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): November 20, 2020
  __________________________________
 
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.)
6720 N. Scottsdale Road, Suite 190, Scottsdale, AZ 85253
(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))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common stock, $0.01 par value NES NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
¨ Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 1.01
Entry into a Material Definitive Agreement.

Master Loan Agreement

On November 16, 2020, Nuverra Environmental Solutions, Inc. (“Nuverra” or the “Company”) entered into a Loan Agreement (the “Master Loan Agreement”) with First International Bank & Trust, a North Dakota banking corporation (“Lender”). Pursuant to the Master Loan Agreement, Lender agreed to extend to Nuverra: (i) a $13.0 million equipment term loan (the “Equipment Loan”) that is subject to the Main Street Priority Loan Facility (the “MSPLF”) as established by the Board of Governors of the Federal Reserve System under Section 13(3) of the Federal Reserve Act; (ii) a $10.0 million real estate term loan (the “CRE Loan”); (iii) a $5.0 million operating line of credit (the “Operating LOC Loan”); and (iv) a $4.839 million letter of credit facility (the “Letter of Credit Facility”) (the CRE Loan, the Equipment Loan, the Operating LOC Loan and the Letter of Credit Facility, collectively may be referred to as the “Loans”). On November 18, 2020, the Company was advised by the Lender that the Equipment Loan had been approved as a MSPLF, and the Loans were funded and closed on November 20, 2020 (the “Effective Date”).

The terms of the Master Loan Agreement provide for customary events of default, including, among others, those relating to a failure to make payment, bankruptcy, breaches of representations and covenants, and the occurrence of certain events. Pursuant to the Master Loan Agreement, the Company must maintain a minimum debt service coverage ratio (“DSCR”) of 1.35 to 1.00 beginning December 31, 2021 and annually on December 31 of each year thereafter. The DSCR means the ratio of (i) Adjusted EBITDA to (ii) the annual debt service obligations (less subordinated debt annual debt service) of the Company, calculated based on the actual four quarters ended on the applicable December 31 measurement date. If the DSCR falls below 1.35 to 1.00, then in addition to all other rights and remedies available to Lender, the interest rates on the CRE Loan, the Operating LOC Loan and the Letter of Credit Facility will increase by 1.5% until the minimum DSCR is maintained. The Company may cure a failure to comply with the DSCR by issuing equity interests in the Company for cash and applying the proceeds to the applicable Adjusted EBITDA measurement. In addition, the Master Loan Agreement limits capital expenditures to $7.5 million annually and requires the Company to maintain a positive working capital position of at least $7.0 million at all times. The Master Loan Agreement also requires the Company deposit into a reserve account held by the Lender (the “Reserve Account”) the sum of $2.5 million and make additional monthly deposits of $100,000 into the Reserve Account. Funds held in the Reserve Account are not accessible by the Company and are pledged as additional security for the CRE Loan, the Operating LOC Loan and the Letter of Credit Facility.

Equipment Loan

The Equipment Loan is evidenced by that certain Promissory Note (Equipment Loan) (the “Equipment Note”) executed by the Company in the original principal amount of $13.0 million. The Equipment Loan bears interest at a rate of one-month US dollar LIBOR plus 3.00%. Interest payments during the first year will be deferred and added to the loan balance and principal payments during the first two years will be deferred. Monthly amortization of principal will commence on December 1, 2022, with principal amortization payments due in annual installments of 15% on November 16, 2023, 15% on November 16, 2024 and the remaining 70% on the maturity date of November 16, 2025. The Equipment Loan, plus accrued and unpaid interest, may be prepaid at any time at par. In connection with the Equipment Loan, the Company paid a $130,000 origination fee to Lender and a $130,000 origination fee to MSPLF. The entire outstanding principal balance of Equipment Loan together with all accrued and unpaid interest is due and payable in full on November 16, 2025.

The Equipment Loan includes all covenants and certifications required by the MSPLF, including, without limitation, the MSPLF Borrower Certifications and Covenants Instructions and Guidance. In connection with the same, the Company delivered a Borrower Certifications and Covenants (the “MS Certifications and Covenants”) to MS Facilities LLC, a Delaware limited liability company, a special purpose vehicle of the Federal Reserve. Under the MS Certifications and Covenants, the Company is subject to certain restrictive covenants during the period that the Equipment Loan is outstanding and, with respect to certain of those restrictive covenants, for an additional one year period after the Equipment Loan is repaid, including restrictions on the Company’s ability to repurchase stock, pay dividends or make other distributions and limitations on executive compensation and severance arrangements. The Equipment Loan is secured by a first lien security interest in all equipment and titled vehicles of the Company and its subsidiaries.

The foregoing description of the Equipment Loan does not purport to be complete and is qualified in its entirety by reference to the Master Loan Agreement, Equipment Note and MS Certifications and Covenants, copies of which are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively, and incorporated by reference herein.



CRE Loan

The CRE Loan is evidenced by that certain Promissory Note (Real Estate) (the “CRE Note”) executed by the Company in the original principal amount of $10.0 million. The CRE Loan bears interest at the Federal Home Loan Bank Rate of Des Moines three-year advance rate plus 4.50% with an interest rate floor of 6.50%. The CRE Loan has a twelve-year final maturity. The Company is required to make monthly principal payments of approximately $100,000 and interest payments, and monthly escrow deposits for real estate taxes and insurance. In connection with the CRE Loan, the Company paid a $150,000 origination fee to Lender. The entire outstanding principal balance of the CRE Loan together with all accrued and unpaid interest is due and payable in full on November 13, 2032.

The CRE Loan is secured by a first lien real estate mortgage on certain real estate owned by the Company and its subsidiaries and by the Reserve Account. The Company will incur a declining prepayment premium of 6%, 5%, 4%, 3%, 2%, and 1% of the outstanding principal balance of the CRE Loan over the first six years of the loan, respectively. The Company is not permitted to prepay the principal of the CRE Loan more than 5% per year without the Lender’s prior written approval.

The foregoing description of the CRE Loan does not purport to be complete and is qualified in its entirety by reference to the Master Loan Agreement and the CRE Note, copies of which are attached hereto as Exhibits 10.1 and 10.4, respectively, and incorporated by reference herein.

Operating LOC Loan

The Operating LOC Loan is evidenced by that certain Revolving Promissory Note (Operating Line of Credit Loan) (the “Operating LOC Note”) executed by the Company in the original maximum principal amount of $5.0 million. The Operating LOC Loan bears interest at variable rate, adjusting daily, equal to the Prime Rate of Interest plus 3.75% with an interest rate floor of 7.00%. In connection with the Operating LOC Loan, the Company paid a $50,000 origination fee to Lender. The Operating LOC Loan is currently undrawn and fully available to the Company.

The Operating LOC Loan is secured by a first lien security interest in all business assets of the Company and its subsidiaries, including without limitation all accounts receivable, inventory, trademarks and intellectual property licenses to which it is a party and by the Reserve Account. The entire outstanding principal balance of the Operating LOC Loan together with all accrued and unpaid interest is due and payable in full on November 14, 2021.

The foregoing description of the Operating LOC Loan does not purport to be complete and is qualified in its entirety by reference to the Master Loan Agreement and the Operating LOC Note, copies of which are attached hereto as Exhibits 10.1 and 10.5, respectively, and incorporated by reference herein.

Letter of Credit Facility

The Letter of Credit Facility provides for the issuance of letters of credit of up to $4.839 million in aggregate face amount and is evidenced by that certain Promissory Note (Letter of Credit Loan) (the “Letter of Credit Note”) executed by Borrower. Amounts drawn on letters of credit issued under the Letter of Credit Facility bear interest at a variable rate, adjusting daily, equal to the Prime Rate of Interest plus 3.75% with an interest rate floor of 7.00%. The Letter of Credit Facility has a one-year final maturity. In connection with the Letter of Credit Facility, the Company is required to pay an annual fee equal to 3.00% of the undrawn face amount of each letter of credit issued thereunder. The Letter of Credit Facility is secured by a first lien security interest in all business assets of the Company and its subsidiaries and by the Reserve Account.

The foregoing description of the Letter of Credit Facility does not purport to be complete and is qualified in its entirety by reference to the Master Loan Agreement and the Letter of Credit Note, copies of which are attached hereto as Exhibits 10.1 and 10.6, respectively, and incorporated by reference herein.

Security Agreement, Guaranty, Indemnity Agreement and Assignment of Salt Water Disposal Lease and Contracts

In connection with the Master Loan Agreement, the Company entered into: (i) a Security Agreement, dated as of November 16, 2020, by and among the Company, the other debtors party thereto, and the Lender (the “Security Agreement”) to grant a first lien security interest in all of such debtors’ collateral provided therein to secure the obligations under the Loans; (ii) a Guaranty, dated as of November 16, 2020, by and among the guarantors party thereto and the Lender (the “Guaranty”) to guaranty the indebtedness and obligations under the Master Loan Agreement and the Loans; (iii) an Indemnity Agreement, dated as of November 13, 2020, by and among the Company, the other indemnitors party thereto, and the Lender (the “Indemnity


Agreement”) to indemnify Lender from and against all loss, liability, damage and expense as a result of the existence of hazardous materials or wastes in violation of law upon that certain real estate and the improvements located thereon described in Exhibit A attached thereto; and (iv) an Assignment of Salt Water Disposal Lease and Contracts, dated as of November 13, 2020, by and among the assignors party thereto and the Lender (the “Assignment”) to assign to Lender as collateral certain leases, permits, easements, abstracts and contracts with various parties, as listed on Exhibit A attached thereto. The foregoing descriptions of the Security Agreement, the Guaranty, the Indemnity Agreement and the Assignment are only summaries and do not purport to be complete, and such descriptions are qualified in their entirety by reference to the full text of the Security Agreement, the Guaranty, the Indemnity Agreement and the Assignment, copies of which are attached as Exhibits 10.7, 10.8, 10.9 and 10.10, respectively, and incorporated herein by reference into this Item 1.01.

Item 1.02
Termination of a Material Definitive Agreement.

In connection with the closing of the Loans, Nuverra repaid in full all outstanding indebtedness and terminated all commitments and obligations under the following agreements on the Effective Date:

•First Lien Credit Agreement (the “Credit Agreement”), as amended through the Third Amendment thereto, dated as of August 7, 2017, by and among the lenders party thereto (the “Credit Agreement Lenders”), ACF FinCo I, LP, as administrative agent, and the Company. The Company’s payment to the Credit Agreement Lenders under the Credit Agreement was approximately $12,574,294, which satisfies all of the Company’s debt obligations thereunder. The Company made a liquidated damages payment in the amount of $500,000 and paid a deferred amendment fee of $325,000 as a result of the repayment of indebtedness and termination of the Credit Agreement. The Company also deposited $5,089,950 as cash collateral to secure outstanding letters of credit, which will be released and refunded to the Company upon cancellation of such outstanding letters of credit as replacements are issued under the Letter of Credit Facility. In connection with the repayment of outstanding indebtedness by the Company, the borrowers were permanently released from all security interests, mortgages, liens and encumbrances under the Credit Agreement.

•Second Lien Term Loan Credit Agreement (the “Term Loan Agreement”), as amended through the Second Amendment thereto, dated as of August 7, 2017, by and among the lenders party thereto (the “Term Loan Lenders”), Wilmington Savings Fund Society, FSB, as administrative agent, and the Company. The Company’s payment to the Term Loan Lenders under the Term Loan Agreement was approximately $8,271,587, which satisfies all of the Company’s debt obligations thereunder. The Company did not incur any early termination penalties as a result of the repayment of indebtedness and termination of the Term Loan Agreement. In connection with the repayment of outstanding indebtedness by the Company, the borrowers were permanently released from all security interests, mortgages, liens and encumbrances under the Term Loan Agreement.

The foregoing summaries of the Credit Agreement and the Term Loan Agreement do not purport to be complete and are subject to, and qualified in their entirety by reference to (i) the Credit Agreement, which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on August 11, 2017, and the first and third amendments to the Credit Agreement, which were filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the SEC on October 11, 2018 and Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 17, 2020, respectively, and (ii) the Term Loan Agreement, which was filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on August 11, 2017, and the first and second amendments to the Term Loan Agreement, which were filed as Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the SEC on October 11, 2018 and Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on July 17, 2020, respectively, and are incorporated herein by reference.

Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 of this Form 8-K is incorporated herein by reference.



Item 9.01 Financial Statements and Exhibits.

    (d) Exhibits

Exhibit
Number 		Description
10.1
Loan Agreement, dated as of November 16, 2020, by and between the Company and Lender.
10.2
Promissory Note (Equipment Loan), dated as of November 16, 2020, executed by the Company in favor of Lender.
10.3
Borrower Certifications and Covenants, dated as of November 16, 2020, executed by the Company to MS Facilities LLC, a Delaware limited liability company, a special purpose vehicle of the Federal Reserve.
10.4
Promissory Note (Real Estate), dated as of November 13, 2020, executed by the Company in favor of Lender.
10.5
Revolving Promissory Note (Operating Line of Credit Loan), dated as of November 13, 2020, executed by the Company in favor of Lender.
10.6
Promissory Note (Letter of Credit Loan), dated as of November 18, 2020, executed by the Company in favor of Lender.
10.7
Security Agreement, dated as of November 16, 2020, by and among the Company, the other debtors party thereto, and the Lender.
10.8
Guaranty, dated as of November 16, 2020, by and among the guarantors party thereto and the Lender.
10.9
Indemnity Agreement, dated as of November 16, 2020, by and among the Company, the other indemnitors party thereto, and the Lender.
10.10
Assignment of Salt Water Disposal Lease and Contracts, dated as of November 13, 2020, by and among the assignors party thereto and the Lender.



EXHIBIT INDEX
Exhibit
Number 		Description
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10


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: November 27, 2020
By: /s/ Joseph M. Crabb
Name:
Title: 		Joseph M. Crabb
Executive Vice President, Chief Legal Officer and Corporate Secretary





Exhibit 10.1
LOAN AGREEMENT

THIS LOAN AGREEMENT (as it may be amended, restated, replaced or otherwise modified from time to time, this “Agreement”) is made and entered into effective as of November 16, 2020, by and between NUVERRA ENVIRONMENTAL SOLUTIONS, INC., a Delaware corporation (“Borrower”), and FIRST INTERNATIONAL BANK & TRUST, a North Dakota banking corporation (together with its successors and assigns, “Lender”).
RECITALS
A.    Borrower has requested that Lender extend to Borrower: (i) a real estate term loan (the “CRE Loan”) in the original principal amount of Ten Million and 00/100 Dollars ($10,000,000.00); (ii) an equipment term loan (the “Equipment Loan”) anticipated to be in the original principal amount of Thirteen Million and 00/100 Dollars ($13,000,000.00); (iii) an operating line of credit (the “Operating LOC Loan”) in the original principal amount of Five Million and 00/100 Dollars ($5,000,000.00); and (iv) a letter of credit loan (the “Letter of Credit Loan”) in the original principal amount of Four Million Eight Hundred Thirty-Nine Thousand and 00/100 Dollars ($4,839,000.00) (the CRE Loan, the Equipment Loan, the Operating LOC Loan and the Letter of Credit Loan, collectively may be referred to as the “Loan”), which the Loan shall be secured by the Collateral (as later defined) and the Guaranty (as later defined).
B.    Lender is willing and prepared to extend the Loan to Borrower, upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.GENERAL. The Recitals set forth above are incorporated into this Agreement and binding upon Borrower. Subject to and upon the terms, covenants and conditions hereinafter set forth, Lender hereby agrees to make the Loan to Borrower.
2.PROMISSORY NOTES/LOAN. The obligation of Borrower to repay the Loan shall be evidenced by:
A.CRE LOAN.
(1)CRE Note. The CRE Loan is evidenced by that certain Promissory Note (Real Estate) executed by Borrower in the original principal amount of Ten Million and 00/100 Dollars ($10,000,000.00) (the “CRE Note”).
(2)Loan to Value. So long as there exists no Event of Default hereunder and no event has occurred which would be an Event of Default with the



giving of notice or lapse of time or both, and subject to all other terms and conditions hereof, as to the CRE Loan, Lender shall lend to Borrower, and Borrower may borrow from Lender, the lesser of 70% of the collective appraised value of the Property (as later defined) or the amount of $10,000,000.00. Borrower and Lender acknowledge and agree that the CRE Loan will be a single advance and that any payments by Borrower applied to the principal balance of the Loan may not be re-drawn by Borrower.
(3)Escrow. Lender shall require Borrower to pay to Lender, in addition to any monthly principal and interest installments due pursuant to the CRE Note, an amount equal to one-twelfth of the yearly real estate taxes and assessments levied against the Property and insurance costs pertaining to the Property, less any amounts paid in connection with any premium finance arrangement that are applied to reduce such costs and excluding the same pertaining to the Supplemental Property (the “Escrow Items”) as estimated from time to time by Lender in its reasonable discretion, to be applied by Lender to pay said Escrow Items (such collected amounts being hereafter referred to as the “Escrow Funds”). Lender shall apply the Escrow Funds to pay said Escrow Items on or before the dates the same are due, so long as the amount of Escrow Funds held by Lender is sufficient at that time to make such Escrow Items payments. No earnings or interest shall be payable to Borrower on the Escrow Funds. Such Escrow Funds shall not be, nor be deemed to be, trust funds, and Lender shall have the right to hold the Escrow Funds in any manner Lender elects and may commingle the Escrow Funds with other moneys held by Lender. If the amount of the Escrow Funds held by Lender shall exceed at any time the amount deemed necessary by Lender to provide for the payment of the Escrow Items, such excess shall, at the option of Lender, either be repaid to Borrower or be credited to Borrower on the next monthly installment of Escrow Funds due. If at any time the amount of the Escrow Funds held by Lender shall be less than the amount deemed necessary by Lender to pay the Escrow Items as they fall due, Borrower shall promptly pay to Lender any amount necessary to make up the deficiency upon written notice from Lender to Borrower requesting payment thereof.
(4)Reserve Account. Lender shall require Borrower to: (i) deposit on the date of this Agreement and maintain such minimum amount at all times while the Loan is outstanding, a sum equal to $2,500,000.00, to be deposited in to a reserve account to be held by Lender (“Reserve Account”); and (ii) pay to Lender each and every month, in addition to any monthly principal and interest installments due pursuant to the CRE Note, a sum equal to $100,000.00, to be deposited in to the Reserve Account. Borrower shall have no access to the Reserve Account, without

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Lender’s prior written consent, and the Reserve Account is hereby pledged as additional security for the CRE Loan, Operating LOC Loan and Letter of Credit Loan, which Lender shall have the right to off-set upon the occurrence and during the continuance of an Event of Default.
(5)Additional Collateral. In addition to the Property subject to the Mortgages described in Section 3.B(2) below, within sixty (60) days after the date of this Agreement, Borrower shall cause the following real properties to be added, by modification or amendment in form and substance reasonably satisfactory to Lender (the “Modification”), to each of the respective Mortgages: 3856 Cambrian Lane, Sidney, MT 59270, and 6565 Highway 40 South, Tioga, ND 58852 (collectively, the “Supplemental Property”). Borrower shall provide to Lender, at Borrower’s sole cost and expense, due diligence information pertaining to each Supplemental Property Lender shall request, including, but not limited to a commitment for issuance of an ALTA-2016 loan policies of title insurance issued by the Title Company. Once the Modification to add the Supplemental Property to the respective Mortgages is complete, the Supplemental Property will be included in the definition of “Property” and serve as additional “Collateral” for the Loan.
B.EQUIPMENT LOAN/MSPLF
(1)Equipment Note. The Equipment Loan is evidenced by that certain Promissory Note (Equipment Loan) of even date herewith executed by Borrower anticipated to be in the original principal amount of Thirteen Million and 00/100 Dollars ($13,000,000.00) (the “Equipment Note”). The Equipment Note will be subject to the requirements set forth in Section 2.B(3) below.
(2)Defined Terms. As used in this Agreement, the terms “Equipment” and “Motor Vehicles” shall have the same meaning as given to them in the Security Agreement.
(3)Main Street Priority Loan Facility. The Equipment Note is subject to the Main Street Priority Loan Facility (the “MSPLF”) and is subject to the requirements and limitations as provided for under the Main Street Lending Program (the “MSLP”), which has been authorized under Section 13(3) of the Federal Reserve Act, as amended, as contemplated by the Coronavirus Aid, Relief, and Economic Security Act, and applicable rules and regulations thereof, as in effect from time to time (the “CARES Act”). Subject to all other terms and conditions hereof, including the conditions precedent to closing under Section 3 of this Agreement, the Equipment Loan shall be made within three business days of the commitment date (the “Commitment Date”) specified in the Commitment Letter (as later defined). Borrower and Lender acknowledge

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and agree that the Equipment Loan will be a single advance and that any payments by Borrower applied to the principal balance of the Loan may not be re-drawn by Borrower.
(4)Appraisals. At any time while the Equipment Loan is outstanding, Lender may obtain a third-party appraisal of the Equipment and Motor Vehicles. So long has no Event of Default has occurred and is continuing, Borrower shall be responsible to reimburse Lender for the cost of no more than one (1) such third-party appraisal in any calendar year.
C.OPERATING LOC LOAN.
(1)Operating LOC Note. The Operating LOC Loan is evidenced by that certain Revolving Promissory Note (Operating Line of Credit Loan) executed by Borrower in the original principal amount of Five Million and 00/100 Dollars ($5,000,000.00) (the “Operating LOC Note”).
(2)Defined Terms. As used in this Agreement, the term “General Intangibles” shall have the same meaning as given to them in the Security Agreement.
D.LETTER OF CREDIT.
(1)Letter of Credit. The Letter of Credit Loan is evidenced by that certain Promissory Note (Letter of Credit Loan) executed by Borrower in the original principal amount of up to Four Million Eight Hundred Thirty-Nine and 00/100 Dollars ($4,839,000.00) (the “Letter of Credit Note”).
As they may be amended, restated, replaced or otherwise modified from time to time, the CRE Note, Equipment Note, Operating LOC Note and Letter of Credit Note, may be referred to collectively as the “Note”. Reference is hereby made to the Note for the terms thereof relating to maturity, repayment schedule, interest rate and other matters governing the repayment of the Loan.
3.CONDITIONS OF CLOSING. Lender shall not be required to advance the Loan until the pre-closing requirements, conditions and other requirements set forth below have been completed and fulfilled to the reasonable satisfaction of Lender, at Borrower’s sole cost and expense. Lender may, however, in its discretion, make advances prior to completion and fulfillment of any or all of such pre-closing requirements, conditions and requirements, without waiving its right to require such completion and fulfillment before any additional advances are made.
A.Pre-Closing Requirements. Prior to the closing of the Loan, Borrower shall provide or cause to be provided to Lender each of the following, all in form and substance reasonably acceptable to Lender in the exercise of its sole discretion:

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(1)A commitment for issuance of an ALTA-2016 loan policies of title insurance issued by First American Title Insurance Company (“Title Company”), marked up by Title Company to the satisfaction of Lender, together with true and complete copies of all documents affecting title to the Property and such pro forma endorsements to the title policy as shall be deemed necessary or appropriate by Lender.
(2)Insurance policies or certificates evidencing insurance coverages written by insurers reasonably satisfactory to Lender and in amounts satisfactory to Lender, prepared in accordance with Lender’s requirements therefor as set forth in the Mortgage (as defined below) and as otherwise required by Lender.
(3)Appraisals of the Property, addressed to Lender prepared in conformance with Lender’s appraisal policy, Title XI of the Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended from time to time, and prevailing standards of appraisal practice, and signed by an appraiser acceptable to Lender.
(4)Complete and current UCC and state and federal tax lien searches on Borrower and each Guarantor in such offices and in such jurisdictions as Lender may reasonably require.
(5)Certified copies of Borrower’s and each Guarantor’s organizational documents.
(6)Borrower’s and its subsidiaries’ most current available consolidated financial statements; consolidated financial statements for the most recent full fiscal year immediately preceding the period covered by said current financial statements, and copies of federal income tax returns (with all supporting schedules) for Borrower’s most recent fiscal year, all of the foregoing financials and tax returns signed and certified as true, correct and complete by an officer of Borrower. Borrower’s and its subsidiaries’ most recent consolidated balance sheet, year-to-date profit & loss, aging accounts receivables and aging accounts payables statement, 2021 projections and 2020 capital expenditure budget.
(7)Evidence acceptable to Lender that the Property is not in a flood zone.
(8)Complete environmental reports (Phase I and Phase II, as applicable) and property condition assessments for the Property, to the satisfaction of Lender.
(9)Valuation of the Equipment and Motor Vehicles and acceptable to Lender.

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(10)Original titles of all Motor Vehicles subject to the Motor Vehicle Contract (defined below).
(11)Evidence satisfactory to Lender that Borrower has qualified for the MSPLF and satisfied all documentation, certifications, requirements and covenants relevant under the MSLP, including, without limitation, that certain Commitment Letter under the Main Street Lending Program (the “Commitment Letter”) delivered to Lender by MS Facilities LLC, a special purpose vehicle of the Federal Reserve Bank of Boston (“MSLP SPV”), pursuant to which MSLP SPV shall commit to purchase a participation interest in Twelve Million Three Hundred Fifty Thousand and 00/100 Dollars ($12,350,000.00), or ninety-five percent (95%), of the aggregate principal amount of the Equipment Loan.
(12)An ALTA/ACSM land title survey of the Property accompanied by an affidavit of even date herewith affirming that no changes to the Property have occurred since the date of said survey.
(13)Evidence that Borrower has entered into a contract with CSC Global, or affiliate thereof, pertaining to the Motor Vehicles (“Motor Vehicle Contract”).
(14)Other agreements, documents and exhibits which may be reasonably required in Lender’s reasonable judgment to assure compliance with the requirements of this Agreement.
B.Loan Documents. As a condition precedent to Lender’s obligation to make the Loan, the following documents will be executed and delivered to Lender, each of which must be in form and substance reasonably satisfactory to Lender:
(1)The Note from Borrower described in Section 2 above. All of the provisions of each Note are incorporated herein by this reference.
(2)The Mortgage (the “Louisiana Mortgage”) creating a lien and security interest in the real property commonly known as 525 Parks Drive, Frierson, LA 71017 (collectively, the “Louisiana Property”) in favor of Lender and securing the Note; the Mortgage (the “North Dakota Mortgage”) creating a lien and security interest in the real property commonly known as 13195 26th Street NW, Arnegard, ND 58835, 3711 4th Avenue NE, Watford City, ND 58854, 305 17th Avenue SW, Minot, ND 58701, 11108 32nd Street SW, Dickinson, ND 58601, 7737 Highway 2, Stanley, ND 58784, 69 4th Street NE, Beach, ND 58621, 1001 Highway 16, Beach, ND 58621, and raw land in Williston, ND 58801 (collectively, the “North Dakota Property”) in favor of Lender and securing the Note; the Mortgage (the “Ohio Mortgage”) creating a lien and security interest in the real property commonly known as 64036

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Wintergreen Road, Lore City, OH 43755, 3549 Warner Road, Fowler, OH 44418, 10555 Veto Road, Belpre, OH 45714, and 64000 Endley Road, Cambridge, OH 43725 (collectively, the “Ohio Property”) in favor of Lender and securing the Note; the Deed of Trust (collectively, the “Texas Mortgage”) creating a lien and security interest in the real property commonly known as 1607 NE Loop 59, Carthage, TX 75633 and 7135 FM 31 South, Carthage, TX 75633 (collectively, the “Texas Property”) in favor of Lender and securing the Note; and the Mortgage (the “West Virginia Mortgage”) creating a lien and security interest in the real property commonly known as 11942 Veterans Memorial Highway, Reedsville, WV 26547 (collectively, the “West Virginia Property”) in favor of Lender and securing the Note; (the Louisiana Mortgage, North Dakota Mortgage, Ohio Mortgage, Texas Mortgage and West Virginia Mortgage may be collectively referred to as the “Mortgage”; the Louisiana Property, North Dakota Property, Ohio Property, Texas Property and West Virginia Property may be collectively referred to as the “Property”).
(3)Separate Assignment of Leases and Rents for each Property (collectively, the “Assignment of Leases and Rents”).
(4)The Guaranty (the “Guaranty”) from Badlands Power Fuels, LLC, a Delaware limited liability company, Badlands Power Fuels, LLC, a North Dakota limited liability company, Landtech Enterprises, L.L.C., a North Dakota limited liability company, Ideal Oilfield Disposal, LLC, a North Dakota limited liability company, Heckmann Water Resources Corporation, a Texas corporation, Heckmann Water Resources (CVR), Inc., a Texas corporation, 1960 Well Services, LLC, an Ohio limited liability company, Nuverra Ohio Disposal LLC, a Delaware limited liability company, Clearwater Three, LLC, an Ohio limited liability company, Clearwater Five, LLC, an Ohio limited liability company, Clearwater Solutions, LLC, an Ohio limited liability company, and Nuverra Total Solutions, LLC, a Delaware limited liability company (each separately and collectively the “Guarantor” or “Guarantors”, as it applies), jointly and severally guaranteeing the payment of all indebtedness and performance of all obligations under the Loan Documents.
(5)The Indemnity Agreement given by Borrower and Guarantor in favor of Lender (“Indemnity”).
(6)The Assignment of Salt Water Disposal Leases given by Borrower in favor of Lender (“Assignment of SWD Leases”), as well as assignment of any other material leases Borrower or any Guarantor may be party to.

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(7)The Security Agreement given by Borrower and Guarantor pledging all personal property pertaining to the Property, the Equipment, the Motor Vehicles, the General Intangibles and all assets, accounts receivable and inventory to Lender (collectively the “Security Agreement”).
(8)UCC-1 Financing Statements to perfect the pledge by Borrower and Guarantors contained in the Security Agreement (collectively, the “UCCs”).
(9)Certificate of Incumbency of Borrower and each Guarantor, with authorizing resolutions, all organizational documents and certificates of good standing attached.
(10)Opinion of Borrower and Guarantors’ counsel.
(11)The Main Street Priority Loan Facility Borrower Certifications and Covenants duly executed by principal executive officer and principal financial officer of Borrower (the “MSPLF Borrower Certifications and Covenants”).
(12)The Assignment and Assumption for the Main Street Lending Program duly executed by an authorized officer of Borrower (the “MSPLF Assignment-in-Blank”).
(13)The Co-Lender Agreement under the Main Street Lending Program Transaction Specific Terms duly executed by an authorized officer of Borrower (the “MSPLF Co-Lender Agreement”)
This Agreement, the Note, the Mortgage, the Assignment of Leases and Rents, the Guaranty, the Indemnity, the Assignment of SWD Leases, the Security Agreement, the MSPLF Borrower Certifications and Covenants, the MSPLF Assignment-in-Blank, the MSPLF Co-Lender Agreement, UCCs and every other document or instrument, whether now or hereafter existing, which are executed or delivered in connection with the Loan, as any of such documents may be amended, restated, replaced or otherwise modified from time to time, are sometimes hereinafter collectively referred to as the “Loan Documents”. Lender may designate which of the Loan Documents are to be placed of record and/or filed, the order of recording and/or filing thereof, and the offices in which the same are to be recorded and/or filed. Borrower shall pay all documentary, recording, filing and/or registration taxes and/or fees, if any, due upon the Loan Documents.
The Mortgage, Assignment of Leases and Rents, Assignment of SWD Leases, Security Agreement, UCCs, which are executed or delivered in connection with the Loan, as any of such documents may be amended, restated, replaced or otherwise modified from time to time, are sometimes hereinafter collectively referred to as the “Collateral”. The Collateral shall serve to secure each Loan.

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Notwithstanding anything to the contrary contained in this Agreement or any Loan Document, for purposes of clarification,: (i) the Mortgage and Assignment of Leases and Rents serve as collateral only for the CRE Loan, Operating LOC Loan and Letter of Credit Loan; and (ii) the portion of the Collateral comprised of Equipment, Motor Vehicles and any proceeds of the foregoing shall serve as collateral for the Operating LOC Loan, Letter of Credit Loan, and Equipment Loan; provided, however, the Equipment Loan shall hold a first and senior position as to the Equipment, Motor Vehicles and any proceeds of the foregoing over the CRE Loan, Operating LOC Loan and Letter of Credit Loan. The Collateral securing Borrower’s obligations under the Equipment Loan is limited to only Equipment, Motor Vehicles, and any proceeds of the foregoing.
4.REPRESENTATIONS. In order to induce Lender to enter into this Agreement and make the Loan, Borrower hereby represents and warrants to Lender as of the date of this Agreement:
A.Organizational Existence and Power. Borrower is (i) a corporation duly organized and validly existing in the State of Delaware in good standing in the State of Delaware; (ii) is qualified to do business in any state where (y) the failure to be so qualified could reasonably be expected to result in a material adverse effect on its condition (financial or otherwise), business, properties or assets or (z) if required by applicable law, in the state where it owns real property; and (iii) has all requisite power and authority to carry on business as now conducted and as presently proposed to be conducted. Each Guarantor is (i) duly organized and validly existing and in good standing in their respective jurisdiction of organization; (ii) is qualified to do business in any state where (y) the failure to be so qualified could reasonably be expected to result in a material adverse effect on its condition (financial or otherwise), business, properties or assets or (z) if required by applicable law, in the state where it owns real property; and (iii) has all requisite power and authority to carry on their business as now conducted and as presently proposed to be conducted.
B.Enforceability. Each of the Loan Documents constitutes the legal, valid and binding obligations of Borrower, and as applicable, each Guarantor, enforceable 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.
C.Financial Condition. The financial statements of Borrower and each Guarantor heretofore furnished to Lender are complete and correct in all material respects and fairly represent the financial condition of Borrower and each Guarantor at the dates of such statements, and have been prepared in accordance with generally accepted accounting principles, consistently applied.
D.Litigation. There is no action, suit or proceeding pending or threatened against or affecting Borrower or any Guarantor which, if adversely determined, would

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have a material adverse effect on the condition (financial or otherwise), business, properties or assets of Borrower and Guarantors taken as a whole.
E.Taxes. Borrower and each Guarantor have filed all tax returns required to be filed and either paid all taxes shown thereon to be due, including interest and penalties, which are not being contested in good faith and by appropriate proceedings, or provided adequate reserves for payment thereof, if any, as shall be required in conformity with GAAP.
F.Compliance with Laws. There are no violations of any laws, ordinances, regulations or requirements with respect to Borrower’s business operations that, individually or in the aggregate, could reasonably be expected to result in a material adverse effect on the condition (financial or otherwise), business, properties or assets of Borrower and Guarantors taken as a whole.
G.No Defaults. There is no (i) Event of Default (as defined below) on the part of Borrower or any Guarantor under any of the Loan Documents or (ii) default (subject to any applicable grace or cure period) under any other document to which Borrower or any Guarantor is a party and which relates to the ownership, occupancy, use, development or management of the Property that, individually or in the aggregate, could reasonably be expected to result in a material adverse effect on the condition (financial or otherwise), business, properties or assets of Borrower and Guarantors taken as a whole.
H.Anti-Terrorism Laws. Neither Borrower, nor any Guarantor is in violation of any laws related to terrorism or money laundering (the “Anti-Terrorism Laws”), including Executive Order No. 13,224 on Terrorist Financing of September 23, 2001 (the “Executive Order”) and The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (the “USA Patriot Act”). Neither Borrower nor any Guarantor is a person or entity with which Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law. Neither Borrower nor any Guarantor is a person or entity named as a “specially designated national” or “blocked person” on the most current list published by the United States Treasury Department Office of Foreign Asset Control (the “OFAC”), at its official website or any replacement website or other replacement official publication of such list (the “OFAC List”). Neither Borrower nor any Guarantor deals in or otherwise engages in any transaction related to any property or interests in property blocked pursuant to the Executive Order or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in the Anti-Terrorism Laws.
I.MSPLF Certifications. Borrower’s certifications under the MSPLF Borrower Certifications and Covenants incorporated herein by reference are true, correct and complete in all respects.

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J.Immaterial Subsidiaries. As of the date hereof, each of the following entities qualify as an Immaterial Subsidiary (as hereinafter defined): (i) NES Water Solutions, LLC, a Delaware limited liability company (“NES”), (ii) HEK Water Solutions, LLC, a Delaware limited liability company (“HEK”), (iii) Heckmann Woods Cross, LLC, a Utah limited liability company (“Heckmann Woods”), (iv) Badlands Leasing, LLC, a North Dakota limited liability company (“Badlands Leasing (ND)”), (v) China Water and Drinks, Inc., a Delaware corporation (“China Water”), and (vi) Nuverra Rocky Mountain Pipeline, LLC, a Delaware limited liability company (“Nuverra Rocky Mountain”). “Immaterial Subsidiaries” means any subsidiary of Borrower which does not (a) own any assets (other than assets of a de minimis nature), (b) have any liabilities (other than liabilities of a de minimis nature), or (c) engage in any business activity, and “Immaterial Subsidiary” means any one of them.
5.COVENANTS OF BORROWER: On and after the date hereof, for the term of the Loan and until the payment in full of all of Borrower’s obligations under the Loan Documents, and the performance of all other obligations of Borrower and each Guarantor under the Loan Documents (other than contingent indemnification obligations that survive the termination of this Agreement), Borrower agrees to comply with each of the covenants set forth in this Section 5.
A.Loan Fees. Borrower agrees, in consideration of the execution of this Agreement by Lender, to pay to Lender upon execution of this Agreement (except with respect to the fee described in clause (8) below) the following non-refundable fees:
i.Underwriting fee in the amount of $5,000.00 (which has already been received by Lender);
ii.Commitment fee in the amount of $50,000.00 (which has already been received by Lender);
iii.Commitment fee in the amount of $100,000.00 (which has already been received by Lender);
iv.CRE Loan origination fee in the amount of $150,000.00;
v.Equipment Loan origination fee in the amount of $130,000.00;
vi.$130,000.00 origination fee payable to the MSLP SPV;
vii.Operating LOC Loan origination fee in the amount of $50,000.00; and
viii.For each Letter of Credit, an annual fee accruing at a rate per annum of 3.0% multiplied by the maximum undrawn face amount of such Letter of Credit.

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B.Expenses. Borrower shall pay all reasonable and documented costs of closing the Loan and all reasonable and documented expenses of Lender with respect thereto, including, but not limited to, legal fees, appraisal fees, survey fees, title costs, recording fees, environmental costs, expenses of foreclosure (including reasonable and documented attorneys’ fees) and similar items.
C.Books, Records and Inspections. Borrower shall maintain complete and accurate books and records of its businesses and shall permit to Lender or its agents access to Borrower’s books and records for inspection purposes at any reasonable time upon reasonable written notice to Borrower. Borrower shall pay all inspection and valuation costs incurred by Lender while the Loan is outstanding; provided, however, that so long as no Event of Default has occurred and is continuing, Borrower shall not be required to reimburse Lender for inspection and valuation costs more than one (1) time in any calendar year.
D.Notification to Lender. Borrower shall promptly advise Lender in writing of: (i) all litigation pending with asserted liabilities in excess of, or that could reasonably be expected to result in liabilities in excess of, $250,000.00 or more affecting Borrower or any Guarantor or the Collateral; (ii) all complaints or charges made by any governmental authority in writing affecting Borrower or its businesses which may impair the Collateral of Lender in any material respect; (iii) any adverse change in the financial condition of Borrower or any Guarantor which has or is likely to have a material adverse effect (financial or otherwise) on the business, properties or assets of Borrower and Guarantors taken as a whole; and (iv) the occurrence of any Event of Default under this Agreement or any event of which Borrower has knowledge and which, with the passage of time or giving of notice or both, would constitute an Event of Default under this Agreement.
E.Financial Statements; Other Information. Borrower shall deliver to Lender each of the following, each in form and substance acceptable to Lender:
(1)as soon as available and in any event within forty-five (45) days after the end of each calendar quarter, internally prepared consolidated and consolidating financial statements of Borrower and each Guarantor in form and content reasonably acceptable to Lender;
(2)within thirty (30) days after the end of each calendar month or as otherwise reasonably requested by Lender for Borrower and each Guarantor: (i) aging accounts receivables, aging accounts payable and inventory reports; (ii) report in form and substance substantially similar to the form Borrower and each Guarantor previously provided to Lender, evidencing any change as a result of a sale regarding real property, personal property, plant and equipment; and (iii) Borrowing Base Certificate in form provided by Lender;

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(3)as soon as available and in any event within 30 days of filing each calendar year, copies of the filed federal income tax returns (including all schedules, attachments, and K-1 information, as applicable) for Borrower and for each Guarantor;
(4)within thirty (30) days after the end of each calendar year or as otherwise reasonably requested by Lender for Borrower and each Guarantor: (i) equipment, vehicle and fixed asset listings; (ii) capital expenditures list; and (iii) projections for the current fiscal year;
(5)promptly after Lender’s request from time to time such other information and reports concerning the Property, Collateral, Borrower, and/or any Guarantor as Lender may reasonably request, including annual verification of insurance coverage and of property tax and assessment payments;
(6)as soon as available, but in any event within sixty (60) days after the end of each fiscal quarter of Borrower, Borrower shall deliver to Lender financial reporting in a form and substance reasonably acceptable to Lender setting forth the financial information, and where applicable reasonably detailed calculations of the required data, set forth in Appendix C of the Federal Reserve of Boston’s Frequent Asked Questions attached hereto as Exhibit A, as at the end of such fiscal quarter of Borrower, which financial reporting and calculations, in each case, shall be true and accurate in all material respects and, where applicable, present fairly in all material respects the financial condition of Borrower for the period covered thereby in accordance with GAAP, consistently applied;
(7)Promptly after Lender’s request from time to time such other information respecting the condition (financial or otherwise), business and property of Borrower and/or any Guarantor as Lender may from time to time reasonably request; and
(8)within five (5) days after filing, if and when filed by Borrower, provided, however, that Borrower shall be deemed to have furnished the information required if it shall have timely filed such information for public availability with the Securities and Exchange Commission and/or on its internet home page, including any filings with the Securities and Exchange Commission on Form 10-K, Form 10-Q, Form 8-K or amendments thereto made by Borrower.
F.Taxes and Claims. Borrower shall pay and discharge, all taxes, assessments and governmental charges or levies imposed upon its income or profits, or upon any of its assets or properties, prior to the date on which penalties attach thereto, and all lawful claims which, if unpaid, might become a lien or charge upon the

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property or assets of Borrower, unless such taxes, assessments or governmental charges or levies are being contested in good faith and by appropriate proceedings, and for which adequate reserves for payment thereof have been established.
G.Liens. Borrower shall not create, incur, assume or suffer to exist any mortgage, deed of trust, pledge, lien, security interest, or other charge or encumbrance on the Property or Collateral, except (i) Permitted Liens or (ii) with the prior written consent of Lender. As used herein, “Permitted Liens” shall mean (i) liens for indebtedness otherwise permitted to be incurred under Clause P below; (ii) liens for unpaid taxes, assessments or other governmental charges to the extent permitted under Clause F above; (iii) judgment liens arising solely as a result of the existence of judgments, orders, or awards that do not constitute an Event of Default hereunder; (iv) the interests of lessors under operating leases and non-exclusive licensors; (v) liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not in connection with the borrowing of money and are being contested in good faith and by appropriate proceedings, and for which adequate reserves for payment thereof have been established or bonded over; (vi) liens on amounts deposited to secure Borrower’s and its subsidiaries obligations in connection with worker’s compensation or other unemployment insurance; (vii) liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums, and (viii) with respect to the Property, easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof or impair the Collateral.
H.Maintaining Insurance Coverage. Borrower and each Guarantor shall, at all times until Lender has been fully repaid all indebtedness evidenced by the Note, maintain, or cause to be maintained, in effect (and shall furnish to Lender copies of), insurance policies as required under the terms of the Mortgage, the Loan Documents, and as otherwise reasonably required by Lender from time to time, and shall furnish to Lender upon demand proof of payment of all premiums for such insurance.
I.Change in Ownership. Except as permitted under this Agreement, including clause (K) below, each Guarantor shall not voluntarily or involuntarily agree to, cause, suffer or permit any sale, transfer or conveyance of any interest of any Guarantor, legal or equitable, except with the prior written consent of Lender.
J.Transfer of Property. Borrower and each Guarantor shall not voluntarily or involuntarily agree to, cause, suffer or permit any sale, transfer or conveyance of any the Property, the Collateral, or any part or portion thereof, except (i) Permitted Dispositions or (ii) with the prior written consent of Lender. As used herein “Permitted Dispositions” shall mean (A) sales, abandonment, or other

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dispositions of equipment that is substantially worn, damaged, or obsolete or no longer used or useful in the ordinary course of business and dispositions (including leases or subleases) of real property not useful in the conduct of the business of Borrower and its subsidiaries, (B) sales of inventory to buyers in the ordinary course of business, (C) the use or transfer of money or cash equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents, (D) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business, (E) the granting of Permitted Liens, (F) the sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof, (G) any involuntary loss, damage or destruction of property, (H) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property, (I) the leasing or subleasing of assets of Borrower or its subsidiaries in the ordinary course of business, and (J) sales or dispositions of fixed assets not otherwise permitted above so long as (1) no Default or Event of Default then exists or would arise therefrom, (2) made at fair market value, and (3) the aggregate fair market value of all assets disposed of (including the proposed disposition) would not exceed $50,000.00 per year.
K.Existence and Identity; Merger. Borrower and each Guarantor shall preserve and maintain its present existence as a corporation or limited liability company, as it applies, under the laws of its existence, and all of their rights, privileges and franchises, and continue business as presently conducted. Borrower and each Guarantor shall not change the legal format under which each were organized without the prior written consent of Lender, nor shall Borrower or any Guarantor cease to do business or engage in any line of business materially different from that presently engaged in. Borrower and any Guarantor shall not merge into or consolidate with any other entity; and Borrower and/or any Guarantor shall not acquire all or substantially all of the assets of any other entity, except for Permitted Acquisitions. As used herein, “Permitted Acquisitions” shall mean any acquisition so long as (i) no Default or Event of Default shall have occurred and be continuing or would result from the consummation of the proposed acquisition and the proposed acquisition is consensual, (ii) no indebtedness will be incurred, assumed, or would exist with respect to Borrower or its subsidiaries as a result of such acquisition, other than Indebtedness permitted the definition of Permitted Indebtedness and no Liens will be incurred, assumed, or would exist with respect to the assets of Borrower or its subsidiaries as a result of such acquisition other than Permitted Liens, and (iii) Borrower has provided Lender with written confirmation, supported by reasonably detailed calculations, that on a pro forma basis (including pro forma adjustments arising out of events which are directly attributable to such proposed acquisition) Borrower would be in compliance with the DSCR Ratio set forth in Section 5.N.

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L.Business Purpose; Use of Loan Proceeds. The transactions contemplated by the Loan Documents are solely for business purposes. Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Loan hereunder will be used to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock.
M.Prepayment Premium. Any prepayment penalties applicable to the Loan shall be as stated in each Note.
N.Debt Service Coverage Ratio. Borrower shall maintain a minimum debt service coverage ratio (“DSCR Ratio”) of 1.35 to 1.00 as measured by Lender each calendar year end, beginning with the calendar year ending December 31, 2021. Debt service coverage is defined for purposes herein as Borrower’s consolidated adjusted earnings before the deduction of interest, taxes, depreciation and amortization expenses, as adjusted in a manner materially consistent with Borrower’s current and historical adjustment methodology (Adjusted EBITDA), divided by the annual debt service (defined as cash principal and interest payments plus cash payments on finance leases during the applicable period) obligations (less subordinated debt annual debt service), calculated based on the actual four preceding quarters. If the minimum DSCR Ratio is not maintained at any time during the term of this Agreement, Lender reserves the right to increase the interest rate as identified in the CRE Note, Operating LOC Note and Letter of Credit by 1.50% until the minimum DSCR Ratio is maintained.
Notwithstanding the foregoing, in the event that Borrower fails to comply with the DSCR Ratio set forth in this Section 5.N., until the fifteenth day after delivery of the related financial statements, Borrower shall have the right to issue equity interests for cash or otherwise receive cash contributions to the capital of Borrower, and, in each case, to contribute any such cash to the capital of Borrower, and the amount of such contribution shall be deemed to increase Adjusted EBITDA with respect to the calendar year most recently ended (the “Cure Right”); provided that (a) such proceeds are actually received by Borrower no later than fifteen days after the date on which financial statements are required to be delivered with respect to such calendar year hereunder, and (b) such proceeds do not exceed the aggregate amount necessary to cure (by increasing Adjusted EBITDA) such Event of Default under this Section 5.N. for such period. If, after giving effect to the foregoing pro forma adjustment, Borrower is in compliance with the DSCR Ratio set forth in this Section 5.N., Borrower shall be deemed to have satisfied the requirements of this Section 5.N. as of the relevant date of determination with the same effect as though there had been no failure to comply on such date, and the applicable breach or default of

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this Section 5.N. that had occurred shall be deemed cured for purposes of this Agreement.
O.Operating Accounts and Other Deposit Accounts. All operating accounts and deposit accounts of Borrower and each Guarantor shall be opened and maintained with Lender at Borrower’s cost and expense within ninety (90) days after the date hereof; provided that Borrower and Guarantors may maintain deposit accounts with other financial institutions so long as the aggregate balances in such accounts does not exceed $150,000.00 at any time.
P.Other Loans. Borrower and each Guarantor will only borrower funds from Lender, unless otherwise permitted herein; provided, however, this clause shall not apply to Permitted Indebtedness. As used herein, “Permitted Indebtedness” shall mean (i) indebtedness (including capitalized lease obligations) incurred after the date hereof and at the time of, or within 20 days after, the acquisition of any fixed assets for the purpose of financing all or any part of the acquisition cost thereof, in an aggregate principal amount outstanding at any one time not in excess of $100,000.00; (ii) indebtedness arising from an endorsement of an instrument or other payment item for deposit; (iii) indebtedness owed to any person providing property, casualty, liability, or other insurance to Borrower or any of its subsidiaries, so long as the amount of such indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the year in which such indebtedness is incurred and such indebtedness is outstanding only during such year; (iv) indebtedness incurred in the ordinary course of business in respect of credit cards, credit card processing services, debit cards, stored value cards, commercial cards (including so-called “commercial cards”, “procurement cards” or “p-cards”), or cash management services, in an aggregate amount not to exceed $250,000.00; (v) indebtedness incurred in the ordinary course of business under performance, surety, statutory, or appeal bonds; (vi) indebtedness under hedge agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with Borrower’s and its subsidiaries’ operations and not for speculative purposes; (vii) indebtedness in an aggregate principal amount not to exceed $250,000.00 in respect of the certain letters of credit existing on the date hereof, so long as such existing letters of credit are cancelled and returned to the issuer thereof within ninety (90) days from the date hereof; or (viii) indebtedness of Borrower owing to former employees, officers, or directors (or any spouses, ex-spouses, or estates of any of the foregoing) incurred in connection with the repurchase by Borrower of the equity interests of Borrower that have been issued to such persons, so long as (a) no Event of Default has occurred and is continuing or would result from the incurrence of such indebtedness, (b) the aggregate amount of all such indebtedness outstanding at any one time does not exceed $500,000, and (c) such Indebtedness is unsecured and subordinated to the obligations under the Loan Documents on terms and conditions reasonably acceptable to Lender.

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Q.Capital Expenditures. Borrower shall not have capital expenditures in any calendar year in excess of $7,500,000.00, and any capital expenditures above such amount shall require Lender’s prior approval, such approval to be given or withheld in its reasonable discretion.
R.Working Capital. Borrower and its subsidiaries on a consolidated basis shall maintain a $7,000,000.00 positive working capital position.
S.Distributions. Borrower and each Guarantor shall be prohibited from issuing dividends or making distributions, without Lender’s prior approval, such approval to be given or withheld in its sole discretion; provided that, that any Guarantor may issue dividends or make distributions to Borrower or any other Guarantor.
T.Motor Vehicle Contract. Borrower shall not default in the payment or performance of its obligations under the Motor Vehicle Contract in any material respect.
U.Immaterial Subsidiaries. To the extent that any of NEK, HEK, Heckmann Woods, Badlands Leasing (ND), China Water or Nuverra Rocky Mountain cease to be an Immaterial Subsidiary, Borrower shall promptly cause such subsidiary to become a “Guarantor” hereunder and take all actions incidental thereto that Lender may reasonably require.
6.EVENTS OF DEFAULT; REMEDIES. Any one or more of the following events shall constitute an “Event of Default” hereunder:
A.Borrower shall default in the payment of principal or interest due according to the terms hereof or of any Note, and such default shall continue for ten (10) days beyond the date on which such payment is due, except with respect to the final payment of principal and interest, for which there shall be no grace period.
B.Borrower shall default in the payment of fees or other amounts due and payable under this Agreement (other than those addressed in Section 6(A) hereof), under the Note or under any of the other Loan Documents, and such default continues for ten (10) days after the date of written notice thereof from Lender to Borrower.
C.Borrower or any Guarantor shall default in the due performance or observance of any covenant or obligation set forth in Sections 5(E), (G), (I), (J), (K), (N), (P), (Q), (R) or (S) of this Agreement.
D.Borrower or any Guarantor shall fail to observe or perform any of the covenants, conditions or agreements to be observed or performed by it under this Agreement or any of the other Loan Documents (other than those defaults covered by other subsections of this Section 6) for a period of thirty (30) days after written notice specifying such default and requesting that it be remedied, given to such party by Lender.

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E.Borrower or any Guarantor shall be in default in the performance of any covenant or obligation under any other document or instrument heretofore or hereafter executed and delivered to Lender by such party in connection with any other loan or credit transaction(s) (other than those defaults covered by other subsections of this Section 6), and such default is not cured within the period, if any, allowed by such documents for the cure thereof and will likely have a material adverse effect (financial or otherwise) on the business, properties or assets of Borrower and Guarantors taken as a whole.
F.Borrower or any Guarantor shall file a petition in bankruptcy or for reorganization or for an arrangement pursuant to any present or future state or federal bankruptcy act or under any similar federal or state law, or shall be adjudicated as bankrupt or insolvent, or shall make a general assignment for the benefit of their creditors, or shall be unable to pay their debts generally as they become due; or if a petition or answer proposing the adjudication of Borrower or any Guarantor as bankrupt or their reorganization under any present or future state or federal bankruptcy act or any similar federal or state law shall be filed in any court and such petition or answer shall not be discharged or denied within sixty (60) days after the filing thereof; or if a receiver, trustee or liquidator of Borrower or any Guarantor is appointed over all or substantially all of the assets of Borrower or any Guarantor, and such shall not be discharged within sixty (60) days of each appointment; or if Borrower or any Guarantor shall consent to or acquiesce in such appointment.
G.Borrower or any Guarantor shall be or become insolvent, meaning (i) Borrower or such Guarantor is engaged or about to engage in a business or transaction for which the remaining assets of Borrower or such Guarantor are unreasonably small in relation to the business or transaction or for which the property remaining with Borrower or such Guarantor is an unreasonably small capital, and (ii) Borrower or such Guarantor has incurred or intends to incur, or reasonably believes that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise), and (iii) Borrower or such Guarantor is not “solvent” or is “insolvent”, as applicable within the meaning given those terms and similar terms under applicable laws relating to fraudulent transfers and conveyances (provided, that this clause (iii) shall exclude any definition of “solvent” or “insolvent” which is defined as at fair valuations, the sum of Borrower’s or such Guarantor’s debts and liabilities (including contingent liabilities) is less than all of Borrower’s or such Guarantor’s assets).
H.Any representation or warranty made by Borrower or any Guarantor in this Agreement or any of the other Loan Documents shall prove to be untrue or misleading in any material respect, or any statement, certificate or report furnished hereunder or under any of the foregoing documents by or on behalf of any such party shall prove to be untrue or misleading in any material respect, in each case, as of the date of issuance or making or deemed making thereof.

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I.Borrower or any Guarantor shall fail to pay, withhold, collect or remit any tax or tax deficiency when assessed or due or notice of any state or federal tax lien shall be filed or issued, unless such taxes are being contested in good faith and by appropriate proceedings, or for which adequate reserves for payment thereof have been established.
J.Borrower or any Guarantor shall liquidate, wind up, dissolve, merge, terminate or suspend its business operations, or sell all or substantially all of their assets, unless otherwise permitted hereunder; except that any Guarantor may merge into Borrower or any other Guarantor, or may sell all or substantially all of their assets to Borrower or any other Guarantor.
K.There shall be any (i) material adverse change, as determined by Lender in its commercially reasonable discretion, in the condition, financial or otherwise, of Borrower and Guarantors taken as a whole or (ii) material impairment of the enforceability or priority of Lender’s liens with respect to the Collateral.
L.Any Guarantor takes any action to revoke or terminate any Guaranty or any liability or security in favor of Lender under any Guaranty.
M.Any material property of Borrower or any Guarantor shall be garnished, levied upon, or attached in any proceeding and such garnishment or attachment shall remain undischarged for a period of sixty (60) days during which execution has not been effectively stayed unless it is being contested in good faith and by appropriate proceedings, or for which adequate reserves for payment thereof have been established.
N.[Reserved]
O.Borrower fails to deliver the Modification to Lender adding the Supplemental Property to the Collateral, for a period of thirty (30) days after written notice is given to Borrower by Lender that the Borrower has failed to comply with Section 2.A (5).
P.Any Event of Default under the: (i) CRE Loan, Equipment Loan, Operating LOC Loan and/or Letter of Credit Loan; or (ii) any Loan Document, shall result in an Event of Default under all Loans and this Agreement.
Q.MSPLF Cross-Acceleration Provision. Borrower (i) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any indebtedness (other than the indebtedness under the Loan Documents) owing to Lender or any commonly controlled affiliate of Lender, in each case beyond the applicable grace period with respect thereto, if any; or (ii) fails to observe or perform any other agreement or condition relating to any such indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of

20




which failure to make a payment, default or other event described in cause (i) or (ii) is to cause such indebtedness to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such indebtedness to be made, prior to its stated maturity; provided that clause (ii) shall not apply to secured indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such indebtedness, if such sale or transfer is permitted hereunder and under the documents providing for such indebtedness and such indebtedness is repaid when required under the documents providing for such indebtedness; provided that, as used in this clause, the term “indebtedness” shall mean all debt for borrowed money and any obligations evidenced by a bond, debenture, note, loan agreement or other similar instrument, and any guarantee of any of the foregoing.
Upon the occurrence of an Event of Default, Lender shall be entitled, at the option of Lender, to exercise any or all of the following rights and remedies, consecutively or simultaneously, and in any order:
(1)Lender may, without notice, declare all or part of the principal balance of the Note plus accrued interest thereon to be immediately due and payable, whereupon the same shall become immediately due and payable by Borrower;
(2)[Reserved];
(3)Lender may take whatever action in law or in equity as may appear necessary or appropriate to collect any amounts then due and thereafter to become due under this Agreement and the other Loan Documents and to enforce performance and observance of any obligation, agreement, or covenant of Borrower thereunder;
(4)Lender may exercise all or any of the other rights available to Lender under any of the Loan Documents; and
(5)Lender may setoff any and all balances, credits, deposits (general or special, time or demand, provisional or final), accounts or monies of Borrower then or thereafter with Lender, or any obligations of Lender to Borrower, against the obligations of Borrower arising under this Agreement or any other Loan Document. Borrower hereby grants to Lender a security interest in all such balances, credits, deposits, accounts or monies.
7.NOTICES. Any notice or other communication to any party in connection herewith shall be deemed to have been given on the date the same is deposited in the United States mail, registered or certified, return receipt requested, postage prepaid, or deposited with Federal Express, Airborne or another reputable overnight carrier, addressed to the party to which

21




the notice is to be given at the address specified below, or at such other address as such party shall have specified to the other party hereto in writing and not less than ten (10) days prior to the effective date of the address change:
If to Lender:





With a copy to:

First International Bank & Trust
Attn: Drew Flaagan
100 N. Main St.
P.O. Box 607
Watford City, ND 58854

Ballard Spahr LLP
80 South Eighth Street, Suite 2000
Minneapolis, Minnesota 55402
Attn: James R. Walston, Esq.
If to Borrower:




With a copy to:
Nuverra Environmental Solutions, Inc.
Attn: Joseph Crabb
6720 N. Scottsdale Road, Suite 190
Scottsdale, AZ 85253

Squire Patton Boggs (US) LLP
127 Public Square, Suite 4900
Cleveland, OH 44114
Attn: Patrick J. Burke, Esq.
8.MISCELLANEOUS.
A.Waivers, Cumulative Rights and Remedies. No failure on the part of Lender to exercise, and no delay in exercising, any right or remedy hereunder, under any of the other Loan Documents or under applicable law shall operate as a waiver thereof; nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
B.Indemnification. Borrower hereby agrees to reimburse, indemnify and hold harmless Lender (including any participating lender and/or assignee of Lender), their directors, officers, employees, attorneys and agents (the “Indemnified Parties”), from and against any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever that may at any time be imposed on, asserted against or incurred by any of the Indemnified Parties, as a result of, or arising out of, or in any way related to or by reason of, this Agreement, the Note, the other Loan Documents, or any transaction from time to time contemplated hereby or thereby, or any transaction financed in whole or in part or directly or indirectly with the proceeds of the Loans; provided that such indemnity shall not, as to any

22




Indemnified Party, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of any Indemnified Party. Borrower’s obligations under this Section shall survive the payment of the Note and the foreclosure of the Mortgage.
C.Expenses. Borrower shall pay or cause to be paid and shall save Lender harmless against liability for the payment of all reasonable out-of-pocket costs, charges and expenses of Lender (including without limitation reasonable and documented fees and expenses of counsel to Lender) incurred by Lender from time to time arising from or relating to (a) the negotiation, preparation, execution, delivery, administration and performance of this Agreement, the Note, the other Loan Documents, and any related documentation; (b) any requested amendments, modifications, supplements, waivers or consents (whether or not ultimately entered into or granted) to any of the foregoing; and/or (c) the enforcement or preservation of Lender’s rights under any of the foregoing. Lender may advance to itself, when due, from the proceeds of the Loans, without further order or request from Borrower, all interest payable to Lender under the terms hereof or of the Note, and may, at Lender’s option, without any obligation to do so, advance to itself all other sums due or to become due to Lender under this Agreement or under any of the other Loan Documents, including but not limited to the above described fees, attorneys’ fees and all outofpocket expenses incurred by Lender in connection with this Agreement and with the Loans.
D.Amendments. The Loan Documents may not be amended or modified except by written instruments signed by Lender and Borrower.
E.Survival. All agreements, representations and warranties made in this Agreement shall survive the execution of this Agreement, the making of the Loan by Lender, and the execution of the other Loan Documents, and shall continue until Lender receives payment in full of all indebtedness of Borrower incurred under this Agreement and under the other Loan Documents.
F.Successors. This Agreement shall be binding upon and inure to the benefit of Borrower and Lender and their respective successors and assigns, including, but not limited to, MSLP SPV; provided, however, that Borrower may not transfer or assign its rights to borrow hereunder without the prior written consent of Lender, which consent may be withheld in Lender’s sole and absolute discretion.
G.No Third Party Reliance. No third party shall be entitled to rely upon this Agreement or to have any of the benefits of Lender’s interest hereunder, unless such third party is an express assignee of all or a portion of Lender’s interest hereunder.

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H.Participation. Borrower agrees and consents to Lender’s sale or transfer, whether now or later, of one or more participation interests in the Loans to one or more purchasers, whether related or unrelated to Lender, including, but not limited to, MSLP SPV under the MSLP. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have about Borrower and any Guarantor or about any other matter relating to the Loans, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of participation interests, as well as all notices of any repurchase of such participation interests. Borrower agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan and will have all the rights granted under the participation agreement or agreements governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser (subject to the terms of any applicable participation agreement) may enforce Borrower’s obligation under the Loan Documents irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests (subject to the terms of any applicable participation agreement) irrespective of any personal claims or defenses that Borrower may have against Lender.
I.Time of the Essence. Time is of the essence hereof with respect to all of the dates, terms and conditions of this Agreement.
J.Governing Law; Waiver of Jury Trial. This Agreement, the rights of the parties hereunder and the interpretation hereof shall be governed by, and construed in accordance with, the laws of the State of North Dakota, in all respects. Any disputes related to this Agreement or any of the other Loan Documents shall be resolved in North Dakota or the United States District Court, District of North Dakota. THE PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY AND ANY RIGHT EACH MAY HAVE TO OBJECT TO PERSONAL JURISDICTION, ASSERT THE DOCTRINE OF FORUM NON CONVENIENS, OR OBJECT TO VENUE ON ANY BASIS WHATSOEVER IN ANY ACTION ARISING FROM OR RELATING TO THIS AGREEMENT.
K.Entire Agreement. This Agreement, the Note, and the other Loan Documents constitute the sole and entire agreement and understanding between the parties hereto as to the subject matter hereof, and supersede all prior discussions, agreements and understandings of every kind and nature between the parties as to the Loan including but not limited to any commitment letters or proposal letters related to the Loan.

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L.Acknowledgement. Borrower acknowledges that (a) it has had the opportunity to be advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents; (b) Lender has no fiduciary relationship to Borrower, the relationship being solely that of debtor and creditor; (c) no joint venture exists between Borrower and Lender; and (d) Lender undertakes no responsibility to Borrower to review or inform Borrower of any matter in connection with any phase of its business.
M.Further Assurances. Borrower shall, at the request of Lender, at any time and from time to time following the execution of this Agreement promptly execute and deliver, or cause to be executed and delivered, to Lender all such further documents and instruments and take all such further action as may be reasonably necessary or appropriate to confirm or carry out the provisions and intent of this Agreement and the other Loan Documents, including without limitation all documents necessary to the perfection of the security interest in the collateral referenced in the Loan Documents, including, but not limited to the Collateral.
N.Severability of Provisions. Any provision of this Agreement or the Loan Documents which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.
O.Counterparts. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement shall become effective when it shall have been duly executed and delivered by the undersigned officers of Borrower. The words “executed,” signed,” “signature,” and words of like import as used above and elsewhere in this Agreement may include, in addition to manually executed signatures, images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif”, or “jpg”) and other electronic signatures (including, without limitation, any electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.


BORROWER:

NUVERRA ENVIRONMENTAL SOLUTIONS, INC.,
a Delaware corporation


By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            




26





LENDER:

FIRST INTERNATIONAL BANK & TRUST, a North Dakota banking corporation

By:/s/ Drew Flaagan    
Drew Flaagan
Its: Vice President


27




EXHIBIT A

Required Financial Reporting

Borrower covenants and agrees to provide the financial data as required under the Main Street Lending Program as set forth in Appendix C of the Federal Reserve of Boston’s Frequent Asked Questions, as amended and in effect from time to time, which is included below for ease of reference as it exists as of the date hereof. The items listed in Table I below must be provided by Borrower to Lender at least annually. The items listed in Table II must be provided by Borrower to Lender at least quarterly; the quarterly requirements of the MSPLF apply to Borrower. Borrower understands and agrees that Lender will be providing such financial information to the Federal Reserve and/or its appointed special purpose vehicle, MSLP SPV.
TABLE I: DATA REQUIRED ANNUALLY FROM BORROWER
Required Data Definition
Total Assets
The sum of current assets, fixed assets, and other non-current assets (including, but not limited to, intangible assets, deferred items, investments, and advances).
Current Assets Cash, accounts receivable, inventory, and other short-term assets that are likely to be converted into cash, used, sold, exchanged, or otherwise expensed in the normal course of business within one year.
Cash & Marketable Securities
Cash, depository accounts, and marketable securities that can be easily sold and readily converted into cash.
Tangible Assets Assets having a physical existence, measured as total assets less intangible assets. Tangible assets are distinguished from intangible assets, such as trademarks, copyrights, and goodwill.
Total Liabilities The total amount of all outstanding obligations, both current and noncurrent.
Current Liabilities
Short term debt, accounts payable, and other current liabilities that are due within one year.
Total Debt (Incl. Undrawn Available Lines of Credit)
Existing outstanding and committed debt (including any undrawn available amounts).
Total Equity Measured as total assets minus total liabilities.
Total Revenue
Total income generated by the sale of goods or services from ongoing operations. Total Revenue excludes any non-recurring sales or gains.
Net Income
The income (or loss) after expenses and losses have been subtracted from all revenues and gains for the fiscal period, including discontinued operations.
Unadjusted EBITDA
Earnings before interest expense, income tax expense, depreciation expense, and
amortization expense. The starting point is net income.
Adjusted EBITDA
Unadjusted EBITDA adjusted for any non-recurring, one-time, or irregular items. The Adjusted EBITDA measurement should align with the relevant facility’s term sheet.
Depreciation Expense
Non-cash expense measured based on the use of fixed assets, recognized over the useful life of the fixed assets.
Amortization Expense
Non-cash expense measured based on the use of intangible assets, recognized over the life of the intangible asset.


Interest Expense The periodic finance expense of short term and long term debt.
Tax Expense Federal, state and local income tax expenses.
Rent Expense The contractual costs of occupying leased real estate.
Dividends / Equity Distributions
Distributions to equity owners.
Accounts Receivable (net of allowances)
Amounts owed to the borrower resulting from providing goods and/or services. Accounts receivable will be net of any allowances for uncollectible amounts.
Inventory (net of
reserves)
Value of the raw materials, work in process, supplies used in operations, finished
goods, and merchandise bought which are intended to be sold in the ordinary course of business. Inventory should be net of reserves.
Fixed Assets, Gross Tangible property used in the business and not for resale, including buildings, furniture, fixtures, equipment, and land. Report fixed assets gross of depreciation.
Accumulated Depreciation
Cumulative depreciation of all fixed assets up to the Date of Financial Information.
Accounts Payable (A/P) The obligations owed to the borrower's creditors arising from the entity’s ongoing operations, including the purchase of goods, materials, supplies, and services. Accounts payable excludes short term and long term debt.
Short Term Debt
Debt obligations of the borrower due with a term of less than one year, including the current portion of any Long Term Debt.
Long Term Debt
Debt obligations of the borrower that are due in one year or more, excluding the
current portion that is otherwise captured in Short Term Debt.
Description of EBITDA Adjustments
Description of items that are added to Unadjusted EBITDA to determine Adjusted EBITDA.
Total Expenses All money spent and costs incurred, both recurring and non-recurring, to generate revenue. Expenses exclude items capital in nature (i.e., expenses that are allowed to be capitalized and included in the cost basis of a fixed asset).
Operating Expenses Money spent and costs incurred related to normal business operations including selling, general & administrative expenses, depreciation, and amortization (i.e., total expenses less non-recurring expenses). Exclude capital expenditures.
Operating Income
Profit (or loss) realized from continuing operations (i.e., revenue less operating expenses).
Fixed Charges Expenses that recur on a regular basis, regardless of the volume of business (i.e., lease payments, rental payments, loan interest payments, or insurance payments).
Capitalized Expenditures Non-operating expenditures capitalized to fixed assets.
Guarantor Net Assets Total assets less total liabilities of the guarantor (also referred to as net worth).
Sr. Debt Balance Debt amount ranking senior to the Main Street loan.
Additional Pari Passu
Debt Balance
Debt amount ranking pari passu to the Main Street loan.
Collateral Type (Non-Real Estate)
If the loan is secured by collateral that is not predominantly real estate, including if the collateral provided is different types, report the predominant type of collateral (e.g., inventory, receivables, securities, etc.) by aggregate value.
Collateral Type (Real Estate)
If the loan is secured by real estate collateral, indicate the property type (e.g., hotel, multifamily, residential, industrial, etc.). If the loan is secured by multiple real estate property types, report the predominant property type by aggregate value.
A-2




Collateral Value Reporting
For loans that require ongoing or periodic valuation of the collateral, report the market value of the collateral as of the reporting date.
Collateral Value Date Define the as-of date that corresponds with the Collateral Value Reporting field.
Covenant Status (Pass / Fail)
Yes/no, indicating if the facility has satisfied covenant tests.
Date of Covenant Default If applicable, report the date when borrower defaulted covenants.
Nature of Covenant Default
If applicable, describe the covenant default (i.e., missing financial statements, ratio trigger).
Date of Covenant Cure If applicable, report the date when borrower cured previous defaults.
TABLE II: DATA REQUIRED QUARTERLY FROM BORROWER
Required Data
MSELF
MSNLF
MSPLF
Definition
Total Assets Yes Yes Yes
The sum of current assets, fixed assets, and other non- current assets (including, but not limited to, intangible assets, deferred items, investments, and advances).
Current Assets Yes Yes Yes Cash, accounts receivable, inventory, and other short term assets that are likely to be converted into cash, used, sold, exchanged, or otherwise expensed in the normal course of business within one year.
Cash & Marketable
Securities
Yes Yes Yes
Cash, depository accounts, and marketable securities that
can be easily sold and readily converted into cash.
Tangible Assets Yes No No Assets having a physical existence measured as total assets less intangible assets. Tangible assets are distinguished from intangible assets, such as trademarks, copyrights, and goodwill.
Total Liabilities Yes Yes Yes
The total amount of all outstanding obligations, both current and noncurrent.
Current Liabilities Yes Yes Yes
Short term debt, accounts payable, and other current liabilities that are due within one year.
Total Debt (Incl.
Undrawn Available Lines of Credit)
Yes Yes Yes
Existing outstanding and committed debt (including any
undrawn available amounts).
Total Equity Yes Yes Yes Measured as total assets minus total liabilities.
Total Revenue Yes Yes Yes Total income generated by the sale of goods or services from ongoing operations. Total Revenue excludes any non- recurring sales or gains.
Net Income Yes Yes Yes The income (or loss) after expenses and losses have been subtracted from all revenues and gains for the fiscal period, including discontinued operations.
Unadjusted EBITDA Yes Yes Yes
Earnings before interest expense, income tax expense, depreciation expense and amortization expense. The starting point is net income.
Adjusted EBITDA Yes Yes Yes Unadjusted EBITDA adjusted for any non-recurring, one- time or irregular items. The Adjusted EBITDA measurement should align with the relevant facility’s term sheet.
Depreciation Expense
Yes No No
Non-cash expense measured based on the use of fixed assets, recognized over the useful life of the fixed assets.
A-3




Amortization
Expense
Yes No No
  Non-cash expense measured based on the use of intangible assets, recognized over the life of the intangible asset.
Interest Expense Yes Yes Yes
The periodic finance expense of short term and long term debt.
Tax Expense Yes No No Federal, state and local income tax expenses.
Rent Expense Yes No No The contractual costs of occupying leased real estate.
Dividends / Equity Distributions
Yes Yes Yes Distributions to equity owners.
Accounts Receivable (net of allowances) Yes No No Amounts owed to the borrower resulting from providing goods and/or services. Accounts receivable will be net of any allowances for uncollectible amounts.
Inventory (net of reserves)
Yes No No Value of the raw materials, work in process, supplies used in operations, finished goods, and merchandise bought which are intended to be sold in the ordinary course of business. Inventory should be net of reserves.
Fixed Assets, Gross Yes No No Tangible property used in the business and not for resale, including buildings, furniture, fixtures, equipment, and land. Report fixed assets gross of depreciation.
Accumulated Depreciation
Yes No No
Cumulative depreciation of all fixed assets up to the Date of Financial Information.
Accounts Payable (A/P)
Yes No No The obligations owed to the borrower’s creditors arising from the entity’s ongoing operations, including the purchase of goods, materials, supplies, and services. Accounts payable excludes short term and long term debt.
Short Term Debt Yes No No Debt obligations of the borrower due with a term of less than one year, including the current portion of any Long Term Debt.
Long Term Debt Yes No No Debt obligations of the borrower that are due in one year or more, excluding the current portion that is otherwise captured in Short Term Debt.
Description of EBITDA Adjustments
Yes No No
Description of items that are added to Unadjusted EBITDA to determine Adjusted EBITDA.
Total Expenses Yes No No All money spent and costs incurred, both recurring and non- recurring, to generate revenue. Expenses exclude items capital in nature (i.e., expenses that are allowed to be capitalized and included in the cost basis of a fixed asset).
Operating Expenses
Yes Yes Yes Money spent and costs incurred related to normal business operations, including selling, general & administrative expenses, depreciation, and amortization (i.e. total expenses less non-recurring expenses). Exclude capital expenditures.
Operating Income Yes Yes Yes
Profit (or loss) realized from continuing operations (i.e., revenue less operating expenses).
A-4




Fixed Charges Yes No No Expenses that recur on a regular basis, regardless of the volume of business (i.e., lease payments, rental payments, loan interest payments, or insurance payments).
Capitalized Expenditures Yes Yes Yes Non-operating expenditures capitalized to fixed assets.
Guarantor Net Assets
Yes No No
Total assets less total liabilities of the guarantor (also referred to as net worth).
Sr. Debt Balance Yes Yes Yes Debt amount ranking senior to the Main Street loan.
Additional Pari Passu Debt Balance Yes Yes Yes Debt amount ranking pari passu to the Main Street loan.
Collateral Type (Non-Real Estate) Yes No No If the loan is secured by collateral that is not predominantly real estate, including if the collateral provided is different types, report the predominant type of collateral (e.g., inventory, receivables, securities, etc.) by aggregate value.
Collateral Type (Real Estate)
Yes No No
If the loan is secured by real estate collateral, indicate the property type (e.g., hotel, multifamily, residential, industrial, etc.). If the loan is secured by multiple real estate property types, report the predominant property type by aggregate value.
Collateral Value Reporting
Yes No No For loans that require ongoing or periodic valuation of the collateral, report the market value of the collateral as of the reporting date.
Collateral Value
Date
Yes No No
Define the as-of date that corresponds with the Collateral
Value Reporting field.
Covenant Status (Pass / Fail)
Yes Yes Yes Yes/no, indicating if the facility has satisfied covenant tests.
Date of Covenant Default
Yes Yes Yes
If applicable, report the date when borrower defaulted covenants.
Nature of Covenant Default Yes Yes Yes
If applicable, describe the covenant default (i.e., missing financial statements, ratio trigger).
Date of Covenant Cure
Yes Yes Yes
If applicable, report the date when borrower cured previous defaults.


A-5




Exhibit 10.2
PROMISSORY NOTE
(Equipment Loan)
$13,000,000.00
Watford City, North Dakota
November 16, 2020
        
FOR VALUE RECEIVED, NUVERRA ENVIRONMENTAL SOLUTIONS, INC., a Delaware corporation (“Borrower”), hereby promises to pay to the order of FIRST INTERNATIONAL BANK & TRUST, a North Dakota banking corporation, its successors and assigns (“Lender”), the principal sum of Thirteen Million and 00/100 Dollars ($13,000,000.00), or so much thereof as has been advanced to or for the benefit of Borrower pursuant to the terms and conditions of that certain Loan Agreement of even date herewith between Lender and Borrower (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”; any capitalized term used and not otherwise defined herein shall have the same meaning as given to it in the Loan Agreement), in lawful money of the United States and immediately available funds, together with interest on the unpaid balance accruing as of the date hereof as described below.
The unpaid principal balance on any advances made under this Promissory Note (Equipment Loan) (this “Note”) shall bear interest at a floating rate of interest (the “Rate”) equal to the LIBOR Rate (as defined below) plus three percent (3.00%) per annum and shall be adjusted on the first day of every month for the term hereof.
“LIBOR Rate” means the London Interbank Offered Rate (LIBOR) as determined by ICE Benchmark Administration Limited (or any successor or substitute therefor acceptable to Lender) for Dollar deposits for a one-month period as obtained by Lender from Reuters, Bloomberg or another commercially available source providing such quotations as may be designated by Lender from time to time, unless a Benchmark Transition Event (as defined below) has occurred, in which case such rate shall be at an alternate index rate (including any spread adjustments) that has been broadly accepted in the United States in lieu of LIBOR Rate or as otherwise selected by Lender with the consent of Borrower. Lender shall determine the LIBOR Rate based on the foregoing, and its determination thereof shall be conclusive and binding except in the case of manifest error. Notwithstanding anything to the contrary herein, after no less than thirty (30) days written notice by Lender to Borrower of the occurrence of a Benchmark Transition Event, Lender may make any technical, administrative or operational changes to this Note and any other Loan Documents, and may make any adjustments to interest rate spreads, to reflect the adoption and implementation of the substitute index rate, and any amendments to the Loan Agreement or any other Loan Documents reflecting such conforming changes will be effective without any further action or consent from Borrower.
“Benchmark Transition Event” means the occurrence of any of the following events with respect to the LIBOR Rate (as determined by Lender in its sole discretion): (a) adequate and reasonable means do not exist for ascertaining the LIBOR Rate, including, without limitation, because the LIBOR Rate as determined by the method described in the definition of “LIBOR Rate” is not available or published on a current basis and such circumstances are unlikely to be temporary; (b) the administrator of the LIBOR Rate or a governmental authority having jurisdiction over Lender has made a public statement that the LIBOR Rate shall no longer be made available, used or advisable for determining interest rates of loans; or (c) loans are



currently being executed containing, or loans that include benchmark replacement language similar to that contained in this Note are being executed or modified (as applicable) to incorporate or adopt, a new benchmark interest rate to replace the LIBOR Rate set forth therein.

Interest on the Equipment Loan shall be deferred and capitalized during the first year, through and including November 16, 2021. Commencing on December 1, 2021, and continuing on the first day of each calendar month thereafter until the Equipment Loan is paid in full, Borrower shall pay to Lender successive monthly payments of interest calculated at the Rate. Principal on the Equipment Loan shall be deferred during the first two years, through and including November 16, 2022. Commencing on December 1, 2022, and continuing on the first day of each calendar month thereafter through and until November 16, 2025 (the “Maturity Date”), the Equipment Loan will be fully amortized and Borrower shall pay to Lender successive annual payments of principal in an aggregate amount equal to (a) fifteen percent (15%) of the original principal amount of the Equipment Loan plus the capitalized interest on November 16, 2023, (b) fifteen percent (15%) of the original principal amount of the Equipment Loan plus the capitalized interest on November 16, 2024, and (c) the remaining seventy percent (70%) of the original principal amount of the Equipment Loan plus capitalized interest on the Maturity Date. On the Maturity Date, Borrower shall pay to Lender the entire unpaid principal amount and any interest accrued but remaining unpaid and all other sums due under the Equipment Loan.
In all cases interest on this Note shall be calculated on the basis of a 360 day year but charged for actual days principal is unpaid.
If any installment of interest on this Note, including the payment required on the Maturity Date is not paid within ten (10) days of the due date thereof, Borrower shall pay to Lender a late charge equal to five percent (5.00%) of the amount of such installment.
Notwithstanding anything to the contrary contained herein, at all times in which an Event of Default has occurred and is continuing hereunder, interest shall accrue on amounts outstanding hereunder at a rate equal to two percent (2.00%) per annum in excess of the rate otherwise payable hereunder (the “Default Rate”).
This Note may be prepaid, in whole or in part, at any time, without penalty or premium upon thirty (30) days prior written notice to Lender. Any prepayment of the Loan shall be accompanied by all accrued and unpaid interest on the amount prepaid. All payments and prepayments shall, at the option of Lender, be applied first to any costs of collection, second to any late charges, third to accrued interest on this Note, and lastly to principal in direct order of scheduled maturities.
If, on any date, the Board of Governors of the Federal Reserve System or a designee thereof has, after consultation with Lender, notified Lender in writing that Borrower has materially breached, made a material misrepresentation with respect to or otherwise failed to comply with certifications in Section 2 (CARES Act Borrower Eligibility Certifications and Covenants) or Section 3 (FRA and Regulation A Borrower Eligibility Certifications) of the MSPLF Borrower Certifications and Covenants in any material respect or that any such certification has failed to be true and correct in any material respect, then Lender shall promptly so notify Borrower in writing and Borrower shall, no later than two (2) business days following receipt of such written notice, prepay the Equipment Loan in full, along with any accrued and unpaid interest thereon.
Notwithstanding anything to the contrary contained herein, if the rate of interest, late payment fee or any other charges or fees due hereunder are determined by a court of competent
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jurisdiction to be usurious, then said interest rate, fees and/or charges shall be reduced to the maximum amount permissible under applicable North Dakota law.
This Note is secured only by the Equipment and the Motor Vehicles and any proceeds of the foregoing under the Security Agreement and the Guaranty, and Lender is entitled to all of the benefits provided for therein.
Upon the occurrence and the continuance of an Event of Default under this Note or under any other obligation of Borrower to Lender as set forth in the Loan Agreement, the outstanding principal balance hereof and accrued interest and all other amounts due hereon shall, at the option of Lender, become immediately due and payable, without notice or demand.
Upon the occurrence and the continuance of an Event of Default hereunder or under the Loan Agreement, Lender shall have the right to set off any and all amounts due hereunder by Borrower to Lender against any indebtedness or obligation of Lender to Borrower.
Upon the occurrence at any time of an Event of Default or at any time thereafter, Borrower promises to pay all costs of collection of this Note, including but not limited to reasonable and documented attorneys’ fees, paid or incurred by Lender on account of such collection, whether or not suit is filed with respect thereto and whether such cost or expense is paid or incurred, or to be paid or incurred, prior to or after the entry of judgment.
Demand, presentment, protest and notice of nonpayment and dishonor of this Note are hereby waived. This Note shall be governed by and construed in accordance with the laws of the State of North Dakota.
Borrower hereby irrevocably submits to the jurisdiction of any North Dakota state court or federal court over any action or proceeding arising out of or relating to this Note, the Loan Agreement and any instrument, agreement or document related hereto or thereto, and Borrower hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such North Dakota state or federal court. Borrower hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. Borrower irrevocably consents to the service of copies of the summons and complaint and any other process which may be served in any such action or proceeding by the mailing by United States certified mail, return receipt requested, of copies of such process to Borrower’s last known address. Borrower agrees that judgment final by appeal, or expiration of time to appeal without an appeal being taken, in any such action or proceeding shall be conclusive and may be enforced in any other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this paragraph shall affect the right of Lender to serve legal process personally on Borrower in any other manner permitted by law or affect the right of Lender to bring any action or proceeding against Borrower or its property in the courts of any other jurisdiction to the extent permitted by law.




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BORROWER:

NUVERRA ENVIRONMENTAL SOLUTIONS, INC.,
a Delaware corporation


By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            

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Issued on June 11, 2020
Exhibit 10.3
MAIN STREET PRIORITY LOAN FACILITY
BORROWER CERTIFICATIONS AND COVENANTS
INSTRUCTIONS AND GUIDANCE
Reference is made to the Main Street Priority Loan Facility (the “Facility”), which has been authorized under section 13(3) of the Federal Reserve Act (the “FRA”). Under the Facility, the Federal Reserve Bank of Boston (the “Reserve Bank”), acting under the direction of the Board of Governors of the Federal Reserve System (the “Board” and, together with the twelve Federal Reserve Banks, the “Federal Reserve”), has committed to lend to a special purpose vehicle, MS Facilities LLC, a Delaware limited liability company (the “SPV”), on a recourse basis. The SPV will purchase 95 percent participations in certain eligible loans made by eligible lenders to eligible borrowers. Eligible lenders will retain 5 percent of each such eligible loan. The Secretary of the Treasury (“Secretary”) has committed funds appropriated to the Exchange Stabilization Fund under section 4027 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to the SPV in connection with the Facility, the Main Street New Loan Facility, and the Main Street Expanded Loan Facility (each, a “Main Street Facility”).
INSTRUCTIONS: To participate in the Main Street Priority Loan Facility, the borrower (the “Borrower”) must provide the following certifications and covenants (the “Borrower Certifications and Covenants”) in a writing executed, on behalf of the Borrower, by its principal executive officer and principal financial officer (or individuals performing similar functions)1 in connection with the loan (the “Eligible Loan”) to be made by the eligible lender (the “Eligible Lender”) to the Borrower under the Facility. For purposes of these certifications and covenants, the Federal Reserve’s current Frequently Asked Questions (“FAQs”) on the Main Street Facilities, as posted on the website of the Board or the Reserve Bank as of the date hereof, are incorporated by reference. The Borrower may rely on the clarifications and interpretations provided in the FAQs, to the extent applicable.
1.    Facility Borrower Eligibility Certifications and Covenants.
1.A.Borrower Is a Business. The Borrower must certify that it is a Business. For purposes of the Borrower Certifications and Covenants, “Business” means an entity that is organized for profit as a partnership; a limited liability company; a corporation; an association; a trust; a cooperative; a joint venture with no more than 49 percent participation by foreign business entities; a tribal business concern that is (i) wholly owned by one or more Indian tribal governments, or by a corporation that is wholly owned by one or more Indian tribal governments, or (ii) owned in part by one or more Indian tribal governments, or by a corporation that is wholly owned by one or more Indian tribal governments, if all other owners are either U.S. citizens or Businesses; or any other form of organization that has been publicly designated by the Federal Reserve as a “Business.”2
1.B.Date of Establishment. The Borrower must certify that it was established prior to March 13, 2020. For purposes of this certification, “established” means the date of formation, incorporation, or organization for any registered entity under the laws of the United States, one of the several states of the United States, the District of Columbia, any of the territories and possessions of the United States, or an Indian tribal government.
1.C.Not an Ineligible Business. The Borrower must certify that, after reasonable, good faith diligence, it has no reason to believe it is an Ineligible Business.
1 If the principal executive officer and principal financial officer of a Borrower are the same individual, the second signatory should be the next-in-line officer or employee of the Borrower that works in a financial or accounting capacity.
2 Any such designations will be published in FAQs posted to the website of the Board or the Reserve Bank.

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•For purposes of the Borrower Certifications and Covenants, an “Ineligible Business” means a business of any of the types listed in 13 CFR 120.110(b)-(j), (m)-(s), as modified and clarified by Small Business Administration (“SBA”) regulations for purposes of the Paycheck Protection Program (“PPP”) on or before April 24, 2020. Such modifications and clarifications include the SBA’s recent interim final rules available at 85 Fed. Reg. 20811, 85 Fed. Reg. 21747, and 85 Fed. Reg. 23450. The Federal Reserve may further modify the application of these restrictions to Main Street.3
•Reasonable, Good Faith Diligence. For purposes of this certification, Eligible Borrowers are expected to review the list of Ineligible Businesses in 13 CFR 120.110(b)-(j), (m)-(s), and make a reasonable, good faith effort to determine if the Borrower’s activities or ownership would cause it to be classified within one of the listed ineligible categories. If representatives of the Borrower have reason to believe that the Borrower may be an Ineligible Business under the categories listed in that regulation, Borrowers are expected to conduct further inquiry into the SBA’s interpretations of such categories, including in the interim final rules, and to reference the FAQs.
1.D. Maximum Size. The Borrower must certify that it meets at least one of the following two conditions: (i) the Borrower has 15,000 employees or fewer, or (ii) the Borrower had 2019 annual revenues of $5 billion or less. The Borrower must meet at least one of these conditions, but is not required to meet both.
•Number of Employees. To determine the number of its employees, the Borrower should follow the framework set out in the Small Business Administration’s regulation at 13 CFR 121.106. As set out in that regulation, the Borrower should count as employees all full-time, part-time, seasonal, or otherwise employed persons, excluding volunteers and independent contractors. The Borrower should count its own employees and those employed by its affiliates. In order to determine the applicable number of employees, the Borrower should use the average of the total number of persons employed by the Borrower and its affiliates for each pay period over the 12 months prior to the origination of the Eligible Loan.
•Amount of Revenues. To determine its 2019 annual revenues, the Borrower must aggregate its revenues with those of its affiliates. The Borrower may use either of the following methods to calculate 2019 annual revenues for purposes of determining eligibility: (1) the Borrower may use its (and its affiliates’) annual “revenue” as reflected on its fiscal year 2019 audited financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”); or (2) the Borrower may use its (and its affiliates’) annual receipts for the fiscal year 2019, as reported to the Internal Revenue Service. For purposes of the Facility, the term “receipts” has the same meaning used by the Small Business Administration in 13 CFR 121.104(a). If the Borrower (or its affiliate) does not yet have 2019 audited financial statements prepared in accordance with U.S. GAAP or annual receipts for 2019, the Borrower (or its affiliate) should use its most recent audited financial statements or annual receipts.
•Identifying Affiliates. For purposes of the Borrower Certifications and Covenants, the Borrower should identify its affiliates in accordance with the affiliation principles set forth in 13 CFR 121.301(f) (1/1/2019 ed.).
3 Any such modifications will be published in the FAQs posted to the website of the Board or the Reserve Bank.

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1.E. Other Similar Credit Programs. The Borrower must certify that it has not also participated in, and commit that it will not seek to participate simultaneously in, the Main Street New Loan Facility, the Main Street Expanded Loan Facility, or the Primary Market Corporate Credit Facility (a facility established by the Federal Reserve under section 13(3) of the FRA, using equity committed by the Secretary, to support bond and loan issuances). For the avoidance of doubt, a Borrower that has received a PPP loan is permitted to borrow under the Facility, provided that it meets the other Facility eligibility criteria.
2.    CARES Act Borrower Eligibility Certifications and Covenants.
2.A.Specific Support under CARES Act. Consistent with the definition of an “eligible business” under section 4002(4) of the CARES Act, the Borrower must certify that it has not received specific support pursuant to the Coronavirus Economic Stabilization Act of 2020 (Subtitle A of Title IV of the CARES Act). For purposes of this certification, a Borrower is ineligible only if it has received support pursuant to section 4003(b)(1)-(3) of the CARES Act.
2.B.U.S. Business Requirement. The Borrower must certify that it is a business that is created or organized in the United States or under the laws of the United States and that has significant operations in and a majority of its employees based in the United States, consistent with section 4003(c)(3)(C) of the CARES Act.
•Created or Organized. A business is created or organized in the United States if it is created or organized under the laws of the United States, one of the several states of the United States, the District of Columbia, any of the territories and possessions of the United States, or an Indian tribal government.
•Significant Operations. To determine if it has “significant operations” in the United States, the Borrower’s operations should be evaluated on a consolidated basis together with its subsidiaries, but not its parent companies or sister affiliates. For example, the Borrower has significant operations in the United States if, when consolidated with its subsidiaries, greater than 50 percent of the Borrower’s (i) assets are located in the United States; (ii) annual net income is generated in the United States; (iii) annual net operating revenues are generated in the United States; or (iv) annual consolidated operating expenses (excluding interest expense and any other expenses associated with debt service) are generated in the United States. This is a non-exhaustive list of examples that reflects the principles that should be applied by the Borrower when evaluating its eligibility under this criterion.
•Majority of Employees. To determine if it has “a majority of its employees” in the United States, the Borrower’s operations should be evaluated on a consolidated basis together with its subsidiaries, but not its parent companies or sister affiliates. As set out in 13 CFR 121.106, the Borrower should count as employees all full-time, part-time, seasonal, or otherwise employed persons, excluding volunteers and independent contractors. In order to determine the applicable number of employees, the Borrower should use the average of the total number of persons employed by the Borrower and its subsidiaries for each pay period over the 12 months prior to the origination of the Eligible Loan under the Facility.
2.C. Eligible under Conflicts of Interest Prohibition. Section 4019(c) of the CARES Act requires the principal executive officer and principal financial officer (or individuals performing similar functions) of a Borrower to certify to the Secretary and the Board that the Borrower is not a Covered Entity.
•For purposes of the Borrower Certifications and Covenants, “Covered Entity” means an entity in which a Covered Individual directly or indirectly holds a Controlling Interest.
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•For purposes of the Borrower Certifications and Covenants, “Covered Individual” means the President, the Vice President, the head of an Executive department as defined in 5 U.S.C. § 101, or a member of Congress (each a “Government Official” and collectively “Government Officials”), and the spouse, child, son-in-law, or daughter-in-law, as determined under applicable common law, of the Government Official (each a “Family Member” and any group of which are “Family Members”). The term “child” includes a step-child, but the term “spouse” does not include an ex-spouse. To determine a Covered Individual’s equity interest in an entity, the Government Official’s and Family Members’ equity interests shall be aggregated.
•For purposes of the Borrower Certifications and Covenants, a “Controlling Interest” means owning, controlling, or holding not less than 20 percent, by vote or value, of the outstanding amount of any class of equity interest in an entity. An “equity interest” means (a) shares, (b) capital or profit interest in a limited liability company or partnership, or (c) a warrant or right (other than a right to convert) to purchase, sell, or subscribe to any such equity interest. The determination of whether a Covered Individual directly or indirectly holds a Controlling Interest in an entity must take into account a Covered Individual’s direct interest in the entity as well as a Covered Individual’s interest in any entity that directly or indirectly has an interest in such entity (e.g., the entity’s parent companies).
◦Direct Interests. If a Covered Individual directly owns, controls, or holds 20 percent or more, by vote or value, of the outstanding amount of any class of equity interest in an entity that is seeking to enter into a transaction with the Facility, that entity is a Covered Entity.
◦Indirect Interests. For the purpose of determining the amount of an equity interest indirectly owned or held by a Covered Individual in an entity:
A Covered Individual’s indirect equity interest by value (i.e., economic interest that may or may not include voting rights) shall be calculated on a proportional basis, taking into account any partial ownership of the relevant entity’s parents.
•For example, if a Government Official owns 25 percent of the economic interest in Company A, and Company A owns 40 percent of the outstanding amount of a class of voting securities of Company B, the Government Official is deemed to own 10 percent of the class of voting securities of Company B.
For the purpose of determining the amount of an equity interest indirectly controlled by a Covered Individual in an entity:
•A Covered Individual shall be deemed to indirectly control an equity interest in an entity if he or she controls, directly or indirectly, the entity that owns or holds the equity interest.
•An individual or entity shall be deemed to control another entity only when the individual or entity owns or holds a majority of the voting interest in such entity, or is, or holds a majority of the voting interest in, the general partner of such entity.
•For example, if a Government Official owns a 51 percent voting interest in Company A, which owns a 51 percent voting interest in Company B, which owns 20 percent of the equity interests of Company C, the Government Official shall be deemed to control 20 percent of the equity interests of Company C.
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◦Shares. A share is considered an ownership interest without regard to whether the share is transferrable or classified as stock or anything similar and without regard to whether the share is a voting security. For example, a nonvoting preferred share would be considered a share.
◦Warrants or Rights. If the Covered Individual has warrants or other rights (other than a right to convert), calculate the Covered Individual’s interest in the underlying equity interest on a fully diluted basis assuming that both the individual and other holders of such warrants or rights have exercised such interests. Warrants, options, and similar rights must be counted even if they are unexercised or “out of the money.” For example, when calculating an individual’s percentage in an equity interest, use the following formula:

(Individual′s shares in a class) + (Individual′s options and warrants in that class)
(Total outstanding shares in that class, assuming all warrants or rights are exercised)
•Basis for Certification: Reasonable Diligence. In light of limited public information on ownership interests of Government Officials, and that the identities of Government Officials’ Family Members are not disclosed or reported in any routine or comprehensive manner, it is necessary to prescribe the level of diligence required to make a conflict of interest certification in good faith. To determine whether any Covered Individual holds a Controlling Interest in an entity, it is necessary and sufficient for the entity to undertake the following reasonable diligence:
◦Entities must take into account the ownership, control, and holding of any equity interest of any size if the entity has actual knowledge that a Covered Individual, directly or indirectly, owns, controls, or holds the interest.
◦Entities must determine the beneficial owner of any 5 percent or greater equity interest of the entity and determine whether such beneficial owner is a Covered Individual (i) by checking the name of each such beneficial owner against a list of all Government Officials (link here) and (ii) if the entity has not otherwise been able to confirm whether such beneficial owner is a Family Member, by asking each such beneficial owner whether the owner is a Family Member. If the aggregate amount of equity interests owned by the identified beneficial owners, together with the aggregate percentage ownership determined from actual knowledge in (i) above, is less than 20 percent, an entity need not determine if the identified beneficial owners are Family Members.
◦To determine the identity of beneficial owners of publicly traded securities, Borrowers may rely on information disclosed by such persons in reporting under sections 13(d) and 13(g) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78m(d), 78m(g)).
2.D. Direct Loan Restrictions. The Borrower must commit to comply with the compensation, stock repurchase, and capital distribution restrictions that apply to direct loan programs under section 4003(c)(3)(A)(ii) of the CARES Act, except that an S corporation or other tax pass-through entity that is
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a Borrower may make distributions to the extent reasonably required to cover its owners’ tax obligations in respect of the Borrower’s earnings.

•Limits on Compensation. The following restrictions apply to compensation of officers and employees of Borrowers that exceeds $425,000 and, where applicable, $3,000,000, in calendar year 2019 or the Subsequent Reference Period (as defined below).
◦Officer or employee: “Officer or employee” means an individual who performs compensated services for the Borrower and either:
(i)for whom, in connection with those services, the Borrower would be responsible for reporting the compensation on Form W-2 and withholding federal income taxes under IRS rules applicable to U.S. citizen employees in a state or the District of Columbia (regardless of whether the compensation paid to the individual is actually subject to federal income tax withholding, and whether or not tax is withheld); or
(ii)is a partner in a partnership, a member of a limited liability company, or other similar structure. Officer or employee does not include an independent director or an independent contractor.
•Total Compensation: “Total Compensation” includes salary, bonuses, awards of stock, and other financial benefits provided by the Borrower and its affiliates to an officer or employee of the Borrower.4
◦Restrictions on compensation for employees or officers with total compensation of between $425,000 and $3,000,000. No employee or officer whose total compensation exceeded $425,000, but was less than or equal to $3,000,000, in calendar year 2019 or the Subsequent Reference Period will, until 12 months after the date on which the Eligible Loan is no longer outstanding:
•receive from the Borrower total compensation which exceeds, during any 12 consecutive month period, the total compensation received by the officer or employee from the Borrower in calendar year 2019 or the Subsequent Reference Period; or
•receive from the Borrower severance pay or other benefits upon termination of employment with the Borrower, which exceeds twice the maximum total compensation received by the officer or employee from the Borrower in calendar year 2019 or the Subsequent Reference Period.
•Exception. These restrictions do not apply to an employee whose compensation is determined through an existing collective bargaining agreement entered into prior to March 1, 2020. For purposes of this exception, the term “employee” has the same meaning given the term in section 2 of the National Labor Relations Act (29 U.S.C. § 152); and includes any individual employed by an employer subject to the Railway Labor Act (45 U.S.C. § 151 et seq.).
4 Borrowers should consult the FAQs for additional guidance on “Total Compensation” before signing the Borrower Certifications and Covenants.

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◦Restrictions on compensation for employees or officers with total compensation exceeding $3,000,000. No employee or officer whose total compensation exceeded $3,000,000 in calendar year 2019 or the Subsequent Reference Period will, until 12 months after the date on which the Eligible Loan is no longer outstanding:
•receive, during any 12 consecutive month period, total compensation in excess of the sum of (1) $3,000,000; and (2) 50 percent of the excess over $3,000,000 of the total compensation received by the officer or employee from the Borrower in calendar year 2019 or the Subsequent Reference Period; and
•except for an employee whose compensation is determined through an existing collective bargaining agreement entered into prior to March 1, 2020, receive from the Borrower severance pay or other benefits upon termination of employment with the Borrower, which exceeds twice the maximum total compensation received by the officer or employee from the Borrower in calendar year 2019 or the Subsequent Reference Period. For purposes of this exception, the term “employee” has the same meaning given the term in section 2 of the National Labor Relations Act (29 U.S.C. § 152); and includes any individual employed by an employer subject to the Railway Labor Act (45 U.S.C. § 151 et seq.).
◦Restrictions applicable to new hires and existing officers or employees who become highly compensated. For an officer or employee whose employment with a Borrower started during 2019 or later, the “Subsequent Reference Period” is the 12-month period starting from the end of the month in which the officer or employee commenced employment, if such officer’s or employee’s total compensation exceeds $425,000 (or $3,000,000) during such period. For an officer or employee whose total compensation first exceeds $425,000 during a 12-month period ending after 2019, the “Subsequent Reference Period” is the 12-month period starting from the end of the month in which the officer or employee’s total compensation first exceeded $425,000 (or $3,000,000).
•Limits on repurchases of equity securities. The following restrictions on repurchases apply to Borrowers that have, or have a parent company that has, equity securities that are listed on a national securities exchange. The term equity security has the same meaning as in section 3(a) of the Securities Exchange Act of 1934. The term national securities exchange means an exchange registered as a national securities exchange under section 6 of the Securities Exchange Act of 1934. For purposes of these restrictions, the term repurchase includes a redemption of an equity security.
◦Restrictions applicable to the Borrower’s repurchases of its own shares. Until 12 months after the date on which the Eligible Loan is no longer outstanding, a Borrower must commit not to repurchase an equity security that is issued by the Borrower and listed on a national securities exchange.
◦Restrictions applicable to the Borrower’s repurchases of shares of its parent company. While the Eligible Loan is outstanding, the Borrower also must commit to not repurchase an equity security issued by any of its parent companies that is listed on a national securities exchange. A parent company means any company that consolidates the Borrower for purposes of financial reporting, such as under rules of consolidation established by the Securities Exchange Commission or U.S. GAAP.
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◦Exception. Restrictions on repurchases of equity securities by the Borrower or a parent company do not apply to any repurchases required under a contractual obligation that was in effect as of March 27, 2020.
•Limits on distributions. Until 12 months after the date on which the Eligible Loan is no longer outstanding, the Borrower must agree not to pay dividends or make other capital distributions with respect to the common stock equivalents of the Borrower, except as provided below. For purposes of these restrictions, the term “common stock equivalents” includes common stock in a corporation and equivalent interests in a partnership, limited liability company, a business organized as a trust or other legal entity. Dividends and other capital distributions means any payment made with respect to the Borrower’s common stock equivalents, including a discretionary dividend payment. In addition, preferred stock or any other equity interest in a Borrower that provides for mandatory or preferential payment of dividends or other distributions shall be subject to these restrictions unless both the equity interest and the obligation to pay dividends or distributions existed as of March 27, 2020. Dividends and other capital distributions do not include repurchases or redemptions.
◦S Corporations and other tax pass-through entities. A Borrower that is an S corporation or other tax pass-through entity may make distributions in respect of its common stock equivalents to the extent reasonably required to cover its owners’ tax obligations in respect of the entity’s earnings. Such distributions shall be subject to an annual reconciliation, with any surplus or deficiency to be deducted from or added to distributions, as applicable, in the following year.
3.    FRA and Regulation A Borrower Eligibility Certifications.
3.A.Unavailability of Credit. Consistent with 12 CFR 201.4(d)(8), the Borrower must certify that it is unable to secure adequate credit accommodations from other banking institutions. This does not necessarily mean that no other credit is available for the Borrower’s purposes. Rather, the Borrower can certify that it is unable to secure “adequate credit accommodations” because the amount, price, or terms of credit available from other sources are inadequate for the Borrower’s needs during the current unusual and exigent circumstances.
3.B.Solvency. Under section 13(3) of the FRA, the Borrower must certify that it is not Insolvent as that term is used in 12 CFR 201.4(d)(5)(iii). For purposes of this certification, a Borrower is “Insolvent” if it is in bankruptcy, resolution under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any other Federal or State insolvency proceeding (as defined in paragraph B(ii) of section 13(3) of the Federal Reserve Act), or if it was “generally failing to pay undisputed debts as they become due” during the 90 days preceding the date of borrowing. For purposes of this certification, a Borrower has been “generally failing to pay undisputed debts as they become due” during the 90 days preceding the date hereof to the extent it is behind on its debts for reasons other than disruptions to its business resulting from the Coronavirus Disease 2019 (“COVID-19”) pandemic. For the avoidance of doubt, a person or entity would not be Insolvent or “generally failing to pay its undisputed debts as they become due” if it is behind on its debts because of reduced business activity resulting from stay-at-home, shelter-in-place, social distancing, or other similar orders or recommendations by federal, state, or local government authorities related to the COVID-19 pandemic. Additionally, a person or entity would not be Insolvent if expected and routine sources of funding were unexpectedly unavailable due to market conditions resulting from the COVID-19 pandemic. If, however, a person or entity is failing to pay its undisputed debts as they become due for reasons unrelated to the COVID-19 pandemic, then it is Insolvent. For
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example, a person or entity is Insolvent if it was generally failing to pay its undisputed debts in the 90 days preceding the later of March 1, 2020, or the date on which changes in its business activity related to the COVID-19 pandemic commenced.
4.    Eligible Loan Certifications.
4.A. Financial Records. The Borrower must certify that (i) it has provided financial records to the Eligible Lender and a calculation of the Borrower’s (and, if relevant, the Borrower’s affiliates’ and/or Selected Subsidiaries’) adjusted 2019 earnings before interest, taxes, depreciation, and amortization (“EBITDA”), reflecting only those adjustments permitted pursuant to the methodology that the Borrower agreed upon with the Eligible Lender, and (ii) such financial records fairly present, in all material respects, the financial condition of such entities for the period covered thereby in accordance with U.S. GAAP (if applicable), consistently applied, and that such adjusted EBITDA calculations are true and correct in all material respects.
•Borrowers are expected to submit statements to the Lender as follows:5
◦U.S. GAAP Compliance: Borrowers that are subject to U.S. GAAP reporting requirements or that already prepare their financials in accordance with U.S. GAAP must submit U.S. GAAP-compliant financial records in connection with this certification. Borrowers that do not have to comply with U.S. GAAP and that do not typically prepare their financials in accordance with U.S. GAAP are not required to submit U.S. GAAP compliant financials.
◦Financial Statements: Borrowers that typically prepare audited financial statements must submit audited financial statements. Otherwise Borrowers should submit reviewed financial statements or financial statements prepared for the purpose of filing taxes. If a Borrower does not yet have audited or reviewed financial statements for 2019, the Borrower should use its most recent audited or reviewed financial statements.
◦Consolidation: Borrowers that typically prepare financial statements that consolidate the Borrower with its subsidiaries (but not its parent companies or sister affiliates) must submit such consolidated financial statements. If a Borrower does not typically prepare consolidated financial statements, it is not required to do so, unless so required by the Lender.
•For purposes of the Borrower Certifications and Covenants, “Selected Subsidiaries” means one or more operating subsidiaries selected by the Borrower to provide a guarantee for the Eligible Loan on a joint and several basis, provided that (i) a Borrower is only required to designate Selected Subsidiaries if it is a holding company, all or substantially all of the assets of which comprise equity interests in other entities; (ii) each Selected Subsidiary must itself be eligible to borrow under the Facility’s eligibility criteria; (iii) the aggregate adjusted 2019 EBITDA of the Selected Subsidiaries must be used to calculate the Borrower’s maximum loan size under the Facility (in addition to the other tests, as applicable); and (iv) if the Eligible Loan is secured, then the Selected Subsidiaries’ guarantees are also secured.
4.B. Unsecured Eligible Loans – Pari Passu. The Borrower must certify that, if the Eligible Loan is unsecured, then the Borrower’s other Loans or Debt Instruments (other than Mortgage Debt) are
5 The same framework should be applied to the Borrower’s affiliates or Selected Subsidiaries, where applicable.


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unsecured at the time of origination of the Eligible Loan, as well. For purposes of this certification, the “Borrower’s other Loans or Debt Instruments” shall be read to include the Loans or Debt Instruments of the Selected Subsidiaries, if any, on an aggregate basis.
•For purposes of the Borrower Certifications and Covenants:
◦“Loans or Debt Instruments” means debt for borrowed money and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, and all guarantees of the foregoing.
◦“Mortgage Debt” means (i) debt secured by real property at the time of the Eligible Loan’s origination; and (ii) limited recourse equipment financings (including equipment capital or finance leasing and purchase money equipment loans) secured only by the acquired equipment.
4.C. Secured Eligible Loans – Valuations and Calculations. The Borrower must certify that, if the Eligible Loan is secured, then the Borrower has provided the Eligible Lender with (i) good faith valuations of any collateral security for the Eligible Loan (including security for the Selected Subsidiaries’ guarantees, if applicable) at the time of origination of the Eligible Loan, (ii) good faith valuations of any collateral security for each of the Borrower’s other Loans or Debt Instruments (other than Mortgage Debt) at the time of origination of the Eligible Loan, (iii) good faith calculation of the outstanding aggregate principal amount of each of the Borrower’s other Loans or Debt Instruments (other than Mortgage Debt) at the time of origination of the Eligible Loan, and (iv) confirmation as to whether any collateral security for the Eligible Loan (including security for the Selected Subsidiaries’ guarantees, if applicable) is Shared Collateral (all of the foregoing, “Lien and Collateral Valuation Reporting”). For purposes of this certification, the “Borrower’s other Loans or Debt Instruments” shall be read to include the Loans or Debt Instruments of the Selected Subsidiaries, if any, on an aggregate basis.
•For purposes of the Borrower Certifications and Covenants, “Shared Collateral” means any collateral security for the Eligible Loan (including security for the Selected Subsidiaries’ guarantees, if applicable) that is also collateral security for any of the Borrower’s other Loans or Debt Instruments (other than Mortgage Debt).
4.D. Secured Eligible Loans – Shared Collateral. The Borrower must certify that, if the Eligible Loan is secured, then the Borrower has no knowledge or reason to believe that the lien of the Eligible Lender in any Shared Collateral is not senior to or pari passu with the lien on such Shared Collateral that secures any of the Borrower’s other Loans or Debt Instruments (other than Mortgage Debt). For purposes of this certification, the “Borrower’s other Loans or Debt Instruments” shall be read to include the Loans or Debt Instruments of the Selected Subsidiaries, if any, on an aggregate basis.
5.    Additional Borrower Certifications and Covenants.
5.A. Prohibition on Early Repayment of Other Debt. The Borrower must commit that it will not repay the principal balance of, or pay any interest on, any debt, unless the principal or interest payment is mandatory and due, until (i) the Eligible Loan is repaid in full or (ii) neither the SPV nor a Governmental Assignee holds an interest in the Eligible Loan in any capacity. This restriction shall apply only to other debt for borrowed money of the Borrower. The Borrower may, however, at the time of origination of the Eligible Loan, use the proceeds of the Eligible Loan to refinance existing debt owed by the Borrower to a lender that is not the Eligible Lender or an affiliate of the Eligible Lender.
•For purposes of the Borrower Certifications and Covenants, “Governmental Assignee” means any of the following entities, if the SPV’s interest in the Eligible Loan is transferred or assigned

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to such entity: any Federal Reserve Bank, any vehicle authorized to be established by the Board or any Federal Reserve Bank, any entity created by an act of the United States Congress, or any vehicle established or acquired by the Department of the Treasury or any other department or agency of the Federal government of the United States.
•Mandatory and Due. With respect to debt that predates the Eligible Loan, principal and interest payments are “mandatory and due” on the future date upon which they were scheduled to be paid as of the date of origination of the Eligible Loan, or upon the occurrence of an event that automatically triggers mandatory prepayments under a contract for indebtedness that the Borrower executed prior to the date of origination of the Eligible Loan, except that any such prepayments triggered by the incurrence of new debt can only be paid at the time of origination or if such prepayments are de minimis. For the avoidance of doubt, the Borrower may continue to pay, and the Lender may request that the Borrower pay, interest or principal payments on outstanding debt on (or after) the payment due date, provided that the payment due date was scheduled prior to the date of origination of the Eligible Loan. The Borrower may not pay, and the Lender may not request that the Borrower pay, interest or principal payments on such debt ahead of schedule during the life of the Eligible Loan, unless required by a mandatory prepayment clause as specifically permitted above. For future debt incurred by the Borrower in compliance with the terms and conditions of the Eligible Loan, principal and interest payments are “mandatory and due” on their scheduled dates or upon the occurrence of an event that automatically triggers mandatory prepayments.
•Safe Harbor. The foregoing Prohibition on Early Repayment of Other Debt would not prohibit the Borrower from undertaking any of the following actions during the term of the Eligible Loan:
◦repaying a line of credit (including a credit card) in accordance with the Borrower’s normal course of business usage for such line of credit;
◦taking on and paying additional debt obligations required in the normal course of business and on standard terms, including inventory and equipment financing, provided that such debt is secured only by the newly acquired property (e.g., inventory or equipment), and, apart from such security, is of equal or lower priority than the Eligible Loan; or
◦refinancing debt that is maturing no later than 90 days from the date of such refinancing.
5.B. Prohibition on Early Cancellation or Reduction of Other Existing Credit Lines. The Borrower must commit that it will not seek to cancel or reduce any of its committed lines of credit with the Eligible Lender or any other lender until (i) the Eligible Loan is repaid in full or (ii) neither the SPV nor a Governmental Assignee holds an interest in the Eligible Loan in any capacity.
•Safe Harbor. The safe harbor to the Prohibition on Early Repayment of Other Debt is also a safe harbor to the Prohibition on Early Cancellation or Reduction of Other Existing Credit Lines.
5.C. Ability to Meet Financial Obligations for 90 Days. The Borrower must certify that it has a reasonable basis to believe that, as of the date of origination of the Eligible Loan and after giving effect to the Eligible Loan, the Borrower has the ability to meet its financial obligations for at least the next 90 days and does not expect to file for bankruptcy during that time period. In order to make this certification,


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the Borrower must determine that, in addition to the foregoing, after receiving the Eligible Loan, it expects to be able to pay its undisputed debts that (i) are due as of the date hereof and (ii) become due during the 90 days following the date hereof.
5.D.Use of Proceeds. If the Borrower is a subsidiary of a foreign company, the Borrower must commit that it will use the proceeds of the Eligible Loan only for the benefit of the Borrower, its consolidated U.S. subsidiaries, and other affiliates of the Borrower that are U.S. businesses. The proceeds of the Eligible Loan may not be used for the benefit of the Borrower’s foreign parents, affiliates, or subsidiaries.
5.E.Previous Use of the Facility by the Borrower. The Borrower must certify that it has informed the Eligible Lender if it has previously received, or has a pending application to receive, funds in connection with any Main Street Facility, as well as the value of such funding. The Borrower is subject to the maximum loan size limitations of the Facility on an entity-basis, rather than on a loan basis. That is, if the Borrower receives more than one loan under the Facility, the sum of those loans cannot exceed the permissible maximum loan size of the Facility.
5.F.Previous Use of Other Credit Programs by Affiliates. The Borrower must certify that, to its knowledge after reasonable diligence, none of its affiliates has accessed the Main Street New Loan Facility, the Main Street Expanded Loan Facility, or the Primary Market Corporate Credit Facility. It must also certify that it has informed the Eligible Lender if, after reasonable diligence, it has determined that any of its affiliates has previously received, or has a pending application to receive, funds in connection with any Main Street Facility, as well as the value of such funding. An affiliated group of companies can participate in only one Main Street Facility and may not participate in both a Main Street Facility and the Primary Market Corporate Credit Facility. In no case can an affiliated group’s total participation in the Facility exceed the maximum loan size that the affiliated group is eligible to receive on a consolidated basis. As result, the Borrower’s maximum loan size is limited by its own leverage level, the leverage level of the affiliated group on a consolidated basis, and the size of any loan extended to other affiliates in the group.
5.G.Use of the Facility by Borrower That Is a Holding Company. If (and only if) the Borrower is a company, all or substantially all of the assets of which comprise equity interests in other entities, then the Borrower must certify that (i) the Eligible Loan is fully guaranteed on a joint and several basis by its Selected Subsidiaries and (ii) if the Eligible Loan is secured, then the Selected Subsidiaries’ guarantees are also secured.
6.    Indemnity. The certifications and covenants shall also include an indemnification by the Borrower of the
beneficiaries of such certifications and covenants for any liability, claim, cost, loss, judgment, damage or expense that a beneficiary incurs or suffers as a result of or arising out of a material breach of any of the Borrower’s certifications or covenants contained in such document.

FORM CERTIFICATIONS AND COVENANTS: The form certifications and covenants are provided on the next page.


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MAIN STREET PRIORITY LOAN FACILITY
FORM OF BORROWER CERTIFICATIONS AND COVENANTS
Reference is made to the Main Street Priority Loan Facility (the “Facility”), which has been authorized under section 13(3) of the Federal Reserve Act (the “FRA”). Under the Facility, the Federal Reserve Bank of Boston (the “Reserve Bank”), acting under the direction of the Board of Governors of the Federal Reserve System (the “Board” and, together with the twelve Federal Reserve Banks, the “Federal Reserve”), has committed to lend to a special purpose vehicle, MS Facilities LLC, a Delaware limited liability company (the “SPV”), on a recourse basis. The SPV will purchase 95 percent participations in certain eligible loans made by eligible lenders to eligible borrowers. Eligible lenders will retain 5 percent of each such eligible loan. The Secretary of the Treasury (“Secretary”) has committed funds appropriated to the Exchange Stabilization Fund under section 4027 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to the SPV in connection with the Facility, the Main Street New Loan Facility, and the Main Street Expanded Loan Facility (each, a “Main Street Facility”).
Reference is further made to the Main Street Priority Loan Facility Borrower Certifications and Covenants Instructions and Guidance (the “Instructions”) immediately preceding these Main Street Priority Loan Facility Borrower Certifications and Covenants.
I, the undersigned principal executive officer or principal financial officer, or other authorized officer performing similar functions of the borrower named below (the “Borrower”), in such capacity, make these certifications and covenants (these “Borrower Certifications and Covenants”) to the SPV, the lender named below as the eligible lender (the “Eligible Lender”) with respect to the eligible loan to be made to the Borrower under the Facility (the “Eligible Loan”), the Reserve Bank, the Board, and the Secretary (each, a “Beneficiary” and, collectively, the “Beneficiaries”) in connection with Borrower’s participation in the Facility.
I hereby confirm that I have the full power and authority to make the following certifications and covenants on behalf of the Borrower and that the Borrower has the full power and authority to enter into, deliver, and perform the following covenants, agreements, and undertakings, and that such covenants, agreements, and undertakings (i) have been duly and validly authorized, executed, and delivered by the Borrower and (ii) are the legal, valid, and binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, except that such enforceability against the Borrower may be limited by bankruptcy, insolvency, or other similar laws of general applicability affecting the enforcement of creditors’ rights generally and by a court’s discretion in relation to equitable remedies. I also hereby confirm that I have consulted with such other officers, employees, and advisors of the Borrower as I have deemed appropriate, and made such other investigations and inquiries as I have deemed appropriate, in order to make the following certifications, covenants, and agreements.
1.    Facility Borrower Eligibility Certifications and Covenants. In connection with Borrower’s proposed
participation in the Facility, I hereby:
1.A.certify that, as of the date hereof, the Borrower is a Business (as defined in the Instructions);
1.B.certify that the Borrower was established (as defined in the Instructions) prior to March 13, 2020;
1.C.certify that, as of the date hereof, after reasonable, good faith diligence (as explained in the Instructions), the Borrower has no reason to believe that it is an Ineligible Business (as defined in the Instructions);
1.D.certify that, as of the date hereof, the Borrower (when aggregated with its affiliates in accordance with the Instructions) meets at least one of the following two conditions: (i) has 15,000 employees or fewer, or (ii) had 2019 annual revenues of $5 billion or less; and

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1.E. certify that, as of the date hereof, the Borrower has not also participated in, and covenant and agree that the Borrower will not seek to participate simultaneously in, the Main Street New Loan Facility, the Main Street Expanded Loan Facility, or the Primary Market Corporate Credit Facility.
2.    CARES Act Borrower Eligibility Certifications and Covenants. In connection with Borrower’s proposed participation in the Facility, I hereby:
2.A.certify that, as of the date hereof, the Borrower has not received specific support pursuant to the Coronavirus Economic Stabilization Act of 2020 (Subtitle A of Title IV of the CARES Act);
2.B.certify that, as of the date hereof, the Borrower is created or organized in the United States or under the laws of the United States with significant operations in and a majority of its employees based in the United States, consistent with section 4003(c)(3)(C) of the CARES Act;
2.C.certify that, as of the date hereof, to the best of my knowledge and based on reasonable diligence (as explained in the Instructions), the Borrower is not a Covered Entity (as defined in the Instructions); and
2.D.covenant and agree that the Borrower will comply with the compensation, stock repurchase, and capital distribution restrictions that apply to direct loan programs under section 4003(c)(3)(A)(ii) of the CARES Act, except that an S corporation or other tax pass-through entity that is a Borrower may make distributions to the extent reasonably required to cover its owners’ tax obligations in respect of the Borrower’s earnings.
3. FRA and Regulation A Borrower Eligibility Certifications. In connection with Borrower’s proposed participation in the Facility, I hereby certify, as of the date hereof, that the Borrower:
3.A.is unable to secure adequate credit accommodations from other banking institutions, consistent with 12 CFR 201.4(d)(8); and
3.B.is not Insolvent (as defined in the Instructions), consistent with 12 CFR 201.4(d)(5).
4.    Eligible Loan Certifications. In connection with the Borrower’s proposed participation in the Facility, I hereby certify that:
4.A.(i) the Borrower has provided financial records to the Eligible Lender and a calculation of the Borrower’s (and, if relevant, the Borrower’s affiliates’ and Selected Subsidiaries’ (as defined in the Instructions)) adjusted 2019 earnings before interest, taxes, depreciation, and amortization (“EBITDA”), reflecting only those adjustments permitted pursuant to the methodology agreed upon with the Eligible Lender, and (ii) such financial records fairly present, in all material respects, the financial condition of such entities for the period covered thereby in accordance with U.S. Generally Accepted Accounting Principles (if applicable), consistently applied, and that such adjusted EBITDA calculations are true and correct in all material respects;
4.B.if the Eligible Loan is unsecured, the Borrower’s other Loans or Debt Instruments (as defined in the Instructions), other than Mortgage Debt (as defined in the Instructions), are unsecured at the time of origination of the Eligible Loan;
4.C.if the Eligible Loan is secured, the Borrower has provided the Eligible Lender with (i) good faith valuations of any collateral security for the Eligible Loan (including security for the Selected Subsidiaries’ guarantees, if applicable) at the time of origination of the Eligible Loan, (ii) good faith valuations of any collateral security for each of the Borrower’s other Loans or Debt Instruments (other than Mortgage Debt) at the time of origination of the Eligible Loan, (iii) good faith calculation of the outstanding aggregate principal amount of each of the Borrower’s other Loans or Debt Instruments (other than Mortgage Debt) at the time of origination of the Eligible Loan and (iv) confirmation as to whether any collateral security for the
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Eligible Loan (including security for the Selected Subsidiaries’ guarantees, if applicable) is Shared Collateral (as defined in the Instructions); and
4.D. if the Eligible Loan is secured, I have no knowledge or reason to believe that the lien of the Eligible Lender in any Shared Collateral is not senior to or pari passu with the lien on such Shared Collateral securing any of the Borrower’s other Loans or Debt Instruments, other than Mortgage Debt.
5. Additional Borrower Certifications and Covenants. In connection with the Borrower’s proposed participation in the Facility, I hereby:
5.A.covenant and agree that the Borrower will not repay the principal balance of, or pay any interest on, any debt unless the principal or interest payment is mandatory and due, until (i) the Eligible Loan is repaid in full or (ii) neither the SPV nor a Governmental Assignee (as defined in the Instructions) holds an interest in the Eligible Loan in any capacity, provided that the Borrower may, at the time of origination of the Eligible Loan, refinance existing debt owed by the Borrower to a lender that is not the Eligible Lender;
5.B.covenant and agree that the Borrower will not seek to cancel or reduce any of its committed lines of credit with the Eligible Lender or any other lender until (i) the Eligible Loan is repaid in full or (ii) neither the SPV nor a Governmental Assignee holds an interest in the Eligible Loan in any capacity;
5.C.certify that, as of the date hereof, I have a reasonable basis to believe that, after giving effect to the Eligible Loan, the Borrower has the ability to meet its financial obligations for at least the next 90 days and does not expect to file for bankruptcy during that time period;
5.D.covenant and agree that, if the Borrower is a subsidiary of a foreign company, the Borrower will use the proceeds of the Eligible Loan only for the benefit of the Borrower, its consolidated U.S. subsidiaries, and other affiliates of the Borrower that are U.S. businesses, and not for the benefit of the Borrower’s foreign parents, affiliates, or subsidiaries;
5.E.certify that I have informed the Eligible Lender if, as of the date hereof, the Borrower has previously received, or has a pending application to receive, funds in connection with any Main Street Facility, as well as the value of such funding;
5.F.certify that, to my knowledge after reasonable diligence, none of the Borrower’s affiliates has accessed the Main Street New Loan Facility, the Main Street Expanded Loan Facility, or the Primary Market Corporate Credit Facility as of the date hereof, and the Borrower has informed the Eligible Lender if, after reasonable diligence, it has determined that any of its affiliates has previously received, or has a pending application to receive, funds in connection with the Facility, as well as the value of such funding; and
5.G.certify that, if (and only if) the Borrower is, as of the date hereof, a company, all or substantially all of the assets of which comprise equity interests in other entities, then (i) the Eligible Loan is fully guaranteed on a joint and several basis by its Selected Subsidiaries and (ii) if the Eligible Loan is secured, then the Selected Subsidiaries’ guarantees are also secured.
6. Indemnification. The Borrower shall indemnify, defend, and hold each Beneficiary and its officers, directors, agents, partners, members, controlling entities, and employees (collectively, “Indemnitees”) harmless from and against any liability, claim, cost, loss, judgment, damage, or expense (including reasonable attorneys’ fees and expenses) that any Indemnitee incurs or suffers as a result of or arising out of a material


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breach of any of Borrower’s representations, warranties, covenants, or agreements in these Borrower Certifications and Covenants.
7. Miscellaneous.
7.A.I further covenant and agree that the Borrower will promptly notify the Eligible Lender of any material misrepresentation with respect to any certification hereunder and any material breach of any covenant made hereunder during the time in which the Eligible Loan is outstanding and the SPV, or any Governmental Assignee, holds an interest in the Eligible Loan, and for one year after the Eligible Loan is no longer owned in any capacity by the SPV or any other Governmental Assignee.
7.B.I acknowledge that, if this certification includes a knowing material misrepresentation, in addition to all remedies available at law, in equity or otherwise, the SPV, the Reserve Bank, the Board, or the Secretary may refer the matter to the relevant law enforcement authorities for investigation and possible action in accordance with applicable criminal and civil law. See, e.g., 18 U.S.C. § 1001; 31 U.S.C. § 3729.
7.C.I further acknowledge that, the Eligible Loan and any other financial assistance provided to the Borrower through the Facility would promptly become due and payable upon discovery of a material misrepresentation or material breach of covenant related to Section 2 (CARES Act Borrower Eligibility Certifications and Covenants) or Section 3 (FRA and Regulation A Borrower Eligibility Certifications) of these Borrower Certifications and Covenants.
7.D.I further acknowledge that the Reserve Bank, the Board, the Department of the Treasury, and any Governmental Assignee or agency of the Federal government associated with such Governmental Assignee may make public and nonpublic disclosures with respect to the Facility including, without limitation, those required under applicable law. These disclosures may include the identity of the Borrower; the date and amount of the loan provided to the Borrower through the Main Street Facilities; the form in which the loan was provided to the Borrower; material terms of such loan; and other information. In addition, the SPV or the managing member of the SPV may make disclosures of information that it receives from and about the Borrower in connection with the Facility to the Reserve Bank, the Board, the Department of the Treasury, and any Governmental Assignee or agency of the Federal government associated with such Governmental Assignee. On behalf of the Borrower, I consent to such disclosures.
7.E.I covenant and agree that the Borrower will retain records (the “File”) containing the basis for the certifications in Section 2 (CARES Act Borrower Eligibility Certifications and Covenants) and compliance with the covenant therein, and will make such information available to the Reserve Bank as promptly as practicable upon request of the Reserve Bank, either as (i) a copy of the File for the Reserve Bank’s own inspection or review or (ii) an attestation by an external auditor that the auditor has examined the File and has found it sufficient to support the certification and compliance with the related covenant. If the Borrower submits an attestation by an external auditor, the Reserve Bank reserves the right to request a copy of the File for its own inspection or review. The Borrower will retain the File for a period of 10 years following the termination of all of the Main Street Facilities, or for the period of time required by the Borrower’s document retention policies, whichever is longer.
The illegality, invalidity or unenforceability of any provision of these Borrower Certifications and Covenants under the law of any jurisdiction shall not affect its legality, validity, or enforceability under the law of any other jurisdiction or the legality, validity, or enforceability of any other provision.
THESE BORROWER CERTIFICATIONS AND COVENANTS, THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND BENEFICIARIES UNDER THESE BORROWER CERTIFICATIONS AND COVENANTS

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AND ANY CLAIM OR CONTROVERSY DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THESE BORROWER CERTIFICATIONS AND COVENANTS OR THE TRANSACTION (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL IN ALL RESPECTS BE GOVERNED BY AND INTERPRETED, CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION THEREOF THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION).
The Borrower irrevocably and unconditionally submits to and accepts the non-exclusive jurisdiction of the United States District Court for the District of Massachusetts located in the City of Boston or the courts of the Commonwealth of Massachusetts located in the County of Suffolk for any action, suit, or proceeding arising out of or based upon these Borrower Certifications and Covenants or any matter relating to them and waives any objection that it may have to the laying of venue in any such court or that any such court is an inconvenient forum or does not have personal jurisdiction over it.
These Borrower Certifications and Covenants may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. These Borrower Certifications and Covenants shall become effective when it shall have been duly executed and delivered by the undersigned officers of the Borrower. The words “executed,” signed,” “signature,” and words of like import as used above and elsewhere in these Borrower Certifications and Covenants may include, in addition to manually executed signatures, images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif”, or “jpg”) and other electronic signatures (including, without limitation, any electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
Name of the Borrower: NUVERRA ENVIRONMENTAL SOLUTIONS, INC.

Name of the Lender: FIRST INTERNATIONAL BANK & TRUST

On behalf of the Borrower:

By: /s/ Charles Thompson By:
/s/ Eric Bauer
Name:
Charles Thompson
Name: Eric Bauer
Title:
CEO
Title: CFO
Date:
11/16/20
Date: 11/16/20

17

Exhibit 10.4
PROMISSORY NOTE
(Real Estate)
$10,000,000.00
Watford City, North Dakota
November 13, 2020
        
FOR VALUE RECEIVED, NUVERRA ENVIRONMENTAL SOLUTIONS, INC., a Delaware corporation (the “Borrower”), hereby promises to pay to the order of FIRST INTERNATIONAL BANK & TRUST, a North Dakota banking corporation, its successors and assigns (the “Lender”), the principal sum of Ten Million and 00/100 Dollars ($10,000,000.00), or so much thereof as has been advanced to or for the benefit of the Borrower pursuant to the terms and conditions of that certain Loan Agreement of even date herewith between Lender and Borrower (“Loan Agreement”; any capitalized term used and not otherwise defined herein shall have the same meaning as given to it in the Loan Agreement), in lawful money of the United States and immediately available funds, together with interest on the unpaid balance accruing as of the date hereof at a per annum rate equal to 4.50% per annum in excess of the three (3) year Federal Home Loan Bank Rate of Des Moines for amortizing advances as of the date hereof.
The interest rate shall be adjusted every three (3) years for the term hereof to be equal to a per annum rate of 4.50% per annum in excess of the three (3) year Federal Home Loan Bank Rate of Des Moines for amortizing advances as of such date, with the first adjustment on November 14, 2023 and subsequent adjustments on November 14, 2026, November 14, 2029 and finally on November 14, 2032. In no event shall the interest rate be less than 6.50% per annum.
Commencing on December 1, 2020 and on the first day of each month thereafter through the Maturity Date (as later defined), monthly installments of principal and interest shall be made by Borrower to Lender, with such monthly payment to be calculated by Lender on an assumed amortization period of twelve (12) years. The remaining amount of principal plus accrued interest hereon shall be due and payable on November 13, 2032 (the “Maturity Date”).
In all cases interest on this Note shall be calculated on the basis of a 360 day year but charged for actual days principal is unpaid.
In the event Borrower prepays the principal balance of the Note (whether in full or in part) prior to the sixth (6th) anniversary date of the Loan Agreement (due to a sale of the Property, a refinancing by a lender other than Lender or any other reason), the following prepayment premium shall apply and shall be due and payable by Borrower to Lender at the time of such prepayment:
1.Year 1: Six percent (6.00%) of the outstanding principal balance of the Note.
2.Year 2: Five percent (5.00%) of the outstanding principal balance of the Note.
3.Year 3: Four percent (4.00%) of the outstanding principal balance of the Note.
4.Year 4: Three percent (3.00%) of the outstanding principal balance of the Note.
5.Year 5: Two percent (2.00%) of the outstanding principal balance of the Note.


6.Year 6: One percent (1.00%) of the outstanding principal balance of the Note.

The Borrower is not permitted to prepay this Promissory Note more than Five percent (5.00%) per calendar year without Lender’s prior written approval, such approval to be given in its sole discretion.

If any installment of interest on this Note, including the payment required on the Maturity Date is not paid within ten (10) days of the due date thereof, the Borrower shall pay to the Lender a late charge equal to five percent (5.00%) of the amount of such installment.
Notwithstanding anything to the contrary contained herein, at all times in which an Event of Default has occurred and is continuing hereunder, interest shall accrue on amounts outstanding hereunder at a rate equal to two percent (2.00%) per annum in excess of the rate otherwise payable hereunder (the “Default Rate”).
All payments and prepayments shall, at the option of the Lender, be applied first to any costs of collection, second to any late charges, third to any prepayment premium, fourth to accrued interest on this Note, and lastly to principal in direct order of scheduled maturities.
Notwithstanding anything to the contrary contained herein, if the rate of interest, late payment fee or any other charges or fees due hereunder are determined by a court of competent jurisdiction to be usurious, then said interest rate, fees and/or charges shall be reduced to the maximum amount permissible under applicable North Dakota law.
This Note is secured by the Collateral and Guaranty, and the Lender is entitled to all of the benefits provided for therein.
Upon the occurrence and the continuance of an Event of Default under this Note or under any other obligation of Borrower to Lender as set forth in the Loan Agreement, the outstanding principal balance hereof and accrued interest and all other amounts due hereon shall, at the option of the Lender, become immediately due and payable, without notice or demand.
Upon the occurrence and the continuance of an Event of Default hereunder or under the Loan Agreement, the Lender shall have the right to set off any and all amounts due hereunder by the Borrower to the Lender against any indebtedness or obligation of the Lender to the Borrower.
Upon the occurrence at any time of an Event of Default or at any time thereafter, the Borrower promises to pay all costs of collection of this Note, including but not limited to reasonable and documented attorneys’ fees, paid or incurred by the Lender on account of such collection, whether or not suit is filed with respect thereto and whether such cost or expense is paid or incurred, or to be paid or incurred, prior to or after the entry of judgment.
Demand, presentment, protest and notice of nonpayment and dishonor of this Note are hereby waived. This Note shall be governed by and construed in accordance with the laws of the State of North Dakota.
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The Borrower hereby irrevocably submits to the jurisdiction of any North Dakota state court or federal court over any action or proceeding arising out of or relating to this Note, the Loan Agreement and any instrument, agreement or document related hereto or thereto, and the Borrower hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such North Dakota state or federal court. The Borrower hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The Borrower irrevocably consents to the service of copies of the summons and complaint and any other process which may be served in any such action or proceeding by the mailing by United States certified mail, return receipt requested, of copies of such process to the Borrower’s last known address. The Borrower agrees that judgment final by appeal, or expiration of time to appeal without an appeal being taken, in any such action or proceeding shall be conclusive and may be enforced in any other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this paragraph shall affect the right of the Lender to serve legal process personally on the Borrower in any other manner permitted by law or affect the right of the Lender to bring any action or proceeding against the Borrower or its property in the courts of any other jurisdiction to the extent permitted by law.
[Remainder of page left blank intentionally.]


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BORROWER:

NUVERRA ENVIRONMENTAL SOLUTIONS, INC.,
a Delaware corporation


By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            



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Exhibit 10.5
PROMISSORY NOTE
(Operating Line of Credit Loan)
$5,000,000.00
Watford City, North Dakota
November 13, 2020
        
FOR VALUE RECEIVED, NUVERRA ENVIRONMENTAL SOLUTIONS, INC., a Delaware corporation (the “Borrower”), hereby promises to pay to the order of FIRST INTERNATIONAL BANK & TRUST, a North Dakota banking corporation, its successors and assigns (the “Lender”), the principal sum of up to Five Million and 00/100 Dollars ($5,000,000.00), or so much thereof as has been advanced to or for the benefit of the Borrower pursuant to the terms and conditions of that certain Loan Agreement of even date herewith between Lender and Borrower (“Loan Agreement”; any capitalized term used and not otherwise defined herein shall have the same meaning as given to it in the Loan Agreement), in lawful money of the United States and immediately available funds, together with interest on the unpaid balance accruing on all advances made hereunder as of the date hereof at a variable rate of interest described below.
The unpaid principal balance on any advances made under this Promissory Note (this "Note") shall bear interest at a floating rate of interest equal to three and seventy five one-hundredth percent (3.75%) per annum in excess of the Prime Rate of Interest (as hereinafter defined). The term "Prime Rate of Interest" shall mean the prime rate of interest for U.S. Banks as published in the "Money Rates" section of The Wall Street Journal as the "Prime Rate." If a range is shown for the Prime Rate of Interest, then the highest number in the range shall be utilized. Even though the Prime Rate of Interest may be published subsequent to its effective date, the actual effective date shall be the date utilized to determine whether and when there has been a change in the Prime Rate of Interest. The rate of interest charged on this Note shall initially be determined as of the date of this Note and shall, thereafter, be adjusted daily, or as and when on the same day that the Prime Rate of Interest changes (each such day being referred to as an "Interest Adjustment Date"). All such adjustments to the Prime Rate of Interest shall be made and become effective as of the Interest Adjustment Date and the Prime Rate of Interest as adjusted shall remain in effect until and including the day immediately preceding the next Interest Adjustment Date. If the Prime Rate of Interest is no longer published in The Wall Street Journal, then the term "Prime Rate of Interest" shall mean the rate of interest announced by the Lender as its prime rate. If the Prime Rate of Interest is no longer published in The Wall Street Journal or announced by the Lender, then the Prime Rate of Interest shall be a substantially comparable index selected by the Lender in its sole discretion after giving due consideration to the then-prevailing market convention for such rate. Interest shall be calculated on the basis of the actual number of days elapsed and a 360 day year. In no event shall the interest rate be less than 7.00% per annum.
Commencing on December 1, 2020 and on the first day of each month thereafter through the Maturity Date (as later defined), monthly installments of accrued interest on all sums advanced hereunder shall be made by Borrower to Lender. The full amount of principal plus accrued interest hereon shall be due and payable on November 14, 2021 (the “Maturity Date”).
In all cases interest on this Note shall be calculated on the basis of a 360 day year but charged for actual days principal is unpaid.




If any installment of interest on this Note, including the payment required on the Maturity Date is not paid within ten (10) days of the due date thereof, the Borrower shall pay to the Lender a late charge equal to five percent (5.00%) of the amount of such installment.
Notwithstanding anything to the contrary contained herein, at all times in which an Event of Default has occurred and is continuing hereunder, interest shall accrue on amounts outstanding hereunder at a rate equal to two percent (2.00%) per annum in excess of the rate otherwise payable hereunder (the “Default Rate”).
All payments and prepayments shall, at the option of the Lender, be applied first to any costs of collection, second to any late charges, third to any prepayment premium, fourth to accrued interest on this Note, and lastly to principal.
Notwithstanding anything to the contrary contained herein, if the rate of interest, late payment fee or any other charges or fees due hereunder are determined by a court of competent jurisdiction to be usurious, then said interest rate, fees and/or charges shall be reduced to the maximum amount permissible under applicable North Dakota law.
This Note is secured by the Collateral and Guaranty, and the Lender is entitled to all of the benefits provided for therein.
Upon the occurrence and the continuance of an Event of Default under this Note or under any other obligation of Borrower to Lender as set forth in the Loan Agreement, the outstanding principal balance hereof and accrued interest and all other amounts due hereon shall, at the option of the Lender, become immediately due and payable, without notice or demand.
Upon the occurrence and the continuance of an Event of Default hereunder or under the Loan Agreement, the Lender shall have the right to set off any and all amounts due hereunder by the Borrower to the Lender against any indebtedness or obligation of the Lender to the Borrower.
Upon the occurrence at any time of an Event of Default or at any time thereafter, the Borrower promises to pay all costs of collection of this Note, including but not limited to reasonable and documented attorneys’ fees, paid or incurred by the Lender on account of such collection, whether or not suit is filed with respect thereto and whether such cost or expense is paid or incurred, or to be paid or incurred, prior to or after the entry of judgment.
Demand, presentment, protest and notice of nonpayment and dishonor of this Note are hereby waived. This Note shall be governed by and construed in accordance with the laws of the State of North Dakota.
The Borrower hereby irrevocably submits to the jurisdiction of any North Dakota state court or federal court over any action or proceeding arising out of or relating to this Note, the Loan Agreement and any instrument, agreement or document related hereto or thereto, and the Borrower hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such North Dakota state or federal court. The Borrower hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The Borrower irrevocably consents to the service of copies of the summons and complaint and any other process which may be served in any such action or proceeding by the mailing by United States certified mail, return receipt requested, of copies of such process to the Borrower’s last known address. The Borrower agrees that judgment final by appeal, or expiration of time to appeal without an appeal being taken, in
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any such action or proceeding shall be conclusive and may be enforced in any other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this paragraph shall affect the right of the Lender to serve legal process personally on the Borrower in any other manner permitted by law or affect the right of the Lender to bring any action or proceeding against the Borrower or its property in the courts of any other jurisdiction to the extent permitted by law.
[Remainder of page left blank intentionally.]



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BORROWER:

NUVERRA ENVIRONMENTAL SOLUTIONS, INC.,
a Delaware corporation


By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            



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Exhibit 10.6
PROMISSORY NOTE
(Letter of Credit Loan)
$4,839,000.00
Watford City, North Dakota
November 18, 2020
    
FOR VALUE RECEIVED, NUVERRA ENVIRONMENTAL SOLUTIONS, INC., a Delaware corporation (the “Borrower”), hereby promises to pay to the order of FIRST INTERNATIONAL BANK & TRUST, a North Dakota banking corporation, its successors and assigns (the “Lender”), the principal sum of Four Million Eight Hundred Thirty- Nine Thousand and 00/100 Dollars ($4,839,000.00), or so much thereof as has been advanced to or for the benefit of the Borrower under a Letter of Credit or Letters of Credit pursuant to the terms and conditions of that certain Loan Agreement of even date herewith between Lender and Borrower (“Loan Agreement”; any capitalized term used and not otherwise defined herein shall have the same meaning as given to it in the Loan Agreement), in lawful money of the United States and immediately available funds, together with interest on the unpaid balance accruing on all advances made hereunder as of the date hereof at a variable rate of interest described below.

The unpaid principal balance on any advances made under this Promissory Note (this "Note") shall bear interest at a floating rate of interest equal to three and seventy-five one-hundredth percent (3.75%) per annum in excess of the Prime Rate of Interest (as hereinafter defined). The term "Prime Rate of Interest" shall mean the prime rate of interest for U.S. Banks as published in the "Money Rates" section of The Wall Street Journal as the "Prime Rate." If a range is shown for the Prime Rate of Interest, then the highest number in the range shall be utilized. Even though the Prime Rate of Interest may be published subsequent to its effective date, the actual effective date shall be the date utilized to determine whether and when there has been a change in the Prime Rate of Interest. The rate of interest charged on this Note shall initially be determined as of the date of this Note and shall, thereafter, be adjusted daily, or as and when on the same day that the Prime Rate of Interest changes (each such day being referred to as an "Interest Adjustment Date"). All such adjustments to the Prime Rate of Interest shall be made and become effective as of the Interest Adjustment Date and the Prime Rate of Interest as adjusted shall remain in effect until and including the day immediately preceding the next Interest Adjustment Date. If the Prime Rate of Interest is no longer published in The Wall Street Journal, then the term "Prime Rate of Interest" shall mean the rate of interest announced by the Lender as its prime rate. If the Prime Rate of Interest is no longer published in The Wall Street Journal or announced by the Lender, then the Prime Rate of Interest shall be a substantially comparable index selected by the Lender in its sole discretion after giving due consideration to the then-prevailing market convention for such rate. Interest shall be calculated on the basis of the actual number of days elapsed and a 360 day year. In no event shall the interest rate be less than 7.00% per annum.
Commencing on December 1, 2020 and on the first day of each month thereafter through the Maturity Date (as later defined), monthly installments of accrued interest on all sums advanced under a Letter of Credit or Letters of Credit shall be made by Borrower to Lender. The amount of



principal plus accrued interest hereon shall be due and payable on November 19, 2021 (the “Maturity Date”).
In all cases interest on this Note shall be calculated on the basis of a 360 day year but charged for actual days principal is unpaid.
If any installment of interest on this Note, including the payment required on the Maturity Date is not paid within ten (10) days of the due date thereof, the Borrower shall pay to the Lender a late charge equal to five percent (5.00%) of the amount of such installment.
Notwithstanding anything to the contrary contained herein, at all times in which an Event of Default has occurred and is continuing hereunder, interest shall accrue on amounts outstanding hereunder at a rate equal to two percent (2.00%) per annum in excess of the rate otherwise payable hereunder (the “Default Rate”).
All payments and prepayments shall, at the option of the Lender, be applied first to any costs of collection, second to any late charges, third to any prepayment premium, fourth to accrued interest on this Note, and lastly to principal.
Notwithstanding anything to the contrary contained herein, if the rate of interest, late payment fee or any other charges or fees due hereunder are determined by a court of competent jurisdiction to be usurious, then said interest rate, fees and/or charges shall be reduced to the maximum amount permissible under applicable North Dakota law.
This Note is secured by the Collateral and Guaranty, and the Lender is entitled to all of the benefits provided for therein.
Upon the occurrence and the continuance of an Event of Default under this Note or under any other obligation of Borrower to Lender as set forth in the Loan Agreement, the outstanding principal balance hereof and accrued interest and all other amounts due hereon shall, at the option of the Lender, become immediately due and payable, without notice or demand.
Upon the occurrence and the continuance of an Event of Default hereunder or under the Loan Agreement, the Lender shall have the right to set off any and all amounts due hereunder by the Borrower to the Lender against any indebtedness or obligation of the Lender to the Borrower.
Upon the occurrence at any time of an Event of Default or at any time thereafter, the Borrower promises to pay all costs of collection of this Note, including but not limited to reasonable and documented attorneys’ fees, paid or incurred by the Lender on account of such collection, whether or not suit is filed with respect thereto and whether such cost or expense is paid or incurred, or to be paid or incurred, prior to or after the entry of judgment.
Demand, presentment, protest and notice of nonpayment and dishonor of this Note are hereby waived. This Note shall be governed by and construed in accordance with the laws of the State of North Dakota.
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The Borrower hereby irrevocably submits to the jurisdiction of any North Dakota state court or federal court over any action or proceeding arising out of or relating to this Note, the Loan Agreement and any instrument, agreement or document related hereto or thereto, and the Borrower hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such North Dakota state or federal court. The Borrower hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. The Borrower irrevocably consents to the service of copies of the summons and complaint and any other process which may be served in any such action or proceeding by the mailing by United States certified mail, return receipt requested, of copies of such process to the Borrower’s last known address. The Borrower agrees that judgment final by appeal, or expiration of time to appeal without an appeal being taken, in any such action or proceeding shall be conclusive and may be enforced in any other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this paragraph shall affect the right of the Lender to serve legal process personally on the Borrower in any other manner permitted by law or affect the right of the Lender to bring any action or proceeding against the Borrower or its property in the courts of any other jurisdiction to the extent permitted by law.
[Remainder of page left blank intentionally.]



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BORROWER:

NUVERRA ENVIRONMENTAL SOLUTIONS, INC.,
a Delaware corporation


By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            



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Exhibit 10.7
SECURITY AGREEMENT

THIS SECURITY AGREEMENT, dated as of November 16, 2020 (the “Agreement”), between NUVERRA ENVIRONMENTAL SOLUTIONS, INC., a Delaware corporation (hereinafter referred to as the “Borrower”), and BADLANDS POWER FUELS, LLC, a Delaware limited liability company, BADLANDS POWER FUELS, LLC, a North Dakota limited liability company, LANDTECH ENTERPRISES, L.L.C., a North Dakota limited liability company, IDEAL OILFIELD DISPOSAL, LLC, a North Dakota limited liability company, HECKMANN WATER RESOURCES CORPORATION, a Texas corporation, HECKMANN WATER RESOURCES (CVR), INC., a Texas corporation, 1960 WELL SERVICES, LLC, an Ohio limited liability company, NUVERRA OHIO DISPOSAL LLC, a Delaware limited liability company, CLEARWATER THREE, LLC, an Ohio limited liability company, CLEARWATER FIVE, LLC, an Ohio limited liability company, CLEARWATER SOLUTIONS, LLC, an Ohio limited liability company, and NUVERRA TOTAL SOLUTIONS, LLC, a Delaware limited liability company (hereinafter collectively referred to as the “Guarantors”, and Borrower and Guarantors hereinafter collectively and jointly and severally referred to as the “Debtors”), whose mailing address is 6720 N. Scottsdale Road, Suite 190, Scottsdale, Arizona 85253, and FIRST INTERNATIONAL BANK & TRUST, a North Dakota banking corporation, whose address is 100 N. Main Street, P.O. Box 607, Watford City, North Dakota 58854 (“Secured Party”).
Recitals:
WHEREAS, pursuant to the terms of that certain Loan Agreement (the “Loan Agreement”) dated of even date herewith by and between Borrower and Secured Party, Borrower has requested, and Secured Party has agreed to extend certain loans (the “Loans”) pursuant to the terms and conditions set forth in the Loan Agreement; and

WHEREAS, the Loans are evidenced by certain Promissory Notes (each a “Promissory Note” or collectively the “Promissory Notes”) executed in connection herewith in the original principal amounts of: (a) $10,000,000.00 for a real estate loan; (b) $13,000,000.00 for an equipment loan (the “Equipment Loan”); (c) $5,000,000.00 for an operating line of credit; and (d) $4,839,000.00 to secure obligations under letters of credit (“Letters of Credit”); and

WHEREAS, the Loans are secured by, among other things, that certain Guaranty given by Guarantors to and in favor of Lender (“Guaranty”); and

WHEREAS, the Collateral (defined below) securing the Borrower’s obligations under the Equipment Loan is limited to only Equipment and Motor Vehicles (as each are defined below) and and any proceeds of the foregoing; and

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WHEREAS, pursuant to the terms of the Loan Agreement and as limited by these Recitals, the Debtors are to grant a security interest in favor of Secured Party in and to all of Debtor’s assets, as more fully described in this Agreement.

Agreement:
In consideration of the promises herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Debtors and Secured Party agree as follows:
1.Definitions. All capitalized terms which are not defined herein have the meanings provided for in the Loan Agreement.
1.01    “Accounts”, “Chattel Paper” (including “Tangible Chattel Paper” and “Electronic Chattel Paper”), “Commercial Tort Claims”, “Deposit Accounts”, “Documents”, “Equipment”, “Fixtures”, “General Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter of Credit Rights”, “Motor Vehicles”, “Payment Intangibles”, “Proceeds” and “Supporting Obligations” each have the meaning set forth in the North Dakota Uniform Commercial Code as the same may be amended from time to time, except in such circumstances in which the Collateral is located or the Debtor is organized may prevail.
1.02    “Additional Collateral” means all funds of Debtors on deposit with Secured Party and property of any nature and the cash and non cash proceeds thereof owned by Debtors, or in which Debtors have an interest, which now or hereafter are in the possession and control of Secured Party, including, without limitation, Deposit Accounts.
1.03    “Collateral” means all of Debtors’ tangible and intangible assets, including, but not limited to, the following: (i) Accounts, Chattel Paper (including Tangible Chattel Paper and Electronic Chattel Paper), Commercial Tort Claims, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter of Credit Rights, Motor Vehicles, Payment Intangibles, Proceeds (as defined in the Uniform Commercial Code), Supporting Obligations, books and records (including, but not limited to, manual records, computer runs, print outs, tapes, disks, software, programs, source codes and other computer prepared information and equipment of any kind), all rents, issues and profits of the property located at 525 Parks Drive, Frierson, LA 71017, 13195 26th Street NW, Arnegard, ND 58835, 3711 4th Avenue NE, Watford City, ND 58854, 305 17th Avenue SW, Minot, ND 58701, 11108 32nd Street SW, Dickinson, ND 58601, 7737 Highway 2, Stanley, ND 58784, raw land in Williston, ND 58801, 3549 Warner Road, Fowler, OH 44418, 64036 Wintergreen Road, Lore City, OH 43755, 64000 Endley Road, Cambridge, OH 43725, 10555 Veto Road, Belpre, OH 45714, 7135 FM 31 South, Carthage, TX 75633, and 11942 Veterans Memorial Highway, Reedsville, WV 26547; (ii)
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the Additional Collateral; and (iii) all other tangible and intangible personal property, whether now owned or hereafter acquired, including policies of insurance thereon and all insurance proceeds and unearned premium in connection therewith, together with all accessions, additions to, replacements for and substitutions of Collateral and all cash and non cash Proceeds and products thereof. “General Intangibles” includes all designs, patents, patent rights and applications therefor, trademarks and registrations and applications therefor, trade names, inventions, copyrights and all registrations and applications therefor, license rights, trade secrets, methods, know how, specifications, customer lists, franchises, tax refunds and unearned insurance premiums regardless of any contrary interpretation of such term as now or subsequently used in the North Dakota Uniform Commercial Code, except in such circumstances in which the Collateral is located or the Debtor is organized may prevail; provided that the Collateral shall not include any Excluded Collateral.
1.04     “Excluded Collateral” means (a) any permit, license or agreement entered into by any Debtor (i) to the extent that any such permit, license or agreement or any requirement of law applicable thereto prohibits the creation of a lien thereon, but only to the extent, and for as long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the UCC (as hereinafter defined) or any other requirement of law, (ii) which would be abandoned, invalidated, or unenforceable as a result of the creation of a lien in favor of the Lender or (iii) to the extent that the creation of a lien in favor of the Lender would result in a breach or termination pursuant to the terms of or a default under any such permit, license or agreement (other than to the extent that any such term would be rendered ineffective pursuant to the Section 9-406, 9-407, 9-408 or 9-409 of the UCC or any other applicable law or principles of equity); (b) property owned by any Debtor that is subject to a purchase money lien or a capital lease permitted under this Agreement if the agreement pursuant to which such lien is granted (or in the document providing for such capital lease) prohibits or requires the consent of any person other than such Debtor which has not been obtained as a condition to the creation of any other lien on such equipment; (c) any “intent to use” trademark applications for which a statement of use has not been filed and accepted (but only until such statement is filed and accepted); and (d) any payroll accounts, employee benefit accounts, trust, withholding or fiduciary accounts, and escrow accounts or similar security deposit/cash collateral accounts; in each case of the foregoing so long as any such account is used solely for such indicated purpose and not for any other purpose; provided, further, “Excluded Collateral” shall not include any proceeds, products, substitutions or replacements of Excluded Collateral (unless such proceeds, products, substitutions or replacements would otherwise constitute Excluded Collateral).
1.05    “Event of Default” means any event of default set forth in Section 14 of this Agreement or in any of the Loan Documents.
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1.06    “Loan Documents” has the meaning set forth in the Loan Agreement.
1.07    “Notice Address” means the address for Debtors or Secured Party, as the case may be, set forth in the Loan Agreement.
1.08    “Obligations” means all responsibilities, obligations, undertakings, liabilities and indebtedness of any and every kind and nature, heretofore, now or hereafter owing, arising, due or payable from Debtors to Secured Party, howsoever evidenced, created, incurred, acquired or owing, whether primary, secondary, direct, contingent, fixed, joint and several, joint or several or otherwise, and whether arising under this Agreement or under the Promissory Notes or any of the Loan Documents or any other notes, contracts, guarantees or other agreements heretofore, now or hereafter executed and delivered by Debtors to Secured Party in connection with the Loan Agreement and all amounts owed under any modifications, renewals or extensions of any of the foregoing obligations.
1.09    “Security Interest” means the interest in the Collateral granted by Debtors to Secured Party in this Agreement.
1.10 “Uniform Commercial Code” or “U.C.C.” means the Uniform Commercial Code as presently enacted in the State of North Dakota (the “State”) and as the same may be amended from time to time (the “Uniform Commercial Code”), except in such circumstances in which the Collateral is located or the Debtor is organized may prevail.
2. Grant of Security Interest. Debtors hereby grant to the Secured Party, to secure the payment and performance in full of all of the obligations identified in the Promissory Notes, a security interest in, and pledges and assigns to Secured Party the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds (including casualty insurance proceeds) and products thereof.
3. Authorization to File Financing Statements. Debtors hereby irrevocably authorize Secured Party at any time and from time to time to file in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that (a) indicate the Collateral (i) as all assets of Debtors or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the Uniform Commercial Code of the State or such jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail, and (b) contain any other information required by Article 9 of the Uniform Commercial Code of the State or any other state for the sufficiency or filing office acceptance of any financing statement or amendment, including (i) whether Debtors are an organization, the type of organization and any organization identification number issued to Debtors and, (ii) in the case of a financing statement filed as a fixture filing or indicating Collateral as as-extracted collateral, a sufficient description of real property to which the Collateral relates. Debtors agree to furnish any such information to Secured Party promptly upon request. Debtors also ratify
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their authorization for Secured Party to have filed in any Uniform Commercial Code jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof.
4.Other Actions. Further to insure the attachment, perfection and first priority of, and the ability of Secured Party to enforce its security interest in the Collateral, Debtors agree, in each case at Debtor’s own expense, to take the following actions with respect to the following Collateral:
4.01Notes and Tangible Chattel Paper. If Debtors at any time hold or acquire any notes or tangible chattel paper having an aggregate value or face amount of $250,000.00 or more, Debtors will forthwith endorse, assign and deliver the same to Secured Party, accompanied by such instruments of transfer or assignment duly executed in blank as Secured Party may from time to time specify.
4.02Other Actions as to any and all Collateral. Debtors further agrees to take any other action reasonably requested by Secured Party to insure the attachment, perfection and first priority of, and the ability of Secured Party to enforce, Secured Party’s security interest in any and all of the Collateral including, without limitation, (a) executing, delivering and, where appropriate, filing financing statements and amendments relating thereto under the Uniform Commercial Code, (b) causing Secured Party’s name to be noted as secured party on any certificate of title for a titled good if such notation is a condition to attachment, perfection or priority of, or ability of Secured Party to enforce, Secured Party’s security interest in such Collateral, (c) complying in all material respects with any provision of any statute, regulation or treaty of the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of Secured Party to enforce, Secured Party’s security interest in such Collateral, (d) obtaining governmental and other third party consents and approvals, including without limitation any consent of any licensor, lessor or other person obligated on Collateral, and (e) using commercially reasonable efforts to obtain waivers from mortgagees and landlords in form and substance satisfactory to Secured Party.
5.Relation to Other Security Documents. The provisions of this Agreement supplement the provisions of any real estate mortgage or deed of trust granted by Debtors to Secured Party and securing the payment or performance of any of the Obligations.
6.Representations and Warranties Concerning Debtors Legal Status. Debtors represent and warrant to Secured Party that Debtors’ exact legal name is that indicated on the signature page hereof.
7.Covenants Concerning Debtor’s Legal Status. Debtors covenant with Secured Party as follows: (a) without providing at least 10 days prior written notice to Secured Party, Debtors will not change their names, their places of business or, if more than one, chief executive office, or its mailing address or organizational identification number if it has one, (b) if Debtors do not have organizational identification numbers and later obtain one, Debtors will forthwith notify Secured Party of such organizational identification number, and (c) without providing at
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least 10 days prior written notice to Secured Party, Debtors will not change its type of organization, jurisdiction of organization or other legal structure.
8.Representations and Warranties Concerning Collateral, Etc. Debtors further represent and warrant to Secured Party as follows: (a) Debtors are the owner of their respective Collateral, free from any adverse lien, security interest or other encumbrance, except for the security interest created by this Agreement and any Permitted Lien.
9.Covenants Concerning Collateral, Etc. Debtors further covenant with Secured Party as follows: (a) except for the security interest herein granted and liens permitted by the Loan Agreement (including, any Permitted Liens), Debtors will be the owner of the Collateral free from any lien, security interest or other encumbrance, and Debtors will defend the same against all claims and demands of all persons at any time claiming the same or any interests therein adverse to Secured Party, (b) except for Permitted Liens, Debtors will not pledge, mortgage or create, or suffer to exist a security interest in the Collateral in favor of any person other than Secured Party, (c) Debtors will permit Secured Party, or its designee, with prior written notice, to inspect the Collateral at any reasonable time, wherever located, (d) Debtors will pay promptly when due all taxes, assessments, governmental charges and levies upon the Collateral or incurred in connection with the use or operation of such Collateral or incurred in connection with this Agreement, except to the extent that the same shall be contested in good faith by appropriate and timely proceedings and for which adequate provisions have been established in accordance with GAAP, (e) Debtors will operate their respective businesses in compliance in all material respects with all applicable provisions of the federal Fair Labor Standards Act, as amended, and with all applicable provisions of federal, state and local statutes and ordinances dealing with the control, shipment, storage or disposal of hazardous materials or substances, and (f) Debtors will not sell or otherwise dispose, or offer to sell or otherwise dispose, of the Collateral or any interest therein, except as permitted herein or in the Loan Agreement.
10.Collateral Protection Expenses; Preservation of Collateral.
a.Expenses Incurred by Secured Party. In its discretion, Secured Party may discharge taxes and other encumbrances at any time levied or placed on any of the Collateral, make repairs thereto and pay any necessary filing fees or, if the Debtors fail to do so, insurance premiums. Debtors agree to reimburse Secured Party on demand for any and all expenditures so made. Secured Party has no obligation to Debtors to make any such expenditures, and the making thereof will not relieve Debtors of any Event of Default.
b.Secured Party’s Obligations and Duties. Anything herein to the contrary notwithstanding, Debtors will remain liable under each contract or agreement comprised in the Collateral to be observed or performed by Debtors thereunder. Secured Party shall not have any obligation or liability under any such contract or agreement by reason of or arising out of this Agreement or the receipt by Secured Party of any payment relating to any of the Collateral, nor shall Secured Party be obligated in any manner to perform any of the obligations of Debtors under or pursuant to any such contract or
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agreement, to make inquiry as to the nature or sufficiency of any payment received by Secured Party in respect of the Collateral or as to the sufficiency of any performance by any party under any such contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to Secured Party or to which Secured Party may be entitled at any time or times.
11.Securities and Deposits. Upon the occurrence and during the continuance of an Event of Default, Secured Party may at any time at its option, transfer to itself or any nominee any securities constituting Collateral, receive any income thereon and hold such income as additional Collateral or apply it to the Obligations. Upon the occurrence and during the continuance of an Event of Default, whether or not any Obligations are due, Secured Party may demand, sue for, collect, or make any settlement or compromise which it deems desirable with respect to the Collateral. Upon the occurrence and during the continuance of an Event of Default, regardless of the adequacy of Collateral or any other security for the Obligations, any deposits or other sums at any time credited by or due from Secured Party to Debtors may be applied to or set off against any of the Obligations then due and owing.
12.Notification to Account Debtors and Other Persons Obligated on Collateral. If a Default or an Event of Default has occurred and is continuing hereunder or under the Promissory Notes, the Loan Agreement or a Mortgage, Debtors will, at the request of Secured Party, notify account debtors and other persons obligated on any of the Collateral of the security interest of Secured Party in any account, chattel paper, general intangible, instrument or other Collateral and that payment thereof is to be made directly to Secured Party or to any financial institution designated by Secured Party as Secured Party’s agent therefor, and Secured Party may itself, if a Default or an Event of Default has occurred and is continuing beyond the applicable cure period, if any, without notice to or demand upon Debtor, so notify account debtors and other persons obligated on Collateral.
13.Power of Attorney.
a.Appointment and Powers of Secured Party. Debtors hereby irrevocably constitute and appoint Secured Party and any officer or agent thereof, with full power of substitution, as their true and lawful attorneys-in-fact with full irrevocable power and authority in the place and stead of Debtors or in Secured Party’s own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of this Agreement and, without limiting the generality of the foregoing, hereby gives said attorneys the power and right, on behalf of Debtors, without notice to or assent by Debtors, to do the following:
(a)upon the occurrence and during the continuance of an Event of Default beyond the applicable cure period, if any, generally to sell, transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral in such manner as is consistent with the Uniform Commercial Code of the State and as fully and completely as though Secured Party were the absolute owner thereof for all purposes, and to do at
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Debtor’s expense, at any time, or from time to time, all acts and things which Secured Party deems necessary to protect, preserve or realize upon the Collateral and Secured Party’s security interest therein, in order to effect the intent of this Agreement, all as fully and effectively as Debtors might do, including, without limitation the execution, delivery and recording, in connection with any sale or other disposition of any Collateral, of the endorsements, assignments or other instruments of conveyance or transfer with respect to such Collateral; and
(b)to the extent that Debtors’ authorization given in Section 3 is not sufficient, to file such financing statements with respect hereto, with or without Debtor’s signature, or a photocopy of this Agreement in substitution for a financing statement, as Secured Party may deem appropriate and to execute and/or file in Debtors’ name such financing statements and amendments thereto and continuation statements which may require Debtors’ signature.
b.No Duty on Secured Party. The powers conferred on Secured Party hereunder are solely to protect its interests in the Collateral and do not impose any duty upon it to exercise any such powers. Secured Party will be accountable only for the amounts that it actually receives as a result of the exercise of such powers and neither it nor any of its officers, directors, employees or agents shall be responsible to Debtors for any act or failure to act, except for Secured Party’s own gross negligence or willful misconduct.
14.Remedies. If an Event of Default has occurred and continues beyond the applicable cure period, if any, Secured Party may, without notice to or demand upon Debtors, declare this Agreement to be in default, and Secured Party shall thereafter have in any jurisdiction in which enforcement hereof is sought, in addition to all other rights and remedies, the rights and remedies of a secured party under the Uniform Commercial Code of the State or of any jurisdiction in which Collateral is located, including, without limitation, the right to take possession of the Collateral, and for that purpose Secured Party may, so far as Debtors can give authority therefor, enter upon any premises on which the Collateral may be situated and remove the same therefrom. Upon the occurrence and the continuance of an Event of Default, Secured Party may in its discretion require Debtors to assemble all or any part of the Collateral at such location or locations within the jurisdictions of Debtors’ principal office(s) or at such other locations as Secured Party may reasonably designate. Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Secured Party will give to Debtors at least ten (10) business days prior written notice of the time and place of any public sale of Collateral or of the time after which any private sale or any other intended disposition is to be made. Debtors hereby acknowledge that ten (10) business days prior written notice of such sale or sales is reasonable notice. In addition, Debtors waive any and all rights that they may have to a judicial hearing in advance of the enforcement of any of Secured Party’s rights hereunder, including, without limitation, its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights with respect thereto.
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15.No Waiver by Secured Party, Etc. Secured Party shall not be deemed to have waived any of its rights hereunder unless such waiver shall be in writing and signed by Secured Party. No delay or omission on the part of Secured Party in exercising any right shall operate as a waiver of such right or any other right. A waiver on any one occasion will not be construed as a bar to or waiver of any right on any future occasion. All rights and remedies of Secured Party will be cumulative and may be exercised singularly, alternatively, successively or concurrently at such time or at such times as Secured Party deems expedient.
16.Proceeds of Dispositions; Expenses. Debtors will pay to Secured Party on demand any and all expenses, including reasonable and documented attorneys’ fees and disbursements, incurred or paid by Secured Party in protecting, preserving or enforcing Secured Party’s rights under or in respect of any of the Obligations or any of the Collateral. After deducting all of said expenses, the residue of any proceeds of collection or sale of the Obligations or Collateral shall, to the extent actually received in cash, be applied to the payment of the Obligations in such order or preference as Secured Party may determine in accordance with the Loan Agreement, proper allowance and provision being made for any Obligations not then due.
17.Governing Law; Consent to Jurisdiction. Debtors agree that any suit for the enforcement of this Agreement may be brought in the courts of the State of North Dakota or any federal court sitting therein and consents to the non-exclusive jurisdiction of such court. Debtors hereby waive any objection that it may now or hereafter have to the venue of any such suit or any such court or that such suit is brought in an inconvenient court.
18.Waiver of Jury Trial. THE PARTIES WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, Debtors waive any right which it may have to claim or recover in any litigation referred to in the preceding sentence any special, exemplary, punitive or consequential damages or any damages other than, or in addition to, actual damages. Debtors (i) certify that neither Secured Party nor any representative, agent or attorney of Secured Party has represented, expressly or otherwise, that Secured Party would not, in the event of litigation, seek to enforce the foregoing waivers and (ii) acknowledges that, in entering into the Loan Agreement and the other loan documents to which Secured Party is a party, Secured Party is relying upon, among other things, the waivers and certifications contained in this Section 18.
19.Miscellaneous. The headings of each section of this Agreement are for convenience only and shall not define or limit the provisions thereof. This Agreement and all rights and obligations hereunder are binding upon Debtors and their respective successors and assigns, and will inure to the benefit of Secured Party and its successors and assigns. If any term of this Agreement is held to be invalid, illegal or unenforceable, the validity of all other terms hereof shall in no way be affected thereby, and this Agreement shall be construed and be enforceable as if such invalid, illegal or unenforceable term had not been included herein. Debtors acknowledge receipt of a copy of this Agreement.
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25.    Counterparts. This document may be executed in counterparts, each of which will be deemed an original for all purposes, and together will constitute one and the same document. A facsimile copy of a signature shall be as binding as an original signature.

[Remainder of page left blank intentionally.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

DEBTORS:

NUVERRA ENVIRONMENTAL SOLUTIONS, INC., a Delaware corporation


By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            





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BADLANDS POWER FUELS, LLC,
a Delaware limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            

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BADLANDS POWER FUELS, LLC,
a North Dakota limited liability company
By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            
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LANDTECH ENTERPRISES, L.L.C.,
a North Dakota limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            


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IDEAL OILFIELD DISPOSAL, LLC, a North Dakota limited liability company


By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            

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HECKMANN WATER RESOURCES CORPORATION, a Texas corporation

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            


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HECKMANN WATER RESOURCES (CVR), INC., a Texas corporation

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            

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1960 WELL SERVICES, LLC, an Ohio limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            


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NUVERRA OHIO DISPOSAL LLC, a Delaware limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            

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CLEARWATER THREE, LLC, an Ohio limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            

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CLEARWATER FIVE, LLC, an Ohio limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            

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CLEARWATER SOLUTIONS, LLC, an Ohio limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            


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NUVERRA TOTAL SOLUTIONS, LLC, a Delaware limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            


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SECURED PARTY:

FIRST INTERNATIONAL BANK & TRUST,
a North Dakota banking corporation


By:     /s/ Drew Flaagan            
Printed Name: Drew Flaagan
Its: Vice President
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Exhibit 10.8
GUARANTY

In consideration of and in order to induce First International Bank & Trust, a North Dakota banking corporation (the “Lender”), to extend financial accommodations to Nuverra Environmental Solutions, Inc., a Delaware corporation (the “Borrower”), as evidenced by that certain Loan Agreement of even date herewith (“Loan Agreement”; capitalized terms used herein but not otherwise defined shall have the meanings provided for in the Loan Agreement) and those certain Promissory Notes of even date herewith executed by the Borrower and payable to the order of the Lender, as more fully described in the Loan Agreement (collectively, the “Note”), each of the undersigned (collectively, the “Guarantor”), hereby jointly and severally:
1.Unconditionally and absolutely guarantees to the Lender:
(a)the full and prompt payment, when due, whether at the maturity dates specified therein or theretofore upon acceleration of maturity pursuant to the provisions thereof, of principal, accrued interest, prepayment premiums and late charges, if any, on the Note, and any and all renewals thereof including notes taken in substitution therefor;
(b)the payment and performance by the Borrower of all of its obligations under and pursuant to the Loan Agreement, the Note any and all documents related thereto, including the Collateral (as defined in the Loan Agreement); and
(c)    the payment of the Note, and such other liability, indebtedness and obligations under the Loan Agreement and the Loan Documents (collectively, referred to as the “Obligations”); together with the full and prompt payment of any and all costs and expenses of and incidental to the collection of the Obligations or the enforcement of this Guaranty, including, without limitation, reasonable and documented attorneys’ fees.
2.Agrees that if the Borrower fails to pay any installment of principal or interest under the Note, when due, and an Event of Default has occurred and is continuing, the Lender may demand payment from the Guarantor of such installment (or portion thereof) of principal or interest on the Note, when due, and the Guarantor shall immediately pay the same to the Lender, and the Lender may demand payment or performance of any or all of the other Obligations, when such payment or performance is due or required, and the Guarantor shall immediately pay or perform the same, whether or not the Lender has (i) accelerated payment of the Note; or (ii) commenced repossession of, or foreclosure of any security interest, mortgage or other lien in, any or all of the collateral securing the Note; or (iii) otherwise exercised its rights and remedies hereunder or under the Note, the Loan Agreement or the documents related thereto or applicable law.
3.Waives (i) presentment, demand, notice of nonpayment, protest and notice of protest and dishonor on the Obligations; (ii) notice of acceptance of this Guaranty by the Lender; and (iii) notice of the creation or incurrence of the Obligations by the Borrower.



4.Agrees that the Lender may from time to time, without notice to the Guarantor, which notice is hereby waived by the Guarantor, extend, modify, renew or compromise the Obligations, in whole or in part, without releasing, extinguishing or affecting in any manner whatsoever the liability of the Guarantor hereunder, the foregoing acts being hereby consented to by the Guarantor.
5.Agrees that the Lender shall not be required to first resort for payment to the Borrower or any other person, corporation or entity, or their properties or estates, or any other right or remedy whatsoever, prior to enforcing this Guaranty.
6.Agrees that this Guaranty shall be construed as a continuing, absolute, and unconditional guaranty without regard to (i) the validity, regularity or enforceability of the Obligations or the disaffirmance thereof in any insolvency or bankruptcy proceeding relating to the Borrower; or (ii) any event or any conduct or action of the Borrower or the Lender or any other party which might otherwise constitute a legal or equitable discharge of a surety or guarantor but for this provision.
7.Agrees that this Guaranty shall remain in full force and effect and be binding upon the Guarantor until the Obligations are paid in full.
8.Agrees that the Lender is expressly authorized to forward or deliver any or all collateral and security which may at any time be placed with it by the Borrower, the Guarantor or any other person, directly to the Borrower for collection and remittance or for credit, or to collect the same in any other manner and to renew, extend, compromise, exchange, release, surrender or modify the installments of, any or all of such collateral and security with or without consideration and without notice to the Guarantor and without in any manner affecting the absolute liability of the Guarantor hereunder; and that the liability of the Guarantor hereunder shall not be affected or impaired by any failure, neglect or omission on the part of the Lender to realize upon the Obligations, or upon any collateral or security therefor, nor by the taking by the Lender of any other guaranty or guaranties to secure the Obligations or any other indebtedness of the Borrower to the Lender, nor by the taking by the Lender of collateral or security of any kind nor by any act or failure to act whatsoever which, but for this provision, might or could in law or in equity act to release or reduce the Guarantor’s liability hereunder.
9.Waives any right that the Guarantor may have to collect or seek to collect from the Borrower the claim, if any, by subrogation or otherwise, acquired by the Guarantor through payment of any part or all of the Obligations until the Obligations have been paid in full.
10.Agrees that the liability of the Guarantor hereunder shall not be affected or impaired by the existence or creation from time to time, with or without notice to the Guarantor, which notice is hereby waived, of indebtedness from the Borrower to the Lender in addition to the indebtedness evidenced by the Note; the creation or existence of such additional indebtedness being hereby consented to by the Guarantor.
11.Agrees that the possession of this instrument of guaranty by the Lender shall be conclusive evidence of due execution and delivery hereof by the Guarantor.
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12.Agrees that this Guaranty shall be binding upon the successors and assigns of the Guarantor, and shall inure to the benefit of the Lender and its successors, assigns and legal representatives; that notwithstanding the foregoing, the Guarantor shall have no right to assign or otherwise transfer its rights and obligations under this Guaranty to any third party without the prior written consent of the Lender; and that any such assignment or transfer shall not release or affect the liability of the Guarantor hereunder in any manner whatsoever.
13.Agrees that the Guarantor may be joined in any action or proceeding commenced against the Borrower in connection with or based upon the Obligations and recovery may be had against the Guarantor in any such action or proceeding or in any independent action or proceeding against the Guarantor should the Borrower fail to duly and punctually pay any of the principal of or interest on the Obligations without any requirement that the Lender first assert, prosecute or exhaust any remedy or claim against the Borrower.
14.Agrees that upon the occurrence and during the continuance of an Event of Default (as defined in the Loan Agreement), the Lender shall have the right to set off any and all amounts due hereunder by the Guarantor to the Lender against any indebtedness or obligation of the Lender to the Guarantor.
15.Agrees that the Guarantor shall be liable to the Lender for any deficiency remaining after foreclosure of any mortgage or deed of trust in real estate or any security interest in personal property granted by the Borrower (if any such mortgage or deed of trust may currently or subsequently exist), the Guarantor or any third party to the Lender to secure repayment of the Obligations and the subsequent sale by the Lender of the property subject thereto to a third party (whether at a foreclosure sale or at a sale thereafter by the Lender in the event the Lender purchases said property at the foreclosure sale) notwithstanding any provision of applicable law which may prevent the Lender from obtaining a deficiency judgment against, or otherwise collecting a deficiency from, the Borrower.
16.Agrees that this Guaranty shall be deemed a contract made under and pursuant to the laws of the State of North Dakota and shall be governed by and construed under the laws of such state without giving effect to the choice of law provisions thereof; and that, wherever possible, each provision of this Guaranty shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of the Guaranty.
17.Agrees that no failure on the part of the Lender to exercise, and no delay in exercising, any right or remedy hereunder shall operate as or constitute a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy granted hereby or by any related document or by law.
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18.Waives any and all claims against the Lender and defenses to performance and payment hereunder relating in any way, directly or indirectly, to the performance of the Lender’s obligations or exercise of any of its rights under the Note and the documents related thereto.
19.Warrants and represents to the Lender as follows:
(a)Enforceability. This Guaranty constitutes the legal, valid and binding obligation of the Guarantor enforceable in accordance with its terms (subject, as to enforceability, to limitations resulting from bankruptcy, insolvency or other similar laws affecting creditors’ rights generally).
(b)Litigation. There is no action, suit or proceeding pending or, to the knowledge of the Guarantor, threatened against or affecting the Guarantor which, if adversely determined, would have a material adverse effect on the condition (financial or otherwise), properties or assets of the Guarantor, or which would question the validity of this Guaranty or any instrument, document or other agreement related hereto or required hereby, or impair the ability of the Guarantor to perform its obligations hereunder or thereunder.
(c)Default. The Guarantor is not in default of any provision under any material agreement, instrument, decree or order to which it is a party or by which its property is bound or affected that could result in a material adverse effect on the condition (financial or otherwise), properties or assets of the Guarantor.
(d)Consents. No consent, approval, order or authorization of, or registration, declaration or filing with, or notice to, any governmental authority or any third party is required in connection with the execution and delivery of this Guaranty or any of the agreements or instruments herein mentioned to which the Guarantor is a party or the carrying out or performance of any of the transactions required or contemplated hereby or thereby or, if required, such consent, approval, order or authorization has been obtained or such registration, declaration or filing has been accomplished or such notice has been given prior to the date hereof.
(e)Taxes. The Guarantor has filed all tax returns required to be filed and has paid all taxes shown thereon to be due, including interest and penalties, which are not being contested in good faith and by appropriate proceedings and has no information or knowledge of any objections to or claims for additional taxes in respect of federal income or excess profits tax returns for prior years.
(f)Financial Condition. The financial statements of the Guarantor furnished to the Lender are complete and correct in all material respects and fairly present the financial condition of the Guarantor at the dates of such statements. Since the most recent set of financial statements delivered by the Guarantor to the Lender, there have been no material adverse changes in the financial condition of the Guarantor.
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(g)Formation, Etc.. Each Guarantor is an entity that is duly organized and validly existing and in good standing in their respective states of existence, and, if required by applicable law, in the state where they own real property, and have all requisite power and authority to carry on their business as now conducted and as presently proposed to be conducted. Each Guarantor has full power, right and authority to execute and perform this Guaranty, and, furthermore, that the officer and/or member signing this Guaranty on behalf of each Guarantor has been given the right, power and authority to execute this Guaranty in such capacity.
20.Agrees that the liability of the Guarantor and any other guarantor of the Obligations shall be joint and several.
21.Agrees to deliver to the Lender the financial information and documentation required under the Loan Agreement.
22.Agrees that (i) each Guarantor will indirectly benefit by and from the making of the loan by the Lender to the Borrower evidenced by the Note; (ii) it has received legal and adequate consideration for the execution of this Guaranty and has executed and delivered this Guaranty to the Lender in good faith in exchange for reasonably equivalent value; (iii) it is not presently insolvent and will not be rendered insolvent by virtue of the execution and delivery of this Guaranty; (iv) it has not executed or delivered this Guaranty with actual intent to hinder, delay or defraud its creditors; and (v) the Lender has agreed to make such loan in reliance upon this Guaranty.
23.Agrees that if, at any time, all or any part of any payment previously applied by the Lender to any of the Obligations must be returned by the Lender for any reason, whether by court order, administrative order or settlement, the Guarantor shall remain liable for the full amount returned as if said amount had never been received by the Lender, notwithstanding any term of this Guaranty or the cancellation or return of any note or other agreement evidencing the Obligations.
24.Irrevocably submits to the jurisdiction of any North Dakota state court or federal court over any action or proceeding arising out of or relating to this Guaranty, the Note, the Loan Agreement, or any instrument, agreement or document related thereto (collectively, the “Loan Documents”); agrees that all claims in respect of such action or proceeding may be heard and determined in such North Dakota state or federal court; irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding; irrevocably consents to the service of copies of the summons and complaint and any other process which may be served in any such action or proceeding by the mailing by United States certified mail, return receipt requested, of copies of such process to the Guarantor’s last known address; and agrees that judgment final by appeal, or expiration of time to appeal without an appeal being taken, in any such action or proceeding shall be conclusive and may be enforced in any other jurisdictions by suit on the judgment or in any other manner provided by law; provided that nothing in this paragraph shall affect the right of the Lender to serve legal process in any other manner permitted by law or affect the right of Lender to bring any action or
5

proceeding against either Guarantor or Guarantor’s property in the courts of any other jurisdiction to the extent permitted by law.
25.WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR PERTAINING TO THIS GUARANTY OR THE LOAN DOCUMENTS.
26.The Guarantor has a direct financial interest in Borrower and will derive financial benefit from the loan transaction described above.
27.This Guaranty may be executed simultaneously in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Dated as of this 16th day of November, 2020.
[Signature pages follow.]

6

GUARANTOR:

BADLANDS POWER FUELS, LLC,
a Delaware limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            

7

GUARANTOR:

BADLANDS POWER FUELS, LLC,
a North Dakota limited liability company
By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            
8

GUARANTOR:

LANDTECH ENTERPRISES, L.L.C.,
a North Dakota limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            


9

GUARANTOR:

IDEAL OILFIELD DISPOSAL, LLC, a North Dakota limited liability company


By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            


10

GUARANTOR:

HECKMANN WATER RESOURCES CORPORATION, a Texas corporation

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            


11

GUARANTOR:

HECKMANN WATER RESOURCES (CVR), INC., a Texas corporation

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            


12

GUARANTOR:

1960 WELL SERVICES, LLC, an Ohio limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            


13

GUARANTOR:

NUVERRA OHIO DISPOSAL LLC, a Delaware limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            

14

GUARANTOR:

CLEARWATER THREE, LLC, an Ohio limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            

15

GUARANTOR:

CLEARWATER FIVE, LLC, an Ohio limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            


16

GUARANTOR:

CLEARWATER SOLUTIONS, LLC, an Ohio limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            


17

GUARANTOR:

NUVERRA TOTAL SOLUTIONS, LLC, a Delaware limited liability company

By: /s/ Charles K. Thompson    
Printed Name: Charles K. Thompson    
Its: CEO            
18

Exhibit 10.9
INDEMNITY AGREEMENT

THIS INDEMNITY AGREEMENT (“Agreement”), is made and entered into as of this 13th day of November, 2020, by the undersigned, nuverra environmental solutions, INC., a Delaware corporation (hereinafter referred to as the “Borrower”), and BADLANDS POWER FUELS, LLC, a Delaware limited liability company, BADLANDS POWER FUELS, LLC, a North Dakota limited liability company, LANDTECH ENTERPRISES, L.L.C., a North Dakota limited liability company, IDEAL OILFIELD DISPOSAL, LLC, a North Dakota limited liability company, HECKMANN WATER RESOURCES CORPORATION, a Texas corporation, HECKMANN WATER RESOURCES (CVR), INC., a Texas corporation, 1960 WELL SERVICES, LLC, an Ohio limited liability company, NUVERRA OHIO DISPOSAL LLC, a Delaware limited liability company, CLEARWATER THREE, LLC, an Ohio limited liability company, CLEARWATER FIVE, LLC, an Ohio limited liability company, CLEARWATER SOLUTIONS, LLC, an Ohio limited liability company, and NUVERRA TOTAL SOLUTIONS, LLC, a Delaware limited liability company, (hereinafter collectively referred to as the “Guarantors”, and Borrower and Guarantors hereinafter collectively referred to as the “Indemnitors”), jointly and severally, in consideration of FIRST INTERNATIONAL BANK & TRUST, a North Dakota banking corporation (referred to as the “Indemnitee”), agreeing to make a loan (hereinafter referred to as the “Loan”) in the amount of Ten Million and 00/100 Dollars ($10,000,000.00), to Borrower, and for the purpose of inducing the Indemnitee to make the Loan and with knowledge that Indemnitee intends to rely upon the certifications and undertakings set forth herein agree as follows:
1.For purposes of this Agreement, (a) the term “Hazardous Materials or Wastes” shall mean any hazardous or toxic materials, pollutants, chemicals, or contaminants, including without limitation asbestos, polychlorinated biphenyls (PCBs), mold and petroleum products as defined, determined or identified as such in any Laws, as hereinafter defined, and (b) the term “Laws” means any federal, state or local laws, rules or regulations (whether now existing or hereinafter enacted or promulgated) including, without limitation, the Clean Water Act, 33 U.S.C. §§ 1251 et seq. (1972), the Clean Air Act, 42 U.S.C. §§ 7401 et seq. (1970), the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq., and the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Toxic Substances Control Act, or other similar laws as well as implementing regulations enacted or promulgated to protect the public health, welfare or the environment, including state or local laws, regulations or ordinances, as well as any judicial or administrative interpretation thereof, including any judicial or administrative orders or judgments.
2.Indemnitors hereby agree to indemnify Indemnitee and hold Indemnitee harmless from and against all loss, liability, damage and expense, including reasonable and



documented attorneys’ fees, suffered or incurred by the Indemnitee as a result of the existence of Hazardous Materials or Wastes in violation of Law upon that certain real estate and the improvements located thereon described in Exhibit “A” attached hereto and made a part hereof (hereinafter referred to as the “Premises”), including any loss of value of the Premises suffered by Indemnitee as a result of the foregoing, whether as holder of the Loan, as mortgagee in possession or as successor-in-interest fee owner to Borrower by foreclosure proceedings or deed in lieu of foreclosure. Indemnitors shall have no liability to indemnify Indemnitee for loss, liability, damage or expense arising from or out of (a) the activities of Indemnitee or its agents on the Premises on or after transfer of title of the Premises to Indemnitee or Indemnitee’s designee pursuant to foreclosure proceedings or deed in lieu, or (b) any matters disclosed in the Phase I Environmental Site Assessment for Watford City, ND dated October 5, 2020, for Carthage, TX dated September 9, 2020, for Dickinson, ND dated September 26, 2020, for Frierson, LA dated September 2, 2020, for Lore City, OH dated September 2, 2020, for Reedsville, WV dated September 2, 2020, for Sidney, MT dated September 22, 2020, for Stanley, ND dated September 24, 2020, and for Tioga, ND dated September 28, 2020.
3.It is understood and agreed that the foregoing undertaking to indemnify Indemnitee shall include but not be limited to the assertion against Indemnitee of any claim, whenever raised: (a) relating to the presence of Hazardous Materials or Wastes upon the Premises in violation of Law, or (b) relating to the failure to comply with any local, state, or federal statutes and/or regulations regarding Hazardous Materials or Wastes and shall continue in full force and effect as long as Indemnitee retains an estate or interest in the Premises or so long as Indemnitee shall have liability by reason of having held such estate or interest in the Premises. Such undertaking to indemnify Indemnitee shall in no event be limited, terminated or extinguished by, or merged into, the exercise of any of Indemnitee’s remedies under the documents evidencing and securing the Loan (hereinafter collectively referred to as the “Loan Documents”). Except as may be otherwise expressly agreed in writing, the liability of any party under this Agreement shall in no way be limited or impaired by any amendment or modification of the provisions of any Loan Documents. In addition, the liability of any party under this Agreement shall in no way be limited or impaired by (i) any extensions of time for performance required by any of the Loan Documents, (ii) any sale, assignment or foreclosure of any Loan Documents or any sale or transfer of all or any part of the Premises, (iii) any exculpatory provision in any of the Loan Documents limiting Indemnitee’s recourse to property encumbered by the Loan Documents or to any other security, or limiting Indemnitee’s rights to a deficiency judgment against the Indemnitors except as otherwise expressly provided in the Loan Documents, (iv) the release of the Indemnitors or any other person from performance or observance of any of the agreements, covenants, terms or conditions contained in any of the Loan Documents by operation of law, Indemnitee’s voluntary act, or otherwise, (v) the release or substitution in whole
- 2 -


or in part of any security for the Loan, (vi) Indemnitee’s failure to record or file any Loan Document (or Indemnitee’s improper recording or filing of any thereof) or to otherwise perfect, protect, secure or insure any security interest or lien given as security for the Loan; and, in any such case, whether with or without notice to Indemnitors and with or without consideration, (vii) any limitation of liability language in any Loan Documents, unless such limitation of liability language expressly limits liability hereunder or with respect hereto, or (viii) repayment of the Loan.
4.No provision of this Agreement may be changed, waived, discharged or terminated verbally or by any other means except by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought.
5.Except as herein provided, this Agreement shall be binding upon the Indemnitors and their respective successors and assigns and shall inure to the benefit of Indemnitee and its successors and assigns.
6.This Agreement and the rights and obligations of the parties hereunder shall in all respects be governed by, and construed and enforced in accordance with, the laws of the State of North Dakota.
7.Any notice which any party hereto may desire or may be required to give to any other party shall be in writing and either (a) mailed by certified mail, return receipt requested, or (b) sent by an overnight carrier which provides for a return receipt. Any such notice shall be sent to the respective party’s addresses as set forth below or to such other address as such party may, by notice in writing, designate as its address:

- 3 -


Indemnitors:
Nuverra Environmental Solutions
Attn: Joseph Crabb
6720 N. Scottsdale Road, Suite 190
Scottsdale, AZ 85253

With a copy to:
Squire Patton Boggs (US) LLP
127 Public Square, Suite 4900
Cleveland, OH 44114
Attn: Patrick J. Burke, Esq.

Indemnitee:
First International Bank & Trust
Attn: Drew Flanagan
100 N. Main St.
P.O. Box 607
Watford City, ND 58854

With a copy to:
Ballard Spahr LLP
80 South Eighth Street, Suite 2000
Minneapolis, Minnesota 55402
Attn: James R. Walston, Esq.

Any such notice shall constitute service of notice hereunder three (3) days after the mailing thereof by certified mail or one (1) day after the sending thereof by overnight carrier.
8.The indemnities given in this Agreement are in addition to and separate from those set forth in the Loan Documents. The indemnities given in this Agreement are given in consideration of Indemnitee making the Loan to Borrower, however, they are not given as security for repayment of the Loan and shall fully survive repayment of the Loan.
9.The indemnities, promises and agreements herein shall be construed to be and are hereby declared to be joint and several in each and every particular and shall be fully binding upon and enforceable against any or all of such parties or persons, and neither the dissolution, the death nor release of any person or party to this Agreement shall affect or release the joint and several liability of any other person or party.
10.This Agreement may be executed in one or more counterparts by some or all of the parties hereto, each of which counterparts shall be an original and all of which together shall constitute a single agreement. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
- 4 -


IN WITNESS WHEREOF, Indemnitors have executed this Agreement as of the day and year first above written.
                        INDEMNITORS:

NUVERRA ENVIRONMENTAL SOLUTIONS, INC.,
a Delaware corporation


By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    






STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of NUVERRA ENVIRONMENTAL SOLUTIONS, INC., a Delaware corporation, on behalf of the corporation.



/s/ David Berry Dale, III            
Notary Public


- 5 -



INDEMNITORS (continued):


BADLANDS POWER FUELS, LLC,
a Delaware limited liability company

By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    



STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of BADLANDS POWER FULES, LLC, a Delaware limited liability company, on behalf of the limited liability company.



/s/ David Berry Dale, III            
Notary Public

- 6 -




INDEMNITORS (continued):


BADLANDS POWER FUELS, LLC,
a North Dakota limited liability company

By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    


STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of BADLANDS POWER FULES, LLC, a North Dakota limited liability company, on behalf of the limited liability company.


/s/ David Berry Dale, III            
Notary Public

- 7 -


INDEMNITORS (continued):

LANDTECH ENTERPRISES, L.L.C.,
a North Dakota limited liability company

By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    



STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of LANDTECH ENTERPRISES, L.L.C., a North Dakota limited liability company, on behalf of the limited liability company.



/s/ David Berry Dale, III            
Notary Public



- 8 -


INDEMNITORS (continued):

IDEAL OILFIELD DISPOSAL, LLC, a North Dakota limited liability company


By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    



STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of IDEAL OILFIELD DISPOSAL, LLC, a North Dakota limited liability company, on behalf of the limited liability company.



/s/ David Berry Dale, III            
Notary Public



- 9 -


INDEMNITORS (continued):

HECKMANN WATER RESOURCES CORPORATION, a Texas corporation

By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    



STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of HECKMANN WATER RESOURCES CORPORATION, a Texas corporation, on behalf of the corporation.



/s/ David Berry Dale, III            
Notary Public




- 10 -


INDEMNITORS (continued):

HECKMANN WATER RESOURCES (CVR), INC., a Texas corporation

By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    



STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of HECKMANN WATER RESOURCES (CVR) INC., a Texas corporation, on behalf of the corporation.



/s/ David Berry Dale, III            
Notary Public




- 11 -


INDEMNITORS (continued):

1960 WELL SERVICES, LLC, an Ohio limited liability company

By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    



STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of 1960 WELL SERVICES, LLC, an Ohio limited liability company, on behalf of the limited liability company.



/s/ David Berry Dale, III            
Notary Public




- 12 -


INDEMNITORS (continued):

NUVERRA OHIO DISPOSAL LLC, a Delaware limited liability company

By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    



STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of NUVERRA OHIO DISPOSAL LLC, a Delaware limited liability company, on behalf of the limited liability company.



/s/ David Berry Dale, III            
Notary Public




- 13 -


INDEMNITORS (continued):

CLEARWATER THREE, LLC, an Ohio limited liability company

By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    



STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of CLEARWATER THREE, LLC, an Ohio limited liability company, on behalf of the limited liability company.



/s/ David Berry Dale, III            
Notary Public




- 14 -


INDEMNITORS (continued):

CLEARWATER FIVE, LLC, an Ohio limited liability company

By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    



STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of CLEARWATER FIVE, LLC, an Ohio limited liability company, on behalf of the limited liability company.



/s/ David Berry Dale, III            
Notary Public



- 15 -


INDEMNITORS (continued):

CLEARWATER SOLUTIONS, LLC, an Ohio limited liability company

By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    



STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of CLEARWATER SOLUTIONS, LLC, an Ohio limited liability company, on behalf of the limited liability company.



/s/ David Berry Dale, III            
Notary Public




- 16 -


INDEMNITORS (continued):

NUVERRA TOTAL SOLUTIONS, LLC, a Delaware limited liability company

By:     /s/ Charles K. Thompson        
Printed Name: Charles K. Thompson    
Its:     CEO                    



STATE OF     Texas            )
) ss.
COUNTY OF     Harris            )

    The foregoing instrument was acknowledged before me this     2nd     day of November, 2020, by     Charles Thompson     the     CEO             of NUVERRA TOTAL SOLUTIONS, LLC, a Delaware limited liability company, on behalf of the limited liability company.



/s/ David Berry Dale, III            
Notary Public




- 17 -


EXHIBIT “A”
LEGAL DESCRIPTION


Parcel 1:

EX109_PARCEL11.JPG

PARCEL 2:

EX109_PARCEL21.JPG

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PARCEL 3:

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PARCEL 4:

EX109_PARCEL41.JPG

PARCEL 5:

EX109_PARCEL51.JPG

PARCEL 6:

EX109_PARCEL61.JPG

PARCEL 7:

EX109_PARCEL71.JPG

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PARCEL 8:

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PARCEL 9:

EX109_PARCEL91.JPG
PARCEL 10:

EX109_PARCEL101.JPG



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PARCEL 11:

EX109_PARCEL111.JPG



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PARCEL 12:

EX109_PARCEL121.JPG



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PARCEL 13:

EX109_PARCEL131.JPG



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PARCEL 14:

EX109_PARCEL1411.JPG


- 24 -


EX109_PARCEL1421.JPG



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PARCEL 15:

EX109_PARCEL151.JPG



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PARCEL 16:

EX109_PARCEL161.JPG



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PARCEL 17:

EX109_PARCEL171.JPG



- 28 -


PARCEL 18:

EX109_PARCEL181.JPG

- 29 -


Exhibit 10.10

ASSIGNMENT OF SALT WATER DISPOSAL LEASES AND CONTRACTS

THIS ASSIGNMENT OF SALT WATER DISPOSAL LEASES AND CONTRACTS (this “Assignment”) is made this 13th day of November, 2020, by and between the entities listed on Schedule 1 attached hereto (individually and/or collectively, as the contest may require, the “Assignor”) in favor of FIRST INTERNATIONAL BANK & TRUST, a North Dakota banking corporation (the “Assignee”).
RECITALS:
A.The Nuverra Environmental Solutions, Inc., a Delaware corporation (“Nuverra”) and the Assignee have entered into that certain Loan Agreement of even date herewith (together with any amendment or modification thereto, the “Loan Agreement”) whereby the Assignee agreed to extend to Assignor: (i) a real estate term loan (the “CRE Loan”) in the original principal amount of Ten Million and 00/100 Dollars ($10,000,000.00); (ii) an equipment term loan (the “Equipment Loan”) anticipated to be in the original principal amount of Thirteen Million and 00/100 Dollars ($13,000,000.00); (iii) an operating line of credit (the “Operating LOC Loan”) in the original principal amount of Five Million and 00/100 Dollars ($5,000,000.00); and (iv) a letter of credit loan (the “Letter of Credit Loan”) in the original principal amount of up to Four Million Eight Hundred Thirty-Nine Thousand and 00/100 Dollars ($4,839,000.00) (the CRE Loan, the Equipment Loan, the Operating LOC Loan and the Letter of Credit Loan, collectively may be referred to as the “Loan”), which the Loan shall be secured by the Collateral and the Guaranty. Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Loan Agreement.
B.In connection with the Loan, Nuverra has executed and delivered those certain: (i) Promissory Note (Real Estate) of even date herewith executed by Borrower in the original principal amount of Ten Million and 00/100 Dollars ($10,000,000.00) (together with any amendment, modification, replacement or renewal thereof, the “CRE Note”) in favor of the Assignee; (ii) Promissory Note (Equipment Loan) of even date herewith executed by Borrower anticipated to be in the original principal amount of Thirteen Million and 00/100 Dollars ($13,000,000.00) (together with any amendment, modification, replacement or renewal thereof, the “Equipment Note”); (iii) Revolving Promissory Note (Operating Line of Credit Loan) of even date herewith executed by Borrower in the original principal amount of Five Million and 00/100 Dollars ($5,000,000.00) (together with any amendment, modification, replacement or renewal thereof, the “Operating LOC Note”); and (iv) Promissory Note (Letter of Credit Loan) executed by Borrower in the original principal amount of up to Four Million Eight Hundred Thirty-Nine Thousand and 00/100 Dollars ($4,839,000.00) (together with any amendment, modification, replacement or renewal thereof, the “Letter of Credit”) (the CRE Note, Equipment Note, Operating LOC Note and Letter of Credit, may be referred to collectively as the “Note”). The Note is secured by the Collateral and the Guaranty.
1




C.Nuverra is the direct or indirect parent entity to each of the Assignor entities.
D.Assignor has entered into leases, permits, easements, abstracts and contracts with various parties, as listed on Exhibit A attached hereto and incorporated herein (collectively, the “Assigned Agreements”).
E.The execution and delivery of this Assignment is a condition precedent to the performance by the Assignee of its obligations under the Loan Agreement.
NOW, THEREFORE, in order to induce the Assignee to make the Loan and in consideration of Ten Dollars ($10.00) and other good and valuable consideration paid to the Assignor (the receipt and sufficiency of which are hereby acknowledged), the Assignor and the Assignee hereby agree as follows:
1.To the maximum extent assignable and transferable, the Assignor hereby assigns, transfers and sets over unto Assignee, as security for the obligations of the Assignor under the Loan and the Loan Documents (collectively, the “Obligations”), and grants to the Assignee a first lien (subject to any Permitted Liens) on and security interest in, all of the following: (a) all of the Assignor's right, title and interest, powers, privileges and other benefits under each and every one of the Assigned Agreements, including without limitation, but subject to the provisions of Paragraph 9 hereof, the right to make all waivers, modifications and agreements, to give all notices, consents and releases, to take all actions upon the happening of any default giving rise to a right in favor of the Assignor under any of the Assigned Agreements and to do any and all other things whatsoever which the Assignor is or may become entitled to do under any of the Assigned Agreements; (b) all rights, powers, privileges, claims, remedies and causes of action of every kind which the Assignor now has or may in the future have with respect to or by reason of its interest in the Assigned Agreements; and (c) any and all proceeds (including non-cash proceeds) of any of the foregoing (the items numerated in the preceding subparagraphs (a) and (b) and in this subparagraph (c) being hereinafter referred to as the "Collateral").

2.This Assignment is executed only as security for the Loan and the other Obligations, and, therefore, neither the execution and delivery of this Assignment, nor the action or inaction on the part of the Assignee shall constitute an assumption on the part of the Assignee of any duty or obligation with respect to the Collateral, nor shall the Assignee have any duty or obligation to make any payment to be made by any Assignor under the Collateral, or to present or file any claim, or to take any other action to collect or enforce the payment of any amounts or the performance of any obligations which have been assigned to the Assignee or to which it may be entitled hereunder at any time or times, or subject the Assignee to, or transfer or pass to the Assignee, or in any way affect or modify, the liability of the Assignor under any or all of the Assigned Agreements, it being understood and agreed that, notwithstanding this Assignment or any subsequent assignment, all of the obligations of the Assignor to each and every party under each and every one of the Assigned Agreements shall be and remain enforceable by such other party, its successors and assigns, only against the Assignor or persons other than the Assignee and its respective successors and assigns. No action or inaction on the part of the Assignee shall adversely affect or limit in any way the rights of the Assignee hereunder or under the Collateral,
2




and the Assignee shall not incur any liability on account of any action taken (or not taken) by it or on its behalf in connection with the Collateral in good faith, whether or not the same shall prove to be improper, inadequate or invalid, in whole or in part.

3.To protect the security afforded by this Assignment, the Assignor represents, and warrants to the Assignee and agrees with the Assignee as follows:
(a)the Assignor, at its sole cost and expense, shall remain liable to and will faithfully abide by, perform and discharge each and every obligation, covenant, condition, duty and agreement provided for in each or any part of the Collateral, each of which are to be kept, observed or performed by the Assignor, and will promptly notify the Assignee in writing of all material defaults and material events of default under any of the Collateral, and shall promptly deliver to the Assignee any notices delivered or received relating to any material default or an event of default thereunder;
(b)the Assignor will take all action which might reasonably be required to keep the Collateral in full force and effect and to keep them from expiring or being canceled, rescinded or terminated other than in the ordinary course;
(c)without the prior written consent of the Assignee, the Assignor will not amend, extend, cancel, rescind, abridge, modify, change or terminate any Collateral or waive, release, discharge or consent to the release of any other party to any Collateral of or from any obligation, covenant, condition or agreement to be kept, observed or performed by such other party, in each case, in a manner that would be adverse to the Assignee;
(d)without the prior written consent of the Assignee, the Assignor will not take any action (including, without limitation, the exercise of any right or option) which would permit, or give rise to a right permitting, any other party to any Collateral, or any other person or entity whatsoever, to cancel, rescind or terminate any part of the Collateral, except as such right may be already set forth in such Collateral;
(e)at the Assignor's sole cost and expense, the Assignor will appear in and defend any action or proceeding arising under, growing out of or in any manner connected with the obligations, covenants, conditions, duties, agreements or liabilities of the Assignor under any of the Collateral;
(f)the Assignor has delivered to the Assignee true and complete copies of the Assigned Agreements in existence as of the date hereof;
(g)should the Assignor fail to make any payment, do any act which this Assignment prohibits or refrain from any act which this Assignment requires, then the Assignee may, but shall have no obligation to (and shall not thereby release the Assignor from any obligation hereunder), make such payment or do or prevent such act in such manner and to such extent as the Assignee may deem necessary or advisable to protect the security provided hereby, which rights of the Assignee shall specifically include,
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without limiting the Assignee's general powers herein granted, the right to appear in and defend any action or proceeding purporting to affect the security hereof and the rights or powers of the Assignee hereunder (or any of them), and also the right to perform and discharge each and every one, or any one or more, of the obligations, covenants, conditions, duties and agreements of the Assignor contained in any part of the Collateral: and in exercising any such powers, the Assignee may pay necessary reasonable and out-of-pocket costs and expenses and incur and pay reasonable attorneys’ fees, and the Assignor will reimburse the Assignee for such costs, expenses and fees;
(h)as of the date hereof, no part of the Collateral is mortgaged, pledged, hypothecated or assigned, by operation of law or otherwise, whether absolutely, conditionally, collaterally or otherwise (other than pursuant to this Assignment), and, so long as this Assignment is in effect, the Assignor shall not further assign, transfer or otherwise encumber its interest in any of the Collateral;
(i)each of the Assigned Agreements is, to the best of the Assignor's knowledge, legal, valid, binding and enforceable in accordance with its 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); no party under any of the Assigned Agreements is, or with the giving of notice or the passage of time, or both, would be, in default thereunder; and all obligations, covenants, conditions, duties and agreements have been kept, observed and performed in all material respects as required thereunder; and
(j)that as of the date hereof the list of Assigned Agreements on Exhibit A is a fully and complete list of all material contracts, permits, easements, leases, amendments, modifications, assignments, memorandum and other agreements between Assignor and any third party relating to salt water storage and disposal.
4.Subject to the provisions of Paragraph 9 hereof, the Assignor hereby constitutes the Assignee its true and lawful attorney-in-fact, coupled with an interest, irrevocably, with full power (in the name of the Assignor or otherwise), to: ask, require, demand, receive, compound and give acquittance for each and every payment due or to become due, under or arising out of any of the Assigned Agreements to which the Assignor is or may become entitled; enforce compliance by any other party with any term or provision of any one or more of the Assigned Agreements; make any payments required to be made under any of the Assigned Agreements, on behalf of or for the account of the Assignor; and file any claim or claims, take any action or actions or institute any proceeding or proceedings which the Assignee may deem to be necessary or advisable.
5.Upon the full discharge and satisfaction of all of the Obligations, this Assignment and all rights herein assigned to the Assignee shall terminate, and all estate, right, title and interest of the Assignee in and to each and every one of the Assigned Agreements shall revert to the Assignor.
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6.The Assignor will, from time to time, do and perform any other act or acts, will execute, acknowledge, deliver and file, register, record and deposit (and will refile, re-register, rerecord and redeposit whenever required) any and all further instruments required by law or reasonably requested by the Assignee in order to confirm, or further assure, the interests of the Assignee hereunder and to cause the Assignee to obtain the full benefits of this Assignment and the rights and powers herein created and to maintain and perfect the security interest granted in this Assignment, and will take such actions and execute such instruments and documents as the Assignee may reasonably request to facilitate the Assignee's exercise of the Assignor's rights, obligations and duties under the Assigned Agreements. The Assignor irrevocably authorizes the Assignee, at the expense of the Assignor, to file Uniform Commercial Code financing statements and continuation statements with respect to the Collateral.
7.The Assignee may assign all or any of the rights assigned to it hereby, or arising under any of the Assigned Agreements, including, without limitation, the right to receive any or all payments due or to become due. In the event of any such assignment, such successor or assign of the Assignee shall enjoy all rights and privileges and be subject to all obligations of the Assignee hereunder. The Assignee will give prompt written notice to the Assignor of any such assignment.
8.This Assignment shall be governed by, and construed and enforced in accordance with, the laws of the State of North Dakota.
9.The parties intend that this Assignment shall be a present, actual, absolute and unconditional assignment and shall, immediately upon execution, give the Assignee the right to assume the Assignor's interest in the Collateral; provided, however, that so long as no Event of Default shall have occurred and be continuing, the Assignor shall have a license to utilize the Collateral in accordance with the terms thereof. If an Event of Default shall have occurred and be continuing, and the Assignee seeks to enforce its rights and remedies hereunder, the Assignor's license mentioned in the immediately preceding sentence shall cease and terminate, without the execution of any further instrument or document or the taking of any other act on the part of the Assignee, and in such event, the Assignee shall be entitled to utilize the Collateral in the Assignor's place and stead, in the name of the Assignor or otherwise, and in furtherance thereof, the Assignee may enter upon the Property and take possession of the Property by its officers, agents or employees, or by a court-appointed receiver, and for the operation, protection, repair and maintenance of the Property, and in connection therewith, the Assignee shall be entitled to take possession of and use all books of account and financial records of the Assignor and its property managers or representatives relating to the Property. By its acceptance of this Assignment, the Assignee agrees that so long as no Event of Default (as defined in the Loan Agreement) has occurred and is continuing, the Assignee will not exercise or enforce, or seek to exercise or enforce, or avail itself of, any of the rights, powers, privileges, authorizations or benefits assigned and transferred to the Assignee pursuant to this Assignment, and the Assignor may exercise or enforce, or seek to exercise or enforce, such rights, powers, privileges, authorizations or benefits.
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10.The Assignor shall defend, indemnify and hold the Assignee harmless from and against any and all claims, demands, liabilities, losses, lawsuits, judgments and expenses (including, without limitation, attorneys' fees) to which the Assignee may become exposed, or which the Assignee may incur, by reason of this Assignment, any actions taken (or not taken) in connection with the Collateral, and from any and all claims and demands whatsoever which may be asserted against the Assignee by reason of this Assignment or against the Assignee as a result of the Assignee exercising any of its rights under this Assignment or due to the execution of this Assignment, except to the extent such claims, demands, liabilities, losses, lawsuits, judgments and expenses arise from the Assignee's gross negligence or willful misconduct.
11.All notices and other communications required hereunder shall be in writing and shall be delivered, and be deemed delivered, in accordance with the terms of the Loan Agreement. This Assignment may not be amended except upon the written agreement of the Assignor and the Assignee.
12.This Assignment is not intended to create any partnership or joint venture between the Assignor and the Assignee. This Assignment shall bind and inure to the benefit of the respective successors and assigns of the Assignor and the Assignee. The provisions hereof shall constitute covenants running with the Land.
13.Within thirty (30) days of the date hereof, Assignor shall, at its sole cost and expense, cause to be recorded a Memorandum of Assignment of Salt Water Contracts and Leases, in a form agreed to by Assignee, against each property subject to an Assigned Agreement for which the Assigned Agreement or a memorandum thereof has been recorded. Assignor shall provide Assignee with proof of recording within thirty (30) days after recording.
[Signatures begin on the next page]

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IN WITNESS WHEREOF, this Assignment has been duly executed as of the date first above written.
ASSIGNORS:    

LANDTECH ENTERPRISES, L.L.C., a North Dakota limited liability company


By: /s/ Eric Bauer    
Printed Name: Eric Bauer        
Its: Vice President        



HECKMANN WATER RESOURCES CORPORATION, a Texas corporation


By: /s/ Eric Bauer    
Printed Name: Eric Bauer        
Its: Vice President        



HECKMANN WATER RESOURCES (CVR), INC., a Texas corporation


By: /s/ Eric Bauer    
Printed Name: Eric Bauer        
Its: Vice President        






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EXHIBIT A
CONTRACTS
i.Lease Agreement by and between Beagle Land & Livestock Company, as lessor, and Landtech Enterprises, LLC, as lessee, dated July 13, 2005.
ii.Agreement Salt Water Permit and Easement by and between Beagle Land & Livestock Company, as lessor, and Landtech Enterprises, LLC, as lessee, dated July 13, 2005, as partially assigned pursuant to that certain Assignment of Income Interest under Agreement Salt Water Permit and Easement by and between Beagle Land & Livestock, as assignor, and JSBA, Inc., as assignee, dated November 21, 2005.
iii.Salt Water Injection Easement and Surface Use Agreement by and between Mark Johnsrud and Maribeth Johnsrud, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated December 6, 2017.
iv.Agreement Salt Water Permit and Easement by and between Vaughn and Betty Bloom, as lessor, and Landtech Enterprises, LLC, as lessee, dated July 2, 2008.
v.Salt Water Injection Easement and Surface Use Agreement by and between Allan and Shirley Klein, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated August 1, 2018.
vi.Agreement Salt Water Permit and Easement by and between Too Far Farms, LLLC, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated February 23, 2012.
vii.Agreement Salt Water Permit and Easement by and between Delmer and Marcelline Rink, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated July 16, 2008, as assigned pursuant to that certain Contract for Deed and Right of First Refusal on Surface and Minerals by and between Delmer and Marcelline Rink, as sellers, and Mark Johnsrud and Maribeth Johnsrud, as buyers, dated December 27, 2011.
viii.Agreement Salt Water Permit and Easement by and between Doug Paluck, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated November 16, 2007.
ix.Agreement Salt Water Permit and Easement by and between Dennis and Phonda Rehak, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated October 12, 2007.
x.Salt Water Permit and Easement Agreement by and between Mark D. Johnsrud, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated September 23, 2013.
xi.Agreement Salt Water Permit and Easement by and between Daryl Locken and Pam Locken, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated December 21, 2012.
xii.Agreement Salt Water Permit and Easement by and between Daryl and Pam Locken, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated August 27, 2009.
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xiii.Lease Agreement by and between James R. Jacobson, as lessor, and Landtech Corporation, as lessee, dated January 12, 1998.
xiv.Salt Water Permit and Easement Agreement by and between Mark D. Johnsrud, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated September 23, 2013.
xv.Agreement Salt Water Permit and Easement by and between Vernon and Karen Klose, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated June 19, 2007.
xvi.[Lease Agreement by and between B.A. Green, as lessor, and Rooney Operating Co. (Elk Disposal), as lessee, dated October 5, 1984.
xvii.Agreement Salt Water Permit and Easement by and between John and Katy Wahlstom, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated May 26, 2006.
xviii.Salt Water Disposal Facility Agreement and Easement by and between Caroline Olson, Sharon Robinson, Thomas Toussaint and William Toussaint, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated August, 2018.
xix.Memorandum of Salt Water Disposal Facility Agreement and Easement by and between Caroline Olson, Sharon Robinson, Thomas Toussaint and William Toussaint, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated September 30, 2013.
xx.Salt Water Permit and Easement Agreement by and between Scoop Dore Family, LLC, as lessor, and Landtech Enterprises, LLC, as lessee, dated October 1, 2017.
xxi.Salt Water Permit and Easement Agreement by and between Romo Brothers Partnership, as lessor, and Landtech Enterprises, L.L.C., as lessee, dated May 1, 2011.
xxii.Salt Water Disposal Agreement by and between Oneida Gordon, Life Estate, by John W. Gordon, Agent and Attorney in Fact, and John W Gordon, Ramsey Ruel Gordon, and Arnold Bert Gordon, as lessor, and Key Production Company, Inc., as lessee, as assigned by that certain Assignment of Salt Water Disposal Agreement by and between Key Production Company, Inc., as assignor, and Greer Exploration, Corp., as assignee, dated April 4, 2005.
xxiii.Commercial Salt Water Disposal Agreement by and between Harvco, LLC, as lessor, and Greer Exploration Corporation, as lessee, dated May 26, 2009.
xxiv.Salt Water Disposal Agreement by and between Pickering Investments, LLC, as lessor, and Greer Exploration Corporation, as lessee, dated April 18, 2007.
xxv.Commercial Salt Water Disposal Agreement by and between Pickering Investments, LLC, as lessor, and Greer Exploration Corporation, as lessee, dated May 26, 2009.
xxvi.Salt Water Disposal Lease Agreement by and between RCS Saltwater, LLC, as lessor, and Greer Exploration, Corp., as lessee, dated February 27, 2008, as amended by that
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certain First Amendment to Salt Water Disposal Lease Agreement by and between RCS Saltwater, LLC, as lessor, and Heckmann Water Resources Corporation, as lessee, dated May 31, 2012, as evidenced by that certain Memorandum of Lease Amendment dated May 31, 2012.
xxvii.Saltwater Injection Easement and Surface Use Agreement by and between Complete Vacuum and Rental, LLP, as operator, and Grace Environmental, LLC, as surface owner, dated May 1, 2008, as evidenced by that certain Memorandum of Saltwater Injection Easement Agreement, dated May 1, 2008.
xxviii.Salt Water Disposal Lease by and between Carol Goff, as lessor, and Heckmann Water Resources (CVR), Inc., as lessee, dated December 12, 2011.
xxix.Oil and Gas Lease by and between Eva Jean Root Wolf, Robert A. Wold, Roger Norman Root, and Lewis Porter Root, as lessor, and James Oberle, as lessee, dated October 30, 1982, as amended by that certain Amendment to Oil and Gas Lease dated October 5, 1983, and as partially assigned pursuant to that certain Assignment of Oil and Gas Lease by and between James Oberle, as assignor, and Torent Oil & Gas Company, as assignee, dated October 3, 1983, and as assigned pursuant to that certain Assignment of Oil and Gas Leases by and between Torent Oil and Gas Company, as assignor, and Ray Pander Trucking, Inc., as assignee, dated February 4, 1992.
xxx.Oil and Gas Lease by and between Evan Jean Wolf, Robert Wolf, and Roger Norman Root, as lessor, and Duck Creek Energy Inc., as lessee, dated April 14, 1986, as assigned pursuant to that certain Assignment of Oil and Gas Lease by and between Duck Creek Energy, Inc., as assignor, and Torent Oil and Gas Company, as assignee, dated December 17, 1991, and as assigned pursuant to that certain Assignment of Oil and Gas Leases by and between Torent Oil and Gas Company, as assignor, and Ray Pander Trucking, Inc., as assignee, dated February 4, 1992.
xxxi.Oil and Gas Lease by and between John J. Blazek and Delores J. Blazek, as lessor, and Management Control Corporation, as lessee, dated June 15, 1973, as amended by that certain Amendment to Agreement dated December 17, 1974.
xxxii.Saltwater Disposal Agreement by and between John J. Blazek and Delores J. Blazek, as lessor, and Nucorp Energy Company, as lessee, dated November 9, 1983, as amended by that certain Amendment to Agreement dated December 17, 1974, and that certain Assignment by and between The Canton Oil & Gas Company, as assignor, and Arvilla Oilfield Services, LLC, as assignee, dated June 24, 2004, and that certain Assignment by and between Arvilla Oilfield Services, LLC, as assignor, and Ray Pander Trucking, Inc., dated October 4, 2007.


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SCHEDULE 1

ASSIGNOR ENTITIES

Landtech Enterprises, L.L.C., a North Dakota limited liability company
Heckmann Water Resources Corporation, a Texas corporation
Heckmann Water Resources (CVR), Inc., a Texas corporation


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