Exhibit 10.1

Certain portions of this exhibit (indicated by “[*****]”) have been omitted
pursuant to Item 601(b)(10) of Regulation S-K

THIS TRANSACTION SUPPORT AGREEMENT IS NOT AN OFFER OR ACCEPTANCE WITH RESPECT TO
ANY SECURITIES OR A SOLICITATION OF THE ACCEPTANCE OR REJECTION OF A CHAPTER 11
PLAN WITHIN THE MEANING OF SECTIONS 1125 AND 1126 OF THE BANKRUPTCY CODE. ANY
SUCH OFFER OR SOLICITATION WILL COMPLY WITH ALL APPLICABLE SECURITIES LAWS
AND/OR PROVISIONS OF THE BANKRUPTCY CODE. NOTHING CONTAINED IN THIS TRANSACTION
SUPPORT AGREEMENT SHALL BE AN ADMISSION OF FACT OR LIABILITY OR, UNTIL THE
OCCURRENCE OF THE AGREEMENT EFFECTIVE DATE ON THE TERMS DESCRIBED HEREIN, DEEMED
BINDING ON ANY OF THE PARTIES HERETO.

TRANSACTION SUPPORT AGREEMENT

This TRANSACTION SUPPORT AGREEMENT (including all exhibits, annexes, and
schedules hereto in accordance with Section 15.02, this “Agreement”) is made and
entered into as of August 31, 2020 (the “Execution Date”), by and among the
following parties (each of the following described in clauses (i) through
(iii) of this preamble, collectively, the “Parties”):1

 

  (i)

Jill Acquisition LLC, a company incorporated under the laws of Delaware
(J.Jill), J.Jill, Inc., a company incorporated under the laws of Delaware
(“Holdings”) and J. Jill Gift Card Solutions, Inc. a company incorporated under
the laws of Delaware (along with each such parties’ direct and indirect
subsidiaries, collectively, the “Company Parties”);

 

  (ii)

the undersigned beneficial owners (or nominees, investment managers, advisors or
subadvisors for the beneficial owners) of Term Loan Claims that have executed
and delivered counterpart signature pages to this Agreement or a Joinder to
counsel to the Company Parties, counsel to the Consenting Lenders and counsel to
the Consenting Shareholders (collectively, the “Consenting Lenders”); and

 

  (iii)

TowerBrook Capital Partners L.P. and each of its Affiliates that owns Equity
Interests of Holdings (the “Consenting Shareholders” or “TowerBrook” and,
together with the Consenting Lenders, the “Consenting Stakeholders”).

RECITALS

WHEREAS, the Company Parties and the Consenting Stakeholders have in good faith
and at arms’ length negotiated or been apprised of certain restructuring,
refinancing, and recapitalization transactions with respect to the Company
Parties’ capital structure on the terms set forth in this Agreement and as
specified in the out-of-court restructuring term sheet attached as Exhibit A
hereto (the “Out-of-Court Term Sheet”) and the in-court, prepackaged chapter 11
term sheet attached as Exhibit B hereto (the “Chapter 11 Term Sheet” and, such
transactions as described in this Agreement, the Out-of-Court Term Sheet, the
Chapter 11 Term Sheet and the exhibits, schedules and annexes to each such term
sheet, collectively, the “Restructuring Transactions”);

 

1 

Capitalized terms used but not defined in the preamble and recitals to this
Agreement have the meanings ascribed to them in Section 1.

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WHEREAS, the Restructuring Transactions shall be implemented either through
(a) an out-of-court transaction in which the Company Parties shall (i) solicit
consents from existing Lenders under the Term Loan Agreement to certain
amendments thereto and (ii) repurchase the Term Loans of Consenting Lenders at
par (i.e., on a dollar-for-dollar basis) for New Term Loans, in each case on the
terms and subject to the conditions set forth in the Out-of-Court Term Sheet
(the “Out-of-Court Restructuring”), or (b) to the extent the Consent Threshold
has not been obtained by the Out-of-Court Toggle Date, the solicitation of votes
for a prepackaged chapter 11 plan consistent with the terms of this Agreement
and the Chapter 11 Term Sheet (the “Plan”), to be implemented, to the extent set
forth herein, through the commencement by the Company Parties of voluntary cases
under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101 – 1532
(as amended, the “Bankruptcy Code”) in the United States Bankruptcy Court in a
district to be determined by the Company Parties, (which district shall be
reasonably satisfactory to the Required Consenting Lenders and TowerBrook
(provided that TowerBrook has not delivered the notice of termination under
Section 13.03(c) herein) (the “Bankruptcy Court”, such cases, the “Chapter 11
Cases” and such transactions, the “In-Court Restructuring”); and

WHEREAS, the Parties have agreed to take certain actions, as applicable, in
support of the Restructuring Transactions and otherwise described herein, all on
the terms and conditions set forth in this Agreement, the Out-of-Court Term
Sheet and the Chapter 11 Term Sheet.

NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each Party, intending to be legally bound hereby,
agrees as follows:

AGREEMENT

Section 1. Definitions and Interpretation.

1.01. Definitions. The following terms shall have the following definitions:

“Affiliate” has the meaning set forth in the Term Loan Agreement.

“Agreement” has the meaning set forth in the preamble to this Agreement and, for
the avoidance of doubt, includes all the exhibits, annexes, and schedules hereto
in accordance with Section 15.02.

“Agreement Effective Date” means the date on which the conditions set forth in
Section 2 have been satisfied or waived by the appropriate Party or Parties in
accordance with this Agreement.

“Agreement Effective Period” means, with respect to a Party, the period from the
Agreement Effective Date (or, in the case of any Consenting Lender that becomes
a party hereto after the Agreement Effective Date, as of the date such
Consenting Lender becomes a party hereto) to the Termination Date applicable to
that Party.

 

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“Alternative Restructuring Proposal” means any inquiry, proposal, offer, bid,
term sheet, discussion, or agreement with respect to an Alternative
Restructuring.

“Alternative Restructuring” means any sale, disposition, new-money investment,
restructuring, reorganization, merger, amalgamation, acquisition, consolidation,
dissolution, debt investment, equity investment, financing (including any
debtor-in-possession financing or exit financing), use of cash collateral, joint
venture, partnership, liquidation, tender offer, recapitalization, plan of
reorganization, share exchange, business combination, or similar transaction
involving any one or more Company Parties or the debt, equity, or other
interests in any one or more Company Parties, other than the Restructuring
Transactions.

“Automatic Termination Outside Date” has the meaning set forth in Section 13.05.

“Bankruptcy Code” has the meaning set forth in the recitals to this Agreement.

“Bankruptcy Court” has the meaning set forth in the recitals to this Agreement.

“Business Day” means any day other than a Saturday, Sunday, or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the State of New York.

“Chapter 11 Cases” has the meaning set forth in the recitals to this Agreement.

“Chapter 11 Term Sheet” has the meaning set forth in the recitals to this
Agreement.

“Claim” has the meaning ascribed to it in section 101(5) of the Bankruptcy Code.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company Claims/Interests” means any Claim against, or Equity Interest in, a
Company Party, including the Term Loan Claims and the common stock of Holdings.

“Company Parties” has the meaning set forth in the preamble to this Agreement.

“Confidentiality Agreement” means an executed confidentiality agreement,
including with respect to the issuance of a “cleansing letter” or other
agreement relating to public disclosure of material non-public information, in
connection with any proposed Restructuring Transactions.

“Confirmation Order” means the confirmation order with respect to the Plan.

“Consent” means any consent, novation, approval, authorization, qualification,
waiver, registration or notification to be obtained from, filed with or
delivered to a Governmental Entity or any other Person.

“Consenting Lenders” has the meaning set forth in the preamble to this
Agreement.

 

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“Consenting Lenders’ Advisors” means, collectively, (a) Stroock & Stroock &
Lavan LLP, as counsel to the Consenting Lenders, (b) Guggenheim Securities, LLC,
as financial advisor to the Consenting Lenders and (c) if applicable and only to
the extent that the Company Parties commence the Chapter 11 Cases, one (1) local
counsel to the Consenting Lenders.

“Consenting Shareholders” has the meaning set forth in the preamble of this
Agreement.

“Consenting Shareholders’ Advisors” means, collectively, (a) Paul, Weiss
Rifkind, Wharton & Garrison LLP, as counsel to the Consenting Shareholders,
(b) Greenhill & Co., LLC, as financial advisor to the Consenting Shareholders
and (c) if applicable and only to the extent that the Company Parties commence
the Chapter 11 Cases, one (1) local counsel to the Consenting Shareholders.

“Consenting Shareholders’ In-Court Consent Right” has the meaning set forth in
Section 3.02.

“Consenting Stakeholders” has the meaning set forth in the preamble of this
Agreement.

“Consenting Stakeholders’ Advisors” means, collectively, the Consenting Lenders’
Advisors and the Consenting Shareholders’ Advisors.

“Consent Threshold” means holders of the Term Loan Claims representing at least
95.0% of the aggregate outstanding principal amount of all Term Loan Claims.

“COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions thereof or related
or associated epidemics, pandemics, or disease outbreaks.

“Credit Documents” has the meaning set forth in the Term Loan Agreement.

“Debtors” means the Company Parties that commence Chapter 11 Cases, as
applicable.

“Definitive Documents” means the documents listed or described in Section 3.01.

“DIP Documents” means the definitive documents with respect to any
debtor-in-possession financing that may be extended to the Debtors to fund the
Chapter 11 Cases, if necessary, in connection with the In-Court Restructuring,
including the DIP Motion, DIP Facility and DIP Facility Documents, and any
interim and final orders of the Bankruptcy Court with respect to such
debtor-in-possession financing.

“DIP Facility” means the debtor-in-possession financing facility on terms and
conditions consistent in all material respects with the Chapter 11 Term Sheet.

“DIP Facility Documents” means the documents governing the DIP Facility, which
documents shall be consistent in all material respects with this Agreement.

“DIP Motion” means a motion to be filed by the Debtors with the Bankruptcy Court
seeking Bankruptcy Court approval of the DIP Facility and authorizing use of
cash collateral.

 

4

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“Disclosure Statement” means the disclosure statement with respect to the Plan,
that is prepared and distributed to holders of Term Loan Claims in accordance
with, among other things, sections 1125, 1126(b), and 1145 of the Bankruptcy
Code, Rule 3018 of the Federal Rules of Bankruptcy Procedure and other
applicable Law, and all exhibits, schedules, supplements, modifications and
amendments thereto.

“Disclosure Statement Order” means the order approving the Disclosure Statement.

“Entity” shall have the meaning set forth in section 101(15) of the Bankruptcy
Code.

“Equity Interests” means, with respect to any Person, collectively, the shares
(or any class thereof) of capital stock (including common stock and preferred
stock), limited liability company interests, partnership interests and any other
equity, ownership, or profits interests of such Person, and options, warrants,
rights, stock appreciation rights, phantom units, incentives, commitments,
calls, redemption rights, repurchase rights or other securities or agreements to
acquire or subscribe for, or which are convertible into, or exercisable or
exchangeable for, the shares (or any class thereof) of capital stock (including
common stock and preferred stock), limited liability company interests,
partnership interests and any other equity, ownership, or profits interests of
such Person (in each case whether or not arising under or in connection with any
employment agreement).

“Exchange Act” means the Securities Exchange Act of 1934, as amended and
including any rule or regulation promulgated thereunder.

“Execution Date” has the meaning set forth in the preamble to this Agreement.

“Exit Facilities Documents” means the documents governing the exit financing
facilities described in the Chapter 11 Term Sheet.

“Final DIP Order” means a final order of the Bankruptcy Court approving the DIP
Motion.

“First Day Pleadings” means the first-day pleadings that the Company Parties
determine are necessary or desirable to file with the Bankruptcy Court.

“Governmental Entity” means any applicable federal, state, local or foreign
government or any agency, bureau, board, commission, court or arbitral body,
department, political subdivision, regulatory or administrative authority,
tribunal or other instrumentality thereof, or any self-regulatory organization.

“Holdings” has the meaning set forth in the preamble of this Agreement.

“In-Court Release” means, in the event of the In-Court Restructuring, mutual
releases by the Parties to be included in the Plan, which shall be consistent
with the release provisions set forth in Exhibit D.

“In-Court Restructuring” has the meaning set forth in the recitals to this
Agreement.

“In-Court Restructuring Outside Date” has the meaning set forth in Section 4 to
this Agreement.

 

5

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“Independent Director” has the meaning set forth in Section 8.01(l).

“Interim DIP Order” means an interim order of the Bankruptcy Court approving the
DIP Motion.

“J.Jill” has the meaning set forth in the preamble of this Agreement.

“Joinder” means an executed form of the joinder providing, among other things,
that such Person signatory thereto is bound by the terms of this Agreement and
substantially in the form attached hereto as Exhibit C.

“Law” means any federal, state, local, or foreign law (including common law),
statute, code, ordinance, rule, regulation, decree, injunction, order, ruling,
assessment, writ or other legal requirement, or judgment, in each case, that is
validly adopted, promulgated, issued, or entered by a governmental authority of
competent jurisdiction (including the Bankruptcy Court).

“Material Adverse Effect” means, other than the filing of the Chapter 11 Cases
or as a direct result of the impact of the COVID-19 pandemic, any event, change,
effect, occurrence, development, circumstance, condition, result, state of fact
or change of fact, or the worsening of any of the foregoing (each, an “Event”)
since the Execution Date, that, individually or together with all other Events,
has had, or would reasonably be expected to have, a material adverse effect on
either (a) the business, operations, finances, properties, interests, reserves,
condition (financial or otherwise), assets, or liabilities of the Company
Parties, taken as a whole, or (b) the ability of the Company Parties, taken as a
whole, to perform their respective obligations under, or to consummate the
transactions contemplated by, this Agreement.

“Material Contract” means any of the following contracts or agreements to which
any of the Company Parties is a party or by which any of the Company Parties or
any of their respective assets or properties are bound: (a) any contract or
agreement pursuant to which any of the Company Parties leases, subleases or
otherwise occupies any real property or in which any of the Company Parties has
been granted a possessory interest or right to use or occupy any real property;
(b) any contract or agreement that restricts or will restrict any of the Company
Parties from freely engaging in any business in any manner or competing
anywhere; (c) any contract or agreement that is a joint venture agreement, data
license agreement, or any contract or agreement pursuant to which any Person has
a right to acquire any Company Party’s interests in real property; (d) any
contract or agreement between any Company Party, on the one hand, and any
Related Party, on the other hand; (e) any contract or agreement that is a
“material contract,” or “plans of acquisition, reorganization, arrangement,
liquidation or succession” (as each such term is defined in Item 601(b)(2) or
Item 601(b)(10) of Regulation S-K under the Exchange Act); (f) any Swap
Obligation (as defined in the Term Loan Agreement); or (g) any contract or
agreement that may reasonably be expected to result in aggregate payments by the
applicable Company Party or any other party thereto, or revenues to the
applicable Company Party or any other party thereto, in either case greater than
or equal to $1,000,000 during the current or any subsequent calendar year.

“Milestones” has the meaning set forth in Section 4 to this Agreement.

 

6

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“New Organizational Documents” means the new Organizational Documents of the
Debtors after giving effect to the In-Court Restructuring, including any
shareholders agreement, registration agreement or similar document.

“New Term Loans” has the meaning set forth in the Out-of-Court Term Sheet.

“No Recourse Party” has the meaning set forth in Section 15.24.

“Organizational Documents” means, with respect to any Person other than a
natural person, the documents by which such Person was organized or formed (such
as a certificate of incorporation, certificate of formation, certificate of
limited partnership or articles of organization, and including, without
limitation, any certificates of designation for preferred stock or other forms
of preferred equity) or which relate to the internal governance of such Person
(such as by-laws, a partnership agreement or an operating, limited liability
company or members agreement).

“Out-of-Court Release” means, in the event of the Out-of-Court Restructuring,
customary mutual releases by and for the benefit of each of the Parties.

“Out-of-Court Restructuring” has the meaning set forth in the recitals to this
Agreement.

“Out-of-Court Restructuring Effective Date” means the effective date of the
Out-of-Court Restructuring.

“Out-of-Court Restructuring Outside Date” means September 30, 2020, as may be
extended by the Required Parties by mutual agreement in writing pursuant to the
terms of this Agreement.

“Out-of-Court Restructuring Period” means the period commencing on the Execution
Date through the Out-of-Court Toggle Date.

“Out-of-Court Term Sheet” has the meaning set forth in the recitals to this
Agreement.

“Out-of-Court Toggle Date” means September 11, 2020, as may be extended by the
Required Parties by mutual agreement in writing pursuant to the terms of this
Agreement; provided, however, that in the event that the Consenting Shareholders
terminate this Agreement as to such Consenting Shareholders under Section 13.03,
the “Out-of-Court Toggle Date” shall be deemed to occur within two (2) Business
Days of such termination unless otherwise determined by the Required Consenting
Lenders in their sole discretion.

“Parties” has the meaning set forth in the preamble to this Agreement.

“Permits” means any license, permit, registration, authorization, approval,
certificate of authority, accreditation, qualification, or similar document or
authority that has been issued or granted by any Governmental Entity.

“Permitted Transferee” means each transferee of any Company Claims/Interests who
meets the requirements of Section 10.01.

 

7

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“Person” means an individual, a partnership, a joint venture, a limited
liability company, a corporation, a trust, an unincorporated organization, a
group, a Governmental Entity, or any legal entity or association.

“Petition Date” means the first date any of the Company Parties commences a
Chapter 11 Case.

“Plan” has the meaning set forth in the recitals to this Agreement.

“Plan Effective Date” means the occurrence of the effective date of the Plan
according to its terms.

“Plan Supplement” means the compilation of documents and forms and/or term
sheets of documents, schedules, and exhibits to the Plan that will be filed by
the Debtors with the Bankruptcy Court, including the New Organizational
Documents and the Exit Facilities Documents.

“Qualified Marketmaker” means an entity that (a) holds itself out to the public
or the applicable private markets as standing ready in the ordinary course of
business to purchase from customers and sell to customers Company
Claims/Interests (or enter with customers into long and short positions in
Company Claims/Interests), in its capacity as a dealer or market maker in
Company Claims/Interests and (b) is, in fact, regularly in the business of
making a market in claims against issuers or borrowers (including debt
securities or other debt).

“Related Party” means (a) any current or former officer, employee, equityholder,
or member of the board of directors (or other governing body) of any Company
Party, (b) any immediate family member of any Person described in clause
(a) above, and (c) any Affiliate of any Person described in clause (a) or clause
(b) above.

“Required Consenting Lenders” means, as of any time of determination, Consenting
Lenders holding at least 50.01% of the aggregate outstanding principal amount of
Term Loans that are held by all Consenting Lenders.

“Required Consenting Stakeholders” means, as of any time of determination, each
of (a) the Required Consenting Lenders and (b) the Consenting Shareholders.

“Required Parties” means the Company Parties and the Required Consenting
Lenders; provided that, to the extent any approvals, consents, waivers or other
decisions relate to either (a) the Definitive Documents for the Out-of-Court
Transaction or (b) the Consenting Shareholders’ In-Court Consent Right,
“Required Parties” shall also include the Consenting Shareholders.

“Restructuring Transactions” has the meaning set forth in the recitals to this
Agreement.

“Securities Act” means the Securities Act of 1933, as amended.

“Solicitation Materials” means all documents, forms and other materials provided
in connection with the solicitation of votes on the Plan pursuant to sections
1125 and 1126 of the Bankruptcy Code.

 

8

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“Term Loan” has the meaning set forth in the Term Loan Agreement.

“Term Loan Forbearance Agreement” means the First Amended and Restated
Forbearance Agreement, dated as of July 15, 2020, by and among J.Jill, certain
Lenders party thereto and the other parties thereto, as amended, restated,
amended and restated, supplemented or otherwise modified from time to time.

“Term Loan Agent” means any administrative agent, collateral agent, or similar
Entity under the Term Loan Agreement, including any successors thereto.

“Term Loan Agreement” means that certain Term Loan Credit Agreement dated as of
May 8, 2015, by and among J.Jill, Holdings, Jefferies Finance LLC, as Term Loan
Agent, and the lenders and other parties thereto from time to time (as amended
by that certain Amendment No. 1 to Term Loan Credit Agreement, dated as of
May 27, 2016, and as further amended, modified, and supplemented from time to
time in accordance with the terms thereof).

“Term Loan Claim” means any Claim arising under, in connection with, or related
to the Term Loan Agreement or any of the other Credit Documents.

“Termination Date” means the date on which this Agreement is terminated in
accordance with Section 13.

“TowerBrook” has the meaning set forth in the preamble to this Agreement.

“Transaction Expenses” means all reasonable fees, costs and expenses of the
Consenting Stakeholders’ Advisors incurred in connection with the negotiation,
formulation, preparation, execution, delivery, implementation, consummation,
and/or enforcement of this Agreement and/or any of the other Definitive
Documents, and/or the transactions contemplated hereby or thereby, and/or any
amendments, waivers, consents, supplements, or other modifications to any of the
foregoing; provided that such reasonable fees, costs and expenses of the
Consenting Shareholders’ Advisors shall not be considered “Transaction Expenses”
to the extent that (a) the Consenting Lenders terminate this Agreement (due to a
breach by the Consenting Shareholders) pursuant to Section 13.01(a), (b) the
Company Parties terminate this Agreement pursuant to Section 13.02(a) or (c) the
Consenting Shareholders terminate this Agreement for any reason pursuant to
Section 13.03; provided, further, that the fees, costs and expenses of the
Consenting Shareholders’ Advisors shall not exceed (a) $4,250,000 in connection
with the Out-of-Court Restructuring, and (b) $2,500,000 in connection with the
In-Court Restructuring.

“Transfer” means to sell, resell, reallocate, use, pledge, assign, transfer,
loan, grant, hypothecate, participate, donate, or otherwise encumber or dispose
of, directly or indirectly (including through derivatives, options, swaps,
pledges, forward sales, or other transactions).

1.02. Interpretation. For purposes of this Agreement:

(a) in the appropriate context, each term, whether stated in the singular or the
plural, shall include both the singular and the plural, and pronouns stated in
the masculine, feminine, or neuter gender shall include the masculine, feminine,
and the neuter gender;

 

9

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(b) capitalized terms defined only in the plural or singular form shall
nonetheless have their defined meanings when used in the opposite form;

(c) unless otherwise specified, any reference herein to a contract, lease,
instrument, release, indenture, or other agreement or document being in a
particular form or on particular terms and conditions means that such document
shall be substantially in such form or substantially on such terms and
conditions;

(d) unless otherwise specified, any reference herein to an existing document,
schedule, or exhibit shall mean such document, schedule, or exhibit, as it may
have been or may be amended, restated, supplemented, or otherwise modified from
time to time; provided that any capitalized terms herein which are defined with
reference to another agreement, are defined with reference to such other
agreement as of the date of this Agreement, without giving effect to any
termination of such other agreement or amendments to such capitalized terms in
any such other agreement following the date hereof;

(e) unless otherwise specified, all references herein to “Sections” are
references to Sections of this Agreement;

(f) the words “herein,” “hereof,” and “hereto” refer to this Agreement in its
entirety rather than to any particular portion of this Agreement;

(g) captions and headings to Sections are inserted for convenience of reference
only and are not intended to be a part of or to affect the interpretation of
this Agreement;

(h) references to “shareholders,” “directors,” and/or “officers” shall also
include “members” and/or “managers,” as applicable, as such terms are defined
under the applicable limited liability company Laws;

(i) the use of “include” or “including” is without limitation, whether stated or
not; and

(j) (A) the phrase “counsel to the Consenting Stakeholders” refers in this
Agreement to each counsel specified in Sections 15.10(b) and 15.10(c), (B) the
phrase “counsel to the Consenting Lenders” refers in this Agreement to counsel
specified in Section 15.10(b), and (c) the phrase “counsel to the Consenting
Shareholders” refers in this Agreement to counsel specified in Section 15.10(c).

Section 2. Effectiveness of this Agreement. This Agreement shall become
effective and binding upon each of the Parties that has executed and delivered
counterpart signature pages to this Agreement at 12:00 a.m., prevailing Eastern
Standard Time, on the Agreement Effective Date, which is the date on which all
of the following conditions have been satisfied or waived in accordance with
this Agreement:

(a) each of the Company Parties shall have executed and delivered counterpart
signature pages of this Agreement to counsel to each of the Parties specified in
Section 15.10;

 

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(b) the following shall have executed and delivered counterpart signature pages
of this Agreement to counsel to each of the Parties specified in Section 15.10:

(i) holders of at least 66.67% of the aggregate outstanding principal amount of
Term Loans; and

(ii) the Consenting Shareholders; and

(c) the Company Parties shall have paid all accrued and unpaid Transaction
Expenses to the applicable Consenting Lenders’ Advisors by wire transfer in
immediately available funds in accordance with instructions provided to the
Company Parties by the applicable Consenting Lenders’ Advisors.

Section 3. Definitive Documents.

3.01. The Definitive Documents governing the Restructuring Transactions shall
include this Agreement and all other agreements, instruments, pleadings, orders,
forms, questionnaires and other documents (including all exhibits, schedules,
supplements, appendices, annexes, instructions and attachments thereto) that are
utilized to implement or effectuate, or that otherwise relate to, the
Restructuring Transactions, including each of the following:

(a) in connection with an implementation of the Restructuring Transactions
through the Out-of-Court Restructuring:

(i) the Out-of-Court Release;

(ii) documentation necessary to consummate the Term Loan Amendment and Waiver,
including an amendment of the Existing Term Loan Agreement, as reasonably
determined by the Required Parties;

(iii) documentation necessary to consummate the Purchase Offer (as defined in
the Out-of-Court Term Sheet), as reasonably determined by the Required Parties;

(iv) documentation reasonably necessary to consummate the Priming Facility (as
defined in the Out-of-Court Term Sheet), as reasonably determined by the
Required Parties;

(v) documentation necessary to consummate the Junior Facility (as defined in the
Out-of-Court Term Sheet), as reasonably determined by the Required Parties;

(vi) the Sponsor Investment Warrants (as defined in the Out-of-Court Term
Sheet); and

(vii) the Term Loan Intercreditor Agreement, the Junior Intercreditor Agreement
and the A&R ABL Intercreditor Agreement (each as defined in the Out-of-Court
Term Sheet).

(b) in connection with a potential implementation of the Restructuring
Transactions through the In-Court Restructuring:

(i) the First Day Pleadings and all orders sought pursuant thereto;

(ii) the Plan, including the In-Court Release;

 

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(iii) the Plan Supplement;

(iv) the DIP Documents;

(v) the Exit Facilities Documents;

(vi) the New Organizational Documents, including the Shareholders Agreement, if
any;

(vii) the Disclosure Statement and any related Solicitation Materials;

(viii) the Disclosure Statement Order; and

(ix) the Confirmation Order.

3.02. Each of the Definitive Documents not executed or in a form attached to
this Agreement as of the Execution Date remains subject to negotiation and
completion. Upon completion, the Definitive Documents and every other document,
deed, agreement, filing, notification, letter or instrument related to the
Restructuring Transactions shall each contain terms, conditions,
representations, warranties, and covenants consistent with the terms of this
Agreement, including, for the avoidance of doubt, the Out-of-Court Term Sheet
and the Chapter 11 Term Sheet, as they may be modified, amended, or supplemented
in accordance with Section 14. Further, the Definitive Documents not executed or
in a form attached to this Agreement as of the Execution Date shall otherwise
each be in form and substance reasonably acceptable to the Required Consenting
Lenders and the Company Parties; provided, that the Definitive Documents in
connection with the Out-of-Court Restructuring shall also be reasonably
acceptable to the Consenting Shareholders; provided, further, that (a) the
In-Court Release and (b) any other term of the Definitive Documents in
connection with the In-Court Restructuring, but solely to the extent that such
term materially and adversely impacts the treatment of the Consenting
Shareholders shall also be reasonably acceptable to the Consenting Shareholders
(subsections (a) and (b) of the foregoing, collectively, the “Consenting
Shareholders’ In-Court Consent Right”).

Section 4. Milestones. On and after the Agreement Effective Date, the Parties
shall implement the Restructuring Transactions in accordance with the following
milestones (the “Milestones”), unless extended or waived in writing (which may
be by electronic mail) by the Company Parties, the Required Consenting Lenders
and, solely with respect to subsections (a), (b)(i), and (b)(vi) below (the
“Sponsor Milestones”), the Consenting Shareholders, each in their sole
discretion:

(a) To the extent the Restructuring Transactions are to be implemented on an
out-of-court basis through the Out-of-Court Restructuring, cause the
Out-of-Court Restructuring Effective Date to occur no later than the
Out-of-Court Restructuring Outside Date.

(b) If the Consent Threshold has not been satisfied (as mutually determined by
the Required Parties), extended or waived by the Required Parties on or prior to
the Out-of-Court Toggle Date, the Restructuring Transactions shall be
implemented on an in-court basis through the In-Court Restructuring and the
Company Parties shall comply with each of the following milestones:

(i) no later than fourteen (14) days after the Out-of-Court Toggle Date, to the
extent the Consent Threshold has not been obtained or (ii) the Out-of-Court
Restructuring Outside Date if the Out-of-Court Restructuring Effective Date has
not occurred, commence solicitation of the Plan;

 

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(ii) no later than the date which is the later of (A) September 25, 2020 or
(B) fourteen (14) days after commencement of the solicitation of the Plan, the
Company Parties shall conclude the solicitation of the Plan;

(iii) no later than the date which is the later of (A) October 3, 2020 or
(B) one (1) Business Day after concluding the solicitation of the Plan, the
Petition Date shall have occurred (and, for the avoidance of doubt, on such
Petition Date, the Company Parties shall have filed with the Bankruptcy Court
the Plan, the Disclosure Statement and other Solicitation Materials, and a
motion scheduling a combined hearing on the Plan and Disclosure Statement and
other Solicitation Materials);

(iv) within five (5) Business Days after the Petition Date, the Company Parties
shall have filed with the Bankruptcy Court the Plan Supplement;

(v) within fourteen (14) days after the Petition Date, the Confirmation Order
and all other related relief required to be obtained from the Bankruptcy Court
to implement the Restructuring Transactions through the In-Court Restructuring
shall have been entered and/or granted, as applicable, by the Bankruptcy Court;
and

(vi) the Plan Effective Date shall have occurred within thirty (30) calendar
days after the Petition Date (the “In-Court Restructuring Outside Date”).

Section 5. Commitments of the Consenting Lenders.

5.01. General Commitments, Forbearances, and Waivers.

(a) During the Agreement Effective Period, each Consenting Lender agrees,
severally, and not jointly, in respect of all of its Company Claims/Interests,
to:

(i) (A) use commercially reasonable efforts and timely take all reasonable
actions necessary to support, implement and consummate the
Out-of-Court-Restructuring, and (B) to the extent the Consent Threshold has not
been obtained by the Out-of-Court Toggle Date or the other conditions of the
Out-of-Court Restructuring have not been satisfied so as to permit consummation
of the Out-of-Court Restructuring prior to the Out-of-Court Restructuring
Outside Date, timely take all reasonable actions necessary to support, implement
and consummate the In-Court Restructuring, including (as applicable) (1) consent
to the amendments to the Term Loan Agreement and participate in the exchange of
the existing Term Loans into the New Term Loans, and (2) vote all Company
Claims/Interests owned or held by such Consenting Lender and exercise any powers
or rights available to it (including in any board, shareholders’, or creditors’
meeting or in any process requiring voting or approval to which they are legally
entitled to participate), in each case in favor of any matter requiring approval
to the extent necessary to implement the Restructuring Transactions; provided
that no Consenting Lender shall be obligated to waive (to the extent waivable by
such Consenting Lender) any condition to the consummation of any part of the
Restructuring Transactions set forth in any Definitive Document;

 

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(ii) use commercially reasonable efforts to cooperate with and assist the
Company Parties in obtaining additional support for the Restructuring
Transactions from the Company Parties’ other stakeholders;

(iii) use commercially reasonable efforts to oppose any Person from taking any
actions contemplated in Section 5.02(b);

(iv) give any notice, order, instruction, or direction to the applicable Term
Loan Agent necessary to give effect to the Restructuring Transactions; provided,
that such Consenting Lender shall not be required to provide such Term Loan
Agent or any other Person with any indemnities or similar undertakings in
connection with taking any such action; and

(v) negotiate in good faith and use commercially reasonable efforts to execute,
deliver, perform its obligations under, implement, and consummate the
transactions contemplated by the Definitive Documents that are consistent with
this Agreement to which it is required to be a party.

(b) During the Agreement Effective Period, each Consenting Lender agrees,
severally, and not jointly, in respect of all of its Company Claims/Interests,
that it shall not directly or indirectly:

(i) object to, delay, impede, or take any other action to interfere with
acceptance, implementation, or consummation of the Restructuring Transactions;

(ii) propose, file, support or vote for any Alternative Restructuring;

(iii) file any motion, pleading, or other document with the Bankruptcy Court or
any other court (including any modifications or amendments thereof) that, in
whole or in part, is not materially consistent with this Agreement or the Plan;

(iv) initiate, or have initiated on its behalf, any litigation or proceeding of
any kind with respect to the Chapter 11 Cases, this Agreement, or the other
Restructuring Transactions contemplated herein against the Company Parties or
the other Parties other than to enforce this Agreement or any Definitive
Document or as otherwise permitted under this Agreement;

(v) exercise, or direct any other Person to exercise, any right or remedy for
the enforcement, collection, or recovery of any Claims against or Interests in
the Company Parties; or

(vi) object to, delay, impede, or take any other action to interfere with the
Company Parties’ ownership and possession of their assets, wherever located, or
interfere with the automatic stay arising under section 362 of the Bankruptcy
Code.

 

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5.02. Commitments with Respect to Chapter 11 Cases

(a) During the Agreement Effective Period, each Consenting Lender agrees that it
shall, severally and not jointly, subject to receipt by such Consenting Lender,
whether before or after the commencement of the Chapter 11 Cases, of the
Solicitation Materials:

(i) vote each of its Company Claims/Interests to accept the Plan by delivering
its duly executed and completed ballot accepting the Plan on a timely basis
following the commencement of the solicitation of the Plan and its actual
receipt of the Solicitation Materials and the ballot;

(ii) to the extent it is permitted to elect whether to opt out of the releases
set forth in the Plan, elect not to opt out of the releases set forth in the
Plan by timely delivering its duly executed and completed ballot(s) indicating
such election; and

(iii) not change, withdraw, amend, or revoke (or cause to be changed, withdrawn,
amended, or revoked) any vote or election referred to in clauses (i) and (ii)
above; provided, however, that such vote or election may be changed, withdrawn,
amended or revoked (and, upon such change, withdrawal, amendment or revocation,
deemed void ab initio) by such Consenting Lender at any time following the
expiration or termination of the Agreement Effective Period with respect to such
Consenting Lender (it being understood that any termination of the Agreement
Effective Period with respect to a Consenting Lender shall entitle such
Consenting Lender to change its vote in accordance with section 1127(d) of the
Bankruptcy Code, and the Solicitation Materials with respect to the Plan shall
be consistent with this proviso).

(b) During the Agreement Effective Period, each Consenting Lender, in respect of
each of its Company Claims/Interests, will support, and will not directly or
indirectly object to, delay, impede, or take any other action to interfere with
any motion or other pleading or document filed by a Company Party in the
Bankruptcy Court that is consistent with this Agreement.

Section 6. Commitments of the Consenting Shareholders.

(a) During the Agreement Effective Period, the Consenting Shareholders agree, in
respect of all of its Company Claims/Interests, to:

(i) (A) use commercially reasonable efforts and timely take all reasonable
actions necessary to support, implement and consummate the
Out-of-Court-Restructuring, and (B) to the extent the Consent Threshold has not
been obtained by the Out-of-Court Toggle Date or the other conditions of the
Out-of-Court Restructuring have not been satisfied so as to permit consummation
of the Out-of-Court Restructuring prior to the Out-of-Court Restructuring
Outside Date, timely take all reasonable actions necessary to support, implement
and consummate the In-Court Restructuring, including vote all Company
Claims/Interests owned or held by the Consenting Shareholders and exercise any
powers or rights available to it (including in any shareholders’ meeting or in
any process requiring voting or approval to which they are legally entitled to
participate), in each case in favor of any matter requiring approval to the
extent necessary to implement the Restructuring Transactions; provided that the
Consenting Shareholders shall not be obligated to waive any condition to the
consummation of any part of the Restructuring Transactions set forth in any
Definitive Document; and

 

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(ii) negotiate in good faith and use commercially reasonable efforts to execute,
deliver, perform its obligations under, and consummate the transactions
contemplated by the Definitive Documents to the extent applicable to the
Consenting Shareholders.

(b) During the Agreement Effective Period, the Consenting Shareholders agree, in
respect of their Company Claims/Interests, that they shall not directly or
indirectly:

(i) object to, delay, impede, or take any other action to interfere with
acceptance, implementation, or consummation of the Restructuring Transactions;

(ii) except as expressly provided in this Agreement, propose, file, support or
vote for any Alternative Restructuring;

(iii) file any motion, pleading, or other document with the Bankruptcy Court or
any other court (including any modifications or amendments thereof) that, in
whole or in part, is not consistent in all material respects with this Agreement
or the Plan;

(iv) initiate, or have initiated on its behalf, any litigation or proceeding of
any kind with respect to the Chapter 11 Cases, this Agreement, or the other
Restructuring Transactions contemplated herein against the Company Parties or
the other Parties other than to enforce this Agreement or any Definitive
Document or as otherwise permitted under this Agreement;

(v) exercise, or direct any other Person to exercise, any right or remedy for
the enforcement, collection, or recovery of any Claims against or Interests in
the Company Parties; or

(vi) object to, delay, impede, or take any other action to interfere with the
Company Parties’ ownership and possession of their assets, wherever located, or
interfere with the automatic stay arising under section 362 of the Bankruptcy
Code.

Section 7. Additional Provisions Regarding the Consenting Stakeholders’
Commitments. Notwithstanding anything contained in this Agreement, nothing in
this Agreement shall: (a) affect the ability of any Consenting Stakeholder to
consult with any other Consenting Stakeholder, the Company Parties, or any other
party in interest in the Chapter 11 Cases (including any official committee and
the United States Trustee); (b) impair or waive the rights of any Consenting
Stakeholder to assert or raise any objection permitted under this Agreement in
connection with the Restructuring Transactions; (c) prevent any Consenting
Stakeholder from enforcing this Agreement or contesting whether any matter,
fact, or thing is a breach of, or is inconsistent with, this Agreement;
(d) limit the rights of a Consenting Stakeholder under the Chapter 11 Cases,
including appearing as a party in interest in any matter to be adjudicated in
order to be heard concerning any matter arising in the Chapter 11 Cases, in each
case, so long as the exercise of any such right is not inconsistent with such
Consenting Stakeholder’s obligations hereunder; (e) limit the ability of a
Consenting Stakeholder to purchase, sell or enter into any transactions
regarding the Company Claims/Interests, subject to the terms hereof (including,
for the avoidance of doubt, Section 10), and any applicable agreements governing
such Company Claims/Interests; (f) constitute a waiver or amendment of any term
or provision of the Term Loan Agreement or any of the other Credit Documents;
(g) constitute a termination or release of any liens on, or security interests
in, any of the assets or properties of the Company Parties that secure the
obligations under the Term Loan Agreement or any of the other Credit Documents;
or (h) require any Consenting

 

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Stakeholder to incur, assume, become liable in respect of or suffer to exist any
expenses, liabilities, or other obligations, or agree to or become bound by any
commitments, undertakings, concessions, indemnities, or other arrangements that
could result in expenses, liabilities, or other obligations to such Consenting
Stakeholder (except, in the case of any Consenting Lender that is a lender under
the DIP Facility or any Exit Facility, such Consenting Lender’s commitments
under such DIP Facility or Exit Facility, respectively).

Section 8. Commitments of the Company Parties.

8.01. Affirmative Commitments. Except as set forth in this Section 8, during the
Agreement Effective Period, the Company Parties agree to:

(a) (i) use commercially reasonable efforts to support, act in good faith, and
take all reasonable actions necessary, or reasonably requested by the applicable
Required Consenting Stakeholders, to implement and consummate the Restructuring
Transactions through the Out-of-Court Restructuring within the Out-of-Court
Restructuring Period as contemplated by this Agreement and the Out-of-Court Term
Sheet (including using commercially reasonable efforts to satisfy the conditions
to the Out-of-Court Restructuring); (ii) to the extent the Consent Threshold has
not been obtained by the Out-of-Court Toggle Date, or the other conditions of
the Out-of-Court Restructuring have not been satisfied so as to permit
consummation of the Out-of-Court Restructuring prior to the Out-of-Court
Restructuring Outside Date (as determined in good faith by the Company and the
Required Consenting Stakeholders), timely take all reasonable actions necessary
to support, implement and consummate the Restructuring Transactions through the
In-Court Restructuring, including promptly commencing solicitation on the Plan
pursuant to the Disclosure Statement and related Solicitation Materials and
thereafter commencing Chapter 11 Cases in order to implement the Plan; and
(iii) in the event the Chapter 11 Cases are commenced, obtaining the Bankruptcy
Court’s approval of the Definitive Documents (as applicable), the solicitation
on the Plan by means of the Disclosure Statement and related Solicitation
Materials, confirmation of the Plan, and the consummation of the Restructuring
Transactions pursuant to the Plan;

(b) to the extent any legal or structural impediment arises that would prevent,
hinder, or delay the consummation of the Restructuring Transactions contemplated
herein, take all steps reasonably necessary or requested by the Required
Consenting Lenders to address any such impediment, including, if the
Restructuring Transactions are implemented through the In-Court Restructuring:
(i) timely filing a formal objection to any motion filed with the Bankruptcy
Court by any Person seeking the entry of an order (A) directing the appointment
of an examiner with expanded powers or a trustee, (B) converting any of the
Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code,
(C) dismissing the Chapter 11 Cases, (D) approving an Alternative Restructuring,
or (E) for relief that (x) is inconsistent with this Agreement in any material
respect, or (y) would, or would reasonably be expected to, frustrate the
purposes of this Agreement, including by preventing the consummation of the
Restructuring Transactions; (ii) timely filing a formal objection to any motion
filed with the Bankruptcy Court by any Person seeking the entry of an order
modifying or terminating any Debtor’s exclusive right to file and/or solicit
acceptances of a plan of reorganization; (iii) timely filing a formal objection
to any motion, application or proceeding challenging (A) the amount, validity,
allowance, character, enforceability, or priority of any Company
Claims/Interests of any of the Consenting Lenders, or (B) the validity,

 

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enforceability or perfection of any lien or other encumbrance securing any
Company Claims/Interests of any of the Consenting Lenders; (iv) timely filing a
formal objection to any motion, application, or proceeding filed with the
Bankruptcy Court seeking standing to pursue claims or causes of action of the
Debtors against any Consenting Stakeholder or any director, manager, officer or
employee of, or lender to, or any consultant or advisor that is retained or
engaged by, any of the Consenting Stakeholders; and (v) timely filing a formal
written response in opposition to any objection filed with the Bankruptcy Court
by any Person with respect to the DIP Facility (or motion filed by such Person
that seeks to interfere with the DIP Facility) or any proposed adequate
protection to the Consenting Lenders pursuant to the Interim DIP Order, the
Final DIP Order, or otherwise;

(c) use commercially reasonable efforts to obtain any and all Permits, Consents,
and third-party approvals that are necessary and/or advisable for the
implementation or consummation of any part of the Restructuring Transactions;

(d) negotiate in good faith and use commercially reasonable efforts to execute,
deliver, perform their obligations under, and consummate the transactions
contemplated by this Agreement; the Definitive Documents, and any other required
agreements to effectuate;

(e) use commercially reasonable efforts to seek additional support for the
Restructuring Transactions from their other material stakeholders;

(f) (i) complete the preparation, (A) as soon as practicable after the Agreement
Effective Date, of each of the Definitive Documents necessary to implement the
Out-of-Court Restructuring under Section 3.01(a) and (B) as soon as practicable
after the Out-of-Court Toggle Date, of each of the Definitive Documents
necessary to implement the Chapter 11 Cases under Section 3.01(b) (including all
motions, applications, orders, agreements, and other documents, each of which,
for the avoidance of doubt, shall contain terms and conditions consistent in all
material respects with this Agreement and shall otherwise be in form and
substance reasonably acceptable to the Required Consenting Lenders and, solely
to the extent of the Consenting Shareholders’ In-Court Consent Right, the
Consenting Shareholders), (ii) provide each of the Definitive Documents to, and
afford reasonable opportunity for comment and review of each of the Definitive
Documents by, counsel to the applicable Consenting Stakeholders no less than
three (3) Business Days in advance of any filing, execution, distribution, or
use (as applicable) thereof, and (iii) consult in good faith with the Consenting
Lenders’ Advisors and, solely to the extent applicable in connection with the
Consenting Shareholders’ In-Court Consent Right, the Consenting Shareholders’
Advisors regarding the form and substance of the applicable Definitive Documents
in advance of the filing, execution, distribution or use (as applicable)
thereof; provided, however, that the obligations under this Section 8.01(f)
shall in no way alter or diminish any right expressly provided to any applicable
Consenting Stakeholder under this Agreement to review, comment on, and/or
consent to the form and/or substance of any document or agreement;

(g) promptly notify counsel to the Consenting Lenders and the Consenting
Shareholders in writing (and in any event within one (1) Business Day after
obtaining knowledge thereof) of (i) the initiation, institution, or commencement
of any proceeding by a Governmental Entity or other Person (or communications
indicating that the same may be contemplated or threatened) (A) involving any of
the Company Parties (including any assets, Permits, businesses,

 

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operations, or activities of any of the Company Parties) or any of their
respective current or former officers, employees, managers, directors, members,
or equity holders (in their capacities as such), or (B) challenging the validity
of the transactions contemplated by this Agreement or any other Definitive
Document or seeking to enjoin, restrain, or prohibit this Agreement or any other
Definitive Document or the consummation of the transactions contemplated hereby
or thereby, (ii) any breach by any of the Company Parties in any respect of any
of its obligations, representations, warranties, or covenants set forth in this
Agreement, (iii) any Material Adverse Effect, (iv) the happening or existence of
any event that shall have made any of the conditions precedent to any Party’s
obligations set forth in (or to be set forth in) any of the Definitive Documents
incapable of being satisfied prior to the applicable Milestones set forth
herein, (v) the occurrence of a Termination Event, and/or (vi) the receipt of
notice from any Governmental Entity or other Person alleging that the consent of
such Person is or may be required under any Organizational Document, contract,
Permit, Law or otherwise in connection with the consummation of any part of the
Restructuring Transactions;

(h) maintain the good standing and legal existence of each Company Party under
the Laws of the state in which it is incorporated, organized or formed, except
to the extent the Restructuring Transactions are to be implemented through the
In-Court Restructuring and any failure to maintain such Company Party’s good
standing arises solely as a result of the filing of the Chapter 11 Cases;

(i) notify counsel to the Consenting Lenders and the Consenting Shareholders of
the receipt of any Alternative Restructuring Proposal by any Company Party,
within one (1) Business Day after such receipt, with such notice to include the
material terms of such Alternative Restructuring Proposal (including the
identity of the Person(s) involved);

(j) provide the Consenting Lenders’ Advisors such information as reasonably
necessary to evaluate each of the Debtors’ executory contracts and unexpired
leases, and all ongoing discussions and negotiations related thereto, and assume
or reject each executory contract (including any employment agreement or
employee benefit plan) and unexpired lease in consultation with the Required
Consenting Lenders;

(k) (i) conduct their businesses and operations only in the ordinary course in a
manner that is consistent with past practices and in compliance with Law;
provided, however, that if any Company Party reasonably determines in good faith
that the operation of its business in the ordinary course is not advisable due
to possible health and safety concerns related to COVID-19, such determination
and any actions taken or not taken as a result of such determination that are
outside the ordinary course of its business and inconsistent with its past
practices shall not be a breach of this Section 8.01(k) (but such Company Party
shall promptly inform the Consenting Lender Advisors of any such determination),
(ii) maintain their physical assets, equipment, properties and facilities in
their condition and repair as of the Agreement Effective Date, ordinary wear and
tear excepted, (iii) maintain their respective books and records on a basis
consistent with prior practice, (iv) maintain all insurance policies, or
suitable replacements therefor, in full force and effect, (v) maintain all of
their respective Permits in full force and effect (including by filing all
reports, notifications and filings with, and paying all fees to, the applicable
Governmental Entities necessary to maintain all such Permits in full force and
effect) and take all action to avoid or eliminate any event, circumstance,
event, or occurrence that results, or would reasonably be

 

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expected to result, in the lapse, expiration, termination, revocation,
suspension or modification of any such Permits or the imposition of any fine,
penalty, or other sanctions in connection therewith, (vi) comply with, perform
all of their respective material obligations under, and maintain in full force
and effect, each Material Contract [*****] (and taking into account the impact
of the COVID-19 pandemic), and (vii) use reasonable best efforts to preserve
intact their business organizations and relationships with third parties
(including creditors, lessors, licensors, physicians, suppliers, distributors
and customers) and employees (and taking into account the impact of the COVID-19
pandemic);

(l) no later than two (2) Business Days following the Out-of-Court Toggle Date,
provided that the necessary consents for the Out-of-Court Restructuring have not
been obtained or have been waived, the board of directors of Holdings shall form
a restructuring committee with the exclusive responsibility to, among other
things, review, evaluate and implement the strategic alternatives, including the
Restructuring Transactions. The restructuring committee shall consist of three
(3) Independent Directors (defined below) who shall be appointed to the
Restructuring Committee by the board of directors, and reasonably acceptable to
the Required Consenting Lenders. “Independent Director” shall be defined as a
natural person who is a member of the board of directors and, for the five-year
period prior to his or her appointment as Independent Director has not been, and
during the continuation of his or her service as Independent Director is not
(i) an employee, director, stockholder, partner, officer attorney or counsel of
TowerBrook or any of its Affiliates (other than his or her service as an
independent member of a board or other similar capacity); (ii) a customer,
supplier or other Person who derives any of its purchases or revenues from its
activities with Towerbrook or any of its Affiliates; (iii) a Person controlling
or under common control with any other such Person described above, or (iv) any
member of the immediate family of a Person described in subclauses (i), (ii) or
(iii); and

(m) provide the Consenting Stakeholders’ Advisors, and other representatives
with (i) reasonable access to (and the right to examine and make copies of),
during regular business hours, (A) the books, work papers, records, and
materials of any Company Party, and (B) the personnel and advisors of any
Company Party (and such Company Party shall cause such personnel and advisors to
cooperate and work in good faith with such Consenting Stakeholders’ Advisors,
and other representatives), in each case, as reasonably requested by such
Consenting Stakeholders’ Advisors, or other representatives for purposes of the
Consenting Lenders’ or Consenting Shareholders’ due diligence investigation in
respect of the assets, liabilities, operations, businesses, finances,
strategies, prospects, and affairs, and (ii) reasonably timely responses to all
diligence requests provided by the Consenting Stakeholders’ Advisors or other
representatives to the Company Parties of their advisors.

8.02. Negative Commitments. Except as set forth in Section 9, and except
pursuant to the consummation of the Restructuring Transactions, during the
Agreement Effective Period, each of the Company Parties shall not, without the
prior written consent of the Required Consenting Stakeholders, directly or
indirectly:

(a) object to, delay, impede, or take any other action to interfere with
acceptance, implementation, or consummation of the Restructuring Transactions;

 

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(b) take any action that is inconsistent in any material respect with, or is
intended to frustrate or impede approval, implementation, and consummation of,
the Restructuring Transactions;

(c) (i) execute or file any agreement, instrument, pleading, order, form, or
other document that is utilized to implement or effectuate, or that otherwise
relates to, this Agreement, the Plan, and/or the Restructuring Transactions
that, in whole or in part, is not consistent in all material respects with this
Agreement, the Out-of-Court Term Sheet, or the Chapter 11 Term Sheet, as
applicable, or otherwise in form and substance reasonably acceptable to the
Required Consenting Stakeholders, subject to the Consenting Shareholders’
In-Court Consent Right, and (ii) waive, amend, or modify any of the Definitive
Documents, or file a pleading seeking to waive, amend, or modify any term or
condition of any of the Definitive Documents, which waiver, amendment,
modification, or filing contains any provision that is not consistent in all
material respects with this Agreement, the Out-of-Court Term Sheet, or the
Chapter 11 Term Sheet, as applicable, or otherwise reasonably acceptable to the
Required Consenting Stakeholders, subject to the Consenting Shareholders’
In-Court Consent Right;

(d) to the extent the Restructuring Transactions are to be implemented through
the In-Court Restructuring, move for an order from the Bankruptcy Court
authorizing or directing the assumption or rejection of any executory contract
(including any employment agreement or employee benefit plan) or unexpired
lease, other than any assumption or rejection that (i) is done with the advance
written consent of the Required Consenting Lenders, or (ii) is expressly
contemplated by the Plan;

(e) (i) seek discovery in connection with, prepare, or commence any proceeding
or other action that challenges (A) the amount, validity, allowance, character,
enforceability, or priority of any Company Claims/Interests of any of the
Consenting Stakeholders, or (B) the validity, enforceability, or perfection of
any lien or other encumbrance securing any Company Claims/Interests of any of
the Consenting Lenders, (ii) otherwise seek to restrict any rights of any of the
Consenting Stakeholders, or (iii) support any Person in connection with any of
the acts described in clause (i) or clause (ii) of this Section 8.02(e);

(f) enter into any contract with respect to debtor-in-possession financing, cash
collateral usage, exit financing, and/or other financing arrangements, other
than as contemplated under the Chapter 11 Term Sheet;

(g) (i) enter into any contract which, if existing as of the Execution Date,
would constitute a Material Contract had it been entered into prior to the
Execution Date, (ii) amend, supplement, modify, or terminate any Material
Contract, or (iii) allow or permit any Material Contract to expire;

(h) in connection with an implementation or potential implementation of the
Restructuring Transactions through the In-Court Restructuring, assert, or
support any assertion by any Person, that, in order to act on the provisions of
Section 13, the Consenting Lenders shall be required to obtain relief from the
automatic stay from the Bankruptcy Court (and each of the Company Parties hereby
waives, to the greatest extent possible, the applicability of the automatic stay
to the giving of any notice of termination in accordance with Section 13);

 

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(i) allow or permit any of their respective Permits to lapse, expire, terminate
or be revoked, suspended or modified, or to suffer any fine, penalty or other
sanctions related to any of their respective Permits;

(j) grant or agree to grant (including pursuant to a key employee retention or
incentive plan or other similar agreement or arrangement) any additional, or any
increase in the, wages, salary, bonus, commissions, retirement benefits,
pension, severance, or other compensation or benefits (including in the form of
any vested or unvested Equity Interests of any kind or nature) of any director,
manager, officer, or employee of, or any consultant or advisor that is retained
or engaged by, any of the Company Parties, except in the ordinary course of
business;

(k) enter into, adopt or establish any new compensation or benefit plans or
arrangements (including employment agreements and any retention, success or
other bonus plans), or amend or terminate any existing compensation or benefit
plans or arrangements (including employment agreements);

(l) make or change any tax election (including, with respect to any Debtor that
is treated as a partnership or disregarded entity for U.S. federal income tax
purposes, an election to be treated as a corporation for U.S. federal income tax
purposes), file any amended tax return, enter into any closing agreement with
respect to taxes, consent to any extension or waiver of the limitations period
applicable to any tax claim or assessment, enter into any installment sale
transaction, adopt or change any accounting methods, practices, or periods for
tax purposes, make or request any tax ruling, enter into any tax sharing or
similar agreement or arrangement, or settle any tax claim or assessment;

(m) take or permit any action that would result in a (i) disaffiliation of any
Company Party from the Company Parties’ consolidated income tax group under
Section 1502 of the Code, or (ii) realization of any taxable income outside the
ordinary course of the Company Parties’ business;

(n) amend any of their respective Organizational Documents in a manner that is
materially inconsistent with this Agreement or the Plan;

(o) authorize, create, or issue any additional Equity Interests in any of the
Company Parties, or redeem, purchase, acquire, declare any distribution on, or
make any distribution on any Equity Interests in any of the Company Parties;

(p) if the Restructuring Transactions are to be implemented through the In-Court
Restructuring, pay, or agree to pay, any indebtedness, liabilities or other
obligations (including any accounts payable or trade payable) that existed prior
to the Petition Date, unless the Bankruptcy Court authorizes the Debtors to pay
such indebtedness, liabilities, or other obligations (including any accounts
payable or trade payable) pursuant to the relief granted in connection with the
First Day Pleadings;

(q) seek, solicit, support, encourage, propose, assist, consent to, or vote for,
enter or participate in any negotiations or any agreement with any Person
regarding, pursue or consummate, any Alternative Restructuring;

 

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(r) announce publicly their intention not to support the Restructuring
Transactions; or

(s) consummate the Restructuring Transactions unless each of the conditions to
the consummation of such transactions set forth in this Agreement, the
Out-of-Court Term Sheet, and/or the Disclosure Statement has been satisfied (or
waived by the applicable Required Consenting Stakeholders in their sole
discretion).

Section 9. Additional Provisions Regarding Company Parties’ Commitments.

9.01. Notwithstanding anything to the contrary in this Agreement, and subject to
Section 13.02(c), nothing in this Agreement shall require a Company Party or the
board of directors, board of managers, or similar governing body of a Company
Party, including any director, manager, or officer of a Company Party that is an
employee, representative, or agent of any Consenting Shareholders, to take or
refrain from taking any action pursuant to this Agreement (including, without
limitation, terminating this Agreement pursuant to Section 13.02 hereof, to the
extent the board of directors or mangers reasonably determines in good faith,
based on the advice of external counsel (including counsel to the Company), that
taking, or such action, as applicable, would be inconsistent with its fiduciary
obligations or applicable Law, and any such action or inaction pursuant to such
exercise of fiduciary duties shall not be deemed to constitute a breach of this
Agreement. The Company shall promptly notify each of the Consenting Creditor
Parties of any such determination (and in any event within two (2) business days
following such determination).

9.02. Notwithstanding anything to the contrary in this Agreement, each Company
Party and its directors, officers, employees, investment bankers, attorneys,
accountants, consultants, and other advisors or representatives shall have the
rights to: (a) consider, respond to, discuss, and negotiate unsolicited
Alternative Restructuring Proposals; (b) provide access to non-public
information concerning any Company Party to any Entity that (i) provides an
unsolicited Alternative Restructuring Proposal, (ii) executed and delivers a
Confidentiality Agreement, which shall be in form and substance reasonably
acceptable to the Required Consenting Lenders, and (iii) requests such
information; and (c) enter into or continue discussions or negotiations with
holders of Claims against or Equity Interests in a Company Party (including any
Consenting Lender), any other party in interest in the Chapter 11 Cases
(including any official committee and the United States Trustee), or any other
Entity regarding the Restructuring Transactions. At all times prior to the date
on which the Company Parties enter into a definitive agreement with respect to
an Alternative Restructuring, the Company Parties shall inform counsel to the
Consenting Lenders and the Consenting Shareholders regarding (A) any discussions
and/or negotiations relating to any such Alternative Restructuring and/or
(B) any amendments, modifications or other changes to, or any further
developments of, any such Alternative Restructuring, in any such case as is
necessary to keep such counsel contemporaneously informed as to the status and
substance of such discussions, negotiations, amendments, modifications, changes
and/or developments.

9.03. Nothing in this Agreement shall: (a) impair or waive the rights of any
Company Party to assert or raise any objection permitted under this Agreement in
connection with the Restructuring Transactions; or (b) prevent any Company Party
from enforcing this Agreement or contesting whether any matter, fact, or thing
is a breach of, or is inconsistent with, this Agreement.

 

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Section 10. Transfer of Interests and Securities.

10.01. During the Agreement Effective Period, no Consenting Stakeholder shall
Transfer any ownership (including any beneficial ownership as defined in the
Rule 13d-3 under the Exchange Act) in any Company Claims/Interests to any
affiliated or unaffiliated party, including any party in which it may hold a
direct or indirect beneficial interest, unless either (i) the transferee
executes and delivers to counsel to the Company Parties and counsel to the
Consenting Stakeholders, at or before the time of the proposed Transfer, a
Joinder or (ii) the transferee is a Consenting Stakeholder and the transferee
provides notice of such Transfer (including the amount and type of Company
Claim/Interests Transferred) to counsel to the Company Parties and counsel to
the applicable Consenting Stakeholders at or before the time of the proposed
Transfer.

10.02. Upon compliance with the requirements of Section 10.01, the transferee
shall be deemed a Consenting Stakeholder, as applicable, and the transferor
shall be deemed to relinquish its rights (and be released from its obligations)
under this Agreement to the extent of the rights and obligations in respect of
such transferred Company Claims/Interests. Any Transfer in violation of
Section 10.01 above shall be void ab initio.

10.03. This Agreement shall in no way be construed to preclude the Consenting
Stakeholders from acquiring additional Company Claims/Interests; provided,
however, that (a) such additional Company Claims/Interests shall automatically
and immediately upon acquisition by a Consenting Stakeholder be deemed subject
to the terms of this Agreement (regardless of when or whether notice of such
acquisition is given to counsel to the Company Parties or counsel to the
Consenting Stakeholders) and (b) such Consenting Stakeholder must provide notice
of such acquisition (including the amount and type of Company Claims/Interests
acquired) to counsel to the Company Parties and counsel to the applicable
Consenting Stakeholders within five (5) Business Days of such acquisition.

10.04. Notwithstanding Section 10.01, a Qualified Marketmaker that acquires any
Company Claims/Interests with the purpose and intent of acting as a Qualified
Marketmaker for such Company Claims/Interests shall not be required to execute
and deliver a Joinder in respect of such Company Claims/Interests if (i) such
Qualified Marketmaker subsequently transfers such Company Claims/Interests (by
purchase, sale, assignment, participation, or otherwise) within ten
(10) Business Days of its acquisition to a transferee that is an entity that is
not an affiliate, affiliated fund, or affiliated entity with a common investment
advisor; (ii) the transferee otherwise is a Permitted Transferee under
Section 10.01; and (iii) the Transfer otherwise is permitted under
Section 10.01. To the extent that a Consenting Lender is acting in its capacity
as a Qualified Marketmaker, it may Transfer (by purchase, sale, assignment,
participation, or otherwise) any right, title, or interests in Company
Claims/Interests that the Qualified Marketmaker acquires from a holder of the
Company Claims/Interests who is not a Consenting Stakeholder without the
requirement that the transferee be a Permitted Transferee.

10.05. Notwithstanding the foregoing provisions of this Section 10, in no event
shall TowerBrook directly or indirectly Transfer all or any portion of its
Equity Interests in any Company Party without the prior written consent of the
Required Consenting Lenders and the Company Parties.

 

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10.06. Notwithstanding anything to the contrary in this Section 10, the
restrictions on Transfer set forth in this Section 10 shall not apply to the
grant of any liens or encumbrances on any Company Claims/Interests in favor of a
bank or broker-dealer holding custody of such Company Claims/Interests in the
ordinary course of business and which lien or encumbrance is released upon the
Transfer of such Company Claims/Interests.

Section 11. Representations and Warranties of Consenting Stakeholders. Each
Consenting Stakeholder severally, and not jointly, represents and warrants that,
as of the date such Consenting Stakeholder executes and delivers this Agreement
or, in the case of a Consenting Lender, a Joinder, as applicable:

(a) it is the beneficial or record owner of the face amount of the Company
Claims/Interests or is the nominee, investment manager, or advisor for
beneficial holders of the Company Claims/Interests reflected in, and, having
made reasonable inquiry, is not the beneficial or record owner of any Company
Claims/Interests other than those reflected in, such Consenting Stakeholder’s
signature page to this Agreement or, in the case of a Consenting Lender, a
Joinder, as applicable;

(b) it has the full power and authority to act on behalf of, vote and consent to
matters concerning, such Company Claims/Interests;

(c) such Company Claims/Interests are free and clear of any pledge, lien,
security interest, charge, claim, equity, option, proxy, voting restriction,
right of first refusal, or other limitation on disposition, transfer, or
encumbrances of any kind, that would adversely affect in any way such Consenting
Stakeholder’s ability to perform any of its obligations under this Agreement at
the time such obligations are required to be performed;

(d) it has the full power to vote, approve changes to, and transfer all of its
Company Claims/Interests as contemplated by this Agreement subject to applicable
Law;

(e) such Consenting Stakeholder has made no prior assignment, sale,
participation, grant, conveyance, or other Transfer of, and has not entered into
any agreement to assign, sell, participate, grant, convey, or otherwise
Transfer, in whole or in part, any portion of its rights, title, or interest in
any Company Claims/Interests that is inconsistent with the representations and
warranties of such Consenting Stakeholder herein or would render such Consenting
Stakeholder otherwise unable to comply with this Agreement and perform its
obligations hereunder; and

(f) solely with respect to holders of Company Claims/Interests, (i) it is either
(A) a qualified institutional buyer as defined in Rule 144A of the Securities
Act, (B) not a U.S. person (as defined in Regulation S of the Securities Act),
or (C) an institutional “accredited investor” (as defined by Rule 501 of the
Securities Act), and (ii) any securities acquired by such Consenting Stakeholder
in connection with the Restructuring Transactions will have been acquired for
investment and not with a view to distribution or resale in violation of the
Securities Act;

provided, however it is understood and agreed that the representations and
warranties made by a Consenting Lender that is an investment manager, advisor,
or subadvisor of a beneficial owner of Company Claims/Interests are made with
respect to, and on behalf of, such beneficial owner and not such investment
manager, advisor, or subadvisor, and, if applicable, are made severally (and not
jointly) with respect to the investment funds, accounts, and other investment
vehicles managed by such investment manager, advisor, or subadvisor.

 

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Section 12. Mutual Representations, Warranties, and Covenants. Each of (i) the
Company Parties, jointly and severally, and (ii) the Consenting Stakeholders,
severally and not jointly, represents, warrants, and covenants to each other
Party, as of the date such Party executes and delivers this Agreement or, in the
case of a Consenting Lender, a Joinder, as applicable:

(a) it is validly existing and in good standing under the Laws of the state of
its organization, and this Agreement is a legal, valid, and binding obligation
of such Party, enforceable against it in accordance with its terms, except as
enforcement may be limited by applicable Laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability;

(b) except as expressly provided in this Agreement, the Plan, and the Bankruptcy
Code, no consent or approval is required by any other Person in order for it to
effectuate the Restructuring Transactions contemplated by, and perform its
respective obligations under, this Agreement;

(c) the entry into and performance by it of, and the transactions contemplated
by, this Agreement do not, and will not, conflict in any material respect with
any Law or regulation applicable to it or with any of its Organizational
Documents;

(d) it is not currently engaged in any discussions, negotiations or other
arrangements with respect to any Alternative Restructuring Proposal or
Alternative Restructuring;

(e) except as expressly provided in this Agreement, it has (or will have, at the
relevant time) all requisite corporate or other power and authority to enter
into, execute, and deliver this Agreement and to effectuate the Restructuring
Transactions contemplated by, and perform its respective obligations under, this
Agreement; and

(f) except as expressly provided by this Agreement, it is not party to any
restructuring or similar agreements or arrangements with the other Parties to
this Agreement that have not been disclosed to all Parties to this Agreement.

Section 13. Termination Events.

13.01. Consenting Lender Termination Events. This Agreement may be terminated
with respect to all Parties (unless otherwise set forth in this Section 13.01)
by the Required Consenting Lenders, by the delivery to counsel to the Company
Parties and counsel to the Consenting Shareholders of a written notice in
accordance with Section 15.10 upon the occurrence of the following events:

(a) the breach in any material respect (without giving effect to any
“materiality” qualifiers set forth therein) by a Company Party or the Consenting
Shareholders of any of the representations, warranties, or covenants of such
Parties set forth in this Agreement that remains uncured for five (5) Business
Days after such terminating Consenting Lenders transmit a written notice in
accordance with Section 15.10 detailing any such breach;

 

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(b) the Milestones set forth in Section 4 have not been achieved, extended or
waived;

(c) the issuance by any Governmental Entity, including any regulatory authority
or court of competent jurisdiction, of any final, non-appealable ruling or order
that (i) enjoins the consummation of a material portion of the Restructuring
Transactions and (ii) remains in effect for thirty (30) Business Days after such
terminating Consenting Lenders transmit a written notice in accordance with
Section 15.10 detailing any such issuance; provided, that this termination right
may not be exercised by any Consenting Lender that sought or requested such
ruling or order in contravention of any obligation set out in this Agreement;

(d) any Company Party (i) publicly announces, or communicates in writing to any
other Party, its intention not to support or pursue the Restructuring
Transactions, (ii) provides notice to the Consenting Stakeholders that it is
exercising its rights pursuant to Section 9.01, (iii) obtains
debtor-in-possession financing other than pursuant to the DIP Facility, or
(iv) publicly announces, or communicates in writing to any other Party, that it
intends to enter into, or has entered into, definitive documentation with
respect to, an Alternative Restructuring;

(e) (i) any of the Company Parties filed any agreement, instrument, pleading,
order, form, or other document that is utilized to implement or effectuate, or
that otherwise relates to, this Agreement, the Plan, and/or the Restructuring
Transactions that, in any such case, is not consistent in all material respects
with this Agreement or otherwise reasonably acceptable to the Required
Consenting Stakeholders, subject to the Consenting Shareholders’ In-Court
Consent Right, or (ii) the waiver, amendment, or modification of any of the
Definitive Documents, or the filing by any Company Party, of a pleading seeking
to waive, amend or modify any term or condition of any of the Definitive
Documents, which waiver, amendment, modification, or filing contains any
provision that is not consistent in all material respects with this Agreement or
otherwise reasonably acceptable to the Required Consenting Stakeholders, subject
to the Consenting Shareholders’ In-Court Consent Right, in each case, which
remains uncured for five (5) Business Days after such terminating Consenting
Lenders transmit a written notice in accordance with Section 15.10;

(f) the Bankruptcy Court enters an order denying confirmation of the Plan;

(g) the occurrence of (i) an “Event of Default” under any of the Term Loan
Agreement (other than (A) the Forbearance Defaults (as defined in the Term Loan
Forbearance Agreement), and (B) a bankruptcy filing consistent with, and as
party of, the In-Court Restructuring), DIP Facility Documents, the Interim DIP
Order, or the Final DIP Order (without giving effect to any amendments,
supplements, modifications, or waivers to the Term Loan Agreement, DIP Facility
Documents, the Interim DIP Order, or the Final DIP Order made or provided after
the Agreement Effective Date), or (ii) an acceleration or maturity of the
obligations, or termination of commitments under, the Term Loan Agreement (prior
to the Petition Date) or DIP Facility Documents (after the Petition Date);

(h) the occurrence and continuance of any “Event of Termination” under the Term
Loan Forbearance Agreement and such “Event of Termination” is not cured, waived
or otherwise remedied within two (2) Business Days after the occurrence thereof;

(i) the occurrence of a Material Adverse Effect;

 

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(j) the Bankruptcy Court grants relief that (i) is inconsistent with this
Agreement in any material respect or (ii) would, or would reasonably be expected
to, frustrate the purposes of this Agreement, including by preventing the
consummation of the Restructuring Transactions;

(k) the Bankruptcy Court enters an order terminating any Debtor’s exclusive
right to file and/or solicit acceptances of a plan of reorganization;

(l) the Bankruptcy Court enters an order authorizing or directing the
assumption, assumption and assignment, or rejection of an executory contract
(including any employment agreement, severance agreement or other employee
benefit plan) or unexpired lease, other than any assumption or rejection that
(i) is approved in advance by the Required Consenting Lenders or (ii) is
expressly contemplated by the Plan;

(m) any Debtor (i) withdraws the Plan, (ii) publicly announces, or announces in
writing to any other Party, its intention to withdraw the Plan or not support
the Plan, (iii) moves to voluntarily dismiss any of the Chapter 11 Cases, or
(iv) moves for court authority to sell any material asset or assets without the
written consent of the Required Consenting Lenders;

(n) the Bankruptcy Court enters an order invalidating, disallowing,
subordinating, recharacterizing, or limiting, as applicable, any of the Term
Loan Claims or any of the encumbrances that secure (or purport to secure) the
Term Loan Claims;

(o) the entry of an order by the Bankruptcy Court, or the filing of a motion or
application by any Company Party seeking an order (without the prior written
consent of the other Required Parties, not to be unreasonably withheld), (i)
converting one or more of the Chapter 11 Cases of a Company Party to a case
under chapter 7 of the Bankruptcy Code, (ii) appointing an examiner with
expanded powers beyond those set forth in sections 1106(a)(3) and (4) of the
Bankruptcy Code or a trustee in one or more of the Chapter 11 Cases of a Company
Party, or (iii) rejecting this Agreement;

(p) the Bankruptcy Court grants relief terminating, annulling, or modifying the
automatic stay (as set forth in section 362 of the Bankruptcy Code) with regard
to any material asset that, to the extent such relief was granted, would have a
material adverse effect on the consummation of the Restructuring Transactions;
provided, however, that any modification of the automatic stay expressly
provided by either Interim DIP Order or the Final DIP Order shall not constitute
a termination event; or

(q) after entry by the Bankruptcy Court of the Interim DIP Order, the Final DIP
Order, the Disclosure Statement Order, or the Confirmation Order, any such order
is reversed, stayed, dismissed, vacated, reconsidered, modified, or amended in
any material respect without the written consent of the Required Consenting
Lenders;

provided, however, that in the case of a breach by the Consenting Shareholders
pursuant to Section 13.01(a), the Consenting Lenders may only terminate this
Agreement with respect to the Consenting Shareholders (and the Out-of-Court
Restructuring), and the Agreement would otherwise survive with respect to the
Company Parties and Consenting Lenders (and the In-Court Restructuring).

 

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13.02. Company Party Termination Events. Any Company Party may terminate this
Agreement as to all Parties (unless otherwise set forth in this Section 13.02)
upon prior written notice to counsel to the Consenting Stakeholders in
accordance with Section 15.10 upon the occurrence of any of the following
events:

(a) the breach in any material respect (without giving effect to any
“materiality” qualifiers set forth therein) by the Consenting Shareholders of
any of the representations, warranties, or covenants of the Consenting
Shareholders set forth in this Agreement, and such breach remains uncured for
five (5) Business Days after the Company Parties transmit a written notice of
such breach; in accordance with Section 15.10 detailing any such breach;

(b) the breach in any material respect (without giving effect to any
“materiality” qualifiers set forth therein) by the Consenting Lenders of any of
the representations, warranties, or covenants of the Consenting Lenders set
forth in this Agreement, such that the non-breaching Consenting Lenders own or
control less than two-thirds in aggregate principal amount of all of the
outstanding Term Loans and such breach remains uncured for five (5) Business
Days after the Company Parties transmit a written notice in accordance with
Section 15.10 detailing any such breach;

(c) the board of directors, board of managers, or such similar governing body of
any Company Party determines, after consulting with counsel, in accordance with
Section 9, that (i) proceeding with any of the Restructuring Transactions
(including taking any action or refraining from taking any action) would be
inconsistent with the exercise of its fiduciary duties or applicable Law,
including to pursue an Alternative Restructuring Proposal and (ii) the Company
Parties are in compliance with the terms of this Agreement;

(d) the issuance by any Governmental Entity, including any regulatory authority
or court of competent jurisdiction, of any final, non-appealable ruling or order
that (i) enjoins the consummation of a material portion of the Restructuring
Transactions and (ii) remains in effect for thirty (30) Business Days after such
terminating Company Party transmits a written notice in accordance with
Section 15.10 detailing any such issuance; provided, that this termination right
shall not apply to or be exercised by the Company Parties if any Company Party
sought or requested such ruling or order in contravention of any obligation or
restriction set out in this Agreement; or

(e) if the Restructuring Transactions are to be implemented through the In-Court
Restructuring, the Bankruptcy Court enters an order denying confirmation of the
Plan;

provided, however, that in the case of a breach by the Consenting Shareholders
pursuant to Section 13.02(a), the Company Parties may only terminate this
agreement with respect to the Consenting Shareholders (and the Out-of-Court
Restructuring), and the Agreement would otherwise survive with respect to the
Company Parties and Consenting Lenders (and the In-Court Restructuring).

13.03. Consenting Shareholders Termination. This Agreement may be terminated
with respect to the Consenting Shareholders only, by the Consenting
Shareholders, by the delivery to counsel to the Company Parties and counsel to
the Consenting Lenders of a written notice in accordance with Section 15.10 upon
the occurrence of the following events:

(a) the breach in any material respect (without giving effect to any
“materiality” qualifiers set forth therein) by a Company Party or the Consenting
Lenders of any of the representations, warranties, or covenants of such Parties
set forth in this Agreement that remains uncured for five (5) Business Days
after the Consenting Shareholders transmits a written notice in accordance with
Section 15.10 detailing any such breach;

 

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(b) the Sponsor Milestones set forth in Section 4 have not been achieved, except
to the extent such Sponsor Milestone has been waived or extended in a manner
consistent with this Agreement or a Consenting Shareholder is the cause of the
failure to meet such Sponsor Milestone;

(c) the Consent Threshold has not been obtained by the Out-of-Court Toggle Date,
but solely to the extent that notice of such termination under this
Section 13.03(c) is provided within two (2) Business Days following the
Out-of-Court Toggle Date;

(d) the issuance by any Governmental Entity, including any regulatory authority
or court of competent jurisdiction, of any final, non-appealable ruling or order
that (i) enjoins the consummation of a material portion of the Restructuring
Transactions and (ii) remains in effect for thirty (30) Business Days after the
Consenting Shareholders transmit a written notice in accordance with
Section 15.10 detailing any such issuance; provided, that this termination right
may not be exercised by the Consenting Shareholders that sought or requested
such ruling or order in contravention of any obligation set out in this
Agreement;

(e) any Company Party (i) publicly announces, or communicates in writing to any
other Party, its intention not to support or pursue the Restructuring
Transactions, (ii) provides notice to the Consenting Stakeholders that it is
exercising its rights pursuant to Section 9.01, or (iii) publicly announces, or
communicates in writing to any other Party, that it intends to enter into, or
has entered into, definitive documentation with respect to, an Alternative
Restructuring

(f) (i) any of the Company Parties files any agreement, instrument, pleading,
order, form and other document that is utilized to implement or effectuate, or
that otherwise relates to, this Agreement, the Plan and/or the Restructuring
Transactions that, in any such case, is not consistent in all material respects
with this Agreement or otherwise reasonably acceptable to the Required
Consenting Stakeholders, subject to the Consenting Shareholders’ In-Court
Consent Right, or (ii) any term, waiver, amendment or modification of any of the
Definitive Documents, or the filing by any Company Party of a pleading seeking
to waive, amend or modify any term or condition of any of the Definitive
Documents that, is not consistent in all material respects with this Agreement
(to the extent applicable to the Consenting Shareholders) or otherwise
reasonably acceptable to the Required Consenting Stakeholders, subject to the
Consenting Shareholders’ In-Court Consent Right, in each case, which remains
uncured for five (5) Business Days after the Consenting Shareholders transmit a
written notice in accordance with Section 15.10;

(g) with respect to an In-Court Restructuring, the Bankruptcy Court enters an
order denying confirmation of the Plan;

(h) the occurrence of a Material Adverse Effect;

 

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(i) the Bankruptcy Court grants relief that (i) is inconsistent with this
Agreement in any material respect or (ii) would, or would reasonably be expected
to, frustrate the purposes of this Agreement, including by preventing the
consummation of the Restructuring Transactions;

(j) the Bankruptcy Court enters an order terminating any Debtor’s exclusive
right to file and/or solicit acceptances of a plan of reorganization;

(k) the Bankruptcy Court enters an order invalidating, disallowing,
subordinating, recharacterizing, or limiting, as applicable, any of the Company
Claims/Equity Interests held by the Consenting Shareholders; and

(l) the entry of an order by the Bankruptcy Court, or the filing of a motion or
application by any Company Party seeking an order (without the prior written
consent of the other Required Parties), (i) converting one or more of the
Chapter 11 Cases of a Company Party to a case under chapter 7 of the Bankruptcy
Code, (ii) appointing an examiner with expanded powers beyond those set forth in
sections 1106(a)(3) and (4) of the Bankruptcy Code or a trustee in one or more
of the Chapter 11 Cases of a Company Party, or (iii) rejecting this Agreement;

13.04. Mutual Termination. This Agreement, and the obligations of all Parties
hereunder, may be terminated by mutual written agreement among all of the
following: (a) the Consenting Shareholders; (b) the Required Consenting Lenders;
and (c) each Company Party.

13.05. Automatic Termination. This Agreement shall terminate with respect to all
Parties automatically, without any further action required by any Party, upon
the earlier of (i) the consummation of the Out-of-Court Restructuring or the
occurrence of the Plan Effective Date, as applicable and (ii) November 15, 2020
(the “Automatic Termination Outside Date”), which Automatic Termination Outside
Date may be extended or waived with the consent of the Required Consenting
Stakeholders upon written request of the Company to counsel to the Consenting
Stakeholders within seven (7) calendar days of such date.

13.06. Effect of Termination. Upon the occurrence of the Termination Date as to
a Party, this Agreement shall be of no further force and effect as to such Party
and each Party subject to such termination shall be released from its
commitments, undertakings, and agreements under or related to this Agreement and
shall have the rights and remedies that it would have had, had it not entered
into this Agreement, and shall be entitled to take all actions, whether with
respect to the Restructuring Transactions or otherwise, that it would have been
entitled to take had it not entered into this Agreement, including with respect
to any and all Claims or causes of action; provided, however, that in no event
shall any such termination relieve any Party from (a) liability for its breach
or non-performance of its obligations under this Agreement prior to the
Termination Date or (b) obligations under this Agreement which by their terms
expressly survive termination of this Agreement. Upon the occurrence of the
Termination Date prior to the Out-of-Court Restructuring Effective Date or the
Plan Effective Date, as applicable, any and all consents or ballots tendered by
the Parties subject to such termination with respect to the Restructuring
Transactions, in each case before the Termination Date, shall be deemed, for all
purposes, to be null and void from the first instance and shall not be
considered or otherwise used in any manner by the Parties in connection with the
Restructuring Transactions, this Agreement, or otherwise. Nothing in this
Agreement shall be construed as prohibiting a Company Party or any of the
Consenting

 

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Stakeholders from contesting whether any such termination is in accordance with
its terms or to seek enforcement of any rights under this Agreement that arose
or existed before the Termination Date. Except as expressly provided in this
Agreement, nothing herein is intended to, or does, in any manner waive, limit,
impair, or restrict (i) any right of any Company Party or the ability of any
Company Party to protect and reserve its rights (including rights under this
Agreement), remedies, and interests, including its claims against any Consenting
Stakeholder, and (ii) any right of any Consenting Stakeholder, or the ability of
any Consenting Stakeholder, to protect and preserve its rights (including rights
under this Agreement), remedies, and interests, including its claims against any
Company Party or Consenting Stakeholder. No purported termination of this
Agreement shall be effective under this Section 13.06 or otherwise if the Party
seeking to terminate this Agreement is in material breach of this Agreement,
except a termination pursuant to Section 13.02(c). Nothing in this Section 13.06
shall restrict any Company Party’s right to terminate this Agreement in
accordance with Section 13.02(c). If this Agreement has been terminated in
accordance with this Section 13 at a time when permission of the Bankruptcy
Court shall be required for a Consenting Stakeholder to change or withdraw (or
cause to change or withdraw) its vote to accept the Plan, the Company Parties
shall consent to any attempt by such Consenting Stakeholder to change or
withdraw (or cause to change or withdraw) such vote at such time.

Section 14. Amendments and Waivers.

(a) This Agreement may not be modified, amended, or supplemented, and no
condition or requirement of this Agreement may be waived, in any manner except
in accordance with this Section 14.

(b) This Agreement may be modified, amended, or supplemented, or a condition or
requirement of this Agreement may be waived, in a writing signed: (i) in the
case of a waiver, by the Party against whom the waiver is to be effective, and
(ii) in the case of a modification, amendment or supplement, by the Required
Parties; provided, however, that (A) if the proposed modification, amendment, or
supplement adversely affects any of the Company Claims/Interests held by a
Consenting Stakeholder in a manner that is different or disproportionate in any
material respect from the effect such modification, amendment, or supplement has
on the Company Claims/Interests held by the Consenting Stakeholders, as
applicable, other than in proportion to the amount of such Company
Claims/Interests, then the consent of each such affected Consenting Stakeholder
shall also be required to effectuate such modification, amendment, waiver or
supplement, and (B) any modification, amendment or supplement to this
Section 14(b) shall require the consent of all Parties.

(c) Any proposed modification, amendment, waiver, or supplement that does not
comply with this Section 14 shall be ineffective and void ab initio.

(d) The waiver by any Party of a breach of any provision of this Agreement shall
not operate or be construed as a further or continuing waiver of such breach or
as a waiver of any other or subsequent breach. No failure on the part of any
Party to exercise, and no delay in exercising, any right, power, or remedy under
this Agreement shall operate as a waiver of any such right, power, or remedy or
any provision of this Agreement, nor shall any single or partial exercise of
such right, power, or remedy by such Party preclude any other or further
exercise of such right, power, or remedy or the exercise of any other right,
power, or remedy. All remedies under this Agreement are cumulative and are not
exclusive of any other remedies provided by Law.

 

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Section 15. Miscellaneous.

15.01. Acknowledgement. Notwithstanding any other provision herein, this
Agreement is not and shall not be deemed to be an offer with respect to any
securities or solicitation of votes for the acceptance of a plan of
reorganization for purposes of sections 1125 and 1126 of the Bankruptcy Code or
otherwise. Any such offer or solicitation will be made only in compliance with
all applicable securities Laws, provisions of the Bankruptcy Code, and/or other
applicable Law.

15.02. Exhibits Incorporated by Reference; Conflicts. Each of the exhibits,
annexes, signature pages, and schedules attached hereto is expressly
incorporated herein and made a part of this Agreement, and all references to
this Agreement shall include such exhibits, annexes, and schedules. In the event
of any inconsistency between this Agreement (without reference to the exhibits,
annexes, and schedules hereto) and the exhibits, annexes, and schedules hereto,
this Agreement (without reference to the exhibits, annexes, and schedules
thereto), Out-of-Court Term Sheet, or the Chapter 11 Term Sheet, as applicable,
shall govern.

15.03. Further Assurances. Subject to the other terms of this Agreement, the
Parties agree to execute and deliver such other instruments and perform such
acts, in addition to the matters herein specified, as may be reasonably
appropriate or necessary, or as may be required by order of the Bankruptcy
Court, from time to time, to effectuate the Restructuring Transactions, as
applicable. The Parties shall cooperate with each other and with their
respective counsel in good faith in connection with any steps required to be
taken as part of their respective obligations under this Agreement.

15.04. Complete Agreement. Except as otherwise explicitly provided herein, this
Agreement constitutes the entire agreement among the Parties with respect to the
subject matter hereof and supersedes all prior agreements, oral or written,
among the Parties with respect thereto, other than any Confidentiality
Agreement.

15.05. GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF FORUM. THIS
AGREEMENT IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH
STATE, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. Each
Party hereto agrees that it shall bring any action or proceeding in respect of
any claim arising out of or related to this Agreement, to the extent possible,
in the Bankruptcy Court, and solely in connection with claims arising under this
Agreement: (a) irrevocably submits to the exclusive jurisdiction of the
Bankruptcy Court; (b) waives any objection to laying venue in any such action or
proceeding in the Bankruptcy Court; and (c) waives any objection that the
Bankruptcy Court is an inconvenient forum or does not have jurisdiction over any
Party hereto.

15.06. TRIAL BY JURY WAIVER. EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

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15.07. Execution of Agreement. This Agreement may be executed and delivered in
any number of counterparts and by way of electronic signature and delivery, each
such counterpart, when executed and delivered, shall be deemed an original, and
all of which together shall constitute the same agreement. Except as expressly
provided in this Agreement, each individual executing this Agreement on behalf
of a Party has been duly authorized and empowered to execute and deliver this
Agreement on behalf of said Party.

15.08. Rules of Construction. This Agreement is the product of negotiations
among the Company Parties and the Consenting Stakeholders, and in the
enforcement or interpretation hereof, is to be interpreted in a neutral manner,
and any presumption with regard to interpretation for or against any Party by
reason of that Party having drafted or caused to be drafted this Agreement, or
any portion hereof, shall not be effective in regard to the interpretation
hereof. The Company Parties and the Consenting Stakeholders were each
represented by counsel during the negotiations and drafting of this Agreement
and continue to be represented by counsel.

15.09. Successors and Assigns; Third Parties. This Agreement is intended to bind
and inure to the benefit of the Parties and their respective successors and
permitted assigns, as applicable. There are no third-party beneficiaries under
this Agreement, except that each No Recourse Party shall be a third-party
beneficiary of Section 15.24. The rights or obligations of any Party under this
Agreement may not be assigned, delegated, or transferred to any other Person,
except in accordance with Section 10.

15.10. Notices. All notices hereunder shall be deemed given if in writing and
delivered, by electronic mail, courier, or registered or certified mail (return
receipt requested), to the following addresses (or at such other addresses as
shall be specified by like notice):

(a) if to a Company Party, to:

c/o TowerBrook Capital Partners, L.P.

Park Avenue Tower

65 East 55th Street

New York, New York 10022

and

J.Jill Inc.

4 Batterymarch Park

Quincy, Massachusetts 02169

with copies to:

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Tel.:

Attention:    Jonathan S. Henes

   Neil E. Herman

E-mail:        jhenes@kirkland.com

   neil.herman@kirkland.com

 

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(b) if to a Consenting Lender, to the address or e-mail addresses set forth on
such Consenting Lender’s signature page to this Agreement (or in the signature
page to a Joinder in the case of any Consenting Lender that becomes a party
hereto after the Agreement Effective Date), with a copy to:

Stroock & Stroock & Lavan LLP

180 Maiden Lane

New York, New York 10038

Tel.: (212) 806-5400

Attention:     Jayme T. Goldstein

Allison P. Miller

Sayan Bhattacharyya

E-mail: jgoldstein@stroock.com

amiller@stroock.com

sbhattacharyya@strook.com

(c) if to the Consenting Shareholders, to the address or e-mail addresses set
forth on the Consenting Shareholders’ signature pages to this Agreement, with a
copy to:

Paul, Weiss, Rifkind, Wharton & Garrison

1285 Avenue of the Americas

New York, New York 10019

Tel.: (212) 373-3000

Attention: Jeffrey D. Saferstein

       Elizabeth McColm

E-mail:     jsaferstein@paulweiss.com

       emccolm@paulweiss.com

Any notice given by delivery, mail, or courier shall be effective when received.

15.11. Independent Due Diligence and Decision Making. Each Consenting
Stakeholder hereby confirms that its decision to execute this Agreement has been
based upon its independent investigation of the operations, businesses,
financial and other conditions, and prospects of the Company Parties.

15.12. Enforceability of Agreement. Each of the Parties to the extent
enforceable waives any right to assert that the exercise of termination rights
under this Agreement is subject to the automatic stay provisions of the
Bankruptcy Code, and expressly stipulates and consents hereunder to the
prospective modification of the automatic stay provisions of the Bankruptcy Code
for purposes of exercising termination rights under this Agreement, to the
extent the Bankruptcy Court determines that such relief is required.

 

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15.13. Waiver. If the Restructuring Transactions are not consummated, or if this
Agreement is terminated for any reason, nothing herein shall be construed as a
waiver by any Consenting Lender of any or all of such Consenting Lender’s
rights, remedies, claims, and defenses and the Consenting Lenders expressly and
fully reserve any and all of their respective rights, remedies, claims, and
defenses. Pursuant to Federal Rule of Evidence 408 and any other applicable
rules of evidence, this Agreement and all negotiations relating hereto shall not
be admissible into evidence in any proceeding other than a proceeding to enforce
its terms or the payment of damages to which a Party may be entitled under this
Agreement.

15.14. Specific Performance. It is understood and agreed by the Parties that
money damages would be an insufficient remedy for any breach of this Agreement
by any Party, and each non-breaching Party shall be entitled to specific
performance and injunctive or other equitable relief (without the posting of any
bond and without proof of actual damages) as a remedy of any such breach,
including an order of the Bankruptcy Court or other court of competent
jurisdiction requiring any Party to comply promptly with any of its obligations
hereunder.

15.15. Claims. Except where otherwise specified, the agreements,
representations, warranties, and obligations of (a) the Company Parties under
this Agreement are, in all respects, joint and several, and (b) the Consenting
Stakeholders under this Agreement are, in all respects, several and not joint.

15.16. Severability and Construction. If any provision of this Agreement shall
be held by a court of competent jurisdiction to be illegal, invalid, or
unenforceable, the remaining provisions shall remain in full force and effect if
essential terms and conditions of this Agreement for each Party remain valid,
binding, and enforceable.

15.17. Remedies Cumulative. All rights, powers, and remedies provided under this
Agreement or otherwise available in respect hereof at Law or in equity shall be
cumulative and not alternative, and the exercise of any right, power, or remedy
thereof by any Party shall not preclude the simultaneous or later exercise of
any other such right, power, or remedy by such Party.

15.18. Capacities of Consenting Stakeholder. Each Consenting Stakeholder has
entered into this agreement on account of all Company Claims/Interests that it
holds (directly or through discretionary accounts that it manages or advises)
and, except where otherwise specified in this Agreement, shall take or refrain
from taking all actions that it is obligated to take or refrain from taking
under this Agreement with respect to all such Company Claims/Interests.

15.19. Email Consents. Where a written consent, acceptance, approval, notice or
waiver is required pursuant to or contemplated by this Agreement, pursuant to
Section 3.02, Section 13, Section 14 or otherwise, including a written approval
by the Required Parties, such written consent, acceptance, approval, or waiver
shall be deemed to have occurred if, by agreement between counsel (identified in
Section 15.10) to the applicable Parties submitting and receiving such consent,
acceptance, approval, or waiver, it is conveyed in writing (including electronic
mail) between each such counsel without representations or warranties of any
kind on behalf of such counsel.

 

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15.20. Transaction Expenses.

(a) Whether or not the transactions contemplated by this Agreement are
consummated and, in each case, if applicable, subject to the terms of the
applicable engagement letter or fee reimbursement letter, the Company Parties
hereby agree, on a joint and several basis, to pay in cash the Transaction
Expenses as follows: (i) all accrued and unpaid Transaction Expenses of the
Consenting Lenders’ Advisors incurred up to (and including) the Agreement
Effective Date shall be paid in full in cash no later than (5) Business Days
following the Agreement Effective Date, (ii) prior to the Petition Date (if any)
and after the Agreement Effective Date, all accrued and unpaid Transaction
Expenses of the Consenting Lenders’ Advisors shall be paid in full in cash by
the Company Parties on a regular and continuing basis promptly (but in any event
within five (5) Business Days) and no later than the Business Day prior to the
Petition Date against receipt of reasonably detailed invoices, (iii) after the
Petition Date (if any), to the extent permitted by order of the Bankruptcy
Court, all accrued and unpaid Transaction Expenses of the Consenting Lenders’
Advisors shall be paid in full in cash by the Company Parties on a regular and
continuing basis promptly (but in any event within five (5) Business Days)
against receipt of reasonably detailed invoices, (iv) upon termination of this
Agreement, all accrued and unpaid Transaction Expenses of the Consenting
Lenders’ Advisors incurred up to (and including) the Termination Date shall be
paid in full in cash promptly (but in any event within five (5) Business Days)
in full in cash, against receipt of reasonably detailed invoices, and (v) upon
consummation of the Out-of-Court Restructuring or the occurrence of the Plan
Effective Date, as applicable, all accrued and unpaid Transaction Expenses
incurred up to (and including) such date shall be paid in full in cash against
receipt of reasonably detailed invoices, in each case without any requirement
for Bankruptcy Court review or further Bankruptcy Court order. For the avoidance
of doubt, Transaction Expenses of the Consenting Shareholders’ Advisors shall
only be paid by the Company Parties upon consummation of the Out-of-Court
Restructuring or the occurrence of the Plan Effective Date, in each case,
subject to the limitations set forth in the definition of “Transaction
Expenses”.

(b) The terms set forth in Section 15.20(a) shall survive termination of this
Agreement and shall remain in full force and effect regardless of whether the
transactions contemplated by this Agreement are consummated. The Company Parties
hereby acknowledge and agree that the Consenting Stakeholders have expended, and
will continue to expend, considerable time, effort and expense in connection
with this Agreement and the negotiation of the Restructuring Transactions, and
that this Agreement provides substantial value to, is beneficial to, and is
necessary to preserve, the Company Parties, and that the Consenting Stakeholders
have made a substantial contribution to the Company Parties and the
Restructuring Transactions. If and to the extent not previously reimbursed or
paid in connection with the foregoing, subject to the approval of the Bankruptcy
Court, the Company Parties shall reimburse or pay (as the case may be) all
reasonable and documented Transaction Expenses pursuant to section 1129(a)(4) of
the Bankruptcy Code or otherwise. The Company Parties hereby acknowledge and
agree that the Transaction Expenses are of the type that should be entitled to
treatment as, and the Company Parties shall seek treatment of such Transaction
Expenses as, administrative expense claims pursuant to sections 503(b) and
507(a)(2) of the Bankruptcy Code.

15.21. Relationship Among Parties. It is understood and agreed that no
Consenting Stakeholder owes any duty of trust or confidence of any kind or form
to any other Party. In this regard, it is understood and agreed that any
Consenting Lender may trade in Company Claims/Interests without the consent of
any other Consenting Stakeholder, subject to applicable securities laws and the
terms of this Agreement; provided, however, that no Consenting

 

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Stakeholder shall have any responsibility for any such trading to any other
Person by virtue of this Agreement. No prior history, pattern, or practice of
sharing confidences among or between the Parties shall in any way affect or
negate this understanding and agreement. No Consenting Stakeholder shall, as a
result of its entering into and performing its obligations under this Agreement,
be deemed to be part of a “group” (as that term is used in Section 13(d) of the
Exchange Act) with any other Party. For the avoidance of doubt, no action taken
by a Consenting Stakeholder pursuant to this Agreement shall be deemed to
constitute or to create a presumption by any of the Parties that the Consenting
Stakeholders are in any way acting in concert or as such a “group.”

15.22. Survival. Notwithstanding the termination of this Agreement pursuant to
Section 13, the terms, provisions, agreements and obligations of the Parties in
Section 15 (other than Section 15.03), and any defined terms used in any of the
forgoing Sections (solely to the extent used therein), shall survive such
termination and shall continue in full force and effect in accordance with the
terms hereof.

15.23. Publicity. The Company Parties shall submit drafts to counsel to the
Consenting Stakeholders of any press releases and public documents that
constitute disclosure of the existence or terms of this Agreement or any
amendment to the terms of this Agreement at least three (3) Business Days prior
to making any such disclosure, and shall afford them a reasonable opportunity
under the circumstances to comment on such documents and disclosures and shall
incorporate any such reasonable comments in good faith. Except as required by
Law, no Party or its advisors shall (a) use the name of any Consenting
Stakeholder in any public manner (including in any press release) with respect
to this Agreement, the Restructuring Transactions or any of the Definitive
Documents or (b) disclose to any Person (including, for the avoidance of doubt,
any other Consenting Stakeholder), other than advisors to the Company Parties,
the principal amount or percentage of any Company Claims/Interests held by any
Consenting Stakeholder without such Consenting Stakeholder’s prior written
consent (it being understood and agreed that each Consenting Stakeholder’s
signature page to this Agreement shall be redacted to remove the name of such
Consenting Stakeholder and the amount and/or percentage of Company
Claims/Interests held by such Consenting Stakeholder); provided, however, that
(i) if such disclosure is required by Law, the disclosing Party shall afford the
relevant Consenting Stakeholder a reasonable opportunity to review and comment
in advance of such disclosure and shall take all reasonable measures to limit
such disclosure and (ii) the foregoing shall not prohibit the disclosure of the
aggregate percentage or aggregate principal amount of Company Claims/Interests
held by the Consenting Stakeholders of the same class, collectively.
Notwithstanding the provisions in this Section 15.23, (A) any Party may disclose
the identities of the other Parties in any action to enforce this Agreement or
in any action for damages as a result of any breaches hereof, and (B) any Party
may disclose, to the extent expressly consented to in writing by a Consenting
Stakeholder, such Consenting Stakeholder’s identity and individual holdings.
Notwithstanding the forgoing, any Party may disclose the identity and individual
holdings of any Consenting Stakeholder to the Consenting Stakeholders’ Advisors
without the consent of any Consenting Stakeholder.

 

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15.24. No Recourse. This Agreement may only be enforced against the named
parties hereto (and then only to the extent of the specific obligations
undertaken by such parties in this Agreement). All claims or causes of action
(whether in contract, tort, equity, or any other theory) that may be based upon,
arise out of or relate to this Agreement, or the negotiation, execution, or
performance of this Agreement, may be made only against the Persons that are
expressly identified as parties hereto (and then only to the extent of the
specific obligations undertaken by such parties herein). No past, present, or
future direct or indirect director, manager, officer, employee, incorporator,
member, partner, stockholder, equity holder, trustee, affiliate, controlling
person, agent, attorney, or other representative of any party hereto (including
any person negotiating or executing this Agreement on behalf of a party hereto),
nor any past, present, or future direct or indirect director, manager, officer,
employee, incorporator, member, partner, stockholder, equity holder, trustee,
affiliate, controlling person, agent, attorney, or other representative of any
of the foregoing (other than any of the foregoing that is a party hereto) (any
such Person, a “No Recourse Party”), shall have any liability with respect to
this Agreement or with respect to any proceeding (whether in contract, tort,
equity, or any other theory that seeks to “pierce the corporate veil” or impose
liability of an entity against its owners or affiliates or otherwise) that may
arise out of or relate to this Agreement, or the negotiation, execution, or
performance of this Agreement.

[Signature Pages Follow.]

 

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

 

J.JILL, INC., a Delaware corporation By:  

/s/ Mark Webb

Name: Mark Webb Title: Chief Financial Officer JILL ACQUISITION LLC, a Delaware
limited liability company By:  

/s/ Mark Webb

Name: Mark Webb Title: Chief Financial Officer J. JILL GIFT CARD SOLUTIONS,
INC., a Florida corporation By:  

/s/ Mark Webb

Name: Mark Webb Title: Chief Financial Officer

[Signature Page to Transaction Support Agreement]

--------------------------------------------------------------------------------

CONSENTING SHAREHOLDERS

[TSA Party]

[*****]

--------------------------------------------------------------------------------

CONSENTING LENDERS

[TSA Party]

[*****]

--------------------------------------------------------------------------------

EXHIBIT A

Out-of-Court Term Sheet

--------------------------------------------------------------------------------

J. Jill

OUT-OF-COURT Term Sheet

This Term Sheet (including all schedules attached hereto, this “Term Sheet”)
contains certain material terms and conditions of a proposed financing
transaction to be consummated on an out-of-court basis (the “Transaction” and
the date on which such Transaction is consummated, the “Closing Date”) pursuant
to the terms, and subject to the conditions, set forth in that certain
Transaction Support Agreement, dated as of August 31, 2020, by and among
(i) Jill Acquisition LLC (the “Borrower”), J.Jill, Inc. (“Holdings”) and their
direct and indirect subsidiaries (collectively with the Borrower and Holdings,
the “Company Parties”), (ii) certain Existing Term Lenders (as defined below)
that are, or become, signatories to the Transaction Support Agreement
(collectively, the “Consenting Lenders”), and (iii) TowerBrook Capital Partners
L.P. (together with its affiliates that own equity interests of Holdings,
“Towerbrook” or the “Consenting Shareholders”) (including all schedules,
exhibits and other attachments thereto, and as may be amended from time to time
in accordance therewith, the “Transaction Support Agreement”). This Term Sheet
is the “Out-of-Court Term Sheet” attached to the Transaction Support Agreement
as Exhibit A. Capitalized terms used herein and not otherwise defined have the
meaning ascribed to such terms in the Existing Term Loan Agreement (as defined
below) or the Transaction Support Agreement, as applicable.

This Term Sheet is being provided in furtherance of settlement discussions and
is entitled to protection under Rule 408 of the Federal Rules of Evidence and
any similar federal or state rule of evidence.

Closing of the Transaction is subject to satisfactory completion of definitive
documentation in accordance with the terms, and subject to the conditions, of
the Transaction Support Agreement, including this Term Sheet. This Term Sheet
does not purport to summarize all of the terms, conditions, covenants and other
provisions which may be contained in definitive documentation for the
Transaction.

Reference is hereby made to: (i) that certain Term Loan Credit Agreement dated
as of May 8, 2015 (as amended, restated, amended and restated, supplemented or
otherwise modified prior to the date hereof, the “Existing Term Loan
Agreement”), by and among the Borrower, Holdings, the other Guarantors from time
to time party thereto, the Lenders from time to time party thereto (the

 

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“Existing Term Lenders”) and Jefferies Finance LLC, as Administrative Agent (in
such capacity, the “Existing Administrative Agent”) and Collateral Agent (in
such capacity, the “Existing Collateral Agent”) (such facility, the “Existing
Term Facility” and such loans under the Existing Term Facility, the “Existing
Term Loans”); and (ii) that certain ABL Credit Agreement dated as of May 8, 2015
(as amended, restated, amended and restated supplemented or otherwise modified
from time to time, the “ABL Credit Agreement”), by and among the Borrower,
Holdings, J. Jill Gift Card Solutions, Inc., the Lenders from time to time party
thereto (the “ABL Lenders”) and CIT Finance LLC, as administrative agent and
collateral agent (in such capacities, the “ABL Agent”) (such facility, the “ABL
Facility”).

For purposes of this Term Sheet, fiscal year 2019 refers to the fiscal year of
the Borrower ending on or about January 31, 2020, fiscal year 2020 refers to the
fiscal year of the Borrower ending on or about January 31, 2021, fiscal year
2021 refers to the fiscal year of the Borrower ending on or about January 31,
2022, fiscal year 2022 refers to the fiscal year of the Borrower ending on or
about January 31, 2023 and fiscal year 2023 refers to the fiscal year of the
Borrower ending on or about January 31, 2024.

 

Transaction Transaction   

Provided that the Consent Threshold has been reached by the Out-of-Court Toggle
Date (and, in each case subject to the terms and conditions set forth herein and
in the Transaction Support Agreement), the Company Parties shall consummate the
Transactions (as defined in the Transaction Support Agreement) on an
out-of-court basis as follows:

 

(i) the Borrower shall seek consents from the Required Lenders under the
Existing Term Loan Agreement to the Term Loan Amendment and Waiver (as defined
below);

 

(ii) the Borrower shall offer to repurchase 100% of the Existing Term Loans of
each Existing Term Lender for the Purchase Consideration (as defined below) (the
“Purchase Offer”);

 

(iii) the Borrower shall seek (x) consents from the ABL Required Lenders (as
defined below) to the ABL Amendment and Waiver (as defined below) and (y)
$10.0 million of additional revolving commitments from the ABL Lenders in
connection therewith (the “Additional Revolving Commitments”); and

 

(iv) Towerbrook and certain other investors (collectively, the “Junior Facility
Lenders”) shall provide to Borrower $15.0 million of new capital pursuant to and
under the Junior Facility (as defined below), the aggregate principal amount of
which may be increased in accordance with the terms hereof (the “Sponsor
Investment”).

 

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Term Loan Amendment and Waiver   

The Consenting Lenders (who comprise the “Required Lenders” under the Existing
Term Loan Agreement) shall agree to the following (the “Term Loan Amendment and
Waiver”):

 

(i) an amendment of the Existing Term Loan Agreement to (x) permit the
incurrence of, and the liens securing, the Priming Facility (as defined below)
and the Junior Facility and (y) otherwise eliminate substantially all of the
covenants and events of default in the Existing Term Loan Agreement; provided,
that no guarantors of, or collateral securing, the Existing Term Facility shall
be released;

 

(ii) an instruction to the Existing Administrative Agent and the Existing
Collateral Agent to enter into (x) the Term Loan Intercreditor Agreement,
(y) the Junior Intercreditor Agreement and (z) the A&R ABL Intercreditor
Agreement (each as defined below); and

 

(iii) a waiver of all defaults and events of default under the Existing Term
Loan Agreement (including any default resulting from failure to deliver an
unqualified audit opinion for fiscal year 2019).

Purchase Offer   

The Borrower shall make an offer to all Existing Term Lenders in accordance with
Section 2.15(e) of the Existing Term Loan Agreement to repurchase 100% of the
Existing Term Loans. On the Closing Date, each Existing Term Lender accepting
the Purchase Offer (the “Accepting Lenders”) shall receive the following
consideration (the “Purchase Consideration”):

 

(i) a dollar-for-dollar principal amount of Priming Loans (as defined below);

 

(ii) its pro rata share of the Equity Consideration (as defined below); and

 

(iii) cash in an amount equal to the accrued and unpaid interest on its Existing
Term Loans repurchased.

 

The consummation of the Purchase Offer shall be subject to the condition that
Existing Term Lenders holding at least 95.0% in aggregate principal amount of
the Existing Term Loans shall have accepted the Purchase Offer (the “Minimum
Purchase Condition”). The Minimum Purchase Condition may not be waived by the
Borrower other than with the consent of the Company Parties and the Required
Consenting Stakeholders.

 

Existing Term Loans repurchased by the Borrower pursuant to the Purchase Offer
shall be immediately cancelled and retired in accordance with
Section 2.15(e)(iii) of the Existing Term Loan Agreement.

 

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ABL Amendment and Waiver   

The Borrower shall use commercially reasonable efforts to obtain the agreement
of the Required Lenders (as defined in the ABL Credit Agreement, for purposes
hereof, the “ABL Required Lenders”) to the following (the “ABL Amendment and
Waiver”):

 

(i) an amendment to the ABL Credit Agreement to permit the Transaction,
including the Additional Revolving Commitments;

 

(ii) the provision of the Additional Revolving Commitments;

 

(iii) an instruction to the ABL Agent to enter into the Junior Intercreditor
Agreement and the A&R ABL Intercreditor Agreement; and

 

(iv) waive all then-existing defaults and events of default under the ABL Credit
Agreement.

Sponsor Investment   

The Junior Facility Lenders shall provide the Borrower with $15.0 million of new
capital pursuant to a new term loan facility, the aggregate principal amount of
which may be increased in accordance with the terms hereof (such facility, the
“Junior Facility” and such loans under the Junior Facility, the “Junior Loans”);
provided, that such Junior Facility shall:

 

•   accrue interest at a rate not to exceed LIBOR + 12.00% per annum (subject to
a 1.00% LIBOR floor), all of which shall be paid in kind and not in cash;

 

•   not have any OID or fees;

 

•   be secured by the Collateral (as defined below) on a junior basis, and
subordinated in right of payment, to the Priming Facility, the Existing Term
Facility and the ABL Facility pursuant to the Junior Intercreditor Agreement;

 

•   not be guaranteed by any affiliates of the Borrower other than the
Guarantors and shall not be secured other than by the Collateral;

 

•   have a maturity date of November 8, 2024 and not have any amortization or
sinking fund provisions; and

 

•   not have covenants or events of default that are more restrictive than the
Priming Facility.

 

In connection with providing the Junior Facility, Holdings shall issue, and the
Junior Facility Lenders shall receive, penny warrants to acquire 27% of the
fully diluted (including the Equity Consideration, but which shall not be
diluted by the Equity Consideration) shares of common stock of Holdings on the
Closing Date (the “Sponsor Investment Warrants”).

 

The Junior Intercreditor Agreement shall provide that so long as the Junior
Facility Lenders are the sole lenders under the Junior Facility (the “Specified
Junior Lenders”), one or more of the Specified Junior Lenders shall have the
right to purchase all outstanding obligations under the Priming Facility and all
outstanding obligations under the Existing Term Facility, in each case at par,
exercisable for 30 days following the

 

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acceleration (including an automatic acceleration as a result of a bankruptcy
event) of the Priming Facility or the Existing Term Facility, as applicable (the
“Purchase Right”); provided, that the Specified Junior Lenders may not exercise
the Purchase Right with respect to the Existing Term Facility unless they also
exercise such right with respect to the Priming Facility.

 

The Borrower may borrow additional amounts under the Junior Facility, (a) the
proceeds of which may be used solely for purposes of the PIK Increase Paydown
(as defined below) or in connection with the exercise of Cure Rights, as
described below, and/or (b) to incur indebtedness permitted pursuant to the
terms of the Priming Facility.

Conditions to the Consummation of the Transaction   

The closing of the Transaction shall be subject to the prior or simultaneous
satisfaction (or waiver) of customary conditions for a Transaction of this type,
including the following:

 

•   Delivery and execution by the relevant parties thereto of the ABL Amendment
and Waiver (which may or may not include Additional Revolving Commitments), the
Term Loan Amendment and Waiver, the definitive documentation governing the
Junior Facility (including the Sponsor Investment Warrants issued in connection
therewith) and the definitive documentation governing the Priming Facility,
including all documents and instruments required to create and perfect the
security interests in the Collateral, as applicable, in each case, subject to
the Documentation Principles and in form and substance acceptable to the Company
Parties and the Required Consenting Stakeholders;

 

•   The conditions to the Purchase Offer (including the Minimum Purchase
Condition) shall have been satisfied and the Accepting Lenders shall have
received the Purchase Consideration;

 

•   Delivery and execution by the relevant parties thereto of the Term Loan
Intercreditor Agreement, the Junior Intercreditor Agreement and the A&R ABL
Intercreditor Agreement, in each case, in form and substance acceptable to the
Company Parties and the Required Consenting Stakeholders;

 

•   Delivery of customary corporate documents, including certified charters and
good standing certificates;

 

•   Delivery of customary closing certificates and customary legal opinions;

 

•   Lien search results, including with respect to intellectual property, with
respect to the Issuer and Guarantors, reflecting only Permitted Liens and other
liens reasonably satisfactory to the Required Consenting Lenders;

 

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•   Accuracy of all representations and warranties;

 

•   Since February 1, 2020, there shall not have been a material adverse effect
(as defined in the Transaction Support Agreement (subject to clause (b) thereof
being modified as applicable));

 

•   The Transaction Support Agreement shall be in full force and effect and
shall not have been terminated; and

 

•   The Company Parties shall have paid all Transaction Expenses in accordance
with Section 15.20 of the Transaction Support Agreement.

Terms of the Priming Facility Borrower    Jill Acquisition LLC (the “Borrower”)
Guarantors    The guarantors of the Existing Term Facility, including Holdings,
and such other entities that may become guarantors in accordance with the terms
of the Priming Facility from time to time, subject to the terms set forth in
Schedule 1 hereof and the Documentation Principles (the “Guarantors” and,
together with the Borrower, the “Loan Parties”). Administrative Agent /
Collateral Agent    A financial institution to be selected by the Consenting
Lenders, and reasonably acceptable to the Borrower, will act as administrative
agent and collateral agent for the Priming Lenders (as defined below) with
respect to the Priming Facility (as defined below) (in such capacities, the
“Administrative Agent”) and will perform the duties customarily associated with
such roles; provided, that Wilmington Trust, National Association shall be
deemed acceptable to the Borrower. The Borrower shall pay agency fees to the
Administrative Agent in an amount to be agreed between the Borrower and the
Administrative Agent. Priming Facility   

Senior secured priming term loan facility (the “Priming Facility”) to be issued
by the Borrower and guaranteed by the Guarantors.

 

On the Closing Date, the Priming Facility will be issued to the Accepting
Lenders (upon such issuance, the “Priming Lenders”) in a single borrowing (the
“Priming Loans”) in an aggregate principal amount equal to the aggregate
principal amount of the Existing Term Loans held by the Accepting Lenders
immediately prior to the Closing Date. Priming Loans that are repaid may not be
reborrowed.

Equity Consideration; Adjustment    On the Closing Date, Holdings shall issue,
and each Accepting Lender shall receive its pro rata share (based on the
principal amount of its Existing Term Loans in proportion to the aggregate
principal amount of the Existing Term Loans of all Accepting Lenders) of shares
of common stock of Holdings (the “Equity Consideration”) with an aggregate value

 

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(on a fully-diluted basis) equal to the lesser of (based on the volume-weighted
average price of the common stock of Holdings on the Closing Date) (x)
$2.0 million and (y) 10% of the fully diluted (including the Sponsor Investment
Warrants, but which shall not be diluted by the Sponsor Investment Warrants)
shares of common stock of Holdings on the Closing Date.

 

The Priming Facility shall contain a covenant providing that if the Equity
Consideration received by Accepting Lenders on the Closing Date was less than
10% of the fully diluted shares of common stock of Holdings on the Closing Date
(for the avoidance of doubt, assuming the exercise of the Sponsor Investment
Warrants and the issuance of the Equity Consideration), then, on May 31, 2021,
the Company Parties shall, at the Company Parties’ option, either (i) repay
$5.0 million in aggregate principal amount of the Priming Loans, together with
accrued and unpaid interest thereon (such payment, the “Trigger Payment”), or
(ii) issue additional shares of common stock of Holdings to the Priming Lenders
in an amount equal to the greater of (I) (x) 10% of the fully diluted shares of
common stock of Holdings as of the Closing Date (for the avoidance of doubt,
assuming the exercise of the Sponsor Investment Warrants and the issuance of the
Equity Consideration) less (y) the percentage of the fully diluted shares of
common stock of Holdings as of the Closing Date represented by the Equity
Consideration and (II) a number of shares of common stock of Holdings with an
aggregate value (on a fully diluted basis and based on the volume-weighted
average price of the equity of Holdings based on a trailing seven-day period) of
$0.5 million at the time of such issuance; provided, that the Priming Lenders
shall not receive on such date shares of common stock of Holdings having a value
(on a fully diluted basis and based on the volume-weighted average price of the
equity of Holdings based on a trailing seven-day period) greater than
$4.75 million at the time of such issuance.

 

In each case, the equity and/or payments to be made by the Borrower in this
section shall be in an amount equal to the amounts described above multiplied by
a fraction, the numerator of which is the aggregate principal amount of Existing
Term Loans held by Accepting Lenders and the denominator of which is the total
aggregate principal amount of Existing Term Loans outstanding immediately prior
to the consummation of the Purchase Offer.

Documentation Principles    The definitive documentation for the Priming
Facility shall (a) be substantially consistent with, and reflect the terms and
conditions of, this Term Sheet (except to the extent agreed to by the Required
Parties) and (b) subject to the foregoing, be based on the form, and reflect the
terms, of the Existing Term Loan Agreement and related definitive documentation,
reflecting this Term Sheet and as otherwise modified in a manner acceptable to,
or requested by, the Required Parties (the “Documentation Principles”).

 

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Use of Proceeds    The Borrower will not receive any cash proceeds from the
Priming Loans, and the Priming Loans shall be used to repurchase the Existing
Term Loans, in accordance with Section 2.15(e) of the Existing Term Loan
Agreement, of Accepting Lenders. Maturity    May 8, 2024 Collateral   

Subject to the terms set forth in Schedule 1, the Priming Facility shall be
secured by fully perfected liens on, and security interests in, substantially
all of the property and assets of the Borrower and the Guarantors, whether now
owned or hereafter acquired, which liens shall be (a) first-priority with
respect to all “Term Loan Priority Collateral” (as defined in Initial
Intercreditor (as defined in the Existing Term Loan Agreement)) and (b) second
priority with respect to all “ABL Facility Priority Collateral” (as defined in
Initial Intercreditor (as defined in the Existing Term Loan Agreement)), in each
case, subject to the A&R ABL Intercreditor Agreement and customary exclusions
applicable to a facility of this type (the “Collateral”); provided, that the
Collateral shall include a pledge of 100% of the voting capital stock of all
foreign subsidiaries, but no action (with respect to the creation or perfection
of any such pledge) shall be required to be taken outside of the US and no
non-US security documents shall be required.

 

Pursuant to (I) a customary “silent-second” intercreditor agreement to be
entered into by (i) the Existing Administrative Agent and the Existing
Collateral Agent for the Existing Term Facility, (ii) the Administrative Agent
and the Collateral Agent for the Priming Facility and (iii) the Loan Parties
(the “Term Loan Intercreditor Agreement”), the Liens on the Collateral securing
the Priming Facility shall rank senior to the Liens on the Collateral securing
the Existing Term Facility in all respects and (II) a junior intercreditor and
subordination agreement to be entered into by (i) the Existing Administrative
Agent and the Existing Collateral Agent for the Existing Term Facility, (ii) the
Administrative Agent and the Collateral Agent for the Priming Facility,
(iii) the ABL Agent, (iv) the administrative agent and/or collateral agent for
the Junior Facility and (v) the Loan Parties (the “Junior Intercreditor
Agreement”), (x) the Liens on the Collateral securing the Priming Facility, the
ABL Facility and the Existing Term Facility shall rank senior to the Liens on
the Collateral securing the Junior Facility in all respects and (y) the
obligations under the Priming Facility, the ABL Facility and the Existing Term
Facility shall rank senior to the obligations under Junior Facility in all
respects, subject to the terms of the definitive documentation.

 

The Existing Administrative Agent, the Existing Collateral Agent, the
Administrative Agent, the Collateral Agent, the ABL Agent and the Loan Parties
shall either amend and restate the Initial Intercreditor (as defined in the
Existing Term Loan Agreement) or execute joinders thereto to effectuate the
terms hereof (the “A&R ABL Intercreditor Agreement”).

 

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Interest Rate   

Same as the Existing Term Loan (LIBOR + 5.00% (1.00% LIBOR floor)), payable in
cash.

Default interest shall be paid consistent with the Documentation Principles.

Scheduled Amortization    1.00% per annum, payable in arrears on the last day of
each fiscal quarter, commencing with the first full fiscal quarter ending after
the Closing Date (i.e., consistent with the Existing Term Loan); provided, that
prepayments from tax refunds may be applied only to the two (2) amortization
payments immediately following receipt thereof and shall otherwise be applied to
the principal payable upon maturity. Optional Prepayments    The Priming Loans
may be optionally prepaid at any time and from time to time in whole or in part
at the option of the Borrower without premium. Mandatory Prepayments   
Substantially consistent with the Existing Term Loan Agreement, subject to the
terms set forth in Schedule 1 hereof and the Documentation Principles. PIK
Payment and Rate Increase   

On August 30, 2021 (the “PIK Increase Date”) (which date may be extended with
the consent of Priming Lenders holding at least two-thirds (2/3) in aggregate
principal amount of the Priming Loans), (i) the interest rate on the Priming
Loans shall be increased by 5.00%, which such additional interest shall be
payable in kind (the “Additional PIK Interest”), and (ii) the Borrower shall
make a payment to the Priming Lenders on a pro rata basis in an amount equal to
7.50% of the Priming Loans, payable in kind by increasing the aggregate
principal amount of the Priming Loans (the “PIK Payment”).

 

Notwithstanding the foregoing, the Borrower shall have the option to reduce the
amount of the Additional PIK Interest and the PIK Payment by making: (i) a
voluntary prepayment of Priming Loans at par in an aggregate principal amount of
not less than $15.0 million and (ii) up to two additional voluntary prepayments
of the Priming Loans at par of an aggregate principal amount not less than
$5.0 million each, in each case, on the PIK Increase Date (the foregoing clauses
(i) and (ii) the “PIK Increase Paydown” and the aggregate amount thereof, the
“Paydown Amount”). If the Borrower makes a PIK Increase Paydown on the PIK
Increase Date, the Additional PIK Interest and the PIK Payment shall be adjusted
as set forth below based on the aggregate Paydown Amount as of the calendar day
immediately prior to the PIK Increase Date.

 

   

Paydown Amount

  

PIK Payment

  

Additional PIK Interest

 

$15.0 million or more, but less than

$20.0 million

   5.00% of the aggregate principal amount of the Priming Loans on the date
thereof    2.00% per annum, payable in kind  

$20.0 million or more, but less than

$25.0 million

   2.00% of the aggregate principal amount of the Priming Loans on the date
thereof    1.00% per annum, payable in kind   $25.0 million    None    None

 

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To the extent that the proceeds of refunds of federal or state income taxes
received by the Loan Parties following the Closing Date with respect to the 2020
taxable year (such tax refunds “Post-Closing Refunds”) and prior to the PIK
Increase Date total less than $25.0 million, the Borrower shall have the right
to borrow additional amounts under the Junior Facility in an amount equal to the
difference between (x) $25.0 million and (y) the actual amount of Post-Closing
Refunds received by the Company prior to the PIK Increase Date, solely for the
purpose of making the PIK Increase Paydown.

 

If, prior to January 31, 2022, the Loan Parties receive Post-Closing Refunds in
an aggregate amount for all such Post-Closing Refunds received from time to time
exceeding $25.0 million (such amount in excess thereof, the “Additional Shared
Tax Proceeds”), the Borrower shall, promptly (and no later than seven
(7) business days) after receipt thereof, repay an aggregate principal amount of
Priming Loans equal to 50% of the Additional Shared Tax Proceeds (up to a total
payment in respect of the Additional Shared Tax Proceeds not to exceed
$2.5 million in aggregate principal amount). For the avoidance of doubt, no
amount shall be due and payable to the Priming Lenders in respect of
Post-Closing Refunds received by the Loan Parties in excess of $30.0 million.

Representations and Warranties    Substantially consistent with the Existing
Term Loan Agreement, subject to the Documentation Principles. Affirmative
Covenants    Substantially consistent with the Existing Term Loan Agreement,
subject to the Documentation Principles; provided, that (i) the Borrower shall
provide to the Administrative Agent for distribution to the private-side Priming
Lenders all written reports required to be delivered to the agent and/or lenders
under the ABL Facility (including all related to the borrowing base thereunder),
(ii) (x) the Borrower shall not be required to deliver annual financial
statements for fiscal year 2019 or fiscal year 2020 with an audit opinion that
is not subject to a “going concern” qualification, (y) with respect to fiscal
year 2021, the Borrower shall not deliver an audit opinion subject to a “going
concern” qualification, unless such qualification relates solely to the Minimum
Liquidity Covenant and (z) for fiscal year 2022 and thereafter, the Borrower
shall not deliver an audit opinion subject to a “going concern” qualification
for any reason, and (iii) the Loan Parties shall use their reasonable best
efforts to seek any Post-Closing Refunds to which any of the Loan Parties may be
entitled as soon as possible, including by filing Form 1139 in order to expedite
the receipt thereof. For the avoidance of doubt, all ABL Reports shall only be
posted to the “private-side information” portion of any lender platform.

 

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Negative Covenants   

Substantially consistent with the Existing Term Loan Agreement, subject to the
terms of Schedule 1 hereof and the Documentation Principles; provided, that:

 

•   the Borrower shall not repay any principal of the remaining Existing Term
Loan, except on or after the date that is five (5) business days prior to the
stated maturity thereof, and so long as (a) no Default or Event of Default shall
have occurred and be continuing under the Priming Facility and (b) the Borrower
(i) is in compliance with the Minimum Liquidity Covenant (as defined below) on a
pro forma basis immediately following and (ii) reasonably expects to be in pro
forma compliance with the Minimum Liquidity Covenant for the calendar month
immediately succeeding such payment (based on reasonable projections of the
Borrower delivered to the Priming Lenders), in each case, as certified by a
responsible officer of the Borrower to the Priming Lenders prior to such
payment;

 

•   the Borrower shall not make any prepayments of the Junior Facility or make
amendments to the terms of the Junior Facility that are adverse to the Priming
Lenders;

 

•   the Borrower may not borrow additional amounts under the Junior Facility,
except (a) as described above in connection with a PIK Increase Paydown or below
with respect to the Cure Right and/or (b) to incur indebtedness permitted
pursuant to the terms of the Priming Facility; and

 

•   the Company shall not consent to (or consent to any amendment to the ABL
Credit Facility that would permit) the purchase by Towerbrook (or its affiliates
or co-investors) of any loans or commitments under (i) the ABL Credit Facility
or (ii) the Existing Term Facility, except pursuant to the Purchase Right. For
the avoidance of doubt, the Priming Facility will permit assignments to
affiliates of the Borrower in a manner consistent with the Existing Term Loan
Facility.

Financial Covenants   

First Lien Leverage Ratio: The Borrower shall not permit the First Lien Net
Leverage Ratio (such ratio being tested net of the Leverage Covenant Cash
Netting Amount) to exceed:

 

•   for the fourth fiscal quarter of fiscal year 2021 and the first fiscal
quarter of fiscal year 2022, 5.00x;

 

•   for the second, third and fourth fiscal quarters of fiscal year 2022, 4.50x

 

•   for the first fiscal quarter of fiscal year 2023, 3.75x; and

 

•   thereafter, 3.50x;

 

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provided, that the Borrower shall deliver a compliance certificate for the
fourth fiscal quarter of fiscal year 2021, on or before April 30, 2022, subject
to a three (3) day grace period.

 

The First Lien Leverage Ratio covenant shall be subject to customary cure rights
(the “Leverage Covenant Cure Right”) (including, without limitation, being
limited to no more than three (3) cures total and no more than two (2) in any
four-quarter period); provided that such Leverage Covenant Cure Right may take
the form of either (x) a common equity investment made for not less than the
fair market value of the common equity on the date of the exercise of the
Leverage Covenant Cure Right (determined based on the seven-day volume weighted
average price of such common equity) or (y) an incremental Junior Facility
borrowing.

 

“Leverage Covenant Cash Netting Amount” means, as of any date, the Available
Cash Netting Amount not to exceed an amount equal to the aggregate principal
amount of loans outstanding under the ABL Facility as of such date plus
$25.0 million

 

“Available Cash Netting Amount” means, as of any date, (x) unrestricted cash and
Cash Equivalents of the Loan Parties subject to a Lien securing the obligations
under the Priming Facility on such date minus (y) an amount (not less than zero)
equal to Post-Closing Refunds received by the Loan Parties up to $30.0 million
less the aggregate principal amount of Priming Loans repaid as a PIK Increase
Paydown or as a result of Additional Shared Tax Proceeds; provided, that such
amount shall be reduced by an amount equal to two times the aggregate principal
amount of Priming Loans repaid from Additional Shared Tax Proceeds.

 

Minimum Liquidity Covenant: The Borrower shall not permit Liquidity to be less
than the Minimum Liquidity Amount, tested weekly; provided, that (x) prior to
the Trigger Payment, any default of such covenant shall not mature into an event
of default unless such test is failed for two weeks in any consecutive four-week
period, (y) following the Trigger Payment, any default of such covenant shall
immediately mature into an event of default and (z) the Minimum Liquidity
Covenant may be cured no more than four (4) times total; provided, further, that
any cure of the Minimum Liquidity Covenant shall be in an amount not less than
$3.0 million, regardless of any shortfall thereof.

 

“Available Liquidity Cash Amount” means, as of any date, (x) unrestricted cash
and Cash Equivalents of the Loan Parties subject to a Lien securing the
obligations under the Priming Facility on such date minus (y) the Excluded
Liquidity Cash Amount.

 

“Excluded Liquidity Cash Amount” means, as of any date of determination, an
amount (not less than zero) equal to:

 

(a) as of such date, Post-Closing Refunds received by the Loan Parties up to
$30.0 million less the aggregate principal amount of Priming Loans repaid as a
PIK Increase Paydown or as a result of Additional Shared Tax Proceeds; provided,
that such amount shall be reduced by an amount equal to two times the aggregate
principal amount of Priming Loans repaid from Additional Shared Tax Proceeds,
plus

 

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(b) cash proceeds from any, direct or indirect, incurrence of debt by, issuance
of equity interests (including preferred stock or disqualified capital stock or
any capital contribution) from or other investment in the Borrower or any of its
subsidiaries received at any time within the four (4) calendar weeks prior to
such date (other than any cure amounts with respect to the Minimum Liquidity
Covenant or the First Lien Leverage Ratio covenant).

 

“Liquidity” means, as of any date of determination, the sum of the Available
Liquidity Cash Amount plus Availability under and as defined in the ABL Credit
Agreement.

 

“Minimum Liquidity Amount” means (I) prior to the Trigger Payment, (x) from any
time that more than 50% of the stores of Holdings and its Subsidiaries are
required or recommended to be closed, and are so closed, by governmental
mandates due to COVID-19, COVID-20 or any similar pandemic, until two months
after the date on which no more than 5% of the stores of Holdings and its
Subsidiaries are closed (excluding any stores that have been permanently closed)
(such period, the “Temporary Store Closure Period”), $10.0 million and (y) at
all other times, $15.0 million and (II) following the Trigger Payment,
$25.0 million. During the Temporary Store Closure Period, the Borrower shall
report, on a weekly basis together with delivery of the Liquidity reporting, the
stores of Holdings and its Subsidiaries that are closed and open.

Events of Default    To be substantially consistent with the terms of the
Existing Term Loan Agreement, subject to the Documentation Principles. Financial
and Other Reporting    To be substantially consistent with the terms of the
Existing Term Loan Agreement, subject to the Documentation Principles; provided,
that the Borrower shall provide unaudited monthly financial statements to the
Administrative Agent for distribution to the Priming Lenders within 20 days
after the end of each fiscal month, commencing with the first full fiscal month
following the Closing Date. Cash Flow Reporting    The Borrower will prepare and
deliver to the Administrative Agent for distribution to the private-side Priming
Lenders (i) on or prior to the Closing Date (the “Initial Budget”) and
(ii) subsequent thereto, on the Thursday of each fiscal week occurring after the
Closing Date (the Initial Budget as updated, the “Applicable Budget”), in each
case, a 13-week budget and cash flow forecast, in a form substantially similar
to the budget delivered by Borrower to certain Existing Term Lenders prior to
the Closing Date, which shall (x) reflect, on a line-item basis, the projected
receipts and disbursements of Holdings, the Borrower and their subsidiaries
(including all necessary and required expenses that such persons expect to
incur) on a weekly basis, and (y) cover the 13-week period that commences with
the fiscal week of Borrower ending on the first Saturday occurring after the
date on which the Applicable Budget is delivered and including the subsequent
twelve (12) fiscal weeks.

 

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On Thursday of each fiscal week, commencing with the Thursday following the
first full fiscal week after the Closing Date (each such Thursday, a “Variance
Report Date”), the Borrower shall deliver to the Administrative Agent for
distribution to the private-side Priming Lenders a variance report (each, a
“Variance Report”) in form substantially similar to the variance reports
delivered by Borrower prior to the Closing Date and setting forth, in reasonable
detail, on a line-by-line basis any differences between actual receipts and
disbursements for each line item for the prior fiscal week versus projected
receipts and disbursements set forth in the Applicable Budget for each such line
item for such prior fiscal week.

Amendments and Voting    To be substantially consistent with the terms of the
Existing Term Loan Agreement, subject to the Documentation Principles. Ratings
   Within thirty (30) days after the Closing Date, the Borrower shall use
commercially reasonable efforts to obtain a rating from Moody’s and from S&P
with respect to the Priming Facility no later than thirty (30) days after the
Closing Date (but no specific rating shall be required); provided, that if no
such rating is so obtained, the Borrower shall continue to use commercially
reasonable efforts if requested by the Required Lenders. Release    Each Loan
Party (on behalf of itself and its Affiliates) for itself and for its successors
and assigns and for its past, present and future employees, agents,
representatives (other than legal representatives), officers, directors,
shareholders, and trustees shall provide a customary release to each Priming
Lender (in their capacity as such and as a Lender under the Existing Term
Facility) and each of their Affiliates, and their respective partners, members,
officers, directors, employees, trustees, advisors, agents and controlling
Persons, except with respect to intentional fraud, gross negligence or willful
misconduct. Governing Law    State of New York Counsel to the Priming Lenders   
Stroock & Stroock & Lavan LLP

 

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Schedule 1

[*****]

 

58

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EXHIBIT B

Chapter 11 Term Sheet

 

59

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J.JILL INC.

PREPACKAGED CHAPTER 11 TERM SHEET

 

 

THIS PREPACKAGED CHAPTER 11 TERM SHEET (INCLUDING ALL EXHIBITS, SCHEDULES AND
ANNEXES HERETO, AS MAY BE AMENDED, AMENDED AND RESTATED, SUPPLEMENTED OR
OTHERWISE MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS OF THE
TRANSACTION SUPPORT AGREEMENT (AS DEFINED BELOW), THIS “TERM SHEET”), WHICH IS
ATTACHED AS EXHIBIT B TO THE TRANSACTION SUPPORT AGREEMENT, DATED AS OF AUGUST
31, 2020 (AS MAY BE AMENDED, AMENDED AND RESTATED, SUPPLEMENTED OR OTHERWISE
MODIFIED FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF, THE
“TRANSACTION SUPPORT AGREEMENT”),1 PRESENTS THE PRINCIPAL TERMS OF A
COMPREHENSIVE, PREPACKAGED CHAPTER 11 RESTRUCTURING (THE “PREPACKAGED CHAPTER
11”) OF THE EXISTING DEBT AND OTHER OBLIGATIONS OF, AND THE EQUITY INTERESTS IN,
THE DEBTORS WHICH SHALL BE CONSUMMATED PURSUANT TO A PREPACKAGED PLAN OF
REORGANIZATION. THE IMPLEMENTATION OF THE TERMS OF THE PREPACKAGED CHAPTER 11 AS
REFLECTED HEREIN, AND ALL PREPACKAGED CHAPTER 11 DOCUMENTS (AS DEFINED BELOW),
ARE SUBJECT TO THE AGREEMENTS AND CONSENTS REFLECTED IN THE TRANSACTION SUPPORT
AGREEMENT.

THIS TERM SHEET DOES NOT CONSTITUTE AN OFFER OF SECURITIES OR A SOLICITATION OF
THE ACCEPTANCE OR REJECTION OF A CHAPTER 11 PLAN FOR PURPOSES OF SECTIONS 1125
AND 1126 OF THE BANKRUPTCY CODE. ANY SUCH OFFER OR SOLICITATION SHALL ONLY BE
MADE IN COMPLIANCE WITH ALL APPLICABLE SECURITIES, BANKRUPTCY AND/OR OTHER
APPLICABLE LAWS.

THIS TERM SHEET DOES NOT INCLUDE A DESCRIPTION OF ALL OF THE TERMS, CONDITIONS
AND OTHER PROVISIONS THAT ARE TO BE CONTAINED IN THE PREPACKAGED CHAPTER 11
DOCUMENTS, ALL OF WHICH REMAIN SUBJECT TO DISCUSSION AND NEGOTIATION AMONG THE
PARTIES TO THE TRANSACTION SUPPORT AGREEMENT; PROVIDED, HOWEVER, THAT ALL SUCH
TERMS, CONDITIONS AND OTHER PROVISIONS SHALL NOT, DIRECTLY OR INDIRECTLY,
CONTRADICT OR BE INCONSISTENT IN ANY MATERIAL RESPECT WITH ANY OF THE TERMS,
CONDITIONS OR PROVISIONS HEREIN.

 

1 

All defined terms shall have the meanings ascribed to them in the Transaction
Support Agreement unless otherwise defined herein.

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THIS TERM SHEET IS BEING PROVIDED AS PART OF A COMPREHENSIVE COMPROMISE AND
SETTLEMENT, EACH ELEMENT OF WHICH IS CONSIDERATION FOR THE OTHER ELEMENTS AND AN
INTEGRAL ASPECT OF THE PREPACKAGED CHAPTER 11. THIS TERM SHEET IS CONFIDENTIAL
AND SUBJECT TO FEDERAL RULE OF EVIDENCE 408. NOTHING IN THIS TERM SHEET SHALL
CONSTITUTE OR BE CONSTRUED AS AN ADMISSION OF ANY FACT OR LIABILITY, A
STIPULATION OR A WAIVER, AND EACH STATEMENT CONTAINED HEREIN IS MADE WITHOUT
PREJUDICE SOLELY FOR SETTLEMENT PURPOSES, WITH A FULL RESERVATION AS TO ANY
RIGHTS, REMEDIES OR DEFENSES OF THE PARTIES TO THE TRANSACTION SUPPORT
AGREEMENT.

 

MATERIAL TERMS OF THE PREPACKAGED CHAPTER 11 PROCESS Overview; Claims and
Interests   

This Term Sheet contemplates the restructuring of the assets and liabilities of
the Debtors pursuant to the Plan, which is to be confirmed by the Bankruptcy
Court through a prepackaged chapter 11 process.

The Claims and Interests to be treated under the Plan include, among other
Claims and Interests, the following:

 

(a)   approximately $32.0 million outstanding principal amount of revolving
loans, plus accrued and unpaid interest, fees, costs and other amounts that may
be due and payable under that certain ABL Credit Agreement dated as of May 8,
2015 (as amended, restated, amended and restated supplemented, or otherwise
modified from time to time in accordance with the terms thereof, the “ABL Credit
Agreement”), by and among J.Jill, Inc. (as successor to Jill Holdings LLC), as
Parent, Jill Acquisition LLC, as Company, certain subsidiaries of Jill
Acquisition LLC from time to time party thereto, the lenders party thereto (the
“ABL Lenders”) and CIT Finance LLC, as administrative agent and collateral agent
(the “ABL Agent”);

 

(b)   approximately $236.2 million outstanding principal amount of term loans,
plus accrued and unpaid interest, fees, costs and other amounts that may be due
and payable under that certain Term Loan Credit Agreement dated as of May 8,
2015 (as amended, restated, amended and restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof, the “Existing
Term Loan Agreement”), by and among Jill Acquisition LLC, J.Jill Inc. (as
successor to Jill Holdings LLC), the other guarantors from time to time party
thereto, the lenders from time to time party thereto (the “Existing Term
Lenders”) and Jefferies Finance LLC, as administrative agent and collateral
agent (in such capacity, the “Existing Agent”); and

 

(c)   the equity interests in J.Jill, Inc. (the “J.Jill Equity Interests”).

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DIP Facility   

The Debtors shall obtain a senior secured superpriority debtor-in-possession
delayed draw term loan credit facility in an aggregate principal amount not to
exceed $175,000,000 (the “DIP Facility Loans” and such facility, the “DIP
Facility”), which shall consist of (i) up to $75,000,000 of new money DIP
Facility Loans (the “DIP New Money Loans”) and (ii) up to $100,000,000 of
Existing Term Loans “rolled” into DIP Facility Loans. The DIP New Money Loans
shall be backstopped by certain Existing Term Lenders (the “Backstop Parties”)
and participation in the DIP Facility shall be available to all Existing Term
Lenders that executed and delivered the Transaction Support Agreement prior to
the Petition Date. The terms and conditions of the DIP Facility shall be
consistent in all material respects with the terms and conditions set forth on
Exhibit 1 attached hereto (the “DIP Term Sheet”) and otherwise in form and
substance reasonably acceptable to the Required Parties and the DIP Agent.

 

The lenders under the DIP Facility shall be referred to herein as the “DIP
Lenders” and the administrative agent and collateral agent for the DIP Facility
shall be referred to herein as the “DIP Agent”.

DEBT AND EQUITY SECURITIES AND OBLIGATIONS TO BE ISSUED UNDER THE PLAN New ABL
Facility   

On the Plan Effective Date, the Debtors shall enter into a new revolving credit
facility (the “New ABL Facility”) with aggregate commitments of up to
$50.0 million, which shall be used (a) to fund payments to be made under the
Plan (including the repayment in full of the loans outstanding under the ABL
Credit Agreement) and (b) to fund working capital needs of the Debtors after the
Plan Effective Date.

 

The terms and conditions of the New ABL Facility shall be in form and substance
reasonably acceptable to the Required Parties and the agent for the New ABL
Facility. The New ABL Facility shall be secured by fully perfected (a) first
priority liens on, and security interests in, all “ABL Facility Priority
Collateral” (as defined in Initial Intercreditor (as defined in the ABL Credit
Agreement)) and (b) second priority liens on, and security interests in, all
“Term Loan Priority Collateral” (as defined in Initial Intercreditor), in each
case, subject to the Intercreditor Agreement (as defined below) and customary
exclusions applicable to a facility of this type.

New First Lien Term Loan Facility    On the Plan Effective Date, the Debtors
shall enter into a new first lien term loan credit facility (the “New First Lien
Term Loan Facility”) pursuant to which new first lien term loans (the “New First
Lien Term Loans” and, together with all other Obligations relating to the New
First Lien Term Loans under the New First Lien Term Loan Facility, the “New
First Lien Term Loan Obligations”) in an aggregate original principal amount
equal to (x) the aggregate outstanding principal amount of the DIP Facility on
the Plan Effective Date less (y) the DIP Paydown Amount (as defined below). On
the Plan Effective Date, each holder of DIP Facility Obligations shall receive
its pro rata share of the New First Lien Term Loans, as set forth below in the
“Classified Claims and Interests” section of this Term Sheet. No actual funding
shall occur on the Plan Effective Date in respect of the New First Lien Term
Loans.

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   The terms and conditions of the New First Lien Term Loan Facility shall be
consistent in all material respects with the terms and conditions set forth on
Exhibit 2 attached hereto (the “New First Lien Term Loan Term Sheet”) and
otherwise in form and substance reasonably acceptable to the Required Parties
and the agent for the New First Lien Term Loan Facility. Intercreditor
Arrangements    On the Plan Effective Date, the New ABL Facility and the New
First Lien Term Loan Facility shall be subject to an intercreditor and
subordination arrangement (the “Intercreditor Agreement”) substantially similar
to the Initial Intercreditor (as defined in the Existing Term Loan Agreement) to
achieve the lien priorities set forth herein with respect to the applicable
collateral, and otherwise reasonably acceptable to the Required Parties and the
applicable agent(s) for such facilities. New Common Stock    On the Plan
Effective Date, J.Jill Inc. shall issue new common stock (the “New Common
Stock”), which New Common Stock shall be deemed validly issued, fully paid and
non-assessable. CLASSIFICATION AND TREATMENT OF CLAIMS Unclassified Claims DIP
Claims   

Treatment. On the Plan Effective Date, each holder of an allowed Claim under the
DIP Facility (collectively, the “DIP Facility Claims”) shall receive its pro
rata share of (i) cash, in an aggregate amount equal to the cash on the Debtors’
balance sheet as of the Plan Effective Date in excess of an amount to be agreed
(the “DIP Paydown Amount”), (ii) cash, in an amount equal to the accrued and
unpaid interest on the DIP Facility as of the Plan Effective Date, (iii) New
First Lien Term Loans and (iv) the Exit Equity Payment (as defined in the DIP
Term Sheet) (subject to dilution by the Equity Incentive Plan (as defined
below)).

 

Voting. Not classified; non-voting.

Administrative Claims   

Treatment. Except to the extent that a holder of an allowed administrative claim
(collectively, the “Administrative Claims”) and the Debtors, with the consent of
the Required Parties, agree in writing to less favorable treatment for such
Administrative Claim, such holder shall receive payment in full, in cash, of the
unpaid portion of its allowed Administrative Claim on the Plan Effective Date or
as soon thereafter as reasonably practicable (or, if payment is not then due, on
the due date of such allowed Administrative Claim).

 

Administrative Claims shall include, among other things: (a) claims against the
Debtors arising under section 503(b) of the Bankruptcy Code; (b) allowed claims
for reasonable fees and expenses of professionals retained in the Chapter 11
Cases with the approval of the Bankruptcy Court; and (c) all Transaction
Expenses in accordance with the terms and conditions of the Transaction Support
Agreement.

 

Voting. Not classified; non-voting.

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Priority Tax Claims   

Treatment. All allowed claims against the Debtors under section 507(a)(8) of the
Bankruptcy Code (collectively, the “Priority Tax Claims”) shall be treated in
accordance with section 1129(a)(9)(C) of the Bankruptcy Code.

 

Voting. Not classified; non-voting.

Classified Claims and Interests Other Priority Claims   

Treatment. Except to the extent that a holder of an allowed claim described in
section 507(a) of the Bankruptcy Code, other than a Priority Tax Claim
(collectively, the “Other Priority Claims”) and the Debtors, with the consent of
the Required Parties, agree in writing to less favorable treatment for such
Other Priority Claim, such holder shall receive payment in full, in cash, of the
unpaid portion of its allowed Other Priority Claim on the Plan Effective Date or
as soon thereafter as reasonably practicable (or, if payment is not then due, on
the due date of such Other Priority Claim).

 

Voting. Unimpaired. Each holder of an Other Priority Claim shall be conclusively
deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy
Code. Therefore, each holder of an allowed Other Priority Claim will not be
entitled to vote to accept or reject the Plan.

Other Secured Claims   

Treatment. Except to the extent that a holder of an allowed secured claim, other
than an ABL Facility Claim (as defined below), Existing Term Loan Claim (as
defined below) or DIP Facility Claim (collectively, the “Other Secured Claims”),
and the Debtors, with the consent of the Required Parties, agree in writing to
less favorable treatment for such Other Secured Claim, such holder shall receive
either (i) payment in full, in cash, of the unpaid portion of its allowed Other
Secured Claim or (ii) a transfer by conveyance, assignment or otherwise of the
Debtors’ right, title and interest in and to the collateral securing such Claim,
in either case on the Plan Effective Date or as soon thereafter as reasonably
practicable (or, if payment is not then due, on the due date of such Other
Secured Claim).

 

Voting. Unimpaired. Each holder of an allowed Other Secured Claim shall be
conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the
Bankruptcy Code. Therefore, each holder of an allowed Other Secured Claim will
not be entitled to vote to accept or reject the Plan.

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ABL Facility Claims   

Treatment. On the Plan Effective Date, each holder of an allowed Claim under the
ABL Credit Agreement (collectively, the “ABL Facility Claims”) shall either
receive payment in full, in cash, of the unpaid portion of its allowed ABL
Facility Claim or shall roll its ABL Facility Claims into the New ABL Facility.

 

Voting. Unimpaired. Each holder of an allowed ABL Facility Claim shall be
conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the
Bankruptcy Code. Therefore, each holder of an allowed ABL Facility Claim will
not be entitled to vote to accept or reject the Plan.

Existing Term Loan Claims   

Treatment. On the Plan Effective Date, each holder of an allowed Claim arising
under the Existing Term Loan Agreement (collectively, the “Existing Term Loan
Claims”) shall receive its pro rata share of 70% of the New Common Stock
(subject to dilution by the Equity Incentive Plan).

 

Voting. Impaired. Each holder of an allowed Existing Term Loan Claim will be
entitled to vote to accept or reject the Plan.

General Unsecured Claims   

Treatment. On the Plan Effective Date or as soon thereafter as reasonably
practicable, each holder of any allowed unsecured claim against any of the
Debtors that is not (a) an Administrative Claim, (b) a Priority Tax Claim,
(c) an Other Priority Claim, (d) an Intercompany Claim, or (e) a Section 510(b)
Claim (as defined below) (collectively, the “General Unsecured Claims”), shall
either (x) be reinstated or (y) receive, payment in full, in cash, of such
holder’s allowed General Unsecured Claim.

 

Voting. Unimpaired. Each holder of an allowed General Unsecured Claim shall be
conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the
Bankruptcy Code. Therefore, each holder of a General Unsecured Claim will not be
entitled to vote to accept or reject the Plan.

Intercompany Claims

  

Treatment. On the Plan Effective Date, each claim held by a Debtor against
another Debtor (collectively, “Intercompany Claims”) shall either be:
(a) reinstated as of the Plan Effective Date for tax purposes or (b) cancelled,
in which case no distribution shall be made on account of such claim, in each
case as determined by the Debtors with the consent of the Required Consenting
Lenders.

 

Voting. Each holder of an Intercompany Claim either shall be conclusively deemed
to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code or
conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the
Bankruptcy Code. Therefore, each holder of an Intercompany Claim will not be
entitled to vote to accept or reject the Plan.

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Section 510(b) Claims   

Treatment. Holders of any claim subject to subordination under section 510(b) of
the Bankruptcy Code (collectively, “Section 510(b) Claims”) shall receive no
recovery or distribution under the Plan.

 

Voting. Impaired. Each holder of a Section 510(b) Claim shall be conclusively
deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy
Code. Therefore, each holder of a Section 510(b) Claim will not be entitled to
vote to accept or reject the Plan.

Intercompany Interests   

Treatment. On the Plan Effective Date, all equity interests held by a Debtor in
another Debtor (each, an “Intercompany Interest”) shall either be (a) reinstated
as of the Plan Effective Date or (b) cancelled, in which case no distribution
shall be made on account of such interest, in each case as determined by the
Debtors with the consent of the Required Consenting Lenders.

 

Voting. Each holder of an Intercompany Interest either shall be conclusively
deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy
Code or conclusively deemed to have rejected the Plan pursuant to section
1126(g) of the Bankruptcy Code. Therefore, each holder of an Intercompany
Interest will not be entitled to vote to accept or reject the Plan.

J.Jill Equity Interests   

Treatment. Each holder of a J.Jill Equity Interest shall receive no distribution
on account of its J.Jill Equity Interest.

 

Voting. Impaired. Each holder of a J.Jill Equity Interest shall be conclusively
deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy
Code. Therefore, each holder of a J.Jill Equity Interest will not be entitled to
vote to accept or reject the Plan.

GENERAL PROVISIONS Equity Incentive Plan    After the Plan Effective Date, the
New Board (as defined below) may adopt an equity incentive plan (the “Equity
Incentive Plan”) that provides for the issuance of options and/or other
equity-based awards (collectively, “EIP Awards”) exercisable for up to 10.0% of
the New Common Stock, on a fully diluted basis, to management of the Debtors
after the Plan Effective Date. The form of the EIP Awards, the participants in
the Equity Incentive Plan, the allocations of the EIP Awards to such
participants (including the amount of allocations and the timing of the grant of
the EIP Awards), and the terms and conditions of the EIP Awards (including
vesting, exercise prices, base values, hurdles, forfeiture, repurchase rights
and transferability) shall be determined by the New Board in its sole
discretion.

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KERP    The Company Parties may adopt a key employee retention plan (the “KERP”)
that provides for awards (collectively, “KERP Awards”) to certain employees of
the Company Parties. The form of the KERP Awards, the participants in the KERP,
the allocations of the KERP Awards to such participants (including the amount of
allocations and the timing of the grant of the KERP Awards), and the terms and
conditions of the KERP Awards (including vesting, exercise prices, base values,
hurdles, forfeiture, repurchase rights and transferability) shall be determined
by the Company Parties; provided that any participant in the KERP must have a
minimum of six (6) months of employment post-Plan Effective Date in order for
the KERP Award to vest. The KERP shall include a compensation program for the
Chapter 11 Case process. The terms and provisions of the KERP shall be
acceptable to the Required Consenting Lenders in their sole discretion.
Cancellation of Instruments, Certificates and Other Documents    On the Plan
Effective Date, except to the extent otherwise provided above, all instruments,
certificates, and other documents evidencing indebtedness or debt securities of,
or Equity Interests in, any of the Debtors shall be cancelled, and the
obligations of the Debtors thereunder, or in any way related thereto, shall be
discharged. Executory Contracts and Unexpired Leases    Except as otherwise set
forth herein, [*****] executory contracts and unexpired leases shall be assumed
or rejected (as the case may be), as determined by the Debtors, and with the
consent of the Required Parties, during the pendency of the Chapter 11 Cases.
Avoidance Actions    All claims or causes of action pursuant to chapter 5 of the
Bankruptcy Code to avoid a transfer of property or an obligation incurred by the
Debtors shall be released by the Debtors pursuant to the Plan. Capital Structure
  

On the Plan Effective Date, the debt and equity capital structure of the Debtors
shall be consistent in all material respects with the capital structure of the
Debtors as set forth in this Term Sheet and the Transaction Support Agreement,
unless otherwise agreed to by the Required Parties.

 

The New Common Stock shall not be listed for trading on a securities exchange,
and none of the Debtors shall be required to file reports with the United States
Securities and Exchange Commission unless it is required to do so pursuant to
the Exchange Act.

COMPANY GOVERNANCE/ORGANIZATIONAL DOCUMENTS PROVISIONS/RELEASES New Board    The
board of directors of J.Jill Inc. immediately after the Plan Effective Date (the
“New Board”) shall be determined by the Required Consenting Lenders. The New
Board may, from time to time, establish one or more committees of the New Board,
to exercise the powers and authority of the New Board.

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New Organizational Documents   

The new organizational documents of each of the Debtors shall be consistent in
all material respects with the terms and conditions set forth herein and shall
be otherwise in form and substance reasonably acceptable to the Required
Consenting Lenders (such new organizational documents, collectively, the “New
Organizational Documents”).

 

On the Plan Effective Date, the holders of the New Common Stock shall enter into
a customary stockholders agreement.

Exemption from SEC Registration    The issuance of all securities under the Plan
will be exempt from registration under section 1145 of the Bankruptcy Code to
the extent permitted pursuant to section 1145 of the Bankruptcy Code.
Debtor/Third Party Releases    The Plan shall contain the In-Court Release
which, for the avoidance of doubt, shall exclude the Consenting Shareholders in
the event that the Transaction Support Agreement is terminated with respect to
the Consenting Shareholders. Exculpation    Customary exculpation provisions.
Discharge    Customary discharge provisions. Injunction    Customary injunction
provisions. Tax Structure    To the extent reasonably practicable, the
Prepackaged Chapter 11 shall be structured in a manner reasonably acceptable to
the Required Parties, which minimizes any current cash taxes payable as a result
of the consummation of the Plan, and the terms of the Prepackaged Chapter 11
contemplated by this Term Sheet shall be reasonably acceptable to the Required
Parties and structured to maximize the favorable tax attributes (including tax
basis) of the Debtors going forward. PLAN IMPLEMENTATION Conditions Precedent to
the Plan Effective Date   

The Plan shall contain the following conditions precedent to the Plan Effective
Date:

(a)   the Plan and all other Prepackaged Chapter 11 Documents shall be in form
and substance consistent in all material respects with this Term Sheet and
otherwise reasonably acceptable to the Required Parties;

 

(b)   the Bankruptcy Court shall have entered an order confirming the Plan in
form and substance consistent in all material respects with this Term Sheet and
otherwise reasonably acceptable to the Required Parties, and such order shall
not have been stayed or modified or vacated on appeal;

 

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(c)   the Transaction Support Agreement shall not have been validly terminated
as to all parties thereto;

 

(d)   the Debtors shall not be in default of the DIP Facility or the orders
approving the DIP Facility;

 

(e)   all Transaction Expenses shall have been paid in full, in cash, in
accordance with the Transaction Support Agreement and the Plan;

 

(f)   the New Common Stock shall have been issued, and the Backstop Parties (as
defined in the DIP Term Sheet) shall have received the Put Option Equity
Payment;

 

(g)   each of the New ABL Facility and the New First Lien Term Loan Facility
shall have closed; and

 

(h)   there shall be no ruling, judgment or order issued by any Governmental
Entity making illegal, enjoining, or otherwise preventing or prohibiting the
consummation of the Prepackaged Chapter 11.

 

The conditions precedent to the Plan Effective Date may not be waived without
the written consent of the Required Parties.

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EXHIBIT 1

DIP TERM SHEET

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DIP Term Sheet

Capitalized terms used but not otherwise defined in this DIP Term Sheet (this
“DIP Term Sheet”) shall have the meanings assigned thereto in the Prepackaged
Chapter 11 Term Sheet (the “Chapter 11 Term Sheet”) to which this DIP Term Sheet
is attached as Exhibit 1.

 

Borrower:    Jill Acquisition LLC (the “Borrower”), in its capacity as a debtor
and debtor-in-possession in the Chapter 11 Cases (as defined in the Transaction
Support Agreement). Guarantors:    J. Jill, Inc. (“Holdings”) and each
subsidiary of Holdings (other than the Borrower) that is a Debtor (as defined in
the Transaction Support Agreement) in the Chapter 11 Cases (the “Guarantors”
and, together with the Borrower, the “Loan Parties”). DIP Agent:    A financial
institution selected by the Required DIP Lenders (as defined below) and
reasonably acceptable to the Borrower shall act as the administrative agent and
collateral agent under the DIP Facility (as defined below) (the “DIP Agent”) and
will perform the duties customarily associated with such roles. The Borrower
shall pay agency fees to the DIP Agent in an amount to be agreed between the
Borrower and the DIP Agent. DIP Commitment:   

Prior to the Petition Date (as defined in the Transaction Support Agreement),
certain Consenting Lenders (as defined in the Transaction Support Agreement)
(the “Initial DIP Commitment Parties”) shall enter into a commitment letter (the
“Commitment Letter”) with the Borrower providing commitments for 100% of the DIP
New Money Loans (as defined below).

 

This DIP Term Sheet does not represent a commitment to provide financing. Such
commitment will be set forth in the definitive loan documents (including the
Commitment Letter) signed by the Initial DIP Commitment Parties and, as
applicable, the DIP Lenders. Such Commitment Letter shall reflect the terms of
this DIP Term Sheet, and shall otherwise be in form and substance acceptable to
the Initial DIP Commitment Parties.

DIP Lenders:    The lenders under the DIP Facility (each a “DIP Lender”, and,
collectively, the “DIP Lenders”) as of the Closing Date (as defined below) shall
be (x) the Initial DIP Commitment Parties and (y) one or more other Consenting
Lenders (as defined in the Transaction Support Agreement) (and/or one or more of
their respective designated affiliates and/or related funds or accounts) who
elect to participate in the DIP Facility through a syndication process (the “DIP
Syndication”) to be conducted prior to the Petition Date. Each Consenting Lender
(and/or one or more of their respective designated affiliates and/or related
funds or accounts) may elect to subscribe for commitments to provide DIP New
Money Loans in the DIP Syndication on a pro rata basis based on the aggregate
principal amount of the term loans under the Existing Term Loan Agreement (the
“Existing Term Loans”) held by such Consenting Lender as compared to the
aggregate principal amount of Existing Term Loans held by all Consenting
Lenders.

 

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Required DIP Lenders:    DIP Lenders holding at least a majority of the
aggregate outstanding principal amount of the DIP Loans and commitments in
respect thereof (the “Required DIP Lenders”). Type and Amount of the DIP
Facility:   

A senior secured superpriority debtor-in-possession delayed draw term loan
credit facility in an aggregate principal amount not to exceed $175,000,000 (the
“DIP Facility Loans” and such facility, the “DIP Facility”), which shall consist
of (i) $75,000,000 of new money DIP Facility Loans (the “DIP New Money Loans”)
and (ii) upon entry of the Final Order (as defined below), $100,000,000 of
Existing Term Loans held by DIP Lenders to be “rolled” up on a pro rata basis
into DIP Facility Loans on a cashless, dollar-for-dollar basis. The commitments
to make the DIP Loans are referred to herein as the “DIP Commitments”.

 

The DIP New Money Loans shall (subject to the DIP Orders (as defined below) and
the borrowing conditions set forth in Exhibit A attached hereto) be incurred in
amounts and at times to be agreed.

Once repaid or prepaid, no portion of the DIP Loans may be reborrowed.

Use of Proceeds:   

Subject to the applicable DIP Orders and the other DIP Loan Documents (as
defined below), proceeds of the DIP New Money Loans will be used only for the
following purposes and in each case in accordance with the Approved DIP Budget
(as defined below): (a) to repay an aggregate principal amount of loans
outstanding under the ABL Credit Agreement (together with accrued and unpaid
interest thereon and an amount required to cash collateralize any letters of
credit issued thereunder) in an amount not to exceed an amount to be agreed;
(b) to pay interest, fees, costs and expenses related to the DIP Facility
(including the fees, costs, disbursements and expenses of the DIP Agent and its
counsel, financial advisors, consultants and other professionals (collectively,
the “DIP Agent Advisors”)); (c) to pay the fees, costs and expenses of the
estate professionals retained in the Chapter 11 Cases and approved by the
Bankruptcy Court; (d) to fund the Carve Out (as defined in Exhibit B attached
hereto); (e) to pay the fees, costs, disbursements and expenses of the DIP
Lenders (including the fees and expenses of Stroock & Stroock & Lavan LLP
(“Stroock”), as counsel to certain DIP Lenders, Guggenheim Securities, LLC
(“Guggenheim”), as financial advisor to certain DIP Lenders, and such other
consultants, local counsel, financial advisors and other professionals as
reasonably required by the Required DIP Lenders (together with Stroock and
Guggenheim, collectively, the “DIP Lender Advisors”)); (f) to make all permitted
payments of costs of administration of the Chapter 11 Cases; (g) to pay such
prepetition expenses as are consented to by the Required DIP Lenders and
approved by the Bankruptcy Court; (h) to satisfy any adequate protection
obligations owing under the DIP Orders, as set forth below; (i) to make any
other payments permitted by the Approved DIP Budget; and (j) for general
corporate and working capital purposes of the Debtors during the Chapter 11
Cases.

 

For the avoidance of doubt and notwithstanding anything to the contrary herein,
no proceeds of any DIP New Money Loans shall be used to investigate, challenge,
object to or contest the validity, security, perfection, priority, extent or
enforceability of any amount due under, or the liens or claims granted under or
in connection with the DIP Facility or the Existing Term Loan Agreement;
provided that the creditors’ committee, if any, may use up to $35,000 of the
proceeds in respect of the foregoing.

 

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Closing Date:    The date which shall be no later than one (1) business days
after the date of entry by the Bankruptcy Court (as defined in the Chapter 11
Term Sheet) of the Interim Order (as defined below) (the “Interim Order Entry
Date”), subject to satisfaction (or waiver) of the applicable conditions
precedent set forth in Exhibit A (the “Closing Date”). Maturity:   

All commitments under the DIP Facility will terminate, and all DIP Obligations
(as defined below) will be immediately due and payable in full in cash, on the
earliest of:

 

(a)   three (3) calendar months following the Closing Date;

 

(b)   the date that is fourteen (14) calendar days after the Petition Date if
the Final Order has not been entered by the Bankruptcy Court on or before such
date;

 

(c)   the date of consummation of any sale of all or substantially all of the
assets of any of the Debtors pursuant to section 363 of the Bankruptcy Code;

 

(d)   the date of acceleration of the DIP Loans and the termination of the
commitments under the DIP Facility following the occurrence of an Event of
Default (as defined below); and

 

(e)   the substantial consummation or effective date of the Plan or any chapter
11 plan;

 

provided, that on the Plan Effective Date, each holder of a Superpriority DIP
Claim shall receive its pro rata share of (i) cash in an aggregate amount equal
to the DIP Paydown Amount (as defined in the Chapter 11 Term Sheet), (ii) cash,
in an amount equal to the accrued and unpaid interest on the DIP Facility as of
the Plan Effective Date, (iii) New First Lien Term Loans (as defined in the
Chapter 11 Term Sheet) in an amount equal to the aggregate principal amount of
the DIP Obligations less the DIP Paydown Amount, and (iv) the Exit Equity
Payment (as defined below).

Amortization:    None. Interest:   

At all times prior to the occurrence of an Event of Default, interest on the DIP
Loans shall accrue at a rate per annum equal (x) to LIBOR plus 9.50% (subject to
a 1.50% LIBOR Floor) or (y) a base rate plus 8.50% (subject to a 2.50% base rate
floor), in each case, payable in cash, monthly in arrears (the “Interest Rate”).

 

All interest shall be computed on the basis of a 360-day year consisting of
twelve (12) 30-day months.

 

Upon the occurrence and during the continuance of an Event of Default, interest
on the DIP Loans shall accrue at the applicable Interest Rate plus 2.00% per
annum and shall be payable solely in cash, on demand.

 

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Upfront Payment:    The DIP Lenders shall receive from the Debtors a
non-refundable payment (the “Upfront Payment”), payable in cash, in an aggregate
amount of 2.50% of the aggregate principal amount of the commitments in respect
of the DIP New Money Loans. The Upfront Payment shall be earned, due, owing and
payable in full on the Closing Date, shared by the DIP Lenders ratably. Exit
Equity Payment:    The DIP Lenders shall receive from the Debtors a
non-refundable payment (the “Exit Equity Payment”) of 20.00% of the New Common
Stock (as defined in the Chapter 11 Plan Term Sheet) (subject to dilution solely
by the Equity Incentive Plan (as defined in the Chapter 11 Plan Term Sheet)).
The Exit Equity Payment shall be fully earned on the Closing Date, and shall be
due, owing and payable in full on the Plan Effective Date, and shared by the DIP
Lenders ratably. Backstop Payments:   

The Initial DIP Commitment Parties shall receive from the Debtors a
nonrefundable backstop payment (the “Cash Backstop Option Payment”) in an
aggregate amount of 5.00% of the aggregate principal amount of the DIP New Money
Loans, payable in cash. The Cash Backstop Option Payment shall be earned, due,
owing and payable in full on the Closing Date, shared by Initial DIP Commitment
Parties ratably.

 

The Initial DIP Commitment Parties shall further receive from the Debtors a
nonrefundable backstop payment (the “Equity Backstop Option Payment”) in an
aggregate amount of 10.00% of the New Common Stock (subject to dilution solely
by the Equity Incentive Plan). The Equity Backstop Option Payment shall be fully
earned on the Closing Date and shall be due, owing and payable in full on the
Plan Effective Date, shared by Initial DIP Commitment Parties ratably.

 

The DIP New Term Loans funded by the Initial DIP Commitment Parties shall be
funded with an original issue discount equal to 2.00 % of the aggregate
principal amount of the commitments in respect of the DIP New Money Loans.

Documentation:    The DIP Facility (including the terms and conditions
applicable thereto) will be documented pursuant to and evidenced by (a) a credit
agreement, negotiated in good faith, in form and substance substantially similar
to the Existing Term Loan Agreement, with such modifications as are (i) set
forth herein, (ii) necessary to reflect the terms of the Interim Order or the
Final Order, as applicable, (iii) usual and customary for debtor-in-possession
financings of this kind and/or otherwise necessary or desirable to effectuate
the financing contemplated hereby and/or to reflect the capital structure and
operational requirements of the Debtors and the existence and continuance of the
Chapter 11 Cases (including customary representations and warranties, covenants
and events of default for debtor-in-possession financings of this kind) and
(iv) reasonably required by the Required DIP Lenders (in consultation with the
DIP Lenders, except the DIP Lenders shall have a consent right with respect to
any proposed modification to the voting provisions, pro rata sharing provisions
or payment waterfall and other customary “sacred” lender rights) (the “DIP
Credit Agreement”), (b) an order (in form and substance acceptable to the
Required DIP Lenders and the DIP Agent in their sole discretion) entered by the
Bankruptcy Court approving the DIP Facility on an interim basis (the “Interim
Order”), (c) an order (in form and substance acceptable to the Required DIP
Lenders and the DIP Agent in their sole discretion) entered by the Bankruptcy
Court approving the DIP Facility on a final basis (the “Final Order”, and
together with the Interim Order, the “DIP Orders”) and (d) as applicable, the
related

 

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   notes, security agreements, collateral agreements, pledge agreements, control
agreements, guarantees, mortgages and other legal documentation or instruments
as are, in each case, usual and customary for debtor-in-possession financings of
this type and/or reasonably necessary or desirable to effectuate the financing
contemplated hereby (including such agreements, documents and instruments
constituting “Credit Documents” under, and as defined in, the Existing Term Loan
Agreement) (all of the foregoing, together with the DIP Credit Agreement and the
DIP Orders, collectively, the “DIP Loan Documents”). The foregoing shall be
collectively referred to herein as the “Documentation Principles”. Financial &
Other Reporting:    The DIP Credit Agreement will contain customary testing of
13-week cash flow budgets on receipts and disbursements for transactions of this
type, consistent with the Documentation Principles and reasonably acceptable to
the Required DIP Lenders Voluntary Prepayments:    The DIP Loans may not be
prepaid, in whole or in part, at any time prior to the Maturity Date or the
acceleration of the DIP Loans, except as set forth in the section entitled
“Maturity” or with the consent of the Requisite DIP Lenders. Mandatory
Prepayments:    The DIP Credit Agreement will contain customary mandatory
prepayments for transactions of this type, consistent with the Documentation
Principles and reasonably acceptable to the Required DIP Lenders. Collateral:   

All obligations of the Borrower and the Guarantors to the DIP Agent and the DIP
Lenders under the DIP Facility, including, without limitation, all principal and
accrued interest, premiums (if any), costs, fees, expenses, disbursements,
reimbursement obligations, indemnities and any and all other amounts due or
payable under the DIP Facility (collectively, the “DIP Obligations”), shall be
secured (subject to the Carve Out) by continuing, valid, binding, enforceable,
non-avoidable, and automatically and fully and properly perfected liens and
security interests (such liens and securing interests securing the DIP
Obligations, collectively, the “DIP Liens”) in all DIP Collateral (as defined
below) on the following basis:

 

(a)   pursuant to Bankruptcy Code §364(c)(2), the DIP Liens shall have
first-priority with respect to all DIP Collateral that is not subject to another
valid, perfected, enforceable and non-avoidable lien or security interest as of
the Petition Date (such DIP Collateral, the “Unencumbered Assets”); and

 

(b)   pursuant to Bankruptcy Code §364(c)(3) and §364(d)(1), the DIP Liens on
all DIP Collateral other than Unencumbered Assets shall rank:

 

(x) junior only to valid, unavoidable and enforceable liens or security
interests on such DIP Collateral existing on the Petition Date (other than a
lien securing the Existing Term Loans) which are (A) fully and properly
perfected as of the Petition Date to the extent required by Bankruptcy Code
§546(b) or (B) perfected subsequent to the Petition Date, in the manner and to
the extent permitted by Bankruptcy Code §546(b), in each case, solely to the
extent that such liens and security interests are permitted to be senior to the
DIP Liens on such DIP Collateral pursuant to the DIP Orders (“Permitted Prior
Liens”); and solely with respect to any assets that are or would constitute ABL
Priority Collateral, the liens thereon securing the ABL Credit Agreement and the
adequate protection liens granted under the DIP Orders in favor of the ABL
Credit Agreement in ABL Priority Collateral (“ABL Priority Liens”); and

 

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(y) senior to any and all other liens on and security interests in such DIP
Collateral that also constitutes collateral securing the Existing Term Loan
Agreement, subject only Permitted Prior Liens and ABL Priority Liens.

 

The DIP Liens shall be effective and perfected as of the entry of the Interim
Order and without requiring the execution, filing or recording of mortgages,
security agreements, pledge agreements, control agreements, financing statements
or other agreements or instruments, or the taking of any action to obtain
possession or control of any collateral. However, the Required DIP Lenders may,
in their sole discretion, require the execution, filing or recording of any or
all of the documents described in the preceding sentence and/or the taking of
any action so that the DIP Agent obtains possession or control of any collateral
(other than ABL Priority Collateral).

 

As used herein:

 

“ABL Priority Collateral” means “ABL Facility Priority Collateral”, as such term
is defined in the Intercreditor Agreement, dated as of May 8, 2015, by and among
Holdings, the Borrower, the other grantors from time to time party thereto, CIT
Finance LLC, as ABL Facility Administrative Agent and as ABL Facility Collateral
Agent, and Jefferies Finance LLC, as Term Loan Administrative Agent and as Term
Loan Collateral Agent (each, as defined below).

 

“DIP Collateral” means all assets and properties of the Debtors (whether
tangible or intangible; whether real, personal, or mixed; whether owned by, or
owing to, the Debtors on the Petition Date, or acquired by or arising in favor
of the Debtors after the Petition Date (including under any trade names, styles,
or derivations thereof) and whether owned or consigned by or to, or leased from
or to, or thereafter acquired by, the Debtors, and regardless of where located,
before or after the Petition Date, including, without limitation, all assets
securing the ABL Credit Agreement and the Existing Term Loan Credit Agreement
and, subject to entry of the Final Order all proceeds of claims and causes of
action arising under chapter 5 of the Bankruptcy Code; provided, however, that
the DIP Collateral shall not include certain immaterial assets and certain other
customarily excluded assets (collectively, the “Excluded Assets”).

Superpriority DIP Claims:    Effective immediately upon entry of the Interim
Order, all of the claims of the DIP Agent and the DIP Lenders on account of the
DIP Obligations shall be entitled to the benefits of section 364(c)(1) and
364(e) of the Bankruptcy Code, and shall have superpriority, in each of the
Chapter 11 Cases or any successor cases, over any and all administrative
expenses of the kind that are specified in or ordered pursuant to sections 105,
326, 328, 330, 331, 364(c)(1), 365, 503(a), 503(b), 506(c), 507(a), 507(b),
546(c), 726, 1113, 1114 or any other provisions of the Bankruptcy Code (the
“Superpriority DIP Claims”), subject only to the Carve Out.

 

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   The Superpriority DIP Claims will, at all times during the period that the
DIP Loans remain outstanding and have not otherwise been indefeasibly paid in
full or rolled into the New First Lien Term Loans on the Plan Effective Date,
each as described in the section entitled “Maturity”, remain senior in priority
to all other claims or administrative expenses, subject only to the Carve Out.
The Superpriority DIP Claims shall have recourse against each of the Debtors on
a joint and several basis, and shall be payable from and have recourse to all
DIP Collateral (subject to the terms of the DIP Orders). Carve-Out:    As set
forth in Exhibit B attached hereto. Representations and Warranties:    The DIP
Credit Agreement will contain customary representations and warranties for
transactions of this type, consistent with the Documentation Principles and
reasonably acceptable to the Required DIP Lenders. Chapter 11 Cases Milestones:
  

The Debtors shall be required to comply with the following Milestones (the
“Milestones”):

 

(a)   no later than the date which is the later of (A) October 3, 2020 or
(B) one (1) business day after concluding the solicitation of votes on the Plan,
the Petition Date shall have occurred (and, for the avoidance of doubt, on such
Petition Date the Company Parties shall have filed with the Bankruptcy Court the
Plan, the Disclosure Statement and other Solicitation Materials, and a motion
scheduling a combined hearing on the Plan and Disclosure Statement and other
Solicitation Materials (each as defined in the Transaction Support Agreement));

 

(b)   within two (2) days after the Petition Date, the Bankruptcy Court shall
have entered the Interim Order;

 

(c)   within five (5) Business Days after the Petition Date, the Company Parties
shall have filed with the Bankruptcy Court the Plan Supplement (as defined in
the Transaction Support Agreement);

 

(d)   within fourteen (14) days after the Petition Date, the Confirmation Order
and all other related relief required to be obtained from the Bankruptcy Court
to implement the Restructuring Transactions through the In-Court Restructuring
shall have been entered and/or granted, as applicable, by the Bankruptcy Court;

 

(a)   within fourteen (14) days after the Petition Date, the Bankruptcy Court
shall have entered the Final Order;

 

(b)   the Plan Effective Date shall have occurred within thirty (30) calendar
days after the Petition Date (the “Outside Date”).

Affirmative Covenants:    The DIP Credit Agreement will contain customary
affirmative covenants for transactions of this type, consistent with the
Documentation Principles and reasonably acceptable to the Required DIP Lenders.

 

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Negative Covenants:    The DIP Credit Agreement will contain customary negative
covenants for transactions of this type, consistent with the Documentation
Principles and acceptable to the Required DIP Lenders. Financial Covenant:   
None. Events of Default:    The DIP Credit Agreement will contain customary
events of default for transactions of this type, consistent with the
Documentation Principles and reasonably acceptable to the Required DIP Lenders
(collectively, “Events of Default”). Adequate Protection:   

The holders of ABL Facility Claims shall receive adequate protection consisting
of (i) reporting in form and substance acceptable to the ABL Lenders,
(ii) post-petition replacement liens (senior to the DIP Liens only with respect
to DIP Collateral constituting ABL Priority Collateral and otherwise junior),
(iii) superpriority claims (senior to the Superpriority DIP Claims only with
respect to DIP Collateral constituting ABL Priority Collateral and otherwise
junior), and (iv) payment of reasonable professional fees.

 

The holders of Exiting Term Loan Claims shall receive adequate protection
consisting of (i) reporting in form and substance reasonably acceptable to the
Term Lenders, (ii) post-petition replacement liens (junior to the DIP Liens),
(iii) superpriority claims (junior to the Superpriority DIP Claims) and
(iv) payment of reasonable professional fees.

Marshalling; 552(b) Waiver and Waiver of 506(c) Claims:    The DIP Orders shall
provide that, subject to entry of the Final Order: (i) in no event shall the DIP
Agent, the DIP Lenders or the secured parties under the Existing Term Loan
Agreement be subject to the equitable doctrine of “marshaling” or any similar
doctrine with respect to the DIP Collateral, as applicable (the “Marshaling
Waivers”); provided that the Borrower shall use commercially reasonable efforts
to cause the Interim Order to include the Marshaling Waivers with respect to the
DIP Agent and the DIP Lenders, (ii) approve the waiver of all claims under
section 506(c) of the Bankruptcy Code against the DIP Agent, the DIP Lenders or
the secured parties under the Existing Term Loan Agreement (the “506(c)
Waivers”); provided that the Borrower shall use commercially reasonable efforts
to cause the Interim Order to include the 506(c) Waivers with respect to the DIP
Agent and the DIP Lenders and (iii) the secured parties under the Existing Term
Loan Agreement shall be entitled to all rights and benefits of section 552(b) of
the Bankruptcy Code, and that the “equities of the case” exception shall not
apply to such persons. Notwithstanding anything in the Transaction Support
Agreement to the contrary, the failure to include the Marshaling Waiver or the
506(c) Waiver in the Interim Order shall not trigger a termination event
pursuant to Section 13 of the Transaction Support Agreement. Conditions
Precedent:    The effectiveness of the DIP Credit Agreement and the other DIP
Loan Documents and the agreements of the Initial DIP Commitment Parties under
the Commitment Letter and of the DIP Lenders under the DIP Loan Documents, and
the closing of, and funding under, the DIP Facility shall, in each case, be
subject to satisfaction (or waiver by Required DIP Lenders) of the conditions
precedent set forth on Exhibit A.

 

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Rating:    Within thirty (30) days after the Closing Date, the Borrower shall
obtain, or shall have used commercially reasonable efforts to obtain, a rating
from Moody’s and from S&P with respect to the DIP Facility (but no specific
rating shall be required); provided, that if no such rating is obtained by such
date the Borrower shall continue to use commercially reasonable efforts to
obtain such rating if requested by the Required DIP Lenders. Governing Law:   
The Debtors submit to the exclusive jurisdiction and venue of the Bankruptcy
Court and waive any right to trial by jury. New York law shall govern the DIP
Facility. Counsel to the Required DIP Lenders:    Stroock & Stroock & Lavan LLP.

 

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EXHIBIT A

Conditions Precedent

 

1)

Conditions to Closing Date and borrowing the Initial DIP Loan on the Closing
Date.

 

  a)

DIP Loan Documents shall be in form and substance reasonably satisfactory to the
Required DIP Lenders and the DIP Agent and consistent with this DIP Term Sheet,
and all DIP Loan Documents required to be executed by the Closing Date shall
have been executed and delivered to the DIP Agent.

 

  b)

All fees, costs, disbursements and expenses of the DIP Agent, the DIP Agent
Advisors, the DIP Lenders and the DIP Lender Advisors due under the DIP Credit
Agreement shall have been paid in full in cash or shall be so paid on the
Closing Date from the proceeds of the Initial DIP Loans.

 

  c)

The DIP Agent shall have received an executed legal opinion of Kirkland & Ellis
LLP, special New York counsel to the Loan Parties.

 

  d)

The DIP Agent shall have received (i) a secretary’s (or other officer’s)
certificate of the Borrower and each of the other Loan Parties, dated as of the
Closing Date, with customary and appropriate insertions and attachments; and
(ii) a customary closing officer’s certificate of the Borrower.

 

  e)

The DIP Lenders shall have received from the Borrower and each of the Loan
Parties, at least three (3) Business Days prior to the Closing Date,
(i) documentation and other information requested by any DIP Lender a reasonable
period prior to the required delivery date that is required by regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the USA Patriot Act and (ii) if the Borrower
qualifies as a “legal entity customer” under the beneficial ownership
regulations, the DIP Lenders shall have received from the Borrower, at least one
(1) Business Day prior to the Closing Date, a beneficial ownership certification
in relation to the Borrower.

 

  f)

The Interim Order shall have been entered by the Bankruptcy Court and shall be
in full force and effect, which Interim Order shall be in full force and effect
and shall not have been reversed, vacated or stayed, and shall not have been
amended, supplemented or otherwise modified without the prior written consent of
the Required DIP Lenders.

 

  g)

The DIP Agent and the DIP Lenders shall have received the Initial DIP Budget,
which shall be in form and substance acceptable to the Required DIP Lenders
(which may be communicated via email by Guggenheim).

 

  h)

The Plan shall have been filed with the Bankruptcy Court and each other
Milestone that is required to be complied with prior to or concurrently with
entry of the Interim Order shall have been complied with.

 

  i)

The DIP Agent shall have a fully perfected lien on the DIP Collateral to the
extent required by the DIP Loan Documents and the Interim Order, having the
priorities set forth in the Interim Order.

 

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  j)

Subject to post-closing requirements, each Uniform Commercial Code financing
statement and each intellectual property security agreement required by the DIP
Loan Documents to be filed in order to create in favor of the DIP Agent a
perfected lien on the DIP Collateral having the priorities set forth in the
Orders shall have been filed.

 

  k)

Subject to post-closing requirements, the DIP Agent shall have received the
certificates, if any, representing the shares of pledged securities held by a
Loan Party pledged pursuant to the DIP Loan Documents.

 

  l)

Subject to post-closing requirements, the DIP Agent shall have been named as an
additional insured with respect to liability policies (other than worker’s
compensation policies and public liability policies) and the DIP Agent shall be
named as loss payee with respect to the property insurance (other than public
property policies) maintained by the Borrower and each other Loan Party.

 

  m)

The DIP Agent shall have received a legal, valid and binding copy of an
amendment to the Initial Intercreidtor Agreement, which shall be in form and
substance acceptable to the Required DIP Lenders.

 

  n)

The Closing Date shall have occurred on or before the date that is no later than
one (1) business day after the date of entry of the Interim Order.

 

2)

Conditions to further borrowings.

 

  a)

The Final Order shall have been entered by the Bankruptcy Court by the date that
is thirty (30) days after the Petition Date and shall be in full force and
effect, which shall be in full force and effect and shall not have been
reversed, vacated or stayed, and shall not have been amended, supplemented or
otherwise modified without the prior written consent of the Required DIP
Lenders.

 

  b)

The Confirmation Order shall have been entered by the Bankruptcy Court by the
date that is thirty (30) days after the Petition Date, or as soon as reasonably
practicable thereafter, and shall be in full force and effect.

 

3)

Conditions to each borrowing.

 

  a)

Each of the representations and warranties made by any Loan Party in or pursuant
to the DIP Loan Documents shall be true and correct in all material respects
(and in all respects if any such representation or warranty is already qualified
by materiality or material adverse effect), in each case on and as of such date
as if made on and as of such date except to the extent that such representations
and warranties relate to an earlier date, in which case such representations and
warranties shall be true and correct in all material respects (and in all
respects if any such representation or warranty is already qualified by
materiality or material adverse effect) as of such earlier date.

 

  b)

There shall be no “Default” or Event of Default under the DIP Credit Agreement.

 

  c)

The DIP Agent shall have received a copy of the Transaction Support Agreement,
duly executed and delivered by each of the parties thereto, and such Transaction
Support Agreement shall be in full force and effect and shall not have been
amended, waived or otherwise modified without the prior written consent of the
Required DIP Lenders. The Transaction Support Agreement shall be in full force
and effect, and no breach, default or event of default shall have occurred and
be continuing thereunder.

 

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  d)

All first day motions filed by the Loan Parties on the Petition Date and related
orders entered by the Bankruptcy Court in the Chapter 11 Cases shall be in form
and substance satisfactory to the Required DIP Lenders and the DIP Agent.

 

  e)

Subject to post-closing requirements, the DIP Agent shall have valid, binding,
enforceable, non-avoidable, and automatically and fully and properly perfected
liens on, and security interests in, the Collateral, in each case, having the
priorities set forth in the DIP Orders and subject only to the payment in full
in cash of any amounts due under the Carve-Out.

 

  f)

The DIP Agent shall have received a signed borrowing request from the Borrower.

 

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EXHIBIT B

Carve-Out

1. Carve Out.

(a) Carve Out. As used in this [Final/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
$[*****] 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 DIP Agent (acting at the direction of the Required DIP Lenders) or Required
DIP Lenders 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 $[*****] incurred after the first business day following delivery
by the DIP Agent (acting at the direction of the Required DIP Lenders) or
Required DIP Lenders 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 DIP Agent
(acting at the direction of the Required DIP Lenders) or Required DIP Lenders 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 an Event of Default and acceleration of the DIP
Obligations under the DIP Facility, 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 DIP Agent (acting at the direction of the Required DIP Lenders) or
Required DIP Lenders to the Debtors with a copy to counsel to the Creditors’
Committee (the “Termination Declaration Date”), the Carve Out Trigger Notice
shall (i) be deemed a draw request and notice of borrowing by the Debtors for
[Revolving/Delayed Draw Term] Loans under the [Revolving/Delayed Draw Term] Loan
Commitment (each, as defined in the [DIP Credit Agreement]) (on a pro rata basis
based on the then outstanding [Revolving/Delayed Draw Term] Loan Commitments),
in an amount equal to the then unpaid amounts of the Allowed Professional Fees
(any such amounts actually advanced shall constitute [Revolving/Delayed Draw
Term] Loans) and (ii) also 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 at the DIP Agent in trust to pay such then unpaid Allowed

 

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Professional Fees (the “Pre-Carve Out Trigger Notice Reserve”) prior to any and
all other claims. On the Termination Declaration Date, the Carve Out Trigger
Notice shall also (i) be deemed a request by the Debtors for [Revolving/Delayed
Draw Term] Loans under the [Revolving/Delayed Draw Term] Loan Commitment (on a
pro rata basis based on the then outstanding [Revolving/Delayed Draw Term] Loan
Commitments), in an amount equal to the Post-Carve Out Trigger Notice Cap (any
such amounts actually advanced shall constitute [Revolving/Delayed Draw Term]
Loans) and (ii) 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, after
funding the Pre-Carve Out Trigger Notice Reserve, to fund a reserve in an amount
equal to the Post-Carve Out Trigger Notice Cap. The Debtors shall deposit and
hold such amounts in a segregated account at the DIP Agent in trust to pay such
Allowed Professional Fees benefiting from 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. On the third business day after the DIP Agent gives such notice to such
[Revolving/Delayed Draw Term] Lenders (as defined in the DIP Credit Agreement),
notwithstanding anything in the DIP Credit Agreement to the contrary, including
with respect to the existence of a Default (as defined in the DIP Credit
Agreement) or Event of Default, the failure of the Debtors to satisfy any or all
of the conditions precedent for [Revolving/Delayed Draw Term] Loans under the
[Revolving/Delayed Draw Term] Facility, any termination of the
[Revolving/Delayed Draw Term] Loan Commitments following an Event of Default, or
the occurrence of the Maturity Date, each [Revolving/Delayed Draw Term] Lender
with an outstanding Commitment (on a pro rata basis based on the then
outstanding Commitments) shall make available to the DIP Agent such
[Revolving/Delayed Draw Term] Lender’s pro rata share with respect to such
borrowing in accordance with the [Revolving/Delayed Draw Term] Facility. 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 [DIP Agent] for the benefit of the [DIP Lenders], unless the
[DIP Obligations] have been indefeasibly paid in full, in cash, and all
Commitments have been terminated, in which case any such excess shall be paid to
the [Prepetition Secured 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 [DIP Agent] for the benefit of the [DIP
Lenders], unless the [DIP Obligations] have been indefeasibly paid in full, in
cash, and all Commitments have been terminated, in which case any such excess
shall be paid to the [Prepetition Secured Creditors] in accordance with their
rights and priorities as of the Petition Date. Notwithstanding anything to the
contrary in the [DIP Documents], or this [Final/Interim] Order, if either of the
Carve Out Reserves is not funded in full in the amounts set forth in this
paragraph [•], 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 [•], prior to making any payments
to the [DIP Agent] or the [Prepetition Secured Creditors], as applicable. For
the avoidance of doubt, notwithstanding anything to the contrary contained
herein, nothing herein shall require the [DIP Lenders] to advance or fund DIP
Loans in an aggregate amount greater than $[*****], after taking into

 

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account any DIP Loans previously advanced and any netted fees or original issue
discount or other premiums payable to the [DIP Lenders]. Notwithstanding
anything to the contrary in the [DIP Documents] or this [Final/Interim] Order,
following delivery of a Carve Out Trigger Notice, the [DIP Agent] and the
[Prepetition Secured 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
fully perfected, non-avoidable security interest in any residual interest in the
Carve Out Reserves, with any excess paid to the [DIP Agent] for application in
accordance with the [DIP Documents]. Further, notwithstanding anything to the
contrary in this [Final/Interim] Order, (i) disbursements by the Debtors from
the Carve Out Reserves shall not constitute [Loans] (as defined in the [DIP
Credit Agreement]) or increase or reduce the [DIP 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 Initial
Budget, 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 this
[Final/Interim] Order, the DIP Facility, or in any [Prepetition Secured
Facilities], the Carve Out shall be senior to all liens and claims securing the
[DIP Facility], the Adequate Protection Liens, and the 507(b) Claim, and any and
all other forms of adequate protection, liens, or claims securing the [DIP
Obligations] or the [Prepetition 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 Allowed Professional Fees shall
not reduce the Carve Out.

(d) No Direct Obligation To Pay Allowed Professional Fees. None of the [DIP
Agent], [DIP Lenders], or the [Prepetition Secured Creditors] shall be
responsible for the payment or reimbursement of any fees or disbursements of any
Professional Person incurred in connection with the Chapter 11 Cases or any
successor cases under any chapter of the Bankruptcy Code. Nothing in this
[Final/ Interim] Order or otherwise shall be construed to obligate the [DIP
Agent], the [DIP Lenders], or the [Prepetition Secured Creditors], in any way,
to pay compensation to, or to reimburse expenses of, any Professional Person or
to guarantee that the Debtors have sufficient funds to pay such compensation or
reimbursement.

(e) 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. Any funding of the Carve Out
shall be added to, and made a part of, the DIP Obligations secured by the DIP
Collateral and shall be otherwise entitled to the protections granted under this
[Final/Interim] Order, the DIP Documents, the Bankruptcy Code, and applicable
law.

(f) Objection Rights. Nothing contained herein is intended to constitute, nor
shall be construed as consent to, the allowance of any Professional Person’s
fees, costs or expenses by any party and shall not affect the rights of the [DIP
Agent], the [DIP Lenders] or the [Prepetition Secured Creditors]to object to the
allowance of any such amounts incurred or requested.

 

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EXHIBIT 2

NEW FIRST LIEN TERM LOAN TERM SHEET

 

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New First Lien Term Loan Term Sheet

Capitalized terms used but not otherwise defined in this New First Lien Term
Loan Term Sheet (this “New First Lien Term Loan Term Sheet”) shall have the
meanings assigned thereto in the Prepackaged Chapter 11 Term Sheet (the “Chapter
11 Term Sheet”) to which this New First Lien Term Loan Term Sheet is attached as
Exhibit 2.

 

Borrower:    Jill Acquisition LLC, as reorganized pursuant to the Plan (as
defined in the Transaction Support Agreement) (the “Borrower”). Guarantors:   
J.Jill, Inc., as reorganized pursuant to the Plan (“Holdings”), and all direct
and indirect domestic and foreign subsidiaries of Holdings and the Borrower,
subject to customary exclusions (the “Guarantors” and together with the
Borrower, the “Loan Parties”); provided that no actions (with respect to the
creation or perfection of any security interest) shall be required to be taken
outside of the US and no non-US security documents shall be required. Agent:   
A financial institution to be selected by the Required Lenders (as defined
below), and reasonably acceptable to the Borrower, will act as administrative
agent and collateral agent for the First Lien Lenders (as defined below) with
respect to the New First Lien Term Loan Facility (as defined below) (in such
capacities, the “First Lien Agent”) and will perform the duties customarily
associated with such roles. The Borrower shall pay agency fees to the First Lien
Agent in an amount to be agreed between the Borrower and the First Lien Agent.
First Lien Lenders:    The lenders under the New First Lien Term Loan Facility
(the “First Lien Lenders”) shall initially be the DIP Lenders as of the Plan
Effective Date (as defined in the Transaction Support Agreement) (and/or one or
more of their respective designated affiliates and/or related funds or
accounts). Type and Amount:   

A senior secured first lien term loan facility (the “New First Lien Term Loan
Facility”; and the term loans thereunder, the “New First Lien Term Loans”) in an
aggregate original principal amount equal (x) the aggregate outstanding
principal amount of the DIP Facility on the Plan Effective Date (as defined in
the Transaction Support Agreement) less (y) the DIP Paydown Amount (as defined
in the Chapter 11 Term Sheet). On the Plan Effective Date, each holder of DIP
Facility Claims shall receive its pro rata share of the New First Lien Term
Loans, as and to the extent set forth in the “Classification and Treatment of
Claims” section of the Chapter 11 Term Sheet. No actual funding shall occur on
the Plan Effective Date in respect of the New First Lien Term Loans.

Once repaid or prepaid, no portion of the New First Lien Term Loans may be
reborrowed.

Closing Date:    The Plan Effective Date, subject to satisfaction or waiver by
the Required Lenders of the conditions precedent set forth in the New First Lien
Credit Agreement (as defined below) (the “Closing Date”). Maturity:    Five
(5) years from the Closing Date.

 

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Use of Proceeds:    The New First Lien Term Loans will be issued in exchange for
DIP Facility Claims pursuant to the Plan (as defined in the Transaction Support
Agreement). Amortization:    1.00% per annum, paid quarterly, beginning with the
first full fiscal quarter ending after the Closing Date. Interest:   

At all times prior to the occurrence of an Event of Default, interest on the New
First Lien Term Loans shall accrue at a rate per annum equal (x) to LIBOR plus
8.50% (subject to a 1.50% LIBOR Floor) or (y) a base rate plus 7.50% (subject to
a 2.50% base rate floor), in each case, payable in cash, quarterly in arrears;
provided, that for the twelve fiscal months following the Closing Date, if
Liquidity is below an amount to be agreed, interest payments may be paid “in
kind” by increasing the principal amount of the New First Lien Term Loans
outstanding on the applicable payment date, subject to a minimum cash interest
payment equal to (x) in the case of LIBOR loans, LIBOR plus 1.00% and (y) in the
case of base rate loans, the base rate plus 2.00% (the “Interest Rate”).

 

For purposes hereof, (i) “Liquidity” means as of any date of determination, the
sum of Available Cash plus Availability under and as defined in the ABL Credit
Agreement; and (ii) “Available Cash” means as of any date, unrestricted cash and
cash equivalents of the Loan Parties subject to a lien securing the obligations
on such date.

 

All interest shall be computed on the basis of a 360-day year consisting of
twelve (12) 30-day months.

 

Upon the occurrence and during the continuance of an Event of Default, interest
on the New First Lien Term Loans shall accrue at the Interest Rate plus 2.00%
per annum and shall be payable solely in cash, on demand.

Exit Payment:    2.25% of the aggregate principal amount of the New First Lien
Term Loans, payable in cash on (a) the maturity date of the New First Lien Term
Loans or (b) any earlier voluntary repayment, any mandatory repayment (other
than due to amortization, excess cash flow or the receipt of tax refunds) or any
acceleration (including as a result of bankruptcy event of default) (the “Exit
Payment”). Documentation:    The New First Lien Term Loan Facility shall be
substantially consistent with Existing Term Loan Agreement and the Credit
Documents (as defined in the Existing Term Loan Agreement) (the “Existing Term
Loan Documents”), this New First Lien Term Loan Term Sheet, and such other terms
and conditions as are required by, and reasonably satisfactory to, the Required
Lenders; provided, that all terms and conditions not expressly set forth in this
New First Lien Term Loan Term Sheet shall be satisfactory to the Required
Lenders. Subject to the forgoing, the New First Lien Term Loan Facility will be
documented by (a) a credit agreement, in form and substance substantially
similar to the Existing Term Loan Agreement (with such modifications as are set
forth herein, necessary or desirable to effectuate the financing contemplated by
this New First Lien Term Loan Term Sheet or to reflect the operational
requirements and capital structure of the Loan Parties, the relative size of the
New First Lien Term Loan Facility and the business plan, and/or as otherwise
reasonably requested by the Required Lenders or the First Lien Agent, which
modifications shall, in each case, be in form and substance acceptable to
Required Lenders) (the “New First Lien Credit Agreement”) and (b) as applicable,
the related notes, security

 

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   agreements, collateral agreements, pledge agreements, control agreements,
guarantees, mortgages and other legal documentation or instruments shall be
substantially consistent with the Existing Term Loan Documents (with such
modifications as are set forth herein, necessary or desirable to effectuate the
financing contemplated by this New First Lien Term Loan Term Sheet and/or
otherwise reasonably required by the Required Lenders or the First Lien Agent
(including the Existing Term Loan Documents), in each case, in form and
substance reasonably satisfactory to the Required Lenders (together with the New
First Lien Credit Agreement, the “New First Lien Loan Documents”). The foregoing
shall collectively be referred to herein as the “Documentation Principles”.
Voluntary Prepayment:    The New First Lien Term Loans may be prepaid in whole
or in part at any time and from time to time after the Closing Date. Each
voluntary prepayment shall be accompanied by payment of all accrued and unpaid
interest thereon and the Exit Payment. Mandatory Prepayments:    The New First
Lien Credit Agreement will contain mandatory prepayment events substantially
consistent with the Existing Term Loan Agreement and others agreed to by the
Required Lenders and the Borrower, subject to the Documentation Principles;
provided, that the Borrower shall repay the New First Lien Loans with 100% of
any refunds of federal or state income taxes for the fiscal year ended
January 31, 2021. Each mandatory prepayment shall be accompanied by payment of
all accrued and unpaid interest and, if applicable, the Exit Payment.
Collateral:   

All obligations of the Borrower and the Guarantors under the New First Lien Term
Loan Facility, including, without limitation, all principal and accrued
interest, premiums, Exit Payments, costs, fees, expenses and any other amounts
due under the New First Lien Term Loan Facility (collectively, the “First Lien
Obligations”), shall be secured by continuing, valid, binding, enforceable and
perfected liens on, and security interests in (collectively, the “Liens”),
substantially all of the property and assets of the Borrower and the Guarantors,
whether now owned or hereafter acquired, which liens shall be (a) first priority
liens with respect to all “Term Loan Priority Collateral” (as defined in Initial
Intercreditor (as defined in the Existing Term Loan Agreement)) and (b) second
priority liens with respect to all “ABL Facility Priority Collateral” (as
defined in Initial Intercreditor (as defined in the Existing Term Loan
Agreement)), in each case, subject to customary exclusions applicable to
facilities of this type (the “Collateral”).

 

Notwithstanding the forgoing, the Collateral shall include pledges of 100% of
the capital stock of all Loan Parties (other than Holdings) and all first-tier
non-Loan Parties, but no action (with respect to the creation or perfection of
any such pledge) shall be required to be taken outside of the US and no non-US
security documents shall be required.

 

The priorities of the Liens on the Collateral securing the First Lien
Obligations and the New ABL Facility, and the relative rights of secured parties
under each of the New First Lien Term Loan Facility and the New ABL Facility,
shall be subject to an intercreditor agreement in form and substance reasonably
satisfactory to the Required Lenders.

 

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Representations and Warranties:    The New First Lien Loan Documents shall
contain representations and warranties usual and customary for financings of
this type and otherwise consistent with the Documentation Principles.
Affirmative Covenants:    The New First Lien Loan Documents shall contain
affirmative covenants that are usual and customary for financings of this type
and otherwise consistent with the Documentation Principles, including delivery
of unaudited monthly financial statements to the First Lien Agent for
distribution to the First Lien Lenders within 20 days after the end of each
fiscal month, commencing with the first full fiscal month following the Closing
Date, and such other heightened reporting as may be reasonably required by
Required Lenders. Negative Covenants:    The New First Lien Loan Documents shall
contain negative covenants that are usual and customary for financings of this
type and otherwise consistent with the Documentation Principles. Financial
Covenant:    To be agreed. Conditions Precedent to Closing:    The New First
Lien Credit Agreement will contain conditions precedent that are substantially
consistent with the Existing Term Loan Agreement and as otherwise determined in
accordance with the Documentation Principles. Events of Default and Remedies:   
The New First Lien Credit Agreement shall contain defaults and events of default
(each, an “Event of Default”), and remedies in respect thereof, as are usual and
customary for financings of this type and as otherwise determined in accordance
with the Documentation Principles. Required Lenders:    First Lien Lenders
holding a majority of the aggregate outstanding principal amount of commitments
in respect of the New First Lien Term Loans or, following the borrowing of New
First Lien Term Loans, the New First Lien Term Loans (the “Required Lenders”).
Rating:    Within thirty (30) days after the Closing Date, the Borrower shall
obtain, or shall have used commercially reasonable efforts to obtain, a rating
of the New First Lien Term Loan Facility from Moody’s and from S&P (but no
specific rating shall be required); provided that if no such rating is obtained
by such date, the Borrower shall continue to use commercially reasonable efforts
to obtain such rating if requested by the Required DIP Lenders. Governing Law:
   New York.

 

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EXHIBIT C

Form of Joinder

The undersigned (“Joinder Party”) hereby acknowledges that it has read and
understands the Transaction Support Agreement, dated as of August [ ], 2020 (as
amended, supplemented, amended and restated, or otherwise modified from time to
time, the “Agreement”),1 by and among the Company Parties, the Persons named
therein as “Consenting Lenders” thereunder, and the Persons named therein as
“Consenting Shareholders” thereunder.

 

1.

Agreement to be Bound. The Joinder Party hereby agrees to be bound by all of the
terms of the Agreement, a copy of which is attached hereto as Annex I (as the
same has been or may hereafter be amended, restated, supplemented or otherwise
modified from time to time in accordance with the provisions hereof). The
Joinder Party shall hereafter be deemed to be a “Consenting Lender” and a
“Party” for all purposes under the Agreement and with respect to all Company
Claims/Interests held by the Joinder Party.

 

2.

Representations and Warranties. The Joinder Party hereby makes the
representations and warranties of the Consenting Lenders set forth in Section 11
and Section 12 of the Agreement to each other Party, effective as of the date
hereof.

 

3.

Governing Law. This Joinder to the Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without regard to
any conflicts of law provisions which would require the application of the Law
of any other jurisdiction.

[Signature Page Follows.]

 

1 

Capitalized terms used but not otherwise defined herein shall having the
meanings ascribed to such terms in the Agreement.

 

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JOINDER PARTY: Date Executed: By:  

 

Name:   Title:  

Address:

E-mail address(es):

 

Aggregate Amounts Beneficially Owned or Managed on Account of:

 

Term Loans

   $        

Unsecured Notes

   $        

ABL Loans

   $        

Equity Interests

  

 

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ANNEX I TO THE JOINDER

[Attached.]

 

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Exhibit D

Release Provisions

 

94

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Defined Terms1

“Avoidance Actions” means any and all avoidance, recovery, subordination, or
other claims, actions, or remedies that may be brought by or on behalf of the
Debtors or their Estates or other authorized parties in interest under the
Bankruptcy Code or applicable non-bankruptcy law, including actions or remedies
under sections 502, 510, 542, 544, 545, 547 through 553, and 724(a) of the
Bankruptcy Code or under similar or related state or federal statutes and common
law, including fraudulent transfer laws.

“Causes of Action” means 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,
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) the right to object to or
otherwise contest Claims or Interests; (c) claims pursuant to sections 362, 510,
542, 543, 544 through 550, or 553 of the Bankruptcy Code; and (d) such claims
and defenses as fraud, mistake, duress, and usury, and any other defenses set
forth in section 558 of the Bankruptcy Code.

“Exculpated Party” means each of the following, solely in its capacity as such:
(a) the Consenting Lenders; (b) the DIP Lenders; (c) the DIP Agents; (d) the
Existing Agent; (e) the ABL Lenders, (f) the ABL Agent; (g) Towerbrook2; (h) the
Debtors; (i) the Reorganized Debtors (j) each of the Debtors’ current and former
directors, officers, managers, employees, members, principals, partners,
advisory board members, agents, advisors, attorneys, accountants, investment
bankers, consultants, representatives, and other professionals; and (k) with
respect to each of the foregoing Persons described in clauses (a) through (g),
such Person’s current and former Affiliates, partners, Subsidiaries. managers,
officers, directors, principals, members, employees, agents, managed funds or
accounts, advisors, equity holders (regardless of whether such interests are
held directly or indirectly), predecessors, successors, assigns, advisory board
members, financial advisors, investment advisors, investment committee members,
special committee members, affiliated investment funds or investment vehicles,
participants, management companies, fund advisors or managers, partners,
attorneys, accountants, investment bankers, consultants, representatives, and
other professionals, together with their respective successors and assigns, in
each case in their capacity as such.

 

1 

Capitalized terms used but not defined in this Exhibit D to the Transaction
Support Agreement shall have the meanings ascribed to them in the Plan, which
shall be in form and substance consistent with the Transaction Support Agreement
and the Term Sheet. References herein to either DIP Agent, any of the DIP
Lenders, and the DIP Facilities shall be included in the Releases only if the
Company Parties determine each such DIP Facility is necessary to the Chapter 11
Cases and each such DIP Facility is approved by the Bankruptcy Court.

2 

TowerBrook to be removed from scope Exculpation upon any of the following to
occur: (a) the Consenting Lenders terminate the Agreement (due to a breach by
the Consenting Shareholders) pursuant to Section 13.01(a), (b) the Company
Parties terminate the Agreement pursuant to Section 13.02(a) or (c) the
Consenting Shareholders terminate the Agreement for any reason pursuant to
Section 13.03.

3 

The parties agree that the failure of any estate fiduciary to be included in the
Exculpation provision as a result of a Final Order of the Bankruptcy Court shall
not constitute a Termination Event and shall not provide any party to this
Agreement with the ability to terminate the Agreement.

 

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“Released Party” means each of the following, solely in its capacity as such:
means each of: (a) the Consenting Lenders; (b) the DIP Lenders; (c) the DIP
Agents; (d) the Existing Agent; (e) the ABL Lenders, (f) the ABL Agent;
(g) TowerBrook4; (h) the Debtors; (i) each of the Debtors’ current and former
directors, officers, managers, employees, members, principals, partners,
advisory board members, agents, advisors, attorneys, accountants, investment
bankers, consultants, representatives, and other professionals; and (j) with
respect to each of the foregoing Persons described in clauses (a) through (g),
such Person’s current and former Affiliates, partners, Subsidiaries. managers,
officers, directors, principals, members, employees, agents, managed funds or
accounts, advisors, equity holders (regardless of whether such interests are
held directly or indirectly), predecessors, successors, assigns, advisory board
members, financial advisors, investment advisors, investment committee members,
special committee members, affiliated investment funds or investment vehicles,
participants, management companies, fund advisors or managers, partners,
attorneys, accountants, investment bankers, consultants, representatives, and
other professionals, together with their respective successors and assigns, in
each case in their capacity as such; provided, that any holder of a Claim or
Interest that opts out of, or objects to, the releases contained in the Plan
shall not be a “Released Party.”

“Releasing Party” means each of the following, solely in its capacity as such:
(a) the Consenting Lenders; (b) the DIP Lenders; (c) the DIP Agents; (d) the
Existing Agent; (e) the ABL Lenders, (f) the ABL Agent; (g) TowerBrook; (h) the
Debtors; (i) each of the Debtors’ current and former directors, officers,
managers, employees, members, principals, partners, advisory board members,
agents, advisors, attorneys, accountants, investment bankers, consultants,
representatives, and other professionals; and (j) with respect to each of the
foregoing Persons described in clauses (a) through (g), such Person’s current
and former Affiliates, partners, Subsidiaries, managers, officers, directors,
principals, members, employees, agents, managed funds or accounts, advisors,
equity holders (regardless of whether such interests are held directly or
indirectly), predecessors, successors, assigns, advisory board members,
financial advisors, investment advisors, investment committee members, special
committee members, affiliated investment funds or investment vehicles,
participants, management companies, fund advisors or managers, attorneys,
accountants, investment bankers, consultants, representatives, and other
professionals, together with their respective successors and assigns, in each
case in their capacity as such; (k) without limiting the foregoing, (1) each
holder of a Claim or Interest that voted to accept the Plan, (2) each holder of
a Claim or Interest that is Unimpaired under the Plan, where the applicable
Claims or Interests have been fully paid or otherwise satisfied in accordance
with the Plan, (3) holders of Claims whose vote to accept or reject this Plan
was solicited but who did not vote either to accept or to reject this Plan, and
(4) holders of Claims who voted to reject the Plan and who did not opt out of
granting the releases provided by the Plan; provided, that any holder of a Claim
or Interest that validly opts out of, or objects to, the releases contained in
the Plan shall not be a “Releasing Party.”

Releases by the Debtors

Notwithstanding anything contained in the Plan to the contrary, pursuant to
section 1123(b) of the Bankruptcy Code, in exchange for good and valuable
consideration, the adequacy of which is hereby confirmed, on and after the Plan
Effective Date, each Released Party is, and is deemed hereby to be, fully,
conclusively, absolutely, unconditionally, irrevocably, and forever released and
discharged by the Debtors, the Reorganized Debtors, their Estates, and any
person seeking to exercise the rights of the Debtors or their Estates, including
any successors to the Debtors or any

 

4 

TowerBrook to be removed from scope of Release upon any of the following to
occur: (a) the Consenting Lenders terminate the Agreement (due to a breach by
the Consenting Shareholders) pursuant to Section 13.01(a), (b) the Company
Parties terminate the Agreement pursuant to Section 13.02(a) or (c) the
Consenting Shareholders terminate the Agreement for ant reason pursuant to
Section 13.03.

 

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Estates representatives appointed or selected pursuant to section 1123(b)(3) of
the Bankruptcy Code, in each case on behalf of themselves and their respective
successors, assigns, and representatives, and any and all other Entities who may
purport to assert any Cause of Action, directly or derivatively, by, through,
for, or because of the foregoing Entities, from any and all Claims and Causes of
Action, including, among others, equity interests, obligations, debts, rights,
suits, damages, remedies, liabilities, and any derivative claims asserted or
assertable on behalf of the Debtors, whether known or unknown, foreseen or
unforeseen, matured or unmatured, existing or hereafter arising, contingent or
noncontingent, in law, equity, contract, tort or otherwise, that the Debtors,
the Reorganized Debtors, their Estates, or their Affiliates, including any
successors to the Debtors, their Affiliates, or any Estates representative
appointed or selected pursuant to section 1123(b) of the Bankruptcy Code, 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, or that any Holder of any Claim against, or Interest in,
a Debtor or other Entity could have asserted on behalf of the Debtors, based on
or relating to, or in any manner arising from, in whole or in part: (a) the
Debtors (including the capital structure, management, ownership, or operation
thereof), the business or contractual arrangement between the Debtors and any
Released Party, any Securities issued by the Debtors and the ownership thereof,
the assertion or enforcement of rights and remedies against the Debtors, the
subject matter of, or the transactions or events giving rise to, any Claim or
equity interest that is treated under the Plan, the Debtors’ in- or out-of-court
restructuring efforts, any Avoidance Actions (but excluding Avoidance Actions
brought as counterclaims or defenses to Claims asserted against the Debtors),
intercompany transactions between the Company Parties, the Term Loan Agreement,
the ABL Credit Agreement, the Chapter 11 Cases, the formulation, preparation,
dissemination, negotiation, or filing of the TSA, the Disclosure Statement, the
DIP Facility Credit Agreement, the New ABL Credit Agreement, the New First Lien
Term Loan Credit Agreement, or the Plan (including, for the avoidance of doubt,
the Plan Supplement); (b) any Restructuring Transaction, contract, instrument,
release, or other agreement or document (including any legal opinion requested
by any Entity regarding any transaction, contract, instrument, document or other
agreement contemplated by the Plan or the reliance by any Released Party on the
Plan or the Confirmation Order in lieu of such legal opinion) created or entered
into in connection with the TSA, the Disclosure Statement, the DIP Facility
Credit Agreement, the New ABL Credit Agreement, the New First Lien Term Loan
Credit Agreement, , the Plan, or the Plan Supplement, before or during the
Chapter 11 Cases; (c) the Chapter 11 Cases, the filing of the Chapter 11 Cases,
the Disclosure Statement or the Plan, the solicitation of votes with respect to
the Plan, the pursuit of Confirmation, the pursuit of Consummation, the
administration and implementation of the Plan, including the issuance or
distribution of Securities pursuant to the Plan, or the distribution of property
under the Plan or any other related agreement; or (d) any related act or
omission, transaction, agreement, event, or other occurrence related or relating
to any of the foregoing taking place on or before the Plan Effective Date,
including all Avoidance Actions or other relief obtained by the Debtors in the
Chapter 11 Cases.

Notwithstanding anything to the contrary in the foregoing, the releases set
forth above do not release (i) post Plan Effective Date obligations of any party
or Entity under the Plan, the Confirmation Order, any Restructuring Transaction,
any Definitive Document, or any other document, instrument, or agreement
(including those set forth in the Plan Supplement) executed to implement the
Plan, including the DIP Facility Credit Agreement, the New ABL Credit Agreement,
the New First Lien Term Loan Credit Agreement, or any Claim or obligation
arising under the Plan, or (ii) the rights of any Holder of Allowed Claims to
receive distributions under the Plan.

 

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Entry of the Confirmation Order shall constitute the Bankruptcy Court’s
approval, pursuant to Bankruptcy Rule 9019, of the foregoing 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 foregoing 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 Transactions and implementing the Plan; (b) a good faith
settlement and compromise of the Claims released by the foregoing Debtor
release; (c) in the best interests of the Debtors and their Estates 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 foregoing Debtor release.

Third-Party Releases by Releasing Parties

Except as otherwise expressly set forth in the Plan or the Confirmation Order,
on and after the Plan Effective Date, in exchange for good and valuable
consideration, the adequacy of which is hereby confirmed, each Released Party
is, and is deemed hereby to be, fully, conclusively, absolutely,
unconditionally, irrevocably and forever, released and discharged by each
Releasing Party, in each case on behalf of themselves and their respective
successors, assigns, and representatives, and any and all other Entities who may
purport to assert any Cause of Action, directly or derivatively, by, through,
for, or because of the foregoing Entities, from any and all Claims and Causes of
Action, whether known or unknown, foreseen or unforeseen, matured or unmatured,
existing or hereafter arising, contingent or noncontingent, in law, equity,
contract, tort, or otherwise, including any derivative claims asserted on behalf
of the Debtors, that such Entity 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, or that
any Holder of any Claim against, or Interest in, a Debtor or other Entity could
have asserted on behalf of the Debtors, based on or relating to, or in any
manner arising from, in whole or in part: (a) the Debtors (including the capital
structure, management, ownership, or operation thereof), the business or
contractual arrangement between the Debtors and any Releasing Party, any
Securities issued by the Debtors and the ownership thereof, the assertion or
enforcement of rights and remedies against the Debtors, the subject matter of,
or the transactions or events giving rise to, any Claim or equity interest that
is treated under the Plan, the Debtors’ in- or out-of-court restructuring
efforts, any Avoidance Actions (but excluding Avoidance Actions brought as
counterclaims or defenses to Claims asserted against the Debtors), intercompany
transactions between or among the Company Parties, the Term Loan Agreement, the
ABL Credit Agreement, the Chapter 11 Cases, the formulation, preparation,
dissemination, negotiation, or filing of the TSA, the Disclosure Statement, the
DIP Credit Agreement, the New ABL Credit Agreement, the New First Lien Term Loan
Credit Agreement, or the Plan (including, for the avoidance of doubt, the Plan
Supplement); (b) any Restructuring Transaction, contract, instrument, release,
or other agreement or document (including any legal opinion requested by any
Entity regarding any transaction, contract, instrument, document or other
agreement contemplated by the Plan or the reliance by any Released Party on the
Plan or the Confirmation Order in lieu of such legal opinion) created or entered
into

 

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in connection with the TSA, the Disclosure Statement, the DIP Credit Agreement,
the New ABL Credit Agreement, the New First Lien Term Loan Credit Agreement, the
Plan, or the Plan Supplement, before or during the Chapter 11 Cases; (c) the
Chapter 11 Cases, the filing of the Chapter 11 Cases, the Disclosure Statement,
or the Plan, the solicitation of votes with respect to the Plan, the pursuit of
Confirmation, the pursuit of Consummation, the administration and implementation
of the Plan, including the issuance or distribution of Securities pursuant to
the Plan, or the distribution of property under the Plan or any other related
agreement; or (d) any related act or omission, transaction, agreement, event, or
other occurrence related or relating to any of the foregoing taking place on or
before the Plan Effective Date, including all Avoidance Actions or other relief
obtained by the Debtors in the Chapter 11 Cases.

Notwithstanding anything to the contrary in the foregoing, the releases set
forth above do not release (i) any post Plan Effective Date obligations of any
party or Entity under the Plan, the Confirmation Order, any Restructuring
Transaction, or any document, instrument, any Definitive Document, or any
agreement (including those set forth in the Plan Supplement) executed to
implement the Plan, including the DIP Credit Agreement, the New ABL Credit
Agreement, the New First Lien Term Loan Credit Agreement, or any Claim or
obligation arising under the Plan, (ii) the rights of Holders of Allowed Claims
to receive distributions under the Plan or (iii) any claims or liabilities
arising out of or relating to any act or omission of a Released Party that is
determined in a final order by a court of competent jurisdiction to have
constituted actual fraud or illegal acts.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s
approval, pursuant to Bankruptcy Rule 9019, of the foregoing third-party
release, which includes by reference each of the related provisions and
definitions contained herein, and, further, shall constitute the Bankruptcy
Court’s finding that the foregoing third-party release is: (a) consensual;
(b) essential to the Confirmation of the Plan; (c) given in exchange for a
substantial contribution and for the good and valuable consideration provided by
the Released Parties that is important to the success of the Plan; (d) a good
faith settlement and compromise of the Claims released by the foregoing
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 foregoing third-party
release.

Related Party

Collectively, current and former directors, managers, officers, equity holders
(regardless of whether such interests are held directly or indirectly),
affiliated investment funds or investment vehicles, predecessors, participants,
successors, assigns, subsidiaries, affiliates, managed accounts or funds,
partners, limited partners, general partners, principals, members, management
companies, fund advisors or managers, employees, agents, advisory board members,
financial advisors, attorneys, accountants, investment bankers, consultants,
representatives, heirs, executors, and assigns, and other professionals, in each
case solely in their capacities as such, together with their respective past and
present directors, officers, shareholders, partners, members, employees, agents,
attorneys, representatives, heirs, executors and assigns, in each case solely in
their capacities as such.

 

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Exculpation

Without affecting or limiting either the Debtor Release or the Third Party
Release, and except as otherwise specifically provided in the Plan or the
Confirmation Order, no Exculpated Party shall have or incur liability for, and
each Exculpated Party shall be released and exculpated from any Claims and
Causes 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, entry into, filing, or termination of
the TSA and related prepetition transactions (including the Term Loan Agreement
and the ABL Credit Agreement), the Disclosure Statement, the Plan, the DIP
Credit Agreement, the New ABL Credit Agreement, the New First Lien Term Loan
Credit Agreement, the Plan Supplement, or any Restructuring Transaction,
contract, instrument, release or other agreement or document (including any
legal opinion requested by any Entity regarding any transaction, contract,
instrument, document or other agreement contemplated by the Plan or the reliance
by any Released Party on the Plan or the Confirmation Order in lieu of such
legal opinion), including any Definitive Document, created or entered into
before or during the Chapter 11 Cases, any preference, fraudulent transfer, or
other avoidance claim arising pursuant to chapter 5 of the Bankruptcy Code or
other applicable law, the filing of the Chapter 11 Cases, the pursuit of
Confirmation, the pursuit of Consummation, the administration and implementation
of the Plan, including the issuance or distribution of Securities 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 and other parties set forth above 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
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.

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, the Confirmation Order, or in any contract,
instrument, or other agreement or document created or entered into pursuant to
the Plan including the Definitive Documents, 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

 

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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.

Injunction

Except as otherwise expressly provided in the Plan or the Confirmation Order or
for obligations or distributions issued or required to be paid pursuant to the
Plan or the Confirmation Order, all Entities who have held, hold, or may hold
the Released Claims are permanently enjoined, from and after the Plan Effective
Date, from taking any of the following actions against, as applicable, the
Debtors, the Reorganized Debtors, the Exculpated Parties, or the Released
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 Released Claims; (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 Released Claims;
(3) creating, perfecting, or enforcing any lien or encumbrance of any kind
against such Entities or the property or the Estates of such Entities on account
of or in connection with or with respect to any Released Claims; (4) asserting
any right of setoff, subrogation, or recoupment of any kind against any
obligation due from such Entities or against the property or the Estates of such
Entities on account of or in connection with or with respect to any Released
Claims unless such holder has filed a motion requesting the right to perform
such setoff on or before the Plan Effective Date, and notwithstanding an
indication of a Claim or Interest or otherwise that such holder asserts, has, or
intends to preserve any right of setoff pursuant to applicable law or otherwise;
and (5) 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 Released
Claims released or settled pursuant to the Plan.

Upon entry of the Confirmation Order, all Holders of Claims and Interests and
their respective current and former employees, agents, officers, directors,
principals, and direct and indirect Affiliates shall be enjoined from taking any
actions to interfere with the implementation or Consummation of the Plan. Each
Holder of an Allowed Claim or Allowed Interest, as applicable, by accepting, or
being eligible to accept, distributions under or Reinstatement of such Claim or
Interest, as applicable, pursuant to the Plan, shall be deemed to have consented
to the injunction provisions set forth in the Plan.

*             *             *            *            *

 

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