THIRD AMENDMENT TO AMENDED AND RESTATED

REVOLVING CREDIT AND SECURITY AGREEMENT

 

THIS THIRD AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY
AGREEMENT (this “Amendment”) is entered into as of March 31, 2014, among
INTEGRATED DRILLING EQUIPMENT, LLC, a Delaware limited liability company (“IDE”
and “Borrowing Agent”), INTEGRATED DRILLING EQUIPMENT COMPANY HOLDINGS, LLC, a
Delaware limited liability company (“Holdings”), and Integrated Drilling
Equipment Holdings Corp., formerly known as Empeiria Acquisition Corp., a
Delaware corporation (“Empeiria,” and collectively with IDE and Holdings,
“Borrowers”), each of the financial institutions which are now or which
hereafter become a party hereto (individually, each a “Lender” and collectively,
the “Lenders”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders
(PNC, in such capacity, the “Agent”). Capitalized terms used but not defined in
this Amendment shall have the meanings given them in the Credit Agreement
(defined below).

 

RECITALS

 

A. Borrowers, Agent and the Lenders are parties to that certain Amended and
Restated Revolving Credit and Security Agreement, dated as of December 14, 2012
(as amended by the First Amendment dated April 9, 2013 (the “First Amendment”),
the Second Amendment dated October 17, 2013 (the “Second Amendment”), and as
amended, restated, joined, extended, supplemented or otherwise modified from
time to time, the “Credit Agreement”).

 

B. The Obligations are scheduled to mature on March 31, 2014, and Borrowers have
requested that Agent and Lenders extend the stated term of the Credit Agreement
for an additional nine-month period.

 

C. Borrowers, Agent and Lender have agreed to amend the Credit Agreement,
subject to the terms and conditions of this Amendment.

 

AGREEMENTS

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are acknowledged, the undersigned hereby agree as follows:

 

Article I 

DEFINITIONS

 

1.01 Capitalized terms used in this Amendment are defined in the Credit
Agreement, unless otherwise stated herein.

 

1.02 All provisions of the Credit Agreement that are not amended under this
Amendment shall remain in full force and effect.

 

Article II
Amendments to Credit Agreement

 

2.01 The definition of “Eurodollar Rate” in Section 1.2 (General Terms) of the
Credit Agreement is deleted in its entirety and replaced with the following:

 

 

  

“Eurodollar Rate” shall mean for any Eurodollar Rate Loan for the then current
Interest Period relating thereto, the interest rate per annum determined by
Agent by dividing (the resulting quotient rounded upwards, if necessary, to the
nearest 1/100th of 1% per annum) (a) the rate which appears on the Bloomberg
Page BBAM1 (or on such other substitute Bloomberg page that displays rates at
which U.S. Dollar deposits are offered by leading banks in the London interbank
deposit market), or the rate which is quoted by another source selected by Agent
as an authorized information vendor for the purpose of displaying rates at which
U.S. Dollar deposits are offered by leading banks in the London interbank
deposit market (a “LIBOR Alternate Source”), at approximately 11:00 a.m., London
time, two (2) Business Days prior to the commencement of such Interest Period as
the London interbank offered rate for Dollars for an amount comparable to such
Eurodollar Rate Loan and having a borrowing date and a maturity comparable to
such Interest Period (or if there shall at any time, for any reason, no longer
exist a Bloomberg Page BBAM1 (or any substitute page) or any LIBOR Alternate
Source, a comparable replacement rate determined by Agent at such time (which
determination shall be conclusive absent manifest error)), by (b) a number equal
to 1.00 minus the Reserve Percentage.

 

The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan
that is outstanding on the effective date of any change in the Reserve
Percentage as of such effective date. The Agent shall give reasonably prompt
notice to the Borrowing Agent of the Eurodollar Rate as determined or adjusted
in accordance herewith, which determination shall be conclusive absent manifest
error.”

 

2.02 Section 2.1(a)(y)(ii)(B) of the Credit Agreement is hereby amended to
delete the amount “$3,750,000” where it appears and to replace it with
“$2,000,000.”

 

2.03 Section 6.5 (Financial Covenants) of the Credit Agreement is deleted in its
entirety and replaced with the following:

 

“(a) Minimum EBITDA. Cause to be maintained minimum EBITDA, measured quarterly,
of at least the applicable amount required as set forth in the following table,
for each applicable period:

 

Applicable Period Applicable Amount For the twelve month period
ending June 30, 2014 $3,000,000 For the twelve month period
ending September 30, 2014 $5,000,000 For the twelve month period
ending December 31, 2014 and thereafter $8,000,000

  

 

(b) Fixed Charge Coverage Ratio. Cause to be maintained as of the last day of
each month, commencing with the month ending June 30, 2014, and for each month
ending thereafter, a Fixed Charge Coverage Ratio of not less than the applicable
ratio required as set forth in the following table, for each applicable period:

 

2

 

 

 

Applicable Period Ratio For the six month period ending June 30, 2014 1.0 to 1.0
For the seven month period ending July 31, 2014, 1.0 to 1.0 For the eight month
period ending August 31, 2014, 1.0 to 1.0 For the nine month period ending
September 30, 2014, 1.1 to 1.0 For the ten month period ending October 31, 2014
1.1 to 1.0 For the eleven month period ending November 30, 2014 1.1 to 1.0 For
the twelve month period ending December 31, 2014, and thereafter 1.1 to 1.0”

 

 

2.04 Section 7.6 (Capital Expenditures) of the Credit Agreement is deleted in
its entirety and replaced with the following:

 

“Section 7.6 Capital Expenditures. Contract for, purchase or make any
expenditure or commitments for Capital Expenditures in any fiscal year in an
aggregate amount for all Borrowers in excess of $2,000,000 for the twelve months
ended on December 31, 2014.”

 

2.05 The first sentence of Section 13.1 (Term) of the Credit Agreement is hereby
amended by deleting the date “March 31, 2014” where it appears and replacing it
with “December 31, 2014”.

 

2.06 Subsection (a) of Section 16.2 (Entire Understanding) of the Credit
Agreement is hereby amended by inserting after the third sentence in such
subsection (a), the following new sentence:

 

“Notwithstanding the foregoing, Agent may modify this Agreement or any of the
Other Documents for the purposes of completing missing content or correcting
erroneous content of an administrative nature, without the need for a written
amendment, provided that the Agent shall send a copy of any such modification to
the Borrower and each Lender (which copy may be provided by electronic mail).”

 

Article III
effectiveness of amendments

 

3.01 Conditions. This Amendment shall be effective once each of the following
has been delivered to Agent or performed to Agent and Lender’s satisfaction:

 

(a)                this Amendment executed by Borrowers, Agent and Lender;

 

(b)               a fully executed Secretary’s Certificate of Borrowers
including incumbency of officers and resolutions of the board of directors
approving the terms of this Amendment and the EP Amendment (defined below);

 

3

 

  

(c)                payment by Borrowers to Agent for the account of PNC, as
Lender, the accrued and unpaid amendment and waiver fee which is due and payable
pursuant to the confidential Fee Letter dated October 17, 2013, entered into by
Borrowers and PNC in connection with the Second Amendment;

 

(d)               an executed copy of an amendment to the Elm Park Loan
Agreement in form and substance satisfactory to Agent and Lender in all
respects, and which, among other things, modifies the stated maturity date under
the Elm Park Loan Agreement to no earlier than June 30, 2015 (the “EP
Amendment”);

 

(e)                a fully executed confidential Fee Letter dated of even date
herewith between Borrowers and PNC, and payment by Borrowers to Agent for the
account of PNC, as Lender, of the amendment and extension fee which is due and
payable by Borrowers on the date hereof; and

 

(f)                such other documents, instruments and information as Agent or
Lender may reasonably request.

 

Article IV
RATIFICATIONS, RELEASE, REPRESENTATIONS AND WARRANTIES

 

4.01 Ratifications; Scope of Agreement. Except as specifically amended by this
Amendment, the Credit Agreement and Other Documents are unchanged and continue
in full force and effect and are valid, binding and enforceable against
Borrowers in accordance with their respective terms. Borrowers hereby ratify and
affirm their respective obligations under the Credit Agreement and Other
Documents, as amended herein.

 

4.02 RELEASE. Borrowers hereby acknowledge as of the date hereof that they have
no knowledge of any defense, counterclaim, offset, cross complaint, claim or
demand of any kind or nature whatsoever that can be asserted by them against
Agent or any Lender or to reduce or eliminate all or any part of their liability
to repay any advances or extensions of credit from Lenders to Borrowers under
the Credit Agreement, as amended hereby, or the other documents or to seek
affirmative relief or damages of any kind or nature from Lenders or Agent. For
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Borrower hereby, for itself and its successors and assigns,
fully and without reserve, releases and forever discharges each Agent and
Lender, its respective successors and assigns, officers, directors, employees,
representatives, trustees, attorneys, agents and affiliates (collectively the
"Released Parties" and individually a "Released Party") from any and all
actions, claims, demands, causes of action, judgments, executions, suits, debts,
liabilities, costs, damages, expenses or other obligations of any kind and
nature whatsoever, known or unknown, direct and/or indirect, at law or in
equity, whether now existing or hereafter asserted (INCLUDING, WITHOUT
LIMITATION, ANY OFFSETS, REDUCTIONS, REBATEMENT, CLAIMS OF USURY OR CLAIMS WITH
RESPECT TO THE NEGLIGENCE OF ANY RELEASED PARTY), for or because of any matters
or things occurring, existing or actions done, omitted to be done, or suffered
to be done by any of the Released Parties, in each case, on or prior to the date
hereof and are in any way directly or indirectly arising out of or in any way
connected to any of this Amendment, the Credit Agreement, any other Document, or
any of the transactions contemplated hereby or thereby (collectively, the
"Released Matters"). Each Borrower, by execution hereof, hereby acknowledges and
agrees that the agreements in this Section 4.02 are intended to cover and be in
full satisfaction for all or any alleged injuries or damages arising in
connection with the Released Matters.

 

4

 

  

4.03 Representations and Warranties. Borrowers jointly and severally represent
and warrant to Agent and Lender that (a) they possess all requisite company or
corporate power and authority to execute, deliver and comply with the terms of
this Amendment, (b) this Amendment has been duly authorized and approved by all
requisite company or corporate action on the part of each Borrower, (c) no other
consent of any individual or entity (other than Agent and Lender and the Elm
Park Agent and Elm Park Lenders to the extent required by Section 2.01(d)) is
required for this Amendment to be effective, (d) the execution and delivery of
this Amendment does not violate the organizational documents of any Borrower,
(e) the representations and warranties in the Credit Agreement and each Other
Document to which each Borrower is a party are true and correct in all material
respects on and as of the date of this Amendment as though made on the date of
this Amendment (except to the extent that such representations and warranties
speak to a specific date), (f) each Borrower is in compliance with all covenants
and agreements contained in the Credit Agreement and each Other Document to
which it is a party, and (g) no Default or Event of Default has occurred and is
continuing. The representations and warranties made in this Amendment shall
survive the execution and delivery of this Amendment. No investigation by Agent
or Lender is required for Agent or Lender to rely on the representations and
warranties in this Amendment.

 

Article V 

COVENANTS AND CONSENT

 

5.01 Cost Reduction Plan. Borrowers shall at all times continue to comply with
the provisions of the cost reduction plan approved by the board of directors of
Empeiria, which shall be in form and substance satisfactory to Agent and
Lenders. Borrowers shall promptly notify Agent of any modifications to such cost
reduction plan which are subsequently approved by the board of directors of
Empeiria.

 

5.02 Termination of Consultant. Agent and Lenders consent and agree that
Borrowers may terminate the engagement of the third-party business consulting
firm, as required by Section 4.01 of the First Amendment entered into by the
parties hereto. Borrowers acknowledge that Agent and Lenders reserve their
rights to require that Borrowers engage a consultant in the future, upon the
occurrence of any Default or Event of Default after the date hereof.

 

5.03 Consent to Amendment. Agent and Lenders hereby consent to the execution and
delivery of the amendment to the EP Amendment in the final form provided to
Agent on the date hereof.

 

Article VI
Miscellaneous

 

6.01 No Waiver of Defaults. Except as expressly set forth herein, this Amendment
does not constitute (i) a waiver of, or a consent to, (A) any provision of any
Credit Agreement or any Other Document not expressly referred to in this
Amendment, or (B) any present or future violation of, or default under, any
provision of the Credit Agreement or Other Documents, or (ii) a waiver of Agent
or Lender’s right to insist upon future compliance with each term, covenant,
condition and provision of the Credit Agreement or Other Documents.

 

6.02 Form. Each agreement, document, instrument or other writing to be furnished
to Agent under any provision of this Amendment must be in form and, other than
Cash Flow Projections, in substance satisfactory to Agent.

 

5

 

  

6.03 Headings. The headings and captions used in this Amendment are for
convenience only and will not be deemed to limit, amplify or modify the terms of
this Amendment, the Credit Agreement, or the Other Documents.

 

6.04 Costs, Expenses and Attorneys’ Fees. Borrowers jointly and severally agree
to pay or reimburse Agent and Lender on demand for all its reasonable
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation, and execution of this Amendment and other documents executed in
connection therewith, including, without limitation, the reasonable fees and
disbursements of Agent and Lender’s counsel.

 

6.05 Successors and Assigns. This Amendment shall be binding upon and inure to
the benefit of each of the undersigned and their respective successors, assigns,
heirs and legal representatives, as applicable.

 

6.06 Multiple Counterparts. This Amendment may be executed in any number of
counterparts with the same effect as if all signatories had signed the same
document. All counterparts must be construed together to constitute one and the
same instrument. This Amendment may be transmitted and signed by facsimile,
portable document format (PDF), and other electronic means. The effectiveness of
any such documents and signatures shall, subject to applicable law, have the
same force and effect as manually-signed originals and shall be binding on
Borrowers, Agent and Lender.

 

6.07 Governing Law. This Amendment must be construed, and its performance
enforced, under Texas law.

 

6.08 Entirety. This Amendment, the Credit Agreement and the Other Documents (as
amended hereby) represent the final agreement among the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements by the Parties. There are no unwritten oral agreements among the
Parties.

 

 

[Signatures are on the following pages]

 

6

 

 

IN WITNESS WHEREOF, this Amendment is executed by each of the undersigned as of
the date first written above.

 

  BORROWERS:         INTEGRATED DRILLING EQUIPMENT, LLC               By: /s/
Norman Michael Dion   Name: Norman Michael Dion   Title: Chief Financial Officer
              INTEGRATED DRILLING EQUIPMENT COMPANY HOLDINGS, LLC              
By:  /s/ Norman Michael Dion   Name: Norman Michael Dion   Title:  Chief
Financial Officer               Integrated Drilling Equipment Holdings Corp.,
formerly known as Empeiria Acquisition Corp.               By:  /s/ Norman
Michael Dion   Name: Norman Michael Dion   Title:  Chief Financial Officer

 

 

 

Signature Page to Third Amendment to Amended and Restated

Revolving Credit and Security Agreement

 

 

  AGENT AND LENDER:       PNC BANK, NATIONAL ASSOCIATION       By:  /s/ Kay L.
Murphy     Kay L. Murphy
Vice President

 

 

 

Signature Page to Third Amendment to Amended and Restated

Revolving Credit and Security Agreement