Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
     This Registration Rights Agreement (this “Agreement”) is made and entered
into as of April 2, 2007 by and between Basic Energy Services, Inc., a Delaware
corporation (“Basic”), and the individuals and entities listed on Exhibit A
attached hereto who execute one or more counterpart signature pages to this
Agreement (the “Holders”).
RECITALS
     A. This Agreement is entered into pursuant to that certain Stock Purchase
Agreement, dated as of March 13, 2007 (the “Purchase Agreement”), by and among
Basic Energy Services, L.P. a Delaware limited partnership and an indirect and
wholly owned subsidiary of Basic (“Basic, LP”), and the shareholders and warrant
holder (the “Sellers”) of Sledge Drilling Holding Corp., a Texas corporation
(“Sledge”).
     B. The Purchase Agreement provides that, subject to the terms and
conditions of the Purchase Agreement, the Sellers will sell and Basic, LP will
purchase, all of the issued and outstanding capital stock of Sledge, following
which Sledge will be a wholly owned subsidiary of Basic, LP.
     C. In partial consideration for the shares of capital stock of Sledge being
purchased by Basic, LP from the Sellers, Basic, LP has agreed to deliver 430,191
shares of Common Stock, par value $0.01 per share, of Basic (the “Basic Common
Shares”) to Sellers in conjunction with Closing of the transaction contemplated
by the Purchase Agreement.
     D. It is a condition to the Closing of the transactions contemplated by the
Purchase Agreement that Basic and each of the Holders execute and deliver this
Agreement.
     Now, Therefore, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
AGREEMENT
     Section 1. Definitions and References.
     Unless otherwise defined herein, the capitalized terms in this Agreement
shall have the same meanings given to them in the Purchase Agreement. For
purposes of this Agreement, in addition to the definitions set forth elsewhere
herein, the following terms shall have the following respective meanings:
     “Affiliate” of a Holder shall mean a person who, directly or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with such Holder, or the spouse or children (or a trust
exclusively for the benefit of a spouse and/or children) of such Holder.
     "Material Disclosure Event” means, as of any date of determination, any
pending or imminent event relating to Basic, which, in the good faith
determination of the Board of Directors of Basic (i) upon the advice of counsel,
requires disclosure of material, non-public

 

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information relating to such event in any registration statement in order to
make such registration statement not materially misleading, (ii) upon the advice
of counsel, is otherwise not required to be publicly disclosed at that time
(e.g., on Forms 10-K, 8-K, or 10-Q) under applicable federal or state securities
laws, and (iii) if publicly disclosed at the time of such event, would have a
material adverse effect on the business, financial condition or prospects of
Basic or would materially and adversely affect a pending or proposed
acquisition, merger, recapitalization, consolidation, reorganization, financing
or similar transaction, or negotiations with respect thereto.
     “Prospectus” means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus, any free writing prospectus
relating thereto and any prospectus that discloses information previously
omitted from a prospectus filed as part of an effective registration statement
in reliance upon Rule 430A (or any successor provision thereto) under the
Securities Act) included in the Shelf Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of Registrable Securities covered by the Shelf Registration Statement
and by all other amendments and supplements to such prospectus, including all
material incorporated by reference in such prospectus and all documents filed
after the date of such prospectus by Basic under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and incorporated by reference therein.
     “Register,” “registered” and “registration” shall refer to a registration
effected by preparing and filing the Shelf Registration Statement in compliance
with the Securities Act of 1933, as amended (the “Securities Act”) and the rules
and regulations thereunder, and the declaration or ordering of effectiveness of
the Shelf Registration Statement by the United States Securities and Exchange
Commission (the “SEC”).
     “Registrable Securities” shall mean (i) the Basic Common Shares issued to a
Holder pursuant to the Purchase Agreement; and (ii) any Basic Common Shares or
other Basic securities issued as (or issuable upon the conversion or exercise of
any warrant, right, option or other convertible security which is issued as) a
dividend, stock split, combination or other distribution with respect to, or in
exchange for, or in replacement of, such shares. For purposes of this Agreement,
any Registrable Securities shall cease to be Registrable Securities when (a) the
Shelf Registration Statement covering such Registrable Securities has been
declared effective by the SEC and such Registrable Securities have been disposed
of pursuant to such effective Shelf Registration Statement, (b) such Registrable
Securities are sold by a Holder in a transaction that is exempt from
registration pursuant to Rule 144 under the Securities Act or a transaction in
which the Holder’s rights under this Agreement are not assigned, (c) such
Registrable Securities may be sold under Rule 144(k) under the Securities Act,
unless Basic shall have failed, upon request by a Holder, to remove all
restrictive legends on certificates representing such Registrable Securities in
connection with an anticipated transfer of such securities that is otherwise
permitted by this Agreement, or (d) such Registrable Securities have ceased to
be outstanding.
     “Shelf Registration Statement” means a “shelf” registration statement on
Form S-3 (or if Form S-3 is not available to Basic, on such other appropriate
form) filed under the Securities Act providing for the registration of, and the
sale on a continuous or delayed basis by the Holders of, the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule

 

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that may be adopted by the SEC, filed by Basic pursuant to the provisions of
Section 2 hereof, including the Prospectus contained therein, any amendments and
supplements to such registration statement, including post-effective amendments,
and all exhibits and all material incorporated by reference in such registration
statement.
     Section 2. Registration.
     (a) Basic shall, as promptly as practicable after the Effective Time, and
in any event no later than the later of (i) May 15, 2007, and (ii) 30 days after
the Effective Time, file with the SEC a Shelf Registration Statement relating to
the offer and sale of the Registrable Securities by the Holders from time to
time in accordance with the methods of distribution elected by such Holders and
set forth in such Shelf Registration Statement. Basic shall thereafter use
reasonable best efforts to cause such Shelf Registration Statement to become
effective under the Securities Act as promptly as practicable.
     (b) Basic shall use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective under the Securities Act (which
shall include using such efforts to remove any stop orders), subject to
Section 4 hereof, in order to permit the Prospectus forming a part thereof to be
usable by Holders until the date (the “Termination Date”) that is the earlier of
(i) such time as none of the Basic Common Shares issued to the Holders pursuant
to the Purchase Agreement continue to constitute Registrable Securities, and
(ii) 24 months, plus the time periods of any Suspension Periods (as defined
below) imposed on the Holders by Basic, after the Effective Time.
     Section 3. Piggy-Back Rights.
     (a) Participation in Underwritten Offerings. If Basic proposes to sell any
Basic Common Shares in an underwritten public offering for cash pursuant to a
registration statement under the Securities Act prior to the Termination Date (a
“Subject Offering”), then Basic shall give not less than 20 Business Days’
advance written notice to each Holder of its intention to do so. Such notice
shall include an estimate of the aggregate offering price of the total number of
Basic Common Shares proposed to be offered and shall offer each Holder the right
to request inclusion of any of such Holder’s Registrable Securities in the
Subject Offering on the same terms and conditions as apply to the Basic Common
Shares being offered by Basic through underwriters in the Subject Offering. Upon
the written request of any Holder (a “Piggy-Back Request”), given within 10
Business Days following the receipt by the Holders of any such written notice,
Basic shall include in such Subject Offering, subject to the proration
provisions of Section 3(b), such number of Basic Common Shares as shall be set
forth in such Piggy-Back Request and that have not been withdrawn from such
Piggy-Back Request pursuant to Section 3(c) (the “Piggy-Back Shares”). Subject
to Section 3(b) below, Basic shall use its reasonable best efforts to include in
the prospectus and registration statement for a Subject Offering all such
Registrable Securities so requested to be included therein; provided, however,
that Basic may at any time withdraw or cease proceeding with any such Subject
Offering if it shall at the same time withdraw or cease proceeding with the
registration of all other Basic Common Shares originally proposed to be
registered. The Piggy-Back Shares shall be included in the Subject Offering by
means of a prospectus supplement relating to the Shelf Registration Statement
and the other registration statement(s) registering Basic Common Shares pursuant
to which such

 

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shares are being offered and sold in the Subject Offering. The number of Subject
Offerings in which Holders may participate shall not be limited prior to the
Termination Date.
     (b) Priority. If the lead managing underwriter of the Subject Offering
advises Basic in writing that the inclusion of the Piggy-Back Shares in such
offering would potentially interfere with the offering of Basic’s securities,
and Basic notifies the requesting Holders in writing of such advice, then Basic
will be obligated only to include in the Subject Offering that number of shares
that, in the reasonable, good faith judgment of the lead managing underwriter,
would not potentially interfere with the offering of Basic’s securities, (the
“Maximum Number”) as follows and in the following order of priority: (i) first,
such number of Basic Common Shares as Basic intended to be sold by Basic,
(ii) second, if and to the extent that the number of Basic Common Shares to be
sold under clause (i) is less than the Maximum Number, such number of Basic
Common Shares as the Holders and any other holders of contractual piggy-back
rights shall have intended to sell that, when added to the number of Basic
Common Shares to be sold under clause (i), is less than or equal to the Maximum
Number, which number of shares shall be allocated among such Holders and others
pro rata based on the number of Basic Common Shares originally requested to be
included in such offering, and (iii) other securities of Basic requested to be
included in such registration.
     (c) Withdrawal. Notwithstanding any request under this Section 3, any
Holder may elect in writing to withdraw its request for inclusion of its
Piggy-Back Shares in any offering; provided that (i) such request must be made
prior to the public announcement of such offering, or, if, as a result of the
proration provisions of Section 3(b), the Holders shall not be entitled to
include all Piggy-Back Shares in a Subject Offering that the Holders have
requested to be included, such request must be made within 3 Business Days of
being notified of such proration, and (ii) such withdrawal shall be irrevocable.
     Section 4. Suspension and Standstill Periods.
     (a) Suspension Period. Basic may, by notice in writing to each Holder,
require the Holder to suspend the use of any Prospectus included in the Shelf
Registration Statement covering the Registrable Securities, during the
occurrence and continuance of a Material Disclosure Event and until Basic has
prepared and provided to the Holder and, if applicable, filed with the SEC, any
prospectus supplement or amendment to the Shelf Registration Statement required
by Section 5 (such period, a “Suspension Period”). Notwithstanding the
foregoing, no Suspension Period shall exceed 90 days in any one instance and
Basic may not exercise its rights set forth in the immediately preceding
sentence more than twice in any 12-month period. Each Holder agrees that, upon
receipt of notice from Basic of the occurrence of a Material Disclosure Event (a
“Suspension Notice”), such Holder will forthwith discontinue any disposition of
Registrable Securities pursuant to the Shelf Registration Statement or any
public sale or distribution, including pursuant to Rule 144 under the Securities
Act, until the earlier of (i) the expiration of the Suspension Period and
(ii) such Holder’s receipt of a notice from Basic to the effect that such
Suspension Period has ended. Any Suspension Notice shall be accompanied by a
certificate of the President or any Vice President of Basic confirming the
existence of the Material Disclosure Event, but such notice need not specify the
nature of the event giving rise to such Material Disclosure Event. If so
directed by Basic, such Holder will deliver to Basic (at Basic’s expense) all
copies, other than permanent file copies, then in such Holder’s possession,

 

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of the most recent Prospectus covering such Registrable Securities at the time
of receipt of such Suspension Notice. In the event of a Suspension Notice, Basic
shall, promptly after such time as the related Material Disclosure Event no
longer exists, take any and all actions necessary or desirable to give effect to
any Holders’ rights under this Agreement that may have been affected by such
notice.
     (b) Holder Standstill Period. If requested by the lead managing
underwriter, each Holder agrees not to, without the prior written consent of the
lead managing underwriter for any underwritten offering of (i) securities of
Basic that are the same as, or similar to, the Registrable Securities, or
(ii) any securities convertible into, or exchangeable or exercisable for,
securities of Basic that are the same as, or similar to, the Registrable
Securities, effect any disposition (except for dispositions included in, or
pursuant to, such an underwritten offering) pursuant to any registration
statement or any public sale or distribution, including pursuant to Rule 144
under the Securities Act, of any Registrable Securities or any securities
convertible into, or exchangeable or exercisable for, any securities of Basic
that are the same as, or similar to, the Registrable Securities, during the
period commencing 10 Business Days prior to the date of the final prospectus
relating to the offering of such securities of Basic (to the extent timely
notified in writing by Basic or the managing underwriter) and ending on the 90th
day after such date; provided, however, that if any Affiliate who is a holder of
securities of Basic shall be subject to a shorter standstill period or receives
more advantageous terms relating to the standstill period, then the standstill
period imposed by this Section 4(b) shall be such shorter period and also on
such more advantageous terms, and the Holders shall not be required to sign
lock-up agreements unless all of Basic’s directors and executive officers have
signed lock-up agreements with the managing underwriters. Any such lock-up
agreements signed by the Holders shall contain reasonable and customary
exceptions, including, without limitation, the right of a Holder to make
transfers to certain Affiliates who agree to be bound by the terms of the
lock-up agreement.
     Section 5. Obligations of Basic. Basic shall:
     (a) before filing the Shelf Registration Statement or any amendments
thereto or any supplements to the Prospectus, Basic will furnish to one counsel
(if any) or Holder representative (if any) designated by the Holders of a
majority of the Registrable Securities draft copies of all such documents
proposed to be filed at least seven days prior to such filing, which documents
will be subject to the reasonable review of each Holder and its agents and
representatives; and not include in the Shelf Registration Statement information
concerning or relating to any Holder to which such Holder shall reasonably
object in writing (unless the inclusion of such information is required by
applicable law or the regulations of any national securities exchange to which
Basic may be subject);
     (b) cause the Shelf Registration Statement and any amendment thereto and
any Prospectus, as of the effective date of the Registration Statement and any
amendment or supplement thereto, (i) to comply in all material respects with the
applicable requirements of the Securities Act and (ii) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that Basic shall have no responsibility for information regarding the Holders
provided to Basic in writing for inclusion in the Shelf Registration Statement
or any Prospectus;

 

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     (c) if reasonably requested by a Holder, promptly prepare and file with the
SEC a Prospectus supplement or post-effective amendment to the Shelf
Registration Statement including such information as such Holder reasonably
specifies should be included therein with respect to such Holder, including,
without limitation, information relating to the planned distribution of
Registrable Securities, the number of Registrable Securities being sold by such
Holder, the name and description of such Holder, the offering price of such
Registrable Securities and any discount, commission or other compensation
payable in respect of the Registrable Securities being sold, the purchase price
being paid therefor to such Holder and information with respect to any other
terms of the offering of the Registrable Securities to be sold;
     (d) prepare and file with the SEC any required filings under Rule 424 or
430A under the Securities Act or any required supplements to the Prospectus used
in connection with the Shelf Registration Statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities covered by the Shelf Registration Statement
through the Termination Date;
     (e) furnish without charge to each Holder such number of copies of the
Shelf Registration Statement and each amendment thereto, the Prospectus included
in such Shelf Registration Statement and the documents incorporated by reference
into such Shelf Registration Statement or Prospectus, as applicable in
conformity with the requirements of the Securities Act, as such Holder may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Registrable Securities by such Holder (Basic hereby
consenting to the use in accordance with all applicable laws of the Prospectus
by the Holders in connection with the offering and sale of the Registrable
Securities covered by the Prospectus);
     (f) use all commercially reasonable efforts to register or qualify the
Registrable Securities covered by the Shelf Registration Statement under the
securities or Blue Sky laws of such jurisdiction within the United States as
shall be reasonably requested by the Holders for the distribution of the
Registrable Securities covered by the Shelf Registration Statement; provided,
that Basic shall not be required to qualify to do business in, to file a general
consent to service of process or to subject itself to material taxation in any
jurisdiction wherein it would not but for the requirements of this paragraph
(c) be obligated to do so; and provided, further, that Basic shall not be
required to qualify such Registrable Securities in any jurisdiction in which the
securities regulatory authority requires any Holder to submit any of such
Holder’s Registrable Securities to the terms, provisions and restrictions of any
escrow, lockup or similar agreement(s) for consent to sell Registrable
Securities in such jurisdiction unless such Holders agrees to do so;
     (g) comply with the provisions of the Securities Act applicable to Basic
and reasonably cooperate with the Holders with respect to the disposition of all
Registrable Securities covered by the Shelf Registration Statement in accordance
with the intended method or methods of distribution set forth therein;
     (h) take all reasonable actions necessary to ensure that the Registrable
Securities are and continue to be listed on the New York Stock Exchange or such
other market as may be the principal market on which Basic Common Shares are
quoted or listed;

 

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     (i) promptly notify the Holders, at any time when the Prospectus relating
thereto is required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which, the Prospectus
included in the Shelf Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading and, at the request
of any Holder, promptly prepare and furnish to such Holder a reasonable number
of copies of a supplement to such Prospectus, or a revised Prospectus, as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities, such Prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, that in the event of a Material Disclosure
Event, Basic shall be entitled to defer preparing and furnishing such supplement
or amendment until the end of the applicable Suspension Period, at which time it
shall so notify the Holders and shall prepare and furnish to the Holders any
such supplement or amendment as may then be required;
     (j) promptly notify the Holders (i) when a Prospectus supplement or
post-effective amendment to the Shelf Registration Statement is proposed to be
filed and, with respect to a post-effective amendment to the Shelf Registration
Statement, when the same has become effective, (ii) of any request by the SEC or
any other federal or state governmental authority for amendments or supplements
to the Shelf Registration Statement or the Prospectus, (iii) of the issuance by
the SEC of any stop order suspending the effectiveness of the Shelf Registration
Statement or the initiation of any proceedings for that purpose, or (iv) of the
receipt by Basic of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose;
     (k) provide a transfer agent and registrar and provide a CUSIP number for
all such Registrable Securities covered by the Shelf Registration Statement, in
each case not later than the effective date of the Shelf Registration Statement;
     (l) cooperate with the Holders to facilitate the timely preparation and
delivery of certificates representing such Registrable Securities to be sold
under the Shelf Registration Statement, which certificates shall not bear any
restrictive legends except as required by law, or in private sales;
     (m) if any Registrable Securities are sold pursuant to the Shelf
Registration Statement, make generally available to the Holders an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act no
later than the date such information is required to be filed with the Securities
and Exchange Commission after the end of the 12-month period beginning with the
first day of Basic’s first fiscal quarter commencing after the effective date of
the Shelf Registration Statement, which earnings statement shall cover said
12-month period, and which requirement will be deemed to be satisfied if Basic
satisfies the requirements of Rule 158 under the Securities Act and otherwise
complies with all applicable rules and regulations of the SEC.
     Section 6. Obligations of Holder. Each Holder shall:

 

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     (a) furnish to Basic such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of such securities
as Basic shall reasonably request and as shall be required in connection with
the actions to be taken by Basic hereunder, which shall be a condition precedent
to the obligations of Basic to include Registrable Securities of a Holder in the
Shelf Registration Statement;
     (b) promptly notify Basic of any changes in the information set forth in
the Shelf Registration Statement and the Prospectus or any document incorporated
by reference therein regarding such Holder or its plan of distribution, and
shall not use, distribute or otherwise disseminate any free writing prospectus,
as defined in Rule 405 under the Securities Act in connection with the sale of
Registrable Securities under the Shelf Registration Statement, without the prior
consent of Basic;
     (c) not disclose any material non-public information obtained by such
Holder in connection with this Agreement, and shall not use any such information
as the basis for any market transactions in the securities of Basic or its
Affiliates, unless and until such information is made generally available to the
public; and
     (d) following receipt of any supplement to any Prospectus, deliver such
supplement or revised Prospectus in connection with any offers or sales of
Registrable Securities, and not deliver or use any Prospectus not so amended,
supplemented or revised. Following delivery of notice that Basic is preparing
and filing with the SEC a supplement to the Prospectus, the Holders shall not
make any further sales of Registrable Securities pursuant to the Shelf
Registration Statement until the Holders receive such supplement from Basic.
     Section 7. Expenses. All expenses incurred in connection with the
registration pursuant to this Agreement, excluding underwriters’ or brokers’
fees, discounts and commissions, but including, without limitation, all
registration, filing, listing, application or qualification fees and expenses,
word processing, duplicating and printers’ fees and expenses, messenger and
delivery expenses, all fees and expenses of complying with state securities or
Blue Sky laws, the fees and disbursements of counsel for Basic, the fees and
disbursements of independent certified public accountants of Basic, and
reasonable fees and expenses of not more than one counsel, designated by the
Holders owning a majority of the Registrable Securities, for the Holders (as a
group), shall be paid by Basic. Each Holder shall bear and pay all underwriting
fees, discounts and commissions and brokerage fees, any out-of-pocket expenses
of such Holder, including any fees and expenses of counsel to such Holder (other
than as set forth in the prior sentence), and any capital gains, income or
transfer taxes applicable to securities offered for the account of such Holder
in connection with any registrations, filings and qualifications made pursuant
to this Agreement.
     Section 8. Transfer of Registration Rights. The registration rights of a
Holder under this Agreement with respect to any Registrable Securities shall not
be transferred or assigned except to an Affiliate of such Holder. It shall be a
condition to any such transfer or assignment of such registration rights to an
Affiliate that (i) such Holder shall give Basic written notice prior to the time
of such transfer stating the name and address of the transferee and identifying
the securities with respect to which the rights under this Agreement are being
transferred; (ii) such transferee shall agree in writing, in form and substance
reasonably satisfactory to Basic, to be bound as a

 

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Holder by the provisions of this Agreement; and (iii) immediately following such
transfer the further disposition of such securities by such transferee is
restricted under the Securities Act; and provided, further, that no Holder shall
be entitled to designate any such transferee if the Registrable Securities would
continue to be Registrable Securities for a period longer than would be the case
in the hands of such Holder.
     Section 9. Indemnification. If any Registrable Securities is included in
the Shelf Registration Statement under this Agreement:
     (a) Indemnification by Basic. Basic shall indemnify and hold harmless each
Holder, such Holder’s directors, officers, partners, legal counsel, accountants,
and any selling agent selected by such Holder with respect to the offering of
such Registrable Securities, including underwriters (as defined in the
Securities Act), and each person, if any, who controls such Holder or selling
agent within the meaning of Section 15 of the Securities Act, against any
losses, claims, damages or other liabilities, joint or several, to which they
may become subject under the Securities Act or otherwise (collectively,
“Losses”), insofar as such Losses (or proceedings in respect thereof) arise out
of or are based upon (i) any untrue or alleged untrue statement of any material
fact contained in the Shelf Registration Statement or any preliminary or final
Prospectus included therein (including any free-writing prospectus filed under
Rule 424 under the Securities Act or any amendments or supplements thereto) or
any document incorporated by reference in any of the foregoing or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the case of any Prospectus, in light of the circumstances under which they
were made, not misleading; or (ii) any violation by Basic of the Securities Act,
Exchange Act, any state securities law or any rule or regulation promulgated
thereunder; and Basic shall reimburse each such Holder, such Holder’s directors,
officers, partners, legal counsel, accountants, and such selling agent or
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such Loss or action; provided,
however, that the indemnity agreement contained in this Section 9(a) shall not
apply to amounts paid in settlement of any such Loss or action if such
settlement is effected without the consent of Basic (which consent shall not be
unreasonably withheld, conditioned or delayed); provided, further, that Basic
shall have no obligation to provide indemnification hereunder for any such Loss
or action to the extent that it arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Shelf Registration Statement, preliminary or final Prospectus, or amendments
or supplements thereto, in reliance upon and in conformity with written
information furnished by or on behalf of any such Holder or such Holder’s
directors and officers, participating person or controlling person, expressly
for use in connection with such registration. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
any such Holder, such Holder’s directors and officers, participating person or
controlling person, and shall survive the transfer of such securities by such
Holder and any termination of this Agreement.
     (b) Indemnification by the Holders. Each Holder severally and not jointly
shall indemnify and hold harmless Basic, each of its directors, officers, legal
counsel and accountants, each person, if any, who controls Basic within the
meaning of Section 15 of the Securities Act, and each agent and any underwriter
(within the meaning of the Securities Act) for Basic against any Losses, joint
or several, to which Basic or any such director, officer, legal counsel,

 

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accountant, controlling person or underwriter may become subject under the
Securities Act or otherwise, insofar as such Losses (or proceedings in respect
thereof) arise out of or are based upon any untrue or alleged untrue statement
of any material fact contained in the Shelf Registration Statement or any
preliminary or final Prospectus included therein (including any free-writing
prospectus filed under Rule 424 under the Securities Act or any amendments or
supplements thereto) or any document incorporated by reference in any of the
foregoing or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in the case of any Prospectus, in light of the
circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Shelf Registration
Statement, preliminary or final Prospectus, or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
by or on behalf of such Holder expressly for use in connection with such
registration; and each such Holder shall reimburse any legal or other expenses
reasonably incurred by Basic or any such director, officer, legal counsel,
accountant, controlling person, or underwriter in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this Section 9(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of such Holder
(which consent shall not be unreasonably withheld, conditioned or delayed);
provided, further, that the aggregate liability of each Holder hereunder shall
be limited to an amount equal to the net proceeds (after deducting any
underwriting or broker’s discounts or commissions but before deducting expenses)
received by such Holder from the sale of Registrable Securities covered by such
Shelf Registration Statement.
     (c) Notice of Claims, Etc. Promptly after receipt by any person entitled to
indemnity under Section 9(a) or (b) hereof, of notice of the commencement of any
action or proceeding involving a claim referred to in such sections, such
indemnified party shall, if indemnification is sought against an indemnifying
party under this Section 9, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in and assume the defense thereof with counsel selected by the
indemnifying party and reasonably satisfactory to the indemnified party;
provided, however, that an indemnified party shall have the right to retain its
own counsel, with all fees and expenses thereof to be paid by such indemnified
party (unless (i) the indemnifying party fails to assume the defense of such
action with counsel satisfactory to the indemnified party in its reasonable
judgment or (ii) such indemnified party reasonably objects to such assumption on
the grounds that there may be defenses available to it that are different from
or in addition to the defenses available to such indemnifying party, in which
event the indemnified party shall have the right to control its defense and
shall be reimbursed by the indemnifying party for the expenses incurred in
connection with retaining one separate counsel). The failure to notify an
indemnifying party promptly of the commencement of any such action, if and to
the extent materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 9, but the omission so to notify the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 9. Anything in this Section 9(c) to the contrary
notwithstanding, an indemnifying party shall not be liable for the settlement of
any action effected without its prior written consent

 

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(which consent shall not unreasonably be withheld, conditioned or delayed), but
if settled with the prior written consent of the indemnifying party, or if there
shall be a final judgment adverse to the indemnified party, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior consent of the indemnified party, consent to entry of any
judgment or enter into any settlement or compromise, with respect to any pending
or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim), which (i) does not include
as a term thereof the unconditional release of the indemnified party from all
liability in respect of such action or claim or (ii) includes a statement as to,
or an admission of, fault, culpability or a failure to act, by or on behalf of
the indemnified party.
     (d) Contribution. To the extent any indemnification by an indemnifying
party is prohibited or limited by law or held by a court of competent
jurisdiction to be unavailable, the indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions which resulted in such Losses,
as well as any other relevant equitable considerations. The relative fault of
such indemnifying party and indemnified party shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the Losses referred
to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
     (e) Miscellaneous. The amount payable by an indemnifying party or payable
to an indemnified party as a result of the Losses referred to in this Section 9
shall be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses incurred by such indemnified party in
connection with investigating or defending any such action or claim, payable as
the same are incurred. The indemnification and contribution required by this
Section 9 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred. The provisions of this Section 9
will remain in full force and effect, regardless of any investigation made by or
on behalf of any Holder or Basic or any of the officers, directors or
controlling persons referred to in this Section 9, and will survive the sale by
the Holders of Registrable Securities.
     Section 10. Rule 144. With a view to making available the benefits of
certain rules and regulations of the SEC that may permit the sale of the
Registrable Securities to the public

 

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without registration, Basic agrees until the Termination Date to use its
commercially reasonable efforts to (i) file in a timely manner all reports and
other documents required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder and
(ii) take such further action as each Holder may reasonably request (including,
but not limited to, providing any information necessary to comply with Rule 144,
if available with respect to resales of the Registrable Securities under the
Securities Act), all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (x) Rule 144 under the
Securities Act, as such rule may be amended from time to time or (y) any other
rules or regulations now existing or hereafter adopted by the SEC. Upon the
written request of a Holder, Basic shall deliver to the Holder a written
statement as to whether it has complied with such requirements.
     Section 11. General Provisions.
          (a) Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered, transmitted by facsimile, delivered by nationally
recognized overnight courier or if deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid. Notices shall be
delivered at the addresses set forth below such party’s name on the signature
pages hereto. Any party hereto may by notice so given change its address or
facsimile number for future notices hereunder. Notice shall conclusively be
deemed to have been given when personally delivered or on the third Business Day
after deposit in the mail in the manner set forth above.
     (b) Entire Agreement; Independence of Obligations. This Agreement
constitutes and contains the entire agreement and understanding of the parties
with respect to the subject matter hereof and supersedes any and all prior
negotiations, correspondence, agreements, understandings, duties or obligations
between the parties respecting the subject matter hereof.
     (c) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware without regard to
conflicts of law principles.
     (d) Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, then such provision(s) shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
its terms.
     (e) Third Parties. Except as provided in Section 9, nothing in this
Agreement, express or implied, is intended to confer upon any person, other than
the parties hereto and their successors and assigns, any rights or remedies
under or by reason of this Agreement.
     (f) Successors and Assigns. Subject to the provisions of Section 8, the
provisions of this Agreement shall inure to the benefit of, and shall be binding
upon, the successors and permitted assigns of the parties hereto.

 

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     (g) Captions. The captions to sections of this Agreement have been inserted
for identification and reference purposes only and shall not be used to construe
or interpret this Agreement.
     (h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one instrument. Delivery of an executed counterpart of
this Agreement by facsimile shall be effective to the fullest extent permitted
by applicable law.
     (i) Costs and Attorneys’ Fees. In the event that any action, suit or other
proceeding is instituted concerning or arising out of this Agreement or any
transaction contemplated hereunder, the prevailing party shall recover all of
such party’s costs and attorneys’ fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
[signature page follows]

 

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     In Witness Whereof, the parties hereto have executed this Registration
Rights Agreement as of the date first above written.

              Basic Energy Services, Inc.  
 
  By:   /s/ Kenneth V. Huseman 
 
            Name: Kenneth V. Huseman     Title: Chief Executive Officer
 
            Basic Energy Services, Inc.     400 West Illinois, Suite 800    
Midland, Texas 79701     Facsimile: (432) 570-0598     Attn:Kenneth V. Huseman,
Chief Executive Officer

With a copy to:
                                                            
                                                            
                                                            
[Signature Page to Registration Rights Agreement]

 

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     In Witness Whereof, the parties hereto have executed this Registration
Rights Agreement as of the date first above written.

              HOLDERS
 
            /s/ Spencer D. Armour III            Spencer D. Armour III
 
            Spencer D. Armour III
 
                 
                                        ,                                       
 
  Facsimile:    
 
       
 
            /s/ David W. Sledge           David W. Sledge
 
            David W. Sledge
 
                 
                                        ,                                       
 
  Facsimile:    
 
       
 
            /s/ Dale Redman           Dale Redman
 
            Dale Redman
 
                 
                                        ,                                       
 
  Facsimile:    
 
       

                  Shamrock Equipment Co., Inc.
 
           
 
  By:       /s/ Thomas E. Kelly                Name:   Thomas E. Kelly    
Title:   President/CEO

                  Shamrock Equipment Co., Inc.
 
                     
                                        ,                                       
   
 
  Facsimile:        
 
           

[Signature Page to Registration Rights Agreement]

 

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              /s/ Michael Harrison           Michael Harrison     Michael
Harrison
 
                 
                                        ,                                      
 
  Facsimile:    
 
       

                  McArthur Family Trust
 
           
 
  By:       /s/ Charles McArthur                Name:   Charles McArthur    
Title:   Trustee

              McArthur Family Trust
 
                 
                                        ,                                      
 
  Facsimile:    
 
       

                  Cavic Interest, LLC
 
           
 
  By:       /s/ Patrick S. Gerald                Name:   Patrick S. Gerald    
Title:   President

              Cavic Interest, LLC
 
                 
                                        ,                                     
 
  Facsimile:    
 
       

                  BV Investments, LP, d/b/a Bandera Ventures
 
  By:       /s/ Charles A. Anderson                Name:   Charles A. Anderson  
  Title:   Authorized Agent

              Bandera Ventures
 
                 
                                        ,                                     
 
  Facsimile:    
 
       

[Signature Page to Registration Rights Agreement]

 

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                  D-K Stanhope     a Texas General Partnership
 
           
 
  By:   /s/ Richard E. Anderson                  Name:   Richard E. Anderson    
Title:   General Partner

              D-K Stanhope
 
                 
                                        ,                                      
 
  Facsimile:    
 
       

                  Atlas Resources, Inc.
 
           
 
  By:   /s/ Thomas Ross                 Name:   Thomas Ross     Title:   Vice
President

              Atlas Resources, Inc.
 
                 
                                        ,                                      
 
  Facsimile:    
 
       

              /s/ Ted Collins, Jr.           Ted Collins, Jr.
 
            Ted Collins, Jr.
 
                 
                                        ,                                      
 
  Facsimile:    
 
       
 
            /s/ J. Patrick Collins      
 
            J. Patrick Collins
 
            J. Patrick Collins
 
                 
                                        ,                                      
 
  Facsimile:    
 
       

[Signature Page to Registration Rights Agreement]

 

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                  Collins & Jones Investments, LLC
 
           
 
  By:       /s/  Don Jones               Name:   Don Jones     Title:  
President

              Collins & Jones Investments, LLC
 
                 
                                        ,                                     
 
  Facsimile:    
 
       

                  Collins & Young, LLC
 
           
 
  By:       /s/  Ted Collins               Name:   Ted Collins     Title:   Vice
President

              Collins & Young, LLC
 
                 
                                        ,                                      
 
  Facsimile:    
 
       

              /s/  Tim G. Culp           Tim G. Culp
 
            Tim G. Culp
 
                 
                                        ,                                     
 
  Facsimile:    
 
       

                  JSL Interests, Ltd.
 
           
 
  By:   /s/  Jeff S. Lott               Name:   Jeff S. Lott     Title:  
President

              JSL Interests, Ltd.
 
                 
                                        ,                                      
 
  Facsimile:    
 
       

[Signature Page to Registration Rights Agreement]

 

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              /s/  Brett Smith           Brett Smith
 
       
 
  Brett Smith    
 
                 
                                        ,                                     
 
  Facsimile:    
 
       
 
            /s/  Kelcy Warren           Kelcy Warren
 
            Kelcy Warren
 
                 
                                        ,                                     
 
  Facsimile:    
 
       

              D. B. Zwirn Special Opportunities Fund, LP
 
       
 
  By:   /s/  David C. Lee
 
       
 
  Name:   David C. Lee 
 
       
 
  Title:   President 
 
       

              D. B. Zwirn Special Opportunities Fund, LP
 
                 
                                        ,                                      
 
  Facsimile:    
 
       

              Drawbridge Special Opportunity Fund, LP
 
       
 
  By:   /s/  Constantine Dakolias
 
       
 
  Name:   Constantine Dakolias 
 
       
 
  Title:   Chief Credit Officer 
 
       

              Drawbridge Special Opportunity Fund, LP
 
                 
                                        ,                                    
 
  Facsimile:    
 
       

[Signature Page to Registration Rights Agreement]