On March 16, 2023, QualTek Services Inc. through its wholly-owned subsidiaries QualTek Buyer, LLC and QualTek LLC, entered into an amendment to each of the Term Credit and Guaranty Agreement, dated as of July 18, 2018, among QualTek Buyer, LLC, QualTek LLC, certain subsidiaries of QualTek LLC and Citibank, N.A., as administrative agent and collateral agent and the ABL Credit and Guaranty Agreement, dated as of July 18, 2018, among QualTek Buyer, LLC, QualTek LLC, certain subsidiaries of QualTek LLC and PNC Bank, National Association, as administrative agent and collateral agent. The Term Loan Amendment provides for $55 million of immediately available new money incremental term loans under the existing term loan credit agreement. On March 16, 2023, the Company borrowed the full $55 million of new money incremental term loans.

Each of the lenders providing the new money incremental term loans, and existing term lenders who agree to take new money incremental term loans by assignment after the closing date and participate in the reallocation process, will be entitled to receive rollover loans structured as a new facility of term loans under the existing term loan credit agreement. Pursuant to the payment waterfall, the new money incremental term loans will be senior to the rollover loans, and the rollover loans will be senior to the existing term loans. The interest rate on the new money incremental term loans will be the secured overnight financing rate (“SOFR”) plus 12.0%, with a minimum cash pay requirement of SOFR plus 1.00% and the remainder to be paid-in-kind.

The maturity date on the new money incremental term loans will be June 16, 2024. The Term Loan Amendment will also implement modifications to certain of the affirmative covenants, negative covenants and events of default and certain other amendments. The interest rate and maturity date of the rollover loans will remain consistent with the existing term loans.

The ABL Amendment provides for a reduction in the aggregate commitment from $130 million to $105 million, a modification of the interest rate to BSBY plus 5.00% and a modification of the maturity date of the ABL facility to be June 16, 2024. The ABL Amendment will also implement modifications to certain of the affirmative covenants, negative covenants and events of default, including a waiver of the financial covenant for the fiscal quarters ended March 31, 2023, June 30, 2023 and September 30, 2023.