INSTRUCTIONS FOR USE OF
NUVERRA ENVIRONMENTAL SOLUTIONS, INC.
SUBSCRIPTION RIGHTS CERTIFICATES
CONSULT THE INFORMATION AGENT,
YOUR BANK OR BROKER AS TO ANY QUESTIONS
The following instructions relate to a rights offering (the Rights Offering) by Nuverra Environmental Solutions, Inc., a Delaware corporation (Nuverra), to the holders of record (the Recordholders) of its common stock, par value $0.01 per share (the Common Stock), as described in the prospectus dated December 10, 2018 (the Prospectus). Recordholders of Common Stock as of 5:00 p.m., New York Time, on December 10, 2018 (the Record Date) are receiving, at no charge, non-transferable subscription rights (the Subscription Rights) to subscribe for and purchase shares of Common Stock (the Underlying Shares). In the Rights Offering, Nuverra is offering up to 3,381,894 Underlying Shares.
Each Recordholder will receive one Subscription Right for each 3.615488244 shares of Common Stock owned of record as of 5:00 p.m., New York Time, on the Record Date. The Subscription Rights will expire, if not exercised prior to 5:00 p.m., New York Time, on December 28, 2018, unless extended (the Expiration Time). Each Subscription Right entitles the holder thereof to a basic subscription right to purchase one share of Common Stock at a subscription price of $9.61 per share (the Subscription Price).
Stockholders who fully exercise their Basic Subscription Rights will be entitled to subscribe for additional shares of Common Stock that remain unsubscribed as a result of unexercised Basic Subscription Rights (the Over-Subscription Privilege). The Majority Stockholders, as defined in the Prospectus, will only participate in Over-Subscription Privilege to the extent the other stockholders do not subscribe for and purchase all of the available shares in the Over-Subscription Privilege.
Any excess subscription payments (including payments related to exercise of basic Subscription Rights and payments related to the Over-Subscription Privilege) received by American Stock Transfer & Trust Company, LLC, the subscription agent (the Subscription Agent) will be returned, without interest or penalty, within 10 business days following the closing of the Rights Offering.
Nuverra will not be required to issue shares of its Common Stock to you if the Subscription Agent does not receive your payment prior to the Expiration Time, regardless of when you send the subscription payment and related documents. Nuverra may extend the Expiration Time by giving oral or written notice to the Subscription Agent on or before the Expiration Time. If Nuverra elects to extend the Expiration Time, it will issue a press release announcing such extension no later than 9:00 a.m., New York Time, on the next business day after the most recently announced Expiration Time. The Subscription Rights will be evidenced by non-transferable Rights certificates (the Rights Certificates).
The number of Subscription Rights to which you are entitled is printed on the face of your Rights Certificate. You should indicate your wishes with regard to the exercise of your Subscription Rights by completing the appropriate portions of your Rights Certificate and returning the certificate to the Subscription Agent. You must fully exercise your Basic Subscription Right to be entitled to purchase shares pursuant to the Over-Subscription Privilege.
YOUR RIGHTS CERTIFICATES, AND SUBSCRIPTION PRICE PAYMENT FOR EACH RIGHT THAT IS EXERCISED PURSUANT TO THE SUBSCRIPTION RIGHT, INCLUDING FINAL CLEARANCE OF ANY CHECKS, MUST BE RECEIVED BY AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC ON OR BEFORE THE EXPIRATION TIME. ONCE A HOLDER OF SUBSCRIPTION RIGHTS HAS EXERCISED THE SUBSCRIPTION RIGHT, SUCH EXERCISE MAY NOT BE REVOKED. SUBSCRIPTION RIGHTS NOT EXERCISED PRIOR TO THE EXPIRATION TIME OF THE RIGHTS OFFERING WILL EXPIRE.
Method of Subscription Exercise of Subscription Rights.
To exercise Subscription Rights, complete your Rights Certificate and send the properly completed and executed Rights Certificate evidencing such Subscription Rights, together with (i) payment in full of the Subscription Price for each Underlying Share subscribed for pursuant to the Basic Subscription Right, and (ii) payment in full of the Subscription Price for each additional share which you desire to acquire pursuant to the Over-Subscription Privilege to the Subscription Agent, on or prior to the Expiration Time. Payment of the Subscription Price (including with respect to your Basic Subscription Right and the Over-Subscription Privilege, if applicable) will be held in a segregated account to be maintained by the Subscription Agent. All payments must be made in U.S. dollars for the full number of Underlying Shares being subscribed for (a) by check or bank draft drawn upon a U.S. bank payable to American Stock Transfer & Trust Company, LLC, as Subscription Agent for Nuverra Environmental Solutions, Inc., or (b) by wire transfer of immediately available funds, to the account maintained by the Subscription Agent for purposes of accepting subscriptions in the Rights Offering at JPMorgan Chase Bank, 55 Water Street, New York, New York 10005, ABA #021000021, Account # 530-354616 American Stock Transfer FBO Nuverra Environmental Solutions, Inc. (the Subscription Account). Any wire transfer should clearly indicate the identity of the subscriber who is paying the Subscription Price by wire transfer. Payments will be deemed to have been received upon (i) clearance of any uncertified check, (ii) receipt by the Subscription Agent of any certified check or bank draft drawn upon a U.S. bank or (iii) receipt of wire transfer of funds in the Subscription Account designated above. If paying by uncertified personal check, please note that the funds paid thereby may take five or more business days to clear. Accordingly, Subscription Rights holders who wish to pay the Subscription Price by means of uncertified personal check are urged to make payment sufficiently in advance of the Expiration Time to ensure that such payment is received and clears by such date and are urged to consider payment by means of certified or cashiers check, money order or wire transfer of funds.
DO NOT SEND RIGHTS CERTIFICATES OR PAYMENTS TO THE COMPANY.
The Rights Certificate and payment of the Subscription Price must be delivered to the Subscription Agent by one of the methods described below:
CONTACTING THE SUBSCRIPTION AGENT AND INFORMATION AGENT. The address and telephone numbers of the Subscription Agent and Information Agent are as follows:
American Stock Transfer & Trust Company, LLC
Attn: Reorganization Department
6201 15th Avenue
Brooklyn, NY 11219
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10005
Delivery to an address other than the address listed above does not constitute valid delivery.
By making arrangements with your broker, dealer, bank or other nominee for the delivery of funds on your behalf you may also request such broker, dealer, bank or other nominee to exercise the Rights Certificate on your behalf.
If you do not indicate the number of Subscription Rights being exercised, or do not forward full payment of the Subscription Price, then you will be deemed to have exercised your Subscription Rights with respect to the maximum number of whole Subscription Rights that may be exercised with the aggregate Subscription Price you delivered to the Subscription Agent. If your aggregate Subscription Price is greater than the amount you owe for exercise of your Subscription Right in full, the excess subscription payment received by the Subscription Agent will be returned to you, without interest or penalty, within 10 business days following the closing of the Rights Offering. Stockholders must pay for their desired Over-Subscription Privilege Shares at the time of exercise of their Basic Subscription Rights. Such funds will be returned to the stockholder, without interest, to the extent the stockholder is not allocated all of its requested shares pursuant to the Over-Subscription Privilege.
Brokers, dealers, banks and other nominees who exercise Subscription Rights on behalf of beneficial owners are required to certify to Nuverra and the Subscription Agent, as to the aggregate number of Subscription Rights that have been exercised pursuant to the basic Subscription Rights, whether the Basic Subscription Rights of each beneficial owner on whose behalf the nominee holder is acting has been exercised in full, and the number of our shares of Common Stock being subscribed pursuant to the over-subscription privilege of each beneficial owner on whose behalf the nominee holder is acting.
Issuance of Common Stock.
The following deliveries and payments will be made to the address shown on the face of your Rights Certificate, unless you provide instructions to the contrary in your Rights Certificate.
(a) Subscription Right. As soon as practicable after the Expiration Time and the valid exercise of Subscription Rights, the Subscription Agent will issue book entry (DRS) confirmations to each Recordholder confirming the number of shares of Common Stock acquired.
(b) Excess Cash Payments. Within 10 business days following the closing of the Rights Offering and after all adjustments contemplated by the terms of the Rights Offering have been effected, any excess subscription payments received in payment of the Subscription Price by the Subscription Agent will be mailed to each Recordholder, without interest or penalty.
No Sale or Transfer of Rights.
The Subscription Rights granted to you are non-transferable and, therefore, you may not sell, transfer or assign your Subscription Rights to anyone.
(a) Execution by Registered Holder. The signature on the Rights Certificate must correspond with the name of the registered holder exactly as it appears on the face of the Rights Certificate without any alteration or change whatsoever. Persons who sign the Rights Certificate in a representative or other fiduciary capacity must indicate their capacity when signing and, unless waived by the Subscription Agent in its sole and absolute discretion, must present to the Subscription Agent satisfactory evidence of their authority to so act.
(b) Execution by Person Other than Registered Holder. If the Rights Certificate is executed by a person other than the holder named on the face of the Rights Certificate, proper evidence of authority of the person executing the Rights Certificate must accompany the same unless, for good cause, the Subscription Agent dispenses with proof of authority.
(c) Signature Guarantees. If you specify special payment or delivery instructions, your signature must be guaranteed by an eligible institution, such as a member firm of a registered national securities exchange or a member of the Financial Industry Regulatory Authority, Inc., or a commercial bank or trust company having an office or correspondent in the United States.
Method of Delivery.
The method of delivery of Rights Certificates and payment of the Subscription Price to the Subscription Agent will be at the election and risk of the Recordholder. However, if you elect to exercise your Subscription Rights, Nuverra urges you to consider using a certified check or wire transfer of funds to ensure that the Subscription Agent receives your funds prior to the Expiration Time. If you send an uncertificated check, payment will not be deemed to have been received by the Subscription Agent until the check has cleared, but if you send a certified check, bank draft drawn upon a U.S. bank or wire transfer funds directly to the Subscription Agents account, payment will be deemed to have been received by the Subscription Agent immediately upon
receipt of such instruments and wire transfer. Any personal check used to pay for shares of Common Stock must clear the appropriate financial institutions prior to the Expiration Time. The clearinghouse may require five or more business days to clear an uncertified check. Accordingly, Recordholders that wish to pay the Subscription Price by means of an uncertified personal check are urged to make payment sufficiently in advance of the Expiration Time to ensure such payment is received and clears by such date.
Special Provisions Relating to the Delivery of Rights through the Depository Trust Company.
In the case of Subscription Rights that are held of record through The Depository Trust Company (DTC), exercises of the Subscription Right may be effected by instructing DTC to transfer Subscription Rights from the DTC account of such holder to the DTC account of the Subscription Agent, together with certification as to the aggregate number of Subscription Rights exercised pursuant to the Subscription Right by each beneficial owner of Subscription Rights on whose behalf such nominee is acting, and payment of the Subscription Price for each share of Common Stock subscribed for pursuant to the Subscription Right.
Questions should be addressed to D.F. King & Co., the Information Agent:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10005