Item 1.01.
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Entry into a Material Definitive Agreement.
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Restructuring Support Agreement Amendment
On April 20, 2017, Nuverra Environmental Solutions, Inc. (the Company) and its subsidiaries (the Company and its subsidiaries,
collectively, Nuverra) entered into a First Amendment to Restructuring Support Agreement (the RSA Amendment) with the holders of over 80% (the Supporting Noteholders) of the Companys outstanding 12.5%/10.0%
Senior Secured Second Lien Notes due 2021 (the 2021 Notes), which amends the Restructuring Support Agreement, dated as of April 9, 2017, by and among Nuverra and the Supporting Noteholders (the RSA). The RSA Amendment
amends the RSA by extending the date by which Nuverra is required to commence a solicitation of votes for its prepackaged plan of reorganization under chapter 11 of the United States Bankruptcy Code (the Plan) from April 20, 2017 to
April 28, 2017 and extending the date Nuverra is required to commence the chapter 11 cases from April 24, 2017 to May 1, 2017.
The
foregoing description of the RSA Amendment is only a summary and does not purport to be a complete description of the terms and conditions under the RSA Amendment, and such description is qualified in its entirety by reference to the full text of
the RSA Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form
8-K
and is incorporated by reference into this Item 1.01.
Term Loan Credit Agreement Amendment
On
April 24, 2017 (the Ninth Amendment Effective Date), the Company entered into an Ninth Amendment (Increase Amendment) to Term Loan Credit Agreement (the Ninth Term Loan Agreement Amendment) by and among the lenders named
therein (the Term Loan Lenders), Wilmington Savings Fund Society, FSB (Wilmington), as administrative agent, Wells Fargo Bank, National Association (Wells Fargo), as collateral agent, the Company, and the
guarantors named therein, which further amends the Term Loan Credit Agreement, dated April 15, 2016, by and among Wilmington, the Term Loan Lenders, and the Company (the Term Loan Agreement), by increasing the Term Loan
Lenders commitment and the principal amount borrowed by the Company under the Term Loan Agreement from $69,320,000 to $75,370,000 (the Ninth Amendment Additional Term Commitment). The Ninth Amendment Additional Term Commitment is
in partial satisfaction of the requirement to fund Supplemental Term Loans (as defined in the Fifth Amendment to Term Loan Credit Agreement).
Pursuant to
the Ninth Term Loan Agreement Amendment, the Company is required to use a portion of the net cash proceeds of the Ninth Amendment Additional Term Commitment of $6.05 million to pay the fees, costs and expenses incurred in connection with the
Ninth Term Loan Agreement Amendment. The remaining net cash proceeds, subject to satisfaction of certain release conditions, will be available for general operating, working capital and other general corporate purposes. The Company intends to use
the additional liquidity provided by the Ninth Amendment Additional Term Commitment to fund its business operations until the filing of the Plan.
As a
condition to the effectiveness of the Ninth Term Loan Agreement Amendment, the Company was required to enter into a letter agreement with the agent under the Companys asset-based lending facility (the ABL Facility) providing, among
other things, that the agent under the ABL Facility would not exercise any remedies with respect to the Ninth Amendment Additional Term Commitment deposited in the Companys Master Account (as defined in the ABL Facility), subject to the terms
of such letter agreement.
The Ninth Term Loan Agreement Amendment requires the Company, among other things, to (i) comply with the terms and
conditions of the RSA; and (ii) within 5 days of the Ninth Amendment Effective Date, cause mortgage title policies to be issued for all real property collateral under the Companys Term Loan Agreement and to pay all premiums for such title
policies.
The foregoing description of the Ninth Term Loan Agreement Amendment is only a summary and does not purport to be
a complete description of the terms and conditions under the Ninth Term Loan Agreement Amendment, and such description is qualified in its entirety by reference to the full text of the Ninth Term Loan Agreement Amendment, a copy of which is filed as
Exhibit 10.2 to this Current Report on Form
8-K
and is incorporated by reference into this Item 1.01.
Letter Agreement Regarding Ninth Amendment Additional Term Commitment
On April 24, 2017, in connection with the Ninth Term Loan Agreement Amendment, the Company and Wells Fargo entered into a letter agreement regarding the
Ninth Amendment Additional Term Commitment (the Ninth Amendment Letter Agreement). Pursuant to the Ninth Amendment Letter Agreement, Wells Fargo agreed to not exercise any remedies with respect to the cash proceeds received from the
Ninth Amendment Additional Term Commitment that are deposited in the Companys Master Account, subject to the terms of such Ninth Amendment Letter Agreement. In addition, the Ninth Amendment Letter Agreement provides that in the event Wells
Fargo or the lenders under the ABL Facility foreclose or otherwise obtain direct control over the Ninth Amendment Additional Term Commitment, such Ninth Amendment Additional Term Commitment shall be deemed to be held in trust by Wells Fargo or the
lenders under the ABL Facility for the benefit of the Term Loan Lenders.
The foregoing description of the Ninth Amendment Letter Agreement is only a
summary and does not purport to be a complete description of the terms and conditions under the Ninth Amendment Letter Agreement, and such description is qualified in its entirety by reference to the full text of the Ninth Amendment Letter
Agreement, a copy of which is filed as Exhibit 10.3 to this Current Report on
Form 8-K
and is incorporated by reference into this Item 1.01.
Intercreditor Agreement Amendments
On
April 24, 2017, in connection with the Ninth Term Loan Agreement Amendment, the Company acknowledged and agreed to the terms and conditions under Amendment No. 7 to Intercreditor Agreement (the Seventh Pari Passu Intercreditor
Agreement Amendment), dated April 24, 2017, by and among Wells Fargo, as pari passu collateral agent, Wells Fargo, as revolving credit agreement agent under the ABL Facility, and Wilmington, as administrative agent under the Term Loan
Agreement, which further amends the Intercreditor Agreement, dated as of April 15, 2016, between Wells Fargo, as pari passu collateral agent, Wells Fargo, as administrative agent under the ABL Facility, and Wilmington, as administrative agent
under the Term Loan Agreement. On April 24, 2017, in connection with the Ninth Term Loan Agreement Amendment, the Company acknowledged and agreed to the terms and conditions under Amendment No. 7 to Intercreditor Agreement (the
Second Lien Intercreditor Agreement Seventh Amendment), dated April 24, 2017, by and among Wells Fargo, as revolving credit agreement agent under the ABL Facility, Wilmington, as administrative agent under the Term Loan Agreement,
and Wilmington, as second lien agent under the Second Lien Intercreditor Agreement, which further amends the Intercreditor Agreement, dated as of April 15, 2016, between Wells Fargo, as administrative agent under the ABL Facility, Wilmington,
as administrative agent under the Term Loan Agreement, and Wilmington, as collateral agent under the indenture governing the 2021 Notes. The Seventh Pari Passu Intercreditor Agreement Amendment and the Second Lien Intercreditor Agreement Seventh
Amendment permit the Ninth Amendment Additional Term Commitment by increasing the Term Loan Cap (as defined therein) from $76,252,000 to $82,907,000. The Term Loan Cap is higher than the commitment under the Term Loan Agreement, as it includes, in
addition to the Term Loan Lenders commitment under the Term Loan Agreement, origination fees paid in kind and a 10% cushion.
The foregoing descriptions of the Seventh Pari Passu Intercreditor Agreement Amendment and Second Lien
Intercreditor Agreement Seventh Amendment are only summaries and do not purport to be a complete description of the terms and conditions under the Seventh Pari Passu Intercreditor Agreement Amendment and Second Lien Intercreditor Agreement Seventh
Amendment, and such descriptions are qualified in their entirety by reference to the full text of the Seventh Pari Passu Intercreditor Agreement Amendment and Second Lien Intercreditor Agreement Seventh Amendment, copies of which are filed as
Exhibits 4.1 and 4.2, respectively, to this Current Report on Form
8-K
and are incorporated by reference into this Item 1.01.