Exhibit 10.5
EXECUTION VERSION
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, (I) THE LIENS AND SECURITY
INTERESTS GRANTED TO THE AGENT PURSUANT TO THIS AGREEMENT ARE EXPRESSLY SUBJECT
AND SUBORDINATE TO THE LIENS AND SECURITY INTERESTS GRANTED IN FAVOR OF THE
FIRST LIEN CLAIMHOLDERS (AS DEFINED IN THE INTERCREDITOR AGREEMENT REFERRED TO
BELOW) AND (II) THE EXERCISE OF ANY RIGHT OR REMEDY BY THE AGENT OR ANY OTHER
SECURED PARTY HEREUNDER IS SUBJECT TO THE LIMITATIONS AND PROVISIONS CONTAINED
IN THE INTERCREDITOR AGREEMENT DATED AS OF APRIL 15, 2016 (AS AMENDED, RESTATED,
SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR
AGREEMENT"), AMONG WELLS FARGO BANK, NATIONAL ASSOCIATION, AS REVOLVING CREDIT
AGREEMENT AGENT, WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TERM LOAN AGENT, AND
WILMINGTON SAVINGS FUND SOCIETY, FSB, AS SECOND LIEN AGENT. IN THE EVENT OF ANY
CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THE TERMS OF THIS
AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN.
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement"), dated as of April 15, 2016, among
the Persons listed on the signature pages hereof as "Grantors" and those
additional entities that hereafter become parties hereto by executing the form
of Joinder attached hereto as Annex 1 (each, a "Grantor" and collectively, the
"Grantors"), and Wilmington Savings Fund Society, FSB ("Wilmington"), in its
capacity as collateral agent for each member of the Noteholder Group (in such
capacity, together with its successors and assigns in such capacity, "Agent").
W I T N E S S E T H:
WHEREAS, Nuverra Environmental Solutions, Inc., a Delaware corporation
("Issuer"), and Wilmington, as trustee (the "Trustee") are parties to that
certain Indenture dated as of April 15, 2016 (as the same may be amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Indenture") relating to its 12.500% / 10.000% Senior Secured Second Lien Notes
due 2021 (the "Notes");
WHEREAS, Agent has agreed to act as collateral agent for the benefit of the
Noteholder Group in connection with the transactions contemplated by the
Indenture and this Agreement;
WHEREAS, in order to induce the holders of Notes to acquire the Notes and the
Trustee to execute the Indenture, each Grantor has agreed to grant to Agent, for
the benefit of the Noteholder Group, a continuing security interest in and to
the Collateral in order to secure the prompt and complete payment, observance
and performance of, among other things, the Secured Obligations;
WHEREAS, each Grantor (other than Issuer) is a Subsidiary of Issuer and, as
such, will benefit by virtue of the financial accommodations extended to Issuer
by the Noteholder Group.
NOW, THEREFORE, for and in consideration of the recitals made above and other
good and valuable consideration, the receipt, sufficiency and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
1. Definitions; Construction.
(a) All initially capitalized terms used herein (including in the preamble and
recitals hereof) without definition shall have the meanings ascribed thereto in
the Indenture. Any terms (whether capitalized