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).
The Merger Agreement contains certain termination rights for both ProFrac and the Issuer and
further provides that, upon termination of the Merger Agreement under specified circumstances, the Issuer 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.
Voting Agreement
Concurrently with the execution and delivery of the Merger Agreement, THRC Holdings and certain other 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 the Issuers 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 the Issuers Common Stock, or approximately 0.07%, held by THRC Holdings.
Warrant Purchase Agreement
Concurrently with the execution and delivery of the Merger Agreement, THRC Holdings and certain other 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).
Amendments to Convertible
Notes
Under the terms of the Merger Agreement, the Issuer also agreed to cause the Equity Linked Convertible Notes to be amended by
execution of amendments thereto (the Convertible Note Amendments). On June 21, 2022, each of the Convertible Note Amendments was executed by the Issuer and the respective payees of the Equity Linked Convertible notes, including THRC
Holdings and Farris Wilks, as applicable, and became effective. The Convertible Note Amendments amended the terms of the Equity Linked Convertible Notes in order to provide for, among other things, the conversion by the Issuer, pursuant to the terms
of the Merger Agreement and as of immediately prior to the Effective Time, of all of the outstanding principal and interest then owing under each Equity Linked Convertible Note into a number of shares of the Issuers Class A Common Stock
equal to the quotient obtained by dividing (i) the amount of such outstanding principal and interest owing through the date immediately prior to the date of conversion, by (ii) $1.22.
PIK Interest Letter Agreement
Concurrently with the execution of the Merger Agreement, each of the lenders (the Term C Lenders), including THRC Holdings, that
made Term C Loans under the Consent and Sixth Amendment to the Issuers Senior Secured Term Loan Credit Agreement (the Credit Agreement), entered into a Letter Agreement, dated June 21, 2022 (the PIK Interest Letter
Agreement), pursuant to which, among other things, each Term C Lender, including THRC Holdings, covenanted and agreed that, with respect to interest accruing and becoming due and payable on its applicable Term C Loans under the Credit
Agreement on and after June 30, 2022 (Subject Interest), such Term C Lender (i) would not (A) pursue any claim or (B) seek, demand or request any payment, return, exchange or other recovery, in each case, solely on
account of any Subject Interest and (ii) would waive, reject and/or return to the loan parties, as applicable, (A) any offered or distributed payment solely on account of any Subject Interest or (B) the proceeds of any return,
exchange or other recovery described in the foregoing clause (i). The terms of the PIK Interest Letter Agreement further provide that, (x) notwithstanding such covenants and agreements, Subject Interest shall continue to accrue in accordance
with the Credit Agreement unless and until the Credit Agreement is waived, amended or otherwise modified in accordance with its terms and (y) the covenants and agreements of each Term C Lender described in clauses (i) and (ii) of the
immediately preceding sentence shall terminate automatically, without notice or any other action, and shall have no further force or effect, in the event that the Merger Agreement is terminated in accordance with its terms.