USWS further agreed (a) to amend the terms of the Equity Linked Convertible Notes and
the Certificate of Designations (as defined in the Merger Agreement) regarding the USWS Series A Preferred Stock, and to use commercially reasonable efforts to amend the Pool A Performance Awards and Pool B Performance Awards, (b) not to
solicit proposals relating to alterative business combination transactions or, subject to certain exceptions, enter into discussions or an agreement concerning or provide confidential information in connection with any proposals for alternative
business combination transactions and (c) as soon as practicable following the date of the Merger Agreement convene and hold a special meeting of the holders of USWS Common Stock for the purposes of obtaining the Company Stockholder Approval
(as defined in the Merger Agreement).
Closing Conditions
The consummation of the Merger is subject to customary conditions, including, among others, (a) receipt of the Company Stockholder
Approval, (b) the absence of any applicable law or order prohibiting the consummation of the Merger or the Parent Stock Issuance (as defined in the Merger Agreement), (c) the expiration or termination of the HSR Act waiting period,
(d) the effectiveness of the Registration Statement, (e) approval of the Parent Stock Issuance for listing on Nasdaq, (f) subject to certain exceptions, the accuracy of the representations and warranties of each party, (g) the
performance in all material respects of each party of its obligations under the Merger Agreement and (h) the absence of a Company Material Adverse Effect and Parent Material Adverse Effect (as such terms are defined in the Merger Agreement).
Termination
The Merger Agreement contains certain termination rights for both ProFrac and USWS and further provides that, upon termination of the Merger
Agreement under specified circumstances, USWS may be required to pay ProFrac a termination fee of $8,000,000 or reimburse ProFrac for certain expenses in an amount up to $3,000,000, in each case, depending on the termination event.
The Merger Agreement is filed as Exhibit 2.1 hereto and is hereby incorporated into this report by reference. The Merger Agreement has been
included to provide investors with information regarding its terms. It is not intended to provide any other factual information about the ProFrac, USWS, or any of their respective subsidiaries or affiliates, or to modify or supplement any factual
disclosures about ProFrac or USWS included in their respective public reports filed with the SEC. The Merger Agreement contains representations, warranties and covenants of each of ProFrac and USWS that were made only for purposes of the Merger
Agreement as of specific dates, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of
allocating contractual risk between the parties to the Merger Agreement, instead of establishing these matters as facts, and may be subject to standards of materiality that differ from those applicable to investors. Investors should not rely on the
representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of ProFrac, USWS, or any of their respective subsidiaries or affiliates. Investors should read the Merger Agreement
together with the other information concerning ProFrac and USWS that each company publicly files in reports and statements with the Securities and Exchange Commission (the SEC).
Voting Agreement
Concurrently with the execution and delivery of the Merger Agreement, certain stockholders of USWS (each, a Supporting
Stockholder and, collectively, the Supporting Stockholders) entered into a Voting Agreement with ProFrac (the Voting Agreement). Pursuant to the Voting Agreement, each Supporting Stockholder agreed to,
among other things, (i) support and vote in favor of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, (ii) take (and refrain from taking) certain other actions in connection with the
transactions contemplated by the Merger Agreement and (iii) to the extent applicable, deliver a Conversion Notice (as defined in the Merger Agreement) to convert each Supporting Stockholders shares of USWS Series A Preferred Stock
at the Merger Conversion Ratio as described above.
The Supporting Stockholders together beneficially own, in the aggregate, approximately
44% of the currently outstanding shares of USWS Common Stock, which includes 57,403 shares of USWS Common Stock, or approximately 0.07%, held by THRC Holdings, LP, one of the Wilks Parties.
Warrant Purchase Agreement
Concurrently with the execution and delivery of the Merger Agreement, the holders of the February Term C Loan Warrants and the March Term C
Loan Warrants (collectively, the Term C Loan Warrant Holders) entered into a Warrant Purchase Agreement with ProFrac (the Warrant Purchase Agreement). Pursuant to the Warrant Purchase Agreement, immediately
prior to the Effective Time and conditioned upon the consummation of the Merger, the Term C Loan Warrant Holders will sell all of their respective February Term C Loan Warrants and March Term C Loan Warrants to ProFrac or its subsidiaries in
exchange for an aggregate purchase price of $2,639,999.82 (the Warrant Sale).