SECOND AMENDMENT TO TERM LOAN AND SECURITY
AGREEMENT


 


THIS SECOND AMENDMENT
TO TERM LOAN AND SECURITY AGREEMENT (this “Amendment”) dated as of October 17, 2013, among INTEGRATED
DRILLING EQUIPMENT HOLDINGS CORP. (formerly known as Empeiria Acquisition Corp., “IDE Holdings Corp.”),
INTEGRATED DRILLING EQUIPMENT, LLC, a Delaware limited liability company (“IDE”), and INTEGRATED DRILLING
EQUIPMENT COMPANY HOLDINGS, LLC, a Delaware limited liability company (“Holdings LLC”; IDE Holdings
Corp., IDE and Holdings LLC are referred to hereinafter each individually as a “Borrower”, and individually
and collectively, jointly and severally, as the “Borrowers”), the lenders which are a party hereto (collectively,
the “Lenders” and individually a “Lender”) and ELM PARK CAPITAL MANAGEMENT,
LLC, a Delaware limited liability company (“Elm Park Capital Management”), as agent for Lenders (Elm
Park Capital Management, in such capacity, the “Agent”). Capitalized terms used but not defined in this
Amendment shall have the meanings given them in the Term Loan and Security Agreement (defined below).


 


RECITALS


 


A.           Borrowers,
Agent and the Lenders are parties to that certain Term Loan and Security Agreement, dated as of December 14, 2012 (as amended,
restated, joined, extended, supplemented or otherwise modified from time to time, the “Term Loan and Security Agreement”);


 


B.           The
following Events of Default have occurred and are continuing:


 


(i) an Event of
Default under Section 10.5 of the Term Loan and Security Agreement as a result of Borrowers’ failure to comply
with the Minimum Liquidity Test set forth in Section 6.5(f) of the Term Loan and Security Agreement for the two consecutive
months ending June 30, 2013, for the two consecutive months ending July 31, 2013, for the two consecutive months ending August
31, 2013, and for the two consecutive months ending September 30, 2013;


 


(ii) an Event of
Default under Section 10.5 of the Term Loan and Security Agreement as a result of Borrowers’ failure to comply
with the Minimum EBITDA covenant set forth in Section 6.5(c) of the Term Loan and Security Agreement for the twelve
month period ending June 30, 2013 and the twelve month period ending September 30, 2013;


 


(iii) an Event
of Default under Section 10.5 of the Term Loan and Security Agreement as a result of Borrowers’ failure to
comply with the Total Leverage Ratio covenant set forth in Section 6.5(d) of the Term Loan and Security Agreement
for the quarter period ending June 30, 2013 and the quarter period ending September 30, 2013 (the Events of Default described in
clauses (i) through (iii), collectively the “Existing Defaults”).


 


C.           Borrowers,
Agent and Lenders have agreed to amend the Term Loan and Security Agreement and Other Documents, 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


Amendments
to Term loan and security Agreement and Other Documents.


 


1.01         Section
2.1 (Term Loan) of the Term Loan and Security Agreement is hereby amended by amending and restating the table set forth
therein in its entirety as follows:


 


	Date	 	Installment Amount	 
	September 30, 2013	 	$	150,000	 
	December 31, 2013	 	$	150,000	 
	March 31, 2014	 	$	300,000	 
	June 30, 2014	 	$	300,000	 




 


1.02         Section
6.5(a) of the Credit Agreement is hereby amended and restated in its entirety and replaced with the following:


 


“(a)
[Intentionally Omitted.]”


 


1.03         Section
6.5(b) of the Credit Agreement is hereby amended and restated in its entirety and replaced with the following:


 


“(b)
[Intentionally Omitted.]”


 


1.04         Section
6.5(c) of the Credit Agreement is hereby amended by amending and restating the table set forth therein in its entirety
as follows:


 


	Applicable Amount	 	 	Applicable Period
	$	3,000,000	 	 	For the twelve month period ending December 31, 2013
	$	5,000,000	 	 	For the twelve month period ending March 31, 2014
	$	8,000,000	 	 	For the twelve month period ending June 30, 2014




 




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1.05         Section
6.5(d) of the Credit Agreement is hereby amended and restated in its entirety and replaced with the following:


 


“(d)
[Intentionally Omitted.]”


 


1.06         
Section 6.5(e) of the Credit Agreement is hereby amended by amending and restating the table set forth therein in
its entirety as follows:


 


	Amount	 	 	Applicable Period
	$	2,000,000	 	 	For the twelve month period ending December 31, 2013
	$	3,000,000	 	 	For the twelve month period ending March 31, 2014
	$	3,000,000	 	 	For the twelve month period ending June 30, 2014



 


1.07         Section
13.1 (Term) of the Term Loan and Security Agreement is hereby amended by deleting the text “December 14, 2016”
and replacing it with “September 30, 2014”.


 


Article
II


effectiveness
of amendments


 


2.01         Conditions.
This Amendment shall be effective as of the date hereof once each of the following has been delivered to Agent or performed to
Agent’s satisfaction:


 


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


 


(b)          Secretary’s
Certificate of Borrowers including incumbency of officers and resolutions of the board of directors approving the terms of this
Amendment;


 


(c)          an
executed copy of an amendment to the First Lien Loan Agreement in form and substance satisfactory to Agent and Lenders in all respects,
which, among other things, reduces the commitments of the First Lien Lenders to no less than $15,000,000 and waives Borrowers’
non-compliance with certain covenants set forth in the First Lien Loan Agreement;


 


(d)          an
executed copy of an amendment to the First Lien Intercreditor Agreement in form and substance satisfactory to Agent and Lenders
in all respects, which, among other things, reduces the amount of principal, letter of credit exposure and Senior Hedging Obligations
(as defined therein) permitted under the First Lien Loan Agreement and set forth in the definition of Maximum Senior Principal
Amount to be no greater than $17,500,000;


 


(e)          written
consent from the First Lien Lenders to all terms and conditions of this Amendment and that this Amendment is expressly permitted
under the First Lien Intercreditor Agreement; and


 


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


 




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Article
III


WAIVERS,
CoNSENT, REPRESENTATIONS AND WARRANTIES


 


3.01         Waiver
of Existing Default. Subject to the terms and conditions set out in this Amendment, and in reliance of the representations
and warranties of Borrowers set forth in Section 3.05 hereof, Agent and Lenders hereby (a) waive any violation
of, or noncompliance with, any provision of Term Loan and Security Agreement or any Other Documents caused solely by the Existing
Defaults, and (b) agree not to exercise any of their rights available under the Term Loan and Security Agreement or the Other
Documents solely as a result of any such violation or noncompliance described in clause (a) of this Section 3.01.
Except as set forth in the first sentence of this Section 3.01, Borrowers hereby agree that (i) such waiver does
not constitute a waiver of any present or future violation of or noncompliance with any provision of the Term Loan and Security
Agreement or Other Documents or a waiver of Agent’s or Lenders’ rights to insist upon strict compliance with each term,
covenant, condition, and provision of the Term Loan and Security Agreement or any Other Documents executed from time to time in
connection therewith, or (ii) prejudice any right or remedy Agent or Lenders may now have (after giving effect to the foregoing
waiver) or may have in the future under or in connection with the Term Loan and Security Agreement or any Other Documents. Except
as set forth in the first sentence of this Section 3.01, Agent and Lenders hereby reserve all rights granted under
the Term Loan and Security Agreement, this Amendment, and any other contract or instrument among Borrowers, Lenders and Agent.


 


3.02         Control
Agreement. Agent and Lenders agree that the date by which Borrowers are required to provide a Blocked Account Control Agreement
for each Blocked Accounts, per Section 4.15(h) of the Term Loan and Security Agreement, is extended to October 17,
2013.


 


3.03         Consent
to Amendment. Agent and Lenders hereby consent to the execution and delivery of the amendment to the First Lien Loan Agreement
in the form provided to Agent on or before the date hereof.


 


3.04         Scope
of Agreement; RELEASE. Except as specifically amended and/or waived by
this Amendment, the Term Loan and Security 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 acknowledge as of the date hereof that they have no knowledge of any action, claim, CROSS COMPLAINT, DEFENSE, COUNterCLAIM,
OFFSET, demaND, cause of action, judgment, execution, suit, debt, liability, cost, damage, expense or other obligation 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 Term Loan and Security 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, for itself and its
successors and assigns, fully and without reserve, hereby FOREVER releases, disclaims, and DISCHARGES EACH Agent or any Lender,
its respective successors and assigns, and their respective directors, officers, affiliates, attorneys, employees, TRustees, representatives
and agents (COLLECTIVELY, THE “RELEASED PARTIES” and INDIVIDUALLY, A “RELEASED PARTY”) FROM any AND all
actions, claims, CROSS COMPLAINTS, DEFENSES, COUNTERCLAIMS, OFFSETS, 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),
whatsoever in each case existing as of the date hereof, or which may hereafter accrue
solely to the extent regarding any actions or facts occurring prior to the date hereof.


 




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3.05         Representations
and Warranties. Borrowers jointly and severally represent and warrant to Agent and Lenders 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 Lenders and the First Lien Agent and First Lien 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 Term Loan and Security
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 or to the extent such representations and warranties relate to the Existing Defaults),
(f) each Borrower is in compliance with all covenants and agreements, other than with respect to the Existing Defaults, contained
in the Term Loan and Security Agreement and each Other Document to which it is a party, and (g) no Default or Event of Default
(other than the Existing Defaults) has occurred and is continuing, (h) Borrowers have delivered to Agent a true and correct copy
of the Rig & Equipment Sale Agreement effective as of September 11, 2013 (the “Olmos Contract”),
between IDE and Olmos Drilling, LLC, for the design, manufacture and servicing by Borrowers of a Sparta Series Model 1500 drilling
rig, (i) the Olmos Contract is in full force and effect, has not been amended or modified in any manner adverse to the interests
of Agent and Lenders, and IDE is not in default thereunder, and (j) the aggregate revenue that IDE reasonably expects to receive
in cash thereunder is greater than $14,000,000. The representations and warranties made in this Amendment shall survive the execution
and delivery of this Amendment. No investigation by Agent or Lenders is required for Agent or Lenders to rely on the representations
and warranties in this Amendment.


 


Article
IV


COVENANTS


 


4.01         Cost
Reduction Plan. Borrowers shall at all times comply in all respects with with the provisions of the cost reduction plan approved
by the board of directors of IDE Holdings Corp. which shall be in form and substance satisfactory to Agent and Lenders (it being
agreed that the cost reduction plan included in the board resolutions of the Borrowers attached to the Secretary’s Certificate
delivered pursuant to Section 2.01(b) hereof is satisfactory to Agent and Lenders).


 


4.02         Preferred
Stock Issuance. In the event that Borrowers do not comply with the requirements set forth in Section 4.03 by the dates specified
therein, (a) on or before October 31, 2013, Agent shall have received a binding term sheet entered into by Borrowers in connection
with a preferred stock investment in IDE Holdings Corp., in an aggregate amount of at least $1,000,000, to be made on or before
November 14, 2013 and (b) on or prior to November 14, 2013, (i) Borrowers shall deliver to Agent copies of the material definitive
agreements to be executed in connection with such preferred stock investment in IDE Holdings Corp. in an aggregate amount of at
least $1,000,000; provided that any issuance of Equity Interests in connection with such investment would not constitute Disqualified
Equity Interests and (ii) Agent shall have received evidence in form satisfactory to it that (A) IDE Holdings Corp. has received
net cash proceeds of such preferred stock investment in an aggregate amount of at least $1,000,000; provided that any issuance
of Equity Interests in connection with such investment would not constitute Disqualified Equity Interests and (B) IDE Holdings
Corp. has made a capital contribution to IDE equal to 100% of such net cash proceeds. For the avoidance of doubt, Borrowers
shall not be obligated to prepay the outstanding principal amount of the Obligations in accordance with Section 2.21(d) of the
Term Loan and Security Agreement with the first $1,000,000 in net cash proceeds of preferred stock investments described in this
Section 4.02.


 




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4.03         Backlog.
On or before October 31, 2013, Agent shall have received evidence satisfactory to it that IDE has received purchase orders or entered
into executed contracts with Customers (in addition to the Olmos Contract), each of which shall be dated on or after August 25,
2013, for the design, manufacture, and servicing by Borrowers of one or more drilling rigs (collectively, and together with the
Olmos Contract, the “Rig Contracts”), and all of which, shall have aggregate revenue value attributable thereto of
at least $28,000,000; provided that the Rig Contracts executed by IDE and PEMEX Procurement International, Inc. (formerly Integrated
Trade Systems, Inc.), as agent for PEMEX-Exploración y Producción shall be excluded from such revenue calculation.
Upon the request of Agent, Borrowers shall provide (x) a detailed report reflecting the unrealized revenue attributable to the
Rig Contracts, on a contract by contract basis and (y) copies of underlying Rig Contracts. Anything to the contrary contained herein
notwithstanding, any Event of Default resulting from the failure by Borrowers to comply with the provisions of this Section 4.03
shall be deemed cured by a preferred stock investment in IDE Holdings Corp., in an aggregate amount of at least $1,000,000, pursuant
to Section 4.02(b) and, on and after the date of such equity contribution, such failure by Borrowers to comply with this Section
4.03 shall no longer constitute an Event of Default.


 


Article
V


Miscellaneous.


 


5.01         No
Waiver; Effect of Amendments; etc.. Except as expressly set forth herein, this Amendment does not constitute (i) a waiver of,
or a consent to, (A) any provision of any Term Loan and Security 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 Term Loan and Security Agreement
or Other Documents, or (ii) a waiver of Agent’s or Lenders’ right to insist upon future compliance with each term,
covenant, condition and provision of the Term Loan and Security Agreement or Other Documents. This Amendment shall constitute an
Other Document under the Term Loan and Security Agreement and any failure by any Borrower to comply with any of the provisions
of this Amendment when due shall constitute an immediate Event of Default under the Term Loan and Security Agreement. Upon and
after the effectiveness of this Amendment, each reference in the Term Loan and Security Agreement to “this Agreement”,
“hereunder”, “herein”, “hereof” or words of like import referring to the Term Loan and Security
Agreement, and each reference in the other Documents to “the Loan Agreement”, “thereunder”, “therein”,
“thereof” or words of like import referring to the Term Loan and Security Agreement, shall mean and be a reference
to the Term Loan and Security Agreement as modified and amended hereby.


 


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


 


5.03         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 Term Loan and Security Agreement, or the Other Documents.


 




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5.04         Costs,
Expenses and Attorneys’ Fees. Borrowers jointly and severally agree to pay or reimburse Agent and Lenders 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 Lenders’ counsel.


 


5.05         Reaffirmation
of Obligations. Each Borrower hereby reaffirms its obligations under each Loan Document to which it is a party. Each Borrower
hereby further ratifies and reaffirms the validity and enforceability of all of the liens and security interests heretofore granted,
pursuant to and in connection with the Term Loan and Security Agreement or any other Document, to Agent, as collateral security
for the Obligations, and acknowledges that all of such Liens and security interests, and all Collateral heretofore pledged as security
for such Obligations, continue to be and remain collateral for such Obligations as of the date hereof. Each Borrower hereby acknowledges,
confirms and agrees that as of the close of business on August 31, 2013, the Borrowers were indebted to the Lenders for the Term
Loan in an aggregate outstanding principal balance of $19,921,043.24, plus accrued and unpaid interest in the amount of
$274,467.70, plus accrued and unpaid costs and expense owing under the Documents. All such Obligations owing by the Borrowers
are unconditionally owing by the Borrowers to Agent and the Lenders, without offset, defense, withholding, counterclaim or deduction
of any kind, nature or description whatsoever and shall be payable in accordance with the terms of the Term Loan and Security Agreement
and the other Documents.


 


5.06         Ratification.
Each Borrower hereby restates, ratifies and reaffirms each and every term and condition set forth in the Term Loan and Security
Agreement and the other Documents to which it is a party effective as of the date hereof and as amended hereby.


 


5.07         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.


 


5.08         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 Lenders.


 


5.09         Governing
Law; Venue; Etc.. This Amendment must be construed, and its performance enforced, under the laws of the State of New York applied
to contracts to be performed wholly within the State of New York. Any judicial proceeding brought by or against any Borrower with
respect to this Amendment may be brought in any court of competent jurisdiction in the State of New York, United States of America,
and, by execution and delivery of this Amendment, each Borrower accepts for itself and in connection with its properties, generally
and unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Amendment. Each Borrower hereby waives any objection to jurisdiction and venue of any
action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.
Each Borrower hereby waives the right to remove any judicial proceeding brought against such Borrower in any state court to any
federal court. Any judicial proceeding by any Borrower against Agent or any Lender involving, directly or indirectly, any matter
or claim in any way arising out of, related to or connected with this Agreement or any related agreement, shall be brought only
in a federal or state court located in the County of New York, State of New York.


 




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5.10         Entirety.
This Amendment, the Term Loan and Security 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.]


 




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


 


	 	INTEGRATED DRILLING EQUIPMENT, LLC
	 	as Borrowing Agent and as a Borrower
	 	 	 
	 	By:	/s/ N. Michael Dion
	 	Name:	N. Michael Dion
	 	Title:	Chief Financial Officer
	 	 	 
	 	
        INTEGRATED DRILLING EQUIPMENT

        COMPANY HOLDINGS, LLC

	 	as a Borrower
	 	 	 
	 	By:	/s/ N. Michael Dion
	 	Name:	N. Michael Dion
	 	Title:	Chief Financial Officer
	 	 	 
	 	
        INTEGRATED DRILLING EQUIPMENT

        HOLDINGS CORP.

	 	as a Borrower
	 	 	 
	 	By:	/s/ N. Michael Dion
	 	Name:	N. Michael Dion
	 	Title:	Chief Financial Officer


 


[SIGNATURE PAGE TO SECOND AMENDMENT TO
TERM LOAN AND SECURITY AGREEMENT]


 




    	 



    	 



    

 


	 	ELM PARK CAPITAL MANAGEMENT, LLC
	 	as Agent
	 	 	 
	 	By:	/s/ Mark Schachter
	 	Name:	Mark Schachter
	 	Title:	Authorized Signatory


 


[SIGNATURE PAGE TO SECOND AMENDMENT TO
TERM LOAN AND SECURITY AGREEMENT]


 




    	 



    	 



    

 


	 	ELM PARK CREDIT OPPORTUNITIES FUND, L.P.
	 	as a Lender
	 	 	 
	 	By:	/s/ Mark Schachter
	 	Name:	Mark Schachter
	 	Title:	Authorized Signatory


 


[SIGNATURE PAGE TO SECOND AMENDMENT TO
TERM LOAN AND SECURITY AGREEMENT]


 




    	 



    	 



    

 


	 	ELM PARK CREDIT OPPORTUNITIES FUND
	 	(CANADA), L.P.
	 	as a Lender
	 	 	 
	 	By:	/s/ Charles Wimogred
	 	Name:	Charles Wimogred
	 	Title:	Senior Managing Partner


 


[SIGNATURE PAGE TO SECOND AMENDMENT TO
TERM LOAN AND SECURITY AGREEMENT]