Execution Version


 


	$408,169.00	Spring, Texas	April 7, 2014


 


FOR VALUE RECEIVED,
INTEGRATED DRILLING EQUIPMENT HOLDINGS CORP. (“Maker”), a Delaware corporation, promises to pay to STEPHEN D.
COPE (“Payee”), a resident of Harris County, Texas, at 7303 Augusta Pines Drive, Spring, Harris County, Texas
77389, or at such other place as Payee may hereafter designate in writing, in immediately available funds and in lawful money of
the United States of America, the principal sum $408,169.00.


 


1.          This
note shall be due and payable in bi-weekly installments of $7,849.40 each. The first installment shall be due and payable on April
7, 2014, and a like installment shall be due and payable on the same day of every second week thereafter until this note shall
have been fully paid and satisfied. Notwithstanding the foregoing, two years after the date hereof, all principal then unpaid shall
be finally due and payable. If, on the date any regularly scheduled bi-weekly installment is due, the outstanding principal balance
of this note does not exceed the amount of such installment, then all outstanding principal of this note shall be due and payable.


 


2.          This
Note shall be unsecured.


 


3.          Maker
may at any time pay the full amount or any part of this note without payment of any premium or fee. Any voluntary prepayment shall
be applied to principal installments in inverse order of maturity. The foregoing to the contrary notwithstanding, in no event shall
Maker make, and in no event shall Payee accept, any voluntary prepayment in respect of any of the indebtedness evidenced by this
note unless each Agent (as defined below) has provided its prior written consent thereto.


 


4.          Maker
shall be entitled to deduct from any payment hereunder the amount of any required withholding for Federal, state or local taxes
on any amount paid hereunder.


 


5.          Maker
agrees to furnish or cause to be furnished to Payee each of the following statements within the times indicated:


 


(i)          As
soon as available and in any event within 90 days after the end of each fiscal year of Maker, Maker’s consolidated annual
audited financial statements, including Maker’s fiscal year-end balance sheet and income statement and a statement of changes
in Maker’s financial position for such fiscal year, each setting forth in comparative form the corresponding figures as at
the end of Maker’s previous fiscal year, prepared in conformity with generally accepted accounting principles applied on
a basis consistent with that of the preceding fiscal year (“GAAP”) and accompanied by an unqualified opinion
of an independent certified public accountant stating that, in the opinion of such accountant, such financial statements present
fairly Maker’s financial position as of the date thereof and the results of Maker’s operations for the period covered
thereby, in conformity with GAAP; and


  




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(ii)         As
soon as available and in any event within 45 days after the end of each quarter of each fiscal year of Maker, Maker’s unaudited
consolidated financial statements, including Maker’s balance sheet as at the close of such quarter, Maker’s income
statement and a statement of changes in Maker’s financial position for such quarter and for the period from the beginning
of such fiscal year to the end of such quarter, each setting forth in comparative form the corresponding figures for the same quarter
of the preceding fiscal year and prepared in accordance with GAAP (other than the absence of footnotes and subject to normal year-end
adjustments), certified by the chief executive officer or chief financial officer of Maker as fairly presenting Maker’s financial
position as of the date hereof and results of Maker’s operations for the period covered thereby in conformity with GAAP (other
than the absence of footnotes and subject to normal year-end adjustments).


 


6.          Maker
agrees to provide Payee promptly with such other information relating to the financial condition and affairs of Maker and its subsidiaries,
including but not limited to Maker’s Liquidity, as Payee may reasonably request from time to time, subject to Payee providing
appropriate assurances regarding the usage of such confidential information to comply with applicable securities laws.


 


7.          If
any of the following occurs:


 


(a)          Maker
does not pay any principal as and when due; or


 


(b)          Maker
or any of its subsidiaries shall fail to pay when due


 


(1) any lease payment
due to (A) SDC Management, L.L.C.; (B) IDECO, LLC; (C) Ninth Green Management LLC; (D) Payee, or (E) any affiliate of Payee, or


 


(2) if the holder of
indebtedness for borrowed money of Maker with an outstanding principal balance in excess of $1,000,000 declares such obligation
due before the stated maturity thereof; or


 


(c)          Maker
or any of its subsidiaries shall be in material default under or in violation of any material law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or interpretation of any of the foregoing) of any country or any political subdivision
of any country, including any agency, department, commission, board, bureau or court or other tribunal having jurisdiction over
Maker, such subsidiary or its assets or property, and the same could have a material adverse effect on Maker and its subsidiaries,
taken as a whole; or


 


(d)          Any
representation or warranty made in connection with the execution and delivery of this note or any related papers shall prove to
have been incorrect, false or misleading when made; or


 


(e)          Default
shall occur in the punctual and complete performance by Maker of any covenant contained in this note; or


 


(f)          Final
judgment for the payment of money in excess of $1,000,000 shall be rendered against Maker and remain undischarged for a period
of 30 days during which execution is not effectively stayed; or


 




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(g)          Any
order shall be entered decreeing the dissolution, liquidation or split-up of Maker, and such order shall remain in effect for 30
days; or


 


(h)          Maker
or any of its subsidiaries shall make a general assignment for the benefit of creditors or shall petition or apply to any tribunal
for the appointment of a trustee, custodian, receiver or liquidator of all or any substantial part of its business, estate or assets
or shall commence any proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution
or liquidation law of any jurisdiction, whether now or hereafter in effect; or


 


(i)          Any
such petition or application shall be filed or any such proceeding shall be commenced against Maker or any of its subsidiaries,
and Maker or such subsidiary by any act or omission shall indicate approval thereof, consent thereto or acquiescence therein, or
an order shall be entered and remain in effect for more than 30 days appointing a trustee, custodian, receiver or liquidator of
all or any substantial part of its assets or granting relief to it or approving the petition in any such proceeding; or


 


(j)          Maker
or any of its subsidiaries shall fail generally to pay its debts as they become due, or suffer any writ of attachment or execution
or any similar process to be issued or levied against it or substantially all of its property which is not released, stayed, bonded
or vacated within 60 days after its issue or levy; or


 


(k)          The
dissolution, liquidation or termination of existence of Maker or any of its subsidiaries, or the sale, conveyance, lease or other
disposition of any substantial part of its assets; or


 


(l)          Maker
or any of its subsidiaries shall conceal, remove, or permit to be concealed or removed, any part of its property, with intent to
hinder, delay or defraud any of its creditors, or make or suffer a transfer of any of its property which may be fraudulent under
any bankruptcy, fraudulent conveyance or similar law; or shall make any transfer of its property to or for the benefit of a creditor
at a time when other creditors similarly situated have not been paid; or shall suffer or permit, while insolvent, any creditor
to obtain a lien upon any of its property through legal proceedings or distraint which is not vacated within 30 days from the date
thereof;


 


then default shall have occurred under
this note and Payee may at his option exercise any or all rights, powers and remedies afforded by law, including the right to declare
this entire note at once mature and due.


 


8.          If
Payee retains an attorney in connection with any such default or to collect, enforce or defend this note or any papers intended
to secure or guarantee it in any lawsuit or in any reorganization, bankruptcy or other proceeding, or if Maker sues Payee in connection
with this note or any such papers and does not prevail, then Maker agrees to pay to Payee, in addition to principal, all reasonable
costs and expenses incurred by Payee in trying to collect this note or in any such suit or proceeding, including reasonable attorneys’
fees. An amount equal to 10% of the unpaid principal owing on this note when and if this note is placed in the hands of an attorney
for collection after default is stipulated to be reasonable attorneys’ fees unless Payee or Maker timely pleads otherwise
to a court of competent jurisdiction.


 




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9.          
(a) The note and the indebtedness evidenced by this note are hereby expressly subordinated in right of payment, delivery and issuance
and in right of remedies and action to the prior performance and satisfaction and irrevocable and indefeasible payment in full
in cash of the Senior Debt (as defined below) and the termination of the commitments (if any) of the Senior Creditors (as defined
below) under the Senior Loan Documents (as defined below). 


 


(b) If there shall
occur any liquidation, receivership, insolvency, assignment for the benefit of creditors, bankruptcy (voluntary or involuntary),
reorganization, arrangement with, creditors (whether or not pursuant to bankruptcy or other insolvency laws), sale of all or substantially
all the assets of, or the, dissolution, liquidation or any other marshaling of the assets and liabilities of, Company (each, an
“Insolvency Event”) (i) the Senior Creditors shall be entitled to receive indefeasible and irrevocable payment in full
in cash and full performance and satisfaction of all Senior Debt then outstanding before Payee shall be entitled to receive any
payment or distribution, whether in cash, securities or other property, in respect of any amounts due with respect to this note
or the indebtedness evidenced hereby, and (ii) any payment or distribution, whether in cash, securities or other property payable
or deliverable in respect of the amounts due under or with respect to this note or the indebtedness evidenced hereby shall be paid
or delivered, to the extent of the unpaid balance of the Senior Debt, for application to the payment thereof, directly to the Senior
Creditors, In the event of any proceedings in connection with an Insolvency Event, the Senior Creditors shall be entitled to rely
upon the provisions of Section 9 of this note, which the parties acknowledge is enforceable as a subordination agreement
in accordance with its terms upon the occurrence of any Insolvency Event, and shall have the right to prove, in addition to its
claims on account of the Senior Debt, its claims hereunder in any such proceeding, so as to establish its rights hereunder and
to receive directly from any receiver, trustee or other court officer or custodian distributions of any sort which would otherwise
be payable on account of the Senior Debt or the collateral securing the Senior Debt.


 


(c) If Maker shall
make any payment, delivery or issuance with respect to this note or the indebtedness evidenced hereby in violation of the provisions
of Section 9 of this note, or Payee shall receive or collect any such payment, delivery or issuance or shall take any Enforcement
Action (as defined below), then such payment, delivery or issuance shall be deemed to be the property of, segregated, received
and held in trust for the benefit of the Senior Creditors, and shall be immediately paid over and delivered forthwith to the Senior
Creditors.


 


(d) Each of Payee and
Maker agree not to modify, change, terminate, restate, supplement or amend orally or by any course of dealing or in any other manner
this note or to modify the method for calculating amounts due under any of this note without first obtaining the prior written
consent of each of the Senior Creditors. Until full performance and indefeasible and irrevocable payment in full in cash of the
Senior Debt and the termination of the commitments (if any) of the Senior Creditors under the Senior Loan Documents, Payee shall
not seek to obtain, and shall not take, accept, obtain or have, any lien or security interest in any asset or property, as security
for this note and the indebtedness evidenced hereby, and, if and to the extent that any such lien or security interest at any time
exists in favor of Payee, such liens and security interests hereby are subordinated to all liens, security interests, restrictions,
encumbrances, charges, interests and other arrangements, now or hereafter existing, for the benefit of or in favor of the Senior
Creditors.


 




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(e) Maker shall notify
Payee and each of the Senior Creditors—and Payee shall notify each of the Agents which has been identified to Payee, complete
with contact information, if Payee has knowledge of such default or breach if Maker has not given notice thereof to such Agents—in
writing promptly of any default or breach by Maker under this note, provided, that any failure to deliver any such notices shall
not otherwise affect the subordination provisions or other obligations, agreements or covenants of Maker or Payee herein.


 


(f) Payee shall not
sell, lease, transfer, pledge, encumber, restrict, assign or otherwise dispose of this note or any interest therein to any person
or entity unless such transferee agrees in writing, in form and substance satisfactory to each Agent in its discretion, to be bound
by the terms of this note with respect to such payments, deliveries and issuances and amounts owing to it by Maker.


 


(g) Payee agrees that
it will not (and hereby waive any right to), directly or indirectly, contest or support any other person or entity in contesting,
in any proceeding (including in connection with an Insolvency Event), (i) the validity, priority, enforceability or allowance of
any claims of any of the Senior Creditors, (ii) the priority, validity, or enforceability of a lien held by or on behalf of any
of the Senior Creditors, or (iii) the validity or enforceability of the provisions of this Senior Loan Documents or the provisions
of this Section 9.


 


(h) Each of the Agents,
on behalf of the Senior Creditors for which it is an agent, is an express third party beneficiary of the provisions of this Section
9 and shall be entitled to enforce the provisions of Section 9.


 


(i) For the purposes
of this Section 9, the following terms shall have the following meanings:


 


“Agents”
shall mean the First Lien Agent and the Term Loan Agent. Payee shall be entitled to rely on Maker’s representation as to
the identities of the Agents.


 


“Enforcement Action”
shall mean any action, whether legal, equitable, judicial, non-judicial or otherwise, to collect or receive any amounts under this
note or the indebtedness evidenced hereby, or any acceleration of this note or the indebtedness evidenced hereby or the exercise
or enforcement of any other right, power or remedy with respect hereof or thereof. 


 


“First Lien
Agent” means the “First Lien Agent”, as such term is defined in the Term Loan Agreement.


 


“First Lien
Lenders” means the “First Lien Lenders” as such term is defined in the Term Loan Agreement.


 




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“First Lien
Loan Agreement” means the “First Lien Loan Agreement” as such term is defined in the Term Loan Agreement.


 


“First Lien
Loan Documents” means the First Lien Loan Agreement and the other “First Lien Loan Documents” as such term
is defined in the Term Loan Agreement.


 


“First Lien
Obligations” means the “First Lien Indebtedness” as such term is defined in the Term Loan Agreement.


 


“Senior Creditors”
means (a) First Lien Agent and the First Lien Lenders, and (b) Term Loan Agent and the Term Loan Lenders. Payee shall be entitled
to rely on Maker’s representations as to the identities of the Senior Creditors.


 


“Senior Debt”
means (a) the First Lien Obligations and (b) the Term Loan Obligations.


 


“Senior Loan
Documents” means (a) the First Lien Loan Documents and (b) the Term Loan Documents.


 


“Term Loan
Agent” means the “Agent”, as such term is defined in the Term Loan Agreement.


 


“Term Loan
Agreement” means 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, by and among Maker, certain of its subsidiaries, Term Loan
Agent and the Term Loan Lenders.


 


“Term Loan
Documents” means the Term Loan Agreement and the “Other Documents” as such term is defined in the Term Loan
Agreement.


 


“Term Loan
Lenders” means the “Lenders” as such term is defined in the Term Loan Agreement.


 


“Term Loan
Obligations” means the “Obligations” as such term is defined in the Term Loan Agreement.


 


10.         Maker
waives notice (including, but not limited to, notice of intent to accelerate and notice of acceleration, notice of protest and
notice of dishonor), demand, presentment for payment and protest.


 


11.         This
Note is non-negotiable, and may not be sold, assigned or transferred in any way, in whole or in part, by Payee. 


 




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	 	 	INTEGRATED DRILLING EQUIPMENT HOLDINGS CORP.
	 	 	 
	 	 	By:	/s/ Michael Dion
	 	 	Name:	N. Michael Dion
	 	 	Title:	CFO


 


	ATTEST:	 	 
	 	 	 
	/s/ Richard D. Dodson	 	 
	Name:	Richard D. Dodson	 	 
	Title:	President	 	 
	 	 	 
	(CORPORATE SEAL)	 	 


  


Signature Page to Second Note