THIS DRILL PIPE RENTAL AGREEMENT (this "Agreement") is entered into effective the 25th day of February, 2002 (the "Effective Date"), by and between Chiles Offshore Inc., a Delaware corporation ("Lessor"), and Hercules Offshore Corporation, a Texas corporation ("Lessee").

TERMS AND CONDITIONS

1. DRILL PIPE. Lessor hereby rents to Lessee the drill pipe described on the attached Exhibit A (the "Pipe").

2. TERM OF AGREEMENT. the "Term" of this Agreement shall begin when the Pipe leaves the yard of Hadco Services, Inc. located at 3830 Pinhook, Broussard, Louisiana 70518 (the "Yard"), and continue until the first anniversary of the Effective Date. Lessee shall pay Lessor the Rental (as defined below) throughout such twelve (12) month Term whether or not Lessee uses or retains possession of the Pipe during all of the Term.

3. RENTAL CHARGES.

3.1 Rental Rate. Lessee will pay Lessor, and Lessor will accept as payment from Lessee, as rental for the Pipe, a Rental charge of Seven Hundred and No/100 Dollars ($700.00) per day (the "Rental") for each day during the Term, and for each day of any additional period after the Term up to and including the day on which (i) Lessee returns all of the Pipe F. O. B. the Yard or (ii) Lessor receives from Lessee the Purchase Price  (as defined below) upon Lessee's timely exercise of the Purchase Option (as defined below), whichever occurs first.

3.2 No Set off. Lessee agrees to pay rent when due irrespective of any claims, demands, set offs, actions, suits or proceedings that it may have or assert against Lessor or any supplier or manufacturer of Pipe or any portion thereof, or any one or more others.

4. TRANSPORTATION CHARGES. All transportation charges, including, without limitation, transportation by truck, rail or vessel, and drayage charges shall be borne by Lessee even though Lessor may arrange such transportation on behalf of Lessee.

5. WELL CONDITIONS. Well or other drilling conditions that prevent satisfactory utilization of the Pipe do not relieve Lessee of its responsibility for Rental, repair costs, and/or any other obligations assumed by Lessee.

6. TERMS OF PAYMENT. Lessor shall invoice Lessee during each month of the Term for the Rental payable for such month. All Rental charges or other amounts payable by Lessee hereunder shall be due and payable to Lessor at its address in Houston, Texas within thirty (30) days following the date of the invoice from Lessor. Interest may be charged by Lessor and be payable by Lessee at a rate of 1 1/2% per month or at the maximum legal rate of interest, whichever is lower, on all amounts due hereunder not paid within such thirty (30) day period. If    the overdue account is placed in the hands of an attorney for collection or if suit is filed to collect the account, or any part thereof, Lessee agrees to pay all costs and a reasonable sum as attorney's fees in addition to the amount owing on the account.

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