Execution Version TEMPORARY LIMITED WAIVER AND CONSENT This TEMPORARY LIMITED WAIVER AND CONSENT (this “Agreement”) is entered into as of September 1, 2016, by and among Basic Energy Services, Inc., as Borrower, the guarantors party hereto (together...
Execution Version
TEMPORARY LIMITED WAIVER AND CONSENT
This TEMPORARY LIMITED WAIVER AND CONSENT (this “Agreement”) is
entered into as of September 1, 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 the Temporary Limited Waiver and Consent on August 31, 2016 (the “Existing
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 Existing 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 “Waived Event of Default”).
C. Any failure of the Borrower and its consolidated Subsidiaries to maintain
unrestricted cash balances and Cash Equivalents of at least $50,000,000 constitutes an Event of
Default under Section 8.01(k) of the Credit Agreement (the “Anticipated Events of Default”).
D. Borrower has requested that Agent and the Lender Parties temporarily waive
during the Temporary Limited Waiver Period (as defined below) the Anticipated Event of
Default.
E. 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 “Specified Default”).
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.
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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 Anticipated Event 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 Temporary Limited Waiver (as defined below), the
Anticipated Event 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) solely with
respect to the Anticipated Event of Default, this Agreement constitutes a notice of the occurrence
of any Default as required by Section 6.03(a) of the Credit Agreement.
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 2.08(d) of the Credit Agreement, interest on the
principal amount of all outstanding Obligations under the Credit Agreement to be calculated
based on the Default Rate or (ii) 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 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 connection with the Existing Waiver, the Required Lenders requested
and the Borrower agreed to pay, effective from and including August 31, 2016, interest on the
principal amount of all outstanding obligations under the Credit Agreement at a fluctuating rate
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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 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 Anticipated Event of Default,
the Waived 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 Anticipated
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) The 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.
(d) 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.
(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 Anticipated Event of Default or
the Waived 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), (iii) the
later of (A) September 13, 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 $45,000,000.
(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; and
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(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.
(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 Anticipated 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) 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.
(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.
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;
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(c) no Event of Default (other than the Anticipated Event of Default and the
Waived Event of Default) or Temporary Limited Waiver Default has occurred or is continuing,
and no Default (other than the Specified Default) has occurred and 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 any Anticipated Event of Default, the
Waived Event of Default or the Specified 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
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
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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
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
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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:
(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 any Anticipated Event of Default, the Waived Event of Default or the
Specified 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) no Event of Default (other than the Anticipated Event of Default and the
Waived Event of Default) or Temporary Limited Waiver Default or Default (other than the
Specified 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.
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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
ADMINISTRATIVE AGENT:
U.S. BANK NATIONAL ASSOCIATION,
as Agent
By:
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SIGNATURE PAGE TO
TEMPORARY LIMITED WAIVER
WEST STREET ENERGY PARTNERS,
L.P., as a Lender
By: Broad Street Energy Advisors, L.L.C., its
General Partner
▇▇▇▇▇▇ CAYMAN L.P., as a Lender
By: Broad Street Energy Advisors, L.L.C., its
General Partner
