ModivCare (MODV) - 2025 Q2 - Quarterly Results

Restructuring Support Agreement This agreement outlines the terms and conditions for the capital restructuring and recapitalization of ModivCare Inc. and its subsidiaries through Chapter 11 proceedings Preamble This agreement, signed August 20, 2025, outlines the capital restructuring of ModivCare Inc. and its subsidiaries through Chapter 11 proceedings - The agreement was signed on August 20, 2025, to restructure the capital of ModivCare Inc. and its subsidiaries[5] - The restructuring will be implemented through voluntary Chapter 11 bankruptcy proceedings initiated by the Company Entities[9] Key Creditor Holdings | Claim Type | Creditor | Claim Amount (Approx.) | Proportion Held by Signatories (Approx.) | | :------- | :----- | :------------ | :----------------------- | | First Lien Loans | First Lien Lenders | $805 million | 90% | | Second Lien Notes | Second Lien Noteholders | $223 million | 70% | 1. Certain Definitions This section defines key terms used in the agreement, providing a foundation for understanding its terms and conditions - “Restructuring” refers to the restructuring and recapitalization transactions described in the agreement and Exhibit A (Restructuring Term Sheet)[9][87] - “Chapter 11 Cases” refers to the voluntary bankruptcy cases initiated by the Company Entities under Chapter 11 of the Bankruptcy Code[9][21] - The “Support Effective Date” requires the Company Entities, initial Consenting First Lien Lenders (holding at least 66.67% of First Lien Claims), and initial Consenting Second Lien Noteholders (holding at least 66.67% of Second Lien Claims) to execute and deliver the agreement[101] 3. Restructuring This section outlines the core commitment of all parties to use commercially reasonable efforts to confirm the restructuring plan promptly after the Petition Date - All parties will use commercially reasonable efforts to obtain confirmation of the restructuring plan as soon as practicable after the Petition Date and comply with applicable milestones[107] - All final documents related to the restructuring must be fully consistent with the terms and conditions of the agreement (including the Restructuring Term Sheet) and acceptable to the consenting parties[108] 4. Agreements of the Consenting Creditors This section details the obligations of consenting creditors during the support period, including voting, financing, and transfer restrictions - Consenting Creditors commit to timely vote in favor of the restructuring plan after solicitation commences and may not withdraw their votes[109] - Consenting Creditors agree to the occurrence of DIP financing and the Company Entities' use of their cash collateral[109] - Claim transfers are strictly restricted; transfers are void unless the transferee is already a Consenting Creditor or signs a joinder agreement[112] - During the Support Period, Consenting Creditors agree not to exercise rights or remedies for any Company Entity default, unless otherwise specified in the agreement or final documents[121] 5. Agreements of the Company Entities This section specifies the Company Entities' key obligations during the support period, including implementing the restructuring and adhering to financial and operational commitments - The Company Entities commit to taking all necessary actions to implement the restructuring and prepare final documents consistent with the agreement[123] - The Company Entities will timely pay all restructuring fees and expenses and operate in the ordinary course of business[124] - The Company Entities shall not seek or solicit alternative restructuring proposals, nor modify final documents, without the written consent of the Required Consenting First Lien Lenders[126] 6. Additional Provisions Regarding Company Entities' Commitments This section clarifies the Company Entities' flexibility in fulfilling commitments, particularly regarding fiduciary duties and considering alternative restructuring proposals - If the Company Entities' Board determines, consistent with its fiduciary duties, that continuing the restructuring is not appropriate, it is not required to take actions inconsistent with the agreement, provided prior notice is given to Consenting Creditors[127] - The Company Entities may consider and discuss alternative restructuring proposals, but must notify the Required Consenting Creditors within two business days and provide a summary of the material terms of the proposal[128] 7. Termination of Agreement This section details the conditions and consequences for the termination of the agreement, including specific termination events and the survival of certain obligations - The agreement will automatically terminate on the Effective Date[130] - The agreement may be terminated upon the occurrence of specific termination events, following written notice (typically a three-business-day notice period)[132] - Termination events include the Company Entities withdrawing or modifying the plan, material default, failure to meet milestones, DIP Credit Agreement default, failure to pay restructuring fees, conversion or dismissal of Chapter 11 Cases by the Bankruptcy Court, appointment of an examiner or trustee, or a fiduciary out decision by the Company Entities' Board[134][135][137][138][139][140][141] - Upon termination of the agreement, parties are released from obligations, but liability for pre-termination breaches remains[143] 8. Additional Documents This section requires parties to cooperate in good faith to negotiate and execute final documents, while also protecting sensitive information - All parties commit to cooperate in good faith to negotiate, draft, execute, and deliver final documents, subject to the consent rights specified in the agreement[145] - Initial Consenting First Lien Lenders or initial Consenting Second Lien Noteholders are not required to provide information they deem sensitive or confidential[145] 9. Inconsistency of Terms This section stipulates that in case of any inconsistency between the Restructuring Term Sheet and the agreement, the terms of the Restructuring Term Sheet shall prevail - If there is any inconsistency between the Restructuring Term Sheet and the agreement (excluding the Restructuring Term Sheet), the terms of the Restructuring Term Sheet shall prevail[147] 10. Representations and Warranties This section outlines the representations and warranties made by all parties, covering legal standing, authorization, and compliance - All parties warrant their legal existence, authority to sign the agreement, and that its execution and performance do not violate laws or contracts[148] - Consenting Creditors warrant they are not Qualified Marketmakers and possess beneficial ownership and voting rights over their claims[150] - Consenting Creditors commit to commercially reasonable efforts to recall loaned claims, but inability to vote or consent on loaned claims does not constitute a default[150][151] 11. Disclosure; Publicity This section governs the disclosure of information related to the agreement, including public filings and restrictions on revealing specific creditor holdings - Before releasing public information related to the agreement, the Company Entities must submit drafts to the First Lien Agent and Consenting Creditors' counsel for review and comment[152] - Without the written consent of Consenting Creditors, the specific amount or percentage of First Lien Claims and/or Second Lien Claims held by any Consenting Creditor shall not be disclosed[153] - Public filings of the agreement will anonymize creditor holding information, but an unredacted version may be filed under seal with the Bankruptcy Court[153] 12. Amendments and Waivers This section specifies the procedures for amending or waiving provisions of the agreement, requiring various levels of consent depending on the nature of the change - Amendments and waivers to the agreement generally require the written consent of the Company Entities and the Required Consenting First Lien Lenders[154] - Modifying the definition of “Required Consenting Creditors” requires the consent of each Consenting Creditor[154] - Modifications materially adverse to Second Lien Noteholders require the written consent of the Required Consenting Second Lien Noteholders and each Second Lien Noteholder as of the Support Effective Date[154] - Modifications materially adverse to any Consenting First Lien Lender or Consenting Second Lien Noteholder require the written consent of the affected creditor[154] 13. Effectiveness This section outlines the conditions under which the agreement becomes effective for the parties involved, including initial signatories and those joining later - The agreement becomes effective for the Company Entities, initial Consenting First Lien Lenders, and initial Consenting Second Lien Noteholders on the Support Effective Date[156] - Consenting Creditor signature pages will be delivered in anonymized form,