Guarantors existing and future indebtedness to the extent of the value of the collateral securing the Notes but junior to other indebtedness that is secured by liens on assets other than
collateral for the Notes to the extent of the value of such assets, and senior to all of the Companys and the Guarantors future subordinated indebtedness.
Pursuant to a collateral rights agreement, the Notes and Guarantees will be secured by first priority liens, subject to limited exceptions, on
the collateral securing the Notes, consisting of substantially all of the property and assets now owned or hereafter acquired by the Company and the Guarantors, except for certain excluded property described in the Indenture.
The foregoing description of the Indenture does not purport to be complete and is subject to and qualified in its entirety by reference to the
complete text of the Indenture, a copy of which is being filed as Exhibit 4.1 hereto and is incorporated herein by reference.
Note
Security Agreement
On October 2, 2018, the Company, the Guarantors and UMB Bank, N.A., as the collateral agent under the
Indenture entered into a Security Agreement (the Note Security Agreement). The collateral under the Note Security Agreement includes (each as defined therein): (a) all Equipment, all Fixtures related to Material Real Property, all
Intellectual Property, all Collateral Accounts; (b) all Investment Property (including Pledged Equity), all Commercial Tort Claims, all Documents, all General Intangibles, all Instruments and all Letter of Credit Rights, in each case, not
constituting ABL Collateral; (c) all Records relating to the foregoing and any and all accessions to, substitutions for and replacements of the foregoing; and (d) all Proceeds, Supporting Obligations and products of the foregoing, and all
collateral security and guarantees given by any person with respect to any of the foregoing.
The foregoing description of the Note
Security Agreement does not purport to be complete and is subject to and qualified in its entirety by reference to the complete text of the Note Security Agreement, a copy of which is being filed as Exhibit 10.2 hereto and is incorporated herein by
reference.
ABL Credit Agreement
On October 2, 2018, the Company replaced its existing Credit and Security Agreement, dated as of September 29, 2017 (as amended,
restated, or otherwise modified, the Prior ABL Credit Agreement) among Basic Energy Receivables, LLC, as borrower, Basic Energy Services, L.P., as initial servicer, the Company, as performance guarantor, UBS AG, Stamford Branch, as
administrative agent and collateral agent, and the lenders party thereto (collectively, the Prior ABL Lenders), by entering into an ABL Credit Agreement (the ABL Credit Agreement) among the Company, as borrower (in such
capacity, the Borrower), Bank of America, N.A., as administrative agent (the Administrative Agent), swing line lender and letter of credit issuer, UBS Securities LLC, as syndication agent, PNC Bank National Association, as
documentation agent and letter of credit issuer, and the other lenders from time to time party thereto (collectively, the New ABL Lenders). Pursuant to the ABL Credit Agreement, the New ABL Lenders have extended to the Borrower a
revolving credit facility in the maximum aggregate principal amount of $150 million, subject to borrowing base capacity (the ABL Facility). The ABL Facility includes borrowing capacity for letters of credit of up to $50 million
in the aggregate, and for borrowings on
same-day
notice under swingline loans subject to a sublimit of the lesser of (a) $15 million and (b) the aggregate commitments of the New ABL Lenders. The ABL
Facility also provides capacity for base rate protective advances up to $10 million at the discretion of the Administrative Agent and provisions relating to overadvances.
Borrowings under the ABL Facility bear interest at a rate per annum equal to an applicable rate, plus, at Borrowers option, either
(a) a base rate or (b) a LIBO rate. The applicable rate is fixed from the closing date to April 1, 2019. After April 1, 2019, the applicable rate is determined by reference to the average daily availability as a percentage of the
borrowing base during the fiscal quarter immediately preceding such applicable quarter.
In addition to paying interest on outstanding
principal under the ABL Facility, the Borrower is required to pay customary commitment and letter of credit fees.