ModivCare - Chapter 11 Plan / RSA Terms

RSA Terms

Overview

• On August 20, 2025, the Debtors entered into a Restructuring Support Agreement (the “RSA”) with the “Consenting Creditors,” which include:
  • The Consenting First Lien Lenders; and
  • The Consenting Second Lien Noteholders.
• The RSA contemplates a Chapter 11 Plan that is the result of extensive, good faith, arm’s length negotiations among the Debtors and their principal constituencies.

DIP Financing

• The Debtors have secured a DIP Facility provided by the DIP Lenders.
• Treatment of DIP Claims: Unless agreeing to less favorable treatment, holders of Allowed DIP Claims shall receive their pro rata share of Exit Term Loans in full satisfaction of such claims.
  • DIP Professional Fees and Restructuring Fees and Expenses shall be paid in full in cash.
• DIP Backstop Premium: The DIP Backstop Commitment Parties shall receive a premium payable in-kind on the Effective Date in the form of 20% of the New Common Interests, subject to dilution by the Management Incentive Plan (MIP), New Warrants, and the Equity Rights Offering.

Exit Facilities

• Upon emergence, the Reorganized Debtors will enter into the “Exit Facilities,” comprising:
  • Exit Term Loan Facility: A takeback term loan facility; and
  • Exit Revolving Facility: A revolving credit facility in a principal amount up to $250,000,000, secured by a first priority lien on substantially all assets.
    • Includes a letter of credit sublimit of up to $150,000,000.

Equity Rights Offering

• The Reorganized Parent will consummate an Equity Rights Offering (“ERO”) for an aggregate amount of up to $200,000,000.
• Participation: The right to purchase New Common Interests will be allocated to Eligible Holders of:
  • Allowed General Unsecured Claims; and
  • Allowed Subordinated Unsecured Notes Claims.
• Use of Proceeds: Cash proceeds from the ERO will be used to fund cash payments to holders of Allowed First Lien Claims.
• Valuation: The offering is valued such that holders of First Lien Claims recover 100% on account of their allowed claims.

Treatment of First Lien Claims

• Holders of Allowed First Lien Claims shall receive their pro rata share of:
  • Unfunded LC Exposure: Participation in the Exit LC Facility; and
  • Other First Lien Claims:
    • The Exit Term Loans;
    • 98% of the New Common Interests (subject to dilution); and
    • Cash from the proceeds of the Equity Rights Offering.
• Equity Option: Prior to the Effective Date, holders may irrevocably elect to receive:
  • Additional New Common Interests in lieu of Exit Term Loans; or
  • Additional Exit Term Loans in lieu of New Common Interests.

Treatment of General Unsecured Claims (GUCs)

• Holders of Allowed GUCs shall receive their pro rata share of:
  • 2% of the New Common Interests (subject to dilution);
  • New Warrants (Series A, B, and C); and
  • Subscription rights to purchase up to $200,000,000 of New Common Interests via the Equity Rights Offering (shared pro rata with Subordinated Unsecured Notes).
• Cashout Election: Holders of claims less than $1,000,000 may elect to receive their pro rata share of the “GUC Cashout Value” of $32,000,000 in lieu of the standard recovery.

Treatment of Subordinated Unsecured Notes

• Claims arising from Subordinated Unsecured Notes will be canceled, released, and extinguished with no distribution, except for limited participation in the ERO.
  • Eligible Holders shall receive their pro rata share of the right to purchase New Common Interests pursuant to the Equity Rights Offering, shared pro rata with holders of Allowed GUCs.

Management Incentive Plan (MIP)

• The Reorganized Parent will adopt a MIP reserving 8% of the New Common Interests on a fully diluted basis for certain employees, officers, and directors.

Releases and Exculpation

• Releases: The Plan provides for standard Debtor and Third-Party Releases.
  • Released Parties include the Debtors, Consenting Creditors, First Lien Agent, DIP Lenders, DIP Backstop Commitment Parties, and Second Lien Notes Trustee, among others.
  • The Third-Party Release binds holders of claims in Voting Classes who do not opt out, and holders in Non-Voting Classes who do not opt out via a Release Opt-Out Form.
• Exculpation: The Plan exculpates the Debtors, independent directors, and the Committee (and its members) for acts or omissions related to the restructuring from the Petition Date to the Effective Date, excluding willful misconduct, gross negligence, or actual fraud.