ICDI Independence Contract Drilling Inc (QX)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 13, 2024

Independence Contract Drilling, Inc.

(Exact name of registrant as specified in its charter)

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20475 State Highway 249, Suite 300

Houston, TX 77070

(Address of principal executive offices)

(281) 598-1230

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

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Item 1.01 Entry into a Material Definitive Agreement

On September 13, 2024, Independence Contract Drilling, Inc. (the “Company”) entered into a Limited Waiver Agreement dated September 13, 2024 (the “Waiver Agreement”), by and among the Company, the Guarantor party thereto, U.S. Bank Trust Company National Association, as trustee (the “Trustee”) and collateral agent, and the Holders signatory thereto (collectively, the “Holders”), relating to certain limited waivers (i) under the Indenture, dated March 18, 2022 (as amended by the First Supplemental Indenture, dated July 21, 2022, Second Supplemental Indenture dated February 24, 2023, and the Third Supplemental Indentures dated February 27, 2024, the “Indenture”) relating to the Company’s Floating Rate Convertible Senior Secured PIK Toggle Notes due 2026 (the “Convertible Notes”) and (ii) of certain requirements contained in the Investor Rights Agreement dated March 18, 2022 between the Company and MSD Partners, L.P. and the Investor Rights Agreement dated March 18, 2022 between the Company and Glendon Capital Management, L.P. (together, the “Investor Rights Agreements”).

Pursuant to the terms of the Waiver Agreement:

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The foregoing summary of the Waiver Agreement is subject to the terms of the Waiver Agreement, which is fully incorporated herein by reference and is filed as Exhibit 10.1 to this Form 8-K.

Item 9.01 Financial Statements and Exhibits

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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LIMITED WAIVER AGREEMENT

This LIMITED WAIVER AGREEMENT (this “Agreement”) is entered into as of September 13, 2024, by and among Independence Contract Drilling, Inc., as issuer (the “Company”), the Guarantor party hereto (together with the Company, the “Note Parties”), the Holders signatory hereto, and U.S. Bank Trust Company, National Association, as trustee (in such capacity, the “Trustee”) and as collateral agent (in such capacity, the “Collateral Agent”).      

RECITALS

NOW, THEREFORE, in consideration of the foregoing, the terms, covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Each Note Party acknowledges and agrees that as of September 13, 2024, the aggregate principal balance of the outstanding Obligations under the Indenture is $185,523,282.66, and that the respective principal balances of the Notes to each Holder as of such date are set forth on Exhibit B.  The foregoing amounts do not include accrued and unpaid interest, fees, expenses and other amounts that are chargeable or otherwise reimbursable under the Indenture and the other Note Documents.  As of the date of this Agreement, none of the Company or the other Note Parties have any rights of offset, defenses, claims or counterclaims with respect to any of the Obligations.

Each Note Party acknowledges and agrees that (i) the Specified Default constitutes a Registration Default that is expected to occur during the Waiver Period and (ii) the Specified Default will not be cured during the Waiver Period.  Prior to the effectiveness of this Agreement, the Specified Default would obligate the Company to pay the Liquidated Damages and/or Additional Interest as set forth in, and pursuant to, the Registration Rights Annex.

Each Note Party acknowledges and agrees that, upon the occurrence of the Specified Default, the Holders are entitled to the Liquidated Damages and/or Additional Interest, and that, in the event of the expiration or termination of the Waiver Period, the Liquidated Damages and Additional Interest shall be deemed, retroactively, to be due and owing as of the date of the occurrence of the Specified Default.

The parties hereto hereby agree to comply with the following terms, conditions and covenants during the Waiver Period, in each case notwithstanding any provision to the contrary set forth in this Agreement, the Indenture, or any other Note Document:

SECTION 1542.  GENERAL RELEASE. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

The parties each hereby knowingly and voluntarily waive and relinquish the provisions, rights, and benefits of Section 1542 and all similar federal or state laws, rights, rules, or legal principles of any other jurisdiction that may be applicable herein, and any rights they may have to invoke the provisions of any such law now or in the future with respect to the Claims being released pursuant hereto, and the parties hereby agree and acknowledge that this is an essential term of the releases set forth herein.  In connection with such releases, the parties acknowledge that they are aware that they or their attorneys or others may hereafter discover Claims or facts presently unknown or unsuspected in addition to or different from those which they now know or believe to be true with respect to the subject matter of the Claims being released pursuant hereto.  Nevertheless, it is the intention of the parties in executing this Agreement to fully, finally, and forever settle and release all matters and all claims relating thereto, which exist, hereafter may exist or might have existed (whether or not previously or currently asserted in any action) constituting Released Claims released pursuant to this Agreement.

To induce the Trustee and the other Noteholder Parties to execute and deliver this Agreement, each of the Company and other Note Parties represents, warrants and covenants that:

The Company and the other Note Parties, as debtors, grantors, pledgors, guarantors, assignors, or in other similar capacities in which such parties grant liens or security interests in their properties or otherwise act as accommodation parties or guarantors, as the case may be, under the Note Documents, hereby ratify and reaffirm all of their payment and performance obligations and obligations to indemnify, contingent or otherwise, under each of such Note Documents to which it is a party, and ratify and reaffirm their grants of liens on or security interests in their properties pursuant to such Note Documents to which they are a party, respectively, as security for the Obligations under or with respect to the Indenture, and confirms and agrees that such liens and

security interests hereafter secure all of the Obligations, including, without limitation, all additional Obligations hereafter arising or incurred pursuant to or in connection with this Agreement, the Indenture or any other Note Document.  The Company and the other Note Parties further agree and reaffirm that the Note Documents to which they are parties now apply to all Obligations as defined in the Indenture, (including, without limitation, all additional Obligations hereafter arising or incurred pursuant to or in connection with this Agreement, the Indenture or any other Note Document).  Each such party (i) further acknowledges receipt of a copy of this Agreement and all other agreements, documents, and instruments executed and/or delivered in connection herewith, (ii) consents to the terms and conditions of same, and (iii) agrees and acknowledges that each of the Note Documents remains in full force and effect and is hereby ratified and confirmed.  Except as expressly provided herein, the execution of this Agreement shall not operate as a waiver of any right, power or remedy of any Noteholder Party, nor constitute a waiver of any provision of any of the Note Documents nor constitute a novation of any of the Obligations under the Indenture or other Note Documents.

In addition to (to the extent not otherwise provided in the Indenture), and not in lieu of, the terms of the Indenture and other Note Documents relating to the reimbursement of Noteholder Party fees and expenses, the Company shall reimburse the Trustee, the Collateral Agent, and the Holders, as the case may be, promptly on demand for all fees, costs, charges and expenses, including the fees, costs and expenses of counsel and other expenses, incurred in connection with this Agreement and the other agreements and documents executed and/or delivered in connection herewith.

THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN ALL MATTERS ARISING OUT OF, IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ITS VALIDITY, INTERPRETATION, CONSTRUCTION, PERFORMANCE AND ENFORCEMENT (INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT OR TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF AND ANY DETERMINATIONS WITH RESPECT TO POST-JUDGMENT INTEREST).  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY AND EACH OTHER NOTE PARTY HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL LIMIT THE RIGHT OF AGENT TO COMMENCE ANY PROCEEDING IN THE FEDERAL OR STATE COURTS OF ANY OTHER JURISDICTION TO THE EXTENT THE TRUSTEE DETERMINES THAT SUCH ACTION IS NECESSARY OR APPROPRIATE TO EXERCISE ITS RIGHTS OR REMEDIES UNDER THE NOTE DOCUMENTS.  THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTIONS.  EACH NOTE PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND OTHER DOCUMENTS AND OTHER SERVICE OF PROCESS OF ANY KIND AND CONSENTS TO SUCH SERVICE IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE UNITED STATES OF AMERICA WITH RESPECT TO OR OTHERWISE ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BY ANY MEANS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, INCLUDING BY THE MAILING THEREOF (BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID)

TO THE ADDRESS OF THE COMPANY SPECIFIED IN THE INDENTURE (AND SHALL BE EFFECTIVE WHEN SUCH MAILING SHALL BE EFFECTIVE, AS PROVIDED THEREIN).  EACH NOTE PARTY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING CONTAINED IN THIS SECTION 11 SHALL AFFECT THE RIGHT OF THE TRUSTEE, THE COLLATERAL AGENT, OR ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW OR COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY NOTE PARTY IN ANY OTHER JURISDICTION.

This Agreement and all other agreements and documents executed and/or delivered in connection herewith have been prepared through the joint efforts of all of the parties hereto.  Neither the provisions of this Agreement or any such other agreements and documents nor any alleged ambiguity therein shall be interpreted or resolved against any party on the ground that such party or its counsel drafted this Agreement or such other agreements and documents, or based on any other rule of strict construction.  Each of the parties hereto represents and declares that such party has carefully read this Agreement and all other agreements and documents executed in connection therewith, and that such party knows the contents thereof and signs the same freely and voluntarily.  The parties hereto acknowledge that they have been represented by legal counsel of their own choosing in negotiations for and preparation of this Agreement and all other agreements and documents executed in connection herewith and that each of them has read the same and had their contents fully explained by such counsel and is fully aware of their contents and legal effect.  If any matter is left to the decision, right, requirement, request, determination, judgment, opinion, approval, consent, waiver, satisfaction, acceptance, agreement, option or discretion of one or more Noteholder Parties or their respective employees, counsel, or agents in the Indenture or any other Note Documents, such action shall be deemed to be exercisable by such Noteholder Parties or such other Person in its sole and absolute discretion and according to standards established in its sole and absolute discretion.  Without limiting the generality of the foregoing, “option” and “discretion” shall be implied by the use of the words “if” and “may.”

This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed an original, but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart.  Any party hereto may execute and deliver a counterpart of this Agreement by delivering by facsimile or other electronic transmission a signature page of this Agreement signed by such party, and any such facsimile or other electronic signature shall be treated in all respects as having the same effect as an original signature.  Any party delivering by facsimile or other electronic transmission a counterpart executed by it shall promptly thereafter also deliver a manually signed counterpart of this Agreement; provided that the failure to deliver such manually signed counterpart shall not affect the validity or effectiveness of this Agreement.

The invalidity, illegality, or unenforceability of any provision in or obligation under this Agreement in any jurisdiction shall not affect or impair the validity, legality, or enforceability of the remaining provisions or obligations under this Agreement or of such provision or obligation in any other jurisdiction.  If feasible, any such offending provision shall be deemed modified to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable.

Time is of the essence in the performance of each of the obligations of the Company and the other Note Parties hereunder and with respect to all conditions to be satisfied by such parties.

The Noteholder Parties’ obligations to waive the Specified Default hereunder are expressly conditioned upon all other creditors of the Company and the other Note Parties (including, without limitation, trade creditors and subordinated secured and unsecured creditors) refraining from taking any action whatsoever against the Company, any other Note Party, the Collateral (including, without limitation, acceleration of indebtedness) during the Waiver Period.  In the event that any such creditor takes any such action, all of the Noteholder Parties’ obligations hereunder shall automatically and immediately terminate without further notice or demand.

The Company and each other Note Party agrees to take all further actions and execute all further documents as the Trustee or the Collateral Agent (at the direction of the Holders) may from time to time reasonably request to carry out the transactions contemplated by this Agreement and all other agreements executed and delivered in connection herewith.

Section headings in this Agreement are included herein for convenience of reference only and shall not constitute part of this Agreement for any other purpose.

All notices, requests, and demands to or upon the respective parties hereto shall be given in accordance with the Indenture.  

This Agreement shall become effective at the time (the “Waiver Effective Date”) that all of the following conditions precedent have been met (or waived) as determined by the Trustee and the Holders in their sole discretion:

This Agreement shall be binding upon and inure to the benefit of the Company, the other Note Parties, the Noteholder Parties and their respective successors and assigns; provided, that neither the Company nor any other Note Party shall be entitled to delegate any of its duties hereunder or to assign any of its rights or remedies set forth in this Agreement without the prior written consent of the Trustee in its sole discretion (at the direction of all of the Holders).  No Person other than the parties hereto, and in the case of Section 4 hereof, the Releasees, shall have any rights hereunder or be entitled to rely on this Agreement and all third-party beneficiary rights (other than the rights of the Releasees under Section 4 hereof) are hereby expressly disclaimed.

This Agreement, the Indenture, the other Note Documents, and the other written agreements, instruments, and documents entered into in connection therewith (collectively, the “Company/Holder Documents”) set forth in full the terms of agreement between the parties hereto and thereto with respect to the subject matter thereof and are intended as the full, complete, and exclusive contracts governing the relationship between such parties with respect to the subject matter thereof, superseding all other discussions, promises, representations, warranties, agreements, and understandings between the parties with respect thereto.  Except as provided therein, no term of the Company/Holder Documents may be modified or amended, nor may any rights thereunder be waived, except in a writing signed by the party against whom enforcement of the modification, amendment, or waiver is sought.  Any waiver of any condition in, or breach of, any of the foregoing in a particular instance shall not operate as a waiver of other or subsequent conditions or breaches of the same or a different kind.  The Trustee’s, the Collateral Agent’s, or

any Holder’s exercise or failure to exercise any rights or remedies under any of the foregoing in a particular instance shall not operate as a waiver of its right to exercise the same or different rights and remedies in any other instances.  There are no oral agreements among the parties hereto.

U.S. Bank Trust Company, National Association is entering into this Agreement solely in its capacities as Trustee and Collateral Agent and not in its individual or corporate capacity.  In acting hereunder, the Trustee and the Collateral Agent shall be entitled to all rights, privileges and immunities of the Trustee and the Collateral Agent set forth in the Note Documents as though fully set forth herein.  No duties or obligations are intended or be or are to be implied or imposed on the Trustee or the Collateral Agent and the Trustee and Collateral Agent shall have no duty to monitor or confirm compliance hereunder by the Holders or the Note Parties.  The Trustee and Collateral Agent have made no representation as to, and have no responsibility for, the validity or enforceability of the terms and representations contained herein.  The Trustee and Collateral Agent shall have no obligation to monitor the terms of the Fee Letter or the Investor Rights Agreements.

[Signature pages to follow]

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IN WITNESS WHEREOF, this Limited Waiver Agreement has been executed by the parties hereto as of the date first written above.

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EXHIBIT A (Specified Default)

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EXHIBIT B

Principal Balances of Holders as of September 13, 2024

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