On July 29, 2016, Nuverra Environmental Solutions, Inc. (the “Company”) entered into a First Amendment to Escrow Agreement (the “Escrow Agreement Amendment”) by and among Mark D. Johnsrud, the Company’s chairman and chief executive officer, the Company, and U.S. Bank National Association, a national banking association (“Escrow Agent”), which amends the Escrow Agreement (the “Escrow Agreement”), dated as of April 15, 2016, by and among Mr. Johnsrud, the Company, and the Escrow Agent. As previously disclosed, Mr. Johnsrud had deposited $5.0 million into escrow pursuant to the Escrow Agreement for the purpose of securing his backstop obligations under the Company’s previously announced $5.0 million equity rights offering (the “Rights Offering”).

Pursuant to the Escrow Agreement Amendment, the Company and Mr. Johnsrud agreed to an irrevocable early release of the $5.0 million in escrow to the Company, which was used to pay down the Company’s Amended and Restated Credit Facility, as amended (the “ABL Facility”), by and among Wells Fargo Bank, National Association, as Agent (“Agent”), the lenders named therein (“Lenders”), and the Company. In exchange for the release of the $5.0 million, on July 29, 2016, the Company deposited into escrow an aggregate of 20,312,500 shares of its common stock (the “Escrow Shares”), which represents the shares underlying the subscription rights and the backstop fee. The Escrow Shares will be deemed voted for and against any matters submitted to the Company’s stockholders in the same proportion as the vote of the common stock of the Company on any such matter. The Escrow Shares were issued in reliance upon an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

Upon consummation of the Rights Offering, the number of Escrow Shares disbursed to Mr. Johnsrud from the escrow account will be reduced by the aggregate number of shares of common stock subscribed for in the Rights Offering and the corresponding number of shares of common stock underlying the backstop fee payable to Mr. Johnsrud. Any Escrow Shares not disbursed to Mr. Johnsrud will be returned to the Company. Upon consummation of the Rights Offering, the Company will refund to Mr. Johnsrud an amount equal to the aggregate amount of gross proceeds raised from subscribing stockholders in the Rights Offering. The Company expects to consummate the Rights Offering in the second half of fiscal 2016.

On July 29, 2016, the Agent extended the deadline to consummate the Rights Offering from July 29, 2016 to August 5, 2016. The Company is currently seeking from the Lenders an amendment to the ABL Facility to further extend the date to consummate the Rights Offering or to waive the requirement to consummate the Rights Offering by a date certain. There can be no assurance that the Company will ultimately be able to obtain such concessions from the Lenders. Failure to obtain an extension or waiver by August 5, 2016 will result in a covenant default under the ABL Facility.