CONFIDENTIALITY AGREEMENT April 30, 2010
This Confidentiality Agreement (this “Agreement”) is entered into as of this 30th day of
April, 2010, between Xxxxxx Industries, Inc., a Delaware corporation (“NII”), and Superior Well
Services, Inc., a Delaware corporation (“SWSI”). Each of NII and SWSI are sometimes referred to
herein individually as a “party” and collectively as the “parties.” Further, SWSI is sometimes
referred to herein as the “disclosing party” and NII is sometimes referred to herein as the
“receiving party.” All references herein to a “party,” “disclosing party” or “receiving party”
shall include such party’s subsidiaries, divisions and controlled and controlling affiliates,
unless the context otherwise requires.
1. General Obligation of Confidentiality. In connection with the consideration by each party
of a possible business combination transaction with the other party hereto (the “Transaction”),
the disclosing party is prepared to make available, to the receiving party certain information
concerning the personnel, business, financial condition, operations, assets and liabilities of the
disclosing party. In consideration for, and as a condition of such information being furnished to,
the receiving party and the directors, officers, employees, agents, attorneys, accountants,
consultants and financial advisors of the receiving party (collectively, “Representatives”), the
receiving party agrees to treat as confidential any information relating to the Transaction that
is or has been furnished or made available to the receiving party or its Representatives by or on
behalf of the disclosing party (regardless of the manner or form in which it is furnished or made
available, including, without limitation, all written, oral and electronic communications),
together with any notes, analyses, compilations, studies, interpretations, documents or records to
the extent containing, referring, relating to, based upon or derived from such information, in
whole or in part (collectively, “Evaluation Material”) in accordance with the provisions of this
Agreement, and to take or abstain from taking certain other actions as hereinafter set forth.
2. Exclusions from Evaluation Material. The term “Evaluation Material,” as used in this
Agreement, does not include information that (a) is at the time of disclosure or thereafter becomes
generally available to or known by the public other than as a result of a disclosure by the
receiving party or any of its Representatives in violation of this Agreement, (b) was within the
receiving party’s possession prior to its being furnished to it by or on behalf of the disclosing
party or is independently developed by the receiving party or any of its Representatives without
violation of any of its other obligations under any confidentiality agreement with or other
contractual, legal or fiduciary duty or obligation to the disclosing party or any other person, or
(c) at the time of disclosure or thereafter becomes available to the receiving party on a non-confidential
basis from a source other than the disclosing party or any of its Representatives;
provided that, in the case of (b) and (c) above, the source of such information was not
known or reasonably suspected by the receiving party to be bound by a confidentiality agreement
with or other contractual, legal or fiduciary duty or obligation of confidentiality to the
disclosing party or any other person with respect to such information.
3. Limitations on Use of Evaluation Material. Each party agrees and acknowledges (a) that all
right, title and interest in and to Evaluation Material that the disclosing party has at the time
of its disclosure of Evaluation Material to the receiving party or its Representatives shall
1
remain the exclusive property of the disclosing party, (b) that no interest, license or any right
respecting Evaluation Material provided by or on behalf of the disclosing party is granted to the
receiving party under this Agreement by implication or otherwise, and (c) the potential competitive
value of Evaluation Material and the damage that could result from the disclosure thereof in
violation of this Agreement. Therefore, the receiving party hereby agrees (i) that it and its
Representatives shall use all Evaluation Material solely for the purpose of evaluating the
Transaction, (ii) to treat all such Evaluation Material with at least the same degree of care it
uses in protecting its own confidential and proprietary information, (iii) that Evaluation Material
received or generated by it or its Representatives will be kept confidential and (iv) that, subject
to the following provisions of this Agreement, neither the receiving party nor its Representatives
will disclose any of the Evaluation Material in any manner whatsoever to any other person not bound
hereby; provided, however, that (A) the receiving party may make any disclosure of
such information to which the disclosing party gives its prior written consent; (B) the receiving
party may make disclosure of such information to the extent that the receiving party believes,
based on advice of counsel, that it is legally required to disclose such information in order to
avoid committing a violation of any law, rule or regulation, including any rules or regulations of
any securities association, stock exchange or national securities quotation system;
provided, that the receiving provides prompt notice to the disclosing party of the
proposed disclosure and takes the other actions required in connection with a legally required
disclosure pursuant to paragraph 5 below; and (C) any of such information may be disclosed to the
receiving party’s Representatives who need to know such information for the sole purpose of
evaluating the Transaction. In any event, the receiving party shall be responsible for compliance
with the confidentiality provisions set forth in this Agreement (including but not limited to the
provisions of paragraph 4 below) by its Representatives and agrees, at its sole expense, to take
all reasonable measures (including but not limited to court proceedings) to restrain its
Representatives from prohibited or unauthorized disclosure or use of Evaluation Material.
4. Nondisclosure of Possible Transaction. In addition, each party agrees that, without the
prior written consent of the other party, neither it nor its Representatives will disclose to any
other person (other than its Representatives) the fact that Evaluation Material has been requested
by or has been furnished or made available to the receiving party (though SWSI may disclose the
fact that Evaluation Material generally has been made available by or to certain persons without
in any manner identifying NII or its affiliates), that discussions or negotiations are taking
place concerning the Transaction (though SWSI may disclose the fact that discussions or
negotiations are taking place generally concerning a possible transaction involving a third person
without in any manner identifying NII or its affiliates) or any of the terms, conditions or other
facts with respect thereto (including the status thereof). Notwithstanding the foregoing, any
party may make a disclosure otherwise prohibited by this paragraph 4 if (a) based on the advice of
such party’s legal counsel, such disclosure is necessary to avoid committing a violation of, or to
ensure compliance with, any law, rule or regulation, including any rules or regulations of any
securities association, stock exchange or national securities quotation system and (b) the party
making the disclosure (i) provides advance notice to the other party of the proposed disclosure,
(ii) uses reasonable efforts to afford the other party a reasonable opportunity to refute such
counsel’s advice and to take protective actions prior to any such disclosure and (iii) cooperates
in good faith with respect to the timing, manner and content of such disclosure (to the extent
consistent with its obligation to disclose).
2
5. Legally Required Disclosures. In the event that the receiving party or any of its
Representatives are requested or required (by deposition, oral questions, interrogatory, request
for information or documents in legal proceedings, subpoena, civil investigative demand or other
similar process) pursuant to law, rule or regulation, including any rules or regulations of any
securities association, stock exchange or national securities quotation system to disclose any
Evaluation Material, it shall (a) provide the disclosing party with prompt written notice of any
such request or requirement so that the disclosing party may, at its own expense, seek a protective
order or other appropriate remedy or waive compliance with the provisions of this Agreement and (b)
consult with the disclosing party as to the advisability of taking legally available steps to
resist or narrow such request or requirement. If, in the absence of a protective order or other
remedy or the receipt of a waiver by the disclosing party, the receiving party or any of its
Representatives are nonetheless, in the opinion of its or their legal counsel, legally compelled to
disclose Evaluation Material to any tribunal or securities exchange, the receiving party or its
applicable Representative may, without liability hereunder, disclose to such tribunal or securities
exchange only that portion of Evaluation Material that such counsel advises is legally required to
be disclosed; provided, that the receiving party gives the disclosing party written
notice of all Evaluation Material to be disclosed as far in advance of its disclosure as is
reasonably practicable and that the receiving party exercises its reasonable efforts to preserve
the confidentiality of such Evaluation Material, including, without limitation, by cooperating with
the disclosing party to seek to obtain an appropriate protective order or other reliable assurance
that confidential treatment will be accorded to such Evaluation Material by such tribunal or
securities exchange, all at the cost and expense of the disclosing party. In no event will the
receiving party or its Representatives oppose any action by the disclosing party (if all the cost
and expense of such action is at the expense of the disclosing party) to obtain a protective order
or other relief to prevent the disclosure of such information or to obtain reliable assurance that
confidential treatment will be afforded such information.
6. Return or Destruction of Evaluation Material. If either party decides that it does not wish
to proceed with discussions or negotiations relating to the Transaction and the party so deciding
informs the other party of that decision, or at any time upon written notice from the disclosing
party for any reason, unless prohibited by applicable law, regulation or legal process, the
receiving party will, at its election, either promptly (a) return all Evaluation Material to the
disclosing party or (b) destroy all such Evaluation Material, in either case without retaining any
copy thereof. If requested, the receiving party shall deliver to disclosing party a certificate,
signed by a duly authorized officer of such party, attesting to the delivery or destruction of all
of the disclosing party’s Evaluation Material in accordance with this paragraph. Notwithstanding
the return or destruction of Evaluation Material, the receiving party and its Representatives will
continue to be bound by their obligations of confidentiality hereunder for a period of twelve (12)
months from the date hereof.
7. Standstill Agreement. For a period of twelve (12) months from the date hereof, the
receiving party agrees that it and its affiliates shall not, without the prior written request of
the disclosing party, directly or indirectly, alone or in concert with others:
(a) in any manner acquire, agree to acquire or make any proposal or offer to acquire,
directly or indirectly, any securities (including, but not limited to, by means of
3
Beneficial Ownership) or property of the disclosing party or its subsidiaries, or any rights or
options to acquire any such securities or property;
(b) propose to enter into any merger or business combination involving the disclosing party or
any of its subsidiaries or propose to purchase, directly or indirectly, a material portion of the
assets of the disclosing party or its subsidiaries;
(c) make, or in any way participate in, any “solicitation” of “proxies” (as such terms are
used in Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) with respect to the securities of the disclosing party, or advise or seek to
influence any person or entity with respect to the voting of, or giving of consents with respect
to, any securities of the disclosing party or any of its subsidiaries;
(d) seek or propose to influence or control (whether though a “group,” as such term is used in
Rule 13d-5 of the Exchange Act or otherwise) the management, board of directors, policies or
affairs of the disclosing party or any of its subsidiaries;
(e) to the extent doing so would require the public disclosure of such action by the
disclosing party, make any request to waive or amend any provision of this paragraph 7;
(f) disclose any intention, plan or arrangement inconsistent with any of the foregoing; or
(g) advise, assist or encourage any third party to do any of the foregoing.
As used in this paragraph 7, the term “securities” shall mean any securities of a party and
any direct or indirect warrants, rights or options to acquire securities of the disclosing party.
“Beneficial Ownership” with respect to any securities shall mean (i) having “beneficial ownership”
of such securities (as determined pursuant to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not in writing; or (ii) having
an interest in or related to any securities that are the subject of a derivative transaction
entered into by such person, or derivative security acquired by such person, which gives such
person the economic equivalent of ownership of an amount of such securities due to the fact that
the value of the derivative is explicitly determined by reference to the price or value of such
securities, without regard to whether (A) such derivative conveys any voting rights in such
securities to such person, (B) the derivative is required to be, or capable of being, settled
through delivery of such securities, or (C) such person may have entered into other transactions
that hedge the economic effect of such derivative. The receiving party represents that as of the
date of this Agreement that it has not acquired record or Beneficial Ownership of any voting
securities of the disclosing party or any of the disclosing party’s subsidiaries or any securities
convertible into voting securities of the disclosing party or any of the disclosing party’s
subsidiaries.
8. No Representation or Warranty. Each party understands and acknowledges that neither the
disclosing party nor any of its Representatives makes any representation or warranty, express or
implied, as to the accuracy or completeness of any Evaluation Material nor shall have any
liability to the receiving party or any of its Representatives resulting from the use of any
Evaluation Material or any errors or omissions therefrom. The receiving party further agrees that
4
it is not entitled to rely on the accuracy or completeness of Evaluation Material received by it
and shall be entitled to rely solely on the particular representations or warranties, if any, that
are made in a Definitive Transaction Agreement (as that term is described in paragraph 11 below),
when, as and if executed, and subject to such limitations and restrictions as may be specified
therein.
9. Access. In the event the receiving party desires physical access to any of the disclosing
party’s properties, the receiving party agrees to indemnify, defend and hold harmless the
disclosing party from and against any and all liabilities, claims and causes of action for personal
injury, death or property damage occurring on or to such property as a result of the receiving
party’s entry onto the premises, except for such liabilities, claims or causes of action resulting
from the gross negligence or willful misconduct of the disclosing party. The receiving party agrees
to comply fully with all rules and instructions given by the disclosing party regarding actions
while upon, entering or leaving the property of the disclosing party.
10. No Solicitation of Personnel. Until the earliest of (a) the execution and delivery by the
parties hereto of a Definitive Transaction Agreement with respect to the Transaction or (b) one (1)
year from the date of this Agreement, the receiving party agrees that no director, officer or
employee of the receiving party that participated in the evaluation of the possible Transaction
shall directly or indirectly initiate or maintain, or encourage or assist any other person to
initiate or maintain, contact (except for those contacts made in the ordinary course of business)
with any key employee (defined as any elected or appointed officer or director or any employee that
manages or is otherwise directly responsible for the sales or operations of a business unit,
service line or geographic region) of the disclosing party regarding its business, assets,
operations, prospects or finances, except with the express permission of a duly authorized
executive officer of the disclosing party. It is understood that all (i) communications regarding
the possible Transaction, (ii) requests for Evaluation Material, (iii) requests for facility tours
or management meetings and (iv) discussions or questions regarding procedures will be submitted or
directed to such persons as the disclosing party may designate in writing to be responsible for
such actions. The parties further agree that, for a period of two (2) years from the date hereof,
the receiving party will not solicit for employment or employ any key employee of the disclosing
party or its subsidiaries who was contacted during such evaluation or was identified as a result of
such evaluation; provided, however, that this provision shall not prohibit the
solicitation or employment of any such person (A) resulting from general advertisement for
employment, (B) if such person approaches the receiving party on an unsolicited basis, or (C) whose
employment by the disclosing party or its subsidiary has been terminated prior to the commencement
of discussions between the receiving party and such employee.
11. Definitive Transaction Agreement. Each party also understands and agrees that no contract or
agreement providing for a Transaction between the parties shall be deemed to exist unless and until
a Definitive Transaction Agreement has been executed and delivered by both of the parties hereto,
and each party hereby waives, in advance, any claim (including, without limitation, any claim for
breach of contract) in connection with such a Transaction unless and until a Definitive Transaction
Agreement has been executed and delivered by each of the parties thereto. It is also agreed that
unless and until a Definitive Transaction Agreement between the parties with respect to a
Transaction has been executed and delivered, neither party nor its stockholders has any legal
obligation of any kind whatsoever with respect to any such
5
Transaction. Under no circumstances will any oral understanding between the parties with
respect to a Transaction be a binding contract. For purposes of this paragraph, the term
“Definitive Transaction Agreement” does not include an executed letter of intent or any other
preliminary written agreement, nor does it include any written or oral offer or bid or any written
or oral acceptance thereof. THE RECEIVING PARTY FURTHER UNDERSTANDS THAT THE DISCLOSING PARTY SHALL
BE FREE AT ALL TIMES TO CONDUCT ANY PROCESS FOR A BUSINESS COMBINATION TRANSACTION INVOLVING THE
DISCLOSING PARTY AND ANY OTHER PERSONS AS THE DISCLOSING PARTY IN ITS SOLE DISCRETION SHALL
DETERMINE. The disclosing party reserves the right, in its sole discretion, to (a) decline to
provide any requested information, (b) discontinue consideration of a transaction with the
receiving party at any time, (c) reject any and all proposals made by the receiving party or any of
its Representatives, (d) terminate discussions and negotiations with the receiving party at any
time and for any reason and (e) conduct any process relating to a possible transaction with any
other person at any time or change the procedure for conducting such process. This Agreement does
not constitute or create any obligation of the disclosing party to provide any Evaluation Material
or other information to the receiving party, but merely defines the right, duties and obligations
of the parties with respect to Evaluation Material to the extent it may be disclosed or made
available. Under no circumstances is the disclosing party obligated to disclose or make available
any information, including any Evaluation Material, that the disclosing party in its sole
discretion determines not to disclose.
12. Securities Laws. The parties hereby acknowledge that they are aware, and that each party
will advise its respective Representatives who are informed as to the matters that are the subject
of this Agreement, that the United States securities laws prohibit any person who has material,
nonpublic information concerning the matters which are the subject of this Agreement from
purchasing or selling securities of either party or from communicating such information to any
other person under circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities. The parties agree that they will not use or cause any other
person to use, and that they will each use reasonable efforts to assure that none of their
respective Representatives will use or cause any other person to use, any Evaluation Material in
contravention of the United States securities laws.
13. Remedies. The receiving party agrees that money damages would not be a sufficient remedy
for any breach of this Agreement by it or any of its Representatives and that the disclosing party
shall be entitled to equitable relief, including injunction and specific performance, in the event
of any breach of the provisions of this Agreement, in addition to all other remedies available to
the disclosing party at law or in equity. If the disclosing party initiates an action to enforce
its rights under this Agreement and prevails in such action, the receiving party shall reimburse
the disclosing party for all reasonable costs and expenses, including reasonable attorneys’ fees,
incurred by the disclosing party in enforcing its rights hereunder.
14. Term. Except as otherwise provided herein, this Agreement and each of the obligations
herein stated shall terminate twelve (12) months following the date hereof; provided,
however, that no such termination shall relieve the receiving party from liability for any
breach of the terms hereof that exists on the date of such termination.
6
15. Person; Affiliates. As used in this Agreement: (a) the term “person” will be interpreted
broadly to include, without limitation, any corporation, company, group, partnership, limited
liability company, association, trust, unincorporated organization, joint venture, group,
government and any other entity or individual; and (b) the term “affiliate” when used with respect
to a person, shall have the meaning given to it in Rule 12b-2 under the Securities Exchange Act of
1934, as amended.
16. Entire Agreement; Binding Effect; Power; No Implied Waiver; Amendment. This Agreement
represents the entire agreement and understanding of the parties with respect to the matters
referred to herein and supersedes all prior agreements, commitments, representations, writings and
understandings, written or oral, between the parties with respect thereto. This Agreement shall
be binding on the parties and their respective successors and assigns. Each party hereby
represents that it has the power and authority to execute and deliver this Agreement, and that it
has been duly authorized and constitutes a valid and binding agreement of such party, enforceable
in accordance with its terms. No failure or delay in exercising any right, power or privilege
hereunder will operate as a waiver thereof, nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege hereunder. Neither this paragraph nor any other provision in this Agreement can be
waived or amended except by written consent of both parties, which consent shall explicitly make
such waiver or amendment.
17. Notices. All notices to be given to a party hereunder shall be in writing and delivered
personally, by overnight courier or by facsimile, addressed to the Company Representative of such
party, with a copy to the Chief Financial Officer or General Counsel of such party, as applicable,
at the corporate headquarters of such party, as reflected on the signature page hereof. As used in
this Agreement, the term “Company Representative” shall mean each party’s Chief Executive Officer,
Chief Financial Officer or General Counsel.
18. Severability. If any portion of this Agreement is determined to be invalid or
unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall
be unaffected thereby and remain in full force and effect to the fullest extent permitted by
applicable law.
19. Governing Law; Submission to Jurisdiction. This Agreement and all disputes or
controversies arising out of or related to this Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware without regard to principles of
conflicts or choice of law of that or any other jurisdiction which might apply the laws of any
other jurisdiction.
20. Counterparts. This Agreement may be executed and delivered (including by facsimile or
electronic transmission) in any number of counterparts and each of such counterparts shall for all
purposes be deemed original, and all such counterparts shall together constitute one and the same
instrument.
[Signature Page Follows]
7
IN WITNESS WHEREOF, the parties have approved and executed this Agreement as of the date first
written above.
| SUPERIOR WELL SERVICES, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | Vice President & Chief Financial Officer | |||
0000 Xx. 000 Xxxx, Xxxxx #000
Xxxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxx, Xxxxxxxxxxxx 00000
| XXXXXX INDUSTRIES, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | Vice President, General Counsel & Secretary | |||
000 Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Xxxxxxx, Xxxxx 00000
[Signature Page to Confidentiality Agreement]
