Exhibit 10.31
AGREEMENT
THIS AGREEMENT, dated October 2, 2007, by and between U. S. SILICA COMPANY, a
Delaware corporation (hereinafter referred to as “Seller”), and SUPERIOR WELL
SERVICES, INC., a Delaware corporation (hereinafter referred to as “Buyer”).
In consideration of the mutual covenants and upon the conditions herein
contained, the parties agree as follows:

1.   Sale/Purchase. Seller agrees to sell to Buyer, and Buyer agrees to purchase
exclusively from Seller, the Products during the Term of this Agreement, subject
to the terms and conditions of this Agreement.   2.   Term. This Agreement shall
begin on January 1, 2008 and continue until December 31, 2009 (the “Term”),
unless earlier terminated pursuant to the provisions of this Agreement. Upon
expiration of the two-year term of this agreement, this Agreement will need to
be renegotiated.   3.   Product. The term “Products”, when referred to in this
Agreement means Ottawa 20/40 API and 30/50 fracturing sand. Alternatively sized
fracturing products such as 20/50 and 30/70 may be purchased for the same price
subject to Seller’s ability to produce.   4.   Quantity. During the term of this
Agreement, Buyer agrees to purchase from Seller a minimum 100,000 short tons in
2008 and 150,000 short tons in 2009 of {20/40 and 30/50 products combined}. Any
shortfalls in purchasing minimum quantities will be addressed in the Price and
Terms Provision.   5.   Price and Terms of Sale. The price of all Ottawa
products in 2007 will be $45 per bulk short ton. Any shortfall for not
purchasing 100,000 short tons of {Ottawa 20/40 and 30/50 products combined in
2007} will be paid for by the Purchaser at a selling price of $45 per ton. The
price for all Ottawa products for 2009 will be $48.60 per short ton. Any
shortfall for not purchasing 150,000 short tons of {Ottawa 20/40 and 30/50
products combined} will be paid for by the Purchaser at a selling price of
$48.60 per ton. The Seller will invoice the Buyer for any shortfall from the
annual tonnage commitment on the last day of the calendar year.   6.  
Disclaimer of Warranties/Limitation of Liability/Indemnity. EXCEPT FOR THE
WARRANTY OF MERCHANTABILITY, AND ANY EXPRESS WARRANTIES IN THIS AGREEMENT, NO
OTHER WARRANTY IS MADE OR INTENDED, WHETHER THE SAME BE WRITTEN, ORAL OR
IMPLIED, AND IN PARTICULAR NO WARRANTY IS MADE THAT THE PRODUCTS WILL BE FIT FOR
ANY PARTICULAR PURPOSE. Buyer’s exclusive remedy and Seller’s sole liability on
any claim, whether tort, contract or warranty, shall be limited to reimbursement
of Buyer’s actual cost of the Product, and in no event shall Seller be liable
for indemnification of or contribution to Buyer on account of any claim asserted
against Buyer, or for any other or further damages whatsoever, whether direct or
indirect. Buyer agrees to indemnify and hold Seller harmless from any obligation
asserted by third party against Seller arising either directly or indirectly
from a failure of Buyer to perform its obligations under this Agreement.

 

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7.   Warning. The Product may contain crystalline silica dust, or crystalline
silica dust may be created during the use of the Product. Respirable crystalline
silica dust may cause severe and permanent lung damage. Breathing the dust can
cause silicosis, a lung disease that can cause serious breathing difficulties
and death. Breathing respirable crystalline silica dust may cause lung cancer
and other diseases. Follow OSHA and other applicable health standards for
crystalline silica (quartz) dust. See Seller’s material safety data sheet, a
copy of which is attached hereto and made a part hereof as Exhibit “A”, for more
complete information on hazards and precautions.   8.   Do Not Use Products for
Sandblasting. Buyer agrees that it will not use Seller’s Product for use in
sandblasting.   9.   Buyer’s Responsibility Concerning Warnings. Buyer agrees to
warn, protect and train its employees of the hazards of improperly using the
Product covered by this Agreement with information provided by Seller and with
any other information that the Buyer, in the exercise of its legal obligation
to, inter alia, provide its employees with a safe workplace and comply with the
OSHA Hazard Communications Standard, 29 CFR 1910.1200 et seq. and federal and/or
state regulations regarding the potential exposure of the Buyer’s employees to
respirable crystalline silica, deems appropriate. Buyer agrees to timely warn
and notify its employees by providing them with current Material Safety Data
Sheets and other information regarding warnings, product hazards and
precautions, to be followed in using, handling, storing and disposing of the
Product. The warnings and information are to be timely disseminated. Buyer
agrees upon written request from Seller to confirm that Buyer is complying with
its obligations under Paragraph 11 hereof.   10.   Packaging and Labeling of
Product. In event Buyer purchases Product in bulk and packages the same for
resale, Buyer agrees that it will (i) adequately label all packages with
warnings concerning the potential adverse health effects associated with
exposure to respirable crystalline silica, (ii) prepare and timely provide its
customers, agents and contractors with a current Buyer’s MSDS, and (iii) timely
provide its customers with other literature and notices which Buyer receives
from Seller but bearing Buyer’s (not Seller’s) name regarding warnings, product
hazards and precautions to be followed. Buyer agrees to refrain from using or
making reference to Seller or to any of Seller’s trademarks, tradenames, logos,
patents or any other Seller’s identifications on Buyer’s packages, label, MSDS,
literature or notices. Seller will not be liable for any changes that may occur
in Seller’s Product as a result of Buyer’s packaging operations.   11.  
Indemnification. Seller shall indemnify and hold harmless Superior Well
Services, Inc. and their respective customers, employees, officers, directors,
shareholders, successors and assigns, from any and all Losses (as defined below)
that arise from, are connected with, are attributable, or are otherwise related
to: (a) injuries or death to persons or damage to property, caused or alleged to
have been caused by the negligent act or omission of Seller or any person
furnished by Seller; (b) assertions under Worker’s Compensation or similar acts
made by persons furnished by Seller; or (c) a breach by Seller of any of its
obligations in this Agreement or in a purchase order or release. “Losses” shall
mean all losses, liabilities, damages and claims, and all related costs and
expenses (including any and all reasonable legal fees, expert witness fees and
reasonable costs of investigation, litigation, settlement, judgment, appeal,
interest and penalties) incurred by Superior Well Services, Inc. Notwithstanding
anything in this Section 11 to

 

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    the contrary, Seller shall not indemnify, defend or hold harmless Superior
Well Services Inc. from any Losses, or any allegation concerning Losses, that
arise from, are connected with, or are otherwise related to any injury or death
(or any claim of injury or death) in any way associated with exposure (through
inhalation or otherwise) to crystalline silica.   12.   Force Majeure. Except
for the duty to make payments when due under this Agreement, neither party shall
be liable to the other for delay or failure to perform its obligations hereunder
during periods in which its performance is prevented or delayed by any cause
reasonably beyond its control of such party, which causes herein are called
“force majeure” and delay or failure of performance due to such cause shall not
constitute a breach of or failure to perform this Agreement or any obligation
hereunder; provided, however, that the party so prevented from complying with
its obligations under this Agreement shall promptly notify the other party
thereof and shall exercise diligence in an endeavor to remove or overcome the
cause of such inability to comply; and provided, further, that the settlement of
strikes and lockouts shall be entirely within the discretion of the party
experiencing the difficulty.       For purposes of this Agreement, force majeure
shall include, but shall not be limited to mine disasters, accidents, fires,
explosions, floods, windstorms, and other damage from the elements, strikes or
other labor trouble, riots, wars, sabotage, reasonable unavailability or lack or
shortages of transportation or electrical power or fuel or necessary equipment,
reasonable inability to obtain adequate labor or quantities of the necessary
materials and supplies in the open market, lack, loss or failure of Seller’s
naturally-occurring raw materials, action of government authority to grant any
required license of authorization so long as the party involved has used its
best efforts to obtain the same, acts of God and acts of public enemy or any
other circumstances of a similar or different nature.   13.   Taxes. Any tax or
other Governmental charge imposed by federal, state, county, or municipal
authorities on deliveries or sale of the goods hereunder shall be for the
account of and paid by Buyer.   14.   Assignment. This Agreement shall not be
assignable by Buyer without the prior written consent of Seller, which consent
shall not be unreasonably withheld.   15.   Default. Upon default by either
party in the payment of any monies due under this Agreement, or the performance
of any obligation to be performed by such party, the other party may give notice
in writing to the party in default, specifying the amount of such monies due or
the thing or matter in default. Unless such default be cured within fifteen
(15) days following the giving of such notice, this Agreement may be cancelled
forthwith by written notice at the option of the party giving such notice. Such
cancellation shall not relieve the party in default from any obligations accrued
to the date of such cancellation or from liability in damages for breach of this
Agreement. A Waiver by either party of a single default, or a succession of
defaults, shall not deprive such party of any right arising by reason of any
subsequent default.

 

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16.   Notices. Al notices to be given under this Agreement shall be given by fax
transmission, immediately followed by overnight delivery (FedEx or UPS only) to
the parties as follows, with such notice being deemed effective the day after
the fax transmission:

If to Seller, to: U.S. Silica Company
106 Sand Mine Road
Berkeley Springs, West Virginia 25411
Attention: Legal Department
304-258-2500
304-258-3500 (Fax)
If to Buyer, to: Superior Well Services
1380 Rt. 286 East Suite #121
Indiana, PA 15701
Attention: U.S. Materials Manager
724-465-8907
724-465-8904 (Fax)
Or such other address as shall be furnished in writing by either party, and such
notice or communication shall be deemed to have been given as of the date
received.

17.   Fair Labor Standards Act. Seller represents that with respect to the
production of Product covered hereby, it has fully complied with the Fair Labor
Standards Act of 1938, as amended.   18.   Entire Agreement. This writing
constitutes the entire agreement between the parties hereto and supersedes any
and all understandings and communications relative to the subject matter hereof.
  19.   Governing law and Section Headings. This Agreement shall be governed by
and construed in accordance with the laws of the State of Pennsylvania. The
section headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused their corporate names to be
affixed and this instrument to be duly executed as of the date first hereinabove
written.

          U. S. SILICA COMPANY    
 
       
By:
  /s/ Bob Morrow     
 
 
 
   
Title:
  VP Logistic & Sales     
 
 
 
   
Date:
  October 2, 2007    
 
 
 
   
 
        SUPERIOR WELL SERVICES    
 
       
By:
  /s/ David E. Wallace    
 
 
 
   
Title:
  Chief Executive Officer    
 
 
 
   
Date:
  October 2, 2007