UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): April 11, 2015

 

 

Nuverra Environmental Solutions, Inc.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware   001-33816   26-0287117

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

14624 N. Scottsdale Road, Suite #300, Scottsdale, Arizona   85254
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (602) 903-7802

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions ( see General Instruction A.2.):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Cautionary Note Regarding Forward-Looking Statements:

Any statements contained in this Current Report on Form 8-K that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “estimates,” “projects,” or similar expressions. Such statements may include, but are not limited to, statements that are not historical facts. Such statements are based upon the beliefs and expectations of the Company’s management as of this date only and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, without limitation, those items identified as “risk factors” in the Company’s most recently filed Annual Report on Form 10-K and in its Quarterly Reports on Form 10-Q and other periodic filings. Therefore, investors are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.

Explanatory Note

On April 11, 2015, Nuverra Environmental Solutions, Inc., a Delaware corporation (the “Company”), and Safety-Kleen, Inc., a Delaware corporation (the “Buyer”), completed the disposition of the Company’s industrial solutions business (the “TFI Disposition”) for an aggregate purchase price of $85.0 million (the “Purchase Price”), subject to customary working capital adjustments, as contemplated by the previously disclosed Stock Purchase Agreement dated February 3, 2015 (as amended, the “Purchase Agreement”), by and among the Company, Heckmann Environmental Services, Inc. (“HESI”), Thermo Fluids Inc. (“TFI”) and the Buyer.

 

Item 1.01. Entry into a Material Definitive Agreement.

In connection with the closing of the TFI Disposition, the Company entered into a Second Amendment, Consent and Release to Amended and Restated Credit Agreement (the “ABL Facility Amendment”), dated April 13, 2015, by and among the Company, Wells Fargo Bank, National Association, as agent (the “Agent”), and the lenders named therein (the “Lenders”), which amends the Company’s Amended and Restated Credit Agreement, dated as of February 3, 2014 (as amended, the “ABL Facility”).

Under the ABL Facility Amendment, TFI and HESI were released from all obligations under the ABL Facility and all of the Agent’s liens on the assets and equity interest of HESI and TFI were released.

In addition, the ABL Facility Amendment reduced the maximum revolver availability from $245.0 million to $195.0 million and removed the accordion feature. Pricing of the ABL Facility remained the same other than corresponding changes reflecting the reduction of maximum revolver availability. The ABL Facility Amendment also reflects an updated appraisal for machinery and equipment that is used in the borrowing base formula. In addition, the borrowing base formula established a temporary reserve in the amount of $20.2 million that will be in effect only until the Company completes the semi-annual interest payment on the Company’s 9.875% Senior Notes (the “Senior Notes”) to be paid on April 15, 2015. As of the effective date of the ABL Facility


Amendment, and after giving effect to the repayment of borrowings under the ABL Facility with proceeds from the TFI Disposition, the Company’s outstanding balance under the ABL Facility was approximately $101.8 million and the borrowing base would support additional borrowings of up to approximately $62.5 million, subject to normal reserve requirements, including outstanding letters of credit and the temporary $20.2 million interest payment reserve described above. The Company had cash on hand of approximately $37.0 million on the effective date of the ABL Amendment and intends to use available cash to fund the April 15, 2015 interest payment on the Senior Notes.

The foregoing description of the ABL Facility Amendment is only a summary and does not purport to be a complete description of the terms and conditions under the ABL Facility Amendment, and such description is qualified in its entirety by reference to the full text of the ABL Facility Amendment, a copy of which is attached hereto as Exhibit 10.1. On April 13, 2015, the Company also entered into a corresponding amendment to the Amended and Restated Guaranty and Security Agreement dated February 3, 2014, which amendment is attached hereto as Exhibit 10.2.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

On April 11, 2015, the Company and the Buyer completed the TFI Disposition as contemplated by the previously disclosed Purchase Agreement by and among the Company, HESI, TFI and the Buyer.

The Company applied 100% of the net proceeds received on the closing date of the TFI Disposition to reduce the outstanding balance under the ABL Facility. Pursuant to the Purchase Agreement, $4.25 million of the Purchase Price was deposited into an escrow account to satisfy the Company’s indemnification obligations under the Purchase Agreement. Any remaining balance in the escrow account will be released to the Company eighteen (18) months following the closing date. Pursuant to the Purchase Agreement, the Purchase Price paid at closing was adjusted pursuant to an estimated working capital adjustment, which is subject to post-closing reconciliation, to reflect TFI’s actual working capital (calculated in accordance with the Purchase Agreement) on the closing date. After giving effect to the indemnity escrow, the estimated working capital adjustment and the payment of transaction fees and other expenses, the amount of net cash proceeds received by the Company on the closing date was approximately $74.6 million. The post-closing working capital reconciliation may result in an increase or decrease in the Company’s final net cash proceeds.

The foregoing description of the Purchase Agreement is only a summary and does not purport to be a complete description of the terms and conditions under the Purchase Agreement, and such description is qualified in its entirety by reference to the full text of the Purchase Agreement, which is attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K dated February 4, 2015, and the full text of Amendment No. 1 to Stock Purchase Agreement, dated March 25, 2015, which will be filed with the Company’s next Quarterly Report on Form 10-Q.


Item 7.01 Regulation FD Disclosure.

On April 14, 2015, the Company issued a press release announcing that it had completed the TFI Disposition. A copy of the press release is attached hereto as Exhibit 99.1.

The information contained in the press release is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

(b) Pro Forma Financial Information

Pro forma financial statements are not included in this Current Report on Form 8-K as the assets, liabilities and results of operations of the Company’s industrial solutions business have been presented as held for sale and discontinued operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, filed on March 16, 2015. Accordingly, there are no pro forma effects on the Company’s historical income from continuing operations, as previously reported, as a result of the consummation of the TFI Disposition.

(d) Exhibits

 

Exhibit

Number

  

Description

10.1    Second Amendment, Consent and Release to Amended and Restated Credit Agreement dated April 13, 2015, by and among the Company, the Agent and the Lenders.
10.2    First Amendment to Amended and Restated Guaranty and Security Agreement dated April 13, 2015, by and among the Company, certain subsidiaries of the Company named therein, as grantors, and the Agent.
99.1    Press Release, dated April 14, 2015.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

NUVERRA ENVIRONMENTAL SOLUTIONS, INC.
Date: April 14, 2015 By:

/s/ Joseph M. Crabb

Name: Joseph M. Crabb
Title: Executive Vice President and Chief Legal Officer


EXHIBIT INDEX

 

Exhibit

Number

  

Description

10.1    Second Amendment, Consent and Release to Amended and Restated Credit Agreement dated April 13, 2015, by and among the Company, the Agent and the Lenders.
10.2    First Amendment to Amended and Restated Guaranty and Security Agreement dated April 13, 2015, by and among the Company, certain subsidiaries of the Company named therein, as grantors, and the Agent.
99.1    Press Release, dated April 14, 2015.

Exhibit 10.1

SECOND AMENDMENT, CONSENT AND RELEASE

TO

AMENDED AND RESTATED CREDIT AGREEMENT

THIS SECOND AMENDMENT, CONSENT AND RELEASE TO AMENDED AND RESTATED CREDIT AGREEMENT (this “ Amendment ”) is entered into as of April 13, 2015, by and among WELLS FARGO BANK, NATIONAL ASSOCIATION, as agent (“ Agent ”) for the Lenders (as defined in the Credit Agreement referred to below), the Lenders party hereto, and NUVERRA ENVIRONMENTAL SOLUTIONS, INC., a Delaware corporation (“ Borrower ”).

WHEREAS, Borrower, Agent, and Lenders are parties to that certain Amended and Restated Credit Agreement dated as of February 3, 2014 (as amended, restated, modified or supplemented from time to time, the “ Credit Agreement ”);

WHEREAS, to guarantee and secure payment and performance of the Obligations under the Credit Agreement, Borrower, the Guarantors party thereto, (the “ Guarantors ” together with Borrower, the “ Loan Parties ”) and Agent entered into that certain Amended and Restated Guaranty and Security Agreement, dated as of February 3, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “ Security Agreement ”), pursuant to which each Guarantor guaranteed the Obligations and each Loan Party granted to Agent, for the benefit of the Lenders, a security interest in substantially all of each Loan Party’s assets;

WHEREAS, Borrower owns all of the issued and outstanding shares of common stock (the “ Shares ”) of Heckmann Environmental Services, Inc., a Delaware corporation (“ Heckmann ”);

WHEREAS, Heckmann is a holding company that owns all of the issued and outstanding shares of common stock of Thermo Fluids, Inc., a Delaware corporation (“ Thermo Fluids ”);

WHEREAS, the Loan Parties have notified Agent and the Lenders that Borrower has entered into a Stock Purchase Agreement dated February 3, 2015 as amended by Amendment No. 1 to Stock Purchase Agreement dated as of March 25, 2015 (as attached hereto as Exhibit A , collectively, the “ Purchase Agreement ”) with Safety-Kleen, Inc., a Delaware corporation (“ Buyer ”), under the terms of which Borrower shall sell, transfer and convey the Shares to Buyer;

WHEREAS, the Loan Parties have requested that Agent and the Lenders each: (i) consent to the sale of the Shares pursuant to the terms of the Purchase Agreement; (ii) release Agent’s Lien on the Shares; (iii) release Agent’s Lien on the assets of Heckmann and Thermo Fluids; and (iv) release each of Heckmann and Thermo Fluids from its obligations under the Security Agreement and each other Loan Document;

WHEREAS, Agent and Lenders are each willing to provide such consent and release on the terms as set forth herein;

WHEREAS, Agent, Lenders and Borrower have agreed to amend the Credit Agreement in certain respects.


NOW THEREFORE, in consideration of the premises and mutual agreements herein contained, the parties hereto agree as follows:

1. Defined Terms . Unless otherwise defined herein, capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Credit Agreement.

2. Consent . In reliance upon the representations and warranties of Borrower set forth in Section 7 below and subject to the satisfaction of the conditions to effectiveness set forth in Section 6 below, effective upon (i) the consummation of the sale of the Shares in accordance with the terms of the Purchase Agreement and (ii) the receipt by Agent of all of the Net Cash Proceeds of such sale (in any event, in an amount not less than $70,000,000) in the following account:

 

Bank: Wells Fargo Bank, N.A.
ABA No.: 121-000-248
Account No.: [omitted]
Reference: Nuverra
Account Name: Wells Fargo Bank, N.A.,

Agent and Lenders consent to the consummation of the sale of the Shares in accordance with the terms of the Purchase Agreement and acknowledge, confirm and agree that (x) Heckmann and Thermo Fluids are released from all Obligations under the Security Agreement and each other Loan Document, (y) Heckmann and Thermo Fluids shall no longer be or be deemed to be a “Guarantor” or “Grantor” or obligor of any nature under or pursuant to the Security Agreement or any other Loan Document, and (z) Agent’s Liens on all the assets of Heckmann and Thermo Fluids and the Shares are released. All of the Net Cash Proceeds received by Agent upon the consummation of the sale of the Shares shall be applied to the Revolving Loans. This consent is a limited consent and shall not be deemed to constitute a consent with respect to any other current or future departure from the requirements of any provision of the Credit Agreement or any other Loan Documents.

3. Amendment . In reliance upon the representations and warranties of Borrower set forth in Section 7 below and subject to the satisfaction of the conditions to effectiveness set forth in Section 6 below and effective upon the effectiveness of the consent set forth in Section 2 :

(a) Article 2 of the Credit Agreement is hereby amended by deleting Section 2.14 therein in its entirety.

(b) Article 4 of the Credit Agreement is hereby amended by adding a new Section 4.28 to the end thereof to read in its entirety as follows:

4.28 Net Bond Proceeds of Asset Sales . As of the Second Amendment Effective Date (after giving effect to the sale of the “Shares” (as defined in the Second Amendment)) the aggregate amount of Net Bond Proceeds from all Asset Sales since April 10, 2012 that have not been applied or invested as provided in Section 4.10(b) of the Bond Indenture is $0.

 

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(c) [Reserved].

(d) Article 5 of the Credit Agreement is hereby amended by adding a new Section 5.17 to the end thereof to read in its entirety as follows:

5.17 Excess Proceeds Under Indenture . No less than thirty (30) days prior to the date that Borrower and its Subsidiaries shall have Excess Proceeds and/or Net Bond Proceeds that are expected to become Excess Proceeds in the aggregate in excess of $25,000,000, Borrower shall (A) either (i) reduce the Maximum Revolver Amount in accordance with Section 2.4(c), or (ii) apply such funds in accordance with clauses (2), (3) or (4) of Section 4.10(b) of the Bond Indenture (provided, that such application is not otherwise prohibited by this Agreement), in either case such that the result is that no such Excess Proceeds shall be used, and shall not be required to be used, to repurchase any of the Bonds, and (B) deliver to Agent a certification by an Authorized Person that no such Excess Proceeds have or will be, and are not required to be, used to repurchase any of the Bonds. Upon the request of Agent, Borrower shall deliver a report to Agent (i) describing each Asset Sale consummated since April 10, 2012 and the date of consummation thereof, (ii) setting forth the date of receipt and amount of Net Bond Proceeds in connection with each such Asset Sale, and (iii) setting forth the date and the application of the Net Bond Proceeds from each such Asset Sale in accordance with clauses (2), (3) or (4) of Section 4.10(b) of the Bond Indenture. Not less than one hundred (120) days prior to the date that any Net Bond Proceeds of Asset Sales would become Excess Proceeds, Borrower shall provide written notification thereof to Agent, together with a certification by an Authorized Person certifying the amount of such Net Bond Proceeds that shall become Excess Proceeds.

(e) Section 8.2(a) of the Credit Agreement is hereby amended to replace the phrase “or 5.15” with “, 5.15 or 5.17”.

(f) Schedule 1.1 of the Credit Agreement is hereby amended to delete the defined term “Excess” in its entirety.

(g) Schedule 1.1 of the Credit Agreement is hereby amended to add the following defined terms in the appropriate alphabetical order:

Asset Sales ” has the meaning specified therefor in the Bond Indenture.

Excess Proceeds ” has the meaning specified therefor in the Bond Indenture.

Interest Payment Reserves ” means, as of any date of determination, a reserve in the amount of $20,154,000 to establish and maintain with respect to the Borrowing Base and the Maximum Revolver Amount; provided, that such reserve shall be reduced to $0 upon payment by Borrower of the April 15, 2015 interest payment owing to the Bondholders pursuant to the Bond Indenture.

 

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March 2015 Appraisal ” means the appraisal of the Net Orderly Liquidation Value of Eligible Equipment in form and substance satisfactory to Agent prepared by Great American Group Advisory and Valuation Services, LLC, on or after March 1, 2015.

Net Bond Proceeds ” means the “Net Proceeds”, as such term is defined in the Bond Indenture.

Second Amendment ” means that certain Second Amendment, Consent and Release to Amended and Restated Credit Agreement, dated as of the Second Amendment Effective Date, by and among Borrower, Agent and the Lenders party thereto.

Second Amendment Effective Date ” means April 13, 2015.

(h) Schedule 1.1 of the Credit Agreement is hereby amended by amending clause (c) of the defined term “EBITDA”: (i) by deleting the “and” at the end of subclause (xii) thereof; (ii) by deleting the “.” at the end of subclause (xiii) thereof and replacing it in its entirety with “, and”; and (iii) adding a new subclause (xiv) to the end thereof to read in its entirety as follows:

(xiv) fees, costs and expenses incurred on or prior to the Second Amendment Effective Date in connection with the disposition by Borrower of Heckmann Environmental Services, Inc. and Thermo Fluids, Inc. in an aggregate amount not to exceed $6,000,000.

(i) Schedule 1.1 of the Credit Agreement is hereby amended to amend and restate the following definitions each in its entirety to read as follows:

Applicable Margin ” means, as of any date of determination and with respect to Base Rate Loans or LIBOR Rate Loans, as applicable, the applicable margin set forth in the following table that corresponds to the Average Excess Availability of Borrower for the most recently completed month; provided , that for the period from the Closing Date through and including April 30, 2014, the Applicable Margin shall be set at the margin in the row styled “Level III”:

 

Level

  

Average Excess
Availability

  

Applicable Margin
Relative to Base Rate
Loans (the “Base Rate
Margin”)

  

Applicable
Margin Relative
to LIBOR Rate
Loans (the
“LIBOR Rate
Margin”)

I   

³  $119,000,000

  

0.75 percentage points

  

1.75 percentage points

II   

< $119,000,000 and  ³  $80,000,000

  

1.00 percentage points

  

2.00 percentage points

III   

< $80,000,000 and  ³  $40,000,000

  

1.25 percentage points

  

2.25 percentage points

IV   

< $40,000,000

  

1.50 percentage points

  

2.50 percentage points

 

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The Applicable Margin shall be re-determined as of the first day of each calendar month of Borrower.

Applicable Unused Line Fee Percentage ” means, as of any date of determination, the applicable percentage set forth in the following table that corresponds to the Average Revolver Usage of Borrower for the most recently completed month as determined by Agent in its Permitted Discretion; provided , that for the period from the Closing Date through and including April 30, 2014, the Applicable Unused Line Fee Percentage shall be set at the rate in the row styled “Level II”:

 

Level

  

Average Revolver Usage

  

Applicable Unused Line Fee
Percentage

I   

³ $97,500,000

  

0.25 percentage points

II   

< $97,500,000

  

0.375 percentage points

The Applicable Unused Line Fee Percentage shall be re-determined on the first date of each month by Agent.

Borrowing Base ” means, as of any date of determination, the result of:

(a) the sum of (x) 85% of the amount of Eligible Accepted Accounts and (y) the lesser of $12,500,000 and 85% of the amount of Eligible Ticket Held Accounts, less the amount, if any, of the Dilution Reserve, plus

(b) the lower of

(i) the product of 95% multiplied by the net book value (calculated in accordance with GAAP on a basis consistent with Borrower’s historical accounting practices) of Eligible Equipment at such time, and

(ii) the sum of (x) the product of 85% multiplied by the Net Orderly Liquidation Value of Eligible Equipment at such time identified in the most recent Equipment appraisal ordered and obtained by Agent plus (y) the product of 85% of the hard cost (as reflected in the

 

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invoice therefor and excluding tax, freight, installation charges and other soft costs) of Eligible Equipment acquired by a Loan Party as new and unused after the date of the most recent Equipment appraisal ordered and obtained by Agent and not identified in such appraisal,

provided , that in no event shall Availability attributable to Eligible Equipment under clause (b) of the Borrowing Base exceed 75% of the Borrowing Base at any time; minus

(c) the aggregate amount of Receivables Reserves, Bank Product Reserves, Equipment Reserves, Interest Payment Reserves and other Reserves, if any, established by Agent under Section 2.1(c) of the Agreement.

Covenant Testing Period ” means a period (a) commencing on the last day of the fiscal month of Borrower most recently ended on or prior to a Covenant Trigger Date and for which Agent has received financial statements required to be delivered pursuant to Schedule 5.1 and (b) ending on the first day after such Covenant Trigger Date that Excess Availability has equaled or exceeded the greater of (i) $24,375,000 and (ii) 12.5% of the Maximum Revolver Amount for 90 consecutive days.

Covenant Trigger Date ” means any day on which Borrower fails to maintain Excess Availability in an amount at least equal to the greater of (i) $24,375,000, and (ii) 12.5% of the Maximum Revolver Amount.

Maximum Revolver Amount ” means $195,000,000, as decreased by the amount of reductions in the Revolver Commitments made in accordance with Section 2.4(c) of the Agreement.

(j) Schedule 5.2 of the Credit Agreement is hereby amended by amending and restating section “Upon request by Agent” therein to read in its entirety as follows:

 

Upon

request

by Agent

(m) an insurance claim report,

 

(n) a 13-week cash flow forecast of Borrower and its Subsidiaries, in form and substance reasonably satisfactory to Agent, which shall be delivered at Agent’s request no more frequently than weekly,

 

(o) such other reports as to the Collateral or the financial condition of Borrower and its Subsidiaries, as Agent may reasonably request.

(k) Schedule C-1 to the Credit Agreement is replaced in its entirety with Schedule C-1 attached hereto.

 

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(l) Schedules A-2, E-1, E-2, P-2, R-1, 4,1(c), 4.1(d), 4.6(b), 4.14, 4.20 and 4.24 to the Credit Agreement are hereby replaced with Schedules A-2, E-1, E-2, P-2, R-1, 4,1(c), 4.1(d), 4.6(b), 4.14, 4.20 and 4.24, respectively, attached hereto.

4. Effectiveness of Amendment; Continuing Effect; Acknowledgment . Except as expressly set forth in Section 2 and Section 3 above, nothing in this Amendment shall constitute a modification or alteration of the terms, conditions or covenants of the Credit Agreement or any other Loan Document, or a waiver of any other terms or provisions thereof, and the Credit Agreement and the other Loan Documents shall remain unchanged and shall continue in full force and effect, in each case as amended hereby. The parties hereto acknowledge that the March 2015 Appraisal shall be implemented as of the Second Amendment Effective Date. This Amendment is a Loan Document.

5. Reaffirmation and Confirmation; Covenant . Borrower hereby ratifies, affirms, acknowledges and agrees that the Credit Agreement and the other Loan Documents to which it is a party represent the valid, enforceable and collectible obligations of Borrower, and further acknowledges that there are no existing claims, defenses, personal or otherwise, or rights of setoff whatsoever with respect to the Credit Agreement or any other Loan Document. Borrower hereby agrees that, except as expressly provided in Section 2 , this Amendment in no way acts as a release or relinquishment of the Liens and rights securing payments of the Obligations. The Liens and rights securing payment of the Obligations are hereby ratified and confirmed by Borrower in all respects. Upon the effectiveness of the consent set forth in and in accordance with Section 2 , Agent agrees to promptly (i) deliver to Borrower, Heckmann, Thermo Fluids or their respective designees (as directed by Borrower) and authorizes Borrower, Heckmann, Thermo Fluids and/or their respective designees to file the UCC-3 termination and amendment statements attached hereto as Exhibit B , (ii) deliver to Borrower, Heckmann, Thermo Fluids or their respective designees (as directed by Borrower) and authorizes Borrower, Heckmann, Thermo Fluids and/or their respective designees to file the mortgage releases attached hereto as Exhibit C , (iii) deliver to Borrower, Heckmann, Thermo Fluids or their respective designees (as directed by Borrower) and authorizes Borrower, Heckmann, Thermo Fluids and/or their respective designees to file the intellectual property release attached hereto as Exhibit D , (iv) deliver to Borrower, Heckmann, Thermo Fluids or their respective designees (as directed by Borrower) the deposit account control agreement termination attached hereto as Exhibit E , (v) deliver to Davis, Malm & D’Agostine, P.C., One Boston Place, Boston, MA 02108, Attention: Daniel T. Janis via overnight delivery the stock certificates of Heckmann and Thermo Fluids each attached hereto as Exhibit F , and (vi) deliver to Borrower, Heckmann, Thermo Fluids or their respective designees (as directed by Borrower) the vehicle titles listed on Exhibit G (it being understood that delivery of such titles will be within 10 days following the effectiveness of the consent set forth in Section 2 ).

6. Conditions to Effectiveness . This Amendment shall become effective upon the satisfaction of each of the following conditions precedent, in each case satisfactory to Agent in all respects:

(a) Agent shall have received a copy of this Amendment executed and delivered by all Lenders, Agent and the Loan Parties;

 

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(b) Agent shall have received an executed amendment to the Security Agreement, in form and substance satisfactory to Agent;

(c) Substantially contemporaneously herewith, the transactions contemplated by the Purchase Agreement shall have been consummated in accordance with the terms thereof; and

(d) no Default or Event of Default shall have occurred and be continuing on the date hereof or as of the date of the effectiveness of this Amendment.

7. Representations and Warranties . In order to induce Agent and Lenders to enter into this Amendment, Borrower hereby represents and warrants to Agent and Lenders that:

(a) after giving effect to this Amendment, all representations and warranties contained in the Loan Documents to which Borrower is a party are true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of this Amendment, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of such earlier date);

(b) Heckmann does not conduct any business or own any assets other than its ownership of the equity securities of Thermo Fluids, and has not incurred any Indebtedness or liabilities other than liabilities incidental to the conduct of its business as a holding company or the Obligations;

(c) attached hereto as Exhibit A is a true, correct and complete copy of the Purchase Agreement, as amended through the Second Amendment Effective Date;

(d) no Default or Event of Default has occurred and is continuing; and

(e) this Amendment and the Loan Documents, as amended hereby, constitute legal, valid and binding obligations of Borrower and are enforceable against Borrower in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally.

8. Post-Closing Covenant .

(a) On or prior to the date that is two (2) Business Days (or such later date as Agent may agree to in writing in its sole discretion) after the date hereof, Borrower shall deliver to Agent evidence that Borrower has engaged a nationally-recognized consultant satisfactory to Agent on terms and conditions satisfactory to Agent. Without limiting the foregoing, such engagement shall include the following requirements for the scope of such consultant’s duties and responsibilities: (i) reviewing and analyzing Borrower’s and its Subsidiaries assets, operating and

 

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financial strategies and liquidity; (ii) reviewing and analyzing the business plans and financial projections prepared by Borrower, including, but not limited to, testing assumptions and comparing those assumptions to historical trends of Borrower and its Subsidiaries and industry trends; (iii) evaluating the debt capacity of Borrower and its Subsidiaries in light of projected cash flows; (iv) assisting in the preparation of the 13-week cash flow forecasts required to be delivered to Agent pursuant to the terms of the Credit Agreement; (v) promptly furnishing to Agent and its professionals and advisors all related diligence materials and work product, including written reports provided by consultant to Borrower, as may be reasonably requested by Agent (other than any such materials and reports determined by Borrower or its counsel to be subject to the work-product doctrine or attorney-client privilege); and (vi) communicating directly and conferring with Agent and its professionals and advisors regarding Borrower and its Subsidiaries and any matters within the scope of its engagement as described therein. Failure to comply with the provisions of this Section 8(a) shall constitute an immediate Event of Default.

(b) Borrower and each of its Subsidiaries hereby authorizes the consultant retained by Borrower to communicate directly with Agent and its professionals and advisors regarding Borrower and its Subsidiaries and any matters within the scope of its work related thereto.

(c) Borrower and its Subsidiaries shall cooperate fully with Agent and its professionals and advisors and provide assistance with any and all diligence Agent or its professionals and advisors may reasonably require, including, but not limited to, providing Agent and its counsel and advisors with prompt reasonable access to (w) the consultant retained by Borrower pursuant hereto, (x) all related diligence materials and work product, including written reports provided by such consultant to Borrower as may be reasonably requested by Agent (other than any such materials and reports determined by Borrower or its counsel to be subject to the work-product doctrine or attorney-client privilege), (y) Borrower and its Subsidiaries’ respective property, business locations and books and records, and (z) such other available information as Agent or its professionals and advisors shall reasonably request. Failure to comply with the provisions of this Section 8(c) , which failure shall continue for a period of five (5) days, shall constitute an Event of Default.

(d) On or before May 15, 2015, Borrower shall cause each of Nuverra Rocky Mountain Pipeline, LLC, NES Water Solutions, LLC, Nuverra Total Solutions, LLC and Heckman Woods Cross LLC to become a Guarantor and comply with Sections 5.11 and 5.12 of the Credit Agreement as if it were not an Immaterial Subsidiary. Failure to comply with the provisions of this Section 8(d) shall constitute an immediate Event of Default.

9. Miscellaneous .

(a) Expenses . Borrower agrees to pay on demand all reasonable costs and expenses of Agent (including reasonable attorneys’ fees) incurred in connection with the preparation, negotiation, execution, delivery and administration of this Amendment and all other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith. All obligations provided herein shall survive any termination of this Amendment and the Credit Agreement as amended hereby.

 

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(b) Choice of Law and Venue; Jury Trial Waiver; Reference Provision . Without limiting the applicability of any other provision of the Credit Agreement or any other Loan Document, the terms and provisions set forth in Section 12 of the Credit Agreement are expressly incorporated herein by reference.

(c) Counterparts . This Amendment may be executed in any number of counterparts, and by the parties hereto on the same or separate counterparts, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment.

10. Release .

(a) In consideration of the agreements of Agent and Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of Borrower and each Guarantor that executes a Consent and Reaffirmation to this Amendment, on behalf of itself and its successors, assigns, and other legal representatives (Borrower, each Guarantor and all such other Persons being hereinafter referred to collectively as the “ Releasors ” and individually as a “ Releasor ”), hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent, Issuing Bank and Lenders, and their successors and assigns, and their present and former shareholders, Affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, Issuing Bank, each Lender and all such other Persons being hereinafter referred to collectively as the “ Releasees ” and individually as a “ Releasee ”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a “ Claim ” and collectively, “ Claims ”) of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which any Releasor may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the day and date of this Amendment, in any way related to or in connection with the Credit Agreement, or any of the other Loan Documents or transactions thereunder or related thereto.

(b) Each Borrower and each Guarantor that executes a Consent and Reaffirmation to this Amendment understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

(c) Each Borrower and each Guarantor that executes a Consent and Reaffirmation to this Amendment agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized and delivered as of the date first above written.

 

NUVERRA ENVIRONMENTAL SOLUTIONS,
INC.
, a Delaware corporation
By:  

/s/ Mark D. Johnsrud

Name:   Mark D. Johnsrud
Title:   Chairman and Chief Executive Officer

 

Signature Page Consent, Second Amendment and Release to Amended and Restated Credit Agreement


WELLS FARGO BANK, NATIONAL
ASSOCIATION
, as Agent and as a Lender
By:  

/s/ Zachary S. Buchanan

Name:   Zachary S. Buchanan
Title:   AVP

 

Signature Page Consent, Second Amendment and Release to Amended and Restated Credit Agreement


BANK OF AMERICA, N.A. , as a Lender
By:  

/s/ Lauren Trussell

Name:   Lauren Trussell
Title:   Vice President

 

Signature Page Consent, Second Amendment and Release to Amended and Restated Credit Agreement


CITIZENS BANK OF PENNSYLVANIA ,   as a
Lender
By:  

/s/ Josh Bailey

Name:   Josh Bailey
Title:   Vice President

 

Signature Page Consent, Second Amendment and Release to Amended and Restated Credit Agreement


CAPITAL ONE BUSINESS CREDIT CORP ., as a
Lender
By:  

/s/ Edward Behnen

Name:   Edward Behnen
Title:   Vice President

 

Signature Page Consent, Second Amendment and Release to Amended and Restated Credit Agreement


CIT FINANCE LLC , as a Lender
By:

/s/ Joseph Gyurindak

Name: Joseph Gyurindak
Title: Director

 

Signature Page Consent, Second Amendment and Release to Amended and Restated Credit Agreement


CONSENT AND REAFFIRMATION

Each of the undersigned (each a “ Guarantor ”) hereby (i) acknowledges receipt of a copy of the foregoing Second Amendment, Consent and Release to Amended and Restated Credit Agreement (terms defined therein and used, but not otherwise defined, herein shall have the meanings assigned to them therein); (ii) consents to Borrower’s execution and delivery thereof; (iii) agrees to be bound thereby, including Section 10 of the foregoing Second Amendment, Consent and Release to Amended and Restated Credit Agreement; and (iv) affirms that nothing contained therein shall modify in any respect whatsoever any Loan Documents to which the undersigned is a party and reaffirms that each such Loan Document is and shall continue to remain in full force and effect. Although each Guarantor has been informed of the matters set forth herein and has acknowledged and agreed to same, each Guarantor understands that Agent and Lenders have no obligation to inform such Guarantor of such matters in the future or to seek such Guarantor’s acknowledgment or agreement to future consents, amendments or waivers, and nothing herein shall create such a duty.

 

HECKMANN WATER RESOURCES CORPORATION
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: President
HECKMANN WATER RESOURCES (CVR), INC.
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: President
1960 WELL SERVICES, LLC
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: Chief Operating Officer and President

 

Consent and Reaffirmation to Consent, Second Amendment and Release to Amended and Restated Credit Agreement


HEK WATER SOLUTIONS, LLC
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: Chief Operating Officer and President
APPALACHIAN WATER SERVICES, LLC
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: Chief Operating Officer and President
BADLANDS POWER FUELS, LLC , a Delaware limited liability company
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: President
BADLANDS POWER FUELS, LLC , a North Dakota limited liability company
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: President
LANDTECH ENTERPRISES, L.L.C.
BADLANDS POWERFUELS, LLC (DE), Sole Member
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: President

 

Consent and Reaffirmation to Consent, Second Amendment and Release to Amended and Restated Credit Agreement


BADLANDS LEASING, LLC
By:  

/s/ Mark D. Johnsrud

Name:   Mark D. Johnsrud
Title:   President

 

IDEAL OILFIELD DISPOSAL, LLC
BADLANDS POWERFUELS, LLC (DE), Sole Member
By:  

/s/ Mark D. Johnsrud

Name:   Mark D. Johnsrud
Title:   President

 

Consent and Reaffirmation to Consent, Second Amendment and Release to Amended and Restated Credit Agreement


Schedule C-1

Commitments

 

Lender

   Revolver Commitment  

Wells Fargo Bank, National Association

   $ 59,693,878   

Bank of America, N.A.

   $ 39,795,918   

Citizens Bank of Pennsylvania

   $ 39,795,918   

Capital One Business Credit Corp.

   $ 27,857,143   

CIT Finance LLC

   $ 27,857,143   
  

 

 

 

All Lenders

$ 195,000,000   
  

 

 

 

Exhibit 10.2

FIRST AMENDMENT TO

AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT

THIS FIRST AMENDMENT TO AMENDED AND RESTATED GUARANTY AND SECURITY AGREEMENT (this “ Amendment ”) is entered into as of April 13, 2015, by and among the Persons listed on the signature pages hereof as “Grantors” (each, a “ Grantor ” and collectively, the “ Grantors ”, together with Borrower (as defined below), the “ Loan Parties ”), and WELLS FARGO BANK, NATIONAL ASSOCIATION , a national banking association (“ Wells Fargo ”), in its capacity as agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, “ Agent ”).

WHEREAS, Nuverra Environmental Solutions, Inc., a Delaware corporation (“ Borrower ”), Agent, and Lenders are parties to that certain Amended and Restated Credit Agreement dated as of February 3, 2014 (as amended, restated, modified or supplemented from time to time, the “ Credit Agreement ”);

WHEREAS, to guarantee and secure payment and performance of the Obligations under the Credit Agreement, the Loan Parties and Agent entered into that certain Amended and Restated Guaranty and Security Agreement, dated as of February 3, 2014 (as amended, restated, supplemented or otherwise modified from time to time, the “ Security Agreement ”), pursuant to which each Guarantor guaranteed the Obligations and each Loan Party granted to Agent, for the benefit of the Lenders, a security interest in substantially all of each Loan Party’s assets;

WHEREAS, Borrower has sold all of the issued and outstanding shares of common stock (the “ Shares ”) of Heckmann Environmental Services, Inc., a Delaware corporation (“ Heckmann ”), and Heckmann is a holding company that owns all of the issued and outstanding shares of common stock of Thermo Fluids, Inc., a Delaware corporation (“ Thermo Fluids ”);

WHEREAS, in connection with such sale, Agent and the Lenders have (i) released Agent’s Lien on the Shares; (ii) released Agent’s Lien on the assets of Heckmann and Thermo Fluids; and (iii) released each of Heckmann and Thermo Fluids from its obligations under the Security Agreement and each other Loan Document;

WHEREAS, Agent and the Loan Parties have agreed to amend the Security Agreement in certain respects.

NOW THEREFORE, in consideration of the premises and mutual agreements herein contained, the parties hereto agree as follows:

1. Defined Terms . Unless otherwise defined herein, capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Security Agreement.


2. Amendment . In reliance upon the representations and warranties of the Grantors set forth in Section 6 below and subject to the satisfaction of the conditions to effectiveness set forth in Section 5 below:

(a) Section 1(a) of the Security Agreement is hereby amended by amending and restating the following defined term in its entirety as follows:

(lxxv) “Triggering Event” means, as of any date of determination, that (A) an Event of Default has occurred as of such date or (B) Excess Availability is less than the greater of (i) $24,375,000 and (ii) 12.5% of the Maximum Revolver Amount as of such date.

(b) Section 7(k)(ii) of the Security Agreement is hereby amended and restated as follows:

(ii) Each Grantor shall establish and maintain Controlled Account Agreements with Agent and the applicable Controlled Account Bank, in form and substance reasonably acceptable to Agent. Unless otherwise agreed to by Agent, each such Controlled Account Agreement shall provide, among other things, that (A) the Controlled Account Bank will comply with any instructions originated by Agent directing the disposition of the funds in such Controlled Account without further consent by the applicable Grantor, (B) the Controlled Account Bank waives, subordinates, or agrees not to exercise any rights of setoff or recoupment or any other claim against the applicable Controlled Account other than for payment of its service fees and other charges directly related to the administration of such Controlled Account and for returned checks or other items of payment, and (C) upon the instruction of Agent (an “Activation Instruction”), the Controlled Account Bank will forward by daily sweep all amounts in the applicable Controlled Account to the Agent’s Account. Agent agrees not to issue an Activation Instruction with respect to the Controlled Accounts unless a Triggering Event has occurred and is continuing at the time such Activation Instruction is issued. If a Triggering Event has occurred and is continuing, Agent may in its discretion issue an Activation Instruction, provided that if the Triggering Event exists as a result of Excess Availability being less than the greater of (i) $24,375,000 and (ii) 12.5% of the Maximum Revolver Amount, Agent shall issue such Activation Instruction. Agent agrees to use commercially reasonable efforts to rescind an Activation Instruction (the “Rescission”) if, after the occurrence of such Triggering Event, (x) ninety (90) consecutive days have passed during which Excess Availability has exceeded the greater of (i) $24,375,000 and (ii) 12.5% of the Maximum Revolver Amount and (y) no Event of Default has occurred and is continuing.

(c) Schedules 5, 6, 7, 8, 9, 10 and 11 to the Security Agreement are hereby replaced with Schedules 5, 6, 7, 8, 9, 10 and 11, respectively, attached hereto.

3. Effectiveness of Amendment; Continuing Effect . Except as expressly set forth in Section 2 above, nothing in this Amendment shall constitute a modification or alteration of the terms, conditions or covenants of the Security Agreement, the Credit Agreement or any other Loan Document, or a waiver of any other terms or provisions thereof, and the Security Agreement, the Credit Agreement and the other Loan Documents shall remain unchanged and shall continue in full force and effect, in each case as amended hereby. This Amendment is a Loan Document.

 

-2-


4. Reaffirmation and Confirmation; Covenant . Each Grantor hereby ratifies, affirms, acknowledges and agrees that the Security Agreement and the other Loan Documents to which it is a party represent the valid, enforceable and collectible obligations of such Grantor (except as may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally), and further acknowledges that there are no existing claims, defenses, personal or otherwise, or rights of setoff whatsoever with respect to the Security Agreement or any other Loan Document. Each Grantor hereby agrees that this Amendment in no way acts as a release or relinquishment of the Liens and rights securing payments of the Obligations. The Liens and rights securing payment of the Obligations are hereby ratified and confirmed by each Grantor in all respects.

5. Conditions to Effectiveness . This Amendment shall become effective upon the satisfaction of each of the following conditions precedent, in each case satisfactory to Agent in all respects:

(a) Agent shall have received a copy of this Amendment executed and delivered by Agent and the Loan Parties; and

(b) no Default or Event of Default shall have occurred and be continuing on the date hereof or as of the date of the effectiveness of this Amendment.

6. Representations and Warranties . In order to induce Agent to enter into this Amendment, each Grantor hereby represents and warrants to Agent and Lenders that:

(a) after giving effect to this Amendment, all representations and warranties contained in the Loan Documents to which such Grantor is a party are true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of this Amendment, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true, correct and complete in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of such earlier date);

(b) no Default or Event of Default has occurred and is continuing; and

(c) this Amendment and the Loan Documents, as amended hereby, constitute legal, valid and binding obligations of each Grantor and are enforceable against such Grantor in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally.

 

-3-


7. Miscellaneous .

(a) Expenses . Borrower agrees to pay on demand all reasonable documented out-of-pocket costs and expenses of Agent (including reasonable attorneys’ fees) incurred in connection with the preparation, negotiation, execution, delivery and administration of this Amendment and all other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith. All obligations provided herein shall survive any termination of this Amendment and the Security Agreement as amended hereby.

(b) Choice of Law and Venue; Jury Trial Waiver; Reference Provision . Without limiting the applicability of any other provision of the Security Agreement or any other Loan Document, the terms and provisions set forth in Section 25 of the Security Agreement are expressly incorporated herein by reference.

(c) Counterparts . This Amendment may be executed in any number of counterparts, and by the parties hereto on the same or separate counterparts, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Amendment.

[Signature Page Follows]

 

-4-


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized and delivered as of the date first above written.

 

GRANTORS:
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. , a Delaware corporation
By:  

/s/ Mark D. Johnsrud

Name:   Mark D. Johnsrud
Title:   Chairman and Chief Executive Officer

 

HECKMANN WATER RESOURCES
CORPORATION
By:  

/s/ Mark D. Johnsrud

Name:   Mark D. Johnsrud
Title:   President

 

HECKMANN WATER RESOURCES (CVR),
INC.
By:  

/s/ Mark D. Johnsrud

Name:   Mark D. Johnsrud
Title:   President

 

1960 WELL SERVICES, LLC
By:  

/s/ Mark D. Johnsrud

Name:   Mark D. Johnsrud
Title:   Chief Operating Officer and President

 

Signature Page First Amendment to Amended and Restated Guaranty and Security Agreement


HEK WATER SOLUTIONS, LLC
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: Chief Operating Officer and President
APPALACHIAN WATER SERVICES, LLC
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: Chief Operating Officer and President
BADLANDS POWER FUELS, LLC , a Delaware limited liability company
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: President
BADLANDS POWER FUELS, LLC , a North Dakota limited liability company
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: President
LANDTECH ENTERPRISES, L.L.C.
BADLANDS POWERFUELS, LLC (DE), Sole Member
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: President

 

Signature Page First Amendment to Amended and Restated Guaranty and Security Agreement


BADLANDS LEASING, LLC
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: President
IDEAL OILFIELD DISPOSAL, LLC
BADLANDS POWERFUELS, LLC (DE), Sole Member
By:

/s/ Mark D. Johnsrud

Name: Mark D. Johnsrud
Title: President

 

Signature Page First Amendment to Amended and Restated Guaranty and Security Agreement


WELLS FARGO BANK, NATIONAL ASSOCIATION , as Agent
By:

/s/ Zachary S. Buchanan

Name: Zachary S. Buchanan
Title: AVP

 

Signature Page First Amendment to Amended and Restated Guaranty and Security Agreement

Exhibit 99.1

Press Release

 

LOGO

Clean Harbors and Nuverra Close Acquisition of Thermo Fluids Inc.

Norwell, Mass. and Scottsdale, Ariz. – April 14, 2015 – Clean Harbors Inc. (“Clean Harbors”) (NYSE: CLH), the leading provider of environmental, energy and industrial services in North America, and Nuverra Environmental Solutions, Inc. (“Nuverra”) (NYSE: NES), a leading provider of full-cycle environmental solutions to the energy end market, today announced the close of Clean Harbors’ planned acquisition of Thermo Fluids Inc. (TFI) from Nuverra. Clean Harbors purchased Thermo Fluids for $85 million in an all-cash transaction.

Based in Scottsdale, AZ, TFI provides environmental services in 21 U.S. states through a network of 36 permitted facilities. The company operates a well-maintained fleet of trucks and rail cars in servicing more than 20,000 customers. TFI’s range of environmental services includes used oil recycling, used oil filter recycling, antifreeze products, parts washers and solvent recycling. Its industrial waste management services include vacuum services, remediation, lab pack and hazardous waste management.

Clean Harbors Chairman and Chief Executive Officer Alan S. McKim, said, “The acquisition of TFI aligns with our strategy to expand our environmental services customer base and drive incremental volumes into our hazardous waste disposal facilities. TFI ideally complements our SK Environmental Services network as it strengthens our presence in the western U.S. by providing us density in certain regions while also opening new local markets to Clean Harbors.

“Further, TFI will add approximately 50 million gallons of waste oil to Safety-Kleen’s recycling and re-refining business. We expect to effectively leverage its highly scalable platform of collection facilities, storage capabilities, rail assets and transportation fleet with our existing re-refining infrastructure. The net result will be much more efficient collection and movement of waste oil throughout Safety-Kleen’s entire network,” McKim concluded.

Mark D. Johnsrud, Nuverra’s Chairman and Chief Executive Officer, said, “We believe Clean Harbors and its Safety-Kleen division are an excellent strategic fit for TFI and its employees. We commend the TFI team for their commitment to ensuring customers continue to receive the highest-quality services during this transition. This transaction enables us to now fully focus on our core shale solutions business strategies.”


Press Release

 

Nuverra will apply 100% of the net proceeds received to reduce the outstanding balance under its asset-based revolving credit facility. Pursuant to the agreement, $4.25 million of the proceeds was deposited into an indemnity escrow account to secure certain obligations of Nuverra under the purchase agreement. After giving effect to the indemnity escrow, the closing date working capital adjustment and the payment of transaction fees and expenses, the amount of net cash proceeds received by Nuverra on the closing date was approximately $74.6 million.

Houlihan Lokey acted as exclusive financial advisor to Nuverra in connection with the transaction, and Squire Patton Boggs served as Nuverra’s legal counsel.

About Clean Harbors

Clean Harbors (NYSE: CLH) is North America’s leading provider of environmental, energy and industrial services. The Company serves a diverse customer base, including a majority of the Fortune 500, across the chemical, energy, manufacturing and additional markets, as well as numerous government agencies. These customers rely on Clean Harbors to deliver a broad range of services, such as end-to-end hazardous waste management, emergency spill response, industrial cleaning and maintenance, and recycling services. Through its Safety-Kleen subsidiary, Clean Harbors also is North America’s largest recycler and re-refiner of used oil and a leading provider of parts washers and environmental services to commercial, industrial and automotive customers. Founded in 1980 and based in Massachusetts, Clean Harbors operates throughout the United States, Canada, Mexico and Puerto Rico. For more information, visit www.cleanharbors.com .

About Nuverra

Nuverra Environmental Solutions is among the largest companies in the United States dedicated to providing comprehensive and full-cycle environmental solutions to customers in the energy end-market. Nuverra focuses on the delivery, collection, treatment, recycling, and disposal of restricted solids, water, wastewater, waste fluids and hydrocarbons. Nuverra continues to expand its suite of environmentally compliant and sustainable solutions to customers who demand stricter environmental compliance and accountability from their service providers. Interested parties can access additional information about Nuverra on its web site at http://www.nuverra.com, and in documents filed with the United States Securities and Exchange Commission, on the SEC’s web site at http://www.sec.gov.


Press Release

 

Safe Harbor Statement

Any statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “estimates,” “projects,” or similar expressions. Such statements may include, but are not limited to, statements about future financial and operating results, and other statements that are not historical facts. Such statements are based upon the beliefs and expectations of Clean Harbors’ and Nuverra’s management as of this date only and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, without limitation, those items identified as “risk factors” in Clean Harbors’ and Nuverra’s most recently filed Form 10-K, Form 10-Q and other reports filed with the Securities and Exchange Commission. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements. Clean Harbors and Nuverra undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements other than through their filings with the Securities and Exchange Commission, which may be viewed in the “Investors” section of Clean Harbors’ website at www.cleanharbors.com or the “Investors” section of Nuverra’s website at www.nuverra.com .

Contacts:

 

Eric Kraus Jim Buckley
EVP Corporate Comm. & Public Affairs SVP Investor Relations
Clean Harbors, Inc. Clean Harbors, Inc.
781.792.5100 781.792.5100
Kraus.Eric@cleanharbors.com Buckley.James@cleanharbors.com
Liz Merritt
VP Investor Relations & Corporate Comm.
Nuverra Environmental Solutions, Inc.
480-878-7452
Liz.Merritt@nuverra.com