The US Bankruptcy Court gave an order to QualTek Services Inc. to obtain DIP financing on a final basis on June 13, 2023. As per the order, the debtor has been authorized to obtain a revolving facility in the amount of $101.2 million and term facility in the amount of $40 million from dip lenders with PNC and UMB Bank, N.A. acting as the administrative agents respectively. the dip revolving facility would carry an interest rate of BSBY+ 5.00% cash and term facility would carry an interest rate of SOFR +1.00% cash plus 11.00% PIK.

as per the terms of the dip agreement, revolving facility carries a closing fee of 1% p.a. and a fronting fee equal to 0.125% per annum. term facility carries a backstop premium of 6%, OID/Upfront fee of 2% and exit fee of 2% the dip revolving facility would mature either on August 24, 2023 or 30 days after the petition date if the final order has not been entered prior to the expiration of such 30-day period or the substantial consummation of a plan of reorganization filed in the cases that is confirmed pursuant to an order entered by the bankruptcy court or the acceleration of the loans and the termination of the commitments with respect to the dip term loan facility in accordance with the term loan dip credit documents or the consummation of a sale of all or substantially all of the assets of the debtors pursuant to section 363 of the bankruptcy code or on the termination of the restructuring support agreement, whichever is earlier. dip term facility would mature either on September 24, 2023 or 30 days after the petition date if the final order has not been entered prior to the expiration of such 30-day period or the substantial consummation of a plan of reorganization filed in the cases that is confirmed pursuant to an order entered by the bankruptcy court or the acceleration of the loans and the termination of the commitments with respect to the dip term loan facility in accordance with the term loan dip credit documents or the consummation of a sale of all or substantially all of the assets of the debtors pursuant to section 363 of the bankruptcy code or on the termination of the restructuring support agreement, whichever is earlier.

adequate protection would be provided to the dip lenders in the form of super-priority administrative expense claims which is subject to a carve-out of $1.5 million towards unpaid professional fees / administrative expenses and first priority lien upon and security interest in the debtor?s collateral.