IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE Form 8 K

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

SUPPLEMENT TO MOTION OF DEBTOR UPHEALTH HOLDINGS, INC.

FOR ENTRY OF ORDERS (I) (A) APPROVING AND AUTHORIZING BIDDING

PROCEDURES IN CONNECTION WITH THE SALE OF UPHEALTH HOLDINGS,

INC.'S INTEREST IN TTC HEALTHCARE, INC., (B) AUTHORIZING PROCEDURES

TO DESIGNATE STALKING HORSE BIDDER AND (C) GRANTING RELATED

RELIEF AND (II) (A) AUTHORIZING SALE OF UPHEALTH HOLDINGS, INC.'S

INTEREST IN TTC HEALTHCARE, INC. TO THE SUCCESSFUL BIDDER AND

(B) GRANTING RELATED RELIEF

Debtor UpHealth Holdings, Inc. ("UpHealth Holdings" or the "Debtor"), by and through its undersigned counsel, DLA Piper LLP (US), hereby respectfully represents as follows in support of this supplement (this "Supplement")² to the Motion of Debtor UpHealth Holdings, Inc. for Entryof Orders (I) (A) Approving and Authorizing Bidding Procedures in Connection with the Sale of UpHealth Holdings, Inc.'s Interest in TTC Healthcare, Inc., (B) Authorizing Procedures to Designate Stalking Horse Bidder(s), and (C) Granting Related Relief and (II) (A) Authorizing Sale of UpHealth Holdings, Inc.'s Interest in TTC Healthcare, Inc. to the Successful Bidder and(B) Granting Related Relief [D.I. 810] filed on July 17, 2024 (the "Initial Bid Procedures Motion",and together with the Supplement, the "Bid Procedures Motion"), for entry of an order, in

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substantially the form attached hereto as Exhibit A, (i) authorizing the Debtor to enter into and perform under that certain executed commitment letter dated as of September 20, 2024 (the "Commitment Letter"), attached hereto as Exhibit B, including approving all the binding provisions thereof, for a private sale of its equity interest in its wholly-owned non-debtor subsidiary TTC Healthcare, Inc. (the "TTC Interests") free and clear of all liens, claims, and encumbrances (the "TTC Sale") to an entity newly formed by Mr. Martin S.A. Beck ("Beck")³ and Freedom 3 Capital ("F3C" and, such entity, "Purchaser"); and (ii) granting related relief. In support of this Supplement, the Debtor refers this Court to the (i) Declaration of Jay Jennings inSupport of the Filing of the Petitions and Certain Pleadings [D.I. 809] and (ii) Declaration of Michael Krakovsky of Stout Capital, LLC in Support of Sale (the "Krakovsky Declaration") andrespectfully states as follows:

Jurisdiction and Venue

1. This Court has jurisdiction over the above-captioned chapter 11 cases and the Bid Procedures Motion under 28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware dated as of February 29, 2012. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2).

2. Venue is proper in this district under 28 U.S.C. §§ 1408 and 1409.

3. Pursuant to Rule 9013-1(f) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the "Local Rules"), the Debtor consents to the entry of a final judgment or order with respect to the Supplement if it is determined that the Court, absent consent of the parties, cannot enter final orders or judgments consistent with article III of the United States Constitution.

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4. The statutory bases for relief are sections 105 and 363 of title 11 of the United States Code (as amended, the "Bankruptcy Code"), Rules 2002, 6004, 9007 and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), and Local Rules 2002-1,6004-1, and 9006-1.

Background

5. Since filing the Initial Bid Procedures Motion, the Debtor, with the assistance of its investment banker, Stout Capital, LLC ("Stout"), and in consultation with the Consultation Parties, has worked diligently to solicit bids pursuant to the Bidding Procedures Order by engaging in a marketing and sale process to identify a party ready, willing, and able to consummate a transaction for the sale of the TTC Interests. Stout's employment was approved by this Court on June 26, 2024, under the Order Approving Debtor UpHealth Holdings, Inc.'s Application for Entry ofOrder (I) Authorizing the Employment and Retention of Stout Capital, LLC as Investment Banker to the Debtor, (II) Modifying Certain Time-Keeping Requirements, and (III) Granting Related Relief [D.I. 764].

6. On August 6, 2024, the Court entered an order [D.I. 854] (the "Bidding Procedures Order") granting the Bidding Procedures Motion and approving the Debtor's proposed bidding procedures (the "Bidding Procedures"). Pursuant to the Bidding Procedures Order, the Debtor was authorized to designate a Stalking Horse Bidder by September 10, 2024, including offering bid protections, by filing a supplement to the Bidding Procedures Motion and providing parties no less than three days' notice of the objection deadline. Bidding Procedures Order ¶¶ 15, 16, 19.

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7. Since commencing the sale process, the Debtor and Stout have contacted over 150 prospective buyers, 50 of whom executed non-disclosure agreements. A number of parties submitted indications of interest.

8. Under the Bidding Procedures Order, the deadline for interested parties to submit a bid was September 12, 2024 (the "Bid Deadline"). The Debtor received the Commitment Letter before the Bid Deadline, but did not sign the Commitment Letter until September 20, 2024.

Summary of the Terms of the Commitment Letter

9. On or about September 5, 2024, the Purchaser tendered an initial version of the Commitment Letter to the Debtor. On September 20, 2024, following extensive negotiations with the Debtor and Consultation Parties, the Purchaser agreed to enter into the negotiated Commitment Letter for the purchase of the TTC Interests as set forth below. A summary of the material terms of the Commitment Letter are as follows:

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10. After conferring with Stout and its other professionals and the Consultation Parties, and in light of the status of the sale process, the Debtor believes that the Commitment Letter represents the best method currently available of maximizing the value for the TTC Interests.

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Relief Requested

11. By this Supplement, and pursuant to sections 105 and 363 of the Bankruptcy Code, Bankruptcy Rules 2002, 6004, 9007 and 9014 and Local Rules 2002-1,6004-1 and 9006-1, the Debtor seeks entry of an order (the "Proposed Order"), substantially in the form attached hereto as Exhibit A(i) authorizing the Debtor to enter into and perform the binding provisions of theCommitment Letter and (ii) granting related relief.

Supplemental Argument

12. In accordance with Bankruptcy Rule 6004, sales of estate assets outside the ordinary course of business may be by private sale or public auction. The Debtor, in consultation with the Consultation Parties, has determined that the Sale of the TTC Interests on material terms consistent with the Commitment Letter and the SPA when executed will enable it to maximize the value of the TTC Interests and will serve the best interests of the Debtor's creditors.

13. The Debtor has demonstrated a sound business judgment for entering into the Commitment Letter and pursuing approval of the Transactions contemplated therein through a private sale. The Commitment Letter is the result of extensive negotiations between the Purchaser and the Debtor (in consultation with the Consultation Parties). Moreover, and based on the outcome of the sale process to date, the Commitment Letter represents the best opportunity to expeditiously close the TTC Sale. This Supplement is substantively consistent with the Bidding Procedures Order and related stalking horse designation procedures, and all parties in interest have had and will continue to have an opportunity to meaningfully participate in the sale of the TTC Interests. As a result, proceeding with a private sale of the TTC Interests to the Purchaser is in the best interests of the Debtor's estate and is consistent with the Debtor's fiduciary duties.

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14. The Debtor respectfully submits that authorizing it to enter into and perform under the binding provisions of the Commitment Letter and ultimately approving a sale of the TTC Interests on the terms of the SPA (subject to further opportunity to object) will maximize the value of the TTC Interests in light of the Debtor's marketing efforts and the sale process results to date. Critically, as is evident from the Debtors' monthly operating reports, speed to close is essential.

15. Therefore, there is ample cause for the Court to issue an order under sections 105 and 363 of the Bankruptcy Code, authorizing the Debtor to perform under the binding provisions of the Commitment Letter and proceed with a private sale to the Purchaser for the TTC Interests, subject to further notice, opportunity to object and Court approval at the Sale Hearing. Additionally, all parties in interest will have an opportunity to review and object to the proposed SPA before it is finally approved. To be certain, if any party provides the Debtors with terms that are superior to the terms set forth in the Commitment Letter, the Debtors will, in consultation with the Consultation Parties, act in a manner consistent with their fiduciary duties.

16. The Commitment Letter provides certain Bid Protections for the Purchaser in order to induce the Purchaser to expend substantial time and resources necessary to proceed to the execution of the SPA and closing. These are structurally consistent with the Bidding Procedures Order.

17. The Commitment Letter provides certain bid protections for the Purchaser in order to induce the Purchaser to expend substantial time and resources necessary to proceed to closing. The Commitment Letter provides substantial value to the Debtor's estate by incentivizing the Purchaser to proceed expeditiously to execution of the SPA, entry of the Sale Order and closing. Therefore, the Bid Protections should be approved. In re O'Brien Env't Energy, Inc., 181 F.3d 527, 533 (3d Cir. 1999).

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18. Therefore, under the circumstances, the Debtor believes that the Bid Protections are fair and reasonable and are "actually necessary" to induce the Purchaser, which has provided the highest and best proposal for the TTC Interests to date, to consummate a transaction that will maximize and preserve value of the estate. See O'Brien Env't Energy, Inc., 181 F.3d at 535 ("In other words, the allowability of break-up fees, like that of other administrative expenses, depends upon the requesting party's ability to show that the fees were actually necessary to preserve the value of the estate."). The Bid Protections were negotiated at arms'-length and in good faith, discussed with the Consultation Parties-the key economic stakeholders in these chapter 11 cases-and were a necessary inducement to the Purchaser's commitment to proceed to expend substantial resources moving forward with the Transactions. The Bid Protections are necessary to preserve the value of the Debtor's estate, because, without the Bid Protections, the Debtor will forfeit the opportunity to close on the highest and best offer for the TTC Interests. To be certain, the Bid Protections function like any other Bid Protections in a sale process, by protecting the bidder from being topped after the bidder expended substantial time and effort and resources to arrive at the Commitment Letter and negotiate the SPA, while at the same time not prejudicing the Debtor's ability to exercise its fiduciary duties. The Debtor, in consultation with the Consultation Parties, agreed to the Bid Protections in part based on the months long and comprehensive process run by Stout, as well as its own understanding of the market. While the Debtor realizes that granting "exclusivity" to a bidder is not necessarily standard, it is absolutely appropriate in this situation given the facts and circumstances presently known.

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Notice

19. Consistent with the Bidding Procedures Order, notice of the TTC Sale and auction process was provided to all creditors and other required notice parties. Notice of this Supplement shall be provided to: (i) the Office of the United States Trustee for Region 3; (ii) counsel to the Committee, (iii) counsel to Wilmington Trust, National Association, as Indenture Trustee; (iv) counsel to the Noteholders; and (v) any party that has requested notice pursuant to Bankruptcy Rule 2002.

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WHEREFORE, the Debtor respectfully requests that the Court enter an order substantially in the form attached hereto as Exhibit A granting (a) the relief requested herein and (b) any such other and further relief as the Court may deem proper.

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Exhibit A

Proposed Order

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IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

ORDER APPROVING SUPPLEMENT TO MOTION OF DEBTOR UPHEALTH HOLDINGS, INC. FOR ENTRY OF ORDERS (I) (A) APPROVING AND AUTHORIZING BIDDING PROCEDURES IN CONNECTION WITH THE SALE OF UPHEALTH HOLDINGS, INC.'S INTEREST IN TTC HEALTHCARE, INC.,

(B) AUTHORIZING PROCEDURES TO DESIGNATE STALKING HORSE BIDDER AND (C) GRANTING RELATED RELIEF AND (II) (A) AUTHORIZING SALE OF UPHEALTH HOLDINGS, INC.'S INTEREST IN TTC HEALTHCARE, INC. TO THE SUCCESSFUL BIDDER AND (B) GRANTING RELATED RELIEF

Upon the Motion of Debtor UpHealth Holdings, Inc. for Entry of Orders (I) (A) Approvingand Authorizing Bidding Procedures in Connection with the Sale of UpHealth Holdings, Inc.'s Interest in TTC Healthcare, Inc., (B) Authorizing Procedures to Designate Stalking Horse Bidder(s), and (C) Granting Related Relief and (II) (A) Authorizing Sale of UpHealth Holdings, Inc.'s Interest in TTC Healthcare, Inc. to the Successful Bidder and (B) Granting Related Relief [D.I. 810] (the "Initial Bid Procedures Motion", together with the Supplement, the "Bid ProceduresMotion")² of Debtor UpHealth Holdings, Inc. ("UpHealth Holdings" or the "Debtor"), pursuant to sections 105(a) and 363 of title 11 of the United States Code (the "Bankruptcy Code"), Rules 2002, 6004, 9007 and 9014 of the Federal Rules of Bankruptcy Procedure (as amended from time to

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time, the "Bankruptcy Rules"), and Rules 2002-1,6004-1,9006-1 of the Local Rules of Bankruptcy Practice and Procedure of the Bankruptcy Court for the District of Delaware (the "Local Rules"), for the entry of an order, among other things (i) authorizing the Debtor to enter into and perform under the Commitment Letter; and (ii) granting related relief; and the Court having reviewed the Bid Procedures Motion and having found that (a) the Court has jurisdiction to consider the Bid Procedures Motion and the relief requested therein pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware dated as of February 29, 2012; (b) venue is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409; (c) this is a core proceeding pursuant to 28 U.S.C. § 157(b); (d) notice of the Bid Procedures Motion was sufficient under the circumstances; and (e) the relief requested in the Bid Procedures Motion represents a proper exercise of the Debtor's business judgment; and after due deliberation; and the Court having determined that the relief set forth in this Order is in the best interests of the Debtor, the estates and creditors; and good and sufficient cause having been shown;

IT IS HEREBY ORDERED THAT:

1. The Bid Procedures Motion is GRANTED, as set forth in this Order.

2. The Debtor is authorized to enter into and perform under the Commitment Letter, and the terms of the Commitment Letter are hereby approved as fair and reasonable under the circumstances of this case.

3. The binding obligations of the Debtors under the Commitment Letter are approved and shall be binding in their entirety on the Debtors and their estates. In the event the Purchaser becomes entitled to reimbursement in accordance with the Commitment Letter, the Debtor is authorized to pay all amounts that become due and owing to the Purchaser under the Commitment Letter, which amounts shall be paid first from the proceeds of any sale of the TTC Interests before any other claims are paid from such proceeds.

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4. The Debtor may take any and all actions as may be necessary to complete, effectuate, and implement the terms and provisions of the Commitment Letter.

5. Any and all objections to the Bid Procedures Motion or the relief requested therein, that have not been withdrawn, waived, or settled, and all reservations of rights included in such objections, are hereby overruled on the merits with prejudice.

6. The Court shall retain jurisdiction over all matters arising from or related to the interpretation and implementation of this Order.

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Exhibit B

Commitment Letter

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September 20, 2024

Ladies and Gentlemen:

Mr. Martin Beck ("Beck") and Freedom 3 Capital, LLC ("F3C") are pleased to confirm our commitment (this "Commitment") regarding the potential purchase of TTC Healthcare, Inc. (together with its subsidiaries, "TTC" or the "Company") from UpHealth Holdings, Inc. ("UpHealth" and together with its debtor affiliates, "Debtors") by a newly organized special purpose acquisition entity affiliated with F3C and Beck ("NewCo"). We are prepared to commit to cause NewCo to acquire TTC for $11.0 million in cash (assuming debt free, cash free, working capital consistent with the business having been operated in the ordinary course since the last audit, and no material undisclosed liabilities being uncovered in diligence) and close as soon as possible, and on the timeline set forth herein. This Commitment supersedes and replaces all prior proposals related to the subject matter hereof.

We have spent considerable time and effort in our evaluation of the Company to date, and we are prepared to move expeditiously to complete our confirmatory legal diligence (Morrison & Foerster) and negotiate definitive documentation. All of our business diligence is complete. We are ready to close from a commercial perspective, pending completion of confirmatory legal, documentation and regulatory work. Our goal is to execute a definitive share purchase agreement ("SPA") evidencing the transactions contemplated hereby (the "Transactions") within four weeks of signing this Commitment and close the Transactions promptly upon receipt of regulatory approval.

We enjoyed our time getting to know TTC and the Management team. We developed a plan for managing the Company's complexities and are confident about consummating the Transactions. Conversely, we believe the complexity of the Veterans Affairs relationship and the need for significant operational improvements will prove to be insurmountable challenges for interested third parties. We understand these complexities and believe we are the only bidder capable of creating long-term success for the Company while continuing to provide exceptional care for patients. We therefore believe, including based on the time commitments noted above, that we offer the best option in terms of speed and certainty of closing.

We are willing to file for regulatory approval(s) immediately (subject to regulatory counsel confirmation of feasibility absent definitive transaction documentation). Our regulatory process should be relatively quick because Beck, who is part of the ownership group, was previously approved in connection with his prior ownership of TTC, as opposed to any other party who will be starting this process from square one.

We believe our Commitment offers the best available path for the Debtors and their creditors to maximize value. We are ready, willing and able to consummate the Transactions, providing an expedited disposition of a complex asset.

This Commitment will expire at 11:59pm ET on September 20, 2024 unless UpHealth (i) executes and returns to F3C a countersigned copy of this Commitment prior to such time and (ii) files (a) within 24 hours after execution hereof, a notice to the Bankruptcy Court docket cancelling the auction and, (b) within 48 hours after execution hereof, a motion seeking authority to enter into and perform under this Commitment (with no redactions) as a private sale (including with respect to the Bid Protections contained herein).

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Summary of Key Terms

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Thank you for your evaluation of our Commitment. Should you have any questions or comments in connection with herewith, please contact Brian Block at (650) 619-5275 or [email protected].