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JASON INDUSTRIES, INC.

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year first above written.

 

By:	/s/ Kevin Kuznicki
Name:	Kevin Kuznicki
Title:	Vice President

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[Consenting Creditor Signature Pages]

 

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OVERVIEW OF THE RESTRUCTURING

In general, the Restructuring contemplates that: (a)    The Debtors will implement the Restructuring in the Bankruptcy Court pursuant to the Plan on the terms set forth in this Term Sheet and RSA, and in accordance with the Milestones attached hereto as Exhibit B. (b)     The First Lien Ad Hoc Group consents to the use of cash collateral securing the First Lien Credit Agreement Claims to fund the Chapter 11 Cases, as set forth in Exhibit C to the RSA. (c)    On the Open Market Buy‑Back Date, the Company Parties shall effectuate (1) the Open Market Purchases, and (2) shall make payment of 2.00% of the Forbearance Fee consistent with section 6.04 of the RSA.  The remaining 2.00% of the Forbearance Fee (the Forbearance Fee Deferred Portion) shall be paid according to the terms of section 6.04 of the RSA. (d)     On the Plan Effective Date, New Holdco will enter into a third-party asset-based exit financing that (i) provides availability as of the Closing Date of at least $20 million for revolving borrowings after permitting for any amounts on account of outstanding letters of credit; and (ii) has aggregate total commitments in an amount not less than $30 million (the “New Revolving Exit Facility”) on terms acceptable to the Consenting First Lien Lenders. (e)     On the Plan Effective Date, in full and final satisfaction, settlement, release, and discharge of and in exchange for each First Lien Credit Agreement Secured Claim, each Holder thereof shall receive its Pro Rata share of and interest in:  (i) the $75 million New First Lien Credit Facility; (ii) the $50 million New Junior Convertible Term Loan; (iii) 100% of the New Jason Equity, subject to dilution by the Warrants, Management Incentive Plan, and New Junior Convertible Term Loan; provided that 10% of such New Jason Equity, subject to dilution by the Warrants, Management Incentive Plan, and New Junior Convertible Term Loan, shall be distributed on account of Class 5 Claims, as provided herein; and (iv) if applicable, the First Lien Put Option. (f)      On the Plan Effective Date, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Class 4 Claim, each Holder of a First Lien Credit Agreement Deficiency Claim shall receive no distribution.2 (g)     In partial satisfaction of First Lien Credit Agreement Claims, New Holdco will  use the First Lien Credit Agreement Secured Claims to acquire 100% of the assets of the Debtors, pursuant to sections 1123(a)(5)(d) & 1129(b)(2)(a)(ii). Such credit bid may be effectuated via merger, amalgamation, consolidation, or otherwise. (h)     In full and final satisfaction, settlement, release, and discharge of and in exchange for each Second Lien Credit Agreement Claim, each Holder thereof shall receive either:  (i) if Class 5 timely accepts the Plan, its Pro Rata share of and interest in (x) 10% of the new Jason Equity subject to dilution by the Warrants, Management Incentive Plan, and New Junior Convertible Term Loan; and (y) Warrants for 10.0% of the New Jason Equity at an aggregate equity value strike price at $[●];3 and (ii) if Class 5 rejects the Plan, no distribution. (i)      All General Unsecured Claims will be paid in full or otherwise provided such treatment as to render them Unimpaired.4 (j)      At the option of the Reorganized Debtors’, Intercompany Claims and Intercompany Interests shall be either Reinstated or cancelled and released without any distribution. (k)      Jason Preferred Interests shall be cancelled and released without any distribution. (l)       Jason Common Interests shall be cancelled and released without any distribution. This Term Sheet incorporates the rules of construction as set forth in section 102 of the Bankruptcy Code.

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TREATMENT OF CLAIMS AND INTERESTS OF THE DEBTORS UNDER THE PLAN
Class No.	Type of Claim	Treatment	Impairment / Voting
Unclassified Non-Voting Claims
N/A	Administrative Claims	Except to the extent that a Holder of an Allowed Administrative Claim agrees to a less favorable treatment, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Administrative Claim, on the Plan Effective Date or as soon as reasonably practicable thereafter, each Holder thereof shall receive payment in full in cash.	N/A
N/A	Priority Tax Claims	Except to the extent that a Holder of an Allowed Priority Tax Claim agrees to a less favorable treatment, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Priority Tax Claim, each Holder of such Allowed Priority Tax Claim shall be treated in accordance with the terms set forth in section 1129(a)(9)(C) of the Bankruptcy Code.	N/A
N/A	Restructuring Expenses	During the period commencing on the Petition Date through the Plan Effective Date, the Debtors will promptly pay, in full in cash any Restructuring Expenses in accordance with the terms of the RSA and Cash Collateral Orders. Without limiting the foregoing, to the extent that any Restructuring Expenses remain accrued and/or unpaid as of the Plan Effective Date, on the Plan Effective Date, the Reorganized Debtors shall pay in full in cash any outstanding Restructuring Expenses without the requirement for the filing of retention applications, fee applications, or any other applications in the chapter 11 cases, and without any requirement for further notice or Bankruptcy Court review or approval. For the avoidance of doubt, any Restructuring Expenses invoiced after the Plan Effective Date shall be paid promptly, but no later than ten (10) business days of receiving an invoice.

Classified Claims and Interests of the Debtors
Class 1	Other Secured Claims	Except to the extent that a Holder of an Allowed Other Secured Claim agrees to less favorable treatment, on the Plan Effective Date, or as soon as reasonably practicable thereafter, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for such Allowed Other Secured Claim, each Holder thereof shall receive, at the option of the applicable Debtor(s), or Reorganized Debtor(s), as applicable:  (a) payment in full in Cash; (b) the collateral securing its Allowed Other Secured Claim; (c) Reinstatement of its Allowed Other Secured Claim; or (d) such other treatment rendering its Allowed Other Secured Claim Unimpaired in accordance with section 1124 of the Bankruptcy Code.	Unimpaired; deemed to accept
Class 2	Other Priority Claims	Except to the extent that a Holder of an Allowed Other Priority Claim agrees to less favorable treatment, on the Plan Effective Date, or as soon as reasonably practicable thereafter, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for such Allowed Other Priority Claim, each Holder thereof shall receive payment in full in Cash or such other treatment rendering its Allowed Other Priority Claim Unimpaired in accordance with section 1124 of the Bankruptcy Code.	Unimpaired; deemed to accept
Class 3	First Lien Secured Credit Agreement Claims	Allowance: First Lien Secured Credit Agreement Claims shall be Allowed in an amount not less than $[•]. Treatment: Except to the extent that a Holder of a First Lien Credit Agreement Claim agrees to less favorable treatment, on the Plan Effective Date, in full and final satisfaction, settlement, release, and discharge of and in exchange for each First Lien Credit Agreement Claim, each Holder thereof shall receive its Pro Rata share of and interest in:  (i) the New First Lien Credit Facility; (ii) New Junior Lien Credit Facility; (iii) 100% of the New Jason Equity, subject to dilution by the Warrants, Management Incentive Plan, and New Junior Convertible Term Loan; provided that 10% of such New Jason Equity, subject to dilution by the Warrants, Management Incentive Plan, and New Junior Convertible Term Loan, shall be distributed on account of Class 5 Claims, as provided herein (iv) if applicable, the First Lien Put Option, and (v) the Warrants, which Warrants shall be distributed on account of Class 5 Claims, as provided herein.	Impaired; entitled to vote

Class 4	First Lien Deficiency Claims	Allowance: First Lien Deficiency Claims shall be Allowed in an amount not less than $[•]. Treatment: Except to the extent that a Holder a First Lien Deficiency Claim agrees to less favorable treatment, on the Plan Effective Date, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for each Allowed Class 4 Claim, each Holder thereof shall receive no distribution.	Impaired; entitled to vote
Class 5	Second Lien Credit Agreement Claims	Allowance: Second Lien Credit Agreement Claims shall be Allowed in an amount equal to $[•]. Treatment: Except to the extent that a Holder of a Second Lien Credit Agreement Claim agrees to less favorable treatment, on the Plan Effective Date, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for each Allowed Class 5 Claim, each Holder thereof shall receive as a carve-out from the collateral securing the First Lien Secured Credit Agreement Claims: (i) if Class 5 timely accepts the Plan, its Pro Rata share of and interest in (x) 10% of the New Jason Equity subject to dilution by the Warrants, Management Incentive Plan, and New Junior Convertible Term Loan; and (y) Warrants for 10.0% of the New Jason Equity at an aggregate equity value strike price at $[●];5 and (ii) if Class 5 rejects the Plan, no distribution.	Impaired; entitled to vote

Class 6	General Unsecured Claims6	Except to the extent that a Holder of an Allowed General Unsecured Claim agrees to less favorable treatment, on the Plan Effective Date, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for each Allowed General Unsecured Claim, each Holder thereof shall receive, at the election of the Debtors or the Reorganized Debtors, as applicable, either:  (a) Reinstatement of such Allowed General Unsecured Claim pursuant to section 1124 of the Bankruptcy Code; (b) payment in full in Cash on the later of (i) the Plan Effective Date or as soon as reasonably practicable thereafter, or (ii) the date such payment is due in the ordinary course of business in accordance with the terms and conditions of the particular transaction giving rise to such Allowed General Unsecured Claim; or (c) such other treatment rendering such Allowed General Unsecured Claim Unimpaired.	Unimpaired; deemed to accept
Class 7	Intercompany Claims	On the Plan Effective Date, each Intercompany Claim shall be, at the option of the Debtors or the Reorganized Debtors, as applicable, either Reinstated or cancelled and released without any distribution.	Impaired; deemed to reject or Unimpaired; deemed to accept
Class 8	Intercompany Interests	On the Plan Effective Date, Intercompany Interests shall be, at the option of the Debtors or the Reorganized Debtors, as applicable, either Reinstated or cancelled and released without any distribution.	Impaired; deemed to reject or Unimpaired; deemed to accept
Class 9	Jason Common Interests	Jason Common Interests shall be cancelled and released without any distribution.	Impaired; deemed to reject
Class 10	Jason Preferred Interests	Jason Preferred Interests shall be cancelled and released without any distribution.	Impaired; deemed to reject

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GENERAL PROVISIONS REGARDING THE PLAN
Subordination	The allowance, classification, and treatment of all allowed Claims and allowed Interests and the respective distributions and treatments under the Plan take into account and conform to the relative priority and rights of the Claims and Interests in each Class in connection with any contractual, legal, and equitable subordination rights relating thereto, whether arising under general principles of equitable subordination, section 510(b) of the Bankruptcy Code, or otherwise. Pursuant to section 510 of the Bankruptcy Code, the Debtors reserve the right to re-classify any Allowed Claim or Allowed Interest in accordance with any contractual, legal, or equitable subordination relating thereto except as otherwise provided by the RSA and this Term Sheet.
Restructuring Transactions	The Confirmation Order shall be deemed to authorize, among other things, all actions as may be necessary or appropriate to effect any transaction described in, approved by, contemplated by, or necessary to effectuate the Plan and Plan Supplement and the issuance of all Securities, notes, instruments, certificates, and other documents required to be issued pursuant to the Restructuring (collectively, the “Restructuring Transactions”).  On the Plan Effective Date, the Reorganized Debtors shall issue all Securities, notes, instruments, certificates, and other documents required to be issued pursuant to the Restructuring.
Cancellation of Notes, Instruments, Certificates, and Other Documents	On the Plan Effective Date, unless otherwise specified in the Plan, all notes, instruments, certificates, and other documents evidencing Claims or Interests, including credit agreements, shall be cancelled, and the obligations of the Debtors and any non-Debtor Affiliates thereunder or in any way related thereto shall be deemed satisfied in full and discharged.
Executory Contracts and Unexpired Leases	The Plan will provide that the executory contracts and unexpired leases that are not assumed or rejected as of the Plan Effective Date (either pursuant to the Plan or a separate motion) will be deemed assumed pursuant to section 365 of the Bankruptcy Code, in each case subject to the prior consent of the First Lien Ad Hoc Group (such consent not to be unreasonably withheld). The Debtors shall serve rejection notices in respect of each rejected executory contract and unexpired lease on the applicable counterparties in accordance with procedures set forth in the Plan.
Retention of Jurisdiction	The Plan will provide for the retention of jurisdiction by the Bankruptcy Court for usual and customary matters related to the Plan and the Restructuring.

GENERAL PROVISIONS REGARDING THE PLAN
Discharge of Claims and Termination of Interests	Pursuant to section 1141(d) of the Bankruptcy Code, and except as otherwise specifically provided in the Plan or in any contract, instrument, or other agreement or document created pursuant to the Plan, the distributions, rights, and treatment that are provided in the Plan shall be in complete satisfaction, discharge, and release, effective as of the Plan Effective Date, of Claims (including any Intercompany Claims resolved or compromised after the Plan Effective Date by the Reorganized Debtors), Interests, and Causes of Action of any nature whatsoever, including any interest accrued on Claims or Interests from and after the Petition Date, whether known or unknown, against, liabilities of, Liens on, obligations of, rights against, and Interests in, the Debtors or any of their assets or properties, regardless of whether any property shall have been distributed or retained pursuant to the Plan on account of such Claims and Interests, including demands, liabilities, and Causes of Action that arose before the Plan Effective Date, any liability (including withdrawal liability) to the extent such Claims or Interests relate to services performed by employees of the Debtors before the Plan Effective Date and that arise from a termination of employment, any contingent or noncontingent liability on account of representations or warranties issued on or before the Plan Effective Date, and all debts of the kind specified in sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, in each case whether or not: (a) a Proof of Claim based upon such debt or right is Filed or deemed Filed pursuant to section 501 of the Bankruptcy Code; (b) a Claim or Interest based upon such debt, right, or Interest is Allowed pursuant to section 502 of the Bankruptcy Code; or (c) the Holder of such a Claim or Interest has accepted the Plan. Any default or “event of default” by the Debtors or Affiliates with respect to any Claim or Interest that existed immediately before or on account of the Filing of the Chapter 11 Cases shall be deemed cured (and no longer continuing) as of the Plan Effective Date. The Confirmation Order shall be a judicial determination of the discharge of all Claims and Interests subject to the Plan Effective Date occurring.
Releases by the Debtors	Notwithstanding anything contained in the plan to the contrary, pursuant to Section 1123(b) of the Bankruptcy Code, for good and valuable consideration, on and after the Plan Effective Date, each Released Party is deemed released and discharged by the Debtors, the Reorganized Debtors, and their Estates from any and all Claims and Causes of Action, whether known or unknown, including any derivative Claims asserted or assertable on behalf of the Debtors or their Estates, that the Debtors, the Reorganized Debtors, or their Estates would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the holder of any claim against, or interest in, a Debtor or other entity, based on or relating to, or in any manner arising from, in whole or in part, the Debtors (including the management, ownership, or operation thereof), any Securities issued by the Debtors and the ownership thereof, the Debtors’ in- or out-of-court restructuring efforts, the First Lien Credit Agreement, the Second Lien Credit Agreement, any Avoidance Actions (but excluding avoidance actions brought as counterclaims or defenses to claims asserted against the debtors), any intercompany transaction, the Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, or filing of the Restructuring Support Agreement, the Disclosure Statement, the Plan, the Plan Supplement, or any Restructuring Transaction, contract, instrument, release, or other agreement or document created or entered into in connection with the Restructuring Support Agreement, the Disclosure Statement, the Plan, the Plan Supplement, the Chapter 11 Cases, the filing of the chapter 11 cases, the New First Lien Credit Agreement, the New First Lien Credit Agreement Documents, the New Junior Lien Credit Agreement, the New Junior Lien Credit Agreement Documents, the New Revolving Exit Facility, solicitation of votes on the Plan, the prepetition negotiation and settlement of Claims, the pursuit of Confirmation, the pursuit of consummation, the administration and implementation of the Plan, including the issuance or distribution of debt and/or preferred equity (including the New First Lien Term Loan, New Junior Convertible Term Loans, and the New Revolving Exit Facility) and/or Securities (including the New Jason Equity and the Warrants) pursuant to the Plan, or the distribution of property under the plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place on or before the Plan Effective Date.  Notwithstanding anything to the contrary in the foregoing, the Releases set forth above do not release any post-Plan Effective Date obligations of any Party or Entity under the Plan, any Restructuring Transaction, or any document, instrument, or agreement (including the New First Lien Credit Agreement Documents, New Junior Lien Credit Agreement Documents, and other documents, instruments and agreements set forth in the Plan Supplement) executed to implement the plan and shall not result in a release, waiver, or discharge of any of the Debtors’ or the Reorganized Debtors’ assumed indemnification provisions as set forth in the Plan.   Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 9019, of the Debtor Release, which includes by reference each of the related provisions and definitions contained in the Plan, and further, shall constitute the Bankruptcy Court’s finding that the Debtor Release is:  (a) in exchange for the good and valuable consideration provided by the released parties, including, without limitation, the released parties’ contributions to facilitating the restructuring and implementing the Plan; (b) a good faith settlement and compromise of the Claims released by the Debtor Release; (c) in the best interests of the Debtors and all Holders of Claims and Interests; (d) fair, equitable, and reasonable; (e) given and made after due notice and opportunity for hearing; and (f) a bar to any of the Debtors, the Reorganized Debtors, or the Debtors’ Estates asserting any Claim or Cause of Action released pursuant to the Debtor Release.

GENERAL PROVISIONS REGARDING THE PLAN

Releases by Holders of Claims and Interests

Notwithstanding anything contained in the Plan to the contrary, as of the Plan Effective Date, and to the fullest extent allowed by applicable law, each Releasing Party is deemed to have released and discharged each Debtor, Reorganized Debtor, and Released Party from any and all Claims and Causes of Action, whether known or unknown, including any derivative claims asserted or assertable on behalf of the Debtors, or their Estates, that such Entity would have been legally entitled to assert (whether individually or collectively), based on or relating to, or in any manner arising from, in whole or in part, the Debtors (including the management, ownership or operation thereof), any Securities issued by the Debtors and the ownership thereof, the Debtors’ in-or-out-of-court restructuring efforts, the First Lien Credit Agreement, the Second Lien Credit Agreement, any Avoidance Actions (but excluding Avoidance Actions brought as counterclaims or defenses to asserted against the Debtors), any Intercompany Transaction, the Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, or filing of the Restructuring Support Agreement, the Disclosure Statement, the Plan, the Plan Supplement, or any Restructuring Transaction, contract, instrument, release, or other agreement or document created or entered into in connection with the Restructuring Support Agreement, the Disclosure Statement, the Plan, the Plan Supplement, the New First Lien Credit Agreement, the New First Lien Credit Agreement Documents, the New Junior Lien Credit Agreement, the New Junior Lien Credit Agreement Documents, solicitation of votes on the Plan, the prepetition negotiation and settlement of Claims, the pursuit of Confirmation, the pursuit of consummation, the administration and implementation of the Plan, including the issuance or distribution of debt and/or preferred equity (including the New First Lien Term Loans, New Junior Convertible Term Loans, and the New Revolving Exit Facility), and/or Securities (including the New Jason Equity and the Warrants) pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place on or before the Plan Effective Date.   Notwithstanding anything to the contrary in the foregoing, the Releases set forth above do not release any post-Plan Effective Date obligations of any Party or entity under the Plan, any Restructuring Transaction, or any document, instrument, or agreement (including the New First Lien Credit Agreement Documents, the New Junior Lien Credit Agreement Documents, and other documents, instruments, and agreements set forth in the Plan Supplement) executed to implement the Plan and shall not result in a release, waiver, or discharge of any of the Debtors’ or the Reorganized Debtors’ assumed indemnification provisions as set forth in the Plan.   Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 9019, of the Third-Party Release, which includes by reference each of the related provisions and definition contained in the Plan, and, further, shall constitute the Bankruptcy Court’s finding that the Third-Party Release is:  (a) consensual; (b) essential to the Confirmation of the Plan; (c) given in exchange for the good and valuable consideration provided by the Released Parties, including, without limitation, the Released Parties’ contributions to facilitating the Restructuring and implementing the Plan; (d) a good faith settlement and compromise of the Claims released by the Third-Party Release; (e) in the best interests of the Debtors and their Estates; (f) fair, equitable, and reasonable; (g) given and made after due notice and opportunity for hearing; and (h) a bar to any of the Releasing Parties asserting any Claim or Cause of action released pursuant to the Third-Party Release.

GENERAL PROVISIONS REGARDING THE PLAN

Exculpation

Notwithstanding anything contained in the Plan to the contrary, no Exculpated Party shall have or incur liability for, and each Exculpated Party is released and exculpated from, any Cause of Action for any Claim related to any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, or filing of the Restructuring Support Agreement and related prepetition transactions, the Disclosure Statement, the Plan, the Plan Supplement, or any Restructuring Transaction, contract, instrument, release, or other agreement or document created or entered into in connection with the Restructuring Support Agreement, the Disclosure Statement, the Plan, the Plan Supplement, the Chapter 11 Cases, the filing of the Chapter 11 Cases, the New First Lien Credit Agreement, the New First Lien Credit Agreement Documents, the New Junior Lien Credit Agreement, the New Junior Lien Credit Agreement Documents, and solicitation of votes on the Plan, the prepetition negotiation and settlement of Claims, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance or distribution of debt and/or preferred equity (including the New First Lien Term Loans, New Junior Convertible Term Loans, and the New Revolving Exit Facility) and/or Securities (including the New Jason Equity and the Warrants) pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, or upon any other related act or omission, transaction, agreement, event, or other occurrence taking place on or before the Plan Effective Date, except for Claims related to any act or omission that is determined in a Final Order by a court of competent jurisdiction to have constituted actual fraud, willful misconduct, or gross negligence, but in all respects such entities shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to the Plan.   The Exculpated Parties have, and upon Confirmation of the Plan shall be deemed to have, participated in good faith and in compliance with the applicable laws with regard to the solicitation of votes on, and distribution of consideration pursuant to, the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan.  Notwithstanding anything to the contrary in the foregoing, the exculpation set forth above does not release or exculpate any Claim relating to any post-Plan Effective Date obligations of any Party or Entity under the Plan, any Restructuring Transaction, or any document, instrument, or agreement (including the New First Lien Credit Agreement Documents, the New Junior Lien Credit Agreement Documents, and other documents, instruments and agreements set forth in the Plan Supplement) executed to implement the Plan.

GENERAL PROVISIONS REGARDING THE PLAN

Injunction

Except as otherwise provided in the Plan or the Confirmation Order, all Entities who have held, hold, or may hold Claims, Interests, Causes of Action, or liabilities that:  (a) are subject to compromise and settlement pursuant to the terms of the Plan; (b) have been released pursuant to section [●] of the Plan; (c) have been released pursuant to section [●] of the Plan; (d) are subject to exculpation pursuant to section [●] of the Plan; or (e) are otherwise discharged, satisfied, stayed, or terminated pursuant to the terms of the Plan, are permanently enjoined and precluded, from and after the Plan Effective Date, from taking any of the following actions against, as applicable, the Debtors, the Reorganized Debtors, the Released Parties, or the Exculpated Parties:  (1) commencing or continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any such Claims or Interests; (2) enforcing, attaching, collecting, or recovering by any manner or means any judgment, award, decree, or order against such entities on account of or in connection with or with respect to any such Claims or Interests; (3) creating, perfecting, or enforcing any encumbrance of any kind against such Entities or the property or Estates of such Entities on account of or in connection with or with respect to any such Claims or Interests; (4) asserting any right of setoff, subrogation, or recoupment of any kind against any obligation due from such Entities or against the property of such Entities on account of or in connection with or with respect to any such claims or interests unless such entity has timely asserted such setoff right in a document filed with the Bankruptcy Court explicitly preserving such setoff, and notwithstanding an indication of a Claim or Interest or otherwise that such Entity asserts, has, or intends to preserve any right of setoff pursuant to applicable law or otherwise; and (e) commencing or continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any such Claims or Interests discharged, released, exculpated, or settled pursuant to the Plan.

OTHER MATERIAL PROVISIONS REGARDING THE RESTRUCTURING
Management Incentive Plan	Following the Plan Effective Date, the Reorganized Debtors shall adopt and implement the Management Incentive Plan.  Awards under the Management Incentive Plan shall be granted by the compensation committee of the New Board.
Transaction Structure	The Restructuring Transactions and related transactions shall be structured (i) in a tax efficient manner for the Debtors and the First Lien Ad Hoc Group in accordance with the Plan and Plan Supplement and (ii) such that Reorganized Jason will not be subject to public-reporting requirements following the Plan Effective Date.7
Structurally Senior Debt	All debt will remain in place at non‑Debtor foreign entities (subject to diligence by the First Lien Ad Hoc Group).

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Insurance	The Debtors shall continue to satisfy their surety bonds and insurance policies in full (including any D&O Liability Insurance Policies, including, without limitation, any “tail policy” and all agreements, documents, or instruments related thereto) and continue such programs in the ordinary course of business.  Each of the Debtors’ surety bonds and insurance policies, and any agreements, documents, or instruments relating thereto shall be treated as Executory Contracts under the Plan.  Unless otherwise provided in the Plan, on the Plan Effective Date:  (a) the Debtors shall be deemed to have assumed all such surety bonds and insurance policies and any agreements, documents, and instruments relating to coverage of all insured Claims; and (b) such surety bonds and insurance policies and any agreements, documents, or instruments relating thereto shall revest in the applicable Reorganized Debtor(s).
D&O Insurance	Each D&O Liability Insurance Policy (including, without limitation, any “tail policy” and all agreements, documents, or instruments related thereto) shall be deemed assumed without the need for any further notice to or action, order, or approval of the Bankruptcy Court, as of the Plan Effective Date, pursuant to section 365 of the Bankruptcy Code. The Debtors or the Reorganized Debtors, as applicable, shall not terminate or otherwise reduce the coverage under any D&O Liability Insurance Policy (including, without limitation, any “tail policy” and all agreements, documents, or instruments related thereto) in effect prior to the Plan Effective Date, and any current and former directors, officers, managers, and employees of the Debtors who served in such capacity at any time before or after the Plan Effective Date shall be entitled to the full benefits of any such policy for the full term of such policy regardless of whether such directors, officers, managers, and employees remain in such positions after the Plan Effective Date.
Employment Obligations	Except as provided herein, including with respect to “Employment Agreements”, all employee wages, compensation, benefit, and incentive programs in place as of the Plan Effective Date with the Company Parties shall be assumed, or assumed and amended on terms no less favorable than the terms that were in place on the Plan Effective Date, by Reorganized Debtors and shall remain in place as of the Plan Effective Date, and Reorganized Debtors will continue to honor such agreements, arrangements, programs, and plans in each case other than with respect to any programs with respect to Interests (such as stock, options, warrants, or RSUs, each of which shall be deemed to be no longer valid, binding, or effective with respect to the Reorganized Debtors).   Notwithstanding the foregoing, pursuant to section 1129(a)(13) of the Bankruptcy Code, from and after the Plan Effective Date, all retiree benefits (as such term is defined in section 1114 of the Bankruptcy Code), if any, shall continue to be paid in accordance with applicable law.
Executive Employment Agreements	The Executives and the First Lien Ad Hoc Group shall in good faith negotiate new or amended employment agreements, the terms and conditions of which shall be reasonably acceptable to the Company and acceptable to each Executive and the First Lien Ad Hoc Group; provided that in conjunction with any agreement executed on the Plan Effective Date, such executive shall waive any change of control bonuses to which they would be entitled under their existing employment agreements; provided further that if an agreement is not reached, the relevant Executive shall be entitled to the severance payment set forth in his current Employment Agreement.

Indemnification of Prepetition Directors, Officers, Managers, et al.	Consistent with applicable law, each of the Debtors’ indemnification provisions in effect as of the Petition Date, whether in the Debtors’ bylaws, certificates of incorporation, other formation documents, board resolutions, management, indemnification agreements, employment contracts, or otherwise providing a basis for any obligation of a Debtor to indemnify, defend, reimburse, or limit the liability of, or to advance fees and expenses to, any of the Debtors’ current and former directors, officers, equityholders, managers, officers, members, employees, accountants, investment bankers, attorneys, other agents, and professionals of the Debtors, and such current and former directors’, officers’, and managers’ respective Affiliates (each of the foregoing solely in their capacity as such), as applicable, shall be assumed and reinstated and remain intact, irrevocable, and shall survive the effectiveness of the Restructuring on terms no less favorable to such current and former directors, officers, equityholders, managers, officers, members, employees, accountants, investment bankers, attorneys, other professionals, agents of the Debtors, and such current and former directors’, officers’, and managers’ respective Affiliates (each of the foregoing solely in their capacity as such), other agents and professionals of the Debtors, and such current and former directors’, officers’, and managers’ respective Affiliates than the indemnification provisions in place as of the Petition Date.
Claims of the Debtors	The Reorganized Debtors shall retain all rights to commence and pursue any Causes of Action, other than any Causes of Action released by the Debtors pursuant to the release and exculpation provisions outlined in this Term Sheet.
Vesting of Assets	Subject to the Restructuring Transactions, on the Plan Effective Date, pursuant to sections 1141(b) and (c) of the Bankruptcy Code, all assets of the Debtors’ Estates will vest in the Reorganized Debtor(s) and/or New Holdco, as applicable, free and clear of all claims, liens, encumbrances, charges, and other interests, except as otherwise provided in the Plan.
Additional Plan Provisions and Documentation	The Plan shall contain other customary provisions for chapter 11 plans of this type, which provisions shall be consistent with this Term Sheet and the RSA and otherwise acceptable to the First Lien Ad Hoc Group.

Conditions Precedent to Restructuring

The following shall be conditions to the Plan Effective Date (the “Conditions Precedent”):   (a)      the Bankruptcy Court shall have entered the Confirmation Order; (b)     the final version of the Plan Supplement and all of the schedules, documents, and exhibits contained therein, and all other schedules, documents, supplements and exhibits to the Plan, shall have been filed; (c)     the RSA shall not have been terminated; (d)     a Termination Event (as defined by the Cash Collateral Orders) shall not have occurred; (e)     the Debtors shall have obtained all authorizations, consents and approvals, rulings, or  regulatory, governmental, and third party documents that are necessary to implement and effectuate the Plan, and all applicable regulatory or government-imposed waiting periods have expired or been terminated; (f)      the New First Lien Credit Agreement Documents, the New Junior Lien Credit Agreement Documents, and the New Revolving Exit Facility shall be in full force and effect (with all conditions precedent thereto having been satisfied or waived), subject to any applicable post-closing execution and delivery requirements; (g)     the New Organizational Documents shall be in full force and effect (with all conditions precedent thereto having been satisfied or waived); (h)     all Restructuring Expenses shall have been indefeasibly paid in full; (i)      all professional fees and expenses of Retained Professionals approved by the Bankruptcy Court shall have been paid in full or amounts sufficient to pay such fees and expenses after the Plan Effective Date have been placed in a Professional Fee Escrow Account pending approval by the Bankruptcy Court; (j)       the First Lien Put Backstop Commitment has been provided (if applicable); and (k)      the Reorganized Debtors shall satisfy the Minimum Liquidity Threshold.

Waiver of Conditions Precedent to the Plan Effective Date

The Debtors may waive any of the conditions to the Plan Effective Date set forth in the Plan (except for the condition to the Plan Effective Date set forth therein) at any time, without any notice to any other parties in interest and without any further notice to or action, order, or approval of the Bankruptcy Court, and without any formal action other than a proceeding to confirm the Plan or consummate the Plan, subject to the consent of the First Lien Ad Hoc Group in its sole discretion.

CORPORATE GOVERNANCE PROVISIONS/SEC REGISTRATION EXEMPTION
New Board	On the Plan Effective Date, the terms of the current members of the board of directors of Jason shall expire, and the board of directors of Reorganized Jason (the “New Board”) shall be appointed on the Plan Effective Date in accordance with the terms and conditions set forth in of the applicable New Organizational Documents (defined herein) and Stockholder Agreement (as defined herein) and the identities of directors on the New Board shall be set forth in the Plan Supplement to the extent known at the time of filing of such.  The New Board shall be comprised of the CEO of Reorganized Jason and such other members to be selected by the First Lien Ad Hoc Group.
Governance	Corporate governance for the Reorganized Debtors, including charters, bylaws, operating agreements, or other organization documents, as applicable (the “New Organizational Documents”),  and stockholder agreements of Reorganized Jason (the “Stockholder Agreement”) shall be in a form acceptable to the First Lien Ad Hoc Group and consistent with section 1123(a)(6) of the Bankruptcy Code (as applicable). The New Organizational Documents and Stockholder Agreement, as applicable, should provide for, among other things: (a) customary information rights, registration rights, and preemptive rights; (b) for so long as the Convertible Term Loan remains outstanding, it shall be stapled to the equity and any holder thereof must trade the two together; (c) other customary transfer restrictions as may be determined by the Ad Hoc Group.
Exemption from SEC Registration	The issuance of all securities under the Plan will be exempt from  registration under the Securities Act and applicable law.

Term	Definition
Administrative Claim	A Claim incurred by the Debtors on or after the Petition Date and before the Plan Effective Date for a cost or expense of administration of the Chapter 11 Cases entitled to priority under sections 503(b), 507(a)(2), or 507(b) of the Bankruptcy Code, including:  (a) the actual and necessary costs and expenses incurred on or after the Petition Date until and including the Plan Effective Date of preserving the Estates and operating the Debtors’ businesses; (b) Allowed Professional Fee Claims; and (c) all fees and charges assessed against the Estates pursuant to section 1930 of chapter 123 of title 28 of the United States Code.
Affiliate	As defined in section 101(2) of the Bankruptcy Code.
Allowed	With respect to any Claim or Interest:  (a) a Claim or Interest as to which no objection has been filed and that is evidenced by a Proof of Claim or Interest, as applicable, timely filed by the applicable Bar Date, if any, or that is not required to be evidenced by a filed Proof of Claim or Interest, as applicable, under the Plan, the Bankruptcy Code, or a Final Order; (b) a Claim or Interest that is scheduled by the Debtors as neither disputed, contingent, nor unliquidated, and as for which no Proof of Claim or Interest, as applicable, has been timely filed; or (c) a Claim or Interest that is Allowed (i) pursuant to the Plan, (ii) in any stipulation that is approved by the Bankruptcy Court, or (iii) pursuant to any contract, instrument, indenture, or other agreement entered into or assumed in connection herewith.  Except as otherwise specified in the Plan or any Final Order, the amount of an Allowed Claim shall not include interest or other charges on such Claim from and after the Petition Date.  No Claim of any Entity subject to section 502(d) of the Bankruptcy Code shall be deemed Allowed unless and until such Entity pays in full the amount that it owes such Debtor or Reorganized Debtor, as applicable.
Bankruptcy Rules	The Federal Rules of Bankruptcy Procedure promulgated under section 2075 of title 28 of the United States Code, and the general, local, and chambers rules of the Bankruptcy Court.
Cash Collateral Orders	Means the interim and final Cash Collateral Orders entered in the chapter 11 cases to which shall be in form and substance satisfactory to the Required Consenting Creditors, and which interim order is attached to the RSA as Exhibit C to the RSA.
Cause of Action	Any claims, interests, damages, remedies, causes of action, demands, rights, actions, suits, obligations, liabilities, accounts, defenses, offsets, powers, privileges, licenses, liens, indemnities, guaranties, and franchises of any kind or character whatsoever, whether known or unknown, choate or inchoate, foreseen or unforeseen, existing or hereinafter arising, contingent or non-contingent, liquidated or unliquidated, secured or unsecured, assertable, directly or derivatively, matured or unmatured, suspected or unsuspected, in contract, tort, law, equity, or otherwise. Causes of Action also include: (a) all rights of setoff, counterclaim, or recoupment and claims under contracts or for breaches of duties imposed by law; (b) any claim based on or relating to, or in any manner arising from, in whole or in part, breach of fiduciary duty, violation of local, state, federal, or foreign law, or breach of any duty imposed by law or in equity, including securities laws, negligence, and gross negligence; (c) the right to object to or otherwise contest Claims or Interests; (d) claims pursuant to sections 362, 510, 542, 543, 544 through 550, or 553 of the Bankruptcy Code; and (e) such claims and defenses as fraud, mistake, duress, and usury, and any other defenses set forth in section 558 of the Bankruptcy Code.

Class	A category of Holders of Claims or Interests pursuant to section 1122(a) of the Bankruptcy Code.
Company Parties	As defined in the RSA.
Confirmation	Entry of the Confirmation Order on the docket of the Chapter 11 Cases.
Confirmation Date	The date on which the Bankruptcy Court enters the Confirmation Order on the docket of the Chapter 11 Cases.
Confirmation Hearing	The hearing(s) before the Bankruptcy Court under section 1128 of the Bankruptcy Code at which the Debtors seek entry of the Confirmation Order.
Consenting First Lien Lenders	As defined in the RSA.
Consummation	The occurrence of the Plan Effective Date.
D&O Liability Insurance Policies	All unexpired directors’, managers’, and officers’ liability insurance policies (including any “tail policy” and all agreements, documents, or instruments related thereto) of any of the Debtors that have been issued or provide coverage to current and former directors, managers, officers, and employees of the Debtors.
Estate	The estate of any Debtor created under sections 301 and 541 of the Bankruptcy Code upon the commencement of the applicable Debtor’s Chapter 11 Case.
Exculpated Parties	Collectively, each of the following, solely in its capacity as such: (a) the Debtors and Reorganized Debtors; (b) to the maximum extent permitted by law, each member of the First Lien Ad Hoc Group; (c) to the maximum extent permitted by law, each Consenting Creditor; and (d) each such Entity’s current and former Affiliates, and such Entities’ and their current and former Affiliates’ current and former directors, managers, officers, control persons, equity holders (regardless of whether such interests are held directly or indirectly), affiliated investment funds or investment vehicles, participants, managed accounts or funds, fund advisors, predecessors, successors, assigns, subsidiaries, principals, members, employees, agents, managed accounts or funds, management companies, fund advisors, advisory board members, financial advisors, partners, attorneys, accountants, investment bankers, consultants, representatives, investment managers, and other professionals, each in their capacity as such.

First Lien Ad Hoc Group	As defined in the RSA.
First Lien Credit Agreement Claim	Any Claim against a Debtor arising under, derived from, secured by, based on, or related to the First Lien Credit Agreement or any other agreement, instrument or document executed at any time in connection therewith including the First Lien Credit Agreement Ancillary Documents and all Obligations (as defined in the First Lien Credit Agreement) and any guaranty thereof.
First Lien Credit Agreement Secured Claim	Any First Lien Credit Agreement Claim that is Secured.
First Lien Credit Agreement Deficiency Claim	Any First Lien Credit Agreement Claim, or portion thereof, that is not Secured.
First Lien Put Backstop Parties	The First Priority Backstop Party plus one or more members of the First Lien Ad Hoc Group, as designated by the First Lien Ad Hoc Group.
First Lien Put Backstop Commitment	The First Priority Backstop Commitment plus the amount payable in cash by the First Lien Put Backstop Parties, together being sufficient to satisfy up to [•]%, but not to exceed $[•], participation of the exercise of the First Lien Put Option by Holders of First Lien Secured Credit Agreement Claims and provided prior to the date of solicitation of votes on the Plan by the First Lien Put Backstop Parties pursuant to signed commitment letter(s) each in a form and substance reasonably acceptable to the Debtors and acceptable to the Required Consenting Creditors.
First Lien Put Option	The right of any Holder of a First Lien Secured Credit Agreement Claim to offer the entirety of their Pro Rata distribution of both the (i) New Jason Equity, and (ii) New Junior Lien Convertible Credit Facility to the First Lien Put Backstop Parties (subject to the First Priority Backstop Commitment) at the First Lien Put Price; such right to be irrevocably exercised at the time of voting on the Plan.
First Lien Put Price	A price acceptable to the First Lien Put Backstop Parties, provided such price shall be agreed prior to solicitation of the Plan, and included in the Class 3 ballots for the First Lien Secured Credit Agreement Claims.
First Priority Backstop Commitment	A commitment payable in cash of $30 million entitling the First Priority Backstop Party to a fee payable as follows: (i) 100% of exercised First Lien Put Options up to $24 million of the First Priority Backstop Commitment, and thereafter, (ii) a pro rata share of all exercised First Lien Put Options until the entirety of the First Priority Backstop Commitment is exhausted.
First Priority Backstop Party	Pelican Loan Advisors III, LLC or such other affiliated entity designated by them.
Forbearance Fee	As defined in the RSA

General Unsecured Claim	Any Claim (other than an Administrative Claim, a Professional Fee Claim, a Secured Tax Claim, an Other Secured Claim, a Priority Tax Claim, an Other Priority Claim, a First Lien Credit Agreement Claim, a Second Lien Credit Agreement Claim, an Intercompany Claim, or a Section 510(b) Claim) against one or more of the Debtors, including (a) Claims arising from the rejection of Unexpired Leases and Executory Contracts to which a Debtor is a party, and (b) Claims arising from any litigation or other court, administrative or regulatory proceeding, including damages or judgments entered against, or settlement amounts owing by a Debtor related thereto.
Governmental Unit	As defined in section 101(27) of the Bankruptcy Code
Holder	An Entity holding a Claim or Interest in any Debtor, each in their capacity as such.
Impaired	With respect to any Class of Claims or Interests, a Class of Claims or Interests that is impaired within the meaning of section 1124 of the Bankruptcy Code.
Intercompany Claim	A Claim held by a Debtor against another Debtor or an Affiliate of a Debtor or any Claim held by an Affiliate of a Debtor against a Debtor.
Intercompany Interest	An Interest in any Debtor, or a direct or indirect subsidiary of any Debtor, other than an Interest in Jason.
Interest	Any interest, equity, or share in the Debtors, including all issued, unissued, authorized, or outstanding shares of capital stock and any other common stock, preferred stock, limited liability company interests, and any other equity, ownership, or profit interests of an Entity, including all options, warrants, rights, stock appreciation rights, phantom stock rights, restricted stock units, redemption rights, repurchase rights, convertible, exercisable, or exchangeable Securities, or other agreements, arrangements, or commitments of any character relating to, or whose value is related to, any such interest or other ownership interest in an Entity whether or not certificated, transferable, preferred, common, voting, or denominated “stock” or a similar security, including any Claim subject to subordination under section 510(b) of the Bankruptcy Code arising from or related to any of the foregoing.
Jason	Jason Industries, Inc.
Management Incentive Plan	That certain management incentive plan of Reorganized Jason, which management incentive plan (including any and all awards to be granted thereunder) shall reserve up to 10.0% of New Jason Equity on a fully diluted basis for officers and directors and approved at the discretion of the New Board.
Milestones	The dates and deadlines provided on Exhibit B attached hereto.
Minimum Liquidity Threshold	The Minimum Liquidity Threshold shall mean that, as of the Effective Date, the sum of (i) all cash and cash equivalents on hand for the Debtors and (ii) undrawn availability under the New Revolving Exit Facility, shall not be less than $25 million.

New Revolving Exit Facility	A third-party, asset-based exit financing that (i) provides availability as of the Closing Date of at least $20 million for revolving borrowings after permitting for any amounts on account of outstanding letters of credit; and (ii) has aggregate total commitments in an amount not less than $30 million to be agreed on terms acceptable to the Consenting First Lien Lenders.
New First Lien Credit Agreement	The credit agreement governing the New First Lien Term Loans, subject to the RSA requirements.
New First Lien Credit Agreement Documents	The New First Lien Credit Agreement and any other documentation necessary to effectuate the incurrence of the New First Lien Term Loan, subject to the RSA requirements.
New First Lien Credit Facility	A new senior secured term loan facility in the aggregate principal amount of $75 million, to be entered into by the Reorganized Debtors on the Plan Effective Date, which shall consist of the $75 million New First Lien Term Loan.
New First Lien Term Loans	The New First Lien Term Loans shall be documented in the New First Lien Credit Facility.  The New First Lien Term Loans shall be rated by a reputable credit ratings agency. The New First Lien Term Loans shall be on the terms set forth on the New TL Term Sheet attached as an exhibit to the RSA and otherwise acceptable to the First Lien Ad Hoc Group.
New Holdco(s)	A new holdco entity formed by the First Lien Ad Hoc Group or an agent thereof.
New Jason Equity	The equity Interests in Reorganized Jason issued, distributed, or otherwise transferred pursuant to the Plan.
New Junior Lien Credit Agreement	The credit agreement governing the New Junior Convertible Term Loans, subject to the RSA requirements.
New Junior Lien Credit Agreement Documents	The New Junior Lien Credit Agreement and any other documentation necessary to effectuate the incurrence of the New Junior Convertible Term Loans, subject to the RSA requirements.
New Junior Lien Credit Facility	A new junior secured take back convertible term loan facility in the aggregate principal amount of $50 million, to be entered into by the Reorganized Debtors on the Plan Effective Date, which shall consist of the $50 million New Junior Convertible Term Loans.
New Junior Convertible Term Loans	The New Junior Convertible Term Loans shall be documented in the New Junior Lien Credit Facility and shall be “stapled” to the New Jason Equity.  The New Junior Convertible Term Loans shall be rated by a reputable credit ratings agency. The New Junior Convertible Term Loans shall be on the terms set forth on the New Junior Convertible Term Loan Term Sheet attached as an exhibit to the RSA and otherwise acceptable to the First Lien Ad Hoc Group.
Open Market Buy‑Back Date	As defined in the RSA.

Open Market Purchases	As defined in the RSA.
Other Priority Claim	Any Claim other than an Administrative Claim or a Priority Tax Claim entitled to priority in right of payment under section 507(a) of the Bankruptcy Code.
Other Secured Claim	Any Secured Claim against the Debtors, including any Secured Tax Claim, other than a First Lien Credit Agreement Claim or Second Lien Credit Agreement Claim.
Petition Date	The date on which each of the Debtors filed its respective petition for relief commencing its Chapter 11 Cases.
Plan Effective Date	As defined in the RSA.
Plan Supplement	Any compilation of documents and forms of documents, schedules, and exhibits to the Plan to be filed by the Debtors as may be amended, supplemented, altered, or modified from time to time on the terms set forth in the Plan, each of which shall be in form and substance consistent with the RSA.
Priority Tax Claims	Any Claim of a Governmental Unit of the kind specified in section 507(a)(8) of the Bankruptcy Code.
Pro Rata	The proportion that an Allowed Claim in a particular Class bears to the aggregate amount of Allowed Claims in that Class.
Professional	An entity employed pursuant to a Bankruptcy Court order in accordance with sections 327 or 1103 of the Bankruptcy Code and to be compensated for services rendered before or on the Confirmation Date, pursuant to sections 327, 328, 329, 330, or 331 of the Bankruptcy Code.
Professional Fee Claim	All Administrative Claims for the compensation of Retained Professionals and the reimbursement of expenses incurred by such Retained Professionals through and including the Plan Effective Date under sections 328, 330, 331, 503(b)(2), 503(b)(3), 503(b)(4), or 503(b)(5) of the Bankruptcy Code to the extent such fees and expenses have not been paid pursuant to an order of the Bankruptcy Court.
Proof of Claim	A proof of Claim filed against any of the Debtors in the Chapter 11 Cases.
Reinstated	With respect to a Claim, leaving such Claim Unimpaired under the Plan.

Released Parties	Collectively, each of the following, solely in its capacity as such:  (a) the Debtors; (b) the Reorganized Debtors; (c) the First Lien Ad Hoc Group; (d) the First Lien Lenders; (e) the Second Lien Lenders, provided such Second Lien Lender is a Consenting Creditor; (f) Holders of Interests in Jason; (g) the Agents; (h) with respect to the foregoing clauses (a) through (g), each such Entity’s current and former Affiliates, and such Entities’ and their current and former Affiliates’ current and former directors, managers, officers, control persons, equityholders (regardless of whether such interests are held directly or indirectly), affiliated investment funds or investment vehicles, participants, managed accounts or funds, fund advisors, predecessors, successors, assigns, subsidiaries, principals, members, employees, agents, advisory board members, financial advisors, partners, attorneys, accountants, investment bankers, consultants, representatives, investment managers, and other professionals, each in their capacity as such; provided, however, that any Entity identified in the foregoing clauses (a) through (h) that opts out of the releases contained in the Plan shall not be a “Released Party.”
Releasing Parties	Collectively, each of the following, solely in its capacity as such:  (a) the Debtors; (b) the Reorganized Debtors; (c) the First Lien Ad Hoc Group; (d) the First Lien Lenders, provided such First Lien Lenders are Consenting Creditors; (e) the Second Lien Lenders, provided such Second Lien Lender is a Consenting Creditor; (f) the Agents; (g) all Holders of Claims who vote to accept the Plan; (h) all Holders of Claims who are eligible to vote, but abstain from voting on the Plan and who do not opt out of the releases provided by the Plan; (h) all Holders of Claims who vote to reject the Plan and who do not opt out of the releases provided by the Plan; (i) all Holders of Claims that are Unimpaired under the Plan; and (j) with respect to the foregoing clauses (a) through (h), each such Entity’s current and former Affiliates, and such Entities’ and their current and former Affiliates’ current and former directors, managers, officers, control persons, equityholders (regardless of whether such interests are held directly or indirectly), affiliated investment funds or investment vehicles, participants, managed accounts or funds, fund advisors, predecessors, successors, assigns, subsidiaries, principals, members, employees, agents, advisory board members, financial advisors, partners, attorneys, accountants, investment bankers, consultants, representatives, investment managers, and other professionals, each in their capacity as such.
Reorganized Debtors	The Debtors, as reorganized pursuant to and under the Plan, or any successor thereto, by merger, amalgamation, consolidation, or otherwise, on the Plan Effective Date.
Reorganized Jason	Jason, as reorganized pursuant to the Plan, or any successor or assign thereto, by merger, consolidation, or otherwise, on the Plan Effective Date.
Required Consenting Creditors	As defined in the RSA.

Restructuring Expenses	Means the costs and expenses incurred by, or on behalf of, First Lien Ad Hoc Group, including the fees and expenses of (a) Weil, Gotshal & Manges LLP, (b) local counsel (if any), and (c) Houlihan Lokey Capital, Inc.
SEC	The Securities and Exchange Commission.
Second Lien Credit Agreement Claim	Any Claim against a Debtor arising under, derived from, secured by, based on, or related to the Second Lien Credit Agreement or any other agreement, instrument or document executed at any time in connection therewith including the Second Lien Credit Agreement Ancillary Documents and all Obligations (as defined in the Second Lien Credit Agreement) and any guaranty thereof.
Section 510(b) Claims	Any Claim against any Debtor: (a) arising from the rescission of a purchase or sale of a Security of any Debtor or an affiliate of any Debtor; (b) for damages arising from the purchase or sale of such a Security; or (c) for reimbursement or contribution Allowed under section 502 of the Bankruptcy Code on account of such a Claim; provided that a Section 510(b) Claim shall not include any Claims subject to subordination under section 510(b) of the Bankruptcy Code arising from or related to an Interest.
Secured	When referring to a Claim:  (a) secured by a lien on property in which any of Debtors has an interest, which lien is valid, perfected, and enforceable pursuant to applicable law or by reason of a Bankruptcy Court order, or that is subject to setoff pursuant to section 553 of the Bankruptcy Code, to the extent of the value of the creditor’s interest in the Debtors’ interest in such property or to the extent of the amount subject to setoff, as applicable, as determined pursuant to section 506(a) of the Bankruptcy Code; or (b) Allowed pursuant to the Plan, or separate order of the Bankruptcy Court, as a secured claim.
Secured Tax Claim	Any Secured Claim that, absent its secured status, would be entitled to priority in right of payment under section 507(a)(8) of the Bankruptcy Code (determined irrespective of time limitations), including any related Secured Claim for penalties.
Securities Act	The Securities Act of 1933, as amended, 15 U.S.C. §§ 77a–77aa, and the rules and regulations promulgated thereunder.
Security	Security shall have the meaning set forth in section 101(49) of the Bankruptcy Code.
Unimpaired	With respect to a Class of Claims or Interests, a Class of Claims or Interests that is not Impaired.
Warrants	Warrants for 10% of the New Jason Equity, subject to dilution from the Management Incentive Plan. The Warrants shall be on the terms set forth on the Warrant Term Sheet attached as an exhibit to the RSA and otherwise acceptable to the First Lien Ad Hoc Group.

(a)	On the first business day that is ten (10) business days after the Agreement Effective Date, or such earlier date as the First Lien Ad Hoc Group may agree in its reasonable discretion, the Debtors shall commence solicitation on the Plan.

(b)	On the first business day that is eleven (11) business days after the Agreement Effective Date, the Debtors shall complete the Open Market Purchases

(c)	On the first business day that is twelve (12) business days after the Agreement Effective Date, the Debtors shall cause the Petition Date to occur.

(d)

On the first business day that is (3) days after the Petition Date, the Bankruptcy Court shall have entered (i) the Interim Cash Collateral Order on terms acceptable to the First Lien Ad Hoc Group and (ii) an order scheduling a combined hearing to consider Disclosure Statement approval and Plan Confirmation (the “Combined Hearing”), which order shall be acceptable to the First Lien Ad Hoc Group.

(e)	On the first business day that is ten (10) days after the Petition Date, the Debtors shall complete solicitation on the Plan, provided, that solicitation on the Plan has been open for at least 14 days.

(f)	On or before the first business day that is forty (40) days after the Petition Date, the Bankruptcy Court shall have entered the Final Cash Collateral Order.

(g)	On or before the first business day that is sixty (60) days after the Petition Date, the Bankruptcy Court shall have commenced the Combined Hearing.

(h)	Not later than five (5) business days after commencement of the Combined Hearing, the Bankruptcy Court shall have entered the Confirmation Order, which order shall also approve the Disclosure Statement and solicitation procedures on terms acceptable to the First Lien Ad Hoc Group.

(i)

On or before the first business day that is (14) days after entry of the Confirmation Order, the Plan Effective Date shall have occurred; provided that this Milestone will be automatically extended by an additional 60 days solely to the extent necessary to obtain all necessary regulatory approvals required to finalize the Restructuring Transactions, so long as the Debtors have sought the regulatory approvals in good faith and without unnecessary delay.

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1	For the avoidance of doubt, the Milestones shall be calculated in accordance with rule 9006(a) of the Federal Rules of Bankruptcy Procedure.

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UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

1

The last four digits of the Debtors’ tax identification numbers, if any, are:  Jason Industries, Inc. (8322); Jason Partners Holdings, Inc. (1977); Jason Holdings, Inc. I (9929); Jason Incorporated (6840); Milsco, LLC (7243); Osborn, LLC (5279); Schaffner Manufacturing Co., Inc. (0894); Jason International Holdings, Inc. (7730).  The location of the Debtors’ service address for purposes of these chapter 11 cases is:  777 Westchester Avenue, Suite 101, White Plains, NY 10604.

 

(a)          authorization of the Debtors’ use of Cash Collateral (as defined below), subject to and pursuant to the terms and conditions set forth in this Interim Order;

(b)          the granting of adequate protection on account of the Debtors’ use of Cash Collateral and solely to the extent of any diminution in value of the First Lien Secured Parties’ (as defined below) interests in the Prepetition Collateral (as defined below), subject to and pursuant to the terms and conditions set forth in this Interim Order, to:

i.          the First Lien Secured Parties (as defined below) under that certain First Lien Credit Agreement dated as of June 30, 2014 (as amended, restated, amended and restated, supplemented, or otherwise modified, the “First Lien Credit Agreement”) and that certain First Lien Security Agreement dated as of June 30, 2014 (as amended, restated, amended and restated, supplemented, or otherwise modified, the “First Lien Security Agreement” and, collectively with the First Lien Credit Agreement and all other agreements, documents, notes, mortgages, security agreements, pledges, guarantees, intercreditor agreements, subordination agreements, deeds, instruments, indemnities, indemnity letters, working fee letters, assignments, charges, amendments, and any other agreements delivered pursuant thereto or in connection therewith, the “First Lien Credit Documents”), by and among Jason, as borrower, each of the guarantors named therein (the “First Lien Credit Agreement Guarantors” and, collectively with Jason, the “First Lien Credit Agreement Obligors”), and The Bank of New York Mellon (as successor to Deutsche Bank AG New York Branch), as administrative agent (in such capacity, the “First Lien Credit Agreement Administrative Agent”) for the lenders thereunder from time to time (the “First Lien Lenders”), and Deutsche Bank AG New York Branch as L/C Issuer and Swing Line Lender (collectively, with the First Lien Credit Agreement Administrative Agent, First Lien Lenders and other Secured Parties (as defined in the First Lien Credit Agreement), the “First Lien Secured Parties”); and

ii.         the Collateral Agent (as defined below) under that certain Closing Date Intercreditor Agreement, dated as of June 30, 2014 (as amended, restated, supplemented, or otherwise modified, the “Intercreditor Agreement”) between (A) The Bank of New York Mellon (as successor to Deutsche Bank AG New York Branch), as First Lien Credit Agreement Administrative Agent (the “Collateral Agent,” and, in its capacity as both First Lien Credit Agreement Administrative Agent and Collateral Agent, the “Prepetition Agent”) for each of all of the holders of First Lien Credit Agreement Secured Obligations (as defined in the Intercreditor Agreement and referred to herein as the “First Lien Credit Agreement Secured Obligations”), Jason, and each of the First Lien Credit Agreement Guarantors, and (B) The Bank of New York Mellon (as successor to Deutsche Bank AG New York Branch), as administrative agent (in such capacity, the “Second Lien Credit Agreement Administrative Agent”) for the lenders under that certain Credit Agreement dated as of June 30, 2014 by and among Jason, as borrower, each of the guarantors named therein (the “Second Lien Credit Agreement Guarantors” and, collectively with Jason, the “Second Lien Credit Agreement Obligors”) and the Second Lien Credit Agreement Administrative Agent (as amended, restated, amended and restated, supplemented, or otherwise modified, the “Second Lien Credit Agreement”) and Second Lien Security Agreement dated as of June 30, 2014 (as amended, restated, supplemented, or otherwise modified, the “Second Lien Security Agreement,” collectively with the Second Lien Credit Agreement and all other agreements, documents, notes, mortgages, security agreements, pledges, guarantees, intercreditor agreements, subordination agreements, deeds, instruments, indemnities, indemnity letters, working fee letters, assignments, charges, amendments, and any other agreements delivered pursuant thereto or in connection therewith, the “Second Lien Credit Documents,” and together with the First Lien Credit Documents, the “Prepetition Loan Documents”);

(c)          approving the stipulations by the Debtors as set forth in this Interim Order with respect to, among other things, the First Lien Credit Documents and the liens and security interests arising therefrom;

(d)          subject to and upon entry of the Final Order, and to the extent set forth herein and therein, waiving any right to surcharge the Collateral (as defined below) pursuant to section 506(c) of the Bankruptcy Code or other applicable law;

(e)          modifying the automatic stay imposed under section 362 of the Bankruptcy Code to the extent necessary to permit the Debtors and the First Lien Secured Parties to implement the terms of the Cash Collateral Orders;

(f)          scheduling a final hearing (the “Final Hearing”) on the Motion; and

(g)          waiving any applicable stay (including under Bankruptcy Rule 6004) and provision for immediate effectiveness of this Interim Order.

Upon due, proper, and sufficient notice of the Motion and the interim hearing on the Motion (the “Interim Hearing”) having been given under the circumstances and the opportunity for objection having been provided; and the Interim Hearing having been held; and it appearing that no other or further notice is necessary with respect to the Court’s entry of this Interim Order; and after considering all the pleadings filed with this Court; and upon the Declaration of Chad M. Paris, Senior Vice President and Chief Financial Officer at Jason Industries, Inc., (I) in Support of Chapter 11 Petitions and First Day Pleadings and (II) Pursuant to Local Bankruptcy Rule 1007‑2 (the “First Day Declaration”), the evidence submitted, and the record made at the Interim Hearing held on the Motion to approve this Interim Order; and the Court having found and determined that the relief sought in the Motion is necessary to avoid immediate and irreparable harm to the Debtors pending the Final Hearing and is otherwise fair and reasonable and in the best interests of the Debtors, their estates and creditors, and is essential for the continued operation of the Debtors’ businesses; all objections, if any, to the entry of this Interim Order having been withdrawn, resolved, or overruled by the Court; and after due deliberation and consideration and good and sufficient cause appearing therefor,

THE COURT HEREBY MAKES THE FOLLOWING FINDINGS OF FACT AND CONCLUSIONS OF LAW:³

A.          Petition Date.  On [DATE] (the “Petition Date”), each of the Debtors filed a voluntary petition under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the “Court”), thereby commencing these Chapter 11 Cases.  The Debtors are managing and operating their business and properties as debtors-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code.  The Chapter 11 Cases have been consolidated for procedural purposes only and are being jointly administered pursuant to Bankruptcy Rule 1015(b) [Docket No. [●]].  No trustee or examiner has been appointed in the Chapter 11 Cases.

B.          Jurisdiction and Venue.  This Court has jurisdiction over these proceedings pursuant to 28 U.S.C. § 1334.  This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2).  The Court may enter a final order consistent with Article III of the United States Constitution.  Venue for the Chapter 11 Cases is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409.

 

C.          Notice.  Notice of the Final Hearing and the relief requested in the Motion has been provided by the Debtors in accordance and compliance with Bankruptcy Rules 4001 and 9014, as well as the Bankruptcy Local Rules, and is sufficient under the circumstances.  Without limiting the foregoing, due notice was afforded, whether by facsimile, electronic mail, overnight courier, or hand delivery, to parties in interest, including (a) the United States Trustee for the Southern District of New York (the “U.S. Trustee”); (b) any statutory committee of creditors (“Creditors’ Committee”) and its counsel, (c) the holders of the 30 largest unsecured claims against the Debtors (on a consolidated basis); (d) the agent under the Debtors’ prepetition first lien credit agreement and counsel thereto; (e) the agent under the Debtors’ prepetition second lien credit agreement and counsel thereto; (f) counsel to an ad hoc group of lenders under the Debtors’ prepetition first lien credit agreement (the “First Lien Ad Hoc Group”); (g) counsel to the ad hoc group of lenders under the Debtors’ prepetition second lien credit agreement; (h) the United States Attorney’s Office for the Southern District of New York; (i) the Internal Revenue Service; (j) the United States Securities and Exchange Commission; (k) the Environmental Protection Agency and all similar state environmental agencies; (l) the office of the attorney general in the states where the Debtors conduct their business operations; and (m) any party that has requested notice pursuant to Bankruptcy Rule 2002.

D.          Debtors’ Stipulations.  The Debtors admit, acknowledge, agree, and stipulate to the following (collectively, the “Debtors’ Stipulations”), which stipulations shall be binding on the Debtors, and, subject to the Challenge Period, their estates, and all parties in interest:

1.          Description of First Lien Credit Agreement Secured Obligations.  Prior to the Petition Date, pursuant to the First Lien Credit Agreement, and the other First Lien Credit Documents, the lenders thereunder extended credit to Jason in the aggregate principal amount of $[350,000,000].  Each of the First Lien Credit Agreement Guarantors have unconditionally guaranteed, jointly and severally, the First Lien Credit Agreement Secured Obligations (as defined below) arising under the First Lien Credit Documents.  As of the Petition Date, the First Lien Credit Agreement Obligors were indebted to the First Lien Secured Parties pursuant to the First Lien Credit Documents, without defense, counterclaim, offset, claim, or cause of action of any kind, in the aggregate amount of not less than (i) $[284,440,000] of outstanding principal under the First Lien Credit Agreement, plus (ii) accrued and unpaid interest with respect thereto, fees, costs, and expenses (including any attorneys’, financial advisors’, and other professionals’ fees and expenses that are chargeable or reimbursable under the First Lien Credit Documents), and all other “Obligations” (as defined in the First Credit Agreement or any security document related thereto) under the First Lien Credit Documents, plus (iii) the Deferred Forbearance Fee (as defined in that certain Restructuring Support Agreement between the Debtors and the Consenting Creditors therein dated [●], 2020 (the “Restructuring Support Agreement”)) (collectively, the “First Lien Credit Agreement Obligations”).

2.          Validity of First Lien Credit Agreement Obligations and First Lien Credit Documents.  The First Lien Credit Agreement Obligations constitute legal, valid, and binding obligations of the First Lien Credit Agreement Obligors (collectively, the “Obligors”).  No offsets, defenses, or counterclaims to, or claims or causes of action that could reduce the amount or ranking of, the First Lien Credit Agreement Obligations exist.  No portion of the First Lien Credit Agreement Obligations (including any interest owed thereunder) is subject to set-off, avoidance, impairment, disallowance, recharacterization, reduction, subordination (whether equitable, contractual, or otherwise), counterclaims, recoupment, cross-claims, defenses, or any other challenges under or pursuant to the Bankruptcy Code or any other applicable domestic or foreign law or regulation by any person or entity.  The First Lien Credit Agreement Documents are valid and enforceable by the First Lien Secured Parties against each of the Obligors.  The First Lien Credit Agreement Obligations constitute allowed claims against each of the Obligors’ estates.  As of the Petition Date, the Debtors or their estates have no claim or cause of action against the First Lien Secured Parties or their agents, in such capacities, whether arising under applicable state, federal, or foreign law (including, without limitation, any recharacterization, subordination, avoidance, or other claims arising under or pursuant to sections 105, 510, or 542 through 553 of the Bankruptcy Code), or whether arising under or in connection with any of the First Lien Credit Documents (or the transactions contemplated thereunder), the First Lien Credit Agreement Obligations, or the Prepetition Liens (as defined herein).

(a)        Pursuant to the First Lien Credit Documents, the First Lien Credit AgreementObligations are secured by, among other things, duly perfected first priority liens or mortgages on, security interests in, and assignments or pledges of (the “Prepetition Liens”), all property described in the First Lien Credit Documents, including, without limitation, certain Cash Collateral (as defined herein), and other “Collateral” as such term is defined in the First Lien Credit Agreement (collectively, the “Prepetition Collateral”), including, without limitation, certain cash collateral as defined in section 363 of the Bankruptcy Code (“Cash Collateral”).  All cash of the Debtors and cash proceeds of the Collateral (as defined below), including all such cash and cash proceeds of such Collateral held at any time and from time to time in any of the Debtors’ banking, checking, or other deposit accounts with financial institutions (in each case, other than trust, escrow, payroll, and custodial funds held as of the Petition Date in properly established trust, escrow, payroll, and custodial accounts), are and will be Cash Collateral of the First Lien Secured Parties.

(b)        The Intercreditor Agreement governs, among other things:  (i) the relative priority of the First Liens and Second Liens (each as defined in the Intercreditor Agreement), (ii) the payment priority with respect to proceeds of the Collateral (as defined in the Intercreditor Agreement), (iii) the rights and remedies of the holders of Secured Obligations (as defined in the Intercreditor Agreement) with respect to use of cash collateral, and adequate protection in a chapter 11 case, and (iv) the rights and remedies of the holders of Secured Obligations (as defined in the Intercreditor Agreement) with respect to the valuation, use, protection, release or disposition (including pursuant to a credit bid under section 363(k) of the Bankruptcy Code) and challenges thereof.

4.           Validity and Perfection of Prepetition Liens.

(a)        The Prepetition Liens are (i) valid, binding, perfected, and enforceable liens on and security interests in the Prepetition Collateral; (ii) not subject to, pursuant to the Bankruptcy Code or other applicable law (foreign or domestic), avoidance, disallowance, reduction, recharacterization, recovery, subordination (whether equitable, contractual, or otherwise), attachment, offset, counterclaim, defense, “claim” (as defined in the Bankruptcy Code), impairment, or any other challenge of any kind by any person or entity; and (iii) subject and subordinate only to (A) the Carve Out (as defined below) and (B) valid and enforceable liens and encumbrances in the Prepetition Collateral that were expressly permitted to be senior to the First Lien Secured Parties’ liens under the applicable First Lien Credit Documents, that are valid, perfected, enforceable, and non-avoidable as of the Petition Date and that are not subject to avoidance, reduction, disallowance, disgorgement, counterclaim, surcharge, or subordination pursuant to the Bankruptcy Code or applicable non-bankruptcy law (“Permitted Liens”), and each Debtor irrevocably waives, for itself and its estate, any right to challenge or contest in any way the scope, extent, perfection, priority, validity, non-avoidability, and enforceability of the Prepetition Liens or the validity, enforceability, or priority of payment of the First Lien Credit Agreement Obligations and the First Lien Credit Documents.  The Prepetition Liens were granted to the respective First Lien Secured Parties for fair consideration and reasonably equivalent value, and were granted contemporaneously with the making of loans, commitments, and/or other financial accommodations under the First Lien Credit Documents.

(b)        Pursuant to and as more particularly described in the Prepetition Loan Documents, the Prepetition Liens are valid, binding, properly perfected, enforceable, non‑avoidable, first-priority liens and security interests in and against the Prepetition Collateral (including, without limitation, Cash Collateral), and are senior in right, priority, operation and effect to the Second Liens in all respects, notwithstanding any provision of the Uniform Commercial Code or any other Federal, State or foreign law.

5.          Releases by Debtors.  Subject to paragraph [8] below, each of the Debtors and the Debtors’ estates, on its own behalf and on behalf of its past, present, and future predecessors, successors, heirs, subsidiaries, and assigns (collectively, the “Releasors”) shall, to the maximum extent permitted by applicable law, unconditionally, irrevocably, and fully forever release, remise, acquit, relinquish, irrevocably waive, and discharge the First Lien Secured Parties in all capacities under the First Lien Credit Documents as applicable, and applicable law, and each of their respective former, current, or future officers, employees, directors, agents, representatives, owners, members, partners, financial advisors, legal advisors, shareholders, managers, consultants, accountants, attorneys, affiliates, and predecessors in interest (collectively, the “Releasees”), of and from any and all claims, demands, liabilities, responsibilities, disputes, remedies, causes of action, indebtedness and obligations, rights, assertions, allegations, actions, suits, controversies, proceedings, losses, damages, injuries, attorneys’ fees, costs, expenses, or judgments of every type, whether known, unknown, asserted, unasserted, suspected, unsuspected, accrued, unaccrued, fixed, contingent, pending, or threatened including, without limitation, all legal and equitable theories of recovery, arising under common law, statute or regulation or by contract, of every nature and description based on or arising from any events, facts or circumstances that have occurred or exist as of the date hereof arising from or relating in any way to any of the First Lien Credit Documents or the obligations thereunder, including, without limitation, (i) any so-called “lender liability” or equitable subordination claims or defenses, (ii) any and all claims and causes of action arising under the Bankruptcy Code, and (iii) any and all claims and causes of action regarding the validity, priority, enforceability, perfection, or avoidability of the Prepetition Liens or First Lien Credit Agreement Secured Obligations of the First Lien Secured Parties.  The Debtors’ acknowledgments, stipulations, waivers, and releases shall be binding on the Debtors and their respective representatives, successors, and assigns, and on each of the Debtors’ estates and all entities and persons, including any creditors of the Debtors, and each of their respective representatives, successors, and assigns, including, without limitation, any trustee or other representative appointed in these Chapter 11 Cases, or upon conversion to chapter 7, whether such trustee or representative is appointed under chapter 11 or chapter 7 of the Bankruptcy Code.

E.          Approved Budget.  Attached hereto as Exhibit A is a 13‑week cash flow forecast setting forth all projected cash receipts and cash disbursements on a weekly basis (as may be revised from time to time with the prior written consent of counsel to the First Lien Ad Hoc Group, which approval shall not be unreasonably withheld, the “Approved Budget”) (with the understanding that the Approved Budget attached to this Interim Order is acceptable to the First Lien Ad Hoc Group), with notice of any such revision promptly provided to counsel to the Creditors’ Committee, along with a copy of any revised Approved Budget.

F.          The Approved Budget includes and contains the Debtors’ reasonable estimate of all operational receipts and all operational disbursements, fees, costs, and other expenses that will be payable, incurred, and/or accrued by any of the Debtors during the period covered by the Approved Budget.  If the First Lien Ad Hoc Group, in its sole discretion, and the Debtors do not agree to an updated Approved Budget, the Approved Budget shall be the then existing Approved Budget, and the First Lien Ad Hoc Group, nor any other party, shall have any obligation to consent to the Debtors’ continued use of Cash Collateral beyond the period contemplated by the Approved Budget.  The Debtors shall provide to the advisors to each of the First Lien Ad Hoc Group and counsel to the Creditors’ Committee a Budget Variance Report (as defined below) in accordance with the provisions of paragraph [5(d)] hereof; provided that professional fees (including, without limitation, Allowed Professional Fees (as defined in paragraph 9 below)), payments to the professional advisors of the First Lien Ad Hoc Group, payments to the U.S. Trustee, interest and fees payable to third parties pursuant to this Interim Order, and adequate protection payments shall not be subject to such operating disbursement test pursuant to the Budget Variance Report.

G.          Use of Cash Collateral.  An immediate and critical need exists for the Debtors to use the Cash Collateral in accordance with the Approved Budget for (i) working capital purposes, (ii) other general corporate purposes of the Debtors, and (iii) the satisfaction of the costs and expenses of administering the Chapter 11 Cases.

H.          Consent by First Lien Secured Parties.  The First Lien Credit Agreement Administrative Agent has consented to, conditioned on the entry of this Interim Order, the Debtors’ proposed use of Cash Collateral, on the terms and conditions set forth in this Interim Order, and such consent is binding on the First Lien Secured Parties.

I.            Adequate Protection.  The adequate protection provided to the First Lien Secured Parties, as set forth more fully in paragraphs 4 and 5 hereof, including on account of the imposition of the automatic stay pursuant to section 362(a) of the Bankruptcy Code, or the use, sale, or lease of the Prepetition Collateral (including any Cash Collateral) under section 363 of the Bankruptcy Code, is consistent with, and authorized by, the Bankruptcy Code and is offered by the Debtors to protect the First Lien Secured Parties’ interests in the Prepetition Collateral, solely to the extent of any diminution in value of such Prepetition Collateral.  The adequate protection provided herein and other benefits and privileges contained herein are necessary in order to protect the First Lien Secured Parties from the diminution of their respective interests in the value of their Prepetition Collateral and to obtain their consent to the use of such Cash Collateral; provided that, nothing herein shall limit or be deemed to limit the rights of the First Lien Secured Parties to seek additional or other adequate protection.

J.            Good Cause Shown; Best Interest.  This Court concludes that good cause has been shown and entry of this Interim Order is in the best interests of the Debtors’ respective estates and creditors as its implementation will, among other things, allow for the continued operation of the Debtors’ existing businesses and enhance the Debtors’ prospects for a successful reorganization.

K.          No Liability to Third Parties.  The Debtors stipulate and the Court finds that First Lien Secured Parties shall not (i) be deemed to have liability to any third party or be deemed to be in control of the operation of any of the Debtors or to be acting as a “controlling person,” “responsible person,” “owner or operator,” or “participant” with respect to the operation or management of any of the Debtors (as such term, or any similar terms, are used in the Internal Revenue Code, the United States Comprehensive Environmental Response, Compensation and Liability Act, as amended, or any other federal, state, or applicable international statute or regulation) as a result of its consent to the use of Cash Collateral hereunder or (ii) owe any fiduciary duty to any of the Debtors, their creditors or estates, or shall constitute or be deemed to constitute a joint venture or partnership with any of the Debtors as a result of its consent to the use of Cash Collateral hereunder.

L.          Section 552(b).  The First Lien Secured Parties shall be entitled to all of the rights and benefits of section 552(b) of the Bankruptcy Code and, subject to entry of the Final Order, the “equities of the case” exception under section 552(b) of the Bankruptcy Code shall not apply to the First Lien Secured Parties.

Based upon the foregoing, and upon the record made before this Court at the Interim Hearing, and good and sufficient cause appearing therefor,

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT:

1.          Motion Granted.  The Motion is granted on an interim basis as provided herein, and the use of Cash Collateral is authorized for each Debtor, subject and pursuant to the terms and conditions set forth in this Interim Order.  Any objections, statements, or reservations of rights to the Motion with respect to the entry of this Interim Order that have not previously been withdrawn, waived, or otherwise resolved are hereby denied and overruled.  This Interim Order shall become effective immediately upon its entry.

2.          Authorization to Use Cash Collateral.  Subject to the terms and conditions of this Interim Order, including the Carve Out, the Debtors are authorized to use Cash Collateral in accordance with this Interim Order and the Approved Budget during the period beginning with the Petition Date and ending on the Termination Date for:  (a) working capital purposes; (b) other general corporate purposes of the Debtors; (c) the satisfaction of the costs and expenses of administering the Chapter 11 Cases; and (d) for the purposes identified in the Approved Budget.

3.          Termination Date.  The authority for use of Cash Collateral under this Interim Order shall terminate (the “Termination Date”) upon the expiration of the Notice Period after an Event of Default, in each case in accordance with paragraphs 6 and 7 hereof (a “Termination Event”).

4.          First Lien Secured Parties’ Adequate Protection.  Subject in each case to the Carve Out, the Debtors grant to the First Lien Secured Parties, pursuant to sections 361, 362, 363(c)(2), 363(e), 503, and 507 of the Bankruptcy Code, adequate protection of the First Lien Secured Parties’ interests in the Prepetition Collateral, including, without limitation, solely on account of any diminution in value resulting from (a) the sale, lease, or use by the Debtors of Prepetition Collateral, including Cash Collateral, (b) the imposition of the automatic stay pursuant to section 362 of the Bankruptcy Code, or (c) the subordination of the First Lien Secured Parties’ interests in the Prepetition Collateral to the Carve Out (as defined below) (“Diminution in Value”).  The Court finds that the First Lien Secured Parties are entitled, pursuant to sections 361, 362, 363(c)(2), 363(e), 503, and 507 of the Bankruptcy Code, to adequate protection of their interests in the Prepetition Collateral (including the Cash Collateral), for Diminution in Value (the “Adequate Protection Obligations”).

5.           The First Lien Secured Parties, in exchange for consent to the use of the Prepetition Collateral, are hereby granted, solely to the extent of any Diminution in Value of their interests in the Prepetition Collateral (including Cash Collateral) from and after the Petition Date, the following:

(a)          Adequate Protection Liens.  To the extent set forth below and subject to the Carve Out, the Debtors grant the First Lien Secured Parties first ranking valid, binding, enforceable, and perfected security interests in and liens upon (the “Adequate Protection Liens”) all property, whether now owned or hereafter acquired or existing and wherever located, of each Debtor and each Debtor’s “estate” (as created pursuant to section 541(a) of the Bankruptcy Code), property of any kind or nature whatsoever, real or personal, tangible or intangible, and now existing or hereafter acquired or created, including, without limitation, all cash, accounts, inventory, goods, contract rights, instruments, documents, chattel paper, patents, trademarks, copyrights, and licenses therefor, accounts receivable, receivables and receivables records, general intangibles, payment intangibles, tax or other refunds, insurance proceeds, letters of credit, contracts, owned real estate, real property leaseholds, vessels, charter-hire receipts, earnings, insurance policies and proceeds, fixtures, deposit accounts, commercial tort claims, securities accounts, instruments, investment property, letter-of-credit rights, supporting obligations, machinery and equipment, real property, leases (and proceeds from the disposition thereof), all of the issued and outstanding capital stock of each Debtor, other equity or ownership interests, including equity interests in subsidiaries and non-wholly-owned subsidiaries, money, investment property, choses in action, Cash Collateral, documents, vehicles, intellectual property, securities, partnership or membership interests in limited liability companies and capital stock, and the proceeds of causes of action (including, subject to and upon entry of the Final Order, proceeds of causes of action arising under sections 502(d), 544, 545, 547, 548, 550, 551, or 553 of the Bankruptcy Code (collectively, subject to the stated exclusions, the “Avoidance Actions”)), and all cash and non‑cash proceeds, rents, products, substitutions, accessions, and profits of any of the collateral described above, including, without limitation, the products, proceeds, and supporting obligations thereof, whether in existence on the Petition Date or thereafter created, acquired, or arising and wherever located (all such property, collectively with the Prepetition Collateral, the “Collateral”) without the necessity of the execution of mortgages, security agreements, pledge agreements, financing statements, or other agreements.  The foregoing Collateral shall not include assets or property (other than Prepetition Collateral, including Cash Collateral) upon which, and solely to the extent that, the grant of an Adequate Protection Lien as contemplated in this Interim Order, would not be enforceable pursuant to applicable law, but shall include the proceeds thereof, which Adequate Protection liens are granted thereupon.  The Adequate Protection Liens granted to the First Lien Secured Parties, shall be senior liens and shall rank immediately senior to the security interests and liens under the respective Prepetition Loan Documents, except the Adequate Protection Liens shall be subject and subordinate to (x) the Carve Out and (y) Permitted Liens.

(b)         Superpriority Claims.  To the extent set forth below, pursuant to sections 503(b), 507(a), and 507(b) of the Bankruptcy Code, the Debtors grant the First Lien Secured Parties first ranking allowed superpriority administrative expense claims (the “Superpriority Claims”).  Any Superpriority Claims shall be subject and subordinate to the Carve Out, and shall be allowed claims against the applicable Debtors (jointly and severally) with priority over any and all administrative expenses and all other claims against such Debtors now existing or hereafter arising, of any kind whatsoever, including, without limitation, all other administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code, and over any and all other administrative expenses or other claims arising under any other provision of the Bankruptcy Code, including, without limitation, sections 105, 326, 327, 328, 330, 331, 503(b), 507(a), 507(b), or 1114 of the Bankruptcy Code, whether or not such expenses or claims may become secured by a judgment lien or other nonconsensual lien, levy, or attachment.  The Superpriority Claims shall be payable from and have recourse to the proceeds of all Collateral, provided that the Superpriority Claims shall have recourse to the proceeds of the Avoidance Actions subject to, and upon entry of, the Final Order.  The allowed Superpriority Claims shall be payable from and have recourse to all Collateral and unencumbered pre- and postpetition property of the applicable Debtors (subject to the foregoing sentence and their respective ranking).  Other than the Carve Out, no cost or expense of administration under sections 105, 503, or 507 of the Bankruptcy Code or otherwise, including any such cost or expense resulting from or arising after the conversion of any of the Chapter 11 Cases under section 1112 of the Bankruptcy Code, shall be senior to, or pari passu with, the Superpriority Claims.

(c)          Fees and Expenses.  The Debtors shall pay (or shall have paid, as applicable) in full, in cash and in immediately available funds all reasonable and documented fees, costs and expenses whether incurred prior to, on, or after the Petition Date, without duplication, incurred by (i) the First Lien Credit Agreement Administrative Agent, including fees and expenses for services performed in connection with these Chapter 11 Cases, and including fees and expenses of Emmet, Marvin & Martin, LLP, as counsel to the First Lien Credit Agreement Administrative Agent, (ii) the First Lien Ad Hoc Group, including fees and expenses of (A) Weil, Gotshal & Manges LLP and (B) Houlihan Lokey, Inc., as financial advisor (collectively, the “Fee Parties”) (x) promptly upon entry of this Interim Order in the full amounts set forth in any outstanding invoices from the Fee Parties provided to the Debtors at least five (5) business days prior to entry of the Interim Order (provided that any such unpaid invoices as of the Petition Date were provided to the U.S. Trustee), and (y) thereafter, within ten (10) business days after the presentment of any such invoices to the Debtors, the U.S. Trustee, and counsel to any Creditors’ Committee; provided, however, that the Fee Parties shall submit copies of the Fee Parties’ legal counsels’ and financial advisor’s invoices to the U.S. Trustee, any Creditors’ Committee, and the Debtors, and the Debtors, the U.S. Trustee, and any Creditors’ Committee shall have ten (10) days following their receipt of such invoices to object to the reasonableness of the fees and expenses included in any such invoice.  If any such objection is not resolved within ten (10) days after such objection is interposed, a hearing with respect thereto shall be conducted at a regularly-scheduled omnibus hearing in the Chapter 11 Cases, provided that the Debtors shall pay any undisputed portion of such fees, costs and expenses within fifteen (15) days after the initial presentment to the Debtors of such invoice.  The Fee Parties shall not be required to comply with the U.S. Trustee fee guidelines or file any fee applications with the Court.  If it is subsequently determined, upon a duly filed notice after notice and a hearing, that such fees and expenses were not payable under section 506 of the Bankruptcy Code, such amounts will instead be deemed recharacterized as repayments of principal in reduction of the applicable Obligations; and provided, further, that if an Obligation is determined to be wholly unsecured, any amounts paid under this paragraph shall be returned to the Debtors within fifteen (15) days of any such final determination.  Any creditor who is obliged to return funds under this paragraph may assert that such amounts were otherwise payable as adequate protection and the Court will determine the validity of any such assertion.

(d)          Budget Compliance.  Every week (beginning with the fourth full week after the Petition Date), on the fourth business day of such week, the Debtors shall deliver to the advisors to (i) the First Lien Credit Agreement Administrative Agent, (ii) the First Lien Ad Hoc Group, and (iii) counsel to any Creditors’ Committee, a variance report from the previous week comparing the actual cash receipts and disbursements of the Debtors with the receipts and disbursements in the Approved Budget on a line item basis (the “Budget Variance Report”); provided that professional fees (including, without limitation, Allowed Professional Fees (as defined in paragraph 9 below)), payments to the professional advisors of the First Lien Ad Hoc Group, payments to the U.S. Trustee, interest and fees payable to third parties pursuant to this Interim Order, and adequate protection payments shall not be subject to such operating disbursement test pursuant to the Budget Variance Report.  Each Budget Variance Report shall be cumulative, in that it shall include all previous weeks in the current Budget Variance Report.  Any material variance shall be accompanied by a qualitative explanation.

(e)          Reporting.  The Debtors shall provide the Prepetition Agent, the First Lien Ad Hoc Group’s advisors, and counsel to any Creditors’ Committee with (a) any weekly financial reporting given to the U.S. Trustee, and (b) any additional reports reasonably requested by the First Lien Credit Agreement Administrative Agent and advisors to the First Lien Ad Hoc Group, including but not limited to (i) periodic updates regarding a sale or auction process, (ii) bidders in connection thereto, and (iii) any other information reasonably requested by the First Lien Credit Agreement Administrative Agent or advisors to the First Lien Ad Hoc Group in connection to these Chapter 11 Cases; provided, that any such report related to subparts (i) or (ii) shall be provided on an “advisors’ eyes only” basis and subject to and limited by in all respects any applicable confidentiality arrangement.

(f)          Access to Records and Collateral.  Upon reasonable notice, at reasonable times during normal business hours, the Debtors shall, subject to mutually agreeable confidentiality agreements, permit the professional advisors to the First Lien Ad Hoc Group (i) to have access to and inspect the Debtors’ properties and other Collateral of any Debtor against whom they are granted Adequate Protection Liens or Superpriority Claims under this Interim Order, (ii) to examine the Debtors’ books and records, and (iii) to discuss the Debtors’ affairs, finances, and condition with the Debtors’ financial advisors and, if and when reasonably practicable and mutually agreed upon, officers, whom the Debtors shall make reasonably available, in each case excluding (x) all privileged and attorney-client work product, (y) trade secrets, and (z) information that the Debtors are otherwise prohibited from disclosing pursuant to a third-party confidentiality agreement.

(g)          First Lien Interest Payments.  The Debtors shall pay to the First Lien Credit Agreement Administrative Agreement (for the ratable benefit of the First Lien Lenders), on an ongoing monthly basis, the cash payment of interest at the default contract rate (the “Interest Payments”) (whether or not such interest payments are included in the Approved Budget), and the First Lien Credit Agreement Administrative Agent shall, subject to the First Lien Credit Agreement Administrative Agent’s right to offset or recoup amounts owed to it and its representatives for fee and expenses to the extent not otherwise paid hereunder, including pursuant to the First Lien Credit Agreement, remit such Interest Payments deposited with it by the Debtors to the First Lien Lenders.  On or before the fifth day prior to the date of each Interest Payment, the Debtors shall provide a notice to the First Lien Credit Agreement Administrative Agent setting forth a calculation of the amount of such Interest Payment.  The Debtors shall deposit each Interest Payment with the First Lien Credit Agreement Administrative Agent on or before the tenth day of each month (or, if such date is not a business day, on the next succeeding business day thereafter).  The special record date for determining the First Lien Lenders entitled to any such Interest Payment shall be the first business day of each month, and the First Lien Credit Agreement Administrative Agent shall, subject to the First Lien Credit Agreement Administrative Agent’s right to offset or recoup amounts owed to it and its representatives for fees and expenses to the extent not otherwise paid hereunder, including pursuant to the First Lien Credit Agreement, use any such funds deposited with it by the Debtors to pay such Interest Payment to the First Lien Lenders on the date that is [15] days after such special record date (or, if such day is not a business day, on the next succeeding business day thereafter).  For the avoidance of doubt, (i) the interest payment made by the Debtors to the First Lien Credit Agreement Administrative Agent on [DATE] shall by paid by the First Lien Credit Agreement Administrative Agent in accordance with the provisions of this paragraph, and (ii) the Debtors’ obligations under this paragraph shall be satisfied upon providing the required notices and remitting the Interest Payment to the First Lien Credit Agreement Administrative Agent.  The Interest Payments shall not be subject to avoidance, reduction, disallowance, disgorgement, counterclaim, or subordination; provided that if the Court finally determines that the First Lien Lenders are not entitled to receive all or any portion of the Interest Payments under section 506(b) of the Bankruptcy Code or otherwise, such amounts paid to or for the benefit of the First Lien Credit Agreement Administrative Agent and individual First Lien Lenders, as applicable, will instead be deemed recharacterized as repayments of principal in reduction of the applicable First Lien Credit Agreement Secured Obligations.

(h)          Right to Seek Additional Adequate Protection.  Subject in all respects to the Intercreditor Agreement, this Interim Order is without prejudice to, and does not constitute a waiver of, expressly or implicitly, the rights of the respective First Lien Secured Parties to request additional forms of adequate protection at any time.

6.          Events of Default.  The occurrence and continuation of any of the following events, unless waived in writing by the First Lien Ad Hoc Group (email from its counsel shall suffice), in its sole discretion, shall constitute an event of default (each an “Event of Default” and collectively, the “Events of Default”):

7.          Rights and Remedies upon Event of Default.  Upon the occurrence and during the continuance of an Event of Default, the Debtors, upon five (5) business days’ written notice to the Debtors, their lead restructuring counsel, the U.S. Trustee, and the Creditors’ Committee (the “Notice Period”), shall immediately cease using Cash Collateral and the First Lien Ad Hoc Group may, by its counsel, in accordance with the terms and conditions of this Interim Order, the Prepetition Loan Documents, or the Intercreditor Agreement, revoke the First Lien Secured Parties’ consent to the Debtors’ use of Cash Collateral hereunder; provided that, during the Notice Period, the Debtors may continue to use Cash Collateral pursuant to the terms of this Interim Order.  Upon the expiration of the Notice Period and the occurrence of an Event of Default, (a) the Debtors shall immediately cease using Cash Collateral, other than to pay employee wages, payroll, and benefits, (b) the Adequate Protection Obligations, if any, shall become immediately due and payable, and (c) subject to authorization contained in a further Court order (which further Court order may be sought on an expedited basis) and the terms of the Intercreditor Agreement, each First Lien Secured Party may exercise the rights and remedies available under the Prepetition Loan Documents, the Intercreditor Agreement, this Interim Order, or applicable law, as applicable (subject only to the Carve Out), including, without limitation, foreclosing upon and selling all or a portion of the Prepetition Collateral or Collateral in order to collect and satisfy the Adequate Protection Obligations, and First Lien Credit Agreement Obligations, in accordance with this Interim Order and the Intercreditor Agreement.  The automatic stay under section 362 of the Bankruptcy Code is hereby deemed modified and vacated to the extent necessary to permit such actions; provided, that during the Notice Period, unless the Court orders otherwise and as set forth herein, the automatic stay under section 362 of the Bankruptcy Code (to the extent applicable) shall remain in effect.  Any delay or failure of the First Lien Secured Parties to exercise rights under the Prepetition Loan Documents or this Interim Order shall not constitute a waiver of their respective rights hereunder, thereunder or otherwise, unless any such waiver is pursuant to a written instrument executed in accordance with the terms of the applicable document.  Without limiting the First Lien Secured Parties’ rights under the First Lien Credit Documents, the First Lien Credit Agreement Administrative Agent shall be entitled to apply the payments or proceeds of the Prepetition Collateral and the Collateral in accordance with the provisions of the Prepetition Loan Documents and the Intercreditor Agreement, as applicable.  Notwithstanding the occurrence of an Event of Default or anything herein, all of the rights, remedies, benefits and protections provided to the Collateral Agent and the First Lien Secured Parties under this Interim Order shall survive the Event of Default.  In any hearing related to such nonconsensual use of Cash Collateral, the Debtors, the Collateral Agent and the First Lien Secured Parties may raise, assert, prosecute, or otherwise advance any and all rights and arguments that could be asserted at such hearing.

8.          Effect of Stipulations on Third Parties.  The Debtors’ Stipulations shall be binding upon the Debtors and their affiliates and any of their respective successors (including, without limitation, any chapter 7 or chapter 11 trustee appointed or elected for any Debtor) in all circumstances upon entry of this Interim Order.  The Debtors’ Stipulations shall be binding upon each other party in interest, including any Creditors’ Committee, except to the extent and only to the extent such Creditors’ Committee or, solely as provided in clause (y) below, any other party in interest with proper standing (including any chapter 11 trustee) other than the Debtors (or if the Chapter 11 Cases are converted to cases under chapter 7 prior to the expiration of the Challenge Period (as defined below), the chapter 7 trustee in such Successor Case), first, commences, by the earlier of (x) with respect to any Creditors’ Committee, sixty (60) calendar days after the formation of any Creditors’ Committee, and (y) with respect to other parties in interest with requisite standing other than the Debtors or any Creditors’ Committee, seventy-five (75) calendar days following the date of entry of the Interim Order (such time period established by the earlier of clauses (x) and (y), as the same may be extended as provided for herein, shall be referred to as the “Challenge Period,” and the date that is the next calendar day after the termination of the Challenge Period in the event that either (i) no Challenge (as defined below) is properly raised during the Challenge Period or (ii) with respect only to those parties who properly file a Challenge, such Challenge is fully and finally adjudicated, shall be referred to as the “Challenge Period Termination Date”), a contested matter, adversary proceeding, or other matter challenging or otherwise objecting to the admissions, stipulations, findings, or releases included in the Debtors’ Stipulations (each, a “Challenge”), and second, obtains a final, non-appealable order in favor of such party in interest sustaining any such Challenge in any such timely-filed contested matter, adversary proceeding, or other action (any such Challenge timely brought for which such a final and non-appealable order is so obtained, a “Successful Challenge”).  If a chapter 7 trustee or a chapter 11 trustee is appointed or elected during the Challenge Period, then the Challenge Period Termination Date with respect to such trustee only, shall be the later of (i) the last day of the Challenge Period and (ii) the date that is twenty (20) days after the date on which such trustee is appointed or elected.  Except as otherwise expressly provided herein, from and after the Challenge Period Termination Date and for all purposes in these Chapter 11 Cases and any Successor Cases (and after the dismissal of these Cases or any Successor Cases), (i) any and all payments made to or for the benefit of the First Lien Secured Parties or otherwise authorized by this Interim Order (whether made prior to, on, or after the Petition Date) shall be indefeasible and not be subject to counterclaim, set-off, subordination, recharacterization, defense, disallowance, recovery, or avoidance, (ii) any and all such Challenges by any party in interest shall be deemed to be forever released, waived, and barred, (iii) all of the First Lien Credit Agreement Secured Obligations shall be deemed to be fully allowed claims within the meaning of section 506 of the Bankruptcy Code, and (iv) the Debtors’ Stipulations shall be binding on all parties in interest in these Cases or any Successor Cases, including any Creditors’ Committee or chapter 11 or chapter 7 trustee.  Notwithstanding the foregoing, to the extent any Challenge is timely asserted, the Debtors’ Stipulations and the other provisions in clauses (i) through (iv) in the immediately preceding sentence shall nonetheless remain binding and preclusive on any Creditors’ Committee and on any other party in interest from and after the Challenge Period Termination Date, except to the extent that such Debtors’ Stipulations or the other provisions in clauses (i) through (iv) of the immediately preceding sentence were expressly challenged in such Challenge and such Challenge becomes a Successful Challenge.  The Challenge Period may be extended only (i) with the written consent of the Debtors and, with respect to any challenge related to the First Lien Credit Agreement Obligations, with the written consent of the Debtors and the First Lien Credit Agreement Administrative Agent or (ii) by order of the Court for good cause shown. Notwithstanding any provision to the contrary herein, nothing in this Interim Order shall be construed to grant standing on any party in interest, including any Committee, to bring any Challenge on behalf of the Debtors’ estates.  The failure of any party in interest, including any Creditors’ Committee, to obtain an order of this Court prior to the Challenge Period Termination Date granting standing to bring any Challenge on behalf of the Debtors’ estates shall not be a defense to failing to commence a Challenge prior to the Challenge Period Termination Date as required under this paragraph or to require or permit an extension of the Challenge Period Termination Date.

9.           Carve Out.

(a)         Carve Out.  As used in this Interim Order, the “Carve Out” means the sum of:  (i) all fees required to be paid to the Clerk of the Court and to the Office of the United States Trustee under section 1930(a) of title 28 of the United States Code plus interest at the statutory rate (without regard to the notice set forth in (iii) below); (ii) all reasonable fees and expenses up to $50,000 incurred by a trustee under section 726(b) of the Bankruptcy Code (without regard to the notice set forth in (iii) below); (iii) to the extent allowed at any time, whether by interim order, procedural order, or otherwise, all unpaid fees and expenses (the “Allowed Professional Fees”) incurred by persons or firms retained by the Debtors pursuant to section 327, 328, or 363 of the Bankruptcy Code (the “Debtor Professionals”) and the Creditors’ Committee pursuant to section 328 or 1103 of the Bankruptcy Code (the “Committee Professionals” and, together with the Debtor Professionals, the “Professional Persons”) at any time before or on the first business day following delivery by the Prepetition Agent of a Carve Out Trigger Notice (as defined below), whether allowed by the Court prior to or after delivery of a Carve Out Trigger Notice; and (iv) Allowed Professional Fees of Professional Persons in an aggregate amount not to exceed $1,250,000 incurred after the first business day following delivery by the Prepetition Agent of the Carve Out Trigger Notice, to the extent allowed at any time, whether by interim order, procedural order, or otherwise (the amounts set forth in this clause (iv) being the “Post-Carve Out Trigger Notice Cap”).  For purposes of the foregoing, “Carve Out Trigger Notice” shall mean a written notice delivered by email (or other electronic means) by the Prepetition Agent to the Debtors, their lead restructuring counsel, the U.S. Trustee, and counsel to the Creditors’ Committee, which notice may be delivered following the occurrence and during the continuation of a Termination Event, and upon termination of the Debtors’ right to use Cash Collateral by the First Lien Lenders, stating that the Post‑Carve Out Trigger Notice Cap has been invoked.

(b)         Carve Out Reserves.  On the day on which a Carve Out Trigger Notice is given by the Prepetition Agent to the Debtors with a copy to the U.S. Trustee and counsel to any Creditors’ Committee (the “Termination Declaration Date”), the Carve Out Trigger Notice shall constitute a demand to the Debtors to utilize all cash on hand as of such date and any available cash thereafter held by any Debtor to fund a reserve in an amount equal to the then unpaid amounts of the Allowed Professional Fees.  The Debtors shall deposit and hold such amounts in a segregated account in trust to pay such then unpaid Allowed Professional Fees (the “Pre-Carve Out Trigger Notice Reserve”) prior to any and all other claims.  On the Termination Declaration Date, after funding the Pre-Carve Out Trigger Notice Reserve, the Debtors shall utilize all remaining cash on hand as of such date and any available cash thereafter held by any Debtor to fund a reserve in an amount equal to the Post-Carve Out Trigger Notice Cap (the “Post‑Carve Out Trigger Notice Reserve” and, together with the Pre-Carve Out Trigger Notice Reserve, the “Carve Out Reserves”) prior to any and all other claims.  All funds in the Pre-Carve Out Trigger Notice Reserve shall be used first to pay the obligations set forth in clauses (i) through (iii) of the definition of Carve Out set forth above (the “Pre‑Carve Out Amounts”), but not, for the avoidance of doubt, the Post-Carve Out Trigger Notice Cap, until paid in full, and then, to the extent the Pre‑Carve Out Trigger Notice Reserve has not been reduced to zero, to pay the Prepetition Agent for the benefit of the First Lien Secured Parties, unless the First Lien Credit Agreement Secured Obligations have been indefeasibly paid in full, in cash, in which case any such excess shall be paid to the Debtors’ creditors in accordance with their rights and priorities as of the Petition Date.  All funds in the Post-Carve Out Trigger Notice Reserve shall be used first to pay the obligations set forth in clause (iv) of the definition of Carve Out set forth above (the “Post-Carve Out Amounts”), and then, to the extent the Post‑Carve Out Trigger Notice Reserve has not been reduced to zero, to pay the Prepetition Agent for the benefit of the First Lien Secured Parties, unless the First Lien Credit Agreement Secured Obligations have been indefeasibly paid in full, in cash, in which case any such excess shall be paid to the Debtors’ prepetition secured creditors in accordance with their rights and priorities as of the Petition Date.  Notwithstanding anything to the contrary in the Prepetition Loan Documents, the Interim Order, or this Interim Order, if either of the Carve Out Reserves is not funded in full in the amounts set forth in this paragraph 9(b), then, any excess funds in one of the Carve Out Reserves following the payment of the Pre-Carve Out Amounts and Post-Carve Out Amounts, respectively, shall be used to fund the other Carve Out Reserve, up to the applicable amount set forth in this paragraph 9(b), prior to making any payments to the Prepetition Agent or any of the Debtors’ creditors, as applicable.  Notwithstanding anything to the contrary in the Prepetition Loan Documents, the Interim Order, or this Interim Order, following delivery of a Carve Out Trigger Notice, the Prepetition Agent shall not sweep or foreclose on cash (including cash received as a result of the sale or other disposition of any assets) of the Debtors until the Carve Out Reserves have been fully funded, but shall have a security interest in any residual interest in the Carve Out Reserves, with any excess paid to the Prepetition Agent for application in accordance with the Prepetition Loan Documents.  Further, notwithstanding anything to the contrary in this Interim Order, (i) disbursements by the Debtors from the Carve Out Reserves shall not constitute, increase, or reduce First Lien Credit Agreement Secured Obligations, (ii) the failure of the Carve Out Reserves to satisfy in full the Allowed Professional Fees shall not affect the priority of the Carve Out, and (iii) in no way shall the Approved Budget, Carve Out, Post-Carve Out Trigger Notice Cap, Carve Out Reserves, or any of the foregoing be construed as a cap or limitation on the amount of the Allowed Professional Fees due and payable by the Debtors.  For the avoidance of doubt and notwithstanding anything to the contrary in the Interim Order, this Interim Order, or the Prepetition Loan Documents, the Carve Out shall be senior to all liens and claims securing the First Lien Credit Agreement Secured Obligations, the Adequate Protection Liens, and the Superpriority Claims, and any and all other forms of adequate protection, liens, or claims securing the First Lien Credit Agreement Secured Obligations.

(c)          Payment of Allowed Professional Fees Prior to the Termination Declaration Date.  Any payment or reimbursement made prior to the occurrence of the Termination Declaration Date in respect of any Professional Fees shall not reduce the Carve Out.

(d)          Payment of Carve Out On or After the Termination Declaration Date.  Any payment or reimbursement made on or after the occurrence of the Termination Declaration Date in respect of any Allowed Professional Fees shall permanently reduce the Carve Out on a dollar for dollar basis.

10.         Restrictions on Use of Proceeds of Collateral and the Carve Out.  No proceeds of Collateral or the Carve Out shall be used for the purpose of: (a) investigating, objecting to, challenging, or contesting in any manner, or in raising any defenses to, the amount, validity, extent, perfection, priority, enforceability, or avoidability of the First Lien Credit Agreement Secured Obligations, or any liens or security interests with respect thereto, or any other rights or interests of the First Lien Secured Parties, whether in their capacity as such or otherwise, including with respect to the Adequate Protection Liens, or in asserting any claims or causes of action against any of the First Lien Secured Parties (whether in their capacity as such or otherwise), including, without limitation, for lender liability or pursuant to sections 105, 510, 544, 547, 548, 549, 550, or 552 of the Bankruptcy Code, applicable non-bankruptcy law or otherwise; or (b) paying any amount on account of any claims arising before the Petition Date unless such payments are approved by an order of this Court; provided that prior to the Termination Declaration Date, up to $50,000 of Cash Collateral shall be made available to the Creditors’ Committee for fees and expenses incurred in connection with any investigation of (but not preparing, drafting or filing any documents or pleadings objecting to, challenging, or contesting in any manner, or raising any defenses to) the liens and claims of the First Lien Secured Parties (the “Committee Investigation Budget”).  No claim for amounts incurred in connection with such activities (including amounts incurred in connection with an investigation in excess of the Committee Investigation Budget) shall be allowed, treated, or payable as an administrative expense claim for purposes of section 1129(a)(9)(A) of the Bankruptcy Code.  Nothing contained in this paragraph 10 shall prohibit the Debtors from responding or objecting to or complying with discovery requests of any Creditors’ Committee, in whatever form, made in connection with such investigation or the payment from the Cash Collateral of professional fees related thereto or from contesting or challenging whether a Termination Event has in fact occurred.

11.          Proceeds of Sale or Additional Financing.  The proceeds of any (i) sale of any Collateral outside the ordinary course in excess of $100,000, whether pursuant to section 363 of the Bankruptcy Code or a plan of reorganization or a plan of liquidation under section 1129 of the Bankruptcy Code, or (ii) additional financing, including any transaction involving the public or private issuance, sale, or placement of newly-issued equity, equity‑linked, or debt securities, instruments, obligations, or other funded debt of the Debtors, shall be applied to pay down the First Lien Credit Agreement Secured Obligations.

12.          No Waiver of First Lien Secured Parties’ Rights; Reservation of Rights.  Except as set forth herein, this Interim Order is without prejudice to, and does not constitute a waiver of, expressly or implicitly, any of the First Lien Secured Parties’ rights with respect to any person or entity other than the Debtors, or with respect to any other collateral owned or held by any person or entity other than the Debtors.  The rights of the First Lien Secured Parties are expressly reserved and entry of this Interim Order shall be without prejudice to, and does not constitute a waiver, expressly or implicitly, of:

(a)          the First Lien Secured Parties’ rights under any of the Prepetition Loan Documents and the Intercreditor Agreement;

(b)          the First Lien Secured Parties’ rights to seek any other or supplemental relief in respect of the Debtors;

(c)          the First Lien Secured Parties’ rights to seek modification of the grant of adequate protection provided under this Interim Order so as to provide different or additional adequate protection at any time;

(d)          any of the First Lien Secured Parties’ rights under the Bankruptcy Code or under non-bankruptcy law including, without limitation, to the right to: (i) request modification of the automatic stay of section 362 of the Bankruptcy Code; (ii) request dismissal of the Chapter 11 Cases, conversion of any of the Chapter 11 Cases to cases under chapter 7, or appointment of a chapter 11 trustee or examiner with extended powers; or (iii) propose, subject to section 1121 of the Bankruptcy Code, a chapter 11 plan or plans; and

(e)          any other rights, claims, or privileges (whether legal, equitable, or otherwise) of the First Lien Secured Parties.

13.         First Lien Secured Parties’ Right to Credit Bid.  Subject to the Prepetition Loan Documents, the Intercreditor Agreement, the First Lien Credit Agreement Administrative Agent shall have the right to credit bid up to the full amount of any remaining First Lien Credit Agreement Obligations (as applicable) in the sale of any Prepetition Collateral whether pursuant to (a) section 363 of the Bankruptcy Code, (b) a plan of reorganization or a plan of liquidation under section 1129 of the Bankruptcy Code, or (c) a sale or disposition by a chapter 7 trustee for any Debtor under section 725 of the Bankruptcy Code and the First Lien Credit Agreement Administrative Agent shall be deemed a qualified bidder (or such analogous term) in connection with any such sale.

14.          Further Assurances.  The Debtors shall execute and deliver to the First Lien Credit Agreement Administrative Agent and counsel to the First Lien Ad Hoc Group all such agreements, financing statements, instruments, and other documents as they may reasonably request to evidence, confirm, validate, or evidence the perfection of the Adequate Protection Liens granted pursuant hereto.

15.          506(c) Waiver.  Except to the extent of the Carve Out, and subject to and upon entry of the Final Order, no costs or expenses of administration which have been or may be incurred in any of the Chapter 11 Cases at any time shall be charged against the First Lien Secured Parties, any of the First Lien Credit Agreement Secured Obligations, any of their respective claims, or the Collateral pursuant to sections 506(c) or 105(a) of the Bankruptcy Code, or otherwise, without the prior written consent of the First Lien Credit Agreement Administrative Agent, and no such consent shall be implied from any other action, inaction, or acquiescence by any of the First Lien Secured Parties or their respective representatives.

16.          Bankruptcy Code Section 552(b).  The First Lien Secured Parties shall each be entitled to all the rights and benefits of section 552(b) of the Bankruptcy Code and, subject to the entry of a Final Order granting such relief, the “equities of the case” exception under section 552(b) of the Bankruptcy Code shall not apply to the First Lien Secured Parties.

17.          Restrictions on Granting Postpetition Claims and Liens.  Except with respect to the Carve Out, no claim or lien that is pari passu with or senior to the claims and liens of the First Lien Secured Parties shall be offered by any Debtor, or granted, to any other person, except in connection with any financing used to pay in full in cash the claims of the First Lien Secured Parties or that would constitute a Permitted Lien with respect to the Debtor against whom such lien is granted; provided that anything in the foregoing is consistent with the Intercreditor Agreement.

18.        Automatic Effectiveness of Liens.  The Adequate Protection Liens shall not be subject to challenge and shall attach and become valid, perfected, enforceable, non-avoidable, and effective by operation of law as of the Petition Date, without any further action by the Debtors or the First Lien Secured Parties and without the necessity of execution by the Debtors, or the filing or recordation, of any financing statements, security agreements, vehicle lien applications, mortgages, filings with the U.S. Patent and Trademark Office, the U.S. Copyright Office, or the Library of Congress, or other documents or the taking of any other actions.  If the First Lien Credit Agreement Administrative Agent hereafter reasonably requests that the Debtors execute and deliver to them financing statements, security agreements, collateral assignments, mortgages, or other instruments and documents considered by such agent to be reasonably necessary or desirable to further evidence the perfection of the Adequate Protection Liens, as applicable, the Debtors are hereby authorized and directed to execute and deliver such financing statements, security agreements, mortgages, collateral assignments, instruments, and documents, and the First Lien Credit Agreement Administrative Agent is hereby authorized to file or record such documents in their discretion without seeking modification of the automatic stay under section 362 of the Bankruptcy Code, in which event all such documents shall be deemed to have been filed or recorded at the time and on the date of entry of this Interim Order.

19.          No Marshaling/Application of Proceeds.  Subject to and upon entry of the Final Order, in no event shall the First Lien Secured Parties be subject to the equitable doctrine of “marshaling” or any other similar doctrine with respect to any of the Collateral; provided that the First Lien Secured Parties shall be entitled to seek to apply such marshaling or other similar doctrines with respect the Collateral against any other party.

20.         Proofs of Claim.  None of the First Lien Secured Parties shall be required to file proofs of claim in any of the Chapter 11 Cases for any First Lien Credit Agreement Secured Obligation or any Superpriority Claim or other claim arising in connection with this Interim Order.  Notwithstanding any order entered by the Court in relation to the establishment of a bar date, the Prepetition Agent, on behalf of themselves and First Lien Secured Parties, as applicable, is hereby authorized and entitled, in its sole and absolute discretion, but not required, to file (and amend and/or supplement, as each sees fit) a proof of claim and/or aggregate proofs of claim in the Chapter 11 Cases for any such claims; for avoidance of doubt, any such proof of claim may (but is not required to be) filed as one consolidated proof of claim against all of the applicable Debtors, rather than as separate proofs of claim against each such Debtor.  Any proof of claim filed by the Prepetition Agent shall be deemed to be in addition to and not in lieu of any other proof of claim that may be filed by any of the respective First Lien Secured Parties.  The provisions set forth in this paragraph are intended solely for the purpose of administrative convenience and shall not affect the substantive rights of any party in interest or their respective successors-in-interest.

21.          Binding Effect.  The provisions of this Interim Order shall be binding upon and inure to the benefit of the First Lien Secured Parties to the extent and as set forth herein, the Debtors, any Committee, and their respective successors and assigns (including any chapter 7 or chapter 11 trustee hereafter appointed or elected for the estate of any of the Debtors, an examiner appointed pursuant to section 1104 of the Bankruptcy Code or any other fiduciary appointed as a legal representative of any of the Debtors or with respect to the property of the estate of any of the Debtors).  To the extent permitted by applicable law, this Interim Order shall bind any trustee hereafter appointed for the estate of any of the Debtors, whether in these Chapter 11 Cases or in the event of the conversion of any of the Chapter 11 Cases to a liquidation under chapter 7 of the Bankruptcy Code.  Such binding effect is an integral part of this Interim Order.

22.         Survival.  The provisions of this Interim Order and any actions taken pursuant hereto shall survive the entry of any order:  (a) confirming any plan of reorganization in any of the Chapter 11 Cases, (b) converting any of the Chapter 11 Cases to a chapter 7 case, or (c) dismissing any of the Chapter 11 Cases, and, with respect to the entry of any order as set forth in clause (b) or (c) of this paragraph, the terms and provisions of this Interim Order as well as the Adequate Protection Liens and Superpriority Claims shall continue in full force and effect notwithstanding the entry of any such order.

23.         Effect of Dismissal of Chapter 11 Cases.  If any of the Chapter 11 Cases is dismissed, converted, or substantively consolidated, such dismissal, conversion, or substantive consolidation of these Chapter 11 Cases shall not affect the rights of the First Lien Secured Parties under this Interim Order, and all of their rights and remedies hereunder shall remain in full force and effect as if the Chapter 11 Case had not been dismissed, converted, or substantively consolidated.  If an order dismissing any of the Chapter 11 Cases is at any time entered, such order shall provide or be deemed to provide (in accordance with sections 105 and 349 of the Bankruptcy Code) that:  (a) the Prepetition Liens, Adequate Protection Liens, and Superpriority Claims granted to and conferred upon the First Lien Secured Parties shall continue in full force and effect and shall maintain their priorities as provided in this Interim Order (and that such Superpriority Claims shall, notwithstanding such dismissal, remain binding on all interested parties), and (b) to the greatest extent permitted by applicable law, this Court shall retain jurisdiction, notwithstanding such dismissal, for the purpose of enforcing the Prepetition Liens, Adequate Protection Liens, and Superpriority Claims referred to in this Interim Order.

24.          Order Effective.  This Interim Order shall be effective as of the date of the signature by the Court.

25.          Controlling Effect of Interim Order.  To the extent any provision of this Interim Order conflicts or is inconsistent with any provision of the Motion, the provisions of this Interim Order shall control to the extent of such conflict.

26.          Final Hearing.  The Final Hearing on the Motion shall be heard on [DATE] at [TIME] at the United States Bankruptcy Court for the Southern District of New York.  The Debtors shall promptly serve a notice of the Final Hearing, together with copies of this Interim Order and the Motion (which shall constitute adequate notice of the Final Hearing) on the parties having been given notice of the Hearing and any other party that has filed a request for notices with this Court.  Any party in interest objecting to the relief sought at the Final Hearing shall file written objections, and shall be filed with the Clerk of the Court, in each case so as to be received by 4:00 p.m. on the date that is no later than seven (7) days before the Final Hearing.

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EXHIBIT E

New Secured TL Term Sheet

 

This term sheet (the “New TL Term Sheet”) is Exhibit E to the Restructuring Support Agreement (the “RSA”). Capitalized terms used but not defined herein have the meanings given to them in the RSA.

 

This New TL Term Sheet sets forth the principal terms of a takeback first lien term loan credit facility (the “New First Lien Term Loan Facility”; the credit agreement evidencing the New First Lien Term Loan Facility, the “New First Lien Credit Agreement”. The New First Lien Term Loan Facility will be subject to (a) the approval of the Bankruptcy Court and (b) emergence by the Loan Parties from the Chapter 11 Cases on the Plan Effective Date, in accordance with (i) the Plan, (ii) any order entered by the Bankruptcy Court authorizing the Loan Parties to enter into the New First Lien Term Loan Facility, which order may be part of the order confirming the Plan, each of which shall be in form and substance reasonably acceptable to the Requisite New First Lien Lenders (as defined below), and (iii) the New First Lien Term Loan Facility Documentation (as defined below) to be executed by the Loan Parties, the Administrative Agent (as defined below) and the New First Lien Lenders (as defined below).

 

Closing Date	The date on which the New First Lien Term Loans are issued under the New First Lien Term Loan Facility and the Restructuring Transaction is consummated pursuant to the Plan (the “Closing Date”).
Maturity	The date that is 5 years after the Closing Date (the “Maturity Date”).
Collateral and Guarantees	The New First Lien Term Loan Facility will be secured by (i) a perfected first priority lien on all non-working capital assets of the Loan Parties which lien will be senior to the liens securing the Exit ABL Credit Facility (as defined below) and the liens securing the New Junior Lien Convertible Term Loan Facility and (ii) a perfected second priority lien on all working capital assets of the Loan Parties, which lien will be junior to the liens securing the Exit ABL Credit Facility and senior to the liens securing the New Junior Lien Convertible Term Loan Facility, in each case subject to other permitted liens in accordance with the New First Lien Term Loan Facility Documentation, which liens shall be subject to intercreditor arrangements in form and substance reasonably satisfactory to the Requisite New First Lien Lenders, subject to any agreed post-closing perfection requirements and subject to thresholds, exceptions and exclusions substantially similar to the Pre-Petition Facility Documentation (as defined below) (the “Collateral”).
First Lien Term Loan Facility Documentation	The New First Lien Credit Agreement and other loan documents governing the New First Lien Term Loan Facility shall contain terms substantially similar to the terms of that certain First Lien Credit Agreement dated as of June 30, 2014, as in effect on such date, among the Borrower, the guarantors party thereto, The Bank of New York Mellon, as administrative and collateral agent, and the lenders from time to time party there to (the “Pre-Petition Facility Documentation”), with modifications to reflect this term sheet and other adjustments reasonably satisfactory to the Requisite New First Lien Lenders (such loan documents, the “New First Lien Term Loan Facility Documentation”).
Conditions to Closing	The applicable closing conditions set forth in the Pre-Petition Facility Documentation and the following: A.  The Restructuring Transaction shall have been consummated in all material respects in accordance with the Plan (all conditions set forth therein having been satisfied or waived in accordance with its terms), and substantial consummation of the Plan in all material respects in accordance with its terms shall have occurred contemporaneously with the closing of the New First Lien Term Loan Facility. B.   Upon the consummation of the Restructuring Transaction, the New First Lien Lenders shall own at least 90% of common equity of Reorganized Jason (subject to dilution pursuant to any warrants issued pursuant to the Warrant Agreement and any management incentive plan).

	C.   Upon consummation of the Plan, all First Lien Holder Deficiency Claims (as defined in the Plan) shall be waived and discharged. D.   The Borrower shall have entered into a third-party asset-based exit financing that (i) provides availability as of the Closing Date of at least $20 million for revolving borrowings after permitting for any amounts on account of outstanding letters of credit; and (ii) has aggregate commitments in an amount not less than  $30 million (the “Exit ABL Credit Facility”) on terms acceptable to the Requisite New First Lien Lenders. E.   The Borrower shall have borrowed or shall have deemed to borrow the term loans under the New Junior Lien Convertible Term Loan Facility in the aggregate principal amount not less than $50 million on terms acceptable to the Requisite New First Lien Lenders. F.    The Borrower shall have used commercially reasonable efforts to obtain ratings for the New First Lien Term Loan Facility and the New Junior Lien Convertible Term Loan Facility from at least two out of the three following rating agencies: Moody’s, Standard & Poor’s and Fitch; provided, however, that to the extent such ratings are not obtained prior to or on the Closing Date, the Borrower shall obtain such ratings within 30 days after the Closing Date (or such longer period of time as the Requisite New First Lien Lenders may reasonably agree). G.   Delivery of all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act, in each case at least three (3) business days prior to the Closing Date. H.   Payment by the Borrower on the Closing Date of  (i) the administrative and collateral agency fee due on such date, (ii) the fees of counsel to the New First Lien Lenders in connection with the transactions hereunder and (iii) all reasonable out-of-pocket expenses payable on the Closing Date pursuant to the terms hereof. I.     Other customary closing conditions for facilities of this type and reasonably requested by the Requisite New First Lien Lenders.
Interest Rate	Interest shall accrue on the New First Lien Term Loans at a rate of, at the Borrower’s election, (i) LIBOR plus 6.0% per annum (subject to a 1.00% LIBOR floor) paid in cash or (ii) LIBOR (subject to a 1.00% LIBOR floor) plus 2.0% per annum paid in cash and paid-in-kind interest of 4.0% per annum. Any paid-in-kind interest so elected to be paid will be added to the principal amount of the New First Lien Term Loans outstanding under the New First Lien Term Loan Facility on each applicable interest payment date.  The Borrower shall also have the right to elect that the New First Lien Term Loans bear interest at a rate determined by reference to an “alternate base rate”, and the interest rate margin with respect to New First Lien Term Loans bearing interest at the alternate base rate shall be 5.00% per annum.

Default Interest	During the continuation of an Event of Default, all outstanding principal amount of the New First Lien Term Loans and any other overdue amounts will bear interest at an additional 2% per annum above the interest rate otherwise applicable.
Scheduled Amortization	Commencing with the fiscal quarter ending March 31, 2022, 0.25% of the original principal amount of the New First Lien Term Loans, payable quarterly in a manner consistent with the Pre-Petition Facility Documentation.
Call Protection	(i) Not callable for one year (subject to a 4% premium plus the Make-Whole Amount), (ii) callable in year two at 103% of par value, (iii) callable in year three at 102% of par value, and (iv) callable in year four and beyond at par value, in each case in whole or in part. The Make-Whole Amount shall be defined in the New First Lien Term Loan Facility Documentation to mean, on any date of repayment or prepayment (including following acceleration) of all or any portion of the New First Lien Term Loans, an amount in cash equal to all interest that would have been paid on the New First Lien Term Loans that are repaid or prepaid, from the date of repayment or prepayment through and including the third anniversary of the Closing Date calculated on the basis of the interest rate with respect to the New First Lien Term Loans that is in effect on the date of such repayment or prepayment, discounted to the date of repayment or prepayment on a quarterly basis (assuming a 365-day year and actual days elapsed) at a rate equal to the sum of the treasury rate plus 0.50%. Call protection to apply to (x) any voluntary prepayment or (y) any mandatory prepayment from unpermitted debt issuances.
Mandatory Prepayments	Consistent with the mandatory prepayments set forth in the Pre-Petition Facility Documentation, and in any event will include annual mandatory prepayments, commencing on March 31, 2021, in an amount equal to Loan Parties’ and their subsidiaries’ domestic cash and cash equivalents balance on March 31, 2021 in excess of $10 million payable in cash (subject to ordinary course standard for working capital and other customary exceptions) to apply to Loan Parties’ and their subsidiaries’ domestic cash balance (the “Excess Cash Payment Amount”).  The Excess Cash Payment Amount shall be paid in cash by April 30, with the first Excess Cash Payment Amount due on April 30, 2021. The Exit Facility Documentation shall include a customary provision which shall permit the New First Lien Lenders to decline proceeds of any mandatory prepayment event.

Voluntary Prepayments	Voluntary prepayments of the New First Lien Term Loans will be permitted at any time at par, without premium or penalty, subject to (i) the call protection described above and (ii) reimbursement of the New First Lien Lenders’ redeployment costs in the case of a prepayment of LIBOR borrowings other than on the last day of the relevant interest period.
Application of Payments	All voluntary prepayments of the New First Lien Term Loans will be made ratably to the New First Lien Lenders and may be applied to any of New First Lien Term Loans as directed by the Borrower (and absent such direction, in direct order of maturity). All mandatory prepayments of the New First Lien Term Loan Facility will be made ratably to the New First Lien Lenders and applied to the remaining amortization payments in direct order of maturity.
Representations and Warranties	To be substantially similar to the Pre-Petition Facility Documentation and other representations and warranties usual and customary for facilities of this type.
Affirmative Covenants	To be substantially similar to the Pre-Petition Facility Documentation and other affirmative covenants usual and customary for facilities of this type, including, without limitation, Loan Parties causing their foreign subsidiaries to use commercially reasonable efforts to extend maturity of their respective existing debt facilities beyond the Maturity Date.
Reporting Requirements	To be substantially similar to the Pre-Petition Facility Documentation and other reporting requirements usual and customary for facilities of this type.
Negative Covenants	Usual and customary for facilities of this type with exceptions and baskets  to be agreed, including, without limitation, the following: A.     Restrictions on prepayments or repurchases of the New Junior Convertible Term Loans; B.     Prohibition on restricted payments, with exceptions for payments to any holding company for ordinary course costs and expenses; C.     Prohibition on unrestricted subsidiaries designation; D.    Prohibition on incurrence of incremental debt, senior and pari passu debt (other than certain purchase money debt to be agreed) and limitation on the amount of debt allowed to be incurred under the ABL Exit Credit Facility.
Financial Covenants	Usual and customary for facilities of this type, but in any event to include a maximum capital expenditures covenant, maximum interest coverage ratio and leverage ratio covenants, with testing of interest coverage ratio and leverage ratio covenants commencing on December 31, 2021.

Events of Default	To be substantially similar to the Pre-Petition Facility Documentation and other events of default usual and customary for facilities of this type.
Amendments	Substantially similar to the Pre-Petition Facility Documentation.
Requisite New First Lien Lenders / Voting	50.1% of the New First Lien Term Loans held by the New First Lien Lenders (the “Requisite New First Lien Lenders”). Voting and other restrictions on Affiliated Lenders in Pre-Petition Facility Documentation to be removed.
Expenses and Indemnification	The New First Lien Term Loan Facility Documentation will include expense reimbursement, indemnification and other provisions as are usual and customary for facilities of this kind and in the case of expense reimbursement and indemnification provisions, reimbursement for the costs, fees and expenses of the advisors to the New First Lien Lenders.
Other Provisions	The New First Lien Term Loan Facility Documentation will include customary provisions regarding increased costs, illegality, tax indemnities, waiver of trial by jury and other similar provisions.
Assignments and Participations	To be based on the Pre-Petition Facility Documentation and to allow for non-pro rata open market purchases by the Borrower in an aggregate amount not to exceed 10% of the initial principal of the New First Lien Term Loans (with the understanding that any acquired loans must be cancelled). To include Dutch auctions as set forth in the Pre-Petition Facility Documentation.  Assignments shall be subject to the reasonable consent of the Borrower, unless an event of default exists at the time of any such assignment.
Governing Law	State of New York.
Administrative Agent and Collateral Agent	To be agreed by the Borrower and the Requisite New First Lien Lenders (the “Administrative Agent”).
Counsel to the New First Lien Lenders	Weil, Gotshal & Manges LLP

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Name:
Title:

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This term sheet (the “New Junior Lien Convertible Term Loan Term Sheet”) is Exhibit G to the Restructuring Support Agreement (the “RSA”). Capitalized terms used but not defined herein have the meanings given to them in the RSA.

 

This New Junior Lien Convertible Term Loan Term Sheet sets forth the principal terms of a takeback second lien term loan credit facility (the “New Junior Lien Convertible Term Loan Facility”; the credit agreement evidencing the New Junior Lien Convertible Term Loan Facility, the “New Junior Lien Convertible Credit Agreement”. The New Junior Lien Convertible Term Loan Facility will be subject to (a) the approval of the Bankruptcy Court and (b) emergence by the Loan Parties from the Chapter 11 Cases on the Plan Effective Date, in accordance with (i) the Plan, (ii) any order entered by the Bankruptcy Court authorizing the Loan Parties to enter into the New Junior Lien Convertible Term Loan Facility, which order may be part of the order confirming the Plan, each of which shall be in form and substance reasonably acceptable to the Requisite New Junior Lien Lenders (as defined below), and (iii) the New Junior Lien Term Loan Facility Documentation (as defined below) to be executed by the Loan Parties, the Administrative Agent (as defined below) and the New Junior Lien Lenders (as defined below).

 

1	TBD with reference to the Disclosure Statement pursuant to 11 U.S.C. § 1125.

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WARRANT TERM SHEET

This Term Sheet is a statement of the principal terms and conditions that will be included in the Warrant Agreement.  The Company shall only enter into the Warrant Agreement (and issue the Warrants contemplated hereby) if the requisite holders of Second Lien Credit Agreement Claims voted in favor of the Plan.

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