Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 19, 2023

PARTS iD, Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware		001-38296		81-3674868
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

1 Corporate Drive

Suite C

Cranbury, New Jersey 08512

(Address of Principal Executive Offices, including Zip Code)

(609) 642-4700

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of exchange on which registered
Class A Common Stock		ID		NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry Into a Material Definitive Agreement.

The information set forth under the caption “Bridge Loan / DIP Credit Agreement” in Item 1.03 of this Current Report on Form 8-K is incorporated herein by reference.

Item 1.03. Bankruptcy or Receivership.

Bridge Loan / DIP Credit Agreement

On December 19, 2023, PARTS iD, Inc., a Delaware corporation (the “Company”) and its subsidiary PARTS iD, LLC, a Delaware limited liability company (“PARTS iD, LLC and together with the Company, the “Debtors”) entered into a Credit Agreement (the “Credit Agreement”) with Fifth Star, Inc., a Delaware corporation (“Fifth Star”, and its various capacities, the “New Bridge Lender”, the “New Money DIP Lender”, the “Administrative Agent” and the “Plan Sponsor”) to which certain Roll-Up DIP Lenders (as defined therein) have joined the Credit agreement by execution of a Roll-Up Dip Lender supplement . In connection with the Company’s intention to commence voluntary cases under Chapter 11 of the Bankruptcy Code (as defined below), the Credit Agreement provides for a secured credit facility, pursuant to which (i) the New Bridge Lender has provided a prepetition term loan facility in an aggregate amount of up to $3,000,000 (less $500,000 towards reimbursement of legal and financial advisory expenses of Fifth Star) prior to the Petition Date (as defined below) (the “New Bridge Loan”), (ii) the New Money DIP Lender will provide a “new money” term loan facility in the form of post-petition debtor-in-possession financing under Section 364 of the Bankruptcy Code in an aggregate principal amount of up to $6,000,000, subject to the terms of the Credit Agreement and the DIP Order (as defined in the Credit Agreement) and (iii) certain of the previous loans provided to the Company in which the Company issued various promissory notes (the “Existing Bridge Loans”) in the aggregate principal amount of $3,300,000, and the New Bridge Loan will be exchanged into post-petition term loans thereunder.

The Credit Agreement also provides that following the occurrence of (i) the failure to meet any Milestone (as defined in the Credit Agreement), (ii) the occurrence of any Event of Default (as defined in the Credit Agreement), (iii) the failure to satisfy the Direct Investment Commitment Conditions (as defined in the Plan (as defined below)) that have not been waived or (iv) the failure to obtain affirmative votes of the Vendor Claims (as defined in the Credit Agreement) in sufficient amount and number to satisfy the requirements of class acceptance under the Bankruptcy Code upon tabulation of votes received on or prior to the Voting Deadline (as defined in the Credit Agreement), with such tabulation to occur within two business days following the Voting Deadline, the Plan Sponsor may, in lieu of the Plan, elect to (a) pursue a sale, pursuant to Section 363 of the Bankruptcy Code or otherwise, of all or substantially all of the Company’s assets, on terms and conditions acceptable to the Plan Sponsor with the Plan Sponsor serving as the stalking horse bidder and (b) provide an additional $6,000,000 post-petition debtor-in-possession term loan facility to fund such sale process.

As collateral for the obligations under the Credit Agreement, the Debtors have granted to the Administrative Agent, on behalf of the Secured Parties (as defined in the Credit Agreement) a security interest in all of Debtors’ right, title, and interest in, to and under all of Debtors’ property (inclusive of intellectual property), subject to certain exceptions, as set forth in the Security and Pledge Agreement (as defined in the Credit Agreement) and the Trademark Security Agreement (as defined in the Security and Pledge Agreement). Such security interest shall be subordinate to any valid, perfected and enforceable Lien (as defined in the Credit Agreement) securing the Prepetition Senior Secured Obligations (as defined in the Credit Agreement), including being junior to the liens granted to Lind Global Fund II LP (“Lind”) under that certain Securities Purchase Agreement, dated as of July 17, 2023, by and between the Company and Lind (as amended, the “Lind Agreement”)

The Credit Agreement also contains other customary representations and warranties, affirmative and negative covenants and events of default that are standard for agreements of this type.

The foregoing descriptions of the Credit Agreement, the Security and Pledge Agreement, the Trademark Security Agreement and the transactions contemplated thereby are not complete and are subject to, and qualified in their entirety by reference to, the full text of the Credit Agreement, the Security and Pledge Agreement and the Trademark Security Agreement which are included as Exhibits 10.1, 10.2 and 10.3 to this Current Report on Form 8-K, respectively, and are incorporated herein by reference.

Voluntary Petition for Bankruptcy

As contemplated in the Credit Agreement, on December 20, 2023, the Company commenced solicitation of the Plan (as defined below). Thereafter, on December 26, 2023 (the “Petition Date”), the Debtors filed voluntary petitions (Case Numbers. 23-12098 and 23-12099) (the “Chapter 11 Cases”) for relief under Chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).

The Debtors have sought approval of a variety of “first day” motions containing customary relief intended to enable the Debtors to continue ordinary course operations during the Chapter 11 Cases. The Debtors continue to operate their businesses as a “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Additionally, the Debtors have requested the Bankruptcy Court schedule a hearing to confirm the Plan by no later than February 2, 2024, with a Plan voting deadline of January 8, 2024.

Additional information on the Chapter 11 Cases, including copies of all documents filed in the Chapter 11 Cases, can be found at: https://restructuring.ra.kroll.com/partsidballots. Interested parties who may have questions related to the Chapter 11 Cases may call the responsible claims agent at (844) 610-4783 (U.S./Canada, toll-free) or +1 (646) 777-2312 (international, toll) or email inquiries at partsidballots@ra.kroll.com.

It is unlikely that holders of the Company’s Class A common stock (the “Common Stock”) will receive any payment or other distribution on account of those shares following the Chapter 11 Cases. On the Plan Effective Date (as defined below), the Company’s existing securities shall be cancelled, released, and extinguished.

Prepacked Plan of Reorganization

On the Petition Date, the Debtors also filed with the Bankruptcy Court a pre-packaged Chapter 11 plan of reorganization (as amended, restated, supplemented or otherwise modified from time to time, the “Plan”). The Plan contemplates, among other things, the following:

●

the Debtors will obtain a new debtor-in-possession multi-draw term loan financing facility pursuant to the Credit Agreement, consisting of (A) new money term loans in an aggregate principal amount of up to $12,000,000, and (B) term loans not to exceed the outstanding principal and accrued but unpaid interest owed under the New Bridge Loan and Existing Bridge Loans;

●

on the effective date of the Plan (the “Plan Effective Date”), the Company (as reorganized, “Reorganized PARTS iD”) will issue and the Plan Sponsor will purchase $26,000,000 of new preferred equity interests (“New Preferred Stock”);

●

on the Plan Effective Date, Reorganized PARTS iD will issue common equity interests (the “New Common Stock”);

●

the initial board of directors of Reorganized PARTS iD will implement a customary management incentive plan;

●

on the Plan Effective Date, the following distributions will be made:

holders of New Money DIP Claims (as defined in the Plan) will receive their pro rata share of New Preferred Stock;

holders of Tranche 1 Roll-Up DIP Claims and Tranche 2 Roll-Up DIP Claims (each as defined in the Plan) will receive their pro rata share of New Common Stock;

holders of Tranche 3 Roll-Up DIP Claims (as defined in the Plan) will receive cash equal to the amount of such Tranche 3 Roll-Up DIP Claims;

holders of Senior Secured Note Claims (as defined in the Plan) will receive cash in the aggregate amount of $4,224,500 minus any payments made to such Holders on account of such claims during the Chapter 11 Cases;

holders of MCA Claims (as defined in the Plan) will receive either the Wave Distribution or the RCNY Distribution, as applicable (each as defined in the Plan);

holders of Subordinated Secured Note Claims (as defined in the Plan) will be entitled to receive two (2) of the following, provided, however, that no holder of a Subordinated Secured Note Claim will receive, in the aggregate, more than 100% of amount of such holder’s Subordinated Secured Note Claim: (i) payment in cash of 55% of such Subordinated Secured Note Claim; (ii) such holder’s pro rata share from the net recoveries (after payments of fees, litigation financing and taxes) from the Litigation Proceeds (as defined in the Plan); and (iii) payment in cash upon the achievement of an EBITDA target to be agreed between the Plan Sponsor and the Debtors;

holders of Vendor Claims (as defined in the Plan) will receive cash in an amount equal to 25% of such Vendor Claim, and beginning the month following the Plan Effective Date, payment in the aggregate amount equal to 30% of its Vendor Claim, paid in equal monthly installments over a period of 36 months; and

holders of Convenience Claims (as defined in the Plan) will receive cash in an amount equal to 65% of its Convenience Claim.

During the Chapter 11 Cases, the Debtors intend to operate their business in the ordinary course and will seek authorization from the Bankruptcy Court to make payment in full on a timely basis to trade creditors, vendors, suppliers, customers and employees of undisputed amounts due prior to and during the Chapter 11 Cases.

The foregoing description of the Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the Plan, which is attached as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K regarding the Credit Agreement is incorporated by reference herein.

Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation Under an Off- Balance Sheet Arrangement.

The commencement of the Chapter 11 Cases described in Item 1.03 above constitutes an event of default that accelerated the Company’s indebtedness owed pursuant to the promissory notes issued under the Lind Agreement and that certain (i) Note and Warrant Purchase Agreement, dated as of March 6, 2023, by and between the Company and the purchasers party thereto, (ii) Note and Warrant Purchase Agreement, dated as of May 19, 2023, by and between the Company and the purchasers party thereto, (iii) Note and Warrant Purchase Agreement, dated as of June 14, 2023, by and between the Company and the purchaser party thereto, (iv) Note and Warrant Purchase Agreement, dated as of July 13, 2023, by and between the Company and the purchasers party thereto, (v) Note Purchase Agreement, dated as of October 9, 2023, by and between the Company and the purchaser party thereto, (vi) Note Purchase Agreement, dated as of November 2, 2023, by and between the Company and the purchaser party thereto and (vii) Note and Warrant Purchase Agreement, dated as of December 11, 2023, by and between the Company and the purchasers party thereto, as each may be amended, restated, supplemented or otherwise modified from time to time (the Lind Agreement and the agreements set forth in (i)-(vii) above, together with all amendments thereto, collectively the “Debt Instruments”).

The Debt Instruments provide that as a result of the Chapter 11 Cases, the principal and interest due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Debt Instrument are automatically stayed as a result of the Chapter 11 Cases, and the creditor’s rights of enforcement in respect of the Debt Instrument are subject to the applicable provisions of the Bankruptcy Code.

Cautionary Statement Regarding Trading in the Company’s Securities

The Company’s securityholders are cautioned that trading in the Company’s Common Stock during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for the Company’s Common Stock may bear little or no relationship to the actual recovery, if any, by holders thereof in the Company’s Chapter 11 Cases. Accordingly, the Company urges extreme caution with respect to existing and future investments in its Common Stock.

Forward-Looking Statements

This Current Report on Form 8-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements contained in this Current Report on Form 8-K include, but are not limited to, statements regarding the process and potential outcomes of the Company’s Chapter 11 Cases and the Company’s ability to continue to operate as usual during the Chapter 11 Cases. These statements are based on management’s current expectations, and actual results and future events may differ materially due to risks and uncertainties, including, without limitation, risks inherent in the bankruptcy process, including the outcome of the Chapter 11 Cases; the Company’s financial projections and cost estimates; and the effect of the Chapter 11 Cases on the Company’s business prospects, financial results and business operations. The Company may not actually achieve the plans, intentions or expectations disclosed in its forward-looking statements, and you should not place undue reliance on its forward-looking statements. These and other factors that may affect the Company’s future business prospects, results and operations are identified and described in more detail in the Company’s filings with the Securities and Exchange Commission, including the Company’s most recent Annual Report filed on Form 10-K and the subsequently filed Quarterly Report(s) on Form 10-Q. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Form 8-K. Except as required by applicable law, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results, later events or circumstances or to reflect the occurrence of unanticipated events.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are filed as part of this report:

Exhibit No.		Description
10.1		Credit Agreement, dated as of December 19, 2023, by and among PARTS iD, Inc. and PARTS iD, LLC, as Borrowers, Fifth Star, Inc., as New Bridge Lender and New Money DIP Lender, the Roll-Up DIP Lenders from time to time party thereto and Fifth Star, Inc., as Administrative Agent.
10.2		Pledge and Security Agreement, dated as of December 19, 2023, PARTS iD, Inc., PARTS iD, LLC and Fifth Star, Inc., as Administrative Agent.
10.3		Trademark Security Agreement, dated as of December 19, 2023, PARTS iD, LLC and Fifth Star, Inc., as Administrative Agent.
99.1.		Joint Prepackaged Chapter 11 Plan of Reorganization of PARTS iD, Inc. and PARTS iD, LLC.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PARTS ID, INC.

Date: December 26, 2023	By:	/s/ Lev Peker
		Name:	Lev Peker
		Title:	Chief Executive Officer

Exhibit 10.1

EXECUTION VERSION

SUBJECT TO FRE 408 & ITS EQUIVALENTS

CREDIT AGREEMENT

Dated as of December 19, 2023

by and among

PARTS ID, INC. and
PARTS ID, LLC,

as Borrowers,

FIFTH STAR, INC.,

as New Bridge Lender,

FIFTH STAR, INC.,

as New Money DIP Lender,

THE ROLL-UP DIP LENDERS FROM TIME TO TIME PARTY HERETO,

and

FIFTH STAR, INC.,

as Administrative Agent

SUBJECT TO FRE 408 & ITS EQUIVALENTS

Table of Contents

		Page
Article I DEFINITIONS		2
SECTION 1.01.	Defined Terms	2
SECTION 1.02.	Classification	20
SECTION 1.03.	Interpretation	20
SECTION 1.04.	Accounting Terms; GAAP	20

Article II THE CREDITS		21
SECTION 2.01.	The Commitments	21
SECTION 2.02.	[Reserved]	22
SECTION 2.03.	Requests for Borrowings	22
SECTION 2.04.	[Reserved]	22
SECTION 2.05.	[Reserved]	22
SECTION 2.06.	Funding of Borrowings.	22
SECTION 2.07.	[Reserved].	23
SECTION 2.08.	Termination and Reduction of Commitments	23
SECTION 2.09.	Repayment of Loans; Evidence of Debt	23
SECTION 2.10.	Prepayment of Loans.	23
SECTION 2.11.	Fees	24
SECTION 2.12.	Interest	25
SECTION 2.13.	Taxes	25
SECTION 2.14.	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	28

Article III REPRESENTATIONS AND WARRANTIES		30
SECTION 3.01.	Organization; Powers	30
SECTION 3.02.	Authorization; Enforceability	30
SECTION 3.03.	Governmental Approvals; No Conflicts	30
SECTION 3.04.	Financial Condition; No Material Adverse Change	30
SECTION 3.05.	Properties	31
SECTION 3.06.	Litigation	31
SECTION 3.07.	Compliance with Laws and Agreements	31
SECTION 3.08.	Investment Company Status	31
SECTION 3.09.	Taxes	31
SECTION 3.10.	ERISA	32
SECTION 3.11.	Disclosure	32
SECTION 3.12.	Federal Reserve Regulations; Use of Credit	32
SECTION 3.13.	Capitalization	32
SECTION 3.14.	Existing Subsidiaries and Investments	33
SECTION 3.15.	Real Property	33
SECTION 3.16.	Environmental Matters	33
SECTION 3.17.	Sanctions/Anti-Corruption Representations	34
SECTION 3.18.	Insurance	34
SECTION 3.19.	Labor Matters, Etc	34
SECTION 3.20.	[Reserved]	34
SECTION 3.21.	Material Contracts	34
SECTION 3.22.	No Burdensome Restriction	34
SECTION 3.23.	Security and Priority	35
SECTION 3.24.	DIP Order	36
SECTION 3.25.	Bankruptcy Cases	37
SECTION 3.26.	Approved Budget	37

Article IV CONDITIONS PRECEDENT.		37
SECTION 4.01.	Effective Date	37
SECTION 4.02.	DIP Draw Date	40

SUBJECT TO FRE 408 & ITS EQUIVALENTS

Table of Contents
(cont’d)

		Page
SECTION 4.03.	Toggle Draw Date	41
SECTION 4.04.	Conditions to each Funding Account Withdrawal	42

Article V AFFIRMATIVE COVENANTS		43
SECTION 5.01.	Financial Statements and Other Information	43
SECTION 5.02.	Notices of Material Events	44
SECTION 5.03.	Existence; Conduct of Business	45
SECTION 5.04.	Payment of Obligations	45
SECTION 5.05.	Maintenance of Properties; Insurance	45
SECTION 5.06.	Books and Records; Inspection Rights	46
SECTION 5.07.	Compliance with Laws	46
SECTION 5.08.	Certain Obligations Respecting Subsidiaries	46
SECTION 5.09.	Further Assurances	47
SECTION 5.10.	Cash Management Systems	47
SECTION 5.11.	Approved Budget	48
SECTION 5.12.	Agreement to Deliver Security Documents	48
SECTION 5.13.	Milestones	49
SECTION 5.14.	Weekly Meetings	49
SECTION 5.15.	Deposit Accounts	49
SECTION 5.16.	Post-Closing Deliverables	50
SECTION 5.17.	Sale Milestones	50

Article VI NEGATIVE COVENANTS		50
SECTION 6.01.	Indebtedness	50
SECTION 6.02.	Liens	51
SECTION 6.03.	Fundamental Changes; Lines of Business; Subsidiaries	51
SECTION 6.04.	Dispositions	51
SECTION 6.05.	Investments	52
SECTION 6.06.	Restricted Payments	53
SECTION 6.07.	Transactions with Affiliates	53
SECTION 6.08.	Restrictive Agreements	53
SECTION 6.09.	Modifications of Certain Documents	53
SECTION 6.10.	Accounting Changes	53
SECTION 6.11.	Hedging Agreements	53
SECTION 6.12.	Sale Lease Back	53
SECTION 6.13.	Use of Proceeds	54
SECTION 6.14.	Prepayments of Indebtedness	54

Article VII [RESERVED].		54

Article VIII EVENTS OF DEFAULT; REMEDIES.		54
SECTION 8.01.	Event of Default	54
SECTION 8.02.	Application of Payment	60
SECTION 8.03.	Performance by Administrative Agent	61

Article IX ADMINISTRATIVE AGENT		61
SECTION 9.01.	Authorization and Action	61
SECTION 9.02.	Administrative Agent and its Affiliates	62
SECTION 9.03.	Duties	63
SECTION 9.04.	Reliance, Lender Representations, Etc	63
SECTION 9.05.	Sub-Agents	64
SECTION 9.06.	Resignation	65
SECTION 9.07.	Lender Credit Decision	65

SUBJECT TO FRE 408 & ITS EQUIVALENTS

Table of Contents
(cont’d)

		Page
SECTION 9.08.	[Reserved]	66
SECTION 9.09.	Agent May File Proofs of Claim; Bankruptcy Events.	66
SECTION 9.10.	Collateral	66
SECTION 9.11.	Bailee for Perfection	67

Article X MISCELLANEOUS		68
SECTION 10.01.	Notices	68
SECTION 10.02.	Waivers; Amendments	69
SECTION 10.03.	Expenses; Indemnity; Damage Waiver	70
SECTION 10.04.	Successors and Assigns	71
SECTION 10.05.	Survival	73
SECTION 10.06.	Counterparts; Integration; Effectiveness	73
SECTION 10.07.	Severability	73
SECTION 10.08.	Right of Setoff	74
SECTION 10.09.	Governing Law; Jurisdiction; Etc	74
SECTION 10.10.	WAIVER OF JURY TRIAL	75
SECTION 10.11.	Treatment of Certain Information; Confidentiality; Independence of Covenants	75
SECTION 10.12.	Interest Rate Limitation	76
SECTION 10.13.	USA Patriot Act	76
SECTION 10.14.	Press Release and Related Matters	76
SECTION 10.15.	No Duty	76
SECTION 10.16.	No Fiduciary Relationship	77
SECTION 10.17.	Construction	77
SECTION 10.18.	Payments Set Aside	77
SECTION 10.19.	Benefits of Agreement	77
SECTION 10.20.	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	77
SECTION 10.21.	[Reserved].	78
SECTION 10.22.	[Reserved]	78
SECTION 10.23.	Joint and Several Obligations	78
SECTION 10.24.	Acknowledgement Regarding Any Supported QFCs	80
SECTION 10.25.	DIP Order	81
SECTION 10.26.	INTERCREDITOR AGREEMENTS.	81

iii

SUBJECT TO FRE 408 & ITS EQUIVALENTS

Table of Contents
(cont’d)

LIST OF SCHEDULES AND EXHIBITS

Schedule 2.01(c)	Existing Bridge Loans
Schedule 3.06	Disclosed Matters
Schedule 3.13	Capitalization and Equity Rights
Schedule 3.14	Subsidiaries and Investments
Schedule 3.21	Material Contracts
Schedule 5.15	Deposit Accounts
Schedule 6.01	Existing Indebtedness
Schedule 6.02	Existing Liens
Schedule 6.08	Existing Restrictive Agreements

Exhibit 1.01-1	Form of Funding Account Withdrawal Notice
Exhibit 2.01(c)	Form of Roll-Up DIP Lender Supplement
Exhibit 2.03	Form of Borrowing Request
Exhibits 2.13-1 to 2.13-4	US. Tax Compliance Certificates
Exhibit 3.26	Approved Budget
Exhibit 5.01	Form of Compliance Certificate
Exhibit 10.04(b)(iv)	Form of Assignment and Assumption

SUBJECT TO FRE 408 & ITS EQUIVALENTS

This CREDIT AGREEMENT (including all schedules and exhibits hereto, this “Agreement”) dated as of December 19, 2023, is by and among PARTS ID, INC., a Delaware corporation (the “Company”), PARTS ID, LLC, a Delaware limited liability company (together with the Company, each, individually, a “Borrower”, and collectively, “Borrowers”), Fifth Star, Inc. (“Fifth Star”), as New Bridge Lender, Fifth Star, as New Money DIP Lender, the Roll-Up DIP Lenders from time to time party hereto and Fifth Star, as Administrative Agent.

WITNESSETH

WHEREAS, the Borrowers intend to commence voluntary cases under chapter 11 of the Bankruptcy Code (the “Bankruptcy Cases” ) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) pursuant to which the Borrowers will file a prepackaged joint Chapter 11 plan of reorganization (including all exhibits, schedules, and supplements thereto, as may be modified from time to time, the “Prepackaged Plan”), which shall be satisfactory to Fifth Star, in its capacity as plan sponsor (the “Plan Sponsor”) in its sole discretion or, following the occurrence of a Toggle Event Trigger and upon a Toggle Event, will pursue a 363 Sale with the Plan Sponsor serving as the stalking horse bidder.

WHEREAS, to provide the Borrowers with the necessary liquidity to fund the administration of the Bankruptcy Cases, to fund the solicitation process with respect to the Prepackaged Plan and sustain their operations for the duration of the solicitation process and the Bankruptcy Cases, subject to the terms of this Agreement, the Borrowers have requested that the Lenders make available a secured credit facility, pursuant to which (i) the New Bridge Lender will provide a prepetition term loan facility in an aggregate amount of up to $3,000,000 prior to the Petition Date (the “New Bridge Loans”), (ii) the New Money DIP Lender will provide a “new money” term loan facility in the form of post-petition debtor-in-possession financing under Section 364 of the Bankruptcy Code in an aggregate principal amount of up to $6,000,000, subject to the terms set forth in this Agreement and the DIP Order and (iii) certain of the Bridge Loans of each Roll-Up DIP Lender (including the New Bridge Loan) will be deemed exchanged into post-petition term loans hereunder;

WHEREAS, prior to the Effective Date, certain of the Roll-Up DIP Lenders provided financing to Borrowers pursuant to financing agreements set forth on Schedule 2.01(c) attached hereto (collectively, the “Existing Bridge Loans” and together with the New Bridge Loan, the “Bridge Loans”) in order to sustain the Borrowers’ operations while the Borrowers pursued additional necessary financing, considered restructuring options and negotiated the terms of a reorganization plan;

WHEREAS, the New Bridge Lender and New Money DIP Lender are willing to make such financing available to the Borrowers only if (x) prior to the Petition Date, all of the Obligations under the Loan Documents, and all other obligations of the Borrowers owing to the Administrative Agent and the New Bridge Lender are secured by Liens on Collateral in which the Borrowers have an interest (including pledges of certain Equity Interests), in each case pursuant to, and with the priorities set forth herein and the other Loan Documents and (y) subject to the entry of the DIP Order, upon the occurrence of the Petition Date, all of the Obligations under the Loan Documents owing to the Administrative Agent and the Lenders will (i) constitute allowed superpriority administrative expense claims pursuant to Section 364(c)(1) of the Bankruptcy Code in the Bankruptcy Cases with priority over any and all other administrative expense claims of the kind specified or ordered pursuant to any provision of the Bankruptcy Code, subject only to the Carve-Out and Prepetition Senior Secured Obligations (and any adequate protection claims granted on account thereof) and (ii) be secured by Liens on the Collateral, including DIP Collateral (as defined below), pursuant to Sections 364(c) and (d) of the Bankruptcy Code, with the priorities set forth herein, in the other Loan Documents and in the DIP Order;

WHEREAS, the Borrowers believe that the loans and other financial accommodations provided to Borrowers under this Agreement will preserve the value of the Borrowers’ business and assets during the solicitation process with respect to the Prepackaged Plan and the Bankruptcy Cases;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

WHEREAS, each Borrower acknowledges that it and the other Borrower will receive substantial direct and indirect benefits from the making of loans and other financial accommodations to the Borrowers as provided in this Agreement and the other Loan Documents; and

WHEREAS, the Lenders’ willingness to extend financial accommodations to Borrowers as more fully set forth in this Agreement and the other Loan Documents is done solely as an accommodation to Borrowers and at Borrowers’ request and in furtherance of Borrowers’ mutual and collective enterprise.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the parties hereto hereby agree as follows:

Article I DEFINITIONS

SECTION 1.01. Defined Terms. As used in this Agreement (including the foregoing preamble and recitals), the following terms have the meanings specified below:

“363 Sale” means a sale, pursuant to Section 363 of the Bankruptcy Code or otherwise, of all or substantially all of the Company’s assets or equity, on terms and conditions acceptable to Fifth Star.

“Acceptable Plan” means any chapter 11 plan for each of the Bankruptcy Cases, the provisions of which are in form and substance satisfactory to Fifth Star in its sole discretion and which contain market standard exculpations, indemnities and releases in favor of the Administrative Agent, the Lenders, the Prepetition Senior Secured Parties, and their respective Related Parties in such capacities (as reasonably determined by Fifth Star in its sole discretion).

“Administrative Agent” means Fifth Star, in its capacity as administrative agent for the Lenders under the Loan Documents, and any successor Administrative Agent appointed pursuant to Article IX.

“Administrative Questionnaire” means an administrative questionnaire delivered by each Lender upon request of the Administrative Agent in a form supplied by Administrative Agent.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

“Agent’s Group” has the meaning assigned to such term in Section 9.02(b).

“Anti-Corruption Laws” means the laws, rules, and regulations of the jurisdictions applicable to any Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption, including the U.S. Foreign Corrupt Practices Act of 1977, as amended.

“Anti-Terrorism Laws” means any applicable laws, regulations, or orders of any Governmental Authority of any applicable jurisdiction, including the United States, the United Nations, United Kingdom, European Union, Canada, or the Netherlands relating to terrorism financing, or money laundering, including, but not limited to, the International Emergency Economic Powers Act (50 U.S.C. § 1701 et seq.), the Trading With the Enemy Act (50 U.S.C. § 5 et seq.), the International Security Development and Cooperation Act (22 U.S.C. § 2349aa-9 et seq.), the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 (the “USA Patriot Act”), and any rules or regulations promulgated pursuant to or under the authority of any of the foregoing.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Approved Budget” means a customary 8-week (or, on and after the occurrence of a Toggle Event, 13-week) rolling budget and cash flow forecast for the Borrowers showing in reasonable line-item detail receipts and disbursements (including all professional fees) broken down by week (including anticipated uses of the New Bridge Loan and New Money DIP Loans for such period and projected capital expenditures for such period), prepared by the Borrowers in the form attached hereto as Exhibit 3.26 and approved by Fifth Star as the same shall be updated, modified or supplemented from time to time as provided in Section 5.11.

“Approved Budget Variance Report” means a weekly report (i) provided by Borrowers to the Administrative Agent (a) setting forth in reasonable detail actual operating receipts, operating disbursements and non-operating disbursements for the applicable Budget Period and all budget variances, in each case, on both an individual line item basis and an aggregate basis, as compared to the projected amounts set forth in the then applicable Approved Budget (which budget variances shall be tested such that in week 1 of each then applicable Budget Period, only week 1 variances are tested; in week 2 of each then applicable Budget Period, weeks 1 and 2 variances are tested on a cumulative basis; in week 3 of each then applicable Budget Period, weeks 1 through 3 variances are tested on a cumulative basis; and in week 4 of each then applicable Budget Period, weeks 1 through 4 variances are tested on a cumulative basis) and including indications as to whether each variance therein is temporary or permanent and an explanation, in reasonable detail, of any material variance, and (b) an analysis demonstrating that the Company is in compliance with the budget covenants set forth in Section 5.11, and (ii) certified by a Responsible Officer of Borrowers. The Approved Budget Variance Report shall be in a form, and shall contain supporting information, satisfactory to Fifth Star.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of each party whose consent is required by Section 10.04), and accepted by Administrative Agent, substantially in the form attached hereto as Exhibit 10.04(b)(iv).

“Avoidance Actions” means, on or after the Petition Date, all of the Borrowers’ rights, claims and causes of action under sections 502(d), 506(d), 542, 543, 544, 545, 547, 548, 549, 550, 553 and 724(a) of the Bankruptcy Code, and any other avoidance or similar action under the Bankruptcy Code or similar state law.

“Avoidance Action Proceeds” means any and all proceeds of any Avoidance Action.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“Bankruptcy Cases” has the meaning specified in the recitals to this Agreement.

“Bankruptcy Code” means Title 11 of the United States Code, 11 U.S.C. §§ 101-1532, as amended, modified, succeeded, or replaced from time to time.

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

“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Board” means the Board of Governors of the Federal Reserve System of the United States.

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

“Borrowing” means Loans of the same Class made on the same date.

“Borrowing Request” means a request by any Borrower for a Borrowing in accordance with Section 2.03.

“Bridge Loans” means, collectively, the New Bridge Loans and the Existing Bridge Loans.

“Budget Period” means the four-week period beginning December 18, 2023 and each successive four-week period that corresponds to the applicable Approved Budget (for example, full calendar weeks 1 through 4 ending January 14, 2024 shall be the first Budget Period and weeks 5 through 8 ending February 11, 2024 shall be the second Budget Period).

“Business Day” means any day that is not a Saturday, Sunday, or other day on which commercial banks in New York City are authorized or required by law to remain closed.

“Capital Lease Obligations” of any Person means the obligations of such Person which are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof determined in accordance with GAAP.

“Carve-Out” means the specified fees and expenses which, following an event of default and termination notice delivered to the Borrowers by the Administrative Agent, may be paid from cash (including Cash Collateral and proceeds of the New Money DIP Loans) prior to the satisfaction of the Prepetition Senior Secured Obligations or the Obligations hereunder; provided, however, that the specific amount and terms of the Carve-Out will be set forth in, and in all respects subject to, the DIP Order and agreed to by Fifth Star in its reasonable discretion.

“Cash Collateral” has the meaning assigned to such term in section 363(a) of the Bankruptcy Code.

“Cash Equivalents” means:

(a) securities issued or directly and fully and unconditionally guaranteed or insured by the U.S. government or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government with maturities of 12 months or less from the date of acquisition;

(b) marketable direct obligations issued or fully guaranteed by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s Rating Group (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”);

(c) commercial paper maturing within 24 months from the date of acquisition thereof and having, at such date of acquisition, a rating of not less than A-1 from S&P or a rating of not less than P-1 from Moody’s (or, if at any time neither of such services shall be rating such obligations, then from another nationally recognized rating service);

(d) certificates of deposit, banker’s acceptances and time deposits maturing within 12 months from the date of acquisition thereof issued or guaranteed by or placed with, and money market Deposit Accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States or any state thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(e) Deposit Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) of this definition, or (ii) any other bank organized under the laws of the United States or any state thereof so long as the full amount maintained with any such other bank is insured by the Federal Deposit Insurance Corporation;

(f) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated AAA or better by S&P or Aaa3 or better by Moody’s (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another rating agency); and

(g) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (f) above.

“Cash Management Order” means any order of the Bankruptcy Court entered in the Bankruptcy Cases, together with all extensions, modifications and amendments thereto, consistent with the DIP Order and in form and substance satisfactory to Fifth Star, which (among other matters) authorizes Borrowers to maintain their existing treasury, depository, purchase card, and other cash management arrangements or such other arrangements as shall be acceptable to Fifth Star in all material respects.

“Change in Control” means: (i) the ultimate “beneficial owners” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of the securities of the Company on the Effective Date shall cease to have the power, directly or indirectly, to vote or direct the voting of securities having at least 75% of the ordinary voting power for the election of directors of the Company; (ii) the board of directors of the Company on the Effective Date shall cease to consist of a majority of the board of directors of the Company; (iii) the occurrence of any “change of control” or similar event under the documents evidencing any Material Indebtedness; or (iv) any failure of the Company to own directly 100% of the Equity Interests of Parts iD, LLC.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule or regulation or treaty or in the administration, interpretation, implementation, or application thereof by any Governmental Authority, or (c) the making or issuance of any request, rule, guideline, or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Claim” means any claim, as such term is defined in section 101(5) of the Bankruptcy Code, against the Borrowers or the estates created for the Borrowers in the Bankruptcy Cases pursuant to section 541 of the Bankruptcy Code.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are New Bridge Loans, New Money DIP Loans, Tranche 1 Roll-Up DIP Loans, Tranche 2 Roll-Up DIP Loans or Tranche 3 Roll-Up DIP Loans.

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

“Collateral” means the “Collateral” as defined in each Security Document; provided that following the Petition Date, “Collateral” shall also mean DIP Collateral.

“Communication” has the meaning assigned to such term in Section 10.01(a).

“Company” means Parts iD, Inc., a Delaware corporation.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Compliance Certificate” has the meaning assigned to such term in Section 5.01(d).

“Confirmation Order” means the order of the Bankruptcy Court confirming the Prepackaged Plan pursuant to section 1129 of the Bankruptcy Code.

“Control Agreements” means, collectively, those control agreements in form and substance reasonably acceptable to the Administrative Agent entered into among (a) the depository institution maintaining any Deposit Account (to the extent required under the Loan Documents), the securities intermediary maintaining any securities account, or the commodity intermediary maintaining any commodity account, (b) a Borrower and (c) the Administrative Agent, pursuant to which the Administrative Agent obtains control (within the meaning of the applicable provision of the UCC) over such Deposit Account, securities account or commodity account.

“Controlled Account” means each Deposit Account, securities account, or commodities account that is subject to a Control Agreement.

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Default Rate” means, in the case of any Loans or other Obligations, a per annum interest rate equal to 3.00% as provided in Section 2.12(a).

“Deposit Account” means a demand, time, savings, passbook, or similar account maintained with an organization engaged in the business of banking, including savings banks, savings and loan associations, credit unions, and trust companies. Neither investment property nor accounts evidenced by an instrument shall constitute a Deposit Account for purposes of this Agreement.

“DIP Collateral” means all current or hereafter acquired assets, interests, rights, and property of any nature whatsoever, whether real or personal, of the Borrowers and/or their estates following the commencement of the Bankruptcy Cases, including, without limitation, all assets, interests, rights, and property pledged under the Security Documents, and all cash, any investment of such cash, inventory, accounts receivable, including intercompany accounts (and all rights associated therewith), other rights to payment whether arising before or after the Petition Date, contracts, contract rights, chattel paper, goods, investment property, inventory, deposit accounts, “core concentration accounts,” “cash collateral accounts,” and any bank accounts and in each case all amounts on deposit therein (or credited thereto), equity interests, securities accounts, securities entitlements, securities, commercial tort claims, books, records, plants, equipment, farm products, general intangibles, documents, instruments, interests in leases and leaseholds, interests in real property, fixtures, payment intangibles, tax or other refunds, insurance proceeds, letters of credit, letter of credit rights, supporting obligations, machinery and equipment, patents, copyrights, trademarks, tradenames, other intellectual property, all licenses therefor, interests of any Borrower in any foreign subsidiary, and all proceeds, rents, issues, profits, offspring, products and substitutions, if any, of any of the foregoing and, subject to the entry of the Final DIP Order, Avoidance Action Proceeds, whether received by judgment, settlement or otherwise, but not including any “Excluded Property” as defined in the Security Documents, provided that DIP Collateral shall include any and all proceeds of any Excluded Property (unless such proceeds would otherwise constitute Excluded Property).

“DIP Draw Conditions” has the meaning assigned to such term in Section 4.02.

“DIP Draw Date” has the meaning assigned to such term in Section 4.02.

“DIP Order” means, as the context may require, the Interim DIP Order or the Final DIP Order, whichever is then applicable.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“DIP Super-Priority Claim” has the meaning set forth in Section 3.23(b)(i).

“Disclosed Matters” means the actions, suits, and proceedings disclosed on Schedule 3.06.

“Disposition” means any sale, assignment, lease, license, transfer or other disposition of any property or assets (whether now owned or hereafter acquired) by Borrowers or any of their Subsidiaries to any other Person. The terms “Dispose” and “Disposed” as a verb has a corresponding meaning.

“Disqualified Equity Interests” means any Equity Interest that, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event are subject to the prior Full Satisfaction of the Obligations), (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provides for the scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 180 days after the Maturity Date.

“Dollars” or “$” refers to lawful money of the United States.

“Draw Conditions” means, as the context may require, the conditions to drawing the New Bridge Loan, the DIP Draw Conditions and the Toggle Draw Conditions.

“Draw Date” means, as the context may require, the Effective Date, each DIP Draw Date and each Toggle Draw Date.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clause (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Effective Date” means the date on which the conditions set forth in Section 4.01 are satisfied (or waived in accordance with Section 4.01).

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Sections 10.04(b)(iii), 10.04(b)(vi) and 10.04(b)(vii) (subject to such consents, if any, as may be required under Section 10.04(b)(iii)).

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, or binding agreements issued, promulgated or entered into by any Governmental Authority, relating to the protection of the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters with respect to Hazardous Materials.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities) in favor of any Governmental Authority, of any Borrower or any Subsidiary resulting from or based upon (a) any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment, or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Equity Interests” means shares of the capital stock (including common and preferred shares), partnership interests, membership interest in a limited liability company, beneficial interests in a trust, or other equity interests.

“Equity Rights” means, with respect to any Person, any subscriptions, options, warrants, commitments, preemptive rights or agreements of any kind (including any shareholders’ or voting trust agreements) for the issuance, sale, registration or voting of, or securities convertible into, any additional Equity Interests in such Person.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder and any successor thereto.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that together with any Borrower or Guarantor is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Sections 412 and 430 of the Code, is treated as a single employer under Section 414(m) of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Specified Plan (other than an event for which the 30-day notice period is waived), (b) the failure of any Borrower or any ERISA Affiliate to meet all applicable requirements of Section 412 of the Code, Section 430 of the Code or Section 303 of ERISA with respect to any Specified Plan, (c) the existence with respect to any Multiemployer Plan of an “accumulated funding deficiency” (as defined in Section 431 of the Code or Section 304 of ERISA), whether or not waived, (d) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (e) the incurrence by any Borrower or any ERISA Affiliate of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, (f) the receipt by any Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Specified Plan or Multiemployer Plan or to appoint a trustee to administer any Specified Plan, (g) the incurrence of Withdrawal Liability by any Borrower, any of their Subsidiaries, or any ERISA Affiliate , (h) the receipt by any Borrower, any of their Subsidiaries, or any ERISA Affiliate of any notice concerning the imposition of Withdrawal Liability, or a determination that a Multiemployer Plan is, or is expected to be, “insolvent” (within the meaning of Section 4245 of ERISA), or in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 305 of ERISA), (i) the determination that any Specified Plan is in “at-risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA, (j) the incurrence by any Borrower or any ERISA Affiliate of any liability pursuant to Section 4063 or 4064 of ERISA or a substantial cessation of operations with respect to a Specified Plan within the meaning of Section 4062(e) of ERISA, (k) the filing of a notice of intent to terminate a Specified Plan under, or the treatment of a Specified Plan amendment as a termination under, Section 4041 of ERISA, (l) the imposition of a lien upon any Borrower or any ERISA Affiliate pursuant to Section 430(k) of the Code or Section 303(k) of ERISA, or (m) the engagement by any Borrower or any ERISA Affiliate in a transaction that would reasonably be expected to be subject to Section 4069 or Section 4212(c) of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

“Event of Default” has the meaning assigned to such term in Section 8.01.

“Event of Loss” means with respect to any asset of any Borrower or its Subsidiaries, any of the following: (a) any loss, destruction or damage of such asset or (b) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such asset, or confiscation of such asset or requisition of the use of such asset.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or New Term Loan Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or New Term Loan Commitment (other than pursuant to an assignment request by Borrowers under Section 2.18) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.13, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.13(g), and (d) any U.S. federal withholding Taxes imposed under FATCA.

“Existing Bridge Lenders” means each lender under an Existing Bridge Loan.

“Existing Bridge Loan Documents” means the definitive documentation evidencing the Existing Bridge Loans.

“Existing Bridge Loans” has the meaning specified in the recitals to this Agreement.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Effective Rate” means, for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by Administrative Agent from three federal funds brokers of recognized standing selected by it; provided that in no event shall the Federal Funds Effective Rate be less than zero.

“Fee Letter” means each letter, dated as the Effective Date, executed by the Borrowers and setting forth, among other things, fees relating to this Agreement.

“Fifth Star” means Fifth Star, Inc., a Delaware corporation.

“Final DIP Order” means the order of the Bankruptcy Court entered in the Bankruptcy Cases after a final hearing under Bankruptcy Rule 4001(c)(2) or such other procedures as approved by the Bankruptcy Court, which order shall be in form and substance satisfactory to Fifth Star, together with all extensions, modifications and amendments thereto.

“Final DIP Order Date” means the date on which the Final DIP Order is entered by the Bankruptcy Court.

“Fiscal Quarter” means each calendar quarter.

“Fiscal Year” means each calendar year.

“Foreign Lender” means any Lender or Participant that is not a U.S. Person.

“Fully Satisfied” or “Full Satisfaction” means, as of any date, that on or before such date: (i) the principal of and interest accrued to such date on the Loans shall have been paid in full in cash, (ii) all fees, expenses and other amounts then due and payable (other than contingent amounts for which a claim has not been made) shall have been paid in full in cash, and (iii) the New Term Loan Commitments shall have expired or irrevocably been terminated.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Funding Account” means a Deposit Account in the name of the Administrative Agent, on behalf of the Secured Parties, in which the proceeds of the Loans shall be deposited and held on each Draw Date and used solely for the purposes permitted hereunder.

“Funding Account Withdrawal Notice” means a Funding Account Withdrawal Notice substantially in the form of Exhibit 1.01-1 hereto.

“GAAP” means generally accepted accounting principles and practices set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the US accounting profession).

“Governmental Authority” means the government of the United States or any other nation, or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory, or administrative powers or functions of or pertaining to government including any supra-national bodies (such as the European Union or the European Central Bank).

“Guarantee” of or by any Person (the guarantor) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation of any other Person (the primary obligor) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof or pledge any assets to secure the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other monetary obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation, (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or monetary obligation, or (e) entered into for the purpose of assuring in any other manner the holder of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such holder against loss in respect thereof (in whole or in part). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as reasonably determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning. Notwithstanding the foregoing, the term Guarantee shall not include endorsements for collection or deposit in the Ordinary Course of Business.

“Guarantor” means each Subsidiary Guarantor, and each other Person executing a Guaranty Agreement.

“Guaranty Agreement” means a guaranty agreement delivered to Administrative Agent from time to time by any Person providing a Guarantee of any of the Obligations, in form and substance reasonably acceptable to Administrative Agent.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes, or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious, or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement, currency options, spot contracts, collar transactions, commodity price protection agreement, rate swap transactions, basis swaps, forward rate transactions, or other interest rate, currency exchange rate, or commodity price hedging arrangement, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), designed to provide protection against fluctuations in interest rates, currency exchange rates, or commodity prices, whether or not any such transaction is governed by or subject to any master agreement.

“Indebtedness” of any Person (the “Subject Person”) means, without duplication, (a) all indebtedness for borrowed money (including all obligations evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily paid), (b) the deferred purchase price of assets or services which in accordance with GAAP would be shown to be a liability (on the liability side of a balance sheet), but specifically excluding accrued expenses and trade payables arising or incurred in the Ordinary Course of Business and, in connection with such trade payables, payable on trade terms customary in the industry, (c) the maximum stated amount of all letters of credit issued or acceptance facilities established for the account of such Subject Person and, without duplication, all drafts drawn thereunder, (d) all Capital Lease Obligations, (e) all Synthetic Lease Obligations and all obligations under any securitization facility or other similar off-balance sheet financing product to which such Subject Person is a party, where such transaction is considered borrowed money indebtedness for tax purposes, (f) any Disqualified Equity Interests of such Subject Person, valued, as of the date of determination, at the greater of (i) the maximum aggregate amount that would be payable upon maturity, redemption, repayment or repurchase thereof (or of Disqualified Equity Interests or Indebtedness into which such Disqualified Equity Interests are convertible or exchangeable) and (ii) the maximum liquidation preference of such Disqualified Equity Interests, (g) any obligations of such Subject Person under conditional sales contracts and similar title retention instruments with respect to property acquired, (h) all obligations under any Hedging Agreement (measured at the Termination Value thereof), (i) indebtedness owing by a partnership in which such Subject Person is a general partner to the extent of recourse to such Subject Person for the payment of such indebtedness, (j) all indebtedness referred to in clauses (a) through (i) of this definition of another Person secured by any Lien on any property of such Subject Person, whether or not such indebtedness has been assumed, in an amount not to exceed the fair market value of the property of such Subject Person securing such indebtedness, and (k) all Guarantees by such Subject Person of indebtedness referred to in clauses (a) through (i) of this definition of others.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Borrower under any Loan Document and (b) to the extent not otherwise described in clause (a) of this definition, Other Taxes.

“Indemnitee” has the meaning assigned to such term in Section 10.03(b).

“Intercreditor Agreements” means, collectively, any intercreditor agreements or consents, subordination agreements or acknowledgements entered into by Fifth Star and one more other creditors of the Borrowers in respect of this Agreement or the Obligations hereunder, including (i) the Consent and Support Agreement executed by Lind Global Fund II LP, (ii) the Consent and Support Agreement executed by the lenders under the MCA Financing, (ii) the Consent and Support Agreement executed by Pravati Investment Fund IV LP, and (iii) the Subordination, Consent, and Support Agreement executed by each of the noteholders under the Borrowers’ prepetition note purchase agreements.

“Interim DIP Order” means the order of the Bankruptcy Court entered in the Bankruptcy Cases after an interim hearing in form and substance satisfactory to Fifth Star, in its sole discretion, together with all extensions, modifications and amendments thereto, in each case in form and substance satisfactory to Fifth Star, in its sole discretion, that, among other matters, (i) authorizes the Borrowers to execute and perform under the terms of this Agreement and the other Loan Documents, (ii) authorizes New Term Loans to be incurred during the period after the Interim DIP Order Date and prior to the Final DIP Order Date in the amounts and on the terms set forth herein, (iii) approves the conversion of outstanding New Bridge Loan to the Tranche 1 Roll-Up DIP Loans, (iv) approves the conversion of the Existing Bridge Loans to Tranche 2 Roll-Up DIP Loans and Tranche 3 Roll-Up DIP Loans as set forth herein, and (v) grants the DIP Super-Priority Claims and the Liens on the assets of the Borrowers referred to herein and in the other Loan Documents.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Interim DIP Order Date” means the date on which the Interim DIP Order is entered by the Bankruptcy Court.

“Investment” means, for any Person: (a) the acquisition (whether for cash, property, services, or securities or otherwise) of bonds, notes, debentures, or Equity Interests or other securities or substantially all the assets of, or any line of business or division of, any other Person, or the acquisition of assets of another Person that constitute a business unit (including any “short sale” or any sale of any securities at a time when such securities are not owned by the Person entering into such sale), whether direct or indirect or in one transaction or series of transactions; (b) the making of any advance, loan or other extension of credit or capital contribution to, any other Person (including the purchase of property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such property to such Person); (c) the entering into of any Guarantee or assumption of debt of, or other contingent obligation with respect to, Indebtedness or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such Person; (d) the entering into of any Hedging Agreement; or (e) the entering into any joint venture. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested (which, in the case of any Investment constituting the contribution of an asset or property, shall be based on the fair market value of such asset or property at the original time such Investment is made) plus the cost of all additions thereto, without adjustment for subsequent increases or decreases in the value of such Investment (other than adjustments for the repayment of, or the refund of capital with respect to, or the payment of interest or dividends on, the original principal amount of any such Investment).

“Lenders” means the Persons party hereto as a “New Bridge Lender”, a “New Money DIP Lender” or a “Roll-Up DIP Lender” and any other Person that shall have become a party hereto in such capacity pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party in such capacity hereto pursuant to an Assignment and Assumption.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, option, levy, execution, attachment, garnishment, hypothecation, assignment for security, deposit arrangement, encumbrance, charge, security interest or other preferential arrangement in the nature of a security interest of any kind or nature whatsoever, on or of such asset, and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.

“Lind Financing” means that certain Securities Purchase Agreement dated as of July 14, 2023, by and between the Company and Lind Global Fund II LP, a Delaware limited partnership and the Senior Secured Convertible Promissory Note dated as of July 14, 2023 in an initial principal amount of $5,367,500 executed in connection therewith.

“Loan Documents” means, collectively, this Agreement, the Guaranty Agreements, the Security Documents, the Fee Letter, all Borrowing Requests, each Roll-Up DIP Lender Supplement, each Approved Budget, each Approved Budget Variance Report, the Interim DIP Order (if applicable) (and, on and after the Final DIP Order Date, the Final DIP Order (if applicable)) and all other documents, instruments, certificates, and agreements executed, delivered, or acknowledged by a Borrower (other than Organizational Documents) in connection with or contemplated by this Agreement.

“Loans” mean the loans made by the Lenders to Borrowers pursuant to this Agreement in the form of a New Term Loan or Roll-Up DIP Loan, in each case to the extent outstanding or in existence.

“Margin Stock” means “margin stock” within the meaning of Regulations U and X of the Board.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Material Adverse Effect” means a material adverse change in, or any event or occurrence (other than (i) the events or occurrences disclosed to the Administrative Agent in writing prior to the Effective Date or (ii) the events or occurrences resulting from the commencement of the Bankruptcy Cases (if filed) and the continuation and prosecution thereof, including but not limited to any defaults under prepetition agreements, so long as the exercise of remedies as a result of such defaults are stayed under the Bankruptcy Code (the “Bankruptcy Events and Circumstances”)) which could reasonably be expected to result in a material adverse change in (a) the business, operations, financial condition, assets or liabilities of the Company and its Subsidiaries taken as a whole, (b) the ability of the Borrowers to perform their payment obligations under Loan Documents to which they are a party, (c) the legality, validity, binding effect, or enforceability of this Agreement or any other Loan Document, or (d) the rights and remedies of or benefits available to the Administrative Agent or the Lenders under this Agreement or any of the other Loan Documents.

“Material Contract” means with respect to any Borrower, each contract to which such Borrower is now or at any time hereafter a party (other than the Loan Documents) for which breach, nonperformance, cancellation, or failure to renew could reasonably be expected to have a Material Adverse Effect.

“Material Indebtedness” means Indebtedness (other than the Loans) of any Company in an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) exceeding $50,000. For purposes of determining Material Indebtedness, the principal amount of the obligations of any Person in respect of any Hedging Agreement at any time shall be the Termination Value thereof.

“Maturity Date” means the earliest to occur of:

(a) the date of consummation of a sale of all or substantially all of the Company’s assets or equity;

(b) the acceleration of the Obligations or termination by the Administrative Agent and/or the New Term Lenders of the New Term Loan Commitments (other than pursuant to Section 2.08);

(d) following the Petition Date: (i) the effective date of a plan of reorganization or liquidation filed in the Bankruptcy Cases that is confirmed pursuant to an order of the Bankruptcy Court, (ii) the date that is 28 days after the Petition Date if a Final DIP Order has not been entered by the Bankruptcy Court by such date, unless such date has been extended with the written consent of Fifth Star in its sole discretion, (iii) the Interim DIP Order or the Final DIP Order, as applicable, ceasing to be in full force and effect for any reason after being entered, (iv) the date of conversion or dismissal of any of the Bankruptcy Cases, and (v) any financing incurred by the Borrowers under Section 364 of the Bankruptcy Code other than the Loans and New Term Loan Commitments hereunder that does not provide for the immediate payment in full in cash of the Prepetition Senior Secured Obligations and all Obligations hereunder.

“Maximum Rate” has the meaning assigned to such term in Section 10.12.

“MCA Financing” means, collectively, (i) that certain Future Receivables Agreement dated as of November 30, 2023, by and between the Company and Riverside Capital Financing, and (ii) that certain Standard Merchant Cash Advance Agreement dated as of November 30, 2023, by and between the Company and Wave Advance Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA in respect of which a Borrower or any ERISA Affiliate contributes, has any obligation to contribute or otherwise has any liability (including contingent liability).

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Net Cash Proceeds” means, (a) in connection with any Disposition or any Event of Loss, the proceeds thereof in the form of cash and Cash Equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or return of funds held in escrow or otherwise, but only as and when received) of such Disposition or Event of Loss, net of reasonable and customary attorneys’ fees, accountants’ fees, sales commissions, investment banking fees, amounts required to be applied to the repayment of Indebtedness secured by a Lien permitted hereunder on any asset which is the subject of such Disposition or Event of Loss (other than any Lien pursuant to a Security Document) and other reasonable and customary fees and expenses actually incurred in connection therewith and the amount of cash reserves established to fund contingent liabilities reasonably estimated to be payable and attributable to such disposition or event and net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), or (b) in connection with any incurrence of Indebtedness, the cash proceeds received from such incurrence, net of reasonable and customary attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions, upfront fees, placement fees and other customary fees and expenses actually incurred in connection therewith.

“New Bridge Lender” has the meaning assigned to such term in the recitals.

“New Bridge Loan” has the meaning assigned to such term in Section 2.01(a).

“New Bridge Loan Commitment” means, with respect to the New Bridge Lender, its obligation to make a New Bridge Loan to Borrowers from time to time during the applicable availability period in accordance with Section 2.01(a) in an aggregate principal amount up to, and not to exceed, the amount set forth on such Lender’s signature page hereto under the caption “New Bridge Loan Commitment”, as such commitment may be reduced from time to time pursuant to Section 2.08. The aggregate amount of the Lenders’ New Bridge Loan Commitments is $3,000,000 as of the Effective Date.

“New Bridge Loan Conditions” has the meaning assigned to such term in Section 4.01.

“New Money DIP Loan” has the meaning assigned to such term in Section 2.01(b).

“New Money DIP Loan Availability Period” means the period from and including the Petition Date through and including the Maturity Date.

“New Money DIP Loan Commitment” means, with respect to the New Money DIP Lender, its obligation to make a New Money DIP Loan to Borrowers from time to time during the New Money DIP Loan Availability Period in accordance with Section 2.01(b)(i) in an aggregate principal amount up to, and not to exceed, the amount set forth on such Lender’s signature page hereto under the caption “New Money DIP Loan Commitment”, as such commitment may be reduced from time to time pursuant to Section 2.08. The aggregate amount of the Lenders’ New Money DIP Loan Commitments is $6,000,000 as of the Effective Date.

“New Term Lenders” means, collectively, the New Bridge Lender and the New Money DIP Lender.

“New Term Loan” has the meaning assigned to such term in Section 2.01(b).

“New Term Loan Commitments” means, collectively, the New Bridge Loan Commitments and the New Money DIP Loan Commitments.

“NPL” has the meaning assigned to such term in Section 3.16(c).

“Obligations” means all of the obligations, indebtedness and liabilities of the Borrowers to the Lenders and Administrative Agent under this Agreement or any of the other Loan Documents, including principal, interest, fees, prepayment premiums (if any), expenses, reimbursements and indemnification obligations and other amounts, and including interests, fees and expenses that accrue after the Effective Date.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Ordinary Course Disposition” means (i) any Disposition among the Borrowers and their Subsidiaries permitted hereunder and (ii) any Disposition permitted under clause (a), (c), (d), (f), (g), or (j) of Section 6.04.

“Ordinary Course of Business” means, in respect of any transaction or circumstance involving any of the Borrowers or their respective Subsidiaries, the ordinary course of such Borrower’s or Subsidiary’s business, as applicable, substantially as previously conducted by it or otherwise substantially consistent with past practice or industry practice.

“Organizational Documents” means, with respect to any Person (a) in the case of any corporation, the certificate of incorporation and by-laws (or similar documents) of such Person, (b) in the case of any limited liability company, the certificate or articles of formation and operating agreement (or similar documents) of such Person, (c) in the case of any limited partnership, the certificate of formation and limited partnership agreement (or similar documents) of such Person, (d) in the case of any general partnership, the partnership agreement (or similar document) of such Person, (e) in any other case, the functional equivalent of the foregoing, and (f) any shareholder, voting trust or similar agreement between or among any holders of Equity Interests of such Person.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing, or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.18).

“Participant” has the meaning assigned to such term in Section 10.04.

“Participant Register” has the meaning assigned to such term in Section 10.04.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

“Permitted Encumbrances” means (a) Liens for taxes or governmental charges or levies not yet delinquent for a period of more than thirty (30) days or which are delinquent for a period of more than thirty (30) days and being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the property subject to such Lien is not yet subject to foreclosure or sale on account thereof); (b) Liens in respect of property imposed by law arising in the Ordinary Course of Business such as materialmen’s, carrier’s, mechanics’, landlord’s, warehousemen’s, and other like Liens; provided that such Liens secure only amounts not more than 90 days past due or are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the property subject to such Lien is not yet subject to foreclosure, sale or loss on account thereof); (c) pledges or deposits made in the Ordinary Course of Business to secure payment of worker’s compensation insurance, unemployment insurance, pensions or social security, property, casualty, or liability insurance, or other insurance programs; (d) Liens arising from good faith deposits in connection with or to secure performance of utilities, tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations incurred in the Ordinary Course of Business (other than obligations in respect of the payment of borrowed money); (e) easements, rights-of-way, servitudes, restrictions (including zoning restrictions), defects or irregularities in title and other similar charges or encumbrances not, in any material respect, impairing the use of such property for its intended purposes or interfering with the ordinary conduct of business of any Borrower; (f) Liens in favor of Administrative Agent or for the benefit of the Secured Parties granted pursuant to Loan Documents; (g) customary Liens (including the right of set-off) in favor of banking institutions encumbering deposits held by such banking institutions or in favor of collecting banks incurred in the Ordinary Course of Business; (h) Liens set forth on Schedule 6.02; provided that to qualify as a Permitted Encumbrance, any such Lien shall only secure the Indebtedness that is secured by such Liens on the Effective Date and shall encumber only such assets as are encumbered by such Liens as of the Effective Date; and (i) any Lien stayed in connection with the Bankruptcy Cases, if applicable.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Permitted Senior Encumbrances” means (a) Permitted Encumbrances set forth in clauses (a), (b), (c), (d), (e) and (g) of the definition thereof and (b) any other Permitted Encumbrance permitted to be senior to the Liens granted under the Loan Documents pursuant to an Intercreditor Agreement.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority, or other entity.

“Petition Date” means the date of the filing of the Bankruptcy Cases.

“Petition Date Deadline” has the meaning set forth in Section 5.13(b).

“Pledge Agreement” means the non-recourse Pledge Agreement dated as of the Effective Date, by and between the Company and the Administrative Agent.

“Prepetition” means the time period ending immediately prior to the filing of the Bankruptcy Cases on the Petition Date.

“Prepetition Senior Secured Obligations” means the secured obligations of the Borrowers under the Lind Financing and the MCA Financing.

“Prepetition Senior Secured Parties” means the holders of the Prepetition Senior Secured Obligations.

“Pro Rata Share” means, with respect to any Lender in respect of any rights or obligations affecting or involving all Lenders (including any reimbursement obligations in respect of any indemnity claim arising out of an action or omission of Administrative Agent under this Agreement), the percentage (carried out to the ninth decimal place) of the total New Term Loan Commitments or Loans, of all Classes hereunder represented by the aggregate amount of such Lender’s New Term Loan Commitments or Loans, as the case may be, of all Classes hereunder. If the New Term Loan Commitments have terminated or expired, the Pro Rata Share with respect to such Class shall be determined based upon the outstanding principal amount of the New Term Loans at such time.

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“Qualified Equity Interest” means and refers to any Equity Interests issued by the Company (and not by one or more of its Subsidiaries) that is not a Disqualified Equity Interest.

“Recipient” means (a) Administrative Agent and (b) any Lender, as applicable.

“Register” has the meaning assigned to such term in Section 10.04.

“Registered Loan” has the meaning assigned to such term in Section 10.04.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, and advisors of such Person and of such Person’s Affiliates.

“Responsible Officer” means the chief executive officer, president, chief financial officer, principal accounting officer, treasurer, vice president of finance or controller of any Person. Any document delivered hereunder that is signed by a Responsible Officer of any Person shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Person.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Restricted Payment” means, with respect to any Person, any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest of or issued by such Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interest or Equity Right of or issued by such Person or any payment of management fees or consulting fees to any holder of Equity Interests of such Person.

“Restrictive Agreement” has the meaning assigned to such term in Section 6.08.

“Roll-Up DIP Loan” has the meaning assigned to such term in Section 2.01(c)(iii).

“Roll-Up DIP Lender Supplement” means a Roll-Up DIP Lender Supplement substantially in the form attached hereto as Exhibit 2.01(c).

“Sanctioned Person” has the meaning assigned to such term in Section 3.17.

“Sanctions” means any sanctions administered, imposed or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the U.S. Department of Commerce or the U.S. Department of State, the United Nations Security Council, the European Union and its member states, His Majesty’s Treasury, Canada, the Netherlands, or other relevant sanctions authority.

“Scheduled Maturity Date” means the date that is one hundred twenty (120) days following the Effective Date.

“SEC” means the Securities and Exchange Commission.

“Secured Parties” means the holders of the Obligations from time to time and shall include (i) each Lender in respect of its Loans, (ii) the Administrative Agent and the Lenders in respect of all other present and future obligations and liabilities of Borrowers of every type and description arising under or in connection with this Agreement or any other Loan Document, (iii) each indemnified party under Section 10.03 in respect of the obligations and liabilities of Borrowers to such Person hereunder and under the other Loan Documents, and (iv) their respective successors and (in the case of a Lender and the Administrative Agent, permitted) transferees and assigns.

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

“Security Agreement” means the Pledge and Security Agreement dated as of the Effective Date, among Borrowers (and any other Borrower or Guarantor that becomes a party thereto by joinder after the Effective Date), as “Grantors”, and the Administrative Agent.

“Security Documents” means (a) the Security Agreement, (b) any Intercreditor Agreements, (c) the Pledge Agreement, (d) from and after the Petition Date, the DIP Order, (e) each other agreement, instrument, mortgage, deed of trust or document that creates or purports to create a Lien securing the Obligations in favor of the Administrative Agent pursuant to or in connection with the Security Agreement, the Pledge Agreement and/or this Agreement and all UCC financing statements and fixture filings, or such other agreement, instrument, or document to be filed with respect to the Liens created pursuant thereto and each other security agreement or other document executed and delivered on or after the Effective Date to secure any of the Obligations and (f) any amendments, supplements, modifications, renewals, restatements, replacements, consolidations, substitutions and extensions of any of the foregoing in accordance with their respective terms.

“Specified Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which a Borrower or any ERISA Affiliate (i) is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA or (ii) otherwise has any liability (including contingent liability).

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Sponsor Protections” means such customary plan sponsor protections acceptable to the Plan Sponsor, including a (x) break-up fee not to exceed 3% of the “Equity Purchase Amount” set forth in the Prepackaged Plan, (y) expense reimbursement of up to $750,000 in the event that a competing plan of reorganization is confirmed, and (z) minimum financing overbid in the amount of $500,000.

“Subordinated Secured Note Claim” has the meaning assigned to such term in the Prepackaged Plan.

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any other Person the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other Person (a) of which more than 50% of the Equity Interests or more than 50% of the ordinary voting power, are as of such date, owned, controlled or held by the parent (either directly or through one or more intermediaries or both) or (b) the management of which is, as of such date, otherwise controlled, by the parent (either directly or through one or more intermediaries or both). Unless otherwise specified, “Subsidiary” means a Subsidiary of the Company.

“Subsidiary Guarantors” means each Subsidiary that has executed a Guaranty Agreement. As of the Effective Date, there are no Subsidiary Guarantors.

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Termination Value” means, in respect of any Hedging Agreement, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Agreement, (a) for any date on or after the date such Hedging Agreement has been closed out and termination value determined in accordance therewith, such termination value, and (b) for any date prior to the date referenced in clause (a) of this definition the amount determined as the mark-to-market value for such Hedging Agreement, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Agreement (which may include any Lender or any Affiliate of any Lender).

“Toggle Draw Conditions” has the meaning assigned to such term in Section 4.03.

“Toggle Draw Date” has the meaning assigned to such term in Section 4.03.

“Toggle Event” means, upon the occurrence of a Toggle Event Trigger, the election of the Plan Sponsor in its sole discretion upon written notice to the Debtors (e-mail being sufficient) to pursue, in lieu of the Prepackaged Plan, a sale of substantially all of the assets of the Borrowers pursuant to a sale process conducted under Section 363 of the Bankruptcy Code (with bidding procedures to be approved by the Bankruptcy Court in a form acceptable to the Plan Sponsor), under which the Plan Sponsor shall act as a stalking horse bidder.

“Toggle Event Trigger” means the occurrence of any of the following, after commencement of the Bankruptcy Cases and entry of the Interim DIP Order: (i) the failure to meet any Milestone hereunder, (ii) the occurrence of any Event of Default hereunder, (iii) the failure to satisfy the Direct Investment Commitment Conditions (as such term is defined in the Prepackaged Plan) that have not been waived or (iv) the failure to obtain affirmative votes of the Vendor Claims in sufficient amount and number to satisfy the requirements of class acceptance under the Bankruptcy Code upon tabulation of votes received on or prior to the Voting Deadline, with such tabulation to occur within two (2) Business Days following the Voting Deadline.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Tranche 1 Roll-Up DIP Loan” has the meaning assigned to such term in Section 2.01(c)(i).

“Tranche 2 Roll-Up DIP Loan” has the meaning assigned to such term in Section 2.01(c)(ii).

“Tranche 3 Roll-Up DIP Loan” has the meaning assigned to such term in Section 2.01(c)(iii).

“Transactions” means the execution, delivery and performance by the Borrowers of the Loan Documents, the borrowing (or deemed borrowing) of Loans and other credit extensions and the use of proceeds thereof.

“UCC” means the New York Uniform Commercial Code as adopted in the State of New York; provided in connection with any Lien granted under any Security Document, if the laws of any other jurisdiction would govern the perfection or enforcement of such Lien, “UCC” means the Uniform Commercial Code as in effect in such jurisdiction with respect to such Lien.

“United States” and “U.S.” mean the United States of America.

“Unused Commitment” means, at any time with respect to any Lender holding New Term Loan Commitments, the amount equal to (a) such Lender’s New Term Loan Commitment minus (b) the aggregate amount of the outstanding New Term Loans of such Lender.

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section 2.13(g).

“USA Patriot Act” has the meaning assigned to such term in the definition of “Anti-Terrorism Laws”.

“Vendor” means a vendor that sells products or SKUs (stock-keeping units) on any of the Borrowers’ platforms.

“Vendor Claim” means the aggregate unsecured Claims of a Vendor against the Borrowers for past due invoices when such Claims total an amount greater than $10,000.

“Voting Deadline” has the meaning set forth in Section 5.13(d).

“Wholly-Owned” means a Person in which (other than directors’ qualifying shares required by law) 100% of the Equity Interests and Equity Rights, at the time as of which any determination is being made, is owned, beneficially and of record, by a Borrower, or by one or more of the other Wholly-Owned Subsidiaries of a Borrower, or both.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part 1 of Subtitle E of Title IV of ERISA.

“Withholding Agent” means any Borrower and Administrative Agent.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

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SECTION 1.02. Classification. For purposes of this Agreement, Loans, Borrowings, Lenders and Claims may be classified and referred to by Class (e.g., a New Bridge Loan, a New Money DIP Loan Borrowing or a Tranche 2 Roll-Up DIP Lender).

SECTION 1.03. Interpretation. With reference to this Agreement and each other Loan Document, unless other specified herein or in such other Loan Document:

(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s permitted successors and assigns, (iii) the words “herein”, “hereof” and “hereunder”, and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) unless otherwise specified, all references in any Loan Document to Sections, Exhibits and Schedules shall be construed to refer to Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, (vi) any table of contents, captions and headings are for convenience of reference only and shall not affect the construction of this Agreement or any other Loan Document, (vii) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and (viii) unless otherwise explicitly provided herein, any reference to the consent or approval of Fifth Star shall mean the consent or approval of Fifth Star in its capacity as the Administrative Agent and a Lender hereunder and (ix) unless otherwise explicitly provided herein, any reference to the consent or approval of Fifth Star, the Administrative Agent or any applicable Lenders, as applicable, shall be construed to mean the consent or approval of Fifth Star, the Administrative Agent or such Lenders, as applicable in its or their sole discretion and in writing.

(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(c) For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time.

SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed, and all accounting determinations and computations required under the Loan Documents shall be made, in accordance with GAAP, as in effect from time to time, consistently applied.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

Article II THE CREDITS

SECTION 2.01. The Commitments.

(a) New Bridge Loan. Subject to the terms and conditions set forth herein, the New Bridge Lender agrees to make a term loan (the “New Bridge Loan”) to Borrowers on the Effective Date (without the need for a Borrowing Request, but subject to Section 2.06), subject to the satisfaction (or waiver) of the New Bridge Loan Conditions, in an aggregate principal amount of $3,000,000.00; provided that, in any case, the aggregate principal amount of borrowing of the New Bridge Loan hereunder shall not exceed the New Bridge Lender’s New Bridge Loan Commitment then in effect. Proceeds of the New Bridge Loan, net of payment of any amounts required to be paid to other Persons pursuant to the Draw Conditions, shall be deposited in the Funding Account and used solely as permitted herein. Amounts repaid in respect of New Bridge Loans may not be reborrowed.

(b) New Money DIP Loans. Subject to the terms and conditions set forth herein and in the DIP Order, the New Money DIP Lender agrees to make one or more term loans (each, a “New Money DIP Loan”, and together with the New Bridge Loan, each a “New Term Loan” and collectively, the “New Term Loans”) to Borrowers:

(i) from time to time on each DIP Draw Date, consistent with the Approved Budget and subject to the satisfaction (or waiver) of the DIP Draw Conditions, in an aggregate principal amount not to exceed $5,000,000.00; provided, however, that no more than $4,000,000.00 in the aggregate shall be made available or drawn prior to the entry of the Final DIP Order (the “Interim Availability”); provided further, however, that an additional $1,000,000.00 in principal amount (the “Additional Availability”) shall be made available or drawn following entry of the Final DIP Order upon satisfaction of the DIP Draw Conditions (including for the avoidance of doubt, the condition set forth in Section 4.02(j)); and

(ii) from time to time in the New Money DIP Lender’s sole discretion, solely after the occurrence of a Toggle Event, on each Toggle Draw Date, consistent with the Approved Budget and subject to the satisfaction (or waiver) of the Toggle Draw Conditions, in an aggregate principal amount not to exceed $6,000,000.00;

provided that, in any case, the aggregate principal amount of borrowing of New Money DIP Loans hereunder shall not exceed the New Money DIP Lender’s New Money DIP Loan Commitment then in effect. Proceeds of the New Money DIP Loans, net of payment of any amounts required to be paid to other Persons pursuant to the Draw Conditions, shall be deposited in the Funding Account and used solely as permitted herein. Amounts repaid in respect of New Money DIP Loans may not be reborrowed.

(c) Roll-Up DIP Loans. Immediately upon the extension of New Money DIP Loans by the New Money DIP Lender on the initial DIP Draw Date:

(i) the New Bridge Loan shall automatically be deemed exchanged for and converted into (without the need for a Borrowing Request) a term loan to the Borrowers hereunder (the “Tranche 1 Roll-Up DIP Loan”) in a principal amount equal to the outstanding principal amount and accrued and unpaid interest of the New Bridge Loan as of such initial DIP Draw Date;

(ii) each Existing Bridge Loan designated as a “Tranche 2 Loan” on Schedule 2.01(c) attached hereto for which the Administrative Agent has received a Roll-Up DIP Lender Supplement executed by the Borrowers and the applicable Roll-Up DIP Lender as of such initial DIP Draw Date shall automatically be deemed exchanged for and converted into (without the need for a Borrowing Request) a term loan to the Borrowers hereunder (each, a “Tranche 2 Roll-Up DIP Loan”) in a principal amount equal to the outstanding principal amount and accrued and unpaid interest of such Existing Bridge Loan as of such initial DIP Draw Date; and

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(iii) each Existing Bridge Loan designated as a “Tranche 3 Loan” on Schedule 2.01(c) hereto for which the Administrative Agent has received a Roll-Up DIP Lender Supplement executed by the Borrowers and the applicable Roll-Up DIP Lender as of such initial DIP Draw Date shall automatically be deemed exchanged for and converted into (without the need for a Borrowing Request) a term loan to the Borrowers hereunder (each, a “Tranche 3 Roll-Up DIP Loan”, and together with the Tranche 1 Roll-Up DIP Loan and the Tranche 2 Roll-Up DIP Loans, each a “Roll-Up DIP Loan” and collectively, the “Roll-Up DIP Loans”) in a principal amount equal to the outstanding principal amount and accrued and unpaid interest of such Existing Bridge Loan as of such initial DIP Draw Date.

Such exchange and conversion shall not constitute a novation, and such Roll-Up DIP Loans shall constitute Obligations for all purposes hereunder and under the Loan Documents and in the DIP Order. Amounts of Roll-Up DIP Loans repaid may not be reborrowed.

SECTION 2.02. [Reserved].

SECTION 2.03. Requests for Borrowings. To request a Borrowing of New Money DIP Loans, Borrowers shall notify Administrative Agent and the applicable New Term Lender of such request in writing, which request must be received by Administrative Agent and such New Term Lender not later than 1:00 p.m., New York City time, two (2) Business Days before the date of the proposed Borrowing (or such shorter notice as agreed to by the Administrative Agent and such New Term Lender in their sole discretion). Each such Borrowing Request shall be irrevocable (but may be conditional) and shall be in the form attached hereto as Exhibit 2.03 and signed by Borrowers. Each Borrowing Request shall specify (a) the aggregate amount of the requested Borrowing and (b) the date of such Borrowing, which shall be a Business Day. The execution by the Borrowers of this Agreement shall be deemed to be a request for the New Bridge Loans on the Effective Date and for the Roll-Up DIP Loans on the initial DIP Draw Date, and no separate Borrowing Request shall be required for the Borrowing of the New Bridge Loans or the Roll-Up DIP Loans.

SECTION 2.04. [Reserved].

SECTION 2.05. [Reserved].

SECTION 2.06. Funding of Borrowings.

(a) Funding by Lenders. The New Bridge Lender shall make the New Bridge Loan to be made by it hereunder on the proposed date thereof in immediately available funds, net of an aggregate payment of $500,000 in respect of fees of the financial advisor and legal counsel to Fifth Star, to the Funding Account.

(b) [Reserved].

(c) From time to time (but no more than once per calendar week unless otherwise consented to by the Administrative Agent), by delivery to the Administrative Agent (by e-mail or facsimile) of a Funding Account Withdrawal Notice executed by a Responsible Officer of the Borrowers, the Borrowers may request that the Administrative Agent release funds held in the Funding Account, consistent with the Approved Budget (subject to variances permitted under Section 5.11(b)). Any Funding Account Withdrawal Notice shall specify the requested date for the disbursements requested therein, which date shall be the same Business Day for all disbursements requested therein (unless the Administrative Agent, in its sole discretion, agrees to release funds on more than one (1) Business Day). The Borrowers shall deliver any Funding Account Withdrawal Notice no later than 12:00 p.m. (New York City time) one (1) Business Day prior to the requested funding date; provided that the Administrative Agent, in its discretion, may waive or reduce the foregoing prior notice requirements. Subject to the foregoing prior notice requirements and Article IV, the Administrative Agent shall release such funds on the requested date specified in the applicable Funding Account Withdrawal Notice.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 2.07. [Reserved].

SECTION 2.08. Termination and Reduction of Commitments.

(a) Unless previously terminated in accordance with the terms hereof, the New Bridge Loan Commitment shall terminate on the Effective Date and the New Money DIP Loan Commitments shall terminate on the last day of the New Money DIP Loan Availability Period (in each case, after giving effect to the Borrowing on such date).

(b) Each of the New Term Loan Commitments shall be reduced on each date on which the applicable New Term Loans are incurred (after giving effect to any Borrowing on such date) in an amount equal to the aggregate principal amount of New Term Loans incurred on such date. For the avoidance of doubt, the payment in kind of the unused line fee contemplated by Section 2.11(a) shall not reduce any New Term Loan Commitments.

SECTION 2.09. Repayment of Loans; Evidence of Debt.

(a) Repayment. Each Borrower, jointly and severally, hereby unconditionally promises to pay the Loans to Administrative Agent for the account of the Lenders, on the Maturity Date or any earlier date of termination of this Agreement or acceleration of the Loans due hereunder in accordance with the terms hereof, the remaining unpaid principal amount of the Loans in cash; provided, however, that the Lenders may consent and agree to other treatment in connection with an Acceptable Plan.

(b) Manner of Payment. Notwithstanding anything herein to the contrary (but subject to Section 8.02), each repayment of Loans shall be applied, first, to the New Money DIP Loans until the New Money DIP Loans have been repaid in full, second, to the Tranche 1 Roll-Up DIP Loans (or New Bridge Loans, as applicable) until the Tranche 1 Roll-Up DIP Loans (or New Bridge Loans, as applicable) have been repaid in full, and third, on a pro rata basis to the Tranche 2 Roll-Up DIP Loans and the Tranche 3 Roll-Up DIP Loans.

(c) Maintenance of Loan Accounts by Lenders and Administrative Agent. Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of Borrowers to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder. Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder and the Class thereof, (ii) the amount of any principal or interest due and payable or to become due and payable from Borrowers to each Lender hereunder, and (iii) the amount of any sum received by Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d) Effect of Entries. The entries made in the accounts maintained pursuant to Section 2.09(c) shall be conclusive evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of Borrowers to repay the Loans in accordance with the terms of this Agreement. In the event of any conflict between the accounts maintained by any Lender and the accounts of Administrative Agent in respect of such matters, the accounts of Administrative Agent shall control in the absence of manifest error.

SECTION 2.10. Prepayment of Loans.

(a) Optional Prepayments. Borrowers shall not have the right to prepay any Loans in whole or in part without the consent of Fifth Star.

(b) Mandatory Prepayments. Except as may be otherwise consented to by Fifth Star from time to time in writing, Borrowers will prepay the Loans, as follows:

(i) Sale of Assets or Events of Loss. If on any date a Borrower shall receive Net Cash Proceeds from (x) any Disposition (excluding any Ordinary Course Disposition) or (y) any Event of Loss, then, within two (2) Business Days of the date of receipt by a Borrower of such Net Cash Proceeds, the Borrowers shall prepay the Loans in an amount equal to (A) in connection with any Event of Loss, 100% of the amount of such Net Cash Proceeds, (B) in connection with all such Dispositions, 100% of such Net Cash Proceeds, with such prepayment being applied to the Loans as set forth in Section 2.10(c). The provisions of this Section do not constitute consent to the consummation of any Disposition not permitted by Section 6.04.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(ii) Indebtedness Issuance. Without limiting the obligation of Borrowers to obtain the consent of Fifth Star pursuant to Section 6.01 to the incurrence of any Indebtedness not otherwise permitted hereunder, upon the incurrence of any Indebtedness (other than Indebtedness permitted under this Agreement), Borrowers shall prepay the Loans in an aggregate amount equal to 100% of the Net Cash Proceeds thereof within two (2) Business Days of receipt thereof, such prepayment to be effected in the manner and to the extent specified in Section 2.10(c).

(c) Order of Application to Loans. Each optional and mandatory prepayment of the Loans under this Section 2.10 shall be applied to repay the outstanding principal balance of the Loans until the Loans shall have been repaid in full. Each prepayment of Loans shall be applied in accordance with Section 2.09(b) and Section 8.02.

(d) Notices, Etc.

(i) Five (5) Business Days prior to any prepayment under Section 2.10(b) (or such shorter period as Fifth Star may agree in its sole discretion), Borrowers shall deliver to Administrative Agent a certificate signed by a Responsible Officer of Borrowers containing a reasonably detailed calculation of the amount of such prepayment.

(ii) Promptly following receipt of any prepayment notice relating to a Borrowing or such certificate relating to a prepayment, Administrative Agent shall advise the relevant Lenders of the contents thereof and of the amount of such Lender’s portion of such prepayment.

(iii) Prepayments shall be accompanied by accrued interest to the extent required by Section 2.12 and shall be made in the manner specified in Section 2.09(b) and this Section 2.10.

SECTION 2.11. Fees.

(a) Unused Line Fees. Each Borrower, jointly and severally, agrees to pay to Administrative Agent, for the account of each Lender holding New Term Loan Commitments an unused line fee, which shall accrue at a per annum rate equal to 1.50% on the average daily Unused Commitment of such Lender during the period from and including the Effective Date to but excluding the earlier of the date such New Term Loan Commitment terminates and the Maturity Date. Accrued unused line fees for this Section 2.11(a) through and including the last day of each calendar month shall be added to the outstanding principal amount of the New Term Loans on the second Business Day following such date and on the date the New Term Loan Commitment terminates, commencing on the first such date to occur after the Effective Date. All unused line fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(b) Fees. Each Borrower, jointly and severally, agrees to pay to the relevant Persons the fees payable in the amounts and at the times separately agreed upon in the Fee Letters.

(c) Payment of Fees. All fees payable hereunder shall be paid on the dates due, in immediately available funds in Dollars, to Administrative Agent for distribution, other than in the case of fees payable solely for account of Administrative Agent, to the Lenders entitled thereto. Certain fees may be added to the outstanding principal amount of the Loans, as set forth in the Fee Letter. Fees paid shall not be refundable under any circumstances.

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SECTION 2.12. Interest.

(a) New Term Loans. The Loans comprising the New Bridge Loan and the New Money DIP Loan shall bear interest at a rate per annum equal to 15%.

(b) Bridge Loans. The Roll-Up DIP Loans shall bear interest as set forth in the Existing Bridge Loan Documents (or, in the case of the Tranche 1 Roll-Up DIP Loans, at the rate applicable to the New Bridge Loans set forth in Section 2.12(a)).

(c) Default Interest. Upon and following the occurrence of any Event of Default and for so long as such Event of Default is continuing, Borrowers shall pay interest on the principal amount of all outstanding Loans and, to the fullest extent permitted by law, the outstanding amount of all interest, fees and other Obligations, at a rate per annum equal to the Default Rate.

(d) Payment of Interest. Accrued interest on each Loan shall be added on the last day of each month to the outstanding principal amount of such Loans (and thereafter bear interest at the rate set forth in clauses (a), (b) and (c) above, as applicable); provided that upon the occurrence of an Event of Default, the interest set forth in clauses (a), (b) and (c) shall be payable on demand in cash. In the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment.

(e) Computation. All interest hereunder shall be computed on the basis of a year of 360 days, and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day); provided that any interest computed with respect to the Existing Bridge Loan Documents shall be computed as set forth therein.

SECTION 2.13. Taxes.

(a) Defined Terms. For purposes of this Section 2.13, the term “applicable law” includes FATCA.

(b) Payments Free of Taxes. Any and all payments by or on account of any obligation of any Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(c) Payment of Other Taxes by the Borrowers. The Borrowers shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(d) Indemnification by the Borrowers. The Borrowers shall jointly and severally indemnify each Recipient, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrowers by a Lender (with a copy to Administrative Agent), or by Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

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(e) Indemnification by the Lenders. Each Lender shall severally indemnify Administrative Agent, within 10 days after written demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Borrower has not already indemnified Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrowers to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 10.04(e) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by Administrative Agent to the Lender from any other source against any amount due to Administrative Agent under this Section 2.13(e).

(f) Evidence of Payments. As soon as practicable after any payment of Taxes by any Borrower to a Governmental Authority pursuant to this Section 2.13(f), such Borrower shall deliver to Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Administrative Agent.

(g) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to Borrowers and Administrative Agent, at the time or times reasonably requested by Borrowers or Administrative Agent, such properly completed and executed documentation reasonably requested by Borrowers or Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by Borrowers or Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by Borrowers or Administrative Agent as will enable Borrowers or Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution, and submission of such documentation (other than such documentation set forth in clauses (A), (B), and (D) of Section 2.13(g)(ii)) shall not be required if in the Lender’s reasonable judgment such completion, execution, or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing,

(A) any Lender that is a U.S. Person shall deliver to Borrowers and Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrowers or Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrowers and Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrowers or Administrative Agent), whichever of the following is applicable:

(a) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (2) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(b) executed originals of IRS Form W-8ECI;

(c) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (1) a certificate substantially in the form attached hereto as Exhibit 2.13-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrowers within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (2) executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or

(d) to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by any required IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the form attached hereto as Exhibit 2.13-2 or Exhibit 2.13-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form attached hereto as Exhibit 2.13-4 on behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrowers and Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrowers or Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit Borrowers or Administrative Agent to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrowers and Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by Borrowers or Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrowers or Administrative Agent as may be necessary for Borrowers and Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

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Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrowers and Administrative Agent in writing of its legal inability to do so.

(h) Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.13 (including by the payment of additional amounts pursuant to this Section 2.13), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this Section 2.13(h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.13(h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 2.13(h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 2.13(h) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(i) Survival. Each party’s obligations under this Section 2.13 shall survive the resignation or replacement of Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the New Term Loan Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

SECTION 2.14. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a) Each Borrower shall make each payment required to be made by it hereunder (whether of principal, interest or fees, under Section 10.03 or otherwise) or under any other Loan Document (except to the extent otherwise provided therein) prior to 1:00 p.m., New York City time, on the date when due, in immediately available funds, without counterclaim, set-off, or other deduction or condition. Any amounts received after such time on any date may, in the discretion of Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to Administrative Agent, for the account of the respective Lenders to which such payment is owed, at such account as Administrative Agent may designate to Borrowers in writing from time to time, except (i) as otherwise expressly provided in the relevant Loan Document, (ii) that payments pursuant to Sections 2.16 and 10.03 shall be made directly to the Persons entitled thereto and (iii) as expressly consented to by the Administrative Agent in writing. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof in like funds as received by wire transfer to such Lender’s lending office as specified in its Administrative Questionnaire or such other office as notified in writing by such Lender to Administrative Agent. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder or under any other Loan Document shall be made in Dollars.

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(b) Application of Insufficient Payments. If at any time insufficient funds are received by and available to Administrative Agent to pay fully all amounts of principal, interest, fees and expenses then due hereunder, then funds shall be applied in accordance with Section 8.02.

(c) Pro Rata Treatment. Except to the extent otherwise provided herein as of the date of this Agreement: (i) each Borrowing of, or conversions of, Loans (including any deemed Borrowing of Roll-Up DIP Loans on the initial DIP Draw Date) in a particular Class shall be allocated pro rata among the relevant Lenders according to the amounts of their respective New Term Loan Commitments of such Class (in the case of the making of New Term Loans) or their respective unpaid principal amounts of Loans of such Class (in the case of conversions and continuations of Loans); (ii) each payment or prepayment of principal of Loans of any Class by Borrowers, shall be made for account of the relevant Lenders pro rata in accordance with the respective unpaid principal amounts of the Loans of such Class held by them; and (iii) each payment of interest on Loans of any Class by Borrowers shall be made for account of the relevant Lenders pro rata in accordance with the amounts of interest on the Loans of such Class then due and payable to the respective Lenders.

(d) Sharing of Payments by Lenders. If any Lender shall obtain payment in respect of any principal of or interest on any of its Loans not in accordance with the priority of payments set forth herein or in excess of its ratable share of the aggregate amount of outstanding Loans of the applicable Class and accrued interest thereon, then such Lender shall notify Administrative Agent of such fact and remit such excess payment to the Administrative Agent within two (2) Business Days.

(e) Presumptions of Payment. Unless Administrative Agent shall have received notice from Borrowers prior to the date on which any payment is due to Administrative Agent for the account of the Lenders that Borrowers will not make such payment, Administrative Agent may assume that Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption but without any obligation to do so, distribute to the Lenders the amount due. In such event, if Borrowers have not in fact made such payment, then each of the Lenders severally agrees to repay to Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to Administrative Agent at the greater of the Federal Funds Effective Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation. A notice of Administrative Agent to any Lender or Borrowers with respect to any amount owing under this Section 2.17(e) shall be conclusive, absent manifest error.

(f) Certain Deductions by Administrative Agent. If any Lender shall fail to make any payment required to be made by it pursuant to this Agreement, then Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

(g) Return of Proceeds. If at any time payment, in whole or in part, of any amount distributed by Administrative Agent hereunder is rescinded or must otherwise be restored or returned by Administrative Agent as a preference, fraudulent conveyance, or otherwise under any Debtor Relief Law, then each Person receiving any portion of such amount agrees, upon demand, to return the portion of such amount it has received to Administrative Agent together with a pro rata portion of any interest paid by or other charges imposed on Administrative Agent in connection with such rescinded or restored payment.

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Article III REPRESENTATIONS AND WARRANTIES

The Borrowers represent and warrant (with each representation and warranty being deemed in effect after giving effect to the Transactions and subject to the Bankruptcy Events and Circumstances) to Administrative Agent and the Lenders that on the Effective Date, on each Draw Date and on such other dates as such representations and warranties are required to be made:

SECTION 3.01. Organization; Powers. Each of the Borrowers is (a) duly organized, validly existing, and, if applicable in its jurisdiction of organization, in good standing or the equivalent status under the laws of the jurisdiction of its organization, (b) subject to the entry and terms of the Interim DIP Order (and the Final DIP Order, when applicable), has all requisite corporate or similar power and authority and all material governmental licenses, permits, authorizations, and other approvals and entitlements to own and operate its property, to lease or sublease any property its operates, to occupy any property it occupies, and to carry on its business as now conducted and as contemplated to be conducted by it upon and following the consummation of the Transactions, (c) if applicable, subject to the entry and terms of the Interim DIP Order (and the Final DIP Order, when applicable), has all requisite corporate or similar power and authority to execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (d) except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is duly qualified or licensed and is in good standing as a foreign corporation or other company, and authorized to do business, in each jurisdiction in which the characters of its properties or the nature of its business requires such qualification or authorization.

SECTION 3.02. Authorization; Enforceability. The execution, delivery and performance by each Borrower of the Loan Documents and the documents related to the Transactions to which it is a party and the performance of each Borrower’s obligations thereunder are within each Borrower’s requisite corporate or similar powers and have been duly authorized by all necessary corporate, limited liability company or other organizational action, and, if required, by all necessary action by holders of Equity Interests in each such Borrower. To the extent applicable, subject to the entry and terms of the Interim DIP Order (and the Final DIP Order, when applicable), the Loan Documents to which each Borrower is a party have been duly executed and delivered by such Borrower and constitute, a legal, valid and binding obligation of such Borrower, enforceable against such Borrower in accordance with its terms, except as such enforceability may be limited by (a) Debtor Relief Laws or similar laws of general applicability affecting the enforcement of creditors’ rights and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

SECTION 3.03. Governmental Approvals; No Conflicts. To the extent applicable, subject to the entry and terms of the Interim DIP Order (and the Final DIP Order, when applicable), the execution, delivery and performance by each Borrower of the Loan Documents to which it is a party and the documents related to the Transactions to which it is a party and the performance of each Borrower’s obligations thereunder (a) do not require any consent, authorization or approval of, registration or filing with, notice to, or any other action by, any Governmental Authority or any other Person, except for (i) such as have been obtained or made and are in full force and effect and (ii) filings and recordings in respect of the Liens created pursuant to the Security Documents, (b) will not violate any applicable material law or regulation applicable to any Borrower or its Subsidiaries or the Organizational Documents of any Borrower or any of its Subsidiaries, (c) will not violate or result in a default under any Material Contract or Material Indebtedness binding upon any Borrower or any of its Subsidiaries or its assets, or require the acceleration of any payment to be made by any such Person thereunder, (d) will not conflict with or result in a breach or contravention of, any material order, injunction, writ or decree of any Governmental Authority or any arbitral award to which any Borrower or any of its Subsidiaries is a party or affecting such Person or its properties, and (e) except for the Liens created pursuant to the Security Documents and, if applicable, the DIP Order, will not result in the creation or imposition of any Lien on any asset of any Borrower or any of its Subsidiaries.

SECTION 3.04. Financial Condition; No Material Adverse Change.

(a) Financial Condition. Borrowers have heretofore furnished to Administrative Agent and Lenders internally prepared balance sheets and related statements of income, members’ equity and cash flows of the Company for the Fiscal Quarter ending September 30, 2023 and for the portion of the Fiscal Year ending November 30, 2023, in each case, prepared on a consolidated basis in conformity with GAAP. Such financial statements or financial information present fairly in all material respects, the financial position and results of operations and cash flows of the Borrowers, as of such dates and for such periods in accordance with GAAP (where applicable), subject to year-end audit adjustments and the absence of footnotes in the case of any such unaudited financial statements. As of the last day of the Fiscal Quarter ended September 30, 2023, no Company had any Material Indebtedness or other material liabilities required in accordance with GAAP to be reflected or provided for in their balance sheets, except as reflected or provided for in the balance sheets referred to in this Section 3.04(a).

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(b) No Material Adverse Change. Since December 31, 2022, no events have occurred that either individually or in the aggregate could reasonably be expected to have or cause a Material Adverse Effect.

SECTION 3.05. Properties.

(a) Property Generally. Each Borrower and its Subsidiaries has (a) good and legal title to (in the case of fee interests in real property), (b) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (c) good and marketable title to or right to use (in the case of all other personal property), all of their respective material assets reflected in their most recent financial statements delivered hereunder, except for minor defects in title to property that do not materially interfere with its ability to conduct its business as currently conducted or to use such property for their intended purposes. All such assets are free and clear of Liens except for Permitted Encumbrances.

(b) Intellectual Property. Each Borrower and its Subsidiaries owns, or is licensed or otherwise has rights to use, all trademarks, tradenames, copyrights, patents and other intellectual property reasonably necessary to the operation of its business, and the operation of the business of such Borrower and its Subsidiaries does not infringe upon, misappropriate, or otherwise violate the rights of any other Person.

SECTION 3.06. Litigation.

(a) Actions, Suits and Proceedings. There are no actions, suits, investigations or proceedings by or before any arbitrator or Governmental Authority now pending against or, to the knowledge of any Borrower, threatened against or adversely affecting any Borrower or any of its Subsidiaries that involve any of the Loan Documents or any of the Transactions contemplated hereby or thereby or involve a specified amount in controversy individually in excess of $50,000 or could reasonably be expected to result in a Material Adverse Effect, except, in each case, for matters disclosed on Schedule 3.06.

(b) Disclosed Matters. Since the Effective Date, there has been no material change in the status of the Disclosed Matters (or any matter arising prior to the Effective Date and not required to be disclosed on Schedule 3.06).

SECTION 3.07. Compliance with Laws and Agreements. No Borrower nor any Subsidiary is subject to, in violation of, or in default with respect to, any judgments, laws, regulations, orders, writs, injunctions and decrees of any Governmental Authority applicable to it or its property that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No Borrower nor any Subsidiary thereof is in default with respect to any indenture, contract or other agreement.

SECTION 3.08. Investment Company Status. No Borrower nor any of its Subsidiaries is subject to regulation under the Investment Company Act of 1940 or under any other federal or state statute or regulation that limits its ability to incur Indebtedness or that otherwise renders all or any portion of the Obligations unenforceable, and no Borrower is required to register as an “investment company” under and as defined in the Investment Company Act of 1940.

SECTION 3.09. Taxes. Each Borrower and its Subsidiaries and Tax Affiliates have filed or caused to be filed all federal and all material state, local and non-U.S. Tax returns and reports required to have been filed by their due date (including any extensions) and has paid or caused to be paid all Taxes shown therein to be due and has paid all other material Taxes, except (a) Taxes that are being contested in good faith by appropriate proceedings diligently conducted and for which such Person has set aside on its books adequate reserves in accordance with the GAAP or (b) Taxes which are not yet delinquent for a period of more than thirty (30) days. There is no tax assessment proposed in writing, or to the knowledge of any Borrower, threatened in writing, against any Borrower or any of its Subsidiaries or Tax Affiliates that could, if made, be reasonably expected to have a Material Adverse Effect. No Borrower nor any Subsidiary thereof is party to any tax sharing agreement.

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SECTION 3.10. ERISA. None of Borrower, any of its Subsidiaries or any ERISA Affiliate sponsor, maintain, contribute to, or have any obligation to contribute to, and Borrower and its Subsidiaries do not otherwise have any liability (including contingent liability on account of any ERISA Affiliate), to any Multiemployer Plan or any Specified Plan. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, would result in a Material Adverse Effect. No Borrower is nor will be a Benefit Plan or a “governmental plan” within the meaning of ERISA. Neither the execution of this Agreement nor the consummation of any of the Transactions will constitute a non-exempt “prohibited transaction” within the meaning of Section 406 of ERISA or Section 4975 of the Code. No Borrower nor any of its Subsidiaries sponsor, maintain, or contribute to or otherwise has any liability (including liability on account of any ERISA Affiliate) to an employee welfare benefit plan, as defined in Section 3(1) of ERISA, including, without limitation, any such plan maintained to provide benefits to former employees of Borrower or any of its ERISA Affiliates (other than in accordance with Section 4980B of the Code or any similar State law).

SECTION 3.11. Disclosure.

(a) All financial projections and forecasts delivered to Administrative Agent and the Lenders in connection with this Agreement have been prepared by Borrowers in good faith based upon reasonable assumptions believed by Borrowers to be reasonable at the time made available to Administrative Agent and the Lenders, it being recognized by Administrative Agent and the Lenders that such projections are as to future events and are not to be viewed as facts and are subject to significant uncertainties and contingencies, many of which are beyond Borrowers’ control, that no assurance can be given that any particular projection will be realized, and that actual results during the period or periods or covered by such projections may differ significantly from the projected results and such differences may be material.

(b) All written information (other than the projections and forecasts described in Section 3.11(a) and other forward-looking statements and information of a general economic or industry nature) furnished by or on behalf of any Borrower, to Administrative Agent or any Lenders in connection with the transactions contemplated hereby and the negotiation of this Agreement and the other Loan Documents or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) is, when furnished and taken as a whole, complete and correct in all material respects and does not or will not, when furnished and taken as a whole, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect.

(c) The information included in the most recent Beneficial Ownership Certification delivered by the Borrowers pursuant to Section 4.01(m) or Section 5.02(j), as applicable, is true and correct in all respects.

SECTION 3.12. Federal Reserve Regulations; Use of Credit. Neither such Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of any extension of credit hereunder will be used to buy or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock or to refund Indebtedness originally incurred for such purpose. The Borrowers do not own any Margin Stock.

SECTION 3.13. Capitalization.

(a) Authorized and Outstanding Equity Interests. As of the Effective Date, set forth on Schedule 3.13 is a complete and accurate list of the number of shares of each class of Equity Interests of the Company authorized, and the number outstanding, on the Effective Date. All such shares are fully paid.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(b) Equity Rights. Except as set forth on Schedule 3.13, (i) there are no outstanding Equity Rights with respect to the Company and (ii) there are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem, or otherwise acquire any shares of Equity Interests of the Company nor are there any outstanding obligations of the Company or any of its Subsidiaries to make payments to any Person, such as “phantom stock” payments, where the amount thereof is calculated with reference to the fair market value or equity value of the Company or any of its Subsidiaries.

SECTION 3.14. Existing Subsidiaries and Investments.

(a) Subsidiaries. Set forth in Part A of Schedule 3.14 is a complete and correct list of all of the Subsidiaries of the Company as of the Effective Date, together with, for each such Subsidiary, (i) the jurisdiction of organization, of such Subsidiary; (ii) each Person holding Equity Interests in such Subsidiary; (iii) the authorized, issued and outstanding Equity Interests issued by such Subsidiary; (iv) the Equity Interests held by each such Person; and (v) the percentage of ownership of such Subsidiary represented by such Equity Interests. Each of the Company and its Subsidiaries owns, free and clear of Liens (other than Liens created pursuant to the Security Documents and Liens described in clauses (a) and (i) of the definition of Permitted Encumbrances, in each case, if any), and has the unencumbered right to vote, all outstanding Equity Interests in each Person shown to be held by it in Part A of Schedule 3.14, and all of the issued and outstanding Equity Interests of each such Person organized as a corporation or limited liability company is validly issued, fully paid (if applicable) and, with respect to any corporation, non-assessable as of the Effective Date.

(b) Investments. Set forth in Part B of Schedule 3.14 is a complete and correct list of all Equity Interests constituting Investments (other than Investments disclosed in Part A of Schedule 3.14) held by any Borrower or any of its Subsidiaries in any Person on the Effective Date and, for each such Investment, (i) the identity of the Person or Persons holding such Investment and (ii) the nature of such Investment. Each Borrower and its Subsidiaries owns, free and clear of all Liens (other than Permitted Encumbrances), all such Investments as reflected on Schedule 3.14.

SECTION 3.15. Real Property. No Borrower owns any real property.

SECTION 3.16. Environmental Matters. Each Borrower and its Subsidiaries has obtained all material permits, licenses, and other authorizations required under all Environmental Laws to carry on its business. Each of such permits, licenses, and authorizations is in full force and effect and each Borrower and its Subsidiaries is in material compliance with the terms and conditions thereof, and is also in material compliance with all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules, and timetables contained in any applicable Environmental Law.

In addition:

(a) No written notice, notification, demand, request for information, citation, summons or order has been issued, no complaint has been filed, no penalty has been assessed and to any Borrower’s knowledge, no investigation or review is pending or threatened by any Governmental Authority with respect to any alleged failure by any Borrower or any of its Subsidiaries to have any permit, license or other authorization required under any Environmental Law in connection with the conduct of the business of such Borrower or any of its Subsidiaries or with respect to any generation, treatment, storage, recycling, transportation, discharge or disposal, or any release of any Hazardous Materials generated by such Borrower or any of its Subsidiaries.

(b) (i) No Borrower or any of its Subsidiaries owns, operates or leases a treatment, storage or disposal facility requiring a permit under the Resource Conservation and Recovery Act of 1976, or under any comparable state or local statute; (ii) there are no, underground storage tanks or surface impoundments for Hazardous Materials, active or abandoned, at any site or facility now or, to any Borrower’s knowledge, previously owned, operated or leased by any Borrower or any of its Subsidiaries; and (iii) no Hazardous Materials have been released at, on or under any site or facility now or previously owned, operated or leased by any Borrower or any of its Subsidiaries in quantities or concentrations.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(c) No written notification of a release of a Hazardous Material has been filed by or on behalf of any Borrower or any of its Subsidiaries and no site or facility now or previously owned, operated or leased by any Borrower or any of its Subsidiaries is listed or, to any Borrower’s knowledge, proposed for listing on the National Priorities List (“NPL”) under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, listed for possible inclusion on the NPL by the Environmental Protections Agency in the Comprehensive Environmental Protection Agency in the Information System, as provided for by 40 C.F.R. § 300.5, or any similar state list requiring investigation or clean-up by any Borrower or any of its Subsidiaries.

SECTION 3.17. Sanctions/Anti-Corruption Representations.

(a) Each Borrower and its Subsidiaries are aware of the Anti-Terrorism Laws, Anti-Corruption Laws and laws relating to Sanctions applicable to them and of the requirements thereunder, and comply with same, including all those applicable in the jurisdictions in which Borrower and its Subsidiaries conduct business. No Borrower nor any of its Subsidiaries, nor, to its knowledge, any of its other Affiliates, is in violation of any Anti-Terrorism Laws, Anti-Corruption Laws or Sanctions or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Laws, Anti-Corruption Laws or Sanctions.

(b) No Borrower nor any of its Subsidiaries or their respective directors or officers, nor, to its knowledge, any of its other Affiliates, employees, or agents of any Borrower or any of its Affiliates, is a Person (each such Person, a “Sanctioned Person”) that is, or is owned or controlled by Persons that are: (i) the target of any Sanctions, or (ii) located, organized or resident in a country, region or territory that is, or whose government is, the target of comprehensive Sanctions (including, as at the time of this Agreement, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, the Crimea Region of Ukraine, Cuba, Iran, North Korea and Syria).

(c) No Borrower nor any of its Subsidiaries, nor to its knowledge any of its other Affiliates or any director, officer, employee or agent of any Borrower or any of its Affiliates, has engaged in, or will engage in, any dealings or transactions with any Sanctioned Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions (including, as at the time of this Agreement, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, the Crimea Region of Ukraine, Cuba, Iran, North Korea and Syria).

SECTION 3.18. Insurance. The properties of each Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of any Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where any Borrower or the applicable Subsidiary operates.

SECTION 3.19. Labor Matters, Etc. No Borrower nor any of its Subsidiaries are party to or bound by any collective bargaining agreement. To the best of any Borrower’s knowledge, there are no pending or threatened strikes, lockouts, work stoppages or other labor disputes against any Borrower or any of its Subsidiaries. Each Borrower has paid in all material respects all wages required.

SECTION 3.20. [Reserved].

SECTION 3.21. Material Contracts. Borrowers have delivered to Fifth Star duly executed copies of the Material Contracts as of the Effective Date, which are set forth on Schedule 3.21.

SECTION 3.22. No Burdensome Restriction. No Borrower nor any of its Subsidiaries is a party to or bound by any Restrictive Agreement (other than those permitted under Section 6.08) or subject to any restriction in its Organizational Documents or any applicable law or regulation of any Governmental Authority, in each case, the performance of or compliance with which could reasonably be expected to have a Material Adverse Effect.

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SECTION 3.23. Security and Priority.

(a) Prior to the Petition Date, the provisions of the Security Documents are, or will be at the time of execution and delivery thereof, effective to create in favor of the Administrative Agent for the benefit of the Secured Parties a valid and enforceable Lien on all right, title and interest of each Borrower in the Collateral described therein and the proceeds thereof; provided that such Lien will be (i) subject and subordinate to any valid, perfected and enforceable Lien securing the Prepetition Senior Secured Obligations and (ii) senior in all respects to any Lien in favor of a third party that is subject to subordination pursuant to any agreement or written acknowledgement or consent of the holder of such Lien, including any Intercreditor Agreement. Prior to the Petition Date, when all appropriate filings or recordings are made in the appropriate offices or other perfection action taken as contemplated hereby and by the Security Documents, the Liens created by each such Security Document will constitute fully perfected Liens on and security interests in all right, title and interest of the Borrowers in such Collateral and the proceeds thereof subject to the limitations and exceptions set forth in the Security Documents.

(b) From and after the Petition Date, if applicable, subject to the entry and the terms of the Interim DIP Order (and the Final DIP Order, when applicable), all of the Obligations of each Borrower are authorized by each DIP Order and shall at all times:

(i) pursuant to section 364(c)(1) of the Bankruptcy Code, constitute joint and several allowed superpriority administrative expense claims against the Borrowers (without the need to file any proof of claim) with priority over any and all other administrative expenses and all other unsecured claims asserted against Borrowers, now existing or hereafter arising, of any kind whatsoever, including, without limitation, all administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code and any and all administrative expenses or other claims arising under sections 105, 326, 328, 330, 331, 363, 364, 365, 503, 506(b), 506(c) (subject to the entry of the Final DIP Order), 507(a), 507(b), 507(d), 546, 726, 1113 or 1114 of the Bankruptcy Code, whether or not such expenses or claims may become secured by a judgment lien or other non-consensual lien, levy or attachment, which allowed claims (the “DIP Super-Priority Claims”) shall for purposes of section 1129(a)(9)(A) of the Bankruptcy Code be considered administrative expenses allowed under section 503(b) of the Bankruptcy Code, and which DIP Super-Priority Claims shall be payable from and have recourse to all pre- and post-petition assets and property, whether existing on the Petition Date or thereafter acquired, of the Borrowers and all proceeds thereof (excluding Avoidance Actions but including, subject to entry of the Final DIP Order, the Avoidance Actions Proceeds); provided, however, such DIP Super-Priority Claims shall be junior and subordinate to and subject to prior payment in full, in cash, of (x) the Carve-Out and (y) the Prepetition Senior Secured Obligations and any adequate protection claims granted to the Prepetition Senior Secured Parties (if applicable) to the extent provided under the DIP Order. The DIP Super-Priority Claims granted on account of the Tranche 1 Roll-Up DIP Loans shall be immediately junior in payment priority and subject to the DIP Super-Priority Claims granted on account of the New Money DIP Loans, and the Tranche 2 Roll-Up DIP Loans and Tranche 3 Roll-Up DIP Loans shall be junior in payment priority and subject to the DIP Super-Priority Claims granted on account of the New Money DIP Loans and the Trance 1 Roll-Up DIP Loans. The DIP Super-Priority Claims shall be entitled to the full protection of section 364(e) of the Bankruptcy Code in the event that the Interim DIP Order (or, after entry thereof, the Final DIP Order) or any provision thereof is vacated, reversed, amended or otherwise modified, on appeal or otherwise;

(ii) pursuant to section 364(c)(2) of the Bankruptcy Code and the Security Documents, be secured by a valid, binding, perfected, continuing, enforceable, non-avoidable first priority security interest in and Lien on the Collateral of each Borrower to the extent such Collateral is not subject to valid, enforceable, perfected and non-avoidable Liens as of the Petition Date, including, the Avoidance Actions Proceeds (subject to entry of the Final DIP Order), any proceeds of the New Money DIP Loans, and any accounts holding such proceeds of the New Money DIP Loans, (x) which Obligations in respect of New Money DIP Loans shall be secured by first priority Liens and security interests, senior to all other Liens on such Collateral, (y) which Obligations in respect of Tranche 1 Roll-Up DIP Loans shall be secured by first priority Liens and security interests, senior to all other Liens on such Collateral other than such Liens securing the Obligations in respect of the New Money DIP Loans and (z) which Obligations in respect of Tranche 2 Roll-Up DIP Loans and Tranche 3 Roll-Up DIP Loans shall be secured by first priority Liens and security interests, senior to all other Liens on such Collateral other than such Liens securing the Obligations in respect of the New Money DIP Loans and Tranche 1 Roll-Up DIP Loans, pari passu as to each other and junior only the Liens securing the Obligations in respect of the New Money DIP Loans and the Trance 1 Roll-Up DIP Loans; provided that the Liens set forth in this paragraph shall be subject and subordinate to the Carve-Out and to any adequate protection liens granted to the Prepetition Senior Secured Parties (if applicable) to the extent provided under the DIP Order; and

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(iii) pursuant to sections 364(c)(3) and 364(d)(1) of the Bankruptcy Code and the Security Documents, also be secured by a valid, binding, perfected, continuing, enforceable, non-avoidable security interest and Lien on all other Collateral of each Borrower (i.e., Collateral other than Collateral described in Section 3.23(b)(ii) above), which security interests and Liens on such Collateral shall in each case be (i) senior to and prime all other Liens and security interests (other than liens and security interests identified in subclause (ii) below) in the Borrowers’ Collateral, and (ii) junior only to any valid, binding, enforceable, perfected and unavoidable Liens in favor of third parties that were (x) in existence immediately prior to the Petition Date and not subject to subordination to the New Term Loans pursuant to any Intercreditor Agreement, or (y) perfected subsequent to the Petition Date as permitted by section 546(b) of the Bankruptcy Code; provided that the Lien set forth in this paragraph shall also be subject and subordinate to the Carve-Out and to any adequate protection liens granted to the Prepetition Senior Secured Parties (if applicable) to the extent provided under the DIP Order; provided further that (1) the Lien set forth in this paragraph securing Obligations in respect of New Money DIP Loans shall be senior to the Lien securing Obligations in respect of the Roll-Up DIP Loans, and the Lien, (2) the Lien set forth in this paragraph securing Obligations in respect of the Tranche 1 Roll-Up DIP Loan shall be immediately junior to the Lien securing Obligations in respect to the New Money DIP Loans but senior to the Lien securing Obligations in respect of the Tranche 2 Roll-Up DIP Loan and Tranche 3 Roll-Up DIP Loan Claims, and (3) the Liens set forth in this paragraph securing Obligations in respect of the Tranche 2 Roll-Up DIP Loan and Tranche 3 Roll-Up DIP Loans shall be pari passu as to each other and junior to the Liens securing Obligations in respect to the New Money DIP Loans and the Tranche 1 Roll-Up DIP Loan.

(c) Upon (and at all times after) the entry, and subject to the terms, of each of the Interim DIP Order and the Final DIP Order, each such DIP Order is effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid, enforceable and perfected security interest in the Collateral of the Borrowers and proceeds thereof, without any further action being required by the Administrative Agent or any Lender.

(d) Upon (and at all times after) the entry, and subject to the terms, of each of the Interim DIP Order and the Final DIP Order, each such DIP Order and the Loan Documents is sufficient to provide the DIP Super-Priority Claims and security interests in and Liens on the Collateral of the Borrowers described in, and with the priority provided in, Section 3.23(b) and the DIP Order, without any further action being required by the Administrative Agent.

SECTION 3.24. DIP Order. (a) From and after the Petition Date, the Borrowers are in compliance in all material respects with the terms and conditions of the Interim DIP Order or the Final DIP Order, as applicable.

(b) From and after the Interim DIP Order Date until the Final DIP Order Date, the Interim DIP Order, or at all times after the Final DIP Order Date, the Final DIP Order, is in full force and effect and has not been vacated, reversed, terminated, rescinded, or materially modified or amended without the prior written consent of Fifth Star.

(c) From and after the Petition Date, no appeal or motion for reconsideration of the DIP Order shall have been filed, or, if the DIP Order is the subject of a pending appeal or motion for reconsideration in any respect, none of such order, the making of the Loans or the performance by any Borrower of any of its obligations under any of the Loan Documents shall be the subject of a presently effective stay pending appeal or reconsideration. The Borrowers, the Administrative Agent and the Lenders shall be entitled to rely in good faith upon the DIP Order, notwithstanding objection thereto or appeal therefrom by any interested party. The Borrowers, the Administrative Agent and the Lenders shall be permitted and required to perform their respective obligations in compliance with this Agreement notwithstanding any such objection or appeal unless the relevant DIP Order has been stayed by a court of competent jurisdiction.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 3.25. Bankruptcy Cases. (a) Solely to the extent the Petition Date occurs, the Bankruptcy Cases were commenced on the Petition Date in accordance with applicable laws and proper notice thereof was given for (i) the motion seeking approval of the Loan Documents and the Interim DIP Order and Final DIP Order, (ii) the hearing for the entry of the Interim DIP Order and (iii) following the entry of the Interim DIP Order, the hearing for entry of the Final DIP Order. The Borrowers shall give, on a timely basis as specified in the Interim DIP Order or the Final DIP Order, as applicable, all notices required to be given under the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and Local Bankruptcy Rules for the United States Bankruptcy Court for the District of Delaware, and as specified in the Interim DIP Order or Final DIP Order, as applicable.

(b) From and after the Petition Date, notwithstanding the provisions of section 362 of the Bankruptcy Code, and subject to the provisions of Article VIII and the applicable provisions of the Interim DIP Order or the Final DIP Order, as the case may be (and subject to any notice required hereunder or thereunder), upon the maturity (whether by acceleration or otherwise) of any of the Obligations, the Administrative Agent and the Lenders shall be entitled to immediate payment of the Obligations and to enforce the remedies provided for hereunder, under the DIP Order or under applicable laws, without further motion or application to, or order from, the Bankruptcy Court.

(c) From and after the Petition Date, no order has been entered in any of the Bankruptcy Cases (i) for the appointment of a Chapter 11 trustee, (ii) for the appointment of an examiner (other than a fee examiner) or receiver having expanded powers (beyond those set forth under Sections 1106(a)(3) and (4) of the Bankruptcy Code) under section 1104 of the Bankruptcy Code or (iii) to convert any of the Bankruptcy Cases to a case under Chapter 7 of the Bankruptcy Code or to dismiss any of the Bankruptcy Cases.

SECTION 3.26. Approved Budget. The initial Approved Budget attached hereto as Exhibit 3.26 and each subsequent Approved Budget delivered in accordance with Section 5.11 has been prepared in good faith, with due care and based upon assumptions the Borrowers believe to be reasonable assumptions on the date of delivery of the then-applicable Approved Budget. To the knowledge of the Borrowers, no facts exist that (individually or in the aggregate) could reasonably be expected to result in any material change in the Approved Budget, other than those disclosed to Fifth Star.

Article IV CONDITIONS PRECEDENT.

SECTION 4.01. Effective Date. The effectiveness of this Agreement and the obligation of the New Bridge Lender to make the New Bridge Loan hereunder shall not become effective until the date on which Fifth Star shall have received (or waived in writing) each of the following (the “New Bridge Loan Conditions”), in each case reasonably satisfactory to Fifth Star in form and substance:

(a) Executed Counterparts. From each party thereto, a counterpart of this Agreement and the other Loan Documents to be executed and delivered as of the Effective Date, signed and delivered on behalf of such party.

(b) Opinions of Counsel to Borrowers. A customary legal opinion (addressed to Administrative Agent and the New Bridge Lender and dated the Effective Date) of DLA Piper LLP (US), counsel to Borrowers, regarding the Transactions (including, for the avoidance of doubt, no conflicts opinions with certain specified agreements) and such other matters as Fifth Star shall reasonably request.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(c) Corporate Documents. Such documents and certificates as Fifth Star may reasonably request relating to the organization, existence and good standing of each Borrower, the authorization of the Transactions, the identity, authority and capacity of each Responsible Officer authorized to act on behalf of a Borrower in connection with the Loan Documents and any other legal matters relating to the Borrowers, this Agreement, the other Loan Documents or the Transactions.

(d) Security Documents.

(i) The Security Agreement and the Pledge Agreement, duly executed and delivered by the Borrowers and the Administrative Agent party thereto, and the results, dated as of a recent date prior to the Effective Date, of searches conducted (i) in the UCC filing records in each of the governmental offices in each jurisdiction in which any Borrower or any personal property and fixture Collateral is located, and (ii) of the records maintained by the U.S. Patent and Trademark Office and the U.S. Copyright Office with respect to all United States patents and patent applications, all United States registered trademarks and trademark applications and all United States registered copyrights and copyright applications constituting part of the Collateral, which in each case shall have revealed no Liens with respect to any of the Collateral except Permitted Encumbrances or Liens discharged on or prior to the Effective Date pursuant to documentation reasonably satisfactory to Fifth Star. Without limiting the foregoing, subject to (x) prior to the Petition Date, any Intercreditor Agreements and (y) from and after the Petition Date, the DIP Order, each Borrower shall deliver: (x) all certificates, if any, representing the outstanding Equity Interests constituting Collateral of each Subsidiary owned by or on behalf of such Borrower as of the Effective Date, promissory notes, if any, evidencing Indebtedness owed to such Borrower as of the Effective Date after giving effect to the Transactions, in each case to the extent constituting Collateral and required to be delivered pursuant to the terms of the Security Agreement or the Pledge Agreement, and stock powers and instruments of transfer, endorsed in blank, with respect to such stock certificates and promissory notes; (y) except as may be required by Section 5.17, all fully executed Control Agreements as required hereby or the Security Agreement, and any collateral access agreements to the extent required to be delivered pursuant to the Security Agreement, and (z) UCC financing statements, required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded to create or perfect the Liens intended to be created under the Security Agreement and the Pledge Agreement and/or (if applicable) the DIP Order.

(ii) The Security Documents and (if applicable) the DIP Order, upon entry thereof and subject to the terms thereof, shall be effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, legal, valid, enforceable, perfected and (if applicable) unavoidable Liens on and security interests in the Collateral as set forth in Section 3.23 and the DIP Order, and subject in all respects to Section 10.25. The Borrowers shall have delivered UCC financing statements, in suitable form for filing, and shall have made arrangements for the filing thereof that are reasonably acceptable to the Administrative Agent.

(iii) The Administrative Agent shall have established the Funding Account.

(e) Prepackaged Plan Documentation. The current forms of the Prepackaged Plan, the written disclosure statement that relates to the Prepackaged Plan, including the exhibits thereto, and other solicitation documents, in each case, subject to further amendment as agreed among the Borrowers and Fifth Star prior to the Petition Date.

(f) Representations and Warranties. The representations and warranties of each Borrower set forth in this Agreement and the other Loan Documents to which it is a party shall be true and correct in all material respects (unless any such representation or warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects) on and as of the Effective Date, both before and immediately after giving effect to the Transactions and the Borrowings on such date, except the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (unless any such representation or warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects) as of such earlier date.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(g) No Default. No Default shall have occurred and be continuing nor shall any Default arise from the making of the Loans hereunder.

(h) Consents. Consent, acknowledgment, and as applicable, subordination agreements regarding the Transactions and the Prepackaged Plans from each of the Existing Bridge Lenders, the Prepetition Senior Secured Parties, the holders of the Subordinated Secured Note Claims and Pravati Investment Fund IV LP (including those set forth in the definition of Intercreditor Agreement).

(i) Financial Statements. The financial statements and financial information referred to in Section 3.04(a) shall have been delivered to the Administrative Agent.

(j) Officer’s Certificate. A certificate of a Responsible Officer of each Borrower, dated the Effective Date, certifying (i) either (x) all authorizations or approvals of any Governmental Authority and approvals or consents of any other Person, required in connection with the Transactions shall have been obtained, or (y) that no such authorizations, approvals, and consents are so required, and (ii) compliance with the conditions set forth in clauses (f), (g) and (m) of this Section 4.01.

(k) Fees. Evidence that Borrowers shall have paid (or shall pay substantially concurrently with the funding of the initial Borrowings under this Agreement on the Effective Date) all accrued fees and expenses that are required to be paid on the Effective Date under the terms of the Fee Letters or any other agreements between the Borrowers and Fifth Star and expenses of Fifth Star required to be paid on the Effective Date pursuant to the Fee Letters or such other letter agreements.

(l) Approved Budget. Fifth Star shall have received a copy of the Approved Budget, certified by a Responsible Officer of the Borrowers, and in form and substance satisfactory to Fifth Star.

(m) Material Adverse Effect. There shall not have occurred a Material Adverse Effect since December 31, 2022.

(n) Beneficial Ownership Certification. A Beneficial Ownership Certification from the Company.

(o) [Reserved].

(p) Other Documents. Such other assurances, certificates, documents, consents, or opinions as Fifth Star may reasonably request.

(q) Diligence. (i) Fifth Star and its counsel shall have completed all legal due diligence, the results of which shall be satisfactory to Fifth Star in its sole discretion and (ii) the corporate structure, capital structure, other debt instruments, material accounts and governing documents of the Borrowers shall be acceptable to Fifth Star in its sole discretion.

The Administrative Agent shall notify Borrowers and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Each Lender that has signed this Agreement (or a Roll-Up DIP Lender Supplement, as applicable) shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Administrative Agent shall have received notice from such Lender prior to the proposed Effective Date specifying its objection thereto.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 4.02. DIP Draw Date. The obligation of the New Money DIP Lender to make Loans by such Lender from time to time after the Effective Date is subject to the satisfaction (or waiver in writing) by Fifth Star of the following conditions (the “DIP Draw Conditions”) on or prior to such date (each such date, a “DIP Draw Date”):

(a) the representations and warranties of each Borrower set forth in this Agreement and of the other Loan Documents to which it is a party, shall be true and correct in all material respects (unless any such representation or warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects) on and as of such DIP Draw Date, both before and immediately after giving effect thereto and the Borrowings and application of proceeds on such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (unless any such representation or warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in Section 3.04(a) shall be deemed to refer to the most recent statements furnished pursuant to Sections 5.01(a) and 5.01(b), respectively;

(b) at the time of and immediately after giving effect thereto and to the Borrowings and application of proceeds on such date, no Default or Toggle Event Trigger shall have occurred and be continuing;

(c) the Borrowers shall have paid (or shall pay substantially concurrently with the funding on such DIP Draw Date) all accrued fees and expenses that are required to be paid under the Loan Documents and under the terms of the Fee Letters or any other agreements between Borrowers and Fifth Star;

(d) the Administrative Agent shall have received a Borrowing Request in accordance with the requirements of this Agreement;

(e) the Loan Documents shall be in full force and effect, as certified by a Responsible Officer of the Borrowers in the applicable Borrowing Request;

(f) there shall not have occurred a Material Adverse Effect since the Effective Date; and

(g) the Borrowers shall have filed the Bankruptcy Cases in the Bankruptcy Court, and:

(i) no later than one (1) day prior to the filing of the Bankruptcy Cases, the Borrowers shall have provided Fifth Star with a copy of all “first day” motions and orders proposed to be filed in connection with the commencement of the Bankruptcy Cases, and such pleadings shall be in form and substance reasonably satisfactory to Fifth Star;

(ii) with respect to the Interim Availability, the Interim DIP Order shall have been entered by the Bankruptcy Court at least one (1) Business Day prior to or by 1:00 pm (New York time) on the initial DIP Draw Date (or such later time as agreed by Fifth Star) and shall be in full force and effect and shall not have been (i) stayed, vacated, reversed or rescinded, and any appeal of such order shall not have been timely filed and a stay of such order pending appeal shall not be presently effective or (ii) without the prior written consent of Fifth Star in its discretion, materially revised, amended or modified and the Borrowers shall be in compliance in all respects with the Interim DIP Order;

(iii) the Cash Management Order and all other “first day orders” or other orders to be entered on or prior to the initial DIP Draw Date, including all payments approved by the Bankruptcy Court in any such orders, shall be reasonably satisfactory in form and substance to Fifth Star, shall have been entered by the Bankruptcy Court pursuant to orders reasonably acceptable to Fifth Star, and shall not have been (i) stayed, vacated, reversed or rescinded or (ii) without the prior written consent of Fifth Star, revised, amended or modified; and

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(iv) with respect to any Loans in excess of the Interim Availability, the Final DIP Order shall have been entered by the Bankruptcy Court at least one (1) Business Day prior to such DIP Draw Date, and shall not have been vacated, reversed or stayed, appealed, or materially modified or amended without the prior written consent of the New Money DIP Lender; and

(h) the Borrowers shall be in compliance in all respects with the applicable Milestones that have occurred to date;

(i) The Borrowers shall delivered certified resolutions of the board of directors or other applicable governing body of each Borrower authorizing the Transactions, the identity, authority and capacity of each Responsible Officer authorized to act on behalf of a Borrower in connection with the Loan Documents and any other legal matters relating to the Borrowers, this Agreement, the other Loan Documents or the Transactions; and

(j) In the event the Borrowers request to draw New Money Loans made available under the Additional Availability, in addition to satisfaction of the other DIP Draw Conditions set forth herein, Fifth Star shall have received (i) a revised Approved Budget acceptable to in its sole discretion at least two (2) Business Days prior to such DIP Draw Date and (ii) a Borrowing Request in accordance with the requirements of this Agreement requesting Loans in accordance with such Approved Budget.

SECTION 4.03. Toggle Draw Date. The obligation of the New Money DIP Lender to make Loans by such Lender from time to time after the Effective Date and the declaration of a Toggle Event (which such declaration, for the avoidance of doubt, is in the sole discretion of Fifth Star) is subject to the satisfaction (or waiver in writing) by Fifth Star of the following conditions (the “Toggle Draw Conditions”) on or prior to such date (each such date the “Toggle Draw Date”):

(a) other than with respect to such Toggle Event, the representations and warranties of each Borrower set forth in this Agreement and of the other Loan Documents to which it is a party, shall be true and correct in all material respects (unless any such representation or warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects) on and as of such Toggle Draw Date, both before and immediately after giving effect thereto, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (unless any such representation or warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects) as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in Section 3.04(a) shall be deemed to refer to the most recent statements furnished pursuant to Sections 5.01(a) and 5.01(b), respectively;

(b) other than with respect to such Toggle Event, at the time of and immediately after giving effect to such Borrowing, no Default shall have occurred and be continuing;

(c) the Borrowers shall have paid (or shall pay substantially concurrently with the funding on such Toggle Draw Date) all accrued fees and expenses that are required to be paid under the Loan Documents and under the terms of the Fee Letters or any other agreements between Borrowers and Fifth Star;

(d) Fifth Star shall have received (i) a revised 13-week Approved Budget acceptable to in its sole discretion at least two (2) Business Days prior to the initial Toggle Draw Date and (ii) a Borrowing Request in accordance with the requirements of this Agreement requesting Loans in accordance with such Approved Budget;

(e) the Loan Documents shall be in full force and effect, as certified by a Responsible Officer of the Borrowers in the applicable Borrowing Request;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(f) there shall not have occurred a Material Adverse Effect since the last Draw Date;

(g) the Final DIP Order shall have been entered by the Bankruptcy Court, and shall not have been vacated, reversed or stayed, appealed, or materially modified or amended without the prior written consent of Fifth Star, or, if such Toggle Event occurs prior to the entry of a Final DIP Order, an Interim DIP Order shall have been entered by the Bankruptcy Court authorizing such Toggle Draws, and such order shall not have been vacated, reserved or stayed, appealed, or materially modified or amended without the prior written consent of Fifth Star; and

(h) other than with respect to such Toggle Event, the Borrowers shall be in compliance in all respects with the applicable Milestones that have occurred to date.

SECTION 4.04. Conditions to each Funding Account Withdrawal. The right of the Borrowers to make a withdrawal of any funds in accordance with Section 2.06(c) is subject to satisfaction of the following conditions precedent prior to or substantially concurrently with the applicable withdrawal:

(a) The Administrative Agent shall have received a fully executed Funding Account Withdrawal Notice in accordance with Section 2.06(c).

(b) If the Borrowers shall have filed the Bankruptcy Cases in the Bankruptcy Court, the Interim DIP Order or, after entry thereof, the Final DIP Order, shall be in full force and effect, and shall not have been (i) vacated, reversed, stayed or terminated, or (ii) except as expressly permitted by the Loan Documents, amended or modified in any manner without the consent of Fifth Star.

(c) Unless such withdrawal is made pursuant to Section 4.04(d): (i) the representations and warranties of the Borrowers set forth in the Loan Documents shall be true and correct in all material respects both before and immediately after giving effect to the incurrence of such withdrawal with the same effect as though such representations and warranties had been made on such date (or, with respect to any representation or warranty that is itself modified or qualified by materiality or a “Material Adverse Effect” standard, such representation or warranty shall be true and correct in all respects), except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date (or, with respect to any representation or warranty that is itself modified or qualified by materiality or a “Material Adverse Effect” standard, such representation or warranty shall be true and correct in all respects as of such earlier date)); (ii) at the time of, and immediately after, the withdrawal contemplated by such Funding Account Withdrawal Notice, no Event of Default shall have occurred and be continuing or would result therefrom; (iii) at the time of, and immediately after, the withdrawal contemplated by such Funding Account Withdrawal Notice and immediately after giving pro forma effect to the contemplated use and application of such withdrawn amounts in accordance with the Approved Budget, the Borrowers shall be in pro forma compliance with the covenant set forth in Section 5.11(b); and (iv) the amount of the withdrawal contemplated by such Funding Account Withdrawal Notice shall not exceed 100% of the projected “Total Disbursements” as set forth in the Approved Budget (subject to variances permitted under Section 5.11(b)) for the one (1) week period immediately following the week in which the requested withdrawal occurs.

(d) Unless such withdrawal is made pursuant to Section 4.04(c): Fifth Star shall have determined in its commercial business judgment that such withdrawal is necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations.

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Article V AFFIRMATIVE COVENANTS

So long as any New Term Loan Commitment is outstanding and thereafter until all Obligations are Fully Satisfied, each Borrower covenants and agrees with Administrative Agent and the Lenders that:

SECTION 5.01. Financial Statements and Other Information. Borrowers will furnish to Administrative Agent (for distribution to each Lender):

(a) within 120 days after the end of each Fiscal Year, (i) commencing with the Fiscal Year ending December 31, 2023, the consolidated balance sheet and related statements of operations, members’ equity and cash flows of the Company and its Subsidiaries, as of the end of and for such year, setting forth, in each case, in comparative form the figures for the previous Fiscal Year audited by WithumSmith+Brown PC or another independent public accountant of recognized national standing reasonably acceptable to Administrative Agent (without any qualification or exception as to the scope of such audit (except for any such qualification pertaining to the Bankruptcy Events and Circumstances or the maturity of the Loans occurring within twelve (12) months of the relevant audit)) to the effect that such consolidated financial statements present fairly in all materials respects the financial condition and results of operations of the Company and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied and (ii) a certification of a Responsible Officer of the Company that such consolidated financial statements present fairly the financial condition and results of operations of the Company and its Subsidiaries for such Fiscal Year on a consolidated basis in accordance with GAAP consistently applied.

(b) within 45 days after the end of each of the Fiscal Quarters of each Fiscal Year commencing with the Fiscal Quarter ending closest to December 31, 2023, (i) the consolidated balance sheet and related statements of operations and cash flows of the Company and its Subsidiaries as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year, setting forth in each case in comparative form the figures for (or, in the case of the balance sheet, as of the end of) the corresponding period or periods of the previous Fiscal Year and (ii) a certification of a Responsible Officer of the Company that such consolidated financial statements present fairly the financial condition and results of operations of the Company and its Subsidiaries, on a consolidated basis for such period in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(c) by no later than the date which occurs 30 days after the end of each fiscal month of the Company and its Subsidiaries, beginning with the fiscal month ending November 30, 2023, the unaudited consolidated balance sheet and related statements of income, stockholders’ equity and cash flows for the Company and its Subsidiaries as of the end of and for such fiscal month and the then elapsed portion of the Fiscal Year, (A) including a report of capital expenditures for such fiscal month and (B) setting forth in comparative form the corresponding consolidated figures for the preceding Fiscal Year, accompanied by a certificate of a Responsible Officer of Borrowers, which certificate shall state that such financial statements present the financial condition and results of operations of the Borrowers and their Subsidiaries in a manner consistent with past practice, and subject to normal year-end audit adjustments and the absence of footnotes;

(d) concurrently with any delivery of financial statements under clause (a) or (b) of this Section, a certificate in substantially the form attached hereto as Exhibit 5.01 of a Responsible Officer of Borrowers (a “Compliance Certificate”) (i) certifying as to (x) whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto and (y) that Borrowers are in compliance with the covenants contained in Section 5.11(b), and (ii) stating whether any change in GAAP or in the application thereof that has an impact on the financial statements of the Company and its Subsidiaries has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate; and

(e) no later than 5:00 p.m. (New York City time) on Thursday of each calendar week occurring after the Effective Date, an Approved Budget Variance Report (which such delivery under this clause (e) may, unless the Administrative Agent requests executed originals, be by electronic communication including fax or email and shall be deemed to be an original authentic counterpart thereof for all purposes);

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(f) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Company or any of its Subsidiaries with the SEC, or with any national securities exchange, or any financial statements (including any related management discussion and analysis) distributed by the Company to any holder of debt securities of the Company or any of its Subsidiaries pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished hereunder, as the case may be;

(g) concurrently with the delivery of the financial statements under clauses (a) and (b) of this Section, a management discussion and analysis with respect to such financial statements;

(h) promptly after any request by Administrative Agent or any Lender (through Administrative Agent), copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Borrower by independent accountants in connection with the accounts or books of any Borrower or any of its Subsidiaries, or any audit of any of them;

(i) not later than two (2) Business Days after receipt thereof by any Borrower or any Subsidiary thereof, copies of all notices, written requests and other documents (including amendments, waivers and other modifications) regarding or related to any breach or default by any party to any Material Indebtedness or any other event relating to Material Indebtedness that could reasonably be expected to have a Material Adverse Effect;

(j) concurrently with any delivery of financial statements under clause (a) of this Section, certificates of Borrowers’ insurance brokers, evidencing all insurance required by Section 5.05 and showing Administrative Agent is named as lender’s loss payee and additional insured with respect thereto;

(k) by no later than 4:00 p.m. (New York city time) every Thursday (or, if such day is not a Business Day, the next Business Day), a weekly report of balance of accounts receivable and accounts payable as of the end of each reporting week as well as an informational weekly cash flow forecast with projections through December 31, 2024 with the same level of detail as the Approved Budget, accompanied by the excel model that supports such informational forecast;

(l) from and after the Petition Date, as soon as reasonably practicable, but in no event later than two (2) Business Days, in advance of filing, copies of all material pleadings, motions and applications to be filed by any of the Borrowers in the Bankruptcy Cases; provided, that if such two (2) Business Day notice is not feasible, the Borrowers shall provide such copies as early as is feasible;

(m) promptly upon the reasonable request of the Administrative Agent, an accounting of all monies deposited in, and the balances in, the Deposit Accounts of the Borrowers; and

(n) promptly following any request therefor, such other information and reports regarding each Borrower or any of its Subsidiaries, or compliance with the terms of this Agreement and the other Loan Documents, as Administrative Agent or any Lender (through Administrative Agent) may reasonably request.

SECTION 5.02. Notices of Material Events. Each Borrower will furnish to Administrative Agent and each Lender written notice of the following, within one (1) day after a Responsible Officer of any Borrower has obtained knowledge thereof:

(a) the occurrence of any Default;

(b) filing or commencement of, or any material development in, any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting any Borrower or any of their respective Subsidiaries;

(c) (i) the occurrence of any ERISA Event or (ii) any Borrower or any ERISA Affiliate (A) establishing, commencing contributions to, or becoming obligated to contribute to, any Specified Plan (or any plan that would be a Specified Plan if such action had been take prior to the date hereof) or (B) commencing contributions to, or becoming obligated to contribute to, a Multiemployer Plan (or any plan that would be a Multiemployer Plan if such action had been take prior to the date hereof);

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(d) the assertion of any claim pursuant to applicable Environmental Law, including alleged violations of or non-compliance with permits, licenses or other authorizations issued pursuant to applicable Environmental Law, by any Person against, or with respect to the activities of, any Borrower or any of their respective Subsidiaries;

(e) the occurrence of any Event of Loss with respect to the property or assets of any Borrower aggregating $50,000 or more;

(f) any change in accounting policies or financial reporting practices by any Borrower or any of its Subsidiaries other than any such change required by GAAP;

(g) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect;

(h) if applicable, any change in the information provided in the Beneficial Ownership Certification that would result in a change to the list of beneficial owners identified in parts (c) or (d) of such certification; and

(i) any communications of any Borrower with: (A) any vendor or supplier of a Borrower regarding any adverse change in the terms of services provided by such vendor or supplier to any Borrower impacting goods or services with a value in excess $50,000 individually or $250,000 in the aggregate, (B) any creditor or purported creditor of any Borrower relating to the Bankruptcy Cases and/or any claims such Person may assert thereunder with a claimed or actual value in excess $50,000 individually or $250,000 in the aggregate, and (C) any Person other than Fifth Star regarding an alternative plan to the Prepackaged Plan or potential sale process in the Bankruptcy Cases.

Each notice delivered under this Section shall be accompanied by a statement of a Responsible Officer of Borrowers setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.03. Existence; Conduct of Business. Each Borrower shall, and shall cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or dispositions under Section 6.04.

SECTION 5.04. Payment of Obligations. To the extent provided for in the Approved Budget, each Borrower shall, and shall cause each of its Subsidiaries to, pay its Tax liabilities, governmental charges and levies before the same shall become delinquent for a period of more than thirty (30) days or which are delinquent for a period of more than thirty (30) days and (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.05. Maintenance of Properties; Insurance. Each Borrower shall, and shall cause each of its Subsidiaries to, (a) maintain all tangible property material to the conduct of its business in good working order and condition, ordinary wear, tear, casualty, condemnation and dispositions permitted under Section 6.04 excepted, and (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by similarly sized companies engaged in the same or similar businesses operating in the same or similar locations including any flood insurance required by Section 3.15. Borrowers will furnish to Administrative Agent, upon request of Administrative Agent, information in reasonable detail as to the insurance so maintained. Subject to Section 5.16, each general liability insurance policy shall name Administrative Agent as additional insured. Subject to the terms of any Intercreditor Agreements and Section 5.16, each insurance policy covering Collateral shall name Administrative Agent as lender’s loss payee and shall provide that such policy will not be cancelled without 30 days (10 days solely with respect to cancellation for nonpayment of premium) (or such shorter period as reasonably acceptable to Fifth Star) prior written notice to Administrative Agent. Each Borrower shall use commercially reasonable efforts to cause each insurance policy covering Collateral to provide for 30 days written notice to Administrative Agent prior to any material changes to such policy.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 5.06. Books and Records; Inspection Rights.

(a) Each Borrower shall, and shall cause each of its Subsidiaries to, keep proper books of record and account in which full, true, and correct entries in accordance with GAAP are made of all dealings and transactions in relation to its business and activities. Each Borrower will, and will cause each of its Subsidiaries to, permit any representatives (including consultants, auditors, accountants and advisors) designated by Fifth Star, upon reasonable prior notice if no Event of Default then exists during normal business hours, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its employees (provided an authorized representative of Borrowers shall be allowed, but not required, to be present during such discussion), independent accountants, or officers, all at such reasonable times and as often as reasonably requested. Each Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by Fifth Star (including any consultants, accountants, collateral auditors and appraisers) to conduct inspections, audits, verifications, and appraisals of the Collateral at such times and intervals as reasonably designated by Fifth Star.

(b) Borrowers shall, upon the request of Fifth Star, hold a conference call once each Fiscal Quarter to which Fifth Star shall be invited, in each case at such time as may be agreed to by Borrowers and Fifth Star.

SECTION 5.07. Compliance with Laws. Each Borrower shall, and shall cause each of its Subsidiaries to, comply with all laws, rules, regulations, and orders of any Governmental Authority applicable to it or its property (including, from and after the Petition Date, without limitation, the Bankruptcy Code, the DIP Order and any other order of the Bankruptcy Court), except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Borrowers will maintain in effect internal controls, and upon the written request of Fifth Star, will use best efforts to promptly adopt and maintain policies and procedures reasonably designed to promote compliance by the Borrowers, their Subsidiaries and their respective directors, officers, employees and agents with applicable Anti-Terrorism Laws, Anti-Corruption Laws and Sanctions.

SECTION 5.08. Certain Obligations Respecting Subsidiaries. As set forth in Section 6.03, the Borrowers shall not have, form or acquire any Subsidiaries (other than the Subsidiaries set forth on Schedule 3.14 as in effect on the Effective Date). However, if any new Subsidiary is so formed or acquired in contravention of the foregoing, Borrowers shall take such action, and shall cause each of their Subsidiaries to take such action, from time to time as shall be necessary to ensure that all Subsidiaries are “Subsidiary Guarantors” hereunder. Without limiting the generality of the foregoing, in the event .that Borrowers or any of their Subsidiaries shall form or acquire any new Subsidiary, Borrowers shall, and shall cause each of their Subsidiaries to, within 5 days (or such longer period as Fifth Star may agree) after such formation or acquisition, take the following actions:

(a) such Subsidiary will become a “Subsidiary Guarantor” hereunder by executing and delivering a Guaranty Agreement (or joinder thereto), and become a “Grantor” under the Security Agreement by executing and delivering a supplement to the Security Agreement;

(b) Borrowers shall furnish to Fifth Star an updated Schedule 3.14 with respect to such Subsidiary, in form and detail reasonably satisfactory to Fifth Star;

(c) subject to the Intercreditor Agreements, Borrowers shall cause such Subsidiary (or any Guarantor that is the owner of the shares or other Equity Interests of such Subsidiary, as applicable) to take such action (including delivering certificates evidencing such Equity Interests, delivering such Uniform Commercial Code financing statements, and executing and delivering security agreements for filing and recording in the United States Patent and Trademark Office and the United States Copyright Office) as shall be necessary or advisable in the opinion of Administrative Agent, and in form and substance reasonably satisfactory to Fifth Star, to create and perfect valid and enforceable first-priority Liens, subject to no other Liens except for Permitted Encumbrances, on the Collateral of such Subsidiary and all of the Equity Interests in such Subsidiary to the extent consisting Collateral as collateral security for the Obligations; and

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(d) Borrowers shall cause such Subsidiary to deliver such proof of corporate action, incumbency of officers, customary opinions of counsel, “Know your customer” information and other documents as is consistent with those delivered by each Borrower pursuant to Section 4.01 on the Effective Date, in each case, as Fifth Star shall have reasonably requested.

SECTION 5.09. Further Assurances.

(a) General Further Assurances. Subject to the terms of the Security Documents and (if the Borrowers have filed Bankruptcy Cases) the DIP Order, Borrowers shall, and shall cause each Guarantor to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents), which Fifth Star may reasonably request, to effectuate the transactions contemplated by the Loan Documents or, to grant, preserve, protect or perfect the Liens created or intended to be created by the Security Documents and DIP Orders (if applicable) or the validity or priority of any such Lien, all at the expense of Borrowers.

(b) Real Property. Borrowers shall, no later than 30 days after the acquisition of any owned real property (or such longer period as Fifth Star shall agree to in writing in its sole discretion), cause such owned real property to be subjected to a Lien securing the Obligations and shall take, and cause the other Borrowers to take, such actions as are necessary or reasonably requested by Fifth Star to grant and perfect such Liens and deliver such other documents (including the delivery of such mortgages, title insurance commitments, exception documents, surveys, flood hazard determination certificates (and related Borrower notices), evidence of flood insurance (if applicable), environmental indemnity agreements, environmental assessments, opinions of counsel and other documents, in each case, as may be requested by Administrative Agent), all at the expense of the Borrowers.

(c) Further Assurances Following Division of an Borrower. Subject to the terms of the Security Documents and (if the Borrowers have filed Bankruptcy Cases) the DIP Order, Borrowers shall cause each Subsidiary resulting from a division of an Borrower to execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents), which may be required under any applicable law, or which Fifth Star may reasonably request, to effectuate the transactions contemplated by the Loan Documents or to grant, preserve, protect or perfect the Liens created or intended to be created by the Security Documents or the validity or priority of any such Lien, all at the expense of Borrowers.

SECTION 5.10. Cash Management Systems. Subject to the terms and conditions of the Intercreditor Agreements, Section 5.16 and (if applicable) the DIP Order, each Borrower shall cause each of its Deposit Accounts (other than (a) any Deposit Account that is a zero balance account, (b) any Deposit Account that is a payroll or other employee wage or benefit account, tax account, including any withholding tax, sales tax or tax trust account, or escrow, fiduciary or trust accounts, so long as Borrowers and their Subsidiaries do not deposit or maintain funds in such payroll accounts or tax accounts in excess of amounts necessary to satisfy current payroll liabilities, payroll taxes or other wage and benefit payments, and (c) any Deposit Account that Administrative Agent determines is not material) to be a Controlled Account; provided that in the case of any Deposit Accounts opened or acquired after the Effective Date, such requirement shall not apply until 10 days (or such longer period agreed to by the Administrative Agent) from the date such Deposit Account is opened or acquired by an Borrower (or the Person that owns such Deposit Account becomes an Borrower).

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 5.11. Approved Budget.

(a) The use of Loans and other credit extensions by Borrowers under this Agreement and the other Loan Documents shall be consistent with the Approved Budget (subject to variances permitted under Section 5.11(b)). The initial Approved Budget shall be in the form attached hereto as Exhibit 3.26 for the first eight (8) week period from the Effective Date, and such initial Approved Budget shall be approved by, and in form and substance reasonably satisfactory to Fifth Star (it being acknowledged and agreed that the initial Approved Budget attached hereto as Exhibit 3.26 is approved by and reasonably satisfactory to Fifth Star). Following the Effective Date, the Borrowers shall deliver an updated budget to Fifth Star (i) on the Thursday of every fourth calendar week thereafter and (ii) upon the occurrence of a Toggle Event. Any amendments, supplements, or modifications to the Approved Budget and any updated budgets shall be subject to the prior written approval of Fifth Star prior to the implementation thereof; provided that in the event Fifth Star on the one hand, and the Borrowers, on the other hand, cannot agree as to an updated, modified or supplemented budget, the prior Approved Budget shall continue in effect, with weekly details for any periods after the initial 8-week period to be derived in a manner reasonably satisfactory to Fifth Star from the cash flow forecasts prepared by Borrowers; provided, further, that if an updated cash flow forecast is not approved by Fifth Star, the most recently Approved Budget cash flow forecast shall remain the Approved Budget (but, for the avoidance of doubt, shall not satisfy the condition set forth in Section 4.03(d)). Each Approved Budget delivered to Fifth Star shall be accompanied by such supporting documentation as reasonably requested by Fifth Star. Each Approved Budget shall be prepared in good faith, with reasonable due care and based upon assumptions which the Borrowers believe to be reasonable at the time of delivery thereof. To the extent any such updated Approved Budget is approved pursuant to this Section 5.11(a), the line item amounts set forth therein shall be used to calculate the projected line items commencing with the week in which such updated Approved Budget is approved by Fifth Star, as applicable and for subsequent weeks set forth therein, and any prior weeks tested as part of any then applicable Budget Period shall be calculated using the projected line items set forth in the previously Approved Budget in which such prior weeks were first forecasted.

(b) Commencing with the period from the Effective Date through the first Friday thereafter and each weekly period ended on a Friday thereafter, Borrowers shall not permit any of (A) cash receipts or (B) aggregate cash disbursements (excluding debtor and lender professional fees) for such period to vary by more than 10% from the Approved Budget for the applicable period set forth in the definition of “Approved Budget Variance Report”; provided that nothing contained in any Approved Budget shall be construed as a limitation on the Borrowers’ professional fees or the allowance thereof in Bankruptcy Cases.

(c) The Administrative Agent and the Lenders (i) may assume that the Borrowers will comply with the Approved Budget, (ii) shall have no duty to monitor such compliance and (iii) shall not be obligated to pay (directly or indirectly from the Collateral or otherwise) any unpaid expenses incurred or authorized to be incurred pursuant to any Approved Budget. The line items in the Approved Budget for payment of interest, expenses and other amounts to the Administrative Agent and the Lenders are estimates only, and Borrowers remain obligated to pay any and all Obligations in accordance with the terms of the Loan Documents and the applicable DIP Order regardless of whether such amounts exceed such estimates. Nothing in any Approved Budget shall constitute an amendment or other modification of any Loan Document or any of the borrowing restrictions or other lending limits set forth therein.

SECTION 5.12. Agreement to Deliver Security Documents. Subject to the terms, conditions and limitation of the Loan Documents, the Borrowers shall (a) cause all of the Collateral (including, without limitation, all owned and leased real and personal property and assets of each Borrower, but not including any Excluded Property and except to the extent not required by the Security Documents) to be subject at all times to senior priority, perfected Liens (subject to Permitted Encumbrances) in favor of the Administrative Agent to secure the Obligations pursuant to the terms and conditions, and subject to the priorities, set forth herein and (x) in the event that the Borrowers have not filed Bankruptcy Cases, in the Intercreditor Agreements and (y) if the Borrowers have filed Bankruptcy Cases, in the Interim DIP Order and the Final DIP Order, as applicable, and (b) deliver, to the extent reasonably requested by any Fifth Star, security agreements, pledge agreements, recordations, filings, documents, mortgages, deeds of trust and other agreements and appropriate UCC-1 financing statements, in each case as expressly required by the terms of this Agreement and the Security Documents, in form and substance reasonably satisfactory to Fifth Star.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 5.13. Milestones. The Borrowers shall ensure that each of the milestones set forth below (collectively, the “Milestones”) is achieved in accordance with the applicable timing referred to below (or by such later time as approved in writing by Fifth Star):

(a) By no later than 11:59 p.m. New York City time on December 19, 2023, commence solicitation of the Prepackaged Plan;

(b) By no later than 11:59 p.m. New York City time on December 26, 2023, commence the Bankruptcy Cases in the Bankruptcy Court (the “Petition Date Deadline”);

(d) By no later than three (3) days following the Petition Date, the Bankruptcy Court shall have entered the Interim DIP Order and shall have scheduled a confirmation hearing to consider the entry of the Confirmation Order on a date that is not later than forty (40) days following the Petition Date;

(e) By no later than twenty-one (21) days following the Petition Date, solicitation of the Prepackaged Plan shall have ended (the “Voting Deadline”);

(f) By no later than twenty-eight (28) days following the Petition Date, the Bankruptcy Court shall have (i) entered Final DIP Order and (ii) entered an order approving the Sponsor Protections, which order shall be in form and substance acceptable to the Plan Sponsor;

(g) By no later than forty (40) days following the Petition Date, the Bankruptcy Court shall have entered the Confirmation Order; and

(h) By no later than fourteen (14) days following entry of the Confirmation Order, the Prepackaged Plan shall become effective in accordance with its terms, provided, however that the Borrowers agree to use reasonable efforts to seek an order shortening such fourteen day period.

SECTION 5.14. Weekly Meetings. The Borrowers shall ensure that their advisors shall conduct and participate in weekly status calls or meetings with Fifth Star (and its advisors) no earlier than 2:00 p.m. New York City time on Thursday of any calendar week to discuss (i) the Approved Budget or the Approved Budget Variance Reports and/or any other reports or information delivered pursuant to Section 5.01 or Section 5.11 or otherwise, (ii) the financial operations and performance of the Borrowers’ business, and (iii) such other matters relating to the Borrowers as the New Bridge Lender or New Money DIP Lender, as applicable (or its agents or advisors) shall reasonably request (subject to limitations on confidentiality arrangements and/or to protect attorney-client privilege).

SECTION 5.15. Deposit Accounts. If the Borrowers shall elect to close any Deposit Accounts that existed on the Effective Date (all of which Deposit Accounts existing on the Effective Date are identified on Schedule 5.15) or establish or otherwise acquire any new Deposit Accounts, then the Borrowers shall reasonably promptly provide notice to the Administrative Agent of such election. From and after the Petition Date, upon entry of the Interim DIP Order and the Cash Management Order (and except as otherwise provided in the Cash Management Order or the Interim DIP Order), Borrowers shall, and shall cause each Guarantor to, comply with the terms of the Cash Management Order and the DIP Order in all material respects.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 5.16. Post-Closing Deliverables. Borrowers shall deliver to Fifth Star all documents set forth below in this Section 5.16 by the deadlines set forth herein; it being understood that, notwithstanding anything else set forth in this Agreement or the other Loan Documents to the contrary, such documents shall not be required to be delivered prior to such applicable deadline:

(a) By no later than December 20, 2023 (or such later date as may be agreed by Fifth Star in its sole discretion), (i) evidence that all insurance (including flood insurance to the extent applicable) required to be maintained under this Agreement and the Security Documents has been obtained and is in effect, together with the certificates of insurance, naming Administrative Agent, on behalf of the Lenders, as an additional insured and a lender’s loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Borrowers that constitute Collateral and all endorsements thereto required under this Agreement and the Security Documents and (ii) a copy of the most recent insurance policies;

(b) By no later than five (5) days (or such later date as may be agreed by Fifth Star in its sole discretion) after any request of Fifth Star therefor from time to time, executed versions of any additional Intercreditor Agreements with other creditors of any Borrower as Fifth Star may request, in each case, in form and substance satisfactory to Fifth Star.

(c) By no later than ten (10) Business Days (or such later date as may be agreed by Fifth Star in its sole discretion) after any request of Fifth Star therefor from time to time, executed Control Agreements with respect to any Deposit Account of any Borrower.

(d) By no later than December 29, 2023 (or such later date as may be agreed by Fifth Star in its sole discretion), the Borrowers shall have provided evidence satisfactory to Fifth Star that the Trademarks currently registered in the name of “Onyx Enterprises Int’l Corp.” (as indicated on Schedule 7 to the Pledge and Security Agreement) are updated to be registered in the current name of the applicable Borrower (unless waived by Fifth Star with respect to any such Trademarks).

(e) By no later than December 21, 2023 (or such later date as may be agreed by Fifth Star in its sole discretion), the Borrowers shall have provided satisfactory to Fifth Star that the Borrowers have opened a segregated deposit account at Wells Fargo Bank, N.A. that is not subject to any Liens (other than Liens set forth in clauses (f) and (g) of the definition of Permitted Encumbrances) into which funds will be disbursed from the Funding Account in accordance with the terms hereof.

SECTION 5.17. Sale Milestones. Upon the occurrence of a Toggle Event, at the election of the Plan Sponsor (in its sole discretion without need for Bankruptcy Court approval), within two (2) Business Days of such election, the Borrowers shall file a motion seeking expedited approval of bidding procedures in a form acceptable to the Plan Sponsor, including the approval of bid protections in favor of Fifth Star as stalking horse bidder, which bid protections shall include (i) a break-fee equal to 3% of the purchase price submitted by Fifth Star, (ii) $750,000 in expense reimbursement for Fifth Star as stalking horse bidder, and (iii) a minimum overbid of no less than $500,000.

Article VI NEGATIVE COVENANTS

So long as any New Term Loan Commitment is outstanding and thereafter until all Obligations are Fully Satisfied, each Borrower covenants and agrees with Administrative Agent and the Lenders that:

SECTION 6.01. Indebtedness. No Borrower shall, nor shall it permit any of its Subsidiaries to, create, incur, assume, or permit to exist any Indebtedness, except:

(a) Indebtedness under this Agreement and the other Loan Documents;

(b) the Indebtedness existing on the Effective Date and described on Schedule 6.01;

(d) Indebtedness consisting of (i) Guarantees arising with respect to customary indemnification obligations to purchasers in connection with Dispositions permitted under clauses (a), (c) and (g) of Section 6.04; and (ii) Guarantees with respect to Indebtedness of any Company, to the extent that the Person that is obligated under such Guarantee could have incurred such underlying Indebtedness pursuant to this Agreement;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(e) Indebtedness incurred in the Ordinary Course of Business in respect of employee severance and employment agreements, workers’ compensation claims, unemployment or other insurance or self-insurance obligations, health, disability or other benefits to employees or former employees and their families;

(f) Indebtedness owed to any Person providing property, casualty, liability, or other insurance to the Company or any of its Subsidiaries, so long as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the year in which such Indebtedness is incurred and such Indebtedness is outstanding only during such year;

(g) endorsements of instruments or other payment items for deposit;

(h) customer deposits and advance payments received in the Ordinary Course of Business from customers for goods purchased; and

(i) any other Indebtedness expressly contemplated to be incurred as Indebtedness by the Approved Budget (subject to variances permitted under Section 5.11(b)).

SECTION 6.02. Liens. No Borrower shall, nor shall it permit any of its Subsidiaries to, create, incur, assume, or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, except for Permitted Encumbrances.

SECTION 6.03. Fundamental Changes; Lines of Business; Subsidiaries.

(a) No Borrower shall, nor shall it permit any of its Subsidiaries to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise Dispose of (in one transaction or in a series of transactions) all or substantially all of its assets (in each case, whether now owned or hereafter acquired), or liquidate, wind up, or dissolve, except that Borrowers may sell, transfer, lease or otherwise Dispose of their assets as permitted pursuant to Section 6.04; provided that, in each case, at the time thereof and immediately after giving effect thereto, no Event of Default shall have occurred and be continuing.

(b) No Borrower shall, nor shall it permit any of its Subsidiaries to, engage in any business other than businesses of the type conducted by Borrowers on the Effective Date.

(c) The Borrowers shall not have, form or acquire any Subsidiaries (other than the Subsidiaries set forth on Schedule 3.14 as in effect on the Effective Date).

SECTION 6.04. Dispositions. No Borrower shall, nor shall it permit any of its Subsidiaries to, make any Disposition, except:

(a) Dispositions of equipment or inventory that is substantially worn, damaged, unnecessary, no longer used or useful, or obsolete in the Ordinary Course of Business;

(b) Dispositions or transactions expressly permitted by Section 6.05;

(d) licenses, sublicenses, leases, or subleases granted to third parties in the Ordinary Course of Business not interfering in any material respect with the business of Borrowers or any of their Subsidiaries;

(e) sales or exchanges of specific items of equipment solely to replace such equipment with replacement equipment of substantially equivalent or greater value;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(f) issuances of Equity Interests by a Subsidiary of Borrowers to a Borrower or any Subsidiary of Borrowers constituting an Investment permitted hereunder;

(g) the sale or discount, in each case without recourse, of accounts receivable arising in the Ordinary Course of Business, but only in connection with the compromise or collection thereof;

(h) any involuntary loss, damage or destruction of property;

(i) the making of Restricted Payments that are expressly permitted to be made pursuant to this Agreement; and

(j) the granting of Permitted Encumbrances.

SECTION 6.05. Investments. No Borrower shall, nor shall it permit any of its Subsidiaries to, make, or permit to remain outstanding any Investments except:

(a) the Investments outstanding on the Effective Date and identified on Schedule 3.14;

(b) Investments in cash and Cash Equivalents that are, to the extent required hereunder, subject to the Security Agreement and Control Agreements in favor of Administrative Agent;

(d) Investments consisting of deposits that constitute Permitted Encumbrances pursuant to clauses (c) and (d) of the definition thereof;

(e) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers;

(f) Investments constituting (i) accounts receivable arising, (ii) trade debt granted, or (iii) deposits made by Borrowers or a Subsidiary in connection with the purchase price of goods or services, in each case in the Ordinary Course of Business;

(g) any Guarantee of, or assumption of Indebtedness of, any other Person in either case to the extent the Person incurring such Guarantee or assuming such Indebtedness would have been permitted to incur the underlying Indebtedness under Section 6.01;

(h) Investments in negotiable instruments deposited or to be deposited for collection in the Ordinary Course of Business; and

(i) any Investment expressly contemplated to be made as an Investment by the Approved Budget (subject to variances permitted under Section 5.11(b)).

For purposes of this Section 6.05 the aggregate amount of an Investment at any time shall be deemed to be equal to (i) the aggregate amount of cash, together with the aggregate fair market value of property, loaned, advanced, contributed, transferred or otherwise invested that gives rise to such Investment minus (ii) the aggregate amount of distributions or other repayments received in cash in respect of such Investment, and the refund of capital with respect to, and the payment of interest or dividends on, the original principal amount of any such Investment. The amount of an Investment shall not in any event be reduced by reason of any write-off of such Investment nor increased by any increase in the amount of earnings retained in the Person in which such Investment is made or by any increase in the value of such Investment.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 6.06. Restricted Payments. No Borrower shall, nor shall it permit any of its Subsidiaries to, declare or make, directly or indirectly, any Restricted Payment, other than Restricted Payments by a Subsidiary to the Company.

SECTION 6.07. Transactions with Affiliates. No Borrower shall, nor shall it permit any of its Subsidiaries to, sell, lease or otherwise transfer any assets to, or purchase, lease or otherwise acquire any assets from, or otherwise engage in any other transactions with, any of its Affiliates, except the Transactions and the Existing Bridge Loans.

SECTION 6.08. Restrictive Agreements. No Borrower shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Borrower or any Subsidiary to create, incur or permit to exist any Lien upon, or to transfer to another Borrower, any of its assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any Equity Interests it has issued or to make or repay loans or advances to Borrowers or any other Subsidiary or to Guarantee Indebtedness of Borrowers or any other Subsidiary, or invest in any Borrower or any other Subsidiary (any such agreement or arrangement, a “Restrictive Agreement”); provided that:

(i) the foregoing shall not apply to (A) restrictions and conditions imposed by law or by the Loan Documents, (B) restrictions and conditions existing on the Effective Date identified on Schedule 6.08 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), and (C) any restrictions and conditions expressly contemplated by the Approved Budget (subject to variances permitted under Section 5.11(b)); and

(ii) the foregoing shall not apply to (A) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property securing such Indebtedness and (B) customary provisions in leases, licenses and other contracts entered into in the Ordinary Course of Business restricting the assignment thereof, or the transfer of or creation of Liens on assets subject thereto.

SECTION 6.09. Modifications of Certain Documents. No Borrower shall, nor shall it permit any of the Subsidiaries to, consent to any modification, supplement or waiver of any of the provisions of (a) any Material Contract or (b) its Organizational Documents, without the prior written consent of Fifth Star, other than in each case, modifications, supplements or waivers that are not materially adverse to Secured Parties and do not in any way limit, impair or adversely affect such Borrower’s ability to pay its Obligations under the Loan Documents or otherwise limit, impair or adversely affect the creation, perfection or priority of any Lien granted by such Borrower pursuant to any Loan Document, the ability of such Borrower to perform its other non-payment obligations under any Loan Document, or the ability of the Secured Parties to enforce any rights or remedies under any Loan Document.

SECTION 6.10. Accounting Changes. No Borrower shall, nor shall it permit any of its Subsidiaries to, (a) make any significant change in accounting treatment or reporting practices, except as required or permitted by GAAP, or (b) change its Fiscal Year end date or the method for determining Fiscal Quarters of any Borrower or its Subsidiaries without consent of Administrative Agent.

SECTION 6.11. Hedging Agreements. No Borrower shall, nor shall it permit any of its Subsidiaries to, enter into any Hedging Agreement without the consent of Fifth Star.

SECTION 6.12. Sale Lease Back. No Borrower shall, nor shall it permit any of its Subsidiaries to, enter into any arrangement, directly or indirectly, with any Person whereby it shall Dispose of any property, whether now owned or hereafter acquired and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose as the property being Disposed of.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 6.13. Use of Proceeds. No Borrower shall, nor shall it permit any of its Subsidiaries to use the proceeds of the Loans for any purpose other than as is consistent with the Approved Budget (subject to variances permitted under Section 5.11(b)) and, if the Borrowers have filed Bankruptcy Cases, the DIP Order and then only (a) to pay fees, interest, payments and expenses associated with this Agreement and the other Loan Documents, (b) if the Borrowers have filed Bankruptcy Cases, to fund the cost of administering the Bankruptcy Cases (including, without limitation, professional fees and expenses), (c) if the Borrowers have filed Bankruptcy Cases, to finance other Prepetition and pre-filing expenses that are approved by the Bankruptcy Court, (d) for working capital and general corporate purposes, (e) if the Borrowers have filed Bankruptcy Cases, adequate protection payments and the funding of the Carve-Out to the extent set forth in the DIP Order, (f) to repay the Prepetition Senior Secured Obligations, subject to the prior written consent of Fifth Star, (g) in the case of each Toggle Draw, for working capital purposes of the Borrowers, and (h) to fund the solicitation process with respect to the Prepackaged Plan, in each case to the extent set forth in the Approved Budget (subject to variances permitted under Section 5.11(b)). In addition, the proceeds of the Roll-Up DIP Loans shall (and shall be deemed to) be used to refinance and replace on a dollar-for-dollar basis the applicable outstanding Bridge Loans. Notwithstanding the foregoing, (x) no portion of the Loans or other credit extensions under this Agreement and the other Loan Documents may be used to pay interest on the Existing Bridge Loans and (y) if the Borrowers have filed Bankruptcy Cases, no portion of the proceeds of the Loans or other credit extensions under this Agreement and the other Loan Documents or the Carve-Out, any Cash Collateral or any other Collateral 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, including, without limitation, any proceeding to determine (x) the amount, validity, perfection or priority of any security interest in favor of the Secured Parties or Prepetition Senior Secured Parties, including the Administrative Agent and the New Bridge Lender or (y) the amount, validity or enforceability of the obligations of the Borrowers under the Loans or any guarantees thereof, or challenges (whether in accordance with the DIP Order or otherwise) against any of the Secured Parties, Prepetition Senior Secured Parties, the Administrative Agent or the Lenders, in respect of the Prepetition Senior Secured Obligations or any of the Liens securing such Prepetition Senior Secured Obligations, or to hinder, limit, delay or contest any of the Secured Parties’ or Prepetition Senior Secured Parties’ enforcement or realization upon any of the Collateral; provided that, within the challenge period set forth in the DIP Order, up to $20,000 may be used by an official committee of unsecured creditors, if any, solely in connection with the investigation of (and not the litigation or prosecution of) claims or causes of action against the Prepetition Senior Secured Parties solely concerning the validity, enforceability, perfection, priority or extent of the Prepetition Senior Secured Obligations and the liens securing such Prepetition Obligations in accordance with the terms of the DIP Order. Borrowers shall not (and shall procure that its Subsidiaries and its or their respective directors, officers and employees shall not) use the proceeds of the Loans directly or indirectly, for (1) the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any country or territory that is the subject of comprehensive country- or territory-wide Sanctions, or (2) in any other manner that would result in the violation of any Sanctions.

SECTION 6.14. Prepayments of Indebtedness. Unless pursuant to a bankruptcy order and the Approved Budget and in any case subject to Fifth Star’s prior express written consent, no Borrower nor any of its Subsidiaries shall purchase, redeem, retire, or otherwise acquire for value, or set apart any money for a sinking, defeasance, or other analogous fund for the purchase, redemption, retirement, or other acquisition of, or make any voluntary payment or prepayment of the principal of or interest on, or any other amount owing in respect of, any unsecured indebtedness or indebtedness which is expressly subordinated in right of payment to the Obligations.

Article VII [RESERVED].

Article VIII EVENTS OF DEFAULT; REMEDIES.

SECTION 8.01. Event of Default. If any of the following events (each such an event, an “Event of Default”) shall occur:

(a) Borrowers shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(b) Borrowers shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Section) payable under this Agreement or under any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) or more Business Days;

(c) any information contained in any Compliance Certificate or Approved Budget Variance Report or any certification, representation, or warranty made or deemed made by or on behalf of any Borrower in or in connection with this Agreement or any other Loan Document or in any report, certificate, financial statement, or other document furnished pursuant to or in connection with this Agreement or any other Loan Document, shall prove to have been incorrect in any material respect when made or deemed made (unless any such certification, representation or warranty is qualified as to prove materiality or as to Material Adverse Effect, in which case such certification, representation and warranty shall to have been incorrect in any respect);

(d) any Borrower shall fail to observe or perform any covenant, condition or agreement contained in (i) Section 5.01 and such failure shall continue unremedied for a period of 5 or more Business Days, (ii) Section 5.10 or Section 5.14 and, in each case, such failure shall continue unremedied for a period of 10 or more Business Days, or (iii) Section 5.02, Section 5.03 (with respect to any Borrower’s existence), Section 5.05, Section 5.11, Section 5.12 Section 5.13, Section 5.15, Section 5.16, Section 5.17 or Article VI, or any Borrower shall default in the performance of any of its material obligations contained in any of the Security Documents;

(e) any Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b), or (d) of this Section) or any other Loan Document and such failure shall continue unremedied for a period of 30 or more days;

(f) except as otherwise expressly provided herein, and if the Borrowers have not filed the Bankruptcy Cases, any Borrower shall fail to make any payment (including of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable (after giving effect to any applicable notice requirement, grace period or forbearance);

(g) any event or condition occurs that results in any Material Indebtedness (other than the Obligations) becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any such Material Indebtedness or any trustee or agent on its or their behalf to cause any such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity (after giving effect to any applicable notice requirement or grace period); provided that this clause (g) shall not apply to (i) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property securing such Indebtedness in a transaction permitted hereunder and (if applicable) permitted by the DIP Order and (ii) if the Borrowers have filed Bankruptcy Cases, any defaults that occur solely as a result of the commencement of the Bankruptcy Cases;

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency or other relief in respect of any Borrower or any of its Subsidiaries or debts, or of a substantial part of its assets, under any Debtor Relief Laws or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator, liquidator, rehabilitator, or similar official for any Borrower or its Subsidiary or for a substantial part of its or their assets, or an order or decree approving or ordering any of the foregoing shall be entered and, in any such case, such proceeding or petition shall continue undismissed or unstayed or has not been converted to a voluntary chapter 11 proceeding on or prior to the Petition Date Milestone;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(i) any Borrower or its Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, or other relief under any Debtor Relief Laws now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Section, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator, liquidator, rehabilitator, or similar official for any Borrower or its Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any action for the purpose of effecting any of the foregoing; provided, however, that it shall not be an Event of Default if the Borrowers or their Subsidiaries file the Bankruptcy Cases and the Interim DIP Order has been approved and entered within three (3) Business Days after the Petition Date and has not, at such time been (x) stayed, vacated, reversed or rescinded, and any appeal of such order shall not have been timely filed and a stay of such order pending appeal shall not be presently effective or (y) without the prior written consent of Fifth Star, revised, amended or modified;

(j) there is entered against any Borrower or its Subsidiary (i) one or more judgments or orders for the payment of money in an aggregate amount in excess of $50,000 (exclusive of amounts covered by insurance provided by a financially sound insurance company and for which such insurer has accepted liability) or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, with respect to which either (A) the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed (including pursuant to the Bankruptcy Code) or (B) any action (if the Borrowers have filed Bankruptcy Cases, that is not in violation of the automatic stay applicable under Section 362 of the Bankruptcy Code) shall be legally taken by a judgment creditor to attach or levy upon any assets of any Borrower or its Subsidiary or otherwise enforce any such judgment;

(k) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, would reasonably be expected to result in liability of any Borrower and its Subsidiaries in an aggregate amount that could have a Material Adverse Effect;

(l) a Change in Control shall occur;

(m) the Liens created by the DIP Order (if the Borrowers have filed Bankruptcy Cases) and the Security Documents shall at any time not constitute valid and perfected Liens (with the priorities as set forth herein) on the collateral intended to be covered thereby (other than any Collateral released under Section 9.10) in favor of the Administrative Agent, free and clear of all other Liens (other than Permitted Encumbrances), or any of the Loan Documents shall for whatever reason be terminated or cease to be in full force and effect, or enforceability thereof shall be contested by any Borrower, or any Borrower or any Person acting by or on behalf of any Borrower shall deny or disaffirm any Borrower’s obligations under Section 10.23;

(n) any Borrower or any Subsidiary thereof voluntarily or involuntarily dissolves or is dissolved, liquidates or is liquidated or files a motion with the Bankruptcy Court seeking (or supports or consents to any Person seeking) authorization to so dissolve or liquidate (including, without limitation, under any Debtor Relief Law);

(o) any of the Borrowers pursues a sale under section 363 of the Bankruptcy Code or otherwise for a material portion of ownership or the business of such Borrower other than pursuant to a 363 Sale with the Plan Sponsor serving as the stalking horse bidder, or any order is entered by the Bankruptcy Court approving a sale under section 363 of the Bankruptcy Code or otherwise, other than a 363 Sale, without the prior written consent of Fifth Star;

(p) if the Borrowers have filed any of the Bankruptcy Cases, any of the following occurs:

(i) an order with respect to any of the Bankruptcy Cases shall be entered by the Bankruptcy Court (or any of the Borrowers shall file an application or motion or pleading for entry of or in support of an order) (i) appointing a Chapter 7 trustee, or a Chapter 11 trustee under section 1104 of the Bankruptcy Code, (ii) appointing an examiner (other than a fee examiner) or a receiver with enlarged powers (beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code) relating to the operation of the business under section 1106(b) of the Bankruptcy Code, (iii) dismissing any of the Bankruptcy Cases or converting any of the Bankruptcy Cases under section 1112 of the Bankruptcy Code or otherwise to a case under chapter 7 of the Bankruptcy Code or (iv) providing for the disposition without the New Money DIP Lender’s prior written consent of all or any material portion of any of the assets of any Borrower or any other Subsidiary of the Borrowers, any Equity Interest of any Borrower or any other Subsidiary of the Borrowers, or any material business line of the Borrowers and their Subsidiaries either through a sale under section 363 of the Bankruptcy Code, through a confirmed plan of reorganization in the Bankruptcy Cases or otherwise except (I) as permitted by this Agreement (subject to any mandatory prepayment obligations) and the DIP Order; or (II) with the prior written consent of Fifth Star; or (III) pursuant to a transaction that provides for the Full Satisfaction of all Obligations and the payment in full in cash of all obligations under this Agreement;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(ii) any Borrower or any Subsidiary of the Borrowers fails to comply in all respects with any provision of the DIP Order;

(iii) the period pursuant to section 1121 of the Bankruptcy Code during which the Borrowers have the exclusive right to file a plan of reorganization or solicit acceptance thereof expires or an order shall have been entered by the Bankruptcy Court terminating or reducing such period, unless such termination or reduction is consented to by Fifth Star (or in each case any of the Borrowers shall seek to, or shall support (whether by way of motion or other pleadings filed with the Bankruptcy Court or any other writing executed by any Borrower) any other Person’s motion to, have such an order entered, in each case unless Fifth Star consents to such action);

(iv) an order with respect to any of the Bankruptcy Cases shall be entered by the Bankruptcy Court, or any of the Borrowers or any other Subsidiary of Borrowers shall have filed or supported a motion or other pleading for entry of an order, (i) to revoke, reverse, stay, vacate, terminate, extend, rescind or seek reconsideration of any provision of the Cash Management Order, (ii) to revoke, reverse, stay, vacate, terminate, modify, supplement or amend any provision of the Interim DIP Order, the Final DIP Order or this Agreement without the prior written consent of Fifth Star, or (iii) to permit any administrative expense or any claim (now existing or hereafter arising, of any kind or nature whatsoever) to have administrative priority as to any of the Borrowers, equal or superior to the priority of the Lenders in respect of the Obligations, subject only to the Carve-Out, the Prepetition Senior Secured Obligations, and the adequate protection claims granted to holders of Prepetition Senior Secured Obligations pursuant to the DIP Order, or (iv) to grant or permit the grant of a Lien on the Collateral (other than a Permitted Encumbrance), (v) to permit charging of any of the Collateral under section 506(c) of the Bankruptcy Code against the Secured Parties or the Prepetition Senior Secured Parties, (vi) without the prior written consent of the New Money DIP Lender, to authorize the use of Cash Collateral under Section 363 of the Bankruptcy Code or to obtain financing for any of the Borrowers under Section 364 of the Bankruptcy Code (other than the transactions contemplated by the Loan Documents or any such financing that provides for the payment in full in cash of the Obligations); or (vii) to take any other action or actions materially adverse to any of the Secured Parties or their rights and remedies hereunder or under any of the Loan Documents or the DIP Order, or any Secured Party’s interest in any of the Collateral;

(v) an order shall be entered by the Bankruptcy Court confirming a plan of reorganization or liquidation in any of the Bankruptcy Cases (or an order shall be entered by the Bankruptcy Court approving a disclosure statement related to such plan) other than an Acceptable Plan or a chapter 11 plan that contemplates the payment in full in cash of the Obligations and the Prepetition Senior Secured Obligations, or any of the Borrowers or any of their Subsidiaries shall file, propose, support, or fail to contest in good faith the filing or confirmation of such a plan;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(vi) the Bankruptcy Court shall enter an order or orders granting relief from the automatic stay applicable under section 362 of the Bankruptcy Code to a holder or holders of any Lien (other than a holder or holders of a Lien ranking senior in priority to the Liens securing the Loans) or a Lien on any part of the Collateral securing the Loans to permit foreclosure (or the granting of a deed in lieu of foreclosure or the like) on any such Collateral or the Equity Interests in any Borrower or any Subsidiary whose Equity Interest (or portion thereof) has been pledged as security for the Obligations (unless constituting a sale or other disposition permitted by Section 6.04) or permit any such third parties to exercise other remedies that would have a Material Adverse Effect);

(vii) any termination of the use of Cash Collateral pursuant to the DIP Order;

(viii) any material provision of the DIP Order shall for any reason cease to be valid or binding or enforceable against any of the Borrowers, or any of the Borrowers or any other Subsidiary of the Borrowers shall so state in writing; or any of the Borrowers or any other Subsidiary of Borrowers shall commence or join in any legal proceeding to contest in any manner that the DIP Order constitutes a valid and enforceable agreement, or to assert that it has no further obligation or liability under the DIP Order;

(ix) any of the Borrowers or any other Subsidiary of Borrowers shall seek to, join or support (whether by way of motion or other pleadings filed with the Bankruptcy Court or any other writing executed by any Borrower or by oral argument) any other person in seeking to: (i) contest or disallow in whole or in part any of the Obligations arising under this Agreement or any other Loan Document (or any such order is entered) or (ii) challenge the validity, enforceability or perfection of the Liens or security interests granted or confirmed herein or in the Interim DIP Order or the Final DIP Order and the other Security Documents in favor of the Secured Parties;

(x) any of Borrowers or any of their Subsidiaries shall make any payment (as adequate protection or otherwise), or application for authority to pay, on account of any claim or debt arising prior to the Petition Date other than payments expressly authorized by the Bankruptcy Court in the Interim DIP Order, the Final DIP Order or by any other orders entered by the Bankruptcy Court in amounts consistent with the Approved Budget (subject to variances permitted under Section 5.11(b));

(xi) if any Borrower is enjoined, restrained or in any way prevented by an order of a court of competent jurisdiction (other than an order of the Bankruptcy Court approved by the New Money DIP Lender) from continuing to conduct all or any material part of its business or affairs for a period exceeding five (5) consecutive Business Days;

(xii) any Borrower or any other Subsidiary of Borrowers shall consolidate or combine with any other Person except to the extent expressly permitted by Section 6.03 or pursuant to a confirmed Acceptable Plan; or

(xiii) the Bankruptcy Court does not approve in the Interim DIP Order or Final DIP Order, as applicable, or any determination is made by the Bankruptcy Court at any time, that it will not approve the “roll-up” of any of the Bridge Loans into Roll-Up DIP Loans under this Agreement in accordance with Section 2.01(b); or

(q) the occurrence of (a) Material Adverse Effect or (b) any riot, act of war or terrorism, epidemic or pandemic, insurrection, revolution, nuclear or natural disaster, catastrophe, or similar interruption that has a material adverse impact on the operations and/or financial condition of the Borrowers;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(r) the (i) death or incapacity of the Borrowers’ Chief Executive Officer who is not replaced within three (3) Business Days by a Chief Executive Officer approved by Fifth Star in writing or (ii) resignation or termination of employment of the Borrowers’ Chief Executive Officer;

(s) a Borrower, or any director, officer or employee thereof shall (a) have committed, been convicted of, pleaded no contest or nolo contendere to, or have had imposed an unadjudicated probation for any felony or crime, or (b) be under civil or criminal indictment or investigation, or be a defendant or respondent in, or the subject of an enforcement action, proceeding, lawsuit or investigation brought against it by any governmental authority with the authority to impose criminal penalties or by any self-regulatory organization with the authority to impose penalties;

(t) any Borrower or any Subsidiary shall fail to meet the Milestones set forth in Section 5.13(b) (Petition Date Deadline) or Section 5.13(d) (regarding entry of the Interim DIP Order), in each case as such Milestones may be extended with the consent of the Fifth Star; or

(u) any funds disbursed to a Borrower pursuant to a Funding Account Withdrawal Request are not used for the designated purpose set forth in such Funding Account Withdrawal Request and the applicable Approved Budget or otherwise remitted back to the Funding Account within one (1) Business Day after such disbursement;

then, in every such event (other than an event described in clause (h) or (i) of this Section 8.01), and at any time thereafter during the continuance of such event, Fifth Star may take any or all of the following actions, at the same or different times: (i) terminate the New Term Loan Commitments, and thereupon the New Term Loan Commitments and obligations shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder and under the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby waived by each Borrower, (iii) declare a Toggle Event and (iv) subject to the provisions of the DIP Order if the Bankruptcy Cases are filed, exercise on behalf of the Lenders all rights and remedies available to the Administrative Agent and the Lenders under the Loan Documents and applicable law; and, in case of any event described in clause (h) or (i) of this Section 8.01, the New Term Loan Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrowers accrued hereunder and under the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration, or other notice of any kind, all of which are hereby waived by each Borrower. In addition, if any Event of Default shall exist, Administrative Agent may foreclose or otherwise enforce any Lien granted to it (including any Lien granted in the DIP Order), for the benefit of the Secured Parties, to secure payment and performance of the Obligations in accordance with the terms of the Loan Documents and exercise any and all rights and remedies afforded by applicable law, by any of the Loan Documents, by equity, or otherwise, subject in to the terms of the DIP Order and any applicable Intercreditor Agreement. For the avoidance of doubt, if any Event of Default shall exist or occur, Fifth Star shall have the option, but not the obligation, in is sole discretion, to declare a Toggle Event; provided that, except in the case of an Event of Default under clause (q) of this Section 8.01, the declaration of a Toggle Event shall operate as a waiver of such Event of Default.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 8.02. Application of Payment.

(a) If the Bankruptcy Cases have not been filed or the Interim DIP Order has been entered at the time of such Application of Payments, then subject to the provisions of any Intercreditor Agreements, after the exercise of remedies provided for in Section 8.01 (or after the Loans have automatically become immediately due and payable and as set forth in the proviso to Section 8.01), or upon the consummation of the sale of all or substantially all of the Company’s assets or equity, payments and prepayments with respect to the Obligations made to the Administrative Agent, the Lenders or otherwise (including setoff rights) received by the Administrative Agent or any Lender (from realization on Collateral or otherwise) shall be distributed in the following order of priority:

(i) FIRST, to the fees, indemnities, expenses and other amounts (including attorneys’ fees and expenses), if any, payable to the Administrative Agent in its capacities as such;

(ii) SECOND, to the fees, indemnities and other amounts (other than principal and interest) payable to the New Bridge Lender (including attorneys’ fees and expenses) arising under the Loan Documents;

(iii) THIRD, to the payment of interest then due and payable on any outstanding New Bridge Loans;

(iv) FOURTH, to the payment of principal of the New Bridge Loans until each of the foregoing Obligations in respect of the New Bridge Loans are Fully Satisfied;

(v) FIFTH, to any other Obligations in respect of the New Bridge Loans not otherwise referred to in this Section; and

(vi) SIXTH, to the applicable Borrowers.

(b) If the Bankruptcy Cases have been filed and the Interim DIP Order has been entered at the time of such Application of Payments, then subject to the provisions of the DIP Order and any Intercreditor Agreements, after the exercise of remedies provided for in Section 8.01 (or after the Loans have automatically become immediately due and payable and as set forth in the proviso to Section 8.01), or upon the consummation of the sale of all or substantially all of the Company’s assets or equity, payments and prepayments with respect to the Obligations made to the Administrative Agent, the Lenders or otherwise (including setoff rights) received by the Administrative Agent or any Lender (from realization on Collateral or otherwise) shall be distributed in the following order of priority:

(i) FIRST, to the fees, indemnities, expenses and other amounts (including attorneys’ fees and expenses), if any, payable to the Administrative Agent in its capacities as such;

(ii) SECOND, to the fees, indemnities and other amounts (other than principal and interest) payable to the New Money DIP Lender (including attorneys’ fees and expenses) arising under the Loan Documents;

(iii) THIRD, to the payment of interest then due and payable on any outstanding New Money DIP Loans;

(iv) FOURTH, to the payment of principal of the New Money DIP Loans until each of the foregoing Obligations in respect of the New Money DIP Loans are Fully Satisfied;

(v) FIFTH, to any other Obligations in respect of the New Money DIP Loans not otherwise referred to in this Section;

(vi) SIXTH, to the fees, indemnities and other amounts (other than principal and interest) payable to the Tranche 1 Roll-Up DIP Lender (including attorneys’ fees and expenses) arising under the Loan Documents;

(vii) SEVENTH, to the payment of interest then due and payable on any outstanding Tranche 1 Roll-Up DIP Loans;

(viii) EIGHTH, to the payment of principal of the Tranche 1 Roll-Up DIP Loans until each of the foregoing Obligations in respect of the Tranche 1 Roll-Up DIP Loans are Fully Satisfied;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(ix) NINTH, to any other Obligations in respect of the Tranche 1 Roll-Up DIP Loans not otherwise referred to in this Section;

(x) TENTH, to the payment of interest then due and payable on any outstanding Tranche 2 Roll-Up DIP Loans and Tranche 3 Roll-Up DIP Loans, on a pro rata basis;

(xi) ELEVENTH on a pro rata basis, to the payment of principal of the Tranche 2 Roll-Up DIP Loans and Tranche 3 Roll-Up DIP Loans until each of the foregoing Obligations in respect of the Tranche 2 Roll-Up DIP Loans and Tranche 3 Roll-Up DIP Loans are Fully Satisfied;

(xii) TWELFTH, to any other Obligations in respect of the Tranche 2 Roll-Up DIP Loans and Tranche 3 Roll-Up DIP Loans not otherwise referred to in this Section; and

(xiii) THIRTEENTH, to the applicable Borrowers’ estates, or as the Bankruptcy Court may otherwise direct.

(c) The Administrative Agent shall have absolute discretion as to the time of application of any such proceeds, moneys, or balances in accordance with this Agreement. Upon any sale of Collateral by the Administrative Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the purchase money by the Administrative Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Administrative Agent or such officer or be answerable in any way for the misapplication thereof.

(d) Notwithstanding anything to the contrary herein, the enforcement of Liens or remedies with respect to the Collateral and the exercise of all other remedies provided for in this Agreement and the other Loan Documents, shall be subject to the provisions of the DIP Order (if applicable).

SECTION 8.03. Performance by Administrative Agent. If any Borrower shall fail to perform any covenant or agreement in accordance with the terms of the Loan Documents, if an Event of Default has occurred and is continuing, subject to the DIP Order (if applicable), the Administrative Agent may perform or attempt to perform such covenant or agreement on behalf of the applicable Borrower. In such event, Borrowers shall, at the request of Administrative Agent and subject to the DIP Order (if applicable), promptly pay any amount expended by Administrative Agent in connection with such performance or attempted performance to Administrative Agent, together with interest thereon at the interest rate provided for in Section 2.12(c) from and including the date of such expenditure to but excluding the date such expenditure is paid in full. Notwithstanding the foregoing, it is expressly agreed that neither Administrative Agent nor any Lender shall have any liability or responsibility for the performance of any obligation of any Borrower under any Loan Documents.

Article IX ADMINISTRATIVE AGENT

SECTION 9.01. Authorization and Action.

(a) Each of the Lenders hereby irrevocably appoints Administrative Agent to act on its behalf as administrative agent and collateral agent hereunder and under the other Loan Documents and authorizes Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article IX (other than Section 9.01) are solely for the benefit of Administrative Agent and the Lenders, and no Borrower has rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(b) Each of the Lenders hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Borrowers to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Administrative Agent, as collateral agent, and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Security Documents or the DIP Order, (or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article IX as if set forth in full herein with respect thereto. The Administrative Agent is authorized on behalf of all the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time to take any action with respect to any Collateral or the Loan Documents which may be necessary or advisable to perfect and maintain perfected the Liens upon any Collateral granted pursuant to any Security Document or the DIP Order.

SECTION 9.02. Administrative Agent and its Affiliates.

(a) The Person serving as Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender (as set forth herein) and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, own securities of, lend money to, act as the financial advisor or in any advisory capacity for and generally engage in any kind of business with Borrowers or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

(b) Each of the Lenders understands that the Administrative Agent, acting in its individual capacity, and its Affiliates (collectively, the “Agent’s Group”) may be engaged in a wide range of financial services and businesses (including investment management, financing, securities trading, corporate and investment banking and research) (such services and businesses are collectively referred to in this Article IX as “Activities”) and may engage in the Activities with or on behalf of one or more of the Borrowers or their respective Affiliates. Furthermore, the Agent’s Group may, in undertaking the Activities, engage in trading in financial products or undertake other investment businesses for its own account or on behalf of others (including the Borrowers and their Affiliates and including holding, for its own account or on behalf of others, equity, debt and similar positions in Borrowers or their Affiliates), including trading in or holding long, short or derivative positions in securities, loans, or other financial products of one or more of the Borrowers or their Affiliates. Each Lender understands and agree that in engaging in the Activities, the Agent’s Group may receive or otherwise obtain information concerning the Borrowers or their Affiliates (including information concerning the ability of the Borrowers to perform their respective obligations hereunder and under the other Loan Documents) which information may not be available to any of the Lenders that are not members of the Agent’s Group. Neither the Administrative Agent nor any other member of the Agent’s Group shall have any duty to disclose to any Lender or use on behalf of the Lenders, nor be liable for the failure to so disclose or use, any information whatsoever about or derived from the Activities or otherwise (including any information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any Borrower or any Affiliate of any Borrower) or to account for any revenue or profits obtained in connection with the Activities, except that Administrative Agent shall deliver or otherwise make available to each Lender such documents as are expressly required by any Loan Document to be transmitted by Administrative Agent to the Lenders.

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(c) Each Lender further understands that there may be situations where members of the Agent’s Group or their respective customers (including the Borrowers and their Affiliates) either now have or may in the future have interests or take actions that may conflict with the interests of any one or more of the Lenders (including the interests of the Lenders hereunder and under the other Loan Documents). Each Lender agrees that no member of the Agent’s Group is or shall be required to restrict its activities as a result of any Person serving as the Administrative Agent being a member of the Agent’s Group, and that each member of the Agent’s Group may undertake any Activities without further consultation with or notification of any Lender. None of (i) this Agreement nor any other Loan Document, (ii) the receipt by the Agent’s Group of information (including information concerning the ability of the Borrowers to perform their respective obligations hereunder and under the other Loan Documents), or (iii) any other matter, shall give rise to any fiduciary, equitable, or contractual duties (including any duty of trust or confidence) owing by the Administrative Agent or any member of the Agent’s Group to any Lender including any such duty that would prevent or restrict the Agent’s Group from acting on behalf of customers (including the Borrowers or their Affiliates) or for its own account.

SECTION 9.03. Duties. Neither the Administrative Agent nor Fifth Star in its capacity as a Lender shall have any duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, neither the Administrative Agent nor Fifth Star in its capacity as a Lender:

(a) shall be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b) shall have any duty to take any discretionary action or exercise any discretionary powers, and neither the Administrative Agent nor Fifth Star shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose such Person to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law; and

(c) shall, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, or shall be liable for the failure to disclose, any information relating to any Borrower or any of their respective Affiliates that is communicated to or obtained by any Person serving as Administrative Agent, Fifth Star or any of their respective Affiliates in any capacity.

SECTION 9.04. Reliance, Lender Representations, Etc.

(a) Neither the Administrative Agent nor Fifth Star in its capacity as a Lender shall be liable for any action taken or not taken by it in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. Neither the Administrative Agent nor Fifth Star in its capacity as a Lender shall be deemed to have knowledge of any Default unless and until written notice describing such Default is given to Administrative Agent by a Borrower, or a Lender. Neither the Administrative Agent nor Fifth Star in its capacity as a Lender shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Security Documents, or (v) the satisfaction of any condition set forth in Section 4 or elsewhere herein or therein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent or Fifth Star in its capacity as a Lender.

(b) The Administrative Agent and Fifth Star in its capacity as a Lender shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document, or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent and Fifth Star in its capacity as a Lender also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, Administrative Agent may presume that such condition is satisfactory to such Lender unless Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. Administrative Agent and Fifth Star in its capacity as a Lender may consult with legal counsel (who may be counsel for an Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

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(c) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and its Affiliates, and not, for the avoidance of doubt, to or for the benefit of Borrowers or any other Borrower, that at least one of the following is and will be true:

(i) such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans or the New Term Loan Commitments,

(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the New Term Loan Commitments and this Agreement,

(iii) (A) such Lender is an investment fund managed by a “qualified professional asset manager” (within the meaning of Part VI of PTE 84-14), (B) such qualified professional asset manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the New Term Loan Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the New Term Loan Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the New Term Loan Commitments and this Agreement, or

(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

(d) In addition, unless either (1) sub-clause (i) in the immediately preceding clause (c) is true with respect to a Lender or (2) a Lender has provided another representation, warranty and covenant in accordance with sub-clause (iv) in the immediately preceding clause (c), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and its Affiliates, and not, for the avoidance of doubt, to or for the benefit of Borrowers, that none of the Administrative Agent or any of its Affiliates is a fiduciary with respect to the assets of such Lender involved in such Lender’s entrance into, participation in, administration of and performance of the Loans, the New Term Loan Commitments and this Agreement (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related hereto or thereto.

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SECTION 9.05. Sub-Agents. Administrative Agent may perform any and all its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by Administrative Agent. Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers by or through their respective Related Parties. The Administrative Agent is authorized on behalf of all the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time to permit any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent to take any action with respect to any Collateral or the Loan Documents which may be necessary to perfect and maintain perfected the Liens upon any Collateral granted pursuant to any Security Document. The exculpatory provisions of this Article IX, as well as all other indemnity and expense reimbursement provisions of this Agreement (including, without limitation, Section 10.03), shall apply to any such sub-agent and to the Related Parties of such Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as though such co-agents, sub-agents and attorneys-in-fact were a “collateral agent” under the Loan Documents. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agent except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

SECTION 9.06. Resignation.

(a) The Administrative Agent may resign at any time by giving notice of its resignation to the Lenders and a Borrower. Upon receipt of any such notice of resignation, Fifth Star shall have the right to appoint a successor. If no successor shall have been so appointed by Fifth Star and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the New Money DIP Lender) (the “Resignation Effective Date”), then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

(b) With effect from the Resignation Effective Date (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (b) except for any indemnity payments owed to the retiring Administrative Agent, all payments, communications and determinations provided to be made by, to or through Administrative Agent shall instead be made by or to each Lender directly, until such time as the applicable Lenders appoint a successor Administrative Agent, as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Administrative Agent, as applicable (other than any rights to indemnity payments owed to the retiring Administrative Agent) and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrowers and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article IX and Section 10.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

SECTION 9.07. Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. In this regard, each Lender further acknowledges that Sidley Austin LLP is acting in this transaction as special counsel to Fifth Star only. Each other party hereto will consult with its own legal counsel to the extent that it deems necessary in connection with the Loan Documents and the matters contemplated therein.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 9.08. [Reserved].

SECTION 9.09. Agent May File Proofs of Claim; Bankruptcy Events. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Borrower or any Subsidiary, Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether Administrative Agent shall have made any demand any Borrower or any other Person primarily or secondarily liable) shall be entitled and empowered (but not obligated), by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and Administrative Agent under Article II and Section 10.03) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same in accordance with this Agreement;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Administrative Agent and its agents and counsel, and any other amounts due Administrative Agent under Article II and Section 10.03. Nothing contained herein shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt in each case on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations in any proceeding under any Debtor Relief Law.

SECTION 9.10. Collateral.

(a) The Secured Parties irrevocably authorize the Administrative Agent, at its option and in its discretion:

(i) to release any Lien (A) on all Collateral upon Full Satisfaction of all the Obligations and termination of the New Term Loan Commitments, (B) with respect to any Collateral that is sold or otherwise Disposed of to a Person other than an Borrower pursuant to a Disposition permitted by Section 6.04 (other than any Disposition permitted by clause (f) of Section 6.04), (C) on Collateral owned by a Subsidiary that is a Guarantor upon release of such Guarantor from its obligations under its Guaranty Agreement pursuant to clause (iii) below, (D) upon property constituting Excluded Property (as defined in the Security Agreement) or (E) subject to Section 10.02, as may be approved, authorized, or ratified in writing by Fifth Star;

(ii) to release any Guarantor from its obligations under any Guaranty Agreement if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents; and

(iii) to enter into Intercreditor Agreements and perform all obligations thereunder and to enter into any amendments of such document which do not materially modify the rights of the Secured Parties thereunder, and the Secured Parties agree to be bound by the terms thereof.

(b) Upon request by Administrative Agent at any time, the Secured Parties will confirm in writing Administrative Agent’s authority to release or subordinate its interest in particular types or items of property or to release any Guarantor from its obligations under the Guaranty Agreement pursuant to this Section 9.10.

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(c) The Administrative Agent, at the sole expense of Borrowers, shall execute and deliver to the Borrowers all releases or other documents reasonably necessary or desirable to evidence or effect any release of Liens or release of Guaranty Agreement authorized under Section 9.10(a), in each case, without recourse to, or representation or warranty from, the Administrative Agent; provided that (i) Administrative Agent shall not be required to execute any document necessary to evidence such release authorized under clause (i)(B) or (ii) of Section 9.10(a) unless a Responsible Officer of Borrowers shall certify in writing to Administrative Agent that the transaction requiring such release is permitted under the Loan Documents (it being acknowledged that Administrative Agent may rely on any such certificate without further enquiry), (ii) Administrative Agent shall not be required to execute any document necessary to evidence such release on terms that, in Administrative Agent’s opinion, would expose Administrative Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty, and (iii) no such release shall in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of any Borrowers in respect of) all interests retained by Borrowers, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral. To the extent Administrative Agent is required to execute any releases or other documents in accordance with this Section 9.10(c), Administrative Agent shall do so promptly upon request of Borrowers without the consent or further agreement of any Secured Party.

(d) The Administrative Agent shall not have any obligation whatsoever to any of the Secured Parties to assure that the Collateral exists or is owned by any Borrower or its Subsidiaries or is cared for, protected, or insured or has been encumbered, or that the Administrative Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, or that any particular items of Collateral meet the eligibility criteria applicable in respect thereof or whether to impose, maintain, reduce, or eliminate any particular reserve hereunder or whether the amount of any such reserve is appropriate or not, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to the Administrative Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, subject to the terms and conditions contained herein, the Administrative Agent may act in any manner it may deem appropriate, in its sole discretion given the Administrative Agent’s own interest in the Collateral in its capacity as one of the Lenders and that the Administrative Agent shall not have any duty or liability whatsoever to any Secured Party as to any of the foregoing, except as otherwise provided herein.

(e) Credit Bidding. The Administrative Agent shall have the right to credit bid (either directly or through one or more acquisition vehicles), up to the full amount of the Obligations owed under the Loan Documents, in connection with any sale of all or any portion of the Collateral, including (without limitation) any sale occurring pursuant to section 363 of the Bankruptcy Code or included as part of any chapter 11 plan subject to confirmation section 1129(b)(2)(A)(ii)-(iii) of the Bankruptcy Code, by a chapter 7 trustee under section 725 of the Bankruptcy Code without the consent of the holders of the Tranche 2 Roll-Up DIP Claims or the Tranche 3 DIP Roll-Up Claims; provided, however, that only if the Administrative Agent so elects to credit bid, the Administrative Agent shall not be required to credit bid any Obligations owed with respect to the Tranche 2 Roll-Up DIP Claims or the Tranche 3 Roll-Up DIP Claims if the cash component of the Administrative Agent’s bid will result in proceeds sufficient to pay holders of Tranche 2 Roll-Up DIP Claims and Tranche 3 Roll-Up DIP Claims in full in accordance with Section 8.02.

SECTION 9.11. Bailee for Perfection. Administrative Agent hereby appoints each of the other Lenders to serve as bailee to perfect the Administrative Agent’s Liens in any Collateral in the possession of any such other Lender. Each Lender possessing any Collateral agrees to so act as bailee for Administrative Agent in accordance with the terms and provisions hereof. No Lender (other than Administrative Agent acting for the benefit of the Secured Parties) shall exercise any right of set-off or banker’s lien against any Borrower for any obligations other than the Obligations.

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Article X MISCELLANEOUS

SECTION 10.01. Notices.

(a) General Address for Notices. Except in the case of communications expressly permitted to be given by telephone hereunder or under any other Loan Documents, all notices and other communications (“Communications”) provided for herein or in any other Loan Document shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy or, subject to Section 10.01(b), by electronic communication, as follows:

(i) if to Borrowers, to them at:

Parts iD, Inc.

1 Corporate Drive, Suite C

Cranbury, NJ 08512

Attn: John Pendleton, General Counsel

E-mail: john.pendleton@corp.partsid.com

With a copy (which shall not constitute notice) to:

DLA Piper LLP (US)

51 John F. Kennedy Parkway, Suite 120

Short Hills, NJ 07078-2704

Attn: Kira Mineroff

E-mail: kira.mineroff@dlapiper.com

(ii) if to Fifth Star, to it at:

Fifth Star, Inc.

222 West Merchandise Mart Plaza, Suite 2982

Chicago, IL 60654

Email: legalnotices@corazon.com

With a copy (which shall not constitute notice) to:

Sidley Austin LLP

One South Dearborn

Chicago, IL 60603

Attn: Annie Wallis

E-mail: awallis@sidley.com

(iii) if to another Lender, to it at its address set forth in its Roll-Up DIP Lender Supplement.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received. Notices sent by telecopier shall be deemed to have been given when sent (except that, if not given before or during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day). Notices delivered through electronic communications to the extent provided in Section 10.01(b), shall be effective as provided in such Section 10.01(b).

(b) Electronic Communications. Communications to the Lenders under the Loan Documents may be delivered or furnished by electronic communications pursuant to procedures approved by Administrative Agent. Administrative Agent or a Borrower may, in its discretion, agree to accept Communications to it under the Loan Documents by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular Communications. Unless Administrative Agent otherwise prescribes, (i) Communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment), and (ii) Communications posted on an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in clause (i) of this Section 10.01(b) notification that such Communication is available and identifying the website address thereof; provided that, for both clauses (i) and (ii) of this Section 10.01(b), if such Communication is not sent before or during the normal business hours of the recipient, such Communication shall be deemed to have been sent at the opening of business on the next Business Day.

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(c) Change of Address for Notices. Any party hereto may change its address or telecopy number for, or individual designated to receive, Communications under the Loan Documents by notice to the other parties hereto (or, in the case of any such change by a Lender, by notice to a Borrower and Administrative Agent). All Communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

(d) Reliance on Notices. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic notices of a Borrowing) purportedly given by or on behalf of Borrowers even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. Borrowers shall, jointly and severally, indemnify the Administrative Agent, each Lender, and the Related Parties of each of them from all losses, costs, expenses, and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of Borrowers. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

SECTION 10.02. Waivers; Amendments.

(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by Administrative Agent or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of Administrative Agent, the Lenders, and the other Secured Parties hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Borrower therefrom shall in any event be effective unless the same shall be permitted by Section 10.02(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether Administrative Agent, any Lender may have had notice or knowledge of such Default at the time.

(b) Amendments. Neither this Agreement (including any Exhibit or Schedule hereto), nor any other Loan Document nor any provision hereof or thereof may be waived, amended, or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by Borrowers, Administrative Agent and Fifth Star in its capacity as a Lender or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by Administrative Agent and the Borrower or Borrowers that are parties thereto, in each case with the consent of Fifth Star; provided that no such agreement shall (i) increase any New Term Loan Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce the rate of any fees due hereunder, without the written consent of each Lender affected thereby (provided that in no event shall the waiver of applicability of Section 2.12(c) (which waiver shall be effective with the written consent of Fifth Star) constitute a reduction in the rate of interest or a reduction of fees for purposes of this clause (ii)), (iii) postpone the scheduled date of payment of the principal amount of any Loan (excluding any payment required by Section 2.10(b)), or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or extend the Maturity Date, without the written consent of each Lender affected thereby, (iv) modify Section 8.02 or Section 10.04 (including the modification of any financial or other definition that would affect the interpretation of Section 8.02 or Section 10.04) without the written consent of each Lender, (v) change any of the provisions of this Section 10.02, without the written consent of each Lender and/or (vi) except as permitted by Section 9.10, (A) release a Borrower or release any Guarantor from any of its guarantee obligations without the written consent of each Lender or (B) release any of the Collateral without the written consent of each Lender.

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SECTION 10.03. Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. Borrowers agree, jointly and severally, to pay (i) all documented out-of-pocket expenses incurred by Fifth Star and its Affiliates, including the fees, charges and disbursements of counsel and a financial advisor for Fifth Star in connection with the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and all aspects of the Bankruptcy Cases, including the preparation and review of pleadings, documents and reports related to the Bankruptcy Cases (and any successor cases relating thereto), attendance at meetings, court hearings or conferences related to the Bankruptcy Cases (and any successor cases relating thereto) and general monitoring of the Bankruptcy Cases (and any successor cases relating thereto), (ii) all documented out-of-pocket expenses incurred by Fifth Star including the documented fees, charges and disbursements of one primary counsel, one local counsel in each relevant jurisdiction, one specialty counsel for each relevant specialty area and one financial advisor in connection with the enforcement or protection of such Person’s rights in connection with this Agreement and the other Loan Documents or the Collateral, including its rights under this Section, and including in connection with any bankruptcy or insolvency proceeding, workout, restructuring or related negotiations in respect thereof, and (iii) all documented out-of-pocket costs incurred by Fifth Star in connection with any filing, registration, recording or perfection of any security interest contemplated by any Security Document or any other document referred to therein or, subject to Section 5.06, any audit, verification, inspection or appraisal of the Collateral.

(b) Indemnification by Borrowers. Borrowers hereby agree, jointly and severally, to indemnify Administrative Agent, each Lender and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities, and related expenses, including the fees, charges, and disbursements of counsel (limited to the documented out-of-pocket fees, disbursements and other charges of one primary counsel, one local counsel in each relevant jurisdiction, and one specialty counsel for each relevant specialty for all Indemnitees taken as a whole, and one or more additional counsel if one or more conflicts of interest, or perceived conflicts of interest arise) incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any other Loan Document, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the Transactions or any other transactions contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any other property owned or operated by any Borrower or any of the Subsidiaries, or any Environmental Liability related in any way to any Borrower or any of the Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation, or proceeding relating to any of the foregoing, whether based on contract, tort, or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities, or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have (x) resulted solely from the gross negligence or willful misconduct of such Indemnitee, or (y) arisen out of any claim, litigation, investigation or proceeding brought by such Indemnitee solely against one or more other Indemnitees (other than any claim, litigation, investigation or proceeding that is brought by or against Administrative Agent or any arranger or similar role, acting in its capacity as Administrative Agent or arranger or similar role) that does not involve any act or omission of any Borrowers or any of their respective subsidiaries or affiliates. This Section 10.03(b) shall not apply with respect to Taxes, other than any Taxes that represent losses, claims, or damages arising from any non-Tax claim.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(d) Waiver of Consequential Damages, Etc. To the extent permitted by applicable law, no Indemnitee, Borrower or any Related Party of an Borrower shall have any liability for, and no Borrower shall assert, and each Borrower hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document, the Transactions, any Loan, or the use of the proceeds thereof; provided that nothing in this sentence shall limit any Borrower’s indemnity and reimbursement obligations to the extent that such special, indirect, consequential or punitive damages are incurred or paid by an Indemnitee to a third party for which such Indemnitee is otherwise entitled to reimbursement or indemnification as set forth in Section 10.03(a) or (b).

(e) Payments. All amounts due under this Section shall be payable no later than 10 Business Days after written demand therefor.

SECTION 10.04. Successors and Assigns.

(a) Assignments Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of a Lender who is owed any of the Obligations and any Indemnitee), except that (i) no Borrower may assign or otherwise transfer any of its rights or obligations hereunder or under any other Loan Document without the prior written consent of each Lender (and any attempted assignment or transfer of any Borrower without such consent shall be null and void), and (ii) no Lender may assign or otherwise transfer any of its rights or obligations hereunder except in accordance with this Section (and any attempted assignment or transfer by any Lender that is not in accordance with this Section shall be null and void) or with the prior written consent of the Borrowers and Fifth Star. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of a Lender who is owed any of the Obligations, and, to the extent expressly contemplated hereby, the Related Parties of each of Administrative Agent and the Lenders)) any legal or equitable right, remedy, or claim under, or by reason, of this Agreement.

(b) Assignments by Lenders Generally. Each of the New Bridge Lender, the New Money DIP Lender and the Tranche 1 Roll-Up DIP Lender may at any time assign to one or more assignees all or a portion of its respective rights and obligations under this Agreement (including all or a portion of its New Term Loan Commitment, as applicable, and the Loans at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i) Required Consents. No consent shall be required for any assignment, except the consent of Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of any Loans to a Person who is not a Lender.

(ii) Assignment and Assumption. The parties to each assignment shall execute and deliver to Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 (provided that Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment).

(iii) Administrative Questionnaire. The assignee, if it shall not already be a Lender, shall deliver to Administrative Agent an Administrative Questionnaire if so requested by Administrative Agent.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(c) Effectiveness of Assignments. Subject to acceptance and recording thereof pursuant to Section 10.04(d), from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the rights referred to in Sections 2.14, 2.15, 2.13, and 10.03 with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.04(e).

(d) Maintenance of Register by Administrative Agent. Administrative Agent, acting solely for this purpose as a non-fiduciary agent of Borrowers, shall maintain at one of its offices in the United States a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the New Term Loan Commitment of, and principal amount (and stated interest) of the Loans (each, a “Registered Loan”) owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). Other than in connection with an assignment by a Lender of all or any portion of its Loan to an Affiliate of such Lender (i) a Registered Loan may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register, and (ii) any assignment or sale of all or part of such Registered Loan may be effected only by registration of such assignment or sale on the Register. In the case of any assignment by a Lender of all or any portion of its Loan to an Affiliate of such Lender, and which assignment is not recorded in the Register, the assigning Lender, on behalf of Borrowers, shall maintain a register comparable to the Register. The entries in the Register shall be conclusive absent manifest error, and Borrowers, Administrative Agent, and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by Borrowers and any Lender, at any reasonable time and from time to time, upon reasonable prior notice.

(e) Participations. The New Bridge Lender, the New Money DIP Lender and the Tranche 1 Roll-Up DIP Lender may at any time, without the consent of, or notice to, Borrowers or Administrative Agent, sell participations to any Person (a “Participant”) in all or a portion of such Lender’s rights or obligations under this Agreement (including all or a portion of its New Term Loan Commitments or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such participation shall not increase the obligations of any Borrower under any Loan Document, except as contemplated below, and (iv) Borrowers, Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which such Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification, or waiver of any provision of the Loan Documents; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification, or waiver described in the first proviso to Section 10.02(b) that affects such Participant. Borrowers agree that each Participant shall be entitled to the benefits of Section 2.13, (subject to the requirements and limitations therein, including the requirements under Section 2.13(g) (it being understood that the documentation required under Section 2.13(g) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.04(b); provided that such Participant (shall not be entitled to receive any greater payment under Section 2.13, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.14(d). Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any New Term Loan Commitment or Loan or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such New Term Loan Commitment or Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank (or other central bank under any central banking system established under the jurisdiction or organization of such Lender (or its parent bank)); provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 10.05. Survival. All covenants, agreements, certifications, representations and warranties made by Borrowers or any other Borrower herein or in the other Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or the other Loan Documents shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the other Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect certification, representation, or warranty at the time any credit is extended hereunder, and shall continue in full force and effect until the Full Satisfaction of the Obligations. The provisions of Sections 2.14, 2.15, 2.13, 10.03, and 10.18 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the termination of the Loan Documents and payment of the Obligations hereunder, or the expiration or termination of the New Term Loan Commitments.

SECTION 10.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract between and among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by Administrative Agent and when Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement. The words “execution,” “signed,” “signature,” and words of like import in this Agreement or any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 10.07. Severability. Any provision of this Agreement or any other Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality, and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 10.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, Fifth Star and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held, and other obligations (in whatever currency) at any time owing, by Fifth Star or any such Affiliate, to or for the credit or the account of Borrowers or any other Borrower against any and all of the obligations of Borrowers or any other Borrower now or hereafter existing under this Agreement or any other Loan Document to Fifth Star or its Affiliates, irrespective of whether or not Fifth Star or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of Borrowers or such Borrower may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness. The rights of Fifth Star and its Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that Fifth Star and its Affiliates may have. Fifth Star agrees to notify Borrowers and Administrative Agent promptly after any such setoff and application and share such set-off pursuant to Section 2.17(d); provided that the failure to give such notice shall not affect the validity of such setoff and application.

SECTION 10.09. Governing Law; Jurisdiction; Etc.

(a) Governing Law. This Agreement and the other Loan Documents (other than those containing a contrary express choice of law provision) shall be construed in accordance with, and this Agreement, the other Loan Documents and all matters arising out of or relating in any way whatsoever to the Loan Documents (whether in contract, tort or otherwise) shall be governed by, the law of the State of New York and, to the extent applicable, the Bankruptcy Code. This governing law election has been made by the parties in reliance (at least in part) on Section 5-1401 of the General Obligation Law of the State of New York, as amended (as and to the extent applicable), and other applicable law.

(b) Submission to Jurisdiction. Each Borrower hereby irrevocably and unconditionally agrees that it shall not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against Administrative Agent, any Lender, or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the Bankruptcy Court (if applicable), the Supreme Court of the State of New York sitting in New York County and the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto hereby irrevocably and unconditionally irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in the Bankruptcy Court (if applicable), such New York State court or, to the fullest extent permitted by applicable law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that Administrative Agent, or any Lender may otherwise have to bring any action or proceeding relating to any Loan Document against any Borrower or its properties in the courts of any jurisdiction.

(c) Waiver of Venue. Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to any Loan Document in any court referred to in Section 10.09(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 10.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by applicable law.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO AND EACH OTHER LOAN PARTY HEREBY IRREVOCABLY 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 ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY, OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 10.11. Treatment of Certain Information; Confidentiality; Independence of Covenants.

(a) Treatment of Certain Information. Each Borrower acknowledges that from time to time financial advisory, investment banking and other services may be offered or provided to Borrowers or one or more of the Subsidiaries (in connection with this Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such Lender and each Borrower hereby authorizes each Lender to share any information delivered to such Lender by any Borrowers or their Subsidiaries pursuant to this Agreement, or in connection with the decision of such Lender to enter into this Agreement, to any such Subsidiary or Affiliate, it being understood that any such Subsidiary or Affiliate receiving such information shall be bound by the provisions of Section 10.11(b) as if it were a Lender hereunder. Such authorization shall survive the repayment of the Loans, the expiration or termination of the New Term Loan Commitments or the termination of this Agreement or any provision hereof.

(b) Confidentiality. Each of Administrative Agent and the Lenders agree to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential and to use such Information subject to such Person’s internal regulatory and/or ethical obligations regarding the same); (ii) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners or any listing authority or stock exchange); (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (iv) to any other party hereto; (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement or any pledgee under Section 10.04(f), or (B) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to Borrowers and their obligations, this Agreement or payments hereunder; (vii) on a confidential basis to (A) any rating agency in connection with rating Borrowers or their Subsidiaries or the credit facilities under this Agreement or (B) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to this Agreements; (viii) with the consent of a Borrower; or (ix) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Section, or (B) becomes available to Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrowers that is not to the knowledge of the receiving party in violation of any confidentiality restriction. For purposes of this Section, “Information” means all information received from the Borrowers or any of their Subsidiaries and/or its Related Parties or representatives relating to the Borrowers or any of their Subsidiaries or any of their respective businesses, other than any such information that is available to Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrowers or any of their Subsidiaries and/or its Related Parties or representatives. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

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(c) Independence of Covenants. All covenants and other agreements contained in this Agreement or any other Loan Document shall be given independent effect so that, if a particular action or condition is not permitted by any of such covenants or other agreements, the fact that such action or condition would be permitted by an exception to, or otherwise be within the limitations of, another covenant or other agreement shall not avoid the occurrence of a Default if such action is taken or such condition exists.

SECTION 10.12. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges or other amounts that are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken, received, or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect to such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefore) until such cumulated amount, shall have been received by such Lender. If Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to Borrowers.

SECTION 10.13. USA Patriot Act. Each of Administrative Agent and each Lender subject to the USA Patriot Act hereby notifies each Borrower that pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify, and record information that identifies each Borrower and other information that will allow Administrative Agent and such Lender to identify each Borrower in accordance with the USA Patriot Act. Borrowers hereby agree to provide, and cause each Guarantor to provide, such information promptly upon the request of Administrative Agent or any Lender. Each Lender subject to the USA Patriot Act acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on Administrative Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA Patriot Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with any Borrower, its Affiliates or its agents, this Agreement, the Loan Documents or the transactions hereunder or contemplated hereby: (a) any identity verification procedures, (b) any record-keeping, (c) comparisons with government lists, (d) customer notices, or (e) other procedures required under the CIP Regulations or such other law.

SECTION 10.14. Press Release and Related Matters. No party hereto shall, and no party hereto shall permit any of its Affiliates to, issue any press release or other public disclosure using the name, logo or otherwise referring to any party hereto or any of their respective Affiliates, the Loan Documents or any transaction contemplated therein without the prior consent of a Borrower, Administrative Agent, or any applicable Lender, as the case may be, except to the extent required to do so under applicable law and then, in any event, such party hereto will advise Borrowers or Administrative Agent, as the case may be, as soon as possible with respect to such press release or other public disclosure.

SECTION 10.15. No Duty. All attorneys, accountants, appraisers, and other professional Persons and consultants retained by the Administrative Agent or any Lender shall have the right to act exclusively in the interest of the Administrative Agent or such Lender, as applicable and shall have no duty of disclosure, duty of loyalty, duty of care, or other duty or obligation of any type or nature whatsoever to Borrowers, any holders of Equity Interests of any Borrower, or any other Person.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

SECTION 10.16. No Fiduciary Relationship. The relationship between each Borrower and the other Borrower on the one hand and the Administrative Agent and each Lender on the other is solely that of debtor and creditor, and none of the Administrative Agent or any Lender, has any fiduciary, advisory, agency or other special relationship with Borrowers, and no term or condition of any of the Loan Documents shall be construed so as to deem the relationship between Borrowers on the one hand and the Administrative Agent and each Lender on the other to be other than that of debtor and creditor. To the fullest extent permitted by law, each Borrower hereby waives and releases any claims that it may have against any of the Administrative Agent and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby. For the avoidance of doubt, this Section 10.16 applies only the Tranche 2 Roll-Up DIP Lenders and the Tranche 3 Roll-Up DIP Lenders in their capacity as such, and not in any other capacity, including, without limitation, as an officer, director or board member of a Borrower.

SECTION 10.17. Construction. Borrowers, each Guarantor (by its execution of the Loan Documents to which it is a party), Administrative Agent and each Lender acknowledges that each of them has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review the Loan Documents with its legal counsel and that the Loan Documents shall be construed as if jointly drafted by the parties thereto. Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 10.18. Payments Set Aside. To the extent that any payment by or on behalf of any Borrower under any Loan Document is made to Administrative Agent or any Lender, or Administrative Agent or any Lender exercises its right of setoff as to any Borrower, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to Administrative Agent upon demand its Pro Rata Share of any amount so recovered from or repaid by Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect.

SECTION 10.19. Benefits of Agreement. The Loan Documents are entered into for the sole protection and benefit of the parties hereto and their permitted successors and assigns, and no other Person (other than any Related Parties of the Administrative Agent, the Lenders and any Participants to the extent provided for in Section 10.04(e)) shall be a direct or indirect beneficiary of, or shall have any direct or indirect cause of action or claim in connection with, any Loan Document.

SECTION 10.20. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority

SECTION 10.21. [Reserved].

SECTION 10.22. [Reserved].

SECTION 10.23. Joint and Several Obligations.

(a) All Obligations shall constitute joint and several obligations of Borrowers. Each Borrower expressly represents and acknowledges that it is part of a common enterprise with the other Borrower and that any financial accommodations by Administrative Agent and the Lenders, or any of them, to any other Borrower hereunder and under the other Loan Documents are and will be of direct and indirect interest, benefit and advantage to all Borrowers. Each Borrower acknowledges that any notice of Borrowing or any other notice given by any other Borrower to Administrative Agent or the Lenders shall bind all Borrowers, and that any notice given by Administrative Agent or the Lenders to any Borrower shall be effective with respect to all Borrowers. Each Borrower acknowledges and agrees that each Borrower shall be liable, on a joint and several basis, for all of the Loans and other Obligations, regardless of which such Person actually may have received the proceeds of any of the Loans or other extensions of credit or the amount of such Loans or other extensions of credit received or the manner in which Administrative Agent or the Lenders accounts among Borrowers for such Loans or other Obligations on its books and records, and further acknowledges and agrees that Loans and other extensions of credit to any Borrower inure to the mutual benefit of all of Borrowers and that Administrative Agent and the Lenders are relying on the joint and several liability of Borrowers in extending the Loans and other financial accommodations under the Loan Documents.

(b) Each Borrower shall be entitled to subrogation and contribution rights from and against the other Borrower to the extent such Person is required to pay to Administrative Agent, or the Lenders any amount in excess of the Loans advanced directly to, or other Obligations incurred directly by, such Person or as otherwise available under applicable law; provided, however, that such subrogation and contribution rights are and shall be subject to the terms and conditions of Section 10.23(c) and 10.23(d).

(c) It is the intent of each Borrower, Administrative Agent, the Lenders and any other Person holding any of the Obligations that the maximum obligations of each Borrower hereunder (such Person’s “Maximum Borrower Liability”) in any case or proceeding referred to below (but only in such a case or proceeding) shall not be in excess of:

(i) in a case or proceeding commenced by or against such Person under the Bankruptcy Code on or within one year from the date on which any of the Obligations of such Person are incurred, the maximum amount that would not otherwise cause the Obligations of such Person hereunder (or any other Obligations of such Person to Administrative Agent, the Lenders and any other Person holding any of the Obligations) to be avoidable or unenforceable against such Person under (A) Section 548 of the Bankruptcy Code or (B) any state fraudulent transfer or fraudulent conveyance act or statute applied in such case or proceeding by virtue of Section 544 of the Bankruptcy Code; or

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(ii) in a case or proceeding commenced by or against such Person under the Bankruptcy Code subsequent to one year from the date on which any of the Obligations of such Person are incurred, the maximum amount that would not otherwise cause the Obligations of such Person hereunder (or any other Obligations of such Person to Administrative Agent, the Lenders and any other Person holding any of the Obligations) to be avoidable or unenforceable against such Person under any state fraudulent transfer or fraudulent conveyance act or statute applied in any such case or proceeding by virtue of Section 544 of the Bankruptcy Code; or

(iii) in a case or proceeding commenced by or against such Person under any law, statute or regulation other than the Bankruptcy Code relating to dissolution, liquidation, conservatorship, bankruptcy, moratorium, readjustment of debt, compromise, rearrangement, receivership, insolvency, reorganization or similar debtor relief from time to time in effect affecting the rights of creditors generally (collectively, “Other Debtor Relief Law”), the maximum amount that would not otherwise cause the Obligations of such Person hereunder (or any other Obligations of such Person to Administrative Agent, the Lenders and any other Person holding any of the Obligations) to be avoidable or unenforceable against such Person under such Other Debtor Relief Law, including, without limitation, any state fraudulent transfer or fraudulent conveyance act or statute applied in any such case or proceeding. (The substantive state or federal laws under which the possible avoidance or unenforceability of the Obligations of any Borrower hereunder (or any other Obligations of such Person to Administrative Agent, the Lenders and any other Person holding any of the Obligations) shall be determined in any such case or proceeding shall hereinafter be referred to as the “Avoidance Provisions”).

Notwithstanding the foregoing, no provision of this Section 10.23(c) shall limit the liability of any Borrower for loans advanced directly or indirectly to it under this Agreement.

(d) To the extent set forth in Section 10.23(c), but only to the extent that the Obligations of any Borrower hereunder would otherwise be subject to avoidance under any Avoidance Provisions if such Person is not deemed to have received valuable consideration, fair value, fair consideration or reasonably equivalent value for such transfers or obligations, or if such transfers or obligations of any Borrower hereunder would render such Person insolvent, or leave such Person with an unreasonably small capital or unreasonably small assets to conduct its business, or cause such Person to have incurred debts (or to have intended to have incurred debts) beyond its ability to pay such debts as they mature, in each case as of the time any of the obligations of such Person are deemed to have been incurred and transfers made under such Avoidance Provisions, then the obligations of such Person hereunder shall be reduced to that amount which, after giving effect thereto, would not cause the Obligations of such Person hereunder (or any other Obligations of such Person to Administrative Agent, the Lenders and any other Person holding any of the Obligations), as so reduced, to be subject to avoidance under such Avoidance Provisions. This Section 10.23(d) is intended solely to preserve the rights hereunder of Administrative Agent, the Lenders and any other Person holding any of the Obligations to the maximum extent that would not cause the obligations of Borrowers hereunder to be subject to avoidance under any Avoidance Provisions, and none of Borrowers nor any other Person shall have any right, defense, offset, or claim under this Section 10.23(d) as against Administrative Agent, the Lenders and any other Person holding any of the Obligations that would not otherwise be available to such Person under the Avoidance Provisions.

(e) Each Borrower agrees that the Obligations may at any time and from time to time exceed the Maximum Borrower Liability of such Person, and may exceed the aggregate Maximum Borrower Liability of all of Borrowers hereunder, without impairing this Agreement or any provision contained herein or affecting the rights and remedies of Administrative Agent and the Lenders hereunder.

(f) In the event any Borrower (a “Funding Borrower”) shall make any payment or payments under this Agreement or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations hereunder, each other Borrower (each, a “Contributing Borrower”) shall contribute to such Funding Borrower an amount equal to such payment or payments made, or losses suffered, by such Funding Borrower determined as of the date on which such payment or loss was made multiplied by the ratio of (i) the Maximum Borrower Liability of such Contributing Borrower (without giving effect to any right to receive any contribution or other obligation to make any contribution hereunder), to (ii) the aggregate Maximum Borrower Liability of all Borrowers (including the Funding Borrowers) hereunder (without giving effect to any right to receive, or obligation to make, any contribution hereunder). Nothing in this Section 10.23(f) shall affect the joint and several liability of any Borrower to Administrative Agent and the Lenders for the entire amount of its Obligations. Each Borrower covenants and agrees that its right to receive any contribution hereunder from a Contributing Borrower shall be subordinate and junior in right of payment to all obligations of Borrowers to Administrative Agent and the Lenders hereunder.

SUBJECT TO FRE 408 & ITS EQUIVALENTS

(g) No Borrower will exercise any rights which it may acquire by way of subrogation hereunder or under any other Loan Document or at law by any payment made hereunder or otherwise, nor shall any Borrower seek or be entitled to seek any contribution or reimbursement from any other Borrower in respect of payments made by such Person hereunder or under any other Loan Document, until all amounts owing to Administrative Agent and the Lenders on account of the Obligations are paid in full in cash. If any amounts shall be paid to any Borrower on account of such subrogation or contribution rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held by such Person in trust for Administrative Agent and the Lenders, segregated from other funds of such Person, and shall, forthwith upon receipt by such Person, be turned over to Administrative Agent in the exact form received by such Person (duly endorsed by such Person to Administrative Agent, if required), to be applied against the Obligations, whether matured or unmatured, as provided for herein.

SECTION 10.24. Acknowledgement Regarding Any Supported QFCs. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Hedging Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

(a) In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States.

(b) As used in this Section 10.24, the following terms have the following meanings:

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Covered Entity” means any of the following:

(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

SUBJECT TO FRE 408 & ITS EQUIVALENTS

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

SECTION 10.25. DIP Order. If the Borrowers have filed the Bankruptcy Cases, the Borrowers, the Administrative Agent and the Lenders hereby expressly agree that in the event of any express conflict between this Agreement and the DIP Order, the DIP Order shall control.

SECTION 10.26. INTERCREDITOR AGREEMENTS.

(a) EACH LENDER PARTY HERETO UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT IT (AND EACH OF ITS SUCCESSORS AND ASSIGNS) AND EACH OTHER LENDER (AND EACH OF THEIR SUCCESSORS AND ASSIGNS) SHALL BE BOUND BY THE INTERCREDITOR AGREEMENTS, WHICH IN CERTAIN CIRCUMSTANCES MAY REQUIRE (AS MORE FULLY PROVIDED THEREIN) THE TAKING OF CERTAIN ACTIONS BY THE LENDERS.

(b) THE PROVISIONS OF THIS SECTION 10.26 ARE NOT INTENDED TO SUMMARIZE OR FULLY DESCRIBE THE PROVISIONS OF ANY INTERCREDITOR AGREEMENTS. REFERENCE MUST BE MADE TO THE APPLICABLE INTERCREDITOR AGREEMENTS THEMSELVES TO UNDERSTAND ALL TERMS AND CONDITIONS THEREOF. EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE INTERCREDITOR AGREEMENTS AND THE TERMS AND PROVISIONS THEREOF, AND FIFTH STAR MAKES NO REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE INTERCREDITOR AGREEMENTS. A COPY OF THE INTERCREDITOR AGREEMENTS MAY BE OBTAINED FROM THE ADMINISTRATIVE AGENT.

(c) AS MORE FULLY PROVIDED THEREIN, EACH INTERCREDITOR AGREEMENT CAN ONLY BE AMENDED IN ACCORDANCE WITH THE PROVISIONS THEREOF.

[remainder of this page intentionally left blank]

SUBJECT TO FRE 408 & ITS EQUIVALENTS

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed and delivered by its officer or officers thereunto duly authorized as of the date first above written.

BORROWERS:	PARTS ID, INC.

	By:	/s/ Lev Peker
		Name:	Lev Peker
		Title:	Chief Executive Officer

	PARTS ID, LLC

	By:	/s/ Lev Peker
		Name:	Lev Peker
		Title:	Chief Executive Officer

ADMINISTRATIVE AGENT:	FIFTH STAR, INC., as Administrative Agent

	By:	/s/ Sam Yagan
	Name:	Sam Yagan
	Title:	President, Secretary and Treasurer

LENDERS:	FIFTH STAR, INC., as the New Bridge Lender and the New Money DIP Lender

	By:	/s/ Sam Yagan
	Name:	Sam Yagan
	Title:	President, Secretary and Treasurer

Schedule 2.01(c)

EXISTING BRIDGE LOANS

Existing Bridge Lender

Description of Definitive Agreement

Funding Date

Description of Promissory Note

Initial Aggregate Principal Amount of Existing Bridge Loan

Class

2642186 Ontario Inc.

Note Purchase Agreement, dated November 2, 2023

November 2, 2023

Junior Secured Promissory Note

1,000,000

Tranche 2 Loan

Sanjiv Gomes

Amended and Restated Note Purchase Agreement, dated December 11, 2023

October 20, 2023

Amended and Restated Junior Secured Promissory Note

1,000,000

Tranche 2 Loan

Lev Peker

Amended and Restated Note Purchase Agreement, dated December 11, 2023

November 10 & 13, 2023

Amended and Restated Junior Secured Promissory Note

1,300,000

Tranche 3 Loan

Schedule 3.06

DISCLOSED MATTERS

Business Combination Litigation

On October 3, 2020, counsel to Stanislav Royzenshteyn and Roman Gerashenko (together, the “Founder Stockholders”) and Onyx Enterprises Canada Inc. and its principals (collectively, the “Investor Stockholder and Principals”) received a letter from counsel to the Founder Stockholders objecting to the Investor Stockholder’s use of the “drag-along right” under Section 4.5 of the Stockholders Agreement, dated July 17, 2015 (the “Stockholders Agreement”), and the proxy granted pursuant to Section 5.1 of the Stockholders Agreement to execute (i) the stockholder written consent, dated September 18, 2020, approving the Business Combination Agreement and (ii) the Stockholder Support Agreements, in each case on behalf of the Founder Stockholders. The letter also describes the Business Combination as unlawful and threatens further unspecified actions by the Founder Stockholders.

On October 15, 2020, the Founder Stockholders filed an order to show cause to preliminarily enjoin the Business Combination pending final adjudication of the Shareholder Litigation. On October 23, 2020, the Superior Court of New Jersey, Chancery Division, Monmouth County refused to grant a preliminary injunction and set the hearing date on the order to show cause for December 4, 2020. On October 26, 2020, the Founder Stockholders filed an application for permission to file emergent motion to request a temporary restraining order preventing the closing of the Business Combination prior to the hearing on December 4, 2020 with the Superior Court of New Jersey, Appellate Division, which such court denied. On October 27, 2020, the Founder Stockholders appealed the Appellate Division’s ruling to the Supreme Court of New Jersey. On October 28, 2020, the Supreme Court of New Jersey denied such appeal. On November 20, 2020, the Founder Stockholders requested another emergent motion before the Superior Court of New Jersey, Chancery Division, Monmouth County for a temporary restraining order preventing the closing of the Business Combination. The Superior Court of New Jersey, Chancery Division, Monmouth County denied that request by order dated November 20, 2020. The Founder Stockholders withdrew their order to show cause after the November 20, 2020 order was entered. Since then, the Founding Stockholders advised the court that they will no longer seek to unwind the Business Combination. Rather, they are seeking damages from the defendants in the Shareholder Litigation (as defined below).

Environmental Protection Agency (“EPA”) v. Onyx Enterprises Int’l, Corp. d/b/a CARiD

On October 22, 2018, the U.S. Environmental Protection Agency (the “EPA”), submitted a formal information request asserting that the Company sold improper and illegal defeat devices in violation of the Clean Air Act (the “CAA”). The Company responded in December 2018. On July 16, 2020, the EPA presented the Company with a proposed notice of violation directed to a subset of sales performance parts that the EPA alleges were sold by the Company in violation of the CAA. The EPA did not propose an aggregate fine but identified 267 transactions as being in violation of the CAA. The products in question were sold by the Company in 2018 and have since been removed from its platform. On November 22 2020, the Company provided a response to the EPA with analysis directed at the reasons the 267 transactions did not violate the CAA. On or about September 30, 2022 the EPA proposed a fine to the Company and the parties have negotiated a final disposition of this matter that the Company will pay $491,474 with two payments of $49,147 in October and December 2022 and the remainder to be paid in 12 monthly installments of $32,765 plus interest at 5.0% with the last payment due on December 29, 2023.

Onyx Enterprises Int’l Corp v. Volkswagen Group of America, Inc.

On August 4, 2020, Onyx initiated a trademark infringement action against Volkswagen Group of America, Inc. (“Volkswagen”) for the unlawful use of “ID” to brand its new line of electric vehicles due to be imported into the United States in 2021 and manufactured in Tennessee in 2022. The United States Patent and Trademark Office rejected Volkswagen’s application to register “ID” multiple times due to the Company’s priority over the mark in the automotive space. In 2019, Volkswagen approached the Company for a license to use ID for a royalty. When Volkswagen announced in July of 2020 that it would proceed with the launch using this branding, the Company filed suit. The Civil Action is captioned as Onyx Enterprises Int’l, Corp v. Volkswagen Group of America, Inc., Civil Action Number 3:20-cv-09976-BRM-ZNQ and is currently pending in the United States District Court for the District of New Jersey.

Volkswagen has obtained a stay of this matter pending the outcome in the ID Parts matter. The Company is seeking monetary damages for use of its trademark as well as an order precluding Volkswagen from continuing to use ID as part of its branding. As discovery has not commenced, the case value and exposure are undetermined at this time. The parties have engaged in settlement discussions but remain far apart in their evaluation of the merits of the case.

Shareholder Litigation

Royzenshteyn, et. al. v. Pathak, et al. v. Onyx Enterprises Int’l Corp, Superior Court of New Jersey, Monmouth County, Chancery Division, Docket No. MON-C-45.

This is a pending litigation matter that involves a shareholder dispute that arises from a stock purchase and warrant purchase agreement between Onyx Enterprises Int’l Corp. (“Onyx”) and Onyx Enterprises Canada, Inc. (“OEC”) (the “Transaction”). The litigation was instituted by the plaintiffs Stanislav Royzenshteyn and Roman Gerashenko, who were the founding stockholders of Onyx, in the Superior Court of New Jersey, Chancery Division, Monmouth County in February 2018 (the “Shareholder Litigation”).

Onyx was named by the Plaintiffs as a nominal defendant based upon the plaintiffs’ shareholder derivative claims. The Defendants Carey Curtin and Prashant Pathak asserted third party claims against Onyx seeking indemnification from the Onyx to the extent that the claims were asserted by the Plaintiffs against the Defendants in their capacity as Directors of Onyx.

On August 31, 2021, the Judge issued a decision on the Defendants’ Motion for Summary Judgement, in which he granted the motion in part and denied it in part. The fraud related claims asserted by the Plaintiffs against OEC, and the other defendants were not dismissed as well as certain other claims, including claims under the New Jersey Oppressed Minority Shareholder statute. The shareholder derivative claims were dismissed leaving the Third-Party Complaint for indemnification as the only remaining claim that involves the Company.

The Company has not received a specific demand for any monetary damages from the Defendants regarding their indemnification claims, nor does the Company have any concrete information regarding the scope of any such potential damages. Given the amount of time that the Defendants attorneys have devoted to defending the claims against their clients in the Shareholder Litigation, the potential damages arising from the indemnification claims could be significant. If the Defendants prevail on their indemnification claims, the Company will assert that that any damages sought should be allocated based on the time and effort spent in defending against the breach of fiduciary claims, as opposed to defending against the Plaintiffs’ fraud claims, which are the predominant claims in the litigation. Given that the breach of fiduciary claims against the Defendants have been dismissed, any claim for indemnification will only include fees and costs incurred prior to the decision on the Summary Judgment Motion. No trial date has been scheduled.

Onyx was named by the Plaintiffs as a nominal defendant based upon the plaintiffs’ shareholder derivative claims. The Defendants, Carey Curtin and Prashant Pathak, asserted third party claims against Onyx seeking indemnification from the Onyx to the extent that the claims were asserted by the Plaintiffs against the Defendants in their capacity as Directors of Onyx.

Potential Claim by Former CEO

On August 12, 2020, the former CEO of the Company, Mr. Royzenshteyn, a plaintiff in the Stockholder Litigation, filed a motion to amend the complaint in the Stockholder Litigation matter first listed above, to assert claims arising from the Board’s acceptance of his resignation as CEO. Mr. Royzenshteyn has asserted that he did not resign but was terminated by the Board in breach of his employment agreement. His proposed complaint seeks payment of his severance and damages from the Company associated with his alleged termination. Mr. Royzenshteyn’s motion to amend the complaint has been denied by the Special Discovery Master, but his proposed claims are preserved for any potential future action brought by him against the Company. Management believes that Mr. Royzenshteyn’s claims are without merit, but at this early stage without any litigation actually having been commenced is not possible to determine the likelihood of success of any such claims and the potential amount of liability, if any, of any award that may be made against the Company. Any amount awarded as a result will be recorded in the period it occurs.

Potential Indemnification Claims by Former Directors of Onyx

Former Onyx Directors Royzenshteyn and Gerashenko (the “Plaintiff Directors”) tendered a demand for indemnification from the Company pursuant to their Director Indemnification agreements with Onyx. The Company’s Board denied the request for indemnification. The Plaintiff Directors then filed a motion in the Stockholder litigation to reserve their indemnification claims for future litigation. That motion was heard by the Special Discovery Master, who denied motion on the grounds that the Plaintiffs had not filed a proposed amended pleading asserting these alleged claims with their motion. Subsequently, the Plaintiffs attempted to file an amended pleading with respect to the indemnification claims, which pleading was rejected by the court because it was not accompanied by an order. Thereafter, the Plaintiff Directors submitted the proposed pleading to the Special Master, which pleading was opposed by the Company and the Defendants on the grounds that it was time barred based on the statute of limitations contained in the indemnification agreements. The Special Master has issued a report and recommendation in which he held that the Plaintiffs indemnification claims are not time- barred and are preserved for a future litigation. The Company filed a motion objecting to that Report and Recommendation, which motion was denied by the Court. To date, the Plaintiffs have not filed any action seeking indemnification from the Company.

Misappropriation Action

The Company commenced an action on November 24, 2020 against Stanislav Royzenshteyn, the Company’s former CEO, captioned Parts iD, LLC v. Stanislav Royzenshteyn (the “Misappropriation Action”). The Misappropriation Action arises from Mr. Royzenshteyn’s failure to immediately return two Company computers and other equipment he had had in his possession upon his resignation as CEO in July 2020. The Company is asserting claims against Mr. Royzenshteyn for violation of the Computer Related Offenses Act, New Jersey’s Trade Secrets Act, breach of fiduciary duties and breach of his employment agreement. The Company is also asserting claims against Mr. Royzenshteyn for failing to return a luxury automobile purchased by the Company. The Company is seeking return of the automobile and any associated damages for the wrongful possession. At the same time the Company commenced the Misappropriation Action, it filed an application for a preliminary injunction and temporary restraints via order to show cause, and on January 8, 2021, the court entered an order enjoining Mr. Royzenshteyn from sharing or disseminating any Company information. The Company filed an amended complaint on January 20, 2021 to include claims for breach of fiduciary duty and breach of contract relating to a bonus payment Mr. Royzenshteyn directed be paid to him in July 2020. Mr. Royzenshteyn moved to dismiss or stay the complaint in February 2021. The Company opposed the motion and it has not yet been heard by the Court. Given its early stage, the outcome of this matter cannot be determined.

KSI Auto Parts v. Parts iD, Inc

This is a pending litigation matter that was filed on November 28, 2022. The Plaintiff is an auto body parts supplier. Plaintiff alleges in its complaint that it supplied auto body parts to Parts iD and Onyx for which it has not been paid. Plaintiff alleges that the outstanding balance due from Parts iD is $257,090.75, exclusive of interest and costs. Default was entered against Parts iD for failing to timely answer the Plaintiff’s complaint. Parts iD has filed a motion to vacate the entry of default, which motion is still pending as of the date of this letter.

Competition Specialties, Inc. v. Onyx Enterprises Int’l Corp., et. Al

This is a pending litigation matter that was filed on February 9, 2023. Plaintiff sells automotive parts and products. Plaintiff alleges in its complaint that it sold automotive parts and products to Onyx and Parts iD for which it has not been paid. Plaintiff alleges that the total balance due from Parts iD is $275,051.30, exclusive of interest and costs. Parts iD has not yet filed a responsive pleading to the Plaintiff’s complaint.

Hasson v Parts iD, Inc

On September 9, 2022, Kenneth Hasson filed a Complaint in the United States District Court for the Western District of Pennsylvania at No. 22-cv-1291. Hasson purports to bring claims on behalf of a putative class. Hasson alleges that the website, www.carid.com, allegedly operated by Parts ID, Inc., violated the Pennsylvania Wiretapping and Electronic Surveillance Control Act, 18 Pa. Cons. Stat. § 5701, et. seq., by utilizing “session replay code” software that allegedly wrongfully intercepted Hasson’s actions and communications while visiting that site. Hasson also contends that the alleged actions constitute a wrongful invasion of his and the putative class’ privacy. On December 30, 2022, Parts ID filed an Answer denying any and all liability to Hasson or any putative class and denying that the matter is suitable for class certification. The dispute currently is subject to the Court’s mandatory alternative dispute resolution program and is scheduled for a mediation on April 17, 2023.

Potential Indemnification Claim by Canaccord

On January 13, 2023, the Company received a notice from Cannacord for potential indemnification claims in connection with a Compliant that was filed in the United States District Court for the District of New Jersey by Former Onyx Directors Messrs. Royzenshteyn and Gerashenko, under the caption Royzenshteyn et al. v. Onyx Enterprises Canada Inc., et al. and related to the Business Combination. Canaccord was named as a Defendant in this pending litigation matter and the Company was not directly named as a party to this proceeding. The Company has accepted the indemnification notice from Canaccord and has agreed to indemnify Canaccord for legal and other expenses incurred in connection with this litigation, as applicable.

AutoNation

AutoNation, Inc. filed suit against Onyx Enterprises International Corp. in the Circuit Court for Broward County, FL in June 2023. AutoNation obtained a default judgment against Onyx in August of 2023 in the amount of $256,854.46. We are advised, however, that Onyx is no longer an extant entity, due to a merger of Onyx in 2020 into the entity that became Parts iD, Inc. In November 2023, AutoNation filed a Motion to Join Parts iD as an additional defendant into the proceedings to enforce the default judgment against Onyx, claiming that Parts iD should be held responsible for the judgment amount as a successor or alter ego of Onyx. On December 14, 2023, the Court issued a Notice to Appear directed to Parts iD. Parts iD is due to respond to that Notice on or before January 5, 2024, presenting defenses to the contention that the default judgment against Onyx can be enforced against Parts iD.

Schedule 3.13

CAPITALIZATION AND EQUITY RIGHTS

PARTS iD, Inc.

100,000,000 authorized shares of Class A common stock, 42,932,553 shares of Class A common stock outstanding on November 27, 2023

10,000,000 authorized of Class F common stock (none outstanding)

1,000,000 authorized preferred stock (none outstanding)

Schedule 3.14

SUBSIDIARIES AND INVESTMENTS

Part A

Subsidiaries

Subsidiary		Equity Interest Holder		Amount of authorized, issued and outstanding Equity Interests issued		Amount of Equity Interests held by Equity Interests Holder(s)		Percentage of Ownership
PARTS iD, LLC, a Delaware limited liability company		PARTS iD, Inc.		N/A		N/A			100	%

Part B

Investments

None.

Schedule 3.21

MATERIAL CONTRACTS

Note and Warrant Purchase Agreement, dated as of March 6, 2023, by and between PARTS iD, Inc. and the Purchasers party thereto.

Junior Secured Convertible Promissory Note, dated as of March 6, 2023, issued to 2642186 Ontario Inc.

Junior Secured Convertible Promissory Note, dated as of March 6, 2023, issued to Limestone Development Corporation.

Junior Secured Convertible Promissory Note, dated as of March 6, 2023, issued to Lev Peker.

Junior Secured Convertible Promissory Note, dated as of March 6, 2023, issued to Edwin J. Rigaud.

Common Stock Purchase Warrant, dated as of March 6, 2023, issued to 2642186 Ontario Inc.

Common Stock Purchase Warrant, dated as of March 6, 2023, issued to Lev Peker.

Common Stock Purchase Warrant, dated as of March 6, 2023, issued to Edwin J. Rigaud.

Common Stock Purchase Warrant, dated as of March 6, 2023, issued to Limestone Development Corporation.

10.

Note and Warrant Purchase Agreement, dated as of May 19, 2023, by and between PARTS iD, Inc. and the Purchasers party thereto.

11.

Unsecured Convertible Promissory Note, dated as of May 19, 2023, issued to 2642186 Ontario Inc.

12.

Unsecured Convertible Promissory Note, dated as of May 19, 2023, issued to Lev Peker.

13.

Common Stock Purchase Warrant, dated as of May 19, 2023, issued to 2642186 Ontario Inc.

14.

Common Stock Purchase Warrant, dated as of May 19, 2023, issued to Lev Peker.

15.

Note and Warrant Purchase Agreement, dated as of June 14, 2023, by and between PARTS iD, Inc. and 2642186 Ontario Inc.

16.

Unsecured Convertible Promissory Note, dated as of June 14, 2023, issued to 2642186 Ontario Inc.

17.

Note and Warrant Purchase Agreement, dated as of July 13, 2023, by and between PARTS iD, Inc. and the Purchasers party thereto.

18.

Junior Secured Convertible Promissory Note, dated as of July 13, 2023, issued to Lev Peker.

19.

Junior Secured Convertible Promissory Note, dated as of July 13, 2023, issued to 2642186 Ontario Inc.

20.

Junior Secured Convertible Promissory Note, dated as of July 13, 2023, issued to Edwin J. Rigaud.

21.

Common Stock Purchase Warrant, dated as of July 13, 2023, issued to Lev Peker.

22.

Common Stock Purchase Warrant, dated as of July 13, 2023, issued to 2642186 Ontario Inc.

23.

Common Stock Purchase Warrant, dated as of July 13, 2023, issued to Edwin J. Rigaud.

24.

Securities Purchase Agreement, dated as of July 14, 2023, by and between PARTS iD, Inc. and Lind Global Fund II LP.

25.

Senior Secured Convertible Promissory Note, dated as of July 14, 2023, issued to Lind Global Fund II LP.

26.

Common Stock Purchase Warrant, dated as of July 14, 2023, issued to Lind Global Fund II LP.

27.

Security Agreement, dated as of July 14, 2023, by and between PARTS iD, Inc. and Lind Global Fund II LP.

28.

Guarantor Security Agreement, dated as of July 14, 2023, by and between PARTS iD, Inc. and Lind Global Fund II LP.

29.

Pledge Agreement, dated as of July 14, 2023, by and between PARTS iD, Inc. and Lind Global Fund II LP.

30.

Guaranty, dated as of July 14, 2023, by and between PARTS iD, Inc. and Lind Global Fund II LP.

31.

Trademark Security Agreement, dated as of July 14, 2023, by and between PARTS iD, Inc. and Lind Global Fund II LP.

32.

Placement Agent Common Stock Purchase Warrant, dated as of July 14, 2023, issued to Titan Partners Group LLC.

33.

Subordination Agreement, dated as of July 14, 2023, by and between 2642186 Ontario Inc, Lind Global Fund II, LP and PARTS iD, Inc.

34.

Subordination Agreement, dated as of July 14, 2023, by and between Limestone Development Corporation, Lind Global Fund II, LP and PARTS iD, Inc.

35.

Subordination Agreement, dated as of July 14, 2023, by and between Lev Peker, Lind Global Fund II, LP and PARTS iD, Inc.

36.

Subordination Agreement, dated as of July 14, 2023, by and between Edwin J. Rigaud, Lind Global Fund II, LP and PARTS iD, Inc.

37.

First Amendment to Securities Purchase Agreement, dated as of August 2, 2023, by and between PARTS iD, Inc. and Lind Global Fund II LP.

38.

Second Amendment to Securities Purchase Agreement, dated as of August 18, 2023, by and between PARTS iD, Inc. and Lind Global Fund II LP.

39.

Purchase and Sale of Future Receivables Agreement, dated as of August 29, 2023, by and between Riverside Capital NY, PARTS iD, Inc. and the other Merchants party thereto.

40.

Subordination Agreement, dated as of September 11, 2023, by and between Riverside Capital NY, Lind Global Fund II, LP, PARTS iD, LLC and PARTS iD, Inc.

41.

Standard Merchant Cash Advance Agreement, dated as of September 6, 2023, by and between WAVE ADVANCE INC, PARTS iD, Inc. and the other Merchants party thereto.

42.

Subordination Agreement, dated as of September 11, 2023, by and between Wave Advance Inc., Lind Global Fund II, LP, PARTS iD, LLC and PARTS iD, Inc.

43.

Litigation Funding Agreement, dated as of September 29, 2023, by and among PARTS iD, Inc., PARTS iD, LLC and Pravati Investment Fund VI LP acting through Pravati Capital, LLC.

44.

Restructuring Support Agreement, dated as of October 6, 2023, by and among PARTS iD, Inc., PARTS iD, LLC and the Consenting Vendors party thereto.

45.

Note Purchase Agreement, dated as of October 9, 2023, by and between PARTS iD, Inc. and Lev Peker.

46.

Junior Secured Convertible Promissory Note, dated as of October 9, 2023, issued to Lev Peker.

47.

Note Purchase Agreement, dated as of October 20, 2023, by and between PARTS iD, Inc. and Sanjiv Gomes.

48.

Unsecured Convertible Promissory Note, dated as of October 20, 2023, issued to Sanjiv Gomes.

49.

Note Purchase Agreement, dated as of November 2, 2023, by and between PARTS iD, Inc. and 2642186 Ontario Inc.

50.

Junior Secured Promissory Note, dated as of November 2, 2023, issued to 2642186 Ontario Inc.

51.

Purchase and Sale of Future Receivables Agreement, dated as of November 30, 2023, by and between Riverside Capital NY,PARTS iD, Inc. and the other Merchants party thereto.

52.

Standard Merchant Cash Advance Agreement, dated as of November 30, 2023, by and between WAVE ADVANCE INC, PARTS iD, Inc. and the other Merchants party thereto.

53.

Amended and Restated Note Purchase Agreement, dated December 11, 2023, by and between PARTS iD, Inc., Lev Peker and Sanjiv Gomes.

54.

Amended and Restated Junior Secured Promissory Note, dated as of December 11, 2023, issued to Sanjiv Gomes and Lev Peker.

55.

Consent and Support Agreement dated as of December [18], 2023, executed by Lind Global Fund II LP and Fifth Star, Inc. and acknowledged by PARTS iD, Inc. and PARTS iD, LLC.

56.

Consent and Support Agreement dated as of December [18], 2023, executed by WAVE Advance Inc., Riverside Capital NY and Fifth Star, Inc. and acknowledged by PARTS iD, Inc. and PARTS iD, LLC.

57.

Consent and Support Agreement dated as of December [18], 2023, executed by Pravati Investment Fund IV LP and Fifth Star, Inc. and acknowledged by PARTS iD, Inc. and PARTS iD, LLC.

58.

Consent, Subordination and Support Agreement dated as of December [18], 2023, by 2642186 Ontario Inc., Limestone Development Corporation, Lev Peker, Edwin J. Rigaud, Sanjiv Gomes and Fifth Star, Inc. and acknowledged by PARTS iD, Inc. and PARTS iD, LLC.

Schedule 5.15

DEPOSIT ACCOUNTS

Detail on the main operating account:

Account Holder		Account Bank		Account Bank Address			Type of Account			Account Number

Schedule 6.01

EXISTING INDEBTEDNESS

Senior Secured Convertible Promissory Note, held by Lind Global Fund II, LP, in the principal amount of $5,367,500.

Junior Secured Convertible Promissory Note, held by 2642186 Ontario Inc. in the aggregate principal amount of $2,000,000.

Junior Secured Convertible Promissory Note, held by 2642186 Ontario Inc. in the aggregate principal amount of $1,000,000.

Junior Secured Convertible Promissory Note, held by Limestone Development Corporation in the aggregate principal amount of $250,000.

Junior Secured Convertible Promissory Note, held by Lev Peker in the aggregate principal amount of $250,000.

Junior Secured Convertible Promissory Note, held by Lev Peker in the aggregate principal amount of $1,100,000.

Junior Secured Convertible Promissory Note, held by Lev Peker in the aggregate principal amount of $1,300,000.

Junior Secured Convertible Promissory Note, held by Edwin J. Rigaud in the aggregate principal amount of $400,000.

10.

Junior Secured Convertible Promissory Note, held by Edwin J. Rigaud in the aggregate principal amount of $250,000.

11.

Junior Secured Convertible Promissory Note, held by Sanjiv Gomes in the aggregate principal amount of $1,000,000.

12.

Unsecured Convertible Promissory Note, held by 2642186 Ontario Inc. in the aggregate principal amount of $250,000.

13.

Unsecured Convertible Promissory Note, held by 2642186 Ontario Inc. in the aggregate principal amount of $250,000.

14.

Unsecured Convertible Promissory Note, held by Lev Peker in the aggregate principal amount of $750,000.

15.

Securities Purchase Agreement by and between Lind Global Partners II, L.P. and PARTS iD, Inc., dated July 14, 2023.

16.

Litigation Funding Agreement, dated as of September 29, 2023, by and among PARTS iD, Inc. PARTS iD, LLC and Pravati Investment Fund VI LP acting through Pravati Captial, LLC.

17.

12,837,838 warrants to purchase the Common Stock of PARTS iD, Inc. held by Lind Global Fund II LP

18.

400,000 warrants to purchase Common Stock of PARTS iD, Inc. held by 2642186 Ontario Inc.

19.

520,833 warrants to purchase Common Stock of PARTS iD, Inc. held by 2642186 Ontario Inc.

20.

694,444 warrants to purchase Common Stock of PARTS iD, Inc. held by 2642186 Ontario Inc.

21.

2,380,952 warrants to purchase Common Stock of PARTS iD, Inc. held by 2642186 Ontario Inc.

22.

50,000 warrants to purchase Common Stock of PARTS iD, Inc. held by Limestone Development Corporation.

23.

50,000 warrants to purchase Common Stock of PARTS iD, Inc. held by Lev Peker.

24.

1,562,500 warrants to purchase Common Stock of PARTS iD, Inc. held by Lev Peker.

25.

4,761,904 warrants to purchase Common Stock of PARTS iD, Inc. held by Lev Peker.

26.

80,000 warrants to purchase Common Stock of PARTS iD, Inc. held by Edwin J. Rigaud.

27.

595,238 warrants to purchase Common Stock of PARTS iD, Inc. held by Edwin J. Rigaud.

28.

Future Receivables Agreement dated as of November 30, 2023, by and between PARTS iD, Inc. and Riverside Capital Financing.

29.

Standard Merchant Cash Advance Agreement dated as of November 30, 2023, by and between PARTS iD, Inc. and Wave Advance Inc.

Schedule 6.02

EXISTING LIENS

UCC-1 Financing Statement No. 20232253747 naming PARTS iD, Inc., as debtor and Edwin J. Rigaud, as secured party filed with the Delaware Secretary of State.

UCC-1 Financing Statement No. 20232253805 naming PARTS iD, Inc., as debtor and Lev M. Peker, as secured party filed with the Delaware Secretary of State.

UCC-1 Financing Statement No. 20232253929 naming PARTS iD, LLC, as debtor and Edwin J. Rigaud, as secured party filed with the Delaware Secretary of State.

UCC-1 Financing Statement No. 20232253952 naming PARTS iD, LLC, as debtor and Lev M. Peker, as secured party filed with the Delaware Secretary of State.

UCC-1 Financing Statement No. 20232352762 naming PARTS iD, Inc., as debtor and 2642186 Ontario Inc., as secured party filed with the Delaware Secretary of State.

UCC-1 Financing Statement No. 20232352838 naming PARTS iD, LLC, as debtor and 2642186 Ontario Inc., as secured party filed with the Delaware Secretary of State.

UCC-1 Financing Statement No. 20232455367 naming PARTS iD, LLC, as debtor and Limestone Development Corporation, as secured party filed with the Delaware Secretary of State.

UCC-1 Financing Statement No. 20232455771 naming PARTS iD, Inc., as debtor and Limestone Development Corporation, as secured party filed with the Delaware Secretary of State.

UCC-1 Financing Statement No. 20234900303 naming PARTS iD, Inc., as debtor and Lind Global Fund II LP, as secured party filed with the Delaware Secretary of State.

10.

UCC-1 Financing Statement No. 20234900436 naming PARTS iD, LLC, as debtor and Lind Global Fund II LP, as secured party filed with the Delaware Secretary of State.

11.

UCC-1 Financing Statement No. 20235785380 naming PARTS iD, LLC, as debtor and Corporation Service Company, as secured party filed with the Delaware Secretary of State.

12.

UCC-1 Financing Statement No. 20235785596 naming PARTS iD, Inc., as debtor and Corporation Service Company, as secured party filed with the Delaware Secretary of State.

13.

UCC-1 Financing Statement No. 20236400534 naming PARTS iD, Inc., as debtor, PARTS iD, LLC, as debtor, and Wave Advance Inc, as secured party filed with the Delaware Secretary of State.

14.

UCC-1 Financing Statement No. 20237491276 naming PARTS iD, Inc., as debtor and 2642186 Ontario Inc., as secured party filed with the Delaware Secretary of State.

15.

UCC-1 Financing Statement No. 56813887 naming PARTS iD, Inc., as additional debtor, PARTS iD, LLC, as additional debtor and Wave Advance Inc., as secured party filed with the State of New Jersey Department of the Treasury Division of Revenue & Enterprise Services.

16.

UCC-1 Financing Statement No. 20238547613 naming PARTS iD, Inc., as debtor and Sanjiv Gomes, as secured party filed with the Delaware Secretary of State.

Schedule 6.08

EXISTING RESTRICTIVE AGREEMENTS

Litigation Funding Agreement, dated as of September 29, 2023, by and among PARTS iD, Inc., PARTS iD, LLC and Pravati Investment Fund VI LP acting through Pravati Capital, LLC.

Securities Purchase Agreement, dated as of July 14, 2023, by and between PARTS iD, Inc. and Lind Global Fund II LP.

Senior Secured Convertible Promissory Note, dated as of July 14, 2023, issued to Lind Global Fund II LP.

Common Stock Purchase Warrant, dated as of July 14, 2023, issued to Lind Global Fund II LP.

Security Agreement, dated as of July 14, 2023, by and between PARTS iD, Inc. and Lind Global Fund II LP.

Guarantor Security Agreement, dated as of July 14, 2023, by and between PARTS iD, LLC and Lind Global Fund II LP.

Pledge Agreement, dated as of July 14, 2023, by and between PARTS iD, Inc. and Lind Global Fund II LP.

Guaranty, dated as of July 14, 2023, by PARTS iD, LLC in favor of Lind Global Fund II LP.

Trademark Security Agreement, dated as of July 14, 2023, by and between PARTS iD, LLC and Lind Global Fund II LP.

10.

Note and Warrant Purchase Agreement, dated as of July 13, 2023, by and between the Company and the Purchasers party thereto.

11.

Junior Secured Convertible Promissory Note, dated as of July 13, 2023.

12.

Junior Secured Convertible Promissory Note, dated as of July 13, 2023.

13.

Common Stock Purchase Warrant, dated as of July 13, 2023.

14.

Common Stock Purchase Warrant, dated as of July 13, 2023.

15.

Placement Agent Common Stock Purchase Warrant, dated as of July 14, 2023, issued to Titan Partners Group LLC.

Exhibit 1.01-1

FORM OF

FUNDING ACCOUNT WITHDRAWAL NOTICE¹

, 20___

FIFTH STAR, INC.,

in its capacity as Administrative Agent

222 West Merchandise Mart Plaza, Suite 2982

Chicago, IL 60654

Attention: [ ]

Email: [ ]

Ladies and Gentlemen:

The undersigned, PARTS ID, INC., a Delaware corporation (“Parts iD, Inc.”) and PARTS ID, LLC, a Delaware limited liability company (“Parts iD, LLC”; together with Parts iD, Inc., each a “Borrower” and collectively, the “Borrowers”), refers to that certain Credit Agreement dated as of December 19, 2023 (as amended, restated, supplemented, extended or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrowers, the Roll-Up DIP Lenders from time to time party thereto and FIFTH STAR, INC., as New Bridge Lender, Fifth Star, New Money DIP Lender and as Administrative Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

Pursuant to Section 2.06(c) of the Credit Agreement, the Borrowers hereby gives you notice that it requests the release of funds held in the Funding Account to be used in accordance with the Approved Budget (subject to variances permitted under Section 5.11(b) of the Credit Agreement) (each such release being a “Withdrawal”), and in connection therewith, sets forth below the terms on which each such Withdrawal is requested to be made:

Date(s) of each Withdrawal²		Amount ($) of each Withdrawal				Account details to which funds are to be disbursed
Total		$

Any Funding Account Withdrawal Notice must be delivered by 12:00 p.m. (New York City time), one (1) Business Day prior to the requested funding date; provided that the Administrative Agent, in its discretion, may waive the foregoing prior notice requirements.

Must be a Business Day, which such date shall be the same Business Day for all disbursements requested hereunder (unless the Administrative Agent, in its sole discretion, agrees to release funds on more than one (1) Business Day).

Borrowers hereby represent and warrant as of the date hereof, and, upon acceptance of the Funding Account Withdrawal made in response to this request, Borrowers shall be deemed to have represented and warranted, that the condition to lending specified in Section 4.05[(c)1³[(d)1⁴of the Credit Agreement have been satisfied.

	Very truly yours,

	PARTS ID, INC.

	By:
		Name:
		Title:

	PARTS ID, LLC

	By:
		Name:
		Title:

Insert if the withdrawal is being made pursuant to Section 4.05(c).

⁴

Insert if the withdrawal is being made pursuant to Section 4.05(d).

Exhibit 2.01(c)

FORM OF ROLL-UP DIP LENDER SUPPLEMENT

(See Attached)

ROLL-UP DIP LENDER SUPPLEMENT

THIS ROLL-UP DIP LENDER SUPPLEMENT (this “Supplement”), dated as of December [_], 2023, is entered into among the Persons signatory hereto as Tranche 2 Roll-Up DIP Lenders or Tranche 3 Roll-Up DIP Lenders (collectively, the “Roll-Up DIP Lender”), PARTS ID, INC., a Delaware corporation (the “Company”) and PARTS ID, LLC, a Delaware limited liability company (together with the Company, collectively, the “Borrowers) under that certain Credit Agreement dated as of December 19, 2023 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among the Borrowers, the Lenders from time to time party thereto and FIFTH STAR, INC., as administrative agent for the Lenders (the “Administrative Agent”). All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Credit Agreement.

Each Roll-Up DIP Lender signatory hereto and the Borrowers hereby agree as follows:

1. Each of the Borrowers commenced a proceeding for relief under chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) on December [ ], 2023 (the “Petition Date”), and such proceedings are pending in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). On the Petition Date, the Borrowers filed a motion requesting authorization from the Bankruptcy Court to enter into, ratify and perform all obligations under the Credit Agreement, including the authorization to incur the Obligations and to grant security interests in and liens on all of the Collateral with the priorities set forth in the Credit Agreement and the DIP Order.

2. Such Roll-Up DIP Lender has previously provided financing to Borrowers pursuant to the Existing Bridge Loans set forth on Schedule 2.01(c) to the Credit Agreement opposite such Roll-Up DIP Lender’s name. Such Roll-Up DIP Lender and the Borrowers hereby acknowledge, agree and confirm that, by their execution of this Supplement, subject to the approval of the Bankruptcy Court and entry of the Interim DIP Order, (a) upon the extension of New Money DIP Loans under the Credit Agreement by the New Money DIP Lender on the initial DIP Draw Date, each such Existing Bridge Loan shall automatically be deemed exchanged for and converted into a term loan to the Borrowers as set forth in the Credit Agreement and (b) such Roll-Up DIP Lender will be a Tranche 2 Roll-Up DIP Lender or a Tranche 3 Roll-Up DIP Lender, as applicable, under the Credit Agreement and shall have all of the obligations of a Lender of such Class thereunder as if it had executed the Credit Agreement. The conversion of the Existing Bridge Loans to Tranche 2 Roll-Up DIP Loans and Tranche 3 Roll-Up DIP Loans, as applicable, under the Credit Agreement, and the obligation of the Borrower and Fifth Star to treat such Existing Bridge Loans as Tranche 2 Roll-Up DIP Loans and Tranche 3 Roll-Up DIP Loans, as applicable, under the Credit Agreement is subject in all respects to the approval of the Bankruptcy Court of such conversion and to the terms of the DIP Order.

2. Such Roll-Up DIP Lender hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Credit Agreement, including without limitation (a) the priority of payments set forth in Sections 2.09 and 8.02 of the Credit Agreement, (b) the appointment of the Administrative Agent to act as a non-fiduciary agent for the Lenders set forth in Article 9 of the Credit Agreement, (c) the limited consent rights of the Roll-Up DIP Lender to amendments to the Credit Agreement set forth in Section 10.02 set forth in the Credit Agreement, (d) the restrictions on assignments set forth in Section 10.04 of the Credit Agreement, and (e) the acknowledgment regarding intercreditor agreements in Section 10.26 of the Credit Agreement. Such Roll-Up Lender acknowledges that it has received a copy of the Credit Agreement and that the foregoing enumerated provisions are not intended to be a comprehensive listing of such Roll-Up Lender’s rights and obligations under the Credit Agreement. Such Roll-Up Lender further acknowledges and agrees that the Credit Agreement, and the rights and obligations of the Roll-Up Lender under the Credit Agreement are subject to the terms of the Interim DIP Order and Final DIP Order, as applicable.

2. Such Roll-Up DIP Lender reaffirms its obligations under that certain Consent, Subordination and Support Agreement dated on or about the Effective Date, and acknowledges that such agreement remains in full force and effect and that this Supplement is in addition to, and not in replacement of, such agreement.

3. The notice address of such Roll-Up DIP Lender for purposes of Section 10.01 of the Credit Agreement is set forth on its signature page hereto.

5. This Supplement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which together shall constitute one and the same instrument.

6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND, TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE.

[Remainder of this page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have executed this Supplement as of the date first written above.

	[___ ], as a Tranche 2 Roll-Up DIP Lender

	By:
	Name:	[●]
	Title:	[●]

	Address for Notices:

	[_______________]

Signature Page to Roll-Up DIP Lender Supplement

	[___ ], as a Tranche 3 Roll-Up DIP Lender

	By:
	Name:	[●]
	Title:	[●]

	Address for Notices:

	[_______________]

Signature Page to Roll-Up DIP Lender Supplement

	PARTS ID, INC., as a Borrower

	By:
	Name:	[●]
	Title:	[●]

	PARTS ID, INC., as a Borrower

	By:
	Name:	[●]
	Title:	[●]

Signature Page to Roll-Up DIP Lender Supplement

Acknowledged and Agreed to by:

FIFTH STAR, INC., as Administrative Agent

By:
Name:	[●]
Title:	[●]

Signature Page to Roll-Up DIP Lender Supplement

Exhibit 2.03

FORM OF

BORROWING REQUEST

, 20___

FIFTH STAR, INC.,

in its capacity as Administrative Agent

222 West Merchandise Mart Plaza, Suite 2982

Chicago, IL 60654

Attention: [ ]

Email: [ ]

Ladies and Gentlemen:

Each of the undersigned, PARTS ID, INC., a Delaware corporation (“Parts iD, Inc.”) and PARTS ID, LLC, a Delaware limited liability company (“Parts iD, LLC”; together with Parts iD, Inc., each a “Borrower” and collectively, the “Borrowers”), refers to that certain Credit Agreement dated as of December 19, 2023 (as amended, restated, supplemented, extended or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrowers, the Roll-Up DIP Lenders from time to time party thereto and FIFTH STAR, INC., as New Bridge Lender, Fifth Star, New Money DIP Lender and as Administrative Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.

Borrowers hereby give you notice that they request a New Term Loan pursuant to the provisions of Section 2.03 of the Credit Agreement, and in connection therewith sets forth below the terms on which such New Term Loan is requested to be made:

(1) Date of Borrowing:¹

(2) Aggregate principal amount of Borrowing:

Borrowers hereby represent and warrant as of the date hereof, and, upon acceptance of the Loan made in response to this request, Borrowers shall be deemed to have represented and warranted, that the conditions to lending specified in Sections [4.02]²[4.03]³of the Credit Agreement have been satisfied.]

[Signature Page Follows]

Must be a Business Day.

Insert for each DIP Draw Date.

Insert for the Toggle Draw Date.

BORROWERS:

	Very truly yours,

	PARTS ID, INC.

	By:
		Name:
		Title:

	PARTS ID, LLC

	By:
		Name:
		Title:

Exhibit 2.13-1

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Credit Agreement dated as of December 19, 2023 (as amended, restated, supplemented, extended or otherwise modified from time to time, the “Credit Agreement”), by and among PARTS ID, INC., a Delaware corporation (“Parts iD, Inc.”), PARTS ID, LLC, a Delaware limited liability company (“Parts iD, LLC”; together with Parts iD, Inc., each a “Borrower” and collectively, the “Borrowers”), the Roll-Up DIP Lenders from time to time party thereto and FIFTH STAR, INC., as New Bridge Lender, Fifth Star, New Money DIP Lender and as Administrative Agent.

Pursuant to the provisions of Section 2.13 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s), (ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code and (iv) it is not a “controlled foreign corporation” related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and Borrowers with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform Borrowers and the Administrative Agent, and (2) the undersigned shall have at all times furnished Borrowers and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

LENDER:	[_____________________________ ]

	By:
		Name:
		Title:

Exhibit 2.13-2

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.13 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, and (iv) it is not a “controlled foreign corporation” related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

PARTICIPANT:	[_____________________________ ]

	By:
		Name:
		Title:

Exhibit 2.13-3

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.13 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor any of its direct or indirect partners/members is a “bank” extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a “controlled foreign corporation” related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN, (ii) an IRS Form W-8BEN-E or (iii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E, as applicable from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

PARTICIPANT:	[_____________________________ ]

	By:
		Name:
		Title:

Exhibit 2.13-4

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Pursuant to the provisions of Section 2.13 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s), (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a “bank” extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a “controlled foreign corporation” related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and Borrowers with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN, (ii) an IRS Form W-8BEN-E, or (iii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform Borrowers and the Administrative Agent, and (2) the undersigned shall have at all times furnished Borrowers and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

LENDER:	[_____________________________ ]

	By:
		Name:
		Title:

Exhibit 3.26

APPROVED BUDGET

(See Attached)

Exhibit 5.01

FORM OF

COMPLIANCE CERTIFICATE

For the Fiscal Period ended_____________ ___, 20___

This Compliance Certificate is delivered to you pursuant to Section 5.01(d) of that certain Credit Agreement dated as of December 19, 2023 (as amended, restated, supplemented, extended or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrowers (as defined below), the Roll-Up DIP Lenders from time to time party thereto and FIFTH STAR, INC., as New Bridge Lender, Fifth Star, New Money DIP Lender and as Administrative Agent. Capitalized terms used but not otherwise defined herein shall have the meanings provided in the Credit Agreement.

I, [ ], the [ ] of PARTS ID, INC., a Delaware corporation (“Parts iD, Inc.”) and PARTS ID, LLC, a Delaware limited liability company (“Parts iD, LLC”; together with Parts iD, Inc., each a “Borrower” and collectively, the “Borrowers”) hereby certify solely in my capacity as a Responsible Officer of each Borrower and not in my individual capacity that the following information is accurate as of the date hereof.

(i) [The company-prepared financial statements which accompany this certificate present fairly in all material respects the financial condition and results of operations of each Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, [except as otherwise disclosed in such financial statements] [subject to normal year end audit adjustments and the absence of footnotes]¹.]²

(ii) Since [ ]³ [no Default or Event of Default has occurred under the Credit
Agreement][a Default or Event of Default has occurred, as described on Annex 1 hereto, and the action taken or proposed to be taken with respect thereto is described on Annex 1 hereto].

(iii) Since [ ]⁴ [there has been no change in GAAP or in the application thereof
that has an impact on the financial statements of Parts iD, Inc. and its Subsidiaries][a change in GAAP or in the application thereof has occurred which has an impact on the financial statements of Parts iD, Inc. and its Subsidiaries, with the effect of such change on the financial statements described on Annex [1][2] hereto].

(iv) [Since the Effective Date and except as previously notified to, or disclosed in prior Compliance Certificates delivered to Administrative Agent, neither of the Borrowers, nor any Subsidiary has:

(1) changed its legal name, organizational identity, jurisdiction of organization or identification number; or

(2) changed the location of its chief executive office or its locations of Inventory (other than (i) Inventory in transit in the Ordinary Course of Business and (ii) Inventory at locations described in clauses (i), and (ii) of Section 6(o) of the Security Agreement), except as follows:____________________________

Clause not to be included with year-end financial statements.

Note to DLA: Company should still deliver a copy of the financials and certify to Fifth Star as to their accuracy/GAAP compliance.

The date of the last similar certification, or, if none, the Effective Date.

⁴

The date of the last similar certification, or, if none, the Effective Date.

; or

(3) acquired or otherwise obtained any Collateral consisting of, or any amount payable under or in connection with any of the Collateral evidenced by, Investment Related Property, Chattel Paper (electronic, tangible or otherwise), or Negotiable Collateral (other than Documents issued by warehouseman or carrier to a Guarantor in the Ordinary Course of Business), except as indicated on Attachment D; or

(4) filed an application for the registration of, any Patent, Trademark, or Copyright with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency, except as follows:

].]

(v) Delivered herewith as Attachment A are reasonably detailed calculations of the variance report and such other supporting documentation requested by Fifth Star as required pursuant to Section 5.11(a) of the Credit Agreement and a statement of whether Borrowers were in compliance with the Annual Budget on each Friday of each weekly period occurring within the Fiscal Period referred to above pursuant to Section 5.11(b) of the Credit Agreement.

(vi) Except to the extent previously delivered, delivered herewith as Attachment B are updated schedules required to be delivered pursuant to Section 6 of the Security Agreement.

(vii) [Delivered herewith as Attachment C are certificates of Borrowers’ insurance brokers, evidencing all insurance required by Section 5.05 of the Credit Agreement and showing the Administrative Agent is named as lender’s loss payee and additional insured with respect thereto.]⁵

[Remainder of Page Intentionally Left Blank]

⁵

To be included only with year-end financial statements.

This ___ day of________ , 20___.

	PARTS ID, INC.

	By:
		Name:
		Title:

	PARTS ID, LLC

	By:
		Name:
		Title:

“Attachment A” to Compliance Certificate

[See attached for Variance Report]

Certification regarding Section 5.11(b) of the Credit Agreement

The cash receipts and aggregate cash disbursements (excluding debtor and lender professional fees) for the applicable weekly period do not vary by more than 10% from the Approved Budget for such period.

Yes ___ No ___

[“Attachment B” to Compliance Certificate]

[Updated schedules and collateral information pursuant to the Security Agreement]

[“Attachment C” to Compliance Certificate]

[Insurance Certificates]

[“Attachment D” to Compliance Certificate]

[Possessory Collateral]

[Annex [1][2] to Compliance Certificate]

Exhibit 10.04(b)(iv)

FORM OF

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between_______ [insert name of Assignor] (the “Assignor”) and ________________ [insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as may be amended, restated, supplemented, extended or otherwise modified from time to time, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto (the “Standard Terms and Conditions”) are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement, and any other documents or instruments delivered pursuant thereto, to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity, in each case to the extent related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

(i) Assignor:

(ii) Assignee:

[and is an Affiliate/Approved Fund of [identify Lender]

(iii) Borrowers: PARTS ID, INC., a Delaware corporation and PARTS ID, LLC, a Delaware limited liability company

(iv) Administrative Agent: FIFTH STAR, INC., as the administrative agent under the Credit Agreement

(v) Credit Agreement: The Credit Agreement dated as of December 19, 2023 (as amended, restated, supplemented, extended or otherwise modified from time to time), by and among the Borrowers, the Roll-Up DIP Lenders from time to time party thereto, FIFTH STAR, INC., as New Bridge Lender, Fifth Star, New Money DIP Lender and as Administrative Agent.

(vi) Assigned Interest:

Facility Assigned

Aggregate Amount
of
New Term Loan
Commitments / Loans
for all Lenders

Amount of
New Term Loan
Commitments / Loans
Assigned

Percentage Assigned of
New Term Loan Commitments /
Loans¹

New Term Loan

Roll-Up DIP Loan

(vii) [Trade Date: ]

Effective Date: ___________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

	ASSIGNOR:

	[NAME OF ASSIGNOR]

	By:
	Title:

	ASSIGNEE:

	[NAME OF ASSIGNEE]

	By:
	Title:

Set forth, to at least 9 decimals, as a percentage of the New Term Loan Commitments / Loans of all Lenders thereunder.

[Consented to and] Accepted:	FIFTH STAR, INC., as Administrative Agent

	By:
		Name:
		Title:

[Consented to:²]	PARTS ID, INC.,a Delaware corporation

	By:
		Name:
		Title:

	PARTS ID, LLC, a Delaware limited liability company

	By:
		Name:
		Title:

To be added only if the consent of the Borrowers is then required by the terms of the Credit Agreement.

ANNEX I

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver the Assignment and Assumption and to consummate the transactions contemplated hereby, and (iv) it is not a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrowers, any of their Subsidiaries or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrowers, any of their Subsidiaries or any other Person of any of their respective obligations under any Loan Document.

1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all requirements for an assignee under Section 10.04(b) of the Credit Agreement (subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest, on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, (vi) attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement (including Section 2.13(g)), duly completed and executed by the Assignee, and (vii) all of the representations and warranties contained in Section 9.04(c) of the Credit Agreement are true and correct and the Assignee hereby agrees to the covenants contained in such Section; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to Assignee for amounts which have accrued from and after the Effective Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy or electronic mail shall be effective as delivery of a manually executed counterpart of a signature page of this Assignment and Assumption. This Assignment and Assumption shall be governed by and construed in accordance with, the law of the State of New York.

Exhibit 10.2

EXECUTION VERSION

PLEDGE AND SECURITY AGREEMENT

This PLEDGE AND SECURITY AGREEMENT (this “Agreement”) dated as of December 19, 2023, is by and among the parties listed on the signature pages hereof as “Grantors” and those additional entities that hereafter become parties hereto from time to time in accordance with the terms of the Credit Agreement (as defined below) by executing the form of Supplement attached hereto as Annex 1 (each a “Grantor” and collectively, “Grantors”), FIFTH STAR, INC., as Administrative Agent for the Lenders (in such capacity, together with its successors and permitted assigns, the “Administrative Agent”).

WHEREAS, PARTS ID, LLC, a Delaware limited liability company (“Parts iD, LLC”), PARTS ID, INC., a Delaware corporation (“Parts iD, Inc.”; together with Parts iD, LLC, each, individually, a “Borrower”, and collectively, “Borrowers”), the Persons party thereto as a lender (each a “Lender”, and collectively, the “Lenders”), and the Administrative Agent, will enter into that certain Credit Agreement dated as of the date hereof (as amended, amended and restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”); and

WHEREAS, to induce the Administrative Agent, and the Lenders to enter into the Credit Agreement and the other Loan Documents and make available the financial accommodations to Borrowers as provided for in the Credit Agreement, each Grantor has agreed to grant a continuing security interest in and to such Grantor’s right, title and interest in the Collateral (as defined below) in order to secure the prompt and complete payment, and performance of all Secured Obligations (as defined below).

NOW, THEREFORE, in consideration of the recitals above and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, each Grantor hereby agrees with the Administrative Agent, for the benefit of the Secured Parties, as follows:

1. Defined Terms

(a) The following terms which are defined in the New York UCC are used herein as so defined, and, if defined in more than one article of the New York UCC, have the meaning given in Article 9 thereof (notwithstanding any other definition for any of such terms as may be set forth in the Credit Agreement): Account, Account Debtor, As-extracted Collateral, Cash Proceeds, Chattel Paper, Commercial Tort Claims, Commodity Account, Commodities Intermediary, Deposit Account, Documents, Electronic Chattel Paper, Equipment, Farm Products, Financial Asset, Fixtures, General Intangibles, Goods, Health-Care-Insurance Receivable, Instruments, Inventory, Investment Property, Letter of Credit, Letter of Credit Rights, Manufactured Home, Money, Records, Securities Account, Securities Intermediary, Supporting Obligations, and Tangible Chattel Paper. All other capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the Credit Agreement.

(b) In addition to those terms defined elsewhere in this Agreement, as used in this Agreement, the following terms shall have the following meanings:

“Administrative Agent’s Lien” means the Liens granted by Grantors to the Administrative Agent, for the benefit of the Secured Parties, under this Agreement and the other Loan Documents.

“Books” means books and records (including each Grantor’s Records indicating, summarizing, or evidencing each Grantor’s Records relating to such Grantor’s business operations or financial condition, and each Grantor’s Goods or General Intangibles related to such information).

“Borrowers” has the meaning specified therefor in the recitals to this Agreement.

“Collateral” has the meaning specified therefor in Section 2.

“Copyright Security Agreement” means each Copyright Security Agreement among Grantors, or any of them, and the Administrative Agent, for the benefit of the Secured Parties, in a form reasonably acceptable to the Administrative Agent, evidencing the grant to Administrative Agent, for the benefit of the Secured Parties, of a security interest in all such Grantors’ respective U.S. registered Copyrights.

“Copyrights” means (a) all domestic and foreign copyrights, whether registered or unregistered and whether or not the underlying works of authorship have been published, including but not limited to copyrights in software and databases, all Mask Works (as defined in 17 U.S.C. 901 of the U.S. Copyright Act), all right, title and interest to make and exploit all derivative works based on or adopted from works covered by such copyrights, and all copyright registrations, and copyright registration applications, and supplemental registrations, and any renewals, or extensions thereof, including, without limitation, each registration and application identified in Schedule 3, (b) the rights to print, publish and distribute any of the foregoing, (c) the right to sue or otherwise recover for any and all past, present and future infringements and misappropriations thereof, and (d) all income, royalties, damages and other payments now and hereafter due and/or payable under and with respect to any of the foregoing.

“Credit Agreement” has the meaning specified therefor in the recitals to this Agreement.

“Excluded Property” means, collectively, any U.S. intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law, provided that upon filing with the U.S. Patent and Trademark Office of a “Statement of Use” or “Amendment to Allege Use” with respect thereto pursuant to Section 1(c) or Section 1(d) of the Lanham Act, 15 U.S C § 1051 (or any successor provision), such intent-to-use trademark application shall be considered Collateral; provided, however, that “Excluded Property” shall not include any rights or interests of any Grantor in any proceeds from the sale, license, lease, or any other disposition of the foregoing.

“Grantor” and “Grantors” has the meaning specified therefor in the preamble to this Agreement.

“Insolvency Proceeding” means (a) any case, action or proceeding before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, including a proceeding under Title 11 of the United States Code, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors, in each of case (a) and (b) undertaken under any Debtor Relief Laws.

“Insurance” means all insurance policies covering any or all of the Collateral (regardless of whether the Administrative Agent is the loss payee thereof).

“Intellectual Property” means any and all Patents, Copyrights, Trademarks, and Trade Secrets.

“Intellectual Property Licenses” means any license agreement providing for the grant of any right in or to any Intellectual Property, whether the applicable Grantor is a licensee or licensor under any such license agreement, including the license agreements listed on Schedule 4.

“Investment Related Property” means (a) all Investment Property, and (b) all of the following regardless of whether classified as Investment Property under the UCC: all Pledged Interests, Pledged Operating Agreements, and Pledged Partnership Agreements

“Negotiable Collateral’ means Letters of Credit, Letter of Credit Rights, Instruments, drafts and Documents.

“New York UCC’ means the Uniform Commercial Code from time to time in effect in the State of New York.

“Patent Security Agreement” means each Patent Security Agreement among Grantors, or any of them, and Administrative Agent, for the benefit of the Secured Parties, in a form reasonably acceptable to the Administrative Agent, evidencing the grant to Administrative Agent, for the benefit of the Secured Parties, of a security interest in all the applicable Grantors’ respective U.S. issued Patents.

“Patents” means (a) all domestic and foreign patents, patent applications and patentable inventions, including, without limitation, each issued patent and patent application identified in Schedule 5, and all certificates of invention or similar industrial property rights, (b) all inventions and improvements described and claimed therein, (c) the right to sue or otherwise recover for any and all past, present and future infringements and misappropriations thereof, (d) all income, royalties, damages and other payments now and hereafter due and/or payable with respect to any of the foregoing, and (e) all reissues, divisional, continuations, continuations-in-part, and extensions thereof.

“Pledged Companies” means, each Person listed on Schedule 6 (as such schedule may be amended, supplemented or otherwise modified from time to time) as a “Pledged Company”, together with each other Person, all or a portion of whose Equity Interests, is acquired or otherwise owned by a Grantor after the Effective Date to the extent such pledge after the Effective Date is required under Section 5.08 of the Credit Agreement.

“Pledged Interests” means all of each Grantor’s right, title and interest in and to all of the Equity Interests now or hereafter owned by such Grantor, regardless of class or designation, including in each of the Pledged Companies, and all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto, including any certificates representing the Equity Interests, the right to require after the occurrence and during the continuation of an Event of Default that such Equity Interests be registered in the name of the Administrative Agent or any of its nominees, the right to receive any certificates representing any of the Equity Interests and the right to require that such certificates be delivered to the Administrative Agent together with undated powers or assignments of investment securities with respect thereto, duly endorsed in blank by such Grantor, all warrants, options, share appreciation rights and other rights, contractual or otherwise, in respect thereof and of all dividends, distributions of income, profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and cash, Instruments, and other property from time to time received, receivable, or otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange for any or all of the foregoing, in each such case to the extent not specifically excluded from the Collateral.

“Pledged Interests Addendum” means a Pledged Interests Addendum substantially in the form of Exhibit A attached hereto.

“Pledged Operating Agreements” means all of each Grantor’s rights, powers, and remedies under the limited liability company operating agreements of each of the Pledged Companies that are limited liability companies.

“Pledged Partnership Agreements” means all of each Grantor’s rights, powers, and remedies under the partnership agreements of each of the Pledged Companies that are partnerships.

“Proceeds” has the meaning specified therefor in Section 2.

“Requirement of Law” means, as to any Person, any law (statutory or common), treaty, rule, regulation, guideline or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its assets or to which the Person or any of its assets is subject.

“Secured Obligations” means all Obligations (as defined in the Credit Agreement).

“Security Interest’ has the meaning specified therefor in Section 2.

‘‘Trade Secrets” means (a) all trade secrets and all confidential and proprietary information, including know-how, manufacturing and production processes and techniques, inventions, research and development information, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans, and customer and supplier lists and information, (b) the right to sue or otherwise recover for any and all past, present and future infringements, misappropriations and other violations thereof, and (c) all income, royalties, damages and other payments now and hereafter due and/or payable with respect to any of the foregoing.

“Trademark Security Agreement’ means each Trademark Security Agreement among Grantors, or any of them, and the Administrative Agent, in each case for the benefit of the Secured Parties, in a form reasonably acceptable to the Administrative Agent, evidencing the grant to Administrative Agent, for the benefit of the Secured Parties, of a security interest in all such Grantors’ respective U.S. registered Trademarks.

“Trademarks” means (a) all domestic and foreign trademarks, service marks, trade names, corporate names, company names, business names, trade dress, fictitious business names, trade styles, logos, or other indicia of origin or source identification, internet domain names, trademark and service mark registrations, and applications for trademark or service mark registrations and any renewals thereof, including, without limitation, each registration and application identified in Schedule 7, (b) the right to sue or otherwise recover for any and all past, present and future infringements, dilutions and misappropriations thereof, (c) all income, royalties, damages and other payments now and hereafter due and/or payable with respect to any of the foregoing, and (d) all other rights of any kind whatsoever accruing thereunder or pertaining thereto, together in each case with the goodwill of the business connected with the use of, and symbolized by, each of the above.

“URL” means “uniform resource locator,” an internet web address.

2. Grant of Security. Each Grantor hereby grants, collaterally assigns, and pledges to the Administrative Agent, for the benefit of the Secured Parties, a continuing security interest (hereinafter referred to as the “Security Interest”) in and lien on all of such Grantor’s right, title, and interest in and to the following property, in each case whether now owned or existing or hereafter acquired or arising and wherever located (the “Collateral”):

(a) all Accounts;

(b) all Books;

(d) all Deposit Accounts;

(e) all Equipment and Fixtures,

(f) all Farm Products,

(g) all General Intangibles;

(h) all Insurance,

(i) all Intellectual Property and Intellectual Property Licenses;

(j) all Inventory;

(k) all Investment Related Property,

(l) all Negotiable Collateral;

(m) all Supporting Obligations;

(n) all Commercial Tort Claims, including those listed on Schedule 2;

(o) all Goods not otherwise described above,

(p) all Money and Cash Equivalents

(q) all other assets of such Grantor that now or hereafter come into the possession, custody, or control of the Administrative Agent or any other Secured Party; and

(r) all accessions thereto and all of the proceeds and products thereof, whether tangible or intangible, of any of the foregoing, including proceeds of insurance or Commercial Tort Claims covering or relating to any or all of the foregoing, and any and all Accounts, Books, Chattel Paper, Deposit Accounts, Equipment, Fixtures, Farm Products, General Intangibles, Inventory, Investment Related Property, Negotiable Collateral, Supporting Obligations, Cash Proceeds, or other tangible or intangible property resulting from the sale, lease, license, exchange, collection, or other disposition of any of the foregoing, the proceeds of any award in condemnation with respect to any of the property of Grantors, any rebates or refunds, whether for taxes or otherwise, and all proceeds of any such proceeds, or any portion thereof or interest therein, and the proceeds thereof, and all proceeds of any loss of, damage to, or destruction of the above, whether insured or not insured, and, to the extent not otherwise included, any indemnity, warranty, or guaranty payable by reason of loss or damage to, or otherwise with respect to any of the foregoing Collateral (the “Proceeds”). Without limiting the generality of the foregoing, the term “Proceeds” includes whatever is receivable or received when Investment Related Property or proceeds are sold, exchanged, collected, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes proceeds of any indemnity or guaranty payable to any Grantor or the Administrative Agent from time to time with respect to any of the Investment Related Property;

provided, however, that “Collateral” shall not, and the security interest granted hereunder shall not, include any Excluded Property, and provided, further, however, that if and when any property shall cease to be Excluded Property, such property shall be deemed at all times from and after the date thereof to constitute Collateral.

3. Security for Obligations. This Agreement and the Security Interest created hereby secures the payment and performance of all of the Secured Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts which constitute part of the Secured Obligations and would be owed by Grantors, or any of them, to the Administrative Agent or any of the Secured Parties, but for the fact that they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving any Grantor.

4. Grantors Remain Liable. Anything herein to the contrary notwithstanding, each of the Grantors shall remain liable under the contracts and agreements included in the Collateral, including the Pledged Operating Agreements and the Pledged Partnership Agreements, to perform all of the duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by the Administrative Agent for the benefit of the Secured Parties of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under such contracts and agreements included in the Collateral, and (c) no Secured Party shall have any obligation or liability under such contracts and agreements included in the Collateral by reason of this Agreement, nor shall any Secured Party be obligated to perform any of the obligations or duties of any Grantors thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. Without limiting the generality of the foregoing, it is the intention of the parties hereto that record and beneficial ownership of the Pledged Interests, including all voting, consensual, and dividend rights, shall remain in the applicable Grantor until the occurrence of an Event of Default and until the Administrative Agent shall notify the applicable Grantor of Administrative Agent’s exercise of voting, consensual, or dividend rights with respect to the Pledged Interests pursuant to Section 15; and except as provided herein, in the Credit Agreement or any other Loan Document, each Grantor shall have the right to possession and enjoyment of such Grantor’s Collateral for the purpose of conducting the business of such Grantor in the Ordinary Course of Business.

5. Representations and Warranties. Each Grantor hereby represents and warrants as follows to the Administrative Agent, for the benefit of the Secured Parties, which representations and warranties shall be true, correct, and complete, as of the Effective Date (after giving effect to the Transactions), and shall be true, correct, and complete in all material respects (unless any such representation or warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects), as of the date of the making of each Borrowing (or other extension of credit) made thereafter, as though made on and as of the date of such Borrowing (or other extension of credit) (except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (unless any such representation or warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects) as of such earlier date), and such representations and warranties shall survive the execution and delivery of this Agreement, as follows:

(a) Name; Chief Executive Office. The exact legal name of each of the Grantors is set forth on the signature pages of this Agreement or a written notice provided to the Administrative Agent pursuant to Section 6. Such Grantor’s organizational identification number (within the meaning of Section 9-516(b)(5)(C)(iii) of the UCC), and its chief executive office, principal place of business and the principal place where such Grantor maintains its records concerning the Collateral are located at the address set forth on Schedule 1 (as such Schedule is in effect on the Effective Date or amended from time to time pursuant to Section 6(b) hereof). If such Grantor is a corporation, limited liability company, limited partnership, corporate trust or other registered organization, the state (or if not a state, the other jurisdiction) under whose law such registered organization was organized is set forth on Schedule 1 (as such Schedule is in effect on the Effective Date or amended from time to time pursuant to Section 6(b) hereof).

(b) Inventory and Equipment. The Equipment, Inventory and other Goods of such Grantor are located at the addresses further set forth for such Grantor on Schedule 1 or Schedule 8 as each such Schedule is in effect on the Effective Date and amended from time to time pursuant to Section 6(b) hereof).

(c) Intellectual Property. As of the Effective Date, (a) Schedule 3 provides a complete and correct list of all registered Copyrights owned by any Grantor and all pending applications for registration of Copyrights owned by any Grantor, and all other Copyrights owned by any Grantor that are material to the conduct of the business of such Grantor; (b) Schedule 4 provides a complete and correct list of all Intellectual Property Licenses entered into by any Grantor pursuant to which (i) any Grantor has provided any license or other rights in Intellectual Property owned or controlled by such Grantor to any other Person (other than non-exclusive licenses granted in the Ordinary Course of Business) or (ii) any Person has granted to any Grantor any license or other rights in Intellectual Property owned or controlled by such Person that is material to the business of such Grantor (other than non-exclusive software licenses granted in the Ordinary Course of Business), (c) Schedule 5 provides a complete and correct list of all issued Patents owned by any Grantor and all pending applications for Patents owned by any Grantor, and all other Patents owned by any Grantor that are material to the conduct of the business of any Grantor, and (d) Schedule 7 provides a complete and correct list of all registered Trademarks owned by any Grantor and all pending applications for registration of Trademarks owned by any Grantor, and all other Trademarks owned by any Grantor that are material to the conduct of the business of any Grantor. On the date hereof, no action or proceeding seeking to limit, cancel or question the validity of any Intellectual Property owned by such Grantor or such Grantor’s ownership interest therein is pending or, to the knowledge of a Responsible Officer of such Grantor, threatened in writing, in each case except as could not reasonably be expected to result in a Material Adverse Effect.

(d) Perfection and Priority. This Agreement creates a valid security interest in the Collateral of each of the Grantors, to the extent a security interest therein can be created under the UCC, securing the payment of the Secured Obligations. Except to the extent a security interest in the Collateral cannot be perfected by the filing of a financing statement under the UCC or the delivery of any Control Agreements with respect to Deposit Accounts included in the Collateral, all filings and other actions necessary or desirable to perfect such security interest have been duly taken or will have been taken upon the filing of financing statements listing each applicable Grantor, as a debtor, and the Administrative Agent, as secured party, in the jurisdictions listed next to such Grantor’s name on Schedule 9 or the delivery of any Control Agreements with respect to Deposit Accounts included in the Collateral. Upon the making of such filings or delivery of such Control Agreements, the Administrative Agent shall have a first priority (subject only to Permitted Senior Encumbrances or as otherwise provided in the Credit Agreement) perfected security interest in the Collateral of each Grantor to the extent such security interest can be perfected by the filing of a financing statement or delivery of a Control Agreement. All action by any Grantor necessary to perfect such security interest on each item of Collateral (to the extent such security interest can be perfected by the filing of a financing statement) has been duly taken. Additionally, this Agreement is effective to create a valid and continuing Security Interest in all United States registered Copyrights, Intellectual Property Licenses, Patents and Trademarks and, upon filing of the Copyright Security Agreement with the U.S Copyright Office and filing of the Patent Security Agreement and the Trademark Security Agreement with the U.S. Patent and Trademark Office, and the filing of appropriate financing statements in the jurisdictions listed on Schedule 9, all action necessary to perfect the Security Interest in and to each Grantor’s United States issued Patents and Patent applications, United States registered Trademarks and Trademark applications, or United States registered Copyrights, has been taken and such perfected Security Interests are enforceable as such as against any and all creditors of and purchasers from any Grantor. For clarity and notwithstanding anything to the contrary in this Agreement, any filing, recordation or perfection obligations hereunder with respect to Intellectual Property shall be limited solely to the U.S. Patent and Trademark Office and the U.S. Copyright Office, as applicable.

(e) Pledged Interests, (i) Each Grantor is and will at all times be the sole holder of record and the legal and beneficial owner, free and clear of all Liens other than Permitted Encumbrances, of the Pledged Interests indicated on Schedule 6 as being owned by such Grantor and, when acquired by such Grantor, any Pledged Interests acquired after the Effective Date, (ii) all of the Pledged Interests are duly authorized, validly issued, fully paid and with respect to a corporation, nonassessable, and the Pledged Interests constitute or will constitute the percentage of the issued and outstanding Equity Interests of the Pledged Companies of such Grantor as are listed and identified on Schedule 6 as supplemented or modified by any Pledged Interests Addendum or any Supplement to this Agreement; (iii) all Pledged Interests owned directly by the Grantors as of the Effective Date are listed and identified on Schedule 6, (iv) such Grantor has the right and requisite authority to pledge the Investment Related Property pledged by such Grantor to the Administrative Agent as provided herein, (v) all actions necessary or desirable to perfect, establish the first priority of (subject to Permitted Senior Encumbrances), or otherwise protect, the Administrative Agent’s Security Interest in the Investment Related Property, and the proceeds thereof, will have been duly taken, (A) upon the execution and delivery of this Agreement; (B) upon the taking of possession by the Administrative Agent of any certificates constituting the Pledged Interests, to the extent such Pledged Interests are represented by certificates, together with undated powers endorsed in blank by the applicable Grantor, (C) upon the filing of financing statements in the applicable jurisdiction set forth on Schedule 9 for such Grantor with respect to the Pledged Interests of such Grantor that are not represented by certificates, and (D) with respect to any Securities Accounts and Commodity Accounts, upon the delivery of Control Agreements with respect thereto; and (vi) each Grantor has delivered to and deposited with the Administrative Agent (or, with respect to any Pledged Interests created or obtained after the Effective Date, will deliver and deposit in accordance with Sections 6(c) and 8) all certificates representing the Pledged Interests owned by such Grantor, and undated powers endorsed in blank with respect to such certificates. None of the Pledged Interests owned or held by such Grantor has been issued or transferred in violation of any securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject.

(f) [Reserved],

(g) Commercial Tort Claims. The only Commercial Tort Claims of any Grantor existing on the date hereof (regardless of whether the amount, defendant or other material facts can be determined and regardless of whether such Commercial Tort Claim has been asserted, threatened or has otherwise been made known to the obligee thereof or whether litigation has been commenced for such claims) are those listed on Schedule 2 (Commercial Tort Claims), which sets forth such information separately for each Grantor.

(h) Deposit Accounts, Securities Accounts; Commodity Accounts. Schedule 10 sets forth as of the Effective Date all Deposit Accounts, Securities Accounts and Commodity Accounts owned by Grantors as of the Effective Date, including, (a) with respect to each bank, Securities Intermediary or Commodities Intermediary the name and address of such person, (b) the accounts numbers of the Deposit Accounts, Securities Accounts or Commodity Accounts maintained with such person and (c) the purpose of such account. Each Grantor is the sole entitlement holder or customer of each such account, and such Grantor has not consented to, and is not otherwise aware of, any Person (other than the Administrative Agent pursuant hereto) having “control” (within the meanings of Sections 8-106, 9-106 and 9-104 of the UCC) over any such Securities Account, Commodity Account or Deposit Account or any securities, commodities or other property credited thereto.

(i) Change in Circumstances As of the Effective Date, no Grantor has (i) within the period of five years prior to the Effective Date, changed its jurisdiction of organization; (ii) except as specified in Schedule 11 hereto, changed its legal name; (iii) except as specified in Schedule 11, become a “new debtor” (as defined in the UCC) with respect to a currently effective security agreement previously entered into, or (iv) changed its identity or corporate structure within the past five years.

(j) No Special Collateral None of the Collateral constitutes, or is the Proceeds of, (i) As-extracted Collateral, (ii) Manufactured Homes, (iii) timber to be cut, (iv) Health-Care- Insurance Receivables, or (v) aircraft, aircraft engines, satellites, ships, or railroad rolling stock. No material portion of the Collateral consists of government receivables, or motor vehicles or other goods subject to a certificate of title statute of any jurisdiction.

6. Covenants. Each Grantor, jointly and severally, covenants and agrees with the Administrative Agent as follows:

(a) Name, Organization Identification Number. No Grantor shall change its or any of its Subsidiaries’ name, organizational identification number, state of organization or organizational identity.

(b) Locations. Grantors shall maintain their Inventory only at the locations identified on Schedule 8 and on Schedule 1 and their chief executive offices only at the locations identified on Schedule 1.

(c) Possession of Collateral. Each Grantor shall promptly (and in any event within two (2) Business Days after such event occurs) notify the Administrative Agent in writing upon acquiring or otherwise obtaining any Collateral after the date hereof consisting of, or any amount payable under or in connection with any of the Collateral being or becoming evidenced after the date hereof by, Negotiable Collateral (other than Documents issued by a warehouseman or carrier to a Grantor in the Ordinary Course of Business of such Grantor), Investment Related Property, or Chattel Paper (electronic, tangible or otherwise), and, in each such case if the perfection or priority of the Administrative Agent’s Security Interest is dependent upon or enhanced by possession, upon the reasonable request of the Administrative Agent and in accordance with Section 8, promptly execute such other documents, or if applicable, endorse and deliver physical possession of such Negotiable Collateral, Investment Related Property, or Chattel Paper to the Administrative Agent, together with such undated powers endorsed in blank as shall be requested by the Administrative Agent, and do such other acts or things deemed reasonably necessary or desirable by the Administrative Agent to protect Administrative Agent’s Security Interest therein.

(d) Chattel Paper.

(i) Each Grantor shall take all steps reasonably necessary to grant the Administrative Agent control of all Electronic Chattel Paper in accordance with the UCC and all “transferable records” as that term is defined in Section 16 of the Uniform Electronic Transaction Act and Section 201 of the federal Electronic Signatures in Global and National Commerce Act as in effect in any relevant jurisdiction.

(ii) If any Grantor retains possession of any Tangible Chattel Paper or Instruments that are included in the Collateral (which retention of possession shall be subject to the extent permitted hereby, including, without limitation. Section 6(c) and by the Credit Agreement), promptly upon the request of the Administrative Agent, such Tangible Chattel Paper and Instruments shall be marked with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the Security Interest of Fifth Star, Inc., as Administrative Agent for the benefit of the Secured Parties”.

(e) Control Agreements

(i) Except as otherwise provided in the Credit Agreement (including without limitation Sections 5.10, 5.12 and 5.16 thereof), each Grantor shall obtain an authenticated Control Agreement, from each bank holding a Deposit Account for such Grantor.

(ii) Except as otherwise provided in the Credit Agreement (including without limitation Sections 5.10, 5.12 and 5.16 thereof), each Grantor shall obtain authenticated Control Agreements, from each issuer of uncertificated securities, Securities Intermediary, or Commodities Intermediary issuing or holding any Financial Assets or commodities to or for any Grantor.

(iii) [Reserved].

(f) Letter of Credit Rights. Each Grantor that is or becomes the beneficiary of Letters of Credit, shall promptly (and in any event within five (5) Business Days (or such longer period as shall be agreed to by Fifth Star) after becoming a beneficiary), notify the Administrative Agent thereof and, upon the request by Fifth Star, enter into a tri-party agreement with the Administrative Agent and the issuer or confirmation bank with respect to Letter of Credit Rights assigning such Letter of Credit Rights to Administrative Agent and directing all payments thereunder to Administrative Agent, all in form and substance satisfactory to Fifth Star.

(g) Commercial Tort Claims Each Grantor shall notify the Administrative Agent in writing promptly (and in any event within two (2) Business Days) after its determination to pursue or prosecute a Commercial Tort Claim after the date hereof against any third party and amend Schedule 2 to include such Commercial Tot Claim. Each Grantor authorizes the filing of additional financing statements or amendments to existing financing statements and do such other acts or things deemed necessary or desirable by Fifth Star to give the Administrative Agent a first priority (subject to Permitted Senior Encumbrances and as otherwise set forth in the Credit Agreement) perfected security interest in any such Commercial Tort Claim.

(h) Government Contracts. If any Account or Chattel Paper arises out of a contract or contracts with the United States of America or any department, agency, or instrumentality thereof and the amount of such contract or contracts, individually or in the aggregate, exceeds $25,000, Grantors shall promptly (and in any event within two (2) Business Days (or such longer period as shall be agreed to by the Administrative Agent) of the creation thereof) notify the Administrative Agent thereof in writing and execute any documents or take any steps reasonably required by Fifth Star in order that all moneys due or to become due under such contract or contracts shall be assigned to the Administrative Agent, for the benefit of the Secured Parties, and notice thereof given under the Assignment of Claims Act or other Requirement of Law.

(i) Intellectual Property.

(i) Upon request of Fifth Star, in order to facilitate filings with the U.S. Patent and Trademark Office and the U.S. Copyright Office, each Grantor shall execute and deliver to the Administrative Agent one or more Copyright Security Agreements, Trademark Security Agreements, or Patent Security Agreements, as applicable, to evidence the Administrative Agent’s Lien on such Grantor’s U.S. issued Patents (or any application therefor), U.S. registered Trademarks (or any application therefor), or U.S. registered Copyrights (or any application therefor).

(ii) Each Grantor shall use commercially reasonable efforts, to the extent necessary or reasonably economically desirable in the operation of such Grantor’s business, (A) to remedy any infringement, misappropriation, or dilution of any Intellectual Property owned by any Grantor, and seek to recover damages for such infringement, misappropriation, or dilution, (B) to prosecute any trademark application or service mark application of such Grantor that is part of the Trademarks pending as of the date hereof or hereafter until the termination of this Agreement, (C) to prosecute any patent application of such Grantor that is part of the Patents pending as of the date hereof or hereafter until the termination of this Agreement, and (D) to maintain all of such Grantor’s Trademarks, Patents, and Copyrights, and its rights therein including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings, and Intellectual Property Licenses Any expenses incurred in connection with the foregoing shall be borne by the appropriate Grantor. Each Grantor further agrees not to abandon any Trademark, Patent, Copyright or terminate any Intellectual Property License that is necessary in or material to the operation of such Grantor’s business without the prior written consent of the Administrative Agent, except to the extent expressly permitted under the Credit Agreement.

(iii) Grantors acknowledge and agree that neither the Administrative Agent nor Fifth Star shall have any duties with respect to the Intellectual Property or Intellectual Property Licenses. Without limiting the generality of this Section 6(i), Grantors acknowledge and agree that neither the Administrative Agent nor Fifth Star shall be under any obligation to take any steps necessary to preserve rights in the Intellectual Property or Intellectual Property Licenses against any other Person, but the Administrative Agent may do so at its option from and after the occurrence and during the continuance of an Event of Default, and all expenses incurred in connection therewith (including fees and expenses of attorneys and other professionals) shall be for the sole account of Borrowers.

(j) Investment Related Property.

(i) If any Grantor shall receive or become entitled to receive any Pledged Interests which are included in the Collateral after the Effective Date, it shall promptly (and in any event in accordance with Section 5.08 of the Credit Agreement with respect to any Pledged Interests in any Subsidiary and within two (2) Business Days of receipt thereof (or such longer period as shall be agreed to by the Fifth Star) with respect to any Pledged Interests in any Pledged Company that is not a Subsidiary) deliver to the Administrative Agent (A) a duly executed Pledged Interests Addendum identifying such Pledged Interests and (B) all certificates evidencing such Pledged Interests together with stock powers or instruments of transfer, endorsed in blank, for such certificates.

(ii) So long as no Event of Default shall have occurred and be continuing (or would occur as a result thereof), all interest, income, dividends, distributions and other amounts payable in cash or other property (except for additional Equity Interests) in respect of the Investment Related Property permitted to be paid in accordance with the terms of the Loan Documents may be paid in accordance with the terms thereof to and retained by the Grantors. During the continuance of an Event of Default, all sums of moneys and property paid or distributed in respect of the Investment Related Property which are received by any Grantor shall be held by the Grantors in trust for the benefit of the Administrative Agent segregated from such Grantor’s other property, and such Grantor shall deliver it forthwith to the Administrative Agent in the exact form received.

(iii) Each Grantor shall promptly deliver to Fifth Star a copy of each material notice or any other material communication received by it in respect of any Pledged Interests unless such notice or communication relates to Equity Interests in Subsidiaries of the Grantor and delivery of such notice or communications is otherwise governed by provisions in the Credit Agreement.

(iv) No Grantor shall make or consent to any amendment or other modification or waiver with respect to any Pledged Interests, Pledged Operating Agreement, or Pledged Partnership Agreement, or enter into any agreement or permit to exist any restriction with respect to any Pledged Interests; provided, that the Company may permit to exist the restrictions on Pledged Interests that arose prior to the Effective Date under the Lind Financing, in accordance with the applicable Intercreditor Agreement.

(v) Each Grantor agrees that it will cooperate with the Administrative Agent and Fifth Star in obtaining all necessary approvals and making all necessary filings under federal, state, local, or foreign law in connection with the Security Interest on the Investment Related Property or any sale or transfer thereof.

(vi) As to all limited liability company or partnership interests, issued under any Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor hereby represents, warrants and covenants that the Pledged Interests issued pursuant to such agreement (A) are not and shall not be dealt in or traded on securities exchanges or in securities markets, (B) do not and will not constitute investment company securities, and (C) are not and will not be held by such Grantor in a securities account. To the extent any Pledged Interests (x) constitutes interests in any limited liability company or limited partnership controlled now or in the future by any Grantor and (y) is a “Security” within the meaning of Article 8 of the UCC, such interest shall be certificated and each such interest shall at all times hereafter continue to be such a security and represented by such certificate delivered to the Administrative Agent. Each Grantor further acknowledges and agrees that with respect to any interest in any limited liability company or limited partnership controlled now or in the future by such Grantor and pledged hereunder that is not a “Security” within the meaning of Article 8 of the UCC, such Grantor shall at no time elect to treat any such interest as a “Security” within the meaning of Article 8 of the UCC, nor shall such interest be represented by a certificate, unless such Grantor provides prior written notification to the Administrative Agent of such election and such interest is thereafter represented by a certificate that is promptly delivered to the Administrative Agent pursuant to the terms hereof.

(k) [Reserved].

(l) Transfers and Other Liens. Grantors shall not (i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, any of the Collateral, except as expressly permitted by the Credit Agreement, or (ii) create or permit to exist any Lien upon or with respect to any of the Collateral of any of Grantors, except for Permitted Encumbrances with respect to the Borrowers. The inclusion of Proceeds in the Collateral shall not be deemed to constitute the Administrative Agent’s consent to any sale or other disposition of any of the Collateral except as expressly permitted in this Agreement or the other Loan Documents.

(m) Maintenance of Records. At the Administrative Agent’s reasonable request, such Grantor shall mark its books and records pertaining to its Collateral with a legend, approved by the Administrative Agent in its reasonable discretion, to identify and evidence this Agreement and the security interests granted hereby.

(n) [Reserved],

(o) Leased Locations. Grantors shall deliver to the Administrative Agent a Collateral Access Agreement from the landlord or lessor (including sub-lessors) of the location of any Grantor’s chief executive office or primary location of books and records, and from the applicable landlord or warehouseman for any location where Inventory is located; provided Grantors shall not be required to deliver Collateral Access Agreements for any location for which delivery of a Collateral Access Agreement has been waived by the Fifth Star, in its sole discretion.

7. Relation to Other Security Documents. The provisions of this Agreement shall be read and construed with the other Loan Documents referred to below in the manner so indicated.

(a) Credit Agreement. In the event of any direct and express conflict between any provision in this Agreement and a provision in the Credit Agreement, such provision of the Credit Agreement shall control.

(b) Patent, Trademark, and Copyright Security Agreements. The provisions of the Copyright Security Agreements, Trademark Security Agreements, and Patent Security Agreements are granted in conjunction with the provisions of this Agreement, and nothing contained in the Copyright Security Agreements, Trademark Security Agreements, or the Patent Security Agreements shall limit or expand any of the rights or remedies of the Administrative Agent hereunder. In the event of any conflict between the terms of this Agreement and any Copyright Security Agreement, Trademark Security Agreement, and Patent Security Agreement, the terms of this Agreement shall govern.

8. Further Assurances.

(a) Each Grantor agrees that from time to time, at its own expense, such Grantor will promptly execute and deliver all further documents, and take all further action, that Fifth Star may reasonably request, in order to perfect and protect any Security Interest granted or purported to be granted hereby or to enable the Administrative Agent to exercise and enforce its rights and remedies hereunder with respect to any of the Collateral.

(b) Each Grantor authorizes the filing by the Administrative Agent of financing or continuation statements, or amendments thereto, and such Grantor will execute and deliver to the Administrative Agent such other documents or notices, as may be necessary or as Fifth Star may request, in order to perfect and preserve the Security Interest granted or purported to be granted hereby.

(c) Each Grantor authorizes the Administrative Agent at any time and from time to time to file, transmit, or communicate, as applicable, financing statements and with any filing office in any jurisdiction (i) describing the Collateral as “all assets of the debtor, whether now owned or existing or hereafter acquired or arising and wheresoever located, including all accessions thereto and products and proceeds thereof” or words of similar effect, (ii) describing the Collateral as being of equal or lesser scope or with greater detail, or (iii) that contain any information required by part 5 of Article 9 of the UCC for the sufficiency of filing office acceptance. Each Grantor also hereby ratifies any and all financing statements or amendments previously filed by the Administrative Agent in any jurisdiction.

(d) Each Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement filed in connection with this Agreement without the prior written consent of the Administrative Agent, except as otherwise specifically permitted by the UCC after Full Satisfaction of the Secured Obligations.

9. Administrative Agent’s Right to Perform Contracts. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent (or its designee) (a) may proceed to perform any and all of the obligations of any Grantor contained in any contract, lease, or other agreement and exercise any and all rights of any Grantor therein contained as fully as such Grantor itself could, (b) shall have the right to use any Grantor’s rights under Intellectual Property Licenses in connection with the enforcement of Administrative Agent’s rights hereunder, including the right to prepare for sale and sell any and all Inventory and Equipment now or hereafter owned by any Grantor and now or hereafter covered by such licenses, and (c) shall have the right to request that any Equity Interests that are pledged hereunder be registered in the name of the Administrative Agent or any of its nominees.

10. Administrative Agent Appointed Attorney-in-Fact. Each Grantor hereby irrevocably appoints the Administrative Agent its attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, at such time as an Event of Default has occurred and is continuing under the Credit Agreement, to take any action and to execute any document which the Administrative Agent may reasonably deem necessary or advisable to accomplish the purposes of this Agreement, including:

(a) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in connection with the Accounts or any other Collateral of such Grantor;

(b) to receive and open all mail addressed to such Grantor and to notify postal authorities to change the address for the delivery of mail to such Grantor to that of Administrative Agent;

(d) to file any claims or take any action or institute any proceedings which Fifth Star may deem necessary or desirable for the collection of any of the Collateral of such Grantor or otherwise to enforce the rights of the Administrative Agent with respect to any of the Collateral;

(e) to repair, alter, or supply Goods, if any, necessary to fulfil in whole or in part the purchase order of any Person obligated to such Grantor in respect of any Account of such Grantor;

(f) to use any labels, Patents, Trademarks, URLs, industrial designs, Copyrights, advertising matter or other industrial or intellectual property rights, in advertising for sale and selling Inventory and other Collateral, subject, in the case of Trademarks, to sufficient rights of quality control and inspection in favor of such Grantor deemed reasonably necessary by the Administrative Agent to avoid the risk of invalidation of such Trademark, and to collect any amounts due under Accounts, contracts or Negotiable Collateral of such Grantor; and

(g) to bring suit in its own name to enforce the Trademarks, Patents, Copyrights and Intellectual Property Licenses and, if the Administrative Agent shall commence any such suit, the appropriate Grantor shall, at the request of the Fifth Star, do any and all lawful acts and execute any and all proper documents reasonably required by Fifth Star in aid of such enforcement.

To the extent permitted by applicable law, each Grantor hereby ratifies all that such attorney-in-fact shall lawfully do or cause to be done acting pursuant to this Section 10 and in accordance with the terms of the Loan Documents. This power of attorney is coupled with an interest and shall be irrevocable until this Agreement is terminated

11. Administrative Agent May Perform. If, following the occurrence and continuation of an Event of Default under the Credit Agreement, any Grantor fails to perform any agreement contained herein, the Administrative Agent may itself perform, or cause performance of, such agreement, and the reasonable expenses of Fifth Star incurred in connection therewith shall be payable, jointly and severally, by Grantors.

12. Administrative Agent’s Duties. The powers conferred on the Administrative Agent hereunder are solely to protect Administrative Agent’s interest in the Collateral, for the benefit of the Secured Parties, and shall not impose any duty upon the Administrative Agent or Fifth Star in any capacity to exercise any such powers. Except for the reasonable care to assure safe custody of any Collateral in its actual possession and the accounting for moneys actually received by it hereunder, the Administrative Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. The Administrative Agent shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its actual possession if such Collateral is accorded treatment substantially equal to that which Administrative Agent accords its own property, which shall be no less than the treatment employed by a reasonable and prudent agent in the industry.

13. Collection of Accounts, General Intangibles and Negotiable Collateral. At any time upon the occurrence and during the continuation of an Event of Default, the Administrative Agent or its respective designees may (a) notify Account Debtors of any applicable Grantor that the Collateral consisting of Accounts, General Intangibles, Chattel Paper or Negotiable Collateral have been assigned to Administrative Agent, for the benefit of the Secured Parties, or that Administrative Agent has a security interest therein, and (b) collect the Collateral consisting of Accounts, General Intangibles and Negotiable Collateral directly, and any collection costs and expenses shall constitute part of such applicable Grantor’s Secured Obligations under the Loan Documents.

14. Disposition of Pledged Interests by Administrative Agent. None of the Pledged Interests existing as of the date of this Agreement are, and none of the Pledged Interests hereafter acquired on the date of acquisition thereof will be, registered or qualified under the various federal or state securities laws of the U.S. and disposition thereof after an Event of Default may be restricted to one or more private (instead of public) sales in view of the lack of such registration. Each Grantor understands that in connection with such disposition, the Administrative Agent may approach only a restricted number of potential purchasers and further understands that a sale under such circumstances may yield a lower price for the Pledged Interests than if the Pledged Interests were registered and qualified pursuant to federal and state securities laws and sold on the open market. Each Grantor, therefore, agrees that: (a) if the Administrative Agent shall, pursuant to the terms of this Agreement, sell or cause the Pledged Interests or any portion thereof to be sold at a private sale, the Administrative Agent shall have the right to rely upon the advice and opinion of any nationally recognized brokerage or investment firm (but shall not be obligated to seek such advice and the failure to do so shall not be considered in determining the commercial reasonableness of such action) as to the best manner in which to offer the Pledged Interest or any portion thereof for sale and as to the best price reasonably obtainable at the private sale thereof; and (b) such reliance shall be conclusive evidence that the Administrative Agent has handled the disposition in a commercially reasonable manner.

15. Voting Rights.

(a) Upon the occurrence and during the continuation of an Event of Default, (i) the Administrative Agent may, at its option, and in addition to all rights and remedies available to Administrative Agent under any other agreement, at law, in equity, or otherwise, exercise all voting rights, and all other ownership or consensual rights in respect of the Pledged Interests owned by such Grantor, but under no circumstances is the Administrative Agent obligated by the terms of this Agreement to exercise such rights, and (ii) if the Administrative Agent duly exercises its right to vote any of such Pledged Interests, each Grantor hereby appoints Administrative Agent, such Grantor’s true and lawful attorney-in-fact and IRREVOCABLE PROXY to vote such Pledged Interests in any manner Administrative Agent deems advisable for or against all matters submitted or which may be submitted to a vote of shareholders, partners or members, as the case may be. The power-of-attorney granted hereby is coupled with an interest and shall be irrevocable.

(b) For so long as any Grantor shall have the right to vote the Pledged Interests owned by it, such Grantor covenants and agrees that it will not, without the prior written consent of the Administrative Agent, vote or take any consensual action with respect to such Pledged Interests which would materially adversely affect the rights of the Administrative Agent and the other Secured Parties or the value of the Pledged Interests.

16. Remedies. Upon the occurrence and during the continuance of an Event of Default:

(a) The Administrative Agent may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein, in the other Loan Documents, or otherwise available to it, all the rights and remedies of a secured party on default under the UCC or any other Requirement of Law. Without limiting the generality of the foregoing, each Grantor expressly agrees that, in any such event, Administrative Agent without demand of performance or other demand, advertisement or notice of any kind (except a notice as specified below of time and place of public or private sale herein) to or upon any of Grantors or any other Person (all and each of which demands, advertisements and notices are hereby expressly waived to the maximum extent permitted by the UCC or any other Requirement of Law), may take immediate possession of all or any portion of the Collateral and (i) require Grantors to, and each Grantor hereby agrees that it will at its own expense and upon request of Administrative Agent forthwith, assemble all or part of the Collateral as directed by Administrative Agent and make it available to Administrative Agent at one or more locations where such Grantor regularly maintains Inventory, and (ii) without notice except as specified below herein, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of Administrative Agent’s offices or elsewhere, for cash, on credit, and upon such other terms as Administrative Agent may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale shall be required by law, at least 10 days’ notice to any of Grantors of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification and specifically such notice shall constitute a reasonable “authenticated notification of disposition’’ within the meaning of Section 9-611 of the UCC. The Administrative Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Administrative Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor agrees that the internet shall constitute a “place” for purposes of Section 9-610(b) of the UCC

(b) The Administrative Agent is hereby granted a non-exclusive license (exercisable without payment of royalty or other compensation to such Grantor), to use, license or sublicense any of the Intellectual Property and Intellectual Property Licenses constituting Collateral, wherever the same may be located, including each Grantor’s labels, Patents, Copyrights, Trademarks, advertising matter, URLs, industrial designs, or other industrial or intellectual property rights, whether owned by any of Grantors or with respect to which any of Grantors have rights under license, sublicense, or other agreements, for the purpose of enabling Administrative Agent to exercise its rights and remedies, subject, in the case of Trademarks, to sufficient rights of quality control and inspection in favor of such Grantor deemed reasonably necessary by the Administrative Agent to avoid the risk of invalidation of such Trademark, at and during the continuation of such time as Administrative Agent shall be lawfully entitled to exercise such rights and remedies, provided that nothing in this paragraph shall require any Grantor to grant any license that is prohibited by any non-waivable Requirement of Law, or is prohibited by, or constitutes a breach or default under or would result in the termination of, any contract, license, agreement, instrument or other document giving rise to a right to use with respect to such property.

(c) Any cash held by the Administrative Agent as Collateral and all Cash Proceeds received by the Administrative Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied against the Secured Obligations in the order set forth in the Credit Agreement. In the event the proceeds of Collateral are insufficient to satisfy all of the Secured Obligations in full, each Grantor shall remain jointly and severally liable for any such deficiency.

(d) Each Grantor hereby acknowledges that the Secured Obligations arose out of commercial transactions, and agrees that if an Event of Default shall occur and be continuing the Administrative Agent shall have the right to an immediate writ of possession without notice of a hearing. The Administrative Agent shall have the right to the appointment of a receiver for the properties and assets of each of Grantors, and each Grantor hereby consents to such rights and such appointment and hereby waives any objection such Grantors may have thereto or the right to have a bond or other security posted by the Administrative Agent.

17. Remedies Cumulative. Each right, power, and remedy of the Administrative Agent as provided for in this Agreement or in the other Loan Documents or now or hereafter existing at law or in equity or by statute or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power, or remedy provided for in this Agreement or in the other Loan Documents or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Administrative Agent, of any one or more of such rights, powers, or remedies shall not preclude the simultaneous or later exercise by the Administrative Agent of any or all such other rights, powers, or remedies.

18. Marshaling. The Administrative Agent shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Secured Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of its rights and remedies hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising. To the extent that it lawfully may, each Grantor hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the Administrative Agent’s or any Secured Party’s rights and remedies under this Agreement or under any other document creating or evidencing any of the Secured Obligations or under which any of the Secured Obligations is outstanding or by which any of the Secured Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, each Grantor hereby irrevocably waives the benefits of all such laws.

19. Indemnity and Expenses.

(a) Each Grantor agrees to indemnify the Administrative Agent and the other Secured Parties in accordance with and subject to the terms of the Credit Agreement as fully as if such Grantor was a party to the Credit Agreement in its capacity as a Borrower. This provision shall survive the termination of this Agreement, the Credit Agreement and the other Loan Documents and the repayment of the Secured Obligations.

(b) Grantors, jointly and severally, shall, upon demand, pay to the Administrative Agent all expenses incurred by Administrative Agent in connection with (i) the administration of this Agreement, (ii) the custody, preservation, use or operation of, or, upon an Event of Default, the sale of, collection from, or other realization upon, any of the Collateral in accordance with this Agreement and the other Loan Documents, or (iii) the exercise or enforcement of any of the rights of Administrative Agent hereunder, in each case in accordance with and subject to the terms of the Credit Agreement.

20. Merger, Amendments; Etc. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES. No waiver of any provision of this Agreement, and no consent to any departure by any of Grantors herefrom, shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No amendment of any provision of this Agreement shall be effective unless the same shall be in writing and signed by the Administrative Agent and each of Grantors to which such amendment applies.

21. Addresses for Notices. All notices and other communications provided for hereunder shall be given in the form and manner and delivered to the Administrative Agent at its address specified in the Credit Agreement, and to any of the Grantors to Borrowers at the address specified in the Credit Agreement or, as to any party, at such other address as shall be designated by such party in a written notice to the other party.

22. Continuing Security Interest: Assignments under Credit Agreement. This Agreement shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until the Secured Obligations have been Fully Satisfied, (b) be binding upon each of Grantors, and their respective successors and assigns, and (c) inure to the benefit of, and be enforceable by, the Administrative Agent, and its respective successors and permitted assigns. Without limiting the generality of the foregoing clause (c), any Lender may, in accordance with the provisions of the Credit Agreement, assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Lender herein or otherwise. Upon the Full Satisfaction of the Secured Obligations, the Security Interest and Liens granted hereby shall terminate, this Agreement shall terminate and all rights to the Collateral shall revert to Grantors or any other Person entitled thereto. At such time, upon Borrowers’ request and at Borrowers’ expense, the Administrative Agent will authorize the filing of appropriate termination statements or other similar documents to terminate such Security Interest and will return to Grantors any Collateral in its possession and take any steps reasonably necessary to terminate the Security Interests created hereunder or in connection herewith. No transfer or renewal, extension, assignment, or termination of this Agreement or of the Credit Agreement, or any other Loan Document, or any other instrument or document executed and delivered by any Grantor to the Administrative Agent nor any other loans or financial accommodations made by any Secured Party to Grantors, nor the taking of further security, nor the retaking or re-delivery of the Collateral to Grantors, or any of them, by the Administrative Agent, nor any other act of any Secured Party shall release any of Grantors from any obligation, except a release or discharge executed in writing by the Administrative Agent in accordance with the provisions of the Credit Agreement and other Loan Documents. The Administrative Agent shall not by any act, delay, omission or otherwise, be deemed to have waived any of its rights or remedies hereunder, unless such waiver is in writing and signed by the Administrative Agent and then only to the extent therein set forth. A waiver by the Administrative Agent of any right or remedy on any occasion shall not be construed as a bar to the exercise of any such right or remedy which the Administrative Agent would otherwise have had on any other occasion.

23. GOVERNING LAW; JURISDICTION, ETC.

(a) Governing Law. This Agreement shall be construed in accordance with, and shall be governed by, the law of the State of New York and, to the extent applicable, the Bankruptcy Code.

(b) Submission to Jurisdiction. Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the U.S. District Court of the Southern District of New York, the Bankruptcy Court (if applicable) and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such federal court or (if applicable) the Bankruptcy Court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against any Grantor or its properties in the courts of any jurisdiction.

(c) Waiver of Venue. Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 21. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by applicable law.

24. WAIVER OF JURY TRIAL. EACH PARTY HERETO 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 OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

25. New Subsidiaries. Pursuant to Section 5.08 of the Credit Agreement, all new Subsidiaries (whether by acquisition or creation) of Borrowers are required to enter into this Agreement by executing and delivering in favor of the Administrative Agent a supplement to this Agreement in the form of Annex 1. Upon the execution and delivery of Annex 1 by such new Subsidiary, such Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of any document adding an additional Grantor as a party to this Agreement shall not require the consent of any Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor hereunder.

26. Administrative Agent. Each reference herein to any right granted to, benefit conferred upon or power exercisable by the ‘Administrative Agent’ shall be a reference to the Administrative Agent, for the benefit of the Secured Parties. Notwithstanding anything herein to the contrary, the Administrative Agent shall be authorized to act as the agent of the Secured Parties for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Borrowers to secure any of the Secured Obligations.

27. Miscellaneous.

(a) This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf’ or “tif’) format shall be effective as delivery of a manually executed counterpart of this Agreement. The words “execution,” “signed,” “signature,” and words of like import in this Agreement shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

(b) Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof, and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

(c) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s permitted successors and assigns, and (iii) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed and delivered by its officer or officers thereunto duly authorized as of the date first above written.

GRANTORS:	PARTS ID, LLC

	By:	/s/ Lev Peker
		Name:	Lev Peker
		Title:	Chief Executive Officer

	PARTS ID, INC.

	By:	/s/ Lev Peker
		Name:	Lev Peker
		Title:	Chief Executive Officer

[Signature Page to Pledge and Security Agreement]

ADMINISTRATIVE AGENT:	FIFTH STAR, INC.

	By:	/s/ Sam Yagan
		Name:	Sam Yagan
		Title:	President, Secretary and Treasurer

[Signature Page to Pledge and Security Agreement]

SCHEDULE 1

ORGANIZATIONAL IDENTIFICATION NUMBERS; CHIEF EXECUTIVE OFFICES

Grantor	Jurisdiction of Incorporation/Formation	Org. No.	Chief Executive Office	Principal Place of Business	Principal place where such Grantor maintains records concerning the Collateral

SCHEDULE 2

COMMERCIAL TORT CLAIMS

[Include specific case caption or descriptions per Official Code Comment 5 to Section 9-108 of the UCC]

Any Grantor’s claims pursuant to the lawsuit currently pending in the United States District Court for the District of New Jersey and captioned as Onyx Enterprises Int’l, Corp v. Volkswagen Group of America, Inc., Civil Action Number 3:20-cv-09976-BRM-ZNQ.

SCHEDULE 3

COPYRIGHTS

None.

SCHEDULE 4

INTELLECTUAL PROPERTY LICENSES

None.

SCHEDULE 5

PATENTS

None.

SCHEDULE 6

PLEDGED COMPANIES

Name of Grantor		Name of Pledged Company		Number of Shares/Units		Class of Interests		Percentage of Class Owned		Certificate No.
PARTS iD, Inc.		PARTS iD, LLC		N/A		N/A		100%		N/A

SCHEDULE 7

TRADEMARKS

SCHEDULE 8

LOCATIONS

Loan Party		Other Locations of Equipment, Inventory or Other Goods

SCHEDULE 9

LIST OF UCC FILING JURISDICTIONS

Grantor	Filling Requirements	Filing Office
PARTS iD, LLC	UCC-1	Delaware Secretary of State
PARTS iD, Inc.	UCC-1	Delaware Secretary of State

SCHEDULE 10

DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITY ACCOUNTS

Grantor	Bank Name	Address	Account Number	Account purpose	Account Name

SCHEDULE 11

CHANGE IN CIRCUMSTANCES

Prior Names of Debtors

Prior names of PARTS iD, Inc: Legacy Acquisition Corp.

Prior names of PARTS iD, LLC: Excel Merger Sub II, LLC and Onyx Enterprises, Int’l Corp.

ANNEX 1 TO PLEDGE AND SECURITY AGREEMENT

FORM OF SUPPLEMENT

Supplement No [ ] (this “Supplement”) dated as of [ ] [ ], 20[ ], to the Pledge and Security Agreement dated as of December 19, 2023 (as amended, amended and restated, supplemented, extended or otherwise modified from time to time, the “Security Agreement’) by each of the parties listed on the signature pages thereto and those additional entities that thereafter become parties thereto (collectively, jointly and severally, “Grantors” and each individually Grantor”), FIFTH STAR, INC., in its capacity as Administrative Agent for the Secured Parties with respect to the Collateral (as defined below) (in such capacity, together with its successors and permitted assigns, the “Administrative Agent”).

WITNESSETH:

WHEREAS, pursuant to that certain Credit Agreement dated as of December 19, 2023 (as amended, amended and restated, supplemented, extended or otherwise modified from time to time, the Credit Agreement’) by and among Parts iD, LLC, a Delaware limited liability company (“Parts iD, LLC”), Parts iD, Inc., a Delaware corporation (“Parts iD, Inc.”; together with Parts iD, LLC, each, individually, a “Borrower”, and collectively, “Borrowers”), the various financial institutions party thereto as a lender (each a “Lender”, and collectively, the “Lenders”) and FIFTH STAR, INC., as Administrative Agent, Lenders are willing to make certain financial accommodations available to the Borrowers from time to time pursuant to the terms and conditions thereof.

WHEREAS, capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement or, if not defined therein, in the Credit Agreement.

WHEREAS, Grantors have entered into the Security Agreement in order to induce the Secured Parties to make (or continue to make) certain financial accommodations to Borrowers and the other Grantors pursuant to the Credit Agreement and the other Loan Documents.

WHEREAS, pursuant to Section 5.08 of the Credit Agreement, new Subsidiaries of Borrowers must execute and deliver certain Loan Documents, including the Security Agreement, and the execution of the Security Agreement by each undersigned party listed on the signature pages hereof as a “New Grantor” (each, a “New Grantor” and collectively, the “New Grantors”) may be accomplished by the execution of this Supplement in favor of the Administrative Agent, for the benefit of the Secured Parties.

NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, each New Grantor hereby agrees as follows:

1. In accordance with Section 25 of the Security Agreement, each New Grantor, by its signature below, becomes a “Grantor” under the Security Agreement with the same force and effect as if originally named therein as a “Grantor” and each New Grantor hereby (a) agrees to all of the terms and provisions of the Security Agreement applicable to it as a “Grantor” thereunder and (b) represents and warrants that the representations and warranties made by it as a “Grantor” thereunder are true and correct in all material respects (unless any such representation or warranty is qualified as to materiality or Material Adverse Effect, in which case such representation and warranty shall be true and correct in all respects) on and as of the date hereof. In furtherance of the foregoing, each New Grantor, as security for the payment and performance in full of the Secured Obligations, does hereby grant, collaterally assign, and pledge to the Administrative Agent, for the benefit of the Secured Parties, a security interest in all right, title and interest in and to all Collateral of such New Grantor to secure the full and prompt payment of the Secured Obligations, including, any interest thereon, plus reasonable attorneys’ fees and expenses if the Secured Obligations represented by the Security Agreement are collected by law, through an attorney-at-law, or under advice therefrom. Schedule 1, “Organizational ID Number; Chief Executive Offices”, Schedule 2, “Commercial Tort Claims”, Schedule 3, “Copyrights”, Schedule 4, “Intellectual Property Licenses”, Schedule 5, “Patents”, Schedule 6, “Pledged Companies”, Schedule 7, “Trademarks”, Schedule 8, “Locations”, Schedule 9, “List of UCC Filing Jurisdictions”, Schedule 10 “Deposit Accounts, Securities Accounts and Commodity Accounts”, and Schedule 11 “Change in Circumstances” attached hereto supplement Schedule 1, Schedule 2, Schedule 3, Schedule 4, Schedule 5, Schedule 6, Schedule 7, Schedule 8, Schedule 9, Schedule 10, and Schedule 11 respectively, to the Security Agreement and shall be deemed a part thereof for all purposes of the Security Agreement. Each reference to a “Grantor” in the Security Agreement shall be deemed to include each New Grantor. The Security Agreement is incorporated herein by reference.

Annex 1-1

2. Each New Grantor represents and warrants to the Secured Parties that this Supplement has been duly executed and delivered by such New Grantor and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

3. This Supplement may be executed in multiple counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same agreement. Delivery of a counterpart hereof by facsimile transmission or by other electronic transmission shall be as effective as delivery of a manually executed counterpart hereof

4. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.

5. This Supplement shall be construed in accordance with and governed by the laws of the State of New York.

[Remainder of Page Intentionally Left Blank]

Annex 1-2

IN WITNESS WHEREOF, each New Grantor and the Administrative Agent have caused this Supplement to the Security Agreement to be duly executed and delivered by its officer or officers thereunto duly authorized as of the date first above written

NEW GRANTORS:	[Name of New Grantor]

	By:
		Name:
		Title:

	[Name of New Grantor]

	By:
		Name:
		Title:

ADMINISTRATIVE AGENT:	FIFTH STAR, INC., as Administrative Agent

	By:
		Name:
		Title:

Annex 1-3

EXHIBIT A

PLEDGED INTERESTS ADDENDUM

This Pledged Interests Addendum, dated as of [ ] [ ], 20[ ], is delivered pursuant to Section 6 of the Security Agreement referred to below. The undersigned hereby agrees that this Pledged Interests Addendum may be attached to that certain Pledge and Security Agreement, dated as of December 19, 2023 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”), made by the undersigned, together with the other Grantors named therein, to FIFTH STAR, INC., as Administrative Agent. Initially capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Security Agreement or, if not defined therein, the Credit Agreement. The undersigned hereby agrees that the additional interests listed on this Pledged Interests Addendum as set forth below shall be and become part of the Pledged Interests pledged by the undersigned to the Administrative Agent in the Security Agreement and any pledged company set forth on this Pledged Interests Addendum as set forth below shall be and become a “Pledged Company” under the Security Agreement, each with the same force and effect as if originally named therein.

The undersigned hereby certifies that the representations and warranties set forth in Section 5 of the Security Agreement of the undersigned are true and correct as to the Pledged Interests listed herein on and as of the date hereof.

	[_______________]

	By:
		Name:
		Title:

Exhibit A-1

Name of Pledgor	Name of Pledged Company	Number of Shares/Units	Class of Interests	Percentage of Class Owned	Certificate Nos.

Exhibit A-2

Exhibit 10.3

EXECUTION VERSION

TRADEMARK SECURITY AGREEMENT

This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) dated as of December 19, 2023, among the Grantor listed on the signature page hereof (the “Grantor”) and FIFTH STAR, INC., in its capacity as administrative agent (together with its permitted successors and assigns, the “Administrative Agent”) for the Secured Parties.

W I T N E S S E T H:

WHEREAS, pursuant to that certain Credit Agreement dated as of the date hereof (as amended, amended and restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by and among PARTS ID, LLC, a Delaware limited liability company (“Parts iD, LLC”), PARTS ID, INC., a Delaware corporation (“Parts iD, Inc.”; together with Parts iD, LLC, each, individually, a “Borrower”, and collectively, “Borrowers”), the various financial institutions party thereto as a lender (each a “Lender”, and collectively, the “Lenders”), FIFTH STAR, INC., as New Bridge Lender, Fifth Star, New Money DIP Lender and as Administrative Agent, the Lenders are willing to make certain financial accommodations available to the Borrowers from time to time pursuant to the terms and conditions thereof; and

WHEREAS, pursuant to that certain Pledge and Security Agreement dated as of the date hereof (including all annexes, exhibits or schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the “Security Agreement”), by and among the Grantors party thereto, in favor of the Administrative Agent, Grantor is required to execute and deliver to the Administrative Agent, for the benefit of the Secured Parties, this Trademark Security Agreement.

NOW, THEREFORE, in consideration of the premises and the agreements hereinafter set forth, the Grantor hereby agrees as follows:

1. DEFINED TERMS. All capitalized terms used herein (including in the preamble and recitals hereto) but not otherwise defined herein have the meanings given to them in the Security Agreement or, if not defined therein, in the Credit Agreement.

2. GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL. The Grantor hereby grants and pledges to the Administrative Agent, for the ratable benefit of the Secured Parties, a Security Interest in all of Grantor’s right, title, and interest in and to the following property, in each case whether now owned or existing or hereafter acquired or arising and wherever located (collectively, the “Trademark Collateral”):

(a)

all of Grantor’s Trademarks, including those referred to on Schedule I hereto; Trademark; and

(b)

all renewals or extensions of the foregoing;

(c)

all goodwill of the business connected with the use of, and symbolized by, each

(d)

all products and proceeds of the foregoing, including any claim by Grantor against third parties for past, present or future (i) infringement or dilution of any Trademark (ii) injury to the goodwill associated with any Trademark.

Notwithstanding the foregoing, no grant of any security interest shall be deemed granted hereunder on or in any intent-to-use trademark application prior to the filing and acceptance of a verified statement of use or amendment to allege use with respect thereto with the U.S. Patent and Trademark Office.

3. SECURITY FOR OBLIGATIONS. This Trademark Security Agreement and the Security Interest created hereby secures the payment and performance of all the Secured Obligations, whether now existing or arising hereafter. Without limiting the generality of the foregoing, this Trademark Security Agreement secures the payment of all amounts which constitute part of the Secured Obligations and would be owed by Grantor to the Administrative Agent, the other Secured Parties, or any of them, whether or not they are unenforceable or not allowable due to the existence of an Insolvency Proceeding involving Grantor.

4. SECURITY AGREEMENT. The security interests granted pursuant to this Trademark Security Agreement are granted in conjunction with the security interests granted to the Administrative Agent, for the benefit of the Secured Parties, pursuant to the Security Agreement. The Grantor hereby acknowledges and affirms that the rights and remedies of the Administrative Agent with respect to the security interest in the Trademark Collateral made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. The provisions of the Security Agreement shall supersede and control over any conflicting or inconsistent provision herein.

5. AUTHORIZATION TO SUPPLEMENT. If Grantor shall obtain rights to any new trademarks ownership of any new U.S. applications for registration of and registered trademarks (other than any intent-to-use trademark application constituting Excluded Property) included in the Collateral, the provisions of this Trademark Security Agreement shall automatically apply thereto. Grantor shall give notice in writing to the Administrative Agent within such time limit set forth in the Security Agreement with respect to any such new trademarks for which the Grantor files an application for registration with the U.S. Patent and Trademark Office or the renewal or extension of any trademark registration. Without limiting Grantor’s obligations under this Section 5, Grantor hereby authorize the Administrative Agent unilaterally to modify this Trademark Security Agreement by amending Schedule I to include any new trademark rights registered or applied for trademarks of Grantor. Notwithstanding the foregoing, no failure to so modify this Trademark Security Agreement or amend Schedule I shall in any way affect, invalidate or detract from the Administrative Agent’s continuing security interest in all Collateral, whether or not listed on Schedule I.

6. COUNTERPARTS. This Trademark Security Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same agreement. In proving this Trademark Security Agreement or any other Loan Document in any judicial proceedings, it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom such enforcement is sought. Any signatures delivered by a party by facsimile transmission or other electronic transmission shall be deemed an original signature hereto.

7. SUCCESSORS AND ASSIGNS. This Trademark Security Agreement will be binding on and shall inure to the benefit of the parties hereto and their respective successors and assigns.

8. GOVERNING LAW. This Trademark Security Agreement shall be construed in accordance with and governed by the laws of the State of New York and, to the extent applicable, the Bankruptcy Code.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the Grantor has caused this Trademark Security Agreement to be duly executed and delivered by its offer or officers thereunto duly authorized as of the date first above written.

GRANTOR:	PARTS ID, LLC

	By:	/s/ Lev Peker
		Name:	Lev Peker
		Title:	Chief Executive Officer

Signature Page to

Trademark Security Agreement

ADMINISTRATIVE AGENT:	FIFTH STAR, INC.

	By:	/s/ Sam Yagan
		Name:	Sam Yagan
		Title:	President, Secretary and Treasurer

Signature Page to

Trademark Security Agreement

SCHEDULE I

TRADEMARKS

Exhibit 99.1

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

In re:

PARTS iD Inc., et al.,¹

Debtors.

Chapter 11

Case No. 23-_____ (___)

(Joint Administration Requested)

DISCLOSURE STATEMENT RELATING TO THE JOINT PREPACKAGED CHAPTER 11

PLAN OF REORGANIZATION PARTS ID, INC. AND PARTS ID, LLC

DLA PIPER LLP (US)

R. Craig Martin (DE 5032)

1201 N. Market Street, Suite 2100

Wilmington, Delaware 19801

Telephone: (302) 468-5700

Facsimile: (302) 394-2341

Email: craig.martin@us.dlapiper.com

Erik F. Stier (pro hac vice pending)

500 8th Street, NW

Washington, D.C. 20004

Telephone: (202) 799-4258

Facsimile: (202) 799-5000

Email: erik.stier@us.dlapiper.com

Proposed Counsel to the Debtors

Dated: December 20, 2023

The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are: PARTS iD, Inc. (4868) and PARTS iD, LLC (5607). The corporate headquarters and the mailing address for the Debtors is 1 Corporate Drive, Suite C, Cranbury, NJ 08512.

THIS IS A SOLICITATION OF VOTES TO ACCEPT OR REJECT THE PLAN IN ACCORDANCE WITH SECTION 1125 OF THE BANKRUPTCY CODE AND WITHIN THE MEANING OF SECTION 1126 OF THE BANKRUPTCY CODE. 11 U.S.C. §§ 1125, 1126. THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT. THE DEBTORS INTEND TO SUBMIT THIS DISCLOSURE STATEMENT TO THE BANKRUPTCY COURT FOR APPROVAL FOLLOWING COMMENCEMENT OF SOLICITATION AND THE DEBTORS’ FILING FOR RELIEF UNDER CHAPTER 11 OF THE BANKRUPTCY CODE. THE INFORMATION IN THIS DISCLOSURE STATEMENT IS SUBJECT TO CHANGE. THIS DISCLOSURE STATEMENT IS NOT AN OFFER TO SELL ANY SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY ANY SECURITIES.

IMPORTANT INFORMATION ABOUT THIS DISCLOSURE STATEMENT

SOLICITATION OF VOTES TO ACCEPT OR REJECT THE JOINT PREPACKAGED PLAN OF REORGANIZATION OF PARTS ID, INC. AND PARTS ID, LLC FROM THE HOLDERS OF THE FOLLOWING CLAIMS:

VOTING CLASS	NAME OF CLASS UNDER THE PLAN
Class 3	Senior Secured Note Claims
Class 4	MCA Claims
Class 5	Subordinated Secured Note Claims
Class 7	Vendor Claims
Class 8	Convenience Claims

IF YOU ARE IN CLASS 3, 4, 5, 7 OR 8 YOU ARE RECEIVING THIS DOCUMENT AND THE ACCOMPANYING MATERIALS BECAUSE YOU ARE ENTITLED TO VOTE ON THE PLAN.

DELIVERY OF BALLOT

THE BALLOT MAY BE (1) RETURNED TO THE ADDRESS BELOW OR (2) SUBMITTED ELECTRONICALLY ON THE NOTICE AND CLAIMS AGENT’S WEBSITE BELOW SO THAT IT IS ACTUALLY RECEIVED BY THE NOTICE AND CLAIMS AGENT ON OR BEFORE THE VOTING DEADLINE, WHICH IS 4:00 P.M. (EASTERN STANDARD TIME) ON JANUARY 8, 2024.

BY FIRST CLASS MAIL, HAND DELIVERY

OR OVERNIGHT AT:

PARTS iD Ballot Processing

c/o Kroll Restructuring Administration, LLC

850 Third Avenue, Suite 412

Brooklyn, NY 11232

ELECTRONICALLY AT:

https://cases.ra.kroll.com/partsidballots

PLEASE CHOOSE ONLY ONE METHOD TO RETURN YOUR BALLOT.

BALLOTS RECEIVED VIA FACSIMILE OR E-MAIL WILL NOT BE COUNTED.

IF YOU HAVE ANY QUESTIONS REGARDING THE PROCEDURE FOR
VOTING ON THE PLAN, PLEASE CONTACT THE NOTICE AND CLAIMS AGENT AT:

BY E-MAIL TO:
PARTSIDBALLOTS@RA.KROLL.COM
WITH A REFERENCE TO “PARTS ID” IN THE SUBJECT LINE

BY TELEPHONE:
(844) 610-4783 (DOMESTIC, TOLL FREE) OR +1 (646) 777-2312 (LOCAL/INTERNATIONAL, TOLL) AND REQUEST TO SPEAK WITH A MEMBER OF THE SOLICITATION TEAM

This disclosure statement (this “Disclosure Statement”) provides information regarding the Joint Prepackaged Plan of Reorganization of PARTS iD, Inc. and PARTS iD, LLC (as may be amended, supplemented, or otherwise modified from time to time, the “Plan”),¹ for which the Debtors will seek confirmation by the Bankruptcy Court. A copy of the Plan is attached to this Disclosure Statement as Exhibit A and is incorporated herein by reference. The Debtors are providing the information in this Disclosure Statement to certain holders of Claims for purposes of soliciting votes to accept or reject the Plan.

The consummation and effectiveness of the Plan are subject to certain material conditions precedent described herein and set forth in Article VIII of the Plan. There is no assurance that the Bankruptcy Court will confirm the Plan or, if the Bankruptcy Court does confirm the Plan, that the conditions necessary for the Plan to become effective will be satisfied or, in the alternative, waived.

The Debtors urge each Holder of a Claim or Interest to consult with its own advisors with respect to any legal, financial, securities, tax, or business advice in reviewing this Disclosure Statement, the Plan, and each proposed transaction contemplated by the Plan.

Capitalized terms used but not otherwise defined in this Disclosure Statement have the meanings ascribed to such terms in the Plan.

The Debtors strongly encourage Holders of Claims in Classes 3, 4, 5, 7 and 8 to read this Disclosure Statement (including the Risk Factors described in Article IX hereof) and the Plan in their entirety before voting to accept or reject the Plan. Assuming the requisite acceptances to the Plan are obtained, the Debtors will seek the Bankruptcy Court’s approval of the Plan at the Confirmation Hearing.

RECOMMENDATION BY THE DEBTORS

EACH DEBTOR’S GOVERNING BODY, AS APPLICABLE, HAS APPROVED THE TRANSACTIONS CONTEMPLATED BY THE PLAN AND DESCRIBED IN THIS DISCLOSURE STATEMENT, AND EACH DEBTOR BELIEVES THAT THE COMPROMISES CONTEMPLATED UNDER THE PLAN ARE FAIR AND EQUITABLE, MAXIMIZE THE VALUE OF EACH DEBTOR’S ESTATE, AND PROVIDE THE BEST RECOVERY TO HOLDERS OF CLAIMS AND INTERESTS. AT THIS TIME, EACH DEBTOR BELIEVES THAT THE PLAN AND RELATED TRANSACTIONS REPRESENT THE BEST ALTERNATIVE FOR ACCOMPLISHING THE DEBTORS’ OVERALL RESTRUCTURING OBJECTIVES. EACH OF THE DEBTORS THEREFORE STRONGLY RECOMMENDS THAT ALL HOLDERS OF CLAIMS WHOSE VOTES ARE BEING SOLICITED SUBMIT BALLOTS TO ACCEPT THE PLAN BY RETURNING THEIR BALLOTS SO AS TO BE ACTUALLY RECEIVED BY THE NOTICE AND CLAIMS AGENT NO LATER THAN JANUARY 8, 2024 AT 4:00 P.M. (EASTERN STANDARD TIME) PURSUANT TO THE INSTRUCTIONS SET FORTH HEREIN AND ON THE BALLOT.

THE DEBTORS ARE PROVIDING THE INFORMATION IN THIS DISCLOSURE STATEMENT TO HOLDERS OF CLAIMS OR INTERESTS FOR PURPOSES OF SOLICITING VOTES TO ACCEPT OR REJECT THE JOINT PREPACKAGED CHAPTER 11 PLAN OF REORGANIZATION OF PARTS ID, INC. AND PARTS ID, LLC. NOTHING IN THIS DISCLOSURE STATEMENT MAY BE RELIED UPON OR USED BY ANY ENTITY FOR ANY OTHER PURPOSE. BEFORE DECIDING WHETHER TO VOTE FOR OR AGAINST THE PLAN, EACH HOLDER ENTITLED TO VOTE SHOULD CAREFULLY CONSIDER ALL OF THE INFORMATION IN THIS DISCLOSURE STATEMENT, INCLUDING THE RISK FACTORS DESCRIBED IN ARTICLE IX HEREIN.

HOLDERS OF CLAIMS OR INTERESTS SHOULD NOT CONSTRUE THE CONTENTS OF THIS DISCLOSURE STATEMENT AS PROVIDING ANY LEGAL, BUSINESS, FINANCIAL, OR TAX ADVICE. THE DEBTORS URGE EACH HOLDER OF A CLAIM OR INTEREST TO CONSULT WITH ITS OWN ADVISORS WITH RESPECT TO ANY LEGAL, FINANCIAL, SECURITIES, TAX, OR BUSINESS ADVICE IN REVIEWING THIS DISCLOSURE STATEMENT, THE PLAN, AND THE PROPOSED TRANSACTIONS CONTEMPLATED THEREBY. FURTHERMORE, THE BANKRUPTCY COURT’S APPROVAL OF THE ADEQUACY OF THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE THE BANKRUPTCY COURT’S APPROVAL OF THE PLAN.

THIS DISCLOSURE STATEMENT CONTAINS, AMONG OTHER THINGS, SUMMARIES OF THE PLAN, CERTAIN STATUTORY PROVISIONS, AND CERTAIN ANTICIPATED EVENTS SHOULD THE DEBTORS COMMENCE CHAPTER 11 CASES. ALTHOUGH THE DEBTORS BELIEVE THAT THESE SUMMARIES ARE FAIR AND ACCURATE, THESE SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY TO THE EXTENT THAT THEY DO NOT SET FORTH THE ENTIRE TEXT OF SUCH DOCUMENTS OR STATUTORY PROVISIONS OR EVERY DETAIL OF SUCH ANTICIPATED EVENTS. IN THE EVENT OF ANY INCONSISTENCY OR DISCREPANCY BETWEEN A DESCRIPTION IN THIS DISCLOSURE STATEMENT AND THE TERMS AND PROVISIONS OF THE PLAN OR ANY OTHER DOCUMENTS INCORPORATED HEREIN BY REFERENCE, THE PLAN OR SUCH OTHER DOCUMENTS WILL GOVERN FOR ALL PURPOSES. FACTUAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT HAS BEEN PROVIDED BY THE DEBTORS’ MANAGEMENT EXCEPT WHERE OTHERWISE SPECIFICALLY NOTED. THE DEBTORS DO NOT REPRESENT OR WARRANT THAT THE INFORMATION CONTAINED HEREIN OR ATTACHED HERETO IS WITHOUT ANY MATERIAL INACCURACY OR OMISSION.

IN PREPARING THIS DISCLOSURE STATEMENT, THE DEBTORS RELIED ON FINANCIAL DATA DERIVED FROM THE DEBTORS’ BOOKS AND RECORDS AND ON VARIOUS ASSUMPTIONS REGARDING THE DEBTORS’ BUSINESSES. WHILE THE DEBTORS BELIEVE THAT SUCH FINANCIAL INFORMATION FAIRLY REFLECTS THE FINANCIAL CONDITION OF THE DEBTORS AS OF THE DATE HEREOF AND THAT THE ASSUMPTIONS REGARDING FUTURE EVENTS REFLECT REASONABLE BUSINESS JUDGMENTS, NO REPRESENTATIONS OR WARRANTIES ARE MADE AS TO THE ACCURACY OF THE FINANCIAL INFORMATION CONTAINED HEREIN OR ASSUMPTIONS REGARDING THE DEBTORS’ BUSINESSES AND THEIR FUTURE RESULTS AND OPERATIONS. THE DEBTORS EXPRESSLY CAUTION READERS NOT TO PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.

THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE, AND MAY NOT BE CONSTRUED AS, AN ADMISSION OF FACT, LIABILITY, STIPULATION, OR WAIVER. THE DEBTORS OR ANY OTHER AUTHORIZED PARTY MAY SEEK TO INVESTIGATE, FILE, AND PROSECUTE CLAIMS AND MAY OBJECT TO CLAIMS AFTER THE CONFIRMATION OR EFFECTIVE DATE OF THE PLAN IRRESPECTIVE OF WHETHER THIS DISCLOSURE STATEMENT IDENTIFIES ANY SUCH CLAIMS OR OBJECTIONS TO CLAIMS.

THE DEBTORS ARE MAKING THE STATEMENTS AND PROVIDING THE FINANCIAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT AS OF THE DATE HEREOF UNLESS OTHERWISE SPECIFICALLY NOTED. ALTHOUGH THE DEBTORS MAY SUBSEQUENTLY UPDATE THE INFORMATION IN THIS DISCLOSURE STATEMENT, THE DEBTORS HAVE NO AFFIRMATIVE DUTY TO DO SO, AND EXPRESSLY DISCLAIM ANY DUTY TO PUBLICLY UPDATE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS, OR OTHERWISE. HOLDERS OF CLAIMS OR INTERESTS REVIEWING THIS DISCLOSURE STATEMENT SHOULD NOT INFER THAT, AT THE TIME OF THEIR REVIEW, THE FACTS SET FORTH HEREIN HAVE NOT CHANGED SINCE THIS DISCLOSURE STATEMENT WAS FILED. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION, MODIFICATION, OR AMENDMENT. THE DEBTORS RESERVE THE RIGHT TO FILE AN AMENDED OR MODIFIED PLAN AND RELATED DISCLOSURE STATEMENT FROM TIME TO TIME, SUBJECT TO THE TERMS OF THE PLAN AND THE RESTRUCTURING SUPPORT AGREEMENT.

THE DEBTORS HAVE NOT AUTHORIZED ANY ENTITY TO GIVE ANY INFORMATION ABOUT OR CONCERNING THE PLAN OTHER THAN THAT WHICH IS CONTAINED IN THIS DISCLOSURE STATEMENT. THE DEBTORS HAVE NOT AUTHORIZED ANY REPRESENTATIONS CONCERNING THE DEBTORS OR THE VALUE OF THEIR PROPERTY OTHER THAN AS SET FORTH IN THIS DISCLOSURE STATEMENT.

IF THE PLAN IS CONFIRMED BY THE BANKRUPTCY COURT AND THE EFFECTIVE DATE OCCURS, ALL HOLDERS OF CLAIMS OR INTERESTS (INCLUDING THOSE HOLDERS OF CLAIMS OR INTERESTS WHO DO NOT SUBMIT BALLOTS TO ACCEPT OR REJECT THE PLAN, WHO VOTE TO REJECT THE PLAN, OR WHO ARE NOT ENTITLED TO VOTE ON THE PLAN) WILL BE BOUND BY THE TERMS OF THE PLAN AND THE RESTRUCTURING TRANSACTIONS CONTEMPLATED THEREBY.

THE CONFIRMATION AND EFFECTIVENESS OF THE PLAN ARE SUBJECT TO CERTAIN MATERIAL CONDITIONS PRECEDENT DESCRIBED HEREIN AND SET FORTH IN ARTICLE VIII OF THE PLAN. THERE IS NO ASSURANCE THAT THE PLAN WILL BE CONFIRMED OR, IF CONFIRMED, THAT THE CONDITIONS REQUIRED TO BE SATISFIED FOR THE PLAN TO GO EFFECTIVE WILL BE SATISFIED (OR WAIVED).

YOU ARE ENCOURAGED TO READ THE PLAN AND THIS DISCLOSURE STATEMENT IN ITS ENTIRETY, INCLUDING ARTICLE IX, ENTITLED “RISK FACTORS” BEFORE SUBMITTING YOUR BALLOT TO VOTE ON THE PLAN.

THE BANKRUPTCY COURT’S APPROVAL OF THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE A GUARANTEE BY THE COURT OF THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN OR AN ENDORSEMENT BY THE BANKRUPTCY COURT OF THE MERITS OF THE PLAN.

THIS DISCLOSURE STATEMENT IS NOT NECESSARILY PREPARED IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER SIMILAR LAWS. THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) OR ANY SIMILAR FEDERAL, STATE, LOCAL, OR FOREIGN REGULATORY AGENCY, NOR HAS THE SEC OR ANY OTHER AGENCY PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE DEBTORS HAVE SOUGHT TO ENSURE THE ACCURACY OF THE FINANCIAL INFORMATION PROVIDED IN THIS DISCLOSURE STATEMENT; HOWEVER, THE FINANCIAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT OR INCORPORATED HEREIN BY REFERENCE HAS NOT BEEN, AND WILL NOT BE, AUDITED OR REVIEWED BY THE DEBTORS’ INDEPENDENT AUDITORS UNLESS EXPLICITLY PROVIDED OTHERWISE HEREIN.

THE DEBTORS MAKE STATEMENTS IN THIS DISCLOSURE STATEMENT THAT ARE CONSIDERED FORWARD-LOOKING STATEMENTS UNDER FEDERAL SECURITIES LAWS. THE DEBTORS CONSIDER ALL STATEMENTS REGARDING ANTICIPATED OR FUTURE MATTERS, INCLUDING THE FOLLOWING, TO BE FORWARD-LOOKING STATEMENTS:

●

BUSINESS STRATEGY;

●

TECHNOLOGY;

●

FINANCIAL CONDITION, REVENUES, CASH FLOWS, AND EXPENSES;

●

LEVELS OF INDEBTEDNESS, LIQUIDITY, AND COMPLIANCE WITH DEBT COVENANTS;

●

FINANCIAL STRATEGY, BUDGET, PROJECTIONS, AND OPERATING RESULTS;

●

THE AMOUNT, NATURE, AND TIMING OF CAPITAL EXPENDITURES;

●

AVAILABILITY AND TERMS OF CAPITAL;

●

SUCCESSFUL RESULTS FROM THE DEBTORS’ OPERATIONS;

●

COSTS OF CONDUCTING THE DEBTORS’ OTHER OPERATIONS;

●

GENERAL ECONOMIC AND BUSINESS CONDITIONS;

●

EFFECTIVENESS OF THE DEBTORS’ RISK MANAGEMENT ACTIVITIES;

●

COUNTERPARTY CREDIT RISK;

●

THE OUTCOME OF PENDING AND FUTURE LITIGATION;

●

UNCERTAINTY REGARDING THE DEBTORS’ FUTURE OPERATING RESULTS;

●

PLANS, OBJECTIVES, AND EXPECTATIONS;

●

THE ADEQUACY OF THE DEBTORS’ CAPITAL RESOURCES AND LIQUIDITY;

●

RISKS IN CONNECTION WITH ACQUISITIONS; AND

●

THE DEBTORS’ ABILITY TO SATISFY FUTURE CASH OBLIGATIONS.

STATEMENTS CONCERNING THESE AND OTHER MATTERS ARE NOT GUARANTEES OF THE REORGANIZED DEBTORS’ FUTURE PERFORMANCE. THERE ARE RISKS, UNCERTAINTIES, AND OTHER IMPORTANT FACTORS THAT COULD CAUSE THE REORGANIZED DEBTORS’ ACTUAL PERFORMANCE OR ACHIEVEMENTS TO BE DIFFERENT FROM THOSE THEY MAY PROJECT, AND THE DEBTORS UNDERTAKE NO OBLIGATION TO UPDATE THE PROJECTIONS MADE HEREIN. THESE RISKS, UNCERTAINTIES, AND FACTORS MAY INCLUDE THE FOLLOWING: THE DEBTORS’ ABILITY TO CONFIRM AND CONSUMMATE THE PLAN; THE POTENTIAL THAT THE DEBTORS MAY NEED TO PURSUE AN ALTERNATIVE TRANSACTION IF THE PLAN IS NOT CONFIRMED; THE DEBTORS’ ABILITY TO REDUCE THEIR OVERALL FINANCIAL LEVERAGE; THE POTENTIAL ADVERSE IMPACT OF THE CHAPTER 11 CASES ON THE DEBTORS’ OPERATIONS, MANAGEMENT, AND EMPLOYEES; THE RISKS ASSOCIATED WITH OPERATING THE DEBTORS’ BUSINESSES DURING THE CHAPTER 11 CASES; TENANT RESPONSES TO THE CHAPTER 11 CASES; THE DEBTORS’ INABILITY TO DISCHARGE OR SETTLE CLAIMS DURING THE CHAPTER 11 CASES; GENERAL ECONOMIC, BUSINESS, AND MARKET CONDITIONS; CURRENCY FLUCTUATIONS; INTEREST RATE FLUCTUATIONS; PRICE INCREASES; EXPOSURE TO LITIGATION; A DECLINE IN THE DEBTORS’ MARKET SHARE DUE TO COMPETITION; THE DEBTORS’ ABILITY TO IMPLEMENT COST REDUCTION INITIATIVES IN A TIMELY MANNER; THE DEBTORS’ ABILITY TO DIVEST EXISTING BUSINESSES; FINANCIAL CONDITIONS OF THE DEBTORS’ TENANTS; ADVERSE TAX CHANGES; LIMITED ACCESS TO CAPITAL RESOURCES; CHANGES IN DOMESTIC AND FOREIGN LAWS AND REGULATIONS; TRADE BALANCE; NATURAL DISASTERS; PANDEMICS; GEOPOLITICAL INSTABILITY; AND THE EFFECTS OF GOVERNMENTAL REGULATION ON THE DEBTORS’ BUSINESSES.

SPECIAL NOTICE REGARDING FEDERAL AND STATE SECURITIES LAWS

The Bankruptcy Court has not reviewed this Disclosure Statement or the Plan, and the securities to be issued on or after the Effective Date, if any, will not have been the subject of a registration statement filed with the SEC under the Securities Act of 1933, as amended (the “Securities Act”), or any securities regulatory authority of any state under any state securities law (“Blue Sky Laws”). The Plan has not been approved or disapproved by the SEC or any similar federal, state, local, or foreign federal regulatory authority and neither the SEC nor any such similar regulatory authority has passed upon the accuracy or adequacy of the information contained in this Disclosure Statement or the Plan. Any representation to the contrary is a criminal offense.

Neither the Solicitation nor this Disclosure Statement constitutes an offer to sell or the solicitation of an offer to buy securities in any state or jurisdiction in which such offer or solicitation is not authorized.

This Disclosure Statement contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that any forward-looking statements in this Disclosure Statement are based on assumptions that are believed to be reasonable, but are subject to a wide range of risks, including risks associated with the following: (a) future financial results and liquidity, including the ability to finance operations in the ordinary course of business; (b) the relationships with and payment terms provided by trade creditors; (c) additional post-restructuring financing requirements; (d) future dispositions and acquisitions; (e) the proposed restructuring and costs associated therewith; (f) the effect of conditions in the local, national, and global economy on the Debtors; (g) the ability to obtain relief from the bankruptcy court to facilitate the smooth operation of the Debtors’ businesses under chapter 11; (h) the confirmation and consummation of the Plan; (i) the terms and conditions of the New Preferred Stock and the New Common Stock to be entered into, or issued, as the case may be, pursuant to the Plan; and (j) each of the other risks identified in this Disclosure Statement. Due to these uncertainties, the reader cannot be assured that any forward-looking statements will prove to be correct. The Debtors are under no obligation to (and expressly disclaim any obligation to) update or alter any forward-looking statements whether as a result of new information, future events, or otherwise, unless instructed to do so by the Bankruptcy Court.

EXCEPT TO THE EXTENT PUBLICLY AVAILABLE, THIS DISCLOSURE STATEMENT, THE PLAN, AND THE INFORMATION SET FORTH HEREIN AND THEREIN ARE CONFIDENTIAL. THIS DISCLOSURE STATEMENT AND THE PLAN CONTAIN MATERIAL NON-PUBLIC INFORMATION CONCERNING THE DEBTORS, THEIR SUBSIDIARIES, AND THEIR RESPECTIVE DEBT AND SECURITIES. THE FEDERAL SECURITIES LAWS OF THE UNITED STATES PROHIBIT ANY PERSON (AS DEFINED IN SECTION 101(41) OF THE BANKRUPTCY CODE, A “PERSON”) WHO HAS MATERIAL NON-PUBLIC INFORMATION ABOUT A COMPANY, WHICH IS OBTAINED FROM THE COMPANY OR ITS REPRESENTATIVES, FROM PURCHASING OR SELLING SECURITIES OF SUCH COMPANY OR FROM COMMUNICATING THE INFORMATION TO ANY OTHER PERSON UNDER CIRCUMSTANCES IN WHICH IT IS REASONABLY FORESEEABLE THAT SUCH PERSON IS LIKELY TO PURCHASE OR SELL SUCH SECURITIES. NO PARTY SHALL USE OR COMMUNICATE TO ANY PERSON OR ENTITY UNDER CIRCUMSTANCES WHERE IT IS REASONABLY LIKELY THAT SUCH PERSON OR ENTITY IS LIKELY TO USE, OR CAUSE ANY PERSON OR ENTITY TO USE, ANY CONFIDENTIAL INFORMATION IN CONTRAVENTION OF THE SECURITIES EXCHANGE ACT OF 1934 OR ANY OF ITS RULES AND REGULATIONS, INCLUDING RULE 10B-5 PROMULGATED THEREUNDER.

You are cautioned that all forward-looking statements are necessarily speculative, and there are certain risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements. The liquidation analysis, financial projections, and other projections and forward-looking information contained herein and attached hereto are only estimates, and the timing and amount of actual distributions to Holders of Allowed Claims and the retention of the Allowed Interests, among other things, may be affected by many factors that cannot be predicted. Any analyses, estimates, or recovery projections may or may not turn out to be accurate.

TABLE OF CONTENTS

			Page
I.	INTRODUCTION		1

II.	PRELIMINARY STATEMENT		1

III.	QUESTIONS AND ANSWERS REGARDING THIS DISCLOSURE STATEMENT AND THE PLAN		3

	A.	What is chapter 11?	3
	B.	Why are the Debtors sending me this Disclosure Statement?	3
	C.	Why are votes being solicited prior to Bankruptcy Court approval of the Disclosure Statement?	3
	D.	Am I entitled to vote on the Plan?	3
	E.	What will I receive from the Debtors if the Plan is consummated?	5
	F.	What will I receive from the Debtors if I hold an Allowed Administrative Claim, DIP Claim, or a Priority Tax Claim?	8
	G.	Are any regulatory approvals required to consummate the Plan?	11
	H.	What happens to my recovery if the Plan is not confirmed or does not go effective?	11
	I.	If the Plan provides that I get a distribution, do I get it upon Confirmation or when the Plan goes effective, and what is meant by “Confirmation,” “Effective Date,” and “Consummation?”	11
	J.	What are the sources of Cash and other consideration required to fund the Plan?	11
	K.	Is there potential litigation related to the Plan?	12
	L.	How will the preservation of the Causes of Action impact my recovery under the Plan?	12
	M.	Will there be releases and exculpation granted to parties in interest as part of the Plan?	13
	N.	When is the deadline to vote on the Plan?	17
	O.	How do I vote on the Plan?	17
	P.	Why is the Bankruptcy Court holding a Confirmation Hearing?	17
	Q.	When is the Confirmation Hearing set to occur?	18
	R.	What is the purpose of the Confirmation Hearing?	18
	S.	What is the effect of the Plan on the Debtors’ ongoing businesses?	18
	T.	Who do I contact if I have additional questions with respect to this Disclosure Statement or the Plan?	18
	U.	Do the Debtors recommend voting in favor of the Plan?	19
	V.	Who Supports the Plan?	19

IV.	THE DEBTORS’ CORPORATE HISTORY, STRUCTURE, AND BUSINESS OVERVIEW		19

	A.	The Company’s History and Business Operations	19
	B.	The Debtors’ Management and Workforce	21
	C.	Litigation	22
	D.	The Debtors’ Prepetition Capital Structure	23

V.	CIRCUMSTANCES LEADING TO THE CHAPTER 11 FILINGS		28

	A.	Market Conditions	28
	B.	Prepetition Debt Obligations and Liquidity Constraints	29
	C.	The Company’s Prepetition Restructuring Efforts	29

VI.	MATERIAL DEVELOPMENTS AND ANTICIPATED EVENTS OF THE CHAPTER 11 CASES		29

	A.	First Day Relief	29
	B.	Proposed Confirmation Schedule	30

VII.	SUMMARY OF THE PLAN		30

	A.	Substantive Consolidation	30
	B.	General Settlement of Claims and Interests	31
	C.	Restructuring Transactions	31
	D.	Sources of Consideration for Plan Distributions	32
	E.	Deregistration of Existing Common Equity Interests; Issuance and Distribution of New Common Stock and New Preferred Equity	32
	F.	The Direct Investment Preferred Equity Raise and the Direct Investment Commitments	33
	G.	Corporate Existence	33
	H.	Vesting of Assets in the Reorganized Debtors	33
	I.	New Shareholders Agreement	33
	J.	Cancellation of Existing Securities and Agreements	33
	K.	Corporate Action	34
	L.	New Governance Documents	34
	M.	Indemnification Obligations	34
	N.	Directors and Officers of the Reorganized Debtors	35
	O.	Effectuating Documents; Further Transactions	35
	P.	Section 1145 Exemption	35
	Q.	Section 1146 Exemption from Certain Taxes and Fees	36
	R.	Director and Officer Liability Insurance	36
	S.	Management Incentive Plan	36
	T.	Preservation of Causes of Action	37
	U.	Release of Avoidance Actions	37
	V.	Release of Consenting Vendors	38
	W.	Single Satisfaction of Claims	38
	X.	Releases	38

VIII.	OTHER KEY ASPECTS OF THE PLAN		38

	A.	Treatment of Executory Contracts and Unexpired Leases	38
	B.	Provisions Governing Distributions	42
	C.	Conditions Precedent to the Effective Date	47
	D.	Modification, Revocation, or Withdrawal of the Plan	48

IX.	RISK FACTORS		49

	A.	Bankruptcy Law Considerations	49

	B.	Risks Related to Recoveries Under the Plan	54
	C.	Risks Relating to the New Preferred Stock and New Common Stock Issued Under the Plan	55
	D.	Risks Related to the Debtors’ and the Reorganized Debtors’ Businesses	56

X.	SOLICITATION AND VOTING PROCEDURES		58

	A.	Holders of Claims Entitled to Vote on the Plan	58
	B.	Votes Required for Acceptance by a Class	58
	C.	Certain Factors to Be Considered Prior to Voting	58
	D.	Solicitation Procedures	59

XI.	CONFIRMATION OF THE PLAN		60

	A.	The Confirmation Hearing	60
	B.	Requirements for Confirmation of the Plan	60
	C.	Feasibility	60
	D.	Acceptance by Impaired Classes	61
	E.	Confirmation Without Acceptance by All Impaired Classes	61
	F.	Liquidation Analysis	62

XII.	CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN		62

	A.	Introduction	62
	B.	Certain U.S. Federal Income Tax Consequences of the Plan to the Debtors and the Reorganized Debtors	64
	C.	Certain U.S. Federal Income Tax Consequences of the Plan to Non-U.S. Holders of Allowed Claims	69

XIII.	RECOMMENDATION		72

iii

EXHIBITS¹

EXHIBIT A

Plan of Reorganization

EXHIBIT B

Vendor Restructuring Support Agreement

EXHIBIT C

Financial Projections

EXHIBIT D

Liquidation Analysis

	1	Each Exhibit is incorporated herein by reference as if fully set forth in this Disclosure Statement. The summaries provided herein to the aforementioned Exhibits are fully qualified in all respects to summaries to each applicable Exhibit.

INTRODUCTION

PARTS iD, Inc. (“PARTS iD” or the “Company”) and PARTS iD, LLC, as debtors and debtors in possession⁴(collectively, the “Debtors”), submit this disclosure statement (this “Disclosure Statement”) for consideration under section 1125 of the Bankruptcy Code, to Holders of Claims against the Debtors in connection with the solicitation of votes on the Joint Prepackaged Chapter 11 Plan of Reorganization of PARTS iD, Inc. and PARTS iD, LLC (the “Plan”), dated December 20, 2023.⁵ A copy of the Plan is attached hereto as Exhibit A and incorporated herein by reference. The Plan constitutes a separate chapter 11 plan for each of the Debtors.

THE DEBTORS BELIEVE THAT THE COMPROMISES CONTEMPLATED UNDER THE PLAN ARE FAIR AND EQUITABLE, MAXIMIZE THE VALUE OF THE DEBTORS’ ESTATES, AND PROVIDE THE BEST RECOVERY TO STAKEHOLDERS. AT THIS TIME, THE DEBTORS BELIEVE THAT THE PLAN REPRESENTS THE BEST AVAILABLE OPTION FOR COMPLETING THE CHAPTER 11 CASES. THE DEBTORS STRONGLY RECOMMEND THAT YOU VOTE TO ACCEPT THE PLAN.

II.

PRELIMINARY STATEMENT

PARTS iD is a leading publicly traded, technology-driven, digital commerce company specializing in the U.S. automotive aftermarket and the adjacent complex parts markets. Headquartered in Cranbury, New Jersey, the Company provides customers a differentiated experience with advanced product search capabilities, proprietary product options, exclusive shop by service type functionality and an unrivaled product catalog at competitive prices.

The Company delivers this customer experience using a purpose-built technology platform and user interface (UI), proprietary parts and accessories fitment data with more than fourteen billion product and fitment data points powered with machine learning, and a catalog spanning approximately eighteen million parts and accessories, when fully available, from over one thousand suppliers that partner with the Company across eight verticals, including BOATiD.com, MOTORCYCLEiD.com, CAMPERiD.com.

Despite the Company’s stable platform, supply chain disruptions, market headwinds and economic conditions caused deterioration in margins ultimately resulting in constrained liquidity. Further, fluctuations in business and consumer confidence caused by a spike in inflation and interest rates impacted automotive and consumer spending on automotive parts and accessories. The Company’s limited liquidity and the economic factors set forth above directly and negatively affected the Company’s revenue, margins and overall business performance.

In light of the challenges facing the automotive parts industry the Company has been engaged in extensive, ongoing restructuring efforts with their lenders and key vendors for the past several months. To that end, the Company retained DLA Piper LLP (US) as its restructuring counsel and has been working with SRV Partners, LLC a restructuring and turnaround firm, to pursue and evaluate options to address the Company’s debt and explore strategic alternatives.

The Company is soliciting this Disclosure Statement prior to filing its Chapter 11 Cases. However, in light of the forthcoming filing, and for ease of reference, this Disclosure Statement makes references to PARTS iD, Inc. and PARTS iD, LLC and its as “Debtors” and/or “Debtors in Possession.”

The summary of the Plan provided herein is qualified in its entirety by reference to the Plan. In the case of any inconsistency between this Disclosure Statement and the Plan, the Plan will govern. Capitalized terms not defined herein shall have the meanings ascribed to them in the Plan.

As a result of the Debtors’ prepetition restructuring initiatives, following extensive, arm’s-length negotiations, the Debtors and Vendors representing more than 80% of all Vendor claims for past due invoices reached an agreement regarding the restructuring of outstanding trade debt through certain transactions reflected in the Vendor support agreement, a copy of which is attached hereto as Exhibit B (the “Vendor RSA”), that will be implemented through the Plan. The Company’s efforts to secure funding to affect those transactions led the Debtors to negotiate with Fifth Star, Inc. (the “Plan Sponsor”) (i) prepetition and postpetition debtor-in-possession credit facilities under the Credit Agreement (as defined below) and (ii) the material terms and conditions of restructuring transactions to be implemented either though the Plan (the “Plan Restructuring”) or alternatively, through a sale of substantially all of the Debtors’ assets pursuant to section 363 of the Bankruptcy Code (a “Sale Transaction”).

The Plan Restructuring will provide, inter alia, that the Company’s outstanding prepetition secured debt obligations will be repaid, restructured or satisfied, and that the Company’s key vendors will receive the benefit of the transactions negotiated with the Company prior to the Petition Date. Upon the effective date of the Plan, the capital structure of the reorganized Company will be streamlined and comprise: (i) general unsecured debt payable in the ordinary course of business of the reorganized Company; and (ii) the new preferred and common stock in the reorganized Company issued pursuant to the Plan. If the Debtors fail to meet certain milestones in the Credit Agreement, the Debtors will pursue the Sale Transaction with the Plan Sponsor serving as the stalking horse bidder.

As a condition to the closing of the Credit Agreement (as defined below), each of the holders of Claims in Classes 3, 4, and 5 have provided their consent to the treatment contained in the Plan and are obligated to vote to accept the Plan. The proposed treatment of holders of Claims in Classes 7 and 8 under the Plan, which has already received the support of more than 80% of such holders under the Vendor RSA, indicates that the Plan Restructuring will have the overwhelming support of each of the voting Classes. Given the significant support for the Plan Restructuring, the Debtors elected to pursue a prepackaged restructuring to minimize the costs and impact of the in-court restructuring on the Debtors’ businesses. Accordingly, the Debtors agreed to certain milestones, including (i) by no later than 11:59 p.m. (EST) forty (40) days after the Petition Date, the Bankruptcy Court shall have entered an order confirming the Plan, and (ii) by no later than 11:59 p.m. (EST) fifty-four (54) days after the Petition Date, the Effective Date shall have occurred. The Debtors believe they can confirm the Plan and emerge from chapter 11 within these time periods without prejudicing the ability of any parties to assert their rights in the Chapter 11 Cases.

The Plan Restructuring is a significant achievement for the Debtors and a welcomed culmination of the lengthy negotiations with the Debtors’ key constituents. The Debtors strongly believe that the Plan Restructuring is in the best interests of the Debtors’ creditors. Given the Debtors’ core strengths, strong platform and relationship with key vendors, the Debtors are confident that they can implement the restructuring transactions contemplated by the Plan to ensure the Debtors’ long-term viability. For these reasons, the Debtors strongly recommend that Holders of Claims entitled to vote to accept or reject the Plan vote to accept the Plan.

III.

QUESTIONS AND ANSWERS REGARDING THIS DISCLOSURE STATEMENT AND THE PLAN

What is chapter 11?

Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. In addition to permitting debtor rehabilitation, chapter 11 promotes equality of treatment for creditors and similarly situated equity interest holders, subject to the priority of distributions prescribed by the Bankruptcy Code.

The commencement of a Chapter 11 Case creates an estate that comprises all of the legal and equitable interests of the debtor as of the date the Chapter 11 Case is commenced. The Bankruptcy Code provides that a debtor may continue to operate its business and remain in possession of its property as a “debtor in possession.”

Consummating a chapter 11 plan is the principal objective of a Chapter 11 Case. A Bankruptcy Court’s confirmation of a plan binds the debtor, any person acquiring property under the plan, any creditor or equity interest holder of the debtor, and any other entity as may be ordered by the bankruptcy court. Subject to certain limited exceptions, the order issued by a bankruptcy court confirming a plan provides for the treatment of the debtor’s liabilities in accordance with the terms of the confirmed plan.

Why are the Debtors sending me this Disclosure Statement?

The Debtors are seeking to obtain Bankruptcy Court approval of the Plan. Before soliciting acceptances of the Plan, section 1125 of the Bankruptcy Code requires the Debtors to prepare a disclosure statement containing adequate information of a kind, and in sufficient detail, to enable a hypothetical reasonable investor to make an informed judgment regarding acceptance of the Plan and to share such disclosure statement with all holders of claims whose votes on the Plan are being solicited. This Disclosure Statement is being submitted in accordance with these requirements.

Why are votes being solicited prior to Bankruptcy Court approval of the Disclosure Statement?

By sending this Disclosure Statement and soliciting votes for the Plan prior to approval by the Bankruptcy Court, the Debtors are preparing to seek Confirmation of the Plan shortly after commencing the Chapter 11 Cases. The Debtors will ask the Bankruptcy Court to approve this Disclosure Statement together with Confirmation of the Plan at the same hearing, subject to the Bankruptcy Court’s approval and availability.

Am I entitled to vote on the Plan?

Your ability to vote on, and your distribution under, the Plan, if any, depends on what type of Claim or Interest you hold and whether you held that Claim or Interest as of the Voting Record Date (i.e., as of December 8, 2023). Each category of holders of Claims or Interests, as set forth in Article III of the Plan pursuant to sections 1122(a) and 1123(a)(1) of the Bankruptcy Code, is referred to as a “Class.” Each Class’s respective voting status is set forth below:

Class	Claims and Interests	Status	Voting Rights
Class 1	Other Priority Claims	Unimpaired	Not Entitled to Vote (Deemed to Accept)
Class 2	Other Secured Claims	Unimpaired	Not Entitled to Vote (Deemed to Accept)

Class	Claims and Interests	Status	Voting Rights
Class 3	Senior Secured Note Claims	Impaired	Entitled to Vote
Class 4	MCA Claims	Impaired	Entitled to Vote
Class 5	Subordinated Secured Note Claims	Impaired	Entitled to Vote
Class 6	Litigation Funding Claims	Unimpaired	Not Entitled to Vote (Deemed to Accept)
Class 7	Vendor Claims	Impaired	Entitled to Vote
Class 8	Convenience Claims	Impaired	Entitled to Vote
Class 9	General Unsecured Claims	Impaired	Not Entitled to Vote (Deemed to Reject)
Class 10	Intercompany Claims	Impaired	Not Entitled to Vote (Deemed to Reject)
Class 11	Intercompany Interests	Unimpaired / Impaired	Not Entitled to Vote (Deemed to Accept / Reject)
Class 12	Existing Equity Interests	Impaired	Not Entitled to Vote (Deemed to Reject)

Except as otherwise provided in the Plan, nothing under the Plan shall affect the Debtors’ or the Reorganized Debtors’ rights regarding any Unimpaired Claims, including, all rights regarding legal and equitable defenses to, or setoffs or recoupments against, any such Unimpaired Claims.


	E.	What will I receive from the Debtors if the Plan is consummated?

The following table provides a summary of the anticipated recovery to Holders of Claims or Interests under the Plan. Any estimates of Claims or Interests in this Disclosure Statement may vary from the final amounts allowed by the Bankruptcy Court. Your ability to receive distributions under the Plan depends upon the ability of the Debtors to obtain Confirmation and meet the conditions necessary to consummate the Plan.

THE PROJECTED RECOVERIES SET FORTH IN THE TABLE BELOW ARE ESTIMATES ONLY AND THEREFORE ARE SUBJECT TO CHANGE. FOR A COMPLETE DESCRIPTION OF THE DEBTORS’ CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS, REFERENCE SHOULD BE MADE TO THE ENTIRE PLAN.⁶

SUMMARY OF ESTIMATED RECOVERIES
Class	Claim/Interest	Treatment of Claim/Interest	Projected Allowed Amount of Claims	Estimated % Recovery
Class 1	Other Priority Claims	Each Holder of an Allowed Other Priority Claim shall receive, in full and final satisfaction of such Allowed Other Priority Claim, (i) an amount of Cash equal to the amount of such Allowed Other Priority Claim, (ii) other treatment consistent with the provisions of section 1129(a)(9) of the Bankruptcy Code, or (iii) such other terms as agreed to among the Debtors and the holders thereof, subject to the consent of the Plan Sponsor.	N/A	100%
Class 2	Other Secured Claim	Each Holder of an Allowed Other Secured Claim shall receive, in full and final satisfaction of such Allowed Other Secured Claim, at the option of the applicable Debtor, payment in full in Cash of such Holder’s Allowed Other Secured Claim or such other treatment rendering such Holder’s Allowed Other Secured Claim Unimpaired, subject to the consent of the Plan Sponsor.	N/A	100%
Class 3	Senior Secured Note Claims	Each Holder of an Allowed Senior Secured Note Claim shall receive, on the Effective Date, in full and final satisfaction of such Allowed Senior Secured Note Claim, its Pro Rata share of payment in Cash in the aggregate amount of $4,224,500 minus any payments made to such Holders on account of such Claims during these Chapter 11 Cases.	$4,879,298	87%

The recoveries set forth below may change based upon changes in the amount of Claims that are “Allowed” as well as other factors related to the Debtors’ business operations and general economic conditions.

SUMMARY OF ESTIMATED RECOVERIES
Class	Claim/Interest	Treatment of Claim/Interest	Projected Allowed Amount of Claims	Estimated % Recovery
Class 4	MCA Claims	Each Holder of an Allowed MCA Claim shall receive, on the Effective Date, in full and final satisfaction of such Allowed MCA Claim, either the Wave Distribution or the RCNY Distribution, as applicable.	$2,618,000	90%
Class 5	Subordinated Secured Note Claims	Each Holder of an Allowed Subordinated Secured Note Claim shall, at the option of the applicable Holder, be entitled to receive two (2) of the following; provided, however, that no Holder of an Allowed Subordinated Secured Note Claim shall receive, in the aggregate, more than 100% of the Allowed amount of such Holder’s Subordinated Secured Note Claim the aggregate equal the full amount of such Holder’s Allowed Subordinated Secured Note Claim: (i) payment in Cash of 55% of such Allowed Subordinated Secured Note Claim; (ii) such Holder’s Pro Rata share from the net recoveries (after payments of fees, litigation financing and taxes) from the Litigation Proceeds; and (iii) payment in Cash by the Reorganized Debtors upon the achievement of an EBITDA target to be agreed between the Plan Sponsor and the Debtors, which shall be disclosed in the Plan Supplement.	$7,462,564	100%
Class 6	Litigation Funding Claims	Each Allowed Litigation Funding Claim shall be Reinstated on the Effective Date.	$1,500,000	100%

SUMMARY OF ESTIMATED RECOVERIES
Class	Claim/Interest	Treatment of Claim/Interest	Projected Allowed Amount of Claims	Estimated % Recovery
Class 7	Vendor Claims	Except to the extent that a Holder of an Allowed Vendor Claim agrees to a less favorable treatment, in exchange for full and final satisfaction, settlement, release, and discharge of each Allowed Vendor Claim and as consideration for such Holder’s agreement to maintain Favorable Trade Terms after the Effective Date and to execute such further documentation reflecting the Favorable Trade Terms as the Reorganized Debtors may reasonably request, each Holder of an Allowed Vendor Claim shall receive: (i) on the later of the Effective Date and the date such Vendor Claim becomes Allowed, payment in Cash in an amount equal to 25% of such Allowed Vendor Claim; and (ii) beginning the month following the Effective Date or the date such Vendor Claim becomes Allowed, payment in the aggregate amount equal to 30% of its Allowed Vendor Claim, paid in equal monthly installments over a period of 36 months; provided, however, that the Reorganized Debtors’ obligations to make such installment payments are contingent upon the Holder of the Allowed Vendor Claim continuing to maintain and provide Favorable Trade Terms (unless such Holder is permitted to modify the trade terms as a result of the Reorganized Debtors’ failure to make a payment owed to such Holder).	$30,386,722	55%
Class 8	Convenience Claims	Except to the extent that a Holder of an Allowed Convenience Claim agrees to a less favorable treatment, in exchange for full and final satisfaction settlement, release, and discharge of each Allowed Convenience Claim, on the Effective Date each Holder of an Allowed Convenience Claim shall receive Cash in an amount equal to 65% of its Allowed Convenience Claim.	$835,775	65%
Class 9	General Unsecured Claims	Each Allowed General Unsecured Claim shall be cancelled, released, and extinguished without any distribution on account of such General Unsecured Claim.	$16,139,057	0%

SUMMARY OF ESTIMATED RECOVERIES
Class	Claim/Interest	Treatment of Claim/Interest	Projected Allowed Amount of Claims	Estimated % Recovery
Class 10	Intercompany Claims	Each Allowed Intercompany Claim shall be cancelled, released, and extinguished without any distribution on account of such Intercompany Claims.	N/A	0%
Class 11	Intercompany Interests	Each Allowed Intercompany Interest shall be, either: (i) Reinstated; or (ii) cancelled, released, and extinguished without any distribution on account of such Intercompany Interests, or receive such other tax-efficient treatment (to the extent reasonably practicable) as determined by the Debtors or Reorganized Debtors, as applicable, with the consent of the Plan Sponsor.	N/A	0% or 100%
Class 12	Existing Equity Interests	Each Allowed Existing Equity Interest shall be cancelled, released and extinguished. Class 12 is not entitled to receive any Distribution under the Plan.	N/A	0%

What will I receive from the Debtors if I hold an Allowed Administrative Claim, DIP Claim, or a Priority Tax Claim?

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, DIP Claims, Professional Fee Claims, and Priority Tax Claims have not been classified and, thus, are excluded from the Classes of Claims and Interests set forth in Article III of the Plan.

Administrative Claims

Except with respect to the Professional Fee Claims, Restructuring Expenses, and Claims for fees and expenses pursuant to section 1930 of chapter 123 of the Judicial Code, and except to the extent that a Holder of an Allowed Administrative Claim and the Debtors against which such Allowed Administrative Claim is asserted agree to less favorable treatment for such Holder, or such Holder has been paid by any Debtor on account of such Allowed Administrative Claim prior to the Effective Date, each Holder of an Allowed Administrative Claim will receive in full and final satisfaction of its Administrative Claim (a) an amount of Cash equal to the amount of such Allowed Administrative Claim, (b) other treatment consistent with the provisions of section 1129(a)(9) of the Bankruptcy Code, or (c) such other terms as agreed to among the Debtors and the holders thereof, subject to the consent of the Plan Sponsor, in each case, in accordance with the following: (1) if an Administrative Claim is Allowed on or prior to the Effective Date, on the Effective Date or as soon as reasonably practicable thereafter (or, if not then due, when such Allowed Administrative Claim is due or as soon as reasonably practicable thereafter); (2) if such Administrative Claim is not Allowed as of the Effective Date, on the date of such allowance or as soon as reasonably practicable thereafter, but in any event no later than thirty (30) days after the date on which an order allowing such Administrative Claim becomes a Final Order; (3) if such Allowed Administrative Claim is based on liabilities incurred by the Debtors in the ordinary course of their business after the Petition Date in accordance with the terms and conditions of the particular transaction giving rise to such Allowed Administrative Claim without any further action by the Holder of such Allowed Administrative Claim; (4) at such time and upon such terms as may be agreed upon by such Holder and the Debtors or the Reorganized Debtors, as applicable, and in each case, with the consent of the Plan Sponsor; or (5) at such time and upon such terms as set forth in an order of the Bankruptcy Court.

DIP Claims

All DIP Claims shall be deemed Allowed as of the Effective Date in an amount equal to (1) the principal amount outstanding under the DIP Facility on such date, (2) all interest accrued and unpaid thereon to the date of payment, and (3) all accrued and unpaid fees, expenses, and non-contingent indemnification obligations payable under the DIP Facility Documents and the DIP Orders.

Except to the extent that a Holder of an Allowed DIP Claim agrees to less favorable treatment, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, each Allowed DIP Claim, on the Effective Date each such Holder shall receive the following treatment, as applicable:

(i)

the Holder of an Allowed New Money DIP Claim shall receive its Pro Rata share of the New Preferred Stock;

(ii)

each Holder of an Allowed Tranche 1 Roll-Up DIP Claim or Tranche 2 Roll-Up DIP Claim shall receive its Pro Rata share of New Common Stock; and

(iii)

the Holder of an Allowed Tranche 3 Roll-Up DIP Claim shall receive Cash equal to the amount of such Allowed Tranche 3 Roll-Up DIP Claim.

On the Effective Date, the DIP Facility and all DIP Facility Documents shall be deemed cancelled, all Liens on property of the Debtors and the Reorganized Debtors arising out of or related to the DIP Facility shall automatically terminate, and all collateral subject to such Liens shall be automatically released, in each case without further action by the DIP Lenders and all guarantees of the Debtors and Reorganized Debtors arising out of or related to the DIP Claims shall be automatically discharged and released, in each case without further action by the DIP Lenders. The DIP Lenders shall take all actions to effectuate and confirm such termination, release, and discharge as reasonably requested by the Debtors or the Reorganized Debtors, as applicable, and the Debtors shall be permitted to file any applicable releases or terminations.

Professional Fee Claims

Final Fee Applications and Payment of Professional Fee Claims

All requests for payment of Professional Fee Claims for services rendered and reimbursement of expenses incurred prior to the Effective Date must be Filed no later than forty-five (45) days after the Effective Date. The Bankruptcy Court shall determine the Allowed amounts of such Professional Fee Claims after notice and a hearing in accordance with the procedures established by the Bankruptcy Court. The Reorganized Debtors shall pay Professional Fee Claims in Cash in the amount the Bankruptcy Court allows, including from the Professional Escrow Account, and which Allowed amount shall not be subject to disallowance, setoff, recoupment, subordination, recharacterization or reduction of any kind, including pursuant to section 502(d) of the Bankruptcy Code.

Professional Escrow Account

No later than the Effective Date, the Debtors shall establish and fund the Professional Escrow Account with Cash equal to the Professional Fee Amount. The Professional Escrow Account shall be maintained in trust solely for the Professionals until all Professional Fee Claims Allowed by the Bankruptcy Court have been irrevocably paid in full pursuant to one or more Final Orders. Such funds shall not be considered property of the Estates of the Debtors or the Reorganized Debtors. The amount of Allowed Professional Fee Claims shall be paid in Cash to the Professionals by the Reorganized Debtors from the Professional Escrow Account as soon as reasonably practicable after such Professional Fee Claims are Allowed; provided that the Debtors’ and the Reorganized Debtors’ obligations to pay Allowed Professional Fee Claims shall not be limited nor be deemed limited to funds held in the Professional Escrow Account. When such Allowed Professional Fee Claims have been paid in full, any remaining amount in the Professional Escrow Account shall promptly be transferred to the Reorganized Debtors without any further notice to or action, order, or approval of the Bankruptcy Court or any other Entity.

Professional Fee Amount Estimates

Professionals shall reasonably estimate their unpaid Professional Fee Claims in consultation with the Plan Sponsor and other unpaid fees and expenses incurred in rendering services to the Debtors before and as of the Effective Date, and shall deliver such estimate to the Debtors no later than five (5) days before the Effective Date; provided that such estimate shall not be deemed to limit the amount of the fees and expenses that are the subject of each Professional’s final request for payment in the Chapter 11 Cases. If a Professional does not provide an estimate, the Debtors or Reorganized Debtors may estimate the unpaid and unbilled fees and expenses of such Professional in consultation with the Plan Sponsor.

Post-Confirmation Date Fees and Expenses

Except as otherwise specifically provided in the Plan, from and after the Confirmation Date, the Debtors shall, in the ordinary course of business and without any further notice to or action, order, or approval of the Bankruptcy Court, pay in Cash the reasonable and documented legal, professional, or other fees and expenses related to implementation of the Plan and Consummation incurred by the Debtors. Upon the Confirmation Date, any requirement that Professionals comply with sections 327 through 331, 363, and 1103 of the Bankruptcy Code in seeking retention or compensation for services rendered after such date shall terminate, and the Debtors may employ and pay any Professional in the ordinary course of business for the period after the Confirmation Date without any further notice to or action, order, or approval of the Bankruptcy Court.

Priority Tax Claims

Except to the extent that a Holder of an Allowed Priority Tax Claim agrees to a less favorable treatment, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Priority Tax Claim, each Holder of such Allowed Priority Tax Claim will receive in full and final satisfaction of its Priority Tax Claim (a) an amount of Cash equal to the amount of such Allowed Priority Tax Claim, (b) other treatment consistent with the provisions of section 1129(a)(9) of the Bankruptcy Code, or (c) such other terms as agreed to among the Debtors and the holders thereof, subject to the consent of the Plan Sponsor.

Payment of Statutory Fees

All fees payable pursuant to 28 U.S.C. § 1930, together with the statutory rate of interest set forth in 31 U.S.C. § 3717, to the extent applicable (“Quarterly Fees”) prior to the Effective Date shall be paid by the Debtors on the Effective Date. After the Effective Date, the Reorganized Debtors shall be jointly and severally liable to pay any and all Quarterly Fees when due and payable. The Debtors shall file all monthly operating reports due prior to the Effective Date when they become due, using UST Form 11-MOR. After the Effective Date, the Reorganized Debtors shall file with the Bankruptcy Court separate UST Form 11-PCR reports when they become due. Each and every one of the Debtors and Reorganized Debtors shall remain obligated to pay Quarterly Fees to the Office of the U.S. Trustee until that particular Debtor’s Chapter 11 Case is converted to a case under chapter 7 of the Bankruptcy Code, dismissed, or closed, whichever occurs first. The U.S. Trustee shall not be required to file any Administrative Claim in the Chapter 11 Cases and shall not be treated as providing any release under the Plan.

Restructuring Expenses

On the Effective Date, the Debtors or the Reorganized Debtors shall pay in full in Cash any outstanding Restructuring Expenses without the requirement for the filing of retention applications, fee applications, Proofs of Claim or any other applications in the Chapter 11 Cases and without any requirement for further notice of Bankruptcy Court review or approval. Such Restructuring Expenses shall be Allowed as Administrative Claims upon incurrence and shall not be subject to any offset, defense, counter-claim, or credit.

Are any regulatory approvals required to consummate the Plan?

At this time, there are no known regulatory approvals that are required to consummate the Plan. To the extent any such regulatory approvals or other authorizations, consents, rulings, or documents are necessary to implement and effectuate the Plan, however, it is a condition precedent to the Effective Date that they be obtained.

What happens to my recovery if the Plan is not confirmed or does not go effective?

In the event that the Plan is not confirmed or does not go effective, there is no assurance that the Debtors will be able to reorganize their businesses. It is possible that any alternative may provide holders of Claims with less than they would have received pursuant to the Plan. For a more detailed description of the consequences of an extended chapter 11 case, or of a liquidation scenario, see Article X.F. of this Disclosure Statement, and the Liquidation Analysis attached hereto as Exhibit D.

If the Plan provides that I get a distribution, do I get it upon Confirmation or when the Plan goes effective, and what is meant by “Confirmation,” “Effective Date,” and “Consummation?”

“Confirmation” of the Plan refers to approval of the Plan by the Bankruptcy Court. Confirmation of the Plan does not guarantee that you will receive the distribution indicated under the Plan. After Confirmation of the Plan by the Bankruptcy Court, there are conditions that need to be satisfied or waived so that the Plan can go effective. Initial distributions to holders of Allowed Claims will only be made on the date the Plan becomes effective—the “Effective Date”—or as soon as reasonably practicable thereafter, as specified in the Plan. “Consummation” of the Plan refers to the occurrence of the Effective Date. See Article VIII.C of this Disclosure Statement, titled “Conditions Precedent to Confirmation and Consummation of the Plan,” for a discussion of conditions precedent to Confirmation and Consummation of the Plan.

What are the sources of Cash and other consideration required to fund the Plan?

The Debtors and Reorganized Debtors, as applicable, shall fund Plan Distributions and satisfy applicable Allowed Claims and Allowed Interests under the Plan with New Preferred Stock, New Common Stock and proceeds from the Direct Investment Preferred Equity Raise, of which not more than approximately $18,600,000 is projected to be applied towards funding the Plan Distributions.

Is there potential litigation related to the Plan?

Parties in interest may object to the approval of this Disclosure Statement and may object to Confirmation of the Plan, which objections potentially could give rise to litigation.

How will the preservation of the Causes of Action impact my recovery under the Plan?

The Plan provides for the retention of all Causes of Action other than those that are expressly waived, relinquished, exculpated, released, compromised, or settled.

In accordance with section 1123(b) of the Bankruptcy Code, but subject to Article VIII of the Plan, each Reorganized Debtor, as applicable, shall retain and may enforce all rights to commence and pursue, as appropriate, any and all Causes of Action of the Debtors (other than Avoidance Actions with respect to Released Parties), whether arising before or after the Petition Date, including any actions specifically enumerated in the Schedule of Retained Causes of Action, and the Reorganized Debtors’ rights to commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date, other than Avoidance Actions with respect to Released Parties and Causes of Action settled or resolved by the Debtors prior to the Effective Date with the consent of the Plan Sponsor or released by the Debtors pursuant to the releases and exculpations contained in the Plan, including in Article VIII thereof, which shall be deemed released and waived by the Debtors and the Reorganized Debtors as of the Effective Date.

The Reorganized Debtors may pursue such retained Causes of Action, as appropriate, in accordance with the best interests of the Reorganized Debtors. No Entity (other than the Released Parties) may rely on the absence of a specific reference in the Plan, the Plan Supplement, or the Disclosure Statement to any Cause of Action against it as any indication that the Debtors or the Reorganized Debtors, as applicable, will not pursue any and all available Causes of Action of the Debtors against it, except as otherwise expressly provided in the Plan. The Debtors and the Reorganized Debtors expressly reserve all rights to prosecute any and all Causes of Action against any Entity (other than Avoidance Actions with respect to Released Parties), except as otherwise expressly provided in the Plan, including Article VIII of the Plan. The Reorganized Debtors may settle any such Cause of Action without any further notice to or action, order, or approval of the Bankruptcy Court. If there is any dispute between the Reorganized Debtors and the Entity against whom the Reorganized Debtors are asserting the Cause of Action regarding the inclusion of any Cause of Action on the Schedule of Retained Causes of Action that remains unresolved for thirty days, such objection shall be resolved by the Bankruptcy Court. Unless any Causes of Action of the Debtors against an Entity are expressly waived, relinquished, exculpated, released, compromised, assigned, transferred or settled in the Plan or a Final Order, the Reorganized Debtors expressly reserve all Causes of Action, for later adjudication, and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable, or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of the Confirmation or Consummation.

The Reorganized Debtors reserve and shall retain such Causes of Action of the Debtors notwithstanding the rejection or repudiation (to the extent applicable) of any Executory Contract or Unexpired Lease during the Chapter 11 Cases or pursuant to the Plan. In accordance with section 1123(b)(3) of the Bankruptcy Code, any Causes of Action that a Debtor may hold against any Entity shall vest in the Reorganized Debtors, except as otherwise expressly provided in the Plan, including Article VIII thereof. The applicable Reorganized Debtors, through their authorized agents or representatives, shall retain and may exclusively enforce any and all such Causes of Action. The Reorganized Debtors shall have the exclusive right, authority, and discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action and to decline to do any of the foregoing without the consent or approval of any third party or further notice to or action, order, or approval of the Bankruptcy Court.

Will there be releases and exculpation granted to parties in interest as part of the Plan?

Yes, the Plan proposes to release the Released Parties and to exculpate the Exculpated Parties. The Debtors’ releases, third-party releases, and exculpation provisions included in the Plan are an integral part of the Debtors’ overall restructuring efforts and were an essential element of the negotiations among the Debtors and the DIP Lenders.

The Released Parties and the Exculpated Parties have made substantial and valuable contributions to the Debtors’ restructuring through efforts to negotiate and implement the Plan, which will maximize and preserve the going-concern value of the Debtors for the benefit of all parties in interest. Accordingly, each of the Released Parties and the Exculpated Parties warrants the benefit of the release and exculpation provisions.

The releases by and among the Holders of Claims or Interests that are Releasing Parties and the Released Parties are appropriate consensual releases. The releases will only be binding with respect to (a) all Holders of Claims or Interests that vote to accept the Plan; (b) all Holders of Claims or Interests that are entitled to vote on the Plan who vote to reject the Plan and opt in to the releases provided for in Article VIII.D of the Plan by checking the box on the ballot indicating that they opt in to granting such releases in the Plan submitted on or before the Voting Deadline; (c) the DIP Agent and DIP Lenders; (d) to the maximum extent permitted by Law, each current and former Affiliate of each Entity in clause (a) through the following clause (e), solely to the extent the pertinent Entity can bind any such Affiliate to the terms of the Plan under applicable law; and (e) each Related Party of each Entity in clause (a) through this clause (e), solely to the extent the pertinent Entity can bind any such Related Party to the terms of the Plan under applicable law.

Based on the foregoing, the Debtors believe that the releases and exculpations in the Plan are necessary and appropriate and meet the requisite legal standard promulgated by the United States Court of Appeals for the Third Circuit. Moreover, the Debtors will present evidence at the Confirmation Hearing to demonstrate the basis for and propriety of the release and exculpation provisions. The release, exculpation, and injunction provisions that are contained in the Plan are copied in pertinent part below.

Discharge of Claims Against and Terminated Interests in Debtors

Pursuant to section 1141(d) of the Bankruptcy Code to the fullest extent permitted thereunder, and except as otherwise specifically provided in the Plan or the Confirmation Order, the distributions, rights and treatment that are provided in the Plan shall be in full and final satisfaction, settlement, release and discharge, effective as of the Effective Date, of all Claims, Interests and Causes of Action of any nature whatsoever, including any interest accrued on Claims or Interests from and after the Petition Date, whether known or unknown, against, liabilities of, Liens on, obligations of, rights against and Interests in, the Debtors or any of their assets or properties, regardless of whether any property shall have been distributed or retained pursuant to the Plan on account of such Claims and Interests, including Causes of Action that arose before the Effective Date, any contingent or non-contingent liability on account of representations or warranties issued on or before the Effective Date, and all debts of the kind specified in sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, in each case whether or not: (i) a proof of claim or Interest based upon such Claim, debt, right or Interest is filed or deemed filed pursuant to section 501 of the Bankruptcy Code; (ii) a Claim or Interest based upon such Claim, debt, right or Interest is Allowed pursuant to section 502 of the Bankruptcy Code; or (3) the Holder of such a Claim or Interest has accepted the Plan. The Confirmation Order shall be a judicial determination of the discharge of all Claims and Interests subject to the Effective Date occurring, except as otherwise expressly provided in the Plan.

Release of Liens

Except as otherwise provided in the Plan, the Confirmation Order, or in any contract, instrument, release, or other agreement or document created or entered into pursuant to the Plan, on the Effective Date and concurrently with the applicable distributions made pursuant to the Plan, all Liens, pledges, or other security interests against any property of the Debtors and their Estates shall be fully released and discharged, and all of the right, title, and interest of any holder of such Liens, pledges, or other security interests shall revert to the Reorganized Debtors and their successors and assigns. Any Holder of a Secured Claim (and the applicable agents for such Holder) shall be authorized and directed, at the sole cost and expense of the Reorganized Debtors, to release any collateral or other property of any Debtor (including any cash collateral and possessory collateral) held by such Holder (and the applicable agents for such Holder), and to take such actions as may be reasonably requested by the Reorganized Debtors to evidence the release of such Liens and/or security interests, including the execution, delivery, and filing or recording of such releases. The presentation or filing of the Confirmation Order to or with any federal, state, provincial, or local agency, records office, or department shall constitute good and sufficient evidence of, but shall not be required to effect, the termination of such Liens.

To the extent that any Holder of a Secured Claim that has been satisfied or discharged in full pursuant to the Plan, or any agent for such Holder, has filed or recorded publicly any Liens and/or security interests to secure such Holder’s Secured Claim, then as soon as practicable on or after the Effective Date, such Holder (or the agent for such Holder) shall take any and all steps requested by the Debtors or the Reorganized Debtors that are necessary or desirable to record or effectuate the cancelation and/or extinguishment of such Liens and/or security interests, including the making of any applicable filings or recordings, and the Reorganized Debtors shall be entitled to make any such filings or recordings on such Holder’s behalf.

Releases by the Debtors

Notwithstanding anything contained in the Plan to the contrary, pursuant to section 1123(b) of the Bankruptcy Code, in exchange for good and valuable consideration, the adequacy of which is hereby confirmed, on and after the Effective Date, each Released Party is deemed to hereby conclusively, absolutely, unconditionally, irrevocably and forever be released by the Debtors, the Reorganized Debtors, and their Estates, in each case on behalf of themselves and their respective successors, assigns or assignees, and representatives, any and all other Persons that may purport to assert any Claim or Cause of Action directly or derivatively, by, through, for, or because of the foregoing Persons, from any and all claims, obligations, suits, judgments, damages, demands, debts, rights, remedies, actions, and Causes of Action, whether known or unknown, liquidated or unliquidated, fixed or contingent, matured or unmatured, foreseen or unforeseen, accrued or unaccrued, existing or hereinafter arising, whether in law or in equity, whether sounding in tort or contract, whether arising under federal or state statutory or common law, or any other applicable international, foreign or domestic law, rule, statute, regulation, treaty, right, duty, requirements or otherwise, including any derivative claims, asserted or assertable on behalf of the Debtors, that the Debtors, the Reorganized Debtors, or their Estates, including any successors to or assigns of the Debtors or any Estate’s representative appointed or selected pursuant to section 1123(b) of the Bankruptcy Code, would have been legally entitled to assert in their own right (whether individually or collectively),derivatively, or on behalf of the Holder of any Claim against, or Interest in, a Debtor, or that any Holder of any Claim against or Interest in a Debtor or other Entity could have asserted on behalf of the Debtors, based on or relating to or in any manner arising from, in whole or in part, the Debtors (including the management, ownership, or operation thereof or otherwise), the purchase, sale or rescission of any security of the Debtors, the business or contractual arrangements between any Debtor and any other entity, the Debtors’ in- or out-of-court restructuring efforts, any Avoidance Actions, intercompany transactions, the Chapter 11 Cases, the formulation, preparation, dissemination, solicitation, negotiation, entry into, or filing of the Disclosure Statement, the Plan, the Plan Supplement, the DIP Facility, the New Preferred Stock, the New Common Stock, or any Restructuring Transaction, contract, instrument, release, or other agreement or document created or entered into in connection with the Disclosure Statement, the Plan, the Plan Supplement, the Prepetition Plan Sponsor Loan, the DIP Facility or DIP Facility Documents, the Direct Investment Documents, the New Preferred Stock, the New Common Stock, the Chapter 11 Cases, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance or distribution of securities pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, or upon any other act or omission, transaction, agreement, event, or other occurrence related or relating to any of the foregoing taking place on or before the Effective Date.

Notwithstanding anything to the contrary in the foregoing, the releases set forth above do not release: claims or liabilities arising from any act or omission of a Released Party that constitutes fraud, willful misconduct, or gross negligence each solely to the extent as determined by a Final Order of a court of competent jurisdiction; (2) any obligations arising on or after the Effective Date of any party or Entity under the Plan, the Confirmation Order, or any post-Effective Date transaction contemplated by the Restructuring Transactions or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan or the Restructuring Transactions; (3) the rights of any Holder of Allowed Claims to receive distributions under the Plan; (4) any matters retained by the Debtors and the Reorganized Debtors pursuant to the Schedule of Retained Causes of Action; or (5) any holder of an Administrative Claim, Other Priority Claim, Other Secured Claim, from any obligations it owes to the Debtors in the ordinary course of business or under any existing contracts.

Releases by the Releasing Parties

As of the Effective Date, each Releasing Party is deemed conclusively, absolutely, unconditionally, irrevocably and forever to have released each Released Party from any and all claims, obligations, suits, judgments, damages, demands, debts, rights, remedies, actions, and Causes of Action, whether known or unknown, liquidated or unliquidated, fixed or contingent, matured or unmatured, foreseen or unforeseen, accrued or unaccrued, existing or hereinafter arising, whether in law or in equity, whether sounding in tort or contract, whether arising under federal or state statutory or common law, or any other applicable international, foreign or domestic law, rule, statute, regulation, treaty, right, duty, requirements or otherwise including any derivative claims, asserted on behalf of the Debtors or the Estates, that such Entity would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of anyone claiming by or through the Releasing Parties, based on or relating to or in any manner arising from, in whole or in part, the Debtors (including the management, ownership, or operation thereof or otherwise), the purchase, sale or rescission of any security of the Debtors, the business or contractual arrangements between any Debtor and any other entity, the Debtors’ in- or out-of-court restructuring efforts, any Avoidance Actions, intercompany transactions, the Chapter 11 Cases, the formulation, preparation, dissemination, solicitation, negotiation, entry into, or filing of the Disclosure Statement, the Plan, the Plan Supplement, the Prepetition Plan Sponsor Loan, the DIP Facility or DIP Facility Documents, the Direct Investment Documents, the New Preferred Stock, the New Common Stock, or any Restructuring Transaction, contract, instrument, release, or other agreement or document created or entered into in connection with the Disclosure Statement, the Plan, the Plan Supplement, the DIP Facility, the New Preferred Stock, the New Common Stock, the Chapter 11 Cases, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance or distribution of securities pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, or upon any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date.

Notwithstanding anything to the contrary in the foregoing, the Third-Party Release does not release: (1) claims or liabilities arising from any act or omission of a Released Party that constitutes fraud, willful misconduct, or gross negligence each solely to the extent as determined by a Final Order of a court of competent jurisdiction; (2) any obligations arising on or after the Effective Date of any party or Entity under the Plan, the Confirmation Order, or any post-Effective Date transaction contemplated by the Restructuring Transactions or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan or the Restructuring Transactions; or (3) the rights of any Holder of Allowed Claims to receive distributions under the Plan.

Exculpation

Except as otherwise specifically provided in the Plan, no Exculpated Party shall have or incur any liability for, and each Exculpated Party shall be exculpated from any Cause of Action for any claim related to any act or omission occurring between the Petition Date and the Effective Date in connection with, relating to or arising out of (i) the management, ownership or operation of the Debtors, (ii) the business or contractual arrangements between any Debtor and any other entity, (iii) the Chapter 11 Cases, and (iv) any other act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date, including the formulation, preparation, dissemination, negotiation, or filing of the Disclosure Statement, the Plan, the DIP Facility, the New Preferred Stock, the New Common Stock, or any Restructuring Transaction, contract, instrument, release or other agreement or document created or entered into in connection with the Disclosure Statement, the Plan, the DIP Facility, the New Preferred Stock, the New Common Stock, or the Plan, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including the issuance of securities pursuant to the Plan, or the distribution of property under the Plan or any other related agreement, except for claims related to any act or omission that is determined in a Final Order to have constituted gross willful misconduct or actual fraud. Notwithstanding anything to the contrary in the foregoing, the exculpation set forth above does not exculpate any obligations arising on or after the Effective Date of any Person or Entity under the Plan, any post-Effective Date transaction contemplated by the Restructuring Transactions, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan. The Exculpated Parties have, and upon completion of the Plan shall be deemed to have, participated in good faith and in compliance with the applicable laws with regard to the solicitation of votes and distribution of consideration pursuant to the Plan and, therefore, are not, and on account of such distributions shall not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan. The exculpation will be in addition to, and not in limitation of, all other releases, indemnities, exculpations and any other applicable law or rules protecting such Exculpated Parties from liability.

Injunction

Effective as of the Effective Date, all Entities that have held, hold, or may hold claims, obligations, suits, judgments, damages, demands, debts, rights, remedies, actions, or Causes of Actions that have been released, discharged, or exculpated under the Plan or Confirmation Order are permanently enjoined, from and after the Effective Date, from taking any of the following actions against, as applicable, the Debtors, the Reorganized Debtors, the Exculpated Parties, or the any of the Released Parties (collectively, the “Enjoined Matters”): (1) commencing or continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any such Enjoined Matters; (2) enforcing, attaching, collecting, or recovering by any manner or means any judgment, award, decree, or order against such Entities on account of or in connection with or with respect to any such Enjoined Matters; (3) creating, perfecting, or enforcing any Lien encumbrance of any kind against such Entities or the property or the estates of such Entities on account of or in connection with or with respect to any such Enjoined Matters; (4) asserting any right of setoff, subrogation or recoupment of any kind against any obligation due from such Entities or against the property of such Entities on account of or in connection with or with respect to any such Enjoined Matters unless such Holder has filed a motion requesting the right to perform such setoff on or before the Confirmation Date or has filed a Proof of Claim or proof of Interest indicating that such Holder asserts, has, or intends to preserve any right of setoff pursuant to applicable law or otherwise; and (5) commencing or continuing in any manner any action or other proceeding of any kind on account of or in connection with or with respect to any such Enjoined Matters. Notwithstanding anything to the contrary in the foregoing, the injunction set forth above does not enjoin the enforcement of any obligations arising on or after the Effective Date of any Person or Entity under the Plan, any post-Effective Date transaction contemplated by the Restructuring Transactions, or any document, instrument, or agreement (including those set forth in the Plan Supplement) executed to implement the Plan.

Upon entry of the Confirmation Order, all Holders of Claims and Interests and their respective current and former employees, agents, officers, directors, managers, principals, and direct and indirect Affiliates, in their capacities as such, shall be enjoined from taking any actions to interfere with the implementation or Consummation of the Plan.

When is the deadline to vote on the Plan?

The Voting Deadline is January 8, 2024, at 4:00 p.m. (Eastern Standard Time).

How do I vote on the Plan?

Detailed instructions regarding how to vote on the Plan are contained on the ballot distributed to holders of Claims that are entitled to vote on the Plan (the “Ballot”). For your vote to be counted, the Ballot containing your vote must be properly completed, executed, and delivered as directed so that it is actually received by the Debtors’ claims, noticing, and solicitation agent, Kroll Restructuring Administration (the “Notice and Claims Agent”) on or before the Voting Deadline, i.e. January 8, 2024, at 4:00 p.m., Eastern Standard Time. If a Ballot is received after the Voting Deadline, it will not be counted unless the Debtors determine otherwise. See Article X of this Disclosure Statement, entitled “Solicitation and Voting Procedures,” for additional information.

Why is the Bankruptcy Court holding a Confirmation Hearing?

Section 1128(a) of the Bankruptcy Code requires the Bankruptcy Court to hold a hearing on confirmation of the Plan and recognizes that any party in interest may object to Confirmation of the Plan. Shortly after the commencement of the Chapter 11 Cases, the Debtors will request that the Bankruptcy Court schedule the Confirmation Hearing. All parties in interest will be served notice of the time, date, and location of the Confirmation Hearing once scheduled.

When is the Confirmation Hearing set to occur?

The Debtors intend to request that the Bankruptcy Court schedule the Confirmation Hearing for February 2, 2024, or as such time determined by the Bankruptcy Court. The Confirmation Hearing may be adjourned from time to time without further notice.

The Debtors intend to request that objections to Confirmation must be filed and served on the Debtors, and certain other parties, by no later than January 30, 2024, at 4:00 p.m. (Eastern Standard Time), or such other time determined by the Bankruptcy Court.

What is the purpose of the Confirmation Hearing?

The confirmation of a plan of reorganization by a bankruptcy court binds the debtor, any issuer of securities under a plan of reorganization, any person acquiring property under a plan of reorganization, any creditor or equity interest holder of a debtor, and any other person or entity as may be ordered by the bankruptcy court in accordance with the applicable provisions of the Bankruptcy Code. Subject to certain limited exceptions, the order issued by the bankruptcy court confirming a plan of reorganization discharges a debtor from any debt that arose before the confirmation of such plan of reorganization and provides for the treatment of such debt in accordance with the terms of the confirmed plan of reorganization.

What is the effect of the Plan on the Debtors’ ongoing businesses?

The Debtors are reorganizing under chapter 11 of the Bankruptcy Code. As a result, the occurrence of the Effective Date means that the Debtors will not be liquidated or forced to go out of business. Following Confirmation, the Plan will be consummated on the Effective Date, which is a date that is the first Business Day after the Confirmation Date on which (1) no stay of the Confirmation Order is in effect and (2) all conditions to Consummation have been satisfied or waived (see Article IX of the Plan). On or after the Effective Date, and unless otherwise provided in the Plan, the Reorganized Debtors may operate their businesses and, except as otherwise provided by the Plan, may use, acquire, or dispose of property and compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules. Additionally, upon the Effective Date, all actions contemplated by the Plan will be deemed authorized and approved.

Who do I contact if I have additional questions with respect to this Disclosure Statement or the Plan?

If you have any questions regarding this Disclosure Statement or the Plan, please contact the Debtors’ Notice and Claims Agent, Kroll Restructuring Administration, via one of the following methods:

By regular mail, hand delivery or overnight mail at:
PARTS iD Ballot Processing
c/o Kroll Restructuring Administration
850 Third Avenue, Suite 412
Brooklyn, NY 11232

By electronic mail at:
partsidballots@ra.kroll.com

By telephone (toll free) at:
(844) 610-4783 (domestic, toll-free) or +1 (646) 777-2312 (local/international, toll) and request to speak with a member of the Solicitation Team.

Copies of the Plan, this Disclosure Statement, and any other publicly filed documents in the Chapter 11 Cases are available upon written request to the Notice and Claims Agent at the address above or by downloading the documents from the Debtors’ restructuring website at https://restructuring.ra.partsid.com/partsidballots (free of charge) or, upon the filing of the Chapter 11 Cases, via PACER at https://www.pacer.gov (for a fee).

Do the Debtors recommend voting in favor of the Plan?

Yes. The Debtors believe that the Plan provides for a larger recovery to the Debtors’ stakeholders than would otherwise result from any other available alternative. The Debtors believe that the Plan enables them to emerge from chapter 11 expeditiously, is in the best interest of the Debtors’ stakeholders, and that any other alternatives (to the extent they exist) fail to realize or recognize the value inherent under the Plan.

Who Supports the Plan?

Classes 3, 4, 5, 7 and 8 are entitled to vote to accept or reject the Plan. All holders of Claims in Classes 3, 4, and 5 have entered into agreements to support and vote to accept the Plan. Further, the Plan provides holders of Claims in Classes 7 and 8 the treatment that was provided under the Vendor RSA, which received the support of more than 80% of the aggregate principal amount of the Debtors’ unsecured Vendor debt. Accordingly, the Debtors anticipate that the holders of Claims in all voting classes will overwhelmingly vote to support and accept the Plan.

IV.

THE DEBTORS’ CORPORATE HISTORY, STRUCTURE, AND BUSINESS OVERVIEW

The Company’s History and Business Operations

Overview of Company’s History

The Debtors are a technology-driven, digital commerce company specializing in the U.S. automotive aftermarket and the adjacent complex parts markets. The Debtors provide customers with a differentiated customer experience with advanced product search capabilities, proprietary product options, exclusive shop by service type functionality, easy product discovery, rich custom content, an exhaustive product catalog and competitive prices.

The Debtors deliver this customer experience using a purpose-built technology platform with more than fourteen billion product and fitment data points powered with machine learning, and a comprehensive product catalog spanning approximately eighteen million parts and accessories, when fully available, from over one thousand suppliers that partner with the Company across eight verticals.

The SPAC Merger

Onyx Enterprises International, Inc. (“Onyx”) was founded in 2008 as an online retailer in the automotive parts and accessories space. Its principal place of business was in Cranbury, New Jersey. The business grew in revenue to more than $250 million in net revenue by 2019. In addition to its New Jersey based employees, Onyx relied upon independent contractors in Ukraine, Costa Rica and the Philippines to provide development, programming, back office, sales and customer service support.

On or about March 15, 2016, Legacy Acquisition Corp. (“Legacy”) was incorporated in Delaware for the purpose of completing an initial public offering and, thereafter, effecting a business combination. On November 21, 2017, the Company completed its initial public offering. Until 2020, the Company had not commenced any operations.

On November 20, 2020, the Company consummated the business combination pursuant to that certain Business Combination Agreement, dated September 18, 2020 (the “Business Combination Agreement”), by and among Legacy, Excel Merger Sub I, Inc., a Delaware corporation and an indirect wholly owned subsidiary of the Company and directly owned subsidiary of Merger Sub 2
(“Merger Sub 1”), Excel Merger Sub II, LLC, a Delaware limited liability company and direct wholly owned subsidiary of the Company (“Merger Sub 2”), Onyx, and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity as the stockholder representative.

At the closing of the transactions contemplated by the Business Combination Agreement,
(a) Merger Sub 1 merged with and into Onyx (the “First Merger”), with Onyx surviving as a direct wholly owned subsidiary of Merger Sub 2, and (b) promptly following the First Merger, Onyx, as the surviving company of the First Merger, merged with and into Merger Sub 2 (the “Second Merger”). Upon the consummation of the Second Merger, Merger Sub 2 was the surviving company and Onyx ceased to exist, and Merger Sub 2 became a direct, wholly owned subsidiary of the Company. Thereafter, Legacy changed its name to PARTS iD, Inc. and listed its shares of Class A common stock, par value $0.0001 per share on the NYSE American LLC (the “NYSE American”) under the symbol “ID” and (ii) Merger Sub 2 changed its name to PARTS iD, LLC.

The Company’s Business Strategy

Digital Commerce Platform

The Debtors’ digital commerce platform was developed in-house from inception as a solution for industries with data limitations and parts fitment complexities. A core differentiator of the Debtors’ digital commerce platform is its purpose-built and proprietary data catalog developed over more than a decade by collecting, analyzing and refining data regarding original equipment manufacturer, or OEM, vehicles and aftermarket products and customer feedback to define a universe of accurate Year-Make-Model (“YMM”) values.

The Debtors’ in-house data catalog houses over 14 billion data points for automobiles and the Debtors’ other seven verticals. This data catalog is designed to tie vehicles with parts that fit their specific YMM including the variations of sub-model, engine size, transmission type and drivetrain type, as well as to recommend complementary products, such as tools required to install purchased parts and accessories. To build its catalog, the Debtors aggregate data from multiple sources, cross-pollinate this data to address gaps in data sets, enrich the catalog using its proprietary internal data, and apply artificial intelligence to make further improvements. Through this process, the Debtors’ data catalog can: (i) determine the exact parts fitment for a product by its parameters, even if certain fitment details are originally missing in manufacturers’ data feeds; and (ii) rapidly incorporate new SKUs as they become available. Because the data catalog is continually expanding with each customer interaction, the Debtors can offer better purchase recommendations, increase up-sell opportunities, improve the efficiency of its fulfillment operations, and lower errors and mistakes in orders.

Product Vendors

The Debtors provide product vendors with access to their large customer base and e-commerce market. At various times, over 1,000 product vendors have leveraged the Debtors’ technology, enhanced fitment data, deep understanding of the market and large customer database to sell and position their product catalog instantly. Product vendors also benefit from the Debtors’ engaging shopping experience, advanced 3D imagery, in-depth product description, reviews, installation guides and other tailored content offered by the Debtors’ platform, complemented by specialized customer service.

Fulfillment Operations

The Debtors’ virtual, proprietary, and capital-efficient fulfillment model manages its sales volume while carrying minimal inventory, which is primarily associated with its private label products. The Debtors’ platform, which incorporates live or frequently updated inventory feeds from product vendors, provides stock-on-hand for up to 18 million products across over 5,000 active brands. The Debtors’ fulfillment model decides which product vendor to source from while the sale is made based on a proprietary algorithm, which incorporates factors such as availability of inventory, customer proximity, shipping cost and profitability. This decentralized, data-driven approach allows the Debtors to increase delivery speed through more than 2,500 shipping points from its U.S. vendor network.

Products

The Debtors primarily sell automotive parts and accessories, including a wide range of goods from automobile accessories, wheels and tires, performance parts, lighting, and repair parts. In addition, the Debtors launched seven new verticals in August 2018 and in 2022 the value of the orders received from these verticals was approximately 9.0% of total order value. These seven verticals offer parts and accessories for semi-trucks, motorcycles, powersports (including ATVs, snowmobiles, and personal watercraft), RVs/campers, boats, recreation (including outdoor sports and camping gear) and tools using the same proprietary platform.

The Debtors primarily source products from industry leading brands and product vendors located in the U.S., except that its private label products are largely sourced from foreign product vendors. Regarding sales of products sourced from product vendors, no single product vendor accounted for more than 10% of the Debtors’ total revenue for the year ended December 31, 2022. The Debtors’ inventory on hand, which largely relates to private label products, was approximately $1.5 million as of December 31, 2022 and $1.7 million in value as of December 31, 2021. As of December 31, 2022 and 2021, the sale value of customers’ unshipped and undelivered orders were $3.1 million and $15.5 million, respectively.

Private Label Product. The Debtors’ private label business uses proprietary data to identify, import and sell higher margin products that are in demand on its platform. Management believes that by selecting and pairing a superior import product with its purpose-built and proprietary data catalog, consumers are provided the option to purchase a high-quality product at a reasonable cost. Private label revenue was less than 10% of total revenue for the year ended December 31, 2022.

Branded Product. The Debtors have developed and implemented application-programming interfaces with the majority of its drop-ship product vendors that allow the Debtors to electronically transmit orders, check inventory availability, and receive the shipment tracking information and share it with customers. These processes allow the Debtors to offer over 5,000 brands on an inventory-free basis, thereby reducing carrying costs and improving margins.

The Debtors’ Management and Workforce

Management

The Company’s board of directors (the “Board of Directors”) has all such powers and does all such acts and things as may be exercised or done by the Company, subject, to the provisions of the General Corporation Law of the State of Delaware and the Company’s certificate of incorporation and bylaws. Among other things, the Board of Directors oversees the Debtors’ management, reviews its long-term strategic planning, conducts board meetings, and exercises decision-making authority in key areas.

The following individuals are members of the Company’s Board of Directors: (i) Lev Peker, (ii) Edwin J. Rigaud, (iii) Rahul Petkar, (iv) Darryl T.F. McCall, (v) Aditya Jha, and (vi) Prashant Pathak.

The Plan provides for the appointment of the New Board of the reorganized Company after the Effective Date, the composition of which shall be identified by the Plan Sponsor and set forth in the Plan Supplement.

Workforce

As of the Petition Date, the Debtors employ approximately 11 full time, hourly employees and 25 full time, salaried employees. The employees operate primarily from the Debtors’ headquarters in Cranbury, New Jersey. PARTS iD, LLC employs and compensates all of the employees. In addition to the employees, the Debtors supplement their workforce with various contractors from Ukraine, Costa Rica and the Philippines to perform various roles related to sales, marketing, and developing information technology systems. The Debtors retain approximately 231 independent contractors.

Litigation

IDParts Litigation

In June, 2020, the Company’s predecessor Onyx initiated a trademark infringement action against IDParts, LLC (“IDParts”) for the unlawful use of “ID” to sell automotive products through its e-commerce platform found at www.idparts.com. The Company first used “iD” to sell automotive products in 2009 on its e-commerce platform www.carid.com. The Civil Action is captioned as Onyx Enterprises Int’l, Corp. v. IDParts, LLC, Civil Action Number 1:20-cv-11253-RMZ and is currently pending before the United States District Court for the District of Massachusetts (the “IDParts Litigation”). The Company is seeking monetary damages for use of its trademark as well as an order precluding IDParts from continuing to use “ID” as part of its branding and IDParts is seeking similar relief through its counterclaims. Discovery has been completed and a final pretrial conference was held in January 2023.

Volkswagen Litigation

Onyx initiated a trademark infringement action in August, 2020 against Volkswagen Group of America, Inc. (“Volkswagen”) for the unlawful use of “ID” to brand its line of electric vehicles imported into the United States in 2021 and manufactured in Tennessee in 2022. Despite the United States Patent and Trademark Office’s rejection of Volkswagen’s application to register “ID” due to the Company’s priority over the mark in the automotive space, Volkswagen proceeded with the launch using this branding and the Company filed suit. The Civil Action is captioned as Onyx Enterprises Int’l, Corp v. Volkswagen Group of America, Inc., Civil Action Number 3:20-cv-09976-BRM-ZNQ and is pending in the United States District Court for the District of New Jersey (the “Volkswagen Litigation”). The Volkswagen Litigation is currently stayed pending resolution of the IDParts Litigation.

The Company is seeking monetary damages for use of its trademark as well as an order precluding Volkswagen from continuing to use ID as part of its branding. Discovery has not commenced and the case value and exposure are undetermined at this time. The parties have engaged in settlement discussions but remain far apart in their evaluation of the merits of the case.

The Debtors’ Prepetition Capital Structure

Authorized and Outstanding Stock

The Company’s Certificate of Incorporation authorizes the issuance of 111,000,000 shares of capital stock, $0.0001 par value per share, consisting of (a) 110,000,000 shares of common stock, including 100,000,000 shares of Class A common stock and 10,000,000 shares of Class F common stock, and (b) 1,000,000 shares of preferred stock. As of November 27, 2023, the Company had 42,932,553 shares of Class A common stock outstanding and no shares of Class F common stock or preferred stock outstanding.

On May 23, 2023, the Company received a letter from the NYSE American stating that the Company was not in compliance with Sections 1003(a)(i) and 1003(a)(ii), respectively, of the NYSE American Company Guide. Sections 1003(a)(i) and 1003(a)(ii) of the Company Guide require an issuer to have (a) shareholders’ equity of $2.0 million or more if it has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years, and (b) shareholders’ equity of $4.0 million or more if it has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years, respectively. On June 22, 2023, the Company submitted a plan of compliance (the “Compliance Plan”) to the NYSE American addressing how the Company intends to regain compliance with these requirements by November 23, 2024.

On August 8, 2023, the Company received a letter from the NYSE American notifying the Company that the Compliance Plan was accepted. The NYSE American granted the Company a period through November 23, 2024 to regain compliance with the applicable continued listing standards.

On October 27, 2023, the Company received written notice (the “Notice”) from the NYSE American indicating that the Company was not in compliance with the continued listing standard set forth in Section 1003(f)(v) of the NYSE American Company Guide (“Section 1003(f)(v)”) because the shares of the Company’s Class A common stock had been selling for a substantial period of time at a low price per share. The Notice had no immediate effect on the listing or trading of the Company’s Class A common stock and its Class A common stock continued to trade on the NYSE American under the symbol “ID” with the designation of “.BC” to indicate that the Company is not in compliance with the NYSE American’s continued listing standards. The Company’s receipt of the Notice did not affect the Company’s business, operations or reporting requirements with the Securities and Exchange Commission.

Prepetition Senior Secured Debt Obligations

Lind Securities Purchase Agreement

On July 14, 2023, the Company entered into a Securities Purchase Agreement (the “Lind Purchase Agreement”) with Lind Global Fund II LP (“Lind”). The Lind Purchase Agreement provided for loans in an aggregate principal amount of up to $10 million under various tranches (the “Lind Financing”). As of the date hereof, Lind has funded an aggregate principal amount of $4,750,000 in consideration for (A) a senior secured convertible promissory note in the aggregate principal amount of $5,367,500 (the “Lind Note”) and (B) 12,837,838 warrants to purchase the Company’s Class A common stock at an exercise price of $0.50 per share (subject to certain adjustments) (the “Lind Warrant”). The Lind Warrant will expire after 5 years from the date of issuance and may be exercised on a cashless basis.

The Lind Note does not bear any interest and matures on July 14, 2024. As of November 3, 2023, Lind converted an aggregate principal amount of $1,143,000 of the Lind Note into 7,691,023 shares of the Company’s Class A common stock.

On July 14, 2023, in consideration for its services in respect of the Lind Financing described above, the Company also issued to Titan Partners Group LLC, a division of American Partners, LLC, as placement agent, warrants to purchase 536,570 shares of the Company’s Class A common stock at an exercise price per share of $0.625.

As collateral for the obligations under the Lind Purchase Agreement, the Company granted to Lind a senior security interest in all of Company’s right, title, and interest in, to and under all of Company’s property, subject to certain exceptions. The obligations under the Lind Purchase Agreement are guaranteed by PARTS iD, LLC.

Prepetition Plan Sponsor Financing

On December 19, 2023, the Plan Sponsor made available a prepetition term loan facility (the “Prepetition Plan Sponsor Financing”) in an aggregate amount up to $3,000,000, pursuant to that certain Credit Agreement, dated December 19, 2023, by and among, the Plan Sponsor, as new bridge lender and as administrative agent (the “Administrative Agent”), and the Debtors, as borrowers (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”, and together with all documents, agreements and instruments delivered in connection with the Credit Agreement, including the Pledge and Security Agreement (as defined below) the “Credit Documents”).

The Prepetition Plan Sponsor Financing is secured pursuant to that certain Pledge and Security Agreement, dated December 19, 2023, by and among the Debtors as grantors, and the Administrative Agent (the “Pledge and Security Agreement” and with all amendments, amendments and restatements, supplements, and modifications thereto) and will be rolled up on a dollar-for-dollar basis pursuant to the Credit Documents and DIP Orders.

Litigation Funding Agreement

On September 29, 2023, the Company and its subsidiary, PARTS iD, LLC, entered into a Litigation Funding Agreement (the “Funding Agreement”) with Pravati Capital, LLC (the “Funder”) for the purpose of funding the IDParts Litigation and the Volkswagen Litigation (collectively, the “Litigation”).

Under the terms of the Funding Agreement, the Funder agreed to pay up to an aggregate amount of $1,500,000 to fund reasonable legal fees, court costs, and other expenses incurred by the Company in connection with the Litigation.

The Company agreed to pay the Funder from proceeds of the Litigation in an amount equal to the funding amount plus the greater of either a multiple of fees and costs related to such funding or a percentage-based amount based on the outstanding daily balance of such funding, compounded monthly, to the extent accrued and unpaid. Additionally, the Company agreed to pay the Funder (i) an underwriting fee of $50,000, (ii) a funding origination fee equal to 3% of each funded amount and (iii) a service fee of $1,500 on the first day of each calendar quarter beginning on October 15, 2023. As collateral for the funding, the Company granted to the Funder a first-priority security interest in and to all proceeds recovered from the Litigation.

Subject to the terms and conditions of the Funding Agreement, the Company will not owe Funder any repayment of the fundings advanced under the Funding Agreement if there is no recovery by the Company in the Litigation and the Company is not in default under the Funding Agreement.

Prepetition Junior Secured Debt Obligations

March Convertible Notes and Warrants

On March 6, 2023, the Company entered into a Note and Warrant Purchase Agreement (the “March Purchase Agreement”) whereby the Company agreed to issue and sell to certain investors, in a private placement, (i) an aggregate principal amount of up to $10 million in junior secured convertible promissory notes (the “March Convertible Notes”) and (ii) an aggregate of up to two million warrants to purchase the Company’s common stock at an exercise price of $0.50 per share (the “March Warrants”), in one or more closings pursuant to the terms of the March Purchase Agreement. All of the disinterested directors of the Company’s Board of Directors, as well as the disinterested directors of the Audit Committee, reviewed and approved the terms of the March Purchase Agreement, March Convertible Notes and March Warrants. Pursuant to the March Purchase Agreement, the Company issued and sold (i) an aggregate principal amount of $2,900,000 of March Convertible Notes and (ii) an aggregate of 580,000 March Warrants, of which $2,650,000 of March Convertible Notes and 530,000 March Warrants were purchased by entities affiliated with certain directors, officers and beneficial owners of the Company. The March Warrants will expire after 5 years from the date of issuance and may not be exercised on a cashless basis. The March Convertible Notes accrue interest at 7.75% per annum, compounded semi-annually and such interest may be paid at the option of the Company either in cash or common stock.

The March Convertible Notes are secured by a junior security interest in the Company’s right, title and interest in and to all of the assets of the Company, and are strictly subordinated to the (i) senior secured indebtedness incurred or owed by the Company pursuant to that certain Loan and Security Agreement, dated as of October 21, 2022, by and among the Company, its subsidiary PARTS iD, LLC, and JGB Collateral, LLC, a Delaware limited liability company, in its capacity as collateral agent and the several financial institutions or entities that from time to time become parties thereto, as amended by that certain Amendment to Loan and Security Agreement, dated as of February 22, 2023 (the “JGB Loan Agreement”); and (ii) the indebtedness represented by the Litigation Funding Agreement. The Company repaid in full the indebtedness owed pursuant of the JGB Loan Agreement using the proceeds from the Lind Purchase Agreement in July 2023.

July Convertible Notes and Warrants

On July 13, 2023, the Company entered into a Note and Warrant Purchase Agreement (the “July Purchase Agreement”) whereby the Company agreed to issue and sell to certain investors affiliated with certain directors, officers and beneficial owners of the Company, in a private, (i) an aggregate principal amount of up to $3.25 million in junior secured convertible promissory notes (the “July Convertible Notes”) and (ii) an aggregate of up to 7,738,094 warrants to purchase the Company’s Class A common stock at an exercise price of $0.42 per share (subject to certain adjustments) (the “July Warrants”). All of the disinterested directors of the Company’s Board of Directors, as well as the disinterested directors of the Audit Committee, reviewed and approved the terms of the July Purchase Agreement, July Convertible Notes and July Warrants. The July Warrants will expire after 5 years from the date of issuance and certain of the July Warrants may be exercised on a cashless basis. Certain of the July Convertible Notes accrue interest at 7.75% per annum, compounded semi-annually.

The July Convertible Notes are strictly subordinated to the Lind Purchase Agreement and are secured by a junior security interest in all of the Company’s right, title, and interest in and to all of the Company’s assets, excluding any potential proceeds from the Litigation.

October Convertible Note

On October 9, 2023, the Company entered into a Note Purchase Agreement (the “October Purchase Agreement”) whereby the Company agreed to issue and sell to Lev Peker, the Chief Executive Officer and a director of the Company, in a private placement a junior secured convertible promissory note in the aggregate principal amount of $1.1 million (the “October Convertible Note”). All of the disinterested directors of the Company’s Board of Directors, as well as the disinterested directors of the Audit Committee, reviewed and approved the terms of the October Purchase Agreement and the October Convertible Note. The October Convertible Note does not bear any interest and matures on October 9, 2024.

The October Convertible Note is strictly subordinated to the Lind Purchase Agreement and is secured by a junior security interest in all of the Company’s right, title, and interest in and to all of the Company’s assets, excluding any proceeds from the Litigation.

November Note

On November 2, 2023, the Company entered into a Note Purchase Agreement (the “November Purchase Agreement”) whereby the Company agreed to issue and sell to an investor, in a private placement, a junior secured promissory note in the aggregate principal amount of $1,000,000 (the “November Note”). The November Note bears interest at the rate of 7.75% per annum, compounded semi-annually, and matures on November 2, 2024.

The November Note is strictly subordinated to the Company’s obligations under the Funding Agreement and is secured by a junior security interest in any proceeds from the Litigation. The November Note also provides that the Company and the investor intended for the November Note to be an emergency loan advance to bridge the Company to a possible debtor-in-possession financing facility and for such advance to be included as part of that facility (if and when applicable).

December Note

On December 11, 2023, the Company entered into an Amended and Restated Note Purchase Agreement (the “December Purchase Agreement”) and an amended and restated junior secured promissory note (the “December Note”) with Sanjiv Gomes and Lev Peker, the Company’s Chief Information Officer and Chief Executive Officer, respectively, which amended and restated in its entirety a Note Purchase Agreement and unsecured promissory note entered into between the Company and Sanjiv Gomes on October 20, 2023. Pursuant to the terms of the December Purchase Agreement, the Company issued the December Note to (i) Mr. Gomes in consideration for the $1,000,000 loan provided on October 20, 2023, and (ii) Mr. Peker in consideration for an additional $1,300,000 loan provided to the Company. All of the disinterested directors of the Company’s Board of Directors, as well as the disinterested directors of the Audit Committee, reviewed and approved the terms of the December Purchase Agreement and the December Note.

The total aggregate principal amount of the December Note is $2,300,000. The December Note matures on December 11, 2024. The $1,000,000 principal amount in respect of Mr. Gomes bears interest at the rate of 7.75% per annum, compounded semi-annually and the $1,300,000 principal amount in respect of Mr. Peker does not bear interest.

The December Note is strictly subordinated to the Lind Purchase Agreement and is secured by a junior security interest in all of the Company’s right, title, and interest in and to all of the Company’s assets, excluding the Existing Commercial Tort Claim (as defined in that certain Security Agreement, dated July 14, 2023, by and between the Company and Lind). The Amended Note also provides that the Company, Mr. Gomes and Mr. Peker intend for the loans advanced pursuant to the December Purchase Agreement to be emergency loans to bridge the Company to a possible debtor-in-possession financing facility and for such advances to be included as part of that facility (if and when applicable).

Merchant Cash Advance Agreements

On November 30, 2023, the Company entered into a Purchase and Sale of Future Receivables Agreement (the “Riverside Agreement”) with Riverside Capital NY (“RCNY”). Pursuant to the terms of the Riverside Agreement, the Company agreed to sell, and RCNY agreed to purchase, the Company’s right, title and interest in and to $1,469,700 of the Company’s future receivables, for a purchase price of $1,065,000. Pursuant to the terms of the Riverside Agreement, the Company agreed to pay RCNY $15,400 each day until such time as RCNY has been repaid.

On November 30, 2023, the Company also entered into a Standard Merchant Cash Advance Agreement (the “Wave Agreement”) with WAVE ADVANCE INC (“WAVE”). Pursuant to the terms of the Wave Agreement, the Company agreed to sell, and WAVE agreed to purchase, the Company’s right, title and interest in and to $1,518,000 of the Company’s future receivables, for a purchase price of $1,100,000. Pursuant to the terms of the Wave Agreement, the Company agreed to pay WAVE $15,400 each day until such time as WAVE has been repaid.

The Riverside Agreement and the Wave Agreement each provide for the grant of a junior security interest in the future receivables and other related collateral under the Uniform Commercial Code in accounts and proceeds, subordinated to the indebtedness incurred under the Lind Purchase Agreement. The Riverside Agreement and the Wave Agreement also supersede similar agreements entered into by the Company with both Riverside and Wave in September 2023.

Prepetition Unsecured Debt Obligations

May Convertible Notes and Warrants

On May 19, 2023, the Company entered into a Note and Warrant Purchase Agreement (the “May Purchase Agreement”) whereby the Company agreed to issue and sell to certain investors (the “Purchasers”), in a private placement, (i) unsecured convertible promissory notes (the “May Convertible Notes”) in the aggregate principal amount of $1,000,000 and (ii) an aggregate of 2,083,333 warrants to purchase shares of the Company’s Class A common stock, at an exercise price of $0.48 per share (the “May Warrants”). Lev Peker, the Chief Executive Officer and a director of the Company, purchased an aggregate principal amount of $750,000 of May Convertible Notes and received an aggregate of 1,562,500 May Warrants in this offering. All of the disinterested directors of the Company’s Board of Directors, as well as the disinterested directors of the Audit Committee, reviewed and approved the terms of the May Purchase Agreement, May Convertible Notes and May Warrants. The May Warrants will expire after 5 years from the date of issuance and may not be exercised on a cashless basis.

The May Convertible Notes accrue interest at 7.75% per annum, compounded semi-annually. The May Convertible Notes mature on May 19, 2025.

June Convertible Note and Warrant

On June 14, 2023, the Company entered into a Note and Warrant Purchase Agreement (the “June Purchase Agreement”) whereby the Company agreed to issue and sell to an investor, in a private placement, (i) an unsecured convertible promissory note (the “June Convertible Note”) in the aggregate principal amount of $250,000 and (ii) a warrant to purchase an aggregate of 694,444 shares of the Company’s Class A common stock, at an exercise price of $0.36 per share (the “June Warrant”). The June Warrant will expire after 5 years from the date of issuance and may not be exercised on a cashless basis.

The June Convertible Note accrues interest at 7.75% per annum, compounded semi-annually. The Convertible Note matures on June 14, 2025.

Vendor Restructuring Support Agreement

In an effort to restructure the Company’s outstanding trade debt, certain Vendors formed an ad hoc group (the “Ad Hoc Vendor Committee”) represented by Cole Schotz P.C. to represent them in connection with the potential out of court restructuring of the Company’s Vendor liabilities.

On October 6, 2023, the Company and PARTS iD, LLC entered into the Vendor RSA to restructure the Company’s indebtedness with certain of its trade vendors (the “Consenting Vendors”). A copy of the executed Vendor RSA is attached hereto as Exhibit B.

The terms of the Vendor RSA were, and remain, independent from the Restructuring Transactions contemplated in the Plan and these Chapter 11 Cases. Specifically, pursuant the terms and conditions of the Vendor RSA, the Company agreed to pay to each Consenting Vendor an amount equal to 55% of such total Vendor claim, consisting of (A) an initial payment of 12.5% of such Vendor claim and (B) the remaining 42.5% of such Vendor claim paid monthly over 36 months. The Company further agreed to pay to each holder of a Convenience Claim an amount equal to 65% of such Convenience Claim.

The effective date of the Vendor RSA was conditioned upon the accession of Consenting Vendors holding at least 80% of the aggregate amount of all claims owed to Vendors for past due invoices (the “Total Claims Amount”) within 30 days of the Company’s execution of the Vendor RSA. Despite the Company’s efforts, it did not achieve the requisite support prior to November 6, 2023, but as of the date hereof, Consenting Vendors holding more than 80% of the Total Claims Amount have acceded to the Vendor RSA. However, the operative milestones were not met, meaning that the Consenting Vendors could elect less favorable treatment or terminate their obligations under the terms of the Vendor RSA.

CIRCUMSTANCES LEADING TO THE CHAPTER 11 FILINGS

Market Conditions

As described above, the Company is engaged in the selling of automotive parts through its e-commerce technology platform. Economic conditions have caused fluctuations in business and consumer confidence, which has impacted automotive and consumer spending on automotive parts and accessories. These economic conditions include supply chain challenges, an inflationary environment, overall economic uncertainty, and the potential for economic slowdown or recession, which have impacted consumer confidence and spending. The economic factors had corresponding effects on the Company’s revenue, margins, overall business performance, prospects, solvency, and business decisions.

Further, the Company believes that the decrease in site traffic and the site conversion rate was primarily attributed to lower orders due to product unavailability, supply chain interruptions, reduction in discretionary spending and a significant reduction in advertising spending by the Company due to economic headwinds.

Prepetition Debt Obligations and Liquidity Constraints

Prior to the Petition Date, and as a result of the operational challenges described above, the Company engaged with key vendors to manage its obligations under various purchase orders in order to maintain product availability on its site. These efforts resulted in the Vendor RSA, and the Debtors explored additional financing opportunities. Due to the Company’s declining revenues and stock price, the Company had to issue various types of securities, including the convertible notes and warrants described above, to investors already affiliated with the Company or affiliated with its officers and directors in order to maintain short-term liquidity.

The Company’s Prepetition Restructuring Efforts

In light of the challenges facing the automotive parts market generally, the Company has been engaged in extensive, ongoing restructuring efforts with their lenders for the past several months. To that end, the Company engaged DLA Piper LLP (US) as its restructuring counsel and Arkady Goldinstein of SRV Partners, LLC as interim Chief Financial Officer to pursue and evaluate options to address the Company’s debt and explore strategic alternatives.

As a result of the Debtors’ prepetition restructuring initiatives, following extensive, arm’s-length negotiations, the Debtors and the Plan Sponsor, an unaffiliated third party, reached an agreement-in-principle on the restructuring transactions as reflected in the Plan, including the Debtors’ pre- and postpetition financing arrangements. The Debtors and the Plan Sponsor reached an agreement in principle on the material terms and conditions of restructuring transactions to be implemented either though the Plan (the “Plan Restructuring”) or alternatively, through a sale of substantially all of the Debtors’ assets pursuant to section 363 of the Bankruptcy Code (a “Sale Transaction”). The Plan Restructuring contemplates that the Restructuring Transaction will provide, inter alia, that the Company’s outstanding prepetition secured debt obligations will be repaid, restructured or satisfied, and that the Vendors will receive the treatment contemplated under the Vendor RSA. Upon the Effective Date, the capital structure of the Company will be streamlined and comprise: (i) general unsecured debt payable in the ordinary course of business of the reorganized Company; and (ii) the new equity interests in the reorganized Company issued pursuant to the Plan. In the event that the Debtors fail to meet any of the milestones set forth in the Credit Agreement, satisfy the Direct Investment Commitment Conditions, or obtain the requisite Class 7 votes in favor of the Plan, or upon an event default under the Credit Agreement the Debtors may, at the election of the Plan Sponsor, pursue the Sale Transaction with the Plan Sponsor serving as the stalking horse bidder.

VI.

MATERIAL DEVELOPMENTS AND ANTICIPATED EVENTS OF THE CHAPTER 11 CASES

First Day Relief

On the Petition Date, along with their voluntary petitions for relief under chapter 11 of the Bankruptcy Code (the “Petitions”), the Debtors intend to file several motions (the “First Day Motions”) designed to facilitate the administration of the Chapter 11 Cases, provide necessary postpetition financing to the Debtors, and minimize disruption to the Debtors’ operations, by, among other things, easing the strain on the Debtors’ relationships with employees and certain vendors following the commencement of the Chapter 11 Cases. The First Day Motions, and all orders for relief entered in the Chapter 11 Cases, will be available upon the filing, and can be viewed free of charge, at https://cases.ra.kroll.com/PARTSID.

Among other relief, the First Day Motions will include a motion of the Debtors for authority under Section 364 of the Bankruptcy Code (the “DIP Motion”) to obtain secured debtor-in-possession financing (the “DIP Facility”), consisting of: (A) new money term loans in an aggregate principal amount of up to $12,000,000 (collectively, the “DIP New Money Loans”) and (B) term loans not to exceed the outstanding principal and accrued but unpaid interest (as of the date of the initial DIP Facility draw) owed under the Prepetition Plan Sponsor Financing, the November Note, and the December Note (each as defined below, and collectively, the “DIP Roll-Up Loans” and, together with the DIP New Money Loans, the “DIP Loans”). Proceeds of the DIP Facility will be used in accordance with the Approved Budget (as defined in the DIP Motion), including to fund the administration of these Chapter 11 Cases as well as for working capital and general corporate purposes.

Proposed Confirmation Schedule

The DIP Financing Documents require that the Debtors proceed in accordance with certain milestones, including securing confirmation of the Plan by no later than 11:59 p.m. (EST) forty (40) days following the Petition Date. In light of the Debtors’ extensive prepetition restructuring efforts, the timeline from the anticipated Petition Date to the confirmation hearing provides more than sufficient time to administer these Chapter 11 Cases in a manner that gives all parties in interest a full and fair opportunity to participate in the process. Following commencement of the Chapter 11 Cases, the Debtors will file a scheduling motion seeking approval of the confirmation schedule based on the anticipated Petition Date and below milestones:

Milestone Event	Anticipated Date
Confirmation Milestone	February 2, 2024
Effective Date Milestone	February 16, 2024

VII.

SUMMARY OF THE PLAN

The Plan contemplates the following key terms, among others described herein and therein:

Substantive Consolidation

Except as expressly provided in the Plan, each Debtor shall continue to maintain its separate corporate existence for all purposes other than the treatment of Claims under the Plan and distributions hereunder. On the Effective Date, (i) all Intercompany Claims among the Debtors shall be eliminated and there shall be no distributions on account of such Intercompany Claims; (ii) each Claim Filed or to be Filed against more than one Debtor shall be deemed Filed only against one consolidated Debtor and shall be deemed a single Claim against and a single obligation of the Debtors, and (iii) any joint or several liability of the Debtors shall be deemed one obligation of the Debtors, with each of the foregoing effective retroactive to the Petition Date. Except as otherwise set forth in the Plan, on the Effective Date all Claims based upon guarantees of collection, payment or performance made by one Debtor as to the obligations of another Debtor shall be released and of no further force and effect. Such deemed substantive consolidation shall not (other than for purposes relating to the Plan) affect the legal and corporate structure of the Reorganized Debtors.

In the event the Bankruptcy Court does not approve the deemed substantive consolidation of the Estates for the purposes set forth herein, the Plan shall be treated as a separate plan of reorganization for each Debtor not deemed substantively consolidated.

The Plan shall serve as, and shall be deemed to be, a motion for entry of an order deemed substantively consolidating the Chapter 11 Cases for the limited purposes set forth herein. If no objection to substantive consolidation is timely Filed and served by any Holder of an Impaired Claim on or before the deadline to object to the confirmation of the Plan, or such other date as may be fixed by the Bankruptcy Court and the Debtors meet their burden of introducing evidence to establish that substantive consolidation is merited under the standards of applicable bankruptcy law, the Confirmation Order, which shall be deemed to substantively consolidate the Debtors for the limited purposes set forth herein, may be entered by the Court. If any such objections are timely Filed and served, a hearing with respect to the substantive consolidation of the Chapter 11 Cases and the objections thereto shall be scheduled by the Bankruptcy Court, which hearing shall coincide with the Confirmation Hearing.

General Settlement of Claims and Interests

Unless otherwise set forth in the Plan, pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, and in consideration for the classification, distributions, releases, and other benefits provided under the Plan, on the Effective Date, the provisions of the Plan shall constitute a good-faith compromise and settlement of all Claims, Interests, and controversies released, settled, compromised, discharged, or otherwise resolved pursuant to the Plan whether under any provision of chapter 5 of the Bankruptcy Code, on any equitable theory (including equitable subordination, equitable disallowance, or unjust enrichment) or otherwise. The Plan shall be deemed a motion to approve the good-faith compromise and settlement of all such Claims, Interests, and controversies, and the entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of such compromise and settlement under section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, as well as a finding by the Bankruptcy Court that such settlement and compromise is fair, equitable, reasonable, and in the best interests of the Debtors and their Estates. Subject to Article VI of the Plan, all distributions made to Holders of Allowed Claims and Allowed Interests (as applicable) in any Class are intended to be and shall be final.

Restructuring Transactions

On or before the Effective Date, the applicable Debtors or the Reorganized Debtors (and their respective officers, directors, members, or managers (as applicable)) shall enter into and shall take any actions as may be necessary or appropriate to effectuate the Plan, which may include: (1) the execution, delivery, filing, registration or recordation of appropriate agreements or other documents of merger, amalgamation, consolidation, restructuring, conversion, disposition, transfer, arrangement, continuance, dissolution, sale, purchase, or liquidation containing terms that are consistent with the terms of the Plan and that satisfy the applicable requirements of applicable law and any other terms to which the applicable Entities may agree, including the documents constituting the Plan Supplement; (2) the execution, delivery, filing, registration or recordation of appropriate instruments of transfer, assignment, assumption, or delegation of any asset, property, right, liability, debt, or obligation on terms consistent with the terms of the Plan and having other terms for which the applicable Entities may agree; (3) the execution, delivery, filing, registration or recordation of appropriate certificates or articles of incorporation, formation, reincorporation, merger, consolidation, conversion, amalgamation, arrangement, continuance, or dissolution pursuant to applicable law; (4) the execution, delivery, filing, registration or recordation of the New Governance Documents; (5) the issuance, distribution, reservation, or dilution, as applicable, of the New Preferred Stock and New Common Stock, as set forth herein; and (6) all other actions that the applicable Entities determine to be necessary, including making filings or recordings that may be required by applicable law in connection with the Plan. All Holders of Claims and Interests receiving distributions pursuant to the Plan and all other necessary parties in interest, including any and all agents thereof, shall prepare, execute, and deliver any agreements or documents, and take any other actions as the Debtors and the Plan Sponsor may jointly determine are necessary or advisable, including by voting and/or exercising any powers or rights available to such Holder, including at any board, or creditors’, or shareholders’ meeting, to effectuate the provisions and intent of the Plan The Confirmation Order shall, and shall be deemed to, pursuant to sections 363 and 1123 of the Bankruptcy Code, authorize, among other things, all actions as may be necessary or appropriate to effect any transaction described in, contemplated by, or necessary to effectuate the Plan, including the Restructuring Transactions.

Sources of Consideration for Plan Distributions

Subject to satisfaction of all Direct Investment Commitment Conditions (unless waived by the Plan Sponsor in its sole discretion), the Debtors and Reorganized Debtors, as applicable, shall fund Plan Distributions, as applicable, with (1) the New Preferred Stock, (2) the New Common Stock, and (3) a portion of the proceeds of the Direct Investment Preferred Equity Raise in an amount equal to the Plan Distribution Amount. Each distribution and issuance referred to in Article VI of the Plan shall be governed by the terms and conditions set forth in the Plan applicable to such distribution or issuance and by the terms and conditions of the instruments or other documents evidencing or relating to such distribution or issuance, which terms and conditions shall bind each Entity receiving such distribution or issuance. The issuance, distribution, or authorization, as applicable, of certain securities in connection with the Plan, including the New Common Stock and the New Preferred Stock will be exempt from SEC registration, as described more fully in Article IV. G below.

Deregistration of Existing Common Equity Interests; Issuance and Distribution of New Common Stock and New Preferred Equity

Prior to or as soon as reasonably practicable following the Effective Date, in accordance with all applicable federal and state rules and regulations, including the Securities Exchange Act of 1934, as amended (the “Exchange Act”), PARTS iD or Reorganized PARTS iD, as applicable, shall take steps to de-register its Existing Equity Interests and to terminate and/or suspend its reporting obligations under the Exchange Act, including filing a Form 15 with the U.S. Securities and Exchange Commission to deregister its Existing Common Equity Interests.

On the Effective Date, Reorganized PARTS iD shall issue the New Common Stock and New Preferred Stock pursuant to the Plan. The issuance of the New Common Stock, including any equity awards reserved for the Management Incentive Plan, by the Reorganized Debtors shall be authorized without the need for any further corporate action or without any further action by the Debtors or Reorganized Debtors or by Holders of any Claims or Interests, as applicable.

All of the shares of New Common Stock and New Preferred Stock issued pursuant to the Plan shall be duly authorized, validly issued, fully paid, and non-assessable. Each distribution and issuance of New Common Stock and New Preferred Equity shall be governed by the terms and conditions set forth in the Plan applicable to such distribution or issuance and by the terms and conditions of the instruments evidencing or relating to such distribution or issuance, which terms and conditions shall bind each Entity receiving such distribution or issuance without the need for execution by any party thereto other than the applicable Reorganized Debtor(s). Any Entity’s acceptance of New Common Stock or New Preferred Stock shall be deemed as its agreement to the New Governance Documents, as the same may be amended or modified from time to time following the Effective Date in accordance with their respective terms. The New Common Stock and New Preferred Equity will not be registered under the Securities Act or listed on any exchange as of the Effective Date and will not meet the eligibility requirements of the Depository Trust Company.

The Direct Investment Preferred Equity Raise and the Direct Investment Commitments

On the Effective Date, the Debtors shall consummate the Direct Investment Preferred Equity Raise through which the Plan Sponsor shall purchase $26,000,000 of New Preferred Stock on the terms and conditions set forth in the Direct Investment Documents, the Plan, and the Confirmation Order. Together with the New Preferred Stock issued to any Holder of an Allowed New Money DIP Claim, the New Preferred Stock issued in connection with the Direct Investment Preferred Equity Raise shall constitute 100% of the New Preferred Stock.

Corporate Existence

Except as otherwise provided in the Plan or any agreement, instrument, or other document incorporated in the Plan or the Plan Supplement, each Debtor shall continue to exist after the Effective Date as a separate corporate entity or limited liability company, as the case may be, with all the powers of a corporation or limited liability company, as the case may be, pursuant to the applicable law in the jurisdiction in which each applicable Debtor is incorporated or formed and pursuant to the respective certificate of incorporation and bylaws (or other formation documents) in effect prior to the Effective Date, except to the extent such certificate of incorporation and bylaws (or other formation documents) are amended under the Plan or otherwise, and to the extent such documents are amended in accordance therewith, such documents are deemed to be amended pursuant to the Plan and require no further action or approval (other than any requisite filings required under applicable state or federal law). After the Effective Date, the respective certificate of incorporation and bylaws (or other formation documents) of the Reorganized Debtors may be amended or modified on the terms therein without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules. After the Effective Date, one or more of the Reorganized Debtors may be disposed of, dissolved, wound down, or liquidated without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules.

Vesting of Assets in the Reorganized Debtors

Except as otherwise provided in the Confirmation Order, the Plan, or any agreement, instrument, or other document incorporated in, or entered into in connection with or pursuant to, the Plan or Plan Supplement, on the Effective Date, all property in each Debtor’s Estate, all Causes of Action (other than Avoidance Actions with respect to Released Parties), and any property acquired by any of the Debtors pursuant to the Plan shall vest in each respective Reorganized Debtor, free and clear of all Liens, Claims, charges, or other encumbrances. On and after the Effective Date, except as otherwise provided in the Plan, each Reorganized Debtor may operate its business and may use, acquire, or dispose of property and compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules.

New Shareholders Agreement

On the Effective Date, Reorganized PARTS iD shall enter into and deliver the New Shareholders Agreement, in substantially the form included in the Plan Supplement, to each Holder of New Common Stock and each Holder of New Preferred Stock, and such parties shall be bound thereby, in each case without the need for execution by any party thereto other than Reorganized PARTS iD.

Cancellation of Existing Securities and Agreements

On the Effective Date, except to the extent otherwise provided in the Plan, all notes, instruments, certificates, and other documents evidencing Claims or Interests shall be canceled, and the obligations of the Debtors or the Reorganized Debtors thereunder or in any way related thereto shall be discharged and deemed satisfied in full.

Corporate Action

On or before the Effective Date, as applicable, all actions contemplated under the Plan (including under the documents contained in the Plan Supplement) shall be deemed authorized and approved by the Bankruptcy Court in all respects without any further corporate or equity holder action, including, as applicable: (1) the adoption or assumption, as applicable, of the Compensation and Benefits Programs; (2) the selection of the directors, trustees and officers for the Reorganized Debtors, including the appointment of the New Board; (3) the authorization, issuance and distribution of the New Preferred Stock and the New Common Stock and the execution, delivery, and filing of any documents pertaining thereto, as applicable; (4) the implementation of the Restructuring Transactions; (5) all other actions contemplated under the Plan (whether to occur before, on, or after the Effective Date); (6) the adoption of the New Governance Documents; (7) the assumption, assumption and assignment, or rejection (to the extent applicable), as applicable, of Executory Contracts and Unexpired Leases; and (8) all other acts or actions contemplated or reasonably necessary or appropriate to promptly consummate the Restructuring Transactions contemplated by the Plan (whether to occur before, on, or after the Effective Date). Upon the Effective Date, all matters provided for in the Plan involving the structure of the Debtors or the Reorganized Debtors, and any corporate, partnership, limited liability company, or other governance action required by the Debtors or the Reorganized Debtor, as applicable, in connection with the Plan shall be deemed to have occurred and shall be in effect, without any requirement of further action by the Security holders, members, directors, trustees or officers of the Debtors or the Reorganized Debtors, as applicable. On or (as applicable) prior to the Effective Date, the appropriate officers of the Debtors or the Reorganized Debtors, as applicable, shall be authorized and (as applicable) directed to issue, execute, and deliver the agreements, documents, Securities, and instruments contemplated under the Plan (or necessary or desirable to effect the transactions contemplated under the Plan) in the name of and on behalf of the Reorganized Debtors, including the New Preferred Stock and the New Common Stock, the New Governance Documents and any and all other agreements, documents, Securities, and instruments relating to the foregoing. The authorizations and approvals contemplated by this Article IV.K shall be effective notwithstanding any requirements under non-bankruptcy law.

New Governance Documents

On or immediately prior to the Effective Date, the New Governance Documents shall be automatically adopted by the applicable Reorganized Debtors. To the extent required under the Plan or applicable non-bankruptcy law, each of the Reorganized Debtors will file its New Governance Documents with the applicable authorities in its respective jurisdiction of organization if and to the extent required in accordance with the applicable laws of such jurisdiction. The New Governance Documents will, among other things, (a) authorize the issuance of the New Preferred Stock and New Common Stock and (b) prohibit the issuance of non-voting equity securities, solely to the extent required under section 1123(a)(6) of the Bankruptcy Code. After the Effective Date, each Reorganized Debtor may amend and restate its certificate of incorporation and other formation and constituent documents as permitted by the laws of its respective jurisdiction of formation and the terms of the New Governance Documents.

Indemnification Obligations

Notwithstanding anything to the contrary contained in the Plan, each Indemnification Obligation shall not be assumed pursuant to the Plan, and shall be discontinued and rejected by the applicable Debtor as of the Effective Date pursuant to sections 365 and 1123 of the Bankruptcy Code or otherwise.

Directors and Officers of the Reorganized Debtors

As of the Effective Date, the term of the current members of the existing Board shall expire, and all of the directors for the initial term of the New Board shall be appointed. The New Board will initially consist of the directors to be identified in the Plan Supplement or otherwise disclosed prior to the Effective Date. To the extent known, the identity of the members of the New Board will be disclosed in the Plan Supplement or prior to the Confirmation Hearing, consistent with section 1129(a)(5) of the Bankruptcy Code. In subsequent terms, the directors shall be selected in accordance with the New Governance Documents. Provisions regarding the removal, appointment and replacement of members of the New Board will be set forth in the New Governance Documents. Each director and officer of the Reorganized Debtors shall serve from and after the Effective Date pursuant to the terms of the applicable New Governance Documents and other constituent documents.

Effectuating Documents; Further Transactions

On and after the Effective Date, the Reorganized Debtors, and their respective officers, directors, members, or managers (as applicable), are authorized to and may issue, execute, deliver, file, or record such contracts, Securities, instruments, releases, and other agreements or documents and take such actions as may be necessary or appropriate to effectuate, implement, and further evidence the terms and conditions of the Plan, the Plan Supplement and the Securities issued pursuant to the Plan in the name of and on behalf of the Reorganized Debtors, without the need for any approvals, authorization, or consents except for those expressly required pursuant to the Plan.

Section 1145 Exemption

Pursuant to section 1145 of the Bankruptcy Code, the offering, issuance, and distribution of the New Preferred Stock and the New Common Stock, but excluding the MIP Awards (if applicable), in each case, after the Petition Date, shall be exempt from, among other things, the registration requirements of section 5 of the Securities Act or any similar federal, state, or local law in reliance on section 1145 of the Bankruptcy Code or, only to the extent such exemption under Section 1145 of the Bankruptcy Code is not available, any other available exemption from registration under the Securities Act. Pursuant to section 1145 of the Bankruptcy Code, such New Preferred Stock and New Common Stock (other than the MIP Awards, if applicable) will be freely tradable in the U.S. without registration under the Securities Act by the recipients thereof, subject to the provisions of (1) section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter in section 2(a)(11) of the Securities Act and compliance with any applicable state or foreign securities laws, if any, and the rules and regulations of the Securities and Exchange Commission, if any, applicable at the time of any future transfer of such Securities or instruments, (2) any other applicable regulatory approvals, and (3) any restrictions in the Reorganized Debtors’ New Governance Documents. The New Preferred Stock and New Common Stock, in each case, will be offered, issued and distributed in reliance upon section 4(a)(2) of the Securities Act.

Any Securities distributed pursuant to section 4(a)(2) under the Securities Act will be considered “restricted securities” as defined by Rule 144 of the Securities Act and may not be resold under the Securities Act or applicable state securities laws absent an effective registration statement, or pursuant to an applicable exemption from registration, under the Securities Act and applicable state securities laws and subject to any restrictions in the New Governance Documents.

Notwithstanding anything to the contrary in the Plan, no Entity shall be entitled to require a legal opinion regarding the validity of any transaction contemplated by the Plan, including, for the avoidance of doubt, whether the New Preferred Stock, the New Common Stock and any MIP Awards (if applicable) are exempt from the registration requirements of section 5 of the Securities Act.

Recipients of the New Preferred Stock, the New Common Stock and any MIP Awards are advised to consult with their own legal advisors as to the availability of any exemption from registration under the Securities Act and any applicable Blue Sky Laws.

Section 1146 Exemption from Certain Taxes and Fees

To the fullest extent permitted by section 1146(a) of the Bankruptcy Code, any transfers (whether from a Debtor to a Reorganized Debtor or to any other Person) of property under the Plan or pursuant to: (1) the issuance, distribution, transfer, or exchange of any debt, equity Security, or other interest in the Debtors or the Reorganized Debtors, including the New Preferred Stock and New Common Stock; (2) the Restructuring Transactions; (3) the creation, modification, consolidation, termination, refinancing, and/or recording of any security interest, or the securing of additional indebtedness by such or other means; (4) the making, assignment, or recording of any lease or sublease; (5) the making, delivery, or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including any deeds, bills of sale, assignments, or other instrument of transfer executed in connection with any transaction arising out of, contemplated by, or in any way related to the Plan, shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, real estate transfer tax, personal property transfer tax, sales or use tax, mortgage recording tax, Uniform Commercial Code filing or recording fee, regulatory filing or recording fee, or other similar tax or governmental assessment, and upon entry of the Confirmation Order, the appropriate state or local governmental officials or agents shall forego the collection of any such tax or governmental assessment and accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax, recordation fee, or governmental assessment. All filing or recording officers (or any other Person with authority over any of the foregoing), wherever located and by whomever appointed, shall comply with the requirements of section 1146(a) of the Bankruptcy Code, shall forego the collection of any such tax or governmental assessment, and shall accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment.

Director and Officer Liability Insurance

Notwithstanding anything in the Plan to the contrary, the Reorganized Debtors shall be deemed to have assumed all of the Debtors’ D&O Liability Insurance Policies pursuant to section 365 of the Bankruptcy Code effective as of the Effective Date. Entry of the Confirmation Order will constitute the Bankruptcy Court’s approval of the Reorganized Debtors’ foregoing assumption of each of the unexpired D&O Liability Insurance Policies.

Management Incentive Plan

On or after the Effective Date, the Reorganized Debtors shall adopt and implement the Management Incentive Plan. The Management Incentive Plan shall provide for the issuance of MIP Awards in an amount up to the value of 22% of the New Common Stock, subject to achieving an identified threshold return to investors. The MIP Awards shall be determined on a fully diluted basis taking into account reserved MIP Awards and the New Common Stock issued pursuant to the Plan (and not, for the avoidance of doubt, including the New Preferred Stock). The participants in the MIP, the allocations and form of the MIP Awards (including as to whether in the form of options, phantom awards and/or other equity-based compensation) to such participants (including the amount of allocations and the timing of the Awards), and the terms and conditions of such Awards (including vesting, exercise prices, threshold amounts, base values, hurdles, forfeiture, repurchase rights and transferability) shall be determined by the New Board.

Preservation of Causes of Action

In accordance with section 1123(b) of the Bankruptcy Code, but subject to Article VIII of the Plan hereof, each Reorganized Debtor, as applicable, shall retain and may enforce all rights to commence and pursue, as appropriate, any and all Causes of Action of the Debtors (other than Avoidance Actions with respect to Released Parties), whether arising before or after the Petition Date, including any actions specifically enumerated in the Schedule of Retained Causes of Action, and the Reorganized Debtors’ rights to commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date, other than Avoidance Actions with respect to Released Parties and Causes of Action settled or resolved by the Debtors prior to the Effective Date with the consent of the Plan Sponsor or released by the Debtors pursuant to the releases and exculpations contained in the Plan, including in Article VIII of the Plan, which shall be deemed released and waived by the Debtors and the Reorganized Debtors as of the Effective Date.

The Reorganized Debtors reserve and shall retain such Causes of Action of the Debtors notwithstanding the rejection or repudiation (to the extent applicable) of any Executory Contract or Unexpired Lease during the Chapter 11 Cases or pursuant to the Plan. In accordance with section 1123(b)(3) of the Bankruptcy Code, any Causes of Action that a Debtor may hold against any Entity shall vest in the Reorganized Debtors, except as otherwise expressly provided in the Plan, including Article VIII of the Plan. The applicable Reorganized Debtors, through their authorized agents or representatives, shall retain and may exclusively enforce any and all such Causes of Action. The Reorganized Debtors shall have the exclusive right, authority, and discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action and to decline to do any of the foregoing without the consent or approval of any third party or further notice to or action, order, or approval of the Bankruptcy Court.

Release of Avoidance Actions

On the Effective Date, the Debtors, on behalf of themselves and their Estates, shall waive and release any and all Avoidance Actions solely with respect to Released Parties, and the Debtors, the Reorganized Debtors, and any of their successors or assigns, and any Entity acting on behalf of the Debtors or the Reorganized Debtors shall be deemed to have waived the right to pursue any and all Avoidance Actions solely with respect to Released Parties, except for such Avoidance Actions brought as counterclaims or defenses to Claims asserted against the Debtors.

Release of Consenting Vendors

On the Effective Date, the Debtors, on behalf of the themselves and their Estates, shall waive and release any and all demands, claims, actions, Causes of Action, rights, liabilities, obligations, liens, suits, losses, damages, attorney fees, court costs, or any other form of claim whatsoever, of whatever kind or nature, whether known or unknown, suspected or unsuspected, in law or equity, which the Debtors have, have had, may have or may claim to have against the Consenting Vendors arising on or prior to the Effective Date

Single Satisfaction of Claims

Holders of Allowed Claims may assert such Claims against the Debtors and such Claims shall be entitled to share in the recovery provided for the applicable Class of Claims against the Debtors based upon the full Allowed amount of the Claim. Notwithstanding the foregoing, in no case shall the aggregate value of all property received or retained under the Plan on account of Allowed Claims exceed 100% of the underlying Allowed Claim plus applicable interest.

Releases

The Plan contains certain releases (as described more fully in Article III.N of this Disclosure Statement, entitled “Will there be releases and exculpation granted to parties in interest as part of the Plan?”), including mutual releases among the Debtors, Reorganized Debtors, and certain of their key stakeholders. The releases will only be binding with respect to (a) all Holders of Claims or Interests that vote to accept the Plan; (b) all Holders of Claims or Interests that are entitled to vote on the Plan who vote to reject the Plan and opt in to the releases provided for in Article VIII.D of the Plan by checking the box on the ballot indicating that they opt in to granting such releases in the Plan submitted on or before the Voting Deadline; (c) the DIP Agent and DIP Lenders; (d) to the maximum extent permitted by Law, each current and former Affiliate of each Entity in clause (a) through the following clause (e), solely to the extent the pertinent Entity can bind any such Affiliate to the terms of the Plan under applicable law; and (e) each Related Party of each Entity in clause (a) through this clause (e), solely to the extent the pertinent Entity can bind any such Related Party to the terms of the Plan under applicable law.

VIII.

OTHER KEY ASPECTS OF THE PLAN

Treatment of Executory Contracts and Unexpired Leases

Assumption and Rejection of Executory Contracts and Unexpired Leases

Except as otherwise provided in the Plan, on and as of the Effective Date, each Executory Contract and Unexpired Lease shall be deemed assumed (or assumed and assigned to the respective Reorganized Debtor, as applicable), without the need for any further notice to or action, order, or approval of the Bankruptcy Court, pursuant to sections 365 and 1123 of the Bankruptcy Code unless such Executory Contract or Unexpired Lease (i) previously expired or terminated pursuant to its own terms; or (ii) is the subject of a motion to reject filed on or before the Effective Date. The Confirmation Order will constitute an order of the Bankruptcy Court approving the above-described assumptions and assignments.

Except as otherwise provided herein or agreed to by the Debtors (with the consent of the Plan Sponsor) and the applicable counterparty, each assumed Executory Contract or Unexpired Lease shall include all modifications, amendments, supplements, restatements, or other agreements related thereto, and all rights related thereto, if any, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, and any other interests. Modifications, amendments, supplements, and restatements to prepetition Executory Contracts and Unexpired Leases that have been executed by the Debtors during the Chapter 11 Cases shall not be deemed to alter the prepetition nature of the Executory Contract or Unexpired Lease or the validity, priority, or amount of any Claims that may arise in connection therewith.

Entry of the Confirmation Order shall constitute an order of the Bankruptcy Court approving the assumptions, assumptions and assignments, and related Cure amounts with respect thereto, or rejections (to the extent applicable) of the Executory Contracts or Unexpired Leases as set forth in the Plan or the Schedule of Proposed Cure Amounts or the Rejected Executory Contracts and Unexpired Leases Schedule (if any), pursuant to sections 365(a) and 1123 of the Bankruptcy Code. Except as otherwise specifically set forth herein, assumptions or rejections (to the extent applicable) of Executory Contracts and Unexpired Leases pursuant to the Plan are effective as of the Effective Date. Each Executory Contract or Unexpired Lease assumed pursuant to the Plan or by Bankruptcy Court order but not assigned to a third party on or before the Effective Date shall re-vest in and be fully enforceable by the applicable contracting Reorganized Debtor in accordance with its terms, except as such terms may have been modified by the provisions of the Plan or any order of the Bankruptcy Court authorizing and providing for its assumption. Any motions to assume Executory Contracts or Unexpired Leases pending on the Effective Date shall be subject to approval by a Final Order on or after the Effective Date but may be withdrawn, settled, or otherwise prosecuted by the Reorganized Debtors.

Except as otherwise provided herein or agreed to by the Debtors and the applicable counterparty, each assumed Executory Contract or Unexpired Lease shall include all modifications, amendments, supplements, restatements, or other agreements related thereto, and all rights related thereto, if any, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, and any other interests. Modifications, amendments, supplements, and restatements to prepetition Executory Contracts and Unexpired Leases that have been executed by the Debtors during the Chapter 11 Cases shall not be deemed to alter the prepetition nature of the Executory Contract or Unexpired Lease or the validity, priority, or amount of any Claims that may arise in connection therewith.

To the maximum extent permitted by law, to the extent any provision in any Executory Contract or Unexpired Lease assumed or assumed and assigned pursuant to the Plan restricts or prevents, or purports to restrict or prevent, or is breached or deemed breached by, the assumption or assumption and assignment of such Executory Contract or Unexpired Lease (including any “change of control” provision), then such provision shall be deemed modified such that the transactions contemplated by the Plan shall not entitle the non-Debtor party thereto to terminate such Executory Contract or Unexpired Lease or to exercise any other default-related rights with respect thereto.

Notwithstanding anything to the contrary in the Plan, the Debtors or the Reorganized Debtors, as applicable, reserve the right, with the consent of the Plan Sponsor, to alter, amend, modify, or supplement the Rejected Executory Contracts and Unexpired Leases Schedule (if any) or Schedule of Proposed Cure Amounts at any time up to forty-five days after the Effective Date. The Debtors or the Reorganized Debtors, as applicable, shall file with the Bankruptcy Court and serve on the applicable counterparty notice regarding any change to the Rejected Executory Contracts and Unexpired Leases Schedule (if any) or the Schedule of Proposed Cure Amounts, as applicable, and the counterparty shall have fourteen days from service of such notice to file an objection with the Bankruptcy Court.

To the extent any provision of the Bankruptcy Code or the Bankruptcy Rules requires the Debtors to assume or reject an Executory Contract or Unexpired Lease, such requirement shall be satisfied if the Debtors make an election to assume or reject such Executory Contract or Unexpired Lease prior to the deadline set forth by the Bankruptcy Code or the Bankruptcy Rules, as applicable, regardless of whether or not the Bankruptcy Court has actually ruled on such proposed assumption or rejection prior to such deadline.

If certain, but not all, of a contract counterparty’s Executory Contracts or Unexpired Leases are assumed pursuant to the Plan, the Confirmation Order shall be a determination that such counterparty’s Executory Contracts or Unexpired Leases that are being rejected pursuant to the Plan are severable agreements that are not integrated with those Executory Contracts and/or Unexpired Leases that are being assumed pursuant to the Plan. Parties seeking to contest this finding with respect to their Executory Contracts and/or Unexpired Leases must file a timely objection to the Plan on the grounds that their agreements are integrated and not severable, and any such dispute shall be resolved by the Bankruptcy Court at the Confirmation Hearing (to the extent not resolved by the parties prior to the Confirmation Hearing).

Cure of Defaults for Executory Contracts and Unexpired Leases

Any monetary defaults under each Executory Contract and Unexpired Lease to be assumed (or assumed and assigned to the respective Reorganized Debtor, as applicable) pursuant to the Plan shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the default amount in Cash upon assumption thereof. To the extent any monetary default exists under a particular Executory Contract of Unexpired Lease, at least fourteen (14) days before the Confirmation Hearing, the Debtors shall have served a notice on parties to Executory Contracts and Unexpired Leases to be assumed reflecting the Debtors’ intention to assume or assume and assign the Executory Contract or Unexpired Lease in connection with the Plan and setting forth the proposed cure amount (if any). If a counterparty to any Executory Contract or Unexpired Lease that the Debtors or Reorganized Debtors intend to assume does not receive such a notice, the proposed cure amount for such executory contract or unexpired lease shall be deemed to be zero dollars ($0.00).

In the event of a dispute regarding (i) the amount of any payments to cure such a default, (ii) the ability of the Reorganized Debtors or any assignee to provide “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code) under the Executory Contract or Unexpired Lease to be assumed or (iii) any other matter pertaining to assumption, the cure payments required by section 365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final Order or orders resolving the dispute and approving the assumption. The cure notices shall include procedures for objecting to proposed assumptions of Executory Contracts and Unexpired Leases and any amounts of Cure Claims to be paid in connection therewith and resolution of disputes by the Bankruptcy Court. Any objection by a counterparty to an Executory Contract or Unexpired Lease to a proposed assumption or related cure amount must be filed, served and actually received by counsel to the Debtors at least four (4) Business Days before the Confirmation Hearing. Any counterparty to an Executory Contract or Unexpired Lease that fails to object timely to the proposed assumption or cure amount will be deemed to have assented to such assumption or cure amount; provided, however, that nothing herein shall prevent the Reorganized Debtors from paying any Cure costs despite the failure of the relevant counterparty to file such request for payment of such Cure costs. The Reorganized Debtors also may settle any Cure costs without any further notice to or action, order, or approval of the Bankruptcy Court.

The Debtors or the Reorganized Debtors, as applicable, shall pay the Cure amounts, if any, on the Effective Date or as soon as reasonably practicable thereafter, in the ordinary course of business, or on such other terms as the parties to such Executory Contracts or Unexpired Leases may agree; provided that if a dispute regarding assumption or Cure is unresolved as of the Effective Date, then payment of the applicable Cure amount shall occur as soon as reasonably practicable after such dispute is resolved. Any Cure shall be deemed fully satisfied, released, and discharged upon payment of the Cure.

Assumption of any Executory Contract or Unexpired Lease pursuant to the Plan or otherwise shall result in the full release and satisfaction of any Claims or defaults, whether monetary or nonmonetary, including defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults, arising under any assumed Executory Contract or Unexpired Lease at any time before the effective date of the assumption.

Any Proof of Claim Filed with respect to an Executory Contract or Unexpired Lease that is assumed shall be deemed disallowed and expunged, without further notice to or action, order or approval of the Bankruptcy Court.

Reservation of Rights

Nothing contained in the Plan or the Plan Supplement shall constitute an admission by the Debtors or any other party that any contract or lease is in fact an Executory Contract or Unexpired Lease or that any Reorganized Debtor has any liability thereunder. If there is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of assumption or rejection (to the extent applicable), the Debtors or the Reorganized Debtors, as applicable, shall have forty-five days following entry of a Final Order resolving such dispute to alter their treatment of such contract or lease.

Contracts and Leases Entered Into After the Petition Date

Contracts and leases entered into after the Petition Date by any Debtor, including any Executory Contracts and Unexpired Leases assumed by such Debtor, will be performed by the applicable Debtor or Reorganized Debtor in the ordinary course of its business. Accordingly, such contracts and leases (including any assumed Executory Contracts and Unexpired Leases) will survive and remain unaffected by entry of the Confirmation Order.

Assumption of Insurance Policies

Each of the Debtors’ insurance policies and any agreements, documents, or instruments relating thereto, are treated as Executory Contracts under the Plan. Unless otherwise provided in the Plan, on the Effective Date, (1) the Debtors shall be deemed to have assumed all insurance policies and any agreements, documents, and instruments relating to coverage of all insured Claims and (2) such insurance policies and any agreements, documents, or instruments relating thereto shall revest in the Reorganized Debtors.

Employee Compensation and Benefits Program

Compensation and Benefits Programs

Subject to the provisions of the Plan, all Compensation and Benefits Programs shall be treated as Executory Contracts under the Plan (including all employment agreements and employment letters, severance plans and amendments thereto, severance letters and severance agreements, retention plans and letters, annual incentive plans (whether based on PARTS iD’s or individual employee performance) and other agreements entered into with current and former officers and other employees and effective as of the Confirmation Date) and deemed assumed on the Effective Date pursuant to the provisions of sections 365 and 1123 of the Bankruptcy Code, unless (i) previously expired or terminated pursuant to its own terms; or (ii) is the subject of a motion to reject filed on or before the Effective Date; provided, however, that the Debtors or Reorganized Debtors, as applicable, with the consent of the Plan Sponsor, may alter, amend, modify, or supplement the Rejected Executory Contracts and Unexpired Leases Schedule (if any) or Schedule of Proposed Cure Amounts relating to the Compensation and Benefits Programs at any time up to forty-five days after the Effective Date in accordance with Section V.A and V.F of the Plan.

A counterparty to a Compensation and Benefits Program assumed or assumed and assigned pursuant to the Plan shall have the same rights under such Compensation and Benefits Program as such counterparty had thereunder immediately prior to such assumption (unless otherwise agreed by such counterparty and the applicable Reorganized Debtor(s)); provided, however, that any assumption or assumption and assignment of Compensation and Benefits Programs pursuant to the Plan or any of the Restructuring Transactions shall not trigger or be deemed to trigger any change of control, immediate vesting, termination, or similar provisions therein.

Workers’ Compensation Programs

As of the Effective Date, except as set forth in the Plan Supplement, the Debtors and the Reorganized Debtors shall continue to honor their obligations under: (a) all applicable workers’ compensation laws in states in which the Reorganized Debtors operate; and (b) the Debtors’ written contracts, agreements, agreements of indemnity, self-insured workers’ compensation bonds, policies, programs, and plans for workers’ compensation and workers’ compensation insurance. All Proofs of Claims on account of workers’ compensation shall be deemed withdrawn automatically and without any further notice to or action, order, or approval of the Bankruptcy Court; provided that nothing in the Plan shall limit, diminish, or otherwise alter the Debtors’ or Reorganized Debtors’ defenses, Causes of Action, or other rights under applicable non-bankruptcy law with respect to any such contracts, agreements, policies, programs, and plans; provided further that nothing herein shall be deemed to impose any obligations on the Debtors in addition to what is provided for under applicable non-bankruptcy law.

Indemnification Obligations

Nonoccurrence of Effective Date

In the event that the Effective Date does not occur, the Bankruptcy Court shall retain jurisdiction with respect to any request to extend the deadline for assuming or rejecting Unexpired Leases pursuant to section 365(d)(4) of the Bankruptcy Code.

Provisions Governing Distributions

Distributions on Account of Claims Allowed as of the Effective Date

Except as otherwise provided herein, in a Final Order, or as otherwise agreed to by the Debtors or the Reorganized Debtors, as the case may be, and the Holder of the applicable Allowed Claim on the first Distribution Date, the Reorganized Debtors shall make initial distributions under the Plan on account of Claims Allowed on or before the Effective Date, subject to the Reorganized Debtors’ right to object to Claims; provided that (1) Allowed Administrative Claims with respect to liabilities incurred by the Debtors in the ordinary course of business during the Chapter 11 Cases or assumed by the Debtors prior to the Effective Date shall be paid or performed in the ordinary course of business in accordance with the terms and conditions of any controlling agreements, course of dealing, course of business, or industry practice, and (2) Allowed Priority Tax Claims shall be paid in accordance with Article II.D of the Plan. To the extent any Allowed Priority Tax Claim is not due and owing on the Effective Date, such Claim shall be paid in full in Cash in accordance with the terms of any agreement between the Debtors and the Holder of such Claim or as may be due and payable under applicable non-bankruptcy law or in the ordinary course of business.

Disbursing Agent

All distributions under the Plan shall be made by the Disbursing Agent. The Disbursing Agent shall not be required to give any bond or surety or other security for the performance of its duties unless otherwise ordered by the Bankruptcy Court. Additionally, in the event that the Disbursing Agent is so otherwise ordered, all costs and expenses of procuring any such bond or surety shall be borne by the Reorganized Debtors.

All Plan Distributions to any Disbursing Agent on behalf of the Holders of Claims listed on the Claims Register shall be deemed completed by the Debtors when received by such Disbursing Agent. The Plan Distributions shall be made to any such Holders at the direction of the applicable Disbursing Agent.

Rights and Powers of Disbursing Agent

Powers of the Disbursing Agent

The Disbursing Agent shall be empowered to: (a) effect all actions and execute all agreements, instruments, and other documents necessary to perform its duties under the Plan; (b) make all distributions contemplated hereby; (c) employ professionals to represent it with respect to its responsibilities; and (d) exercise such other powers as may be vested in the Disbursing Agent by order of the Bankruptcy Court, pursuant to the Plan or as deemed by the Disbursing Agent to be necessary and proper to implement the provisions hereof.

Expenses Incurred on or After the Effective Date

Except as otherwise ordered by the Bankruptcy Court, the amount of any reasonable fees and expenses incurred by the Disbursing Agent on or after the Effective Date (including taxes), and any reasonable compensation and expense reimbursement claims (including reasonable attorney fees and expenses), made by the Disbursing Agent shall be paid in Cash by the Reorganized Debtors.

Delivery of Distributions and Undeliverable or Unclaimed Distributions

Record Date for Distribution

On the Distribution Record Date, the Claims Register shall be closed and any party responsible for making distributions shall instead be authorized and entitled to recognize only those record Holders listed on the Claims Register as of the close of business on the Distribution Record Date. If a Claim is transferred twenty or fewer days before the Distribution Record Date, the Disbursing Agent shall make distributions to the transferee only to the extent practical and, in any event, only if the relevant transfer form contains an unconditional and explicit certification and waiver of any objection to the transfer by the transferor.

Delivery of Distributions in General

Except as otherwise provided herein, distributions payable to Holders of Allowed Claims shall be made by the Disbursing Agent to such Holder at the address for each such Holder as indicated on the Debtors’ records as of the date of any such distribution; provided that the manner of such distributions shall be determined at the discretion of the Reorganized Debtors.

Minimum Distributions

No fractional shares of New Preferred Stock or New Common Stock shall be distributed and no Cash shall be distributed in lieu of such fractional amounts. When any distribution pursuant to the Plan on account of an Allowed Claim would otherwise result in the issuance of a number of shares of New Common Stock that is not a whole number, the actual distribution of shares of New Common Stock shall be rounded as follows: (a) fractions of one-half (¹/₂) or greater shall be rounded to the next higher whole number and (b) fractions of less than one-half (¹/₂) shall be rounded to the next lower whole number with no further payment therefor. The total number of authorized shares of New Common Stock to be distributed to Holders of Allowed Claims hereunder shall be adjusted as necessary to account for the foregoing rounding.

Undeliverable Distributions and Unclaimed Property

In the event that any distribution to any Holder of Allowed Claims is returned as undeliverable, no distribution to such Holder shall be made unless and until the Disbursing Agent has determined the then-current address of such Holder, at which time such distribution shall be made to such Holder without interest; provided that such distributions shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code at the expiration of six months from the Effective Date. After such date, all unclaimed property or interests in property shall revert to the Reorganized Debtors automatically and without need for a further order by the Bankruptcy Court (notwithstanding any applicable federal, provincial or state escheat, abandoned, or unclaimed property laws to the contrary) and, to the extent such unclaimed distribution comprises New Common Stock, such New Common Stock shall be canceled. Upon such revesting, the Claim of the Holder or its successors with respect to such property shall be canceled, discharged, and forever barred notwithstanding any applicable federal or state escheat, abandoned, or unclaimed property laws, or any provisions in any document governing the distribution that is an Unclaimed Distribution, to the contrary. The Disbursing Agent shall adjust the number of shares of New Common Stock outstanding as of the date of such cancelation to ensure that the distributions of New Common Stock contemplated under the Plan are given full force and effect.

Surrender of Canceled Instruments or Securities

On the Effective Date or as soon as reasonably practicable thereafter, each Holder of a certificate or instrument evidencing a Claim or an Interest that has been canceled in accordance with Article IV.J of the Plan shall be deemed to have surrendered such certificate or instrument to the Disbursing Agent. Such surrendered certificate or instrument shall be canceled solely with respect to the Debtors, and such cancelation shall not alter the obligations or rights of any non-Debtor third parties in respect of one another with respect to such certificate or instrument, including with respect to any indenture or agreement that governs the rights of the Holder of a Claim or Interest, which shall continue in effect for purposes of allowing Holders to receive distributions under the Plan, charging liens, priority of payment, and indemnification rights. Notwithstanding anything to the contrary herein, this paragraph shall not apply to certificates or instruments evidencing Claims that are Unimpaired under the Plan.

Manner of Payment

Except as otherwise provided in the Plan or any agreement, instrument, or other document incorporated by the Plan or the Plan Supplement, all distributions of the New Preferred Stock and New Common Stock to the Holders of the applicable Allowed Claims under the Plan shall be made by the Disbursing Agent on behalf of the Debtors or Reorganized Debtors, as applicable.

All distributions of Cash to the Holders of the applicable Allowed Claims under the Plan shall be made by the Disbursing Agent on behalf of the applicable Debtor or Reorganized Debtor.

At the option of the Disbursing Agent, any Cash payment to be made hereunder may be made by check or wire transfer or as otherwise required or provided in applicable agreements.

Indefeasible Distributions

Any and all distributions made under the Plan shall be indefeasible and not subject to clawback or turnover provisions.

Compliance with Tax Requirements

In connection with the Plan, to the extent applicable, the Debtors, Reorganized Debtors, Disbursing Agent, and any applicable withholding agent shall comply with all tax withholding and reporting requirements imposed on them by any Governmental Unit, and all distributions made pursuant to the Plan shall be subject to such withholding and reporting requirements. Notwithstanding any provision in the Plan to the contrary, such parties shall be authorized to take all actions necessary or appropriate to comply with such withholding and reporting requirements, including liquidating a portion of the distribution to be made under the Plan to generate sufficient funds to pay applicable withholding taxes, withholding distributions pending receipt of information necessary to facilitate such distributions, or establishing any other mechanisms they believe are reasonable and appropriate (subject to reasonable consultation with the Plan Sponsor). The Debtors and Reorganized Debtors reserve the right, with the consent of the Plan Sponsor, to allocate all distributions made under the Plan in compliance with all applicable wage garnishments, alimony, child support, and similar spousal awards, Liens, and encumbrances.

Any Holder of an Impaired Claim entitled to receive any property as an issuance or distribution under the Plan shall, upon request by the Disbursing Agent, provide an appropriate Form W-9 or (if the payee is a foreign Person) Form W-8. If such request is made and such Holder of an Impaired Claim fails to comply before the date that is 180 days after the request is made, the amount of such distribution shall irrevocably revert to the Debtors or the Reorganized Debtors, as applicable, and any Claim in respect of such distribution shall be discharged and forever barred from assertion against the Debtors or the Reorganized Debtors and their respective property.

Allocations

Distributions in respect of Allowed Claims shall be allocated first to the principal amount of such Claims (as determined for federal income tax purposes) and then, to the extent the consideration exceeds the principal amount of the Claims, to any portion of such Claims for accrued but unpaid interest.

No Postpetition or Default Interest on Claims

Unless otherwise specifically provided for in the Plan or the Confirmation Order, or required by applicable bankruptcy and non-bankruptcy law, and notwithstanding any documents that govern the Debtors’ prepetition indebtedness to the contrary, (1) postpetition and/or default interest shall not accrue or be paid on any prepetition Claims and (2) no Holder of a Claim shall be entitled to (a) interest accruing on or after the Petition Date on such Claim or (b) interest at the contract default rate, as applicable. Additionally, and without limiting the foregoing, interest shall not accrue or be paid on any Disputed Claim with respect to the period from the Effective Date to the date a final distribution is made on account of such Disputed Claim, if and when such Disputed Claim becomes an Allowed Claim.

10.

Foreign Currency Exchange Rate

Except as otherwise provided in a Bankruptcy Court order, as of the Effective Date, any Claim asserted in currency other than U.S. dollars shall be automatically deemed converted to the equivalent U.S. dollar value using the exchange rate for the applicable currency as published in The Wall Street Journal, National Edition, on the Effective Date.

11.

Setoffs and Recoupment

Except as expressly provided in the Plan, each Reorganized Debtor may, pursuant to section 553 of the Bankruptcy Code, set off and/or recoup against any Plan Distributions to be made on account of any Allowed Claim, any and all Claims, rights, and Causes of Action that such Reorganized Debtor may hold against the Holder of such Allowed Claim to the extent such setoff or recoupment is either (1) agreed in amount among the relevant Reorganized Debtor(s) and the Holder of the Allowed Claim or (2) otherwise adjudicated by the Bankruptcy Court or another court of competent jurisdiction; provided that neither the failure to effectuate a setoff or recoupment nor the allowance of any Claim hereunder shall constitute a waiver or release by a Reorganized Debtor or its successor of any and all claims, rights, and Causes of Action that such Reorganized Debtor or its successor may possess against the applicable Holder. In no event shall any Holder of a Claim be entitled to recoup such Claim against any claim, right, or Cause of Action of the Debtors or the Reorganized Debtors, as applicable, unless such Holder actually has performed such recoupment and provided notice thereof in writing to the Debtors in accordance with Article XII.G of the Plan on or before the Effective Date, notwithstanding any indication in any Proof of Claim or otherwise that such Holder asserts, has, or intends to preserve any right of recoupment.

12.

Claims Made or Payable by Third Parties

Claims Paid by Third Parties

The Debtors or the Reorganized Debtors, as applicable, shall reduce in full a Claim, and such Claim shall be disallowed without a Claims objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court, to the extent that the Holder of such Claim receives payment in full on account of such Claim from a party that is not a Debtor or a Reorganized Debtor. Subject to the last sentence of this paragraph, to the extent a Holder of a Claim receives a distribution on account of such Claim and receives payment from a party that is not a Debtor or a Reorganized Debtor on account of such Claim, such Holder shall, within fourteen days of receipt thereof, repay or return the distribution to the applicable Reorganized Debtor, to the extent the Holder’s total recovery on account of such Claim from the third party and under the Plan exceeds the amount of such Claim as of the date of any such distribution under the Plan. The failure of such Holder to timely repay or return such distribution shall result in the Holder owing the applicable Reorganized Debtor annualized interest at the Federal Judgment Rate on such amount owed for each Business Day after the fourteen-day grace period specified above until the amount is repaid.

Claims Payable by Third Parties

No distributions under the Plan shall be made on account of an Allowed Claim that is payable pursuant to one of the Debtors’ insurance policies until the Holder of such Allowed Claim has exhausted all remedies with respect to such insurance policy. To the extent that one or more of the Insurers agrees to satisfy in full or in part a Claim (if and to the extent adjudicated by a court of competent jurisdiction), then immediately upon such Insurers’ agreement, the applicable portion of such Claim may be expunged without a Claims objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court.

Applicability of Insurance Policies

Except as otherwise provided in the Plan, distributions to Holders of Allowed Claims shall be in accordance with the provisions of any applicable insurance policy. Nothing contained in the Plan shall constitute or be deemed a waiver of any Cause of Action that the Debtors or any Entity may hold against any other Entity, including Insurers under any policies of insurance, nor shall anything contained herein constitute or be deemed a waiver by such Insurers of any defenses, including coverage defenses, held by such Insurers.

Conditions Precedent to the Effective Date

It shall be a condition to the Effective Date that the following conditions shall have been satisfied or waived pursuant to the provisions of Article IX.B of the Plan:

the Bankruptcy Court shall have entered the Confirmation Order, in form and substance acceptable to the Debtors and the Plan Sponsor, which shall be a Final Order;

all actions, documents, and agreements necessary to implement and consummate the Plan shall have been effected and executed (or deemed executed) and shall remain in full force and effect;

all requisite filings with governmental authorities and third parties shall have become effective, and all such governmental authorities and third parties shall have approved or consented to the Restructuring Transactions, to the extent required;

all fees and expenses of retained professionals that require the Bankruptcy Court’s approval shall have been paid in full or amounts sufficient to pay such fees and expenses after the Effective Date shall have been placed in the Professional Escrow Account pending the Bankruptcy Court’s approval of such fees and expenses;

the Direct Investment Documents shall have been executed, shall be in full force and effect in accordance with their terms, and the conditions precedent contained therein shall have been satisfied;

the Debtors shall consummate the Direct Investment Preferred Equity Raise;

no court of competent jurisdiction or other competent governmental or regulatory authority shall have issued a final and non-appealable order making illegal or otherwise restricting, preventing or prohibiting the consummation of the Plan; and

the Debtors shall have implemented the Restructuring Transactions and all transactions contemplated in the Plan in a manner consistent with the terms thereof and the Confirmation Order.

Waiver of Conditions

Any one or more of the conditions to Consummation set forth in Article IX of the Plan may be waived (other than entry of the Confirmation Order) by the Debtors with the prior written consent (e-mail from counsel being sufficient) of the Plan Sponsor without notice, leave, or order of the Bankruptcy Court or any formal action other than proceedings to confirm or consummate the Plan.

Effect of Failure of Conditions

If Consummation does not occur, the Plan shall be null and void in all respects, and nothing contained in the Plan or the Disclosure Statement shall: (1) constitute a waiver or release of any Claims by the Debtors, or any Holders of Claims against or Interests in the Debtors; (2) prejudice in any manner the rights of the Debtors, any Holders of Claims against or Interests in the Debtors, or any other Entity; or (3) constitute an admission, acknowledgment, offer, or undertaking by the Debtors, any Holders of Claims or Interests, or any other Entity.

Substantial Consummation

“Substantial Consummation” of the Plan, as defined in 11 U.S.C. § 1101(2), shall be deemed to occur on the Effective Date.

Modification, Revocation, or Withdrawal of the Plan

Modification and Amendments

Except as otherwise specifically provided in the Plan, the Debtors reserve the right to modify the Plan, with the consent of the Plan Sponsor, whether such modification is material or immaterial, and seek Confirmation consistent with the Bankruptcy Code and, as appropriate, not resolicit votes on such modified Plan. Subject to those restrictions on modifications set forth in the Plan and the requirements of section 1127 of the Bankruptcy Code, Bankruptcy Rule 3019, and, to the extent applicable, sections 1122, 1123, and 1125 of the Bankruptcy Code, each of the Debtors expressly reserves its respective rights to revoke or withdraw, or to alter, amend, or modify the Plan, one or more times, after Confirmation, and, to the extent necessary may initiate proceedings in the Bankruptcy Court to so alter, amend, or modify the Plan, or remedy any defect or omission, or reconcile any inconsistencies in the Plan, the Disclosure Statement, or the Confirmation Order, in such matters as may be necessary to carry out the purposes and intent of the Plan.

Effect of Confirmation on Modifications

Entry of the Confirmation Order shall mean that all modifications or amendments to the Plan since the solicitation thereof are approved pursuant to section 1127(a) of the Bankruptcy Code and shall constitute a finding that such modifications or amendments to the Plan do not require additional disclosure or resolicitation under Bankruptcy Rule 3019.

Revocation or Withdrawal of Plan

The Debtors reserve the right, with the consent of the Plan Sponsor, to revoke or withdraw the Plan prior to the Confirmation Date and to File subsequent plans of reorganization. If the Debtors revoke or withdraw the Plan, or if Confirmation or Consummation does not occur, then: (1) the Plan shall be null and void in all respects; (2) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain, and including the allowance or disallowance, of all or any portion of any Claim or Interest or Class of Claims or Interests), assumption or rejection (to the extent applicable) of Executory Contracts or Unexpired Leases effected under the Plan, and any document or agreement executed pursuant to the Plan, shall be deemed null and void; and (3) nothing contained in the Plan shall: (a) constitute a waiver or release of any Claims or Interests; (b) prejudice in any manner the rights of such Debtor or any other Entity; or (c) constitute an admission, acknowledgement, offer, or undertaking of any sort by such Debtor or any other Entity.

IX.

RISK FACTORS

BEFORE TAKING ANY ACTION WITH RESPECT TO THE PLAN, HOLDERS OF CLAIMS AGAINST THE DEBTORS WHO ARE ENTITLED TO VOTE TO ACCEPT OR REJECT THE PLAN SHOULD READ AND CONSIDER CAREFULLY THE RISK FACTORS SET FORTH BELOW, AS WELL AS THE OTHER INFORMATION SET FORTH IN THIS DISCLOSURE STATEMENT, THE PLAN, AND THE DOCUMENTS DELIVERED TOGETHER HEREWITH, REFERRED TO, OR INCORPORATED BY REFERENCE INTO THIS DISCLOSURE STATEMENT, INCLUDING OTHER DOCUMENTS FILED WITH THE BANKRUPTCY COURT IN THE CHAPTER 11 CASES. THE RISK FACTORS SHOULD NOT BE REGARDED AS CONSTITUTING THE ONLY RISKS PRESENT IN CONNECTION WITH THE DEBTORS’ BUSINESSES OR THE RESTRUCTURING AND CONSUMMATION OF THE PLAN. EACH OF THE RISK FACTORS DISCUSSED IN THIS DISCLOSURE STATEMENT MAY APPLY EQUALLY TO THE DEBTORS AND THE REORGANIZED DEBTORS, AS APPLICABLE AND AS CONTEXT REQUIRES.

Bankruptcy Law Considerations

The occurrence or non-occurrence of any or all of the following contingencies, and any others, could affect distributions available to Holders of Allowed Claims under the Plan but will not necessarily affect the validity of the vote of the Impaired Classes to accept or reject the Plan or necessarily require a re-solicitation of the votes of Holders of Claims in such Impaired Classes.

The Debtors Will Consider All Available Restructuring Alternatives if the Restructuring Transactions are Not Implemented, and Such Alternatives May Result in Lower Recoveries for Holders of Claims Against and Interests in the Debtors

If the Restructuring Transactions are not implemented, the Debtors will consider all available restructuring alternatives, including filing an alternative chapter 11 plan, converting the Chapter 11 Cases to chapter 7 cases, commencing section 363 sales of the Debtors’ assets, and any other transaction that would maximize the value of the Debtors’ estates. The terms of any alternative restructuring proposal may be less favorable to the Debtors’ stakeholders than the terms of the Plan as described in this Disclosure Statement.

Any material delay in the confirmation of the Plan, the Chapter 11 Cases, or the threat of rejection of the Plan by the Bankruptcy Court, would add substantial expense and uncertainty to the process.

The uncertainty surrounding a prolonged restructuring would have other adverse effects on the Debtors. For example, it would adversely affect:

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the Debtors’ ability to raise additional capital;

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the Debtors’ liquidity;

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how the Debtors’ business is viewed by regulators, investors, lenders, and credit ratings agencies;

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the Debtors’ enterprise value; and

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the Debtors’ business relationship with customers and vendors.

Parties in Interest May Object to the Plan’s Classification of Claims and Interests

Section 1122 of the Bankruptcy Code provides that a plan may place a claim or an equity interest in a particular class only if such claim or equity interest is substantially similar to the other claims or equity interests in such class. The Debtors believe that the classification of the Claims and Interests under the Plan complies with the requirements set forth in the Bankruptcy Code because the Debtors created Classes of Claims and Interests each encompassing Claims or Interests, as applicable, that are substantially similar to the other Claims or Interests, as applicable, in each such Class. Nevertheless, there can be no assurance that the Bankruptcy Court will reach the same conclusion.

Even if the Restructuring Transactions are Successful, the Debtors Will Continue to Face Risks.

The Restructuring Transactions are generally designed to improve the Debtors’ liquidity and provide the Debtors’ greater flexibility to generate long-term growth. Even if the Restructuring Transactions are implemented, the Debtors will continue to face a number of risks, including certain risks that are beyond the Debtors’ control, such as changes in economic conditions and changes in the Debtors’ industry. As a result of these risks, there is no guarantee that the Restructuring Transactions will achieve the Debtors’ stated goals.

The Bankruptcy Court May Not Approve the Debtors’ Use of Cash Collateral and/or the DIP Facility

Upon commencing the Chapter 11 Cases, the Debtors will ask the Bankruptcy Court to authorize the Debtors to enter into postpetition financing arrangements and/or use cash collateral to fund the Chapter 11 Cases and to provide customary adequate protection to the DIP Lenders. Such access to postpetition financing and/or cash collateral will provide liquidity during the pendency of the Chapter 11 Cases. There can be no assurance that the Bankruptcy Court will approve the DIP Facility and/or such use of cash collateral on the terms requested. Moreover, if the Chapter 11 Cases take longer than expected to conclude, the Debtors may exhaust their available cash collateral and postpetition financing. There is no assurance that the Debtors will be able to obtain an extension of the right to obtain further postpetition financing and/or use cash collateral, in which case, the liquidity necessary for the orderly functioning of the Debtors’ businesses may be impaired materially.

The Terms of the DIP Facility Documents Are Subject to Change Based on Negotiation and the Approval of the Bankruptcy Court

The terms of the DIP Facility Documents have not been finalized and are subject to change based on negotiations between the Debtors and the DIP Lenders.

The Conditions Precedent to the Effective Date of the Plan May Not Occur

As more fully set forth in Article VIII of the Plan, the Confirmation and Effective Date of the Plan are subject to a number of conditions precedent. If such conditions precedent are not waived or not met, the Confirmation and Effective Date of the Plan will not take place. In the event that the Effective Date does not occur, the Debtors may seek Confirmation of a new plan or pursue alternative transactions. If the Debtors do not secure sufficient working capital to continue their operations of if the new plan is not confirmed, however, the Debtors may be forced to liquidate their assets.

The Debtors May Fail to Satisfy Vote Requirements

If votes are received in number and amount sufficient to enable the Bankruptcy Court to confirm the Plan, the Debtors intend to seek, as promptly as practicable thereafter, Confirmation of the Plan. In the event that sufficient votes are not received, the Debtors will pursue the Sale Transaction. There can be no assurance that the terms of any alternative transaction would be similar or as favorable to the Holders of Interests and Allowed Claims as those proposed in the Plan.

The Debtors May Not Be Able to Secure Confirmation of the Plan

Section 1129 of the Bankruptcy Code sets forth the requirements for confirmation of a chapter 11 plan, and requires, among other things, a finding by the Bankruptcy Court that: (a) such plan “does not unfairly discriminate” and is “fair and equitable” with respect to any non-accepting classes; (b) confirmation of such plan is not likely to be followed by a liquidation or a need for further financial reorganization unless such liquidation or reorganization is contemplated by the plan; and (c) the value of distributions to non-accepting holders of claims or equity interests within a particular class under such plan will not be less than the value of distributions such holders would receive if the debtors were liquidated under chapter 7 of the Bankruptcy Code.

There can be no assurance that the requisite acceptances to confirm the Plan will be received. Even if the requisite acceptances are received, there can be no assurance that the Bankruptcy Court will confirm the Plan. A non-accepting Holder of an Allowed Claim might challenge either the adequacy of this Disclosure Statement or whether the balloting procedures and voting results satisfy the requirements of the Bankruptcy Code or Bankruptcy Rules. Even if the Bankruptcy Court determines that this Disclosure Statement, the balloting procedures, and voting results are appropriate, the Bankruptcy Court could still decline to confirm the Plan if it finds that any of the statutory requirements for Confirmation are not met. If the Plan is not confirmed on or prior to the deadline set forth in the Credit Agreement, the Debtors will pursue the Sale Transaction.

The Debtors, subject to the terms and conditions of the Plan, reserve the right to modify the terms and conditions of the Plan as necessary for Confirmation. Any such modifications could result in less favorable treatment of any non-accepting class of Claims or Interests, as well as any class junior to such non-accepting class, than the treatment currently provided in the Plan. Such a less favorable treatment could include a distribution of property with a lesser value than currently provided in the Plan or no distribution whatsoever under the Plan.

The Debtors May Not Be Able to Secure Nonconsensual Confirmation Over Certain Impaired Non-Accepting Classes

In the event that any impaired class of claims or interests does not accept a chapter 11 plan, a bankruptcy court may nevertheless confirm a plan at the proponents’ request if at least one impaired class (as defined under section 1124 of the Bankruptcy Code) has accepted the plan (with such acceptance being determined without including the vote of any “insider” in such class), and, as to each impaired class that has not accepted the plan, the bankruptcy court determines that the plan “does not discriminate unfairly” and is “fair and equitable” with respect to the dissenting impaired class(es). The Debtors believe that the Plan satisfies these requirements, and the Debtors may request such nonconsensual Confirmation in accordance with subsection 1129(b) of the Bankruptcy Code. Nevertheless, there can be no assurance that the Bankruptcy Court will reach this conclusion. In addition, the pursuit of nonconsensual Confirmation or Consummation of the Plan may result in, among other things, increased expenses relating to professional compensation.

10.

Even if the Restructuring Transactions are Successful, the Debtors Will Face Continued Risk Upon Confirmation

Even if the Plan is consummated, the Debtors will continue to face a number of risks, including certain risks that are beyond their control, such as further deterioration or other changes in economic conditions, changes in the industry, potential revaluing of their assets due to chapter 11 proceedings, and increasing expenses. Some of these concerns and effects typically become more acute when a case under the Bankruptcy Code continues for a protracted period without indication of how or when the case may be completed. As a result of these risks and others, there is no guarantee that a chapter 11 plan of reorganization reflecting the Plan will achieve the Debtors’ stated goals.

In addition, at the outset of the Chapter 11 Cases, the Bankruptcy Code provides the Debtors with the exclusive right to propose the Plan and prohibits creditors and others from proposing a plan. The Debtors will have retained the exclusive right to propose the Plan upon filing their Petitions. If the Bankruptcy Court terminates that right, however, or the exclusivity period expires, there could be a material adverse effect on the Debtors’ ability to achieve confirmation of the Plan in order to achieve the Debtors’ stated goals.

Furthermore, even if the Debtors’ debts are reduced and/or discharged through the Plan, the Debtors may need to raise additional funds through public or private debt or equity financing or other various means to fund the Debtors’ businesses after the completion of the proceedings related to the Chapter 11 Cases. Adequate funds may not be available when needed or may not be available on favorable terms.

11.

The Bankruptcy Court May Find the Solicitation of Acceptances Inadequate

Usually, votes to accept or reject a plan of reorganization are solicited after the filing of a petition commencing a chapter 11 case. Nevertheless, a debtor may solicit votes prior to the commencement of a chapter 11 case in accordance with sections 1125(g) and 1126(b) of the Bankruptcy Code and Bankruptcy Rule 3018(b). Sections 1125(g) and 1126(b) and Bankruptcy Rule 3018(b) require that:

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solicitation be compliant with applicable nonbankruptcy law;

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the plan of reorganization be transmitted to substantially all creditors and other interest holders entitled to vote; and

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the time prescribed for voting not be unreasonably short.

In addition, Bankruptcy Rule 3018(b) provides that a holder of a claim or interest who has accepted or rejected a plan before the commencement of the case under the Bankruptcy Code will not be deemed to have accepted or rejected the plan if the court finds after notice and a hearing that the plan was not transmitted in accordance with reasonable solicitation procedures. Section 1126(b) of the Bankruptcy Code provides that a holder of a claim or interest that has accepted or rejected a plan before the commencement of a case under the Bankruptcy Code is deemed to have accepted or rejected the plan if (i) the solicitation of such acceptance or rejection was in compliance with applicable nonbankruptcy law, rule, or regulation governing the adequacy of disclosure in connection with such solicitation or (ii) there is no such law, rule, or regulation, and such acceptance or rejection was solicited after disclosure to such holder of adequate information (as defined by section 1125(a) of the Bankruptcy Code). While the Debtors believe that the requirements of sections 1125(g) and 1126(b) of the Bankruptcy Code and Bankruptcy Rule 3018(b) will be met, there can be no assurance that the Bankruptcy Court will reach the same conclusion.

12.

The Chapter 11 Cases May Be Converted to Cases under Chapter 7 of the Bankruptcy Code

If the Bankruptcy Court finds that it would be in the best interest of creditors and/or the debtor in a chapter 11 case, the Bankruptcy Court may convert a chapter 11 bankruptcy case to a case under chapter 7 of the Bankruptcy Code. In such event, a chapter 7 trustee would be appointed or elected to liquidate the debtor’s assets for distribution in accordance with the priorities established by the Bankruptcy Code. The Debtors believe that liquidation under chapter 7 would result in significantly smaller distributions being made to creditors than those provided for in a chapter 11 plan because of (a) the likelihood that the assets would have to be sold or otherwise disposed of in a disorderly fashion over a short period of time, rather than reorganizing or selling the business as a going concern at a later time in a controlled manner, (b) additional administrative expenses involved in the appointment of a chapter 7 trustee, and (c) additional expenses and Claims, some of which would be entitled to priority, that would be generated during the liquidation, including Claims resulting from the rejection of Unexpired Leases and other Executory Contracts in connection with cessation of operations.

13.

The Debtors May Object to the Amount or Classification of a Claim

Except as otherwise provided in the Plan, the Debtors reserve the right to object to the amount or classification of any Claim under the Plan, subject to the terms of the Restructuring Support Agreement. The estimates set forth in this Disclosure Statement cannot be relied upon by any Holder of a Claim where such Claim is subject to an objection. Any Holder of a Claim that is subject to an objection thus may not receive its expected share of the estimated distributions described in this Disclosure Statement.

14.

Risk of Non-Occurrence of the Effective Date

Although the Debtors believe that the Effective Date may occur quickly after the Confirmation Date, there can be no assurance as to such timing or as to whether the Effective Date will, in fact, occur.

15.

Contingencies Could Affect Votes of Impaired Classes to Accept or Reject the Plan

The distributions available to Holders of Allowed Claims under the Plan can be affected by a variety of contingencies, including, without limitation, whether the Bankruptcy Court orders certain Allowed Claims to be subordinated to other Allowed Claims. The occurrence of any and all such contingencies, which could affect distributions available to Holders of Allowed Claims under the Plan, will not affect the validity of the vote taken by the Impaired Class to accept or reject the Plan or require any sort of revote by the Impaired Class.

The estimated Claims and creditor recoveries set forth in this Disclosure Statement are based on various assumptions, and the actual Allowed amounts of Claims may significantly differ from the estimates. Should one or more of the underlying assumptions ultimately prove to be incorrect, the actual Allowed amounts of Claims may vary from the estimated Claims contained in this Disclosure Statement. Moreover, the Debtors cannot determine with any certainty at this time, the number or amount of Claims that will ultimately be Allowed.

16.

Releases, Injunctions, and Exculpations Provisions May Not Be Approved

Article VIII of the Plan provides for certain releases, injunctions, and exculpations, including a release of liens and third-party releases that may otherwise be asserted against the Debtors, Reorganized Debtors, or Released Parties, as applicable. The releases, injunctions, and exculpations provided in the Plan are subject to objection by parties in interest and may not be approved. If the releases are not approved, certain Released Parties may withdraw their support for the Plan.

The releases provided to the Released Parties and the exculpation provided to the Exculpated Parties is necessary to the success of the Debtors’ reorganization because the Released Parties and Exculpated Parties have made significant contributions to the Debtors’ reorganizational efforts and have agreed to make further contributions, but only if they receive the full benefit of the Plan’s release and exculpation provisions.

Risks Related to Recoveries Under the Plan

The Reorganized Debtors May Not Be Able to Achieve Their Projected Financial Results

The Reorganized Debtors may not be able to achieve their projected financial results. The Financial Projections set forth in this Disclosure Statement represent the Debtors’ management team’s best estimate of the Debtors’ future financial performance, which is necessarily based on certain assumptions regarding the anticipated future performance of the Reorganized Debtors’ operations, as well as the United States economy in general, and the industry segments in which the Debtors operate in particular. While the Debtors believe that the Financial Projections contained in this Disclosure Statement are reasonable, there can be no assurance that they will be realized. Moreover, the financial condition and results of operations of the Reorganized Debtors from and after the Effective Date may not be comparable to the financial condition or results of operations reflected in the Debtors’ historical financial statements.

Estimated Valuations of the Debtors, the New Preferred Stock, the New Common Stock, and Estimated Recoveries to Holders of Allowed Claims and Interests Are Not Intended to Represent Potential Market Values

The estimated recoveries are based on numerous assumptions (the realization of many of which will be beyond the control of the Debtors), including: (a) the successful reorganization of the Debtors; (b) an assumed date for the occurrence of the Effective Date; (c) the Debtors’ ability to maintain adequate liquidity to fund operations; and (d) the Debtors’ ability to maintain and develop critical vendor relationships. Accordingly, the estimated recoveries do not necessarily reflect, and should not be construed as reflecting, values that may be attained for the Debtors’ Securities in the public or private markets.

The Reorganized Debtors May Be Forced to Take Other Actions to Satisfy their Obligations

The Reorganized Debtors’ ability to make scheduled payments on their debt obligations depends on their financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business, and other factors beyond the Reorganized Debtors’ control.

If cash flows and capital resources are insufficient to fund the Reorganized Debtors’ debt obligations, they could face liquidity issues and there may be a need to reduce or delay investments and capital expenditures, or to dispose of assets or operations, or seek additional capital. These alternative measures may not be successful, may not be completed on economically attractive terms, or may not be adequate to satisfy their debt obligations when due.

Certain Tax Implications of the Plan May Increase the Tax Liability of the Reorganized Debtors

Holders of Allowed Claims should carefully review Article XIII of this Disclosure Statement, entitled “Certain United States Federal Income Tax Consequences of the Plan,” to determine how the tax implications of the Plan and the Chapter 11 Cases may adversely affect the Reorganized Debtors and holders of certain Claims.

Risks Relating to the New Preferred Stock and New Common Stock Issued Under the Plan

Potential Dilution

The ownership percentage represented by the New Common Stock distributed on the Effective Date under the Plan is subject to dilution from the New Common Stock issued that may, at the election of the New Board, be issued pursuant to the Management Incentive Plan and any other shares that may be issued post-emergence.

In the future, as is the case for all companies, additional equity financings or other share issuances by any of the Reorganized Debtors could adversely affect the value of the New Common Stock issuable upon such conversion. The amount and dilutive effect of any of the foregoing could be material.

Equity Interests Subordinated to Reorganized Debtors’ Indebtedness

In any subsequent liquidation, dissolution, or winding up of the Reorganized Debtors, the New Preferred Stock and New Common Stock would rank below all debt claims against the Reorganized Debtors. As a result, holders of the New Preferred Stock New Common Stock will not be entitled to receive any payment or other distribution of assets upon the liquidation, dissolution, or winding up of the Reorganized Debtors until after all the Reorganized Debtors’ obligations to their debtholders have been satisfied.

Implied Valuation of New Common Stock Not Intended to Represent Trading Value of New Common Stock

The valuation of the Reorganized Debtors is not intended to represent the trading value of New Common Stock in public or private markets and is subject to additional uncertainties and contingencies, all of which are difficult to predict. Actual market prices of such securities at issuance will depend upon, among other things: (a) prevailing interest rates; (b) conditions in the financial markets; (c) anticipated initial securities of creditors receiving New Common Stock under the Plan, some of which may prefer to liquidate their investment rather than hold it on a long-term basis; and (d) other factors that generally influence the prices of securities. The actual market price of the New Common Stock is likely to be volatile. Many factors, including factors unrelated to the Reorganized Debtors’ actual operating performance and other factors not possible to predict, could cause the market price of the New Common Stock to rise and fall. Accordingly, the implied value, stated herein and in the Plan, of the securities to be issued does not necessarily reflect, and should not be construed as reflecting, values that will be attained for the New Common Stock in the public or private markets.

Risks Related to the Debtors’ and the Reorganized Debtors’ Businesses

The Debtors Will Be Subject to the Risks and Uncertainties Associated with the Chapter 11 Cases

For the duration of the Chapter 11 Cases, the Debtors’ ability to operate, develop, and execute a business plan, and continue as a going concern, will be subject to the risks and uncertainties associated with bankruptcy. These risks include the following: (a) ability to develop, confirm, and consummate the Restructuring Transactions specified in the Plan; (b) ability to obtain Bankruptcy Court approval with respect to motions filed in the Chapter 11 Cases from time to time; (c) ability to maintain relationships with suppliers, vendors, service providers, customers, employees, and other third parties; (d) ability to maintain contracts that are critical to the Debtors’ operations; (e) ability of third parties to seek and obtain Bankruptcy Court approval to terminate contracts and other agreements with the Debtors; (f) ability of third parties to seek and obtain Bankruptcy Court approval to terminate or shorten the exclusivity period for the Debtors to propose and confirm a chapter 11 plan, to appoint a chapter 11 trustee, or to convert the Chapter 11 Cases to chapter 7 proceedings; and (g) the actions and decisions of the Debtors’ creditors and other third parties who have interests in the Chapter 11 Cases that may be inconsistent with the Debtors’ plans.

These risks and uncertainties could affect the Debtors’ businesses and operations in various ways. For example, negative events associated with the Chapter 11 Cases could adversely affect the Debtors’ relationships with suppliers, service providers, customers, employees, and other third parties, which in turn could adversely affect the Debtors’ operations and financial condition. Also, the Debtors will need the prior approval of the Bankruptcy Court for transactions outside the ordinary course of business, which may limit the Debtors’ ability to respond timely to certain events or take advantage of certain opportunities. Because of the risks and uncertainties associated with the Chapter 11 Cases, the Debtors cannot accurately predict or quantify the ultimate impact of events that occur during the Chapter 11 Cases that may be inconsistent with the Debtors’ plans.

Operating in Bankruptcy for an Extended Period May Harm the Debtors’ Businesses

The Debtors’ future results will depend upon the successful confirmation and implementation of a plan of reorganization. A long period of operations under Bankruptcy Court protection could have a material adverse effect on the Debtors’ businesses, financial condition, results of operations, and liquidity. So long as the proceedings related to the Chapter 11 Cases continue, senior management will be required to spend a significant amount of time and effort dealing with the reorganization instead of focusing exclusively on business operations. A prolonged period of operating under Bankruptcy Court protection also may make it more difficult to retain management and other key personnel necessary to the success and growth of the Debtors’ businesses. In addition, the longer the proceedings related to the Chapter 11 Cases continue, the more likely it is that customers and suppliers will lose confidence in the Debtors’ ability to reorganize their businesses successfully and will seek to establish alternative commercial relationships.

So long as the proceedings related to the Chapter 11 Cases continue, the Debtors will be required to incur substantial costs for professional fees and other expenses associated with the administration of the Chapter 11 Cases. The chapter 11 proceedings also require the Debtors to seek debtor-in-possession financing to fund operations. If the Debtors are unable to obtain final approval of such financing on favorable terms or at all, or if the Debtors are unable to fully draw on the availability under the DIP Facility, the chances of successfully reorganizing the Debtors’ businesses may be seriously jeopardized, the likelihood that the Debtors will instead be required to liquidate or sell their assets may be increased, and, as a result, creditor recoveries may be significantly impaired.

Furthermore, the Debtors cannot predict the ultimate amount of all settlement terms for the liabilities that will be subject to a plan of reorganization. Even after a plan of reorganization is approved and implemented, the Reorganized Debtors’ operating results may be adversely affected by the possible reluctance of prospective lenders and other counterparties to do business with a company that recently emerged from bankruptcy protection.

The Debtors May Not Be Able to Achieve Their Financial Results or Meet Their Post-Restructuring Debt Obligations.

Certain of the information contained herein is, by nature, forward-looking, and contains estimates and assumptions, which might ultimately prove to be incorrect, and projections, which may be materially different from actual future experiences. Many of the assumptions underlying the projections are subject to significant uncertainties that are beyond the control of the Debtors or Reorganized Debtors, including the timing, confirmation, and consummation of the Plan, the Reorganized Debtors’ future revenues, inflation, and other unanticipated market and economic conditions. There are uncertainties associated with any projections and estimates, and they should not be considered assurances or guarantees of the amount of funds or the amount of Claims in the various Classes that might be Allowed. Some assumptions may not materialize, and unanticipated events and circumstances may affect the actual results.

The Financial Projections, attached hereto as Exhibit C, represent the best estimate of the Debtors’ management of the future financial performance of the Debtors or the Reorganized Debtors, as applicable, based on currently known facts and assumptions about future operations of the Debtors or the Reorganized Debtors, as applicable, as well as the U.S. and world economy in general and the relevant industries in which the Company operates. The Financial Projections are inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic, and competitive risks, and the assumptions underlying the projections may be inaccurate in material respects. In addition, unanticipated events and circumstances occurring after the approval of this Disclosure Statement by the Bankruptcy Court including any natural disasters, terrorist attacks, or health epidemics and/or pandemics may affect the actual financial results achieved. There is no guarantee that the Financial Projections will be realized, and actual financial results may differ significantly from the Financial Projections.

To the extent the Reorganized Debtors do not meet their projected financial results or achieve projected revenues and cash flows, the Reorganized Debtors may lack sufficient liquidity to continue operating as planned after the Effective Date, may be unable to service their debt obligations as they come due, or may not be able to meet their operational needs.

The Reorganized Debtors May Be Adversely Affected by Potential Litigation, Including Litigation Arising Out of the Chapter 11 Cases

In the future, the Reorganized Debtors may become parties to litigation. In general, litigation can be expensive and time consuming to bring or defend against. Such litigation could result in settlements or damages that could significantly affect the Reorganized Debtors’ financial results. It is also possible that certain parties will commence litigation with respect to the treatment of their Claims under the Plan. It is not possible to predict the potential litigation that the Reorganized Debtors may become party to, nor the final resolution of such litigation. The impact of any such litigation on the Reorganized Debtors’ businesses and financial stability, however, could be material.

The Loss of Key Personnel Could Adversely Affect the Debtors’ Operations

The Debtors’ operations are dependent on a relatively small group of key management personnel and a highly skilled employee base. The Debtors’ recent liquidity issues and the Chapter 11 Cases have created distractions and uncertainty for key management personnel and employees. Because competition for experienced personnel can be significant, the Debtors may be unable to find acceptable replacements with comparable skills if they experience and the loss of such key management personnel, which could adversely affect the Debtors’ ability to operate their businesses. In addition, a loss of key personnel or material erosion of employee morale could have a material adverse effect on the Debtors’ ability to meet expectations, thereby adversely affecting the Debtors’ businesses and the results of operations.

SOLICITATION AND VOTING PROCEDURES

This Disclosure Statement, which is accompanied by a ballot (the “Ballot”) to be used for voting on the Plan, is being distributed to the Holders of Claims in the Class that is entitled to vote to accept or reject the Plan.

Holders of Claims Entitled to Vote on the Plan

The Debtors are soliciting votes to accept or reject the Plan only from holders of Claims in Class 4 (the “Voting Class”). The Holders of Claims in the Voting Class are Impaired under the Plan and may, in certain circumstances, receive a distribution under the Plan. Accordingly, Holders of Claims in the Voting Class have the right to vote to accept or reject the Plan. The Debtors are not soliciting votes from Holders of Claims or Interests in Classes 1, 2, 3, 5, 8, 9, 10 and 11.

Votes Required for Acceptance by a Class

Under the Bankruptcy Code, acceptance of a plan of reorganization by a class of claims or interests is determined by calculating the amount and, if a class of claims, the number, of claims and interests voting to accept, as a percentage of the allowed claims or interests, as applicable, that have voted. Acceptance by a class of claims requires an affirmative vote of more than one-half in number of total allowed claims that have voted and an affirmative vote of at least two-thirds in dollar amount of the total allowed claims that have voted. Acceptance by a class of interests requires an affirmative vote of at least two-thirds in amount of the total allowed interests that have voted.

Certain Factors to Be Considered Prior to Voting

There are a variety of factors that all Holders of Claims entitled to vote on the Plan should consider prior to voting to accept or reject the Plan. These factors may impact recoveries under the Plan and include, among other things:

●

unless otherwise specifically indicated, the financial information contained in this Disclosure Statement has not been audited and is based on an analysis of data available at the time of the preparation of the Plan and this Disclosure Statement;

●

although the Debtors believe that the Plan complies with all applicable provisions of the Bankruptcy Code, the Debtors can neither assure such compliance nor that the Bankruptcy Court will confirm the Plan;

●

the Debtors may request Confirmation without the acceptance of the Plan by all Impaired Classes in accordance with section 1129(b) of the Bankruptcy Code; and

●

any delays of either Confirmation or Consummation could result in, among other things, increased Administrative Expense Claims and Professional Fee Claims.

While these factors could affect distributions available to Holders of Allowed Claims and Allowed Interests under the Plan, the occurrence or impact of such factors may not necessarily affect the validity of the vote of the Voting Classes or necessarily require a re-solicitation of the votes of Holders of Claims in the Voting Classes pursuant to section 1127 of the Bankruptcy Code.

For a further discussion of risk factors, please refer to “Risk Factors” described in Article IX of this Disclosure Statement.

Solicitation Procedures

Notice and Claims Agent

The Debtors have retained Kroll Restructuring Administration to act as, among other things, the Solicitation Agent in connection with the solicitation of votes to accept or reject the Plan.

Solicitation Package

The following materials constitute the solicitation package distributed to Holders of Claims in the Voting Classes (collectively, the “Solicitation Package”):

(a)

cover letter in support of the Plan;

(b)

the appropriate Ballot and applicable voting instructions, together with a pre-addressed, postage pre-paid return envelope; and

(c)

this Disclosure Statement and all exhibits hereto, including the Plan and all exhibits thereto (which may be distributed in paper or USB-flash drive format).

Distribution of the Solicitation Package and Plan Supplement

December 8, 2023 (the “Voting Record Date”) is the date that was used for determining which Holders of Claims are entitled to vote to accept or reject the Plan and receive the Solicitation Package in accordance with the solicitation procedures. Except as otherwise set forth herein, the Voting Record Date and all of the Debtors’ solicitation and voting procedures shall apply to all of the Debtors’ creditors and other parties in interest.

The Debtors will cause the Notice and Claims Agent to distribute the Solicitation Package to Holders of Claims in the Voting Classes on December 20, 2023, which is nineteen (19) days before the Voting Deadline (i.e., 4:00 p.m. (Eastern Standard Time) on January 8, 2024).

The Solicitation Package (except the Ballot) may also be obtained from the Notice and Claims Agent by: (a) calling the Debtors’ restructuring hotline at (844) 610-4783 (domestic toll-free) or (646) 777-2312 (local/international toll), (b) emailing partsidballots@ra.kroll.com, and/or (c) writing to the Notice and Claims Agent at PARTS iD Ballot Processing, c/o Kroll Restructuring Administration, 850 Third Avenue, Suite 412, Brooklyn, NY 11232. After the Debtors file the Chapter 11 Cases, you may also obtain copies of any pleadings filed with the Bankruptcy Court for free by visiting the Debtors’ restructuring website, https://restructuring.ra.kroll.com/partsidballots, or for a fee via PACER at https://www.pacer.gov/.

The Debtors shall file the Plan Supplement, to the extent reasonably practicable, with the Bankruptcy Court no later than seven (7) days before the Confirmation Hearing. If the Plan Supplement is updated or otherwise modified, such modified or updated documents will be made available on the Debtors’ restructuring website.

XI.

CONFIRMATION OF THE PLAN

The Confirmation Hearing

Under section 1128(a) of the Bankruptcy Code, the Bankruptcy Court, after notice, may hold a hearing to confirm a plan of reorganization. The Debtors will request, on the Petition Date, that the Bankruptcy Court set a hearing to approve the Plan and Disclosure Statement. The Confirmation Hearing may, however, be continued or adjourned from time to time without further notice to parties in interest other than an adjournment announced in open court or a notice of adjournment filed with the Bankruptcy Court and served in accordance with the Bankruptcy Rules. Subject to section 1127 of the Bankruptcy Code and the Restructuring Support Agreement, the Plan may be modified, if necessary, prior to, during, or as a result of the Confirmation Hearing, without further notice to parties in interest.

Additionally, section 1128(b) of the Bankruptcy Code provides that a party in interest may object to Confirmation. The Debtors, in the same motion requesting a date for the Confirmation Hearing, will request that the Bankruptcy Court set a date and time for parties in interest to file objections to Confirmation of the Plan. An objection to Confirmation of the Plan must be filed with the Bankruptcy Court and served on the Debtors and certain other parties in interest in accordance with the applicable order of the Bankruptcy Court so that it is actually received on or before the deadline to file such objections as set forth therein.

Requirements for Confirmation of the Plan

Among the requirements for Confirmation of the Plan pursuant to section 1129 of the Bankruptcy Code are: (1) the Plan is accepted by all Impaired Classes of Claims or Interests, or if rejected by an Impaired Class, the Plan “does not discriminate unfairly” and is “fair and equitable” as to the rejecting Impaired Class; (2) the Plan is feasible; and (3) the Plan is in the “best interests” of holders of Claims or Interests.

At the Confirmation Hearing, the Bankruptcy Court will determine whether the Plan satisfies all of the requirements of section 1129 of the Bankruptcy Code. The Debtors believe: (1) the Plan satisfies, or will satisfy, all of the necessary statutory requirements of chapter 11 for plan confirmation; (2) the Debtors have complied, or will have complied, with all of the necessary requirements of chapter 11 for plan confirmation; and (3) the Plan has been proposed in good faith.

Feasibility

Section 1129(a)(11) of the Bankruptcy Code requires that confirmation of a plan of reorganization is not likely to be followed by the liquidation, or the need for further financial reorganization of the debtor, or any successor to the debtor (unless such liquidation or reorganization is proposed in such plan of reorganization).

To determine whether the Plan meets this feasibility requirement, the Debtors, with the assistance of their advisors, have analyzed their ability to meet their respective obligations under the Plan. As part of this analysis, the Debtors have prepared their projected consolidated balance sheet, income statement, and statement of cash flows (the “Financial Projections”). Creditors and other interested parties should review Article IX of this Disclosure Statement, entitled “Risk Factors,” for a discussion of certain factors that may affect the future financial performance of the Reorganized Debtors.

The Financial Projections are attached hereto as Exhibit C and incorporated herein by reference. Based upon the Financial Projections, the Debtors believe that they will be a viable operation following the Chapter 11 Cases and that the Plan will meet the feasibility requirements of the Bankruptcy Code.

Acceptance by Impaired Classes

The Bankruptcy Code requires, as a condition to confirmation, except as described in the following section, that each class of claims or equity interests impaired under a plan, accept the plan. A class that is not “impaired” under a plan is deemed to have accepted the plan and, therefore, solicitation of acceptances with respect to such a class is not required.⁷

Section 1126(c) of the Bankruptcy Code defines acceptance of a plan by a class of impaired claims as acceptance by holders of at least two-thirds in dollar amount and more than one-half in a number of allowed claims in that class, counting only those claims that have actually voted to accept or to reject the plan. Thus, a class of Claims will have voted to accept the Plan only if two-thirds in amount and a majority in number of the Allowed Claims in such class that vote on the Plan actually cast their ballots in favor of acceptance.

Section 1126(d) of the Bankruptcy Code defines acceptance of a plan by a class of impaired equity interests as acceptance by holders of at least two-thirds in amount of allowed interests in that class, counting only those interests that have actually voted to accept or to reject the plan. Thus, a Class of Interests will have voted to accept the Plan only if two-thirds in amount of the Allowed Interests in such class that vote on the Plan actually cast their ballots in favor of acceptance.

Pursuant to Section 3.5 of the Plan, if a Class contains Claims or Interests eligible to vote and no Holders of Claims or Interests eligible to vote in such Class vote to accept or reject the Plan, the Holders of such Claims or Interests in such Class shall be deemed to have accepted the Plan.

Confirmation Without Acceptance by All Impaired Classes

Section 1129(b) of the Bankruptcy Code allows a bankruptcy court to confirm a plan even if all impaired classes have not accepted it; provided, that the plan has been accepted by at least one impaired class. Pursuant to section 1129(b) of the Bankruptcy Code, notwithstanding an impaired class’s rejection or deemed rejection of the plan, the plan will be confirmed, at the plan proponent’s request, in a procedure commonly known as a “cramdown” so long as the plan does not “discriminate unfairly” and is “fair and equitable” with respect to each class of claims or equity interests that is impaired under, and has not accepted, the plan.

If any Impaired Class rejects the Plan, the Debtors reserve the right to seek to confirm the Plan utilizing the “cramdown” provision of section 1129(b) of the Bankruptcy Code. To the extent that any Impaired Class rejects the Plan or is deemed to have rejected the Plan, the Debtors may request Confirmation of the Plan, as it may be modified from time to time, under section 1129(b) of the Bankruptcy Code. The Debtors reserve the right to alter, amend, modify, revoke, or withdraw the Plan or any Plan Supplement document, including the right to amend or modify the Plan or any Plan Supplement document to satisfy the requirements of section 1129(b) of the Bankruptcy Code.

No Unfair Discrimination

The “unfair discrimination” test applies to classes of claims or interests that are of equal priority and are receiving different treatment under a plan. The test does not require that the treatment be the same or equivalent, but that treatment be “fair.” In general, bankruptcy courts consider whether a plan discriminates unfairly in its treatment of classes of claims or interests of equal rank (e.g., classes of the same legal character). Bankruptcy courts will take into account a number of factors in determining whether a plan discriminates unfairly. A plan could treat two classes of unsecured creditors differently without unfairly discriminating against either class.

⁷

A class of claims is “impaired” within the meaning of section 1124 of the Bankruptcy Code unless the plan (a) leaves unaltered the legal, equitable and contractual rights to which the claim or equity interest entitles the Holder of such claim or equity interest or (b) cures any default, reinstates the original terms of such obligation, compensates the Holder for certain damages or losses, as applicable, and does not otherwise alter the legal, equitable, or contractual rights to which such claim or equity interest entitles the Holder of such claim or equity interest.

Fair and Equitable Test

The “fair and equitable” test applies to classes of different priority and status (e.g., secured versus unsecured) and includes the general requirement that no class of claims receive more than 100 percent of the amount of the allowed claims in the class. As to the dissenting class, the test sets different standards depending upon the type of claims or equity interests in the class.

The Debtors submit that if the Debtors “cramdown” the Plan pursuant to section 1129(b) of the Bankruptcy Code, the Plan is structured so that it does not “discriminate unfairly” and satisfies the “fair and equitable” requirement. With respect to the unfair discrimination requirement, all Classes under the Plan are provided treatment that is substantially equivalent to the treatment that is provided to other Classes that have equal rank. With respect to the fair and equitable requirement, no Class under the Plan will receive more than 100 percent of the amount of Allowed Claims or Interests in that Class. The Debtors believe that the Plan and the treatment of all Classes of Claims or Interests under the Plan satisfy the foregoing requirements for nonconsensual Confirmation of the Plan.

Liquidation Analysis

Often called the “best interests” test, section 1129(a)(7) of the Bankruptcy Code requires that a bankruptcy court find, as a condition to confirmation, that a chapter 11 plan provides, with respect to each impaired class, that each Holder of a Claim or Interest in such impaired class either (a) has accepted the plan or (b) will receive or retain under the plan property of a value that is not less than the amount that the non-accepting Holder would receive or retain if the debtors liquidated under chapter 7.

Attached hereto as Exhibit D and incorporated herein by reference is a liquidation analysis (the “Liquidation Analysis”) prepared by the Debtors with the assistance of the Debtors’ advisors and reliance upon the valuation methodologies utilized by the Debtors’ advisors. As reflected in the Liquidation Analysis, the Debtors believe that liquidation of the Debtors’ businesses under chapter 7 of the Bankruptcy Code would result in substantial diminution in the value to be realized by Holders of Claims as compared to distributions contemplated under the Plan. Consequently, the Debtors and their management believe that Confirmation of the Plan will provide a substantially greater return to Holders of Claims than would a liquidation under chapter 7 of the Bankruptcy Code.

XII.

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN

Introduction

The following discussion is a summary of certain U.S. federal income tax consequences of the consummation of the Plan to the Debtors, the Reorganized Debtors, and to certain Holders (which, solely for purposes of this discussion, means the beneficial owners for U.S. federal income tax purposes) of Claims. This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Tax Code”), the U.S. Treasury Regulations promulgated thereunder (the “Treasury Regulations”), judicial decisions and authorities, published administrative rules, positions and pronouncements of the U.S. Internal Revenue Service (the “IRS”), and other applicable authorities (collectively, “Applicable Tax Law”), all as in effect on the date of this Disclosure Statement and all of which are subject to change or differing interpretations, possibly with retroactive effect. Due to the lack of definitive judicial and administrative authority in a number of areas, substantial uncertainty may exist with respect to some of the tax consequences described below. No opinion of counsel has been obtained, and the Debtors do not intend to seek a ruling or determination from the IRS as to any of the tax consequences of the Plan discussed below. The discussion below is not binding upon the IRS or the courts. No assurance can be given that the IRS would not assert, or that a court would not sustain, a different position than any position discussed herein.

This discussion does not purport to address all aspects of U.S. federal income taxation that may be relevant to the Debtors or to certain Holders of Claims in light of their individual circumstances. This discussion does not address tax issues with respect to such Holders of Claims subject to special treatment under the U.S. federal income tax laws (including, for example, banks, brokers dealers, mutual funds, governmental authorities or agencies, persons who are not U.S. Holders (defined below), pass-through entities, beneficial owners of pass-through entities, subchapter S corporations, dealers and traders in securities, insurance companies, financial institutions, tax-exempt organizations, controlled foreign corporations, passive foreign investment companies, small business investment companies, foreign taxpayers, Persons who are related to the Debtors within the meaning of the Tax Code, Persons liable for alternative minimum tax, U.S. Holders whose functional currency is not the U.S. dollar, U.S. Holders who prepare “applicable financial statements” (as defined in section 451 of the Tax Code), Persons using a mark-to-market method of accounting, Holders of Claims who are themselves in bankruptcy or regulated investment companies). No aspect of state, local, estate, gift, or non-U.S. taxation is addressed. Furthermore, this summary assumes that a Holder of a Claim holds only Claims in a single Class and holds Claims as “capital assets” (within the meaning of section 1221 of the Tax Code). This summary also assumes that the various third-party debt and other arrangements to which the Debtors and the Reorganized Debtors, as applicable, are or will be a party will be respected for U.S. federal income tax purposes in accordance with their form, and that the Claims constitute interests in the Debtors “solely as a creditor” for purposes of section 897 of the Tax Code. This summary does not discuss differences in tax consequences to Holders of Claims that act or receive consideration in a capacity other than any other Holder of a Claim of the same Class or Classes, and the tax consequences for such Holders may differ materially from that described below. This summary does not address the U.S. federal income tax consequences to Holders of Claims (a) whose Claims are Unimpaired or otherwise entitled to payment in full in Cash under the Plan or (b) that are not entitled to vote to accept or reject the Plan.

For purposes of this discussion, a “U.S. Holder” is a Holder of a Claim that for U.S. federal income tax purposes is: (1) an individual citizen or resident of the United States; (2) a corporation created or organized under the laws of the United States, any state thereof or the District of Columbia; (3) an estate the income of which is subject to U.S. federal income taxation regardless of the source of such income; or (4) a trust (a) if a court within the United States is able to exercise primary jurisdiction over the trust’s administration and one or more “United States persons” (within the meaning of section 7701(a)(30) of the Tax Code) has authority to control all substantial decisions of the trust or (b) that has a valid election in effect under applicable Treasury Regulations to be treated as a “United States person” (within the meaning of section 7701(a)(30) of the Tax Code). For purposes of this discussion, a “Non-U.S. Holder” is any Holder of a Claim that is not a U.S. Holder other than any partnership (or other entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes).

If a partnership (or other entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes) is a Holder of a Claim, the tax treatment of a partner (or other beneficial owner) generally will depend upon the status of the partner (or other beneficial owner) and the activities of the partner (or other beneficial owner) and the partnership (or other pass-through entity). Partners (or other beneficial owners) of partnerships (or other pass-through entities) that are Holders of Claims are urged to consult their respective tax advisors regarding the U.S. federal income tax consequences of the Plan.

Furthermore, this discussion assumes that all separate plans of reorganization under the Bankruptcy Code constituting the Plan will be consummated. If less than all of such plans of reorganization will be consummated, their federal income tax consequences may be materially different than the consequences described below.

The following summary of certain federal income tax consequences is for informational purposes only and is not a substitute for careful tax planning and advice based upon the individual circumstances pertaining to a Holder of a Claim.

All Holders of Claims should seek tax advice based on their particular circumstances from an independent tax advisor regarding the federal, state, local, and other tax consequences of the transactions contemplated by the Plan.

Certain U.S. Federal Income Tax Consequences of the Plan to the Debtors and the Reorganized Debtors

Cancelation of Debt Income.

In general, absent an exception, a debtor will realize and recognize cancellation of debt (“COD”) income for U.S. federal income tax purposes if its outstanding indebtedness is satisfied for total consideration less than the amount of such indebtedness. In general, the amount of COD income is the excess of (a) the adjusted issue price of the satisfied indebtedness over (b) the sum of (i) the amount of Cash paid, (ii) the issue price of any new indebtedness of the debtor issued, and (iii) the fair market value of any other new consideration (including stock of the debtor or a party related to the debtor), in each case, given in satisfaction of such indebtedness at the time of the exchange.

A taxpayer will not, however, be required to include COD Income in gross income pursuant to section 108 of the IRC if the taxpayer is under the jurisdiction of a court in a case under chapter 11 of the Bankruptcy Code and the discharge of debt occurs pursuant to that proceeding. Instead, as a consequence of such exclusion, a taxpayer must reduce its net operating losses (“NOLs”) and certain other tax attributes (collectively, “Tax Attributes”) and aggregate tax basis in assets (including the stock of subsidiaries) by the amount of COD Income that it excluded from gross income pursuant to section 108 of the IRC. Such reduction in Tax Attributes and aggregate tax basis occurs only after the tax for the year of the debt discharge has been determined. In general, Tax Attributes and aggregate tax basis will be reduced in the following order: (a) NOLs and NOL carryforwards; (b) general business credit carryovers; (c) minimum tax credit carryovers; (d) capital loss carryovers; (e) tax basis in assets, which includes the stock of subsidiaries (but not below the amount of liabilities to which the debtor remains subject immediately after the discharge); (f) passive activity loss and credit carryovers; and (g) foreign tax credits carryovers. Alternatively, a debtor with COD Income may elect first to reduce the basis of its depreciable assets pursuant to section 108(b)(5) of the IRC. Interest expense deductions allowable under section 163(j) of the IRC (and carryforwards of any such deductions) (“163(j) Deductions”) are not subject to reduction under these rules. Any excess COD Income over the amount of available items described in clauses (a) through (g), above, will generally not give rise to U.S. federal income tax and will generally have no other U.S. federal income tax impact. Where the taxpayer joins in the filing of a consolidated U.S. federal income tax return, applicable Treasury Regulations require, in certain circumstances, that certain tax attributes of other members of the group also be reduced.

The Debtors are expected to realize COD Income in connection with the Restructuring Transactions, with an attendant reduction in Tax Attributes (but in the case of tax basis where no election is made to reduce the basis of depreciable assets as described above, only to the extent such tax basis exceeds the amount of the Debtors’ liabilities, as determined for these purposes, immediately after the Effective Date). The exact amount of any COD Income that will be realized by the Debtors will not be determinable until the consummation of the Plan because the amount of COD Income will depend, in part, on the issue price of new debt instruments and the value of non-cash consideration, neither of which can be determined until after the Plan is consummated. As a result, the total amount of attribute reduction as a result of the Plan cannot be determined until after the Effective Date. Depending on the amount of COD Income, some of the Reorganized Debtors’ tax basis in their assets may be reduced by COD Income that is not absorbed by the NOLs and other tax attributes.

However, COD income is excluded from income to the extent that a corporate borrower is a debtor in a bankruptcy case and the discharge occurs pursuant to a court order or a plan approved by the court. Generally, under the Tax Code, any COD income excluded from income of a taxpayer in bankruptcy under this exception must be applied against and reduce certain tax attributes of the taxpayer. Unless the taxpayer elects to have such reduction apply first against the basis of its depreciable property, such reduction is first applied against the taxpayer’s NOLs (including NOLs from the taxable year of discharge and any NOL carryover to such taxable year), and then to certain tax credits, capital loss and capital loss carryovers, and tax basis. Any reduction in tax attributes in respect of excluded COD income does not occur until after the determination of the taxpayer’s income or loss for the taxable year in which the COD income is realized.

Limitation on NOLs, 163(j) Deductions, and Other Tax Attributes

After giving effect to the reduction in Tax Attributes and aggregate tax basis pursuant to excluded COD Income, the ability of the Reorganized Debtors to use any remaining Tax Attributes post-emergence may be subject to certain limitations under sections 382 and 383 of the IRC as a result of an “ownership change” of the Reorganized Debtors by reason of the transactions consummated pursuant to the Plan.

Under sections 382 and 383 of the IRC, if the Debtors undergo an “ownership change” as defined under section 382 of the IRC, the amount of any remaining NOL carryforwards, tax credit carryforwards, 163(j) Deductions, and possibly certain other attributes (potentially including losses and deductions that have accrued economically but are unrecognized as of the date of the ownership change and cost recovery deductions) of the Debtors allocable to periods prior to the Effective Date (collectively, “Pre-Change Losses”) that may be utilized to offset future taxable income generally are subject to an annual limitation. For this purpose, if a corporation (or consolidated group) has a net unrealized built-in loss at the time of an ownership change (taking into account most assets and items of “built-in” income and deductions), then, generally, built-in losses (including amortization or depreciation deductions attributable to such built-in losses) recognized during the following five years (up to the amount of the original net unrealized built-in loss) will be treated as Pre-Change Losses and similarly will be subject to the annual limitation. In general, a corporation’s (or consolidated group’s) net unrealized built-in loss will be deemed to be zero unless it is greater than the lesser of (a) $10,000,000 or (b) 15 percent of the fair market value of its assets (with certain adjustments) before the ownership change. While proposed Treasury Regulations could significantly modify the calculation and treatment of net unrealized built-in gains and losses, those regulations are not expected to apply to the Reorganized Debtors, and the remainder of this discussion assumes they will not apply.

The rules of section 382 of the IRC are complicated, but an ownership change is expected to occur as a result of the Restructuring Transactions. If such an ownership change occurs, the ability of the Reorganized Debtors to use the Pre-Change Losses will be subject to limitation unless an exception to the general rules of section 382 of the IRC applies.

General Section 382 Annual Limitation

In general, the amount of the annual limitation to which a corporation that undergoes an “ownership change” would be subject is equal to the product of (a) the fair market value of the stock of the corporation (or parent of the consolidated group) immediately before the “ownership change” (with certain adjustments), and (b) the “long-term tax-exempt rate” (which is the highest of the adjusted federal longterm rates in effect for any month in the 3-calendar-month period ending with the calendar month in which the ownership change occurs). Under certain circumstances, the annual limitation may be increased to the extent that the corporation (or parent of the consolidated group) has an overall built-in gain in its assets at the time of the ownership change. If the corporation or consolidated group has such “net unrealized built-in gain” at the time of an ownership change (taking into account most assets and items of “built-in” income, gain, loss, and deduction), any built-in gains recognized (or, according to the currently effective IRS Notice 2003-65, treated as recognized) during the following five year period (up to the amount of the original net unrealized built-in gain) generally will increase the annual limitation in the year of such recognition, such that the loss corporation or consolidated group would be permitted to use its Pre-Change Losses against such built-in gain income in addition to its otherwise applicable annual limitation. Section 383 of the IRC applies a similar limitation to capital loss carryforwards and tax credits. Any unused limitation may be carried forward, thereby increasing the annual limitation in the subsequent taxable year. If the corporation or consolidated group does not continue its historic business or use a significant portion of its historic assets in a new business for at least two years after the ownership change, the annual limitation resulting from the ownership change is reduced to zero, thereby precluding any utilization of the corporation’s Pre-Change Losses (absent any increases due to recognized built-in gains). As discussed below, however, special rules may apply in the case of a corporation that experiences an ownership change as the result of a bankruptcy proceeding.

Special Bankruptcy Exceptions

Special rules may apply in the case of a corporation that experiences an “ownership change” as a result of a bankruptcy proceeding. An exception to the foregoing annual limitation rules generally applies when so-called “qualified creditors” of a debtor corporation in chapter 11 receive, in respect of their Claims, at least 50 percent of the vote and value of the stock of the debtor corporation (or a controlling corporation if also in chapter 11) as reorganized pursuant to a confirmed chapter 11 plan (the “382(l)(5) Exception”). If the requirements of the 382(l)(5) Exception are satisfied, a debtor’s Pre-Change Losses would not be limited on an annual basis, but, instead, NOL carryforwards and carryforwards of disallowed 163(j) Deductions would be reduced by the amount of any interest deductions claimed by the debtor during the three taxable years preceding the effective date of the plan of reorganization and during the part of the taxable year prior to and including the effective date of the plan of reorganization in respect of all debt converted into stock pursuant to the reorganization. If the 382(l)(5) Exception applies and the Reorganized Debtors undergo another “ownership change” within two years after the Effective Date, then the Reorganized Debtors’ Pre-Change Losses thereafter would be effectively eliminated in their entirety.

Where the 382(l)(5) Exception is not applicable to a corporation in bankruptcy (either because the debtor corporation does not qualify for it or the debtor corporation otherwise elects not to utilize the 382(l)(5) Exception), another exception will generally apply (the “382(l)(6) Exception”). Under the 382(l)(6) Exception, the annual limitation will be calculated by reference to the lesser of (a) the value of the debtor corporation’s new stock (with certain adjustments) immediately after the ownership change or (b) the value of such debtor corporation’s assets (determined without regard to liabilities) immediately before the ownership change. This differs from the ordinary rule that requires the fair market value of the stock of a debtor corporation that undergoes an “ownership change” to be determined immediately before the events giving rise to the change. The 382(l)(6) Exception also differs from the 382(l)(5) Exception in that, under it, a debtor corporation is not required to reduce its NOL carryforwards and carryforwards of disallowed 163(j) Deductions by the amount of interest deductions claimed within the prior three-year period (and during the part of the taxable year prior to and including the effective date of the plan of reorganization), and a debtor corporation may undergo another change of ownership within two years without automatically triggering the elimination of its Pre-Change Losses. The resulting limitation would be determined under the regular rules for ownership changes.

The Debtors have not yet determined whether they qualify for, or if so whether they will elect out of, the 382(l)(5) Exception. Regardless of whether the Debtors take advantage of the 382(l)(6) Exception or the 382(l)(5) Exception, the use of their Pre-Change Losses (if any) after the Effective Date may be adversely affected if an “ownership change” within the meaning of section 382 of the IRC were to occur after the Effective Date.

Certain U.S. Federal Income Tax Consequences of the Plan to U.S. Holders of Allowed Claims Entitled to Vote

The following discussion assumes that the Debtors will undertake the Restructuring Transactions currently contemplated by the Plan. U.S. Holders are urged to consult their own tax advisors regarding the tax consequences of the Restructuring Transactions.

The U.S. federal income tax consequences to certain U.S. Holders of Claims will depend, in part, on whether, for U.S. federal income tax purposes, (a) the Claim surrendered constitutes a “security” of a Debtor, and (b) the consideration received constitutes stock or a “security” of the same entity against which the Claim is asserted (or, an entity that is a “party to a reorganization” with such entity).

Neither the IRC nor the Treasury Regulations promulgated thereunder define the term “security.” Whether a debt instrument constitutes a “security” is determined based on all relevant facts and circumstances, but most authorities have held that the length of the term of a debt instrument at initial issuance is an important factor in determining whether such instrument is a security for U.S. federal income tax purposes. These authorities have indicated that a term of less than five years is evidence that the instrument is not a security, whereas a term of ten years or more is evidence that the instrument is a security. There are numerous other factors that could be taken into account in determining whether a debt instrument is a security, including the security for payment, the creditworthiness of the obligor, the subordination or lack thereof with respect to other creditors, the right to vote or otherwise participate in the management of the obligor, the convertibility of the instrument into an equity interest of the obligor, whether payments of interest are fixed, variable, or contingent, and whether such payments are made on a current basis or accrued.

Due to the inherently factual nature of the determination, if relevant based on the form of the Restructuring Transactions, U.S. Holders are urged to consult their own tax advisors regarding the status of their Claims or the consideration received under the Plan as “securities” for U.S. federal income tax purposes.

Accrued Interest

U.S. Holders should consult their own tax advisors regarding the treatment of the Restructuring Transactions for U.S. federal income tax purposes. To the extent that any amount received by a U.S. Holder of a Claim under the Plan is attributable to accrued interest or original issue discount (“OID”) during its holding period on the debt instruments constituting the surrendered Claim, the receipt of such amount should be taxable to the U.S. Holder as ordinary interest income (to the extent not already taken into income by the U.S. Holder). Conversely, a U.S. Holder of a Claim may be able to recognize a deductible loss to the extent that any accrued interest on the debt instruments constituting such Claim was previously included in the U.S. Holder’s gross income but was not paid in full by the Debtors. Such loss may be ordinary, but the tax law is unclear on this point.

If the fair market value of the consideration received by a U.S. Holder is not sufficient to fully satisfy all principal and interest on its Claims, the extent to which such consideration will be attributable to accrued interest is unclear. Under the Plan, the aggregate consideration to be distributed to the Claims will be allocated first to the principal amount of the Claims in each Class, with any excess allocated to unpaid interest that accrued on these Claims, if any. Certain legislative history indicates that an allocation of consideration as between principal and interest provided in a chapter 11 plan of reorganization is binding for U.S. federal income tax purposes, and certain case law generally indicates that a final payment on a distressed debt instrument that is insufficient to repay outstanding principal and interest will be allocated to principal, rather than interest. Certain Treasury Regulations treat payments as allocated first to any accrued but untaxed interest. The IRS could take the position that the consideration received by the U.S. Holder should be allocated in some way other than as provided in the Plan. U.S. Holders of Claims should consult their own tax advisors regarding the proper allocation of the consideration received by them under the Plan

Market Discount

In the case of a U.S. Holder that acquired its Claim with market discount, any gain recognized on the sale or exchange of such Claim generally will be treated as ordinary income to the extent of the market discount treated as accruing during such U.S. Holder’s holding period for such Claim. Any such market discount is generally the excess of the “revised issue price” of such Claim over such U.S. Holder’s initial tax basis in such Claim upon acquisition, if such excess equals or exceeds a statutory de minimis amount. Such market discount is generally treated as accruing during such U.S. Holder’s holding period for such Claim on a straight-line basis or, at the election of such U.S. Holder, on a constant yield basis, unless such U.S. Holder has previously elected to include such market discount in income as it accrues. For this purpose, the “revised issue price” of a Claim generally equals its issue price, increased by the amount of OID that has accrued over the term of the Claim. To the extent that Claims that were acquired with market discount are exchanged in a tax-free transaction for other property, any market discount that accrued on the Claims (i.e., up to the time of the exchange) but was not recognized by the U.S. Holder is carried over to the property received therefor and any gain recognized on the subsequent sale, exchange, redemption, or other disposition of the property is treated as ordinary income to the extent of the accrued, but not recognized, market discount with respect to the exchanged debt instrument. U.S. Holders who acquired their Claims other than at original issuance should consult their own tax advisors regarding the possible application of the market discount rules to the Restructuring Transactions.

U.S. Federal Income Tax Consequences to U.S. Holders of Owning and Disposing of New Common Stock

Dividends on New Common Stock

Any distributions made on account of the New Common Stock will constitute dividends for U.S. federal income tax purposes to the extent of the current or accumulated earnings and profits of the Reorganized Debtors as determined under U.S. federal income tax principles. “Qualified dividend income” received by an individual U.S. Holder is subject to preferential tax rates. To the extent that a U.S. Holder receives distributions that exceed such current and accumulated earnings and profits, such distributions will be treated first as a non-taxable return of capital reducing the U.S. Holder’s basis in its shares of the New Common Stock. Any such distributions in excess of the U.S. Holder’s basis in its shares (determined on a share-by-share basis) generally will be treated as capital gain.

Subject to applicable limitations, distributions treated as dividends paid to U.S. Holders that are corporations generally will be eligible for the dividends-received deduction so long as there are sufficient earnings and profits. However, the dividends-received deduction is only available if certain holding period requirements are satisfied. The length of time that a shareholder has held its stock is reduced for any period during which the shareholder’s risk of loss with respect to the stock is diminished by reason of the existence of certain options, contracts to sell, short sales, or similar transactions. In addition, to the extent that a corporation incurs indebtedness that is directly attributable to an investment in the stock on which the dividend is paid, all or a portion of the dividends-received deduction may be disallowed.

Sale, Redemption, or Repurchase of New Common Stock

Unless a non-recognition provision applies, and subject to the market discount rules discussed above, U.S. Holders generally will recognize capital gain or loss upon the sale, redemption, or other taxable disposition of the New Common Stock. Such capital gain will be long-term capital gain if at the time of the sale, exchange, retirement, or other taxable disposition, the U.S. Holder has held the New Common Stock for more than one year, taking into account the holding period rules described above. Long-term capital gains of an individual taxpayer generally are taxed at preferential rates. The deductibility of capital losses is subject to certain limitations.

Application of Dividend Equivalence Rules

The discussions above regarding the treatment of redemptions and repurchases of the New Common Stock are subject to the potential application of the “dividend equivalence” rules. As a general matter, if an issuer repurchases or redeems stock, such redemption or repurchase is treated as a sale and subject to the rules discussed above. However, in certain circumstances, a repurchase or redemption will be recharacterized as a distribution that is potentially subject to the dividend taxation rules discussed above. In general, such circumstances apply where the interest of a holder of stock being repurchased or redeemed in the earnings and profits of the issuer is not being sufficiently changed as a result of such repurchase or redemption. Particularly in the context of a company that is not publicly traded, this analysis is fact-specific and takes into account, among other things, a particular holder’s overlapping shareholdings in multiple series of stock. Accordingly, Holders of Claims receiving New Common Stock must take these dividend equivalence rules into account in evaluating the consequences of future repurchases and redemptions.

Limitations on Use of Capital Losses

A U.S. Holder who recognizes capital losses will be subject to limits on their use of capital losses. For a non-corporate U.S. Holder, capital losses may be used to offset any capital gains (without regard to holding periods) plus ordinary income to the extent of the lesser of (a) $3,000 ($1,500 for married individuals filing separate returns) or (b) the excess of the capital losses over the capital gains. A non-corporate U.S. Holder may carry over unused capital losses and apply them to capital gains and a portion of their ordinary income for an unlimited number of years. For corporate U.S. Holders, losses from the sale or exchange of capital assets may only be used to offset capital gains. A corporate U.S. Holder who has more capital losses than can be used in a tax year may be allowed to carry over the excess capital losses for use in succeeding tax years. Corporate U.S. Holders may only carry over unused capital losses for the five years following the capital loss year, but are allowed to carry back unused capital losses to the three years preceding the capital loss year.

Certain U.S. Federal Income Tax Consequences of the Plan to Non-U.S. Holders of Allowed Claims

The following discussion assumes that the Debtors will undertake the Restructuring Transactions currently contemplated by the Plan and includes only certain U.S. federal income tax consequences of the Plan to Non-U.S. Holders. This discussion does not include any non-U.S. tax considerations. The rules governing the U.S. federal income tax consequences to Non-U.S. Holders are complex. Each Non-U.S. Holder is urged to consult its own tax advisor regarding the U.S. federal, state, local, non-U.S., and non-income tax consequences of the consummation of the Plan and the Restructuring Transactions to such Non-U.S. Holder and the ownership and disposition of the New Preferred Stock and the New Common Stock, as applicable.

Gain Recognition

Gain, if any, recognized by a Non-U.S. Holder on the exchange of its Claim generally will not be subject to U.S. federal income taxation unless (a) the Non-U.S. Holder is an individual who was present in the United States for 183 days or more during the taxable year in which the Restructuring Transactions occur and certain other conditions are met or (b) such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business in the United States (and, if an income tax treaty applies, such gain is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States). If the first exception applies, the Non-U.S. Holder generally will be subject to U.S. federal income tax at a rate of 30 percent (or at a reduced rate or exemption from tax under an applicable income tax treaty) on the amount by which such Non-U.S. Holder’s capital gains allocable to U.S. sources exceed capital losses allocable to U.S. sources during the taxable year of the exchange. If the second exception applies, the Non-U.S. Holder generally will be subject to U.S. federal income tax with respect to any gain realized on the exchange in the same manner as a U.S. Holder (except that the Medicare tax would generally not apply). In order to claim an exemption from or reduction of withholding tax, such Non-U.S. Holder will be required to provide a properly executed IRS Form W-8ECI (or such successor form as the IRS designates). In addition, if such a Non-U.S. Holder is a corporation, it may be subject to a branch profits tax equal to 30 percent (or such lower rate provided by an applicable treaty) of its effectively connected earnings and profits for the taxable year, subject to certain adjustments.

U.S. Federal Income Tax Consequences to Non-U.S. Holders of Owning and Disposing of New Common Stock

Dividends on New Common Stock

Any distributions made with respect to New Common Stock will constitute dividends for U.S. federal income tax purposes to the extent of the issuer’s current or accumulated earnings and profits as determined under U.S. federal income tax principles (and thereafter first as a return of capital which reduces basis and then, generally, capital gain). Except as described below, such dividends paid with respect to stock held by a Non-U.S. Holder that are not effectively connected with a Non-U.S. Holder’s conduct of a U.S. trade or business (or if an income tax treaty applies, are not attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States) will be subject to U.S. federal withholding tax at a rate of 30 percent (or lower treaty rate or exemption from tax, if applicable). A Non-U.S. Holder generally will be required to satisfy certain IRS certification requirements in order to claim a reduction of or exemption from withholding under a tax treaty by filing IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, (or a successor form) upon which the Non-U.S. Holder certifies, under penalties of perjury, its status as a non-U.S. person and its entitlement to the lower treaty rate or exemption from tax with respect to such payments. Dividends paid with respect to stock held by a Non-U.S. Holder that are effectively connected with a Non-U.S. Holder’s conduct of a U.S. trade or business (and if an income tax treaty applies, are attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States) generally will be subject to U.S. federal income tax in the same manner as a U.S. Holder, and a Non-U.S. Holder that is a corporation for U.S. federal income tax purposes may also be subject to a branch profits tax with respect to such Non-U.S. Holder’s effectively connected earnings and profits that are attributable to the dividends at a rate of 30 percent (or at a reduced rate or exemption from tax under an applicable income tax treaty).

Sale, Redemption, or Repurchase of New Common Stock

A Non-U.S. Holder generally will not be subject to U.S. federal income tax with respect to any gain realized on the sale or other taxable disposition (including a cash redemption) of stock unless:

●

such Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition or who is subject to special rules applicable to former citizens and residents of the United States;

●

such gain is effectively connected with such Non-U.S. Holder’s conduct of a U.S. trade or business (and, if an income tax treaty applies, such gain is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States); or

●

the issuer of such stock is or has been during a specified testing period a “U.S. real property holding corporation” under the Foreign Investment in Real Property Tax Act rules.

If the first exception applies, the Non-U.S. Holder generally will be subject to U.S. federal income tax at a rate of 30 percent (or at a reduced rate or exemption from tax under an applicable income tax treaty) on the amount by which such Non-U.S. Holder’s capital gains allocable to U.S. sources exceed capital losses allocable to U.S. sources during the taxable year of disposition of stock. If the second exception applies, the Non-U.S. Holder generally will be subject to U.S. federal income tax with respect to such gain in the same manner as a U.S. Holder, and a Non-U.S. Holder that is a corporation for U.S. federal income tax purposes may also be subject to a branch profits tax with respect to earnings and profits effectively connected with a U.S. trade or business that are attributable to such gains at a rate of 30 percent (or at a reduced rate or exemption from tax under an applicable income tax treaty). With respect to the third exception, the Debtors consider it unlikely, based on their current business plan and operations, that such rules currently apply or will apply in the future.

FATCA

Under legislation commonly referred to as the Foreign Account Tax Compliance Act (“FATCA”), foreign financial institutions and certain other foreign entities must report certain information with respect to their U.S. account holders and investors or be subject to withholding at a rate of 30 percent on the receipt of “withholdable payments.” For this purpose, “withholdable payments” are generally U.S. source payments of fixed or determinable, annual or periodical income, and, subject to the paragraph immediately below, also include gross proceeds from the sale of any property of a type which can produce U.S. source interest or dividends. FATCA withholding will apply even if the applicable payment would not otherwise be subject to U.S. federal nonresident withholding.

FATCA withholding rules were previously scheduled to take effect on January 1, 2019, that would have applied to payments of gross proceeds from the sale or other disposition of property of a type that can produce U.S. source interest or dividends. However, such withholding has effectively been suspended under proposed Treasury Regulations that may be relied on until final regulations become effective. Nonetheless, there can be no assurance that a similar rule will not go into effect in the future. Each Non U.S. Holder should consult its own tax advisor regarding the possible impact of FATCA withholding rules on such Non-U.S. Holder.

Both U.S. Holders and Non-U.S. Holders should consult their tax advisors regarding the possible impact of these rules on such Holders’ exchange of any of its claims pursuant to the Plan and on its ownership of the New Preferred Stock and New Common Stock.

THE FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN ARE COMPLEX. THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO A PARTICULAR HOLDER IN LIGHT OF SUCH HOLDER’S CIRCUMSTANCES AND INCOME TAX SITUATION. ALL HOLDERS OF CLAIMS ARE URGED TO CONSULT WITH THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE TRANSACTIONS CONTEMPLATED BY THE PLAN, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR NON-U.S. TAX LAWS, AND OF ANY CHANGE IN APPLICABLE TAX LAWS.

XIII.

RECOMMENDATION

In the opinion of the Debtors, the Plan is preferable to all other available alternatives and provides for a larger distribution to the Debtors’ creditors than would otherwise result in any other scenario. Accordingly, the Debtors recommend that holders of Claims entitled to vote on the Plan vote to accept the Plan and support Confirmation of the Plan.

Exhibit A

(Plan of Reorganization)

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE


	)
In re:	)	Chapter 11
	)
PARTS iD, Inc. et al.,¹	)	23-______ (___)
	)
Debtors.	)	(Joint Administration to Be Requested)
	)

JOINT PREPACKAGED CHAPTER 11 PLAN OF REORGANIZATION OF

PARTS ID, INC. AND PARTS ID, LLC

THIS CHAPTER 11 PLAN OF REORGANIZATION IS BEING SOLICITED FOR ACCEPTANCE OR REJECTION IN ACCORDANCE WITH BANKRUPTCY CODE SECTION 1125 AND WITHIN THE MEANING OF BANKRUPTCY CODE SECTION 1126. THIS CHAPTER 11 PLAN WILL BE SUBMITTED TO THE BANKRUPTCY COURT FOR APPROVAL FOLLOWING SOLICITATION AND THE DEBTORS’ FILING FOR CHAPTER 11 BANKRUPTCY.

DLA PIPER LLP (US)

R. Craig Martin (DE 5032)

1201 N. Market Street, Suite 2100

Wilmington, Delaware 19801

Telephone: (302) 468-5700

Facsimile: (302) 394-2341

Email: craig.martin@us.dlapiper.com

Erik F. Stier (pro hac vice pending)

500 8th Street, NW

Washington, D.C. 20004

Telephone: (202) 799-4258

Facsimile: (202) 799-5000

Email: erik.stier@us.dlapiper.com

Proposed Counsel to the Debtors

Dated: December 20, 2023

¹	The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are: PARTS iD, Inc. (4868), and PARTS iD, LLC (5607). The corporate headquarters and the mailing address for the Debtors is 1 Corporate Drive, Suite C, Cranbury, NJ 08512.

TABLE OF CONTENTS

ARTICLE I. DEFINED TERMS, RULES OF INTERPRETATION, COMPUTATION OF TIME, AND GOVERNING LAW				1
	A.		Defined Terms.	1
	B.		Rules of Interpretation	16
	C.		Computation of Time	17
	D.		Governing Law	17
	E.		Reference to Monetary Figures	17
	F.		Reference to the Debtors or the Reorganized Debtors	17
	G.		Controlling Document	17

ARTICLE II. ADMINISTRATIVE CLAIMS AND PRIORITY CLAIMS				18
	A.		Administrative Claims	18
	B.		DIP Claims	18
	C.		Professional Fee Claims	19
		1.	Final Fee Applications and Payment of Professional Fee Claims	19
		2.	Professional Escrow Account	19
		3.	Professional Fee Amount	19
		4.	Post-Confirmation Date Fees and Expenses	20
	D.		Priority Tax Claims	20
	E.		Payment of Statutory Fees	20
	F.		Restructuring Expenses	20

ARTICLE III. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS				21
	A.		Classification of Claims and Interests	21
	B.		Treatment of Claims and Interests	22
		1.	Class 1 – Other Priority Claims	22
		2.	Class 2 – Other Secured Claims	22
		3.	Class 3 – Senior Secured Note Claims	22
		4.	Class 4 – MCA Claims	23
		5.	Class 5 – Subordinated Secured Note Claims	23
		6.	Class 6 – Litigation Funding Claims	24
		7.	Class 7 – Vendor Claims	24
		8.	Class 8 – Convenience Claims	24
		9.	Class 9 – General Unsecured Claims	25
		10.	Class 10 – Intercompany Claims	25
		11.	Class 11 – Intercompany Interests	25
		12.	Class 12 – Existing Equity Interests	25
	C.		Special Provision Governing Unimpaired Claims	26
	D.		Elimination of Vacant Classes	26
	E.		Intercompany Interests.	26
	F.		Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy Code.	26
	G.		Controversy Concerning Impairment.	26
	H.		Subordinated Claims and Interests.	26

ARTICLE IV. MEANS FOR IMPLEMENTATION OF THE PLAN				27
	A.		Substantive Consolidation	27
	B.		General Settlement of Claims and Interests	27
	C.		Restructuring Transactions	28
	D.		Sources of Consideration for Plan Distributions	28
	E.		Deregistration of Existing Common Equity Interests; Issuance and Distribution of New Common Stock and New Preferred Equity	29
	F.		The Direct Investment Preferred Equity Raise and the Direct Investment Commitments	29
	G.		Corporate Existence	30
	H.		Vesting of Assets in the Reorganized Debtors	30
	I.		New Shareholders Agreement	30
	J.		Cancellation of Existing Securities and Agreements	30
	K.		Corporate Action	31
	L.		New Governance Documents	31
	M.		Indemnification Obligations	32
	N.		Directors and Officers of the Reorganized Debtors	32
	O.		Effectuating Documents; Further Transactions	32
	P.		Section 1146 Exemption	32
	Q.		Director and Officer Liability Insurance	33
	R.		Management Incentive Plan	33
	S.		Preservation of Causes of Action	33
	T.		Release of Avoidance Actions	34
	U.		Release of Consenting Vendors	34

ARTICLE V. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES				34
	A.		Assumption and Rejection of Executory Contracts and Unexpired Leases	34
	B.		Claims Based on Rejection of Executory Contracts or Unexpired Leases	36
	C.		Cure of Defaults for Assumed Executory Contracts and Unexpired Leases	36
	D.		Preexisting Obligations to the Debtors Under Executory Contracts and Unexpired Leases	37
	E.		Insurance Policies	37
	F.		Reservation of Rights	38
	G.		Nonoccurrence of Effective Date	38
	H.		Employee Compensation and Benefits.	38
		1.	Compensation and Benefits Programs	38
		1.	Workers’ Compensation Programs	39
	I.		Contracts and Leases Entered into After the Petition Date	39

ARTICLE VI. PROVISIONS GOVERNING DISTRIBUTIONS				39
	A.		Distributions on Account of Claims Allowed as of the Effective Date	39
	B.		Disbursing Agent	39
	C.		Rights and Powers of Disbursing Agent	40
		1.	Powers of the Disbursing Agent	40
		2.	Expenses Incurred on or After the Effective Date	40
	D.		Delivery of Distributions and Undeliverable or Unclaimed Distributions	40
	1.		Record Date for Distribution	40
	2.		Delivery of Distributions in General	40
	3.		Minimum Distributions	40
	4.		Undeliverable Distributions and Unclaimed Property	41
	5.		Surrender of Canceled Instruments or Securities	41
	E.		Manner of Payment	41
	F.		Indefeasible Distributions	42
	G.		Securities Law Matters	42
	H.		Compliance with Tax Requirements	43
	I.		Allocations	43
	J.		No Postpetition or Default Interest on Claims	43
	K.		Foreign Currency Exchange Rate	44
	L.		Setoffs and Recoupment	44
	M.		Claims Paid or Payable by Third Parties	44
		1.	Claims Paid by Third Parties	44
		2.	Claims Payable by Third Parties	44
		3.	Applicability of Insurance Policies	44

ARTICLE VII. PROCEDURES FOR RESOLVING CONTINGENT, UNLIQUIDATED, AND DISPUTED CLAIMS				45
	A.		Disputed Claims Process	45
	B.		Allowance of Claims	46
	C.		Claims Administration Responsibilities	46
	D.		Estimation of Claims and Interests	47
	E.		Adjustment to Claims or Interests without Objection	47
	F.		Disallowance of Claims or Interests	47
	G.		No Distributions Pending Allowance	47
	H.		Distributions After Allowance	48

ARTICLE VIII. SETTLEMENT, RELEASE, INJUNCTION, AND RELATED PROVISIONS				48
	A.		Discharge of Claims and Termination of Interests	48
	B.		Release of Liens	48
	C.		Releases by the Debtors	49
	D.		Releases by the Releasing Parties	50
	E.		Exculpation	51
	F.		Injunction	51
	G.		Protections Against Discriminatory Treatment	52
	H.		Document Retention	52
	I.		Reimbursement or Contribution	52

ARTICLE IX. CONDITIONS PRECEDENT TO CONSUMMATION OF THE PLAN				52
	A.		Conditions Precedent to the Effective Date	52
	B.		Waiver of Conditions	53
	C.		Effect of Failure of Conditions	53
	D.		Substantial Consummation	53

iii

Article X. MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN 56			54
	A.	Modification and Amendments	54
	B.	Effect of Confirmation on Modifications	54
	C.	Revocation or Withdrawal of Plan	54

Article XI. RETENTION OF JURISDICTION			55

Article XII. MISCELLANEOUS PROVISIONS			57
	A.	Tax Structure	57
	B.	Immediate Binding Effect	57
	C.	Additional Documents	57
	D.	Statutory Committee and Cessation of Fee and Expense Payment	57
	E.	Reservation of Rights	57
	F.	Successors and Assigns	58
	G.	Notices	58
	H.	Term of Injunctions or Stays.	59
	I.	Entire Agreement.	59
	J.	Plan Supplement.	59
	K.	Nonseverability of Plan Provisions.	59
	L.	Votes Solicited in Good Faith.	60
	M.	Closing of Chapter 11 Cases.	60
	N.	Waiver or Estoppel.	60

INTRODUCTION

PARTS iD, Inc. and PARTS iD, LLC (each, a “Debtor” and together, the “Debtors”) propose this Plan for the resolution of the outstanding Claims against, and Interests in, the Debtors. Although proposed jointly for administrative purposes, the Plan constitutes a separate Plan for each Debtor for the resolution of outstanding Claims and Interests pursuant to the Bankruptcy Code. The Debtors are the proponents of the Plan within the meaning of section 1129 of the Bankruptcy Code.

Reference is made to the accompanying Disclosure Statement for the Joint Prepackaged Chapter 11 Plan of Reorganization of PARTS iD Inc. and PARTS iD, LLC. Holders of Claims against or Interests in the Debtors may refer to the Disclosure Statement for a discussion of the Debtors’ history, business, properties and operations, projections, risk factors, a summary and analysis of the Plan and the transactions contemplated thereby, and certain related matters.

ALL HOLDERS OF CLAIMS, TO THE EXTENT APPLICABLE, ARE ENCOURAGED TO READ THE PLAN AND THE DISCLOSURE STATEMENT IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THE PLAN.

Article I.
DEFINED TERMS, RULES OF INTERPRETATION,
COMPUTATION OF TIME, AND GOVERNING LAW

Defined Terms.

As used in this Plan, capitalized terms have the meanings set forth below.

1. “Administrative Claim” means a Claim for costs and expenses of administration allowed under sections 503(b), 507(b) or 1114(e)(2) of the Bankruptcy Code, including: (a) the actual and necessary costs and expenses incurred after the Petition Date of preserving the Estate and operating the businesses of the Debtors (such as wages, salaries, commissions for services and payments for leased equipment and premises); (b) compensation for legal, financial advisory, accounting and other services and reimbursement of expenses awarded or allowed under sections 330(a), 331 or 503 of the Bankruptcy Code, including Professional Fee Claims; and (c) all fees and charges assessed against the Estate under chapter 123 of title 28, United States Code, 28 U.S.C. §§ 1911-1930.

2. “Affiliate” has the meaning set forth in section 101(2) of the Bankruptcy Code. With respect to any Entity that is not a Debtor, the term “Affiliate” shall apply to such Entity as if the Entity were a Debtor.

3. “Allowed” means, with respect to a Claim or Interest, any Claim or Interest (or portion thereof) against any Debtor that: (a) is deemed allowed under the Bankruptcy Code; (b) is scheduled by the Debtors as not contingent, not unliquidated, and not disputed, and for which no Proof of Claim, as applicable, has been timely Filed; (c) is evidenced by a Proof of Claim or a request for payment of an Administrative Claim, as applicable (or for which Claim a Proof of Claim is not required under the Plan, the Bankruptcy Code, or a Final Order); (d) is allowed, compromised, settled, or otherwise resolved pursuant to the terms of the Plan, in any stipulation that is approved by a Final Order of the Bankruptcy Court, or pursuant to any contract, instrument, indenture, or other agreement entered into or assumed in connection herewith; or (e) has been allowed by a Final Order of the Bankruptcy Court; provided that with respect to a Claim described in clauses (b) and (c) above, such Claim shall be Allowed only if and to the extent that with respect to such Claim no objection to the allowance thereof is interposed within the applicable period of time fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy Court, or such an objection is so interposed and the Claim has been Allowed by a Final Order; provided, further, that the Reorganized Debtors shall retain all claims and defenses with respect to Allowed Claims that are reinstated or otherwise Unimpaired pursuant to the Plan. For the avoidance of doubt, any Claim or Interest (or portion thereof), that has been disallowed pursuant to a Final Order shall not be an “Allowed” Claim. Except as otherwise specified in the Plan or any Final Order, the amount of an Allowed Claim shall not include interest or other charges on such Claim from and after the Petition Date. To the extent applicable, any Claim that has been or is hereafter listed in the Debtors’ schedules as contingent, unliquidated, or disputed, and for which no contrary or superseding Proof of Claim is or has been timely Filed, or that is not or has not been Allowed by a Final Order, is not considered Allowed and shall be expunged without further action by the Debtors and without further notice to any party or action, approval, or order of the Bankruptcy Court. Unless expressly waived by the Plan, the Allowed amount of Claims or Interests shall be subject to and shall not exceed the limitations or maximum amounts permitted by the Bankruptcy Code, including sections 502 or 503 of the Bankruptcy Code, to the extent applicable. Notwithstanding anything to the contrary herein, no Claim of any Entity subject to section 502(d) of the Bankruptcy Code shall be deemed Allowed unless and until such Entity pays in full the amount that it owes the applicable Debtor or Reorganized Debtor, as applicable.

4. “Avoidance Actions” means any and all actual or potential avoidance, recovery, subordination, or other Claims, Causes of Action, or remedies that may be brought by or on behalf of the Debtors or their Estates or other authorized parties in interest under the Bankruptcy Code or applicable non-bankruptcy law, including Claims, Causes of Action, or remedies arising under chapter 5 of the Bankruptcy Code or under similar or related local, state, federal, or foreign statutes or common law, including fraudulent or voidable transfer laws.

5. “Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101–1532, as amended from time to time.

6. “Bankruptcy Court” means the United States Bankruptcy Court for the District of Delaware presiding over the Chapter 11 Cases, or any other court having jurisdiction over the Chapter 11 Cases, including, to the extent of the withdrawal of reference under 28 U.S.C. § 157 and/or the General Order of the District Court pursuant to section 151 of the Judicial Code, the United States District Court for the District of Delaware.

7. “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure promulgated under section 2075 of the Judicial Code and the general, local, and chambers rules of the Bankruptcy Court, each, as amended from time to time.

8. “Board” means the board of directors of PARTS iD, Inc.

9. “Business Day” means any day other than a Saturday, Sunday, or “legal holiday” (as defined in Bankruptcy Rule 9006(a)), or other day on which commercial banks in the State of Delaware or the State of New York are closed for business as a result of federal, state, or local holiday.

10. “Bridge Loans” means, collectively, the prepetition loans advanced to the Debtors in the total aggregate principal amount of $6,300,000 pursuant to (i) the Prepetition Plan Sponsor Loan; (ii) the November NPA; and (iii) the December NPA.

11. “Cash” means cash in legal tender of the United States of America and cash equivalents, including bank deposits, checks, and other similar items.

12. “Causes of Action” means any claims, damages, remedies, causes of action, demands, rights, actions, controversies, proceedings, agreements, suits, obligations, liabilities, accounts, defenses, offsets, powers, privileges, licenses, Liens, indemnities, guaranties, dispute, judgments, accounts, defenses, interests and franchises of any kind or character whatsoever, whether known or unknown, foreseen or unforeseen, disputed or undisputed, existing or hereinafter arising, contingent or non-contingent, liquidated or unliquidated, secured or unsecured, assertable, directly or derivatively, matured or unmatured, suspected or unsuspected, whether arising before, on, or after the Petition Date, in contract, tort, law, equity, or otherwise. Causes of Action also include: (a) all rights of setoff, counterclaim, or recoupment and claims under contracts or for breaches of duties imposed by law or in equity; (b) the right to object to or otherwise contest Claims or Interests; (c) claims pursuant to section 362 or chapter 5 of the Bankruptcy Code; (d) such claims and defenses as fraud, mistake, duress, and usury, and any other defenses set forth in section 558 of the Bankruptcy Code; and (e) Avoidance Actions.

13. “Chapter 11 Cases” means (a) when used with reference to a particular Debtor, the case pending for that Debtor under chapter 11 of the Bankruptcy Code in the Bankruptcy Court and (b) when used with reference to all the Debtors, the procedurally consolidated chapter 11 cases pending for the Debtors in the Bankruptcy Court.

14. “Claim” means any claim, as defined in section 101(5) of the Bankruptcy Code against any of the Debtors.

15. “Claims Register” means the official register of Claims maintained by the Solicitation Agent or the clerk of the Bankruptcy Court.

16. “Class” means a class of Claims or Interests as set forth in Article III of the Plan pursuant to section 1122(a) of the Bankruptcy Code.

17. “CM/ECF” means the Bankruptcy Court’s Case Management and Electronic Case Filing system.

18. “Compensation and Benefits Programs” means all employment and severance agreements and policies, and all employment, wages, compensation, and benefit plans and policies, workers’ compensation programs, savings plans, retirement plans, deferred compensation plans, supplemental executive retirement plans, healthcare plans, disability plans, severance benefit plans, incentive and retention plans, programs, and payments, life and accidental death and dismemberment insurance plans and programs of the Debtors, and all amendments and modifications thereto, applicable to the Debtors’ employees, former employees, retirees, and non-employee directors, trustees and managers, in each case existing with the Debtors as of immediately prior to the Effective Date.

19. “Confirmation” means the Bankruptcy Court’s entry of the Confirmation Order on the docket of the Chapter 11 Cases.

20. “Confirmation Date” means the date on which the Bankruptcy Court enters the Confirmation Order on the docket of the Chapter 11 Cases within the meaning of Bankruptcy Rules 5003 and 9021.

21. “Confirmation Hearing” means the hearing(s) before the Bankruptcy Court under section 1128 of the Bankruptcy Code to consider Confirmation of the Plan and approval of the Disclosure Statement and Solicitation Materials, as such hearing(s) may be adjourned or continued from time to time.

22. “Confirmation Order” means the order of the Bankruptcy Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code and approving the Disclosure Statement and the Solicitation Materials as containing, among other things, “adequate information” as required by section 1125 of the Bankruptcy Code.

23. “Consummation” means the occurrence of the Effective Date.

24. “Consenting Vendor” means any Holder of a Vendor Claim or Convenience Claim that votes to accept to the Plan.

25. “Convenience Claim” means an Unsecured Claim held by a Vendor or such Vendor’s successor in interest that is equal to or less than $10,000.

26. “Cure” means all amounts, including an amount of $0, required to cure any monetary defaults under any Executory Contract or Unexpired Lease (or such lesser amount as may be agreed upon by the parties under an Executory Contract or Unexpired Lease) that is to be assumed by the Debtors with the consent of the Plan Sponsor pursuant to sections 365 or 1123 of the Bankruptcy Code other than a default that is not required to be cured pursuant to section 365(b)(2) of the Bankruptcy Code.

27. “D&O Liability Insurance Policies” means all insurance policies (including any “tail policy”) covering any of the Debtors’ current or former directors’, trustees’, managers’, officers’ and/or employees’ liability and all agreements, documents, or instruments relating thereto.

28. “December NPA” means that certain Note Purchase Agreement dated as of December 11, 2023, by and among PARTS iD, Inc., Lev Peker and Sanjiv Gomes, pursuant to which PARTS iD issued a promissory note in the aggregate principal amount $2,300,000.

29. “Debtors” has the meaning set forth in the preamble.

30. "DIP Agent” means the Fifth Star, Inc., as administrative agent under the DIP Facility Documents.

31. “DIP Claims” means, collectively, the New Money DIP Claims and the Roll-Up DIP Claims.

32. “DIP Facility” means the superpriority senior secured debtor-in-possession credit facility provided for under the DIP Facility Documents.

33. “DIP Facility Documents” means, collectively, that certain Credit Agreement, dated as of December 19, 2023 by and among the Debtors, the DIP Lenders and the DIP Agent, as approved by the DIP Orders, as applicable, and any other documents governing the DIP Facility, as such documents may be amended, supplemented, or otherwise modified from time to time in accordance with their terms.

34. “DIP Loans” means the loans under the DIP Facility.

35. “DIP Lenders” means, collectively, each lender under the DIP Facility.

36. “DIP Order” means, collectively, the Interim DIP Order and the Final DIP Order.

37. “Direct Investment Agreement” means that certain Direct Investment Agreement filed as a Plan Supplement, as may be amended, supplemented, or modified from time to time, in form and substance acceptable to the Plan Sponsor, setting forth, among other things, the terms and conditions of the Direct Investment Preferred Equity Raise, including the Direct Investment Commitment Conditions.

38. “Direct Investment Commitments” means the commitment, on the terms set forth in the Direct Investment Agreement, including the Direct Investment Commitment Conditions, in form and substance acceptable to the Plan Sponsor, of the Plan Sponsor to commit to purchase the New Preferred Stock pursuant to, and through the Direct Investment Preferred Equity Raise.

39. “Direct Investment Commitment Conditions” means the following conditions precedent to the Direct Investment Commitments: (i) the absence of a Material Adverse Effect or any event or occurrence which could reasonably be expected to result in a Material Adverse Effect pursuant to the DIP Facility Documents; (ii) compliance with the milestones set out in the DIP Facility Documents; (iii) a customary shareholders agreement among all of the equityholders of the Reorganized Debtors in form and substance acceptable to the Plan Sponsor in its sole discretion, and providing for, among other things, customary drag-along rights and control investor rights in favor of the Plan Sponsor; (iv) the Plan Distribution Amount being sufficient to make all required distributions under the Plan; (v) Bankruptcy Court approval of the Plan Sponsor Protections; (vi) completion of reasonable legal and financial due diligence including quality of earnings; and (vii) the Direct Investment Documents are in form and substance acceptable to the Plan Sponsor.

40. “Direct Investment Preferred Equity Raise” means $26,000,000 of New Preferred Stock purchased by the Plan Sponsor in a direct capital raise pursuant to the Plan and the Direct Investment Documents, on, and as a condition to, the Effective Date.

41. “Direct Investment Documents” means the Direct Investment Agreement, and any and all other agreements, documents, and instruments delivered or entered into in connection with the Direct Investment Preferred Equity Raise, which such documents shall be in form and substance acceptable to the Plan Sponsor.

42. “Disbursing Agent” means the Reorganized Debtors or, as applicable, the Entity or Entities selected by the Debtors or the Reorganized Debtors to make or facilitate distributions pursuant to the Plan.

43. “Disclosure Statement” means the disclosure statement for the Plan, including all exhibits and schedules thereto, which for the avoidance of doubt shall include the ballots and the solicitation procedures, that is prepared and distributed in accordance with the Bankruptcy Code, the Bankruptcy Rules, and any other applicable law, and approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy Code to be approved by the Confirmation Order.

44. “Disputed” means, as to a Claim or an Interest, any Claim or Interest (or portion thereof): (a) that is not Allowed; (b) that is not disallowed by the Plan, the Bankruptcy Code, or a Final Order, as applicable; (c) as to which a dispute is being adjudicated by a court of competent jurisdiction in accordance with non-bankruptcy Law; (d) that is Filed in the Bankruptcy Court and not withdrawn, as to which a timely objection or request for estimation has been Filed; and (e) with respect to which a party in interest has Filed a Proof of Claim or otherwise made a written request to a Debtor for payment, without any further notice to or action, order, or approval of the Bankruptcy Court..

45. “Distribution Date” means, except as otherwise set forth herein, the date or dates determined by the Debtors or the Reorganized Debtors, on or after the Effective Date, with the first such date occurring on or as soon as is reasonably practicable after the Effective Date, upon which the Disbursing Agent shall make distributions to Holders of Allowed Claims entitled to receive distributions under the Plan.

46. “Distribution Record Date” means the record date for purposes of determining which Holders of Allowed Claims against or Allowed Interests in the Debtors are eligible to receive distributions under the Plan, which date shall be the Confirmation Date or such other date as agreed to by the Debtors and the Plan Sponsor.

47. “Effective Date” means the date that is the first business day after the date the Bankruptcy Court confirms the Plan on which (a) all conditions precedent to the occurrence of the Effective Date set forth in Article IX.A of the Plan have been satisfied or waived in accordance with Article IX.B of the Plan and (b) the Plan is declared effective by the Debtors.

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

49. “Estate” means as to each Debtor, the estate created for such Debtor in its Chapter 11 Case pursuant to sections 301 and 541 of the Bankruptcy Code upon the commencement of such Debtor’s Chapter 11 Case.

50. “Exculpated Parties” means collectively, and in each case in its capacity as such, (a) the Debtors, (b) any official committees appointed in the Chapter 11 Cases and each of their respective members and (c) with respect to each of the foregoing entities in clauses (a) through (b) and this clause (c), each of their respective Related Parties.

51. “Executory Contract” means a contract to which one or more of the Debtors is a party and that is subject to assumption or rejection under section 365 or 1123 of the Bankruptcy Code.

52. “Existing Equity Interests” means the issued and outstanding common stock of PARTS iD, Inc.

53. “Favorable Trade Terms” means, subject to the right of any Holder to limit the quantum of credit exposure, the credit terms that such Holder applied to the Debtors as of June 2022; provided, however, that if the Reorganized Debtors fail to make any payment required to such Holder under the Plan or other post-Effective Date agreement (subject to the terms thereof), such Holder shall have the right to revert to less favorable credit terms of their choosing.

54. “Federal Judgment Rate” means the federal judgment rate in effect as of the Petition Date.

55. “File,” “Filed,” or “Filing” means file, filed, or filing with the Bankruptcy Court or its authorized designee in the Chapter 11 Cases.

56. “Final DIP Order” means the final order entered by the Bankruptcy Court approving the DIP Facility and authorizing the Debtors to, among other things, enter into and perform under the DIP Facility Documents and use cash collateral (as defined in section 363(a) of the Bankruptcy Code) on a final basis.

57. “Final Order” means, as applicable, an order or judgment of the Bankruptcy Court, or other court of competent jurisdiction with respect to the relevant subject matter, that has not been reversed, stayed, modified, or amended, and as to which the time to appeal, seek certiorari, or move for a new trial, reargument, or rehearing has expired and as to which no appeal, petition for certiorari, or other proceeding for a new trial, reargument, or rehearing has been timely taken; or as to which, any appeal that has been taken or any petition for certiorari that has been or may be filed has been withdrawn with prejudice, resolved by the highest court to which the order or judgment could be appealed or from which certiorari could be sought, or the new trial, reargument, or rehearing has been denied, resulted in no stay pending appeal or modification of such order, or has otherwise been dismissed with prejudice; provided that the possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy Rules, may be filed with respect to such order will not preclude such order from being a Final Order.

58. “General Unsecured Claim” means any Unsecured Claim against any of the Debtors, other than: (a) an Administrative Claim; (b) a Priority Tax Claim; (c) an Other Priority Claim; (d) Litigation Funding Claims; (e) a Vendor Claim, (f) a Convenience Claim or (g) an Intercompany Claim.

59. “Governmental Unit” has the meaning set forth in section 101(27) of the Bankruptcy Code.

60. “Holder” means an Entity holding a Claim against or an Interest in any Debtor, as applicable.

61. “Impaired” means with respect to a Class of Claims or Interests, a Class of Claims or Interests that is impaired within the meaning of section 1124 of the Bankruptcy Code.

62. “Indemnification Obligations” means All indemnification obligations and provisions currently in place consistent with applicable law (whether in the by-laws, certificates of incorporation or formation, limited liability company agreements, other organizational documents, board resolutions, indemnification agreements, employment contracts, or otherwise) in effective immediately prior to the Confirmation Date for the current and former directors, officers, managers, employees, attorneys, accountants, investment bankers, and other professionals of the Debtors, solely in his or her capacity as such.

63. “Insurance Policies” means any insurance policies, surety bonds, indemnity agreements entered into in connection with surety bonds, insurance settlement agreements, coverage-in-place agreements or other agreements related to the provision of insurance entered into by or issued to or for the benefit of the Debtors or their predecessors.

64. “Insurer” means a counterparty to any Insurance Policy that is not a Debtor, its predecessors or Affiliates.

65. “Intercompany Claim” means any Claim against any Debtor held by a Debtor.

66. “Intercompany Interest” means an Interest in a Debtor held by another Debtor.

67. “Interest” means any equity security (as defined in section 101(16) of the Bankruptcy Code), equity, ownership, profit interest, unit, share or other interest in any Debtor and any other rights, options, warrants, rights, restricted stock awards, performance share awards, performance share units, stock appreciation rights, phantom stock rights, redemption rights, repurchase rights, stock-settled restricted stock units, cash-settled restricted stock units, other securities, agreements to acquire the common stock, preferred stock, limited liability company interests, or other equity, ownership, or profits interests of any Debtor or any other agreements, arrangements or commitments of any character relating to, or whose value is related to, any such interest or other ownership interest in any Debtor (whether or not arising under or in connection with any employment agreement, separation agreement, or employee incentive plan or program of a Debtor as of the Petition Date and whether or not certificated, transferable, preferred, common, voting, or denominated “stock” or similar security and whether or not exercised or vested).

68. “Interim DIP Order” means the interim order entered by the Bankruptcy Court approving the DIP Facility and authorizing the Debtors to, among other things, enter into and perform under the DIP Facility Documents and use cash collateral (as defined in section 363(a) of the Bankruptcy Code) on an interim basis.

69. “Judicial Code” means title 28 of the United States Code, 28 U.S.C. §§ 1–4001, as amended from time to time.

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

71. “Lien” has the meaning set forth in section 101(37) of the Bankruptcy Code.

72. “Litigation Funding Claim” means any Claim arising from or related to that certain Litigation Funding Agreement dated as of September 29, 2023, by and between PARTS iD, Inc., PARTS iD, LLC, and Pravati Capital, LLC, for the purpose of funding the Company’s currently pending litigation matters (i) in the District of Massachusetts and captioned as PARTS iD, Inc. v. ID Parts, LLC (Case No. 1:20-cv-1253-RWZ), and (ii) in the District of New Jersey and captioned as Onyx Enterprises, Int’l Corp. v. Volkswagen Group of America, Inc. (Case No. 20-9976).

73. “Litigation Proceeds” means the net Cash proceeds received by the Debtors or the Reorganized Debtors in connection with the prosecution, settlement, and enforcement of Onyx Enterprises Int’l, Corp v. Volkswagen Group of America, Inc., Civil Action Number 3:20-cv-09976-BRM-ZNQ currently pending in the United States District Court for the District of New Jersey.

74. “Management Incentive Plan” means the management incentive plan which shall be disclosed in the Plan Supplement.

75. “Material Adverse Effect” means a material adverse change in, or any event or occurrence (other than (i) the events or occurrences disclosed to the DIP Agent in writing prior to the Effective Date or (ii) the events or occurrences resulting from the commencement of these Chapter 11 Cases and the continuation and prosecution thereof) including but not limited to any defaults under prepetition agreements, so long as the exercise of remedies as a result of such defaults are stayed under the Bankruptcy Code which could reasonably be expected to result in a material adverse change in (a) the business, operations, financial condition, assets or liabilities of the Debtors and its subsidiaries taken as a whole, (b) the ability of the Debtors to perform their payment obligations under DIP Facility Documents to which they are a party, (c) the legality, validity, binding effect, or enforceability of the DIP Facility Documents, or (d) the rights and remedies of or benefits available to the DIP Lenders or DIP Agent under the DIP Facility.

76. “MCA Claims” means any Claim against the Debtors arising from either the Wave Agreement or the RCNY Agreement.

77. “MIP Awards” means the options, phantom awards or other equity-based compensation issued pursuant to the Management Incentive Plan.

78. “New Board” means the board of directors of Reorganized PARTS iD, which shall contain four members appointed by the Plan Sponsor in its sole discretion. The identities of directors on the New Board as of the Effective Date shall be disclosed in the Plan Supplement, to the extent known at the time of filing of the Plan Supplement, but in any event prior to the Effective Date.

79. “New Common Stock” means the common equity interests of Reorganized PARTS iD having the terms set forth in the New Governance Documents to be issued on the Effective Date, subject to the terms and conditions of the New Shareholders Agreement.

80. “New Governance Documents” means the governance documents for each of the Reorganized Debtors, which documents shall be determined by the Plan Sponsor in consultation with the Debtors.

81. “New Money DIP Claims” means any Claim arising under, or related to, the New Money DIP Loans.

82. “New Money DIP Loans” means, means, collectively, the DIP Loans that are not Roll-Up DIP Loans.

83. “New Preferred Stock” means the convertible, participating preferred stock of Reorganized PARTS iD having the terms set forth in the New Governance Documents to be issued on the Effective Date in connection with the Direct Investment Preferred Equity Raise and Direct Investment Documents, subject to the terms and conditions of the Direct Investment Documents, and the New Shareholders Agreement.

84. “New Shareholders Agreement” means that certain shareholders agreement that will govern certain matters related to the governance of Reorganized Debtors, the New Preferred Stock and the New Common Stock.

85. “November NPA” means that certain Note Purchase Agreement dated as of November 2, 2023, by and among PARTS iD, Inc. and 2642186 Ontario Inc., pursuant to which PARTS iD issued a promissory note in the aggregate principal amount $1,000,000.

86. “Other Priority Claim” means any Claim, other than an Administrative Claim or a Priority Tax Claim, entitled to priority in right of payment under section 507(a) of the Bankruptcy Code.

87. “Other Secured Claim” means any Secured Claim other than a DIP Claim, a Senior Secured Note Claim or a Subordinated Secured Note Claim.

88. “Person” has the meaning set forth in section 101(41) of the Bankruptcy Code.

89. “Petition Date” means the first date on which any of the Debtors commence a Chapter 11 Case.

90. “Plan” means this Joint Prepackaged Chapter 11 Plan of Reorganization of PARTS iD, Inc. and PARTS iD, LLC (either in its present form or as it may be amended, modified or supplemented from time to time in accordance with the Bankruptcy Code, the Bankruptcy Rules, or the terms hereof, as the case may be) and the Plan Supplement, which is incorporated herein by reference, including all exhibits and schedules hereto and thereto.

91. “Plan Distribution” means a payment or distribution to Holders of Allowed Claims or other eligible Entities in accordance with the Plan.

92. “Plan Distribution Amount” means a portion of the Direct Investment Preferred Equity Raise in an amount projected to be no greater than $18,600,000.

93. “Plan Sponsor” means Fifth Star, Inc.

94. “Plan Sponsor Protections” means customary plan sponsor protections acceptable to the Plan Sponsor, including a (x) break-up fee not to exceed 3% of the Direct Equity Commitments, (y) expense reimbursement of up to $750,000 in the event that a competing plan of reorganization is confirmed, and (z) minimum financing overbid in the amount of $500,000.

95. “Plan Supplement” means the compilation of documents and forms of documents, agreements, schedules, and exhibits to the Plan (in each case, as may be altered, amended, modified, or supplemented from time to time in accordance with the terms hereof and in accordance with the Bankruptcy Code and Bankruptcy Rules) to be Filed with the Bankruptcy Court, and any additional documents Filed as amendments to the Plan Supplement, including the following, without limitation, as applicable: (a) certain of the New Governance Documents; (b) to the extent known, the identities of the members of the New Board; (c) the Rejected Executory Contracts and Unexpired Leases Schedule (if any); (d) the Schedule of Proposed Cure Amounts; and (e) the Schedule of Retained Causes of Action. To the extent any document to be set forth in the Plan Supplement is an exhibit to the Disclosure Statement, the Plan Supplement may cross-refer to such exhibit. The Debtors shall have the right, with the consent of the Plan Sponsor, to alter, amend, modify, or supplement the documents contained in the Plan Supplement in accordance with this Plan on or before the Effective Date. The Plan Supplement shall be deemed incorporated into and part of the Plan as if set forth herein in full; provided that in the event of a conflict between the Plan and the Plan Supplement, the Plan Supplement shall control in accordance with Article I.G. Notwithstanding anything to the contrary herein, the Plan Supplement, and any exhibits, agreements, forms, notices, and other documents contained therein shall be in form and substance acceptable to the Plan Sponsor.

96. “PARTS iD” means PARTS iD, Inc.

97. “Prepetition Plan Sponsor Loan” means the $3.0 million prepetition loan advanced to the Debtors by the Plan Sponsor pursuant to the DIP Facility Documents.

98. “Priority Tax Claim” means any Claim of a Governmental Unit of the kind specified in section 507(a)(8) of the Bankruptcy Code.

99. “Pro Rata” means (a) the proportion that an Allowed Claim or an Allowed Interest in a particular Class bears to the aggregate amount of Allowed Claims or Allowed Interests in that Class; and (b) in the case of a Roll-Up DIP Claim, the proportion that an Allowed DIP Claim bears to the aggregate amount of all Allowed DIP Claims.

100. “Professional” means an Entity: (a) employed in the Chapter 11 Cases pursuant to a Bankruptcy Court order in accordance with sections 327, 328, 363, or 1103 of the Bankruptcy Code and to be compensated for services rendered prior to or as of the Confirmation Date, pursuant to sections 327, 328, 329, 330, or 331 of the Bankruptcy Code; or (b) awarded compensation and reimbursement by the Bankruptcy Court pursuant to section 503(b)(4) of the Bankruptcy Code.

101. “Professional Escrow Account” means an account funded by the Debtors with Cash on the Effective Date in an amount equal to the Professional Fee Amount.

102. “Professional Fee Amount” means the aggregate amount of Professional Fee Claims and other unpaid fees and expenses that the Professionals estimate they have incurred or will incur in rendering services to the Debtors prior to and as of the Confirmation Date, which estimates Professionals shall deliver to the Debtors as set forth in Article II.C of the Plan.

103. “Professional Fee Claim” means any Claim by a Professional for compensation for services rendered or reimbursement of expenses incurred by such Professional through and including the Confirmation Date under sections 328, 330, 331, 503(b)(2), 503(b)(4), or 503(b)(5) of the Bankruptcy Code to the extent such fees and expenses have not been paid pursuant to an order of the Bankruptcy Court. To the extent the Bankruptcy Court denies or reduces by a Final Order any amount of a Professional’s requested fees and expenses, then the amount by which such fees or expenses are reduced or denied shall reduce the applicable Professional Fee Claim.

104. “Proof of Claim” means a proof of Claim Filed against any of the Debtors in the Chapter 11 Cases.

105. “RCNY Agreement” means that certain Future Receivables Agreement dated as of November 30, 2023, by and between Riverside Capital NY and PARTS iD, Inc.

106. “RCNY Distribution” means an amount of Cash equal to the difference between the aggregate sum of periodic payments made under the terms of the RCNY Agreement and $1,384,500.

107. “Reinstate,” “Reinstated,” or “Reinstatement” means (a) leaving unaltered the legal, equitable and contractual rights to which a Claim or Interest entitles the holder of such Claim or Interest, or (b) notwithstanding any contractual provision or applicable law that entitles the holder of such Claim or Interest to demand or receive accelerated payment of such Claim or Interest after the occurrence of a default, (i) curing any such default that occurred before or after the Petition Date, other than a default of a kind specified in section 365(b)(2) of the Bankruptcy Code; (ii) reinstating the maturity of such Claim or Interest as such maturity existed before such default; (iii) compensating the holder of such Claim or Interest for any damages incurred as a result of any reasonable reliance by such Holder on such contractual provision or such applicable law; (iv) if such Claim or Interest arises from any failure to perform a nonmonetary obligation other than a default arising from failure to operate under a nonresidential real property lease subject to section 365(b)(1)(A) of the Bankruptcy Code, compensating the holder of such Claim or Interest (other than the Debtors or an insider of the Debtors) for any actual pecuniary loss incurred by such holder as the result of such failure; and (v) not otherwise altering the legal, equitable or contractual rights to which such Claim or Interest entitles the holder thereof.

108. “Rejected Executory Contracts and Unexpired Leases Schedule” means, to the extent applicable, a schedule (including any amendments, supplements, or modifications thereto) of Executory Contracts and Unexpired Leases (if any) to be rejected by the Debtors pursuant to the Plan, which schedule (if any) shall be in form and substance acceptable to the Plan Sponsor and included in the Plan Supplement.

109. “Related Parties” means, with respect to an Entity, collectively, (a) such Entity’s current and former Affiliates and (b) such Entity’s and such Entity’s current and former Affiliates’ directors, managers, officers, shareholders, equity holders (regardless of whether such interests are held directly or indirectly), predecessors, successors, assigns (whether by operation of law or otherwise), subsidiaries, financial advisors, attorneys, accountants, consultants, other representatives, and other professionals, independent contractors, representatives, advisors, each solely in their capacities as such.

110. “Released Parties” means collectively and each of, and in each case in their capacity as such: (a) the Debtors; (b) the Reorganized Debtors; (c) the DIP Agent and DIP Lenders; (d) the Plan Sponsor; (e) the Senior Secured Lender; (f) current and former Affiliates of each Entity in clause (a) through the following clause (g); and (g) each Related Party of each Entity in clause (a) through this clause (g); provided, however, that, notwithstanding the foregoing, any holder of a Claim or Interest that is not a Releasing Party shall not be a “Released Party.”

111. “Releasing Parties” means collectively and each of, and in each case in its capacity as such: (a) all Holders of Claims or Interests that vote to accept the Plan; (b) all Holders of Claims or Interests that are entitled to vote on the Plan who vote to reject the Plan and opt in to the releases provided for in Article VIII.D by checking the box on the ballot indicating that they opt in to granting such releases in the Plan submitted on or before the Voting Deadline; (c) the DIP Agent and DIP Lenders; (d) to the maximum extent permitted by Law, each current and former Affiliate of each Entity in clause (a) through the following clause (e), solely to the extent the pertinent Entity can bind any such Affiliate to the terms of this Plan under applicable law; and (e) each Related Party of each Entity in clause (a) through this clause (e), solely to the extent the pertinent Entity can bind any such Related Party to the terms of this Plan under applicable law.

112. “Reorganized Debtors” means, collectively, the Debtors, as reorganized pursuant to and under the Plan, on and after the Effective Date, or any successor or assign thereto, by merger, consolidation, or otherwise, including any new entity established in connection with the implementation of the Plan.

113. “Reorganized PARTS iD” means PARTS iD, or any successor or assign, by merger, consolidation, or otherwise, on or after the Effective Date.

114. “Restructuring Expenses” means all fees and expenses owed to or incurred by Fifth Star, Inc. in its capacity as Plan Sponsor, DIP Agent, or DIP Lender, including the reasonable and documented prepetition and postpetition fees and out-of-pocket expenses incurred by each of (i) Sidley Austin LLP, (ii) Young Conaway Stargatt & Taylor, LLP, and (iii) CohnReznick LLP.

115. “Restructuring Transactions” means any transaction and any actions as may be necessary or appropriate to effect a corporate restructuring of the Debtors’ and the Reorganized Debtors’ respective businesses or a corporate restructuring of the overall corporate structure of the Debtors on the terms set forth in the Plan, including the issuance of all Securities, notes, instruments, certificates, and other documents required to be issued pursuant to the Plan, one or more intercompany mergers, consolidations, amalgamations, arrangements, continuances, restructurings, conversions, dissolutions, transfers, liquidations, or other corporate transactions, as described in Article IV.C of the Plan.

116. “Roll-Up DIP Claims” means any Claim rising under, or related to, the Roll-Up DIP Loans.

117. “Roll-Up DIP Loans” means, collectively, the DIP Loans resulting from the exchange and conversion of the Bridge Loans into the DIP Facility pursuant to the terms of the DIP Facility Documents and the DIP Order.

118. “Schedule of Proposed Cure Amounts” means any schedule (including any amendments, supplements, or modifications thereto) of the Debtors’ proposed Cure amounts (if any) with respect to each of the Executory Contracts and Unexpired Leases to be assumed by the Debtors pursuant to the Plan, which shall be in form and substance acceptable to the Plan Sponsor.

119. “Schedule of Retained Causes of Action” means the schedule of certain Causes of Action of the Debtors that are not released, waived, or transferred pursuant to the Plan, as the same may be amended, modified, or supplemented from time to time, in each case, in form and substance acceptable to the Plan Sponsor.

120. “Secured Claim” means a Claim that is: (a) secured by a Lien on property in which any of the Debtors has an interest, which Lien is valid, perfected, and enforceable pursuant to applicable law or by reason of a Bankruptcy Court order, or that is subject to a valid right of setoff pursuant to section 553 of the Bankruptcy Code, to the extent of the value of the creditor’s interest in the Debtors’ interest in such property or to the extent of the amount subject to setoff, as applicable, as determined pursuant to section 506(a) of the Bankruptcy Code, or (b) Allowed pursuant to the Plan, or separate order of the Bankruptcy Court, as a secured claim; including, for the avoidance of doubt, the DIP Claims, the Senior Secured Note Claims, and the Subordinated Secured Note Claims.

121. “Securities Act” means the Securities Act of 1933, as amended, 15 U.S.C. §§ 77a–77aa, or any similar federal, state, or local law, as now in effect or hereafter amended, and the rules and regulations promulgated thereunder.

122. “Security” means any security, as defined in section 2(a)(1) of the Securities Act.

123. “Senior Secured Lender” means Lind Global Fund II, LP.

124. “Senior Secured Note Claims” means any Claim against the Debtors derived from, based upon, or arising under the Senior Securities Purchase Agreement.

125. “Senior Securities Purchase Agreement” means that certain Securities Purchase Agreement (as amended, supplemented, restated, and/or modified from time to time) dated as of July 14, 2023, by and between PARTS iD, Inc. and Lind Global Fund II, LP.

126. “Solicitation Agent” means Kroll Restructuring Administration LLC, the notice, claims, and solicitation agent proposed to be retained by the Debtors in the Chapter 11 Cases.

127. “Solicitation Materials” means, collectively, the solicitation materials with respect to the Plan, including the Disclosure Statement and related ballots, in each case, in form and substance acceptable to the Plan Sponsor.

128. “Subordinated Secured Note Claims” means any Claim against the Debtors derived from, based upon, or arising under the Subordinated Note Purchase Agreements.

129. “Subordinated Note Purchase Agreements” means, collectively, (i) that certain Note and Warrant Purchase Agreement dated as of March 6, 2023, by and among PARTS iD, Inc. and the purchasers thereto; (ii) that certain Note and Warrant Purchase Agreement dated as of July 13, 2023, by and among PARTS iD, Inc. and the purchasers thereto; and (iii) that certain Note Purchase Agreement dated as of October 20, 2023, by and among PARTS iD, Inc. and Lev Peker.

130. “Third-Party Release” means the releases set forth in Article VIII.D of the Plan.

131. “Tranche 1 Roll-Up DIP Claim” means the Roll-Up DIP Claims derived from the exchange and conversion of the Prepetition Plan Sponsor Loan under the DIP Facility.

132. “Tranche 2 Roll-Up DIP Claims” means the Roll-Up DIP Claims derived from or relating to the exchange and conversions of the (i) the November NPA, or (ii) the “Initial Loan” as defined in the December NPA under the DIP Facility.

133. “Tranche 3 Roll-Up DIP Claim” means the Roll-Up DIP Claim derived from or relating to the exchange and conversion of the “New Loan” as defined in the December NPA under the DIP Facility.

134. “Unclaimed Distribution” means any distribution under the Plan on account of an Allowed Claim or Allowed Interest to a Holder that has not: (a) accepted a particular distribution or, in the case of distributions made by check, negotiated such check within 180 calendar days of receipt; (b) given notice to the Reorganized Debtors of an intent to accept a particular distribution within 180 calendar days of receipt; (c) responded to the Debtors’ or Reorganized Debtors’ requests for information necessary to facilitate a particular distribution prior to the deadline included in such request for information; or (d) timely taken any other action necessary to facilitate such distribution.

135. “Unexpired Lease” means a lease to which one or more of the Debtors is a party that is subject to assumption or rejection under section 365 of the Bankruptcy Code.

136. “Unimpaired” means with respect to a Class of Claims or Interests, a Class of Claims or Interests that is unimpaired within the meaning of section 1124 of the Bankruptcy Code.

137. “Unsecured Claim” means any Claim that is not a Secured Claim.

138. “U.S. Trustee” means the United States Trustee for the District of Delaware.

139. “Vendor” means a vendor whose products or SKUs are sold by the Debtors on any of the Debtors’ platforms.

140. “Vendor Claim” means any Unsecured Claim held by a Vendor that is not a Convenience Claim.

141. “Wave Agreement” means that certain Standard Merchant Cash Advance Agreement dated as of November 30, 2023, by and between WAVE ADVANCE INC. and Parts iD, Inc.

142. “Wave Distribution” means an amount of Cash equal to the difference between the aggregate sum of periodic payments made under the terms of the Wave Agreement and $1,430,000.

Rules of Interpretation

For purposes of this Plan: (1) in the appropriate context, each term, whether stated in the singular or the plural, shall include both the singular and the plural, and pronouns stated in the masculine, feminine, or neuter gender shall include the masculine, feminine, and the neuter gender; (2) unless otherwise specified, any reference herein to a contract, lease, instrument, release, or other agreement or document being in a particular form or on particular terms and conditions means that the referenced document shall be substantially in that form or substantially on those terms and conditions; (3) unless otherwise specified, any reference herein to an existing document, schedule, or exhibit, whether or not Filed, having been Filed or to be Filed shall mean that document, schedule, or exhibit, as it may thereafter be amended, modified, or supplemented in accordance with the Plan; (4) any reference to an Entity as a Holder of a Claim or Interest includes that Entity’s successors and assigns; (5) unless otherwise specified, all references herein to “Articles” are references to Articles hereof or hereto; (6) unless otherwise specified, all references herein to exhibits are references to exhibits in the Plan Supplement; (7) unless otherwise specified, the words “herein,” “hereof,” and “hereto” refer to the Plan in its entirety rather than to a particular portion of the Plan; (8) subject to the provisions of any contract, certificate of incorporation, bylaw, instrument, release, or other agreement or document entered into in connection with the Plan, the rights and obligations arising pursuant to the Plan shall be governed by, and construed and enforced in accordance with the applicable federal law, including the Bankruptcy Code and Bankruptcy Rules; (9) captions and headings to Articles are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of the Plan; (10) unless otherwise specified herein, the rules of construction set forth in section 102 of the Bankruptcy Code shall apply; (11) any term used in capitalized form herein that is not otherwise defined but that is used in the Bankruptcy Code or the Bankruptcy Rules shall have the meaning assigned to that term in the Bankruptcy Code or the Bankruptcy Rules, as the case may be; (12) all references to docket numbers of documents Filed in the Chapter 11 Cases are references to the docket numbers under the Bankruptcy Court’s CM/ECF system; (13) all references to statutes, regulations, orders, rules of courts, and the like shall mean as amended from time to time, and as applicable to the Chapter 11 Cases, unless otherwise stated; (14) the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, and shall be deemed to be followed by the words “without limitation”; (15) references to “Proofs of Claim,” “Holders of Claims,” “Disputed Claims,” and the like shall include “Proofs of Interest,” “Holders of Interests,” “Disputed Interests,” and the like, as applicable; (16) any immaterial effectuating provisions may be interpreted by the Reorganized Debtors in such a manner that is consistent with the overall purpose and intent of the Plan, all without further notice to or action, order, or approval of the Bankruptcy Court or any other Entity; and (17) all references herein to consent, acceptance, or approval may be conveyed by counsel for the respective parties that have such consent, acceptance, or approval rights, including by electronic mail.

Computation of Time

Unless otherwise specifically stated in the Plan, Bankruptcy Rule 9006(a) shall apply in computing any period of time prescribed or allowed herein. If the date on which a transaction may occur pursuant to the Plan shall occur on a day that is not a Business Day, then such transaction shall, instead, occur on the next succeeding Business Day. Any action to be taken on the Effective Date may be taken on or as soon as reasonably practicable after the Effective Date.

Governing Law

Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules) or unless otherwise specifically stated, the laws of the State of Delaware, without giving effect to the principles of conflict of laws, shall govern the rights, obligations, construction, and implementation of the Plan, any agreements, documents, instruments, or contracts executed or entered into in connection with the Plan (except as otherwise set forth in those agreements, in which case the governing law of such agreement shall control), and corporate governance matters.

Reference to Monetary Figures

All references in the Plan to monetary figures shall refer to currency of the United States of America, unless otherwise expressly provided herein.

Reference to the Debtors or the Reorganized Debtors

Except as otherwise specifically provided in the Plan to the contrary, references in the Plan to the Debtors or the Reorganized Debtors shall mean the Debtors and the Reorganized Debtors, as applicable, to the extent the context requires.

Controlling Document

In the event of an inconsistency between the Plan and the Disclosure Statement, the terms of the Plan shall control in all respects. In the event of an inconsistency between the Plan and the Plan Supplement, the terms of the relevant provision in the Plan Supplement shall control (unless stated otherwise in such Plan Supplement document or in the Confirmation Order). In the event of an inconsistency between the Plan, Plan Supplement, or the Disclosure Statement on the one hand, and the Confirmation Order on the other hand, the Confirmation Order shall control.

Article II.
ADMINISTRATIVE CLAIMS AND PRIORITY CLAIMS

Administrative Claims

DIP Claims

(i)

the Holder of an Allowed New Money DIP Claim shall receive its Pro Rata share of the New Preferred Stock;

(ii)

each Holder of an Allowed Tranche 1 Roll-Up DIP Claim or Tranche 2 Roll-Up DIP Claim shall receive its Pro Rata share of New Common Stock; and

(iii)

the Holder of an Allowed Tranche 3 Roll-Up DIP Claim shall receive Cash equal to the amount of such Allowed Tranche 3 Roll-Up DIP Claim.

Professional Fee Claims

Final Fee Applications and Payment of Professional Fee Claims

Professional Escrow Account

Professional Fee Amount

Post-Confirmation Date Fees and Expenses

Priority Tax Claims

Payment of Statutory Fees

Restructuring Expenses

Article III.
CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS

Classification of Claims and Interests

The Plan is premised upon the substantive consolidation of the Debtors, as set forth in more detail below, solely for the purposes of voting, determining which Claims have accepted the Plan, Confirmation of the Plan, and the resultant treatment of Claims and Interests and distributions under the terms of the Plan. Accordingly, the Plan shall serve as a motion for entry of a Bankruptcy Court order approving the substantive consolidation of the Debtors for these limited purposes.

Except for the Claims addressed in Article II hereof, all Claims and Interests are classified in the Classes set forth below in accordance with sections 1122 and 1123(a)(1) of the Bankruptcy Code. A Claim or an Interest, or any portion thereof, is classified in a particular Class only to the extent that any portion of such Claim or Interest fits within the description of that Class and is classified in other Classes to the extent that any portion of the Claim or Interest fits within the description of such other Classes. A Claim or an Interest also is classified in a particular Class for the purpose of receiving distributions under the Plan only to the extent that such Claim or Interest is an Allowed Claim or Allowed Interest in that Class and has not been paid, released, or otherwise satisfied prior to the Effective Date.

The categories of Claims and Interests listed below classify Claims and Interests for all purposes, including voting, Confirmation, and distribution pursuant hereto and under sections 1122 and 1123(a)(1) of the Bankruptcy Code. The Plan deems a Claim or Interest to be classified in a particular Class only to the extent that the Claim or Interest qualifies within the description of that Class and shall be deemed classified in a different Class to the extent that any remainder of such Claim or Interest qualifies within the description of such different Class. A Claim or an Interest is in a particular Class only to the extent that any such Claim or Interest is Allowed in that Class and has not been paid or otherwise settled prior to the Effective Date.

Class	Claims and Interests	Status	Voting Rights
Class 1	Other Priority Claims	Unimpaired	Not Entitled to Vote (Deemed to Accept)
Class 2	Other Secured Claims	Unimpaired	Not Entitled to Vote (Deemed to Accept)
Class 3	Senior Secured Note Claims	Impaired	Entitled to Vote
Class 4	MCA Claims	Impaired	Entitled to Vote
Class 5	Subordinated Secured Note Claims	Impaired	Entitled to Vote
Class 6	Litigation Funding Claims	Unimpaired	Not Entitled to Vote (Deemed to Accept)
Class 7	Vendor Claims	Impaired	Entitled to Vote
Class 8	Convenience Claims	Impaired	Entitled to Vote
Class 9	General Unsecured Claims	Impaired	Not Entitled to Vote (Deemed to Reject)
Class 10	Intercompany Claims	Impaired	Not Entitled to Vote (Deemed to Reject)
Class 11	Intercompany Interests	Unimpaired / Impaired	Not Entitled to Vote (Deemed to Accept / Reject)
Class 12	Existing Equity Interests	Impaired	Not entitled to Vote (Deemed to Reject)

Treatment of Claims and Interests

Each Holder of an Allowed Claim or Allowed Interest, as applicable, shall receive under the Plan the treatment described below in full and final satisfaction, settlement, release, and discharge of and in exchange for such Holder’s Allowed Claim or Allowed Interest, except to the extent different treatment is agreed to by the Debtors or the Reorganized Debtors, as applicable, and the Holder of such Allowed Claim or Allowed Interest, as applicable. Unless otherwise indicated, the Holder of an Allowed Claim or Allowed Interest, as applicable, shall receive such treatment on or about the Effective Date (or, if payment is not then due, in accordance with such Claim’s or Interest’s terms in the ordinary course of business) or as soon as reasonably practicable thereafter.

Class 1 – Other Priority Claims

(a)

Classification: Class 1 consists of all Other Priority Claims.

(b)

Treatment: Each Holder of an Allowed Other Priority Claim shall receive, in full and final satisfaction of such Allowed Other Priority Claim, (i) an amount of Cash equal to the amount of such Allowed Other Priority Claim, (ii) other treatment consistent with the provisions of section 1129(a)(9) of the Bankruptcy Code, or (iii) such other terms as agreed to among the Debtors and the holders thereof, subject to the consent of the Plan Sponsor.

(c)

Voting: Class 1 is Unimpaired under the Plan. Holders of Allowed Other Priority Claims are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, such Holders are not entitled to vote to accept or reject the Plan.

Class 2 – Other Secured Claims

(a)

Classification: Class 2 consists of all Other Secured Claims.

(b)

Treatment: Each Holder of an Allowed Other Secured Claim shall receive, in full and final satisfaction of such Allowed Other Secured Claim, at the option of the applicable Debtor, payment in full in Cash of such Holder’s Allowed Other Secured Claim or such other treatment rendering such Holder’s Allowed Other Secured Claim Unimpaired, subject to the consent of the Plan Sponsor.

(c)

Voting: Class 2 is Unimpaired under the Plan. Holders of Allowed Other Priority Claims are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, such Holders are not entitled to vote to accept or reject the Plan.

Class 3 – Senior Secured Note Claims

(a)

Classification: Class 3 consists of all Senior Secured Note Claims.

(b)

Allowed Amount: As of the Effective Date, the Senior Secured Note Claims shall be Allowed, and deemed to be Allowed Claims, in the aggregate amount of $4,879,298.

(c)

Treatment: Each Holder of an Allowed Senior Secured Note Claim shall receive, on the Effective Date, in full and final satisfaction of such Allowed Senior Secured Note Claim, its Pro Rata share of payment in Cash in the aggregate amount of $4,224,500 minus any payments made to such Holders on account of such Claims during these Chapter 11 Cases.

(d)

Voting: Class 3 is Impaired under the Plan. Holders of Allowed Senior Secured Note Claims are entitled to vote to accept or reject the Plan.

Class 4 – MCA Claims

(a)

Classification: Class 4 consists of all MCA Claims.

(b)

Treatment: Each Holder of an Allowed MCA Claim shall receive, on the Effective Date, in full and final satisfaction of such Allowed MCA Claim, either the Wave Distribution or the RCNY Distribution, as applicable.

(c)

Voting: Class 4 is Impaired under the Plan. Holders of Allowed MCA Claims are entitled to vote to accept or reject the Plan.

Class 5 – Subordinated Secured Note Claims

(a)

Classification: Class 5 consists of all Subordinated Secured Note Claims.

(b)

Treatment: Each Holder of an Allowed Subordinated Secured Note Claim shall, at the option of the applicable Holder, be entitled to receive two (2) of the following; provided, however, that no Holder of an Allowed Subordinated Secured Note Claim shall receive, in the aggregate, more than 100% of the Allowed amount of such Holder’s Subordinated Secured Note Claim the aggregate equal the full amount of such Holder’s Allowed Subordinated Secured Note Claim:

(i)

payment in Cash of 55% of such Allowed Subordinated Secured Note Claim;

(ii)

such Holder’s Pro Rata share from the net recoveries (after payments of fees, litigation financing and taxes) from the Litigation Proceeds; and

(iii)

payment in Cash by the Reorganized Debtors upon the achievement of an EBITDA target to be agreed between the Plan Sponsor and the Debtors, which shall be disclosed in the Plan Supplement.

(c)

Voting: Class 5 is Impaired under the Plan. Holders of Allowed Subordinated Secured Note Claims are entitled to vote to accept or reject the Plan.

Class 6 – Litigation Funding Claims

(a)

Classification: Class 6 consists of all Litigation Funding Claims.

(b)

Treatment: Each Allowed Litigation Funding Claim shall be Reinstated on the Effective Date.

(c)

Voting: Class 6 is Unimpaired under the Plan. Holders of Allowed Litigation Funding Claims are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code.

Class 7 – Vendor Claims

(a)

Classification: Class 7 consists of all Vendor Claims.

(b)

Treatment: Except to the extent that a Holder of an Allowed Vendor Claim agrees to a less favorable treatment, in exchange for full and final satisfaction, settlement, release, and discharge of each Allowed Vendor Claim and as consideration for such Holder’s agreement to maintain Favorable Trade Terms after the Effective Date and to execute such further documentation reflecting the Favorable Trade Terms as the Reorganized Debtors may reasonably request, each Holder of an Allowed Vendor Claim shall receive:

(i)

on the later of the Effective Date and the date such Vendor Claim becomes Allowed, payment in Cash in an amount equal to 25% of such Allowed Vendor Claim; and

(ii)

beginning the month following the Effective Date or the date such Vendor Claim becomes Allowed, payment in the aggregate amount equal to 30% of its Allowed Vendor Claim, paid in equal monthly installments over a period of 36 months; provided, however, that the Reorganized Debtors’ obligations to make such installment payments are contingent upon the Holder of the Allowed Vendor Claim continuing to maintain and provide Favorable Trade Terms (unless such Holder is permitted to modify the trade terms as a result of the Reorganized Debtors’ failure to make a payment owed to such Holder).

(c)

Voting: Class 7 is Impaired under the Plan. Holders of Allowed Vendor Claims are entitled to vote to accept or reject the Plan.

Class 8 – Convenience Claims

(a)

Classification: Class 8 consists of all Convenience Claims.

(b)

Treatment: Except to the extent that a Holder of an Allowed Convenience Claim agrees to a less favorable treatment, in exchange for full and final satisfaction settlement, release, and discharge of each Allowed Convenience Claim, on the Effective Date each Holder of an Allowed Convenience Claim shall receive Cash in an amount equal to 65% of its Allowed Convenience Claim.

(c)

Voting: Class 8 is Impaired under the Plan. Holders of Allowed Convenience Claims are entitled to vote to accept or reject the Plan.

Class 9 – General Unsecured Claims

(a)

Classification: Class 9 consists of all General Unsecured Claims.

(b)

Treatment: Each Allowed General Unsecured Claim shall be cancelled, released, and extinguished without any distribution on account of such General Unsecured Claim.

(c)

Voting: Class 9 is Impaired under the Plan. Holders of Allowed General Unsecured Claims are conclusively presumed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, such Holders are not entitled to vote to accept or reject the Plan.

10.

Class 10 – Intercompany Claims

(a)

Classification: Class 10 consists of all Intercompany Claims.

(b)

Treatment: Each Allowed Intercompany Claim shall be cancelled, released, and extinguished without any distribution on account of such Intercompany Claims.

(c)

Voting: Class 10 is Impaired under the Plan. Holders of Intercompany Claims are conclusively presumed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, such Holders are not entitled to vote to accept or reject the Plan.

11.

Class 11 – Intercompany Interests

(a)

Classification: Class 11 consists of all Intercompany Interests.

(b)

Treatment: Each Allowed Intercompany Interest shall be, either: (i) Reinstated for administrative convenience; or (ii) cancelled, released, and extinguished without any distribution on account of such Intercompany Interests, or receive such other tax-efficient treatment (to the extent reasonably practicable) as determined by the Debtors or Reorganized Debtors, as applicable, with the consent of the Plan Sponsor.

(c)

Voting: Class 11 is Unimpaired if the Intercompany Interests are Reinstated or Impaired if the Intercompany Interests are cancelled under the Plan. Holders of Intercompany Interests are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code or rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, such Holders are not entitled to vote to accept or reject the Plan.

12.

Class 12 – Existing Equity Interests

(a)

Classification: Class 12 consists of all Existing Equity Interests.

(b)

Treatment: Each Allowed Existing Equity Interest shall be cancelled, released and extinguished. Class 12 is not entitled to receive any Distribution under the Plan.

Voting: Class 12 is Impaired under the Plan. Holders of Existing Equity Interests are conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. Therefore, Holders of Existing Equity Interests are not entitled to vote to accept or reject the Plan.

Special Provision Governing Unimpaired Claims

Except as otherwise provided in the Plan, nothing under the Plan shall affect the Debtors’ or Reorganized Debtors’ rights in respect of any Claims that are Unimpaired, including all rights in respect of legal and equitable defenses to or setoffs or recoupments against any such Claims that are Unimpaired.

Elimination of Vacant Classes

Any Class of Claims or Interests that does not have a Holder of an Allowed Claim or Allowed Interest or a Claim or Interest temporarily Allowed by the Bankruptcy Court as of the date of the Confirmation Hearing shall be deemed eliminated from the Plan for purposes of voting to accept or reject the Plan and for purposes of determining acceptance or rejection of the Plan by such Class pursuant to section 1129(a)(8) of the Bankruptcy Code.

Intercompany Interests.

To the extent Reinstated under the Plan, distributions (if any) on account of Intercompany Interests are not being received by Holders of such Intercompany Interests on account of their Intercompany Interests but for the purposes of administrative convenience and due to the importance of maintaining the prepetition corporate structure for the ultimate benefit of the holders of New Common Stock, and in exchange for the Debtors’ and Reorganized Debtors’ agreement under the Plan to make certain distributions to the Holders of Allowed Claims.

Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy Code.

Section 1129(a)(10) of the Bankruptcy Code shall be satisfied for purposes of Confirmation by acceptance of the Plan by one or more of the Classes entitled to vote pursuant to Article III.B of the Plan. The Debtors shall seek Confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code with respect to any rejecting Class of Claims or Interests. The Debtors reserve the right, subject to the prior consent of the Plan Sponsor, to modify the Plan in accordance with Article X hereof to the extent, if any, that Confirmation pursuant to section 1129(b) of the Bankruptcy Code requires modification, including by modifying the treatment applicable to a Class of Claims or Interests to render such Class of Claims or Interests Unimpaired to the extent permitted by the Bankruptcy Code and the Bankruptcy Rules.

Controversy Concerning Impairment.

If a controversy arises as to whether any Claims or Interests, or any Class of Claims or Interests, are Impaired, the Bankruptcy Court shall, after notice and a hearing, determine such controversy on or before the Confirmation Date.

Subordinated Claims and Interests.

The allowance, classification, and treatment of all Allowed Claims and Allowed Interests and the respective distributions and treatments under the Plan take into account and conform to the relative priority and rights of the Claims and Interests in each Class in connection with any contractual, legal, and equitable subordination rights relating thereto, whether arising under general principles of equitable subordination, section 510(b) of the Bankruptcy Code, or otherwise. Pursuant to section 510 of the Bankruptcy Code, the Debtors or Reorganized Debtors reserve the right, subject to the prior consent of the Plan Sponsor, to re-classify any Allowed Claim or Allowed Interest in accordance with any contractual, legal, or equitable subordination relating thereto.

Article IV.
MEANS FOR IMPLEMENTATION OF THE PLAN

Substantive Consolidation

Except as expressly provided in this Plan, each Debtor shall continue to maintain its separate corporate existence for all purposes other than the treatment of Claims under this Plan and distributions hereunder. On the Effective Date, (i) all Intercompany Claims among the Debtors shall be eliminated and there shall be no distributions on account of such Intercompany Claims; (ii) each Claim Filed or to be Filed against more than one Debtor shall be deemed Filed only against one consolidated Debtor and shall be deemed a single Claim against and a single obligation of the Debtors, and (iii) any joint or several liability of the Debtors shall be deemed one obligation of the Debtors, with each of the foregoing effective retroactive to the Petition Date. Except as otherwise set forth in the Plan, on the Effective Date all Claims based upon guarantees of collection, payment or performance made by one Debtor as to the obligations of another Debtor shall be released and of no further force and effect. Such deemed substantive consolidation shall not (other than for purposes relating to the Plan) affect the legal and corporate structure of the Reorganized Debtors.

General Settlement of Claims and Interests

Unless otherwise set forth in this Plan, pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, and in consideration for the classification, distributions, releases, and other benefits provided under the Plan, on the Effective Date, the provisions of the Plan shall constitute a good-faith compromise and settlement of all Claims, Interests, and controversies released, settled, compromised, discharged, or otherwise resolved pursuant to the Plan whether under any provision of chapter 5 of the Bankruptcy Code, on any equitable theory (including equitable subordination, equitable disallowance, or unjust enrichment) or otherwise. The Plan shall be deemed a motion to approve the good-faith compromise and settlement of all such Claims, Interests, and controversies, and the entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of such compromise and settlement under section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, as well as a finding by the Bankruptcy Court that such settlement and compromise is fair, equitable, reasonable, and in the best interests of the Debtors and their Estates. Subject to Article VI hereof, all distributions made to Holders of Allowed Claims and Allowed Interests (as applicable) in any Class are intended to be and shall be final.

Restructuring Transactions

Sources of Consideration for Plan Distributions

Deregistration of Existing Common Equity Interests; Issuance and Distribution of New Common Stock and New Preferred Equity

The Direct Investment Preferred Equity Raise and the Direct Investment Commitments

On the Effective Date, the Debtors shall consummate the Direct Investment Preferred Equity Raise through which the Plan Sponsor shall purchase $26,000,000 of New Preferred Stock on the terms and conditions set forth in the Direct Investment Documents, this Plan, and the Confirmation Order. Together with the New Preferred Stock issued to any Holder of an Allowed New Money DIP Claim, the New Preferred Stock issued in connection with the Direct Investment Preferred Equity Raise shall constitute 100% of the New Preferred Stock.

Corporate Existence

Vesting of Assets in the Reorganized Debtors

New Shareholders Agreement

Cancellation of Existing Securities and Agreements

Corporate Action

New Governance Documents

Indemnification Obligations

Directors and Officers of the Reorganized Debtors

Effectuating Documents; Further Transactions

Section 1146 Exemption

Director and Officer Liability Insurance

Management Incentive Plan

On or after the Effective Date, the Reorganized Debtors shall adopt and implement the Management Incentive Plan. The Management Incentive Plan shall provide for the issuance of MIP Awards in an amount up to the value of 22% of the New Common Stock, subject to achieving an identified threshold return to investors. The MIP Awards shall be determined on a fully diluted basis taking into account reserved MIP Awards and the New Common Stock issued pursuant to this Plan (and not, for the avoidance of doubt, including the New Preferred Stock). The participants in the MIP, the allocations and form of the MIP Awards (including as to whether in the form of options, phantom awards and/or other equity-based compensation) to such participants (including the amount of allocations and the timing of the Awards), and the terms and conditions of such Awards (including vesting, exercise prices, threshold amounts, base values, hurdles, forfeiture, repurchase rights and transferability) shall be determined by the New Board.

Preservation of Causes of Action

In accordance with section 1123(b) of the Bankruptcy Code, but subject to Article VIII hereof, each Reorganized Debtor, as applicable, shall retain and may enforce all rights to commence and pursue, as appropriate, any and all Causes of Action of the Debtors (other than Avoidance Actions with respect to Released Parties), whether arising before or after the Petition Date, including any actions specifically enumerated in the Schedule of Retained Causes of Action, and the Reorganized Debtors’ rights to commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date, other than Avoidance Actions with respect to Released Parties and Causes of Action settled or resolved by the Debtors prior to the Effective Date with the consent of the Plan Sponsor or released by the Debtors pursuant to the releases and exculpations contained in the Plan, including in Article VIII hereof, which shall be deemed released and waived by the Debtors and the Reorganized Debtors as of the Effective Date.

The Reorganized Debtors may pursue such retained Causes of Action, as appropriate, in accordance with the best interests of the Reorganized Debtors. No Entity (other than the Released Parties) may rely on the absence of a specific reference in the Plan, the Plan Supplement, or the Disclosure Statement to any Cause of Action against it as any indication that the Debtors or the Reorganized Debtors, as applicable, will not pursue any and all available Causes of Action of the Debtors against it, except as otherwise expressly provided in this Plan. The Debtors and the Reorganized Debtors expressly reserve all rights to prosecute any and all Causes of Action against any Entity (other than Avoidance Actions with respect to Released Parties), except as otherwise expressly provided in the Plan, including Article VIII hereof. The Reorganized Debtors may settle any such Cause of Action without any further notice to or action, order, or approval of the Bankruptcy Court. If there is any dispute between the Reorganized Debtors and the Entity against whom the Reorganized Debtors are asserting the Cause of Action regarding the inclusion of any Cause of Action on the Schedule of Retained Causes of Action that remains unresolved for thirty days, such objection shall be resolved by the Bankruptcy Court. Unless any Causes of Action of the Debtors against an Entity are expressly waived, relinquished, exculpated, released, compromised, assigned, transferred or settled in the Plan or a Final Order, the Reorganized Debtors expressly reserve all Causes of Action, for later adjudication, and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable, or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of the Confirmation or Consummation.

The Reorganized Debtors reserve and shall retain such Causes of Action of the Debtors notwithstanding the rejection or repudiation (to the extent applicable) of any Executory Contract or Unexpired Lease during the Chapter 11 Cases or pursuant to the Plan. In accordance with section 1123(b)(3) of the Bankruptcy Code, any Causes of Action that a Debtor may hold against any Entity shall vest in the Reorganized Debtors, except as otherwise expressly provided in the Plan, including Article VIII hereof. The applicable Reorganized Debtors, through their authorized agents or representatives, shall retain and may exclusively enforce any and all such Causes of Action. The Reorganized Debtors shall have the exclusive right, authority, and discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action and to decline to do any of the foregoing without the consent or approval of any third party or further notice to or action, order, or approval of the Bankruptcy Court.

Release of Avoidance Actions

Release of Consenting Vendors

Article V.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

Assumption and Rejection of Executory Contracts and Unexpired Leases

Except as otherwise provided in this Plan, on and as of the Effective Date, each Executory Contract and Unexpired Lease shall be deemed assumed (or assumed and assigned to the respective Reorganized Debtor, as applicable), without the need for any further notice to or action, order, or approval of the Bankruptcy Court, pursuant to sections 365 and 1123 of the Bankruptcy Code unless such Executory Contract or Unexpired Lease (i) previously expired or terminated pursuant to its own terms; or (ii) is the subject of a motion to reject filed on or before the Effective Date. The Confirmation Order will constitute an order of the Bankruptcy Court approving the above-described assumptions and assignments.

Claims Based on Rejection of Executory Contracts or Unexpired Leases

All Allowed Claims arising from the rejection of the Debtors’ Executory Contracts or Unexpired Leases shall be classified as General Unsecured Claims and shall be treated in accordance thereto. In light of the treatment of all Allowed General Unsecured Claims under the Plan, there is no requirement to file a Proof of Claim (or move the Bankruptcy Court for allowance) to have a Claim Allowed for the purposes of the Plan. Any Proof of Claim arising from the rejection of the Debtors’ Executory Contracts or Unexpired Leases that is filed shall be classified as a General Unsecured Claim and based on the treatment provided to holders of Allowed General Unsecured Claims, shall receive no distribution on account of such Claim and shall be deemed to have voted to reject this Plan.

Cure of Defaults for Assumed Executory Contracts and Unexpired Leases

Any monetary defaults under each Executory Contract and Unexpired Lease to be assumed (or assumed and assigned to the respective Reorganized Debtor, as applicable) pursuant to the Plan shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the default amount in Cash upon assumption thereof. To the extent any monetary default exists under a particular Executory Contract of Unexpired Lease, at least fourteen (14) days before the Confirmation Hearing, the Debtors shall have served a notice on parties to Executory Contracts and Unexpired Leases to be assumed reflecting the Debtors’ intention to assume or assume and assign the Executory Contract or Unexpired Lease in connection with this Plan and setting forth the proposed cure amount (if any). If a counterparty to any Executory Contract or Unexpired Lease that the Debtors or Reorganized Debtors intend to assume does not receive such a notice, the proposed cure amount for such executory contract or unexpired lease shall be deemed to be zero dollars ($0.00).

Preexisting Obligations to the Debtors Under Executory Contracts and Unexpired Leases

To the extent applicable, rejection of any Executory Contract or Unexpired Lease pursuant to the Plan or otherwise shall not constitute a termination of preexisting obligations owed to the Debtors or the Reorganized Debtors, as applicable, under such Executory Contracts or Unexpired Leases. In particular, notwithstanding any non-bankruptcy law to the contrary, the Reorganized Debtors expressly reserve and do not waive any right to receive, or any continuing obligation of a counterparty to provide, warranties or continued maintenance obligations with respect to goods previously purchased by the Debtors pursuant to rejected Executory Contracts or Unexpired Leases (if any).

Insurance Policies

Reservation of Rights

Nonoccurrence of Effective Date

Employee Compensation and Benefits.

Compensation and Benefits Programs

Workers’ Compensation Programs

Contracts and Leases Entered into After the Petition Date

Article VI.
PROVISIONS GOVERNING DISTRIBUTIONS

Distributions on Account of Claims Allowed as of the Effective Date

Disbursing Agent

Rights and Powers of Disbursing Agent

Powers of the Disbursing Agent

Expenses Incurred on or After the Effective Date

Delivery of Distributions and Undeliverable or Unclaimed Distributions

Record Date for Distribution

Delivery of Distributions in General

Minimum Distributions

Undeliverable Distributions and Unclaimed Property

Surrender of Canceled Instruments or Securities

On the Effective Date or as soon as reasonably practicable thereafter, each Holder of a certificate or instrument evidencing a Claim or an Interest that has been canceled in accordance with Article IV.J hereof shall be deemed to have surrendered such certificate or instrument to the Disbursing Agent. Such surrendered certificate or instrument shall be canceled solely with respect to the Debtors, and such cancelation shall not alter the obligations or rights of any non-Debtor third parties in respect of one another with respect to such certificate or instrument, including with respect to any indenture or agreement that governs the rights of the Holder of a Claim or Interest, which shall continue in effect for purposes of allowing Holders to receive distributions under the Plan, charging liens, priority of payment, and indemnification rights. Notwithstanding anything to the contrary herein, this paragraph shall not apply to certificates or instruments evidencing Claims that are Unimpaired under the Plan.

Manner of Payment

All distributions of Cash to the Holders of the applicable Allowed Claims under the Plan shall be made by the Disbursing Agent on behalf of the applicable Debtor or Reorganized Debtor.

At the option of the Disbursing Agent, any Cash payment to be made hereunder may be made by check or wire transfer or as otherwise required or provided in applicable agreements.

Indefeasible Distributions

Any and all distributions made under the Plan shall be indefeasible and not subject to clawback or any turnover provisions.

Securities Law Matters

Pursuant to section 1145 of the Bankruptcy Code, the offering, issuance, and distribution of the New Preferred Stock and the New Common Stock, but excluding the MIP Awards (if applicable), in each case, after the Petition Date, shall be exempt from, among other things, the registration requirements of section 5 of the Securities Act or any similar federal, state, or local law in reliance on section 1145 of the Bankruptcy Code or, only to the extent such exemption under Section 1145 of the Bankruptcy Code is not available, any other available exemption from registration under the Securities Act. Pursuant to section 1145 of the Bankruptcy Code, such New Common Stock (other than the MIP Awards, if applicable) will be freely tradable in the U.S. without registration under the Securities Act by the recipients thereof, subject to the provisions of (1) section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter in section 2(a)(11) of the Securities Act and compliance with any applicable state or foreign securities laws, if any, and the rules and regulations of the Securities and Exchange Commission, if any, applicable at the time of any future transfer of such Securities or instruments, (2) any other applicable regulatory approvals, and (3) any restrictions in the Reorganized Debtors’ New Governance Documents. The New Preferred Stock and New Common Stock, in each case, will be offered, issued and distributed in reliance upon section 4(a)(2) of the Securities Act.

Compliance with Tax Requirements

Allocations

No Postpetition or Default Interest on Claims

Foreign Currency Exchange Rate

Setoffs and Recoupment

Except as expressly provided in this Plan, each Reorganized Debtor may, pursuant to section 553 of the Bankruptcy Code, set off and/or recoup against any Plan Distributions to be made on account of any Allowed Claim, any and all Claims, rights, and Causes of Action that such Reorganized Debtor may hold against the Holder of such Allowed Claim to the extent such setoff or recoupment is either (1) agreed in amount among the relevant Reorganized Debtor(s) and the Holder of the Allowed Claim or (2) otherwise adjudicated by the Bankruptcy Court or another court of competent jurisdiction; provided that neither the failure to effectuate a setoff or recoupment nor the allowance of any Claim hereunder shall constitute a waiver or release by a Reorganized Debtor or its successor of any and all claims, rights, and Causes of Action that such Reorganized Debtor or its successor may possess against the applicable Holder. In no event shall any Holder of a Claim be entitled to recoup such Claim against any claim, right, or Cause of Action of the Debtors or the Reorganized Debtors, as applicable, unless such Holder actually has performed such recoupment and provided notice thereof in writing to the Debtors in accordance with Article XII.G hereof on or before the Effective Date, notwithstanding any indication in any Proof of Claim or otherwise that such Holder asserts, has, or intends to preserve any right of recoupment.

Claims Paid or Payable by Third Parties

1. Claims Paid by Third Parties

2. Claims Payable by Third Parties

3. Applicability of Insurance Policies

Article VII.
PROCEDURES FOR RESOLVING CONTINGENT,
UNLIQUIDATED, AND DISPUTED CLAIMS

Disputed Claims Process

Notwithstanding section 502(a) of the Bankruptcy Code, and in light of the treatment of all Allowed General Unsecured Claims under the Plan, there is no requirement to file a Proof of Claim (or move the Bankruptcy Court for allowance) to have a Claim Allowed for the purposes of the Plan. On and after the Effective Date, except as otherwise provided in this Plan, all Allowed Claims shall be satisfied in the ordinary course of business of the Reorganized Debtors as if the Chapter 11 Cases had not been commenced (except that, unless expressly waived pursuant to the Plan, the Allowed amount of such Claims shall be subject to the limitations or maximum amounts permitted by the Bankruptcy Code, including sections 502 and 503 of the Bankruptcy Code). All Proofs of Claim Filed in these Chapter 11 Cases shall be considered objected to and Disputed without further action by the Debtors. Upon the Effective Date and in light of the treatment of all Allowed General Unsecured Claims under the Plan, all Proofs of Claim filed against the Debtors, regardless of the time of filing, and including Proofs of Claim filed after the Effective Date, shall be deemed withdrawn and expunged, other than as provided below.

The Debtors and the Reorganized Debtors, as applicable, shall have the exclusive authority to (1) determine, without the need for notice to or action, order, or approval of the Bankruptcy Court, that a claim subject to any Proof of Claim that is Filed is Allowed and (2) file, settle, compromise, withdraw, or litigate to judgment any objections to Claims as permitted under this Plan. If the Debtors or Reorganized Debtors dispute any Claim, such dispute shall be determined, resolved, or adjudicated, as the case may be, in the manner as if the Chapter 11 Cases had not been commenced and shall survive the Effective Date as if the Chapter 11 Cases had not been commenced; provided that the Debtors or the Reorganized Debtors may elect to object to any Claim (other than Claims expressly Allowed by this Plan) and to have the validity or amount of any Claim adjudicated by the Bankruptcy Court; provided, further, that Holders of Claims may elect to resolve the validity or amount of any Claim in the Bankruptcy Court. If a Holder makes such an election, the Bankruptcy Court shall apply the law that would have governed the dispute if the Chapter 11 Cases had not been filed. All Proofs of Claim Filed in the Chapter 11 Cases shall be considered objected to and Disputed without further action by the Debtors. Except as otherwise provided herein, all Proofs of Claim Filed after the Effective Date shall be disallowed and forever barred, estopped, and enjoined from assertion, and shall not be enforceable against any Reorganized Debtor, without the need for any objection by the Reorganized Debtors or any further notice to or action, order, or approval of the Bankruptcy Court.

Allowance of Claims

After the Effective Date, except as otherwise expressly set forth herein, each of the Reorganized Debtors shall have and retain any and all rights and defenses such Debtor had with respect to any Claim or Interest immediately prior to the Effective Date. The Debtors may affirmatively determine to deem Unimpaired Claims Allowed to the same extent such Claims would be allowed under applicable non-bankruptcy law.

Claims Administration Responsibilities

Except as otherwise specifically provided in the Plan, after the Effective Date, the Reorganized Debtors shall have the sole authority: (1) to File, withdraw, or litigate to judgment, objections to Claims or Interests; (2) to settle or compromise any Disputed Claim without any further notice to or action, order, or approval by the Bankruptcy Court; and (3) to administer and adjust the Claims Register to reflect any such settlements or compromises without any further notice to or action, order, or approval by the Bankruptcy Court. For the avoidance of doubt, except as otherwise provided herein, from and after the Effective Date, each Reorganized Debtor shall have and retain any and all rights and defenses such Debtor had immediately prior to the Effective Date with respect to any Disputed Claim or Interest, including the Causes of Action retained pursuant to Article IV.S of the Plan.

Notwithstanding the foregoing, the Debtors and Reorganized Debtors shall be entitled to dispute and/or otherwise object to any Administrative Claim, Other Priority Claim or Other Secured Claim in accordance with applicable nonbankruptcy law. If the Debtors, or Reorganized Debtors dispute any Administrative Claim, Other Priority Claim or Other Secured Claim, such dispute may be determined, resolved, or adjudicated, as the case may be, in the manner as if the Chapter 11 Cases had not been commenced (except that, unless expressly waived pursuant to the Plan, the Allowed amount of such Claims shall be subject to the limitations or maximum amounts permitted by the Bankruptcy Code, including sections 502 and 503 of the Bankruptcy Code). In any action or proceeding to determine the existence, validity, or amount of any Administrative Claim, Other Priority Claim or Other Secured Claim, any and all claims or defenses that could have been asserted by the applicable Debtor(s) or the Entity holding such Claim are preserved as if the Chapter 11 Cases had not been commenced, provided that, for the avoidance of doubt, the Allowed amount of such Claims shall be subject to the limitations or maximum amounts permitted by the Bankruptcy Code, including sections 502 and 503 of the Bankruptcy Code to the extent applicable.

Estimation of Claims and Interests

Before or after the Effective Date, the Debtors or the Reorganized Debtors, as applicable, may (but are not required to) at any time request that the Bankruptcy Court estimate any Disputed Claim or Interest that is contingent or unliquidated pursuant to section 502(c) of the Bankruptcy Code for any reason, regardless of whether any party previously has objected to such Claim or Interest or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction to estimate any such Claim or Interest, including during the litigation of any objection to any Claim or Interest or during the appeal relating to such objection. Notwithstanding any provision otherwise in the Plan, a Claim that has been expunged from the Claims Register, but that either is subject to appeal or has not been the subject of a Final Order, shall be deemed to be estimated at zero dollars, unless otherwise ordered by the Bankruptcy Court. In the event that the Bankruptcy Court estimates any contingent or unliquidated Claim or Interest, that estimated amount shall constitute a maximum limitation on such Claim or Interest for all purposes under the Plan (including for purposes of distributions), and the relevant Reorganized Debtor may elect to pursue any supplemental proceedings to object to any ultimate distribution on such Claim or Interest.

Adjustment to Claims or Interests without Objection

Any duplicate Claim or Interest or any Claim or Interest that has been paid, satisfied, amended, or superseded may be adjusted or expunged on the Claims Register by the Reorganized Debtors without the Reorganized Debtors having to File an application, motion, complaint, objection, or any other legal proceeding seeking to object to such Claim or Interest and without any further notice to or action, order, or approval of the Bankruptcy Court. The Debtors shall provide any Holder of such a Claim or Interest with fourteen days’ notice prior to the Claim or Interest being adjusted or expunged from the Claims Register as the result of a Claim or Interest being paid, satisfied, amended or superseded.

Disallowance of Claims or Interests

Except as otherwise expressly set forth herein, all Claims and Interests of any Entity from which property is sought by the Debtors under sections 542, 543, 550, or 553 of the Bankruptcy Code or that the Debtors or the Reorganized Debtors allege is a transferee of a transfer that is avoidable under sections 522(f), 522(h), 544, 545, 547, 548, 549, or 724(a) of the Bankruptcy Code shall be disallowed if: (1) the Entity, on the one hand, and the Debtors or the Reorganized Debtors, as applicable, on the other hand, agree or the Bankruptcy Court has determined by Final Order that such Entity or transferee is liable to turn over any property or monies under any of the aforementioned sections of the Bankruptcy Code; and (2) such Entity or transferee has failed to turn over such property by the date set forth in such agreement or Final Order.

No Distributions Pending Allowance

Notwithstanding any other provision of the Plan, if any portion of a Claim or Interest is a Disputed Claim or Interest, as applicable, no payment or distribution provided hereunder shall be made on account of such Claim or Interest unless and until such Disputed Claim or Interest becomes an Allowed Claim or Allowed Interest; provided that if only the Allowed amount of an otherwise valid Claim or Interest is Disputed, such Claim or Interest shall be deemed Allowed in the amount not Disputed and payment or distribution shall be made on account of such undisputed amount.

Distributions After Allowance

To the extent that a Disputed Claim or Interest ultimately becomes an Allowed Claim or Allowed Interest, distributions (if any) shall be made to the Holder of such Allowed Claim or Allowed Interest in accordance with the provisions of the Plan. On or as soon as reasonably practicable after the next Distribution Date after the date that the order or judgment of the Bankruptcy Court allowing any Disputed Claim or Interest becomes a Final Order, the Disbursing Agent shall provide to the Holder of such Claim or Interest the distribution (if any) to which such Holder is entitled under the Plan as of the Effective Date, without any interest to be paid on account of such Claim or Interest. If the Holder of a Claim incorporates more than one Claim in a Proof of Claim then: (i) such Claims will be considered one Claim for purposes of this Plan; and (ii) no such Claim will be bifurcated into an Allowed portion and a Disputed portion.

Article VIII.
SETTLEMENT, RELEASE, INJUNCTION, AND RELATED PROVISIONS

Discharge of Claims and Termination of Interests

Release of Liens

Releases by the Debtors

Releases by the Releasing Parties

Exculpation

Injunction

Protections Against Discriminatory Treatment

Consistent with section 525 of the Bankruptcy Code and the Supremacy Clause of the U.S. Constitution, all Entities, including Governmental Units, shall not discriminate against the Reorganized Debtors or deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, the Reorganized Debtors, or another Entity with whom the Reorganized Debtors have been associated, solely because each Debtor has been a debtor under chapter 11 of the Bankruptcy Code, has been insolvent before the commencement of the Chapter 11 Cases (or during the Chapter 11 Cases but before the Debtors are granted or denied a discharge), or has not paid a debt that is dischargeable in the Chapter 11 Cases.

Document Retention

On and after the Effective Date, the Reorganized Debtors may maintain documents in accordance with their standard document retention policy, as may be altered, amended, modified, or supplemented by the Reorganized Debtors.

Reimbursement or Contribution

If the Bankruptcy Court disallows a Claim for reimbursement or contribution of an Entity pursuant to section 502(e)(1)(B) of the Bankruptcy Code, then to the extent that such Claim is contingent as of the time of allowance or disallowance, such Claim shall be forever disallowed and expunged notwithstanding section 502(j) of the Bankruptcy Code, unless prior to the Confirmation Date (1) such Claim has been adjudicated as non-contingent or (2) the relevant Holder of a Claim has Filed a non-contingent Proof of Claim on account of such Claim and a Final Order has been entered prior to the Confirmation Date determining such Claim as no longer contingent.

Article IX.
CONDITIONS PRECEDENT TO CONSUMMATION OF THE PLAN

Conditions Precedent to the Effective Date

It shall be a condition to the Effective Date that the following conditions shall have been satisfied or waived pursuant to the provisions of Article IX.B hereof:

the Bankruptcy Court shall have entered the Confirmation Order, in form and substance acceptable to the Debtors and the Plan Sponsor, which shall be a Final Order;

all actions, documents, and agreements necessary to implement and consummate the Plan shall have been effected and executed (or deemed executed) and shall remain in full force and effect;

the Direct Investment Documents shall have been executed, shall be in full force and effect in accordance with their terms and the conditions precedent contained therein shall have been satisfied;

the Debtors shall consummate the Direct Investment Preferred Equity Raise;

the Debtors shall have implemented the Restructuring Transactions and all transactions contemplated in the Plan in a manner consistent with the terms thereof and the Confirmation Order.

Waiver of Conditions

Any one or more of the conditions to Consummation set forth in this Article IX may be waived (other than entry of the Confirmation Order) by the Debtors with the prior written consent (e-mail from counsel being sufficient) of the Plan Sponsor without notice, leave, or order of the Bankruptcy Court or any formal action other than proceedings to confirm or consummate the Plan.

Effect of Failure of Conditions

Substantial Consummation

“Substantial Consummation” of the Plan, as defined in 11 U.S.C. § 1101(2), shall be deemed to occur on the Effective Date.

Article X.
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN

Modification and Amendments

Except as otherwise specifically provided in this Plan, the Debtors reserve the right to modify the Plan, with the consent of the Plan Sponsor, whether such modification is material or immaterial, and seek Confirmation consistent with the Bankruptcy Code and, as appropriate, not resolicit votes on such modified Plan. Subject to those restrictions on modifications set forth in the Plan and the requirements of section 1127 of the Bankruptcy Code, Bankruptcy Rule 3019, and, to the extent applicable, sections 1122, 1123, and 1125 of the Bankruptcy Code, each of the Debtors expressly reserves its respective rights to revoke or withdraw, or to alter, amend, or modify the Plan, one or more times, after Confirmation, and, to the extent necessary may initiate proceedings in the Bankruptcy Court to so alter, amend, or modify the Plan, or remedy any defect or omission, or reconcile any inconsistencies in the Plan, the Disclosure Statement, or the Confirmation Order, in such matters as may be necessary to carry out the purposes and intent of the Plan.

Effect of Confirmation on Modifications

Revocation or Withdrawal of Plan

Article XI.
RETENTION OF JURISDICTION

Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, on and after the Effective Date, the Bankruptcy Court shall retain exclusive jurisdiction over all matters arising out of, or relating to, the Chapter 11 Cases and the Plan pursuant to sections 105(a) and 1142 of the Bankruptcy Code, including jurisdiction to:

allow, disallow, determine, liquidate, classify, estimate, or establish the priority, secured or unsecured status, or amount of any Claim or Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any and all objections to the secured or unsecured status, priority, amount, or allowance of Claims or Interests;

decide and resolve all matters related to the granting and denying, in whole or in part, any applications for allowance of compensation or reimbursement of expenses to Professionals authorized pursuant to the Bankruptcy Code or the Plan;

resolve any matters related to: (a) the assumption, assumption and assignment, or rejection (to the extent applicable) of any Executory Contract or Unexpired Lease to which a Debtor is party or with respect to which a Debtor may be liable and to hear, determine, and, if necessary, liquidate, any Claims arising therefrom, including Cures pursuant to section 365 of the Bankruptcy Code; (b) any potential contractual obligation under any Executory Contract or Unexpired Lease that is assumed; (c) the Reorganized Debtors amending, modifying, or supplementing, after the Effective Date, pursuant to Article V hereof, any Executory Contracts or Unexpired Leases to the list of Executory Contracts and Unexpired Leases to be assumed or rejected (to the extent applicable) or otherwise; and (d) any dispute regarding whether a contract or lease is or was executory or expired;

ensure that distributions to Holders of Allowed Claims and Allowed Interests (as applicable) are accomplished pursuant to the provisions of the Plan;

adjudicate, decide, or resolve any motions, adversary proceedings, contested or litigated matters, and any other matters, and grant or deny any applications involving a Debtor that may be pending on the Effective Date;

adjudicate, decide, or resolve any and all matters related to section 1141 of the Bankruptcy Code;

enter and implement such orders as may be necessary to execute, implement, or consummate the provisions of the Plan and all contracts, instruments, releases, indentures, and other agreements or documents created or entered into in connection with the Plan or the Disclosure Statement;

enter and enforce any order for the sale of property pursuant to sections 363, 1123, or 1146(a) of the Bankruptcy Code;

resolve any cases, controversies, suits, disputes, or Causes of Action that may arise in connection with the Consummation, interpretation, or enforcement of the Plan, the Disclosure Statement, the Confirmation Order or any Entity’s obligations incurred in connection with the Plan;

10.

issue injunctions, enter and implement other orders, or take such other actions as may be necessary to restrain interference by any Entity with Consummation or enforcement of the Plan;

11.

resolve any cases, controversies, suits, disputes, or Causes of Action with respect to the releases, injunctions, exculpations, and other provisions contained in Article VIII hereof and enter such orders as may be necessary or appropriate to implement such releases, injunctions, and other provisions;

12.

resolve any cases, controversies, suits, disputes, or Causes of Action with respect to the repayment or return of distributions and the recovery of additional amounts owed by the Holder of a Claim or Interest for amounts not timely repaid pursuant to Article VI.M hereof;

13.

enter and implement such orders as are necessary if the Confirmation Order is for any reason modified, stayed, reversed, revoked, or vacated;

14.

determine any other matters that may arise in connection with or relate to the Plan, the Plan Supplement, the Disclosure Statement, the Confirmation Order, or any contract, instrument, release, indenture, or other agreement or document created in connection with the Plan, the Plan Supplement, the Confirmation Order or the Disclosure Statement;

15.

enter an order concluding or closing the Chapter 11 Cases;

16.

adjudicate any and all disputes arising from or relating to distributions under the Plan;

17.

consider any modifications of the Plan, to cure any defect or omission, or to reconcile any inconsistency in any Bankruptcy Court order, including the Confirmation Order;

18.

determine requests for the payment of Claims and Interests entitled to priority pursuant to section 507 of the Bankruptcy Code;

19.

hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of the Plan or the Confirmation Order, including disputes arising under agreements, documents, or instruments executed in connection with the Plan;

20.

hear and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;

21.

hear and determine all disputes involving the existence, nature, scope, or enforcement of any exculpations, discharges, injunctions, and releases granted in the Plan, including under Article VIII hereof, regardless of whether such termination occurred prior to or after the Effective Date; and

22.

enforce all orders previously entered by the Bankruptcy Court.

As of the Effective Date, notwithstanding anything in this Article XI to the contrary, the New Governance Documents and any documents related thereto shall be governed by the jurisdictional provisions therein and the Bankruptcy Court shall not retain jurisdiction with respect thereto.

Article XII.
MISCELLANEOUS PROVISIONS

Tax Structure

The Restructuring Transactions shall be structured in a tax efficient manner acceptable to the Debtors and the Plan Sponsor.

Immediate Binding Effect

Subject to Article IX.A hereof and notwithstanding Bankruptcy Rules 3020(e), 6004(h), or 7062 or otherwise, upon the occurrence of the Effective Date, the terms of the Plan (including, for the avoidance of doubt, the documents contained in the Plan Supplement) shall be immediately effective and enforceable and deemed binding upon the Debtors, the Reorganized Debtors, any and all Holders of Claims against or Interests in the Debtors (irrespective of whether such Holders have, or are deemed to have accepted the Plan), all Entities that are parties to or are subject to the settlements, compromises, releases, discharges, and injunctions described in the Plan, each Entity acquiring property under the Plan, and any and all non-Debtor parties to Executory Contracts and Unexpired Leases with the Debtors. All Claims and Interests shall be as fixed, adjusted, or compromised, as applicable, pursuant to the Plan regardless of whether any Holder of a Claim or Interest has voted on the Plan.

Additional Documents

On or before the Effective Date, (1) the Debtors may file with the Bankruptcy Court such agreements and other documents as may be necessary to effectuate and further evidence the terms and conditions of the Plan and (2) the Debtors or the Reorganized Debtors, as applicable, and all Holders of Claims against the Debtors receiving distributions pursuant to the Plan, and all other parties in interest, shall, from time to time, to the extent commercially reasonable, prepare, execute, and deliver any agreements or documents and take any other actions as may be necessary or advisable to effectuate the provisions and intent of the Plan.

Statutory Committee and Cessation of Fee and Expense Payment

On the Confirmation Date, any statutory committee appointed in the Chapter 11 Cases shall dissolve and members thereof shall be released and discharged from all rights and duties from or related to the Chapter 11 Cases. The Reorganized Debtors shall no longer be responsible for paying any fees or expenses incurred by the members or advisors to any statutory committee after the Confirmation Date.

Reservation of Rights

Except as expressly set forth in the Plan, the Plan shall have no force or effect unless the Bankruptcy Court enters the Confirmation Order, and the Confirmation Order shall have no force or effect if the Effective Date does not occur. None of the Filing of the Plan, any statement or provision contained in the Plan, or the taking of any action by any Debtor with respect to the Plan, the Disclosure Statement, or the Plan Supplement shall be or shall be deemed to be an admission or waiver of any rights of any Debtor with respect to the Holders of Claims or Interests prior to the Effective Date.

Successors and Assigns

The rights, benefits, and obligations of any Entity named or referred to in the Plan shall be binding on, and shall inure to the benefit of any heir, executor, administrator, successor or assign, Affiliate, officer, manager, trustee, director, agent, trustee, representative, attorney, beneficiary, or guardian, if any, of each Entity; provided that nothing in this Article XII.F modifies section 524(e) of the Bankruptcy Code.

Notices

All notices, requests, and demands to or upon the Debtors or Reorganized Debtors to be effective shall be in writing (including by facsimile or electronic transmission) and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when actually delivered or, in the case of notice by facsimile and electronic transmission, when received and telephonically or electronically confirmed, addressed as follows:

Debtors or Reorganized Debtors	Proposed Counsel to the Debtors
PARTS iD, Inc. One Corporate Drive Suite C Cranbury, NJ 08512 Attention: Lev Peker and John Pendleton Email: lev@partsid.com john@partsid.com	DLA Piper LLP (US) 1201 N. Market Street, Suite 2100 Wilmington, Delaware 19801 Attention: R. Craig Martin Facsimile: (312) 236-7516 Email: craig.martin@us.dlapiper.com 500 8th Street, NW Washington, D.C. 20004 Attention: Erik F. Stier Facsimile: (202) 799-5000 Email: erik.stier@us.dlapiper.com
United States Trustee
Office of the United States Trustee 844 King Street, Suite 2207 Wilmington, Delaware 19801 Attention: Linda Casey

After the Effective Date, the Reorganized Debtors have the authority to send a notice to Entities that had requested to receive documents pursuant to Bankruptcy Rule 2002, requesting that such Entity file a renewed request to receive documents pursuant to Bankruptcy Rule 2002. After the Effective Date, and provided such notice was sent, the Reorganized Debtors are authorized to limit the list of Entities receiving documents pursuant to Bankruptcy Rule 2002 to those Entities who have Filed such renewed requests. Notwithstanding anything herein to the contrary, the Reorganized Debtors shall provide notice of any documents to all Entities whose rights are affected by any such document Filed by the Reorganized Debtors.

Term of Injunctions or Stays.

Unless otherwise provided in the Plan or in the Confirmation Order, all injunctions or stays in effect in the Chapter 11 Cases pursuant to sections 105 or 362 of the Bankruptcy Code or any order of the Bankruptcy Court, and extant on the Confirmation Date (excluding any injunctions or stays contained in the Plan or the Confirmation Order) shall remain in full force and effect until the Effective Date. All injunctions or stays contained in the Plan or the Confirmation Order shall remain in full force and effect in accordance with their terms.

Entire Agreement.

Except as otherwise indicated, the Plan (including, for the avoidance of doubt, the documents and instruments in the Plan Supplement) supersedes all previous and contemporaneous negotiations, promises, covenants, agreements, understandings, and representations on such subjects, all of which have become merged and integrated into the Plan.

Plan Supplement.

All exhibits and documents included in the Plan Supplement are incorporated into and are a part of the Plan as if set forth in full in the Plan. After the exhibits and documents are Filed, copies of such exhibits and documents shall be available upon written request to the Debtors’ counsel at the address above or by downloading such exhibits and documents from the Debtors’ restructuring website at https://cases.ra.kroll.com/PARTSID or the Bankruptcy Court’s website at www.deb.uscourts.gov. To the extent any exhibit or document is inconsistent with the terms of the Plan, unless otherwise ordered by the Bankruptcy Court, the non-exhibit or non-document portion of the Plan shall control. Notwithstanding anything to the contrary herein, the Plan Supplement, and any exhibits, agreements, forms, notices, and other documents contained therein shall be in form and substance acceptable to the Plan Sponsor.

Nonseverability of Plan Provisions.

If, prior to Confirmation, any term or provision of the Plan is held by the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void, or unenforceable, and such term or provision shall then be applicable as altered or interpreted; provided, however, any such alteration or interpretation shall be acceptable to the Debtors and the Plan Sponsor. Notwithstanding any such holding, alteration, or interpretation, the remainder of the terms and provisions of the Plan will remain in full force and effect and will in no way be affected, impaired, or invalidated by such holding, alteration, or interpretation. The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of the Plan, as it may have been altered or interpreted in accordance with the foregoing, is: (1) valid and enforceable pursuant to its terms; (2) integral to the Plan and may not be deleted or modified without the Debtors’ or Reorganized Debtors’ consent, as applicable; and (3) nonseverable and mutually dependent.

Votes Solicited in Good Faith.

Upon entry of the Confirmation Order, the Debtors will be deemed to have solicited votes on the Plan in good faith and in compliance with section 1125(g) of the Bankruptcy Code, and pursuant to section 1125(e) of the Bankruptcy Code, the Debtors, the Plan Sponsor, and each of their respective Affiliates, agents, representatives, members, principals, shareholders, officers, trustees, directors, employees, advisors, and attorneys will be deemed to have participated in good faith and in compliance with the Bankruptcy Code in the offer, issuance, sale, and purchase of securities offered and sold under the Plan and any previous plan, and, therefore, neither any of such parties or individuals or the Reorganized Debtors will have any liability for the violation of any applicable law, rule, or regulation governing the solicitation of votes on the Plan or the offer, issuance, sale, or purchase of the Securities offered and sold under the Plan and any previous plan.

Closing of Chapter 11 Cases.

As of the Effective Date, unless otherwise provided in the Confirmation Order, all of the Chapter 11 Cases shall be deemed closed, and the Clerk of the Bankruptcy Court shall make an appropriate entry on the relevant dockets providing that a final decree has been entered and the Fully Administered Cases are deemed closed as of the Effective Date.

Waiver or Estoppel.

Each Holder of a Claim or an Interest shall be deemed to have waived any right to assert any argument, including the right to argue that its Claim or Interest should be Allowed in a certain amount, in a certain priority, secured or not subordinated by virtue of an agreement made with the Debtors or their counsel, or any other Entity, if such agreement was not disclosed in the Plan, the Disclosure Statement, or papers Filed with the Bankruptcy Court prior to the Confirmation Date.

Dated: December 20, 2023	PARTS iD, Inc.
	PARTS iD, LLC


	Name:
	Title:

Exhibit B

(Vendor Restructuring Support Agreement)

Nothing contained in thIS RESTRUCTURING SUPPORT AGREEMENT shall be an admission of fact or liability OR, UNTIL THE OCCURRENCE OF THE SUPPORT EFFECTIVE DATE ON THE TERMS DESCRIBED IN THIS RESTRUCTURING SUPPORT AGREEMENT, DEEMED BINDING ON ANY OF THE PARTIES HEREto.

THIS RESTRUCTURING SUPPORT AGREEMENT IS THE PRODUCT OF SETTLEMENT DISCUSSIONS AMONG THE PARTIES THERETO. ACCORDINGLY, THIS RESTRUCTURING SUPPORT AGREEMENT IS PROTECTED BY RULE 408 OF THE FEDERAL RULES OF EVIDENCE AND ANY OTHER APPLICABLE STATUTES OR DOCTRINES PROTECTING THE USE OR DISCLOSURE OF CONFIDENTIAL SETTLEMENT DISCUSSIONS.

RESTRUCTURING SUPPORT AGREEMENT

by and among

PARTS ID, INC.

PARTS ID, LLC

and

EACH CONSENTING VENDOR PARTY HERETO

dated as of October 6, 2023

PREAMBLE

This Restructuring Support Agreement, together with all exhibits, schedules, and attachments hereto, as may be amended, supplemented, or otherwise modified from time to time in accordance with the terms hereof, (the “Agreement”), is made and entered into as of October 6, 2023, by and among: (1) Parts iD, Inc., (2) PARTS iD, LLC (together with Parts iD, Inc., the “Company”) and (3) the undersigned vendors, severally and not jointly, identified on the signature pages hereto (together with each of their respective successors and permitted assigns under this Agreement, each a “Consenting Vendor” and collectively, the “Consenting Vendors”). The Company and each Consenting Vendor, and any subsequent person or entity that becomes a party to this Agreement in accordance with the terms of this Agreement, are referred to in this Agreement as the “Parties” and each a “Party.”

RECITALS

WHEREAS, to address the Company’s liquidity issues, the Company and an ad hoc Committee of vendors (the “Committee”) have been engaged in good faith, arm’s-length negotiations with the objective of reaching an agreement to restructure the Company’s indebtedness to trade vendors (the “Restructuring”).

WHEREAS, the Parties have now agreed to support and facilitate the implementation of the Restructuring in accordance with the terms and conditions set forth in this Agreement.

WHEREAS, the Parties have agreed to take certain actions in furtherance of the Restructuring and desire to express to each other their mutual support and commitments as set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the promises and mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Parties hereby agrees as follows:

Section 1. Definitions. In this Agreement:

“Accession Date” has the meaning set forth in Section 3(a)(i).

“Accession Letter” means an accession letter substantially in the form set out in Schedule 1 (Additional Consenting Vendor Accession Letter).

“Additional Consenting Vendor” means any Vendor that becomes a Party as a Consenting Vendor after the Support Effective Date in accordance with Section 3 (Accessions to the Agreement).

“Additional Consenting Vendor Payment Date” means, in relation to each Additional Consenting Vendor, the later to occur of (a) the Initial Payment Date, and (b) five (5) Business Days after its Accession Date.

“Affiliate” means, with respect to a person, any other person who, directly or indirectly, is in control of, or controlled by, or is under common control with, such person and, for the purposes of this definition, “control” shall mean the power, direct or indirect, to (a) vote on more than fifty percent (50%) of the securities having ordinary voting power for the election of directors of such person, or (b) direct or cause the direction of the management and policies of such person whether by contract or otherwise.

“Agreed Vendor Claim” has the meaning set forth in Section 4(a).

“Agreement” has the meaning given to this term in the Preamble.

“Alternative Restructuring” has the meaning given to this term in the definition of the term “Restricted Action.”

“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101-1532, as amended.

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in New York.

“Claim” has the meaning set forth in section 101(5) of the Bankruptcy Code.

“Committee” has the meaning given to this term in the Recitals.

“Committee Counsel” means Cole Schotz P.C.

“Committee Representative” means the individual so designated from time to time by (i) a vote of at least 50.1% of the aggregate amount of the Claims against the Company held by the Committee, including the vote of the Committee Representative, or (ii) such other vote as shall be determined by the Committee.

“Company” has the meaning given to this term in the Preamble.

“Connected Persons” means with respect to a person, (a) its Affiliates; (b) its partners, directors, officers, employees, legal and other professional advisors (including auditors), agents and representatives; and (c) its Affiliates’ partners, directors, officers, employees, legal and other professional advisors (including auditors) agents and representatives.

“Consenting Vendor” and “Consenting Vendors” have the meanings given to these terms in the Preamble.

“Convenience Claim” means the aggregate Claims of a Vendor against the Company for past due invoices as of the Support Effective Date when such Claims total an amount that is equal to or less than $10,000.

“Event of Default” has the meaning set forth in Section 12(a) (Events of Default and Remedies).

“Initial Payment” means, with respect to each holder of a Vendor Claim, an amount equal to 12.5% of the total amount of such Vendor Claim.

“Initial Payment Date” means the earlier to occur of (i) two (2) Business Days following the Company’s receipt of the Restructuring Funds, and (ii) December 15, 2023.

“Insolvency Proceeding” means any voluntary or involuntary corporate or third party action, legal proceeding or other procedure or step in relation to any suspension of payments or moratorium of any indebtedness, the winding up, bankruptcy (including any proceeding under chapters 7 or 11 of the Bankruptcy Code), liquidation, provisional liquidation, dissolution, administration, receivership, administrative receivership, judicial composition or reorganization of or in relation to the Company, assignment for the benefit of creditors, or any analogous procedure or step in any other jurisdiction.

“Law” means any federal, state, local, or foreign law, statute, code, ordinance, rule, regulation, order, ruling, or judgment, in each case, that is validly adopted, promulgated, issued, or entered by a governmental authority of competent jurisdiction.

“Material Adverse Effect” means a material adverse effect impeding the ability of the Company to implement or consummate the Restructuring.

“Monthly Vendor Claim Payment” means an amount equal to forty-two and one-half percent (42.5%) of the total Vendor Claim divided by thirty-six (36).

“Party” and “Parties” have the meanings given to these terms in the Preamble.

“Requisite Consenting Vendors” means, as of the Support Effective Date, Consenting Vendors holding at least eighty percent (80%) of the Total Vendor Claim Amount.

“Restricted Actions” means, except with respect to the exercise or enforcement of any rights and claims under this Agreement, during the Support Period:

(a) the acceleration, enforcement, collection or recovery of, or the taking of any steps to accelerate, enforce collect or recover, a Vendor Claim or Convenience Claim against the Company;

(b) the suing for, commencing, supporting, and/or joining of any legal or arbitration proceedings against the Company with respect to the Restructuring;

(d) filing any motion, pleading, or other document with any court (including any modifications or amendments thereof) that, in whole or in part, is not consistent with this Agreement;

(e) objecting to, delaying, impeding, or taking any other action with respect to a Vendor Claim or Convenience Claim that would reasonably be expected to interfere with the ownership and possession by the Company of its assets, wherever located;

(f) taking, encouraging, assisting, or supporting any action that would, or would reasonably be expected to, frustrate, delay, impede, interfere with, or prevent the Restructuring or that is in any way inconsistent with this Agreement, including (without limitation):

(i) through any person or entity, directly or indirectly, encouraging, seeking, procuring, proposing, soliciting, assisting, participating, filing, prosecuting, engaging in negotiations in connection with or otherwise supporting, plan, plan proposal, restructuring proposal, Insolvency Proceeding, offer of dissolution, winding up, liquidation, receivership, sale or disposition, refinancing, recapitalization, reorganization, merger or any alternative proposal or offer from any person or entity in respect of a restructuring of the financial indebtedness of the Company other than the Restructuring as contemplated under this Agreement (each, an “Alternative Restructuring”); and

(ii) challenging or objecting, or supporting or procuring any challenge or objection to, any aspect of the Restructuring.

“Restructuring” has the meaning given to this term in the Recitals.

“Restructuring Funds” means an amount not less than $10 million in capital, including debt, equity or any other capital raised by the Company.

“Support Effective Date” has the meaning given to this term in Section 5 (Conditions to Support Effective Date).

“Support Period” means the period commencing on the Support Effective Date and ending the date the Company is placed into an Insolvency Proceeding or the date on which this Agreement is terminated in accordance with Section 13 (Termination), whichever occurs first.

“Total Vendor Claim Amount” means, no more than $27,368,133.57, which the Company represents is the aggregate amount of all Claims owed to vendors for past due invoices as of the date of this Agreement.

“Transfer” has the meaning given to this term in Section 11 (Transfers) of this Agreement.

“Vendor” means a vendor that sells products or SKUs on any of the Company’s platforms;

“Vendor Claim” means the aggregate Claims of a Vendor against the Company for past due invoices as of the Support Effective Date when such Claims total an amount greater than $10,000.

Section 2. Certain Interpretations. For purposes of this Agreement:

(a) when a reference is made in this Agreement to the Preamble, a Recital, Section, Exhibit, or Schedule, such reference shall be to the Preamble, Recital, Section, Exhibit or Schedule, respectively, of or attached to this Agreement unless otherwise indicated; and

(b) unless the context of this Agreement otherwise requires, (i) words using the singular or plural also include the plural or singular, respectively, (ii) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement, (iii) the words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation,” (iv) the word “or” shall not be exclusive and shall be read to mean “and/or” and (v) any reference to dollars or “$” shall be to United States dollars; and

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

Section 3. Accessions to the Agreement.

(a) Any Vendor that holds a Claim against the Company who is not a Party as of the Support Effective Date may become a Consenting Vendor under and a Party to this Agreement by delivering to the Company a duly completed and executed Accession Letter. On delivery of such fully executed Accession Letter:

(i) this Agreement shall be read and construed as if such acceding entity was a Party to this Agreement from the date of the relevant Accession Letter (the “Accession Date”); and

(ii) the acceding Vendor agrees to be bound by the terms of this Agreement.

(b) The Vendor Claim or Convenience Claim of each Additional Consenting Vendor shall receive the treatment set forth in Section 4 (Treatment of Claims), unless:

(i) a dispute exists between the Company and such Additional Consenting Vendor regarding the amount of its Claim, in which case the Parties shall work in good faith to confirm and agree the amount of such Claim; or

(ii) at least five (5) Business Days prior to the Accession Date, the Company has provided written notice (e-mail being sufficient) to the Committee Representative of a proposal for separate treatment of such Vendor Claim; and

(iii) the Committee Representative has confirmed to the Company in writing (e-mail being sufficient) that the terms of such treatment are acceptable.

Section 4. Treatment of Claims.

(a) The Company shall pay to each holder of a Vendor Claim an amount equal to 55% of such total Vendor Claim (such amount, the “Agreed Vendor Claim”), as follows:

(i) on the Initial Payment Date or the Additional Consenting Vendor Payment Date, as applicable, the Initial Payment;

(ii) until the Company has made all Monthly Vendor Claim Payments (such that each holder of a Vendor Claim has been paid an additional 42.5% of its total Vendor Claim, exclusive of any default interest paid under section 12(b)), commencing on the first Business Day of the month following the Initial Payment Date or Additional Consenting Vendor Payment Date, as applicable, and continuing on the first Business Day of each month thereafter, such Vendor’s Monthly Vendor Claim Payment; and

(iii) subject only to Section 12(c) (Events of Default and Remedies), upon receipt by a Vendor of the full amount of its Agreed Vendor Claim, such Vendor shall be deemed to have irrevocably forgiven, released, and discharged the balance of its Vendor Claim against the Company.

Unless an Event of Default has occurred and is continuing, each Agreed Vendor Claim shall not bear interest.

(b) Each holder of a Convenience Claim shall receive in full and complete settlement, release and discharge of its Convenience Claim, an amount equal to 65% of its Convenience Claim no later than:

(i) with respect to a Consenting Vendor as of the Support Effective Date, two (2) Business Days after the Company makes the Initial Payment required by Section 4(a)(i); and

(ii) with respect to an Additional Consenting Vendor, the later of (A) two (2) Business Days after the Company makes the Initial Payment required by Section 4(a)(i) and (B) five (5) Business Days after such Additional Consenting Vendor’s execution of an Accession Letter.

Section 5. Conditions to Support Effective Date. This Agreement shall become effective upon the satisfaction or waiver of the following conditions (the Business Day immediately following the date upon which such conditions are satisfied or waived, the “Support Effective Date”):

(a) The Requisite Consenting Vendors have executed this Agreement; and

(b) The Committee Representative has been designated and the contact details of the Committee Representative have been provided to the Company.

The Company shall provide the Consenting Vendors with written notice of the occurrence of the Support Effective Date within three (3) Business Days thereof. Unless the Company and the Committee Representative agree otherwise, if the Support Effective Date does not occur within thirty (30) days of the Company’s execution of the Agreement, the Agreement shall become null and avoid and without any effect.

Section 6. Representations and Warranties of Consenting Vendors. Each Consenting Vendor hereby severally and not jointly represents and warrants to the Company that the following statements are true and correct as of the Support Effective Date or, in relation to Additional Consenting Vendors only, the date of that Additional Consenting Vendor’s Accession Letter:

(a) it has all necessary power and authority to execute and deliver this Agreement, to carry out the transactions contemplated by this Agreement, and to perform its obligations under this Agreement. The execution and delivery of this Agreement by it and the performance of its obligations hereunder have been duly authorized by all necessary actions on the part of the Consenting Vendor;

(b) this Agreement has been duly and validly executed and delivered by it. This Agreement constitutes the valid and binding obligation of it, enforceable against it in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, reorganization, insolvency, moratorium or other similar Law affecting creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought; and

Section 7. Representations, Warranties and Covenants of the Company. The Company hereby represents and warrants to each Consenting Vendor that the following statements are true and correct as of the Company’s execution of this Agreement:

(a) the board of directors, special committee of the board of directors, board of managers, or such similar governing body of the Company has determined, after consulting with counsel, that (i) proceeding with the Restructuring is consistent with the exercise of its fiduciary duties or applicable Law and (ii) and is valid exercise of its fiduciary duties;

(b) it has all necessary power and authority to execute and deliver this Agreement, to carry out the transactions contemplated by this Agreement, and to perform its obligations hereunder. The execution and delivery of this Agreement by it and the performance of its obligations hereunder have been duly authorized (or will be duly authorized through ratification) by all necessary action on the part of the Company;

(c) this Agreement has been duly and validly executed and delivered by the Company. This Agreement constitutes the valid and binding obligation of the Company, enforceable against it in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, reorganization, insolvency, moratorium or other similar Law affecting creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought;

(d) the execution, delivery or performance of this Agreement by the Company, and its compliance with the provisions hereof, will not (with or without notice or lapse of time, or both) conflict with or violate any provision of the organizational or governing documents of the Company or any of its subsidiaries; and

(e) Absent prior written consent of the Committee Representative, the Company shall not provide any Vendor higher or otherwise better treatment of such claim than as provided to such claim holders set forth in Section 4 (Treatment of Claims).

(f) it will provide all information reasonably requested by the Committee Representative or the Committee Counsel (i) to assist with the implementation of the Restructuring, (ii) related to payments to Vendors hereunder and (iii) related to the financial information of the Company; and

(g) the Company has acted diligently and in good faith as would be reasonably required to procure financing and has identified one or more sources that are prepared to fund the Restructuring Funds.

(h) in the event the Company breaches any covenant, undertaking or representation made in this Agreement, the Company shall report such breach to the Committee Representative promptly upon the occurrence of such breach;

(i) it will, to the extent any impediment arises that would prevent, hinder, or delay the consummation of the Restructuring and full payment of the Agreed Vendor Claims, negotiate in good faith with the Committee, or following the Support Effective Date, the Committee Representative to address any such impediments.

Section 8. All Parties Undertakings. During the Support Period, each Party shall:

(a) support and cooperate with each other Party in good faith and otherwise use its commercially reasonable efforts to support and consummate the Restructuring as soon as reasonably practicable;

(b) as soon as reasonably practicable take all actions reasonably necessary to support, facilitate, implement, consummate, or otherwise give effect to all or any part of the Restructuring and the transactions contemplated in this Agreement, provided that such actions are consistent with this Agreement, including (but not limited to) executing and delivering any document, giving any notice, confirmation, consent or direction; and

(c) not take, direct, encourage, assist or support (or procure that any other person takes, directs, encourages, assist or supports) any action which would, or would reasonably be expected to, breach or be inconsistent with this Agreement or the Restructuring, or delay, impede, or prevent the implementation or consummation of the Restructuring.

Section 9. Additional Consenting Vendor Undertakings. During the Support Period, unless there is an occurrence of an Event of Default described in Section 12(c), each Consenting Vendor hereby severally and not jointly irrevocably undertakes in favor of the other Parties that:

(a) it will provide all information reasonably requested by the Company to assist with the implementation of the Restructuring;

(b) it will not perform (or direct, request, instruct, encourage or procure that any other person performs) any Restricted Action; and

(i) work in good faith with the Company and its advisors to implement the Restructuring as soon as possible in a manner consistent with the terms of this Agreement;

(ii) to the extent any impediment arises that would prevent, hinder, or delay the consummation of the Restructuring, negotiate in good faith to address any such impediments;

(iii) not support any party or person from taking any unauthorized Restricted Actions; and

(iv) timely vote against or otherwise oppose any Alternative Restructuring.

For the avoidance of doubt, notwithstanding any term or provision of this Agreement which may be construed otherwise, nothing in this Agreement is intended to alter, prevent or restrict, or shall alter, prevent or restrict, a Consenting Vendor’s rights and ability to (a) to fully participate in any Insolvency Proceeding filed by or against the Company, including, e.g., by filing a claim (for the full balance of its Vendor Claim), motion, or seeking any relief against the Company; and (b) pursue, enforce, or take any actions with respect to a Claim against the Company that first accrued or arose after the Consenting Vendor’s execution of this Agreement.

Section 10. Vendor Terms. Unless more favorable terms are agreed with the Company, subject to the right of any Consenting Vendor to limit the quantum of credit exposure, during the Support Period each Consenting Vendor shall conduct business with the Company on the following terms:

(a) on or within thirty (30) days after the Company makes the Initial Payment required by Section 4(a)(i), the credit terms that were provided to the Company as of the Support Effective Date shall be increased by at least seven (7) days. Within sixty (60) days thereafter, the applicable credit terms shall be at least fourteen (14) days;

(b) if after making the Initial Payment required by Section 4(a)(i), the Company makes an additional payment to Consenting Vendors in an amount equal to the Initial Payment (i.e., 12.5% of the total Vendor Claim, which payment shall be separate and independent from Company’s monthly payments under Section 4(a)(ii) but allocated towards payment of the Agreed Vendor Claim, the Consenting Vendors shall provide to the Company the same terms that applied of June 2022; and

(c) if the Company fails to make any payment to a Vendor required under Section 4(a) (Treatment of Claims), such Vendor shall have the right to revert to less favorable terms of their choosing.

Section 11. Transfers. During the Support Period, each Consenting Vendor agrees that it will not, directly or indirectly, sell, transfer or assign any Claim held by such Vendor to any person or entity (each, a “Transfer”); provided, however, that any Consenting Vendor may Transfer its Claim (a) if the transferee is a party to this Agreement, (b) if the transfer is the result of a merger or acquisition, or (c) if the transferee is not a party to this Agreement prior to or upon the effectiveness of the Transfer, such transferee delivers to the Company, at or prior to the time of the proposed Transfer, a fully executed Accession Letter pursuant to which the transferee shall assume all obligations of the transferor hereunder in respect of the Claim being transferred. Any Transfer that does not comply with the foregoing shall be deemed void ab initio.

Section 12. Events of Default and Remedies

(a) The occurrence of any of the following specified events shall be an “Event of Default”:

(i) the Company fails to make any scheduled payment to Vendors required under Section 4 (Treatment of Claims);

(ii) the Company is in breach of a covenant, undertaking or representation made in this Agreement; or

(iii) the Company becomes the subject of an Insolvency Proceeding.

(b) Upon the occurrence of any Event of Default under Section 12(a)(i), interest on the remaining balance of each Agreed Vendor Claim shall accrue at a rate of 8.00% per annum until the Company has made three (3) consecutive scheduled Monthly Vendor Claim Payments (inclusive of the default rate interest that has accrued in that period), at which point such default shall be cured, interest shall cease to accrue and timely Monthly Vendor Claim Payments shall continue, subject to the accrual of interest as set forth in this subparagraph upon the occurrence of a subsequent Event of Default.

(c) Upon the occurrence of (i) an Event of Default under Section 12(a)(iii), (ii) an Event of Default because the Initial Payment is not made on the Initial Payment Date, (iii) an Event of Default under Section 12(a)(i) which the Company has failed to cure under Section 12(b) for a period of four (4) months, (iv) an Event of Default under Section 12(a)(ii) that constitutes Material Adverse Effect, or (v) the termination of this Agreement pursuant to section 13(b) or 13(c), each holder of an Agreed Vendor Claim shall have the right to enforce the full balance of its Vendor Claim (notwithstanding Sections 8 and 9 of the Agreement or anything in the Agreement that could be construed otherwise), which shall be calculated as the original amount of such Vendor Claim less any payments made pursuant to Section 4(a).

Section 13. Termination.

(a) This Agreement will terminate automatically on the earliest to occur of:

(i) Payment of the full amount of the Agreed Vendor Claim to each Consenting Vendor; and

(ii) the mutual written consent of the Company and the Requisite Consenting Vendors.

(b) The Company may, by giving written notice to the other Parties, terminate this Agreement if:

(i) if Consenting Vendors holding Claims in the aggregate amount of 25% of the Total Vendor Claim Amount breach any of its representations, warranties, or undertakings in this Agreement, unless the failure to comply is capable of remedy and is remedied within five (5) Business Days after the Company delivers a written notice to the relevant Consenting Vendor with a copy to the Committee Representative and Committee Counsel, alleging such a failure to comply; or

(ii) the board of directors, special committee of the board of directors, board of managers, or such similar governing body of the Company determines, after consulting with counsel and obtaining a written opinion of counsel which shall be shared with the Committee Representative and the Committee Counsel under a mutually acceptable non-disclosure and non- waiver of attorney -client privilege agreement, that (i) proceeding with the Restructuring would be inconsistent with the exercise of its fiduciary duties or applicable Law or (ii) in the exercise of its fiduciary duties, to pursue an Alternative Restructuring; or

(c) This Agreement may be terminated by written notice to the Company at the election of the Committee Representative if the full amount of the Initial Payment is not made, in good funds, on the Initial Payment Date or the Company breaches any of its representations, warranties, payment obligations or undertakings in this Agreement and such breach has a Material Adverse Effect, unless the failure to comply is capable of remedy and is remedied within ten (10) Business Days after notice of such breach is given to the Company by the Committee Representative.

(d) Upon any termination in accordance with this Section 13 (Termination) the relevant Party or Parties shall be immediately released from all their obligations and shall have no rights under this Agreement; provided that such termination and release shall not affect:

(i) in the case of termination that applies solely in respect of an individual Consenting Vendor, the rights, obligations, and liabilities of the other Consenting Vendors;

(ii) in the case of termination of the Agreement other than pursuant to Section 13(a)(i), the rights of Vendors to assert, collect, and/or pursue the full amount of their respective Vendor Claims;

(iii) any accrued rights in respect of breaches of this Agreement that occurred before such termination; or

(iv) the application of Section 13 (Termination), Section 15 (Waivers and Amendments), Section 16 (Confidentiality), and Section 17 (Miscellaneous), and any defined terms used in the aforementioned Sections as defined in Section 1 (Definitions) will remain in full force and effect.

(e) Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shall allow any Party to terminate this Agreement as a result of its own breach of this Agreement.

Section 14. Releases.

(a) Release by Company. As of the date of execution of this Agreement by each Consenting Vendor, the Company shall be deemed to have irrevocably and unconditionally, fully, finally, and forever released, acquitted, and discharged the executing Consenting Vendors from any and all demands, claims, actions, causes of action, rights, liabilities, obligations, liens, suits, losses, damages, attorney fees, court costs, or any other form of claim whatsoever, of whatever kind or nature, whether known or unknown, suspected or unsuspected, in law or equity, which the Company has, has had, may have or may claim to have against the Consenting Vendors arising on or prior to the Support Effective Date; provided that the foregoing release shall limit or be deemed to limit or release or be deemed to release the rights of the Company to enforce this Agreement in accordance with its terms.

(b) Release by Consenting Vendors. Subject to, conditioned upon, and following receipt by Vendors of all payments, in good funds, set forth in Section 4 (Treatment of Claims), the Consenting Vendors shall be deemed to have irrevocably and unconditionally, fully, finally, and forever released, acquitted, and discharged the Company from any and all demands, claims, actions, causes of action, rights, liabilities, obligations, liens, suits, losses, damages, attorney fees, court costs, or any other form of claim whatsoever, of whatever kind or nature, whether known or unknown, suspected or unsuspected, in law or equity, which the Consenting Vendors have, have had, may have or may claim to have against the Company arising on or prior to the date of the Consenting Vendors’ execution of this Agreement; provided that the foregoing release shall not limit or be deemed to limit or release or be deemed to release the rights of the Consenting Vendors to enforce this Agreement in accordance with its terms.

Section 15. Waivers and Amendments.

(a) This Agreement may be amended, modified, altered, or supplemented only by a written instrument executed by the Company and the Requisite Consenting Vendors.

(b) No delay on the part of any Party in exercising any right, power or privilege under this Agreement will operate as a waiver thereof; nor will any waiver on the part of any party to this Agreement of any right, power, or privilege under this Agreement operate as a waiver of any other right, power, or privilege under this Agreement, nor will any single or partial exercise of any right, power, or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power or privilege under this Agreement.

(c) Notwithstanding paragraphs (a) to (b) above, upon obtaining written consent of the Committee Representative, the Company may amend this Agreement to cure any defect or inconsistency, to make any amendment of a typographical nature or to make any other amendment that does not adversely affect the interests of the Consenting Vendors.

Section 16. Confidentiality.

(a) No Party may disclose confidential information about the Restructuring, this Agreement, or the identity of any Party to any such document (collectively, the “Confidential Information”) to any person provided that:

(i) the Company and its Connected Persons may disclose the existence of this Agreement or in any regulatory filings required by the Securities and Exchange Commission or in submissions made to any court of competent jurisdiction in connection with the Restructuring;

(ii) the Parties may disclose this Agreement to any of their Affiliates or Connected Persons, provided that prior to such disclosure, the relevant Connected Person has agreed with the Company to keep the terms of this Agreement confidential (unless already bound by the confidentiality agreement, law, regulation or professional duty to keep the same confidential); and

(iii) this Agreement (and any related notices) may be disclosed:

(A) to any Party’s regulator or as required by Law, regulation, governmental entity or court order; provided, that prior to such disclosure, the Party making the disclosure provides notice in writing to the other Parties and makes reasonable efforts to obtain the receiving party’s agreement to keep the terms of this Agreement confidential; and

(B) by the Company and its Connected Persons, as part of the negotiation of any potential transaction involving the Company, including any investment in the Company, in connection with settlement of any actual or potential lawsuit or other claims against the Company; provided, that prior to such disclosure, the Company makes reasonable efforts to obtain the receiving party’s agreement to keep the terms of this Agreement confidential.

Section 17. Miscellaneous.

(a) Notices. Any notices or other communications required or permitted under, or otherwise given in connection with, this Agreement will be in writing and will be deemed to have been duly given (i) when delivered or sent if delivered in person by courier service or messenger or sent by e-mail or (ii) on the next Business Day if transmitted by international overnight courier, in each case as follows:

If to the Company, addressed to it at:

Parts iD, Inc.

Attn: John B. Pendleton, General Counsel

1 Corporate Drive, Suite C

Cranbury, New Jersey 08512

Email: john.pendleton@corp.partsid.com

with a copy to (for information purposes only):

DLA Piper LLP (US)

Attn: R. Craig Martin, Esq.

Kaitlin MacKenzie

1201 North Market Street, Suite 2100

Wilmington, Delaware 19801

Email:

craig.martin@us.dlapiper.com
kaitlin.mackenzie@us.dlapiper.com

If to a Consenting Vendor or the Committee Representative, addressed to it at the address set forth on the Consenting Vendor’s and Committee Representative’s respective signature page(s) attached hereto with a copy to:

Cole Schotz P.C.

	Attn:	Stuart Komrower, Esq. and
		Mark Tsukerman, Esq
		25 Main Street
		Hackensack, New Jersey 07601

Email:	skomrower@coleschotz.com
	mtsukerman@coleschotz.com

(b) Governing Law. This Agreement will be governed by, and construed in accordance with, the Law of the State of Delaware, without regard to Law that may be applicable under conflicts of laws principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware.

(c) Venue. By execution and delivery of this Agreement, each of the Parties irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of any Delaware state court or any federal court sitting in Wilmington, Delaware over any legal or other proceeding arising out of, based upon or in connection with this Agreement or the transactions contemplated hereby. Each Party irrevocably waives any objection it may have to service of process other than by compliance with the notice provision of this Agreement or the venue of any action, suit, or proceeding brought in such courts or to the convenience of the fora.

(d) WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION 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).

(e) Specific Performance. The Parties agree that irreparable damage may occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties will be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of appropriate jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity (including attorneys’ fees and costs). 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.

(f) Severability. If any term or other provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement will nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties will negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible.

(g) Assignment. This Agreement will not be assigned by any Party by operation of Law or otherwise without the prior written consent of the other Parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by the Parties and their respective permitted successors and assigns.

(h) No Third-Party Beneficiaries. Unless expressly stated in this Agreement, this Agreement shall be solely for the benefit of the Parties and no other person or entity shall be a third-party beneficiary of this Agreement.

(i) Prior Agreements. This Agreement supersedes all prior negotiations and agreements among the Parties with respect to the matters set forth herein, provided that nothing herein shall relieve the Consenting Vendors party to the confidentiality agreement from their obligations thereunder.

(j) Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed will be deemed to be an original but all of which taken together will constitute one and the same agreement.

(k) Remedies Cumulative. Except as otherwise provided in this Agreement, any and all remedies in this Agreement expressly conferred upon a Party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy.

(l) No Admissions; Reservation of Rights. Nothing herein shall be deemed an admission of any kind. The Parties acknowledge and agree that this Agreement and all negotiations relating thereto shall not be admissible into evidence in any proceeding, other than a proceeding to enforce the terms of this Agreement. Except as expressly provided in this Agreement, nothing herein is intended to, or does, in any manner waive, limit, impair, or restrict any rights, remedies and interests of the Parties. Without limiting the foregoing sentence in any way, if this Agreement is terminated for any reason, each of the Parties fully reserves any and all of its rights, remedies, and interests.

(m) Headings. The headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement.

(n) Limitations. Notwithstanding anything contained in this Agreement, nothing in this Agreement shall (i) require the Company or any director or officer of the Company to take any action or to refrain from taking any action to the extent such person or persons determine, based on the advice of counsel, that taking or failing to take such action would be inconsistent with applicable Law or its or their fiduciary obligations under applicable Law; or (ii) prevent or otherwise restrict any action or inaction on the part of the Company or any director or officer of the Company that the Company or such director or officer believes is, based on the advice of counsel, inconsistent with applicable Law or its or their fiduciary obligations under applicable Law.

(o) Interpretation. This Agreement is the product of negotiations among the Parties, each of which has been represented by legal counsel during such negotiations and execution of this Agreement, and therefore in the enforcement or interpretation hereof, this Agreement is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Agreement, or any portion hereof, shall not be effective in regard to the interpretation hereof.

(p) Public disclosure. The Company shall not make any public filing relating to this Agreement prior to the execution by all members of the Committee. No public disclosure or filing shall contain the name of any Vendor that is a member of the Committee absent written consent of such Vendor.

(q) Company’s Solicitation of Vendors this Agreement. In soliciting Vendors to become a party to this Agreement, the Company shall provide each Vendor with a letter indicating, at a minimum, the amount of such Vendor’s Claim according to the Company’s books and records as of the date of solicitation, which amount shall be deemed the amount each of such Vendor’s Claim for purposes of this Agreement, unless resolved by the Company and the affected Vendor prior to the Vendor’s execution of the Agreement.

(r) Committee Representative and Committee Counsel.

(i) The Committee Representative shall have the authorization to undertake the items referenced herein as to him/her and to generally act on behalf of the Committee to advance the objectives and intent of this Agreement. Each Consenting Vendor, Additional Consenting Vendor and the Company agrees that any claims against, actions, rights to sue, other remedies or recourse to or against the Committee Representative for or in connection with any action, decision or determination by the Committee Representative, whether arising in Law or equity or created by rule of Law, contract (including this Agreement) or otherwise, are in each case expressly released and waived by each such Consenting Vendor, Additional Consenting Vendor and the Company to the fullest extent permitted by Law. To the maximum extent permitted by Law, the Committee Representative shall not be liable for, and will be indemnified by the Company against, any losses, liabilities and reasonable expenses, including attorneys’ fees, arising from proceedings in which the Committee Representative may be involved, as a part or otherwise, by reasons of its serving as the Committee Representative under this Agreement, whether or not it continues to be such at the time any such loss, liability or expenses is paid or incurred, except to the extent that any of the foregoing is determined by a final, non-appealable order of a court of competent jurisdiction to have been causes by fraud, bad faith or willful misconduct of such person.

(ii) The Committee Representative shall be represented by the Committee Counsel whose fees and expenses shall be paid by the Company pursuant to the same terms and conditions as the Company’s existing agreement with Committee Counsel. Furthermore, the Company shall pay the reasonable expenses of the Committee Representative incurred in the performance of the Committee Representative duties and obligations under this Agreement. Committee Counsel shall use best efforts to perform only those services consistent with the foregoing and its fees shall be capped at an amount to be agreed to by the Company by separate writing (e-mail being sufficient), as such amount may be modified by the Company in its reasonable discretion.

[Signature pages follow]

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first set forth above.

	COMPANY

	PARTS ID, INC.

	By:
		Name:
		Title:

	PARTS ID, LLC

	By:
		Name:
		Title:

[Signature Page to Restructuring Support Agreement]

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first set forth above.

CONSENTING VENDOR PARTY

[ ]

By:
	Name:	[●]
	Title:	[●]

	Notice Address:

	Attention:
	Email:

[Signature Page to Restructuring Support Agreement]

SCHEDULE 1

ADDITIONAL CONSENTING VENDOR ACCESSION LETTER

TO: Parts iD, Inc. and PARTS iD, LLC (together, the “Company”)

FROM: [Name of Additional Consenting Vendor]
[By Email]

Amount of Vendor Claim of Additional Consenting Vendor: $_______________

[●] 2023

Dear Madam/Sir,

Reference is made to the Restructuring Support Agreement dated October 6, 2023, among the Company and certain vendors (each, a “Consenting Vendor”) to the Company (as amended, amended and restated, supplemented or otherwise modified, the “RSA”). This is an Accession Letter for the purposes of the RSA. Capitalized terms used but not defined in this letter shall have the same meaning as in the RSA.

The undersigned hereby:

1.	represents that is the holder of a Claim against the Company in the amount of $[_______].

is entitled to receive the benefit of the Company’s obligations set forth in the RSA in exchange for which it agrees to be bound by and to comply with all the terms of the RSA with effect from the date of this Accession Letter as an Additional Consenting Vendor and hereafter shall be a “Consenting Vendor” and a “Party” for all purposes under the RSA;

gives the representations, warranties, and undertakings required to be given by Consenting Vendors under the RSA, including pursuant to Section 6 (Representations and Warranties of Consenting Vendors), Section 8 (All Parties Undertakings) and Section 9 (Additional Consenting Vendor Undertakings) of the RSA; and

agrees that this Accession Letter is governed by, and construed in accordance with, the Law of the State of Delaware, without regard to Law that may be applicable under conflicts of laws principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware.

Yours faithfully,

ADDITIONAL CONSENTING VENDOR

[Name]

By:
	Name:	[●]
	Title:	[●]

	Notice Address:

	Attention:
	Email:
	Tel. No.:

Exhibit C

(Financial Projections)

Financial Projections

In connection with the Disclosure Statement,¹ the Debtors’ management team (“Management”) prepared financial projections (the “Financial Projections”) for PARTS iD, Inc. and PARTS iD, LLC (collectively, the “Company” or the “Debtors”) for fiscal years 2024 through 2026 (the “Projection Period”). The Financial Projections were prepared by Management with the assistance of the Interim Chief Financial Officer and are based upon a number of assumptions made by Management with respect to the future performance of the Debtors’ operations. Although Management has prepared the Financial Projections in good faith and believes the assumptions to be reasonable, there can be no assurance that such assumptions will be realized. As described in detail in the Disclosure Statement, a variety of risk factors could affect the Debtors’ financial results and must be considered. Accordingly, the Financial Projections should be reviewed in conjunction with a review of the risk factors set forth in the Disclosure Statement and the assumptions described herein, including all relevant qualifications and footnotes.

The Debtors believe that the Plan meets the feasibility requirements set forth in section 1129(a)(11) of the Bankruptcy Code, as confirmation is not likely to be followed by liquidation or the need for further financial reorganization of the Debtors or any successor under the Plan. In connection with the planning and development of the Plan and for the purposes of determining whether the Plan would satisfy this feasibility standard, the Debtors analyzed their ability to satisfy their financial obligations while maintaining sufficient liquidity and capital resources.

These Financial Projections were not prepared with a view toward compliance with published guidelines of the United States Securities and Exchange Commission or guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. An independent auditor has not examined, compiled, or performed any procedures with respect to the prospective financial information contained in this Exhibit and, accordingly, it does not express an opinion or any other form of assurance on such information or its achievability. The Debtors’ independent auditor assumes no responsibility for, and denies any association with, the prospective financial information.

Principal Assumptions for the Financial Projections

The Financial Projections are based upon, and assume the successful implementation of, the Debtors’ business plan and the consummation of the Plan. The Financial Projections reflect numerous assumptions, including various assumptions regarding the anticipated future performance of the Debtors, industry performance, general business and economic conditions, and other matters, many of which are beyond the control of the Debtors or their advisors. In addition, the assumptions do not take into account the uncertainty and disruption of business that may accompany a restructuring pursuant to the Bankruptcy Code.

Capitalized terms used but not defined herein have the meanings given to such terms in the Joint Prepackaged Chapter 11 Plan of Reorganization of PARTS iD, Inc. and PARTS iD, LLC (as may be amended, supplemented, or otherwise modified from time to time, the “Plan”) or the Disclosure Statement Relating to the Joint Prepackaged Chapter 11 Plan of Reorganization of PARTS iD, Inc. and PARTS iD, LLC (as may be amended, supplemented, or otherwise modified from time to time, the “Disclosure Statement”), as applicable.

Therefore, although the Financial Projections are presented with numerical specificity, the actual results achieved during the Projection Period will likely vary from the projected results. These variations may be material. Accordingly, no definitive representation can be or is being made with respect to the accuracy of the Financial Projections or the ability of the Debtors to achieve the projected results of operations. See “Risk Factors.”

In deciding whether to vote to accept or reject the Plan, Holders of Claims entitled to vote to accept or reject the Plan must make their own determinations as to the reasonableness of such assumptions and the reliability of the Financial Projections. See “Risk Factors.”

Moreover, the Financial Projections were prepared solely in connection with the restructuring pursuant to the Plan.

The Financial Projections account for the reorganization and related transactions pursuant to the Plan. While the Debtors expect that they will be required to implement fresh start accounting upon emergence, they have not yet completed the work required to quantify the impact on the Financial Projections. When the Debtors fully implement fresh start accounting, differences from the depiction presented are anticipated and those differences could be material. Fresh start accounting requires all assets, liabilities, and equity instruments to be valued at “fair value.” In addition to valuing assets, liabilities, and equity instruments at fair value, the Debtors will have tax professionals analyze any go forward tax implications as a result of the Restructuring Transactions. The Financial Projections account for the anticipated Restructuring Transactions and related transactions pursuant to the Plan, but do not account for the final tax analysis that will be done upon emergence.

Safe Harbor under The Private Securities Litigation Reform Act of 1995

The Financial Projections contain statements which constitute “forward-looking statements” within the meaning of the Securities Act and the Securities Exchange Act. Forward-looking statements in the Financial Projections include the intent, belief, or current expectations of the Debtors and Management with respect to the timing of, completion of, and scope of the current restructuring, Plan, bank financing, and debt and equity market conditions and the Debtors’ future liquidity, as well as the assumptions upon which such statements are based.

While the Debtors believe that the expectations are based upon reasonable assumptions within the bounds of their knowledge of their business and operations, parties in interest are cautioned that any such forward-looking statements are not guarantees of future performance, and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

Select Risk Factors Related to the Financial Projections

The Financial Projections are subject to inherent risks and uncertainties, most of which are difficult to predict and many of which are beyond Management’s control. Many factors could cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. A description of the risk factors associated with the Plan, the Disclosure Statement, and the Financial Projections is included in Article IX of the Disclosure Statement.

Financial Projection General Assumptions

Basis of Presentation (Non-GAAP)

The Debtors’ projections contained herein are non-GAAP and are prepared based on the Company’s ownership shares in the properties and other assets. The projections are not created in accordance with American Institute of Certified Public Accountants Statement of Position 90-7.

The Financial Projections are based upon, and assume the successful implementation of, the Debtors’ Business Plan during the course of the Projection Period.

The Financial Projections assume that the Plan will be consummated in accordance with its terms and that all transactions contemplated by the Plan will be effectuated by February 16, 2024 (the “Emergence Date”). Any significant delay in the Emergence Date may have a significant negative effect on the operations and financial performance of the Debtors including, an increased risk or inability to meet sales forecasts and the incurrence of higher reorganization expenses.

The following assumptions highlight the main categories of the Financial Projections.

Income Statement

Revenues: The Debtors’ revenues consist entirely of the sale of automotive parts, accessories, and related products on the Debtors’ several websites, most prominent of which, is http://www.carid.com. At present, and during the first projected year, the Debtors’ deploy a drop ship model which allows the Debtors to list and price merchandise by algorithmically interfacing with the vendors. Gross Revenues reflect gross sales, and Net Revenues reflect sales after taking into account cancellations and returns (“C&Rs”). The Debtors have undertaken several initiatives that are projected to reduce the C&R percentage gradually from approximately 14% today to approximately 9% by the end of the Projected Period, which is the level of C&R that the Debtors had been able to achieve in prior years.

Cost of Goods Sold: Cost of Goods Sold is a function of the existing gross margin of approximately 25%, which is projected to improve to approximately 35% by the end of the Projection Period as the reorganized Debtors improve their pricing power and supplement the drop ship model with private label parts offerings, which carry substantially higher margins.

Operations Expenses: The Debtors operate in a competitive online marketplace that relies heavily on online advertising. The advertising expense is projected to increase as a percentage of Gross Revenue over the Projected Period. The Debtors are implementing sophisticated tools and analyses to assure that advertising expenditures provide a high return on investment. The Debtors also operate a technologically sophisticated business that relies heavily on the strength of the Debtor’s development team, as well as physical infrastructure. Finally, Operations Expenses cover the Debtors’ experienced support personnel that perform both customer-facing and back-office customer order management functions.

G&A Expenses: General and Administrative expenses include salaries and benefits of the Debtors’ highly qualified employee base, rent, and other corporate expenses.

Interest Expense: This category includes projected interest associated with future indebtedness related to the projected expansion of the Debtors’ operations and asset-based lending facilities projected to finance inventory purchases.

Restructuring Costs: This category reflects the Debtors’ current estimate of the restructuring costs to be incurred in the Projected Period.

INCOME STATEMENT	2024			2025			2026
Gross Revenues		183,317			306,164			397,029
Net Ratio		88	%		89	%		91	%
Net Revenues		160,642			273,867			362,978
Cost of Goods Sold		115,617			184,532			234,499
Gross Profit		45,025			89,335			128,479
Expenses
Operating Expenses		34,971			60,534			83,714
General & Administrative Expenses		13,375			21,171			25,405
Total Expenses		48,346			81,705			109,119
EBITDA		(3,321	)		7,630			19,361
Interest Expense		-			1,783			2,823
Restructuring Costs		2,200			-			-
Taxes		-			1,356			3,928
Depreciation		75			425			825
Net Income/Loss		(5,596	)		4,067			11,784

Balance Sheet & Statement of Cash Flows

Cash: This category includes consolidated cash balances. The Statement of Cash Flows reflects the accretive effect of increasing cash as a result of realizing vendor terms combined with an increase in revenues following the consummation of the Plan. It also reflects future capital expenditures and financing arrangements. Importantly, the Statement of Cash Flows demonstrates the Debtors’ ability to repay the remaining 30% of Vendor Claims over the 36 months of the Projected Period.

Current Assets: These categories include accounts receivable and other currents assets, which consist primarily of vendor credits.

Inventory and Fixed Assets: These categories reflect the Debtors’ gradual increase in private-label inventory buildup and related warehouse facilities.

Current Liabilities: This category reflects accounts payable and other current liabilities and demonstrates the Debtors’ ability to benefit from the terms extended by their vendor base.

Remaining Ch11 Vendor Debt: The reduction in this category demonstrates the Debtors’ ability to repay the remaining 30% of the Vendor Claims over the Projected Period.

Funded Debt: These categories reflect the Debtors’ projected ability to access financing to leverage their inventory and fixed asset base.

Preferred Equity and Common Equity: These categories Reflect hypothetical fresh start account adjustments for illustrative purposes. When the Debtors fully implement fresh start accounting, differences from the depiction presented are anticipated and those differences could be material.

BALANCE SHEET	2024			2025			2026
Assets
Cash		25,086			15,561			19,159
Current Assets		8,005			8,158			8,459
Inventory		9,168			22,537			48,734
Fixed Assets & Goodwill		29,771			37,671			45,571
Total Assets		72,029			83,927			121,923
Liabilities
Accounts Payable & Other Current Liabilities		18,778			14,638			24,877
Remaining Chll Vendor Claims		6,814			3,786			757
Funded Debt		15,000			30,000			49,000
Total Liabilities		40,592			48,424			74,635
Equity
Preferred Equity		32,500			32,500			32,500
Common Equity		4,534			4,534			4,534
Retained Earnings		(5,596	)		(1,530	)		10,255
Total Liabilities & Equity		72,029			83,927			121,923

STATEMENT OF CASH FLOWS	2024			2025			2026
Net Income		(5,596	)		4,067			11,784
Current Assets		60			(153	)		(301	)
Inventory		(7,976	)		(13,370	)		(26,196	)
Accounts Payable & Other Current Liabilities		18,778			(4,140	)		10,240
Operating Activities		5,266			(13,596	)		(4,473	)
Fixed Assets		(4,444	)		(7,900	)		(7,900	)
Investing Activities		(4,444	)		(7,900	)		(7,900	)
Remaining Chll Vendor Claims		(2,271	)		(3,029	)		(3,029	)
Funded Debt		15,000			15,000			19,000
Preferred Equity		9,617			-			-
Financing Activities		22,346			11,971			15,971
Cash at Beginning of Period		1,918			25,086			15,561
Net Change in Cash		23,168			(9,525	)		3,598
Cash at End of Period		25,086			15,561			19,159

Exhibit D

(Liquidation Analysis)

Liquidation Analysis

THE DEBTORS MAKE NO REPRESENTATIONS OR WARRANTIES REGARDING THE ACCURACY OF THE ESTIMATES AND ASSUMPTIONS CONTAINED HEREIN, OR A TRUSTEE’S ABILITY TO ACHIEVE FORECASTED RESULTS. IF THE CHAPTER 11 CASES ARE CONVERTED TO A CHAPTER 7 LIQUIDATION, ACTUAL RESULTS COULD VARY MATERIALLY FROM THE ESTIMATES AND PROJECTIONS SET FORTH IN THIS LIQUIDATION ANALYSIS.

Overview

Under the “best interests” of creditors test set forth in section 1129(a)(7) of the Bankruptcy Code, the Bankruptcy Court may not confirm a plan of reorganization unless the plan provides that each holder of a Claim or Interest who does not otherwise vote in favor of the plan “will receive or retain under the plan on account of such claim or interest property of a value, as of the effective date of the plan, that is not less than the amount that such holder would so receive or retain if the debtor were liquidated under chapter 7” of the Bankruptcy Code. To demonstrate that the proposed Plan satisfies the “best interests” of creditors test, PARTS iD, Inc. and PARTS iD, LLC, as debtors and debtors in possession (collectively, the “Debtors” or the “Company”), with the assistance of the Debtors’ management and other advisors, have prepared the following hypothetical Liquidation Analysis (the “Liquidation Analysis”), which is based upon certain assumptions discussed in the Disclosure Statement and in the accompanying notes to the Liquidation Analysis. As reflected in more detail in the Liquidation Analysis, the Debtors believe that the value of the distributions provided to each Holder of Allowed Claims under the Plan would not be less than the value of such distributions under a hypothetical chapter 7 liquidation, and the Plan therefore satisfies the “best interests” test with respect to each of the Debtors.

This Liquidation Analysis¹ has been prepared assuming that the Debtors hypothetically convert these chapter 11 cases to undertake a liquidation under chapter 7 of the Bankruptcy Code as of February 16, 2024 (the “Conversion Date”). Except as otherwise noted herein, the values reflected in this Liquidation Analysis are based upon the Debtors’ unaudited books and records as of November 30, 2023, other than cash, which has been rolled forward to the Conversion Date, and those values are assumed to be representative of the Debtors’ assets and liabilities as of the Conversion Date. This Liquidation Analysis also assumes that the Bankruptcy Court would appoint a chapter 7 trustee (the “Trustee”) on the Conversion Date to oversee the liquidation of the Debtors’ Estates, during which time substantially all of the Debtors’ assets would be sold, abandoned, surrendered, or otherwise liquidated, as applicable, and the Cash proceeds, net of liquidation-related costs, would then be distributed in accordance with applicable law.

This Liquidation Analysis has not been examined or reviewed by independent accountants in accordance with standards promulgated by the American Institute of Certified Public Accountants. Although the Debtors consider the estimates and assumptions set forth herein to be reasonable under the circumstances, such estimates and assumptions are inherently subject to significant uncertainties and contingencies beyond the Debtors’ control. Accordingly, there can be no assurance that the results set forth by this Liquidation Analysis would be realized if the Debtors were actually liquidated pursuant to chapter 7 of the Bankruptcy Code, and actual results in such a proceeding could vary materially from those presented herein, and distributions available to Holders of Claims could differ materially from the projected recoveries set forth in this Liquidation Analysis.

Capitalized terms used but not defined herein have the meanings given to such terms in the Joint Prepackaged Chapter 11 Plan of Reorganization of PARTS iD, Inc. and PARTS, iD, LLC (as may be amended, supplemented, or otherwise modified from time to time, the “Plan”) or the Disclosure Statement Relating to the Joint Prepackaged Chapter 11 Plan of Reorganization of PARTS iD, Inc. and PARTS, iD, LLC (as may be amended, supplemented, or otherwise modified from time to time, the “Disclosure Statement”), as applicable.

THIS LIQUIDATION ANALYSIS IS A HYPOTHETICAL EXERCISE THAT HAS BEEN PREPARED FOR THE SOLE PURPOSE OF PRESENTING A REASONABLE GOOD FAITH ESTIMATE OF THE PROCEEDS THAT MAY BE REALIZED IF THE DEBTORS WERE LIQUIDATED IN ACCORDANCE WITH CHAPTER 7 OF THE BANKRUPTCY CODE AS OF THE CONVERSION DATE. THIS LIQUIDATION ANALYSIS IS NOT INTENDED AND SHOULD NOT BE USED FOR ANY OTHER PURPOSE. THIS LIQUIDATION ANALYSIS DOES NOT PURPORT TO BE A VALUATION OF THE DEBTORS’ ASSETS AS A GOING CONCERN AND THERE MAY BE A SIGNIFICANT DIFFERENCE BETWEEN THE VALUES AND RECOVERIES REPRESENTED IN THIS LIQUIDATION ANALYSIS AND THE VALUES THAT MAY BE REALIZED OR CLAIMS GENERATED IN AN ACTUAL LIQUIDATION.

NOTHING CONTAINED IN THIS LIQUIDATION ANALYSIS IS INTENDED TO BE, OR CONSTITUTES, A CONCESSION, ADMISSION, OR ALLOWANCE OF ANY CLAIM BY THE DEBTORS. THE ACTUAL AMOUNT OR PRIORITY OF ALLOWED CLAIMS IN THESE CHAPTER 11 CASES COULD MATERIALLY DIFFER FROM THE ESTIMATED AMOUNTS SET FORTH AND USED IN THIS LIQUIDATION ANALYSIS. THE DEBTORS RESERVE ALL RIGHTS TO SUPPLEMENT, MODIFY, OR AMEND THE ANALYSIS SET FORTH HEREIN.

Basis of Presentation

The actual amount and/or priority of Claims Allowed against the Debtors’ Estates may differ from the Claim amounts used in this Liquidation Analysis. As noted above, this Liquidation Analysis is based on the Debtors’ books and records as of November 30, 2023, other than cash, which reflects a projected balance on the Conversion Date in accordance with the budget, and the actual value of assets available for distribution in the event of an actual liquidation may differ materially from the assets assumed to be available pursuant to this Liquidation Analysis.

Global Notes & Assumptions

This Liquidation Analysis should be read in conjunction with, and is qualified in its entirety by, the following notes and assumptions:

Additional Claims. The cessation of business in a chapter 7 liquidation is likely to cause additional Claims to be asserted against the Debtors’ Estates that otherwise would not exist absent such a liquidation. Examples of these kinds of Claims include employee-related Claims such as severance, tax liabilities, Claims related to the rejection of Executory Contracts, litigation claims, and other Claims. These additional Claims could be significant and, in certain circumstances, may be entitled to priority under the Bankruptcy Code. No adjustment has been made for these potential Claims in this Liquidation Analysis.

Length of Liquidation Process. The Liquidation Analysis assumes a process of approximately one year from the Conversion Date to conduct the orderly disposition of substantially all the Debtors’ assets, to collect receivables, to arrange for distributions, and to wind-down the Debtors’ Estates.

Litigation. Due to its currently indeterminable value, this analysis does not reflect any recovery from any litigation in which the Debtors are plaintiffs; therefore, the actual liquidation value of the Debtors could vary materially from the estimates provided herein.

Specific Notes to the Liquidation Analysis

Certain assumptions utilized by the Debtors in preparing the Liquidation Analysis are outlined below. For purposes of this analysis, certain discounts were taken to assumed going concern values, reflecting the accelerated timeline and uncertainty of a liquidation sales process.

A.	Debtors’ Assets

Cash

The Debtors’ estimated balance of unrestricted cash as of the Conversion Date is approximately $118,000.

All Debtors’ projected cash on hand is assumed to be 100% recoverable.

2.	Accounts Receivable

The Debtors’ estimated accounts receivables balance as of the Conversion Date is approximately $812,000.

Accounts receivable consist primarily of funds charged by the payment processors but not yet remitted to the Debtors.

For the purposes of the Liquidation Analysis, the Debtors assume a recovery range for this category of assets of 75% to 100%.

3.	Inventory

The Debtors’ estimated inventory balance as of the Conversion Date is approximately $1.2 million.

The inventory consists primarily of private-label apparel and accessories and is aged at least 12-18 months.

For the purposes of the Liquidation Analysis, the Debtors assume a recovery range for this category of assets of 5% to 15%.

4.	Other Current Assets

The Debtors’ estimated other current assets balance as of the Conversion Date is approximately $7.0 million.

This asset class consists primarily of credits that the Debtors have with their vendors.

For the purposes of the Liquidation Analysis, the Debtors assume a recovery range for this category of assets of 5% to 15%.

5.	Fixed Assets

The Debtors’ estimated other current assets balance as of the Conversion Date is approximately $9.5 million.

This asset class consists primarily of capitalized costs of software developed by the Debtors (net of depreciation).

For the purposes of the Liquidation Analysis, the Debtors assume a recovery range for this category of assets of 5% to 25%.

6.	Security Deposits and Reserves

The Debtors’ estimated other current assets balance as of the Conversion Date is approximately $804,000.

This asset class consists primarily of reserves held by the payment processors.

For the purposes of the Liquidation Analysis, the Debtors assume a recovery range for this category of assets of 75% to 100%.

B.	Chapter 7 Liquidation Costs

1.	Chapter 7 Trustee Fees

Pursuant to sections 326 and 330 of the Bankruptcy Code, the Bankruptcy Court may allow reasonable compensation for the Trustee’s services, not to exceed 25% on the first $5,000 or less, 10% on any amount in excess of $5,000 but not in excess of $50,000, 5% on any amount in excess of $50,000 but not in excess of $1.0 million, and reasonable compensation not to exceed 3% of such moneys in excess of $1.0 million, upon all moneys disbursed or turned over by the Trustee to parties-in-interest. For the purposes of this Liquidation Analysis, these fees are calculated using the above formula.

2.	Chapter 7 Trustee’s Counsel

Pursuant to section 726 of the Bankruptcy Code, the allowed administrative expenses incurred by the Trustee, including expenses affiliated with selling the Debtors’ assets and winding down operations, will be entitled to payment in full prior to any distribution to Administrative Claims and Other Priority Claims. This Liquidation Analysis assumes that professional fees will be 2.5% of the gross liquidation proceeds realized, which is based on expected fees and expenses of legal, financial, and other professionals as well as the anticipated complexity of the Debtors’ liquidation and wind-down.

3.	Other Winddown Costs

Winddown costs consist primarily of the ordinary course general and administrative costs that will be required to operate the Debtors’ businesses for an approximate three-month period after the Conversion Date.

The Debtors assume that the wind down costs, in the aggregate, will be approximately $75,000. This amount is comprised of, but not limited to, corporate payroll, benefits, insurance, and office expenses during the wind-down.

C.	Distribution of Proceeds

The costs, expenses, fees and any other Claims that may arise and constitute necessary costs and expenses in the event of a liquidation would be paid in full from the liquidation proceeds before the balance of those proceeds would be made available to holders of Unsecured Claims. For purposes of this analysis, Claims were estimated based on the Debtors’ estimated book asset balances as of the Petition Date.

This analysis considers the effect that a chapter 7 liquidation would have on the ultimate proceeds available for distribution to creditors, including: (i) the increased costs and expenses of a liquidation arising from fees payable to the Trustee and the various professional advisors the Trustee would hire to effectuate the liquidation process and (ii) a deterioration in the value of the Debtors’ assets in the event of an accelerated liquidation.

Further, underlying the Liquidation Analysis are a number of estimates and assumptions that are inherently subject to significant economic, competitive, and operational uncertainties and contingencies beyond the control of the Debtors or the Trustee. In addition, various liquidation decisions upon which certain assumptions are based, are subject to change. Therefore, there can be no assurance that the assumptions and estimates utilized in determining the liquidation values of the Debtors’ assets will result in an accurate estimate of proceeds that would be realized were the Debtors to undergo an actual liquidation. The actual amounts of Claims against the Estates could vary significantly from the estimates set forth herein, depending on the Claims asserted during the pendency of the chapter 7 cases. Moreover, the Liquidation Analysis may not contemplate all potential liabilities that may arise as a result of litigation, tax consequences, inability to sell certain assets, or any other potential Claims. This analysis excludes potential recoveries from avoidance actions or intangible assets and excludes incremental costs for the pursuit of such recoveries. Therefore, the actual liquidation value of the Debtors’ assets could vary materially from the estimates provided herein.

As noted above, there could be materially adverse tax consequences if the liquidation is not consummated within a calendar tax year. Furthermore, this Liquidation Analysis, due to the complexity and varying liquidation proceed considerations, does not contemplate potentially considerable tax liabilities as a result of the sale of properties. These tax consequences could have material impact on the amount of proceeds received upon liquidation and associated Claims.

1.	Administrative Claims

Administrative Claims arising in a hypothetical chapter 7 liquidation may include, among other things: (a) Claims arising pursuant to section 503(b)(9) of the Bankruptcy Code; (b) pre-conversion professional fees; (c) postpetition trade payables; (d) accrued postpetition employee obligations; (e) accrued taxes; (f) accrued utility payments; (g) post-petition intercompany payables; (h) other liabilities incurred by the Estates in the ordinary course of business; and other potential Claims.

This Liquidation Analysis assumes there will be no Administrative Claims outstanding as of the Conversion Date. The total amount of Administrative Claims allowed in these Chapter 11 Cases could differ materially from the assumptions set forth in this Liquidation Analysis, thereby reducing recoveries available to Holders of Claims in a chapter 7 liquidation.

2.	Senior Secured Note Claims

This Liquidation Analysis assumes that the aggregate principal amount owed, as of the assumed Conversion Date, in respect of the Senior Secured Note Claims is $4.9 million.

This Liquidation Analysis shows that the Senior Secured Note Claims will receive between a 0% and 55% recovery in a chapter 7 liquidation.

3.	Merchant Cash Advances Claims

This Liquidation Analysis assumes that the aggregate principal amount owed, as of the assumed Conversion Date, in respect of the Merchant Cash Advances Claims is $1.1 million.

This Liquidation Analysis shows that the Merchant Cash Advances Claims will receive a 0% recovery in a chapter 7 liquidation.

4.	New Money DIP Claims

This Liquidation Analysis assumes that the aggregate principal amount owed, as of the assumed Conversion Date, in respect of the DIP Loan Claim is $6.0 million.

This Liquidation Analysis shows that the DIP Loan Claim will receive a 0% recovery in a chapter 7 liquidation.

5.	Roll-Up DIP Claims

This Liquidation Analysis assumes that the aggregate principal amount owed, as of the assumed Conversion Date, in respect of the Roll-Up DIP Claims is $6.3 million, consisting of $3.0 million in Tranche 1 and $3.3 million in Tranches 2 and 3.

This Liquidation Analysis shows that the Roll-Up DIP Claims will receive 0% recovery in a chapter 7 liquidation.

6.	Subordinated Secured Note Claims

This Liquidation Analysis assumes that the aggregate principal amount owed, as of the assumed Conversion Date, in respect of the Subordinated Secured Note Claims is $7.5 million.

This Liquidation Analysis shows that the Subordinated Secured Note Claims will receive 0% recovery in a chapter 7 liquidation.

7.	General Unsecured Claims

This Liquidation Analysis assumes that General Unsecured Claims arising in a hypothetical chapter 7 liquidation include: (a) Vendor Claims of approximately $30.4 million; (b) Convenience Claims of approximately $836,000; (c) General Unsecured Claims of approximately $16.1 million; and (d) combined secured claimants deficiency claims of approximately $24.6 million for a total of $72.0 million.

This Liquidation Analysis shows that General Unsecured Claims will receive no recovery in a chapter 7 liquidation.

8.	Existing Equity Interests

This Liquidation Analysis shows Existing Equity Interests will receive no recovery in a chapter 7 liquidation.

Conclusion

The Debtors have determined, as summarized in this Liquidation Analysis, that the Plan will provide holders of Vendor Claims with a recovery that is significantly greater than what they would otherwise receive if the Estates were liquidated under chapter 7 of the Bankruptcy Code.

The following table summarizes this Liquidation Analysis for the aggregated Debtor entities. This Liquidation Analysis should be reviewed with the accompanying “Specific Notes to the Liquidation Analysis.”

As of February 16, 2024			Low Estimate					Midpoint Estimate					High Estimate
(Hypothetical Ch.7 Conversion Date)		Book Value		Recovery		% of Book			Recovery		% of Book			Recovery		% of Book
Assets
Cash (projected as of the Effective Date)	$	118	$	118		100	%	$	118		100	%	$	118		100	%
Accounts Receivable		812		609		75	%		690		85	%		812		100	%
Inventory		1,192		60		5	%		119		10	%		179		15	%
Other Current Assets		6,949		347		5	%		695		10	%		1,042		15	%
Fixed Asset s		9,507		475		5	%		951		10	%		2,377		25	%
Security Deposits & Reserves		804		603		75	%		683		85	%		804		100	%
Total Assets	$	19,382	$	2,213		11	%	$	3,257		17	%	$	5,332		28	%
Chapter 7 Liquidation Costs
Chapter 7 Trustee Fees				(90	)				(121	)				(183	)
Chapter 7 Trustee's Counsel				(66	)				(98	)				(160	)
Other Winddown Costs				(75	)				(75	)				(75	)
Chapter 11 Professional Fee Carve-Out				(2,200	)				(2,200	)				(2,200	)
Total Chapter 7 Liquidation Costs				(2,431	)				(2,494	)				(2,618	)
Proceeds Available for Distribution			$	(218	)			$	763				$	2,714

	Estimated Claim Amounts
Secured Creditor Claims
Senior Secured Financing		4,879		-		0	%		763		16	%		2,714		56	%
Merchant Cash Advances		1,121		-		0	%		-		0	%		-		0	%
New Money DIP Claims		6,000		-		0	%		-		0	%		-		0	%
DIP Rollup Claims – Tranche 1		3,000		-		0	%		-		0	%		-		0	%
DIP Rollup Claims – Tranches 2 & 3		3,326		-		0	%		-		0	%		-		0	%
Subordinated Secured Note Claims		7,463		-		0	%		-		0	%		-		0	%
Total Secured Creditor Claims		25,788	$	-		0	%	$	763		3	%	$	2,714		11	%
Proceeds Available to Unsecured Creditors			$	-				$	-				$	-
Unsecured Creditor Claims
Vendor Claims		30,387	$	-		0	%	$	-		0	%	$	-		0	%
Convenience Claims		836		-		0	%		-		0	%		-		0	%
General Unsecured Credit or Claims		16,139		-		0	%		-		0	%		-		0	%
Secured Credit or Deficiency Claims (avg)		24,629		-		0	%		-		0	%		-		0	%
Total Unsecured Creditor Claims		71,991	$	-		0	%	$	-		0	%	$	-		0	%
Proceeds Available to Existing Equity Interests			$	-				$	-				$	-

Cover	Dec. 19, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 19, 2023
Entity File Number	001-38296
Entity Registrant Name	PARTS iD, Inc.
Entity Central Index Key	0001698113
Entity Tax Identification Number	81-3674868
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1 Corporate Drive
Entity Address, Address Line Two	Suite C
Entity Address, City or Town	Cranbury
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	08512
City Area Code	609)
Local Phone Number	642-4700
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A Common Stock
Trading Symbol	ID
Security Exchange Name	NYSEAMER
Entity Emerging Growth Company	false