USWS US Well Services Inc

Purchase Agreement and Notes

On June 24, 2021, U.S. Well Services, Inc. (the “Company”) entered into a Note Purchase Agreement (the “Purchase Agreement”), by and among the Company, ProFrac Holdings, LLC, THRC Holdings, L.P., Crestview III USWS, Crestview III USWS TE, LLC (collectively, the “Initial Purchasers”), and Wilmington Savings Fund Society, FSB, as collateral agent for the Purchasers (the “Notes Agent”), pursuant to which the Company issued and sold (a) an aggregate of $45,000,000 in principal amount of 16.0% Convertible Senior Secured (Third Lien) PIK Notes that are convertible into shares of the Company’s common stock, par value $0.0001 per share (the “Class A Common Stock”), to certain Initial Purchasers for cash (the “Cash Notes”), (b) an aggregate of $20,000,000 in principal amount of 16.0% Convertible Senior Secured (Third Lien) PIK Notes to certain Initial Purchasers in exchange for shares of the Company’s Series A Redeemable Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), that are convertible into shares of Class A Common Stock (the “Exchange Notes” and together with the Cash Notes, the “Equity Linked Notes”), and (c) a 16.0% Convertible Senior Secured (Third Lien) PIK Notes in the principal amount of $22,500,000 that is convertible into a license agreement (the “License Linked Note”), which provides certain licensors a non-exclusive license to make and/or to offer to lease or to lease certain licensed products of the Company for three electric frac fleets (the “License Agreement”). The Purchase Agreement contemplates that, within 90 days of the Initial Equity Linked Notes Closing Date (as defined in the Purchase Agreement), the Company may issue and sell additional Cash Notes and/or Exchange Notes (collectively, the “Additional Notes”) to certain additional investors for cash or to participating holders of the Series A Preferred Stock, as applicable.

On June 25, 2021, the Company entered into a First Amendment to the Purchase Agreement (the “Purchase Agreement Amendment”) with AG Energy Funding, LLC (the “Additional Purchaser” and, together with the Initial Purchasers, the “Purchasers”) and the Notes Agent, pursuant to which it issued and sold Additional Notes as follows: (a) a $16.0% Convertible Senior Secured (Third Lien) PIK Note in the principal amount of $19,000,000 that is convertible into shares of Class A Common Stock (the “Additional Equity Note”) and (b) a 16.0% Convertible Senior Secured (Third Lien) PIK Note in the principal amount of $19,000,000 that is convertible into shares of Class A Common Stock in exchange for shares of Series A Preferred Stock (the “Additional Exchange Note” and, together with the Equity Linked Notes, the License Linked Note and the Additional Equity Note, the “Notes”).

The Notes bear interest at the rate of 16.0% per annum. Accrued and unpaid interest is calculated on the Notes on the last day of each March, June, September and December, commencing September 30, 2021, and will be added on such date to the unpaid principal balance of the Notes (rounded up to the nearest $1.00). Subject to the conversion of the Notes, the entire outstanding and unpaid principal balance of the Notes, plus any accrued and unpaid interest thereon, will be due and payable on June 5, 2026 in, with respect to the Equity Linked Notes, the Additional Equity Note and the Additional Exchange Note, shares of Class A Common Stock.

Each Note is convertible at the option of the Holder, with the Equity Linked Notes, the Additional Equity Note and the Additional Exchange Note being convertible into a number of shares of Class A Common Stock equal to the principal amount of such Note then outstanding plus accrued and unpaid interest through the conversion date divided by the then applicable conversion price, which is equal to $0.98 in the case of the Cash Notes, $2.00 in the case of the Exchange Notes and the Additional Exchange Note and $1.25 in the case of the Additional Equity Note, in each case subject to adjustment. Additionally, following the first anniversary of the date of the Purchase Agreement, and at any time in which there are no issued and outstanding shares of Series A Preferred Stock, if the twenty-day volume weighted average price of the Class A Common Stock is greater than $2.00 for ten trading days during any twenty consecutive trading day period, the Company may deliver a notice to the holder of a Note to convert such Note at the conversion prices set forth above.

The Notes are secured by a third priority security interest in the collateral that secures the Company’s obligations under the Term Loan Facility, which is substantially all of the Company’s assets other than certain permitted liens, and such third priority security interest is subject in all respects to an intercreditor agreement with the ABL Agent, the Term Loan Agent, and the Notes Agent.

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The Company intends to use the net proceeds from the issuance and sale of the Notes to pay the cash settlement amount under the Settlement Agreement (as described below) and for general corporate purposes, including growth capital.

The foregoing descriptions of the Purchase Agreement, the Notes and the Purchase Agreement Amendment, do not purport to be complete and are qualified in their entirety by reference to the complete text of the Purchase Agreement, the form of Cash Note, the form of Exchange Note, the form of License Linked Note and the Purchase Agreement Amendment, which are filed herewith as Exhibit 10.1, Exhibit 4.1, Exhibit 4.2, Exhibit 4.3 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

Registration Rights Agreement

On June 24, 2021, in connection with the issuance and sale of the Notes and pursuant to the Purchase Agreement, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Initial Purchasers, and on June 25, 2021, in connection with the issuance and sale of the Additional Equity Note and the Additional Exchange Note, the Company entered into an amendment to the Registration Rights Agreement (the “Registration Rights Agreement Amendment”) with the Purchasers, relating to the registration of the Class A Common Stock issued or issuable upon conversion of the Equity Linked Notes, the Additional Equity Note, and the Additional Exchange Note, as well as any other Additional Notes that may be issued in the future (collectively, the “Registrable Securities”). Pursuant to the Registration Rights Agreement, the Company is required, so long as it remains subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to use its commercially reasonable efforts (i) to file a shelf registration statement (the “Initial Shelf Registration Statement”) on or before the Shelf Registration Filing Deadline (as defined in the Registration Rights Agreement), and to cause the Initial Shelf Registration Statement to become effective no later than four months following the filing of the Initial Shelf Registration Statement, and (ii) if, by the third anniversary (the “Renewal Deadline”) of the effective date of the Initial Shelf Registration Statement, any of the Registrable Securities remain unsold by any holder of the Registrable Securities, to file a new shelf registration statement (the “New Shelf Registration Statement”) covering the Registrable Securities included on the Initial Shelf Registration Statement and to cause the New Shelf Registration Statement to become effective within 180 days after the Renewal Deadline. In the event that the Company ceases to be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act prior to the filing of the Initial Registration Statement, the Registration Rights Agreement requires the Company to use its commercially reasonable efforts to file a registration statement within four months after the day it again becomes subject to Section 13 or 15(d) of the Exchange Act. In certain circumstances, including in the context of a future initial public offering following a period in which the Company has no longer been subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, and subject to customary qualifications and limitations, the holders of Registrable Securities will have piggyback registration rights on offerings of Class A Common Stock initiated by the Company, and selling Purchasers will have rights to request that the Company initiate up to two underwritten offerings of Registrable Securities in any 365-day period.

The foregoing descriptions of the Registration Rights Agreement and the Registration Rights Agreement Amendment, do not purport to be complete and are qualified in their entirety by reference to the complete text of the Registration Rights Agreement and the Registration Rights Agreement Amendment, which are filed herewith as Exhibit 4.4 and Exhibit 4.5, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

Settlement Agreement

As previously disclosed, U.S. Well Services LLC (“USWS”), a subsidiary of the Company, was named a defendant in a case filed on January 14, 2019 in the Superior Court of Delaware (the “Court”) styled Smart Sand, Inc. v. U.S. Well Services LLC, C.A. 19C-01-144-PRW. On June 1, 2021, the Court ruled against USWS, found in favor of Smart Sand, Inc. (“Smart Sand”) on its clam for breach of contract, and, on June 17, 2021 entered judgment in favor of Smart Sand in the amount of $50,897,534.40 (the “Smart Sand Litigation”).

On June 28, 2021, USWS and the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”) with Smart Sand, pursuant to which USWS, the Company and Smart Sand reached a settlement of all matters in dispute and potentially in dispute between them in the Smart Sand Litigation. Pursuant to the Settlement Agreement, USWS will pay $35,000,000 in cash to Smart Sand. In connection with the Settlement Agreement, the

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parties have also entered into a right of first refusal agreement that grants to Smart Sand the right to participate in certain requests for proposal initiated by USWS (or its affiliates), and the right to match the terms of certain third party offers, related to the supply of frac sand in the continental United States for a period of 2 years. The parties to the Settlement Agreement also released each other from claims arising from or related to the Smart Sand Litigation or the final judgment of the Court.

The foregoing description of the Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Settlement Agreement, which is filed herewith as Exhibit 10.3 to this Current Report on Form 8-K and is incorporated herein by reference.

Amendments to Credit Facilities

On June 24, 2021, the Company, USWS and the other subsidiaries of the Company party thereto (collectively, the “Term Loan Parties”) entered into a Consent and Fifth Amendment (the “Term Loan Amendment”) to the Senior Secured Term Loan Credit Agreement (as amended, amended and restated, supplemented, or otherwise modified, the “Term Loan Facility”) with CLMG Corp., as administrative and collateral agent (the “Term Loan Agent”), and the lenders party thereto (the “Term Loan Lenders”).

In addition, on June 24, 2021, the Company, USWS and the other subsidiaries of the Company party thereto (collectively, the “ABL Loan Parties”), entered into a Fourth Amendment and Limited Consent (the “ABL Amendment”) to the ABL Credit Agreement (as amended, amended and restated, supplemented, or otherwise modified, the “ABL Facility” and, together with the Term Loan Facility, the “Credit Facilities”) with Bank of America, N.A., as administrative agent and collateral agent (in such capacity, the “ABL Agent”), and the lenders party thereto (the “ABL Lenders”).

Each of the Credit Facilities was amended in order to (i) permit the incurrence of debt and liens in connection with the Purchase Agreement, Purchase Agreement Amendment, and the issuance of the Notes, and the documents and transactions contemplated thereby, and (ii) make certain modifications to each of the ABL Facility and the Term Loan Facility, in each case, on the terms and conditions set forth in the ABL Amendment and the Term Loan Amendment.

Pursuant to the Term Loan Amendment, the deferral period for interest on the term loans was shortened by three months, to January 1, 2022, and the term loans will resume incurring interest at the applicable benchmark rate, subject to a 2.0% floor, plus the applicable margin of 8.25% per annum, subject to the following exceptions. If on December 31, 2021, either:

If on April 1, 2022, the outstanding principal amount of the term loans is equal to or less than $103,000,000 then solely during the period between April 1, 2022 and December 31, 2022, the interest rate shall be 1.0% per annum (notwithstanding preceding clause (ii) above).

Additionally, pursuant to the Term Loan Amendment, other covenants were amended including, but not limited to, certain covenants relating to collateral, mandatory prepayments, asset dispositions, and special purpose entities used for stand-alone equipment financings.

The foregoing descriptions of the Term Loan Amendment and ABL Amendment do not purport to be complete and are qualified in their entirety by reference to the complete text of such agreements, which are filed herewith as Exhibit 10.4 and Exhibit 10.5, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

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