UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

Form 10-K☑ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2016

OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to

Commission file number 001-32693

Basic Energy Services, Inc.(Exact name of registrant as specified in its charter)

Delaware 54-2091194(State or other jurisdiction of

incorporation or organization)(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

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

Title of Class Name of each exchange on which registeredCommon Stock, $0.01 par value per share New York Stock Exchange

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such

shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to

Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive

proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☑ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,”

“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ☐ Accelerated Filer ☑Non-Accelerated filer ☐ (Do not check if a smaller reporting company) Smaller reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑ The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $63,815,657 as of June 30, 2016, the last business day of the registrant’s most

recently completed second fiscal quarter (based on a closing price of $1.68 per share and 37,985,510 shares held by non-affiliates). On December 23, 2016, the old common stock was cancelled, and newshares of common stock were issued, pursuant to the Chapter 11 plan of reorganization.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distributionof securities under a plan confirmed by a court. Yes ☑ No ¨☐

There were 25,998,847 shares of the registrant’s common stock outstanding as of March 30, 2017. DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the registrant’s Annual Meeting of Stockholders (to be filed within 120 days of the close of the registrant’s fiscal year) are incorporated by reference intoPart III.

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BASIC ENERGY SERVICES, INC.

Index to Form 10-K

Part I 4Items 1. and 2. Business and Properties 17Item 1A. Risk Factors 24Item 1B. Unresolved Staff Comments 25Item 3. Legal Proceedings 25Item 4. Mine Safety Disclosures 25Part II 25Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25Item 6. Selected Financial Data 28Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31Item 7A. Quantitative and Qualitative Disclosures About Market Risk 47Item 8. Financial Statements and Supplementary Data 48Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 88Item 9A. Controls and Procedures 88Item 9B. Other Information 88Part III 88Part IV 89Item 15. Exhibits, Financial Statement Schedules 89Item 16. Form 10-K Summary 89

Signatures 90

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CAUTIONARY STATEMENTREGARDING FORWARD-LOOKING STATEMENTS

This annual report contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Actof 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We have based these forward-looking statements largely onour current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subjectto a number of risks, uncertainties and assumptions, including, among other things, the risk factors discussed in Item 1A of this annual report and other factors, most of whichare beyond our control.

The words “believe,” “estimate,” “expect,” “anticipate,” “project,” “intend,” “plan,” “seek,” “could,” “should,” “may,” “potential” and similar expressions are intendedto identify forward-looking statements. All statements other than statements of current or historical fact contained in this annual report are forward-looking statements.Although we believe that the forward-looking statements contained in this annual report are based upon reasonable assumptions, the forward-looking events and circumstancesdiscussed in this annual report may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

Important factors that may affect our expectations, estimates or projections include:

• a decline in, or substantial volatility of, oil and natural gas prices, and any related changes in expenditures by ourcustomers;

• competition within our industry;

• the effects of future acquisitions on our business;

• our access to current or future financing arrangements;

• changes in customer requirements in markets or industries we serve;

• general economic and market conditions;

• our ability to replace or add workers at economic rates; and

• environmental and other governmental regulations.

Our forward-looking statements speak only as of the date of this annual report. Unless otherwise required by law, we undertake no obligation to publicly update orrevise any forward-looking statements, whether as a result of new information, future events or otherwise.

This annual report includes market share data, industry data and forecasts that we obtained from internal company surveys (including estimates based on ourknowledge and experience in the industry in which we operate), market research, consultant surveys, publicly available information, industry publications and surveys. Thesesources include Baker Hughes Incorporated, the Association of Energy Service Companies (“AESC”), and the Energy Information Administration of the U.S. Department ofEnergy (“EIA”). Industry surveys and publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sourcesbelieved to be reliable. Although we believe such information is accurate and reliable, we have not independently verified any of the data from third-party sources cited or usedfor our management’s industry estimates, nor have we ascertained the underlying economic assumptions relied upon therein. Statements as to our position relative to ourcompetitors or as to market share refer to the most recent available data.

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PART I

ITEMS 1. AND 2. BUSINESS AND PROPERTIES General

We provide a wide range of well site services in the United States to oil and natural gas drilling and producing companies, including completion and remedial services,fluid services, well servicing and contract drilling. These services are fundamental to establishing and maintaining the flow of oil and natural gas throughout the productive lifeof a well. Our broad range of services enables us to meet multiple needs of our customers at the well site. We were organized in 1992 as Sierra Well Service, Inc., a Delawarecorporation, and in 2000 we changed our name to Basic Energy Services, Inc. References to “Basic,” the “Company,” “we,” “us” or “our” in this report refer to Basic EnergyServices, Inc., and, unless the context otherwise suggests, its wholly owned subsidiaries and its controlled subsidiaries.

Our operations are managed regionally and are concentrated in major United States onshore oil and natural gas producing regions located in Texas, New Mexico,Oklahoma, Arkansas, Kansas, Louisiana, Wyoming, North Dakota, and the Rocky Mountain and Appalachian regions. Our operations are focused on liquids-rich basins thathave historically exhibited strong drilling and production economics in recent years as well as natural gas-focused shale plays characterized by prolific reserves. Specifically,we have a significant presence in the Permian Basin and the Bakken, Eagle Ford, Haynesville and Marcellus shales. We provide our services to a diverse group of over 2,000 oiland gas companies.

Our current operating segments are Completion and Remedial Services, Fluid Services, Well Servicing, and Contract Drilling. These segments were selected based onmanagement’s resource allocation and performance assessment in making decisions regarding the Company. The following is a description of our business segments:

• Completion and Remedial Services. Our completion and remedial services segment (34% of our revenues in 2016) operates our fleet of pumping units, anarray of specialized rental equipment and fishing tools, coiled tubing units, snubbing units, thru-tubing, air compressor packages specially configured for underbalanceddrilling operations, cased-hole wireline units and nitrogen units. The largest portion of this business segment consists of pumping services focused on cementing,acidizing and fracturing services in niche markets.

• Fluid Services. Our fluid services segment (35% of our revenues in 2016) utilizes our fleet of 940 fluid service trucks and related assets, includingspecialized tank trucks, storage tanks, water wells, disposal facilities, water treatment and construction and other related equipment. These assets provide, transport, storeand dispose of a variety of fluids, as well as provide well site construction and maintenance services. These services are required in most workover, completion andremedial projects and are routinely used in daily producing well operations.

• Well Servicing. Our well servicing segment (30% of our revenues in 2016) operates our fleet of 421 well servicing rigs and related equipment. This businesssegment encompasses a full range of services performed with a mobile well servicing rig, including the installation and removal of downhole equipment and eliminationof obstructions in the well bore to facilitate the flow of oil and natural gas. These services are performed to establish, maintain and improve production throughout theproductive life of an oil and natural gas well and to plug and abandon a well at the end of its productive life. Our well servicing equipment and capabilities also facilitatemost other services performed on a well.

• Contract Drilling. Our contract drilling segment (1% of our revenues in 2016) operates our fleet of 12 drilling rigs and related equipment. We use theseassets to penetrate the earth to a desired depth and initiate production from a well.

Recent DevelopmentsOn October 25, 2016, Basic and certain of its subsidiaries (collectively with Basic, the “Company”) filed voluntary petitions (the “Bankruptcy Petitions,” and the cases

commenced thereby, the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for theDistrict of Delaware (the “Court”) to pursue a balance sheet restructuring pursuant to a Joint Prepackaged Chapter 11 Plan of the Debtors. The Debtor's Chapter 11 Case wasjointly administered under the caption In re Basic Energy Services, Inc. et al. (Case No. 16-12320). No trustee was appointed, and the Debtors continued to operate theirbusinesses as “debtors in possession” under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Court. Basiccontinued its operations without interruption during the Chapter 11 Cases. On December 9, 2016, the Court entered an order (the “Confirmation Order”) approving the FirstAmended Joint Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and its Affiliated Debtors (as confirmed, the “Prepackaged Plan”). On December 23, 2016 (the“Effective Date”), the Prepackaged Plan became effective pursuant to its terms and the Debtors emerged from their Chapter 11 Cases.

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The restructuring strengthened Basic's liquidity and capital. Debt levels were reduced by approximately $813.4 million, including accrued interest amounts, relievingnear-term funding stress. In accordance with accounting standards for companies that have emerged from bankruptcy (sometimes called “fresh start accounting”), our balancesheet at December 31, 2016 reflects our assets and liabilities at fair value, and a new equity value was established. Pursuant to the Prepackaged Plan all old common stock ofBasic was cancelled, and approximately 26.0 million shares of Successor Common Stock of Basic were issued to eligible debt holders, including in connection with a rightsoffering, to management in connection with awards under a new management incentive plan, and to prior stockholders. With our improved liquidity and capital level, ourfinancial condition changed significantly, and the information contained in this annual report about Basic following our emergence from bankruptcy on the Effective Date,including the financial statements and other information for the year ended December 31, 2016, which reflects fresh start accounting, is not comparable with informationprovided for prior periods.

Further discussion of these events and resultant financial statement impacts are located in Item 7. Management’s Discussion and Analysis of Financial Condition andResults of Operations, and Item 8. Financial Statements and Supplementary Data in Notes 1 through 4.

Please see Part II Item 8. Note 19. Business Segment Information for further financial information about our segments.

Our Competitive StrengthsWe believe that the following competitive strengths currently position us well within our industry:

Extensive Domestic Footprint in the Most Prolific Basins. Our operations are focused on liquids-rich basins located in the United States that have exhibited strongdrilling and production economics in recent years as well as natural gas-focused shale plays characterized by prolific reserves. Specifically, we have a significant presence in thePermian Basin and the Bakken, Eagle Ford, Haynesville and Marcellus shales. We operate in states that accounted for approximately 99% of U.S. onshore oil and natural gasproduction. We believe that our operations are located in the most active U.S. well services markets, as we currently focus our operations on onshore domestic oil and naturalgas production areas that include both the highest concentration of existing oil and natural gas production activities and the largest prospective acreage for new drilling activity.We believe our extensive footprint allows us to offer our suite of services to more than 2,000 customers who are active in those areas and allows us to redeploy equipmentbetween markets as activity shifts, reducing the risk that a basin-specific slowdown will have a disproportionate impact on our cash flows and operational results.

Diversified Service Offering for Further Revenue Growth and Reduced Volatility. We believe our range of well site services provides us a competitive advantageover smaller companies that typically offer fewer services. Our experience, equipment and network of 135 area offices position us to market our full range of well site servicesto our existing customers. By utilizing a wider range of our services, our customers can use fewer service providers, which enables them to reduce their administrative costs andsimplify their logistics. Furthermore, offering a broader range of services allows us to capitalize on our existing customer base and management structure to grow within existingmarkets, generate more business from existing customers, and increase our operating profits as we spread our overhead costs over a larger revenue base.

Significant Market Position. We maintain a leading market share for each of our lines of business within our core operating areas: the Permian Basin of West Texasand Southeast New Mexico; the Gulf Coast region of South Texas and Louisiana; the Central region of North Texas, Oklahoma, Arkansas, Louisiana and Kansas; California;and the Rocky Mountain and Appalachian regions. Our goal is to be one of the top two providers of the services we provide in each of our core operating areas. Our position ineach of these markets allows us to expand the range of services performed on a well throughout its life, such as drilling, maintenance, workover, stimulation, completion andplugging and abandonment services.

Modern and Competitive Fleet. We operate a modern fleet matched to the needs of the local markets in each of our business segments. We are driven by a desire tomaintain one of the most efficient, reliable and safest fleets of equipment in the country, and we have an established program to routinely monitor and evaluate the condition ofour equipment. We selectively refurbish equipment to maintain the quality of our service and to provide a safe working environment for our personnel. We believe that bymaintaining a modern and active asset base, we are better able to earn our customers’ business while reducing the risk of potential downtime.

Decentralized Experienced Management with Strong Corporate Infrastructure. Our corporate group is responsible for maintaining a unified infrastructure to supportour diversified operations through standardized financial and accounting, safety, environmental and maintenance processes and controls. Below our corporate level, we operatea decentralized operational organization in which our nine regional or division managers are responsible for their operations, including asset management, cost control, policycompliance and training and other aspects of quality control. With the majority having over 30 years of industry experience, each regional manager has extensive knowledge ofthe customer base, job requirements and working conditions in each local market. Below our nine regional or division managers, our area managers are directly responsible forcustomer

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relationships, personnel management, accident prevention and equipment maintenance, the key drivers of our operating profitability. This management structure allows us tomonitor operating performance on a daily basis, maintain financial, accounting and asset management controls, integrate acquisitions, prepare timely financial reports andmanage contractual risk.

Our Business StrategyThe key components of our business strategy include:Establishing and Maintaining Leadership Positions in Core Operating Areas. We strive to establish and maintain market leadership positions within our core

operating areas. To achieve this goal, we maintain close customer relationships, seek to expand the breadth of our services and offer high quality services and equipment thatmeet the scope of customer specifications and requirements. In addition, our leading presence in our core operating areas facilitates employee retention and attraction, a keyfactor for success in our business and provides us with brand recognition that we intend to utilize in creating leading positions in new operating areas.

Selectively Expanding Within Our Regional Markets. We intend to continue strengthening our presence within our existing geographic footprint through internalgrowth and acquisitions of businesses with strong customer relationships, well-maintained equipment and experienced and skilled personnel. We typically enter into newmarkets through the acquisition of businesses with strong management teams that will allow us to expand within these markets. Management of acquired companies oftenremain with us and retain key positions within our organization, which enhances our attractiveness as an acquisition partner. We have a record of successfully implementing thisstrategy. By concentrating on targeted expansion in areas in which we already have a meaningful presence, we believe we maximize the returns on expansion capital whilereducing downside risk.

Developing Additional Service Offerings Within the Well Servicing Market. We intend to continue broadening the portfolio of services we provide to our clients byutilizing our well servicing infrastructure. A customer typically begins a new maintenance or workover project by securing access to a well servicing rig, which stays on site forthe duration of the project. As a result, our rigs are often the first equipment to arrive at the well site and typically the last to leave, providing us the opportunity to offer ourcustomers other complementary services. We believe the fragmented nature of the well servicing market creates an opportunity to sell more services to our core customers andto expand our total service offering within each of our markets. We have expanded our suite of services available to our customers and increased our opportunities to cross-sellnew services to our core well servicing customers through acquisitions and internal growth. We expect to continue to develop or selectively acquire capabilities to provideadditional services to expand and further strengthen our customer relationships.

Pursuing Growth Through Selective Capital Deployment. We intend to continue growing our business through selective acquisitions, continuing a new buildprogram and/or upgrading our existing assets. Our capital investment decisions are determined by an analysis of the projected return on capital employed of each of thosealternatives. Acquisitions are evaluated for “fit” with our area and regional operations management and are reviewed by corporate level financial, equipment, safety andenvironmental specialists to ensure consideration is given to identified risks. We also evaluate the cost to acquire existing assets from a third party, the capital required to buildnew equipment and the point in the oil and natural gas commodity price cycle. Based on these factors, we make capital investment decisions that we believe will support ourlong-term growth strategy and these decisions may involve a combination of asset acquisitions and the purchase of new equipment.

General Industry Overview

Our business is influenced substantially by expenditures by oil and gas companies. Exploration and production spending is categorized as either an operatingexpenditure or a capital expenditure. Activities designed to add hydrocarbon reserves are classified as capital expenditures, while those associated with maintaining oraccelerating production are categorized as operating expenditures.

Because existing oil and natural gas wells require ongoing spending to maintain production, expenditures by oil and gas companies for the maintenance of existingwells historically have been relatively stable and predictable. In contrast, capital expenditures by oil and gas companies for exploration and drilling are more directly influencedby current and expected oil and natural gas prices and generally reflect the volatility of commodity prices. We believe our focus on production and workover activity partiallyinsulates our financial results from the volatility of the active drilling rig count. However, significantly lower commodity prices have impacted production and workoveractivities due to both customer cash liquidity limitations and well economics for these service activities.

Capital expenditures by oil and gas companies tend to be relatively sensitive to volatility in oil or natural gas prices because project decisions are tied to a return oninvestment spanning a number of years. As such, capital expenditure economics often require the use of commodity price forecasts which may prove inaccurate in the amountof time required to plan and execute a capital expenditure project (such as the drilling of a deep well). When commodity prices are depressed for even a short period of time,capital expenditure projects are routinely deferred until prices return to an acceptable level.

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In contrast, both mandatory and discretionary operating expenditures are substantially more stable than exploration and drilling expenditures. Mandatory operatingexpenditure projects involve activities that cannot be avoided in the short term, such as regulatory compliance, safety, contractual obligations and projects to maintain the welland related infrastructure in operating condition (for example, repairs to a central tank battery, downhole pump, saltwater disposal system or gathering system). Discretionaryoperating expenditure projects may not be critical to the short-term viability of a lease or field, but these projects are relatively insensitive to commodity price volatility.Discretionary operating expenditure work is evaluated according to a simple short-term payout criterion that is far less dependent on commodity price forecasts.

Demand for services offered by our industry is a function of our customers’ willingness to make operating and capital expenditures to explore for, develop and producehydrocarbons in the United States. Our customers’ expenditures are affected by both current and expected levels of oil and natural gas prices. Natural gas prices have remainedat lower levels since 2009, which has resulted in low levels of activity in our natural gas-driven markets. Oil prices increased during the first half of 2011 primarily due topolitical and economic instability in several oil producing countries and remained relatively stable until the fourth quarter of 2014, when oil prices declined due to oversupplyconcerns worldwide and continued to decline to low levels throughout 2015 and 2016. Oil prices increased gradually in the fourth quarter of 2016, upon decisions by SaudiArabia and OPEC to limit production.

The table below sets forth average closing prices for the Cushing WTI Spot Oil Price and the Henry Hub Natural Gas Spot Price since 2012:

Cushing WTI Spot Henry Hub Gas

Period Oil Price ($/Bbl.) Spot Price ($/Mcf.)

1/1/2012 $ 94.11 $ 2.751/1/2013 97.91 3.731/1/2014 93.26 4.391/1/2015 48.69 2.631/1/2016 43.14 2.52Closing Price at 12/31/16 53.75 3.71

Source: U.S. Department of Energy.

Energy prices drive demand for exploration and production, which in turn drives demand for our products. The following table shows the rig count for oil and naturalgas drilling rigs since 2012:

Average Rig Count

Period Oil Natural Gas

1/1/2012 1,359 5561/1/2013 1,373 3831/1/2014 1,527 3331/1/2015 754 2281/1/2016 408 10012/31/2016 525 132

Data for each of the foregoing rig counts are based on information from the Baker Hughes rig count.

Overview of Our Segments and ServicesCompletion and Remedial Services Segment

Our completion and remedial services segment provides oil and natural gas operators with a package of services that include the following:• pumping services, such as cementing, acidizing, fracturing, nitrogen and pressure testing;• rental and fishing tools;• coiled tubing;• snubbing services;• thru-tubing; and• underbalanced drilling in low pressure and fluid sensitive reservoirs.

This segment operates 281 pumping units, with approximately 444,000 horsepower of capacity, to conduct a variety of services designed to stimulate oil and naturalgas production or to enable cement slurry to be placed in or circulated within a well. We also operate 47 air compressor packages, including foam circulation units, forunderbalanced drilling, 36 snubbing units and 16 coiled tubing units for cased-hole measurement and pipe recovery services.

Just as a well servicing rig is required to perform various operations over the life cycle of a well, there is a similar need for equipment capable of pumping fluids intothe well under varying degrees of pressure. During the drilling and completion phase, the well bore is lined with large diameter steel pipe called casing. Casing is cemented intoplace by circulating slurry into the annulus created between the pipe and the rock wall of the well bore. The cement slurry is forced into the well by pumping equipment locatedon the surface. Cementing services are also utilized over the life of a well to repair leaks in the casing, to close perforations that are no longer productive and ultimately to“plug” the well at the end of its productive life.

A hydrocarbon reservoir is essentially an interval of rock that is saturated with oil and/or natural gas, usually in combination with water. Three primary factorsdetermine the productivity of a well that intersects a hydrocarbon reservoir: porosity (the percentage of the reservoir volume represented by pore space in which thehydrocarbons reside), permeability (the natural propensity for the flow of hydrocarbons toward the well bore), and “skin” (the degree to which the portion of the reservoir inclose proximity to the well bore has experienced reduced permeability as a result of exposure to drilling fluids or other contaminants). Well productivity can be increased byartificially improving either permeability or skin through stimulation methods described below.

Permeability can be increased through the use of fracturing methods by which a reservoir is subjected to fluids pumped into it under high pressure. This pressurecreates stress in the reservoir and causes the rock to fracture, thereby creating additional channels through which hydrocarbons can flow. In most cases, sand or another form ofproppant is pumped with the fluid as a means of holding open the newly created fractures.

The most common means of reducing near-well bore damage, or skin, is the injection of a highly reactive solvent (such as hydrochloric acid) solution into the areawhere the hydrocarbons enter the well. This solution has the effect of dissolving contaminants that have accumulated and are restricting the flow of hydrocarbons. This processis generically known as acidizing.

After a well is drilled and completed, the casing may develop leaks as a result of abrasions from production tubing, exposure to corrosive elements or inadequatesupport from the original attempt to cement the casing in place. When a leak develops, it is necessary to place specialized equipment into the well and to pump cement in such a

way as to seal the leak, a process known as “squeeze” cementing. The following table sets forth the type, number and location of the completion and remedial services equipment that we operated at December 31, 2016:

Market Area

Mid- Rocky Permian Ark-La-Tex Continent Gulf Coast Mountain Basin Appalachia Total

Pumping Units 9 158 3 52 59 — 281Air/Foam Packages — 12 — 24 11 — 47Snubbing Units 16 9 — — — 11 36Rental and Fishing Tool Stores — 6 1 1 8 — 16Coiled Tubing Units 2 — 1 12 1 — 16

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Our pumping services business focuses primarily on lower horsepower cementing, acidizing and fracturing services markets. Currently, there are several pumpingcompanies that provide their services on a national basis. For the most part, these companies have concentrated their assets in markets characterized by complex work withhigher horsepower requirements. This has created an opportunity in the markets for pumping services in mature areas with less complex characteristics and lower horsepowerrequirements. We, along with a number of smaller, regional companies, have concentrated our efforts on these markets.

The level of activity of our pumping services business is tied to drilling and workover activity. The bulk of pumping work is associated with cementing casing in placeas the well is drilled or pumping fluid that stimulates production from the well during the completion phase. Pumping service work is awarded based on a combination of priceand expertise.

Our rental and fishing tool business provides a range of specialized services and equipment that is utilized on a non-routine basis for both drilling and well servicingoperations. Drilling and well servicing rigs are equipped with an array of tools to complete routine operations under normal conditions for most projects in the geographic areain which they are employed. When downhole problems develop with drilling or servicing operations or conditions require non-routine equipment, our customers will usuallyrely on a provider of rental and fishing tools to augment equipment that is provided with a typical drilling or well servicing rig package.

The term “fishing” applies to a wide variety of downhole operations designed to correct a problem that has developed during the drilling or servicing of a well. Theproblem most commonly involves equipment that has become lodged in the well and cannot be removed without special equipment. Our technicians utilize tools that arespecifically suited to retrieve, or “fish,” and remove the trapped equipment, allowing our customers to resume operations.

Coiled tubing services involve the use of a continuous metal pipe spooled on a large reel for oil and natural gas well interventions, including wellbore maintenance,nitrogen services, thru-tubing services, and formation stimulation using acid and other chemicals.

Our snubbing service business utilizes specialized equipment to run or remove pipe and other associated downhole tools into a wellbore. This process is accomplishedwith a wellbore having surface pressure or with the anticipation of surface pressure. Our snubbing services are utilized for both routine and non-routine workover, completionand remedial activities.

Fluid Services SegmentOur fluid services segment provides oilfield fluid supply, transportation, storage and construction services. These services are required in most workover, completion

and remedial projects and are routinely used in daily producing well operations. These services include:• the transportation of fluids used in drilling and workover operations and of salt water produced as a by-product of oil and natural gas production;• the sale and transportation of fresh and brine water used in drilling and workover activities;• the rental of portable fracturing tanks and test tanks used to store fluids on well sites;• the recycling and treatment of wastewater, including produced water and flowback, to be reused in the completion and production process;• the operation of company-owned fresh water and brine source wells and of non-hazardous wastewater disposal wells; and• the preparation, construction and maintenance of access roads, drilling locations, and production facilities.

This segment utilizes our fleet of fluid service trucks and related assets, including specialized tank trucks, portable storage tanks, water wells, disposal facilities andrelated equipment. The following table sets forth the type, number and location of the fluid services equipment that we operated at December 31, 2016:

Market Area

Rocky Permian Mountain Ark-La-Tex Basin Mid-Continent Gulf Coast Total

Fluid Service Trucks 131 117 457 83 152 940Salt Water Disposal Wells 5 24 32 13 12 86Fresh/Brine Water Stations 2 — 43 — 6 51Fluid Storage Tanks 631 753 1,263 296 511 3,454

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Requirements for minor or incidental fluid services are usually purchased on a “call out” basis and charged according to a published schedule of rates. Larger projects,such as servicing the requirements of a multi-well drilling program or fracturing program, generally involve a bidding process. We compete for both services on a call out basisand for multi-well contract projects.

We provide a full array of fluid sales, transportation, storage, treatment and disposal services required on most workover, completion and remedial projects. Ourbreadth of capabilities in this segment allows us to serve as a one-stop source of equipment and services for our customers. Many of our smaller competitors in this segment canprovide some, but not all, of the equipment and services required by oil and gas operators, requiring them to use several companies to meet their requirements and increasingtheir administrative burden.

Our fluid services segment has a base level of business volume related to the regular maintenance of oil and natural gas wells. Most oil and natural gas fields produceresidual salt water in conjunction with oil or natural gas. Fluid service trucks pick up this fluid from tank batteries at the well site and transport it to a salt water disposal well forinjection. This type of regular maintenance work must be performed if a well is to remain active. Transportation and disposal of produced water is considered a low valueservice by most operators, and it is difficult for us to command a premium over rates charged by our competition. Our ability to outperform competitors in this segment dependson our ability to achieve significant economies relating to logistics, specifically the proximity between the areas where salt water is produced and the areas where our company-owned disposal wells are located. We operate salt water disposal wells in most of our markets, and our ownership of these disposal wells eliminates the need to pay third partiesa fee for disposal.

Workover, completion and remedial activities also provide the opportunity for higher operating margins from tank rentals and fluid sales. Drilling and workover jobstypically require fresh or brine water for drilling mud or circulating fluid used during the job. Completion and workover procedures often also require large volumes of water forfracturing operations, which involves stimulating a well hydraulically to increase production. Spent mud and flowback fluids from drilling and completion activities arerequired to be transported from the well site to an approved disposal facility. Water treatment solutions are also utilized by customers to treat produced water and flowback, inorder to be reused during the production and completion process.

Our competitors in the fluid services industry are mostly small, regionally focused companies. There are currently no companies that have a dominant position on anationwide basis. The level of activity in the fluid services industry is comprised of a relatively stable demand for services related to the maintenance of producing wells and ahighly variable demand for services used in the drilling and completion of new wells. As a result, the level of onshore drilling activity significantly affects the level of activity inthe fluid services industry. While there are no industry-wide statistics, the Baker Hughes Land Drilling Rig Count is an indirect indication of demand for fluid services because itdirectly reflects the level of onshore drilling activity.

Fluid Services. At December 31, 2016, we owned and operated 940 fluid service trucks equipped with an average fluid hauling capacity of up to 150 barrels apiece.Each fluid service truck is equipped to pump fluids from or into wells, pits, tanks and other storage facilities. The majority of our fluid service trucks are also used to transportwater to fill fracturing tanks on well locations, including fracturing tanks provided by us and others, to transport produced salt water to disposal wells, including injection wellsowned and operated by us, and to transport drilling and completion fluids to and from well locations. In conjunction with the rental of our fracturing tanks, we mainly use ourfluid service trucks to transport water for use in fracturing operations. Following completion of fracturing operations, our fluid service trucks are used to transport the flowbackproduced as a result of the fracturing operations from the well site to disposal wells. Fluid service trucks are usually provided to oilfield operators within a 50-mile radius of ournearest yard.

Salt Water Disposal Well Services. At December 31, 2016, we owned 86 salt water disposal facilities. Disposal wells are permitted to dispose of salt water andincidental non-hazardous oil and natural gas wastes. Our fluid service trucks frequently transport the fluids that are disposed of in these salt water disposal wells. Our disposalwells have an average permitted injection capacity of over 6,000 barrels per day per well and are strategically located in close proximity to our customers’ producing wells.Most oil and natural gas wells produce varying amounts of salt water throughout their productive lives. In the states in which we operate, oil and natural gas wastes and saltwater produced from oil and natural gas wells are required by law to be disposed of in authorized facilities, including permitted salt water disposal wells. Injection wells arelicensed by state authorities and are completed in permeable formations below the fresh water table. We maintain separators at most of our disposal wells, allowing us tosalvage residual crude oil that we later sell for our account.

Fresh and Brine Water Stations. Our network of fresh and brine water stations, particularly in the Permian Basin where surface water is normally not available, isused to supply water necessary for the drilling and completion of oil and natural gas wells. Our strategic locations, in combination with our other fluid handling services, give usa competitive advantage over other service providers in those areas in which these other companies cannot provide these services.

Fluid Storage Tanks. Our fluid storage tanks can store up to 500 barrels of fluid and are used by oilfield operators to store various fluids at the well site, includingfresh water, brine and acid for fracturing jobs, flowback, temporary production and

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mud storage. We transport the tanks on our trucks to well locations that are usually within a 50-mile radius of our nearest yard. Fracturing tanks are used during all phases of thelife of a producing well. We typically rent fluid services tanks at daily rates for a minimum of three days. A typical fracturing operation can be completed within four days using5 to 50 fracturing tanks.

Water Treatment Services. We utilize a number of water treatment methods in order to treat produced water and flowback that is transported to one of severaltreatment locations throughout our geographic footprint. Treated water is then sold to customers to be reused for fracturing or other oil and gas-related uses on wells. Wetypically charge for these services on a per-barrel basis.

Construction Services. We utilize a fleet of power units, including dozers, trenchers, motor graders, backhoes and other heavy equipment used in road construction.In addition, we own rock pits in some markets in our Rocky Mountain operations to ensure a reliable source of rock to support our construction activities. Contracts for well siteconstruction services are normally awarded by our customers on the basis of competitive bidding and may range in scope from several days to several months in duration.

Well Servicing SegmentOur well servicing segment encompasses a full range of services performed with a mobile well servicing rig, also commonly referred to as a workover rig, and

ancillary equipment. Our rigs and personnel provide the means for hoisting equipment and tools into and out of the well bore, and our well servicing equipment and capabilitiesalso facilitate most other services performed on a well. Our well servicing segment services, which are performed to maintain and improve production throughout theproductive life of an oil and natural gas well, include:

• maintenance work involving removal, repair and replacement of down-hole equipment and returning the well to production after these operations arecompleted;• hoisting tools and equipment required by the operation into and out of the well, or removing equipment from the well bore, to facilitate specialized productionenhancement and well repair operations performed by other oilfield service companies; and• plugging and abandonment services when a well has reached the end of its productive life.

Our well servicing segment also includes the manufacturing and sale of new workover rigs through our wholly-owned subsidiary, Taylor Industries, LLC, which weformed in connection with the acquisition of a rig manufacturing business in 2010.

Regardless of the type of work being performed on the well, our personnel and rigs are often the first to arrive at the well site and the last to leave. We typically chargeour customers an hourly rate for these services, which rate varies based on a number of considerations including market conditions in each region, the type of rig and ancillaryequipment required, and the necessary personnel.

Our fleet included 421 well servicing rigs as of December 31, 2016, including 223 new builds since October 2004 and 85 rebuilds since the beginning of 2009. Ourwell servicing rigs operate from facilities in Texas, Wyoming, Oklahoma, North Dakota, New Mexico, Louisiana, Colorado, California, Arkansas, Utah, Montana, Kansas,Kentucky, Pennsylvania and West Virginia. Our well servicing rigs are mobile units that normally operate within a radius of approximately 75 to 100 miles from theirrespective bases.

The following table sets forth the location, characteristics and number of the well servicing rigs that we operated at December 31, 2016. We categorize our rig fleet bythe rated capacity of the mast, which indicates the maximum weight that the rig is capable of lifting. The maximum weight our rigs are capable of lifting is the limiting factor inour ability to provide these services.

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Market Area

Rated Permian Gulf Mid - Rocky Rig Type Capacity Basin Coast Ark-La-Tex Continent Mountain California Appalachia Inactive Total

Swab N/A — — 3 3 2 — — 3 11Light Duty < 90 tons — — — — — 1 — 10 11MediumDuty

> 90 <125tons 67 19 21 26 40 10 — 77 260

Heavy Duty > 125 tons 76 17 5 4 12 — 6 15 13524-Hour > 125 tons — — — — — — — 4 4

Total 143 36 29 33 54 11 6 109 421

We operate a total of 421 well servicing rigs, one of the largest fleets in the United States. Based on the most recent publicly available information, five of ourcompetitors operate more than 100 well servicing rigs: Key Energy Services, Inc., C&J Energy Services, Ltd., Superior Energy Services, Inc., Forbes Energy Services Ltd., and Pioneer Energy Services Corp.

Maintenance. Regular maintenance is required throughout the life of a well to sustain optimal levels of oil and natural gas production. Regular maintenancecurrently comprises the largest portion of our work in this segment, and because ongoing maintenance spending is required to sustain production, we generally experiencerelatively stable demand for these services. We provide well service rigs, equipment and crews to our customers for these maintenance services. Maintenance services are oftenperformed on a series of wells in proximity to each other and consist of routine mechanical repairs necessary to maintain production, such as repairing inoperable pumpingequipment in an oil well or replacing defective tubing in a natural gas well, and removing debris such as sand and paraffin from the well. Other services include pulling therods, tubing, pumps and other downhole equipment out of the well bore to identify and repair a production problem. These downhole equipment failures are typically caused bythe repetitive pumping action of an oil well. Corrosion, water cut, grade of oil, sand production and other factors can also result in frequent failures of downhole equipment.

The need for maintenance activity does not directly depend on the level of drilling activity, although it is somewhat impacted by short-term fluctuations in oil andnatural gas prices. Demand for our maintenance services is driven primarily by the production requirements of local oil or natural gas fields and is therefore affected by changesin the total number of producing oil and natural gas wells in our geographic service areas.

Our regular well maintenance services involve relatively low-cost, short-duration jobs which are part of normal well operating costs. Well operators cannot delay allmaintenance work without a significant impact on production. Operators may, however, choose to shut in producing wells temporarily when oil or natural gas prices are too lowto justify additional expenditures, including maintenance.

Workover. In addition to periodic maintenance, producing oil and natural gas wells occasionally require major repairs or modifications called workovers, which aretypically more complex and more time consuming than maintenance operations. Workover services include extensions of existing wells to drain new formations either throughperforating the well casing to expose additional productive zones not previously produced, deepening well bores to new zones or the drilling of lateral well bores to improvereservoir drainage patterns. Our workover rigs are also used to convert former producing wells to injection wells through which water or carbon dioxide is then pumped into theformation for enhanced oil recovery operations. Workovers also include major subsurface repairs such as repair or replacement of well casing, recovery or replacement oftubing and removal of foreign objects from the well bore. These extensive workover operations are normally performed by a workover rig with additional specialized auxiliaryequipment, which may include rotary drilling equipment, mud pumps, mud tanks and fishing tools, depending upon the particular type of workover operation. Most of our wellservicing rigs are designed to perform complex workover operations. A workover may require a few days to several weeks and additional auxiliary equipment. The demand forworkover services is sensitive to oil and natural gas producers’ intermediate and long-term expectations for oil and natural gas prices. As oil and natural gas prices increase, thelevel of workover activity tends to increase as oil and natural gas producers seek to increase output by enhancing the efficiency of their wells.

New Well Completion. New well completion services involve the preparation of newly drilled wells for production. The completion process may involve selectivelyperforating the well casing in the productive zones to allow oil or natural gas to flow into the well bore, stimulating and testing these zones and installing the production stringand other downhole equipment.

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We provide well service rigs to assist in this completion process. Newly drilled wells are frequently completed by well servicing rigs to minimize the use of higher cost drillingrigs in the completion process. The completion process typically requires a few days to several weeks, depending on the nature and type of the completion, and requireadditional auxiliary equipment. Accordingly, completion services require less well-to-well mobilization of equipment and normally provide higher operating margins thanregular maintenance work.

The demand for completion services is directly related to drilling activity levels, which are sensitive to expectations relating to and changes in oil and natural gasprices.

Plugging and Abandonment. Well servicing rigs are also used in the process of permanently closing oil and natural gas wells no longer capable of producing ineconomic quantities. Plugging and abandonment work can be performed with a well servicing rig along with wireline and cementing equipment; however, this service istypically provided by companies that specialize in plugging and abandonment work. Many well operators bid this work on a “turnkey” basis, requiring the service company toperform the entire job, including the sale or disposal of equipment salvaged from the well as part of the compensation received, and comply with state regulatory requirements.Plugging and abandonment work can provide favorable operating margins and is less sensitive to oil and natural gas prices than drilling and workover activity since welloperators must plug a well in accordance with state regulations when it is no longer productive. We perform plugging and abandonment work throughout our core areas ofoperation in conjunction with equipment provided by other service companies.

Contract Drilling SegmentOur contract drilling segment employs drilling rigs and related equipment to penetrate the earth to a desired depth and initiate production.We own and operate 12 land drilling rigs, which are currently stationed in the Permian Basin of Texas and New Mexico. A land drilling rig consists of engines, a

drawworks, a mast, pumps to circulate the drilling fluid (mud) under various pressures, blowout preventers, drill string and related equipment. The engines power the differentpieces of equipment, including a rotary table or top drive that turns the drill string, causing the drill bit to bore through the subsurface rock layers. These jobs are typically bid by“daywork” contracts, in which an agreed upon rate per day is charged to the customer, or “footage” contracts, in which an agreed upon rate per the number of feet drilled ischarged to the customer. The demand for drilling services is highly dependent on the availability of new drilling locations available to well operators, as well as sensitivity toexpectations relating to and changes in oil and natural gas prices.

PropertiesOur principal executive offices are located at 801 Cherry Street, Suite 2100, Fort Worth, Texas 76102. We currently conduct our business from 135 area offices, 82 of

which we own and 53 of which we lease. Each office typically includes a yard, administrative office and maintenance facility. Of our 135 area offices, 84 are located in Texas,ten are in New Mexico, nine in Oklahoma, eight are in North Dakota and seven are in Colorado, six are in Wyoming, Louisiana, Kansas, Utah and California each havetwo, and Montana, Pennsylvania and Arkansas each have one.

Customers We serve numerous major and independent oil and gas companies that are active in our core areas of operations. During 2016, no single customer comprised over 10%

of our total revenues. The majority of our business is with independent oil and gas companies. In the current market conditions, the loss of any current material customers couldhave an adverse effect on our business until the equipment is redeployed.

Operating Risks and InsuranceOur operations are subject to hazards inherent in the oil and natural gas industry, such as accidents, blowouts, explosions, craters, fires and oil spills that can cause:• personal injury or loss of life;• damage to or destruction of property, equipment and the environment; and• suspension of operations.

In addition, claims for loss of oil and natural gas production and damage to formations can occur in the well services industry. If a serious accident were to occur at alocation where our equipment and services are being used, it could result in our being named as a defendant in lawsuits asserting large claims.

Because our business involves the transportation of heavy equipment and materials, we may also experience traffic accidents which may result in spills, propertydamage and personal injury.

Despite our efforts to maintain high safety standards, we from time to time have suffered accidents in the past and anticipate that we could experience accidents in thefuture. In addition to the property and personal losses from these accidents, the frequency and severity of these incidents affect our operating costs and insurability and ourrelationships with customers, employees and regulatory agencies. Any significant increase in the frequency or severity of these incidents, or the general level of damage awards,could adversely affect the cost of, or our ability to obtain, workers’ compensation and other forms of insurance, and could have other material adverse effects on our financialcondition and results of operations.

Although we maintain insurance coverage of types and amounts that we believe to be customary in the industry, we are not fully insured against all risks, eitherbecause insurance is not available or because of the high premium costs. We do maintain employer’s liability, pollution, cargo, umbrella, comprehensive commercial generalliability, workers’ compensation and limited physical damage insurance. There can be no assurance, however, that any insurance obtained by us will be adequate to cover anylosses or liabilities, or that this insurance will continue to be available or available on terms which are acceptable to us. Liabilities for which we are not insured, or which exceedthe policy limits of our applicable insurance, could have a material adverse effect on us.

CompetitionOur competition includes small regional contractors as well as larger companies with international operations. We believe our largest well servicing competitors are

Key Energy Services, Inc., Superior Energy Services Inc., C&J Energy Services Inc., Forbes Energy Services Ltd., and Pioneer Energy Services Corp. All five are publiccompanies that operate in most of the large oil and natural gas producing regions in the United States. They each have centralized management teams that direct their operations

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and decision-making primarily from corporate and regional headquarters. In addition, because of their size, they market a large portion of their work to the major oil and gascompanies.

We differentiate ourselves from our major competition by our operating philosophy. We operate a decentralized organization, where local, experienced managementteams are largely responsible for sales and operations and developing stronger relationships with our customers at the field level. We target areas that are attractive toindependent oil and gas operators who in our opinion tend to be more aggressive in spending, less focused on price and more likely to award work based on performance. Weconcentrate on providing services to a diverse group of large and small independent oil and gas companies. These independents typically are relationship driven, make decisionsat the local level and are willing to pay higher rates for services. We have been successful using this business model and believe it will enable us to continue to grow ourbusiness.

Safety ProgramOur business involves the operation of heavy and powerful equipment which can result in serious injuries to our employees and third parties and substantial damage to

property. We have comprehensive safety and training programs designed to minimize accidents in the workplace and improve the efficiency of our operations. In addition, manyof our larger customers now place greater emphasis on safety and quality management programs of their contractors. We believe that these factors will gain further importancein the future. We have directed substantial resources toward employee safety and quality management training programs as well as our employee review process. While ourefforts in these areas are not unique, we believe many competitors, and particularly smaller contractors, have not undertaken similar training programs for their employees.

We believe our approach to safety management is consistent with our decentralized management structure. Company-mandated policies and procedures provide theoverall framework to ensure our operations minimize the hazards inherent in our work and are intended to meet regulatory requirements, while allowing our operations to satisfycustomer-mandated policies and local needs and practices.

Environmental Regulation and Climate ChangeEnvironment, Health and Safety Regulation, Including Climate Change

Our operations are subject to stringent federal, state and local laws regulating the discharge of materials into the environment or otherwise relating to health and safetyor the protection of the environment. Numerous governmental agencies, such as the U.S. Environmental Protection Agency, commonly referred to as the “EPA,” and analogousstate agencies issue regulations to implement and enforce these laws, which often require stringent and costly compliance measures. These laws and regulations may, amongother things, require the acquisition of permits; govern the amounts and types of substances that may be released into the environment in connection with oil and gas drilling;restrict the way we handle or dispose of our materials and wastes; limit or prohibit construction or drilling activities in sensitive areas such as wetlands, wilderness areas or areasinhabited by endangered or threatened species; or require investigatory and remedial actions to mitigate pollution conditions. Failure to comply with these laws and regulationsmay result in the assessment of substantial administrative, civil and criminal penalties, as well as the possible issuance of injunctions limiting or prohibiting our activities. Inaddition, some laws and regulations relating to protection of the environment may, in certain circumstances, impose liability for environmental damages and cleanup costswithout regard to negligence or fault. Strict adherence with these regulatory requirements increases our cost of doing business and consequently affects our profitability. Webelieve that we are in substantial compliance with current applicable environmental, health and safety laws and regulations and that continued compliance with existingrequirements will not have a material adverse impact on our operations. However, environmental laws and regulations have been subject to frequent changes over the years, andthe imposition of more stringent requirements could have a material adverse effect upon our capital expenditures, earnings or our competitive position. Below is a discussion ofthe principal environmental laws and regulations that relate to our business.

The Comprehensive Environmental Response, Compensation and Liability Act, referred to as “CERCLA” or the Superfund law, and comparable state laws imposeliability, potentially without regard to fault or legality of the activity at the time, on certain classes of persons that are considered to be responsible for the release of a hazardoussubstance into the environment. These persons include the current or former owner or operator of the disposal site or sites where the release occurred and companies thatdisposed or arranged for the disposal of hazardous substances that have been released at the site. Under CERCLA, these persons may be subject to joint and several liabilitiesfor the costs of investigating and cleaning up hazardous substances that have been released into the environment, for damages to natural resources and for the costs of somehealth studies. In addition, neighboring landowners and other third parties may file claims for personal injury and property damage allegedly caused by hazardous substances orother pollutants released into the environment.

The federal Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, referred to as “RCRA,” regulates the management anddisposal of solid and hazardous waste. Some wastes associated with the exploration and production of oil and natural gas are exempted from the most stringent regulation incertain circumstances, such as drilling fluids, produced waters and other wastes associated with the exploration, development or production of oil and natural gas.

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However, these wastes and other wastes may be otherwise regulated by the EPA or state agencies. Moreover, in the ordinary course of our operations, industrial wastes such aspaint wastes and waste solvents may be regulated as hazardous waste under RCRA or considered hazardous substances under CERCLA.

We currently own or lease, and have in the past owned or leased, a number of properties that have been used as service yards in support of oil and natural gasexploration and production activities. Although we have utilized operating and disposal practices that we considered standard in the industry at the time, there is the possibilitythat repair and maintenance activities on rigs and equipment stored in these service yards, as well as fluids stored at these yards, may have resulted in the disposal or release ofhydrocarbons or other wastes on or under these yards or other locations where these wastes have been taken for disposal. In addition, we own or lease properties that in the pastwere operated by third parties whose operations were not under our control. These properties and the hydrocarbons or wastes disposed thereon may be subject to CERCLA,RCRA and analogous state laws. Under these laws, we could be required to remove or remediate previously disposed wastes or property contamination.

In the course of our operations, some of our equipment may be exposed to naturally occurring radiation associated with oil and natural gas deposits, and this exposuremay result in the generation of wastes containing naturally occurring radioactive materials, or “NORM.” NORM wastes exhibiting trace levels of naturally occurring radiation inexcess of established state standards are subject to special handling and disposal requirements, and any storage vessels, piping and work area affected by NORM may be subjectto remediation or restoration requirements. Because many of the properties presently or previously owned, operated or occupied by us have been used for oil and natural gasproduction operations for many years, it is possible that we may incur costs or liabilities associated with elevated levels of NORM.

Our operations are also subject to the federal Clean Water Act and analogous state laws. Under these laws, permits must be obtained to discharge pollutants intoregulated surface or subsurface waters. Spill prevention, control and countermeasure requirements under federal law require appropriate operating protocols, includingcontainment berms and similar structures, to help prevent the contamination of regulated waters in the event of a petroleum hydrocarbon spill, rupture or leak. In addition, theClean Water Act and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities orduring construction activities. This program requires covered facilities to obtain individual permits, or seek coverage under a general permit. Additionally, permits for dischargesof storm water runoff may be required for certain of our properties.

The federal Clean Water Act and the federal Oil Pollution Act of 1990 contain numerous requirements relating to the prevention of and response to oil spills intoregulated waters, and require some owners or operators of facilities that store or otherwise handle oil to prepare and implement spill prevention, control and countermeasureplans, also referred to as “SPCC plans,” relating to the possible discharge of oil into regulated waters.

Our underground injection operations are subject to the federal Safe Drinking Water Act, referred to as the “SDWA,” as well as analogous state and local laws and

regulations including the Underground Injection Control (“UIC”) program, which includes requirements for permitting, testing, monitoring, record keeping and reporting ofinjection well activities. The federal Energy Policy Act of 2005 amended the UIC provisions to exclude certain hydraulic fracturing activities from the definition of“underground injection” under certain circumstances. However, the repeal of this exclusion has been advocated by certain advocacy organizations and others in the public.Legislation regulating underground injection has been introduced at the state level. For example at the state level, several states in which we operate, including Wyoming,Texas, Colorado and Oklahoma, have adopted regulations requiring operators to disclose certain information regarding hydraulic fracturing fluids. In addition, public concernshave recently been raised regarding the disposal of hydraulic fluid in injection wells. Partly in response to public concerns, the Texas Railroad Commission, referred toas (“RRC”), amended its existing oil and gas disposal well regulations to require seismic activity data in permit applications and provisions to authorize the impositionof certain limitations on existing wells if seismic activity increases in the area of an injection well, including a temporary injection ban. Our operations employ hydraulicfracturing techniques to stimulate natural gas production from unconventional geological formations, which entails the injection of pressurized fracturing fluids (consisting ofwater, sand and certain chemicals) into a well bore. Our hydraulic fracturing activities are principally in Texas, Oklahoma, Kansas and Colorado. Our operations also involvethe disposal of produced salt water by underground injection. The substantial majority of our saltwater disposal wells are located in Texas and are regulated by the RRC. Wealso operate salt water disposal wells in New Mexico, Oklahoma, Arkansas, Louisiana and North Dakota and are subject to similar regulatory controls in those states. Inaddition, in response to reports tying the increase in seismic activity in Oklahoma to the injection of produced water, the Oklahoma Corporation Commission (the “OCC”) hasimplemented a variety of measures, including the adoption of the National Academy of Science’s “traffic light system”, pursuant to which the agency reviews new disposal wellapplications and may restrict operations at existing wells. Beginning in 2013, the OCC has ordered the reduction of disposal volumes into the Arbuckle formation and morerecently OCC directed the shut in of a number of disposal wells due to increased earthquake activity in the Arbuckle formation. To date, none of our wells have been restricted.Regulations in the states in which we operate require us to obtain a permit from the applicable regulatory agencies to operate each of our underground salt water disposal wells.We believe that we have obtained the necessary permits from these agencies for each of our underground injection

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wells and that we are in substantial compliance with permit conditions and commission rules. Nevertheless, these regulatory agencies have the general authority to suspend ormodify one or more of these permits if continued operation of one of our underground injection wells is likely to result in pollution of freshwater, substantial violation of permitconditions or applicable rules, or leaks to the environment or other conditions such as earthquakes. Although we monitor the injection process of our wells, any leakage from thesubsurface portions of the injection wells could cause degradation of fresh groundwater resources, potentially resulting in cancellation of operations of a well, issuance of finesand penalties from governmental agencies, incurrence of expenditures for remediation of the affected resource and imposition of liability by third parties for property damagesand personal injuries. In addition, our sales of residual crude oil collected as part of the saltwater injection process could impose liability on us in the event that the entity towhich the oil was transferred fails to manage the residual crude oil in accordance with applicable environmental health and safety laws.

We maintain insurance against some risks associated with environmental liabilities that may occur as a result of well service activities. However, there can be noassurance this insurance will cover all potential losses, that insurance will continue to be commercially available or this insurance will be available at premium levels that justifyits purchase by us. The occurrence of a significant event that is not fully insured or indemnified against could have a material adverse effect on our financial condition andoperations.

We are also subject to the requirements of the federal Occupational Safety and Health Act, known as (“OSHA,”) and comparable state statutes that regulate theprotection of the health and safety of workers. In addition, the OSHA hazard communication standard requires that information be maintained about hazardous materials used orproduced in operations and that this information be provided to employees, state and local government authorities and the public.

We are also subject to the requirements of the Federal Motor Carrier Safety Regulations (“DOT – FMCSA”) of the U.S. Department of Transportation (“DOT”) andcomparable state statutes that regulate commercial motor vehicle operations. In addition, we are also subject to the Pipeline and Hazardous Materials Safety Administration“DOT-PHMSA” and comparable state statutes that regulate hazardous materials shipments.

Responding to scientific studies that have suggested that emissions of gases, commonly referred to as “greenhouse gases,” including gases associated with the oil andgas sector such as carbon dioxide, methane, and nitrous oxide among others, may be contributing to global warming and other environmental effects, the EPA has begun toadopt regulations to reduce emissions of greenhouse gases. Any such regulations may have the potential to affect our business, customers or the energy sector generally. Inaddition, the United States has been involved in international negotiations regarding greenhouse gas reductions under the United Nations Framework Convention on ClimateChange (“UNFCCC”). The U.S. was among 195 nations that signed an international accord in December 2015, the so-called Paris Agreement, which became effective in 2016,with the objective of limiting greenhouse gas emissions.

A number of states, individually or in regional cooperation, have also imposed restrictions on greenhouse gas emissions under various policies and approaches,including establishing a cap on emissions, requiring efficiency measures, or providing incentives for pollution reduction, use of renewable energy, or use of fuels with lowercarbon content.

These federal, regional and state measures generally apply to industrial sources, including facilities in the oil and gas sector, and could increase the operating andcompliance costs of our services and facilities. International accords such as the Paris Agreement may result in additional regulations to control greenhouse gas emissions.These regulations could also adversely affect market demand or pricing for our services, by affecting the price of, or reducing the demand for, fossil fuels or providingcompetitive advantages to competing fuels and energy sources. The potential increase in the costs of our operations could include costs to operate and maintain our equipmentor facilities install new emission controls on our equipment or facilities, acquire allowances to authorize our greenhouse gas emissions, pay taxes related to our greenhouse gasemissions, or administer and manage a greenhouse gas emissions program. While we may be able to include some or all of such increased costs in the rates charged for ourservices, such recovery of costs is uncertain and may depend on events beyond our control, including the provisions of any final regulations. In addition, changes in regulatorypolicies that result in a reduction in the demand for hydrocarbon products that are deemed to contribute to greenhouse gases, or restrictions on their use, may reduce demand forour services.

There is considerable debate as to global warming and the environmental effects of greenhouse gas emissions and associated consequences affecting global climate,oceans, and ecosystems. As a commercial enterprise, we are not in a position to validate or repudiate the existence of global warming or various aspects of the scientific debate.However, if global warming is occurring, it could have an impact on our operations. For example, our operations in low lying areas such as the coastal regions of Louisiana andTexas may be at increased risk due to flooding, rising sea levels or disruption of operations from more frequent and severe weather events. Facilities in areas with limited wateravailability may be impacted if droughts become more frequent or severe. Changes in climate or weather may hinder exploration and production activities or increase ordecrease the cost of production of oil and natural gas resources and consequently affect demand for our field services. Changes in climate or weather

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may also affect consumer demand for energy or alter the overall energy mix. However, we are not in a position to predict the precise effects of global warming on energymarkets or the physical effects of global warming. We are providing this disclosure based on publicly available information on the matter.

EmployeesAs of December 31, 2016, we employed approximately 3,800 people, with approximately 80% employed on an hourly basis. Our future success will depend partially

on our ability to attract, retain and motivate qualified personnel. We are not a party to any collective bargaining agreements, and we consider our relations with our employeesto be satisfactory.

Executive Officers of the Registrant

Our executive officers as of March 31, 2017 and their respective ages and positions are as follows:

Name Age Position

T. M. “Roe” Patterson 42 President, Chief Executive Officer and DirectorAlan Krenek 61 Senior Vice President, Chief Financial Officer, Treasurer and SecretaryJames F. Newman 52 Senior Vice President — Region OperationsWilliam T. Dame 56 Vice President — Pumping ServicesDouglas B. Rogers 53 Vice President — MarketingEric Lannen 51 Vice President — Human ResourcesLanny T. Poldrack 49 Vice President — Central Region and Tubular DivisionJohn Cody Bissett 42 Vice President, Controller and Chief Accounting OfficerBrett J. Taylor 44 Vice President — Equipment and Manufacturing

Set forth below is the description of the backgrounds of our executive officers.

T. M. “Roe” Patterson (President, Chief Executive Officer and Director) has 22 years of related industry experience. He was named our President and ChiefExecutive Officer and appointed as a Director in September 2013. Since joining Basic in 2006, he served in positions of increasing responsibility: as our Senior Vice Presidentand Chief Operating Officer from April 2011 until September 2013, as a Senior Vice President from September 2008 until April 2011 and as a Vice President of various groupswithin Basic from February 2006 until September 2008. Prior to joining Basic, he was president of his own manufacturing and oilfield service company, TMP Companies, Inc.,from 2000 to 2006. He was a Contracts/Sales Manager for the Permian Division of Patterson Drilling Company from 1996 to 2000. He was an Engine Sales Manager for WestTexas Caterpillar from 1995 to 1996. Mr. Patterson graduated with a B.S. degree in Biology from Texas Tech University.

Alan Krenek (Senior Vice President, Chief Financial Officer, Treasurer and Secretary) has 29 years of related industry experience. He has been our Vice President,Chief Financial Officer and Treasurer since January 2005. He became Senior Vice President and Secretary in May 2006. Prior to joining Basic, he held various financialmanagement positions at Landmark Graphics Corp., Noble Corporation and Pool Energy Services Company. Mr. Krenek graduated with a B.B.A. degree in Accounting fromTexas A&M University and is a Certified Public Accountant.

James F. Newman (Senior Vice President — Regional Operations) has 32 years of related industry experience and has been our Senior Vice President, Region

Operations since November 2013. He previously served as our Group Vice President — Permian Business Unit from April 2011 until September 2013 and has been a GroupVice President since September 2008. Prior to joining Basic, he co-founded Triple N Services in 1986 and served as its President through May 2008. He initially served Basicas an Area Manager in the plugging and abandonment operations. Mr. Newman is a registered Professional Engineer and is active in the Society of Petroleum Engineers. Mr.Newman graduated with a B.S. in Petroleum Engineering from Colorado School of Mines.

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William T. Dame (Vice President — Pumping Services) has 36 years of related industry experience. Mr. Dame joined Basic in 2003 and has served as our VicePresident — Pumping Services since 2006. He previously served as our Vice President — PPW and RAFT Divisions from 2005 to 2006 and as a regional vice president from2004 through 2005. Mr. Dame began his career in 1981 with Halliburton. From 1987 to 1997, he served as a vice president of Fleet Cementers, Inc., and from 1997 to 2003, heworked in various operational management positions at Plains Energy, Precision Drilling and New Force Energy Services. Mr. Dame attended Tarleton State University.

Douglas B. Rogers (Vice President — Marketing) has 34 years of related industry experience. He joined Basic in 2007 and serves as Vice President — Marketing afterserving as Vice President-Contracts for the Drilling Division. Mr. Rogers was Vice President- Rocky Mountain Division for Patterson - UTI Drilling Company from March2003 to June 2007. He also served as Western Division Sales Manager for Ambar Lonestar Fluid Services, a division of Patterson - UTI Drilling Company, from 1998 to 2003.He began his career in 1983 with Permian Servicing Company, where he managed well servicing operations. He continued in that capacity through Permian ServicingCompany’s mergers with Xpert Well Service and Pride Petroleum Service until joining Zia Drill/Nova Mud in March 1997. Mr. Rogers graduated with a B.A. degree fromEastern New Mexico University.

Eric Lannen (Vice President — Human Resources) has been a Vice President since August 2015. Eric Lannen has more than 25 years of Human Resourcesexperience in the oil & gas, engineering & construction, defense & government services and the technology industries, as well as more than 15 years of experience in HRleadership roles. Prior to joining Basic, Mr. Lannen served as Senior Vice President, Human Resources for Dyncorp International and Vice President of Human Resources atMcDermott International. Mr. Lannen’s prior experience includes: talent acquisition leader for IBM growth markets across five continents; leading Human Resources for theGovernment Services Division of Kellogg Brown & Root (KBR); and several HR positions at Halliburton Company. Mr. Lannen graduated from Texas A&M University with aBachelor of Science degree.

Lanny T. Poldrack (Vice President — Central Region and Tubular Division) has 30 years of related industry experience. He has served as our Vice President — Safetyand Operations Support since April 2011. From April 2009 to April 2011, he served as a Corporate Marketing Representative based in Houston, Texas. Prior to joining Basic,he spent 13 years at Cudd Energy Services where he held various technical sales and sales management positions for both well intervention and live well service divisions, thelast 4 years of which he served as Business Development Manager for Cudd Well Control for both domestic and international operations in U.S., Canadian, Latin America,European, Middle Eastern and South East Asian markets. He began his oilfield career in West Texas as a technical field representative for Weatherford International,specializing in fishing and rental tools and hydraulic BOP systems. Mr. Poldrack graduated with an applied science degree from Odessa Junior College.

John Cody Bissett (Vice President, Controller and Chief Accounting Officer) has 18 years of related industry experience. He was appointed Basic’s Vice President,Controller and Chief Accounting Officer in March 2012. Mr. Bissett previously served as Basic’s Corporate Controller from July 2008 to March 2012 and as the Director ofFinancial Reporting from December 2007 to July 2008. Prior to joining Basic, Mr. Bissett was the Controller of Cap Rock Energy from November 2006 through December2007, and previously held various roles in the accounting and finance function of Sirius Computer Solutions and the audit practice of KPMG LLP. Mr. Bissett graduated with anM.B.A. and a B.B.A. in Accounting from Angelo State University and is a Certified Public Accountant.

Brett J. Taylor (Vice President — Manufacturing and Equipment) has 24 years of related industry experience. He has been our Vice President of Manufacturing andEquipment since June 2013. Prior to joining Basic, he was President of Taylor Industries, LLC in Tulsa, Oklahoma from 2010 to 2013. From 2009 to 2010, he served asExecutive Vice President of Sales and Marketing at Serva Group Manufacturing. Before that, Mr. Taylor held positions of increasing responsibilities at Taylor Industries overan 11-year span. His tenure at Taylor included the role of Consultant, President of Sales from 2008 to 2009, President of Taylor from 2003 to 2008, General Manager & VicePresident of Business Development from 2001 to 2003, and Sales and Marketing Manager from 1997 to 1999. Mr. Taylor graduated with a Bachelor of Business AdministrationDegree from the University of Oklahoma.

Additional InformationWe make available free of charge on our website, www.basicenergyservices.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on

Form 8-K and amendments to those reports filed or furnished pursuant to the Exchange Act, as soon as reasonably practicable after we electronically file such information with,or furnish it to, the SEC. These documents are also available on the SEC’s website at www.sec.gov, or you may read and copy any materials that we file with or furnish to theSEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington D.C. 20549. The information on our website is not, and shall not be deemed to be, a part of thisannual report on Form 10-K or incorporated into any of our other filings with the SEC.

We have a Code of Conduct that applies to all of our directors, officers and employees. The Code of Conduct is available publicly on our website atwww.basicenergyservices.com. Any waivers granted to directors or executive officers and any material amendments to our Code of Conduct will be posted promptly on ourwebsite and/or disclosed in a Current Report on Form 8-K.

The certifications by our Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are filed as exhibits to thisAnnual Report on Form 10-K. We have also filed with the New York Stock Exchange the most recent Annual CEO Certification as required by Section 303A.12(a) of the NewYork Stock Exchange Listed Company Manual.

ITEM 1A. RISK FACTORS The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained

in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that wecurrently deem to be immaterial, may also impair or adversely affect our business, results of operation, financial condition and prospects.

Risks Relating to Our BusinessOur business depends on domestic spending by the oil and natural gas industry, and this spending and our business has been in the past, and may in the future be,

adversely affected by industry and financial market conditions that are beyond our control.

We depend on our customers’ willingness to make operating and capital expenditures to explore for, develop and produce oil and natural gas in the United States.Customers’ expectations for lower market prices for oil and natural gas, as well as the availability of capital for operating and capital expenditures, may cause them to curtailspending, thereby reducing demand for our services and equipment.

Industry conditions are influenced by numerous factors over which we have no control, such as the supply of and demand for oil and natural gas, domestic andworldwide economic conditions, political instability in oil and natural gas producing countries and merger and divestiture activity among oil and gas producers. The volatility ofthe oil and natural gas industry and the consequent impact on exploration and production activity could adversely impact the level of drilling and workover activity by some ofour customers. This reduction may cause a decline in the demand for our services or adversely affect the price of our services. In addition, reduced discovery rates of new oiland natural gas reserves in our market areas also may have a negative long-term impact on our business, even in an environment of stronger oil and natural gas prices, to theextent existing production is not replaced and the number of producing wells for us to service declines.

Deterioration in the global economic environment commencing in the latter part of 2008 and continuing throughout 2009 caused the oilfield services industry to cycleinto a downturn due to weakened demand. The industry returned to higher activity levels in 2011 and remained higher during the first half of 2012, before another downturn inthe second half of 2012, affecting natural gas prices in particular. The industry pricing remained relatively stable through the middle of 2014. However, beginning in the secondhalf of 2014, oil prices declined substantially from historical highs and have continued to decline through the first half of 2016. Prices gradually increased in late 2016, butremain significantly lower than the peak of prices in 2014. Oil and gas prices may remain depressed for the foreseeable future.

Limitations on the availability of capital, or higher costs of capital, for financing expenditures may cause oil and natural gas producers to make further reductions tocapital budgets in the future even if oil or natural gas prices increase from current levels. Any such cuts in spending will curtail drilling programs as well as discretionaryspending on well services, which may result in a reduction in the demand for our services, the rates we can charge and our utilization. In addition, certain of our customers couldbecome unable to pay their suppliers, including us. Any of these conditions or events could adversely affect our operating results.

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If oil and natural gas prices remain volatile, or if oil or natural gas prices remain low or decline further, the demand for our services could be adversely affected.The demand for our services is primarily determined by current and anticipated oil and natural gas prices and the related general production spending and level of

drilling activity in the areas in which we have operations. Volatility or weakness in oil prices or natural gas prices (or the perception that oil prices or natural gas prices willdecrease) affects the spending patterns of our customers and may result in the drilling of fewer new wells or lower production spending on existing wells. This, in turn, couldresult in lower demand for our services and may cause lower rates and lower utilization of our well service equipment. If oil prices or natural gas prices continue to remain lowor decline further, or if there is a reduction in drilling activities, the demand for our services and our results of operations could be materially and adversely affected.

Prices for oil and natural gas historically have been extremely volatile and are expected to continue to be volatile. The Cushing WTI Spot Oil Price averaged $93.26,$48.69 and $43.14 per barrel in 2014, 2015 and 2016, respectively. The Cushing WTI oil prices have declined from over $107 per barrel in June 2014 to $54 per barrel onDecember 31, 2016. The Henry Hub Natural Gas Spot Price averaged $4.39, $2.63 and $2.52 per Mcf for 2014, 2015 and 2016, respectively.

Competition within the well services industry may adversely affect our ability to market our services.

The well services industry is highly competitive and fragmented and includes numerous small companies capable of competing effectively in our markets on a localbasis, as well as several large companies that possess substantially greater financial and other resources than we do. Our larger competitors’ greater resources could allow thosecompetitors to compete more effectively than we can. The amount of equipment available may exceed demand, which could result in active price competition. Many contractsare awarded on a bid basis, which may further increase competition based primarily on price. In addition, adverse market conditions lower demand for well servicing equipment,which results in excess equipment and lower utilization rates. If adverse oil and natural gas market conditions persist or deteriorate further, our utilization rates may decline.

We may require additional capital in the future. We cannot assure you that we will be able to generate sufficient cash internally or obtain alternative sources of capitalon favorable terms, if at all. If we are unable to fund capital expenditures, our business may be adversely affected.

While reducing capital expenditures during 2016 based on industry conditions, we anticipate we will need to make substantial capital investments in the future topurchase additional equipment to expand our services, refurbish our well servicing rigs and replace existing equipment including idled equipment brought back into service asactivity levels improved. For the year ended December 31, 2015, we invested approximately $53.9 million in cash for capital expenditures, excluding acquisitions. For the yearended December 31, 2016, we invested approximately $32.7 million in cash for capital expenditures, excluding acquisitions. For 2017, we have currently budgeted$115.0 million for capital expenditures including capital lease, excluding acquisitions. Historically, we have financed these investments through internally generated funds, debtand equity offerings, our capital lease program and borrowing under a senior credit facility. Please read Item 7. “Management’s Discussion and Analysis of Financial Conditionand Results of Operation - Liquidity and Capital Resources” for more information.

Our significant capital investments require cash that we could otherwise apply to other business needs. However, if we do not incur these expenditures while ourcompetitors make substantial fleet investments, our market share may decline and our business may be adversely affected. In addition, if we are unable to generate sufficientcash internally or obtain alternative sources of capital to fund our proposed capital expenditures and acquisitions, take advantage of business opportunities or respond tocompetitive pressures, it could materially adversely affect our results of operations, financial condition and growth. If we raise additional funds by issuing equity securities,dilution to existing stockholders may result. Adverse changes in the capital markets could make it difficult to obtain additional capital or obtain it at attractive rates.

Our future financial results could be adversely impacted by asset impairments or other charges.We have recorded goodwill impairment charges and asset impairment charges in the past. We periodically evaluate our long-lived assets, including our property and

equipment, and intangible assets. In performing these assessments, we project future cash flows on a discounted basis for goodwill, and on an undiscounted basis for other long-lived assets, and compare these cash flows to the carrying amount of the related assets. These cash flow projections are based on our current operating plans, estimates andjudgmental assumptions. We perform the assessment of potential impairment on our goodwill and indefinite-lived intangible assets at least annually in the fourth quarter, ormore often if events and circumstances warrant. We perform the assessment of potential impairment for our property and equipment whenever facts and circumstances indicatethat the carrying value of those assets may not be recoverable due to various external or internal factors. If we determine that our estimates of future cash flows were inaccurateor our actual results are materially different from what we have predicted, we could record additional impairment charges in future periods, which could have a material adverseeffect on our financial position and results of operations.

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We have operated at a loss in the past, and there is no assurance of our profitability in the future.Historically, we have experienced periods of low demand for our services and have incurred operating losses. In the future, we may not be able to reduce our costs,

increase our revenues, or reduce our debt service obligations sufficient to achieve or maintain profitability and generate positive operating income. Under such circumstances,we may incur further operating losses and experience negative operating cash flow.

Our indebtedness could restrict our operations and make us more vulnerable to adverse economic conditions.

Pursuant to the Prepackaged Plan, effective on December 23, 2016, we amended our Revolving Credit Facility to reduce our borrowing capacity thereunder to $75.0million. As of December 31, 2016, we had no borrowings and $51.6 million of letters of credit outstanding under our $75.0 million revolving credit facility, giving us $23.4million of available borrowing capacity. Also on December 23, 2016, we amended our term loan credit agreement (the ”Term Loan Agreement”, and together with theRevolving Credit Facility, the “Credit Agreements”), and as of December 31, 2016, the aggregate principal amount of the loans thereunder was $164.2 million. In connectionwith the exchange of pre-petition term loans for new loans on the Effective Date in accordance with the Prepackaged Plan, the lenders under the Term Loan Agreement have noobligations to advance or make additional funds available to us under the Term Loan Agreement. For the year ended December 31, 2016, we made cash interest paymentstotaling $49.6 million.

Our current and future indebtedness could have important consequences. For example, it could:

• impair our ability to make investments and obtain additional financing for working capital, capital expenditures, acquisitions or other general corporatepurposes;

• limit our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to make principal andinterest payments on our indebtedness;

• make us more vulnerable to a downturn in our business, our industry or the economy in general as a substantial portion of our operating cash flow will berequired to make principal and interest payments on our indebtedness, making it more difficult to react to changes in our business and in industry and market conditions;

• limit our ability to obtain additional financing that may be necessary to operate or expand our business;

• put us at a competitive disadvantage to competitors that have less debt; and

• increase our vulnerability to interest rate increases to the extent that we incur variable rate indebtedness.

If we are unable to generate sufficient cash flow or are otherwise unable to obtain the funds required to make principal and interest payments on our indebtedness, or ifwe otherwise fail to comply with the various covenants in instruments governing any existing or future indebtedness, we could be in default under the terms of such instruments.In the event of a default, the holders of our indebtedness could elect to declare all the funds borrowed under those instruments to be due and payable together with accrued andunpaid interest, secured lenders could foreclose on any of our assets securing their loans and we or one or more of our subsidiaries could be forced into bankruptcy orliquidation. If our indebtedness is accelerated, or we enter into bankruptcy, we may be unable to pay all of our indebtedness in full. Any of the foregoing consequences couldrestrict our ability to grow our business and cause the value of our common stock to decline.

Our Credit Agreements impose restrictions on us that may affect our ability to successfully operate our business.

Our Credit Agreements impose limitations on our ability to take various actions, such as:

• limitations on the incurrence of additional indebtedness;

• restrictions on mergers, sales or transfers of assets without the lenders’ consent; and

• limitations on dividends and distributions.

In addition, our Revolving Credit Facility requires us to maintain certain financial ratios and to satisfy certain financial conditions, some of which become morerestrictive over time and may require us to reduce our debt or take some other action in order to comply with them. The failure to comply with any of these financial conditions,including the financial ratios or covenants, would cause a default under our Revolving Credit Facility. A default under any of our indebtedness, if not waived, could result in theacceleration of such indebtedness or other indebtedness, in which case the debt would become immediately due and payable. In addition, a default or acceleration of any of ourindebtedness under our Credit Agreements could result in a default under or acceleration of other indebtedness with cross-default or cross-acceleration provisions. In the eventof any acceleration of our indebtedness, we may not be able to pay our debt or borrow sufficient funds to refinance it, and any holders of secured indebtedness may seek toforeclose on the assets securing such indebtedness. Even if new financing is available, it may not be available on terms that are acceptable to us. These restrictions could alsolimit our ability to obtain future financings, make needed capital expenditures, withstand a downturn in our business or the economy in general, or otherwise conduct necessarycorporate activities. We also may be prevented from taking advantage of business opportunities that arise because of the limitations imposed on us by

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the restrictive covenants under our Revolving Credit Facility or existing limitations on the incurrence of additional indebtedness, including in connection with acquisitions.Please read Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Revolving CreditFacility” for a discussion of our Credit Agreements.

Our actual financial results after emergence from our Chapter 11 Cases may not be comparable to our projections filed with the Bankruptcy Court in the courseof our Chapter 11 Cases, and will not be comparable to our historical financial results as a result of the implementation of our Prepackaged Plan and the transactionscontemplated thereby, as well as our adoption of fresh start accounting following emergence.

We filed with the Bankruptcy Court projected financial information to demonstrate to the Bankruptcy Court the feasibility of our Prepackaged Plan and our ability tocontinue operations following our emergence from the Chapter 11 Cases. Those projections were prepared solely for the purpose of the Chapter 11 Cases and have not been,and will not be, updated on an ongoing basis and should not be relied upon by investors. At the time they were prepared, the projections reflected numerous assumptionsconcerning our anticipated future performance with respect to then prevailing and anticipated market and economic conditions that were and remain beyond our control and thatmay not materialize. Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risksand the assumptions underlying the projections and/or valuation estimates may prove to be wrong in material respects. Actual results will likely vary significantly from thosecontemplated by the projections. As a result, investors should not rely on those projections.

Additionally, in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification No. 852 - Reorganizations, we will applyfresh start accounting in our financial statements commencing with our financial statements as of and for the year ended December 31, 2016. We expect that this will impactmaterially our 2016 operating results, as certain pre-bankruptcy debts were discharged in accordance with the Prepackaged Plan immediately prior to our emergence frombankruptcy, and our assets and liabilities were adjusted to their fair values upon emergence. As a result, our financial information subsequent to emergence from bankruptcywill not be comparable to our financial statements prior to emergence

Our operations are subject to inherent risks, including operational hazard and cyber attacks. These risks may be self-insured, or may not be fully covered under ourinsurance policies.

Our operations are subject to hazards inherent in the oil and natural gas industry, such as, but not limited to, accidents, blowouts, explosions, craters, fires and oil spills.These conditions can cause:

• personal injury or loss of life;• damage to or destruction of property, equipment and the environment; and• suspension of operations.

The occurrence of a significant event or adverse claim in excess of the insurance coverage that we maintain or that is not covered by insurance could have a materialadverse effect on our financial condition and results of operations. In addition, claims for loss of oil and natural gas production and damage to formations can occur in the wellservices industry. Litigation arising from a catastrophic occurrence at a location where our equipment and services are being used may result in our being named as a defendantin lawsuits asserting large claims.

As is customary in our industry, our service contracts generally provide that we will indemnify and hold harmless our customers from any claims arising from personalinjury or death of our employees, damage to or loss of our equipment, and pollution emanating from our equipment and services. Similarly, our customers agree to indemnifyand hold us harmless from any claims arising from personal injury or death of their employees, damage to or loss of their equipment, and pollution caused from their equipmentor the well reservoir (including uncontained oil flow from a reservoir). Our indemnification arrangements may not protect us in every case. For example, from time to time wemay enter into contracts with less favorable indemnities or perform work without a contract that protects us. In addition, our indemnification rights may not fully protect us ifthe customer is insolvent or becomes bankrupt, does not maintain adequate insurance or otherwise does not possess sufficient resources to indemnify us. In addition, ourindemnification rights may be held unenforceable in some jurisdictions. Our inability to fully realize the benefits of our contractual indemnification protections could result insignificant liabilities and could adversely affect our financial condition, results of operations and cash flows.

Our operations are also subject to the risk of cyber-attacks. If our systems for protecting against cyber security risks prove not to be sufficient, we could be adverselyaffected by, among other things, loss or damage of intellectual property, proprietary information, or customer data, having our business operations interrupted, and increasedcosts to prevent, respond to, or mitigate cyber security attacks. These risks could have a material adverse effect on our business, consolidated results of operations, andconsolidated financial condition.

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We maintain insurance coverage that we believe to be customary in the industry against these hazards. However, we do not have insurance against all foreseeable risks,either because insurance is not available or because of the high premium costs. As such, not all of our property is insured. We are also self-insured up to retention limits withregard to workers’ compensation, general liability, and medical and dental coverage. We maintain accruals in our consolidated balance sheets related to self-insurance retentionsby using third-party data and historical claims history. The occurrence of an event not fully insured against, or the failure of an insurer to meet its insurance obligations, couldresult in substantial losses. In addition, we may not be able to maintain adequate insurance in the future at rates we consider reasonable. Insurance may not be available to coverany or all of the risks to which we are subject, or, even if available, it may be inadequate, or insurance premiums or other costs could rise significantly in the future so as to makesuch insurance prohibitively expensive. It is likely that, in our insurance renewals, our premiums and deductibles will be higher, and certain insurance coverage either will beunavailable or considerably more expensive than it has been in the recent past. In addition, our insurance is subject to coverage limits, and some policies exclude coverage fordamages resulting from environmental contamination.

We are subject to environmental, health and safety laws and regulations that may expose us to significant liabilities for penalties, damages or costs of remediation orcompliance.

Our operations are subject to federal, regional, state and local laws and regulations relating to protection of natural resources and the environment, health and safetyaspects of our operations and waste management, including the transportation and disposal of waste and other materials. These laws and regulations may impose numerousobligations on our operations, including the acquisition of permits to conduct regulated activities, the incurrence of capital expenditures to mitigate or prevent releases ofmaterials from our facilities, the imposition of substantial liabilities for pollution resulting from our operations and the application of specific health and safety criteriaaddressing worker protection. Regulations concerning equipment certification also create an ongoing need for regular maintenance. Failure to comply with these laws andregulations could result in investigations, restrictions or orders suspending well operations, the assessment of administrative, civil and criminal penalties, the revocation ofpermits and the issuance of corrective action orders, any of which could have a material adverse effect on our business, results of operations and financial condition.

There is inherent risk of environmental costs and liabilities in our business as a result of our handling of petroleum hydrocarbons and oilfield and industrial wastes, airemissions and wastewater discharges related to our operations, and historical industry operations and waste disposal practices. Our fluid services segment includes disposaloperations into injection wells that pose risks of environmental liability, including leakage from the wells to surface or subsurface soils, surface water or groundwater. Someenvironmental laws and regulations may impose strict liability, which means that in some situations, we could be exposed to liability as a result of our conduct that was withoutfault or lawful at the time it occurred or as a result of the conduct of, or conditions caused by, prior operators or other third parties. Clean-up costs and other damages arising asa result of environmental laws and costs associated with changes in environmental laws and regulations could be substantial and could have a material adverse effect on ourfinancial condition and results of operations.

We operate as a motor carrier and therefore are subject to regulation by the DOT and by other various state agencies. These regulatory authorities exercise broadpowers, governing activities such as the authorization to engage in motor carrier operations and regulatory safety and hazardous materials labeling, placarding and marking.There are additional regulations specifically relating to the trucking industry, including testing and specification of equipment and product handling requirements. In addition,the trucking industry is subject to possible regulatory and legislative changes that may affect the economics of the industry by requiring changes in operating practices or bychanging the demand for common or contract carrier services or the cost of providing truckload services. Some of these possible changes include increasingly stringentenvironmental regulations, changes in the hours of service regulations which govern the amount of time a driver may drive in any specific period, require on board black boxrecorder devices or limits on vehicle weight and size.

Laws protecting the environment generally have become more stringent over time and could continue to do so, which could lead to material increases in costs forfuture environmental compliance and remediation. The modification or interpretation of existing laws or regulations, or the adoption of new laws or regulations, could curtailexploratory or developmental drilling for oil and natural gas and could limit well servicing opportunities. We may not be able to recover some or any of our costs of compliancewith these laws and regulations from insurance.

Please read Items 1 and 2. “Business and Properties — Environmental Regulation and Climate Change” for more information on the environmental laws andgovernment regulations that are applicable to us.

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We may not be able to grow successfully through future acquisitions or successfully manage future growth, and we may not be able to effectively integrate thebusinesses we do acquire.

Our business strategy includes growth through the acquisitions of other businesses. We may not be able to continue to identify attractive acquisition opportunities orsuccessfully acquire identified targets. In addition, we may not be successful in integrating our current or future acquisitions into our existing operations, which may result inunforeseen operational difficulties or diminished financial performance or require a disproportionate amount of our management’s attention. Even if we are successful inintegrating our current or future acquisitions into our existing operations, we may not derive the benefits, such as operational or administrative synergies, that we expected fromsuch acquisitions, which may result in the commitment of our capital resources without the expected returns on such capital. Furthermore, competition for acquisitionopportunities may escalate, increasing our cost of making further acquisitions or causing us to refrain from making additional acquisitions. We may also be limited in ourability to incur additional indebtedness in connection with or to fund future acquisitions under the Credit Agreements.

Whether we realize the anticipated benefits from an acquisition depends, in part, upon our ability to integrate the operations of the acquired business, the performanceof the underlying product and service portfolio, and the performance of the management team and other personnel of the acquired operations. Accordingly, our financial resultscould be adversely affected from unanticipated performance issues, legacy liabilities, transaction-related charges, amortization of expenses related to intangibles, charges forimpairment of long-term assets, credit guarantees, partner performance and indemnifications. While we believe that we have established appropriate and adequate proceduresand processes to mitigate these risks, there is no assurance that these transactions will be successful.

We depend on several significant customers, and a loss of one or more significant customers could adversely affect our results of operations.Our customers consist primarily of major and independent oil and gas companies. During each of 2016 and 2015, our top five customers accounted for approximately

25% of our revenues. However, no individual customer composed greater than 10% of our revenues in either year. The loss of any one of our largest customers or a sustaineddecrease in demand by any of such customers could result in a substantial loss of revenues and could have a material adverse effect on our results of operations.

If our customers delay paying or fail to pay a significant amount of our outstanding receivables, it could have a material adverse effect on our liquidity, consolidatedresults of operations, and consolidated financial condition.

In most cases, we bill our customers for our services in arrears and are, therefore, subject to our customers delaying or failing to pay our invoices. In weak economicenvironments, we may experience increased delays and failures due to, among other reasons, a reduction in our customers’ cash flow from operations and their access to thecredit markets. If our customers delay paying or fail to pay us a significant amount of our outstanding receivables, it could have a material adverse effect on our liquidity,consolidated results of operations, and consolidated financial condition.

Our industry has experienced a high rate of employee turnover. Any difficulty we experience replacing or adding personnel could adversely affect our business.We may not be able to find enough skilled labor to meet our needs, which could limit our growth. Our business activity historically decreases or increases with the

prices of oil and natural gas. We may have problems finding enough skilled and unskilled laborers in the future if the demand for our services increases. If we are not able toincrease our service rates sufficiently to compensate for wage rate increases, our operating results may be adversely affected.

Other factors may also inhibit our ability to find enough workers to meet our employment needs. Our services require skilled workers who can perform physicallydemanding work. As a result of our industry volatility and the demanding nature of the work, workers may choose to pursue employment in fields that offer a more desirablework environment at wage rates that are competitive with ours. We believe that our success is dependent upon our ability to continue to employ and retain skilled technicalpersonnel. Our inability to employ or retain skilled technical personnel generally could have a material adverse effect on our operations.

Our success depends on key members of our management, the loss of any of whom could disrupt our business operations.We depend to a large extent on the services of some of our executive officers. The loss of the services of T. M. “Roe” Patterson, our President and Chief Executive

Officer, or other key personnel could disrupt our operations. Although we have entered into employment agreements with Mr. Patterson and our other executive officers thatcontain, among other provisions, non-compete agreements, we may not be able to enforce the non-compete provisions in the employment agreements.

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Adverse weather conditions may affect our operations.

Our operations may be materially affected by severe weather conditions in areas where we operate. Severe weather, such as blizzards, extreme temperatures andhurricanes may cause evacuation of personnel, curtailment of services and suspension of operations, and loss of or damage to equipment and facilities. Damage from anyadverse weather conditions could adversely affect our financial condition, results of operations and cash flows.

Weather conditions may also affect the price of crude oil and natural gas, and related demand for our services. Please read the risk factor above, “If oil and natural gasprices remain volatile, or if oil or natural gas prices remain low or decline further, the demand for our services could be adversely affected.”

Climate change legislation or regulations restricting or regulating emissions of greenhouse gases could result in increased operating costs and reduced demand for ourfield services.

In response to studies finding that emissions of carbon dioxide, methane and other greenhouse gases from industrial and energy sources contribute to increases ofcarbon dioxide levels in the earth’s atmosphere and oceans and contribute to global warming and other environmental effects, the EPA has adopted various regulations underthe federal Clean Air Act addressing emissions of greenhouse gases that may affect the oil and gas industry. On August 16, 2012 the EPA published rules that include standardsto reduce methane emissions associated with oil and gas production. EPA finalized additional rules to reduce methane emissions from new oil and gas facilities in May 2016.Federal changes will affect state air permitting programs in states that administer the federal Clean Air Act under a delegation of authority, including states in which we haveoperations. Numerous legislative measures have been introduced in the past that would have imposed restrictions or costs on greenhouse gas emissions, including from the oiland gas industry. In addition, the United States has been involved in international negotiations regarding greenhouse gas reductions under the United Nations FrameworkConvention on Climate Change which led to the signing of the Paris Agreement in December 2015, which became effective in November 2016. Additionally, certain U.S. statesor regional coalitions of states have adopted measures regulating or limiting greenhouse gases from certain sources or have adopted policies seeking to reduce overall emissionsof greenhouse gases. The adoption and implementation of any international treaty or of any federal or state legislation or regulations imposing reporting obligations on, orlimiting emissions of greenhouse gases from, our equipment and operations could require us to incur costs to comply with such requirements and possibly require the reductionor limitation of emissions of greenhouse gases associated with our operations and other sources within the industrial or energy sectors. Such legislation or regulations couldadversely affect demand for the production of oil and natural gas and thus reduce demand for the services we provide to oil and natural gas producers as well as increase ouroperating costs by requiring additional costs to operate and maintain equipment and facilities, install emissions controls, acquire allowances or pay taxes and fees relating toemissions, which could adversely affect our results of operations. Finally, it should be noted that some scientists have concluded that increasing concentrations of greenhousegases may produce changes in climate or weather, such as increased frequency and severity of storms, floods and other climatic events, which if any such effects were to occur,could have adverse physical effects on our operations, physical assets and field services to exploration and production operators.

Federal and state legislative and regulatory initiatives related to hydraulic fracturing could result in operating restrictions or delays in the completion of oil and naturalgas wells that may reduce demand for our well servicing activities and could adversely affect our financial position, results of operations and cash flows.

We provide hydraulic fracturing and fluid handling services to our customers. Hydraulic fracturing is a commonly used process that involves injection of water, sand,and certain chemicals to fracture the hydrocarbon-bearing rock formation to allow flow of hydrocarbons into the wellbore. The federal Energy Policy Act of 2005 amended theUnderground Injection Control (“UIC”) provisions of the federal Safe Drinking Water Act (“SDWA”) to expressly exclude certain hydraulic fracturing practices from thedefinition of “underground injection.” The EPA has asserted regulatory authority over certain hydraulic fracturing activities involving diesel fuel and published proposedguidance relating to such practices in May 2012. At the state level, several states in which we operate have adopted regulations requiring the disclosure of certain informationregarding hydraulic fracturing fluids.

Scrutiny of hydraulic fracturing activities continues in other ways, as the EPA released its report on environmental impacts of hydraulic fracturing in December 2016,concluding that hydraulic fracturing could impact drinking water resources. The U.S. Department of the Interior issued regulations relating to the use of hydraulic fracturingtechniques on public lands and disclosure of fracturing fluid constituents in March 2015. The EPA issued effluent limitations for the treatment of discharge of wastewaterresulting from hydraulic fracturing activities in June 2016. In addition, some states and localities have adopted, and others are considering adopting, regulations or ordinancesthat could restrict hydraulic fracturing in certain circumstances, that would require, with some exceptions, disclosure of constituents of hydraulic fracturing fluids, or that wouldimpose higher taxes, fees or royalties on natural gas production. Recent research has linked disposal of produced water into disposal wells to an increase in earthquakes acrossthe South and Midwest. Certain state agencies, including those in Texas and Oklahoma, have implemented regulations

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authorizing the imposition of certain limitations on existing wells if seismic activity increases in the area of an injection well, including a temporary injection ban. For example,in Oklahoma, the Oklahoma Corporation Commission (“OCC”) has implemented a variety of measures, including the adoption of the National Academy of Science’s “trafficlight system”, pursuant to which the agency reviews new disposal well applications and may restrict operations at existing wells. Beginning in 2013, the OCC has ordered thereduction of disposal volumes into the Arbuckle formation and more recently OCC directed the shut in of a number of disposal wells due to increased earthquake activity in theArbuckle formation. Moreover, public debate over hydraulic fracturing and shale gas production has been increasing, and has resulted in delays of well permits in some areas.

Increased regulation and attention given to the hydraulic fracturing process could lead to greater opposition, including litigation, to oil and gas production activitiesusing hydraulic fracturing techniques. Additional legislation or regulation could also lead to operational delays or increased operating costs in the production of oil and naturalgas, including from the developing shale plays, incurred by our customers or could make it more difficult to perform hydraulic fracturing. The adoption of any federal, state orlocal laws or the implementation of regulations or ordinances restricting or increasing the costs of hydraulic fracturing could potentially increase our costs of operations andcause a decrease in the completion of new oil and natural gas wells and an associated decrease in demand for our well servicing activities, any or all of which could adverselyaffect our financial position, results of operations and cash flows.

Potential listing of species as “endangered” under the federal Endangered Species Act could result in increased costs and new operating restrictions or delays on ouroil and natural gas exploration and production customers, which could adversely reduce the amount of contract drilling services that we provide to such customers.

The federal Endangered Species Act, referred to as the “ESA,” and analogous state laws regulate a variety of activities, including oil and gas development, which couldhave an adverse effect on species listed as threatened or endangered under the ESA or their habitats. The designation of previously unidentified endangered or threatenedspecies could cause oil and natural gas exploration and production operators to incur additional costs or become subject to operating delays, restrictions or bans in affectedareas, which impacts could adversely reduce the amount of drilling activities in affected areas, including support services that we provide to such operators under our contractdrilling services segment. Numerous species have been listed or proposed for protected status in areas in which we provide or could in the future provide field services. Certainwildflower species, among others, are also species that have been or are being considered for protected status under the ESA and whose range can coincide with oil and naturalgas production activities. The presence of protected species in areas where operators whom we provide contract drilling services conduct exploration and production operationscould impair such operators’ ability to timely complete well drilling and development and, consequently, adversely affect the amount of contract drilling or other field servicesthat we provided to such operators, which reduction of services could have a significant adverse effect on our results of operations and financial position.

Our ability to use net operating loss and credit carry-forwards to offset future taxable income for U.S. federal income tax purposes may be limited as a result ofissuances of equity or other transactions.

In general, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” issubject to limitations on its ability to utilize its pre-change net operating losses (“NOLs”) and certain tax credits, to offset future taxable income and tax. In general, anownership change occurs if the aggregate stock ownership of certain stockholders changes by more than 50 percentage points over such stockholders’ lowest percentageownership during the testing period (generally three years).

The Debtors’ emergence from Chapter 11 bankruptcy proceedings is considered a change in ownership for purposes of IRC Section 382. The limitation under the IRCis based on the value of the corporation as of the emergence date. The ownership changes, and resulting annual limitation, is not expected to result in the expiration of any netoperating losses generated prior to the emergence date. The amount of consolidated U.S. NOLs available as of December 31, 2016 is approximately $567.5 million.Additionally, we have $1.9 million of alternative minimum tax credits.

Risks Relating to Ownership of Our Common Stock or WarrantsOur certificate of incorporation and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may

adversely affect the market price of our common stock.Our certificate of incorporation authorizes our board of directors to issue preferred stock without stockholder approval. If our board of directors elects to issue

preferred stock, it could be more difficult for a third party to acquire us. In addition, some provisions of our certificate of incorporation and bylaws could make it more difficultfor a third party to acquire control of us, even if the change of control would be beneficial to our stockholders, including:

• a classified board of directors, so that only approximately one third of our directors are elected each year;• limitations on the removal of directors;• the prohibition of stockholder action by written consent;• limitations on the ability of our stockholders to call special meetings; and • advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders.

Delaware law prohibits us from engaging in any business combination with any “interested stockholder,” meaning generally that a stockholder who beneficially ownsmore than 15% of our stock cannot acquire us for a period of three years from the date this person became an interested stockholder, unless various conditions are met, such asapproval of the transaction by our board of directors.

Because we have no plans to pay dividends on our common stock, investors must look solely to stock appreciation for a return on their investment in us.We do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain all future earnings to fund the

development and growth of our business. Any payment of future dividends will be at the discretion of our board of directors and will depend on, among other things, ourearnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerationsthat the

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board of directors deems relevant. Investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize a return ontheir investment. Investors seeking cash dividends should not purchase our common stock.

The warrants we issued in accordance with the Prepackaged Plan are exercisable for shares of our Successor Common Stock. The exercise of such equityinstruments would have a dilutive effect to stockholders of the Company.

In accordance with the terms of the Prepackaged Plan, on the Effective Date we issued warrants that are exercisable into 2,066,627 shares of our Successor CommonStock at an initial exercise price of $55.25 per warrant. The exercise of these warrants into our Successor Common Stock would have a dilutive effect to the holdings of ourexisting stockholders. The warrants will not expire until December 23, 2023 and may create an overhang on the market for, and have a negative effect on the market price of,our Successor Common Stock.

There is no guarantee that the warrants issued by us in accordance with the Prepackaged Plan will become in the money, and unexercised warrants may expireworthless. Further, the terms of such warrants may be amended.

As long as our stock price is below $55.25 per share, the warrants will have limited economic value, and they may expire worthless. In addition, the warrant agreementprovides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval bythe holders of at least a certain percentage of the then-outstanding warrants originally issued to make any change that adversely affects the interests of the holders. Accordingly,we may amend the terms of the warrants in a manner adverse to a holder if holders of at least a certain percentage of the then outstanding warrants approve of such amendment.

Future sales or the availability for sale of substantial amounts of our common stock, or the perception that these sales may occur, could adversely affect thetrading price of our common stock and could impair our ability to raise capital through future sales of equity securities.

Our Second Amended and Restated Certificate of Incorporation authorizes us to issue 80,000,000 shares of common stock, of which an estimated 25,998,847 shares ofSuccessor Common Stock were outstanding as of March 30, 2017. This number includes shares issued in connection with our emergence from bankruptcy, almost all of whichare freely transferable without restriction or further registration pursuant to Section 1145 of the Bankruptcy Code. We also have 2,428,255 shares of Successor Common Stockauthorized for issuance as equity awards under the Basic Energy Services, Inc. Management Incentive Plan, of which as of March 30, 2017, 809,416 shares are issuablepursuant to outstanding options and 539,606 shares are issuable pursuant to outstanding restricted stock unit awards. In addition, as of March 30, 2017, warrants to purchase upto 2,066,627 shares of our Successor Common Stock at an initial exercise price of $55.25 were outstanding. Shares issued upon exercise of these warrants will generally befreely transferable without restriction or registration under the Securities Act pursuant to Section 1145 of the Bankruptcy Code.

A large percentage of our shares of common stock are held by a relatively small number of investors. We entered into a registration rights agreement, (the“Registration Rights Agreement”) with certain of those investors pursuant to which we have agreed to file a registration statement with the SEC to facilitate potential futuresales of such shares by them. Sales of a substantial number of shares of our common stock in the public markets, or even the perception that these sales might occur (such asupon the filing of the aforementioned registration statement), could impair our ability to raise capital through a future sale of, or pay for acquisitions using, our equity securities.

We may issue shares of our common stock or other securities from time to time as consideration for future acquisitions and investments. If any such acquisition orinvestment is significant, the number of shares of our common stock, or the number or aggregate principal amount, as the case may be, of other securities that we may issuemay in turn be substantial. We may also grant registration rights covering those shares of our common stock or other securities in connection with any such acquisitions andinvestments.

We cannot predict the effect that future sales of our common stock will have on the price at which our common stock trades or the size of future issuances of ourcommon stock or the effect, if any, that future issuances will have on the market price of our common stock. Sales of substantial amounts of our common stock, or theperception that such sales could occur, may adversely affect the trading price of our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS None.

ITEM 3. LEGAL PROCEEDINGS From time to time, Basic is a party to litigation or other legal proceedings that Basic considers to be a part of the ordinary course of business. Basic is not

currently involved in any legal proceedings that it considers probable or reasonably possible, individually or in the aggregate, to result in a material adverse effect on itsfinancial condition, results of operations or liquidity. The information regarding litigation and environmental matters described in Note 10 . Commitments and Contingencies, ofthe notes to our audited consolidated financial statements included in this Annual Report on Form 10-K is incorporated herein by reference.

ITEM 4. MINE SAFETY DISCLOSURES Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Price for Registrant’s Common Equity

On October 25, 2016, Basic filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy. Basic emerged fromChapter 11 on December 23, 2016 (the “Effective Date”). On the Effective Date, all of the outstanding common stock (“Predecessor Common Stock”) and all other outstandingequity securities of Basic, including all options, were cancelled pursuant to the terms of the Prepackaged Plan and Basic issued 26,095,431 million shares of new common stock(“Successor Common Stock”) to unsecured holders of debt, holders of equity interests, and certain members of management, subject to the bankruptcy proceedings, of which,25,998,847 shares are were outstanding at March 30, 2017. Because the value of one share of Successor Common Stock bears no relation to the value of one share ofPredecessor Common Stock (a new equity value was established upon emergence) the following discussions contain information regarding Successor Common Stock.

Market Information - Successor Common Stock trades on the New York Stock Exchange (“NYSE”) under the symbol “BAS.” The stock began trading on the NYSEon December 27, 2016, in conjunction with our emergence from Chapter 11 proceedings.

High LowPredecessor common stock:

2015: First Quarter

$ 8.04 $ 5.44

Second Quarter $ 10.19 $ 7.16Third Quarter $ 6.92 $ 3.30Fourth Quarter $ 5.10 $ 2.40

2016: First Quarter $ 3.59 $ 1.63Second Quarter $ 3.20 $ 1.46Third Quarter $ 1.67 $ 0.37Fourth Quarter October 1 - December 23 $ 0.83 $ 0.32

Successor common stock: 2016:

Fourth Quarter December 24 - December 31 $ 44.75 $ 29.36

As of March 30, 2017, we had 25,998,847 shares of Successor Common Stock outstanding held by approximately 135 record holders.

We have not declared or paid any cash dividends on our common stock, and we do not currently anticipate paying any cash dividends on our common stock in theforeseeable future. We currently intend to retain all future earnings to fund the

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development and growth of our business. Any future determination relating to our dividend policy will be at the discretion of our board of directors and will depend on ourresults of operations, financial condition, capital requirements and other factors deemed relevant by our board.

Securities Authorized for Issuance under Equity Compensation PlansThe following table provides information regarding options or warrants and rights authorized for issuance under our equity compensation plans as of December 31,

2016:

Plan Category

Number of Securities to beIssued upon Exercise ofOutstanding Options,

Warrants and Rights (a) (2)

Weighted AverageExercise Price of

Outstanding OptionsWarrants and Rights

(b)(3)

Number of Securities RemainingAvailable for Future Issuance Under

Equity Compensation Plans(excludingSecurities Reflected in Column (a))

(c)(4)

Equity compensation plans approved by security holders (1) 863,376 $ 36.55 2,107,485Equity compensation plans not approved by security holders — — —

Total 863,376 $ 36.55 2,107,485

(1) Represent shares of Successor Common Stock issuable under the Basic Energy Services, Inc. Management Incentive Plan (the “MIP”), effective as of December 23,

2016.(2) Includes 323,770 shares of Successor Common Stock that may be issued upon the vesting of stock options and 539,606 shares that may be issued upon vesting of

restricted stock units (“RSUs”).(3) RSUs do not have an exercise price; accordingly, RSUs are excluded from the weighted average exercise price of outstanding awards.(4) Represents the number of shares of Successor Common Stock remaining available for grant under the MIP as of December 31, 2016. If any Successor Common

Stock underlying an unvested award is cancelled, forfeited or is otherwise terminated without delivery of shares, then such shares will again be available for issuance under theMIP.Issuer Purchases of Equity Securities

The following table provides information relating to our repurchase of shares of common stock during the three months ended December 31, 2016 (dollars inthousands, except average price paid per share):

Issuer Purchases of Equity Securities

Total Number of Approximate Dollar

Shares Purchased Value of Shares

as Part of Publicly that May Yet be

Total Number of Average Price Paid Announced Purchased Under

Period Shares Purchased Per Share Program (1) the Program (1)

Predecessor Shares January 1 — December 23 (2) 220,888 $ 2.90 — $ —Total 220,888 $ 2.90 $ 9,451

Successor Shares December 24 — December 31 (2) 96,587 $ 36.00 — $ —Total 96,587 $ 36.00 — $ —

(1) On May 24, 2012, Basic announced that the Board of Directors had reauthorized the repurchase of up to approximately $35.2 million of shares of PredecessorCommon Stock from time to time in open market or private transactions, at the Company's discretion, as a continuation of our prior $50.0 million stock repurchase programannounced in 2008 (of which $39.5 million was purchased prior to such reauthorization). Shares of Predecessor Common Stock purchased under this program were cancelledpursuant to the Prepackaged Plan on the Effective Date, and this program was terminated and does not apply to our Successor Common Stock following the Effective Date.

(2) Except as indicated under the column “Total Number of Shares Purchased as Part of Publicly Announced Program,” the shares under “Total Number of SharesPurchased” were repurchased from various employees to provide such employees the

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cash amounts necessary to pay certain tax liabilities associated with the vesting of restricted shares and RSUs owned by them. The shares were repurchased on various datesbased on the closing price per share on the date of repurchase. The repurchased shares were issued under either the Basic Energy Services, Inc. Amended and Restated 2003Long-Term Incentive Plan (Predecessor Shares); or the Basic Energy Services, Inc. Management Incentive Plan, effective as of December 23, 2016 (Successor Shares).

Performance DataThe following is a line graph comparing cumulative, total shareholder return for Successor Common Stock for the period from December 23, 2016 to March 15, 2017

with (i) a general market index (the Russell 2000 Index) and (ii) a group of peers selected by the Company in the same line of business or industry as the Company. The peergroup is comprised of the following companies: Key Energy Services, Inc., Nabors Industries Ltd. and Pioneer Energy Services Corp.

Value of $100 Invested at December 23, 2016, December 31, 2016, January 31, 2017,February 28, 2017, and March 15, 2017

T

Basic Energy Services Russell 2000 Index Peer Group

December 23, 2016 $ 100.00 $ 100.00 $ 100.00December 31, 2016 $ 98.19 $ 98.95 $ 100.02January 31, 2017 $ 113.53 $ 99.29 $ 99.17February 28, 2017 $ 109.39 $ 101.11 $ 89.06March 15, 2017 $ 91.94 $ 100.83 $ 81.55

The foregoing table is based on historical data and is not necessarily indicative of future performance. This graph shall not be deemed to be "soliciting material" or tobe "filed" with the SEC or subject to the Regulations 14A or 14C under the Securities Exchange Act of 1934, as amended, or to the liabilities of Section 18 under such Act.

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ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected consolidated financial information regarding our results of operations, balance sheets and certain ratios. As detailed in Item7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, upon emergence from bankruptcy on the Effective Date of December 23, 2016,Basic adopted fresh start accounting, which results in data subsequent to adoption not being comparable to data in periods prior to the Effective Date. Therefore, balances forBasic at December 31, 2016 are presented separately. Operating data for the years ended December 31, 2016 through 2012 represent amounts for Predecessor Basic. The datapresented below is explained further in, and should be read in conjunction with, Item 7. Management’s Discussion and Analysis of Financial Condition and Results ofOperations and Item 7A. Quantitative and Qualitative Disclosures about Market Risk and Item 8. Financial Statements and Supplementary Data.

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Predecessor

Year Ended December 31,

2016 2015 2014 2013 2012

(Dollars in thousands, except per share data)

Statement of Operations Data: Revenues: Completion and remedial services $ 184,567 $ 307,550 $ 698,917 $ 501,137 $ 586,070

Fluid services 191,725 258,597 369,774 343,863 352,246

Well servicing 163,966 217,245 361,683 363,386 376,268

Contract drilling 7,239 22,207 60,910 54,518 60,300

Total revenues 547,497 805,599 1,491,284 1,262,904 1,374,884

Expenses: Completion and remedial services 158,762 245,069 434,457 327,540 357,960

Fluid services 161,535 196,155 265,105 239,154 236,588

Well servicing 140,274 184,952 270,344 265,058 268,219

Contract drilling 7,079 16,680 41,513 36,336 39,817

General and administrative (a) 135,331 143,458 167,301 171,439 183,274

Depreciation and amortization 218,205 241,471 217,480 209,747 187,083

Loss on disposal of assets 1,014 1,602 1,974 2,873 3,334

Restructuring Costs 20,743 — — — —

Goodwill impairment 646 81,877 34,703 — —

Total expenses 843,589 1,111,264 1,432,877 1,252,147 1,276,275

Operating income (loss) (296,092) (305,665) 58,407 10,757 98,609

Reorganization items, net 264,306 — — — —

Net interest expense (96,599) (67,938) (67,002) (67,154) (62,355)Loss on early extinguishment ofdebt — — — — (7,942)

Bargain purchase gain 662 — — — 910

Other income 467 528 775 743 627

Income (loss) before income taxes (127,256) (373,075) (7,820) (55,654) 29,849

Income tax (expense) benefit 3,883 131,330 (521) 19,725 (10,263)

Net income (loss) $ (123,373) $ (241,745) $ (8,341) $ (35,929) 19,586Basic earnings (loss) per share ofcommon stock: $ (2.94) $ (5.97) $ (0.20) $ (0.89) $ 0.48Diluted earnings (loss) per share ofcommon stock: $ (2.94) $ (5.97) $ (0.20) $ (0.89) $ 0.47

Other Financial Data: Cash flows from (used in) operatingactivities $ (151,489) $ 95,539 $ 224,536 $ 165,588 $ 303,681Cash flows used in investingactivities (29,405) (53,673) (213,429) (139,686) (250,762)Cash flows from (used in) financingactivities 233,037 (75,049) (42,724) (48,935) 3,188

Capital expenditures: Acquisitions, net of cash acquired — 7,914 16,090 21,467 84,939Property and equipment, excludingcapital leases 32,689 53,868 236,295 136,950 171,440

(a) Includes approximately $17,675, $13,728, $14,714, $11,830 and $12,855 of non-cashstock compensation expense for the years ended December 31, 2016, 2015, 2014, 2013and 2012, respectively.

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Successor Predecessor

As of December 31, As of December 31,

2016 2015 2014 2013 2012

Balance Sheet Data: Cash and cash equivalents $ 98,875 $ 46,732 $ 79,915 $ 111,532 $ 134,565Property and equipment, net 488,848 846,290 1,007,969 928,037 943,766Total assets 768,160 1,161,369 1,597,177 1,543,339 1,599,006Long-term debt 184,752 838,368 882,572 846,691 844,906Stockholders' equity 414,408 106,338 342,653 345,287 372,410

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management’s Overview

We provide a wide range of well site services to oil and natural gas drilling and producing companies, including completion and remedial services, fluid services, wellservicing and contract drilling services. Our results of operations reflect the impact of our acquisition strategy as a leading consolidator in the domestic land-based well servicesindustry. Our acquisitions during 2014 and 2015 increased our breadth of service offerings at the well site and expanded our market presence. Our hydraulic horsepowercapacity for pumping services increased from 291,000 at January 1, 2014 to 444,000 at December 31, 2016. Our weighted average number of fluid service trucks decreasedfrom 1,006 in the first quarter of 2014 to 944 in the fourth quarter of 2016. Our weighted average number of well servicing rigs decreased from 425 in the first quarter of 2014 to421 in the fourth quarter of 2016. Our weighted average number of drilling rigs remained constant at 12 from the first quarter of 2014 to the fourth quarter of 2016.

Our operating revenues from each of our segments, and their relative percentages of our total revenues, consisted of the following (dollars in millions):

Year Ended December 31,

2016 2015 2014

Revenues: Completion and remedial services $ 184.6 34% $ 307.6 38% $ 698.9 47%Fluid services 191.7 35% 258.6 32% 369.8 25%Well servicing 164.0 30% 217.2 27% 361.7 24%Contract drilling 7.2 1% 22.2 3% 60.9 4%Total revenues $ 547.5 100% $ 805.6 100% $ 1,491.3 100%

Our core businesses depend on our customers’ willingness to make expenditures to produce, develop and explore for oil and natural gas in the United States. Industryconditions are influenced by numerous factors, such as the supply of and demand for oil and natural gas, domestic and worldwide economic conditions, political instability in oilproducing countries and merger and divestiture activity among oil and natural gas producers. The volatility of the oil and natural gas industry, and the consequent impact onexploration and production activity, has adversely impacted the level of drilling and workover activity by some of our customers. This volatility also affected the demand forour services and the price of our services in 2016. In addition, the discovery rate of new oil and natural gas reserves in our market areas also may have an impact on ourbusiness, even in an environment of stronger oil and natural gas prices. For a more comprehensive discussion of our industry trends, see “General Industry Overview” includedin Items 1 and 2, Business and Properties, of this Annual Report on Form 10-K.

We derive a majority of our revenues from services supporting production from existing oil and natural gas operations. Demand for these production-related services,including well servicing and fluid services, tends to remain relatively stable, even in moderate oil and natural gas price environments, as ongoing maintenance spending isrequired to sustain production. As oil and natural gas prices reach higher levels, demand for all of our services generally increases as our customers engage in more wellservicing activities relating to existing wells to maintain or increase oil and natural gas production from those wells. Because our services are required to support drilling andworkover activities, our revenues will vary based on changes in capital spending by our customers as oil and natural gas prices increase or decrease.

Oil prices had remained relatively stable until the fourth quarter of 2014 when an extended period of significant decline began. The downward trend in oil and naturalgas prices during 2015 has caused utilization and pricing for our services in our operating areas to decline throughout 2015. An extended period of lower pricing causedovercapacity and continued pricing pressure on all service lines in 2016.

Our revenues generally increased in 2014 due to an increase in activity during the first nine months the year. This increase was most notable in our completion andremedial services segment, due to significant amount of capital expansion during the first half of the year. These increases were somewhat offset by the drop in oil prices in thefourth quarter of 2014 and continued to decline throughout 2015 and stayed low all throughout 2016. Oil prices increased gradually in the fourth quarter of 2016, upon decisionsby Saudi Arabia and OPEC to limit production. We anticipate our customer base to increase their 2017 capital programs and, as a result, expect modestly higher activity levelsand pricing in 2017.

We will continue to evaluate opportunities to expand our business through selective acquisitions and internal growth initiatives. Our capital investment decisions aredetermined by an analysis of the projected return on capital employed of each of those alternatives, which is substantially driven by the cost to acquire existing assets from athird party, the capital required to

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build new equipment and the point in the oil and natural gas commodity price cycle. Based on these factors, we make capital investment decisions that we believe will supportour long-term growth strategy. While we believe our costs of integration for prior acquisitions have been reflected in our historical results of operations, integration ofacquisitions may result in unforeseen operational difficulties or require a disproportionate amount of our management’s attention.

We believe the most important performance measures for our business segments are as follows:• Completion and Remedial Services — segment profits as a percent of revenues;• Fluid Services — trucking hours, revenue per truck, segment profits per truck and segment profits as a percent of revenues;• Well Servicing — rig hours, rig utilization rate, revenue per rig hour, profits per rig hour and segment profits as a percent of revenues; and• Contract Drilling — rig operating days, revenue per drilling day, profits per drilling day and segment profits as a percent of revenues.

Segment profits are computed as segment operating revenues less direct operating costs. These measurements provide important information to us about the activityand profitability of our lines of business. For a detailed analysis of these indicators for our company, see “Segment Overview” below.

Recent Strategic Acquisitions and ExpansionsDuring the period from 2014 through 2015, we grew through acquisitions and capital expenditures. We completed one acquisition in 2014 and three acquisitions in

2015 none of which were considered significant.

Selected 2014 AcquisitionsDuring 2014, we made one acquisition that complemented our existing completion and remedial services business segment. On September 17, 2014, we acquired all of

the assets of Pioneer Fishing and Rental, Inc. for total cash consideration of $16.1 million. This acquisition is included in our completion and remedial services segment.

Selected 2015 Acquisitions During 2015, we made three acquisitions that complemented our existing business segments, including GreyRock Pressure Pumping, LLC. On August 31, 2015, we

acquired all of the assets of GreyRock Pressure Pumping, LLC, for total cash consideration of $10.2 million. This acquisition is included in our completion and remedialservices segment.

Segment Overview

Completion and Remedial Services

In 2016, our completion and remedial services segment represented 34% of our revenues. Revenues from our completion and remedial services segment are derivedfrom a variety of services designed to stimulate oil and natural gas production or place cement slurry within the wellbores. Our completion and remedial services segmentincludes pumping services, rental and fishing tool operations, coiled tubing services, nitrogen services, cased-hole wireline services, snubbing and underbalanced drilling.

Our pumping services concentrate on providing single truck, lower-horsepower cementing and acidizing services, as well as various fracturing services in selectedmarkets. Our total hydraulic horsepower capacity for our pumping services was approximately 444,000 horsepower at December 31, 2016 and December 31, 2015.

Our rental and fishing tool business operates 16 rental and fishing tool stores in selected markets as of December 31, 2016.

Our snubbing services operate 36 units throughout our geographic footprint as of December 31, 2016.

We have operations in the wireline, coiled tubing services, nitrogen services, water treatment and the underbalanced drilling services businesses. For a description ofour wireline, coiled tubing services, nitrogen services, water treatment, and snubbing operations, please read “Overview of Our Segments and Services — Completion andRemedial Services Segment” included in Items 1 and 2, Business and Properties, of this Annual Report on Form 10-K.

In this segment, we derive our revenues on a project-by-project basis in a competitive bidding process. Our bids are based on the amount and type of equipment andpersonnel required, with the materials consumed billed separately. During periods of decreased spending by oil and gas companies, we may be required to discount our rates toremain competitive, which would cause lower segment profits.

The following is an analysis of our completion and remedial services segment for each of the quarters and years in the years ended December 31, 2016, 2015 and 2014(dollars in thousands):

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SegmentCompletion & Remedial Revenues Profits %

2014: First Quarter $137,485 37%Second Quarter $164,366 38%Third Quarter $193,699 39%Fourth Quarter $203,367 38%Full Year $698,917 38%2015: First Quarter $112,775 28%Second Quarter $69,055 17%Third Quarter $67,240 16%Fourth Quarter $58,480 15%Full Year $307,550 20%2016: First Quarter $39,696 12%Second Quarter $36,228 9%Third Quarter $49,424 18%Fourth Quarter $59,219 14%Full Year $184,567 14%

We gauge the performance of our completion and remedial services segment based on the segment’s operating revenues and segment profits as a percent of revenues.

Fluid ServicesIn 2016, our fluid services segment represented 35% of our revenues. Revenues in our fluid services segment are earned from the sale, transportation, storage and

disposal of fluids used in the drilling, production and maintenance of oil and natural gas wells. Revenues also include water treatment, well site construction and maintenanceservices. The fluid services segment has a base level of business consisting of transporting and disposing of salt water produced as a by-product of the production of oil andnatural gas. These services are necessary for our customers and have a stable demand but typically produce lower relative segment profits than other parts of our fluid servicessegment. Fluid services for completion and workover projects typically require fresh or brine water for making drilling mud, circulating fluids or fracturing fluids used during ajob, and all of these fluids require storage tanks and hauling and disposal. Because we can provide a full complement of fluid sales, trucking, storage and disposal required onmost drilling and workover projects, the add-on services associated with drilling and workover activity enable us to generate higher segment profits. The higher segment profitsare due to the relatively small incremental labor costs associated with providing these services in addition to our base fluid services operations. Revenues from our well siteconstruction services are derived primarily from preparing and maintaining access roads and well locations, installing small diameter gathering lines and pipelines, constructingfoundations to support drilling rigs and providing maintenance services for oil and natural gas facilities. Revenue from water treatment services results from the treatment andreselling of produced water and flowback to customers for the purposes of reusing as fracturing water. We typically price fluid services by the job, by the hour or by thequantities sold, disposed of or hauled.

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The following is an analysis of our fluid services segment for each of the quarters and years in the years ended December 31, 2016, 2015 and 2014 (dollars inthousands):

Weighted Average Revenue Per Segment Profits Number of Fluid Fluid Service Per Fluid Segment

Fluid Services Service Trucks Truck Hours Truck Service Truck Profits %

2014: First Quarter 1,006 607,200 $92 $26 28%Second Quarter 1,015 630,900 $89 $25 28%Third Quarter 1,025 645,800 $91 $26 29%Fourth Quarter 1,043 661,900 $90 $26 28%Full Year 1,022 2,545,800 $362 $102 28%

2015: First Quarter 1,046 595,100 $71 $19 27%Second Quarter 1,011 573,700 $63 $15 24%Third Quarter 1,012 565,400 $62 $15 24%Fourth Quarter 1,002 557,000 $58 $12 21%Full Year 1,018 2,291,200 $254 $61 24%

2016: First Quarter 985 521,500 $51 $10 18%Second Quarter 976 474,400 $47 $7 15%Third Quarter 962 499,900 $49 $8 17%Fourth Quarter 944 503,200 $52 $7 13%Full Year 966 1,999,000 $199 $31 16%

We gauge activity levels and profitability in our fluid services segment based on trucking hours, revenue per fluid service truck, segment profits per fluid service truckand segment profits as a percent of revenues.

Well ServicingIn 2016, our well servicing segment represented 30% of our revenues. Revenue in our well servicing segment is derived from maintenance, workover, completion and

plugging and abandonment services, as well as rig manufacturing operations. We provide maintenance-related services as part of the normal, periodic upkeep of producing oiland natural gas wells. Maintenance-related services represent a relatively consistent component of our business. Workover and completion services generate more revenue perhour than maintenance work due to the use of auxiliary equipment, but demand for workover and completion services fluctuates more with the overall activity level in theindustry.

We typically charge our well servicing rig customers for services on an hourly basis at rates that are determined by the type of service and equipment required, marketconditions in the region in which the rig operates, the ancillary equipment provided on the rig and the necessary personnel. We measure the activity level of our well servicingrigs on a weekly basis by calculating a rig utilization rate based on a 55-hour work week per rig.

We acquired our rig manufacturing business in May 2010. We manufacture workover rigs for internal purposes as well as to sell to outside companies. Our rigmanufacturing operation also performs large scale refurbishments and maintenance services to used workover rigs.

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The following is an analysis of our well servicing segment for each of the quarters and years in the years ended December 31, 2016, 2015 and 2014. The revenue perrig hour does not include revenues associated with rig manufacturing operations:

Weighted Average Rig Revenue Profits Number of Rig Utilization Per Rig Per Rig Segment

Well Service Rigs Hours Rate Hour Hour Profits %

2014: First Quarter 425 217,400 73% $417 $106 25%Second Quarter 421 214,200 71% $410 $116 28%Third Quarter 421 217,500 71% $405 $108 26%Fourth Quarter 421 204,400 67% $416 $97 23%Full Year 422 853,500 71% $412 $107 25%

2015: First Quarter 421 163,900 55% $377 $69 18%Second Quarter 421 154,700 51% $351 $61 17%Third Quarter 421 154,100 50% $334 $50 14%Fourth Quarter 421 120,000 39% $324 $33 9%Full Year 421 592,700 49% $348 $54 15%

2016: First Quarter 421 108,400 36% $321 $44 11%Second Quarter 421 113,700 38% $308 $44 14%Third Quarter 421 136,600 45% $313 $60 19%Fourth Quarter 421 146,200 49% $300 $43 14%Full Year 421 504,900 42% $310 $47 14%

We gauge activity levels and profitability in our well servicing rig operations based on rig hours, rig utilization rate, revenue per rig hour, profits per rig hour andsegment profits as a percent of revenues.

Contract DrillingIn 2016, our contract drilling segment represented 1% of our revenues. Revenues from our contract drilling segment are derived primarily from the drilling of new

wells.

Within this segment, we typically charge our drilling rig customers a daily rate or a rate based on footage at an established rate per number of feet drilled. Dependingon the type of job, we may also charge by the project. We measure the activity level of our drilling rigs on a weekly basis by calculating a rig utilization rate based on a seven-day work week per rig.

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The following is an analysis of our contract drilling segment for each of the quarters and years in the years ended December 31, 2016, 2015 and 2014:

Weighted Average Rig Profits Number Operating Revenue (Loss) Segment

Contract Drilling of Rigs Days Per Day Per Day Profits %

2014: First Quarter 12 821 $16,500 $5,300 32%Second Quarter 12 942 $16,300 $5,100 32%Third Quarter 12 968 $16,800 $5,200 31%Fourth Quarter 12 948 $16,600 $5,400 33%Full Year 12 3,679 $16,600 $5,300 32%

2015: First Quarter 12 674 $17,000 $5,900 34%Second Quarter 12 280 $15,500 $3,000 20%Third Quarter 12 252 $15,300 $2,600 17%Fourth Quarter 12 155 $16,500 $400 3%Full Year 12 1,361 $16,300 $4,000 25%

2016: First Quarter 12 91 $16,500 -$600 (4)%Second Quarter 12 91 $16,100 $1,000 6%Third Quarter 12 92 $20,100 $1,800 9%Fourth Quarter 12 139 $17,500 $800 (2)%Full Year 12 413 $17,500 $800 2%

We gauge activity levels and profitability in our drilling operations based on rig operating days, revenue per drilling day, profits per drilling day and segment profits asa percent of revenues.

Operating Cost OverviewOur operating costs are comprised primarily of labor costs, including workers’ compensation and health insurance, repair and maintenance, fuel and insurance. A

majority of our employees are paid on an hourly basis. We also employ personnel to supervise our activities, sell our services and perform maintenance on our fleet. These costsare not directly tied to our level of business activity. Repair and maintenance is performed by our crews, company maintenance personnel and outside service providers.Insurance is generally a fixed cost regardless of utilization and can vary depending on the number of rigs, trucks and other equipment in our fleet, as well as employee payroll,and our safety record. Compensation for administrative personnel in local operating yards and our corporate office is accounted for as general and administrative expenses.

Critical Accounting Policies and EstimatesOur consolidated financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation.

We have identified below accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows and whichrequire the application of significant judgment by management. A complete summary of these policies is included in Note 5. Summary of Significant Accounting Policies ofthe notes to our consolidated financial statements.

Critical Accounting Policies

Property and Equipment. Property and equipment are stated at cost, or at estimated fair value at acquisition date if acquired in a business combination. Expendituresfor repairs and maintenance are charged to expense as incurred. We also review the capitalization of refurbishment of workover rigs as described in Note 5. Summary ofSignificant Accounting Policies of the notes to our consolidated financial statements.

Impairments. We review our assets including tangible assets, intangible assets and goodwill, for impairment at a minimum annually, or whenever, in management’sjudgment, events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recovered over its remaining service life. Impairment isindicated when the sum of the estimated

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future cash flows, on an undiscounted basis, is less than the asset’s carrying amount. When impairment is identified and fair value is less than carrying value, an impairmentcharge is recorded to income based on an estimate of future cash flows on a discounted basis.

Self-Insured Risk Accruals. We are self-insured up to retention limits with regard to workers’ compensation, general liability claims, and medical and dental coverageof our employees. We generally maintain no physical property damage coverage on our rig fleet, with the exception of certain rigs, newly manufactured rigs and pumpingservices equipment. We have deductibles per occurrence for workers’ compensation, auto & general liability claims, and medical and dental coverage of $5 million, $1 million,and $400,000, respectively. We maintain accruals in our consolidated balance sheets related to self-insurance retentions by using third-party actuarial data and claims history.

Revenue Recognition. We recognize revenues when the services are performed, collection of the relevant receivables is probable, persuasive evidence of thearrangement exists and the price is fixed and determinable. Rig manufacturing revenue is recognized by individual rig based on the completed contract method.

Income Taxes. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carryingamounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using statutory tax rates expected to apply to taxableincome in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate isrecognized in the period that includes the statutory enactment date. A valuation allowance for deferred tax assets is recognized when it is more likely than not that the benefit ofdeferred tax assets will not be realized.

We record net deferred tax assets to the extent we believe these assets will be more likely more than not be realized. In making such determination, we consider allavailable positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recentfinancial operations.Based on this evaluation, as of December 31, 2016, a valuation allowance of approximately $189.2 million has been recorded on the net deferred tax assetsfor all federal and state tax jurisdictions in order to measure only the portion of the deferred tax asset that more likely than not will be realized. The valuation allowance isrecognized as a result of the Company being in a cumulative three year pre-tax book loss position and absence of other objectively verifiable positive evidence including reversalof existing taxable temporary differences in federal and state tax jurisdictions.

Critical Accounting EstimatesThe preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires

management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingentassets and liabilities at the balance sheet date and the amounts of revenues and expenses recognized during the reporting period. We analyze our estimates based on experienceand various other assumptions that we believe to be reasonable under the circumstances. However, actual results could differ from such estimates. The following is a discussionof our critical accounting estimates.

Depreciation and Amortization. In order to depreciate and amortize our property and equipment and our intangible assets with finite lives, we estimate the usefullives and salvage values of these items. Our estimates may be affected by such factors as changing market conditions, technological advances in the industry or changes inregulations governing the industry.

Impairment of Property and Equipment. We analyze the potential impairment of property and equipment annually as of December 31 or on an interim basis if eventsor circumstances indicate that the fair values of the assets have decreased below the carrying value. Our analysis for potential impairment of property and equipment requires usto estimate undiscounted future cash flows. Actual impairment charges are recorded using an estimate of discounted future cash flows. The determination of future cash flowsrequires us to estimate rates and utilization in future periods and such estimates can change based on market conditions, technological advances in industry or changes inregulations governing the industry.

Inventories. For rental and fishing tools, inventories consisting mainly of grapples, controls, and drill bits are stated at the lower of cost or market, with cost beingdetermined on the average cost method. Other inventories, consisting mainly of manufacturing raw materials, rig components, repair parts, drilling and completion materialsand gravel, are held for use in the operations of Basic and are stated at the lower of cost or market, with cost being determined on the first-in, first-out (“FIFO”) method.

Allowance for Doubtful Accounts. We estimate our allowance for doubtful accounts based on an analysis of past collection activity and specific identification ofoverdue accounts. Factors that may affect this estimate include (1) changes in the financial positions of significant customers and (2) a decline in commodity prices that couldaffect the entire customer base.

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Litigation and Self-Insured Risk Reserves. We estimate our reserves related to litigation and self-insured risk based on the facts and circumstances specific to thelitigation and self-insured risk claims and our past experience with similar claims. The actual outcome of litigation and insured claims could differ significantly from estimatedamounts. As discussed in “Self-Insured Risk Accruals” above with respect to our critical accounting policies, we maintain accruals on our balance sheet to cover self-insuredretentions. These accruals are based on a third-party analysis developed using historical data to project future losses. Loss estimates in the calculation of these accruals areadjusted based upon reported claims and actual claim settlements.

Fair Value of Assets Acquired and Liabilities Assumed. We estimate the fair value of assets acquired and liabilities assumed in business combinations, whichinvolves the use of various assumptions. These estimates may be affected by such factors as changing market conditions, technological advances in the industry or changes inregulations governing the industry. The most significant assumptions, and the ones requiring the most judgment, involve the estimated fair value of property and equipment,intangible assets and the resulting amount of goodwill, if any.

Cash Flow Estimates. Our estimates of future cash flows are based on the most recent available market and operating data for the applicable asset or reporting unit atthe time the estimate is made. Our cash flow estimates are used for asset impairment analyses.

Stock-Based Compensation. We have historically compensated our directors, executives and employees through the awarding of stock options and restricted stock.We accounted for stock option and restricted stock awards in 2016, 2015 and 2014 using a grant date fair-value based method, resulting in compensation expense for stock-based awards being recorded in our consolidated statements of operations. For performance-based restricted stock awards, compensation expense is recognized in our financialstatements based on their grant date fair value. We utilize (i) the closing stock price on the date of the grant to determine the fair value of vesting restricted stock awards and (ii)a Monte Carlo simulation to determine the fair value of restricted stock awards with a combination of market and service vesting criteria. The Monte Carlo simulation modelutilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award. Theexpected volatility utilized in the model was estimated using our historical volatility and the historical volatilities of our peer companies. The risk free interest rate was based onthe U.S. treasury rate for a term commensurate with the expected life of the grant. Stock options have not been issued since 2007 but were valued on the grant date using Black-Scholes-Merton option pricing model and restricted stock issued is valued based on the fair value of our common stock at the grant date. In addition, judgment is required inestimating the amount of stock-based awards that are expected to be forfeited. Because the determination of these various assumptions is subject to significant managementjudgment and different assumptions could result in material differences in amounts recorded in our consolidated financial statements, management believes that accountingestimates related to the valuation of stock options are critical.

Income Taxes. The amount and availability of our loss carryforwards (and certain other tax attributes) are subject to a variety of interpretations and restrictive tests.The utilization of such carryforwards could be limited or lost upon certain changes in ownership and the passage of time. Accordingly, although we believe substantial losscarryforwards are available to us, no assurance can be given concerning the realization of such loss carryforwards, or whether or not such loss carryforwards will be available inthe future.

Results of OperationsThe results of operations between periods may not be comparable, primarily due to fluctuations in the oil and natural gas industry throughout 2016, 2015 and 2014, as

well as the Company’s growth in asset base through capital expenditures during 2014. The asset base decreased in 2015 and 2016.

Year Ended December 31, 2016 Compared to Year Ended December 31, 2015Revenues. Revenues decreased by 32% to $547.5 million in 2016 from $805.6 million in 2015. This decrease was primarily due to a significant decrease in crude oil

prices resulting in lower demand for our services by our customers, particularly from our completion and remedial services and contract drilling segments.

Completion and remedial services revenue decreased by 40% to $184.6 million in 2016 as compared to $307.6 million in 2015. The decrease in revenue between theseperiods was primarily due to lower pumping and fracturing revenues driven by the overall decrease in new well completion activity, as well as pricing concessions given tocustomers. Total hydraulic horsepower was approximately 444,000 at December 31, 2016 and December 31, 2015.

Fluid services revenue decreased by 26% to $191.7 million in 2016 compared to $258.6 million in 2015. This decrease was mainly due to a decrease in trucking hoursand lower pricing for our services. Revenue per fluid service truck decreased 22% to $199,000 in 2016 compared to $254,000 in 2015, due to decreased disposal activities andlower pricing. Our weighted average number of fluid service trucks decreased to 966 in 2016 from 1,018 in 2015.

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Well servicing revenues decreased by 25% to $164.0 million in 2016 compared to $217.2 million in 2015. Rig utilization decreased to 42% in 2016 from 49% during2015, reflecting lower activity levels and the competitive market in oil-dominated areas. Our weighted average number of well servicing rigs remained constant at 421 during2016 and 2015. We experienced a decrease of 11% in revenue per rig hour to $310 during 2016 from $348 during 2015, due to pricing competition, especially from smallerservice companies.

Contract drilling revenues decreased by 67% to $7.2 million in 2016 compared to $22.2 million in 2015. The decrease was driven mainly by a decrease in drillingactivity, which caused a decline in rig operating days. The number of rig operating days decreased to 413 in 2016 compared to 1,361 in 2015. The average revenue per rig dayincreased to $17,500 in 2016 from $16,300 in 2015, due to improved utilization in the second half of 2016.

Direct Operating Expenses. Direct operating expenses, which primarily consist of labor costs, including workers’ compensation and health insurance, andmaintenance and repair costs, decreased by 27% to $467.7 million in 2016 from $642.9 million in 2014. This decrease was due to the lower activity levels in all our segments.

Direct operating expenses for the completion and remedial services segment decreased by 35% to $158.8 million in 2016 as compared to $245.1 million in 2015, dueprimarily to decreased activity levels and reduction in headcount. Segment profits decreased to 14% of revenues in 2016 compared to 20% in 2015, due to decremental marginson a lower revenue base in all operating areas as well as significant pricing discounts for our pumping services.

Direct operating expenses for the fluid services segment decreased by 18% to $161.5 million in 2016 as compared to $196.2 million in 2015. Segment profits were 16%of revenues in 2016 and 24% of revenues in 2015, due to high levels of competition for trucking services and lower skim oil sales and disposal activity.

Direct operating expenses for the well servicing segment decreased by 24% to $140.3 million in 2016 as compared to $185.0 million in 2015, due primarily todecreased personnel costs and reduced demand for our services. Segment profits remained constant at 14% of revenues in 2016 and 2015, with competitive pricing pressuresand the impact of decremental margins on a lower revenue base impacting both years.

Direct operating expenses for the contract drilling segment decreased by 58% to $7.1 million in 2016 as compared to $16.7 million in 2015, due to a significantdecrease in the North American on-shore drilling rig count. Segment profits were 2% of revenues in 2016 compared to 25% in 2015, due to an overall decline in drilling activity.

General and Administrative Expenses. General and administrative expenses decreased by 5.7% to $135.3 million in 2016 from $143.5 million in 2015. The decreasewas primarily due to lower payroll and incentive compensation costs due to a reduction in workforce in 2015, plus additional cost saving initiatives implemented in late 2014and 2015. G&A expense included $17.7 million and $13.7 million of stock-based compensation expense in 2016 and 2015, respectively.

Reorganization Costs. Reorganization costs consist of $20.7 million in 2016 related to pre-petition reorganization and bankruptcy related expenses including legal,accounting, and consulting fees.

Reorganization Items, Net. Reorganization Items, net were $264.3 million in 2016. Reorganization items primarily consist of $540.3 million gain on debt dischargepartially offset by $220.5 million loss on fresh start accounting revaluations, $23.3 million write-off of deferred financing costs and debt premiums and discounts, and $19.7million of post-petition professional fees incurred in connection with our emergence from voluntary reorganization, $8.5 million fair value of warrants issued, $1.4 million inSuccessor equity to Predecessor equity holders, and $2.8 million in other costs.

Depreciation and Amortization Expenses. Depreciation and amortization expenses were $218.2 million in 2016, as compared to $241.5 million in 2015, reflectingthe increase in the size of and investment in our asset base during 2014. During 2016, we invested $32.7 million for cash capital expenditures and $5.7 million for capital leases.

Goodwill Impairment. In the third quarter of 2016, we recorded a non-cash charge totaling $646,000 for impairment of all of the goodwill associated with our 2015acquisitions.

Interest Expense. Interest expense increased to $96.6 million in 2016 compared to $68.0 million in 2015. The increase in interest expense in 2016 was primarily dueto our new term and debtor-in-possession loan facilities.

Income Tax Benefit. Income tax benefit was $3.9 million and $131.3 million in 2016 and 2015 respectively. Our effective tax benefit rate was approximately 3.1% in2016 compared to an effective tax benefit rate of 35.2% in 2015. The change in the effective tax rate is due to the deferred tax valuation allowances related to net operating losscarryforwards available to be used in future periods.

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Year Ended December 31, 2015 Compared to Year Ended December 31, 2014Revenues. Revenues decreased by 46% to $805.6 million in 2015 from $1.5 billion in 2014. This decrease was primarily due to a significant decrease in crude oil

prices resulting in lower demand for our services by our customers, particularly from our completion and remedial services and contract drilling segments.

Completion and remedial services revenue decreased by 56% to $307.6 million in 2015 as compared to $698.9 million in 2014. The decrease in revenue between theseperiods was primarily due to lower pumping and fracturing revenues driven by the overall decrease in new well completion activity, as well as pricing concessions given tocustomers. Total hydraulic horsepower was approximately 444,000 and 443,000 at December 31, 2015 and December 31, 2014, respectively.

Fluid services revenue decreased by 30% to $258.6 million in 2015 compared to $369.8 million in 2014. This decrease was mainly due to a decrease in trucking hoursand lower pricing for our services. Revenue per fluid service truck decreased 30% to $254,000 in 2015 compared to $362,000 in 2014, due to decreased disposal activities andlower pricing. Our weighted average number of fluid service trucks decreased to 1,018 in 2015 from 1,022 in 2014.

Well servicing revenues decreased by 40% to $217.2 million in 2015 compared to $361.7 million in 2014. Rig utilization decreased to 49% in 2015 from 71% during2014, reflecting lower activity levels and the competitive market in oil-dominated areas. Our weighted average number of well servicing rigs decreased to 421 during 2015compared to 422 in 2014 due to the sale of four barge rigs in the first quarter of 2014. We experienced a decrease of 16% in revenue per rig hour to $348 during 2015 from $412during 2014, due to pricing competition, especially from smaller service companies.

Contract drilling revenues decreased by 64% to $22.2 million in 2015 compared to $60.9 million in 2014. The decrease was driven mainly by a decrease in drillingactivity, which caused a decline in rig operating days. The number of rig operating days decreased to 1,361 in 2015 compared to 3,679 in 2014. The average revenue per rig daydecreased to $16,300 in 2015 from $16,600 in 2014, due to pricing competition.

Direct Operating Expenses. Direct operating expenses, which primarily consist of labor costs, including workers’ compensation and health insurance, andmaintenance and repair costs, decreased by 36% to $642.9 million in 2015 from $1.0 billion in 2014. This decrease was due to the lower activity levels in all our segments.

Direct operating expenses for the completion and remedial services segment decreased by 44% to $245.1 million in 2015 as compared to $434.5 million in 2014, dueprimarily to decreased activity levels and reduction in headcount. Segment profits decreased to 20% of revenues in 2015 compared to 38% in 2014, due to decremental marginson a lower revenue base in all operating areas as well as significant pricing discounts for our pumping services.

Direct operating expenses for the fluid services segment decreased by 26% to $196.2 million in 2015 as compared to $265.1 million in 2014. Segment profits were 24%of revenues in 2015 and 28% of revenues in 2014, due to high levels of competition for trucking services and lower skim oil sales and disposal activity.

Direct operating expenses for the well servicing segment decreased by 32% to $185.0 million in 2015 as compared to $270.3 million in 2014, due primarily todecreased personnel costs and reduced demand for our services. Segment profits decreased to 15% of revenues in 2015 compared to 25% in 2014, due to competitive pricingpressures and the impact of decremental margins on a lower revenue base.

Direct operating expenses for the contract drilling segment decreased by 60% to $16.7 million in 2015 as compared to $41.5 million in 2014, due to a significantdecrease in the North American on-shore drilling rig count. Segment profits were 25% of revenues in 2015 compared to 32% in 2014, due to decline in drilling activity.

General and Administrative Expenses. General and administrative expenses decreased by 14% to $143.5 million in 2015 from $167.3 million in 2014. The decreasewas primarily due to lower payroll and incentive compensation costs due to a reduction in workforce in 2015, plus additional cost saving initiatives implemented in late 2014and 2015. G&A expense included $13.7 million and $14.7 million of stock-based compensation expense in 2015 and 2014, respectively.

Depreciation and Amortization Expenses. Depreciation and amortization expenses were $241.5 million in 2015, as compared to $217.5 million in 2014, reflectingthe increase in the size of and investment in our asset base during 2014. During 2015, we invested $56.9 million for cash capital expenditures, $16.0 million for capital leasesand an additional $16.7 million for acquisitions.

Goodwill Impairment. In the third quarter of 2015, we recorded a non-cash charge totaling $81.9 million for impairment of all of the goodwill associated with ourcompletion and remedial services segment.

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Interest Expense. Interest expense remained relatively flat at $68.0 million in 2015 compared to $67.0 million in 2014.

Income Tax Expense. Income tax benefit was $131.3 million in 2015, as compared to tax expense of $521,000 in 2014. Our effective tax benefit rate wasapproximately 35% in 2015 compared to an effective tax expense rate of 7% in 2014. The change in the effective tax rate is due to the tax impact associated with the impairmentof goodwill in 2015 and 2014 and the impact of permanent items on a higher pre-tax loss amount in 2015. Our effective tax benefit in 2015 approximates the federal statutoryrate of 35%. The 2014 effective tax rate of 7% differed from the statutory tax rate due to state taxes and goodwill impairment.

Liquidity and Capital ResourcesCurrently, our primary capital resources are net cash flows from our operations, utilization of capital leases and our $75.0 million revolving credit facility. As of

December 31, 2016, we had cash and cash equivalents of $98.9 million compared to $46.7 million as of December 31, 2015. We have utilized, and expect to utilize in the future,bank and capital lease financing and sales of equity to obtain capital resources. When appropriate, we will consider public or private debt and equity offerings and non-recoursetransactions to meet our liquidity needs.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. This assumes the Company will beable to realize its assets and discharge its liabilities in the normal course of business. Management believes the implementation of the Prepackaged Plan and our emergencefrom the Chapter 11 proceedings on the Effective Date have resolved the substantial doubt and the related uncertainty about our application of the going concern basis ofaccounting.

Cancellation of IndebtednessOn February 15, 2011, we issued $275.0 million aggregated principal amount of 7.75% Senior Notes due 2019 (the “2019 Notes”). On June 13, 2011, we issued an

additional $200.0 million aggregate principal amount of 2019 Notes, resulting in outstanding 2019 Notes with an aggregate principal amount of $475.0 million. On October 16,2012, we issued $300.0 million aggregate principal amount of 7.75% Senior Notes due 2022 (the “2022 Notes,” and together with the 2019 Notes, the “Unsecured Notes”). Inconnection with the Prepackaged Plan, on the Effective Date, all of the Unsecured Notes were cancelled and discharged, along with associated accrued interest amountspursuant to the Prepackaged Plan.

Net Cash Provided by Operating ActivitiesCash flow used in operating activities was $151.5 million for the year ended December 31, 2016 as compared to cash provided by operations of $95.5 million in 2015

and $224.5 million in 2014. The decrease in 2016 was due primarily to a decrease in operating income offset by an increase in working capital. The decrease in 2015 wasprimarily due to a decrease in operating income and an increase in accounts receivable.

Capital ExpendituresCapital expenditures are the main component of our investing activities. Cash capital expenditures (including acquisitions) for 2016 were $32.7 million as compared to

$70.6 million in 2015, and $252.4 million in 2014. Cash capital expenditures decreased in 2016 from 2015 due to a decrease in expansionary capital expenditures to $5.0million in 2016 from $21.4 million in 2015. Through our capital lease program, we also added assets of approximately $5.7 million, $16.0 million and $75.2 million in 2016,2015 and 2014, respectively.

In 2017, we have currently planned capital expenditures of approximately $115.0 million including capital leases of $70.0 million. We do not budget acquisitions inthe normal course of business, and we regularly engage in discussions related to potential acquisitions related to the well services industry.

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Capital Resources and FinancingOur current primary capital resources are cash flow from our operations, our $75.0 million revolving credit facility, and the ability to enter into capital leases, the

ability to incur additional secured indebtedness, and a cash balance of $98.9 million at December 31, 2016. We had no borrowings and $51.6 million in letters of creditoutstanding under the Second A&R Credit Agreement as defined below, as of December 31, 2016, giving us $23.4 million of available borrowing capacity. In 2016, wefinanced activities in excess of cash flow from operations primarily through the use of bank debt and capital leases. The A&R Term Loan Agreement had $164.2 millionaggregate outstanding principal amount of loans as of December 31, 2016 and no additional borrowing capacity. See “-Second A&R Revolving Credit Facility”and “-TermLoan Agreement” below.

Contractual ObligationsWe have significant contractual obligations in the future that will require capital resources. Our primary contractual obligations are (1) our capital leases, (2) our

operating leases, (3) our asset retirement obligations and (4) our other long-term liabilities. The following table outlines our contractual obligations as of December 31, 2016 (inthousands):

Obligations Due in Periods Ended December 31,

Contractual Obligations Total 2017 2018-2019 2020-2021 ThereafterTerm Loan Credit Agreement $ 164,175 $ 1,650 $ 3,300 $ 159,225 $ —Capital leases 82,283 39,345 41,815 1,123 —Operating leases 17,500 4,805 7,259 3,647 1,789Asset retirement obligation 2,436 548 477 531 880Total $ 266,394 $ 46,348 $ 52,851 $ 164,526 $ 2,669

Our long-term debt as of December 31, 2016, excluding capital leases, consisted of $164.2 million under our Amended and Restated Term Loan Agreement. Intereston long-term debt relates to our future contractual interest obligations under our Amended and Restated Term Loan agreement. Our capital leases relate primarily to light-dutyand heavy-duty vehicles and trailers. Our operating leases relate primarily to real estate. Our asset retirement obligation relates to disposal wells.

Our ability to access additional sources of financing will be dependent on our operating cash flows and demand for our services, which could be negatively impacteddue to the extreme volatility of commodity prices.

Second Amended and Restated Revolving Credit Facility

On November 26, 2014, we entered into an amended and restated $300.0 million revolving credit facility with a syndicate of lenders and Bank of America, N.A., asadministrative agent for the lenders. On the Effective Date, the Company entered into a Second Amended and Restated ABL Credit Agreement with Bank of America, N.A. asadministrative agent for the lenders, a collateral management agent, the swing line lender and an letter of credit issuer. Wells Fargo Bank, National Association, as a collateralmanagement agent and syndication agent, and the financial institutions party thereto, as lenders (the "Second A&R Credit Agreement")

The Second A&R Credit Agreement provides for a $75 million revolving credit loan facility with a $65 million letter of credit sublimit and $10 million swing linesublimit. The obligations under the Second A&R Credit Agreement are guaranteed on a joint and several basis by each of our current subsidiaries, other than our immaterialsubsidiaries, and are secured by substantially all of our and our guarantors’ assets as collateral under the Third Amended and Restated Security Agreement dated as of theEffective Date (the “Security Agreement”).

Borrowings under the Second A&R Credit Agreement will mature on December 23, 2019. The Second A&R Credit Agreement requires Basic to repay to the lendersthe aggregate principal amount of all revolving credit loans on the Effective Date. The Company may voluntarily prepay loans under the Second A&R Credit Agreement,subject to customary notice requirements and minimum prepayment amounts. Basic must prepay loans under the Second A&R Credit Agreement if, for any reason, theaggregate outstanding amount of all loans and letter of credit obligations at any time exceed the borrowing base at such time. In this event, Basic must immediately prepayrevolving credit loans, swing line loans and letter of credit borrowings in an aggregate amount equal to the excess.

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Loans under the Second A&R Credit Agreement bear interest, at the Company’s option, at a rate equal to either (i) the London interbank offered rate (the “EurodollarRate”) plus a rate of 2.5% to 4.5% depending on the consolidated leverage ratio at the time of the determination or (ii) a base rate equal to the highest of (a) the federal fundsrate, plus 0.50%, (b) the prime rate then in effect publicly announced by Bank of America and (c) the Eurodollar Rate plus 1.0%, the highest is then is added to a rate rangingfrom 1.5% to 3.5% depending on the consolidated leverage ratio at the time of the determination.

The Second A&R Credit Agreement contains various covenants that, subject to agreed upon exceptions, limit our ability and the ability of certain of our subsidiariesto:

• incur indebtedness;

• grant liens;

• enter into sale and leaseback transactions;

• make loans, capital expenditures, acquisitions and investments;

• change the nature of business;

• acquire or sell assets or consolidate or merge with or into other companies;

• declare or pay dividends;

• enter into transactions with affiliates;

• enter into burdensome agreements;

• prepay, redeem or modify or terminate other indebtedness;

• change accounting policies and reporting practices;

• amend organizational documents; and

• use proceeds to fund any activities of or business with any person that is the subject of governmental sanctions.

The Second A&R Credit Agreement contains customary affirmative covenants, including covenants regarding the payment of taxes and other obligations,maintenance of insurance, reporting requirements and compliance with applicable laws and regulations. The Second A&R Credit Agreement further requires that Basicmaintain a Consolidated Fixed Charge Coverage Ratio (as defined in the Second A&R Credit Agreement) of not less than 1.00 to 1.00 for any time period during which aFinancial Covenant Trigger Period (as defined in the Second A&R Credit Agreement) is in effect.

If an event of default occurs under the Second A&R Credit Agreement, then the lenders may (i) terminate their commitments under the Second A&R CreditAgreement, (ii) declare any outstanding loans under the Second A&R Credit Agreement to be immediately due and payable, (iii) require that we cash collateralize our letter ofcredit obligations and (iv) foreclose on the collateral secured by the Security Agreement.

We had no borrowings and $51.6 million in letters of credit outstanding under the Second A&R Credit Agreement as of December 31, 2016, giving us $23.4 million ofavailable borrowing capacity. At December 31, 2016, we were in compliance with our covenants under the Second A&R Credit Agreement.

Term Loan Agreement On February 17, 2016, we entered into a Term Loan Credit Agreement (the “Original Term Loan Agreement”) with a syndicate of lenders and U.S. Bank National

Association, as administrative agent for the lenders. The Original Term Loan Agreement included two categories of borrowings: (a) the closing date term loan borrowings in anaggregate amount of $165.0 million, and (b) the delayed draw term loan borrowings in an aggregate principal amount not to exceed $ 15.0 million. The making of the term loansunder the Original Term Loan Agreement was subject to the satisfaction of certain conditions precedent, including, with respect to the delayed draw term loans, the consent ofthe lenders providing the delayed draw term loans. On the Effective Date, we entered into an Amended and Restated Term Loan Credit Agreement (the “Amended andRestated Term Loan Agreement”) with a syndicate of lenders and U.S. Bank National Association, as administrative agent for the lenders, which amended and restated theOriginal Term Loan Agreement. Under the Amended and Restated Term Loan Agreement, on the Effective Date, (i) the outstanding principal amount of pre-petition term loansof each pre-petition term lender were exchanged for loans under the Amended and Restated Term Loan Agreement in an amount equal to such pre-petition term lender’saggregate outstanding principal

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amount of pre-petition term loans as of the Effective Date, as determined immediately prior to such exchange and (ii) all accrued and unpaid interest on such pre-petition termloans as of the Effective Date are deemed to be accrued and unpaid interest on the loans. Following such exchange, the aggregate outstanding principal amount of the loansunder the Amended and Restated Term Loan Agreement was $164,175,000.

Borrowings under the Amended and Restated Term Loan Agreement will mature on February 26, 2021 unless, such date is not a business day, in which case theborrowings under the Amended and Restated Term Loan Agreement will mature on the next preceding business day. We may voluntarily prepay the loans under the Amendedand Restated Term Loan Agreement in whole or in part without premium or penalty, provided that certain conditions set forth therein are met. We are required to prepay theAmended and Restated Term Loan Agreement in the case of a change of control, certain sales of our assets, certain issuances of indebtedness and under certain othercircumstances, in which case such prepayment may be subject to an applicable premium.

Each loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to 13.50%. In addition, we willbe responsible for the applicable lenders’ fees, including a closing payment equal to 7.00% of the aggregate principal amount of commitments of each lender under theAmended and Restated Term Loan Agreement as of the effective date, and administrative agent fees.

The Amended and Restated Term Loan Agreement contains various covenants that, subject to agreed upon exceptions, limit Basic’s ability and the ability of certainof our subsidiaries to:

• incur indebtedness;• grant liens;• enter into sale and leaseback transactions;• make loans, capital expenditures, acquisitions and investments;• change the nature of business;• acquire or sell assets or consolidate or merge with or into other companies;• declare or pay dividends;• enter into transactions with affiliates;• enter into burdensome agreements;• prepay, redeem or modify or terminate other indebtedness;• change accounting policies and reporting practices;• amend organizational documents; and• use proceeds to fund any activities of or business with any person that is the subject of governmental sanctions. If an event of default occurs under the Amended and Restated Term Loan Agreement, then the term loan administrative agent may, with the consent of the required

lenders , or shall, at the direction of, the required lenders, (i) declare any outstanding loans under the Amended and Restated Term Loan Agreement to be immediately due andpayable, and (ii) exercise on behalf of itself and the lenders all rights and remedies available to it and the lenders under the applicable loan documents or applicable law orequity. The default rate under the Amended and Restated Term Loan Agreement is 16.50% per annum.

On the Effective Date, Basic entered into an Amended and Restated Security Agreement with certain of its subsidiaries and the term loan administrative agent (the“Term Loan Security Agreement”). The collateral under the Term Loan Security Agreement includes (as defined therein): (a) all Chattel Paper, all Collateral Accounts, allcommercial tort claims, all Contracts, all Deposit Accounts, all Documents, all Equipment, all Fixtures, all General Intangibles, all Instruments, all Intellectual Property, allInventory, all Investment Property (including without limitation the Pledged Equity and all Securities Accounts), all Letter of Credit Rights, all Liquid Assets, all Receivables,all Records, and all Supporting Obligations; (b) any and all additions, accessions and improvements to, all substitutions and replacements for and all products of or derived fromthe foregoing; and (c) all Proceeds of the foregoing. Under mortgages and deeds of trust, Basic and certain of its subsidiaries previously granted to the term loan administrativeagent liens on a substantial portion of their real properties to secure Basic’s obligations under the Amended and Restated Term Loan Agreement of the Company in effect at thetime of the filing of the Chapter 11 Cases. These liens continue to secure the obligations of Basic under the Amended and Restated Term Loan Agreement. Basic has also agreedto provide to the term loan administrative agent liens on additional real properties, subject to the terms and conditions of the Amended and Restated Term Loan Agreement.

At December 31, 2016, we were in compliance with our covenants under the Amended and Restated Term Loan Agreement.

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DIP FacilityOn October 27, 2016, in connection with the filing of the Chapter 11 Cases, the Company and its debtor subsidiaries entered into the Superpriority Secured Debtor-in-

Possession Term Loan Credit Agreement (the “DIP Facility”) with U.S. Bank National Association, as administrative agent, and the lenders party thereto. The DIP Facilityincluded commitments from the lenders thereto to provide delayed draw term loans of up to $90.0 million. The Company drew $30.0 million from the DIP Facility after theCourt entered its order approving the DIP Facility. Borrowings under the DIP Facility were paid in full on or prior to the Effective Date. The DIP Facility provided theCompany with interim financing during the pendency of the Chapter 11 Cases and terminated as of the Effective Date.

Other DebtWe have a variety of other capital leases and notes payable outstanding that are customary in our business. None of these debt instruments are individually material.

Our leases with Bank of America Leasing & Capital, LLC require us to maintain a minimum debt service coverage ratio of 1.05 to 1.00. There is a minimum liquidity covenantrequiring unrestricted cash and cash equivalents balances to be at or above $25.0 million. As of December 31, 2016, we had total capital leases of approximately $70.3 million.

Preferred StockAt December 31, 2016 and December 31, 2015, we had 5,000,000 shares of $.01 par value preferred stock authorized, of which none was designated, issued or

outstanding.

Other MattersOff-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financialcondition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Net Operating Losses

As of December 31, 2016, we had approximately $567.5 million of federal net operating loss carryforwards. Based on the weight of all available evidence includingthe future reversal of existing U.S. taxable temporary differences as of December 31, 2016, we believe that it is more likely than not that the benefit from certain federal andstate net operating loss carryforwards and other deductible temporary differences will not be realized. In recognition of this risk, we have provided a valuation allowance ofapproximately $189.2 million on the net deferred tax asset as a result of the company being in a cumulative three year pre-tax book loss position and absence of otherobjectively verifiable positive evidence including reversal of existing taxable temporary differences in these certain state tax jurisdictions.

Recent Accounting Pronouncements

Recently adoptedIn August, 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going

Concern,” which requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Underthe new standard, disclosures are required when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from thefinancial statement issuance date. The Update applies to all companies and is effective for the annual period ending after December 15, 2016, and all annual and interim periodsthereafter. Basic has adopted this pronouncement, which resulted in additional disclosures which have been included in Note 2. Going Concern, to these consolidated financialstatements.

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to arecognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU iseffective for annual periods beginning after December 15, 2015. Basic has adopted this pronouncement, which resulted in a reclassification of deferred debt costs related tolong-term debt from an asset to an offset of the related liability. The adoption of the ASU did not affect our method of amortizing debt issuance costs, and will not affect thestatement of operations.

In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” The main provision of this Updateis to simplify the presentation of deferred income taxes by requiring that

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deferred tax assets and liabilities be classified as noncurrent in the statement of financial position. This Update is effective for Basic in annual and interim periods beginningafter December 15, 2016, however early adoption is permitted. Basic has elected to adopt this ASU beginning in the interim period ended March 31, 2016, and retrospectivelyfor all periods presented. See Note: 14 for discussion of Basic’s adoption of this Update. Not yet adopted

In March 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Thepurpose of this Update to is to simplify overly complex areas of GAAP, while maintaining or improving the usefulness of the information. The areas for simplification in thisUpdate involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity orliabilities, and classification on the statement of cash flows. This Update is effective for Basic in annual periods beginning after December 15, 2016, including interim periodswithin those fiscal years.

In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” to simplify the measurement of inventory, which requires inventorymeasured using the first in, first out (FIFO) or average cost methods to be subsequently measured at the lower of cost and net realizable value. Net realizable value is theestimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. Currently, these inventory methods arerequired to be subsequently measured at the lower of cost or market. "Market" could be replacement cost, net realizable value, or net realizable value less an approximatelynormal profit margin. This update will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and will be appliedprospectively. Basic has evaluated this new accounting standard and determined it will not have an impact on our consolidated financial statements.

In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers-Deferral of the Effective Date,” that defers by one year the effective dateof ASU 2014-09, “Revenue from Contracts with Customers.” The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periodswithin that reporting period. ASU 2014-09 - “Revenue from Contracts with Customers" represented a comprehensive revenue recognition standard to supersede existing revenuerecognition guidance and align GAAP more closely with International Financial Reporting Standards (IFRS).

The core principle of the new guidance is that a company should recognize revenue to match the delivery of goods or services to customers to the consideration thecompany expects to be entitled in exchange for those goods or services. The standard creates a five step model that requires companies to exercise judgment when consideringthe terms of a contract and all relevant facts and circumstances. The standard allows for several transition methods: (a) a full retrospective adoption in which the standard isapplied to all of the periods presented, or (b) a modified retrospective adoption in which the standard is applied only to the most current period presented in the financialstatements, including additional disclosures of the standard’s application impact to individual financial statement line items.

We are currently determining the impact of the new standard on the revenue streams from the services we provide. Our approach includes performing a detailed reviewof key contracts representative of our different businesses and comparing historical accounting policies and practices to the new standard. Our services are primarily short-termin nature, and our assessment at this stage is that we do not expect the new revenue recognition standard will have a material impact on our financial statements upon adoption.We currently intend to adopt the new standard as of January 1, 2018.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The purpose of this Update is to increase transparency and comparability amongorganizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This Update is effective for Basicin annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Basic is in the process of determining if this pronouncement will havea material impact on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." This standard iseffective for Basic for fiscal years beginning after December 15, 2017. The amendments in this update are intended to clarify cash flow treatment of certain cash flow issueswith the objective of reducing diversity in practice. Early adoption is permitted, including adoption in an interim period. An entity that elects early adoption must adopt all ofthe amendments in the same period. Basic intends to adopt this standard as of January 1, 2018, and does not expect significant changes to the cash flow statement as a result.

In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory." Under current U.S. GAAP, therecognition of current and deferred income taxes for an intra-entity asset transfer is prohibited until the asset has been sold to an outside party. Under the new standard, anentity will recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in this update areeffective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. The amendments should beapplied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Basic is in theprocess of determining the

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whether this standard will have a material impact on our financial statements.

In November 2016 the FASB issued ASU 2016-18- "Statement of Cash Flows (Topic 230): Restricted Cash," which clarifies the treatment of cash inflows into andcash payments from restricted cash. The amendments in this Update apply to all entities that have restricted cash or restricted cash equivalents and are required to present astatement of cash flows under Topic 230. The amendments in this ASU require that a statement of cash flows explain the change during the period in the total of cash, cashequivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cashequivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.GAAP currently does not include specific guidance on the cash flow classification and presentation of changes in restricted cash or restricted cash equivalents for public entities.The amendments in this Update provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows, thereby reducing thediversity in practice described above.

The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscalyears. Early adoption is permitted, including adoption in an interim period. The amendments in this Update should be applied using a retrospective transition method to eachperiod presented. Basic intends to adopt this standard as of January 1, 2018, and does not expect significant changes to the cash flow statement as a result.

Impact of Inflation on OperationsInflation in the United States has been relatively low in recent years and did not have a material impact on our results of operations for the years ended December 31,

2016, 2015 and 2014. Although the impact of inflation has been insignificant in recent years, it is still a factor in the U.S. economy, and we tend to experience inflationarypressure on the cost of our equipment, materials and supplies as increasing oil and natural gas prices also increase activity in our areas of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As of December 31, 2016, we had no borrowings outstanding under agreements with market risk sensitive instruments, and were not party to any other material market

risk sensitive instruments.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Basic Energy Services, Inc.INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Management’s Report on Internal Control Over Financial Reporting 49Reports of Independent Registered Public Accounting Firm 50

Consolidated Balance Sheets as of December 31, 2016 and 2015 52 Consolidated Statements of Operations for the years ended December 31, 2016, 2015, and 2014 53 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2016, 2015, and 2014 54 Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015, and 2014 55

Notes to Consolidated Financial Statements 56

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MANAGEMENT’S REPORT ON

INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of Basic Energy Services, Inc. (“Basic” or the “Company”) is responsible for establishing and maintaining adequate internal control over financialreporting and for the assessment of the effectiveness of internal control over financial reporting for the Company. As defined by the Securities and Exchange Commission(Rule 13a-15(f) under the Exchange Act of 1934, as amended), internal control over financial reporting is a process designed by, or under the supervision of Basic’s principalexecutive and principal financial officers and effected by its Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles.

The Company’s internal control over financial reporting is supported by written policies and procedures that (1) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the Company’s transactions and dispositions of the Company’s assets; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of the consolidated financial statements in accordance with U.S. generally accepted accounting principles, and that receipts andexpenditures of the Company are being made only in accordance with authorization of the Company’s management and directors; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the consolidated financialstatements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policiesor procedures may deteriorate.

In connection with the preparation of the Company’s annual consolidated financial statements, management has undertaken an assessment of the effectiveness of theCompany’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control — Integrated Framework (2013) issued by theCommittee of Sponsoring Organizations of the Treadway Commission (the COSO Framework). Management’s assessment included an evaluation of the design of theCompany’s internal control over financial reporting and testing of the operational effectiveness of those controls.

Based on this assessment, management has concluded that as of December 31, 2016, the Company’s internal control over financial reporting was effective to providereasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally acceptedaccounting principles.

KPMG LLP, the independent registered public accounting firm that audited the Company’s consolidated financial statements included in this report, has issued anattestation report on the effectiveness of internal control over financial reporting.

/s/ T. M. “Roe” Patterson /s/ Alan KrenekT. M. “Roe” Patterson Alan KrenekChief Executive Officer Chief Financial Officer

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Report of Independent Registered Public Accounting Firm

The Board of Directors and StockholdersBasic Energy Services, Inc.:

We have audited Basic Energy Services, Inc.’s internal control over financial reporting as of December 31, 2016, based on criteria established in InternalControl - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Basic EnergyServices, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectivenessof internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting . Ourresponsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in allmaterial respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weaknessexists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also includedperforming such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for ouropinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’sinternal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts andexpenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have amaterial effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluationof effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate.

In our opinion, Basic Energy Services, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31,2016, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balancesheets of Basic Energy Services, Inc. and subsidiaries as of December 31, 2016 (Successor) and 2015 (Predecessor), and the related consolidatedstatements of operations, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2016 (Predecessor), andour report dated March 31, 2017 expressed an unqualified opinion on those consolidated financial statements.

KPMG LLP

Dallas, TexasMarch 31, 2017

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Report of Independent Registered Public Accounting Firm

The Board of Directors and ShareholdersBasic Energy Services, Inc.:

We have audited the accompanying consolidated balance sheets of Basic Energy Services, Inc. and subsidiaries as of December 31, 2016 (Successor)and 2015 (Predecessor), and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the three-yearperiod ended December 31, 2016 (Predecessor). In connection with our audits of the consolidated financial statements, we also have audited financialstatement Schedule II. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express anopinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Anaudit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Basic EnergyServices, Inc. and subsidiaries as of December 31, 2016 (Successor) and 2015 (Predecessor), and the results of their operations and their cash flows foreach of the years in the three-year period ended December 31, 2016 (Predecessor), in conformity with U.S. generally accepted accounting principles.Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole,present fairly in all material respects, the information set forth therein.

As described in note 1 to the consolidated financial statements, on December 9, 2016, the United States Bankruptcy Court for the District of Delawareentered an order confirming the petition for reorganization, which became effective December 23, 2016. Accordingly, the accompanying financialstatements have been prepared in conformity with Accounting Standards Codification 852, Reorganizations, for the Successor as a new entity with assetsand liabilities and capital structure having carrying amounts not comparable to prior periods described in Note 1.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Basic Energy Services,Inc.’s internal control over financial reporting as of December 31, 2016, based on the criteria established in Internal Control - Integrated Framework(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 31, 2017 expressed anunqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

KPMG LLP

Dallas, TexasMarch 31, 2017

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Basic Energy Services, Inc.Consolidated Balance Sheets

(in thousands, except share and per share data)

Successor Predecessor December 31, 2016 December 31, 2015

ASSETS Current assets: Cash and cash equivalents $ 98,875 $ 46,732Restricted cash 2,429 —Trade accounts receivable, net of allowance of $0 and $2,670 108,655 102,127Accounts receivable - related parties 31 35Income tax receivable 1,271 1,828Inventories 35,691 36,944Prepaid expenses 15,575 13,851Other current assets 2,003 9,968

Total current assets 264,530 211,485Property and equipment, net 488,848 846,290Deferred debt costs, net of amortization — 3,420Other intangible assets, net of amortization 3,458 66,745Other assets 11,324 10,241

Total assets $ 768,160 $ 1,138,181

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 47,959 $ 54,521Accrued expenses 51,329 59,380Current portion of long-term debt, net of $1,657 discount at December 31, 2016 38,468 48,651Other current liabilities 2,065 7,003

Total current liabilities 139,821 169,555Long-term debt, net of discounts $17,344 and premium of $956 at December 31, 2016 and 2015 respectively 184,752 828,664Deferred tax liabilities — 5,066Other long-term liabilities 29,179 28,558

Total liabilities 353,752 1,031,843Stockholders' equity: Predecessor common stock, $0.01 par value: 80,000,000 authorized, 43,500,032 shares issued and 41,196,680 sharesoutstanding at December 31, 2015 — 435Predecessor paid-in capital — 374,729Predecessor treasury stock, at cost 1,303,352 shares at December 31, 2015 — (12,014 )Successor preferred stock, $0.01 par value: authorized 5,000,000 shares; zero outstanding at December 31, 2016 — —Successor common stock; $0.01 par value; 80,000,000 shares authorized; and 26,095,431 shares issued and25,998,844 shares outstanding at December 31, 2016 261 —Successor additional paid-in capital 417,624 —Retained deficit — (256,812 )Successor treasury stock, at cost 96,587 shares at December 31, 2016 (3,477 ) —

Total stockholders' equity 414,408 106,338

Total liabilities and stockholder's equity $ 768,160 $ 1,138,181

See accompanying notes to consolidated financial statements.

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Basic Energy Services, Inc.Consolidated Statements of Operations

(Dollars in thousands, except per share amounts)

Predecessor Years ended December 31, 2016 2015 2014Revenues: Completion and remedial services $ 184,567 $ 307,550 $ 698,917Fluid services 191,725 258,597 369,774Well servicing 163,966 217,245 361,683Contract drilling 7,239 22,207 60,910

Total revenues 547,497 805,599 1,491,284

Expenses: Completion and remedial services 158,762 245,069 434,457Fluid services 161,535 196,155 265,105Well servicing 140,274 184,952 270,344Contract drilling 7,079 16,680 41,513General and administrative, including stock-based compensation of $17,675, $13,728, and $14,714in 2016, 2015 and 2014, respectively 135,331 143,458 167,301Depreciation and amortization 218,205 241,471 217,480Restructuring costs 20,743 — —Loss on disposal of assets 1,014 1,602 1,974Goodwill impairment 646 81,877 34,703

Total expenses 843,589 1,111,264 1,432,877Operating (loss) income (296,092 ) (305,665 ) 58,407

Other income (expense): Reorganization items, net 264,306 — —Interest expense (96,625 ) (67,964 ) (67,042 )Interest income 26 26 40Bargain purchase gain on acquisition 662 — —Other income 467 528 775Loss before income taxes (127,256 ) (373,075 ) (7,820 )Income tax (expense) benefit 3,883 131,330 (521 )Net loss $ (123,373) $ (241,745) $ (8,341)

Net loss available to common stockholders $ (123,373) $ (241,745) $ (8,341)

Loss per share of common stock: Basic $ (2.94) $ (5.97) $ (0.20)

Diluted $ (2.94) $ (5.97) $ (0.20)

See accompanying notes to consolidated financial statements.

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Basic Energy Services, Inc.Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

Additional Retained Total

Common Stock Paid-In Treasury Earnings Stockholders'

Shares Amount Capital Stock (Deficit) EquityDecember 31, 2013 (Predecessor) 43,500,032 435 363,674 (12,096) (6,726) 345,287Issuances of restricted stock — — (9,583) 9,583 — —Amortization of share based compensation — — 14,714 — — 14,714Purchase of treasury stock — — — (12,733) — (12,733)

Exercise of stock options / vesting ofrestricted stock — — 1,115 2,611 — 3,726

Net loss — — — — (8,341) (8,341)December 31, 2014 (Predecessor) 43,500,032 435 369,920 (12,635) (15,067) 342,653Issuances of restricted stock — — (3,779) 3,779 — —Amortization of share based compensation — — 13,728 — — 13,728Purchase of treasury stock — — — (5,742) — (5,742)

Exercise of stock options / vesting ofrestricted stock — — (5,140) 2,584 — (2,556)

Net loss — — — — (241,745) (241,745)December 31, 2015 (Predecessor) 43,500,032 435 374,729 (12,014) (256,812) 106,338Issuances of restricted stock — — (5,135) 5,135 — —Amortization of share based compensation — — 17,675 — — 17,675Purchase of treasury stock — — — (640) — (640)Net loss — — — — (123,373) (123,373)Implementation of Prepackaged Plan andApplication of Fresh Start Accounting: Cancellation of Predecessor equity (43,500,032) (435) (387,269) 7,519 380,185 —Issuances of Successor common stock and warrants 26,095,431 261 417,624 (3,477) — 414,408Balance - December 31, 2016 (Successor) 26,095,431 $ 261 $ 417,624 $ (3,477) $ — $ 414,408

See accompanying notes to consolidated financial statements.

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Basic Energy Services, Inc.

Consolidated Statements of Cash Flows(in thousands)

Predecessor

2016 2015 2014

Cash flows from operating activities:

Net loss $ (123,373) (241,745) (8,341)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities

Depreciation and amortization 218,205 241,471 217,480

Goodwill impairment 646 81,877 34,703

Bargain purchase gain (662) — —

Accretion on asset retirement obligation 147 134 132

Change in allowance for doubtful accounts (812) 638 (1,643)

Amortization of deferred financing costs 7,952 3,622 3,176

Amortization of premium on notes (257) (261) (242)

Non-cash compensation 27,723 13,728 14,714

Loss on disposal of assets 1,014 1,602 1,974

Deferred income taxes (4,403) (131,171) 87

Reorganization items, non-cash (332,854) — —

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable (5,712) 144,430 (41,143)

Inventories 2,112 7,846 (9,798)

Prepaid expenses and other current assets (239) (740) (14,435)

Other assets (1,094) (767) (1,810)

Accounts payable (6,563) 3,903 5,110

Income tax receivable 557 1,293 (204)

Other liabilities (4,449) 1,109 11,303

Accrued expenses 70,573 (31,430) 13,473

Net cash (used in) provided by operating activities (151,489) 95,539 224,536

Cash flows from investing activities:

Purchase of property and equipment (32,689) (53,868) (236,295)

Proceeds from sale of assets 3,284 8,109 39,835

Payments for other long-term assets — — (879)

Payments for businesses, net of cash acquired — (16,730) (16,090)

Net cash used in investing activities (29,405) (62,489) (213,429)

Cash flows from financing activities:

Proceeds from debt 165,000 8,816 16,000

Proceeds from Debtor-in-Possession Financing 38,390 — —

Payments of debt (84,881) (68,635) (47,894)

Change in restricted cash (2,429) — —

Proceeds from Rights Offering 125,000 — —

Change in treasury stock 2,837 (5,742) (12,733)

Tax withholding from exercise of stock options — (3) (362)

Exercise of employee stock options — 727 4,646

Deferred loan costs and other financing activities (10,880) (1,396) (2,381)

Net cash provided by (used in) financing activities 233,037 (66,233) (42,724)

Net increase (decrease) in cash and equivalents 52,143 (33,183) (31,617)

Cash and cash equivalents - beginning of year 46,732 79,915 111,532

Cash and cash equivalents - end of year (2016: Successor; 2015 and 2014: Predecessor) $ 98,875 46,732 79,915

See accompanying notes to consolidated financial statements.

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BASIC ENERGY SERVICES, INC.

Notes to Consolidated Financial StatementsDecember 31, 2016, 2015, and 2014

1. Basis of Presentation and Nature of Operations

Basic Energy Services, Inc. (“Basic” or the “Company”) provides a wide range of well site services to oil and natural gas drilling and producing companies, includingcompletion and remedial services, fluid services and well site construction services, well servicing and contract drilling. These services are primarily provided by Basic’s fleet ofequipment. Basic’s operations are concentrated in major United States onshore oil and natural gas producing regions located in Texas, New Mexico, Oklahoma, Kansas,Arkansas, Louisiana, Pennsylvania, West Virginia, Ohio, Wyoming, North Dakota, Colorado, California, Utah, Montana, and Kentucky. Basic’s reportable business segmentsare Completion and Remedial Services, Fluid Services, Well Servicing, and Contract Drilling. These segments are based on management’s resource allocation and performanceassessment in making decisions regarding the Company.

Voluntary Petitions Under Chapter 11 of the Bankruptcy Code

On October 25, 2016, Basic and certain of its subsidiaries (collectively with Basic, the “Debtors”) filed voluntary petitions (the cases commenced thereby, the“Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) on October 25, 2016 in the United States Bankruptcy Court for the Districtof Delaware (the “Court”). On December 9, 2016, the Court entered an order (the “Confirmation Order”) approving the First Amended Joint Prepackaged Chapter 11 Plan ofBasic Energy Services, Inc. and its Affiliated Debtors (as confirmed, the “Prepackaged Plan”). On December 23, 2016 (the “Effective Date”), the Prepackaged Plan becameeffective pursuant to its terms and the Debtors emerged from their Chapter 11 Cases.

2. Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. This assumes that the Companywill be able to realize its assets and discharge its liabilities in the normal course of business. Management believes that the implementation of the Prepackaged Plan and ouremergence from the Chapter 11 proceedings on the Effective Date have resolved the substantial doubt and the related uncertainty about our application of the going concernbasis of accounting.

3. Emergence from Chapter 11 and Fresh Start Accounting

In connection with the Company’s emergence from Chapter 11, on the Effective Date, the Company applied the provisions of fresh start accounting, pursuant toFinancial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, Reorganizations, (“ASC 852”), to its consolidated financial statements. TheCompany qualified for fresh start accounting because (i) the holders of existing voting shares of the Predecessor Company received less than 50% of the voting shares of theSuccessor Company and (ii) the reorganization value of the Company's assets immediately prior to confirmation was less than the post-petition liabilities and allowed claims.FASB ASC 852 requires that fresh start accounting be applied as of the date the Prepackaged Plan were approved, or as of a later date when all material conditions precedent toeffectiveness of the Prepackaged Plan are resolved, which occurred on December 23, 2016. We elected to apply fresh start accounting effective December 31, 2016, to coincidewith the timing of our normal December accounting period close. We evaluated the events between December 23, 2016 and December 31, 2016 and concluded that the use ofan accounting convenience date of December 31, 2016 (the “Convenience Date”) did not have a material impact on our results of operations or financial position. As such, theapplication of fresh start accounting was reflected in our Consolidated Balance Sheet as of December 31, 2016 and fresh start accounting adjustments related thereto wereincluded in our Consolidated Statements of Operations for the year ended December 31, 2016.

The implementation of the Prepackaged Plan and the application of fresh start accounting materially changed the carrying amounts and classifications reported in ourconsolidated financial statements and resulted in the Company becoming a new entity for financial reporting purposes. Accordingly, our consolidated financial statements forperiods prior to December 31, 2016 will not be comparable to our consolidated financial statements as of December 31, 2016 or for periods subsequent to December 31, 2016.References to “Successor” or “Successor Company” refer to the Company on or after December 31, 2016, after giving effect to the implementation of the Prepackaged Plan andthe application of fresh start accounting. References to “Predecessor” or “Predecessor Company” refer to the Company prior to December 31, 2016. Additionally, references toperiods on or after December 31, 2016 refer to the Successor and references to periods prior to December 31, 2016 refer to the Predecessor.

Upon the application of fresh start accounting, the Company allocated the reorganization value to its individual assets and liabilities in conformity with ASC 805,Business Combinations (“ASC 805”). Reorganization value represents the fair value of the Successor Company’s assets before considering liabilities. The excess reorganizationvalue over the fair value of identified tangible and intangible assets, if present, is reported as goodwill.

Under ASC 852, the Successor Company must determine a value to be assigned to the equity of the emerging company as of the date of adoption of fresh startaccounting. To facilitate this calculation, the Company estimated the enterprise value of the Successor Company by using a discounted cash flow (“DCF”) analysis under theincome approach. The Company also considered the guideline public company and guideline transactions methods under the market approach as reasonableness checks to theindications from the income approach.

Enterprise value represents the fair value of an entity’s interest-bearing debt and stockholders’ equity. In the disclosure statement associated with the PrepackagedPlan, which was confirmed by the Bankruptcy Court, the Company estimated a range of enterprise values between $425 million and $625 million, with a midpoint of $525million. The Company deemed it appropriate to use the midpoint between the low end and high end of the range to determine the final enterprise value of $525 million utilizedfor fresh-start accounting.

To estimate enterprise value utilizing the DCF method, the Company established an estimate of future cash flows for the period ranging from 2017 to 2025 anddiscounted the estimated future cash flows to present value. The expected cash flows for the period 2017 to 2025 were based on the financial projections and assumptionsutilized in the disclosure statement. The expected cash flows for the period 2017 to 2025 were derived from earnings forecasts and assumptions regarding growth and marginprojections, as applicable, and an effective tax rate of 38.5%. A terminal value was included, based on the cash flows of the final year of the forecast period.

The discount rate of 17.0% was estimated based on an after-tax weighted average cost of capital (“WACC”) reflecting the rate of return that would be expected by amarket participant. The WACC also takes into consideration a company specific risk premium reflecting the risk associated with the overall uncertainty of the financialprojections used to estimate future cash flows.

The guideline public company and guideline transaction analysis identified a group of comparable companies and transactions that have operating and financialcharacteristics comparable in certain respects to the Company, including, for example, comparable lines of business, business risks and market presence. Under thesemethodologies, certain financial multiples and ratios that measure financial performance and value are calculated for each selected company or transactions and then comparedto the implied multiples from the DCF analysis. The Company considered enterprise value as a multiple of each selected company and transactions publicly available earningsbefore interest, taxes, depreciation and amortization (“EBITDA”).

The estimated enterprise value and the equity value are highly dependent on the achievement of the future financial results contemplated in the projections that were setforth in the Prepackaged Plan. The estimates and assumptions made in the valuation are inherently subject to significant uncertainties. The primary assumptions for which thereis a reasonable possibility of the occurrence of a variation that would have significantly affected the reorganization value include the assumptions regarding revenue growth,operating expenses, the amount and timing of capital expenditures and the discount rate utilized.

Fresh start accounting reflects the value of the Successor Company as determined in the confirmed Prepackaged Plan. Under fresh start accounting, asset values areremeasured and allocated based on their respective fair values in conformity with the acquisition method of accounting for business combinations in ASC 805. Liabilitiesexisting as of the Effective Date, other than deferred taxes were recorded at the present value of amounts expected to be paid using appropriate risk adjusted interest rates.

Deferred taxes were determined in conformity with applicable accounting standards. Predecessor accumulated depreciation, accumulated amortization and retained deficit wereeliminated.

Machinery and Equipment

To estimate the fair value of machinery and equipment, the Company considered the income approach, the cost approach, and the sales comparison (market) approachfor each individual asset. The primary approaches that were relied upon to value these assets were the cost approach and the market approach. Although the income approachwas not applied to value the machinery and equipment assets individually, the Company did consider the earnings of the enterprise of which these assets are a part. When morethan one approach is used to develop a valuation, the various approaches are reconciled to determine a final value conclusion.

The typical starting point or basis of the valuation estimate is replacement cost new (RCN), reproduction cost new (CRN), or a combination of both. Once the RCNand CRN estimates are adjusted for physical and functional conditions, they are then compared to market data and other indications of value, where available, to confirm resultsobtained by the cost approach.

Where direct RCN estimates were not available or deemed inappropriate, the CRN for machinery and equipment was estimated using the indirect (trending) method, inwhich percentage changes in applicable price indices are applied to historical costs to convert them into indications of current costs. To estimate the CRN amounts, inflationindices from established external sources were then applied to historical costs to estimate the CRN for each asset.

The market approach measures the value of an asset through an analysis of recent sales or offerings of comparable property, and takes into account physical, functionaland economic conditions. Where direct or comparable matches could not be reasonably obtained, the Company utilized the percent of cost technique of the market approach.This technique looks at general sales, sales listings, and auction data for each major asset category. This information is then used in conjunction with each asset’s

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effective age to develop ratios between the sales price and RCN or CRN of similar asset types. A market-based depreciation curve was developed and applied to asset categorieswhere sufficient sales and auction information existed.

Where market information was not available or a market approach was deemed inappropriate, the Company developed a cost approach. In doing so, an indicated valueis derived by deducting physical deterioration from the RCN or CRN of each identifiable asset or group of assets. Physical deterioration is the loss in value or usefulness of aproperty due to the using up or expiration of its useful life caused by wear and tear, deterioration, exposure to various elements, physical stresses, and similar factors.

Functional and economic obsolescence related to these was also considered. Functional obsolescence due to excess capital costs was eliminated through the directmethod of the cost approach to estimate the RCN. Functional obsolescence was applied in the form of a cost-to-cure penalty to certain personal property assets needingsignificant capital repairs. Economic obsolescence was also applied to stacked and underutilized assets based on the status of the asset. Economic obsolescence was alsoconsidered in situations in which the earnings of the applicable business segment in which the assets are employed suggest economic obsolescence. When penalizing assets foreconomic obsolescence, an additional economic obsolescence penalty was levied, while considering scrap value to be the floor value for an asset.

Land and Buildings

In establishing the fair value of the real property assets, each of the three traditional approaches to value: the income approach, the market approach and the costapproach was considered. The Company primarily relied on the market and cost approaches.

Land - In valuing the fee simple interest in the land, the Company utilized the sales comparison approach (market approach). The sales comparison approach estimatesvalue based on what other purchasers and sellers in the market have agreed to as the price for comparable properties. This approach is based on the principle of substitution,which states that the limits of prices, rents and rates tend to be set by the prevailing prices, rents and rates of equally desirable substitutes. In conducting the sales comparisonapproach, data was gathered on comparable properties and adjustments were made for factors including market conditions, size, access/frontage, zoning, location, andconditions of sale. Greatest weight was typically given to the comparable sales in proximity and similar in size to each of the owned sites. In some cases, market participantswere contacted to augment the analysis and to confirm the conclusions of value.

Building & Site Improvements - In valuing the fee simple interest in the real property improvements, the Company utilized the direct and indirect methods of the costapproach. For the direct method cost approach analysis, the starting point or basis of the cost approach is the RCN. In order to estimate the RCN of the buildings and siteimprovements, various factors were considered including building size, year built, number of stories, and the breakout of the space, property history, and maintenance history.The Company used the data collected to calculate the RCN of the buildings using recognized estimating sources for developing replacement, reproduction, and insurable valuecosts.

In the application of the indirect method cost approach, the first step is to estimate a CRN for each improvement via the indirect (trending) method of the costapproach. To estimate the CRN amounts, the Company applied published inflation indices obtained from third party sources to each asset’s historical cost to convert the knowncost into an indication of current cost. As historical cost was used as the starting point for estimating RCN, we only considered this approach for assets with historical records.

Once the RCN and CRN of the improvements was computed, the Company estimated an allowance for physical depreciation for the buildings and land improvementsbased upon its respective age.

Intangible Assets

The financial information used to estimate the fair values of intangible assets was consistent with the information used in estimating the Company’s enterprise value.Tradenames were valued primarily utilizing the relief from royalty method of the income approach. Significant inputs and assumptions included remaining useful lives, theforecasted revenue streams, applicable royalty rates, tax rates, and applicable discount rates. Customer relationships were considered in the analysis, but based on the valuationunder the excess earnings methodology, no value was attributed to customer relationships.

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The following table reconciles the enterprise value to the estimated fair value of Successor common stock par value $0.01 per share (“Successor Common Stock”), as ofthe Effective Date (in thousands, except share and per share value):

Enterprise value $ 525,000Plus: Cash and cash equivalents and restricted cash 101,304Plus: Non-operating assets 11,324Fair value of invested capital 637,628Less: Fair value of Term Loan (152,838 )Less: Fair value of Capital Leases (70,382 )Stockholders' equity at December 31, 2016 $ 414,408

Shares outstanding at December 31, 2016 25,998,844

Per share value $ 15.94In connection with fresh start accounting, the Company’s Term Loan and capital leases were recorded at fair value of $223.2 million as determined using a market

approach. The difference between the $242.2 million principal amount and the fair value recorded in fresh start accounting is being amortized over the life of the debt using theeffective interest rate method.

The fair values of the Warrants was estimated to be $4.04. The fair value of the Warrants were estimated using a Black-Scholes pricing model with the followingassumptions:

Stock price $14.66Strike price $55.25Expected volatility 55.7 %Expected dividend rate —Risk free interest rate 2.35 %Expiration date December 23, 2023

The fair value of these Warrants was estimated using Level 2 inputs.

The following table reconciles the enterprise value to the estimated reorganization value as of the Effective Date (in thousands):

Enterprise Value $ 525,000Plus: Cash and cash equivalents and restricted cash 101,304Plus: Other non-operating assets 11,324Fair Value of Invested Capital 637,628Plus: Current liabilities, excluding current portion of long-term debt 101,353Plus: Non-current liabilities 29,179Reorganization Value of Successor Assets $ 768,160

In determining reorganization value, the Company estimated fair value for property and equipment using significant unobservable inputs based on market and incomeapproaches. Basic commissioned third-party appraisal services to estimate the fair value of its revenue-generating fixed assets and considered current market conditions andmanagement’s judgment to estimate the fair value of non-revenue-generating assets.

Consolidated Balance Sheet

The adjustments set forth in the following consolidated balance sheet reflect the effect of the consummation of the transactions contemplated by the Plan (reflected in thecolumn “Reorganization Adjustments”) as well as estimated fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh StartAdjustments”). The explanatory notes highlight methods used to determine estimated fair values or other amounts of assets and liabilities, as well as significant assumptions.

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As of December 31, 2016

PredecessorCompany

ReorganizationAdjustments

Fresh StartAdjustments

SuccessorCompany

(in thousands, except share amounts)

ASSETS Current assets: Cash and cash equivalents $ 27,308 $ 71,567 A $ — $ 98,875

Restricted cash 8,391 (5,962) B — 2,429

Trade accounts receivable 108,655 — — 108,655

Accounts receivable - related parties 31 — — 31

Income tax receivable 1,271 — — 1,271

Inventories 35,691 — — 35,691

Prepaid expenses 15,575 — — 15,575

Other current assets 8,506 — (6,503) M 2,003

Total current assets 205,428 65,605 (6,503) 264,530

Property and equipment, net 667,239 — (178,391) N 488,848

Deferred debt costs, net of amortization 1,249 66 C (1,315) O —

Other intangible assets, net of amortization 57,227 — (53,769) P 3,458

Other assets 11,324 — — 11,324

Total assets $ 942,467 $ 65,671 $ (239,978) $ 768,160LIABILITIES AND STOCKHOLDERS'

EQUITY

Current liabilities not subject to compromise:

Accounts payable $ 47,932 $ 27 D $ — $ 47,959

Accrued expenses 65,056 (13,879) E 152 51,329

Current portion of long-term debt 76,865 (36,740) F (1,657) Q 38,468

Other current liabilities 2,065 — — 2,065

Total current liabilities 191,918 (50,592) (1,505) 139,821

Long-term liabilities not subject to compromise: Long-term debt 39,570 162,525 G (17,343) R 184,752

Deferred tax liabilities 663 — (663) S —

Other long-term liabilities 29,179 — — 29,179

Total liabilities not subject to compromise 261,330 111,933 (19,511) 353,752

Liabilities subject to compromise 979,437 (979,437) H — —

Total liabilities 1,240,767 (867,504) (19,511) 353,752

Stockholders' equity: Predecessor common stock, $0.01 par value: 435 (435) I — —

Predecessor paid-in capital 387,269 — (387,269) J —

Predecessor treasury stock (7,519) 7,519 L — —

Successor preferred stock, $0.01 par value: — — — —

Successor common stock; $0.01 par value; — 261 I — 261

Successor additional paid-in capital — 410,540 J 7,084 J 417,624

Retained deficit (678,485) 518,767 K 159,718 T —

Successor treasury stock — (3,477) L — (3,477)

Total stockholders' equity $ (298,300) $ 933,175 $ (220,467) $ 414,408

Total liabilities and stockholder's equity $ 942,467 $ 65,671 $ (239,978) $ 768,160

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Reorganization Adjustments

A. Reflects the cash receipts (payments) from implementation of the Prepackaged Plan (in thousands):

Record receipt of $125 million under the Rights Offering for New Convertible Notes deemedto have been converted to Successor Common Stock $ 125,000Capital Lease Fees & Expenses (62 )Creditors' professional fees transferred to Fee Escrow Account (6,630 )Debtors' professional fees transferred to Fee Escrow Account (9,526 )Fees for establishing the Fee Escrow Account (5 )Payment of ABL Facility Claims on account of fees, charges, or other amounts payable underthe ABL Credit Agreement. (66 )Payment of ABL Facility Claims on account of interest payable under the ABL CreditAgreement. (618 )Payment of Allowed Term Loan Claim on account of fees, charges, or other amounts payableunder the Term Loan Agreement (41 )Payment of closing fees & expenses for the Amended and Restated ABL Credit Agreement (1,610 )Payment of Debtor in Possession Facility Claims, Fees and Accrued Interest (40,296 )Payment of Fees and Expenses under Debtor in Possession Facility Order (452 )Payments to 2019 & 2022 Notes Indenture Trustees (89 )Release of restricted cash to unrestricted cash 5,962Net Cash Receipts $ 71,567

B. Reflects the release of restricted cash to unrestricted cash.

C. Reflects the fees to reinstate the Asset Based Loan under the Prepackaged Plan.

D. Rights offering expense for filing with the SEC.

E. Reflects payment (receipts) of expenses incurred as part of the reorganization and paid in accordance with the Prepackaged Plan upon emergence (in thousands).

Debtors' professional fees transferred to Fee Escrow Account $ 9,526Creditors' professional fees transferred to Fee Escrow Account 6,630Payment of Debtor in Possession Facility Claims 1,907Payment of ABL Facility Claims on account of interest payable under the ABL Credit Agreement. 618Payment of Fees and Expenses under Debtor in Possession Facility Order 452Payments to 2019 & 2022 Notes Indenture Trustees 89Income tax withholding (3,477 )To reinstate claim deemed to be accrued and unpaid interest under the Amended and Restated Term Loan. (1,866 )Net Payment of Accrued Expenses $ 13,879

F. Repayment of the Debtor in Possession Financing of $38.4 million partially offset by the reinstatement of short-term portion of the Term Loan debt of $1.6 millionin accordance with the Prepackaged Plan

G. Reinstatement of long-term debt in accordance with the Prepackaged Plan.

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H. Liabilities subject to compromise were settled as follows in accordance with the Prepackaged Plan (in thousands):

Outstanding principal amount of Term Loan $ 164,175Accrued interest on Term Loan 1,866Outstanding Unsecured Notes 775,000Accrued interest on Unsecured Notes 38,396Balance of Liabilities Subject to Compromise 979,437

To reinstate the outstanding principal amount of Term Loan under the Amended and RestatedTerm Loan Facility. $ (164,175 )To reinstate claim deemed to be accrued and unpaid interest under the Amended and RestatedTerm Loan. (1,866 )Record issuance of equity to holders of Unsecured Notes (273,103 )Recoveries pursuant to the Prepackaged Plan (439,144 )

Net Gain on Debt Discharge $ 540,293

I. Cancellation of Predecessor equity to additional paid-in capital and distribution of 26,095,431 shares of Successor Common Stock at par value of $0.01 per share.

Shares IssuedRights Offering 10,825,620Stock to Predecessor shareholders 75,001Management Incentive Plan (MIP) 269,810Stock to Senior Note claimants 14,925,000Total Successor Shares Issued 26,095,431

J. Record additional paid-in capital adjustments on elimination of Predecessor equity and issuance of shares of Successor Common Stock.

K. Reflects the cumulative impact of the reorganization adjustments on retained deficits discussed above (in thousands):

Net Gain on Debt discharge $ 540,293Capital lease fees and expenses (62 )Fees for establishing the fee escrow account (5 )Issuance of warrants per terms of the Plan and the Warrant Agreement (8,358 )Payment of Allowed Term Loan Claim on account of fees, charges, or other amounts payable under the TermLoan Agreement (42 )Payment of closing fees and expenses for the Amended and Restated ABL Credit Agreement (1,610 )Record distribution of 0.5% of the 15 million shares of Successor Common Stock (subject to dilution) to holders of Existing Equity Interests. (1,372 )

Restricted stock amortization expense (216 )

Record issuance of shares for initially vested RSUs under MIP (9,861 )Net retained earnings impact resulting from implementation of the Prepackaged Plan $ 518,767

L. Elimination of Predecessor Treasury Stock and withholding on shares issued under MIP.

Fresh Start Adjustments

M. Impairment of assets held for sale.

N. Reflects a $178.4 million reduction in the net book value of property and equipment to estimated fair value.

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The following table summarizes the components of property and equipment, net of the Predecessor Company and Successor Company (in thousands):

Successor Predecessor Land $ 21,010 $ 22,135 Buildings and improvements 39,588 74,263 Well service units and equipment 96,365 349,001 Fracturing/test tanks 75,506 354,398 Pumping equipment 85,247 345,991 Fluid services equipment 57,359 265,599 Disposal facilities 47,507 161,220 Contract drilling equipment 12,257 112,289 Rental equipment 32,582 96,724 Light vehicles 12,722 65,434 Software 641 21,914 Other 3,885 13,533 Construction equipment 1,485 15,223 Brine and fresh water stations 2,694 16,035 488,848 1,913,759Less accumulated depreciation and amortization — 1,246,520 Total $ 488,848 $ 667,239

O. Elimination of deferred debt costs.

P. Reflects a $53.8 million reduction of the net book value of intangible assets.

Q. Discount to fair market value of current portion of capital leases of $1.7 million, and increase in the fair market value of operating leases of $0.2 million.

R. Discount to fair market value of Term Loan of $11.4 million and long-term portion of capital leases of $6 million.

S. Elimination of deferred tax liabilities.

T. Reflects the cumulative impact of fresh start adjustments as discussed above (in thousands):

Retained Deficit Adjustments Eliminate historical loss from Predecessor $ (678,485 )Eliminate retained deficit due to Prepackaged Plan Effects upon emergence 518,767Net retained deficit impact of fresh start accounting $ (159,718 )

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4. Reorganization Items, Net

Reorganization items, net represent liabilities settled, net of amounts incurred subsequent to the Chapter 11 filing as a direct result of the Prepackaged Plan and areclassified as Reorganization items, net in our Consolidated Statement of Operations. The following table summarizes reorganization items (in thousands):

Predecessor

Period from January 1, 2016 to December

31, 2016Net gain on debt discharge $ 540,293Change in assets resulting from fresh start adjustments (220,467 )Professional fees (19,693 )Write-off of debt issuance costs (23,319 )Fair value of warrants issued to Predecessor stockholders (8,358 )Distribution of Successor Company equity to Predecessor Company equity holders (1,372 )DIP credit agreement financing costs (669 )Other costs (2,109 )Total $ 264,306

5. Summary of Significant Accounting PoliciesPrinciples of ConsolidationThe accompanying consolidated financial statements include the accounts of Basic and its wholly-owned subsidiaries. Basic has no variable interest in any other

organization, entity, partnership, or contract. All intercompany transactions and balances have been eliminated.Fresh start accountingAs discussed in Note 3, “Emergence from Chapter 11 and Fresh Start Accounting,” we applied fresh start accounting as of the December 31, 2016 Convenience Date.

Under fresh start accounting, the reorganization value, as derived from the enterprise value established in the Prepackaged Plan, was allocated to our assets and liabilities basedon their fair values in accordance with FASB ASC 805. The amount of deferred income taxes recorded was determined in accordance with FASB ASC 740, “Income Taxes”(“FASB ASC 740”). Therefore, all assets and liabilities reflected in the consolidated Balance Sheet of the Successor Company were recorded at fair value or, for deferredincome taxes, in accordance with the respective accounting policy described below. For additional information regarding the impact of fresh start accounting on ourConsolidated Balance Sheet as of December 31, 2016, see Note 3. Emergence from Chapter 11 and Fresh Start Accounting.

Estimates, Risks and UncertaintiesPreparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America

requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent liabilities at the date of theconsolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Management uses historical and other pertinent information todetermine these estimates. Actual results could differ from those estimates. Areas where critical accounting estimates are made by management include:

• Depreciation and amortization of property and equipment and intangible assets• Impairment of property and equipment, goodwill and intangible assets• Allowance for doubtful accounts• Litigation and self-insured risk reserves• Fair value of assets acquired and liabilities assumed in an acquisition• Stock-based compensation• Income taxes

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Revenue RecognitionCompletion and Remedial Services — Completion and remedial services consists primarily of pumping services focused on cementing, acidizing and fracturing,

nitrogen units, coiled tubing units, snubbing units, thru-tubing and rental and fishing tools. Basic recognizes revenue when services are performed, collection of the relevantreceivables is probable, persuasive evidence of an arrangement exists and the price is fixed or determinable. Basic prices completion and remedial services by the hour, day orproject depending on the type of service performed. When Basic provides multiple services to a customer, revenue is allocated to the services performed based on the fair valueof the services.

Fluid Services — Fluid services consists primarily of the sale, transportation, treatment, storage and disposal of fluids used in the drilling, production and maintenanceof oil and natural gas wells, and well site construction and maintenance services. Basic recognizes revenue when services are performed, collection of the relevant receivables isprobable, persuasive evidence of an arrangement exists and the price is fixed or determinable. Basic prices fluid services by the job, by the hour or by the quantities sold,disposed of or hauled.

Well Servicing — Well servicing consists primarily of maintenance services, workover services, completion services, plugging and abandonment services and rigmanufacturing and servicing. Basic recognizes revenue when services are performed, collection of the relevant receivables is probable, persuasive evidence of an arrangementexists and the price is fixed or determinable. Basic prices well servicing by the hour or by the day of service performed. Rig manufacturing revenue is recognized when the rig isaccepted by the customer, based on the completed contract method by individual rig.

Contract Drilling — Contract drilling consists primarily of drilling wells to a specified depth using drilling rigs. Basic recognizes revenues based on either a“daywork” contract, in which an agreed upon rate per day is charged to the customer, a “footage” contract, in which an agreed upon rate is charged per the number of feetdrilled, or a “turnkey” contract, in which an agreed upon single rate is charged for a drilled well.

Taxes assessed on sales transactions are presented on a net basis and are not included in revenue.

Cash and Cash EquivalentsBasic considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. Basic maintains its excess cash in various

financial institutions, where deposits may exceed federally insured amounts at times.

Fair Value of Financial InstrumentsThe following table summarizes the carrying amounts and fair value of the financial instruments as of December 31, 2016 and 2015. Fair value is defined as the

amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Pursuant to thePrepackaged Plan, the Predecessor Company's Senior Notes were exchanged for Successor Common Stock.

The carrying amounts of cash and cash equivalents, trade accounts receivable, accounts receivable-related parties, accounts payable and accrued expenses approximatefair value because of the short maturities of these instruments. The carrying amount of our revolving credit facility recorded as long-term debt also approximates fair value dueto its variable-rate characteristics. The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of December 31,2016 and 2015 (in thousands):

Successor Predecessor Fair Value December 31, 2016 December 31, 2015 Hierarchy Level Carrying Amount Fair Value Carrying Amount Fair Value7.75% Senior Notes due 2019,excluding premium 1 $ — $ — $ 475,000 $ 399,0007.75% Senior Notes due 2022,excluding premium 1 — — 300,000 238,500Term Loan 3 152,838 152,838 — —Capital Leases 3 70,382 70,382 111,063 111,063Warrants 3 8,358 8,358 — —

Inventories

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For rental and fishing tools, inventories consisting mainly of grapples, controls and drill bits are stated at the lower of cost or market, with cost being determined on theaverage cost method. Other inventories, consisting mainly of manufacturing raw materials, rig components, repair parts, drilling and completion materials and gravel, are heldfor use in the operations of Basic and are stated at the lower of cost or market, with cost being determined on the first-in, first-out (“FIFO”) method.

Property and EquipmentProperty and equipment are stated at cost or at estimated fair value at acquisition date if acquired in a business combination. Expenditures for repairs and maintenance

are charged to expense as incurred and additions and improvements that significantly extend the lives of the assets are capitalized. Upon sale or other retirement of depreciableproperty, the cost and accumulated depreciation and amortization are removed from the related accounts and any gain or loss is reflected in operations. All property andequipment are depreciated or amortized (to the extent of estimated salvage values) on the straight-line method and the estimated useful lives of the assets are as follows:

Buildings and improvements 20-30 yearsWell service units and equipment 3-15 yearsFluid services equipment 5-10 yearsBrine and fresh water stations 15 yearsFracturing/test tanks 10 yearsPumping equipment 5-10 yearsConstruction equipment 3-10 yearsContract drilling equipment 3-10 yearsDisposal facilities 10-15 yearsVehicles 3-7 yearsRental equipment 2-15 yearsAircraft 10 yearsSoftware and computers 3 years

The components of a well servicing rig generally require replacement or refurbishment during the well servicing rig’s life and are depreciated over their estimateduseful lives, which ranges from 3 to 15 years. The costs of the original components of a purchased or acquired well servicing rig are not maintained separately from the base rig.

Impairments

Long-lived assets, which include property, plant and equipment, and purchased intangibles subject to amortization with finite lives, are evaluated at least annually orwhenever events or changes in circumstances (“triggering events”) indicate that the carrying value of certain long-lived assets may not be recoverable. An impairment loss isrecorded in the period in which it is determined that the carrying amount of a long-lived asset is not recoverable. The determination of recoverability is made based upon theestimated undiscounted future net cash flows of assets grouped at the lowest level for which there are identifiable cash flows independent of the cash flows of other groups ofassets with such cash flows to be realized over the estimated remaining useful life of the primary asset within the asset group, excluding interest expense. The Companydetermined the lowest level of identifiable cash flows that are independent of other asset groups to be at the reporting unit level, which consists of the well servicing, fluidservicing, completion and remedial services and contract drilling. If the estimated undiscounted future net cash flows are less than the carrying amount of the related assets, animpairment loss is determined by comparing the fair value with the carrying value of the related assets.

Deferred Debt Costs

Basic capitalizes certain costs associated with borrowing, such as lender’s fees and related attorney’s fees. These costs are amortized and included in interest expenseusing the effective interest method.

Deferred debt costs were approximately $13.3 million net of accumulated amortization of $5.2 million, and $26.6 million net of accumulated amortization of $13.5million at December 31, 2016 and December 31, 2015, respectively. Amortization of deferred debt costs totaled approximately $6.0 million, $3.1 million and $3.2 million forthe years ended December 31, 2016, 2015 and 2014, respectively. In 2016, Basic recorded $2.4 million of accelerated amortization of debt issuance costs related to theamended revolving credit agreement. As of the Effective Date, Basic wrote down all deferred costs. In 2015, Basic recorded $508,000 of accelerated amortization of debtissuance costs related to the amended revolving credit agreement.

Goodwill and Other Intangible Assets

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Goodwill and other intangible assets not subject to amortization are tested for impairment annually or more frequently if events or changes in circumstances indicatethat the asset might be impaired. A qualitative assessment is allowed to determine if goodwill is potentially impaired. The qualitative assessment determines whether it is morelikely than not that a reporting unit’s fair value is less than its carrying amount. If it is more likely that not that the fair value of the reporting unit is less than the carryingamount, then the two step impairment test is performed. First, the fair value of each reporting unit is compared to its carrying value to determine whether an indication ofimpairment exists. If impairment is indicated, then the fair value of the reporting unit’s goodwill is determined by allocating the unit’s fair value to its assets and liabilities(including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. The amount of impairment for goodwill is measured as theexcess of its carrying value over its fair value. Basic completes its assessment of goodwill impairment as of December 31 each year.

The Company performed an assessment of goodwill related to the completion and remedial reporting unit as of September 30, 2016. This assessment indicated that$646,000 was impaired as of September 30, 2016. This non-cash charge eliminated all of the Company’s existing goodwill as of September 30, 2016, and is included asImpairment of Goodwill on the consolidated statement of operations. See Note 19 for further disclosure regarding goodwill.

The changes in the carrying amount of goodwill for the year ended December 31, 2016, are as follows (in thousands):

Completion

and Remedial

ServicesBalance as of December 31, 2015 $ —Goodwill adjustments 646Goodwill impairment (646 )Balance as of December 31, 2016 $ —

Basic had trade names of $3.4 million as of December 31, 2016 and $1.9 million as of December 31, 2015. Trade names have a 15 year life and are tested forimpairment annually.

Basic’s intangible assets subject to amortization were as follows (in thousands):

Successor Predecessor

December 31, 2016 December 31, 2015

Customer relationships $ — $ 92,660Non-Compete agreements — 13,057Trade names 3,410 1,939Other intangible assets 48 2,086

3,458 109,742Less accumulated amortization — 42,997Intangible assets subject to amortization, net $ 3,458 $ 66,745

Amortization expense for the years ended December 31, 2016, 2015 and 2014 was approximately $8.5 million, $8.9 million, and $8.6 million, respectively.Amortization expense for the next five succeeding years is expected to be as follows (in thousands):

Amortization

Expense

2017 $ 2372018 2372019 2372020 2372021 237Thereafter 2,273

$ 3,458

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Developed technology are amortized over a 5-year life. Trade names are amortized over 15-year life.

Stock-Based CompensationBasic has historically compensated our directors, executives and employees through the awarding of stock options and restricted stock. Basic accounted for stock

option and restricted stock awards in 2016, 2015, and 2014 using a grant date fair-value based method, resulting in compensation expense for stock-based awards beingrecorded in our consolidated statements of operations. For performance based restricted stock awards, compensation expense is recognized in the Company's financialstatements based on their grant date fair value. Basic utilizes (i) the closing stock price on the date of grant to determine the fair value of vesting restricted stock awards and(ii) a Monte Carlo simulation to determine the fair value of restricted stock awards with a combination of market and service vesting criteria. The Monte Carlo simulation modelutilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award. Theexpected volatility utilized in the model was estimated using the historical volatility of the Company and our peer companies. The risk-free interest rate was based on the U.S.treasury rate for a term commensurate with the expected life of the grant, and judgment is required in estimating the amount of stock-based awards that are expected to beforfeited. Stock options issued are valued on the grant date using the Black-Scholes-Merton option pricing model and restricted stock issued is valued based on the fair value ofBasic’s common stock at the grant date. Because the determination of these various assumptions is subject to significant management judgment and different assumptions couldresult in material differences in amounts recorded in Basic’s consolidated financial statements, management believes that accounting estimates related to the valuation of stockoptions are critical.

For further discussion of our share-based compensation, see Note 14. Predecessor Incentive Plan.

Income TaxesWe record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In making such determination, we consider all available

positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financialoperations. In the event we were to determine that we would be able to realize our deferred income tax assets in the future in excess of their net recorded amount, we wouldmake an adjustment to the valuation allowance which would reduce the provision for income taxes.

Accounts ReceivableBasic estimates its allowance for losses on accounts receivable based on past collections and expectations for future collections. Basic regularly reviews accounts for

collectability. After all collection efforts are exhausted, if the balance is still determined to be uncollectable, the balance is written off. Expense related to the write off ofuncollected accounts is recorded in general and administrative expense. Realized losses have been within management’s expectations.

Concentrations of Credit RiskFinancial instruments, which potentially subject Basic to concentration of credit risk, consist primarily of temporary cash investments and trade receivables. Basic

restricts investment of temporary cash investments to financial institutions with high credit standing. Basic’s customer base consists primarily of multi-national and independentoil and natural gas producers. It performs ongoing credit evaluations of its customers but generally does not require collateral on its trade receivables. Credit risk is consideredby management to be limited due to the large number of customers comprising its customer base. Basic maintains an allowance for potential credit losses on its tradereceivables, and such losses have been within management’s expectations.

Basic did not have any one customer which represented 10% or more of consolidated revenue for 2016, 2015 or 2014.

Asset Retirement ObligationsBasic is required to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement

of tangible long-lived assets and capitalize an equal amount as a cost of the asset depreciating it over the life of the asset. Subsequent to the initial measurement of the assetretirement obligation, the obligation is adjusted at the end of each quarter to reflect the passage of time, changes in the estimated future cash flows underlying the obligation,acquisition or construction of assets, and settlements of obligations.

EnvironmentalBasic is subject to extensive federal, state and local environmental laws and regulations. These laws, which are constantly changing, regulate the discharge of materials

into the environment and may require Basic to remove or mitigate the adverse environmental effects of disposal or release of petroleum, chemical and other substances atvarious sites. Environmental expenditures are expensed or capitalized depending on the future economic benefit. Expenditures that relate to an existing condition

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caused by past operations and that have no future economic benefits are expensed. Liabilities for expenditures of a non-capital nature are recorded when environmentalassessment and/or remediation is probable and the costs can be reasonably estimated.

Litigation and Self-Insured Risk ReservesBasic estimates its reserves related to litigation and self-insured risks based on the facts and circumstances specific to the litigation and self-insured claims and its past

experience with similar claims. Basic maintains accruals in the consolidated balance sheets to cover self-insurance retentions. Please see Note 10. Commitments andContingencies for further discussion.

Recent Accounting Pronouncements

Recently adoptedIn August, 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going

Concern,” which requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Underthe new standard, disclosures are required when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from thefinancial statement issuance date. The Update applies to all companies and is effective for the annual period ending after December 15, 2016, and all annual and interim periodsthereafter. Basic has adopted this pronouncement, which resulted in additional disclosures which have been included in Note 2. Going Concern, to these consolidated financialstatements.

In April 2015, the FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires that debt issuance costs related to arecognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU iseffective for annual periods beginning after December 15, 2015. Basic has adopted this pronouncement, which resulted in a reclassification of deferred debt costs related tolong-term debt from an asset to an offset of the related liability. The adoption of the ASU did not affect our method of amortizing debt issuance costs and will not affect thestatement of operations.

In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.” The main provision of this Updateis to simplify the presentation of deferred income taxes by requiring that deferred tax assets and liabilities be classified as noncurrent in the statement of financial position. ThisUpdate is effective for Basic in annual and interim periods beginning after December 15, 2016, however early adoption is permitted. Basic has elected to adopt this ASUbeginning in the interim period ended March 31, 2016, and retrospectively for all periods presented. See Note: 14 for discussion of Basic’s adoption of this Update. Not yet adopted

In March 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” Thepurpose of this Update to is to simplify overly complex areas of GAAP, while maintaining or improving the usefulness of the information. The areas for simplification in thisUpdate involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity orliabilities, and classification on the statement of cash flows. This Update is effective for Basic in annual periods beginning after December 15, 2016, including interim periodswithin those fiscal years.

In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” to simplify the measurement of inventory, which requires inventorymeasured using the first in, first out (FIFO) or average cost methods to be subsequently measured at the lower of cost and net realizable value. Net realizable value is theestimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. Currently, these inventory methods arerequired to be subsequently measured at the lower of cost or market. "Market" could be replacement cost, net realizable value, or net realizable value less an approximatelynormal profit margin. This update will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and will be appliedprospectively. Basic has evaluated this new accounting standard and determined it will not have an impact on our consolidated financial statements.

In August 2015, the FASB issued ASU 2015-14, “Revenue from Contracts with Customers-Deferral of the Effective Date,” that defers by one year the effective dateof ASU 2014-09, “Revenue from Contracts with Customers.” The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periodswithin that reporting period. ASU 2014-09 - “Revenue from Contracts with Customers" represented a comprehensive revenue recognition standard to supersede existing revenuerecognition guidance and align GAAP more closely with International Financial Reporting Standards (IFRS).

The core principle of the new guidance is that a company should recognize revenue to match the delivery of goods or services to customers to the consideration thecompany expects to be entitled in exchange for those goods or services. The standard creates a five step model that requires companies to exercise judgment when consideringthe terms of a contract and all relevant

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facts and circumstances. The standard allows for several transition methods: (a) a full retrospective adoption in which the standard is applied to all of the periods presented, or(b) a modified retrospective adoption in which the standard is applied only to the most current period presented in the financial statements, including additional disclosures ofthe standard’s application impact to individual financial statement line items.

We are currently determining the impact of the new standard on the revenue streams from the services we provide. Our approach includes performing a detailed reviewof key contracts representative of our different businesses and comparing historical accounting policies and practices to the new standard. Our services are primarily short-termin nature, and our assessment at this stage is that we do not expect the new revenue recognition standard will have a material impact on our financial statements upon adoption.We currently intend to adopt the new standard as of January 1, 2018.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The purpose of this Update is to increase transparency and comparability amongorganizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This Update is effective for Basicin annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Basic is in the process of determining if this pronouncement will havea material impact on its consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15-"Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments." This standard iseffective for Basic for fiscal years beginning after December 15, 2017. The amendments in this update are intended to clarify cash flow treatment of certain cash flow issueswith the objective of reducing diversity in practice. Early adoption is permitted, including adoption in an interim period. An entity that elects early adoption must adopt all ofthe amendments in the same period. Basic intends to adopt this standard as of January 1, 2018, and does not expect significant changes to the cash flow statement as a result.

In October 2016, the FASB issued ASU 2016-16 "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other than Inventory." Under current U.S. GAAP, therecognition of current and deferred income taxes for an intra-entity asset transfer is prohibited until the asset has been sold to an outside party. Under the new standard, anentity will recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in this update areeffective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. The amendments should beapplied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Basic is in theprocess of determining whether this standard will have a material impact on our financial statements.

In November 2016 the FASB issued ASU 2016-18- "Statement of Cash Flows (Topic 230): Restricted Cash," which clarifies the treatment of cash inflows into andcash payments from restricted cash. The amendments in this Update apply to all entities that have restricted cash or restricted cash equivalents and are required to present astatement of cash flows under Topic 230. The amendments in this ASU require that a statement of cash flows explain the change during the period in the total of cash, cashequivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cashequivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.GAAP currently does not include specific guidance on the cash flow classification and presentation of changes in restricted cash or restricted cash equivalents for public entities.The amendments in this Update provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows, thereby reducing thediversity in practice described above.

The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscalyears. Early adoption is permitted, including adoption in an interim period. The amendments in this Update should be applied using a retrospective transition method to eachperiod presented. Basic intends to adopt this standard as of January 1, 2018, and does not expect significant changes to the cash flow statement as a result.

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6. Property and Equipment

The following table summarizes the components of property and equipment for the Predecessor Company as of December 31, 2015, and for the Successor Company as ofDecember 31, 2016, and after the fair value adjustments (in thousands):

Successor Predecessor

December 31, December 31,

2016 2015Land $ 21,010 $ 19,893Buildings and improvements 39,588 73,599Well service units and equipment 96,365 488,003Fracturing/test tanks 75,506 363,346Pumping equipment 85,247 345,938Fluid services equipment 57,359 268,249Disposal facilities 47,507 166,371Contract drilling equipment 12,257 112,068Rental equipment 32,582 94,970Light vehicles 12,722 67,521Software 641 21,920Other 3,885 16,672Construction equipment 1,485 15,174Brine and fresh water stations 2,694 13,761

488,848 2,067,485Less accumulated depreciation and amortization — 1,221,195Property and equipment, net $ 488,848 $ 846,290

Basic is obligated under various capital leases for certain vehicles and equipment that expire at various dates during the next five years. The table below summarizesthe gross amount of property and equipment and related accumulated amortization recorded under capital leases and included above for the Predecessor Company as ofDecember 31, 2015, and for the Successor Company as of December 31, 2016, and after the fair value adjustments (in thousands):

Successor Predecessor

December 31, December 31,

2016 2015Fluid services equipment $ 29,372 $ 129,459Pumping equipment 12,806 43,573Light vehicles 5,729 33,424Contract drilling equipment 999 6,493Well service units and equipment — 541Construction equipment 28 288

48,934 213,778Less accumulated amortization — 82,679

$ 48,934 $ 131,099

Amortization of assets held under capital leases of approximately $35.5 million, $41.9 million and $37.6 million for the years ended December 31, 2016, 2015 and2014, respectively, is included in depreciation and amortization expense in the consolidated statements of operations.

7. Acquisitions

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In 2015 and 2014, Basic acquired either all or substantially all of the assets of each of the following businesses, each of which were accounted for using the purchasemethod of accounting. The following table summarizes the final values at the date of acquisition (in thousands):

Closing Date Total Cash Paid (net of cash acquired)

Pioneer Fishing and Rental, Inc. September 17, 2014 $ 16,090Total 2014 $ 16,090

Harbor Resources, LLC July 17, 2015 $ 4,500Aerion Rental, LLC July 24, 2015 1,997Grey Rock Pressure Pumping, LLC August 31, 2015 10,233

Total 2015 $ 16,730

In conjunction with the acquisition of Grey Rock Pressure Pumping, LLC, the Company financed a portion of the assets under capital leases subsequent to the purchasedate. The Company received $8.8 million from the lessor, which is included as proceeds from debt on the Company’s Consolidated Statement of Cash Flows.

The operations of each of the acquisitions listed above are included in Basic’s statement of operations as of each respective closing date. The pro forma effect of theacquisitions completed in 2015 and 2014 are not material to the reported results of operations, either individually or when aggregated.

8. Long-Term DebtLong-term debt consists of the following (in thousands):

Successor Predecessor

December 31, December 31,

2016 2015

Credit Facilities: Term Loan $ 164,175 $ —7.75% Senior Notes due 2019 — 475,0007.75% Senior Notes due 2022 — 300,000Capital leases and other notes 78,046 111,063Unamortized discounts (premiums) (19,001 ) (8,748 )

223,220 877,315

Less current portion 38,468 48,651Long-term debt $ 184,752 $ 828,664

Debt DiscountsDiscounts on debt for the year ended December 31, 2016 represent unamortized discount to fair market value of Term Loan of $11.4 million and long-term portion of

capital leases of $6.0 million, and short-term portion of of capital leases of $1.6 million.

Unsecured NotesOn February 15, 2011, we issued $275.0 million aggregated principal amount of 7.75% Senior Notes due 2019 (the “2019 Notes”). On June 13, 2011, we issued an

additional $200.0 million aggregate principal amount of 2019 Notes, resulting in outstanding 2019 Notes with an aggregate principal amount of $475.0 million.On October 16, 2012, we issued $300.0 million aggregate principal amount of 7.75% Senior Notes due 2022 (the “2022 Notes” and together with the 2019 Notes, the

"Unsecured Notes"). Pursuant to the Prepackaged Plan, on the Effective Date, all of the all outstanding obligations under the Unsecured Notes and all the related indentureswere cancelled and discharged in exchange for common shares of the Successor company. For more information regarding the Prepackaged Plan, see Note 3.

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Second Amended and Restated Revolving Credit Facility

On November 26, 2014, we entered into an amended and restated $300.0 million revolving credit facility (the “Amended and Restated Credit Agreement") with asyndicate of lenders and Bank of America, N.A., as administrative agent for the lenders. On the Effective Date, the Company entered into a Second Amended and Restated ABLCredit Agreement (the "Second A&R Credit Agreement") with Bank of America, N.A., as administrative agent for the lenders (the “Credit Facility Administrative Agent”), acollateral management agent, the swing line lender and a letters of credit issuer, Wells Fargo Bank, National Association, as a collateral management agent and syndicationagent, and the financial institutions party thereto, as lenders.

The Second A&R Credit Agreement provides for a $75 million revolving credit loan facility with a $65 million letter of credit sublimit and $10 million swing linesublimit. The obligations under the Second A&R Credit Agreement are guaranteed on a joint and several basis by each of our current subsidiaries, other than our immaterialsubsidiaries, and are secured by substantially all of our and our guarantors' assets as collateral under the Third Amended and Restated Security Agreement dated as of theEffective Date (described below).

Borrowings under the Second A&R Credit Agreement will mature on December 23, 2019. The Second A&R Credit Agreement required Basic to repay to the lendersthe aggregate principal amount of all revolving credit loans on the Effective Date. The Company may voluntarily prepay loans under the Second A&R Credit Agreement,subject to customary notice requirements and minimum prepayment amounts. Basic must prepay loans under the Second A&R Credit Agreement if, for any reason, theaggregate outstanding amount of all loans and letter of credit obligations at any time exceed the borrowing base at such time. In this event, Basic must immediately prepayrevolving credit loans, swing line loans and letter of credit borrowings in an aggregate amount equal to the excess.

Loans under the Second A&R Credit Agreement bear interest, at the Company’s option, at a rate equal to either (i) the London interbank offered rate (the “EurodollarRate”) plus a rate of 2.5% to 4.5% depending on the consolidated leverage ratio at the time of the determination or (ii) a base rate equal to the highest of (a) the federal fundsrate, plus 0.50%, (b) the prime rate then in effect publicly announced by Bank of America and (c) the Eurodollar Rate plus 1.0%, the highest is then is added to a rate rangingfrom 1.5% to 3.5% depending on the consolidated leverage ratio at the time of the determination.

The Second A&R Credit Agreement contains various covenants that, subject to agreed upon exceptions, limit our ability and the ability of certain of our subsidiariesto:

• incurindebtedness;

• grantliens;

• enter into sale and leasebacktransactions;

• make loans, capital expenditures, acquisitions andinvestments;

• change the nature ofbusiness;

• acquire or sell assets or consolidate or merge with or into othercompanies;

• declare or paydividends;

• enter into transactions withaffiliates;

• enter into burdensomeagreements;

• prepay, redeem or modify or terminate otherindebtedness;

• change accounting policies and reportingpractices;

• amend organizational documents;and

• use proceeds to fund any activities of or business with any person that is the subject of governmentalsanctions.

The Second A&R Credit Agreement contains customary affirmative covenants, including covenants regarding the payment of taxes and other obligations, maintenanceof insurance, reporting requirements and compliance with applicable laws and regulations. The Second A&R Credit Agreement further requires that Basic maintain aConsolidated Fixed Charge Coverage Ratio (as defined in the Second A&R Credit Agreement) of not less than 1.00 to 1.00 for any time period during which a FinancialCovenant Trigger Period (as defined in the Second A&R Credit Agreement) is in effect.

If an event of default occurs under the Second A&R Credit Agreement, then the lenders may (i) terminate their commitments under the Second A&R CreditAgreement, (ii) declare any outstanding loans under the Second A&R Credit Agreement to be immediately due and payable, (iii) require that we cash collateralize our letter ofcredit obligations and (iv) foreclose on the collateral secured by the Security Agreement.

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Basic had no borrowings and $51.6 million of letters of credit outstanding under the Second A&R Credit Agreement as of December 31, 2016, giving Basic $23.4million of available borrowing capacity. At December 31, 2016, Basic was in compliance with its covenants under the Second A&R Credit Agreement.

Amended and Restated Term Loan Agreement

On February 17, 2016, we entered into the Term Loan Credit Agreement (the “Original Term Loan Agreement”) with a syndicate of lenders and U.S. Bank NationalAssociation, as administrative agent for the lenders. The Original Term Loan Agreement included two categories of borrowings (collectively, the “Term Loans”): (a) the closingdate term loan borrowings in an aggregate amount of $165.0 million, and (b) the delayed draw term loan borrowings in an aggregate principal amount not to exceed $15.0million. The making of the term loans under the Original Term Loan Agreement was subject to the satisfaction of certain conditions precedent, including, with respect to thedelayed draw term loans, the consent of the lenders providing the delayed draw term loans.

On the Effective Date, we entered into an Amended and Restated Term Loan Credit Agreement (the “Amended and Restated Term Loan Agreement”, and togetherwith the Second A&R Credit Agreement, the "Credit Agreements") with a syndicate of lenders and U.S. Bank National Association, as administrative agent for the lenders (the“Term Loan Administrative Agent”), which amended and restated the Original Term Loan Agreement. Under the Amended and Restated Term Loan Agreement, on theEffective Date, (i) the outstanding principal amount of pre-petition term loans of each pre-petition term lender were exchanged for loans under the Amended and Restated TermLoan Agreement in an amount equal to such pre-petition term lender’s aggregate outstanding principal amount of pre-petition term loans as of the Effective Date, as determinedimmediately prior to such exchange and (ii) all accrued and unpaid interest on such pre-petition term loans as of the Effective Date are deemed to be accrued and unpaid intereston the loans. Following such exchange, the aggregate outstanding principal amount of the loans under the Amended and Restated Term Loan Agreement was $164.2 million.

Borrowings under the Amended and Restated Term Loan Agreement will mature on February 26, 2021. We may voluntarily prepay the loans under the Amended andRestated Term Loan Agreement in whole or in part without premium or penalty, provided that certain conditions set forth therein are met. We are required to prepay theAmended and Restated Term Loan Agreement in the case of a change of control, certain sales of our assets, certain issuances of indebtedness and under certain othercircumstances, in which case such prepayment may be subject to an applicable premium.

Each loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to 13.50%. In addition, we willbe responsible for the applicable lenders’ fees, including a closing payment equal to 7.00% of the aggregate principal amount of commitments of each lender under theAmended and Restated Term Loan Agreement as of the effective date, and administrative agent fees.

The Amended and Restated Term Loan Agreement contains various covenants that, subject to agreed upon exceptions, limit Basic’s ability and the ability of certainof our subsidiaries to:

• incur indebtedness;• grant liens;• enter into sale and leaseback transactions;• make loans, capital expenditures, acquisitions and investments;• change the nature of business;• acquire or sell assets or consolidate or merge with or into other companies;• declare or pay dividends;• enter into transactions with affiliates;• enter into burdensome agreements;• prepay, redeem or modify or terminate other indebtedness;• change accounting policies and reporting practices;• amend organizational documents; and• use proceeds to fund any activities of or business with any person that is the subject of governmental sanctions.

If an event of default occurs under the Amended and Restated Term Loan Agreement, then the term loan administrative agent may, with the consent of the requiredlenders, or shall, at the direction of the required lenders (i) declare any outstanding loans under the Amended and Restated Term Loan Agreement to be immediately due andpayable and (ii) exercise on behalf of itself and the lenders all rights and remedies available to it and the lenders under the applicable loan documents or applicable law orequity. The default rate under the Amended and Restated Term Loan Agreement is 16.50% per annum. There is a minimum liquidity covenant requiring unrestricted cash andcash equivalents balances to be at or above $25.0 million.

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Term Loan Security Agreement

On the Effective Date, Basic entered into an Amended and Restated Security Agreement with certain of its subsidiaries and the Term Loan Administrative Agent (the"Term Loan Security Agreement"). The collateral under the Term Loan Security Agreement includes (as defined therein): (a) all Chattel Paper, all Collateral Accounts, allcommercial tort claims, all Contracts, all Deposit Accounts, all Documents, all Equipment, all Fixtures, all General Intangibles, all Instruments, all Intellectual Property, allInventory, all Investment Property (including without limitation the Pledged Equity and all Securities Accounts), all Letter of Credit Rights, all Liquid Assets, all Receivables,all Records, and all Supporting Obligations; (b) any and all additions, accessions and improvements to, all substitutions and replacements for and all products of or derived fromthe foregoing; and (c) all Proceeds of the foregoing.

Under mortgages and deeds of trust, Basic and certain of its subsidiaries previously granted to the Term Loan Administrative agent liens on a substantial portion oftheir real properties to secure Basic’s obligations under the Amended and Restated Term Loan Agreement of the Company in effect at the time of the filing of the Chapter 11Cases. These liens continue to secure the obligations of Basic under the Amended and Restated Term Loan Agreement. Basic has also agreed to provide to the Term LoanAdministrative Agent liens on additional real properties, subject to the terms and conditions of the Amended and Restated Term Loan Agreement.

Credit Facility Security Agreement

On the Effective Date, the Company entered into a Third Amended and Restated Security Agreement (the “Credit Facility Security Agreement”) with certain of itssubsidiaries and the Credit Facility Administrative Agent. Under the Credit Facility Security Agreement, the Credit Facility Administrative Agent was granted security interestsin certain collateral, including (as defined therein): (a) all Accounts; (b) all Specified ABL Facility Priority Collateral; (c) all Deposit Accounts, Securities Accounts andCommodity Accounts (excluding accounts that contain only Proceeds of the Term Loan Priority Collateral or proceeds of the Term Loan and the Term Loan Proceeds CollateralAccount); (d) all accessions to, substitutions for and replacements of the foregoing; and (d) all Proceeds of the foregoing.

Intercreditor Agreement

On the Effective Date, in connection with the Credit Agreements , the Company entered into an Intercreditor Agreement (the “Intercreditor Agreement”) with theCredit Facility Administrative Agent, the Term Loan Administrative Agent and the guarantors party thereto.

The Intercreditor Agreement establishes various inter-lender terms, including, without limitation, priority of liens, permitted actions by each party, application ofproceeds, exercise of remedies in the case of a default, releases of liens and limitations on the amendment of the Credit Agreements without the consent of the other party.

Other DebtBasic has a variety of other capital leases and notes payable outstanding, which is generally customary in Basic’s business. None of these debt instruments is material

individually. Basic’s leases with Banc of America Leasing & Capital, LLC require Basic to maintain a minimum debt service coverage ratio of 1.05 to 1.00. There is aminimum liquidity covenant requiring unrestricted cash and cash equivalents balances to be at or above $25.0 million. At December 31, 2016, Basic was in compliance with thiscovenant.

As of December 31, 2016 the aggregate maturities of debt, including capital leases, for the next five years and thereafter are as follows (in thousands):

Debt Capital Leases2017 $ 1,650 $ 39,3452018 1,650 33,6462019 1,650 8,1682020 1,650 1,1232021 157,575 —Thereafter — —

$ 164,175 $ 82,282

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Basic’s interest expense consisted of the following (in thousands):

Predecessor

Years ended December 31,

2016 2015 2014Cash payments for interest $ 49,621 $ 61,587 $ 61,873Commitment and other fees paid 2,898 2,484 2,767Amortization of debt issuance costs and premium on senior secured notes 9,295 3,362 2,934Change in accrued interest 34,719 563 (269)Capitalized interest — (139) (349)Other 92 107 86Total interest expense $ 96,625 $ 67,964 $ 67,042

9. Fair Value Measurements

Recurring fair value measurements

Fair value is the price that would be received to sell an asset or the amount paid to transfer a liability in an orderly transaction between market participants (an exitprice) at the measurement date. Fair value is a market based measurement considered from the perspective of a market participant. The Company uses market data orassumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation. Theseinputs can be readily observable, market corroborated, or unobservable. If observable prices or inputs are not available, unobservable prices or inputs are used to estimate thecurrent fair value, often using an internal valuation model. These valuation techniques involve some level of management estimation and judgment, the degree of which isdependent on the item being valued. The Company primarily applies a market approach for recurring fair value measurements using the best available information whileutilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company also follows the provisions of ASC Topic 820, Fair Value Measurement, for non-financial assets and liabilities measured at fair value on a non-recurring basis. As it relates to Basic, ASC Topic 820 applies to certain non-financial assets and liabilities as may be acquired in a business combination and thereby measuredat fair value; measurements of the fair value of goodwill and measurements of property impairments.

There is a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets foridentical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company classifies fair value balances based onthe observability of those inputs. The three levels of the fair value hierarchy are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Active markets are those in which transactionsfor the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 — Inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable. These inputs are either directlyobservable in the marketplace or indirectly observable through corroboration with market data for substantially the full contractual term of the asset or liability being measured.

Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration isgiven to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In valuing certain assets and liabilities, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. For disclosure purposes, assetsand liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. TheCompany’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchylevels. Basic did not have any assets or liabilities that were measured at fair value on a recurring basis at December 31, 2016 and 2015

Non-recurring fair value measurements

The Company performed an assessment of goodwill as of September 30, 2016. For step one of the impairment testing, the Company tested its reporting units forgoodwill impairment. The Company’s well servicing, fluid services and contract drilling reporting units do not carry any goodwill, and were not subject to the test.

To estimate the fair value of the reporting units, we primarily used level 1 and level 3 inputs from the fair value hierarchy, which included a weighting of thediscounted cash flow method and the public company guideline method (level 3 inputs) of determining fair value of a business unit. In order to validate the reasonableness of theestimated fair values obtained for the reporting units, a reconciliation of fair value to the value of invested capital debt and equity (level 1 inputs) was performed for each unit ona stand-alone basis. A control premium, derived from market transaction data, was used in this reconciliation to ensure that fair values were reasonably stated in conjunctionwith our capitalization. The measurement date for our common stock price and market capitalization was the closing price on September 30, 2016.

Based on the results of step one of the impairment test, impairment was indicated in the completion and remedial reporting unit. As such, the Company was required toperform step two assessment on the potentially impaired reporting unit. Step two requires the allocation of the estimated fair value to the tangible and intangible assets andliabilities of the respective reporting unit. This assessment indicated that goodwill of $646,000 was considered impaired as of September 30, 2016. This non-cash chargeeliminated all of the Company’s existing goodwill as of September 30, 2016.

10. Commitments and ContingenciesEnvironmental

Basic is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection of the environment.Basic cannot predict the future impact of such standards and requirements which are subject to change and can have retroactive effectiveness. Basic continues to monitor thestatus of these laws and regulations. Management believes the likelihood of new environmental regulations resulting in a material adverse impact to Basic’s financial position,liquidity, capital resources or future results of operations is unlikely.

Currently, Basic has not been fined, cited or notified of any environmental violations that would have a material adverse effect upon its financial position, liquidity orcapital resources other than the situation noted below. However, management does recognize that by the very nature of its business, material costs could be incurred in the nearterm to maintain compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible regulation orliabilities, the unknown timing and extent of the corrective actions which may be required, the determination of Basic’s liability in proportion to other responsible parties andthe extent to which such expenditures are recoverable from insurance or indemnification.

LitigationFrom time to time, Basic is a party to litigation or other legal proceedings that Basic considers to be a part of the ordinary course of business. Basic is not currently

involved in any legal proceedings that it considers probable or reasonably possible, individually or in the aggregate, to result in a material adverse effect on its financialcondition, results of operations or liquidity.

Operating LeasesBasic leases certain property and equipment under non-cancelable operating leases. The terms of the operating leases generally range from 12 to 60 months with

varying payment dates throughout each month.

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As of December 31, 2016, the future minimum lease payments under non-cancelable operating leases are as follows (in thousands):

Year ended December 31, 2016

2017 $ 4,8052018 3,9352019 3,3242020 2,0012021 1,646

Thereafter 1,789Total $ 17,500

Rent expense approximated $11.7 million, $13.9 million and $16.9 million for 2016, 2015 and 2014, respectively.

Basic leases rights for the use of various brine and fresh water wells and disposal wells ranging in terms from month-to-month up to 99 years. The above table reflectsthe future minimum lease payments if the lease contains a periodic rental. However, the majority of these leases require payments based on a royalty percentage or a volumeusage.

Employment AgreementsUnder the Amended and Restated Employment Agreement with T. M. “Roe” Patterson, Chief Executive Officer and President of Basic, initially effective through December 31,2017, Mr. Patterson was entitled to an annual salary of $665,000, to be adjusted subject to review by the Compensation Committee of the Board. Under this employmentagreement, Mr. Patterson is eligible from time to time to receive grants of stock options and other long-term equity incentive compensation under the terms of Basic’s equitycompensation plans. In addition, upon a qualified termination of employment, Mr. Patterson would be entitled to three times his annual base salary plus his current annualincentive target bonus for the full year in which the termination of employment occurred. If employment is terminated for certain reasons within the six months preceding or thetwelve months following the change of control of the Company, Mr. Patterson would be entitled to a lump sum severance payment equal to three times the sum of his annualbase salary plus the higher of (i) his current incentive target bonus for the full year in which the termination of employment occurred or (ii) the highest annual incentive bonusreceived by him for any of the last three fiscal years.

Basic also has entered into employment agreements with various other executive officers. Under these agreements, if the officer’s employment is terminated for certainreasons, he would be entitled to a lump sum severance payment equal to either 0.75 times to 1.5 times the sum of his annual base salary plus his current annual incentive targetbonus for the full year in which the termination occurred. If employment is terminated for certain reasons within the six months preceding or the twelve months following thechange of control of the Company, he would be entitled to a lump sum severance payment equal to either 1.0 or 2.0 times the sum of his annual base salary plus the higher of(i) his current incentive target bonus for the full year in which the termination of employment occurred or (ii) the highest annual incentive bonus received by him for any of thelast three fiscal years.

Self-Insured Risk AccrualsBasic is self-insured up to retention limits as it relates to workers’ compensation, general liability claims, and medical and dental coverage of its employees. Basic

generally maintains no physical property damage coverage on its rig fleet, with the exception of certain of its 24-hour workover rigs, newly manufactured rigs and pumpingservices equipment. Basic has deductibles per occurrence for workers’ compensation, general liability claims, and medical and dental coverage of $5.0 million, $1.0 million and$400,000, respectively. Basic has a $1.0 million deductible per occurrence for automobile liability. Basic maintains accruals in the accompanying consolidated balance sheetsrelated to self-insurance retentions by using third-party data and claims history. At December 31, 2016 and 2015, Basic classified the workers’ compensation self-insured riskreserve between short-term and long-term, with $7.0 million and $7.5 million being allocated to short-term and $15.6 million and $15.9 million being allocated to long-term,respectively.

At December 31, 2016 and December 31, 2015, self-insured risk accruals totaled approximately $35.0 million, net of $19,000 receivable for medical and dentalcoverage, and $30.8 million, net of $73,000 receivable for medical and dental coverage, respectively.

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11. Accrued ExpensesThe accrued expenses are as follows (in thousands):

Successor Predecessor December 31, 2016 December 31, 2015Compensation related $ 18,744 $ 14,048Workers' compensation self-insured risk reserve 6,956 7,481Health self-insured risk reserve 3,753 3,935Accrual for receipts 4,178 5,320Ad valorem taxes 2,626 2,078Sales tax 1,652 1,634Insurance obligations 9,576 3,769Professional fee accrual 946 729Fuel accrual 958 693Accrued interest 1,940 19,693

$ 51,329 $ 59,380

12. Predecessor Stockholders’ EquityOn the Effective Date, by operation of the Prepackaged Plan, all agreements, instruments, and other documents evidencing, relating to or connected with any equity

interests of the Company, including the outstanding shares of the Company’s common stock, par value $0.01 per share, issued and outstanding immediately prior to theEffective Date (the “Predecessor Common Stock”), and any rights of any holder in respect thereof, were deemed cancelled, discharged and of no force or effect.

Common StockAt December 23, 2016 and December 31, 2015, Basic had authorized 80,000,000 shares of Basic’s common stock, par value $.01 per share, and 43,500,032 shares

issued and 41,196,680 shares outstanding.In March 2014, Basic granted various employees 414,900 restricted shares of common stock that vest over a three-year period and 294,909 shares that vest over a four-

year period.In March 2015, Basic granted certain members of management 888,104 restricted shares of Predecessor Common Stock that vest over a three-year period.In March 2016, Basic granted certain members of management 790,263 restricted shares of Predecessor Common Stock that vest over a three-year period.On December 23, 2016, pursuant to the Prepackaged Plan, all unvested Predecessor Common Stock was cancelled, but effectively converted to Successor Common

Stock, based on a 570-to-1 reverse stock split, and immediately vested.

Treasury StockIn May 2012, Basic announced its Board of Directors reinstated the share repurchase program initially adopted in 2008 and suspended in 2009. The program allowed

the repurchase of up to $50.0 million of Basic’s shares of Predecessor Common Stock from time to time in open market or private transactions, at Basic’s discretion. Thenumber of shares purchased and the timing of purchases is based on several factors, including the price of the Predecessor Common Stock, general market conditions, availablecash and alternative investment opportunities. During 2015, Basic repurchased 913,600 shares for a total price of approximately $4.5 million (an average of approximately $4.90per share), inclusive of commissions and fees. Following the Effective Date, Basic deems this prior share repurchase program terminated with respect to any SuccessorCommon Stock

Basic also acquired treasury shares through net share settlements for payment of payroll taxes upon the vesting of restricted stock. Basic repurchased a total of 229,932shares of Predecessor Common Stock during 2016 and 230,048 shares of shares of Predecessor Common Stock during 2015 through net share settlements.

On December 31, 2016, as part of the Prepackaged Plan, all treasury stock representing Predecessor Common Stock was cancelled.

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Preferred StockAt December 31, 2016 and 2015, Basic had 5,000,000 shares of preferred stock, par value $.01 per share, authorized, of which none was designated, issued or

outstanding.

13. Successor Stockholders' Equity

Common StockOn December 23, 2016, as part of the Prepackaged Plan, Basic had 80,000,000 shares of Basic’s common stock, par value $.01 per share, authorized, 26,095,431

shares issued and 25,998,844 shares outstanding at December 31, 2016.On December 23, 2016, Basic granted certain members of management 809,416 restricted common stock units, one third of which immediately vested on the Effective

Date and the remainder will vest over a two-year period in equal installments.

Treasury StockBasic acquired treasury shares through net share settlements for payment of payroll taxes upon the vesting of restricted stock units. Basic repurchased a total of

96,587 Successor common shares through net share settlements during December 27, 2016 through December 31, 2016.

Preferred Stock

At December 31, 2016 Basic had 5,000,000 shares of preferred stock, par value $.01 per share, authorized, of which none was designated, issued or outstanding.

14. Predecessor Incentive Plan

Predecessor Incentive PlanIn May 2003, Basic’s board of directors and stockholders approved the Basic 2003 Incentive Plan (as amended effective May 22, 2013) (the “Predecessor Plan”),

which provided for granting of incentive awards in the form of stock options, restricted stock, performance awards, bonus shares, phantom shares, cash awards and other stock-based awards to officers, employees, directors and consultants of Basic. The Predecessor Plan provided for the issuance of 11,350,000 shares of Predecessor Common Stock. Ofthese shares, approximately 2,095,334 shares of Predecessor Common Stock were available for grant as of December 31, 2015.

There were no options granted under the Predecessor Plan during 2016, 2015 or 2014.

During the years ended December 31, 2016, 2015 and 2014, compensation expense related to share-based arrangements including both restricted stock awards andstock option awards was approximately $17.7 million, $13.7 million and $14.7 million, respectively. For compensation expense recognized under the Predecessor Plan duringthe years ended December 31, 2016, 2015 and 2014, Basic recognized a tax benefit of approximately $0, $4.8 million and $5.3 million, respectively.

As of December 31, 2016, there was no unrecognized compensation related to non-vested share-based compensation arrangements granted under the Predecessor Plan.

The total fair value of share-based awards under the Predecessor Plan vested during the years ended December 31, 2016, 2015 and 2014 was approximately $2.5million, $5.4 million and $20.6 million, respectively. During 2016, 2015 and 2014 there was no excess tax benefit due to the net operating loss. In the event of a net operatinggain the tax benefits would have been $0 $11,000 and $4.5 million, respectively.

On December 23, 2016, as part of the Prepackaged Plan, the Predecessor Plan was cancelled.

Predecessor Stock Option AwardsThe fair value of each option award under the Predecessor Plan is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. Options granted

under the Plan expire 10 years from the date they are granted, and generally vest over periods ranging from three to 5 years.

The following table reflects the summary of stock options outstanding at December 31, 2016 and the changes during the twelve months then ended:

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Predecessor Stock Option Awards Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic

Options Exercise Contractual Value Granted Price Term (Years) (000's)

Non-statutory stock options: Outstanding, beginning of period 175,000 $ 26.29

Options granted — — Options forfeited — $ — Options exercised — $ — Options expired (152,000) $ 26.84

Outstanding, end of period 23,000 $ 22.66 0.19 —

Exercisable, end of period 23,000 $ 22.66 0.19 —

Vested or expected to vest, end of period 23,000 $ 22.66 0.19 —

The total intrinsic value of share options exercised during the years ended December 31, 2015 and 2014 was approximately $37,000 and $2.2 million, respectively.There were no share option exercises in 2016.

Cash received from option exercises under the Predecessor Plan was approximately $724,000 and $4.3 million for the years ended December 31, 2015 and 2014,respectively. During 2014 there was no tax benefit due to the net operating loss. In the event of a net operating gain the tax benefit would have been $535,000.

The Company has historically issued treasury and newly-issued shares to satisfy share option exercises.

On December 23, 2016, as part of the Prepackaged Plan all outstanding stock options under the Predecessor Plan were cancelled.

Predecessor Restricted Stock Awards

A summary of the status of Basic’s non-vested share grants at December 31, 2015 and changes during the year ended December 31, 2016 is presented in the followingtable:

Predecessor Plan

Weighted Average

Number of Grant Date Fair

Shares Value Per ShareNonvested at beginning of period 1,967,376 $ 14.34Granted during period 790,263 2.73Vested during period (860,104 ) 15.04Forfeited during period (9,044 ) 24.05Nonvested at end of period 1,888,491 $ 9.12

On December 23, 2016, all nonvested restricted stock were subject to a 570 to 1 reverse stock split and immediately converted into Successor Company stock.

Predecessor Phantom Stock Awards

On March 18, 2015, the Compensation Committee of Basic’s Board of Directors approved grants of performance-based phantom stock awards to certain members ofmanagement. The performance-based phantom stock awards were tied to Basic’s achievement of total stockholder return (“TSR”) relative to the TSR of a peer group of energyservices companies over the performance period (defined as the one-year calculation period starting on the 20th NYSE trading day prior to and including the last NYSE tradingday of 2014 and ending on the last NYSE trading day of 2015). The number of phantom shares to be issued

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could range from 0% to 150% of the 704,089 target number of phantom shares, depending on the performance noted above. Any phantom shares earned at the end of theperformance period then remained subject to vesting in one-third increments on March 15, 2016, 2017 and 2018 (subject to accelerated vesting in certain circumstances). As ofDecember 31, 2015, Basic estimated that 66.7% of the target number of performance-based awards will be earned. On December 23, 2016 as part of the Prepackaged Plan alloutstanding performance-based phantom stock awards were cancelled.

On March 24, 2016 the Compensation Committee approved 705,263 shares of performance-based phantom stock awards to certain members of management. Theperformance-based phantom stock awards were tied to Basic’s achievement of total stockholder return relative to the TSR of a peer group of energy services companies over theperformance period (defined as the one-year calculation period starting on the 20th NYSE trading day prior to and including the last NYSE trading day of 2015 and ending onthe last NYSE trading day of 2017). The number of phantom shares to be issued ranged from 0% to 150% of the 705,263 target number of phantom shares, depending on theperformance noted above. On December 23, 2016 as part of the Prepackaged Plan all outstanding performance-based phantom stock awards were cancelled.

The Compensation Committee also approved grants of phantom restricted stock awards to certain key employees in 2015 and 2016. The number of phantom sharesissued in 2015 were 654,500. These grants were subject to vesting over a three-year period, with the first portion vesting on March 15, 2016. The number of phantom sharesissued in 2016 were 552,100. These grants were subject to vesting over a three-year period, with the first portion vesting on March 15, 2017. There was $314,000 outstandingunamortized expense related to unvested phantom shares granted to key employees as of December 31, 2016. This plan was cancelled in February 2017.

Successor Incentive PlanOn the Effective Date, the Basic Energy Services, Inc. Management Incentive Plan (the “MIP”) became effective pursuant to the Prepackaged Plan. The MIP provides

for the issuance of incentive awards in the form of stock options, restricted stock, and performance awards denominated in Successor Common Stock. The MIP provides for theissuance of up to 3,237,671 shares of Successor Common Stock. Of these authorized shares, approximately 2,428,255 shares were available for grant as of December 31, 2016.The board of directors of the Company (the “Board”) or the Compensation Committee of the Board (the “Compensation Committee”) administers the MIP. The number ofshares of Successor Common Stock authorized under the MIP and the number of shares subject to an award under the MIP, are subject to adjustment in the event of certainrecapitalization, reclassification, stock dividend, extraordinary dividend, stock split, reverse stock split or other distribution with respect to the Successor Common Stock or anymerger, reorganization, consolidation, combination, spin-off or other similar corporate change or any other change affecting the Successor Common Stock.

On the Effective Date, the Company issued time-based restricted stock unit awards ("RSUs") for 809,416 shares and stock option awards for 323,770 shares, whichawards vest in one third tranches on each of the Effective Date, and the first and second anniversaries of the Effective Date. The Company issued 269,810 shares of SuccessorCommon Stock in connection with the immediately vested RSUs on the Effective Date. The remainder of the authorized awards under the MIP as of December 31, 2016,including 809,416 performance-based RSUs and 323,770 performance-based stock options contemplated by the Prepackaged Plan, may be awarded in the future at thediscretion of the Company's board of directors.

During the year ended December 31, 2016, compensation expense related to share-based arrangements under the MIP, including restricted stock, RSU and stockoption awards, was approximately $10.1 million. For compensation expense recognized during the year ended December 31, 2016, Basic did not recognize a tax benefit.

As of December 31, 2016, there was $19.5 million unrecognized compensation related to non-vested share-based compensation arrangements granted under the MIP.That cost is expected to be recognized over a weighted average period of 2.0 years.

The total fair value of share-based awards vested during the years ended December 31, 2016 (including under the Predecessor Plan and the MIP) was approximately$9.9 million. During 2016 there was no excess tax benefit.

Successor Stock Option AwardsThe fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. Options granted under the MIP expire 10

years from the date they are granted, and generally vest over a period of three years.

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The following table reflects the summary of stock options outstanding at December 31, 2016:

Weighted Weighted Average Aggregate

Number of Average Remaining Intrinsic

Options Exercise Contractual Value

Granted Price Term (Years) (000's)

Non-statutory stock options: Outstanding, beginning of period — $ —

Options granted 323,770 36.55 Options forfeited — $ — Options exercised — $ — Options expired — $ —

Outstanding, end of period 323,770 $ 36.55 9.98 —

Exercisable, end of period — —

Vested or expected to vest, end of period 323,770 $ 36.55 9.98 —

There were no stock option exercises in 2016.

Successor Restricted Stock Unit Awards

A summary of the status of Basic’s non-vested RSU grants at December 31, 2016 and changes during the year ended December 31, 2016 is presented in the followingtable:

Weighted Average

Number of Grant Date Fair

Units Value Per UnitNonvested at beginning of period — $ —Granted during period 809,416 36.55Vested during period (269,810 ) 36.55Forfeited during period — —Nonvested at end of period 539,606 $ 36.55

Warrant Agreement

On the Effective Date, the Company entered into a warrant agreement (the “Warrant Agreement”) with American Stock Transfer & Trust Company, LLC, as warrantagent. Pursuant to the terms of the Prepackaged Plan, the Company issued warrants (the “Warrants,” and holders thereof “Warrantholders”), which in the aggregate, areexercisable to purchase up to approximately 2,066,627 shares of Successor Common Stock. In accordance with the Prepackaged Plan, the Company issued Warrants to theholders of the old common stock, totaling approximately 2,066,627 Warrants outstanding, exercisable until December 23, 2023, to purchase up to an aggregate ofapproximately 2,066,627 shares of Successor Common Stock at an initial exercise price of $55.25 per share, subject to adjustment as provided in the Warrant Agreement. Atissuance, the warrants were recorded at fair value, which was determined using the Black-Scholes option pricing model. The warrants are equity classified and, at issuance, wererecorded as an increase to additional paid-in capital in the amount of $8.4 million. All unexercised Warrants will expire, and the rights of the Warrantholder to purchaseSuccessor Common Stock will terminate on December 23, 2023, which is the seventh anniversary of the Effective Date.

15. Deferred Compensation PlanIn April 2005, Basic established a deferred compensation plan for certain employees. Participants may defer up to 50% of their salary and 100% of any cash bonuses.

Basic may make contributions of 100% of the first 3% of the participants’ deferred pay and 50% of the next 2% of the participants’ deferred pay to a maximum match of$10,000 per year. Employer matching contributions and earnings thereon are subject to a five-year vesting schedule with full vesting occurring after five years of service.

Employer contributions to the deferred compensation plan net of earnings approximated an expense of $454,000, $172,000 and $665,000 in 2016, 2015 and 2014, respectively.Basic elected to suspend matching for this plan during 2016.

16. Employee 401 (k) PlanBasic has a 401(k) profit sharing plan that covers substantially all employees. Employees may contribute up to their base salary not to exceed the annual Federal

maximum allowed for such plans. At management’s discretion, Basic may make a matching contribution proportional to each employee’s contribution. Employee contributionsare fully vested at all times. Employer matching contributions vest incrementally, with full vesting occurring after five years of service. This profit sharing plan was suspendedduring 2016. Employer contributions to the 401(k) plan approximated, $407,000, and $4.0 million in 2015 and 2014, respectively. Basic's 401(k) plan was not affected by thePrepackaged Plan.

17. Net Earnings (Loss) Per ShareBasic earnings (loss) per common share are determined by dividing net income or loss applicable to common stock by the weighted average number of common

shares actually outstanding during the year. Diluted income or loss per common share is based on the increased number of shares that would be outstanding assumingconversion of dilutive outstanding securities using the “as if converted” method. The following table sets forth the computation of basic and diluted loss per share (in thousands,except share data):

Predecessor

Years ended December 31,

2016 2015 2014

Numerator (both basic and diluted): Net loss available to common stockholders $ (123,373) $ (241,745) $ (8,341)

Denominator: Denominator for basic earnings per share 41,998,669 40,505,429 41,165,940Denominator for diluted earnings per share 41,998,669 40,505,429 41,165,940

Basic loss per common share: $ (2.94) $ (5.97) $ (0.20)

Diluted loss per common share: $ (2.94) $ (5.97) $ (0.20)

The Company has issued potentially dilutive instruments such as unvested restricted stock and common stock options. However, the Company did not include theseinstruments in its calculation of diluted loss per share during the periods presented, because to include them would be anti-dilutive. The following shows potentially dilutiveinstruments:

Predecessor

Years ended December 31,

2016 2015 2014Stock options — 26,527 159,888Unvested restricted stock 211,363 643,351 967,200

211,363 669,878 1,127,088

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18. Supplemental Schedule of Cash Flow Information

The following table reflects non-cash activity:

Year ended December 31, 2016 2015 2014

(In thousands)Capital leases issued for equipment $ 5,652 $ 24,768 $ 75,198Asset retirement obligation additions $ — $ — $ 68

During the year ended December 31, 2016, Basic did not pay any income taxes. Basic received a net refund of $450,000 during the year ended December 31, 2015.

Basic paid $2.6 million in income taxes during the year ended December 31, 2014.

19. Business Segment Information

Basic’s reportable business segments are Completion and Remedial Services, Fluid Services, Well Servicing, and Contract Drilling. These segments have beenselected based on changes in management’s resource allocation and performance assessment in making decisions regarding the Company. The following is a description of thesegments:

Completion and Remedial Services: This segment utilizes a fleet of pumping units, air compressor packages specially configured for underbalanced drillingoperations, coiled tubing services, nitrogen services, cased-hole wireline units, an array of specialized rental equipment and fishing tools, thru-tubing and snubbing units. Thelargest portion of this business consists of pumping services focused on cementing, acidizing and fracturing services in niche markets.

Fluid Services: This segment utilizes a fleet of trucks and related assets, including specialized tank trucks, storage tanks, water wells, disposal facilities watertreatment and related equipment. Basic employs these assets to provide, transport, store and dispose of a variety of fluids. These services are required in most workover,completion and remedial projects as well as part of daily producing well operations. Also included in this segment are our construction services which provide services for theconstruction and maintenance of oil and natural gas production infrastructures.

Well Servicing: This segment encompasses a full range of services performed with a mobile well servicing rig, including the installation and removal of downholeequipment and elimination of obstructions in the well bore to facilitate the flow of oil and natural gas. These services are performed to establish, maintain and improveproduction throughout the productive life of an oil and natural gas well and to plug and abandon a well at the end of its productive life. Basic’s well servicing equipment andcapabilities also facilitate most other services performed on a well. This segment also includes the manufacture and servicing of mobile well servicing rigs.

Contract Drilling: This segment utilizes shallow and medium depth rigs and associated equipment for drilling wells to a specified depth for customers on a contractbasis.

Basic’s management evaluates the performance of its operating segments based on operating revenues and segment profits. Corporate expenses include generalcorporate expenses associated with managing all reportable operating segments. Corporate assets consist principally of working capital and debt financing costs.

The following table sets forth certain financial information with respect to Basic’s reportable segments (in thousands):

Completion and Remedial Fluid Well Contract Corporate Services Services Servicing Drilling and Other TotalPredecessor Year ended December 31, 2016 Operating revenues $ 184,567 $ 191,725 $ 163,966 $ 7,239 $ — $ 547,497Direct operating costs (158,762) (161,535) (140,274) (7,079) — (467,650)Segment profits $ 25,805 $ 30,190 $ 23,692 $ 160 $ — $ 79,847Depreciation and amortization $ 87,736 $ 57,119 $ 48,703 $ 6,304 $ 18,343 $ 218,205Capital expenditures, (excluding acquisitions) $ 8,315 $ 17,324 $ 8,727 $ 276 $ 3,698 $ 38,340Successor identifiable assets $ 215,034 $ 128,725 $ 125,474 $ 14,121 $ 284,806 $ 768,160

Predecessor Year ended December 31, 2015 Operating revenues $ 307,550 $ 258,597 $ 217,245 $ 22,207 $ — $ 805,599Direct operating costs (245,069) (196,155) (184,952) (16,680) — (642,856)Segment profits $ 62,481 $ 62,442 $ 32,293 $ 5,527 $ — $ 162,743Depreciation and amortization $ 83,882 $ 71,280 $ 60,466 $ 14,083 $ 11,760 $ 241,471Capital expenditures, (excluding acquisitions) $ 22,384 $ 19,950 $ 18,732 $ 2,431 $ 6,323 $ 69,820Predecessor identifiable assets $ 365,574 $ 257,036 $ 233,293 $ 51,930 $ 230,348 $ 1,138,181

Predecessor Year ended December 31, 2014 Operating revenues $ 698,917 $ 369,774 $ 361,683 $ 60,910 $ — $ 1,491,284Direct operating costs (434,457) (265,105) (270,344) (41,513) — (1,011,419)Segment profits $ 264,460 $ 104,669 $ 91,339 $ 19,397 $ — $ 479,865Depreciation and amortization $ 74,924 $ 64,445 $ 55,131 $ 12,773 $ 10,207 $ 217,480Capital expenditures, (excluding acquisitions) $ 168,017 $ 71,112 $ 54,858 $ 9,311 $ 8,196 $ 311,494Predecessor identifiable assets $ 514,842 $ 299,542 $ 276,696 $ 60,362 $ 445,735 $ 1,597,177

The following table reconciles the segment profits reported above to the operating income as reported in the consolidated statements of operations (in thousands):

Year ended December 31,

2016 2015 2014Segment profits $ 79,847 $ 162,743 $ 479,865General and administrative expenses (135,331) (143,458) (167,301)Depreciation and amortization (218,205) (241,471) (217,480)Loss on disposal of assets (1,014) (1,602) (1,974)Restructuring costs (20,743) — —Goodwill impairment (646) (81,877) (34,703)

Operating (loss) income $ (296,092) $ (305,665) $ 58,407

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20. Quarterly Financial Data (Unaudited)The following table summarizes results for each of the four quarters in the years ended December 31, 2016 and 2015 (in thousands, except earnings per share data):

Predecessor First Second Third Fourth Quarter Quarter Quarter Quarter YearYear ended December 31, 2016:

Total revenues $ 130,356 $ 120,004 $ 141,610 $ 155,527 $ 547,497Segment profits $ 18,370 $ 15,310 $ 25,339 $ 20,828 $ 79,847Net (loss) income (i) $ (83,339) $ (89,883) $ (92,097) $ 141,946 $ (123,373)Loss per share of common stock (a): Basic $ (2.00) $ (2.11) $ (2.16) $ 3.32 $ (2.94)Diluted $ (2.00) $ (2.11) $ (2.16) $ 3.32 $ (2.94)Weighted average common shares outstanding:

Basic 41,609 42,602 42,690 42,691 41,999Diluted 41,609 42,602 42,690 42,691 41,999

Year ended December 31, 2015: Total revenues $ 261,721 $ 193,596 $ 189,247 $ 161,035 $ 805,599

Segment profits $ 66,412 $ 37,022 $ 34,317 $ 24,992 $ 162,743Net loss (ii) $ (32,624) $ (48,295) $ (105,642) $ (55,184) $ (241,745)Loss per share of common stock (a): Basic $ (0.81) $ (1.20) $ (2.63) $ (1.37) $ (5.97)Diluted $ (0.81) $ (1.20) $ (2.63) $ (1.37) $ (5.97)Weighted average common shares outstanding:

Basic 40,072 40,168 40,168 40,148 40,505Diluted 40,072 40,168 40,168 40,148 40,505

(a) The sum of individual quarterly net income per share may not agree to the total for the year due to each period's computation being based on the weighted average number of common sharesoutstanding during each period.(i) The third and fourth quarter 2016 loss included reorganization costs of $10.5 and $10.2 million respectively(ii) The third quarter of 2016 and 2015 loss included goodwill impairment of $0.6 million and $81.9 million, respectively.

21. Related Party TransactionsIn December 2010, Basic entered into a lease agreement with Darle Vuelta Cattle Co., LLC (“DVCC”), an affiliate of a former director, for the right to operate a salt water

disposal well, brine well and fresh water well. The term of the lease will continue until the salt water disposal well and brine well are plugged and no fresh water is being sold.The lease payments are the greater of (i) the sum of $0.10 per barrel of disposed oil and gas waste and $0.05 per barrel of brine or fresh water sold or (ii) $5,000 per month.

In February 2015, Basic purchased 100 acres of vacant land outside of Midland, Texas for $1.5 million from DVCC. In October 2016, Basic completed a non-cashexchange with DVCC in which the land purchased in February 2015, was exchanged for 34.81 acres in Midland County to be used for a salt water disposal well.

22. Income TaxesIncome tax expense (benefit) consists of the following (in thousands):

Years ended December 31,

2016 2015 2014

Current: Federal $ — $ (151) $ 151State 521 (9) 842

Total 521 (160) 993Deferred: Federal (4,486) (127,482) (1,015)State 82 (3,688) 543

Total (4,404) (131,170) (472)Total income tax expense (benefit) $ (3,883) $ (131,330) $ 521

Basic paid no federal income taxes during 2016 and 2015. Basic paid federal income taxes of $601,000 during 2014.

Reconciliation between the amount determined by applying the federal statutory rate of 35% to loss before income taxes to income (benefit) expense is as follows (inthousands):

Years ended December 31,

2016 2015 2014Statutory federal income tax $ (44,540) $ (130,576) $ (2,737)

Meals and entertainment 522 684 825

State taxes, net of federal benefit (6,778) (3,698) 1,093

Valuation allowance 188,970 — — —Cancellation of debt income (178,017) — — —Bankruptcy transaction costs 9,783 — — —Tax basis adjustments 17,981 — — —Goodwill impairment — 2,833 1,380Changes in estimates and other 8,196 (573) (40)

$ (3,883) $ (131,330) $ 521

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The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows (in thousands):

Successor Predecessor December 31, 2016 December 31, 2015Deferred tax assets: Operating loss carryforward $ 208,973 $ 130,826Goodwill and intangibles 49,380 32,992Accrued liabilities 12,351 14,028Deferred debt costs 5,158 130,827Deferred compensation 79 12,988Receivables allowance 680 976Asset retirement obligation 859 672Inventory 167 164Valuation Allowances (189,185 ) (878 )

Total deferred tax assets $ 88,462 $ 322,595

Deferred tax liabilities: Property and equipment (88,450 ) (195,211 )Prepaid expenses (12 ) (1,623 )

Total deferred tax liabilities $ (88,462 ) $ (196,834 )Net deferred tax liability $ — $ 125,761

Recognized as: Deferred tax assets - current — 13,484Deferred tax liabilities - non-current — (18,550 )

Net deferred tax liabilities $ — $ (5,066 )

Under the Prepackaged Plan, a substantial portion of the Company’s pre-petition debt securities were extinguished. Absent an exception, a debtor recognizescancellation of indebtedness income (“CODI”) upon discharge of its outstanding indebtedness for an amount of consideration that is less than its adjusted issue price. TheInternal Revenue Code of 1986, as amended (“IRC”), provides that a debtor in a bankruptcy case may exclude CODI from taxable income but must reduce certain of its taxattributes by the amount of any CODI realized as a result of the consummation of a plan of reorganization. The amount of CODI realized by a taxpayer is the adjusted issueprice of any indebtedness discharged less the sum of (i) the amount of cash paid, (ii) the issue price of any new indebtedness issued and (iii) the fair market value of any otherconsideration, including equity, issued. As a result of the market value of equity upon emergence from Chapter 11 bankruptcy proceedings, the estimated amount of U.S. CODIis approximately $31.7 million, which will reduce the value of the Company’s U.S. net operating losses.

IRC Sections 382 and 383 provide an annual limitation with respect to the ability of a corporation to utilize its tax attributes against future U.S. taxable income in theevent of a change in ownership. We believe the Debtors’ emergence from Chapter 11 bankruptcy proceedings is considered a change in ownership for purposes of IRCSection 382. The limitation under the IRC is based on the value of the corporation as of the emergence date. The ownership changes, and resulting annual limitation, is notexpected to result in the expiration of any net operating losses generated prior to the emergence date.

Basic provides a valuation allowance when it is more likely than not that some portion of the deferred tax assets will not be realized. Management assesses theavailable positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. Based on this evaluation, as ofDecember 31, 2016, a valuation allowance of approximately $189.2 million has been recorded on the net deferred tax assets for all federal and state tax jurisdictions in order tomeasure only the portion of the deferred tax asset that more likely than not will be realized. As of December 31, 2015, a valuation allowance of $0.9 million was recordedagainst certain state net operating losses not expected to be realized.

Interest is recorded in interest expense and penalties are recorded in income tax expense. Basic had no interest or penalties related to an uncertain tax positions during2016. Basic files federal income tax returns and state income tax returns in Texas and other state tax jurisdictions.

As of December 31, 2016, Basic had approximately $567.5 million of net operating loss carryforwards ("NOL"), for federal income tax purposes, which begin toexpire in 2031 and $226.1 million of net operating loss carryforwards for state income tax purposes which begin to expire in 2017. Additionally, we have $1.9 million ofalternative minimum tax credits.

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23. Subsequent Events

On February 22, 2017, our Board of Directors approved base salaries for 2017 (to be effective as of April 1, 2017), grants of performance-based restricted stock unitawards (“RSUs”) with respect to up to 809,416 shares of the Company’s common stock, and performance-based stock option awards (the “Options”, and together with theRSUs, the ”PB Awards”) with respect to up to 323,770 shares of the Company’s common stock, to Basic’s officers, including its named executive officers, under the MIP . ThePB Awards were consistent with the PB Awards expressly contemplated by the Prepackaged Plan to be determined and approved by the Board or the Compensation Committeewithin 90 days following the effective date of the Prepackaged Plan.

Pursuant to the PB Award agreements, the PB Awards are to be earned based upon Basic’s total shareholder return (“TSR”) relative to the TSR of a peer group ofenergy services companies measured over the Performance Period (defined as the 2017 calendar year), with Basic’s ranking in TSR performance being compared to the rankingin TSR performance of the members of the Peer Group (as defined below, and together with Basic, the “Combined Group”). The Combined Group will be ranked from bestperforming to worst performing with regard to each company’s respective TSR performance, with the Combined Group company ranked 1st being the company with the highestTSR when compared to the other Combined Group companies and the Combined Group company ranked 7th being the company with the lowest TSR when compared to theother Combined Group companies, with rankings 2 through 6 being determined in descending order based upon the corresponding descent in TSR performance for companiesin the Combined Group from 2nd highest to 6th highest.

“Peer Group” means each of the following companies: (1) Key Energy Services, Inc.; (2) Mammoth Energy Services, Inc.; (3) Patterson-UTI Energy, Inc.; (4) PioneerEnergy Services Corp.; (5) Superior Energy Services, Inc.; and (6) Tesco Corporation; provided, in the event any such company ceases to exist, ceases to file public reportstimely with the U.S. Securities and Exchange Commission with respect to the Performance Period or merges or combines with any other entity that, in the determination of theCommittee makes such combined company not comparable for use as part of the Peer Group, the Committee in its sole discretion may continue to include or exclude suchcompany in the Peer Group, but in no event may substitute any other company in its place as part of the Peer Group.

Once earned, the PB Awards will vest in one-third increments and will begin when the Committee certifies the specified adjustments in the award agreements and willbegin to vest no later than 75 days after the Performance Period (the “Determination Date”). The PB Awards will vest with one-third of the PB Awards vesting on theDetermination Date, one-third vesting one year following the Determination Date and the remaining one-third vesting two years following the Determination Date. All unvestedPB Awards will be forfeited by the grantee (a) if the grantee’s employment with Basic is terminated by Basic for “Cause” before the PB Awards are vested or (b) if the granteeterminates his employment with Basic before the PB Awards are vested for any reason other than (i) “Good Reason” or (ii) the death or “Disability” of the grantee, as such termsare defined in the award agreement. The grantee will vest in all rights to the PB Awards on the earliest of (i) the dates set forth above; (ii) termination by Basic without Cause;(iii) the death or “Disability” of the grantee; (iv) resignation for “Good Reason”; or (v) a Change of Control (as defined in the award agreements).

Following the vesting of the RSUs, the Company will deliver to the grantee the number of shares of Successor Common Stock (the “Shares”) equal to the aggregatenumber of RSUs that vest as of such date. The Company, however, in its sole discretion will have the option to settle the RSUs in cash, subject to applicable withholding taxes.Each RSU has dividend equivalent rights, which dividend equivalent rights may be accumulated and deemed reinvested in additional RSUs or may be accumulated in cash, asdetermined by the Committee in its discretion.

The exercise price of each of the Options issued is $41.93. The purchase price for all Options will be the applicable exercise price multiplied by the number of Shareswith respect to the Options being exercised. The purchase price may be paid by cash or check; a brokered cashless exercise; a net exercise by reducing the number of Sharesotherwise deliverable upon the exercise; or surrendered to the Company for transfer and valued by the Company at the fair market value on the date of exercise

In addition to the PB Awards, the Board approved on February 22, 2017 grants of phantom stock awards (the “Phantom Shares”) under the MIP for up to an aggregateof 42,795 Phantom Shares to non-executive key employees. The Phantom Shares issued to non-executive key employees will vest in specified increments on March 15, 2017,March 15, 2018 and March 15, 2019 (subject to accelerated vesting in certain circumstances described below). All unvested Phantom Shares will be forfeited by the grantee (a)if the grantee’s employment with Basic is terminated by Basic for “Cause” before the Phantom Shares are vested or (b) if the grantee terminates his employment with Basicbefore the Phantom Shares are vested for any reason other than (i) “Good Reason” within 12 months following a Change of Control (as defined in the award agreements) or (ii)the death or “Disability” of the grantee, as such terms are defined in the award agreement. The grantee will vest in all rights to the Phantom Shares on the earliest of: (i) the datesset forth above; (ii) grantee’s termination by Basic without “Cause”; (iii) the death or “Disability” of the grantee; (iv) grantee’s resignation for “Good Reason” within 12 monthsfollowing a Change of Control (as defined in the award

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agreements). Each Phantom Share represents the right to receive a cash payment equal to the Fair Market Value (as defined and determined in accordance with the awardagreement) on the applicable vesting date of a number of Shares equal to the aggregate number of Phantom Shares that vest on such date, provided the cash payment will notexceed $55.00 per Phantom Share. Each Phantom Share has dividend equivalent rights, which dividend equivalent rights may be accumulated and deemed reinvested inadditional Phantom Shares or may be accumulated in cash, as determined by the Committee in its discretion.

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Schedule II — Valuation and Qualifying Accounts

Additions Balance at Charged to Charged to Balance at

Beginning of Costs and Other Deductions End ofDescription Period Expenses (a) Accounts (b) (c) Period

(in thousands)

Successor Year Ended December 31, 2016 Allowance for Bad Debt $ 2,670 $ 1,099 $ (1,858) $ (1,911) $ —

Predecessor Year Ended December 31, 2015 Allowance for Bad Debt $ 2,032 $ 2,850 $ — $ (2,212) $ 2,670

Predecessor Year Ended December 31, 2014 Allowance for Bad Debt $ 3,675 $ 1,244 — $ (2,887) $ 2,032

(a)Charges relate to provisions for doubtful accounts(b)Reflects the impact of reorganization and recording accounts receivable at fair value(c)Deductions relate to the write-off of accounts receivable deemed uncollectible

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures

Based on their evaluation as of the end of the fiscal year ended December 31, 2016, our principal executive officer and principal financial officer have concluded thatour disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are effective to ensure that information required to be disclosed inreports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms andeffective to ensure that information required to be disclosed in such reports is accumulated and communicated to our management, including our principal executive officer andprincipal financial officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial ReportingDuring the most recent fiscal quarter, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely

to materially affect, our internal control over financial reporting.

Design and Evaluation of Internal Control over Financial ReportingManagement’s Report on Internal Control over Financial Reporting and the Report of the Independent Registered Public Accounting Firm are set forth in Part II,

Item 8 of this report and are incorporated herein by reference.

ITEM 9B. OTHER INFORMATION None.

PART III

Pursuant to paragraph 3 of General Instruction G to Form 10-K, the information required by Item 10, to the extent not set forth in “Executive Officers of theRegistrant” in Part I, Items 1 and 2 above, and Items 11 through 14 of Part III of this Report is incorporated by reference from our proxy statement involving the election ofdirectors and the approval of independent auditors, which is to be filed pursuant to Regulation 14A within 120 days after the end of our fiscal year ended December 31, 2016.

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PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)Financial Statements, Schedules and Exhibits(1)Financial Statements — Basic Energy Services, Inc. and Subsidiaries:The Financial Statements listed in the Index to Consolidated Financial Statements are filed as part of this report on Form 10-K (see Part II, Item 8, Financial

Statements and Supplementary Data).(2)Financial Statement SchedulesWith the exception of Schedule II — Valuation and Qualifying Accounts, all other consolidated financial statement schedules have been omitted because they are not

required, are not applicable, or the required information has been included elsewhere within this Form 10-K.(3)ExhibitsThe information required by this Section (a)(3) of Item 15 is set forth on the exhibit index that follows the signature page of this Form 10K.

ITEM 16. FORM 10-K SUMMARY

Not applicable.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

BASIC ENERGY SERVICES, INC.

By: /s/ T. M. “Roe” Patterson Name: T. M. “Roe” Patterson Title: President, Chief Executive Officer and Director

Date: March 31, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in thecapacities and on the dates indicated.

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Signature Title Date

/s/ T. M. "Roe" Patterson President, Chief Executive Officer and March 31, 2017

T.M. "Roe" Patterson Director (Principal Executive Officer)

/s/ Alan Krenek Senior Vice President, March 31, 2017

Alan Krenek Chief Financial Officer, Treasurer and Secretary

(Principal Financial Officer)

/s/ John Cody Bissett Vice President, Controller and March 31, 2017

John Cody Bissett Chief Accounting Officer (Principal Accounting Officer)

/s/ Timothy H. Day Chairman of the Board March 31, 2017

Timothy H. Day

s/ John Jackson Director March 31, 2017

John Jackson

/s/ James D. Kern Director March 31, 2017

James D. Kern

/s/ Samuel E. Langford Director March 31, 2017

Samuel E. Langford

/s/ Julio Quintana Director March 31, 2017

Julio Quintana

/s/ Anthony J. DiNello Director March 31, 2017

Anthony J. DiNello

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Exhibit No. Description

2.1* First Amended Joint Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and its affiliated Debtors, dated December 7, 2016 (Incorporated byreference to Exhibit 2.1 to Form 8-K (SEC File No. 001-32693), filed on December 12, 2016)

2.2*

Findings of Fact, Conclusions of Law, and Order Approving the Debtors’ Joint Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and itsAffiliated Debtors, dated December 9, 2016 (Incorporated by reference to Exhibit 99.1 to Form 8-K (SEC File No. 001-32693) filed December 12,2016)

3.1* Amended and Restated Certificate of Incorporation of the Company, dated September 22, 2005. (Incorporated by reference to Exhibit 3.1 of theCompany’s Registration Statement on Form S-1/A (SEC File No. 333-127517), filed on September 28, 2005)

3.2* Second Amended and Restated Certificate of Incorporation of Basic Energy Services, Inc. (Incorporated by reference to Exhibit 3.1 to the Company’sRegistration Statement on Form 8-A12B (SEC File No. 001-32693) filed on December 23, 2016)

3.3* Second Amended and Restated Bylaws of Basic Energy Services, Inc. (Incorporated by reference to Exhibit 3.2 to the Company’s RegistrationStatement on Form 8-A12B (SEC File No. 001-32693) filed on December 23, 2016)

4.1* † Specimen Stock Certificate representing Common Stock of the Company (Incorporated by reference to Exhibit 4.1 of the Company’s RegistrationStatement on Form 8-A12B (SEC File No. 001-32693) filed on December 23, 2016)

4.2* † Warrant Agreement between Basic, as issuer, and American Stock Transfer & Trust Company, LLC, as warrant agent, dated as of December 23, 2016.(Incorporated by reference to Exhibit 4.1 to Form 8-A12G (SEC File No. 001-32693) filed on December 23, 2016)

4.3* † Registration Rights Agreement, dated as of December 23, 2016, between Basic and certain stockholders (Incorporated by reference to Exhibit 10.1 ofthe Company’s Registration Statement on Form 8-A12B (SEC File No. 001-32693) filed on December 23, 2016)

10.1* Sixth Amended and Restated Basic Energy Services, Inc. 2003 Incentive Plan. (Incorporated by reference to Exhibit 10.1 of the Company’s CurrentReport on Form 8-K (SEC File No. 001-32693), filed on May 27, 2015)

10.2* † Amendment No. 1 to Sixth Amended and Restated Basic Energy Services, Inc. 2003 Incentive Plan (Incorporated by reference to Exhibit 10.1 of theCompany’s Current Report on Form 8-K (SEC File No. 001-32693), filed on May 23, 2016)

10. 3* † Form of Performance-Based Award Agreement (Executive and Senior Management) (effective March 2015). (Incorporated by reference to Exhibit10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on March 23, 2015)

10.4* † Form of Performance-Based Award Agreement 2016 Performance-Based Phantom Stock Grants (Executive and Senior Management) (effective March2016) (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on March 30, 2016)

10.5* † Form of Key Employee Retention Bonus agreement (Incorporated by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q(SEC File No. 001-32693), filed on July 29, 2016)

10.6* † Form of Key Employee Incentive Bonus agreement (Incorporated by reference to Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q (SECFile No. 001-32693), filed on July 29, 2016)

10.7* † Basic Energy Services, Inc. Management Incentive Plan, effective as of December 23, 2016 (Incorporated by reference to Exhibit 10.1 to theCompany's Registration Statement on Form S-8 (SEC File No. 333-215319) filed on December 23, 2016)

10.8* † Form of Time-Based Restricted Stock Unit Award Agreement (Incorporated by reference to Exhibit 10.9 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on December 27, 2016)

10.9* † Form of Time-Based Stock Option Award Agreement (Incorporated by reference to Exhibit 10.10 of the Company’s Current Report on Form 8-K(SEC File No. 001-32693), filed on December 27, 2016)

10.10* † Employment Agreement of Alan Krenek, effective as of December 31, 2006. (Incorporated by reference to Exhibit 10.2 of the Company’s CurrentReport on Form 8-K (SEC File No. 001-32693), filed on January 4, 2007)

10.11* † Amended and Restated Employment Agreement of James F. Newman, effective as of November 24, 2008. (Incorporated by reference to Exhibit 10.27of the Company’s Annual Report on Form 10-K (SEC File No. 001-32693), filed on March 1, 2010)

10.12* † Amendment to Amended and Restated Employment Agreement of James F. Newman, effective as of November 1, 2013. (Incorporated by reference toExhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on December 2, 2013)

92

10.13* † Employment Agreement of Douglas B. Rogers, effective as of March 16, 2009. (Incorporated by reference to Exhibit 10.28 of the Company’s AnnualReport on Form 10-K (SEC File No. 001-32693), filed on March 1, 2010)

10.14* † Amended and Restated Employment Agreement of Thomas Monroe Patterson, made and entered into on May 1, 2013 and effective as of January 1,2014. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on May 7, 2013)

10.15* † Amendment to Amended and Restated Employment Agreement, dated as of October 24, 2016, by and between T.M. “Roe” Patterson and Basic(Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on October 25, 2016)

10.16* † Form of Amendment to Employment Agreement, dated as of October 24, 2016 (Incorporated by reference to Exhibit 10.2 of the Company’s CurrentReport on Form 8-K (SEC File No. 001-32693), filed on October 25, 2016)

10.17*

Second Amended and Restated ABL Credit Agreement, dated as of December 23, 2016, among Basic, as borrower, Bank of America, N.A., asadministrative agent, collateral management agent, swing line lender and an l/c issuer; Wells Fargo Bank, National Association, as collateralmanagement agent and syndication agent (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on December 27, 2016)

10.18*

Amended and Restated Term Loan Credit Agreement, dated as of December 23, 2016, among Basic and a syndicate of lenders and U.S. Bank NationalAssociation, as administrative agent for the lenders (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K (SECFile No. 001-32693), filed on December 27, 2016)

10.19*

Intercreditor Agreement, dated as of December 23, 2016, with the administrative agent under the Second Amended and Restated ABL CreditAgreement, the administrative agent under the Amended and Restated Term Loan Credit Agreement and the guarantors party thereto (Incorporated byreference to Exhibit 10.3 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on December 27, 2016)

10.20*

Third Amended and Restated Security Agreement, dated December 23, 2016, among Basic, certain of its subsidiaries and the administrative agentunder the Second Amended and Restated ABL Credit Agreement (Incorporated by reference to Exhibit 10.4 of the Company’s Current Report onForm 8-K (SEC File No. 001-32693), filed on December 27, 2016)

10.21*

Amended and Restated Security Agreement, dated as of December 23, 2016, among Basic, certain of its subsidiaries and the administrative agentunder the Amended and Restated Term Loan Credit Agreement (Incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form8-K (SEC File No. 001-32693), filed on December 27, 2016)

10.22*

Amendment No. 3 to Amended and Restated Credit Agreement, dated as of February 26, 2016, among Basic as Borrower, each lender from time totime party thereto and Bank of America, N.A., as administrative agent, swing line lender and an l/c issuer (Incorporated by reference to Exhibit 10.1 ofthe Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on February 29, 2016)

10.23*

Intercreditor Agreement, dated as of February 26, 2016, among Bank of America, N.A., as administrative agent for the secured parties to the Amendedand Restated Credit Agreement, U.S. Bank National Association, as administrative agent and collateral agent for the secured parties to Basic’s TermLoan Credit Agreement, and acknowledged by Basic and each of the guarantors party thereto (Incorporated by reference to Exhibit 10.2 of theCompany’s Current Report on Form 8-K (SEC File No. 001-32693), filed on February 29, 2016)

10.24*

Second Amended and Restated Security Agreement, dated as of February 26, 2016, among Basic, as borrower, and the other debtors under theAmended and Restated Credit Agreement party thereto, and Bank of America, N.A., as administrative agent (Incorporated by reference to Exhibit 10.3of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on February 29, 2016)

10.25*

Security Agreement, dated as of February 26, 2016, among Basic, as borrower, the other debtors under the Term Loan Credit Agreement party thereto,and U.S. Bank, National Association, as administrative agent (Incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on February 29, 2016)

10.26*

Term Loan Credit Agreement dated as of February 17, 2016, among Basic as Borrower, U.S. Bank National Association, as administrative agent andthe Lenders Party thereto. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filedon February 19, 2016)

10.26*

Amendment No. 1 to Term Loan Credit Agreement dated as of March 28, 2016, among Basic as borrower, U.S. Bank National Association, asadministrative agent and the lenders party thereto (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC FileNo. 001-32693), filed on May 11, 2016)

93

10.27*

Amendment No. 2 to Term Loan Credit Agreement dated as of April 27, 2016, among Basic as borrower, U.S. Bank National Association, asadministrative agent and the lenders party thereto (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K (SEC FileNo. 001-32693), filed on May 11, 2016)

10.28*

Amendment No. 3 to Term Loan Credit Agreement dated as of May 10, 2016, among Basic as borrower, U.S. Bank National Association, asadministrative agent and the lenders party thereto (Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K (SEC FileNo. 001-32693), filed on May 11, 2016)

10.29*

Temporary Limited Waiver and Consent dated as of August 31, 2016, among Basic, the guarantors party thereto, the lenders party thereto and U.S.Bank National Association (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filedon September 7, 2016)

10.30*

Temporary Limited Waiver and Consent dated as of September 1, 2016, among Basic, the guarantors party thereto, the lenders party thereto and U.S.Bank National Association (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filedon September 7, 2016)

10.31*

Temporary Limited Waiver dated as of September 13, 2016, among Basic, the guarantors party thereto, the lenders under the Term Loan CreditAgreement and U.S. Bank National Association (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC FileNo. 001-32693), filed on September 15, 2016)

10.32*

Temporary Limited Waiver dated as of September 14, 2016, among Basic, the guarantors party thereto, the lenders under the Amended and RestatedCredit Agreement and Bank of America, N.A. (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K (SEC File No.001-32693), filed on September 15, 2016)

10.33* Forbearance dated as of September 14, 2016, among Basic, the guarantors party thereto and holders of Basic’s unsecured senior notes (Incorporated byreference to Exhibit 10.3 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed on September 15, 2016)

10.34*

First Amendment to Temporary Limited Waiver and Consent dated as of September 28, 2016, among Basic, the guarantors party thereto, lenders underthe Term Loan Credit Agreement and U.S. Bank National Association (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report onForm 8-K (SEC File No. 001-32693), filed on September 30, 2016)

10.35*

First Amendment to Temporary Limited Waiver dated as of September 28, 2016, among Basic, the guarantors party thereto, lenders under theAmended and Restated Credit Agreement and Bank of America, N.A. (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report onForm 8-K (SEC File No. 001-32693), filed on September 30, 2016)

10.36*

First Amendment to Forbearance Agreement dated as of September 28, 2016, among Basic, the guarantors party thereto and the holders of Basic’sunsecured senior notes (Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8‑K (SEC File No. 001-32693), filed onSeptember 30, 2016)

10.37*

Second Amendment to Temporary Limited Waiver dated as of October 14, 2016, among Basic, the guarantors party thereto, the lenders party theretoand Bank of America, N.A. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filedon October 18, 2016)

10.38*

Third Amendment to Temporary Limited Waiver dated as of October 17, 2016, among Basic, the guarantors party thereto, the lenders party thereto andBank of America, N.A. (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed onOctober 18, 2016)

10.39*

Second Amendment to Temporary Limited Waiver and Consent dated as of October 16, 2016, among Basic, the guarantors party thereto, the lendersparty thereto and U.S. Bank National Association (Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K (SEC FileNo. 001-32693), filed on October 18, 2016)

10.40*

Second Amendment to Forbearance Agreement dated as of October 16, 2016, among Basic, the guarantors party thereto and the holders of Basic’sunsecured senior notes (Incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K (SEC File No. 001-32693), filed onOctober 18, 2016)

10.41*

Restructuring Support Agreement, dated as of October 23, 2016, among the Debtors, the certain consenting lenders under the Term Loan CreditAgreement and certain consenting holders of Basic’s unsecured senior notes (Incorporated by reference to Exhibit B of the Disclosure Statement forJoint Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and its Affiliated Debtors dated October 24, 2016 filed as Exhibit T3E.1 of the FormT-3 filed by Basic Energy Services, Inc. with the SEC on October 24, 2016)

10.42*

Form of Backstop Agreement (Incorporated by reference to Exhibit E of the Restructuring Support Agreement included as Exhibit B to the DisclosureStatement for Joint Prepackaged Chapter 11 Plan of Basic Energy Services, Inc. and its Affiliated Debtors dated October 24, 2016 filed as ExhibitT3E.1 of the Form T-3 filed by Basic Energy Services, Inc. with the SEC on October 24, 2016)

10.43 Superpriority Secured Debtor-in-Possession Term Loan Credit Agreement, dated as of October 27, 2016, among Basic Energy Services, Inc., as theBorrower, the subsidiaries of the Borrower, as Guarantors, U.S. Bank National Association, as Administrative Agent and the Lenders party thereto.

94

21.1 Subsidiaries of the Company 23.1 Consent of KPMG LLP 31.1 Certification by Chief Executive Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act 31.2 Certification by Chief Financial Officer required by Rule 13a-14(a) and 15d-14(a) under the Exchange Act 32.1 Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document

* Incorporated by reference † Management contract or compensatory plan or arrangement

95

Exhibit 10.43

SUPERPRIORITY SECURED DEBTOR-IN-POSSESSION TERM LOAN CREDIT AGREEMENT

Dated as of October 25, 2016

among

BASIC ENERGY SERVICES, INC., a Debtor and Debtor-in-Possession under Chapter 11 of the Bankruptcy Code, as the Borrower,

THE SUBSIDIARIES OF THE BORROWER PARTY HERETO, each a Debtor and Debtor-in-Possession under Chapter 11 of the Bankruptcy Code,

as Guarantors,

U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent,

and

THE LENDERS PARTY HERETO

1

Exhibit 10.43

TABLE OF CONTENTS

______________________________________________________________________________________PAGE

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS Section 1.01. Defined Terms 1Section 1.02. Other Interpretive Provisions 32Section 1.03. Accounting Terms. 32Section 1.04. Rounding 33Section 1.05. Times of Day 33Section 1.06. Currency Equivalents Generally 33Section 1.07. Uniform Commercial Code 34ARTICLE II THE COMMITMENTS AND LOANS Section 2.01. The Loans 34Section 2.02. Borrowings of Loans. 35Section 2.03. [Reserved]. 35Section 2.04. [Reserved]. 35Section 2.05. Prepayments. 35Section 2.06. Termination or Reduction of Commitments. 38Section 2.07. Repayment of Loans 38Section 2.08. Interest. 38Section 2.09. Fees. 39

Section 2.10.Computation of Interest and Fees; Retroactive Adjustments ofApplicable Rate 40

Section 2.11. Evidence of Debt 40Section 2.12. Payments Generally; Administrative Agent’s Clawback. 41Section 2.13. Sharing of Payments by Lenders 43Section 2.14. Priority and Liens; No Discharge. 44Section 2.15. Payment of Obligations 47Section 2.16. Defaulting Lenders. 47ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY Section 3.01. Taxes. 49Section 3.02. [Reserved]. 54Section 3.03. [Reserved]. 54Section 3.04. Increased Costs. 54Section 3.05. [Reserved]. 55Section 3.06. Mitigation Obligations; Replacement of Lenders. 55Section 3.07. Survival 55

ARTICLE IV CONDITIONS PRECEDENT Section 4.01. Conditions to the Closing Date 56Section 4.02. Conditions to Borrowing any Advance 59ARTICLE V REPRESENTATIONS AND WARRANTIES Section 5.01. Existence, Qualification and Power 61Section 5.02. Authorization; No Contravention 61Section 5.03. Governmental Authorization; Other Consents 62Section 5.04. Binding Effect 62Section 5.05. Financial Statements; No Material Adverse Effect. 62Section 5.06. Litigation 63Section 5.07. No Default 63Section 5.08. Ownership of Property; Liens; Investments 63Section 5.09. Environmental Compliance. 64Section 5.10. Insurance 65Section 5.11. Taxes 65Section 5.12. ERISA Compliance. 65Section 5.13. Subsidiaries; Equity Interests; Loan Parties 66Section 5.14. Margin Regulations; Investment Company Act. 66Section 5.15. Disclosure 67Section 5.16. Compliance with Laws 67Section 5.17. Intellectual Property; Licenses, Etc. 67Section 5.18. [Reserved.] 68Section 5.19. Casualty, Etc 68Section 5.20. Labor Matters 68Section 5.21. Collateral Documents 68Section 5.22. Sanctions and Anti-Corruption Concerns 68ARTICLE VI AFFIRMATIVE COVENANTS Section 6.01. Financial Statements 69Section 6.02. Certificates; Other Information 71Section 6.03. Notices 74Section 6.04. Payment of Obligations 74Section 6.05. Preservation of Existence, Etc 75Section 6.06. Maintenance of Properties 75Section 6.07. Maintenance of Insurance 75Section 6.08. Compliance with Laws 76Section 6.09. Books and Records 76

ii

Section 6.10. Inspection Rights 76Section 6.11. Use of Proceeds 78Section 6.12. Covenant to Guarantee Obligations and Give Security 78Section 6.13. Compliance with Environmental Laws 81Section 6.14. Preparation of Environmental Reports 82Section 6.15. Further Assurances 82Section 6.16. Compliance with Terms of Leaseholds 82Section 6.17. Material Contracts 83Section 6.18. Appraisals 83Section 6.19. Administration of Deposit Accounts 83Section 6.20. Certain Case Milestones. 83Section 6.21. First and Second Day Orders 84Section 6.22. Cash Management System 85Section 6.23. Chapter 11 Case Filings 85Section 6.24. Chapter 11 Orders. 85ARTICLE VII NEGATIVE COVENANTS Section 7.01. Liens 86Section 7.02. Indebtedness 88Section 7.03. Investments 89Section 7.04. Fundamental Changes 90Section 7.05. Dispositions 90Section 7.06. Restricted Payments 91Section 7.07. Change in Nature of Business 91Section 7.08. Transactions with Affiliates 91Section 7.09. Burdensome Agreements 91Section 7.10. Use of Proceeds 92Section 7.11. Budget Variance 92Section 7.12. Capital Expenditures and Capitalized Lease Payments 92Section 7.13. Amendments of Organization Documents 92Section 7.14. Accounting Changes 92Section 7.15. Prepayments, Etc. of Indebtedness 92Section 7.16. Amendment, Etc. of Indebtedness 92Section 7.17. Sanctions 93Section 7.18. Additional Bankruptcy Matters 93ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES Section 8.01. Events of Default 93Section 8.02. Remedies upon Event of Default 99Section 8.03. Application of Funds 99

iii

ARTICLE IX ADMINISTRATIVE AGENT Section 9.01. Appointment and Authority. 100Section 9.02. Rights as a Lender 101Section 9.03. Exculpatory Provisions 101Section 9.04. Reliance by Administrative Agent 102Section 9.05. Delegation of Duties 103Section 9.06. Resignation of Administrative Agent. 103Section 9.07. Non-Reliance on Administrative Agent and Other Lenders 105Section 9.08. [Reserved]. 105Section 9.09. Administrative Agent May File Proofs of Claim; Credit Bidding. 105Section 9.10. Collateral and Guaranty Matters. 106ARTICLE X MISCELLANEOUS Section 10.01. Amendments, Etc 108Section 10.02. Notices; Effectiveness; Electronic Communications. 110Section 10.03. No Waiver; Cumulative Remedies; Enforcement 112Section 10.04. Expenses; Indemnity; Damage Waiver. 113Section 10.05. Payments Set Aside 115Section 10.06. Successors and Assigns. 116Section 10.07. Treatment of Certain Information; Confidentiality 120Section 10.08. Right of Setoff 121Section 10.09. Interest Rate Limitation 122Section 10.10. Counterparts; Integration; Effectiveness 122Section 10.11. Survival of Representations and Warranties 122Section 10.12. Severability 123Section 10.13. Replacement of Lenders 123

Section 10.14.Governing Law; Jurisdiction; Etc.

124Section 10.15. Waiver of Jury Trial 125Section 10.16. No Advisory or Fiduciary Responsibility 125

Section 10.17.Electronic Execution of Assignments and Certain OtherDocuments 126

Section 10.18. USA PATRIOT Act 126Section 10.19. [Reserved]. 127

Section 10.20.Acknowledgement and Consent to Bail-In of EEA FinancialInstitutions 127

Section 10.21. ENTIRE AGREEMENT 127ARTICLE XI GUARANTY

iv

Section 11.01. Guaranty 128Section 11.02. No Setoff or Deductions; Taxes; Payments 129Section 11.03. Rights of Administrative Agent and Lenders 129Section 11.04. Certain Waivers 129Section 11.05. Obligations Independent 130Section 11.06. Subrogation 130Section 11.07. Termination; Reinstatement 131Section 11.08. Subordination 132Section 11.09. Condition of Borrower 133Section 11.10. Covenant 133Section 11.11. Additional Guarantors 133Section 11.12. Several Enforcement 133

v

Exhibit 10.43

SCHEDULES

1.01 Commitments and Applicable Percentages5.08 Real Property Matters5.13 Subsidiaries and Other Equity Investments; Loan Parties6.12 Guarantors6.19 Deposit Accounts7.02 Existing Indebtedness7.03 Investments7.09 Burdensome Agreements10.02 Administrative Agent’s Office, Certain Addresses for Notices10.06 Existing Noteholder LendersEXHIBITS

Form of

A Loan NoticeB DIP BudgetC NoteD Compliance CertificateE-1 Assignment and AssumptionE-2 Administrative QuestionnaireF Notice of Loan PrepaymentG Initial Rolling BudgetH Interim OrderI-1 –I-4 U.S. Tax Compliance Certificate

Exhibit 10.43

SUPERPRIORITY SECURED DEBTOR-IN-POSSESSION TERM LOAN CREDIT AGREEMENT

This SUPERPRIORITY SECURED DEBTOR-IN-POSSESSION TERM LOAN CREDIT AGREEMENT is entered into as of [-],2016 among Basic Energy Services, Inc., a Delaware corporation and a Debtor and Debtor-in-Possession under Chapter 11 of the BankruptcyCode (the “Borrower”), the Subsidiaries of the Borrower from time party hereto as Guarantors, each lender from time to time party hereto(collectively, the “Lenders” and individually, a “Lender”), and U.S. Bank National Association, as Administrative Agent.

PRELIMINARY STATEMENTS:

WHEREAS, on October 25, 2016 (the “Petition Date”), the Borrower and certain of its Subsidiaries (the “Debtors”) filed voluntarypetitions with the Bankruptcy Court initiating their respective cases that are pending under Chapter 11 of the Bankruptcy Code (the cases ofeach of the Borrower and each other Debtor, each a “Case”, and collectively the “Cases”) and have continued in the possession of their assetsand the management of their business pursuant to sections 1107 and 1108 of the Bankruptcy Code.

WHEREAS, the Borrower has requested that the Lenders provide a multiple delayed draw term loan facility denominated in Dollars inan aggregate principal amount not to exceed $90,000,000 (the “Facility”), with all of the Borrower’s obligations under the Facility to beguaranteed by each Guarantor, and the Lenders have indicated their willingness to lend on the terms and subject to the conditions set forthherein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

Section 1.01. Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

“100 Day Anniversary” means the date that is 100 days after the Closing Date.

“2019 Senior Notes” means the 7-3/4% senior unsecured notes of the Borrower due 2019 in an aggregate principal amount of$475,000,000 issued and sold pursuant to the 2019 Senior Notes Documents.

“2019 Senior Notes Documents” means (a) the Indenture for the 2019 Senior Notes dated as of February 15, 2011, (b) the 2019 SeniorNotes and (c) all other agreements, instruments and other documents pursuant to which the 2019 Senior Notes have been issued or otherwisesetting forth the terms of the 2019 Senior Notes.

“2022 Senior Notes” means the 7-3/4% senior unsecured notes of the Borrower due 2022 in an aggregate principal amount of$300,000,000 issued and sold pursuant to the 2022 Senior Notes Documents.

“2022 Senior Notes Documents” means (a) the Indenture for the 2022 Senior Notes dated as of October 16, 2012, (b) the 2022 SeniorNotes and (c) all other agreements, instruments and other documents pursuant to which the 2022 Senior Notes have been issued or otherwisesetting forth the terms of the 2022 Senior Notes.

“ABL Agent” shall mean Bank of America, N.A., in its capacity as “Administrative Agent” under the ABL Credit Agreement.

“ABL Collateral Primed Liens” has the meaning specified in Section 2.14(a).

“ABL Collateral Priming Liens” has the meaning specified in Section 2.14(a).

“ABL Credit Agreement” means the Amended and Restated Credit Agreement dated as of November 26, 2014, among the Borrower,each lender from time to time party thereto, and Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, as amended,amended and restated, refinanced, renewed, replaced, extended, supplemented or otherwise modified from time to time, in each case inaccordance with the terms of the Prepetition Intercreditor Agreement.

“ABL Credit Agreement Loan Documents” means the Loan Documents under (and as defined in) the ABL Credit Agreement.

“ABL Facility Priority Collateral” has the meaning specified in the Prepetition Intercreditor Agreement.

“ABL Lenders” means the Lenders under (and as defined in) the ABL Credit Agreement.

“ABL Postpetition Collateral” has the meaning specified in the Orders.

“Acceptable Disclosure Statement” means the disclosure statement relating to the Acceptable Plan of Reorganization in the formattached to the Restructuring Support Agreement as Exhibit [F], with changes to such form as are satisfactory to the Required Lenders in theirsole discretion (as the same may be amended, supplemented, or modified from time to time after entry thereof with the consent of the RequiredLenders in their sole discretion).

“Acceptable Plan of Reorganization” means a Reorganization Plan for each of the Cases in the form attached to the RestructuringSupport Agreement as Exhibit [A], with changes to such form as are satisfactory to the Required Lenders in their sole discretion (as the samemay be amended, supplemented, or modified from time to time after entry thereof with the consent of the Required Lenders in their solediscretion).

2

“Acquisition” means the acquisition, directly or indirectly, by any Person of (a) not less than a majority of the Equity Interests ofanother Person, (b) all or substantially all of the assets of another Person or (c) all or substantially all of a line of business or division of anotherPerson, in each case (i) whether or not involving a merger or a consolidation with such other Person and (ii) whether in one transaction or aseries of related transactions.

“Ad Hoc Note Holder Committee” means the ad hoc group of holders that own or manage with the authority to act on behalf of thebeneficial owners of the 2019 Senior Notes and the 2022 Senior Notes, consisting of Ascribe Capital LLC, Brigade Capital Management, L.P.and Silver Point Capital, L.P., and such other entities that may join such ad hoc group from time to time.

“Adequate Protection Liens” has the meaning specified in the Orders.

“Adequate Protection Payment” has the meaning specified in the Orders.

“Administrative Agent” means U.S. Bank National Association in its capacity as administrative agent under any of the LoanDocuments, or any successor administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule10.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in substantially the form of Exhibit E-2 or any other formapproved by the Administrative Agent.

“Advances” means, collectively, the Initial Advance, the Second Advance, the Third Advance and the Final Advance.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controlsor is Controlled by or is under common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all the Lenders.

“Agreement” means this Superpriority Secured Debtor-in-Possession Term Loan Credit Agreement.

“Anti-Corruption Laws” has the meaning specified in Section 5.22.

“Applicable Percentage” means, with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of theAggregate Commitments represented by such Lender’s Commitment at such time, subject to adjustment as

3

provided in Section 2.16. If the commitment of each Lender to make Loans has been terminated pursuant to Section 8.02, or if theCommitments have expired, then the Applicable Percentage of each Lender in respect of the Aggregate Commitments shall be determinedbased on the Applicable Percentage of such Lender in respect of the Aggregate Commitments most recently in effect, giving effect to anysubsequent assignments. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 1.01 or inthe Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

“Applicable Premium” has the meaning specified in Section 2.05(c).

“Applicable Rate” means 12.00% per annum.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or anAffiliate of an entity that administers or manages a Lender.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with theconsent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form ofExhibit E-1.

“Assignment Triggering Event” means each of the following events: (i) entry of an order, or any other similar decree, by theBankruptcy Court that expands, or has the effect of expanding, the rights granted to the Existing Noteholder Lenders pursuant to the LoanDocuments unless the Required Lenders have consented to such expansion, (ii) the taking of any action by an Existing Noteholder Lenderwhich, if taken by any Loan Party, would constitute an Event of Default hereunder, (iii) the taking of any action (or the failure to take anyaction) by an Existing Noteholder Lender that results in such Existing Noteholder Lender becoming a Defaulting Lender, including the failureof any Existing Noteholder Lender to fund all or any of its Applicable Percentage of any Loan within two Business Days of the date on whichsuch Loan is required to be funded or (iv) in the event that an Existing Noteholder Lender has the right to consent to an amendment, waiver,consent or other modification to any of the Loan Documents that has the effect of extending the Scheduled Maturity Date to a date that is laterthan the twelve (12) month anniversary of the Closing Date, the failure by such Existing Noteholder Lender to timely deliver its consent tosuch amendment, waiver, consent or other modification.

“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereofthat would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic LeaseObligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement orinstrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or otheragreement or instrument were accounted for as a Capitalized Lease and (c) all Synthetic Debt of such Person.

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“Audited Financial Statements” means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal yearended December 31, 2015, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscalyear of the Borrower and its Subsidiaries, including the notes thereto.

“Avoidance Action” has the meaning specified in Section 2.14.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority inrespect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of theEuropean Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time whichis described in the EU Bail-In Legislation Schedule.

“Bankruptcy Code” means Title 11 of the United States Code, as amended, or any similar federal or state law for the relief of debtors.

“Bankruptcy Court” means the United States Bankruptcy Court for the District of Delaware or any other court having jurisdictionover the Cases from time to time.

“Beneficiaries” has the meaning specified in Section 11.01.

“Board” means the board of directors (or equivalent governing body) of the Borrower and each committee thereof.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrower Notice” shall have the meaning assigned to such term in the definition of Flood Zone Requirements.

“Borrowing” means a borrowing consisting of simultaneous Loans made by each of the Lenders pursuant to Section 2.01.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close underthe Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located.

“Capital Expenditures” means, with respect to any Person for any period, any expenditure in respect of the purchase or otheracquisition of any fixed or capital asset (excluding normal replacements and maintenance which are properly charged to current operations).For purposes of this definition, the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment orwith insurance

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proceeds shall be included in Capital Expenditures only to the extent of the amount by which such purchase price exceeds the credit granted bythe seller of such equipment for the equipment being traded in at such time or the amount of such insurance proceeds, as the case may be.

“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

“Carve-Out” has the meaning specified, and shall be construed and interpreted in accordance with, the Orders.

“Carve-Out Notice” has the meaning specified in the definition of Trigger Date in Section 1.01.

“Cases” has the meaning specified in the introductory paragraph hereto.

“Cash Collateral” has the meaning specified in the Orders.

“Cash Equivalents” means any of the following types of Investments, to the extent owned by the Borrower or any of its Subsidiariesfree and clear of all Liens (other than Liens created under the Orders and the Collateral Documents and other Liens permitted hereunder):

(a) readily marketable obligations issued or directly and fully guaranteed or insured by the United States of America or any agency orinstrumentality thereof having maturities of not more than 360 days from the date of acquisition thereof; provided that the full faith and creditof the United States of America is pledged in support thereof;

(b) time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a Lender or(B) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal bankingsubsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia,and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as described in clause (c) ofthis definition and (iii) has combined capital and surplus of not less than $1,000,000,000, in each case with maturities of not more than 180days from the date of acquisition thereof;

(c) commercial paper issued by any Person organized under the laws of any state of the United States of America and rated at least“Prime-1” (or the then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case with maturities ofnot more than 180 days from the date of acquisition thereof; and

(d) Investments, classified in accordance with GAAP as current assets of the Borrower or any of its Subsidiaries, in money marketinvestment programs registered under the Investment Company Act of 1940, which are administered by financial

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institutions that have the highest rating obtainable from either Moody’s or S&P, and the portfolios of which are limited solely to Investments ofthe character, quality and maturity described in clauses (a), (b) and (c) of this definition.

“Cash Management Order” shall mean one or more orders, in form and substance satisfactory to the Required Lenders in their solediscretion, authorizing, among other things, the continuation of the Debtors’ existing cash management systems and arrangements (as may beamended, supplemented or modified from time to time after entry thereof with the written consent of the Required Lenders, in their solediscretion).

“CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by theU.S. Environmental Protection Agency.

“CFC” means a Person that is a controlled foreign corporation under Section 957 of the Code.

“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law,rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation orapplication thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or nothaving the force of law) by any Governmental Authority, provided, that notwithstanding anything herein to the contrary, (i) the Dodd-FrankWall Street Reform and Consumer Protection Act and all requests, rules, guidelines, or directives thereunder or issued in connection therewithand (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on BankingSupervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III,shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, butexcluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or otherfiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the SecuritiesExchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person orgroup has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)),directly or indirectly, of 35% or more of the equity securities of the Borrower entitled to vote for members of the Board or equivalentgoverning body of the Borrower on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the rightto acquire pursuant to any option right); or

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(b) during any period of 12 consecutive months, a majority of the members of the Board or other equivalent governing body of theBorrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of suchperiod, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i)above constituting at the time of such election or nomination not less than a majority of that board or equivalent governing body or (iii) whoseelection or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) aboveconstituting at the time of such election or nomination not less than a majority of that board or equivalent governing body; or

(c) the passage of 30 days from the date upon which any Person or two or more Persons acting in concert shall have acquired bycontract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisitionof the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Borrower, or control over theequity securities of the Borrower entitled to vote for members of the Board or equivalent governing body of the Borrower on a fully-dilutedbasis (and taking into account all such securities that such Person or Persons have the right to acquire pursuant to any option right) representing35% or more of the combined voting power of such securities; or

(d) a “change of control” or any comparable term under, and as defined in, any credit agreement, indenture or other similaragreement governing any material post-petition debt shall have occurred;

provided that, notwithstanding the foregoing, the Acceptable Plan of Reorganization or the Restructuring Support Agreement shall notconstitute a Change of Control.

“Closing Date” means [-], 2016, so long as on or prior to such date all the conditions precedent in Section 4.01 have been satisfied orwaived in accordance with Section 10.01.

“Code” means the Internal Revenue Code of 1986.

“Collateral” means all of the “Collateral” referred to in the Collateral Documents, the Interim Order or the Final Order and all of theother property that is or is intended under the terms of the Collateral Documents, the Interim Order or the Final Order to be subject to Liens infavor of the Administrative Agent for the benefit of the Secured Parties.

“Collateral Documents” means, collectively, this Agreement, the Security Agreement, the Intellectual Property Security Agreement,the Intercompany Note, each of the Mortgages (if any), collateral assignments, Security Agreement Supplements, IP Security AgreementSupplements, security agreements, pledge agreements, landlord’s agreements, control agreements or other similar agreements delivered to the

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Administrative Agent pursuant to Sections 4.01 and 6.12, and each of the other agreements, instruments or documents that creates or purportsto create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties. The Collateral Documents shall supplement, andshall not limit, the security interests granted to the Administrative Agent for the benefit of the Secured Parties pursuant to the Orders.

“Commitment” means, as to each Lender, its obligation to make Loans to the Borrower pursuant to Section 2.01, in an aggregateprincipal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 1.01 under thecaption “Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, asapplicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“Compliance Certificate” means a certificate substantially in the form of Exhibit D.

“Consummation Date” means the date of the substantial consummation (as defined in section 1101 of the Bankruptcy Code and whichfor purposes of this Agreement shall be no later than the effective date) of a Reorganization Plan that is confirmed pursuant to an order of theBankruptcy Court.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement,instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of aPerson, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meaningscorrelative thereto.

“Credit Card Cash Collateral” means an amount not to exceed $2,000,000 pledged to Bank of America, N.A., and deposited in theBank of America, N.A. Account No. XXXXXX5481, pursuant to the Credit Card Control Agreement as security exclusively for theobligations under the P-Card Agreements.

“Credit Card Control Agreement” means that certain Treasury Management Services Security and Control Agreement dated as ofSeptember 14, 2016 between Bank of America, N.A. and Basic Energy Services L.P., as may be amended, modified or supplemented fromtime to time.

“Creditors’ Committee” has the meaning specified in the definition of “Carve-Out” in Section 1.01.

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefitof creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of

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the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“Debtors” has the meaning specified in the introductory paragraphs hereto.

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time,or both, would be an Event of Default.

“Default Rate” means an interest rate equal to (i) the Applicable Rate plus (ii) 3% per annum.

“Defaulting Lender” means, subject to Section 2.16(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans withintwo (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent andthe Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each ofwhich conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied or (ii)pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two (2) Business Days of thedate when due, (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply with its fundingobligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligationto fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (whichcondition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot besatisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm inwriting to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided thatsuch Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the AdministrativeAgent and the Borrower) or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under anyDebtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors orsimilar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or anyother state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue ofthe ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a GovernmentalAuthority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within theUnited States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such GovernmentalAuthority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender or (iii) become the subject of a Bail-inAction. Any determination by the Administrative Agent that a Lender is a Defaulting

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Lender under any one or more of clauses (a) through (d) above, and the effective date of such status, shall be conclusive and binding absentmanifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.16(b)) as of the date established therefor by theAdministrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower and eachother Lender promptly following such determination.

“Designated Jurisdiction” means any country or territory to the extent that such country or territory is the subject of any Sanctions(currently, Crimea, Cuba, Iran, North Korea, Sudan and Syria).

“DIP Budget” means a monthly line item budget for the Borrower and its Subsidiaries, substantially in the form attached hereto asExhibit B, covering a period from the Petition Date through the Scheduled Maturity Date, and dated as of a date that is no earlier than threeBusiness Days prior to the Closing Date.

“Disqualified Capital Stock” shall mean any Equity Interest which, by its terms (or by the terms of any security into which it isconvertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of anoptional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable atthe option of the holder thereof, in whole or in part, (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for(i) debt securities or (ii) any Equity Interests referred to in (a) above or (c) contains any repurchase obligation.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) ofany property by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer orother disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Dollar” and “$” mean lawful money of the United States.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which issubject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of aninstitution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiaryof an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent;

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein and Norway.

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authorityof any EEA Member Country

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(including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 10.06(b)(iii) and (v) (subject to suchconsents, if any, as may be required under Section 10.06(b)(iii)).

“Environmental Laws” means any and all federal, state, local and foreign statutes, laws (including common law), regulations,ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictionsrelating to Hazardous Materials, pollution and the protection of the environment or the release of any materials into the environment, includingthose related to air emissions and discharges to waste or public systems.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmentalremediation, fines, penalties or indemnities), of or relating to the Borrower, any other Loan Party or any of their respective Subsidiaries anddirectly or indirectly resulting from or based upon (a) any Environmental Law, (b) the generation, use, handling, transportation, storage,treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of anyHazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability isassumed or imposed with respect to any of the foregoing.

“Environmental Permit” means any permit, approval, identification number, license, franchise, certificate or other authorizationrelating to or required under any Environmental Law.

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in)such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or otherownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or otherownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (orsuch other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein),whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date ofdetermination (provided, however, that debt securities that are or by their terms may be convertible or exchangeable into or for Equity Interestsshall not constitute Equity Interests prior to conversion or exchange thereof).

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within themeaning of Section 414(b) or (c) of

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the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of the Borrower or any ERISAAffiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” asdefined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) acomplete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan isin reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition whichconstitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (g)the determination that any Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any liability under Title IV of ERISA, otherthan for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or anysuccessor person), as in effect from time to time.

“Event of Default” has the meaning specified in Section 8.01.

“Excluded Taxes” means, with respect to any Recipient of any payment to be made by or on account of any obligation of the Borrowerhereunder, (a) Taxes imposed on or measured by its overall net income (however denominated), and franchise Taxes imposed on it (in lieu ofnet income Taxes), by the United States, any State or the District of Columbia (or any political subdivision thereof) or by the jurisdiction (orany political subdivision thereof) under the Laws of which such recipient is organized or in which its principal office is located or, in the caseof any Lender, in which its applicable Lending Office is located, (b) any branch profits Taxes imposed by the United States, (c) in the case of aForeign Lender (other than an assignee pursuant to a request by the Borrower under Section 10.13), any United States withholding Tax that (i)is required to be imposed on amounts payable to such Foreign Lender pursuant to the Laws in force at the time such Foreign Lender becomes aparty hereto (or designates a new Lending Office) or (ii) is attributable to such Foreign Lender’s failure or inability (other than as a result of aChange in Law) to comply with clause (B) of Section 3.01(e)(ii), except to the extent that such Foreign Lender (or its assignor, if any) wasentitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower with respect tosuch withholding Tax pursuant to Section 3.01(a) and (d) any U.S. federal withholding Taxes imposed by FATCA.

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“Existing Noteholder Lender” means, at any time, any Lender specified on Schedule 10.06, any Affiliate thereof or any of theirsuccessors or permitted assigns.

“Exit Fee” means the fee payable pursuant to Section 2.09(c).

“Extraordinary Receipts” means the Net Proceeds of any payments received by any Loan Party or any of its Subsidiaries not in theordinary course of business and consisting, or otherwise in respect, of (a) judgments, proceeds of settlements or other consideration of any kindin connection with any cause of action or claim under color of law (including, in each case, any payments arising from, or in connection with,any non-judicial proceeding or alternative dispute resolution procedure), (b) indemnity payments, (c) tax refunds, (d) any purchase priceadjustment (other than a working capital adjustment) received in connection with any acquisition or any other purchase agreement (whether inrespect of assets or Equity Interests) and (e) any other extraordinary receipt.

“Facility” has the meaning specified in the introductory paragraph hereto.

“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version thatis substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretationsthereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal fundstransactions with members of the Federal Reserve System on such day, as published by the Federal Reserve Bank of New York on theBusiness Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be suchrate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day and (b) if no such rate is sopublished on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary,to a whole multiple of 1/100 of 1%) charged to U.S. Bank National Association on such day on such transactions as determined by theAdministrative Agent; provided that if the Federal Funds Rate shall be less than zero, such rate shall be deemed zero for all purposes of thisAgreement.

“Fee Letter” means the letter agreement, dated as of the Closing Date, between the Borrower and the Administrative Agent.

“Final Advance” has the meaning specified in Section 2.01(d).

“Final Advance Amount” has the meaning specified in Section 2.01(d).

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“Final Advance Date” has the meaning specified in Section 2.01(d).

“Final Order” means an order of the Bankruptcy Court authorizing and approving on a final basis, among other things, the Loans andthe transactions contemplated by this Agreement in the form of the Interim Order (with only such modifications thereto as are necessary toconvert the Interim Order to a final order and such other modifications as are satisfactory to the Required Lenders in their sole discretion) (asthe same may be amended, supplemented, or modified from time to time after entry thereof with the consent of the Required Lenders in theirsole discretion) as to which no stay has been entered.

“Flood Zone Requirements” means, with respect to any improved Real Property of any Loan Party that is Collateral, to the extentrequired to comply with the National Flood Insurance Reform Act of 1994 and related legislation (included the regulations of the Board ofGovernors of the Federal Reserve System), to the extent applicable to the Administrative Agent or any Lender: (1) a completed standard floodhazard determination form, (2) if the improvement(s) to any such improved Real Property is located in a special flood hazard area, a notice tothe Borrower (a “Borrower Notice”) and, if applicable, notification to such Loan Party that flood insurance coverage under the National FloodInsurance Program (the “NFIP”) is not available because the community does not participate in the NFIP, (3) documentation evidencing theapplicable Loan Party’s receipt of the Borrower Notice and (4) if the Borrower Notice is required to be given and flood insurance is availablein the community in which the property is located, a copy of the flood insurance policy, such Loan Party’s application for a flood insurancepolicy plus proof of premium payment, a declaration page confirming that flood insurance has been issued, or such other evidence of floodinsurance satisfactory to the Administrative Agent and the federally regulated Lenders.

“Foreign Lender” means any Lender that is not a U.S. Person.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwiseinvesting in commercial loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” means generally accepted accounting principles in the United States set forth from time to time in the opinions andpronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements andpronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority withinthe accounting profession) including the FASB Accounting Standards Codification, that are applicable to the circumstances as of the date ofdetermination, consistently applied and subject to Section 1.03.

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“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof,whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-nationalbodies such as the European Union or the European Central Bank).

“GS Approved Party” means any of The Goldman Sachs Group, Inc. and its Affiliates (“GS”), and any funds, investments, Persons,vehicles or accounts that are managed or sponsored by GS or for which GS acts as investment advisor.

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economiceffect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner,whether directly or indirectly, and including any obligation of such Person, direct or indirect, to purchase or pay (or advance or supply fundsfor the purchase or payment of) such Indebtedness or other obligation, (i) to purchase or lease property, securities or services for the purpose ofassuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation,(ii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of theprimary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iii) entered into for the purpose of assuringin any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect suchobligee against loss in respect thereof (in whole or in part) or (b) any Lien on any assets of such Person securing any Indebtedness or otherobligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent orotherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal tothe stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if notstated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.The term “Guarantee” as a verb has a corresponding meaning.

“Guaranteed Obligations” has the meaning specified in Section 11.01.

“Guarantors” means, collectively, the Subsidiaries of the Borrower listed on Schedule 6.12 and each other Subsidiary of the Borrowerthat shall be required to execute and deliver a guaranty or guaranty supplement pursuant to Section 6.12.

“Guaranty” means the Guaranty made by the Guarantors in Article XI in favor of the Secured Parties, together with each otherguaranty and guaranty supplement delivered pursuant to Section 6.12.

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“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or otherpollutants, including petroleum, its derivatives, by-products and other hydrocarbons, asbestos or asbestos-containing materials, polychlorinatedbiphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any EnvironmentalLaw.

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included asindebtedness or liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loanagreements or other similar instruments;

(b) the maximum amount of all direct or contingent obligations of such Person arising under letters of credit (including standby andcommercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in theordinary course of business and not past due for more than 60 days after the date on which such trade account was created);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person(including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have beenassumed by such Person or is limited in recourse; provided that, if such indebtedness is limited in recourse, then the amount of suchindebtedness for purposes of this Agreement will not exceed the fair market value of such property;

(f) all Attributable Indebtedness in respect to Capitalized Leases and Synthetic Lease Obligations of such Person and all SyntheticDebt of such Person;

(g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interestin such Person or any other Loan Party or Subsidiary valued, in the case of a redeemable preferred interest, at the greater of its voluntary orinvoluntary liquidation preference plus accrued and unpaid dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than ajoint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a

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joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any SwapContract on any date shall be deemed to be the Swap Termination Value thereof as of such date.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

“Initial Advance” has the meaning specified in Section 2.01(a).

“Initial Advance Amount” has the meaning specified in Section 2.01(a).

“Initial Advance Date” has the meaning specified in Section 2.01(a).

“Initial Tranche” has the meaning specified in Section 2.01(b).

“Insolvency Proceeding” means any case or proceeding commenced by or against a Person under any state, federal or foreign law for,or any agreement of such Person to, (a) the entry of an order for relief under the Bankruptcy Code of the United States, or any otherinsolvency, debtor relief or debt adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or othercustodian for such Person or any part of its property; or (c) an assignment or trust mortgage for the benefit of creditors.

“Intellectual Property Security Agreement” has the meaning specified in Section 6.12.

“Intercompany Note” means the Intercompany Note to be executed by the Borrower and each Subsidiary of the Borrower, in form andsubstance reasonably satisfactory to the Required Lenders, as supplemented from time to time.

“Interest Payment Date” means the last Business Day of each calendar month and the Maturity Date.

“Interim Order” means an interim order of the Bankruptcy Court authorizing and approving on an interim basis, among other things,the Loans and the transactions contemplated by this Agreement in the form attached to the Restructuring Support Agreement as Exhibit [C](and also attached hereto for reference as Exhibit H), with changes to such form as are satisfactory to the Required Lenders in their solediscretion (as the same may be amended, supplemented, or modified from time to time after entry thereof with the consent of the RequiredLenders in their sole discretion).

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) thepurchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to,

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Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another Person or (c) an Acquisition. Forpurposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequentincreases or decreases in the value of such Investment.

“IP Rights” has the meaning specified in Section 5.17.

“IP Security Agreement Supplement” means any Copyright Security Agreement Supplement, Patent Security Agreement Supplementor Trademark Security Agreement Supplement, as such terms are defined in the Security Agreement.

“IRS” means the United States Internal Revenue Service.

“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances,codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any GovernmentalAuthority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties,requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having theforce of law.

“Lender” has the meaning specified in the introductory paragraph hereto.

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s AdministrativeQuestionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

“License” means any license or agreement under which a Loan Party is authorized to use IP Rights in connection with any manufacture,marketing, distribution or disposition of Collateral, any use of property or any other conduct of its business.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, orpreference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever(including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, andany financing lease having substantially the same economic effect as any of the foregoing).

“Loan” means any loan by a Lender to the Borrower under Article II.

“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the Collateral Documents, (d) the Fee Letter and (e) theOrders.

“Loan Notice” means a notice of a Borrowing substantially in the form of Exhibit A, appropriately completed and signed by aResponsible Officer of the Borrower.

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“Loan Parties” means, collectively, the Borrower and each Guarantor.

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business,properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Borrower or the Borrower and its Subsidiaries taken as awhole, other than as a result of events leading up or related to the Cases and as customarily occurs following the commencement of aproceeding under Chapter 11 of the Bankruptcy Code and the commencement of the Cases or as a result of matters publicly disclosed prior tothe filing of the Cases or as a result of actions req uired by, or as a result of failing to take actions that are restricted by, the Orders; (b) amaterial impairment of the rights and remedies of the Administrative Agent or any Lender under any Loan Document, or of the ability of anyLoan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality,validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

“Material Contract” means, with respect to any Person, any agreement or instrument to which such Person is a party which is materialto the business, condition (financial or otherwise), operations, performance or properties of such Person.

“Material Real Property” means (i) any parcel or parcels of land together with related improvements thereon (including Salt WaterDisposal Assets) owned in fee by any Loan Party and (ii) any parcel or parcels of land leased by any Loan Party, together with any Salt WaterDisposal Assets thereon, underlying, providing access to or otherwise related to Salt Water Disposal Assets; provided that, Material RealProperty shall exclude any lease of real property which by its express terms prohibits the grant of a security interest or requires a landlordconsent, except to the extent such prohibition is ineffective under the UCC or the Bankruptcy Code, or rendered ineffective by the Orders orthe Bankruptcy Court, and the landlord thereunder refuses to execute and deliver such consent notwithstanding Borrower’s commerciallyreasonable efforts (which, for the avoidance of doubt, will not require the expenditure of any consent fee, other than reimbursement of costs, tothe landlord).

“Maturity Date” means the earliest of (i) the Scheduled Maturity Date, (ii) the effective date of a Reorganization Plan or plan ofliquidation in the Cases, (iii) the date of filing by the Borrower of a Reorganization Plan that is not an Acceptable Plan of Reorganization or(iv) the date of termination of the Commitments and the acceleration of the Loans pursuant to Article VIII.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Mortgages” means any mortgages or deeds of trust or other similar security documents creating and evidencing a Lien on any RealProperty or any Salt Water Disposal Assets made by any Loan Party in favor of, or for the benefit of, the Administrative Agent for the benefitof the Secured Parties, suitable for recording or

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filing in the appropriate jurisdiction, in form and substance reasonably satisfactory to the Administrative Agent, at the direction of theRequired Lenders.

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borroweror any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated tomake contributions.

“Multiple Employer Plan” means a Plan which has two or more contributing sponsors (including the Borrower or any ERISAAffiliate) not less than two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash receivedin respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note orinstallment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and whenreceived, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards andsimilar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) inconnection with such event, (ii) the amount of all taxes paid or reasonably estimated to be payable as a result thereof (after taking into accountany available tax credits or deductions and any tax sharing arrangements) and (iii) the amount of any reserves established in accordance withGAAP consistently applied to fund contingent liabilities under any indemnification obligations and any purchase price adjustments associatedwith a sale, transfer or other disposition of an asset that are directly attributable to such event.

“NFIP” shall have the meaning assigned to such term in the definition of Flood Zone Requirements.

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approvalof all Lenders or all affected Lenders in accordance with the terms of Section 10.01 and (b) has been approved by the Required Lenders.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

“Note” means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender, substantially inthe form of Exhibit C.

“Notice of Loan Prepayment” means a notice of prepayment with respect to a Loan, which shall be substantially in the form of ExhibitF, appropriately completed and signed by a Responsible Officer.

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“NPL” means the National Priorities List under the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

“Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any LoanDocument or otherwise with respect to any Loan, in each case whether direct or indirect (including those acquired by assumption), absolute orcontingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by oragainst any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in suchproceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“Orders” means, collectively, the Interim Order and the Final Order.

“Organization Documents” means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (orequivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company,the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust orother form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement,instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable GovernmentalAuthority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of suchentity.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection betweensuch Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, becomea party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any othertransaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Superpriority Claim” means a superpriority administrative expense claim against any of the Debtors with priority over anyand all claims against each of the Debtors, now existing or hereafter arising, of any kind whatsoever, including all administrative expenses ofthe kind specified in sections 503(b) and 507(b) of the Bankruptcy Code and any and all administrative expenses or other claims arising undersections 105, 326, 328, 330, 331, 365, 503(b), 506(c), 507(a), 507(b), 726, 1113 or 1114 of the Bankruptcy Code other than the SuperpriorityClaims described in Section 2.14.

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise fromany payment made under,

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from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, orotherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment(other than an assignment made pursuant to Section 3.06(b)).

“Outstanding Amount” means, with respect to Loans on any date, the aggregate outstanding principal amount thereof after givingeffect to any borrowings and prepayments or repayments of Loans occurring on such date.

“P-Card Agreements” means, collectively, (i) that certain Bank of America Corporate Purchasing Card Agreement between Bank ofAmerica, N.A. and Basic Energy Services L.P., dated on or around July 21, 2005 and (ii) that certain Commercial Prepaid Card PurchaseAgreement between Bank of America, N.A. and Basic Energy Services L.P., dated on our around March 14, 2006, each as may be amended,supplemented or modified from time to time.

“Participant” has the meaning specified in Section 10.06(d).

“Participant Register” has the meaning specified in Section 10.06.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Act” means the Pension Protection Act of 2006.

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including anyinstallment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act,Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Sections 412, 430, 431, 432 and436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that ismaintained or is contributed to by the Borrower and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to theminimum funding standards under Section 412 of the Code.

“Permitted Liens” means any Liens permitted by Section 7.01 and any Liens otherwise permitted or created or established by theOrders.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership,Governmental Authority or other entity.

“Petition Date” has the meaning specified in the introductory paragraph hereto.

“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained foremployees of the Borrower or any

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ERISA Affiliate or any such Plan to which the Borrower or any ERISA Affiliate is required to contribute on behalf of any of its employees.

“Platform” has the meaning specified in Section 6.02.

“Pledged Equity” has the meaning specified in the Security Agreement.

“Prepetition ABL Adequate Protection Liens” has the meaning specified in the Orders.

“Prepetition Cash Management System” has the meaning specified in Section 6.22.

“Prepetition Intercreditor Agreement” means the Intercreditor Agreement, dated as of February 26, 2016, by and among thePrepetition Term Loan Administrative Agent, the ABL Agent and the Loan Parties under (and as defined in) the Prepetition Term Loan CreditAgreement party thereto, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated orreplaced in accordance with the terms thereof.

“Prepetition Payment” means a payment (by way of adequate protection, set off or otherwise) of principal, interest or otherwise onaccount of any (i) Indebtedness of any Debtor outstanding and unpaid on the date on which such Person becomes a Debtor, (ii) “critical vendorpayments” or (iii) trade payables (including in respect of reclamation claims) or other pre-petition claims against any Debtor.

“Prepetition Term Loan Administrative Agent” means the Administrative Agent under (and as defined in) the Prepetition TermLoan Credit Agreement.

“Prepetition Term Loan Credit Agreement” means the Term Loan Credit Agreement dated as of February 17, 2016, among BasicEnergy Services, Inc., as borrower, the lenders from time to time party thereto and the Prepetition Term Loan Administrative Agent, as thesame now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced in accordance with the termsthereof.

“Prepetition Term Loan Credit Agreement Loan Documents” means the Loan Documents under (and as defined in) the PrepetitionTerm Loan Credit Agreement.

“Prepetition Term Loan Lenders” means the Lenders under (and as defined in) the Prepetition Term Loan Credit Agreement.

“Prepetition Term Loans” means the Loans under (and as defined in) the Prepetition Term Loan Credit Agreement.

“Primed Liens” has the meaning specified in Section 2.14.

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“Priming Liens” has the meaning specified in Section 2.14.

“Public Lender” has the meaning specified in Section 6.02.

“Qualified Capital Stock” of any Person shall mean any capital stock of such person that is not Disqualified Capital Stock; providedthat such capital stock shall not be deemed Qualified Capital Stock to the extent sold or owed to a Subsidiary of such person or financed,directly or indirectly, using funds (1) borrowed from such person or any Subsidiary of such person until and to the extent such borrowing isrepaid or (2) contributed, extended, guaranteed or advanced by such person or any Subsidiary of such person (including in respect of anyemployee stock ownership or benefit plan). Unless otherwise specified, Qualified Capital Stock refers to Qualified Capital Stock of Borrower.

“Real Estate Collateral Requirement” means the requirement that the Administrative Agent shall have received a Mortgage for eachMaterial Real Property, which includes to the extent reasonably available, with respect to any Salt Water Disposal Well, a specific reference tothe API number for such well and any lease (if applicable), together with the following documents: (a) with respect to each Material RealProperty that has a net book value of $500,000 or more, a title report and a fully paid policy of title insurance (or “pro forma” or marked upcommitment having the same effect of a title insurance policy) (i) in a form approved by the Administrative Agent, at the direction of theRequired Lenders (such approval not to be unreasonably withheld) insuring the Lien of the Mortgage encumbering such property as a valid firstpriority Lien, (ii) in an amount reasonably satisfactory to the Administrative Agent, at the direction of the Required Lenders, (iii) issued by anationally recognized title insurance company reasonably satisfactory to the Administrative Agent, at the direction of the Required Lenders(the “Title Company”), (iv) containing no exceptions other than (A) the Liens described in Sections 7.01(a), (c), (d), (g) and (j) and (B) Liensthat are otherwise acceptable to the Administrative Agent and the Required Lenders and (v) that includes (A) such coinsurance and directaccess reinsurance as the Required Lenders may reasonably deem necessary or desirable and (B) such endorsements or affirmative insurancereasonably required by the Administrative Agent, at the direction of the Required Lenders, and available in the applicable jurisdiction, (b) withrespect to each Material Real Property that has a net book value of between $100,000 and $500,000, a title report, (c) to the extent required byRequired Lenders pursuant to Section 6.18, an appraisal complying with the requirements of the Financial Institutions Reform Recovery andEnforcement Act of 1989, by a third-party appraiser selected by the Administrative Agent, (d) with respect to each Material Real Property, anopinion of local counsel reasonably acceptable to the Administrative Agent and the Required Lenders and in form and substance satisfactory tothe Administrative Agent and the Required Lenders, (e) with respect to each Material Real Property on which is located a building or mobilehome, to the extent applicable to the Administrative Agent or any Lender, satisfy the Flood Zone Requirements, (f) to the extent required bythe Administrative Agent, environmental assessment reports, including existing reports, each in scope, form and substance

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reasonably satisfactory to the Administrative Agent, at the direction of the Required Lenders and (g) with respect to any leased real propertyrelated to Salt Water Disposal Assets, to the extent required by the applicable lease, Borrower shall use commercially reasonable efforts toobtain the consent of the lessor of such real property to the Mortgage of such lease in form and substance reasonably acceptable to theAdministrative Agent, at the direction of the Required Lenders (which, for the avoidance of doubt, will not require the expenditure of anyconsent fee, other than reimbursement of costs, to the landlord). For the purposes of determining relevant net book value with respect to anyMaterial Real Property, such value shall (x) with respect to Material Real Property as of the Closing Date, equal the amount set forth oppositesuch Material Real Property on Schedule 5.08, (y) with respect to Material Real Property that is leased or acquired by a Loan Party after theClosing Date, be reasonably determined on the date of acquisition of such Material Real Property and (z) with respect to Material Real Propertyowned or leased by an entity which becomes a Loan Party after the Closing Date, be reasonably determined on the date on which such entitybecomes a Loan Party, in each case as determined by the Administrative Agent at the direction of the Required Lenders. Notwithstanding theforegoing, the Borrower will not be required to deliver a title policy with respect to (i) any Salt Water Disposal Asset that is uninsurable due tothe nature of the Borrower’s interest in such Salt Water Disposal Asset or (ii) any Salt Water Disposal Asset for which the issuance of a titlepolicy requires documentation from a third party that has been requested but has not been delivered after the Borrower has used commerciallyreasonable efforts (without the expenditure of funds) to obtain such documentation.

“Real Property” means any parcel or parcels of land together with related improvements thereon owned in fee or leased by any LoanParty (including Salt Water Disposal Assets).

“Recipient” means (a) any Lender and (b) the Administrative Agent, as applicable.

“Register” has the meaning specified in Section 10.06(c).

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents,trustees, administrators, managers, advisors, attorneys and representatives of such Person and of such Person’s Affiliates.

“Removal Effective Date” has the meaning set forth in Section 9.06.

“Reorganization Plan” means a plan of reorganization in any or all of the Cases.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day noticeperiod has been waived.

“Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Outstandingsand (b) aggregate unused Commitments; provided that the unused Commitment of, and the portion of the Total

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Outstandings held or deemed held by, any Defaulting Lender or, subject to Section 10.06(b)(vii), any Existing Noteholder Lender shall beexcluded for purposes of making a determination of Required Lenders.

“Resignation Effective Date” has the meaning set forth in Section 9.06.

“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or controller ofa Loan Party, solely for purposes of the delivery of incumbency certificates pursuant to Section 4.01, the secretary or any assistant secretary ofa Loan Party and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the applicable Loan Party sodesignated by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the applicable LoanParty designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent. Any document deliveredhereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessarycorporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to haveacted on behalf of such Loan Party. To the extent requested by the Administrative Agent or the Required Lenders, each Responsible Officerwill provide an incumbency certificate and to the extent requested by the Administrative Agent or the Required Lenders, appropriateauthorization documentation, in form and substance satisfactory to the Administrative Agent, at the direction of the Required Lenders.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to anycapital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property),including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation ortermination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners ormembers (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment.

“Restructuring Support Agreement” means that certain Restructuring Support Agreement, dated as of October [ ], 2016, among theBorrower, the Guarantors, the Prepetition Term Loan Lenders, certain holders of the 2019 Senior Notes and the 2022 Senior Notes and theother parties thereto (as may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof).

“Rolling Budget” means a projected statement of sources and uses of cash for the Borrower and its Subsidiaries on a weekly basis,covering the 13 calendar weeks immediately succeeding the week during which such Rolling Budget is required to be delivered hereunder,including the anticipated use of the cash proceeds of Loans made hereunder and of Cash Collateral for each week during such period andsetting forth, among other things, on a cumulative roll-forward basis the projected cash disbursements

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and projected cash receipts for each applicable week, in form substantially similar to the initial Rolling Budget attached hereto as Exhibit G(unless otherwise reasonably agreed by the Required Lenders) and in substance reasonably satisfactory to the Required Lenders (which RollingBudget shall be deemed reasonably satisfactory if the Required Lenders do not provide notice of dispute to such Rolling Budget within threeBusiness Days after delivery thereof).

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

“Salt Water Disposal Assets” means assets used by any Loan Party in connection with the operation of a commercial salt water andnon-hazardous oil and gas waste disposal facility, including any Salt Water Disposal Well and any tankage or equipment used in connectiontherewith.

“Salt Water Disposal Well” means an underground well used for the disposal of fluids associated with oil and gas production.

“Sanctions” means any sanction administered or enforced by the United States Government (including OFAC and the United StatesDepartment of State), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.

“Scheduled Maturity Date” means [-], 2017; provided that, if such date is not a Business Day, the Scheduled Maturity Date shall bethe next preceding Business Day.

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“Second Advance” has the meaning specified in Section 2.01(b).

“Second Advance Amount” has the meaning specified in Section 2.01(b).

“Second Advance Date” has the meaning specified in Section 2.01(b).

“Second Tranche” has the meaning specified in Section 2.01(d).

“Secured Parties” means, collectively, the Administrative Agent, the Lenders, each co-agent or sub-agent appointed by theAdministrative Agent from time to time pursuant to Section 9.05, and the other Persons the Obligations owing to which are or are purported tobe secured by the Collateral under the terms of the Collateral Documents.

“Security Agreement” means the Security Agreement dated as of the Closing Date, as amended and supplemented from time to time,executed by each of the Loan Parties in favor of the Administrative Agent. The Security Agreement shall supplement, and shall not limit, thesecurity interests granted pursuant to the Orders.

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“Security Agreement Supplement” means the form of supplement attached to the Security Agreement as Annex I.

“Senior Notes” means (a) the 2019 Senior Notes and (b) the 2022 Senior Notes.

“Senior Notes Documents” means (a) the 2019 Senior Notes Documents and (b) the 2022 Senior Notes Documents.

“Subject Obligations” has the meaning specified in Section 11.06(b).

“Subordinated Obligations” has the meaning specified in Section 11.08(a).

“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which amajority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (otherthan securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or themanagement of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unlessotherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

“Superpriority Claim” has the meaning specified in Section 2.14.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions,commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bondindex swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreignexchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swaptransactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including anyoptions to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) anyand all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form ofmaster agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange MasterAgreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”),including any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legallyenforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed outand termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in

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clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or anyAffiliate of a Lender).

“Synthetic Debt” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect oftransactions entered into by such Person that are intended to function primarily as a borrowing of funds (including any minority interesttransactions that function primarily as a borrowing) but are not otherwise included in the definition of “Indebtedness” or as a liability on theconsolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or taxretention lease or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creatingobligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person,would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding),assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicablethereto.

“Term Loan Priority Collateral” has the meaning specified in the Prepetition Intercreditor Agreement.

“Term Loan Priority Collateral Primed Liens” has the meaning specified in Section 2.14(a).

“Term Loan Priority Collateral Priming Liens” has the meaning specified in Section 2.14(a).

“Term Loan Proceeds Collateral Account” has the meaning assigned to such term in the in the Prepetition Term Loan CreditAgreement.

“Testing Date” means the last Business Day of each week occurring after the Closing Date, which initial Testing Date shall be[November 4, 2016].

“Testing Period” has the meaning set forth in Section 6.01(h).

“Title Company” has the meaning assigned to such term in the definition of Real Estate Collateral Requirement.

“Third Advance” has the meaning specified in Section 2.01(c).

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“Third Advance Amount” has the meaning specified in Section 2.01(c).

“Third Advance Date” has the meaning specified in Section 2.01(c).

“Total Outstandings” means the aggregate Outstanding Amount of all Loans.

“Trigger Date” means the earlier of (i) the first business day after the occurrence of an Event of Default and delivery by the Lenders ofnotice thereof (the “Carve-out Notice”) to (A) the United States Trustee and (B) the Borrower’s lead restructuring counsel (and, upon receipt,Borrower’s lead restructuring counsel shall promptly deliver such Carve-out Notice to the United States Trustee) and (ii) the Maturity Date.

“UCC” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect ofperfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effectin a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such otherjurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“United States” and “U.S.” mean the United States of America.

“U.S. Person” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii).

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powersof such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-downand conversion powers are described in the EU Bail-In Legislation Schedule.

Section 1.02. Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwisespecified herein or in such other Loan Document:

(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the contextmay require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and“including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaningand effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or otherdocument (including the Loan Documents and any Organization Document) shall be construed as referring to such agreement, instrument or

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other document as from time to time amended, modified, extended, restated, replaced or supplemented from time to time (subject to anyrestrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein toany Person shall be construed to include such Person’s successors and assigns, (iii) the words “hereto,” “herein,” “hereof” and “hereunder,”and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to anyparticular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shallbe construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, the Loan Document in which suchreferences appear, (v) any reference to any law shall include all statutory and regulatory rules, regulations, orders and provisions consolidating,amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law orregulation as amended, modified, extended, restated, replaced or supplemented from time to time, and (vi) the words “asset” and “property”shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash,securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from andincluding;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect theinterpretation of this Agreement or any other Loan Document.

Section 1.03. Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and allfinancial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be preparedin conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used inpreparing the Audited Financial Statements, except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes ofdetermining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of theBorrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

(b) Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement setforth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and theBorrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change inGAAP

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(subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computedin accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lendersfinancial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliationbetween calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Without limiting the foregoing,leases shall continue to be classified and accounted for on a basis consistent with that reflected in the Audited Financial Statements for allpurposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutuallyacceptable amendment addressing such changes, as provided for above.

(c) Consolidation of Variable Interest Entities. All references herein to consolidated financial statements of the Borrower and itsSubsidiaries or to the determination of any amount for the Borrower and its Subsidiaries on a consolidated basis or any similar reference shall,in each case, be deemed to include each variable interest entity that the Borrower is required to consolidate pursuant to FASB ASC 810 as ifsuch variable interest entity were a Subsidiary as defined herein.

Section 1.04. Rounding. Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall becalculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places bywhich such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearestnumber).

Section 1.05. Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Central time(daylight or standard, as applicable).

Section 1.06. Currency Equivalents Generally. Any amount specified in this Agreement (other than in Articles II and IX) or any ofthe other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalentamount thereof in the applicable currency to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as definedbelow) for the purchase of such currency with Dollars. For purposes of this Section 1.06, the “Spot Rate” for a currency means the ratedetermined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by suchPerson of such currency with another currency through its principal foreign exchange trading office at approximately 10:00 a.m. on the datetwo Business Days prior to the date of such determination; provided that the Administrative Agent may obtain such spot rate from anotherfinancial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determinationa spot buying rate for any such currency.

Section 1.07. Uniform Commercial Code. Terms relating to Collateral used and not otherwise defined herein that are defined in theUCC shall have the meanings set forth in the UCC, as applicable and as the context requires.

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ARTICLE II THE COMMITMENTS AND LOANS

Section 2.01. The Loans.

(a) The Initial Advance. Subject to the terms and conditions set forth herein and in the Orders, each Lender severally agrees tomake a loan to the Borrower on the Closing Date (such loan, the “Initial Advance”) in an amount equal to its Applicable Percentage of thelesser of (i) $30,000,000 and (ii) the amount authorized by the Bankruptcy Court in the Interim Order (such lesser amount, the “InitialAdvance Amount”). Amounts borrowed under this Section 2.01(a) and repaid or prepaid may not be reborrowed.

(b) The Second Advance. Subject to the terms and conditions set forth herein (including Section 2.02(a)) and in the Orders, eachLender severally agrees to make a loan to the Borrower on any Business Day during the period commencing on the date of the Final Order andending at 5:00 p.m. (New York City time) on the date that is one day prior to the 100 Day Anniversary (such loan, the “Second Advance”; theCommitments with respect thereto and with respect to the Initial Advance (in an aggregate amount equal to $40,000,000), the “InitialTranche”; the date the Second Advance is made, the “ Second Advance Date”) in an amount equal to its Applicable Percentage of the lesserof (i) $10,000,000 and (ii) the incremental amount in excess of the Initial Advance authorized by the Bankruptcy Court in the Final Order (suchlesser amount, the “Second Advance Amount”). Amounts borrowed under this Section 2.01(b) and repaid or prepaid may not be reborrowed.

(c) The Third Advance. Subject to the terms and conditions set forth herein (including Section 2.02(a)) and in the Orders, eachLender severally agrees to make a loan to the Borrower on any Business Day during the period commencing on the later of (x) the date of theFinal Order and (y) the 100 Day Anniversary and ending on the date that is two months prior to the Scheduled Maturity Date (such loan, the“Third Advance” and the date such loan is made, the “Third Advance Date”) in an amount equal to its Applicable Percentage of the lesser of(i) $40,000,000 and (ii) the incremental amount in excess of the Initial Advance authorized by the Bankruptcy Court in the Final Order less theSecond Advance Amount (such lesser amount, the “Third Advance Amount”). Amounts borrowed under this Section 2.01(c) and repaid orprepaid may not be reborrowed.

(d) The Final Advance. Subject to the terms and conditions set forth herein (including Section 2.02(a)) and in the Orders, eachLender severally agrees to make a loan to the Borrower on any Business Day during the period commencing on the later of (x) the date of theFinal Order and (y) the 100 Day Anniversary and ending on the date that is two months prior to the Scheduled Maturity Date (such loan, the“Final Advance”; the Commitments with respect thereto and with respect to the Third Advance (in an aggregate amount equal to$50,000,000), the “Second Tranche”; the date the Final

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Advance is made, the “Final Advance Date”) in an amount equal to its Applicable Percentage of the lesser of (x) the remaining Commitmentsand (y) the incremental amount in excess of the Initial Advance authorized by the Bankruptcy Court in the Final Order less the SecondAdvance Amount and the Third Advance Amount (such lesser amount, the “Final Advance Amount”). Amounts borrowed under this Section2.01(d) and repaid or prepaid may not be reborrowed.

Section 2.02. Borrowings of Loans.

(a) Each Borrowing shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by: (i)telephone or (ii) a Loan Notice. A Loan Notice in respect of the Initial Advance shall be delivered on the Closing Date in accordance withSection 4.02 and each other notice must be received by the Administrative Agent not later than 11:00 a.m. (i) in the case of the SecondAdvance, at least seven days prior to the requested date of such Borrowing and (ii) in the case of the Third Advance and the Final Advance, atleast 24 days prior to the requested date of such Borrowing. Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must beconfirmed promptly by delivery to the Administrative Agent of a written Loan Notice, appropriately completed and signed by a ResponsibleOfficer of the Borrower. Each Loan Notice and each telephonic notice shall specify (i) whether the Borrower is requesting the Initial Advance,the Second Advance, Third Advance or the Final Advance, (ii) the requested date of the Borrowing (which shall be a Business Day) and (iii)the principal amount of Loans to be borrowed (which (w) in the case of the Initial Advance, shall be in an amount equal to the Initial AdvanceAmount, (x) in the case of the Second Advance, shall be in an amount equal to the Second Advance Amount, (y) in the case of the ThirdAdvance, shall be in an amount equal to the Third Advance Amount and (z) in the case of the Final Advance, shall be in an amount equal tothe Final Advance Amount).

(b) Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its ApplicablePercentage of the applicable Loans. Each Lender shall make the amount of its Loan available to the Administrative Agent in immediatelyavailable funds at the Administrative Agent’s Office not later than 12:00 noon on the Business Day specified in the applicable Loan Notice.Upon satisfaction of the applicable conditions set forth in Section 4.02, the Administrative Agent shall make all funds so received available tothe Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of theAdministrative Agent with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to(and reasonably acceptable to) the Administrative Agent by the Borrower.

Section 2.03. [Reserved].

Section 2.04. [Reserved].

Section 2.05. Prepayments.

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(a) Optional. The Borrower may, upon notice to the Administrative Agent pursuant to delivery to the Administrative Agent of aNotice of Loan Prepayment, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty, exceptas set forth in Section 2.05(c); provided that (i) such notice must be received by the Administrative Agent not later than 10:00 a.m. oneBusiness Day prior to the date of such prepayment and (ii) any prepayment of Loans shall be in a principal amount of $1,000,000 or a wholemultiple of $1,000,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shallspecify the date and amount of such prepayment. The Administrative Agent will promptly notify each Lender of its receipt of each such notice,and of the amount of such Lender’s Applicable Percentage of such prepayment. If such notice is given by the Borrower, the Borrower shallmake such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Anyprepayment of a Loan shall be accompanied by all accrued interest on the amount prepaid. Subject to Section 2.16, each such prepayment shallbe applied to the Loans of the Lenders in accordance with their respective Applicable Percentages.

(b) Mandatory.

(i) [Reserved].

(ii) Sales of Assets. Upon receipt of Net Proceeds from (A) the sale or other disposition of any property or assets of anyLoan Party or any of its Subsidiaries (other than inventory sold in the ordinary course) or (B) any casualty insurance pursuant to Section6.07 or business interruption insurance, or if any of such property or assets are comprised of real property subject to a mortgage that isdamaged, destroyed or taken by condemnation, in whole or in part, the Borrower shall pay or cause such Loan Party or its Subsidiaries topay to the Administrative Agent, for the ratable benefit of the Lenders, an amount equal to 100% of such Net Proceeds as a mandatoryprepayment of the Obligations; provided that, no proceeds realized in a transaction or series of transactions which would otherwise besubject to the prepayment requirements under the foregoing clause (A) or (B) shall constitute Net Proceeds for purposes of this Section2.05(b)(ii) until the aggregate proceeds from all such transactions exceed $100,000 over the term of this Agreement (and thereafter allsuch proceeds, including the initial $100,000 of such proceeds, shall constitute Net Proceeds for purposes of this Section 2.05(b)(ii) andbe subject to the prepayment requirement included herein); provided that Net Proceeds from the sale or other disposition of ABL FacilityPriority Collateral shall be applied in accordance with the Orders.

(iii) Proceeds from Issuance of Indebtedness. If any Loan Party or any of its Subsidiaries issues any Indebtedness (other thanIndebtedness permitted pursuant to Section 7.02), the Borrower shall pay, or cause such Loan Party or its Subsidiaries to pay, to theAdministrative Agent, for the ratable benefit of the Lenders, when and as received by such Loan Party or its Subsidiaries, as a

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mandatory prepayment of the Obligations, an amount equal to 100% of the Net Proceeds of such issuance of Indebtedness.

(iv) Proceeds from Issuance of Equity Interests. If any Loan Party or any of its Subsidiaries issues any of its EquityInterests, the Borrower shall pay, or cause such Loan Party or its Subsidiaries to pay, to the Administrative Agent, for the ratable benefitof the Lenders, when and as received by such Loan Party or its Subsidiaries, as a mandatory prepayment of the Obligations, an amountequal to 100% of the Net Proceeds of such issuance of Equity Interests.

(v) Extraordinary Receipts. Upon receipt by any Loan Party or any of its Subsidiaries of any Extraordinary Receipts, theBorrower shall pay, or cause such Loan Party or Subsidiary to pay, to the Administrative Agent, for the ratable benefit of the Lenders,when and as received by such Loan Party or Subsidiary and as a mandatory prepayment of the Obligations, an amount equal to 100% ofsuch Extraordinary Receipts.

(vi) [Reserved].

(vii) Right to Decline Mandatory Prepayments. Any mandatory prepayment (other than pursuant to clause (iii) above) maybe declined by any Lender without prejudice to such Lender’s rights hereunder to accept or decline any future mandatory prepayment,and any such election to decline a prepayment shall not be construed as a waiver of any other requirement (including the requirement torepay all Obligations) hereunder. If a Lender chooses to decline a mandatory prepayment, such Lender shall provide written noticethereof to the Administrative Agent and the Borrower not less than one (1) Business Day prior to the date on which such mandatoryprepayment is due (or within one (1) Business Day of receipt of such prepayment notice), if such prepayment was not provided by theBorrower not less than one (1) Business Day prior to the making of such prepayment (return of such prepayment to accompany any suchnotice), and the Lenders that accept such mandatory prepayment shall share the proceeds thereof on a pro rata basis as determined amongthe Lenders electing to participate in such mandatory prepayment (and if declined by all Lenders, the amount of such mandatoryprepayment shall be retained by the Borrower).

(c) Applicable Premium. With respect to (x) each repayment or prepayment of Loans under Section 2.05(a) and Section 2.05(b)(iii),in each case, prior to the Maturity Date, and (y) any repayment upon acceleration of the Loans pursuant to Article VIII prior to the ScheduledMaturity Date, the Borrower shall be required to pay with respect to the amount of the Loans repaid or prepaid, in each case, concurrently withsuch repayment or prepayment, a premium in an amount equal to 3.00% of the amount of the Loans being repaid or prepaid (the “ApplicablePremium”).

(d) Application of Payments and Prepayments. Subject to Section 2.05(b)(vii) and Section 2.16, each prepayment shall be applied tothe Loans of the Lenders in

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accordance with their respective Applicable Percentages. For the avoidance of doubt, all such payments will reduce the principal amount ofLoans net of any interest, fees, charges, premiums or other amounts due and payable hereunder at the time of such payment.

Section 2.06. Termination or Reduction of Commitments.

(a) Optional. The Borrower may not terminate or reduce the Commitments, other than as a result of a Borrowing made inaccordance with this Agreement.

(b) Mandatory. (i) The Commitments shall be automatically and permanently reduced by an amount equal to the Initial Advanceupon the earlier of (a) the borrowing of the Initial Advance and (b) 12:01 a.m. New York City time on the day immediately succeeding theClosing Date, (ii) the Commitments shall be automatically and permanently further reduced by an amount equal to the Second Advance uponthe earlier of (a) the borrowing of the Second Advance and (b) 12:01 a.m. New York City time on the day immediately succeeding the last dayupon which the Second Advance may be made pursuant to Section 2.01(b), (iii) the Commitments shall be automatically and permanentlyfurther reduced by an amount equal to the Third Advance upon the earlier of (a) the borrowing of the Third Advance and (b) 12:01 a.m. NewYork City time on the day immediately succeeding the last day upon which the Third Advance may be made pursuant to Section 2.01(c) and(iv) the Commitments shall be automatically and permanently further reduced by an amount equal to the Final Advance upon the earlier of (a)the borrowing of the Final Advance and (b) 12:01 a.m. New York City time on the day immediately succeeding the last day upon which theFinal Advance may be made pursuant to Section 2.01(d).

(c) Maturity Date. The aggregate Commitment shall be automatically and permanently reduced to zero on the Maturity Date.

Section 2.07. Repayment of Loans. The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount ofall Loans outstanding on such date, together with all other amounts due under this Agreement or the other Loan Documents, including the ExitFee.

Section 2.08. Interest.

(a) Subject to the provisions of Section 2.08(b), each Loan shall bear interest on the outstanding principal amount thereof from theapplicable borrowing date at a rate per annum equal to the Applicable Rate.

(b) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at statedmaturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to theDefault Rate to the fullest extent permitted by applicable Laws.

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(c) If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due(without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of theRequired Lenders (i) all Obligations consisting of the principal amount of Loans outstanding hereunder and (ii) all overdue amounts other thanin respect of such principal of Loans shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rateto the fullest extent permitted by applicable Laws.

(d) Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principalamount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullestextent permitted by applicable Laws. Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due andpayable upon demand.

(e) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date and at such other times as may bespecified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before andafter the commencement of any proceeding under any Debtor Relief Law.

Section 2.09. Fees.

(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with itsApplicable Percentage a commitment fee in Dollars equal to 5.00% per annum of the actual daily amount of the aggregate unusedCommitments commencing on the Closing Date until such Commitment is terminated pursuant to Section 2.06(b), including at any time duringwhich one or more of the conditions in Article IV is not met, which fee shall be due and payable monthly in arrears on the last Business Day ofeach month; provided that, with respect to an amount of Commitments equal to the Second Tranche, no commitment fee shall be payable if theMaturity Date has occurred prior to the 100 Day Anniversary, but thereafter such commitment fee with respect to such Commitments that hasaccrued since the Closing Date shall be payable on the 100 Day Anniversary, and the commitment fee in respect of the remaining undrawnCommitments shall continue to accrue thereafter and be payable monthly in arrears as set forth in this Section 2.09(a) and on the Maturity Date.

(b) Administrative Agent Fee and Upfront Fees.

(i) The Borrower shall pay to the Administrative Agent for its own account, in Dollars, fees in the amounts and at the timesspecified in the Fee Letter between the Administrative Agent and the Borrower. Such fees shall be fully earned when paid and shall notbe refundable for any reason whatsoever.

(ii) The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its ApplicablePercentage an upfront fee equal to 4.00% of the aggregate principal amount of Commitments equal to

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the Initial Tranche (which may take the form of original issue discount at the election of the Required Lenders), which such fee shall beearned, due and payable in full on the Closing Date. Notwithstanding the foregoing, no applicable original issue discount applied to theprincipal amount of the Loans shall reduce the amount of Obligations below 100% of the original aggregate principal amount of suchLoans.

(iii) If the Maturity Date has not occurred prior to the 100 Day Anniversary, the Borrower shall pay to the AdministrativeAgent for the account of each Lender in accordance with its Applicable Percentage a fee equal to 4.00% of the aggregate principalamount of Commitments equal to the Second Tranche, which such fee shall be earned, due and payable in full on the 100 DayAnniversary.

(c) Exit Fee. Other than with respect to a repayment or prepayment of Loans that is subject to the Applicable Premium, theBorrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage an exit fee in anamount equal to 1.00% of the principal amount of the Loans repaid at or following the Maturity Date or following any acceleration thereof.The exit fee shall be payable on the date of such repayment of the Loans.

Section 2.10. Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate. All computations of fees and interestshall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than ifcomputed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on aLoan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day onwhich it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by the Administrative Agent of an interest rateor fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

Section 2.11. Evidence of Debt. The Loans made by each Lender shall be evidenced by one or more accounts or records maintainedby such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the AdministrativeAgent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrower and theinterest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation ofthe Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and recordsmaintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of theAdministrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent,the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence

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such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date,amount and maturity of its Loans and payments with respect thereto.

Section 2.12. Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrower shall be made free and clear and without condition or deduction for anycounterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall bemade to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’sOffice in Dollars and in immediately available funds not later than 1:00 p.m. on the date specified herein. The Administrative Agent willpromptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds asreceived by wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent after 1:00 p.m. shall be deemedreceived on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by theBorrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extensionof time shall be reflected on computing interest or fees, as the case may be.

(b)

(i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received noticefrom a Lender prior to 11:00 a.m. on the proposed date of any Borrowing that such Lender will not make available to the AdministrativeAgent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available inaccordance with and at the time required by Section 2.02 and may, but in no event shall it be obligated to, in reliance upon suchassumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of theapplicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to theAdministrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for eachday from and including the date such amount is made available to the Borrower to but excluding the date of payment to theAdministrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a ratedetermined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative,processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing and (B) in the case of apayment to be made by the Borrower, the Applicable Rate. If the Borrower and such Lender shall pay such interest to the AdministrativeAgent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interestpaid by

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the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount sopaid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to anyclaim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have receivednotice from the Borrower prior to the time at which any payment is due to the Administrative Agent for the account of the Lendershereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made suchpayment on such date in accordance herewith and may, but in no event shall it be obligated to, in reliance upon such assumption,distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lendersseverally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, in immediatelyavailable funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date ofpayment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent inaccordance with banking industry rules on interbank compensation.

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shallbe conclusive, absent manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to bemade by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by theAdministrative Agent because the conditions to the applicable Borrowings set forth in Article IV are not satisfied or waived in accordance withthe terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, withoutinterest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to make Loans and to make payments pursuant toSection 10.04(c) are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any paymentunder Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date,and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its paymentunder Section 10.04(c).

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular placeor manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place ormanner.

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(f) Insufficient Funds. If at any time insufficient funds are received by and available to the Administrative Agent to pay fully allamounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of fees then due hereunder ofthe Administrative Agent, (ii) second, toward payment of interest and fees then due hereunder, ratably among the other parties entitled theretoin accordance with the amounts of interest and fees then due to such parties and (iii) third, toward payment of principal then due hereunder,ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

Section 2.13. Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise,obtain payment in respect of Obligations due and payable to such Lender hereunder and under the other Loan Documents at such time in excessof its ratable share (according to the proportion of the amount of such Obligations due and payable to such Lender at such time to the aggregateamount of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments onaccount of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all theLenders at such time or Obligations owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at suchtime in excess of its ratable share (according to the proportion of the amount of such Obligations owing (but not due and payable) to suchLender at such time to the aggregate amount of the Obligations owing (but not due and payable) to all Lenders hereunder and under the otherLoan Parties at such time) of payment on account of the Obligations owing (but not due and payable) to all Lenders hereunder and under theother Loan Documents at such time obtained by all of the Lenders at such time then the Lender receiving such greater proportion shall (a)notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans of the other Lenders, or makesuch other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance withthe aggregate amount of Obligations then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case maybe, provided that:

(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, suchparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii) the provisions of this Section shall not be construed to apply to any payment made by or on behalf of the Borrowerpursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of aDefaulting Lender) or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of itsLoans to any assignee or participant, other than an assignment to the Borrower or any Subsidiary or Affiliate thereof (as to which theprovisions of this Section shall apply).

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The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lenderacquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim withrespect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

Section 2.14. Priority and Liens; No Discharge.

(a) Each of the Loan Parties hereby covenants and agrees that upon the entry of an Interim Order (and, when applicable, the FinalOrder) its obligations hereunder and under the other Loan Documents shall be subject to the Carve-Out and: (i) pursuant to section 364(c)(1) ofthe Bankruptcy Code, shall at all times constitute an allowed superpriority administrative expense claim in the Case of such Loan Party(collectively, the “Superpriority Claims”); (ii) pursuant to section 364(c)(2) of the Bankruptcy Code, shall at all times be secured by a valid,binding, continuing, enforceable perfected first priority security interest in and Lien on the Collateral of each Loan Party (A) to the extent suchCollateral is not subject to valid, perfected and non-avoidable Liens as of the Petition Date and (B) excluding claims and causes of action undersections 502(d), 544, 545, 547, 548, 550 and 553 of the Bankruptcy Code (collectively, “Avoidance Actions”) (it being understood thatnotwithstanding such exclusion of Avoidance Actions, upon entry of the Final Order, such security interest and Lien shall attach to anyproceeds of Avoidance Actions), provided that such security interest in and Lien on ABL Postpetition Collateral shall be subject andsubordinate to the Prepetition ABL Adequate Protection Liens; (iii) except as otherwise provided in the immediately following clause (iv),pursuant to section 364(c)(3) of the Bankruptcy Code, shall be secured by a valid, binding, continuing, enforceable perfected second prioritysecurity interest in and Lien on the ABL Facility Priority Collateral, junior only to the security interest and Liens of the ABL Agent and theABL Lenders with respect to such ABL Facility Priority Collateral; and (iv) pursuant to section 364(d)(1) of the Bankruptcy Code, be securedby (A) a valid, binding, continuing, enforceable perfected first priority priming security interest in and Lien on the Term Loan PriorityCollateral of each Loan Party (the “Term Loan Priority Collateral Priming Liens”) to the extent that such Collateral is subject to existingLiens that secure the obligations of the applicable Loan Party under the Prepetition Term Loan Credit Agreement (collectively, the “TermLoan Priority Collateral Primed Liens”) and (B) a valid, binding, continuing, enforceable perfected second priority priming security interestin and Lien on the ABL Facility Priority Collateral of each Loan Party (the “ABL Collateral Priming Liens” and, together with the TermLoan Priority Collateral Priming Liens, the “Priming Liens”) to the extent that such Collateral is subject to existing second priority Liens thatsecure the obligations of the applicable Loan Party under Prepetition Term Loan Credit Agreement (collectively, the “ABL Collateral PrimedLiens” and, together with the Term Loan Priority Collateral Primed Liens, the “Primed Liens”), all of which Primed Liens shall be primed byand made subject and subordinate to the perfected first or second priority Liens, as the case may be, to be granted to the Administrative Agentfor the benefit of the Secured Parties, which Priming Liens in favor of the Administrative Agent for the benefit of the Secured Parties shallalso

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prime any Liens (other than, with respect to the ABL Facility Priority Collateral and the ABL Postpetition Collateral, the Prepetition ABLAdequate Protection Liens) granted after the commencement of the Cases to provide adequate protection Liens in respect of any of the PrimedLiens, subject to the Carve-Out.

(b) (i) Each Loan Party hereby confirms and acknowledges that, pursuant to the Interim Order (and, when entered, the FinalOrder), the Liens in favor of the Administrative Agent on behalf of and for the benefit of the Secured Parties in all of such Loan Party’sCollateral, which includes all of such Loan Party’s Real Property, shall be created and perfected without the recordation or filing in any landrecords or filing offices of any Mortgage, assignment or similar instrument. All of the Liens described in this Section 2.14 shall be effective andperfected upon entry of the Interim Order without the necessity of the execution, recordation of filings by the Debtors of mortgages, securityagreements, control agreements, pledge agreements, financing statements or other similar documents, or the possession or control by theAdministrative Agent of, or over, any Collateral, as set forth in the Interim Order.

(c) (ii) Further to Section 2.14(b)(i) and the Interim Order (and, when entered, the Final Order), subject to Section 2.14(a)above and 2.14(d) below, to secure the full and timely payment and performance of the Obligations, each Loan Party hereby GRANTS,BARGAINS, SELLS, CONVEYS, TRANSFERS, ASSIGNS and SETS OVER to the Administrative Agent for the ratable benefit of theSecured Parties, with power of sale (if applicable), all of the types and items of real and personal property and interests whether now owned byor hereafter acquired by such Loan Party, including such Loan Party’s right, title and interest in and to: (i) Salt Water Disposal Assets; (ii) land;(iii) leases demising land or improvements, including all amendments, supplements, consolidations, extensions, renewals and othermodifications now or hereafter entered into; (iv) any and all buildings, structures, improvements, alterations or appurtenances; (v) all (1)streets, roads, alleys, easements, rights-of-way, licenses, rights of ingress and egress, vehicle parking rights and public places, existing orproposed, abutting, adjacent, used in connection with or pertaining to any land or leased premises of such Loan Party, (2) strips or goresbetween parcels of land and abutting or adjacent properties, (3) options to purchase land or demised premises or any portion thereof or interesttherein, and any greater estate in land, demises premises or improvements, and (4) water and water rights, timber, crops and mineral interestson or pertaining to land owned or leased by such Loan Party; (vi) all fixtures, equipment, systems, machinery, furniture, furnishings,appliances, goods, building and construction materials, supplies, and articles of personal property, of every kind and character, tangible andintangible (including software embedded therein), now owned or hereafter acquired by such Loan Party, including, but not limited to, any andall oil wells, gas wells, injection wells, salt water disposal wells, or other wells, buildings, structures, fuel separators, liquid extraction plants,plant compressors, pumps, pumping units, field gathering systems, gas processing plants and pipeline systems and any related infrastructure toany thereof, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances,tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way,

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easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing),product marketing terminal, storage tanks (including tank bottoms and substances lying below the outlet flange), and pipelines (including linefill), and all renewals and replacements of, substitutions for and additions to the foregoing; (vii) all (A) plans and specifications forimprovements; (B) all commitments, insurance policies (or additional or supplemental coverage related thereto), contracts and agreements forthe design, construction, operation or inspection of the improvements or equipment or the operation thereof; (viii) all intangible property usedby such Loan Party, including, without limitation, all contract rights, guarantees, permits, consents of governmental authorities, licenses,franchises, certificates, development rights, commitments and rights for utilities, and other rights and privileges relating solely to theownership, operation or maintenance of land, leased premises, improvements or equipment, and all of such Loan Party’s right, title and interestin and to all proceeds of the conversion, whether voluntary or involuntary, of any of the above-described property into cash as illiquid claimsincluding, without limitation, all awards, payments or proceeds, including interest thereon, and the right to receive the same, which may bemade as a result of casualty, any exercise of the right of eminent domain or deed in lieu thereof, the alteration of the grade of any street and anyinjury to or decrease in the value thereof, and any rights to a rebate, offset or other assignment, warranty or service under a purchase order,invoice or purchase agreement with any manufacturer or supplier of any portion of the foregoing; (ix) leases, rents, royalties, bonuses, issues,profits, revenues and other benefits of land, demised premises, improvements or equipment; (xi) as-extracted collateral; (xii) engineering,accounting, title, legal, and other technical or business data which are in the possession of such Loan Party or in which such Loan Party canotherwise grant a security interest, including but not limited to proceeds of any sale, lease or other disposition thereof, proceeds of each policyof insurance (or additional or supplemental coverage related thereto); and (xiii) all articles of personal property of every kind and naturewhatsoever owned by such Loan Party, or in which such Loan Party has or shall have an interest, including without limitation, all buildingequipment, materials and supplies and any of the Collateral which may be subject to any security interests, foregoing rights, interests andproperties, and all rights, estates, powers and privileges appurtenant thereto, unto the Administrative Agent, and its successors and assigns, forthe ratable benefit of the Secured Parties, in trust, forever, to secure the Obligations. Each Loan Party hereby agrees to warrant and foreverdefend, all and singular, title to the foregoing property and interests forever against every person whomsoever lawfully claiming, or to claim,the same or any part thereof, subject, however, to Permitted Liens. Notwithstanding the foregoing, excluded from the foregoing grant of Lien isany right, title and interest of any Loan Party in and to any (i) Real Property improved by a Building or Manufactured (Mobile) Home and nosuch property shall be “Collateral” hereunder to the extent and for so long as the Flood Zone Requirements with respect to such property hasnot been satisfied to the satisfaction of each federally regulated Lender and (ii) property and assets described in Section 2.14(d) below.

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(d) (iii) Each Loan Party further agrees that, upon the request of the Administrative Agent, in the exercise of its businessjudgment, such Loan Party shall execute and deliver to the Administrative Agent, as soon as reasonably practicable following such request butin any event within 60 days following such request (or such longer periods as agreed by the Administrative Agent, at the direction of theRequired Lenders (which, for the avoidance of doubt, may be provided via email), in their sole discretion), Mortgages in recordable form withrespect to such Material Real Property owned or leased by such Loan Party and identified by the Administrative Agent on terms reasonablysatisfactory to the Administrative Agent and including the deliverables (as applicable) as necessary to satisfy the Real Estate CollateralRequirement within the time periods specified therein.

(c) Notwithstanding anything to the contrary herein, in no event shall the Collateral include (a) any Equipment (as defined in theUCC) owned by any Debtor on the date hereof or hereafter acquired that is subject to a Permitted Lien if the contract or other agreement inwhich such Lien is granted validly prohibits the creation of any other Lien on such Equipment except to the extent such prohibition isineffective under the UCC or rendered ineffective by the Orders or the Bankruptcy Code; provided that such contractual prohibition existed onthe Closing Date, or, with respect to any Subsidiary acquired after the Closing Date (and so long as such contractual prohibition was notincurred in contemplation of such acquisition), on the date such Subsidiary is so acquired; (b) General Intangibles, Contracts, and InvestmentProperty (each as defined in the UCC) which by their respective express terms prohibit the grant of a security interest, except to the extent suchprohibition is ineffective under the UCC or rendered ineffective by the Orders or the Bankruptcy Code; provided that such contractualprohibition existed on the Closing Date, or, with respect to any Subsidiary acquired after the Closing Date (and so long as such contractualprohibition was not incurred in contemplation of such acquisition), on the date such Subsidiary is so acquired; (c) permits and licenses to theextent the grant of a security interest therein is prohibited under applicable Law or regulation or by their express terms, except to the extentsuch prohibition is ineffective under the UCC or rendered ineffective by the Orders or the Bankruptcy Code; (d) 34% of the Equity Interests ineach direct Subsidiary of any Loan Party that is a “controlled foreign corporation” under the Code; and (e) until such time as the Credit CardControl Agreement is terminated or otherwise no longer in effect, the Credit Card Cash Collateral; provided that the Collateral shall include theBorrower’s interests in the Credit Card Cash Collateral, including any residual interest therein after payment in full of the Borrower’sobligations under the P-Card Agreements.

(e) (d) The relative priorities of the Liens described in this Section 2.14 with respect to the Collateral of the Debtors shall be as setforth in the Interim Order (and, when entered, the Final Order). In the event of any inconsistency between this Section 2.14 and the terms ofthe Interim Order (and, when entered, the Final Order), the terms of the Interim Order (and, when entered, the Final Order) shall govern.

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(f) (e) Each of the Loan Parties agrees that to the extent that its obligations under the Loan Documents have not been satisfied whendue in full in cash, its obligations under the Loan Documents shall not be discharged by the entry of an order confirming a Reorganization Plan(and each of the Loan Parties, pursuant to section 1141(d)(4) of the Bankruptcy Code, hereby waives any such discharge) and the SuperpriorityClaims granted to the Administrative Agent and the Lenders pursuant to the Orders and the Liens granted to the Administrative Agent and theLenders pursuant to the Orders shall not be affected in any manner by the entry of an order confirming a Reorganization Plan.

Section 2.15. Payment of Obligations. Subject to the last paragraph of Section 8.02, upon the maturity (whether by acceleration orotherwise) of any of the Obligations of the Loan Parties under this Agreement or any of the other Loan Documents, the Administrative Agentand the Lenders shall be entitled to immediate payment of such Obligations without further application to or order of the Bankruptcy Court.

Section 2.16. Defaulting Lenders.

(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a DefaultingLender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

(i) Waivers and Amendments. That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consentwith respect to this Agreement shall be restricted as set forth in Section 10.01.

(ii) Reallocation of Payments. Any payment of principal, interest, fees or other amounts received by the AdministrativeAgent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise, andincluding any amounts made available to the Administrative Agent by that Defaulting Lender pursuant to Section 10.08), shall be appliedat such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by thatDefaulting Lender to the Administrative Agent hereunder; second, as the Borrower may request (so long as no Default or Event ofDefault exists), to the funding of any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required bythis Agreement, as determined by the Administrative Agent; third, if so determined by the Administrative Agent and the Borrower, to beheld in a non-interest bearing deposit account and released in order to satisfy potential future obligations of that Defaulting Lender tofund Loans under this Agreement; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court ofcompetent jurisdiction obtained by any Lender against that Defaulting Lender as a result of that Defaulting Lender’s breach of itsobligations under this Agreement; fifth, so long as no Default or Event of Default exists, to the payment of any amounts owing to theBorrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against that Defaulting

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Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and sixth, to that Defaulting Lender or asotherwise as may be required under the Loan Documents in connection with any Lien conferred thereunder or directed by a court ofcompetent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which thatDefaulting Lender has not fully funded its appropriate share and (y) such Loans were made at a time when the applicable conditions setforth in Article IV were satisfied or waived, such payment shall be applied solely to pay the Loans of all Non-Defaulting Lenders on a prorata basis prior to being applied to the payment of any Loans of that Defaulting Lender until such time as all Loans are held by theLenders pro rata in accordance with the Commitments hereunder. Any payments, prepayments or other amounts paid or payable to aDefaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender shall be deemed paid to and redirected by thatDefaulting Lender, and each Lender irrevocably consents hereto.

(b) [Reserved].

(c) Defaulting Lender Cure. If the Borrower and the Administrative Agent, at the direction of the Required Lenders, agree inwriting in their sole discretion that a Defaulting Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the partieshereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extentapplicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent maydetermine to be necessary to cause the Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages,whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to feesaccrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except tothe extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver orrelease of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

Section 2.17.

ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY

Section 3.01. Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

(i) Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Documentshall to the extent

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permitted by applicable Laws be made free and clear of and without reduction or withholding for any Taxes. If, however, applicableLaws require an applicable withholding agent to withhold or deduct any Tax, such Tax shall be withheld or deducted in accordance withsuch Laws as determined by the Borrower or the Administrative Agent, as the case may be, upon the basis of the information anddocumentation to be delivered pursuant to subsection (e) below.

(ii) If any applicable withholding agent shall be required to withhold or deduct any Taxes, including both United Statesfederal backup withholding and withholding Taxes, from any payment, then such withholding agent shall withhold or make suchdeductions as are determined by such withholding agent to be required based upon the information and documentation it has receivedpursuant to subsection (e) below, such withholding agent shall timely pay the full amount withheld or deducted to the relevantGovernmental Authority in accordance with applicable Law, and if such Tax subject to withholding or deduction is an Indemnified Taxor Other Tax, the sum payable by the Borrower shall be increased as necessary so that after any required withholding or the making of allrequired deductions (including deductions applicable to additional sums payable under this Section) the applicable Recipient receives anamount equal to the sum it would have received had no such withholding or deduction been made.

(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of subsection (a) above, the Borrower shall timelypay any Other Taxes to the relevant Governmental Authority in accordance with applicable Law.

(c) Tax Indemnifications.

(i) Without limiting the provisions of subsection (a) or (b) above, the Borrower shall, and does hereby, indemnify eachRecipient and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxesor Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under thisSection) withheld or deducted by the Borrower or the Administrative Agent or paid by the applicable Recipient and any penalties,interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes werecorrectly or legally imposed or asserted by the relevant Governmental Authority. The Borrower shall also, and does hereby, indemnifythe Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which aLender for any reason fails to pay indefeasibly to the Administrative Agent as required by clause (ii) of this subsection. A certificate as tothe amount of any such payment or liability delivered to the Borrower by a Recipient (with a copy to the Administrative Agent), or by theAdministrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

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(ii) Without limiting the provisions of subsection (a) or (b) above, each Lender shall, and does hereby, indemnify theAdministrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, against any and all Taxes and anyand all related losses, claims, liabilities, penalties, interest and expenses (including the fees, charges and disbursements of any counsel forthe Administrative Agent) incurred by or asserted against the Administrative Agent by any Governmental Authority as a result of thefailure by such Lender to deliver, or as a result of the inaccuracy, inadequacy or deficiency of, any documentation required to bedelivered by such Lender to the Administrative Agent pursuant to subsection (e). Each Lender hereby authorizes the AdministrativeAgent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Documentagainst any amount due to the Administrative Agent under this clause (ii).

(d) Evidence of Payments. Upon request by the Borrower or the Administrative Agent, as the case may be, after any payment ofTaxes by the Borrower or the Administrative Agent to a Governmental Authority as provided in this Section 3.01, the Borrower shall deliver tothe Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the case may be, the original or a certified copy of areceipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment orother evidence of such payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.

(e) Status of Lenders; Tax Documentation.

(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made underany Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by theBorrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower orthe Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition,any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed byapplicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the AdministrativeAgent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstandinganything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other thansuch documentation set forth in Section 3.01(e)(ii)(A), (ii)(B) or (ii)(D) below) shall not be required if in the Lender’s reasonablejudgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or wouldmaterially prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing,

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(A) any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to thedate on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable requestof the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S.federal backup withholding;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and theAdministrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which suchForeign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of theBorrower or the Administrative Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the UnitedStates is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuantto the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any LoanDocument, IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federalwithholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed copies of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest underSection 881(c) of the Code, (x) a certificate substantially in the form of Exhibit I-1 to the effect that such Foreign Lenderis not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrowerwithin the meaning of Section 881(c) (3)(B) of the Code, or a “CFC” described in Section 881(c)(3)(C) of the Code (a“U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E (asapplicable); or

(4) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY,accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable), a U.S. TaxCompliance Certificate substantially in the form of Exhibit I-2 or Exhibit I-3, IRS Form W-9, and/or other certificationdocuments from each

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beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirectpartners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S.Tax Compliance Certificate substantially in the form of Exhibit I-4 on behalf of each such direct or indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and theAdministrative Agent (in such number as shall be requested by the recipient) on or prior to the date on which such ForeignLender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower orthe Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming an exemptionfrom or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may beprescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deductionrequired to be made; and

(D) if a payment made to a Recipient under any Loan Document would be subject to U.S. federal withholding Taximposed by FATCA if such Recipient were to fail to comply with the applicable reporting requirements of FATCA (includingthose contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Recipient shall deliver to the Borrower and theAdministrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower orthe Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i)of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may benecessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine thatsuch Recipient has complied with such Recipient’s obligations under FATCA or to determine the amount to deduct and withholdfrom such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after thedate of this Agreement.

(iii) Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate inany respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legalinability to do so.

(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time shall the Administrative Agent have anyobligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes

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withheld or deducted from funds paid for the account of such Lender, as the case may be. If the Administrative Agent or any Lenderdetermines, in its sole discretion, that it has received a refund of any Taxes as to which it has been indemnified by the Borrower or with respectto which the Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (butonly to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes orOther Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by the Administrative Agent or suchLender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to suchrefund), provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to theBorrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or suchLender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.Notwithstanding anything to the contrary in this paragraph (f), in no event will the Lender or Administrative Agent be required to pay anyamount to the Administrative Agent or Borrower pursuant to this paragraph (f) the payment of which would place the indemnified party in aless favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to suchrefund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Taxhad never been paid. This subsection shall not be construed to require the Administrative Agent or any Lender to make available its Tax returns(or any other information relating to its Taxes that it deems confidential) to the Borrower or any other Person.

(g) Survival. Each party’s obligations under this Section 3.01 shall survive the resignation or replacement of the AdministrativeAgent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction ordischarge of all other Obligations.

Section 3.02. [Reserved].

Section 3.03. [Reserved].

Section 3.04. Increased Costs.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similarrequirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender;

(ii) subject any Recipient to any tax of any kind whatsoever with respect to this Agreement or change the basis of taxation ofpayments to such

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Recipient in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 3.01 and the imposition of, or any changein the rate of, any Taxes described in clauses (a) or (b) of the definition of Excluded Tax payable by such Recipient); or

(iii) impose on any Lender any other condition, cost or expense affecting this Agreement or the Loans made by such Lenderor participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making any Loan or of maintaining its obligation to makeany such Loan, or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any otheramount) then, upon request of such Lender, the Borrower will pay to such Lender such additional amount or amounts as will compensate suchLender for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any Lending Office of suchLender or such Lender’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rateof return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, theCommitments of such Lender or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding companycould have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holdingcompany with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts aswill compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate suchLender or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall beconclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days afterreceipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions ofthis Section shall not constitute a waiver of such Lender’s right to demand such compensation, provided that the Borrower shall not be requiredto compensate a Lender pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than180 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and ofsuch Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions isretroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).

Section 3.05. [Reserved].

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Section 3.06. Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Borrower is requiredto pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, then suchLender shall (at the request of the Borrower) use reasonable efforts to designate a different Lending Office for funding or booking its Loanshereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender,such designation or assignment would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future,and in each case, would not subject such Lender, as the case may be, to any unreimbursed cost or expense and would not otherwise bedisadvantageous to such Lender, as the case may be. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by anyLender in connection with any such designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay anyadditional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, and in each case suchLender has declined or is unable to designate a different lending office in accordance with Section 3.06(a), then the Borrower may, at its soleexpense and effort, upon notice to such Lender and the Administrative Agent, replace such Lender in accordance with Section 10.13.

Section 3.07. Survival. All of the Borrower’s obligations under this Article III shall survive termination of the AggregateCommitments, repayment of all other Obligations hereunder, and resignation of the Administrative Agent.

ARTICLE IV CONDITIONS PRECEDENT

Section 4.01. Conditions to the Closing Date. The effectiveness of this Agreement on the Closing Date is subject to the satisfaction ofthe following conditions precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be originals or telecopies (followed promptly byoriginals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date(or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory tothe Administrative Agent and each of the Lenders:

(i) executed counterparts of this Agreement, sufficient in number for distribution to the Administrative Agent, each Lender,the Borrower and each Guarantor;

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(ii) resolutions, written consents, incumbency certificates and/or other organizational documents certified by a ResponsibleOfficer of each Loan Party in a form substantially consistent with those delivered in connection with the Prepetition Term Loan CreditAgreement;

(iii) good standing certificates (or similar document, as applicable in the applicable jurisdiction) for each Loan Party;

(iv) a certificate signed by a Responsible Officer of the Borrower certifying (i) that the conditions specified in Sections4.02(b), (c), (h) and (i) have been satisfied and (ii) that there has been no event or circumstance since June 30, 2016 that has had or couldbe reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect other than events or circumstances thataffect the oil field service industry generally;

(v) (A) the DIP Budget and (B) the initial Rolling Budget;

(vi) a Note executed by the Borrower in favor of each Lender requesting a Note;

(vii) the Fee Letter executed by the parties thereto;

(viii) executed counterparts of the Security Agreement, in form and substance satisfactory to the Lenders, duly executed bythe parties thereto, together with:

(A) certificates, if any, representing the Pledged Equity referred to therein accompanied by undated stock powersexecuted in blank and instruments evidencing the Pledged Debt indorsed in blank; provided that the foregoing shall be deemedto be satisfied to the extent such certificates or instruments in existence on the Closing Date have been delivered to the Pre-Petition Term Loan Administrative Agent, and

(B) Uniform Commercial Code financing statements in form appropriate for filing in all jurisdictions that theAdministrative Agent may deem necessary or desirable in order to perfect the Liens created under the Security Agreement,covering the Collateral described in the Security Agreement.

(ix) unless the Administrative Agent shall have otherwise agreed to that the following requirements may be satisfied afterthe Closing Date pursuant to arrangements to be agreed, evidence that all insurance required to be maintained pursuant to the LoanDocuments has been obtained and is in effect, together with the certificates of insurance, naming the Administrative Agent, on behalf ofthe Lenders, as an additional insured or loss payee, as the case may be, under all

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insurance policies maintained with respect to the assets and properties of the Loan Parties that constitute Collateral.

(b) The Administrative Agent shall have received not less than three Business Days prior to the Closing Date all documentation andother information about the Borrower and the Guarantors required under applicable “know your customer” and anti-money laundering rulesand regulations, including the USA PATRIOT Act that has been requested by the Administrative Agent in writing not less than five BusinessDays prior to the Closing Date.

( c ) The Restructuring Support Agreement shall become effective and binding pursuant to Section 12 thereof, and shall not havebeen terminated.

(d) The Acceptable Plan of Reorganization and the Acceptable Disclosure Statement shall have been filed in each of the Cases onthe Petition Date.

(e) The Cases of any of the Debtors shall have not been dismissed or converted to cases under Chapter 7 of the Bankruptcy Code.

(f) No trustee under Chapter 11 of the Bankruptcy Code or examiner with enlarged powers beyond those set forth in sections1106(a)(3) and (4) of the Bankruptcy Code shall have been appointed in any of the Cases of the Debtors.

(g) All “first day” orders and all related pleadings intended to be entered on or prior to the date of entry of the Interim Order shallhave been entered by the Bankruptcy Court, shall not have been modified, stayed or vacated (except with the consent of the Required Lenders,and shall be reasonably satisfactory in form and substance to the Required Lenders, [it being understood that drafts approved by counsel to theRequired Lenders prior to the Petition Date are reasonably satisfactory.]

(h) Within four business days after the Petition Date (or such later date as the Required Lenders may agree in their sole discretion),the Bankruptcy Court shall have entered the Interim Order.

(i) The Borrower shall have made no payments after the Petition Date on account of any Indebtedness arising prior to the PetitionDate unless such payment is made (i) with the consent of the Required Lenders in their sole discretion or (ii) pursuant to “first day” ordersreasonably acceptable to the Required Lenders.

(j) The entry into this Agreement and the other Loan Documents shall not violate any requirement of law and shall not betemporarily, preliminarily or permanently enjoined.

(k) The unrestricted cash balances and Cash Equivalents of the Borrower and its consolidated Subsidiaries shall not be less than$2,500,000.

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(l) The Borrower shall have satisfied all requirements set forth in Section 4.02 with respect to the Initial Advance and shall haveborrowed the Initial Advance substantially simultaneously with the satisfaction of the conditions set forth in this Section 4.01.

Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with theconditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved oraccepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable orsatisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Datespecifying its objection thereto.

Section 4.02. Conditions to Borrowing Any Advance. The obligation of each Lender to fund any Advance hereunder is subject tosatisfaction of the following conditions precedent:

(a) The Closing Date shall have occurred.

(b) The representations and warranties of the Borrower and each other Loan Party contained in Article V or any other LoanDocument, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correctin all material respects (without duplication of any materiality qualifier contained therein) on and as of the date of such Advance, except to theextent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlierdate, and except that for purposes of this Section 4.02, the representations and warranties contained in (x) Sections 5.05(a) and (b) shall bedeemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b), respectively, and (y) Section 5.05(c) with respectto Rolling Budgets shall be deemed to refer to the most recent Rolling Budget furnished pursuant to Section 6.01(g).

(c) No Default shall exist, or would result from the Borrowing of such Advance or from the application of the proceeds thereof.

(d) The Administrative Agent shall have received a Loan Notice with respect to such Borrowing in accordance with therequirements hereof.

(e) All fees required to be paid to the Administrative Agent and the Lenders on or before the date of such Advance shall have beenpaid.

(f) The Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent and the Lenders(directly to such counsel if requested by the Administrative Agent or the Lenders, as applicable) to the extent invoiced prior to or on the date ofsuch Advance, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees,charges and disbursements incurred or to be incurred by it through such Advance (provided that such

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estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent and the Lenders, asapplicable).

(g) (i) The making of such Advance shall not violate any requirement of law and shall not be enjoined, temporarily, preliminarily orpermanently and (ii) no law or regulation shall be applicable in the judgment of the Required Lenders that imposes materially adverseconditions upon the Loans or the transactions contemplated by this Agreement.

(h) There shall exist no unstayed action, suit, investigation, litigation or proceeding pending or (to the knowledge of the LoanParties) threatened in any court or before any arbitrator or governmental instrumentality (other than the Cases) that could reasonably beexpected to have a Material Adverse Effect.

(i) All consents, licenses, approvals, waivers, acknowledgements and other agreements required in connection with the execution,delivery and performance by such Loan Party, and the validity against such Loan Party, of the Loan Documents to which it is a party shall bein full force and effect (without the imposition of any adverse conditions that are not reasonably acceptable to the Required Lenders).

(j) The Interim Order shall be in full force and effect, shall not have been reversed, vacated or stayed, and shall not have beenamended, supplemented or otherwise modified (other than pursuant to the Final Order) without the prior written consent of Required Lendersand, solely with respect to amendments or modifications adversely affecting its rights granted under the Interim Order, the AdministrativeAgent, in their sole discretion.

(k) Other than with respect to the making of the Initial Advance, the Bankruptcy Court shall have entered the Final Order and suchFinal Order shall not have been reversed, vacated or stayed, and shall not have been amended, supplemented or otherwise modified without theprior written consent of Required Lenders and, solely with respect to amendments or modifications adversely affecting its rights granted underthe Final Order, the Administrative Agent, in their sole discretion.

(l) Other than with respect to the making of the Initial Advance, the most recent Rolling Budget delivered hereunder projects theunrestricted cash and Cash Equivalents of the Borrower and its consolidated Subsidiaries to be below $40,000,000 on the proposed date ofBorrowing set forth in the applicable Loan Notice.

Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with theconditions specified in this Section 4.02, each Lender that has signed this Agreement shall be deemed to have consented to, approved oraccepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable orsatisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the applicable Advancespecifying its objection thereto.

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ARTICLE V REPRESENTATIONS AND WARRANTIES

Each Loan Party represents and warrants to the Administrative Agent and the Lenders that:

Section 5.01. Existence, Qualification and Power. Each Loan Party and each of its Subsidiaries (a) is duly organized or formed,validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) subject to entryof the Orders and subject to any restrictions arising on account of any Loan Party’s status as a “debtor” under the Bankruptcy Code, has allrequisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets andcarry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party and (c) is dulyqualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation ofproperties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to theextent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

Section 5.02. Authorization; No Contravention. Subject to the entry of the Orders and subject to the terms thereof, the execution,delivery and performance by each Loan Party of each Loan Document to which such Person is or is to be a party have been duly authorized byall necessary corporate or other organizational action, and do not and will not contravene the terms of any of such Person’s OrganizationDocuments; conflict with or result in any breach or contravention of, or require any payment to be made under, any Contractual Obligation towhich such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries, except for conflicts, breachesor contraventions that could not reasonably be expected to result in a Material Adverse Effect; violate any Law or any order, injunction, writ ordecree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or result in the creation orimposition of any Lien on any property of the Borrower or any Subsidiary except Liens created under the Loan Documents.

Section 5.03. Governmental Authorization; Other Consents. Subject to the entry of the Orders and subject to the terms thereof, noapproval, consent, exemption, authorization or other action by, or notice to, or filing with, any Governmental Authority or any other Person isnecessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreementor any other Loan Document, the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents, the perfection orcontinuance of the Liens created under the Collateral Documents (including the priority thereof as set forth in Section 2.14) or the exercise bythe Administrative Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to theCollateral Documents, except for the authorizations, approvals, actions, notices and filings which

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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 anyauthorization, 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.

Section 5.04. Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been,duly executed and delivered by each Loan Party that is party thereto. Subject to the entry of the Orders and subject to the terms thereof, thisAgreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such LoanParty, enforceable against each Loan Party that is party thereto in accordance with its terms.

Section 5.05. Financial Statements; No Material Adverse Effect.

(a)

(i) The audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year ended December 31,2015, and each audited balance sheet of the Borrower and its Subsidiaries subsequently delivered under Section 6.01(a), and the relatedconsolidated statements of operations, stockholders’ equity, and cash flows for such fiscal year, were prepared in accordance with GAAPconsistently applied throughout the period covered thereby, except as otherwise expressly noted therein; fairly present in all materialrespects the financial condition of the Borrower and its Subsidiaries as of the date thereof and their results of operations and cash flowsfor the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwiseexpressly noted therein; and show or describe all material indebtedness and other liabilities, direct or contingent, of the Borrower and itsSubsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

(ii) The consolidated balance sheet of the Borrower and its Subsidiaries for the most recent fiscal quarter ended, and therelated consolidated statements of operations, changes in stockholders’ equity, and cash flows for such fiscal quarter, fairly present in allmaterial respects the financial position, results of operations cash flows of the Borrower and its Subsidiaries in accordance with GAAP,subject only to normal year-end audit adjustments and the absence of footnotes.

(b) Since June 30, 2016, there has been no event or circumstance that, either individually or in the aggregate, has had or couldreasonably be expected to have a Material Adverse Effect other than those affecting the oil field service industry generally.

(c) The DIP Budget, each Rolling Budget, the consolidated forecasted balance sheet, statements of income and cash flows of theBorrower and its Subsidiaries, in each

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case, delivered pursuant to Section 4.01 or 6.01, as applicable, were prepared in good faith on the basis of the assumptions stated therein, whichassumptions were fair in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of delivery, theBorrower’s best estimate of its future financial condition and performance, recognizing that there are industry-wide risks normally associatedwith the types of business conducted by the Borrower and its Subsidiaries and that the Borrower does not warrant that such forecasts andestimates will ultimately prove to have been accurate.

Section 5.06. Litigation. Except for the Cases, there are no actions, suits, proceedings, claims or disputes pending or, to theknowledge of the Borrower, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or againstthe Borrower or any of its Subsidiaries or against any of their properties or revenues that purport to affect or pertain to this Agreement, anyother Loan Document or, either individually or in the aggregate, if determined adversely, could reasonably be expected to have a MaterialAdverse Effect or is not subject to the automatic stay as a result of the Case.

Section 5.07. No Default. Neither any Loan Party nor any Subsidiary thereof is in default under or with respect to, or a party to, anyContractual Obligation (other than such violations arising as a result of the commencement of the Cases and except as otherwise excused bythe Bankruptcy Court) that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No Defaulthas occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other LoanDocument.

Section 5.08. Ownership of Property; Liens; Investments. Other than as a result of the Case, Loan Party and each of its Subsidiarieshas good title to, or valid leasehold interests in, all of their respective property necessary or used in the ordinary conduct of its business, exceptfor such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. No suchproperty is subject to a Lien, other than Permitted Liens. As of the Closing Date, to the Borrower’s knowledge Schedule 5.08 lists all MaterialReal Property.

Section 5.09. Environmental Compliance.

(a) The Loan Parties and their respective Subsidiaries conduct in the ordinary course of business a review of the effect of existingEnvironmental Laws and claims alleging potential Environmental Liability on their respective businesses, operations and properties, and as aresult thereof the Borrower has reasonably concluded that such Environmental Laws and Environmental Liabilities could not, individually or inthe aggregate, reasonably be expected to have a Material Adverse Effect.

(b) None of the properties currently or formerly owned, leased or operated by any Loan Party or any of its Subsidiaries is listed orproposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list or is adjacent to any such

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property. Except as in accordance in all material respects with the requirements of all Environmental Laws: (i) there are no and never have beenany underground or above-ground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which HazardousMaterials are being or have been treated, stored or disposed on any property currently owned, leased or operated by any Loan Party or any ofits Subsidiaries or, to the best of the knowledge of the Loan Parties, on any property formerly owned, leased or operated by any Loan Party orany of its Subsidiaries and (ii) Hazardous Materials have not been released, discharged or disposed of (x) on, at, under, to, from, or in anyproperty currently or formerly owned, leased or operated by any Loan Party or any of its Subsidiaries or (y) by any Loan Party or any of theirrespective Subsidiaries at any other property, facility or location. Except as could not, individually or in the aggregate, reasonably be expectedto have a Material Adverse Effect, there is no asbestos or asbestos-containing material on any property currently owned, leased or operated byany Loan Party or any of its Subsidiaries.

(c) Neither any Loan Party nor any of its Subsidiaries is undertaking, and has not completed, either individually or together withother potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release,discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any GovernmentalAuthority or the requirements of any Environmental Law, except for any investigations, assessments or remedial or response actions notreasonably expected to result in a material Environmental Liability. All Hazardous Materials generated, used, treated, handled or stored at, ortransported to or from, any property currently or formerly owned, leased or operated by any Loan Party or any of its Subsidiaries have beendisposed of in accordance with the requirements of all Environmental Laws in all material respects and in a manner not reasonably expected toresult in a material Environmental Liability.

(d) The Loan Parties and each of their respective Subsidiaries have obtained all Environmental Permits necessary for the ownershipand operation of their properties and assets and the conduct of their business except where the failure to do so could not, either individually orin the aggregate, reasonably be expected to result a material Environmental Liability. Except where the failure to do so could not, eitherindividually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the Loan Parties and their respective Subsidiarieshave been and are in compliance with all Environmental Laws and the terms and conditions of applicable Environmental Permits. There are nopending or, to the best knowledge of the Borrower, threatened, claims against any Loan Party or any of its Subsidiaries under anyEnvironmental Laws and neither the Loan Parties nor any of their respective Subsidiaries has received any written notice of alleged non-compliance with applicable Environmental Laws or Environmental Permits which could, in each case, either individually or in the aggregate,reasonably be expected to result in a material Environmental Liability.

Section 5.10. Insurance. The properties of the Borrower and its Subsidiaries are insured with financially sound and reputableinsurance companies not Affiliates of the

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Borrower, in such amounts (after giving effect to any self-insurance compatible with the following standards), with such deductibles andcovering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where theBorrower or the applicable Subsidiary operates.

Section 5.11. Taxes. The Borrower and its Subsidiaries have filed all federal, state and other material Tax returns and reports requiredto be filed, and have paid all federal, state and other material Taxes, assessments, fees and other governmental charges levied or imposed uponthem or their properties, income or assets otherwise due and payable, except those (x) that are being contested in good faith by appropriateproceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP or (y) that need not be paidpursuant to an order of the Bankruptcy Court or pursuant to the Bankruptcy Code. There is no proposed Tax assessment against the Borroweror any Subsidiary that would, if made, have a Material Adverse Effect. Neither any Loan Party nor any Subsidiary thereof is party to any Taxsharing agreement

Section 5.12. ERISA Compliance.

(a) Except to the extent excused by the Bankruptcy Code or as a result of the filing of the Cases, the Borrower, its Subsidiaries andeach ERISA Affiliate have maintained each Plan (other than a Multiemployer Plan) in compliance in all material respects with the applicableprovisions of ERISA, the Code and other federal or state laws.

(b) There are no pending or, to the best knowledge of the Borrower, threatened claims, actions or lawsuits, or action by anyGovernmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been noprohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably beexpected to result in a Material Adverse Effect.

(c) Other than as a result of the Cases, except as could not, either individually or in the aggregate, reasonably be expected to cause aMaterial Adverse Effect: (i) no ERISA Event has occurred, and neither the Borrower nor any ERISA Affiliate is aware of any fact, event orcircumstance that could reasonably be expected to constitute or result in an ERISA Event with respect to any Pension Plan; (ii) the Borrowerand each ERISA Affiliate have met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and nowaiver of the minimum funding standards under the Pension Funding Rules has been applied for or obtained; (iii) as of the most recentvaluation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is 60% or higherand neither the Borrower nor any ERISA Affiliate knows of any facts or circumstances that could reasonably be expected to cause the fundingtarget attainment percentage for any such plan to drop below 60% as of the most recent valuation date; (iv) neither the Borrower nor anyERISA Affiliate has incurred any liability to the PBGC other than for the payment of premiums, and there are

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no premium payments which have become due that are unpaid; (v) neither the Borrower nor any ERISA Affiliate has engaged in a transactionthat could be subject to Section 4069 or Section 4212(c) of ERISA; and (vi) no Pension Plan has been terminated by the plan administratorthereof nor by the PBGC, and no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to instituteproceedings under Title IV of ERISA to terminate any Pension Plan.

Section 5.13. Subsidiaries; Equity Interests; Loan Parties. No Loan Party has any Subsidiaries other than those specifically disclosedin Part (a) of Schedule 5.13, and all of the outstanding Equity Interests in such Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.13 free and clear of all Liens except PermittedLiens. No Loan Party has any equity investments in any other corporation or entity other than those specifically disclosed in Part (b) ofSchedule 5.13. Set forth on Part (c) of Schedule 5.13 is a complete and accurate list of all Loan Parties, showing (as to each Loan Party) thejurisdiction of its incorporation, the address of its principal place of business and its U.S. taxpayer identification number or, in the case of anynon-U.S. Loan Party that does not have a U.S. taxpayer identification number, its unique identification number issued to it by the jurisdiction ofits incorporation.

Section 5.14. Margin Regulations; Investment Company Act.

(a) The Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasingor carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing orcarrying margin stock. Following the application of the proceeds of each Borrowing, not more than 25% of the value of the assets (either of theBorrower only or of the Borrower and its Subsidiaries on a consolidated basis) subject to the provisions of Section 7.01 or 7.05 or subject toany restriction contained in any agreement or instrument between the Borrower and any Lender or any Affiliate of any Lender relating toIndebtedness and within the scope of Section 8.01(e) will be margin stock.

(b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or is required to be registered as an“investment company” under the Investment Company Act of 1940.

Section 5.15. Disclosure. The Borrower has disclosed to the Administrative Agent and the Lenders all agreements, instruments andcorporate or other restrictions to which it or any of its Subsidiaries or any other Loan Party is subject, and all other matters known to it, that,individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No report, financial statement, certificateor other information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactionscontemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case asmodified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material factnecessary to make the

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statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projectedinformation, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonableat the time, recognizing that there are industry-wide risks normally associated with the types of business conducted by the Borrower and itsSubsidiaries and that the Borrower does not warrant that such projections and estimates will ultimately prove to have been accurate.

Section 5.16. Compliance with Laws. Each Loan Party and each Subsidiary thereof is in compliance in all material respects with therequirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a)such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or(b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

Section 5.17. Intellectual Property; Licenses, Etc.

(a) The Borrower and each of its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names,copyrights, patents, patent rights, franchises, Licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonablynecessary for the operation of their respective businesses, without conflict with the rights of any other Person. To the best knowledge of theBorrower, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or nowcontemplated to be employed, by the Borrower or any of its Subsidiaries infringes upon any rights held by any other Person. No claim orlitigation regarding any of the foregoing is pending or, to the best knowledge of the Borrower, threatened, which, either individually or in theaggregate, could reasonably be expected to have a Material Adverse Effect.

(b) To the knowledge of the Borrower and each of its Subsidiaries, on and as of the date hereof, there is no material violation byany Person of any right of the Borrower or any of its Subsidiaries with respect to any IP Rights included in the Collateral, pledged by it underthe name of the applicable Loan Party.

Section 5.18. [Reserved.]

Section 5.19. Casualty, Etc. Neither the businesses nor the properties of any Loan Party or any of its Subsidiaries are affected by anyfire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy orother casualty (whether or not covered by insurance) that, either individually or in the aggregate, could reasonably be expected to have aMaterial Adverse Effect.

Section 5.20. Labor Matters. There are no collective bargaining agreements or Multiemployer Plans covering the employees of theBorrower or any of its Subsidiaries

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and neither the Borrower nor any Subsidiary has suffered any strikes, walkouts, work stoppages or other material labor difficulty within the lastfive years.

Section 5.21. Collateral Documents. Subject to, and upon the entry of, the Orders, the Orders and the provisions of the CollateralDocuments are or will be effective to create in favor of the Administrative Agent for the benefit of the Secured Parties a legal, valid andenforceable Lien with the priorities set forth in Section 2.14 on all right, title and interest of the respective Loan Parties in the Collateraldescribed therein. Except for filings completed as contemplated hereby and by the Collateral Documents, no filing or other action will benecessary to perfect or protect such Liens.

Section 5.22. Sanctions and Anti-Corruption Concerns. No Loan Party, nor any Subsidiary, nor, to the knowledge of the Loan Partiesand their Subsidiaries, any director, officer, employee, agent, affiliate or representative thereof, is a Person that is, or is owned or controlled byone or more Persons that are, (a) currently the subject or target of any Sanctions or (b) located, organized or resident in a DesignatedJurisdiction. The Loan Parties and their Subsidiaries are in compliance in all material respects with applicable Sanctions and with the ForeignCorrupt Practices Act of 1977, as amended, and all other applicable anti-corruption laws (“Anti-Corruption Laws”).

ARTICLE VI AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation hereunder shall remain unpaid orunsatisfied, the Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause eachSubsidiary to:

Section 6.01. Financial Statements. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to theAdministrative Agent and the Required Lenders:

(a) as soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower (or, if earlier, 15 days afterthe date required to be filed with the SEC (without giving effect to any extension permitted by the SEC)) (commencing with the fiscal yearending December 31, 2016), a consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year, and the relatedconsolidated statements of income or operations, changes in stockholders’ equity, and cash flows for such fiscal year, setting forth in each casein comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited andaccompanied by a report and opinion of an independent certified public accountant of nationally recognized standing, which report and opinionshall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualificationor exception or any qualification or exception as to the scope of such audit (except for a qualification or exception in respect of the financialcondition of the Borrower and its Subsidiaries);

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(b) as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year ofthe Borrower (or, if earlier, five days after the date required to be filed with the SEC (without giving effect to any extension permitted by theSEC)) (commencing with the fiscal quarter ending September 30, 2016), (A) a consolidated balance sheet of the Borrower and its Subsidiariesas at the end of such fiscal quarter, and the related consolidated statements of income or operations, changes in stockholders’ equity, and cashflows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form thefigures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all inreasonable detail, certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower as fairly presenting inall material respects the financial condition, results of operations and cash flows of the Borrower and its Subsidiaries in accordance withGAAP, subject only to normal year-end audit adjustments and the absence of footnotes and (B) desktop appraisals with respect to the Collateralas of the last day of each fiscal quarter by an appraiser reasonably acceptable to the Required Lenders and the Administrative Agent;

(c) as soon as available, but in any event within 30 days after the end of each month, a consolidated balance sheet of the Borrowerand its Subsidiaries as at the end of such month, and the related consolidated statements of operations, changes in stockholders’ equity, andcash flows for such month and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form thefigures for the corresponding month of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonabledetail, certified by the chief executive officer, chief financial officer, treasurer or controller of the Borrower as fairly presenting in all materialrespects the financial condition, results of operations, and cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subjectonly to normal year-end audit adjustments and the absence of footnotes;

(d) as soon as available, but in any event not later than 45 days after the end of each fiscal year of the Borrower, a financial forecastof the Borrower and its Subsidiaries on a consolidated basis prepared by management of the Borrower, in form satisfactory to theAdministrative Agent and the Required Lenders, including consolidated balance sheets and statements of income or operations and cash flowsof the Borrower and its Subsidiaries on a quarterly basis for the immediately following fiscal year (including the fiscal year in which theMaturity Date occurs);

(e) [reserved];

(f) as soon as available, but in any event no later than 5:00 p.m. (New York City time) on [October 31, 2016] and the first BusinessDay of each week thereafter, a report of the unrestricted cash and Cash Equivalents of the Borrower and its consolidated Subsidiaries as of theclose of the last Business Day of the preceding week;

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(g) as soon as available, but in any event no later than 5:00 p.m. (New York City time) on [November 4, 2016] and the lastBusiness Day of the first week of each month thereafter, a Rolling Budget; and

(h) as soon as available, but in any event no later than 5:00 p.m. (New York City time) on [November 4, 2016] and each TestingDate thereafter, a variance report setting forth (1) actual cash receipts and disbursements (excluding professional fees and expenses) made bythe Borrower and its Subsidiaries for the applicable Testing Period ending on the last Business Day of the prior week, (2) variances, on a line-item basis, of the receipts and disbursements of the Borrower and the Subsidiaries for such Testing Period against the line-item receipts anddisbursements (other than in respect of professional fees and expenses) set forth for such period in an appendix to the most recent RollingBudget on a weekly basis and (3) an explanation, in reasonable detail, for any material variance, and a certification of a Responsible Officer ofthe Borrower of compliance with Section 7.11; and as used herein “Testing Period” means (i) in respect of the first Testing Date covered inthe most recent Rolling Budget, the one-week period ending on the last Business Day of the week prior to the week of such Testing Date, (ii)in respect of the second Testing Date covered in the most recent Rolling Budget, the two-week period ending on the last Business Day of theweek prior to the week of such Testing Date, (iii) in respect of the third Testing Date covered in the most recent Rolling Budget, the three-weekperiod ending on the last Business Day of the week prior to the week of such Testing Date and (iv) in respect of any subsequent Testing Datecovered in the most recent Rolling Budget, the four-week period ending on the last Business Day of the week prior to the week of such TestingDate.

As to any information contained in materials furnished pursuant to Section 6.02(d), the Borrower shall not be separately required tofurnish such information under Section 6.01(a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower tofurnish the information and materials described in Sections 6.01(a) and (b) above at the times specified therein.

Section 6.02. Certificates; Other Information. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory tothe Administrative Agent and the Required Lenders:

(a) concurrently with the delivery of the financial statements referred to in Section 6.01(a), a certificate of its independent certifiedpublic accountants certifying such financial statements and stating that in making the examination necessary therefor no knowledge wasobtained of any Default under the financial covenants set forth herein or, if any such Default shall exist, stating the nature and status of suchevent;

(b) concurrently with the delivery of the financial statements referred to in Sections 6.01(a), (b) and (c) a duly completedCompliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller of the Borrower (which deliverymay, unless the Administrative Agent, or a Lender requests executed originals,

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be by electronic communication including fax or email and shall be deemed to be an original authentic counterpart thereof for all purposes);

(c) promptly after any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management lettersor recommendations submitted to the Board (or the audit committee of the Board) of any Loan Party by independent accountants in connectionwith the accounts or books of any Loan Party or any of its Subsidiaries, or any audit of any of them;

(d) promptly after the same are available, copies of each annual report, proxy or financial statement or other report orcommunication sent to the stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registrationstatements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934,or with any national securities exchange, and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

(e) promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any LoanParty or of any of its Subsidiaries pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to befurnished to the Lenders pursuant to Section 6.01 or any other clause of this Section 6.02;

(f) as soon as available, but in any event within 30 days after the end of each fiscal year of the Borrower, a report summarizing theinsurance coverage (specifying type, amount and carrier) in effect for each Loan Party and its Subsidiaries and containing such additionalinformation as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably specify;

(g) promptly, and in any event within five Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copiesof each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning anyinvestigation or possible investigation or other inquiry by such agency regarding financial or other operational results of any Loan Party or anySubsidiary thereof;

(h) not later than five Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of all material notices,requests and other documents (including amendments, waivers and other modifications) received under or pursuant to any instrument,indenture, loan or credit or similar agreement and, from time to time upon request by the Administrative Agent, or any Lender through theAdministrative Agent, such information and reports regarding such instruments, indentures and loan and credit and similar agreements as theAdministrative Agent, or any Lender through the Administrative Agent, may reasonably request;

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(i) promptly after the assertion or occurrence thereof, notice of (x) any action or proceeding against any Loan Party or any of itsSubsidiaries related to any Environmental Law or Environmental Permit or (y) noncompliance by any Loan Party or any of its Subsidiarieswith any Environmental Law or Environmental Permit, in each case that could reasonably be expected to have a Material Adverse Effect;

(j) (i) as soon as reasonably practicable in advance of filing with the Bankruptcy Court or delivering to any statutory committeeappointed in the Cases or the U.S. Trustee, as the case may be, the Final Order and all other proposed orders and pleadings related to oraffecting the Loans, the Prepetition Term Loans, the Prepetition Term Loan Credit Agreement Loan Documents and the Loan Documents, anyother financing or use of Cash Collateral, any sale or other disposition of Collateral outside the ordinary course, cash management, adequateprotection, any Reorganization Plan and/or any disclosure statement related thereto and (ii) not later than the earlier of (A) three Business Daysprior to being filed (and if impracticable, then as soon as possible and in no event later than one Business Day prior to being filed) on behalf ofany of the Debtors with the Bankruptcy Court or (B) at the same time as such documents are provided by any of the Debtors to any statutorycommittee appointed in the Cases, the Creditors’ Committee, the Ad Hoc Note Holder Committee or the U.S. Trustee, all other notices, filings,motions, pleadings or other information concerning the financial condition of the Borrower or any of its Subsidiaries or other Indebtedness ofthe Loan Parties or any request for relief under section 363, 365, 1113 or 1114 of the Bankruptcy Code or section 9019 of the Federal Rules ofBankruptcy Procedure; and

(k) promptly, such additional information regarding the business, financial, legal or corporate affairs of any Loan Party or anySubsidiary thereof, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to timereasonably request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(d) (to the extent any such documents are includedin materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on thedate (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the websiteaddress listed on Schedule 10.02; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, ifany, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by theAdministrative Agent); provided that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lenderupon its request to the Borrower to deliver such paper copies until a written request to cease delivering paper copies is given by theAdministrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by fax transmission or e-mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) ofsuch documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents

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referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request by a Lender fordelivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent may make available to the Lenders materials and/or informationprovided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks,Debt Domain, Syndtrak, ClearPar, or another similar electronic system (the “Platform”) and (b) certain of the Lenders (each, a “PublicLender”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or therespective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to suchPersons’ securities. The Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of the BorrowerMaterials that may be distributed to the Public Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by markingBorrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent and the Lenders to treat suchBorrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to theBorrower or its securities for purposes of United States federal and state securities laws (provided, however, that to the extent such BorrowerMaterials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” arepermitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) the Administrative Agentshall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platformnot designated “Public Side Information”.

Section 6.03. Notices. Promptly notify the Administrative Agent and each Lender:

(a) of the occurrence of any Default;

(b) of (i) the breach or non-performance of, or any default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii)any dispute, litigation, investigation, proceeding or suspension between the Borrower or any Subsidiary and any Governmental Authority; (iii)the commencement of, or any material development in, any litigation or proceeding affecting the Borrower or any Subsidiary; or (iv) any othermatter; in each case, that has resulted or could reasonably be expected to result in a Material Adverse Effect;

(c) of the commencement of, or any material development in, any investigation, litigation or proceeding affecting the Borrower orany Subsidiary pursuant to any

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applicable Environmental Laws which could, either individually or in the aggregate, reasonably be expected to result in a materialEnvironmental Liability;

(d) of the occurrence of any ERISA Event; and

(e) of any material change in accounting policies or financial reporting practices by any Loan Party or any Subsidiary thereof.

Each notice pursuant to Section 6.03 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth detailsof the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each noticepursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that havebeen breached.

Section 6.04. Payment of Obligations. In the case of any Debtor, in accordance with the Bankruptcy Code and subject to obtainingany required approval by the Bankruptcy Court, pay and discharge as the same shall become due and payable, in each case as permitted by theapplicable Rolling Budget, all its material obligations and liabilities (in the case of any Debtor, solely to the extent arising post-petition),including (a) all Tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are beingcontested in good faith by appropriate proceedings diligently conducted and adequate reserves in accordance with GAAP are being maintainedby the Borrower or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien upon its property; and (c) allIndebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencingsuch Indebtedness.

Section 6.05. Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect the Borrower’s and the LoanParties’ legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section7.04 or 7.05; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in thenormal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;and (c) preserve or renew all of its registered patents, copyrights, trademarks, trade names and service marks, the non-preservation of whichcould reasonably be expected to have a Material Adverse Effect.

Section 6.06. Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and any equipment necessaryin the operation of its business in good working order and condition, ordinary wear and tear excepted; (b) make all necessary repairs theretoand renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect;and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.

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Section 6.07. Maintenance of Insurance. (a) Maintain insurance with respect to the Collateral, covering casualty, hazard, theft,malicious mischief, flood and other risks, in amounts, with endorsements and with insurers (with a Best’s Financial Strength Rating of at leastA+, unless otherwise approved by the Administrative Agent, at the direction of the Required Lenders, in their discretion) satisfactory to theAdministrative Agent, at the direction of the Required Lenders. All proceeds under each policy covering Collateral shall be payable to theAdministrative Agent as a lender loss payee. From time to time upon request, the Borrower shall deliver to the Administrative Agent theoriginals or certified copies of its insurance policies. Unless the Administrative Agent, at the direction of the Required Lenders, shall agreeotherwise, each policy shall include satisfactory endorsements that (i) provide for not less than 30 days’ prior notice to the AdministrativeAgent of termination, lapse or cancellation of such insurance (ii) with respect to insurance covering Collateral, name the Administrative Agentas loss payee, and (iii) specify that the interest of the Administrative Agent shall not be impaired or invalidated by any act or negligence of anyLoan Party or the owner of the property, nor by the occupation of the premises for purposes more hazardous than are permitted by the policy.If the Borrower fails to provide and pay for any insurance, the Administrative Agent may, at its option, but shall not be required to, procure theinsurance and charge the Borrower therefor. The Borrower agrees to deliver to the Administrative Agent, promptly as rendered, copies of allreports made to insurance companies. While no Event of Default exists, the Loan Parties may settle, adjust or compromise any insurance claim,as long as the proceeds are delivered to the Administrative Agent. If an Event of Default exists, only the Administrative Agent shall beauthorized to settle, adjust and compromise such claims; and (b) in addition to the insurance required under clause (a) with respect to Collateral,maintain insurance with insurers (with a Best’s Financial Strength Rating of at least A+, unless otherwise approved by the AdministrativeAgent in its discretion) satisfactory to the Administrative Agent, at the direction of the Required Lenders, with respect to the properties andbusiness of the Loan Parties, of such type (including product liability, workers’ compensation, larceny, embezzlement, or other criminalmisappropriation insurance), in such amounts, and with such coverages and deductibles as are at the time of placing such insurance customaryfor companies similarly situated and which are available at commercially reasonable rates.

Section 6.08. Compliance with Laws. Except as otherwise excused by the Bankruptcy Court, comply in all material respects with therequirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances inwhich (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligentlyconducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

Section 6.09. Books and Records. (a) Maintain proper books of record and account, in which full, true and correct entries inconformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of theBorrower or such Subsidiary, as the case may be; and (b) maintain such

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books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatoryjurisdiction over the Borrower or such Subsidiary, as the case may be.

Section 6.10. Inspection Rights. (a) Permit representatives and independent contractors of the Administrative Agent and each Lenderto visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstractstherefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at suchreasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower;provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives orindependent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and withoutadvance notice.

(b) Subject to the reimbursement limitations contained in the next sentence, at any time upon the Administrative Agent’s or theRequired Lenders’ request, the Loan Parties will allow the Administrative Agent (or its designee) to conduct field examinations to ensure theadequacy of Collateral and related reporting and control systems, and prepared on a basis reasonably satisfactory to the Administrative Agent,at the direction of the Required Lenders, such field examinations to include information required by applicable law and regulations. TheBorrower shall reimburse the Administrative Agent for all reasonable and documented charges, costs and expenses (including a reasonable perdiem field examination charge and out of pocket expenses) related thereto with respect to no more than one such field examination during eachcalendar year; provided that if an Event of Default has occurred and is continuing, (x) the Borrower shall reimburse the Administrative Agentfor all reasonable charges, costs and expenses (including a per diem field examination charge and out of pocket expenses) related to a secondsuch field examination during such calendar year; and (y) there shall be no limitation on the number or frequency of field examinations thatshall be at the sole expense of the Borrower.

Section 6.11. Use of Proceeds. Subject to the terms of the Orders, use the proceeds of the Loans only for the following purposes, ineach case in accordance with the Rolling Budget and any variances to the Rolling Budget permitted herein: (a) to fund working capital needs,capital improvements and expenditures of the Debtors in the Cases; (b) to pay fees and expenses related to the Cases, including professionalfees and expenses; and (c) to pay Adequate Protection Payments and reimburse drawings under Letters of Credit (as defined in the ABL CreditAgreement).

Section 6.12. Covenant to Guarantee Obligations and Give Security. (a) The formation or acquisition of any new direct or indirectSubsidiary after the Closing Date shall occur only with the consent of the Required Lenders. With respect to any Person that becomes a director indirect Subsidiary after the Closing Date (other than a CFC, a

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Subsidiary that is held directly or indirectly by a CFC or as otherwise agreed by the Required Lenders), the Borrower shall, at the Borrower’sexpense:

(i) within 15 days after such formation or acquisition (or such longer period as may be agreed by the Administrative Agent,at the direction of the Required Lenders, in their sole discretion), cause such Subsidiary, and cause each direct and indirect parent of suchSubsidiary (if it has not already done so), to duly execute and deliver to the Administrative Agent a guaranty or guaranty supplement, inform and substance satisfactory to the Administrative Agent, at the direction of the Required Lenders, guaranteeing the other LoanParties’ obligations under the Loan Documents,

(ii) within 30 days after such formation or acquisition (or such longer period as may be agreed by the Administrative Agent,at the direction of the Required Lenders, in their sole discretion), furnish to the Administrative Agent a description of the real andpersonal properties of such Subsidiary, in detail satisfactory to the Administrative Agent, at the direction of the Required Lenders,

(iii) within 15 days after such formation or acquisition (or such longer period as may be agreed by the AdministrativeAgent, at the direction of the Required Lenders, in their sole discretion), cause such Subsidiary and each direct and indirect parent ofsuch Subsidiary (if it has not already done so) to duly execute and deliver to the Administrative Agent Security Agreement Supplements,IP Security Agreement Supplements and other security and pledge agreements, as specified by and in form and substance satisfactory tothe Administrative Agent, at the direction of the Required Lenders (including delivery of all Pledged Equity in and of such Subsidiary,and other instruments of the type specified in Section 4.01(a)(vii)(A)), securing payment of all the Obligations of such Subsidiary or suchparent, as the case may be, under the Loan Documents and constituting Liens on all such personal properties, as required by the SecurityAgreement,

(iv) within 15 days after such formation or acquisition (or such longer period as may be agreed by the Administrative Agent,at the direction of the Required Lenders, in their sole discretion), cause such Subsidiary and each direct and indirect parent of suchSubsidiary (if it has not already done so) to take whatever action (including the filing of Uniform Commercial Code financing statements,the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the opinion of theAdministrative Agent, at the direction of the Required Lenders, to vest in the Administrative Agent (or in any representative of theAdministrative Agent designated by it) valid and subsisting Liens on the properties purported to be subject to Security AgreementSupplements, IP Security Agreement Supplements and security and pledge agreements delivered pursuant to this Section 6.12,enforceable against all third parties in accordance with their terms, as required by the Security Agreement,

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(v) [Reserved],

(vi) upon the request of the Administrative Agent, at the direction of the Required Lenders, in the exercise of its businessjudgment, within 90 days after such formation or acquisition (or such longer period as may be agreed by the Administrative Agent, at thedirection of the Required Lenders, in their sole discretion), deliver to the Administrative Agent with respect to all Material Real Propertyowned, leased or held by the entity that is the subject of such formation or acquisition, evidence that the Real Estate CollateralRequirement has been satisfied with respect to such Material Real Property; provided, however, that to the extent that any Loan Party orany of its Subsidiaries shall have otherwise received any item of diligence such as title information, environmental or engineering reportsor surveys, with respect to such Material Real Property, such items shall, promptly after the receipt thereof, be delivered to theAdministrative Agent.

(b) Upon the acquisition of any property by any Loan Party, if such property, in the judgment of the Lenders, shall not already besubject to a perfected security interest with the priorities set forth in Section 2.14 in favor of the Administrative Agent for the benefit of theSecured Parties, then the Borrower shall, at the Borrower’s expense:

(i) within 30 days after such acquisition (or such longer period as may be agreed by the Administrative Agent, at thedirection of the Required Lenders, in their sole discretion), furnish to the Administrative Agent a description of the property so acquiredin detail satisfactory to the Administrative Agent,

(ii) within 15 days after such acquisition (or such longer period as may be agreed by the Administrative Agent, at thedirection of the Required Lenders, in their sole discretion), (A) cause the applicable Loan Party to duly execute and deliver to theAdministrative Agent Security Agreement Supplements, IP Security Agreement Supplements and other security and pledge agreements,as specified by and in form and substance satisfactory to the Administrative Agent, at the direction of the Required Lenders, securingpayment of all the Obligations of the applicable Loan Party under the Loan Documents and constituting Liens on all such personalproperties and (B) cause the applicable Loan Party to take whatever action (including the filing of Uniform Commercial Code financingstatements, the giving of notices and the endorsement of notices on title documents) may be necessary or advisable in the opinion of theRequired Lenders to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid andsubsisting Liens on such property, enforceable against all third parties,

(iii) [Reserved],

(iv) within 30 days after any acquisition of any Material Real Property, notify the Administrative Agent and the Lenders ofsuch acquisition and, upon the

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request of the Administrative Agent, in the exercise of its business judgment, within 60 days after any such acquisition (or such longerperiod as may be agreed by the Administrative Agent, at the direction of the Required Lenders, in their sole discretion), satisfy the RealEstate Collateral Requirement; provided, however, that to the extent that any Loan Party or any of its Subsidiaries shall have otherwisereceived any item of diligence such as title information, environmental or engineering reports or surveys, in satisfaction of suchrequirement with respect to such Material Real Property, such items shall, promptly after the receipt thereof, be delivered to theAdministrative Agent.

(c) At any time upon request of the Administrative Agent, at the direction of the Required Lenders, promptly execute and deliverany and all further instruments and documents and take all such other action as the Administrative Agent, at the direction of the RequiredLenders, may reasonably deem necessary or desirable in obtaining the full benefits of, or (as applicable) in perfecting and preserving the Liensof, such guaranties, deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust, SecurityAgreement Supplements, IP Security Agreement Supplements (each intellectual property security agreement and intellectual property securityagreement supplement currently in effect and hereafter delivered pursuant to this Section 6.12, in each case in form and substance reasonablysatisfactory to the Required Lenders and as amended, the “Intellectual Property Security Agreement”) and other security and pledgeagreements.

(d) No later than 60 days after the Closing Date (or such longer periods as agreed by the Administrative Agent, at the direction ofthe Required Lenders (which, for the avoidance of doubt, may be provided via email), in their sole discretion), enter into the ControlAgreements (as defined in the Security Agreement and in form and substance reasonably satisfactory to the Required Lenders and theAdministrative Agent) required pursuant to Section 4.07 of the Security Agreement.

Section 6.13. Compliance with Environmental Laws. Comply, and cause all lessees and other Persons operating or occupying itsproperties to comply, in all material respects, with all applicable Environmental Laws and Environmental Permits; obtain, maintain and renewall Environmental Permits necessary for its operations and properties; and conduct any investigation, study, sampling and testing, andundertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials (i) from any of itsproperties and (ii) released, discharged or disposed of by any Loan Party or its Subsidiaries at any other property, facility or location, in eachcase in accordance with the requirements of all Environmental Laws in all material respects; provided, however, that neither the Borrower norany of its Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to doso is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstancesin accordance with GAAP.

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Section 6.14. Preparation of Environmental Reports. At the request of the Required Lenders during the existence of any Default,provide to the Lenders within 60 days (or such longer period as the Administrative Agent, at the direction of the Required Lenders, may agreein their sole discretion) after such request, at the expense of the Borrower, an environmental site assessment report for any of its propertiesdescribed in such request, prepared by an environmental consulting firm acceptable to the Administrative Agent, indicating the presence orabsence of Hazardous Materials and the estimated cost of any compliance, removal or remedial action in connection with any HazardousMaterials on such properties. Without limiting the generality of the foregoing, if the Administrative Agent determines at any time that amaterial risk exists that any such report will not be provided within the time referred to above, the Administrative Agent may, at the directionof the Required Lenders, retain an environmental consulting firm to prepare such report at the expense of the Borrower, and the Borrowerhereby grants and agrees to cause any Loan Party or Subsidiary that owns any property described in such request to grant at the time of suchrequest to the Administrative Agent, the Lenders, such firm and any agents or representatives thereof an irrevocable non-exclusive license,subject to the rights of tenants, to enter onto their respective properties to undertake such an assessment.

Section 6.15. Further Assurances. Promptly upon the reasonable request by the Administrative Agent, or any Lender through theAdministrative Agent, (a) correct any material defect or error that may be discovered in any Loan Document or in the execution,acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-registerany and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, or any Lender through theAdministrative Agent, may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Loan Documentsor the Orders, (ii) to the fullest extent permitted by applicable law, subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rightsor interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents or the Orders, (iii) perfect and maintainthe validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder or under theOrders and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rightsgranted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or the Orders or under any otherinstrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and causeeach of its Subsidiaries to do so.

Section 6.16. Compliance with Terms of Leaseholds. In the case of any Debtor, in accordance with the Bankruptcy Code and subjectto obtaining any required approval by the Bankruptcy Court, make all payments (to the extent permitted by the applicable Rolling Budget) andotherwise perform all obligations in respect of all leases of real property to which the Borrower or any of its Subsidiaries is a party, keep suchleases in full force and effect and not allow such leases to lapse or be terminated or any rights to

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renew such leases to be forfeited or cancelled, notify the Administrative Agent of any default by any party with respect to such leases andcooperate with the Administrative Agent in all respects to cure any such default, and cause each of its Subsidiaries to do so, except, in any case,where the failure to do so, either individually or in the aggregate, could not be reasonably likely to have a Material Adverse Effect.

Section 6.17. Material Contracts. In the case of any Debtor, in accordance with the Bankruptcy Code and subject to obtaining anyrequired approval by the Bankruptcy Court, perform and observe all the terms and provisions of each Material Contract to be performed orobserved by it, maintain each such Material Contract in full force and effect, enforce each such Material Contract in accordance with its terms,take all such action to such end as may be from time to time requested by the Administrative Agent, at the direction of the Required Lenders,and, upon request of the Administrative Agent, at the direction of the Required Lenders, make to each other party to each such MaterialContract such demands and requests for information and reports or for action as any Loan Party or any of its Subsidiaries is entitled to makeunder such Material Contract, and cause each of its Subsidiaries to do so, except, in any case, where the failure to do so, either individually orin the aggregate, could not reasonably be expected to have a Material Adverse Effect.

Section 6.18. Appraisals. At any time upon the Required Lenders’ request, promptly provide the Administrative Agent withappraisals thereof of the Loan Parties’ Collateral from an appraiser selected and engaged by the Administrative Agent, at the direction of theRequired Lenders, and prepared on a basis reasonably satisfactory to the Administrative Agent, at the direction of the Required Lenders, suchappraisals to include information required by applicable law and regulations. The Borrower shall reimburse the Administrative Agent for allreasonable and documented charges, costs and expenses related thereto with respect to one appraisal during each calendar year; provided,however, that when an Event of Default exists there shall be no limitation on the number or frequency of appraisals that shall be at the soleexpense of the Borrower.

Section 6.19. Administration of Deposit Accounts. Schedule 6.19 sets forth all deposit accounts maintained by the Loan Parties. Theapplicable Loan Party shall be the sole account holder of each deposit account and shall not allow any other Person (other than theAdministrative Agent, the Prepetition Term Loan Administrative Agent and, except with respect to the Term Loan Proceeds CollateralAccount, the ABL Agent) to have control over a deposit account or any property deposited therein. The proceeds of all Loans shall be depositedin the Term Loan Proceeds Collateral Account and, thereafter until such proceeds are used by the Borrower, shall be held solely in the TermLoan Proceeds Collateral Account. Funds in the Term Loan Proceeds Collateral Account may be transferred to other deposit accounts of theLoan Parties if and to the extent such funds are to be disbursed to third parties and, in such case, such transfer shall occur substantiallyconcurrently with or reasonably in advance of such disbursement. The Borrower shall promptly notify the Administrative Agent of any openingor closing of a

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deposit account by any Loan Party and, with the consent of Administrative Agent, will amend Schedule 6.19 to reflect the same.

Section 6.20. Certain Case Milestones.

(a) No later than 45 calendar days after the Petition Date (or such later date as the Required Lenders may agree in their solediscretion), obtain the entry of the Final Order;

(b) as promptly as possible, but in no event later than 75 calendar days after the Petition Date (or such later date as the RequiredLenders may agree in their sole discretion) (the “Disclosure Statement/Plan Deadline”), (i) the Acceptable Disclosure Statement shall havebeen approved by the Bankruptcy Court, and the Bankruptcy Court’s approval of the Acceptable Disclosure Statement shall not have beenamended, modified or supplemented (or any portions thereof reversed, stayed or vacated) other than as agreed in writing by the RequiredLenders in their sole discretion and (ii) the Acceptable Plan of Reorganization shall have been confirmed by an order of the Bankruptcy Court,which order shall be in form and substance acceptable to the Required Lenders in their sole discretion and shall not have been amended,modified or supplemented (or any portions thereof reversed, stayed or vacated) other than as agreed in writing by the Required Lenders in theirsole discretion.

(c) no later than 90 calendar days after the Petition Date (or such later date as the Required Lenders may agree in their solediscretion) cause the Consummation Date to occur.

Section 6.21. Certain Orders. (i) Cause all proposed (A) “first day” orders, (B) “second day” orders, (C) orders related to or affectingthe Loans, the Prepetition Term Loans, the Prepetition Term Loan Credit Agreement Loan Documents and the Loan Documents, any otherfinancing or use of Cash Collateral, any sale or other disposition of Collateral outside the ordinary course, cash management, adequateprotection, any Reorganization Plan and/or any disclosure statement related thereto, (D) orders concerning the financial condition of theBorrower or any of its Subsidiaries or other Indebtedness of the Loan Parties or seeking relief under section 363, 365, 1113 or 1114 of theBankruptcy Code or section 9019 of the Federal Rules of Bankruptcy Procedure, and (E) orders establishing procedures for administration ofthe Cases or approving significant transactions submitted to the Bankruptcy Court, in each case, proposed by the Debtors to be in accordancewith and permitted by the terms of this Agreement and reasonably acceptable to the Required Lenders in all respects[, it being understood andagreed that the forms of orders approved by the Required Lenders prior to the Petition Date are in accordance with and permitted by the termsof this Agreement and are reasonably acceptable in all respects] and (ii) once entered by the Bankruptcy Court, comply with any order listed inclause (i) of this Section 6.21 in all material respects.

Section 6.22. Cash Management System. Obtain entry of the Cash Management Order and use a cash management system that is thesame as or substantially similar to

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the cash management system in effect immediately prior to the Petition Date (the “Prepetition Cash Management System”). Any materialchanges made to the Prepetition Cash Management System must be acceptable to the Required Lenders in their reasonable discretion.

ARTICLE VII NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid orunsatisfied, the Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:

Section 7.01. Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now ownedor hereafter acquired, or sign or file or suffer to exist under the Uniform Commercial Code of any jurisdiction a financing statement that namesthe Borrower or any of its Subsidiaries as debtor, or assign any accounts or other right to receive income, other than the following:

(a) Liens pursuant to any Loan Document or the Orders;

(b) Liens in favor of the Prepetition Term Loan Administrative Agent to secure Indebtedness under the Prepetition Term LoanCredit Agreement;

(c) Liens for (i) pre-petition Taxes not yet due as of the Petition Date or which are being contested in good faith and by appropriateproceedings diligently conducted or (ii) post-petition Taxes not yet due or which are being contested in good faith and by appropriateproceedings diligently conducted, in each case, if adequate reserves with respect thereto are maintained on the books of the applicable Personin accordance with GAAP;

(d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of businesswhich do not secure Indebtedness for borrowed money and which are not overdue for a period of more than 30 days or which are beingcontested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on thebooks of the applicable Person;

(e) pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance andother social security legislation, other than any Lien imposed by ERISA;

(f) deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety andappeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; provided that the sum ofthe aggregate amount of obligations secured thereby and the

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aggregate amount of such deposits and Liens shall not exceed $4,000,000 outstanding at any time;

(g) easements, rights-of-way, restrictions and other similar encumbrances affecting real property which, individually or in theaggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto ormaterially interfere with the ordinary conduct of the business of the applicable Person;

(h) Liens securing judgments for the payment of money not constituting an Event of Default under Section 8.01(h);

(i) Liens securing Indebtedness permitted under Section 7.02(f), including such Liens outstanding on the date hereof; provided that(i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and (ii) the Indebtednesssecured thereby does not exceed the cost or fair market value, whichever is lower, of the property being acquired on the date of acquisition;

(j) Leases with respect to the assets or properties of any of the Borrower or any Subsidiary, in each case entered into in the ordinarycourse of such Person’s business so long as such leases are subordinate in all respects to the Liens granted and evidenced by the CollateralDocuments or the Orders and do not, individually or in the aggregate, (i) interfere in any material respect with the ordinary conduct of thebusiness of the Borrower or any Subsidiary or (ii) materially impair the use (for its intended purposes) or the value of the property subjectthereto;

(k) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into bythe Borrower or any Subsidiary in the ordinary course of business in accordance with the past practices of such Person;

(l) Liens of the ABL Agent to secure the Indebtedness under the ABL Credit Agreement permitted by Section 7.02(d) hereof;provided, that, such Liens are secured solely by ABL Facility Priority Collateral and the ABL Postpetition Collateral and subject to thePrepetition Intercreditor Agreement;

(m) Liens in favor of Bank of America, N.A. on the Credit Card Cash Collateral to secure obligations of any Loan Party under theP-Card Agreements;

(n) Liens on Real Property that are disclosed in any policy of title insurance delivered pursuant to the Prepetition Term Loan CreditAgreement or under the Real Estate Collateral Requirement;

(o) Liens in favor of the ABL Agent to secure Indebtedness permitted by Section 7.02(l) hereof; provided that (i) such Liens aresecured solely by ABL Facility Priority Collateral, (ii) such Liens are subject to the Prepetition Intercreditor Agreement and (iii) suchIndebtedness arises under a Secured Cash Management Agreement (as

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defined in the ABL Credit Agreement as in effect on February 17, 2016) and is otherwise permitted under the ABL Credit Agreement.

Section 7.02. Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

(a) [Reserved];

(b) Indebtedness among the Borrower and its wholly owned Subsidiaries, which Indebtedness shall (i) in the case of Indebtednessowed to a Loan Party, be evidenced by the Intercompany Note, (ii) in the case of Indebtedness owed by any Loan Party to a Subsidiary that isnot Loan Party, be unsecured, evidenced by the Intercompany Note and subordinated in right of payment to the Obligations, and (iii) beotherwise permitted under the provisions of Section 7.03;

(c) Indebtedness under the Loan Documents;

(d) Indebtedness outstanding on the date hereof that is listed on Schedule 7.02 and Indebtedness outstanding on the date hereofunder the Prepetition Term Loan Credit Agreement, the 2019 Senior Notes, the 2022 Senior Notes and the ABL Credit Agreement;

(e) Guarantees of the Borrower or any Subsidiary in respect of Indebtedness otherwise permitted hereunder of the Borrower or anyGuarantor;

(f) Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations and purchase money obligations for fixed or capitalassets within the limitations set forth in Section 7.01(i); provided, however, that the aggregate amount of all such Indebtedness at any one timeoutstanding (including any such Indebtedness outstanding on the date hereof) shall not exceed $85,000,000; provided, further, that theBorrower shall not, nor shall it permit any Subsidiary to, (x) amend, modify or otherwise change any agreement or other document governingsuch Indebtedness existing as of the date hereof in order to (i) add any liquidity, financial maintenance or other similar covenant or (ii) makeany such covenant existing as of the date hereof more restrictive as to the Borrower or any Subsidiary or (y) on or after the date hereof, enterinto any agreement or other document governing any such Indebtedness that includes, whether on the date of inception or at a later date, anyliquidity, financial maintenance or other similar covenant;

(g) [Reserved];

(h) Indebtedness in respect of workers’ compensation claims, self-insurance obligations, performance bonds, surety appeal orsimilar bonds and completion guarantees provided by the Borrower or a Subsidiary in the ordinary course of its business and consistent withthe applicable Rolling Budget, giving effect to Section 7.11;

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(i) Indebtedness in respect of (i) self-insurance obligations or completion, bid, performance, appeal or surety bonds issued for theaccount of the Borrower or any wholly-owned Subsidiary in the ordinary course of business and consistent with the applicable Rolling Budget,giving effect to Section 7.11, including guarantees or obligations of the Borrower or any wholly-owned Subsidiary with respect to letters ofcredit supporting such self-insurance, completion, bid, performance, appeal or surety obligations (in each case other than for an obligation formoney borrowed) or (ii) obligations represented by letters of credit for the account of the Borrower or any wholly-owned Subsidiary, as thecase may be, in order to provide security for workers’ compensation claims;

(j) [Reserved];

(k) [Reserved];

(l) Indebtedness arising under any Cash Management Agreement (as defined in the ABL Credit Agreement as in effect on February17, 2016) entered into by any Loan Party so long as (i) such Cash Management Agreement is entered into by such Loan Party in the ordinarycourse of business and is consistent with the applicable Rolling Budget, giving effect to Section 7.11 and (ii) such Indebtedness is in anaggregate principal amount at any one time outstanding not to exceed $3,500,000;

Section 7.03. Investments. Make or hold any Investments, except:

(a) Investments held by the Borrower and its Subsidiaries in the form of Cash Equivalents;

(b) [Reserved];

(c) (i) Investments by the Borrower and its Subsidiaries in their respective Subsidiaries outstanding on the date hereof andidentified on Schedule 7.03, (ii) additional Investments by the Borrower and its Subsidiaries in Loan Parties and (iii) additional Investments bySubsidiaries of the Borrower that are not Loan Parties in other Subsidiaries that are not Loan Parties;

(d) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant oftrade credit in the ordinary course of business and consistent with the applicable Rolling Budget, giving effect to Section 7.11, and Investmentsreceived in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order toprevent or limit loss;

(e) Guarantees permitted by Section 7.02; and

(f) Investments existing on the date hereof (including those referred to in Section 7.03(c)(i)) and identified on Schedule 7.03.

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Section 7.04. Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether inone transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of anyPerson, except that, so long as no Default exists or would result therefrom:

(a) (i) the Borrower may merge with one or more of its Subsidiaries, provided that the Borrower shall be the continuing or survivingPerson, and (ii) any of its Subsidiaries may merge with any of its other Subsidiaries provided that if any of such Subsidiaries is a Guarantor, aGuarantor shall be the surviving Person;

(b) any Guarantor may Dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to the Borrower or toanother Guarantor; and

(c) any Subsidiary that is not a Guarantor may dispose of all or substantially all its assets (including any Disposition that is in thenature of a liquidation) to the Borrower or another Subsidiary.

Section 7.05. Dispositions. Make any Disposition or enter into any agreement to make any Disposition, except:

(a) Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

(b) Dispositions of inventory in the ordinary course of business and consistent with the applicable Rolling Budget, giving effect toSection 7.11;

(c) Dispositions of equipment to the extent that (i) such equipment is exchanged for credit against the purchase price of similarreplacement equipment or (ii) the proceeds of such Disposition are (x) paid solely in cash, (y) reinvested in replacement equipment within 30days of receipt and during such period the proceeds of such Disposition are deposited in the Term Loan Proceeds Collateral Account and (z) ifthe equipment subject to such Disposition was Collateral, such replacement equipment is or becomes Collateral subject to a perfected Lien infavor of the Administrative Agent for the benefit of the Secured Parties substantially contemporaneously with the consummation of suchreplacement;

(d) Dispositions of property by any Subsidiary to the Borrower or to a wholly-owned Subsidiary; provided that if the transferor ofsuch property is a Guarantor, the transferee thereof must either be the Borrower or a Guarantor;

(e) Dispositions permitted by Section 7.04;

(f) [Reserved]; and

(g) non-exclusive licenses or sublicenses to use the patents, trade secrets, know-how and other intellectual property, and licenses,leases or subleases of other

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assets, of the Borrower or any wholly-owned Subsidiary in the ordinary course of business consistent with past practices and consistent withthe applicable Rolling Budget, giving effect to Section 7.11;

provided, however, that any Disposition pursuant to Section 7.05(a) through Section 7.05(e) (other than Dispositions to a Loan Party) shall befor fair market value.

Section 7.06. Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation(contingent or otherwise) to do so, except that, so long as no Default shall have occurred and be continuing at the time of any action describedbelow or would result therefrom each Subsidiary may make Restricted Payments to the Borrower, any Subsidiaries of the Borrower that areGuarantors and any other Person (to the extent the proceeds of such Restricted Payments are being passed through by such other Personsubstantially concurrently with the receipt thereof to a Guarantor or the Borrower) that owns a direct Equity Interest in such Subsidiary, ratablyaccording to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made.

Section 7.07. Change in Nature of Business. Engage in any material line of business substantially different from those lines ofbusiness conducted by the Borrower and its Subsidiaries on the date hereof or any business substantially related or incidental thereto.

Section 7.08. Transactions with Affiliates. Enter into or permit to exist any transaction of any kind with any Affiliate of the Borrower,whether or not in the ordinary course of business, other than on fair and reasonable terms substantially as favorable to the Borrower or suchSubsidiary as would be obtainable by the Borrower or such Subsidiary at the time in a comparable arm’s length transaction with a Person otherthan an Affiliate; provided that the foregoing restriction shall not apply to transactions between or among the Loan Parties or the transactionscontemplated by the Restructuring Support Agreement.

Section 7.09. Burdensome Agreements. Enter into or permit to exist any Contractual Obligation (other than this Agreement, any otherLoan Document or the ABL Agreement as in effect on the date hereof) that (a) limits the ability (i) of any Subsidiary to make RestrictedPayments to the Borrower or any Guarantor or to otherwise transfer property to or invest in the Borrower or any Guarantor, except for anyagreement in effect (A) on the date hereof and set forth on Schedule 7.09 or (B) at the time any Subsidiary becomes a Subsidiary of theBorrower, so long as such agreement was not entered into solely in contemplation of such Person becoming a Subsidiary of the Borrower, (ii)of any Subsidiary to Guarantee the Obligations or (iii) of the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on itsproperty to secure the Obligations; provided, however, that this clause (iii) shall not prohibit any negative pledge incurred or provided in favorof any holder of Indebtedness existing as of the date hereof and permitted under Section 7.02(f) solely to the extent any such negative pledgerelates to

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the property financed by or the subject of such Indebtedness; or (b) requires the grant of a Lien to secure an obligation of such Person if a Lienis granted to secure the Obligations.

Section 7.10. Use of Proceeds. Use the proceeds of any Loan, whether directly or indirectly, and whether immediately, incidentally orultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose ofpurchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

Section 7.11. Budget Variance. As of any Testing Date, for the Testing Period ending on such Testing Date, the Borrower shall notpermit (a) the aggregate receipts of the Borrower and its Subsidiaries for such Testing Period to be less than, in the aggregate, (i) 75% of theaggregate receipts line item for the Borrower and its Subsidiaries for the first such Testing Period covered in the appendix to the applicableRolling Budget, (ii) 75% of the aggregate receipts line item for the Borrower and its Subsidiaries for the second such Testing Period covered inthe appendix to the applicable Rolling Budget, (iii) 80% of the aggregate receipts line item for the Borrower and its Subsidiaries for theTesting Period after the second Testing Period covered in the appendix to the applicable Rolling Budget and each Testing Period thereafterbeginning on or prior to the 100 Day Anniversary and (iv) 85% of the aggregate receipts line item for the Borrower and its Subsidiaries foreach Testing Period beginning after the 100 Day Anniversary, and (b) the aggregate operating disbursements (excluding professional fees andexpenses) made by the Borrower and its Subsidiaries for such Testing Period to be greater than (i) 125% of the aggregate operatingdisbursements line item for the first such Testing Period covered in the appendix to the applicable Rolling Budget, (ii) 125% of the aggregateoperating disbursements line item for the second such Testing Period covered in the appendix to the applicable Rolling Budget, (iii) 120% ofthe aggregate operating disbursements line item for the Testing Period after the second Testing Period covered in the appendix to theapplicable Rolling Budget and each Testing Period thereafter beginning on or prior to the 100 Day Anniversary and (iv) 115% of the aggregateoperating disbursements line item for each Testing Period beginning after the 100 Day Anniversary, in each case set forth in the most recentRolling Budget covering such Testing Period.

Section 7.12. Capital Expenditures and Capitalized Lease Payments. Make or become legally obligated to make (without duplication)any Capital Expenditure or make or become legally obligated to make any payment in respect of a Capitalized Lease, except for CapitalExpenditures and Capitalized Lease payments that are made in the ordinary course of business consistent with the applicable Rolling Budget,giving effect to Section 7.11; provided that, in each case, as of the date of any such Capital Expenditure or Capitalized Lease payment (andgiving pro forma effect to such Capital Expenditure or Capitalized Lease payment and any concurrent incurrence of Indebtedness) no Defaultexists and such Capital Expenditure or Capitalized Lease payment could not reasonably be expected to cause a Default.

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Section 7.13. Amendments of Organization Documents. Amend any of its Organization Documents in a manner which couldmaterially and adversely affect the interests of the Administrative Agent or the Lenders.

Section 7.14. Accounting Changes. Make any change in (a) its accounting policies or reporting practices, except as required byGAAP, or (b) its fiscal year.

Section 7.15. Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduledmaturity thereof in any manner, or make any payment in violation of any subordination terms of, any post-petition Indebtedness or anyIndebtedness existing on the Petition Date, except (i) the prepayment of the Loans in accordance with the terms of this Agreement and (ii) inthe case of such Indebtedness in existence on the Petition Date, (A) as expressly provided for in the “first day” orders entered by theBankruptcy Court that are reasonably acceptable to the Required Lenders, (B) payments that are made substantially simultaneous with orfollowing the termination of the Commitments and the repayment of the Obligations in cash in full and are provided for in the Acceptable Planof Reorganization and (C) Adequate Protection Payments.

Section 7.16. Amendment, Etc. of Indebtedness. Amend, modify or change in any manner any term or condition of the ABL CreditAgreement, the Senior Notes, the Senior Notes Documents or any Indebtedness set forth on Schedule 7.02, except for with respect to theSenior Notes and the Senior Notes Documents, any amendments or modifications made to (i) cure any ambiguity, defect or inconsistency, (ii)evidence or provide for the acceptance of appointment by a successor trustee or effect any similar immaterial administrative modifications or(iii) supplemental indentures to the Senior Notes Documents made solely to add guarantors.

Section 7.17. Sanctions. Directly or indirectly, use any Loan or the proceeds of any Loan, or lend, contribute or otherwise makeavailable such Loan or the proceeds of any Loan to any Person, to fund any activities of or business with any Person that, at the time of suchfunding, is the subject of Sanctions, or in any country or territory that, at the time of such funding, is a Designated Jurisdiction, or in any othermanner that will result in a violation by any Person (including any Person participating in the transaction, whether as Lender, AdministrativeAgent, or otherwise) of Sanctions or Anti-Corruption Laws.

Section 7.18. Additional Bankruptcy Matters. Without the Required Lenders’ prior written consent, do any of the following:

(a) assert or prosecute any claim or cause of action against any of the Secured Parties (in their capacities as such), unless such claimor cause of action is in connection with the enforcement of the Loan Documents against the Administrative Agent or the Lenders;

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(b) subject to the terms of the Orders and Section 8.01, object to, contest, delay, prevent or interfere with in any material manner theexercise of rights and remedies by the Administrative Agent or the Lenders with respect to the Collateral following the occurrence of an Eventof Default (provided that any Loan Party may contest or dispute whether an Event of Default has occurred); or

(c) except (i) as expressly provided or permitted hereunder (including to the extent pursuant to any “first day” or “second day” orderscomplying with the terms of this Agreement), (ii) with the prior consent of the Required Lenders in their sole discretion or (iii) as providedpursuant to any other order of the Bankruptcy Court reasonably acceptable to the Required Lenders, make any payment or distribution to anynon-Debtor Affiliate or insider of the Borrower outside of the ordinary course of business or any Prepetition Payment.

ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES

Section 8.01. Events of Default. Any of the following shall constitute an Event of Default:

(a) Non-Payment. The Borrower or any other Loan Party fails to (i) pay when and as required to be paid herein, any amount ofprincipal of any Loan or (ii) pay within three days after the same becomes due, any interest on any Loan, or any fee due hereunder or (iii) paywithin five days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

(b) Specific Covenants. (i) The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section2.14, 6.01, 6.02(a), 6.02(b), 6.03(a), 6.03(b), 6.05, 6.07, 6.10, 6.11, 6.12, 6.14, 6.19, 6.20, 6.21 or 6.22 or Article VII or (ii) the Borrower failsto perform or observe any term, covenant or agreement contained in Section 6.02 (other than Section 6.02(a) and 6.02(b)) or Section 6.03(other than Section 6.03(a) and 6.03(b)) and such failure continues for five days; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in Section 8.01(a) or(b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days; or

(d) Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or onbehalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith ortherewith shall be incorrect or misleading in any material respect when made or deemed made; or

(e) Cross-Default. (i) Any Loan Party or any Subsidiary thereof (A) fails to make any payment when due (whether by scheduledmaturity, required prepayment,

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acceleration, demand or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness underSwap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing toall creditors under any combined or syndicated credit arrangement) of more than $3,000,000 or (B) fails to observe or perform any otheragreement or condition relating to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing orrelating thereto, or any other event occurs, in each case with respect to clause (B) only, the effect of which default or other event is to cause, orto permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf ofsuch holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or tobecome due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease orredeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof tobe demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A)any event of default under such Swap Contract as to which a Loan Party or any Subsidiary thereof is the Defaulting Party (as defined in suchSwap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which a Loan Party or any Subsidiary thereof isan Affected Party (as so defined) and, in either event, the Swap Termination Value owed by such Loan Party or such Subsidiary as a resultthereof is greater than $3,000,000; provided, that this clause (e) shall not apply to any Indebtedness of any Debtor that was incurred prior to thePetition Date (or, if later, the date on which such Person became a Debtor); or

(f) Insolvency Proceedings, Etc. Any Subsidiary (other than a Debtor) institutes or consents to the institution of any proceedingunder any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver,trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver,trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and theappointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any suchPerson or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for60 calendar days, or an order for relief is entered in any such proceeding; unless (x) prior to any of the foregoing described in clause (f), suchSubsidiary becomes a Loan Party, (y) within five (5) Business Days of such action, such Subsidiary’s insolvency proceeding becomes jointlyadministered with that of the Borrower and (iii) each of the Interim Order (within five (5) Business Days of the commencement of suchproceeding or such other circumstance) and Final Order (within forty-five (45) days of the commencement of such proceeding or such othercircumstance) are made applicable to such Subsidiary; or

(g) Inability to Pay Debts; Attachment. (i) Any Subsidiary (other than a Debtor) becomes unable or admits in writing its inability orfails generally to pay its

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debts as they become due or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any materialpart of the property of any such Loan Party and is not released, vacated or fully bonded within 30 days after its issue or levy; or

(h) Judgments. There is entered against any Loan Party or any Subsidiary thereof (which, in the case of the Debtors only, arosepost-petition) (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders)exceeding $3,000,000 (to the extent not covered by independent third-party insurance as to which the insurer is rated at least “A” by A.M. BestCompany, has been notified of the potential claim and does not dispute coverage) or (ii) any one or more non-monetary final judgments thathave, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcementproceedings are commenced by any creditor upon such judgment or order or (B) there is a period of 10 consecutive days during which a stay ofenforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonablybe expected to result in a Material Adverse Effect or the imposition of a Lien on the assets of a Loan Party or (ii) the Borrower or any ERISAAffiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawalliability under Section 4201 of ERISA under a Multiemployer Plan and such failure to pay has resulted or could reasonably be expected toresult in a Material Adverse Effect or the imposition of a Lien on the assets of a Loan Party; or

(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any time after its execution and delivery and for anyreason other than as expressly permitted hereunder or thereunder or satisfaction in full of all the Obligations, ceases to be in full force andeffect; or any Loan Party or any other Person contests in any manner the validity or enforceability of any provision of any Loan Document; orany Loan Party denies that it has any or further liability or obligation under any provision of any Loan Document, or purports to revoke,terminate or rescind any provision of any Loan Document; or

(k) Minimum Liquidity. As of any date on or after the Closing Date (after giving effect to the Initial Advance), the unrestricted cashbalances and Cash Equivalents of the Borrower and its consolidated Subsidiaries shall be less than (i) unless clause (ii) applies, $25,000,000 or(ii) if the Final Order has not been entered by the Bankruptcy Court on or prior to November 18, 2016, from November 18, 2016 until theearlier of (x) the date the Second Advance is made, after giving effect to such Borrowing, and (y) the date on which all funds in the EscrowAccount (as defined in the Prepetition Term Loan Credit Agreement) are released to the Term Loan Proceeds Collateral Account, after givingeffect to the receipt of such funds, $20,000,000.

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(l) Collateral Documents. Any Collateral Document after delivery thereof pursuant to Section 4.01 or 6.12 or the Orders shall forany reason (other than pursuant to the terms thereof) cease to create a valid and perfected Lien on the Collateral (with the priorities set forth inSection 2.14) having an aggregate fair market value in excess of $5,000,000 that is purported to be covered thereby unless such occurrenceresults solely from action of the Administrative Agent or any Lender and involves no Default by the Borrower or any Guarantor hereunder orunder any Collateral Document; or

(m) Cases.

(i) Any of the Cases shall be dismissed or converted into a case under Chapter 7 of the Bankruptcy Code or any Debtorsshall file a motion or other pleading seeking the dismissal of any of the Cases under section 1112 of the Bankruptcy Code or otherwise;or

(ii) A trustee, responsible officer or an examiner having expanded powers (beyond those set forth under sections 1106(a)(3)and (4) of the Bankruptcy Code) under Bankruptcy Code section 1104 (other than a fee examiner) is appointed or elected in the any ofthe Cases, any Loan Party applies for, consents to, or fails to contest in, any such appointment, or the Bankruptcy Court shall haveentered an order providing for such appointment; or

(iii) An application shall be filed by any Debtor for the approval of any Other Superpriority Claim, or an order of theBankruptcy Court shall be entered granting any Other Superpriority Claim (other than with respect to (A) the Carve-Out in any of theCases or (B) any application or order that provides for immediate indefeasible payment in full in cash of the Obligations) that is paripassu with or senior to (x) the claims of the Administrative Agent or the Lenders against any Loan Party under any Loan Document, (y)the claims of the Prepetition Term Loan Administrative Agent or the Prepetition Term Loan Lenders against any Loan Party under thePrepetition Term Loan Credit Agreement or any other Prepetition Term Loan Credit Agreement Loan Documents or (z) the claims of theABL Agent or the ABL Lenders against any Loan Party under the ABL Credit Agreement or any other ABL Credit Agreement LoanDocument, or there shall arise or otherwise be granted any such pari passu or senior Other Superpriority Claim, in each case other thanthe Superpriority Claims, any Other Superpriority Claims of the Prepetition Term Loan Administrative Agent, the ABL Agent, the ABLLenders or the Prepetition Term Loan Lenders or with respect to the Carve-Out; or

(iv) The Loan Parties shall create or incur, or the Bankruptcy Court enters an order granting, any Lien which is pari passuwith or senior to any Liens under the Loan Documents or the adequate protection Liens granted under the Interim Order, other than theLiens permitted to have such priority under the Loan Documents and the Orders; or

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(v) The Bankruptcy Court shall enter an order or orders granting relief from the automatic stay application under section362 of the Bankruptcy Code (or equivalent) so as to (A) permit a third party to proceed on any assets of any of the Debtors which have avalue in excess of $500,000 in the aggregate or (B) permit other actions that would result in a Material Adverse Effect; or

(vi) (A) An order of the Bankruptcy Court shall be entered reversing, amending, supplementing, staying for a period ofseven (7) days or more, vacating or otherwise amending, supplementing or modifying the Interim Order or the Final Order, or a LoanParty shall apply for the authority to do so; (B) an order of the Bankruptcy Court shall be entered denying or terminating use of CashCollateral by the Loan Parties and the Loan Parties shall have not obtained use of Cash Collateral pursuant to an order consented to by,and in form and substance reasonably acceptable to, the Required Lenders; (C) the Interim Order (prior to the entry of the Final Order) orthe Final Order (at all times thereafter) shall cease to create a valid and perfected Lien on the Collateral with the priority described in thisAgreement and the Orders or grant the Superpriority Claims in respect of the Loan or to be in full force and effect; (D) the entry of anorder in any of the Cases (other than the Orders) granting adequate protection to any other Person; (E) an order shall have been enteredby the Bankruptcy Court modifying the adequate protection obligations granted in any Order, (F) an order shall have been entered by theBankruptcy Court avoiding or requiring disgorgement by the Administrative Agent or any of the Lenders of any amounts received inrespect of the Obligations, (G) any Loan Party shall file a motion or other request with the Bankruptcy Court seeking any financing undersection 364(d) of the Bankruptcy Code secured by any of the Collateral that does not provide for termination of the Commitments andindefeasible payment in full in cash of the Obligations or (H) a final non-appealable order in the Cases shall be entered charging any ofthe Collateral under section 506(c) of the Bankruptcy Code against the Lenders, or the commencement of any other actions by the LoanParties that challenges the rights and remedies of the Administrative Agent or the Lenders in any of the Cases or that is inconsistent withthe Loan Documents; or

(vii) Except as permitted by the Orders or by Section 7.18(c) hereof, any Debtor shall make any Prepetition Payment otherthan Prepetition Payments authorized by the Bankruptcy Court in accordance with the orders of the Bankruptcy Court reasonablyacceptable to the Required Lenders; or

(viii) A Reorganization Plan that is not the Acceptable Plan of Reorganization shall be (A) confirmed by the BankruptcyCourt or (B) confirmed or filed by any Loan Party in any of the Cases, or any order shall be entered which dismisses any of the Cases andwhich order does not provide for termination of the Commitments and indefeasible payment in full in cash of the Obligations andcontinuation of the Liens with respect thereto until the effectiveness thereof (other than contingent indemnification obligations not yetdue and payable) or any of the

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Debtors shall seek confirmation or support any other entity seeking confirmation of any such plan or entry of any such order; or

(ix) Any of the Loan Parties shall seek to, or shall support (whether by way of motion or other pleadings filed with theBankruptcy Court or any other writing executed by any Loan Party or by oral argument) any motion to, (A) disallow in whole or in partany of the Obligations, (B) disallow in whole or in part any of the Indebtedness owed by the Loan Parties under the Prepetition TermLoan Credit Agreement Loan Documents, (C) challenge the validity and enforceability of the Liens or security interests granted underany of the Loan Documents or in any Order in favor of the Administrative Agent or (D) challenge the validity and enforceability of theLiens or security interests granted under the Prepetition Term Loan Credit Agreement Loan Documents or in any Order in favor of thePrepetition Term Loan Administrative Agent or the Prepetition Term Loan Lenders; or

(x) Termination, reduction or expiration of any exclusivity period for any Loan Party to file or solicit acceptances for aReorganization Plan; or

(xi) Termination of the Restructuring Support Agreement as to any party thereto in accordance with its terms; or

(xii) Noncompliance by any Loan Party or any of its Subsidiaries with the terms of the Interim Order or the Final Order inany material respect or the occurrence of a Termination Event (as defined in the Orders); or

(xiii) The Loan Parties shall commence, join in, assist or otherwise participate as an adverse party in any suit or otherproceeding against (A) the Prepetition Term Loan Administrative Agent or any of the Prepetition Term Loan Lenders regarding theobligations of any Loan Party under the Prepetition Term Loan Credit Agreement or Liens granted to the Prepetition Term LoanAdministrative Agent or any of the Prepetition Term Loan Lenders under the Prepetition Term Loan Credit Agreement Loan Documentsor (B) the Administrative Agent or any of the Lenders regarding their respective rights and remedies under the Loan Documents in theCases in a manner inconsistent with the Loan Documents; or

(xiv) Any Loan Party shall file any motion seeking authority to consummate the sale of assets of any Loan Party that isCollateral (other than any such sale that is permitted under the Loan Documents or an Acceptable Plan of Reorganization) pursuant tosection 363 of the Bankruptcy Code; or

(xv) Any Loan Party or other Subsidiary shall take any action in support of any matter set forth in paragraphs (i)-(viii) and(xiii) above or in support of any filing by any Person of a Reorganization Plan that is not an

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Acceptable Plan of Reorganization and the relief requested is granted in an order that is not stayed pending appeal.

(n) Change of Control. A Change of Control shall have occurred.

Section 8.02. Remedies upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent shall, atthe request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans to be terminated, whereupon such commitments and obligation shall beterminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amountsowing or payable hereunder or under any other Loan Document to be immediately due and payable (an “acceleration”), which amount shallinclude the Exit Fee in effect on the date of such acceleration, as if such acceleration were an optional or mandatory prepayment on theprincipal amount of Loans accelerated, whereupon they shall be due and payable, without presentment, demand, protest or other notice of anykind, all of which are hereby expressly waived by the Borrower; and

(c) subject to the proviso below, exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lendersunder the Loan Documents, the Orders or applicable Law or equity;

provided, however, that, notwithstanding the foregoing, with respect to the enforcement of Liens or other remedies with respect to theCollateral of the Loan Parties under the preceding clause (c) under the Loan Documents, the Orders or applicable Law or equity, theAdministrative Agent shall provide the Borrower with five (5) Business Days’ written notice prior to taking the action contemplated thereby(in any hearing after the giving of the aforementioned notice, the only issue that may be raised by any party in opposition thereto beingwhether, in fact, an Event of Default has occurred and is continuing).

Section 8.03. Application of Funds. After the exercise of remedies provided for in Section 8.02, any amounts received on account ofthe Obligations shall, subject to the provisions of Section 2.16, be applied by the Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, chargesand disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in itscapacity as such;

Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal andinterest) payable to the Lenders (including fees, charges and disbursements of counsel to the respective Lenders arising

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under the Loan Documents and amounts payable under Article III, ratably among them in proportion to the respective amounts described inthis clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued interest on the Loans and other Obligations arising under theLoan Documents, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, ratably among the AdministrativeAgent and the Lenders in proportion to the respective amounts described in this clause Fourth held by them;

Fifth, to payment of all other Obligations ratably among the Secured Parties; and

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required byLaw.

ARTICLE IX ADMINISTRATIVE AGENT

Section 9.01. Appointment and Authority.

(a) Each of the Lenders hereby irrevocably appoints, designates and authorizes U.S. Bank National Association to act on its behalfas the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions onits behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actionsand powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, theLenders, and the Borrower shall not have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the useof the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is notintended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead suchterm is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

(b) The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders herebyirrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender for purposes of acquiring, holding andenforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers anddiscretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien onthe Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at thedirection of the Administrative

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Agent), shall be entitled to the benefits of all provisions of this Article IX and Article XI (including Section 10.04(c), as though such co-agents,sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

Section 9.02. Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers inits capacity as a Lender (to the extent it is or becomes a Lender) as any other Lender and may exercise the same as though it were not theAdministrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires,include the Person serving as the Administrative Agent hereunder in its individual capacity. The Administrative Agent and its Affiliates mayaccept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage inany kind of banking, trust, financial, advisory, underwriting or other business with the Borrower or any Subsidiary or other Affiliate thereof asif such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders or to provide notice to orconsent of the Lenders with respect thereto.

Section 9.03. Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly setforth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of theforegoing, the Administrative Agent and its Related Parties:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights andpowers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed inwriting by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the otherLoan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of itscounsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for theavoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may affect a forfeiture,modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty or responsibility to disclose, andshall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to orobtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

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The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default isgiven in writing to the Administrative Agent by the Borrower or a Lender.

Neither the Administrative Agent nor any of its Related Parties have any duty or obligation to any Lender or participant or any otherPerson to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other LoanDocument, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith ortherewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or theoccurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or anyother agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the CollateralDocuments, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhereherein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

Section 9.04. Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall be fully protectedin relying upon and shall not incur any liability for relying upon, any notice, request, certificate, communication, consent, statement,instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed byit to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely uponany statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall be fully protected inrelying and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loanthat by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory tosuch Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. TheAdministrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other expertsselected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants orexperts. For purposes of determining compliance with the conditions specified in Article IV, each Lender that has signed this Agreement shallbe deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to beconsented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from suchLender prior to the applicable Advance, specifying its objections.

The Administrative Agent shall not be liable for any action taken (x) in good faith and reasonably believed by it to be within the powersconferred upon it, or taken by it pursuant to any direction or instruction by which it is governed, or omitted to be taken by it by reason of thelack of direction or instruction required hereby for such action

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(including for refusing to exercise discretion or for withholding its consent in the absence of its receipt of, or resulting from a failure, delay orrefusal on the part of any Lender to provide, written instruction to exercise such discretion or grant such consent from any such Lender, asapplicable) or (y) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall benecessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01and 8.02). The Administrative Agent shall not be liable for any error of judgment made in good faith unless it shall be proven thatAdministrative Agent was grossly negligent in ascertaining the relevant facts. Nothing herein or in any Loan Documents or related documentsshall obligate the Administrative Agent to advance, expend or risk its own funds, or to take any action which in its reasonable judgment maycause it to incur any expense or financial or other liability for which it is not adequately indemnified. The Administrative Agent shall not beliable for any indirect, special or consequential damages (including but not limited to lost profits) whatsoever, even if it has been informed ofthe likelihood thereof and regardless of the form of action. Any permissive grant of power to Administrative Agent hereunder shall not beconstrued to be a duty to act. Administrative Agent shall have only the duties and responsibilities as are specifically set forth in this Agreementand no covenants or obligations shall be implied in this Agreement against the collateral agent. Before acting hereunder, Administrative Agentshall be entitled to request, receive and rely upon such certificates and opinions as it may reasonably determine appropriate with respect to thesatisfaction of any specified circumstances or conditions precedent to such action.

The Administrative Agent shall not be responsible or liable for delays or failures in performance resulting from acts beyond its control.Such acts shall include but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, governmental regulations superimposedafter the fact, fire, communication line failures, computer viruses, power failures, earthquakes or other disasters.

Section 9.05. Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powershereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. TheAdministrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through theirrespective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of theAdministrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the creditfacilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for thenegligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealablejudgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

Section 9.06. Resignation of Administrative Agent.

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(a) Notice. The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receiptof any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, whichshall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successorshall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiringAdministrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “ResignationEffective Date”), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders, appoint a successorAdministrative Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall becomeeffective in accordance with such notice on the Resignation Effective Date.

(b) Defaulting Lender. If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definitionthereof, the Required Lenders may, to the extent permitted by applicable Law, by notice in writing to the Borrower and such Person removesuch Person as Administrative Agent and, in consultation with the Borrower, appoint a successor. If no such successor shall have been soappointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by theRequired Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice onthe Removal Effective Date.

(c) Effect of Resignation or Removal. With effect from the Resignation Effective Date or the Removal Effective Date (asapplicable) (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the otherLoan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders under any of theLoan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successorAdministrative Agent is appointed) and (ii) except for any indemnity payments or other amounts then owed to the retiring or removedAdministrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shallinstead be made by or to each Lender directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent asprovided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to andbecome vested with all of the rights, powers, privileges and duties of the retiring (or removed) Administrative Agent (other than as provided inSection 3.01(g) and other than any rights to indemnity payments or other amounts owed to the retiring or removed Administrative Agent as ofthe Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or removed Administrative Agent shall bedischarged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as providedabove in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as

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those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removedAdministrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub‑agents and their respective Related Parties inrespect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting asAdministrative Agent.

Section 9.07. Non-Reliance on Administrative Agent and Other Lenders. Each Lender acknowledges that it has, independently andwithout reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents andinformation as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender alsoacknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their RelatedParties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions intaking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnishedhereunder or thereunder.

Section 9.08. [Reserved].

Section 9.09. Administrative Agent May File Proofs of Claim; Credit Bidding.

(a) In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any LoanParty, the Administrative Agent (irrespective of whether the principal of any Loan Obligation shall then be due and payable as hereinexpressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower)shall be entitled and empowered, by intervention in such proceeding or otherwise to file and prove a claim for the whole amount of theprincipal and interest owing and unpaid in respect of the Loans, Obligations and all other Obligations that are owing and unpaid and to filesuch other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including anyclaim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and theirrespective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.09 and 10.04) allowed insuch judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is herebyauthorized by each Lender to make such payments to the Administrative Agent and, if the Administrative Agent shall consent to the making ofsuch payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses,disbursements and advances

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of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalfof any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender toauthorize the Administrative Agent to vote in respect of the claim of any Lender or in any such proceeding.

The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all orany portion of the Obligations (including accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to adeed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or anyportion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code of the United States, including undersections 363, 1123 or 1129 of the Bankruptcy Code of the United States, or any similar Laws in any other jurisdictions to which a Loan Partyis subject, (b) at any other sale or foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of)the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable Law. In connection with any such creditbid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid on a ratable basis (withObligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that wouldvest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocatingthe contingent interests) in the asset or assets so purchased (or in the Equity Interests or debt instruments of the acquisition vehicle or vehiclesthat are used to consummate such purchase). In connection with any such bid (i) the Administrative Agent shall be authorized to form one ormore acquisition vehicles to make a bid, (ii) to adopt documents providing for the governance of the acquisition vehicle or vehicles (providedthat any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets orEquity Interests thereof shall be governed, directly or indirectly, by the vote of the Required Lenders, irrespective of the termination of thisAgreement and without giving effect to the limitations on actions by the Required Lenders contained in clauses (a) through (h) of Section10.01 of this Agreement, and (iii) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral forany reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds theamount of debt credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Lenders pro rataand the Equity Interests and/or debt instruments issued by any acquisition vehicle on account of the Obligations that had been assigned to theacquisition vehicle shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any furtheraction.

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Section 9.10. Collateral and Guaranty Matters.

(a) Each of the Lenders irrevocably authorizes the Administrative Agent, at its option and in its discretion,

(i) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upontermination of the Aggregate Commitments and payment in full in cash of all Obligations (other than contingent indemnificationobligations), (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other LoanDocument, or (iii) if approved, authorized or ratified in writing in accordance with Section 10.01;

(ii) to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of atransaction permitted hereunder; and

(iii) to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document tothe holder of any Lien on such property that is permitted by Section 7.01(i).

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’sauthority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under theGuaranty pursuant to this Section 9.10. In each case as specified in this Section 9.10, the Administrative Agent will, at the Borrower’s expense,execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of suchitem of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item,or to release such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and thisSection 9.10.

(b) The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warrantyregarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lienthereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable tothe Lenders for any failure to monitor or maintain any portion of the Collateral.

(c) The Administrative Agent shall have no liability for losses arising from (i) any cause beyond its control, (ii) any delay, error,omission or default of any mail, telegraph, cable or wireless agency or operator, or (iii) the acts or edicts of any government or governmentalagency or other group or entity exercising governmental powers. The Administrative Agent shall not be responsible for any special, exemplary,punitive or consequential damages.

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(d) The Administrative Agent shall not be responsible for the preparation or filing of any UCC financing statements or thecorrectness of any financing statements filed in connection with this Agreement or the validity or perfection of any lien or security interestcreated pursuant to this Agreement or the other Loan Documents.

(e) The Administrative Agent shall not be liable for interest on any money received by it except as the Administrative Agent mayagree in writing with the Borrower. The Administrative Agent shall not be required to expend or risk its own funds in the performance of itsduties hereunder. For the avoidance of doubt, all of the Administrative Agent’s rights, protections and immunities provided herein shall applyto the Administrative Agent for any actions taken or omitted to be taken under any Loan Documents and any other related agreements in any ofits capacities. All protections provided herein shall apply to U.S. Bank National Association in its various capacities hereunder.

(f) It is expressly agreed and acknowledged that the Administrative Agent is not guaranteeing performance of or assuming anyliability for the obligations of the other parties hereto or any parties to the Collateral.

(g) If, in performing its duties under this Agreement, the Administrative Agent is required to decide between alternative courses ofaction, the Administrative Agent may request written instructions from the Required Lenders as to the course of action desired by it. If theAdministrative Agent does not receive such instructions within three Business Days after it has requested them, the Administrative Agent may,but shall be under no duty to, take or refrain from taking any such courses of action. The Administrative Agent shall act in accordance withinstructions received after such three-Business Day period except to the extent it has already taken, or committed itself to take actioninconsistent with such instructions.

(h) The Administrative Agent shall have no liability for any failure, inability or unwillingness on the part of any Lender or theBorrower to provide accurate and complete information on a timely basis to the Administrative Agent, or otherwise on the part of any suchparty to comply with the terms of this Agreement, and shall have no liability for any inaccuracy or error in the performance or observance onthe Administrative Agent’s part of any of its duties hereunder that is caused by or results from any such inaccurate, incomplete or untimelyinformation received by it, or other failure on the part of any such other party to comply with the terms hereof.

ARTICLE X MISCELLANEOUS

Section 10.01. Amendments, Etc. No amendment or waiver of any provision of this Agreement or any other Loan Document, and noconsent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the RequiredLenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each suchwaiver or consent

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shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment,waiver or consent shall:

(a) waive any condition set forth in Section 4.01 or Section 4.02 without the written consent of each Lender;

(b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) withoutthe written consent of such Lender;

(c) postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayments)of principal, interest, fees or other amounts due to any Lender without the written consent of such Lender;

(d) subject to Section 10.06(b)(vii), reduce the principal of, or the rate of interest specified herein on, any Loan, or (subject toclause (ii) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document withoutthe written consent of each Lender entitled to such amount; provided, however, that only the consent of the Required Lenders shall benecessary (i) to amend the definition of “Default Rate” or to waive any obligation of the Borrower to pay interest at the Default Rate or (ii) toamend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate ofinterest on any Loan or to reduce any fee payable hereunder;

(e) change Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consentof each Lender;

(f) change any provision of this Section 10.01 or the definition of “Required Lenders” or any other provision hereof specifying thenumber or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant anyconsent hereunder without the written consent of each Lender;

(g) release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent ofeach Lender; or

(h) amend or modify the Superpriority Claim status of the Lenders or the Administrative Agent under the Orders or under any LoanDocument or release all or substantially all of the value of the Guaranty, without the written consent of each Lender, except to the extent therelease of any Subsidiary from the Guaranty is permitted pursuant to Section 9.10 (in which case such release may be made by theAdministrative Agent acting alone);

and provided, further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition tothe Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document and (ii)the Fee Letter may be amended, or rights or privileges thereunder

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waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have anyright to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its termsrequires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than DefaultingLenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and(y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects anyDefaulting Lender disproportionately adversely relative to the other affected Lenders shall require the consent of such Defaulting Lender.

Notwithstanding anything to the contrary herein the Administrative Agent may, at the direction of the Required Lenders, with the priorwritten consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure anyambiguity, omission, mistake, defect or inconsistency.

If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requiresthe consent of each Lender and that has been approved by the Required Lenders, the Borrower may replace such Non-Consenting Lender inaccordance with Section 10.13; provided that such amendment, waiver, consent or release can be effected as a result of the assignmentcontemplated by such Section (together with all other such assignments required by the Borrower to be made pursuant to this paragraph).

Section 10.02. Notices; Effectiveness; Electronic Communications.

(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (andexcept as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be deliveredby hand or overnight courier service, mailed by certified or registered mail or sent by fax transmission or e-mail transmission as follows, and allnotices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, asfollows:

(i) if to the Borrower, any other Loan Party or the Administrative Agent, to the address, fax number, e-mail address ortelephone number specified for such Person on Schedule 10.02; and

(ii) if to any other Lender, to the address, fax number, e-mail address or telephone number specified in its AdministrativeQuestionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its AdministrativeQuestionnaire then in effect for the delivery of notices that may contain material non-public information relating to the Borrower).

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemedto have been given when received;

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notices and other communications sent by fax transmission shall be deemed to have been given when sent (except that, if not given duringnormal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for therecipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below shallbe effective as provided in such subsection (b).

(b) Electronic Communications. Notices and other communications to the Administrative Agent and the Lenders hereunder may bedelivered or furnished by electronic communication (including e-mail, FPML messaging and Internet or intranet websites) pursuant toprocedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II ifsuch Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. TheAdministrative Agent or the Borrower may each, in its discretion, agree to accept notices and other communications to it hereunder byelectronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particularnotices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemedreceived upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, asavailable, return e-mail or other written acknowledgement) and (ii) notices and other communications posted to an Internet or intranet websiteshall be deemed received by the intended recipient upon the sender’s receipt of an acknowledgement from the intended recipient (such as bythe “return receipt requested” function, as available, return e-mail address or other written acknowledgement) indicating that such notice orcommunication is available and identifying the website address therefor; provided that for both clauses (i) and (ii), if such notice or othercommunication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to havebeen sent at the opening of business on the next Business Day for the recipient.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINEDBELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACYOF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWERMATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OFMERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS ORFREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THEBORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the“Agent Parties”) have any liability to the Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of anykind (whether in tort, contract or

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otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of Borrower Materials or notices through the Platform, anyother electronic platform or electronic messaging services, or through the Internet.

(d) Change of Address, Etc. The Administrative Agent or any Loan Party may change its address, fax number or telephone numberor e-mail address for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change itsaddress, fax number or telephone number or e-mail address for notices and other communications hereunder by notice to the Borrower and theAdministrative Agent. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the AdministrativeAgent has on record (i) an effective address, contact name, telephone number, fax number and e-mail address to which notices and othercommunications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause not less thanone individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on thecontent declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’scompliance procedures and applicable Law, including United States federal and state securities Laws, to make reference to Borrower Materialsthat are not made available through the “Public Side Information” portion of the Platform and that may contain material non-publicinformation with respect to the Borrower or its securities for purposes of United States federal or state securities laws.

(e) Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act uponany notices (including telephonic or electronic notices, Loan Notices and Notice of Loan Prepayment) purportedly given by or on behalf of theBorrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any otherform of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrowershall indemnify the Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilitiesresulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to andother telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties heretohereby consents to such recording.

Section 10.03. No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender or the Administrative Agent to exercise,and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shalloperate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under any other LoanDocument preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies,powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights,remedies, powers and privileges provided by law.

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Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedieshereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions andproceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent inaccordance with Section 8.02 for the benefit of all the Lenders; provided, however, that the foregoing shall not prohibit (a) the AdministrativeAgent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent)hereunder and under the other Loan Documents, (b) any Lender from exercising setoff rights in accordance with Section 10.08 (subject to theterms of Section 2.13), or (c) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency ofa proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting asAdministrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed tothe Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding provisoand subject to Section 2.13, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and asauthorized by the Required Lenders.

Section 10.04. Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Loan Parties shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agentand the Lenders and their Affiliates (including (x) the reasonable fees, charges and disbursements of counsel for each of the AdministrativeAgent and the Lenders and (y) the reasonable fees, charges and disbursements relating to financial diligence and third-party appraisers retainedby or on behalf of the Administrative Agent and the Lenders), in connection with the syndication of the credit facilities provided for herein, thepreparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments,modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall beconsummated) and (ii) all out-of-pocket expenses incurred by each of the Administrative Agent and any Lender (including (x) the fees,charges and disbursements of any counsel for each of the Administrative Agent and any Lender and (y) the reasonable fees, charges anddisbursements relating to financial diligence and third-party appraisers retained by or on behalf of the Administrative Agent and the Lenders),in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, includingits rights under this Section, or (B) in connection with Loans made hereunder, including all such out-of-pocket expenses incurred during anyworkout, restructuring or negotiations in respect of such Loans.

(b) Indemnification by the Borrower. Each Loan Party shall indemnify the Administrative Agent (and any sub-agent thereof) andeach Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”)

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against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees,charges and disbursements of any counsel or financial advisors for any Indemnitee) incurred by any Indemnitee or asserted against anyIndemnitee by any Person (including the Borrower or any other Loan Party) arising out of, in connection with, or as a result of (i) the executionor delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance bythe parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby orthereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of thisAgreement and the other Loan Documents (including in respect of any matters addressed in Section 3.01), (ii) any Loan or the use or proposeduse of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property currently orformerly owned, leased or operated by the Loan Parties or any of their respective Subsidiaries, or any Environmental Liability related in anyway to the Loan Parties or any of their respective Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceedingrelating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or anyother Loan Party or any of the Borrower’s or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemniteeis a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THECOMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; provided that such indemnity shall not, as to anyIndemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court ofcompetent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of suchIndemnitee, (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith of suchIndemnitee’s obligations hereunder or under any other Loan Document, if the Borrower or such Loan Party has obtained a final andnonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction or (z) arose out of any claim, actions,suits, inquiries, litigation, investigation or proceeding that does not involve an act or omission of the Borrower, any other Loan Party or any oftheir Affiliates and that is brought solely by an Indemnitee against another Indemnitee; provided that the Administrative Agent shall remainindemnified in such capacities.

(c) Reimbursement by Lenders. To the extent that any Loan Party for any reason fails to indefeasibly pay any amount requiredunder subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof) or any Related Party of theAdministrative Agent, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent) or such Related Party, as thecase may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity paymentis sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, asthe case may be, was incurred by or asserted against the Administrative Agent

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(or any such sub-agent) in its capacity as such or against any Related Party of the Administrative Agent acting for the Administrative Agent (orany such sub-agent). The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, no Loan Party shall assert, and herebywaives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed todirect or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement orinstrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemniteereferred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or othermaterials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other informationtransmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby otherthan for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final andnonappealable judgment of a court of competent jurisdiction.

(e) Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.

(f) Survival. The agreements in this Section and the indemnity provisions of Section 10.02(e) shall survive the resignation of theAdministrative Agent, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction ordischarge of all the other Obligations.

(g) Waiver. The Borrower acknowledges and agrees that if payment of the Obligations are accelerated or the Loans and otherObligations otherwise become due prior to the Maturity Date, in each case, in respect of any Event of Default (including, but not limited to,upon the occurrence of a bankruptcy or insolvency event (including the acceleration of claims by operation of law)), the Exit Fee will also bedue and payable as though the Loans were redeemed and shall constitute part of the Obligations, by mutual agreement of the parties. TheBorrower agrees that the Exit Fee is reasonable under the circumstances currently existing. The Exit Fee shall also be payable in the event theLoans are satisfied or released by foreclosure (whether by power of judicial proceeding), deed in lieu of foreclosure or by any other means.THE BORROWER EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANYPRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING EXITFEE IN CONNECTION WITH ANY SUCH ACCELERATION. The Borrower expressly agrees (to the fullest extent it may lawfully do so)that: (a) the Exit Fee is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented bycounsel; (b) the Exit Fee shall be payable notwithstanding the then

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prevailing market rates at the time payment is made; (c) there has been a course of conduct between holders and the Borrower giving specificconsideration in this transaction for such agreement to pay the Exit Fee; and (d) the Borrower shall be estopped hereafter from claimingdifferently than as agreed to in this paragraph. The Borrower expressly acknowledges that its agreement to pay the Exit Fee to Lenders asherein described is a material inducement to Lenders to make the Loans.

Section 10.05. Payments Set Aside. To the extent that any payment by or on behalf of the Borrower or any other Loan Party is madeto the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or theproceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (includingpursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or anyother party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligationor part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made orsuch setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share(without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of suchdemand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations ofthe Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of thisAgreement.

Section 10.06. Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement and the other Loan Documents shall be binding upon andinure to the benefit of the parties hereto and thereto and their respective successors and assigns permitted hereby, except that the Borrower maynot assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent andeach Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordancewith the provisions of Section 10.06(b), (ii) by way of participation in accordance with the provisions of Section 10.06(d), or (iii) by way ofpledge or assignment of a security interest subject to the restrictions of Section 10.06(e) (and any other attempted assignment or transfer by anyparty hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other thanthe parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Sectionand, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal orequitable right, remedy or claim under or by reason of this Agreement.

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(b) Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights andobligations under this Agreement (including all or a portion of its Commitment(s) and the Loans at the time owing to it); provided that anysuch assignment shall be subject to the following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and theLoans at the time owing to it or contemporaneous assignments to related Approved Funds that equal not less than the amountspecified in paragraph (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of aLender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment(which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principaloutstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date theAssignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” isspecified in the Assignment and Assumption, as of the Trade Date, shall not be less than $1,000,000, unless the AdministrativeAgent otherwise consents (such consent not to be unreasonably withheld or delayed).

(ii) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all theassigning Lender’s rights and obligations under this Agreement and the other Loan Documents with respect to the Loans or theCommitment assigned.

(iii) Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required forany assignment of unfunded Commitments unless (1) an Event of Default has occurred and is continuing at the time of suchassignment or (2) such assignment is to a Lender, an Affiliate of a Lender, a GS Approved Party or an Approved Fund or anyPerson disclosed to the Borrower by the Lender prior to the Closing Date; provided that the Borrower shall be deemed to haveconsented to any such assignment (for which its consent is required) unless it shall object thereto by written notice to theAdministrative Agent within five (5) Business Days after having received notice thereof;

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provided further that the Borrower shall have no consent rights over any assignment of Loans; and

(B) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall berequired if such assignment is to a Person that is not a Lender, an Affiliate of a Lender, an Approved Fund with respect to aLender or a GS Approved Party.

(iv) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent anAssignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that theAdministrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. Theassignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v) No Assignment to Certain Persons. No such assignment shall be made (A) to the Borrower or any of the Borrower’sAffiliates or Subsidiaries, or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lenderhereunder, would constitute any of the foregoing Persons described in this clause (B), or (C) to a natural person.

(vi) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lenderhereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties tothe assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distributionthereof as appropriate (which may be outright payment, purchases by the assignee of participations or sub-participations, or othercompensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share ofLoans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor herebyirrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the AdministrativeAgent or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loansin accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligationsof any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of thisparagraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until suchcompliance occurs.

(vii) Assignments to Existing Noteholder Lenders. Notwithstanding anything in this Agreement to the contrary:

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(A) Existing Noteholder Lenders will not attend or participate in meetings attended solely by the Lenders and theAdministrative Agent;

(B) (A) for purposes of any consent to any amendment, waiver or modification of, or any action under, and for thepurpose of any direction to the Administrative Agent or any Lender to undertake any action (or refrain from taking any action)under, this Agreement or any other Loan Document, each Existing Noteholder Lender will be deemed to have consented in thesame proportion as the Lenders that are not Existing Noteholder Lenders consented to such matter, unless such matter (x)adversely affects such Existing Noteholder Lender more than other Lenders in any material respect, (y) modifies or extends theMaturity Date, the commitment termination date or date fixed for final payment of principal, in each case applicable to suchExisting Noteholder Lender to be a date that is later than the twelve (12) month anniversary of the Closing Date or (z) increasesthe commitment of or reduces the principal of Loans of such Existing Noteholder Lender or modifies the rate of interest on anyLoan of such Existing Noteholder Lender and (B) each Existing Noteholder Lender hereby irrevocably appoints theAdministrative Agent (such appointment being coupled with an interest) as such Existing Noteholder Lender’s attorney-in-fact,with full authority in the place and stead of such Existing Noteholder Lender and in the name of such Existing Noteholder Lender(solely in respect of Loans therein and not in respect of any other claim or status such Existing Noteholder Lender may otherwisehave), from time to time in the Administrative Agent’s discretion to take any action and to execute any instrument that theAdministrative Agent may deem reasonably necessary or appropriate to carry out the provisions of this clause (B);

(C) the Existing Noteholder Lenders will not be entitled to bring actions against the Administrative Agent, in its role assuch, or receive advice of counsel or other advisors to the Administrative Agent or any other Lenders or challenge the attorneyclient privilege of their respective counsel; and

(D) each Existing Noteholder Lender agrees to provide all information relating to itself and its Affiliates as the Borroweror the Administrative Agent may reasonably request in connection with the Borrower’s motion to the Bankruptcy Court seekingapproval by the Bankruptcy Court of the Facility under the Bankruptcy Code.

( v i i i ) Assignment Triggering Events . Upon the occurrence of any Assignment Triggering Event, each applicable ExistingNoteholder Lender and, solely with respect to an event described in clause (i) of the definition thereof, any other Existing NoteholderLender specified by the Required Lenders shall, at the request of the Required Lenders in their sole discretion, assign its portion of theLoans at par and any unfunded Commitments to, at the election of the Required

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Lenders in their sole discretion, those Lenders who are Prepetition Term Loan Lenders (or any Affiliate thereof) and/or any otherEligible Assignee, subject to Section 10.06(b)(iii).

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after theeffective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of theinterest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigningLender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under thisAgreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under thisAgreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04 and 10.04 withrespect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwiseexpressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any partyhereunder arising from that Lender’s having been a Defaulting Lender. Upon request, the Borrower (at its expense) shall execute and deliver aNote to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply withthis subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations inaccordance with Section 10.06(d).

(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower (and such agency being solely forU.S. Tax purposes), shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it (or theequivalent thereof in electronic form) and a register for the recordation of the names and addresses of the Lenders, and the Commitments of,and principal amounts of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in theRegister shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whosename is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding noticeto the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to timeupon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sellparticipations to any Person (other than a natural Person, a Defaulting Lender or the Borrower or any of the Borrower’s Affiliates orSubsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or aportion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remainunchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the

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Borrower, the Administrative Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with suchLender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity underSection 10.04(c) without regard to the existence of any participations.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the soleright to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that suchagreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver orother modification described in the first proviso to Section 10.01 (other than those in the proviso in Section 10.01(d)) that affects suchParticipant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01 and 3.04 (subject to the requirementsand limitations therein, including the requirements under Section 3.01(e) (it being understood that the documentation required under Section3.01(e) shall be delivered to the Lender who sells the participation)) to the same extent as if it were a Lender and had acquired its interest byassignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06and 10.13 as if it were an assignee under paragraph (b) of this Section and (B) shall not be entitled to receive any greater payment underSections 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation would have beenentitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after theParticipant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to usereasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 3.06 with respect to any Participant. To the extentpermitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender; provided that suchParticipant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for thispurpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and theprincipal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the“Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (includingthe identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its otherobligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment,loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries inthe Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in theParticipant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For theavoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining aParticipant Register.

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(e) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under thisAgreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to aFederal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substituteany such pledgee or assignee for such Lender as a party hereto.

Section 10.07. Treatment of Certain Information; Confidentiality. Each of the Administrative Agent and the Lenders agrees tomaintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its andits Affiliates’ respective Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of theconfidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by anyregulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as theNational Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similarlegal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document orany action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f)subject to an agreement containing provisions substantially the same as those of this Section, (i) to any assignee of or Participant in, or anyprospective assignee of or Participant in, any of its rights or obligations under this Agreement, (ii) to any actual or prospective counterparty (orits Related Parties) to any swap or derivative transaction relating to the Borrower and its obligations, or (iii) on a confidential basis to (A) anyrating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities provided hereunder, (B) the provider of anyPlatform or other electronic delivery service used by the Administrative Agent to deliver Borrower Materials or notices to the Lenders or (C)the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifierswith respect to the credit facilities provided hereunder, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomespublicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender or any oftheir respective Affiliates on a nonconfidential basis from a source other than the Borrower. For purposes of this Section, “Information”means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respectivebusinesses, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior todisclosure by the Borrower or any Subsidiary, provided that, in the case of information received from the Borrower or any Subsidiary after thedate hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality ofInformation as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the samedegree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

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Each of the Administrative Agent and the Lenders acknowledges that (a) the Information may include material non-public informationconcerning the Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United Statesfederal and state securities Laws.

The Loan Parties and their Affiliates agree that they will not in the future issue any press releases or other public disclosure using thename of the Administrative Agent or any Lender or their respective Affiliates or referring to this Agreement or any of the Loan Documentswithout the prior written consent of the Lenders, unless (and only to the extent that) the Loan Parties or such Affiliate is required to do so underlaw and, in such event, the Loan Parties or such Affiliate will, in each case to the extent permitted by law, prior to issuance thereof, providesuch press release or other public disclosure (including any earnings reports) to the Lenders and incorporate any reasonable comments from theLenders to such press release or other public disclosure (including any earnings reports).

The Loan Parties consent to the publication by the Administrative Agent or any Lender of customary advertising material relating to thetransactions contemplated hereby using the name, product photographs, logo or trademark of the Loan Parties.

Section 10.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its respectiveAffiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any andall deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatevercurrency) at any time owing by such Lender or any such Affiliate to or for the credit or the account of the Borrower or any other Loan Partyagainst any and all of the obligations of the Borrower or any other Loan Party now or hereafter existing under this Agreement or any otherLoan Document to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement or any otherLoan Document and although such obligations of the Borrower or any other Loan Party may be contingent or unmatured or are owed to abranch or office of such Lender different from the branch or office holding such deposit or obligated on such indebtedness; provided, that in theevent that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to theAdministrative Agent for further application in accordance with the provisions of Section 2.16 and, pending such payment, shall be segregatedby such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and (y)the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing tosuch Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender and its respective Affiliates under this Sectionare in addition to other rights and remedies (including other rights of setoff) that such Lender or its respective Affiliates may have. Each Lendera agrees to notify the Borrower and the

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Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity ofsuch setoff and application.

Section 10.09. Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paidor agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the“Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excessinterest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. In determining whetherthe interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to theextent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b)exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amountof interest throughout the contemplated term of the Obligations hereunder.

Section 10.10. Counterparts; Integration; Effectiveness. This Agreement and each of the other Loan Documents may be executed incounterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when takentogether shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the partiesrelating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subjectmatter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by theAdministrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear thesignatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement or any other LoanDocument, or any certificate delivered thereunder, by fax transmission or e-mail transmission (e.g., “pdf” or “tif”) shall be effective as deliveryof a manually executed counterpart of this Agreement or such other Loan Document or certificate.

Section 10.11. Survival of Representations and Warranties. All representations and warranties made hereunder and in any other LoanDocument or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution anddelivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and eachLender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that theAdministrative Agent or any Lender may have had notice or knowledge of any Default at the time of the making of any Loan, and shallcontinue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.

Section 10.12. Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid orunenforceable, (a) the legality, validity and

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enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b)the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions theeconomic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in aparticular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoingprovisions of this Section 10.12, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lendersshall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent then such provisions shall be deemed to be ineffect only to the extent not so limited.

Section 10.13. Replacement of Lenders. If the Borrower is entitled to replace a Lender pursuant to the provisions of Section 3.06, or ifany Lender is a Defaulting Lender or a Non-Consenting Lender or if any other circumstance exists hereunder that gives the Borrower the rightto replace a Lender as a party hereto, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the AdministrativeAgent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, andconsents required by, Section 10.06), all of its interests, rights (other than its existing rights to payments pursuant to Sections 3.01 and 3.04) andobligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assigneemay be another Lender, if a Lender accepts such assignment), provided that:

(a) the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 10.06(b);

(b) such Lender shall have received payment of an amount equal to 100% of the outstanding principal of its Loans, accrued interestthereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents from the assignee (to the extent ofsuch outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be madepursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter;

(d) such assignment does not conflict with applicable Laws; and

(e) in the case of an assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall haveconsented to the applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender orotherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

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Section 10.14. Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT, AS TO ANY OTHERLOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OFACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THISAGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SETFORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK AND (TO THE EXTENT APPLICABLE) THEBANKRUPTCY CODE.

(b) SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES THATIT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAWOR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANYLENDER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHERLOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THEBANKRUPTCY COURT AND, IF THE BANKRUPTCY COURT DOES NOT HAVE (OR ABSTAINS FROM) JURISDICTION THECOURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OFTHE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THEPARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS ANDAGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD ANDDETERMINED IN THE BANKRUPTCY COURT AND, IF THE BANKRUPTCY COURT DOES NOT HAVE (OR ABSTAINS FROM)JURISDICTION, SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, INSUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION,LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ONTHE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHERLOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISEHAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTAGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

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(c) WAIVER OF VENUE. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLESTEXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYINGOF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOANDOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBYIRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF ANINCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THEMANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANYPARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW

Section 10.15. Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENTPERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDINGDIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT ORTHE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHERTHEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHERPERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OFLITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIESHERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONGOTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

Section 10.16. No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby(including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borroweracknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a) (i) any arranging and/or other activities or servicesregarding this Agreement (and the Loan Documents) provided by the Administrative Agent and any Affiliate thereof, and the Lenders arearm’s-length commercial transactions between the Borrower, each other Loan Party and their respective Affiliates, on the one hand, and theAdministrative Agent (and as applicable, its Affiliates) and the Lenders and their Affiliates (collectively, solely for purposes of this Section,the “Lenders”), on the other hand, (ii) each of the Borrower and the other Loan Parties has consulted its own legal, accounting, regulatory andtax advisors to the extent it has deemed appropriate, and (iii) the Borrower and each other Loan Party is capable of evaluating, and understandsand accepts, the terms, risks and

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conditions of the transactions contemplated hereby and by the other Loan Documents; (b) (i) the Administrative Agent and its Affiliates andeach Lender each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, isnot, and will not be acting as an advisor, agent or fiduciary, for the Borrower, any other Loan Party or any of their respective Affiliates, or anyother Person and (ii) neither the Administrative Agent, any of its Affiliates nor any Lender or its Affiliates has any obligation to the Borrower,any other Loan Party or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligationsexpressly set forth herein and in the other Loan Documents; and (c) the Administrative Agent and its Affiliates and the Lenders and theirAffiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower, the other Loan Partiesand their respective Affiliates, and neither the Administrative Agent, any of its Affiliates nor any Lender or any of its Affiliates has anyobligation to disclose any of such interests to the Borrower, any other Loan Party or any of their respective Affiliates. To the fullest extentpermitted by law, each of the Borrower and each other Loan Party hereby waives and releases any claims that it may have against theAdministrative Agent, any of its Affiliates, or any Lender or any of its Affiliates with respect to any breach or alleged breach of agency orfiduciary duty in connection with any aspect of any transactions contemplated hereby.

Section 10.17. Electronic Execution of Assignments and Certain Other Documents. The words “delivery,” “execute,” “execution,”“signed,” “signature,” and words of like import in any Loan Document or any other document executed in connection herewith shall bedeemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approvedby the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity orenforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case maybe, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act,the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act;provided that notwithstanding anything contained herein to the contrary neither the Administrative Agent nor any Lender is under anyobligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent or suchLender pursuant to procedures approved by it and provided further without limiting the foregoing, upon the request of any party, any electronicsignature shall be promptly followed by such manually executed counterpart.

Section 10.18. USA PATRIOT Act. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (foritself and not on behalf of any Lender) hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub.L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies each LoanParty, which information includes the name and address of each Loan Party and other

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information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the Act.The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other informationthat the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer”and anti-money laundering rules and regulations, including the Act.

Section 10.19. [Reserved].

Section 10.20. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary inany Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges thatany liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to thewrite-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arisinghereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, ifapplicable:

(i) a reduction in full or in part or cancellation of any suchliability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA FinancialInstitution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and thatsuch shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liabilityunder this Agreement or any other Loan Document; or

(iii)the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers ofany EEA Resolution Authority.

Section 10.21. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THEFINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORALAGREEMENTS AMONG THE

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PARTIES. TO THE EXTENT THAT ANY PROVISION HEREIN IS INCONSISTENT WITH ANY TERM OF THE ORDERS, THEORDERS SHALL CONTROL.

ARTICLE XI GUARANTY

Section 11.01. Each Guarantor hereby absolutely and unconditionally guarantees, as a guaranty of payment and not as a guaranty ofcollection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, andincluding any amounts which would become due but for the operation of an automatic stay under any Debtor Relief Law, and at all timesthereafter, of any and all existing and future indebtedness and liabilities of every kind, nature and character, direct or indirect, absolute orcontingent, liquidated or unliquidated, voluntary or involuntary and whether for principal, interest, premiums, fees, indemnities, damages,costs, expenses or otherwise, owing by the Borrower or any other Loan Party to the Administrative Agent and the Lenders (the“Beneficiaries”) arising under, pursuant to, or in connection with this Agreement or under any other Loan Document (including all renewals,extensions, amendments and other modifications thereof and, as provided in the Loan Documents, all costs, attorneys’ fees and expensesincurred by Administrative Agent or any Beneficiary in connection with the collection or enforcement thereof), and whether direct or indirect(including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and includingobligations, liabilities, and indebtedness arising or accruing after the commencement of any proceeding under any Debtor Relief Laws withrespect to any Borrower or any Guarantor or which would have arisen or accrued but for the commencement of such proceeding and includingall Obligations, liabilities and indebtedness arising from any extensions or credit under or in connection with any Loan Document from time totime, regardless of whether such interest and fees are allowed claims in such proceeding (collectively, the “Guaranteed Obligations”). TheAdministrative Agent’s books and records showing the amount of the Guaranteed Obligations shall be admissible in evidence in any action orproceeding, and shall be binding upon the Guarantors and conclusive, absent manifest error, for the purpose of establishing the amount of theGuaranteed Obligations. This Guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the GuaranteedObligations or any instrument or agreement evidencing any Guaranteed Obligations, or by the existence, validity, enforceability, perfection,non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Guaranteed Obligations which might otherwiseconstitute a defense to the obligations of any Guarantor under this Guaranty other than the indefeasible payment in full of the GuaranteedObligations, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to any or allof the foregoing. Unless otherwise agreed by the Administrative Agent (at the direction of the Required Lenders) and the Guarantors inwriting, this Guaranty is not intended to supersede or otherwise affect any other guaranty now or hereafter given by any Loan Party for thebenefit of the Administrative Agent or any other Beneficiary or any term or provision thereof.

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Section 11.02. No Setoff or Deductions; Taxes; Payments. Each Guarantor represents and warrants that it is organized and resident inthe United States of America. Each Guarantor shall make all payments hereunder without condition or deduction for any counterclaim,defense, recoupment, or setoff. Any and all payments by each Guarantor hereunder shall be made in accordance with the requirements ofSection 3.01 and each Guarantor shall comply with the requirements of Section 3.01, in each case as if each reference to the Borrower thereinwere a reference to such Guarantor, and regardless of whether this Agreement remains in effect. The obligations of each Guarantor under thisSection 11.02 shall survive the payment in full of the Guaranteed Obligations and termination of this Guaranty.

Section 11.03. Rights of Administrative Agent and Lenders. Each Guarantor consents and agrees that the Administrative Agent andthe other Beneficiaries may, at any time and from time to time, without notice or demand, and without affecting the enforceability orcontinuing effectiveness hereof: (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or theterms of the Guaranteed Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwisedispose of any security for the payment of this Guaranty or any Guaranteed Obligations; (c) apply such security and direct the order or mannerof sale thereof as the Administrative Agent, at the direction of the Required Lenders in their sole discretion may determine; and (d) release orsubstitute one or more of any endorsers or other guarantors of any of the Guaranteed Obligations. Without limiting the generality of theforegoing, each Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks ofsuch Guarantor under this Guaranty or which, but for this provision, might operate as a discharge of such Guarantor.

Section 11.04. Certain Waivers. Each Guarantor waives (a) any defense arising by reason of any disability or other defense of theBorrower or any other Guarantor, or the cessation from any cause whatsoever (including any act or omission of any Beneficiary) of theliability of the Borrower other than due to the indefeasible payment in full in cash of the Guaranteed Obligations; (b) any defense based on anyclaim that such Guarantor’s obligations exceed or are more burdensome than those of the Borrower or any other guarantor; (c) any right torequire the Administrative Agent or any other Beneficiary to proceed against the Borrower, proceed against or exhaust any security for theGuaranteed Obligations, or pursue any other remedy in the Administrative Agent’s or any other Beneficiary’s power whatsoever; (d) anybenefit of and any right to participate in any security now or hereafter held by the Administrative Agent or any other Beneficiary; and (e) to thefullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by applicable law limiting theliability of or exonerating guarantors or sureties. Each Guarantor expressly waives, to the maximum extent permitted by applicable law, allsetoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests,notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the GuaranteedObligations, and all notices of

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acceptance of the terms set forth in this Guaranty or of the existence, creation or incurrence of new or additional Guaranteed Obligations.

Section 11.05. Obligations Independent. The obligations of each Guarantor hereunder are those of primary obligor, and not merely assurety, and are separate and distinct from the Guaranteed Obligations of the Borrower and the obligations of any other guarantor, and aseparate action may be brought against each Guarantor to enforce this Guaranty whether or not the Borrower, any other Guarantor, or any otherperson or entity is joined as a party.

Section 11.06. Subrogation. (a) No Guarantor shall exercise any right of subrogation, contribution, indemnity, reimbursement orsimilar rights with respect to any payments it makes under this Guaranty (including with respect to all “claims” (as defined in section 101(5) ofthe Bankruptcy Code)) against Borrower or any other Guarantor arising in connection with, or any Collateral securing the GuaranteedObligations (including rights of subrogation (whether contractual, under section 509 of the Bankruptcy Code or otherwise) contribution, andthe like) until all of the Guaranteed Obligations and any amounts payable under this Guaranty have been indefeasibly paid and performed infull and any commitments of the Beneficiaries or the facility provided by the Beneficiaries with respect to the Guaranteed Obligations areterminated. If any amounts are paid to a Guarantor in violation of the foregoing limitation (whether contractual, under section 509 of theBankruptcy Code or otherwise), then such amounts shall be held in trust for the benefit of the Beneficiaries and shall forthwith be paid to theAdministrative Agent for the benefit of the Beneficiaries to reduce the amount of the Guaranteed Obligations, whether matured or unmatured.

Section 11.01. (b) The Guarantors hereby agree, as among themselves, that if any Guarantor or any other guarantor of the GuaranteedObligations shall become an Excess Funding Guarantor (as defined below) (but subject to the succeeding provisions of this Section 11.06), topay to such Excess Funding Guarantor an amount equal to such Guarantor’s Pro Rata Share (as defined below and determined, for this purpose,without reference to the properties, assets, liabilities and debts of such Excess Funding Guarantor) of such Excess Payment (as defined below).The payment obligation of any Guarantor to any Excess Funding Guarantor under this Section 11.06(b) shall be subordinate and subject in rightof payment to the prior payment in full of the obligations of such Guarantor under the other provisions of this Guaranty, and such ExcessFunding Guarantor shall not exercise any right or remedy with respect to such excess except as provided in Section 11.06(a) or in any similarprovision of any other guaranty of the Guaranteed Obligations. For purposes hereof, (a) “Excess Funding Guarantor” shall mean, in respectof any obligations arising under the other provisions of this Guaranty and any similar provisions of any other guaranty of the GuaranteedObligations (hereafter, the “Subject Obligations”), a Guarantor or any other guarantor of the Guaranteed Obligations that has paid an amountin excess of its Pro Rata Share of the Subject Obligations; (b) “Excess Payment” shall mean, in respect of any Subject Obligations, the amountpaid by an Excess Funding Guarantor in excess of its Pro Rata

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Share of such Subject Obligations; and (c) “Pro Rata Share”, for purposes of this Section 11.06(b) shall mean, for any Guarantor or any otherguarantor of the Guaranteed Obligations, the ratio (expressed as a percentage) of (x) the amount by which the aggregate present fair saleablevalue of all of its assets and properties exceeds the amount of all debts and liabilities of such guarantor (including contingent, subordinated,unmatured, and unliquidated liabilities, but excluding the obligations of such guarantor under this Guaranty or the other applicable guaranty) to(y) the amount by which the aggregate present fair saleable value of all assets and other properties of the Borrower, all of the Guarantors andall of the other guarantors of the Guaranteed Obligations exceeds the amount of all of the debts and liabilities (including contingent,subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of the Borrower under this Agreement, the Guarantorshereunder and any other guarantors of the Guaranteed Obligations under the applicable guaranties) of the Borrower, all of the Guarantors andall of the other guarantors of the Guaranteed Obligations, all as of the Closing Date (if any Guarantor becomes a party hereto (or any otherguarantor of the Guaranteed Obligations becomes a party to the applicable guaranty) subsequent to the Closing Date, then for purposes of thisSection 11.06(b) such subsequent guarantor shall be deemed to have been a guarantor of the Guaranteed Obligations as of the Closing Date andthe information pertaining to, and only pertaining to, such guarantor as of the date such guarantor became a guarantor of the GuaranteedObligations shall be deemed true as of the Closing Date).

Section 11.07. Termination; Reinstatement. (a) This Guaranty is a continuing and irrevocable guaranty of all Guaranteed Obligationsnow or hereafter existing and shall remain in full force and effect; provided that the Guarantors shall be released from their respectiveguarantee obligations and other obligations under this Guaranty as follows: (a) with respect to all Guarantors, upon the termination of theAggregate Commitments and indefeasible payment in full in cash of all Guaranteed Obligations (other than contingent indemnificationobligations), (b) with respect to any Guarantor that ceases to be a Subsidiary as a result of a transaction permitted under this Agreement,automatically upon such Guarantor so ceasing to be a Subsidiary, and (c) with respect to any other release of a Guarantor, upon approval,authorization or ratification in writing in accordance with Section 10.01.

Section 11.02. (b) Notwithstanding the foregoing, this Guaranty shall continue in full force and effect or be revived, as the case maybe, if any payment by or on behalf of the Borrower or any other Loan Party is made, or the Administrative Agent or any other Beneficiaryexercises its right of setoff, in respect of the Guaranteed Obligations and such payment or the proceeds of such setoff or any part thereof issubsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into bythe Administrative Agent (at the direction of the Required Lenders) or any other Beneficiary in its discretion) to be repaid to a trustee, receiveror any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, to the extent of such payment, all as if suchpayment had not been made or such setoff had not occurred and whether or not the Administrative Agent or any other

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Beneficiary is in possession of or has released this Guaranty and regardless of any prior revocation, rescission, termination or reduction. Theforegoing obligations of each Guarantor under paragraph (b) of this Section shall survive termination of this Guaranty.

Section 11.08. Subordination. All Subordinated Obligations (as defined below) of a Guarantor shall be subordinate and junior in rightof payment and collection to the payment and collection in full of all Guaranteed Obligations as described below:

(a) As used herein, the term “Subordinated Obligations” for a Guarantor means: (i) all present and future indebtedness, liabilities, andobligations of any kind owed to such Guarantor by the Borrower or any other Loan Party liable for the payment or performance of theGuaranteed Obligations, including debt obligations, equity obligations, and other contractual obligations requiring payments of any kind to bemade to such Guarantor and including any right of subrogation (including any statutory rights of subrogation under section 509 of theBankruptcy Code, 11 U.S.C. § 509, or under Chapter 43 of the Texas Civil Practice and Remedies Code), contribution, indemnification,reimbursement, exoneration, or any right to participate in any claim or remedy of any Beneficiary against the Borrower or any other Loan Partyliable for the payment or performance of the Guaranteed Obligations, or any collateral which the Administrative Agent now has or mayacquire, and (ii) any increases, extensions, and rearrangements of the foregoing obligations under any amendments, supplements, and othermodifications of the documents and agreements creating the foregoing obligations.

(b) Until all Guaranteed Obligations have been irrevocably paid in full in cash (and therefore the payment thereof is no longer subjectto being set aside or returned under the law), no Guarantor shall take any action to enforce payment of the Subordinated Obligations of suchGuarantor, but this standstill is not intended as a permanent waiver of the subrogation, contribution, indemnification, reimbursement,exoneration, participation, or other rights of such Guarantor.

(c) Following notice from the Administrative Agent to the Borrower that an Event of Default exists, unless otherwise consented inwriting by the Administrative Agent at the direction of the Required Lenders, no further payments shall be made on the SubordinatedObligations of any Guarantor, and all amounts due with respect to the Guaranteed Obligations shall be paid in full before any Guarantor shallbe entitled to collect or receive any payment with respect to the Subordinated Obligations of such Guarantor.

(d) Any lien, security interest, or assignment securing the repayment of the Subordinated Obligations of any Guarantor shall be fullysubordinate to any lien, security interest, or assignment in favor of the Administrative Agent which secures the Guaranteed Obligations. At therequest of the Administrative Agent (at the direction of the Required Lenders), each Guarantor will take any and all steps necessary to fullyevidence the subordination granted hereunder, including amending or terminating financing statements and executing and recordingsubordinations of liens.

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(e) This is an absolute and irrevocable agreement of subordination and the Administrative Agent may, at the direction of the RequiredLenders, without notice to any Guarantor, take any action described in this Agreement, this Guaranty or in any other Loan Document withoutimpairing or releasing the obligations of any Guarantor hereunder.

(f) No Guarantor shall assign or otherwise transfer to any other Person other than a Loan Party any interest in the SubordinatedObligations of such Guarantor without the prior written permission of the Lenders.

(g) If any amount shall be paid to any Guarantor in violation of this Section 11.08, such amount shall be held in trust for the benefit ofthe Administrative Agent on behalf of the Beneficiaries and immediately turned over to the Administrative Agent, with any necessaryendorsement, to be applied to the Guaranteed Obligations.

Section 11.09. Condition of Borrower. Each Guarantor acknowledges and agrees that it has the sole responsibility for, and hasadequate means of obtaining from the Borrower and any other guarantor such information concerning the financial condition, business andoperations of the Borrower and any such other guarantor as such Guarantor requires, and that neither the Administrative Agent nor any otherBeneficiary has any duty, and such Guarantor is not relying on the Administrative Agent or any other Beneficiary at any time, to disclose tosuch Guarantor any information relating to the business, operations or financial condition of the Borrower or any other guarantor (theGuarantor waiving any duty on the part of the Administrative Agent or any other Beneficiary to disclose such information and any defenserelating to the failure to provide the same).

Section 11.10. Covenant. Each Guarantor hereby agrees to take, or refrain from taking, as the case may be, each action that isnecessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action orrefrain from taking such action by such Guarantor or any of its Subsidiaries.

Section 11.11. Additional Guarantors. Any Subsidiary of the Borrower that is required pursuant to this Agreement to enter into aguaranty on substantially similar terms as those set forth herein after the date hereof shall become a Guarantor for all purposes of this Guarantyupon execution and delivery by such Subsidiary of a Security Agreement Supplement.

Section 11.12. Several Enforcement. This Guaranty shall apply to each Guarantor and may be enforced against each Guarantor as ifeach Guarantor had executed a separate agreement. Except as expressly set forth in this Guaranty, no Guarantor shall have any contractualrights or obligations against any other Guarantor under this Guaranty, including any rights to have this Guaranty enforced ratably or any right torestrict the amendment or waiver hereof with respect to another Guarantor.

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Section 1.01. Section 11.02.

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Exhibit 10.43

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

BASIC ENERGY SERVICES, INC.By: /s/ Alan Krenek Name: Alan KrenekTitle: Sr. Vice President - CFO, Treasurer & Secretary

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

GUARANTORS:

ACID SERVICES, LLCADMIRAL WELL SERVICE, INC.BASIC ENERGY SERVICES GP, LLCBASIC ESA, INC.BASIC MARINE SERVICES, INC.CHAPARRAL SERVICE, INC.FIRST ENERGY SERVICES COMPANYGLOBE WELL SERVICE, INC.JETSTAR ENERGY SERVICES, INC.JETSTAR HOLDINGS, INC.JS ACQUISITION LLCLEBUS OIL FIELD SERVICE CO.MAVERICK COIL TUBING SERVICES, LLCMAVERICK SOLUTIONS, LLCMAVERICK STIMULATION COMPANY, LLCMAVERICK THRU-TUBING SERVICES, LLCMCM HOLDINGS, LLCMSM LEASING, LLCPERMIAN PLAZA, LLCPLATINUM PRESSURE SERVICES, INC.SCH DISPOSAL, L.L.C.SLEDGE DRILLING CORP.TAYLOR INDUSTRIES, LLCTHE MAVERICK COMPANIES, LLCXTERRA FISHING & RENTAL TOOLS CO.

BASIC ENERGY SERVICES, INC.By: /s/ Alan Krenek Name: Alan KrenekTitle: Sr. Vice President - CFO, Treasurer & Secretary

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

BASIC ENERGY SERVICES, L.P.

By: Basic Energy Services GP, LLC, its sole general partner

By: Basic Energy Services, Inc., its sole member

BASIC ENERGY SERVICES, INC.By: /s/ Alan Krenek Name: Alan KrenekTitle: Sr. Vice President - CFO, Treasurer & Secretary

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

BASIC ENERGY SERVICES LP, LLCBy: /s/ Charles N Braley Name: Charles N BraleyTitle: Senior Vice President Restructuring

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

[Signature Page to DIP Credit Agreement]ASCRIBE CAPITAL LLC(ON BEHALF OF ITSELF AND ;CERTAIN FUNDS)By: /s/ Larry First Name: Larry FirstTitle: Managing Director

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

BlackGold Opportunity Fund LPBy: /s/ Pravin Kannequanti Name: Pravin KannequantiTitle: LOO/CCO

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

Brigade Capital Management, LPAs Investment Manager for the entities listed in Schedule A belowBy: /s/ Patrick V. Criscillo Name: Patrick V. CriscilloTitle: Chief Financial OfficerAddress: 399 Park Avenue, 16th FloorNew York, NY 10022Attention: Patrick CriscilloE-Mail: Operations@BrigadeCapital.com

Schedule ABlue Falcon LimitedBlue Pearl B 2015 LimitedBrigade Credit Fund II Ltd.Brigade Energy Opportunities Fund LPBrigade Leveraged Capital Structures Fund Ltd.Brigade Opportunistic Credit Fund 16 LLCBrigade Opportunistic Credit LBG Fund Ltd.Delta Master TrustFedEx Corporation Employees' Pension TrustLos Angeles County Employees Retirement AssociationSEI Global Master Fund Plc the SEI High Yield Fixed Income FundTasman Fund LPThe Coca-Cola Company Master Retirement Trust

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

Covalent Capital Partners Master Fund, L.P. by and through Covalent Partners LLC, in itscapacity as investment advisorBy: /s/ William C. Stone Jr. Name: William C. Stone Jr.Title: Assigned Signatory

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

CVI Opportunities Fund I, LLLP

By: Susquehanna Advisors Group, Inc., its authorized agentBy: /s/ Kathy Harley Name: Kathy HarleyTitle: Assistant Vice President

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

JLP Institutional Credit Fund LP

By: Phoenix Capital Management LLCBy: /s/ Jeffrey Peskind Name: Jeffrey PeskindTitle: Managing Member

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

SPCP Group, LLCBy: /s/ Michael A. Gatto Name: Michael A. GattoTitle: Authorized Signatory

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

Special Situations Investing Group, Inc.By: /s/ Daniel S. Oveglia Name: Daniel S. OvegliaTitle: Authorized Signatory

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

Whitebox Relative Value Partners, LPBy: /s/ Mark Strefling Name: Mark StreflingTitle: Chief Operating Officer and General Counsel

Whitebox Credit Partners, LPBy: /s/ Mark Strefling Name: Mark StreflingTitle: Chief Operating Officer and General Counsel

Whitebox GT Fund, LPBy: /s/ Mark Strefling Name: Mark StreflingTitle: Chief Operating Officer and General Counsel

Whitebox Multi-Strategy Partners, LPBy: /s/ Mark Strefling Name: Mark StreflingTitle: Chief Operating Officer and General Counsel

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

U.S. BANK NATIONALASSOCIATION,as Administrative Agent

By: /s/ James A. Hanley Name: James A. HanleyTitle: Vice President

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

Exhibit 10.43

RIVERSTONE VI BASIC HOLDINGS, L.P., as Lender

By: Riverstone Energy GP VI, LLC, its GeneralPartner

By: /s/ Riverstone Energy GP VI, LLC Name: Title:

[Signature Page to Debtor-In-Possession Term Loan Credit Agreement]

U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent

By:

Name: Title:

150

Exhibit 12.1Statement Regarding Computation of Ratio of Earnings to Fixed Charges(dollars in thousands)

Year-Ended December 31,

(unaudited) 2016 2015 2014 2013 2012

Earnings: Income from continuing operations before income taxes $ (127,256) $ (373,075) $ (7,820) $ (55,654) $ 29,849Fixed charges 102,890 72,741 73,012 73,589 68,594Earnings $ (24,366) $ (300,334) $ 65,192 $ 17,935 $ 98,443

Fixed charges: Rental expense $ 6,265 $ 4,638 $ 5,621 $ 6,081 $ 6,156Interest expense 96,625 68,103 67,391 67,508 62,438Fixed charges $ 102,890 $ 72,741 $ 73,012 $ 73,589 $ 68,594Ratio of earnings to fixed charges (a) (a) (a) (a) 1.4x(a) Earnings were inadequate to cover fixed charges for the years ended December 31, 2016, 2015 and 2014 by $127.3 million, $373.1 million and $7.87 million, respectively.

Exhibit 21.1

Subsidiaries of Basic Energy Services, Inc.

As of December 31, 2016

Name of Subsidiary Jurisdiction of FormationBasic Energy Services GP, LLC DelawareBasic Energy Services LP, LLC DelawareBasic Energy Services, L.P. DelawareBasic ESA, Inc. TexasChaparral Service, Inc. New MexicoBasic Marine Services, Inc. DelawareFirst Energy Services Company DelawareLeBus Oil Field Service Co. TexasGlobe Well Service, Inc. TexasSCH Disposal, L.L.C. TexasJS Acquisition LLC DelawareJetStar Holdings, Inc. DelawareAcid Services, LLC KansasJetStar Energy Services, Inc. TexasSledge Drilling Corp. TexasPermian Plaza, LLC TexasXterra Fishing & Rental Tools Co. TexasTaylor Industries, LLC TexasPlatinum Pressure Services, Inc. TexasAdmiral Well Service, Inc. TexasMaverick Coil Tubing Services, LLC ColoradoMaverick Solutions, LLC ColoradoMaverick Stimulation Company, LLC ColoradoMaverick Thru-Tubing Services, LLC ColoradoMCM Holdings, LLC ColoradoMSM Leasing, LLC ColoradoThe Maverick Companies, LLC Colorado

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Basic Energy Services, Inc.:

We consent to the incorporation by reference in the registration statement on Form S-8 (No. 333-215319) of Basic Energy Services, Inc. and subsidiariesof our reports dated March 31, 2017, with respect to the consolidated balance sheets of Basic Energy Services, Inc. and subsidiaries as of December 31,2016 (Successor) and 2015 (Predecessor), and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of theyears in the three-year period ended December 31, 2016 (Predecessor), and the related financial statement schedule, and the effectiveness of internalcontrol over financial reporting as of December 31, 2016, which reports appear in the December 31, 2016 annual report on Form 10‑K of Basic EnergyServices, Inc. and subsidiaries.

KPMG LLP

Dallas, TexasMarch 31, 2017

Exhibit 31.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TORULE 13a-14(a) AND 15d-14(a) UNDER THE EXCHANGE ACT

I, T.M. “Roe” Patterson, certify that:

1. I have reviewed this annual report on Form 10-K of Basic Energy Services, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that materialinformation relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to providereasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles;c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (theregistrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internalcontrol over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditorsand the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adverselyaffect the registrant’s ability to record, process, summarize and report financial information; andb) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financialreporting.

/s/ T.M. “Roe” Patterson T.M. “Roe” Patterson Chief Executive Officer

Date: March 31, 2017

Exhibit 31.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANT TORULE 13a-14(a) AND 15d-14(a) UNDER THE EXCHANGE ACT

I, Alan Krenek, certify that:1. I have reviewed this annual report on Form 10-K of Basic Energy Services, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, inlight of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that materialinformation relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period inwhich this report is being prepared;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to providereasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles;c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of thedisclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (theregistrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internalcontrol over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditorsand the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adverselyaffect the registrant’s ability to record, process, summarize and report financial information; andb) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financialreporting.

/s/ Alan Krenek Alan Krenek Chief Financial Officer

Date: March 31, 2017

Exhibit 32.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICERPURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Basic Energy Services, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2016 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, T.M. “Roe” Patterson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ T.M. “Roe” Patterson T.M. “Roe” Patterson Chief Executive Officer

March 31, 2017

Exhibit 32.2

CERTIFICATION BY CHIEF FINANCIAL OFFICERPURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Basic Energy Services, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2016 as filed with theSecurities and Exchange Commission on the date hereof (the “Report”), I, Alan Krenek, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, asadopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Alan Krenek Alan Krenek Chief Financial Officer

March 31, 2017