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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Current
Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
June 26, 2023
QualTek Services Inc.
(Exact Name of Registrant as Specified in Its
Charter)
Delaware |
|
001-40147 |
|
83-3584928 |
(State
or Other Jurisdiction
of Incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification No.) |
475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422
(Address of Principal Executive Offices, and
Zip Code)
(484)
804-4585
(Registrant’s Telephone Number, Including
Area Code)
None
(Former Name or Former Address, if Changed
Since Last Report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|
¨ |
Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425) |
|
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
¨ |
Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
¨ |
Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
Title
of each class |
Trading
Symbol(s) |
Name
of each exchange on which registered |
Class A Common Stock |
QTEKQ (1) |
The
Nasdaq Stock Market LLC (1) |
Warrants |
QTEWQ (1) |
The Nasdaq Stock Market LLC (1) |
(1) On May 24, 2023, we received a written notice from the Nasdaq Stock Market LLC (“Nasdaq”) notifying us that it would commence
proceedings to delist our Class A common stock and warrants. On June 2, 2023, our Class A common stock and warrants were suspended from
trading on Nasdaq and began trading over-the-counter under the symbols “QTEK” and “QTEWQ,” respectively.
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company x
If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.03 | Bankruptcy or Receivership. |
As previously disclosed, on May 24,
2023, QualTek Services Inc. (the “Company”) and certain of its subsidiaries (collectively with the Company, the
“Debtors” or the “Company Parties”) commenced voluntary cases (the “Chapter 11 Cases”) under
Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the
Southern District of Texas (the “Bankruptcy Court”). The Chapter 11 Cases are
being jointly administered under the lead case In re QualTek Services Inc., Case No. 23-90584 (CML). On
May 24, 2023, the Debtors filed a proposed joint plan of reorganization [Docket No. 18] (as amended, supplemented, or
modified, the “Plan”) and associated disclosure statement [Docket No. 17] (the “Disclosure Statement”)
in the Bankruptcy Court. Later that day, the Bankruptcy Court entered an order [Docket No. 90] that, among other things, approved
the Disclosure Statement on a conditional basis. On June 29, 2023, the Debtors filed the Debtors’ Joint Plan
of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code (Technical Modifications) [Docket No. 223], which
incorporated certain technical modifications to the Plan.
On June
30, 2023, the Bankruptcy Court entered the Order Approving the Debtors’ Disclosure Statement for, and Confirming, the Debtors’
Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 234] (the “Confirmation Order”),
which approved the Disclosure Statement on a final basis and confirmed the Plan. The Debtors expect that the effective date of the Plan
will occur once all conditions precedent to the Plan have been satisfied (the “Effective Date”).
Summary of the Plan
The following is a summary of the material terms
of the Plan as confirmed by the Bankruptcy Court. This summary highlights only certain substantive provisions of the Plan and is not intended
to be a complete description of the Plan. This summary is qualified in its entirety by reference to the full text of the Confirmation
Order, which includes the Plan as an exhibit, which is attached hereto as Exhibit 2.1 and incorporated herein by reference.
The Plan provides that, among other things:
| · | trade claims will be paid in the ordinary course of business during and after the Chapter 11 Cases; |
| · | on the Effective Date, the reorganized Company (the “Reorganized Company”) will issue a single
class of common equity interests to certain classes of creditors pursuant to the Plan; |
| · | on the Effective Date, the Company Parties will enter into a new asset-based credit facility on terms
consistent with those set forth in the term sheets (collectively, the “Term Sheets”) attached to the restructuring support
agreement, dated May 24, 2023, by and among the Company Parties and certain of the Company Parties’ stakeholders (the “Restructuring
Support Agreement”); |
| · | on the Effective Date, the Reorganized Company will enter into exit financing facilities, including, $25
million in principal amount of first lien term loans to be funded by new money investments from the Company’s post-petition term
loan lenders and on such other terms as set forth in the Term Sheets attached to the Restructuring Support Agreement; |
| · | on the Effective Date, the Company Parties’ pre- and post-petition term lenders will receive either
takeback debt pursuant to the aforementioned exit financing facilities or a portion of the new equity of the Reorganized Company; |
| · | on or as soon as reasonably practicable after the Effective Date, the new board of the Reorganized
Company will establish a management incentive plan; |
| · | the Reorganized Company will distribute new warrants issued pursuant to a new warrant agreement and a
portion of its new equity to holders of Convertible Notes Claims (as defined in the Plan), on such terms as set forth in the Term Sheets
attached to the Restructuring Support Agreement; |
| · | on the Effective Date, there will be no recovery for holders of the Company’s existing equity interests;
and |
| · | under the Restructuring Support Agreement, the Effective Date must occur within 65 days of the filing
of the Chapter 11 Cases. |
The Debtors’ emergence from bankruptcy is subject to, among other
things, consummation of the restructuring transactions described above and execution and delivery of all documents contemplated to be
executed and delivered prior to consummation of the Plan. The Debtors expect to emerge from bankruptcy on or around July 14, 2023.
Treatment of Class A Common Stock and Class B Common Stock
As of April 21, 2023, the Company had
27,805,659 shares of Class A common stock issued and outstanding and 23,304,200 shares of Class B common stock issued and
outstanding. On the Effective Date or the date on which distributions are made pursuant to the Plan (whichever is later), all
outstanding equity interests in the Company will be cancelled and holders of the Class A common stock, Class B common stock and
warrants will not receive a distribution on account of their equity interests. The Company cautions that trading in its securities
now and during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for these
securities may bear little or no relationship to the actual recovery, if any, by the holders in the Chapter 11 Cases. Upon the
Effective Date, the Company’s Class A common stock, Class B common stock and other equity interests will be canceled, and
therefore the Company’s stockholders and other equity holders will experience a complete loss on their investment.
Certain Information Regarding Assets and Liabilities of the Company
Parties
On June 30, 2023, the Company had total
assets of approximately $599,619 thousand and total liabilities of approximately $779,438 thousand. This financial information is
subject to the finalization and closing of the accounting books and records of the Company and has not been audited or reviewed by
the Company’s independent registered public accounting firm and is therefore subject to future reconciliation or adjustments. This
information should not be viewed as indicative of future results and actual results may differ materially from those described in this Current Report on Form 8-K.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Hisey Employment Offer Letter
As previously disclosed, in March 2023, Christopher S. Hisey, the Company’s
Chief Executive Officer and a member of the Company’s board of directors, notified the Company that he would not renew his employment
agreement with the Company (the “Prior Employment Agreement”). On June 26, 2023, the Company and Mr. Hisey entered into a
letter agreement (the “Letter Agreement”), under which Mr. Hisey has agreed to continue to work for the Company in his current
capacity for 30 days following the expiration of his Prior Employment Agreement on July 18, 2023. This 30-day period may be extended by
mutual agreement of the parties for additional 30-day periods during such time as Mr. Hisey and the Company discuss an alternative employment
arrangement. Under the Letter Agreement, Mr. Hisey’s base compensation and employee benefits remain the same as under the Prior Employment
Agreement.
The summary of the Letter Agreement set forth above does not purport
to be a complete statement of the terms of such document. The summary is qualified in its entirety by reference to the full text of the
Letter Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.
Forward Looking Statements
This Current Report on Form 8-K contains forward-looking
statements for the purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including
statements about the Company’s ability to successfully consummate the Restructuring and emerge from cases commenced under Chapter
11 of the Bankruptcy Code. Forward-looking statements are typically identified by words such as “plan,” “believe,”
“expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,”
“project,” “continue,” “could,” “may,” “might,” “possible,” “potential,”
“predict,” “should,” “would,” and other similar words and expressions (or the negative versions of
such words and expressions), but the absence of these words does not mean that a statement is not forward-looking.
These forward looking statements are subject to
risks, uncertainties and other factors, many of which are outside of the Company’s control, that could cause actual results or
outcomes to differ materially from the results or outcomes discussed in the forward looking statements, including, without
limitation, statements regarding: the effects of the Restructuring Support Agreement or any agreement between the Company and its
lenders and noteholders, including the Company’s ability to reduce its debt, strengthen its balance sheet and facilitate an
infusion of new capital; the effect of the bankruptcy process under Chapter 11 of the Bankruptcy Code (the “Chapter 11
process”) on the implementation of any restructuring transactions and the interests of various constituents, including the
holders of the Company’s equity interests; the length of time and the ability to complete the restructuring transactions and
the recapitalization of the Company Parties’ capital structure, which include a restructuring of the Company’s existing
debt, existing equity interests and certain other obligations (such restructuring transactions and the recapitalization of the
Company Parties’ capital structure, the “Restructuring”); the Company’s ability to continue as a going
concern; the ability of the Company to continue to operate in the ordinary course of business while the Restructuring and Chapter 11
process are pending and without disruptions to relationships with suppliers, customers, employees and other third parties and
regulatory authorities; potential adverse effects of the Restructuring and Chapter 11 process on the Company’s liquidity,
results of operations or business prospects; the availability of sufficient liquidity or operating capital during the pendency of
the Chapter 11 process; the Company’s expected position and ability to improve long-term capital structure and address its
debt service obligations following the completion of the Restructuring and Chapter 11 process; the impact of the delisting from
Nasdaq; the Company’s ability to obtain timely approval by the Bankruptcy Court with respect to the motions filed in
connection with the Chapter 11 process; the risks associated with third party motions during the Chapter 11 process and objections
to the Company’s Restructuring or other pleadings filed that could protract the Chapter 11 process or prevent the consummation
of the Restructuring or an alternative restructuring; the volatility in the price of the Company’s equity interests, including
as a result of the Restructuring or the Chapter 11 process; increased administrative and legal costs related to the Restructuring
and the Chapter 11 process; litigation and inherent risks involved in a restructuring or bankruptcy process; the Company’s
potential need to continue to engage with shareholders and debtholders with respect to its capital structure and the Restructuring;
the Company’s potential need to seek additional strategic alternatives, including by raising additional equity capital or
debt, by reducing or delaying its business activities, by initiating reductions in force, by selling assets or by restructuring,
refinancing, purchasing, repaying or otherwise retiring the Company’s outstanding debt; the Company’s ability to remain
compliant with all covenants in its existing and new debt; employee attrition and the Company’s ability to retain senior
management and other key personnel due to the distractions and uncertainties in connection with the Restructuring; the
Company’s ability to comply with the restrictions imposed by the terms and conditions of any new money financing arrangements;
the volatile global economic conditions and a downturn in the worldwide economy due to inflation, geopolitics, changes in raw
material and energy prices; interruptions in raw materials and energy supply; economic and other impacts from the military conflict
in Ukraine and the economic sanctions imposed due to the conflict; the impacts of global health crises and the measures put in place
by governments in response; the Company’s ability to maintain sufficient working capital; the costs associated with site
closures; the execution, impact or timing of the Company’s cost reduction programs and initiatives and risks related to local
law requirements in various jurisdictions; industry production capacity and operating rates; the supply demand balance for the
Company’s products and that of competing products; pricing pressures; technological developments; legal claims by or against
the Company; changes in government regulations; the impacts of increasing climate change regulations; geopolitical events;
cyberattacks; and public health crises.
Any forward-looking statement speaks only as of the
date on which it is made, and, except as required by law, the Company does not undertake any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible
for the Company to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors
and other cautionary statements and uncertainties described from time to time in the documents that the Company files with the U.S. Securities and Exchange Commission, including
the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as amended. The risk factors and other
factors noted therein could cause results, outcomes, expectations, and projections to differ materially from those contained in any forward-looking
statement.
Item 9.01 | Financial Statements and Exhibits. |
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
QUALTEK SERVICES INC. |
|
|
Date: July 7, 2023 |
By: |
/s/ Christopher S. Hisey |
|
Name: |
Christopher S. Hisey |
|
Title: |
Chief Executive Officer |
Exhibit 2.1
IN THE
UNITED STATES BANKRUPTCY COURT
for the Southern District of TexaS
HOUSTON DIVISION
|
) |
|
In re: |
) |
Chapter 11 |
|
) |
|
QUALTEK SERVICES INC., et al.,1 |
) |
Case No. 23-90584 (CML) |
|
) |
|
Debtors. |
) |
(Jointly Administered) |
|
) |
|
|
) |
|
ORDER APPROVING
THE DEBTORS’ DISCLOSURE
STATEMENT FOR, AND CONFIRMING, THE DEBTORS’ JOINT PLAN OF
REORGANIZATION PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE
The above-captioned debtors
(collectively, the “Debtors”) having:2
| a. | entered into that certain restructuring support agreement dated as of May 24, 2023 (as may be modified,
amended, or supplemented from time to time, and together with all term sheets, schedules, annexes, and exhibits appended thereto, the “Restructuring
Support Agreement”), by and among the Company Parties (as defined therein) and the Consenting Stakeholders; |
| b. | entered into that certain Debtor-in-Possession Term and Exit Loan Facilities Commitment Letter dated as
of May 24, 2023 (as may be modified, amended, or supplemented from time to time, and together with all schedules and exhibits appended
thereto, the “DIP-to-Exit Commitment Letter”), between the Debtors and the Backstop Parties; |
| c. | commenced, on May 24, 2023 (the “Petition Date”), these Chapter 11 Cases by filing
voluntary petitions for relief under chapter 11 of the Bankruptcy Code; |
| d. | filed, on May 24, 2023, the Debtors’
Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 17] (as amended, supplemented, or otherwise
modified from time to time including by virtue of the Plan Modifications (as defined below), the “Plan”) and the Disclosure
Statement Relating to the Debtors’ Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 85]
(as amended, supplemented, or otherwise modified from time to time, the “Disclosure Statement”); |
1 | A complete list of each of the Debtors in these Chapter 11 Cases
may be obtained on the website of the Debtors’ proposed claims and noticing agent at https://dm.epiq11.com/QualTek. The
location of Debtors’ principal place of business and the Debtors’ service address in these chapter 11 cases is 475 Sentry
Parkway E, Suite 200, Blue Bell, Pennsylvania 19422. |
| |
2 | Capitalized terms used but not otherwise defined in these findings
of fact, conclusions of law, and order (collectively, the “Confirmation Order”) have the meanings ascribed to them
in the Plan, the Disclosure Statement, or the Bankruptcy Code (each as defined herein), as applicable. The rules of interpretation set
forth in Article I.B of the Plan apply. |
| e. | filed, on May 24, 2023, the Declaration of Cari Turner, Chief Restructuring Officer of QualTek
Services Inc. and Certain of Its Affiliates and Subsidiaries, in Support of the Debtors’ Chapter 11 Petitions and First Day Motions
[Docket No. 13] (the “First Day Declaration”), detailing the facts and circumstances of these Chapter 11
Cases; |
| f. | filed, on May 24, 2023, the Debtors’
Emergency Motion for Entry of an Order (I) Scheduling a Combined Disclosure Statement Approval and Plan Confirmation Hearing,
(II) Conditionally Approving the Disclosure Statement, (III) Approving the Solicitation Procedures, (IV) Approving the
Disclosure Statement at the Combined Hearing, (V) Waiving Certain Mailing of the Solicitation Package, (VI) Approving the Form and
Manner of the Notices, (VII) Approving the Form and Manner of the Combined Notice, (VIII) Extending the Time by Which (A) the
U.S. Trustee Convenes a Meeting of Creditors and (B) the Debtors File Schedules and SOFAs, and (IX) Granting Related Relief
[Docket No. 16] (the “Scheduling Motion”); |
| g. | obtained, on May 24, 2023, entry of the Order (I) Scheduling a Combined Disclosure Statement
Approval and Plan Confirmation Hearing, (II) Conditionally Approving the Disclosure Statement, (III) Approving the Solicitation
Procedures, (IV) Approving the Disclosure Statement at the Combined Hearing, (V) Waiving Certain Mailing of the Solicitation
Package, (VI) Approving the Form and Manner of the Notices, (VII) Approving the Form and Manner of the Combined Notice,
(VIII) Extending the Time by Which (A) the U.S. Trustee Convenes a Meeting of Creditors and (B) the Debtors File Schedules
and SOFAs, and (IX) Granting Related Relief [Docket No. 90] (the “Scheduling Order”), conditionally approving
the Disclosure Statement and approving, among other things: |
| i. | the Notice of (I) Commencement of Chapter 11 Bankruptcy Cases, (II) Hearing on the Disclosure
Statement, Confirmation of the Joint Chapter 11 Plan, and Related Matters, and (III) Objection Deadlines and Summary of the Debtors’
Joint Chapter 11 Plan [Docket No. 90, Ex. 1] (the “Combined Notice”), which contained notice of
the commencement of these Chapter 11 Cases, the date and time set for the hearing to consider approval of the Disclosure Statement and
Confirmation of the Plan (the “Combined Hearing”), and the deadline for filing objections to the Plan and the Disclosure
Statement; |
| ii. | the Notice of Commencement of Chapter 11 Bankruptcy Cases and Hearing on the Disclosure Statement and
Confirmation of the Joint Chapter 11 Plan [Docket. No. 90, Ex. 2] (the “Publication Notice”); |
| iii. | the Notice of Non-Voting Status to Holders or Potential Holders of Unimpaired Claims Conclusively Presumed
to Accept the Plan and Holders or Potential Holders of Impaired Claims or Interests Conclusively Presumed to Reject the Plan [Docket
No. 90, Exs. 3, 3A] (the “Notice of Non-Voting Status and Opt-Out Form”); |
| iv. | the ballots [Docket No. 90, Exs. 4A, 4B, 4C, 4D] (the “Ballots”); and |
| v. | the DIP-to-Exit Allocation Process Subscription Form [Docket No. 90, Ex. 5] (the “Subscription
Form,” and together with the Combined Notice, the Publication Notice, the Notice of Non-Voting Status and Opt-Out Form, and
the Ballots, the “Approved DS Materials”); |
| h. | commenced
distribution, on May 24, 2023, of (i) the Plan, (ii) the Disclosure Statement,
and (iii) the Ballots to Holders of Claims entitled to vote on the Plan, namely Holders
of Class 3A Claims (the “Priority Term Loan Claims”),3
Holders of Class 3B Claims (the “Rollover Term Loan Claims”),
Holders of Class 3C Claims (the “Tranche B Term Loan Claims”), and
Holders of Class 4 Claims (the “Convertible Notes Claims”),
in accordance with the terms of title 11 of the United States Code (the “Bankruptcy Code”),
the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”),
and the Bankruptcy Local Rules of the United States Bankruptcy Court for the Southern
District of Texas (the “Bankruptcy Local Rules”); |
| i. | served, on May 25, 2023, the Combined Notice and the Notice of Non-Voting Status and Opt-Out Form; |
| j. | filed, on May 30, 2023, the Certificate of Service of the Combined Notice [Docket No. 160]
(the “Combined Notice Certificate”); |
| k. | published, on June 12, 2023, in The New York Times, as evidenced by the Proof of Publication
[Docket No. 184] (the “Publication Certificate,” and together with the Combined Notice Certificate, and the Supplemental
Combined Notice Certificate, the “Certificates”), the Publication Notice consistent with the Scheduling Order; |
| l. | filed, on June 21, 2023, the Plan Supplement for the Debtors’ Joint Plan of Reorganization
Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 207] (the “Plan Supplement”); |
| m. | filed, on June 29, 2023, the Joint
Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code (Technical Modifications) [Docket No. 223] and attached
hereto as Exhibit A; |
3 | All Class 3A Priority Term Loan Claims were deemed “rolled
up” into the Term Loan DIP Facility pursuant to the DIP Orders. Accordingly, Class 3A is deemed eliminated for purposes
of voting to accept or reject the Plan pursuant to Article III.D thereof. |
| n. | filed, on June 29, 2023, the Declaration of Stephenie Kjontvedt of Epiq Corporate Restructuring,
LLC Regarding the Solicitation and Tabulation of Ballots Case on the Debtors’ Joint Plan of Reorganization Pursuant to Chapter 11
of the Bankruptcy Code [Docket No. 227] (the “Voting Report”); |
| o. | filed, on June 29, 2023, the Memorandum
of Law of QualTek Services Inc. and Its Debtor Affiliates in Support of an Order Approving the Debtors’ Disclosure Statement for,
and Confirming, the Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 229]
(the “Confirmation Brief”); |
| p. | filed, on June 29, 2023, the Declaration of Cari Turner, in Support of Confirmation of the Joint
Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 224] (the “Turner Declaration”); |
| q. | filed, on June 29, 2023, the Declaration of Alan J. Carr, in Support of Confirmation of the Joint
Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 225] (the “Carr Declaration”); |
| r. | filed, on June 29, 2023, the Declaration of Jeffrey Finger in Support of Confirmation of the Joint
Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 226] (the “Finger Declaration”
and, together with the Turner Declaration and the Carr Declaration, the “Confirmation Declarations”); and |
| s. | operated their businesses and managed their properties during these Chapter 11 Cases as debtors in possession
pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. |
The Court having:
| a. | entered, on May 24, 2023, the Scheduling Order; |
| b. | set June 23, 2023, at 4:00 p.m. prevailing Central Time as the deadline to file objections to
the Disclosure Statement and the Plan (the “Objection Deadline”); |
| c. | set June 30, 2023, at 1:00 p.m. prevailing Central Time as the date and time for the Combined
Hearing, pursuant to Bankruptcy Rules 3017 and 3018 and sections 1126, 1128, and 1129 of the Bankruptcy Code; |
| d. | reviewed the Plan, the Disclosure Statement, the Scheduling Motion, the Plan Supplement, the Confirmation
Brief, the Confirmation Declarations, the Voting Report, the Approved DS Materials, and all filed pleadings, declarations, affidavits,
certificates, exhibits, statements, and comments regarding final approval of the Disclosure Statement and Confirmation of the Plan; |
| e. | considered the Restructuring Transactions incorporated and described in the Plan or Plan Supplement, as
applicable; |
| f. | held the Combined Hearing; |
| g. | reviewed the discharge, compromises, settlements, releases, exculpations, and injunctions set forth in
Article VIII of the Plan; |
| h. | heard the statements and arguments made by counsel in respect of approval of the Disclosure Statement
and Confirmation of the Plan; |
| i. | considered all oral representations, testimony, documents, filings, and other evidence regarding approval
of the Disclosure Statement and Confirmation of the Plan; |
| j. | overruled (i) any and all objections to final approval of the Disclosure Statement and Confirmation,
except as otherwise stated or indicated on the record, and/or (ii) all statements and reservations of rights not consensually resolved,
agreed to, or withdrawn, unless otherwise indicated; and |
| k. | taken judicial notice of all pleadings and other documents filed, all orders entered, and all evidence
and arguments presented in these Chapter 11 Cases. |
NOW, THEREFORE, it appearing
to the Court that notice of the Combined Hearing and the opportunity for any party in interest to object to approval of the Disclosure
Statement and Confirmation of the Plan having been adequate and appropriate as to all parties affected or to be affected by the Plan and
the transactions contemplated thereby, and the legal and factual bases set forth in the documents filed in support of approval of the
Disclosure Statement and Confirmation of the Plan and other evidence presented at the Combined Hearing establish just cause for the relief
granted herein; and after due deliberation thereon and good cause appearing therefor, the Court makes and issues the following findings
of fact and conclusions of law, and orders:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
IT IS DETERMINED, FOUND, ADJUDGED,
DECREED, AND ORDERED THAT:
| A. | Findings and Conclusions. |
1. The
findings and conclusions set forth herein and in the record of the Combined Hearing constitute the Court’s findings of fact and
conclusions of law under Rule 52 of the Federal Rules of Civil Procedure, as made applicable herein by Bankruptcy Rules 7052
and 9014. To the extent any of the following conclusions of law constitute findings of fact, or vice versa, they are adopted as such.
| B. | Jurisdiction, Venue, and Core Proceeding. |
2. The
Court has jurisdiction over these Chapter 11 Cases pursuant to section 1334 of title 28 of the United States Code. The Court has exclusive
jurisdiction to determine whether the Disclosure Statement and the Plan comply with the applicable provisions of the Bankruptcy Code and
should be approved and confirmed, respectively. Venue is proper in this district pursuant to sections 1408 and 1409 of title 28 of the
United States Code. Approval of the Disclosure Statement, including the associated Solicitation Procedures (as defined in the Scheduling
Motion), and Confirmation of the Plan are core proceedings within the meaning of section 157(b)(2) of title 28 of the United States
Code. This Court may enter a final order consistent with Article III of the United States Constitution.
| C. | Eligibility for Relief. |
3. The
Debtors were and are Entities eligible for relief under section 109 of the Bankruptcy Code. The Debtors are proper plan proponents under
section 1121(a) of the Bankruptcy Code.
| D. | Commencement and Joint Administration of these Chapter 11 Cases. |
4. On
the Petition Date, each of the Debtors commenced a voluntary case under chapter 11 of the Bankruptcy Code. In accordance with the Order
(I) Directing Joint Administration of the Chapter 11 Cases and (II) Granting Related Relief [Docket No. 42], these
Chapter 11 Cases have been consolidated for procedural purposes only and are being jointly administered pursuant to Bankruptcy Rule 1015.
Since the Petition Date, the Debtors have operated their businesses and managed their properties as debtors in possession pursuant to
sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in these Chapter 11 Cases. No statutory
committee of unsecured creditors or equity security holders has been appointed pursuant to section 1102 of the Bankruptcy Code in these
Chapter 11 Cases.
| E. | Modifications to the Plan. |
5. Pursuant
to section 1127 of the Bankruptcy Code, the modifications to the Plan described or set forth in this Confirmation Order constitute technical
or clarifying changes, changes with respect to particular Claims by agreement with Holders of such Claims, or modifications that do not
otherwise materially and adversely affect or change the treatment of any other Claim or Interest under the Plan. These modifications are
consistent with the disclosures previously made pursuant to the Disclosure Statement, and notice of these modifications was adequate and
appropriate under the facts and circumstances of these Chapter 11 Cases. In accordance with Bankruptcy Rule 3019, these modifications
do not require additional disclosure under section 1125 of the Bankruptcy Code or the resolicitation of votes on the Plan under section 1126
of the Bankruptcy Code, and they do not require that Holders of Claims or Interests be afforded an opportunity to change previously cast
votes accepting or rejecting the Plan. Accordingly, the Plan is properly before this Court and all votes cast with respect to the Plan
prior to such modification shall be binding and shall apply with respect to the Plan.
| F. | Burden of Proof—Confirmation of the Plan. |
6. The
Debtors, as proponents of the Plan, have met their burden of proving the applicable elements of sections 1129(a) and 1129(b) of
the Bankruptcy Code by a preponderance of the evidence, which is the applicable evidentiary standard for Confirmation of the Plan. In
addition, and to the extent applicable, the Plan is confirmable under the clear and convincing evidentiary standard.
7. As
evidenced by the Certificates and the Voting Report, the Debtors provided due, adequate, and sufficient notice of the commencement of
these Chapter 11 Cases, the Plan (and the opportunity to opt out of the Third-Party Release, as defined below), the Restructuring Transactions,
the Disclosure Statement, the Combined Hearing, the Plan Supplement, and all of the other materials distributed by the Debtors in connection
with Confirmation of the Plan in compliance with the Bankruptcy Code, the Bankruptcy Rules, including Bankruptcy Rules 2002(b), 3017,
3019, and 3020(b), the Bankruptcy Local Rules, and the procedures set forth in the Scheduling Order. The Debtors provided due, adequate,
and sufficient notice of the Objection Deadline, the Combined Hearing, and any applicable bar dates and hearings described in the Scheduling
Order or the Plan, as applicable, in compliance with the Bankruptcy Code, the Bankruptcy Rules, the Bankruptcy Local Rules, and the Scheduling
Order. No other or further notice is or shall be required.
8. The
Disclosure Statement contains (a) sufficient information of a kind necessary to satisfy the disclosure requirements of all applicable
non-bankruptcy laws, rules, and regulations, including the Securities Act and the Exchange Act, and (b) “adequate information”
(as such term is defined in section 1125(a) of the Bankruptcy Code and used in section 1126(b)(2) of the Bankruptcy Code)
with respect to the Debtors, the Plan, and the transactions contemplated therein. The filing of the Disclosure Statement with the clerk
of the Court satisfied Bankruptcy Rule 3016(b), and the Disclosure Statement, the Plan, the Solicitation Packages (as defined below),
and the Notice of Non-Voting Status and Opt-Out Form provided all parties in interest with sufficient notice regarding the settlement,
release, exculpation, and injunction provisions contained in the Plan in compliance with Bankruptcy Rule 3016(c).
9. The
Classes of Claims entitled under the Plan to vote to accept or reject the Plan (the “Voting Classes”) are set
forth below:
Class |
Designation |
Class 3A |
Priority Term Loan Claims |
Class 3B |
Rollover Term Loan Claims |
Class 3C |
Tranche B Term Loan Claims |
Class 4 |
Convertible Notes Claims |
10. The
Ballots the Debtors used to solicit votes to accept or reject the Plan from Holders in the Voting Classes adequately addressed the particular
needs of these Chapter 11 Cases and were appropriate for Holders in the Voting Classes to vote to accept or reject the Plan. As
evidenced by the Voting Report, Classes 3B, 3C, and 44 have
voted to accept the Plan in accordance with the requirements of sections 1126 and 1129 of the Bankruptcy Code.
11. As
described in the Voting Report, the solicitation of votes on the Plan complied with the Solicitation Procedures, was appropriate and satisfactory
based upon the circumstances of these Chapter 11 Cases, and was in compliance with the provisions of the Bankruptcy Code, the Bankruptcy
Rules, the Bankruptcy Local Rules, and any other applicable rules, laws, and regulations, including the Securities Act.
12. As
described in the Voting Report and the Confirmation Declarations, as applicable, on the Petition Date the Debtors caused the Plan, the
Disclosure Statement, and the Ballots (collectively, the “Solicitation Packages”), and on or before May 26,
2023, the Combined Notice, to be transmitted and served to all Holders in the Voting Classes in compliance with the Bankruptcy Code, including
sections 1125 and 1126 thereof, the Bankruptcy Rules, including Bankruptcy Rules 3017 and 3018, the Bankruptcy Local Rules, the Scheduling
Order, and all applicable non-bankruptcy law. The Debtors caused the Subscription Form to be served on DIP-to-Exit Eligible Offerees
on May 29, 2023. Transmission and service of the Solicitation Packages, the Combined Notice, and the Subscription Form were
timely, adequate, and sufficient under the facts and circumstances of these Chapter 11 Cases. No further notice is required.
4 | As set forth above, all Class 3A Priority Term Loan Claims were
deemed “rolled up” into the Term Loan DIP Facility pursuant to the DIP Orders. Accordingly, Class 3A is deemed
eliminated for purposes of voting to accept or reject the Plan pursuant to Article III.D thereof. |
13. As
set forth in the Voting Report, the Solicitation Packages were distributed to Holders in the Voting Classes that held a Claim as of May 24,
2023 (the “Voting Record Date”). The establishment and notice of the Voting Record Date were reasonable and sufficient.
14. The
period during which the Debtors solicited votes to accept or reject the Plan was a reasonable and sufficient period of time for Holders
in the Voting Classes to make an informed decision to accept or reject the Plan.
15. Under
section 1126(f) of the Bankruptcy Code, Holders of Claims in Class 1 (Other Secured Claims), Class 2 (Other Priority Claims),
Class 5 (General Unsecured Claims) (collectively, the “Deemed Accepting Classes”) are Unimpaired and conclusively
presumed to have accepted the Plan. The Debtors were therefore not required to solicit votes from the Deemed Accepting Classes. Further,
the Debtors were not required to solicit votes from the Holders of Claims or Interests in Class 6 (TRA Claims), Class 7 (Section 510(b) Claims),
or Class 10 (Equity Interests), which were deemed to reject the Plan (the “Deemed Rejecting Classes”). Holders
of Claims in Class 8 (Intercompany Claims) and Holders of Interests in Class 9 (Intercompany Interests) are Unimpaired and conclusively
presumed to have accepted the Plan (to the extent reinstated) or are Impaired and deemed to reject the Plan (to the extent cancelled),
and, in either event, are not entitled to vote to accept or reject the Plan. Nevertheless, the Debtors served Holders in the non-voting
Classes with the Combined Notice and the Notice of Non-Voting Status and Opt-Out Form.
| K. | Service of Opt-Out Form. |
16. The
process described in the Voting Declaration that the Debtors and the Claims and Noticing Agent followed to identify the relevant parties
on which to serve the applicable Ballot or Notice of Non-Voting Status and Opt-Out Form and to distribute the Notice of Non-Voting
Status and Opt-Out-Forms (i) is consistent with the industry standard and (ii) was reasonably calculated to ensure that each
Holder of Claims and Interests in each Class was informed of its ability to opt out of the Third-Party Release and the consequences
for failing timely to do so. For the avoidance of doubt, any party that elected in the Notice of Non-Voting Status and Opt-Out Form to
opt out of the Third-Party Release prior to any deadline to submit a Ballot, whether under any original or extended deadline, shall be
neither a Released Party nor a Releasing Party under the Plan.
17. As
evidenced by the Voting Report, votes to accept or reject the Plan have been solicited and tabulated fairly, in good faith, and in compliance
with the Bankruptcy Code, the Bankruptcy Rules, the Bankruptcy Local Rules, the Disclosure Statement, and any applicable non-bankruptcy
law, rule, or regulation.
18. The
Plan Supplement complies with the Bankruptcy Code and the terms of the Plan, and the filing and notice of such documents are good and
proper in accordance with the Bankruptcy Code, the Bankruptcy Rules, and the Bankruptcy Local Rules, and no other or further notice is
required. All documents included in the Plan Supplement are integral to, part of, and incorporated by reference into the Plan. Subject
to the terms of the Plan and the Restructuring Support Agreement, and only consistent therewith, the Debtors’ right to alter, amend,
update, or modify, in each case in whole or in part, the Plan Supplement before the Plan Effective Date is expressly reserved. Further,
all consent rights under the Restructuring Support Agreement with respect to the Plan Supplement are fully reserved. All parties were
provided due, adequate, and sufficient notice of the Plan Supplement.
| N. | Compliance with Bankruptcy Code Requirements—Section 1129(a)(1). |
19. The
Plan complies with all applicable provisions of the Bankruptcy Code as required by section 1129(a)(1) of the Bankruptcy Code. In
addition, the Plan is dated and identifies the Entities submitting it, thereby satisfying Bankruptcy Rule 3016(a).
| (i) | Proper Classification—Sections 1122 and 1123. |
20. The
classification of Claims under the Plan is proper and satisfies the requirements of sections 1122(a) and 1123(a)(1) of the Bankruptcy
Code. Article III of the Plan provides for the separate classification of Claims and Interests into twelve Classes. Valid business,
factual, and legal reasons exist for the separate classification of such Classes of Claims and Interests. The classifications reflect
no improper purpose and do not unfairly discriminate between, or among, Holders of Claims or Interests. Each Class of Claims and
Interests contains only Claims or Interests that are substantially similar to the other Claims or Interests within that Class.
| (ii) | Specified Unimpaired Classes—Section 1123(a)(2). |
21. The
Plan satisfies the requirements of section 1123(a)(2) of the Bankruptcy Code. Article III of the Plan specifies that Claims
in the following Classes (the “Unimpaired Classes”) are Unimpaired under the Plan within the meaning of section
1124 of the Bankruptcy Code:
Class |
Designation |
1 |
Other Secured Claims |
2 |
Other Priority Claims |
5 |
General Unsecured Claims |
22. Additionally,
Article II of the Plan specifies that Allowed Administrative Claims, ABL DIP Claims, Term Loan DIP Claims, Professional Fee Claims,
Priority Tax Claims, and Restructuring Expenses will be paid in full in accordance with the terms of the Plan, although these Claims are
not classified under the Plan.
| (iii) | Specified Treatment of Impaired Classes—Section 1123(a)(3). |
23. The
Plan satisfies the requirements of section 1123(a)(3) of the Bankruptcy Code. Article III of the Plan specifies that Claims
and Interests, as applicable, in the following Classes (the “Impaired Classes”) are Impaired under the Plan within
the meaning of section 1124 of the Bankruptcy Code and describes the treatment of such Classes:
Class |
Designation |
3A |
Priority Term Loan Claims |
3B |
Rollover Term Loan Claims |
3C |
Tranche B Term Loan Claims |
4 |
Convertible Notes Claims |
6 |
TRA Claims |
7 |
Section 510(b) Claims |
10 |
Equity Interests |
| (iv) | No Discrimination—Section 1123(a)(4). |
24. The
Plan satisfies the requirements of section 1123(a)(4) of the Bankruptcy Code. The Plan provides for the same treatment by the Debtors
of each Claim or Interest in each respective Class unless the Holder of a particular Claim or Interest has agreed to a less favorable
treatment of such Claim or Interest.
| (v) | Adequate Means for Plan Implementation—Section 1123(a)(5). |
25. The
Plan satisfies the requirements of section 1123(a)(5) of the Bankruptcy Code. The provisions in Article IV and elsewhere in
the Plan, and in the exhibits and attachments to the Plan, the Plan Supplement, and the Disclosure Statement, provide, in detail, adequate
and proper means for the Plan’s implementation, including, among other provisions: (a) the good faith compromise and settlement
of all Claims and Interests and controversies resolved pursuant to the Plan; (b) authorization for the Debtors and the Reorganized
Debtors, as applicable, to take all actions necessary to effectuate the Plan, including those actions necessary to effectuate the Restructuring
Transactions, including the DIP-to-Exit Allocation Process, and any restructuring transaction steps set forth in the Plan Supplement;
(c) the appointment of the New Board; (d) the funding and sources of consideration for the Plan distributions, including the
Exit Facilities, the DIP-to-Exit Allocation Process, the New Equity Interests, the Warrants, and Cash on hand; (e) preservation of
the Debtors’ corporate existence following the Plan Effective Date (except as otherwise provided in the Plan); (f) the vesting
of the Estates’ assets in the respective Reorganized Debtors; (g) the cancellation of existing agreements and Interests; (h) the
authorization and approval of corporate actions under the Plan; (i) the adoption of the New Organizational Documents; (j) the
effectuation and implementation of other documents and agreements contemplated by, or necessary to effectuate, the transactions contemplated
by the Plan; (k) the assumption of certain employment obligations; (l) the adoption and implementation of the MIP; (m) the
preservation of Claims and Causes of Action not released pursuant to the Plan; (n) the assumption of all employment and related agreements
unless otherwise provided for in the Plan; and (o) the closing of certain of the Chapter 11 Cases.
| (vi) | Voting Power of Equity Securities—Section 1123(a)(6). |
26. The
Plan satisfies the requirements of section 1123(a)(6) of the Bankruptcy Code. Article IV.J of the Plan provides that the New
Organizational Documents will comply with section 1123(a)(6) of the Bankruptcy Code. The New Organizational Documents prohibit
the issuance of non-voting Equity Securities to the extent prohibited by 1123(a)(6) of the Bankruptcy Code and provide for an appropriate
distribution of voting power among the classes of securities possessing voting power.
| (vii) | Disclosure of New Directors and Officers—Section 1123(a)(7). |
27. The
Plan satisfies the requirements of section 1123(a)(7) of the Bankruptcy Code. Article IV.K of the Plan sets forth the structure
of the New Board, which shall consist of those members listed in the First Amended Plan Supplement for the Debtors’ Joint Plan
of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 228] as Exhibit B, which is consistent
with the interests of creditors and equity holders and with public policy.
| (viii) | Impairment / Unimpairment of Classes—Section 1123(b)(1). |
28. The
Plan is consistent with section 1123(b)(1) of the Bankruptcy Code. Article III of the Plan impairs or leaves unimpaired each
Class of Claims and Interests.
| (ix) | Assumption—Section 1123(b)(2). |
29. The
Plan is consistent with section 1123(b)(2) of the Bankruptcy Code. Article V of the Plan provides for (a) the assumption
of all of the Debtors’ Executory Contracts and Unexpired Leases, other than (x) the Tax Receivable Agreement and (y) those
Executory Contracts and Unexpired Leases that (i) were previously assumed or rejected by the Debtors; (ii) previously expired
or terminated pursuant to its own terms; (iii) are the subject of a motion to reject Filed on or before the Plan Effective Date;
(iv) are identified on the Rejected Executory Contract and Unexpired Lease Schedule; or (v) have an ordered or requested effective
date of rejection that is after the Plan Effective Date, and (b) the payment of Cures, if any, related thereto. The assumption of
Executory Contracts and Unexpired Leases may include the assignment of certain of such contracts to Affiliates. The Debtors’ determinations
regarding the assumption or rejection of Executory Contracts and Unexpired Leases are based on and within the sound business judgment
of the Debtors, are necessary to the implementation of the Plan, and are in the best interests of the Debtors, the Debtors’ Estates,
Holders of Claims and Interests, and other parties in interest in the Chapter 11 Cases. Entry of this Confirmation Order by the Court
shall constitute approval of such assumptions, assumptions and assignments, and/or rejections, as applicable, including the assumption
of the Executory Contracts or Unexpired Leases as provided in the Plan Supplement pursuant to sections 365(a) and 1123 of the Bankruptcy
Code.
| (x) | Settlement, Releases, Exculpation, Injunction, and Preservation of Claims and Causes of Action—Section 1123(b)(3). |
30. Compromise
and Settlement. The Plan is consistent with section 1123(b)(3) of the Bankruptcy Code. In accordance with Bankruptcy Rule 9019,
and in consideration of the distributions, settlements, and other benefits provided under the Plan, except as stated otherwise in the
Plan, the provisions of the Plan constitute a good-faith compromise of numerous claims and Causes of Action, issues, and disputes designed
to achieve a beneficial and efficient resolution of the Chapter 11 Cases for all parties in interest (the “Settlement”).
Such Settlement is the product of extensive arm’s-length, good faith negotiations that, in addition to the Plan, resulted in the
execution of the Restructuring Support Agreement, which documents represent a fair and reasonable compromise of all Claims, Interests,
and controversies, and entry into which represented a sound exercise of the Debtors’ business judgment; provided that nothing
in the Plan or the Settlement shall be deemed to release, waive, compromise, settle, impair, or enjoin any claim or Cause of Action of
Fortress against any Fortress Non-Released Party.
31. Based
upon the representations and arguments of counsel to the Debtors and all other testimony either actually given or proffered and other
evidence introduced at the Confirmation Hearing and the full record of the Chapter 11 Cases, this Confirmation Order constitutes the Court’s
approval of the Settlement incorporated in the Plan and this Confirmation Order, because, among other things: (a) the Settlement
reflects a reasonable balance between the possible success of litigation with respect to each of the settled claims and disputes, on the
one hand, and the benefits of fully and finally resolving such claims and disputes and allowing the Debtors to expeditiously exit chapter
11, on the other hand; (b) absent the Settlement, there is a likelihood of complex and protracted litigation involving, among other
things, the Settlement, with the attendant expense, inconvenience, and delay that have a possibility to derail the Debtors’ reorganization
efforts; (c) each of the parties supporting the Settlement, including the Debtors and the Consenting Creditors, are represented by
counsel that is recognized as being knowledgeable, competent, and experienced; (d) the Settlement is the product of arm’s-length
bargaining and good-faith negotiations between sophisticated parties; and (e) the Settlement is fair, equitable, and reasonable and
in the best interests of the Debtors, Reorganized Debtors, their respective Estates and property, creditors, and other parties in interest,
will maximize the value of the Estates by preserving and protecting the ability of the Reorganized Debtors to continue operating outside
of bankruptcy protection and in the ordinary course of business, and is essential to the successful implementation of the Plan. Based
on the foregoing, the Settlement satisfies the requirements of applicable Fifth Circuit law for approval of settlements and compromises
pursuant to Bankruptcy Rule 9019.
32. Debtor
Release. Articles VIII.C and VIII.D of the Plan describe certain releases granted by the Debtors (the “Debtor Release”).
The Debtors have satisfied the business judgment standard under Bankruptcy Rule 9019 with respect to the propriety of the Debtor
Release. The Debtors’ or the Reorganized Debtors’ pursuit of any such claims against the Released Parties or the ABL Released
Parties is not in the best interests of the Estates’ various constituencies because the costs involved would outweigh any potential
benefit from pursuing such claims. The Debtor Release is a necessary and integral element of the Plan and is fair, equitable, reasonable,
and in the best interests of the Debtors, their Estates, and Holders of Claims and Interests. The Debtor Release is: (a) in exchange
for the good and valuable consideration provided by the Released Parties and the ABL Released Parties, including, without limitation,
the Released Parties’ and the ABL Released Parties’ contributions to facilitating the Restructuring Transactions and implementing
the Plan; (b) a good faith settlement and compromise of the Claims released by the Debtor Release; (c) in the best interests
of the Debtors and all Holders of Claims and Interests; (d) fair, equitable, and reasonable; (e) given and made after due notice
and opportunity for hearing; and (f) a bar to any of the Debtors, the Reorganized Debtors, or the Debtors’ Estates asserting
any Claim or Cause of Action released pursuant to the Debtor Release. The Debtor Release for each of the Debtors’ Related Parties
is appropriate because such Related Parties share an identity of interest with the Debtors, supported and made substantial contributions
to the success of the Plan and these Chapter 11 Cases, and actively participated in meetings, negotiations, and implementation during
these Chapter 11 Cases, and have provided other valuable consideration to the Debtors to facilitate the Debtors’ reorganization.
In addition, the Special Committee conducted an independent investigation into certain historical transactions and determined that the
Debtors did not have any colorable claims or causes of action that it would be in the best interests of the Debtors or their Estates to
pursue. The Debtor Release of the Agents/Trustees, the ABL Released Parties, and Consenting Stakeholders is likewise an integral component
of the compromises and settlements contained in the Plan. The Agents/Trustees, the ABL Released Parties, and the Consenting Stakeholders:
(a) negotiated the Restructuring Support Agreement and Plan, (b) supported the Debtors’ businesses through consensual
debtor in possession financing; and (c) invested significant time and effort to make the restructuring a success and preserve the
value of the Debtors’ estates in a challenging environment. For the avoidance of doubt, the Released Parties include UMB Bank, N.A.,
the successor to Citibank, N.A., as the Term Loan Agent and the Term Loan DIP Agent.
33. Third-Party
Release. Article VIII.D of the Plan describes certain releases granted by the Releasing Parties and the ABL Releasing Parties
(the “Third-Party Release”). The Third-Party Release provides finality for the Debtors, the Reorganized Debtors, the
Released Parties, and the ABL Released Parties regarding the parties’ respective obligations under the Plan and with respect to
the Reorganized Debtors. The Combined Notice sent to Holders of Claims and Interests and published in The New York Times on June 12,
2023, and the Ballots sent to all Holders of Claims and Interests entitled to vote on the Plan, in each case, unambiguously stated that
the Plan contains the Third-Party Release. Such release is a necessary and integral element of the Plan, and is fair, equitable, reasonable,
and in the best interests of the Debtors, their Estates, and all Holders of Claims and Interests. Also, the Third-Party Release is: (a) consensual;
(b) essential to the Confirmation of the Plan; (c) given in exchange for the good and valuable consideration provided by the
Released Parties and the ABL Released Parties; (d) a good-faith settlement and compromise of the Claims released by the Third-Party
Release; (e) in the best interests of the Debtors and their Estates; (f) fair, equitable, and reasonable; (g) given and
made after due notice and opportunity for hearing; (h) narrowly tailored to the circumstances of the Chapter 11 Cases; and (i) a
bar to any of the Releasing Parties or ABL Releasing Parties asserting any claim or Cause of Action released pursuant to the Third-Party Release
against any party released of such Claim or Cause of Action pursuant to the Third-Party Release.
34. Notwithstanding
anything to the contrary in the foregoing, the Third-Party Releases given by the Released Parties to the Releasing Parties shall not release
(i) any post-Plan Effective Date obligations of any party or Entity under the Plan, the Confirmation Order, any Restructuring Transactions,
or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan, including
the DIP Documents, the Exit Facility Documents, the Warrant Agreement, or any Claim or obligation arising under the Plan, or (ii)
any claim or Cause of Action arising from an act or omission that is determined by a Final Order to have constituted actual fraud or willful
misconduct. Furthermore, notwithstanding anything to the contrary in the foregoing, (i) neither the Third-Party Releases given by
the ABL Releasing Parties nor the Third-Party Releases given to the ABL Released Parties release (x) any obligations arising on or
after the Plan Effective Date of any party or Entity under the Plan, the Confirmation Order, any Restructuring Transaction, any document,
instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan, including the ABL DIP Documents,
the ABL Exit Facility Documents, or any Claim or obligation arising under the Plan or (y) any claim or Cause of Action arising from
an act or omission that is determined by a Final Order to have constituted actual fraud or willful misconduct, and (ii) the releases
by the ABL Releasing Parties do not release any Excluded ABL Obligations. For the avoidance of doubt, all claims and Causes of Action
of Fortress against Fortress Non-Released Parties shall be fully preserved to the extent provided in the Plan.
35. The
releases of the Debtors’ Related Parties are an integral component of the compromises and settlements contained in the Plan. The Debtors’
Related Parties: (a) made a substantial and valuable contribution to the Debtors’ restructuring and the estates; (b) invested
significant time and effort to make the restructuring a success and preserve the value of the Debtors’ estates in a challenging
environment; (c) attended numerous meetings related to the restructuring; and (d) met frequently and directed the restructuring
negotiations that led to the Restructuring Support Agreement and the Plan. Litigation by the Debtors against the Debtors’ Related
Parties would be a distraction to the Debtors’ business and restructuring and would decrease rather than increase the value of the estates.
36. The
releases of the Agents/Trustees, ABL Released Parties, and Consenting Stakeholders are likewise integral components of the compromises
and settlements contained in the Plan. The Agents/Trustees, ABL Released Parties, and the Consenting Stakeholders: (a) negotiated
the Restructuring Support Agreement and Plan, (b) supported the Debtors’ businesses through consensual debtor in possession
financing; and (c) invested significant time and effort to make the restructuring a success and preserve the value of the Debtors’
estates in a challenging environment. The releases of the Agents/Trustees, the ABL Released Parties, and the Consenting Stakeholders contained
in the Plan have the consent of the Debtors, the Releasing Parties, and the ABL Releasing Parties and are in the best interests of the
estates.
37. Exculpation.
The exculpation, described in Article VIII.E of the Plan (the “Exculpation”), is appropriate under applicable
law, including In re Highland Capital Mgmt., L.P., 48 F. 4th 419 (5th Cir. 2022), because it was proposed in good faith,
was formulated following extensive good-faith, arm’s-length negotiations with key constituents, and is appropriately limited in
scope. Without limiting anything in the Exculpation, each Exculpated Party has participated in these Chapter 11 Cases in good faith and
is appropriately released and exculpated from any Cause of Action for any claim arising from the Petition Date through the Plan Effective
Date related to any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, the formulation, preparation,
dissemination, negotiation, filing, or termination of the Restructuring Support Agreement and related prepetition transactions, the Disclosure
Statement, the Plan, the Plan Supplement, the DIP Documents, the Warrant Agreement, and the Exit Facility Documents or any Restructuring
Transactions, contract, instrument, release or other agreement or document (including any legal opinion requested by any Entity regarding
any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the reliance by any Released Party on
the Plan or the Confirmation Order in lieu of such legal opinion) created or entered into before or during these Chapter 11 Cases, any
preference, fraudulent transfer, or other avoidance claim arising pursuant to chapter 5 of the Bankruptcy Code or other applicable law,
the filing of these Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation
of the Plan, including the issuance or distribution of Securities pursuant to the Plan, or the distribution of property under the Plan
or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place
on or before the Plan Effective Date, except for claims related to any act or omission that is determined in a Final Order by a court
of competent jurisdiction to have constituted actual fraud, willful misconduct, or gross negligence, but in all respects such Entities
shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to the Plan.
The Exculpated Parties and other parties set forth above have, and upon Confirmation of the Plan shall be deemed to have, participated
in good faith and in compliance with the applicable laws with regard to the solicitation of votes and distribution of consideration, including
securities, pursuant to the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the
violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions
made pursuant to the Plan. Notwithstanding the foregoing, the Exculpation shall not release any obligation or liability of any Entity
for any post-Plan Effective Date obligation under the Plan or any document, instrument, or agreement (including those set forth in the
Plan Supplement) executed to implement the Plan. The Exculpation, including its carveout for actual fraud, willful misconduct, and gross
negligence, is consistent with applicable law in this jurisdiction.
38. The
Exculpated Parties shall not incur liability for any Cause of Action or Claim related to any act or omission in connection with, relating
to, or arising out of, in whole or in part, (a) the solicitation of acceptance or rejection of the Plan in good faith and in compliance
with the applicable provisions of the Bankruptcy Code or (b) the participation, in good faith and in compliance with the applicable
provisions of the Bankruptcy Code, in the distribution of consideration, including securities, pursuant to the Plan.
39. The
injunction provision set forth in Article VIII.F of the Plan is necessary to implement, preserve, and enforce the Debtors’
discharge, the Debtor Release, the Third-Party Release, and the Exculpation and is narrowly tailored to achieve this purpose.
40. No
Person or Entity may commence or pursue a Claim or Cause of Action or Covered Claim, as applicable, of any kind against the Debtors, the
Reorganized Debtors, the Released Parties, the ABL Released Parties, the Exculpated Parties, or the Covered Parties, as applicable, that
relates to or is reasonably likely to relate to any act or omission in connection with, relating to, or arising out of a Claim or Cause
of Action or Covered Claim, as applicable, subject to Article VIII.C, Article VIII.D, or Article VIII.E of the Plan, without
the Court (i) first determining, after notice and a hearing, that such Claim or Cause of Action or Covered Claim, as applicable,
represents a colorable Claim of any kind and (ii) specifically authorizing such Person or Entity to bring such Claim or Cause of
Action or Covered Claim, as applicable, against any such Debtor, Reorganized Debtor, Exculpated Party, Released Party, ABL Released
Party, or Covered Party, as applicable.
41. Pursuant
to Article IV.P of the Plan and in accordance with section 1123(b)(3)(B) of the Bankruptcy Code, but subject to Article VIII
of the Plan, each Reorganized Debtor, as applicable, shall retain and may enforce all Causes of Action of the Debtors set forth on the
Schedule of Retained Causes of Action, whether arising before or after the Petition Date, and the Reorganized Debtors’ rights to
commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Plan Effective Date, other
than the Causes of Action released or waived by the Debtors pursuant to the Debtor Release or Exculpation, which shall be deemed released
and waived by the Debtors and the Reorganized Debtors as of the Plan Effective Date; provided, however, that no Entity may
rely on the absence of a specific reference in the Plan, the Plan Supplement, or the Disclosure Statement to any Cause of Action against
it as any indication that the Debtors or Reorganized Debtors, as applicable, will not pursue any and all available Causes of Action against
it. The Debtors or Reorganized Debtors, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against
any Entity, except as otherwise expressly provided in the Plan, including Article VIII of the Plan. The provisions regarding the
preservation of Causes of Action in the Plan, including the Plan Supplement, are appropriate, fair, equitable, and reasonable, and are
in the best interests of the Debtors, their Estates, and Holders of Claims and Interests.
42. The
release and discharge of all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates
described in Article VIII.B of the Plan (the “Lien Release”) is necessary to implement the Plan. The provisions
of the Lien Release are appropriate, fair, equitable, and reasonable and are in the best interests of the Debtors, their Estates, and
Holders of Claims and Interests.
| (xi) | Additional Plan Provisions—Section 1123(b)(6). |
43. The
other discretionary provisions of the Plan are appropriate and consistent with the applicable provisions of the Bankruptcy Code, thereby
satisfying section 1123(b)(6) of the Bankruptcy Code.
| O. | Debtor Compliance with the Bankruptcy Code—Section 1129(a)(2). |
44. The
Debtors have complied with the applicable provisions of the Bankruptcy Code and, thus, satisfied the requirements of section 1129(a)(2) of
the Bankruptcy Code. Specifically, each Debtor:
| a. | is eligible to be a debtor under section 109, and a proper proponent of the Plan under section 1121(a),
of the Bankruptcy Code; |
| b. | has complied with applicable provisions of the Bankruptcy Code, except as otherwise provided or permitted
by orders of the Court; and |
| c. | complied with the applicable provisions of the Bankruptcy Code, including sections 1125 and 1126, the
Bankruptcy Rules, the Bankruptcy Local Rules, any applicable non-bankruptcy law, rule and regulation, the Scheduling Order, and all
other applicable law, in transmitting the Solicitation Packages, and related documents and notices, and in soliciting and tabulating the
votes on the Plan. |
| P. | Plan Proposed in Good Faith—Section 1129(a)(3). |
45. The
Plan satisfies the requirements of section 1129(a)(3) of the Bankruptcy Code. The Debtors have proposed the Plan in good faith and
not by any means forbidden by law. In so determining, the Court has examined the totality of the circumstances surrounding the filing
of these Chapter 11 Cases, the Plan, the Restructuring Support Agreement, the DIP-to-Exit Commitment Letter, the process leading to Confirmation,
including the overwhelming support of Holders of Claims for the Plan, and the transactions to be implemented pursuant thereto. The Debtors’
good faith is evident from the facts and the record of the Chapter 11 Cases, the Plan, the Disclosure Statement, the hearing on conditional
approval of the Disclosure Statement, and the record of the Combined Hearing and other proceedings held in the Chapter 11 Cases. These
Chapter 11 Cases were filed, and the Plan was proposed, with the legitimate purpose of allowing the Debtors to implement the Restructuring
Transactions, reorganize, and emerge from bankruptcy with a capital and organizational structure that will allow them to conduct their
businesses and satisfy their obligations with sufficient liquidity and capital resources.
| Q. | Payment for Services or Costs and Expenses—Section 1129(a)(4). |
46. The
procedures set forth in the Plan for the Court’s review and ultimate determination of the fees and expenses to be paid by the Debtors
in connection with these Chapter 11 Cases, or in connection with the Plan and incident to these Chapter 11 Cases, satisfy the objectives
of, and are in compliance with, section 1129(a)(4) of the Bankruptcy Code.
| R. | Directors, Officers, and Insiders—Section 1129(a)(5). |
47. Article IV.K
of the Plan sets forth the structure of the New Board, which shall consist of members as designated in accordance with the Restructuring
Term Sheet. The identities of the New Board and the officers of each of the Reorganized Debtors were, to the extent known to the Debtors,
disclosed in the Plan Supplement. Accordingly, the Debtors have satisfied the requirements of section 1129(a)(5) of the Bankruptcy
Code.
| S. | No Rate Changes—Section 1129(a)(6). |
48. Section 1129(a)(6) of
the Bankruptcy Code is not applicable to these Chapter 11 Cases. The Plan proposes no rate change subject to the jurisdiction of any governmental
regulatory commission.
| T. | Best Interest of Creditors—Section 1129(a)(7). |
49. The
Plan satisfies the requirements of section 1129(a)(7) of the Bankruptcy Code. The Liquidation Analysis attached to the Disclosure
Statement as Exhibit F, the Turner Declaration, and the other evidence related thereto in support of the Plan that was proffered
or adduced at, prior to, or in connection with the Combined Hearing: (a) are reasonable, persuasive, credible, and accurate as of
the dates such analysis or evidence was prepared, presented, or proffered; (b) utilize reasonable and appropriate methodologies and
assumptions; (c) have not been controverted by other evidence; and (d) establish that Holders of Allowed Claims and Interests
in each Class will recover at least as much under the Plan on account of such Claim or Interest, as of the Plan Effective Date, as
such Holder would receive if the Debtors were liquidated, on the Plan Effective Date, under chapter 7 of the Bankruptcy Code.
| U. | Acceptance by Certain Classes—Section 1129(a)(8). |
50. The
Plan does not satisfy the requirements of section 1129(a)(8) of the Bankruptcy Code. Classes 1, 2, and 5 constitute Unimpaired Classes,
each of which is conclusively presumed to have accepted the Plan in accordance with section 1126(f) of the Bankruptcy Code. The Voting
Classes have voted to accept the Plan. Holders of Intercompany Claims and Interests in Classes 8 and 9 are Unimpaired and conclusively
presumed to have accepted the Plan (to the extent reinstated) or are Impaired and deemed to reject the Plan (to the extent cancelled),
and, in either event, are not entitled to vote to accept or reject the Plan. Holders of Claims or Interests in Classes 6, 7, and
10 however, receive no recovery on account of their Claims or Interests pursuant to the Plan and are deemed to have rejected the Plan.
Notwithstanding the foregoing, the Plan is confirmable because it satisfies section 1129(b) of the Bankruptcy Code.
| V. | Treatment of Claims Entitled to Priority Under Section 507(a) of the Bankruptcy Code—Section 1129(a)(9). |
51. The
treatment of Administrative Claims, Professional Fee Claims, Restructuring Expenses, ABL DIP Claims, Term Loan DIP Claims, and Priority
Tax Claims, under Article II of the Plan, and of Other Priority Claims under Article III of the Plan, satisfies the requirements
of, and complies in all respects with, section 1129(a)(9) of the Bankruptcy Code.
| W. | Acceptance by at Least One Impaired Class—Section 1129(a)(10). |
52. The
Plan satisfies the requirements of section 1129(a)(10) of the Bankruptcy Code. As evidenced by the Voting Report, Classes 3B, 3C,
and 4, which are Impaired, voted to accept the Plan by the requisite number and amount of Claims, determined without including any acceptance
of the Plan by any insider (as that term is defined in section 101(31) of the Bankruptcy Code), specified under the Bankruptcy Code.
| X. | Feasibility—Section 1129(a)(11). |
53. The
Plan satisfies the requirements of section 1129(a)(11) of the Bankruptcy Code. The financial projections attached to the Disclosure Statement
and the other evidence supporting Confirmation of the Plan proffered or adduced by the Debtors at or prior to, or in the Confirmation
Declarations filed in connection with, the Combined Hearing: (a) are reasonable, persuasive, credible, and accurate as of the dates
such analysis or evidence was prepared, presented, or proffered; (b) utilize reasonable and appropriate methodologies and assumptions;
(c) have not been controverted by other evidence; (d) establish that the Plan is feasible and Confirmation of the Plan is not
likely to be followed by the liquidation, or the need for further financial reorganization, of the Reorganized Debtors or any successor
to the Reorganized Debtors under the Plan, except as provided in the Plan; and (e) establish that the Reorganized Debtors will have
sufficient funds available to meet their obligations under the Plan.
| Y. | Payment of Fees—Section 1129(a)(12). |
54. The
Plan satisfies the requirements of section 1129(a)(12) of the Bankruptcy Code. Article XII.C of the Plan provides for the payment
of all fees payable by the Debtors under 28 U.S.C. § 1930(a).
| Z. | Continuation of Retiree Benefits—Section 1129(a)(13). |
55. The
Plan satisfies the requirements of section 1129(a)(13) of the Bankruptcy Code. Article IV.O of the Plan provides that from and after
the Plan Effective Date, all retiree benefits, as defined in section 1114 of the Bankruptcy Code, if any, shall continue to be paid in
accordance with applicable law.
| AA. | Non-Applicability of Sections 1129(a)(14), (15), and (16). |
56. Sections
1129(a)(14), 1129(a)(15), and 1129(a)(16) of the Bankruptcy Code do not apply to these Chapter 11 Cases. The Debtors owe no domestic support
obligations, are not individuals, and are not nonprofit corporations.
| BB. | “Cram Down” Requirements—Section 1129(b). |
57. The
Plan satisfies the requirements of section 1129(b) of the Bankruptcy Code. Notwithstanding the fact that the Deemed Rejecting Classes
have been deemed to reject the Plan, the Plan may be confirmed pursuant to section 1129(b)(1) of the Bankruptcy Code. First,
all of the requirements of section 1129(a) of the Bankruptcy Code other than section 1129(a)(8) have been met. Second,
the Plan is fair and equitable with respect to the Deemed Rejecting Classes. The Plan has been proposed in good faith, is reasonable,
and meets the requirements that (a) no Holder of any impaired Claim or Interest that is junior to such impaired Class will receive
or retain any property under the Plan on account of such junior Claim or Interest and (b) no Holder of a Claim or Interest in a Class senior
to such impaired Class is receiving more than 100 percent on account of its Claim or Interest. Accordingly, the Plan is fair
and equitable to all Holders of Claims and Interests in the Deemed Rejecting Classes. Third, the Plan does not discriminate
unfairly with respect to the Deemed Rejecting Classes because similarly situated creditors in Classes that have not accepted the Plan
will receive substantially similar treatment on account of their Claim or Interest irrespective of Class. Holders of Rollover Term Loan
Claims, Tranche B Term Loan Claims, and Convertible Notes Claims voted to accept the Plan in sufficient number and in sufficient
amount to constitute accepting classes under the Bankruptcy Code. Therefore, the Plan satisfies section 1129(b) of the Bankruptcy
Code and can be confirmed.
| CC. | Only One Plan—Section 1129(c). |
58. The
Plan satisfies the requirements of section 1129(c) of the Bankruptcy Code. The Plan is the only chapter 11 plan filed in each of
these Chapter 11 Cases.
| DD. | Principal Purpose of the Plan—Section 1129(d). |
59. The
Plan satisfies the requirements of section 1129(d) of the Bankruptcy Code. The principal purpose of the Plan is not the avoidance
of taxes or the avoidance of the application of section 5 of the Securities Act.
| EE. | Small Business Case—Section 1129(e). |
60. None
of these Chapter 11 Cases is a “small business case,” as that term is defined in the Bankruptcy Code, and, accordingly, section
1129(e) of the Bankruptcy Code is inapplicable.
| FF. | Good Faith Solicitation—Section 1125(e). |
61. Each
of the Debtors and Debtor Related Parties and the Consenting Stakeholders and the Agents/Trustees, and each of their respective Related
Parties, have acted fairly, in “good faith” within the meaning of section 1125(e) of the Bankruptcy Code, and in a manner
consistent with the Disclosure Statement, the Bankruptcy Code, the Bankruptcy Rules, and all other applicable rules, laws, and regulations
in connection with all of their respective activities relating to support and consummation of the Plan, including the execution, delivery,
and performance of the Restructuring Support Agreement, the solicitation and tabulation of votes on the Plan, and the activities described
in section 1125 of the Bankruptcy Code, as applicable, and are entitled to the protections afforded by section 1125(e) of the Bankruptcy
Code.
62. The
Debtors and the Debtors’ Related Parties have acted in good faith and in compliance with the applicable provisions of the Bankruptcy
Code, including section 1125(g), with regard to the offering, issuance, and distribution of recoveries under the Plan and the DIP-to-Exit
Commitment Letter and therefore are not, and on account of such distributions will not be, liable at any time for the violation of any
applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or distributions made pursuant
to the Plan so long as such distributions are made consistent with and pursuant to the Plan.
| GG. | Satisfaction of Confirmation Requirements. |
63. Based
on the foregoing, the Plan satisfies the requirements for Confirmation set forth in section 1129 of the Bankruptcy Code.
| HH. | Likelihood of Satisfaction of Conditions Precedent to the Plan Effective Date. |
64. Each
of the conditions precedent to the Plan Effective Date, as set forth in Article IX.A of the Plan, has been or is reasonably likely
to be satisfied or waived in accordance with Article IX.B of the Plan.
65. All
documents and agreements necessary to implement the Plan, including the Definitive Documentation, and all other relevant and necessary
documents have been or will be negotiated in good faith and at arm’s-length, are in the best interests of the Debtors, and shall,
upon completion of documentation and execution, be valid, binding, and enforceable documents and agreements not in conflict with any federal,
state, or local law. Consummation of the transactions contemplated by each such document or agreement is in the best interests of the
Debtors, their Estates, and Holders of Claims and Interests. The Debtors have exercised reasonable business judgment in determining which
documents and agreements to enter into and have provided sufficient and adequate notice of such documents and agreements.
66. The
Debtors have disclosed all material facts regarding the Plan, including with respect to consummation of the Restructuring Transactions,
and the fact that each Debtor will emerge from its Chapter 11 Case as a validly existing separate corporate entity, limited liability
company, partnership, or other form, as applicable.
67. The
Debtors have proposed the Plan in good faith with the legitimate and honest purpose of maximizing the value of the Debtors’ Estates
for the benefit of their stakeholders. The Plan accomplishes this goal. Accordingly, the Debtors, the Released Parties, the ABL Released
Parties, and the Exculpated Parties have been, are, and will continue to be acting in good faith within the meaning of section 1125(e) of
the Bankruptcy Code if they proceed to (provided, for the avoidance of doubt, that nothing herein shall constitute a finding that any
party did not act in good faith solely on the basis of such party’s failure to): (a) consummate the Plan, the Restructuring
Transactions, the Exit Facilities Documents, and the agreements, settlements, transactions, transfers, and other actions contemplated
thereby, regardless of whether such agreements, settlements, transactions, transfers, and other actions are expressly authorized by this
Confirmation Order; and (b) take any actions authorized and directed or contemplated by this Confirmation Order.
| LL. | DIP-to-Exit Commitment Letter. |
68. The
entry into the DIP-to-Exit Commitment Letter is a necessary and integral component of these Restructuring Transactions, and the terms
and conditions under the DIP-to-Exit Commitment Letter are fair, reasonable, customary, and reflect the Debtors’ exercise of prudent
business judgment consistent with their fiduciary duties, are based on good, sufficient, and sound business purposes and justifications,
and are supported by reasonably equivalent value and consideration. The Debtors, the Backstop Parties, and their respective professional
advisors negotiated the DIP-to-Exit Commitment Letter in good faith and at arm’s-length.
69. The
terms and conditions of the Exit Facilities and the Debtors’ entry into the Exit Facility Documents, including all actions, undertakings,
and transactions contemplated thereby, and payment of all fees, indemnities, and expenses provided for thereunder, are essential elements
of the Plan, necessary for the consummation thereof, and in the best interests of the Debtors, their Estates, and Holders of Claims and
Interests. The Exit Facilities are critical to the overall success and feasibility of the Plan, and the Debtors have exercised reasonable
business judgment in determining to enter into the Exit Facility Documents, which have been, and may hereafter continue to be, negotiated
in good faith and at arm’s-length.
70. The
Debtors’ entry into the Warrant Agreement, including all actions, undertakings, and transactions contemplated thereby, and payment
of all fees, indemnities, and expenses provided for thereunder, are essential elements of the Plan, necessary for the consummation thereof,
and in the best interests of the Debtors, their Estates, and Holders of Claims and Interests. The Warrant Agreement is critical to the
overall success and feasibility of the Plan, and the Debtors have exercised reasonable business judgment in determining to enter into
the Warrant Agreement, which has been negotiated in good faith and at arm’s-length.
ORDER
IT IS ORDERED, ADJUDGED, DECREED,
AND DETERMINED THAT:
71. Disclosure
Statement. The Disclosure Statement is APPROVED in all respects on a final basis.
72. Confirmation
of the Plan. The Plan is approved in its entirety and CONFIRMED under section 1129 of the Bankruptcy Code. The terms of the
Plan and the Plan Supplement (including any supplements, amendments, or modifications thereof in accordance with this Confirmation Order
and the Plan), are incorporated by reference into and are an integral part of this Confirmation Order.
73. Objections.
All parties have had a full and fair opportunity to be heard on all issues raised by the objections to Confirmation of the Plan or approval
of the Disclosure Statement. All objections and all reservations of rights pertaining to Confirmation or final approval of the Disclosure
Statement, whether formal or informal, that have not been withdrawn, waived, or settled are hereby OVERRULED on the merits and
DENIED. All objections to Confirmation not filed and served prior to the Objection Deadline, if any, are deemed waived and shall
not be considered by the Court. All parties have had a full and fair opportunity to litigate all issues raised or that might have been
raised in the objections to final approval of the Disclosure Statement and Confirmation of the Plan, and the objections have been fully
and fairly litigated or resolved, including by agreed-upon provisions as set forth in this Confirmation Order. All withdrawn objections
are deemed withdrawn with prejudice.
74. Plan
Modifications. Subsequent to filing the Plan on May 24, 2023, and on June 29, 2023 the Debtors made certain technical modifications
to the Plan (the “Plan Modifications”). The Plan Modifications, which were made in accordance with the Restructuring
Support Agreement, do not materially adversely affect the treatment of any Claim or Interest under the Plan. After giving effect to the
Plan Modifications, the Plan continues to satisfy the requirements of sections 1122 and 1123 of the Bankruptcy Code. The Debtors provided
due and sufficient notice of the Plan Modifications under the circumstances. Accordingly, pursuant to section 1127(a) of the Bankruptcy
Code and Bankruptcy Rule 3019, the Plan Modifications do not require additional disclosure under section 1125 of the Bankruptcy Code
or resolicitation of votes under section 1126 of the Bankruptcy Code nor do they require that Holders of Claims and Interests be afforded
an opportunity to change previously cast acceptances or rejections of the Plan.
75. Deemed
Acceptance of Plan. In accordance with section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019, at least two-thirds in dollar
amount and more than one-half in number of Holders of Rollover Term Loan Claims, Tranche B Term Loan Claims, and Convertible Notes Claims
voted to accept the Plan, and all Holders of Claims who are conclusively presumed to accept the Plan are deemed to have accepted the Plan.
No Holder of a Claim shall be permitted to change its vote as a consequence of the Plan Modifications.
76. Omission
of Reference to Particular Plan Provisions. The failure specifically to include or to refer to any particular article, section, or
provision of the Plan or the Plan Supplement in this Confirmation Order shall not diminish or impair the effectiveness of such article,
section, or provision, it being the intent of the Court that the Plan and any related documents be confirmed and approved in their entirety.
77. No
Action Required. Under the provisions of the Delaware General Corporation Law, including section 303 thereof, and the comparable provisions
of the Delaware Limited Liability Company Act, section 1142(b) of the Bankruptcy Code, and any other comparable provisions under
applicable law, no action of the respective directors, equity holders, managers, or members of the Debtors is required to authorize the
Debtors to enter into, execute, deliver, file, adopt, amend, restate, consummate, or effectuate, as the case may be, the Plan, the Restructuring
Transactions (subject, in each case, to any consent rights set forth or incorporated therein), or any contract, assignment, certificate,
instrument, or other document to be executed, delivered, adopted, or amended in connection with the implementation of the Plan, including
the Plan Supplement, and the Restructuring Support Agreement.
78. Binding
Effect. Upon the occurrence of the Plan Effective Date, the terms of the Plan are immediately effective and enforceable and deemed
binding on the Debtors, the Reorganized Debtors, and any and all Holders of Claims or Interests (irrespective of whether such Holders
of Claims and Interests have, or are deemed to have, accepted the Plan), all Entities that are parties to or are subject to the settlements,
compromises, releases, discharges, and injunctions described in the Plan, each Entity acquiring property under the Plan, and any and all
non-Debtor parties to Executory Contracts and Unexpired Leases with the Debtors. All Claims against and Interests in the Debtors shall
be as fixed, adjusted, or compromised, as applicable, pursuant to this Plan regardless of whether any Holder of a Claim or Interest has
voted on this Plan.
79. Incorporation
by Reference. The terms and provisions of the Plan, the Plan Supplement, the Definitive Documentation, all other relevant and necessary
documents, and each of the foregoing’s schedules and exhibits are, on and after the Plan Effective Date, incorporated herein by
reference and are an integral part of this Confirmation Order.
80. Vesting
of Assets in the Reorganized Debtors. Except as otherwise provided in the Plan, this Confirmation Order, or any agreement, instrument,
or other document incorporated in, or entered into in connection with or pursuant to the Plan, the Plan Supplement, or the Exit Facility
Documents, on the Plan Effective Date, all property in each Estate, all Causes of Action, and any property acquired by any of the Debtors
pursuant to the Plan shall vest in each respective Reorganized Debtor, free and clear of all Liens, Claims, charges, Causes of Action,
or other encumbrances. On and after the Plan Effective Date, except as otherwise provided in the Plan, this Confirmation Order, or any
agreement, instrument, or other document incorporated herein, each Reorganized Debtor may operate its business and may use, acquire, or
dispose of property and compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Court
and free of any restrictions set forth in the Bankruptcy Code or Bankruptcy Rules.
81. Cancellation
of Existing Agreements and Interests. On the Plan Effective Date, unless otherwise provided in this Confirmation Order or the Plan,
including in Article V.A, all notes, instruments, certificates, and other documents evidencing Claims or Interests, including credit
agreements and indentures and the Tax Receivable Agreement, shall be cancelled and the obligations of the Debtors and any non-Debtor Affiliate
thereunder or in any way related thereto shall be deemed satisfied in full, cancelled, discharged, and of no force or effect; provided,
however, that notwithstanding anything to the contrary contained herein, any agreement that governs the rights of the DIP Agents
and Term Loan Agent shall continue in effect solely for purposes of allowing the DIP Agents and Term Loan Agent to (i) enforce their
rights against any Person other than, solely to the extent of the release provided by such DIP Agent or Term Loan Agent, any of the Released
Parties or the ABL Released Parties, pursuant and subject to the terms of the Plan, the DIP Orders, the ABL DIP Credit Agreement, the
Term Loan DIP Credit Agreement, and/or the Term Loan Credit Agreement, (ii) receive distributions under the Plan and to distribute
them to the Holders of Allowed ABL DIP Claims, if any, Allowed Term Loan DIP Claims, and Allowed Term Loan Claims, in accordance with
the terms of the Plan, the DIP Orders, the ABL DIP Credit Agreement, the Term Loan DIP Credit Agreement, and/or the Term Loan Credit Agreement,
(iii) enforce their rights to payment of fees, expenses, and indemnification obligations, in accordance with the terms of the DIP
Orders, the ABL DIP Credit Agreement, the Term Loan DIP Credit Agreement, and/or the Term Loan Credit Agreement, and (iv) appear
and be heard in the Chapter 11 Cases or in any proceeding in the Court, including to enforce any obligation under the Plan owed to the
DIP Agents, Term Loan Agent, or Holders of Allowed ABL DIP Claims, if any, Term Loan DIP Claims, or Term Loan Claims, as applicable. Holders
of or parties to such cancelled instruments, securities, and other documentation will have no rights arising from or relating to such
instruments, securities, and other documentation, or the cancellation thereof, except the rights provided for pursuant to the Plan. Notwithstanding
the foregoing or anything to the contrary herein, any rights of the Agent/Trustees, Term Loan Lenders, the Term Loan DIP Lenders, the
ABL Lenders, and the ABL DIP Lenders to indemnification under the DIP Documents, the Prepetition Credit Agreements, and the Convertible
Notes Indenture, as applicable, shall remain binding and enforceable in accordance with the terms of such documents and shall not be subject
to discharge, impairment, or release under the Plan or this Confirmation Order.
82. Effectiveness
of All Actions. All actions contemplated by the Plan, the Restructuring Support Agreement, and the Definitive Documentation, as the
same may be modified from time to time prior to the Plan Effective Date subject, in each case, to the consent rights set forth or incorporated
therein (including, for the avoidance of doubt, the Restructuring Transactions Memorandum), are hereby effective and authorized to be
taken on, prior to, or after the Plan Effective Date, as applicable, under this Confirmation Order without further application to or order
of the Court or further action by the respective officers, directors, managers, members, or equity holders of the Debtors or the Reorganized
Debtors and with the effect that such actions would have were they taken by the unanimous action, consent, approval, and vote of such
officers, directors, managers, members, or equity holders.
83. Restructuring
Transactions. After the Confirmation Date, the Debtors or Reorganized Debtors, as applicable, are authorized to enter into any transaction
and shall take any actions as may be necessary or appropriate to effectuate the Restructuring Transactions, including as set forth in
the Restructuring Transactions Memorandum. All initial Holders of New Equity Interests (as applicable) shall be deemed party to the LLC
Agreement (as defined below) and the Registration Rights Agreement, in privity of contract with the other parties to such agreements,
and bound thereby, whether their ownership is recorded in a register maintained with Reorganized QualTek’s transfer agent or through
the facilities of DTC, without the need to execute signature pages thereto. The applicable Debtors or the Reorganized Debtors shall
take any actions as may be necessary or advisable to effect a corporate restructuring of the overall corporate structure of the Debtors
to the extent provided in the Plan or in the Definitive Documentation, including the issuance of all securities, notes, instruments, certificates,
and other documents required to be issued pursuant to the Plan, one or more inter-company mergers, consolidations, amalgamations, arrangements,
continuances, restructurings, conversions, dissolutions, transfers, liquidations, or other corporate transactions. All actions as may
be necessary or appropriate to effect any transaction described in, contemplated by, or necessary to effectuate the Plan are hereby approved
and shall not constitute fraudulent conveyances or fraudulent transfers or otherwise be subject to avoidance.
84. Corporate
Action. Upon the Plan Effective Date, all actions contemplated under the Plan shall be deemed authorized and approved in all respects,
including (i) adoption or assumption, as applicable, of the Employment Obligations; (ii) selection of the directors, officers,
or managers of the Reorganized Debtors; (iii) the distribution of the New Equity Interests; (iv) issuance and distribution of
the Warrants; (v) implementation of the Restructuring Transactions; (vi) entry into the Warrant Agreement and the Exit Facility
Documents; (vii) all other actions contemplated under the Plan (whether to occur before, on, or after the Plan Effective Date); (viii) adoption
of the New Organizational Documents; (ix) the rejection, assumption, or assumption and assignment, as applicable, of Executory Contracts
or Unexpired Leases; and (x) all other acts or actions contemplated or reasonably necessary or appropriate to promptly consummate
the Restructuring Transactions contemplated by the Plan (whether to occur before, on, or after the Plan Effective Date). All matters provided
for in the Plan involving the corporate structure of the Debtors or the Reorganized Debtors, and any corporate action required by the
Debtors or the Reorganized Debtors, as applicable, in connection with the Plan shall be deemed to have occurred and shall be in effect
without any requirement of further action by the security Holders, directors, officers, or managers of the Debtors or the Reorganized
Debtors, as applicable. On or (as applicable) prior to the Plan Effective Date, the appropriate officers of the Debtors or the Reorganized
Debtors, as applicable, are hereby authorized and (as applicable) directed to issue, execute, and deliver the agreements, documents, securities,
and instruments contemplated under the Plan (or necessary or desirable to effect the transactions contemplated under the Plan) in the
name of and on behalf of the Reorganized Debtors, including the New Equity Interests, the New Organizational Documents, the Exit Facilities,
the Exit Facility Documents, the Warrants, the Warrant Agreement, and any and all other agreements, documents, securities, and instruments
relating to the foregoing. The authorizations and approvals contemplated by Article IV.I of the Plan shall be effective notwithstanding
any requirements under non-bankruptcy law.
85. Approval
of Consents and Authorization to Take Acts Necessary to Implement Plan. This Confirmation Order shall constitute all authority,
approvals, and consents required, if any, by the laws, rules, and regulations of all states and any other governmental authority with
respect to implementation or consummation of the Plan and any documents, instruments, or agreements, and any amendments or modifications
thereto, and any other acts and transactions referred to in or contemplated by the Plan, the Plan Supplement, the Disclosure Statement,
the Restructuring Support Agreement, the Restructuring Transactions Memorandum, and any documents, instruments, securities, or agreements,
and any amendments or modifications thereto necessary to effectuate the Restructuring Transactions.
86. DIP-to-Exit
Commitment Letter. The DIP-to-Exit Commitment Letter and the terms and provisions included therein, including the DIP-to-Exit Commitment
Premium, are approved in their entirety pursuant to section 105 and section 363(b) of the Bankruptcy Code, and the Debtors are
authorized to enter into the DIP-to-Exit Commitment Letter and to take any and all actions necessary and proper to implement the terms
of the DIP-to-Exit Commitment Letter and to fully perform all obligations thereunder on the conditions set forth therein. The specified
premiums, payments, obligations, indemnification obligations, and expenses contemplated to be paid by the Debtors pursuant to the DIP-to-Exit
Commitment Letter, including the DIP-to-Exit Commitment Premium, are hereby approved as reasonable and shall not be subject to any avoidance,
reduction, setoff, recoupment, offset, recharacterization, subordination (whether contractual, equitable, or otherwise), counterclaims,
cross-claims, defenses, disallowance, impairment, disgorgement, or any other challenges under any theory at law or in equity by any person
or entity.
87. Warrant
Agreement. On the Plan Effective Date, the Debtors are authorized to issue and distribute the Warrants pursuant to the Plan and in
accordance with the Warrant Agreement to all Holders of Convertible Notes Claims. The Warrants issued pursuant to the Plan shall be validly
issued and duly authorized without the need for any further corporate action and without any further action by the Debtors or Reorganized
Debtors, as applicable. Each distribution and issuance referred to in Article VI of the Plan shall be governed by the terms and conditions
set forth in the Restructuring Support Agreement, the Plan, and the Warrant Agreement applicable to such distribution or issuance and
by the terms and conditions of the instruments evidencing or relating to such distribution or issuance, which terms and conditions shall
bind each Entity receiving such distribution or issuance without the need for execution by any party thereto other than the applicable
Reorganized Debtor(s). For the avoidance of doubt, from and after the Plan Effective Date, the Warrants shall be governed by and in accordance
with the Warrant Agreement, as may be amended or modified in accordance with its terms.
88. Distributions.
The procedures governing distributions contained in Article VI of the Plan shall be, and hereby are, approved in their entirety.
89. Claims
Register. Any Claim or Interest or any Claim or Interest that has been paid, satisfied, amended, or superseded may be adjusted or
expunged on the Claims Register by the Debtors or the Reorganized Debtors without the Debtors or the Reorganized Debtors having to file
an application, motion, complaint, objection, or any other legal proceeding seeking to object to such Claim or Interest without any further
notice to or action, order, or approval of the Court.
90. The
1L Exit Facility. On the Plan Effective Date, the Reorganized Debtors are hereby authorized to, and shall, enter into the 1L Exit
Facility, the terms of which will be set forth in the 1L Exit Facility Documents. Entry of this Confirmation Order shall constitute (a) approval
of the 1L Exit Facility and the 1L Exit Facility Documents and all transactions contemplated thereby, and all actions to be taken, undertakings
to be made, and obligations to be incurred and fees paid by the Reorganized Debtors, in connection therewith, including the payment of
all fees, indemnities, expenses, and other payments provided for therein and authorization, and (b) authorization of the Reorganized
Debtors to enter into and execute the 1L Exit Facility Documents and such other documents as may be required to effectuate the treatment
afforded by the 1L Exit Facility. The 1L Exit Facility Agent is authorized to enter into the 1L Exit Facility on the Plan Effective
Date, and execution of the 1L Exit Facility Credit Agreements by the 1L Exit Facility Agent shall be deemed to bind all 1L Exit Facility
Lenders (including each Holder of Term Loan DIP Claims that receives 1L Exit Facility Loans on the Plan Effective Date on account of such
Term Loan DIP Claims, each Holder of Priority Term Loan Claims that receives 1L Exit Facility Loans on the Plan Effective Date on
account of such Priority Term Loan Claims, to the extent any Priority Term Loan Claims remain outstanding on the Plan Effective Date,
and each Term Loan DIP Lender that lends New Money 1L Exit Term Loans to the Reorganized Debtors on the Plan Effective Date pursuant to
its New Money Exit Financing Commitments) as if each such 1L Exit Facility Lender had executed the 1L Exit Facility Credit Agreement with
appropriate authorization. The 1L Exit Facility shall constitute a refinancing of the obligations under the Term Loan DIP Credit Agreement.
91. On
the Plan Effective Date, subject to the priorities set forth in the Intercreditor Agreement,5
all of the Liens and security interests to be granted in accordance with the 1L Exit Facility Documents (a) shall be
deemed to be granted, (b) shall be legal, binding, and enforceable Liens on, and security interests in, the collateral granted thereunder,
in accordance with the terms of the 1L Exit Facility Documents, (c) shall be deemed automatically perfected on the Plan Effective
Date, subject only to such Liens and security interests as may be permitted under the 1L Exit Facility Documents, (d) shall
not be subject to avoidance, recharacterization, or equitable subordination for any purposes whatsoever, and (e) shall not constitute
preferential transfers or fraudulent conveyances under the Bankruptcy Code or any applicable non-bankruptcy law. The Reorganized Debtors
and the persons and entities granted such Liens and security interests are hereby authorized to make all filings and recordings and to
obtain all governmental approvals and consents necessary to establish and perfect such Liens and security interests under the provisions
of state, federal, or other law that would be applicable in the absence of the Plan and the Confirmation Order (it being understood that
perfection shall occur automatically by virtue of entry of the Confirmation Order and any such filings, recordings, approvals, and consents
shall not be required) and shall thereafter cooperate to make all other filings and recordings that otherwise would be necessary under
applicable law to give notice of such Liens and security interests to third parties.
5 | As used herein, “Intercreditor Agreement” shall
mean, collectively, each intercreditor agreement among the ABL Exit Facility Agent, the 1L Exit Facility Agent, the 2L Exit Facility
Agent, and/or the 3L Exit Facility Agent, which shall each be in a form and substance acceptable to each party thereto. |
92. The
2L Exit Facility. On the Plan Effective Date, the Reorganized Debtors are hereby authorized to, and shall, enter into the 2L Exit
Facility, the terms of which shall be set forth in the 2L Exit Facility Documents. Entry of this Confirmation Order shall constitute (a) approval
of the 2L Exit Facility and the 2L Exit Facility Documents, as applicable, and all transactions contemplated thereby, and all actions
to be taken, undertakings to be made, and obligations to be incurred by the Reorganized Debtors in connection therewith, including the
payment of all fees, indemnities, expenses, and other payments provided for therein, and (b) authorization of the Reorganized Debtors
to enter into and execute the 2L Exit Facility Documents and such other documents as may be required to effectuate the treatment afforded
by the 2L Exit Facility. The 2L Exit Facility Agent is authorized to enter into the 2L Exit Facility on the Plan Effective Date, and execution
of the 2L Exit Facility Credit Agreements by the 2L Exit Facility Agent shall be deemed to bind all Participating Rollover Lenders who
exercise their Conversion Right on the Plan Effective Date as if such Participating Rollover Lenders had executed the 2L Exit Facility
Credit Agreement with appropriate authorization.
93. On
the Plan Effective Date, subject to the priorities set forth in the Intercreditor Agreement, all of the Liens and security interests to
be granted in accordance with the 2L Exit Facility Documents (a) shall be deemed to be granted, (b) shall be legal, binding,
and enforceable Liens on, and security interests in, the collateral granted thereunder in accordance with the terms of the 2L Exit Facility
Documents, (c) shall be deemed automatically perfected as of the Plan Effective Date, subject only to such Liens and security interests
as may be permitted under the 2L Exit Facility Documents, (d) shall not be subject to avoidance, recharacterization, or equitable
subordination for any purposes whatsoever, and (e) shall not constitute preferential transfers or fraudulent conveyances under the
Bankruptcy Code or any applicable non-bankruptcy law. The Reorganized Debtors and the persons and entities granted such Liens and security
interests are hereby authorized to make all filings and recordings and to obtain all governmental approvals and consents necessary to
establish and perfect such Liens and security interests under the provisions of state, federal, or other law that would be applicable
in the absence of the Plan and the Confirmation Order (it being understood that perfection shall occur automatically by virtue of the
entry of the Confirmation Order and any such filings, recordings, approvals, and consents shall not be required), and will thereafter
cooperate to make all other filings and recordings that otherwise would be necessary under applicable law to give notice of such Liens
and security interests to third parties.
94. The
3L Exit Facility. On the Plan Effective Date, the Reorganized Debtors are hereby authorized to, and shall, enter into the 3L Exit
Facility, the terms of which shall be set forth in the 3L Exit Facility Documents. Confirmation of the Plan shall be deemed (a) approval
of the 3L Exit Facility and the 3L Exit Facility Documents, as applicable, and all transactions contemplated thereby, and all actions
to be taken, undertakings to be made, and obligations to be incurred by the Reorganized Debtors in connection therewith, including the
payment of all fees, indemnities, expenses, and other payments provided for therein, and (b) authorization for the Reorganized Debtors
to enter into and execute the 3L Exit Facility Documents and such other documents as may be required to effectuate the treatment afforded
by the 3L Exit Facility. The 3L Exit Facility Agent is authorized to enter into the 3L Exit Facility on the Plan Effective Date, and execution
of the 3L Exit Facility Credit Agreements by the 3L Exit Facility Agent shall be deemed to bind all Non-Participating Rollover Lenders
and Participating Rollover Lenders who do not exercise their Conversion Right on the Plan Effective Date as if each such Holders had executed
the 3L Exit Facility Credit Agreement with appropriate authorization.
95. In
accordance with the DIP Orders and as set forth in the Term Loan DIP Documents, if a Holder of a Rollover Term Loan Claim holds a Conversion
Right and exercises its Conversion Right by not sending the Debtors a Conversation Right opt-out notice at least three (3) Business
Days prior to the Plan Effective Date, an amount of 3L Exit Facility Loans distributed to such Holder (or its designee) on the Plan Effective
Date (in accordance with Article III.B.4 of the Plan) equal to such Holder’s Conversion Amount (or, if the amount of the 3L Exit
Facility Loans distributed to such Holder on the Plan Effective Date in accordance with Article III.B.4 of the Plan is less than
the Conversion Amount, such lesser amount) shall automatically be deemed to be converted into an equivalent principal amount of 2L Exit
Facility Loans on the Plan Effective Date in accordance with the terms and conditions of the Term Loan DIP Documents. For the avoidance
of doubt, Non-Participating Rollover Lenders who receive 3L Exit Facility Loans pursuant to Article III.B.3 of the Plan shall
not be entitled to convert such 3L Exit Facility Loans to 2L Exit Facility Loans.
96. On
the Plan Effective Date, subject to the priorities set forth in the Intercreditor Agreement, all of the Liens and security interests to
be granted in accordance with the 3L Exit Facility Documents (a) shall be deemed to be granted, (b) shall be legal, binding,
and enforceable Liens on, and security interests in, the collateral granted thereunder, in accordance with the terms of the 3L Exit Facility
Documents, (c) shall be deemed automatically perfected on the Plan Effective Date, subject only to such Liens and security interests
as may be permitted under the 3L Exit Facility Documents, (d) shall not be subject to avoidance, recharacterization, or equitable
subordination for any purposes whatsoever and shall not constitute preferential transfers or fraudulent conveyances under the Bankruptcy
Code or any applicable non-bankruptcy law. The Reorganized Debtors and the persons and entities granted such Liens and security interests
are hereby authorized to make all findings and recordings and to obtain all governmental approvals and consents necessary to establish
and perfect such Liens and security interests under the provisions of state, federal, or other law that would be applicable in the absence
of the Plan and the Confirmation Order (it being understood that perfection shall occur automatically by virtue of the entry of the Confirmation
Order and any such filings, recordings, approvals, and consents shall not be required) and shall thereafter cooperate to make all other
filings and recordings that otherwise would be necessary under applicable law to give notice of such Liens and security interests to third parties.
97. The
ABL Exit Facility. On the Plan Effective Date, the Reorganized Debtors are hereby authorized to, and shall, enter into the ABL Exit
Facility, the terms of which shall be set forth in the ABL Exit Facility Documents. Confirmation of the Plan shall be deemed approval
of the ABL Exit Facility and the ABL Exit Facility Documents, as applicable, and all transactions contemplated thereby, and all actions
to be taken, undertakings to be made, and obligations to be incurred and fees paid by the Reorganized Debtors in connection therewith,
including the payment of all fees, indemnities, expenses, and other payments provided for therein and authorization of the Reorganized
Debtors to enter into and execute the ABL Exit Facility Documents and such other documents as may be required to effectuate the treatment
afforded by the ABL Exit Facility. The refinancing of the obligations under the ABL DIP Credit Agreement as provided in this paragraph
shall also be subject to a payment statement in form and substance acceptable to the ABL DIP Agent and the Debtors.
98. On
the Plan Effective Date, subject to the priorities set forth in the Intercreditor Agreement, all of the Liens and security interests to
be granted in accordance with the ABL Exit Facility Documents (a) shall be deemed to be granted, (b) shall be legal, binding,
and enforceable Liens on, and security interests in, the collateral granted thereunder in accordance with the terms of the ABL Exit Facility
Documents, (c) shall be deemed automatically perfected as of the Plan Effective Date, subject only to such Liens and security interests
as may be permitted under the ABL Exit Facility Documents, (d) shall have the same priority as the priority of the Liens on, and
security interests in, the collateral securing the ABL Claims as of the Petition Date relative to all other Liens on, and security interests
in, such collateral in existence as of the Petition Date or arising thereafter, (e) shall not be subject to avoidance, recharacterization,
or equitable subordination for any purposes whatsoever, and (f) shall not constitute preferential transfers or fraudulent conveyances
under the Bankruptcy Code or any applicable non-bankruptcy law. The Reorganized Debtors and the persons and entities granted such Liens
and security interests are hereby authorized to make all filings and recordings and to obtain all governmental approvals and consents
necessary to establish and perfect such Liens and security interests under the provisions of state, federal, or other law that would be
applicable in the absence of the Plan and the Confirmation Order (it being understood that perfection shall occur automatically by virtue
of the entry of the Confirmation Order and any such filings, recordings, approvals, and consents shall not be required) and shall thereafter
cooperate to make all other filings and recordings that otherwise would be necessary under applicable law to give notice of such Liens
and security interests to third parties.
99. New
Equity Interests. On the Plan Effective Date, Reorganized QualTek is authorized to issue or cause to be issued and shall, as provided
for in the Restructuring Transactions Memorandum, issue the New Equity Interests for eventual distribution in accordance with the terms
of this Plan without further notice to or order of the Court, act, or action under applicable law, regulation, order, or rule or
the vote, consent, authorization, or approval of any Person. The distribution and issuance of the New Equity Interests shall be governed
by the terms and conditions of the instruments evidencing or relating to such distribution, issuance, and/or dilution, as applicable,
including the LLC Agreement and the Registration Rights Agreement, which terms and conditions shall be deemed valid, binding, and enforceable
against each Entity receiving such distribution of the New Equity Interests without the need for execution by any party thereto other
than the applicable Reorganized Debtors. Any Entity’s acceptance of New Equity Interests shall be deemed its agreement to the LLC
Agreement and the Registration Rights Agreement, as applicable, as the same may be amended or modified from time following the Plan Effective
Date in accordance with their terms. The New Equity Interests shall be issued and distributed free and clear of all Liens, Claims, and
other Interests other than restrictions under applicable securities laws. All of the New Equity Interests issued pursuant to the Plan
shall be duly authorized, validly issued, and non-assessable.
100. On
the Plan Effective Date, Reorganized QualTek and all Holders of the New Equity Interests then outstanding shall be deemed to be parties
to the New Organizational Documents, including the Limited Liability Company Agreement substantially in the form contained in Exhibit A
to the Plan Supplement (the “LLC Agreement”) and the Registration Rights Agreement (provided that the LLC Agreement
and the Registration Rights Agreement shall have been approved by the requisite Consenting Stakeholders in accordance with the terms of
the Restructuring Support Agreement) without the need for execution by any such Holder. The New Organizational Documents, including the
LLC Agreement and the Registration Rights Agreement, shall be binding on Reorganized QualTek and its subsidiaries and, solely with respect
to the LLC Agreement and the Registration Rights Agreement, all parties receiving (on the Plan Effective Date), and Holders (as applicable)
of, New Equity Interests.
101. DIP-to-Exit
Allocation Process. On the Plan Effective Date and in exchange for each Term Loan DIP Lender’s funding Term Loan DIP New Money
Loans and its pro rata allocation of New Money 1L Exit Term Loans, (a) such Term Loan DIP Lender (or its designee) shall receive
its pro rata share of the DIP-to-Exit Commitment Premium and (b) Reorganized QualTek are hereby authorized to issue the applicable
New Money 1L Exit Term Loans and DIP-to-Exit Commitment Premium.
102. Pursuant
to the DIP Orders, the Term Loan DIP Lenders’ claims for the DIP-to-Exit Commitment Premium are superpriority administrative expense
claims that are actual, necessary costs of preserving the Debtors’ Estates. The DIP-to-Exit Commitment Premium is hereby deemed
to have been offered, issued, and distributed under the Plan without registration under the Securities Act, or any state or local law
requiring registration for offer and sale of a security, in reliance upon the exemption provided in section 1145(a) of the Bankruptcy
Code.
103. The
DIP-to-Exit Allocation Process (including the transactions, actions, and obligations of the Debtors contemplated thereby, and all actions
to be undertaken, undertakings to be made, and obligations to be incurred by Reorganized QualTek in connection therewith) and Reorganized
QualTek’s payment of the DIP-to-Exit Commitment Premium are hereby approved in all respects without prejudice to the effect of the
Court’s approval of the DIP-to-Exit Allocation Process (including the transactions, actions, and obligations of the Debtors contemplated
thereby, and all actions to be undertaken, undertakings to be made, and obligations to be incurred by Reorganized QualTek in connection
therewith) pursuant to the DIP Orders. On the Plan Effective Date, the rights and obligations of the Debtors under the DIP-to-Exit Commitment
Letter shall vest in the Reorganized Debtors, as applicable.
104. Certain
Securities Law Matters. The offering, issuance, and distribution of the New Equity Interests (including the DIP-to-Exit Commitment
Premium) and Warrants, as contemplated by Article IV.F.4, F.6, and F.7 of the Plan, shall be exempt from, among other things, the
registration requirements of section 5 of the Securities Act and any other applicable law requiring registration prior to the offering,
issuance, distribution, or sale of Securities in accordance with, and pursuant to, section 1145 of the Bankruptcy Code. Such New Equity
Interests and Warrants (i) shall not be “restricted securities” as defined in Rule 144(a)(3) under the Securities
Act, and (ii) shall be freely tradeable and transferable without registration under the Securities Act in the United States by the
recipients thereof that are not, and have not been within 90 days of such transfer, an “affiliate” of the Debtors as defined
in Rule 144(a)(1) under the Securities Act, subject to the provisions of section 1145(b)(1) of the Bankruptcy Code relating
to the definition of an underwriter in section 1145(b) of the Bankruptcy Code and compliance with applicable securities laws
and any rules and regulations of the United States Securities and Exchange Commission or state or local securities laws, if any,
applicable at the time of any future transfer of such Securities or instruments.
105. The
New Equity Interests issued in connection with the DIP-to-Exit Commitment Premium are hereby deemed to have been issued in reliance on
the exemptions set forth in section 1145 of the Bankruptcy Code. Any Securities issued in reliance on section 4(a)(2), including
in compliance with Rule 506 of Regulation D, and/or Regulation S are hereby deemed to be “restricted securities”
subject to resale restrictions and may be resold, exchanged, assigned, or otherwise transferred only pursuant to registration or an applicable
exemption from registration under the Securities Act and other applicable law. Any Securities issued in reliance on section 1145 of the
Bankruptcy Code shall not be considered “restricted securities” as defined in Rule 144(a)(3) under the Securities
Act and shall be freely tradeable and transferable without registration under the Securities Act in the United States by the recipients
thereof, subject to the provisions of section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter in section
2(a)(11) of the Securities Act and compliance with applicable securities laws and any rules and regulations of the United States
Securities and Exchange Commission, if any, applicable at the time of any future transfer of such Securities or instruments.
106. Compromise
of Controversies. In consideration for the distributions and other benefits, including releases, provided under the Plan, the provisions
of the Plan constitute a good faith compromise and settlement of all Claims, Interests, and controversies resolved under the Plan,
and the entry of this Confirmation Order constitutes approval of such compromise and settlement under Bankruptcy Rule 9019; provided
that nothing in the Plan or the Settlement shall be deemed to release, waive, compromise, settle, impair, or enjoin any claim or Cause
of Action of Fortress against any Fortress Non-Released Party.
107. Assumption
and Assignment of Contracts and Leases. On the Plan Effective Date, each Executory Contract and Unexpired Lease shall be deemed assumed
or assumed and assigned as set forth in the Restructuring Transactions Memorandum, other than: (i) an Executory Contract or Unexpired
Lease that (a) is identified on the Rejected Executory Contracts and Unexpired Lease Schedule, (b) was previously expired or
terminated pursuant to its own terms, (c) has been previously assumed or rejected by the Debtors pursuant to a Final Order, (d) is
the subject of a motion to reject that is pending on the Plan Effective Date, or (e) has an ordered or requested effective date of
rejection that is after the Plan Effective Date; and (ii) the Tax Receivable Agreement, which shall be cancelled and deemed rejected
and, for the avoidance of doubt, any rejection damages arising out of such rejection shall be treated as TRA Claims, without the need
for any further notice to or action, order, or approval of the Court, under section 365 of the Bankruptcy Code. The assumptions,
assumptions and assignments, or rejections of the Executory Contracts or Unexpired Leases as set forth in the Plan and the Rejected Executory
Contracts and Unexpired Leases Schedule, as applicable, pursuant to sections 365(a) and 1123 of the Bankruptcy Code are hereby approved.
108. Cures,
if any, shall be paid in accordance with Article V.C of the Plan. The assumption of Executory Contracts and Unexpired Leases hereunder
may include the assignment of certain of such contracts to Affiliates. Each assumed Executory Contract or Unexpired Lease shall include
all modifications, amendments, supplements, restatements, or other agreements related thereto, and all rights related thereto, if any,
including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, and any other interests.
Modifications, amendments, supplements, and restatements to prepetition Executory Contracts and Unexpired Leases that have been executed
by the Debtors during the Chapter 11 Cases shall not be deemed to alter the prepetition nature of the Executory Contract or Unexpired
Lease or the validity, priority, or amount of any Claims that may arise in connection therewith.
109. The
provisions governing the treatment of Executory Contracts and Unexpired Leases set forth in Article V of the Plan (including the
procedures regarding the resolution of any and all disputes concerning the assumption and assignment, as applicable, of such Executory
Contracts and Unexpired Leases) shall be, and hereby are, approved in their entirety.
110. Nothing
in this Confirmation Order or in any notice or any other document is or shall be deemed an admission by the Debtors that any Assumed Contract
is an executory contract or unexpired lease under section 365 of the Bankruptcy Code.
111. Assumption
of any Executory Contract or Unexpired Lease pursuant to the Plan or otherwise and full payment of any applicable Cure pursuant to Article V.C
of the Plan shall result in the full release and satisfaction of any Cures, Claims, or defaults, whether monetary or nonmonetary, including
defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults, arising
under any assumed Executory Contract or Unexpired Lease at any time prior to the effective date of assumption. Any and all Proofs of
Claim based upon Executory Contracts or Unexpired Leases that have been assumed in the Chapter 11 Cases, including pursuant to this Confirmation
Order, and for which any Cure has been fully paid pursuant to Article V.C of the Plan, shall be deemed disallowed and expunged as
of the Plan Effective Date without the need for any objection thereto or any further notice to or action, order, or approval of the Court.
112. All
Claims for damages resulting from the rejection of an Executory Contract or Unexpired Lease other than, for the avoidance of doubt, the
Tax Receivable Agreement, shall be asserted in accordance with Article V.H of the Plan and shall be treated as General Unsecured
Claims pursuant to Article III.B of the Plan and may be objected to in accordance with the provisions of Article VII of the
Plan and the applicable provisions of the Bankruptcy Code and Bankruptcy Rules.
113. Rejection
of Tax Receivable Agreement. On the Plan Effective Date, that certain Tax Receivable Agreement dated as of February 14, 2022,
by and among QualTek Holdco, LLC, BCP QualTek, LLC, the TRA Holder Representative, and the TRA Holders (each as defined therein) from
time to time party thereto, shall be deemed rejected pursuant to section 365(d) of the Bankruptcy Code and not assigned to any of
the Debtors, any affiliate thereof, or any third party. The obligations of the Debtors and any non-Debtor Affiliate thereunder or
in any way related thereto shall be deemed satisfied in full, cancelled, discharged, and of no force or effect. Any rejection damages
claim arising out of rejection of the Tax Receivable Agreement shall be treated as a TRA Claim under the Plan.
114. Exemption
from Transfer Tax and Recording Fees. To the fullest extent permitted by section 1146(a) of the Bankruptcy Code, any transfers
(whether from a Debtor to a Reorganized Debtor or to any other Person) of property under the Plan or pursuant to: (i) the issuance,
reinstatement, distribution, transfer, or exchange of any debt, Equity Security, or other interest in the Debtors or the Reorganized Debtors,
including the New Equity Interests (including on account of the DIP-to-Exit Commitment Premium) and the Warrants; (ii) the Restructuring
Transactions; (iii) the creation, modification, consolidation, termination, refinancing, and/or recording of any mortgage, deed of
trust, or other security interest, or the securing of additional indebtedness by such or other means; (iv) the making, assignment,
or recording of any lease or sublease; (v) the grant of collateral as security for the Exit Facilities; or (vi) the making,
delivery, or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including
any deeds, bills of sale, assignments, or other instrument of transfer executed in connection with any transaction arising out of, contemplated
by, or in any way related to the Plan, shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar
tax, mortgage tax, real estate transfer tax, mortgage recording tax, Uniform Commercial Code filing or recording fee, regulatory filing
or recording fee, or other similar tax or governmental assessment, and upon entry of this Confirmation Order, the appropriate state or
local governmental officials or agents shall forego the collection of any such tax or governmental assessment and accept for filing and
recordation any of the foregoing instruments or other documents without the payment of any such tax, recordation fee, or governmental
assessment. All filing or recording officers (or any other Person with authority over any of the foregoing), wherever located and by whomever
appointed, shall comply with the requirements of section 1146 of the Bankruptcy Code, shall forego the collection of any such tax or governmental
assessment, and shall accept for filing and recordation any of the foregoing instruments or other documents without the payment of any
such tax or governmental assessment.
115. Authorization
to Consummate. The Debtors are authorized to consummate the Plan, solely in accordance with the terms thereof after the entry of this
Confirmation Order subject to satisfaction or waiver (by the required parties) of the conditions precedent to Consummation set forth
in Article IX of the Plan.
116. Professional
Compensation. All requests for payment of Professional Fee Claims for services rendered and reimbursement of expenses incurred prior
to the Confirmation Date must be Filed no later than forty-five (45) days after the Plan Effective Date. The Court shall determine the
Allowed amounts of such Professional Fee Claims after notice and a hearing in accordance with the procedures established by the Court.
The Reorganized Debtors shall pay Professional Fee Claims in Cash in the amount the Court allows, including from the Professional Fee
Escrow Account, which the Reorganized Debtors will establish in trust for the Professionals and fund with Cash equal to the Professional
Fee Amount on the Plan Effective Date. No funds in the Professional Fee Escrow Account shall be considered property of the Estates of
the Debtors or the Reorganized Debtors. When all Allowed amounts of all Professional Fee Claims owing to Professionals have been paid
in full, any remaining amount in the Professional Fee Escrow Account shall promptly be paid to the Reorganized Debtors without any further
action or order of the Court. Upon the Confirmation Date, any requirement that Professionals comply with sections 327 through 331, 363,
and 1103 of the Bankruptcy Code in seeking retention or compensation for services rendered after such date shall terminate, and the Debtors
may employ and pay any Professional in the ordinary course of business without any further notice to or action, order, or approval of
the Court.
117. Release,
Exculpation, Discharge, and Injunction Provisions. The release, exculpation, discharge, and injunction provisions embodied in
Article VIII.A–F of the Plan, are hereby approved and authorized in their entirety and shall be effective and binding
on all Persons and Entities, to the extent provided in the Plan, without further order or action by this Court.
118. For
the avoidance of doubt, nothing in the Confirmation Order shall limit or adversely affect any claims or Causes of Action Fortress may
hold against the Fortress Non-Released Parties as provided in the Restructuring Support Agreement and the Plan.
119. Unless
otherwise provided in the Plan or in this Confirmation Order, no Person or Entity may commence or pursue a Claim or Cause of Action or
Covered Claim, as applicable, of any kind against the Debtors, the Reorganized Debtors, the Released Parties, the ABL Released Parties,
the Exculpated Parties, or the Covered Parties, as applicable, that relates to or is reasonably likely to relate to any act or omission
in connection with, relating to, or arising out of a Claim or Cause of Action or Covered Claim, as applicable, subject to Article VIII.C,
Article VIII.D, or Article VIII.E of the Plan, without the Court (i) first determining, after notice and a hearing, that
such Claim or Cause of Action or Covered Claim, as applicable, represents a colorable Claim of any kind and (ii) specifically authorizing
such Person or Entity to bring such Claim or Cause of Action or Covered Claim, as applicable, against any such Debtor, Reorganized Debtor,
Exculpated Party, Released Party, ABL Released Party, or Covered Party, as applicable.
120. Restructuring
Expenses. The Debtors’ payment of the Restructuring Expenses incurred, or estimated to be incurred, up to and including the
Plan Effective Date, in accordance with the terms of the Plan, is hereby approved. All (i) Restructuring Expenses and (ii) Convertible
Notes Trustee Fees and Expenses to be paid on the Plan Effective Date shall be estimated prior to and as of the Plan Effective Date, and
such estimates shall be delivered to the Debtors at least two (2) Business Days before the anticipated Plan Effective Date;
provided, however, that such estimates shall not be considered admissions or limitations with respect to such Restructuring
Expenses or Convertible Notes Trustee Fees and Expenses. On or as soon as reasonably practicable after the Plan Effective Date, final
invoices for all Restructuring Expenses and the Convertible Notes Trustee Fees and Expenses incurred prior to and as of the Plan Effective
Date shall be submitted to the Debtors. In addition, the Debtors and the Reorganized Debtors (as applicable) shall continue to pay, when
due, pre-Plan Effective Date Restructuring Expenses.
121. Documents,
Mortgages, and Instruments. Each federal, state, commonwealth, local, foreign, or other governmental agency is authorized to accept
any and all documents, mortgages, and instruments necessary or appropriate to effectuate, implement, or consummate the Plan, including
the Restructuring Transactions and this Confirmation Order.
122. Continued
Effect of Stays and Injunction. Unless otherwise provided in the Plan or in this Confirmation Order, all injunctions or stays in effect
in the Chapter 11 Cases pursuant to sections 105 or 362 of the Bankruptcy Code or any order of the Court, and extant on the Confirmation
Date (excluding any injunctions or stays contained in the Plan or the Confirmation Order) shall remain in full force and effect until
the Plan Effective Date. All injunctions or stays contained in the Plan or the Confirmation Order shall remain in full force and effect
in accordance with their terms.
123. Nonseverability
of Plan Provisions Upon Confirmation. Each provision of the Plan is: (i) valid and enforceable pursuant to its terms; (ii) integral
to the Plan and may not be deleted or modified without the Debtors’ consent, provided, that any such deletion or modification
must be consistent with the Restructuring Support Agreement (including the consent, approval, and consultation rights set forth therein);
and (iii) nonseverable and mutually dependent.
124. Post-Confirmation
Modifications. Without need for further order or authorization of the Court, the Debtors or the Reorganized Debtors, as applicable,
are authorized and empowered to make any and all modifications (in each case subject to the approval and consent rights contained in each
of the Plan and the Restructuring Support Agreement) to any and all documents that are necessary to effectuate the Plan that (i) do
not materially affect the rights or recoveries of any party or materially adversely affect or change the treatment of any Claims or Interests
under the Plan, and (ii) are consistent with the Plan and the Restructuring Support Agreement. Subject to those restrictions on modifications
set forth in the Plan and the requirements of section 1127 of the Bankruptcy Code, rule 3019 of the Bankruptcy Rules, and, to the
extent applicable, sections 1122, 1123, and 1125 of the Bankruptcy Code, the respective rights of each of the Debtors and Reorganized
Debtors to revoke or withdraw, or to alter, amend, or modify the Plan with respect to such Debtor one or more times after Confirmation
and, to the extent necessary, to initiate proceedings in the Court to so alter, amend, or modify the Plan or remedy any defect or omission
or reconcile any inconsistencies in the Plan, the Disclosure Statement, or this Confirmation Order in such manner as may be necessary
to carry out the purposes and intent of the Plan are expressly reserved. For the avoidance of doubt, any Plan modifications and any modifications
to the Exit Facility Documents are subject to the reasonable consent of the Required Consenting ABL Lenders, the Required Consenting Term
Lenders, and the Required Consenting Convertible Noteholders to the extent required under the Plan, the Restructuring Support Agreement,
and/or the Bankruptcy Code.
125. Applicable
Non-bankruptcy Law. The provisions of this Confirmation Order, the Plan, and related documents, or any amendments or modifications
thereto, shall apply and be enforceable notwithstanding any otherwise applicable non-bankruptcy law.
126. Waiver
of Filings. Any requirement under section 521 of the Bankruptcy Code or Bankruptcy Rule 1007 obligating the Debtors to file any
list, schedule, or statement with the Court or the Office of the U.S. Trustee is permanently waived as to any such list, schedule, or
statement not filed as of the Confirmation Date.
127. Waiver
of Section 341 Meeting of Creditors or Equity Holders; Waiver of Schedules and Statements and 2015.3 Reports. Any requirement
under section 341(e) for the U.S. Trustee to convene a meeting of creditors or equity holders is permanently waived as of the Confirmation
Date. Any requirements for the Debtors to file the following are permanently waived as of the Confirmation Date: (i) schedules of
assets and liabilities and statements of financial affairs and (ii) their initial reports of financial information with respect to
entities in which the Debtors hold a controlling or substantial interest as set forth in Bankruptcy Rule 2015.3.
128. Notices
of Confirmation and Plan Effective Date. The Reorganized Debtors shall serve notice of entry of this Confirmation Order in accordance
with Bankruptcy Rules 2002 and 3020(c) on all Holders of Claims and Interests within ten Business Days after the date of entry
of this Confirmation Order. As soon as reasonably practicable after the Plan Effective Date, the Reorganized Debtors shall file notice
of the Plan Effective Date and shall serve a copy of the same on the above-referenced parties. The above-referenced notices are adequate
under the particular circumstances of these Chapter 11 Cases and no other or further notice is necessary.
129. Failure
of Consummation. Notwithstanding the entry of this Confirmation Order, if Consummation does not occur, (i) the Plan shall be
null and void in all respects; (ii) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount
certain of any Claim or Interest or Class of Claims or Interests), assumption or rejection of Executory Contracts or Unexpired Leases
effected under the Plan, and any document or agreement executed pursuant to the Plan, shall be deemed null and void; and (iii) nothing
contained in the Plan shall: (a) constitute a waiver or release of any Claims or Interests or Causes of Action; (b) prejudice
in any manner the rights of any Debtor or any other Entity; or (c) constitute an admission, acknowledgement, offer, or undertaking
of any sort by any Debtor or any other Entity.
130. Substantial
Consummation. On the Plan Effective Date, the Plan shall be deemed to be substantially consummated under sections 1101 and 1127 of
the Bankruptcy Code.
131. Waiver
of Stay. For good cause shown, the stay of this Confirmation Order provided by any Bankruptcy Rule or Bankruptcy Local Rule is
waived, and this Confirmation Order shall be effective and enforceable immediately upon its entry by the Court.
132. References
to and Omissions of Plan Provisions. References to articles, sections, and provisions of the Plan are inserted for convenience of
reference only and are not intended to be a part of or to affect the interpretation of the Plan. The failure specifically to include or
to refer to any particular article, section, or provision of the Plan in this Confirmation Order shall not diminish or impair the effectiveness
of such article, section, or provision, it being the intent of the Court that the Plan be confirmed in its entirety, except as expressly
modified herein, and incorporated herein by this reference.
133. Debtors’
Actions Post-Confirmation Through the Plan Effective Date. During the period from entry of this Confirmation Order through and until
the Plan Effective Date, the Debtors shall continue to operate their business as debtors in possession, subject to the oversight of the
Court as provided under the Bankruptcy Code, the Bankruptcy Rules, this Confirmation Order, and any Final Order of the Court and in accordance
with the terms of the Plan, the Restructuring Support Agreement, and other applicable Definitive Documentation.
134. Headings.
Headings utilized herein are for convenience and reference only and do not constitute a part of the Plan or this Confirmation Order for
any other purpose.
135. Effect
of Conflict. This Confirmation Order supersedes any Court order issued prior to the Confirmation Date that may be inconsistent with
this Confirmation Order. If there is any inconsistency between the terms of the Plan (other than with respect to any consent rights set
forth or incorporated therein) and the terms of this Confirmation Order, the terms of this Confirmation Order govern and control.
136. Final
Order. This Confirmation Order is a Final Order and the period in which an appeal must be filed shall commence upon the entry hereof.
137. Retention
of Jurisdiction. The Court may properly, and upon the Plan Effective Date shall, to the full extent set forth in the Plan, retain
jurisdiction over all matters arising out of and related to these Chapter 11 Cases, including the matters set forth in Article XI
of the Plan and section 1142 of the Bankruptcy Code.
138. QualTek
Management HoldCo, LLC. The Reorganized Debtors shall promptly pay the reasonable and necessary documented out-of-pocket professional
fees and related expenses of QualTek Management HoldCo, LLC (“Management HoldCo”) and any of its professionals incurred
in connection with the wind down and dissolution of Management HoldCo without any requirement for Management HoldCo or its professionals
to file a fee application with the Court, without the need for itemized time detail, and without any requirement for Court review or approval;
provided that the foregoing shall be subject to a cap of $250,000 unless otherwise agreed by the Reorganized Debtors and Management HoldCo.
139. Texas
Taxing Authorities. Notwithstanding anything to the contrary in this Confirmation Order or the Plan, the Debtors shall pay all outstanding
ad valorem taxes owed to the Texas Taxing Authorities for tax years 2022 and prior on or before the Plan Effective Date. The Texas Taxing
Authorities’ allowed Claims for the 2022 and prior tax years shall include all interest properly charged under applicable non-bankruptcy
law through the date of payment to the extent the Texas Tax Code provides for interest with respect to any portion of such Claims. The
Debtors shall pay the 2023 ad valorem taxes in the ordinary course of business. The 2023 and prior tax year Texas ad valorem tax liens
(the “Tax Liens”), if any, shall remain attached to all applicable property in their prepetition priority until the
applicable year’s taxes due under this Confirmation Order are fully paid. In the event the Reorganized Debtors sell, convey, or
transfer any property that is the collateral of the Texas Taxing Authorities, the Texas Taxing Authorities’ liens and rights to
payment with respect to such collateral shall be preserved. The Texas Taxing Authorities’ lien priority, if any, shall not be primed
or subordinated by any exit financing approved by the Court in conjunction with the Confirmation of the Plan or otherwise. Any actions
retained against the Texas Taxing Authorities pursuant to the Plan or any Plan Supplements shall be limited to those permitted by applicable
law. All parties’ rights and defenses under applicable law and the Bankruptcy Code with respect to the foregoing, including their
right to dispute or object to the claims of the Texas Taxing Authorities or the validity or enforcement of the Tax Liens under applicable
non-bankruptcy law, are fully preserved. The Texas Taxing Authorities are permitted without leave of the Court to amend their estimated
2023 Claim amounts to actual assessed amounts.
Signed: June 30, 2023 |
/s/ Christopher M. Lopez |
|
Christopher Lopez |
|
United States Bankruptcy Judge |
Exhibit A
Plan
IN THE
UNITED STATES BANKRUPTCY COURT
for the Southern District of TexaS
HOUSTON DIVISION
|
) |
|
In re: |
) |
Chapter 11 |
|
) |
|
QUALTEK SERVICES INC., et al.,1 |
) |
Case No. 23-90584 (CML) |
|
) |
|
Debtors. |
) |
(Jointly Administered) |
|
) |
|
DEBTORS’ JOINT PLAN OF REORGANIZATION
PURSUANT
TO CHAPTER
11 OF THE BANKRUPTCY CODE (TECHNICAL MODIFICATIONS)
THIS CHAPTER 11 PLAN WILL BE SUBMITTED TO THE BANKRUPTCY COURT FOR APPROVAL FOLLOWING SOLICITATION.
Matthew D. Cavenaugh (TX Bar No. 24062656) |
|
Joshua A. Sussberg, P.C. (admitted pro hac vice) |
Genevieve M. Graham (TX Bar No. 24085340) |
|
Christopher T. Greco, P.C. (admitted pro hac vice) |
Emily Meraia (TX Bar No. 24129307) |
|
KIRKLAND & ELLIS LLP |
JACKSON WALKER LLP |
|
KIRKLAND & ELLIS INTERNATIONAL LLP |
1401 McKinney Street, Suite 1900 |
|
601 Lexington Avenue |
Houston, TX 77010 |
|
New York, New York 10022 |
Telephone: (713) 752-4200 |
|
Telephone: (212) 446-4800 |
Facsimile: (713) 752-4221 |
|
Facsimile: (212) 446-4900 |
Email:
#### |
|
Email:
#### |
#### |
|
#### |
|
|
-and- |
Proposed Co-Counsel to the Debtors |
|
Jaimie Fedell (admitted pro hac vice) |
and Debtors in Possession |
|
KIRKLAND & ELLIS LLP |
|
|
KIRKLAND & ELLIS INTERNATIONAL LLP |
|
|
300 North LaSalle Street |
|
|
Chicago, Illinois 60654 |
|
|
Telephone:
(312) 862-2000 |
|
|
Facsimile:
(312) 862-2200 |
|
|
Email:
#### |
|
|
|
|
|
Proposed Co-Counsel to the Debtors |
|
|
and Debtors in Possession |
| 1 | A
complete list of each of the Debtors in these Chapter 11 Cases may be obtained on the website of the Debtors’ proposed Claims and
Noticing Agent at https://dm.epiq11.com/QualTek. The location of Debtors’ principal place of business and the Debtors’
service address in these Chapter 11 Cases is 475 Sentry Parkway E, Suite 200, Blue Bell, Pennsylvania 19422. |
TABLE OF CONTENTS
Article I.
DEFINED TERMS, RULES OF INTERPRETATION, COMPUTATION OF TIME, and governing law |
1 |
|
|
|
|
|
A. |
Defined Terms |
1 |
|
B. |
Rules of Interpretation |
17 |
|
C. |
Computation of Time |
18 |
|
D. |
Governing Law |
18 |
|
E. |
Reference to Monetary Figures |
18 |
|
F. |
Reference to the Debtors or the Reorganized Debtors |
18 |
|
G. |
Controlling Document |
18 |
|
H. |
Consultation, Information, Notice, and Consent
Rights |
18 |
|
|
|
|
Article II.
ADMINISTRATIVE CLAIMS, PRIORITY CLAIMS, and RESTRUCTURING EXPENSES |
19 |
|
|
|
|
|
A. |
Administrative Claims |
19 |
|
B. |
ABL DIP Claims |
19 |
|
C. |
Term Loan DIP Claims |
19 |
|
D. |
Professional Fee Claims |
20 |
|
E. |
Priority Tax Claims |
21 |
|
F. |
Payment of Restructuring Expenses |
21 |
|
|
|
|
Article III.
CLASSIFICATION AND TREATMENt oF CLAIMS AND INTERESTS |
22 |
|
|
|
|
|
A. |
Classification of Claims and Interests |
22 |
|
B. |
Treatment of Claims and Interests |
22 |
|
C. |
Special Provision Governing Unimpaired Claims |
26 |
|
D. |
Elimination of Vacant Classes |
26 |
|
E. |
Voting Classes, Presumed Acceptance by Non-Voting Classes |
27 |
|
F. |
Intercompany Interests |
27 |
|
G. |
Confirmation Pursuant to Sections 1129(a)(10) and
1129(b) of the Bankruptcy Code |
27 |
|
H. |
Controversy Concerning Impairment |
27 |
|
I. |
Subordinated Claims |
27 |
Article IV. MEANS FOR IMPLEMENTATION OF THE PLAN |
27 |
|
|
|
A. |
General Settlement of Claims and
Interests |
27 |
|
B. |
Restructuring Transactions |
28 |
|
C. |
Cancellation of Existing Agreements and Interests |
28 |
|
D. |
Section 1146 Exemption |
29 |
|
E. |
Reorganized Debtors |
29 |
|
F. |
Sources of Consideration for Plan Distributions |
29 |
|
G. |
Corporate Existence |
34 |
|
H. |
Vesting of Assets in the Reorganized Debtors |
34 |
|
I. |
Corporate Action |
34 |
|
J. |
New Organizational Documents |
35 |
|
K. |
Directors and Officers of the Reorganized Debtors |
35 |
|
L. |
Management Incentive Plan |
35 |
|
M. |
Effectuating Documents; Further Transactions |
35 |
|
N. |
Certain Securities Law Matters |
36 |
|
O. |
Employment Obligations |
36 |
|
P. |
Preservation of Causes of Action |
36 |
|
Q. |
Private Company |
37 |
|
R. |
Tax Matters |
37 |
|
S. |
Director and Officer Liability Insurance |
37 |
|
|
|
|
Article V.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES |
37 |
|
|
|
|
|
A. |
Assumption and Rejection of Executory Contracts and
Unexpired Leases |
37 |
|
B. |
Indemnification Obligations |
38 |
|
C. |
Cure of Defaults for Assumed Executory Contracts and
Unexpired Leases |
39 |
|
D. |
Insurance Policies |
39 |
|
E. |
Reservation of Rights |
39 |
|
F. |
Nonoccurrence of Plan Effective Date |
40 |
|
G. |
Contracts and Leases Entered Into After the Petition
Date |
40 |
|
|
|
|
Article VI.
PROVISIONS GOVERNING DISTRIBUTIONS |
40 |
|
|
|
|
|
A. |
Timing and Calculation of Amounts to Be Distributed |
40 |
|
B. |
Disbursing Agent |
41 |
|
C. |
Rights and Powers of Disbursing Agent |
41 |
|
D. |
Delivery of Distributions and Undeliverable or Unclaimed
Distributions |
41 |
|
E. |
Manner of Payment |
42 |
|
F. |
Compliance with Tax Requirements |
42 |
|
G. |
Allocations |
42 |
|
H. |
No Postpetition Interest on Claims |
42 |
|
I. |
Foreign Currency Exchange Rate |
42 |
|
J. |
Setoffs and Recoupment |
43 |
|
K. |
Claims Paid or Payable by Third Parties |
43 |
|
|
|
|
Article VII.
PROCEDURES FOR RESOLVING CONTINGENT, UNLIQUIDATED, AND DISPUTED CLAIMS |
44 |
|
|
|
|
|
A. |
Disputed Claims Process |
44 |
|
B. |
Allowance of Claims |
44 |
|
C. |
Claims Administration Responsibilities |
44 |
|
D. |
Adjustment to Claims or Interests without Objection |
45 |
|
E. |
Disallowance of Claims or Interests |
45 |
|
|
|
|
Article VIII.
SETTLEMENT, RELEASE, INJUNCTION, AND RELATED PROVISIONS |
45 |
|
|
|
|
|
A. |
Discharge of Claims and Termination of Interests |
45 |
|
B. |
Release of Liens |
46 |
|
C. |
Releases by the Debtors |
46 |
|
D. |
Releases by Holders of Claims and Interests |
47 |
|
E. |
Exculpation |
48 |
|
F. |
Injunction |
49 |
|
G. |
Protections Against Discriminatory Treatment |
49 |
|
H. |
Document Retention |
50 |
|
I. |
Reimbursement or Contribution |
50 |
Article IX.
CONDITIONS PRECEDENT TO CONSUMMATION OF THE PLAN |
50 |
|
|
|
|
|
A. |
Conditions Precedent to the Plan Effective Date |
50 |
|
B. |
Waiver of Conditions |
51 |
|
C. |
Effect of Failure of Conditions |
51 |
|
|
|
|
Article X.
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN |
51 |
|
|
|
|
|
A. |
Modification and Amendments |
51 |
|
B. |
Effect of Confirmation on Modifications |
51 |
|
C. |
Revocation or Withdrawal of Plan |
52 |
|
|
|
|
Article XI.
RETENTION OF JURISDICTION |
52 |
|
|
|
|
Article XII.
miscellaneous PROVISIONS |
54 |
|
|
|
|
|
A. |
Immediate Binding Effect |
54 |
|
B. |
Additional Documents |
54 |
|
C. |
Payment of Statutory Fees |
54 |
|
D. |
Statutory Committee and Cessation of Fee and Expense
Payment |
54 |
|
E. |
Reservation of Rights |
54 |
|
F. |
Successors and Assigns |
55 |
|
G. |
Notices |
55 |
|
H. |
Entire Agreement |
56 |
|
I. |
Plan Supplement |
56 |
|
J. |
Nonseverability of Plan Provisions |
56 |
|
K. |
Votes Solicited in Good Faith |
57 |
|
L. |
Closing of Chapter 11 Cases |
57 |
|
M. |
Waiver or Estoppel |
57 |
|
N. |
Regulatory Compliance |
57 |
INTRODUCTION
The Debtors propose this Plan
for the resolution of the outstanding Claims against and Interests in the Debtors pursuant to chapter 11 of the Bankruptcy Code. Capitalized
terms used herein and not otherwise defined have the meanings ascribed to such terms in Article I.A of this Plan. Although proposed
jointly for administrative purposes, the Plan constitutes a separate Plan for each Debtor for the resolution of outstanding Claims and
Interests pursuant to the Bankruptcy Code. Holders of Claims against or Interests in the Debtors may refer to the Disclosure Statement
for a discussion of the Debtors’ history, businesses, assets, results of operations, historical financial information, and projections
of future operations, as well as a summary and description of this Plan, the Restructuring Transactions, and certain related matters.
The Debtors are the proponents of the Plan within the meaning of section 1129 of the Bankruptcy Code.
ALL HOLDERS OF CLAIMS AGAINST
OR INTERESTS IN THE DEBTORS, TO THE EXTENT APPLICABLE, ARE ENCOURAGED TO READ THE PLAN AND THE DISCLOSURE STATEMENT IN THEIR ENTIRETY
BEFORE VOTING TO ACCEPT OR REJECT THE PLAN.
Article I.
DEFINED TERMS, RULES OF INTERPRETATION,
COMPUTATION OF TIME, and governing law
As used in this Plan, capitalized
terms have the meanings set forth below.
1. “1L
Exit Facility” means that certain first lien term loan facility to be issued by the Reorganized Debtors on the Plan Effective
Date in accordance with the 1L Exit Facility Documents.
2. “1L
Exit Facility Agent” means the agent under the 1L Exit Facility.
3. “1L
Exit Facility Credit Agreement” means that certain credit agreement governing the 1L Exit Facility, which shall be consistent
in all material respects with the 1L Exit Facility Term Sheet.
4. “1L
Exit Facility Documents” means the 1L Exit Facility Credit Agreement, the 1L Exit Facility Term Sheet, the Intercreditor Agreement,
and any other documentation necessary or appropriate to effectuate the incurrence of the 1L Exit Facility.
5. “1L
Exit Facility Lenders” means the Holders of 1L Exit Facility Loans on the Plan Effective Date.
6. “1L
Exit Facility Loans” means the term loans provided under the 1L Exit Facility on the terms and conditions set forth in the 1L
Exit Facility Credit Agreement, including (a) the term loans to be distributed on the Plan Effective Date on account of the
Term Loan DIP Claims and the Priority Term Loan Claims and (b) the New Money 1L Exit Term Loans.
7. “1L
Exit Facility Term Sheet” means that certain term sheet with respect to the 1L Exit Facility attached to the Restructuring Support
Agreement as Exhibit D.
8. “2L
Exit Facility” means that certain second lien term loan facility to be issued by the Reorganized Debtors on the Plan Effective
Date in accordance with the 2L Exit Facility Documents.
9. “2L
Exit Facility Agent” means the agent under the 2L Exit Facility.
10. “2L
Exit Facility Credit Agreement” means that certain credit agreement governing the 2L Exit Facility, which shall be consistent
in all material respects with the 2L Exit Facility Term Sheet.
11. “2L
Exit Facility Documents” means the 2L Exit Facility Credit Agreement, the 2L Exit Facility Term Sheet, the Intercreditor Agreement,
and any other documentation necessary or appropriate to effectuate the incurrence of the 2L Exit Facility.
12. “2L
Exit Facility Loans” means the loans under the 2L Exit Facility.
13. “2L
Exit Facility Term Sheet” means that certain term sheet with respect to the 2L Exit Facility attached to the Restructuring Support
Agreement as Exhibit E.
14. “3L
Exit Facility” means that certain third lien convertible term loan facility to be issued by the Reorganized Debtors on the Plan
Effective Date in accordance with the 3L Exit Facility Documents.
15. “3L
Exit Facility Agent” means the agent under the 3L Exit Facility.
16. “3L
Exit Facility Credit Agreement” means the credit agreement governing the 3L Exit Facility, which shall be consistent in all
material respects with the 3L Exit Facility Term Sheet.
17. “3L
Exit Facility Documents” means the 3L Exit Facility Credit Agreement, the 3L Exit Facility Term Sheet, the Intercreditor Agreement,
and any other documentation necessary or appropriate to effectuate the incurrence of the 3L Exit Facility.
18. “3L
Exit Facility Loans” means the loans under the 3L Exit Facility.
19. “3L
Exit Facility Lenders” means the Holders of 3L Exit Facility Loans on the Plan Effective Date, excluding any Holders of 3L Exit
Facility Loans that convert the entirety of their 3L Exit Facility Loans into 2L Exit Facility Loans on the Plan Effective Date by exercising
their Conversion Rights.
20. “3L
Exit Facility Term Sheet” means that certain term sheet with respect to the 3L Exit Facility attached to the Restructuring Support
Agreement as Exhibit F.
21. “ABL
Agent” means PNC Bank, National Association, or any assign or successor thereto, as administrative agent and collateral agent
under the ABL Credit Agreement.
22. “ABL
Claims” means Claims arising on account of the ABL Facility.
23. “ABL
Credit Agreement” means that certain ABL Credit and Guaranty Agreement, dated as of July 18, 2018, by and among the Prepetition
Borrower, the Prepetition Guarantors, the ABL Agent, and the ABL Lenders, as amended, modified, or supplemented from time to time.
24. “ABL
DIP Agent” means PNC Bank, National Association, or any assign or successor thereto, in its capacity as administrative agent
under the ABL DIP Credit Agreement.
25. “ABL
DIP Claims” means any Claim arising on account of ABL DIP Loans under the ABL DIP Credit Agreement, including any and
all accrued but unpaid interest, fees, costs, and expenses.
26. “ABL
DIP Credit Agreement” means the credit agreement governing the ABL DIP Facility, which is attached to the Restructuring Support
Agreement and as approved by the DIP Orders.
27. “ABL
DIP Documents” means the ABL DIP Credit Agreement and any other documentation necessary or appropriate to effectuate the incurrence
of the ABL DIP Facility.
28. “ABL
DIP Facility” means the new superpriority, asset-based, senior secured, debtor in possession revolving credit facility to be
issued by the Reorganized Debtors in accordance with the ABL DIP Documents.
29. “ABL
DIP Lenders” means the lenders from time to time party to the ABL DIP Credit Agreement.
30. “ABL
DIP Loans” means the loans under the ABL DIP Facility, including the ABL Roll-Up DIP Loans.
31. “ABL
Exit Facility” means that certain new, asset-backed loan facility to be issued by the Reorganized Debtors on the Plan Effective
Date in accordance with the ABL Exit Facility Documents.
32. “ABL
Exit Facility Agent” means PNC Bank, National Association, or any successor thereto, in its capacity as administrative agent
under the ABL Exit Facility Credit Agreement.
33. “ABL
Exit Facility Credit Agreement” means the credit agreement governing the ABL Exit Facility, which shall be consistent in all
material respects with the ABL Exit Facility Term Sheet.
34. “ABL
Exit Facility Documents” means the ABL Exit Facility Credit Agreement, the ABL Exit Facility Term Sheet, the Intercreditor Agreement,
and any other documentation necessary or appropriate to effectuate the incurrence of the ABL Exit Facility.
35. “ABL
Exit Facility Lenders” means the lenders from time to time party to the ABL Exit Facility Credit Agreement.
36. “ABL
Exit Facility Loans” means the loans under the ABL Exit Facility.
37. “ABL
Exit Facility Term Sheet” has the meaning set forth in the Restructuring Support Agreement.
38. “ABL
Facility” means the asset-based loan facility arising under the ABL Credit Agreement.
39. “ABL
Lenders” means the lenders from time to time party to the ABL Credit Agreement.
40. “ABL
Released Parties” means, each of, and in each case in its capacity as such: (a) the ABL Agent, (b) each ABL Lender,
(c) the ABL DIP Agent, (d) each ABL DIP Lender, (e) the ABL Exit Facility Agent, (f) each ABL Exit Facility Lender,
(g) any issuer of letters of credit under the ABL Credit Agreement, ABL DIP Credit Agreement, or ABL Exit Facility Credit Agreement,
(h) each current and former Affiliate of each Entity in clauses (a) through (g) and the following clause (i), and (i) each
Related Party of each Entity in clauses (a) through (g) and this clause (i).
41. “ABL
Releasing Parties” means, each of, and in each case solely in its capacity as such: (a) the ABL Agent, (b) the ABL
Lenders, (c) the ABL DIP Agent, (d) the ABL DIP Lenders, and (e) any issuer of letters of credit under the ABL Credit Agreement
or ABL DIP Credit Agreement. For the avoidance of doubt, the ABL Releasing Parties are engaged in a wide range of financial services and
businesses. Accordingly, each ABL Releasing Party shall be bound under the Plan only in such ABL Releasing Party’s capacity set
forth in the foregoing clauses (a) through (e). The obligations of the ABL Releasing Parties set forth in this Plan shall only apply
to such ABL Releasing Party in such capacity and shall not apply to the ABL Releasing Parties in any other capacity.
42. “ABL
Roll-Up DIP Loans” means the ABL Claims rolled-up into ABL DIP Loans pursuant to the ABL DIP Documents and the DIP Orders.
43. “Accordion”
means Accordion Partners, LLC.
44. “Administrative
Claim” means a Claim for costs and expenses of administration of the Estates under sections 503(b), 507(a)(2), 507(b), or 1114(e)(2) of
the Bankruptcy Code, including: (a) the actual and necessary costs and expenses incurred on or after the Petition Date of preserving
the Estates and operating the businesses of the Debtors; (b) Allowed Professional Fee Claims in the Chapter 11 Cases; and (c) all
fees and charges assessed against the Estates under chapter 123 of title 28 of the United States Code, 28 U.S.C. §§ 1911-1930.
45. “Affiliate”
has the meaning set forth in section 101(2) of the Bankruptcy Code as if the reference Entity was a debtor in a case under
the Bankruptcy Code.
46. “Agent/Trustee”
means the DIP Agents, the Exit Agents, the Prepetition Agents, and the Convertible Notes Trustee.
47. “Allowed”
means, as to a Claim or an Interest, a Claim or an Interest allowed under the Plan, under the Bankruptcy Code, or by a Final Order,
as applicable. For the avoidance of doubt, (a) there is no requirement to File a Proof of Claim (or move the Court for allowance)
to be an Allowed Claim under the Plan, and (b) the Debtors may affirmatively determine to deem Unimpaired Claims Allowed to the same
extent such Claims would be allowed under applicable nonbankruptcy law.
48. “Backstop
Commitment” means, with respect to a given Backstop Party, such Backstop Party’s commitments under the DIP-to-Exit Commitment
Letter, including such Backstop Party’s commitment to backstop the principal amounts of Term Loan DIP New Money Loans and New Money
Exit Financing Commitments set forth opposite such Backstop Party’s name on the applicable annex to the DIP-to-Exit Commitment Letter.
49. “Backstop
Fee” means the “Backstop Fee” (as defined in the Term Loan DIP Credit Agreements) in an amount equal to 6.00 percent
of the Term Loan DIP New Money Loans and New Money 1L Exit Term Loans contemplated by the Term Loan DIP Credit Agreements, payable in
kind.
50. “Backstop
Parties” means, collectively, the Holders of Term Loan Claims party to the DIP-to-Exit Commitment Letter, which Holders shall
backstop the full amount of the Term Loan DIP New Money Loans and the New Money Exit Financing Commitment. For the avoidance of doubt,
in accordance with the terms of the DIP-to-Exit Commitment Letter, each Backstop Party is either (a) a “qualified institutional
buyer”, as such term is defined in Rule 144A under the Securities Act, (b) a non-U.S. person as defined under Regulation
S under the Securities Act, or (c) an institutional “accredited investor” within the meaning of Rule 501(a)(1),
(2), (3), (7), (8), (9), (12) or (13) under Regulation D promulgated under the Securities Act.
51. “Bankruptcy
Code” means title 11 of the United States Code, 11 U.S.C. §§ 101–1532.
52. “Bankruptcy
Rules” means the Federal Rules of Bankruptcy Procedure promulgated under section 2075 of the Judicial Code and the
general, local, and chambers rules of the Court.
53. “Blank
Rome” means Blank Rome LLP.
54. “Bracewell”
means Bracewell LLP.
55. “Business
Day” means any day other than a Saturday, Sunday, or “legal holiday” (as defined in Bankruptcy Rule 9006(a)).
56. “Capital
Lease” means any lease of property which a Debtor, as lessee, capitalizes on its balance sheet in accordance with generally
accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies
with similar functions of comparable stature and authority within the United States accounting profession), which are applicable to the
relevant circumstances as of the date of determination.
57. “Capital
Lease Claim” means a Claim arising on account of a Capital Lease.
58. “Cash”
means cash and cash equivalents, including bank deposits, checks, and other similar items in legal tender of the United States of America.
59. “Causes
of Action” means any claims, interests, damages, remedies, causes of action, demands, rights, actions, controversies,
proceedings, agreements, suits, obligations, liabilities, accounts, defenses, offsets, powers, privileges, licenses, liens, indemnities,
guaranties, and franchises of any kind or character whatsoever, whether known or unknown, foreseen or unforeseen, existing or hereinafter
arising, contingent or non-contingent, liquidated or unliquidated, secured or unsecured, assertable directly or derivatively, matured
or unmatured, suspected or unsuspected, whether arising before, on, or after the Petition Date, in contract, tort, law, equity, or otherwise.
Causes of Action also include: (a) all rights of setoff, counterclaim, or recoupment and claims under contracts or for breaches of
duties imposed by law or in equity; (b) the right to object to or otherwise contest Claims or Interests; (c) claims pursuant
to section 362 or chapter 5 of the Bankruptcy Code; (d) such claims and defenses as fraud, mistake, duress, and usury, and any other
defenses set forth in section 558 of the Bankruptcy Code; and (e) any avoidance actions arising under chapter 5 of the Bankruptcy
Code or under similar local, state, federal, or foreign statutes and common law, including fraudulent transfer laws.
60. “Chapter
11 Cases” means (a) when used with reference to a particular Debtor, the case pending for that Debtor under chapter 11
of the Bankruptcy Code in the Court and (b) when used with reference to all the Debtors, the procedurally consolidated chapter 11
cases pending for the Debtors in the Court.
61. “Claim”
means any claim, as defined in section 101(5) of the Bankruptcy Code, against any of the Debtors.
62. “Claims
and Noticing Agent” means Epiq Corporate Restructuring, LLC, the claims, noticing, and solicitation agent retained or
proposed to be retained by the Debtors in the Chapter 11 Cases by Court order.
63. “Claims
Register” means the official register of Claims and Interests in the Debtors maintained by the Claims and Noticing Agent.
64. “Class”
means a class of Claims or Interests as set forth in Article III hereof pursuant to section 1122(a) of the Bankruptcy Code.
65. “CM/ECF”
means the Court’s Case Management and Electronic Case Filing system.
66. “Confirmation”
means the Court’s entry of the Confirmation Order on the docket of the Chapter 11 Cases.
67. “Confirmation
Date” means the date upon which the Court enters the Confirmation Order on the docket of the Chapter 11 Cases, within the
meaning of Bankruptcy Rules 5003 and 9021.
68. “Confirmation
Hearing” means the hearing held by the Court on Confirmation of the Plan, pursuant to Bankruptcy Rule 3020(b)(2) and
sections 1128 and 1129 of the Bankruptcy Code, as such hearing may be continued from time to time.
69. “Confirmation
Order” means the order of the Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
70. “Consenting
ABL Lenders” has the meaning set forth in the Restructuring Support Agreement.
71. “Consenting
Convertible Noteholders” has the meaning set forth in the Restructuring Support Agreement.
72. “Consenting
Creditors” means the Consenting ABL Lenders, the Consenting Term Lenders, and the Consenting Convertible Noteholders.
73. “Consenting
Sponsors” has the meaning set forth in the Restructuring Support Agreement.
74. “Consenting
Stakeholders” means each of the Consenting Creditors and the Consenting Sponsors.
75. “Consenting
Term Lenders” has the meaning set forth in the Restructuring Support Agreement.
76. “Consummation”
means the occurrence of the Plan Effective Date.
77. “Conversion
Amount” means, with respect to a given Conversion Right, the amount of Rollover Term Loan Claims held by the applicable Holder
on the Petition Date (together with any accrued and unpaid interest, fees, expenses, or other Claims in respect thereof through the Plan
Effective Date).
78. “Conversion
Right” means the right of each Holder of Rollover Term Loan Claims that subscribes and funds (or whose designee subscribes and
funds) an amount of Term Loan DIP New Money Loans greater than or equal to such Holder’s pro rata allocation of the Term
Loan DIP New Money Loans, based on the aggregate outstanding principal amount of Rollover Term Loan Claims and Tranche B Term Loan Claims
held by such Holder on the Petition Date relative to the aggregate outstanding principal amount of all Rollover Term Loan Claims and Tranche
B Term Loan Claims on the Petition Date, to convert an amount of 3L Exit Facility Loans distributed to such Holder (or its designee) on
the Plan Effective Date (in accordance with Article III.B.4(c)) equal to such Holder’s Conversion Amount (or, if the amount
of 3L Exit Facility Loans distributed to such Holder (or its designee) on the Plan Effective Date in accordance with Article III.B.4(c) is
less than the Conversion Amount, such lesser amount) into an equivalent principal amount of 2L Exit Facility Loans on the Plan Effective
Date in accordance with the terms and conditions of the Term Loan DIP Documents.
79. “Convertible
Notes” means the senior unsecured convertible notes due 2027 issued pursuant to the Convertible Notes Indenture.
80. “Convertible
Notes Claims” means Claims, other than on account of Convertible Notes Trustee Fees and Expenses, arising on account of principal,
accrued interest, and any other amounts under the Convertible Notes Indenture.
81. “Convertible
Notes Indenture” means that certain indenture, dated as of February 14, 2022, by and among QualTek Services Inc., the guarantors
party thereto, and the Convertible Notes Trustee, as amended, restated, amended and restated, waived, supplemented, or otherwise modified
from time to time in accordance with the terms thereof.
82. “Convertible
Notes Trustee” means Wilmington Trust, National Association, or any successor thereto, as trustee under the Convertible Notes
Indenture.
83. “Convertible
Notes Trustee Charging Lien” means any Lien or other priority of payment to which the Convertible Notes Trustee is entitled
under the Convertible Notes Indenture or any other ancillary documents, instruments, or agreements executed in connection therewith or
pursuant thereto, against distributions to be made to Holders of Convertible Note Claims, for payment of any Convertible Notes Trustee
Fees and Expenses.
84. “Convertible
Notes Trustee Fees and Expenses” means the reasonable and documented fees, expenses, disbursements, and indemnity Claims of
the Convertible Notes Trustee (in any of its capacities), including, without limitation, attorneys’ fees and expenses, arising under
or in connection with the Convertible Notes Indenture, any other ancillary documents, instruments, or agreements executed in connection
therewith or pursuant thereto, and/or the Restructuring Transactions, whether incurred before or after the Petition Date or before the
Plan Effective Date.
85. “Court”
means the United States Court for the Southern District of Texas.
86. “Covered
Claim” means any Claim or Cause of Action related to any act or omission in connection with, relating to, or arising out of,
the Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, or filing of the Restructuring Support Agreement and related
prepetition transactions, the DIP Facilities, the DIP-to-Exit Commitment Letter, the DIP-to-Exit Allocation Process, the Disclosure Statement,
the Plan, the Plan Supplement, the Exit Facilities, or any Restructuring Transaction, contract, instrument, release, or other agreement
or document created or entered into in connection with the Restructuring Support Agreement, the DIP Facilities, the DIP-to-Exit Commitment
Letter, the DIP-to-Exit Allocation Process, the Disclosure Statement, the Plan, the Plan Supplement, the Exit Facilities, the Chapter
11 Cases, the Filing of the Chapter 11 Cases, the DIP Documents, the DIP Orders, the solicitation of votes on the Plan, the prepetition
negotiation and settlement of claims, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation
of the Plan, or the distribution of property under the Plan or any other related agreement, or upon any other related act or omission,
transaction, agreement, event, or other occurrence taking place prior to the Plan Effective Date.
87. “Covered
Party” means with respect to the Debtors, each Related Party of each Debtor, including, for the avoidance of doubt, each such
Entity’s financial advisors, partners, attorneys, accountants, investment bankers, consultants, and other professionals, each in
their capacity as such.
88. “Cure”
means a Claim (unless waived or modified by the applicable counterparty) based upon a Debtor’s defaults under an Executory
Contract or an Unexpired Lease assumed by such Debtor under section 365 of the Bankruptcy Code, other than a default that is not required
to be cured pursuant to section 365(b)(2) of the Bankruptcy Code.
89. “D&O
Liability Insurance Policies” means all insurance policies of any of the Debtors for directors’, managers’, and
officers’ liability existing as of the Petition Date (including any “tail policy”) and all agreements, documents, or
instruments relating thereto.
90. “Davis
Polk” means Davis Polk & Wardwell LLP.
91. “De-SPAC
Transaction” means the transactions contemplated by and related to that certain Business Combination Agreement, dated as of
June 16, 2021, by and among QualTek Services Inc. (f/k/a Roth CH Acquisition III Co.), Roth CH III Blocker Merger Sub, LLC, BCP QualTek
Investors, LLC, Roth CH III Merger Sub, LLC, QualTek HoldCo, LLC (f/k/a BCP QualTek HoldCo, LLC), and BCP QualTek, LLC, solely in its
capacity as representative of the Blocker Owners and the Company Unitholders (each as defined therein).
92. “Debtor
Release” means the release set forth in Article VIII.C of this Plan.
93. “Debtors”
means, collectively, each of the following: QualTek Services Inc.; AdvanTek Electrical Construction, LLC; Concurrent Group LLC; NX Utilities
ULC; QualSat, LLC; QualTek Buyer, LLC; QualTek Fulfillment LLC; QualTek HoldCo, LLC; QualTek LLC; QualTek Management, LLC; QualTek MidCo,
LLC; QualTek Recovery Logistics LLC; QualTek Renewables LLC; QualTek Wireless LLC; QualTek Wireline LLC; Site Safe, LLC; The Covalent
Group LLC; and Urban Cable Technology LLC.
94. “Definitive
Documentation” means the definitive documents and agreements governing the Restructuring Transactions (including any related
orders, agreements, instruments, schedules, or exhibits) that are contemplated by and referenced in the Plan (as amended, modified, or
supplemented from time to time), including the following: (a) the Plan (and all exhibits, ballots, solicitation procedures, and other
documents and instruments related thereto), including any “Definitive Documents” as defined therein and not explicitly so
defined herein; (b) the Confirmation Order; (c) the DIP Orders, (d) the DIP Documents; (e) the Disclosure Statement;
(f) the Disclosure Statement Order; (g) the First Day Pleadings and all orders sought pursuant thereto; (h) the Plan Supplement;
(i) the New Organizational Documents; (j) any and all documentation required to implement, issue, and distribute the New Equity
Interests; (k) the Exit Facility Documents; (l) the Warrant Agreement; and (m) such other agreements and documentation
desired or necessary to consummate and document the transactions contemplated by this Plan and the Restructuring Support Agreement (and,
with respect to each of the foregoing clauses (a) through (m), subject to the consent, approval, and consultation rights set forth
therein).
95. “DIP
Agents” means the ABL DIP Agent and the Term Loan DIP Agent.
96. “DIP
Credit Agreements” means the Term Loan DIP Credit Agreement and the ABL DIP Credit Agreement.
97. “DIP
Documents” means the ABL DIP Documents and the Term Loan DIP Documents.
98. “DIP
Facilities” means the ABL DIP Facility and the Term Loan DIP Facility.
99. “DIP
Orders” means, collectively, the Interim DIP Order and the Final DIP Order.
100. “DIP-to-Exit
Allocation Process” means the allocation of the Term Loan DIP New Money Loans and New Money Exit Financing Commitments to be
consummated by the Debtors following entry of the Interim DIP Order in accordance with the Solicitation Materials and the Term Loan DIP
Documents.
101. “DIP-to-Exit
Commitment Letter” means the commitment letter agreement entered into between the Debtors and the Backstop Parties.
102. “DIP-to-Exit
Commitment Premium” means 50 percent of the New Equity Interests, subject to dilution by the Warrants and the MIP, payable
on a pro rata basis to the Term Loan DIP Lenders (or their designees) based on their respective holdings of Term Loan DIP New Money
Loans in consideration of their provision of the Term Loan DIP New Money Loans and the New Money Exit Financing Commitments.
103. “DIP-to-Exit
Eligible Offeree Claims” means, collectively, the Rollover Term Loan Claims and the Tranche B Term Loan Claims held by DIP-to-Exit
Eligible Offerees.
104. “DIP-to-Exit
Eligible Offerees” means, collectively, the Holders of Rollover Term Loan Claims and Tranche B Term Loan Claims.
105. “Disbursing
Agent” means, as applicable, the Reorganized Debtors or any Entity the Reorganized Debtors select to make or to facilitate
distributions in accordance with the Plan, which Entity may include the Claims and Noticing Agent.
106. “Disclosure
Statement” means the Disclosure Statement Relating to the Debtors’ Joint Plan of Reorganization Pursuant to Chapter
11 of the Bankruptcy Code, including all exhibits and schedules thereto, that is prepared and distributed in accordance with the Bankruptcy
Code, the Bankruptcy Rules, and any other applicable law, filed contemporaneously herewith as the same may be supplemented, amended, or
modified from time to time.
107. “Disclosure
Statement Order” means a Final Order of the Court approving the Disclosure Statement.
108. “Disputed”
means, as to a Claim or an Interest, a Claim or an Interest: (a) that is not Allowed; (b) that is not disallowed under the Plan,
the Bankruptcy Code, or a Final Order, as applicable; and (c) with respect to which a party in interest has filed a Proof of Claim
or otherwise made a written request to a Debtor for payment, without any further notice to or action, order, or approval of the Court.
109. “Distribution
Record Date” means the record date for purposes of making distributions under the Plan on account of Allowed Claims, which date
shall be the first day of the Confirmation Hearing or such other date agreed to by the Debtors, the Required Consenting ABL Lenders, the
Required Consenting Term Lenders, and the Required Consenting Convertible Noteholders.
110. “Employment
Obligations” means any existing obligations to employees to be assumed, reinstated, or honored, as applicable, in accordance
with Article IV.O of the Plan.
111. “Entity”
means any entity, as defined in section 101(15) of the Bankruptcy Code.
112. “Equity
Interest” means any Equity Security, or any other equity or ownership interest (including any such interest in a partnership,
limited liability company, or other Entity), in any Debtor.
113. “Equity
Security” means any equity security, as defined in section 101(16) of the Bankruptcy Code, in a Debtor.
114. “Estate”
means, as to each Debtor, the estate created for the Debtor in its Chapter 11 Case pursuant to section 541 of the Bankruptcy Code.
115. “Exchange
Act” means the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder).
116. “Excluded
ABL Obligations” means, collectively, (a) all indebtedness, obligations, and liabilities of any Released Party (i) related
to any Cash Management Services provided to the Debtors or their Affiliates (as defined in the ABL Credit Agreement and the ABL DIP Credit
Agreement) or (ii) to the provider of any Cash Management Services, including, without limitation, any Cash Management Services Provider
(as defined in the ABL Credit Agreement and the ABL DIP Credit Agreement), in the case of each of clause (i) and (ii) solely
in its capacity as a provider of such Cash Management Services; (b) all indebtedness, obligations, and liabilities of any Released
Party in respect of any letter of credit issued by any ABL Releasing Party pursuant to the ABL Credit Agreement or the ABL DIP Credit
Agreement that remains outstanding after the Plan Effective Date; (c) all indebtedness, obligations, and liabilities of any Released
Party in respect any credit cards or debit cards issued by any ABL Releasing Party that remains outstanding and in use by any Released
Party after the Plan Effective Date; (d) all indebtedness, obligations (including indemnities), and liabilities of any Released Party
that survive payment in full of the Revolving Loans (as defined in each of the ABL Credit Agreement and ABL DIP Credit Agreement) under
the ABL Credit Agreement and ABL DIP Credit Agreement and as provided under and in accordance with the payoff statement referenced in
Article II.B of this Plan; and (e) all indebtedness, obligations, liabilities, and other amounts (other than the Revolving Loans
(as defined in each of the ABL Credit Agreement and the ABL DIP Credit Agreement)) that have not been paid or satisfied on or prior to
the Plan Effective Date in respect of any other financial services, treasury management or similar services, or other financial accommodations
provided by or on behalf of any ABL Releasing Party or any of their respective affiliates or other business groups to any Released Party
prior to the Plan Effective Date or that may arise in respect of any such services that any ABL Releasing Party or any of their respective
Affiliates may provide on or after the Plan Effective Date; and (f) any obligation, duty, or responsibility as set forth in Article XII.N
of this Plan.
117. “Exculpated
Claim” means a claim subject to Article VIII.E hereof.
118. “Exculpated
Parties” means, collectively, and in each case in its capacity as such: (a) each of the Debtors; and (b) any
official committees appointed in the Chapter 11 Cases and each of their respective members.
119. “Executory
Contracts” means contracts to which one or more of the Debtors are a party and that is subject to assumption or rejection under
section 365 of the Bankruptcy Code.
120. “Exit
Agents” means 1L Exit Facility Agent, the 2L Exit Facility Agent, the 3L Exit Facility Agent, the ABL Exit Facility Agent, and
their successors, assigns, or any replacement agent appointed pursuant to the terms of the Exit Facility Credit Agreements.
121. “Exit
Facilities” means the 1L Exit Facility, the 2L Exit Facility, the 3L Exit Facility, and the ABL Exit Facility.
122. “Exit
Facility Credit Agreements” means the 1L Exit Facility Credit Agreement, the 2L Exit Facility Credit Agreement, the 3L Exit
Facility Credit Agreement, and the ABL Exit Facility Credit Agreement.
123. “Exit
Facility Documents” means the Exit Facility Credit Agreements, the Exit Facility Term Sheets, the Intercreditor Agreement, and
any other documentation necessary or appropriate to effectuate the incurrence of the Exit Facilities.
124. “Exit
Facility Loans” means the ABL Exit Facility Loans, 1L Exit Facility Loans, 2L Exit Facility Loans, and 3L Exit Facility Loans.
125. “Exit
Facility Term Sheets” means 1L Exit Facility Term Sheet, the 2L Exit Facility Term Sheet, the 3L Exit Facility Term Sheet, and
the ABL Exit Facility Term Sheet.
126. “Federal
Judgment Rate” means the federal judgment rate in effect as of the Petition Date.
127. “File”
means file, filed, or filing with the Court or its authorized designee in the Chapter 11 Cases. “Filed” and “Filing”
shall have correlative meanings.
128. “Final
DIP Order” means the order of the Court approving the Debtors’ incurrence of the ABL DIP Facility and the Term Loan DIP
Facility on a final basis.
129. “Final
Order” means, as applicable, an order or judgment of the Court or other court of competent jurisdiction with respect
to the relevant subject matter that has not been reversed, stayed, modified, or amended, and as to which the time to appeal or seek certiorari
has expired and no appeal or petition for certiorari has been timely taken, or as to which any appeal that has been taken or any petition
for certiorari that has been or may be filed has been resolved by the highest court to which the order or judgment could be appealed or
from which certiorari could be sought or the new trial, reargument, or rehearing shall have been denied, resulted in no modification of
such order, or has otherwise been dismissed with prejudice.
130. “First
Day Pleadings” means the motions, petitions, pleadings, draft orders and other documents that the Debtors file with the Court
on the Petition Date.
131. “Fortress”
means certain funds and/or accounts managed or advised by Fortress Credit Advisors LLC or its affiliates.
132. “Fortress
Non-Released Party” means Brightstar Capital Partners or any of its current or former Affiliates or Related Parties (other than
the Debtors), in each case in their capacity as such, any current or former Affiliate of a Consenting Sponsor in its capacity as
such, any Related Party of any Consenting Sponsor in its capacity as such, or any Person that is a current or former director, officer,
or Affiliate of any Debtor (other than the Debtors’ current management), in each case in their capacity as such (other than the
members of the Special Committee).
133. “FTI”
means FTI Consulting, Inc.
134. “General
Unsecured Claim” means any Claim that is not (a) an Administrative Claim, (b) a Professional Fee Claim, (c) a
Secured Tax Claim, (d) an Other Secured Claim, (e) a Priority Tax Claim, (f) an Other Priority Claim, (g) a Rollover
Term Loan Claim, (h) a Priority Term Loan Claim, (i) a Tranche B Term Loan Claim, (j) a Convertible Notes Claim, (k) an
Intercompany Claim, (l) an ABL DIP Claim, (m) an ABL Claim, (n) a Term Loan DIP Claim, or (o) a TRA Claim. “General
Unsecured Claim” includes any Claim for Convertible Notes Trustee Fees and Expenses in excess of the amount required to be paid
under Article IX.A.11, which such Claim shall be deemed an Allowed General Unsecured Claim in full.
135. “Governing
Body” means, in each case in its capacity as such, the board of directors, board of managers, manager, general partner, investment
committee, special committee, or such similar governing body of any of the Debtors or the Reorganized Debtors, including the Special Committee,
as applicable.
136. “Governmental
Unit” means any governmental unit, as defined in section 101(27) of the Bankruptcy Code.
137. “Haynes
and Boone” means Haynes and Boone, LLP.
138. “Holder”
means an Entity holding a Claim or Interest.
139. “Houlihan”
means Houlihan Lokey, Inc.
140. “Impaired”
means “impaired” within the meaning of section 1124 of the Bankruptcy Code.
141. “Intercompany
Claim” means any Claim against a Debtor held by another Debtor.
142. “Intercompany
Interest” means an Interest in a Debtor held by another Debtor.
143. “Intercreditor
Agreement” means the intercreditor agreement among the ABL Exit Facility Agent, the 1L Exit Facility Agent, the 2L Exit Facility
Agent, and the 3L Exit Facility Agent, which shall be in a form and substance acceptable to each party thereto.
144. “Interest”
means, collectively, (a) any Equity Interest (b) any other rights, options, warrants, stock appreciation rights, phantom stock
rights, restricted stock units, redemption rights, repurchase rights, convertible, exercisable or exchangeable securities or other agreements,
arrangements, or commitments of any character relating to, or whose value is related to, any such interest or other ownership interest
in any Debtor, and (c) any and all Claims that are otherwise determined by the Court to be an Equity Interest, including any Claim
or debt that is recharacterized as an Equity Interest or subject to subordination as an equity interest pursuant to section 510(b) of
the Bankruptcy Code.
145. “Interim
DIP Order” means the order of the Court approving the Debtors’ incurrence of the ABL DIP Facility and the Term Loan DIP
Facility on an interim basis.
146. “Investor
Rights Agreement” means that certain Investor Rights Agreement, dated as of February 14, 2022 by and among Roth CH
Acquisition III Co., BCP QualTek, LLC, and the other parties thereto.
147. “Judicial
Code” means title 28 of the United States Code, 28 U.S.C. §§ 1–4001.
148. “Law”
means any federal, state, local, or foreign law (including common law), statute, code, ordinance, rule, regulation, order, ruling, or
judgment, in each case, that is validly adopted, promulgated, issued, or entered by a governmental authority of competent jurisdiction
(including the Court).
149. “Lien”
means a lien as defined in section 101(37) of the Bankruptcy Code.
150. “MIP”
means the new management incentive plan that shall be determined by the New Board and disclosed in the Plan Supplement and in any event
shall allocate no more than 10 percent of the New Equity Interests unless otherwise consented to by the Required Consenting Convertible
Noteholders and the Required Consenting Term Lenders.
151. “New
Board” means the board of directors or the board of managers of Reorganized QualTek.
152. “New
Equity Interests” means the new common stock or membership units, as the case may be, of Reorganized QualTek issued on the Plan
Effective Date.
153. “New
Money 1L Exit Term Loans” means $25 million in principal amount of new money 1L Exit Facility Loans.
154. “New
Money Exit Financing Commitments” means the commitments of the Term Loan DIP Lenders to lend the New Money 1L Exit Term Loans
to the Reorganized Debtors on the Plan Effective Date in accordance with the terms and conditions of the Term Loan DIP Documents.
155. “New
Organizational Documents” means the documents providing for corporate governance of Reorganized QualTek and the other Reorganized
Debtors, including charters, bylaws, the Registration Rights Agreement, operating agreements, or other organizational or governance documents
or shareholders’ agreements, as applicable, which shall be consistent with section 1123(a)(6) of the Bankruptcy Code (as
applicable) and the Restructuring Support Agreement (and subject to the consent, approval, and consultation rights set forth therein).
156. “Non-Participating
Rollover Lender” means any Holder of a Rollover Term Loan that is not a Participating Rollover Lender.
157. “Other
Priority Claim” means any Claim, other than an Administrative Claim or a Priority Tax Claim, entitled to priority in right of
payment under section 507(a) of the Bankruptcy Code.
158. “Other
Secured Claim” means any prepetition Secured Claim or Capital Lease Claim against the Debtors other than an ABL DIP Claim, a
Term Loan DIP Claim, an ABL Claim, or a Term Loan Claim.
159. “Participating
Rollover Lender” means any Holder of a Rollover Term Loan who subscribes and funds (or whose designee subscribes and funds)
an amount of Term Loan DIP New Money Loans greater than or equal to such Holder’s pro rata allocation of the Term Loan DIP
New Money Loans, based on the aggregate outstanding principal amount of Rollover Term Loan Claims and Tranche B Term Loan Claims held
by such Holder on the Petition Date relative to the aggregate outstanding principal amount of all Rollover Term Loan Claims and Tranche
B Term Loan Claims on the Petition Date.
160. “Paul,
Weiss” means Paul, Weiss, Rifkind, Wharton & Garrison LLP.
161. “Person”
has the meaning set forth in section 101(41) of the Bankruptcy Code.
162. “Petition
Date” means the date on which the Debtors commenced the Chapter 11 Cases.
163. “Plan”
means this Debtors’ Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code, including the Plan Supplement,
which is incorporated herein by reference.
164. “Plan
Distribution” means a payment or distribution to Holders of Allowed Claims, Allowed Interests, or other eligible Entities under
and in accordance with the Plan.
165. “Plan
Effective Date” means the date that is the first Business Day after the Confirmation Date on which (a) no stay of the Confirmation
Order is in effect and (b) all conditions precedent to the occurrence of the Plan Effective Date set forth in Article IX.A of
the Plan have been satisfied or waived in accordance with Article IX.B of the Plan. Any action to be taken on the Plan Effective
Date may be taken on or as soon as reasonably practicable thereafter.
166. “Plan
Supplement” means the compilation of documents and forms of documents, agreements, schedules, and exhibits to the Plan (in each
case, as may be altered, amended, modified, or supplemented from time to time in accordance with the terms hereof and in accordance with
the Bankruptcy Code and Bankruptcy Rules) to be Filed by the Debtors, to the extent reasonably practicable, no later than seven (7) days
before the Confirmation Hearing or such later date as may be approved by the Court on notice to parties in interest, including the following,
as applicable: (a) the New Organizational Documents; (b) the identity and members of the New Board and any executive management
for the Reorganized Debtors; (c) the Schedule of Retained Causes of Action; (d) the Exit Facility Documents; (e) the Restructuring
Transactions Memorandum; (f) the Rejected Executory Contract and Unexpired Lease Schedule, if any; (g) the Warrant Agreement;
and (h) any additional documents Filed with the Court prior to the Plan Effective Date as amendments to the Plan Supplement.
167. “Porter
Hedges” means Porter Hedges LLP.
168. “Prepetition
Agents” means the ABL Agent and the Term Loan Agent, including any successors thereto.
169. “Prepetition
Borrower” means QualTek LLC (f/k/a QualTek USA, LLC) (as successor by merger to BCP QualTek Merger Sub, LLC).
170. “Prepetition
Credit Agreements” means the ABL Credit Agreement and the Term Loan Credit Agreement.
171. “Prepetition
Guarantors” means QualTek Buyer, LLC (f/k/a BCP QualTek Buyer, LLC) and certain subsidiaries of QualTek LLC (f/k/a QualTek USA,
LLC) party to the ABL Credit Agreement and the Term Loan Credit Agreement as guarantors.
172. “Prepetition
Term Loan Claims” means Claims on account of the Prepetition Term Loans.
173. “Prepetition
Term Loans” means the Priority Term Loans, Rollover Term Loans, and Tranche B Term Loans.
174. “Priority
Tax Claim” means any Claim of a Governmental Unit of the kind specified in section 507(a)(8) of the Bankruptcy
Code.
175. “Priority
Term Loan Claims” means Claims on account of the Priority Term Loans.
176. “Priority
Term Loans” has the meaning ascribed to the term “Amendment No. 3 Term Loans” in the Term Loan Credit Agreement.
177. “Pro
Rata” means the ratio that the principal amount of a Holder’s DIP-to-Exit Eligible Offeree Claims outstanding as
of the Petition Date bears to the principal amount of all DIP-to-Exit Eligible Offeree Claims outstanding as of the Petition Date.
178. “Professional”
means an Entity: (a) employed pursuant to a Court order in accordance with sections 327, 363, or 1103 of the Bankruptcy Code and
to be compensated for services rendered prior to or on the Confirmation Date, pursuant to sections 327, 328, 329, 330, 331, and 363 of
the Bankruptcy Code; or (b) awarded compensation and reimbursement by the Court pursuant to section 503(b)(4) of the Bankruptcy
Code.
179. “Professional
Fee Amount” means the aggregate amount of Professional Fee Claims and other unpaid fees and expenses of Professionals estimate
they have incurred or will incur in rendering services to the Debtors as set forth in Article II.C of the Plan.
180. “Professional
Fee Claim” means a Claim by a professional seeking an award by the Court of compensation for services rendered or reimbursement
of expenses incurred through and including the Confirmation Date under sections 330, 331, 503(b)(2), 503(b)(3), 503(b)(4), or 503(b)(5) of
the Bankruptcy Code.
181. “Professional
Fee Escrow Account” means an interest-bearing account funded by the Debtors with Cash on the Plan Effective Date in an amount
equal to the Professional Fee Amount.
182. “Proof
of Claim” means a proof of Claim Filed against any of the Debtors in the Chapter 11 Cases.
183. “Registration
Rights Agreement” shall mean that certain Registration Rights Agreement, the substantially final form of which is attached to the
Plan Supplement as Exhibit A(ii).
184. “Reinstate”
means reinstate, reinstated, or reinstatement with respect to Claims and Interests, that the Claim or Interest shall be rendered Unimpaired
in accordance with section 1124 of the Bankruptcy Code. “Reinstated” and “Reinstatement” shall have correlative
meanings.
185. “Rejected
Executory Contracts and Unexpired Leases Schedule” means the schedule of Executory Contracts and Unexpired Leases to be rejected
by the Debtors pursuant to the Plan, which schedule shall be included in the Plan Supplement, as the same may be amended, modified, or
supplemented from time to time.
186. “Related
Party” means each of, and in each case in its capacity as such, current and former directors, managers, officers, committee
members, members of any Governing Body, equity Holders (regardless of whether such interests are held directly or indirectly), affiliated
investment funds or investment vehicles, managed accounts or funds, predecessors, participants, successors, assigns, subsidiaries, Affiliates,
partners, limited partners, general partners, principals, members, management companies, fund advisors or managers, employees, agents,
trustees, advisory board members, financial advisors, attorneys (including any other attorneys or professionals retained by any current
or former director or manager in his or her capacity as director or manager of an Entity), accountants, investment bankers, consultants,
representatives, and other professionals and advisors and any such Person’s or Entity’s respective heirs, executors, estates,
and nominees.
187. “Released
Party” means in each case in its capacity as such: (a) each Debtor; (b) each Reorganized Debtor; (c) each Consenting
Term Lender; (d) each Consenting Convertible Noteholder; (e) each Consenting Sponsor; (f) each Agent/Trustee (other than
the ABL Agent, ABL DIP Agent, and ABL Exit Facility Agent); (g) each of the Term Loan DIP Lenders; (h) each current and former
Affiliate of each Entity in clause (a) and (b); (i) each Related Party of each Entity in clause (a) and (b); (j) each
current and former Affiliate of each Entity in clause (c) through (h) and the following clause (k); (k) each Related Party
of each Entity in clause (c) through (h) and this clause (k); provided that in each case, an Entity shall not
be a Released Party if it: (x) elects to opt out of the releases contained in Article VIII.D of the Plan; (y) timely
objects to the releases contained in Article VIII.D of the Plan and such objection is not settled, withdrawn, or overruled before
Confirmation, or (z) for the avoidance of doubt, is an ABL Released Party.
188. “Releasing
Party” means in each case in its capacity as such: (a) the Debtors; (b) the Reorganized Debtors; (c) each
of the Term Loan DIP Lenders; (d) each Agent/Trustee (other than the ABL Agent, ABL DIP Agent, and ABL Exit Facility Agent); (e) each
Consenting Term Lender; (f) each Consenting Convertible Noteholder; (g) each Consenting Sponsor; (h) all Holders of Claims
that vote to accept the Plan; (i) all Holders of Claims that are deemed to accept the Plan who do not affirmatively opt out of the
releases provided by the Plan by checking the box on the applicable notice of non-voting status indicating that they opt not to grant
the releases provided in the Plan; (j) all Holders of Claims that abstain from voting on the Plan and who do not affirmatively opt
out of the releases provided by the Plan by checking the box on the applicable ballot indicating that they opt not to grant the releases
provided in the Plan; (k) all Holders of Claims or Interests that vote to reject the Plan or are deemed to reject the Plan and who
do not affirmatively opt out of the releases provided by the Plan by checking the box on the applicable ballot or notice of non-voting
status indicating that they opt not to grant the releases provided in the Plan; (l) each current and former Affiliate of each Entity
in clause (a) through (k); and (m) each Related Party of each Entity in clause (a) through (l) for which such
Entity is legally entitled to bind such Related Party to the releases contained in the Plan under applicable law; provided that
in each case, an Entity shall not be a Releasing Party if it: (x) elects to opt out of the releases contained in Article VIII.D
of the Plan; (y) timely objects to the releases contained in Article VIII.D of the Plan and such objection is not settled, withdrawn,
or overruled before Confirmation, or (z) for the avoidance of doubt, is an ABL Releasing Party; provided further that,
notwithstanding anything to the contrary in this Plan, Fortress shall not be a Releasing Party with respect to any Claims or Causes of
Action against any Fortress Non-Released Party.
189. “Reorganized
Debtors” means, collectively, a Debtor, or any successor or assign thereto, by merger, consolidation, or otherwise, on
and after the Plan Effective Date. For purposes of this Agreement, Reorganized QualTek shall be deemed to be a Reorganized Debtor.
190. “Reorganized
QualTek” means QualTek Services Inc. or any successor or assign thereto, by merger, consolidation, or otherwise, on and after
the Plan Effective Date. For the avoidance of doubt, following the consummation of the steps contemplated in the Restructuring Transactions
Memorandum, NewCo (as defined in the Restructuring Transactions Memorandum) shall be Reorganized QualTek.
191. “Required
Consenting ABL Lenders” has the meaning set forth in the Restructuring Support Agreement.
192. “Required
Consenting Convertible Noteholders” has the meaning set forth in the Restructuring Support Agreement.
193. “Required
Consenting Term Lenders” has the meaning set forth in the Restructuring Support Agreement.
194. “Restructuring
Expenses” means the reasonable and documented fees and expenses accrued since the inception
of their respective engagements related to the implementation of the Restructuring Transactions and not previously paid by, or on behalf
of, the Debtors of: (i) the Consenting ABL Lenders, which shall include the fees and expenses of (a) Blank Rome, as co-counsel,
(b) Bracewell, as co-counsel, and (c) FTI, as financial advisor; (ii) the Consenting Term Lenders, which shall include
the fees and expenses of (a) Paul, Weiss, as counsel, (b) Houlihan, as investment bank, and (c) Accordion, as financial
advisor; and (d) Porter Hedges, as local counsel; and (iii) Fortress, which shall include the fees and expenses of (a) Davis
Polk, as co-counsel, (b) Solomon, as financial advisor, and (c) Haynes and Boone, as co-counsel.
195. “Restructuring
Support Agreement” means that certain Restructuring Support Agreement, made and entered into as of May 24, 2023, including
all exhibits thereto, by and among the Debtors and the other parties thereto, as may be amended, modified, or supplemented from time to
time, in accordance with its terms.
196. “Restructuring
Term Sheet” has the meaning ascribed to it in the Restructuring Support Agreement.
197. “Restructuring
Transactions” means the transactions described in Article IV.B of the Plan.
198. “Restructuring
Transactions Memorandum” means that certain memorandum as may be amended, supplemented, or otherwise modified from time to time,
describing the steps to be carried out to effectuate the Restructuring Transactions, the form of which shall be included in the Plan Supplement
and remain subject to modification until the Plan Effective Date.
199. “Rollover
Term Loan Claims” means Claims on account of the Rollover Term Loans.
200. “Rollover
Term Loans” has the meaning ascribed to the term “Amendment No. 3 Rollover Loans” in the Term Loan Credit Agreement.
201. “Schedule
of Retained Causes of Action” means the schedule of certain Causes of Action of the Debtors that are not released, waived, or
transferred pursuant to the Plan, as the same may be amended, modified, or supplemented from time to time with the consent (such consent
not to be unreasonably withheld) of the Required Consenting Term Lenders, the Required Consenting Convertible Noteholders, and the Debtors.
202. “Section 510(b) Claim”
means Claims against any Debtor arising under section 510(b) of the Bankruptcy Code.
203. “Secured
Claim” means a Claim: (a) secured by a valid, perfected and enforceable Lien on collateral to the extent of the value of
such collateral, as determined in accordance with section 506(a) of the Bankruptcy Code or (b) subject to a valid right of setoff
pursuant to section 553 of the Bankruptcy Code.
204. “Secured
Tax Claim” means any Secured Claim that, absent its secured status, would be entitled to priority in right of payment under
section 507(a)(8) of the Bankruptcy Code (determined irrespective of time limitations), including any related Secured Claim for penalties.
205. “Securities
Act” means the Securities Act of 1933, as amended, 15 U.S.C. §§ 77a–77aa, or any similar federal,
state, or local law, as now in effect or hereafter amended, and the rules and regulations promulgated thereunder.
206. “Security”
means any security, as defined in section 2(a)(1) of the Securities Act.
207. “Significant
Holder” means a Person or entity that, directly or indirectly, by itself or together with one or more affiliated or commonly
controlled, managed, advised, or sub-advised, accounts, investment vehicles, or other entities, holds at least five percent (5.00 percent)
of the New Equity Interests.
208. “Solicitation
Materials” has the meanings set forth in the Disclosure Statement.
209. “Solomon”
means Solomon Partners Securities, LLC.
210. “Special
Committee” means collectively, the special committee of the board of directors of TopCo.
211. “Tax
Receivable Agreement” means that certain Tax Receivable Agreement, dated as of February 14, 2022, by and among TopCo and
QualTek Holdco, LLC, BCP QualTek, LLC, the TRA Holder Representative, and the TRA Holders (each as defined therein) from time to time
party thereto.
212. “Term
Loan Agent” means Citibank, N.A., along with any predecessor or successor thereto, as administrative agent and collateral agent
under the Term Loan Credit Agreement.
213. “Term
Loan Claims” means Claims on account of the Term Loan Facilities.
214. “Term
Loan Credit Agreement” means that certain Term Credit and Guaranty Agreement, dated as of July 18, 2018, by and among the
Prepetition Borrower, the Prepetition Guarantors, the Term Loan Agent, and the Term Loan Lenders, as amended, modified, or supplemented
from time to time.
215. “Term
Loan DIP Agent” means UMB Bank, N.A., it is capacity as administrative agent under the Term Loan DIP Credit Agreement.
216. “Term
Loan DIP Claims” means Claims on account of the Term Loan DIP Facility.
217. “Term
Loan DIP Credit Agreement” means a debtor-in-possession credit agreement to be executed by and among certain of the Debtors,
the Term Loan DIP Agent, and the Consenting Term Lenders that are lenders party thereto, consistent with the terms and conditions of the
Restructuring Support Agreement and as approved by the DIP Orders.
218. “Term
Loan DIP Documents” means the Term Loan DIP Credit Agreement and any other documentation necessary or appropriate to effectuate
the incurrence of the Term Loan DIP Facility.
219. “Term
Loan DIP Exit Fee” means Cash in an amount equal to 2.00 percent of the principal amount of all Term Loan DIP New Money
Loans, to be paid to the Term Loan DIP Lenders on a pro rata basis on the Plan Effective Date.
220. “Term
Loan DIP Facility” means the new, superpriority, senior secured delayed draw term loan debtor-in-possession financing facility
to be issued by the Reorganized Debtors in accordance with the Term Loan DIP Documents comprising up to $40 million in principal
amount of Term Loan DIP New Money Loans plus up to approximately $66.9 million in principal amount of Priority Term Loans rolled
into the Term Loan DIP Facility pursuant to the DIP Orders.
221. “Term
Loan DIP Lenders” means the lenders under the Term Loan DIP Facility.
222. “Term
Loan DIP Loans” means the Term Loan DIP New Money Loans and the Term Loan Roll-Up DIP Loans.
223. “Term
Loan DIP New Money Loans” means the new money term loans to be provided under the Term Loan DIP Facility.
224. “Term
Loan Facilities” means the term loan facilities arising under the Term Loan Credit Agreement.
225. “Term
Loan Lenders” means the lenders from time to time party to the Term Loan Credit Agreement.
226. “Term
Loan Roll-Up DIP Loans” means the Priority Term Loans, including all principal amounts outstanding, interest, fees, expenses
costs, and other charges, that, pursuant to the Interim DIP Order or Final DIP Order, as applicable, and in accordance with the terms
and conditions of the Term Loan DIP Documents, are rolled up and deemed to be issued under the Term Loan DIP Facility.
227. “Third-Party
Release” means the release set forth in Article VIII.D of this Plan.
228. “TopCo”
means QualTek Services Inc.
229. “TRA
Claim” means Claims arising on account of the Tax Receivable Agreement, including any Claims arising on account of the rejection
or termination of the Tax Receivable Agreement or acceleration of obligations under the Tax Receivable Agreement.
230. “Tranche
B Term Loan Claims” means Claims arising on account of Tranche B Term Loans.
231. “Tranche
B Term Loans” has the meaning set forth in the Term Loan Credit Agreement.
232. “U.S.
Trustee” means the Office of the United States Trustee for the Southern District of Texas.
233. “Unexpired
Leases” means leases to which one or more of the Debtors are a party that is subject to assumption or rejection under section
365 of the Bankruptcy Code.
234. “Unimpaired”
means, with respect to a Class of Claims or Interests, a Class of Claims or Interests that is unimpaired within the meaning
of section 1124 of the Bankruptcy Code.
235. “Warrant
Agreement” means that certain warrant agreement, form of warrant, and any related ancillary documents, to be effective on the
Plan Effective Date, governing the Warrants to be issued by the Reorganized Debtors, the form of which shall be included in the Plan Supplement.
The Warrant Agreement shall provide that the Warrants shall have customary anti-dilution protections (including, without limitation, against
equity splits, equity dividends, combinations, and similar events) and shall otherwise be in form and substance consistent with the terms
and conditions hereof and of the Restructuring Support Agreement.
236. “Warrants”
means warrants to purchase 7.5 percent of the New Equity Interests, exercisable at any time prior to the date that is five (5) years
after the Plan Effective Date, with an aggregate equity strike price equal to an implied share price calculated using an enterprise value
of $550,000,000 as of the Plan Effective Date, in accordance with the terms and conditions hereof and of the Restructuring Support Agreement
(and having such additional terms as are set forth in the section of the Restructuring Term Sheet titled “New Warrants”).
| B. | Rules of Interpretation. |
For purposes of this Plan:
(1) in the appropriate context, each term, whether stated in the singular or the plural, shall include both the singular and the
plural, and pronouns stated in the masculine, feminine, or neuter gender shall include the masculine, feminine, and the neuter gender;
(2) unless otherwise specified, any reference herein to a contract, lease, instrument, release, indenture, or other agreement or
document being in a particular form or on particular terms and conditions means that the referenced document shall be substantially in
that form or substantially on those terms and conditions; provided that nothing in this clause (2) shall affect any parties’
consent rights over any of the Definitive Documents (as defined in the Restructuring Support Agreement) or any amendments thereto; (3) unless
otherwise specified, any reference herein to an existing document, schedule, or exhibit, whether or not Filed, having been Filed, or to
be Filed shall mean that document, schedule, or exhibit, as it may thereafter be amended, modified, or supplemented in accordance with
the Plan or Confirmation Order, as applicable; (4) any reference to an Entity as a Holder of a Claim or Interest includes that Entity’s
successors and assigns; (5) unless otherwise specified, all references herein to “Articles” are references to Articles
hereof or hereto; (6) unless otherwise specified, all references herein to exhibits are references to exhibits in the Plan Supplement;
(7) unless otherwise specified, the words “herein,” “hereof,” and “hereto” refer to the Plan
in its entirety rather than to a particular portion of the Plan; (8) subject to the provisions of any contract, certificate of incorporation,
bylaw, instrument, release, or other agreement or document created or entered into in connection with the Plan, the rights and obligations
arising pursuant to the Plan shall be governed by, and construed and enforced in accordance with applicable federal law, including the
Bankruptcy Code and Bankruptcy Rules; (9) unless otherwise specified, the words “include,” “including,” and
variations thereof shall not be deemed to be terms of limitation and shall be deemed to be followed by the words “without limitation”;
(10) captions and headings to Articles are inserted for convenience of reference only and are not intended to be a part of or to
affect the interpretation of the Plan; (11) unless otherwise specified herein, the rules of construction set forth in section
102 of the Bankruptcy Code shall apply; (12) any term used in capitalized form herein that is not otherwise defined but that is used
in the Bankruptcy Code or the Bankruptcy Rules shall have the meaning assigned to that term in the Bankruptcy Code or the Bankruptcy
Rules, as the case may be; (13) all references to docket numbers of documents Filed in the Chapter 11 Cases are references to the
docket numbers under the Court’s CM/ECF system; (14) all references to statutes, regulations, orders, rules of courts,
and the like shall mean as amended from time to time, and as applicable to the Chapter 11 Cases, unless otherwise stated; (15) any
immaterial effectuating provisions may be interpreted by the Reorganized Debtors in such a manner that is consistent with the overall
purpose and intent of the Plan all without further notice to or action, order, or approval of the Court or any other Entity; and (16)
unless otherwise specified, any action to be taken on the Plan Effective Date may be taken on or as soon as reasonably practicable thereafter.
Unless otherwise specifically
stated herein, the provisions of Bankruptcy Rule 9006(a) shall apply in computing any period of time prescribed or allowed herein.
If the date on which a transaction may occur pursuant to the Plan shall occur on a day that is not a Business Day, then such transaction
shall instead occur on the next succeeding Business Day.
Unless a rule of law
or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules) or unless otherwise specifically stated,
the laws of the State of New York, without giving effect to the principles of conflict of laws (other than section 5-1401 and section
5-1402 of the New York General Obligations Law), shall govern the rights, obligations, construction, and implementation of the Plan, any
agreements, documents, instruments, or contracts executed or entered into in connection with the Plan (except as otherwise set forth in
those agreements, in which case the governing law of such agreement shall control), and corporate governance matters; provided
that corporate governance matters relating to the Debtors or the Reorganized Debtors, as applicable, not incorporated in New York shall
be governed by the laws of the state of incorporation or formation of the relevant Debtor or the Reorganized Debtors, as applicable.
| E. | Reference to Monetary Figures. |
All references in the Plan
to monetary figures shall refer to currency of the United States of America, unless otherwise expressly provided herein.
| F. | Reference to the Debtors or the Reorganized Debtors. |
Except as otherwise specifically
provided in this Plan to the contrary, references in this Plan to the Debtors or the Reorganized Debtors shall mean the Debtors and the
Reorganized Debtors, as applicable, to the extent the context requires.
In the event of an inconsistency
between the Plan and the Disclosure Statement, the terms of the Plan shall control in all respects. In the event of an inconsistency between
the Plan and the Plan Supplement, the terms of the relevant provision in the Plan Supplement shall control (unless stated otherwise in
such Plan Supplement document or in the Confirmation Order). In the event of an inconsistency between the Confirmation Order and the Plan,
the Confirmation Order shall control.
| H. | Consultation, Information, Notice, and Consent Rights. |
Notwithstanding
anything herein to the contrary, any and all consultation, information, notice, and consent rights of the parties to the Restructuring
Support Agreement set forth in the Restructuring Support Agreement with respect to the form and substance of this Plan, all exhibits to
the Plan, the Confirmation Order, and the Plan Supplement, including any amendments, restatements, supplements, or other modifications
to such agreements and documents, and any consents, waivers, or other deviations under or from any such documents, and all other Definitive
Documents (as defined in the Restructuring Support Agreement) shall be incorporated herein by this reference (including to the applicable
definitions in Article I.A hereof) and be fully enforceable as if stated in full herein.
Failure to reference the rights
referred to in the immediately preceding paragraph as such rights relate to any document referenced in the Restructuring Support Agreement
shall not impair such rights and obligations.
Article II.
ADMINISTRATIVE CLAIMS, PRIORITY CLAIMS, and RESTRUCTURING EXPENSES
In accordance with section
1123(a)(1) of the Bankruptcy Code, Administrative Claims, Professional Fee Claims, ABL DIP Claims, Term Loan DIP Claims, and
Priority Tax Claims have not been classified and, thus, are excluded from the Classes of Claims and Interests set forth in Article III
hereof.
Unless otherwise agreed to
by the Holder of an Allowed Administrative Claim and the Debtors or the Reorganized Debtors, as applicable, each Holder of an Allowed
Administrative Claim (other than Holders of Professional Fee Claims and Claims for fees and expenses pursuant to section 1930 of chapter
123 of title 28 of the United States Code) will receive in full and final satisfaction of its Administrative Claim an amount of Cash equal
to the amount of such Allowed Administrative Claim in accordance with the following: (1) if an Administrative Claim is Allowed on
or prior to the Plan Effective Date, on the Plan Effective Date or as soon as reasonably practicable thereafter (or, if not then due,
when such Allowed Administrative Claim is due or as soon as reasonably practicable thereafter); (2) if such Administrative Claim
is not Allowed as of the Plan Effective Date, no later than thirty (30) days after the date on which an order allowing such Administrative
Claim becomes a Final Order, or as soon as reasonably practicable thereafter; (3) if such Allowed Administrative Claim is based on
liabilities incurred by the Debtors in the ordinary course of their business after the Petition Date, in accordance with the terms and
conditions of the particular transaction giving rise to such Allowed Administrative Claim without any further action by the Holders of
such Allowed Administrative Claim; (4) at such time and upon such terms as may be agreed upon by such Holder and the Debtors or the
Reorganized Debtors, as applicable; or (5) at such time and upon such terms as set forth in an order of the Court.
On the Plan Effective Date,
the ABL DIP Facility shall be refinanced by the ABL Exit Facility to the extent availability exists under the ABL Exit Facility with any
shortfall to be satisfied by a payment in Cash, and, in full and final satisfaction of the Allowed ABL DIP Claims, the ABL DIP Loans giving
rise to such Claims shall, to the extent availability exists under the ABL Exit Facility, be refinanced by means of a cashless settlement,
in each case in accordance with the terms of the ABL DIP Documents and the ABL Exit Facility Documents. Subject to the ABL DIP Documents,
(i) the full principal amount of the ABL DIP Loan shall be on a one-to-one basis automatically converted to and deemed to be
an ABL Exit Facility Loan to the extent availability exists under the ABL Exit Facility with any shortfall to be satisfied by a payment
in Cash, (ii) the letters of credit issued and outstanding under the ABL DIP Credit Agreement shall be converted to letters
of credit deemed to be issued and outstanding under the ABL Exit Facility Documents, (iii) all indemnification and expense reimbursement
obligations of the Debtors that are contingent as of the Plan Effective Date, whether or not cash collateralized in accordance with the
ABL DIP Documents, shall survive the Plan Effective Date pursuant to the ABL DIP Credit Agreement and the DIP Orders and shall be deemed
contingent obligations under the ABL Exit Facility on the same terms that existed with respect to such obligations prior to the Plan Effective
Date, and (iv) all collateral that secures the Obligations (each as defined in the ABL DIP Credit Agreement) under the ABL DIP Credit
Agreement shall be reaffirmed, ratified, and shall automatically secure all Obligations (as defined in the ABL Exit Facility Documents)
under the ABL Exit Facility Documents, subject to the priorities of liens set forth in the Exit Facility Documents. The refinancing of
the obligations under the ABL DIP Credit Agreement as provided in this paragraph shall also be subject to a payment statement in form
and substance acceptable to ABL DIP Agent and the Debtors.
On
the Plan Effective Date, except to the extent that a Holder of an Allowed Term Loan DIP Claim agrees to less favorable treatment, and
in each case in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such Allowed Term Loan DIP Claim
(i) the Term Loan DIP Loan giving rise to such Claim shall be refinanced by means of a cashless settlement whereby such Term
Loan DIP Loan shall be converted on a dollar-for-dollar basis into a 1L Exit Facility Loan in accordance with the Term Loan DIP Documents
and the 1L Exit Facility Documents; (ii) all indemnification and expense reimbursement obligations of the Debtors that are contingent
as of the Plan Effective Date, whether or not cash collateralized in accordance with the Term Loan DIP Documents, shall survive the Plan
Effective Date pursuant to the Term Loan DIP Credit Agreement and the DIP Orders and shall be deemed contingent obligations under the
1L Exit Facility on the same terms that existed with respect to such obligations prior to the Plan Effective Date; (iii) all collateral
that secures the Obligations (each as defined in the Term Loan DIP Credit Agreement) under the Term Loan DIP Credit Agreement shall be
reaffirmed, ratified, and shall automatically secure all Obligations (as defined in the 1L Exit Facility Documents) under the 1L Exit
Facility Documents, subject to the priorities of liens set forth in the Exit Facility Documents; (iv) the Backstop Fee will be paid
in kind on a dollar-for-dollar basis through the distribution of 1L Exit Facility Loans to the Backstop Parties in accordance with the
terms of the DIP-to-Exit Commitment Letter; (v) the DIP-to-Exit Commitment Premium will be paid through the distribution of 50 percent
of the New Equity Interests, subject to dilution by the Warrants and the MIP, to the Term Loan DIP Lenders (or their designees) on a pro
rata basis in accordance with the terms of the Term Loan DIP Documents; (vi) the Term Loan DIP Exit Fee will be paid in Cash
to the Term Loan DIP Lenders on a pro rata basis in accordance with the terms of the Term Loan DIP Documents; and (vii) any
exercise of the Conversion Rights shall be given effect in accordance with the terms of the Term Loan DIP Documents and this Plan.
Approximately $107.4 million
in principal amount of Allowed Term Loan DIP Claims, plus accrued and unpaid interest on such principal amounts and other amounts due
and owing pursuant to the Term Loan DIP Credit Agreement through and including the Plan Effective Date, is estimated to be outstanding
as of the Plan Effective Date.
| D. | Professional Fee Claims. |
1. Final
Fee Applications and Payment of Professional Fee Claims.
All requests for payment of
Professional Fee Claims for services rendered and reimbursement of expenses incurred prior to the Confirmation Date must be Filed no later
than forty-five (45) days after the Plan Effective Date. The Court shall determine the Allowed amounts of such Professional Fee Claims
after notice and a hearing in accordance with the procedures established by the Court. The Reorganized Debtors shall pay Professional
Fee Claims in Cash in the amount the Court allows, including from the Professional Fee Escrow Account, which the Reorganized Debtors will
establish in trust for the Professionals and fund with Cash equal to the Professional Fee Amount on the Plan Effective Date.
2. Professional
Fee Escrow Account.
On the Plan Effective Date,
the Reorganized Debtors shall establish and fund the Professional Fee Escrow Account with Cash equal to the Professional Fee Amount. The
Professional Fee Escrow Account shall be maintained in trust solely for the Professionals. Such funds shall not be considered property
of the Estates of the Debtors or the Reorganized Debtors. The amount of Professional Fee Claims owing to the Professionals shall be paid
in Cash to such Professionals by the Reorganized Debtors from the Professional Fee Escrow Account as soon as reasonably practicable after
such Professional Fee Claims are Allowed. When all such Allowed amounts owing to Professionals have been paid in full, any remaining amount
in the Professional Fee Escrow Account shall promptly be paid to the Reorganized Debtors without any further action or order of the Court.
3. Professional
Fee Amount.
Professionals shall reasonably
estimate their unpaid Professional Fee Claims and other unpaid fees and expenses incurred in rendering services to the Debtors before
and as of the Plan Effective Date, and shall deliver such estimate to the Debtors no later than two (2) Business Days before the
Plan Effective Date; provided, however, that such estimate shall not be deemed to limit the amount of the fees and expenses
that are the subject of the Professional’s final request for payment of Filed Professional Fee Claims. If a Professional does not
provide an estimate, the Debtors or Reorganized Debtors may estimate the unpaid and unbilled fees and expenses of such Professional.
4. Post-Confirmation
Fees and Expenses.
Except as otherwise specifically
provided in the Plan, from and after the Confirmation Date, the Debtors shall, in the ordinary course of business and without any further
notice to or action, order, or approval of the Court, pay in Cash the reasonable and documented legal, professional, or other fees and
expenses related to implementation of the Plan and Consummation incurred by the Debtors. Upon the Confirmation Date, any requirement that
Professionals comply with sections 327 through 331, 363, and 1103 of the Bankruptcy Code in seeking retention or compensation for services
rendered after such date shall terminate, and the Debtors may employ and pay any Professional in the ordinary course of business without
any further notice to or action, order, or approval of the Court.
Except to the extent that
a Holder of an Allowed Priority Tax Claim agrees to a less favorable treatment, in full and final satisfaction, settlement, release, and
discharge of and in exchange for each Allowed Priority Tax Claim, each Holder of such Allowed Priority Tax Claim shall be treated in accordance
with the terms set forth in section 1129(a)(9)(C) of the Bankruptcy Code.
| F. | Payment of Restructuring Expenses. |
The
Restructuring Expenses incurred, or estimated to be incurred, up to and including the Plan Effective Date, shall be paid in full in Cash
on the Plan Effective Date or as reasonably practicable thereafter (to the extent not previously paid during the course of the Chapter
11 Cases) in accordance with, and subject to, the terms of the Restructuring Support Agreement, without any requirement to file
a fee application with the Court, without the need for itemized time detail, or without any requirement for Court review or approval.
The Convertible Notes Trustee
Fees and Expenses incurred, or estimated to be incurred, up to and including the Plan Effective Date, shall be paid in full in Cash on
the Plan Effective Date or as reasonably practicable thereafter (to the extent not previously paid during the course of the Chapter 11
Cases) in accordance with, and subject to, the terms of the Restructuring Support Agreement and this Plan, without any requirement for
the Convertible Notes Trustee to file any Proof of Claim, request for payment of Administrative Claim, fee application, or any other pleading
or document in these Chapter 11 Cases, without the need for itemized time detail, without reduction to recoveries to Holders of Convertible
Notes Claims, and without any requirement for Court review or approval.
If
the Debtors dispute any requested Convertible Notes Trustee Fees and Expenses, the Debtors shall (i) pay the undisputed portion of
the Convertible Notes Trustee Fees and Expenses and (ii) notify the Convertible Notes Trustee of such dispute within two (2) Business
Days after presentment of summary invoices by the Convertible Notes Trustee. Upon such notification, the Convertible Notes Trustee may
assert its Convertible Notes Trustee Charging Lien to pay the disputed portion of its Convertible Notes Trustee Fees and Expenses or submit
such dispute for resolution by the Court; provided, however, that the Court’s review shall be limited to a
determination under the reasonableness standard in accordance with the Convertible Notes Indenture. Nothing herein shall in any way affect
or diminish the right of the Convertible Notes Trustee to exercise its Convertible Notes Trustee Charging Lien against distributions on
account of the Convertible Notes Claims with respect to any unpaid Convertible Notes Trustee Fees and Expenses.
All
(i) Restructuring Expenses and (ii) Convertible Notes Trustee Fees and Expenses to be paid on the Plan Effective Date shall
be estimated prior to and as of the Plan Effective Date, and such estimates shall be delivered to the Debtors at least two (2) Business
Days before the anticipated Plan Effective Date; provided, however, that such estimates shall not be considered an
admission or limitation with respect to such Restructuring Expenses or Convertible Notes Trustee Fees and Expenses. On or as soon as reasonably
practicable after the Plan Effective Date, final invoices for all Restructuring Expenses and the fees and expenses of the Convertible
Notes Trustee incurred prior to and as of the Plan Effective Date shall be submitted to the Debtors. In addition, the Debtors and the
Reorganized Debtors (as applicable) shall continue to pay, when due, pre-Plan Effective Date Restructuring Expenses. Any Restructuring
Expenses that constitute obligations of the Debtors pursuant to the Term Loan DIP Credit Agreement or ABL DIP Credit Agreement shall be
entitled to all rights and protections afforded to any other obligations arising under the Term Loan DIP Credit Agreement or ABL
DIP Credit Agreement, as applicable.
Article III.
CLASSIFICATION AND TREATMENt oF CLAIMS AND INTERESTS
| A. | Classification of Claims and Interests. |
This Plan constitutes a separate
Plan proposed by each Debtor. Except for the Claims addressed in Article II of the Plan, all Claims and Interests are classified
in the Classes set forth below in accordance with section 1122 and 1123(a)(1) of the Bankruptcy Code. A Claim or an Interest, or
any portion thereof, is classified in a particular Class only to the extent that any portion of such Claim or Interest qualifies
within the description of that Class and is classified in other Classes to the extent that any portion of such Claim or Interest
qualifies within the description of such other Classes. A Claim or an Interest also is classified in a particular Class for the purpose
of receiving distributions under the Plan only to the extent that such Claim or Interest is an Allowed Claim or Interest in that Class and
has not been paid, released, or otherwise satisfied prior to the Plan Effective Date.
The classification of Claims
against and Interests in the Debtors pursuant to the Plan is as follows:
Class |
Claims and Interests |
Status |
Voting Rights |
Class 1 |
Other Secured Claims |
Unimpaired |
Not Entitled to Vote (Deemed to Accept) |
Class 2 |
Other Priority Claims |
Unimpaired |
Not Entitled to Vote (Deemed to Accept) |
Class 3A |
Priority Term Loan Claims |
Impaired |
Entitled to Vote |
Class 3B |
Rollover Term Loan Claims |
Impaired |
Entitled to Vote |
Class 3C |
Tranche B Term Loan Claims |
Impaired |
Entitled to Vote |
Class 4 |
Convertible Notes Claims |
Impaired |
Entitled to Vote |
Class 5 |
General Unsecured Claims |
Unimpaired |
Not Entitled to Vote (Deemed to Accept) |
Class 6 |
TRA Claims |
Impaired |
Not Entitled to Vote (Deemed to Reject) |
Class 7 |
Section 510(b) Claims |
Impaired |
Not Entitled to Vote (Deemed to Reject) |
Class 8 |
Intercompany Claims |
Unimpaired / Impaired |
Not Entitled to Vote (Deemed to Accept) /
Not Entitled to Vote (Deemed to Reject) |
Class 9 |
Intercompany Interests |
Unimpaired / Impaired |
Not Entitled to Vote (Deemed to Accept) /
Not Entitled to Vote (Deemed to Reject) |
Class 10 |
Equity Interests |
Impaired |
Not Entitled to Vote (Deemed to Reject) |
| B. | Treatment of Claims and Interests. |
Each Holder of an Allowed
Claim or Allowed Interest, as applicable, shall receive under the Plan the treatment described below in full and final satisfaction, settlement,
release, and discharge of and in exchange for such Holder’s Allowed Claim or Allowed Interest, except to the extent different treatment
is agreed to by the Reorganized Debtors and the Holder of such Allowed Claim or Allowed Interest, as applicable. Unless otherwise indicated,
the Holder of an Allowed Claim or Allowed Interest, as applicable, shall receive such treatment on the Plan Effective Date or as soon
as reasonably practicable thereafter.
1. Class 1
– Other Secured Claims.
| (a) | Classification: Class 1 consists of all Other Secured Claims against any Debtor. |
| (b) | Treatment: Each Holder of an Allowed Other Secured Claim shall receive, at the option of the applicable
Debtor (subject to the reasonable consent of the Required Consenting Term Lenders), and subject to any applicable intercreditor agreement: |
| (i) | payment in full in Cash of its Allowed Other Secured Claim; |
| (ii) | the collateral securing its Allowed Other Secured Claim; |
| (iii) | Reinstatement of its Allowed Other Secured Claim pursuant to section 1124 of the Bankruptcy Code; or |
| (iv) | such other recovery rendering its Allowed Other Secured Claim Unimpaired. |
| (c) | Voting: Class 1 is Unimpaired under the Plan. Holders of Allowed Other Secured Claims in Class 1
are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, such Holders are
not entitled to vote to accept or reject the Plan. |
2. Class 2
– Other Priority Claims.
| (a) | Classification: Class 2 consists of all Other Priority Claims against any Debtor. |
| (b) | Treatment: Each Holder of an Allowed Other Priority Claim shall receive, at the option of the applicable
Debtor: |
| (i) | Cash in an amount equal to such Allowed Other Priority Claim; or |
| (ii) | such other treatment as agreed to by such Holder of an Other Priority Claim and the Debtors. |
| (c) | Voting: Class 2 is Unimpaired under the Plan. Holders of Allowed Other Priority Claims in
Class 2 are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, such
Holders are not entitled to vote to accept or reject the Plan. |
3. Class 3A
– Priority Term Loan Claims.
| (a) | Classification: Class 3A consists of all Priority Term Loan Claims, if any. |
| (b) | Allowance: On the Plan Effective Date, the Priority Term Loan Claims shall be Allowed in the aggregate
principal amount of $65,000,000, plus accrued and unpaid interest on such principal amount through the Plan Effective Date and any other
amounts due and owing pursuant to the Term Loan Credit Agreement through and including the Plan Effective Date, less the amount rolled
up pursuant to the Term Loan Roll-Up DIP Loans. |
| (c) | Treatment: On the Plan Effective Date, the Priority Term Loan giving rise to each Allowed Priority
Term Loan Claim, if any, shall be converted on a dollar-for-dollar basis into a 1L Exit Facility Loan. |
| (d) | Voting: Class 3A is Impaired under the Plan; Holders of Allowed Priority Term Loan Claims
in Class 3A are entitled to vote to accept or reject the Plan. |
4. Class 3B
– Rollover Term Loan Claims.
| (a) | Classification: Class 3B consists of all Rollover Term Loan Claims. |
| (b) | Allowance: On the Plan Effective Date, the Rollover Term Loan Claims shall be Allowed in the aggregate
principal amount of $100,705,248.99, plus accrued and unpaid interest on such principal amount through the Plan Effective Date and any
other amounts due and owing pursuant to the Term Loan Credit Agreement through and including the Plan Effective Date. |
| (c) | Treatment: On the Plan Effective Date, each Holder of an Allowed Rollover Term Loan Claim shall
receive, in full and final satisfaction of such Claim, its pro rata share of the 3L Exit Facility Loans. |
| (d) | Voting: Class 3B is Impaired under the Plan; Holders of Allowed Rollover Term Loan Claims
in Class 3B are entitled to vote to accept or reject the Plan. |
5. Class 3C
– Tranche B Term Loan Claims.
| (a) | Classification: Class 3C consists of all Tranche B Term Loan Claims. |
| (b) | Allowance: On the Plan Effective Date, the Tranche B Term Loan Claims shall be Allowed in the aggregate
principal amount of $240,175,291.26, plus accrued and unpaid interest on such principal amount through the Plan Effective Date and any
other amounts due and owing pursuant to the Term Loan Credit Agreement through and including the Plan Effective Date. |
| (c) | Treatment: On the Plan Effective Date, each Holder of Allowed Tranche B Term Loan Claims shall
receive, in full and final satisfaction of such Claims, its pro rata share of 40 percent of the New Equity Interests, subject
to dilution by the Warrants and the MIP. |
| (d) | Voting: Class 3C is Impaired under the Plan; Holders of Allowed Tranche B Term Loan Claims
in Class 3C are entitled to vote to accept or reject the Plan. |
6. Class 4
– Convertible Notes Claims.
| (a) | Classification: Class 4 consists of all Convertible Notes Claims. |
| (b) | Allowance: On the Plan Effective Date, the Convertible Notes Claims shall be Allowed in the aggregate
principal amount of not less than approximately $124,685,000, plus accrued and unpaid interest on such principal amount through the Petition
Date and any other amounts (for the avoidance of doubt, other than Convertible Notes Trustee Fees and Expenses) due and owing pursuant
to the Convertible Notes Indenture through and including the Plan Effective Date. |
| (c) | Treatment: On the Plan Effective Date, each Holder of a Convertible Notes Claim shall receive,
in full and final satisfaction of such Claims, (i) its pro rata share of 10 percent of New Equity Interests, subject
to dilution by the Warrants and the MIP, and (ii) its pro rata share of the Warrants. |
| (d) | Voting: Class 4 is Impaired under the Plan; Holders of Convertible Notes Claims in Class 4
are entitled to vote to accept or reject the Plan. |
7. Class 5
– General Unsecured Claims.
| (a) | Classification: Class 5 consists of all Allowed General Unsecured Claims. |
| (b) | Treatment: Each Holder of an Allowed General Unsecured Claim shall receive either: |
| (i) | Reinstatement of such Allowed General Unsecured Claim pursuant to section 1124 of the Bankruptcy
Code; or |
| (ii) | payment in full in Cash on (a) the Plan Effective Date, or (b) the date due in the ordinary
course of business in accordance with the terms and conditions of the particular transaction giving rise to such Allowed General Unsecured
Claim. |
| (c) | Voting: Class 5 is Unimpaired under the Plan. Holders of Allowed General Unsecured Claims
in Class 5 are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore,
such Holders are not entitled to vote to accept or reject the Plan. |
8. Class 6
– TRA Claims.
| (a) | Classification: Class 6 consists of all Allowed TRA Claims. |
| (b) | Treatment: Allowed TRA Claims shall be cancelled without any distribution, and such Holders of
TRA Claims will receive no recovery. |
| (c) | Voting: Class 6 is Impaired under the Plan. Holders of TRA Claims in Class 6 are conclusively
deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, such Holders are not entitled to
vote to accept or reject the Plan. |
9. Class 7
– 510(b) Claims.
| (a) | Classification: Class 7 consists of all Allowed 510(b) Claims, if any. |
| (b) | Treatment: Allowed 510(b) Claims, if any, shall be cancelled and released without any distribution
on account of such 510(b) Claims. |
| (c) | Voting: Class 7 is Impaired under the Plan. Holders of Allowed 510(b) Claims in Class 7
are conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, such Holders are
not entitled to vote to accept or reject the Plan. |
10. Class 8
– Intercompany Claims.
| (a) | Classification: Class 8 consists of all Intercompany Claims. |
| (b) | Treatment: Allowed Intercompany Claims shall be, at the option of the applicable Debtor, with the
reasonable consent of the Required Consenting Term Lenders and, to the extent any such Intercompany Claim constitutes ABL Priority Collateral
(as defined in the Intercreditor Agreement(as defined in the DIP Orders)), Required Consenting ABL Lenders, either: |
| (ii) | converted to equity; or |
| (iii) | otherwise set off, settled, distributed, contributed, cancelled, or released, in each case, in accordance
with the Restructuring Transactions Memorandum. |
| (c) | Voting: Class 8 is Unimpaired if the Allowed Intercompany Claims in Class 8 are Reinstated
or Impaired if the Allowed Intercompany Claims in Class 8 are converted to equity or otherwise set off, settled, distributed, contributed,
cancelled or released. Holders of Intercompany Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) or
rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, Holders of Intercompany Claims are not entitled
to vote to accept or reject the Plan. |
11. Class 9
– Intercompany Interests.
| (a) | Classification: Class 9 consists of all Intercompany Interests. |
| (b) | Treatment: Intercompany Interests shall be, at the option of the applicable Debtor, with the consent
of the Required Consenting Term Lenders either: |
| (ii) | set off, settled, addressed, distributed, contributed, merged, cancelled, or released, in each case, in
accordance with the Restructuring Transactions Memorandum. |
| (c) | Voting: Class 9 is Unimpaired if the Intercompany Interests in Class 9 are Reinstated
or Impaired if the Intercompany Interests in Class 9 are cancelled. Holders of Intercompany Interests are conclusively deemed to
have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code or rejected the Plan pursuant to section 1126(g) of
the Bankruptcy Code. Therefore, Holders of Intercompany Interests are not entitled to vote to accept or reject the Plan. |
12. Class 10
– Equity Interests.
| (a) | Classification: Class 10 consists of all Equity Interests in QualTek Services Inc. and QualTek
HoldCo, LLC (other than Intercompany Interests, if any). |
| (b) | Treatment: All Equity Interests will be cancelled, released, and extinguished and will be of no
further force or effect, and Holders of Equity Interests will not receive any distribution on account of such Equity Interests. |
| (c) | Voting: Class 10 is Impaired under the Plan. Holders of Equity Interests in Class 10
are conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, such Holders are
not entitled to vote to accept or reject the Plan. |
| C. | Special Provision Governing Unimpaired Claims. |
Except as otherwise provided
in the Plan, nothing under the Plan shall affect the Debtors’ or the Reorganized Debtors’ rights regarding any Unimpaired
Claims, including all rights regarding legal and equitable defenses to, or setoffs or recoupments against, any such Unimpaired Claims.
| D. | Elimination of Vacant Classes. |
Any Class of Claims or
Interests that does not have a Holder of an Allowed Claim or Allowed Interest or a Claim or Interest temporarily Allowed by the Court
as of the date of the Confirmation Hearing shall be deemed eliminated from the Plan for purposes of voting to accept or reject the Plan
and for purposes of determining acceptance or rejection of the Plan by such Class pursuant to section 1129(a)(8) of the Bankruptcy
Code.
| E. | Voting Classes, Presumed Acceptance by Non-Voting Classes. |
If a Class contains Claims
or Interests eligible to vote and no Holders of Claims or Interests eligible to vote in such Class vote to accept or reject the Plan,
the Holders of such Claims or Interests in such Class shall be deemed to have accepted the Plan.
| F. | Intercompany Interests. |
To the extent Reinstated under
the Plan, distributions on account of Intercompany Interests are not being received by Holders of such Intercompany Interests on account
of their Intercompany Interests but for the purposes of administrative convenience, for the ultimate benefit of the Holders of New Equity
Interests, and in exchange for the Debtors’ and Reorganized Debtors’ agreement under the Plan to make certain distributions
to the Holders of Allowed Claims.
| G. | Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy Code. |
Section 1129(a)(10) of
the Bankruptcy Code shall be satisfied for purposes of Confirmation by acceptance of the Plan by one or more of the Classes entitled to
vote pursuant to Article III.B of the Plan. The Debtors shall seek Confirmation of the Plan pursuant to section 1129(b) of
the Bankruptcy Code with respect to any rejecting Class of Claims or Interests. The Debtors reserve the right, subject to the consent
and authorization rights set forth in the Restructuring Support Agreement, to modify the Plan in accordance with Article X of the
Plan to the extent, if any, that Confirmation pursuant to section 1129(b) of the Bankruptcy Code requires modification, including
by modifying the treatment applicable to a Class of Claims or Interests to render such Class of Claims or Interests Unimpaired
to the extent permitted by the Bankruptcy Code and the Bankruptcy Rules.
| H. | Controversy Concerning Impairment. |
If a controversy arises as
to whether any Claims or Interests, or any Class of Claims or Interests, are Impaired, the Court shall, after notice and a hearing,
determine such controversy on or before the Confirmation Date.
The allowance, classification,
and treatment of all Allowed Claims and Allowed Interests and the respective distributions and treatments under the Plan take into account
and conform to the relative priority and rights of the Claims and Interests in each Class in connection with any contractual, legal,
and equitable subordination rights relating thereto, whether arising under general principles of equitable subordination, section 510(b) of
the Bankruptcy Code, or otherwise. Pursuant to section 510 of the Bankruptcy Code, and subject to the Restructuring Support Agreement,
the Reorganized Debtors reserve the right to re-classify any Allowed Claim or Allowed Interest in accordance with any contractual, legal,
or equitable subordination relating thereto.
Article IV.
MEANS FOR IMPLEMENTATION OF THE PLAN
| A. | General Settlement of Claims and Interests. |
As discussed in detail in
the Disclosure Statement and as otherwise provided herein, pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019,
and in consideration for the classification, distributions, releases, and other benefits provided under the Plan, upon the Plan Effective
Date, the provisions of the Plan shall constitute a good faith compromise and settlement of all Claims and Interests and controversies
resolved pursuant to the Plan, including (1) any challenge to the amount, validity, perfection (as applicable), enforceability, priority,
or extent of the ABL Claims, the ABL DIP Claims, the Term Loan DIP Claims, the Other Secured Claims, the Other Priority Claims, the Priority
Term Loan Claims, the Rollover Term Loan Claims, the Tranche B Term Loan Claims, the Convertible Notes Claims, the General Unsecured Claims,
the TRA Claims, the Section 510(b) Claims, the Intercompany Claims, the Intercompany Interests, or the Equity Interests and
(2) any claim to avoid, subordinate, or disallow any ABL Claims, ABL DIP Claims, Term Loan DIP Claims, Other Secured Claims, Other
Priority Claims, Priority Term Loan Claims, Rollover Term Loan Claims, Tranche B Term Loan Claims, Convertible Notes Claims, General Unsecured
Claims, Capital Lease Claims, TRA Claims, Section 510(b) Claims, Intercompany Claims, Intercompany Interests, or Equity
Interests, whether under any provision of chapter 5 of the Bankruptcy Code, on any equitable theory (including equitable subordination,
equitable disallowance, or unjust enrichment) or otherwise. The Plan shall be deemed a motion to approve the good faith compromise and
settlement of all such Claims, Interests, and controversies pursuant to Bankruptcy Rule 9019, and the entry of the Confirmation
Order shall constitute the Court’s approval of such compromise and settlement under section 1123 of the Bankruptcy Code and Bankruptcy
Rule 9019, as well as a finding by the Court that such settlement and compromise is fair, equitable, reasonable, and in the best
interests of the Debtors and their Estates. Subject to Article VI hereof, all distributions made to Holders of Allowed Claims and
Allowed Interests (as applicable) in any Class are intended to be and shall be final. Notwithstanding anything contrary herein, nothing
in this Plan shall be deemed to release, waive, compromise, settle, impair, or enjoin any Claim or Cause of Action of Fortress against
any Fortress Non-Released Party.
| B. | Restructuring Transactions. |
On or before the Plan Effective
Date, the applicable Debtors or the Reorganized Debtors shall enter into any transaction and shall take any actions as may be necessary
or appropriate to effectuate the Restructuring Transactions, including as set forth in the Restructuring Transactions Memorandum. The
applicable Debtors or the Reorganized Debtors shall take any actions as may be necessary or advisable to effect a corporate restructuring
of the overall corporate structure of the Debtors, to the extent provided herein, or in the Definitive Documentation, including the issuance
of all securities, notes, instruments, certificates, and other documents required to be issued pursuant to the Plan, one or more inter-company
mergers, consolidations, amalgamations, arrangements, continuances, restructurings, conversions, dissolutions, transfers, liquidations,
or other corporate transactions.
The
actions to implement the Restructuring Transactions may include, and in any event, shall be in accordance with the consent rights in the
Restructuring Support Agreement and the Definitive Documentation: (1) the execution and delivery of appropriate agreements
or other documents of merger, amalgamation, consolidation, restructuring, conversion, disposition, transfer, arrangement, continuance,
dissolution, sale, purchase, or liquidation containing terms that are consistent with the terms of the Plan and the other Definitive Documentation
and that satisfy the requirements of applicable Law and any other terms to which the applicable Entities may agree; (2) the execution
and delivery of appropriate instruments of transfer, assignment, assumption, or delegation of any asset, property, right, liability, debt,
or obligation on terms consistent with the terms of the Plan and having other terms for which the applicable parties agree; (3) the
filing of appropriate certificates or articles of incorporation, formation, reincorporation, merger, consolidation, conversion, amalgamation,
arrangement, continuance, or dissolution pursuant to applicable state or provincial law; and (4) all other actions that the applicable
Entities determine to be necessary, including making filings or recordings that may be required by applicable Law in connection with the
Plan. The Confirmation Order shall, and shall be deemed to, pursuant to sections 363 and 1123 of the Bankruptcy Code, authorize, among
other things, all actions as may be necessary or appropriate to effect any transaction described in, contemplated by, or necessary to
effectuate the Plan.
| C. | Cancellation of Existing Agreements and Interests. |
On
the Plan Effective Date, unless otherwise provided in the Plan or the Confirmation Order, including in Article V.A hereof, all notes,
instruments, certificates, and other documents evidencing Claims or Interests, including credit agreements and indentures and the Tax
Receivable Agreement, shall be cancelled and the obligations of the Debtors and any non-Debtor Affiliate thereunder or in any way related
thereto shall be deemed satisfied in full, cancelled, discharged, and of no force or effect, and the Convertible Notes Trustee, and its
agents, successors and assigns shall each be automatically and fully released and discharged of and from all duties and obligations thereunder;
provided, however, that notwithstanding anything to the contrary contained herein, (x) any agreement that governs the rights
of the DIP Agents and Term Loan Agent shall continue in effect solely for purposes of allowing the DIP Agents and Term Loan Agent to (i) enforce
their rights against any Person other than, solely to the extent of the release provided by such DIP Agent or Term Loan Agent, any of
the Released Parties or the ABL Released Parties, pursuant and subject to the terms of the Plan, the DIP Orders, the ABL DIP Credit Agreement,
Term Loan DIP Credit Agreement, and/or the Term Loan Credit Agreement, (ii) receive distributions under the Plan and to distribute
them to the Holders of Allowed ABL DIP Claims, if any, Allowed Term Loan DIP Claims, and Allowed Term Loan Claims, in accordance with
the terms of the Plan, the DIP Orders, the ABL DIP Credit Agreement, the Term Loan DIP Credit Agreement, and/or the Term Loan Credit Agreement,
(iii) enforce their rights to payment of fees, expenses, and indemnification obligations, in accordance with the terms of the DIP
Orders, the ABL DIP Credit Agreement, the Term Loan DIP Credit Agreement, and/or the Term Loan Credit Agreement, (iv) appear and
be heard in the Chapter 11 Cases or in any proceeding in the Court, including to enforce any obligation under the Plan owed to the DIP
Agents, Term Loan Agent, or Holders of Allowed ABL DIP Claims, if any, Term Loan DIP Claims, or Term Loan Claims, as applicable, and (v) permit
the DIP Agents and the Term Loan Agent, as applicable, to perform any functions necessary to effectuate the foregoing, and (y) the
Convertible Notes Indenture and any other agreement that governs the rights of the Convertible Notes Trustee shall continue in effect
solely for purposes of allowing the Convertible Notes Trustee to (i) exercise its Convertible Notes Trustee Charging Lien against
distributions to Holders of Convertible Notes Claims, (ii) preserve any right of indemnification, contribution, subrogation or any
other claim or entitlement it may have under the Convertible Notes Indenture, (iii) receive distributions under the Plan and to distribute
them to the Holders of Convertible Notes Claims, in accordance with the terms of the Plan and the Convertible Notes Indenture, (iv) appear
and be heard in the Chapter 11 Cases or in any proceeding in the Court, including to enforce any obligation under the Plan owed to the
Convertible Notes Trustee and the Holders of Convertible Notes Claims, and (v) permit the Convertible Notes Trustee to perform any
functions necessary to effectuate the foregoing. Holders of or parties to such cancelled instruments, securities, and other documentation
will have no rights arising from or relating to such instruments, securities, and other documentation, or the cancellation thereof, except
the rights provided for pursuant to this Plan. Notwithstanding the foregoing or anything to the contrary herein, any rights of the Agent/Trustees,
Term Loan Lenders, the Term Loan DIP Lenders, the ABL Lenders, and the ABL DIP Lenders to indemnification under the DIP Documents, the
Prepetition Credit Agreements, and the Convertible Notes Indenture, as applicable, shall remain binding and enforceable in accordance
with the terms of such documents and shall not be subject to discharge, impairment, or release under the Plan or the Confirmation Order.
As a condition precedent to receiving any distribution on account of its Convertible Notes Claim, each Holder of a Convertible Notes Claim
shall be deemed to have surrendered its respective Convertible Notes and other documentation underlying its Convertible Notes Claims,
and all such surrendered Convertible Notes and other documentation shall be deemed to be cancelled pursuant to this section, except to
the extent otherwise provided herein.
| D. | Section 1146 Exemption. |
To the fullest extent permitted
by section 1146(a) of the Bankruptcy Code, any transfers (whether from a Debtor to a Reorganized Debtor or to any other Person) of
property under the Plan or pursuant to: (1) the issuance, reinstatement, distribution, transfer, or exchange of any debt, Equity
Security, or other interest in the Debtors or the Reorganized Debtors, including the New Equity Interests (including on account of the
DIP-to-Exit Commitment Premium) and the Warrants; (2) the Restructuring Transactions; (3) the creation, modification, consolidation,
termination, refinancing, and/or recording of any mortgage, deed of trust, or other security interest, or the securing of additional indebtedness
by such or other means; (4) the making, assignment, or recording of any lease or sublease; (5) the grant of collateral as security
for the Exit Facilities; or (6) the making, delivery, or recording of any deed or other instrument of transfer under, in furtherance
of, or in connection with, the Plan, including any deeds, bills of sale, assignments, or other instrument of transfer executed in connection
with any transaction arising out of, contemplated by, or in any way related to the Plan, shall not be subject to any document recording
tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, real estate transfer tax, mortgage recording tax, Uniform Commercial
Code filing or recording fee, regulatory filing or recording fee, or other similar tax or governmental assessment, and upon entry of the
Confirmation Order, the appropriate state or local governmental officials or agents shall forego the collection of any such tax or governmental
assessment and accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax,
recordation fee, or governmental assessment. All filing or recording officers (or any other Person with authority over any of the foregoing),
wherever located and by whomever appointed, shall comply with the requirements of section 1146 of the Bankruptcy Code, shall forego the
collection of any such tax or governmental assessment, and shall accept for filing and recordation any of the foregoing instruments or
other documents without the payment of any such tax or governmental assessment.
On the Plan Effective Date,
the New Board shall be established, and each Reorganized Debtor shall adopt its New Organizational Documents. The Reorganized Debtors
shall be authorized to adopt any other agreements, documents, and instruments and to take any other actions contemplated under the Plan
as necessary to consummate the Plan.
| F. | Sources of Consideration for Plan Distributions. |
The Debtors shall fund distributions
under the Plan, as applicable, with: (1) the proceeds from the Exit Facilities, (2) the New Equity Interests, (3) the Warrants,
and (4) the Debtors’ Cash on hand. Each distribution and issuance referred to in Article VI of the Plan shall be governed
by the terms and conditions set forth in the Plan applicable to such distribution or issuance and by the terms and conditions of the instruments
or other documents evidencing or relating to such distribution or issuance, which terms and conditions shall bind each Entity receiving
such distribution or issuance. The issuance, distribution, or authorization, as applicable, of certain Securities in connection with the
Plan, including the New Equity Interests (including the New Equity Interests issued on account of the DIP-to-Exit Commitment Premium)
and the Warrants, will be exempt from SEC registration, as described more fully in Article IV.N hereof.
1. The
ABL Exit Facility.
On
the Plan Effective Date, the Reorganized Debtors shall enter into the ABL Exit Facility, the terms of which shall be set forth
in the ABL Exit Facility Documents. Confirmation of the Plan shall be deemed approval of the ABL Exit Facility and the ABL Exit Facility
Documents, as applicable, and all transactions contemplated thereby, and all actions to be taken, undertakings to be made, and obligations
to be incurred by the Reorganized Debtors in connection therewith, including the payment of all fees, indemnities, expenses, and other
payments provided for therein and authorization of the Reorganized Debtors to enter into and execute the ABL Exit Facility Documents and
such other documents as may be required to effectuate the treatment afforded by the ABL Exit Facility. The refinancing of the obligations
under the ABL DIP Credit Agreement as provided in this paragraph shall also be subject to a payment statement in form and substance acceptable
to the ABL DIP Agent and the Debtors.
On the Plan Effective
Date, subject to the priorities set forth in the Intercreditor Agreement, all of the Liens and security interests to be granted in accordance
with the ABL Exit Facility Documents (a) shall be deemed to be granted, (b) shall be legal, binding, and enforceable Liens on,
and security interests in, the collateral granted thereunder in accordance with the terms of the ABL Exit Facility Documents, (c) shall
be deemed automatically perfected as of the Plan Effective Date, subject only to such Liens and security interests as may be permitted
under the ABL Exit Facility Documents, (d) shall have the same priority as the priority of the Liens on, and security interests in,
the collateral securing the ABL Claims as of the Petition Date relative to all other Liens on, and security interests in, such collateral
in existence as of the Petition Date or arising thereafter, (e) shall not be subject to recharacterization or equitable subordination
for any purposes whatsoever, and (f) shall not constitute preferential transfers or fraudulent conveyances under the Bankruptcy Code
or any applicable non-bankruptcy law. The Reorganized Debtors and the persons and entities granted such Liens and security interests shall
be authorized to make all filings and recordings and to obtain all governmental approvals and consents necessary to establish and perfect
such Liens and security interests under the provisions of state, federal, or other law that would be applicable in the absence of the
Plan and the Confirmation Order (it being understood that perfection shall occur automatically by virtue of the entry of the Confirmation
Order and any such filings, recordings, approvals, and consents shall not be required) and shall thereafter cooperate to make all other
filings and recordings that otherwise would be necessary under applicable law to give notice of such Liens and security interests to third
parties.
2. The
1L Exit Facility.
On
the Plan Effective Date, the Reorganized Debtors shall enter into the 1L Exit Facility, the terms of which shall be set forth in
the 1L Exit Facility Documents. Confirmation of the Plan shall be deemed approval of the 1L Exit Facility and the 1L Exit Facility Documents,
as applicable, and all transactions contemplated thereby, and all actions to be taken, undertakings to be made, and obligations to be
incurred by the Reorganized Debtors in connection therewith, including the payment of all fees, indemnities, expenses, and other payments
provided for therein and authorization of the Reorganized Debtors to enter into and execute the 1L Exit Facility Documents and such other
documents as may be required to effectuate the treatment afforded by the 1L Exit Facility. Execution of the 1L Exit Facility Credit Agreements
by the 1L Exit Facility Agent shall be deemed to bind all 1L Exit Facility Lenders (including each Holder of Term Loan DIP Claims that
receives 1L Exit Facility Loans on the Plan Effective Date on account of such Term Loan DIP Claims, each Holder of Priority Term Loan
Claims that receives 1L Exit Facility Loans on the Plan Effective Date on account of such Priority Term Loan Claims, and each Term Loan
DIP Lender that lends New Money 1L Exit Term Loans to the Reorganized Debtors on the Plan Effective Date pursuant to its New Money Exit
Financing Commitments) as if each such 1L Exit Facility Lender had executed the 1L Exit Facility Credit Agreement with appropriate authorization.
The 1L Exit Facility shall constitute a refinancing of the obligations under the Term Loan DIP Credit Agreement.
On the Plan Effective
Date, subject to the priorities set forth in the Intercreditor Agreement, all of the Liens and security interests to be granted in accordance
with the 1L Exit Facility Documents (a) shall be deemed to be granted, (b) shall be legal, binding, and enforceable
Liens on, and security interests in, the collateral granted thereunder in accordance with the terms of the 1L Exit Facility Documents,
(c) shall be deemed automatically perfected on the Plan Effective Date, subject only to such Liens and security interests as may
be permitted under the 1L Exit Facility Documents, (d) shall not be subject to recharacterization or equitable subordination for
any purposes whatsoever, and (e) shall not constitute preferential transfers or fraudulent conveyances under the Bankruptcy Code
or any applicable non-bankruptcy law. The Reorganized Debtors and the persons and entities granted such Liens and security interests shall
be authorized to make all filings and recordings and to obtain all governmental approvals and consents necessary to establish and perfect
such Liens and security interests under the provisions of state, federal, or other law that would be applicable in the absence of the
Plan and the Confirmation Order (it being understood that perfection shall occur automatically by virtue of the entry of the Confirmation
Order and any such filings, recordings, approvals, and consents shall not be required) and shall thereafter cooperate to make all other
filings and recordings that otherwise would be necessary under applicable law to give notice of such Liens and security interests to third parties.
3. The
2L Exit Facility.
On
the Plan Effective Date, the Reorganized Debtors shall enter into the 2L Exit Facility, the terms of which shall be set forth in
the 2L Exit Facility Documents. Confirmation of the Plan shall be deemed approval of the 2L Exit Facility and the 2L Exit Facility
Documents, as applicable, and all transactions contemplated thereby, and all actions to be taken, undertakings to be made, and obligations
to be incurred by the Reorganized Debtors in connection therewith, including the payment of all fees, indemnities, expenses, and other
payments provided for therein and authorization of the Reorganized Debtors to enter into and execute the 2L Exit Facility Documents and
such other documents as may be required to effectuate the treatment afforded by the 2L Exit Facility. Execution of the 2L Exit Facility
Credit Agreements by the 2L Exit Facility Agent shall be deemed to bind all Participating Rollover Lenders who exercise their Conversion
Right on the Plan Effective Date as if such Participating Rollover Lenders had executed the 2L Exit Facility Credit Agreement with appropriate
authorization.
On the Plan Effective
Date, subject to the priorities set forth in the Intercreditor Agreement, all of the Liens and security interests to be granted in accordance
with the 2L Exit Facility Documents (a) shall be deemed to be granted, (b) shall be legal, binding, and enforceable Liens
on, and security interests in, the collateral granted thereunder in accordance with the terms of the 2L Exit Facility Documents, (c) shall
be deemed automatically perfected on the Plan Effective Date, subject only to such Liens and security interests as may be permitted under
the 2L Exit Facility Documents, (d) shall not be subject to recharacterization or equitable subordination for any purposes whatsoever,
and (e) shall not constitute preferential transfers or fraudulent conveyances under the Bankruptcy Code or any applicable non-bankruptcy
law. The Reorganized Debtors and the persons and entities granted such Liens and security interests shall be authorized to make all filings
and recordings and to obtain all governmental approvals and consents necessary to establish and perfect such Liens and security interests
under the provisions of state, federal, or other law that would be applicable in the absence of the Plan and the Confirmation Order (it
being understood that perfection shall occur automatically by virtue of the entry of the Confirmation Order and any such filings, recordings,
approvals, and consents shall not be required), and will thereafter cooperate to make all other filings and recordings that otherwise
would be necessary under applicable law to give notice of such Liens and security interests to third parties.
4. The
Warrants.
On the Plan Effective Date,
the Warrants shall be issued and distributed pursuant to the Plan and in accordance with the Warrant Agreement to all Holders of Convertible
Notes Claims. The Warrants issued pursuant to the Plan shall be validly issued and duly authorized without the need for any further corporate
action and without any further action by the Debtors or Reorganized Debtors, as applicable. Each distribution and issuance referred to
in Article VI hereof shall be governed by the terms and conditions set forth in the Restructuring Support Agreement, the Plan, and
the Warrant Agreement applicable to such distribution or issuance and by the terms and conditions of the instruments evidencing or relating
to such distribution or issuance, which terms and conditions shall bind each Entity receiving such distribution or issuance without the
need for execution by any party thereto other than the applicable Reorganized Debtor(s).
The Warrants shall have the
customary anti-dilution protections for equity splits, equity dividends, combinations, and similar events as set forth in the Warrant
Agreement, shall have such additional terms and conditions as are set forth in the section of the Restructuring Term Sheet titled “New
Warrants,” and shall otherwise be structured and documented in accordance with the applicable consent rights herein and in the Restructuring
Support Agreement.
5. The
3L Exit Facility.
On
the Plan Effective Date, the Reorganized Debtors shall enter into the 3L Exit Facility, the terms of which shall be set forth in
the 3L Exit Facility Documents. Confirmation of the Plan shall be deemed approval of the 3L Exit Facility and the 3L Exit Facility
Documents, as applicable, and all transactions contemplated thereby, and all actions to be taken, undertakings to be made, and obligations
to be incurred by the Reorganized Debtors in connection therewith, including the payment of all fees, indemnities, expenses, and other
payments provided for therein and authorization of the Reorganized Debtors to enter into and execute the 3L Exit Facility Documents and
such other documents as may be required to effectuate the treatment afforded by the 3L Exit Facility. Execution of the 3L Exit Facility
Credit Agreements by the 3L Exit Facility Agent shall be deemed to bind all Non-Participating Rollover Lenders and Participating Rollover
Lenders who do not exercise their Conversion Right on the Plan Effective Date as if each such Holder had executed the 3L Exit Facility
Credit Agreement with appropriate authorization.
In accordance with the DIP
Orders and as set forth in the Term Loan DIP Documents, if a Holder of a Rollover Term Loan Claim holds a Conversion Right and exercises
its Conversion Right by not sending the Debtors a Conversion Right opt-out notice at least three (3) Business Days prior to the Plan
Effective Date, an amount of 3L Exit Facility Loans distributed to such Holder (or its designee) on the Plan Effective Date (in accordance
with Article III.B.4) equal to such Holder’s Conversion Amount (or, if the amount of 3L Exit Facility Loans distributed to
such Holder on the Plan Effective Date in accordance with Article III.B.4 is less than the Conversion Amount, such lesser amount)
will automatically be deemed to be converted into an equivalent principal amount of 2L Exit Facility Loans on the Plan Effective Date
in accordance with the terms and conditions of the Term Loan DIP Documents. For the avoidance of doubt, Non-Participating Rollover Lenders
who receive 3L Exit Facility Loans pursuant to Article III.B.3 hereof shall not be entitled to convert such 3L Exit Facility Loans
to 2L Exit Facility Loans.
On the Plan Effective
Date, subject to the priorities set forth in the Intercreditor Agreement, all of the Liens and security interests to be granted in accordance
with the 3L Exit Facility Documents (a) shall be deemed to be granted, (b) shall be legal, binding, and enforceable
Liens on, and security interests in, the collateral granted thereunder in accordance with the terms of the 3L Exit Facility Documents,
(c) shall be deemed automatically perfected on the Plan Effective Date, subject only to such Liens and security interests as may
be permitted under the 3L Exit Facility Documents, (d) shall not be subject to recharacterization or equitable subordination for
any purposes whatsoever, and (e) shall not constitute preferential transfers or fraudulent conveyances under the Bankruptcy Code
or any applicable non-bankruptcy law. The Reorganized Debtors and the persons and entities granted such Liens and security interests shall
be authorized to make all filings and recordings and to obtain all governmental approvals and consents necessary to establish and perfect
such Liens and security interests under the provisions of state, federal, or other law that would be applicable in the absence of the
Plan and the Confirmation Order (it being understood that perfection shall occur automatically by virtue of the entry of the Confirmation
Order and any such filings, recordings, approvals, and consents shall not be required) and shall thereafter cooperate to make all other
filings and recordings that otherwise would be necessary under applicable law to give notice of such Liens and security interests to third parties.
6. New
Equity Interests.
On the Plan Effective Date,
Reorganized QualTek is authorized to issue or cause to be issued and shall, as provided for in the Restructuring Transactions Memorandum,
issue the New Equity Interests for eventual distribution in accordance with the terms of this Plan without further notice to or order
of the Court, act, or action under applicable law, regulation, order, or rule or the vote, consent, authorization, or approval of
any Person. The New Equity Interests shall be issued and distributed free and clear of all Liens, Claims, and other Interests other than
restrictions under applicable securities laws. All of the New Equity Interests issued pursuant to the Plan shall be duly authorized, validly
issued, and non-assessable.
On the Plan Effective Date,
Reorganized QualTek and all Holders of the New Equity Interests (as applicable) then outstanding shall be deemed to be parties to the
New Organizational Documents, substantially in the form, or consistent with the term sheets, contained in the Plan Supplement without
the need for execution by any such Holder. The New Organizational Documents, including the LLC Agreement and the Registration Rights Agreement,
shall be binding on Reorganized QualTek and its subsidiaries and, solely with respect to the LLC Agreement and the Registration Rights
Agreement, all parties receiving (on the Plan Effective Date), and Holders (as applicable) of, New Equity Interests.
7. DIP-to-Exit
Allocation Process.
The DIP-to-Exit Allocation
Process shall be open to all DIP-to-Exit Eligible Offerees, who shall be entitled to fund their Pro Rata share of Term Loan DIP New Money
Loans and New Money Exit Financing Commitments in accordance with the Solicitation Materials and the Term Loan DIP Documents.
In exchange for consideration
and in accordance with the DIP-to-Exit Commitment Letter and their respective Backstop Commitments, the Backstop Parties have committed
to fully backstop, severally and neither jointly nor jointly and severally, the full amount of the Term Loan DIP New Money Loans and New
Money Exit Financing Commitments. To the extent that any Holder of a DIP-to-Exit Eligible Offeree Claim does not participate in the DIP-to-Exit
Allocation Process to the fullest extent of such Holder’s pro rata allocation of the Term Loan DIP New Money Loans and New
Money Exit Financing Commitments, such Holder’s unsubscribed allocation of the Term Loan DIP New Money Loans and New Money Exit
Financing Commitments will be allocated to the Backstop Parties on a pro rata basis based on each Backstop Party’s respective
Backstop Commitments.
At the conclusion of the DIP-to-Exit
Allocation Process, each Term Loan DIP Lender, including any Backstop Party, if applicable, shall have committed to lend its pro rata
allocation of the New Money 1L Exit Term Loans to the Reorganized Debtors on the Plan Effective Date in accordance with the terms and
conditions of the Term Loan DIP Documents. In accordance with the DIP Orders and the Term Loan DIP Documents, on the Plan Effective Date
and in exchange for each Term Loan DIP Lender’s funding Term Loan DIP New Money Loans and its pro rata allocation of New
Money 1L Exit Term Loans, (a) such Term Loan DIP Lender (or its designee) shall receive its pro rata share of the DIP-to-Exit
Commitment Premium; and (b) Reorganized QualTek shall be authorized to issue the applicable New Money 1L Exit Term Loans and DIP-to-Exit
Commitment Premium.
Pursuant to the DIP Orders,
the Term Loan DIP Lenders’ claims for the DIP-to-Exit Commitment Premium are superpriority administrative expense claims that are
actual, necessary costs of preserving the Debtors’ Estates. The DIP-to-Exit Commitment Premium will be offered, issued, and distributed
under the Plan without registration under the Securities Act, or any state or local law requiring registration for offer and sale of a
security, in reliance upon the exemption provided in section 1145(a) of the Bankruptcy Code.
Entry of the Confirmation
Order shall constitute the Court’s approval of Reorganized QualTek’s payment of the DIP-to-Exit Commitment Premium and the
DIP-to-Exit Allocation Process (including the transactions, actions, and obligations of the Debtors contemplated thereby, and all actions
to be undertaken, undertakings to be made, and obligations to be incurred by Reorganized QualTek in connection therewith) without prejudice
to the effect of the Court’s approval of the DIP-to-Exit Allocation Process (including the transactions, actions, and obligations
of the Debtors contemplated thereby, and all actions to be undertaken, undertakings to be made, and obligations to be incurred by Reorganized
QualTek in connection therewith) pursuant to the DIP Orders. On the Plan Effective Date, the rights and obligations of the Debtors under
the DIP-to-Exit Commitment Letter shall vest in the Reorganized Debtors, as applicable.
The proceeds of the New Money
1L Exit Term Loans shall be used by the Reorganized Debtors for working capital and general corporate purposes.
Except as otherwise provided
in the Plan, (including the Restructuring Transactions Memorandum), TopCo shall continue to exist after the Plan Effective Date as a separate
corporate Entity, limited liability company, partnership, or other form, as the case may be, with all the powers of a corporation, limited
liability company, partnership, or other form, as the case may be, pursuant to the applicable law in the jurisdiction in which TopCo is
incorporated or formed and pursuant to the certificate of incorporation and bylaws (or other formation documents) in effect prior to the
Plan Effective Date, except to the extent such certificate of incorporation and bylaws (or other formation documents) are amended under
the Plan or otherwise, in each case, consistent with the Plan and the Restructuring Support Agreement, and to the extent such documents
are amended, such documents are deemed to be amended pursuant to the Plan and require no further action or approval (other than any requisite
filings required under applicable state, provincial, or federal law). On or after the Plan Effective Date, the respective certificate
of incorporation and bylaws (or other formation documents) of one or more of the Reorganized Debtors may be amended or modified on the
terms therein without supervision or approval by the Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules. On
or after the Plan Effective Date, one or more of the Reorganized Debtors may be disposed of, dissolved, wound down, or liquidated without
supervision or approval by the Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules.
| H. | Vesting of Assets in the Reorganized Debtors. |
Except
as otherwise provided in the Plan, the Confirmation Order, or any agreement, instrument, or other document incorporated in, or entered
into in connection with or pursuant to, the Plan, the Plan Supplement, or the Exit Facility Documents, on the Plan Effective Date, all
property in each Estate, all Causes of Action, and any property acquired by any of the Debtors pursuant to the Plan shall vest in each
respective Reorganized Debtor, free and clear of all Liens, Claims, charges, Causes of Action, or other encumbrance. On and after
the Plan Effective Date, except as otherwise provided in the Plan, the Confirmation Order, or any agreement, instrument, or other document
incorporated herein, each Reorganized Debtor may operate its business and may use, acquire, or dispose of property and compromise or settle
any Claims, Interests, or Causes of Action without supervision or approval by the Court and free of any restrictions of the Bankruptcy
Code or Bankruptcy Rules.
Upon
the Plan Effective Date, all actions contemplated under the Plan shall be deemed authorized and approved in all respects, including (i) adoption
or assumption, as applicable, of the Employment Obligations; (ii) selection of the directors, officers, or managers of the Reorganized
Debtors; (iii) the distribution of the New Equity Interests; (iv) issuance and distribution of the Warrants; (v) implementation
of the Restructuring Transactions; (vi) entry into the Warrant Agreement and the Exit Facility Documents; (vii) all other actions
contemplated under the Plan (whether to occur before, on, or after the Plan Effective Date); (viii) adoption of the New Organizational
Documents; (ix) the rejection, assumption, or assumption and assignment, as applicable, of Executory Contracts or Unexpired Leases;
and (x) all other acts or actions contemplated or reasonably necessary or appropriate to promptly consummate the Restructuring Transactions
contemplated by the Plan (whether to occur before, on, or after the Plan Effective Date). All matters provided for in the Plan involving
the corporate structure of the Debtors or the Reorganized Debtors, and any corporate action required by the Debtors or the Reorganized
Debtors, as applicable, in connection with the Plan shall be deemed to have occurred and shall be in effect, without any requirement of
further action by the security Holders, directors, officers, or managers of the Debtors or the Reorganized Debtors, as applicable. On
or (as applicable) prior to the Plan Effective Date, the appropriate officers of the Debtors or the Reorganized Debtors, as applicable,
shall be authorized and (as applicable) directed to issue, execute, and deliver the agreements, documents, securities, and instruments
contemplated under the Plan (or necessary or desirable to effect the transactions contemplated under the Plan) in the name of and on behalf
of the Reorganized Debtors, including the New Equity Interests, the New Organizational Documents, the Exit Facilities, the Exit
Facility Documents, the Warrants, the Warrant Agreement, and any and all other agreements, documents, securities, and instruments relating
to the foregoing. The authorizations and approvals contemplated by this Article IV.I shall be effective notwithstanding any requirements
under non-bankruptcy law.
| J. | New Organizational Documents. |
On or immediately prior to
the Plan Effective Date, the New Organizational Documents shall be automatically adopted by the applicable Reorganized Debtors and shall
supersede any existing organizational documents, including the Investor Rights Agreement. To the extent required under the Plan or applicable
non-bankruptcy law, each of the Reorganized Debtors will file its New Organizational Documents with the applicable Secretaries of State
and/or other applicable authorities in its respective state, province, or country of incorporation if and to the extent required in accordance
with the applicable laws of the respective state, province, or country of incorporation. The New Organizational Documents will (i) prohibit
the issuance of non-voting Equity Securities, to the extent required under section 1123(a)(6) of the Bankruptcy Code and (ii) provide
for customary minority shareholder protections and information and reporting requirements. On or after the Plan Effective Date, the Reorganized
Debtors may amend and restate their respective New Organizational Documents in accordance with the terms thereof, and the Reorganized
Debtors may file such amended certificates or articles of incorporation, bylaws, or such other applicable formation documents, and other
constituent documents as permitted by the laws of their respective jurisdictions of incorporation or formation. The New Organizational
Documents will, without limitation, provide for (x) preemptive rights for Significant Holders with respect to future equity and equity-linked
issuances, subject to customary exceptions and (y) customary related party and minority equity holder protections, and other terms
and conditions to be agreed. The New Organizational Documents shall be included as exhibits to the Plan Supplement.
| K. | Directors and Officers of the Reorganized Debtors. |
As
of the Plan Effective Date, the term of the current members of the board of directors or other Governing Body of TopCo shall expire,
and the members for the initial term of the New Board shall be appointed. The initial members of the New Board will be identified in the
Plan Supplement, to the extent known at the time of filing. Each such member and officer of the Reorganized Debtors shall serve from and
after the Plan Effective Date pursuant to the terms of the New Organizational Documents and other constituent documents of the Reorganized
Debtors.
The New Board shall consist
of five (5) members. At least three (3) members of the New Board shall not be, and shall not have been within the twelve (12)
months preceding their appointment, employed by (i) the Debtors, the Reorganized Debtors, or any subsidiary of the Debtors or Reorganized
Debtors or (ii) any Significant Holder or any fund, manager, or advisor (or similar) of any Significant Holder. For so long as Fortress
is a Significant Holder, (x) Fortress shall have a consultation right with respect to the selection of any members of the New Board
whose selection is controlled by other Significant Holders (including the members of the New Board to be appointed as of the Plan Effective
Date); (y) no Significant Holder that holds an amount of New Equity equal or less than the amount of New Equity held by Fortress
will have the right to select a member of the New Board unless Fortress is also provided the right to select a member of the New Board;
and (z) no more than one (1) member of the New Board shall be an employee or a holder of more than 10 percent of
the equity of a Significant Holder or its Affiliates.
| L. | Management Incentive Plan. |
On the Plan Effective Date,
the Reorganized Debtors shall implement the MIP on the terms set forth in the Restructuring Term Sheet.
| M. | Effectuating Documents; Further Transactions. |
On and after the Plan Effective
Date, the Reorganized Debtors and the New Board are authorized to and may issue, execute, deliver, file, or record such contracts, Securities,
instruments, releases, and other agreements or documents and take such actions as may be necessary to effectuate, implement, and further
evidence the terms and conditions of the Plan and the Securities issued pursuant to the Plan in the name of and on behalf of the Reorganized
Debtors, without the need for any approvals, authorization, or consents except for those expressly required pursuant to the Plan.
| N. | Certain Securities Law Matters. |
The offering, issuance, and
distribution of the New Equity Interests (including in connection with DIP-to-Exit Commitment Premium) and Warrants, as contemplated by
Article IV.F.4, F.6, and F.7 of this Plan, shall be exempt from, among other things, the registration requirements of section
5 of the Securities Act and any other applicable law requiring registration prior to the offering, issuance, distribution, or sale of
Securities in accordance with, and pursuant to, section 1145 of the Bankruptcy Code. Such New Equity Interests and Warrants (i) will
not be “restricted securities” as defined in Rule 144(a)(3) under the Securities Act, and (ii) will be freely
tradeable and transferable without registration under the Securities Act in the United States by the recipients thereof that are not,
and have not been within 90 days of such transfer, an “affiliate” of the Debtors as defined in Rule 144(a)(1) under
the Securities Act, subject to the provisions of section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter
in section 1145(b) of the Bankruptcy Code and compliance with applicable securities laws and any rules and regulations of the
United States Securities and Exchange Commission or state or local securities laws, if any, applicable at the time of any future transfer
of such Securities or instruments.
The New Equity Interests issued
in connection with the DIP-to-Exit Commitment Premium will be issued in reliance on the exemptions set forth in section 1145 of the Bankruptcy
Code. Any Securities issued in reliance on section 4(a)(2), including in compliance with Rule 506 of Regulation D, and/or Regulation
S will be “restricted securities” subject to resale restrictions and may be resold, exchanged, assigned, or otherwise transferred
only pursuant to registration or an applicable exemption from registration under the Securities Act and other applicable law. Any Securities
issued in reliance on section 1145 of the Bankruptcy Code will not be “restricted securities” as defined in Rule 144(a)(3) under
the Securities Act and will be freely tradeable and transferable without registration under the Securities Act in the United States by
the recipients thereof, subject to the provisions of section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter
in section 2(a)(11) of the Securities Act and compliance with applicable securities laws and any rules and regulations of the United
States Securities and Exchange Commission, if any, applicable at the time of any future transfer of such Securities or instruments.
| O. | Employment Obligations. |
Unless
otherwise provided herein, specifically rejected pursuant to a separate order of the Court, specifically designated as a contract or lease
to be rejected on the Schedule of Executory Contracts and Unexpired Leases, or the subject of a separate rejection motion filed by the
Debtors, and subject to Article V of the Plan, the Reorganized Debtors shall: (a) assume all employment agreements, indemnification
agreements, or other agreements with current and former members of any Governing Body, employees, officers, directors, or managers of
the Debtors; or (b) enter into new agreements with such persons on terms and conditions acceptable to the Reorganized Debtors and
such person. Notwithstanding the foregoing, pursuant to section 1129(a)(13) of the Bankruptcy Code, from and after the Plan Effective
Date, all retiree benefits (as such term is defined in section 1114 of the Bankruptcy Code), if any, shall continue to be paid in
accordance with applicable law.
| P. | Preservation of Causes of Action. |
In accordance with section
1123(b) of the Bankruptcy Code, but subject to Article VIII hereof, the Reorganized Debtors shall retain and may enforce all
rights to commence and pursue, as appropriate, any and all Causes of Action, whether arising before or after the Petition Date, including
any actions specifically enumerated in the Schedule of Retained Causes of Action, and the Reorganized Debtors’ rights to commence,
prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Plan Effective Date, other than the
Causes of Action released by the Debtors pursuant to the releases and exculpations contained in the Plan, including in Article VIII.
The Reorganized Debtors may
pursue such Causes of Action, as appropriate, in accordance with the best interests of the Reorganized Debtors. No Entity may rely
on the absence of a specific reference in the Plan, the Plan Supplement, or the Disclosure Statement to any Cause of Action against it
as any indication that the Debtors or Reorganized Debtors, as applicable, will not pursue any and all available Causes of Action against
it. The Debtors or Reorganized Debtors, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against
any Entity, except as otherwise expressly provided in the Plan, including Article VIII of the Plan. Unless any Cause of Action
against an Entity is expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or a Court order, the Reorganized
Debtors expressly reserve all Causes of Action for later adjudication, and, therefore, no preclusion doctrine, including the doctrines
of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable, or otherwise), or laches,
shall apply to such Causes of Action upon, after, or as a consequence of the Confirmation or Consummation.
The Reorganized Debtors reserve
and shall retain such Causes of Action notwithstanding the rejection or repudiation of any Executory Contract or Unexpired Lease during
the Chapter 11 Cases or pursuant to the Plan. In accordance with section 1123(b)(3) of the Bankruptcy Code, any Causes of Action
that a Debtor may hold against any Entity shall vest in the Reorganized Debtors, except as otherwise expressly provided in the Plan, including
Article VIII of the Plan. The Reorganized Debtors, through their authorized agents or representatives, shall retain and may exclusively
enforce any and all such Causes of Action. The Reorganized Debtors shall have the exclusive right, authority, and discretion to determine
and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of
Action and to decline to do any of the foregoing without the consent or approval of any third party or further notice to or action, order,
or approval of the Court.
The Reorganized Debtors shall
not have any class of equity securities listed on a national securities exchange and shall make commercially reasonable efforts to take
the steps necessary to be a private company without Exchange Act reporting obligations upon emergence or as soon as practicable thereafter
in accordance with and to the extent permitted by the Exchange Act.
The terms of the Plan and
the Restructuring Transactions shall be structured to minimize, to the extent practicable, the aggregate tax impact of the Restructuring
Transactions on the Debtors and the Reorganized Debtors, taking into account both the cash tax impact of the Restructuring Transactions
on the Debtors in the tax year of the Restructuring Transactions and the tax liability of the Reorganized Debtors in subsequent tax years.
The Debtors and the Consenting Stakeholders shall cooperate in good faith to structure the Restructuring Transactions in a tax efficient
manner reasonably acceptable to each such party.
| S. | Director and Officer Liability Insurance. |
After
the Plan Effective Date, none of the Reorganized Debtors shall terminate or otherwise reduce the coverage under any D&O Liability
Insurance Policies (including any “tail policy”) in effect on or after the Petition Date, with respect to conduct or events
occurring prior to the Plan Effective Date, and all directors and officers of the Debtors who served in such capacity at any time prior
to the Plan Effective Date shall be entitled to the full benefits of any such policy for the full term of such policy, to the extent set
forth therein, regardless of whether such directors and officers remain in such positions after the Plan Effective Date.
Article V.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
| A. | Assumption and Rejection of Executory Contracts and Unexpired Leases. |
Each
Executory Contract and Unexpired Lease shall be deemed assumed, or assumed and assigned as set forth in the Plan Supplement, without the
need for any further notice to or action, order, or approval of the Court, as of the Plan Effective Date under section 365 of the Bankruptcy
Code, other than: (a) those that (1) are identified on the Rejected Executory Contracts and Unexpired Lease Schedule,
(2) were previously expired or terminated pursuant to their own terms, (3) have been previously assumed or rejected by the Debtors
pursuant to a Final Order, (4) are the subject of a motion to reject that is pending on the Plan Effective Date, or (5) have
an ordered or requested effective date of rejection that is after the Plan Effective Date; and (b) the Tax Receivable Agreement,
which shall be cancelled and deemed rejected and, for the avoidance of doubt, any rejection damages arising out of such rejection shall
be treated as TRA Claims.
Entry of the Confirmation
Order shall constitute an order of the Court approving the assumptions, assumptions and assignments, or rejections of the Executory Contracts
or Unexpired Leases as set forth in the Plan, the Rejected Executory Contracts and Unexpired Leases Schedule, as applicable, pursuant
to sections 365(a) and 1123 of the Bankruptcy Code. Except as otherwise specifically set forth herein, assumptions or rejections
of Executory Contracts and Unexpired Leases pursuant to the Plan are effective as of the Plan Effective Date. Except as otherwise provided
herein or in the Confirmation Order, each Executory Contract or Unexpired Lease assumed pursuant to the Plan or by Court order but not
assigned to a third party before the Plan Effective Date shall re-vest in and be fully enforceable by the applicable contracting Reorganized
Debtor in accordance with its terms except as such terms may have been modified by the provisions of the Plan or any order of the Court
authorizing and providing for its assumption. Any motions to assume Executory Contracts or Unexpired Leases pending on the Plan Effective
Date shall be subject to approval by a Final Order on or after the Plan Effective Date but may be withdrawn, settled, or otherwise prosecuted
by the Reorganized Debtors.
To the maximum extent permitted
by law, to the extent any provision in any Executory Contract or Unexpired Lease assumed or assumed and assigned pursuant to the Plan
restricts or prevents, or purports to restrict or prevent, or is breached or deemed breached by, the assumption or assumption and assignment
of such Executory Contract or Unexpired Lease (including any “change of control” provision), then such provision shall be
deemed modified such that the transactions contemplated by the Plan shall not entitle the non-Debtor party thereto to terminate such Executory
Contract or Unexpired Lease or to exercise any other default-related rights with respect thereto. Notwithstanding anything to the contrary
in the Plan, the Debtors or the Reorganized Debtors, as applicable, reserve the right to alter, amend, modify, or supplement the Rejected
Executory Contracts and Unexpired Leases Schedule at any time up to thirty (30) days after the Plan Effective Date, so long as such allocation,
amendment, modification, or supplement is consistent with the Restructuring Support Agreement and the consent rights set forth therein.
| B. | Indemnification Obligations. |
Subject in all respects to
Article I.H hereof and to section 510 of the Bankruptcy Code, the treatment of Section 510 Claims under this Plan and to the
fullest extent permitted under applicable law (including being subject to the limitations of the Delaware General Corporation Law, including
the limitations contained therein on a corporation’s ability to indemnify officers and directors), all indemnification provisions
in place as of the Plan Effective Date (whether in the bylaws, certificates of incorporation or formation, limited liability company agreements,
limited partnership agreements, other organizational documents, board resolutions, indemnification agreements, employment contracts, or
otherwise) for the current and former members of any Governing Body, directors, officers, managers, employees, attorneys, accountants,
investment bankers, and other professionals of, or acting on behalf of, the Debtors, as applicable, shall be reinstated and remain intact,
irrevocable, and shall survive the Plan Effective Date on terms no less favorable to such current and former members of any Governing
Body, directors, officers, managers, employees, attorneys, accountants, investment bankers, and other professionals of, or acting on behalf
of, the Debtors than the indemnification provisions in place prior to the Plan Effective Date; provided that nothing herein shall
expand any of the Debtors’ indemnification obligations in place as of the Petition Date or constitute a finding or conclusion that
any party that may seek indemnification is entitled to indemnification under the terms of such indemnification provisions or is intended
to effectuate the survival of any indemnification obligations for any party other than the current members of any Governing Body, directors,
officers, managers, employees, attorneys, accountants, investment bankers, and other professionals of, or acting on behalf of, the Debtors.
For the avoidance of doubt, subject in all respects to Article I.H hereof, following the Plan Effective Date, the Reorganized Debtors
will not terminate or otherwise reduce the coverage under any directors’ and officers’ insurance policies (including any “tail
policy”) in effect or purchased as of the Petition Date, and all members, managers, directors, and officers of the Debtors who served
in such capacity at any time prior to the Plan Effective Date or any other individuals covered by such insurance policies, will be entitled
to the full benefits of any such policy for the full term of such policy regardless of whether such members, managers, directors, officers,
or other individuals remain in such positions after the Plan Effective Date.
| C. | Cure of Defaults for Assumed Executory Contracts and Unexpired Leases. |
The
Debtors or the Reorganized Debtors, as applicable, shall pay Cures, if any, on the Plan Effective Date or as soon as reasonably practicable
thereafter. Unless otherwise agreed upon in writing by the parties to the applicable Executory Contract or Unexpired Lease, all requests
for payment of Cure that differ from the amounts paid or proposed to be paid by the Debtors or the Reorganized Debtors to a counterparty
must be Filed with the Court on or before thirty (30) days after the Plan Effective Date. Any such request that is not timely filed shall
be disallowed and forever barred, estopped, and enjoined from assertion, and shall not be enforceable against any Reorganized Debtor,
without the need for any objection by the Reorganized Debtors or any other party in interest or any further notice to or action, order,
or approval of the Court. Any Cure shall be deemed fully satisfied, released, and discharged upon payment by the Debtors or the Reorganized
Debtors of the Cure; provided that nothing herein shall prevent the Reorganized Debtors from paying any Cure despite the failure
of the relevant counterparty to File such request for payment of such Cure. The Reorganized Debtors also may settle any Cure without any
further notice to or action, order, or approval of the Court. In addition, any objection to the assumption of an Executory Contract
or Unexpired Lease under the Plan must be Filed with the Court on or before thirty (30) days after the Plan Effective Date. Any such objection
will be scheduled to be heard by the Court at the Debtors’ or Reorganized Debtors’, as applicable, first scheduled omnibus
hearing for which such objection is timely filed. Any counterparty to an Executory Contract or Unexpired Lease that fails to timely object
to the proposed assumption of any Executory Contract or Unexpired Lease will be deemed to have consented to such assumption.
If there is any dispute regarding
any Cure, the ability of the Reorganized Debtors or any assignee to provide “adequate assurance of future performance” within
the meaning of section 365 of the Bankruptcy Code, or any other matter pertaining to assumption, then payment of Cure shall occur as soon
as reasonably practicable after entry of a Final Order resolving such dispute, approving such assumption (and, if applicable, assignment),
or as may be agreed upon by the Debtors or the Reorganized Debtors, as applicable, and the counterparty to the Executory Contract or Unexpired
Lease.
Assumption of any Executory
Contract or Unexpired Lease pursuant to the Plan or otherwise and full payment of any applicable Cure pursuant to this Article V.C
shall result in the full release and satisfaction of any Cures, Claims, or defaults, whether monetary or nonmonetary, including defaults
of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults, arising under
any assumed Executory Contract or Unexpired Lease at any time prior to the effective date of assumption. Any and all Proofs of Claim
based upon Executory Contracts or Unexpired Leases that have been assumed in the Chapter 11 Cases, including pursuant to the Confirmation
Order, and for which any Cure has been fully paid pursuant to this Article V.C, shall be deemed disallowed and expunged as of the
Plan Effective Date without the need for any objection thereto or any further notice to or action, order, or approval of the Court.
Each of the Debtors’
insurance policies and any agreements, documents, or instruments relating thereto, are treated as Executory Contracts under the Plan.
Unless otherwise provided in the Plan, and subject in all respects to Article I.H hereof, on the Plan Effective Date, and excepting
any such insurance policies that have previously been assumed or rejected by the Debtors pursuant to a Final Order, are the subject of
a motion to reject that is pending as of the Plan Effective Date, have an ordered or requested effective date of rejection that is after
the Plan Effective Date, or are listed on the Schedule of Executory Contracts and Unexpired Leases, (1) the Debtors shall be deemed
to have assumed all insurance policies and any agreements, documents, and instruments relating to coverage of all insured Claims and (2) such
insurance policies and any agreements, documents, or instruments relating thereto shall revest in the Reorganized Debtors.
Nothing contained in the Plan
or the Plan Supplement, shall constitute an admission by the Debtors that any such contract or lease is in fact an Executory Contract
or Unexpired Lease or that any of the Reorganized Debtors have any liability thereunder. If there is a dispute regarding whether a contract
or lease is or was executory or unexpired at the time of assumption or rejection, the Debtors or the Reorganized Debtors, as applicable,
shall have thirty (30) days following entry of a Final Order resolving such dispute to alter its treatment of such contract or lease under
the Plan.
| F. | Nonoccurrence of Plan Effective Date. |
In the event that the Plan
Effective Date does not occur, the Court shall retain jurisdiction with respect to any request to extend the deadline for assuming or
rejecting Unexpired Leases pursuant to section 365(d)(4) of the Bankruptcy Code.
| G. | Contracts and Leases Entered Into After the Petition Date. |
Contracts and leases entered
into after the Petition Date by any Debtor, including any Executory Contracts and Unexpired Leases assumed by such Debtor, will be performed
by the applicable Debtor or the Reorganized Debtors liable thereunder in the ordinary course of their business. Accordingly, such contracts
and leases (including any assumed Executory Contracts and Unexpired Leases) will survive and remain unaffected by entry of the Confirmation
Order.
| H. | Claims Based on Rejection of Executory Contracts or Unexpired Leases. |
Counterparties
to Executory Contracts or Unexpired Leases listed on the Rejected Executory Contract and Unexpired Lease Schedule, if any, shall
be served with a notice of rejection of Executory Contracts and Unexpired Leases with the Plan Supplement. Unless otherwise provided by
a Final Order of the Court, all Proofs of Claim with respect to Claims arising from the rejection of Executory Contracts or Unexpired
Leases, pursuant to the Plan or the Confirmation Order, if any, must be Filed with the Claims and Noticing Agent and served on the Debtors
or Reorganized Debtors, as applicable, no later than thirty (30) days after the date of entry of an order of the Court (including the
Confirmation Order) approving such rejection.
Any
Claims arising from the rejection of an Executory Contract or Unexpired Lease not Filed with the Court within such time will be automatically
disallowed, forever barred from assertion, and shall not be enforceable against the Debtors or the Reorganized Debtors, the Estates, or
their property without the need for any objection by the Reorganized Debtors or further notice to, or action, order, or approval of the
Court or any other Entity, and any Claim arising out of the rejection of the Executory Contract or Unexpired Lease shall be deemed fully
satisfied, released, and discharged, and be subject to the permanent injunction set forth in Article VIII.F of the Plan, including
any Claims against any Debtor listed on the Debtors’ schedules as unliquidated, contingent, or disputed.
All
Allowed Claims arising from the rejection by any Debtor of any Executory Contract or Unexpired Lease (excluding, for the avoidance of
doubt, the Tax Receivables Agreement) shall be treated as a General Unsecured Claim in accordance with Article III.B of the Plan.
Article VI.
PROVISIONS GOVERNING DISTRIBUTIONS
| A. | Timing and Calculation of Amounts to Be Distributed. |
Unless otherwise provided
in the Plan, on the Plan Effective Date (or if a Claim is not an Allowed Claim or Allowed Interest on the Plan Effective Date, on the
date that such Claim or Interest becomes an Allowed Claim or Allowed Interest, or as soon as reasonably practicable thereafter), each
Holder of an Allowed Claim or Allowed Interest (as applicable) shall receive the full amount of the distributions that the Plan provides
for Allowed Claims or Allowed Interests (as applicable) in the applicable Class. In the event that any payment or act under the Plan is
required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such
act may be completed on the next succeeding Business Day, but shall be deemed to have been completed as of the required date. If and to
the extent that there are Disputed Claims or Disputed Interests, distributions on account of any such Disputed Claims or Disputed Interests
shall be made pursuant to the provisions set forth in Article VII hereof. Except as otherwise provided in the Plan, Holders of Claims
or Interests shall not be entitled to interest, dividends, or accruals on the distributions provided for in the Plan, regardless of whether
such distributions are delivered on or at any time after the Plan Effective Date. The Debtors shall have no obligation to recognize any
transfer of Claims or Interests occurring on or after the Distribution Record Date.
All distributions under the
Plan shall be made by the Disbursing Agent on the Plan Effective Date. The Disbursing Agent shall not be required to give any bond
or surety or other security for the performance of its duties unless otherwise ordered by the Court. Additionally, in the event that the
Disbursing Agent is so otherwise ordered, all costs and expenses of procuring any such bond or surety shall be borne by the Reorganized
Debtors.
| C. | Rights and Powers of Disbursing Agent. |
1. Powers
of the Disbursing Agent.
The Disbursing Agent shall
be empowered to: (a) effect all actions and execute all agreements, instruments, and other documents necessary to perform its duties
under the Plan; (b) make all distributions contemplated hereby; (c) employ professionals to represent it with respect to its
responsibilities; and (d) exercise such other powers as may be vested in the Disbursing Agent by order of the Court, pursuant to
the Plan, or as deemed by the Disbursing Agent to be necessary and proper to implement the provisions hereof.
2. Expenses
Incurred On or After the Plan Effective Date.
Except as otherwise ordered
by the Court, the amount of any reasonable fees and expenses incurred by the Disbursing Agent on or after the Plan Effective Date (including
taxes), and any reasonable compensation and expense reimbursement claims (including reasonable attorney fees and expenses), made by the
Disbursing Agent shall be paid in Cash by the Reorganized Debtors.
| D. | Delivery of Distributions and Undeliverable or Unclaimed Distributions. |
1. Record
Date for Distribution.
On the Distribution Record
Date, the Claims Register shall be closed and any party responsible for making distributions shall instead be authorized and entitled
to recognize only those record Holders listed on the Claims Register as of the close of business on the Distribution Record Date.
2. Delivery
of Distributions in General.
Except as otherwise provided
herein, the Disbursing Agent shall make distributions to Holders of Allowed Claims and Allowed Interests (as applicable) as of the Distribution
Record Date at the address for each such Holder as indicated on the Debtors’ records as of the date of any such distribution; provided
that the manner of such distributions shall be determined at the discretion of the Reorganized Debtors; provided further that the
address for each Holder of an Allowed Claim shall be deemed to be the address set forth in any Proof of Claim Filed by that Holder or
such other address provided to the Disbursing Agent by that Holder.
The Convertible Notes Trustee
Charging Lien shall attach to any distributions made to the Holders of Allowed Convertible Notes Claims in the same manner as if such
distributions were made through the Convertible Notes Trustee; provided that the Convertible Notes Trustee shall not incur any
liability whatsoever on account of such distributions.
3. Minimum
Distributions.
No fractional shares of New
Equity Interests or Warrants shall be distributed and no Cash shall be distributed in lieu of such fractional amounts. When any distribution
pursuant to the Plan on account of an Allowed Claim or Allowed Interest (as applicable) would otherwise result in the issuance of a number
of shares of New Equity Interests or Warrants that is not a whole number, the actual distribution of shares of New Equity Interests or
Warrants shall be rounded as follows: (a) fractions of one-half (½) or greater shall be rounded to the next higher whole number
and (b) fractions of less than one-half (½) shall be rounded to the next lower whole number with no further payment therefore.
The total number of authorized shares of New Equity Interests or Warrants to be distributed to Holders of Allowed Claims shall be adjusted
as necessary to account for the foregoing rounding.
4. Undeliverable
Distributions and Unclaimed Property.
In the event that any distribution
to any Holder of Allowed Claims or Allowed Interests (as applicable) is returned as undeliverable, no distribution to such Holder shall
be made unless and until the Disbursing Agent has determined the then-current address of such Holder, at which time such distribution
shall be made to such Holder without interest; provided that such distributions shall be deemed unclaimed property under section
347(b) of the Bankruptcy Code at the expiration of one year from the Plan Effective Date. After such date, all unclaimed property
or interests in property shall revert to the Reorganized Debtors automatically and without need for a further order by the Court (notwithstanding
any applicable federal, provincial or state escheat, abandoned, or unclaimed property laws to the contrary), and the Claim of any Holder
of Claims and Interests to such property or Interest in property shall be discharged and forever barred.
At the option of the Disbursing
Agent, any Cash payment to be made hereunder may be made by check or wire transfer or as otherwise required or provided in applicable
agreements.
| F. | Compliance with Tax Requirements. |
In connection with the Plan,
to the extent applicable, the Debtors, the Reorganized Debtors, the Disbursing Agent, and any applicable withholding agent shall comply
with all tax withholding and reporting requirements imposed on them by any Governmental Unit, and all distributions made pursuant to the
Plan shall be subject to such withholding and reporting requirements. Notwithstanding any provision in the Plan to the contrary, the Debtors,
the Reorganized Debtors, the Disbursing Agent, and any applicable withholding agent shall be authorized to take all actions necessary
or appropriate to comply with such withholding and reporting requirements, including liquidating a portion of the distribution to be made
under the Plan to generate sufficient funds to pay applicable withholding taxes, withholding distributions pending receipt of information
necessary to facilitate such distributions, or establishing any other mechanisms they believe are reasonable and appropriate. The Debtors
and the Reorganized Debtors reserve the right to allocate all distributions made under the Plan in compliance with all applicable wage
garnishments, alimony, child support, and other spousal awards, Liens, and encumbrances.
Distributions in respect of
Allowed Claims shall be allocated first to the principal amount of such Claims (as determined for federal income tax purposes) and then,
to the extent the consideration exceeds the principal amount of the Claims, to any portion of such Claims for accrued but unpaid interest.
| H. | No Postpetition Interest on Claims. |
Unless otherwise specifically
provided for in the Plan, the Confirmation Order, or another order of the Court, or required by applicable bankruptcy and non-bankruptcy
law, postpetition interest shall not accrue or be paid on any prepetition Claims (other than ABL Claims (if any) and Prepetition Term
Loan Claims) against the Debtors, and no Holder of a prepetition Claim (other than ABL Claims (if any) and Prepetition Term Loan Claims)
against the Debtors shall be entitled to interest accruing on or after the Petition Date on any such prepetition Claim. Additionally,
and without limiting the foregoing, interest shall not accrue or be paid on any Disputed Claim with respect to the period from the Plan
Effective Date to the date a final distribution is made on account of such Disputed Claim, if and when such Disputed Claim becomes an
Allowed Claim.
| I. | Foreign Currency Exchange Rate. |
Except as otherwise provided
in a Court order, as of the Plan Effective Date, any Claim asserted in currency other than U.S. dollars shall be automatically deemed
converted to the equivalent U.S. dollar value using the exchange rate for the applicable currency as published in The Wall Street Journal
(National Edition), on the Plan Effective Date.
| J. | Setoffs and Recoupment. |
Except as expressly provided
in this Plan, each Reorganized Debtor may, pursuant to section 553 of the Bankruptcy Code, set off and/or recoup against any Plan Distributions
to be made on account of any Allowed Claim, any and all claims, rights, and Causes of Action that such Reorganized Debtor may hold against
the Holder of such Allowed Claim to the extent such setoff or recoupment is either (1) agreed in amount among the relevant Reorganized
Debtor(s) and Holder of Allowed Claim or (2) otherwise adjudicated by the Court or another court of competent jurisdiction;
provided that neither the failure to effectuate a setoff or recoupment nor the allowance of any Claim hereunder shall constitute
a waiver or release by a Reorganized Debtor or its successor of any and all claims, rights, and Causes of Action that such Reorganized
Debtor or its successor may possess against the applicable Holder. In no event shall any Holder of Claims against, or Interests in, the
Debtors be entitled to recoup any such Claim or Interest against any claim, right, or Cause of Action of the Debtors or the Reorganized
Debtors, as applicable, unless such Holder actually has performed such recoupment and provided notice thereof in writing to the Debtors
in accordance with Article XII.G of the Plan on or before the Plan Effective Date, notwithstanding any indication in any Proof of
Claim or otherwise that such Holder asserts, has, or intends to preserve any right of recoupment.
| K. | Claims Paid or Payable by Third Parties. |
1. Claims
Paid by Third Parties.
The Debtors or the Reorganized
Debtors, as applicable, shall reduce in full a Claim, and such Claim shall be disallowed without a Claim objection having to be Filed
and without any further notice to or action, order, or approval of the Court, to the extent that the Holder of such Claim receives payment
in full on account of such Claim from a party that is not a Debtor or a Reorganized Debtor. Subject to the last sentence of this paragraph,
to the extent a Holder of a Claim receives a distribution on account of such Claim and receives payment from a party that is not a Debtor
or a Reorganized Debtor on account of such Claim, such Holder shall, within fourteen (14) days of receipt thereof, repay or return the
distribution to the applicable Reorganized Debtor, to the extent the Holder’s total recovery on account of such Claim from the third
party and under the Plan exceeds the amount of such Claim as of the date of any such distribution under the Plan. The failure of such
Holder to timely repay or return such distribution shall result in the Holder owing the applicable Reorganized Debtor annualized interest
at the Federal Judgment Rate on such amount owed for each Business Day after the fourteen (14)-day grace period specified above until
the amount is repaid.
2. Claims
Payable by Third Parties.
No distributions under the
Plan shall be made on account of an Allowed Claim that is payable pursuant to one of the Debtors’ insurance policies until the Holder
of such Allowed Claim has exhausted all remedies with respect to such insurance policy. To the extent that one or more of the Debtors’
insurers agrees to satisfy in full or in part a Claim (if and to the extent adjudicated by a court of competent jurisdiction), then immediately
upon such insurers’ agreement, the applicable portion of such Claim may be expunged without a Claim objection having to be Filed
and without any further notice to or action, order, or approval of the Court.
3. Applicability
of Insurance Policies.
Except as otherwise provided
in the Plan, distributions to Holders of Allowed Claims shall be in accordance with the provisions of any applicable insurance policy.
Nothing contained in the Plan shall constitute or be deemed a waiver of any Cause of Action that the Debtors or any Entity may hold against
any other Entity, including insurers under any policies of insurance, nor shall anything contained herein constitute or be deemed a waiver
by such insurers of any defenses, including coverage defenses, held by such insurers.
Article VII.
PROCEDURES FOR RESOLVING CONTINGENT,
UNLIQUIDATED, AND DISPUTED CLAIMS
A. Disputed
Claims Process.
Notwithstanding section 502(a) of
the Bankruptcy Code, and in light of the Unimpaired status of all Allowed General Unsecured Claims under the Plan, except as required
by the Plan, Holders of Claims need not File Proofs of Claim, and the Reorganized Debtors and the Holders of Claims shall determine, adjudicate,
and resolve any disputes over the validity and amounts of such Claims in the ordinary course of business as if the Chapter 11 Cases
had not been commenced except that (unless expressly waived pursuant to the Plan) the Allowed amount of such Claims shall be subject to
the limitations or maximum amounts permitted by the Bankruptcy Code, including sections 502 and 503 of the Bankruptcy Code,
to the extent applicable. All Proofs of Claim filed in these Chapter 11 Cases shall be considered objected to and Disputed without
further action by the Debtors. Upon the Plan Effective Date, all Proofs of Claim filed against the Debtors, regardless of the time of
filing, and including Proofs of Claim filed after the Plan Effective Date, shall be deemed withdrawn and expunged, other than as provided
below. Notwithstanding anything in this Plan to the contrary, disputes regarding the amount of any Cure pursuant to section 365 of
the Bankruptcy Code and Claims that the Debtors seek to have determined by the Court shall in all cases be determined by the Court.
For
the avoidance of doubt, there is no requirement to File a Proof of Claim (or move the Court for allowance) to be an Allowed Claim or Allowed
Interest, as applicable, under the Plan. Notwithstanding the foregoing, Entities must File Cure objections as set forth in Article V.C
of the Plan to the extent such Entity disputes the amount of the Cure paid or proposed to be paid by the Debtors or the Reorganized
Debtors to a counterparty. Except as otherwise provided herein, all Proofs of Claim filed after the Plan Effective Date shall be disallowed
and forever barred, estopped, and enjoined from assertion, and shall not be enforceable against any Reorganized Debtor, without the need
for any objection by the Reorganized Debtors or any further notice to or action, order, or approval of the Court.
After the Plan Effective Date
and subject to the terms of this Plan, each of the Reorganized Debtors shall have and retain any and all rights and defenses such Debtor
had with respect to any Claim or Interest immediately prior to the Plan Effective Date. The Debtors may affirmatively determine to deem
Unimpaired Claims Allowed to the same extent such Claims would be Allowed under applicable non-bankruptcy law.
| C. | Claims Administration Responsibilities. |
Except as otherwise specifically
provided in the Plan, after the Plan Effective Date, the Reorganized Debtors shall have the sole authority to: (1) File, withdraw,
or litigate to judgment objections to Claims or Interests; (2) settle or compromise any Disputed Claim without any further notice
to or action, order, or approval by the Court; and (3) administer and adjust the Claims Register to reflect any such settlements
or compromises without any further notice to or action, order, or approval by the Court. For the avoidance of doubt, except as otherwise
provided herein, from and after the Plan Effective Date, each Reorganized Debtor shall have and retain any and all rights and defenses
such Debtor had immediately prior to the Plan Effective Date with respect to any Disputed Claim or Interest.
Any objections to Claims and
Interests other than General Unsecured Claims shall be served and filed on or before the 180th day after the Plan Effective Date or by
such later date as ordered by the Court. All Claims and Interests other than General Unsecured Claims not objected to by the end of such
180-day period shall be deemed Allowed unless such period is extended upon approval of the Court.
Notwithstanding the foregoing,
the Debtors and Reorganized Debtors shall be entitled to dispute and/or otherwise object to any General Unsecured Claim in accordance
with applicable nonbankruptcy law. If the Debtors, or Reorganized Debtors dispute any General Unsecured Claim, such dispute shall be determined,
resolved, or adjudicated, as the case may be, in the manner as if the Chapter 11 Cases had not been commenced. In any action or proceeding
to determine the existence, validity, or amount of any General Unsecured Claim, any and all claims or defenses that could have been asserted
by the applicable Debtor(s) or the Entity holding such General Unsecured Claim are preserved as if the Chapter 11 Cases had not been
commenced.
| D. | Adjustment to Claims or Interests without Objection. |
Any duplicate Claim or Interest
or any Claim or Interest that has been paid, satisfied, amended, or superseded may be adjusted or expunged on the Claims Register by the
Reorganized Debtors without the Reorganized Debtors’ having to File an application, motion, complaint, objection, or any other legal
proceeding seeking to object to such Claim or Interest and without any further notice to or action, order, or approval of the Court.
| E. | Disallowance of Claims or Interests. |
All Claims and Interests of
any Entity from which property is sought by the Debtors under sections 542, 543, 550, or 553 of the Bankruptcy Code or that the Debtors
or the Reorganized Debtors allege is a transferee of a transfer that is avoidable under sections 522(f), 522(h), 544, 545, 547, 548, 549,
or 724(a) of the Bankruptcy Code shall be disallowed if: (a) the Entity, on the one hand, and the Debtors or the Reorganized
Debtors, as applicable, on the other hand, agree or the Court has determined by Final Order that such Entity or transferee is liable to
turn over any property or monies under any of the aforementioned sections of the Bankruptcy Code; and (b) such Entity or transferee
has failed to turn over such property by the date set forth in such agreement or Final Order.
Article VIII.
SETTLEMENT, RELEASE, INJUNCTION, AND RELATED PROVISIONS
| A. | Discharge of Claims and Termination of Interests. |
Pursuant
to section 1141(d) of the Bankruptcy Code, and except as otherwise specifically provided in the Plan, the Confirmation Order, the
Definitive Documentation, or in any contract, instrument, or other agreement or document created or entered into pursuant to the Plan,
the distributions, rights, and treatment that are provided in the Plan shall be in complete satisfaction, discharge, and release, effective
as of the Plan Effective Date, of Claims (including any Intercompany Claims resolved or compromised after the Plan Effective Date by the
Reorganized Debtors and, to the extent any such Intercompany Claim constitutes ABL Priority Collateral (as defined in the Intercreditor
Agreement (as defined in the DIP Orders)), subject to the written consent of the ABL DIP Agent or the ABL Exit Facility Agent, as applicable,
in its sole, but reasonable, discretion), Interests, and Causes of Action of any nature whatsoever, including any interest accrued
on Claims or Interests from and after the Petition Date, whether known or unknown, against, liabilities of, Liens on, obligations of,
rights against, and Interests in, the Debtors or any of their assets or properties, regardless of whether any property shall have been
distributed or retained pursuant to the Plan on account of such Claims or Interests, including demands, liabilities, and Causes of Action
that arose before the Plan Effective Date, any liability (including withdrawal liability) to the extent such Claims or Interests relate
to services performed by employees of the Debtors prior to the Plan Effective Date and that arise from a termination of employment, any
contingent or non-contingent liability on account of representations or warranties issued on or before the Plan Effective Date, and all
debts of the kind specified in sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, in each case whether or not: (a) a
Proof of Claim based upon such debt or right is Filed or deemed Filed pursuant to section 501 of the Bankruptcy Code; (b) a Claim
or Interest based upon such debt, right, or Interest is Allowed pursuant to section 502 of the Bankruptcy Code; or (c) the Holder
of such a Claim or Interest has accepted the Plan. The Confirmation Order shall be a judicial determination of the discharge of all Claims
and Interests subject to the occurrence of the Plan Effective Date.
Notwithstanding anything to
the contrary in this Article VIII, elsewhere in this Plan, or in the Confirmation Order, nothing in the Plan or Confirmation Order
shall release, modify, or otherwise limit any Claims or Causes of Action asserted or assertable by Fortress against any Fortress Non-Released
Party. No Claims or Causes of Action of Fortress against Fortress Non-Released Parties shall be in any way released, waived, impaired,
modified, or enjoined by this Plan or the Confirmation Order, and Fortress’s rights to pursue such claims and Causes of Action shall
be unaffected hereby.
Except as otherwise provided
in the Exit Facility Documents, the Plan, the Confirmation Order, or any contract, instrument, release, or other agreement or document
created pursuant to the Plan, on the Plan Effective Date and concurrently with the applicable distributions made pursuant to the Plan
and, in the case of a Secured Claim, satisfaction in full of the portion of the Secured Claim that is Allowed as of the Plan Effective
Date, except for Other Secured Claims that the Debtors elect to reinstate in accordance with Article III.B.1 hereof, all mortgages,
deeds of trust, Liens, pledges, or other security interests against any property of the Estates shall be fully released and discharged,
and all of the right, title, and interest of any Holder of such mortgages, deeds of trust, Liens, pledges, or other security interests
shall revert to the Reorganized Debtors and their successors and assigns. Any Holder of such Secured Claim (and the applicable agents
for such Holder) shall be authorized and directed, at the sole cost and expense of the Reorganized Debtors, to release any collateral
or other property of any Debtor (including any cash collateral and possessory collateral) held by such Holder (and the applicable agents
for such Holder), and to take such actions as may be reasonably requested by the Reorganized Debtors to evidence the release of such Lien,
including the execution, delivery, and filing or recording of such releases. The presentation or Filing of the Confirmation Order to or
with any federal, state, provincial, or local agency or department shall constitute good and sufficient evidence of, but shall not be
required to effect, the termination of such Liens.
| C. | Releases by the Debtors. |
Notwithstanding
anything contained in the Plan to the contrary, pursuant to section 1123(b) of the Bankruptcy Code, in exchange for good and valuable
consideration, the adequacy of which is hereby confirmed, on and after the Plan Effective Date, each Released Party and each ABL Released
Party is deemed to be, hereby conclusively, absolutely, unconditionally, irrevocably, and forever released and discharged by the Debtors,
the Reorganized Debtors, and their Estates, in each case on behalf of themselves and their respective successors, assigns,
and representatives, and any and all other Entities who may purport to assert any Cause of Action, directly or derivatively, by, through,
for, or because of the foregoing Entities, from any and all Claims and Causes of Action, including any derivative claims, asserted on
behalf of the Debtors, whether known or unknown, foreseen or unforeseen, matured or unmatured, existing or hereafter arising, in law,
equity, contract, tort, or otherwise, that the Debtors, the Reorganized Debtors, or their Estates would have been legally entitled to
assert in their own right (whether individually or collectively) or on behalf of the Holder of any Claim against, or Interest in, a Debtor
or other Entity, or that any Holder of any Claim against, or Interest in, a Debtor or other Entity could have asserted on behalf of the
Debtors, based on or relating to, or in any manner arising from, in whole or in part, the Debtors (including the capital structure, management,
ownership, or operation thereof), the assertion or enforcement of rights and remedies against the Debtors, the Debtors’ in- or out-of-court
restructuring efforts, intercompany transactions between or among a Debtor and another Debtor, the De-SPAC Transaction, the Chapter 11
Cases, the formulation, preparation, dissemination, negotiation, execution, or Filing of the Restructuring Support Agreement, the Disclosure
Statement, the DIP Credit Agreements, the Prepetition Credit Agreements, the DIP-to-Exit Commitment Letter, the DIP-to-Exit Allocation
Process, the Exit Facilities, the Plan (including, for the avoidance of doubt, the Plan Supplement), the De-SPAC Transaction, or any Restructuring
Transactions, contract, instrument, release, transaction, or other agreement or document (including any legal opinion requested by any
Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the reliance by any Released
Party or ABL Released Party on the Plan or the Confirmation Order in lieu of such legal opinion) created or entered into in connection
with the Restructuring Support Agreement, the Disclosure Statement, the DIP Credit Agreements, the Prepetition Credit Agreements, the
DIP-to-Exit Commitment Letter, the DIP-to-Exit Allocation Process, the Exit Facility Documents, the Warrant Agreement, the De-SPAC Transaction,
or the Plan, the Plan Supplement, the Filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration
and implementation of the Plan, including the issuance or distribution of Securities pursuant to the Plan, or the distribution of property
under the Plan or any other related agreement, or upon any other act or omission, transaction, agreement, event, or other occurrence related
or relating to any of the foregoing taking place on or before the Plan Effective Date. Notwithstanding anything to the contrary in the
foregoing, the releases set forth above do not release (i) any post-Plan Effective Date obligations of any party or Entity under
the Plan, the Confirmation Order, any Restructuring Transactions, or any document, instrument, or agreement (including those set forth
in the Plan Supplement) executed to implement the Plan, including the DIP Documents, the Exit Facility Documents, the Warrant Agreement,
or any Claim or obligation arising under the Plan or (ii) any claim or Cause of Action arising from an act or omission that is determined
by a Final Order to have constituted actual fraud or willful misconduct.
Entry of the Confirmation
Order shall constitute the Court’s approval, pursuant to Bankruptcy Rule 9019, of the Debtor Release, which includes by reference
each of the related provisions and definitions contained in the Plan and, further, shall constitute the Court’s finding that the
Debtor Release is: (a) in exchange for the good and valuable consideration provided by the Released Parties and ABL Released Parties,
including, without limitation, the Released Parties’ and ABL Released Parties’ contributions to facilitating the Restructuring
Transactions and implementing the Plan; (b) a good faith settlement and compromise of the Claims released by the Debtor Release;
(c) in the best interests of the Debtors and all Holders of Claims and Interests; (d) fair, equitable, and reasonable; (e) given
and made after due notice and opportunity for hearing; and (f) a bar to any of the Debtors, the Reorganized Debtors, or the Debtors’
Estates asserting any Claim or Cause of Action released pursuant to the Debtor Release.
| D. | Releases by Holders of Claims and Interests. |
Except
as otherwise expressly set forth in this Plan or the Confirmation Order, on and after the Plan Effective Date, in exchange for good and
valuable consideration, the adequacy of which is hereby confirmed, each Released Party is, and is deemed to be, hereby conclusively, absolutely,
unconditionally, irrevocably, and forever, released and discharged by each Releasing Party from any and all Causes of Action, whether
known or unknown, foreseen or unforeseen, matured or unmatured, existing or hereafter arising, in law, equity, contract, tort, or otherwise,
including any derivative claims asserted on behalf of the Debtors, that such Entity would have been legally entitled to assert (whether
individually or collectively), based on or relating to, or in any manner arising from, in whole or in part, the Debtors (including the
capital structure, management, ownership, or operation thereof), the Debtors’ in- or out-of-court restructuring efforts, intercompany
transactions between or among a Debtor and another Debtor, the De-SPAC Transaction, the Chapter 11 Cases, the formulation, preparation,
dissemination, negotiation, execution, or Filing of the Restructuring Support Agreement, the Disclosure Statement, the DIP
Credit Agreements, the Prepetition Credit Agreements, the DIP-to-Exit Commitment Letter, the DIP-to-Exit Allocation Process, the Exit
Facilities, the Plan (including, for the avoidance of doubt, the Plan Supplement), or any Restructuring Transactions, contract, instrument,
release, transaction, or other agreement or document (including any legal opinion requested by any Entity regarding any transaction, contract,
instrument, document, or other agreement contemplated by the Plan or the reliance by any Released Party on the Plan or the Confirmation
Order in lieu of such legal opinion) relating to any of the foregoing, created or entered into in connection with the Restructuring Support
Agreement, the Disclosure Statement, the DIP Credit Agreements, the Prepetition Credit Agreements, the DIP-to-Exit Commitment Letter,
the DIP-to-Exit Allocation Process, the Exit Facility Documents, the Warrant Agreement, the De-SPAC Transaction, the Plan, the Plan Supplement,
before or during the Chapter 11 Cases, the Filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation,
the administration and implementation of the Plan, including the issuance or distribution of Securities pursuant to the Plan, or the distribution
of property under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or
other occurrence related or relating to any of the foregoing taking place on or before the Plan Effective Date. Notwithstanding anything
to the contrary in the foregoing, the releases set forth above do not release (i) any post-Plan Effective Date obligations of any
party or Entity under the Plan, the Confirmation Order, any Restructuring Transactions, or any document, instrument, or agreement (including
those set forth in the Plan Supplement) executed to implement the Plan, including the DIP Documents, the Exit Facility Documents, the
Warrant Agreement, or any Claim or obligation arising under the Plan, or (ii) any claim or Cause of Action arising from an act or
omission that is determined by a Final Order to have constituted actual fraud or willful misconduct.
Except
as expressly set forth in the Plan or the Confirmation Order, effective on the Plan Effective Date, pursuant to section 1123(b) of
the Bankruptcy Code, in exchange for good and valuable consideration, the adequacy of which is hereby confirmed, on and after the Plan
Effective Date, to the fullest extent allowed by applicable law, each (a) Released Party is hereby deemed conclusively, absolutely,
unconditionally, irrevocably, and forever released and discharged by each and all of the ABL Releasing Parties, and (b) ABL Released
Party is hereby deemed conclusively, absolutely, unconditionally, irrevocably, and forever released and discharged by each and all of
the Releasing Parties, from any and all Causes of Action, rights, suits, damages, remedies and liabilities whatsoever based
on or relating to, or in any manner arising from, in whole or in part, the Debtors (including the capital structure, management, ownership,
or operation thereof), whether known or unknown, foreseen or unforeseen, matured or unmatured, liquidated or unliquidated, fixed or contingent,
accrued or unaccrued, existing or hereinafter arising, in law (or any applicable rule, statute, regulation, treaty, right, duty or requirement),
equity, contract, tort, or otherwise, including any derivative claims, asserted or assertable on behalf of any of the Debtors, the Reorganized
Debtors, their Estates, or their Affiliates, that such Entity would have been legally entitled to assert in their own right (whether individually
or collectively) or on behalf of the Holder of any Claim against, or Interest in, a Debtor or any other Entity, or that any Holder of
any Claim against, or Interest in, a Debtor or other Entity could have asserted on behalf of the Debtors, based on or relating to, or
in any manner arising from, in whole or in part, the Debtors, the Reorganized Debtors, or their Estates (including the management, ownership,
or operation thereof), the Debtors’ in- or out-of-court restructuring efforts, the Plan, the Filing of the Chapter 11 Cases, the
pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, the ABL Credit Agreement, the
ABL DIP Credit Agreement, the Term Loan Credit Agreement, the Term Loan DIP Credit Agreement, the DIP-to-Exit Commitment Letter, the DIP-to-Exit
Allocation Process, or any Restructuring Transaction, or upon any other act, or omission, transaction, agreement, event, or other occurrence
related or relating to any of the foregoing taking place on or before the Plan Effective Date. Notwithstanding anything to the contrary
in the foregoing, (i) the mutual releases set forth above do not release (x) any obligations arising on or after the Plan Effective
Date of any party or Entity under the Plan, the Confirmation Order, any Restructuring Transaction, any document, instrument, or agreement
(including those set forth in the Plan Supplement) executed to implement the Plan, including the ABL DIP Documents, the ABL Exit Facility
Documents, or any Claim or obligation arising under the Plan or (y) any claim or Cause of Action arising from an act or omission
that is determined by a Final Order to have constituted actual fraud or willful misconduct, and (ii) the releases by the ABL Releasing
Parties set forth above do not release any Excluded ABL Obligations.
Entry of the Confirmation
Order shall constitute the Court’s approval, pursuant to Bankruptcy Rule 9019, of the Third-Party Release, which includes by
reference each of the related provisions and definitions contained herein and, further, shall constitute the Court’s finding that
the Third-Party Release is: (a) consensual; (b) essential to the Confirmation of the Plan; (c) given in exchange for the
good and valuable consideration provided by the Released Parties and Released ABL Parties; (d) a good faith settlement and compromise
of the Claims released by the Third-Party Release; (e) in the best interests of the Debtors and their Estates; (f) fair, equitable,
and reasonable; (g) given and made after due notice and opportunity for hearing; and (h) a bar to any of the Releasing Parties
asserting any claim or Cause of Action released pursuant to the Third-Party Release.
Except
as otherwise specifically provided in the Plan or the Confirmation Order, no Exculpated Party shall have or incur liability for, and each
Exculpated Party is hereby released and exculpated from, any Cause of Action for any claim arising from the Petition Date through the
Plan Effective Date related to any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, the formulation,
preparation, dissemination, negotiation, filing, or termination of the Restructuring Support Agreement and related prepetition
transactions, the Disclosure Statement, the Plan, the Plan Supplement, the DIP Documents, the Warrant Agreement, and the Exit Facility
Documents or any Restructuring Transactions, contract, instrument, release or other agreement or document (including any legal opinion
requested by any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the
reliance by any Released Party on the Plan or the Confirmation Order in lieu of such legal opinion) created or entered into before or
during the Chapter 11 Cases, any preference, fraudulent transfer, or other avoidance claim arising pursuant to chapter 5 of the Bankruptcy
Code or other applicable law, the Filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration
and implementation of the Plan, including the issuance or distribution of Securities pursuant to the Plan, or the distribution of property
under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence
taking place on or before the Plan Effective Date, except for claims related to any act or omission that is determined in a Final Order
by a court of competent jurisdiction to have constituted actual fraud, willful misconduct, or gross negligence, but in all respects such
Entities shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to
the Plan.
The Exculpated Parties
and other parties set forth above have, and upon Confirmation of the Plan shall be deemed to have, participated in good faith and in compliance
with the applicable laws with regard to the solicitation of votes and distribution of consideration, including securities, pursuant to
the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable
law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the
Plan.
Except as otherwise expressly
provided in the Plan or the Confirmation Order or for obligations issued or required to be paid pursuant to the Plan or the Confirmation
Order, all Entities who have held, hold, or may hold Claims or Interests that have been released, discharged, or are subject to exculpation
are permanently enjoined, from and after the Plan Effective Date, from taking any of the following actions against, as applicable, the
Debtors, the Reorganized Debtors, the Exculpated Parties, or the Released Parties, or the ABL Released Parties: (1) commencing or
continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any such Claims
or Interests; (2) enforcing, attaching, collecting, or recovering by any manner or means any judgment, award, decree, or order against
such Entities on account of or in connection with or with respect to any such Claims or Interests; (3) creating, perfecting, or enforcing
any encumbrance of any kind against such Entities or the property or the Estates of such Entities on account of or in connection with
or with respect to any such Claims or Interests; (4) asserting any right of setoff, subrogation, or recoupment of any kind against
any obligation due from such Entities or against the property of such Entities on account of or in connection with or with respect to
any such Claims or Interests unless such Holder has Filed a motion requesting the right to perform such setoff on or before the Plan Effective
Date, and notwithstanding an indication of a Claim or Interest or otherwise that such Holder asserts, has, or intends to preserve any
right of setoff pursuant to applicable law or otherwise; or (5) commencing or continuing in any manner any action or other proceeding
of any kind on account of or in connection with or with respect to any such Claims or Interests released or settled pursuant to the Plan.
No Person or Entity may
commence or pursue a Claim or Cause of Action or Covered Claim, as applicable, of any kind against the Debtors, the Reorganized Debtors,
the Exculpated Parties, the Released Parties, the ABL Released Parties, or the Covered Parties, as applicable, that relates to or is reasonably
likely to relate to any act or omission in connection with, relating to, or arising out of a Claim or Cause of Action or Covered Claim,
as applicable, subject to Article VIII.C, Article VIII.D, and Article VIII.E hereof, without the Court (i) first determining,
after notice and a hearing, that such Claim or Cause of Action or Covered Claim, as applicable, represents a colorable Claim of any kind,
and (ii) specifically authorizing such Person or Entity to bring such Claim or Cause of Action or Covered Claim, as applicable, against
any such Debtor, Reorganized Debtor, Exculpated Party, Released Party, ABL Released Party, or Covered Party, as applicable.
Upon entry of the Confirmation
Order, all Holders of Claims and Interests and their respective current and former employees, agents, officers, directors, principals,
and direct and indirect affiliates shall be enjoined from taking any actions to interfere with the implementation or Consummation of this
Plan. Except as otherwise set forth in the Confirmation Order, each Holder of an Allowed Claim or Allowed Interest, as applicable, by
accepting, or being eligible to accept, distributions under or Reinstatement of such Claim or Interest, as applicable, pursuant to this
Plan, shall be deemed to have consented to the injunction provisions set forth in this Article VIII.F.
| G. | Protections Against Discriminatory Treatment. |
Consistent with section 525
of the Bankruptcy Code and the Supremacy Clause of the U.S. Constitution, all Entities, including Governmental Units, shall not discriminate
against the Reorganized Debtors or deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant
to, condition such a grant to, or discriminate with respect to such a grant against, the Reorganized Debtors, or another Entity with whom
the Reorganized Debtors have been associated, solely because each Debtor has been a Debtor under chapter 11 of the Bankruptcy Code, has
been insolvent before the commencement of the Chapter 11 Cases (or during the Chapter 11 Cases but before the Debtors are granted
or denied a discharge), or has not paid a debt that is dischargeable in the Chapter 11 Cases.
On and after the Plan Effective
Date, the Reorganized Debtors may maintain documents in accordance with their standard document retention policy, as may be altered, amended,
modified, or supplemented by the Reorganized Debtors.
| I. | Reimbursement or Contribution. |
If the Court disallows a Claim
for reimbursement or contribution of an Entity pursuant to section 502(e)(1)(B) of the Bankruptcy Code, then to the extent that
such Claim is contingent as of the time of allowance or disallowance, such Claim shall be forever disallowed and expunged notwithstanding
section 502(j) of the Bankruptcy Code, unless prior to the Confirmation Date: (1) such Claim has been adjudicated as non-contingent
or (2) the relevant Holder of a Claim has Filed a non-contingent Proof of Claim on account of such Claim and a Final Order has been
entered prior to the Confirmation Date determining such Claim as no longer contingent.
Article IX.
CONDITIONS PRECEDENT TO CONSUMMATION OF THE PLAN
| A. | Conditions Precedent to the Plan Effective Date. |
It shall be a condition to
the Plan Effective Date of the Plan that the following conditions shall have been satisfied or waived pursuant to the provisions of Article IX.B
hereof:
1. the
Court shall have entered the Confirmation Order in form and substance consistent with the Restructuring Support Agreement, and the Confirmation
Order shall have become a Final Order;
2. the
Court shall have entered the DIP Orders and the Final DIP Order shall be in full force and effect;
3. the
Debtors shall have obtained all authorizations, consents, regulatory approvals, rulings, or documents that are necessary to implement
and effectuate the Plan;
4. the
final version of the Plan Supplement and all of the schedules, documents, and exhibits contained therein shall have been Filed in a manner
consistent in all material respects with the Restructuring Support Agreement and the Plan;
5. all
professional fees and expenses of retained Professionals required to be approved by the Court shall have been paid in full or amounts
sufficient to pay such fees and expenses after the Plan Effective Date have been placed in the Professional Fee Escrow Account pending
approval by the Court;
6. the
Restructuring Support Agreement shall remain in full force and effect;
7. all
documents contemplated by the Restructuring Support Agreement to be executed on or before the Plan Effective Date shall have been executed
and delivered;
8. entry
into the Exit Facility Documents shall have been approved, all conditions precedent to the consummation of such Exit Facility Documents
shall have been waived or satisfied in accordance with the terms thereof, and the closing of such Exit Facility Documents shall have occurred;
9. entry
into the Warrant Agreement shall have been approved, all conditions precedent to the consummation of such Warrant Agreement shall have
been waived or satisfied in accordance with the terms thereof, the closing of such Warrant Agreement shall have occurred, and the Warrants
shall have been issued by Reorganized QualTek;
10. the
New Equity Interests and Warrants shall have been issued by Reorganized QualTek, and the New Organizational Documents shall be in effect
in accordance with consent rights set forth herein and in the Restructuring Support Agreement;
11. notwithstanding
anything to the contrary herein, to the extent invoiced, the payment in full in Cash of all (i) Restructuring Expenses and (ii) Convertible
Notes Trustee Fees and Expenses (subject to a cap of $225,000); and
12. the
Debtors shall have otherwise substantially consummated the Restructuring Transactions, and all transactions contemplated herein, in a
manner consistent in all respects with the Restructuring Support Agreement (including, for the avoidance of doubt, the consent, approval,
and consultation rights set forth therein) and the Plan.
The conditions to Confirmation
and Consummation set forth in this Article IX may be waived by the Debtors only with the reasonable consent (in each case with email
being sufficient) of the Required Consenting Term Lenders, the Required Consenting Convertible Noteholders, and the Required Consenting
ABL Lenders, without notice, leave, or order of the Court or any formal action other than proceedings to confirm or consummate the Plan;
provided that the condition set forth in Article IX.A.11 shall only be waivable with respect to the Restructuring Expenses
or other fees and expenses of advisors to any person by such person on whose behalf the advisors were engaged.
| C. | Effect of Failure of Conditions. |
If Consummation does not occur,
the Plan shall be null and void in all respects and nothing contained in the Plan or the Disclosure Statement shall: (1) constitute
a waiver or release of any Claims by the Debtors, Claims, or Interests; (2) prejudice in any manner the rights of the Debtors, any
Holders of Claims or Interests, or any other Entity; or (3) constitute an admission, acknowledgment, offer, or undertaking by the
Debtors, any Holders of Claims or Interests, or any other Entity in any respect; provided that all provisions of the Restructuring
Support Agreement that survive termination thereof shall remain in effect in accordance with the terms thereof.
Article X.
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN
| A. | Modification and Amendments. |
Except
as otherwise specifically provided in the Plan and to the extent permitted by the Restructuring Support Agreement (and subject to any
consent rights set forth therein), the Debtors reserve the right to modify the Plan, whether such modification is material or immaterial,
and seek Confirmation consistent with the Bankruptcy Code and, as appropriate, not resolicit votes on such modified Plan, subject to the
reasonable consent of the Required Consenting ABL Lenders, the Required Consenting Term Lenders, and the Required Consenting Convertible
Noteholders. Subject to those restrictions on modifications set forth in the Plan and the requirements of section 1127 of
the Bankruptcy Code, Rule 3019 of the Bankruptcy Rules, and, to the extent applicable, sections 1122, 1123, and 1125 of the Bankruptcy
Code, each of the Debtors expressly reserves its respective rights to revoke or withdraw, or to alter, amend, or modify the Plan with
respect to such Debtor, one or more times after Confirmation and, to the extent necessary, may initiate proceedings in the Court to so
alter, amend, or modify the Plan or remedy any defect or omission or reconcile any inconsistencies in the Plan, the Disclosure Statement,
or the Confirmation Order in such manner as may be necessary to carry out the purposes and intent of the Plan.
| B. | Effect of Confirmation on Modifications. |
Entry of the Confirmation
Order shall mean that all modifications or amendments to the Plan since the solicitation thereof are approved pursuant to section 1127(a) of
the Bankruptcy Code and do not require additional disclosure or resolicitation under Bankruptcy Rule 3019.
| C. | Revocation or Withdrawal of Plan. |
To the extent permitted by
the Restructuring Support Agreement (including the consent, approval, and consultation rights set forth therein), the Debtors reserve
the right to revoke or withdraw the Plan prior to the Confirmation Date and to File subsequent plans of reorganization. If the Debtors
revoke or withdraw the Plan, or if Confirmation or Consummation does not occur, then: (1) the Plan shall be null and void in all
respects; (2) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain of any Claim
or Interest or Class of Claims or Interests), assumption or rejection of Executory Contracts or Unexpired Leases effected under the
Plan, and any document or agreement executed pursuant to the Plan, shall be deemed null and void; and (3) nothing contained in the
Plan shall: (a) constitute a waiver or release of any Claims or Interests; (b) prejudice in any manner the rights of such Debtor
or any other Entity; or (c) constitute an admission, acknowledgement, offer, or undertaking of any sort by such Debtor or any other
Entity.
Article XI.
RETENTION OF JURISDICTION
Notwithstanding the entry
of the Confirmation Order and the occurrence of the Plan Effective Date, on and after the Plan Effective Date, the Court shall retain
exclusive jurisdiction over all matters arising out of, or relating to, the Chapter 11 Cases and the Plan pursuant to sections 105(a) and
1142 of the Bankruptcy Code, including jurisdiction to:
1. allow,
disallow, determine, liquidate, classify, estimate, or establish the priority, secured or unsecured status, or amount of any Claim or
Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any and all objections
to the secured or unsecured status, priority, amount, or allowance of Claims or Interests;
2. decide
and resolve all matters related to the granting and denying, in whole or in part, any applications for allowance of compensation or reimbursement
of expenses to Professionals authorized pursuant to the Bankruptcy Code or the Plan;
3. resolve
any matters related to: (a) the assumption, assumption and assignment, or rejection of any Executory Contract or Unexpired Lease
to which a Debtor is party or with respect to which a Debtor may be liable and to hear, determine, and, if necessary, liquidate, any Claims
arising therefrom, including Cure pursuant to section 365 of the Bankruptcy Code; (b) any potential contractual obligation under
any Executory Contract or Unexpired Lease that is assumed; (c) the Reorganized Debtors amending, modifying, or supplementing, after
the Plan Effective Date, pursuant to Article V hereof, any Executory Contracts or Unexpired Leases to the list of Executory Contracts
and Unexpired Leases to be assumed or rejected or otherwise; and (d) any dispute regarding whether a contract or lease is or was
executory or expired;
4. ensure
that distributions, including the Warrants, to Holders of Allowed Claims and Allowed Interests (as applicable) are accomplished
pursuant to the provisions of the Plan and adjudicate any and all disputes arising from or relating to distributions under the Plan;
5. adjudicate,
decide, or resolve any motions, adversary proceedings, contested or litigated matters, and any other matters, and grant or deny any applications
involving a Debtor that may be pending on the Plan Effective Date;
6. adjudicate,
decide, or resolve any and all matters related to section 1141 of the Bankruptcy Code;
7. enter
and implement such orders as may be necessary to execute, implement, or consummate the provisions of the Plan and all contracts, instruments,
releases, indentures, and other agreements or documents created in connection with the Plan or the Disclosure Statement;
8. enter
and enforce any order for the sale of property pursuant to sections 363, 1123, or 1146(a) of the Bankruptcy Code;
9. resolve
any cases, controversies, suits, disputes, or Causes of Action that may arise in connection with the Consummation, interpretation, or
enforcement of the Plan or any Entity’s obligations incurred in connection with the Plan;
10. issue
injunctions, enter and implement other orders, or take such other actions as may be necessary to restrain interference by any Entity with
Consummation or enforcement of the Plan;
11. resolve
any cases, controversies, suits, disputes, or Causes of Action with respect to the releases, injunctions, exculpations, and other provisions
contained in Article VIII hereof and enter such orders as may be necessary or appropriate to implement such releases, injunctions,
exculpations, and other provisions;
12. resolve
any cases, controversies, suits, disputes, or Causes of Action with respect to the repayment or return of distributions and the recovery
of additional amounts owed by the Holder of a Claim or Interest for amounts not timely repaid pursuant to Article VI.K hereof;
13. enter
and implement such orders as are necessary if the Confirmation Order is for any reason modified, stayed, reversed, revoked, or vacated;
14. determine
any other matters that may arise in connection with or relate to the Plan, the Disclosure Statement, the Confirmation Order, or any
contract, instrument, release, indenture, or other agreement or document created in connection with the Plan, the Plan Supplement, or
the Disclosure Statement, including the Restructuring Support Agreement;
15. enter
an order concluding or closing the Chapter 11 Cases;
16. adjudicate
any and all disputes arising from or relating to distributions under the Plan;
17. consider
any modifications of the Plan, to cure any defect or omission, or to reconcile any inconsistency in any Court order, including the Confirmation
Order;
18. determine
requests for the payment of Claims and Interests entitled to priority pursuant to section 507 of the Bankruptcy Code;
19. hear
and determine disputes arising in connection with the interpretation, implementation, or enforcement of the Plan or the Confirmation Order,
including disputes arising under agreements, documents, or instruments executed in connection with the Plan;
20. hear
and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy
Code;
21. hear
and determine all disputes involving the existence, nature, scope, or enforcement of any exculpations, discharges, injunctions, and releases
granted in the Plan, including under Article VIII hereof, regardless of whether such termination occurred prior to or after the Plan
Effective Date;
22. hear
and determine all disputes involving the obligations or terms of the DIP-to-Exit Allocation Process and the DIP-to-Exit Commitment Letter;
23. enforce
all orders previously entered by the Court; and
24. hear
any other matter not inconsistent with the Bankruptcy Code.
As
of the Plan Effective Date, notwithstanding anything in this Article XI to the contrary, the Exit Facility Documents shall
be governed by the jurisdictional provisions therein, and the Court shall not retain any jurisdiction with respect thereto. For the avoidance
of doubt, nothing in this Article XI shall affect the substantive rights of any party.
Article XII.
miscellaneous PROVISIONS
| A. | Immediate Binding Effect. |
Subject to Article IX.A
hereof and notwithstanding Bankruptcy Rules 3020(e), 6004(h), or 7062 or otherwise, upon the occurrence of the Plan Effective Date,
the terms of the Plan (including, for the avoidance of doubt, the Plan Supplement) shall be immediately effective and enforceable and
deemed binding upon the Debtors, the Reorganized Debtors, and any and all Holders of Claims or Interests (irrespective of whether such
Holders of Claims or Interests have, or are deemed to have, accepted the Plan), all Entities that are parties to or are subject to the
settlements, compromises, releases, discharges, and injunctions described in the Plan, each Entity acquiring property under the Plan,
and any and all non-Debtor parties to Executory Contracts and Unexpired Leases with the Debtors. All Claims against and Interests in the
Debtors shall be as fixed, adjusted, or compromised, as applicable, pursuant to this Plan regardless of whether any Holder of a Claim
or Interest has voted on this Plan.
On or before the Plan Effective
Date, and consistent in all respects with the terms of the Restructuring Support Agreement, the Debtors may File with the Court such agreements
and other documents as may be necessary to effectuate and further evidence the terms and conditions of the Plan and the Restructuring
Support Agreement. The Debtors or the Reorganized Debtors, as applicable, and all Holders of Claims or Interests receiving distributions
pursuant to the Plan and all other parties in interest shall, from time to time, prepare, execute, and deliver any agreements or documents
and take any other actions as may be necessary or advisable to effectuate the provisions and intent of the Plan.
| C. | Payment of Statutory Fees. |
All fees payable pursuant
to section 1930(a) of the Judicial Code, as determined by the Court at a hearing pursuant to section 1128 of the Bankruptcy Code,
shall be paid by each of the Reorganized Debtors (or the Disbursing Agent on behalf of each of the Reorganized Debtors) for each quarter
(including any fraction thereof) until the Chapter 11 Cases are converted, dismissed, or closed, whichever occurs first.
All monthly reports shall
be filed, and all fees due and payable pursuant to section 1930(a) of the Judicial Code shall be paid by the Debtors or the Reorganized
Debtors on the Plan Effective Date, and following the Plan Effective Date, the Reorganized Debtors shall pay such fees as they are assessed
and come due for each quarter (including any fraction thereof), and shall file quarterly reports in a form reasonably acceptable to the
U.S. Trustee. Each Debtor shall remain obligated to pay such quarterly fees to the U.S. Trustee and to file quarterly reports until the
earliest of that particular Debtor’s case being closed, dismissed, or converted to a case under chapter 7 of the Bankruptcy Code.
| D. | Statutory Committee and Cessation of Fee and Expense Payment. |
On the Plan Effective Date,
any statutory committee appointed in the Chapter 11 Cases shall dissolve and members thereof shall be released and discharged from all
rights and duties from or related to the Chapter 11 Cases. The Reorganized Debtors shall no longer be responsible for paying any fees
or expenses incurred by the members of or advisors to any statutory committees after the Plan Effective Date.
Except as expressly set forth
in the Plan, the Plan shall have no force or effect unless the Court shall enter the Confirmation Order. None of the Filing of the Plan,
any statement or provision contained in the Plan, or the taking of any action by any Debtor with respect to the Plan, the Disclosure Statement,
or the Plan Supplement shall be or shall be deemed to be an admission or waiver of any rights of any Debtor with respect to the Holders
of Claims or Interests prior to the Plan Effective Date.
| F. | Successors and Assigns. |
The rights, benefits, and
obligations of any Entity named or referred to in the Plan shall be binding on, and shall inure to the benefit of, any heir, executor,
administrator, successor or assign, Affiliate, officer, manager, director, agent, representative, attorney, beneficiary, or guardian,
if any, of each Entity.
All notices, requests, and
demands to or upon the Debtors to be effective shall be in writing (including by facsimile transmission) and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when actually delivered or, in the case of notice by facsimile transmission,
when received and telephonically confirmed, addressed as follows:
1. if
to a Debtor, to:
c/o
QualTek Services Inc.
475 Sentry Parkway E
Blue Bell, Pennsylvania 19422
Attention: Paul Kestenbaum, General Counsel
E-mail address: ####
with copies to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
Attention: Joshua Sussberg, P.C. and Christopher T. Greco, P.C.
E-mail addresses: ####,
####
-and-
Kirkland &
Ellis LLP
300 North LaSalle Street
Chicago, Illinois 60654
Attention: Jaimie Fedell
E-mail address: ####
2. if
to a Consenting Sponsor, to:
Katten
Muchin Rosenman LLP
50 Rockefeller Plaza
New York, New York 10020
Attention: Steven J. Reisman and Michael E. Comerford
E-mail address: ####,
####
3. if
to a Consenting ABL Lender, to:
Blank
Rome LLP
1201 N. Market Street, Suite 800
Wilmington, Delaware 19801
Attention: Regina Stango Kelbon
E-mail address: ####
4. if
to a Consenting Term Lender, to:
Paul,
Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-6064
Attention: Andrew Rosenberg and Elizabeth McColm
E-mail addresses: ####,
####
5. if
to a Consenting Convertible Noteholder, to:
Davis
Polk & Wardwell LLP
450 Lexington Ave,
New York, NY 10017
Attention: Damian Schaible and David Schiff
E-mail addresses: ####,
####
After the Plan Effective Date,
the Debtors have authority to notify Entities that, in order to continue to receive documents pursuant to Bankruptcy Rule 2002, Entities
must File a renewed request to receive documents pursuant to Bankruptcy Rule 2002. After the Plan Effective Date, the Debtors are
authorized to limit the list of Entities receiving documents pursuant to Bankruptcy Rule 2002 to those Entities that have Filed such
renewed requests.
Except as otherwise indicated,
and without limiting the effectiveness of the Restructuring Support Agreement, the Plan (including, for the avoidance of doubt, the Plan
Supplement) supersedes all previous and contemporaneous negotiations, promises, covenants, agreements, understandings, and representations
with respect to such subjects, all of which have become merged and integrated into the Plan.
All
exhibits and documents included in the Plan Supplement are incorporated into and are a part of the Plan as if set forth in full in the
Plan. After the exhibits and documents are Filed, copies of such exhibits and documents shall be available upon written request to the
Debtors’ counsel at the address above or by downloading such exhibits and documents from the Debtors’ restructuring website
at https://dm.epiq11.com/QualTek or the Court’s website at www.txs.uscourts.gov/bankruptcy. To the extent any
exhibit or document in the Plan Supplement is inconsistent with the terms of the Plan, unless otherwise ordered by the Court, such part
of the Plan that does not constitute the Plan Supplement shall control. The documents included in the Plan Supplement are an integral
part of this Plan and shall be deemed approved by the Court pursuant to the Confirmation Order.
| J. | Nonseverability of Plan Provisions. |
If, prior to Confirmation,
any term or provision of the Plan is held by the Court to be invalid, void, or unenforceable, the Court shall have the power to alter
and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose
of the term or provision held to be invalid, void, or unenforceable, and such term or provision shall then be applicable as altered or
interpreted. Notwithstanding any such holding, alteration, or interpretation, the remainder of the terms and provisions of the Plan will
remain in full force and effect and will in no way be affected, Impaired, or invalidated by such holding, alteration, or interpretation.
The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of the Plan, as it may
have been altered or interpreted in accordance with the foregoing, is: (1) valid and enforceable pursuant to its terms; (2) integral
to the Plan and may not be deleted or modified without the Debtors’ consent, provided, that any such deletion or modification
must be consistent with the Restructuring Support Agreement (including the consent, approval, and consultation rights set forth therein);
and (3) nonseverable and mutually dependent.
| K. | Votes Solicited in Good Faith. |
Upon entry of the Confirmation
Order, the Debtors will be deemed to have solicited votes on the Plan in good faith and in compliance with the Bankruptcy Code, and pursuant
to section 1125(e) of the Bankruptcy Code, the Debtors and each of their respective Affiliates, agents, representatives, members,
principals, shareholders, officers, directors, managers, employees, advisors, and attorneys will be deemed to have participated in good
faith and in compliance with the Bankruptcy Code in the offer, issuance, sale, and purchase of securities offered and sold under the Plan,
or any previous plan, and, therefore, none of such parties, individuals, or the Reorganized Debtors will have any liability for the violation
of any applicable law, rule, or regulation governing the solicitation of votes on the Plan or the offer, issuance, sale, or purchase of
the Securities offered and sold under the Plan or any previous plan.
| L. | Closing of Chapter 11 Cases. |
The Reorganized Debtors shall,
promptly after the full administration of the Chapter 11 Cases, and as soon as reasonably practicable following the Plan Effective Date
based on the circumstances attendant to each Chapter 11 Case, File with the Court all documents required by Bankruptcy Rule 3022
and any applicable order of the Court to close each of the Chapter 11 Cases.
Each Holder of a Claim or
Interest shall be deemed to have waived any right to assert any argument, including the right to argue that its Claim or Interest should
be Allowed in a certain amount, in a certain priority, secured, or not subordinated by virtue of an agreement made with the Debtors or
their counsel, or any other Entity, if such agreement was not disclosed in the Plan, the Disclosure Statement, or papers Filed with the
Court prior to the Confirmation Date.
Notwithstanding anything to
the contrary in this Plan or the Confirmation Order, it shall not be a violation of this Plan or the Confirmation Order for a Holder of
a Claim or an Interest or any other party in interest or any such Person’s or Entity’s counsel to (x) respond to any
inquiry or produce information if so compelled by a court or other entity with authority to inquire and compel production of such information,
including, but not limited to, a banking or other regulatory agency and (y) comply with or satisfy any regulatory or other reporting
obligations required by applicable law arising out of, in connection with, or relating to the ABL Credit Agreement, the ABL DIP Credit
Agreement, the Term Loan Credit Agreement, the Term Loan DIP Credit Agreement, the Restructuring Transactions, or any transactions related
to any of the foregoing.
[Remainder of page intentionally left blank]
Dated: June 29, 2023 |
QualTek Services Inc.
on behalf of itself and all other Debtors |
|
|
|
/s/ Cari Turner |
|
Cari Turner |
|
Chief Restructuring Officer
QualTek Services Inc. |
Exhibit 10.1
|
www.qualtekservices.com |
C. Scott Hisey
635 Font Road
Glenmoore, PA 19343
Re: Continuation of Employment with QualTek USA, LLC
Dear Mr. Hisey:
Pursuant to Section 1 of the Executive Services
Agreement between you and QualTek LLC (f/k/a QualTek USA, LLC), dated June 5, 2018 (“Prior Agreement”), you
provided QualTek LLC (the “Company”) with written notice of an intent to not renew the Prior Agreement. The
Company accepted this written notice. Accordingly, the Prior Agreement expires on July 18, 2023.
As we have discussed, you and the Company desire
to continue the working relationship in the form of an at-will offer of employment. While employment is to be continued at-will, the parties
have discussed that you have agreed to work in your current role for approximately thirty (30) days from the date the Prior Agreement
expires, which thirty (30) day period may be extended by mutual agreement of the parties for additional thirty (30) day periods during
such time as you and the Company discuss an alternative employment arrangement. This letter serves to confirm that commencing on July
19, 2023, the Company will employ you in an at-will, full-time position. The highlights and terms of your at-will employment are outlined
below.
1. Position; Duties; Commencement. Upon termination of the Prior Agreement, your employment with the Company will continue
as an at-will employee, which will commence on July 19, 2023. You shall serve as Chief Executive Officer of the Company (which shall be
the highest designated officer of the Company, other than members of the board of directors (the “Board”) of
QualTek Services, Inc. (“Services”), and will perform such duties for the Company as are customarily associated
with such position for a similarly situated company and as may otherwise be assigned to you from time to time by the Board. You shall
report to the Board. You acknowledge that due to the nature and scope of your job duties, you have had responsibility for and will continue
to have access to and/or receive Confidential Information (as defined in the Prior Agreement in Section 8(c)) related to all aspects of
the operations of Services and its Subsidiaries (collectively, the “Company Entities”). In addition, you shall
remain appointed to serve as a member of the Board or of the board of managers or board of directors of the Company or any parent entity
of the Company for so long as you serve as Chief Executive Officer of the Company. The duties to be performed by you hereunder shall be
performed primarily at the Company’s offices in Blue Bell, Pennsylvania and in the other cities in which the Company operates or
will operate.
2. Salary and Benefits. Current Base Compensation and employee benefits will remain the same.
3. Employment At-Will. Your employment at the Company is at-will, and it is not offered, contracted, or promised for any specific
length of time and will be offered in 30-day increments. By signing this offer letter, you further acknowledge your understanding and
agreement that your employment with the Company is “at-will”, meaning that either you or the Company can terminate the employment
relationship at any time, with 30 days’ notice.
475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422
|
www.qualtekservices.com |
4. General, Conditions and Contingencies.
a. You acknowledge that this offer letter, along with the most current form of any referenced documents, represent the general details of
your employment with the Company. This is not a contract or guarantee of employment with the Company.
b. This offer of employment shall be interpreted in accordance with the laws of the Commonwealth of Pennsylvania. This offer of employment
constitutes the entire understanding between the parties and shall supersede any and all other understandings, oral or written. No addition
to, or modification of, this employment letter shall be of any force or effect unless in writing and signed by or on behalf of both parties.
5. Acceptance. If the above terms are acceptable to you, please sign and date this letter and return one copy to QualTek LLC
by July 7, 2023.
Should you have any questions, please feel free
to contact me at acarr@drivetrainllc.com.
Sincerely,
/s/ Alan Carr
Alan Carr
Special Committee Chairman
I ACCEPT THE ABOVE TERMS AND CONDITIONS OF EMPLOYMENT:
/s/ C. Scott Hisey
C. Scott Hisey
Date: 6/26/2023 , 2023
475 Sentry Parkway E, Suite 200
Blue Bell, PA 19422
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