Document:

ex_206504.htm

Exhibit 4.1

 

 

RIGHTS AGREEMENT

 

This Rights Agreement (the “Agreement”) is made and entered into as of October 12, 2020, by and between GIGA-TRONICS INCORPORATED, a California corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, a New York limited liability company (the “Rights Agent”).

 

WHEREAS, the Board of Directors of the Company has authorized and declared a dividend of one preferred share purchase right (a “Right”) for each Common Share (as hereinafter defined) of the Company outstanding at the Close of Business (as hereinafter defined) on October 22, 2020 (the “Record Date”), each Right representing the right to purchase one one-hundredth of a Preferred Share (as hereinafter defined), upon the terms and subject to the conditions set forth herein, and has further authorized and directed the issuance of one Right with respect to each Common Share that shall become outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date or the Expiration Date (as such terms are hereinafter defined).

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein, the parties hereto hereby agree as follows:

 

Section 1     CERTAIN DEFINITIONS. For purposes of this Agreement, the following terms have the meanings indicated:

 

“Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act, as in effect on the date hereof.

 

A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “Beneficially Own” any securities:

 

(i) that such Person or any of such Person's Affiliates or Associates beneficially owns, directly or indirectly, for purposes of Section 13(d) of the Exchange Act and Rule 13d-3 promulgated under the Exchange Act, in each case as in effect on the date hereof;

 

(ii) that such Person or any of such Person's Affiliates or Associates has the right to acquire (whether such right is exercisable immediately, or only after the passage of time, compliance with regulatory requirements, the fulfillment of a condition or otherwise) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights (other than these Rights), rights, warrants or options, or otherwise, provided, however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, securities tendered pursuant to a tender offer or exchange offer made by or on behalf of such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or exchange;

 

(iii) that such Person or any such Person's Affiliates or Associates has the right to vote, whether alone or in concert with others, pursuant to any agreement, arrangement or understanding, provided, however, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, any security if the agreement, arrangement or understanding to vote such security (A) arises solely from a revocable proxy given to such Person or any of such Person's Affiliates or Associates in response to a public proxy solicitation made pursuant to and in accordance with the applicable rules and regulations promulgated under the Exchange Act, and (B) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report);

 

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(iv) that are Beneficially Owned, directly or indirectly, by any other Person with which such Person or any of such Person's Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (other than voting pursuant to a revocable proxy as described in the proviso to clause (iii) of this definition of “Beneficial Owner”) or disposing of any securities of the Company; and

 

(v) that, on any day on or after the Distribution Date, evidence Rights that prior to such date were represented by certificates for Common Shares that such Person Beneficially Owns on such day.

 

Notwithstanding anything to the contrary in this Section l(b), a Person engaged in business as an underwriter of securities shall not be deemed to be the Beneficial Owner of, or to Beneficially Own, any securities acquired through such Person's participation in good faith in a firm commitment underwriting until the expiration of 40 days after the date of such acquisition.

 

“Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in the State of California are authorized or obligated by law or executive order to close.

 

“Close of Business” on any given date shall mean 5:00 p.m., California time, on such date; provided, however, that if such date is not a Business Day, it shall mean 5:00 p.m., California time, on the next succeeding Business Day.

 

“Closing Price” of a stock or other security on any day shall be the last sale price, regular way, per share of such stock or unit of such other security on such day or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the Nasdaq Stock Market (“NASDAQ”) or, if such stock or other security is not listed or admitted to trading on Nasdaq, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which such stock or other security is listed or admitted to trading or, if such stock or other security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported on the Over the Counter Bulletin Board (“OTCBB”) or such other system then in use or, if on any such date such stock or other security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker that makes a market in such stock or other security and that is selected by the Board of Directors of the Company.

 

“Common Share” shall mean one share of the Common Stock, no par value, of the Company, unless used with reference to a Person other than the Company, in which case it shall mean one share of each class of stock of such Person having the right to vote generally in the election of directors or, if such Person is a Subsidiary of another Person, one Common Share of the Person that ultimately controls such Person.

 

“Common Share Equivalent” shall have the meaning ascribed to it in Section 11(a)(iii) hereof.

 

“Current Market Price” per share of a stock or unit of any other security on any date shall mean the average of the daily Closing Prices of such stock or other security for the 30 consecutive Trading Days through and including the Trading Day immediately preceding the date in question; provided, however, that if any event shall have caused the Closing Price on any Trading Day during such 30-day period not to be fully comparable with the Closing Price on the date in question (or, if no Closing Price is available on the date in question, on the Trading Day immediately preceding the date in question), then each such non-comparable Closing Price so used shall be appropriately adjusted by the Board of Directors in order to make the Closing Price on each Trading Day during the period used for the determination of the Current Market Price fully comparable with the Closing Price on such date in question (or, if applicable, the immediately preceding Trading Day). “Current Market Price” per share of any stock or unit of such other security that is not publicly held or so listed or traded, and “Current Market Price” of any other property, shall mean the fair value per share of such stock or unit of such other security, or the fair value of such other property, respectively, as determined in good faith by the Board of Directors of the Company based upon such appraisals or valuation reports of such independent experts as the Board of Directors shall in good faith determine appropriate, which determination shall be described in a statement filed by the Company with the Rights Agent.

 

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“Distribution Date” shall have the meaning ascribed to it in Section 3 hereof.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Exempt Person” shall mean (i) the Company, (ii) any wholly-owned Subsidiary of the Company, and (iii) any employee benefit plan of the Company or of a Subsidiary of the Company and any Person holding Voting Shares for or pursuant to the terms of any such employee benefit plan.

 

“Exercise Price” shall have the meaning ascribed to it in Section 7(c) hereof.

 

“Expiration Date” shall mean the Close of Business on October 22, 2025.

 

“15% Ownership Date” shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the Company or a 15% Shareholder containing the facts by virtue of which a Person has become a 15% Shareholder.

 

“15% Shareholder” shall mean any Person that Beneficially Owns 15% or more of the Voting Shares of the Company then outstanding; provided, however, that the term “15% Shareholder” shall not include: (i) an Exempt Person; (ii) any Person that would not otherwise be a 15% Shareholder but for a reduction in the number of outstanding Voting Shares resulting from a stock repurchase program or other similar plan of the Company or from a self-tender offer of the Company, which plan or tender offer commenced on or after the date hereof; provided, however, that the term “15% Shareholder” shall include such Person from and after the first date upon which (A) such Person, since the date of the commencement of such plan or tender offer, shall have acquired Beneficial Ownership of, in the aggregate, a number of Voting Shares of the Company equal to 1% or more of the Voting Shares of the Company then outstanding and (B) such Person, together with all Affiliates and Associates of such Person, shall Beneficially Own 15% or more of the Voting Shares of the Company then outstanding; or (iii) any Person that would not otherwise be a 15% Shareholder but for its Beneficial Ownership of Rights. In calculating the percentage of the outstanding Voting Shares that are Beneficially Owned by a Person for purposes of this definition, Voting Shares that are Beneficially Owned by such Person shall be deemed outstanding, and Voting Shares that are not Beneficially Owned by such Person and that are subject to issuance upon the exercise or conversion of outstanding conversion rights, exchange rights, rights, warrants or options shall not be deemed outstanding. Any determination made by the Board of Directors of the Company as to whether any Person is or is not a 15% Shareholder shall be conclusive and binding upon all holders of Rights.

 

“Person” shall mean any individual, firm, partnership, corporation, limited liability company association, group (as such term is used in Rule 13d-5 promulgated under the Exchange Act as in effect on the date hereof) or other entity, and shall include any successor (by merger or otherwise) of such entity.

 

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“Preferred Share” shall mean one share of the Series A Junior Participating Preferred Stock, no par value per share, of the Company, which shall have the rights and preferences set forth in the Certificate of Determination for the Preferred Shares substantially in the form of Exhibit A hereto.

 

“Preferred Share Equivalent” shall have the meaning ascribed to it in Section 11(b) hereof.

 

“Record Date” shall have the meaning ascribed to it in the recitals hereto.

 

“Redemption Date” shall mean the date of the action of the Board of Directors of the Company authorizing and directing the redemption of the Rights pursuant to Section 23(a) hereof or the exchange of the Rights pursuant to Section 24(a) hereof.

 

“Redemption Price” shall have the meaning ascribed to it in Section 23(a) hereof.

 

“Right Certificate”, as that term is used with respect to any period prior to the Distribution Date, shall have the meaning ascribed to it in Section 3(b) hereof, and, as that term is used with respect to any period on or after the Distribution Date, shall have the meaning ascribed to it in Section 3(c) hereof.

 

“Rights Expiration Date” shall mean the Expiration Date, except if there has been a Distribution Date, then it shall mean the fifth anniversary of the Distribution Date.

 

“Section 11(a)(ii) Event” shall have the meaning ascribed to it in Section 11(a)(ii) hereof.

 

“Section 13(a) Event” shall have the meaning ascribed to it in Section 13(a) hereof.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Subsidiary” of any Person shall mean any corporation or other Person of which equity securities or equity interests representing a majority of the voting power are owned, directly or indirectly, or which is effectively controlled, by such Person.

 

“Trading Day” shall mean, as to any stock or other security, a day on which the principal national securities exchange on which such stock or other security is listed or admitted to trading is open for the transaction of business or, if such stock or other security is not listed or admitted to trading on any national securities exchange, a Business Day.

 

“Voting Share” shall mean (i) a Common Share of the Company and (ii) any other share of capital stock of the Company entitled to vote generally in the election of directors or entitled to vote together with the Common Shares in respect of any merger, consolidation, sale of all or substantially all of the Company's assets, liquidation, dissolution or winding up. References in this Agreement to a percentage or portion of the outstanding Voting Shares shall be deemed a reference to the percentage or portion of the total votes entitled to be cast by the holders of the outstanding Voting Shares.

 

Section 2     APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable.

 

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Section 3     ISSUANCE OF RIGHTS CERTIFICATES.

 

(a)     “Distribution Date” shall mean the date, after the date hereof, that is the earliest of (i) the tenth Business Day (or such later day as shall be designated by the Board of Directors of the Company) following the date of the commencement of, or the first public announcement of the intent of any Person, other than an Exempt Person, to commence a tender offer or exchange offer, the consummation of which would cause any Person to become a 15% Shareholder, (ii) the date of the first Section 11(a)(ii) Event or (iii) the date of the first Section 13(a) Event.

 

(b)     Until the Distribution Date, (i) the Rights shall be represented by certificates for Common Shares (all of which certificates for Common Shares shall be deemed to be Right Certificates) and not by separate Right Certificates, (ii) the record holder of the Common Shares represented by each of such certificates shall be the record holder of the Rights represented thereby and (iii) the Rights shall be transferable only in connection with the transfer of Common Shares. Until the earliest of the Distribution Date, the Redemption Date or the Expiration Date, the surrender for transfer of such certificates for Common Shares shall also constitute the surrender for transfer of the Rights represented thereby.

 

(c)     As soon as practicable after the Distribution Date, and after notification by the Company to the Rights Agent accompanied by a shareholder list prepared by the transfer agent of the Common Shares, the Rights Agent shall send, at the expense of the Company, by first-class, postage-prepaid mail to each record holder of Common Shares, as of the Close of Business on the Distribution Date, at the address of such holder shown on the records of the Company, a Right Certificate substantially in the form of Exhibit B hereto representing one Right for each Common Share so held. From and after the Distribution Date, the Rights shall be represented solely by such Right Certificates and may only be transferred by the transfer of such Right Certificates, and the holders of such Right Certificates, as listed in the records of the Company or any transfer agent or registrar for such Rights, shall be the record holders of such Rights.

 

(d)     Certificates for Common Shares issued at any time after the Record Date and prior to the earliest of the Distribution Date, the Redemption Date or the Expiration Date, shall have impressed on, printed on, written on or otherwise affixed to them the following legend:

 

This certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Rights Agreement dated as of October 12, 2020 by and between Giga-tronics Incorporated and American Stock Transfer & Trust Company, LLC, as Rights Agent (the “Rights Agreement”), as amended to date, the terms and conditions of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of Giga-tronics Incorporated. Under certain circumstances specified in the Rights Agreement, such Rights will be represented by separate certificates and will no longer be represented by this certificate. Under certain circumstances specified in the Rights Agreement, Rights beneficially owned by certain persons may become null and void. Giga-tronics Incorporated will mail to the record holder of this certificate a copy of the Rights Agreement without charge promptly following receipt of a written request therefor. As described in the Rights Agreement, Rights Beneficially Owned by any Person who becomes a 15% Shareholder or any Affiliate or Associate of a 15% Shareholder (as such capitalized terms are defined in the Rights Agreement) shall become null and void.

 

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(e)     Certificates for Common Shares issued at any time on or after the Distribution Date and prior to the earlier of the Redemption Date or the Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the following legend:

 

This certificate does not represent any Right issued pursuant to the terms of a Rights Agreement dated as of October 12, 2020 between Giga-tronics Incorporated and American Stock Transfer & Trust Company, LLC as Rights Agent.

 

(f)     In the event that at any time on or after the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the earlier of the Redemption Date or the Expiration Date, the Company shall issue any Common Shares pursuant to the exercise of conversion rights, exchange rights, rights (other than Rights), warrants or options that shall have been issued or granted prior to the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event, then, unless the Board of Directors of the Company shall have provided otherwise at the time of the issuance or grant of such conversion rights, exchange rights, rights (other than Rights), warrants or options, the Rights Agent shall, as soon as practicable after the Rights Agent receives notice thereof accompanied by a shareholders list, the Rights Agent shall send by first-class, postage-prepaid mail to the record holder of such Common Shares, at the address of such holder as shown on the records of the Company, a Right Certificate substantially in the form of Exhibit B hereto representing one Right for each Common Share so issued.

 

(g)     Notwithstanding the foregoing provisions of this Section 3, the Rights Agent shall not send any Right Certificate to any Person identified by the Company as being a 15% Shareholder or an Affiliate or Associate of a 15% Shareholder or to any Person if the Rights held by such Person are identified by the Company as being Beneficially Owned by a 15% Shareholder or any of its Affiliates or Associates. Any determination made by the Board of Directors of the Company as to whether any Common Shares are or were Beneficially Owned at any time by a 15% Shareholder or an Affiliate or Associate of a 15% Shareholder shall be conclusive and binding upon all holders of Rights.

 

Section 4     FORM OF RIGHT CERTIFICATES. The Right Certificates and the form of assignment, including certificate, and the form of election to purchase, including certificate, printed on the reverse thereof, when, as and if issued, shall be substantially in the form of Exhibit B hereto, and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement (which legends, summaries or endorsements shall not affect the duties or responsibilities of the Rights Agent hereunder), or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange upon which the Rights or the securities of the Company issuable upon exercise of the Rights may from time to time be listed, or to conform to usage. Subject to Section 22 hereof, Right Certificates, whenever issued, that are issued in respect of Common Shares that were issued and outstanding as of the Close of Business on the Distribution Date, shall be dated as of the Distribution Date.

 

Section 5     COUNTERSIGNATURE AND REGISTRATION.

 

(a)     The Right Certificates shall be executed on behalf of the Company by the Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer or President or any Vice President, either manually or by facsimile signature, and may have affixed thereto the Company's seal or a facsimile thereof attested by its Secretary or any Assistant Secretary, either manually or by facsimile signature. The Right Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates may nevertheless be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the Person who signed such Right Certificates had not ceased to be such officer of the Company. Any Right Certificate may be signed on behalf of the Company by any Person who at the actual date of such execution shall be a proper officer of the Company to sign such Right Certificate, even though such Person was not such an officer at the date of the execution of this Agreement.

 

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(b)     Following the Distribution Date and receipt by the Rights Agent of the notice and shareholders list referred to in Section 3(c) hereof, the Rights Agent shall keep or cause to be kept at its offices designated pursuant to Section 26 hereof books for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of Right Certificates, the number of Rights represented on its face by each Right Certificate and the date of each Right Certificate.

 

Section 6     TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.

 

(a)     Subject to the provisions of Sections 6(c), 7(d) and 14 hereof, at any time after the Close of Business on the Distribution Date, and so long as the Rights represented thereby remain outstanding, any one or more Right Certificates may be transferred, split-up, combined or exchanged for one or more Right Certificates representing the same aggregate number of Rights as the Right Certificates surrendered. Any registered holder desiring to transfer, split up, combine or exchange one or more Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificates to be transferred, split up, combined or exchanged at the office of the Rights Agent with the form of assignment, including certificate, on the reverse side thereof completed and duly executed, with signature guaranteed. Thereupon, the Rights Agent shall countersign and deliver to the Person entitled thereto one or more Right Certificates, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates and the Rights Agent shall have no duty or obligation under this Section 6(a) unless and until it is satisfied that any such sum has been paid.

 

(b)     Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them and, at the Company's request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of such Right Certificate if mutilated, the Company shall issue and deliver to the Rights Agent for delivery to the record holder of such Right Certificate a new Right Certificate of like tenor in lieu of such lost, stolen, destroyed or mutilated Right Certificate.

 

(c)     Notwithstanding anything to the contrary in this Section 6, the Rights Agent shall not countersign and deliver a Right Certificate to any Person if such Right Certificate represents, or would represent when held by such Person, Rights that had become or would become null and void pursuant to Section 7(d) hereof.

 

Section 7     EXERCISE OF RIGHTS.

 

(a)     Until the Distribution Date, no Right may be exercised.

 

(b)     Subject to Section 7(d) and (g) hereof and the other provisions of this Agreement, at any time after the Close of Business on the Distribution Date and prior to the Close of Business on the earlier of the Redemption Date or the Rights Expiration Date, the registered holder of any Right Certificate may exercise the Rights represented thereby in whole or in part upon surrender of such Right Certificate, with the form of election to purchase, including certificate, on the reverse side thereof completed and duly executed, with signature guaranteed, to the Rights Agent at the office of the Rights Agent at American Stock Transfer & Trust Company, 6201 15th Avenue, Brooklyn, New York 11219, together with payment of the Exercise Price for each Right exercised. Upon the exercise of an exercisable Right and payment of the Exercise Price in accordance with the provisions of this Agreement, the holder of such Right shall be entitled to receive, subject to adjustment as provided herein, one one-hundredth of a Preferred Share (or, following the occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares and/or other securities).

 

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(c)     The “Exercise Price” for the exercise of each Right shall initially be $15.00 and shall be payable in lawful money of the United States of America in accordance with Section 7(f) hereof. The Exercise Price and the number of Preferred Shares (or, following the occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares and/or other securities) to be acquired upon exercise of a Right shall be subject to adjustment from time to time as provided in Sections 7(e), 11 and 13 hereof and the other provisions of this Agreement.

 

(d)     Notwithstanding anything in this Agreement to the contrary, from and after the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event, any Rights that are or were Beneficially Owned by a 15% Shareholder or any Affiliate or Associate of a 15% Shareholder at any time on or after the Distribution Date shall be null and void, and for all purposes of this Agreement such Rights shall thereafter be deemed not to be outstanding, and any holder of such Rights (whether or not such holder is a 15% Shareholder or an Affiliate or Associate of a 15% Shareholder) shall thereafter have no right to exercise such Rights.

 

(e)     Prior to the Distribution Date, if the Board of Directors of the Company shall have determined that such action adequately protects the interests of the holders of Rights, the Company may, in its discretion, substitute for all or any portion of the Preferred Shares that would otherwise be issuable (after the Close of Business on the Distribution Date) upon the exercise of each Right and payment of the Exercise Price (i) cash, (ii) other equity securities of the Company, (iii) debt securities of the Company, (iv) other property or (v) any combination of the foregoing, in each case having an aggregate Current Market Price equal to the aggregate Current Market Price of the Preferred Shares for which substitution is made. Subject to Section 7(d) hereof, in the event that the Company takes any action pursuant to this Section 7(e), such action shall apply uniformly to all outstanding Rights.

 

(f)     Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase, including certificate, completed and duly executed, with signature guaranteed, accompanied by payment of the Exercise Price for each Right to be exercised and an amount equal to any applicable tax or governmental charge required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof by certified check or cashier's check payable to the order of the Company, the Rights Agent shall thereupon promptly (i) requisition from the transfer agent of the Preferred Shares (or, following the occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares and/or securities) certificates for the number of Preferred Shares (or such other securities) to be purchased, and the Company hereby irrevocably authorizes such transfer agent to comply with all such requests, and/or, as provided in Section 14 hereof, requisition from the depositary agent described therein depositary receipts representing such number of one-hundredths of a Preferred Share (or such other securities) as are to be purchased (in which case certificates for the Preferred Shares (or such other securities) represented by such receipts shall be deposited by the transfer agent with such depositary agent) and the Company hereby directs such depositary agent to comply with such request, (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional Preferred Shares (or such other securities) in accordance with Section 14 hereof, (iii) after receipt of such certificates, depositary receipts or cash, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder and (iv) when appropriate, after receipt thereof, deliver such cash to or upon the order of the registered holder of such Right Certificate.

 

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(g)     Notwithstanding the foregoing provisions of this Section 7, the exercisability of the Rights shall be suspended for such period as shall reasonably be necessary for the Company to register and qualify under the Securities Act and any applicable securities law of any jurisdiction the Preferred Shares to be issued pursuant to the exercise of the Rights; provided, however, that nothing contained in this Section 7 shall relieve the Company of its obligations under Section 9(c) hereof.

 

(h)     In case the registered holder of any Right Certificate shall exercise less than all of the Rights represented thereby, a new Right Certificate representing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to such holder's duly authorized assigns, subject to the provisions of Sections 6 and 14 hereof.

 

Section 8     CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all canceled Right Certificates to the Company or shall, at the written request of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.

 

Section 9     RESERVATION AND AVAILABILITY OF CAPITAL STOCK.

 

(a)     Subject to Sections 7(e) and 9(f) hereof, the Company shall cause to be reserved and kept available out of its authorized and unissued equity securities (or out of its authorized and issued equity securities held in its treasury), the number of such equity securities that will from time to time be sufficient to permit the exercise in full of all outstanding Rights.

 

(b)     In the event that any securities issuable upon exercise of the Rights are listed on any national securities exchange, the Company shall use its best efforts, from and after such time as the Rights become exercisable, to cause all such securities issued or reserved for such issuance to be listed on such exchange upon official notice of issuance upon such exercise.

 

(c)     If necessary to permit the issuance of securities upon exercise of the Rights, the Company shall use its best efforts, from and after the Distribution Date, to register and qualify such securities under the Securities Act, the Exchange Act and any other applicable securities laws and to keep such registration effective until the earlier of the Redemption Date or the Expiration Date.

 

(d)     The Company shall take all such action as may be necessary to ensure that all securities delivered upon exercise of the Rights shall, at the time of delivery of the certificates for such securities (subject to payment of the Exercise Price), be duly and validly authorized and issued and fully paid and nonassessable securities.

 

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(e)     The Company shall pay when due and payable any and all taxes and charges that may be payable in respect of the issuance or delivery of the Right Certificates or of any securities upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax or charge that may be payable in respect of any transfer or delivery of a Right Certificate to a Person other than, or the issuance or delivery of a certificate for securities in respect of a name other than that of, the registered holder of the Right Certificate representing Rights surrendered for exercise, or to issue or deliver any certificate for securities upon the exercise of any Right until any such tax shall have been paid (any such tax being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company's satisfaction that no such tax is due.

 

(f)      With respect to the Common Shares and/or other securities issuable pursuant to Section 11(a)(ii) and (iii) hereof, the foregoing covenants shall be applicable only upon and following the occurrence of a Section 11(a)(ii) Event.

 

Section 10   SECURITIES RECORD DATE. Each Person in whose name any certificate for securities of the Company is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the securities represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate representing such Rights was duly surrendered and payment of the Exercise Price (and any transfer taxes or charges) was made; provided, however, that if the date of such surrender and payment is a date upon which the securities transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such securities on, and such certificate shall be dated, the next succeeding Business Day on which the securities transfer books of the Company are open.

 

Section 11   ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES ISSUABLE UPON EXERCISE OF RIGHTS OR NUMBER OF RIGHTS. The Exercise Price, the number and kind of securities that may be purchased upon exercise of a Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

 

(a)        (i) In the event that the Company shall at any time after the Close of Business on the Record Date and prior to the Close of Business on the earlier of the Redemption Date or the Expiration Date (A) declare or pay any dividend on the Preferred Shares payable in Preferred Shares or Voting Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue Preferred Shares or other securities of the Company (other than those for which an adjustment is required under Section 11(b) hereof) in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) or in a reorganization of the Company, then, and upon each such event, the number and kind of Preferred Shares or other securities issuable upon the exercise of a Right on the date of such event shall be proportionately adjusted so that the holder of any Right exercised on or after such date shall be entitled to receive, upon the exercise thereof and payment of the Exercise Price, the aggregate number and kind of Preferred Shares or other securities or other property, as the case may be, that, if such Right had been exercised immediately prior to such date and at a time when such Right was exercisable and the transfer books of the Company were open, such holder would have owned upon such exercise and would have been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.

 

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(ii)     In the event that a 15% Ownership Date shall have occurred and neither the Redemption Date nor the Expiration Date shall have occurred prior to the tenth Business Day following such 15% Ownership Date (a “Section 11(a)(ii) Event”), then, and upon each such Section 11(a)(ii) Event, proper provision shall be made so that, except as provided in Section 7(d) hereof, each holder of a Right shall thereafter have the right to receive, upon the exercise thereof in accordance with the terms of this Agreement and payment of the then current Exercise Price, such number of Common Shares of the Company as shall equal the result obtained by (A) multiplying the then current Exercise Price by the then number of one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such Section 11(a)(ii) Event (or, if the Distribution Date shall not have occurred prior to the date of such Section 11(a)(ii) Event, the number of one-hundredths of a Preferred Share for which a Right would have been exercisable if the Distribution Date had occurred on the Business Day immediately preceding the date of such Section 11(a)(ii) Event), and (B) dividing that product by 25% of the Current Market Price of a Common Share on the date of occurrence of the relevant Section 11(a)(ii) Event (such number of shares being hereinafter referred to as the “Adjustment Shares”). Successive adjustments shall be made pursuant to this paragraph each time a Section 11(a)(ii) Event occurs.

 

(iii)     In the event that on the date of a Section 11(a)(ii) Event the aggregate number of Common Shares that are authorized by the Company's Articles of Incorporation, as amended from time to time, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights is less than the aggregate number of Adjustment Shares thereafter issuable upon the exercise in full of the Rights in accordance with Section 11(a)(ii) hereof (the excess of such number of Adjustment Shares over and above such number of Common Shares being hereinafter referred to as the “Unavailable Adjustment Shares”), then, and upon each such event, the Company shall substitute for the pro rata portion of the Unavailable Adjustment Shares that would otherwise be issuable thereafter upon the exercise of each Right and payment of the Exercise Price (A) cash, (B) other equity securities of the Company (including, without limitation, shares of preferred stock of the Company or units of such shares having the same Current Market Price as one Common Share (a “Common Share Equivalent”)), (C) debt securities of the Company, (D) other property or (E) any combination of the foregoing, in each case having an aggregate Current Market Price equal to the aggregate Current Market Price of the Unavailable Adjustment Shares for which substitution is made. Subject to Section 7(d) hereof, in the event that the Company takes any action pursuant to this Section 11(a)(iii), such action shall apply uniformly to all outstanding Rights.

 

(b)     In the event that the Company shall, at any time after the Close of Business on the Record Date and prior to the Close of Business on the earlier of the Redemption Date or the Expiration Date, fix a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling them initially to subscribe for or purchase Preferred Shares (or shares having the same rights, privileges and preferences as the Preferred Shares (“Preferred Share Equivalents”)) or securities convertible into Preferred Shares or Preferred Share Equivalents, at a price per Preferred Share or Preferred Share Equivalent (or having a conversion price per share, if a security convertible into Preferred Shares or Preferred Share Equivalents) less than the Current Market Price per Preferred Share on such record date, then, and upon each such event, the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be equal to the sum of the number of Preferred Shares outstanding on such record date plus the number of Preferred Shares that the aggregate offering price of the total number of Preferred Shares and/or Preferred Share Equivalents to be so offered (and/or the aggregate initial conversion price of the convertible securities to be so offered) would purchase at such Current Market Price, and the denominator of which shall be equal to the number of Preferred Shares outstanding on such record date plus the number of additional Preferred Shares and/or Preferred Share Equivalents to be offered for subscription or purchase (or into which the convertible securities to be so offered are initially convertible); provided, however, that if such rights, options or warrants are not exercisable immediately upon issuance but become exercisable only upon the occurrence of a specified event or the passage of a specified period of time, then the adjustment to the Exercise Price shall be made and become effective only upon the occurrence of such event or such passage of time, and such adjustment shall be made as if the record date for the issuance of such rights, options or warrants had been the business day immediately preceding the date upon which such rights, options or warrants became exercisable. Preferred Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment to the Exercise Price shall be made successively whenever such a record date is fixed, and in the event that such rights or warrants are not so issued, the Exercise Price shall be adjusted to be the Exercise Price that would then be in effect if such record date had not been fixed.

 

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(c)     In the event that the Company shall, at any time after the Close of Business on the Record Date and prior to the Close of Business on the earlier of the Redemption Date or the Expiration Date, fix a record date for the making of a distribution to all holders of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the surviving corporation) of assets (other than a distribution for which an adjustment is required under Section 11(a)(i) or (b) hereof or a regular quarterly cash dividend), then the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be equal to the excess of the Current Market Price per Preferred Share on such record date over and above the fair market value of the portion of the securities or assets to be so distributed with respect to one Preferred Share, and the denominator of which shall be equal to such Current Market Price per Preferred Share. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such a distribution is not so made, the Exercise Price shall be adjusted to be the Exercise Price that would then be in effect if such record date had not been fixed.

 

(d)     For the purpose of any computation under this Section 11, if the Preferred Shares are not publicly held or traded, the “Current Market Price” per Preferred Share shall be conclusively deemed to be the Current Market Price per Common Share multiplied by 100.

 

(e)     No adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the then current Exercise Price; provided, however, that any adjustments that by reason of this Section 11(e) are not required to be made shall be cumulated and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one-thousandth of a Common Share or other share or one-millionth of a Preferred Share, as the case may be.

 

(f)     If, as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right shall, upon exercise thereof, be entitled to receive any securities of the Company other than Preferred Shares, and if an event occurs in respect of such securities that, if it were to occur in respect of Preferred Shares, would require an adjustment under this Section 11 in respect of Preferred Shares, then the number of such other securities so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to Preferred Shares contained in this Section 11, and the other provisions of this Agreement with respect to Preferred Shares shall apply on like terms to any such other securities.

 

(g)     All Rights originally issued by the Company subsequent to any adjustment made to the Exercise Price hereunder shall represent the right to purchase, at the adjusted Exercise Price, the number of one-hundredths of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

 

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(h)     Unless the Company shall have exercised its election as provided in Section 11(i) below, upon each adjustment of the Exercise Price as a result of the calculations made in Sections 11(b) and (c) hereof, each Right outstanding immediately prior to the making of such adjustment shall thereafter represent the right to purchase, at the adjusted Exercise Price, that number of one-hundredths of a Preferred Share (calculated to the nearest one-millionth of a Preferred Share) obtained by multiplying (i) the number of one-hundredths of a Preferred Share purchasable upon the exercise of one Right immediately prior to such adjustment of the Exercise Price by (ii) the Exercise Price in effect immediately prior to such adjustment, and dividing the product so obtained by the Exercise Price in effect immediately after such adjustment.

 

(i)      The Company may elect, on or after the date of any adjustment of the Exercise Price, to adjust the number of Rights instead of making any adjustment in the number of Preferred Shares purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one one-thousandth of a Right) obtained by dividing the Exercise Price in effect immediately prior to the adjustment of the Exercise Price by the Exercise Price in effect immediately after such adjustment of the Exercise Price. The Company shall make a public announcement of its election to adjust the number of Rights pursuant to this Section 11(i) and promptly deliver a copy of such announcement to the Rights Agent, indicating the record date for the adjustment and, if known at the time, the amount of the adjustment to be made. Such record date may be the date on which the Exercise Price is adjusted or any day thereafter, but, if separate Right Certificates have been issued, it shall be at least 10 days after the date of such public announcement. If separate Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates representing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment or, at the option of the Company, cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of such adjustment, and upon surrender thereof if required by the Company, new Right Certificates representing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates to be so distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Exercise Price) and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement.

 

(j)      Irrespective of any adjustment or change in the Exercise Price or the number of one-hundredths of a Preferred Share issuable upon the exercise of one Right, the Right Certificates theretofore and thereafter issued may continue to express the Exercise Price per one one-hundredth of a Preferred Share and the number of Preferred Shares issuable upon the exercise of one Right that were expressed in the initial Right Certificates issued hereunder.

 

(k)     Before taking any action that would cause an adjustment reducing the Exercise Price below one one-hundredth of the then par value, if any, of the Preferred Shares issuable upon exercise of the Rights, the Company shall take any corporate action that may, in the advice or opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable one one-hundredths of a Preferred Share at such adjusted Exercise Price.

 

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(l)      In any case in which this Section 11 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the Company may elect to defer, (and shall provide the Rights Agent with notice of such election) until the occurrence of such event, the issuance to the holder of any Right exercised after such record date of the number of one-hundredths of a Preferred Share and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the number of one-hundredths of a Preferred Share and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument representing such holder's right to receive such additional shares upon the occurrence of the event requiring such adjustment.

 

(m)    Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such further adjustments in the number of one-hundredths of a Preferred Share that may be purchased upon exercise of one Right, and such further adjustments in the Exercise Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that the Company in its sole discretion shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at less than the Current Market Price thereof, (iii) issuance wholly for cash of Preferred Shares or securities that by their terms are convertible into or exchangeable for Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred Shares or (v) issuance of rights, options or warrants referred to in Section 11(b) hereof, hereafter made by the Company to holders of its Preferred Shares shall not be taxable to such Shareholders.

 

(n)     In the event that the Company shall, at any time after the Close of Business on the Record Date and prior to the Close of Business on the earliest of the date of the first Section 11(a)(ii) Event, the date of the first Section 13(a) Event, the Redemption Date or the Expiration Date, (i) pay any dividend on the Common Shares payable in Common Shares, (ii) subdivide the outstanding Common Shares, (iii) combine the outstanding Common Shares into a smaller number of Common Shares or (iv) issue Common Shares in a reclassification of the Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, and upon each such event, the Exercise Price to be in effect after such event shall be determined by multiplying the Exercise Price in effect immediately prior to such event by a fraction, the numerator of which shall be equal to the number of Common Shares outstanding immediately prior to such event and the denominator of which shall be equal to the number of Common Shares outstanding immediately after such event. Successive adjustments shall be made pursuant to this Section 11(n) each time such a dividend is paid or such a subdivision, combination or reclassification is effected. If an event occurs that would require an adjustment under both this Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(n) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.

 

Section 12   CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES ISSUABLE UPON EXERCISE OF RIGHTS. Whenever an adjustment is made as provided in Section 11 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment and a brief statement of the facts and computations giving rise to such adjustment, (b) file with the Rights Agent and with each transfer agent for the securities issuable upon exercise of the Rights a copy of such certificate and (c) mail a brief summary thereof to each holder of Rights in accordance with Section 25 hereof. Notwithstanding the foregoing sentence, the failure of the Company to make such certification or to give such notice shall not affect the validity or the force and effect of such adjustment. Any adjustment to be made pursuant to Sections 11 or 13 hereof shall be effective as of the date of the event giving rise to such adjustment. The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained, and shall not be obligated or responsible for calculating any adjustment nor shall it be deemed to have knowledge of such an adjustment unless and until it shall have received such certificate.

 

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Section 13   CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.

 

(a)     In the event (a “Section 13(a) Event”) that, at any time on or after the 15% Ownership Date and prior to the earlier of the Redemption Date or the Expiration Date, (1) the Company shall, directly or indirectly, consolidate with or merge with and into any other Person and the Company shall not be the continuing or surviving corporation in such consolidation or merger, (2) any Person shall, directly or indirectly, consolidate with or merge with and into the Company and the Company shall be the continuing or surviving corporation in such merger and, in connection with such merger, all or part of the Common Shares shall be changed into or exchanged for stock or other securities of any Person or cash or any other property, or (3) the Company and/or any one or more of its Subsidiaries shall, directly or indirectly, sell or otherwise transfer, in one or more transactions (other than transactions in the ordinary course of business), assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons other than the Company or one or more of its wholly-owned Subsidiaries (such Persons, together with the Persons described in clauses (1) and (2) above shall be collectively referred to in this Section as the “Surviving Person”), then, and in each such case, proper provision shall be made so that:

 

(i)      except as provided in Section 7(d) hereof, each holder of a Right shall thereafter have the right to receive, upon the exercise thereof in accordance with the terms of this Agreement and payment of the then current Exercise Price, in lieu of the securities or other property otherwise purchasable upon such exercise, such number of validly authorized and issued, fully paid and nonassessable Common Shares of the Surviving Person (and if such Surviving Person has more than one class or series of Common Shares, such number of validly authorized and issued, fully paid and nonassessable Common Shares of each series or class) as shall be equal to a fraction, the numerator of which is the product of the then current Exercise Price multiplied by the number of one-hundredths of a Preferred Share purchasable upon the exercise of one Right immediately prior to the first Section 13(a) Event (or, if the Distribution Date shall not have occurred prior to the date of such Section 13(a) Event, the number of one-hundredths of a Preferred Share that would have been so purchasable if the Distribution Date had occurred on the Business Day immediately preceding the date of such Section 13(a) Event, or, if a Section 11(a)(ii) Event has occurred prior to such Section 13(a) Event, the product of the number of one-hundredths of a Preferred Share purchasable upon the exercise of a Right (or, if the Distribution Date shall not have occurred prior to the date of such Section 11(a)(ii) Event, the number of one-hundredths of a Preferred Share that would have been so purchasable if the Distribution Date had occurred on the Business Day immediately preceding the date of such Section 11(a)(ii) Event) immediately prior to such Section 11(a)(ii) Event, multiplied by the Exercise Price in effect immediately prior to such Section 11(a)(ii) Event), and the denominator of which is 25% of the Current Market Price per Common Share of the Surviving Person on the date of consummation of such Section 13(a) Event;

 

(ii)      the Surviving Person shall thereafter be liable for and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement;

 

(iii)     the term “Company” shall thereafter be deemed to refer to the Surviving Person; and

 

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(iv)    the Surviving Person shall take such steps (including, but not limited to, the reservation of a sufficient number of its Common Shares in accordance with Section 9 hereof) in connection with such consummation as may be necessary to ensure that the provisions hereof shall thereafter be applicable to its Common Shares thereafter deliverable upon the exercise of Rights.

 

(b)     Notwithstanding the foregoing, if the Section 13(a) Event is the sale or transfer in one or more transactions of assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole), but less than 100% thereof, then each Person acquiring all or a portion thereof shall assume the obligations of the Company as to a fraction of each of the Rights equal to the fraction of the assets of the Company and its Subsidiaries (taken as a whole) acquired by such Person, and the obligations of the Company as to the remaining fraction of each of the Rights shall continue to be the obligations of the Company.

 

(c)     The Company shall not consummate a Section 13(a) Event unless prior thereto the Company and the Surviving Person shall have executed and delivered to the Rights Agent a supplemental agreement confirming that such Surviving Person shall, upon consummation of such Section 13(a) Event, assume this Agreement in accordance with Section 13 hereof, that all rights of first refusal or preemptive rights in respect of the issuance of Common Shares of such Surviving Person upon exercise of outstanding Rights have been waived and that such Section 13(a) Event shall not result in a default by such Surviving Person under this Agreement, and further providing that, as soon as practicable after the date of consummation of such Section 13(a) Event, such Surviving Person shall:

 

(i)       prepare and file a registration statement under the Securities Act with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, use its best efforts to cause such registration statement to become effective as soon as practicable after such filing, use its best efforts to cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the Expiration Date, and similarly comply with all applicable state securities laws;

 

(ii)     use its best efforts to list (or continue the listing of) the Rights and the Common Shares of the Surviving Person purchasable upon exercise of the Rights on NASDAQ or another national securities exchange, or use its best efforts to cause the Rights and such Common Shares to meet the eligibility requirements for quotation on the OTCBB; and

 

(iii)     deliver to holders of the Rights historical financial statements for such Surviving Person that comply in all respects with the requirements for registration on Form 10 (or any successor form) under the Exchange Act.

 

(d)     In the event that at any time after the occurrence of a Section 11(a)(ii) Event some or all of the Rights shall not have been exercised pursuant to Section 11 hereof prior to the date of a Section 13(a) Event, such Rights shall thereafter be exercisable only in the manner described in Section 13(a) hereof. In the event that a Section 11(a)(ii) Event occurs on or after the date of a Section 13(a) Event, Rights shall not be exercisable pursuant to Section 11 hereof but shall instead be exercisable pursuant to, and only pursuant to, this Section 13.

 

(e)     The provisions of this Section 13 shall apply to each successive merger, consolidation, sale or other transfer constituting a Section 13(a) Event.

 

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Section 14   FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

 

(a)     The Company shall not be required to issue fractions of Rights or to distribute Right Certificates that represent fractional Rights. If the Company shall determine not to issue such fractional Rights, the Company shall pay to the registered holders of the Right Certificates with respect to which such fractional Rights would otherwise be issuable, at the time such fractional Rights would otherwise have been issued as provided herein, an amount in cash equal to the same fraction of the Current Market Price of a whole Right on the Business Day immediately prior to the date upon which such fractional Rights would otherwise have been issuable.

 

(b)     The Company shall not be required to issue fractions of Common Shares or Preferred Shares (other than fractions that are integral multiples of one one-hundredth of a Preferred Share) upon exercise of Rights, or to distribute certificates that represent fractional Common Shares or Preferred Shares (other than fractions that are integral multiples of one one-hundredth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one one-hundredth of a Preferred Share may, at the election of the Company, be represented by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it, provided that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of Preferred Shares. If the Company shall determine not to issue fractional Common Shares or Preferred Shares (or depositary receipts in lieu of Preferred Shares), the Company shall pay to the registered holders of Right Certificates with respect to which such fractional Common Shares or Preferred Shares would otherwise be issuable, at the time such Rights are exercised as provided herein, an amount in cash equal to the same fraction of the Current Market Price of a whole Common Share or Preferred Share, as the case may be. For purposes of this Section 14(b), the Current Market Price of a whole Common Share or Preferred Share shall be the Closing Price per share for the Trading Day immediately prior to the date of such exercise.

 

(c)     The holder of a Right, by the acceptance of such Right, expressly waives such holder's right to receive any fractional Rights or any fractional Common Shares or Preferred Shares upon exercise of such Right, except as permitted by this Section 14.

 

Section 15   RIGHTS OF ACTION. All rights of action in respect of this Agreement, except the rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Right Certificates and certificates for Common Shares representing Rights, and any registered holder of any Right Certificate or of such certificate for Common Shares, without the consent of the Rights Agent or of the holder of any other Right Certificate or any other certificate for Common Shares may, in such holder's own behalf and for such holder's own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder's right to exercise the Rights represented by such Right Certificate or by such certificate for Common Shares in the manner provided in such Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and shall be entitled to specific performance, and injunctive relief against actual or threatened violations, of the obligations of any Person under this Agreement.

 

Section 16   AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and every other holder of a Right that:

 

(a)     prior to the Distribution Date, the Rights shall be represented by certificates for Common Shares registered in the name of the holders of such Common Shares (which certificates for Common Shares shall also constitute Right Certificates), and each such Right shall be transferable only in connection with the transfer of such Common Shares;

 

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(b)     after the Distribution Date, the Right Certificates shall only be transferable on the registry books of the Rights Agent if surrendered at the office of the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer; and

 

(c)     the Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate is registered as the absolute owner thereof and of the Rights represented thereby (notwithstanding any notations of ownership or writing on the Right Certificate by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary.

 

Section 17   RIGHT HOLDER AND RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder, as such, of any Right or Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the securities of the Company that may at any time be issuable upon the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right or Right Certificate, as such, any of the rights of a Shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to Shareholders at any meeting thereof, to give or withhold consent to any corporate action, to receive notice of meetings or other actions affecting Shareholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, in each case until such Right or the Rights represented by such Right Certificate shall have been exercised in accordance with the provisions hereof.

 

Section 18   CONCERNING THE RIGHTS AGENT.

 

(a)     The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the preparation, delivery, amendment, administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense, incurred without negligence, bad faith or willful misconduct on the part of the Rights Agent, for any action taken, suffered or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including without limitation the costs and expenses of defending against any claim of liability. The costs and expenses of enforcing this right of indemnification shall also be paid by the Company. The indemnification provided for hereunder shall survive the expiration of the Rights and the termination of this Agreement.

 

(b)     The Rights Agent may conclusively rely upon and shall be authorized and protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with the acceptance and administration of this Agreement in reliance upon any Right Certificate or certificate for Preferred Shares or Common Shares or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of its counsel as set forth in Section 20 hereof. The Rights Agent shall not be deemed to have notice of any action or event (as to which the Rights Agent is entitled to notice hereunder) unless such has been given to Rights Agent as provided herein.

 

(c)     Notwithstanding anything in this Agreement to the contrary, in no event shall the Rights Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damage and regardless of the form of the action.

 

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Section 19   MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.

 

(a)     Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the corporate trust or stock transfer business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. If, at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and if at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in such Right Certificate and in this Agreement.

 

(b)     If at any time the name of the Rights Agent shall be changed, and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and if at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full force provided in such Right Certificate and in this Agreement.

 

Section 20   DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and obligations, and only the duties and obligations, expressly imposed by this Agreement (and no implied duties or obligations shall be read into this Agreement against the Rights Agent) upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance of the Rights, shall be bound:

 

(a)     Before the Rights Agent acts or refrains from acting, it may consult with legal counsel (who may be legal counsel for the Company), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken, suffered or omitted by it in good faith and in accordance with such advice or opinion.

 

(b)     Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including without limitation the identity of any 15% Shareholder and the determination of the Current Market Value) be proved or established by the Company prior to taking, suffering or omitting any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer or President, any Vice President, the Chief Financial Officer or Treasurer, or the Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization and protection to the Rights Agent, and the Rights Agent shall incur no liability in respect of, any action taken, suffered or omitted in good faith by it under the provisions of this Agreement in reliance upon such certificate.

 

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(c)     The Rights Agent shall be liable hereunder to the Company and any other Person only for its own negligence, bad faith or willful misconduct.

 

(d)     The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement, or in the Right Certificates (except its countersignature thereof), or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

 

(e)     The Rights Agent shall not be under any liability or responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due authorization, execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including any Rights becoming null and void pursuant to Section 7(d) hereof) or any adjustment in the terms of the Rights (including the manner, method or amount thereof) provided for in Sections 7, 11, 13, 23 and 24 hereof, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights represented by Right Certificates after actual notice that such change or adjustment is required); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Preferred Shares or Common Shares or other securities to be issued pursuant to this Agreement or any Right Certificate, or as to whether any Preferred Shares or Common Shares or other securities will, when issued, be validly authorized and issued, fully paid and nonassessable.

 

(f)     The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.

 

(g)     The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer or President, any Vice President, the Chief Financial Officer or Treasurer, the Secretary or any Assistant Secretary of the Company, and to apply to such officers for advice or instructions in connection with its duties. The Rights Agent may conclusively rely on the most recent instructions given by any such officer and such instructions shall be full authorization and protection to the Rights Agent for, and the Rights Agent shall incur no liability in respect of, any action taken, suffered or omitted to be taken by it in good faith in accordance with such instructions or for any delay in acting while waiting for those instructions. Any application by the Rights Agent for written instructions from the Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent under this Agreement and the date on or after which such action shall be taken or such omission shall be effective. The Rights Agent shall not be liable for any action taken, suffered or omitted by the Rights Agent in accordance with a proposal included in any such application on or after the date specified in such application (which date shall not be less than ten Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to an earlier date) unless, prior to taking any such action (or the effective date in the case of an omission), the Rights Agent shall have received written instructions from the Company in response to such application to the contrary.

 

(h)     The Rights Agent and any Shareholder, affiliate, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not the Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person or legal entity.

 

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(i)     The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, absent negligence, bad faith or willful misconduct on the part of such attorneys or agents, provided that reasonable care was exercised in the selection and continued employment thereof.

 

(j)      No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if its believes that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.

 

(k)     The Rights Agent shall not be required to take notice or be deemed to have notice of any fact, event or determination (including, without limitation, any dates or events defined in this Agreement or the designation of any Person as a 15% Shareholder, Affiliate or Associate) under this Agreement unless and until the Rights Agent shall be specifically notified in writing by the Company of such fact, event or determination.

 

(l)      If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has not been completed, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company.

 

Section 21  CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30-days' notice in writing mailed to the Company and to each transfer agent of the Common Shares and Preferred Shares by registered or certified mail, and, at the expense of the Company to the holders of the Right Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30-days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Shares and Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting as such, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit such holder's Right Certificate for inspection by the Company), then the Company shall become the Rights Agent and the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a Person organized and doing business under the laws of the United States or of the States of New York or California (or of any other state of the United States so long as such Person is authorized to do business in the States of New York or California), in good standing, having an office in New York or California, that is authorized under such laws to act in the capacity required by the terms of this Agreement and is subject to supervision or examination by federal or state authority and that has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50,000,000. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose of this Agreement and so that the successor Rights Agent may appropriately act as Rights Agent hereunder. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares and Preferred Shares, and mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

 

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Section 22   ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of the provisions of this Agreement or of the Right Certificates to the contrary, the Company may, at its option, issue new Right Certificates in such form as may be approved by the Board of Directors in order to reflect any adjustment or change in the Exercise Price and the number or kind or class of shares or other securities or property purchasable upon exercise of the Rights in accordance with the provisions of this Agreement.

 

Section 23   REDEMPTION OF RIGHTS.

 

(a)     Until the earliest of (i) the date of the first Section 11(a)(ii) Event, (ii) the date of the first Section 13(a) Event or (iii) the Expiration Date, the Board of Directors of the Company may, at its option, authorize and direct the redemption of all, but not less than all, of the then outstanding Rights at a redemption price of $.001 per Right, as such redemption price shall be appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (the “Redemption Price”), and the Company shall so redeem the Rights.

 

(b)     Immediately upon the action of the Board of Directors of the Company authorizing and directing the redemption of the Rights pursuant to subsection (a) of this Section 23, or at such time and date thereafter as it may specify, and without any further action and without any notice, the right to exercise Rights shall terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. Within ten Business Days after the date of such action, the Company shall give notice of such redemption to the holders of Rights (and prompt notice thereof to the Rights Agent) by mailing such notice to all holders of Rights at their last addresses as they appear upon the registry books of the Rights Agent or, if prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. Any notice that is mailed in the manner herein provided shall be deemed given, whether or not the holder receives such notice, but neither the failure to give any such notice nor any defect therein shall affect the legality or validity of such redemption. Each such notice of redemption shall state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may, directly or indirectly, redeem, acquire or purchase for value any Rights in any manner other than that specifically set forth in Section 24 hereof or in this Section 23, or in connection with the purchase of Common Shares prior to the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event.

 

(c)     The Company may, at its option, pay the Redemption Price in cash, Common Shares, Preferred Shares, other equity securities of the Company, debt securities of the Company, other property or any combination of the foregoing, in each case having an aggregate Current Market Price on the Redemption Date equal to the Redemption Price.

 

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Section 24   EXCHANGE OF RIGHTS.

 

(a)     At any time during the period of 180 days after a Section 11(a)(ii) Event, the Board of Directors of the Company may, at its option, authorize and direct the exchange of all, but not less than all, of the then outstanding Rights for Common Shares, one one-hundredths of Preferred Shares, debt securities of the Company, other property, or any combination of the foregoing, in each case having an aggregate Current Market Price equal to the result obtained by (i) multiplying the Current Market Price per Common Share on the record date for such exchange by the number of Common Shares for which a Right is exercisable on such record date and (ii) subtracting from such product the Exercise Price on such Record Date (the “Exchange Ratio”), and the Company shall so exchange the Rights.

 

(b)     Immediately upon the action of the Board of Directors of the Company authorizing and directing the exchange of the Rights pursuant to subsection (a) of this Section 24, or at such time and date thereafter as it may specify, and without any further action and without any notice, the right to exercise Rights shall terminate and the only right thereafter of the holders of Rights shall be to receive a number of Common Shares in accordance with the Exchange Ratio. Within ten Business Days after the date of such action, the Company shall give notice of such exchange to the holders of Rights (and prompt notice thereof to the Rights Agent) by mailing such notice to all holders of Rights at their last addresses as they appear upon the registry books of the Rights Agent or, if prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. Any notice that is mailed in the manner herein provided shall be deemed given, whether or not the holder receives such notice, but neither the failure to give any such notice nor any defect therein shall affect the legality or validity of such exchange. Each such notice of exchange shall state the method by which the Rights will be exchanged for Common Shares.

 

(c)     Notwithstanding the foregoing, in the event that the aggregate number of Common Shares that are authorized by the Company's Articles of Incorporation, as amended from time to time, but not outstanding or reserved for issuance for purposes other than upon exercise or exchange of the Rights is less than the aggregate number of Common Shares issuable upon the exchange of the Rights in accordance with this Section 24 (the excess of such number of authorized Common Shares over and above such number of issuable Common Shares being hereinafter referred to as the “Unavailable Exchange Shares”), then the Company shall substitute for the pro rata portion of the Unavailable Exchange Shares that would otherwise be issuable upon the exchange of the Rights in accordance with this Section 24 (i) cash, (ii) other equity securities of the Company (including, without limitation, Common Share Equivalents), (iii) debt securities of the Company, (iv) other property or (v) any combination of the foregoing, in each case having an aggregate Current Market Price equal to the aggregate Current Market Price of the Unavailable Exchange Shares for which substitution is made. Subject to Section 7(d) hereof, in the event that the Company takes any action pursuant to this Section 24, such action shall apply uniformly to all outstanding Rights.

 

Section 25   NOTICE OF CERTAIN EVENTS.

 

(a)     In the event that the Company shall propose (i) to declare or pay any dividend on or make any distribution with respect to its Common Shares or Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer to the holders of its Common Shares or Preferred Shares options, rights or warrants to subscribe for or to purchase any additional shares thereof or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of its Common Shares or Preferred Shares (other than a reclassification involving only the subdivision of outstanding shares), (iv) to effect any consolidation or merger with or into, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to effect the liquidation, dissolution or winding up of the Company, then and in each such case, the Company shall give to the Rights Agent and each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action that shall specify the record date for the purpose of such dividend or distribution, or the date upon which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding up is to take place and the date of participation therein by the holders of record of the Common Shares or Preferred Shares, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 20 days prior to the record date for determining holders of the Common Shares or Preferred Shares for purposes of such action, and in the case of any such other action, at least 20 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares or Preferred Shares, whichever date shall be the earlier. The failure to give the notice required by this Section 25 or any defect therein shall not affect the legality or validity of the action taken by the Company or the vote upon any such action.

 

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(b)     Upon the occurrence of each Section 11(a)(ii) Event and each Section 13(a) Event, the Company shall as soon as practicable thereafter give to the Rights Agent and each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of the occurrence of such event, specifying the event and the consequences of the event to holders of Rights under Sections 11 and 13 hereof.

 

Section 26   NOTICES. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:

 

Giga-tronics Incorporated

5990 Gleason Drive

Dublin, California 94568

Attention: Secretary

 

Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made to or on the Rights Agent (i) by the Company shall be sufficiently given or made if sent, postage prepaid, by registered or certified mail, addressed to the principal office of the Rights Agent as set forth below (until another address is filed in writing with the Company) or (ii) by the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to the principal office of the Rights Agent as set forth below (until another address is filed in writing with the Company), and shall be deemed given upon actual receipt. The Company hereby agrees that it shall encourage the holders of the Right Certificates, in any and all writings to such holders regarding the Rights or this Agreement, to give or make any notice or demand authorized by this Agreement by registered or certified mail, addressed to the principal office of the Rights Agent as follows (until another address is filed in writing with the Company):

 

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, New York 11219

 

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.

 

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Section 27   SUPPLEMENTS AND AMENDMENTS.

 

(a)     The Board of Directors of the Company may, from time to time, without the approval of any holders of Rights, supplement or amend any provision of this Agreement in any manner, whether or not such supplement or amendment is adverse to any holder of Rights, and direct the Rights Agent so to supplement or amend such provision, and the Rights Agent shall so supplement or amend such provision; provided, however, that from and after the earliest of (i) the date of the first Section 11(a)(ii) Event, (ii) the date of the first Section 13(a) Event, (iii) the Redemption Date or (iv) the Expiration Date, this Agreement shall not be supplemented or amended in any manner that would materially and adversely affect any holder of outstanding Rights other than a 15% Shareholder or a Surviving Person.

 

(b)     From and after the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the Rights Expiration Date, the Company shall not effect any amendment to the Certificate of Determination for the Preferred Shares that would materially and adversely affect the rights, privileges or preferences of the Preferred Shares without the prior approval of the holders of two-thirds or more of the then outstanding Rights. Notwithstanding anything in this Agreement to the contrary, no supplement or amendment that changes the rights and duties of the Rights Agent under this Agreement in any manner adverse to the Rights Agent will be effective against the Rights Agent without the execution of such supplement or amendment by the Rights Agent.

 

(c)     The Rights Agent shall be entitled to request and receive a certificate executed by either the Chairman of the Board, any Vice Chairman of the Board, the Chief Executive Officer or President or any Vice President of the Company and the Chief Financial Officer or Treasurer, the Secretary or any Assistant Secretary of the Company stating that the proposed supplement or amendment complies with this Section 27 prior to its execution of such supplement or amendment.

 

Section 28   CERTAIN COVENANTS. Subject to Section 27 hereof and the other provisions of this Agreement, from and after the earlier of the date of the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the earlier of the Redemption Date or the Expiration Date, the Company shall not (a) issue or sell, or permit any Subsidiary to issue or sell, to a 15% Shareholder or a Surviving Person, or any Affiliate or Associate of a 15% Shareholder or a Surviving Person, or any Person holding Voting Shares of the Company that are Beneficially Owned by a 15% Shareholder or a Surviving Person, (i) any rights, options, warrants or convertible securities on terms similar to, or that materially adversely affect the value of, the Rights or (ii) Preferred Shares, Common Shares or shares of any other class of capital stock, if such sale is intended to or would materially adversely affect the value of the Rights, or (b) take any other action that is intended to or would materially adversely affect the value of the Rights.

 

Section 29   SUCCESSORS. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

 

Section 30   BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (other than those representing Rights that have become null and void) and the certificates for Common Shares representing Rights (other than those Rights that have become null and void) any legal or equitable right, remedy or claim under this Agreement, and this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and such registered holders of Right Certificates and certificates for Common Shares representing Rights.

 

Section 31   SEVERABILITY. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

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Section 32   GOVERNING LAW. This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of California and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts made and performed entirely within such state.

 

Section 33   COUNTERPARTS. This Agreement may be executed in any number of counterparts and each such counterpart shall for all purposes be deemed to be an original and all such counterparts shall together constitute but one and the same instrument.

 

Section 34   DESCRIPTIVE HEADINGS. Descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

 

 

	 	
			GIGA-TRONICS INCORPORATED

			
	 	 
	 	 
	 	
			By:

				
			        /s/ John Regazzi

			
	 	
			Name:

				
			John Regazzi

			
	 	
			Title:    

				President and Chief Executive Officer
	 	 
	 	
			AMERICAN STOCK TRANSFER & TRUST COMPANY, as

			Rights Agent

			
	 	 
	 	 
	 	
			By:

				
			       /s/ Michael A. Nespoli

			
	 	
			Name:

				
			Michael A. Nespoli

			
	 	
			Title:

				
			Executive Director

			

 

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EXHIBIT A

 

CERTIFICATE OF DETERMINATION

OF

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

OF

GIGA-TRONICS INCORPORATED

 

 

     We, George H. Bruns, Jr., Chairman of the Board, and Mark H. Cosmez II, Secretary of Giga-tronics Incorporated, a corporation organized and existing under the General Corporation Law of the State of California, in accordance with the provisions of Section 401 thereof, DO HEREBY CERTIFY:

 

     That pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation of said Corporation, the said Board of Directors on October 14, 1998 adopted the following resolution creating a series of Two Hundred Fifty Thousand (250,000) shares of Preferred Stock designated as Series A Junior Participating Preferred Stock, none of which has been issued:

 

     RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Articles of Incorporation, a series of Preferred Stock of the Corporation be and it hereby is created, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows:

 

     Section 1. That pursuant to the authority granted to and vested in the Board by Article Fourth of the Articles of Incorporation of the Corporation, the Board hereby creates a series of Preferred Stock (which term is used throughout this resolution with the meaning given in said Article Fourth) with a par value of $1.00 per share, of the Corporation, hereby designates said Series of Preferred Stock as the "Series A Junior Participating Preferred Stock" (the "Junior Preferred Stock") and hereby designates the number of shares to constitute such series, fixes the terms, preferences, voting powers, restrictions and qualifications thereof, and authorizes the issue thereof all in accordance with the provisions of Section 2 of this resolution.

 

     Section 2. That the total number of shares to constitute the Junior Preferred Stock is hereby designated as 250,000 shares, and the terms, preferences, voting powers, restrictions and qualifications of the Junior Preferred Stock are hereby fixed as follows:

 

     2.1. AUTHORIZED SHARES. The total authorized amount of the Junior Preferred Stock shall be 250,000 shares, with a par value of $1.00 per share. Such number of shares may be increased or decreased by resolution of the Board of Directors; PROVIDED, that no decrease shall reduce the number of shares of Junior Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Junior Preferred Stock.

 

A-1

 

 

     2.2. DIVIDENDS AND DISTRIBUTIONS.

 

(A) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the Junior Preferred Stock with respect to dividends, the holders of shares of Junior Preferred Stock, in preference to the holders of Common Stock of the Corporation (the "Common Stock"), and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Junior Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $.25 per share or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Junior Preferred Stock. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Junior Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

(B) The Corporation shall declare a dividend or distribution on the Junior Preferred Stock as provided in paragraph (A) of this Section 2.2 immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $.25 per share on the Junior Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

 

A-2

 

 

(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Junior Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Junior Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Junior Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Junior Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof.

 

     2.3. VOTING RIGHTS. The holders of shares of Junior Preferred Stock shall have the following voting rights:

 

(A) Subject to the provision for adjustment hereinafter set forth, each share of Junior Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to the vote of the stockholders of the Corporation. In the event the Corporation shall at any time after November 10, 1998 declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Junior Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is

the number of shares of Common Stock that were outstanding immediately prior to such event.

 

(B) Except as otherwise provided herein, in the Articles of Incorporation, in any other resolution of the Board of Directors of the Corporation creating a series of Preferred Stock, or by law, the holders of shares of Junior Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

 

A-3

 

 

(C) Except as set forth herein, holders of Junior Preferred Stock shall have no voting rights.

 

     2.4. CERTAIN RESTRICTIONS.

 

(A) Whenever quarterly dividends or other dividends or distributions payable on the Junior Preferred Stock as provided in Section 2.2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Junior Preferred Stock outstanding shall have been paid in full, the Corporation shall not:

 

(i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Junior Preferred Stock;

 

(ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Junior Preferred Stock, except dividends paid ratably on the Junior Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

 

(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Junior Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Junior Preferred Stock; or

 

(iv) redeem or purchase or otherwise acquire for consideration any shares of Junior Preferred Stock, or any shares of stock ranking on a parity with the Junior Preferred Stock except in accordance with a purchase offer made in writing or by publication as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

 

A-4

 

 

(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 2.4 purchase orotherwise acquire such shares at such time and in such manner.

 

     2.5. REACQUIRED SHARES. Any shares of Junior Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock, subject to the conditions and restrictions on issuance set forth herein, in the Articles of Incorporation, in any other resolution of the Board of Directors of the Corporation creating a series of Preferred Stock, or as otherwise required by law.

 

     2.6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Junior Preferred Stock unless, prior thereto, the holders of shares of Junior Preferred Stock shall have received $1.00 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Junior Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Junior

Preferred Stock, except distributions made ratably on the Junior Preferred Stock and all other such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Junior Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

A-5

 

 

     2.7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Junior Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Junior Preferred Stock, shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

     2.8. REDEMPTION. The shares of Junior Preferred Stock shall not be redeemable.

 

     2.9. RANK. The Junior Preferred Stock shall rank junior with respect to the payment of dividends and the distribution of assets to all series of the Corporation's Preferred Stock that specifically provide that they shall rank prior to the Junior Preferred Stock. Nothing herein shall preclude the Board from creating any series of Preferred Stock ranking on a parity with or prior to the Junior Preferred Stock as to the payment of dividends or the distribution of assets.

 

     2.10. AMENDMENT. The Articles of Incorporation of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Junior Preferred Stock so as to affect them adversely without the affirmative role of the holders of at least two-thirds of the outstanding Junior Preferred Stock, voting together as a single series.

 

     2.11. FRACTIONAL SHARES. The Junior Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and have the benefit of all other rights of holders of the Junior Preferred Stock.

 

     We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

 

Dated: November 6, 1998

 

                                 /s/ George H. Bruns, Jr.

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

                                 George H. Bruns, Jr., Chairman of the Board

 

 

                                 /s/ Mark H. Cosmez II

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

                                 Mark H. Cosmez II, Secretary

 

A-6

 

 

Exhibit B

FORM OF RIGHT CERTIFICATE

 

 

FORM OF FACING SIDE OF RIGHT CERTIFICATE

 

Certificate No. _____ __________ Rights

 

NOT EXERCISABLE AFTER THE LATER OF OCTOBER 22, 2025 OR THE FIFTH ANNIVERSARY OF THE DISTRIBUTION DATE (AS THAT TERM IS DEFINED IN THE RIGHTS AGREEMENT) OR EARLIER IF REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY A 15% SHAREHOLDER OR AN AFFILIATE OR ASSOCIATE OF A 15% SHAREHOLDER (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT AND AS THOSE CIRCUMSTANCES ARE SPECIFIED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.

 

RIGHT CERTIFICATE

 

GIGA-TRONICS INCORPORATED

 

This certifies that _______________________, or his, her or its registered assigns, is the registered owner of the number of rights (the “Rights”) set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement dated as of October 12, 2020 (the “Rights Agreement”) between Giga-tronics Incorporated, a California corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, a New York limited liability company (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M., California time, on the later of October 22, 2025, or the fifth anniversary of the Distribution Date at the office or agency of the Rights Agent at American Stock Transfer & Trust Company, 6201 15th Avenue, Brooklyn, New York 11219, or at the office of its successors as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A Junior Participating Preferred Stock (the “Preferred Shares”), of the Company, at an exercise price of $15.00 per Right (the “Exercise Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number of Preferred Shares which may be purchased upon exercise thereof) set forth above, and the Exercise Price per share set forth above, are the number and Exercise Price as of October 22, 2020, based on the Preferred Shares as constituted at such date.

 

As provided in the Rights Agreement, the Exercise Price and the number of Preferred Shares which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events. This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the above-mentioned offices of the Rights Agent.

 

This Right Certificate, with or without other Right Certificates, upon surrender at the office or agency of the Rights Agent at American Stock Transfer & Trust Company, 6201 15th Avenue, Brooklyn, New York 11219, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of Preferred Shares as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised. Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may, but are not required to, be redeemed by the Company at a redemption price of $.001 per Right.

 

B-1

 

 

No fractional Preferred Shares will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-hundredth of a Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof, a cash payment will be made, as provided in the Rights Agreement.

 

No holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or, to receive notice of meetings or other actions affecting shareholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Rights Agreement.

 

This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

 

WITNESS the facsimile signature of the proper officers of the Company. Dated as of ______, ____.

 

	
			ATTEST:

				 	
			GIGA-TRONICS INCORPORATED

			
	 	 	 
	 	 	 
	 	 	
			By:

				 
	
			Secretary

				 	 	
			Chief Executive Officer

			
	 	 	 
	 	 	 
	
			Countersigned:

				 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
			By:

				 	 	 
	 	
			Title:

				 	 

 

B-2

 

 

FORM OF REVERSE SIDE OF RIGHT CERTIFICATE

 

FORM OF ASSIGNMENT

 

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate)

 

 

 

	FOR VALUE RECEIVED	 

	hereby sells, assigns and transfers unto	 

 

	(Please print name and address of transferee)
	 

this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ____________________ Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.

 

Dated: ____________, ____.

 

                             

	 	 	 
	 	Signature	 

                                     

 

Signature Guaranteed:

 

Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States.

 

(To be completed if applicable)

 

The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by a 15% Shareholder or an Affiliate or Associate thereof (as defined in the Rights Agreement).

 

                                     

	 	 	 
	 	Signature	 

 

B-3

 

 

FORM OF REVERSE SIDE OF RIGHT CERTIFICATE -- CONTINUED

 

FORM OF ELECTION TO PURCHASE

 

(To be executed if holder desires

to exercise the Right Certificate)

 

TO: GIGA-TONICS INCORPORATED

 

The undersigned hereby irrevocably elects to exercise _________________ Rights represented by this Right Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights and requests that certificates for such Preferred Shares be issued in the name of:

 

Please insert social security or other identifying number

 

______________________________________________________________________________

          (Please print name and address)

______________________________________________________________________________

 

If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to:

 

Please insert social security or other identifying number

 

______________________________________________________________________________

          (Please print name and address)

______________________________________________________________________________

 

Dated: ___________________, _____

 

	 	 	 
	 	Signature

 

(Signature must conform in all respects to name of holder as specified on the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever)

 

Signature Guaranteed:

 

Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States.

 

The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by a 15% Shareholder or an Affiliate or Associate thereof (as defined in the Rights Agreement).

 

	 	 	 
	 	Signature

 

B-4

 

 

NOTICE

 

The signatures in the foregoing Forms of Assignment and Election must correspond to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.

 

In the event the certification set forth above in the Forms of Assignment and Election is not completed, the Company will deem the Beneficial Owner of the Rights evidenced by this Right Certificate to be a 15% Shareholder or an Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the case of an Assignment, will affix a legend to that effect on any Right Certificates issued in exchange for this Right Certificate.

 

B-5

 

 

Exhibit C

 

Summary of Rights To Purchase Shares of Preferred Stock

 

On October 12, 2020, the Board of Directors of Giga-tronics Incorporated (the “Company”) authorized and declared a dividend of one preferred stock purchase right (a “Right”) for each share of common stock of the Company (the “Common Shares”). The dividend is payable on October 22, 2020 (the “Record Date”) to the holders of record of Common Shares as of the close of business on such date.

 

The following is a brief description of the Rights. It is intended to provide a general description only and is subject to the detailed terms and conditions of a Rights Agreement (the “Rights Agreement”) dated as of October 12, 2020, between the Company and American Stock Transfer & Trust Company, LLC, as Rights Agent (the “Rights Agent”).

 

	
			SECTION 1.

				
			COMMON SHARE CERTIFICATES REPRESENTING RIGHTS.

			

 

Until the Distribution Date (as defined in Section 2 below), (a) the Rights shall not be exercisable, (b) the Rights shall be attached to and trade only together with the Common Shares and (c) the stock certificates representing Common Shares shall also represent the Rights attached to such Common Shares. Common Share certificates issued after the Record Date and prior to the Distribution Date shall contain a notation incorporating the Rights Agreement by reference.

 

	
			SECTION 2.

				
			DISTRIBUTION DATE

			

 

The “Distribution Date” is the earliest of (a) the tenth business day following the date of the first public announcement that any person (other than the Company or certain related entities, and with certain additional exceptions for certain affiliated shareholders whose current aggregate holdings exceed the threshold provided such holdings do not increase materially) has become the beneficial owner of 15% or more of the then outstanding Common Shares (such person is a “15% Shareholder” and the date of such public announcement is the “15% Ownership Date”), (b) the tenth business day (or such later day as shall be designated by the Board of Directors) following the date of the commencement of, or the announcement of an intention to make, a tender offer or exchange offer, the consummation of which would cause any person to become a 15% Shareholder or (c) the first date, on or after the 15% Ownership Date, upon which the Company is acquired in a merger or other business combination in which the Company is not the surviving corporation or in which the outstanding Common Shares are changed into or exchanged for stock or assets of another person, or upon which 50% or more of the Company's consolidated assets or earning power are sold (other than in transactions in the ordinary course of business). In calculating the percentage of outstanding Common Shares that are beneficially owned by any person, such person shall be deemed to beneficially own any Common Shares issuable upon the exercise, exchange or conversion of any options, warrants or other securities beneficially owned by such person; provided, however, that such Common Shares issuable upon such exercise shall not be deemed outstanding for the purpose of calculating the percentage of Common Shares that are beneficially owned by any other person.

 

Upon the close of business of the Distribution Date, the Rights shall separate from the Common Shares, Right certificates shall be issued, and the Rights shall become exercisable to purchase Preferred Shares as described in Section 5 below.

 

C-1

 

 

	
			SECTION 3.

				
			ISSUANCE OF RIGHT CERTIFICATES

			

 

As soon as practicable following the Distribution Date, separate certificates representing only Rights shall be mailed to the holders of record of Common Shares as of the close of business on the Distribution Date, and such separate Right certificates alone shall represent such Rights from and after the Distribution Date.

 

	
			SECTION 4.

				
			EXPIRATION OF RIGHTS

			

 

The Rights shall expire on October 22, 2025, unless earlier redeemed or exchanged, unless the Distribution Date has previously occurred and the Rights have separated from the Common Shares, in which case the Rights will remain outstanding for five years.

 

	
			SECTION 5.

				
			EXERCISE OF RIGHTS

			

 

Unless the Rights have expired or been redeemed or exchanged, they may be exercised, at the option of the holders, pursuant to paragraphs (a), (b) or (c) below. No Right may be exercised more than once or pursuant to more than one of such paragraphs. From and after the first event of the type described in paragraphs (b) or (c) below, each Right that is beneficially owned by a 15% Shareholder or that was attached to a Common Share that is subject to an option beneficially owned by a 15% Shareholder shall be void.

 

Right to Purchase Preferred Shares. From and after the close of business on the Distribution Date, each Right (other than a Right that has become void) shall be exercisable to purchase one one-hundredth of a share of Series A Junior Participating Cumulative Preferred Stock of the Company (the “Preferred Shares”), at an exercise price of $15.00 (the “Exercise Price”). Prior to the Distribution Date, the Company may substitute for all or any portion of the Preferred Shares that would otherwise be issuable upon exercise of the Rights, cash, assets or other securities having the same aggregate value as such Preferred Shares. The Preferred Shares are nonredeemable and, unless otherwise provided in connection with the creation of a subsequent series of preferred stock, are subordinate to any other series of the Company's preferred stock whether issued before or after the issuance of the Preferred Shares. The Preferred Shares may not be issued except upon exercise of Rights. The holder of a Preferred Share is entitled to receive when, as and if declared, cash and non-cash dividends in an amount equal to the greater of (a) $0.25 per share or (b) subject to appropriate adjustments in certain events, 100 times the dividends declared on each Common Share, other than a dividend payable only in additional Common Shares. In the event of liquidation, the holders of Preferred Shares shall be entitled to receive a liquidation payment in an amount equal to the greater of (1) $1.00 per one-one hundredth of a Preferred Share, plus all accrued and unpaid dividends and distributions on the Preferred Shares, or (2) an amount equal to 100 times the aggregate amount to be distributed per Common Share. Each Preferred Share has 100 votes per share, voting together with the Common Shares. In the event of any merger, consolidation or other transaction in which Common Shares are exchanged, the holder of a Preferred Share shall be entitled to receive 100 times the amount received per Common Share. The rights of the Preferred Shares as to dividends, voting and liquidation preferences are protected by antidilution provisions. It is anticipated that the value of one one-hundredth of a Preferred Share should approximate not less than the value of one Common Share.

 

C-2

 

 

Right to Purchase Common Shares of the Company. From and after the close of business on the tenth business day following the 15% Ownership Date, each Right (other than a Right that has become void) shall be exercisable to purchase, at the Exercise Price (initially $15.00), Common Shares with a market value equal to four times the Exercise Price. If the Company does not have sufficient Common Shares available for all Rights to be exercised, the Company shall substitute for all or any portion of the Common Shares that would otherwise be issuable upon the exercise of the Rights, cash, assets or other securities having the same aggregate value as such Common Shares.

 

Right to Purchase Common Stock of a Successor Corporation. If, on or after the 15% Ownership Date, (i) the Company is acquired in a merger or other business combination in which the Company is not the surviving corporation, (ii) the Company is the surviving corporation in a merger or other business combination in which all or part of the outstanding Common Shares are changed into or exchanged for stock or assets of another person or (iii) 50% or more of the Company's consolidated assets or earning power are sold (other than in transactions in the ordinary course of business), then each Right (other than a Right that has become void) shall thereafter be exercisable to purchase, at the Exercise Price (initially $15.00), securities of the surviving corporation or purchaser, respectively, with an aggregate market value equal to four times the Exercise Price.

 

	
			SECTION 6.

				
			ADJUSTMENTS TO PREVENT DILUTION

			

 

The Exercise Price, the number of outstanding Rights and the number of Preferred Shares or Common Shares issuable upon exercise of the Rights are subject to adjustment from time to time as set forth in the Rights Agreement in order to prevent dilution. With certain exceptions, no adjustment in the Exercise Price shall be required until cumulative adjustments require an adjustment of at least 1%.

 

	
			SECTION 7.

				
			CASH PAID INSTEAD OF ISSUING FRACTIONAL SECURITIES

			

 

No fractional securities shall be issued upon exercise of a Right (other than fractions of Preferred Shares that are integral multiples of one one-hundredth of a Preferred Share and that may, at the election of the Company, be evidenced by depositary receipts) and in lieu thereof, an adjustment in cash shall be made based on the market price of such securities on the last trading date prior to the date of exercise.

 

	
			SECTION 8.

				
			REDEMPTION

			

 

At any time prior to the earlier of (a) the tenth business day (or such later day as shall be designated by the Board of Directors) following the date of the commencement of, or the announcement of an intention to make, a tender offer or exchange offer, the consummation of which would cause any person to become a 15% Shareholder, (b) the tenth business day after the 15% Ownership Date or (c) the first event of the type giving rise to exercise rights under Section 5(c) above, the Board of Directors may, at its option, direct the Company to redeem the Rights in whole, but not in part, at a price of $.001 per Right (the “Redemption Price”), and the Company shall so redeem the Rights. Immediately upon such action by the Board of Directors (the date of such action is the “Redemption Date”), the right of the holders of Rights thereafter shall be to receive the Redemption Price.

 

	
			SECTION 9.

				
			EXCHANGE

			

 

At any time after the 15% Ownership Date and prior to the first date thereafter upon which a 15% Shareholder shall be the beneficial owner of 50% or more of the outstanding Common Shares, the Board of Directors may, at its option, direct the Company to exchange all, but not less than all, of the then outstanding Rights for Common Shares at an exchange ratio per Right equal to that number of Common Shares which, as of the date of the Board of Directors' action, has a current market price equal to the difference between the Exercise Price and the current market price of the shares that would otherwise be issuable upon exercise of a Right on such date (the “Exchange Ratio”), and the Company shall so exchange the Rights. Immediately upon such action by the Board of Directors, the right to exercise Rights shall terminate and the only right of the holders of Rights thereafter shall be to receive a number of Common Shares equal to the Exchange Ratio.

 

C-3

 

 

	
			SECTION 10.

				
			NO SHAREHOLDER RIGHTS PRIOR TO EXERCISE

			

 

Until a Right is exercised, the holder thereof, as such, shall have no rights as a Shareholder of the Company (other than rights resulting from such holder's ownership of Common Shares), including, without limitation, the right to vote or to receive dividends.

 

	
			SECTION 11.

				
			AMENDMENT OF RIGHTS AGREEMENT

			

 

The Board of Directors may, from time to time, without the approval of any holder of Rights, direct the Company and the Rights Agent to supplement or amend any provision of the Rights Agreement in any manner, whether or not such supplement or amendment is adverse to any holder of Rights, and the Company and the Rights Agent shall so supplement or amend such provision; provided, however, that from and after the earliest of (a) the tenth business day (or such later day as shall be designated by the Board of Directors) following the date of the commencement of, or the announcement of an intention to make, a tender offer or exchange offer, the consummation of which would cause any person to become a 15% Shareholder, (b) the 15% Ownership Date, (c) the first event of the type giving rise to exercise rights under Section 5(c) above, or (d) the Redemption Date, the Rights Agreement shall not be supplemented or amended in any manner that would materially and adversely affect any holder of outstanding Rights other than a 15% Shareholder.

 

C-4EX-10.1

 Exhibit 10.1 

EXECUTION VERSION 
 THIS RESTRUCTURING SUPPORT
AGREEMENT DOES NOT PURPORT TO SUMMARIZE ALL OF THE TERMS, CONDITIONS, REPRESENTATIONS, WARRANTIES, AND OTHER PROVISIONS WITH RESPECT TO THE TRANSACTIONS DESCRIBED HEREIN, WHICH TRANSACTIONS WILL BE SUBJECT TO THE COMPLETION OF DEFINITIVE DOCUMENTS
INCORPORATING THE TERMS SET FORTH HEREIN AND THE CLOSING OF ANY TRANSACTION SHALL BE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN SUCH DEFINITIVE DOCUMENTS AND THE APPROVAL RIGHTS OF THE PARTIES SET FORTH HEREIN AND IN SUCH DEFINITIVE DOCUMENTS,
IN EACH CASE, SUBJECT TO THE TERMS HEREOF. 
 RESTRUCTURING SUPPORT AGREEMENT 

This RESTRUCTURING SUPPORT AGREEMENT (as amended, supplemented or otherwise modified from time to time in accordance with the terms hereof,
this “Agreement”), dated as of September 20, 2020, is entered into by and among: 
 (i) Garrett Motion Inc.
(“GMI”), a company incorporated under the Laws of Delaware; 
 (ii) each of its Affiliates listed on Exhibit
B to this Agreement that have executed and delivered counterpart signature pages to this Agreement to counsel to the other Parties (together with GMI, each a “Company Party” and, collectively, the
“Company” or “Debtors”); and 
 (iii) the undersigned Lenders that have executed and
delivered counterpart signature pages to this Agreement, a Joinder, or a Transfer Agreement to counsel to the Company Parties, each on its own behalf and on behalf of each of its Affiliates that holds any Claims against the Company Parties or their
Affiliates, including Loan Claims, whether as of the date hereof or from time to time hereafter (collectively, the “Consenting Lenders”).1 

The Company, each Consenting Lender, and any subsequent person or entity that becomes a party hereto in accordance with the terms hereof are
referred herein as the “Parties” and individually as a “Party.” 
 RECITALS

 WHEREAS, the Company intends to enter into certain transactions (the “Restructuring Transactions”)
in furtherance of a global restructuring of the Company (the “Restructuring”), which includes the acquisition of substantially all of the business of the Company through the acquisition of substantially all of the assets of
certain Debtors and of the stock of certain Debtors and other subsidiaries (the “Acquisition”), which, subject to the Milestones (as defined below), is anticipated to be effected through a plan of reorganization (the
“Plan”), a solicitation of votes therefor (the “Solicitation”) pursuant to chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the
“Bankruptcy Code”), and the commencement by the Company of voluntary cases (the “Chapter 11 Cases”) under the Bankruptcy Code, in the United States Bankruptcy Court for the Southern District of New
York (the “Bankruptcy Court”); 
  
  

	1 	 For the avoidance of doubt, any Consenting Lender that is a Qualified Marketmaker shall be required to comply
with the terms and obligations of this Agreement solely to the extent provided in Section 2 hereof. 

 WHEREAS, the Restructuring Transactions in connection with the Plan include those
transactions described in the Restructuring Term Sheet attached hereto as Exhibit C (the “Restructuring Term Sheet”); 

WHEREAS, as of the date hereof, the Consenting Lenders hold, in the aggregate, approximately 61% of the aggregate outstanding principal
amount of the Loan Claims; 
 WHEREAS, the Consenting Lenders and the Company desire to express to each other their mutual support
and commitments in respect of the matters discussed in the Restructuring Term Sheet and hereunder; 
 NOW, THEREFORE, in
consideration of the premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as
follows: 
 1. Certain Definitions. 

(a) As used in this Agreement, each capitalized term set forth in Exhibit A shall have the meaning ascribed to it therein. 

(b) When a reference is made in this Agreement to a Section, Exhibit or Schedule, such reference shall be to a Section, Exhibit or Schedule,
respectively, of or attached to this Agreement unless otherwise indicated. Unless the context of this Agreement otherwise requires, (a) words using the singular or plural also include the plural or singular, respectively, (b) the terms
“hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement, (c) the words “include,” “includes” and “including” when used herein shall be deemed in
each case to be followed by the words “without limitation,” (d) the word “or” shall not be exclusive and shall be read to mean “and/or” and (e) any reference to dollars or “$” shall be to United States
dollars. The Parties agree that they have been represented by legal counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that
ambiguities in an agreement or other document shall be construed against the party drafting such agreement or document. 
 2.
Agreements of the Consenting Lender. 
 (a) Voting; Support. Each Consenting Lender agrees that, during the Support Period,
such Consenting Lender shall: 
 (i) support and take all commercially reasonable actions reasonably requested in writing by
the Company to facilitate the financing contemplated by the DIP Credit Agreement (the “DIP Financing”) on the terms and conditions set forth in Annex B to the Restructuring Term Sheet (the “DIP Facility Term
Sheet”), including irrevocably consenting to and directing, pursuant to the DIP Order, the Loan Agent to consent to 

  
 2 

 
(including, in each case, pursuant to an amendment to the Credit Agreement (the “Credit Agreement Amendment”) pursuant to which each Consenting Lender shall irrevocably
consent to, and direct the Loan Agent to consent to), (x) the DIP Financing, the priming liens and security interests, use of cash collateral, adequate protection arrangements, intercreditor agreements and the other documents, instruments and
arrangements contemplated by the DIP Facility Term Sheet and otherwise acceptable by Requisite Consenting Lenders and (y) direct the Loan Agent to enter into intercreditor agreements, new security documents or amendments to existing documents
to give effect to the priming liens and security interests referred to in the foregoing clause (y) and, if necessary, to resign as collateral agent under the Credit Agreement and the other security documents relating thereto in order to permit
the Agent (as defined in the DIP Facility Term Sheet) to hold collateral on behalf of the lenders under the DIP Financing and under the Credit Agreement; provided that, notwithstanding anything herein to the contrary, the DIP Documents
(including the DIP Credit Agreement and amendments thereto), any agreement documenting the DIP Facility, and the DIP Orders) shall be in form and substance acceptable to the Requisite Consenting Lenders; 

(ii) support and take all commercially reasonable actions reasonably requested by the Company to facilitate the consummation of
the Acquisition, including consenting to, and directing the Loan Agent to, (A) release and discharge all liens, encumbrances, and interests in Collateral as permitted by the Loan Documents and (B) release and discharge all subsidiary
guarantees under the Loan Documents and all guarantees under the Subordinated Bendix Indemnification Guarantee Agreement as permitted by the Loan Documents and the Intercreditor Agreement, in each of cases (A) and (B) concurrent with the
consummation of the Acquisition; provided that, notwithstanding anything herein to the contrary, the SAPA, Confirmation Order, and all other documentation with respect to the Acquisition shall be in form and substance reasonably acceptable to
the Requisite Consenting Lenders (it being understood that (1) the SAPA and all related documentation dated as of the date hereof and a Confirmation Order that gives effect to the terms of the SAPA and the Restructuring Term Sheet are deemed
acceptable to the Requisite Consenting Lenders and (2) any amendments or modifications to the SAPA, Confirmation Order, or any such documentation to effect or implement the Asset Sale Election (as defined in the SAPA) are acceptable to the
Requisite Consenting Lenders); 
 (iii) subject to receipt of a Disclosure Statement and related solicitation materials
approved by an order of the Bankruptcy Court (A) timely vote or cause to be voted its Claims (including, without limitation, all claims arising under the Credit Agreement) to accept an Acceptable Plan by delivering its duly executed and
completed ballot or ballots, as applicable, accepting such Acceptable Plan on a timely basis, and (B) not change or withdraw such vote (or cause or direct such vote to be changed or withdrawn); provided, however, that such vote
may, upon written notice to the Company and the other Parties, be revoked (and, upon such revocation, deemed void ab initio) by any Consenting Lender at any time following the expiration of the Support Period; provided further, that,
notwithstanding anything herein to the contrary, the Acceptable Plan, Disclosure Statement, Confirmation Order with respect to such Acceptable Plan, and all other documentation related to the Acceptable Plan shall be in form and substance reasonably
acceptable to the Requisite Consenting Lenders; 

  
 3 

 (iv) use commercially reasonable efforts to execute and implement the
applicable Definitive Documents that are consistent with this Agreement and to which it is required to be a party; 
 (v)
timely vote or cause to be voted its Claims against any plan, plan proposal, restructuring proposal, offer of dissolution, assignment for the benefit of creditors, winding up, liquidation, sale or disposition, reorganization, merger, business
combination, joint venture, debt or equity financing or re-financing, recapitalization or other restructuring of the Company (including, for the avoidance of doubt, a transaction premised on an asset sale
under section 363 of the Bankruptcy Code) other than an Acceptable Plan (each, an “Alternative Restructuring”); 

(vi) not directly or indirectly, through any person or entity (including, without limitation, any administrative agent or
collateral agent), seek, solicit, propose, support, assist, engage in negotiations in connection with or participate in the formulation, preparation, filing or prosecution of any Alternative Restructuring or object to or take any other action that
is inconsistent with or that would reasonably be expected to prevent, interfere with, delay or impede the Solicitation, approval of the Disclosure Statement, or the confirmation and consummation of an Acceptable Plan and the consummation of the
Restructuring; 
 (vii) not object to, delay, impede, or take any other action to interfere with the (A) acceptance,
implementation, or consummation of the Restructuring; or encourage any person or entity to do any of the foregoing or (B) Company Parties’ ownership and possession of their assets, wherever located, or interfere with the automatic stay
arising under section 362 of the Bankruptcy Code unless otherwise permitted under the Definitive Documents;     

(viii) not 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 an Acceptable Plan; 

(ix) agree to provide, and to not opt out of, the releases of the Released Parties consistent with the terms of the
Restructuring Term Sheet; provided that the form of such release shall be reasonably acceptable to such Consenting Lender; 

(x) use commercially reasonably efforts to give any notice, order, instruction, or direction to the Loan Agent reasonably
requested by the Company and necessary to give effect to the Restructuring; 
 (xi) not exercise, or direct any other person
to exercise, any right or remedy for the enforcement, collection, or recovery of any Claims, including rights or remedies arising from or asserting or bringing any Claims under or with respect to the Credit Agreement that are inconsistent with this
Agreement or the Definitive Documents; 

  
 4 

 (xii) comply with, and use commercially reasonable efforts to enforce
compliance with, the standstill and other applicable provisions of the Intercreditor Agreement and the Subordinated Bendix Indemnity Agreements; 

(xiii) support and take all commercially reasonable actions reasonably requested by the Company to facilitate the Solicitation
of an Acceptable Plan, obtain approval of the Disclosure Statement, and obtain confirmation and consummation of the Acceptable Plan and the Restructuring; and 

(xiv) to the extent any legal or structural impediment arises that would prevent, hinder, or delay the consummation of the
Restructuring, negotiate appropriate additional or alternative provisions to address any such impediment. 
 (b) Transfers. Each
Consenting Lender agrees that, during the Support Period, such Consenting Lender shall not sell, transfer, loan, issue, assign or otherwise dispose of (each, a “Transfer”), directly or indirectly, in whole or in part, any of
its Claims or any option thereon or any right or interest therein or any other claims against or interests in the Company (including the grant of any proxy or the deposit of any Claims against or interests in the Company into a voting trust or the
entry into a voting agreement with respect thereto), unless the transferee thereof either (i) is a Consenting Lender or (ii) prior to such Transfer, agrees in writing for the benefit of the Parties to become a Consenting Lender and to be
bound by all of the terms of this Agreement applicable to Consenting Lender (including with respect to any and all claims or interests it already may hold against or in the Company prior to such Transfer) by executing a joinder agreement, a form of
which is attached hereto as Exhibit D (a “Joinder Agreement”), and delivering an executed copy thereof within two (2) Business Days of such execution, to (A) Sullivan & Cromwell LLP
(“S&C”), as counsel to the Company, and (B) Lender Counsel, in which event (x) the transferee (including the Consenting Lender transferee, if applicable) shall be deemed to be a Consenting Lender hereunder and
(y) the transferor shall be deemed to relinquish its rights (and be released from its obligations) under this Agreement to the extent of such Transferred rights and obligations; provided that a Consenting Lender may Transfer its Claims
to an entity that is acting in its capacity as a Qualified Marketmaker without the requirement that the Qualified Marketmaker execute a Joinder Agreement, provided that (I) any subsequent Transfer by such Qualified Marketmaker of the
right, title, or interest in such Claims is to a transferee that is or becomes a Consenting Lender at the time of such Transfer and (II) the Qualified Marketmaker complies with Section 2(d) hereof. Notwithstanding anything else
herein, to the extent that a Consenting Lender is acting in its capacity as a Qualified Marketmaker, it may Transfer any right, title, or interest in such Claims that the Qualified Marketmaker acquires from a holder of the Claims who is not a
Consenting Lender without the requirement that the transferee be or became a Consenting Lender. Nothing herein shall modify, amend, or replace the restrictions and limitations on the Consenting Lenders’ ability to Transfer Claims as provided in
the Credit Agreement. 
 (c) Additional Claims or Interests. To the extent any Consenting Lender (i) acquires additional Claims,
(ii) holds or acquires any other claims against the Company entitled to vote on the Acceptable Plan, (iii) holds or acquires any Interests in the Company entitled to vote on the Acceptable Plan or (iv) Transfers any Claims, then, in
each case, each such Consenting Lender 

  
 5 

 
shall promptly (in no event less than three (3) Business Days following such acquisition or transaction) notify S&C and Lender Counsel in writing and each such Consenting Lender agrees
with respect to (i) through (iii) above that such additional Claims or other claims or Interests shall be subject to this Agreement, and that, for the duration of the Support Period, it shall vote (or cause to be voted) any such additional
Claims or other claims or Interests entitled to vote on the Acceptable Plan in a manner consistent with Section 2(a) hereof (and in the event the Solicitation has already commenced, no later than two (2) Business Days following the
acquisition of such Claim, claims or Interests). 
 (d) Obligations of Qualified Marketmaker. If at the time of a proposed Transfer of
Claims to a Qualified Marketmaker, such Claims (i) may be voted on the Acceptable Plan, the proposed transferor Consenting Lender must first vote such Claims in accordance with Section 2(a) or (ii) have not yet been and may not
yet be voted on the Acceptable Plan and such Qualified Marketmaker does not Transfer such Claims or Interests to a subsequent transferee prior to the third (3rd) Business Day prior to the expiration of the applicable voting deadline (such date, the
“Qualified Marketmaker Joinder Date”), such Qualified Marketmaker shall be required to (and the transfer documentation to the Qualified Marketmaker shall have provided that it shall), on the first (1st) Business Day
immediately following the Qualified Marketmaker Joinder Date, become a Consenting Lender with respect to such Claims in accordance with the terms hereof (including the obligation to vote in favor of the Acceptable Plan) and shall vote in favor of
the Acceptable Plan in accordance with the terms hereof; provided that, the Qualified Marketmaker shall automatically, and without further notice or action, no longer be a Consenting Lender with respect to such Claims at such time that the
transferee of such Claims becomes a Consenting Lender, with respect to such Claims. 
 (e) Notwithstanding anything to the contrary herein,
nothing in this Agreement shall limit, condition or restrict, in any way, any Consenting Lender, in its capacity as a lender under the DIP Credit Agreement, from (i) exercising any rights and remedies under the DIP Credit Agreement (and any
related credit documents, including the DIP Orders), (ii) waiving or forbearing with respect to any Default or Event of Default as defined in the DIP Credit Agreement and DIP Orders, (iii) amending, modifying or supplementing the DIP Credit
Agreement (or any related credit documents), or (iv) refusing to make additional advances under the DIP Credit Agreement, in each case, in their sole and absolute discretion and in accordance with the terms of the DIP Credit Agreement (or
related credit documents and the DIP Orders). 
 (f) The Company understands that the Consenting Lenders are engaged in a wide range of
financial services and businesses, and, in furtherance of the foregoing, the Company acknowledges and agrees that the obligations set forth in this Agreement shall only apply to the trading desk(s) and/or business group(s) of the Consenting Lender
that principally manage and/or supervise the Consenting Lender’s investment in the Company, and shall not apply to any other trading desk or business group of the Consenting Lender so long as they are not acting at the direction or for the
benefit of such Consenting Lender. Further, notwithstanding anything in this Agreement to the contrary, the Parties agree that, in connection with the delivery of signature pages to this Agreement by a Consenting Lender that is a Qualified
Marketmaker before the occurrence of conditions giving rise to the Support Effective Date, such Consenting Lender shall be a Consenting Lender hereunder solely with respect to the Loans listed on such signature pages and shall not be required to
comply with this Agreement for any other Claims it may hold. 

  
 6 

 3. Agreements of the Company. 

(a) Covenants. The Company agrees that, during the Support Period, the Company shall: 

(i) use commercially reasonable efforts (i) to pursue the Restructuring on the terms and in accordance with the Milestones
set forth in this Agreement, including by negotiating the Definitive Documents in good faith, and (ii) cooperate with the Consenting Lenders to obtain necessary Bankruptcy Court approval of the Definitive Documents to consummate the
Restructuring; 
 (ii) not take any action, and not encourage any other person or entity to, take any action, directly or
indirectly, that would reasonably be expected to, breach or be inconsistent with this Agreement, or take any other action, directly or indirectly, that would reasonably be expected to interfere with the acceptance or implementation of the
Restructuring, this Agreement, the Acquisition (as applicable), or an Acceptable Plan; 
 (iii) deliver draft copies of all
Definitive Documents the Company intends to file with the Bankruptcy Court to Lender Counsel, at least (A) three (3) Business Days prior to the date when the Company intends to file any such document (provided that if delivery of such
document at least three (3) Business Days in advance is not reasonably practicable under the circumstances, such document shall be delivered as soon as otherwise practicable prior to filing) and (B) at least one (1) calendar day (or
such shorter review period as necessary or appropriate) prior to the date when the Company intends to file any other material pleading with the Bankruptcy Court (but excluding retention applications, fee applications, and any declarations in support
thereof or related thereto); 
 (iv) deliver periodic updates and reports regarding the Company Parties’ financial
performance, the sale process, the Chapter 11 Cases, and as reasonably requested by the Consenting Lenders; 
 (v) use
commercially reasonable efforts to seek additional support for the Restructuring from their other material stakeholders to the extent reasonably prudent or requested by the Consenting Lenders; 

(vi) negotiate in good faith and use commercially reasonable efforts to execute and deliver any appropriate additional or
alternative agreements to address any legal, financial, or structural impediment to the Restructuring that are necessary to effectuate the Restructuring in accordance with the terms hereof; 

(vii) to the extent that any legal or structural impediment arises that would prevent, hinder, or delay the consummation of the
transactions contemplated in this Agreement or the Acceptable Plan, negotiate in good faith appropriate additional or alternative provisions to address any such impediment, in consultation with the Requisite Consenting Lenders; 

  
 7 

 (viii) maintain its good standing under the laws of the state or other
jurisdiction in which they are incorporated or organized; 
 (ix) as soon as reasonably practicable, notify the Consenting
Lenders in writing of any governmental or third-party complaints, litigations, investigations, or hearings (or communications indicating that the same may be contemplated or threatened); 

(x) if any of the Company Parties know of a material breach by any Company Party or any Consenting Lender of the obligations,
representations, warranties, or covenants of the Company Parties or Consenting Lenders (as applicable) set forth in this Agreement, furnish prompt written notice (and in any event within three (3) Business Days of such actual knowledge) to the non-breaching Consenting Lenders and promptly take all reasonable and practicable remedial action necessary to cure such material breach by any such Company Party or Consenting Lender, as applicable; 

(xi) provide the Consenting Lenders with a schedule of all the Company’s existing material employee bonus obligations
plans, employee retention plans, employee incentive plans, or other similar obligations on the Support Effective Date; 

(xii) timely file a formal objection to any motion filed with the Bankruptcy Court by a third-party seeking the entry of an
order (A) directing the appointment of a trustee or examiner (with expanded powers beyond those set forth in sections 1106(a)(3) and (4) of the Bankruptcy Code), (B) converting the Chapter 11 Cases to cases under chapter 7 of the
Bankruptcy Code, (C) dismissing the Chapter 11 Cases, (D) modifying or terminating the Debtors’ exclusive right to file and/or solicit acceptances of a plan of reorganization, as applicable; or (E) challenging the validity,
enforceability, perfection, or priority of, or seeking avoidance or subordination of, any portion of the Loans, or asserting any other cause of action against and/or with respect or relating to such Claims or the prepetition liens securing such
Claims; and 
 (xiii) not seek, solicit, or support any Alternative Restructuring, other than the Restructuring, or cause or
allow any of their agents or representatives to solicit any Alternative Restructuring, unless such Alternative Restructuring provides for no less favorable treatment of the Loan Claims than is contemplated by the Restructuring. Prior to the earlier
of (A) making a public announcement regarding their intention to accept an Alternative Restructuring or (B) entering into a definitive agreement with respect to an Alternative Restructuring, the Debtors shall have terminated this Agreement
pursuant to Section 5(c)(i). The Debtors shall, to the extent practicable and consistent with their fiduciary duties, give Lender Counsel not less than four (4) Business Days’ prior written notice before exercising such
termination right in accordance with this Agreement. At all times prior to the earlier of the date on which the Debtors (A) enter into a definitive agreement in respect of such an Alternative Restructuring or (B) make a public announcement
regarding their intention to do so, the Debtors shall provide to Lender Counsel a copy of any written offer or proposal (and notice and a description of any oral offer or proposal) for such Alternative Restructuring within five (5) Business
Days of the Debtors’ or their advisors’ receipt of such offer or proposal. 

  
 8 

 (b) Negative Commitments. During the Support Period, each of the Company Parties
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; 
 (ii) 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 described in this Agreement; 

(iii) propose or modify a plan of reorganization, in whole or in part, in a manner that is not consistent with this Agreement
in all material respects; or 
 (iv) file any motion, pleading, or Definitive Documents 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. 

Notwithstanding the foregoing, any action taken by the Debtors in accordance with the Bidding Procedures (as defined below) as approved by the Bankruptcy
Court or any other order of the Bankruptcy Court shall not constitute a breach of this Section 3(b). 
 (c) Automatic
Stay. The Company acknowledges and agrees and shall not dispute that after the commencement of the Chapter 11 Cases, the giving of notice of termination of this Agreement by any Party pursuant to this Agreement shall not be a violation of the
automatic stay under section 362 of the Bankruptcy Code (and the Company hereby waives, to the fullest extent permitted by law, the applicability of the automatic stay to the giving of such notice); provided that nothing herein shall
prejudice any Party’s rights to argue that the giving of notice of default or termination was not proper under the terms of this Agreement. 

4. Priming Consent Fee 

Consenting Lenders that have consented to the priming liens and security interests and other transactions contemplated by the DIP Facility Term
Sheet and this Agreement (the “Consent Fee Lenders”) by executing and delivering counterpart signature pages of this Agreement and the Credit Agreement Amendment to counsel to the Company as of 12:00 P.M., Eastern Prevailing
Time, on September 18, 2020 (the “Consent Fee Deadline”) shall earn the Priming Consent Fee as set forth herein, which shall be paid on the Support Effective Date in the form of cash, provided that the Priming
Consent Fee shall only be earned as described herein in the event that the Consent Fee Lenders constitute “Required Lenders” under the Credit Agreement, provided further that the Consent Fee Deadline may be extended by mutual
agreement between the Company and the DIP Agent, in which case the Priming Consent Fee shall be paid on such date as determined by the Company and the DIP Agent. 

  
 9 

 5. Termination of Agreement. 

(a) Termination by Notice. This Agreement shall terminate three (3) Business Days following the delivery of notice, delivered in
accordance with Section 22 hereof, from the Requisite Consenting Lenders to the Company at any time after and during the continuance of any Lender Termination Event (defined below). In addition, this Agreement shall terminate three
(3) Business Days following the delivery of notice, delivered in accordance with Section 22 hereof, from any Company Party to the Requisite Consenting Lenders at any time after the occurrence and during the continuance of any
Company Termination Event (defined below). Notwithstanding the foregoing, no Party may exercise any of its respective termination rights as set forth herein if such Party is in material breach of this Agreement or a breach of this Agreement by such
Party has given rise to the events or circumstances permitting termination. 
 (b) A “Lender Termination Event” shall
mean the following: 
 (i) an Event of Default under the DIP Credit Agreement has occurred and is continuing; 

(ii) the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any
ruling, judgment or order enjoining the consummation of or rendering illegal the Acceptable Plan or the Restructuring, and such ruling, judgment or order has not been stayed, reversed or vacated within ten (10) Business Days after such
issuance; 
 (iii) the treatment of the Loans in the Plan is modified in any manner or the SAPA is modified in any manner
adverse to the Lenders (it being understood that any amendments or modifications to the SAPA or the Plan to effect or implement the Asset Sale Election are not in any manner adverse to the Lenders); 

(iv) the Bankruptcy Court enters an order (A) directing the appointment of an examiner with expanded powers or a trustee
in the Chapter 11 Cases, (B) converting any of the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, or (C) dismissing any of the Chapter 11 Cases; 

(v) the Milestones set forth in Section 8 have not been achieved, extended, or waived by the date identified for
completion of such Milestone (as such date may be extended or waived with the written consent of the Requisite Consenting Lenders; 

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

(vii) entry of a DIP Order that is not acceptable to the Requisite Consenting Lenders; 

(viii) entry of an order that grants relief terminating, annulling, or materially 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 were granted, would have a material adverse effect on the consummation of the Restructuring; 

  
 10 

 (ix) the Company withdraws the Acceptable Plan as filed or files any plan of
reorganization or liquidation or disclosure statement that is not an Acceptable Plan; 
 (x) if the Company files any motion,
application, or adversary proceeding challenging the validity, enforceability, perfection, or priority of, or seeking avoidance or subordination of, any portion of the Consenting Lenders’ Loan Claims; 

(xi) the Company files a motion, application, or adversary proceeding (or the Company supports any such motion, application, or
adversary proceeding filed or commenced by any third party) (A) challenging the validity, enforceability, perfection, or priority of, or seeking avoidance or subordination of, any portion of the Loan Claims or asserting any other cause of
action against the Consenting Lenders or with respect or relating to such Loan Claim, the Credit Agreement or any Loan Document (as such term is defined in the Credit Agreement) or the prepetition liens securing the Loan Claims or
(B) challenging the validity, enforceability, perfection, or priority of, or seeking avoidance or subordination of, any portion of the Loan Claims or asserting any other cause of action against the Consenting Lenders or with respect or relating
to such Loan Claims or the prepetition liens securing the Loan Claims; 
 (xii) the Company loses the exclusive right to file
a plan or plans of reorganization or to solicit acceptances thereof pursuant to section 1121 of the Bankruptcy Code; 

(xiii) the commencement of an involuntary case against the Company or the filing of an involuntary petition seeking bankruptcy,
winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief in respect of the Company, or their debts, or of a substantial part of their assets, under any federal, state or foreign bankruptcy, insolvency,
administrative receivership or similar law now or hereafter in effect (provided that such involuntary proceeding is not dismissed within a period of thirty (30) days after the filing thereof) or if any court grants the relief sought in such
involuntary proceeding; 
 (xiv) without the prior consent of the Requisite Consenting Lenders, the Company
(A) voluntarily commences any case or files any petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency,
administrative receivership or similar law now or hereafter in effect except consistent with this Agreement, (B) consents to the institution of, or fails to contest in a timely and appropriate manner, any involuntary proceeding or petition
described above, (C) files an answer admitting the material allegations of a petition filed against it in any proceeding, (D) applies for or consents to the appointment of a receiver, administrator, administrative receiver, trustee,
custodian, sequestrator, conservator or similar official, trustee or an examiner pursuant to section 1104 of the Bankruptcy Code in any of the Chapter 11 Cases, (E) makes a general assignment or arrangement for the benefit of creditors or
(F) takes any corporate action for the purpose of authorizing any of the foregoing; or 

  
 11 

 (xv) the Company breaches any of the undertakings, representations,
warranties or covenants of the Company set forth herein in any material respect which remains uncured for a period of five (5) Business Days after the receipt of written notice of such breach from Requisite Consenting Lenders. 

(c) A “Company Termination Event” shall mean any of the following: 

(i) the board of directors, managers, members or partners (or comparable governing body), as applicable, of any Company Party
has determined in the exercise of its fiduciary duties and based on advice of counsel to pursue an Alternative Restructuring and the Company and Requisite Consenting Lenders have not agreed to amend this Agreement as appropriate to facilitate the
Alternative Restructuring; 
 (ii) the issuance by any governmental authority, including any regulatory authority or court of
competent jurisdiction, of any ruling, judgment or order enjoining the consummation of or rendering illegal the Plan or the Restructuring, and such ruling, judgment or order has not been stayed, reversed or vacated within ten (10) Business Days
after such issuance; or 
 (iii) any Consenting Lender breaches any of the undertakings, representations, warranties or
covenants of such Consenting Lender set forth herein in any material respect which remains uncured for a period of five (5) Business Days after the receipt of written notice of such breach from the Company, but only if Consenting Lenders who
have not so breached this Agreement hold less than 662⁄3% of the aggregate principal amount of Loan Claims. 

(d) Mutual Termination. This Agreement may be terminated by mutual agreement of the Company Parties and the Requisite Consenting Lenders
upon the receipt of written notice delivered in accordance with Section 22 hereof. 
 (e) Automatic Termination. This
Agreement also shall terminate automatically without any further required action or notice immediately upon the earlier of the following: (i) the Plan Effective Date, (ii) 11:59 P.M. (Eastern Time) March 31, 2021 or (iii) upon the
termination of the SAPA in accordance with Article VIII therein, unless, in the case of clause (iii), such termination occurs in connection with the Debtors’ implementation of another Acceptable Plan. 

(f) Effect of Termination. Subject to Section 5(a) hereof, upon the termination of this Agreement in accordance with this
Section 5, and except as provided in Section 15 hereof, this Agreement shall forthwith become void and of no further force or effect and each Party shall, except as provided otherwise in this Agreement, be immediately
released from its liabilities, obligations, commitments, undertakings and agreements under or related to this Agreement and shall have all the rights and remedies that it would have had and shall be entitled to take all actions, whether with respect
to the Restructuring or otherwise, that it would have been entitled to take had it not entered into this Agreement, including all rights and remedies available to it under applicable 

  
 12 

 
law; provided, however, that in no event shall any such termination relieve a Party from liability for its breach or non-performance of its
obligations hereunder prior to the date of such termination. Upon a termination of this Agreement, each Consenting Lender may, upon written notice to the Company and the other Parties, and without further order of the Bankruptcy Court, revoke its
vote or any consents given prior to such termination, whereupon any such vote or consent shall be deemed, for all purposes, to be null and void ab initio and shall not be considered or otherwise used in any manner by the Parties in connection
with the Restructuring and this Agreement. If this Agreement has been terminated as to any Consenting Lender in accordance with Section 5 hereof at a time when permission of the Bankruptcy Court shall be required for a change or
withdrawal (or cause to change or withdraw) of its vote to accept the Plan, the Company shall not oppose any attempt by such Consenting Lender to change or withdraw (or cause to change or withdraw) such vote at such time. 

(g) Individual Termination. Any Consenting Lender may terminate this Agreement as to itself only, upon written notice to the other
Parties in accordance with Section 22 hereof, in the event that: (i) such Consenting Lender has transferred all (but not less than all) of its Loan Claims (such termination shall be effective on the date on which such Consenting
Lender has effected such transfer and provided the written notice required), or (ii) this Agreement or the Restructuring Term Sheet is amended without its consent in such a way as to alter any of the material terms hereof in a manner that is
disproportionately adverse to such Consenting Lender as compared to similarly situated Consenting Lenders by giving ten (10) Business Days’ written notice to the other Parties in accordance with Section 22; provided,
that such written notice shall be given by the applicable Consenting Lender within five (5) Business Days of such amendment, filing, or execution. 

(h) If an Acceptable Plan is not consummated, nothing herein shall be construed as a waiver by any Party of any or all of such Party’s
rights and the Parties expressly reserve any and all of their respective rights. 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. 
 6. Definitive Documents; Good Faith Cooperation; Further
Assurances. 
 (a) Each Party hereby covenants and agrees to cooperate with each other in good faith in connection with, and shall
exercise commercially reasonable efforts with respect to the pursuit, approval, negotiation, execution, delivery, implementation and consummation of an Acceptable Plan and the Restructuring, as well as the negotiation, drafting, execution and
delivery of the Definitive Documents. The Company shall ensure that all Definitive Documents are consistent in all material respects with the terms of this Agreement (including the Exhibits and Schedules) and otherwise in form and substance
reasonably satisfactory to the Requisite Consenting Lenders. 
 (b) Subject to the terms hereof, each of the Parties shall take such action
as may be reasonably necessary or reasonably requested by the other Parties to carry out the purposes and intent of this Agreement, including making and filing any required regulatory filings, and shall refrain from taking any action that would
frustrate the purposes and intent of this Agreement. 

  
 13 

 (c) The Parties agree, consistent with clause (a) of this Section 6, to
negotiate in good faith the Definitive Documents that are subject to negotiation and completion on the Support Effective Date and that, notwithstanding anything herein to the contrary, the Definitive Documents, including any motions or orders
related thereto, shall not be inconsistent with this Agreement and otherwise subject to the applicable consent rights of the Parties set forth herein. 

7. Representations and Warranties. 

(a) Each Party, severally and not jointly, represents and warrants to the other Parties that the following statements are true and correct as
of the date hereof (or as of the date a Consenting Lender becomes a party hereto): 
 (i) such Party is validly existing and
in good standing under the laws of its jurisdiction of incorporation or organization, and has all requisite corporate, partnership, limited liability company or similar authority to enter into this Agreement, to carry out the transactions
contemplated hereby and to perform its obligations contemplated hereunder; and the execution and delivery of this Agreement and the performance of such Party’s obligations hereunder have been duly authorized by all necessary corporate, limited
liability company, partnership or other similar action on its part; 
 (ii) the execution, delivery and performance by such
Party of this Agreement does not and will not (A) violate any material provision of law, rule or regulation applicable to it or any of its subsidiaries or its charter or bylaws (or other similar governing documents) or those of any of its
subsidiaries, or (B) conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contractual obligation to which it or any of its subsidiaries is a party except, in the case of the
Company, for the filing of the Chapter 11 Cases; 
 (iii) the execution, delivery and performance by such Party of this
Agreement does not and will not require any material registration or filing with, consent or approval of, or notice to, or other action, with or by, any federal, state or governmental authority or regulatory body, except such filings as may be
necessary and/or required by the U.S. Securities and Exchange Commission or other securities regulatory authorities under applicable securities laws; and 

(iv) this Agreement is the legally valid and binding obligation of such Party, enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability or a ruling of the
Bankruptcy Court. 
 (b) Each Consenting Lender severally (and not jointly) represents and warrants to the Company that, as of the date
hereof (or as of the date such Consenting Lender becomes a party hereto), such Consenting Lender (i) is the beneficial owner of the principal amount of the Loans set forth on its signature page hereto (or below its name on the signature page of
a Joinder Agreement for any Consenting Lender that becomes a party hereto after the date hereof) and does not beneficially own any other indebtedness, and/or (ii) has, with respect to the beneficial owners of such Loans, (A) sole
investment or voting discretion with respect thereto, (B) full power and authority to vote on and consent to matters concerning such Loans or to exchange, assign and transfer such Loans and (C) full power and authority to bind or act on
the behalf of such beneficial owners. 

  
 14 

 (c) Each Consenting Lender severally (and not jointly) makes the representations and
warranties set forth in Section 23(b) hereof, in each case, to the other Parties. 
 8. Milestones. 

On and after the Support Effective Date, the Company shall use commercially reasonable efforts to implement the Restructuring in accordance
with the following Milestones, as applicable, unless extended or waived in writing (which may be by electronic mail between applicable counsel) by the Company and the Required Consenting Lenders in their sole discretion; provided that,
with respect to the Milestones in subsections (c) and (e) herein, such Milestones may be extended by the Company and the Lender Counsel. For the avoidance of doubt, nothing in these Milestones shall prevent the Debtors from exercising their
respective fiduciary duties under applicable law, subject to the right of the Consenting Lenders under Section 5(b) hereof: 

(a) no later than 11:59 p.m. (prevailing Eastern time) on the date that is two (2) days after the Support Effective Date, the Company
Parties shall have commenced the Chapter 11 Cases in the Bankruptcy Court (the “Petition Date”); 
 (b) no later than five
(5) days after the Petition Date, the Bankruptcy Court shall have entered the DIP Order on an interim basis, which DIP Order shall be in the form and substance acceptable to the Requisite Consenting Lenders; 

(c) no later than 11:59 p.m. (prevailing Eastern time) on the date that is thirty-five (35) days after the Petition Date, the Bankruptcy
Court shall have entered (i) an order approving the bidding procedures with respect to the Acquisition (the “Bidding Procedures”) (which Bidding Procedures shall be in form and substance reasonably acceptable to the
Requisite Consenting Lenders) and (ii) the DIP Order on a final basis (which DIP Order shall be in form and substance acceptable to the Requisite Consenting Lenders); 

(d) no later than 11:59 p.m. (prevailing Eastern time) the date that is thirty-five (35) days after the Petition Date, the Company Parties
shall have filed an Acceptable Plan, Disclosure Statement, and a motion to approve the Disclosure Statement, each of which shall be in form and substance reasonably acceptable to the Requisite Consenting Lenders; 

(e) no later than ninety (90) days after the Petition Date, (i) the hearing to approve the Disclosure Statement shall have occurred
and (ii) the Bankruptcy Court shall have entered an order approving the Disclosure Statement on a final basis, which shall be in form and substance reasonably acceptable to the Requisite Consenting Lenders; 

(f) no later than one hundred fifty (150) days (or such later date as may be required to accommodate the Bankruptcy Court’s schedule)
after the Petition Date, a hearing shall have occurred for approval of (x) (i) the Acquisition and (ii) confirmation of the Plan or (y) another Acceptable Plan, and within two (2) Business Days thereafter, the Bankruptcy Court
shall have entered the Confirmation Order on a final basis, which shall be in form and substance reasonably acceptable to the Requisite Consenting Lenders; and 

  
 15 

 (g) no later than two hundred and ten (210) days after the Petition Date, (i) the
Acquisition shall have closed and (ii) the Plan Effective Date shall have occurred. 
 9. Disclosure; Publicity 

Except as required by applicable law or otherwise permitted under the terms of any other agreement between the Company and any Consenting
Lender, no Party or its advisors shall disclose to any person (including, for the avoidance of doubt, any other Party), other than advisors to the Company, the principal amount or percentage of any Loans or any other Claims against, or Interests in,
the Company held by any Consenting Lender, in each case, without such Consenting Lender’s consent; provided, however, that (i) if such disclosure is required by law, subpoena, or other legal process or regulation, the
disclosing Party shall afford the relevant Consenting Lender a reasonable opportunity to review and comment in advance of such disclosure and shall take all reasonable measures to limit such disclosure (the expense of which, if any, shall be borne
by the Company), and (ii) the foregoing shall not prohibit the disclosure of the aggregate percentage or aggregate principal amount of Loans held by all the Consenting Lenders. Any public filing of this Agreement, with the Bankruptcy Court or
otherwise, and any version of this Agreement shared with the Consenting Lenders generally shall omit the Loans holdings of each individual Consenting Lender as set forth on such Consenting Lender’s signature page hereto or shall include such
signature page only in redacted form with respect to the Loans holdings of each Consenting Lender (provided that the Loans holdings on such signature page(s) may be filed under seal in unredacted form with the Bankruptcy Court). 

10. Amendments and Waivers. 

(a) Other than as set forth in Section 10(b), this Agreement, including any exhibits or schedules hereto, may not be modified,
amended or supplemented or the performance of any obligation thereunder waived except with the written consent of the Company and the Requisite Consenting Lenders in their sole discretion; provided that the Company may modify, amend, or
supplement the Plan, the Restructuring Term Sheet, or any related Definitive Document, to the extent solely affecting the treatment of the Notes Claims or any class of claims or interests ranking junior to the Loan Claims, without the consent of any
Consenting Lender. 
 (b) Notwithstanding Section 10(a): 

(i) any waiver, modification, amendment or supplement to this Section 10 shall require the written consent of all
of the Parties; 
 (ii) any modification, amendment or change to the definition of “Requisite Consenting Lenders,”
shall require the written consent of each Consenting Lender; 
 (iii) any change, modification or amendment to this Agreement
(including the Restructuring Term Sheet) or the Acceptable Plan that materially and adversely alters the treatment of Loan Claims under the Plan shall require the consent of each Consenting Lender; 

  
 16 

 (iv) any amendment that would have the effect of extending the Support
Period beyond March 31, 2021 shall require the consent of each Consenting Lender; and 
 (v) any change, modification or
amendment to this Agreement or the Acceptable Plan that treats or affects any Consenting Lenders in a manner that is materially and adversely disproportionate, on an economic basis, to the manner in which any of the other Consenting Lenders are
treated (after taking into account each of the Consenting 
 Lenders’ respective Claims and Interests and the recoveries
contemplated by the Plan (as in effect on the date hereof)) shall require the written consent of such materially adversely and disproportionately affected Consenting Lender. 

(c) In the event that a materially adversely and disproportionately affected Consenting Lender (the
“Non-Consenting Lender”) does not consent to a waiver, change, modification or amendment to this Agreement requiring the consent of such
Non-Consenting Lender, but such waiver, change, modification or amendment receives the consent of the Requisite Consenting Lenders, this Agreement shall be deemed to have been terminated only as to such Non-Consenting Lenders, but this Agreement shall continue in full force and effect in respect to all other Consenting Lenders. 

11. Effectiveness. 

This Agreement shall become effective and binding upon each Party at 12:00 a.m., prevailing Eastern Time, on the Support 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; 
 (b)
Each of the Consenting Lenders shall have executed and delivered counterpart signature pages to this Agreement to counsel to the Company; provided that signature pages executed by Consenting Term Lenders shall be delivered to (x) other
Consenting Lenders in a redacted form that removes such Consenting Lenders’ holdings of Loans, and (y) the Company, the advisors to the Company and (solely with respect to members of the Consenting Lenders) Lender Counsel and Lender
Financial Advisor in an unredacted form; provided, further, that such recipients shall not disclose the unredacted signature pages and shall keep such unredacted signature pages in strict confidence, except as required by law;
provided further, however, that the Company may disclose publicly the aggregate principal amounts of Loans set forth on the signature pages hereto; 

(c) The Company shall have paid all reasonable and documented fees and out of pocket expenses and all agreed and unpaid professional retainer
amounts of the Lender Counsel and Lender Financial Advisor in accordance with their respective fee letters or engagement letters for which an invoice has been received by the Company on or before the date that is one (1) Business Day prior to
the Support Effective Date; 

  
 17 

 (d) The SAPA shall have been executed by all parties thereto; and 

(e) The Company shall have paid the Priming Consent Fee, as applicable, in cash to the Loan Agent for the benefit of each Consenting Lender.

 12. Fees and Expenses. The Company shall pay or reimburse all reasonable and documented fees and expenses of the Lender
Counsel and Lender Financial Advisor, including the fees and expenses of Gibson, Dunn & Crutcher LLP, as Lender Counsel and PJT Partners LP as Lender Financial Advisor, within five (5) Business Days of receipt. For the avoidance of
doubt, all such fees and expenses incurred and outstanding in connection with the Restructuring shall be paid on the Plan Effective Date. Any documentation shall be redacted to preserve privilege and work product and contain only the names of
professionals/para professionals working on the matter, hourly rate and total number of hours worked. 
 13. Governing Law;
Jurisdiction; Waiver of Jury Trial. 
 (a) This Agreement shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of New York, without giving effect to the conflict of laws principles thereof. 
 (b) Each
of the Parties irrevocably agrees that any legal action, suit or proceeding arising out of or relating to this Agreement brought by any party or its successors or assigns shall be brought and determined in any federal or state court in the Borough
of Manhattan in the City of New York (the “NY Courts”) and each of the Parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and
unconditionally, with regard to any such proceeding arising out of or relating to this Agreement or the Restructuring Transactions. Each of the Parties agrees not to commence any proceeding relating hereto or thereto except in the NY Courts other
than proceedings in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any NY Court. Each of the Parties further agrees that notice as provided herein shall constitute sufficient service of process, and the
Parties further waive any argument that such service is insufficient. Each of the Parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any proceeding arising
out of or relating to this Agreement or the Restructuring, (i) any claim that it is not personally subject to the jurisdiction of the NY Courts for any reason, (ii) that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in any such court (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) that (A) the proceeding in
any such court is brought in an inconvenient forum, (B) the venue of such proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by any such court. Notwithstanding the foregoing, during the
pendency of the Chapter 11 Cases, all proceedings contemplated by this Section 13(b) shall be brought in the Bankruptcy Court. Notwithstanding the foregoing, none of the Consenting Lenders hereby submit to the jurisdiction of the
Bankruptcy Court for any other matter or otherwise consent to the entry of any final judgment/order by the Bankruptcy Court. 

  
 18 

 (c) EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, OR RELATING TO, THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY (I) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 

14. Specific Performance/Remedies. 

It is understood and agreed by the Parties that money damages would not be a sufficient 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 (including attorneys’ fees and costs) as a remedy of any such breach, without the necessity
of proving the inadequacy of money damages as a remedy, including an order of the Bankruptcy Court requiring any Party to comply promptly with any of its obligations hereunder. Each Party also agrees that it will not seek, and will waive any
requirement for, the securing or posting of a bond in connection with any Party seeking or obtaining such relief. 
 15.
Survival. 
 Notwithstanding the termination of this Agreement pursuant to Section 5 hereof, the agreements and
obligations of the Parties in this Section 15 and Sections 5(f), 9, 12, 13, 14, 17, 18, 19, 20, 21, 22, and 23, hereof (and any defined terms used in any
such Sections) shall survive such termination and shall continue in full force and effect in accordance with the terms hereof; provided, however, that any liability of a Party for failure to comply with the terms of this Agreement
shall survive such termination. 
 16. Headings. 

The headings of the sections, paragraphs and subsections of this Agreement are inserted for convenience only and shall not affect the
interpretation hereof or, for any purpose, be deemed a part of this Agreement. 
 17. Successors and Assigns; Severability; Several
Obligations. 
 This Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, permitted
assigns, heirs, executors, administrators and representatives; provided, however, that, during the Support Period, nothing contained in this Section 17 shall be deemed to permit Transfers of the Loans or Loan Claims,
other than in accordance with the express terms of this Agreement. If any provision of this Agreement, or the application of any such provision to any person or entity or circumstance, shall be held invalid or unenforceable in whole or in part, such
invalidity or unenforceability shall attach only to such provision or part thereof and the remaining part of such provision hereof and this Agreement shall continue in full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not 

  
 19 

 
affected in any manner materially adverse to any Party. Upon any such determination of invalidity, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in a reasonably acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. 

18. Relationship Among Parties. 

Notwithstanding anything herein to the contrary, (i) the duties and obligations of the Parties under this Agreement shall be several, not
joint and several; (ii) no Party shall have any responsibility by virtue of this Agreement for any trading by any other entity; (iii) no prior history, pattern, or practice of sharing confidences among or between the Parties shall in any
way affect or negate this Agreement; (iv) the Parties hereto acknowledge that this Agreement does not constitute an agreement, arrangement or understanding with respect to acting together for the purpose of acquiring, holding, voting or
disposing of any equity securities of the Company Parties, and the Parties do not constitute a “group” within the meaning of Rule 13d-5 under the Securities Exchange Act of 1934, as amended;
(v) none of the Consenting Lenders shall have any fiduciary duty, any duty of trust or confidence in any form, or other duties or responsibilities in any kind or form to each other, the Company Parties or any of the Company Parties’ other
lenders or stakeholders, including as a result of this Agreement or the transactions contemplated herein or in any exhibit hereto; and (vi) no action taken by any Party pursuant to this Agreement shall be deemed to constitute, or to create a
presumption by any of the Parties, that the Parties are in any way acting in concert or as a “group.” 
 19. No Third-Party
Beneficiaries. 
 Unless expressly stated herein, this Agreement shall be solely for the benefit of the Parties and no other person
or entity shall be a third-party beneficiary hereof. 
 20. Reservation of Rights. 

(a) Except as expressly provided in this Agreement or the Restructuring Term Sheet, nothing herein is intended to, or does, in any manner
waive, limit, impair or restrict the ability of any Party to protect and preserve its rights, remedies and interests, including, without limitation, its claims against any of the other Parties. 

(b) Without limiting clause (a) of this Section 20 in any way, if this Agreement is terminated for any reason, nothing shall
be construed herein as a waiver by any Party of any or all of such Party’s rights, remedies, claims and defenses, and the Parties expressly reserve any and all of their respective rights, remedies, claims and defenses. This Agreement, the Plan
and any related document shall in no event be construed as, or be deemed to be, evidence of an admission or concession on the part of any Party of any claim or fault or liability or damages whatsoever. Each of the Parties denies any and all
wrongdoing or liability of any kind and does not concede any infirmity in the claims or defenses which it has asserted or could assert. 

(c) Except as otherwise set forth in this Agreement, the Plan, and any related document, this Agreement, the Plan, and any related document
shall in no event be construed to amend, alter, or waive or override any rights, remedies, obligations, claims or defenses under the Intercreditor Agreement. 

  
 20 

 21. Counterparts. 

This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall be
deemed to be one and the same agreement. Execution copies of this Agreement may be delivered by electronic mail or otherwise, which shall be deemed to be an original for the purposes of this section 21. 

22. Notices. 
 All
notices hereunder shall be deemed given if in writing and delivered, if contemporaneously sent by electronic mail, courier or by registered or certified mail (return receipt requested) to the following addresses: 

 

	 	(1)	 If to the Company, to: 

Garrett Motion Inc. 
 47548
Halyard Drive 
 Plymouth, MI 48170 

Attention: Jerome Maironi 

                 (jerome.maironi@garrettmotion.com) 

With a copy to: 

Sullivan & Cromwell LLP 

125 Broad Street 
 New York, NY
10004 
 Attention: Andrew G. Dietderich 

                 (dietdericha@sullcrom.com) 

                 Evan S. Simpson 

                 (simpsone@sullcrom.com) 

 

	 	(2)	 If to a Consenting Lender, or a transferee thereof, to the addresses set forth below following the Consenting
Lender’s signature (or as directed by any transferee thereof), as the case may be, with copies to: 

 Gibson
Dunn & Crutcher LLP 
 200 Park Avenue 

New York, NY 10166 
 Attention:
Scott J. Greenberg, Esq. 

                 (sgreenberg@gibsondunn.com) 

  
 21 

 23. No Solicitation; Representation by Counsel; Adequate Information;
Miscellaneous. 
 (a) This Agreement is not and shall not be deemed to be a solicitation for votes in favor of the Plan in the
Chapter 11 Cases from the Consenting Lenders. The acceptances of the Consenting Lenders with respect to the Plan will not be solicited until such Consenting Lenders have received the Disclosure Statement, related ballots and solicitation materials.

 (b) Each Party acknowledges that it has had an opportunity to receive information from the Company and that it has been represented by
counsel in connection with this Agreement and the transactions contemplated hereby. Accordingly, any rule of law or any legal decision that would provide any Party with a defense to the enforcement of the terms of this Agreement against such Party
based upon lack of legal counsel shall have no application and is expressly waived. 
 (c) This Agreement, together with all exhibits hereto,
contains the entire agreement and understanding among the Parties concerning the matters set forth herein and supersedes all prior or contemporaneous stipulations, negotiations, representations, understandings, and discussions among the Parties or
their respective counsel with respect to the subject matter of this Agreement. No other representations, covenants, undertakings, or other earlier or contemporaneous agreements respecting these matters may be deemed in any way to exist or bind any
of the Parties. The Parties acknowledge that they have not executed this Agreement in reliance on any promise, representation, or warranty other than those contained in this Agreement. 

(d) This Agreement may not be modified except as mutually agreed to in a writing signed by all the Parties 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

  
 22 

 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed and
delivered by their respective duly authorized officers, solely in their respective capacity as officers of the undersigned and not in any other capacity, as of the date first set forth above. 

[All signature pages on file with the Debtors.] 

(Signature Page to Restructuring Support Agreement) 

 EXHIBIT A 

“Acceptable Plan” means (i) the Plan contemplated herein, (ii) a substantially similar chapter 11 plan acquisition of
substantially all of the assets of the Debtors that provides equal or more favorable plan treatment of the Lenders, or (iii) another chapter 11 plan of reorganization that pays the Lenders in cash in full on the plan effective date;
provided that no chapter 11 plan shall be an Acceptable Plan unless it is expected to be consummated prior to the Maturity Date (as defined in the DIP Credit Agreement ) and is not in any other manner adverse to Lenders when compared to the
Plan contemplated herein. 
 “Affiliate” means, with respect to any person, any other person which indirectly or indirectly
controls, or is under common control with, or is controlled by, such person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean,
with respect to any person, (x) the possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership, limited liability company or other ownership
interests, by contract or otherwise) of such person or (y) solely with respect to Affiliates of Consenting Lenders, the investment or voting discretion or control with respect to discretionary accounts of such person. 

“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. 
 “Claims” has the meaning set forth in section 101(5) of the Bankruptcy
Code. 
 “Collateral” has the meaning ascribed to such term in the Credit Agreement.  

“Confirmation Order” means an order of the Bankruptcy Court, in form and substance reasonably acceptable to the Requisite Consenting
Lenders, approving (x) the Plan, including the Acquisition and providing for the payment in full in cash of the Loan Document Obligations (as defined in the Credit Agreement) on the closing of the Acquisition; provided that
(1) payment of default interest of an additional 2% under Section 2.13 of the Credit Agreement shall be payable or discharged in accordance with the terms of the Plan and (2) a Confirmation Order that gives effect to the terms of the
SAPA and the Restructuring Term Sheet is deemed acceptable to the Requisite Consenting Lenders, or (y) another Acceptable Plan. 
 “Credit
Agreement” means that certain Credit Agreement (as amended, restated, amended and restated, extended, supplemented or otherwise modified from time to time), dated as of September 27, 2018, by and among, inter alios, by and
among GMI, as holdings, Garrett LX I S.à r.l., Garrett LX II S.à r.l., Garrett LX III S.à r.l., Garrett Borrowing LLC and Garrett Motion Sàrl (f/k/a Honeywell Technologies Sàrl), as borrowers, certain of the
Company Parties, as guarantors, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto from time to time. 

“Definitive Documents” means (i) this Agreement (including the Restructuring Term Sheet), (ii) the DIP Documents, (iii) the
DIP Orders, (iv) the motion seeking approval of the DIP Orders, (v) an Acceptable Plan (including any ballots, supplements or other material documents directly relating thereto not specified herein), (vi) the Disclosure Statement,
(vii) the motion seeking 

  
 A-24 

 approval by the Bankruptcy Court of the Disclosure Statement and the Solicitation procedures, and the order
of the Bankruptcy Court approving the Disclosure Statement and the Confirmation Order, (viii) all first day pleadings or papers, (ix) all second day pleadings or papers, (x) any other material pleadings or papers, (xi) the Credit
Agreement Amendment and (xii) the SAPA, in each of cases (v)-(xii) to the extent relating in any way to the DIP Facility or the Loans. 

“DIP Agent” means Citibank, N.A., as administrative agent under the DIP Credit Agreement. 

“DIP Credit Agreement” means that certain senior secured superpriority
debtor-in-possession credit agreement by and among the Company Parties, DIP Agent and lenders party thereto, consistent with the terms and conditions of the DIP Facility
Term Sheet, as amended, supplemented, or otherwise modified from time to time but in effect on the closing date of the DIP Facility. 
 “DIP
Documents” means the DIP Credit Agreement and related financing Documents. 
 “DIP Facility” means the senior secured
superpriority debtor-in-possession facility to be provided to the Company in accordance with the terms of the DIP Facility Term Sheet. 

“DIP Orders” means the Interim DIP Order and Final DIP Order. 

“Disclosure Statement” means the disclosure statement in respect of an Acceptable Plan, including, without limitation, all exhibits
and schedules thereto, as supplemented from time to time. 
 “Final DIP Order” means the final order approving, among other things,
the Company’s use of cash collateral and entry into the DIP Facility, to be entered by the Bankruptcy Court. 
 “Intercreditor
Agreement” means that certain Intercreditor Agreement, dated as of September 27, 2018, by and among the Company, certain of the Company Parties, JPMorgan Chase Bank, N.A., as Senior Priority Representative for the Credit Agreement
Secured Parties, Deutsche Trustee Company Limited, as Senior Subordinated Notes Representative for the holders of Senior Subordinated Notes and each of the additional Representatives party thereto from time to time, as amended, restated, amended and
restated, extended, supplemented or otherwise modified from time to time. 
 “Interest” means any equity security (as defined in
section 101(16) of the Bankruptcy Code) of a Company Party, including all shares, common stock, preferred stock or other instrument evidencing any fixed or contingent ownership interest in any Company Party, including any option, warrant or other
right, contractual or otherwise, to acquire any such interest in a Company Party, whether or not transferable and whether fully vested or vesting in the future, that existed immediately before the Plan Effective Date. 

“Interim DIP Order” means the interim order approving, among other things, the Company’s use of cash collateral and entry into
the DIP Facility, to be entered by the Bankruptcy Court. 
 “Lender” shall have the meaning ascribed to such term in the Credit
Agreement.  

  
 A-25 

 “Lender Counsel” means (i) Gibson, Dunn & Crutcher LLP, and
(ii) applicable local counsel selected by the Consenting Lenders, as necessary and appropriate, as counsel to the Consenting Lenders. 

“Lender Financial Advisor” means PJT Partners LP. 

“Loan Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent under the Credit Agreement, or its successor in
such capacity. 
 “Loan Claim” means any Claim on account of the Loans, including, without limitation, all interest, fees and
expenses related thereto. 
 “Loan Documents” means the Credit Agreement and all other agreements, documents, and instruments
delivered or entered into in connection with Credit Agreement, including any guarantee agreements, pledge and collateral agreements, fee letters, or other security documents. 

“Loans” means, collectively, the Revolving Exposure, Tranche A Term Loans and Tranche B 

Term Loans.  
 “Milestones” means
the dates set forth in Section 8. 
 “Notes” means the 5.125% Senior Secured Notes, due 2026, outstanding under that
certain Indenture, dated as of September 27, 2018 (as amended, restated, amended and restated, supplemented, or otherwise modified from time to time), by and among the Company, as parent, Garrett LX I S.à r.l. and Garrett Borrowing LLC,
as issuers, certain of the Company Parties, as guarantors, and Deutsche Trustee Company Limited, as the trustee. 
 “Notes Claims”
means any Claim on account of the Notes, including, without limitation, all interest, fees and expenses related thereto. 
 “Petition
Date” means the date on which the Debtors commence the Chapter 11 Cases. 
 “Plan Effective Date” means the date upon
which all conditions to the effectiveness of an Acceptable Plan have been satisfied or waived in accordance with the terms thereof and the Plan becomes effective. 

“Priming Consent Fee” means cash in an amount equal to 0.25% of the outstanding principal amount of the applicable Consenting
Lender’s Loans (without duplication of any Loans acquired from any other Consenting Lender following the date such Consenting Lender executed a counterpart to this Agreement) as of the date such Consenting Lender executes a counterpart to this
Agreement. 
 “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 claims against the Company (or enter with customers into long and short positions in claims against the Company), in its capacity as a dealer or
marketmaker in claims against the Company 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). 

  
 A-26 

 “Released Parties” shall have the meaning ascribed to such term in the Plan. 

“Requisite Consenting Lenders” means, as of the date of determination, Consenting Lenders holding at least a majority of the aggregate
principal amount outstanding of the Loans held by all Consenting Lenders. 
 “Revolving Exposure” has the meaning ascribed to such
term in the Credit Agreement.  
 “SAPA” means the Stock and Asset Purchase Agreement, dated as of the date hereof, by and
among GMI, Garrett Motion Holdings Inc. and Garrett ASASCO Inc., as sellers, and a special purpose entity created by the plan sponsor for such purpose. 

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

“Subordinated Bendix Indemnification and Reimbursement Agreement” means the Indemnification and Reimbursement Agreement, dated
September 12, 2018, by and among Honeywell ASASCO Inc., Honeywell ASASCO 2 Inc. and Honeywell International Inc. 
 “Subordinated Bendix
Indemnification Guarantee Agreement” means the Indemnification Guarantee Agreement, dated September 26, 2018, by and between Honeywell ASASCO 2 Inc., ASASCO and the other Guarantors party thereto. 

“Subordinated Bendix Indemnity Agreements” means the (a) Subordinated Bendix Indemnification and Reimbursement Agreement and
(b) Subordinated Bendix Indemnification Guarantee Agreement. 
 “Support Effective Date” means the date on which the conditions
set forth in Section 11 have been satisfied or waived by the appropriate Party or Parties in accordance with this Agreement. 

“Support Period” means the period commencing on the Support Effective Date and ending on the earlier of the date on which this
Agreement is terminated in accordance with Section 5 hereof. 
 “Tranche A Term Loan” has the meaning ascribed to such
term in the Credit Agreement.  
 “Tranche B Term Loan” has the meaning ascribed to such term in the Credit Agreement.
 

  
 A-27 

 EXHIBIT C 

RESTRUCTURING TERM SHEET 

  
 A-28 

 EXECUTION VERSION 

Garrett Motion 

Global Restructuring Term Sheet 

This term sheet (the “Term Sheet”) 1 sets forth certain material terms of a proposed going concern financial restructuring (the
“Restructuring”) of Garrett Motion Inc. (“GMI”) and its subsidiaries (collectively, the “Company”). This Term Sheet summarizes certain key terms of a joint chapter 11 plan of reorganization in the
Chapter 11 Cases (as defined below) and will be attached to a Restructuring Support Agreement (the “RSA”) among the Debtors (as defined below), and certain lenders signatory thereto (collectively, the “Consenting
Lenders”) that are lenders under that certain Credit Agreement, dated as of September 27, 2018 (the “Credit Agreement”), among certain Debtors (as defined below), JPMorgan Chase Bank, N.A., as administrative agent, and
the lenders party thereto from time to time. 
 This Term Sheet is not an offer to buy or sell any security nor a solicitation of acceptances of a
chapter 11 plan within the meaning of Section 1125 of the Bankruptcy Code. Any such offer or solicitation will comply with all applicable securities laws and provisions of the Bankruptcy Code. 

This Term Sheet is not binding and is subject to the satisfactory completion of due diligence and approval by the Company and the Consenting Lenders. In
addition, no party shall be bound with respect to any transaction contemplated hereunder until the execution and delivery of definitive documentation acceptable in to the Company and the Consenting Lenders after obtaining all necessary internal
approvals. 
 This Term Sheet does not purport to summarize all of the terms, conditions, representations, warranties, and other provisions with
respect to the transactions described herein, which transactions will be subject to the satisfactory negotiation and completion of definitive documents incorporating the terms set forth herein and others as may be mutually agreed. The closing of any
transaction will be subject to the terms and conditions set forth in such definitive documents. 
  

			
	OVERVIEW
		
	Overview	  	The Restructuring will be implemented through the Debtors’ commencement of chapter 11 cases (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of New York (the
“Bankruptcy Court”) and pursuit of a chapter 11 plan of reorganization in the Chapter 11 Cases (the “Plan”), by GMI and certain subsidiaries which are identified as Debtors below, which Plan shall be in form and
substance reasonably satisfactory to the Requisite Consenting Lenders and provide for, among other things:
		
		  	 •  the acquisition (the “Acquisition”) of substantially all of
the business of the Company (the “Business”) by a special purpose entity (“New Garrett”) created by the plan sponsor (the “Plan Sponsor”) for such
purpose;

  

	1	 Capitalized terms used herein but not otherwise defined have the meanings given to them in the Bankruptcy Code.
“Claim” shall have the meaning set forth in section 101(5) of the Bankruptcy Code. 

			
		  	 •  the sale by certain Debtors (the “Sellers”) of equity
interests in certain of their subsidiary Debtors, and the assignment and assumption of certain other assets and liabilities of Sellers;

		
		  	 •  the payment of the claims of existing secured creditors from the cash proceeds
of the Acquisition (as agreed by the Requisite Consenting Lenders);

		
		  	 •  the assumption by New Garrett of certain specified liabilities of the Company,
including substantially all ordinary course trade liabilities;

		
		  	 •  the exclusion of certain assets and liabilities from the Acquisition,
including, among others, all pre- and post-petition claims and causes of action against Honeywell International Inc. (“Honeywell”), its affiliates and their respective officers, directors,
professional advisors, consultants and related persons arising out of the 2018 spin-off transaction and related matters (the “Excluded Causes of Action”);

		
		  	 •  the transfer to a Liquidating Trust (as defined below) of the cash proceeds of
the Acquisition remaining after distributions in satisfaction of certain claims specified in the Plan on the Plan Effective Date, including, without limitation, claims arising under the Credit Agreement (including, for the avoidance of doubt, any
“Secured Hedging Obligations” as defined in the Credit Agreement) and Senior Subordinated Notes (defined below) (the “Excess Proceeds”), and certain other Excluded Assets (as defined below, and together with the Excess
Proceeds, the “Liquidating Trust Assets”), to be distributed following the later of the Final Order Entry Date and the Final Allocation Date (each as defined below) to stakeholders of the Company on account of certain claims and
interests pursuant to the ASASCO Proceeds Waterfall (as defined below) or the U.S. Proceeds Waterfall (as defined below and, together with the ASASCO Proceeds Waterfall, the “Liquidating Trust Waterfalls”), and in accordance with the order
of priority and in a manner required by the Bankruptcy Code, the Intercreditor Agreement, dated as of September 27, 2018, among GMI, Senior Subordinated Notes Issuer, Garrett LX II S.à r.l., the Borrowers, the other Grantors party
thereto, the Agents, and Honeywell ASASCO 2 Inc., and applicable law; and

  
 2 

			
		  	 •  the assignment to the Spin-Off
Litigation Trust (as defined below) of the Excluded Causes of Action and certain other Excluded Assets for the benefit of stakeholders of the Company on account of claims and interests pursuant to the Plan.

		
		  	In exchange for support of the Plan and other material terms set forth herein, the Company will implement a chapter 11 process in accordance with the milestone deadlines set forth in the RSA (collectively, the
“Milestones”).
		
	Debtors	  	The following entities will be debtors in the Chapter 11 Cases (the “Debtors”):
		
		  	 •  GMI;

		
		  	 •  Garrett Motion Holdings Inc. (“GMHI”);

		
		  	 •  Garrett ASASCO Inc. (“ASASCO”);

		
		  	 •  Garrett LX I S.à r.l. (“Senior Subordinated Notes
Issuer”);

		
		  	 •  Garrett LX III S.à r.l. (“TLB
Borrower”);

		
		  	 •  Garrett Borrowing LLC
(“Co-Borrower”);

		
		  	 •  Garrett Motion S.à r.l. (“Swiss Borrower”, and
collectively with TLB Borrower and Co-Borrower, the “Borrowers”);
  

•  all direct and indirect subsidiaries of GMI that are guarantors under the Credit Agreement;
and

		
		  	 •  any other direct and indirect subsidiaries of GMI as mutually agreed between
the Company and the Plan Sponsor.

		
		  	An organizational chart of the Company as of the date hereof is attached as Annex A.
		
	DIP Financing	  	The Company will enter into a superpriority, secured debtor-in-possession financing on the terms and conditions set forth on Annex B (the “DIP Financing”) and otherwise
acceptable to Requisite Consenting Lenders. The Company expects that all Consenting Lenders will have an opportunity to participate in the DIP Financing. The order approving the DIP Financing shall be in form and substance acceptable to the
Requisite Consenting Lenders.
		
	Adequate Protection	  	Consenting Lenders shall consent to the DIP Financing (subject to approval of terms), enter into intercreditor arrangements as may be necessary to effect the incurrence of priming liens on
non-US collateral, and consent to the use of cash collateral on the terms set forth on Annex B hereto, which includes, among other things, the following forms of adequate protection (all of which shall
be in form and substance satisfactory to the Requisite Consenting Lenders in their sole discretion):

  
 3 

			
		  	 •  monthly payment of interest during the Chapter 11 Cases at the non-default contract rate, with default interest of an additional 2% under Section 2.13 of the Credit Agreement to accrue in kind on account of the Prepetition Credit Agreement Claims;

		
		  	 •  superpriority adequate protection claims and liens; and

		
		  	 •  reimbursement of reasonable and documented fees and expenses of advisors to
the Consenting Lenders (including Gibson, Dunn & Crutcher LLP). Among other things, the cash collateral order shall also set forth the Debtors’ stipulations as to amount of claims, validity of liens and other matters with respect to
the Credit Agreement, the obligations thereunder and the liens and security interests securing such obligations and provide waivers, upon entry of a final order, of marshalling, any right to surcharge under section 506(c) of the Bankruptcy Code, and
the “equities of the case” exception under 552(b) of the Bankruptcy Code.

		
	Expense Reimbursement	  	The Company will agree in the RSA to reimburse the reasonable and documented fees and expenses of (i) Gibson, Dunn & Crutcher LLP as the primary legal counsel for the Consenting Lenders, (ii) a single financial
advisor for the Consenting Lenders subject to a budget to be mutually agreed upon between the Company and Consenting Lenders and (iii) the reasonable and documented fees and expenses of local counsel to the extent necessary.
	
	SALE TRANSACTION
		
	Acquisition Agreement	  	The obligations of the Company and the Plan Sponsor with respect to the Acquisition will be set forth in a Share and Asset Purchase Agreement (the “SAPA”) to be executed and delivered immediately prior to the
commencement of the Chapter 11 Cases. The terms of the SAPA and any amendments thereto shall be in form and substance reasonably acceptable to the Requisite Consenting Lenders (it being understood that any amendments or modifications to the terms of
the SAPA to effect or implement the Asset Sale Election (as defined in the SAPA) are acceptable to the Requisite Consenting Lenders).
		
	Acquisition Structure	  	The Acquisition will include:
		
		  	 (a)   the purchase and sale by GMHI of all of its interests in Garrett
Transportation I Inc. and its direct and indirect subsidiaries (the “U.S. Acquired Subsidiaries”);

  
 4 

			
		  	 (b)   the purchase and sale by ASASCO of all of its interests in Senior
Subordinated Notes Issuer and its direct and indirect subsidiaries (the “ASASCO Acquired Subsidiaries” and, together with the U.S. Acquired Subsidiaries, the “Acquired Subsidiaries”); and

		
		  	 (c)   the purchase and sale of certain other assets and assumption of certain
other liabilities of GMI, GMHI and ASASCO, in each case as more fully set forth in the SAPA.

		
		  	The purchase agreement, sale order, and all other documentation with respect to the Acquisition shall be in form and substance reasonably acceptable to the Requisite Consenting Lenders.
		
		  	The consummation of the Acquisition (“Closing”) will occur on or before the effective date of the Plan (the “Plan Effective Date”). All Acquired Subsidiaries that are Debtors (collectively, the
“Reorganized Debtors”) will be acquired free and clear of all liabilities other than Assumed Liabilities (as defined below).
		
		  	GMI, GMHI and ASASCO shall not be acquired or reorganized, and shall be liquidated pursuant to the Plan following Closing.
		
	Excluded Assets	  	All of the assets of the Acquired Subsidiaries that are Debtors shall vest in the Reorganized Debtors at Closing, other than the Excluded Causes of Action and certain other claims, causes of action and other assets specifically
identified in Annex D of the SAPA (“Excluded Assets”).
		
	Excluded Liabilities	  	All liabilities of the Sellers and Acquired Subsidiaries that are Debtors shall be extinguished and discharged in the Plan, other than assumed liabilities identified in Annex E of the SAPA such as, except to the extent identified as
an Excluded Liability, (a) liabilities to continuing employees, customers, suppliers and business partners, (b) tax and governmental obligations, (c) liabilities of Acquired Subsidiaries organized in countries outside of the United States that
do not recognize the discharge of liabilities in Chapter 11 and (d) other specified assumed liabilities to be agreed (“Assumed Liabilities”)). It is expected that the liabilities not so assumed (“Excluded
Liabilities”) shall include, at a minimum:
		
		  	 •  the liability under the Credit Agreement;

		
		  	 •  the liabilities under the Senior Subordinated Notes;

		
		  	 •  liabilities under rejected executory contracts;

		
		  	 •  liabilities to Honeywell incurred in connection with the 2018 spin-off transaction; and

		
		  	 •  other liabilities identified by the Plan Sponsor in Annex F of the
SAPA.

  
 5 

			
		
	Executory Contracts	  	All executory contracts and unexpired leases of the Debtors shall be assumed by New Garrett and/or the applicable Acquired Subsidiaries, other than contracts specifically identified by the Plan Sponsor to be rejected.
		
	Bidding Protections and Procedures	  	The Company will provide customary bidding protections to the Plan Sponsor in connection with the SAPA, including a break-up fee and expense reimbursement, as more fully provided in the SAPA
(the “Bidding Protections”).
		
		  	The Acquisition will be subject to overbids post-petition in accordance with bidding procedures to be approved by the Bankruptcy Court (the “Bidding Procedures”), which shall be in form and substance reasonably
satisfactory to the Requisite Consenting Lenders. Subject to the Bidding Protections, the Company shall have a customary “fiduciary out” and shall be free to receive and respond to proposals for an alternative transaction (an
“Alternative Restructuring Proposal”) in accordance with the SAPA and Bidding Procedures. The obligations of the Consenting Lenders under the RSA shall terminate in the event that the Company terminates the SAPA in the exercise of
the Company’s fiduciary duty to pursue an Alternative Restructuring Proposal.
		
	Conditions to Closing	  	Closing of the Acquisition will be subject to certain customary conditions precedent set forth in the SAPA.
		
	Intercompany Settlement	  	The total purchase price for the Acquisition will be $2.1 billion, subject to adjustments as provided in the SAPA. The cash proceeds of the Acquisition shall be allocated between GMHI and ASASCO pursuant to an intercompany
settlement negotiated by the independent directors of ASASCO and GMHI, respectively (the “Intercompany Settlement”), which shall provide for the payment of plan distributions to the Consenting Lenders directly from the Plan Sponsor
on account of the applicable Borrowers and Senior Subordinated Notes Issuer on the plan effective date unless Requisite Consenting Lenders consent to an alternative funding arrangement for such plan distributions, and approved by the Bankruptcy
Court pursuant to Bankruptcy Rule 9019, or as otherwise ordered by the Bankruptcy Court. In early August, ASASCO and GMHI each established a Transaction Committee comprised of a single independent director (Neal Goldman in the case of ASASCO and
Alexander Greene in the case of GMHI) to negotiate the allocation of proceeds pursuant to the Intercompany Settlement. The proceeds allocated by the Intercompany Settlement to the U.S. subsidiaries are referred to herein as the “U.S. Sale
Proceeds” and the proceeds allocated to the ASASCO subsidiaries are referred to herein as the “ASASCO Sale Proceeds”.

  
 6 

			
	Liquidating Trust	  	On the Plan Effective Date, the Debtors’ rights, title and interest in the Liquidating Trust Assets will be transferred to a liquidating trust (the “Liquidating Trust”), which will be administered by a trustee
(“Liquidating Trustee”) as set forth in the Plan and a Liquidating Trust Agreement. The Liquidating Trust will be responsible for (i) resolving disputed Claims entitled to recovery from the Liquidating Trust,
(ii) following the later of the Final Order Entry Date and the Final Allocation Date, making distributions to Liquidating Trust beneficiaries pursuant to the applicable Liquidating Trust Waterfall, (iii) taking necessary actions with
respect to the Liquidating Trust Assets, and (iv) administering the Liquidating Trust. The Liquidating Trust will include carve-out and wind-down reserves for the administration of the Liquidating Trust in
amounts determined by the Debtors.
		
		  	For the avoidance of doubt, cash distributions on account of any allowed Prepetition Credit Agreement Claims and Senior Subordinated Noteholder Claims shall be paid directly by the Plan Sponsor for the account of the applicable
Borrower or Senior Subordinated Notes Issuer on the Plan Effective Date pursuant to the Plan.
		
		  	“Final Order Entry Date” means the date on which the time to appeal the confirmation order entered by the Bankruptcy Court or move to reconsider such order has expired and no appeal or motion to reconsider has been
timely filed, or if timely filed, such appeal or motion to reconsider has been dismissed or denied with prejudice on a final basis, unless the Plan Sponsor waives such requirement in writing.
		
		  	“Final Allocation Date” means the date on which the Intercompany Settlement is approved by the Bankruptcy Court pursuant to Bankruptcy Rule 9019, or as otherwise ordered by the Bankruptcy Court, and the time to
appeal the approval order entered by the Bankruptcy Court or move to reconsider such approval order has expired and no appeal or motion to reconsider has been timely filed, or if timely filed, such appeal or motion to reconsider has been dismissed
or denied with prejudice on a final basis, unless the Plan Sponsor waives such requirement in writing.
	
	TREATMENT OF CLAIMS AND INTERESTS – ASASCO DEBTORS
	
	Holders of claims against and equity interests in ASASCO, the Borrowers, the Senior Subordinated Notes Issuer and the other Non-U.S. subsidiary Debtors (the “ASASCO
Debtors”) will receive the following treatment in full and final satisfaction of such claims and interests, which shall be released and discharged under the Plan. Payment of cash claims against the ASASCO Debtors shall be paid from the ASASCO
Sale Proceeds.

  
 7 

			
	DIP Financing Claims	  	Each holder of a “DIP Financing Claim” shall be paid in full on the Plan Effective Date.
		
	Administrative and Priority Claims	  	Each holder of an allowed administrative, priority, and tax claim shall have such claim satisfied in full, in cash, or otherwise receive treatment consistent with the provisions of section 1129(a)(9) of the Bankruptcy
Code.
		
	Prepetition Credit Agreement Claims	  	Each holder of an allowed claim arising under the Credit Agreement (including, for the avoidance of doubt, any “Secured Hedging Obligations” as defined in the Credit Agreement) (collectively, such claims, the
“Prepetition Credit Agreement Claims”) shall be impaired and shall receive on the Plan Effective Date payment of cash in an amount equal to 100% of the outstanding principal amount of such holder’s Prepetition Credit Agreement
Claims plus accrued and unpaid interest to and including the Plan Effective Date at the non-default contract rate.
		
	Senior Subordinated Noteholder Claims	  	Each holder of an allowed claim under the senior notes (the “Senior Subordinated Notes”; and such claims, the “Senior Subordinated Noteholder Claims”) issued under the Indenture, dated as of
September 27, 2018 (the “Indenture”), among GMI, Senior Subordinated Notes Issuer, U.S. Co-Borrower, the Guarantors, Deutsche Trustee Company Limited, Deutsche Bank AG, London Branch, and
Deutsche Bank Luxembourg S.A.) shall be impaired and shall receive on or promptly after the Plan Effective Date payment in cash from the Senior Subordinated Notes Issuer in an amount equal to 90% of (a) the outstanding principal amount of such
Senior Subordinated Notes plus (b) accrued and unpaid interest to and including the petition date at the non-default contract rate (but, for the avoidance of doubt, not including any
“make-whole”).
		
	General Unsecured Claims against the ASASCO Debtor Subsidiaries	  	Other than to the extent such holder opts in to the ASASCO Convenience Class, each holder of an allowed general unsecured claim (each, a “General Unsecured Claim”) against one or more ASASCO Debtor subsidiaries,
including claims against ASASCO guaranteed by one or more ASASCO Debtor subsidiaries (an “ASASCO Group GU Claim”), shall either (a) have its claim assumed by the applicable Reorganized Debtor(s) pursuant to the SAPA as an
“Assumed Liability”, (b) receive such treatment so as to render such holder’s allowed General Unsecured Claim unimpaired pursuant to section 1124 of the Bankruptcy Code, or (c) receive from the Liquidating Trust the lesser of payment
in full in cash or its pro rata share of the amount available for distributions on ASASCO Group GU Claims in the ASASCO Proceeds Waterfall (as defined below).

  
 8 

			
		  	Plan will substantively consolidate the estates of the ASASCO Debtor subsidiaries solely for the purposes of making distributions, except as otherwise determined by the Bankruptcy Court.
		
	General Unsecured Claims against ASASCO Only	  	Other than to the extent such holder opts in to the ASASCO Convenience Class, each holder of an allowed General Unsecured Claim of ASASCO that is not guaranteed by any ASASCO Debtor subsidiary (an “ASASCO GU Claim”)
will either (a) have its General Unsecured Claim assumed by the applicable Reorganized Debtor pursuant to the SAPA as an “Assumed Liability”, (b) receive such treatment so as to render such holder’s allowed General Unsecured
Claim unimpaired pursuant to section 1124 of the Bankruptcy Code, or (c) receive from the Liquidating Trust the lesser of payment in full in cash and its pro rata share of the amount available for distributions on ASASCO GU Claims in the ASASCO
Proceeds Waterfall.
		
		  	The ASASCO GU Claims will include the obligation to make payments under the Tax Matters Agreement, dated September 12, 2018 (the “Tax Matters Agreement”), including in respect of mandatory transition tax as
well as any other obligations of ASASCO incurred in connection with the 2018 spin-off transaction that are not guaranteed by the ASASCO subsidiaries.
		
		  	The allowance of any ASASCO GU Claim arising under the Tax Matters Agreement, the Separation and Distribution Agreement, dated September 27, 2018 (the “Separation Agreement”), or the 2018 spin-off transaction generally will be subject to certain conditions, objections and defenses to be asserted by the Debtors.
		
	ASASCO Indemnity Claims	  	The Indemnification and Reimbursement Agreement, dated September 12, 2018 (the “ASASCO Indemnity”), by and among Honeywell ASASCO Inc., Honeywell ASASCO 2 Inc., and Honeywell International Inc. and the
Indemnification Guarantee Agreement, dated September 27, 2018 (the “ASASCO Indemnity Guarantee Agreement” and, together with the ASASCO Indemnity, the “ASASCO Indemnity Agreements”) will be rejected, and
any resulting claim (an “ASASCO Indemnity Claim”) will be allowed at the amount, if any, stipulated by ASASCO and the applicable counterparty or as determined by the Bankruptcy Court, provided that if it is determined that
the ASASCO Indemnity Agreements are not an executory contract, the allowed amount of any ASASCO Indemnity Claim shall be estimated by the Bankruptcy Court pursuant to an estimation proceeding under section 502(c) of the Bankruptcy Code. Allowance of
the ASASCO Indemnity Claim will be subject to certain conditions, objections and defenses relating to the 2018 spin-off transaction as well as the enforcement of applicable deferral and subordination
provisions.

  
 9 

			
		  	Each holder of an allowed ASASCO Indemnity Claim shall receive from the Liquidating Trust the lesser of payment in full in cash and its pro rata share of the amount available for distributions on ASASCO Indemnity Claims in the
ASASCO Proceeds Waterfall.
		
	Guarantee Claims Subject to the Intercreditor Arrangements	  	All guarantees by ASASCO Debtors of Prepetition Credit Agreement Claims, Senior Subordinated Noteholder Claims and ASASCO Indemnity Claims shall either (i) be contractually released by requisite lenders under Sections 9.02 and
9.14 of the Credit Agreement and the corresponding provisions of the Indenture and the ASASCO Indemnity Agreements on the Plan Effective Date in connection with the consummation of the Acquisition, or (ii) otherwise released and discharged
pursuant to confirmation of the Plan. All claims in connection with such guarantees shall be disallowed and discharged pursuant to the Plan and receive no recovery.
		
		  	Guarantee claims not subject to these intercreditor arrangements shall be treated as Excluded Liabilities against the applicable ASASCO Debtor in accordance with the other applicable provisions of the Plan.
		
	ASASCO Convenience Class Claims	  	The ASASCO Convenience Class shall consist of each ASASCO Group GU Claim or ASASCO GU Claim that is either (a) allowed in an amount that is equal to or less than $250,000, or (b) allowed in an amount that is greater
than $250,000, but with respect to which the holder of such allowed Claim voluntarily and irrevocably reduces the aggregate amount of such allowed claim to $250,000 pursuant to an ASASCO Convenience Class Claim election (each, an
“ASASCO Convenience Class Claim”),
		
		  	If the ASASCO Convenience Class votes to accept the Plan, each holder of an ASASCO Convenience Class Claim shall receive cash promptly on the Plan Effective Date in an amount equal to 90% of the allowed amount of such
ASASCO Convenience Class Claim.
		
		  	If the ASASCO Convenience Class does not vote to accept the Plan, each holder of an ASASCO Convenience Class Claim shall be entitled to its pro rata share of amounts available for distribution to ASASCO Convenience
Class Claims in accordance with the ASASCO Proceeds Waterfall.
		
	ASASCO Proceeds Waterfall	  	The portion of the Liquidating Trust attributable to ASASCO Sale Proceeds, and any proceeds from the Excluded Causes of Action, shall be applied as follows (the “ASASCO Proceeds
Waterfall”):

  
 10 

			
		  	 •  first, to fund the Spin-Off
Litigation Trust (defined below) to pursue the Excluded Causes of Action in an amount determined by the Debtors but not to exceed $25 million;

		
		  	 •  second, to pay on a pro rata basis (a) any allowed ASASCO Group GU
Claims and ASASCO Convenience Class Claims, (b) any allowed ASASCO Indemnity Claims and (c) the allowed Senior Subordinated Noteholder Claims, provided that, as between the Senior Subordinated Noteholder Claims and the ASASCO
Indemnity Claims, all recoveries otherwise allocable to ASASCO Indemnity Claims shall be paid over to the Senior Subordinated Noteholder Claims pursuant to the applicable intercreditor arrangements until such time as the Senior Subordinated
Noteholder Claims have been paid in full in cash;

		
		  	 •  third, to payment of ASASCO GU Claims (i.e., claims with recourse to
ASASCO only and not any operating subsidiary); and

		
		  	 •  fourth, to be contributed to the U.S. Proceeds Waterfall to make
distributions on claims and interests of the U.S. Debtors (as defined below).

		
		  	For the avoidance of doubt, cash distributions on account of any allowed Prepetition Credit Agreement Claims and Senior Subordinated Noteholder Claims shall be paid directly by the Plan Sponsor for the account of the applicable
Borrower or Senior Subordinated Notes Issuer on the Plan Effective Date pursuant to the Plan.
	
	TREATMENT OF CLAIMS AND INTERESTS – U.S. DEBTORS
	
	Holders of claims against and equity interests in GMI, GMHI and the U.S. subsidiary Debtors (the “U.S. Debtors”) will receive the following treatment in full and final satisfaction of such claims and
interests, which shall be released and discharged under the Plan. Payment of cash claims against the U.S. Debtors shall be paid from the U.S. Sale Proceeds.
		
	DIP Financing Claims	  	Each holder of a DIP Financing Claim shall be paid in full on the Plan Effective Date.
		
	Administrative and Priority Claims	  	Each holder of an allowed administrative, priority, and tax claim shall have such claim satisfied in full, in cash, or otherwise receive treatment consistent with the provisions of section 1129(a)(9) of the Bankruptcy
Code.
		
	Prepetition Credit Agreement Claims	  	Each holder of an allowed Prepetition Credit Agreement Claim shall receive on the Plan Effective Date payment of cash in an amount equal to 100% of the outstanding principal amount of such holder’s Prepetition Credit Agreement
Claims plus accrued and unpaid interest to and including the Plan Effective Date at the non-default contract rate.

  
 11 

			
	General Unsecured Claims	  	Each holder of an allowed General Unsecured Claim of the U.S. Debtors shall either (a) have its General Unsecured Claim assumed by the applicable Reorganized Debtor pursuant to the SAPA as an “Assumed Liability”, (b)
receive such treatment so as to render such holder’s allowed General Unsecured Claim unimpaired pursuant to section 1124 of the Bankruptcy Code or (c) receive from the Liquidating Trust the lesser of payment in full in cash or its pro rata
share of the amount available for distributions on General Unsecured Claims of the U.S. Debtors in U.S. Proceeds Waterfall.
		
		  	In its utilization of a single claims pool to address Excluded Liabilities of the U.S. Debtors, the Plan will substantively consolidate the estates of the U.S. Debtors for the purposes of making distributions, except as otherwise
determined by the Bankruptcy Court.
		
	Guarantee Claims	  	All guarantees by U.S. Debtors of Prepetition Credit Agreement Claims shall either (i) be contractually released by requisite lenders under Sections 9.02 and 9.14 of the Credit Agreement and the corresponding provisions of the
Indenture on the Plan Effective Date in connection with the consummation of the Acquisition, or (ii) otherwise released and discharged pursuant to confirmation of the Plan. All claims in connection with such guarantees shall be disallowed and
discharged in connection with the Plan and receive no recovery.
		
		  	Guarantee claims not subject to these intercreditor arrangements shall be treated as Excluded Liabilities against the applicable U.S. Debtor in accordance with the other applicable provisions of the Plan.
		
	Prepetition Common Stock	  	Holders of common stock of GMI will be entitled to receive their pro rata share of all proceeds of the estate remaining after payment of creditors pursuant to the U.S. Proceeds Waterfall.
		
	U.S. Proceeds Waterfall	  	The portion of the Liquidating Trust attributable to U.S. Sale Proceeds and any distributions to GMHI from the ASASCO Proceeds Waterfall shall be applied as follows (the “U.S. Proceeds Waterfall”):
		
		  	 •  first, to pay on a pro rata basis allowed General Unsecured Claims of
the U.S. Debtors; and

		
		  	 •  second, to make distributions to stockholders of
GMI.

  
 12 

			
	OTHER TERMS OF THE PLAN
		
	Intercompany Claims	  	Claims among the Acquired Subsidiaries will be adjusted, continued, settled, reinstated, discharged or eliminated by the Debtors in the ordinary course of business in consultation with the Plan Sponsor prior to the Plan Effective
Date and will be assumed pursuant to the Acquisition. Claims among the Sellers or GMI and between the Sellers or GMI, on the one hand, and Reorganized Debtors, on the other hand, will be settled or otherwise eliminated at or before Closing in
connection with the Plan.
		
	Spin-Off Litigation Trust	  	A litigation trust (the “Spin-Off Litigation Trust”) will be formed by the Plan to pursue the Excluded Causes of Action. On the Plan Effective Date, the Debtors’ rights,
title and interest in the Excluded Causes of Action will vest in the Spin-Off Litigation Trust and will be administered by a trustee (“Spin-Off Litigation
Trustee”) as set forth in the Plan. The Spin-Off Litigation Trust will initially be funded with $25 million with the option to seek further financing as the
Spin-Off Litigation Trustee believes is necessary in its reasonable judgment.
		
	Transaction Costs and Expenses	  	All costs and expenses payable by the Company in connection with the Acquisition (other than taxes arising from the sale of equity interests in Garrett Transportation I Inc. and Garrett LX I S.à r.l., which will be borne by
GMHI and ASASCO, respectively) will be allocated among the Debtors pursuant to the Intercompany Settlement. Payment of such transaction costs and expenses incurred through Closing will be paid or reserved for from the proceeds of the Acquisition in
a manner consistent with the Liquidating Trust Waterfalls.
		
	Tax Matters	  	Notwithstanding anything herein to the contrary, tax issues and matters of tax structure related to the Restructuring will be mutually determined by the Company and the Plan Sponsor.
		
	Conditions Precedent to the Plan Effective Date	  	The occurrence of the Plan Effective Date will be subject to the satisfaction of certain conditions precedent customary in transactions of the type described herein, including, without limitation, the following:
		
		  	 •  The conditions precedent to the Acquisition will have been satisfied or waived
by the Plan Sponsor and the Sellers, as applicable;

		
		  	 •  All definitive documentation for the Restructuring will, where applicable,
have been executed and remain in full force and effect, which definitive documentation will be in form and substance acceptable or reasonably acceptable, as applicable, to the Company and the Requisite Consenting Lenders in accordance with the
RSA;

  
 13 

			
		  	 •  The subsidiary guarantees under the Credit Agreement, the Senior Subordinated
Notes and the ASASCO Indemnity Agreements will have been released as contemplated by the Plan;

		
		  	 •  The Bankruptcy Court will have entered the confirmation order;

		
		  	 •  All releases set forth in the Plan will have been approved by the Bankruptcy
Court;

		
		  	 •  The Company will have obtained all authorizations, consents, regulatory
approvals, rulings, or documents that are necessary to implement and effectuate the Plan;

		
		  	 •  No governmental entity or federal or state court of competent jurisdiction
will, have enacted, issued, promulgated, enforced or entered any law or order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits consummation of the Plan or any of the other transactions
contemplated by the RSA and no governmental entity will have instituted any action or proceeding (which remains pending at what would otherwise be the closing date) seeking to enjoin, restrain or otherwise prohibit consummation of the transactions
contemplated by the RSA or the Plan; and

		
		  	 •  All reasonable and documented fees of approved advisors to the Consenting
Lenders will have been paid in full as provided in the RSA (including the fees of Gibson, Dunn & Crutcher).

		
		  	Customary rights for the Company, the Plan Sponsor or the Consenting Lenders to waive certain of the foregoing conditions precedent shall be set forth in the Plan
		
	Releases and Exculpation	  	The Plan will include customary mutual releases (including third party releases) and exculpation provisions, in each case, to the fullest extent permitted by law, in favor of the Company, the Plan Sponsor, the Consenting Lenders,
the agents, and each of their respective current and former directors, officers, shareholders, employees, partners, managers, members, advisors, legal counsel, agents, and other representatives
		
	Other Customary Plan Provisions	  	The Plan will provide for other standard and customary provisions, including in respect of the cancellation of existing claims and interests, a channeling injunction with respect to claims discharged by the Plan, the vesting of
assets and the compromise and settlement of claims, which provisions, in each case shall be in form and substance reasonably acceptable to the Requisite Consenting Lenders.

  
 14 

			
	Post-Effectiveness Matters	  	The Plan will provide that the Bankruptcy Court will retain jurisdiction until all distributions contemplated by the Plan have been made, including without limitation jurisdiction to resolve any dispute concerning the Intercompany
Settlement, the resolution of disputed claims and the activities and winding up of the Liquidating Trust and the Spin-Off Litigation Trust.

  
 15 

 Annex A 

Organizational Chart 

 

 

 Annex B 

DIP Financing and Adequate Protection Term Sheet 

 Annex B 

$250,000,000 Senior Secured Super-Priority
Debtor-In-Possession Term Loan Facility 
 SUMMARY OF
TERMS AND CONDITIONS 
 This summary of terms and conditions (the “Term Sheet”) outlines certain terms of the proposed DIP Term Loan
Facility referred to below. This Term Sheet was prepared for discussion purposes only and does not constitute a commitment to provide any financing to the Borrower. The terms and conditions of this proposed Term Sheet, including the amounts,
interest rates, amortization, premiums and fees, may be modified or supplemented by Citigroup Global Markets Inc. (the “Lead Arranger”) and the Borrower at any time and from time to time during the course of discussions as a result
of changed market conditions or otherwise. This proposed Term Sheet is not exhaustive as to all of the terms and conditions which would govern the transactions described herein. 

 

			
	Borrower:	 	Garrett Motion Inc., a Delaware corporation (“Holdings” or the “Borrower”), as a debtor and debtor in possession under title 11 of the United States Code (the “Bankruptcy
Code”).
		
	Guarantors:	 	The obligations of the Borrower shall be unconditionally guaranteed, on a joint and several basis, by each entity which guarantees (or is required to guarantee) the obligations of the Borrower and the other Debtors (as defined
below) arising under the Pre-Petition Credit Agreement (as defined below) (the foregoing, each, a “Guarantor” and, collectively, the “Guarantors”). The guarantee of each
Guarantor domiciled outside the United States shall be subject to agreed guaranty and security principles substantially consistent with those applicable under the Pre-Petition Credit Agreement (as defined
below) and reasonably satisfactory to the Required Lenders (as defined below) (the “Guaranty and Security Principles”).
		
	Case:	 	The bankruptcy cases (the “Chapter 11 Cases”) of the Borrower and its direct and indirect affiliates and subsidiaries that are required to be Guarantors under the DIP Term Loan Facility (the
“Debtors”) to be filed under title 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) on or around September 13, 2020 (the date of
filing of such petitions, the “Petition Date”).
		
	Agent:	 	Citibank, N.A. (“Citibank”) shall act as administrative agent and collateral agent for the DIP Term Loan Facility (in such capacity, the “Agent”) on behalf of the Lenders (as defined
below).
		
	Lead Arranger:	 	Citigroup Global Markets Inc. or any of its affiliates.
		
	Lenders:	 	A syndicate of lenders (including the Ad Hoc Group and each other Pre-Petition Lender that has become a party to the RSA (as defined below), who will be offered the opportunity to participate
in the DIP Term Loan Facility on a pro rata basis in accordance with their

  
 1 

			
		 	loans under the Pre-Petition Credit Agreement) arranged by the Lead Arranger and subject to the consent of the Borrower (not to be unreasonably withheld) for the DIP Term Loan Facility (such
syndicate of lenders, each a “Lender” and, collectively, the “Lenders”). All rights and obligations of the Lenders under the DIP Term Loan Facility shall be several, and not joint and several.
		
	Prepetition Credit Agreement	 	That certain Credit Agreement, dated as of September 27, 2018, among Holdings, the intermediate holdcos party thereto, the borrowers party thereto, the lenders party thereto (the
“Pre-Petition Lenders”), the issuing banks party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (together with any successor agent, the “Pre-Petition Agent”), as amended by the First Amendment to the Credit Agreement, dated as of June 12, 2020 (as so amended and as may be further amended, the “Pre- Petition Credit
Agreement”).
		
	DIP Term Loan Facility:	 	A non-amortizing senior secured super-priority debtor-in-possession term loan facility (the “DIP Term Loan Facility”) with a maximum
principal availability of $250 million (the “Total Aggregate Commitment” and the loans thereunder, the “Loans”) to be funded in two borrowings as follows: (a) $100,000,000 made not later than three
business days following the entry of the Interim DIP Order (as defined below) (the “Initial Borrowing”), and (b) $150,000,000 (the “Second Borrowing”) made not later than one business day following the entry of the
Final DIP Order (as defined below), in each case, subject to the terms and conditions described herein and in the Credit Documentation referred to below and in accordance with the Budget (as defined below).
		
	Maturity Date:	 	The DIP Term Loan Facility will mature on the earliest of (such earliest date, the “Maturity Date”):
		
		 	 (a)   March 31, 2021 (the “Scheduled Maturity Date”);
provided, however, that upon the Borrower’s written request received by the Agent and the Required Lenders not later than 10 business days prior to the original Scheduled Maturity Date such Scheduled Maturity Date can be extended
by two months subject to (i) the payment of an extension fee to the Lenders equal to 1.00% of the principal amount of the Loans outstanding at the time of such extension, (ii) no default or Event of Default (as defined below) existing at
the time of such extension and (iii) accuracy of the representations and warranties in all material respects at the time of such extension and after giving effect thereto.

		
		 	 (b)   40 days after entry by the Bankruptcy Court of the Interim DIP Order (as
defined below) approving the DIP Term Loan Facility (the “Interim DIP Period”), if the Final DIP Order (as defined below) has not been entered by the Bankruptcy Court prior to the expiration of such
40-day period;

  
 2 

			
		
		 	 (c)   the effective date of a plan of reorganization or liquidation in the
Chapter 11 Cases (the “Plan Effective Date”);

		
		 	 (d)   the appointment of a trustee or receiver in one or more of the Chapter 11
Cases;

		
		 	 (e)   the first business day after which the Interim Order expires by its terms
or is terminated, unless the Final DIP Order has been entered and become effective prior thereto;

		
		 	 (f)   conversion of any of the Chapter 11 Cases to a case under Chapter 7 of the
Bankruptcy Code or the Borrower or any Guarantor having filed a motion or other pleading seeking the conversion of the Chapter 11 Cases to Chapter 7 of the Bankruptcy Code unless otherwise consented to in writing by the Required
Lenders;

		
		 	 (g)   the consummation of a sale of all or substantially all of the assets of
the Debtors pursuant to section 363 of the Bankruptcy Code or otherwise;

		
		 	 (h)   the date of the filing or express written support by any Debtor of a plan
of reorganization that is not an Acceptable Plan (as defined below); and

		
		 	 (i) the date of termination of the Lenders’ commitments and the acceleration of any
outstanding Loans, in each case, under the DIP Term Loan Facility in accordance with the terms of the credit agreement (the “DIP Credit Agreement”) and the other definitive documentation with respect to the DIP Term Loan
Facility (collectively with the DIP Credit Agreement and the related guarantee and security documents, the “Credit Documentation”).

		
	Closing Date:	 	The date on which the conditions precedent under the heading “Conditions Precedent to the Initial Borrowing” below shall have been met or waived and the Initial Borrowing shall have occurred (the “Closing
Date”).
		
	Purpose:	 	The proceeds of the DIP Term Loan Facility shall be used by the Borrower on or after the Closing Date to (a) pay certain costs, premiums, fees and expenses related to the Chapter 11 Cases, (b) with respect to the Initial
Borrowing, make payments pursuant to any interim or final order entered by the Bankruptcy Court pursuant to any “first day” motions permitting the payment by the Debtors of any prepetition amounts then due and owing (the “First Day
Orders”); provided, that the form and substance of such First Day Orders shall be reasonably acceptable to the Required Lenders, (c) make Adequate Protection Payments (as defined below), and (d) fund working capital needs of
the Debtors and their subsidiaries to the extent permitted by the Budget as in effect from time to time; provided, further, that, in each case (i) such payments shall be made in accordance with the Budget as in effect from time to
time and (ii) no proceeds of the DIP Term Loan Facility will be utilized, directly or indirectly, to prepay, redeem or otherwise discharge any prepetition indebtedness of Holdings or any of its subsidiaries or affiliates except as permitted by
clause (b) above.

  
 3 

			
		
		 	Notwithstanding the foregoing, no portion or proceeds of the DIP Term Loan Facility, the Carve-Out (as defined below) or the Collateral (as defined below) or the
Pre-Petition Collateral (as defined below) may be used in connection with the investigation (including discovery proceedings), initiation or prosecution of any claims, causes of action, adversary proceedings
or other litigation against the Pre-Petition Agent or the Pre-Petition Lenders other than up to $50,000 in connection with the investigation by the Committee (as defined
below), within sixty (60) calendar days following the selection of counsel to the Committee, of claims, causes of action, adversary proceedings or other litigation against the Pre-Petition Agent or the Pre-Petition Lenders solely concerning the validity, enforceability, perfection, priority or extent of the liens on the Pre-Petition Collateral.
		
	Documentation Principles:	 	The Credit Documentation for the DIP Term Loan Facility shall, except as otherwise set forth herein, initially be based upon the definitive documentation for the Pre-Petition Credit Agreement,
with such modifications as may be agreed to reflect the terms set forth in this Term Sheet, the operational requirements of the Agent, other terms customary for a
debtor-in-possession facility of this type (including, without limitation, the wholesale elimination of the concept of Unrestricted Subsidiaries), and other terms to be
mutually agreed by the Lead Arranger, the Required Lenders and the Borrower, which Credit Documentation shall be consistent with this Term Sheet and otherwise acceptable to the Required Lenders (the “Documentation
Principles”).
		
	Interest Rate:	 	Loans under the DIP Term Loan Facility will bear interest at a rate, at Borrower’s option, equal to (x) prior to March 31, 2021, the Base Rate (as defined below) plus 3.50% per annum or LIBOR (subject to a
1.00% LIBOR floor) plus 4.50% per annum and (y) following March 31, 2021 if the Scheduled Maturity Date has been extended at such time, the Base Rate plus 4.50% per annum or LIBOR (subject to a 1.00% LIBOR floor) plus 5.50%
per annum, in each case, compounded monthly and payable every 30 days in arrears. All interest shall be calculated using a 360-day year and actual days elapsed.
		
		 	“Base Rate” means the highest of (i) the Agent’s prime rate, (ii) the federal funds effective rate from time to time (but not less than zero) plus 0.50% and (iii) the LIBOR for an interest
period of one month (giving effect to the LIBOR floor) plus 1.00%.
		
		 	At any time when an Event of Default under the DIP Term Loan Facility has occurred and is continuing, all outstanding amounts under the DIP Term Loan Facility shall bear interest, to the fullest extent permitted by law, at the
applicable interest rate plus 2.00% per annum and shall be payable on demand (the “Default Rate”).

  
 4 

			
		
	Fees:	 	Original Issue Discount: The Loans shall be made after deduction of original issue discount in the amount of 2.00% of the commitments on the Closing Date.
		
		 	Financing Fee: Each Lender shall receive a financing fee in the amount of 1.00% of its commitments on the Closing Date, payable in full in cash on the Closing Date, provided, for the avoidance of doubt, that such financing
fee may be net funded out of the Initial Borrowing (if any) to account therefor.
		
		 	The Agent shall receive an annual administrative agency fee in the amount and as set forth in the Fee Letter. In addition, all fees of the Agent, as fronting and seasoning bank, charged in connection with any “fronting”
and “seasoning” of the DIP Term Loan Facility shall be paid by the Borrower.
		
	Adequate Protection:	 	As adequate protection for any diminution in the value of the interests of the Pre-Petition Lenders in the collateral securing the Pre-Petition Credit
Agreement (the “Pre-Petition Collateral”), the Pre-Petition Lenders will receive, subject to the Carve-Out (as
defined below), the following as adequate protection:
		
		 	 (a)   the payment of the reasonable and documented out-of-pocket fees and expenses of (x) Gibson Dunn & Crutcher as legal counsel to the Ad Hoc Group and one local counsel in each applicable material jurisdiction, (y) PJT Partners as financial
advisor to the Ad Hoc Group (the counsel and advisors in the foregoing clauses (x) and (y), the “Ad Hoc Group Advisors”) and (z) the Pre-Petition Agent (which shall include
the reasonable and documented out-of-pocket fees and expenses of one primary legal counsel and one local counsel in each applicable material jurisdiction);

		
		 	 (b)   subject to local law limitations, validly binding, enforceable,
unavoidable and perfected additional and replacement liens on and security interests in the Debtors’ Pre-Petition Collateral and the Collateral (as defined below) junior only to the liens granted to the
Lenders under the DIP Term Loan Facility and existing valid, perfected, unavoidable and superior liens in such Collateral held by other creditors;

		
		 	 (c)   an allowed superpriority administrative expense claim as contemplated by
section 507(b) of the Bankruptcy Code solely for any diminution in collateral value, which claim shall have priority over all priority claims (other than the claims of the Lenders under the DIP Term Loan Facility) and unsecured claims against the
Debtors and their estates, now existing or hereafter arising, of any kind or nature whatsoever, including, without limitation, administrative expenses of the kinds specified in or ordered pursuant to sections 105, 326, 328, 330, 331, 503(a), 506(c),
507(a), 507(b), 546(c), 726(b), and 1114 of the Bankruptcy Code or otherwise; and

  
 5 

			
		
		 	 (d)   post-petition monthly interest payments, payable on the last business day
of each month, in an amount equal to the non-default interest rate payable under the Pre-Petition Credit Agreement (including, for the avoidance of doubt, payment of all prepetition accrued and unpaid interest
under the Pre-Petition Credit Agreement), with default interest of an additional 2% under Section 2.13 of the Pre-Petition Credit Agreement to accrue in kind (collectively, “Adequate
Protection Payments”).

		
	Necessary Consent to Priming on Foreign Collateral:	 	The Borrower agrees that it will offer to any Lender who signs the RSA and the amendment to the Pre-Petition Credit Facility contemplated thereby prior to the hearing on Final DIP Order and
agrees pursuant thereto and the other documents contemplated thereby to consent to the incurrence of the Loans and the entry of the DIP Orders a consent fee equal to 0.25% of the principal amount of such Lender’s loans (without duplication of
any loans previously held by any other Lender at the time such Lender executed a counterpart to the RSA) outstanding under the Pre- Petition Credit Agreement as of the date such Lender executes a counterpart to the RSA.
		
	Optional Prepayments and Commitment Reductions:	 	The Borrower may, upon at least one business day’s notice, prepay in full or in part, subject to prepayment premium set forth under the heading “Prepayment Premium” below and subject to breakage costs, if applicable,
the Loans; provided, that each such partial prepayment shall be in a minimum amount to be agreed. Once repaid, Loans may not be re-borrowed.
		
	Mandatory Prepayments:	 	Mandatory prepayments of the Loans customary for similar debtor-in-possession financings shall be required, including, in an amount equal to (a) 100% of insurance and condemnation proceeds,
(b) 100% of net cash proceeds from the issuance or incurrence of post-petition indebtedness not permitted by the DIP Credit Agreement and (c) 100% of the net cash proceeds of any asset sales (other than dispositions in the ordinary course of
business, dispositions specifically approved by the Required Lenders in advance, dispositions provided for in the Budget and other customary exceptions to be agreed) (without any reinvestment rights but with a dollar threshold in an amount to be
agreed and subject to customary exceptions with terms to be agreed related to repatriation of proceeds, tax consequences and similar matters); provided, that if the Required Lenders so consent (such consent not to be unreasonably withheld), asset
sale proceeds received pursuant to this section may be utilized by the Debtors in accordance with the Budget.

  
 6 

			
		
		 	All voluntary prepayments and mandatory prepayments (within three business days of receipt thereof) shall be applied as follows: first, to pay accrued and unpaid fees and expenses of the Agent in its capacity as such and fees
and expenses of the Ad Hoc Group Advisors, second, to pay accrued and unpaid interest on, and other expenses in respect of, the obligations under the DIP Term Loan Facility, to the extent then due and payable; and third, to repay any
principal amounts or other obligations which have been advanced and are outstanding under the DIP Term Loan Facility.
		
	Prepayment Premium:	 	In the event that prior to the Scheduled Maturity Date (including, for the avoidance of doubt, as may be extended as provided hereby) the Borrower (i) prepays (except as a result of the consummation of the restructuring
transaction contemplated by the RSA (as defined below), a 363 sale or another restructuring transaction, in each case, approved by the Required Lenders (provided that, so long as all obligations under the
Pre-Petition Credit Agreement and the DIP Credit Agreement are repaid in full in cash under the terms of such transaction, such approval shall not be unreasonably withheld) and the Bankruptcy Court),
refinances, substitutes or replaces any Loans (including any prepayment under clause (b) of section “Mandatory Prepayment” hereof but not including prepayments under clauses (a) or (c)), or (ii) effects any amendment or
other modification of the Credit Documentation, in the case of this clause (ii) resulting in a Repricing Transaction, the Borrower shall pay to the Agent, for the ratable account of each of the applicable Lenders, (x) in the case of clause (i), a
prepayment premium of 1.00% of the aggregate principal amount of the Loans so prepaid, refinanced, substituted or replaced and (y) in the case of clause (ii), a fee equal to 1.00% of the aggregate principal amount of the applicable Loans
subject to such Repricing Transaction and outstanding immediately prior to such amendment or modification. Such amounts shall be due and payable, in the case of clause (i), on the date of the effectiveness of such prepayment, refinancing,
substitution or replacement and in the case of clause (ii), the date of the effectiveness of such Repricing Transaction.
		
		 	“Repricing Transaction” means (i) the prepayment, repayment, refinancing, substitution or replacement of all or any portion of the Loans with the proceeds of, or any conversion of the Loans into, any new or
replacement loans or other indebtedness bearing interest at an all-in yield less than the all-in yield applicable to the Loans (as such comparative rates are determined
by the Agent) and (ii) any amendment or other modification to the DIP Term Loan Facility that, directly or indirectly, reduces the all-in yield applicable to the Loans, including any assignment in connection
therewith in accordance with the “yank-a-bank” provisions.
		
	Security:	 	Subject to the Guaranty and Security Principles, all amounts owing by the Borrower under the DIP Term Loan Facility and by the Guarantors in respect thereof will be secured by a valid and perfected security interest in, with the
priority described below under the heading “Priority,” and lien on substantially all of the

  
 7 

			
		 	Borrower’s and the Guarantors’ tangible and intangible assets, including, without limitation, any collateral granted in respect of the Pre-Petition Credit Agreement and including,
without limitation, the following, but in each case subject to certain customary exclusions to be agreed (collectively, the “Collateral”): accounts receivable, equipment, inventory, contracts, fee owned real estate, real property
leaseholds, investment property, insurance proceeds, deposit accounts, monies, equity interests of subsidiaries of each Debtor and the products and proceeds thereof and, upon entry of the Final DIP Order, any proceeds of avoidance actions available
to the Debtors’ bankruptcy estates pursuant to the Bankruptcy Code.
		
		 	Notwithstanding the foregoing, other than as provided in the Interim DIP Order or the Final DIP Order, (i) no perfection steps shall be required to be taken in any jurisdiction other than the United States (or any state
thereof), Luxembourg, Switzerland, Japan, Mexico, Romania and Slovakia and (ii) guarantees, collateral and perfection in jurisdictions outside the United States shall be subject to Guaranty and Security Principles.
		
	Priority:	 	Subject to the Carve-Out, all amounts owing by the Borrower under the DIP Term Loan Facility and by the Guarantors in respect thereof shall at all times:
		
		 	 (a) pursuant to section 364(c)(1) of the Bankruptcy Code, be entitled to joint and several superpriority administrative
expense claims status in the Chapter 11 Cases;

		
		 	 (b) pursuant to section 364(c)(2) of the Bankruptcy Code, be secured by a valid, enforceable, unavoidable and perfected
first priority lien on all Collateral that is not subject to valid, perfected, enforceable and non-avoidable liens as of the Petition Date, including upon entry of the Final DIP Order, any proceeds of
avoidance actions available to the Debtors’ bankruptcy estates pursuant to the Bankruptcy Code;

		
		 	 (c) pursuant to section 364(c)(3) of the Bankruptcy Code, be secured by a valid, enforceable, unavoidable and perfected
junior security interest and lien on all Collateral that is subject to valid, perfected, enforceable and non-avoidable liens as of the Petition Date in favor of third parties that were in existence immediately prior to the Petition Date, or to valid
and non-avoidable liens in favor of third parties that were in existence immediately prior to the Petition Date that were perfected subsequent to the Petition Date as permitted by section 546(b) of the
Bankruptcy Code, subject as to priority to such liens in favor of such third parties; and

  
 8 

			
		
		 	 (d) pursuant to section 364(d) of the Bankruptcy Code, be secured by a perfected first priority and priming lien on the
Pre-Petition Collateral.

		
		 	Such liens shall be senior to all administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code.
		
		 	All liens authorized and granted pursuant to the Interim DIP Order or the Final DIP Order, as applicable, in each case, entered by the Bankruptcy Court approving the DIP Term Loan Facility (the “DIP Liens”)
shall be deemed valid, effective, unavoidable and perfected as of the Petition Date, and no further filing, notice or act will be required to effect such perfection. The Lenders, or the Agent on behalf of the Lenders, shall be permitted, but not
required, to make any filings, deliver any notices or take any other acts as may be desirable under state law or other law in order to reflect the perfection and priority of the Lenders’ claims described herein.
		
		 	In furtherance of the foregoing, the DIP Term Loan Facility will be subject to intercreditor arrangements described in the DIP Orders which are reasonably satisfactory to the Agent (acting at the direction of the Required Lenders),
which, among other things, will provide for the consensual priming of the liens granted to the Pre- Petition Agent with respect to the Pre-Petition Collateral.
		
	Carve-Out:	 	The “Carve-Out” means the sum of:
		
		 	 (a)   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;

		
		 	 (b)   to the extent allowed by the Bankruptcy Court, (i) as of the date of
delivery of the Carve-Out Notice (as defined below), all accrued and unpaid fees and expenses incurred by persons or firms retained by the Debtors pursuant to sections 327, 328 or 363 of the Bankruptcy Code
(the “Debtor Professionals”) and by the statutory unsecured creditors’ committee (if any) appointed in the Chapter 11 Cases pursuant to section 1103 of the Bankruptcy Code (the “Committee”) and (ii) after the
delivery of a Carve- Out Notice, all unpaid fees and expenses incurred by Debtor Professionals and the Committee in an aggregate amount not to exceed $5,000,000; and

		
		 	 (c)   all reasonable and documented fees and expenses incurred by a trustee
under section 726(b) of the Bankruptcy Code not to exceed $50,000.

		
		 	For purposes of the foregoing, “Carve-Out Notice” shall mean a written notice delivered by the Agent (at the direction of the Required Lenders) to the Debtors and their
counsel, the Office of the United States Trustee, and counsel to the Committee, which notice may be delivered following the occurrence and during the continuance of an Event of Default.

  
 9 

			
		
		 	Any funding of the Carve-Out shall be entitled to the protections granted under the Interim DIP Order, the Final DIP Order, the Credit Documentation, the Bankruptcy Code and applicable law. Up
to $50,000 of the Carve-Out will be available to the Committee, within sixty (60) calendar days following the appointment of the Committee, to investigate claims and liens of the Pre-Petition Term Lenders, but no part of the Carve-Out shall include fees, costs or expenses incurred by any party related in any way to the challenge of any claim or lien
of, or obligation to, the Pre-Petition Term Lenders or any attempts to prevent, hinder or otherwise delay any enforcement or realization upon any Collateral; provided, that any amounts incurred in
excess of such $50,000 cap shall not be payable, including as an administrative expense claim, in the Chapter 11 Cases.
		
	Conditions Precedent to Initial Borrowing:	 	The Credit Documentation will contain customary conditions precedent to the availability of the Initial Borrowing under the DIP Term Loan Facility and other conditions as may be reasonably agreed between the Agent (acting at the
direction of the Required Lenders) and the Borrower to be appropriate to the specific transaction, and in any event, including, without limitation:
		
		 	 (a)   The preparation, authorization and execution of the Credit Documentation
with respect to the DIP Term Loan Facility, in form and substance satisfactory to the Agent and the Required Lenders.

		
		 	 (b)   No later than five business days after the Petition Date, the Bankruptcy
Court shall have entered an interim order (the “Interim DIP Order”), in form and substance satisfactory to the Required Lenders, authorizing and approving the DIP Term Loan Facility and the transactions contemplated hereby,
including Adequate Protection Payments, and the Interim DIP Order shall not have been stayed, revoked or modified.

		
		 	 (c)   All premiums, fees and documented out of pocket fees and expenses
(including reasonable and documented fees and expenses of the Ad Hoc Group Advisors) required to be paid to the Lenders on or before the Closing Date shall have been paid.

		
		 	 (d)   The delivery of a 13-week cash
flow projection and initial DIP budget in form and substance reasonably acceptable to the Required Lenders which shall set forth, on a weekly basis, among other things, customer collections and other receipts, operating and other disbursements,
professional fees, net cash flows, liquidity and restructuring related amounts and otherwise contain such details and assumptions as shall be reasonably satisfactory to the Required Lenders (the “Initial Budget”), which Initial
Budget shall be deemed a Budget for all purposes hereunder.

  
 10 

			
		
		 	 (e)   The Debtors shall have delivered projections covering the tenor of the DIP
Term Loan Facility in form and substance reasonably satisfactory to the Required Lenders.

		
		 	 (f)   Subject to a post-closing period to be agreed upon, the Agent shall have
received endorsements naming the Agent on behalf of the Lenders as additional insured and loss payee under all insurance policies to be maintained with respect to the properties of the Debtors forming part of the Collateral.

		
		 	 (g)   The Lenders shall have a valid, enforceable, unavoidable and perfected
lien on and security interest in the Collateral with the priority described herein (subject in the case of any actions and documentation outside of the United States to post-closing periods and mechanics to be agreed). Subject to the immediately
preceding parenthetical, all filings, recordations and searches necessary or desirable in connection with such liens and security interests shall have been duly made; and all filing and recording fees and taxes shall have been duly
paid.

		
		 	 (h)   Since December 31, 2019, there shall not exist any action, suit,
investigation, litigation or proceeding pending (other than the Chapter 11 Cases) or threatened in any court or before any arbitrator or governmental authority that, in the reasonable opinion of the Agent (acting at the direction of the Required
Lenders), affects any of the transactions contemplated hereby in any material respect, or that has or would be reasonably likely to have a material adverse effect on the businesses, assets, operations or condition (financial or otherwise) of the
Debtors and their respective direct and indirect subsidiaries (taken as a whole) or any of the transactions contemplated hereby.

		
		 	 (i) No default or Event of Default shall exist under the Credit Documentation or the Interim
DIP Order.

		
		 	 (j) The representations and warranties of the Borrower and each Guarantor under the Credit
Documentation shall be true and correct in all material respects as of the Closing Date and after giving effect to any funding on such date.

		
		 	 (k)   The Lenders shall have received all documentation and other information
required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the U.S. Patriot Act and the requirements of 31 C.F.R § 1010.230 (the “Beneficial
Ownership Regulation”).

		
		 	 (l) Retention of restructuring advisors reasonably acceptable to the Required Lenders (it
being understood and agreed that Perella Weinberg Partners are acceptable to the Required Lenders).

  
 11 

			
		
		 	 (m) The aggregate outstanding principal amount of revolving loans under the Pre-Petition Credit Agreement shall not exceed the amount outstanding as of September 2, 2020.

		
		 	 (n)   The Debtors and Pre-Petition
Lenders holding no less than 50.1% of the outstanding principal amount of loans and/or revolver exposure outstanding under the Pre-Petition Credit Agreement (such
Pre-Petition Lenders represented by the Ad Hoc Group Advisors and party to the RSA, collectively, the “Ad Hoc Group”) shall have entered into a restructuring support agreement (the
“RSA”) on terms satisfactory to the Required Lenders and the RSA shall be in full force and effect and no default by the Borrower or any Guarantor under the RSA and no Lender Termination Event or Company Termination Event as defined
in the RSA shall have occurred and be continuing; and

		
		 	 (o)   Pre-Petition Lenders holding not
less than 50.1% of the outstanding principal amount of loans and/or revolver exposure under the Pre-Petition Credit Agreement shall have consented to the DIP Term Loan Facility including the priming liens
contemplated hereby.

		
	Conditions Precedent to Each Borrowing:	 	On the Closing Date and the funding date of the Second Borrowing, if any, the following conditions precedent shall have been satisfied:
		
		 	 (a)   No default or Event of Default shall exist under the Credit Documentation
or the Interim DIP Order.

		
		 	 (b)   The representations and warranties of the Borrower and each Guarantor
under the Credit Documentation shall be true and correct in all material respects as of such date after giving effect to any such funding.

		
		 	 (c)   The making of such Loan shall not violate any requirement of law and shall
not be enjoined, temporarily, preliminarily or permanently.

		
		 	 (d)   With respect to the Second Borrowing, an order authorizing and approving
on a final basis the DIP Term Loan Facility and the transactions contemplated hereby, including the adequate protection arrangements set forth in clauses (a) through (d) under the heading “Adequate Protection” above (the
“Final DIP Order” and, together with the Interim DIP Order, the “DIP Orders”) shall have been entered by the Bankruptcy Court and the Final DIP Order shall be satisfactory to the Required Lenders.

		
		 	 (e)   The Agent shall have received a properly completed borrowing notice
subject to the advance notice requirements of the DIP Credit Agreement.

		
		 	 (f)   The DIP Orders (and in the case of the First Borrowing only, the Initial
Order only) shall be in full force and effect and shall not have been vacated, reversed, modified, amended or stayed in any manner adverse to the Lenders without the consent of the Required
Lenders.

  
 12 

			
		
		 	 (g)   The Borrower and the Guarantors shall be in compliance with the Budget in
all respects and the proceeds of the Loans shall be used as set forth in the Budget (in each case, subject to the Permitted Variance).

		
		 	 (h)   The RSA shall be in full force and effect and no material default by the
Borrower or any Guarantor shall have occurred and be continuing.

		
		 	 (i) The Borrower shall be in compliance in all respects with the Milestones.

		
	Representations and Warranties:	 	The Credit Documentation will contain representations and warranties consistent with the Documentation Principles with such changes thereto as may be reasonably agreed between the Required Lenders and the Borrower as appropriate to
reflect terms which are usual and customary for debtor in possession financings of this size, type and purpose (in certain cases, subject to limited exceptions, qualifications and carve outs).
		
	Financial Reporting Requirements:	 	The Borrower shall provide to the Lenders:
		
		 	 (a)   monthly unaudited summary consolidated financial statements of the
Borrower and its subsidiaries, including balance sheet, income statement and cash flow statement within 30 days of the end of each fiscal month, certified by the Borrower’s chief financial officer;

		
		 	 (b)   quarterly unaudited consolidated financial statements of the Borrower and
its subsidiaries within 45 days of the end of each fiscal quarter, certified by the Borrower’s chief financial officer;

		
		 	 (c)   to the extent the Scheduled Maturity Date is extended as set forth under
the heading “Maturity Date” above, annual audited consolidated financial statements of the Borrower and its subsidiaries within 90 days of the end of each fiscal year, accompanied by an unqualified opinion (except with respect to any
“going concern” qualification, exception or matter of emphasis) of a nationally-recognized independent accounting firm; and

		
		 	 (d)   promptly after they become available, copies of all material periodic and
other reports, proxy statements and other materials filed by the Borrower or any of such subsidiaries with the Securities and Exchange Commission or any national securities exchange or distributed to shareholders.

		
	Other Reporting Requirements:	 	The Credit Documentation will be consistent with the Documentation Principles and will contain additional financial reporting requirements that are customary for similar debtor-in-possession
financings as may be reasonably agreed between the Required Lenders and the Borrower.

  
 13 

			
		
		 	The Credit Documentation will contain additional requirements that Debtors’ counsel provide copies of all material pleadings and/or filings in the Chapter 11 Cases to be made by the Debtors to the Agent and its counsel, and to
the Lenders and the Ad Hoc Group Advisors, in each case not later than three calendar days in advance of filing unless otherwise reasonably agreed to by the Agent (acting at the direction of the Required Lenders). The Debtors shall also provide
copies of any monthly reporting provided to the Bankruptcy Court or the U.S. Trustee.
		
	Budget and Variances:	 	Beginning on the third Thursday following the Petition Date and on each four week anniversary thereof, the Debtors shall deliver to the Agent and the Lenders an updated 13-week cash flow
projection and a proposed updated budget substantially in the form of the Initial Budget or in such other form as the Required Lenders may agree in their reasonable discretion (the “Proposed Budget”). To the extent such Proposed
Budget is approved by the Required Lenders in their reasonable discretion, such Proposed Budget shall thereafter be the “Budget” for such period contained therein and for all purposes hereunder. No such Proposed Budget shall become
a Budget until so approved; provided that the Required Lenders shall be deemed to have approved such Proposed Budget if they have not objected thereto within five (5) business days after delivery thereof. In the event that any Proposed Budget
is not so approved, the last approved Budget without giving effect to any update, modification or supplement shall apply to the projection period.
		
		 	The Debtors shall not pay any operating disbursements (excluding professional fees and expenses, adequate protection payments, debt service costs and settlement and other costs associated with hedging and derivative instruments)
other than those set forth in the Budget, subject to permitted variances as provided herein. The actual amount of operating disbursements (excluding professional fees and expenses, adequate protection payments, debt service costs and settlement and
other costs associated with hedging and derivative instruments) during a Budget Period (as defined below) may not exceed the projected expenditures (on a cumulative basis) in the Budget for such Budget Period by more than 17.5% (the “Budget
Variance”); provided, that any negative disbursement variance to the Budget from the immediately preceding Budget Period may be applied to the current Budget Period’s disbursements for the purpose of determining
compliance for such Budget Period, as applicable. The Budget Variances shall be tested weekly on a rolling-four week and a cumulative basis since the Petition Date. “Budget Period” shall mean each four week period following the
Petition Date commencing with the first four weeks ended after the Petition Date.

  
 14 

			
		
		 	The Debtors shall deliver to the Agent and the Lenders by 12:00 p.m., Eastern time, on Thursday of each week, rolling 13-week cash flows, together with a reconciliation for the prior 4 week
cumulative period of actual operating disbursements (excluding professional fees and expenses, adequate protection payments, debt service costs and settlement and other costs associated with hedging and derivative instruments) to the amounts set
forth in the Budget for such period in form reasonably satisfactory to the Required Lenders.
		
	Financial Covenants:	 	None.
		
	Affirmative Covenants:	 	The Credit Documentation will be consistent with the Documentation Principles and will contain additional affirmative covenants that are customary for similar
debtor-in-possession financings as may be reasonably agreed between the Required Lenders and the Borrower and shall, in any event, include (i) the delivery of all
material pleadings, motions and other material documents filed with the Bankruptcy Court on behalf of the Debtors in the Chapter 11 Cases to the Agent and its counsel and the Required Lenders and the Ad Hoc Group Advisors at least three calendar
days prior to filing unless otherwise reasonably agreed to by the Required Lenders; any pleadings or motions and orders related to the DIP Term Loan Facility or use of proceeds of the DIP Term Loan Facility must be acceptable to the Required
Lenders, (ii) compliance with Budget covenants consistent with the section titled “Budget and Variances,” (iii) bi-monthly update calls with the Lenders (unless a default or an Event of Default has
occurred and is continuing, in which case such calls shall be weekly, or more frequently if requested by the Required Lenders), with such telephone conferences being split into a public-siders and non-public-siders portion, and weekly update calls
with the Ad Hoc Group Advisors and (iv) commercially reasonable efforts to obtain a rating (but not any specific rating) from both S&P and Moody’s by no later than 15 calendar days after the entry of the Interim DIP Order (or such
later date as may be reasonably agreed by the Required Lenders).
		
	Negative Covenants:	 	The Credit Documentation will be substantially consistent with the Documentation Principles and will contain additional negative covenants that are customary for similar debtor-in-possession financings as may be reasonably agreed between the Required Lenders and the Borrower.
		
	Events of Default:	 	The Credit Documentation will be consistent with the Documentation Principles and will contain additional events of default that are customary for similar
debtor-in-possession financings as may be reasonably agreed between the Required Lenders and the Borrower (collectively, the “Events of Default”) and
shall, in any event, include (with materiality qualifications, thresholds and cure periods to be agreed):
		
		 	 (i)   failure to make any payment when due under the Credit
Documentation;

  
 15 

			
		
		 	 (ii)   noncompliance with certain affirmative covenants to be agreed (including,
without limitation, the Milestones and the Budget Variance) or with negative covenants;

		
		 	 (iii)    failure to observe or perform any covenant, condition or
agreement contained in any loan document (other than those which constitute a separate event of default), for more than 30 days following the earlier of knowledge of the Borrower or notice from the Agent or the Required Lenders;

		
		 	 (iv)  breaches in any material respect of representations and warranties, in either
case, under the Credit Documentation;

		
		 	 (v)    cross-payment default and cross-acceleration to any prepetition
indebtedness above a threshold to be agreed that is not stayed by the automatic stay in the Chapter 11 Cases;

		
		 	 (vi)  failure to satisfy or stay execution of judgments above a threshold to be
agreed;

		
		 	 (vii)   the occurrence of certain ERISA events above a threshold to be
agreed;

		
		 	 (viii)   impairment of the Credit Documentation or the security interests
described in “Security” above;

		
		 	 (ix)  change of ownership or control other than as a part of an Acceptable
Plan;

		
		 	 (x)    dismissal of the Chapter 11 Cases or conversion of the Chapter 11
Cases into cases under chapter 7 of the Bankruptcy Code;

		
		 	 (xi)  bringing of a motion or taking of any action to obtain additional financing
under Section 364(c) or Section 364(d) of the Bankruptcy Code not otherwise permitted pursuant to the Credit Documentation;

		
		 	 (xii)   a trustee or receiver shall have been appointed in one or more of the
Chapter 11 Cases;

		
		 	 (xiii)   appointment of a responsible officer or examiner with enlarged powers
relating to the operation of the business of any Debtor;

		
		 	 (xiv)  granting of relief from any stay of proceeding (including the automatic stay)
so as to allow a third party to proceed against any material asset of the Debtors, except as the Required Lenders may reasonably approve;

  
 16 

			
		
		 	 (xv)    entry of an order granting any superpriority claim which is senior
to or pari passu with the Lenders’ claims under the DIP Term Loan Facility without the prior consent of the Required Lenders (other than as described under the heading “Priority” above);

		
		 	 (xvi)  entry of an order confirming (or the filing or support in the Bankruptcy Court
by the Debtors of any motion or pleading requesting confirmation of or otherwise in support of, or the taking by the Debtors of any corporate action to approve) a plan of reorganization with respect to any Debtor other than an Acceptable Plan (where
“Acceptable Plan” shall mean (i) the Plan contemplated by the RSA, (ii) a substantially similar chapter 11 plan acquisition of substantially all of the assets of the Debtors that provides equal or more favorable plan
treatment of the Pre-Petition Lenders, or (iii) another chapter 11 plan of reorganization that pays the Pre-Petition Lenders in cash in full on the Plan Effective Date;
provided that no chapter 11 plan shall be an Acceptable Plan unless it is expected to be consummated prior to the Maturity Date and is not in any other manner adverse to the Pre-Petition Lenders (in
their capacities as such) when compared to the Plan contemplated by the RSA), or filing of any plan by the Debtors or support in the Bankruptcy Court of any plan that is not an Acceptable Plan;

		
		 	 (xvii)  entry of an order staying, reversing, vacating or otherwise modifying, without
the prior written consent of the Required Lenders, the DIP Term Loan Facility, the Interim DIP Order or the Final DIP Order, and such order is not stayed or reversed within two business days after entry thereof;

		
		 	 (xviii)   payment of, or granting adequate protection with respect to,
prepetition debt (other than as contemplated by the Credit Documentation (including the DIP Orders)), unless otherwise agreed by the Required Lenders;

		
		 	 (xix)  cessation of liens or superpriority claims granted with respect to the
Collateral securing the Debtors’ obligations in respect of the DIP Term Loan Facility to be valid, perfected and enforceable in all respects with the priority described herein;

		
		 	 (xx)    the occurrence of any Lender Termination Event, as defined in the
RSA, or the termination of the RSA in accordance with its terms, other than in connection with the filing of an Acceptable Plan;

		
		 	 (xxi)  (A) the allowance of any claim or claims under section 506(c) of the Bankruptcy
Code against or with respect to any of the Pre-Petition Collateral or the Collateral;

  
 17 

			
		
		 	 (B) any order charging any of the Pre-Petition Collateral or the Collateral
under section 506(c) of the Bankruptcy Code or limiting the extension under section 552(b) of the Bankruptcy Code of the liens of the Pre-Petition Lenders on the
Pre-Petition Collateral to any proceeds, products, offspring, or profits of the Pre-Petition Collateral acquired by the Borrower or any Guarantors after the Petition
Date; or (C) entry of the Final DIP Order without a waiver, in form and substance satisfactory to the Required Lenders, of (i) the right to surcharge the Pre-Petition Collateral or the Collateral under
section 506(c) of the Bankruptcy Code and (ii) any ability to limit the extension under section 552(b) of the Bankruptcy Code of the liens of the Pre-Petition Lenders on the
Pre-Petition Collateral to any proceeds, products, offspring, or profits of the Pre-Petition Collateral acquired by the Borrower or any Guarantors after the Petition
Date;

		
		 	 (xxii)  the failure of the Borrower or any Guarantor to perform any of its obligations
under the DIP Orders, the cash management order, or any other order of the Bankruptcy Court approving the transactions under the Credit Documentation in any material respect; and

		
		 	 (xxiii)   any Debtor shall be enjoined from conducting any material portion of
its business, any disruption of the material business operations of the Debtors shall occur, or any material damage to or loss of material assets of any Debtor shall occur.

		
	Remedies:	 	Upon the occurrence and during the continuance of an Event of Default,
		
		 	 (a)   subject to the Interim DIP Order or the Final DIP Order, as applicable,
the Agent with the consent of the Required Lenders may, and upon the request of the Required Lenders shall, immediately take any or all of the following actions: (i) deliver a notice of an Event of Default; (ii) charge the Default Rate of
interest on the Loans and other outstanding obligations; (iii) terminate all commitments under the DIP Term Loan Facility; (iv) declare the principal of and accrued interest, premiums, fees and expenses constituting the obligations under
the DIP Term Loan Facility to be immediately due and payable; and (v) subject to paragraph (b) below, exercise all other rights and remedies set forth in the Credit Documentation, the DIP Orders and as otherwise available at law;
and

		
		 	 (b)   upon five (5) days’ written notice from the Agent (at the
direction of the Required Lenders pursuant to and in accordance with the Credit Documentation), the automatic stay of section 362 of the Bankruptcy Code shall be

  
 18 

			
		 	 terminated without further order, application, motion of the Bankruptcy Court, without the need for filing any motion
for relief from the automatic stay or any other pleading, for the purpose of permitting the Agent (at the direction of the Required Lenders) to do any of the following: (i) exercise remedies against the Collateral, (ii) enforce all of the
guaranty rights and (iii) exercise all rights and remedies set forth in the Credit Documentation, the DIP Orders and as otherwise available at law.

		
		 	Section 362 relief from the stay in favor of the Lenders shall be embodied in the DIP Orders and any other order approving the DIP Term Loan Facility and the use of cash collateral. At any hearing addressing the exercise of
remedies by the Agent or the Lenders under the Credit Documentation, the only objection that may be raised by the Debtors or the Committee shall be whether an Event of Default has in fact occurred and is continuing, and the Debtors and the Committee
shall waive their right to seek any relief, whether under section 105 of the Bankruptcy Code or otherwise, that would in any way impair, limit, restrict or delay the rights and remedies of the Agent under the Credit Documentation.
		
		 	Following the filing or support in the Bankruptcy Court by the Debtors of any motion or pleading, or the taking by the Debtors of any corporate action to approve, a plan of reorganization other than an Acceptable Plan, and upon
seven (7) days’ prior written notice from the Pre-Petition Agent (at the direction of required lenders under the Pre-Petition Credit Agreement), the automatic
stay under section 362 shall automatically terminate for the limited purpose of permitting Pre-Petition Lenders to exercise rights and remedies against or pertaining to cash collateral.
		
	Waivers:	 	The DIP Orders shall include the following waivers, subject to entry of the Final DIP Order:
		
		 	 1.  Waiver of the equitable doctrine of “marshaling” with respect to the
Collateral and the Pre-Petition Collateral;

		
		 	 2.  Waiver of the “equities of the case” exception to section 552(b) of the
Bankruptcy Code; and

		
		 	 3.  Waiver of the ability to surcharge the Collateral and the Pre- Petition
Collateral, including under section 506(c) of the Bankruptcy Code.

		
	Credit Bid Rights:	 	The Lenders and the Pre-Petition Lenders shall have the right to credit bid (either directly or through one or more acquisition vehicles) the full amount of their claims in connection with any
sale of the Debtors’ assets (in whole or in part), including without limitation, sales occurring pursuant to section 363 of the Bankruptcy Code or included as part of any chapter 11 plan subject to confirmation under section
1129(b)(2)(A)(ii)-(iii) of the Bankruptcy Code.

  
 19 

			
		
	Milestones:	 	To be agreed, but shall include the following:
		
		 	Motion for approval of bidding protections: (T+2)
		
		 	Entry of order approving bidding protections: (T+35)
		
		 	Motion for approval of disclosure statement: (T+35)
		
		 	Filing plan of reorganization: (T+35)
		
		 	Entry of order approving disclosure statement: (T+90)
		
		 	Entry of order approving sale and confirming the Acceptable Plan: (T+150)
		
		 	Plan Effective Date: (T+210)
		
	Indemnification and Expenses:	 	Customary for similar debtor-in-possession financing.
		
	Assignments; Participations:	 	Customary for similar debtor-in-possession financing, it being understood and agreed that following the entry of the Final Order and the final funding
of the Loans the Borrower shall have no consent right over assignments or participations other than to disqualified institutions.
		
	Amendments:	 	The vote of Lenders, as of any date of determination, holding greater than 50% of the outstanding Loans and commitments under the DIP Term Loan Facility (the “Required Lenders”) shall be required to amend, waive or
modify any terms or conditions of the DIP Term Loan Facility subject to certain amendments, waivers or modifications (including without limitation any modification of the definition of Acceptable Plan) which shall require the vote of all affected
Lenders or all Lenders. Notwithstanding the foregoing, for purposes of determining whether the Required Lenders have consented (or not consented) to any amendment, modification, waiver, consent or other action, any Loans held by an Interested Lender
(as defined below) shall be deemed to have been voted in the same proportion of the other Loans except with respect to any amendment, modification, waiver, consent or other action (i) requiring the consent of all affected Lenders or all Lenders,
(ii) with respect to any Interested Lender, that alters such Interested Lender’s pro rata share of any payments given to all Lenders, or (iii) that affects an Interested Lender (in its capacity as a Lender) in a manner that is disproportionate
to the effect on any other Lender. “Interested Lender” means (x) Honeywell International, Inc. and (y) KPS Capital Partners LP (“KPS”) and each other person that has expressed at any time since January 1,
2020 (whether prior to, on or after the date of the DIP Credit Agreement), or expresses in the future, in writing an interest in acquiring all of the Borrower’s equity interests or all or substantially all of the assets of the Borrower and its
subsidiaries, in each case of (x) and/or (y), together with their respective affiliates, subsidiaries, partners and insiders; provided, however, that any party deemed an
Interested

  
 20 

			
		 	Lender under subsection (y) shall no longer be deemed an Interested Lender from and after approval by the Bankruptcy Court of a sale order approving any sale of the Debtors if such party is not designated as either the
Successful Bidder or Alternate Bidder (each, as defined in the Bid Procedures Order).
		
	Yield Protection	 	The DIP Credit Agreement will contain yield protection provisions customarily found in the loan agreements for similar debtor in possession financings.
		
	Governing Law and Submission to Jurisdiction:	 	State of New York (other than as contemplated by the Credit Documentation with respect to non-U.S. collateral). Exclusive jurisdiction of the Bankruptcy Court, including with respect to the
exercise of the remedies by the Lenders and preservation of the value of the Collateral.
		
	Counsel to the Agent and Citibank in its capacity as a Lender:	 	Weil, Gotshal & Manges LLP.

  
 21 

 EXHIBIT D 

FORM OF JOINDER AGREEMENT FOR CONSENTING LENDERS 

This Joinder Agreement to the Restructuring Support Agreement, dated as of [●] (as amended, supplemented or otherwise modified from time
to time, the “Agreement”), by and among the Company and Consenting Lenders is executed and delivered by [●] (the “Joining Party”) as of [•]. Each capitalized term used herein, but not
otherwise defined, shall have the meaning set forth in the Agreement. 
 1. Agreement to be Bound. The Joining Party hereby agrees to be
bound by all of the terms of the Agreement, a copy of which is attached to this Joinder Agreement as Annex I (as the same has been or may be hereafter amended, restated or otherwise modified from time to time in accordance with the provisions
thereof). The Joining Party shall hereafter be deemed to be a “Consenting Lender” and a “Party” for all purposes under the Agreement and with respect to any and all Claims held by such Joining Party. 

2. Representations and Warranties. With respect to the aggregate principal amount of Loans set forth below its name on the signature page
hereto, the Joining Party hereby makes the representations and warranties of the Consenting Lenders set forth in Section 7 of the Agreement to each other Party to the Agreement. 

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

 IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed
as of the date first written above. 
  

			
	 CONSENTING
LENDER

			
		
	 By:
	 	
 

			
	 Name:

	 Title:

  

							
	Principal Amount of Revolving Exposure:	  	€	  	  
	  	
				
	Principal Amount of Tranche A Term Loans:	  	€	  	  
	  	
				
	Principal Amount of Tranche B Term Loans (EUR):	  	€	  	  
	  	
				
	Principal Amount of Tranche B Term Loans (USD):	  	$	  	  
	  	

 Notice Address: 

[●] 
 Attention: [●]

 Email: [●] 
  

			
	Acknowledged:
	
	[●]

 
			
		
	By:	 	  

 
			
	Name:
	Title:

 (Signature Page to Joinder) 

 EXHIBIT B 

COMPANY PARTIES 
  

	 	1.	 BRH LLC 

	 	2.	 Calvari Limited 

	 	3.	 Friction Materials LLC 

	 	4.	 Garrett ASASCO Inc. 

	 	5.	 Garrett Borrowing LLC 

	 	6.	 Garrett Holding Company Sàrl 

	 	7.	 Garrett LX I S.à r.l. 

	 	8.	 Garrett LX II S.à r.l. 

	 	9.	 Garrett LX III S.à r.l. 

	 	10.	 Garrett Motion Australia Pty Limited 

	 	11.	 Garrett Motion Automotive Research Mexico S. de R.L. de C.V. 

	 	12.	 Garrett Motion Holdings Inc. 

	 	13.	 Garrett Motion Holdings II Inc. 

	 	14.	 Garrett Motion Inc. 

	 	15.	 Garrett Motion International Services S.R.L. 

	 	16.	 Garrett Motion Ireland A Limited 

	 	17.	 Garrett Motion Ireland B Limited 

	 	18.	 Garrett Motion Ireland C Limited 

	 	19.	 Garrett Motion Ireland Limited 

	 	20.	 Garrett Motion Italia S.r.l. 

	 	21.	 Garrett Motion Japan Inc. 

	 	22.	 Garrett Motion LLC 

	 	23.	 Garrett Motion México, Sociedad Anónima de Capital Variable 

	 	24.	 Garrett Motion Romania S.R.L. 

	 	25.	 Garrett Motion Sàrl 

	 	26.	 Garrett Motion Slovakia s.r.o. 

	 	27.	 Garrett Motion Switzerland Holdings Sàrl 

	 	28.	 Garrett Motion UK A Limited 

	 	29.	 Garrett Motion UK B Limited 

	 	30.	 Garrett Motion UK C Limited 

	 	31.	 Garrett Motion UK D Limited 

	 	32.	 Garrett Motion UK Limited 

	 	33.	 Garrett Transportation I Inc. 

	 	34.	 Garrett Transportation Systems Ltd 

	 	35.	 Garrett Transportation Systems UK II Ltd 

	 	36.	 Garrett TS Ltd 

	 	37.	 Garrett Turbo Ltd

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