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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):
October 20, 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.
Unsecured Promissory Note
On October 20, 2023, PARTS iD, Inc., a Delaware
corporation (the “Company”) entered into a Note Purchase Agreement (the “Unsecured Purchase Agreement”) whereby
the Company agreed to issue and sell to Sanjiv Gomes, the Company’s Chief Information Officer, in a private placement, an unsecured
promissory note in the aggregate principal amount of $1,000,000 (the “Unsecured Note”). The Unsecured Note bears interest
at the rate of 7.75% per annum, compounded semi-annually, and matures on October 20, 2024. 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 Unsecured Purchase
Agreement and the Unsecured Note.
The Unsecured Note is unsecured and is strictly
subordinated in right of payment to the prior payment in full of all of the (i) indebtedness owed by the Company to Lind Global Fund II
LP pursuant to that certain Securities Purchase Agreement, dated as of July 14, 2023, as amended and (ii) litigation funding provided
by Pravati Capital, LLC to the Company pursuant to that certain Litigation Funding Agreement, dated as of September 29, 2023. The Unsecured
Note also provides that the Company and Mr. Gomes intend for the Unsecured 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).
The Company intends to use the proceeds from the
issuance of the Unsecured Note for working capital purposes and the repayment of current indebtedness.
The Unsecured Note was issued by the Company in reliance on the exemption
from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and has not
been registered under the Securities Act.
The foregoing descriptions of the Unsecured Purchase
Agreement and the Unsecured Note thereby are not complete and are subject to, and qualified in their entirety by reference to, the full
text of the Unsecured Purchase Agreement and the form of Unsecured Note, which are included as Exhibits 10.1 and 10.2 to this Current
Report on Form 8-K, respectively, and are 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 issuances of the Unsecured Note and the Secured Note is incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed as
part of this report:
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: October 26, 2023 |
By: |
/s/ Lev Peker |
| |
|
Name: Lev Peker |
| |
|
Title: Chief Executive Officer |
3
Exhibit 10.1
Execution Version
Note Purchase Agreement
This NOTE PURCHASE AGREEMENT
(this “Agreement”) is made as of the 20th day of October, 2023 (the “Effective Date”) by and among
PARTS iD, Inc., a Delaware corporation (the “Company”), and the purchaser listed on Exhibit A attached hereto
(the “Purchaser”, and individually, a “Purchaser”). Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings given to them in the Note (as defined below).
RECITALS
Subject to the terms of this
Agreement, the Purchaser desires to advance loans (the “Loans”) to the Company and the Company desires to borrow from
the Purchaser up to an aggregate principal amount of One Million Dollars ($1,000,000), evidenced by an unsecured promissory note, the
form of which is attached hereto as Exhibit B (the “Note”).
The parties hereby agree as
follows:
1.
Amount and Terms of the Note.
1.1 The
Closing. The closing of the purchase and sale of the Note (the “Closing”) shall be held on the Effective Date or
at such other time as the Company and the Purchaser have mutually agreed upon (the “Closing Date”).
1.2 At
the Closing , with respect to the Purchaser, (i) the Purchaser will deliver to the Company wire transfer funds in the amount of the sum
of the Purchaser’s Loan Amount, as set forth next to the Purchaser’s name on Exhibit A attached hereto; and (ii) the
Company shall issue and deliver to the Purchaser a Note in favor of the Purchaser in the principal amount of the Purchaser’s Loan
Amount.
2.
Representations, Warranties and Covenants of the Company.
The Company hereby represents
and warrants to the Purchaser that the following representations and warranties are true and complete as of the Effective Date and the
Closing Date, except as otherwise indicated:
2.1 Organization;
Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to carry on its business as presently conducted and as proposed
to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure
to so qualify would have a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition,
property or results of operations of the Company.
2.2 Capitalization.
(a) As
of June 30, 2023, the authorized capital of the Company consists of:
(i) 110,000,000
shares of common stock, $0.0001 par value per share, including 100,000,000 shares of Class A common stock (the “Common Stock”)
and 10,000,000 shares of Class F common stock, with 34,825,971 shares of Class A common stock and no shares of Class F common stock issued
and outstanding immediately prior to the Effective Date. All of the outstanding shares of common stock have been duly authorized, are
fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws. The Company holds no
common stock in its treasury; and
(ii) 1,000,000
shares of preferred stock, $0.0001 par value per share, none of which are outstanding immediately prior to the Effective Date.
(b) As
of immediately prior to the Effective Date, the Company has reserved:
(i) 3,212,078
shares of Common Stock for future issuance to officers, directors, employees, consultants and advisors of the Company pursuant to its
2020 Equity Incentive Plan duly adopted by the board of directors (the “Board of Directors”) and approved by the Company’s
stockholders, of which 2,580,445 shares of Common Stock are subject to outstanding equity awards; and
(ii) 2,043,582
shares of Common Stock for future issuance to officers and employees of the Company pursuant to its 2020 Employee Stock Purchase Plan
duly adopted by the Board of Directors and approved by the Company’s stockholders.
2.3 Subsidiaries.
Except as set forth on Schedule 2.3 attached hereto, the Company does not currently own or control, directly or indirectly, any
interest in any other corporation, partnership, trust, joint venture, limited liability company, association, or other business entity.
The Company is not a participant in any joint venture, partnership or similar arrangement.
2.4 Corporate
Power. The Company has all requisite corporate power to execute and deliver this Agreement and the Note and any other document provided
for herein or by any of the foregoing (collectively, as the same may from to time be amended, modified, supplemented or restated, the
“Loan Documents”) and to carry out and perform its obligations under the terms of the Loan Documents.
2.5 Authorization.
All corporate action on the part of the Company, its directors and its stockholders necessary for the authorization, execution,
delivery and performance of the Loan Documents by the Company and the performance of the Company’s obligations thereunder,
including the authorization for the issuance and delivery of the Note, has been taken or will be taken prior to the issuance of such
equity securities. The Loan Documents, when executed and delivered by the Company, shall constitute valid and binding obligations of
the Company enforceable in accordance with their terms, subject to laws of general application relating to equitable principles,
bankruptcy, insolvency, the relief of debtors and, with respect to rights to indemnity, subject to federal and state securities
laws. The issuance of the Note pursuant to the provisions of this Agreement will not give rise to any preemptive rights or rights of
first refusal granted by the Company, and the Note will be issued in compliance with all applicable
federal and state securities laws, and will be free of any liens or encumbrances, other than any liens or encumbrances created by or
imposed upon the holders through no action of the Company; provided, however, that the Note may be subject to restrictions on
transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time the
transfer is proposed.
2.6 Offering.
Assuming the accuracy of the representations and warranties of the Purchaser contained in Section 3 hereof, the offer, issue, and
sale of the Note is and will be exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended
(the “Securities Act”), and have been registered or qualified (or are exempt from registration and qualification) under
the registration, permit, or qualification requirements of all applicable state securities laws.
2.7 Compliance
with Other Instruments. Neither the authorization, execution and delivery of this Agreement, nor the issuance and delivery of the
Note will constitute or result in a default or violation of (a) any law or regulation applicable to the Company, (b) any term or provision
of the Company’s certificate of incorporation or bylaws, as each may be amended and/or restated from time to time, or (c) any provision
of any mortgage, indenture or contract to which it is a party and by which it is bound or of any judgment, decree, order or writ, other
than, with respect to clauses (a) and (c), such violations that would not individually or in the aggregate have a material adverse effect
on the Company. The execution, delivery and performance of the Loan Documents, and the consummation of the transactions contemplated by
the Loan Documents, will not result in any such violation or be in conflict with, or constitute, with or without the passage of time and
giving of notice, either a default under any such provision, instrument, judgment, decree, order or writ or an event that results in the
creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, impairment, forfeiture, or nonrenewal
of any material permit, license, authorization or approval applicable to the Company, its business or operations or any of its assets
or properties.
2.8 Governmental
Consents. All consents, approvals, orders, or authorizations of, or registrations, qualifications, designations, declarations, or
filings with, any governmental authority, required on the part of the Company in connection with the valid execution and delivery of this
Agreement, the offer, sale or issuance of the Note or the consummation of any other transaction contemplated
hereby shall have been obtained and will be effective at such time as required by such governmental authority, except for filings pursuant
to applicable state and federal securities laws, which have been made or will be made in a timely manner.
2.9 Compliance
with Laws. The operations of the Company have been conducted in material compliance with all applicable laws, including, without limitation,
all applicable laws promulgated by any governmental authority of competent jurisdiction. The Company has not received written notice of
any violation (or of any investigation, inspection, audit, or other proceeding by any governmental authority involving allegations of
any material violation) of any applicable law, and to the knowledge of the Company, no investigation, inspection, audit, or other proceeding
by any governmental authority involving allegations of any violation of any applicable law has been threatened.
2.10 Litigation.
Except as set forth on Schedule 2.10, (A) there is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation
pending or to the Company’s knowledge, currently threatened (i) against the Company or any officer or director of the Company, or
(ii) to the Company’s knowledge, that questions the validity of this Agreement, the Note, or the Loan Documents or the right of
the Company to enter into them, or to consummate the transactions contemplated by this Agreement, the Note, or the Loan Documents, or
(iii) to the Company’s knowledge, that would reasonably be expected to have, either individually or in the aggregate, a material
adverse effect on the Company; (B) neither the Company nor, to the Company’s knowledge, any of its officers or directors is a party
or is named as subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality
(in the case of officers or directors, such as would affect the Company); and (C) there is no action, suit, proceeding or investigation
by the Company pending or which the Company intends to initiate. The foregoing includes, without limitation, actions, suits, proceedings
or investigations pending or threatened in writing (or any basis therefor known to the Company) involving the prior employment of any
of the Company’s employees, their services provided in connection with the Company’s business, any information or techniques
allegedly proprietary to any of their former employers or their obligations under any agreements with prior employers.
2.11 Intellectual
Property. Except as set forth on Schedule 2.11, (i) the Company (A) solely and exclusively owns, free and clear of all liens
or encumbrances, all right, title and interest in and to any and all trademarks, service marks, domain names, inventions, know how, patents,
copyrights, works of authorship, trade secrets, confidential information, software, and other intellectual property (collectively, “Intellectual
Property”) that the Company purports to own (collectively, “Owned IP”) and (A) owns or has a valid license
to use, sell, or license, as the case may be, all other Intellectual Property and information technology rights, systems, and assets (collectively,
“IT Systems”) used in or necessary to conduct its business as currently conducted and proposed to be conducted and
none of the foregoing will be adversely impacted by the execution or delivery of this Agreement or the consummation of the transactions
contemplated hereby; (ii) the Company and the conduct of the Company’s business (including its products and services) did not and
do not infringe, misappropriate, or otherwise violate the Intellectual Property rights of any third party nor constitute unfair competition
or trade practices and the Company has not received any written notices (including offers to license) and there are no claims, actions
or proceedings pending (or to the knowledge of the Company, threatened), in each case, alleging any of the foregoing or contesting the
ownership, use, validity, or enforceability of any Owned IP; (iv) to the knowledge of the Company, no third party has infringed, misappropriated
or otherwise violated any Owned IP; (v) the Company takes reasonable steps to maintain, police and protect all Owned IP and the confidentiality
of all of its IT Systems and its confidential information and trade secrets, all of which have been maintained in confidence and have
not been disclosed other than pursuant to written non-disclosure and confidentiality agreements; and (iv) all source code for any proprietary
Company software is in the Company’s sole possession and maintained as strictly confidential.
3.
Representations and Warranties of the Purchaser.
The Purchaser hereby represents
and warrants to, and agrees with, the Company that the following is true and complete as of the Effective Date and the Closing Date:
3.1 Purchase for Own
Account. The Purchaser understands that the Note has not been registered under the Securities Act on the basis that no
distribution or public offering of the stock of the Company is to be effected. The Purchaser realizes that the basis for the
exemption may not be present if, notwithstanding its representations, the Purchaser has a present intention of acquiring the
Securities for a fixed or determinable period in the future, selling (in connection with a distribution or otherwise), granting any
participation in, or otherwise distributing the Securities. The Purchaser represents that it is acquiring the Securities solely for
its own account and beneficial interest for investment and not for sale or with a view to distribution of the Securities or any part
thereof, has no present intention of selling (in connection with a distribution or otherwise), granting any participation in, or
otherwise distributing the same, and does not presently have reason to anticipate a change in such intention.
3.2 Information
and Sophistication. Without lessening or obviating the representations and warranties of the Company set forth in Section 2,
the Purchaser hereby: (i) acknowledges that it has received all the information it has requested from the Company and it considers necessary
or appropriate for deciding whether to acquire the Note, (ii) represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of the offering of the Note and to obtain any additional information
necessary to verify the accuracy of the information given to the Purchaser and (iii) further represents that it has such knowledge and
experience in financial and business matters that it is capable of evaluating the merits and risk of this investment.
3.3 Ability
to Bear Economic Risk. The Purchaser acknowledges that investment in the Note involves a high degree of risk, and represents
that it is able, without materially impairing its financial condition, to hold the Note for an indefinite period of time and to
suffer a complete loss of its investment.
3.4 Accredited
Investor Status. The Purchaser is an “Accredited Investor” as such term is defined in Rule 501 under the Securities Act.
4.
Events of Default; Remedies.
4.1 Events
of Default. Each of the following shall constitute an event of default (each, an “Event of Default”) under this
Agreement and the other Loan Documents:
(a) The
Company shall fail to pay (i) when due any principal or interest payment on the due date hereunder or (ii) any other payment
required under the terms of the Note or any other Loan Documents on the date due and such payment shall not have been made within five
(5) days of the Company’s receipt of the Purchaser’s written notice to the Company of such failure to pay;
(b) Any
representation or warranty made by the Company in any of the Loan Documents shall prove, when given, to be false or misleading in any
material respect;
(c) The
Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained in the Loan Documents (other
than those specified in Section 4.1(a)) and (i) such failure shall continue for 15 days, or (ii) if such failure
is not curable within such 15-day period, but is reasonably capable of cure within 30 days, either (A) such failure shall continue
for 30 days or (B) the Company shall not have commenced a cure in a manner reasonably satisfactory to the Purchaser within the initial
15-day period;
(d) The
Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for
the relief of, or relating to, debtors, now or hereafter in effect, or makes any general assignment for the benefit of creditors or takes
any corporate action in furtherance of any of the foregoing;
(e) An
involuntary petition is filed against the Company (unless such petition is dismissed or discharged within thirty (30) days) under any
bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar
official) is appointed to take possession, custody or control of any property of the Company; or
(f) The
Company’s stockholders or Board of Directors affirmatively vote to liquidate, dissolve, or wind up the Company or the Company otherwise
ceases to carry on its ongoing business operations.
4.2 Remedies.
Upon the occurrence of any Event of Default and while it is continuing, all unpaid principal on the Note, accrued and unpaid interest
thereon and all other amounts owing under any of the Loan Documents shall, at the option of the Purchaser, and, upon the occurrence of
any Event of Default pursuant to Section 4.1(d), (e) or (f) above, automatically, be immediately due, payable and collectible by
the Purchaser pursuant to applicable law. In the event of any Event of Default, the Company shall pay all reasonable attorneys’
fees and costs incurred by the Purchaser in enforcing its rights under the Note and the other Loan Documents and collecting any amounts
due and payable under the Note. No right or remedy conferred upon or reserved to the Purchaser under this Agreement is intended to be
exclusive of any other right or remedy, and every right and remedy shall be cumulative and in addition to every other right and remedy
given hereunder or now and hereafter existing under applicable law.
5.
Conditions to Closing.
5.1 Conditions
to Purchasers’ Obligations at the Closing. The obligations of the Purchaser under the Loan Documents are subject to the fulfillment
on or before each Closing of each of the following conditions, which may be waived in writing by the Purchaser:
(a) Representations
and Warranties. The representations and warranties of the Company contained in Section 2 shall be true in all material respects
on and as of each Closing with the same effect as though such representations and warranties had been made on and as of the date of the
Closing.
(b) Performance.
The Company shall have performed and complied in all material respects with all agreements, obligations, and conditions contained in the
Loan Documents that are required to be performed or complied with by it on or before the Closing.
(c) Qualifications.
All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the Note shall be duly obtained and effective
as of the Closing.
(d) Proceedings
and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to the Purchaser’s counsel, which shall have received all
such counterpart original and certified copies of such documents as it may reasonably request.
(e) Loan
Documents. The Company shall have duly executed and delivered to the Purchaser the following documents:
(i) This
Agreement; and
(ii) The
Note issued hereunder.
5.2 Conditions
to Obligations of the Company. The obligations of the Company under the Loan Documents are subject to the fulfillment on or before
the Closing of each of the following conditions, which may be waived in writing by the Company:
(a) Representations
and Warranties. The representations and warranties made by the Purchaser in Section 3 shall be true on and as of the Closing
with the same effect as though such representations and warranties had been made on and as of the date of the Closing.
(b) Qualifications.
All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the Note shall be duly obtained and effective
as of the Closing.
(c) Purchase
Price. The Purchaser shall have delivered to the Company the Loan Amount (as set forth on Exhibit A attached hereto) in respect
of the Note.
6.
Miscellaneous.
6.1 Binding
Agreement. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties. Nothing in this Agreement, expressed or implied, is intended to confer upon any third party any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
6.2 Governing
Law. The terms of this Agreement shall be construed in accordance with the laws of the State of Delaware, as applied to contracts
entered into by Delaware residents within the State of Delaware, and to be performed entirely within the State of Delaware.
6.3 Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
6.4 Titles
and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing
or interpreting this Agreement.
6.5 Notices.
All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid,
(c) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification
of receipt or (d) when transmitted by facsimile or electronic mail and receipt is acknowledged during normal business hours, and if not,
the next business day after transmission.
6.6 Amendment;
Modification; Waiver. No amendment, modification or waiver of any provision of this Agreement or consent to departure therefrom shall
be effective unless in writing and approved by the Company and the Purchaser. Any amendment or waiver effected in accordance with this
Section 6.6 shall be binding upon the Purchaser and/or holder of any Note at the time outstanding, each future holder of such securities,
and the Company.
6.7 Severability.
If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance
with its terms.
6.8 Entire
Agreement. This Agreement, the Exhibits hereto, and the Loan Documents constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein and therein.
6.9 Finder’s
Fee. The Purchaser shall not be obligated for any finder’s fee in connection with this transaction.
6.10 Expenses.
The Company and the Purchaser shall pay their own costs and expenses incurred with respect to the negotiation, execution, delivery and
performance of this Agreement.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the parties
hereto have executed this Note Purchase Agreement as of the day and year first written above.
| |
COMPANY: |
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PARTS ID, INC. |
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|
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By: |
/s/ John Pendleton |
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Name: |
John Pendleton |
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Title: |
Executive Vice President, Legal & Corporate Affairs |
| PURCHASER: |
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| SANJIV GOMES |
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| |
|
| /s/ Sanjiv Gomes |
|
SCHEDULE 2.3
PARTS iD, LLC, a Delaware limited liability company
SCHEDULE 2.10
The information described under
the heading “Legal Matters” in Note 7 to the Company’s Consolidated Financial Statements included in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on April 17 2023, is incorporated herein by
reference.
SCHEDULE 2.11
Pursuant to the terms of that
certain (i) the Security Agreement, by and among the Company and Lind Global Fund II LP (“Secured Party”), (ii) the Security
Agreement, by and between PARTS iD, LLC and the Secured Party, (iii) the Pledge Agreement, by and between the Company and the Secured
Party and (iv) the Trademark Security Agreement, by and between PARTS iD, LLC and the Secured Party, the Company has granted a senior
security interest in all of Company’s right, title, and interest in, to and under all of Company’s property (inclusive of
intellectual property), subject to certain exceptions as set forth in such agreements.
The junior secured convertible
promissory notes (the “March 2023 Notes”) issued by the Company to certain investors on March 6, 2023 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, subject to the
subordination provisions contained in the March 2023 Notes and those certain subordination agreements, dated as of July 14, 2023, entered
into between the Secured Party and the holders of March 2023 Notes and July 2023 Notes (as defined below) (the “Subordination Agreements”).
The junior secured convertible
promissory notes (the “July 2023 Notes”) issued by the Company to certain investors on July 13, 2023 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, subject to the
subordination provisions contained in the July 2023 Notes and the Subordination Agreements.
The junior secured convertible
promissory note (the “October 2023 Note”) issued by the Company to Lev Peker, the Chief Executive Officer and a director
of the Company, 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, subject to the subordination provisions contained in the October 2023 Note and the Subordination Agreement, as
amended.
That certain (i) Purchase and
Sale of Future Receivables Agreement, dated as of September 11, 2023, by and between the Company and Riverside Capital NY and (ii) Standard
Merchant Cash Advance Agreement, dated as of September 11, 2023, by and between the Company and WAVE ADVANCE INC, are secured by a junior
security interest in the future receivables and other related collateral under the Uniform Commercial Code in accounts and proceeds of
the Company, subordinated to the indebtedness incurred under that certain Securities Purchase Agreement, dated as of July 14, 2023, by
and between the Company and the Secured Party, as amended.
That certain Litigation Funding
Agreement, dated as of September 29, 2023, by and among the Company, PARTS iD, LLC and Pravati Investment Fund VI LP acting through Pravati
Capital, LLC, is secured by a first priority security interest in and to all the proceeds from 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).
EXHIBIT A
SCHEDULE OF PURCHASERS
| NAME | |
LOAN AMOUNT | |
| Sanjiv Gomes | |
$ | 1,000,000 | |
| Total | |
$ | 1,000,000 | |
EXHIBIT B
FORM OF UNSECURED
PROMISSORY NOTE
Exhibit
10.2
THIS PROMISSORY NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE. NO SALE OR
DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER THE ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO
OR AN APPLICABLE EXEMPTION THEREFROM.
UNSECURED
PROMISSORY NOTE
| $1,000,000 |
October 20, 2023 |
For
value received, PARTS iD, Inc., a Delaware corporation (“Company”), hereby promises to pay to the order of Sanjiv
Gomes (“Purchaser”), the principal sum of One Million Dollars ($1,000,000) with interest accruing on the outstanding
principal amount of this unsecured promissory note (this “Note”) at the rate of seven and three-fourths percent (7.75%)
per annum, compounded semi-annually, computed on the actual number of days elapsed based on a 365-day year. Interest shall commence with
the date hereof and shall continue accruing on the outstanding principal until paid in full. All payments on this Note shall be made
by wire transfer of immediately available funds or as otherwise determined by the Company to such account as the Purchaser may from time
to time designate by written notice in accordance with the provisions of this Note.
1. Payment;
Maturity.
1.1 This
Note is an unsecured promissory note (the “Note”) issued pursuant to the terms of that certain Note Purchase Agreement,
dated as of October 20, 2023, by and among the Company and the Purchaser, as the same may be amended from time to time (the “Purchase
Agreement”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them
in the Purchase Agreement or other Loan Documents (as defined in the Purchase Agreement).
1.2 All
payments of interest and principal in cash shall be in lawful money of the United States of America. All payments shall be applied first
to unpaid accrued interest, and thereafter to principal of this Note. If any payments on this Note become due on a Saturday, Sunday or
a public holiday under the laws of the State of Delaware, such payment shall be made on the next succeeding business day and such extension
of time shall be included in computing interest in connection with such payment. Upon an Event of Default, all amounts of outstanding
principal and accrued but unpaid interest of this Note shall be payable in accordance with Section 7 below. If not repaid in full,
the outstanding principal and the accrued but unpaid interest of this Note (the “Note Amount”) shall become fully
due and payable upon October 20, 2024 (such date, the “Maturity Date”).
2. Unsecured
Obligation. This Note is a general unsecured obligation of the Company, and such obligation is not guaranteed by any Person. As used
in this Note, “Person” means any natural person, corporation, limited liability company, trust, joint venture, association,
company, partnership, governmental authority or other entity. The indebtedness evidenced by this Note, and the Company’s obligations
to Purchaser hereunder, are hereby expressly subordinated, to the extent and in the manner hereinafter set forth, in right of payment
to the prior payment in full of all of the (i) Senior Debt and (ii) Litigation Funding (each as defined below).
3. Subordination.
The indebtedness represented by this Note is hereby expressly subordinated in right of payment to the prior payment in full of all of
the indebtedness owed by the Company to Lind Global Fund II LP pursuant to that certain Securities Purchase Agreement, dated as of July
14, 2023, as amended (the “Senior Debt”).
4. Subordination
to Litigation Funding Sources. Notwithstanding Section 3 above, for the avoidance of doubt, the indebtedness represented by
this Note is expressly subordinated in right of payment to the prior payment in full of all of the litigation funding provided by Pravati
Capital, LLC to the Company pursuant to that certain Litigation Funding Agreement, dated as of September 29, 2023 (the “Litigation
Funding”).
5. Postpetition
Financing. For the avoidance of doubt, the Company and the Purchaser intend for this Note to be an emergency loan advance to bridge
the Company to a possible debtor-in-possession financing facility and for this advance to be included as part of that facility; however,
if the Court in any Insolvency Proceeding does not approve the inclusion of the amounts under this Note in a debtor-in-possession financing
facility, then the Company shall use reasonable best efforts as permitted under applicable laws and regulations to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary, proper, or advisable to cause this Note (and the obligations
arising thereunder) to constitute, as adequate protection or otherwise, an allowed administrative expense claim in any future Insolvency
Proceeding of the Company, having priority over any and all administrative expenses, diminution claims and all other priority claims
against the Company now existing or hereafter arising, of any kind whatsoever (subject to customary exceptions).
6. Incorporation
of Terms. The representations and warranties and rights and obligations of transfer and assignment of Purchaser that are set forth
in Section 3 of the Purchase Agreement are hereby made a part of this Note and incorporated herein by this reference.
7. Default;
Remedies. The occurrence of any Event of Default described in Section 4 of the Purchase Agreement shall be an Event of Default
hereunder and the remedies described in Section 4 of the Purchase Agreement shall be the remedies available hereunder.
8. No
Impairment. Subject to the terms and conditions hereof, the obligation of the Company to pay to the Purchaser the principal hereof
and interest hereon as and when the same become due and payable shall remain unimpaired, and nothing shall prevent the holder of this
Note, upon default hereunder, from exercising all rights, powers and remedies otherwise provided herein or by applicable law.
9. Waiver;
Payment of Fees and Expenses. Company waives presentment and demand for payment, notice of dishonor, protest and notice of protest
of this Note, and shall pay all costs of collection when incurred, including, without limitation, reasonable attorneys’ fees, costs
and other expenses. The right to plead any and all statutes of limitations as a defense to any demands hereunder is hereby waived to
the full extent permitted by law. No delay by Purchaser shall constitute a waiver, election or acquiescence by it.
10. Cumulative
Remedies. Purchaser’s rights and remedies under this Note and the other Loan Documents shall be cumulative. Purchaser shall
have all other rights and remedies not inconsistent herewith as provided under the Uniform Commercial Code, by law or in equity. No exercise
by Purchaser of one right or remedy shall be deemed an election, and no waiver by Purchaser of any Event of Default shall be deemed a
continuing waiver of such Event of Default or the waiver of any other Event of Default.
11. Miscellaneous
11.1 Governing
Law. The terms of this Note shall be construed in accordance with the laws of the State of Delaware, as applied to contracts entered
into by Delaware residents within the State of Delaware, and to be performed entirely within the State of Delaware.
11.2 Successors
and Assigns; Assignment. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties. The Company may not assign this Note or delegate any of its obligations hereunder without the written consent
of the Purchaser. Provided there is no occurrence of an Event of Default (or such Event of Default has been remedied pursuant to the
terms of the Purchase Agreement), the Purchaser may not assign this Note and its rights hereunder without the prior written consent of
the Company; provided, however, the Purchaser may assign, without prior written consent of, but with prior written notice to, the Company,
this Note and its rights hereunder to any affiliates of the Purchaser.
11.3 Titles
and Subtitles. The titles and subtitles used in this Note are used for convenience only and are not to be considered in construing
or interpreting the Note.
11.4 Notices.
All notices required or permitted hereunder shall be in writing and shall be given in the manner and to the addresses set forth in the
Purchase Agreement.
11.5 Amendment;
Modification; Waiver. No term of this Note may be amended, modified or waived without the written consent of the Company and Purchaser;
provided, however, that no such amendment, waiver or consent shall: (i) reduce the principal amount of this Note without
Purchaser’s written consent, or (ii) reduce the rate of interest of this Note without Purchaser’s written consent. Any amendment
or waiver effected in accordance with this Section 11.5 shall be binding upon the Company, the Purchaser, and each transferee,
if any, of the Note.
11.6 Usury.
In the event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion of the
interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against
the principal of this Note.
11.7 Counterparts;
Electronic Signature. This Note may be executed in two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Note may be executed and delivered via facsimile, electronic mail (including
pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method
and any signature page so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
11.8 Lost
Documents. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Note or any note exchanged for it, and an indemnity agreement reasonably satisfactory to the Company (in case of loss, theft or
destruction) or surrender and cancellation of such note (in the case of mutilation), the Company, at its own expense, will make and deliver
in lieu of such note a new note of like tenor and unpaid principal amount and dated as of the date to which interest has been paid on
the unpaid principal amount of the note in lieu of which such new note is made and delivered.
11.9 Invalidity.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision
is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. In such
an event, the parties will in good faith attempt to effect the business agreement represented by such invalidated term to the fullest
extent permitted by law.
11.10 Indemnification.
The Company shall pay, indemnify, defend, and hold the Purchaser harmless (to the fullest extent permitted by law) from and against
any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and actual damages, and
all out-of-pocket fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred in
connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of
whether suit is brought), at any time asserted against, imposed upon, or incurred by the Purchaser in connection with or as a result
of or related to the execution and delivery, enforcement, performance, or administration (including any restructuring or workout with
respect hereto) of this Agreement.
[SIGNATURE
PAGE TO FOLLOW]
IN
WITNESS WHEREOF, the parties hereto have executed this Unsecured Promissory Note as of the day and year first written above.
| |
PARTS ID, INC. |
| |
|
|
| |
By: |
/s/ John Pendleton |
| |
Name: |
John Pendleton |
| |
Title: |
Executive Vice President, Legal & Corporate Affairs |
| AGREED TO AND ACCEPTED: |
|
| |
|
| SANJIV GOMES |
|
| |
|
| /s/ Sanjiv Gomes |
|
Parts iD, Inc.
Unsecured Promissory Note
- Signature Page -
v3.23.3
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