Exhibit 10.2

EXECUTION VERSION

THIRD AMENDMENT TO CREDIT AGREEMENT

This THIRD AMENDMENT TO CREDIT AGREEMENT (this “Agreement”), is entered into as
of June 4, 2020, by and among INDEPENDENCE CONTRACT DRILLING, INC., a Delaware
corporation (“ICD”), SIDEWINDER DRILLING LLC, a Delaware limited liability
company formerly named ICD Operating LLC (“Sidewinder” and, together with ICD,
as the context requires, each a “Borrower”, and collectively, the “Borrowers”),
and the lenders identified on the signature pages hereof (each of such lenders,
together with its successors and permitted assigns, is referred to hereinafter
as a “Lender”).

W I T N E S S E T H:

WHEREAS, pursuant to that certain Credit Agreement, dated as of October 1, 2018
(as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among the Borrowers, the Lenders and the Agent, the
Lenders made Loans to the Borrowers pursuant to the terms and conditions
thereof;

WHEREAS, initially capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Credit Agreement; and

WHEREAS, the Borrowers and the Lenders desire to amend the Credit Agreement in
certain respects as more particularly set forth herein.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the parties hereto hereby
agrees as follow:

1.    Amendments to Credit Agreement. Subject to the satisfaction of the
conditions set forth in Section 2 of this Agreement, the Credit Agreement is
hereby amended as follows:

(a)    Section 1.1 of the Credit Agreement is hereby amended by amending and
restating the definition of “Liquidity” in its entirety as follows:

“Liquidity” means, as of any date of determination, the sum of (a) Availability
and (b) unrestricted cash and Cash Equivalents of the Loan Parties that are
deposited in a Deposit Account or Securities Account, as applicable, subject to
a first priority perfected lien (subject only to Permitted Liens permitted under
clauses (b) and (n) of the definition thereof) in favor of the Controlling Agent
as of such date.

(b)    Section 1.1 of the Credit Agreement is hereby further amended by amending
and restating the definition of “Obligations” in its entirety as follows:

“Obligations” means all loans (including the Loans), debts, principal
(including, for the avoidance of doubt, any PIK Amounts), interest (including
any interest that accrues after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), any Additional Amount, reimbursement or

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indemnification obligations with respect to letters of credit (irrespective of
whether contingent), premiums (including, without limitation, Prepayment
Premium), Funding Losses, if any, liabilities (including all amounts charged to
the Loan Account pursuant to this Agreement), obligations (including
indemnification obligations), fees (including the fees provided for in the Fee
Letter), Lender Group Expenses (including any fees or expenses that accrue after
the commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding),
guaranties, and all covenants and duties of any other kind and description owing
by any Loan Party arising out of, under, pursuant to, in connection with, or
evidenced by this Agreement or any of the other Loan Documents and irrespective
of whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and
including all interest not paid when due and all other expenses or other amounts
that any Loan Party is required to pay or reimburse by the Loan Documents or by
law or otherwise in connection with the Loan Documents. Without limiting the
generality of the foregoing, the Obligations of Borrowers under the Loan
Documents include the obligation to pay (i) the principal of the Loans,
(ii) interest accrued on the Loans, (iii) Lender Group Expenses, (iv) fees
payable under this Agreement or any of the other Loan Documents, and
(v) indemnities and other amounts payable by any Loan Party under any Loan
Document. Any reference in this Agreement or in the Loan Documents to the
Obligations shall include all or any portion thereof and any extensions,
modifications, renewals, or alterations thereof, both prior and subsequent to
any Insolvency Proceeding.

(c)    Section 1.1 of the Credit Agreement is hereby further amended by amending
and restating the definition of “Total Net Leverage Ratio” in its entirety as
follows:

“Total Net Leverage Ratio” means as of any date of determination, the ratio of
(a) (i) the aggregate principal amount of Indebtedness of the Borrowers and
their Subsidiaries on a Consolidated basis outstanding on such date, in an
amount that would be reflected on a balance sheet prepared as of such date on a
Consolidated basis in accordance with GAAP minus (ii) the aggregate amount of
unrestricted cash and Cash Equivalents of the Loan Parties that is deposited in
a Deposit Account or Securities Account, as applicable, subject to a first
priority perfected lien (subject only to Permitted Liens permitted under clauses
(b) and (n) of the definition thereof) in favor of the Controlling Agent, not to
exceed $10,000,000 as of such date, to (b) EBITDA for the latest Measurement
Period ending prior to such date, calculated for ICD on a Consolidated basis.

(d)    Section 1.1 of the Credit Agreement is hereby further amended by adding
the following new definitions in the appropriate alphabetical order therefor:

“Additional Amount” has the meaning specified therefor in Section 2.7(c) of this
Agreement.

 

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“Adjusted Liquidity” means, as of any date of determination, the sum of (a)
“Availability” (as defined in the ABL Credit Agreement as the same may be
amended, supplemented or otherwise modified from time to time in compliance with
the Intercreditor Agreement) as of such date plus (b) unrestricted cash and Cash
Equivalents of the Loan Parties that is deposited in a Deposit Account or
Securities Account, as applicable, subject to a first priority perfected lien
(subject only to Permitted Liens permitted under clauses (b) and (n) of the
definition thereof) in favor of the Controlling Agent as of such date.

“PIK Amount” has the meaning specified therefor in Section 2.4(c) of this
Agreement.

(e)    Section 2.2(c) of the Credit Agreement is hereby amended and restated in
its entirety as follows:

(c)    Optional Prepayments.

(i)    The Borrowers may, upon written notice to the Agent as provided in clause
(iii) below, at any time or from time to time, voluntarily prepay the Loans at
100% of the Called Principal of the Loans, plus the Prepayment Premium, the
applicable Additional Amount, and any Funding Losses, in each case, to the
extent applicable, plus the interest accrued and unpaid thereon; provided that
(A) any prepayment of a LIBOR Rate Loan shall be in a minimum Called Principal
amount of $1,000,000 or a whole multiple of $100,000 in excess thereof and
(B) any prepayment of a Base Rate Loan shall be in a minimum Called Principal
amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each
case, if less, the entire principal amount thereof then outstanding.

(ii)    Borrowers shall give the Agent written notice of any prepayment to be
made pursuant to Section 2.2(c) at least ten (10) Business Days, and not more
than thirty (30) days, prior to the Settlement Date specifying:

(A)    the Settlement Date;

(B)    the aggregate amount of the Called Principal of the Loans, the accrued
and unpaid interest thereon, the applicable Additional Amount, and the
applicable Prepayment Premium, if any; and

(C)    that such prepayment is to be made pursuant to Section 2.2(c).

Upon the giving of such notice, the Called Principal of the Loans together with
the applicable Additional Amount and the Prepayment Premium, if any, the Funding
Losses, if any, and the interest accrued and unpaid thereon to the Settlement
Date shall become due and payable on the Settlement Date.

 

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The Agent will promptly notify each Lender of its receipt of each such notice,
and of the amount of such Lender’s Pro Rata Share of such prepayment. If such
notice is given by the Borrowers, the Borrowers shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the date
specified therein.

(f)    Section 2.2(d) of the Credit Agreement is hereby amended and restated in
its entirety as follows:

(d)    Mandatory Prepayments.

(i)    Dispositions. If (x) ICD or any of its Subsidiaries Disposes of any
property or assets consisting of Term Priority Collateral or, after the
Discharge of ABL Priority Obligations, ABL Priority Collateral (other than any
Disposition of any property or assets permitted by clauses (a)-(i) and (k)-(o)
(subject to the proviso contained therein), inclusive, of the definition of
“Permitted Disposition”), or (y) any Casualty Event occurs with respect to any
property or assets consisting of Term Priority Collateral or, after the
Discharge of ABL Priority Obligations, ABL Priority Collateral, which results in
the realization or receipt by ICD or any of its Subsidiaries of Net Cash
Proceeds, such Person shall, subject to the terms of the Intercreditor
Agreement, cause to be prepaid an aggregate principal amount of the Loans in an
amount equal to 100% of all Net Cash Proceeds received therefrom, plus the
applicable Additional Amount and the Prepayment Premium, on or prior to the date
which is five (5) Business Days after the date of the realization or receipt by
such Person of such Net Cash Proceeds.

(ii)    Debt Securities. If ICD or any of its Subsidiaries incurs or issues any
Indebtedness after the Closing Date that is not otherwise permitted to be
incurred pursuant to Section 6.1, the Borrowers shall cause to be prepaid an
aggregate principal amount of the Loans in an amount equal to 100% of all Net
Cash Proceeds received therefrom, plus the applicable Additional Amount and the
Prepayment Premium, immediately upon receipt by ICD or any of its Subsidiaries
of such Net Cash Proceeds; provided, that such prepayment shall not be deemed to
cure any Default or Event of Default resulting from the incurrence of such
Indebtedness.

(g)    Section 2.4(c) of the Credit Agreement is hereby amended and restated in
its entirety as follows:

(c)    Payment. Except to the extent provided to the contrary in Section 2.7 or
Section 2.8(a), (i) all interest and all other fees payable hereunder or under
any of the other Loan Documents shall be due and payable, in cash, in arrears,
on

 

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the first day of each month, and (ii) all costs and expenses payable hereunder
or under any of the other Loan Documents, and all other Lender Group Expenses
shall be due and payable in cash on the earlier of (x) the first day of the
month following the date on which the applicable costs, expenses, or Lender
Group Expenses were first incurred, or (y) the date on which demand therefor is
made by Agent. Notwithstanding the foregoing, at any time Adjusted Liquidity is
less than $9,000,000, Borrowers may, at their option and upon prior notice to
the Lenders (which notice shall be delivered to the Lenders at least five
(5) Business Days prior to the applicable date on which interest is due for the
first applicable month), elect to pay accrued and unpaid interest due during the
one three-consecutive-month period immediately following such notice in kind by
adding the amount of such interest to the principal amount of the Loans on the
date such accrued and unpaid interest is otherwise due during such period (the
amount of any increase being the “PIK Amount”); provided, that, for the
avoidance of doubt, accrued and unpaid interest shall be paid in cash on the
Maturity Date and, to the extent required by the Loan Documents, on the date of
any repayment or prepayment (whether pursuant to a voluntary prepayment or
mandatory prepayment, acceleration or otherwise) of any Loan, with respect to
the principal amount of the Loan so repaid or prepaid.

(h)    Section 2.7 of the Credit Agreement is hereby amended by adding the
following new clause (c) immediately at the end of such Section:

(c)    Additional Amount. Borrowers shall pay to Agent, for the account of each
Lender, an additional amount (the “Additional Amount”) equal to 0.75% of the
aggregate original principal amount of the Loans plus all PIK Amounts, if any,
that have been added to such principal amount, being repaid or prepaid, or
required to have been repaid or prepaid, as applicable, whether as a voluntary
prepayment, mandatory prepayment, payment on the Maturity Date, or upon the
occurrence of an acceleration of the Obligations in accordance with Section 9.1
hereof, which amount is non-refundable and fully-earned as of June 4, 2020, and
shall be payable in cash.

2.    Conditions. The amendments set forth in Section 1 of this Agreement shall
become effective as of the date first set forth above upon the satisfaction of
each of the following conditions (the “Third Amendment Effective Date”):

(a)    the Lenders shall have received counterparts of this Agreement duly
executed by the Lenders and the Borrowers (it being understood electronic
executed copies are sufficient for satisfaction of this subsection (a));

(b)    no Default or Event of Default shall have occurred and be continuing;

(c)    all representations and warranties made by each Loan Party contained
herein and in the other Loan Documents shall be true and correct in all material
respects, in each case, with the same effect as though such representations and
warranties had been made on and as of the date hereof; provided that in the case
of any representation or warranty that expressly

 

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relates to a given date or period, such representation and warranty shall be
true and correct in all material respects as of the respective date or for the
respective period, as the case may be; provided, further, that if any of the
representations are qualified by or subject to a “material adverse effect”,
“material adverse change” or similar term or qualification, such representations
shall be true and correct in all respects; and

(d)    the Borrowers shall have paid the reasonable fees, charges and
disbursements of counsel to the Lenders incurred prior to the date hereof.

3.    Representations and Warranties of Loan Parties. Each Loan Party hereby
represents and warrants to the Lenders as follows:

(a)    it (i) is duly organized and existing and in good standing under the laws
of the jurisdiction of its organization, (ii) is qualified to do business in any
state where the failure to be so qualified could reasonably be expected to
result in a Material Adverse Effect, and (iii) has all requisite power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into this Agreement and to
carry out the transactions contemplated hereby and by the Credit Agreement as
amended hereby;

(b)    the execution and delivery of this Agreement, and the performance by it
of this Agreement and the Credit Agreement as amended hereby, (i) have been duly
authorized by all necessary action on the part of such Loan Party and (ii) do
not and will not (A) violate any material provision of federal, state, or local
law or regulation applicable to such Loan Party or its Subsidiaries, the
Governing Documents of such Loan Party or its Subsidiaries, or any order,
judgment, or decree of any court or other Governmental Authority binding on such
Loan Party or its Subsidiaries, (B) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
Material Contract of such Loan Party or its Subsidiaries where any such
conflict, breach or default could individually or in the aggregate reasonably be
expected to have a Material Adverse Effect, (C) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any assets of
such Loan Party, other than Permitted Liens, (D) require any approval of any
holder of Equity Interests of such Loan Party or any approval or consent of any
Person under any material agreement of any Loan Party, other than consents or
approvals that have been obtained and that are still in force and effect and
except, in the case of material agreements, for consents or approvals, the
failure of which to obtain could not individually or in the aggregate reasonably
be expected to cause a Material Adverse Effect, or (E) require any registration
with, consent, or approval of, or notice to or other action with or by, any
Governmental Authority, other than registrations, consents, approvals, notices,
or other actions that have been obtained and that are still in force and effect;

(c)    this Agreement and the Credit Agreement as amended hereby are the legally
valid and binding obligations of such Loan Party, enforceable against such Loan
Party in accordance with their respective terms, except as enforcement may be
limited by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors’ rights generally;
and

 

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(d)    the representations and warranties contained in Section 4 of the Credit
Agreement are true and correct in all material respects, in each case, with the
same effect as though such representations and warranties had been made on and
as of the Third Amendment Effective Date; provided that in the case of any
representation or warranty that expressly relates to a given date or period,
such representation and warranty shall be true and correct in all material
respects as of the respective date or for the respective period, as the case may
be; provided, further, that if any of the representations are qualified by or
subject to a “material adverse effect”, “material adverse change” or similar
term or qualification, such representations shall be true and correct in all
respects.

4.    Choice of Law and Venue; Jury Trial Waiver. THE VALIDITY OF THIS
AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, THE RIGHTS
OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED
HERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR RELATED
HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. THIS AGREEMENT SHALL BE SUBJECT TO THE
PROVISIONS REGARDING VENUE AND JURY TRIAL WAIVER SET FORTH IN SECTION 12 OF THE
CREDIT AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE,
MUTATIS MUTANDIS.

5.    Binding Effect. This Agreement shall be binding upon each Loan Party and
shall inure to the benefit of the Agent and the Lenders.

6.    Effect on Loan Documents; Ratification.

(a)    Except as expressly amended or otherwise modified hereby, the Credit
Agreement and all documents, instruments and agreements related thereto,
including, but not limited to, the other Loan Documents, and the grant by each
of the Grantors (as defined in the Guaranty and Security Agreement) to the
Agent, for the benefit of each member of the Lender Group, of a continuing
security interest in any and all right, title and interest of each Grantor in
and to all of the Collateral (as defined in the Guaranty and Security
Agreement), are hereby ratified and confirmed in all respects and shall continue
in full force and effect. No amendment, consent or waiver herein granted or
agreement herein made shall extend beyond the terms expressly set forth herein
for such amendment, consent, waiver or agreement, as the case may be, nor shall
anything contained herein be deemed to imply any willingness of the Agent or the
Lenders to agree to, or otherwise prejudice any rights of the Agent or the
Lenders with respect to, any similar amendments, consents, waivers or agreements
that may be requested for any future period, and this Agreement shall not be
construed as a waiver of any other provision of the Loan Documents or to permit
any Borrower or any other Loan Party to take any other action which is
prohibited by the terms of the Credit Agreement and the other Loan Documents.
Each Loan Party hereby ratifies and reaffirms the validity and enforceability of
all of the Liens and security interests heretofore granted and pledged by such
Loan Party pursuant to the Loan Documents to the Agent, on behalf and for the
benefit of the Lender Group, as collateral security for the Obligations, and
acknowledges that all of such Liens and security interests, and all Collateral
heretofore granted, pledged or otherwise created as security for the Obligations
continue to be and remain collateral security for the Obligations from and after
the date hereof. Each of the Guarantors hereby acknowledges and consents to this
Agreement and agrees that the Guaranty and Security Agreement and all other Loan
Documents to which such Guarantor is a party remain in full force and effect,
and each of the Guarantors confirms and ratifies all of its Obligations
thereunder.

 

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(b)    Each reference in the Credit Agreement or any other Loan Document to this
“Agreement”, “hereunder”, “herein”, “hereof”, “thereunder”, “therein”,
“thereof”, or words of like import referring to the Credit Agreement or any
other Loan Document shall mean and refer to such agreement as supplemented by
this Agreement.

7.    Release.

(a)    In consideration of the agreements of the Lenders and Agent contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each Loan Party, on behalf of
itself and its successors, assigns, and other legal representatives, hereby
absolutely, unconditionally and irrevocably releases, remises and forever
discharges Agent and each of the Lenders, their respective successors and
assigns, and their respective direct and indirect owners, partners, members,
managers, consultants, affiliates, subsidiaries, divisions, predecessors,
directors, officers, attorneys, employees, agents and other representatives, and
all persons acting by, through, under or in concert with any of them (Agent, the
Lenders and all such other Persons being hereinafter referred to collectively as
the “Releasees” and individually as a “Releasee”) of and from all demands,
actions, causes of action, suits, covenants, contracts, controversies,
agreements, promises, sums of money, accounts, bills, reckonings, damages and
any and all other claims, counterclaims, defenses, recoupment, rights of setoff,
demands and liabilities whatsoever (individually, a “Claim” and collectively,
“Claims”) of every name and nature, known or unknown, contingent or mature,
suspected or unsuspected, both at law and in equity, which any Loan Party or any
of its respective successors, assigns, or other legal representatives may now or
hereafter own, hold, have or claim to have against the Releasees or any of them
for, upon, or by reason of any circumstance, action, cause or thing whatsoever
which arises at any time on or prior to the day and date of this Agreement,
including, without limitation, for or on account of, or in relation to, or in
any way in connection with this Agreement or any of the other Loan Documents or
transactions thereunder or related thereto.

(b)    Each Loan Party understands, acknowledges and agrees that the release set
forth above may be pleaded as a full and complete defense and may be used as a
basis for an injunction against any action, suit or other proceeding which may
be instituted, prosecuted or attempted in breach of the provisions of such
release.

(c)    Each Loan Party agrees that no fact, event, circumstance, evidence or
transaction which could now be asserted or which may hereafter be discovered
shall affect in any manner the final, absolute and unconditional nature of the
release set forth above.

(d)    In entering into this Agreement, each Loan Party has consulted with, and
has been represented by, legal counsel and expressly disclaims any reliance on
any representations, acts or omissions by any of the Releasees and hereby agrees
and acknowledges that the validity and effectiveness of the release set forth
above does not depend in any way on any such representations, acts and/or
omissions or the accuracy, completeness or validity hereof. The release set
forth herein shall survive the termination of this Agreement and the Loan
Documents and the payment in full of the Obligations.

 

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(e)    Each Loan Party acknowledges and agrees that the release set forth above
may not be changed, amended, waived, discharged or terminated orally.

8.    Miscellaneous.

(a)    This Agreement is a Loan Document. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, taken together, shall constitute but one and the same Agreement.
Delivery of an executed counterpart of this Agreement by telefacsimile or other
electronic method of transmission shall be equally effective as delivery of an
original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telefacsimile or other electronic
method of transmission also shall deliver an original executed counterpart of
this Agreement but the failure to deliver an original executed counterpart shall
not affect the validity, enforceability, and binding effect of this Agreement.

(b)    Any provision of this Agreement which is prohibited or unenforceable
shall be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof in that jurisdiction or
affecting the validity or enforceability of such provision in any other
jurisdiction. Each provision of this Agreement shall be severable from every
other provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.

(c)    Headings and numbers have been set forth herein for convenience only.
Unless the contrary is compelled by the context, everything contained in each
Section applies equally to this entire Agreement.

(d)    Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed against any member of the Lender Group or any Loan Party, whether
under any rule of construction or otherwise. This Agreement has been reviewed by
all parties and shall be construed and interpreted according to the ordinary
meaning of the words used so as to accomplish fairly the purposes and intentions
of all parties hereto.

(e)    The pronouns used herein shall include, when appropriate, either gender
and both singular and plural, and the grammatical construction of sentences
shall conform thereto.

(f)    This Agreement shall be subject to the rules of construction set forth in
Section 1.4 of the Credit Agreement, and such rules of construction are
incorporated herein by this reference, mutatis mutandis.

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IN WITNESS WHEREOF, each Loan Party and the Lenders have caused this Agreement
to be duly executed by its authorized officer as of the day and year first above
written.

 

BORROWERS:     INDEPENDENCE CONTRACT DRILLING, INC., a Delaware corporation    
By:  

/s/ Philip A. Choyce

    Name:   Philip A. Choyce     Title:   EVP & CFO     SIDEWINDER DRILLING LLC
(formerly named ICD Operating LLC), a Delaware limited liability company     By:
 

/s/ Philip A. Choyce

    Name:   Philip A. Choyce     Title:   EVP & CFO

[Third Amendment to ICD Credit Agreement]

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LENDERS:     MSD PCOF PARTNERS IV, LLC     By:  

/s/ Marcello Liguori

    Name:   Marcello Liguori     Title:   Vice President

[Third Amendment to ICD Credit Agreement]