Form 8-K BASIC ENERGY SERVICES For: Sep 15
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E-mailUNITED 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, 2016
Basic Energy Services, Inc.
(Exact name of registrant as specified in its charter)
Delaware | 1-32693 | 54-2091194 | |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |
801 Cherry Street, Suite 2100 | |||
Fort Worth, Texas | 76102 | ||
(Address of principal executive offices) | (Zip Code) | ||
Registrant’s telephone number, including area code: (817) 334-4100
Not Applicable
(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:
[ ] 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))
Item 1.01 Entry into a Material Definitive Agreement.
As previously reported, (i) on August 31, 2016, Basic Energy Services, Inc. (“Basic” or the “Company”) and certain of its subsidiaries entered into the Temporary Limited Waiver and Consent (the “First Limited Waiver”) to the Term Loan Credit Agreement dated as of February 17, 2016 (the “Term Loan Agreement”), by and among Basic, as borrower, the lenders party thereto (the “Term Loan Lenders”) and U.S. Bank National Association, as administrative agent for the Term Loan Lenders (the “Term Loan Administrative Agent”) and (ii) on September 1, 2016, Basic and certain of its subsidiaries entered into the Temporary Limited Waiver and Consent (the “Second Limited Waiver”) to the Term Loan Agreement. Pursuant to the First Limited Waiver, the Term Loan Lenders temporarily waived the event of default under the Term Loan Agreement requiring Basic to cause not less than 95% of the term loan priority collateral to become subject to a perfected, first priority lien in favor of the Term Loan Administrative Agent for the benefit of the secured parties to the Term Loan Agreement on or prior to August 31, 2016 (the “Collateral Coverage Event of Default”). Pursuant to the Second Limited Waiver, the Term Loan Lenders temporarily waived the event of default under the Term Loan Agreement requiring Basic and its consolidated subsidiaries to maintain unrestricted cash balances and cash equivalents of not less than $50,000,000 as of any date (the “Liquidity Event of Default”).
Term Loan Credit Agreement Temporary Limited Waiver
On September 13, 2016, Basic and certain of its subsidiaries entered into the Temporary Limited Waiver and Consent (the “Third Limited Waiver”) to the Term Loan Agreement. Pursuant to the Third Limited Waiver, among other provisions, the Term Loan Lenders (i) extended the temporary waiver of the Collateral Coverage Event of Default and the Liquidity Event of Default, (ii) temporarily waived the event of default (the “Anticipated Event of Default”) pursuant to Section 8.01(e) of the Term Loan Agreement that would otherwise occur on September 14, 2016 at the expiration of the Company’s grace period with respect to the Company’s failure to make an interest payment (the “2019 Notes Interest Payment”) on August 15, 2016 under Basic’s 7.75% Senior Notes due 2019 (the “2019 Notes”) and (iii) consented to Basic’s execution and delivery of the Control Agreement (as defined below) and the depositing of the Pledged Cash (as defined below) with Bank of America, N.A. to secure the Credit Card Program and acknowledge that such actions shall not constitute a default or event of default under the Term Loan Agreement or any related loan document.
The Third Limited Waiver becomes effective beginning on the date that certain conditions defined therein have been satisfied and ending on the earliest to occur of (i) the occurrence or existence of any event of default under the Term Loan Agreement, other than the Collateral Coverage Event of Default, the Liquidity Event of Default and the Anticipated Event of Default, (ii) notice from the Term Loan Administrative Agent or the Required Lenders (as defined in the Third Limited Waiver) of the occurrence or existence of any Temporary Limited Waiver Default (as defined in the Third Limited Waiver), (iii) the later of September 28, 2016 or such later date as the Required Lenders and Basic may agree in their respective sole discretion or (iv) as of any date the unrestricted cash balances and cash equivalents of Basic and its consolidated subsidiaries is less than $33,500,000.
In consideration for the Term Loan Lenders agreeing to the temporary limited waivers and consent set forth in the Third Limited Waiver, Basic will pay the interest on the principal amount of all outstanding obligations under the Term Loan Agreement at a fluctuating rate per annum equal to the default rate under the Term Loan Agreement, so long as the Collateral Coverage Event of Default, the Liquidity Event of Default, the Anticipated Event of Default or any other event of default is continuing. In addition, so long as the Collateral Coverage Event of Default, the Liquidity Event of Default, the Anticipated Event of Default or any other event of default is continuing, (i) Basic is not permitted to take any action under any loan document that is conditioned upon there being no default or event of default existing at the time of such action and (ii) neither the Term Loan Administrative Agent nor any Term Loan Lender is required to facilitate or otherwise permit any action under any loan document that is conditioned upon there being no default or event of default existing at the time of such action.
A copy of the Third Limited Waiver is filed as Exhibit 10.1 hereto and is incorporated herein by reference. The above description of the Third Limited Waiver is qualified in its entirety by the full text of such exhibit.
ABL Credit Agreement Temporary Limited Waiver
On September 14, 2016, Basic and certain of its subsidiaries entered into the Temporary Limited Waiver (the “ABL Limited Waiver”) to the Amended and Restated Credit Agreement dated as of November 26, 2014 (as subsequently amended,
the “ABL Agreement”), by and among Basic, as borrower, the lenders party thereto (the “ABL Lenders”) and Bank of America, N.A., as administrative agent for the ABL Lenders (the “ABL Administrative Agent”), swing line lender and l/c issuer.
Pursuant to the ABL Limited Waiver, among other provisions, the ABL Lenders temporarily waived the Anticipated Event of Default. The ABL Limited Waiver becomes effective beginning on the date that certain conditions defined therein have been satisfied and ending on the earliest to occur of (i) the occurrence or existence of any event of default under the ABL Agreement, other than the Anticipated Event of Default, (ii) notice from the ABL Administrative Agent or the Required Lenders (as defined in the ABL Limited Waiver) of the occurrence or existence of any Temporary Limited Waiver Default (as defined in the ABL Limited Waiver) or (iii) the later of September 28, 2016 or such later date as the Required Lenders and Basic may agree in their respective sole discretion.
In consideration for the ABL Lenders agreeing to the temporary limited waivers set forth in the ABL Limited Waiver, Basic will pay letter of credit fees at a fluctuating rate per annum equal to the default rate under the ABL Agreement, so long as the Anticipated Event of Default or any other event of default is continuing. In addition, so long as the Anticipated Event of Default or any other event of default is continuing, (i) Basic is not permitted to take any action under any loan document that is conditioned upon there being no default or event of default existing at the time of such action and (ii) neither the ABL Administrative Agent nor any ABL Lender is required to facilitate or otherwise permit any action under any loan document that is conditioned upon there being no default or event of default existing at the time of such action.
Also under the ABL Limited Waiver, pursuant to the Treasury Management Services Security and Control Agreement (the “Control Agreement”) between Basic and Bank of America, N.A., so long as not less than $2,000,000 (the “Pledged Cash”) is maintained as security for the program created in part under the Commercial Prepaid Card Purchase Agreement between Basic and Bank of America, N.A. dated on or around March 14, 2006 (the “Credit Card Program”), (i) the Lenders agree that certain restrictions or penalties will not be imposed thereunder; and (ii) the Credit Card Program will not be terminated as a result of the institution of a proceeding under any debtor relief law, other than under certain limited circumstances.
A copy of the ABL Limited Waiver is filed as Exhibit 10.2 hereto and is incorporated herein by reference. The above description of the ABL Limited Waiver is qualified in its entirety by the full text of such exhibit.
2019 Senior Notes Forbearance
On September 14, 2016, Basic entered into the Forbearance (the “Forbearance”) among Basic, certain guarantors party thereto, and certain beneficial owners and/or investment advisors or managers of discretionary accounts for the holders or beneficial owners (the “Holders”) of 81% of the aggregate principal amount of the 2019 Notes. The 2019 Notes were issued pursuant to the Indenture, dated as of February 15, 2011 (as subsequently amended, modified or supplemented, the “Indenture”), among Basic, the guarantors party thereto and Wilmington Trust, N.A., as successor trustee (the “Trustee”).
Pursuant to the Forbearance, among other provisions, each Holder agrees that during the “Forbearance Period,” subject to certain conditions precedent and continuing conditions, it will not enforce, or otherwise take any action to direct enforcement of, any of the rights and remedies available to the Holders or the Trustee under the Indenture or the 2019 Notes or otherwise, including, without limitation, any action to accelerate, or join in any request for acceleration of, the 2019 Notes under the Indenture or the 2019 Notes, solely with respect to the 2019 Notes Interest Payment. As defined in the Forbearance, the “Forbearance Period” begins on September 14, 2016 and ends on the earliest to occur of (i) 11:59 p.m. (New York City time) on September 28, 2016, (ii) the occurrence of any event of default under the Indenture, other than the Anticipated Event of Default and (iii) five calendar days following Basic’s receipt of bona fide notice from any Holder of any breach of the conditions or agreements set forth in the Forbearance. Also pursuant to the Forbearance, each Holder agrees that, during the Forbearance Period, it will not sell, pledge, hypothecate or otherwise transfer any 2019 Notes, except under limited circumstances.
A copy of the Forbearance is filed as Exhibit 10.3 hereto and is incorporated herein by reference. The above description of the Forbearance is qualified in its entirety by the full text of such exhibit.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The descriptions of the Third Limited Waiver, the ABL Limited Waiver and the Forbearance set forth above in Item 1.01 are incorporated by reference into this Item 2.03.
Item 3.03 Material Modification to Rights of Security Holders.
The description of the Forbearance set forth above in Item 1.01 is incorporated by reference into this Item 3.03.
Item 7.01 Regulation FD Disclosure.
On September 14, 2016, Basic issued a press release announcing entry into the Third Limited Waiver, the ABL Limited Waiver and the Forbearance, as described above in Item 1.01. A copy of the press release is being furnished as Exhibit 99.1 hereto and is incorporated into this Item 7.01 by reference.
The information furnished pursuant to Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing of Basic’s under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.
Forward-Looking Statements
This Current Report on Form 8-K contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things, the risk factors discussed in this Current Report and in our most recent Annual Report on Form 10-K and other factors, most of which are beyond our control. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “expect,” “indicate” and similar expressions are intended to identify forward-looking statements. All statements other than statements of current or historical fact contained in this Current Report are forward-looking statements. Although we believe that the forward-looking statements contained in this Current Report are based upon reasonable assumptions, the forward-looking events and circumstances discussed in this Current Report may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits | |
10.1 | Temporary Limited Waiver dated as of September 13, 2016, among Basic, the guarantors party thereto, the Term Loan Lenders and U.S. Bank National Association. | |
10.2 | Temporary Limited Waiver dated as of September 14, 2016, among Basic, the guarantors party thereto, the ABL Lenders and Bank of America, N.A. | |
10.3 | Forbearance dated as of September 14, 2016, among Basic, the guarantors party thereto and the Holders. | |
99.1 | Press Release dated September 14, 2016. | |
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.
Basic Energy Services, Inc. | ||||
Date: September 15, 2016 | By: | /s/ Alan Krenek | ||
Alan Krenek | ||||
Senior Vice President, Chief Financial Officer, | ||||
Treasurer and Secretary | ||||
EXHIBIT INDEX
(d) | Exhibits | |
10.1 | Temporary Limited Waiver dated as of September 13, 2016, among Basic, the guarantors party thereto, the Term Loan Lenders and U.S. Bank National Association. | |
10.2 | Temporary Limited Waiver dated as of September 14, 2016, among Basic, the guarantors party thereto, the ABL Lenders and Bank of America, N.A. | |
10.3 | Forbearance dated as of September 14, 2016, among Basic, the guarantors party thereto and the Holders. | |
99.1 | Press Release dated September 14, 2016. | |
Exhibit 10.1
TEMPORARY LIMITED WAIVER AND CONSENT
This TEMPORARY LIMITED WAIVER AND CONSENT (this “Agreement”) is
entered into as of September 13, 2016, by and among Basic Energy Services, Inc., as Borrower,
the guarantors party hereto (together with Borrower, the “Loan Parties”), the financial
institutions party hereto as Lenders under the Credit Agreement (as hereinafter defined), and U.S.
Bank National Association, as Administrative Agent for the Lenders (in such capacity, “Agent”
and collectively with the Lenders, the “Lender Parties”).
RECITALS
A. Borrower, the other Loan Parties, Agent and the Lenders (including the
Lenders party hereto) are parties to that certain Credit Agreement, dated as of February 17, 2016
(as has been amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), pursuant to which, among other things, the Lenders agreed, upon the terms
and subject to the conditions set forth in the Credit Agreement, to make certain loans to
Borrower.
B. Borrower, the other Loan Parties, the Agent and the Lenders party hereto
entered into (i) the Temporary Limited Waiver and Consent on August 31, 2016 (the “Collateral
Coverage Waiver”) pursuant to which, among other things, such Lenders and the Agent waived,
on the terms and subject to the conditions set forth in the Collateral Coverage Waiver, the
Borrower’s failure to cause not less than 95% of the Term Loan Priority Collateral (measured
exclusive of any proceeds of the Loans held in the Escrow Account) to become subject to a
perfected, first priority Lien in favor of the Agent for the benefit of the Secured Parties (prior to
all other Liens other than Liens permitted pursuant to Section 7.01 of the Credit Agreement) on
or prior to August 31, 2016 (the “Collateral Coverage Default”) and (ii) the Temporary Limited
Waiver and Consent on September 1, 2016 (the “Liquidity Waiver” and, together with the
Collateral Coverage Waiver, the “Existing Waivers”) pursuant to which, among other things,
such Lenders and the Agent waived, on the terms and subject to the conditions set forth in the
Liquidity Waiver, any failure of the Borrower and its consolidated Subsidiaries to maintain
unrestricted cash balances and Cash Equivalents of at least $50,000,000 (the “Liquidity Event of
Default” and, together with the Collateral Coverage Event of Default, the “Waived Events of
Default”).
C. Borrower previously disclosed to the Agent and the Lenders that it has failed
to make the interest payment that was due and payable on August 15, 2016 with respect to the
Borrower’s 2019 Senior Notes, such 2019 Senior Notes having an aggregate principal amount of
more than $15,000,000 (the “Missed Interest Payment”).
D. The Missed Interest Payment will become an “Event of Default” (as defined
in the 2019 Senior Note Documents) on September 14, 2016, which will result in an Event of
Default pursuant to Section 8.01(e) of the Credit Agreement (the “Anticipated Event of Default”
and together with the Waived Events of Default, the “Specified Events of Default”).
E. Borrower has requested that Agent and the Lender Parties (i) temporarily
extend the temporary waiver of the Waived Events of Default provided for in the Liquidity
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Waiver and Collateral Coverage Waiver and (ii) temporarily waive during the Temporary
Limited Waiver Period (as defined below) the Anticipated Event of Default.
F. Borrower has, on or prior to the date hereof, entered into a Treasury
Management Services Security and Control Agreement (the “Control Agreement”) by and
among Borrower, Bank of America, N.A., as secured party, and Bank of America, N.A., as
depository, pursuant to which Borrower has deposited $2,000,000 (the “Pledged Cash”) into the
account specified therein as security exclusively for the obligations under that certain Bank of
America Corporate Purchasing Card Agreement, between Bank of America, N.A. and Basic
Energy Services L.P., dated on or around July 21, 2005 and that certain Commercial Prepaid
Card Purchase Agreement between Bank of America, N.A., and the Borrower dated on or around
March 14, 2006 (each as amended, supplemented or modified from time to time, collectively, the
“Credit Card Program”).
G. Upon the terms and subject to the conditions set forth in this Agreement,
the Lenders party hereto, which constitute Required Lenders as of the Effective Date (as defined
below) have agreed, except as expressly set forth herein, to (i) temporarily extend the temporary
waiver of the Waived Events of Default, (ii) temporarily waive the Anticipated Event of Default,
in each case, during the Temporary Limited Waiver Period (as defined below) and (iii) consent
to the Borrower’s execution and delivery of the Control Agreement and the depositing of the
Pledged Cash with Bank of America, N.A. to secure the Credit Card Program and acknowledge
that such actions shall not constitute a Default or Event of Default under the Credit Agreement or
any other Loan Document (the actions set forth in this clause (iii), the “Specified Credit Card
Program Consent”).
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:
SECTION 1. Definitions. Unless otherwise defined in this Agreement, capitalized terms used
herein shall have the meanings ascribed to them in the Credit Agreement. All references to
herein, hereto and words of similar import mean this Agreement.
SECTION 2. Confirmation by Loan Parties of Obligations and the Specified Events of
Default. Each Loan Party acknowledges and agrees that, as of the Effective Date, the aggregate
outstanding principal balance of the Loans under the Credit Agreement is $164,587,500.00,
exclusive of interest, fees, expenses and other amounts that are chargeable or otherwise
reimbursable under the Credit Agreement and the other Loan Documents, all of which the Loan
Parties hereby acknowledge and agree are outstanding and payable in accordance with the Loan
Documents.
Each Loan Party further acknowledges and agrees that (x) in addition to any other
rights and remedies that the Lender Parties may have under the Loan Documents, at law, in
equity or otherwise, in the absence of the Existing Waivers (with respect to the Waived Events of
Default only) and the Temporary Limited Waiver, any of the Specified Events of Default would
permit the Lender Parties to accelerate all or any portion of the Obligations in accordance with
Section 8.02 of the Credit Agreement and (y) with respect to the Specified Events of Default, this
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Agreement constitutes a notice of the occurrence of any Default as required by Section 6.03(a) of
the Credit Agreement.
SECTION 3. Consent to Credit Card Program; Temporary Limited Waiver; Temporary
Limited Waiver of Default Rights and Remedies.
(a) In reliance upon the representations, warranties and covenants of the Loan
Parties contained in this Agreement, and upon the terms and subject to the conditions of this
Agreement, effective as of the Effective Date, each of the Lender Parties hereby (i) agrees to the
Specified Credit Card Program Consent and (ii) waives the Specified Events of Default until the
Temporary Limited Waiver Period ends in accordance with the terms hereof; provided that
nothing herein shall be deemed to permit the Borrower or any Subsidiary to take any action
under any Loan Document that is conditioned upon there being no Default or Event of Default
existing at the time of such action (such waiver, subject to the limitations set forth in this
proviso, the “Temporary Limited Waiver”). In addition, each of the Lender Parties
acknowledges and agrees that during the Temporary Limited Waiver Period no right exists to
(and none of the Agent, any Lender or any other Person shall) exercise any right or remedy
pursuant to Section 8.02 of the Credit Agreement or pursuant to any other provision of any Loan
Document (other than as set forth in the immediately preceding sentence), in each case, arising
on account of any Specified Event of Default.
(b) In connection with the Existing Waivers, the Required Lenders requested
and the Borrower agreed to pay, effective from and including August 31, 2016 and in accordance
with Section 2.08(d) of the Credit Agreement, interest on the principal amount of all outstanding
obligations under the Credit Agreement at a fluctuating rate per annum equal to the Default Rate.
Notwithstanding the Temporary Limited Waiver and in consideration of the granting thereof, the
Borrower hereby reaffirms its obligation in accordance with Section 2.08(d) of the Credit
Agreement to pay the interest on the principal amount of all outstanding obligations under the
Credit Agreement at a fluctuating rate per annum equal to the Default Rate so long as any
Specified Event of Default or any other Event of Default is continuing. In addition, the
Borrower and each other Loan Party acknowledges and agrees that, so long as any Specified
Event of Default or any other Event of Default is continuing, (i) it is not permitted to and it will
not take any action under any Loan Document that is conditioned upon there being no Default or
Event of Default existing at the time of such action and (ii) neither the Agent nor any Lender is
required to facilitate or otherwise permit any action under any Loan Document that is
conditioned upon there being no Default or Event of Default existing at the time of such action.
(c) Borrower acknowledges and agrees that the Temporary Limited Waiver is
a one-time waiver and is limited to the extent specifically set forth above. Except for the
Specified Events of Default during the Temporary Limited Waiver Period as described in this
Section 3, each Loan Party acknowledges and agrees that the Temporary Limited Waiver shall
not waive (or be deemed to be or constitute a waiver of) any covenant, term or provision in the
Credit Agreement or any other Loan Document (or any breach thereof or any Default or Event of
Default) or hinder, restrict or otherwise modify any of the rights and remedies of any of the
Lender Parties in respect of any present or future Default or Event of Default (whether or not
related to the Specified Events of Default) under the Credit Agreement or any other Loan
Document, at law, in equity or otherwise.
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(d) Immediately upon the Temporary Limited Waiver Period ending in
accordance with the terms hereof, the agreements set forth in Section 3(a) (other than the
Specified Credit Card Program Consent) shall be void ab initio.
(e) As used herein, the term “Temporary Limited Waiver Period” shall mean
the period beginning on the Effective Date and ending on the earliest to occur of (the occurrence
of an event described in clause (i), (ii), (iii) or (iv) below, a “Termination Event”): (i) the
occurrence or existence of any Event of Default (other than the Specified Events of Default), (ii)
notice from the Agent or the Required Lenders of the occurrence or existence of any Temporary
Limited Waiver Default (as defined below), (iii) the later of (A) September 28, 2016 or (B) such
later date as the Required Lenders and the Borrower may agree in their respective sole discretion
or (iv) as of any date the unrestricted cash balances and Cash Equivalents of the Borrower and its
consolidated Subsidiaries is less than $33,500,000.
(f) As used herein, the term “Temporary Limited Waiver Default” shall mean
the occurrence or existence of any of the following:
(i) any representation or warranty contained in this Agreement
shall be incorrect in any material respect as of the Effective Date, provided that if any
such representation or warranty is qualified by or subject to a materiality
qualification, such representation or warranty shall be incorrect in any respect;
(ii) any Loan Party breaches any provision of this Agreement;
(iii) the initiation of any action by, or any other legal challenge of,
any Loan Party or any Affiliate thereof to invalidate or limit the enforceability of any
provision of this Agreement or any other Loan Document;
(iv) the failure of the Borrower to enter into a waiver (the “ABL
Waiver Agreement”) with the Required Lenders under (and as defined in) the ABL
Credit Agreement that is acceptable to the Required Lenders in their sole discretion
(it being understood and agreed that in order to be acceptable such waiver, at a
minimum, must (A) not provide for (i) the cash collateralization of any letter of credit
issued under the ABL Credit Agreement or (ii) the payment of any fee or other
amount (other than the reimbursement of reasonable legal expenses or the payment of
letter of credit fees at the default rate in accordance with the terms of the ABL Credit
Agreement as in effect on the date hereof) to any lender, agent, issuing bank, arranger
or similar party under the ABL Credit Agreement and (B) terminate by its terms not
earlier than September 28, 2016) prior to 5:00 p.m. New York City time on
September 14, 2016 (it being understood that the draft approved by counsel to the
Lender Parties on the date hereof is acceptable to the Required Lenders);
(v) the failure of the Borrower to enter into a forbearance
agreement (the “2019 Senior Notes Forbearance Agreement”) in respect of the
Missed Interest Payment with the holders of at least 50% of the aggregate principal
amount of the 2019 Senior Notes then outstanding that is acceptable to the Required
Lenders in their sole discretion (it being understood and agreed that in order to be
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acceptable such forbearance agreement, at a minimum, must (A) not provide for the
payment of any fee or other amount (other than the reimbursement of expenses as
provided for in such forbearance agreement) to any holder of the 2019 Senior Notes
and (B) terminate by its terms not earlier than September 28, 2016) prior to 5:00 p.m.
New York City time on September 14, 2016 (it being understood that the draft
approved by counsel to the Lender Parties on the date hereof is acceptable to the
Required Lenders);
(vi) (A) the delivery of an “acceleration notice” under (and as
defined in) the 2019 Senior Notes Documents by the trustee under the 2019 Senior
Notes Documents or the holders of at least 25% of the aggregate principal amount of
the 2019 Senior Notes then outstanding or (B) the acceleration of the 2019 Senior
Notes or any other exercise of remedies with respect thereto;
(vii) (A) the termination of the ABL Waiver Agreement for any
reason or (B) any amendment or modification thereto that is adverse to the interests of
any Lender Party without the prior written consent of the Required Lenders;
(viii) (A) the termination of the 2019 Senior Notes Forbearance
Agreement for any reason or (B) any amendment or modification thereto that is
adverse to the interests of any Lender Party without the prior written consent of the
Required Lenders; and
(ix) on or after the date hereof, the cash collateralization of any
letter of credit issued under the ABL Credit Agreement.
(g) Upon the occurrence of a Termination Event, the Temporary Limited
Waiver Period shall immediately end without the requirement of any demand, presentment,
protest, notice or other action of any kind, all of which Borrower and the other Loan Parties each
waives, and the Lender Parties shall be entitled to exercise all rights and remedies available
under the Loan Documents and/or applicable law in respect of any Specified Event of Default
that has occurred and is continuing.
(h) Any agreement by the Lender Parties to extend the Temporary Limited
Waiver Period, if any, must be set forth in writing and signed by a duly authorized signatory of
each of the Agent and the Required Lenders.
(i) The Borrower and the other Loan Parties each acknowledge that the
Lender Parties have not made any assurances concerning (i) any possibility of an extension of
the Temporary Limited Waiver Period, (ii) the manner in which or whether any Specified Event
of Default may be resolved or (iii) any additional forbearance, waiver, restructuring or other
accommodations.
(j) The parties hereto agree that the running of all statutes of limitation and
the doctrine of laches applicable to all claims or causes of action that any Lender Party may be
entitled to take or bring in order to enforce its rights and remedies against Borrower or any other
Loan Party are, to the fullest extent permitted by law, tolled and suspended during the
Temporary Limited Waiver Period.
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SECTION 4. Representations of the Loan Parties. To induce Agent and the other Lender
Parties to execute and deliver this Agreement, each Loan Party represents, on a several and not
joint basis, to the Lender Parties as of the Effective Date that:
(a) the execution, delivery and performance by such Loan Party of this
Agreement has been duly authorized by all necessary corporate or other organizational action,
and this Agreement is the legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms;
(b) neither the execution, delivery and performance of this Agreement nor the
consummation of the transactions contemplated hereby by such Loan Party will contravene the
terms of such Loan Party’s Organization Documents; conflict with or result in any breach or
contravention of, or require any payment to be made under, any Contractual Obligation to which
such Loan Party is a party or affecting such Loan Party or the properties of such Loan Party or
any of its Subsidiaries except for conflicts, breaches or contraventions that could not reasonably
be expected to result in a Material Adverse Effect; violate any Law or any order, injunction, writ
or decree of any Governmental Authority or any arbitral award to which such Loan Party or its
property is subject; or result in the creation or imposition of any Lien on any property of such
Loan Party;
(c) other than the Missed Interest Payment and any Specified Event of
Default, no Default or Event of Default or Temporary Limited Waiver Default has occurred or is
continuing;
(d) after giving effect to this Agreement, the representations and warranties
contained in the Credit Agreement (other than the representation and warranty contained in
Section 5.07 of the Credit Agreement, solely as it relates to the Missed Interest Payment or any
Specified Event of Default) and the other Loan Documents are true and correct in all material
respects on and as of the Effective Date with the same effect as though made on as and as of such
Date, except to the extent that any such representation or warranty expressly relates solely to an
earlier date, in which case such representation or warranty is true and correct in all material
respects as of such earlier date, provided that if any such representation or warranty referenced in
this clause (d) is qualified by or subject to a “material adverse effect” or similar term or
qualification, such representation or warranty shall be true and correct in all respects;
(e) the execution, delivery and performance of this Agreement are within the
limited liability company, limited partnership, or corporate power and authority of such Loan
Party and have been duly authorized by appropriate limited liability company, limited
partnership or corporate action and proceedings;
(f) there are no governmental or other third party authorizations, approvals,
actions, notices or filings required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement, except for the authorizations, approvals, actions,
notices and filings which have been duly obtained, taken, given or made and are in full force and
effect, are required by the Loan Documents, or in the case of any authorization, approval, action,
notice or filing from or with a Person other than a Governmental Authority, the failure to have
7
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect; and
(g) the Liens under the Loan Documents are valid, subsisting and perfected
and secure the Obligations with the priority required by the Loan Documents.
SECTION 5. Ratification of Liability. Borrower and the other Loan 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 Loan Documents, hereby ratify and reaffirm all of their
payment and performance obligations and obligations to indemnify, contingent or otherwise,
under each of such Loan Documents to which it is a party, and ratify and reaffirm their grants of
liens on or security interests in their properties (including the Collateral) pursuant to such Loan
Documents to which they are a party, respectively, as security for the Obligations under or with
respect to the Credit Agreement, 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 Credit
Agreement or any other Loan Document. Borrower and the other Loan Parties further agree and
reaffirm that the Loan Documents to which they are parties now apply to all Obligations as
defined in the Credit Agreement (including, without limitation, all additional Obligations
hereafter arising or incurred pursuant to or in connection with this Agreement, the Credit
Agreement or any other Loan Document). Each such party (i) further acknowledges receipt of a
copy of this Agreement, (ii) consents to the terms and conditions of same, and (iii) agrees and
acknowledges that each of the Loan Documents remains in full force and effect and is hereby
ratified and confirmed.
SECTION 6. Reference To And Effect Upon The Credit Agreement.
(a) Borrower and the other Loan Parties hereby confirm that this Agreement
and the other Loan Documents are in full force and effect as of the Effective Date, and that
neither Borrower nor any other Loan Party has any right of setoff, recoupment or other offset or
any defense, claim or counterclaim with respect to any of the Obligations, the Credit Agreement
or any other Loan Document.
(b) Except as expressly set forth herein or in the Credit Agreement, the
execution, delivery and effectiveness of this Agreement shall not directly or indirectly (i) create
any obligation to continue to defer any enforcement action after the occurrence of any Default or
Event of Default (including, without limitation, any Temporary Limited Waiver Default),
(ii) constitute a consent or waiver of any past, present or future violations of any provisions of
the Credit Agreement or any other Loan Documents nor constitute a novation of any of the Loan
Documents or of the Obligations under the Credit Agreement or other Loan Documents, (iii)
impair, limit, prejudice, amend, modify or operate as a waiver of (A) any terms, conditions,
obligations, covenants or agreements of the Credit Agreement or any other Loan Documents or
any other document or agreement related thereto, all of which are ratified and affirmed in all
respects and shall continue in full force and effect, or (B) any right, power or remedy of any
Lender Party, whether such right, power or remedy exists now or in the future, (iv) constitute a
consent to any merger or other transaction or to any sale, restructuring or refinancing transaction
8
or (v) constitute a course of dealing or other basis for altering any Obligations or any other
contract or instrument. Except as expressly set forth herein, each Lender Party reserves all of its
rights, powers, and remedies under the Credit Agreement, the other Loan Documents and
applicable law.
(c) From and after the Effective Date, the term “Loan Documents” in the
Credit Agreement and the other Loan Documents shall include, without limitation, this
Agreement.
(d) This Agreement shall not be deemed or construed to be a satisfaction,
reinstatement, novation, amendment or release of the Credit Agreement or any other Loan
Document, all of which remain in full force and effect.
SECTION 7. Costs And Expenses, Etc. Section 10.04 of the Credit Agreement is incorporated
herein, mutatis mutandis, as if a part hereof.
SECTION 8. Governing Law; Consent to Jurisdiction and Venue. This Agreement and the
transactions contemplated hereby, and all disputes between the parties under or relating to this
Agreement or the facts and circumstances leading to its execution, whether in contract, tort or
otherwise, shall be construed in accordance with and governed by the laws (including statutes of
limitation) of the State of New York, without regard to conflicts of law principles that would
require the application of the laws of another jurisdiction. Section 10.14 of the Credit
Agreement is incorporated herein, mutatis mutandis, as if a part hereof.
SECTION 9. Construction. Section 1.02 of the Credit Agreement is incorporated herein,
mutatis mutandis, as if a part hereof.
SECTION 10. Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto in different counterparts), each of which shall constitute an original, but
all of which when taken together shall constitute a single contract.
SECTION 11. Severability. Section 10.12 of the Credit Agreement is incorporated herein,
mutatis mutandis, as if a part hereof.
SECTION 12. Further Assurances. Borrower and each other Loan Party agrees to take all
further actions and execute all further documents as Agent or the Required Lenders 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 13. Section Headings. Section headings in this Agreement are included herein for
convenience of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 14. Notices. All notices, requests, and demands to or upon the respective parties
hereto shall be given in accordance with the Credit Agreement.
SECTION 15. Effectiveness. This Agreement shall become effective at the time (the “Effective
Date”) that the following conditions precedent have been satisfied:
9
(a) the Agent shall have received duly executed signature pages for this
Agreement signed by the Agent, the Required Lenders, Borrower and other Loan Parties;
(b) the representations and warranties in this Agreement and the other Loan
Documents shall be true and correct in all material respects on and as of the Effective Date
(other than the representation and warranty contained in Section 5.07 of the Credit Agreement,
solely as it relates to the Missed Interest Payment and any Specified Events of Default), provided
that if any such representation or warranty is qualified by or subject to a materiality qualification,
such representation or warranty shall be true and correct in all respects; and
(c) other than the Missed Interest Payment and any Specified Event of
Default, no Default, Event of Default or Temporary Limited Waiver Default shall have occurred
and be continuing as of the Effective Date.
SECTION 16. Waiver of Jury Trials. Section 10.15 of the Credit Agreement is incorporated
herein, mutatis mutandis, as if a part hereof.
SECTION 17. Assignments; No Third Party Beneficiaries. This Agreement shall be binding
upon and inure to the benefit of Borrower, the other Loan Parties, the Lender Parties and their
respective successors and assigns; provided, that none of the parties hereto or any other Lender
shall be permitted to delegate any of their respective duties or assign any of their respective
rights and remedies hereunder except in accordance with Section 10.06 of the Credit Agreement
without the prior written consent of the Required Lenders and the Agent in their sole discretion.
No Person other than the parties hereto shall have any rights hereunder or be entitled to rely on
this Agreement and all third-party beneficiary rights are hereby expressly disclaimed.
SECTION 18. Final Agreement, Etc. Section 10.21 of the Credit Agreement is incorporated
herein, mutatis mutandis, as if a part hereof.
SECTION 19. Amendments. This Agreement may not be amended, and no provision hereof
may be waived, except by an instrument signed by the Required Lenders and the Loan Parties.
[Signature pages to follow]
SIGNATURE PAGE TO
TEMPORARY LIMITED WAIVER
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first written above.
BASIC ENERGY SERVICES, INC.
By:
Name: Alan Krenek
Title: Senior Vice President, Chief Financial
Officer, Treasurer and Secretary
SIGNATURE PAGE TO
TEMPORARY LIMITED WAIVER
GUARANTORS:
ACID SERVICES, LLC
ADMIRAL WELL SERVICE, INC.
BASIC ENERGY SERVICES GP, LLC
BASIC ESA, INC.
BASIC MARINE SERVICES, INC.
CHAPARRAL SERVICE, INC.
FIRST ENERGY SERVICES COMPANY
GLOBE WELL SERVICE, INC.
JETSTAR ENERGY SERVICES, INC.
JETSTAR HOLDINGS, INC.
JS ACQUISITION LLC
LEBUS OIL FIELD SERVICE CO.
MAVERICK COIL TUBING SERVICES, LLC
MAVERICK SOLUTIONS, LLC
MAVERICK STIMULATION COMPANY,
LLC
MAVERICK THRU-TUBING SERVICES, LLC
MCM HOLDINGS, LLC
MSM LEASING, LLC
PERMIAN PLAZA, LLC
PLATINUM PRESSURE SERVICES, INC.
SCH DISPOSAL, L.L.C.
SLEDGE DRILLING CORP.
TAYLOR INDUSTRIES, LLC
THE MAVERICK COMPANIES, LLC
XTERRA FISHING & RENTAL TOOLS CO.
By:
Name: Alan Krenek
Title: Senior Vice President, Chief Financial
Officer, Treasurer and Secretary
BASIC ENERGY SERVICES, L.P.
By: Basic Energy Services GP, LLC, its sole
general partner
By: Basic Energy Services, Inc., its sole member
By:
Name: Alan Krenek
Title: Senior Vice President, Chief Financial
Officer, Treasurer and Secretary
Exhibit 10.2
TEMPORARY LIMITED WAIVER
This TEMPORARY LIMITED WAIVER (this “Agreement”) is entered into as of
September 14, 2016, by and among Basic Energy Services, Inc., as Borrower (the “Borrower”),
the guarantors party hereto (together with Borrower, the “Loan Parties”), the Lenders party
hereto, and Bank of America, N.A. (“BofA”), as Administrative Agent for the Lenders (in such
capacity, “Agent” and collectively with the Lenders, the “Lender Parties”), Swing Line Lender
and L/C Issuer.
RECITALS
A. Borrower, the other Loan Parties, Agent and the Lenders (including the
Lenders party hereto) are parties to that certain Amended and Restated Credit Agreement, dated
as of November 26, 2014 (as has been amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), pursuant to which, among other things, the Lenders
agreed, upon the terms and subject to the conditions set forth in the Credit Agreement, to make
loans and other extensions of credit, including the issuance of letters of credit, to Borrower.
B. Borrower has previously disclosed to the Agent and the Lenders that it has
failed to make the interest payment that was due and payable on August 15, 2016 with respect to
the Borrower’s 2019 Senior Notes, such 2019 Senior Notes having an aggregate principal
amount of more than $15,000,000 (the “Missed Interest Payment”).
C. The Missed Interest Payment will become an “Event of Default” (as defined in
the 2019 Senior Note Documents) on September 14, 2016, which will result in an Event of
Default pursuant to Section 8.01(e) of the Credit Agreement (the “Anticipated Event of Default”).
D. Borrower has requested that Agent and the Lenders temporarily waive during
the Temporary Limited Waiver Period (as defined below) the Anticipated Event of Default.
E. Borrower has, on or prior to the date hereof, entered into a Treasury
Management Services Security and Control Agreement (the “Control Agreement”) by and
among Borrower, BofA as secured party, and BofA, as depository, pursuant to which Borrower
has deposited $2,000,000 (the “Pledged Cash”) into the account specified therein as security
exclusively for the obligations under that certain Bank of America Corporate Purchasing Card
Agreement, between BofA and Basic Energy Services L.P., dated on or around July 21, 2005 and
that certain Commercial Prepaid Card Purchase Agreement between BofA and the Borrower
dated on or around March 14, 2006 (each as amended, supplemented or modified from time to
time, collectively, the “Credit Card Program”).
F. Upon the terms and subject to the conditions set forth in this Agreement, the
Lenders party hereto, which constitute Required Lenders as of the Effective Date have agreed,
except as expressly set forth herein, to temporarily waive the Anticipated Event of Default
during the Temporary Limited Waiver Period.
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:
2
SECTION 1. Definitions. Unless otherwise defined in this Agreement, capitalized terms used
herein shall have the meanings ascribed to them in the Credit Agreement. All references to
herein, hereto and words of similar import mean this Agreement.
SECTION 2. Confirmation by Loan Parties of Obligations and Anticipated Event of
Default.
(a) Each Loan Party acknowledges and agrees that, as of the Effective Date,
the aggregate outstanding principal balance of the Loans under the Credit Agreement is $0.00
and the aggregate outstanding face amount of all Letters of Credit which have been issued under
the Credit Agreement is $51,062,139, exclusive of interest, fees, expenses and other amounts that
are chargeable or otherwise reimbursable under the Credit Agreement and the other Loan
Documents, all of which the Loan Parties hereby acknowledge and agree are outstanding and
payable in accordance with the Loan Documents.
(b) Each Loan Party further acknowledges and agrees that (x) in addition to
any other rights and remedies that the Lender Parties may have under the Loan Documents, at
law, in equity or otherwise, in the absence of the Temporary Limited Waiver (as defined below),
the Anticipated Event of Default would permit the Lender Parties to require that the Borrower
Cash Collateralize the L/C Obligations in accordance with Section 8.02 of the Credit Agreement,
(y) solely with respect to the Anticipated Event of Default, this Agreement constitutes a notice of
the occurrence of a Default as required by Section 6.03(a) of the Credit Agreement, and (z) the
commitment of any Lender to make Loans and the obligation of any L/C Issuer to make L/C
Credit Extensions have in each case been terminated.
SECTION 3. Temporary Limited Waiver; Temporary Limited Waiver Default Rights and
Remedies.
(a) In reliance upon the representations, warranties and covenants of the Loan
Parties contained in this Agreement, and upon the terms and subject to the conditions of this
Agreement, effective as of the Effective Date, each of the Lender Parties hereby waives the
Anticipated Event of Default until the Temporary Limited Waiver Period ends in accordance
with the terms hereof; provided that nothing herein shall (i) constitute a waiver of the Required
Lenders’ right to request, pursuant to Section 2.03(h) of the Credit Agreement, that Letter of
Credit Fees be calculated based on the Default Rate or (ii) be deemed to permit Borrower or any
Subsidiary to take any action under any Loan Document that is conditioned upon there being no
Default or Event of Default existing at the time of such action (such waiver, subject to the
limitations set forth in the foregoing clauses (i) and (ii), the “Temporary Limited Waiver”). In
addition, each of the Lender Parties acknowledges and agrees that during the Temporary Limited
Waiver Period no right exists to (and none of the Agent, any Lender or any other Person shall)
exercise any right or remedy pursuant to Section 8.02 of the Credit Agreement or pursuant to any
other provision of any Loan Document (other than as set forth in the immediately preceding
sentence), in each case, arising on account of the Anticipated Event of Default.
(b) In accordance with Section 2.03(h) of the Credit Agreement, the Required
Lenders hereby request, effective from and including the Effective Date, the Borrower to pay
Letter of Credit Fees with respect to the outstanding Letters of Credit under the Credit
3
Agreement at the Default Rate. Notwithstanding the Temporary Limited Waiver and in
consideration of the granting thereof, the Borrower hereby agrees to pay Letter of Credit Fees
with respect to the outstanding Letters of Credit under the Credit Agreement at the Default Rate
in accordance with Section 2.03(h) so long as, without giving effect to the Temporary Limited
Waiver, any Anticipated Event of Default or any other Event of Default exists.
(c) Borrower and each other Loan Party acknowledges and agrees that, so
long as, without giving effect to the Temporary Limited Waiver, the Anticipated Event of
Default or any other Event of Default exists, (i) it is not permitted to and it will not take any
action under any Loan Document that is conditioned upon there being no Default or Event of
Default existing at the time of such action and (ii) neither the Agent nor any Lender is required to
facilitate or otherwise permit any action under any Loan Document that is conditioned upon
there being no Default or Event of Default existing at the time of such action.
(d) Borrower acknowledges and agrees that the Temporary Limited Waiver is
a one-time waiver and is limited to the extent specifically set forth above. Except for the
Anticipated Event of Default during the Temporary Limited Waiver Period as described in this
Section 3, each Loan Party acknowledges and agrees that the Temporary Limited Waiver shall
not waive (or be deemed to be or constitute a waiver of) any covenant, term or provision in the
Credit Agreement or any other Loan Document (or any breach thereof or any Default or Event of
Default) or hinder, restrict or otherwise modify any of the rights and remedies of any of the
Lender Parties in respect of any present or future Default or Event of Default (whether or not
related to the Anticipated Event of Default) under the Credit Agreement or any other Loan
Document, at law, in equity or otherwise.
(e) Immediately upon the Temporary Limited Waiver Period ending in
accordance with the terms hereof, the agreements set forth in Section 3(a) shall be void ab initio.
(f) As used herein, the term “Temporary Limited Waiver Period” shall mean
the period beginning on the Effective Date and ending on the earliest to occur of (the occurrence
of an event described in clause (i), (ii) or (iii) below , a “Termination Event”): (i) the occurrence
or existence of any Event of Default (other than the Anticipated Event of Default), (ii) notice
from the Agent or the Required Lenders of the occurrence or existence of any Temporary
Limited Waiver Default (as defined below) or (iii) the later of (A) September 28, 2016 or (B)
such later date as the Required Lenders and the Borrower may agree in their respective sole
discretion.
(g) As used herein, the term “Temporary Limited Waiver Default” shall mean
the occurrence or existence of any of the following:
(i) any representation or warranty contained in this Agreement
shall be incorrect in any material respect as of the Effective Date, provided that if any
such representation or warranty is qualified by or subject to a materiality
qualification, such representation or warranty shall be incorrect in any respect;
(ii) any Loan Party breaches any provision of this Agreement in
any material respect;
4
(iii) the initiation of any action by, or any other legal challenge of,
any Loan Party or any Affiliate thereof to invalidate or limit the enforceability of any
provision of this Agreement or any other Loan Document; and
(iv) (A) the delivery of an “acceleration notice” under (and as
defined in) the 2019 Senior Notes Documents by the trustee under the 2019 Senior
Notes Documents or the holders of at least 25% of the aggregate principal amount of
the 2019 Senior Notes then outstanding or (B) the acceleration of the 2019 Senior
Notes or any other exercise of remedies with respect thereto.
(h) Upon the occurrence of a Termination Event, the Temporary Limited
Waiver Period shall immediately end without the requirement of any demand, presentment,
protest, notice or other action of any kind, all of which Borrower and the other Loan Parties each
waives, and the Lender Parties shall be entitled to exercise all rights and remedies available
under the Loan Documents and/or applicable law in respect of any Anticipated Event of Default
that has occurred and is continuing.
(i) Any agreement by the Lender Parties to extend the Temporary Limited
Waiver Period, if any, must be set forth in writing and signed by a duly authorized signatory of
each of the Agent and the Required Lenders.
(j) Borrower and the other Loan Parties each acknowledge that the Lender
Parties have not made any assurances concerning (i) any possibility of an extension of the
Temporary Limited Waiver Period, (ii) the manner in which or whether any Anticipated Event of
Default may be resolved or (iii) any additional forbearance, waiver, restructuring or other
accommodations.
(k) The parties hereto agree that the running of all statutes of limitation and
the doctrine of laches applicable to all claims or causes of action that any Lender Party may be
entitled to take or bring in order to enforce its rights and remedies against Borrower or any other
Loan Party are, to the fullest extent permitted by law, tolled and suspended during the
Temporary Limited Waiver Period.
SECTION 4. Credit Card Program. In connection with Borrower’s execution and delivery of
the Control Agreement and the depositing of the Pledged Cash (i) the Agent hereby agrees that,
so long as the Pledged Cash shall be maintained as security for the Credit Card Program in the
amount of not less than $2,000,000 (or such lesser amount as may be agreed by BofA), no Bank
Product Reserve or any other Availability Reserve shall be imposed under the Credit Agreement
in respect of the Credit Card Program and (ii) BofA hereby agrees that so long as the Pledged
Cash is maintained as security for the Credit Card Program in the amount of not less than
$2,000,000 (or such lesser amount as may be agreed by BofA) it shall not terminate the Credit
Card Program as a result of the institution by or against any Loan Party of a proceeding under
any Debtor Relief Law; provided that, unless a cash management order or other applicable order
has been entered in form and substance reasonably acceptable to BofA, BofA reserves its right
temporarily to suspend the Credit Card Program at any time after the date that is one week after
the Borrower’s filing of an Insolvency Proceeding and continuing until such an order has been
entered; and (iii) each of the Lenders party hereto consents to the Borrower’s execution and
5
delivery of the Control Agreement and the depositing of the Pledged Cash with BofA to secure
the Credit Card Program and agrees that such actions shall not constitute a Default or Event of
Default under the Credit Agreement or any other Loan Document.
SECTION 5. Representations of the Loan Parties. To induce Agent and the other Lender
Parties to execute and deliver this Agreement, each Loan Party represents, on a several and not
joint basis, to the Lender Parties as of the Effective Date that:
(a) the execution, delivery and performance by such Loan Party of this
Agreement has been duly authorized by all necessary corporate or other organizational action,
and this Agreement is the legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms;
(b) neither the execution, delivery and performance of this Agreement nor the
consummation of the transactions contemplated hereby by such Loan Party will contravene the
terms of such Loan Party’s Organization Documents; conflict with or result in any breach or
contravention of, or require any payment to be made under, any Contractual Obligation to which
such Loan Party is a party or affecting such Loan Party or the properties of such Loan Party or
any of its Subsidiaries except for conflicts, breaches or contraventions that could not reasonably
be expected to result in a Material Adverse Effect; violate any Law or any order, injunction, writ
or decree of any Governmental Authority or any arbitral award to which such Loan Party or its
property is subject; or result in the creation or imposition of any Lien on any property of such
Loan Party;
(c) Other than the Missed Interest Payment and the Anticipated Event of
Default, no Default, Event of Default or Temporary Limited Waiver Default has occurred or is
continuing;
(d) after giving effect to this Agreement, the representations and warranties
contained in the Credit Agreement (other than the representation and warranty contained in
Section 5.07 of the Credit Agreement, solely as it relates to the Missed Interest Payment or the
Anticipated Event of Default) and the other Loan Documents are true and correct in all material
respects on and as of the Effective Date with the same effect as though made on as and as of such
Date, except to the extent that any such representation or warranty expressly relates solely to an
earlier date, in which case such representation or warranty is true and correct in all material
respects as of such earlier date, provided that if any such representation or warranty referenced in
this clause (d) is qualified by or subject to a “material adverse effect” or similar term or
qualification, such representation or warranty shall be true and correct in all respects;
(e) the execution, delivery and performance of this Agreement are within the
limited liability company, limited partnership, or corporate power and authority of such Loan
Party and have been duly authorized by appropriate limited liability company, limited
partnership or corporate action and proceedings;
(f) there are no governmental or other third party authorizations, approvals,
actions, notices or filings required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement, except for the authorizations, approvals, actions,
6
notices and filings which have been duly obtained, taken, given or made and are in full force and
effect, are required by the Loan Documents, or in the case of any authorization, approval, action,
notice or filing from or with a Person other than a Governmental Authority, the failure to have
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect; and
(g) the Liens under the Loan Documents are valid, subsisting and perfected
and secure the Obligations with the priority required by the Loan Documents.
SECTION 6. Ratification of Liability. Borrower and the other Loan 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 Loan Documents, hereby ratify and reaffirm all of their
payment and performance obligations and obligations to indemnify, contingent or otherwise,
under each of such Loan Documents to which it is a party, and ratify and reaffirm their grants of
liens on or security interests in their properties (including the Collateral) pursuant to such Loan
Documents to which they are a party, respectively, as security for the Obligations under or with
respect to the Credit Agreement, and confirm and agree 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 Credit
Agreement or any other Loan Document. Borrower and the other Loan Parties further agree and
reaffirm that the Loan Documents to which they are parties now apply to all Obligations as
defined in the Credit Agreement (including, without limitation, all additional Obligations
hereafter arising or incurred pursuant to or in connection with this Agreement, the Credit
Agreement or any other Loan Document). Each such party (i) further acknowledges receipt of a
copy of this Agreement, (ii) consents to the terms and conditions of same, and (iii) agrees and
acknowledges that each of the Loan Documents remains in full force and effect and is hereby
ratified and confirmed.
SECTION 7. Reference To And Effect Upon The Credit Agreement.
(a) Borrower and the other Loan Parties hereby confirm that this Agreement
and the other Loan Documents are in full force and effect as of the Effective Date, and that
neither Borrower nor any other Loan Party has any right of setoff, recoupment or other offset or
any defense, claim or counterclaim with respect to any of the Obligations, the Credit Agreement
or any other Loan Document.
(b) Except as expressly set forth herein or in the Credit Agreement, the
execution, delivery and effectiveness of this Agreement shall not directly or indirectly (i) create
any obligation to continue to defer any enforcement action after the occurrence of any Default or
Event of Default (including, without limitation, any Temporary Limited Waiver Default),
(ii) constitute a consent or waiver of any past, present or future violations of any provisions of
the Credit Agreement or any other Loan Documents nor constitute a novation of any of the Loan
Documents or of the Obligations under the Credit Agreement or other Loan Documents, (iii)
impair, limit, prejudice, amend, modify or operate as a waiver of (A) any terms, conditions,
obligations, covenants or agreements of the Credit Agreement or any other Loan Documents or
any other document or agreement related thereto, all of which are ratified and affirmed in all
7
respects and shall continue in full force and effect, or (B) any right, power or remedy of any
Lender Party, whether such right, power or remedy exists now or in the future, (iv) constitute a
consent to any merger or other transaction or to any sale, restructuring or refinancing transaction
or (v) constitute a course of dealing or other basis for altering any Obligations or any other
contract or instrument. Except as expressly set forth herein, each Lender Party reserves all of its
rights, powers, and remedies under the Credit Agreement, the other Loan Documents and
applicable law.
(c) From and after the Effective Date, the term “Loan Documents” in the
Credit Agreement and the other Loan Documents shall include, without limitation, this
Agreement.
(d) This Agreement shall not be deemed or construed to be a satisfaction,
reinstatement, novation, amendment or release of the Credit Agreement or any other Loan
Document, all of which remain in full force and effect.
SECTION 8. Costs And Expenses, Etc. Section 10.04 of the Credit Agreement is incorporated
herein, mutatis mutandis, as if a part hereof.
SECTION 9. Governing Law; Consent to Jurisdiction and Venue. This Agreement and the
transactions contemplated hereby, and all disputes between the parties under or relating to this
Agreement or the facts and circumstances leading to its execution, whether in contract, tort or
otherwise, shall be construed in accordance with and governed by the laws (including statutes of
limitation) of the State of New York, without regard to conflicts of law principles that would
require the application of the laws of another jurisdiction. Section 10.14 of the Credit
Agreement is incorporated herein, mutatis mutandis, as if a part hereof.
SECTION 10. Construction. Section 1.02 of the Credit Agreement is incorporated herein,
mutatis mutandis, as if a part hereof.
SECTION 11. Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto in different counterparts), each of which shall constitute an original, but
all of which when taken together shall constitute a single contract.
SECTION 12. Severability. Section 10.12 of the Credit Agreement is incorporated herein,
mutatis mutandis, as if a part hereof.
SECTION 13. Further Assurances. Borrower and each other Loan Party agrees to take all
further actions and execute all further documents as Agent or the Required Lenders 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 14. Section Headings. Section headings in this Agreement are included herein for
convenience of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 15. Notices. All notices, requests, and demands to or upon the respective parties
hereto shall be given in accordance with the Credit Agreement.
8
SECTION 16. Effectiveness. This Agreement shall become effective at the time (the “Effective
Date”) that the following conditions precedent have been satisfied:
(a) the Agent shall have received duly executed signature pages for this
Agreement signed by the Agent, the Required Lenders, Borrower and other Loan Parties;
(b) the Agent shall have received evidence reasonably satisfactory to it that
the Term Loan Agent and the “Required Lenders” (as defined in the Term Loan Agreement)
have agreed to a temporary limited waiver of the Anticipated Event of Default and any other
anticipated Events of Default under the Term Loan Agreement as to which Borrower has given
notice during the period corresponding to the Temporary Limited Waiver Period.
(c) the Agent shall have received evidence reasonably satisfactory to it that
the holders of at least 51% of the 2019 Senior Notes have agreed to forbear from accelerating the
maturity of the 2019 Notes as a result of the Anticipated Event of Default during the period
corresponding to the Temporary Limited Waiver Period.
(d) the representations and warranties in this Agreement and the other Loan
Documents shall be true and correct in all material respects on and as of the Effective Date (other
than the representation and warranty contained in Section 5.07 of the Credit Agreement, solely as
it relates to the Missed Interest Payment and the Anticipated Event of Default), provided that if
any such representation or warranty is qualified by or subject to a materiality qualification, such
representation or warranty shall be true and correct in all respects; and
(e) other than the Missed Interest Payment and the Anticipated Event of
Default , no Default, Event of Default or Temporary Limited Waiver Default shall have occurred
and be continuing as of the Effective Date.
SECTION 17. Waiver of Jury Trials. Section 10.15 of the Credit Agreement is incorporated
herein, mutatis mutandis, as if a part hereof.
SECTION 18. Assignments; No Third Party Beneficiaries. This Agreement shall be binding
upon and inure to the benefit of Borrower, the other Loan Parties, the Lender Parties and their
respective successors and assigns; provided, that none of the parties hereto or any other Lender
shall be permitted to delegate any of their respective duties or assign any of their respective
rights and remedies hereunder except in accordance with Section 10.06 of the Credit Agreement
without the prior written consent of the Required Lenders and the Agent in their sole discretion.
No Person other than the parties hereto shall have any rights hereunder or be entitled to rely on
this Agreement and all third-party beneficiary rights are hereby expressly disclaimed.
SECTION 19. Final Agreement, Etc. Section 10.21 of the Credit Agreement is incorporated
herein, mutatis mutandis, as if a part hereof.
SECTION 20. Amendments. This Agreement may not be amended, and no provision hereof
may be waived, except by an instrument signed by the Required Lenders and the Loan Parties.
SECTION 21. RELEASE. EACH OF THE LOAN PARTIES (IN ITS OWN RIGHT AND
ON BEHALF OF ITS SUCCESSORS AND ASSIGNS) HEREBY EXPRESSLY AND
9
UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT IT HAS NO
SETOFFS, COUNTERCLAIMS, ADJUSTMENTS, RECOUPMENTS, DEFENSES,
CLAIMS, CAUSES OF ACTION, ACTIONS OR DAMAGES OF ANY CHARACTER
OR NATURE, WHETHER CONTINGENT, NONCONTINGENT, LIQUIDATED,
UNLIQUIDATED, FIXED, MATURED, UNMATURED, DISPUTED, UNDISPUTED,
LEGAL, EQUITABLE, SECURED OR UNSECURED, KNOWN OR UNKNOWN,
ACTUAL OR PUNITIVE, FORESEEN OR UNFORESEEN, DIRECT, OR INDIRECT,
IN EACH CASE WHICH ARISE OUT OF OR ARE RELATED TO THE
OBLIGATIONS OR ANY OF THE LOAN DOCUMENTS (EACH, A “RELEASED
CLAIM”), AGAINST ANY OF THE LENDER PARTIES, ANY OF THEIR AFFILIATES
OR ANY OF THEIR OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS
OR REPRESENTATIVES OR ANY OF THEIR RESPECTIVE SUCCESSORS OR
ASSIGNS (COLLECTIVELY, THE “LENDER-RELATED PARTIES”); PROVIDED
THAT, IN EACH CASE, SUCH RELEASED CLAIM IS BASED ON FACTS, EVENTS,
OR CONDITIONS, WHETHER KNOWN OR UNKNOWN, EXISTING ON OR PRIOR
TO THE EFFECTIVE DATE. IN PARTIAL CONSIDERATION FOR THE
AGREEMENT OF AGENT AND REQUIRED LENDERS TO ENTER INTO THIS
AGREEMENT, EACH OF THE LOAN PARTIES HEREBY KNOWINGLY AND
UNCONDITIONALLY WAIVES AND FULLY AND FINALLY RELEASES AND
FOREVER DISCHARGES ALL LENDER-RELATED PARTIES FROM, AND
COVENANTS NOT TO SUE THE LENDER-RELATED PARTIES FOR, ANY AND ALL
RELEASED CLAIMS, WHICH ANY LOAN PARTY OWNS AND HOLDS AS OF THE
EFFECTIVE DATE, OR HAS AT ANY TIME PRIOR TO THE EFFECTIVE DATE
OWNED OR HELD, SUCH WAIVER, RELEASE AND DISCHARGE BEING MADE
WITH FULL KNOWLEDGE AND UNDERSTANDING OF THE CIRCUMSTANCES
AND EFFECTS OF SUCH WAIVER, RELEASE AND DISCHARGE AND AFTER
HAVING CONSULTED LEGAL COUNSEL OF ITS OWN CHOOSING WITH
RESPECT THERETO. THIS SECTION IS IN ADDITION TO ANY OTHER RELEASE
OF ANY OF THE LENDER-RELATED PARTIES BY ANY OF THE LOAN PARTIES
AND SHALL NOT IN ANY WAY LIMIT ANY OTHER RELEASE, COVENANT NOT
TO SUE, OR WAIVER BY ANY OF THE LOAN PARTIES IN FAVOR OF ANY OF
THE LENDER-RELATED PARTIES.
[Signature pages to follow]
SIGNATURE PAGE TO
TEMPORARY LIMITED WAIVER
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first written above.
BASIC ENERGY SERVICES, INC.
By:
Name: Alan Krenek
Title: Senior Vice President, Chief Financial
Officer, Treasurer and Secretary
SIGNATURE PAGE TO
TEMPORARY LIMITED WAIVER
GUARANTORS:
ACID SERVICES, LLC
ADMIRAL WELL SERVICE, INC.
BASIC ENERGY SERVICES GP, LLC
BASIC ESA, INC.
BASIC MARINE SERVICES, INC.
CHAPARRAL SERVICE, INC.
FIRST ENERGY SERVICES COMPANY
GLOBE WELL SERVICE, INC.
JETSTAR ENERGY SERVICES, INC.
JETSTAR HOLDINGS, INC.
JS ACQUISITION LLC
LEBUS OIL FIELD SERVICE CO.
MAVERICK COIL TUBING SERVICES, LLC
MAVERICK SOLUTIONS, LLC
MAVERICK STIMULATION COMPANY,
LLC
MAVERICK THRU-TUBING SERVICES, LLC
MCM HOLDINGS, LLC
MSM LEASING, LLC
PERMIAN PLAZA, LLC
PLATINUM PRESSURE SERVICES, INC.
SCH DISPOSAL, L.L.C.
SLEDGE DRILLING CORP.
TAYLOR INDUSTRIES, LLC
THE MAVERICK COMPANIES, LLC
XTERRA FISHING & RENTAL TOOLS CO.
By:
Name: Alan Krenek
Title: Senior Vice President, Chief Financial
Officer, Treasurer and Secretary
SIGNATURE PAGE TO
TEMPORARY LIMITED WAIVER
BASIC ENERGY SERVICES, L.P.
By: Basic Energy Services GP, LLC, its sole
general partner
By: Basic Energy Services, Inc., its sole member
By:
Name: Alan Krenek
Title: Senior Vice President, Chief Financial
Officer, Treasurer and Secretary
SIGNATURE PAGE TO
TEMPORARY LIMITED WAIVER
BASIC ENERGY SERVICES LP, LLC
By:
Name: Jerry Tufly
Title: Sole Manager and President
Exhibit 10.3
FORBEARANCE
FORBEARANCE, dated as of September 14, 2016 (this “Agreement”), by and among
Basic Energy Services, Inc., a Delaware corporation (the “Issuer”), each of the undersigned entities listed
as guarantors (the “Guarantors” and, together with the Issuer, the “Note Parties”), and each of the under-
signed beneficial owners and/or investment advisors or managers of discretionary accounts for the holders
or beneficial owners of the 2019 Notes (as defined below) (collectively, the “Holders”).
WHEREAS, the Issuer is the issuer under that certain Indenture, dated as of February 15,
2011, among the Issuer, the Guarantors and Wilmington Trust, N.A., as successor trustee (the “Trustee”)
to Wells Fargo Bank, N.A. (as amended, modified or supplemented prior to the date hereof, the “2019
Indenture” and, the notes issued thereunder, the “2019 Notes”);
WHEREAS, the Issuer failed to make the interest payment due on August 15, 2016 on
the 2019 Notes (as required pursuant to the 2019 Indenture), and the failure to pay interest on any of the
2019 Notes within 30 days after the same has become due and payable, constitutes an Event of Default
under the 2019 Indenture (such default, together with any related default in depositing such funds for re-
mittance of payment, the “Interest Default”);
WHEREAS, upon the occurrence of an Event of Default, the Trustee or the holders of at
least twenty-five percent (25%) of the outstanding principal amount of the 2019 Notes may accelerate the
maturity of the 2019 Notes, declare all amounts under the 2019 Notes and the 2019 Indenture immediate-
ly due and payable, and exercise all other rights and remedies available under the 2019 Indenture;
WHEREAS, the Holders collectively hold a majority of the aggregate principal amount
of the 2019 Notes outstanding, and have formed an ad hoc committee for the purposes of entering into
restructuring discussions with the Note Parties;
WHEREAS, the Note Parties have requested that the Holders, and the Holders have
agreed to, subject to the terms and conditions set forth herein, temporarily forbear from making an “accel-
eration declaration” with respect to the Interest Default; and
WHEREAS, terms used but not otherwise defined herein shall have the meanings given
to them in the 2019 Indenture.
NOW, THEREFORE, in consideration of the premises and covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowl-
edged, the parties hereto, intending to be legally bound hereby, agree as follows:
Section 1. Forbearance.
(a) Subject to the satisfaction of the conditions precedent set forth in Section 3 below
and the continued satisfaction of the conditions set forth in Section 4 below, respectively, as of the date
hereof, each Holder hereby agrees that during the period beginning on the date hereof and ending on the
Forbearance Termination Date (the “Forbearance Period”), it will not enforce, or otherwise take any
action to direct enforcement of, any of the rights and remedies available to the Holders or the Trustee
under the 2019 Indenture or the 2019 Notes or otherwise, including, without limitation, any action to
accelerate, or join in any request for acceleration of, the 2019 Notes (“Remedial Action”) under the 2019
Indenture or the 2019 Notes, solely with respect to the Interest Default (such forbearance, the
“Forbearance”). As used herein, “Forbearance Termination Date” means the earliest to occur of (a) 11:59
p.m. (New York City time) on September 28, 2016, (b) the occurrence of any Event of Default other than
2
the Interest Default and (c) five (5) calendar days following the Issuer’s receipt of bona fide notice from
any Holder of any breach by any Note Party of any of the conditions or agreements provided in this
Agreement (which breach remains uncured during such period).
(b) Subject to the satisfaction of the conditions precedent set forth in Section 3
below, as of the date hereof, each Holder hereby agrees that, during the Forbearance Period, it will not
sell, pledge, hypothecate or otherwise transfer any 2019 Notes, except to (i) a purchaser or other entity
who agrees in writing with the transferor (with a copy to and for the benefit of the Note Parties) prior to
such transfer to be bound by all of the terms of this Agreement as if a party hereto with respect to the
relevant 2019 Notes being transferred to such purchaser or (ii) a party who is already a signatory hereto.
(c) This Agreement shall in no way be construed to preclude any Holder from
acquiring additional 2019 Notes to the extent permitted by applicable law. However, such Holder shall,
automatically and without further action, remain subject to this Agreement with respect to any 2019 Notes
so acquired. The foregoing forbearances shall not be construed to impair the ability of the Holders or the
Trustee to exercise any rights or remedies under the 2019 Indenture or take any Remedial Action (x) at
any time after the Forbearance Period or (y) during the Forbearance Period, for Defaults or Events of
Default other than the Interest Default, and, except as provided herein, nothing shall restrict, impair or
otherwise affect the exercise of the Holders’ rights under this Agreement, the 2019 Indenture or the 2019
Notes.
(d) With respect to the Forbearance, each Holder’s agreements, as provided herein,
shall immediately terminate without requirement for any notice, demand or presentment of any kind on
the Forbearance Termination Date, and the Note Parties at that time shall be obligated to comply with and
perform all terms, conditions and provisions of the 2019 Indenture and the 2019 Notes without giving
effect to the Forbearance, and the Trustee and the Holders may at any time thereafter proceed to exercise
any and all of their rights and remedies, including, without limitation, their rights and remedies in
connection with the Interest Default and any other Defaults or Events of Default under the 2019 Indenture
or rights under this Agreement, to the extent continuing.
(e) The Holders hereby request that the Trustee not take, and direct the Trustee not
to take any Remedial Action with respect to the Interest Default during the Forbearance Period. In the
event that the Trustee takes any action to declare all of the 2019 Notes immediately due and payable
pursuant to Section 6.02 of the 2019 Indenture during the Forbearance Period solely due to the Interest
Default, the Holders agree to rescind and cancel such acceleration to the fullest extent permitted under the
2019 Indenture.
Section 2. Representations and Warranties.
By its execution of this Agreement, each Note Party hereby represents and warrants to
the Holders that:
(a) Each Note Party has duly executed and delivered this Agreement, and this
Agreement constitutes the legal, valid and binding obligation of each Note Party enforceable against it in
accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’
rights and by equitable principles (regardless of whether enforcement is sought in equity or at law); and
(b) Neither the execution, delivery or performance by any Note Party of this
Agreement, nor compliance by it with the terms and provisions thereof, (i) will contravene any provision
of applicable law, (ii) will conflict with or result in any breach of any of the terms, covenants, conditions
3
or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation
to create or impose) any Lien upon any of the property or assets of any Note Party or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan
agreement, or any other material agreement, contract or instrument, in each case to which any Note Party
or any of its Subsidiaries is a party or by which it or any its property or assets is bound or to which it may
be subject, or (iii) will violate any provision of the certificate or articles of incorporation, certificate of
formation, limited liability company agreement or by-laws (or equivalent constitutional, organizational
and/or formation documents), as applicable, of any Note Party.
Section 3. Conditions Precedent. The effectiveness of this Agreement and the ob-
ligations of the Holders hereunder is subject to the satisfaction, or waiver by the Holders, of the following
conditions:
(a) Counterparts. The execution of this Agreement by each Note Party and Holders
constituting 75% of the outstanding 2019 Notes as of the date hereof.
(b) No Default. No Default or Event of Default other than the Interest Default shall
have occurred and be continuing as of the date the condition set forth in Section 3(a) is satisfied.
Section 4. Forbearance Continuing Conditions. The continued satisfaction of
each of the following shall be a condition to the Forbearance:
(a) No voluntary petition for relief under the Bankruptcy Code is filed by any Note
Party;
(b) No involuntary petition for relief under the Bankruptcy Code is filed against the
Issuer or any Note Party that is a Significant Subsidiary; and
(c) The Issuer shall duly and punctually pay the fees and expenses of the Holders’
legal advisor, Fried, Frank, Harris, Shriver & Jacobson LLP (“Fried Frank”), and financial advisor, GLC
Advisors, Co. (“GLC”), pursuant to, and consistent in all material respects with the terms of, that certain
fee reimbursement letter, dated May 9, 2016, by and between the Issuer and Fried Frank and that certain
fee reimbursement letter, dated April 19, 2016, by and between the Issuer and GLC, respectively.
Section 5. Representation of the Holders. Each Holder severally (but not jointly)
represents that, as of the date hereof, it is the beneficial owner and/or investment advisor or manager of
discretionary accounts for the holders or beneficial owners of the aggregate principal amount of the 2019
Notes set forth on the signature page hereof beneath its name.
Section 6. Confidentiality. Each of the Note Parties shall not disclose to any per-
son or entity the Holders’ holdings set forth on their respective signature pages to this Agreement or oth-
erwise disclose the Holders’ holdings information (collectively, the “Holder Information”) except: (1) in
any legal proceeding relating to this Agreement; provided that the relevant Note Party shall use their rea-
sonable best efforts to maintain the confidentiality of such Holder Information in the context of any such
proceeding; (2) to the extent required by law; and (3) in response to a subpoena, discovery request, or a
request from a government agency, regulatory authority or securities exchange for information regarding
Holder Information or the information contained therein; provided, however, that each of the Note Parties
will, to the extent permitted by applicable law or regulation, provide any such Holder with prompt written
notice of any such request or requirement so that such Holder may seek, at such Holder’s expense, a pro-
tective order or other appropriate remedy and each Note Party will fully cooperate with such Holder’s
efforts to obtain same. Notwithstanding anything to the contrary in this Section 6, the Note Parties may:
4
(i) disclose the aggregate principal amount of Notes held by the Holders executing this Agreement, taken
as a whole; and (ii) provide the Trustee with an executed copy of this Agreement that includes the indi-
vidual signature pages of each of the Holders; provided, that the Note Parties first obtain the Trustee’s
written consent not to disclose to any person or entity any information relating to the individual holdings
of each Holder, such written consent to be on substantially the same terms as set forth in this paragraph.
Section 7. Effect on the 2019 Indenture. Except as expressly set forth herein, this
Agreement shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect
the rights and remedies of the Holders under the 2019 Indenture or the 2019 Notes, and shall not, except
as expressly set forth herein, alter, modify, amend or in any way affect any of the terms, conditions, obli-
gations, covenants or agreements contained in the 2019 Indenture or the 2019 Notes or any other provi-
sion of the 2019 Indenture or the 2019 Notes, all of which are ratified and affirmed in all respects and
shall continue in full force and effect.
Section 8. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of which when so executed and
delivered shall be deemed to be an original, but all of which when taken together shall constitute a single
instrument. Delivery of an executed counterpart of a signature page of this Agreement by electronic
transmission shall be effective as delivery of a manually executed counterpart hereof.
Section 9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES.
Section 10. Headings. The headings of this Agreement are for purposes of reference
only and shall not limit or otherwise affect the meaning hereof.
Section 11. Acknowledgments. Each Note Party hereby expressly acknowledges
the terms of this Agreement and reaffirms, as of the date hereof after giving effect to this Agreement, the
covenants and agreements contained in the 2019 Indenture and the 2019 Notes, including, in each case,
such covenants and agreements as in effect immediately after giving effect to this Agreement and the
transactions contemplated hereby.
Section 12. Relationship of Parties; No Third Party Beneficiaries. Nothing in this
Agreement shall be construed to alter the existing debtor-creditor relationship between the Note Parties
and the Holders. This Agreement is not intended, nor shall it be construed, to create a partnership or joint
venture relationship between or among any of the parties hereto. No person other than a party hereto is
intended to be a beneficiary hereof and no person other than a party hereto shall be authorized to rely
upon or enforce the contents of this Agreement.
Section 13. Entire Agreement; Modification of Agreement; Verbal Agreements
Not Binding. This Agreement constitutes the entire understanding of the parties with respect to the
subject matter hereof and thereof, and supersedes all other discussions, promises, representations,
warranties, agreements and understandings between the parties with respect thereto. This Agreement may
not be modified, altered or amended except by an agreement in writing signed by a duly authorized
representative of all the parties hereto.
Section 14. Non-Waiver of Default. Neither this Agreement nor any forbearance
hereunder shall be deemed a waiver of or consent to the Interest Default or to any Default or Event of
Default or any other term or provision of the 2019 Indenture.
5
Section 15. No Novation, etc. This Agreement is not intended to be, nor shall it be
construed to create, a novation or accord and satisfaction, and the 2019 Notes and the 2019 Indenture
shall remain in full force and effect.
Section 16. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns.
Section 17. Joinder of Additional Holders. During the Forbearance Period other
beneficial holders may become Holders by executing a joinder to this Agreement, the form of which shall
be mutually agreeable to the Issuer and the Holders.
Section 18. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain
in full force and effect, and any provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or unenforceable, in each case, so
long as the economic or legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party hereto. Upon any such determination of invalidity, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby
are consummated as originally contemplated to the greatest extent possible.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly exe-
cuted as of the date first written above.
NOTE PARTIES
BASIC ENERGY SERVICES, INC.
By: /s/ Alan Krenek
Name: Alan Krenek
Title: Senior Vice President, Chief Financial Officer,
Treasurer and Secretary
ACID SERVICES LLC
ADMIRAL WELL SERVICE, INC.
BASIC ENERGY SERVICES GP, LLC
BASIC ESA, INC.
BASIC MARINE SERVICES, INC.
CHAPARRAL SERVICE, INC.
FIRST ENERGY SERVICES COMPANY
GLOBE WELL SERVICE, INC.
JETSTAR ENERGY SERVICES, INC.
JETSTAR HOLDINGS, INC.
JS ACQUISITION LLC
LEBUS OIL FIELD SERVICE CO.
MAVERICK COIL TUBING SERVICES, LLC
MAVERICK SOLUTIONS, LLC
MAVERICK STIMULATION COMPANY, LLC
MAVERICK THRU-TUBING SERVICES, LLC
MCM HOLDINGS, LLC
MSM LEASING, LLC
PERMIAN PLAZA, LLC
PLATINUM PRESSURE SERVICES, INC.
SCH DISPOSAL, L.L.C.
SLEDGE DRILLING CORP.
TAYLOR INDUSTRIES, LLC
THE MAVERICK COMPANIES, LLC
XTERRA FISHING & RENTAL TOOLS CO.
By: /s/ Alan Krenek
Name: Alan Krenek
Title: Senior Vice President, Chief Financial Officer,
Treasurer and Secretary
BASIC ENERGY SERVICES LP, LLC
By: /s/ Jerry Tufly
Name: Jerry Tufly
Title: Sole Manager and President
BASIC ENERGY SERVICES, L.P.
By: BASIC ENERGY SERVICES GP, LLC
its sole general partner
By: /s/ Alan Krenek
Name: Alan Krenek
Title: Senior Vice President, Chief Financial Officer,
Treasurer and Secretary
Exhibit 99.1
Contacts: Alan Krenek,
Chief Financial Officer
Basic Energy Services, Inc.
817-334-4100
Jack Lascar
Dennard ▪ Lascar Associates
713-529-6600
BASIC ENERGY SERVICES ENTERS INTO FORBEARANCE
AGREEMENT AND OBTAINS WAIVERS TO CONTINUE
DELEVERAGING NEGOTIATIONS WITH SECURED LENDERS AND
UNSECURED BONDHOLDERS
FORT WORTH, Texas – September 14, 2016 – Basic Energy Services, Inc. (NYSE: BAS)
(“Basic” or the “Company”) and certain subsidiaries today announced that the Company, its
secured term loan lenders and secured asset-based revolver lenders (collectively, the “Secured
Lenders”), and certain of its unsecured bondholders have taken steps to enable the continuation of
negotiations regarding a deleveraging transaction.
Specifically, the Company has entered into a forbearance agreement with over 81% of the holders
of the 7.75% senior notes due 2019 (the “2019 Notes”) with respect to the previously announced
30-day grace period related to an $18.4 million payment of interest under the 2019 Notes. The
Company has elected not to make the interest payment upon the expiration of the 30-day grace
period. Under the forbearance agreement, the unsecured noteholders have agreed to forbear from
exercising their rights and remedies, including the right to accelerate any indebtedness, through
September 28, 2016 in connection with the interest payment default.
Additionally, the Company’s Secured Lenders have agreed to provide temporary waivers of certain
existing and future defaults under the Term Loan and ABL Facility related, in part, to the missed
interest payment. The forbearance and temporary waivers will provide the Company with
additional flexibility to continue discussions with all its creditors with the objective of improving
Basic’s long-term capital structure.
Roe Patterson, Basic’s President and Chief Executive Officer, stated, “I would like to express our
appreciation to our Secured Lenders and unsecured bondholders for their continued support and
cooperation. The forbearance agreement and temporary waivers will provide additional time to
reach a mutually acceptable financial restructuring plan that provides Basic with a sustainable
capital structure that supports the Company’s long-term business plan and results in long-term
value generation for the benefit of our employees, customers, vendors, and all other stakeholders.”
NEWS RELEASE
FOR IMMEDIATE RELEASE
2
The Company continues to believe that it has ample liquidity at this time to continue efficient and
uninterrupted operations in the ordinary course and anticipates meeting all of its obligations to
suppliers, customers, and employees.
About Basic Energy Services
Basic Energy Services provides well site services essential to maintaining production from the oil
and gas wells within its operating area. The Company employs more than 3,400 employees in
more than 100 service points throughout the major oil and gas producing regions in Texas,
Louisiana, Oklahoma, New Mexico, Arkansas, Kansas, and the Rocky Mountain and Appalachian
regions. Additional information on Basic Energy Services is available on the Company’s website
at www.basicenergyservices.com.
Safe Harbor Statement
This release includes forward-looking statements and projections, made in reliance on the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. Basic has made every
reasonable effort to ensure that the information and assumptions on which these statements and
projections are based are current, reasonable, and complete. However, a variety of factors could
cause actual results to differ materially from the projections, anticipated results or other
expectations expressed in this release, including (i) changes in demand for our services and any
related material impact on our pricing and utilizations rates, (ii) Basic's ability to execute, manage
and integrate acquisitions successfully, (iii) changes in our expenses, including labor or fuel costs
and financing costs, (iv) continued volatility of oil or natural gas prices, and any related changes
in expenditures by our customers, (v) competition within our industry, and (vi) Basic’s ability to
comply with its financial and other covenants and metrics in its debt agreements, as well as any
cross-default provisions. Additional important risk factors that could cause actual results to differ
materially from expectations are disclosed in Item 1A of Basic’s Form 10-K for the year ended
December 31, 2015 and subsequent Form 10-Qs filed with the SEC. While Basic makes these
statements and projections in good faith, neither Basic nor its management can guarantee that
anticipated future results will be achieved. Basic assumes no obligation to publicly update or
revise any forward-looking statements made herein or any other forward-looking statements made
by Basic, whether as a result of new information, future events, or otherwise.
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