Exhibit 10.1
FIRST AMENDMENT TO LOAN AGREEMENT
This First Amendment to Loan Agreement (the “Amendment”) dated effective January 25, 2021 (the “Effective Date”), is entered into 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 and Lender are parties to that certain Loan Agreement dated November 16, 2020 (the “Loan Agreement”) related to the following loans from Lender 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”) 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), items (i) through (iv) collectively being the “Loan”.
B.The obligations of Borrower under the Loan Agreement and the Loan are memorialized by corresponding promissory notes (each a “Promissory Note” and collectively the “Promissory Notes”).
C.The Loan Agreement, the Loan and the Promissory Notes are secured by the Collateral as defined in the Loan Agreement.
D.The Loan Agreement, the Loan and the Promissory Notes are unconditionally and absolutely guaranteed by the certain affiliated parties of Borrower (each a “Guarantor” and collectively the “Guarantors”) pursuant to the terms and conditions of the Guaranty dated November 16, 2020 (the “Guaranty”).
E.Borrower has requested an increase in the amount of the Letter of Credit Loan from $4,839,000.00 to $5,349,000.00. Lender has agreed to such request, provided the Borrower and Guarantors execute this Amendment and the documents referenced herein.
NOW THEREFORE, in consideration of the mutual agreements contained in this Amendment, Lender and Borrower expressly agree as follows:
Article 1
Amendments to Loan Agreement and Letter of Credit Loan
1.1 Incorporation of Recitals. The foregoing Recitals are true and accurate statements of fact and are incorporated into the Loan Agreement herein by reference.
1.2 Amended and Restated Promissory Note (Letter of Credit Loan). In order to memorialize the increase in the amount of the Letter of Credit Loan from $4,839,000.00 to $5,349,000.00, Borrower shall, simultaneously with the execution of this Amendment, execute and deliver to Lender the Amended and Restated Promissory Note (Letter of Credit Loan) in form and content similar to Exhibit A attached hereto.
Article 2
Representations and Warranties
Borrower represents and warrants to the Lender as follows:
2.1 No Litigation. There are no lawsuits or other similar legal action pending or threatened against Borrower which, if adversely determined, would have a material adverse effect on the condition (financial or otherwise), business, properties or assets of Borrower and Guarantors taken as a whole.
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2.2 Authority and Validity. The Borrower and each Guarantor has the power and are authorized to enter into and perform this Amendment. The Borrower has complied with all laws, statutes and ordinances of all federal, state and local governmental entities having jurisdiction over it. The Borrower represents and warrants that this Amendment is a legal, valid and binding agreement, enforceable in accordance with its terms and will be binding upon the Borrower.
Article 3
Default
3.1 Incorporation of Terms. The terms of this Amendment (together with the attached two (2) page Acknowledgement and Agreement of Guarantors) are expressly incorporated into the Loan Agreement as if set forth in full therein. Except as expressly amended by this Amendment, the Loan Agreement and the Promissory Notes (which shall as of the Effective Date include the Amended and Restated Promissory Note (Letter of Credit Loan) but shall exclude the November 16, 2021 Promissory Note (Letter of Credit Loan)) will remain in full force and effect in accordance with their original terms, not subject to any defense, counterclaim or right of set-off.
3.2 Conflicts. In the event of a conflict between the terms and conditions of this Amendment, the Loan Agreement and the Promissory Notes, the terms and conditions of this Amendment will take precedence.
3.3 No Commitment. Except to the limited extent specifically set forth in this Agreement, Lender has not committed or agreed to restructure any indebtedness of the Borrower. Lender has no obligation to make any future loans to the Borrower.
3.4 No Waiver; Cumulative Remedies. No failure or delay on the part of Lender in exercising any right, power or remedy under this Amendment or any instrument or document referenced herein will operate as a waiver thereof; nor will any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy in favor of Lender.
3.5 Costs and Attorneys’ Fees. Borrower agrees to pay all expenses, including appraisal fees, legal expenses, and attorneys’ fees incurred by Lender in preparing this Amendment and any related documents and enforcing the obligations and provisions of this Amendment.
3.6 Amendments. No amendment, modification, termination, or waiver of any provision of this Amendment will be effective unless it is in writing and signed by Lender, and then such waiver or consent will be effective only in the specific instance and for the specific purpose for which given.
3.7 Time of the Essence. Time is of the essence in the performance of the obligations under this Amendment.
3.8 Severability. Any provision of this Amendment which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof.
3.9 Successors and Assigns. This Amendment will be binding upon and inure to the benefit of the parties and their respective successors and assigns, except that the Borrower may not assign or transfer its rights or obligations hereunder.
3.10 Presumptions. The Borrower agrees that in the event that any dispute arises in the interpretation or construction of this Amendment, no presumption will arise in favor of any party based on drafting of this Amendment.
3.11 Counterparts. This Amendment 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 Amendment 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 Amendment 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, may be signed in one or more counterparts, each of which will be deemed to be an original and all of which will constitute one and the same instrument.
3.12 Ackowledgement and Agreement by Guarantors. The Acknowledgement and Agreement by Guarantors attached hereto, shall constitute a part of this Amendment.
LENDER:
FIRST INTERNATIONAL BANK & TRUST
a North Dakota banking corporation
By: /s/ Drew Flaagan
Drew Flaagan
Its: Vice President
BORROWER:
NUVERRA ENVIRONMENTAL SOLUTIONS, INC.
a Delaware corporation
By: /s/ Eric Bauer
Printed Name: Eric Bauer
Its: Chief Financial Officer
ACKNOWLEDGEMENT AND AGREEMENT BY GUARANTORS
(page 1 of 2)
Each Guarantor below acknowledges and agrees the Guaranty referenced in the attached First Amendment to Loan Agreement (the “Amendment”) is in full force and effect and is not subject to any defenses or claims of setoff. Further, each Guarantor consents to the terms, provisions and conditions of the Amendment, as well as any agreements and documents signed in conjunction with the Amendment. Each Guarantor specifically states and agrees the Guaranty covers all obligations of the Borrower under the Amendment.
GUARANTORS:
BADLANDS POWER FUELS, LLC, a Delaware limited liability company
By: /s/ Eric Bauer
Printed Name: Eric Bauer
Its: Chief Financial Officer
BADLANDS POWER FUELS, LLC, a North Dakota limited liability company
By: /s/ Eric Bauer
Printed Name: Eric Bauer
Its: Chief Financial Officer
LANDTECH ENTERPRISES, L.L.C., a North Dakota limited liability company
By: /s/ Eric Bauer
Printed Name: Eric Bauer
Its: Chief Financial Officer
IDEAL OILFIELD DISPOSAL, LLC, a North Dakota limited liability company
By: /s/ Eric Bauer
Printed Name: Eric Bauer
Its: Chief Financial Officer
ACKNOWLEDGEMENT AND AGREEMENT BY GUARANTORS
(page 2 of 2)
Each Guarantor below acknowledges and agrees the Guaranty referenced in the attached First Amendment to Loan Agreement (the “Amendment”) is in full force and effect and is not subject to any defenses or claims of setoff. Further, each Guarantor consents to the terms, provisions and conditions of the Amendment, as well as any agreements and documents signed in conjunction with the Amendment. Each Guarantor specifically states and agrees the Guaranty covers all obligations of the Borrower under the Amendment.
GUARANTORS:
HECKMANN WATER RESOURCES CORPORATION, a Texas corporation
By: /s/ Eric Bauer
Printed Name: Eric Bauer
Its: Chief Financial Officer
HECKMANN WATER RESOURCES (CVR), INC., a Texas corporation
By: /s/ Eric Bauer
Printed Name: Eric Bauer
Its: Chief Financial Officer
Exhibit 10.2
AMENDED AND RESTATED PROMISSORY NOTE
(Letter of Credit Loan)
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$5,349,000.00
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Watford City, North Dakota
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January 25, 2021
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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 Five Million Three Hundred Forty Nine Thousand and 00/100 Dollars ($5,349,000.00), 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.
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.
THIS PROMISSORY NOTE IS AN AMENDMENT AND RESTATEMENT OF THAT CERTAIN PROMISSORY NOTE OF BORROWER IN FAVOR OF LENDER IN THE ORIGINAL PRINCIPAL AMOUNT OF FOUR MILLION EIGHT HUNDRED THIRTY NINE AND AND 00/100 DOLLARS ($4,839,000.00) DATED NOVEMBER 18, 2020.
NUVERRA ENVIRONMENTAL SOLUTIONS, INC.,
a Delaware corporation
By: /s/ Eric Bauer
Printed Name: Eric Bauer
Its: Chief Financial Officer