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Issue Description This approach recognizes that funding abatement efforts — which would benefit most creditors and the public by reducing future effects of the crisis through treatment and other programs — is a much more efficient use of limited funds than dividing thin slices among all creditors with no obligation to use it to abate the opioid crisis. Because maximizing abatement of the opioid crisis requires coordination of efforts by all levels of government, particularly when the abatement needs far exceed the available funds, this structure requires a collaborative process between each State and its Local Governments. This Term Sheens intended =to establish the mechanisms for distribution and allocat of n-of'funds to States, Local Governments and Tribes (the "Abatement Funds',') to be incorporated into the Chapter 11 Plan and any order approving the Chapter 11 Plan (Abatement Funds net of the�portion thereof, allocated to a Tribal Abatement Fund under Section, JS[hereofwae eferred to herem as "Public Funds"). The parties agree that X100% of the Public Funds distributed under the Chapter 11 Plan shall'be usedito abate, the\pioid crisis. Specifically, (i) no less than ninety five percent.(95%)of the. Public Funds distributed under the Chapter 11 Plan shall be used1or abatement of the opioid crisis by funding opioid or substance use disorder related projects or programs that fall within the list of uses<in Schedule B (the "Approved Opioid Abatement rises")�(ii) priorityshall' be given to the core abatement strategies Core Strategies") as identified on Schedule A; and (iii) no more than fivielpercent�\(5%) of the Public Funds may be used to fund expenses incurred\in adnuestering the distributions for the Approved Opibi.d�Abatement Uses, including the process of selecting programs to ( receive,distnbutions of Public Funds for implementing those programs and in conn ction—with the Government Participation Mechanism3 ("Allowed -Administrative Expenses," and together with the Approved Opioid,Abatement Uses, "Approved Uses").' Notwithstanding anything \in this term.sheet that might imply to the contrary, projects or programs that `c nstitute`Approved Opioid Abatement Uses may be provided by States, State agencies, Local Governments, Local Government agencies or nongovernmental parties and funded from Public Funds. 3. GENERAL (NOTES The governmental entities maintain that the most beneficial and efficient use of limited bankruptcy funds is to dedicate as large a portion as possible to abatement programs addressing the opioid crisis. If this v I think that should be clear and I think it is clear to them. But, rather, where they act — in the best principles of federalism, for their state, the coordinator for the victims in their state."); Hr'g Tr. at 75:19-76:1 (Jan. 24, 2020) ("Even if there ultimately is an allocation here — and there's not a deal now, obviously, at this point on a plan. But if there is an allocation that leaves a substantial amount of the Debtors' value to the states and territories, one of the primary benefits of a bankruptcy case is that the plan can lock in, perhaps only in general ways, but perhaps more in specific ways, how the states use that money ......). 3 Capitalized terms not defined where first used shall have the meanings later ascribed to them in this Term Sheet. ° Nothing in this term sheet is intended to, nor does it, limit or permit the ability of funds from the Purdue estate (other than Public Funds) to be used to pay for legal fees and expenses incurred in anticipation of or during Purdue's chapter 11 case, or once confirmed, in implementing the Chapter 11 Plan. 4812-52944831.v 1 2 91