________________________

¹⁾ The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification

number, are: Basic Energy Services, Inc. (1194); Basic Energy Services GP, LLC (1197); Basic Energy Services

LP, LLC (1195); Basic Energy Services, L.P. (1819); Basic ESA, Inc. (2279); Chaparral Service, Inc. (6424); SCH

Disposal, L.L.C. (8335); Sledge Drilling Corp. (3140); Admiral Well Service, Inc. (4899); Basic Marine Services,

Inc. (4888); JS Acquisition LLC (9500); Permian Plaza, LLC (3425); Maverick Coil Tubing Services, LLC (3281);

First Energy Services Company (4993); JetStar Holdings, Inc. (4248); Xterra Fishing & Rental Tools Co. (7818);

Maverick Solutions, LLC (2876); LeBus Oil Field Service Co. (3125); Acid Services, LLC (0455); Taylor

Industries, LLC (7037); Maverick Stimulation Company, LLC (4572); Globe Well Service, Inc. (4275); JetStar

Energy Services, Inc. (5237); Platinum Pressure Services, Inc. (8379); Maverick Thru-Tubing Services, LLC

(1902); MCM Holdings, LLC (0949); MSM Leasing, LLC (9182); The Maverick Companies, LLC (4170). The

Debtors’ mailing address is 801 Cherry Street, Suite 2100, Fort Worth, Texas 76102.

THIS SOLICITATION OF VOTES (THE “ SOLICITATION ”) IS BEING CONDUCTED TO OBTAIN SUFFICIENT VOTES TO ACCEPT THE PREPACKAGED PLAN (AS DEFINED HEREIN) BEFORE THE FILING OF VOLUNTARY REORGANIZATION CASES UNDER CHAPTER 11 OF TITLE 11 OF THE UNITED STATES CODE (THE “ BANKRUPTCY CODE ”). BECAUSE THE CHAPTER 11 CASES HAVE NOT YET BEEN COMMENCED, THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT AS CONTAINING ADEQUATE INFORMATION WITHIN THE MEANING OF SECTION 1125(a) OF THE BANKRUPTCY CODE. FOLLOWING THE COMMENCEMENT OF THE CHAPTER 11 CASES, THE DEBTORS EXPECT TO PROMPTLY SEEK ORDERS OF THE BANKRUPTCY COURT (i) APPROVING THIS DISCLOSURE STATEMENT AS CONTAINING ADEQUATE INFORMATION, (ii) APPROVING THE SOLICITATION OF VOTES AS BEING IN COMPLIANCE WITH SECTIONS 1125 AND 1126(b) OF THE BANKRUPTCY CODE, AND (iii) CONFIRMING THE PREPACKAGED PLAN.

DISCLOSURE STATEMENT, DATED OCTOBER 24, 2016

Solicitation of Votes on the
Plan of Reorganization of

BASIC ENERGY SERVICES, INC., ET AL.

from the holders of outstanding

TERM LOAN CLAIMS
UNSECURED NOTES CLAIMS

HOLDERS OF CLAIMS SHOULD NOT CONSTRUE THE CONTENTS OF THIS DISCLOSURE STATEMENT AS PROVIDING ANY LEGAL, BUSINESS, FINANCIAL, OR TAX ADVICE AND SHOULD CONSULT WITH THEIR OWN ADVISERS BEFORE CASTING A VOTE WITH RESPECT TO THE PREPACKAGED PLAN.

THE ISSUANCE OF AND THE DISTRIBUTION UNDER THE PREPACKAGED PLAN OF THE NEW COMMON SHARES, THE WARRANTS (AND THE NEW COMMON SHARES ISSUABLE UPON EXERCISE THEREOF), THE SUBSCRIPTION RIGHTS, AND THE NEW CONVERTIBLE NOTES ISSUED PURSUANT TO THE RIGHTS OFFERING (AND THE NEW COMMON SHARES ISSUABLE UPON CONVERSION THEREOF) WILL BE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”) AND ANY OTHER APPLICABLE SECURITIES LAWS PURSUANT TO SECTION 1145 OF THE BANKRUPTCY CODE. THESE SECURITIES MAY BE RESOLD WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR OTHER FEDERAL SECURITIES LAWS PURSUANT TO THE EXEMPTION PROVIDED BY SECTION 4(A)(1) OF THE SECURITIES ACT, UNLESS THE HOLDER IS AN “UNDERWRITER” WITH RESPECT TO SUCH SECURITIES, AS THAT TERM IS DEFINED IN SECTION 1145(b) OF THE BANKRUPTCY CODE. IN ADDITION, SUCH SECTION 1145 EXEMPT SECURITIES GENERALLY MAY BE RESOLD WITHOUT REGISTRATION UNDER STATE SECURITIES LAWS PURSUANT TO VARIOUS EXEMPTIONS PROVIDED BY THE RESPECTIVE LAWS OF THE SEVERAL STATES.

THE ISSUANCE AND SALE, AS APPLICABLE, OF THE NEW CONVERTIBLE NOTES (AND THE NEW COMMON SHARES ISSUABLE UPON CONVERSION THEREOF) TO THE BACKSTOP PARTIES UNDER THE BACKSTOP AGREEMENT IS BEING MADE IN RELIANCE ON THE EXEMPTION FROM REGISTRATION SET FORTH IN SECTION 4(a)(2) OF THE SECURITIES ACT AND REGULATION D THEREUNDER. SUCH SECURITIES WILL BE CONSIDERED “RESTRICTED SECURITIES” AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR UNDER AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUCH AS, UNDER CERTAIN CONDITIONS, THE RESALE PROVISIONS OF RULE 144 OF THE SECURITIES ACT.

THE AVAILABILITY OF THE EXEMPTION UNDER SECTION 1145 OF THE BANKRUPTCY CODE OR ANY OTHER APPLICABLE SECURITIES LAWS WILL NOT BE A CONDITION TO THE OCCURRENCE OF THE EFFECTIVE DATE.

THE NEW COMMON SHARES AND THE SUBSCRIPTION RIGHTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE “ SEC ”) OR BY ANY STATE SECURITIES COMMISSION OR SIMILAR PUBLIC, GOVERNMENTAL, OR REGULATORY AUTHORITY, AND NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY SUCH AUTHORITY HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT OR UPON THE MERITS OF THE PREPACKAGED PLAN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

CERTAIN STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT, INCLUDING STATEMENTS INCORPORATED BY REFERENCE, PROJECTED FINANCIAL INFORMATION, AND OTHER FORWARD-LOOKING STATEMENTS, ARE BASED ON

ESTIMATES AND ASSUMPTIONS. THERE CAN BE NO ASSURANCE THAT SUCH STATEMENTS WILL BE REFLECTIVE OF ACTUAL OUTCOMES. FORWARD-LOOKING STATEMENTS ARE PROVIDED IN THIS DISCLOSURE STATEMENT PURSUANT TO THE SAFE HARBOR ESTABLISHED UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND SHOULD BE EVALUATED IN THE CONTEXT OF THE ESTIMATES, ASSUMPTIONS, UNCERTAINTIES, AND RISKS DESCRIBED HEREIN.

FURTHER, READERS ARE CAUTIONED THAT ANY FORWARD-LOOKING STATEMENTS HEREIN ARE BASED ON ASSUMPTIONS THAT ARE BELIEVED TO BE REASONABLE, BUT ARE SUBJECT TO A WIDE RANGE OF RISKS IDENTIFIED IN THIS DISCLOSURE STATEMENT. DUE TO THESE UNCERTAINTIES, READERS CANNOT BE ASSURED THAT ANY FORWARD-LOOKING STATEMENTS WILL PROVE TO BE CORRECT. THE DEBTORS ARE UNDER NO OBLIGATION TO (AND EXPRESSLY DISCLAIM ANY OBLIGATION TO) UPDATE OR ALTER ANY FORWARD-LOOKING STATEMENTS WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS, OR OTHERWISE, UNLESS INSTRUCTED TO DO SO BY THE BANKRUPTCY COURT.

HOLDERS OF ALLOWED GENERAL UNSECURED CLAIMS WILL NOT BE IMPAIRED BY THE PREPACKAGED PLAN AND, AS A RESULT, THE RIGHT TO RECEIVE PAYMENT IN FULL ON ACCOUNT OF EXISTING OBLIGATIONS IS NOT ALTERED BY THE PREPACKAGED PLAN. DURING THE CHAPTER 11 CASES, THE DEBTORS INTEND TO OPERATE THEIR BUSINESSES IN THE ORDINARY COURSE AND WILL SEEK AUTHORIZATION FROM THE BANKRUPTCY COURT TO MAKE PAYMENT IN FULL ON A TIMELY BASIS TO ALL TRADE CREDITORS, CUSTOMERS, AND EMPLOYEES OF ALL AMOUNTS DUE PRIOR TO AND DURING THE CHAPTER 11 CASES.

NO INDEPENDENT AUDITOR OR ACCOUNTANT HAS REVIEWED OR APPROVED THE FINANCIAL PROJECTIONS OR THE LIQUIDATION ANALYSIS HEREIN.

THE DEBTORS HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR ADVICE, OR TO MAKE ANY REPRESENTATION, IN CONNECTION WITH THE PREPACKAGED PLAN OR THIS DISCLOSURE STATEMENT.

THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE AS OF THE DATE HEREOF UNLESS OTHERWISE SPECIFIED. THE TERMS OF THE PREPACKAGED PLAN GOVERN IN THE EVENT OF ANY INCONSISTENCY WITH THE SUMMARIES IN THIS DISCLOSURE STATEMENT.

THE INFORMATION IN THIS DISCLOSURE STATEMENT IS BEING PROVIDED SOLELY FOR PURPOSES OF VOTING TO ACCEPT OR REJECT THE PREPACKAGED PLAN OR OBJECTING TO CONFIRMATION. NOTHING IN THIS DISCLOSURE STATEMENT MAY BE USED BY ANY PARTY FOR ANY OTHER PURPOSE.

ALL EXHIBITS TO THIS DISCLOSURE STATEMENT ARE INCORPORATED INTO AND ARE A PART OF THIS DISCLOSURE STATEMENT AS IF SET FORTH IN FULL HEREIN.

I.
INTRODUCTION

The Debtors submit this Disclosure Statement in connection with the Solicitation of votes on the Joint Prepackaged Chapter 11 Plan of Basic Parent and its Affiliated Debtors, dated October 24, 2016 (the “ Prepackaged Plan ”) attached hereto as Exhibit A . The Debtors under the Prepackaged Plan are Basic Parent and its affiliates that are guarantors under the Term Loan Agreement, ABL Credit Agreement, the 2019 Notes, and the 2022 Notes. Subject to the approval of the Board of Directors of Basic Parent (the “ Board ”), the Debtors anticipate filing voluntary petitions for relief under chapter 11 in the United States Bankruptcy Court for the District of Delaware (the “ Bankruptcy Court ”) on or about October 25, 2016, which is during the solicitation period. Capitalized terms used in this Disclosure Statement, but not defined herein, have the meanings ascribed to them in the Prepackaged Plan. To the extent any inconsistencies exist between this Disclosure Statement and the Prepackaged Plan, the Prepackaged Plan will govern.

The Debtors are commencing this Solicitation after extensive discussions over the past several months among the Debtors and their secured and unsecured creditors. As a result of these negotiations, the Consenting Term Loan Lenders and the Consenting Noteholders entered into a restructuring support agreement (the “ Restructuring Support Agreement ”) with the Debtors, a copy of which is attached hereto as Exhibit B . Under the terms of the Restructuring Support Agreement, the creditor parties thereto agreed, subject to the terms and conditions of the Restructuring Support Agreement, to support a deleveraging transaction, consisting of restructuring the Debtors’ existing debt obligations in chapter 11 through the Prepackaged Plan (the “ Restructuring ” ).

There are two (2) creditor groups whose votes for acceptance of the Prepackaged Plan are being solicited:

Further below is a short summary of the treatment of various creditor groups under the Prepackaged Plan. Greater detail on such treatment is provided later on in this Disclosure Statement.

THE PREPACKAGED PLAN PROVIDES THAT HOLDERS OF IMPAIRED CLAIMS ENTITLED TO VOTE WHO DO NOT SUBMIT A BALLOT VOTING TO ACCEPT OR REJECT THE PREPACKAGED PLAN, WHO VOTE TO ACCEPT THE PREPACKAGED PLAN, OR WHO VOTE TO REJECT THE PREPACKAGED PLAN BUT DO NOT OPT OUT OF THE RELEASE PROVISIONS OF THE PREPACKAGED PLAN ARE DEEMED TO HAVE GRANTED THE RELEASES THEREIN.

After the Petition Date, and after the approval of the Rights Offering Procedures (as defined herein), Basic Parent will launch a rights offering (the “ Rights Offering ”) for New Convertible Notes with an aggregate offering amount up to $125 million pursuant to which holders of Unsecured Notes Claims as of the Rights Offering Record Date (defined herein) (each, an “ Eligible Offeree ”) will be entitled to exercise their pro rata share of Subscription Rights to acquire New Convertible Notes. It is expected that shortly after the Petition Date, Basic Parent will enter into the Backstop Agreement, in the form attached as an exhibit to the Restructuring Support Agreement, with the Backstop Parties, pursuant to which the Backstop Parties will backstop the Rights Offering in exchange for a commitment premium (the “ Backstop Put Premium ”). The material terms of the Rights Offering are described in more detail in section XIII – Rights Offering Procedures. The Debtors will use proceeds from the Rights Offering plus

cash on hand to: (i) provide additional liquidity for working capital and general corporate purposes; (ii) pay all Allowed Administrative Expense Claims payable on or after the Effective Date; (iii) pay in cash in full the DIP Facility Claims; and (iv) fund distributions under the Prepackaged Plan.

The Restructuring will leave the Debtors’ businesses and existing corporate structure intact under Basic Parent, and it will substantially deleverage the Debtors’ capital structure. The Debtors’ balance sheet liabilities will be reduced from greater than approximately $775 million in unsecured debt to approximately $131.25 million in unsecured debt (which unsecured debt is convertible into equity after, among other things, 36 months). This deleveraging will enhance the Debtors’ long-term growth prospects and competitive position and allow the Debtors to emerge from the Chapter 11 Cases as a stronger, reorganized group of entities better able to withstand a challenging market environment for oilfield services providers.

WHO IS ENTITLED TO VOTE: Under the Bankruptcy Code, only holders of claims or interests in “impaired” Classes are entitled to vote on the Prepackaged Plan (unless, for reasons discussed in more detail below such holders are deemed to reject the Prepackaged Plan pursuant to section 1126(g) of the Bankruptcy Code). Under section 1124 of the Bankruptcy Code, a class of claims or interests is deemed to be “impaired” under the Prepackaged Plan unless: (i) the Prepackaged Plan leaves unaltered the legal, equitable, and contractual rights to which such claim or interest entitles the holder thereof; or (ii) notwithstanding any legal right to an accelerated payment of such claim or interest, the Prepackaged Plan, among other things, cures all existing defaults (other than defaults resulting from the occurrence of events of bankruptcy) and reinstates the maturity of such claim or interest as it existed before the default.

The following table summarizes: (i) the treatment of Claims and Interests under the Prepackaged Plan; (ii) which Classes are impaired by the Prepackaged Plan; (iii) which Classes are entitled to vote on the Prepackaged Plan; and (iv) the estimated recoveries for holders of Claims and Interests. The table is qualified in its entirety by reference to the full text of the Prepackaged Plan. For a more detailed summary of the terms and provisions of the Prepackaged Plan, see section VI – Summary of the Prepackaged Plan below. A detailed discussion of the analysis underlying the estimated recoveries, including the assumptions underlying such analysis, is set forth in the Valuation Analysis in section VIII – Valuation Analysis below.

1) Any Claim or Interest in a Class that is considered vacant under section 3.5 of the Prepackaged Plan will receive no Plan Distribution.

2) The percentage ownership figures set out in this table assume conversion of the New Convertible Notes 36 months after the Effective Date, and a plan equity value midpoint of 227.3 million.

3) Includes 20% discount to Plan Value and effect of 9% PIK interest for 3 years.

4) Includes 20% discount to Plan Value and effect of 9% PIK interest for 3 years.

The following table sets forth the percentage ownership of Reorganized Basic Parent upon the occurrence of different events:

* The percentage ownership figures set out in the table above assume that no holder of an Existing Equity Interest has objected to the Prepackaged Plan.

Warrants are only expected to be exercised if the equity value of the Debtors in the future exceeds $1.789 billion, which is the approximate value at which New Common Shares received by holders of Unsecured Notes Claims (not including the New Common Shares received on account of conversion of the New Convertible Notes) will exceed $824.6 million (the principal plus accrued and unpaid interest on the Unsecured Notes as of an estimated emergence date of December 31, 2016), assuming such conversion occurs 36 months after the Effective Date. This is significantly higher than the midpoint equity value (post conversion of the New Convertible Notes) of $390.6 million, as determined by Moelis & Company.

WHERE TO FIND ADDITIONAL INFORMATION: Basic Parent currently files annual reports with, and furnishes other information, to the SEC. Copies of any document filed with the SEC may be obtained by visiting the SEC website at http://www.sec.gov and performing a search under the “Company Filings”

link. Each of the following filings is incorporated as if fully set forth herein and is a part of this Disclosure Statement. Later information filed with the SEC that updates information in the filings incorporated by reference will update and supersede that information:

II.
OVERVIEW OF THE DEBTORS’ OPERATIONS

Basic Parent and the Debtor and non-Debtor subsidiaries of Basic Parent (collectively, the “ Basic Group ”) operate together to provide various well site services to over 2,000 land-based oil and natural gas producing companies. Basic Group’s operations include completion and remedial services, fluid services, well servicing, and contract drilling, and are regionally managed from over 100 locations, located in Texas, New Mexico, Oklahoma, Arkansas, Kansas, Louisiana, Wyoming, North Dakota, Colorado, Utah, Montana, West Virginia, California, Ohio, and Pennsylvania. From these operational yards, the Debtors provide services to customers in the 48 contiguous states in their four primary business segments (discussed in further detail below).

The Debtors principal executive offices are located at 801 Cherry Street, Suite 2100, Fort Worth, Texas 76102.

The Debtors balance sheet reflects approximately $1.046 billion in total assets as of the end of the second quarter of 2016, which substantial asset base is necessary to support the Debtors’ operations. The Debtors own more than 400 rigs of various sizes, approximately 5,000 trucks and similar vehicles, and thousands of items of other equipment related to their businesses. The Debtors also have interests in real estate, including, among other things, various permitted disposal wells for disposal of salt water and other fluid byproduct. In addition, the Debtors own certain patents and other intellectual property.

The Debtors service geographic areas with over 800,000 active hydrocarbon wells, and its customers include both major exploration and production companies (“ E&P Companies ”) and small, independent E&P Companies that in aggregate produce a significant amount of the oil and gas in the United States.

The Debtors’ operations are comprised of four distinct business segments: (1) completion and remedial services; (2) fluid services; (3) well servicing; and (4) contract drilling.

The Debtors’ completion and remedial services segment engages in “well completion,” which are services designed to stimulate safe and efficient production from an oil or gas well after initial drilling operations have been complete, and “remediation,” which are services designed to repair leaks and close non-

productive perforations in well casing, and ultimately plug the well at the end of its productive life. The Debtors’ completion and remedial services segment operates a fleet of pumping units, an array of specialized rental equipment and fishing tools, coiled tubing units, snubbing units, thru-tubing, air compressor packages specially configured for underbalanced drilling 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.

The Debtors’ fluid services segment utilizes a fleet of 972 fluid service trucks (as of September 2016) and related assets, including specialized tank trucks, storage tanks, water wells, disposal facilities, water treatment and construction and other related equipment. These assets provide transport, store, and dispose of a variety of fluids, as well as provide well site construction and maintenance services. These services are required in most workover, completion and remedial projects and are routinely used in daily producing well operations.

The Debtors’ fluid services business comprises the sale, transportation, storage, and disposal of fluids used in fracturing, workover the drilling activity as well as produced water, and is the most stable of the Debtors’ businesses. A significant part of the Debtors’ activities involves its saltwater disposal network, which includes eighty-five (85) salt-water disposal sites, one of the largest saltwater disposal networks in the country. The Debtors’ focus on produced water hauling and on anchoring its fleet around an extensive saltwater disposal well network has helped to sustain its utilization levels while keeping a low cost structure. This low cost structure, combined with more stable utilization rates, has equated to improved market share in the currently depressed industry cycle. The Debtors’ best performing market for fluid services last year was the Permian Basin – a region with high produced water volumes and attractive economics – where it maintains one of the highest numbers of saltwater disposal wells in the market.

The Debtors’ well servicing segment operates a fleet of 421 well servicing rigs (as of September 2016) and related equipment. This business segment encompasses a full range of services performed with a mobile well servicing rig, including the installation and removal of downhole equipment 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 improve production 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. The Debtors’ well servicing equipment and capabilities also facilitate most other services performed on a well.

The Debtors’ network of over forty (40) well servicing yards are strategically located where activity is greatest, enabling the Debtors to keep transportation costs low and its equipment readily available to meet its customers’ needs. Additionally, with the Debtors wholly owned subsidiary Taylor, it has the ability to build any type of well servicing rig, including fit-for-purpose rigs that may be needed for large completion jobs.

The Debtors’ contract drilling segment operates a fleet of twelve (12) drilling rigs and related equipment. The Debtors use these assets to penetrate the earth to a desired depth and initiate production from a well.

Basic Parent was organized as a Delaware corporation in 1992 under the name Sierra Well Service, Inc., and changed to its current name in 2000. The day-to-day operations and business of the Basic Group are principally conducted through two entities, Basic Energy Services L.P. (“ BES ”) and Taylor Industries, LLC (“ Taylor ”). The other Debtors are remnants of prior acquisitions and mergers and are shell entities with no material assets. BES is responsible for providing the majority of services offered by the Basic Group in all four operating segments. BES employs over 3,500 individuals. Taylor operates only within the well servicing segment of the Basic Group businesses, providing manufacturing and sale of new workover rigs. Taylor employs approximately 43 individuals. Aside from Basic Parent, BES and Taylor, the Debtors do not engage in any day-to-day operating activities and do not employ any individuals.

A chart illustrating the Debtors’ organizational structure is attached to this Disclosure Statement as Exhibit C .

Basic Parent’s current board of directors is composed of (i) Steven A. Webster, Chairman, (ii) T.M. (“Roe”) Patterson, (iii) Kenneth V. Huseman, (iv) James S. D’Agostino, Jr., (v) William E. Chiles, (vi) Robert F. Fulton, (vii) Sylvester P. Johnson, IV, (viii) Antonio O. Garza, Jr., and (ix) Thomas Moore, Jr.

Basic Parent’s current senior management team is composed of (i) T.M. (“Roe”) Patterson, President and Chief Executive Officer, (ii) Alan Krenek, Chief Financial Officer, and (iii) James F. Newman, Senior Vice President—Region Operations. Members of Basic Parent’s executive team include: (i) William T. Dame, Vice President—Pumping Services Division, (ii) Douglas B. Rogers, Vice President—Marketing, (iii) Eric Lannen, Vice President—Human Resources, (iv) Lanny T. (“Trampas”) Poldrack, Vice President—Safety and Operations Support, (v) John C. (“Cody”) Bissett, Vice President—Controller and Chief Accounting Officer, and (vi) Brett J. Taylor, Vice President—Manufacturing and Equipment. David C. Johnston of AP Services LLC was recently appointed as Chief Restructuring Officer for the Debtors.

The composition of each board of directors of a Reorganized Debtor will be disclosed prior to the entry of the order confirming the Prepackaged Plan in accordance with 11 U.S.C. § 1129(a)(5).

The Debtors’ operations are conducted in the United States and are subject to stringent federal, state, and local laws regulating the discharge of materials into the environment or otherwise relating to health and safety or the protection of the environment. Numerous government agencies, such as the U.S. Environmental Protection Agency, commonly referred to as the “EPA”, and analogous state agencies issue regulations to implement and enforce these laws, which often require stringent and costly compliance measures. These laws and regulations may, among other things, require the acquiring 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 the Debtors handle or dispose of their materials and waste; limit or prohibit construction or drilling activities in sensitive areas such as wetlands, wilderness areas or areas inhabited by endangered or threatened species; or investigatory or remedial actions to mitigate pollution conditions. Failure to comply with these laws and regulations may result in the assessment of substantial administrative, civil and criminal penalties, as well as the possible issuance of injunctions limiting or prohibiting liability for environmental damages and cleanup costs without regard to negligence or fault. Strict adherence with these regulatory requirements increases the Debtors’ cost of doing business and

consequently affects their profitability. The Debtors believe that they are in substantial compliance with current applicable environmental, health and safety laws, and regulations and that continued compliance with existing requirements will not have a material adverse impact on our operations. However, environmental laws and regulations have been subject to frequent changes over the years, and the imposition of more stringent requirements could have material adverse effect upon our capital expenditures, our earnings, or our competitive position.

The laws and regulations that impact the Debtors’ operations include those relating to equipment operations and environmental protection, health and safety. Additional discussion of the regulatory environment of the Debtors’ business can be found in the Form 10-K of Basic Parent for the fiscal year ended December 31, 2015, filed with the SEC on February 23, 2016.

Basic Parent is a public company that was first listed on the New York Stock Exchange (the “ NYSE ”) on December 9, 2005. Shares of common stock of Basic Parent are traded on the New York Stock Exchange under the symbol “BAS.” As of the date of this Disclosure Statement, Basic Parent had 42,758,940 issued and outstanding shares of common stock. All other Debtors are 100 percent owned either directly or indirectly by Basic Parent.

On August 19, 2016, Basic Parent received written notice (the “ NYSE Notice ”) from the NYSE that Basic Parent did not presently satisfy the NYSE’s continued listing standards set forth in: (i) section 802.01B of the NYSE Listed Company Manual (the “ Manual ”), which prohibits Basic Parent’s average global market capitalization over a consecutive thirty-day trading period from being less than $50 million at the same time its stockholders’ equity is less than $50 million; and (ii) section 802.01C of the Manual, which requires the average closing price of Basic Parent’s common shares to be at least $1.00 per share over a consecutive thirty day trading-day period. As of August 18, 2016, the average closing price of Basic Parent’s common shares over the preceding thirty trading-day period was $0.98 per share, the average market capitalization over the preceding thirty trading-day period was approximately $41.7 million, and the last reported stockholders’ deficit was approximately ($62.4) million as of June 30, 2016.

Upon filing the Prepackaged Plan, the NYSE will have broad discretion to suspend trading in Basic Parent’s shares and commence de-listing proceedings. There can be no assurance as to whether or not the existing Basic Parent shares will be delisted upon or after filing of the Prepackaged Plan or whether the New Common Shares of Reorganized Basic Parent will be listed upon or after the Effective Date of the Prepackaged Plan. Basic Parent has agreed to use its reasonable best efforts to list the New Common Shares on a nationally recognized exchange as soon as practicable, subject to meeting the applicable listing requirements following the Effective Date. However, there can be no assurance as to when or whether any such listing will occur.

As of the date of this Disclosure Statement, the Debtors’ significant prepetition indebtedness is approximately $1.1 billion, which includes secured financing obligations in the principal amount of approximately $164.175 million, contingent letter of credit exposure in the approximate amount of $51 million, unsecured financing obligations in the principal amount of approximately $775 million, and capital lease obligations in the principal amount of approximately $78.5 million.

The Debtors are party to that certain Term Loan Agreement, dated as of February 17, 2016, by and among Basic Parent as Borrower, the guarantors named therein, U.S. Bank National Association as administrative agent, and the Term Loan Lenders (as amended, modified, or otherwise supplemented from time to time, the “ Term Loan Agreement ”), pursuant to which the Term Loan Lenders agreed to make a term loan (the “ Term Loan ”) to Basic Parent comprised of: (i) a $165 million term loan, the proceeds of which were deposited into the Escrow Account and subject to the terms of the Escrow Agreement (as each is defined in the Term Loan Agreement) on February 26, 2016, and (ii) up to an additional $15 million delayed draw facility available upon the satisfaction of certain conditions precedent, which conditions were not satisfied as of the date of this Disclosure Statement. The Term Loan has a maturity date of February 26, 2021 with a springing maturity of November 17, 2018 if the Debtors are unable complete an acceptable refinancing of the 2019 Notes by November 17, 2018. As of the date hereof, the aggregate amount outstanding under the Term Loan Agreement is $164.175 million in unpaid principal, plus interest, fees, and other expenses.

As of the date of this Disclosure Statement, approximately $20.3 million in proceeds from the Term Loan remain in the Escrow Account due to the failure of the Debtors to satisfy certain perfection requirements related to the Term Loan collateral that are set forth in the Escrow Agreement. Furthermore, the Debtors’ failure to make the interest payment due on August 15, 2016 under the 2019 Notes Indenture constituted a default under the Term Loan Agreement, and under the terms of the Escrow Agreement no funds held in the Escrow Account may be released to the Debtors if a default has occurred and is continuing under the Term Loan Agreement. In addition, the Term Loan Lenders could assert that the commencement of the Chapter 11 Cases would trigger a make-whole premium (the “ Make-Whole ”) under the Term Loan Agreement, which, if successful, would increase the Term Loan Claims by an additional $58 million. However, as discussed below, the Term Loan Lenders have agreed to forego payment of that amount under the Prepackaged Plan.

The obligations of the Debtors under the Term Loan Agreement are secured pursuant to that certain Security Agreement, dated as of February 26, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “ Term Loan Security Agreement ”). Pursuant to the Term Loan Security Agreement and certain other local law collateral agreements, the Debtors each granted a first priority lien on and security interest in the Term Loan Priority Collateral (as that term is defined in the Intercreditor Agreement) and a second priority lien on and security interest in the ABL Facility Priority Collateral (as that term is defined in the Intercreditor Agreement). The Term Loan Priority Collateral includes, subject to certain exclusions, substantially all the property of the Debtors including equipment, fixtures, goods, inventory, real property, intellectual property, and all other property other than the ABL Facility Priority Collateral.

The Debtors are party to that certain Amended and Restated Credit Agreement, dated as of November 26, 2014, by and among Basic Parent, as the borrower, the guarantors named therein, Bank of America, N.A., as administrative agent, swing line lender, and L/C issuer, Wells Fargo Bank, N.A., as syndication agent, Capital One, National Association, as documentation agent and L/C issuer, and other lender parties listed therein (collectively, the “ ABL Lenders ”), as amended, modified, or otherwise supplemented from time to time (the “ ABL Credit Agreement ”) and under which Basic Parent received a $300 million revolving credit facility, including a letter of credit sublimit in an equal amount and a swing line sublimit in an aggregate amount of up to $10 million (the “ ABL Facility ”). The ABL Credit Agreement was

subsequently amended on April 21, 2015, to reduce the maximum aggregate commitments thereunder from $300 million to $250 million.

In connection with the closing of the Term Loan, which occurred on February 26, 2016, Basic Parent entered into a further amendment to the ABL Credit Agreement that, among other things, further reduced the maximum aggregate commitments thereunder from $250 million to $100 million. The ABL Credit Agreement has a maturity date of November 26, 2019 with a springing maturity of August 17, 2018 if the Debtors are unable to refinance the 2019 Notes (as defined below) by August 17, 2018. As of the date hereof, the Debtors had approximately $51 million in letters of credit issued under the ABL Credit Agreement but no borrowings outstanding under the ABL Facility.

The obligations of the Debtors under the ABL Credit Agreement are secured pursuant to that certain Second Amended and Restated Security Agreement dated as of February 26, 2016 (as amended, supplemented, amended and restated or otherwise modified from time to time, the “ABL Security Agreement”). Pursuant to the ABL Security Agreement, the Debtors each granted a security interest in the ABL Facility Priority Collateral, as that term is defined in the Intercreditor Agreement (as defined below). The ABL Facility Priority Collateral includes, among other things, the Debtors’ right, title, and interest in certain cash, deposit accounts, and receivables—other than certain deposit accounts that contain only the proceeds of the Term Loan Priority Collateral or the proceeds of the Term Loan.

The rights of the Term Loan Lenders and the ABL Lenders with respect to their shared collateral are governed by that certain Intercreditor Agreement dated as of February 26, 2016, by and among Bank of America, N.A., as administrative agent under the ABL Credit Agreement, U.S. Bank National Association, as administrative agent under the Term Loan Agreement, and the Debtors (as amended, restated, supplemented, waived or otherwise modified from time to time, the “ Intercreditor Agreement ”). The Intercreditor Agreement governs, among other things, the priority of distribution of property pledged as collateral under each of the Term Loan Agreement and the ABL Credit Agreement. In accordance with the Intercreditor Agreement: (i) the ABL Lenders are afforded first priority with respect to ABL Facility Priority Collateral; and (ii) the Term Loan Lenders are afforded second priority with respect to the ABL Facility Priority Collateral and first priority with respect to the Term Loan Priority Collateral.

The Debtors are party to that certain Indenture (the “ 2019 Indenture ”), dated as of February 15, 2011, by and among Basic Parent, as issuer, each of the guarantors named therein, and Wilmington Trust, N.A. (as successor to Wells Fargo Bank, N.A.), as trustee, as amended, modified, or otherwise supplemented, pursuant to which Basic Parent issued 7.75% Senior Unsecured Notes due 2019 in the aggregate principal amount of $275 million (the “ Initial 2019 Notes ”). The Initial 2019 Notes were issued at par and mature on February 15, 2019. On June 13, 2011, the Debtors issued additional 2019 Notes (the “ Additional 2019 Notes ” and, collectively with the Initial 2019 Notes, the “ 2019 Notes ” and the holders of such notes, the “ 2019 Noteholders ”) pursuant to the 2019 Indenture in the aggregate principal amount of $200 million. The Additional 2019 Notes were issued at 101% of their principal amount, plus accrued interest from February 15, 2011, and mature on February 15, 2019. The Additional Notes are identical to and are treated together with the Initial 2019 Notes as a single class of debt securities under the 2019 Indenture. Interest on the 2019 Notes is payable semi-annually in arrears on February 15 and August 15 of each year. As of October 25, 2016, the aggregate amount outstanding under the 2019 Notes will be approximately $475 million in unpaid principal, and approximately $25.8 million in unpaid interest.

The Debtors are party to that certain Indenture (the “ 2022 Indenture ”), dated as of October 16, 2012, by and among Basic Parent, as issuer, each of the guarantors named therein, and Wilmington Trust, N.A. (as successor to Wells Fargo Bank, N.A.), as trustee, as amended, modified, or otherwise supplemented, pursuant to which Basic Parent issued 7.75% Senior Unsecured Notes due 2022 in the aggregate principal amount of $300 million (the “ 2022 Notes ” and the holders of such notes, the “ 2022 Noteholders ”). The 2022 Notes were issued at par and mature on October 15, 2022. Interest on the 2022 Notes is payable semi-annually in arrears on April 15 and October 15 of each year. As of October 25, 2016, the aggregate amount outstanding under the 2022 Notes will be approximately $300 million in unpaid principal, and approximately $12.3 million in unpaid interest.

As of the date of this Disclosure Statement, the Debtors had approximately $78.5 million outstanding in capital lease obligations in connection with various specialized equipment.

As of the date hereof, the Debtors owe approximately $45 million in respect of prepetition trade debt and on account of liquidated and provisioned-for litigation claims (which is described in more detail below). The Debtors believe that because BES and Taylor are the only operating Debtors, most, if not all, trade debt in the Chapter 11 Cases will be owed by BES or Taylor alone. However, it is possible, given the scope of the Debtors’ businesses and the similarity of their corporate names, that one or more of the other Debtors are named in one or more invoices, or that such invoices are unclear as to which corporate entity is being invoiced.

The Debtors are involved in a number of lawsuits and claims by third parties asserting damages. Due to the nature of the Debtors’ businesses, some of the Debtors’ employees may be exposed to certain occupational hazards, such as well blowouts and accidents related to the operation of rigs. As a result, the frequency of workers’ compensation, employer liability, and general liability claims against the Debtors, and generally in the oil and gas services industry, tend to be high. Currently, the Debtors are defendants in approximately 33 pending litigation cases, and approximately $6.9 million has been reserved for anticipated settlement or judgment amounts with respect to these pending cases. In addition, the Debtors estimate that between $20.4 million and $23.8 million of asserted but not yet administered workers’ compensation claims will be outstanding as of the Petition Date. The Debtors pay these claims as they are processed in the ordinary course as further described in the Insurance Motion.

The two most significant proceedings currently pending against the Debtors are Galindo v. Energy Svcs. Co. of Bowie, Cause No. 1861 (District Court of Reagan County, Texas) (in which the defendants are parties fully indemnified by the Debtors) and Baze v. Basic Energy Services, LP., Cause No. CV-51377 (District Court of Midland County, Texas). On September 28, 2016, the jury issued a verdict in the Galindo litigation, awarding the plaintiffs approximately $7.05 million in damages plus interest and fees (as compared to a demand of $29.5 million). The order in the Galindo litigation was entered on October 11, 2016. The Debtors have thirty (30) days from the date of the judgment to file a motion for a new trial or begin an appeal, but as of the date of this Disclosure Statement no decision has been made with respect to either. The Baze litigation (in which the plaintiffs are demanding $30 million in damages) is scheduled for mediation on December 14, 2016. The Debtors estimate that the settlement amount or judgment in the Baze litigation will be substantially below the demand amount.

The Debtors’ liability in each of the Galindo and Baze cases are covered by the Debtors’ General Liability and Excess Tower programs, as each program is described in the Insurance Motion. Because accidents relating to the two proceedings occurred during the same 2014/15 policy year, and because of the structure of the Debtors’ deductibles and loss load payments (as both are described in the Insurance Motion), the Debtors’ maximum out-of-pocket exposure to unfavorable outcomes in the Galindo and Baze cases is not expected to exceed an aggregate of $5.5 million.

The Debtors do not expect their litigation liability to have a material adverse effect on their consolidated financial statements. The Debtors, however, cannot predict with certainty the outcome or effect of other pending or threatened litigation or legal proceedings, and the eventual outcomes could materially differ from their current estimates.

III.
KEY EVENTS LEADING TO
THE COMMENCEMENT OF CHAPTER 11 CASES

The oil and gas industry has been in one of the longest, steepest and most sustained declines in oil and gas prices in recent history. This decline has led E&P Companies, whose businesses are directly impacted by price swings in commodities, to sizably reduce their capital and operating expenditures relating to hydrocarbon production and drilling activities. As a result, numerous North American oilfield services companies, whose businesses are dependent on the spending of E&P Companies, have filed bankruptcy proceedings during 2015 and 2016.

The sustained drop in oil and gas prices has impacted companies throughout the oil and gas industry including the Basic Group and its customers. The Basic Group depends on its customers’ willingness to make operating and capital expenditures to explore for, and 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, have resulted in a curtailment of spending.

Consequently, demand for the Basic Group’s services has decreased and will continue to do so if the price of oil remains at its current level or declines further. During the first quarter of 2016, the Basic Group’s revenues totaled $130.4 million—a 50% drop from the $261.7 million earned during the same period in 2015.

Industry conditions, to which the Basic Group is susceptible, are influenced by numerous factors over which it has no control, such as the supply of and demand for oil and natural gas, domestic and worldwide economic conditions, political instability in oil and natural gas producing countries and merger and divestiture activity among oil and gas producers. Deterioration in the global economic environment commencing in the latter part of 2008 and continuing throughout 2009 caused the oilfield services industry to cycle into a downturn due to weakened demand. The industry returned to higher activities levels in 2011 and remained higher during the first half of 2012, before another downturn in the 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 second half of 2014, oil prices declined substantially from historical highs and have continued to decline. Oil and gas prices may remain depressed for the foreseeable future. In light of the current depressed oil prices, many oil producers, including many of our customers, announced significant reductions in capital budgets for 2016.

The recent circumstances surrounding the oil and gas industry has resulted in numerous oil and gas servicing companies seeking bankruptcy protection since the beginning of the downturn.

The Debtors have implemented various cost-cutting measures to adjust to the market downturn and corresponding pressure placed on its margins. Specifically, over the course of 2015, the Debtors initiated plans to deal with the diminished level of customer activity by reducing their capital expenditures from $75.2 million in 2014 to a projected $40 million in 2016, scaling down operations to fit cash flow, stacking equipment with higher operating costs, and preserving liquidity by postponing asset acquisitions. In addition, Basic Energy exited markets where margins fell below levels that justified current sustaining capital expenditures and worked with its vendors and suppliers to lower input costs. The Basic Group also implemented across-the-board salary and wage reductions, and cut its workforce by over 30% in comparison to its 2014 workforce levels.

These cost-cutting measures, however, did not fully offset the Debtors’ lower revenues and the Basic Group continued to deplete its cash reserves. By the end of 2015, the Debtors realized that they would need to seek additional financing to be able to either (i) ride out the downturn, if a recovery took hold in the near-term, or (ii) provide it enough runway to negotiate a deleveraging transaction, if no near-term recovery materialized. The Debtors determined that their consolidated balance sheet, which consisted primarily of the unsecured 2019 Notes and 2022 Notes at that time, could support an additional loan secured by substantially all its existing assets.

After a marketing process that yielded few lenders willing to provide the company financing on commercially sustainable terms, the Debtors were able to negotiate and enter into the Term Loan with the Term Loan Lenders. The Term Loan was the product of arm’s length negotiations between the Debtors and the Term Loan Lenders.

Oil prices did not sufficiently rebound in 2016 to turn around the Debtors’ business, and the Debtors have now run out of available financing options. With no clear timing for a recovery on the horizon, the Debtors have determined that surviving through the downturn would require both a significant deleveraging of its capital structure and an infusion of additional capital. Several of Basic Energy’s competitors have completed or are implementing deleveraging transactions in chapter 11 to remain competitive. To ensure that Basic Energy can continue to compete successfully against its substantially deleveraged peers, it will similarly need to right-size its balance sheet. Basic Energy will also need to raise additional capital to support its negative EBITDA while a recovery takes hold and provide it the funds it needs to exploit opportunities to consolidate its weaker peers.

Although the Debtors have historically maintained operations at profitable levels, the significant decline in oil prices and the resulting decrease in demand for oil and gas services referred to above have cast uncertainty on the viability of the Debtors’ current capital structure going forward. Moreover, several of Basic Group’s competitors have deleveraged their own balance sheets through chapter 11 processes, thus forcing even solvent companies to explore similar options to remain competitive moving forward.

In light of these circumstances, the Debtors engaged Weil, Gotshal & Manges LLP as legal restructuring counsel and Moelis & Company (“ Moelis ” ) as a financial advisor to work with Basic Parent’s management to evaluate strategic deleveraging options and to engage key debtholders and their advisers in good faith negotiations to explore a possible restructuring and assist in implementing the Restructuring. The Debtors subsequently engaged AP Services, LLC as restructuring advisors and to assist them with operating during bankruptcy.

In the spring of 2016, the Debtors initiated discussions with an ad hoc group (the “ Ad Hoc Group ”) of certain of the 2019 Noteholders and 2022 Noteholders (collectively, the “ Noteholders ”), which at that time was comprised of members Ascribe Capital, LLC, Brigade Capital Management, LLC, and Silver Point Management Capital, L.P. The Ad Hoc Group engaged Fried, Frank, Harris, Shriver & Jacobson LLP as its legal counsel and GLC Advisors & Co., LLC as its financial advisor.

For several months, the Debtors and the Ad Hoc Group discussed the potential contours of an out-of-court restructuring. During the course of these discussions, it became clear to both the Debtors and the Ad Hoc Group that the substantial deleveraging both parties sought would most effectively be accomplished through an in-court transaction. Accordingly, beginning early in the summer of 2016, the Debtors, the Ad Hoc Group, and the Term Loan Lenders began negotiations regarding the terms of a chapter 11 restructuring, with a fully consensual prepackaged plan as the ultimate goal.

In June 2016, the Board appointed a special restructuring committee (the “ Restructuring Committee ”) to explore various restructuring alternatives and to monitor the negotiations between the Debtors’ management team and advisors on the one hand, and the Term Loan Lenders and Ad Hoc Group and their advisors on the other hand. In the months leading up to the signing of the Restructuring Support Agreement, the Restructuring Committee met almost every week to consider proposals received from the Ad Hoc Group and the Term Loan Lenders, authorize the Debtors’ counterproposals, and discuss updates and general restructuring strategy and considerations. Likewise, the Board also met periodically to consider the various proposals and counterproposals presented, the recommendations of the Restructuring Committee, and other related matters such as whether to make an interest payment due on August 15, 2016 to the 2019 Noteholders or not make the payment and utilize the 30-day grace period under the 2019 Notes Indenture to provide additional time to negotiate a chapter 11 restructuring with its creditors

The 2019 Indenture provides for interest payments on account of the 2019 Notes on February 15 and August 15 until maturity. On August 15, 2016, Basic Parent elected to utilize a 30-day grace period (the “ 2019 Notes Grace Period ”) with respect to, and not to make, the approximate $18.4 million semi-annual payment that day. An event of default under the 2019 Notes occurred when Basic Parent did not make the interest payment before the expiration of the 2019 Notes Grace Period on September 14, 2016. The occurrence of an event of default under the 2019 Indenture gives the trustee or the holders of at least 25% of principal amount of the outstanding 2019 Notes the option to declare all of the 2019 Notes due and payable immediately upon such event of default.

Additionally, failure to make the interest payment on the 2019 Notes when due at the end of the 2019 Notes Grace Period would result in an event of default under the ABL Credit Agreement, and the Term Loan Agreement. The occurrence of an event of default under the ABL Credit Agreement or the Term Loan Agreement allows the respective administrative agents under the ABL Credit Agreement or the Term Loan Agreement to declare Basic Parent’s obligations under the ABL Credit Agreement and the Term Loan Agreement, as the case may be, immediately due and payable and to exercise such administrative agents’ and lenders’ rights under the ABL Credit Agreement and the Term Loan Agreement.

On September 13, 2016, before the expiration of the 2019 Grace Period, the Debtors entered into a forbearance agreement with holders of 81% of the 2019 Notes (the “ Forbearance Agreement ”). Under the Forbearance Period, such holders of 2019 Notes agreed to forbear from exercising their rights and remedies, including the right to accelerate any indebtedness, through September 28, 2016.

In conjunction with the Forbearance Agreement, the Term Loan Lenders and the ABL Lenders agreed to provide temporary waivers of certain and future defaults related, in part, to the missed interest payment, and a potential breach of a minimum liquidity covenant under the Term Loan Agreement, through September 28, 2016. The purpose of the Forbearance Agreement and the temporary waivers was to provide the Debtors with additional flexibility to continue discussions with all of their creditors and to pursue the Restructuring.

On September 28, 2016, the Debtors and holders of 81% of the 2019 Notes agreed to extend the Forbearance Period through October 16, 2016. The Term Loan Lenders and the ABL Lenders also agreed to provide extensions of the waivers provided on September 28, 2016 through October 16, 2016.

To provide the Debtors with additional time to finalize the documentation of the Restructuring, the Debtors reached an agreement with holders of over 81% of the 2019 Notes to further extend the Forbearance Agreement by eight days, through October 24, 2016, subject to certain terms and conditions (including the extension of the Forbearance Extension Period by Term Loan Lenders and ABL Lenders) (the “ Additional Extension Period ”). The Term Loan Lenders and the ABL Lenders also agreed to provide an extension of their temporary waivers through the Additional Extension Period.

The Debtors used the time afforded by the Additional Extension Period to finalize the Restructuring with both the Term Loan Lenders and the Ad Hoc Group.

The 2022 Indenture provides for interest payments on account of the 2022 Notes on April 15 and October 15 until maturity. On October 16, 2016, the Debtors elected to utilize a 30-day “grace period” (the “ 2022 Notes Grace Period ”), and not to make, the approximate $11.6 million interest semi-annual payment that day. The 2022 Notes Grace Period expires on Monday, November 15, 2016.

As in the case of the 2019 Notes, failure to make the Interest Payments on the 2022 Notes when due at the end of the 2022 Notes Grace Period would result in an event of default under the ABL Credit Agreement, and the Term Loan Agreement. The occurrence of an event of default under the ABL Credit Agreement or the Term Loan Agreement allows the respective administrative agents under the ABL Credit Agreement or the Term Loan Agreement to declare Basic Parent’s obligations under the ABL Credit Agreement and the Term Loan Agreement, as the case may be, immediately due and payable and to exercise such administrative agents’ and lenders’ rights under the ABL Credit Agreement and the Term Loan Agreement.

On October 23, 2016, the Debtors entered into the Restructuring Support Agreement with the Consenting Term Loan Lenders and the Consenting Noteholders (collectively, the “ Required Restructuring Support Parties ”). Under the Restructuring Support Agreement, each of the Required Restructuring Support Parties agreed to, subject to the terms and conditions of the Restructuring Support Agreement, among other things: (i) vote any claim it holds against the Debtors to accept the Prepackaged Plan and not (a) change or withdraw (or cause to be changed or withdrawn) its vote to accept the Prepackaged Plan, (b) object to, delay, impede, or take any other action to interfere with, delay, or postpone acceptance, consummation, or implementation of the Prepackaged Plan, or (c) propose, file, support, or vote for any restructuring, sale of assets, workout, or plan of reorganization of the Debtors other than the Prepackaged Plan and (ii) subject to certain exceptions, limit its ability to transfer the indebtedness it holds.

Under the Restructuring Support Agreement, the Debtors agreed to, among other things: (i) take all reasonably necessary and proper action and use reasonable best efforts to consummate the Restructuring in accordance with the Restructuring Support Agreement; (ii) use reasonable best efforts to meet the milestones set forth in the Restructuring Agreement; (iii) act in good faith and use reasonable best efforts to support and complete successfully the Solicitation; (iv) use reasonable best efforts to obtain any and all required regulatory approvals and third-party approvals of the Restructuring; (v) not to directly or indirectly seek or solicit any discussions relating to, or enter into any agreements relating to, any alternative proposals; (vi) not to take any actions inconsistent with the Restructuring Support Agreement and any other related documents executed by the Debtors; (vii) provide draft copies of all material motions, applications, or other documents that the Debtors intend to file with the Bankruptcy Court to the Required Restructuring Support Parties’ counsel at least three (3) calendar days prior to the date when the Debtors intend to file such document, or as soon as reasonably practicable, but in no event later than one (1) business day, where three (3) calendar days’ notice is not reasonably practicable; and (viii) support and take all actions that are necessary and appropriate to facilitate approval of this Disclosure Statement, confirmation of the Prepackaged Plan and consummation of the Restructuring in accordance with the Restructuring Support Agreement.

The Restructuring Support Agreement is terminable by the Restructuring Support Parties or the Debtors under certain conditions. The termination provisions include the failure of the Backstop Agreement (as defined below) to be effective in accordance with its terms or the termination of the Backstop Agreement, as well as several milestone dates, including, among other things, with respect to (i) a failure by the Debtors to commence solicitation of votes on the Prepackaged Plan; (ii) a failure by the Debtors to commence chapter 11 proceedings and file the Prepackaged Plan and this Disclosure Statement; (iii) a failure by the Bankruptcy Court to enter an order approving this Disclosure Statement; and (iv) a failure by the Bankruptcy Court to enter an order confirming the Prepackaged Plan.

The Restructuring Support Agreement and the obligations of all parties thereto may be terminated by mutual agreement by the Debtors and the Required Restructuring Support Parties.

IV.
ANTICIPATED EVENTS
DURING THE CHAPTER 11 CASES

In accordance with the Restructuring Support Agreement, the Debtors anticipate filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code on or about October 25, 2016. The filing of the petitions will commence the Chapter 11 Cases, at which time the Debtors will be afforded the benefits and become subject to the limitations of the Bankruptcy Code.

The Debtors intend to continue to operate their businesses in the ordinary course during the pendency of the Chapter 11 Cases as they have been doing before the Petition Date. To facilitate the efficient and expeditious implementation of the Prepackaged Plan through the Chapter 11 Cases, and to minimize disruptions to the Debtors’ operations on the Petition Date, the Debtors intend to seek to have the Chapter 11 Cases assigned to the same bankruptcy judge and administered jointly and to file various motions seeking important and urgent relief from the Bankruptcy Court. Such relief, if granted, will assist in the administration of the Chapter 11 Cases; however, there can be no assurance that the requested relief will be granted by the Bankruptcy Court.

On the Petition Date, the Debtors intend to file multiple motions seeking various relief from the Bankruptcy Court and authorizing the Debtors to maintain their operations in the ordinary course. Such relief is designed to ensure a seamless transition between the Debtors’ prepetition and postpetition business operations, facilitate a smooth reorganization through the Chapter 11 Cases, and minimize any disruptions to the Debtors’ operations. The following is a brief overview of the relief the Debtors intend to seek on the Petition Date to maintain their operations in the ordinary course.

To address their working capital needs and fund their reorganization efforts, on or immediately after the Petition Date, the Debtors intend to seek Bankruptcy Court approval of an agreement with certain of the Term Loan Lenders and Noteholders (collectively, the “ DIP Lenders ”) to receive a $90 million debtor-in-possession term loan (the “ DIP Term Loan ”). The proposed order seeking approval of the DIP Term Loan also reflects an agreement between and among the Debtors, the Term Loan Agent, the Term Loan Lenders, the ABL Facility Agent, and the ABL Facility Lenders on the consensual use of Cash Collateral (as defined in the Bankruptcy Code), and the terms of adequate protection to be provided to such parties.

The Debtors maintain a centralized cash management system designed to receive, monitor, aggregate, and distribute cash among the various Debtors (and non-Debtors). On the Petition Date, the Debtors intend to seek authority from the Bankruptcy Court to continue the use of their existing cash management system, bank accounts, and related business forms, as well as to continue their intercompany arrangements to avoid disruption in the Debtors’ operations and facilitate the efficient administration of the Chapter 11 Cases. Among other things, the Debtors will seek relief to continue their credit card program, which has a combined limit of $2 million and is fully collateralized by funds held in the Debtors’ specific account.

In the ordinary course of business, the Debtors rely upon a variety of vendors and service providers. Pursuant to the Prepackaged Plan, the Debtors intend to pay all of their obligations to such vendors and service providers in full. However, certain vendors or service providers may seek to terminate or alter the terms of their agreements with the Debtors if the Debtors fail to honor their obligations as they become due. To avoid the detrimental effects of potential actions taken by the Debtors’ vendors and service providers, and to minimize any disruption to the Debtors’ operations, on the Petition Date, the Debtors intend to seek authority from the Bankruptcy Court to satisfy their obligations to vendors and service providers in the ordinary course.

Pursuant to the Prepackaged Plan, the Debtors intend to pay all taxes and fees in full. To minimize any disruption to the Debtors’ operations and ensure the efficient administration of the Chapter 11 Cases, on the Petition Date, the Debtors intend to seek authority from the Bankruptcy Court to pay all taxes, fees, and similar charges and assessments, whether arising pre- or postpetition, to the appropriate taxing, regulatory, or other governmental authority in the ordinary course of the Debtors’ businesses.

In the ordinary course of business, the Debtors incur certain expenses related to the essential utility services such as electricity, gas, water, and telecommunications. On the Petition Date, the Debtors intend to seek approval of procedures to provide such utility providers with adequate assurance that the Debtors will continue to honor their obligations in the ordinary course.

In connection with the operation of the Debtors’ businesses, the Debtors maintain various insurance policies designed to protect their property, assets, key personnel, and business operations. The types of insurance policies maintained by the Debtors include general liability, excess liability, directors’ and officers’ liability, fiduciary liability, workers’ compensation, and property, crime, automobile, pollution, cyber liability, special risk, and terrorism coverage. The maintenance of certain insurance coverage is essential to the Debtors’ operations and is required by laws, various regulations, financing agreements and contracts. The Debtors believe that the satisfaction of their insurance obligations, whether arising pre- or postpetition, is necessary to maintain the Debtors’ relationships with their insurance providers and ensure the continued availability and commercially reasonable pricing of such insurance coverage. Accordingly, on the Petition Date, the Debtors intend to file a motion (the “ Insurance Motion ”) seeking authority from the Bankruptcy Court to continue to honor their insurance obligations in the ordinary course.

The Debtors’ businesses are labor intensive and rely upon various employees and independent contractors in approximately 15 states. Generally, members of the Debtors’ workforce rely upon their compensation to meet their daily living expenses. To minimize the uncertainty and potential distractions associated with Chapter 11 Case and the potential disruption of the Debtors’ operations resulting therefrom, on the Petition Date, the Debtors intend to seek authority from the Bankruptcy Court to continue to honor their obligations to their workforce in the ordinary course of business, including (i) the payment of pre- and postpetition wages, salaries, and reimbursable employee expenses, (ii) the payment of pre- and postpetition wages of independent contractors, (iii) the payment of pre- and postpetition accrued and unpaid employee benefits, and (iv) the continuation of certain of the Debtors’ benefit and incentive programs and policies.

The Debtors’ net operating losses (“ NOL ”) and certain other tax attributes are valuable assets of the Debtors’ estates. The Debtors estimate that, as of the Petition Date, the Basic Group will have incurred, for U.S. federal income tax purposes, at least $450 million of NOLs in addition to certain other tax attributes. These tax attributes are valuable because, for U.S. federal income tax purposes, a corporation can generally carry forward its losses to offset future income or tax, thereby reducing its tax liability in future periods. The Debtors believe that, even after taking account of any cancellation of debt impact of the Prepackaged Plan on the Debtors, the Debtors’ NOLs and other tax attributes may result in significant future tax savings. These savings could enhance the Debtors’ cash position and significantly contribute to the successful reorganization of the Debtors.

Section 382 of the U.S. Internal Revenue Code (the “ Tax Code ”) limits a corporation’s ability to use its NOLs and certain other tax attributes after the corporation undergoes a proscribed change of ownership. Although an ownership change of the Debtors is expected to occur upon implementation of the

Prepackaged Plan, the limitations imposed by section 382 of the Tax Code upon a change in ownership under a confirmed plan are significantly more relaxed than those otherwise applicable.

Accordingly, on the Petition Date, to protect the value of their NOL carryforwards and other tax attributes, the Debtors intend to (i) seek authority from the Bankruptcy Court to restrict the accumulation of Interests above a specified threshold, and (ii) reserve the right, in the event the Prepackaged Plan is subsequently withdrawn, to seek certain procedures and potential restrictions effective to the Petition Date with respect to the trading of Claims.

FOR A DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PREPACKAGED PLAN TO THE DEBTORS AND THE POTENTIAL IMPACT ON THE DEBTORS’ TAX ATTRIBUTES, SEE ARTICLE X HEREOF.

The Debtors intend to file various motions that are common to chapter 11 proceedings of similar size and complexity as the Chapter 11 Cases, including applications to retain various professionals to assist the Debtors in the Chapter 11 Cases.

Contemporaneously with the filing of the Petition, the Debtors will seek an order of the Bankruptcy Court scheduling the Confirmation Hearing to consider (i) the adequacy of this Disclosure Statement and the Solicitation in connection herewith and (ii) confirmation of the Prepackaged Plan. The Debtors anticipate that notice of these hearings will be published and mailed to all known holders of Claims and Interests at least 28 days before the date by which objections must be filed with the Bankruptcy Court.

In accordance with the Restructuring Support Agreement, the Debtors have agreed to proceed with the implementation of the Prepackaged Plan through the Chapter 11 Cases. Among the milestones contained in the Restructuring Support Agreement is the requirement that the Bankruptcy Court enter the order approving this Disclosure Statement and the solicitation procedures and confirming the Prepackaged Plan within 75 days after the Petition Date. The Restructuring Support Agreement also requires that the Effective Date occur within 90 days after the Petition Date. Although the Debtors will request that the Bankruptcy Court approve the timetable set forth in the Restructuring Support Agreement, there can be no assurance that the Bankruptcy Court will grant such relief or that the Effective Date will occur on such timetable. Achieving the various milestones under the Restructuring Support Agreement is crucial to reorganizing the Debtors successfully.

V.
MATTERS INVOLVING NON-DEBTORS

As noted above, the Basic Group comprises 31 entities; of those, 28 will be Debtors in the Chapter 11 Cases. Three entities, Basic Energy Services International, LLC, ESA de Mexico S.A. de C.v. and Robota Energy Equipment, LLC are non-Debtors. The non-Debtors do not conduct any business, do not have any material assets or liabilities, and will not be affected by the Restructuring or the Chapter 11 Cases.

VI.
SUMMARY OF THE PREPACKAGED PLAN

This section of this Disclosure Statement summarizes the Prepackaged Plan, a copy of which is annexed hereto as Exhibit A . This summary is qualified in its entirety by reference to the Prepackaged Plan.

Except to the extent that a holder of an Allowed Administrative Expense Claim other than a Fee Claim agrees to a different treatment, on the Effective Date or as soon thereafter as is reasonably practicable (but in no event later than 30 days after the Effective Date), the holder of such Allowed Administrative Expense Claim will receive, on account of such Allowed Claim, Cash in an amount equal to the Allowed amount of such Claim; provided , that Allowed Administrative Expense Claims representing liabilities incurred in the ordinary course of business by the Debtors (which, for the avoidance of doubt, do not include Restructuring Expenses), as Debtors in Possession, will be paid by the Debtors or the Reorganized Debtors, as applicable, in the ordinary course of business, consistent with past practice and in accordance with the terms and subject to the conditions of any orders or agreements governing, instruments evidencing, or other documents establishing, such liabilities.

All Professional Persons seeking awards by the Bankruptcy Court of compensation for services rendered or reimbursement of expenses incurred through and including the Effective Date under sections 327, 328, 330, 331, 503(b)(2), 503(b)(3), 503(b)(4), 503(b)(5), or 1103 of the Bankruptcy Code will (a) file, on or before the date that is forty five (45) days after the Effective Date, their respective applications for final allowances of compensation for services rendered and reimbursement of expenses incurred and (b) be paid in full, in Cash, in such amounts as are Allowed by the Bankruptcy Court in accordance with the order(s) relating to or allowing any such Fee Claim. The Debtors are authorized to pay, including from the Fee Escrow Account, which the Reorganized Debtors will establish in trust for the Professional Persons and fund with Cash on the Effective Date, compensation for professional services rendered and reimbursement of expenses incurred after the Effective Date in the ordinary course and without the need for Bankruptcy Court approval.

Any objections to Fee Claims will be served and filed (a) no later than twenty-one (21) days after the filing of the final applications for compensation or reimbursement or (b) such later date as ordered by the Bankruptcy Court upon a motion of the Reorganized Debtors.

In full and final satisfaction, settlement, release, and discharge of, and in exchange for, each Allowed DIP Facility Claim, each such Allowed DIP Facility Claim will be paid in full in Cash by the Debtors on the Effective Date equal to the Allowed amount of such DIP Facility Claim and all commitments under the DIP Facility Loan Agreement will terminate. Upon the indefeasible payment or satisfaction in full in Cash of the DIP Facility Claims (other than any DIP Facility Claims based on the Debtors’ contingent obligations under the DIP Facility Loan Agreement for which no claim has been made) in accordance with the terms of the Prepackaged Plan, on the Effective Date, all Liens granted to secure such obligations will be terminated and of no further force and effect. The Debtors’ contingent or unliquidated obligations under the DIP Facility Loan Agreement, to the extent not indefeasibly paid in full in Cash on the Effective

Date or otherwise satisfied by the Debtors in a manner acceptable to the DIP Facility Agent, any affected lender under the DIP Facility Loan Agreement, or any other holder of a DIP Facility Claim, as applicable, will survive the Effective Date and will not be released or discharged pursuant to the Prepackaged Plan or Confirmation Order, notwithstanding any provision hereof or thereof to the contrary.

On the later of (i) the Effective Date and (ii) the date on which such fees, expenses or disbursements would be required to be paid under the terms of the applicable DIP Facility Order, order entered by the Bankruptcy Court approving the Backstop Agreement, or the Restructuring Support Agreement, the Debtors or Reorganized Debtors (as applicable) will pay all fees, expenses and disbursements of (a) the DIP Facility Agent, (b) the DIP Facility Lenders, and (c) the Backstop Parties in each case, that have accrued and are unpaid as of the Effective Date and are required to be paid under or pursuant to the applicable DIP Facility Order, order entered by the Bankruptcy Court approving the Backstop Agreement, or the Restructuring Support Agreement. All payments of fees, expenses, or disbursements pursuant to this section will be subject in all respects to the terms of the applicable DIP Facility Order, order entered by the Bankruptcy Court approving the Backstop Agreement or the Restructuring Support Agreement.

Except to the extent that a holder of an Allowed Priority Tax Claim agrees to a different treatment, on the Effective Date or as soon thereafter as is reasonably practicable, the holder of such Allowed Priority Tax Claim will receive, on account of such Allowed Priority Tax Claim, Cash in an amount equal to the Allowed amount of such Claim; provided , that Allowed Priority Tax Claims representing liabilities incurred in the ordinary course of business by the Debtors, as Debtors in Possession, will be paid by the Debtors or the Reorganized Debtors, as applicable, in the ordinary course of business, consistent with past practice and in accordance with the terms and subject to the conditions of any orders or agreements governing, instruments evidencing, or other documents establishing, such liabilities.

A Claim or Interest is placed in a particular Class for all purposes, including voting, confirmation, and distribution under the Prepackaged Plan and under sections 1122 and 1123(a)(1) of the Bankruptcy Code; provided , that a Claim or Interest is placed in a particular Class for the purpose of receiving distributions pursuant to the Prepackaged Plan only to the extent that such Claim or Interest is an Allowed Claim or Allowed Interest in that Class and such Claim or Interest has not been satisfied, released, or otherwise settled prior to the Effective Date.

The Prepackaged Plan groups the Debtors together solely for the purpose of describing treatment under the Prepackaged Plan, confirmation of the Prepackaged Plan, and making Plan Distributions in respect of Claims against and Interests in the Debtors under the Prepackaged Plan. Such groupings will not affect any Debtor’s status as a separate legal entity, change the organizational structure of the Debtors’ business enterprise, constitute a change of control of any Debtor for any purpose, cause a merger or consolidation of any legal entities, or cause the transfer of any Assets; and, except as otherwise provided by or permitted under the Prepackaged Plan, all Debtors will continue to exist as separate legal entities.

The following table designates the Classes of Claims against and Interests in the Debtors and specifies which Classes are: (i) Impaired and Unimpaired under the Prepackaged Plan; (ii) entitled to vote to accept or reject the Prepackaged Plan in accordance with section 1126 of the Bankruptcy Code; and (iii) deemed to accept or reject the Prepackaged Plan:

Although all Other Secured Claims have been placed in one Class for purposes of nomenclature within the Prepackaged Plan, each Other Secured Claim, to the extent secured by a Lien on Collateral different from the Collateral securing a different Other Secured Claim, will be treated as being in a separate sub-Class for the purposes of voting to accept or reject the Prepackaged Plan and receiving Plan Distributions.

Any Class that, as of the commencement of the Confirmation Hearing, does not have at least one holder of a Claim or Interest that is Allowed in an amount greater than zero for voting purposes will be considered vacant, deemed eliminated from the Prepackaged Plan for purposes of voting to accept or reject the Prepackaged Plan, and disregarded for purposes of determining whether the Prepackaged Plan satisfies section 1129(a)(8) of the Bankruptcy Code with respect to such Class.

(a)    Acceptance by Certain Impaired Classes. Only holders of Allowed Claims in Classes 4 and 5 are entitled to vote to accept or reject the Prepackaged Plan. An Impaired Class of Claims will have accepted the Prepackaged Plan if (i) the holders of at least two-thirds (2/3) in amount of the Allowed Claims actually voting in such Class have voted to accept the Prepackaged Plan and (ii) the holders of more than one-half (1/2) in number of the Allowed Claims actually voting in such Class have voted to accept the Prepackaged Plan. Holders of Claims in Classes 4 and 5 will receive ballots containing detailed voting instructions.

(b)    Deemed Acceptance by Unimpaired Classes. Holders of Claims and Interests in Classes 1, 2, 3, 6, 7, and 10 are conclusively deemed to have accepted the Prepackaged Plan

pursuant to section 1126(f) of the Bankruptcy Code. Accordingly, such holders are not entitled to vote to accept or reject the Prepackaged Plan.

(c)    Deemed Rejection by Certain Impaired Classes. Holders of Claims and Interests in Classes 8 and 9 are deemed to have rejected the Prepackaged Plan pursuant to section 1126(g) of the Bankruptcy Code. Accordingly, such holders are not entitled to vote to accept or reject the Prepackaged Plan.

If any Class of Claims is deemed to reject the Prepackaged Plan or is entitled to vote on the Prepackaged Plan and does not vote to accept the Prepackaged Plan, the Debtors may (i) seek confirmation of the Prepackaged Plan under section 1129(b) of the Bankruptcy Code or (ii) amend or modify the Prepackaged Plan in accordance with the terms hereof and the Bankruptcy Code. If a controversy arises as to whether any Claims or Interests, any class of Claims or Interests, are impaired, the Bankruptcy Court will, after notice and a hearing, determine such controversy on or before the Confirmation Date.

Nothing contained in the Prepackaged Plan will be construed to waive a Debtor’s or other entity’s right to object on any basis to any Claim.

The legal, equitable, and contractual rights of the holders of Allowed Priority Non-Tax Claims are unaltered by the Prepackaged Plan. Except to the extent that a holder of an Allowed Priority Non-Tax Claim agrees to different treatment, on the later of the Effective Date and the date that is ten (10) Business Days after the date such Priority Non-Tax Claim becomes an Allowed Claim, or as soon thereafter as is reasonably practicable, each holder of an Allowed Priority Non-Tax Claim will receive, on account of such Allowed Claim, at the option of the Reorganized Debtors: (i) Cash in an amount equal to the Allowed amount of such Claim or (ii) other treatment consistent with the provisions of section 1129(a)(9) of the Bankruptcy Code.

The legal, equitable, and contractual rights of the holders of Allowed Other Secured Claims are unaltered by the Prepackaged Plan. Except to the extent that a holder of an Allowed Other Secured Claim agrees to different treatment, on the later of the Effective Date and the date that is ten (10) Business Days after the date such Other Secured Claim becomes an Allowed Claim, or as soon thereafter as is reasonably practicable, each holder of an Allowed Other Secured Claim will receive, on account of such Allowed Claim, at the option of the Reorganized Debtors: (i) Cash in an amount equal to the Allowed amount of such Claim, (ii) reinstatement or such other treatment sufficient to render such holder’s Allowed Other Secured Claim Unimpaired pursuant to section 1124 of the Bankruptcy Code, or (iii) return of the applicable Collateral in satisfaction of the Allowed amount of such Other Secured Claim.

On the Effective Date, on account of its Allowed ABL Facility Claim, each holder of an Allowed ABL Facility Claim will receive, in full and final satisfaction of its Allowed ABL Facility Claim, (i) payment in full of its Claim and termination of all letters of credit issued under the ABL Credit Agreement, (ii) its Pro Rata share of the Amended and Restated ABL Facility (if each of the ABL Lenders consents to enter into the Amended and Restated ABL Facility), or (iii) such other consideration satisfactory to each holder of an Allowed ABL Facility Claim.

On the Effective Date, (i) each holder of an Allowed Term Loan Claim will receive on account of the principal amount outstanding on such Claim, its Pro Rata share of the principal amount of the Amended and Restated Term Loan Facility subject to the terms set forth in the Amended and Restated Term Loan Agreement and (ii) amounts due as of the Effective Date to each holder of an Allowed Term Loan Claim on account of accrued and unpaid interest will be deemed to be accrued and unpaid interest under the Amended and Restated Term Loan Agreement payable on the first interest payment date thereunder, and (iii) amounts due as of the Effective Date to each holder of an Allowed Term Loan Claim on account of fees, charges, or other amounts payable under the Term Loan Agreement will be paid in Cash in full on the Effective Date, which, for the avoidance of doubt, will not include payment of any Make-Whole Amount or the Applicable Premium (as such terms are defined in the Term Loan Agreement).

The Amended and Restated Term Loan Agreement will be dated as of the Effective Date, and entered into by and among Reorganized Basic Parent, the other Reorganized Debtors, the Term Loan Agent, and the holders of the Term Loan Claims. The form of the Amended and Restated Term Loan Agreement will be contained in the Plan Supplement. The Amended and Restated Term Loan Agreement will contain the same representations, warranties, affirmative covenants, negative covenants and events of default contained in the Term Loan Agreement, except that the Amended and Restated Term Loan Agreement will include:

(a) a minimum liquidity covenant level of $25 million;

(b) amended definitions of “Availability”, “Liquidity” and “Maximum Capital Payment Amount” that will be amended by replacing such definitions in the Term Loan Agreement in their entirety with the following:

““ Availability ” means, at any time, the amount available to be drawn under the ABL Credit Agreement at such time; provided that any amount available to be drawn under a Non-Conforming ABL Credit Agreement shall not be included in Availability to the extent in excess of the amount that would be available to be drawn under a Conforming ABL Credit Agreement.”

““ Liquidity ” means, as of any date of determination, the sum of (i) all unrestricted cash balances and Cash Equivalents of Borrower and its consolidated Subsidiaries as of such date and (ii) Availability; provided that (i) 100% of all equity proceeds, including proceeds received by the Debtors in connection with the Rights Offering shall be included in Liquidity and (ii) the proceeds of any indebtedness under a Non-Conforming ABL Credit Agreement (including for the avoidance of doubt any such indebtedness resulting from a refinancing of the existing ABL Credit Agreement that constitutes a Non-Conforming ABL Credit Agreement) shall be excluded to the extent such proceeds are attributable to amounts available to be drawn under such Non-Conforming ABL Credit Agreement that are in excess of the amount that would be available to be drawn under a Conforming ABL Credit Agreement.”

““ Maximum Capital Payment Amoun t” means, for each fiscal quarter, an aggregate amount equal to (i) if Liquidity as of the last day of the preceding fiscal quarter is greater than $50,000,000, $25,000,000 plus the Roll Forward Increase, and (ii) if Liquidity as of the last day of the preceding fiscal quarter is less than or equal to $50,000,000, $20,000,000; provided, that amounts set forth in clauses (i) and (ii) above may be increased by the Required Lenders in their sole discretion upon written request by the Borrower, which request shall include revenue and margin projections for new equipment, if any; provided, however, for the period of time beginning with and including the Closing Date and ending with and including December 31, 2016, the Maximum Capital Payment Amount shall be equal to (i) $25,000,000 multiplied by (ii) (x) the number of days from and including the Closing Date through and including December 31, 2016 divided by (y) 90.”;

(c) new definitions of “ Capital Payment Credit ”, “Conforming ABL Credit Agreement”, “Non-Conforming ABL Credit Agreement” and “Roll Forward Increase” will be included in the Term Loan Agreement as follows: