.    Wind Down Entity Agreement: means the organizational or governance documents setting forth the terms and conditions governing the Wind Down Entity, which shall be substantially consistent in all respects with the terms and conditions of the Restructuring Support Agreement and the Plan and otherwise reasonably acceptable to the Debtors and the Requisite Consenting Lenders.

134.    Wind Down Entity Board: means the governing body of the Wind Down Entity, as initially comprised as set forth in the Plan Supplement and as comprised thereafter in accordance with the terms of the Wind Down Entity Agreement. The Wind Down Entity Board, the initial members of which shall be identified in the Plan Supplement, will consist of three members, each of which will be designated in accordance with the terms of the Restructuring Support Agreement and the Plan Term Sheet.

135.    Wind Down Entity Budget: means the budget, which shall not be in excess of $85 million, for (i) the reconciliation of any claims for which funds have been reserved in the Disputed Claims Reserve, (ii) the monetization of the Post-Effective Date Assets, (iii) the wind down of the HERO Entities’ businesses and operations and (iv) accomplishing all other objectives of the Wind Down Entity.

136.    Wind Down Entity Interests: means the Acceptance Wind Down Entity Interests or the Rejection Wind Down Entity Interests, as applicable, based on the acceptance or rejection of the Plan by Class 7 HERO Common Stock.

137.    Wind Down Entity Representative: means the Person or firm, which may be a liquidating trustee, to be appointed by Requisite Consenting Lenders in their sole discretion to manage the day-to-day operations of Wind Down Entity pursuant to the Plan and the Wind Down Entity Agreement; provided, that if the Class 7 HERO Common Stock votes to reject the Plan, the Wind Down Entity Representative shall be reasonably acceptable to the Debtors.

138.    Wind Down Entity Waterfall: has the meaning ascribed to such term in Article IV.B.12 of the Plan.

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B. Interpretation, Application of Definitions, and Rules of Construction.

Except as expressly provided herein, each capitalized term used in the Plan shall either have (i) the meaning ascribed to such term in Article I of the Plan or (b) if such term is not defined in Article I of the Plan, but such term is defined in the Bankruptcy Code or Bankruptcy Rules, the meaning ascribed to such term in the Bankruptcy Code or the Bankruptcy Rules, as the case may be. Meanings of capitalized terms shall be equally applicable to both the singular and plural forms of such terms. The words “herein,” “hereof,” and “hereunder” and other words of similar import refer to the Plan as a whole (and, for the avoidance of doubt, the Plan Supplement) and not to any particular section or subsection in the Plan unless expressly provided otherwise. The words “includes” and “including” are not limiting and mean that the things specifically identified are set forth for purposes of illustration, clarity or specificity and do not in any respect qualify, characterize or limit the generality of the class within which such things are included. Captions and headings to articles, sections and exhibits are inserted for convenience of reference only, are not a part of the Plan, and shall not be used to interpret the Plan. The rules of construction set forth in Bankruptcy Code section 102 shall apply to the Plan.

C. Computation of Time.

Except as otherwise specifically provided in the Plan, in computing any period of time prescribed or allowed by the Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.

ARTICLE II.

ADMINISTRATIVE CLAIMS, FEE CLAIMS, AND PRIORITY CLAIMS

In accordance with Bankruptcy Code section 1123(a)(1), Administrative Claims, Fee Claims, and Priority Tax Claims, each as described below, have not been classified and thus are excluded from the classes of Claims and Equity Interests set forth in Article III of the Plan.

A. Administrative Claims (Other Than Fee Claims).

1. Time for Filing Administrative Claims.

The holder of an Administrative Claim, other than (i) a Fee Claim, (ii) a liability incurred and payable in the ordinary course of business by a Debtor (and not past due), or (iii) an Administrative Claim that has been Allowed on or before the Effective Date, must file with the Court and serve on the Wind Down Entity Representative and its counsel notice of such Administrative Claim within thirty (30) days after service of notice of the Effective Date. Such notice must include at a minimum (i) the name of the Debtor(s) purported to be liable for the Administrative Claim, (ii) the name of the holder of the Administrative Claim, (iii) the amount of the Administrative Claim, and (iv) the basis for the Administrative Claim. Failure to file and serve such notice timely and properly shall result in the Administrative Claim being forever barred.

2. Payment of Allowed Administrative Claims.

In full and final satisfaction, settlement, and release, and in exchange for, its Allowed Administrative Claim, on or as soon as reasonably practicable after the later of the Effective Date, if such Administrative Claim is then an Allowed Claim, or if not Allowed on the Effective Date, a date that is as soon as reasonably practicable after the date such Administrative Claim becomes an Allowed Administrative Claim, each holder of an Allowed Administrative Claim (other than an Administrative Claim that is a Fee Claim) shall (i) receive Cash in an

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amount equal to the amount of such Allowed Administrative Claim, (ii) be paid in the ordinary course of business, or (iii) receive such other less favorable terms as may otherwise be agreed to by the holder of such Administrative Claim and the Debtors, in consultation with the Requisite Consenting Lenders, or the Wind Down Entity Representative. To the extent that Administrative Claims are or become Allowed after the Effective Date, such Allowed Administrative Claims shall be paid (i) from the Allowed Claims Reserve, or (ii) if the Allowed Claims Reserve is insufficient to pay all Allowed Administrative Claims in full, by the Wind Down Entity.

B. Fee Claims.

1. Final Fee Applications.

The Court shall determine the Allowed amounts of Fee Claims after notice and a hearing in accordance with the procedures established by the Bankruptcy Code. The Wind Down Entity shall pay Fee Claims in Cash in the amount Allowed by the Court. All requests for compensation or reimbursement of Fee Claims shall be filed and served on the Debtors, counsel to the Debtors, the Wind Down Entity, counsel to the Wind Down Entity, the U.S. Trustee, counsel to the Ad Hoc Group, and such other entities who are designated by the Bankruptcy Rules, the Confirmation Order, or other order of the Court, no later than forty-five (45) days after the Effective Date. Holders of Fee Claims that are required to file and serve applications for final allowance of their Fee Claims that do not file and serve such applications by the required deadline shall be forever barred from asserting such Claims against the Debtors, the Wind Down Entity, or their respective properties, and such Fee Claims shall be deemed discharged as of the Effective Date. Objections to any Fee Claims must be filed and served on the Debtors, counsel to the Debtors, the Wind Down Entity, counsel to the Wind Down Entity, counsel to the Ad Hoc Group, and the requesting party no later than thirty (30) days after the filing of the final applications for compensation or reimbursement (unless otherwise agreed by the party requesting compensation of a Fee Claim).

On the Effective Date, the Debtors and/or the Wind Down Entity shall establish the Accrued Professional Compensation Account and shall deposit therein an amount equal to all Accrued Professional Compensation. The Accrued Professional Compensation Account shall be maintained in trust for the Professionals. Each Allowed Fee Claim shall be paid in full in Cash from funds held in the Accrued Professional Compensation Account as soon as practicable after the date on which an applicable Fee Claim becomes an Allowed Fee Claim. When all Allowed Fee Claims have been paid in full, amounts remaining in the Accrued Professional Compensation Account, if any, shall be returned to the Wind Down Entity and shall be used by the Wind Down Entity Board to pay the Lender Wind Down Claim and, if the Lender Wind Down Claim has been paid in full in Cash, to fund the activities of the Wind Down Entity and to make distributions to holders of Wind Down Entity Interests.

2. Post-Effective Date Fees and Expenses.

The Wind Down Entity shall pay in Cash the reasonable and documented legal, professional, or other fees and expenses incurred by the Debtors’ and the Wind Down Entity’s professionals on and after the Effective Date, in the ordinary course of business, and without any further notice to or action, order, or approval of the Court. Upon the Effective Date, any

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requirement that professionals comply with Bankruptcy Code sections 327 through 331 in seeking retention or compensation for services rendered after such date shall terminate, and professionals may be employed and paid in the ordinary course of business by the Wind Down Entity without any further notice to, or action, order, or approval of, the Court.

C. Priority Tax Claims.

Each holder of an Allowed Priority Tax Claim due and payable on or before the Effective Date shall receive, as determined by the applicable Debtor, in full and final satisfaction, settlement, and release, and in exchange for, such Priority Tax Claim (i) payment in full in Cash, payable in equal Cash installments made on a quarterly basis in accordance with Bankruptcy Code section 1129(a)(9)(C), over a period not to exceed five (5) years following the Petition Date, plus statutory interest on any outstanding balance from the Effective Date, calculated at the prevailing rate under applicable nonbankruptcy law for each taxing authority and to the extent provided for by Bankruptcy Code section 511; or (ii) such other treatment as may be agreed upon by such holder and the Debtors, with the consent of the Requisite Consenting Lenders, which consent shall not be unreasonably withheld, or the Wind Down Entity or as otherwise determined upon a Final Order of the Court.

D. U.S. Trustee Fees.

Notwithstanding anything to the contrary contained herein, on the Effective Date, the Debtors shall pay, in full, in Cash, any fees due and owing to the U.S. Trustee at the time of Confirmation. On and after the Effective Date, the Wind Down Entity shall be responsible for filing required post-confirmation reports and paying quarterly fees due to the U.S. Trustee for the Wind Down Entity until the entry of a final decree in the Chapter 11 Cases.

ARTICLE III.

CLASSIFICATION AND TREATMENT OF

CLAIMS AND EQUITY INTERESTS

A. Classification of Claims and Equity Interests.

Except for those Claims addressed in Article II of the Plan, all Claims and Equity Interests are placed in the Classes set forth below. A Claim or Equity Interest is placed in a particular Class solely to the extent that the Claim or Equity Interest falls within the description of that Class, and the portion of a Claim or Equity Interest which does not fall within such description shall be classified in another Class or Classes to the extent that such portion falls within the description of such other Class or Classes. A Claim is also placed in a particular Class for the purpose of receiving distributions pursuant to the Plan solely to the extent that such Claim is an Allowed Claim in that Class and such Claim has not been paid, released, or otherwise settled before the Effective Date.

Pursuant to Article IV.F of the Plan, the Plan provides for the substantive consolidation of the Debtors’ Estates into a single Estate for Plan purposes only and matters associated with Confirmation and Consummation of the Plan. As a result of the substantive consolidation of the Debtors’ Estates for these limited purposes, each Class of Claims against and Equity Interests in the Debtors will be treated as against a single consolidated Estate for Plan purposes without regard to the corporate separateness of the Debtors.

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B. Record Date.

As of the close of business on the Record Date, the claims register (for Claims) and transfer ledger (for HERO Common Stock) shall be closed, and there shall be no further changes in the record holders of any Claims or HERO Common Stock. The Debtors and the Wind Down Entity shall have no obligation to recognize any transfer of HERO Common Stock or of any Claims occurring after the Record Date. The Wind Down Entity shall be entitled to recognize and deal for purposes under the Plan with only those record holders stated on the claims register (for Claims) and transfer ledgers (for HERO Common Stock) as of the close of business on the Record Date.

C. Summary of Classification and Class Identification.

Below is a chart identifying Classes of Claims and Equity Interests, a description of whether each Class is Impaired, and each Class’s voting rights with respect to the Plan.

Class	Claim or Equity Interest	Status	Voting Rights
1	Priority Non-Tax Claims	Unimpaired	Deemed to Accept
2	Other Secured Claims	Unimpaired	Deemed to Accept
3	First Lien Claims	Impaired	Entitled to Vote
4	General Unsecured Claims	Unimpaired	Deemed to Accept
5	Intercompany Claims	Unimpaired	Deemed to Accept
6	Intercompany Interests	Impaired	Deemed to Reject
7	HERO Common Stock	Impaired	Entitled to Vote
8	Other Equity Interests	Impaired	Deemed to Reject

The Debtors will request that the Court confirm the Plan pursuant to Bankruptcy Code section 1129(b) with respect to any rejecting Class of Equity Interests.

D. Treatment of Classified Claims and Equity Interests.

1. Class 1 - Priority Non-Tax Claims.

(a)    Classification: Class 1 consists of Priority Non-Tax Claims.

(b)    Treatment: Except to the extent that a holder of an Allowed Other Priority Non-Tax Claim and the Debtors, with the consent of the Requisite Consenting Lenders, which shall not be unreasonably withheld, or the Wind Down Entity agree in writing to less favorable treatment, in full and final satisfaction, settlement, and release, and in exchange for, on or as soon as reasonably practicable after the Effective Date, each holder of an Allowed Priority Non-Tax Claim shall receive Cash equal to the full Allowed amount of its Claim or otherwise be left Unimpaired.

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(c)    Voting: Class 1 is Unimpaired by the Plan, and each holder of a Class 1 Priority Non-Tax Claim is conclusively presumed to have accepted the Plan pursuant to Bankruptcy Code section 1126(f). Therefore, holders of Class 1 Priority Non-Tax Claims are not entitled to vote to accept or reject the Plan.

2. Class 2 - Other Secured Claims.

(a)    Classification: Class 2 consists of Other Secured Claims.

(b)    Treatment: Except to the extent that a holder of an Allowed Other Secured Claim and the Debtors, with the consent of the Requisite Consenting Lenders, which shall not be unreasonably withheld, or the Wind Down Entity agree in writing to less favorable treatment, in full and final satisfaction, settlement, and release, and in exchange for such Other Secured Claim, on or as soon as practicable after the Effective Date, all Other Secured Claims Allowed as of the Effective Date, if not previously paid, shall, at the option of the Debtors and with the consent of the Requisite Consenting Lenders (which consent shall not be unreasonably withheld) be satisfied by either (i) payment in full in Cash, (ii) reinstatement pursuant to Bankruptcy Code section 1124, or (iii) such other recovery as may be necessary to satisfy Bankruptcy Code section 1129.

(c)    Voting: Class 2 is Unimpaired by the Plan, and each holder of a Class 2 Other Secured Claim is conclusively presumed to have accepted the Plan pursuant to Bankruptcy Code section 1126(f). Therefore, holders of Class 2 Other Secured Claims are not entitled to vote to accept or reject the Plan.

3. Class 3 – First Lien Claims.

(a)    Classification: Class 3 consists of First Lien Claims.

(b)    Allowance: Class 3 First Lien Claims shall be Allowed Secured Claims pursuant to the Plan in an amount equal to the outstanding principal and the Applicable Premium in the amount of $579 million, plus accrued and unpaid prepetition and postpetition interest and postpetition fees and other expenses, if any, due on the First Lien Claims as of the Effective Date, less the Escrow Release Payment and any payments of principal or Applicable Premium under the First Lien Credit Agreement previously made to the First Lien Lenders during the Chapter 11 Cases.

(c)    Treatment: Except to the extent that a holder of an Allowed First Lien Claim and the Debtors agree in writing to less favorable treatment, in full and final satisfaction, settlement, and release, and in exchange for, each First Lien Claim, on or as soon as practicable after the Effective Date, each holder of an Allowed First Lien Claim shall receive its Pro Rata share of: (i) if Class 7 HERO Common Stock votes to accept the Plan, (a) the Acceptance Lender Wind Down Claim; and (b) 100% of the Class A Wind Down Entity Interests; or (ii) if Class 7 HERO Common Stock votes to reject the Plan, the Rejection Lender Wind Down Claim.

(d)    Voting: Class 3 is Impaired. Holders of Class 3 First Lien Claims are entitled to vote to accept or reject the Plan.

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4. Class 4 – General Unsecured Claims.

(a)    Classification: Class 4 consists of General Unsecured Claims.

(b)    Allowance: Each General Unsecured Claim in Class 4 shall be Allowed unless such Claim is Disputed.

(c)    Treatment: In full and final satisfaction, settlement, and release, and in exchange for, each Allowed General Unsecured Claim, each holder of an Allowed General Unsecured Claim shall, to the extent such holder’s Claim has not been previously paid in the ordinary course of business pursuant to an order of the Court, or otherwise, receive payment in full in Cash on the later of (a) the Effective Date or as soon thereafter as is reasonably practicable and (b) the date upon which such Allowed General Unsecured Claim becomes due and owing. Payment of a General Unsecured Claim is subject to the rights of the Debtors and, after the Effective Date, the Wind Down Entity to dispute such Claim, in the case of a General Unsecured Claim as to which no proof of Claim has been filed, as if the Chapter 11 Cases had not been commenced in accordance with applicable nonbankruptcy law, and, in the case of a General Unsecured Claim as to which a proof of Claim has been filed, in accordance with applicable law, including Bankruptcy Code section 502.

Notwithstanding anything to the contrary in the Plan, until an Allowed General Unsecured Claim in Class 4 has been (x) paid in full in accordance with applicable law, or on terms agreed to between the holder of such Claim and the Debtor or the Wind Down Entity, or in accordance with the terms and conditions of the particular transaction giving rise to such Claim, or (y) resolved pursuant to the disputed claims procedures applicable to General Unsecured Claims under Article VI.A.3 of the Plan: (a) the provisions of Article V.A (other than with respect to the settlement among the Debtors, the Non-Debtor Subsidiaries, and the holders of First Lien Claims described in the second paragraph of Article V.A of the Plan), V.C (other than with respect to the releases set forth in Article V.C that are consideration for the settlement described in Article V.A of the Plan) and Articles V.D-H of the Plan shall not apply or take effect with respect to such Claim, (b) such Claim shall not be deemed settled, satisfied, resolved, released or enjoined by any provision of the Plan and (c) the holder of such Claim shall retain all rights, if any, to recover on account of its Claim from (i) the Disputed Claims Reserve or the Allowed Claims Reserve, as applicable, or (ii) the Wind Down Entity if such Claim is not a Specified Claim. For the avoidance of doubt, upon the satisfaction of subpart (x) or (y) of the foregoing sentence, subparts (a)-(c) of the foregoing sentence shall no longer apply under the Plan. Except for holders of Specified Claims or Rejection Damage Claims, holders of Allowed General Unsecured Claims in Class 4 shall not be required to file a proof of Claim with the Court. Except for holders of Specified Claims or Rejection Damage Claims, holders of Allowed General Unsecured Claims in Class 4 shall not be subject to any claims resolution process with the Court in connection with their Claims, and shall retain all their rights under applicable nonbankruptcy law to pursue their Allowed General Unsecured Claims in Class 4 against the Debtors or the Wind Down Entity in any forum with jurisdiction over the parties. The Debtors and the Wind Down Entity shall retain all defenses, counterclaims, rights to setoff, and rights to recoupment as to General Unsecured Claims in Class 4. If the Debtors or the Wind Down Entity dispute any General Unsecured Claims in Class 4 (other than Specified Claims or Rejection Damage Claims), such dispute shall be determined, resolved or adjudicated in the manner as if

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the Chapter 11 Cases had not been commenced. Notwithstanding the foregoing, any holder of a Claim who files a proof of Claim shall be subject to the Article V of the Plan unless and until such holder withdraws such proof of Claim, and nothing herein limits the retained jurisdiction of the Court under Article VII of the Plan. For the avoidance of doubt, notwithstanding the foregoing, the terms of the Cash Collateral Order shall govern with respect to any Claims and Defenses (as defined in paragraph 27 of the Cash Collateral Order) that could have been asserted against the First Lien Agent or any of the First Lien Lenders or their respective agents, affiliates, subsidiaries, directors, officers, representatives, attorneys or advisors in connection with any Debtor Stipulation (as defined in paragraph 7 of the Cash Collateral Order), and as a result of the failure of any holder of a General Unsecured Claim to assert any Claims and Defenses prior to the deadline set forth in paragraph 27 of the Cash Collateral Order, no holder of a General Unsecured Claim shall be entitled to assert any Claims and Defenses against the First Lien Agent or any of the First Lien Lenders or their respective agents, affiliates, subsidiaries, directors, officers, representatives, attorneys or advisors.

(d)    Voting: Class 4 is Unimpaired. Therefore, holders of Class 4 General Unsecured Claims are not entitled to vote to accept or reject the Plan.

5. Class 5 – Intercompany Claims.

(a)    Classification: Class 5 consists of Intercompany Claims.

(b)    Treatment: In full and final satisfaction, settlement, and release, and in exchange for, each Allowed Intercompany Claim, on the Effective Date, shall be adjusted, continued or discharged to the extent determined by the Debtors and the Requisite Consenting Lenders in their reasonable discretion.

(c)    Voting: Class 5 is Unimpaired. Holders of Class 5 Intercompany Claims are conclusively presumed to have accepted the Plan pursuant to Bankruptcy Code section 1126(f). Therefore, holders of Class 5 Intercompany Claims are not entitled to vote to accept or reject the Plan.

6. Class 6 – Intercompany Interests.

(a)    Classification: Class 6 consists of Intercompany Interests.

(b)    Treatment: On the Effective Date, all Intercompany Interests in the Debtors shall be cancelled and the holders thereof shall not receive or retain any distribution on account of their Intercompany Interests.

(c)    Voting: Class 6 is Impaired. Holders of Class 6 Intercompany Interests are conclusively presumed to have rejected the Plan pursuant to Bankruptcy Code section 1126(f). Therefore, holders of Class 6 Intercompany Interests are not entitled to vote to accept or reject the Plan.

7. Class 7 – HERO Common Stock.

(a)    Classification: Class 7 consists of HERO Common Stock.

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(b)    Treatment: On the Effective Date, HERO Common Stock shall be cancelled and of no further force and effect, whether surrendered for cancellation or otherwise. On or as soon as practicable after the Effective Date, each holder of HERO Common Stock shall receive its Pro Rata share of: (i) if Class 7 HERO Common Stock votes to accept the Plan, (a) the Shareholder Effective Date Cash Distribution; and (b) 100% of the Class B Wind Down Entity Interests; or (ii) if Class 7 HERO Common Stock votes to reject the Plan, (a) the Rejection Shareholder Cash Distribution and (b) 100% of the Rejection Wind Down Entity Interests. For the avoidance of doubt, from and after the Effective Date, any distribution on account of the Rejection Shareholder Cash Distribution shall be made prior to any distribution on account of the Rejection Lender Wind Down Claim.

(c)    Voting: Class 7 is Impaired. Holders of Class 7 HERO Common Stock are entitled to vote to accept or reject the Plan.

8. Class 8 – Other Equity Interests.

(a)    Classification: Class 8 consists of Other Equity Interests.

(b)    Treatment: On the Effective Date, Other Equity Interests shall be cancelled and of no further force and effect, whether surrendered for cancellation or otherwise and the holders thereof shall not receive or retain any distribution on account of their Other Equity Interests.

(c)    Voting: Class 8 is Impaired. Holders of Class 8 Other Equity Interests are conclusively presumed to have rejected the Plan pursuant to Bankruptcy Code section 1126(f). Therefore, holders of Class 8 Other Equity Interests are not entitled to vote to accept or reject the Plan.

E. Special Provision Regarding Unimpaired and Reinstated Claims.

Except as otherwise specifically provided in the Plan, nothing herein shall be deemed to affect, diminish, or impair the Debtors’ or the Wind Down Entity’s rights and defenses, both legal and equitable, with respect to any Reinstated Claim or Unimpaired Claim, including, but not limited to, legal and equitable defenses to setoffs or recoupment against Reinstated Claims or Unimpaired Claims. Except as otherwise specifically provided in the Plan, nothing herein shall be deemed to be a waiver or relinquishment of any Claim, Cause of Action, right of setoff, or other legal or equitable defense which the Debtors had immediately prior to the Petition Date against, or with respect to, any Claim left Unimpaired by the Plan. Except as otherwise specifically provided in the Plan, the Wind Down Entity shall have, retain, reserve, and be entitled to assert, all such Claims, Causes of Action, rights of setoff, and other legal or equitable defenses which the Debtors had immediately prior to the Petition Date fully as if the Chapter 11 Cases had not been commenced, and all of the Debtors’ legal and equitable rights with respect to any Reinstated Claim or Claim left Unimpaired by the Plan may be asserted by the Wind Down Entity after the Confirmation Date and the Effective Date to the same extent as if the Chapter 11 Cases had not been commenced.

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F. Voting of Claims.

Each holder of an Allowed First Lien Claim or HERO Common Stock as of the Voting Record Date shall be entitled to vote to accept or reject the Plan. The instructions for completion of the Ballots are set forth in the instructions accompanying each Ballot. The Debtors will seek approval of the Solicitation Procedures in the Plan Scheduling Motion. The Solicitation Procedures are described in the Disclosure Statement.

G. Nonconsensual Confirmation.

The Debtors intend to request confirmation of the Plan under Bankruptcy Code section 1129(b) with respect to any Impaired Class that has not accepted or is deemed to have rejected the Plan pursuant to Bankruptcy Code section 1126.

ARTICLE IV.

MEANS FOR IMPLEMENTATION OF THE PLAN

A. Operations Between the Confirmation Date and Effective Date.

During the period from the Confirmation Date through and until the Effective Date, the Debtors may continue to operate their businesses as debtors in possession, subject to all applicable orders of the Court, including the Cash Collateral Order, and any limitations set forth in the Restructuring Support Agreement.

B. Wind Down Entity.

1.    Generally. On the Effective Date, the Wind Down Entity shall be established and become effective for the benefit of the holders of the Lender Wind Down Claim and the Wind Down Entity Interests. The powers, authority, responsibilities and duties of the Wind Down Entity, the Wind Down Entity Representative and Wind Down Entity Board are set forth in and shall be governed by the Plan, the Plan Supplement and the Wind Down Entity Agreement. The responsibilities and duties of the Wind Down Entity shall include (i) monetizing the Post-Effective Date Assets and winding down the remainder of the Debtors’ businesses and operations in a controlled, efficient and value-maximizing (adjusting for risk) manner; (ii) enter into and issue, as applicable, the documents evidencing the Lender Wind Down Claim, (iii) issuing the Wind Down Entity Interests in accordance with the Plan; (iv) making distributions in accordance with the Plan; (v) overseeing and administering (a) the termination of the Debtors’ qualified 401(k) retirement plans and any related trusts and the distribution of such plans’ assets to participants and for fulfilling statutory and regulatory requirements related to such plans and (b) any statutory and regulatory requirements related to any terminated Debtor employee benefit plans; and (vi) performing such other services as are contemplated by the Plan and the Wind Down Entity Agreement. The Wind Down Entity Agreement shall contain provisions customary to trust agreements utilized in comparable circumstances, including, without limitation, any and all provisions necessary to ensure the continued treatment of the Wind Down Entity as a grantor trust and the holders of the Lender Wind Down Claim and the Wind Down Entity Interests as the grantors and owners thereof for federal income tax purposes. The Debtors shall transfer, without recourse, to the Wind Down Entity all of their right, title and interest in the Post-Effective Date Assets. Upon the transfer by

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the Debtors of the Post-Effective Date Assets (including the Initial Wind Down Funding Amount) to the Wind Down Entity, the Debtors will have no reversionary or further interest in or with respect to the Post-Effective Date Assets or the Wind Down Entity.

2.    Purposes and Establishment of the Wind Down Entity. The Wind Down Entity shall be established pursuant to the Wind Down Entity Agreement for the purposes of liquidating and administering the Post-Effective Date Assets. The Wind Down Entity is intended to qualify as a liquidating trust pursuant to Treasury Regulation section 301.7701-4(d), with no objective to continue or engage in the conduct of a trade or any other business, except to the extent reasonably necessary to, and consistent with, the purpose of the Wind Down Entity. The Wind Down Entity shall not be deemed a successor in interest of the Debtors for any purpose other than as specifically set forth herein or in the Wind Down Entity Agreement. On the Effective Date, the Wind Down Entity Representative, on behalf of the Debtors, shall execute the Wind Down Entity Agreement and shall take all other steps necessary to establish the Wind Down Entity pursuant to the Wind Down Entity Agreement and consistent with the Plan.

3.    Post-Effective Date Assets. On the Effective Date, and in accordance with Bankruptcy Code sections 1123 and 1141 and pursuant to the terms of the Plan, all of the Post-Effective Date Assets, as well as the rights and powers of each Debtor in such Post-Effective Date Assets, shall automatically vest in the Wind Down Entity, free and clear of all Claims and Equity Interests for the benefit of the holders of the Lender Wind Down Claim and the Wind Down Entity Interests. Upon the transfer of the Post-Effective Date Assets, the Debtors shall have no interest in or with respect to the Post-Effective Date Assets or the Wind Down Entity. Notwithstanding the foregoing, for purposes of Bankruptcy Code section 553, the transfer of the Post-Effective Date Assets to the Wind Down Entity shall not affect the mutuality of obligations that otherwise may have existed prior to the effectuation of such transfer. Such transfer shall be exempt from any stamp, real estate transfer, mortgage reporting, sales, use or other similar tax, pursuant to Bankruptcy Code section 1146(a). In connection with the transfer of such assets, any attorney-client privilege, work-product privilege or other privilege or immunity attaching to any documents or communications (whether written or oral) transferred to the Wind Down Entity shall vest in the Wind Down Entity and its representatives, and the Debtors and the Wind Down Entity Representative are directed to take all necessary actions, if any, to effectuate the transfer of such privileges. The Wind Down Entity Representative shall agree, on behalf of the Wind Down Entity, to accept and hold the Post-Effective Date Assets in the Wind Down Entity for the benefit of the holders of the Lender Wind Down Claim and the Wind Down Entity Interests, subject to the terms of the Plan and the Wind Down Entity Agreement.

The Debtors, the Wind Down Entity Representative, the holders of the Lender Wind Down Claim and the Wind Down Entity Interests and any party under the control of such parties will execute any documents or other instruments and shall take all other steps as necessary to cause title to the Post-Effective Date Assets to be transferred to the Wind Down Entity, which documents and instruments shall be in form and substance reasonably acceptable to the Debtors and the Requisite Consenting Lenders.

4.    Valuation of Post-Effective Date Assets. As soon as possible after the establishment of the Wind Down Entity, but in no event later than 90 days thereafter, the Wind Down Entity Board shall inform, in writing, the Wind Down Entity Representative of the value

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of the assets transferred to the Wind Down Entity, based on the good-faith best estimate by the Wind Down Entity Board of the fair market value of the assets transferred to the Wind Down Entity (based on, among other things, third party appraisals and/or indications of value received by the Debtors or the Wind Down Entity), and the Wind Down Entity Representative shall apprise, in writing, the holders of Lender Wind Down Claim and the Wind Down Entity Interests of such valuation. The valuation shall be used consistently by all parties (including the Wind Down Entity Representative and the holders of the Lender Wind Down Claim and Wind Down Entity Interests) for all federal income tax purposes.

In connection with the preparation of the valuation contemplated by the Plan and the Wind Down Entity Agreement, the Wind Down Entity Representative shall be entitled to retain such professionals and advisors as the Wind Down Entity shall determine to be appropriate or necessary, and the Wind Down Entity Board shall take such other actions in connection therewith as it determines to be appropriate or necessary. The Wind Down Entity shall bear all of the reasonable costs and expenses incurred in connection with determining such value, including the fees and expenses of any professionals retained in connection therewith.

5.    Wind Down Entity Representative and Wind Down Entity Board. On the Effective Date and in compliance with the provisions of the Plan, the Restructuring Support Agreement, the Plan Term Sheet and the Wind Down Entity Agreement, the Requisite Consenting Lenders shall appoint a Person or firm as Wind Down Entity Representative. The identity of the Wind Down Entity Representative and the Wind Down Entity Representative’s compensation shall be included in the Plan Supplement. Additionally, the Plan Supplement shall set forth the identity of the initial members of the Wind Down Entity Board.    Upon payment in full of the Lender Wind Down Claim, the two members of the Wind Down Entity Board designated by the Requisite Consenting Lenders shall be replaced by two members designated by the Equity Committee, provided, that the Equity Committee has designated such members by 11:59 p.m. (ET) on October 11, 2016.

In the event the Wind Down Entity Representative dies, is terminated or resigns for any reason, the Wind Down Entity Board shall designate a successor by majority vote.

The Wind Down Entity Representative shall serve at the direction of the Wind Down Entity Board; provided, however, that the Wind Down Entity Board may not direct the Wind Down Entity Representative or the members of the Wind Down Entity Board to act inconsistently with their duties under the Wind Down Entity Agreement and/or the Plan.

The salient terms of the Wind Down Entity Representative’s employment, including the Wind Down Entity Representative’s duties and compensation, to the extent not set forth in the Plan, shall be set forth in the Wind Down Entity Agreement or the Confirmation Order. Membership, duties, responsibilities and powers of the Wind Down Entity Board shall be as set forth in the Wind Down Entity Agreement.

6.    Duties and Powers of Wind Down Entity Representative.

a.    Authority. The duties and powers of the Wind Down Entity Representative shall include all powers necessary to implement the Plan with respect to all

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Debtors and to administer and monetize the Post-Effective Date Assets, including, without limitation, the duties and powers listed herein. The Wind Down Entity Representative will administer the Wind Down Entity in accordance with the Wind Down Entity Agreement. The Wind Down Entity Representative, upon direction by the Wind Down Entity Board and in the exercise of their collective reasonable business judgment, shall, in an expeditious but orderly manner, liquidate and convert to Cash the assets of the Wind Down Entity, make timely distributions and not unduly prolong the duration of the Wind Down Entity.

b.    Claims and Causes of Action. The Wind Down Entity Representative may object to, seek to estimate, seek to subordinate, compromise or settle any and all Claims against the Debtors that have not already been Allowed as of the Effective Date, and may pursue all Causes of Action transferred to the Wind Down Entity. The Wind Down Entity Representative, upon direction by the Wind Down Entity Board, shall have the absolute right to pursue or not to pursue any and all Causes of Action as it determines in the best interests of the holders of the Lender Wind Down Claim and the Wind Down Entity Interests, and consistent with the purposes of the Wind Down Entity, and shall have no liability for the outcome of its decision except for any damages caused by willful misconduct or gross negligence. The Wind Down Entity Representative will prepare and make available to holders of the Lender Wind Down Claim and the Wind Down Entity Interests, on a quarterly basis, a written report detailing, among other things, the litigation status of Claims or Causes of Action transferred to the Wind Down Entity, any settlements entered into by the Wind Down Entity, the proceeds recovered to date from the Post-Effective Date Assets and the distributions made by the Wind Down Entity.

c.    Retention of Professionals. The Wind Down Entity Representative may enter into employment agreements and retain professionals to pursue the Causes of Action and otherwise advise the Wind Down Entity Representative and provide services to the Wind Down Entity in connection with the matters contemplated by the Plan, the Confirmation Order and the Wind Down Entity Agreement without further order of the Court. The terms of such employment agreements shall be acceptable to the Wind Down Entity Board.

d.    Agreements. The Wind Down Entity Representative may enter into any agreement or execute any document required by or consistent with the Plan and perform all of the Debtors’ and Wind Down Entity’s obligations thereunder.

e.    Reasonable Fees and Expenses. The Wind Down Entity Representative may incur any reasonable and necessary expenses in connection with the performance of its duties under the Plan, including in connection with retaining professionals and/or entering into agreements pursuant to subsections c and d above. The Wind Down Entity Representative shall be paid by the Wind Down Entity.

f.    Other Actions. The Wind Down Entity may take all other actions not inconsistent with the provisions of the Plan and the Wind Down Entity Agreement that the Wind Down Entity Representative deems reasonably necessary or desirable with respect to administering the Plan.

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7.    Funding of the Wind Down Entity. On the Effective Date, the Debtors shall fund the Wind Down Entity with the Initial Wind Down Funding Amount.

8.    Wind Down Entity Budget. Following the Effective Date, the Wind Down Entity Board, in accordance with its fiduciary duties and based on the advice of its advisors, shall establish the Wind Down Entity Budget. In establishing the Wind Down Entity Budget, the Wind Down Entity Board shall account for the use of any asset sale proceeds by any Non-Debtor Subsidiary to satisfy any claims against any HERO Entity during the pendency of the Chapter 11 Cases.

In the event that the Initial Wind Down Funding Amount is greater than the cash requirements projected in the Wind Down Entity Budget, the Wind Down Entity Board shall distribute such excess in accordance with the Wind Down Entity Waterfall. Before making any distributions to holders of the Lender Wind Down Claim or Wind Down Entity Interests, the Wind Down Entity Board shall make a good faith determination that it shall be retaining, after taking into account funds to be distributed, sufficient funding for (i) the reconciliation of any Claims for which funds have been reserved in the Disputed Claims Reserve, (ii) the monetization of the Post-Effective Date Assets, (iii) the wind down of the HERO Entities’ businesses and operations and (iv) accomplishing all other objectives of the Wind Down Entity.

9.    Wind Down Entity Representative’s Tax Power. Following the Effective Date, the Wind Down Entity Representative shall prepare and file (or cause to be prepared and filed), on behalf of the Debtors, all tax returns required to be filed or that the Wind Down Entity Representative otherwise deems appropriate. In the event that the Wind Down Entity shall fail or cease to qualify as a liquidating trust within the meaning of Treasury Regulation section 301.7701-4(d), the Wind Down Entity Representative shall take any and all necessary actions as it shall deem appropriate to have the Wind Down Entity classified as a partnership for federal tax purposes under Treasury Regulation section 301.7701-3, including, if necessary, creating or converting the Wind Down Entity into a Delaware limited liability partnership or limited liability company that is so classified.

10.    Wind Down Entity Liens and Lender Wind Down Claim. The Wind Down Entity shall have first-lien, first-priority security interests and Liens on the assets of the Entities owned directly and indirectly by the Wind Down Entity, as set forth and further described in the Confirmation Order and the Wind Down Entity Agreement, which documents shall govern the distributions in respect of the Lender Wind Down Claim and the Wind Down Entity Interests; provided that such Liens and security interests may be subject to certain Liens that were permitted under the First Lien Credit Agreement.

Specifically, with respect to the Lender Wind Down Claim: (a) such claim shall be memorialized in the Confirmation Order and the Wind Down Entity Agreement, which documents shall include an obligation to make payments in respect of the Lender Wind Down Claim on a priority basis in accordance with the Wind Down Entity Waterfall; (b) the Wind Down Entity shall be required to make distributions to the extent of such Lender Wind Down Claim without reference to a fixed maturity date or the granting of remedies for non-payment (other than the ability to assert a claim against the Wind Down Entity for breach of the organizational and/or trust documents, as applicable, governing the Wind Down Entity); and

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(c) the Lender Wind Down Claim will be transferable in a manner generally consistent with those for syndicated loans, including that transferees of the Lender Wind Down Claim affirmatively agree to be bound by the terms and conditions of the separate agreement and/or instrument governing the Lender Wind Down Claim.

11.    Lender Wind Down Claim and Wind Down Entity Interests. Except as otherwise provided by the Wind Down Entity Waterfall in respect of the Shareholder Supplemental Cash Distribution, if applicable, unless and until the Lender Wind Down Claim has been paid in full in Cash from the proceeds of the Post-Effective Date Assets, no distributions shall be made by the Wind Down Entity on account of the Wind Down Entity Interests.

12.    Distributions; Withholding. The Wind Down Entity Representative shall make distributions to the holders of the Lender Wind Down Claim and Wind Down Entity Interests in accordance with the terms of the Wind Down Entity Agreement and the Plan. The Wind Down Entity shall make distributions to holders of Wind Down Entity Interests as follows (the “Wind Down Entity Waterfall”):

If Class 7 HERO Common Stock votes to accept the Plan, t (i) after $420 million has been paid to the First Lien Lenders in the aggregate on (x) the First Lien Claims (inclusive of the Escrow Release Payment and any payments of principal or Applicable Premium under the First Lien Credit Agreement previously made to the First Lien Lenders during the Chapter 11 Cases, but exclusive of interest and periodic adequate protection payments other than adequate protection payments designated as principal payments or payments of Applicable Premium) and (y) the Acceptance Lender Wind Down Claim, to the extent not already paid, the Shareholder Supplemental Cash Distribution; and (ii) after payment in full of the Acceptance Lender Wind Down Claim: (a) until such time as the holders of the Class A Wind Down Entity Interests have received $20 million on account of such Class A Wind Down Entity Interests, distributions shall be made Pro Rata to the holders of the Acceptance Wind Down Entity Interests; (b) once the holders of the Class A Wind Down Entity Interests have received $20 million on account of such Class A Wind Down Entity Interests, the next $3 million in distributions shall be made to the holders of the Class B Wind Down Entity Interests; (c) after the Class B Wind Down Entity Interests have received such $3 million, the next $3 million in distributions shall be made to the holders of the Class A Wind Down Entity Interests; and (d) after the holders of the Class A Wind Down Entity Interests have received such $3 million, Pro Rata to the holders of the Acceptance Wind Down Entity Interests. If Class 7 HERO Common Stock votes to reject the Plan, the Wind Down Entity shall make distributions (i) first, on account of the Rejection Shareholder Cash Distribution; and after the Rejection Shareholder Cash Distribution has been funded in full, on account of the Rejection Lender Wind Down Claim; and (iii) after payment in full of the Rejection Lender Wind Down Claim, to holders of Wind Down Entity Interests Pro Rata.

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The Wind Down Entity Board may authorize the Wind Down Entity Representative to retain proceeds from the Post-Effective Date Assets to fund additional costs of the Wind Down Entity or the Non-Debtor Subsidiaries following the Effective Date. The Wind Down Entity may withhold from amounts otherwise distributable to any Entity any and all amounts, determined in the Wind Down Entity Representative’s reasonable discretion, required by the Wind Down Entity Agreement, or any law, regulation, rule, ruling, directive, treaty or other governmental requirement. Any party issuing any instrument or making any distribution under the Plan shall comply with all applicable withholding and reporting requirements imposed by any U.S. federal, state or local tax law or tax authority, and all distributions under the Plan shall be subject to any such withholding or reporting requirements. Notwithstanding the above, each holder of an Allowed Claim that is to receive a distribution under the Plan shall have the sole and exclusive responsibility for the satisfaction and payment of any Taxes imposed on such holder by any governmental unit, including income, withholding and other tax obligations, on account of such distribution. Any party issuing any instrument or making any distribution under the Plan has the right, but not the obligation, to not make a distribution until such holder has made arrangements satisfactory to such issuing or disbursing party for payment of any such tax obligations, and, if any party issuing any instrument or making any distribution under the Plan fails to withhold with respect to any such holder’s distribution and is later held liable for the amount of such withholding, the holder shall reimburse such party. The Wind Down Entity Representative or other distribution agent, as applicable, may require, as a condition to the receipt of a distribution, that the holder complete the appropriate Form W-8 or Form W-9, as applicable to each holder. If the holder fails to comply with such a request within 180 days, such distribution shall be deemed an unclaimed distribution and treated in accordance with Articles VI.B.4 and/or VI.B.6 of the Plan.

13.    Insurance. The Wind Down Entity Representative will maintain customary insurance coverage for the protection of the Wind Down Entity Board and the Wind Down Entity Representative on and after the Effective Date.

14.    Exculpation; Indemnification. The Wind Down Entity Representative, the Wind Down Entity, the Wind Down Entity Board, the professionals of the Wind Down Entity and their representatives will be exculpated and indemnified pursuant to the terms of the Wind Down Entity Agreement. The indemnification described in the Wind Down Entity Agreement will exclude willful misconduct, gross negligence and professional malpractice. Any indemnification claim of the Wind Down Entity Representative or the other individuals entitled to indemnification under this subsection shall be satisfied solely from the Post-Effective Date Assets and shall be entitled to a priority distribution therefrom, ahead of the Lender Wind Down Claim and the Wind Down Entity Interests and any other claim to or interest in such assets. The Wind Down Entity Representative, the members of the Wind Down Entity Board and their representatives (as applicable) shall be entitled to rely, in good faith, on the advice of their retained professionals.

15.    Transferability of the Wind Down Entity Interests. The Wind Down Entity Interests shall not be transferable, shall not be certificated and otherwise shall be structured in accordance with applicable nonbankruptcy law such that such Wind Down Entity Interests shall not be deemed to be “securities” under U.S. securities law; provided, however, that, following the Effective Date, the Wind Down Entity Board shall have the discretion to take such steps as necessary to render some or all of the Wind Down Entity Interests transferrable in accordance with all applicable law, including U.S. securities law.

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16.    Registry of the Wind Down Entity Interests. The Wind Down Entity Representative shall maintain a registry of the Wind Down Entity Interests.

17.    Federal Income Tax Treatment of Wind Down Entity.

a.    Post-Effective Date Assets Treated as Owned by Holders of the Lender Wind Down Claim and the Wind Down Entity Interests. For all U.S. federal income tax purposes, all parties (including, without limitation, the Debtors, the Wind Down Entity Representative and the holders of the Lender Wind Down Claim and the Wind Down Entity Interests) shall treat the transfer of the Post-Effective Date Assets to the Wind Down Entity for the benefit of the holders of the Lender Wind Down Claim and the Wind Down Entity Interests, whether their First Lien Claims or HERO Common Stock are Allowed on or after the Effective Date as (i) a transfer of the Post-Effective Date Assets (subject to any obligations relating to those assets) directly to the holders of the Lender Wind Down Claim and the Wind Down Entity Interests and, to the extent that Post-Effective Date Assets are allocable (a) to Disputed Claims, to the Disputed Claims Reserve, or (b) to Allowed Claims not otherwise paid on the Effective Date, to the Allowed Claims Reserve, followed by (ii) the transfer by the holders of the Lender Wind Down Claim and the Wind Down Entity Interests to the Wind Down Entity of the Post-Effective Date Assets deemed received by such holders pursuant to clause (i) (other than the Post-Effective Date Assets allocable to the Disputed Claims Reserve or the Allowed Claims Reserve) in exchange for the Lender Wind Down Claim and the Wind Down Entity Interests, as applicable. Accordingly, the holders of the Lender Wind Down Claim and the Wind Down Entity Interests shall be treated for U.S. federal income tax purposes as the grantors and owners of their respective share of the Post-Effective Date Assets (other than such Post-Effective Date Assets as are allocable to the Disputed Claims Reserve and the Allowed Claims Reserve). The foregoing treatment shall also apply, to the extent permitted by applicable law, for state and local income tax purposes.

Subject to contrary definitive guidance from the Internal Revenue Service or a court of competent jurisdiction (including the receipt by the Wind Down Entity Representative of a private letter ruling if the Wind Down Entity Representative so requests, or the receipt of an adverse determination by the Internal Revenue Service upon audit if not contested by the Wind Down Entity Representative), the Wind Down Entity Representative may (A) timely elect to treat any Disputed Claims Reserve or Allowed Claims Reserve as a “disputed ownership fund” governed by Treasury Regulation section 1.468B-9 and (B) to the extent permitted by applicable law, report consistently with the foregoing for state and local income tax purposes. All parties (including the Wind Down Entity Representative, the Debtors and holders of the Lender Wind Down Claim and the Wind Down Entity Interests) shall report for U.S. federal, state and local income tax purposes consistently with the foregoing.

b.    Tax Reporting. The Wind Down Entity Representative shall file tax returns for the Wind Down Entity treating the Wind Down Entity as a grantor trust pursuant to Treasury Regulation section 1.671-4(a) and in accordance with Article IV.B.17 of the Plan. The Wind Down Entity Representative also will annually send to each holder of the Lender Wind Down Claim and the Wind Down Entity Interests a separate statement setting forth the holder’s share of items of income, gain, loss, deduction or credit (including the receipts and expenditures of the Wind Down Entity) as relevant for U.S. federal income tax purposes and will

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instruct all such holders to use such information in preparing their U.S. federal income tax returns or to forward the appropriate information to such holder’s underlying beneficial holders with instructions to utilize such information in preparing their U.S. federal income tax returns. The Wind Down Entity Representative shall also file (or cause to be filed) any other statement, return or disclosure relating to the Wind Down Entity that is required by any governmental unit.

The valuation of the Post-Effective Date Assets prepared pursuant to Article IV.B.4 of the Plan shall be used consistently by all parties (including the Wind Down Entity Representative and the holders of the Lender Wind Down Claim and the Wind Down Entity Interests) for all U.S. federal income tax purposes, and to the extent permitted by applicable law, for state and local income tax purposes.

Allocations of Wind Down Entity taxable income among the holders of the Lender Wind Down Claim and the Wind Down Entity Interests (other than taxable income allocable to the Disputed Claims Reserve and the Allowed Claims Reserve) shall be determined by reference to the manner in which an amount of Cash equal to such taxable income would be distributed (were such cash permitted to be distributed at such time, and without regard to any restrictions on distributions described herein) if, immediately prior to such deemed distribution, the Wind Down Entity had distributed all its assets (valued at their tax book value, and other than assets allocable to the Disputed Claims Reserve and the Allowed Claims Reserve) to the holders of the Lender Wind Down Claim and the Wind Down Entity Interests, adjusted for prior taxable income and loss and taking into account all prior and concurrent distributions from the Wind Down Entity. Similarly, taxable loss of the Wind Down Entity shall be allocated by reference to the manner in which an economic loss would be borne immediately after a hypothetical liquidating distribution of the remaining Post-Effective Date Assets. The tax book value of the Post-Effective Date Assets for the purpose of this paragraph shall equal their fair market value on the Effective Date, adjusted in accordance with tax accounting principles prescribed by the Tax Code, the applicable Treasury Regulations and other applicable administrative and judicial authorities and pronouncements.

The Wind Down Entity Representative shall be responsible for payment, out of the Post-Effective Date Assets, of any Taxes imposed on the Wind Down Entity or the Post-Effective Date Assets, including the Disputed Claims Reserve and the Allowed Claims Reserve. In the event, and to the extent, any Cash retained on account of Disputed Claims in the Disputed Claims Reserve or on account of Allowed Claims in the Allowed Claims Reserve is insufficient to pay the portion of any such Taxes attributable to the taxable income arising from the assets allocable to, or retained on account of, Disputed Claims or Allowed Claims, as applicable, such Taxes shall be (i) reimbursed from any subsequent Cash amounts retained on account of Disputed Claims or Allowed Claims or (ii) to the extent that such Disputed Claims or Allowed Claims have subsequently been resolved, deducted from any amounts otherwise distributable by the Wind Down Entity Representative as a result of the resolution of such Disputed Claims or Allowed Claims, as applicable.

The Wind Down Entity Representative may request an expedited determination of Taxes of the Wind Down Entity, including the Disputed Claims Reserve, or the Debtors under section 505(b) of the Bankruptcy Code, for all tax returns filed for, or on behalf of, the Wind Down Entity or the Debtors for all taxable periods through the dissolution of the Wind Down Entity.

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c.    Tax Withholding. The Wind Down Entity Representative may withhold and pay to the appropriate tax authority all amounts required to be withheld pursuant to the Tax Code or any provision of any foreign, state or local tax law with respect to any payment or distribution to the holders of the Lender Wind Down Claim and the Wind Down Entity Interests. All such amounts withheld and paid to the appropriate tax authority shall be treated as amounts distributed to such holders of the Lender Wind Down Claim and the Wind Down Entity Interests for all purposes of the Wind Down Entity Agreement. The Wind Down Entity Representative shall be authorized to collect such tax information from the holders of the Lender Wind Down Claim and the Wind Down Entity Interests (including, without limitation, social security numbers or other tax identification numbers) as it, in its sole discretion, deems necessary to effectuate the Plan, the Confirmation Order and the Wind Down Entity Agreement. In order to receive distributions from the Wind Down Entity, all holders of the Lender Wind Down Claim and the Wind Down Entity Interests will need to identify themselves to the Wind Down Entity Representative and provide tax information and the specifics of their holdings, to the extent that the Wind Down Entity Representative deems appropriate. This identification requirement may, in certain cases, extend to holders who hold their securities in street name. The Wind Down Entity Representative may refuse to make a distribution to any holder of the Lender Wind Down Claim and the Wind Down Entity Interests that fails to furnish such information in a timely fashion, until such information is delivered; provided, however, that, upon the delivery of such information by a holder of the Lender Wind Down Claim and the Wind Down Entity Interests, the Wind Down Entity Representative shall make such distribution to which the holder of the Lender Wind Down Claim and the Wind Down Entity Interests is entitled, without interest; and, provided, further, that, if the Wind Down Entity Representative fails to withhold in respect of amounts received or distributable with respect to any such holder and the Wind Down Entity Representative is later held liable for the amount of such withholding, such holder shall reimburse the Wind Down Entity Representative for such liability.

d.    Foreign Tax Matters. The Wind Down Entity Representative shall duly comply on a timely basis with all obligations, and satisfy all liabilities, imposed on the Wind Down Entity Representative or the Wind Down Entity under non-United States law relating to Taxes. The Wind Down Entity Representative, or any other legal representative of the Wind Down Entity, shall not distribute the Post-Effective Date Assets or proceeds thereof without having first obtained all certificates required to have been obtained under applicable non-United States law relating to Taxes.

e.    Dissolution. The Wind Down Entity Board and the Wind Down Entity shall be dissolved at such time as (i) all of the Post-Effective Date Assets have been distributed pursuant to the Plan and the Wind Down Entity Agreement, (ii) the Wind Down Entity Representative determines, in consultation with the Wind Down Entity Board, that the administration of any remaining Post-Effective Date Assets is not likely to yield sufficient additional Wind Down Entity proceeds to justify further pursuit or (iii) all distributions required to be made by the Wind Down Entity Representative under the Plan and the Wind Down Entity Agreement have been made; provided, however, that in no event shall the Wind Down Entity be dissolved later than five years from the Effective Date unless the Court, upon motion within the

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six-month period prior to the fifth anniversary (or within the six-month period prior to the end of an extension period), determines that a fixed period extension (not to exceed two years, including any prior extensions, without a favorable private letter ruling from the Internal Revenue Service or an opinion of counsel satisfactory to the Wind Down Entity Representative that any further extension would not adversely affect the status of the Wind Down Entity as a liquidating trust for U.S. federal income tax purposes) is necessary to facilitate or complete the recovery and liquidation of the Post-Effective Date Assets.

Upon dissolution of the Wind Down Entity, the Wind Down Entity Representative shall distribute any remaining proceeds from the monetization of the Post-Effective Date Assets and any remaining amount of the Initial Wind Down Funding Amount (a) first, to satisfy the remaining amount of the Lender Wind Down Claim, if any, and (b) then, to the holders of the Wind Down Entity Equity Interests in accordance with their respective percentage interests, subject to the priorities otherwise set forth herein in the Wind Down Entity Waterfall if Class 7 HERO Common Stock votes to accept the Plan.

Notwithstanding the foregoing paragraph, if, at any time, the Wind Down Entity Representative determines, in reliance upon such professionals as the Wind Down Entity Representative may retain and in consultation with the Wind Down Entity Board, that the expense of administering the Wind Down Entity so as to make a final distribution on account of Lender Wind Down Claim and/or to the holders of Wind Down Entity Interests is likely to exceed the value of the assets remaining in the Wind Down Entity, the Wind Down Entity Representative may apply to the Court for authority to (i) reserve any amount necessary to dissolve the Wind Down Entity, (ii) donate any balance to a charitable organization (A) described in section 501(c)(3) of the Tax Code, (B) exempt from U.S. federal income tax under section 501(a) of the Tax Code, (C) not a “private foundation,” as defined in section 509(a) of the Tax Code and (D) that is unrelated to the Debtors, the Wind Down Entity and any insider of the Wind Down Entity Representative and (iii) dissolve the Wind Down Entity.

18.    Disputed Claims Reserve. On the Effective Date, the Wind Down Entity shall establish and fund the Disputed Claims Reserve with Cash in an amount approved by the Court. The Disputed Claims Reserve shall be maintained in trust for holders of Priority Tax Claims, Non-Priority Tax Claims, Other Secured Claims and General Unsecured Claims not yet Allowed as of the Effective Date and not paid prior to the Effective Date or as part of the distributions provided for under the Plan. Each such Claim shall be paid in full in Cash from funds held in the Disputed Claims Reserve as soon as practicable after the date on which such Claim becomes an Allowed Claim. Such Claims shall be paid first from amounts in the Disputed Claims Reserve and then from the assets of the Wind Down Entity only if no funds remain in the Disputed Claims Reserve. When all such Claims have been paid in full, amounts remaining in the Disputed Claims Reserve, if any, shall be returned to the Wind Down Entity and shall be used by the Wind Down Entity Board to (a) first, satisfy the remaining amount of Rejection Shareholder Cash Distribution, if any, (b) then, satisfy the remaining amount of the Lender Wind Down Claim, if any, and (c) then, to the holders of the Wind Down Entity Equity Interests in accordance with their respective percentage interests. For the avoidance of doubt, Administrative Claims shall not be paid from the Disputed Claims Reserve.

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19.    Allowed Claims Reserve. On the Effective Date, the Wind Down Entity shall establish and fund the Allowed Claims Reserve with Cash in an amount equal to the amount of all Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Non-Priority Tax Claims, Allowed Other Secured Claims and Allowed General Unsecured Claims that are not otherwise paid on or prior to the Effective Date. The Allowed Claims Reserve shall be maintained in trust for holders of Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Non-Priority Tax Claims, Allowed Other Secured Claims and Allowed General Unsecured Claims not otherwise paid on or prior to the Effective Date. Each such Claim shall be paid in full in Cash from funds held in the Allowed Claims Reserve as soon as practicable after the Effective Date. Such Claims shall be paid first from amounts in the Allowed Claims Reserve and then from the assets of the Wind Down Entity only if no funds remain in the Allowed Claims Reserve. When all such Claims have been paid in full, amounts remaining in the Allowed Claims Reserve, if any, shall be returned to the Wind Down Entity and shall be used by the Wind Down Entity Board to (a) first, satisfy the Rejection Shareholder Cash Distribution remaining amount, if any, (b) then, satisfy the remaining amount of the Lender Wind Down Claim, if any, and (c) then, to the holders of the Wind Down Entity Equity Interests in accordance with their respective percentage interests.

C. Preservation of Causes of Action.

Unless any Cause of Action against an Entity is expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or a Final Order, in accordance with Bankruptcy Code section 1123(b), the Debtors shall convey to the Wind Down Entity all rights to commence, prosecute or settle, as appropriate, any and all Causes of Action, whether arising before or after the Petition Date, which shall vest in the Wind Down Entity pursuant to the terms of the Plan and the Wind Down Entity Agreement. The Wind Down Entity may enforce all rights to commence, prosecute, or settle, as appropriate, any and all Causes of Action, whether arising before or after the Petition Date, and the Wind Down Entity’s rights to commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date. The Wind Down Entity may pursue such Causes of Action and may retain and compensate professionals in the analysis or pursuit of such Causes of Action to the extent the Wind Down Entity deems appropriate, including on a contingency fee basis. No Entity may rely on the absence of a specific reference in the Plan or the Disclosure Statement to any Cause of Action against them as any indication that the Debtors or the Wind Down Entity will not pursue any and all available Causes of Action against them. The Debtors and the Wind Down Entity expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as otherwise expressly provided in the Plan. Unless any Cause of Action against an Entity is expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or a Final Order, the Wind Down Entity expressly reserves all Causes of Action for later adjudication, and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of the Confirmation or Consummation. The Wind Down Entity reserves and shall retain the foregoing Causes of Action notwithstanding the rejection of any Executory Contract or Unexpired Lease during the Chapter 11 Cases or pursuant to the Plan. The Wind Down Entity shall have the exclusive right, authority, and discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action, or to decline to do any of the foregoing, without the consent or approval of any third party or any further notice to or action, order, or approval of the Court.

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D. Corporate Action.

Upon the Effective Date or as soon thereafter as reasonably practicable, after (a) making distributions provided for under the Plan and (b) the vesting of the Post-Effective Date Assets in the Wind Down Entity, the Debtors shall be deemed to have been dissolved and terminated and all of the remaining assets of the Debtors shall be transferred to the Wind Down Entity.

Upon the Effective Date, the terms of all directors and officers of all Debtors shall be deemed to have expired, all such directors and officers shall be released of their duties, and all actions in furtherance of the Plan shall be deemed authorized, approved, and, to the extent taken prior to the Effective Date, ratified without any requirement for further action by the Debtors, holders of Claims or Equity Interests, directors, managers, or officers of the Debtors, or any other Entity or Person, including the transfer of assets of the Debtors to the Wind Down Entity and the dissolution or winding up of the Debtors. The directors and officers of the Debtors and the Wind Down Entity, as applicable, shall be authorized to execute, deliver, file, or record such contracts, instruments, release, and other agreements or documents and take such other actions as they may deem in their sole discretion necessary or appropriate to effectuate and implement the provisions of the Plan. The authorizations and approvals contemplated by Article IV.D of the Plan shall be effective notwithstanding any requirements under nonbankruptcy law.

E. Cancellation of Certain Indebtedness, Agreements, and Existing Securities.

On the Effective Date, except as otherwise specifically provided for in the Plan, the obligations of the Debtors under the Restructuring Support Agreement, the First Lien Credit Agreement and any other certificate, share, note, bond, indenture, purchase right, option, warrant, or other instrument or document directly or indirectly evidencing or creating any indebtedness or obligation of or ownership interest in any of the Debtors giving rise to any Claim or Equity Interest or any option, warrant, or right, contractual or otherwise, to acquire an Equity Interest (except such certificates, notes, or other instruments or documents evidencing indebtedness or obligations of any Debtors that are specifically reinstated pursuant to the Plan), shall be cancelled as to any such Debtors, and the Wind Down Entity shall not have any continuing obligations thereunder; and the obligations of any of the Debtors pursuant, relating, or pertaining to any agreements, indentures, certificates of designation, by-laws, or certificate or articles of incorporation or similar documents governing the Restructuring Support Agreement, the First Lien Credit Agreement and any other shares, certificates, notes, bonds, purchase rights, options, warrants, or other instruments or documents evidencing or creating any indebtedness or obligation of any of the Debtors (except such agreements, certificates, notes, or other instruments evidencing indebtedness or obligations of any Debtors that are specifically reinstated pursuant to the Plan or assumed by any such Debtors) shall be released and discharged; provided, however, that, notwithstanding the occurrence of the Confirmation Date or the Effective Date, any such agreement that governs the rights of the holder of a Claim shall continue in effect solely for purposes of (a) allowing holders of such Claims to receive distributions under the Plan as provided herein, (b) resolving disputes with respect to the allowance of any Claim, (c) allowing

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the First Lien Agent to make distributions under the Plan as provided herein, and deduct therefrom such reasonable compensation, fees, and expenses due thereunder or incurred in making such distributions, to the extent not paid by the Debtors and authorized under such agreement, and (d) allowing the First Lien Agent to seek compensation and/or reimbursement of fees and expenses in accordance with the terms of the Plan. For the avoidance of doubt, nothing in this section shall affect the discharge of or result in any obligation, liability, or expense of the Debtors or the Wind Down Entity, or affect the discharge of Claims or Equity Interests pursuant to the Bankruptcy Code, the Confirmation Order, or the Plan, or result in any additional obligation, expense, or liability of the Debtors or the Wind Down Entity. On and after the Effective Date, all duties and responsibilities of the First Lien Agent shall be discharged except to the extent required to effectuate the Plan.

F. Substantive Consolidation for Plan Purposes Only.

The Plan shall serve as a motion by the Debtors seeking entry of a Court order substantively consolidating the Debtors’ Estates into a single consolidated Estate, solely for all purposes associated with Confirmation and Consummation of the Plan. Upon Confirmation, for Plan purposes only, on the Effective Date, the Debtors shall be deemed merged into HERO, and (a) all assets and liabilities of the Debtors shall be deemed merged into HERO, (b) all guaranties of any Debtor of the payment, performance, or collection of the obligations of another Debtor shall be eliminated and cancelled, (c) any obligation of any Debtor and all guaranties thereof executed by one or more of the other Debtors shall be treated as a single obligation, and such guaranties shall be deemed a single Claim against the consolidated Debtors, (d) all joint obligations of two or more Debtors, and all multiple Claims against such Entities on account of such joint obligations shall be treated and allowed only as a single Claim against the consolidated Debtors, and (e) each Claim filed in the Chapter 11 Cases of any Debtor shall be deemed filed against the consolidated Debtors and a single obligation of the Debtors on and after the Effective Date. Entry of the Confirmation Order will constitute the approval, pursuant to Bankruptcy Code section 105(a), effective as of the Effective Date, of the deemed substantive consolidation of the Chapter 11 Cases of the Debtors for purposes of voting on, confirmation of, and distributions under the Plan.

Notwithstanding the foregoing, the deemed consolidation and substantive consolidation (each for Plan purposes only) shall not (other than for purposes related to funding distributions under the Plan) affect (a) the legal and organizational structure of the Debtors or the Wind Down Entity, (b) the allowance or disallowance of any Claim, the treatment therefor or improve or impair the rights of the holder of any Claim or Equity Interest or the rights of the Debtors or the Wind Down Entity to dispute the allowance of or object to any Claim or Equity Interest, (c) pre- and post-Petition Date guaranties, Liens and security interests that were required to be maintained (i) in connection with any executory contracts or unexpired leases that were entered into during the Chapter 11 Cases or that have been or will be assumed by the Debtors or (ii) pursuant to the Plan, (d) distributions out of any insurance policies or proceeds of such policies, and (e) the tax treatment of the Debtors. Furthermore, notwithstanding the foregoing, the deemed consolidation and substantive consolidation (each for Plan purposes only), shall not affect the statutory obligation of each and every Debtor to pay quarterly fees to the U.S. Trustee pursuant to 28 U.S.C. §1903(a)(6) and Article II.D of the Plan.

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In the event that the Court does not order such deemed substantive consolidation of the Debtors, then except as specifically set forth in the Plan (a) nothing in the Plan or the Disclosure Statement shall constitute or be deemed to constitute an admission that one of the Debtors is subject to or liable for any Claim against any other Debtor, (b) Claims against multiple Debtors shall be treated as separate Claims against each applicable Debtor for all purposes (including, without limitation, distributions and voting) and such Claims shall be administered as provided in the Plan, (c) the Debtors shall not, nor shall they be required to, resolicit votes with respect to the Plan and (d) the Debtors may seek confirmation of the Plan as if the Plan is a separate Plan for each of the Debtor.

G. Section 1145 Exemption.

The offering, issuance, and distribution of the Wind Down Entity Interests, to the extent such interests constitute or may be deemed to constitute securities under applicable U.S. securities law, shall be exempt from the registration and prospectus delivery requirements of the Securities Act and any other applicable state and federal law requiring registration and/or delivery of a prospectus prior to the offering, issuance, distribution, or sale of securities pursuant to Bankruptcy Code section 1145.

H. Effectuating Documents; Further Transactions.

On and after the Effective Date, the Wind Down Entity and the Wind Down Entity Board, are authorized to and may issue, execute, deliver, file or record such contracts, securities, instruments, releases and other agreements or documents and take such actions as may be necessary or appropriate to effectuate, implement and further evidence the terms and conditions of the Plan, the Lender Wind Down Claim and the Wind Down Entity Interests issued pursuant to the Plan, without the need for any approvals, authorization, or consents except for those expressly required pursuant to the Plan.

I. No Further Approvals.

The transactions contemplated by the Plan shall be approved and effective as of the Effective Date without the need for any further state or local regulatory approvals or approvals by any non-Debtor parties, and without any requirement for further action by the Debtors, the Wind Down Entity, or any entity created to effectuate the provisions of the Plan.

J. Pre-Effective Date Injunctions or Stays.

All injunctions or stays, whether by operation of law or by order of the Court, provided for in the Chapter 11 Cases pursuant to Bankruptcy Code sections 105 or 362 or otherwise that are in effect on the Confirmation Date shall remain in full force and effect until the Effective Date.

K. Intercompany Claims.

Notwithstanding anything to the contrary herein, Intercompany Claims will be adjusted, continued or discharged to the extent determined appropriate by the Debtors and the Requisite Consenting Lenders in their reasonable discretion. The rights of any Debtor with

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respect to any Intercompany Claim that is not discharged on the Effective Date shall be transferred to the Wind Down Entity on the Effective Date without any further action by the Debtors or the Wind Down Entity. Each Debtor that holds an Intercompany Claim shall be entitled to account for such Intercompany Claim in its books and records as an asset of such Debtor. The Debtors, with the consent of the Requisite Consenting Lenders, which consent shall not be unreasonably withheld, and, after the Effective Date, the Wind Down Entity, shall have the right to retain any Intercompany Claim, or effect such transfers and setoffs with respect to Intercompany Claims and Intercompany Interests as they may deem appropriate for accounting, tax and commercial business purposes, to the fullest extent permitted by applicable law.

L. Claims By/Against Non-Debtor Subsidiaries.

Any Claim, Cause of Action, or remedy asserted by any Debtor against any Non-Debtor Subsidiary or any Non-Debtor Subsidiary against any Debtor shall be, as of the Effective Date, reinstated, adjusted (including by contribution, distribution in exchange for new debt or equity, or otherwise), paid, continued, cancelled, or discharged to the extent determined appropriate by the applicable Debtor or the Wind Down Entity and applicable Non-Debtor Subsidiary, as applicable, subject to the consent of the Requisite Consenting Lenders, which consent shall not be unreasonably withheld. Any such transaction may be effectuated prior to, on or subsequent to the Effective Date without any further action by the Court or by the holders of Wind Down Entity Interests.

M. Existing Benefits Agreements and Retiree Benefits.

Except as such benefits may be otherwise treated by the Debtors in a manner permissible under applicable law or ordered by the Court during the pendency of the Chapter 11 Cases or in connection with Confirmation, all Existing Benefits Agreements and other retiree benefit programs (if any) shall be deemed rejected immediately prior to the Consummation of the Plan on the Effective Date or as otherwise may be agreed by the Debtors and the other parties thereto.

N. Severance and Incentive Plan; Employment Agreements.

On the Effective Date, the existing employment agreements for each of the Executives shall be rejected, and each of the Executives shall be granted, in accordance with Bankruptcy Code section 502(b)(7), an Allowed General Unsecured Claim in an amount equal to the amount of the base salary (as of May 26, 2016) and benefits provided by their respective employment agreements, without acceleration, for one year following the Petition Date, plus any unpaid base salary, unpaid benefits and unpaid expense reimbursements due under such employment agreements, without acceleration, as of the Petition Date; provided, however, that (i) the aggregate amount of the portions of all such Allowed General Unsecured Claims of the Executives related to base salary (excluding unpaid base salary) shall not exceed $2.09 million, and (ii) the amount of the portion of each such Allowed General Unsecured Claim of an Executive related to benefits (excluding unpaid benefits) shall not exceed $24,000.

Any employment agreement or similar benefits agreement between any executive, contractor or other employee that is not an Executive and any Debtor shall, unless otherwise

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agreed among the Debtors and the Requisite Consenting Lenders, be rejected immediately prior to the Effective Date of the Plan unless otherwise agreed among such executive, contractor or other employee and the Requisite Consenting Lenders.

O. Indemnification of Directors, Officers, and Employees.

Notwithstanding any other provisions of the Plan, from and after the Effective Date, indemnification obligations owed by the Debtors or the Wind Down Entity to directors, officers, or employees of the Debtors who served or were employed by the Debtors before, on or after the Petition Date, to the extent provided in the articles or certificates of incorporation, by-laws or similar constituent documents, by statute or by written agreement, policies or procedures of the Debtors, will be deemed to be, and treated as though they are, Executory Contracts that are assumed pursuant to the Plan and Bankruptcy Code section 365. All such indemnification obligations shall survive confirmation of the Plan, remain unaffected thereby, and not be discharged, irrespective of whether indemnification, defense, reimbursement or limitation is owed in connection with an event occurring before, on, or after the Petition Date.

Director and officer insurance will continue in place for the directors and officers of all of the HERO Entities during the Chapter 11 Cases on existing terms. After the Effective Date, the Wind Down Entity shall not terminate or otherwise reduce the coverage under any director and officer insurance policies (including any “tail policy”) then in effect. Directors and officers shall be indemnified by the Wind Down Entity to the extent of such insurance. Any modifications, amendments, or the procuring of director and officer insurance shall require reasonable consent by the Requisite Consenting Lenders.

P. Fees and Expenses of the Ad Hoc Group and the First Lien Agent.

On the Effective Date, the Debtors shall pay all unpaid reasonable and documented fees and expenses of Kirkland & Ellis LLP and White & Case LLP, as counsel to the Ad Hoc Group, White & Case LLP, as counsel to Luminus Management LLC and Soros Fund Management LLC, and Klehr, Harrison, Harvey, Branzburg LLP, as local counsel to the Ad Hoc Group, and 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 reasonable fees and expenses incurred by the First Lien Agent, including the unpaid reasonable and documents fees and expenses of King & Spalding LLP, as restructuring counsel, White & Case LLP as counsel with respect to the administration of the First Lien Credit Agreement and other Loan Documents (as defined in the First Lien Credit Agreement), special maritime counsel and Bayard, P.A., as local counsel, in each case incurred in connection with the Restructuring.

ARTICLE V.

SETTLEMENT, RELEASE, INJUNCTION AND RELATED PROVISIONS

A. General Settlement of Claims and Interests.

Pursuant to Bankruptcy Code section 363 and Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided pursuant to the Plan, the provisions of the Plan shall constitute a good faith compromise of all Claims, Equity Interests and controversies relating to the contractual, legal, and subordination rights that a holder of a Claim may have with respect to any Allowed Claim, or any distribution to be made on account of such Allowed Claim.

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Without limiting the foregoing, the provisions of the Plan shall, upon Consummation, constitute a good faith compromise and settlement, pursuant to Bankruptcy Rule 9019 and Bankruptcy Code section 1123, among the Debtors, the Non-Debtor Subsidiaries and the holders of First Lien Claims of any and all disputes among the parties or any Causes of Action of the Debtors, the Estates or the Non-Debtor Subsidiaries against the holders of First Lien Claims and the consideration therefor shall consist of the receipt by the holders of First Lien Claims of the releases contemplated by Article V of the Plan in exchange for their agreement to compromise their First Lien Claims as set forth herein (including through the Mediation Settlement, their agreement to the Rejection Shareholder Cash Distribution and the reduction by the First Lien Claim Reduction Amount of Cash to be distributed on account of the Allowed First Lien Claims), and their enabling holders of Allowed General Unsecured Claims to be paid in full under the Plan and the holders of HERO Common Stock to receive their Pro Rata share of (a) the Shareholder Effective Date Cash Distribution and 100% of the Class B Wind Down Entity Interests, if Class 7 HERO Common Stock votes to accept the Plan or (b) the Rejection Shareholder Cash Distribution and 100% of the Rejection Wind Down Entity Interests, if Class 7 HERO Common Stock votes to reject the Plan, notwithstanding the fact that (x) the Rejection Shareholder Cash Distribution will be distributed to holders of HERO Common Stock prior to any distribution on the Rejection Lender Wind Down Claim and (y) holders of First Lien Claims will not be paid in full as a result of their agreement to reduce the amount of the Rejection Lender Wind Down Claim by the First Lien Claim Reduction Amount. For the avoidance of doubt, upon Consummation, the Plan shall also constitute a good faith compromise and settlement of the objections to the First Lien Claims set forth in the First Lien Claim Objection and any and all Claims and Causes of Actions addressed in the Standing Motion. In the event that, for any reason, the Confirmation Order is not entered or the Effective Date does not occur, the Debtors, the Non-Debtor Subsidiaries and the holders of First Lien Claims reserve all of their respective rights with respect to any and all disputes that would have been resolved and settled under the Plan (including in connection with the Mediation Settlement) had the Effective Date occurred.

The entry of the Confirmation Order shall constitute the Court’s approval of each of the compromises and settlements embodied in the Plan (including the Mediation Settlement), and the Court’s findings shall constitute its determination that such compromises and settlements are in the best interests of the Debtors, their Estates, creditors, holders of HERO Common Stock and other parties-in-interest, and are fair, equitable, and within the range of reasonableness. The Plan and the Confirmation Order shall have res judicata, collateral estoppel, and estoppel (judicial, equitable, or otherwise) effect with respect to all matters provided for, or resolved pursuant to, the Plan and/or the Confirmation Order, including, without limitation, the release, injunction, exculpation, and compromise provisions contained in the Plan and/or the Confirmation Order. The provisions of the Plan, including, without limitation, its release, injunction, exculpation and compromise provisions, are mutually dependent and non-severable.

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B. Subordination of Claims

The allowance, classification and treatment of all Allowed Claims and Equity Interests and the respective distributions and treatments under the Plan take into account and conform to the relative priority and rights of the Claims and Equity Interests in each Class in connection with any contractual, legal, and equitable subordination rights relating thereto. However, the Debtors reserve the right to reclassify any Allowed Claim or Equity Interest in accordance with any contractual, legal or equitable subordination relating thereto, unless otherwise provided in a settlement agreement concerning such Allowed Claim or Equity Interest.

C. Release of Liens.

Except as otherwise expressly provided in the Plan, or in any contract, instrument, release, or other agreement or document created pursuant to the Plan, on the Effective Date and concurrently with the applicable distributions made pursuant to the Plan, all mortgages, deeds of trust, Liens, pledges, and other security interests against any property of the Debtors’ Estates shall be fully released and discharged, and all of the right, title, and interest of any holder of such mortgages, deeds of trust, Liens, pledges, and other security interests shall revert to the Wind Down Entity and each of their successors and assigns.

D. Releases by the Debtors.

Except as otherwise specifically provided in the Plan, for good and valuable consideration, including the service of the Released Parties to facilitate the wind down of the Debtors, the implementation of the transactions contemplated by the Restructuring Support Agreement and the Plan and the compromises contained herein, on and after the Effective Date, the Released Parties are hereby released and discharged by the Debtors, the Wind Down Entity, the Non-Debtor Subsidiaries, and the Estates, including any successor to the Debtors or any Estate representative from all claims, obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, including any derivative claims asserted or assertable on behalf of a Debtor, whether known or unknown, foreseen or unforeseen, liquidated or unliquidated, contingent or fixed, existing or hereafter arising, in law, at equity or otherwise, whether for indemnification, tort, contract, violations of federal or state securities laws or otherwise, including, those that any of the Debtors, the Non-Debtor Subsidiaries, the Wind Down Entity or the Estates would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the holder of any Claim or Equity Interest or any other Person, based on or relating to, or in any manner arising from, in whole or in part, the Debtors and their Non-Debtor Subsidiaries, the Estates, the conduct of the businesses of the Debtors and their Non-Debtor Subsidiaries, the Chapter 11 Cases, the Escrow Release Payment, the defaults and events of default described in the Forbearance Agreement, the purchase, sale or rescission of the purchase or sale of any security of the Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Equity Interest that is treated in the Plan, the resolution or payment of Claims and Equity Interests prior to or during the Chapter 11 Cases, the negotiation, formulation or preparation of the Restructuring Support Agreement, the Plan, the Plan Supplement, the Disclosure Statement, the Wind Down Entity Agreement, the

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documents evidencing the Lender Wind Down Claims, the Forbearance Agreement or, in each case, related agreements, instruments or other documents, any action or omission with respect to Intercompany Claims, any action or omission as an officer, director, agent, representative, fiduciary, controlling person, affiliate or responsible party, or any transaction entered into or affecting, a Non-Debtor Subsidiary, or upon any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date of the Plan, other than claims or liabilities arising out of or relating to any act or omission of a Released Party to the extent such act or omission is determined by a Final Order to have constituted gross negligence or willful misconduct.

E. Releases by Holders of Claims and Equity Interests.

Except as otherwise specifically provided in the Plan, for good and valuable consideration, including the service of the Released Parties to facilitate the wind down of the Debtors, the implementation of the transactions contemplated by the Restructuring Support Agreement or the Plan, and the compromises contained herein, on and after the Effective Date, to the fullest extent permitted by applicable law, the Releasing Parties shall be deemed to conclusively, absolutely, unconditionally, irrevocably and forever release, waive and discharge the Released Parties of any and all claims, obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, including: any derivative claims asserted or assertable on behalf of a Debtor or a Non-Debtor Subsidiary, whether known or unknown, foreseen or unforeseen, liquidated or unliquidated, contingent or fixed, existing or hereafter arising, in law, at equity or otherwise, whether for indemnification, tort, contract, violations of federal or state securities laws or otherwise, including, those that any of the Debtors, the Non-Debtor Subsidiaries, the Wind Down Entity or the Estates would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the holder of any Claim or Equity Interest or any other Person, based on or relating to, or in any manner arising from, in whole or in part, the Debtors and their Non-Debtor Subsidiaries, the Estates, the conduct of the businesses of the Debtors and their Non-Debtor Subsidiaries, the Chapter 11 Cases, the Escrow Release Payment, the defaults and events of default described in the Forbearance Agreement, the purchase, sale or rescission of the purchase or sale of any security of the Debtors, the Non-Debtor Subsidiaries or the Wind Down Entity, the subject matter of, or the transactions or events giving rise to, any Claim or Equity Interest that is treated in the Plan, the resolution or payment of Claims and Equity Interests prior to or during the Chapter 11 Cases, the negotiation, formulation or preparation of the Restructuring Support Agreement, the Plan, the Plan Supplement, the Disclosure Statement, the Wind Down Entity Agreement, the documents evidencing the Lender Wind Down Claim, the Forbearance Agreement or, in each case, related agreements, instruments or other documents, any action or omission with respect to Intercompany Claims, any action or omission as an officer, director, agent, representative, fiduciary, controlling person, affiliate or responsible party, or any transaction entered into or affecting, a Non-Debtor Subsidiary, or upon any other act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date of the Plan, other than claims or liabilities arising out of or relating to any act or omission of a Released Party to the extent such act or omission is determined by a Final Order to have constituted gross negligence or willful misconduct.

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Each Person providing releases under the Plan, including the Debtors, the Wind Down Entity, the Non-Debtor Subsidiaries, the Estates and the Releasing Parties, shall be deemed to have granted the releases set forth in those sections notwithstanding that such Person may hereafter discover facts in addition to, or different from, those which it now knows or believes to be true, and without regard to the subsequent discovery or existence of such different or additional facts, and such Person expressly waives any and all rights that it may have under any statute or common law principle which would limit the effect of such releases to those claims or Causes of Action actually known or suspected to exist at the time of execution of such release.

F. Exculpation.

Notwithstanding anything herein to the contrary and to the extent permitted by applicable law, the Exculpated Parties shall neither have nor incur any liability to any Entity for any Plan-Related Action; provided that nothing in the foregoing “Exculpation” shall exculpate any Entity from any liability resulting from any act or omission that is determined by Final Order to have constituted fraud, willful misconduct, gross negligence, or criminal conduct; provided, further, that each Exculpated Party shall be entitled to rely upon the advice of counsel concerning his, her or its duties pursuant to, or in connection with, the Plan or any other related document, instrument, or agreement.

Notwithstanding anything herein to the contrary, as of the Effective Date, pursuant to Bankruptcy Code section 1125(e), the Solicitation Parties upon appropriate findings of the Court will be deemed to have solicited acceptance of the Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code, and to have participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code, in the offer, issuance, sale, or purchase of a security, offered or sold under the Plan of a Wind Down Entity, and shall not be liable to any Entity on account of such solicitation or participation.

In addition to the protections afforded in Article V.F of the Plan to the Exculpated Parties, and not in any way reducing or limiting the application of such protections, the Court retains exclusive jurisdiction over any and all Causes of Action for any Plan-Related Action that are not otherwise exculpated or enjoined by the Plan.

G. Injunction.

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THE PLAN, THE PLAN SUPPLEMENT OR RELATED DOCUMENTS, OR FOR OBLIGATIONS ISSUED PURSUANT TO THE PLAN, ALL PERSONS WHO HAVE HELD, HOLD, OR MAY HOLD CLAIMS OR EQUITY INTERESTS THAT HAVE BEEN RELEASED PURSUANT TO THE PLAN OR ARE SUBJECT TO EXCULPATION PURSUANT TO ARTICLE V OF THE PLAN ARE PERMANENTLY ENJOINED, FROM AND AFTER THE EFFECTIVE DATE, FROM TAKING ANY OF THE FOLLOWING ACTIONS AGAINST, AS APPLICABLE, THE DEBTORS, THE WIND DOWN ENTITY, OR THE RELEASED PARTIES: (1) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING OF ANY KIND ON ACCOUNT OF OR IN CONNECTION WITH OR WITH

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RESPECT TO ANY SUCH CLAIMS, CAUSES OF ACTION, OR EQUITY INTERESTS; (2) ENFORCING, ATTACHING, COLLECTING, OR RECOVERING BY ANY MANNER OR MEANS ANY JUDGMENT, AWARD, DECREE, OR ORDER AGAINST SUCH RELEASED PARTIES ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH CLAIMS, CAUSES OF ACTION, OR EQUITY INTERESTS; (3) CREATING, PERFECTING, OR ENFORCING ANY ENCUMBRANCE OF ANY KIND AGAINST SUCH RELEASED PARTIES OR AGAINST THE PROPERTY OR ESTATES OF SUCH RELEASED PARTIES ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH CLAIMS, CAUSES OF ACTION, OR EQUITY INTERESTS; (4) ASSERTING ANY RIGHT OF SETOFF OR SUBROGATION OF ANY KIND AGAINST ANY OBLIGATION DUE FROM ANY OF THE DEBTORS, WIND DOWN ENTITY, OR NON-DEBTOR SUBSIDIARIES OR AGAINST THE PROPERTY OR INTERESTS IN PROPERTY OF ANY OF THE DEBTORS, THE WIND DOWN ENTITY, OR NON-DEBTOR SUBSIDIARIES ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH CLAIMS, CAUSES OF ACTION, OR EQUITY INTERESTS; AND (5) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING OF ANY KIND ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH CLAIMS, CAUSES OF ACTION, OR EQUITY INTERESTS RELEASED OR SETTLED PURSUANT TO THE PLAN OR CONFIRMATION ORDER.

H. Limitations on Exculpations and Releases.

Notwithstanding anything contained herein to the contrary, the releases and exculpation contained herein do not release any obligations of any party arising under the Plan or any document, instrument or agreement (including those set forth in the Wind Down Entity Agreement, in respect of the Lender Wind Down Claim, and the Plan Supplement) executed to implement the Plan.

I. Preservation of Insurance.

Nothing in the Plan shall diminish or impair the enforceability of any insurance policy that may provide coverage for claims against the Debtors, the Wind Down Entity, the Non-Debtor Subsidiaries, their current and former directors and officers, or any other Person.

ARTICLE VI.

DISTRIBUTIONS UNDER THE PLAN

A. Procedures for Treating Disputed Claims.

1.    Filing Proofs of Claim. In the event that a holder of a Claim files a proof of Claim with the Court, it will be deemed to have consented to the exclusive jurisdiction of the Court for all purposes with respect to the determination, liquidation, allowance, or disallowance of such Claim, except as otherwise ordered by the Court or provided herein.

2.    Disputed Claims. If the Debtors or Wind Down Entity dispute any Claim as to which no proof of Claim has been filed, such dispute shall be determined, resolved, or adjudicated, as the case may be, in a manner as if the Chapter 11 Cases had not been commenced, provided, however, that the Debtors or the Wind Down Entity may elect to object under Bankruptcy Code section 502 to any proof of Claim filed by or on behalf of a holder of a Claim.

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3.    Objections to Claims. Except insofar as a Claim is Allowed under the Plan or has already been paid by the Debtors in the ordinary course of business pursuant to an order of the Court, after the Confirmation Date to the Effective Date, the Debtors and, after the Effective Date, the Wind Down Entity, shall have exclusive authority to object to Claims. Notwithstanding the foregoing, the Debtors and the Wind Down Entity shall be entitled to dispute and/or otherwise object to any Claim in accordance with applicable law, including Bankruptcy Code section 502. If the Debtors or the Wind Down Entity disputes any Claim as to which no proof of Claim has been filed, such dispute shall be determined, resolved, or adjudicated, as the case may be, in the manner as if the Chapter 11 Cases had not been commenced. From and after the Effective Date, the Wind Down Entity may settle or compromise any Disputed Claims without any further notice to or action, order or approval of the Court or any other party, and the Wind Down Entity Representative shall have the sole authority to administer and adjust the Claims Register to reflect any such settlements or compromises without any further notice or action, order or approval of the Court. In any action or proceeding to determine the existence, validity, or amount of any Claim, any and all claims or defenses that could have been asserted by the applicable Debtor(s) or the Entity holding such Claim are preserved as if the Chapter 11 Cases had not been filed.

4.    Expunged Claims. Except as provided herein or otherwise agreed, any and all proofs of Claim (other than proofs of Claim filed on account of Specified Claims or Rejection Damage Claims) shall be deemed expunged from the claims register on the Effective Date without any further notice to or action, order, or approval of the Court and the Claim on which such proof of Claim was filed shall be determined, resolved, or adjudicated, as the case may be, in the manner as if the Chapter 11 Cases had not been commenced and shall survive the Effective Date as if the Chapter 11 Cases had not been commenced.

B. Allowed Claims and Equity Interests.

1.    Delivery of Distributions in General. Except as otherwise provided herein, distributions under the Plan shall be made by the Debtors or the Wind Down Entity (or their agents or designees) to the holders of Allowed Claims and HERO Common Stock in all Classes for which a distribution is provided in the Plan at the addresses set forth on the Schedules (if filed) or in the Debtors’ books and records, as applicable, unless such addresses are superseded by proofs of Claim or Equity Interests or transfers of Claim filed pursuant to Bankruptcy Rule 3001 by the Record Date (or at the last known addresses of such holders if the Debtors or the Wind Down Entity have been notified in writing of a change of address). Neither the Debtors nor the Wind Down Entity shall be required to, but may in its sole and absolute discretion, make any payment on account of any Claim or Equity Interest in the event that the costs of making such payment exceeds the amount of such payment.

2.    Delivery of Distributions to First Lien Claims. Distributions under the Plan to holders of First Lien Claims shall be made by the Debtors or the Wind Down Entity to the First Lien Agent, which, in turn, shall make the distributions to the First Lien Lenders.

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3.    Distribution of Cash. Any payment of Cash by the Debtors or the Wind Down Entity pursuant to the Plan shall be made at the option and in the sole discretion of the Debtors or the Wind Down Entity by (i) a check drawn on, or (ii) wire transfer from, a domestic bank selected by the Debtors or the Wind Down Entity.

4.    Unclaimed Distributions of Cash. Any distribution of Cash under the Plan that is unclaimed after six (6) months after it has been delivered (or attempted to be delivered) shall, pursuant to Bankruptcy Code section 347(b), become the property of the Wind Down Entity notwithstanding any state or other escheat or similar laws to the contrary, and the entitlement by the holder of such unclaimed Allowed Claim or Allowed Equity Interest to such distribution or any subsequent distribution on account of such Allowed Claim or Allowed Equity Interest shall be extinguished and forever barred.

5.    Distributions of Wind Down Entity Interests. On or shortly following the Effective Date, the Debtors or the Wind Down Entity (or their agents or designees) shall notify the holders of the Wind Down Entity Interests of their applicable Wind Down Entity Interests.

6.    Unclaimed Distributions of Wind Down Entity Interests. Any notice of Wind Down Entity Interests under the Plan that is returned and thereafter unclaimed after six (6) months after it has been delivered (or attempted to be delivered) shall be retained by the Wind Down Entity and then cancelled, notwithstanding any state or other escheat or similar laws to the contrary, and the entitlement by the holder of such Allowed First Lien Claim or HERO Common Stock to such distribution or any subsequent distribution on account of such Allowed First Lien Claim or HERO Common Stock shall be extinguished and forever barred.

7.    Saturdays, Sundays, or Legal Holidays. If any payment, distribution or act under the Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on the next succeeding Business Day, and shall be deemed to have been completed as of the required date.

8.    Fractional Wind Down Entity Interests. Notwithstanding any other provision in the Plan to the contrary, no fractional Wind Down Entity Interests shall be issued or distributed pursuant to the Plan. Whenever any distribution of a fraction of a Wind Down Entity Interest would otherwise be required under the Plan, the actual distribution made shall reflect a rounding of such fraction to the nearest whole share or warrant (up or down), with half Wind Down Entity Interests or less being rounded down and fractions in excess of a half of a Wind Down Entity Interest being rounded up. No consideration will be provided in lieu of fractional Wind Down Interests that are rounded down.

9.    Distributions to Holders of Claims:

(a)    Initial Distribution to Claims Allowed as of the Effective Date. On or as soon as reasonably practicable after the Effective Date, or as otherwise expressly set forth in the Plan, the Debtors or the Wind Down Entity (or their agents or designees) shall distribute Cash to the holders of Allowed Claims as contemplated herein.

(b)    Claims Allowed after the Effective Date. Each holder of a Claim that becomes an Allowed Claim subsequent to the Effective Date shall receive the distribution to

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which such holder of an Allowed Claim is entitled as set forth in Article III of the Plan, and distributions to such holder shall be made in accordance with the provisions of the Plan. As soon as practicable after the date that the Claim becomes an Allowed Claim, the Wind Down Entity shall provide to the holder of such Claim the distribution (if any) to which such holder is entitled under the Plan as of the Effective Date, without any interest to be paid on account of such Claim.

10.    Special Rules for Distributions to Holders of Disputed Claims. Notwithstanding any provision otherwise in the Plan and except as otherwise agreed to by the relevant parties, no partial payments and no partial distributions shall be made with respect to a Disputed Claim until all such disputes in connection with such Disputed Claim have been resolved by settlement or Final Order. Distributions made on account of any Disputed Claim that becomes an Allowed Claim shall be made from the Disputed Claims Reserve until it is exhausted.

11.    Interest on Claims and Equity Interests. Except as specifically provided for in the Plan, no Claims or Equity Interests, Allowed or otherwise (including Administrative Claims), shall be entitled, under any circumstances, to receive any interest on a Claim or Equity Interests.

C. Allocation of Consideration.

The aggregate consideration to be distributed to the holders of Allowed Claims in each Class under the Plan shall be treated as first satisfying an amount equal to the principal amount of the Allowed Claim for such holders, and any remaining consideration as satisfying accrued, but unpaid interest, as applicable.

D. Estimation.

Prior to or after the Effective Date, the Debtors or the Wind Down Entity, as applicable, may (but are not required to), at any time, request that the Court estimate (i) any Disputed Claim pursuant to Bankruptcy Code section 502(c) or (ii) any contingent or unliquidated Claim pursuant to Bankruptcy Code section 502(c), for any reason, regardless of whether the Debtors have or the Wind Down Entity has previously objected to such Claim or whether the Court has ruled on any such objection. The Court will retain jurisdiction to estimate any Claim at any time, including during proceedings concerning any objection to such Claim. In the event that the Court estimates any Claim, such estimated amount shall constitute either (i) the Allowed amount of such Claim, (ii) the amount on which a reserve is to be calculated for purposes of any reserve requirement under the Plan or (iii) a maximum limitation on such Claim, as determined by the Court. If the estimated amount constitutes the maximum limitation on such Claim, the Debtors or the Wind Down Entity, as the case may be, may elect to object to any ultimate allowance of such Claim. All of the aforementioned objection, estimation, and resolution procedures are cumulative and not necessarily exclusive of one another.

E. Insured Claims.

If any portion of an Allowed Claim is an Insured Claim, no distributions under the Plan shall be made on account of such Allowed Claim until the holder of such Allowed Claim has exhausted all remedies with respect to any applicable insurance policies. To the extent that

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the Debtors’ insurers agree to satisfy a Claim in whole or in part, then immediately upon such agreement, the portion of such Claim so satisfied may be expunged without an objection to such Claim having to be filed and without any further notice to or action, order or approval of the Court.

ARTICLE VII.

RETENTION OF JURISDICTION

Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, on and after the Effective Date, except as otherwise set forth in the Plan, the Court shall retain exclusive jurisdiction over all matters arising out of, or related to, the Chapter 11 Cases and the Plan pursuant to Bankruptcy Code sections 105(a) and 1142, including jurisdiction:

(i)    to resolve any matters related to (a) the assumption, assumption and assignment, or rejection of any Executory Contract or Unexpired Lease to which one or more of the Debtors or the Wind Down Entity is party or with respect to which the Debtors or the Wind Down Entity may be liable and to hear, determine, and, if necessary, liquidate, any Claims arising therefrom, including Cure Claims pursuant to Bankruptcy Code section 365; and (b) any dispute regarding whether a contract or lease is or was executory or expired;

(ii)    to determine, adjudicate, or decide any other applications, adversary proceedings, contested matters, and any other matters pending on the Effective Date;

(iii)    to ensure that distributions to holders of Allowed Claims and HERO Common Stock are accomplished as provided herein;

(iv)    to resolve disputes as to the ownership of any Claim or HERO Common Stock;

(v)    to allow, disallow, determine, liquidate, classify, estimate, or establish the priority, secured or unsecured status, or amount of any Claim or Equity Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any and all objections to the secured or unsecured status, priority, amount, or allowance of Claims or HERO Common Stock;

(vi)    to enter and implement such orders as may be appropriate in the event the Confirmation Order is for any reason stayed, revoked, reversed, modified, or vacated;

(vii)    to issue such orders in aid of execution of the Plan, to the extent authorized by Bankruptcy Code section 1142;

(viii)    to consider any modifications of the Plan, to cure any defect or omission, or to reconcile any inconsistency in any order of the Court, including the Confirmation Order;

(ix)    to hear and determine all applications for compensation and reimbursement of expenses of Professionals under Bankruptcy Code sections 330, 331, and 503(b) and any disputes arising in connection with adequate protection payments in respect of professional fees for prepetition secured parties;

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(x)    to hear and determine disputes arising in connection with the interpretation, implementation, Consummation, or enforcement of the Plan, including the release of the Guarantee Claims;

(xi)    to hear and determine any issue for which the Plan requires a Final Order of the Court;

(xii)    to hear and determine matters concerning state, local, and federal Taxes in accordance with Bankruptcy Code sections 346, 505, and 1146;

(xiii)    to hear and determine any Causes of Action preserved under the Plan;

(xiv)    to hear and determine any matter, case, controversy, suit, dispute, or Cause of Action (if any) (i) regarding the existence, nature, and scope of the discharge, releases, injunctions, and exculpation provided under the Plan, and (ii) enter such orders as may be necessary or appropriate to implement such discharge, releases, injunctions, exculpations, and other provisions;

(xv)    to enter a final decree closing the Chapter 11 Cases;

(xvi)    to issue injunctions, enter and implement other orders, or take such other actions as may be necessary or appropriate to restrain interference by any entity with Consummation or enforcement of the Plan;

(xvii)    to enforce all orders previously entered by the Court; and

(xviii)    to hear any other matter not inconsistent with the Bankruptcy Code.

For the avoidance of doubt, the Court shall not retain exclusive jurisdiction with respect to the following documents entered into by the Wind Down Entity on or after the Effective Date: (i) the Wind Down Entity Agreement; and (ii) the documents evidencing the Lender Wind Down Claim.

ARTICLE VIII.

EXECUTORY CONTRACTS AND UNEXPIRED LEASES

A. Assumption and Rejection of Executory Contracts and Unexpired Leases.

Except for Executory Contracts and Unexpired Leases specifically designated as assumed on the Schedule of Assumed Executory Contracts and Unexpired Leases, each Executory Contract and Unexpired Lease shall be deemed rejected as of the Effective Date under Bankruptcy Code section 365. The Confirmation Order, if not by a separate order entered by the Bankruptcy Court, will constitute an order of the Court approving the assumption or rejection of Executory Contracts and Unexpired Leases pursuant to Bankruptcy Code sections 365 and 1123 as of the Effective Date.

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The assumption of any Executory Contracts and Unexpired Leases in the Chapter 11 Cases or otherwise through the Confirmation Order (or other order by the Bankruptcy Court) may include the assignment of certain of such contracts to the Wind Down Entity or the Non-Debtor Subsidiaries, each of which shall be deemed to have provided adequate assurance of future performance pursuant to section 365(b) of the Bankruptcy Code in accordance with the terms of this Plan. Except as otherwise provided herein or agreed to by the Debtors (with the consent of the Requisite Consenting Lenders, which consent shall not be unreasonably withheld) and the applicable counterparty, each assumed Executory Contract or Unexpired Lease shall include all modifications, amendments, supplements, restatements, or other agreements related thereto, and all rights related thereto, if any, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, and any other interests. Modifications, amendments, supplements, and restatements to prepetition Executory Contracts and Unexpired Leases that have been executed by the Debtors during the Chapter 11 Cases shall not be deemed to alter the prepetition nature of the Executory Contract or Unexpired Lease or the validity, priority, or amount of any Claims that may arise in connection therewith.

B. Cure Claims.

At the election of the Debtors (with the reasonable consent of the Requisite Consenting Lenders) or the Wind Down Entity, as applicable, any monetary defaults under each Executory Contract and Unexpired Lease to be assumed and assigned under the Plan shall be satisfied pursuant to Bankruptcy Code section 365(b)(1) in one of the following ways: (i) payment of the Cure Claim in Cash on or as soon as reasonably practicable following the occurrence of (A) thirty (30) days after the determination of the Cure Claim, and (B) the Effective Date or such other date as may be set by the Court; or (ii) on such other terms as agreed to by the Debtors (with the reasonable consent of the Requisite Consenting Lenders) or the Wind Down Entity and the non-Debtor counterparty to such Executory Contract or Unexpired Lease.

In the event of a dispute pertaining to assumption or assignment, the Cure Claim payments required by Bankruptcy Code section 365(b)(1) shall be made following the entry of a Final Order or orders resolving the dispute and approving the assumption. No later than the Plan Supplement Filing Date, to the extent not previously filed with the Court and served on affected counterparties, the Debtors shall provide for notices (in form and substance reasonably acceptable to the Requisite Consenting Lenders) of proposed assumption and proposed cure amounts to be sent to applicable contract and lease counterparties, together with procedures for objecting thereto and resolution of disputes by the Court (in form and substance reasonably acceptable to the Requisite Consenting Lenders). Any objection by a contract or lease counterparty to a proposed assumption or related cure amount must be filed, served, and actually received by the Debtors and counsel to the Ad Hoc Group by the date on which objections to Confirmation are due (or such other date as may be provided in the applicable assumption notice). Any counterparty to an Executory Contract or Unexpired Lease that fails to object timely to the proposed assumption or cure amount will be deemed to have assented to such assumption or cure amount.

The only adequate assurance of future performance of any executory contract or unexpired lease that is assumed in connection with the Plan shall be the promise of the Wind Down Entity or applicable Non-Debtor Subsidiary to perform all obligations under any executory contract or unexpired lease under the Plan.

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ASSUMPTION OF ANY EXECUTORY CONTRACT OR UNEXPIRED LEASE PURSUANT TO THE PLAN OR OTHERWISE SHALL RESULT IN THE FULL RELEASE AND SATISFACTION OF ANY CLAIMS OR DEFAULTS, WHETHER MONETARY OR NONMONETARY, INCLUDING DEFAULTS OF PROVISIONS RESTRICTING THE CHANGE IN CONTROL OR OWNERSHIP INTEREST COMPOSITION OR OTHER BANKRUPTCY-RELATED DEFAULTS, ARISING UNDER ANY ASSUMED EXECUTORY CONTRACT OR UNEXPIRED LEASE AT ANY TIME BEFORE THE DATE ANY OF THE DEBTORS OR THE WIND DOWN ENTITY ASSUMES SUCH EXECUTORY CONTRACT OR UNEXPIRED LEASE. ANY PROOFS OF CLAIM FILED WITH RESPECT TO AN EXECUTORY CONTRACT OR UNEXPIRED LEASE THAT HAS BEEN ASSUMED SHALL BE DEEMED DISALLOWED AND EXPUNGED, WITHOUT FURTHER NOTICE TO OR ACTION, ORDER OR APPROVAL OF THE COURT.

Obligations arising under insurance policies assumed by any of the Debtors before the Effective Date shall be adequately protected in accordance with any order authorizing such assumption.

C. Rejection and Repudiation of Executory Contracts and Unexpired Leases.

On the Effective Date, each Executory Contract and Unexpired Lease, including any Existing Benefits Agreement, that is not listed on the Schedule of Assumed Executory Contracts and Unexpired Leases shall be deemed rejected or repudiated pursuant to Bankruptcy Code section 365. Each contract or lease not listed on the Schedule of Assumed Executory Contracts and Unexpired Leases shall be rejected only to the extent that such contract or lease constitutes an Executory Contract or Unexpired Lease. Until the Effective Date, the Debtors expressly reserve their right to amend the Schedule of Assumed Executory Contracts and Unexpired Leases to delete any Executory Contract or Unexpired Lease therefrom or to add any Executory Contract or Unexpired Lease thereto. Listing a contract or lease on the Schedule of Assumed Executory Contracts and Unexpired Leases shall not constitute an admission by the Debtors or the Wind Down Entity that such contract or lease is an Executory Contract or Unexpired Lease or that such Debtor or the Wind Down Entity, as applicable, has any liability thereunder. The Debtors or the Wind Down Entity, as applicable, may abandon any personal property that may be located at any premises that are subject to any rejected Unexpired Lease.

D. Rejection Damage Claims.

If the rejection or repudiation of an Executory Contract or Unexpired Lease prior to the Confirmation Date results in a Rejection Damage Claim, then such Rejection Damage Claim shall be forever barred and shall not be enforceable against the Debtors or the Wind Down Entity or their properties, or any of their interests in properties as agent, successor or assign, unless a proof of Claim is filed with the Claims and Noticing Agent and served upon counsel to the Debtors or the Wind Down Entity, as applicable, in accordance with the order of the Court approving the rejection or repudiation of such Executory Contract or Unexpired Lease.

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If the rejection or repudiation of an Executory Contract or Unexpired Lease pursuant to the Plan results in a Rejection Damage Claim, then such Rejection Damage Claim shall be forever barred and shall not be enforceable against the Debtors or the Wind Down Entity or their properties, or any of their interests in properties as agent, successor or assign, unless a proof of Claim is filed with the Claims and Noticing Agent and served upon counsel to the Debtors or the Wind Down Entity, as applicable, within thirty (30) days after the later of (i) service of the Confirmation Order and (ii) service of notice of the effective date of rejection or repudiation of the Executory Contract or Unexpired Lease. The Debtors shall give notice of the bar date established by Article VIII.D of the Plan to the non-Debtor counterparties to the Executory Contracts, including any Existing Benefits Agreements, and Unexpired Leases that are not identified in the Schedule of Assumed Executory Contracts and Unexpired Leases by service of the Plan, the Confirmation Order, or otherwise. Unless otherwise provided herein, the Wind Down Entity shall object to such Rejection Damage Claims by the Claims Objection Deadline.

E. Reservation of Rights.

Nothing contained in the Plan shall constitute an admission by the Debtors that any such contract or lease is in fact an Executory Contract or Unexpired Lease or that the Wind Down Entity has any liability thereunder. If there is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of assumption, the Debtors (with the reasonable consent of the Requisite Consenting Lenders) or the Wind Down Entity, as applicable, shall have 45 days following entry of a Final Order resolving such dispute to alter their treatment of such contract or lease, in which case the deemed assumptions and rejections provided for in the Plan shall not apply to such contract or lease.

F. Assignment.

Any Executory Contract or Unexpired Lease to be held by any of the Debtors and assumed hereunder or otherwise in the Chapter 11 Cases, if not expressly assigned to a third party previously in the Chapter 11 Cases, will be deemed assigned to the Wind Down Entity pursuant to Bankruptcy Code section 365. If an objection to a proposed assumption, assumption and assignment, or Cure Claim is not resolved in favor of the Debtors before the Effective Date, the applicable Executory Contract or Unexpired Lease may be designated by the Debtors (with the reasonable consent of the Requisite Consenting Lenders) or the Wind Down Entity for rejection within five (5) Business Days of the entry of the order of the Court resolving the matter against the Debtors. Such rejection shall be deemed effective as of the Effective Date.

G. Insurance Policies.

Notwithstanding anything in the Plan to the contrary, all of the Debtors’ insurance policies and any agreements, documents or instruments relating thereto, are treated as and deemed to be Executory Contracts under the Plan. On the Effective Date, the Debtors shall be deemed to have assumed all insurance policies and any agreements, documents, and instruments related thereto.

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H. Postpetition Contracts and Leases.

All contracts, agreements, and leases that were entered into by one or more of the Debtors or assumed by any of the Debtors after the Petition Date shall be deemed assigned by the applicable Debtor(s) to the Wind Down Entity on the Effective Date.

ARTICLE IX.

EFFECTIVENESS OF THE PLAN

A. Conditions Precedent to Effectiveness.

The Plan shall not become effective unless and until the Confirmation Date has occurred and the following conditions have been satisfied in full or waived in accordance with Article IX.B of the Plan:

1.    Each of the Plan, the Disclosure Statement and the Plan Supplement (including any amendments, modifications, supplements, exhibits or schedules related to any of the foregoing) and any other Definitive Documents shall be substantially consistent in all respects with the terms and conditions of the Restructuring Support Agreement and otherwise in form and substance reasonably acceptable to the Debtors and the Requisite Consenting Lenders.

2.    The Confirmation Order shall be a Final Order that is not stayed and shall have been entered in a form that is substantially consistent in all respects with the terms and conditions of the Restructuring Support Agreement and otherwise reasonably acceptable to the Debtors and the Requisite Consenting Lenders.

3.    All actions, documents and agreements necessary to consummate the Plan (including, but not limited to, the execution and issuance of the documents evidencing the Lender Wind Down Claim and the issuance of the Wind Down Entity Interests) shall have been effected or executed and delivered to the required parties and, to the extent required, filed with the applicable government units in accordance with applicable law.

4.    The Restructuring Support Agreement shall not have been terminated in accordance with its terms.

5.    The Forbearance Agreement shall not have been terminated in accordance with its terms.

6.    The Limited Bar Date shall have occurred in accordance with the Restructuring Support Agreement, and the aggregate amount of all Specified Claims not otherwise previously estimated by the Debtors in their Schedule of Specified Claims shall be (i) as agreed by the Debtors and the relevant claimant, with the consent of the Requisite Consenting Lenders, or (ii) allowed for estimation purposes only (but as an aggregate cap on the amount that may be distributed on account of such Specified Claims) by an order of the Bankruptcy Court; provided that such condition to Consummation may be waived by the Requisite Consenting Lenders in their sole discretion.

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7.    The amount of the Specified Claims estimated by the Debtors in their Schedule of Specified Claims filed with the Bankruptcy Court plus the amount of the Unscheduled Specified Claims shall not exceed $33 million; provided that such condition to Consummation may be waived by the Requisite Consenting Lenders in their sole discretion.

B. Waiver of Conditions Precedent to Effectiveness.

The Debtors, with the written consent of the Requisite Consenting Lenders, may waive conditions set forth in Article IX.A of the Plan, other than the Confirmation Order having been entered and the conditions set forth in Articles IX.A.6 and IX.A.7 of the Plan, at any time without leave of or order of the Court and without any formal action. The conditions set forth in Articles IX.A.6 and IX.A.7 of the Plan may be waived by the Requisite Consenting Lenders in their sole discretion.

C. Effect of Failure of Conditions.

In the event that the Effective Date does not occur on or before August 16, 2016, upon notification submitted by the Requisite Consenting Lenders to the Debtors and the Court: (i) the Confirmation Order may be vacated, (ii) no distributions under the Plan shall be made; (iii) the Debtors and all holders of Claims and Equity Interests shall be restored to the status quo ante as of the day immediately preceding the Confirmation Date as though the Confirmation Date had never occurred; and (iv) the Debtors’ obligations with respect to the Claims and Equity Interests shall remain unchanged and nothing contained in the Plan shall constitute or be deemed a waiver, release, or discharge of any Claims or Equity Interests by or against the Debtors or any other person or to prejudice in any manner the rights of the Debtors or any person in any further proceedings involving the Debtors unless extended by Court order.

D. Vacatur of Confirmation Order.

If a Final Order denying confirmation of the Plan is entered, or if the Confirmation Order is vacated, then the Plan shall be null and void in all respects, and nothing contained in the Plan shall: (i) constitute a waiver, release, or discharge of any Claims or Equity Interests; (ii) prejudice in any manner the rights of the holder of any Claim or Equity Interest; (iii) prejudice in any manner any right, remedy, or claim of the Debtors or the Non-Debtor Subsidiaries; or (iv) be deemed an admission against interest by the Debtors or the Non-Debtor Subsidiaries.

E. Modification of the Plan.

Subject to the limitations contained in the Plan, and subject to the terms of the Restructuring Support Agreement, (i) the Debtors reserve the right, in accordance with the Bankruptcy Code and the Bankruptcy Rules, to amend or modify the Plan prior to the entry of the Confirmation Order, including amendments or modifications to satisfy Bankruptcy Code section 1129(b), and (ii) after entry of the Confirmation Order, the Debtors or the Wind Down Entity, as the case may be, may, upon order of the Court, amend or modify the Plan, in accordance with Bankruptcy Code section 1127(b). Notwithstanding the foregoing, the Confirmation Order shall authorize the Debtors (with the reasonable consent of the Requisite Consenting Lenders) or the Wind Down Entity, as the case may be, to make appropriate

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technical adjustments, remedy any defect or omission, or reconcile any inconsistencies in the Plan, the documents included in the Plan Supplement, any and all exhibits to the Plan, and/or the Confirmation Order, as may be necessary to carry out the purposes and effects of the Plan, provided, however, that such action does not materially and adversely affect the treatment of holders of Allowed Claims or Equity Interests pursuant to the Plan.

F. Revocation, Withdrawal, or Non-Consummation.

1.    Right to Revoke or Withdraw. The Debtors reserve the right to revoke or withdraw the Plan at any time before the Effective Date, subject to the terms of the Restructuring Support Agreement; provided, however, that this provision shall have no impact on the rights of the Consenting First Lien Lenders, as set forth in the Restructuring Support Agreement, in respect of any such revocation or withdrawal.

2.    Effect of Withdrawal, Revocation, or Non-Consummation. If the Debtors revoke or withdraw the Plan prior to the Effective Date, or if the Confirmation Date or the Effective Date does not occur, the Plan, any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain any Claim or Equity Interest or Class of Claims or Equity Interests), the assumption or rejection of Executory Contracts, Unexpired Leases or benefit plans effected by the Plan, any release, exculpation, or indemnification provided for in the Plan, and any document or agreement executed pursuant to the Plan shall be null and void. In such event, nothing contained herein, and no acts taken in preparation for Consummation of the Plan shall be deemed to constitute a waiver or release of any Claims by or against or Equity Interests in the Debtors or any other Person, to prejudice in any manner the rights of the Debtors or any Person in any further proceedings involving the Debtors, or to constitute an admission of any sort by the Debtors or any other Person.

ARTICLE X.

MISCELLANEOUS PROVISIONS

A. Immediate Binding Effect.

Notwithstanding Bankruptcy Rules 3020(e), 6004(h), 7062, or otherwise, upon the occurrence of the Effective Date, the terms of the Plan shall be immediately effective and enforceable and deemed binding upon the Debtors, the Wind Down Entity, and any and all holders of Claims or Equity Interests (irrespective of whether such Claims or Equity Interests are deemed to have accepted the Plan), all Entities that are parties to or are subject to the settlements, compromises, releases, discharges, and injunctions described in the Plan, each Entity acquiring property under the Plan, and any and all non-Debtor parties to Executory Contracts and Unexpired Leases with any of the Debtors. The rights, benefits and obligations of any Entity named or referred to in the Plan shall be binding on, and shall inure to the benefit of, any heir, executor, administrator, successor or assign of such Entity.

B. Governing Law.

Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules), the laws of the State of Delaware (without reference to the conflicts of laws provisions thereof that would require or permit the application of the law of

58

another jurisdiction) shall govern the construction and implementation of the Plan and any agreements, documents, and instruments executed in connection with the Plan, unless otherwise specified.

C. Dissolution of the Committee

On the Effective Date, the Equity Committee shall dissolve and all members, employees, or agents thereof shall be released and discharged from all rights and duties arising from or related to the Chapter 11 Cases. The Wind Down Entity shall not be responsible for paying any fees or expenses incurred by the members of or advisors to the Equity Committee after the Effective Date.

D. Filing or Execution of Additional Documents.

On or before the Effective Date or as soon thereafter as is practicable, the Debtors or the Wind Down Entity shall (on terms materially consistent with the Plan) file with the Court or execute, as appropriate, such agreements and other documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan, which agreements and documents shall be substantially consistent in all respects with the terms and conditions of the Restructuring Support Agreement and otherwise in from and substance reasonably acceptable to the Debtors and the Requisite Consenting Lenders.

E. Term of Injunctions or Stays.

Except as otherwise set forth in the Plan, all injunctions or stays provided for in the Chapter 11 Cases under Bankruptcy Code sections 105 or 362, or otherwise, and in existence on the Confirmation Date, shall remain in full force and effect until the Effective Date.

F. Withholding and Reporting Requirements.

In connection with the Plan and all instruments issued in connection therewith and distributions thereon, the Debtors and the Wind Down Entity shall comply with all withholding and reporting requirements imposed by any U.S. federal, state, local, or non-U.S. taxing authority and all distributions hereunder shall be subject to any such withholding and reporting requirements. Notwithstanding any provision in the Plan to the contrary, the Wind Down Entity shall be authorized to take all actions necessary or appropriate to comply with such withholding and reporting requirements, including liquidating a portion of the distribution to be made under the Plan to generate sufficient funds to pay applicable withholding Taxes, withholding distribution pending receipt of information necessary or appropriate to facilitate such distributions, or establishing any other mechanisms they believe are reasonable and appropriate.

G. Exemption From Transfer Taxes.

Pursuant to, and to the fullest extent permitted by, Bankruptcy Code section 1146(a), all transfers of property pursuant hereto, including (i) the transfer of the Post-Effective Date Assets to the Wind Down Entity, (ii) the issuance, transfer, or exchange under the Plan of Wind Down Entity Interests and the security interests in favor of the Wind Down Entity, (iii) the making or assignment of any lease or sublease, or (iv) the making or delivery of any other

59

instrument whatsoever, in furtherance of or in connection with the Plan, shall not be subject to any stamp, conveyance, mortgage, sales or use, real estate transfer, recording, or other similar tax or governmental assessment, and upon entry of the Confirmation Order, the appropriate state or local governmental officials or agents shall forgo the collection of any such tax or governmental assessment and accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax, recordation fee, or governmental assessment.

H. Plan Supplement.

All exhibits and documents included in the Plan Supplement are incorporated into and are a part of the Plan as if set forth in full in the Plan. The documents contained in the Plan Supplement shall be available online at www.pacer.gov and http://cases.primeclerk.com/herculesinfo. Holders of Claims or Equity Interests may obtain a copy of the Plan Supplement upon written request to counsel to the Debtors. The Debtors reserve the right, in accordance with the terms hereof, and subject to the terms of the Restructuring Support Agreement, to modify, amend, supplement, restate, or withdraw any part of the Plan Supplement after they are filed and shall promptly make such changes available online at www.pacer.gov and http://cases.primeclerk.com/herculesinfo.

I. Notices.

All notices, requests, and demands hereunder to be effective shall be made in writing or by e-mail, and unless otherwise expressly provided herein, shall be deemed to have been duly given when actually delivered or, in the case of notice by facsimile transmission, when received and telephonically confirmed. Each of such notices shall be addressed as follows:

1.    To the Debtors: Hercules Offshore Inc., 9 Greenway Plaza, Suite 2200, Houston, TX 77046, Attn: Beau M. Thompson, General Counsel, Tel.: (713) 350-8301, Fax: (713) 350-5109, with a copy to Akin Gump Strauss Hauer & Feld LLP, One Bryant Park, Bank of America Tower, New York, NY 10036-6745, Attn: Michael S. Stamer, Esq. and Philip C. Dublin, Esq., Tel: (212) 872-1000, Fax: (212) 872-1002, e-mail: mstamer@akingump.com and pdublin@akingump.com.

2.    To the Ad Hoc Group: Kirkland & Ellis LLP, 601 Lexington Avenue, New York, NY 10022, Attn: Brian S. Lennon, Esq. and Robert A. Britton, Esq., Tel: (212) 446-4800, Fax: (212) 446-4900, e-mail: brian.lennon@kirkland.com and robert.britton@kirkland.com.

3.    To the U.S. Trustee: (i) if by mail to: Office of The United States Trustee, 844 King Street, Suite 2207, Lockbox 35, Wilmington, DE 19801, Tel.: (302) 573-6491, Fax: (302) 573-6497.

J. Conflicts.

The terms of the Plan shall govern in the event of any inconsistency between the Plan and the Disclosure Statement. In the event of any inconsistency with the Plan and the Confirmation Order, the Confirmation Order shall govern with respect to such inconsistency.

60

Dated: October 18, 2016

HERCULES OFFSHORE INC.
on behalf of itself and all other Debtors
By:	/s/ John Rynd
Name:	John Rynd
Title:	Chief Executive Officer and President

EX-99.1

Exhibit 99.1

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 1 of 39

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
		Reporting Period:	JUL. 1 - JUL. 31, 2016

MONTHLY OPERATING REPORT

File with Court and submit copy to United States Trustee within 20 days after end of month.

REQUIRED DOCUMENTS	Form No.	Document Attached	Explanation Attached
Schedule of Cash Receipts and Disbursements	MOR-1	Yes
Bank Reconciliation (or copies of debtor’s bank reconciliations)	MOR-1 (CON’T)	Yes
Schedule of Professional Fees Paid	MOR-lb	Yes
Copies of bank statements		No	Note 1
Cash disbursements journals		No	Note 1
Statement of Operations	MOR-2	Yes
Balance Sheet	MOR-3	Yes
Status of Post-petition Taxes		No	Note 2
Copies of IRS Form 6123 or payment receipt		No	Note 1
Copies of tax returns filed during reporting period		No	Note 1
Summary of Unpaid Post-petition Debts	MOR-4	Yes
Listing of Aged Accounts Payable	MOR-4	Yes
Accounts Receivable Reconciliation and Aging	MOR-5	Yes
Debtor Questionnaire	MOR-5	Yes

(1) Due to the system constraints and/or the volume of the records, no attachment is provided, but is available to the UST upon request.

(2) The Company is current on all tax payments.

I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the attached documents are true and correct to the best of my knowledge and belief.

Signature of Debtor	Date
Signature of Joint Debtor	Date
/s/ Troy Carson	8/22/16
Signature of Authorized Individual*	Date
/s/ Troy Carson	SVP & CFO
Printed Name of Authorized Individual	Title of Authorized Individual

* Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 2 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-1: SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

HERCULES OFFSHORE, INC., ET AL. DEBTOR

	Current Month						Cumulative Filing to Date
	Actual			Projected1			Actual			Projected1
Beginning Cash	$	160,705,001		$	156,579,035		$	207,705,799		$	208,311,591
RECEIPTS
Total Receipts		3,502,121			3,175,782			6,998,870			6,471,315
DISBURSEMENTS
Personnel Costs		5,277,448			4,991,330			11,487,073			12,665,828
Premises Rents		202,923			217,200			398,846			473,300
Insurance		5,055,121			2,551,612			5,226,698			3,384,112
Taxes		2,941			61,260			8,742			143,153
Utilities		121,872			114,848			222,099			213,973
Vendors and Others		1,220,206			3,201,408			2,181,769			6,567,941
Ordinary Course Professional Fees		224,248			334,100			226,730			334,100
Restructuring Professional Fees2		1,380,828			905,000			1,438,277			905,000
U.S. Trustee Quarterly Fees		88,575			—			88,575			—
Adequate Protection Debt and Assurance		2,882,900			3,107,490			45,675,799			45,824,931
Total Disbursements		16,457,062			15,484,248			66,954,608			70,512,337
CASH INTERNAL TRANSFER
Total Internal Transfer		4,685,787			—			4,685,787			—
Net Cash Flow		(8,269,154	)		(12,308,466	)		(55,269,951	)		(64,041,022	)
Ending Cash3	$	152,435,848		$	144,270,569		$	152,435,848		$	144,270,569

(1) Projected amounts are based on the forecasted weekly activity for the week ending 7/2 through the week ending 7/30 and interest payment that was forecast to be paid on 7/31 from the 13-week cash flow forecast filed in the Cash Collateral Motion.

(2) Restructuring professional fees include estate professional fees and lender professional fees.

(2) Ending Cash balance excludes petty cash and collateral accounts.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 3 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-1a: BANK RECONCILIATIONS

Legal Entry1	Bank Name	Account Function	Account #	USD Balance as of 7/31
Hercules Offshore, Inc.	Amegy Bank of Texas, N.A.	Operating Account	****2838		—
Hercules Offshore, Inc.	Amegy Bank of Texas, N.A.	Flexible Spending Claims	****7288		—
Hercules Offshore, Inc.	Amegy Bank of Texas, N.A.	Singapore Operating Account	****0935		—
Hercules Offshore, Inc.	HSBC	Checking Account	****2845		5,184,679
Hercules Offshore, Inc.	HSBC	Investment Account	****1393		75,259,384
Hercules Offshore, Inc.	Amegy Bank of Texas, N.A.	Hercules Offshore Inc. Utilities	****1193		58,193
Cliffs Drilling Company	Amegy Bank of Texas, N.A.	Operating Account	****1649		—
Cliffs Drilling Company	HSBC	Local Operations	****1001		11,880
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Operating Account	****4656		13,981,501
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Payables	****5850		—
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Cayman Investment Sweep Account	****4656		—
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Money Market Investment Account	****8200		—
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Cayman Self Directed Investment Account	****2321		—
Hercules Drilling Company, LLC	Capital One Bank	Investment Account	****7684		33,186,811
Hercules Drilling Company, LLC	Comerica Bank	Investment Account	****8881		25,179,953
Hercules Offshore Services LLC	Amegy Bank of Texas, N.A.	Payroll Account	****5069		—
TODCO Americas Inc.	Amegy Bank of Texas, N.A.	Operating Account	****8930		—

Notes:

(1) Includes only Debtor entity bank accounts

I attest that each of the Debtors’ corporate bank accounts is reconciled to monthly bank statements. The Company’s standard practice is to ensure that each corporate bank account is reconciled to monthly bank statements for each fiscal month within 30 days after month end. See above listing of each of the Debtors’ bank accounts and the book balance of the account as of the end of the fiscal month covered by this report.

/s/ Troy Carson	/s/ Troy Carson
Authorized Representative	Printed Name of Authorized Representative

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 4 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-1a: BANK RECONCILIATIONS

Legal Entity	Hercules Offshore, Inc.			Hercules Offshore, Inc.			Hercules Offshore, Inc.			Cliffs Drilling Company			Hercules Drilling Company, LLC
Bank Name	HSBC			HSBC			Amegy Bank of Texas, N.A.			HSBC			Amegy Bank of Texas, N.A.
Account #	****2845			****1393			****1193			****1001			****4656
Balance Per Books		$	5,184,679		$	75,259,384		$	58,193		$	11,880		$	13,981,501
Bank Balance		$	5,184,679		$	75,259,384		$	58,193		$	11,880		$	13,981,501
(+) Deposits In Transit			—			—			—			—			—
(-) Outstanding Checks			—			—			—			—			—
Other			—			—			—			—			—
Adjusted Bank Balance		$	5,184,679		$	75,259,384		$	58,193		$	11,880		$	13,981,501
Deposits In Transit	Date	Amount		Date	Amount		Date	Amount		Date	Amount		Date	Amount
		$	—		$	—		$	—		$	—		$	—
			—			—			—			—			—
			—			—			—			—			—
			—			—			—			—			—
Total Deposits In Transit		$	—		$	—		$	—		$	—		$	—
Outstanding Checks	Date	Amount		Date	Amount		Date	Amount		Date	Amount		Date	Amount
		$	—		$	—		$	—		$	—		$	—
			—			—			—			—			—
			—			—			—			—			—
			—			—			—			—			—
Total Outstanding Checks		$	—		$	—		$	—		$	—		$	—
Other	Date	Amount		Date	Amount		Date	Amount		Date	Amount		Date	Amount
		$	—		$	—		$	—		$	—		$	—
			—			—			—			—			—
			—			—			—			—			—
			—			—			—			—			—
Total Other		$	—		$	—		$	—		$	—		$	—

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 5 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-1a: BANK RECONCILIATIONS

Legal Entity Bank Name Account #	Hercules Drilling Company, LLC Amegy Bank of Texas, N.A. ****4656			Hercules Drilling Company, LLC Capital One Bank ****7684			Hercules Drilling Company, LLC Comerica Bank ****8881			Hercules Drilling Company, LLC Amegy Bank of Texas,  N.A.1 ****5850				Hercules Offshore Services LLC Amegy Bank of Texas,  N.A.1 ****5069
Balance Per Books		$	—		$	33,186,811		$	25,179,953		$	(422,969	)		$	(3,584	)
Bank Balance		$	—		$	33,186,811		$	25,179,953		$	—			$	—
(+) Deposits In Transit			—			—			—			—				—
(-) Outstanding Checks			—			—			—			422,969				3,584
Other			—			—			—			—				—
Adjusted Bank Balance		$	—		$	33,186,811		$	25,179,953		$	—			$	—
Deposits In Transit	Date	Amount		Date	Amount		Date	Amount		Date	Amount			Date	Amount
		$	—		$	—		$	—		$	—			$	—
			—			—			—			—				—
			—			—			—			—				—
			—			—			—			—				—
Total Deposits In Transit		$	—		$	—		$	—		$	—			$	—
Outstanding Checks2	Date	Amount		Date	Amount		Date	Amount		Date	Amount			Date	Amount
Total Outstanding Checks		$	—		$	—		$	—		$	422,969			$	3,584
Other		$	—		$	—		$	—		$	—			$	—
			—			—			—			—				—
			—			—			—			—				—
			—			—			—			—				—
			—			—			—			—				—
Total Other		$	—		$	—		$	—		$	—			$	—

(1) The negative book balance in accounts ****5850 and ****5069 are due to those accounts being ZBA accounts in the Amegy bank account structure noted in the Cash Management Motion. As checks clear these bank accounts, funds are made available to those accounts to process checks presented for payment.

(2) Outstanding checks are available to the UST upon request.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 6 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-1b: SCHEDULE OF PROFESSIONAL FEES AND EXPENSES PAID

					Check		Amount Paid				Year-To-Date
Payee	Period Covered	Amount Approved		Payor	Number	Date	Fees		Expenses		Fees		Expenses
Prime Clerk	6/10/16 - 6/30/16	$	438,948.39	Hercules Drilling Company, LLC	None	None	$	83,889.50	$	355,058.89	$	83,889.50	$	355,058.89
Prime Clerk	6/10/16 - 6/30/16		20,121.87	Hercules Drilling Company, LLC	None	None		15,673.50		4,448.37		15,673.50		4,448.37
White & Case	6/10/16 - 6/30/16		573,964.78	Hercules Drilling Company, LLC	None	None		532,688.00		41,276.78		532,688.00		41,276.78
	Pre-petition		170,628.43	Hercules Drilling Company, LLC	None	None		168,686.00		1,942.43		168,686.00		1,942.43
King & Spalding			177,164.59	Hercules Drilling Company, LLC				177,164.59
Prime Clerk	6/10/16 - 6/30/16	$	459,070.26	Hercules Drilling Company, LLC	None	None	$	99,563.00	$	359,507.26	$	99,563.00	$	359,507.26
White & Case	Ending 6/30/16		744,593.21	Hercules Drilling Company, LLC	None	None		701,374.00		43,219.21		701,374.00		43,219.21
King & Spalding	6/7/16 - 6/30/16		177,164.59	Hercules Drilling Company, LLC	None	None		176,563.70		600.89		176,563.70		600.89

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 7 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

The Consolidated Debtor Entities

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	4,804,157		$	9,412,370
Total Revenue		4,804,157			9,412,370
OPERATING EXPENSES
Operating Cost & Expenses		3,637,098			7,223,727
Depreciation & Amortization		688,607			1,377,214
General & Administrative		3,116,850			8,233,101
Total Operating Expenses		7,442,555			16,834,042
Operating Income		(2,638,398	)		(7,421,672	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		(34,149	)		(93,733	)
Interest Expense		2,275,718			132,503,499
Income Taxes (Benefit)		745			(5,434,431	)
Total Other Income and Expenses		2,242,313			126,975,336
Net Profit/(Loss)	$	(4,880,712	)	$	(134,397,007	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 8 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Hercules Offshore, Inc.

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	258,286		$	463,423
Total Revenue		258,286			463,423
OPERATING EXPENSES
Operating Cost & Expenses		(63,463	)		(106,299	)
Depreciation & Amortization		58,333			116,667
General & Administrative		2,888,695			6,581,073
Total Operating Expenses		2,883,565			6,591,441
Operating Income		(2,625,279	)		(6,128,017	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		(18,424	)		(64,732	)
Interest Expense		1,658,728			131,269,519
Income Taxes (Benefit)		745			(4,052,498	)
Total Other Income and Expenses		1,641,049			127,152,290
Net Profit/(Loss)	$	(4,266,327	)	$	(133,280,307	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 9 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Cliffs Drilling Company

REVENUES	Month			Cumulative Filing to Date 1
Revenue	$	—		$	—
Total Revenue		—			—
OPERATING EXPENSES
Operating Cost & Expenses		177,609			386,918
Depreciation & Amortization		—			—
General & Administrative		8,082			31,974
Total Operating Expenses		185,691			418,892
Operating Income		(185,691	)		(418,892	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		2,611			3,282
Interest Expense		—			—
Income Taxes (Benefit)		—			(1,158,886	)
Total Other Income and Expenses		2,611			(1,155,604	)
Net Profit/(Loss)	$	(188,303	)	$	736,712

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 10 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Cliffs Drilling Trinidad L.L.C.

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 11 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

FDT LLC

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 12 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

FDT Holdings LLC

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 13 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Hercules Drilling Company, LLC

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	—		$	—
Total Revenue		—			—
OPERATING EXPENSES
Operating Cost & Expenses		354,217			252,257
Depreciation & Amortization		221,776			443,553
General & Administrative		215,473			486,615
Total Operating Expenses		791,466			1,182,425
Operating Income		(791,466	)		(1,182,425	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		(18,337	)		(32,282	)
Interest Expense		(75,750	)		(151,500	)
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		(94,087	)		(183,782	)
Net Profit/(Loss)	$	(697,380	)	$	(998,643	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 14 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Hercules Offshore Services LLC

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	1,430,437	$	2,723,282
Total Revenue		1,430,437		2,723,282
OPERATING EXPENSES
Operating Cost & Expenses		800,159		1,641,900
Depreciation & Amortization		140,917		281,833
General & Administrative		—		—
Total Operating Expenses		941,076		1,923,733
Operating Income		489,361		799,549
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	489,361	$	799,549

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 15 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Hercules Offshore Liftboat Company LLC

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 16 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

HERO Holdings, Inc.

				Cumulative
REVENUES	Month			Filing to Date1
Revenue	$	—		$	—
Total Revenue		—			—
OPERATING EXPENSES
Operating Cost & Expenses		—			—
Depreciation & Amortization		—			—
General & Administrative		2,156			865,234
Total Operating Expenses		2,156			865,234
Operating Income		(2,156	)		(865,234	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—			—
Interest Expense		692,740			1,385,480
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		692,740			1,385,480
Net Profit/(Loss)	$	(694,896	)	$	(2,250,714	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 17 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

SD Drilling LLC

				Cumulative
REVENUES	Month			Filing to Date1
Revenue	$	1,588,895		$	3,137,187
Total Revenue		1,588,895			3,137,187
OPERATING EXPENSES
Operating Cost & Expenses		1,363,128			3,099,448
Depreciation & Amortization		211,636			423,272
General & Administrative		0			0
Total Operating Expenses		1,574,764			3,522,721
Operating Income		14,131			(385,533	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—			—
Interest Expense		(7,000	)		(14,000	)
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		(7,000	)		(14,000	)
Net Profit/(Loss)	$	21,131		$	(371,533	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 18 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

THE Offshore Drilling Company

			Cumulative
REVENUES	Month		Filing to Date1
Revenue	$	1,526,539	$	3,088,477
Total Revenue		1,526,539		3,088,477
OPERATING EXPENSES
Operating Cost & Expenses		984,088		1,906,786
Depreciation & Amortization		55,944		111,889
General & Administrative		2,446		268,204
Total Operating Expenses		1,042,478		2,286,878
Operating Income		484,061		801,599
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	484,061	$	801,599

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 19 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

THE Onshore Drilling Company

			Cumulative
REVENUES	Month		Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 20 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

TODCO Americas Inc.

				Cumulative
REVENUES	Month			Filing to Date1
Revenue	$	—		$	—
Total Revenue		—			—
OPERATING EXPENSES
Operating Cost & Expenses		21,359			42,718
Depreciation & Amortization		—			—
General & Administrative		—			—
Total Operating Expenses		21,359			42,718
Operating Income		(21,359	)		(42,718	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—			—
Interest Expense		7,000			14,000
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		7,000			14,000
Net Profit/(Loss)	$	(28,359	)	$	(56,718	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 21 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

TODCO International Inc.

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - July 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 22 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

The Consolidated Debtor Entities

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	152,435,848		$	160,705,001
Restricted Cash		—			1,000,000
Accounts Receivable – Trade		13,487,385			11,112,224
Accounts Receivable – Other		164,534			122,367
Due to/from Affiliates		(391,894,570	)		(390,437,258	)
Deposits		—			—
Prepaid & Other		9,554,356			10,412,713
Total Current Assets		(216,252,447	)		(207,084,953	)
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		86,405,855			87,036,128
OTHER ASSETS
Investment in/from Affiliates		1,724,702,689			1,724,702,689
Notes Receivable – Affiliates		959,514,329			959,514,329
Other Assets		5,815,502			5,919,147
Total Other Assets		2,690,032,520			2,690,136,165
Total Assets	$	2,560,185,928		$	2,570,087,340
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	9,616,143		$	13,864,805
Accrued Liabilities		23,193,047			21,847,229
Interest Payable		—			—
Taxes Payable		(1,009,059	)		(1,008,185	)
Other Current Liabilities		90,000			90,000
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		745			(0	)
Notes Payable - Affiliates		499,814,329			499,814,329
Other Liabilities		1,810,748			1,821,295
Total Liabilities Not Subject to Compromise		533,515,952			536,429,473
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		345,733,698			347,883,958
Total Liabilities		879,249,650			884,313,431
SHAREHOLDERS EQUITY
Common Stock		200,041			200,041
Additional Paid-in-Capital		1,681,630,560			1,681,587,480
Contributed Capital		138,844,823			138,844,823
Treasury Stock		(325,548	)		(325,548	)
Retained Earning – Prior Year		(22,848,912	)		(22,848,912	)
Net Income		(116,564,686	)		(111,683,974	)
Net Shareholders Equity		1,680,936,278			1,685,773,910
Total Liabilities and Shareholders Equity	$	2,560,185,928		$	2,570,087,340

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 23 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

Hercules Offshore, Inc.

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	80,502,256		$	55,484,713
Restricted Cash		—			—
Accounts Receivable – Trade		3,564,316			3,700,137
Accounts Receivable – Other		135,027			110,027
Due to/from Affiliates		(590,114,557	)		(557,847,818	)
Deposits		—			—
Prepaid & Other		3,173,474			3,474,336
Total Current Assets		(502,739,485	)		(495,078,606	)
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		756,424,589			756,424,589
Notes Receivable – Affiliates		864,514,329			864,514,329
Other Assets		5,815,502			5,919,147
Total Other Assets		1,626,754,420			1,626,858,065
Total Assets	$	1,124,014,935		$	1,131,779,460
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	4,381,547		$	4,715,689
Accrued Liabilities		1,266,581			1,613,040
Interest Payable		—			—
Taxes Payable		(306,171	)		(305,298	)
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		745			0
Notes Payable - Affiliates		—			—
Other Liabilities		1,810,748			1,821,295
Total Liabilities Not Subject to Compromise		7,153,449			7,844,726
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		340,835,517			343,685,517
Total Liabilities		347,988,967			351,530,244
SHAREHOLDERS EQUITY
Common Stock		200,000			200,000
Additional Paid-in-Capital		588,024,286			587,981,206
Contributed Capital		—			—
Treasury Stock		(325,548	)		(325,548	)
Retained Earning – Prior Year		298,364,810			298,364,810
Net Income		(110,237,579	)		(105,971,252	)
Net Shareholders Equity		776,025,969			780,249,216
Total Liabilities and Shareholders Equity	$	1,124,014,935		$	1,131,779,460

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 24 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

Cliffs Drilling Company

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	11,880		$	13,845
Restricted Cash		—			1,000,000
Accounts Receivable – Trade		(460,950	)		(460,950	)
Accounts Receivable – Other		—			—
Due to/from Affiliates		87,869,820			87,434,486
Deposits		—			—
Prepaid & Other		758,784			851,626
Total Current Assets		88,179,534			88,839,006
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		1,000,000			1,000,000
OTHER ASSETS
Investment in/from Affiliates		3,499,897			3,499,897
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		3,499,897			3,499,897
Total Assets	$	92,679,431		$	93,338,904
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	731,405		$	1,205,380
Accrued Liabilities		53,292			50,487
Interest Payable		—			—
Taxes Payable		123,151			123,151
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		(1	)		(1	)
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		907,848			1,379,018
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		907,848			1,379,018
SHAREHOLDERS EQUITY
Common Stock		10			10
Additional Paid-in-Capital		210,903,996			210,903,996
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(118,718,232	)		(118,718,232	)
Net Income		(414,190	)		(225,888	)
Net Shareholders Equity		91,771,584			91,959,886
Total Liabilities and Shareholders Equity	$	92,679,431		$	93,338,904

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 25 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

Cliffs Drilling Trinidad L.L.C.

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		(299	)		(299	)
Deposits		—			—
Prepaid & Other		—			—
Total Current Assets		(299	)		(299	)
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		1,144			1,144
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		1,144			1,144
Total Assets	$	845		$	845
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	—		$	—
Accrued Liabilities		—			—
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		—			—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		—			—
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		—			—
Contributed Capital		9,360			9,360
Treasury Stock		—			—
Retained Earning – Prior Year		(8,515	)		(8,515	)
Net Income		—			—
Net Shareholders Equity		845			845
Total Liabilities and Shareholders Equity	$	845		$	845

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 26 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

FDT LLC

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month		Book Value at End of Previous Month
Cash	$	—	$	—
Restricted Cash		—		—
Accounts Receivable – Trade		—		—
Accounts Receivable – Other		—		—
Due to/from Affiliates		—		—
Deposits		—		—
Prepaid & Other		—		—
Total Current Assets		—		—
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—		—
OTHER ASSETS
Investment in/from Affiliates		—		—
Notes Receivable – Affiliates		—		—
Other Assets		—		—
Total Other Assets		—		—
Total Assets	$	—	$	—
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month		Book Value at End of Previous Month
Accounts Payable	$	—	$	—
Accrued Liabilities		—		—
Interest Payable		—		—
Taxes Payable		—		—
Other Current Liabilities		—		—
Current portion of Long-Term Debt		—		—
Deferred Income Taxes		—		—
Notes Payable - Affiliates		—		—
Other Liabilities		—		—
Total Liabilities Not Subject to Compromise		—		—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—		—
Total Liabilities		—		—
SHAREHOLDERS EQUITY
Common Stock		—		—
Additional Paid-in-Capital		—		—
Contributed Capital		—		—
Treasury Stock		—		—
Retained Earning – Prior Year		—		—
Net Income		—		—
Net Shareholders Equity		—		—
Total Liabilities and Shareholders Equity	$	—	$	—

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 27 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

FDT Holdings LLC

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month		Book Value at End of Previous Month
Cash	$	—	$	—
Restricted Cash		—		—
Accounts Receivable – Trade		—		—
Accounts Receivable – Other		—		—
Due to/from Affiliates		—		—
Deposits		—		—
Prepaid & Other		—		—
Total Current Assets		—		—
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—		—
OTHER ASSETS
Investment in/from Affiliates		—		—
Notes Receivable – Affiliates		—		—
Other Assets		—		—
Total Other Assets		—		—
Total Assets	$	—	$	—
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month		Book Value at End of Previous Month
Accounts Payable	$	—	$	—
Accrued Liabilities		—		—
Interest Payable		—		—
Taxes Payable		—		—
Other Current Liabilities		—		—
Current portion of Long-Term Debt		—		—
Deferred Income Taxes		—		—
Notes Payable - Affiliates		—		—
Other Liabilities		—		—
Total Liabilities Not Subject to Compromise		—		—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—		—
Total Liabilities		—		—
SHAREHOLDERS EQUITY
Common Stock		—		—
Additional Paid-in-Capital		—		—
Contributed Capital		—		—
Treasury Stock		—		—
Retained Earning – Prior Year		—		—
Net Income		—		—
Net Shareholders Equity		—		—
Total Liabilities and Shareholders Equity	$	—	$	—

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 28 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

Hercules Drilling Company, LLC

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	71,925,296		$	105,210,912
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		47			38
Due to/from Affiliates		28,510,950			(3,419,592	)
Deposits		—			—
Prepaid & Other		907,464			856,800
Total Current Assets		101,343,756			102,648,158
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		10,349,999			10,571,776
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		90,000,000			90,000,000
Other Assets		—			—
Total Other Assets		90,000,000			90,000,000
Total Assets	$	201,693,756		$	203,219,934
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	674,221		$	1,345,769
Accrued Liabilities		19,259,393			19,416,644
Interest Payable		—			—
Taxes Payable		(389,633	)		(389,633	)
Other Current Liabilities		90,000			90,000
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		19,633,981			20,462,780
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		19,633,981			20,462,780
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		—			—
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		181,789,741			181,789,741
Net Income		270,033			967,413
Net Shareholders Equity		182,059,774			182,757,154
Total Liabilities and Shareholders Equity	$	201,693,756		$	203,219,934

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 29 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

Hercules Offshore Services LLC

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	(3,584	)	$	(4,469	)
Restricted Cash		—			—
Accounts Receivable – Trade		2,690,197			2,006,285
Accounts Receivable – Other		8,387			(2,297	)
Due to/from Affiliates		19,468,608			17,770,152
Deposits		—			—
Prepaid & Other		792,382			880,425
Total Current Assets		22,955,990			20,650,096
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		25,459,933			25,600,850
OTHER ASSETS
Investment in/from Affiliates		483,802,329			483,802,329
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		483,802,329			483,802,329
Total Assets	$	532,218,252		$	530,053,274
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	704,910		$	1,145,737
Accrued Liabilities		1,434,770			(681,673	)
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		2,139,680			464,063
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		2,139,680			464,063
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		265,099,970			265,099,970
Contributed Capital		65,545,741			65,545,741
Treasury Stock		—			—
Retained Earning – Prior Year		201,796,230			201,796,230
Net Income		(2,363,369	)		(2,852,730	)
Net Shareholders Equity		530,078,572			529,589,211
Total Liabilities and Shareholders Equity	$	532,218,252		$	530,053,274

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 30 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

Hercules Offshore Liftboat Company LLC

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month		Book Value at End of Previous Month
Cash	$	—	$	—
Restricted Cash		—		—
Accounts Receivable – Trade		—		—
Accounts Receivable – Other		—		—
Due to/from Affiliates		—		—
Deposits		—		—
Prepaid & Other		—		—
Total Current Assets		—		—
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—		—
OTHER ASSETS
Investment in/from Affiliates		—		—
Notes Receivable – Affiliates		—		—
Other Assets		—		—
Total Other Assets		—		—
Total Assets	$	—	$	—
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month		Book Value at End of Previous Month
Accounts Payable	$	—	$	—
Accrued Liabilities		—		—
Interest Payable		—		—
Taxes Payable		—		—
Other Current Liabilities		—		—
Current portion of Long-Term Debt		—		—
Deferred Income Taxes		—		—
Notes Payable - Affiliates		—		—
Other Liabilities		—		—
Total Liabilities Not Subject to Compromise		—		—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—		—
Total Liabilities		—		—
SHAREHOLDERS EQUITY
Common Stock		—		—
Additional Paid-in-Capital		—		—
Contributed Capital		—		—
Treasury Stock		—		—
Retained Earning – Prior Year		—		—
Net Income		—		—
Net Shareholders Equity		—		—
Total Liabilities and Shareholders Equity	$	—	$	—

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 31 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

HERO Holdings, Inc.

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		16,880,323			16,880,323
Deposits		—			—
Prepaid & Other		(0	)		(0	)
Total Current Assets		16,880,323			16,880,323
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		480,974,730			480,974,730
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		480,974,730			480,974,730
Total Assets	$	497,855,053		$	497,855,053
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	—		$	—
Accrued Liabilities		40,955			38,799
Interest Payable		—			—
Taxes Payable		(25,207	)		(25,207	)
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		494,814,329			494,814,329
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		494,830,077			494,827,921
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		4,849,180			4,156,440
Total Liabilities		499,679,257			498,984,362
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		415,428,989			415,428,989
Contributed Capital		78,247,255			78,247,255
Treasury Stock		—			—
Retained Earning – Prior Year		(488,053,410	)		(488,053,410	)
Net Income		(7,447,038	)		(6,752,142	)
Net Shareholders Equity		(1,824,204	)		(1,129,309	)
Total Liabilities and Shareholders Equity	$	497,855,053		$	497,855,053

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 32 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

SD Drilling LLC

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		3,675,803			3,360,120
Accounts Receivable – Other		10,075			6,930
Due to/from Affiliates		35,715,833			37,152,374
Deposits		—			—
Prepaid & Other		2,554,306			2,838,117
Total Current Assets		41,956,017			43,357,541
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		38,488,233			38,699,869
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		5,000,000			5,000,000
Other Assets		—			—
Total Other Assets		5,000,000			5,000,000
Total Assets	$	85,444,250		$	87,057,411
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	2,040,919		$	3,557,032
Accrued Liabilities		209,625			327,804
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		2,250,545			3,884,836
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		2,250,545			3,884,836
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		150,329,019			150,329,019
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(68,473,306	)		(68,473,306	)
Net Income		1,337,992			1,316,862
Net Shareholders Equity		83,193,705			83,172,574
Total Liabilities and Shareholders Equity	$	85,444,250		$	87,057,411

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 33 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

THE Offshore Drilling Company

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		4,018,020			2,506,632
Accounts Receivable – Other		10,998			7,669
Due to/from Affiliates		8,209,320			9,907,592
Deposits		—			—
Prepaid & Other		1,175,718			1,306,353
Total Current Assets		13,414,055			13,728,246
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		10,857,689			10,913,633
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		—			—
Total Assets	$	24,271,744		$	24,641,879
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	952,808		$	1,653,307
Accrued Liabilities		928,431			1,082,128
Interest Payable		—			—
Taxes Payable		(411,198	)		(411,198	)
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		(0	)		(0	)
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		1,470,040			2,324,236
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		1,470,040			2,324,236
SHAREHOLDERS EQUITY
Common Stock		1			1
Additional Paid-in-Capital		51,844,299			51,844,299
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(31,445,138	)		(31,445,138	)
Net Income		2,402,541			1,918,481
Net Shareholders Equity		22,801,704			22,317,643
Total Liabilities and Shareholders Equity	$	24,271,744		$	24,641,879

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 34 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

THE Onshore Drilling Company

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		19,353			19,353
Deposits		—			—
Prepaid & Other		—			—
Total Current Assets		19,353			19,353
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		—			—
Total Assets	$	19,353		$	19,353
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	—		$	—
Accrued Liabilities		—			—
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		—			—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		—			—
SHAREHOLDERS EQUITY
Common Stock		10			10
Additional Paid-in-Capital		—			—
Contributed Capital		(4,957,532	)		(4,957,532	)
Treasury Stock		—			—
Retained Earning – Prior Year		4,976,875			4,976,875
Net Income		—			—
Net Shareholders Equity		19,353			19,353
Total Liabilities and Shareholders Equity	$	19,353		$	19,353

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 35 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

TODCO Americas Inc.

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		1,546,073			1,666,165
Deposits		—			—
Prepaid & Other		192,230			205,056
Total Current Assets		1,738,303			1,871,222
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		250,000			250,000
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		—			—
Total Assets	$	1,988,303		$	2,121,222
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	130,332		$	241,892
Accrued Liabilities		—			—
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		0			0
Notes Payable - Affiliates		5,000,000			5,000,000
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		5,130,332			5,241,892
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		49,000			42,000
Total Liabilities		5,179,332			5,283,892
SHAREHOLDERS EQUITY
Common Stock		10			10
Additional Paid-in-Capital		—			—
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(3,077,963	)		(3,077,963	)
Net Income		(113,077	)		(84,718	)
Net Shareholders Equity		(3,191,029	)		(3,162,670	)
Total Liabilities and Shareholders Equity	$	1,988,303		$	2,121,222

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 36 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-3: BALANCE SHEET

TODCO International Inc.

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash		—			—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		6			6
Deposits		—			—
Prepaid & Other		—			—
Total Current Assets		6			6
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		—			—
Total Assets	$	6		$	6
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	—		$	—
Accrued Liabilities		—			—
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		—			—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		—			—
SHAREHOLDERS EQUITY
Common Stock		10			10
Additional Paid-in-Capital		—			—
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(4	)		(4	)
Net Income		—			—
Net Shareholders Equity		6			6
Total Liabilities and Shareholders Equity	$	6		$	6

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 37 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-4: SUMMARY OF UNPAID POSTPETITION DEBTS

	Number of Days Past Due
	Current			0-30		31-60		61-90		Over 90			Total
Accounts Payable	$	9,421,968		$	209,038	$	12,813	$	6,763	$	(34,439	)	$	9,616,143
Accrued Liabilities		23,193,047												23,193,047
Taxes Payable		(1,009,059	)											(1,009,059	)
Other Current Liabilities		90,000												90,000
Deferred Income Taxes		745												745
Other Liabilities		1,810,748												1,810,748
Total Unpaid Post-petition Debt	$	33,507,448		$	209,038	$	12,813	$	6,763	$	(34,439	)	$	33,701,623

(1) Both pre-petition and post-petition debts with the exception of the Senior Notes and interest have been included in the schedule as they will be paid in normal course pursuant to the Plan.

(2) Schedule represents the consolidated debtor entities.

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 38 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	JUL. 1 - JUL. 31, 2016

MOR-5: ACCOUNTS RECEIVABLE RECONCILIATION AND AGING

Accounts Receivable Reconciliation	Amount
Total Accounts Receivable at the beginning of the reporting period	$	11,112,224
(+) Amounts billed during the period		4,874,172
(-) Amounts collected during the period		(2,499,010	)
Total Accounts Receivable at the end of the reporting period		13,487,385
Accounts Receivable Aging Amount	Amount
0 - 30 days old		9,420,842
31 - 60 days old		901,867
61 - 90 days old		—
91+ days old		3,625,627
Total Accounts Receivable		13,948,336
Amount considered uncollectible (Bad Debt)		(460,950	)
Accounts Receivable (Net)	$	13,487,385

MOR-5: DEBTOR QUESTIONNAIRE

		Yes	No
1	Have any assets been sold or transferred outside the normal course of business this reporting period? If yes, provide an explanation below.		X
2	Have any funds been disbursed from any account other than a debtor in possession account this reporting period? If yes, provide an explanation below.		X
3	Have all post petition tax returns been timely filed? If no, provide an explanation below.	X
4	Are workers compensation, general liability and other necessary insurance coverages in effect? If no, provide an explanation below.	X
5	Has any bank account been opened during the reporting period? If yes, provide documentation identifying the opened account(s). If an investment account has been opened provide the required documentation pursuant to the Delaware Local Rule 4001-3.		X

Case 16-11385-KJC     Doc 329     Filed 08/22/16     Page 39 of 39

Case Number		Debtor Name	Petition Date
	16-11385	Hercules Offshore, Inc.	June 5, 2016
	16-11386	Cliffs Drilling Company	June 6, 2016
	16-11387	Cliffs Drilling Trinidad L.L.C.	June 6, 2016
	16-11388	FDT LLC	June 6, 2016
	16-11389	FDT Holdings LLC	June 6, 2016
	16-11390	Hercules Drilling Company, LLC	June 6, 2016
	16-11391	Hercules Offshore Services LLC	June 6, 2016
	16-11392	Hercules Offshore Liftboat Company LLC	June 6, 2016
	16-11393	HERO Holdings, Inc.	June 6, 2016
	16-11394	SD Drilling LLC	June 6, 2016
	16-11395	THE Offshore Drilling Company	June 6, 2016
	16-11396	THE Onshore Drilling Company	June 6, 2016
	16-11397	TODCO Americas Inc.	June 6, 2016
	16-11398	TODCO International Inc.	June 6, 2016

EX-99.2

Exhibit 99.2

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 1 of 39

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
		Reporting Period:	AUG. 1 - AUG. 31, 2016

MONTHLY OPERATING REPORT

File with Court and submit copy to United States Trustee within 20 days after end of month.

REQUIRED DOCUMENTS	Form No.	Document Attached	Explanation Attached
Schedule of Cash Receipts and Disbursements	MOR-1	Yes
Bank Reconciliation (or copies of debtor’s bank reconciliations)	MOR-1 (CON’T)	Yes
Schedule of Professional Fees Paid	MOR-lb	Yes
Copies of bank statements		No	Note 1
Cash disbursements journals		No	Note 1
Statement of Operations	MOR-2	Yes
Balance Sheet	MOR-3	Yes
Status of Post-petition Taxes		No	Note 2
Copies of IRS Form 6123 or payment receipt		No	Note 1
Copies of tax returns filed during reporting period		No	Note 1
Summary of Unpaid Post-petition Debts	MOR-4	Yes
Listing of Aged Accounts Payable	MOR-4	Yes
Accounts Receivable Reconciliation and Aging	MOR-5	Yes
Debtor Questionnaire	MOR-5	Yes

(1) Due to the system constraints and/or the volume of the records, no attachment is provided, but is available to the UST upon request.

(2) The Company is current on all tax payments.

I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the attached documents are true and correct to the best of my knowledge and belief.

Signature of Debtor	Date
Signature of Joint Debtor	Date
/s/ Troy Carson	9/20/16
Signature of Authorized Individual*	Date
/s/ Troy Carson	CFO
Printed Name of Authorized Individual	Title of Authorized Individual

* Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 2 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-1: SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

HERCULES OFFSHORE, INC., ET AL. DEBTOR

	Current Month						Cumulative Filing to Date
	Actual			Projected1			Actual			Projected1
Beginning Cash	$	152,435,848		$	144,270,569		$	207,705,799		$	208,311,591
RECEIPTS
Total Receipts		3,591,600			2,977,816			10,590,471			9,449,131
DISBURSEMENTS
Personnel Costs		4,665,333			5,974,792			16,152,406			18,640,620
Premises Rents		196,345			282,800			595,191			756,100
Insurance		35,000			—			5,261,698			3,384,112
Taxes		245,259			97,260			254,001			240,414
Utilities		88,527			129,556			310,626			343,529
Vendors and Others		639,849			3,378,765			2,821,618			9,946,706
Ordinary Course Professional Fees		167,358			334,100			394,088			668,200
Restructuring Professional Fees2		2,170,789			855,000			3,609,065			1,760,000
U.S. Trustee Quarterly Fees		—			—			88,575			—
Adequate Protection Debt and Assurance		3,280,542			3,107,490			48,956,341			48,932,421
Total Disbursements		11,489,001			14,159,764			78,443,609			84,672,101
CASH INTERNAL TRANSFER
Total Internal Transfer		872,411			—			5,558,198			—
Net Cash Flow		(7,024,990	)		(11,181,948	)		(62,294,941	)		(75,222,970	)
Ending Cash3	$	145,410,858		$	133,088,621		$	145,410,858		$	133,088,621

DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES4
Hercules Offshore, Inc.	$	11,518,969
Cliffs Drilling Company		655,146
Cliffs Drilling Trinidad L.L.C.		—
FDT LLC		—
FDT Holdings LLC		—
Hercules Drilling Company, LLC		2,582,951
Hercules Offshore Services LLC		3,714,162
Hercules Offshore Liftboat Company LLC		—
HERO Holdings, Inc.		8,028
SD Drilling LLC		5,769,878
THE Offshore Drilling Company		3,617,375
THE Onshore Drilling Company		—
TODCO Americas Inc.		79,553
TODCO International Inc.		—
TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES	$	27,946,063

(1) Projected amounts are based on the forecasted weekly activity for the week ending 8/6 through the week ending 9/3.    

(2) Restructuring professional fees include estate professional fees and lender professional fees.    

(3) Ending Cash balance excludes petty cash and collateral accounts.    

(4) A majority of disbursements are made from centralized payroll and accounts payable bank accounts. Pro-rated amounts were allocated to the debtor entities based on percentage of expenses over the period.    

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 3 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-1a: BANK RECONCILIATIONS

Legal Entity1	Bank Name	Account Function	Account #	USD Balance as of 8/31
Hercules Offshore, Inc.	Amegy Bank of Texas, N.A.	Operating Account	****2838		—
Hercules Offshore, Inc.	Amegy Bank of Texas, N.A.	Flexible Spending Claims	****7288		—
Hercules Offshore, Inc.	Amegy Bank of Texas, N.A.	Singapore Operating Account	****0935		—
Hercules Offshore, Inc.	HSBC	Checking Account	****2845		5,184,679
Hercules Offshore, Inc.	HSBC	Investment Account	****1393		92,282,474
Hercules Offshore, Inc.	Amegy Bank of Texas, N.A.	Hercules Offshore Inc. Utilities	****1193		58,193
Cliffs Drilling Company	Amegy Bank of Texas, N.A.	Operating Account	****1649		—
Cliffs Drilling Company	HSBC	Local Operations	****1001		12,036
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Operating Account	****4656		14,852,088
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Payables	****5850		—
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Cayman Investment Sweep Account	****4656		—
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Money Market Investment Account	****8200		—
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Cayman Self Directed Investment Account	****2321		—
Hercules Drilling Company, LLC	Capital One Bank	Investment Account	****7684		33,193,958
Hercules Drilling Company, LLC	Comerica Bank	Investment Account	****8881		—
Hercules Offshore Services LLC	Amegy Bank of Texas, N.A.	Payroll Account	****5069		—
TODCO Americas Inc.	Amegy Bank of Texas, N.A.	Operating Account	****8930		—

Notes:

(1) Includes only Debtor entity bank accounts

I attest that each of the Debtors’ corporate bank accounts is reconciled to monthly bank statements. The Company’s standard practice is to ensure that each corporate bank account is reconciled to monthly bank statements for each fiscal month within 30 days after month end. See above listing of each of the Debtors’ bank accounts and the book balance of the account as of the end of the fiscal month covered by this report.

/s/ Troy Carson	/s/ Troy Carson
Authorized Representative	Printed Name of Authorized Representative

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 4 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-1a: BANK RECONCILIATIONS

Legal Entity	Hercules Offshore, Inc.			Hercules Offshore, Inc.			Hercules Offshore, Inc.			Cliffs Drilling Company			Hercules Drilling Company, LLC
Bank Name	HSBC			HSBC			Amegy Bank of Texas, N.A.			HSBC			Amegy Bank of Texas, N.A.
Account #	****2845			****1393			****1193			****1001			****4656
Balance Per Books		$	5,184,679		$	92,282,474		$	58,193		$	12,036		$	14,852,088
Bank Balance		$	5,184,679		$	92,282,474		$	58,193		$	12,036		$	14,852,088
(+) Deposits In Transit			—			—			—			—			—
(-) Outstanding Checks			—			—			—			—			—
Other			—			—			—			—			—
Adjusted Bank Balance		$	5,184,679		$	92,282,474		$	58,193		$	12,036		$	14,852,088
Deposits In Transit	Date	Amount		Date	Amount		Date	Amount		Date	Amount		Date	Amount
		$	—		$	—		$	—		$	—		$	—
			—			—			—			—			—
			—			—			—			—			—
			—			—			—			—			—
Total Deposits In Transit		$	—		$	—		$	—		$	—		$	—
Outstanding Checks	Date	Amount		Date	Amount		Date	Amount		Date	Amount		Date	Amount
Total Outstanding Checks		$	—		$	—		$	—		$	—		$	—
Other	Date	Amount		Date	Amount		Date	Amount		Date	Amount		Date	Amount
		$	—		$	—		$	—		$	—		$	—
			—			—			—			—			—
			—			—			—			—			—
			—			—			—			—			—
Total Other		$	—		$	—		$	—		$	—		$	—

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 5 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-1a: BANK RECONCILIATIONS

Legal Entity Bank Name Account #	Hercules Drilling Company, LLC Amegy Bank of Texas, N.A. ****4656			Hercules Drilling Company, LLC Capital One Bank ****7684			Hercules Drilling Company, LLC Comerica Bank ****8881			Hercules Drilling Company, LLC Amegy Bank of Texas,  N.A.1 ****5850				Hercules Offshore Services LLC Amegy Bank of Texas,  N.A.1 ****5069
Balance Per Books		$	—		$	33,193,958		$	—		$	(170,957	)		$	(1,613	)
Bank Balance		$	—		$	33,193,958		$	—		$	—			$	—
(+) Deposits In Transit			—			—			—			—				—
(-) Outstanding Checks			—			—			—			170,957				1,613
Other			—			—			—			—				—
Adjusted Bank Balance		$	—		$	33,193,958		$	—		$	(170,957	)		$	(1,613	)
Deposits In Transit	Date	Amount		Date	Amount		Date	Amount		Date	Amount			Date	Amount
		$	—		$	—		$	—		$	—			$	—
			—			—			—			—				—
			—			—			—			—				—
			—			—			—			—				—
Total Deposits In Transit		$	—		$	—		$	—		$	—			$	—
Outstanding Checks2	Date	Amount		Date	Amount		Date	Amount		Date	Amount			Date	Amount
Total Outstanding Checks		$	—		$	—		$	—		$	170,957			$	1,613
Other		$	—		$	—		$	—		$	—			$	—
			—			—			—			—				—
			—			—			—			—				—
			—			—			—			—				—
			—			—			—			—				—
Total Other		$	—		$	—		$	—		$	—			$	—

(1) The negative book balance in accounts ****5850 and ****5069 are due to those accounts being ZBA accounts in the Amegy bank account structure noted in the Cash Management Motion. As checks clear these bank accounts, funds are made available to those accounts to process checks presented for payment.

(2) Outstanding checks are available to the UST upon request.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 6 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-1b: SCHEDULE OF PROFESSIONAL FEES AND EXPENSES PAID

						Check				Amount Paid				Year-To-Date
Payee	Period Covered	Amount Approved		Payor		Number		Date		Fees		Expenses		Fees		Expenses
Alfaro Ferrer	7/8/2016	$	3,765		Hercules Drilling Company, LLC		None		None	$	2,713	$	1,052	$	2,713	$	1,052
Bayard, PA	6/1/16 – 6/30/16		20,565		Hercules Drilling Company, LLC		None		None		20,252		313		20,252		313
King & Spalding LLP	7/1/16 – 7/31/16		179,286		Hercules Drilling Company, LLC		None		None		173,610		5,677		350,173		6,277
Kirkland & Ellis LLP	Ending 7/31/16		264,438		Hercules Drilling Company, LLC		None		None		262,379		2,059		262,379		2,059
Prime Clerk LLC	Ending 7/31/16		204,920		Hercules Drilling Company, LLC		None		None		37,024		167,896		136,587		527,404
White & Case LLP	Ending 7/31/16		1,464,321		Hercules Drilling Company, LLC		None		None		1,412,097		52,224		2,113,471		95,443
Zolfo Cooper	6/1/16 – 6/30/16		33,110		Hercules Drilling Company, LLC		None		None		30,684		2,427		30,684		2,427

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 7 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

The Consolidated Debtor Entities

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	2,742,569		$	12,154,939
Total Revenue		2,742,569			12,154,939
OPERATING EXPENSES
Operating Cost & Expenses		3,346,316			10,570,044
Depreciation & Amortization		805,274			2,182,488
General & Administrative		3,440,084			11,673,185
Total Operating Expenses		7,591,674			24,425,717
Operating Income		(4,849,105	)		(12,270,777	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		63,783,179			63,689,446
Interest Expense		2,661,722			135,165,221
Income Taxes (Benefit)		3,586			(5,430,845	)
Total Other Income and Expenses		66,448,487			193,423,822
Net Profit/(Loss)	$	(71,297,592	)	$	(205,694,600	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 8 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Hercules Offshore, Inc.

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	436,881		$	900,305
Total Revenue		436,881			900,305
OPERATING EXPENSES
Operating Cost & Expenses		3,810			(102,489	)
Depreciation & Amortization		175,000			291,667
General & Administrative		3,219,436			9,800,509
Total Operating Expenses		3,398,246			9,989,686
Operating Income		(2,961,364	)		(9,089,382	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		63,943,736			63,879,004
Interest Expense		2,044,732			133,314,251
Income Taxes (Benefit)		3,586			(4,048,912	)
Total Other Income and Expenses		65,992,053			193,144,343
Net Profit/(Loss)	$	(68,953,418	)	$	(202,233,725	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 9 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Cliffs Drilling Company

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	—		$	—
Total Revenue		—			—
OPERATING EXPENSES
Operating Cost & Expenses		151,090			538,008
Depreciation & Amortization		—			—
General & Administrative		10,499			42,473
Total Operating Expenses		161,589			580,481
Operating Income		(161,589	)		(580,481	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		(71	)		3,211
Interest Expense		—			—
Income Taxes (Benefit)		—			(1,158,886	)
Total Other Income and Expenses		(71	)		(1,155,675	)
Net Profit/(Loss)	$	(161,518	)	$	575,194

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 10 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Cliffs Drilling Trinidad L.L.C.

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 11 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

FDT LLC

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 12 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

FDT Holdings LLC

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 13 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Hercules Drilling Company, LLC

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	—		$	—
Total Revenue		—			—
OPERATING EXPENSES
Operating Cost & Expenses		122,952			375,209
Depreciation & Amortization		221,776			665,329
General & Administrative		205,601			692,216
Total Operating Expenses		550,330			1,732,755
Operating Income		(550,330	)		(1,732,755	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		(93,186	)		(125,469	)
Interest Expense		(75,750	)		(227,250	)
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		(168,936	)		(352,719	)
Net Profit/(Loss)	$	(381,394	)	$	(1,380,036	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 14 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Hercules Offshore Services LLC

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	1,276,732		$	4,000,014
Total Revenue		1,276,732			4,000,014
OPERATING EXPENSES
Operating Cost & Expenses		938,295			2,580,194
Depreciation & Amortization		140,917			422,750
General & Administrative		0			0
Total Operating Expenses		1,079,211			3,002,944
Operating Income		197,521			997,070
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		(67,300	)		(67,300	)
Interest Expense		—			—
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		(67,300	)		(67,300	)
Net Profit/(Loss)	$	264,821		$	1,064,370

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 15 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Hercules Offshore Liftboat Company LLC

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 16 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

HERO Holdings, Inc.

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	—		$	—
Total Revenue		—			—
OPERATING EXPENSES
Operating Cost & Expenses		—			—
Depreciation & Amortization		—			—
General & Administrative		2,156			867,389
Total Operating Expenses		2,156			867,389
Operating Income		(2,156	)		(867,389	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—			—
Interest Expense		692,740			2,078,220
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		692,740			2,078,220
Net Profit/(Loss)	$	(694,896	)	$	(2,945,610	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 17 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

SD Drilling LLC

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	992,966		$	4,130,153
Total Revenue		992,966			4,130,153
OPERATING EXPENSES
Operating Cost & Expenses		1,300,052			4,399,500
Depreciation & Amortization		211,636			634,908
General & Administrative		—			0
Total Operating Expenses		1,511,688			5,034,408
Operating Income		(518,722	)		(904,255	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—			—
Interest Expense		(7,000	)		(21,000	)
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		(7,000	)		(21,000	)
Net Profit/(Loss)	$	(511,722	)	$	(883,255	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 18 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

THE Offshore Drilling Company

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	35,990		$	3,124,467
Total Revenue		35,990			3,124,467
OPERATING EXPENSES
Operating Cost & Expenses		808,759			2,715,544
Depreciation & Amortization		55,944			167,833
General & Administrative		2,394			270,597
Total Operating Expenses		867,097			3,153,975
Operating Income		(831,107	)		(29,508	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—			—
Interest Expense		—			—
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		—			—
Net Profit/(Loss)	$	(831,107	)	$	(29,508	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 19 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

THE Onshore Drilling Company

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 20 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

TODCO Americas Inc.

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	—		$	—
Total Revenue		—			—
OPERATING EXPENSES
Operating Cost & Expenses		21,359			64,077
Depreciation & Amortization		—			—
General & Administrative		—			—
Total Operating Expenses		21,359			64,077
Operating Income		(21,359	)		(64,077	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—			—
Interest Expense		7,000			21,000
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		7,000			21,000
Net Profit/(Loss)	$	(28,359	)	$	(85,077	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 21 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

TODCO International Inc.

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - August 31.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 22 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

The Consolidated Debtor Entities

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	145,410,858		$	152,435,848
Restricted Cash		—			—
Accounts Receivable – Trade		13,173,439			13,487,385
Accounts Receivable – Other		(1,250	)		164,534
Due to/from Affiliates		(453,071,827	)		(391,894,570	)
Deposits		—			—
Prepaid & Other		8,536,665			9,554,356
Total Current Assets		(285,952,115	)		(216,252,447	)
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		85,775,405			86,405,855
OTHER ASSETS
Investment in/from Affiliates		1,724,702,689			1,724,702,689
Notes Receivable – Affiliates		959,514,329			959,514,329
Other Assets		5,649,307			5,815,502
Total Other Assets		2,689,866,325			2,690,032,520
Total Assets	$	2,489,689,614		$	2,560,185,928
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	9,291,965		$	9,616,143
Accrued Liabilities		24,978,169			23,193,047
Interest Payable		—			—
Taxes Payable		(1,009,289	)		(1,009,059	)
Other Current Liabilities		289,985			90,000
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		4,331			745
Notes Payable - Affiliates		499,814,329			499,814,329
Other Liabilities		204,921			1,810,748
Total Liabilities Not Subject to Compromise		533,574,411			533,515,952
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		346,433,438			345,733,698
Total Liabilities		880,007,849			879,249,650
SHAREHOLDERS EQUITY
Common Stock		200,041			200,041
Additional Paid-in-Capital		1,681,673,640			1,681,630,560
Contributed Capital		138,844,823			138,844,823
Treasury Stock		(325,548	)		(325,548	)
Retained Earning – Prior Year		(22,848,912	)		(22,848,912	)
Net Income		(187,862,278	)		(116,564,686	)
Net Shareholders Equity		1,609,681,766			1,680,936,278
Total Liabilities and Shareholders Equity	$	2,489,689,614		$	2,560,185,928

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 23 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

Hercules Offshore, Inc.

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	97,525,346		$	80,502,256
Restricted Cash		—			—
Accounts Receivable – Trade		4,001,197			3,564,316
Accounts Receivable – Other		—			135,027
Due to/from Affiliates		(676,538,880	)		(590,114,557	)
Deposits		—			—
Prepaid & Other		2,975,302			3,173,474
Total Current Assets		(572,037,034	)		(502,739,485	)
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		756,424,589			756,424,589
Notes Receivable – Affiliates		864,514,329			864,514,329
Other Assets		5,649,307			5,815,502
Total Other Assets		1,626,588,225			1,626,754,420
Total Assets	$	1,054,551,191		$	1,124,014,935
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	3,747,642		$	4,381,547
Accrued Liabilities		2,949,550			1,266,581
Interest Payable		—			—
Taxes Payable		(306,401	)		(306,171	)
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		4,331			745
Notes Payable - Affiliates		—			—
Other Liabilities		204,921			1,810,748
Total Liabilities Not Subject to Compromise		6,600,043			7,153,449
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		340,835,517			340,835,517
Total Liabilities		347,435,560			347,988,967
SHAREHOLDERS EQUITY
Common Stock		200,000			200,000
Additional Paid-in-Capital		588,067,366			588,024,286
Contributed Capital		—			—
Treasury Stock		(325,548	)		(325,548	)
Retained Earning – Prior Year		298,364,810			298,364,810
Net Income		(179,190,997	)		(110,237,579	)
Net Shareholders Equity		707,115,631			776,025,969
Total Liabilities and Shareholders Equity	$	1,054,551,191		$	1,124,014,935

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 24 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

Cliffs Drilling Company

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	12,036		$	11,880
Restricted Cash		—			—
Accounts Receivable – Trade		(460,950	)		(460,950	)
Accounts Receivable – Other		—			—
Due to/from Affiliates		87,953,607			87,869,820
Deposits		—			—
Prepaid & Other		674,475			758,784
Total Current Assets		88,179,167			88,179,534
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		1,000,000			1,000,000
OTHER ASSETS
Investment in/from Affiliates		3,499,897			3,499,897
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		3,499,897			3,499,897
Total Assets	$	92,679,064		$	92,679,431
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	789,767		$	731,405
Accrued Liabilities		56,097			53,292
Interest Payable		—			—
Taxes Payable		123,151			123,151
Other Current Liabilities		99,985			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		(1	)		(1	)
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		1,068,999			907,848
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		1,068,999			907,848
SHAREHOLDERS EQUITY
Common Stock		10			10
Additional Paid-in-Capital		210,903,996			210,903,996
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(118,718,232	)		(118,718,232	)
Net Income		(575,709	)		(414,190	)
Net Shareholders Equity		91,610,065			91,771,584
Total Liabilities and Shareholders Equity	$	92,679,064		$	92,679,431

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 25 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

Cliffs Drilling Trinidad L.L.C.

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		(299	)		(299	)
Deposits		—			—
Prepaid & Other		—			—
Total Current Assets		(299	)		(299	)
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		1,144			1,144
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		1,144			1,144
Total Assets	$	845		$	845
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	—		$	—
Accrued Liabilities		—			—
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		—			—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		—			—
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		—			—
Contributed Capital		9,360			9,360
Treasury Stock		—			—
Retained Earning – Prior Year		(8,515	)		(8,515	)
Net Income		—			—
Net Shareholders Equity		845			845
Total Liabilities and Shareholders Equity	$	845		$	845

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 26 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

FDT LLC

ASSETS	Book Value at End of		Book Value at End of
CURRENT ASSETS	Current Reporting Month		Previous Month
Cash	$	—	$	—
Restricted Cash		—		—
Accounts Receivable – Trade		—		—
Accounts Receivable – Other		—		—
Due to/from Affiliates		—		—
Deposits		—		—
Prepaid & Other		—		—
Total Current Assets		—		—
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—		—
OTHER ASSETS
Investment in/from Affiliates		—		—
Notes Receivable – Affiliates		—		—
Other Assets		—		—
Total Other Assets		—		—
Total Assets	$	—	$	—
LIABILITIES AND OWNER EQUITY	Book Value at End of		Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month		Previous Month
Accounts Payable	$	—	$	—
Accrued Liabilities		—		—
Interest Payable		—		—
Taxes Payable		—		—
Other Current Liabilities		—		—
Current portion of Long-Term Debt		—		—
Deferred Income Taxes		—		—
Notes Payable - Affiliates		—		—
Other Liabilities		—		—
Total Liabilities Not Subject to Compromise		—		—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—		—
Total Liabilities		—		—
SHAREHOLDERS EQUITY
Common Stock		—		—
Additional Paid-in-Capital		—		—
Contributed Capital		—		—
Treasury Stock		—		—
Retained Earning – Prior Year		—		—
Net Income		—		—
Net Shareholders Equity		—		—
Total Liabilities and Shareholders Equity	$	—	$	—

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 27 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

FDT Holdings LLC

ASSETS	Book Value at End of		Book Value at End of
CURRENT ASSETS	Current Reporting Month		Previous Month
Cash	$	—	$	—
Restricted Cash		—		—
Accounts Receivable – Trade		—		—
Accounts Receivable – Other		—		—
Due to/from Affiliates		—		—
Deposits		—		—
Prepaid & Other		—		—
Total Current Assets		—		—
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—		—
OTHER ASSETS
Investment in/from Affiliates		—		—
Notes Receivable – Affiliates		—		—
Other Assets		—		—
Total Other Assets		—		—
Total Assets	$	—	$	—
LIABILITIES AND OWNER EQUITY	Book Value at End of		Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month		Previous Month
Accounts Payable	$	—	$	—
Accrued Liabilities		—		—
Interest Payable		—		—
Taxes Payable		—		—
Other Current Liabilities		—		—
Current portion of Long-Term Debt		—		—
Deferred Income Taxes		—		—
Notes Payable - Affiliates		—		—
Other Liabilities		—		—
Total Liabilities Not Subject to Compromise		—		—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—		—
Total Liabilities		—		—
SHAREHOLDERS EQUITY
Common Stock		—		—
Additional Paid-in-Capital		—		—
Contributed Capital		—		—
Treasury Stock		—		—
Retained Earning – Prior Year		—		—
Net Income		—		—
Net Shareholders Equity		—		—
Total Liabilities and Shareholders Equity	$	—	$	—

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 28 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

Hercules Drilling Company, LLC

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	47,875,089		$	71,925,296
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		(0	)		47
Due to/from Affiliates		53,454,595			28,510,950
Deposits		—			—
Prepaid & Other		696,101			907,464
Total Current Assets		102,025,784			101,343,756
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		10,128,223			10,349,999
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		90,000,000			90,000,000
Other Assets		—			—
Total Other Assets		90,000,000			90,000,000
Total Assets	$	202,154,007		$	201,693,756
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	937,703		$	674,221
Accrued Liabilities		19,837,557			19,259,393
Interest Payable		—			—
Taxes Payable		(389,633	)		(389,633	)
Other Current Liabilities		90,000			90,000
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		20,475,627			19,633,981
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		20,475,627			19,633,981
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		—			—
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		181,789,741			181,789,741
Net Income		(111,360	)		270,033
Net Shareholders Equity		181,678,381			182,059,774
Total Liabilities and Shareholders Equity	$	202,154,007		$	201,693,756

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 29 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

Hercules Offshore Services LLC

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	(1,613	)	$	(3,584	)
Restricted Cash		—			—
Accounts Receivable – Trade		2,691,055			2,690,197
Accounts Receivable – Other		(1,250	)		8,387
Due to/from Affiliates		19,429,179			19,468,608
Deposits		—			—
Prepaid & Other		704,340			792,382
Total Current Assets		22,821,711			22,955,990
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		25,319,017			25,459,933
OTHER ASSETS
Investment in/from Affiliates		483,802,329			483,802,329
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		483,802,329			483,802,329
Total Assets	$	531,943,056		$	532,218,252
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	738,531		$	704,910
Accrued Liabilities		861,132			1,434,770
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		1,599,664			2,139,680
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		1,599,664			2,139,680
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		265,099,970			265,099,970
Contributed Capital		65,545,741			65,545,741
Treasury Stock		—			—
Retained Earning – Prior Year		201,796,230			201,796,230
Net Income		(2,098,548	)		(2,363,369	)
Net Shareholders Equity		530,343,393			530,078,572
Total Liabilities and Shareholders Equity	$	531,943,056		$	532,218,252

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 30 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

Hercules Offshore Liftboat Company LLC

ASSETS	Book Value at End of		Book Value at End of
CURRENT ASSETS	Current Reporting Month		Previous Month
Cash	$	—	$	—
Restricted Cash		—		—
Accounts Receivable – Trade		—		—
Accounts Receivable – Other		—		—
Due to/from Affiliates		—		—
Deposits		—		—
Prepaid & Other		—		—
Total Current Assets		—		—
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—		—
OTHER ASSETS
Investment in/from Affiliates		—		—
Notes Receivable – Affiliates		—		—
Other Assets		—		—
Total Other Assets		—		—
Total Assets	$	—	$	—
LIABILITIES AND OWNER EQUITY	Book Value at End of		Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month		Previous Month
Accounts Payable	$	—	$	—
Accrued Liabilities		—		—
Interest Payable		—		—
Taxes Payable		—		—
Other Current Liabilities		—		—
Current portion of Long-Term Debt		—		—
Deferred Income Taxes		—		—
Notes Payable - Affiliates		—		—
Other Liabilities		—		—
Total Liabilities Not Subject to Compromise		—		—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—		—
Total Liabilities		—		—
SHAREHOLDERS EQUITY
Common Stock		—		—
Additional Paid-in-Capital		—		—
Contributed Capital		—		—
Treasury Stock		—		—
Retained Earning – Prior Year		—		—
Net Income		—		—
Net Shareholders Equity		—		—
Total Liabilities and Shareholders Equity	$	—	$	—

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 31 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

HERO Holdings, Inc.

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		16,880,323			16,880,323
Deposits		—			—
Prepaid & Other		(0	)		(0	)
Total Current Assets		16,880,323			16,880,323
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		480,974,730			480,974,730
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		480,974,730			480,974,730
Total Assets	$	497,855,053		$	497,855,053
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	—		$	—
Accrued Liabilities		43,110			40,955
Interest Payable		—			—
Taxes Payable		(25,207	)		(25,207	)
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		494,814,329			494,814,329
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		494,832,232			494,830,077
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		5,541,920			4,849,180
Total Liabilities		500,374,153			499,679,257
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		415,428,989			415,428,989
Contributed Capital		78,247,255			78,247,255
Treasury Stock		—			—
Retained Earning – Prior Year		(488,053,410	)		(488,053,410	)
Net Income		(8,141,933	)		(7,447,038	)
Net Shareholders Equity		(2,519,100	)		(1,824,204	)
Total Liabilities and Shareholders Equity	$	497,855,053		$	497,855,053

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 32 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

SD Drilling LLC

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		3,870,481			3,675,803
Accounts Receivable – Other		—			10,075
Due to/from Affiliates		35,687,983			35,715,833
Deposits		—			—
Prepaid & Other		2,270,494			2,554,306
Total Current Assets		41,828,957			41,956,017
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		38,276,421			38,488,233
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		5,000,000			5,000,000
Other Assets		—			—
Total Other Assets		5,000,000			5,000,000
Total Assets	$	85,105,378		$	85,444,250
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	2,057,847		$	2,040,919
Accrued Liabilities		265,548			209,625
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		100,000			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		2,423,395			2,250,545
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		2,423,395			2,250,545
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		150,329,019			150,329,019
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(68,473,306	)		(68,473,306	)
Net Income		826,271			1,337,992
Net Shareholders Equity		82,681,983			83,193,705
Total Liabilities and Shareholders Equity	$	85,105,378		$	85,444,250

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 33 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

THE Offshore Drilling Company

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		3,071,656			4,018,020
Accounts Receivable – Other		—			10,998
Due to/from Affiliates		8,496,233			8,209,320
Deposits		—			—
Prepaid & Other		1,045,082			1,175,718
Total Current Assets		12,612,972			13,414,055
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		10,801,744			10,857,689
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		—			—
Total Assets	$	23,414,716		$	24,271,744
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	890,143		$	952,808
Accrued Liabilities		965,175			928,431
Interest Payable		—			—
Taxes Payable		(411,198	)		(411,198	)
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		(0	)		(0	)
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		1,444,119			1,470,040
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		1,444,119			1,470,040
SHAREHOLDERS EQUITY
Common Stock		1			1
Additional Paid-in-Capital		51,844,299			51,844,299
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(31,445,138	)		(31,445,138	)
Net Income		1,571,435			2,402,541
Net Shareholders Equity		21,970,597			22,801,704
Total Liabilities and Shareholders Equity	$	23,414,716		$	24,271,744

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 34 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

THE Onshore Drilling Company

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		19,353			19,353
Deposits		—			—
Prepaid & Other		—			—
Total Current Assets		19,353			19,353
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		—			—
Total Assets	$	19,353		$	19,353
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	—		$	—
Accrued Liabilities		—			—
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		—			—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		—			—
SHAREHOLDERS EQUITY
Common Stock		10			10
Additional Paid-in-Capital		—			—
Contributed Capital		(4,957,532	)		(4,957,532	)
Treasury Stock		—			—
Retained Earning – Prior Year		4,976,875			4,976,875
Net Income		—			—
Net Shareholders Equity		19,353			19,353
Total Liabilities and Shareholders Equity	$	19,353		$	19,353

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 35 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

TODCO Americas Inc.

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		1,546,073			1,546,073
Deposits		—			—
Prepaid & Other		170,871			192,230
Total Current Assets		1,716,944			1,738,303
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		250,000			250,000
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		—			—
Total Assets	$	1,966,944		$	1,988,303
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	130,332		$	130,332
Accrued Liabilities		—			—
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		0			0
Notes Payable - Affiliates		5,000,000			5,000,000
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		5,130,332			5,130,332
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		56,000			49,000
Total Liabilities		5,186,332			5,179,332
SHAREHOLDERS EQUITY
Common Stock		10			10
Additional Paid-in-Capital		—			—
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(3,077,963	)		(3,077,963	)
Net Income		(141,435	)		(113,077	)
Net Shareholders Equity		(3,219,388	)		(3,191,029	)
Total Liabilities and Shareholders Equity	$	1,966,944		$	1,988,303

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 36 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-3: BALANCE SHEET

TODCO International Inc.

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		6			6
Deposits		—			—
Prepaid & Other		—			—
Total Current Assets		6			6
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		—			—
Total Assets	$	6		$	6
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	—		$	—
Accrued Liabilities		—			—
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		—			—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		—			—
SHAREHOLDERS EQUITY
Common Stock		10			10
Additional Paid-in-Capital		—			—
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(4	)		(4	)
Net Income		—			—
Net Shareholders Equity		6			6
Total Liabilities and Shareholders Equity	$	6		$	6

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes. Additionally, the Non-Debtor entities paid $2.85 million to the Senior Notes as a result of Hercules 267 sale as provided in the Credit Agreement.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 37 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-4: SUMMARY OF UNPAID POSTPETITION DEBTS

	Number of Days Past Due
	Current			0-30		31-60		61-90		Over 90			Total
Accounts Payable	$	8,797,010		$	352,628	$	153,234	$	6,794	$	(17,699	)	$	9,291,965
Accrued Liabilities		24,978,169												24,978,169
Taxes Payable		(1,009,289	)											(1,009,289	)
Other Current Liabilities		289,985												289,985
Deferred Income Taxes		4,331												4,331
Other Liabilities		204,921												204,921
Total Unpaid Post-petition Debt	$	33,265,126		$	352,628	$	153,234	$	6,794	$	(17,699	)	$	33,760,082

(1) Both pre-petition and post-petition debts with the exception of the Senior Notes and interest have been included in the schedule as they will be paid in normal course pursuant to the Plan.

(2) Schedule represents the consolidated debtor entities.

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 38 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	AUG. 1 - AUG. 31, 2016

MOR-5: ACCOUNTS RECEIVABLE RECONCILIATION AND AGING

Accounts Receivable Reconciliation	Amount
Total Accounts Receivable at the beginning of the reporting period	$	13,487,385
(+) Amounts billed during the period		2,708,056
(-) Amounts collected during the period		(3,022,002	)
Total Accounts Receivable at the end of the reporting period		13,173,439
Accounts Receivable Aging Amount	Amount
0 - 30 days old		7,592,468
31 - 60 days old		2,432,856
61 - 90 days old		(16,562	)
91+ days old		3,625,627
Total Accounts Receivable		13,634,389
Amount considered uncollectible (Bad Debt)		(460,950	)
Accounts Receivable (Net)	$	13,173,439

MOR-5: DEBTOR QUESTIONNAIRE

		Yes	No
1	Have any assets been sold or transferred outside the normal course of business this reporting period? If yes, provide an explanation below.		X
2	Have any funds been disbursed from any account other than a debtor in possession account this reporting period? If yes, provide an explanation below.		X
3	Have all post petition tax returns been timely filed? If no, provide an explanation below.	X
4	Are workers compensation, general liability and other necessary insurance coverages in effect? If no, provide an explanation below.	X
5	Has any bank account been opened during the reporting period? If yes, provide documentation identifying the opened account(s). If an investment account has been opened provide the required documentation pursuant to the Delaware Local Rule 4001-3.		X

Case 16-11385-KJC     Doc 397     Filed 09/20/16     Page 39 of 39

Case Number	Debtor Name	Petition Date
16-11385	Hercules Offshore, Inc.	June 5, 2016
16-11386	Cliffs Drilling Company	June 6, 2016
16-11387	Cliffs Drilling Trinidad L.L.C.	June 6, 2016
16-11388	FDT LLC	June 6, 2016
16-11389	FDT Holdings LLC	June 6, 2016
16-11390	Hercules Drilling Company, LLC	June 6, 2016
16-11391	Hercules Offshore Services LLC	June 6, 2016
16-11392	Hercules Offshore Liftboat Company LLC	June 6, 2016
16-11393	HERO Holdings, Inc.	June 6, 2016
16-11394	SD Drilling LLC	June 6, 2016
16-11395	THE Offshore Drilling Company	June 6, 2016
16-11396	THE Onshore Drilling Company	June 6, 2016
16-11397	TODCO Americas Inc.	June 6, 2016
16-11398	TODCO International Inc.	June 6, 2016

Case 16-11385-KJC     Doc 397-1     Filed 09/20/16     Page 1 of 1

CERTIFICATE OF SERVICE

I, Matthew B. Harvey, certify that I am not less than 18 years of age, and that service of the foregoing Monthly Operating Report for the reporting period August 1, 2016 – August 31, 2016, was caused to be made on September 20, 2016, in the manner indicated upon the party identified below.

VIA HAND DELIVERY

Attn: Timothy Fox, Esq.

Office of the United States Trustee

J. Caleb Boggs Federal Building

844 North King Street, Suite 2207

Wilmington, DE 19801

Dated: September 20, 2016	/s/ Matthew B. Harvey
	Matthew B. Harvey (No. 5186)

EX-99.3

Exhibit 99.3

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 1 of 39

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
		Reporting Period:	SEP. 1 - SEP. 30, 2016

MONTHLY OPERATING REPORT

File with Court and submit copy to United States Trustee within 20 days after end of month.

REQUIRED DOCUMENTS	Form No.	Document Attached	Explanation Attached
Schedule of Cash Receipts and Disbursements	MOR-1	Yes
Bank Reconciliation (or copies of debtor’s bank reconciliations)	MOR-1 (CON’T)	Yes
Schedule of Professional Fees Paid	MOR-1b	Yes
Copies of bank statements		No	Note 1
Cash disbursements journals		No	Note 1
Statement of Operations	MOR-2	Yes
Balance Sheet	MOR-3	Yes
Status of Post-petition Taxes		No	Note 2
Copies of IRS Form 6123 or payment receipt		No	Note 1
Copies of tax returns filed during reporting period		No	Note 1
Summary of Unpaid Post-petition Debts	MOR-4	Yes
Listing of Aged Accounts Payable	MOR-4	Yes
Accounts Receivable Reconciliation and Aging	MOR-5	Yes
Debtor Questionnaire	MOR-5	Yes

(1) Due to the system constraints and/or the volume of the records, no attachment is provided, but is available to the UST upon request.

(2) The Company is current on all tax payments.

I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the attached documents are true and correct to the best of my knowledge and belief.

Signature of Debtor	Date
Signature of Joint Debtor	Date
/s/ Troy Carson	10/20/16
Signature of Authorized Individual*	Date
Troy Carson	CFO
Printed Name of Authorized Individual	Title of Authorized Individual

* Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 2 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-1: SCHEDULE OF CASH RECEIPTS AND DISBURSEMENTS

HERCULES OFFSHORE, INC., ET AL. DEBTOR

	Current Month				Cumulative Filing to Date
	Actual			Projected1	Actual			Projected1
Beginning Cash	$	145,410,858			$	207,705,799
RECEIPTS
Total Receipts		1,728,825				12,319,296
DISBURSEMENTS
Personnel Costs		5,583,117				21,735,523
Premises Rents		202,737				797,928
Insurance		—				5,261,698
Taxes		5,922				259,924
Utilities		112,365				422,990
Vendors and Others		1,005,451				3,827,069
Ordinary Course Professional Fees		144,732				538,820
Restructuring Professional Fees2		1,238,042				4,847,108
U.S. Trustee Quarterly Fees		—				88,575
Adequate Protection Debt and Assurance		3,057,158				52,013,498
Total Disbursements		11,349,524				89,793,133
CASH INTERNAL TRANSFER
Total Internal Transfer		821,295				6,379,493
Net Cash Flow		(8,799,404	)			(71,094,345	)
Ending Cash3	$	136,611,454			$	136,611,454

DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES4
Hercules Offshore, Inc.	$	20,617,519
Cliffs Drilling Company		800,536
Cliffs Drilling Trinidad L.L.C.		—
FDT LLC		—
FDT Holdings LLC		—
Hercules Drilling Company, LLC		2,055,442
Hercules Offshore Services LLC		4,701,549
Hercules Offshore Liftboat Company LLC		—
HERO Holdings, Inc.		9,477
SD Drilling LLC		6,851,964
THE Offshore Drilling Company		4,165,186
THE Onshore Drilling Company		—
TODCO Americas Inc.		93,912
TODCO International Inc.		—
TOTAL DISBURSEMENTS FOR CALCULATING U.S. TRUSTEE QUARTERLY FEES	$	39,295,587

(1) Projected amounts are excluded as the forecasted weekly activity beyond the week ending 9/3 are not included in the Cash Collateral Motion.

(2) Restructuring professional fees include estate professional fees and lender professional fees.

(3) Ending Cash balance excludes petty cash and collateral accounts.

(4) A majority of disbursements are made from centralized payroll and accounts payable bank accounts. Pro-rated amounts were allocated to the debtor entities based on percentage of expenses over the period.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 3 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-1a: BANK RECONCILIATIONS

Legal Entity1	Bank Name	Account Function	Account #	USD Balance as of 8/31
Hercules Offshore, Inc.	Amegy Bank of Texas, N.A.	Operating Account	****2838		—
Hercules Offshore, Inc,	Amegy Bank of Texas, N.A.	Flexible Spending Claims	****7288		—
Hercules Offshore, Inc.	Amegy Bank of Texas, N.A.	Singapore Operating Account	****0935		—
Hercules Offshore, Inc.	HSBC	Checking Account	****2845		5,184,655
Hercules Offshore, Inc.	HSBC	Investment Account	****1393		92,315,587
Hercules Offshore, Inc.	Amegy Bank of Texas, N.A.	Hercules Offshore Inc. Utilities	****1193		58,194
Cliffs Drilling Company	Amegy Bank of Texas, N.A.	Operating Account			—
Cliffs Drilling Company	HSBC	Local Operations	****1001		11,958
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Operating Account	****4656		16,128,281
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Payables	****5850		—
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Cayman Investment Sweep Account	****4656		—
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Money Market Investment Account	****8200		—
Hercules Drilling Company, LLC	Amegy Bank of Texas, N.A.	Cayman Self Directed Investment Account	****2321		—
Hercules Drilling Company, LLC	Capital One Bank	Investment Account	****7684		23,200,574
Hercules Drilling Company, LLC	Comerica Bank	Investment Account	****8881		—
Hercules Offshore Services LLC	Amegy Bank of Texas, N.A.	Payroll Account	****5069		—
TODCO Americas Inc.	Amegy Bank of Texas, N.A.	Operating Account	****8930		—

Notes:

(1) Includes only Debtor entity bank accounts

I attest that each of the Debtors’ corporate bank accounts is reconciled to monthly bank statements. The Company’s standard practice is to ensure that each corporate bank account is reconciled to monthly bank statements for each fiscal month within 30 days after month end. See above listing of each of the Debtors’ bank accounts and the book balance of the account as of the end of the fiscal month covered by this report.

/s/ Troy Carson	Troy Carson
Authorized Representative	Printed Name of Authorized Representative

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 4 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-1a: BANK RECONCILIATIONS

Legal Entity	Hercules Offshore, Inc.			Hercules Offshore, Inc.			Hercules Offshore, Inc.			Cliffs Drilling Company			Hercules Drilling Company, LLC
Bank Name	HSBC			HSBC			Amegy Bank of Texas, N.A.			HSBC			Amegy Bank of Texas, N.A.
Account #	****2845			****1393			****1193			****1001			****4656
Balance Per Books		$	5,184,655		$	92,315,587		$	58,194		$	11,958		$	16,128,281
Bank Balance		$	5,184,655		$	92,315,587		$	58,194		$	11,958		$	16,128,281
(+) Deposits In Transit			—			—			—			—			—
(-) Outstanding Checks			—			—			—			—			—
Other			—			—			—			—			—
Adjusted Bank Balance		$	5,184,655		$	92,315,587		$	58,194		$	11,958		$	16,128,281
Deposits In Transit	Date	Amount		Date	Amount		Date	Amount		Date	Amount		Date	Amount
		$	—		$	—		$	—		$	—		$	—
			—			—			—			—			—
			—			—			—			—			—
			—			—			—			—			—
Total Deposits In Transit		$	—		$	—		$	—		$	—		$	—
Outstanding Checks	Date	Amount		Date	Amount		Date	Amount		Date	Amount		Date	Amount
Total Outstanding Checks		$	—		$	—		$	—		$	—		$	—
Other	Date	Amount		Date	Amount		Date	Amount		Date	Amount		Date	Amount
		$	—		$	—		$	—		$	—		$	—
			—			—			—			—			—
			—			—			—			—			—
			—			—			—			—			—
Total Other		$	—		$	—		$	—		$	—		$	—

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 5 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-1a: BANK RECONCILIATIONS

Legal Entity	Hercules Drilling Company, LLC			Hercules Drilling Company, LLC			Hercules Drilling Company, LLC			Hercules Drilling Company, LLC				Hercules Offshore Services LLC
Bank Name	Amegy Bank of Texas, N.A.			Capital One Bank			Comerica Bank			Amegy Bank of Texas, N.A.1				Amegy Bank of Texas, N.A.1
Account #	****4656			****7684			****8881			****5850				****5069
Balance Per Books		$	—		$	23,200,574		$	—		$	(285,823	)		$	(1,973	)
Bank Balance		$	—		$	23,200,574		$	—		$	—			$	—
(+) Deposits In Transit			—			—			—			—				—
(-) Outstanding Checks			—			—			—			285,823				1,973
Other			—			—			—			—				—
Adjusted Bank Balance		$	—		$	23,200,574		$	—		$	(285,823	)		$	(1,973	)
Deposits In Transit	Date	Amount		Date	Amount		Date	Amount		Date	Amount			Date	Amount
		$	—		$	—		$	—		$	—			$	—
			—			—			—			—				—
			—			—			—			—				—
			—			—			—			—				—
Total Deposits In Transit		$	—		$	—		$	—		$	—			$	—
Outstanding Checks2	Date	Amount		Date	Amount		Date	Amount		Date	Amount			Date	Amount
Total Outstanding Checks		$	—		$	—		$	—		$	285,823			$	1,973
Other		$	—		$	—		$	—		$	—			$	—
			—			—			—			—				—
			—			—			—			—				—
			—			—			—			—				—
			—			—			—			—				—
Total Other		$	—		$	—		$	—		$	—			$	—

(1) The negative book balance in accounts ****5850 and ****5069 are due to those accounts being ZBA accounts in the Amegy bank account structure noted in the Cash Management Motion. As checks clear these bank accounts, funds are made available to those accounts to process checks presented for payment.

(2) Outstanding checks are available to the UST upon request.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 6 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-1b: SCHEDULE OF PROFESSIONAL FEES AND EXPENSES PAID

					Check		Amount Paid				Year-To-Date
Payee	Period Covered	Amount Approved		Payor	Number	Date	Fees		Expenses		Fees		Expenses
Alfaro Ferrer	N/A	$	—	Hercules Drilling Company, LLC	None	None	$	—	$	—	$	2,713	$	1,052
Bayard, PA	7/1/16 – 7/31/16		19,279	Hercules Drilling Company, LLC	None	None		19,064		215		39,315		528
Jones Walker	Period Ending 8/31/2016		14,633	Hercules Drilling Company, LLC	None	None		14,262		372		14,262		372
King & Spalding LLP	8/1/2016 – 8/31/2016		60,503	Hercules Drilling Company, LLC	None	None		60,213		290		410,386		6,568
Kirkland & Ellis LLP	Period Ending 8/31/2016		53,276	Hercules Drilling Company, LLC	None	None		49,788		3,489		312,166		5,548
Prime Clerk LLC	N/A		—	Hercules Drilling Company, LLC	None	None		—		—		136,587		527,404
White & Case LLP	Period Ending 8/31/2016		962,435	Hercules Drilling Company, LLC	None	None		926,979		35,456		3,040,450		130,899
Zolfo Cooper	7/1/2016 – 7/31/2016		127,917	Hercules Drilling Company, LLC	None	None		126,697		1,220		157,380		3,647

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 7 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

The Consolidated Debtor Entities

				Cumulative
REVENUES	Month			Filing to Date1
Revenue	$	789,242		$	12,944,181
Total Revenue		789,242			12,944,181
OPERATING EXPENSES
Operating Cost & Expenses		2,383,688			12,953,732
Depreciation & Amortization		630,274			2,812,761
General & Administrative		13,868,235			25,541,420
Total Operating Expenses		16,882,197			41,307,913
Operating Income		(16,092,955	)		(28,363,732	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		(40,905	)		63,648,542
Interest Expense		2,363,491			137,528,712
Income Taxes (Benefit)		(8,430	)		(5,439,275	)
Total Other Income and Expenses		2,314,156			195,737,979
Net Profit/(Loss)	$	(18,407,111	)	$	(224,101,711	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 8 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Hercules Offshore, Inc.

				Cumulative
REVENUES	Month			Filing to Date1
Revenue	$	—		$	900,305
Total Revenue		—			900,305
OPERATING EXPENSES
Operating Cost & Expenses		(30,488	)		(132,977	)
Depreciation & Amortization		—			291,667
General & Administrative		13,564,405			23,364,914
Total Operating Expenses		13,533,917			23,523,603
Operating Income		(13,533,917	)		(22,623,299	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		(33,113	)		63,845,891
Interest Expense		1,746,501			135,060,752
Income Taxes (Benefit)		(4,331	)		(4,053,243	)
Total Other Income and Expenses		1,709,057			194,853,400
Net Profit/(Loss)	$	(15,242,974	)	$	(217,476,699	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 9 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Cliffs Drilling Company

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	—		$	—
Total Revenue		—			—
OPERATING EXPENSES
Operating Cost & Expenses		208,126			746,134
Depreciation & Amortization		—			—
General & Administrative		8,139			50,612
Total Operating Expenses		216,265			796,747
Operating Income		(216,265	)		(796,747	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		(1,176	)		2,035
Interest Expense		—			—
Income Taxes (Benefit)		—			(1,158,886	)
Total Other Income and Expenses		(1,176	)		(1,156,851	)
Net Profit/(Loss)	$	(215,089	)	$	360,104

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 10 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Cliffs Drilling Trinidad L.L.C.

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 11 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

FDT LLC

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 12 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

FDT Holdings LLC

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 13 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Hercules Drilling Company, LLC

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	—		$	—
Total Revenue		—			—
OPERATING EXPENSES
Operating Cost & Expenses		(1,297,578	)		(922,368	)
Depreciation & Amortization		221,776			887,106
General & Administrative		291,142			983,358
Total Operating Expenses		(784,659	)		948,096
Operating Income		784,659			(948,096	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		(6,616	)		(132,085	)
Interest Expense		(75,750	)		(303,000	)
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		(82,366	)		(435,085	)
Net Profit/(Loss)	$	867,025		$	(513,011	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 14 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Hercules Offshore Services LLC

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	750,678		$	4,750,692
Total Revenue		750,678			4,750,692
OPERATING EXPENSES
Operating Cost & Expenses		1,327,802			3,907,996
Depreciation & Amortization		140,917			563,667
General & Administrative		—			0
Total Operating Expenses		1,468,718			4,471,663
Operating Income		(718,041	)		279,029
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—			(67,300	)
Interest Expense		—			—
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		—			(67,300	)
Net Profit/(Loss)	$	(718,041	)	$	346,329

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 15 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

Hercules Offshore Liftboat Company LLC

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 16 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

HERO Holdings, Inc.

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	—		$	—
Total Revenue		—			—
OPERATING EXPENSES
Operating Cost & Expenses		—			—
Depreciation & Amortization		—			—
General & Administrative		2,156			869,545
Total Operating Expenses		2,156			869,545
Operating Income		(2,156	)		(869,545	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—			—
Interest Expense		692,740			2,770,960
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		692,740			2,770,960
Net Profit/(Loss)	$	(694,896	)	$	(3,640,505	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 17 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

SD Drilling LLC

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	37,157		$	4,167,310
Total Revenue		37,157			4,167,310
OPERATING EXPENSES
Operating Cost & Expenses		1,397,946			5,797,446
Depreciation & Amortization		211,636			846,544
General & Administrative		—			0
Total Operating Expenses		1,609,582			6,643,991
Operating Income		(1,572,426	)		(2,476,681	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—			—
Interest Expense		(7,000	)		(28,000	)
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		(7,000	)		(28,000	)
Net Profit/(Loss)	$	(1,565,426	)	$	(2,448,681	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 18 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

THE Offshore Drilling Company

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	1,407		$	3,125,874
Total Revenue		1,407			3,125,874
OPERATING EXPENSES
Operating Cost & Expenses		756,521			3,472,065
Depreciation & Amortization		55,944			223,778
General & Administrative		2,394			272,991
Total Operating Expenses		814,859			3,968,833
Operating Income		(813,451	)		(842,959	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—			—
Interest Expense		—			—
Income Taxes (Benefit)		(4,099	)		(4,099	)
Total Other Income and Expenses		(4,099	)		(4,099	)
Net Profit/(Loss)	$	(809,352	)	$	(838,860	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 19 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

THE Onshore Drilling Company

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 20 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

TODCO Americas Inc.

REVENUES	Month			Cumulative Filing to Date1
Revenue	$	—		$	—
Total Revenue		—			—
OPERATING EXPENSES
Operating Cost & Expenses		21,359			85,435
Depreciation & Amortization		—			—
General & Administrative		—			—
Total Operating Expenses		21,359			85,435
Operating Income		(21,359	)		(85,435	)
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—			—
Interest Expense		7,000			28,000
Income Taxes (Benefit)		—			—
Total Other Income and Expenses		7,000			28,000
Net Profit/(Loss)	$	(28,359	)	$	(113,435	)

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 21 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-2: STATEMENT OF OPERATIONS

(Income Statement)

TODCO International Inc.

REVENUES	Month		Cumulative Filing to Date1
Revenue	$	—	$	—
Total Revenue		—		—
OPERATING EXPENSES
Operating Cost & Expenses		—		—
Depreciation & Amortization		—		—
General & Administrative		—		—
Total Operating Expenses		—		—
Operating Income		—		—
OTHER INCOME AND EXPENSES
Other (Income)/Expenses, Net		—		—
Interest Expense		—		—
Income Taxes (Benefit)		—		—
Total Other Income and Expenses		—		—
Net Profit/(Loss)	$	—	$	—

(1) The Company did not close the books on the petition date and therefore the values represent the period June 1 - September 30.

(2) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 22 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

The Consolidated Debtor Entities

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	136,611,454		$	145,410,858
Restricted Cash		—			—
Accounts Receivable – Trade		12,269,090			13,173,439
Accounts Receivable – Other		(3,321	)		(1,250	)
Due to/from Affiliates		(450,050,706	)		(453,071,827	)
Deposits		—			—
Prepaid & Other		10,946,731			8,536,665
Total Current Assets		(290,226,753	)		(285,952,115	)
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		84,894,933			85,775,405
OTHER ASSETS
Investment in/from Affiliates		1,724,702,689			1,724,702,689
Notes Receivable – Affiliates		959,514,329			959,514,329
Other Assets		5,603,995			5,649,307
Total Other Assets		2,689,821,013			2,689,866,325
Total Assets	$	2,484,489,193		$	2,489,689,614

LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	23,758,515		$	9,291,965
Accrued Liabilities		22,889,547			24,978,169
Interest Payable		—			—
Taxes Payable		(732,237	)		(1,009,289	)
Other Current Liabilities		189,985			289,985
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		(0	)		4,331
Notes Payable - Affiliates		499,814,329			499,814,329
Other Liabilities		194,374			204,921
Total Liabilities Not Subject to Compromise		546,114,513			533,574,411
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		347,058,331			346,433,438
Total Liabilities		893,172,844			880,007,849
SHAREHOLDERS EQUITY
Common Stock		200,041			200,041
Additional Paid-in-Capital		1,681,715,335			1,681,673,640
Contributed Capital		138,844,823			138,844,823
Treasury Stock		(325,548	)		(325,548	)
Retained Earning – Prior Year		(22,848,912	)		(22,848,912	)
Net Income		(206,269,389	)		(187,862,278	)
Net Shareholders Equity		1,591,316,350			1,609,681,766
Total Liabilities and Shareholders Equity	$	2,484,489,193		$	2,489,689,614

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 23 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

Hercules Offshore, Inc.

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	97,558,436		$	97,525,346
Restricted Cash		—			—
Accounts Receivable – Trade		4,001,197			4,001,197
Accounts Receivable – Other		—			—
Due to/from Affiliates		(679,945,944	)		(676,538,880	)
Deposits		—			—
Prepaid & Other		10,303,986			2,975,302
Total Current Assets		(568,082,324	)		(572,037,034	)
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		756,424,589			756,424,589
Notes Receivable – Affiliates		864,514,329			864,514,329
Other Assets		5,603,995			5,649,307
Total Other Assets		1,626,542,913			1,626,588,225
Total Assets	$	1,058,460,589		$	1,054,551,191
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	22,971,410		$	3,747,642
Accrued Liabilities		2,926,184			2,949,550
Interest Payable		—			—
Taxes Payable		(306,401	)		(306,401	)
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		0			4,331
Notes Payable - Affiliates		—			—
Other Liabilities		194,374			204,921
Total Liabilities Not Subject to Compromise		25,785,567			6,600,043
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		340,760,671			340,835,517
Total Liabilities		366,546,238			347,435,560
SHAREHOLDERS EQUITY
Common Stock		200,000			200,000
Additional Paid-in-Capital		588,109,061			588,067,366
Contributed Capital		—			—
Treasury Stock		(325,548	)		(325,548	)
Retained Earning – Prior Year		298,364,810			298,364,810
Net Income		(194,433,971	)		(179,190,997	)
Net Shareholders Equity		691,914,352			707,115,631
Total Liabilities and Shareholders Equity	$	1,058,460,589		$	1,054,551,191

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 24 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

Cliffs Drilling Company

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	11,958		$	12,036
Restricted Cash		—			—
Accounts Receivable – Trade		(460,950	)		(460,950	)
Accounts Receivable – Other		—			—
Due to/from Affiliates		87,861,547			87,953,607
Deposits		—			—
Prepaid & Other		—			674,475
Total Current Assets		87,412,555			88,179,167
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		1,000,000			1,000,000
OTHER ASSETS
Investment in/from Affiliates		3,499,897			3,499,897
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		3,499,897			3,499,897
Total Assets	$	91,912,453		$	92,679,064
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	235,440		$	789,767
Accrued Liabilities		58,901			56,097
Interest Payable		—			—
Taxes Payable		123,151			123,151
Other Current Liabilities		99,985			99,985
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		(1	)		(1	)
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		517,477			1,068,999
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		517,477			1,068,999
SHAREHOLDERS EQUITY
Common Stock		10			10
Additional Paid-in-Capital		210,903,996			210,903,996
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(118,718,232	)		(118,718,232	)
Net Income		(790,798	)		(575,709	)
Net Shareholders Equity		91,394,976			91,610,065
Total Liabilities and Shareholders Equity	$	91,912,453		$	92,679,064

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 25 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

Cliffs Drilling Trinidad L.L.C.

ASSETS	Book Value at End of			Book Value at End of
CURRENT ASSETS	Current Reporting Month			Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		(299	)		(299	)
Deposits		—			—
Prepaid & Other		—			—
Total Current Assets		(299	)		(299	)
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		1,144			1,144
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		1,144			1,144
Total Assets	$	845		$	845
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	—		$	—
Accrued Liabilities		—			—
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		—			—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		—			—
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		—			—
Contributed Capital		9,360			9,360
Treasury Stock		—			—
Retained Earning – Prior Year		(8,515	)		(8,515	)
Net Income		—			—
Net Shareholders Equity		845			845
Total Liabilities and Shareholders Equity	$	845		$	845

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 26 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

FDT LLC

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month		Book Value at End of Previous Month
Cash	$	—	$	—
Restricted Cash		—		—
Accounts Receivable – Trade		—		—
Accounts Receivable – Other		—		—
Due to/from Affiliates		—		—
Deposits		—		—
Prepaid & Other		—		—
Total Current Assets		—		—
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—		—
OTHER ASSETS
Investment in/from Affiliates		—		—
Notes Receivable – Affiliates		—		—
Other Assets		—		—
Total Other Assets		—		—
Total Assets	$	—	$	—
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month		Book Value at End of Previous Month
Accounts Payable	$	—	$	—
Accrued Liabilities		—		—
Interest Payable		—		—
Taxes Payable		—		—
Other Current Liabilities		—		—
Current portion of Long-Term Debt		—		—
Deferred Income Taxes		—		—
Notes Payable - Affiliates		—		—
Other Liabilities		—		—
Total Liabilities Not Subject to Compromise		—		—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—		—
Total Liabilities		—		—
SHAREHOLDERS EQUITY
Common Stock		—		—
Additional Paid-in-Capital		—		—
Contributed Capital		—		—
Treasury Stock		—		—
Retained Earning – Prior Year		—		—
Net Income		—		—
Net Shareholders Equity		—		—
Total Liabilities and Shareholders Equity	$	—	$	—

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 27 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

FDT Holdings LLC

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month		Book Value at End of Previous Month
Cash	$	—	$	—
Restricted Cash		—		—
Accounts Receivable – Trade		—		—
Accounts Receivable – Other		—		—
Due to/from Affiliates		—		—
Deposits		—		—
Prepaid & Other		—		—
Total Current Assets		—		—
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—		—
OTHER ASSETS
Investment in/from Affiliates		—		—
Notes Receivable – Affiliates		—		—
Other Assets		—		—
Total Other Assets		—		—
Total Assets	$	—	$	—
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month		Book Value at End of Previous Month
Accounts Payable	$	—	$	—
Accrued Liabilities		—		—
Interest Payable		—		—
Taxes Payable		—		—
Other Current Liabilities		—		—
Current portion of Long-Term Debt		—		—
Deferred Income Taxes		—		—
Notes Payable - Affiliates		—		—
Other Liabilities		—		—
Total Liabilities Not Subject to Compromise		—		—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—		—
Total Liabilities		—		—
SHAREHOLDERS EQUITY
Common Stock		—		—
Additional Paid-in-Capital		—		—
Contributed Capital		—		—
Treasury Stock		—		—
Retained Earning – Prior Year		—		—
Net Income		—		—
Net Shareholders Equity		—		—
Total Liabilities and Shareholders Equity	$	—	$	—

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 28 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

Hercules Drilling Company, LLC

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	39,043,033		$	47,875,089
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			(0	)
Due to/from Affiliates		60,776,520			53,454,595
Deposits		—			—
Prepaid & Other		642,745			696,101
Total Current Assets		100,462,297			102,025,784
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		9,906,248			10,128,223
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		90,000,000			90,000,000
Other Assets		—			—
Total Other Assets		90,000,000			90,000,000
Total Assets	$	200,368,545		$	202,154,007
LIABILITIES AND OWNER EQUITY	Book Value at End of			Book Value at End of
LIABILITIES NOT SUBJECT TO COMPROMISE	Current Reporting Month			Previous Month
Accounts Payable	$	365,568		$	937,703
Accrued Liabilities		17,757,205			19,837,557
Interest Payable		—			—
Taxes Payable		(389,633	)		(389,633	)
Other Current Liabilities		90,000			90,000
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		17,823,139			20,475,627
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		17,823,139			20,475,627
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		—			—
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		181,789,741			181,789,741
Net Income		755,665			(111,360	)
Net Shareholders Equity		182,545,406			181,678,381
Total Liabilities and Shareholders Equity	$	200,368,545		$	202,154,007

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 29 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

Hercules Offshore Services LLC

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	(1,973	)	$	(1,613	)
Restricted Cash		—			—
Accounts Receivable – Trade		2,754,202			2,691,055
Accounts Receivable – Other		(3,321	)		(1,250	)
Due to/from Affiliates		18,838,079			19,429,179
Deposits		—			—
Prepaid & Other		—			704,340
Total Current Assets		21,586,987			22,821,711
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		25,178,100			25,319,017
OTHER ASSETS
Investment in/from Affiliates		483,802,329			483,802,329
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		483,802,329			483,802,329
Total Assets	$	530,567,416		$	531,943,056
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	58,811		$	738,531
Accrued Liabilities		883,253			861,132
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		942,064			1,599,664
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		942,064			1,599,664
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		265,099,970			265,099,970
Contributed Capital		65,545,741			65,545,741
Treasury Stock		—			—
Retained Earning – Prior Year		201,796,230			201,796,230
Net Income		(2,816,589	)		(2,098,548	)
Net Shareholders Equity		529,625,352			530,343,393
Total Liabilities and Shareholders Equity	$	530,567,416		$	531,943,056

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 30 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

Hercules Offshore Liftboat Company LLC

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month		Book Value at End of Previous Month
Cash	$	—	$	—
Restricted Cash		—		—
Accounts Receivable – Trade		—		—
Accounts Receivable – Other		—		—
Due to/from Affiliates		—		—
Deposits		—		—
Prepaid & Other		—		—
Total Current Assets		—		—
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—		—
OTHER ASSETS
Investment in/from Affiliates		—		—
Notes Receivable – Affiliates		—		—
Other Assets		—		—
Total Other Assets		—		—
Total Assets	$	—	$	—
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month		Book Value at End of Previous Month
Accounts Payable	$	—	$	—
Accrued Liabilities		—		—
Interest Payable		—		—
Taxes Payable		—		—
Other Current Liabilities		—		—
Current portion of Long-Term Debt		—		—
Deferred Income Taxes		—		—
Notes Payable - Affiliates		—		—
Other Liabilities		—		—
Total Liabilities Not Subject to Compromise		—		—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—		—
Total Liabilities		—		—
SHAREHOLDERS EQUITY
Common Stock		—		—
Additional Paid-in-Capital		—		—
Contributed Capital		—		—
Treasury Stock		—		—
Retained Earning – Prior Year		—		—
Net Income		—		—
Net Shareholders Equity		—		—
Total Liabilities and Shareholders Equity	$	—	$	—

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 31 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

HERO Holdings, Inc.

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		16,880,323			16,880,323
Deposits		—			—
Prepaid & Other		(0	)		(0	)
Total Current Assets		16,880,323			16,880,323
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		480,974,730			480,974,730
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		480,974,730			480,974,730
Total Assets	$	497,855,053		$	497,855,053
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	—		$	—
Accrued Liabilities		45,266			43,110
Interest Payable		—			—
Taxes Payable		(25,207	)		(25,207	)
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		494,814,329			494,814,329
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		494,834,388			494,832,232
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		6,234,661			5,541,920
Total Liabilities		501,069,048			500,374,153
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		415,428,989			415,428,989
Contributed Capital		78,247,255			78,247,255
Treasury Stock		—			—
Retained Earning – Prior Year		(488,053,410	)		(488,053,410	)
Net Income		(8,836,829	)		(8,141,933	)
Net Shareholders Equity		(3,213,995	)		(2,519,100	)
Total Liabilities and Shareholders Equity	$	497,855,053		$	497,855,053

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 32 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

SD Drilling LLC

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		3,092,426			3,870,481
Accounts Receivable – Other		—			—
Due to/from Affiliates		35,543,890			35,687,983
Deposits		—			—
Prepaid & Other		—			2,270,494
Total Current Assets		38,636,316			41,828,957
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		37,814,785			38,276,421
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		5,000,000			5,000,000
Other Assets		—			—
Total Other Assets		5,000,000			5,000,000
Total Assets	$	81,451,101		$	85,105,378
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	92,429		$	2,057,847
Accrued Liabilities		242,114			265,548
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			100,000
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		334,543			2,423,395
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		334,543			2,423,395
SHAREHOLDERS EQUITY
Common Stock		—			—
Additional Paid-in-Capital		150,329,019			150,329,019
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(68,473,306	)		(68,473,306	)
Net Income		(739,155	)		826,271
Net Shareholders Equity		81,116,558			82,681,983
Total Liabilities and Shareholders Equity	$	81,451,101		$	85,105,378

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 33 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

THE Offshore Drilling Company

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		2,882,215			3,071,656
Accounts Receivable – Other		—			—
Due to/from Affiliates		8,410,563			8,496,233
Deposits		—			—
Prepaid & Other		—			1,045,082
Total Current Assets		11,292,779			12,612,972
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		10,745,800			10,801,744
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		—			—
Total Assets	$	22,038,578		$	23,414,716
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	34,857		$	890,143
Accrued Liabilities		976,624			965,175
Interest Payable		—			—
Taxes Payable		(134,146	)		(411,198	)
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		(0	)		(0	)
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		877,334			1,444,119
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		877,334			1,444,119
SHAREHOLDERS EQUITY
Common Stock		1			1
Additional Paid-in-Capital		51,844,299			51,844,299
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(31,445,138	)		(31,445,138	)
Net Income		762,082			1,571,435
Net Shareholders Equity		21,161,245			21,970,597
Total Liabilities and Shareholders Equity	$	22,038,578		$	23,414,716

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 34 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

THE Onshore Drilling Company

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		19,353			19,353
Deposits		—			—
Prepaid & Other		—			—
Total Current Assets		19,353			19,353
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		—			—
Total Assets	$	19,353		$	19,353
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	—		$	—
Accrued Liabilities		—			—
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		—			—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		—			—
SHAREHOLDERS EQUITY
Common Stock		10			10
Additional Paid-in-Capital		—			—
Contributed Capital		(4,957,532	)		(4,957,532	)
Treasury Stock		—			—
Retained Earning – Prior Year		4,976,875			4,976,875
Net Income		—			—
Net Shareholders Equity		19,353			19,353
Total Liabilities and Shareholders Equity	$	19,353		$	19,353

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 35 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

TODCO Americas Inc.

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		1,565,253			1,546,073
Deposits		—			—
Prepaid & Other		—			170,871
Total Current Assets		1,565,253			1,716,944
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		250,000			250,000
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		—			—
Total Assets	$	1,815,253		$	1,966,944
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	—		$	130,332
Accrued Liabilities		—			—
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		0			0
Notes Payable - Affiliates		5,000,000			5,000,000
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		5,000,000			5,130,332
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		63,000			56,000
Total Liabilities		5,063,000			5,186,332
SHAREHOLDERS EQUITY
Common Stock		10			10
Additional Paid-in-Capital		—			—
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(3,077,963	)		(3,077,963	)
Net Income		(169,794	)		(141,435	)
Net Shareholders Equity		(3,247,747	)		(3,219,388	)
Total Liabilities and Shareholders Equity	$	1,815,253		$	1,966,944

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 36 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-3: BALANCE SHEET

TODCO International Inc.

ASSETS CURRENT ASSETS	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Cash	$	—		$	—
Restricted Cash		—			—
Accounts Receivable – Trade		—			—
Accounts Receivable – Other		—			—
Due to/from Affiliates		6			6
Deposits		—			—
Prepaid & Other		—			—
Total Current Assets		6			6
PROPERTY, PLANT & EQUIPMENT
Net Property, Plant & Equipment		—			—
OTHER ASSETS
Investment in/from Affiliates		—			—
Notes Receivable – Affiliates		—			—
Other Assets		—			—
Total Other Assets		—			—
Total Assets	$	6		$	6
LIABILITIES AND OWNER EQUITY LIABILITIES NOT SUBJECT TO COMPROMISE	Book Value at End of Current Reporting Month			Book Value at End of Previous Month
Accounts Payable	$	—		$	—
Accrued Liabilities		—			—
Interest Payable		—			—
Taxes Payable		—			—
Other Current Liabilities		—			—
Current portion of Long-Term Debt		—			—
Deferred Income Taxes		—			—
Notes Payable - Affiliates		—			—
Other Liabilities		—			—
Total Liabilities Not Subject to Compromise		—			—
LIABILITIES SUBJECT TO COMPROMISE1&2
Total Liabilities Subject to Compromise		—			—
Total Liabilities		—			—
SHAREHOLDERS EQUITY
Common Stock		10			10
Additional Paid-in-Capital		—			—
Contributed Capital		—			—
Treasury Stock		—			—
Retained Earning – Prior Year		(4	)		(4	)
Net Income		—			—
Net Shareholders Equity		6			6
Total Liabilities and Shareholders Equity	$	6		$	6

(1) The all-trade motion authorizes the payment of all trade payables in normal course, and therefore only the Senior Notes and Interest Payable have been included in Liabilities subject to compromise. Additionally, Liabilities subject to compromise include the estimated make whole payment amounts.

(2) The Debtors continue accruing and paying interest on the Senior Notes.

(3) The balance sheets and statements of operations included in the Monthly Operating Report are unaudited and subject to adjustment, including year-end adjustments and any audit-related adjustments.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 37 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-4: SUMMARY OF UNPAID POSTPETITION DEBTS

	Number of Days Past Due
	Current			0-30		31-60		61-90		Over 90			Total
Accounts Payable	$	23,642,668		$	58,640	$	43,080	$	35,117	$	(20,990	)	$	23,758,515
Accrued Liabilities		22,889,547												22,889,547
Taxes Payable		(732,237	)											(732,237	)
Other Current Liabilities		189,985												189,985
Deferred Income Taxes		(0	)											(0	)
Other Liabilities		194,374												194,374
Total Unpaid Post-petition Debt	$	46,184,337		$	58,640	$	43,080	$	35,117	$	(20,990	)	$	46,300,184

(1) Both pre-petition and post-petition debts with the exception of the Senior Notes and interest have been included in the schedule as they will be paid in normal course pursuant to the Plan.

(2) Schedule represents the consolidated debtor entities.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 38 of 39

In re	HERCULES OFFSHORE, INC., ET AL. DEBTOR	Case No.	16-11385
	Debtor	Reporting Period:	SEP. 1 - SEP. 30, 2016

MOR-5: ACCOUNTS RECEIVABLE RECONCILIATION AND AGING

Accounts Receivable Reconciliation	Amount
Total Accounts Receivable at the beginning of the reporting period	$	13,173,439
(+) Amounts billed during the period		791,583
(-) Amounts collected during the period		(1,695,932	)
Total Accounts Receivable at the end of the reporting period		12,269,090
Accounts Receivable Aging Amount	Amount
0 - 30 days old		4,568,158
31 - 60 days old		2,516,018
61 - 90 days old		2,070,238
91+ days old		3,575,627
Total Accounts Receivable		12,730,040
Amount considered uncollectible (Bad Debt)		(460,950	)
Accounts Receivable (Net)	$	12,269,090

MOR-5: DEBTOR QUESTIONNAIRE

	Yes	No
1  Have any assets been sold or transferred outside the normal course of business this reporting period? If yes, provide an explanation below.*	X
2  Have any funds been disbursed from any account other than a debtor in possession account this reporting period? If yes, provide an explanation below.		X
3  Have all post petition tax returns been timely filed? If no, provide an explanation below.	X
4  Are workers compensation, general liability and other necessary insurance coverages in effect? If no, provide an explanation below.	X
5  Has any bank account been opened during the reporting period? If yes, provide documentation identifying the opened account(s). If an investment account has been opened provide the required documentation pursuant to the Delaware Local Rule 4001-3.		X

* Order to sell the jackup drilling rig Hercules 265 and related assets free and clear of all liens, claims and encumbrances was authorized on September 20, 2016. The seller, SD Drilling LLC, sold Hercules 265 on September 23, 2016 to the buyer, Offshore Equipment, LLC.

Case 16-11385-KJC     Doc 445     Filed 10/21/16     Page 39 of 39

Case Number	Debtor Name	Petition Date
16-11385	Hercules Offshore, Inc.	June 5, 2016
16-11386	Cliffs Drilling Company	June 6, 2016
16-11387	Cliffs Drilling Trinidad L.L.C.	June 6, 2016
16-11388	FDT LLC	June 6, 2016
16-11389	FDT Holdings LLC	June 6, 2016
16-11390	Hercules Drilling Company, LLC	June 6, 2016
16-11391	Hercules Offshore Services LLC	June 6, 2016
16-11392	Hercules Offshore Liftboat Company LLC	June 6, 2016
16-11393	HERO Holdings, Inc.	June 6, 2016
16-11394	SD Drilling LLC	June 6, 2016
16-11395	THE Offshore Drilling Company	June 6, 2016
16-11396	THE Onshore Drilling Company	June 6, 2016
16-11397	TODCO Americas Inc.	June 6, 2016
16-11398	TODCO International Inc.	June 6, 2016

Case 16-11385-KJC     Doc 445-1     Filed 10/21/16     Page 1 of 1

CERTIFICATE OF SERVICE

I, Matthew B. Harvey, certify that I am not less than 18 years of age, and that service of the foregoing Monthly Operating Report for the reporting period September 1, 2016 – September 30, 2016, was caused to be made on October 21, 2016, in the manner indicated upon the party identified below.

VIA HAND DELIVERY

Attn: Timothy Fox, Esq.

Office of the United States Trustee

J. Caleb Boggs Federal Building

844 North King Street, Suite 2207

Wilmington, DE 19801

Dated: October 21, 2016	/s/    Matthew B. Harvey
	Matthew B. Harvey (No. 5186)

9484515.4