Material Agreement - Form 8-K

On December 15, 2023, HPI Holdings LLC, a Delaware limited liability company ("Seller"), and HPI Holdco LLC, a Delaware limited liability company ("HPI Holdco"), which are directly or indirectly majority owned by GPB Holdings II, LP, a Delaware limited partnership (the "Partnership"), entered into a Membership Interest Purchase Agreement (the "Purchase Agreement") with Lotus HPI Buyer, Inc., a Delaware corporation (the "Purchaser").

Pursuant to the Purchase Agreement, Seller has agreed to sell all of the issued and outstanding equity interests of HPI Holdco to Purchaser (the "Transaction"). Seller expects to receive an aggregate purchase price of $190 million in cash, subject to certain customary adjustments described in the Purchase Agreement (the "Purchase Price"). At the closing of the Transaction, approximately $13.4 million of the Purchase Price will be deposited by Seller into escrow as a contingent reserve to be used, if necessary, to satisfy any potential contingent earn-out payments arising out of a previously completed transaction, with the remainder thereof (after the determination of any such continent payments) to be released to Seller.

The Purchase Agreement contains customary representations and warranties made by each of the parties, however the Purchaser's sole recourse for breaches of representations and warranties with respect to the Seller or HPI Holdco or its subsidiaries is against a buy-side representations and warranties insurance policy to be obtained by the Purchaser. The closing of the Transaction is subject to various closing conditions, such as receipt of approval or expiration of the waiting period required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and, in the event that the independent monitorship over GPB Capital Holdings, LLC, the general partner of the Partnership, is converted to a receivership prior to the closing of the Transaction, the approval of the court-appointed receiver overseeing GPB Capital Holdings, LLC and the approval of the United States District Court for the Eastern District of New York. The closing of the Transaction is not conditioned upon the Purchaser's ability to obtain financing. The Purchase Agreement also contains certain termination rights of the Purchaser and the Seller.

The Transaction will close no later than the 120th day after the date of the signing of the Purchase Agreement, provided that the closing conditions are satisfied or waived.

The foregoing description of the Purchase Agreement is a summary and is qualified in its entirety by reference to the Purchase Agreement, a copy of which will be filed upon the closing of the Transaction.

TripleTree, LLC acted as financial advisor and McGuireWoods LLP acted as legal advisor to Seller, and Ropes & Gray LLP acted as legal adviser to Purchaser in connection with the Transaction.