Item 1.01 Entry into a Material Definitive
Agreement.
New Term Loan Facility
On May 3, 2021,
Basic Energy Services, Inc. (the “Company”) entered into that certain Super Priority Credit Agreement (the “Super Priority
Credit Agreement”), among the Company, the lenders party thereto (the “Term Loan Lenders”) and Cantor Fitzgerald Securities,
as administrative agent and collateral agent. The Super Priority Credit Agreement provides for a super priority loan facility consisting
of term loans in a principal amount of $10,000,000 (the “New Term Loan Facility”). The proceeds of the New Term Loan Facility
will be used for working capital and other general corporate purposes and the payment of fees and expenses in connection with the New
Term Loan Facility and the other agreements entered into in connection with the New Term Loan Facility.
The New Term Loan Facility
matures on May 15, 2021; provided that such date may be extended for up to thirty days with the prior written consent of Term Loan Lenders
(other than Defaulting Lenders and Affiliated Lenders (each as defined in the Super Priority Credit Agreement)) holding term loans representing
more than 66 2/3% of the aggregate outstanding amount of the term loans of all the Term Loan Lenders at such time (excluding the term
loans of Defaulting Lenders and Affiliated Lenders).
The New Term Loan Facility
is guaranteed by the Company and each of the current guarantors of the Company’s existing 10.75% Senior Secured Notes due 2023 (the
“Existing Senior Notes”). The Company and the guarantors granted liens on their assets, other than accounts receivable, inventory
and certain related assets, which liens rank senior to the liens securing the Existing Senior Notes and the Senior Secured Promissory
Note (as defined below) pursuant to the terms of an intercreditor agreement between the Agent (as defined below), the collateral agent
with respect to the Existing Senior Notes and Ascribe (as defined below).
At the Company’s election,
loans outstanding under the New Term Loan Facility may be borrowed as either Base Rate Loans or LIBOR Loans (each as defined in the Super
Priority Credit Agreement). Loans outstanding under the New Term Loan Facility accrue interest at (i) the Base Rate plus 10.00% per annum
or (ii) LIBOR plus 11.00% per annum.
The Company may prepay loans
under the Super Priority Credit Agreement at any time, subject to the prior written consent of certain Term Loan Lenders; provided that
the Company may voluntarily prepay loans in whole upon prior written notice to the Administrative Agent so long as the Company simultaneously
prepays in full the aggregate outstanding principal amount of the Existing Senior Notes and the Senior Secured Promissory Note, plus accrued
and unpaid interest thereunder and all other obligations that are due and payable thereunder.
The Super Priority Credit
Agreement contains negative and affirmative covenants (including budget and variance testing), events of default and repayment and prepayment
provisions customarily applicable to super priority facilities of this kind. The Super Priority Credit Agreement contains various restrictive
covenants that may limit the Company’s ability to:
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incur additional indebtedness;
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enter into mergers and similar transactions;
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make or declare dividends;
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engage in any material line of business changes;
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amend, modify, or change the Ascribe Notes (as defined below), the indenture with respect to the Existing Senior Notes and certain other agreements, subject to certain exceptions); and
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engage in certain other transactions.
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These limitations are subject
to a number of important qualifications and exceptions.
The New Term Loan
Facility also contains customary events of default, including among others, nonpayment of principal or interest, material inaccuracy
of representations and failure to comply with covenants. If a bankruptcy event of default occurs, the entire outstanding balance
under the New Term Loan Facility will become immediately due and payable. If any other event of default occurs and is continuing
under the New Term Loan Facility, the administrative agent, in its own discretion or at the direction of a majority of the Term Loan
Lenders, will be able to declare the entire outstanding balance under the New Term Loan Facility to become immediately due and
payable.
The foregoing description
of the Super Priority Credit Agreement does not purport to be complete and is subject to and qualified in its entirety by reference to
the complete text of the Super Priority Credit Agreement, a copy of which is being filed as Exhibit 10.1 hereto and is incorporated herein
by reference.
ABL Forbearance Agreement
As previously disclosed, on
April 14, 2020, the Company and certain of the Company’s subsidiaries entered into a forbearance agreement (the “Forbearance
Agreement”) with Bank of America, N.A., as administrative agent (the “Agent”) and certain lenders holding greater than
a majority of the commitments (collectively, the “Credit Agreement Forbearing Parties”) under that certain Credit Agreement
dated October 2, 2018 (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”) among the Company,
the lenders party thereto, and the Agent.
Pursuant to the Forbearance
Agreement, subject to certain terms and conditions set forth therein, the Credit Agreement Forbearing Parties agreed to temporarily forbear
from exercising any rights or remedies they may have in respect of the event of default described below and certain additional events
of default described therein. The Forbearance Agreement was scheduled to terminate at 5:00 p.m. Central Daylight Savings Time on April
28, 2021 (the “Original Termination Date”), unless extended or certain specified circumstances cause an earlier termination.
On April 28, 2021, the
Company and certain of the Company’s subsidiaries entered into that certain Limited Consent and First Amendment to Forbearance
Agreement (the “Forbearance Amendment”) with the Agent and the Credit Agreement Forbearance Parties. Pursuant to the
Forbearance Amendment, subject to certain terms and conditions set forth therein, the Credit Agreement Forbearing Parties agreed to
(among other things) (i) extend the Original Termination Date to May 15, 2021 (subject to earlier termination events, including if
certain asset sales are not completed) and (ii) consent to incurrence of the Term Loan Facility and the first priority liens on the
collateral described therein.
The above description of the
terms of the Forbearance Amendment does not purport to be complete and is qualified in its entirety by the full text of the Forbearance
Amendment, which is filed as Exhibit 10.2 hereto and is incorporated herein by reference.
Ascribe Notes Forbearance Agreement
As previously disclosed, the
Company has entered into (i) that certain Senior Secured Promissory Note dated as of March 9, 2020 with Ascribe III Investments LLC (“Ascribe”)
as payee (the “Senior Secured Promissory Note”) and (ii) that certain Second Lien Promissory Note dated October 15, 2020 with
Ascribe (the “Second Lien Promissory Note”, together with the Senior Secured Promissory Note, the “Ascribe Notes”).
On May 3, 2021, the Company and Ascribe have entered into a consent letter (the “Ascribe Consent Letter”) pursuant
to which Ascribe agreed to (i) forbear from exercising any rights or remedies they may have in respect of the Company’s failure
to pay interest on the Ascribe Notes from and after the closing date of the Term Loan Facility and (ii) consent to incurrence of the Term
Loan Facility and the first priority liens on the collateral described therein.
The above description of the
terms of the Ascribe Consent Letter does not purport to be complete and is qualified in its entirety by the full text of the Ascribe Consent
Letter, which is filed as Exhibit 10.3 hereto and is incorporated herein by reference.
Third Supplemental Indenture
On May 3, 2021,
the Company entered into a Third Supplemental Indenture to the indenture, dated as of October 2, 2018 (as supplemented by the First Supplemental
Indenture dated as of August 22, 2019 (the “First Supplemental Indenture”) and the Second Supplemental Indenture dated as
of April 1, 2020, (the “Second Supplemental Indenture”), the “Indenture”), by and among the Company, the guarantors
under the Indenture and the Trustee and Collateral Agent (the “Third Supplemental Indenture”). The Third Supplemental Indenture
amends, among other things, certain definitions in the Indenture, the limitation of indebtedness covenant and the limitation on distributions
covenant to facilitate entry into the Super Priority Credit Agreement and related documentation.
The
foregoing description of the Third Supplemental Indenture does not purport to be complete and is qualified in its entirety by reference
to the full text of the Third Supplemental Indenture, a copy of which is filed herewith as Exhibit 4.1 and incorporated herein by reference.