# EDGAR Filing Document

**Accession Number:** 0001578742
**File Stem:** 0001410578-23-000376
**Filing Date:** 2023-3
**Character Count:** 588648
**Document Hash:** f3a090a7be24adbabf1f486d07eb7c28
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001410578-23-000376.hdr.sgml**: 20230328

**ACCESSION NUMBER**: 0001410578-23-000376

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 92

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230328

**DATE AS OF CHANGE**: 20230328

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** GPB Automotive Portfolio, LP
- **CENTRAL INDEX KEY:** 0001578742
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-AUTO DEALERS & GASOLINE STATIONS [5500]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-56285
- **FILM NUMBER:** 23770795

**BUSINESS ADDRESS:**
- **STREET 1:** 159 NORTHERN BLVD
- **CITY:** GREAT NECK
- **STATE:** NY
- **ZIP:** 11021
- **BUSINESS PHONE:** 877-489-8484

**MAIL ADDRESS:**
- **STREET 1:** 159 NORTHERN BLVD
- **CITY:** GREAT NECK
- **STATE:** NY
- **ZIP:** 11021

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**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-K**

**☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended December 31, 2022**

**OR**

**☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from _________ to _________**

**Commission File Number: 000-56285**

**GPB Automotive Portfolio, LP**

**(Exact name of registrant as specified in its charter)**

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| | |
|:---|:---|
| &nbsp;&nbsp;**Delaware(State or other jurisdiction ofincorporation or organization)** | &nbsp;&nbsp;**35-2484347(I.R.S. EmployerIdentification No.)** |
| &nbsp;&nbsp;<br>**c/o Highline Management, Inc.**<br>**33 East 33**<sup>rd</sup> **Street, Suite 807New York, NY 10016(Address of principal executive offices)** | &nbsp;&nbsp;<br>**c/o Highline Management, Inc.**<br>**33 East 33**<sup>rd</sup> **Street, Suite 807New York, NY 10016(Address of principal executive offices)** |

---

**Registrant's telephone number, including area code (877) 489-8484**

**Securities registered pursuant to Section 12(b) of the Act: None**

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

**Class A and A-1 Limited Partnership Units**

(Title of class)

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑Yes ☐No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑Yes ☐No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☑ | Smaller reporting company | ☐ |
|  |  | 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.

Indicate by check mark whether the Registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐Yes ☑No

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐Yes ☑No

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). ☐Yes ☑No

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐Yes ☑No

There is no established public market for the registrant's shares of Limited Partnership Units.

As of December 31, 2022, there were 7,884 Class A Limited Partnership Units and 3,543 Class A-1 Limited Partnership Units outstanding.

Documents Incorporated By Reference: None.

Exhibit Index is located on page 59 of this filing.

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**GPB AUTOMOTIVE PORTFOLIO, LP AND SUBSIDIARIES**

**Table of Contents**

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| | | |
|:---|:---|:---|
| **Item Number** | **Item** | **Page** |
|  | [**Part I**](#PARTI_610012) | 2 |
| [**Item 1.**](#Item1Business_114188) | [**Business**](#Item1Business_114188) | 3 |
| [**Item 1A.**](#Item1ARiskFactors_671821) | [**Risk Factors**](#Item1ARiskFactors_671821) | 12 |
| [**Item 1B.**](#Item1BUnresolvedStaffComments) | [**Unresolved Staff Comments**](#Item1BUnresolvedStaffComments) | 18 |
| [**Item 2.**](#Item2Properties_564488) | [**Properties**](#Item2Properties_564488) | 18 |
| [**Item 3.**](#Item3LegalProceedings_117794) | [**Legal Proceedings**](#Item3LegalProceedings_117794) | 19 |
| [**Item 4.**](#Item4MineSafetyDisclosures_880346) | [**Mine Safety Disclosures**](#Item4MineSafetyDisclosures_880346) | 27 |
|  | [**Part II**](#PARTII_442820) |  |
| [**Item 5.**](#Item5MarketForRegistrantsCommonEquityRel) | [**Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities**](#Item5MarketForRegistrantsCommonEquityRel) | 28 |
| [**Item 6.**](#Item6Reserved_174856) | [**Reserved**](#Reserved) | 29 |
| [**Item 7.**](#Item7ManagementsDiscussionandAnalysisofF) | [**Management's Discussion and Analysis of Financial Condition and Results of Operations**](#Item7ManagementsDiscussionandAnalysisofF) | 29 |
| [**Item 7A.**](#Item7AQuantitativeandQualitativeDisclosu) | [**Quantitative and Qualitative Disclosures About Market Risk**](#Item7AQuantitativeandQualitativeDisclosu) | 37 |
| [**Item 8.**](#Item8FinancialStatementsandSupplementary) | [**Financial Statements and Supplementary Data**](#Item8FinancialStatementsandSupplementary) | 37 |
| [**Item 9.**](#Item9ChangesinandDisagreementsWithAccoun) | [**Changes In and Disagreements With Accountants on Accounting and Financial Disclosure**](#Item9ChangesinandDisagreementsWithAccoun) | 37 |
| [**Item 9A.**](#Item9AControlsandProcedures_35536) | [**Controls and Procedures**](#Item9AControlsandProcedures_35536) | 37 |
| [**Item 9B.**](#Item9BOtherInformation_211365) | [**Other Information**](#Item9BOtherInformation_211365) | 38 |
| [**Item 9C.**](#Item9CDisclosureRegardingForeignJurisdic) | [**Disclosure Regarding Foreign Jurisdiction that Prevent Inspections**](#Item9CDisclosureRegardingForeignJurisdic) | 38 |
|  | [**Part III**](#PARTIII_220673) |  |
| [**Item 10.**](#Item10DirectorsandExecutiveOfficers_8124) | [**Directors, Executive Officers and Corporate Governance**](#Item10DirectorsandExecutiveOfficers_8124) | 39 |
| [**Item 11.**](#Item11ExecutiveCompensation_103914) | [**Executive Compensation**](#Item11ExecutiveCompensation_103914) | 47 |
| [**Item 12.**](#Item12SecurityOwnershipofCertainBenefici) | [**Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters**](#ManagementandRelatedUnitholderMatter) | 52 |
| [**Item 13.**](#Item13CertainRelationshipsandRelatedTran) | [**Certain Relationships and Related Transactions, and Director Independence**](#Item13CertainRelationshipsandRelatedTran) | 53 |
| [**Item 14.**](#Item14PrincipalAccountingFeesandServices) | [**Principal Accounting Fees and Services**](#Item14PrincipalAccountingFeesandServices) | 57 |
|  | [**Part IV**](#PARTIV_431052) |  |
| [**Item 15.**](#Item15ExhibitsandFinancialStatementsandS) | [**Financial Statements and Exhibits**](#Item15ExhibitsandFinancialStatementsandS) | 58 |
| **Item 16.** | **Form 10-K Summary** | **None** |
|  | [**Signature Page**](#SIGNATURES_103755) | 60 |

---

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**PART I**

**Cautionary Note Regarding Forward-Looking Statements** 

This Annual Report on Form 10-K for the year ended December 31, 2022 ("Form 10-K" or "Annual Report") contains statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Forward-looking statements are subject to a variety of risks, uncertainties and assumptions as described in more detail under Part I, Item 1A of this Annual Report. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected or expected. You should not put undue reliance on any forward-looking statements. The forward-looking statements in this Annual Report speak only as of the date hereof. Except as required by federal and state securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or any other reason.

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***Item 1. Business***

**Overview**

GPB Automotive Portfolio, LP (the "Partnership", "we", "us", "our" or the "Registrant") is a holding company which was organized as a Delaware limited partnership on May 27, 2013, and commenced operations on that date.

GPB Capital Holdings, LLC ("General Partner", "GPB Capital", "Capital Holdings", or "GPB"), a Delaware limited liability company and registered investment adviser, is the Partnership's General Partner pursuant to the terms of the Fifth Amended and Restated Agreement of Limited Partnership, dated April 27, 2018 (as the same may be amended from time to time, the "LPA"). Pursuant to the LPA, GPB conducts and manages our business. Robert Chmiel, GPB's Chief Executive Officer and Chief Financial Officer, currently serves as the sole manager of GPB under the term of GPB's limited liability company agreement. However, as further described below under "SEC Action, Monitorship and Related Matters - Highline Management, Inc.," GPB has entered into a management services agreement with GPB's wholly owned subsidiary, Highline Management, Inc. ("Highline"), pursuant to which Highline provides certain management services to GPB to assist GPB in fulfilling GPB's duties as the Partnership's General Partner.

Until the sale of substantially all of the Partnership's assets described below under "Liquidation Basis of Accounting - Sale of Substantially All of the Partnership's Assets," we owned and operated multiple retail automotive dealerships, including in most cases their related real estate, and sought to further develop their operations to increase cash flow and income from operations on behalf of the Limited Partners, as defined below.

We reported all of our businesses as a single segment for accounting purposes based on the financial information that was available and evaluated by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources and in assessing performance of the Partnership.

Prior to the sale of substantially all of our assets, our principal business was the retail sale of automobiles in the northeastern United States. We offered a diversified range of automotive products and services, including new vehicles, used vehicles, parts and service and automotive finance and insurance products, which included vehicle service and other protection products, as well as the arranging of financing for vehicle purchases through third party finance sources. We continue to own and operate one dealership in Manchester, New Hampshire, AMR Auto Holdings – SM, LLC d/b/a Prime Subaru Manchester ("Prime Subaru Manchester"), pending completion of the currently contracted sale of that dealership.

We originally planned to hold our existing dealerships for the long-term. However, in light of the legal matters facing the Partnership, we took advantage of market conditions to exit the business via the Group 1 Sale (as defined below).

**Liquidation Basis of Accounting**

***Sale of Substantially All of the Partnership's Assets***

On September 12, 2021, the Partnership and certain of its direct and indirect subsidiaries entered into a Purchase Agreement (the "Purchase Agreement") with Group 1 Automotive, Inc., a Delaware corporation ("Group 1"). Pursuant to the Purchase Agreement, the Partnership agreed to sell substantially all of the assets of the Partnership, including, but not limited to the Partnership's real property (including entities owning real property), vehicles, parts and accessories, goodwill, permits, intellectual property and substantially all contracts, that relate to their automotive dealership and collision center businesses, subject to obtaining the relevant manufacturer approvals, and excluding certain assets such as cash and certain receivables (the "Group 1 Sale"). The Purchase Agreement was approved by GPB (via Highline) and the Monitor (as defined below).

In November 2021, the Partnership obtained the necessary manufacturer approvals and completed the sale of substantially all of its assets, including real estate, three collision centers, and 27 of its 29 dealerships to Group 1. In December 2021, the Partnership obtained the necessary manufacturer approval and completed the sale of its 28th dealership and the related real estate to a third-party. The aggregate consideration for all of the 28 dealership purchases and real-estate was $824.9 million after taking into account the payoff of floorplan financing and mortgage debt outstanding at the time of the Group 1 Sale. The aggregate consideration is subject to customary

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post-close adjustments as defined in the Purchase Agreement. See "Footnote 5. Dispositions" in our Consolidated Financial Statements included in "Item 15. Financial Statements and Exhibits." for more information.

The 29th dealership, Prime Subaru Manchester, has not received approval for transfer from its Subaru distributor in New Hampshire, however, the closing consideration of $33.4 million was put in escrow by Group 1 and was released to the Partnership in April 2022. The Partnership continues to own and operate Prime Subaru Manchester while awaiting approval of the transfer. See "Item 3. Legal Proceedings" for more information on the Prime Subaru Manchester transaction.

The foregoing description of the Purchase Agreement is a summary only and is qualified in its entirety by reference to the complete text of the Purchase Agreement, which is filed as Exhibit 2.1 in "Item 15. Financial Statements and Exhibits."

The aggregate consideration of $824.9 million for the sale of 28 dealerships and real-estate includes $763.6 million received directly by GPB Prime and was therefore, restricted from distribution to the Partnership or any of its affiliates pursuant to the terms of the M&T Credit Agreement, as defined below. On December 28, 2021, the Partnership and GPB Prime Holdings, LLC ("GPB Prime"), an entity in which the Partnership Holds a 66.5% interest, reached an agreement in principle with M&T Bank Corporation ("M&T Bank") to allow for a $570.0 million distribution to the Partnership and GPB Holdings II, LP, of which $188.8 million was distributed to GPB Holdings II, LP, an affiliated entity to the Partnership which holds a 33.5% non-controlling interest in GPB Prime.

In January 2022, the Partnership and GPB Prime entered into a Twelfth Amendment (the "Amendment") to the M&T Credit Agreement. The Amendment, among other things, reaffirmed the agreement in principle which (i) allows for distribution to the Partnership and GPB Holdings II, LP of $570.0 million, representing a portion of the proceeds received from the Group 1 Sale; (ii) changes the definition of floor plan borrowers to mean Prime Subaru Manchester; (iii) decreases the credit limit that may be borrowed for vehicle floorplan financing from $360.0 million to up to $8.8 million; and (iv) replaces the benchmark interest rates for borrowings from the London Interbank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR) subject to certain adjustments in the Amendment. The M&T Credit Agreement was amended primarily to reflect that we own only one new vehicle dealership and no longer require the same amount of debt financing as was previously in place. Proceeds from the Group 1 Sale were used in part to repay all other amounts outstanding under the M&T Credit Agreement.

***Plan of Liquidation***

Concurrent with reaching an agreement in principle with M&T Bank on December 28, 2021, to allow for distributions to the Partnership and GPB Holdings II, LP, Highline, and on behalf of GPB, caused us to commence the a plan to liquidate the Partnership's remaining net assets and wind up the Partnership ("Plan of Liquidation"). Highline reached its decision to commence the Plan of Liquidation because of, among other things, the advanced stage of the Group 1 Sale, the agreement in principle with M&T Bank to allow for a $570.0 million distribution, and the fact that no further plans to deploy capital in any other investments are contemplated. In accordance with US GAAP, liquidation of the Partnership was thereby determined to be imminent, resulting in the need to adopt the liquidation basis of accounting as of December 28, 2021.

The Highline board of directors (the "Board") formally approved the commencement of the Plan of Liquidation at the Board meeting held on February 3, 2022. The Board concluded that it was appropriate to adopt liquidation accounting in accordance with US GAAP for financial reporting purposes, using a "convenience date" of December 31, 2021.

The Partnership cannot predict the timing or amount of any distributions to its limited partners (the "Limited Partners"), because uncertainties exist as to: (i) the ultimate amount of expenses associated with implementing its monetization strategy, liabilities, operating costs, and amounts to be set aside for claims; (ii) obligations and provisions during the liquidation and winding-up process; and (iii) the timing and outcome of the pending litigation, and the related timing to complete such transactions during the overall liquidation process. Nevertheless, it is expected that the liquidation will be complete by December 31, 2024. Please see "Item 1A. Risk Factors."

**SEC Action, Monitorship and Related Matters**

***Federal Matters***

On February 4, 2021, the Securities and Exchange Commission (the "SEC") filed a contested civil proceeding (the "SEC Action") against GPB, Ascendant Capital, LLC ("Ascendant"), Ascendant Alternative Strategies, LLC ("AAS"), David Gentile, Jeffry Schneider

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and Jeffrey Lash in the United States District Court for the Eastern District of New York (the "EDNY Court"). No GPB-managed partnership is a named defendant. The SEC Action alleges several violations of the federal securities laws, including securities fraud. The SEC is seeking disgorgement and civil monetary penalties, among other remedies.

Also, on February 4, 2021, the U.S. Attorney's Office for the Eastern District of New York (the "USAO") brought a criminal indictment against Mr. Gentile, Mr. Schneider, and Mr. Lash (the "Criminal Case"). The indictment in the Criminal Case alleges conspiracy to commit securities fraud, conspiracy to commit wire fraud, and securities fraud against all three individuals. Mr. Gentile and Mr. Lash were also charged with two counts of wire fraud. We understand that the USAO intends to seek criminal forfeiture. Mr. Gentile resigned from all management and board positions with GPB and Highline, and the GPB-managed funds, including the Partnership, and subsidiaries of the Partnership, promptly following his indictment.

***State Matters***

On May 27, 2020, the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth ("Massachusetts") filed an Administrative Complaint against GPB for alleged violations of the Massachusetts Uniform Securities Act. No GPB-managed fund is a named defendant. The complaint alleges, among other things, that the offering documents for several GPB-managed funds, including the Partnership, included material misstatements or omissions. Massachusetts is seeking both monetary and administrative relief, including disgorgement and rescission to Massachusetts residents who purchased the GPB-managed funds. This matter is currently stayed, pending resolution of the Criminal Case.

On February 4, 2021, seven State securities regulators (from Alabama, Georgia, Illinois, Missouri, New Jersey, New York, and South Carolina, collectively the "States") each filed suit against GPB. No GPB-managed fund is a named defendant in any of the suits brought by the States. Several of the suits also named Ascendant, AAS, Mr. Gentile, Mr. Schneider, and Mr. Lash as defendants. The States' lawsuits allege, among other things, that the offering documents for several GPB-managed funds, including the Partnership, included material misstatements and omissions. The States are seeking both monetary and administrative relief, including disgorgement and rescission. The cases brought by the States have been stayed pending the conclusion of the related Criminal Case. The State of New Jersey has voluntarily dismissed its case, without prejudice to re-file it following the conclusion of the Criminal Case.

***Appointment of Monitor and Application for Receivership***

On February 11, 2021, the EDNY Court in the SEC Action appointed Joseph T. Gardemal III as an independent monitor over GPB (the "Monitor") until further order of the Court (the "Order"). The Court appointed the Monitor in response to a request from the SEC, which asserted that the Monitor was necessary to protect investors in light of the alleged misconduct of GPB Capital's former CEO, David Gentile. In its February 4, 2021 complaint ("the Complaint") in the SEC Action, the SEC alleged that Mr. Gentile, as the owner and then-CEO of GPB Capital, along with Jeffry Schneider, the owner of Ascendant, GPB's placement agent, lied to investors about the source of money used to make 8% annualized distribution payments to investors. According to the SEC, Mr. Gentile and others allegedly told investors that the distribution payments were paid exclusively with monies generated by GPB portfolio companies, but as alleged, GPB actually used investor money to pay portions of the annualized 8% distributions. The Complaint further contains allegations that Mr. Gentile and others manipulated financial statements of certain limited partnership funds that GPB manages to perpetuate the deception by giving the false appearance that the funds' income was closer to generating sufficient income to cover the distribution payments than it actually was. Moreover, the Complaint alleges that Mr. Gentile engaged in undisclosed self-dealing, including by omitting from investor communications certain conflicts of interest and fees and other compensation that he received, totaling approximately $8.0 million.

In support of the Order, the SEC contended that the Monitor would provide assurances to investors, GPB's counterparties, and the public that an unbiased and qualified person who was not beholden to Mr. Gentile was vetting any significant transactions and decisions, and looking out for the interests of investors. Accordingly, pursuant to the Order, GPB shall (i) grant the Monitor access to all non-privileged books, records and account statements for the GPB-managed funds, including the Partnership, as well as their portfolio companies; and (ii) cooperate fully with requests by the Monitor reasonably calculated to fulfill the Monitor's duties. As noted below, the Order was amended on April 14, 2021 (the "Amended Order").

The Monitor is required to assess the Partnership's operations and business, and make recommendations to the EDNY Court, which may include continuation of GPB's operations subject to the Monitorship, a liquidation of assets, or filing for reorganization in bankruptcy. The Order provides that the Monitor will remain in place until terminated by order of the EDNY Court, and grants the

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Monitor the authority to approve or disapprove proposed material corporate transactions by GPB, the Partnership and its subsidiaries, extensions of credit by them outside the ordinary course of business, decisions to make distributions to the Limited Partners of the Partnership, or any decision to file any bankruptcy or receiver petition for any of them, among other actions. The Monitor is not required to approve the issuance of the Consolidated Financial Statements included within this Form 10-K, nor has management sought or obtained approval from the Monitor.

On April 14, 2021, the EDNY Court entered an Amended Order, providing that, in addition to the SEC and GPB, certain State regulators will receive access to the periodic reports filed by the Monitor pursuant to the Order.

On May 31, 2022, Mr. Gentile filed a motion in the SEC Action to modify the Amended Order pursuant to Rule 60(b) of the Federal Rules of Civil Procedure ("Rule 60(b) Motion"). In his Rule 60(b) Motion, Mr. Gentile seeks a court order to, among other things, (i) narrow the scope of the Monitor's responsibilities; and (ii) direct the Monitor to ensure that GPB does not sell or otherwise dispose of assets or portfolio companies that the Partnership owns before the completion of a "strategic assessment" to be conducted by three managers Mr. Gentile purportedly appointed to GPB on May 27, 2022. On that same day, May 31, 2022, the Monitor notified Mr. Gentile and GPB that Mr. Gentile's purported appointment of three new managers to GPB without Monitor approval was, amongst other things, in violation of the Amended Order. Mr. Gentile and GPB were, at that time, given ten (10) business days to cure the violation of the Amended Order. The cure period has expired without any steps having been taken to comply with the Monitor's notification of violation of the Amended Order.

On June 13, 2022, the SEC filed by Order to Show Cause in the SEC Action an application to (i) convert the existing Monitorship over GPB and the GPB-managed funds to a Receivership, and appoint the previously-appointed Monitor, Joseph T. Gardemal III, as Receiver; and (ii) impose a litigation injunction on cases filed against GPB and the GPB-managed funds (the "Receivership Application"). The Receivership Application and the Proposed Order Appointing Receiver and Imposing Litigation Injunction (the "Proposed Order") were filed with the EDNY Court with consent of GPB's management.

The Receivership Application seeks appointment of Mr. Gardemal as Receiver in order to, in part, streamline the process by which GPB and the GPB-managed funds liquidate remaining portfolio company assets and distribute money to Limited Partners, subject to the EDNY Court's supervision. The Proposed Order grants to Mr. Gardemal, generally, all powers and authorities previously possessed by the entities subject to the Proposed Order, as well as the powers possessed by the officers, directors, managers and others previously in charge of those entities, and permits him to, among other things, take all such actions necessary to preserve receivership assets.

Additionally, the Receivership Application includes a proposed stay of all Federal and State actions (as well as any arbitrations) presently pending against GPB and the GPB-managed funds, and provides for a centralized claims process for GPB Limited Partners, in the EDNY Court, to prevent potentially disparate actions in different courts that could negatively impact the assets proposed to be subject to the EDNY Court's jurisdiction and control.

The Rule 60(b) Motion and the validity of the appointment of the new managers are presently under consideration by the EDNY Court, along with the Receivership Application. Currently, there can be no assurance as to the outcome of the Rule 60(b) Motion or the Receivership Application.

The following discussion of the authority of various governing bodies related to GPB is qualified by reference to the Amended Monitor Order. See "Item 3. Legal Proceedings" for more information on the appointment of the Monitor.

***Highline Management, Inc.***

In January 2020, Highline was formed as a wholly owned subsidiary of GPB, to provide operational support services to the GPB-managed partnerships. Highline's formation followed the completion of an independent special investigation by outside legal counsel as a response to recommendations made by GPB's predecessor Audit Committee to certain allegations brought against the General Partner as described above and in "Item 3. Legal Proceedings." The predecessor Audit Committee made recommendations which led to a series of restructuring activities undertaken to accomplish a number of objectives including, but not limited to, the: (i) further enhancement of the corporate management structure, with additional professionals knowledgeable in the industry and commensurate with the complexity and demands of the business of the Partnership; (ii) formalization, to the extent possible, of the commitment to share human resources, facilities and operating assets among and between the entities that comprise the General Partner and the Partnership; and (iii) further development of the independent oversight of the corporate governance structure and framework to help

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enable the Partnership to achieve its goals, control risks and compliance with laws, rules and regulations which govern the management of the Partnership. To that end, the initial five member Board (now four members, see "Item 10. Directors, Executive Officers and Corporate Governance") was appointed, three of whom are "independent" as that term is used in the NYSE listed company manual. To address its oversight and governance purposes, the Board established three committees, consisting entirely of the independent members, including an Audit Committee, a Governance Committee and a Compensation Committee, as more fully described below. Additionally, these restructuring activities were designed and implemented, in part, to establish independent committees responsible for overseeing GPB's management related to the Partnership's affairs, establish additional layers of responsibility within the Partnership's governance structure and enhance internal controls.

As a key feature of this restructuring, Highline was formed to provide GPB with management and operation support services for the GPB-managed partnerships. Highline currently oversees, on GPB's behalf, all day-to-day functions of the Partnership and its subsidiaries, including management of all underlying assets, human capital, accounting and financial reporting, and operations pursuant to a Management Services Agreement ("MSA"). As a result, Highline provides independent oversight and review of most aspects of our operations.

Highline's bylaws require a majority vote for any act of the Board except with respect to approval or adoption of any MSA, Resource Sharing Agreement or other similar agreement between Highline and GPB (or any amendment thereto), which in all instances must be approved by a majority of the independent directors. GPB has nominated and elected the initial directors to the Board.

Highline has agreed to provide the following services ("Services") to the Partnership (but not to the dealerships owned by the Partnership, which are managed day-to-day by their own management teams) pursuant to the MSA:

● Manage and oversee the day-to-day affairs and operations of the Partnership including developing corporate strategy and business plans, and managing annual budgets;

● Manage, oversee and facilitate the accounting and payment functions, including necessary cash management services with respect to the operations of the Partnership;

● Manage and oversee the administration, operations, financial accounting and financial reporting for the Partnership, including managing the preparation of financial statements for the Partnership;

● Manage the process for the audits of the financial statements of the Partnership;

● Manage and oversee the process of obtaining third-party valuations of the Partnership in accordance with the LPA and the Class A and Class A-1 Private Placement Memorandum (the "PPM") dated July 2018;

● Communicate regularly and provide written reports (no less frequently than monthly) concerning the financial status and financial performance of the Partnership to GPB, including providing regular (no less frequent than monthly) asset management reports and updated financial models for the Partnership;

● Provide periodic market data and information (no less frequent than quarterly) relating to the businesses of the Partnership reasonably requested by GPB for investor marketing and communication purposes;

● Review and approve "Significant Transactions" approved by GPB's Acquisition Committee. A Significant Transaction shall mean (i) a transaction that meets the definition of a Significant Subsidiary contained in Regulation S-X under federal securities laws; or (ii) based on criteria otherwise determined by the Board;

● Review and approve any material change in the investment strategy of the Partnership; and

● Perform such other services as may be reasonably requested by GPB and which are reasonably acceptable to Highline.

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GPB, through its Acquisition Committee, controls all major asset acquisition and divestiture decisions concerning the Partnership, subject to the approval by the Board of any such transaction that constitutes a Significant Transaction as described above. Highline's responsibilities set forth above encompass reporting and monitoring distributions to our Limited Partners.

Highline provides certain services to GPB as set forth in the MSA dated January 1, 2020. The May 2020 Amendment to the MSA set forth that the MSA would be in effect for an initial three-year term, effective as of January 1, 2020 through December 31, 2022. The MSA was subsequently amended in August 2021, under which the initial term of the MSA was extended as a five-year term, through December 31, 2024.

Pursuant to the amended order of the EDNY Court on April 14, 2021, operational and financial decisions to be made by Highline regarding the affairs of the Partnership are subject to the same authority of the Monitor as are decisions to be made by GPB.

For further discussion of the relationship between GPB and Highline, see "Item 10. Directors, Executive Officers and Corporate Governance" elsewhere in this Annual Report.

**Our Business**

***Summary***

Prior to the Group 1 Sale, we were a leading operator of automotive franchises and a retailer of new and used vehicles and related products and services. According to Automotive News' Top 150 Dealership Groups dated April 5, 2021, we, together with dealerships owned by other entities managed by GPB, ranked in the top 25 dealership groups based both on number of dealerships and total revenue. Our dealerships, through both physical retail locations and online (primarily through their individual websites), offered 24 brands of new vehicles and a wide variety of brands of used vehicles. We aimed to offer the brands most desired by consumers in the markets that we served. Our dealerships sold new and used cars and replacement parts, provided vehicle maintenance, warranty, collision and mechanical repair services, arranged related financing for our customers and sold vehicle service contracts, vehicle protection products and credit insurance.

We operated domestic, import and luxury franchises in areas ranging from mid-sized markets to metropolitan markets within the northeastern United States. We evaluated all brands for expansion opportunities, provided the market was large enough to support adequate new vehicle sales to justify the required capital investment.

The following is a summary of our dealerships and franchises as of the dates indicated.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Number of Dealerships** | **Number of Dealerships** | **Number of Dealerships** | **Number of Franchises** | **Number of Franchises** | **Number of Franchises** |
|  | **December 31,**<br>**2022** | **December 31,** <br>**2021** | **December 31,**<br>**2020** | **December 31,**<br>**2022** | **December 31,**<br>**2021** | **December 31,**<br>**2020** |
| Massachusetts |  |  | 23 |  |  | 26 |
| New York |  |  | 2 |  |  | 3 |
| Maine |  |  | 6 |  |  | 11 |
| New Jersey |  |  | 2 |  |  | 5 |
| New Hampshire | 1 | 1 | 2 | 1 | 1 | 3 |
| Total | **1** | **1** | **35** | **1** | **1** | **48** |

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The dealerships in the table encompassed the following 24 brands: Buick, Subaru, Chrysler, Dodge, Jeep, Ram, GMC, Chevrolet, Ford, Volkswagen, Mazda, Cadillac, Acura, Audi, Honda, Mercedes, Porsche, Toyota, Volvo, Sprinter, Land Rover, Airstream, BMW and Mini.

As of December 31, 2022, our sole remaining dealership is Prime Subaru Manchester, which we have agreed to sell to Group 1, and whose assets are classified as held for sale on the Consolidated Statements of Net Assets presented in "Item 15. Financial Statements and Exhibits." Group 1 transferred the $33.4 million purchase price into an escrow account, which was released to the Partnership in April 2022. The Partnership continues to own and operate Prime Subaru Manchester while awaiting approval of the transfer.

***Industry Overview***

The automotive retail business is highly competitive. With approximately 16,700 franchised automobile dealerships as of June 1, 2022 (according to The National Automobile Dealers Association) and approximately $618.0 billion in total vehicle sales in 2022, the franchised automobile dealer industry is the largest retail business segment in the U.S. We competed primarily with other automotive vehicle and parts and service retailers, both public and private, including non-franchised operations and online businesses.

***Competition***

We believe that the principal competitive factors in the automotive retail business are location, service, price, selection, and online and mobile offerings. There are a large number of well-capitalized competitors in the northeastern United States that have extensive automotive retail managerial experience and strong retail locations and facilities. In addition, we estimate that there are approximately twice as many independent used vehicle dealers in the United States as there are franchised new vehicle dealers. Our new vehicle dealership competitors had franchise agreements with various vehicle manufacturers and, as such, generally had access to new vehicles at the same prices and on the same terms as other dealers franchised by the same manufacturers.

We also competed with independent automobile service shops and service center chains. We believed that the principal competitive factors in the parts and service segment of our business were the ability to provide parts and service covered by manufacturer warranties and recall programs, our price, location, expertise with the particular vehicle lines, and customer service. We believed that the principal competitive factors relative to these finance and insurance products were product selection, convenience, price, contract terms, and the ability to finance vehicle protection and aftermarket products and services.

***Franchise Agreements with Manufacturers***

Each of our dealerships operated under a separate agreement with the manufacturer of the new vehicle brand it sold (each, a "Franchise Agreement"). Typical automobile franchise agreements specify the locations within a designated market area where the dealership may sell vehicles and related products and perform approved services. The designation of such areas and the allocation of new vehicles among dealerships are at the discretion of the manufacturer. Under the terms of our Franchise Agreements, the automobile manufacturers designated specific marketing and sales areas where a dealer of a vehicle brand was able to be located and operate. Franchise Agreements also grant a dealership the right to use and display manufacturer's trademarks, service marks, and designs in the manner approved by each manufacturer.

Our Franchise Agreements and the framework agreements described below typically limited our ability to acquire multiple dealerships of a given brand within a particular geographic market area. Certain state franchise laws also restricted us from relocating our dealerships, or establishing new dealerships of a particular brand, within any area that is served by another dealer with the same brand. To the extent that a market has multiple dealers of a particular brand, as certain markets we operated in did, we were subject to significant intrabrand competition.

A Franchise Agreement may have imposed requirements on the dealership with respect to:

● Facilities and equipment;

● Inventories of vehicles and parts;

● Minimum working capital;

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● Training of personnel; and

● Performance standards for market share and customer satisfaction.

Each manufacturer closely monitors compliance with these requirements and required each dealership to submit monthly financial statements.

The typical Franchise Agreement provided for early termination or non-renewal by the manufacturer upon:

● A change of management or ownership without manufacturer consent;

● Insolvency or bankruptcy of the dealer;

● Death or incapacity of the dealer/manager unless the dealer/manager is replaced within a specified period of time with an individual satisfactory to the manufacturer;

● Conviction of a dealer/manager or owner of certain crimes;

● Misrepresentation of certain sales or inventory information by the dealership, dealer/manager or owner to the manufacturer;

● Failure to operate the dealership adequately in accordance with the Franchise Agreement;

● Failure to maintain any license, permit or authorization required for the conduct of business;

● Poor market share; or

● Low customer satisfaction index ("CSI") scores.

Further, the contractual terms of our dealerships' Franchise Agreements provided for various durations, ranging from one year to no expiration date, and in certain cases, manufacturers had undertaken to renew such franchises upon expiration so long as the store was in compliance with the terms of the agreement. Additionally, any contemplated dispositions of dealerships required the consent of the manufacturers prior to closing.

Our dealerships' Franchise Agreements provided for termination of the agreement by the manufacturer or non-renewal for a variety of causes (including performance deficiencies in such areas as sales volume, sales effectiveness, and customer satisfaction). There were instances where disagreements had arisen between certain manufacturers and our dealerships which resulted in confidential settlement agreements between the parties. All notices of termination issued to our dealerships were settled or resolved and we have no litigation pending with any manufacturers or distributors, aside from the matter relating to Prime Subaru Manchester disclosed in "Item 3. Legal Proceedings." In general, the states in which we operated had automotive dealership franchise laws that provided that, notwithstanding the terms of any Franchise Agreement, it is unlawful for a manufacturer to terminate or not renew a franchise unless "good cause" exists. It is generally difficult, outside of bankruptcy, for a manufacturer to terminate, or not renew, a franchise under these laws, which were designed to protect dealers. In addition, in our experience and historically in the automotive retail industry, dealership Franchise Agreements are rarely involuntarily terminated or not renewed by the manufacturer outside of bankruptcy or violation of criminal law. From time to time, certain manufacturers asserted sales and customer satisfaction performance deficiencies under the terms of our Franchise Agreements. We generally worked with these manufacturers to address the asserted performance issues.

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***Seasonality***

Within the automotive industry as a whole, sales are typically lower during the first quarter of each calendar year due to consumer purchasing patterns during the holiday season and inclement weather in certain markets. We believed our franchise diversification and cost controls would moderate this seasonality. However, if conditions occurred that weakened automotive sales, such as severe weather in the geographic areas in which our dealerships operated, war, high fuel costs, pandemics, depressed economic conditions including unemployment or weakened consumer confidence, or similar adverse conditions, our revenues for the year could have been adversely affected.

***Regulation***

**Automotive and Other Laws and Regulations**

Automotive retail is a highly regulated industry. A number of state and federal laws and regulations affected our dealership business, such as those relating to motor vehicle sales, retail installment sales, leasing, sales of finance, insurance, and vehicle protection products, licensing, consumer protection, consumer privacy, escheatment, anti-money laundering, environmental, vehicle emissions and fuel economy, health and safety, wage-hour, anti-discrimination, and other employment practices. In addition, in the states in which our dealerships operated, our dealerships were required to obtain various licenses in order to operate their businesses, including dealer, sales, finance, and insurance-related licenses issued by state authorities. Any failure to comply with laws and regulations may have resulted in the assessment of administrative, civil, or criminal penalties, the imposition of remedial obligations, such as extensive and expensive product recalls, or the issuance of injunctions limiting or prohibiting operations. In addition, many laws may have given customers a private cause of action. Claims arising out of actual or alleged violations of law may have been asserted against us, or our dealerships, by individuals, a class of individuals, or governmental entities. These claims may have exposed us to significant damages or other penalties, including revocation or suspension of our licenses to conduct dealership operations and fines.

Our financing activities with customers were subject to numerous federal, state, and local laws and regulations. In recent years, there has been an increase in activity related to oversight of consumer lending by the Consumer Financial Protection Bureau ("CFPB"), which has broad regulatory powers. The CFPB does not have direct authority over automotive dealers. However, its regulation of larger automotive finance companies and other financial institutions could have affected our financing activities.

The vehicles we sold were also subject to rules and regulations of various federal and state regulatory agencies.

**Environmental, Health, and Safety Laws and Regulations**

Dealerships are subject to a wide range of federal, state, and local environmental laws and regulations. As with automotive dealerships generally, and service, parts, and body shop operations in particular, the automotive dealership business involves the use, storage, handling, and contracting for recycling or disposal of hazardous substances or wastes and other environmentally-sensitive materials. Our operations involved the use, handling, storage, and contracting for recycling and/or disposal of materials such as motor oil and filters, transmission fluids, antifreeze, refrigerants, paints, thinners, batteries, cleaning products, lubricants, degreasing agents, tires, and fuel.

We incurred certain costs to comply with environmental, health, and safety laws and regulations in the ordinary course of our business. We do not currently expect to incur significant costs for remediation. However, no assurances can be given that material environmental commitments or contingencies already exist but are unknown to us.

**Human Capital Resources**

As of December 31, 2022, we employed approximately 66 persons on a full-time equivalent basis. Employee relations are considered to be good.

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Our employees are fairly compensated, without regard to gender, race, ethnicity, religion, age, disability, sexual orientation, or expression, and routinely recognized for outstanding performance. To ensure the health and well-being of our employees, we provide access to benefits and offer programs that support work-life balance and overall well-being including financial, physical and mental health resources. We endeavor to maintain workplaces that are free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression or any other status protected by applicable law. We conduct training to prevent harassment and discrimination and monitor employee conduct year-round. The Partnership believes a diverse workforce fosters innovation and cultivates an environment filled with unique perspectives. As a result, diversity and inclusion help the Partnership meet the needs of customers. We strive to maintain a culture that enables all employees to be treated with dignity and respect while devoting their best efforts to performing their jobs to the best of their respective abilities and operate in a supportive culture that incorporates highly ethical behavior. The Partnership measures employee engagement on an ongoing basis as it believes an engaged workforce leads to a more innovative, productive and profitable company. The results from engagement efforts are used to implement and enhance programs and processes designed to keep employees connected with the Partnership.

**Available Information**

Our SEC filings are available to the public from commercial document retrieval services and at the website maintained by the SEC at http://www.sec.gov.

We also make available through our web site at http://www.gpb-cap.com in the "Monitor Info & SEC Filings — SEC Filings" section, free of charge, all reports and amendments to those reports filed or furnished pursuant to Section 12(b) or (g) of The Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information contained on the website does not constitute part of this Annual Report. We have included our website address in this Annual Report solely as an inactive textual reference. Occasionally, we may use our web site as a channel of distribution of material Partnership and GPB information.

The foregoing information regarding our website and its content is for convenience only. The content of our website is not deemed to be incorporated by reference into this Annual Report nor should it be deemed to have been filed with the SEC.

***Item 1A. Risk Factors***

Our business, financial condition, results of operations, cash flows, and prospects, and the performance of our limited partnership interests, which we refer to as "Units", may be adversely affected by a number of factors. The risks, uncertainties, and other factors that our Limited Partners and prospective Limited Partnership Unitholders should consider include, but are not limited to, the following:

**RISKS RELATED TO CURRENT ECONOMIC AND MARKET CONDITIONS**

In general, capital markets may experience periods of disruption and instability and we cannot predict when these conditions will occur. Such market conditions could materially and adversely affect debt and equity capital markets in the United States and abroad, which could have a negative impact on our business, financial condition and results of operations.

***Adverse developments affecting financial institutions, companies in the financial services industry or the financial services industry generally, such as actual events or concerns involving liquidity, defaults or non-performance, could adversely affect our business, financial condition, results of operations and liquidity.***

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds, have in the past and may in the future lead to market-wide liquidity problems. On March 12, 2023, Signature Bank, the Partnerships primary banking relationship, was closed by the New York State Department of Financial Services, which appointed the Federal Deposit Insurance Corporation, or the FDIC, as Signature Bank's receiver. Subsequent to March 12, 2023, GPB began the process of reducing the Partnership's exposure to Signature Bank. As of the date of this filing, the Partnership's exposure to Signature Bank is considered by management to not be material to the Partnership.

Although a statement by the U.S. Department of the Treasury, the Federal Reserve and the FDIC stated that all depositors of Signature Bank would have access to all of their money after only one business day following the date of closure and we and other depositors with

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Signature Bank received such access on March 13, 2023, uncertainty and liquidity concerns in the broader financial services industry remain. On March 19, 2023 Signature Bank's assets were acquired by Flagstar Bank, N.A. Nonetheless, GPB is exploring other banking relationships with larger banking institutions. Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates. The U.S. Department of Treasury, FDIC and Federal Reserve Board have announced a program to provide up to $25 billion of loans to financial institutions secured by such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments. However, widespread demands for customer withdrawals or other needs of financial institutions for immediate liquidity may exceed the capacity of such program. There is no guarantee that the U.S. Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions in a timely fashion or at all.

Our access to our cash and cash equivalents in amounts adequate to finance our plan of liquidation could be significantly impaired by the financial institutions with which we have arrangements. Any material decline in our ability to access our cash and cash equivalents could adversely impact our ability to meet certain steps in our plan of liquidation, pay distributions, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws, among other things, any of which could have material adverse impacts on the amount of total net assets in liquidation.

**RISKS RELATED TO THE PARTNERSHIP AND PLAN OF LIQUIDATION**

***We may not be able to pay liquidating distributions to our limited partners at the times and in the amounts expected.***

We cannot predict the timing or amount of any liquidating distributions, as uncertainties exist as to the ultimate amount of our expenses associated with completing our monetization strategy, our liabilities, our operating costs and amounts to be set aside for claims, obligations and expenses during the liquidation and winding-up process, and the related timing to complete such transactions. These and other factors make it impossible to predict with certainty the actual net cash amount that will ultimately be available for distribution to limited partners or the timing of any such distributions.

***If we fail to retain sufficient funds to pay the liabilities actually owed to our creditors, each Limited Partner receiving liquidating distributions could be liable for payment to our creditors for such Limited Partners' pro rata share of any shortfall, up to the amount actually distributed to such Limited Partner in connection with the dissolution.***

Under Delaware law, in the event we fail to retain sufficient funds to pay the expenses and liabilities actually owed to our creditors, each Limited Partner could be held liable for payment to our creditors for claims brought during the three-year period after the effective date of dissolution, up to the lesser of (1) such Limited Partner's pro rata share of amounts owed to creditors in excess of the contingency reserve and (2) the amounts previously received by such Limited Partner in dissolution from us and from any liquidating trust or trusts. Accordingly, in such event, a Limited Partner could be required to return part, or all, of the distributions previously made to such Limited Partner in the dissolution, and a Limited Partner could receive nothing from us under the Plan of Liquidation, but no Limited Partner will be liable for claims against the Partnership in excess of their capital account balance. Moreover, in the event a Limited Partner has paid taxes on amounts previously received, a repayment of all or a portion of such amount could result in a Limited Partner incurring a net tax cost if the Limited Partner's repayment of an amount previously distributed does not cause a commensurate reduction in taxes payable.

***Our Limited Partners may not receive distributions to fully return their invested capital.***

There can be no assurance that the Partnership will pay its operating expenses, liabilities, and obligations during the liquidation and wind-down process, and make distributions to its Limited Partners to fully return their paid capital, or any distributions at all in excess of their paid in capital.

***We and the General Partner are involved in material litigation arising from the operations of the Partnership and we are subject to litigation risks. Resolving litigation disputes can be costly and time consuming.***

We, the General Partner, as well as Ascendant and Axiom Capital Management, Inc. ("Axiom"), affiliated broker-dealers, and current and former officers and employees of the foregoing are defendants in lawsuits arising from the sale and marketing of the Units, including fees paid in connection therewith, and the operation of the Partnership, including the dissemination of information to Limited Partners regarding the Partnership and Partnership distributions. These lawsuits variously allege fraud and misrepresentation, misuse of investor

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funds, breach of fiduciary duty and other causes of action and seek substantial damages, injunctive relief, rescission, disgorgement and other remedies. As a result of outstanding litigation, there may be significant legal fees incurred by the Partnership.

GPB faces various regulatory and governmental matters, certain of which arise from its activities as our General Partner. See "Item 3. Legal Proceedings" for more details. We intend to defend against these claims vigorously, however, an unfavorable resolution of one or more of these matters could have a material adverse effect on our business, financial condition or results of operations. Any restriction on GPB's ability to conduct business as an investment advisor registered under the Investment Advisors Act of 1940 could materially and adversely affect our ability to manage the Partnership.

The Partnership was required under federal securities laws to file a Form 10 and thereafter file periodic reports pursuant to Section 12(g) of the Exchange Act. The Partnership failed to file a Form 10 until May 14, 2021. Owners of Class A Units and Class A-1 Units would have lacked material information about the Partnership prior to the filing of the Form 10 and may have been harmed by the Partnership's delay in filing. The SEC has filed a lawsuit against the General Partner, and one of the allegations in the lawsuit is that the Partnership failed to file a Form 10 when required. The Partnership has incurred expenses in advancing funds to the General Partner to pay for its attorney's fees and costs in that lawsuit, and will continue to incur expenses in that regard.

We and our subsidiaries that used to operate dealerships are involved, and will continue to be involved, in legal proceedings arising out of the operations of our business, including litigation with customers, wage, hour and other employment-related lawsuits, and actions brought by governmental authorities. Some of these lawsuits purport or may be determined to be class or collective actions and seek substantial damages or injunctive relief, or both, and some may remain unresolved for several years. The results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on our business, financial condition, or results of operations.

In the event settlement discussions regarding class action lawsuits or any pending regulatory investigations are unsuccessful, any liability may require an outflow of cash from the Partnership. The amount and timing of any such outflow of cash is not estimable at this time.

GPB anticipates that the resolution of these matters will likely take substantial time. In many of the cases, there is still significant discovery and/or investigation to be completed. When combined with lengthy motion practice and possible trial and appeals, coupled with the inevitable slowdown due to the ongoing pandemic, some or all of these matters may not be resolved for several years.

We are advancing funds to officers, directors and representatives of the dealerships, as well as GPB, its principals and representatives, for any reasonable costs they may incur in connection with defending themselves in such disputes as required by various agreements or governing law. This advancing of funds does not cover any potential future outcomes or settlements that result from these disputes. The officers, directors and representatives of our dealerships (including our personnel or persons affiliated with GPB) may similarly receive funds by such dealerships. These arrangements to advance funds may result in contingent liabilities, for which we established reserves and escrows. In that regard, distributions to Limited Partners may be delayed or withheld until such reserve is no longer needed or the escrow period expires. If the amounts of such reserves or escrows are insufficient, such liabilities might ultimately have to be funded by Limited Partners to the extent that such Limited Partners have received prior cash distributions from us.

***We have identified material weaknesses in our internal controls. We will expend significant financial and other resources to comply with the requirements of being a public entity. These requirements may place a strain on our systems and resources.***

As a public reporting entity, the Partnership is subject to the reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and requirements of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act" or "Sarbanes-Oxley"). The Exchange Act requires that we file annual, quarterly and current reports with respect to material events affecting our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal control over financial reporting. Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, was enacted. There are significant corporate governance and executive compensation related provisions in both Sarbanes-Oxley and the Dodd-Frank Act that required changes in our corporate governance practices. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

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We may expend substantial resources developing and maintaining procedures, processes, policies and practices for the purpose of addressing the standards and requirements applicable to public reporting entities. In order to ensure the effectiveness of our disclosure controls and procedures and our internal control, significant financial and human resources as well as management oversight would be required. In particular, to achieve compliance with Sarbanes-Oxley internal control mandates within the prescribed period, we are engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. We have identified weaknesses, or a combination of significant deficiencies, relating to risk assessment, control activities and monitoring of the Partnership's control environment that have been determined to be material weaknesses in our internal controls. These identified weaknesses were attributed, in part, to insufficient and ineffective controls within our financial close and reporting process.

We expect to incur significant annual costs related to our public company status including, among other things, to directors' and officers' liability insurance cost, director fees, SEC reporting expenses, additional administrative expenses payable to GPB or affiliated entities to compensate them for hiring additional accounting, legal and administrative personnel, and legal fees and similar expenses.

We have concluded that there are material weaknesses in our system of internal control over financial reporting, which if not remediated could materially and adversely affect our ability to timely and accurately report our results of operations and financial condition.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement internal control over financial reporting could cause us to fail to meet our reporting obligations. We have determined that material weaknesses in our internal control over financial reporting exist in part as a result of insufficient and ineffective controls within our financial close and reporting process. Moreover, the Partnership did not design and implement effective control over our control environment, risk assessment, control activities and monitoring activities with regard to our processes and procedures commensurate with our financial reporting requirements which were determined to be material weaknesses.

***Breaches in our data security systems or in systems used by our vendor partners, including cyber-attacks or unauthorized data distribution by employees or affiliated vendors, or disruptions to access and connectivity of our information systems could impact our operations or result in the loss or misuse of customers' proprietary information.***

Our information technology systems are important for operating our business efficiently. We rely on information systems to effectively manage our business and the preparation of our consolidated financial and operating data. Despite the security measures we plan to have in place and any additional measures we may implement, our facilities and systems, and those of any third-party service providers, could be vulnerable to security breaches, ransomware, computer viruses, lost or misplaced data, programming errors, human errors, acts of vandalism, or other events. The failure of information systems to perform as designed, the failure to maintain and enhance or protect the integrity of these systems or any security breach or event resulting in the misappropriation, loss, or other unauthorized disclosure of confidential information, whether by us directly or any third-party service providers, could damage our reputation, expose us to the risks of litigation and liability, disrupt our business, expose us to third-party claims, result in adverse publicity or otherwise adversely affect our financial condition and results of operations.

Aspects of our operations are subject to privacy, data use and data security regulations, which impact the way we use and handle data. In addition, regulators are proposing and adopting new laws or regulations that could require us to adopt certain cyber security and data handling practices. The changing privacy laws create new individual privacy rights and impose increased obligations on companies handling personal data.

We collect, process, and retain personally identifiable information regarding Limited Partners, employees, and vendors in the normal course of our business. Our internal and third-party systems are subject to risk from hackers or other individuals with malicious intent to gain unauthorized access to our systems. Cyber-attacks are growing in number and sophistication thus presenting an ongoing threat

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to systems, whether internal or external, used to operate the business on a day-to-day basis. We invest in reasonable commercial security technology to protect our data and business processes against many of these risks. We also purchase insurance to mitigate the potential financial impact of many of these risks. Despite the security measures we have in place, our facilities and systems, and those of our third-party service providers, could be vulnerable to security breaches, computer viruses, lost or misplaced data, programming errors, human errors, acts of vandalism, or other events. Any security breach or event resulting in the misappropriation, loss, or other unauthorized disclosure of confidential information, or degradation of services provided by critical business systems, whether by us directly or our third-party service providers, could adversely affect our business operations, reputation with current and potential Limited Partners, employees, or vendors. We could also experience, other operational and financial impacts resulting from investigations, litigation, or imposition of penalties or other means.

We depend on GPB to develop and implement appropriate systems for certain of our activities. In addition, certain of GPB's operations may interface with or depend on systems operated by third parties, and there may be inadequate means to verify the risks or reliability of such third-party systems. These programs or systems could be vulnerable to security breaches, computer viruses, lost or misplaced data, programming errors, human errors, acts of vandalism, or other events. Any such defect or failure could have a material adverse effect on us. Although GPB endeavors to provide sufficient redundancy and back-up for material information related to us, GPB is not liable to us for losses caused by systems failures.

**RISKS AS A RESULT OF OUR ASSOCIATION WITH THE GENERAL PARTNER AND HIGHLINE**

***We rely on Highline, GPB and its affiliates.***

The Partnership is dependent upon the efforts, experience, contacts and skills of Highline, GPB and its affiliates, as well as those of the independent managers recruited by GPB to assist in the management of the Partnership. The main governing bodies which ultimately manage and make decisions for the Partnership are the GPB Acquisition Committee, and GPB's Operation Service Provider, Highline. The structure and composition of each of these bodies is described in "Item 10. Directors and Executive Officers and Corporate Governance" in this Annual Report on Form 10-K. Various employees of and advisors to GPB provide services to the Partnership, which are in addition to and separate from GPB's services as General Partner of the Partnership. There can be no assurance that such employees and advisors will continue to provide services to GPB or will continue to function on the Partnership's behalf. The future loss of any member of the GPB Acquisition Committee, or Highline, any of GPB's key employees or any GPB or Highline employees or advisors providing services to the Partnership, could have a material, adverse effect on the Partnership, and the recruitment of qualified replacement personnel could prove difficult. We do not maintain any key man insurance for any such individuals. In addition, there is no key man succession plan currently in place.

The events of February 4, 2021, and thereafter, including the indictment of the owner and former officer of GPB, the filing by the SEC and other government agencies of litigations against GPB, and the appointment of the Monitor, may have an adverse impact on the ability of GPB to operate its business and manage the Partnership effectively. The Monitor was granted the authority to approve or disapprove of material actions proposed by Highline, GPB and its affiliates. The Monitor could recommend to the Court that the Partnership liquidate its assets or file for a reorganization in bankruptcy. In addition, pursuant to the Amended Order of April 14, 2021, GPB shall (i) grant the Monitor access to all non-privileged books, records and account statements for the GPB-managed funds, including the Partnership, as well as their portfolio companies; and (ii) cooperate fully with requests by the Monitor reasonably calculated to fulfill the Monitor's duties. The Monitor is required to assess the Partnership's operations and business, and make recommendations to the EDNY Court, which may include continuation of GPB's operations subject to the Monitorship, a liquidation of assets, or filing for reorganization in bankruptcy. The Amended Order provides that the Monitor will remain in place until terminated by order of the EDNY Court, and grants the Monitor the authority to approve or disapprove proposed material corporate transactions by GPB, the Partnership and its subsidiaries, extensions of credit by them outside the ordinary course of business, decisions to make distributions to the Limited Partners of the Partnership, or any decision to file any bankruptcy or receiver petition for any of them, among other actions.

On May 31, 2022, Mr. Gentile filed a motion in the SEC Action to modify the Amended Order pursuant to the Rule 60(b) Motion. In his Rule 60(b) Motion, Mr. Gentile seeks a Court order to, among other things, (i) narrow the scope of the Monitor's responsibilities; and (ii) direct the Monitor to ensure that GPB does not sell or otherwise dispose of assets or portfolio companies that the Partnership owns before the completion of a "strategic assessment" to be conducted by three managers Mr. Gentile purportedly appointed to GPB on May 27, 2022. On that same day, May 31, 2022, the Monitor notified Mr. Gentile and GPB that Mr. Gentile's purported appointment of three new managers to GPB without Monitor approval, amongst other things, was in violation of the Amended Order. Mr. Gentile and GPB were, at that time, given ten (10) business days to cure the violation of the Amended Order. The cure period has expired without any steps having been taken to comply with the Monitor's notification of violation of the Amended Order.

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On June 13, 2022, the SEC filed by Order to Show Cause in the SEC Action an application to (i) convert the existing Monitorship over GPB and the GPB-managed funds to a Receivership, and appoint the previously-appointed Monitor, Joseph T. Gardemal III, as Receiver; and (ii) impose the Receivership Application. The Receivership Application and the Proposed Order were filed with the EDNY Court with consent of GPB's management.

The Receivership Application seeks appointment of Mr. Gardemal as Receiver in order to, in part, streamline the process by which GPB and the GPB-managed funds liquidate remaining portfolio company assets and distribute money to Limited Partners, subject to the EDNY Court's supervision. The Proposed Order grants to Mr. Gardemal, generally, all powers and authorities previously possessed by the entities subject to the Proposed Order, as well as the powers possessed by the officers, directors, managers and others previously in charge of those entities, and permits him to, among other things, take all such actions necessary to preserve receivership assets.

Additionally, the Receivership Application includes a proposed stay of all Federal and State actions (as well as any arbitrations) presently pending against GPB and the GPB-managed funds, and a centralized claims process for GPB Limited Partners, in the EDNY Court, to prevent potentially disparate actions in different courts that could negatively impact the assets proposed to be subject to the EDNY Court's jurisdiction and control. If appointed, the receiver could assume the right to operate and manage the business and we may be subject to, among other things, closer monitoring of our day-to-day activities and books and records than under the current Monitorship. We may also be prohibited from making certain investments or undertaking other activities that we would have otherwise pursued, may be required to settle disputes, including with creditors, in ways that we may not otherwise have agreed to outside of Receivership, or otherwise be subject to reorganization or liquidation.

The Rule 60(b) Motion and the validity of the appointment of the new managers are presently under consideration by the EDNY Court along with the Receivership Application. Currently, there can be no assurance as to the outcome of the Rule 60(b) Motion or the Receivership Application.

***Expenses related to GPB and Highline are significant and may deplete net assets available for distribution to our Limited Partners.***

GPB is entitled to receive the "Managerial Assistance Fee" described herein regardless of whether we or any of our dealerships operated or were sold at a profit. Similarly, we are obligated to reimburse GPB for the portion of the total compensation of GPB's officers and employees relating to the time such officers or employees provide "In-House Services" or "Operations Support Services" as defined in the PPM to the Partnership or our dealerships regardless of whether we or any of our dealerships operated or were sold at a profit. In addition to the fees paid to GPB, Highline is paid an operation service provider ("OSP") fee for services provided to the Partnership.

***There are potential conflicts of interest between GPB and its affiliates and the Partnership that could impact our returns.***

GPB and its affiliates, their directors, officers, employees and agents and entities in which the foregoing persons have an ownership interest, which collectively, including GPB, are referred to herein as "Related Parties," may have actual or potential conflicts of interest in connection with our activities and acquisitions. GPB typically places certain restrictions on the Partnership entering into a transaction in which a Related Party has a financial interest (referred to herein as an "Interested Transaction"). GPB has policies and procedures in place for addressing Interested Transactions, which typically include a review of the transaction and associated documents by GPB's Chief Compliance Officer and/or the Chief Compliance Officer's delegate(s). These Interested Transaction procedures do not, however, assure that all conflict of interest transactions and relationships involving the Partnership will receive independent review or that all conflicts will be effectively remediated in transactions that are reviewed.

The Partnership's fee structure and expense reimbursement policies also give rise to conflicts of interest between the Partnership and the Related Parties. Because GPB is entitled to be reimbursed for In-House Services and Operations Support Services, GPB could assign internal personnel to provide more services to the Partnership than are necessary in order to defray its internal compensation expenses or allocate an excessive portion of such expenses to the Partnership.

***Limited Partners have very limited rights to vote or to remove the General Partner.***

Limited Partners are not entitled to participate in operating the Partnership's business, and have only limited voting and consent rights on matters affecting our business. The Limited Partners may only remove GPB upon the occurrence of certain events, such as if a court of competent jurisdiction has entered a final, non-appealable judgment finding GPB liable for actual fraud or willful misconduct in its capacity as our General Partner, in which case the vote of unaffiliated holders of at least 20% of the Units is required to remove the General Partner. There is also a limited ability of Limited Partners to call meetings or to acquire information about our operations. As a

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result of these provisions, Limited Partners have very little ability to influence the Partnership's operating results and may not remove GPB as our General Partner because Limited Partners believe that it is poorly managing our business.

**RISKS RELATED TO THE UNITS**

***Our Units are illiquid, have no public market and are generally transferable only with the consent of the General Partner. Redemptions of the Units are at the discretion of the General Partner and have been suspended.***

Our Units are not listed on any securities exchange or interdealer quotation system and there is no intention to seek such a listing. There is no established market for the Units. Transfers of Units are permitted under the LPA only with the consent of the General Partner. The Units have not been registered under the 1933 Act or applicable state "Blue Sky" securities laws and cannot be sold unless they are subsequently registered or an exemption from such registration is available. The absence of a market for the Units means that there is an extremely limited opportunity for a Limited Partner to sell its Units. Units should be viewed solely as long-term, illiquid investments. Accordingly, Limited Partners should be prepared to hold their investments in us with the expectation that any returns will be realized only from the effective execution of the Plan of Liquidation.

Although the LPA contains provisions for limited redemptions of Units, redemptions are at the General Partner's sole discretion and are subject to notice requirements and other limitations set forth in the LPA. The General Partner has suspended all redemptions and there can be no assurance as to whether or when voluntary redemptions will resume. Unitholders must bear the economic risk of their investments for an indefinite period of time.

***Limited Partners may be subject to filing requirements and may be subject to short-swing profits under the Exchange Act as a result of an investment in us. It can be burdensome to comply with filing requirements.***

Because our Units are registered under the Exchange Act, ownership information for any person who beneficially owns 5% or more of our Units must be disclosed in a Schedule 13D or other filings with the SEC. Beneficial ownership for these purposes is determined in accordance with the rules of the SEC, and includes having voting or investment power over the securities. Although we will provide in our annual financial statements the amount of outstanding Units and our Limited Partners' Units, the responsibility for determining the filing obligation and preparing the filing remains with the Limited Partner. In addition, owners of 10% or more of our Units are subject to reporting obligations under Section 16(a) of the Exchange Act.

Investors who hold 10% or more of a class or series of our Units may be subject to Section 16(b) of the Exchange Act, which recaptures for the benefit of the issuer profits from the purchase and sale of securities registered under the Exchange Act within a six-month period.

***Investments in our Units may have adverse tax consequences.***

With limited exceptions designed to meet the needs of U.S. tax exempt investors and certain non U.S. investors, the Partnership generally expects to be treated as a partnership for U.S. federal income tax purposes. Each Limited Partner, in determining its U.S. federal income tax liability, will take into account its allocable share of the Partnership's income, gain, loss, deduction and credits, without regard to whether it has received distributions from the Partnership. The Partnership anticipates that it may incur income that would be treated as unrelated business taxable income ("UBTI") under Sections 512 and 514 of the Internal Revenue Code of 1986, as amended (the "IRC"). Accordingly, Limited Partners that are tax exempt entities, including qualified retirement plans (stock, bonus, pension, or profit sharing plans described in IRC§401(a)) and individual retirement accounts ("IRAs"), are urged to consult their tax advisors concerning the U.S. Federal, state and local income and other tax consequences that may result from an investment in the Partnership.

***Item 1B. Unresolved Staff Comments***

None.

***Item 2. Properties***

As of December 31, 2022, we owned one property and leased two properties. These properties are located in New Hampshire, Connecticut and New York. The properties consist primarily of automotive showrooms, display lots, service facilities, supply facilities, automobile storage lots, parking lots and offices.

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***Item 3. Legal Proceedings***

We, our General Partner, and our former dealerships are involved in a number of regulatory, litigation, arbitration and other proceedings or investigations, many of which expose us to potential financial loss. We are advancing funds, pursuant to indemnification clauses in the LPA, to officers, directors and representatives of the dealerships, as well as GPB, its principals, representatives, and affiliates, for any costs they may incur in connection with their legal defense of such disputes as required by various agreements or governing law. This advancing of funds does not cover any potential future outcomes or settlements that result from these disputes.

We establish reserves or escrows for legal actions when potential losses associated with the actions become probable and the costs can be reasonably estimated. The actual costs of resolving legal actions may be substantially higher or lower than the amounts reserved or placed in escrow for those actions. Distributions may be delayed or withheld until such reserves are no longer needed or the escrow period expires. If liabilities exceed the amounts reserved or placed in escrow, Limited Partners may need to fund the difference by refunding some or all distributions previously received. In 2022, the Partnership paid $5.0 million of legal indemnification costs which reduced the liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statements of Net Assets in Liquidation by a corresponding amount. In 2021, the Partnership expensed $4.0 million of legal indemnification expenses recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.

With respect to all significant litigation and regulatory matters facing us and our General Partner, we have considered the likelihood of an adverse outcome. It is possible that we could incur losses pertaining to these matters that may have a material adverse effect on net assets in liquidation in any future reporting period. We understand that the General Partner is currently paying legal costs associated with these actions for itself and certain indemnified parties. The Partnership expects to provide partial or in many cases complete reimbursement to the General Partner as required by various agreements or governing law, but the amount is not reasonably estimable at this time.

***Regulatory and Governmental Matters***

GPB and certain of its principals and affiliates face various regulatory and governmental matters. GPB seeks to comply with all laws, rules, regulations and investigations into any potential or alleged violation of law. In such situations where GPB disagrees with the Government's allegations made against it, GPB intends to vigorously defend itself in court. These matters could have a material adverse effect on GPB and the Partnership's business, or results of operations.

***Appointment of Monitor and Application for Receivership***

On February 11, 2021, the EDNY Court in the SEC Action appointed the monitor over GPB until further order of the Court. The EDNY Court appointed the Monitor in response to a request from the SEC, which asserted that the Monitor was necessary to protect investors in light of the alleged misconduct of GPB Capital's former CEO, David Gentile. In its February 4, 2021 Complaint in the SEC Action, the SEC alleged that Mr. Gentile, as the owner and then-CEO of GPB Capital, along with Jeffry Schneider, the owner of GPB's placement agent, lied to investors about the source of money used to make 8% annualized distribution payments to investors. According to the SEC, Mr. Gentile and others allegedly told investors that the distribution payments were paid exclusively with monies generated by GPB portfolio companies, but as alleged, GPB actually used investor money to pay portions of the annualized 8% distributions. The Complaint further contains allegations that Mr. Gentile and others manipulated financial statements of certain limited partnership funds that GPB manages to perpetuate the deception by giving the false appearance that the funds' income was closer to generating sufficient income to cover the distribution payments than it actually was. Moreover, the Complaint alleges that Mr. Gentile engaged in undisclosed self-dealing, including by omitting from investor communications certain conflicts of interest and fees and other compensation that he received, totaling approximately $8.0 million.

In support of the Order, the SEC contended that the Monitor would provide assurances to investors, GPB's counterparties, and the public that an unbiased and qualified person who was not beholden to Mr. Gentile, was vetting any significant transactions and decisions, and looking out for the interests of investors. Accordingly, pursuant to the Order, GPB shall (i) grant the Monitor access to all non-privileged books, records and account statements for the GPB-managed Funds, including the Partnership, as well as their portfolio companies; and (ii) cooperate fully with requests by the Monitor reasonably calculated to fulfill the Monitor's duties. As noted below, the Order was amended on April 14, 2021.

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The Monitor is required to assess the Partnership's operations and business, and make recommendations to the EDNY Court, which may include continuation of GPB's operations subject to the Monitorship, a liquidation of assets, or filing for reorganization in bankruptcy. The Order provides that the Monitor will remain in place until terminated by order of the EDNY Court, and grants the Monitor the authority to approve or disapprove proposed material corporate transactions by GPB, the Partnership and its subsidiaries, extensions of credit by them outside the ordinary course of business, decisions to make distributions to the Limited Partners of the Partnership, or any decision to file any bankruptcy or receiver petition for any of them, among other actions. The Monitor is not required to approve the issuance of the Consolidated Financial Statements included within this Form 10-K, nor has management sought or obtained approval from the Monitor.

On April 14, 2021, the EDNY Court entered an Amended Order, providing that, in addition to the SEC and GPB, certain State regulators will receive access to the periodic reports filed by the Monitor pursuant to the Order.

On May 31, 2022, Mr. Gentile filed a motion in the SEC Action to modify the Amended Order pursuant to Rule 60(b) of the Federal Rules of Civil Procedure. In his Rule 60(b) Motion, Mr. Gentile is seeking a court order to, among other things, (i) narrow the scope of the Monitor's responsibilities; and (ii) direct the Monitor to ensure that GPB does not sell or otherwise dispose of assets or portfolio companies that the Partnership owns before the completion of a "strategic assessment" to be conducted by three managers Mr. Gentile purportedly appointed to GPB on May 27, 2022. On that same day, May 31, 2022, the Monitor notified Mr. Gentile and GPB that Mr. Gentile's purported appointment of three new managers to GPB without Monitor approval was, amongst other things, in violation of the Amended Order. Mr. Gentile and GPB were, at that time, given ten (10) business days to cure the violation of the Amended Order. The cure period has expired without any steps having been taken to comply with the Monitor's notification of violation of the Amended Order.

On June 13, 2022, the SEC filed by Order to Show Cause in the SEC Action an application to (i) convert the existing Monitorship over GPB and the GPB-managed funds to a Receivership, and appoint the previously-appointed Monitor, Joseph T. Gardemal III, as Receiver; and (ii) impose a litigation injunction on cases filed against GPB and the GPB-managed funds. The Receivership Application and the Proposed Order were filed with the EDNY Court with consent of GPB's management.

The Receivership Application seeks appointment of Mr. Gardemal as Receiver in order to, in part, streamline the process by which GPB and the GPB-managed funds liquidate remaining portfolio company assets and distribute money to Limited Partners, subject to the EDNY Court's supervision. The Proposed Order grants to Mr. Gardemal, generally, all powers and authorities previously possessed by the entities subject to the Proposed Order, as well as the powers possessed by the officers, directors, managers and others previously in charge of those entities, and permits him to, among other things, take all such actions necessary to preserve receivership assets.

Additionally, the Receivership Application includes a proposed stay of all Federal and State actions (as well as any arbitrations) presently pending against GPB and the GPB-managed funds, and provides for a centralized claims process for GPB Limited Partners, in the EDNY Court, to prevent potentially disparate actions in different courts that could negatively impact the assets proposed to be subject to the EDNY Court's jurisdiction and control.

The Rule 60(b) Motion and the validity of the appointment of the new managers are presently under consideration by the EDNY Court, along with the Receivership Application. Currently, there can be no assurance as to the outcome of the Rule 60(b) Motion or the Receivership Application.

***Federal Matters***

On February 4, 2021, the SEC filed and action against GPB, Ascendant, AAS, David Gentile, Jeffry Schneider and Jeffrey Lash in the EDNY Court. No GPB-managed partnership is a named defendant in the SEC Action. The SEC Action alleges several violations of the federal securities laws, including securities fraud. The SEC is seeking disgorgement and civil monetary penalties, among other remedies.

Also, on February 4, 2021, the USAO brought the Criminal Case against Mr. Gentile, Mr. Schneider, and Mr. Lash. The indictment in the Criminal Case alleges conspiracy to commit securities fraud, conspiracy to commit wire fraud, and securities fraud against all three individuals. Mr. Gentile and Mr. Lash were also charged with two counts of wire fraud. We understand that the USAO intends to seek criminal forfeiture. Mr. Gentile resigned from all management and board positions with GPB and Highline, and the GPB-managed funds, including the Partnership, and subsidiaries of the Partnership, promptly following his indictment.

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***State Matters***

On May 27, 2020, the Massachusetts filed an Administrative Complaint against GPB for alleged violations of the Massachusetts Uniform Securities Act. No GPB-managed fund is a named defendant. The complaint alleges, among other things, that the offering documents for several GPB-managed funds, including the Partnership, included material misstatements or omissions. Massachusetts is seeking both monetary and administrative relief, including disgorgement and rescission to Massachusetts residents who purchased the GPB-managed funds. This matter is currently stayed, pending resolution of the Criminal Case.

On February 4, 2021, seven state securities regulators (from Alabama, Georgia, Illinois, Missouri, New Jersey, New York, and South Carolina, collectively the "States") each filed suit against GPB. No GPB-managed fund is a named defendant in any of the suits. Several of the suits also named Ascendant, AAS, Mr. Gentile, Mr. Schneider, and Mr. Lash as defendants. The States' lawsuits allege, among other things, that the offering documents for several GPB-managed funds, including the Partnership, included material misstatements and omissions. The States are seeking both monetary and administrative relief, including disgorgement and rescission. The cases brought by the States have been stayed pending the conclusion of the related Criminal Case. The State of New Jersey has voluntarily dismissed its case, without prejudice to re-file it following the conclusion of the Criminal Case.

***Actions Asserted Against GPB and Others, Not Including the Partnership***

**Ismo J. Ranssi, derivatively on behalf of Armada Waste Management, LP, v. GPB Capital Holdings, LLC, et al. (New York Supreme Court, New York County, Index No. 654059/2020)**

In August 2020, plaintiffs filed a derivative action against GPB, Ascendant, AAS, Axiom, David Gentile, Mark D. Martino, and Jeffry Schneider in New York Supreme Court. GPB Waste Management, LP is named as a nominal defendant. The Partnership is not a named defendant. The Complaint alleges, among other things, that the offering documents for certain GPB managed funds include material misstatements and omissions. Plaintiffs bring causes of action against GPB for breach of fiduciary duty, breach of contract, unjust enrichment, and an equitable accounting, and against all other defendants for breach of fiduciary duty and aiding and abetting breach of fiduciary duty, and unjust enrichment. The plaintiffs seek a declaration from the Court that defendants breached duties owed to them, and that defendants must indemnify GPB Waste Management, LP for costs in connection with the suit. Plaintiffs also seek unspecified damages and an equitable accounting, and an Order that defendants disgorge all fees obtained through the sale of GPB Waste Management, LP "securities". Any potential losses associated with this matter cannot be estimated at this time.

**Galen G. Miller and E. Ruth Miller, derivatively on behalf of GPB Holdings II, LP, v. GPB Capital Holdings, LLC, et al. (New York Supreme Court, New York County, Index No. 656982/2019)**

In November 2019, plaintiffs filed a derivative action against GPB, Ascendant, AAS, Axiom, Michael Cohn, Steven Frangioni, David Gentile, William Jacoby, Minchung Kgil, Mark D. Martino, and Jeffry Schneider in New York Supreme Court, New York County. The Partnership was named only as a nominal defendant. An Amended Complaint was filed on or about March 2, 2020, alleging, among other things, that the offering documents for certain GPB-managed funds include material misstatements and omissions. The Amended Complaint alleges causes of action for breach of fiduciary duty against all defendants; aiding and abetting breach of fiduciary duty against Ascendant, AAS, Axiom and Mr. Martino; breach of contract against GPB; unjust enrichment against all defendants; and an equitable accounting against GPB. The plaintiffs are seeking disgorgement of alleged unjust enrichment, unspecified damages as a result of alleged wrongful acts, costs of the action, and an equitable accounting. Any potential losses associated with this matter cannot be estimated at this time.

**GPB Lender, LLC v. GPB Capital Holdings, LLC (New York Supreme Court, Nassau County, Index No. 604887/2022)**

On or about April 14, 2022, plaintiff GPB Lender, LLC, a related entity, filed a lawsuit against GPB Capital Holdings, LLC in New York Supreme Court, Nassau County, for breaches of a promissory note and breaches of contract related to a 2016 loan agreement and a 2019 loan agreement entered into between the parties. Plaintiff alleged that it is owed approximately $2.0 million in unpaid principal and interest under the promissory note. Plaintiff also alleged that it is owed approximately $0.4 million in unpaid principal and interest under the two loan agreements. On January 30, 2023, the Court granted GPB Lender, LLC's motion for summary judgment in the principal amount of approximately $2.5 million, plus interest. No costs are expected to be charged to the Partnership.

**Cient LLC v. GPB Capital Holdings, LLC (New York Supreme Court, Nassau County, Index No. 604886/2022)**

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On or about April 14, 2022, plaintiff Cient LLC, a related entity, filed a lawsuit against GPB Capital Holdings, LLC in New York Supreme Court, Nassau County, for breach of a loan agreement and breach of contract relating to a 2019 loan agreement entered into by the parties. Plaintiff alleged that approximately $0.8 million in unpaid principal remains due, along with accrued and unpaid interest. On January 30, 2023, the Court granted Cient LLC's motion for summary judgment in the principal amount of $0.9 million, plus interest. No costs are expected to be charged to the Partnership.

**Plymouth Rock Holding LLC v. GPB Capital Holdings, LLC (New York Supreme Court, Nassau County, Index No. 604873/2022)**

On or about April 14, 2022, plaintiff Plymouth Rock Holding, LLC, a related entity, filed a lawsuit against GPB Capital Holdings, LLC in New York Supreme Court, Nassau County, for breach of a loan agreement and breach of contract relating to a 2019 loan agreement entered into by the parties. Plaintiff alleged that approximately $0.3 million in unpaid principal remains due, along with accrued and unpaid interest. On January 30, 2023, the Court granted Plymouth Rock Holding LLC's motion for summary judgment in the principal amount of $0.4 million, plus interest. No costs are expected to be charged to the Partnership.

***Actions Asserted Against GPB and Others, Including the Partnership***

For all matters below in which the Partnership is a defendant and where the partnership disagrees with the allegations against, we intend to vigorously defend against the allegations, however no assurances can be given that we will be successful in doing so.

**Tom Alberto, et al. v. GPB Capital Holdings, LLC, et al. (American Arbitration Association, Case Number: 01-22-0001-5433)**

On or about April 13, 2022, claimants, investors in funds managed by GPB Capital Holdings, LLC, commenced an arbitration with the American Arbitration Association against GPB Capital Holdings, LLC, GPB Automotive Portfolio, LP, GPB Holdings II, LP, GPB Cold Storage, LP, GPB Holdings, LP, GPB Holdings II, LP, GPB Holdings Qualified, LP, GPB Holdings III, LP, GPB NYC Development, LP, and GPB Waste Management, LP, along with other non-GPB parties. All claimants were customers of Concorde Investment Services, LLC ("Concorde"), and each purchased his or her limited partnership interest in a GPB-managed fund through Concorde. Claimants asserted claims based on fraud, breach of fiduciary duty, breach of contract, among others, and claimed to have suffered millions of dollars in damages.

GPB contended that the arbitration was improperly filed, and as such commenced a proceeding in New York State Supreme Court (GPB Capital Holdings, LLC et al. v. Tom Alberto et al., Index No. 656432/2022), solely for the purpose of seeking a stay of the arbitration. In July 2022, following the Court's entry of an Order temporarily staying the arbitration, the parties stipulated and agreed to the entry of a court order entering judgment for GPB and the other petitioners. The arbitration will be permanently stayed upon the Court so-ordering the parties stipulation. In a letter dated December 20, 2022, the American Arbitration Association informed the parties to the arbitration that, as of December 20, 2022, the arbitration was closed.

**Michael Peirce, derivatively on behalf of GPB Automotive Portfolio, LP v. GPB Capital Holdings, LLC, Ascendant Capital, LLC, Ascendant Alternative Strategies, LLC, Axiom Capital Management, Inc., Steven Frangioni, David Gentile, William Jacoby, Minchung Kgil, Mark D. Martino and Jeffry Schneider, -and- GPB Automotive Portfolio, LP, Nominal Defendant (New York Supreme Court, New York County, Case No. 652858/2020)**

In July 2020, plaintiff filed a derivative action in New York Supreme Court against GPB, Ascendant, AAS, Axiom, Steve Frangioni, David Gentile, William Jacoby, Minchung Kgil, Mark Martino, and Jeffry Schneider. The Complaint alleges various breaches of fiduciary duty and/or aiding and abetting the breaches of fiduciary duty against all defendants, breach of contract against GPB, unjust enrichment, and an equitable accounting. Plaintiffs are seeking declaratory relief, disgorgement, restitution, an equitable accounting, and unspecified damages. Any potential losses associated with this matter cannot be estimated at this time.

**Alfredo J. Martinez, et al. v. GPB Capital Holdings, LLC (Delaware Chancery Court, Case No. 2019-1005)**

In December 2019, plaintiffs filed a civil action in Delaware Court of Chancery to compel inspection books and records from GPB, as General Partner, and from the Partnership, GPB Holdings I, GPB Holdings II, and GPB Waste Management. In June 2020, the court dismissed plaintiffs' books and records request, but allowed a contract claim for specific performance to proceed as a plenary action.

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The plaintiffs are seeking unspecified damages and penalties. Any potential losses associated with this matter cannot be estimated at this time.

**Alfredo J. Martinez and HighTower Advisors v. GPB Capital Holdings, LLC, et al. (Delaware Chancery Court, Case No. 2020-0545)** 

In July 2020, plaintiff filed a complaint against GPB, Armada Waste Management GP, LLC, Armada Waste Management, LP, the Partnership, GPB Holdings II, LP, and GPB Holdings, LP in the Delaware Court of Chancery to compel inspection of GPB's books and records based upon specious and unsubstantiated allegations regarding alleged fraudulent activity, mismanagement, and breaches of fiduciary duty. The plaintiffs are seeking an order compelling GPB to permit inspection of documents related to Armada Waste, as well as for costs and fees. Any potential losses associated with this matter cannot be estimated at this time.

**Lance Cotten, Alex Vavas and Eric Molbegat v. GPB Capital Holdings, LLC, Automile Holdings LLC D/B/A Prime Automotive Group, David Gentile, David Rosenberg, Philip Delzotta, Joseph Delzotta, and any other related entities (New York Supreme Court, Nassau County, Case No. 604943/2020)**

In May 2020, plaintiffs filed a civil action in New York Supreme Court, Nassau County against GPB, Automile Holdings LLC d/b/a Prime Automotive Group, David Gentile, David Rosenberg, Philip Delzotta, Joseph Delzotta, and other related entities. The complaint alleges that defendants engaged in systematic fraudulent and discriminatory schemes against customers and engaged in retaliatory actions against plaintiffs, who were employed by Garden City Nissan from August until October 2019. The plaintiffs are seeking damages pursuant to New York Labor Law Section 740, which provides for compensation for lost wages, benefits, and other remuneration, and liquidated damages for alleged violations of Executive Law Section 296. No costs associated with the resolution of this matter are expected to be charged to the Partnership.

**Monica Ortiz, on behalf of herself and other individuals similarly situated v. GPB Capital Holdings LLC; Automile Holdings, LLC d/b/a Prime Automotive Group; David Gentile; David Rosenberg; Philip Delzotta; Joseph Delzotta; and other affiliated entities and individuals (New York Supreme Court, Nassau County, Case No. 604918/2020)**

In May 2020, plaintiffs filed a class action in New York Supreme Court, Nassau County against GPB, Automile Holdings LLC d/b/a Prime Automotive Group, David Gentile, David Rosenberg, Philip Delzotta, Joseph Delzotta, and other affiliated entities and individuals. In November 2020, the plaintiffs voluntarily discontinued the action only as against David Rosenberg. The Complaint alleges deceptive and misleading business practices of the named Defendants with respect to the marketing, sale, and/or leasing of automobiles and the financial and credit products related to the same throughout the State of New York. Plaintiffs allege defendants' collection of fraudulent rebates exceeds $1,000,000. The plaintiffs are seeking class-wide injunctive relief requiring defendant dealerships to disclose financing options, rebates, interest rates, and risk of repossession; monetary and punitive damages for violation of New York General Business Laws, unjust enrichment, negligent misrepresentation, and breach of contract; and also seek costs and fees. Any potential losses associated with this matter cannot be estimated at this time.

**In re: GPB Capital Holdings, LLC Litigation (formerly, Adam Younker, Dennis and Cheryl Schneider, Elizabeth Plaza, and Plaza Professional Center Inc. PFT Sharing v. GPB Capital Holdings, LLC, et al. and Peter G. Golder, individually and on behalf of all others similarly situated, v. GPB Capital Holdings, LLC, et al. (New York Supreme Court, New York County, Case No. 157679/2019)**

In May 2020, plaintiffs filed a consolidated class action complaint in New York Supreme Court, New York County against GPB, GPB Holdings, GPB Holdings II, GPB Holdings III, the Partnership, GPB Cold Storage, GPB Waste Management, David Gentile, Jeffrey Lash, Macrina Kgil, a/k/a Minchung Kgil, William Edward Jacoby, Scott Naugle, Jeffry Schneider, AAS, Ascendant, and Axiom Capital Management. The Complaint alleges, among other things, that the offering documents for certain GPB-managed funds, include material misstatements and omissions. The plaintiffs are seeking disgorgement, unspecified damages, and other equitable relief. Any potential losses associated with this matter cannot be estimated at this time.

**Phillip J. Cadez, et al. v. GPB Capital Holdings, LLC, et al. (Delaware Chancery Court, Case No. 2020-0402)** 

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In May 2020, plaintiffs filed a derivative action in Delaware Court of Chancery against GPB, David Gentile, Jeffrey Lash, and Jeffry Schneider. The complaint also names GPB Holdings, LP, and the Partnership as nominal defendants. Previously, plaintiffs had filed a complaint to compel inspection of books and records, which had been dismissed without prejudice.

In the current action, plaintiffs are alleging breaches of fiduciary duties and/or the aiding and abetting of those breaches, unjust enrichment, and with regard to GPB, breach of the Partnerships' Limited Partnership Agreements. Plaintiffs are seeking unspecified damages based on the causes of action pled, equitable relief in the form of a directive to remove GPB as the General Partner of GPB Holdings, LP and the Partnership, a constructive trust, costs of the action (including attorneys' fees), and other declaratory and equitable relief. Any potential losses associated with this matter cannot be estimated at this time.

**Jeff Lipman and Carol Lipman, derivatively on behalf of GPB Holdings II, LP and GPB Automotive Portfolio, LP v. GPB Capital Holdings, LLC, et al. (Delaware Chancery Court, Case No. 2020-0054)**

In January 2020, plaintiffs filed a derivative action in Delaware Court of Chancery against GPB, David Gentile, Jeffrey Lash, and Jeffry Schneider. The Complaint alleges breaches of fiduciary duty and/or aiding and abetting breaches of fiduciary duty against each of the defendants, and declaratory relief from the Court related to allegations of fraud, gross negligence, and willful misconduct. The plaintiffs seek unspecified damages and declaratory forms of relief. Any potential losses associated with this matter cannot be estimated at this time.

**Mary Purcell, et al. v. GPB Holdings II, LP, et al. (Cal. Supreme Court, Orange County, Case No. 30-2019-01115653-CU-FR-CJC)**

In December 2019, plaintiffs filed a civil action in Superior Court in Orange County, California against Rodney Potratz, FSC Securities Corporation, GPB Holdings II, the Partnership, GPB, David Gentile, Roger Anscher, William Jacoby, Jeffrey Lash, Ascendant, Trevor Carney, Jeffry Schneider, and DOES 1 - 15, inclusive. An Amended Complaint was filed on or about June 10, 2020. In the Amended Complaint, Plaintiffs allege breach of contract against GPB Capital and DOES 1-15, inclusive; statutory and common law fraud against all defendants; breach of fiduciary duty against all defendants; and negligence against all defendants. Plaintiffs allege losses in excess of $4.8 million and are seeking rescission, compensatory damages, unspecified equitable relief and punitive damages, and interest and attorneys' fees in unspecified amounts. Any potential losses associated with this matter cannot be estimated at this time.

**Barbara Deluca and Drew R. Naylor, on behalf of themselves and other similarly situated Limited Partners, v. GPB Automotive Portfolio, LP et al. (S.D.N.Y., Case No. 19-CV-10498)**

In November 2019, plaintiffs filed a putative class action complaint in the United States District Court for the Southern District of New York against GPB, GPB Automotive Portfolio, LP, the Partnership, David Gentile, Jeffery Lash, AAS, Axiom, Jeffry Schneider, Mark Martino, and Ascendant. The Complaint alleges fraud and material omissions and misrepresentations to induce investment and losses in excess of $1.27 billion. The plaintiffs are seeking disgorgement, compensatory, consequential, and general damages; disgorgement; rescission; restitution; punitive damages; and the establishment of a constructive trust. Any potential losses associated with this matter cannot be estimated at this time.

**Kinnie Ma Individual Retirement Account, et al., individually and on behalf of all others similarly situated, v. Ascendant Capital, LLC, et al. (W.D. Texas, Case No. 19-CV-01050)**

In October 2019, plaintiffs filed a putative class action in the United States District Court for the Western District of Texas against GPB, certain GPB-managed limited partnerships, including the Partnership, for which GPB is the General Partner, AAS, and Ascendant, as well as certain principals of the GPB-managed limited partnerships, auditors, broker-dealers, a fund administrator, and other individuals. The Complaint alleges violations and/or aiding and abetting violations of the Texas Securities Act, fraud, substantial assistance in the commission of fraud, breach of fiduciary duty, substantial assistance in breach of fiduciary duty, and negligence. Plaintiffs allege losses in excess of $1.8 billion and are seeking compensatory damages in an unspecified amount, rescission, fees and costs, and class certification. Any potential losses associated with this matter cannot be estimated at this time.

On June 1, 2022, the Western District of Texas Court consolidated this matter with Barasch v. GPB Capital, et al. (19-cv-01079); only the Kinnie Ma case continues, including the claims at issue in the Stanley S. and Millicent R Barasch Trust and Loretta Dehay (as described below), which were consolidated under the Kinnie Ma docket number. On June 23, 2022, the Court denied Defendants David

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Gentile and Jeffry Schneider's motion to stay the case pending the resolution of the criminal case, U.S. v. Gentile, et al., No. 1:21-CR-54-DG (E.D.N.Y. Jan. 29, 2021). Plaintiffs filed a Consolidated Complaint on July 1, 2022; defendants filed answers thereafter. As of the beginning of 2023, this case remains active and discovery is proceeding.

**Stanley S. and Millicent R. Barasch Trust and Loretta Dehay, individually and on behalf of others similar situated v. GPB Capital Holdings, LLC, et al. (W.D. Texas, Case No. 19 Civ. 01079)**

In November 2019, plaintiffs filed a putative class action in the United States District Court for the Western District of Texas against, the Partnership and other GPB-managed limited partnerships, AAS, and Ascendant, as well as certain principals of the GPB-managed funds, auditors, a fund administrator, and individuals. (The original Complaint named Millicent R. Barasch as the plaintiff, but since her death, her trust has successfully moved to substitute for all purposes in this litigation.) The Complaint alleges civil conspiracy, fraud, substantial assistance in the commission of fraud, breach of fiduciary duty, substantial assistance in the breach of fiduciary duty, negligence, violations of the Texas Securities Act, and aiding and abetting violations of the Texas Securities Act. Plaintiffs allege losses in excess of $1.8 billion and are seeking compensatory and other unspecified damages, declaratory relief, rescission, and costs and fees. Any potential losses associated with this matter cannot be estimated at this time.

On June 1, 2022, the Western District of Texas Court consolidated this matter into Kinnie Ma v. Ascendant Capital, LLC et al. (19-cv-01050). The claims at issue in this case continue under the Kinnie Ma docket number.

**Concorde Investment Services, LLC v. GPB Capital Holdings, LLC, et al. (New York Supreme Court, New York County, Index No. 650928/2021)**

In February 2021, Concorde Investment Services, LLC filed suit in New York State Supreme Court, New York County against GPB, certain limited partnerships for which GPB is the General Partner, and others. The Complaint alleges breaches of contract, fraudulent inducement, negligence, interference with contract, interference with existing economic relations, interference with prospective economic advantage, indemnity, and declaratory relief, and includes a demand for arbitration. Plaintiff's demands include compensatory damages of at least $5.0 million, punitive damages, and a declaration that Concorde is contractually indemnified by the Defendants.

In October 2021, the Supreme Court ordered the action be stayed so that the Plaintiffs could pursue claims in arbitration. By the same Order, the Court denied the Defendants' motions to dismiss the Complaint. Any potential losses associated with this action cannot be estimated at this time.

**Jeffry Schneider v. GPB Capital Holdings, LLC et al., Case No. 2021-0963 (Court of Chancery, DE)**

In November 2021, Plaintiff, a former affiliate of GPB Capital Holdings, LLC, filed a Complaint in Chancery Court in Delaware against GPB Capital Holdings, LLC and each of the funds it manages, including the Partnership, seeking a ruling that he is contractually entitled to mandatory advancement of legal fees by GPB Capital with respect to several lawsuits in which Plaintiff is named. On March 24, 2022, the Chancery Court issued a bench ruling, finding that Plaintiff was entitled to advancement of his legal fees from GPB Capital. Any potential losses associated with this action cannot be estimated at this time.

**David Gentile v. GPB Capital Holdings, LLC et al., Case No. 2021-1102-SG (Court of Chancery, DE)**

On or about December 20, 2021, Plaintiff David Gentile, founder and former Chief Executive Officer of GPB Capital Holdings, LLC, filed a Complaint in Chancery Court in Delaware against GPB Capital Holdings, LLC and each of the funds it manages, including the Partnership, seeking entry of an Order governing his contractual entitlement to advancement of legal fees by GPB Capital with respect to several lawsuits in which Plaintiff is named. On April 12, 2022, the Chancery Court entered the parties' Stipulation and Advancement Order governing Plaintiff's entitlement to advancement of attorneys' fees and expenses. Any potential losses associated with this action cannot be estimated at this time.

***Dealership Related Litigation***

**AMR Auto Holdings – SM, LLC d/b/a Prime Subaru Manchester v. Subaru of New England, Inc. (New Hampshire Motor Vehicle Industry Board, Case No. 2021-01)**

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Prime Subaru Manchester has a franchise agreement ("Subaru Dealer Agreement") with Subaru of New England, Inc., the distributor of Subaru vehicles in New Hampshire ("SNE"), pursuant to which Prime Subaru Manchester owns and operates a Subaru dealership in Manchester, New Hampshire. On September 13, 2021, Prime Subaru Manchester notified SNE that it proposed to transfer substantially all of the assets of its dealership to Group 1, pursuant to the purchase agreement. To comply with the requirements of the Subaru Dealer Agreement and New Hampshire law, Prime Subaru Manchester asked for SNE's consent to the transfer to Group 1. SNE refused to approve the transfer to Group 1 (the "Turndown"). On December 10, 2021, Prime Subaru Manchester, as Protestor, filed a Protest action against SNE, as Respondent, with the New Hampshire Motor Vehicle Industry Board (the "NHMVIB") (Case No. 2021-01), claiming that the Turndown by SNE breached the Subaru Dealer Agreement and New Hampshire law, and seeking a finding and ruling from the NHMVIB, among others, that SNE unreasonably and in violation of law withheld its consent to the proposed transfer of the assets of Prime Subaru Manchester to Group 1, as well as awarding costs and attorney's fees to Prime Subaru Manchester.

After discovery by both sides, the NHMVIB held a final hearing on the Protest action on August 2, 2022. On August 10, 2022, the NHMVIB deliberated and a Final Order on Hearing was issued by the NHMVIB on August 12, 2022 in which it was ordered that Prime Subaru Manchester's Protest was granted because SNE unreasonably withheld consent of the sale of the dealership to Group 1 in violation of New Hampshire law, and SNE's claims were denied.

On or about September 1, 2022, SNE filed with the NHMVIB a Motion for Rehearing, asking the NHMVIB to reconsider its Final Order in favor of Prime Subaru Manchester. On September 12, 2022, Prime Subaru Manchester filed a Reply to SNE's Motion for Rehearing with the NHMVIB. On October 4, 2022, the NHMVIB deliberated and, on October 11, 2022, issued an Order denying SNE's Motion for Rehearing. On November 10, 2022, SNE filed an appeal with the Hillsborough Northern District Superior Court of New Hampshire, seeking to overturn the Final Order of the NHMVIB and to obtain an order that SNE's Turndown was in compliance with New Hampshire law. Prime Subaru Manchester intends to contest the appeal vigorously.

In the interim, pending the resolution of the appeal filed by SNE, the Partnership will continue to operate the dealership until the earlier of an ownership transfer or November 2023, which is twenty four months from the closing date, at which time, any cost associated with closing the dealership and liquidating the assets will be borne by Group 1. If a resolution of the Protest and completion of the sale of assets to Group 1 occurs prior to November 2023, the remaining estimated net cash inflows from the Prime Subaru Manchester operation will be reversed from the liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statements of Net Assets in Liquidation by a corresponding amount, however, any such reversals are not expected to have a material impact on the Partnership's Consolidated Financial Statements.

***Actions asserted by GPB***

**GPB Capital Holdings, LLC et al. v. Patrick Dibre (New York Supreme Court, Nassau County, Case No. 606417/2017)**

In July 2017, GPB, the Partnership, GPB Holdings I, LP, GPB Holdings Automotive, LLC, and GPB Portfolio Automotive, LLC filed suit in New York State Supreme Court, Nassau County against Patrick Dibre, one of their former operating partners, for breach of contract, breach of fiduciary duty, fraud and conversion arising out of the Defendant's sale of certain automobile dealerships to the GPB Plaintiffs. Mr. Dibre answered GPB's Complaint, and asserted counterclaims alleging breach of contract and unjust enrichment. Plaintiffs have since filed amended complaints, narrowing the prior claims to focus on certain specific provisions in the documents governing the sale of the dealerships at issue. The plaintiffs seek damages based on the value of the subject dealerships related to the alleged breach, and also seek an order of specific performance compelling Mr. Dibre to fulfill other obligations under the governing documents. Any potential losses associated with this matter cannot be estimated at this time.

Certain of these outstanding matters include speculative, substantial or indeterminate monetary amounts. We record a liability when we believe that it is probable a loss will be incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. We evaluate developments in our legal matters that could affect the amount of liability that has been previously accrued, if any, and the matters and related reasonably possible losses disclosed, and make adjustments as appropriate. Significant judgement is required to determine both the likelihood of there being and the estimated amount of a loss related to such matters. Under the liquidation basis of accounting pursuant to ASC 205-30, we continue to evaluate these legal matters and potential future losses in accordance with FASB ASC 450, Contingencies.

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***Item 4. Mine Safety Disclosures***

Not applicable.

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**PART II**

***Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.***

**MARKET INFORMATION**

The Partnership offered $750.0 million in Units, and has issued $682.9 million in total of Class A, Class A-1, Class B, and Class B-1 Units, for which, there is currently no public market, nor can we give any assurance that one will develop. Each class was offered and sold in transactions exempt from registration under the Securities Act under Section 4(a)(2) and Regulation D under the Securities Act. As of December 31, 2022, the approximate number of holders of Class A Units was 3,571, of Class A-1 Units was 2,444, of Class B Units was 500, and of Class B-1 Units was 335.

The Partnership was required, under federal securities laws, to file a Form 10 Registration Statement and thereafter file periodic reports pursuant to Section 12(g) of the Exchange Act after the end of the first fiscal year in which it first had more than 2,000 holders of record of any Class of Units. The Partnership had more than 2,000 holders of record of Class A Units, and more than 2,000 holders of record of Class A-1 Units, for several years prior to the initial filing of the Registration Statement on Form 10 in May 2021. As noted under the heading "Legal Proceedings" in Item 3, and elsewhere in this Form 10-K, the SEC Division of Enforcement has filed a lawsuit against the General Partner of the Partnership. One of the SEC's allegations against the General Partner was the failure to timely file reports pursuant to Section 12(g) of the Exchange Act.

Because our Units have been acquired by investors in one or more transactions "not involving a public offering," our Units are "restricted securities" as defined under Rule 144 of the Securities Act and may be required to be held indefinitely. Our Units generally may not be sold, transferred, assigned, pledged or otherwise disposed of unless (i) our consent is granted, and (ii) the Units are registered under applicable securities laws or specifically exempted from registration (in which case the Limited Partner may, at our option, be required to provide us with a legal opinion, in form and substance satisfactory to us, that registration is not required). Accordingly, an investor must be willing to bear the economic risk of investment in the Units until the Partnership is liquidated. From August 2018 through the date of this filing, all Unit transfers are currently on a moratorium with no planned relaxing of this hold. Nevertheless, any and all transfers are allowable at our discretion.

As of December 31, 2022, and through the date of this filing, the Partnership has 7,884.08 Class A Limited Partnership Units, 3,543.39 Class A-1 Limited Partnership Units, 1,504.04 Class B Limited Partnership Units and 589.08 Class B-1 Limited Partnership Units issued and outstanding. All classes have the same rights and the only distinction between classes are the Managerial Assistance fees and Selling and Service fees which are outlined in "Item 13. Certain Relationships and Related Transactions, and Director Independence".

There were no contributions for the years ended December 31, 2022, 2021 and 2020.

The proceeds received from issuance were used in accordance with the Partnership's investment objectives and related expenses outlined in the LPA.

There were no redemptions for the years ended December 31, 2022, 2021 and 2020.

**DISTRIBUTION POLICY**

After payment of any tax distributions and payment and reservation of all amounts deemed necessary by the General Partner in its sole discretion, the Partnership has, at times since inception, made Class A and Class A-1 ordinary cash distributions at a rate of 8% of each Limited Partners' adjusted Units per annum through 2018. Adjusted Units are calculated based on gross capital contributions of $50,000 less 11% selling fees equaling 1 adjusted unit. For example, if a Limited Partner subscribed into Class A for $50,000 with 11% selling fees, resulting in a net capital contribution of $44,500, that investor would receive a yearly distribution of $4,000. The calculation for this Limited Partner is 1 unit multiplied by the 8% distribution rate. Class B and Class B-1 investors have received ordinary cash distributions at a rate of 8.7% of gross capital contributions. As of December 31, 2022 and through the date of this filing, none of the Limited Partners have reached the second tier of priority noted below (capitalized terms herein shall have the definition in accordance with the LPA and PPM).

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● First, 100% to the Limited Partners, in proportion to their respective Net Capital Contributions, until each Limited Partner has received cumulative distributions equal to such Limited Partners' Net Capital Contribution Amount;

● Second, 100% to the Limited Partners, in proportion to their respective Unreturned Capital Contributions, until each Limited Partner has received cumulative distributions equal to such Limited Partners' aggregate Capital Contributions;

● Third, 100% to the Limited Partners, in proportion to their respective Accrued Preferred Returns, until each Limited Partner has received cumulative distributions equal to the sum of such Limited Partners' aggregate Capital Contributions and Limited Partner Preferred Return;

● Fourth, 100% to the Special Partner until the cumulative distributions made to the Special Partner equal 20% of the sum of all amounts distributed to each Limited Partner in excess of such Limited Partners' Net Capital Contribution Amount and to the Special Partner; and

● Thereafter, amounts available for distribution by the Partnership will be distributed 80% to the Limited Partners and 20% to the Special Partner, with such amounts distributed to the Limited Partners in proportion to their respective aggregate Capital Contributions.

In the first quarter of 2019, the Partnership transitioned to a quarterly dynamic distribution rate, paid in arrears. The General Partner determines distribution amounts, if any, following the end of the calendar quarter, and generally paid out any approved distributions prior to the end of the subsequent quarter. Distribution rates under this policy have historically fluctuated from quarter to quarter based on, among other things, the performance of the Partnership. As a result, Limited Partners should not expect future distribution rates to be consistent at the same rate as the past ones. In accordance with the first step of the Partnership's distribution waterfall, all of the Partnership's distributions made to date have been a return of capital contributions made to the Partnership by investors. The source of these return of capital distributions have included, and may in the future continue to include, cash flow from operations and investor contributions. As of February 2021, all distributions, if any, need to be approved by the Monitor until further notice.

As of December 31, 2021, there were state tax withholding distributions accrued on behalf of the Limited Partners of $6.9 million included as distributions payable for tax withholding on the Statements of Net Assets in Liquidation.

During the year ended December 31, 2022, there were state tax withholding distributions made on behalf of the Limited Partners of $1.4 million which is reflected as tax distributions made in excess of liabilities recorded on the Consolidated Statement of Changes in Net Assets in Liquidation.

As of December 31, 2022, there were state tax withholding distributions accrued on behalf of the Limited Partners of $1.4 million included as a component of liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statement of Net Assets in Liquidation.

Net profits and net losses are to be allocated to the Limited Partners according to their capital accounts in a manner sufficient to cause each Limited Partners' capital account to equal the amounts such Limited Partners would receive upon the liquidation of the Partnership. Net profits and net losses are determined on an accrual basis of accounting in accordance with US GAAP.

***Item 6. [Reserved]***

***Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations***

*The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes and the other financial information included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those set forth under "Item 1A. Risk Factors" and elsewhere in this Annual Report on Form 10-K, our actual results may differ materially from those anticipated in these forward-looking statements.* 

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*For purposes of this Management's Discussion and Analysis of Financial Condition and Results of Operations section, we use the terms "the Partnership," "we", "us", "our" or "Registrant" as reference to the business of GPB Automotive Portfolio, LP and its consolidated subsidiaries, unless otherwise indicated.*

**Financial Condition, Results of Operations, and Liquidity**

**OVERVIEW**

The Partnership is a holding company which was organized as a Delaware limited partnership on May 27, 2013, and commenced operations on that date. GPB, a Delaware limited liability company and registered investment adviser, is the Partnership's General Partner pursuant to the terms of the Fifth Amended and LPA dated April 27, 2018 (as the same may be amended from time to time). Pursuant to the LPA, GPB conducts and manages our business. Robert Chmiel, GPB's Chief Executive Officer and Chief Financial Officer, currently serves as the sole manager of GPB under the term of GPB's limited liability company agreement. However, as further described in "Item 1. Business" GPB has entered into a management services agreement with GPB's wholly owned subsidiary, Highline, pursuant to which Highline provides certain management services to GPB to assist GPB in fulfilling GPB's duties as the Partnership's General Partner.

On February 11, 2021, the EDNY Court issued an Order, appointing the Monitor who was granted the authority to approve or disapprove proposed material corporate transactions by GPB, the Partnership or its subsidiaries. The Monitor, pursuant to the original Order and an April 14, 2021 Amended Order, is required to assess the Partnership's operations and business, and make recommendations to the EDNY Court, which may include continuation of the operations subject to his monitoring, or a liquidation of assets, or filing for reorganizing in bankruptcy. See "Item 3. Legal Proceedings" for additional information.

Until the sale of substantially all of the Partnership's assets described below under "Sale of Substantially All of the Partnership's Assets," we owned and operated multiple retail automotive dealerships, including in most cases their related real estate, and sought to further develop their operations to increase cash flow and income from operations on behalf of the Limited Partners.

We report all of our businesses as a single segment for accounting purposes based on the financial information that is available and evaluated by the CODM in deciding how to allocate resources and in assessing performance of the Partnership.

Prior to the sale of substantially all of our assets, our principal business was the retail sale of automobiles in the northeastern United States. We offered a diversified range of automotive products and services, including new vehicles, used vehicles, parts and service and automotive finance and insurance products, which included vehicle service and other protection products, as well as the arranging of financing for vehicle purchases through third party finance sources. We continue to own and operate one dealership in Manchester, Prime Subaru Manchester, pending completion of the currently contracted sale of that dealership.

We originally planned to hold our existing dealerships for the long-term. However, in light of the legal matters facing the Partnership, we took advantage of market conditions to exit the business via the Group 1 Sale.

***Sale of Substantially All of the Partnership's Assets***

On September 12, 2021, the Partnership and certain of its direct and indirect subsidiaries entered into a Purchase Agreement with Group 1. Pursuant to the Purchase Agreement, the Partnership agreed to sell substantially all of the assets of the Partnership, including, but not limited to the Partnership's real property (including entities owning real property), vehicles, parts and accessories, goodwill, permits, intellectual property and substantially all contracts, that relate to their automotive dealership and collision center businesses, subject to obtaining the relevant manufacturer approvals, and excluding certain assets such as cash and certain receivables. The Purchase Agreement was approved by GPB (via Highline) and the Monitor (as defined below).

In November 2021, the Partnership obtained the necessary manufacturer approvals and completed the sale of substantially all of its assets, including real estate, three collision centers, and 27 of its 29 dealerships to Group 1. In December 2021, the Partnership obtained the necessary manufacturer approval and completed the sale of its 28th dealership and the related real estate to a third-party. The aggregate consideration for all of the 28 dealership purchases and real-estate was $824.9 million after taking into account the payoff of floorplan financing and mortgage debt outstanding at the time of the Group 1 Sale. The aggregate consideration was subject to customary post-close adjustments as defined in the Purchase Agreement.

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The 29th dealership, Prime Subaru Manchester, has not received approval for transfer from its Subaru distributor in New Hampshire, however, the closing consideration of $33.4 million was put in escrow by Group 1 and was released to the Partnership in April 2022. The Partnership continues to own and operate Prime Subaru Manchester while awaiting approval of the transfer. See "Item 3. Legal Proceedings" for more information on the Prime Subaru Manchester transaction.

The foregoing description of the Purchase Agreement is a summary only and is qualified in its entirety by reference to the complete text of the Purchase Agreement, which is filed as Exhibit 2.1 in "Item 15. Financial Statements and Exhibits."

Included in the aggregate consideration of $824.9 million for the sale of 28 dealerships and real-estate includes $763.6 million received directly by GPB Prime and was therefore, restricted from distribution to the Partnership or any of its affiliates pursuant to the terms of the M&T Credit Agreement. On December 28, 2021, the Partnership and GPB Prime reached an agreement in principle with M&T Bank to allow for distribution to the Partnership and GPB Holdings II, LP, of a sum of $570.0 million of which $188.8 was distributed to GPB Holdings II, LP, affiliated entity to the Partnership which holds a 33.5% non-controlling interest in GPB Prime.

In January 2022, the Partnership and GPB Prime entered into a Twelfth Amendment (the "Amendment") to the M&T Credit Agreement. The Amendment, among other things, reaffirmed the agreement in principle which (i) allows for distribution to the Partnership and GPB Holdings II, LP of $570.0 million representing a portion of the proceeds received from the Group 1 Sale; (ii) changes the definition of floor plan borrowers to mean Prime Subaru Manchester; (iii) decreases the credit limit that may be borrowed for vehicle floorplan financing from $360.0 million to up to $8.8 million; and (iv) replaces the benchmark interest rates for borrowings from the London Interbank Offered Rate (LIBOR) to the SOFR subject to certain adjustments in the Amendment. The M&T Credit Agreement was amended primarily to reflect that we only own one new vehicle dealership and no longer require the same amount of debt financing as was previously in place. Proceeds from the Group 1 Sale were used in part to repay all other amounts outstanding under the M&T Credit Agreement.

***Plan of Liquidation***

Concurrent with reaching an agreement in principle with M&T Bank on December 28, 2021, to allow for distributions to the Partnership and GPB Holdings II, LP, Highline management, and on behalf of GPB, caused us to commence a plan to liquidate the Partnership's remaining net assets and wind up the Partnership. Highline management reached its decision to commence the Plan of Liquidation because of, among other things, the advanced stage of the Group 1 Sale, the agreement in principle with M&T Bank to allow for the $570.0 million distribution, and that no further plans to deploy capital in any other investments were contemplated. In accordance with US GAAP, liquidation of the Partnership was thereby determined to be imminent, resulting in the need to adopt the liquidation basis of accounting as of December 28, 2021.

The Board formally approved the commencement of the Plan of Liquidation at the Board meeting held on February 3, 2022. The Board concluded that it was appropriate to adopt liquidation accounting in accordance with US GAAP for financial reporting purposes, using a "convenience date" of December 31, 2021.

The Partnership cannot predict the timing or amount of any distributions to its Limited Partners, as uncertainties exist as to the ultimate amount of expenses associated with implementing its monetization strategy, liabilities, operating costs and amounts to be set aside for claims, obligations and provisions during the liquidation and winding-up process, the timing and outcome of the pending litigation, and the related timing to complete such transactions and the overall liquidation process. Nevertheless, it is expected that the liquidation will be complete by December 31, 2024. Please see "Item 1A. Risk Factors."

***Following the Implementation of the Plan of Liquidation***

Highline's approval to commence the Plan of Liquidation and to dissolve substantially all of the net assets of the Partnership on December 28, 2021, requires our financial statements to be prepared in accordance with the liquidation basis of accounting as defined in the FASB ASC 205-30 Financial Statement Presentation, Liquidation Basis of Accounting. Liquidation is considered imminent when the likelihood is remote that we will return from liquidation and either (a) the Plan of Liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the Plan of Liquidation will be blocked by other parties, or (b) the Plan of Liquidation is being imposed by other forces (for example, involuntary bankruptcy).

The liquidation basis of accounting differs significantly from the going concern basis, as summarized below.

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Under the liquidation basis of accounting, the Consolidated Balance Sheet and Consolidated Statements of Operations, Partners' Capital and Cash Flows are no longer presented.

The liquidation basis of accounting requires a statement of net assets in liquidation, a statement of changes in net assets in liquidation and all disclosures necessary to present relevant information about our expected resources throughout the liquidation period. The liquidation basis of accounting may only be applied prospectively from the date liquidation becomes imminent and the initial statement of changes in net assets in liquidation may present only changes in net assets that occurred during the period since that date.

Our consolidated financial statements as of and for the years ended December 31, 2022 and 2021, include Consolidated Statements of Net Assets in Liquidation as of December 31, 2022 and 2021, a Consolidated Statement of Changes in Net Assets in Liquidation for the year ended December 31, 2022, and all disclosures necessary to present relevant information about our expected resources in liquidation. Because the approval of our Plan of Liquidation occurred on December 28, 2021, and we adopted December 31, 2021, as a more convenient date to commence liquidation accounting, the presentation of changes in net assets in liquidation from December 28, 2021 to December 31, 2021 would not provide meaningful information to users of the financial statements and therefore, no such consolidated financial statement has been presented herein. As required by US GAAP, we have presented Consolidated Statements of Operations, Partners' Capital, and Cash Flows on a going concern basis up to and including December 31, 2021.

Under the liquidation basis of accounting, our assets are measured at their estimated net realizable value, or liquidation value, which represents the amount of their estimated cash proceeds or other consideration from liquidation, based on current contracts, estimates and other indications of sales value, and includes assets held for sale. In developing these estimates, we utilized the expertise of members of the Board, and forecasts generated by our management. Estimates for the liquidation value of Prime Subaru Manchester were determined through a combination of historical and projected business cash flows. All estimates by nature involve a large degree of judgement and sensitivity to the underlying assumptions.

Under the liquidation basis of accounting, we recognize liabilities as they would have been recognized under the going concern basis as adjusted for the timing assumptions related to the liquidation process and they will not be reduced to expected settlement values prior to settlement. Our liabilities are derecognized when we pay the obligation or when we are legally released from being the primary obligor under the liability.

The valuation of our assets and liabilities, as described above, represents estimates, based on present facts and circumstances, of the net realizable value of the assets and costs associated with carrying out the Plan of Liquidation. The actual values and costs associated with carrying out the Plan of Liquidation may differ from amounts reflected in the accompanying consolidated financial statements because of the Plan of Liquidation's inherent uncertainty. These differences may be material. In particular, these estimates will vary with the length of time necessary to complete the Plan of Liquidation. It is currently anticipated that a majority of the assets we owned on the date the Plan of Liquidation was approved by Highline will be sold by June 30, 2024, with liquidation complete by December 31, 2024, however, no assurances can be provided that this date will be met. This date was determined through management consultation with the Board, consultation with the Monitor and the GPB's external counsel and contemplates such matters as the sale of Prime Subaru Manchester, the timing of Mr. Gentile's criminal trial and outcome and the settling of pending litigation as the main components driving the estimate on timing of complete liquidation. Any delays in the timing of the resolution of these matters could significantly delay both the completion date and the amounts available for liquidation.

Net assets in liquidation represents the estimated liquidation value to holders of Units upon liquidation. It is not possible to predict with certainty the timing or aggregate amount which may ultimately be distributed to our Limited Partners and no assurance can be given that the distributions will equal or exceed the estimate presented in these Consolidated Financial Statements.

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**RESULTS OF OPERATIONS**

In light of the adoption of Liquidation Basis of Accounting as of December 31, 2021, comparisons of the year ended December 31, 2022 to the prior year ended December 31, 2021 are not meaningful, and therefore we no longer discuss the changes in results of our operations.

Prior to the adoption of our Plan of Liquidation, the Partnership's core strategy was to maximize value to the Limited Partners through dealership operations that were organized into geographic market-based dealership groups.

The results of operations includes the operating results of our dealerships up to the date such dealerships were sold to third parties. The following table summarizes the results of our operations for the years ended December 31, 2021 and 2020, presented on the going concern basis of accounting.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** | **2021 vs 2020** | **2021 vs 2020** |
| <br>(Dollars in thousands) | **2021** | **2020** | **Increase** <br>**(Decrease)** | **% Increase** <br>**(Decrease)** |
| Revenues: |  |  |  |  |
| &nbsp;&nbsp;New vehicle retail | $924310 | $1228612 | $(304302) | (24.8)% |
| &nbsp;&nbsp;Used vehicle retail | 552830 | 687444 | (134614) | (19.6)% |
| &nbsp;&nbsp;Used vehicle wholesale | 93567 | 98017 | (4450) | (4.5)% |
| &nbsp;&nbsp;Service, body, and parts | 207455 | 268764 | (61309) | (22.8)% |
| &nbsp;&nbsp;Finance and insurance | 77365 | 94412 | (17047) | (18.1)% |
| Total Revenues | 1855527 | 2377249 | (521722) | (21.9)% |
| Gross profit: |  |  |  |  |
| &nbsp;&nbsp;New vehicle retail | $94578 | $79725 | $14853 | 18.6% |
| &nbsp;&nbsp;Used vehicle retail | 45877 | 48694 | (2817) | (5.8)% |
| &nbsp;&nbsp;Used vehicle wholesale | 11024 | 3718 | 7306 | 196.5% |
| &nbsp;&nbsp;Service, body, and parts | 120153 | 151929 | (31776) | (20.9)% |
| &nbsp;&nbsp;Finance and insurance | 77365 | 94412 | (17047) | (18.1)% |
| Total Gross profit | 348997 | 378478 | (29481) | (7.8)% |
| Gross profit margin percentage: |  |  |  |  |
| &nbsp;&nbsp;New vehicle retail | 10.2% | 6.5% | 3.7% |  |
| &nbsp;&nbsp;Used vehicle retail | 8.3% | 7.1% | 1.2% |  |
| &nbsp;&nbsp;Used vehicle wholesale | 11.8% | 3.8% | 8.0% |  |
| &nbsp;&nbsp;Service, body, and parts | 57.9% | 56.5% | 1.4% |  |
| &nbsp;&nbsp;Finance and insurance | 100.0% | 100.0% | —% |  |
| Total Gross profit margin | 18.8% | 15.9% | 2.9% |  |
| Operating expenses | $700 | $357812 | $(357112) | (99.8)% |
| Operating income | 348297 | 20666 | 327631 | 1585.4% |
| Other income (expense), net | 3611 | (28100) | 31711 | 112.9% |
| Net income (loss) | $351908 | $(7434) | $359342 | (4833.8)% |

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**Dispositions**

The comparison of our results of operations for the years ended December 31, 2021 and 2020 is primarily influenced by the disposition of our dealerships pursuant to the sale of substantially all of our operating assets including real estate to Group 1. We did not acquire any dealerships during 2021.

Net proceeds received from dispositions, as well as other certain disposition-related information is presented below:

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| | | | |
|:---|:---|:---|:---|
| | **Years Ended December 31,** | **Years Ended December 31,** | **Years Ended December 31,** |
| <br>(Dollars in thousands) | **2022** | **2021** | **2020** |
| Number of dealerships disposed |  | 34 | 14 |
| Number of franchises disposed |  | 18 | 26 |
| Net proceeds from disposition of dealerships | $34403 | $629580 | $49479 |

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Proceeds received from the sale of dealerships is net of the repayment of the related floor plan debt.

Prime Subaru Manchester has not received approval for transfer from its Subaru distributor in New Hampshire. However, the closing consideration of $33.4 million was put in escrow by Group 1 and was released to the Partnership on April 12, 2022. The Partnership continues to own and operate Prime Subaru Manchester while awaiting approval of the ownership transfer.

Additionally, proceeds of nil, $285.2 million and $74.2 million for the sale of property and equipment (including related real estate) was received in 2022, 2021 and 2020, respectively.

**Comparison of the years ended December 31, 2021 and 2020**

***Revenues***

For the years ended December 31, 2021 and 2020, the Partnership generated revenues of $1,855.5 million and $2,377.2 million, respectively. This represents a decrease of $521.7 million, or 21.9%, in total revenue across all revenue streams.

The decrease in total revenue, across all revenue streams, was primarily attributed to the Partnership's disposition of three of its dealership groups, FX Caprara, Ron Carter, and Kenny Ross Auto Group ("KRAG") in September and October 2020, which accounted for revenue reductions of $105.9 million, $140.5 million, and $179.2 million, respectively totaling $425.6 million. In addition, there was approximately a $214.7 million decrease in revenue, attributed to the disposition of 28 dealerships in November and December 2021. These reductions were offset by $120.9 million in incremental revenue attributed to same store dealerships through the date of disposition pursuant to the Group 1 Sale, as a result of increased demand after the peak of the COVID-19 pandemic.

***Gross Profit***

For the years ended December 31, 2021 and 2020, our gross profit was $349.0 million and $378.5 million and our gross profit margin was 18.8% and 15.9%, respectively. This represents a decrease of $29.5 million, or 7.8%, in total gross profit across all revenue streams and an increase in gross profit margin of 2.9 percentage points.

The decrease in gross profit was primarily attributed to the Partnership's disposition of the FX Caprara, Ron Carter, and KRAG dealerships in September and October 2020 which account for $54.6 million of the overall decrease. In addition, the decrease is also attributable to the disposition of 28 dealerships in November and December of 2021, which accounted for a gross profit reduction of approximately $10.8 million. These reductions were offset by the increase in gross profit, driven by the increase in revenue, attributed to same store dealerships through the date of disposition pursuant to the Group 1 Sale, which accounted for a gross profit increase of $34.2 million. The increase in profit margin can be explained by the demand in the automotive industry after the three month period of reduced sales activity during the COVID-19 pandemic from March to June 2020. COVID-19 shut down many manufacturers for a period of time, and as a result, inventory was lower, thus creating more demand and higher prices which drove up the profit margin on sales. This was coupled with an increase in used vehicle wholesale driven by demand for used vehicles due to shortages in new vehicle inventory, resulting in higher per unit prices.

***Operating Expenses***

For the years ended December 31, 2021 and 2020, operating expenses were $0.7 million and $357.8 million, respectively. This represents a decrease of $357.1 million, or 99.8%.

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The decrease is explained by a $313.4 million gain on sale of dealerships, property and equipment as a result of the Partnership's dispositions of dealerships and real estate throughout 2021. This was coupled with a decrease in selling, general and administrative expenses due to the disposition of the FX Caprara, Ron Carter, and KRAG dealership groups in 2020, totaling $11.6 million, $14.9 million, and $24.2 million, respectively, year over year. In addition, operating expense was offset by a decrease in rent expense and depreciation and amortization totaling $4.4 million, primarily resulting from dispositions in 2021.

***Operating Income***

For the years ended December 31, 2021 and 2020, operating income was $348.3 million and $20.7 million, respectively. This represents an increase of $327.6 million, or 1,585.4%.

This increase is explained by a decrease in gross profit of $29.5 million coupled with a decrease in operating expenses of $357.1 million as described above, primarily the gain on sale of the dealerships, property and equipment in 2021.

***Other Income (Expense), net***

For the years ended December 31, 2021 and 2020, other (expense) income, net was $3.6 million and $(28.1) million, respectively. This represents a decrease in expense of $31.7 million year over year, or 112.9%.

This decrease in expense is primarily explained by $19.8 million of PPP Loan forgiveness income in 2021. This was coupled with a reduction in floorplan interest expense and interest expense totaling $12.5 million directly attributed to the dispositions of the FX Caprara, Ron Carter, and KRAG dealership in 2020 and the Partnership's disposition of 28 dealerships in November and December of 2021. In addition, COVID-19 related inventory supply chain shortages for the operating dealerships throughout 2021 reduced floorplan interest expense.

***Net Income (Loss)***

As a result of the above factors, our overall net income was $351.9 million for the year ended December 31, 2021, as compared to a $7.4 million net loss for the year ended December 31, 2020. This represents a change of $359.3 million, or 4,833.8%.

This increase is primarily explained by the increase in operating income of $327.6 million and other income (expense), net of $31.7 million as described above.

**Liquidity and Capital Resources**

The Partnership has historically relied primarily on cash on hand, cash flows from operations, floorplan lines of credit and borrowings under our credit facilities as the main sources for liquidity. We used those funds to invest in capital improvements and additions and satisfy contractual obligations. Since the adoption of our Plan of Liquidation, our ability to meet our obligations is contingent upon the disposal of our assets in accordance with the Plan of Liquidation. As of December 31, 2022, all significant non-cash assets except for the Prime Subaru Manchester dealership have been liquidated. We had $541.9 million in cash on hand and $22.0 million in restricted cash as of December 31, 2022. We expect that this cash will be adequate to meet our obligations, pursuant to our Plan of Liquidation.

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***Contractual Payment Obligations***

The following table summarizes our payment obligations under certain contracts as of December 31, 2022, that obligate the Partnership to contractual payments. The amounts presented are based upon, among other things, the terms of any relevant agreements. Future events that may occur related to payment obligations could cause actual payments to differ significantly from these amounts.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| (Dollars in thousands) | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** |
|  |  |  |  |  | **More Than 5** |
|  |  | **Less than 1 Year** | **1 - 3 Years** | **3 - 5 Years** | **Years (2028 and** |
|  | **Total** | **(2023)** | **(2024 and 2025)** | **(2026 and 2027)** | **thereafter)** |
| Floorplan payable | $2514 | $2514 | $— | $— | $— |
| Notes payable - related parties | 17682 | 17682 |  |  |  |
| Total | $20196 | $20196 | $— | $— | $— |

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***Holding Company Status***

The Partnership is a holding company that does not conduct any business operations for its own.

***Critical Accounting Estimates***

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and reported amounts of revenues and expenses at the date of the financial statements. Certain accounting policies require us to make difficult and subjective judgments on matters that are inherently uncertain. The following accounting policies involve critical accounting estimates because they are particularly dependent on assumptions made by management. While we have made our best estimates based on facts and circumstances available to us at the time, different estimates could have been used in the current period. Changes in the accounting estimates we used are reasonably likely to occur from period to period, which may have a material impact on the presentation of our financial condition in liquidation.

Our most critical accounting estimates include those related to reserves for potential litigation and our liquidation accounting estimates including: the date on which we expect the liquidation process to be complete, the estimated settlement proceeds of our assets; estimated settlement amounts of our liabilities, and the estimated revenue and operating expenses that are projected through the date in which we no longer operate Prime Subaru Manchester. We review our estimates, judgments and assumptions periodically and reflect the effects of revisions in the period that they are deemed to be necessary. We believe that these estimates are reasonable, however, the actual results could differ from the estimates and assumptions made in the preparation of the accompanying Consolidated Financial Statements.

*Reserves for potential litigation*

We, our General Partner, and our subsidiaries are involved in a number of regulatory, litigation, arbitration and other proceedings or investigations, and many of those matters expose us to potential financial loss and, the resolutions of which, could impact our estimated liquidation completion date. We record a liability when we believe that it is probable a loss will be incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. We evaluate developments in our legal matters that could affect the amount of liability that has been previously accrued, if any, and the matters and related reasonably possible losses disclosed, and make adjustments as appropriate. Significant judgement is required to determine both the likelihood of there being a resolution and the estimated amount of a loss related to such matters.

*Liquidation Basis of Accounting*

As of December 31, 2021, the Partnership transitioned from a going concern basis of accounting to a liquidation basis of accounting in accordance with US GAAP. Under the Liquidation Basis, the remeasurement of the Partnership's assets and liabilities includes

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management's estimates and assumptions of: (i) income to be generated from the remaining assets until the anticipated date of sale; (ii) sales proceeds to be received for these assets at the time of sale; (iii) operating expenses to be incurred during the liquidation period; and (iv) amounts required to settle liabilities. The estimated liquidation values for assets and liabilities derived from future operations and asset sales and the settlement of estimated liabilities are reflected on the Consolidated Statements of Net Assets in Liquidation in "Item 15. Financial Statements and Exhibits." The actual amounts realized could differ materially from the estimated amounts.

***Item 7A. Quantitative and Qualitative Disclosures About Market Risk***

***Interest Rate Risk***

Our primary market risk exposure is increasing SOFR interest rates.

We had $2.5 million of variable rate vehicle floorplan payable at December 31, 2022. Based on this amount, a 100 basis point change in interest rates would result in an immaterial change to our annual floorplan interest payments.

***Item 8. Financial Statements and Supplementary Data***

The financial statements and notes thereto required by this item begin on page F-1 as listed in "Item 15. Exhibits and Financial Statement Schedules" of Part IV of this Form 10-K and are incorporated herein by reference.

***Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure***

None.

***Item 9A. Controls and Procedures***

***Evaluation of Disclosure Control and Procedures***

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of December 31, 2022. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2022, our disclosure controls and procedures were not effective in providing reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (ii) accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

***Management's Report on Internal Control over Financial Reporting***

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Because of its inherent limitations, internal control over financial reporting may not prevent or detect material misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework-2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission, and concluded our internal control over financial reporting was not effective as of December 31, 2022 due to the material weaknesses set forth below.

*Material Weaknesses*

We have concluded that there are material weaknesses in our system of internal control over financial reporting ("ICFR"), which if not remediated could materially and adversely affect our ability to timely and accurately report our results of operations and financial condition.

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We have identified weaknesses, or a combination of deficiencies, relating to risk assessment, control activities and monitoring of the Partnership's control environment that have been determined to be material weaknesses in our internal controls. These identified weaknesses are attributed, in part to insufficient and ineffective controls within our financial close and reporting process.

*Remediation Plan*

Our management is committed to maintaining a strong internal control environment and implementing measures designed to help ensure the financial statements are free of material error. To remediate the material weaknesses, management believes the following remediation plans would have to be developed, implemented, and tested:

● establishing a hierarchy of review with the appropriate complement of management employees, and

● implementing intensive review policies and procedures to be performed at an appropriate level of precision.

While management believes the measures described above and others that may be implemented should remediate the material weaknesses that we have identified, management does not expect to fully remediate these material weaknesses in the near term. Our management is currently determining the extent and timing of its remediation efforts including rationalizing the level of investment necessary to mitigate the level of risk brought on by our material weaknesses, in light of the progress being made in our Plan of Liquidation.. We may decide to take additional measures to address control deficiencies or determine to modify, or in appropriate circumstances not to complete such actions due to the timing of carrying out the Plan of Liquidation.

***Changes in Internal Control over Financial Reporting***

Other than the ongoing effort to implement elements of our remediation plan, there were no changes in our internal control over financial reporting during the last three months ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

***Item 9B. Other Information***

None.

***Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections***

Not applicable.

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**PART III**

***Item 10. Directors, Executive Officers and Corporate Governance*** 

**MANAGEMENT OVERVIEW**

As previously discussed in "Item 1. Business" the Partnership is managed by GPB, through its affiliation with Highline. The main governing bodies that ultimately manage and make decisions for the Partnership are the GPB Acquisition Committee and Highline, including Highline's Executive Officers as well as the Board, as described in this "Item 10. Directors, Executive Officers and Corporate Governance." The Acquisition Committee and Highline each perform distinct functions on behalf of the Partnership as outlined below.

***Appointment of Monitor and Application for Receivership***

On February 11, 2021, the EDNY Court appointed the Monitor over GPB. Pursuant to the EDNY Court's original order, GBP shall (i) grant the Monitor access to all non-privileged books, records and account statements for the GPB-managed funds, including the Partnership, as well as their portfolio companies, and (ii) cooperate fully with requests by the Monitor reasonably calculated to fulfill the Monitor's duties. The Order also grants the Monitor the authority to approve or disapprove proposed material corporate transactions by GPB, the Partnership or its subsidiaries, extensions of credit by them outside the ordinary course of business, decisions to resume distributions to the Limited Partners of the Partnership, or any decision to file any bankruptcy or receivership petition for any of them, among other actions.

The Monitor was required to submit a report to the court within 60 days of his appointment recommending either continuation of the Monitorship, conversion to a receivership, and/or filing of bankruptcy petitions for one or more of the various entities. The Monitor submitted this report on April 12, 2021, and recommended continuation of the Monitorship.

On April 14, 2021, the EDNY Court entered an Amended Order, providing that, in addition to the SEC and GPB, certain State regulators will receive access to the periodic reports filed by the Monitor pursuant to the Order. The following discussion about the authority of various governing bodies of GPB the Acquisition Committee, Highline, and their respective officers and directors, is qualified by reference to the Amended Order.

On May 31, 2022, Mr. Gentile filed a motion in the SEC Action to modify the Amended Order pursuant to Rule 60(b) of the Federal Rules of Civil Procedure. In his Rule 60(b) Motion, Mr. Gentile seeks a court order to, among other things, (i) narrow the scope of the Monitor's responsibilities; and (ii) direct the Monitor to ensure that GPB does not sell or otherwise dispose of assets or portfolio companies that the Partnership owns before the completion of a "strategic assessment" to be conducted by three managers Mr. Gentile purportedly appointed to GPB on May 27, 2022. On that same day, May 31, 2022, the Monitor notified Mr. Gentile and GPB that Mr. Gentile's purported appointment of three new managers to GPB without Monitor approval was, amongst other things, in violation of the Amended Order. Mr. Gentile and GPB were, at that time, given ten (10) business days to cure the violation of the Amended Order. The cure period has expired without any steps having been taken to comply with the Monitor's notification of violation of the Amended Order.

On June 13, 2022, the SEC filed by Order to Show Cause in the SEC Action an application to (i) convert the existing Monitorship over GPB and the GPB-managed funds to a Receivership, and appoint the previously-appointed Monitor, Joseph T. Gardemal III, as Receiver; and (ii) impose a litigation injunction on cases filed against GPB and the GPB-managed funds. The Receivership Application and the Proposed Order were filed with the EDNY Court with consent of GPB's management.

The Receivership Application seeks appointment of Mr. Gardemal as Receiver in order to, in part, streamline the process by which GPB and the GPB-managed funds liquidate remaining portfolio company assets and distribute money to Limited Partners, subject to the EDNY Court's supervision. The Proposed Order grants to Mr. Gardemal, generally, all powers and authorities previously possessed by the entities subject to the Proposed Order, as well as the powers possessed by the officers, directors, managers and others previously in charge of those entities, and permits him to, among other things, take all such actions necessary to preserve receivership assets.

Additionally, the Receivership Application includes a proposed stay of all Federal and State actions (as well as any arbitrations) presently pending against GPB and the GPB-managed funds, and provides for a centralized claims process for GPB Limited Partners, in the

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EDNY Court, to prevent potentially disparate actions in different courts that could negatively impact the assets proposed to be subject to the EDNY Court's jurisdiction and control.

The Rule 60(b) Motion and the validity of the appointment of the new managers are presently under consideration by the EDNY Court, along with the Receivership Application. Currently, there can be no assurance as to the outcome of the Rule 60(b) Motion or the Receivership Application.

***GPB Summary***

GPB is a Delaware limited liability company, registered as an investment adviser with the SEC. Under the Partnership's LPA, GPB conducts and manages our business. However, pursuant to a MSA with Highline, Highline oversees all day-to-day functions of the Partnership and its subsidiaries, including management of all underlying assets, human capital, accounting and financial reporting, and operations. The main governing body internal to GPB is the Acquisition Committee. While GPB, through its Acquisition Committee, controls all major asset acquisition and divestiture decisions concerning the Partnership, Highline is responsible for reporting and monitoring distributions to our Limited Partners. Pursuant to the April 14, 2021 Amended Order issued by the EDNY Court, Highline's operational and financial decisions regarding the affairs of the Partnership are subject to the Monitor's authority.

***Acquisition Committee***

The Acquisition Committee is currently composed of three members appointed by GPB; however, GPB may increase or decrease the size of the Acquisition Committee, and nominate and remove Acquisition Committee members at its sole discretion. Currently, the members of the Acquisition Committee are Robert Chmiel, Michael Emanuel, and Nico Gutierrez. Pursuant to letter agreements with us, Acquisition Committee members agree to serve on such committee for automatically renewing one year terms, and provided that either party may terminate the relationship at any time, that they will use their best judgment when making recommendations on acquisitions and divestiture decisions for us and will regularly attend committee meetings.

According to the Acquisition Committee governing charter, the authority and responsibilities of the Acquisition Committee include:

● Understanding our mission and organizational goals and how they underscore and support the objectives of the portfolio companies.

● Reviewing and advising on proposed acquisitions based on the consistency, viability and fit of those proposed acquisitions with our acquisition and operational criteria.

● Voting on acquisitions and divestitures, which require the approval of at least 75% of the Acquisition Committee members in order to proceed with a particular investment decision.

Notwithstanding the above, GPB's Acquisition Committee asset acquisition and divestiture decisions concerning the Partnership that constitute a Significant Transaction are subject to required approval by the Board. A "Significant Transaction" means (i) a transaction that meets the definition of a Significant Subsidiary contained in Regulation S-X under federal securities laws; or (ii) based on criteria otherwise determined by the Board.

Acquisition Committee members are not independent and are affiliated with either GPB or Highline. The members are not separately compensated for their service on the Acquisition Committee. The below chart reflects the Acquisition Committee make up and their tenure on the committee:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Name** |  | **Position** |  | **Tenure** |
| Robert Chmiel |  | Committee Chair Person |  | March 2021 - Present |
| Michael Emanuel |  | Committee Member |  | December 2021- Present |
| Nico Gutierrez |  | Committee Member |  | December 2021- Present |

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***Advisory Committee***

During 2021, GPB had an Advisory Committee composed of three members appointed by GPB. The Advisory Committee was responsible for reviewing and approving all related party transactions involving the Partnership. In February 2022, with the Monitor's approval, the Advisory Committee was disbanded.

***Code of Ethics and Business Conduct***

GPB's Code of Ethics and Compliance Manual applies to all officers and employees of GPB and Highline. A copy of our code of ethics is posted on our website at http://www.gpb-cap.com.

***GPB Executive Leadership***

GPB's senior executives are experienced financial, management, legal and accounting professionals with several decades of combined private investment and acquisitions experience. None of the GPB executive leadership have familial relationships with each other or any person listed in this "Item 10. Directors, Executive Officers and Corporate Governance" or "Item 11. Executive Compensation". The current executive leadership of GPB is as follows:

***Robert Chmiel, Chief Executive Officer and Chief Financial Officer***

Robert Chmiel, 62, Chief Executive Officer (since July 2021), Interim Chief Executive Officer (from February 2021 to June 2021) and Chief Financial Officer of GPB (since November 2019), leads all aspects of the firm, including investment management, accounting and finance, legal and compliance, and communications and investor relations. Mr. Chmiel has extensive experience in due diligence and SEC filings for publicly traded companies. His experience also includes six years of various finance roles with The Walt Disney Company, most notably as a senior member of the executive team which launched Disney Online. Most recently, he was the CFO of Orion Resource Partners, a $4 billion New York-based commodity-themed investment manager. Prior to Orion, Mr. Chmiel was the CFO and Head of Marketing for Pia Capital Management, a Greenwich, CT- based global macro hedge fund. Before Pia, Mr. Chmiel was the Managing Principal of RC Financial Group LLC, a financial consulting firm which specialized in due diligence services, capital raising, marketing and CFO services to hedge funds, private equity funds as well as to small and micro-cap public companies. Mr. Chmiel holds a Master of Business Administration from the Wharton School of Business at the University of Pennsylvania and a Bachelor of Arts in Economics from the College of the Holy Cross.

***Michael Emanuel, GPB General Counsel and Chief Compliance Officer***

Michael Emanuel, 56, is the General Counsel and Chief Compliance Officer of GPB (since August 2020) and is responsible for all legal, compliance and regulatory functions. Mr. Emanuel joined GPB from Stroock Stroock & Lavan, a New York-based law firm where he served as a partner (March 2018 - July 2020). There, he advised clients in matters relating to fund, adviser and family office legal, compliance and regulatory infrastructure. Mr. Emanuel has focused his career practice on investment adviser and investment company regulation, the representation of investment funds and investment advisors in the formation, structuring, capitalization and operations of investment funds and management businesses. Prior to becoming a law firm partner, Mr. Emanuel spent over 20 years as a general counsel, chief compliance officer, chief operating officer and senior vice president at leading registered investment management firms, family offices, global banks and other financial services and law firms, most recently at Eagle Investment Solutions (from June 2010 - March 2018). Mr. Emanuel received his Juris Doctor degree from Fordham University and his Bachelor of Science in Accounting from Washington University.

**Highline Management, Inc. Summary**

In January of 2020, Highline was formed as a wholly-owned subsidiary of GPB to provide services to the GPB-managed partnerships as described below under "Highline Management Services Agreement." Highline's formation followed the completion of an independent special investigation by outside legal counsel as a response to recommendations made by GPB's predecessor Audit Committee to certain allegations brought against the General Partner as described in "Item 3. Legal Proceedings". The predecessor Audit Committee made recommendations that led to us undertaking a series of restructuring activities to accomplish a number of objectives including, but not limited to: (i) further enhancement of the corporate management structure, with additional professionals knowledgeable in the industry and commensurate with the complexity and demands of the business of the Partnership; (ii) formalization, to the extent possible, of the

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commitment to share human resources, facilities and operating assets among and between the entities that comprise the Partnership; and (iii) further development of the independent oversight of the corporate governance structure and framework to help enable the Partnership to achieve its goals, control risks and promote compliance with applicable laws, rules and regulations. To that end, Highline was authorized to, and established the Board, initially consisting of five members, three of which are "independent", as that term is used in the NYSE listed company manual. To address its oversight and governance purposes, the Board established three committees, each consisting entirely of independent members – an Audit Committee, a Governance Committee, and a Compensation Committee. Additionally, these restructuring activities were designed and implemented, in part, to establish independent committees responsible for overseeing GPB's management related to the Partnership's affairs, establish additional layers of responsibility within the Partnership's governance structure, and enhance internal controls.

***Highline Board of Directors***

The Board currently consists of four members (the "Directors"). The Directors are Walter Bishop, Jane Kanter, Joseph LaPorta and Thomas Lemke. The three independent Directors are Walter Bishop, Jane Kanter and Thomas Lemke. David Gentile, the former Chief Executive Officer of GPB, served as Chairman of the Board and Joseph LaPorta served as a senior advisor to GPB's healthcare strategy until February 2022. In February 2021, both David Gentile and Thomas Hawkins resigned their Board positions. Mr. Gentile's position as Chairman was assumed by Michael Frost following Mr. Gentile's resignation, until February 2022, and Thomas Lemke replaced Mr. Hawkins as a Director. In February 2022, Mr. Frost resigned from the Board, and Jane Kanter replaced Mr. Frost as the Board's Chair. The biographies of current Board members are contained in this "Item 10. Directors, Executive Officers and Corporate Governance."

***Highline Management Services Agreement***

Highline provides certain services to GPB as set forth in the MSA dated January 1, 2020. The May 2020 Amendment to the MSA set forth that the MSA would be in effect for an initial three-year term, effective as of January 1, 2020 through December 31, 2022. The MSA was subsequently amended in August 2021, under which the initial term of the MSA was extended as a five-year term, through December 31, 2024.

Highline provides significant management and operational services to GPB through the MSA with respect to limited partnerships ("LPs") managed by GPB, including the Partnership, which are operating holding companies engaged in the business of acquiring and managing operating businesses and certain loans and debt positions held by the LPs and their affiliates. Pursuant to the MSA, Highline provides strategic management, day-to-day operational oversight, administration, acquisition and disposition oversight, and accounting and financial reporting services to GPB with respect to the LPs and affiliates. Highline has agreed to provide the following services to the Partnership (but not to the businesses owned by the Partnership which are managed day-to-day by their own management teams) pursuant to the MSA:

● Manage and oversee the day-to-day affairs and operations of the Partnership including developing corporate strategy and business plans, and managing annual budgets;

● Manage, oversee and facilitate the accounting and payment functions, including necessary cash management services with respect to the operations of the Partnership;

● Manage and oversee the administration, operations, financial accounting and financial reporting for the Partnership, including managing the preparation of financial statements for the Partnership;

● Manage the process for the audits of the financial statements of the Partnership;

● Manage and oversee the process of obtaining third-party valuations of the Partnership in accordance with the LPA and the Class A and Class A-1 PPM dated July 2018;

● Communicate regularly and provide written reports (no less frequently than monthly) concerning the financial status and financial performance of the Partnership to GPB, including providing regular (no less frequent than monthly) asset management reports and updated financial models for the Partnership;

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● Provide periodic market data and information (no less frequent than quarterly) relating to the businesses of the Partnership reasonably requested by GPB for investor marketing and communication purposes;

● Review and approve "Significant Transactions" approved by GPB's Acquisition Committee. A Significant Transaction shall mean (i) a transaction that meets the definition of a Significant Subsidiary contained in Regulation S-X under federal securities laws; or (ii) based on criteria otherwise determined by the Board;

● Review and approve any material change in the investment strategy of the Partnership; and

● Perform such other services as may be reasonably requested by GPB and which are reasonably acceptable to Highline.

As compensation for the services to be rendered by Highline, the Partnership pays an operation service provider fee, or OSP, to Highline at an annual amount agreed to by GPB and Highline, subject to the Board's approval, following Highline's delivery of the annual written budget to GPB. In 2022, 2021, and 2020, OSP fees paid to Highline amounted to $1.1 million, $3.6 million and $1.5 million, respectively.

The Board oversees the business and affairs of Highline. Among other things, the Board establishes Highline's overall corporate policies and reviews and oversees the performance of Highline's senior management in (i) executing Highline's business strategy, (ii) managing the day-to-day operations of Highline, and (iii) managing the LPs and affiliates, including the Partnership, in accordance with the MSA. The Board also acts as an advisor to Highline's senior management team. The Board's mission is to further the long-term interests of the LPs. The Board is kept informed of Highline's businesses through discussions with Highline's management, primarily at meetings of the Board and its Committees, and through reports and analyses presented to the Board by Highline's senior management. Additionally, significant communications between Highline's Directors and management occur apart from such meetings. The Board also reviews and approves Significant Transactions approved by the GPB Acquisition Committee and any material change in investment strategy of the Partnership or any of the LPs.

The Board believes the Directors' diverse experience, qualifications, and skills in strategic and financial planning, operations, risk management, complex transactions, leadership development, and regulatory compliance provide Highline and its management team with a comprehensive range of perspectives. The biographies below describe the skills, qualities, attributes, and experience of the Directors.

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| | | |
|:---|:---|:---|
| **Name** | **Position with Highline** | **Director Tenure** |
| Walter Bishop<sup>+</sup> | Director | January 2020 - Present |
| Jane Kanter<sup>+</sup> | Director and Chair | January 2020 - Present |
| Joseph LaPorta | Director | January 2020-Present |
| Thomas Lemke<sup>+</sup> | Director | April 2021 - Present |

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+ Independent director

***Jane Kanter, Board Chair, Independent Director, and Chair of the Governance Committee***

Jane Kanter, 73, currently serves as Director of 2nd Vote Value Investments, Inc. and Chief Operating Officer of 2nd Vote Advisers, LLC, which is the sponsor and investment manager of three SEC registered exchange traded funds and adviser to numerous separately managed accounts. From January 1, 2018 through December 31, 2019, Ms. Kanter served as Chief Counsel of Manifold Partners, LLC, which is as an investment adviser to private investment funds and separately managed accounts. From June 2014 through September 2016, Ms. Kanter served as General Counsel and Chief Operating Officer of ARK Investment Management LLC, a prominent investment adviser that focuses on disruptive innovation and offers investment advice to retail and institutional investors. From May 1997 through June 2014, Ms. Kanter was a Senior Partner at Dechert LLP, a leading global law firm that delivers practical commercial advice on complex matters and transactions. Starting in 1980, Ms. Kanter has worked in the financial services industry in various capacities: in private legal practice as a senior partner with various law firms, with T. Rowe Price Associates as Vice President and Legal Counsel, and at the SEC's Division of Investment Management as the Head of the Investment Company Disclosure Study. Ms. Kanter has published numerous articles on topics concerning investment advisers and asset management firms. Ms. Kanter has also acted as a consultant to foreign governments and foreign and domestic regulatory bodies on matters relating to the regulation of securities, securities markets and specialized asset management issuers. The Board has concluded that Ms. Kanter's qualifications to serve on the

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Board include, among other things, her vast experience in counseling financial services firms, both as a senior executive and as a senior partner with one of the nation's leading law firms.

***Walter Bishop, Independent Director and Chair of the Audit Committee***

Walter ("Wally") Bishop, 61, served as Managing Director within Deutsche Bank's ("DB") USA Regional Management Team, responsible for several key roles within DB's U.S. operations including, Chief Operating Officer for DB's U.S. Bank ($40Bn), Chairman of the Board for DB Trust Company Delaware, member of the Board of Directors and Branch Manager for DB Cayman Islands Branch ($100Bn) and Head of Governance for Capital Management and Stress Testing, from January 2015 until his retirement in June 2019. Prior to DB, Bishop worked as a manager at KPMG Peat Marwick in the financial services audit practice, managing audits for several key financial services clients, including Manufacturers Hanover and Donaldson, Lufkin & Jenrette Securities Corp. Mr. Bishop also served as Chief Financial Officer and Deputy General Manager for Nordbanken's U.S. operations and Chief Administrative Officer for Barclays Bank U.S. Mr. Bishop most recently served as a Senior Advisor to Thunder Bridge Capital Acquisition II ($300M IPO). Mr. Bishop is a Certified Public Accountant (CPA), Chartered Financial Analyst (CFA) and Project Management Professional (PMP). The Board has concluded that Mr. Bishop's qualifications to serve on the Board include, among other things, his management and financial experience as a senior executive of a large banking firm and his qualifications as a "financial expert" under the rules of the federal securities laws.

***Joseph LaPorta, Director***

Joseph J. LaPorta, 56, has been President, Chief Executive Officer, and Board Director for Healthcare Linen Services Group, a healthcare services company, since October 2018. From June 2015 to November 2018, he was President and Chief Executive Officer of Persante Health Care, a multi-location provider of sleep and balance diagnostic management services. From November 2012 to October 2015, he served as President and CEO of Flexeon Rehabilitation, a multi-unit operator of rehabilitation and outsourced managed services. He served as President and CEO/COO of Criticare Systems & Unetixs Vascular. Prior to that, he held leadership roles with McKesson Corporation and GE Healthcare. Mr. LaPorta serves as an adjunct professor in the College of Management & Business at National Louis University. The Board has concluded that Mr. LaPorta's qualifications to serve on the Board include, among other things, his extensive experience as a senior executive with a variety of successful companies.

***Thomas Lemke, Independent Director and Chair of the Compensation Committee***

Thomas Lemke, 68, is a retired financial services industry executive with over 35 years of experience, including experience in various senior management positions with financial services firms, in addition to multiple years of service with the SEC and with a major law firm. He has a background in internal controls, including legal, compliance, internal audit, risk management, and fund administration, and has served as general counsel for several financial services firms. He has familiarity with a variety of financial, governance, accounting, investment, regulatory, risk, and operational matters through his prior experience (including as Executive Vice President, General Counsel, and Head of the Governance Group of Legg Mason, Inc.). He has gained experience as an independent director of several registered investment companies. Finally, Mr. Lemke is co-author of a number of legal treatises on the regulation of mutual funds, investment advisers, and broker-dealers. The Board has concluded that Mr. Lemke's qualifications to serve on the Board include, among other things, his extensive experience with a variety of financial, governance, accounting, investment, regulatory, risk, and operational matters.

**Highline Audit Committee**

The Highline Audit Committee (the "Audit Committee") consists of at least three independent members of the Board. The members are appointed by the Board and serve on the Audit Committee as long as they continue to serve as independent members of the Board. Per the Audit Committee charter, each member must be financially literate in accordance with New York Stock Exchange requirements and at least one member of the Audit Committee shall be an "audit committee financial expert" as such term is defined in the rules and regulations promulgated by the SEC. Mr. Bishop is the Board's audit committee financial expert.

The Audit Committee is currently composed of three members – Walter Bishop, Jane Kanter and Thomas Lemke. The Board has determined that the Audit Committee members are independent, as that term is used in the NYSE listed company manual, from both GPB and Highline. Board members are compensated as stated in "Item 11. Executive Compensation."

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The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of any independent auditors engaged for the purpose of rendering an audit report on the financial statements of the Partnership or performing other audit, review or related services for the Partnership. The Audit Committee's responsibilities include resolutions of any disagreements between management of the Partnership and the independent auditors regarding financial reporting. The independent auditors report directly to the Audit Committee. Specifically, the Audit Committee ensures:

● The integrity and quality of the financial statements of the Partnership and other entities as may be relevant to the audit of the Partnerships financial statements;

● The qualifications, independence and performance of the Partnership's independent auditors;

● The adequacy and effectiveness of the Partnership's accounting systems, disclosure controls and system of internal controls; and

● The issuance of audited financial statements by the Partnership.

In the course of performing these functions, the Audit Committee reports regularly to the Board. In discharging its oversight role, the Audit Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of the Partnership, GPB or affiliated entities and the authority to engage independent counsel and other advisers as it determines necessary to carry out its duties.

***Highline Compensation Committee***

The Highline Compensation Committee (the "Compensation Committee") is responsible primarily for (i) overseeing and making recommendations as to the compensation of Highline's executive officers and Directors, (ii) overseeing Highline's overall compensation structure, policies, and programs, and (iii) reviewing and approving disclosures regarding the compensation of Highline's executive officers and Directors for this Form 10-K filing and other filings made by or on behalf of the Partnership, in accordance with the applicable rules and regulations of the SEC and any other applicable rules and regulations.

The number of individuals serving on the Compensation Committee is determined by the Board from time to time, but consists of no fewer than three (3) members, each of whom must satisfy the independence requirements of the Board, the New York Stock Exchange, the Exchange Act, and any other applicable rules and regulations of the SEC. The members of the Compensation Committee are appointed by the Board for an initial term of one (1) year and may be replaced or removed by the Board at any time. The current members of the Compensation Committee are Thomas Lemke, Jane Kanter and Walter Bishop.

The Compensation Committee reviews and advises the Board in the following areas when determining Director and Executive Officer compensation:

Incentive-Compensation and Equity-Based Plans:

● Reviews and approves the recommendations of Highline's management regarding any grants and awards under the Highline's incentive-based compensation plans and equity-based plans, if any, in each case consistent with the terms of such plans; and

● Reviews and makes such recommendations to the management of Highline, as the Compensation Committee deems advisable, with regard to policies and procedures for granting incentive-based compensation and equity-based awards, if any, by Highline.

Matters Related to Highline's CEO:

● Reviews and approves the corporate goals and objectives, which may be relevant to the compensation of Highline's Chief Executive Officer (the "CEO");

● Evaluates the CEO's performance in light of the goals and objectives that were set for the CEO and determines and approves the CEO's compensation level based on such evaluation. In connection with determining the long-term incentive component

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of the CEO's compensation, the Compensation Committee may consider a number of factors, including Highline's performance and the performance of the Limited Partners and Partnership, the value of similar incentive awards to CEOs at comparable entities, and the long term compensation given to Highline's CEO in past years; and

● Reviews and approves, at least annually, the aggregate amount of base salary and annual incentive compensation that may be paid to the CEO.

Matters Related to Compensation of the Officers Other Than the CEO:

● Reviews and approves the compensation of all executive officers of Highline other than the CEO, as recommended by management; and

● Reviews and approves, at least annually, the aggregate amount of base salary and annual incentive compensation that may be paid to Highline's officers.

Further, if it is determined that disclosure by the Compensation Committee of its review, discussions with management, and analysis of Director and executive officer compensation ("Compensation Disclosure") is required to be included in filings made by or on behalf of the Partnership, it reviews and approves such disclosure, prepared by management, with the assistance of its outside counsel and in accordance with SEC requirements, and makes a recommendation to the Board as to whether the Compensation Disclosure, in the form provided to the Board, should be included in the required filings for the Partnership.

***Highline Governance Committee***

The Highline Governance Committee (the "Governance Committee") assists the Board in (i) identifying and discussing corporate governance issues with a view to providing guidance and recommendations to the Board and management regarding such matters, (ii) developing a set of corporate governance guidelines and other corporate governance related documents, (iii) establishing criteria for selecting new Board members, (iv) identifying, evaluating, and nominating candidates to serve as Board members, (v) reviewing annually the independence of each of the independent Directors and reporting its findings to the Board, (vi) overseeing the annual evaluation and self-assessment of the effectiveness and performance of the Board and each of the Directors, including making recommendations to the Board as to any improvements it deems advisable, and (vii) developing, proposing, and administering Highline's Related Party Transactions policies and procedures, as such policies and procedures are approved and adopted by the Board for Highline to implement for the Partnership. The current members of the Governance Committee are Jane Kanter, Thomas Lemke and Walter Bishop.

The Board, in consultation with the Governance Committee, establishes criteria for Board membership, which reflects the requirements of applicable laws and regulations, while taking into consideration factors as the Board deems appropriate. These factors include director independence, diversity, age, skills, management experience in businesses and other organizations of comparable size, and the extent to which the candidate and his or her experience complements, enhances or supports the Board's ability to oversee the affairs and business of Highline, including the ability of the Board committees to fulfill their duties and responsibilities. Based on these criteria, the Governance Committee identifies individuals qualified to become independent Board members and recommends to the Board appropriate candidates for appointment to the Board. Any director candidate proposed for appointment and/or election to the Board must receive the concurrence of the full Board before the Chair of the Board can extend a formal invitation to the candidate to join the Board. Prior to any candidate becoming a member of the Board, the candidate must be approved in accordance with the Bylaws of Highline.

***Highline Management, Inc. Executive Officers***

***Robert Chmiel, Chief Executive Officer***

See "GPB Executive Leadership" section above for Mr. Chmiel's complete biography. Mr. Chmiel was CFO of Highline from July 2020 through January 2022.

***Michael Emanuel, General Counsel***

See "GPB Executive Leadership" section above for Mr. Emanuel's complete biography.

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***Evan Cutler, Chief Financial Officer***

Mr. Cutler, 38, Chief Financial Officer (since January 2022), previously served as Senior Controller of Highline, and formerly GPB, since April 2019. Mr. Cutler leads all financial aspects of Highline, including finance and accounting, financial reporting, and taxes, and assists in all other areas of Highline's business. Mr. Cutler was previously Controller of Capstone Investment Advisors from 2015 to 2018, where he led the fund accounting group and was responsible for P&L, review and monitoring of operations functions, month end close processes, regulatory filings, financial statements, taxes, investor due diligence meetings and new fund launches from an accounting and operational perspective. Mr. Cutler also was a member and presenter to the valuation committee of Capstone Investment Advisors. Mr. Cutler has 14 years total experience in the investment management industry, is a Certified Public Accountant licensed in the state of New Jersey, and has a B.S. from Montclair State University.

**ADMINISTRATOR**

GPB has engaged Phoenix American Services, Inc. (the "Administrator") to perform various third-party administrative services for us, including certain investor administration and investor relations functions. Phoenix provides investor administration functions including: new business processing, bank account management, electronic document management, database and file management, electronic and physical data storage, confirmation letters and investor / financial representative record access through a customized web portal. Investor relations functions include: distributions and redemptions processing, account summary, commission calculation, tax reporting and Office of Foreign Asset Control ("OFAC") compliance.

***Item 11. Executive Compensation***

**Overview**

The Partnership does not have "Executive Compensation." As previously discussed in "Item 1. Business" above, the Partnership is managed by GPB through its affiliation with Highline. The governing bodies that ultimately manage and make decisions for the Partnership are the GPB Acquisition Committee and Highline, including Highline's Directors and Executive Officers, and the Highline Audit Committee (previously described in "Item 10. Directors, Executive Officers and Corporate Governance"). The Acquisition Committee and Highline each perform distinct functions on behalf of the Partnership as outlined in "Item 10. Directors, Executive Officers and Corporate Governance."

We have set forth below the compensation of all persons who served as a principal executive officer or principal financial officer of GPB and Highline, and the other applicable executive officers of GPB and Highline, during the year ended December 31, 2022. For certain officers, a portion of the compensation was paid by GPB and the remainder was paid by Highline and the applicable tables reflect the respective amounts paid by each of them.

Also, we have set forth below the compensation paid to the members of the Board during the year ended December 31, 2022. As the members of the GPB Acquisition Committee are not separately compensated for their service on the Acquisition Committee, compensation information for the Acquisition Committee is not set forth below.

**GPB Executive Compensation**

The cash compensation with respect to 2022 that was payable by GPB to each of GPB's executive officers who were serving as of December 31, 2022 in respect of their services to GPB is set forth in the GPB 2022 Summary Compensation Table below. The amount of the payments for each of those executive officers was approved by the Monitor. The executive officers did not receive any equity awards or other non-cash compensation from GPB in 2022, and they participated in employee benefit plans and retirement plans that are sponsored and maintained by Highline.

**Employment Agreements with Robert Chmiel and Michael Emanuel**

On November 1, 2021, GPB and Highline entered into employment agreements with each of Robert Chmiel and Michael Emanuel, pursuant to which Mr. Chmiel serves as Chief Executive Officer and Chief Financial Officer of each of GPB and Highline and Mr. Emanuel serves as General Counsel and Chief Compliance Officer of GPB and General Counsel of Highline.

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Each agreement provides that the executive will receive annualized base salary compensation of $1,000,000, of which $750,000 is payable in equal semi-monthly installments throughout the year and the remaining $250,000 is payable in a lump sum each year, occurring on April 30, 2021 and on February 15 of each year thereafter. Each $250,000 is subject to repayment if, within one year following the date of payment, the executive is terminated for Cause (as defined in the agreements) or voluntarily terminates without Good Reason (as defined in the agreements and summarized below).

In addition, each agreement provides for three payments equal to $300,000 each, which vest on February 15 of each of 2022, 2023 and 2024, subject to the executive's continued employment through the vesting date, and is payable shortly after the vesting date. If the executive's employment is terminated without Cause or the executive terminates for Good Reason, in each case prior to the payment of the final such payment, the executive will receive a pro-rata payment in respect of the amount payable on the next applicable payment date based on the duration of the executive's employment from the prior February 15 through the date of termination.

Each agreement provides that if the executive's employment is terminated without Cause or the executive terminates for Good Reason, or the executive terminates due to death or Disability (as defined in the agreement), the executive will receive (i) a severance payment equal to $1,000,000 less the amount of any $300,000 payment referenced in the previous paragraph (including any pro-rated payment) that was previously paid to the executive, and (ii) payment of COBRA costs for up to 18 months following the date of termination. These severance payment amounts were funded into an escrow account in accordance with the terms of the agreements.

The agreements provide for various restrictive covenants, including with respect to confidential information and assignment of inventions, restrictions on soliciting clients and customers for one year following termination and non-disparagement.

For purposes of the agreements, Good Reason means, in summary, (i) a material adverse change in title or duties, (ii) a non-appealable legal or regulatory finding of a material breach of the agreement by GPB or Highline, (iii) a relocation of executive's principal office location outside of New York or Florida or a prohibition on working from home, (iv) certain new legal or regulatory actions by or against GPB or Highline, the factual basis for which arises after April 30, 2021, and (v) certain felony actions relating to GPB or its members following April 30, 2021.

***GPB 2022 Summary Compensation Table***

The following table provides the compensation paid by GPB to the executive officers of GPB who were serving as of December 31, 2022.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Name and Principal Position** | <br>**Fiscal Year** | <br>**Salary ($)** | <br>**Bonus** <sup>(1)</sup>**($)** | **All other**<br>**Compensation**<sup>(2)</sup> **($)** | <br>**Total ($)** |
| Robert Chmiel | 2022 | 650000 |  | 68493 | 718493 |
| Chief Executive Officer and Chief | 2021 | 556250 |  |  | 556250 |
| Financial Officer of GPB | 2020 | 16500 |  |  | 16500 |
| Michael Emanuel | 2022 | 325000 |  | 43836 | 368836 |
| General Counsel and Chief  | 2021 | 878125 |  |  | 878125 |
| Compliance Officer of GPB<sup>(3)</sup> | 2020 | 216664 | 400000 |  | 616664 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*1.* *The amounts in this column represent bonuses paid to the executive officer with respect to the applicable year listed in the table.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.* *The amounts in this column represent payments unused personal time off"(PTO") with respect to the applicable year listed in the table.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.* *Mr. Emanuel has served as General Counsel and Chief Compliance Officer of GPB since August 2020, Mr. Chmiel has served as the Chief Financial Officer of GPB since November 2019.* 

***Grants of Plan-Based Awards***

During the year ended December 31, 2022, GPB did not grant any plan-based awards to its executive officers.

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***Outstanding Equity Awards at Fiscal Year End***

As of December 31, 2022, the executive officers of GPB did not have any outstanding equity awards of GPB.

***Option Exercises and Stock Vested***

During the year ended December 31, 2022, the executive officers of GPB did not have any option exercises or stock vested.

***Pension Benefits***

During the year ended December 31, 2022, GPB did not provide its executive officers pension benefits.

***Non-qualified Deferred Compensation***

During the year ended December 31, 2022, GPB did not provide its executive officers with a non-qualified deferred compensation plan.

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***Potential Payments upon Termination or Change of Control***

The following table sets forth certain information with respect to compensation that would be payable to Messrs. Chmiel and Emanuel upon a termination of employment by GPB without Cause, by the executive for Good Reason or as a result of the executive's death or Disability, in each case as of December 31, 2022.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Name** | <br>**Cash ($)** | <br>**Bonus ($)** | **Severance**<sup>(1)</sup><br>**($)** | <br>**Other ($)** | <br>**Total ($)** |
| Robert Chmiel |  |  | 700000 |  | 700000 |
| Michael Emanuel |  |  | 700000 |  | 700000 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*1.* *All severance payments are contingent on a fully effective separation agreement. The amounts do not include the value of any COBRA payments.* 

**Highline Executive Compensation**

The cash compensation with respect to 2022 that was payable by Highline to each of Highline's executive officers who were serving as of December 31, 2022 in respect of their services to Highline is set forth in the Highline 2022 Summary Compensation Table below. The amount of the payments for each of those executive officers was approved by the Monitor. The executive officers did not receive any equity awards or other non-cash compensation from Highline in 2022, and they participated in employee benefit plans and retirement plans that are sponsored and maintained by Highline.

***Highline 2022 Summary Compensation Table***

The following table provides the compensation paid to the principal executive officer, principal financial officer and two most highly compensated executive officers of Highline who were serving as of December 31, 2022, along with the former Chief Executive Officer and a former Managing Director, who each ceased providing services in 2022.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Name and Principal Position** | <br>**Fiscal Year** | <br>**Salary** **($)** | <br>**Bonus**<sup>(2)</sup> **($)** | **All other** <br>**Compensation ($)** | <br>**Total ($)** |
| Robert Chmiel, Chief Executive Officer | 2022 | 650000 |  |  | 650000 |
|  | 2021 | 400000 |  | 48000<sup>(4)</sup> | 448000 |
|  | 2020 | 200000 | 400000 | 8000<sup>(4)</sup> | 608000 |
| Michael Emanuel, General Counsel | 2022 | 975000 |  |  | 975000 |
|  | 2021 | 91666 |  |  | 91666 |
| Evan Cutler, Chief Financial Officer | 2022 | 287500 | 175000 | 5800<sup>(7)</sup> | 468300 |
| Nico Gutierrez, Managing Director | 2022 | 300000 | 345000 | 5800<sup>(7)</sup> | 650800 |
|  | 2021 | 256250 | 300000 |  | 556250 |
|  | 2020 | 112500 | 225000 |  | 337500 |
| Michael Frost, Former Chief Executive Officer | 2022 | 300000 | 400000 | 328846<sup>(5)</sup> | 1028846 |
|  | 2021 | 600000 | 400000 | 90000<sup>(3)</sup> | 1090000 |
|  | 2020 | 200000 | 166667 | 9000<sup>(3)</sup> | 375667 |
| Daniel Rainey, Former Managing Director | 2022 | 150000 | 225000 | 169915<sup>(6)</sup> | 544615 |
|  | 2021 | 300000 | 240000 |  | 540000 |
|  | 2020 | 100000 | 120000 |  | 220000 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*1.* *All executives listed had a hire date of July 1, 2020 except for Mr. Frost (August 1, 2020) and Mr. Rainey (September 1, 2020).* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.* *The amounts in this column represent annual bonuses paid to the executive officer with respect to the applicable year listed in the table and, for Messrs. Cutler and Gutierrez, a portion of the reported bonus amount for 2022 was paid under the key employee retention program.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.* *The amount in this column represents cash payments for the use of a corporate apartment.* 

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*4.* *The amount in this column represents compensation at fair-value for use of a corporate apartment.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*5.* *The amount in this column represents cash severance and PTO pay-out paid to Mr. Frost in connection with his termination on June 30, 2022.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*6.* *The amount in this column represents cash severance and unused personal time off paid to Mr. Rainey in connection with his termination on June 30, 2022.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*7.* *The amount in this column represents retirement plan matching contributions paid by Highline.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*8.* *Mr. Cutler has served as Chief Financial Officer since January 2022.* 

***Grants of Plan-Based Awards***

During the year ended December 31, 2022, Highline did not grant any plan-based awards to its executive officers.

***Outstanding Equity Awards at Fiscal Year End***

As of December 31, 2022, the executive officers of Highline did not have any outstanding equity awards of Highline.

***Option Exercises and Stock Vested***

During the year ended December 31, 2022, the executive officers of Highline did not have any option exercises or stock vested.

***Pension Benefits***

During the year ended December 31, 2022, Highline did not provide its executive officers pension benefits.

***Non-qualified Deferred Compensation***

During the year ended December 31, 2022, Highline did not provide its executive officers with a non-qualified deferred compensation plan.

***Potential Payments Upon Termination or Change of Control***

The following table sets forth certain information with respect to compensation that is payable to Mr. Frost and has been paid to Mr. Rainey as a result of the termination of their employment by Highline without Cause on June 30, 2022. The severance payable to Messrs. Chmiel and Emanuel upon a qualifying termination of employment has been included in the section entitled "GPB Executive Compensation—Potential Payments upon Termination or Change of Control" and has not been reproduced here. No other Highline executive officers who were serving as of December 31, 2022 were entitled to any severance payments or benefits upon a termination of employment.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Cash ($)** | **Bonus ($)** | **Other ($)** | **Total ($)** |
| Michael Frost |  | —<br>600000<sup>(1)</sup> |  | 600000 |
| Daniel Rainey |  | —<br>150000<sup>(2)</sup> |  | 150000 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*1.* *The amount represented is equivalent to twelve months of Mr. Frost's base salary and would be paid out over a twelve month period. However, the actual amount paid could be less if other employment is obtained prior to the twelve months being reached. The portion of the payments made for 2022 are reflected in the Highline 2022 Summary Compensation Table above.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.* *The amount represents six months of Mr. Rainey's base salary paid out over a six month period and does not include the value of any COBRA payments.* 

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**Highline Directors Compensation**

The following table provides the compensation paid to the Highline Directors who served for all or part of 2022 with respect to the year ended December 31, 2022.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Name** | **Fees earned or** <br>**paid in cash**<br>**($)** | <br>**Stock** <br>**Awards ($)** | <br>**Option**<br>**Awards ($)** | **All other**<br>**Compensation** <br>**($)** | <br>**Total ($)** |
| Walter Bishop | 215000<sup>(1)</sup> |  |  |  | 215000 |
| Jane Kanter | 190000<sup>(2)</sup> |  |  |  | 190000 |
| Joseph LaPorta | 120000 |  |  |  | 120000 |
| Thomas Lemke | 190000<sup>(3)</sup> |  |  |  | 190000 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. *Includes committee member fees paid to Mr. Bishop for serving as the Audit Committee Chair and as a member of the Governance and Compensation Committees of $57,500, $18,750 and $18,750 respectively.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. *Includes committee member fees paid to Ms. Kanter for serving as the Governance Committee Chair and as a member of the Audit and Compensation Committees of $20,000, $31,250 and $18,750 respectively.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.* *Includes committee member fees paid to Mr. Lemke for serving as a member of the Audit, Governance and Compensation Committees of $31,250, $18,750 and $20,000 respectively.* 

**Compensation Risks**

Highline and the Board, including the Compensation Committee, consider and discuss the risks inherent in our business, as well as the design of our compensation plans, policies and programs that are intended to further our business objectives. Given the nature of our business, and the material risks we face, we believe that our compensation plans, policies and programs are not reasonably likely to give rise to risk that would have a material adverse effect on our business. We also believe that the mix and design of the elements of our executive compensation do not encourage management to assume excessive risks. Our compensation programs and decisions include qualitative factors which restrain excessive risk taking by management.

**Pay Ratio Disclosure**

GPB is the General Partner of the Partnership, and also is the General Partner of several other GPB-managed partnerships. The compensation of the Chief Executive Officer of GPB relates to services performed for all of the partnerships for which GPB is the General Partner, and not just the services that GPB performed for the Partnership. The Partnership does not have its own Chief Executive Officer specifically related to the business of the Partnership, and the compensation paid to the Chief Executive Officer of GPB is not determined by the Partnership. As a result, the Partnership has no basis for disclosing the ratio required under Item 402(u) of Regulation S-K.

***Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters***

The Partnership is a limited partnership, and GPB serves as our General Partner pursuant to the LPA. As of December 31, 2022 and through the date of this filing, there is no person, entity or group who is known by us to be the beneficial owner of more than 5% of the outstanding Units of the Partnership.

[**Table of Contents**](#TOC)

**SECURITY OWNERSHIP OF MANAGEMENT**

As of December 31, 2022 and through the date of this filing, David Gentile, owns directly or indirectly 6.2 of the 13,520.59 outstanding Units of the Partnership through GPB Auto SLP, LLC, an affiliate of the General Partner.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>**Beneficial Owner**<br>**Executive Officers and**<br>**Directors** | <br>**Class A** <br>**Units**<br>**Beneficially** <br>**Owned** | <br>**Percentage of** <br>**Class A Units**<br>**Beneficially**<br>**Owned (%)** | <br>**Class A-1**<br>**Units**<br>**Beneficially**<br>**Owned** | **Percentage**<br>**of Class**<br>**A-1 Units**<br>**Beneficially** <br>**Owned (%)** | <br>**Class B** <br>**Units**<br>**Beneficially**<br>**Owned** | <br>**Percentage of**<br>**Class B Units**<br>**Beneficially**<br>**Owned (%)** | <br>**Class B-1**<br>**Units**<br>**Beneficially**<br>**Owned** | **Percentage of** <br>**Class B-1**<br>**Units**<br>**Beneficially**<br>**Owned (%)** |
| David Gentile\*\* | 5.2 | \* |  | \* | 1.0 | \* |  | —% |
| Rob Chmiel |  | —% |  | —% |  | —% |  | —% |
| Evan Cutler |  | —% |  | —% |  | —% |  | —% |
| Michael Emanuel |  | —% |  | —% |  | —% |  | —% |
| Michael Frost |  | —% |  | —% |  | —% |  | —% |
| Walter Bishop |  | —% |  | —% |  | —% |  | —% |
| Jane Kanter |  | —% |  | —% |  | —% |  | —% |
| Joseph LaPorta |  | —% |  | —% |  | —% |  | —% |
| Thomas P. Lemke |  | —% |  | —% |  | —% |  | —% |
| All executive officers and directors as a group (9 persons) | 5.2 | <br> \* |  | <br> \* | 1.0 | <br> \* |  | —% |

---

\* Less than 1%

\*\* Mr. Gentile is the former Chief Executive Officer of GPB, effective as of February 2021 (see "Item 1. Business")

**CHANGE IN CONTROL**

We and GPB are not aware of any arrangements with respect to our Units, which may at a subsequent date result in a change of control.

***Item 12A. Recent Sales of Unregistered Securities***

***None***

***Item 13. Certain Relationships and Related Transactions, and Director Independence***

**FEES AND EXPENSES**

The Partnership has entered into numerous related party transactions. The Partnership has incurred the following fees and expenses:

***Managerial Assistance Fee***

Per the LPA and PPM, GPB, as General Partner is entitled to receive an annualized managerial assistance fee (the "Managerial Assistance Fee"), for providing managerial assistance services to the Partnership and the dealership. Those services include conducting the day-to-day operations of the Partnership inclusive of the identification, management and disposition of underlying portfolio companies and/or dealerships, and other duties assumed and stated under the LPA. The Managerial Assistance Fee does not include expenses related to In-House services and operations support services provided to the Partnership or its operating companies. Such expenses are in addition to, and not in lieu of, the Managerial Assistance Fee. The Managerial Assistance Fee is payable by the Partnership quarterly in advance of 2.0% per annum for Class A and B Units and 1.75% per annum for Class A-1 and B-1 Units calculated on each Limited Partners' Gross Capital Contributions. GPB, in its sole discretion, may defer, reduce or waive all or a portion of the Managerial Assistance Fee with respect to one or more Limited Partners for any period of time (and intends to waive the Managerial Assistance Fee with respect to the Special LP, as defined below, and its affiliates that invest in the Partnership). Managerial Assistance Fees charged to expense and included in the Consolidated Statements of Operations for the years ended

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December 31, 2021 and 2020 were $12.2 million and $12.9 million, respectively. During the year ended December 31, 2022, GPB reduced the Management Assistance Fees expected to be paid during the liquidation term resulting in a reduction in the liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statements of Net Assets in Liquidation of $10.8 million.During the year ended December 31, 2022, the Partnership paid $8.5 million in managerial assistance fees which reduced the liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statement of Net Assets in Liquidation.

***Partnership Expenses***

The Partnership pays its own operating expenses. GPB is responsible for its or its affiliates' general and administrative costs and expenses and its day-to-day overhead expenses of managing the Partnership and is not entitled to be reimbursed by the Partnership for such expenses other than for the portion of the total compensation of GPB's or its affiliates (including holding companies) officers and employees relating to the time such officers or employees provide In-House services or Operations Support Services to the Partnership or its dealerships. Such expenses are in addition to, and not in lieu of, the Managerial Assistance Fee. "In-House services" include but are not limited to accounting, legal, compliance, information technology, human resources, and operational and management services to the Partnership or the dealerships. Operations Support Services include but are not limited to operational support and consulting services and similar services to, or in connection with, the identification, acquisition, holding and improvement of the dealerships. In addition, GPB pays expenses on the Partnership's behalf when operationally feasible and obtains reimbursement. Partnership expenses included as a component of selling, general and administrative expenses in the Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 were $6.0 million and $1.8 million, respectively. The balance associated with Partnership expenses payable was $0.1 and $0.6 million of December 31, 2022 and 2021, respectively, and was included as a component of due to related parties in the Consolidated Statements of Net Assets in Liquidation. Partnership expenses paid for the year ended December 31, 2022 were $6.9 million, which reduced the liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statements of Net Assets in Liquidation by a corresponding amount. For the year ended December 31, 2021, the Partnership reimbursed Highline $1.2 million for professional fees that are included as a component of selling, general and administrative expenses in the Consolidated Statements of Operations. The partnership expenses paid for by the Partnership to GPB are passed along to vendors that are unrelated parties which are included in general and administrative expenses - corporate in "Footnote 3. Liability for Estimated Costs in Excess of Estimated Receipts During Liquidation".

**NOTES PAYABLE TO RELATED PARTIES**

In 2017, the Partnership entered into two loan agreements with an affiliate of the Partnership, GPB Automotive Income Sub-Fund, Ltd. ("GPB AISF"), an offshore financing facility formed for the benefit of the Partnership, ("AISF Note 5 and AISF Note 6") for a total of $11.8 million and incurred debt issuance costs of $2.0 million. In 2019, the Partnership entered into one loan agreement ("AISF Note 7") with GPB AISF for $3.3 million and incurred debt issuance costs of $0.6 million.

Each AISF note matures four years from the issuance date, and accrues interest at 8.75% per annum, payable monthly in arrears. In July 2021, AISF Note 5 and AISF Note 6 were amended to increase the interest rate to 12.5% and to extend the maturity date to December 2022. Interest expense relating to these loans reflected as a component of interest expense to related parties on the Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 was $1.4 million and $3.3 million, respectively. The amortization of the capitalized debt issuance costs reflected as a component of interest expense to related parties in the Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 was $0.5 million and $1.8 million, respectively. The balance of accrued interest associated with these loans was $2.7 million and $1.9 million as of December 31, 2022 and 2021, respectively, and was included as a component of due to related parties in the Consolidated Statements of Net Assets in Liquidation.

AISF Note 5, AISF Note 6, and AISF Note 7 entered into default in 2021. In August 2021, a waiver for the event of default was issued and the interest payments have been deferred until December 2022 for AISF Note 5, AISF Note 6, and AISF Note 7. Upon maturity, payments have not been made for AISF Note 5 and AISF Note 6. Additional interest has been accrued through June 2023 of $0.8 million for AISF Note 5, AISF Note 6, and AIFS Note 7, as that represents the Partnership's estimate of the expected date of repayment, and was included as a component of due to related parties on the Consolidated Statements of Net Assets in Liquidation as of December 31, 2022 and a component of increase in notes payable - related party on the Statement of Changes in Net Assets in Liquidation.

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Notes payable - related party consisted of the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands) |  |  | **December 31,** | **December 31,** |
| **Note** | **Face Value** | **Maturity Date** | **2022** | **2021** |
| AISF Note 5 | $6556 | 12/31/2022 | $6556 | $6556 |
| AISF Note 6 | 5203 | 12/31/2022 | 5203 | 5203 |
| AISF Note 7 | 3272 | 4/24/2023 | 3272 | 3026 |
| Total |  |  | 15031 | 14785 |
| Less: current portion |  |  |  |  |
| Add: accrued interest in liquidation |  |  | 2650 | 1850 |
| Total notes payable - related party |  |  | $17681 | $16635 |

---

**DUE FROM AFFILIATED COMPANIES**

The Partnership incurred expenses for payroll and employee benefits, professional fees, consulting and outside services, and other services on behalf of affiliated entities. These expenses were initially paid by the Partnership and then charged on a pro-rata basis to each of the other limited partnerships managed by GPB, which operated dealerships. The Partnership had non-interest-bearing receivables from these holding companies for allocated expenses of $1.6 million at December 31, 2020, which is included as a component of due from related parties in the Consolidated Balance Sheet. The receivables as of December 31, 2020, are gross of a $1.2 million allowance for doubtful accounts. In 2021, these balances have been forgiven and a loss was recorded as a component of selling, general and administrative expenses on the Consolidated Statements of Operations for the year ended December 31, 2021.

**OTHER RELATED PARTY TRANSACTIONS**

During 2021 and 2020, certain dealerships owned by the Partnership purchased vehicles from dealerships owned by GPB Holdings, LP, totaling nil and $2.2 million, respectively**.** No such transactions occurred during 2022.

During 2021 and 2020, certain dealerships owned by the Partnership purchased vehicles from a dealership owned by GPB Holdings II, LP, totaling $1.5 million and $1.7 million, respectively**.** No such transactions occurred during 2022.

During 2021 and 2020, certain dealerships owned by the Partnership sold vehicles to a dealership owned by GPB Holdings II, LP, totaling $1.1 million and $0.5 million, respectively. No such transactions occurred during 2022.

The member of the General Partner (David Gentile, "Member") is a former partner of an accounting firm that performed accounting services for the Partnership. The Member's father is also a current partner at the accounting firm. The Partnership recorded professional fees expense reflected as a component of selling, general and administrative expenses in the Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 of nil and $0.3 million, respectively. The Partnership no longer engages the services of this accounting firm.

In October 2020, the Member purchased a car from GPB Prime valued at $0.2 million.

GPB's principals, certain other individuals and entities that have assisted and may in the future assist in our operations are and / or will be members in GPB Auto SLP, LLC, a Delaware limited liability company (the "Special LP"). The Special LP will receive a profit allocation, commonly referred to as "carried interest", from the Partnership in accordance with the waterfall provisions in the LPA. In 2021 and 2020, there have been no profit allocations allocated to the Special LP.

As compensation for the services to be rendered by Highline, the Partnership pays an OSP to Highline for an annual amount agreed to by GPB and Highline, subject to the Board's approval, following Highline's delivery of the annual written budget to GPB detailing the fees, costs and expenses that will be incurred by Highline in providing its Services. The Partnership recorded OSP fees as a component of selling, general and administrative expenses in the Consolidated Statements of Operations of $3.6 million and $1.5 million, for the year ended December 31, 2021 and 2020, respectively.

OSP fees paid for the year ended December 31, 2022 were $1.1 million which reduced the liability for estimated costs in excess of estimated receipts during liquidation in the Consolidated Statements of Net Assets in Liquidation. Additionally, projected OSP fees to

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be paid during liquidation were revised resulting in a further reduction of $1.7 million to the liability for estimated costs in excess of estimated receipts during liquidation in the Consolidated Statements of Net Assets in Liquidation.

***Guarantees***

The Member provided personal guarantees on certain floorplan and real estate loans prior to 2018. The initial amounts guaranteed totaled $48.7 million. Pursuant to the PPM, the Member of the General Partner can charge a fee to the Partnership for providing such guarantee services. The guarantee fees payable to the Member of the General Partner was calculated at $1.0 million based on 1.99% of the amount of the loans initially guaranteed. $1.0 million was due and payable to the Member of the General Partner which is reflected as a component of due to related parties in the Consolidated Statement of Net Assets as of December 31, 2022 and 2021. The guarantee fees are amortized over the life of the loans and were fully amortized in 2021.

**REPURCHASE AGREEMENTS**

***Redeemable Non-Controlling Interests***

In August 2020, the Partnership and Toyota Motor Sales ("TMS") settled a dispute via a confidential settlement arrangement. As part of this resolution, the current CEO of GPB Prime agreed to make an investment of $3.7 million in the subsidiary which holds the Partnership's Toyota dealerships. In connection with the CEO's investment of $3.7 million, the agreement between the Partnership and the CEO provides terms that upon certain triggers, including a mandatory repurchase requirement upon the death of the holder, the Partnership is required to repurchase all of the interest. As a result, the non-controlling interest was adjusted to $4.0 million and was classified as a component of redeemable non-controlling interest in the Consolidated Balance Sheet as of December 31, 2020. For the year ended December 31, 2021 interest expense of approximately $1.2 million was recorded and is included in other income in the Consolidated Statements of Operations. In November 2021, the Partnership paid $5.2 million to satisfy in full, the redeemable non-controlling interest obligation.

The Partnership entered into a repurchase agreement in 2017 with the Former CEO of Automile ("David Rosenberg"), a related party who held a non-controlling interest in a subsidiary of the Partnership. The agreement provides a put repurchase feature, including a mandatory repurchase requirement upon the death of the holder.

On April 1, 2019, the Former CEO of Automile elected to have his interest redeemed. Based on the amended and restated repurchase agreement dated March 1, 2019, the defined purchase price for the interest was set at $23.6 million. This amount was to be paid in four equal installments of $5.9 million, beginning on July 1, 2019 and thereafter annually on April 1, 2020 through April 1, 2022.

Due to the of bank restrictions, see "Footnote 11. Borrowings", the Partnership did not make the required payment due on July 1, 2019. As a result, the amount due on July 1, 2019 of $5.9 million accrued interest at LIBOR plus 5.0% per annum.

The second required payment of $5.9 million, due April 1, 2020, was also not paid, and accrued interest at LIBOR plus 5.0% effective April 2, 2020. The amount of accrued interest as of December 31, 2020 was $0.6 million and is included in current portion of redeemable non-controlling interests in the Consolidated Balance Sheet.

Pursuant to the repurchase agreement, management has determined that no further adjustments to the liability will be required subsequent to the election of the repurchase, other than the accrual of interest, as noted below. As a result, the non-controlling interest is reflected as redeemable non-controlling interest liability of $24.3 million as of December 31, 2020. For the year ended December 31, 2021, an additional accrual of $5.7 million was recorded in the Consolidated Statements of Operations to account for the 2021 interest and a final settlement reached between Mr. Rosenberg and the Partnership further described in "Item 3. Legal Proceedings." In November 2021, the Partnership paid $25.0 million to Mr. Rosenberg to satisfy the outstanding redeemable non-controlling interest liability. In addition, as part of a legal settlement, the Partnership paid $5.0 million to Mr. Rosenberg which is included in selling, general, and administrative expenses included in the Consolidated Statements of Operations.

***Non-Controlling Interests***

The dealerships acquired from the Ron Carter Group each have members holding an aggregate 25% non-controlling interest in those entities.

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An affiliated entity to the Partnership, GPB Holdings II, LP, holds a 33.5% non-controlling interest in GPB Prime. In 2021, as a result of the proceeds from dispositions of dealerships, property and equipment, see "Footnote 5. Dispositions" in "Item 15. Financial Statements and Exhibits." and, the Partnership distributed $188.8 million to GPB Holdings II, LP.

On March 8, 2022, the Partnership and GPB Prime reached an agreement in principle with M&T Bank to allow for an additional $85.0 million distribution to the Partnership and GPB Holdings II, LP, of which $28.5 million was distributed to GPB Holdings II, LP, an affiliated entity to the Partnership which holds a 33.5% non-controlling interest in GPB Prime.

On April 26, 2022, the Partnership and GPB Prime reached an agreement in principle with M&T Bank to allow for an additional $30.0 million distribution to the Partnership and GPB Holdings II, LP, of which $10.1 million was distributed to GPB Holdings II, LP.

On December 27, 2022, the Partnership distributed $0.1 million to the former general manager of two dealerships of the New York Metro reporting unit, who holds 4% non-controlling interest, in the two New York Metro dealerships.

In December 2021, $2.2 million of distributions to non-controlling interests that had yet to be paid were recorded in due to related parties on the Consolidated Statements of Net Assets in Liquidation and subsequently paid in January 2022.

On January 5, 2023, the Partnership and GPB Prime reached an agreement for an additional $24.0 million distribution to the Partnership and GPB Holdings II, LP, of which $8.0 million was distributed to GPB Holdings II, LP.

***Director Independence***

For discussion of our director independence see "Item 10. Director, Executive Officers and Corporate Governance."

***Item 14. Principal Accounting Fees and Services***

**Fees Paid to the Independent Registered Public Accounting Firm**

The Audit Committee appointed the firm EisnerAmper LLP Iselin, New Jersey ("EisnerAmper"), PCAOB identification number 274, as the independent registered public accounting firm for the audit of the consolidated financial statements of the Partnership for the years ending December 31, 2022 and 2021. As our independent registered public accounting firm, EisnerAmper audited our consolidated financial statements for the years ending December 31, 2022 and 2021 and reviewed the related interim quarters.

The table below shows aggregate fees for professional services rendered to the Partnership by EisnerAmper, for years ended December 31:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
| (Dollars in thousands) | **2022** | **2021** |
| Audit Fees | $463 | $1768 |
| Audit-Related Fees |  |  |
| Tax Fees | **—** |  |
| All Other Fees | **—** |  |
| Total | $**463** | $**1768** |

---

*Audit Fees.* Audit fees for the years ended December 31, 2022 and 2021, consisted of fees associated with the audit of the Partnership's consolidated financial statements included in the Partnership's Annual Report on Form 10-K and Registration Statement on Form 10, respectively, and reviews of the consolidated financial statements included in the Partnership's Quarterly Reports on Form 10-Q.

*Audit-Related Fees.* The Partnership did not incur any audit related fees from EisnerAmper for years ended December 31, 2022 or 2021.

*Tax Fees*. The Partnership did not incur any tax fees from EisnerAmper for years ended December 31, 2022 or 2021.

*All Other Fees.* The Partnership did not incur any other fees from EisnerAmper for years ended December 31, 2022 or 2021.

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**PART IV**

***Item 15. Financial Statements and Exhibits***

The following documents are filed as a part of this Annual Report on Form 10-K:

1. All Financial Statements: Consolidated Financial Statements are included herein immediately following the signature page of this report. See Index to Consolidated Financial Statements on page F-1.

---

| | |
|:---|:---|
|  | **Page** |
| [**Report of Independent Registered Public Accounting Firm**](#REPORTOFINDEPENDENTREGISTEREDPUBLICACCOU) | F-1 |
| **Audited Consolidated Financial Statements:** |  |
| [Consolidated Statements of Net Assets in Liquidation as of December 31, 2022](#ConsolidatedStatementofNetAssetsinLiquid) and 2021 | F-3 |
| [Consolidated Statement of Changes in Net Assets in Liquidation as of December 31, 2022](#ConsolidatedStatementofChangesinNetAsset) | F-4 |
| [Consolidated Statements of Operations for the years ended December 31, 2021 and 2020](#ConsolidatedStatementsofOperations_81511) | F-5 |
| [Consolidated Statements of Changes in Partners' Capital for the years ended December 31, 2021 and 2020](#ConsolidatedStatementsofPartnersCapital_) | F-6 |
| [Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020](#ConsolidatedStatementsofCashFlows_318998) | F-7 |
| [Notes to Consolidated Financial Statements](#a1OrganizationNatureofBusinessandRecentE) | F-9 |

---

2. Financial Statement Schedules: None

3. Exhibits: The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed with the SEC, as indicated in the description of each.

---

| | |
|:---|:---|
| **Exhibit Number** | **Exhibit Description** |
| 2.1 | [Purchase Agreement, dated as of September 12, 2021, by and between GPB Portfolio Automotive, LLC, Capstone Automotive Group, LLC, Capstone Automotive Group II, LLC, Automile Parent Holdings, LLC, Automile TY Holdings, LLC, Prime Real Estate Holdings, LLC and Group 1 Automotive, Inc. (incorporated herein by reference to Exhibit 2.1 to the Partnership's Quarterly Report on Form 10-Q filed with the SEC on November 15, 2021).](https://www.sec.gov/Archives/edgar/data/1578742/000141057821000261/tmb-20210930xex2d1.htm) |
| 3.1 | [Certificate of Limited Partnership of GPB Automotive Portfolio, LP (incorporated herein by reference to Exhibit 3.1 to the Partnership's Registration Statement on Form 10 filed with the SEC on May 14, 2021).](https://www.sec.gov/Archives/edgar/data/1578742/000110465921066821/tm2114875d1_ex3-1.htm)  |
| 4.1 | [Fifth Amended and Restated Agreement of Limited Partnership of GPB Automotive Portfolio, LP, dated April 27, 2018 (incorporated herein by reference to Exhibit 4.1 to the Partnership's Registration Statement on Form 10 filed with the SEC on May 14, 2021).](https://www.sec.gov/Archives/edgar/data/1578742/000110465921066821/tm2114875d1_ex4-1.htm) |
| 4.1.2 | [Fifth Amended and Restated Class A Private Placement Memorandum GPB Automotive Portfolio, LP, dated July 2018 (incorporated herein by reference to Exhibit 4.1.2 to the Partnership's Registration Statement on Form 10 filed with the SEC on May 14, 2021).](https://www.sec.gov/Archives/edgar/data/1578742/000110465921066821/tm2114875d1_ex4-1x2.htm) |
| 4.1.3 | [Fifth Amended and Restated Class B Private Placement Memorandum GPB Automotive Portfolio, LP, dated July 2018 (incorporated herein by reference to Exhibit 4.1.3 to the Partnership's Registration Statement on Form 10 filed with the SEC on May 14, 2021).](https://www.sec.gov/Archives/edgar/data/1578742/000110465921066821/tm2114875d1_ex4-1x3.htm) |
| 10.1 + | [Management Services Agreement, by and between GPB Automotive Portfolio, LP and Highline Management Inc., dated January 1, 2020 (incorporated herein by reference to Exhibit 10.13 to the Partnership's Registration Statement on Form 10 filed with the SEC on May 14, 2021).](https://www.sec.gov/Archives/edgar/data/1578742/000110465921066821/tm2114875d1_ex10-12.htm) |
| 10.2\* | [Variable Rate Demand Note, by and between AMR Auto Holdings – SM, LLC and M&T Bank Corporation, dated December 30, 2022.](tmb-20221231xex10d2.htm)<br>[Parent Holdings, LLC, Automile TY Holdings, LLC, AMR Real Estate Holdings, LLC and M&T Bank Corporation dated January 2022.](tmb-20221231xex10d2.htm) |
| 21 | [Subsidiaries of GPB Automotive Portfolio, LP (incorporated by reference to Exhibit 21 to the Partnership's Annual Report on Form 10-K filed with the SEC on April 14, 2022).](https://www.sec.gov/Archives/edgar/data/1578742/000141057822000903/tmb-20211231xex21.htm) |
| 31.1\* | [Certification pursuant to Section 302 of Sarbanes-Oxley Act.](tmb-20221231xex31d1.htm) |
| 31.2\* | [Certification pursuant to Section 302 of Sarbanes-Oxley Act.](tmb-20221231xex31d2.htm) |
| 32.1\*\* | [Certification pursuant to Section 906 of Sarbanes-Oxley Act.](tmb-20221231xex32d1.htm) |
| 32.2\*\* | [Certification pursuant to Section 906 of Sarbanes-Oxley Act.](tmb-20221231xex32d2.htm) |
| 101.INS | XBRL Instance Document. |
| 101.SCG | XBRL Taxonomy Extension Schema. |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase. |

---

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101. DEF XBRL Taxonomy Extension Definition Linkbase. <br> 101.LAB XBRL Taxonomy Extension Label Linkbase. <br> 101.PRE XBRL Taxonomy Extension Presentation Linkbase.

\* Filed herewith

\*\* Furnished herewith.

+ This exhibit is a management contract or compensatory plan or arrangement.

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Board of Directors of Highline Management, Inc., and Limited Partners of GPB Automotive Portfolio, LP

***Opinion on the Financial Statements***

We have audited the accompanying consolidated statements of net assets in liquidation of GPB Automotive Portfolio, LP (the "Partnership") as of December 31, 2022 and 2021, and the related consolidated statement of changes in net assets in liquidation for the year ended December 31, 2022, and the consolidated statements of operations, changes in partners' capital, and cash flows for the years ended December 31, 2021 and 2020, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the consolidated net assets in liquidation of the Partnership as of December 31, 2022 and 2021, and the consolidated results of changes in its net assets in liquidation for the year ended December 31, 2022, and the results of its operations and cash flows for the years ended December 31, 2021 and 2020, in conformity with accounting principles generally accepted in the United States of America.

***Basis of Accounting***

As discussed in Notes 1 and 2 to the financial statements, the Board of Directors of Highline Management, Inc. approved the plan of liquidation effective on December 28, 2021, and the Partnership determined that liquidation is imminent. As a result, the Partnership changed its basis of accounting on December 31, 2021, from the going concern basis to a liquidation basis.

***Basis for Opinion***

These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on the Partnership's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Partnership is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

***Critical Audit Matter***

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

**Liquidation Basis of Accounting – estimated liquidation completion date and estimated selling, general and administrative costs expected to be incurred during the liquidation process**

As discussed in Notes 1 and 2 to the financial statements, the Board of Directors of Highline Management, Inc. commenced a plan to liquidate the Partnership's remaining net assets and wind up the Partnership on December 28, 2021. As a result, the Partnership changed

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its basis of accounting, using a convenience date of December 31, 2021, from the going concern basis to a liquidation basis in accordance with accounting principles generally accepted in the United States of America. Under the liquidation basis, the remeasurement of the Partnership's assets and liabilities through the anticipated date of liquidation include management's estimates and assumptions of: (i) income to be generated from the remaining assets until the anticipated date of sale or disposal; (ii) net sales proceeds to be received for assets at the time of sale or disposal; (iii) amounts expected to be incurred for operating expenses during liquidation; and (iv) amounts expected to be received or paid to settle assets and liabilities. Under the liquidation basis of accounting, the accounting estimates that require management's most significant, difficult and subjective judgements include the estimated date the liquidation process will be complete, and the estimated amount of selling, general and administrative costs – corporate, including legal costs, expected to be incurred during the liquidation process. The Partnership estimated the date liquidation will be complete is December 31, 2024, and the Partnership estimated they will incur selling, general and administrative costs - corporate of $24.6 million through that estimated date of liquidation, which is presented as a component of the liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statement of Net Assets in Liquidation as of December 31, 2022.

We identified the date the liquidation process will be complete and the estimated amount of selling, general and administrative costs – corporate, expected to be incurred during the liquidation process as critical audit matters due to the significant judgements by management in projecting the time it will take to complete the liquidation process and the judgements included in estimating the amount of selling, general and administrative costs expected to be incurred during the liquidation process. This estimate included significant assumptions related to legal costs expected to be incurred to defend the Partnership and its affiliates against the various pending legal matters described in Note 17 to the financial statements. This required a high degree of auditor judgement, subjectivity, and effort in performing procedures and evaluating audit evidence related to (i) management's judgements around key events that may delay the liquidation process, and (ii) the extent of the selling, general and administrative costs – corporate to be incurred by the Partnership, including legal costs charged to the Partnership to defend against the pending legal matters during the liquidation process.

Addressing the critical audit matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included, among others, (i) testing management's process for and evaluating management's judgements used in determining the date the liquidation process will be complete and those used in developing the projection of selling, general and administrative costs – corporate , including legal costs, expected to be incurred during the liquidation process, (ii) testing the completeness and accuracy of the data used by management in developing the estimates, (iii) evaluating information received directly from external legal counsel to corroborate the information used by Management in the development of the estimates and (iv) evaluating the adequacy of the Partnership's disclosures around the estimates. Evaluating management's assumptions related to the estimated date the liquidation process will be complete involved evaluating whether the assumptions used by management were reasonable considering (i) the events identified that will impact the timing of Management's liquidation plan; and (ii) whether the assumptions used to evaluate the events were consistent with information received from third parties. Evaluating management's assumptions related to the estimated selling, general and administrative costs – corporate, including legal costs expected to be incurred during liquidation involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past legal costs incurred by the Partnership; and (ii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

/s/ EisnerAmper LLP

We have served as the Partnership's auditor since 2018.

EISNERAMPER LLP

Iselin, New Jersey

March 28, 2023

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**GPB AUTOMOTIVE PORTFOLIO, LP AND SUBSIDIARIES**

**Consolidated Statement of Net Assets in Liquidation**

**(Liquidation Basis)**

(Dollars in thousands)

---

| | | |
|:---|:---|:---|
|  | **December 31,**  | **December 31,**  |
|  | **2022** | **2021** |
| **Assets** |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $541873 | $550048 |
| &nbsp;&nbsp;Restricted cash | 21975 | 41400 |
| &nbsp;&nbsp;Contracts in transit | 990 | 546 |
| &nbsp;&nbsp;Receivables | 3022 | 8639 |
| &nbsp;&nbsp;Property |  | 1230 |
| &nbsp;&nbsp;Assets held for sale | 4874 | 34213 |
| &nbsp;&nbsp;Other assets | 2316 | 9134 |
| Total assets | $575050 | $645210 |
| **Liabilities** |  |  |
| &nbsp;&nbsp;Floorplan payable | $2514 | $3373 |
| &nbsp;&nbsp;Accounts payable | 1597 | 6458 |
| &nbsp;&nbsp;Accrued expenses and other liabilities | 3711 | 16336 |
| &nbsp;&nbsp;Liabilities held for sale | 1127 | 2392 |
| &nbsp;&nbsp;Notes payable - related party | 17682 | 16635 |
| &nbsp;&nbsp;Operating lease liability | 928 | 1073 |
| &nbsp;&nbsp;Liability for estimated costs in excess of estimated receipts during liquidation | 22573 | 51061 |
| &nbsp;&nbsp;Distributions payable for tax withholding |  | 6865 |
| &nbsp;&nbsp;Due to related parties | 2471 | 5256 |
| Total liabilities | 52603 | 109449 |
| Net assets in liquidation: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net assets attributable to the Partnership in liquidation | 500865 | 479333 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net assets attributable to the non-controlling interests in liquidation | 21582 | 56428 |
| Total net assets in liquidation | $522447 | $535761 |

---

See Notes to Consolidated Financial Statements.

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**GPB AUTOMOTIVE PORTFOLIO, LP AND SUBSIDIARIES**

**Consolidated Statement of Changes in Net Assets in Liquidation**

**(Liquidation Basis)**

(Dollars in thousands)

---

| | |
|:---|:---|
|  | **Year ended**<br> **December 31,** |
|  | **2022** |
| Net assets in liquidation, beginning of year | $535761 |
| **Changes in assets and liabilities in liquidation:** |  |
| &nbsp;&nbsp;Increase in receivables | 1872 |
| &nbsp;&nbsp;Increase in assets held for sale | 1091 |
| &nbsp;&nbsp;Increase in accounts payable | 6 |
| &nbsp;&nbsp;Decrease in accrued expenses and other liabilities | 10865 |
| &nbsp;&nbsp;Increase in notes payable - related party | (1047) |
| &nbsp;&nbsp;Decrease in liability for estimated costs in excess of estimated receipts during liquidation | 13885 |
| Net changes in liquidation value | 26672 |
| **Changes in net assets in liquidation resulting from settlement of assets and liabilities:** |  |
| &nbsp;&nbsp;Proceeds received in excess of assets recorded | 6248 |
| &nbsp;&nbsp;Payments made in excess of liabilities recorded | (6237) |
| &nbsp;&nbsp;Tax distributions made in excess of liabilities recorded | (1411) |
| &nbsp;&nbsp;Distributions to non-controlling interests | (38586) |
| Changes in net assets in liquidation | (13314) |
| Net assets in liquidation, end of year | $522447 |

---

See Notes to Consolidated Financial Statements.

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**GPB AUTOMOTIVE PORTFOLIO, LP AND SUBSIDIARIES**

**Consolidated Statements of Operations**

(Dollars in thousands)

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,**  | **Years Ended December 31,**  |
|  | **2021** | **2020** |
| Revenues: |  |  |
| &nbsp;&nbsp;New vehicle retail sales | $924310 | $1228612 |
| &nbsp;&nbsp;Used vehicle retail sales | 552830 | 687444 |
| &nbsp;&nbsp;Used vehicle wholesale sales | 93567 | 98017 |
| &nbsp;&nbsp;Service, body, and parts sales | 207455 | 268764 |
| &nbsp;&nbsp;Finance and insurance sales | 77365 | 94412 |
| Total revenues | 1855527 | 2377249 |
| Costs of sales: |  |  |
| &nbsp;&nbsp;New vehicle retail cost | 829732 | 1148887 |
| &nbsp;&nbsp;Used vehicle retail cost | 506953 | 638750 |
| &nbsp;&nbsp;Used vehicle wholesale cost | 82543 | 94299 |
| &nbsp;&nbsp;Service, body, and parts cost | 87302 | 116835 |
| &nbsp;&nbsp;Total cost of sales | 1506530 | 1998771 |
| Gross profit | 348997 | 378478 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;Selling, general and administrative expenses | 284988 | 308396 |
| (Gain) loss on sale of dealerships, property and equipment | (313441) | 13030 |
| &nbsp;&nbsp;Managerial assistance fee, related party | 12162 | 12934 |
| &nbsp;&nbsp;Rent expense | 6109 | 8331 |
| &nbsp;&nbsp;Asset impairment | 1758 | 3784 |
| &nbsp;&nbsp;Depreciation and amortization | 9124 | 11337 |
| Total operating expenses | 700 | 357812 |
| Operating income | 348297 | 20666 |
| Other income (expense): |  |  |
| &nbsp;&nbsp;Floorplan interest | (3048) | (10502) |
| &nbsp;&nbsp;Interest expense | (8620) | (13669) |
| &nbsp;&nbsp;Interest expense to related parties | (2906) | (5894) |
| &nbsp;&nbsp;Interest income |  | 255 |
| &nbsp;&nbsp;Interest income from related parties |  | 78 |
| &nbsp;&nbsp;Gain on forgiveness of PPP loans | 19811 |  |
| &nbsp;&nbsp;Other (expense) income | (1626) | 1632 |
| Total other income (expense), net | 3611 | (28100) |
| Net income (loss) | 351908 | (7434) |
| Net income attributable to non-controlling interests | 118276 | 11873 |
| Net income (loss) attributable to the Partnership | $233632 | $(19307) |

---

See Notes to Consolidated Financial Statements.

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**GPB AUTOMOTIVE PORTFOLIO, LP AND SUBSIDIARIES**

**Consolidated Statements of Changes in Partners' Capital**

(Dollars in thousands)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **GPB**<br>**Auto**<br>**SLP, LLC** | **Class A**<br>**Limited**<br>**Partners** | **Class A-1**<br>**Limited**<br>**Partners** | **Class B**<br>**Limited**<br>**Partners** | **Class B-1**<br>**Limited**<br>**Partners** | **Total**<br>**Controlling**<br>**Interests** | **Non-**<br>**Controlling**<br>**Interests** | <br>**Total** |
| **Partners' capital - December 31, 2019** | $— | $188951 | $85151 | $38429 | $16061 | $328592 | $124226 | $452818 |
| Partners' capital contributions |  |  |  |  |  |  | 345 | 345 |
| Unit issuance costs |  |  |  | (300) | (120) | (420) |  | (420) |
| Distributions |  |  |  |  |  |  | (5370) | (5370) |
| Net (loss) income |  | (11381) | (4857) | (2246) | (823) | (19307) | 11873 | (7434) |
| **Partners' capital - December 31, 2020** | $— | $177570 | $80294 | $35883 | $15118 | $308865 | $131074 | $439939 |
| Partners' capital contributions |  |  |  |  |  |  | 342 | 342 |
| Unit issuance costs |  |  |  | (16) | (9) | (25) |  | (25) |
| Distributions |  | (3948) | (1785) | (798) | (336) | (6867) | (191809) | (198676) |
| Net income |  | 134080 | 60817 | 27818 | 10917 | 233632 | 118276 | 351908 |
| **Partners' capital - December 31, 2021 (see Footnote 4)** | $— | $307702 | $139326 | $62887 | $25690 | $535605 | $57883 | $593488 |

---

See Notes to Consolidated Financial Statements.

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**GPB AUTOMOTIVE PORTFOLIO, LP AND SUBSIDIARIES**

**Consolidated Statements of Cash Flows**

(Dollars in thousands)

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,**  | **Years Ended December 31,**  |
|  | **2021** | **2020** |
| **Cash flows from operating activities:** |  |  |
| Net income (loss) | $351908 | $(7434) |
| Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 7292 | 9331 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of right-of-use assets - finance | 1832 | 2006 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of right-of-use assets - operating | 4618 | 4951 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of capitalized guarantee costs in interest expense to related party | 62 | 127 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt issuance costs in interest expense to related party | 509 | 1849 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt issuance costs in interest expense | 3493 | 1010 |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset impairment | 1758 | 3784 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on disposal of property and equipment, net | (26058) | 4644 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on disposal of dealerships, net | (287383) | 8386 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Decrease) increase in interest rate swap liability in interest expense | (836) | 836 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bad debt (recovery) expense | (946) | 2287 |
| &nbsp;&nbsp;&nbsp;&nbsp;Forgiveness of debt | (19811) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other adjustments to reconcile net loss | 2108 | 278 |
| Changes in operating assets and liabilities, net of effects from business combinations: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Contracts in transit | 37918 | 17413 |
| &nbsp;&nbsp;&nbsp;&nbsp;Receivables | 28804 | 8769 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due from related parties | 283 | 3335 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | 137799 | 169214 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (1497) | 4776 |
| &nbsp;&nbsp;&nbsp;&nbsp;Leased rental/service vehicles | 12463 | 3170 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | (1638) | (2387) |
| &nbsp;&nbsp;&nbsp;&nbsp;Floorplan payable, trade, net | (11548) | (35525) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (28788) | (231) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | (13938) | (21243) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments on lease liabilities - operating | (4313) | (4570) |
| &nbsp;&nbsp;&nbsp;&nbsp;Due to related parties | (664) | (297) |
| &nbsp;&nbsp;&nbsp;&nbsp;Leased vehicle liability | (12510) | (3075) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 7911 | 796 |
| Net cash provided by operating activities | 188828 | 172200 |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of property and equipment | (18449) | (8364) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from disposition of property and equipment | 285189 | 74150 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from disposition of dealerships | 629580 | 49479 |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayment (payment) from note receivable from related party | 3700 | (3700) |
| Net cash provided by investing activities | 900020 | 111565 |

---

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**GPB AUTOMOTIVE PORTFOLIO, LP AND SUBSIDIARIES**

**Consolidated Statements of Cash Flows (continued)**

(Dollars in thousands)

---

| | | |
|:---|:---|:---|
|  | **Years Ended December 31,**  | **Years Ended December 31,**  |
|  | **2021** | **2020** |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments of floorplan debt, non-trade, net | (162219) | (140876) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from long-term debt |  | 33148 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments of long-term debt | (244690) | (70939) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments of finance lease liabilities | (2477) | (1454) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments of deferred financing costs | (2190) | (782) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments of notes payable to related parties |  | (33391) |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital contributions from non-controlling interests | 342 | 345 |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital contributions from redeemable non-controlling interests |  | 3700 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unit issuance costs | (25) | (420) |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions to redeemable non-controlling interests | (31927) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions to non-controlling interests | (189626) | (5370) |
| Net cash used in financing activities | (632812) | (216039) |
| Net increase in cash | 456036 | 67726 |
| Cash, beginning of year | 135412 | 67686 |
| Cash, end of year | $591448 | $135412 |
| **Supplemental cash flow information:** |  |  |
| &nbsp;&nbsp;Reconciliation of cash and restricted cash: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash | $550048 | $120985 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash, net of current portion | 41400 | 14427 |
| Total cash and restricted cash | $591448 | $135412 |
| **Supplemental disclosure of cash flow information:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash payments for interest | $14947 | $32036 |
| **Supplemental schedule of non-cash investing and financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions to non-controlling interests included in due to related parties | $2183 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions to partners' included in distributions payable for tax withholding | 6867 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Note receivable on disposition of property |  | 2000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of property and equipment included in accounts payable |  | 1252 |

---

See Notes to Consolidated Financial Statements.

[**Table of Contents**](#TOC)

**1. Organization, Nature of Business, Liquidation Events, and Significant Legal Matters**

***Organization***

GPB Automotive Portfolio, LP (the "Partnership", "we", "us", "our" or the "Registrant") is a holding company which was organized as a Delaware limited partnership on May 27, 2013, and commenced operations on that date.

GPB Capital Holdings, LLC ("General Partner", "GPB Capital", "Capital Holdings", or "GPB"), a Delaware limited liability company and registered investment adviser, is the Partnership's General Partner pursuant to the terms of the Fifth Amended and Restated Agreement of Limited Partnership, dated April 27, 2018 (as the same may be amended from time to time, the "LPA"). Pursuant to the LPA, GPB conducts and manages our business. Robert Chmiel, GPB's Chief Executive Officer and Chief Financial Officer, currently serves as the sole manager of GPB under the term of GPB's limited liability company agreement. However, as further described below under "SEC Action, Monitorship and Related Matters - Highline Management, Inc.," GPB has entered into a management services agreement with GPB's wholly owned subsidiary, Highline Management, Inc. ("Highline"), pursuant to which Highline provides certain management services to GPB to assist GPB in fulfilling GPB's duties as the Partnership's General Partner.

Until the sale of substantially all of the Partnership's assets described below under "Liquidation Basis of Accounting - Sale of Substantially All of the Partnership's Assets," we owned and operated multiple retail automotive dealerships, including in most cases their related real estate, and sought to further develop their operations to increase cash flow and income from operations on behalf of the Limited Partners, as defined below.

We reported all of our businesses as a single segment for accounting purposes based on the financial information that was available and evaluated by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources and in assessing performance of the Partnership.

***Nature of Business***

The Partnership's principal business was the retail sale of automobiles in the northeast United States. The Partnership offered a diversified range of automotive products and services, including new vehicles, used vehicles, parts and service and automotive finance and insurance products, which include vehicle service and other protection products, as well as the arranging of financing for vehicle purchases through third party finance sources. In 2021, the Partnership disposed of 28 dealerships and any attendant real estate, as further discussed below. The Partnership is continuing to operate one dealership in Manchester, New Hampshire, AMR Auto Holdings – SM, LLC d/b/a Prime Subaru Manchester ("Prime Subaru Manchester") while awaiting manufacturer approval for the transfer of this dealership.

***Highline Management, Inc.***

In January 2020, Highline was formed as a wholly owned subsidiary of GPB, to provide operational support services to the GPB-managed partnerships. Highline's formation followed the completion of an independent special investigation by outside legal counsel as a response to recommendations made by GPB's predecessor Audit Committee to certain allegations brought against the General Partner as described above and in "Item 3. Legal Proceedings." The predecessor Audit Committee made recommendations which led to a series of restructuring activities undertaken to accomplish a number of objectives including, but not limited to, the: (i) further enhancement of the corporate management structure, with additional professionals knowledgeable in the industry and commensurate with the complexity and demands of the business of the Partnership; (ii) formalization, to the extent possible, of the commitment to share human resources, facilities and operating assets among and between the entities that comprise the General Partner and the Partnership; and (iii) further development of the independent oversight of the corporate governance structure and framework to help enable the Partnership to achieve its goals, control risks and compliance with laws, rules and regulations which govern the management of the Partnership. To that end, the initial five member Board (now four members, see "Item 10. Directors, Executive Officers and Corporate Governance") was appointed, three of whom are "independent" as that term is used in the NYSE listed company manual. To address its oversight and governance purposes, the Board established three committees, consisting entirely of the independent members, including an Audit Committee, a Governance Committee and a Compensation Committee, as more fully described below. Additionally, these restructuring activities were designed and implemented, in part, to establish independent committees responsible for overseeing GPB's management related to the Partnership's affairs, establish additional layers of responsibility within the Partnership's governance structure and enhance internal controls.

As a key feature of this restructuring, Highline was formed to provide GPB with management and operation support services for the GPB-managed partnerships. Highline currently oversees, on GPB's behalf, all day-to-day functions of the Partnership and its

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subsidiaries, including management of all underlying assets, human capital, accounting and financial reporting, and operations pursuant to a Management Services Agreement ("MSA"). As a result, Highline provides independent oversight and review of most aspects of our operations.

Highline's bylaws require a majority vote for any act of the Board except with respect to approval or adoption of any MSA, Resource Sharing Agreement or other similar agreement between Highline and GPB (or any amendment thereto), which in all instances must be approved by a majority of the independent directors. GPB has nominated and elected the initial directors to the Board.

Highline has agreed to provide the following services ("Services") to the Partnership (but not to the dealerships owned by the Partnership, which are managed day-to-day by their own management teams) pursuant to the MSA:

● Manage and oversee the day-to-day affairs and operations of the Partnership including developing corporate strategy and business plans, and managing annual budgets;

● Manage, oversee and facilitate the accounting and payment functions, including necessary cash management services with respect to the operations of the Partnership;

● Manage and oversee the administration, operations, financial accounting and financial reporting for the Partnership, including managing the preparation of financial statements for the Partnership;

● Manage the process for the audits of the financial statements of the Partnership;

● Manage and oversee the process of obtaining third-party valuations of the Partnership in accordance with the LPA and the Class A and Class A-1 Private Placement Memorandum (the "PPM") dated July 2018;

● Communicate regularly and provide written reports (no less frequently than monthly) concerning the financial status and financial performance of the Partnership to GPB, including providing regular (no less frequent than monthly) asset management reports and updated financial models for the Partnership;

● Provide periodic market data and information (no less frequent than quarterly) relating to the businesses of the Partnership reasonably requested by GPB for investor marketing and communication purposes;

● Review and approve "Significant Transactions" approved by GPB's Acquisition Committee. A Significant Transaction shall mean (i) a transaction that meets the definition of a Significant Subsidiary contained in Regulation S-X under federal securities laws; or (ii) based on criteria otherwise determined by the Board;

● Review and approve any material change in the investment strategy of the Partnership; and

● Perform such other services as may be reasonably requested by GPB and which are reasonably acceptable to Highline.

GPB, through its Acquisition Committee, controls all major asset acquisition and divestiture decisions concerning the Partnership, subject to the approval by the Board of any such transaction that constitutes a Significant Transaction as described above. Highline's responsibilities set forth above encompass reporting and monitoring distributions to our Limited Partners.

Highline provides certain services to GPB as set forth in the MSA dated January 1, 2020. The May 2020 Amendment to the MSA set forth that the MSA would be in effect for an initial three-year term, effective as of January 1, 2020 through December 31, 2022. The MSA was subsequently amended in August 2021, under which the initial term of the MSA was extended as a five-year term, through December 31, 2024.

Pursuant to the amended order of the EDNY Court on April 14, 2021, operational and financial decisions to be made by Highline regarding the affairs of the Partnership are subject to the same authority of the Monitor as are decisions to be made by GPB.

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***Sale of Substantially All of the Partnership's Assets***

On September 12, 2021, the Partnership and certain of its direct and indirect subsidiaries entered into a Purchase Agreement (the "Purchase Agreement") with Group 1 Automotive, Inc., a Delaware corporation ("Group 1"). Pursuant to the Purchase Agreement, the Partnership agreed to sell substantially all of the assets of the Partnership, including, but not limited to the Partnership's real property (including entities owning real property), vehicles, parts and accessories, goodwill, permits, intellectual property and substantially all contracts, that relate to their automotive dealership and collision center businesses, subject to obtaining the relevant manufacturer approvals, and excluding certain assets such as cash and certain receivables (the "Group 1 Sale"). The Purchase Agreement was approved by GPB (via Highline) and the Monitor (as defined below).

In November 2021, the Partnership obtained the necessary manufacturer approvals and completed the sale of substantially all of its assets, including real estate, three collision centers, and 27 of its 29 dealerships to Group 1. In December 2021, the Partnership obtained the necessary manufacturer approval and completed the sale of its 28th dealership and the related real estate to a third-party.The aggregate consideration for all of the 28 dealership purchases and real-estate was $824.9 million after taking into account the payoff of floorplan financing and mortgage debt outstanding at the time of the Group 1 Sale. The aggregate consideration was subject to customary post-close adjustments as defined in the Purchase Agreement.

The 29th dealership, Prime Subaru Manchester, has not received approval for transfer from its Subaru distributor in New Hampshire, however, the closing consideration of $33.4 million was put in escrow by Group 1 and was released to the Partnership on April 12, 2022. The Partnership continues to own and operate Prime Subaru Manchester while awaiting approval of the ownership transfer. See "Footnote 17. Commitments and Contingencies" for more information on the Prime Subaru Manchester transaction.

The aggregate consideration of $824.9 million for the sale of 28 dealerships and real-estate includes $763.6 million received directly by GPB Prime and was therefore, restricted from distribution to the Partnership or any of its affiliates pursuant to the terms of the M&T Credit Agreement. On December 28, 2021, the Partnership and GPB Prime Holdings, LLC ("GPB Prime"), an entity in which the Partnership Holds a 66.5% interest, reached an agreement in principle with M&T Bank Corporation ("M&T Bank") to allow for a $570.0 million distribution to the Partnership and GPB Holdings II, LP, of which $188.8 million was distributed to GPB Holdings II, LP, an affiliated entity to the Partnership which holds a 33.5% non-controlling interest in GPB Prime.

In January 2022, the Partnership and GPB Prime entered into a Twelfth Amendment (the "Amendment") to the M&T Credit Agreement. The Amendment, among other things, reaffirmed the agreement in principle which (i) allows for distribution to the Partnership and GPB Holdings II, LP of $570.0 million, representing a portion of the proceeds received from the Group 1 Sale; (ii) changes the definition of floor plan borrowers to mean Prime Subaru Manchester; (iii) decreases the credit limit that may be borrowed for vehicle floorplan financing from $360.0 million to up to $8.8 million; and (iv) replaces the benchmark interest rates for borrowings from the London Interbank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR) subject to certain adjustments in the Amendment. The M&T Credit Agreement was amended primarily to reflect that we own only one new vehicle dealership and no longer require the same amount of debt financing as was previously in place. Proceeds from the Group 1 Sale were used in part to repay all other amounts outstanding under the M&T Credit Agreement.

***Plan of Liquidation***

Concurrent with reaching an agreement in principle with M&T Bank on December 28, 2021, to allow for distributions to the Partnership and GPB Holdings II, LP, Highline, and on behalf of GPB, caused us to commence a plan to liquidate the Partnership's remaining net assets and wind up the Partnership ("Plan of Liquidation"). Highline reached its decision to commence the Plan of Liquidation because of, among other things, the advanced stage of the Group 1 Sale, the agreement in principle with M&T Bank to allow for a $570.0 million distribution, and the fact that no further plans to deploy capital in any other investments are contemplated. In accordance with US GAAP, liquidation of the Partnership was thereby determined to be imminent, resulting in the need to adopt the liquidation basis of accounting as of December 28, 2021.

The Highline board of directors (the "Board") formally approved the commencement of the Plan of Liquidation at the Board meeting held on February 3, 2022. The Board concluded that it was appropriate to adopt liquidation accounting in accordance with US GAAP for financial reporting purposes, using a "convenience date" of December 31, 2021.

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The Partnership cannot predict the timing or amount of any distributions to its limited partners (the "Limited Partners"), because uncertainties exist as to: (i) the ultimate amount of expenses associated with implementing its monetization strategy, liabilities, operating costs, and amounts to be set aside for claims; (ii) obligations and provisions during the liquidation and winding-up process; and (iii) the timing and outcome of the pending litigation, and the related timing to complete such transactions during the overall liquidation process. Nevertheless, it is expected that the liquidation will be complete by December 31, 2024.

***Prior to Implementation of the Plan of Liquidation***

The Consolidated Financial Statements for the periods ended just prior to December 31, 2021, have been prepared on the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and were prepared in accordance with US GAAP.

***Following the Implementation of the Plan of Liquidation***

Highline's approval to commence the Plan of Liquidation and to dissolve substantially all of the net assets of the Partnership on December 28, 2021, requires the financial statements to be prepared in accordance with the liquidation basis of accounting as defined in the FASB ASC 205-30 *Financial Statement Presentation, Liquidation Basis of Accounting*. Liquidation is considered imminent when the likelihood is remote that we will return from liquidation and either (a) the Plan of Liquidation is approved by the person or persons with the authority to make such a plan effective and the likelihood is remote that the execution of the Plan of Liquidation will be blocked by other parties, or (b) the Plan of Liquidation is being imposed by other forces (for example, involuntary bankruptcy).

The liquidation basis of accounting differs significantly from the going concern basis, as summarized below.

Under the liquidation basis of accounting, the consolidated balance sheet and consolidated statements of operations, changes in partner' capital and cash flows are no longer presented.

The liquidation basis of accounting requires a statement of net assets in liquidation, a statement of changes in net assets in liquidation and all disclosures necessary to present relevant information about our expected resources in liquidation. The liquidation basis of accounting may only be applied prospectively from the date liquidation becomes imminent and the initial statement of changes in net assets in liquidation may present only changes in net assets that occurred during the period since that date.

Under the liquidation basis of accounting, our assets are measured at their estimated net realizable value, or liquidation value, which represents the amount of their estimated cash proceeds or other consideration from liquidation, based on current contracts, estimates and other indications of sales value, and includes assets held for sale. In developing these estimates, we utilized the expertise of members of the Board , and forecasts generated by our management. Estimates for the liquidation value of Prime Subaru Manchester were determined through a combination of historical and projected business cash flows. All estimates by nature involve a large degree of judgement and sensitivity to the underlying assumptions.

Under the liquidation basis of accounting, we recognize liabilities as they would have been recognized under the going concern basis adjusted for the timing assumptions related to the liquidation process and they will not be reduced to expected settlement values prior to settlement. Our liabilities are derecognized when we pay the obligation or when we are legally released from being the primary obligor under the liability.

The valuation of our assets and liabilities, as described above, represents estimates, based on present facts and circumstances, of the net realizable value of the assets and costs associated with carrying out the Plan of Liquidation. The actual values and costs associated with carrying out the Plan of Liquidation may differ from amounts reflected in the accompanying Consolidated Financial Statements because of the Plan of Liquidation's inherent uncertainty. These differences may be material. In particular, these estimates will vary with the length of time necessary to complete the Plan of Liquidation. It is currently anticipated that a majority of the assets we owned on the date the Plan of Liquidation was approved by Highline will be sold by June 30, 2024, with liquidation to be complete by December 31, 2024, however, no assurances can be provided that this date will be met. This date was determined through management consultation with the Board, consultation with the Monitor and the Company's external counsel and contemplates such matters as the sale of Prime Subaru Manchester, and as discussed further in "Footnote 17. Commitments and Contingencies", the timing of David Gentile's criminal trial and outcome and the settling of pending litigation as the main components driving the estimate on timing of complete liquidation.

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Net assets in liquidation represents the estimated liquidation value to holders of Units upon liquidation. It is not possible to predict with certainty the timing or aggregate amount which may ultimately be distributed to our Limited Partners and no assurance can be given that the distributions will equal or exceed the estimate presented in these Consolidated Financial Statements.

***New Accounting Pronouncements***

As a result of adopting the liquidation basis of accounting, we believe no new accounting pronouncements will have a material impact on our consolidated net assets in liquidation or consolidated changes in net assets in liquidation.

***Federal Matters***

On February 4, 2021, the Securities and Exchange Commission (the "SEC") filed a contested civil proceeding (the "SEC Action") against GPB, Ascendant Capital, LLC ("Ascendant"), Ascendant Alternative Strategies, LLC ("AAS"), David Gentile, Jeffry Schneider and Jeffrey Lash in the United States District Court for the Eastern District of New York (the "EDNY Court"). No GPB-managed partnership is a named defendant. The SEC Action alleges several violations of the federal securities laws, including securities fraud. The SEC is seeking disgorgement and civil monetary penalties, among other remedies.

Also, on February 4, 2021, the U.S. Attorney's Office for the Eastern District of New York (the "USAO") brought a criminal indictment against Mr. Gentile, Mr. Schneider, and Mr. Lash (the "Criminal Case"). The indictment in the Criminal Case alleges conspiracy to commit securities fraud, conspiracy to commit wire fraud, and securities fraud against all three individuals. Mr. Gentile and Mr. Lash were also charged with two counts of wire fraud. We understand that the USAO intends to seek criminal forfeiture. Mr. Gentile resigned from all management and board positions with GPB and Highline, and the GPB-managed funds, including the Partnership, and subsidiaries of the Partnership, promptly following his indictment.

***State Matters***

On May 27, 2020, the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth ("Massachusetts") filed an Administrative Complaint against GPB for alleged violations of the Massachusetts Uniform Securities Act. No GPB-managed fund is a named defendant. The complaint alleges, among other things, that the offering documents for several GPB-managed funds, including the Partnership, included material misstatements or omissions. Massachusetts is seeking both monetary and administrative relief, including disgorgement and rescission to Massachusetts residents who purchased the GPB-managed funds. This matter is currently stayed, pending resolution of the Criminal Case.

On February 4, 2021, seven State securities regulators (from Alabama, Georgia, Illinois, Missouri, New Jersey, New York, and South Carolina, collectively the "States") each filed suit against GPB. No GPB-managed fund is a named defendant in any of the suits brought by the States. Several of the suits also named Ascendant, AAS, Mr. Gentile, Mr. Schneider, and Mr. Lash as defendants. The States' lawsuits allege, among other things, that the offering documents for several GPB-managed funds, including the Partnership, included material misstatements and omissions. The States are seeking both monetary and administrative relief, including disgorgement and rescission. The cases brought by the States have been stayed pending the conclusion of the related Criminal Case. The State of New Jersey has voluntarily dismissed its case, without prejudice to re-file it following the conclusion of the Criminal Case.

***Appointment of Monitor and Application for Receivership***

On February 11, 2021, the EDNY Court in the SEC Action appointed Joseph T. Gardemal III as an independent monitor over GPB (the "Monitor") until further order of the Court (the "Order"). The Court appointed the Monitor in response to a request from the SEC, which asserted that the Monitor was necessary to protect investors in light of the alleged misconduct of GPB Capital's former CEO, David Gentile. In its February 4, 2021 complaint ("the Complaint") in the SEC Action, the SEC alleged that Mr. Gentile, as the owner and then-CEO of GPB Capital, along with Jeffry Schneider, the owner of Ascendant, GPB's placement agent, lied to investors about the source of money used to make 8% annualized distribution payments to investors. According to the SEC, Mr. Gentile and others allegedly told investors that the distribution payments were paid exclusively with monies generated by GPB portfolio companies, but as alleged, GPB actually used investor money to pay portions of the annualized 8% distributions. The Complaint further contains allegations that Mr. Gentile and others manipulated financial statements of certain limited partnership funds that GPB manages to perpetuate the deception by giving the false appearance that the funds' income was closer to generating sufficient income to cover the distribution

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payments than it actually was. Moreover, the Complaint alleges that Mr. Gentile engaged in undisclosed self-dealing, including by omitting from investor communications certain conflicts of interest and fees and other compensation that he received, totaling approximately $8.0 million.

In support of the Order, the SEC contended that the Monitor would provide assurances to investors, GPB's counterparties, and the public that an unbiased and qualified person who was not beholden to Mr. Gentile was vetting any significant transactions and decisions, and looking out for the interests of investors. Accordingly, pursuant to the Order, GPB shall (i) grant the Monitor access to all non-privileged books, records and account statements for the GPB-managed funds, including the Partnership, as well as their portfolio companies; and (ii) cooperate fully with requests by the Monitor reasonably calculated to fulfill the Monitor's duties. As noted below, the Order was amended on April 14, 2021 (the "Amended Order").

The Monitor is required to assess the Partnership's operations and business, and make recommendations to the EDNY Court, which may include continuation of GPB's operations subject to the Monitorship, a liquidation of assets, or filing for reorganization in bankruptcy. The Order provides that the Monitor will remain in place until terminated by order of the EDNY Court, and grants the Monitor the authority to approve or disapprove proposed material corporate transactions by GPB, the Partnership and its subsidiaries, extensions of credit by them outside the ordinary course of business, decisions to make distributions to the Limited Partners of the Partnership, or any decision to file any bankruptcy or receiver petition for any of them, among other actions. The Monitor is not required to approve the issuance of the Consolidated Financial Statements included within this Form 10-K, nor has management sought or obtained approval from the Monitor.

On April 14, 2021, the EDNY Court entered an Amended Order, providing that, in addition to the SEC and GPB, certain State regulators will receive access to the periodic reports filed by the Monitor pursuant to the Order.

On May 31, 2022, Mr. Gentile filed a motion in the SEC Action to modify the Amended Order pursuant to Rule 60(b) of the Federal Rules of Civil Procedure ("Rule 60(b) Motion"). In his Rule 60(b) Motion, Mr. Gentile seeks a court order to, among other things, (i) narrow the scope of the Monitor's responsibilities; and (ii) direct the Monitor to ensure that GPB does not sell or otherwise dispose of assets or portfolio companies that the Partnership owns before the completion of a "strategic assessment" to be conducted by three managers Mr. Gentile purportedly appointed to GPB on May 27, 2022. On that same day, May 31, 2022, the Monitor notified Mr. Gentile and GPB that Mr. Gentile's purported appointment of three new managers to GPB without Monitor approval was, amongst other things, in violation of the Amended Order. Mr. Gentile and GPB were, at that time, given ten (10) business days to cure the violation of the Amended Order. The cure period has expired without any steps having been taken to comply with the Monitor's notification of violation of the Amended Order.

On June 13, 2022, the SEC filed by Order to Show Cause in the SEC Action an application to (i) convert the existing Monitorship over GPB and the GPB-managed funds to a Receivership, and appoint the previously-appointed Monitor, Joseph T. Gardemal III, as Receiver; and (ii) impose a litigation injunction on cases filed against GPB and the GPB-managed funds (the "Receivership Application"). The Receivership Application and the Proposed Order Appointing Receiver and Imposing Litigation Injunction (the "Proposed Order") were filed with the EDNY Court with consent of GPB's management.

The Receivership Application seeks appointment of Mr. Gardemal as Receiver in order to, in part, streamline the process by which GPB and the GPB-managed funds liquidate remaining portfolio company assets and distribute money to Limited Partners, subject to the EDNY Court's supervision. The Proposed Order grants to Mr. Gardemal, generally, all powers and authorities previously possessed by the entities subject to the Proposed Order, as well as the powers possessed by the officers, directors, managers and others previously in charge of those entities, and permits him to, among other things, take all such actions necessary to preserve receivership assets.

Additionally, the Receivership Application includes a proposed stay of all Federal and State actions (as well as any arbitrations) presently pending against GPB and the GPB-managed funds, and provides for a centralized claims process for GPB Limited Partners, in the EDNY Court, to prevent potentially disparate actions in different courts that could negatively impact the assets proposed to be subject to the EDNY Court's jurisdiction and control.

The Rule 60(b) Motion and the validity of the appointment of the new managers are presently under consideration by the EDNY Court, along with the Receivership Application. Currently, there can be no assurance as to the outcome of the Rule 60(b) Motion or the Receivership Application.

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**2. Summary of Significant Accounting Policies**

***Basis of Presentation***

The consolidated financial statements through December 31, 2021 have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") assuming the Partnership would continue as a going concern. As discussed in "Footnote 1. Organization, Nature of Business, Liquidation Events, and Significant Legal Matters", on December 31, 2021 the Partnership transitioned to a liquidation basis of accounting.

Under the liquidation basis, the remeasurement of the Partnership's assets and liabilities includes management's estimates and assumptions of: (i) income to be generated from the remaining assets until the anticipated date of sale; (ii) sales proceeds to be received for these assets at the time of sale; (iii) operating expenses to be incurred during the liquidation period; and (iv) amounts required to settle liabilities.

***Principles of Consolidation***

The consolidated financial statements include the accounts of the Partnership and its subsidiaries in which we have a controlling interest. Upon consolidation, all intercompany accounts, transactions, and profits are eliminated. The Partnership has a controlling interest when it owns a majority of the voting interest in an entity or when it is the primary beneficiary of a variable interest entity ("VIE"). When determining which enterprise is the primary beneficiary, management considers (i) the entity's purpose and design, (ii) which variable interest holder has the power to direct the activities that most significantly impact the entity's economic performance, and (iii) the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. When certain events occur, the Partnership reconsidered whether it was the primary beneficiary of that VIE. A VIE is an entity in which the equity investment holders have not contributed sufficient capital to finance its activities or the equity investment holders do not have defined rights and obligations normally associated with an equity investment.

***Use of Estimates***

The preparation of consolidated financial statements under the liquidation basis of accounting, requiring management's most significant, difficult and subjective judgments include: the date on which we expect the liquidation process to be complete, the timing of and estimated sales proceeds of our assets; estimated settlement amounts of our liabilities, and the estimated revenue and operating expenses that are projected through the date in which we no longer operate Prime Subaru Manchester.

***Non-Controlling Interests***

Non-controlling interests represent the portion of net assets in consolidated entities that are not owned by the Partnership. Historically under the going concern basis of accounting, when the Partnership acquired a controlling interest in a consolidated entity, the non-controlling interest was initially recorded at fair value and subsequently adjusted for any capital transactions between the third party investors and the consolidated entity that occurred during the period and by net income (loss) attributable to non-controlling interests.

***Cash and Cash Equivalents***

Cash and cash equivalents includes cash on hand, cash in bank accounts without restriction, and investments in Treasury Bills with original maturities of no longer than three months.The Partnership maintains cash balances with financial institutions that, at times, may exceed federally insured limits. Management periodically evaluates the creditworthiness of these institutions and has not experienced any losses on such deposits.

As of December 31, 2022, the standard Federal Deposit Insurance Corporation (FDIC) insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category. Any deposit in excess of this insured amount could be lost. As of December 31, 2022, substantially all of the Partnership's $135.4 million of deposited cash held in banks was in excess of the FDIC coverage limit.

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As of December 31, 2022, $406.5 million was invested in Treasury Bills with original maturities of no longer than three months are which presented in the table above.

During the year ended December 31, 2022, $6.2 million of proceeds from the settlement of assets were received and $5.0 million of payments from the settlement of liabilities were made that were not part of the initial projections resulting in an adjustment to the Consolidated Statement of Changes in Net Assets in Liquidation.

***Restricted Cash***

At December 31, 2022, the Partnership held $22.0 million of restricted cash which represents the funds held in escrow relating to amounts to compensate Group 1 for any potential post-closing indemnifiable losses pursuant to the terms of the Purchase Agreement.

In December 2022, $19.4 million was released into cash pursuant to the terms of the Purchase Agreement which states 50% of the funds held in escrow are to be released one year from the date of the Group 1 Sale with the remaining 50% to be released at the end of the second year.

At December 31, 2021, the Partnership held $41.4 million of restricted cash which represents the funds held in escrow relating to amounts to compensate Group 1 for any potential post-closing indemnifiable losses pursuant to the terms of the Purchase Agreement, which states 50% of the funds held in escrow are available for release one year from the date of the Group 1 Sale with the remaining 50% to be released at the end of the second year.

***Contracts in Transit***

Under the liquidation basis of accounting, contracts in transit are recognized at the amount expected to be collected.

***Receivables*** 

Receivables consist of the following:

● Manufacturer receivables represent amounts due from manufacturers, including holdbacks, rebates, incentives and warranty claims.

● Trade receivables are comprised of amounts due from customers related to sales of new and used vehicles and service, body, and parts sales.

● Finance and insurance receivables represent amounts owed to the Partnership for commissions from third-party lending and insurance institutions for arranging customer financing and for the sale of vehicle service contracts.

Under the liquidation basis of accounting, receivables are stated at the amount of their estimated cash proceeds.

***Inventories***

Under the liquidation basis of accounting, inventories are recognized at the amount expected to be collected. Costs to sell inventories are separately accrued.

Manufacturers reimburse us for holdbacks, floor plan interest assistance and advertising assistance, which are reflected as a reduction in the carrying value of each vehicle purchased. We recognize advertising assistance, floor plan interest assistance, holdbacks, cash incentives and other rebates received from manufacturers that are tied to specific vehicles as a reduction to cost of sales as the related vehicles are sold.

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As of December 31, 2022 and 2021, inventory in the amount of $2.7 million and $2.8 million, respectively, held by the Partnership through its investment in Prime Subaru Manchester are included in assets held for sale, See "Footnote 9. Assets Held for Sale."

***Property and Equipment***

Under the liquidation basis of accounting, property and equipment is recorded at the amount expected to be collected on the ultimate disposition of the assets. Upon the transition to the liquidation basis of accounting, we no longer record depreciation expense.

Under the going concern basis of accounting, property and equipment were stated at cost, net of accumulated depreciation, or at the estimated fair value on the date of acquisition for property and equipment purchased in connection with a business combination. Property and equipment under capital leases were stated at the lower of the present value of minimum lease payments or the fair value of the asset at the inception of the lease, net of accumulated depreciation. Major additions and improvements which extend the useful lives of the assets are capitalized, while minor replacements, repairs, and maintenance, which do not improve or extend the lives of the assets, are expensed as incurred. When property was retired or disposed of, the cost and related accumulated depreciation are removed and the resulting gain or loss, if any, was reflected in loss on sale of dealerships, property, and equipment in the accompanying Consolidated Statements of Operations.

Depreciation was computed over the estimated useful lives of the assets using the straight-line method. Estimated useful lives are as follows:

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| | | |
|:---|:---|:---|
| **Property and Equipment** |  | **Useful Lives** |
| Buildings |  | 10 to 40 years |
| Leasehold improvements |  | Lesser of lease term or estimated useful life |
| Furniture, fixtures and equipment |  | 3 to 15 years |

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The Partnership continually evaluated property and equipment, including leasehold improvements, to determine whether events and circumstances had occurred that may have warranted revision of the estimated useful life or whether the remaining balance should have been evaluated for possible impairment. The Partnership used an estimate of the related undiscounted cash flows including its disposition over the remaining life of the property and equipment in assessing whether an asset had been impaired. Management measured impairment losses based upon the amount by which the carrying amount of the asset exceeded the fair value and recognized the impairment charge as a component of operating expenses.

***Leases***

Under the liquidation basis of accounting, our right-of-use assets are written down to the net realizable values and our lease liabilities are recorded at the respective cash settlement amounts.

***Goodwill and Franchise Rights***

Under going concern accounting, goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that is not individually identified and separately recognized. The Partnership's identifiable intangible franchise rights were individual dealership rights under franchise rights agreements with vehicle manufacturers ("Franchise Agreements") and were identified on an individual dealership basis. The Partnership expected these Franchise Agreements to continue to contribute to our cash flows for an indefinite period and, for agreements that did not have indefinite terms, the Partnership believed that renewal of these agreements would continue to be routinely renewed without substantial cost to us, based on the history with the manufacturers. The Partnership's Franchise Agreements had been contracted for various durations, ranging from one year to those having no expiration date. Other than Franchise Agreements being terminated due to manufacturers' business operations, and allowed by bankruptcy law, the Partnership is not aware of manufacturers terminating Franchise Agreements against the wishes of the franchise owners in the ordinary course of business. Historically in the retail automotive franchise industry, dealership franchise agreements are rarely involuntarily terminated or not renewed by the manufacturer. A manufacturer may force a franchise owner to sell a franchise when the owner is in breach of the franchise agreement over an extended period of time. Certain states in which the Partnership historically operated in have automotive dealership franchise laws that typically limit the rights of a manufacturer to terminate or not renew a franchise, and the Partnership is not aware of any legislation or other factors that would materially change the retail automotive franchise system. In

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addition, as indicated by the Partnership's acquisition and disposition history and evidenced in industry research, there is an active market for most automotive dealership franchises within the United States. Therefore, the Partnership attributed value to the Franchise Agreements acquired with the dealerships purchased based on the understanding and industry practice that the Franchise Agreements would be renewed indefinitely by the manufacturer. As such, the Partnership believed that its Franchise Agreements would contribute to cash flows for an indefinite period and, therefore, had indefinite lives.

We tested our goodwill for impairment on October 1 of each year. We evaluated our goodwill at the reporting unit level using a qualitative assessment process. If the qualitative factors determined that it was more likely than not that the fair value of the reporting unit exceeded the carrying amount, goodwill was not impaired. If the qualitative assessment determined it was more likely than not the fair value of the reporting unit was less than the carrying amount, then a quantitative valuation of our goodwill at the reporting unit level, using a market approach, was performed and an impairment would be recorded.

We tested our franchise rights value for impairment on October 1 of each year. We evaluated our franchise rights value using a qualitative assessment process. We have determined the appropriate unit of accounting for testing franchise rights value for impairment was each individual dealership. If the qualitative factors determined that it was more likely than not that the fair value of the individual dealership's franchise rights value exceeds the carrying amount, the franchise rights were not impaired and the second step was not necessary. If the qualitative assessment determined it was more likely than not the fair value was less than the carrying value, then a quantitative valuation of our franchise rights value was performed, using a market approach, and an impairment was recorded.

Goodwill and franchise rights impairment losses were charged to asset impairment in operating expenses in the Consolidated Statements of Operations.

As a result of the Group 1 Sale and the transition to the liquidation basis of accounting as described in Note 1. "Organization, Nature of Business, Liquidation Events, and Significant Litigation", goodwill and franchise rights were reduced to zero.

***Assets and Liabilities Held for Sale***

Under the liquidation basis of accounting, assets held for sale are reflected at the amount of net cash proceeds expected from the sale, and liabilities held for sale are reflected at the expected cash settlement amounts, and are presented in the line items assets held for sale and liabilities held for sale in the accompanying Consolidated Statements of Net Assets in Liquidation.

The Partnership classifies long-lived assets (disposal groups) to be sold as held for sale in accordance with Accounting Standards Update ("ASU") 2014-08, *Presentation Of Financial Statements (Topic 205) And Property, Plant, And Equipment (Topic 360): Reporting Discontinued Operations And Disclosures Of Disposals Of Components Of An Entity* ("ASU 2014-08"), in the period in which all of the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the asset; the asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; the sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond our control extend the period of time required to sell the asset beyond one year; the asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

***Revenue Recognition***

Revenue consisted of sales of new and used vehicles, parts and service sales, and related commissions from third-party lending and insurance institutions for arranging customer financing and for the sale of vehicle service contracts (collectively "F&I"). The Partnership recognized revenue (which excludes sales taxes) in the period in which products were delivered or services were provided as all performance obligations are satisfied. The transaction price for a retail vehicle sale was specified in the contract with the customer and included all cash and non-cash consideration. In a retail vehicle sale, customers often trade in their current vehicle. The trade-in was measured at its stand-alone selling price in the contract, utilizing various third-party pricing sources. All vehicle rebates were applied to the vehicle purchase price at the time of the sale. Sales promotions that the Partnership offers to customers are accounted for as a reduction to the sales price at the time of sale. F&I and service contract revenues are recognized upon the sale of the finance, insurance,

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or service contracts as the Partnership has no further performance obligations and as such as it is earned for the placement of: (i) loans and leases with financial institutions in connection with customer vehicle purchases financed, (ii) vehicle service contracts with third-party providers, and (iii) other protection products with third-party providers. An allowance for chargebacks against revenue recognized from sales of F&I products was recorded in the period in which the related revenue was recognized. The Partnership collects sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale. These taxes are accounted for on a net basis and are not included in revenues or cost of sales.

Under the going concern basis of accounting, we recognized revenue as described below. Under the liquidation basis of accounting, we estimate the cash receipts from the Prime Subaru Manchester dealership through the point when ownership is expected to transfer under the terms of the Group 1 Sale. The estimated ending period for operating this dealership is November 2023. These estimated revenues are included in the calculation of estimated costs in excess of estimated receipts during liquidation on our Consolidated Statements of Net Assets in Liquidation. As of December 31, 2022 and 2021, estimated proceeds from the sale of our operating businesses and real estate assets are recorded separately from the estimated operating revenues and are included in assets held for sale on our Consolidated Statements of Net Assets in Liquidation.

***Disaggregation of Revenue***

The majority of the Partnership's revenue was from contracts with customers. Taxes assessed by governmental authorities that were directly imposed on revenue transactions were excluded from revenue. Revenue in the accompanying Consolidated Statements of Operations was disaggregated by major lines of goods and services and timing of transfer of goods and services. The Partnership has determined that these categories depicted how the nature, amount, timing, and uncertainty of the revenue and cash flows were affected by economic factors. Revenue from new vehicle retail sales, used vehicle retail sales, used vehicle wholesale sales, retail and wholesale counter parts sales and financing and insurance sales, net was recognized at the point in time in which the goods and services were transferred. Revenue from repair and maintenance services are recognized over time, as the related work is performed on the vehicles. The following describes our major product lines, which represented the disaggregation of our revenues to transactions that are similar in nature, account, timing uncertainties and economic factors.

***New and Used Vehicle Sales***

Revenue from the retail sale of a vehicle was recognized at a point in time, as all performance obligations are satisfied when a contract is signed by the customer, financing has been arranged or collectability is probable, and control of the vehicle is transferred to the customer. The transaction price for a retail vehicle sale was specified in the contract with the customer and includes all cash and non-cash consideration. In a retail vehicle sale, customers often trade in their current vehicle. The trade-in was measured at its stand-alone selling price in the contract, utilizing various third-party pricing sources. There are no other non-cash forms of consideration related to retail sales. All vehicle rebates were applied to the vehicle purchase price at the time of the sale and are, therefore, incorporated into the price of the contract at the time of the exchange. We did not allow the return of new or used vehicles, except where mandated by state law.

The Partnership also sold vehicles at auction, which was included in used vehicle wholesale revenue. The transaction price for auction services was based on an established pricing schedule and determined with the customer at the time of sale, and payment was due at that time. The Partnership satisfies its performance obligations related to auction sales at the point in time that control transfers to the customer.

***Parts and Service Sales***

The Partnership sold parts and automotive services related to customer-paid repairs and maintenance, repairs and maintenance under manufacturer warranties and extended service contracts, and collision-related repairs. The Partnership also sold parts through its wholesale and retail channels.

Each automotive repair and maintenance service was a single performance obligation that includes both the parts and labor associated with the service. Payment for automotive service work was typically due upon completion of the service, which was generally completed within a short period of time from contract inception. The transaction price for automotive repair and maintenance services was based on the parts used, the number of labor hours applied, and standardized hourly labor rates. The Partnership satisfies its performance

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obligations, transfers control, and recognizes revenue over time for automotive repair and maintenance services because it was creating an asset with no alternative use and it had an enforceable right to payment for performance completed to date. The Partnership used an input method to recognize revenue and measure progress based on labor hours expended and parts utilized calculated using the average gross profit for repairs and maintenance services. The Partnership had determined labor hours expended and parts utilized to be the relevant measure of work performed to complete the automotive repair or maintenance service for the customer.

The transaction price for wholesale and retail counter parts sales was determined at the time of sale based on the quantity and price of each product purchased. Payment was typically due at time of sale, or within a short period of time following the sale. The Partnership had not established provisions for estimated returns as historically returns were rare and are not significant. Delivery methods of wholesale and retail counter parts vary; however, the Partnership generally considered control of wholesale and retail counter parts to transfer when the products were shipped, which typically occurs the same day as or within a few days of the sale.

***Finance and Insurance Sales***

Revenue from finance and insurance sales was recognized, net of estimated charge-backs, at the time of the sale of the related vehicle. As a part of the vehicle sale, we arranged financing for customers and sold a variety of add-ons, such as extended warranty service contracts. These products are inherently attached to the governing vehicle and performance of the obligation cannot be performed without the underlying sale of the vehicle. We acted as an agent in the sale of these contracts as the pricing was set by the third-party provider, and our commission was preset. A portion of the transaction price related to sales of finance and insurance contracts was considered variable consideration and was estimated and recognized upon the sale of the contract under ASC Topic 606.

***Selling, General and Administrative Expenses***

Under the liquidation basis of accounting, estimated expenses during the liquidation period are included in liability for estimated costs in excess of estimated receipts during liquidation on our Consolidated Statements of Net Assets in Liquidation.

Under the going concern basis of accounting, the Partnership's operating expenses included, among others, payroll expenses, administrative expenses, audit fees, professional and insurance expense, litigation related and indemnification expenses, and taxes or other governmental charges levied against the Partnership. The Partnership was allocated, from GPB, a portion of the total compensation of GPB's or its affiliates' officers and employees relating to the time such officers or employees provide services to the Partnership or its subsidiaries.

***Advertising Costs***

Under the liquidation basis of accounting, estimated expenses during the liquidation period are included in liability for estimated costs in excess of estimated receipts during liquidation on our Consolidated Statements of Net Assets.

Under the going concern basis of accounting, advertising costs were expensed as incurred and were included in selling, general and administrative expenses in the accompanying Consolidated Statements of Operations. Advertising expense was $12.1 million and $15.5 million in 2021 and 2020, respectively. The advertising expense has been reduced by $2.6 million and $5.0 million for advertising assistance from the manufacturers earned related to vehicles sold in 2021 and 2020, respectively.

***Income Taxes***

The Partnership is organized as a pass-through entity for income tax purposes and is not subject to income taxes since taxable income or loss is reportable by the Limited Partners. For federal and state income tax purposes, the Partnership's limited liability company subsidiaries are not considered taxable entities of the Partnership and, accordingly, make no provision for income taxes in their separate stand-alone financial statements. The taxable income or losses of the underlying limited liability company subsidiaries' are reportable by the Partnership, which, in turn, reports its income or loss to its partners.

Certain entities included in the Partnership's consolidated financial statements are subject to certain state income taxes and mandatory withholding by the state. For the years ended December 31, 2021 and 2020 these taxes are recorded as distributions in the Consolidated Statements of Partners' Capital.

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***Segment Reporting***

The Partnership's core strategy was to own automotive dealerships and maximize value to the Limited Partners. Our dealership operations were organized into geographic market-based dealership groups. Our Chief Operating Decision Maker ("CODM") was determined to be the members of our automotive strategy team and are employees of GPB and Highline. We reported all of our business operations as a single segment for accounting purposes based on the financial information that was available and reviewed by the CODM in deciding how to allocate resources and in assessing performance of the Partnership. The CODM did not actively participate in the day-to-day operations of the dealerships.

***Risks and Uncertainties***

We are subject to a number of legal proceedings at both the Partnership and its subsidiaries, as described in "Footnote 17. Commitments and Contingencies." While we are vigorously defending our position in these proceedings, there is uncertainty surrounding their related outcomes and timing. The cost to defend and the outcomes of these proceedings could affect the liquidity of the Partnership and the use of available cash.

Under the liquidation basis of accounting we estimate the liquidation value of our assets and recognize future costs expected to be incurred during the liquidation period. Our estimate of future legal costs is a significant estimate recorded as a component of liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statements of Net Assets. These estimates will be periodically reviewed and adjusted as appropriate. There can be no assurance that these estimated values will be realized. Such amounts should not be taken as an indication of the timing or the amount of future distributions or our actual dissolution. See "Footnote 1. Organization, Nature of Business, Liquidation Events, and Significant Legal Matters" for further information.

Our access to our cash and cash equivalents in amounts adequate to finance our plan of liquidation could be significantly impaired by the financial institutions with which we have arrangements. Any material decline in our ability to access our cash and cash equivalents could adversely impact our ability to meet certain steps in our plan of liquidation, pay distributions, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws, among other things, any of which could have material adverse impacts on our operations and the amount of total net assets in liquidation.

**3. Liability for Estimated Costs in Excess of Estimated Receipts During Liquidation**

The liquidation basis of accounting requires the estimation of net cash flows from operations and all costs associated with implementing and completing the plan of liquidation. These accrued receipts and costs are estimated and are anticipated to be collected and paid out over the liquidation period. We project that we will have estimated costs in excess of estimated receipts during the liquidation period. These amounts can vary significantly due to, among other things, the timing and estimates for receipts and costs associated with the operations of Prime Subaru Manchester until ownership transfers, estimates of direct costs incurred to complete the sale of assets, the timing and amounts associated with discharging known and contingent liabilities, the costs associated with the winding up of operations, and other costs that we may incur which are not currently foreseeable. These accrued receipts and costs will be adjusted periodically as projections and assumptions change. Upon transition to the liquidation basis of accounting on December 31, 2021, we accrued receipts and costs expected to be earned or incurred during liquidation and have evaluated and updated as necessary that accrual at each reporting period. The liability for estimated costs in excess of estimated receipts during liquidation is comprised of (in thousands):

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| | | |
|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2021** |
| Total estimated receipts during remaining liquidation period | $58870 | $116250 |
| Estimated costs during remaining liquidation period: |  |  |
| Total estimated costs of operations - Prime Subaru Manchester | $(39448) | $(95939) |
| Selling, general and administrative expenses - Prime Subaru Manchester  | (6447) | (15798) |
| Selling, general and administrative expenses - corporate | (24648) | (22451) |
| Selling, general and administrative expenses - corporate, related party | (10630) | (32785) |
| Interest expense | (270) | (338) |
| Total estimated costs during remaining liquidation period | $(81443) | $(167311) |
| Liability for estimated costs in excess of estimated receipts during liquidation | $(22573) | $(51061) |

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The change in the liability for estimated costs in excess of estimated receipts during liquidation for the year ended December 31, 2022, is as follows (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**December 31, 2021** | <br>**Net Change in**<br> **Working Capital** <sup>(3)</sup> | **Changes in Estimated**<br> **Future Cash Flows**<br> **During Liquidation** <sup>(4)</sup> | <br>**December 31, 2022** |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;Estimated net inflows from operations <sup>(1)</sup> | $4175 | $(6594) | $15124 | $12705 |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;Corporate expenditures <sup>(2)</sup> | (55236) | 21197 | (1239) | $(35278) |
| Liability for estimated costs in excess of estimated receipts during liquidation | $(51061) | $14603 | $13885 | $(22573) |

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&nbsp;&nbsp;&nbsp;&nbsp;1. Estimated net inflows from operations consists of total estimated receipts during liquidation less the sum of total estimated (i) costs of sales, (ii) selling, general and administrative expense, (iii) interest expense relating to the operation of Prime Subaru Manchester and (iv) interest income accrued from cash equivalents.

&nbsp;&nbsp;&nbsp;&nbsp;2. Corporate expenditures primarily consists of (i) selling, general and administrative expenses, (ii) management fees, and (iii) legal and consulting fees relating to our corporate activities.

&nbsp;&nbsp;&nbsp;&nbsp;3. Net change in working capital represents changes in assets and liabilities for the year ended December 31, 2022, primarily as a result of actual cash receipts or payments.

&nbsp;&nbsp;&nbsp;&nbsp;4. Changes in estimated future cash flows during liquidation includes adjustments to previous estimates and changes in estimated holding periods of our assets, if applicable.

For the year ended December 31, 2022, the Partnership revised its projection for legal indemnification costs, see "Footnote 17. Commitments and Contingencies" resulting in an increase of $12.3 million in selling, general and administrative expenses - corporate within the liability for estimated costs in excess of estimated receipts during liquidation. This increase is offset by a revision to the projection for managerial assistance fees and operation service provider fees ("OSP") expected to be paid, see "Footnote 16. Related Party Transactions" resulting in a reduction of $12.6 million in selling, general and administrative expenses - corporate, related party within the liability for estimated costs in excess of estimated receipts during liquidation.

As of December 31, 2022, the Partnership accrued for a future tax liability of $1.4 million while awaiting the approval for transfer of Prime Subaru Manchester in selling, general and administrative expenses - corporate, within the liability for estimated costs in excess of estimated receipts during liquidation.

For the year ended December 31, 2022, the Partnership revised projected interest expected to be received by approximately $13.2 million related to the cash equivalents invested in Treasury Bills as of December 31, 2022. Additionally, the Partnership revised projected receipts related to the operations of Prime Subaru Manchester by approximately $1.8 million. This resulted in an increase to the total estimated receipts during liquidation period within the liability for estimated costs in excess of estimated receipts during liquidation..

The Partnership has decreased the liability for estimated costs in excess of estimated receipts during liquidation by $13.9 million as presented on the Consolidated Statement of Changes in Net Assets in Liquidation.

**4. Net Assets in Liquidation and Distributions from Net Assets in Liquidation**

On March 8, 2022, the Partnership and GPB Prime reached an agreement in principle with M&T Bank to allow for an additional $85.0 million distribution to the Partnership and GPB Holdings II, LP, of which $28.5 million was distributed to GPB Holdings II, LP, an affiliated entity to the Partnership which holds a 33.5% non-controlling interest in GPB Prime.

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On April 26, 2022, the Partnership and GPB Prime reached an agreement in principle with M&T Bank to allow for an additional $30.0 million distribution to the Partnership and GPB Holdings II, LP, of which $10.1 million was distributed to GPB Holdings II, LP.

On December 27, 2022, the Partnership distributed $0.1 million to the former general manager of two dealerships of the New York Metro reporting unit, who holds 4% non-controlling interest, in the two New York Metro dealerships.

As a result, net assets in liquidation decreased by $38.7 million for the year ended December 31, 2022.

***Initial Net Assets In Liquidation***

The following is a reconciliation of total Partners' Capital under the going concern basis of accounting to net assets in liquidation under the liquidation basis of accounting as of December 31, 2021 (in thousands):

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| | |
|:---|:---|
|  | **December 31, 2021** |
| Total Partner's Capital as of December 31, 2021 (going concern basis) | $593488 |
| Increase due to estimated net realizable value of Assets Held for Sale <sup>(1)</sup> | 12410 |
| Net decrease due to write-off of prepaid expenses, other assets<sup>(2)</sup> | (17086) |
| Decrease due to adjustment of operating lease liability <sup>(3)</sup> | (139) |
| Decrease due to interest expense on notes payable - related party <sup>(4)</sup> | (1851) |
| Decrease due to liability for estimated costs in excess of estimated receipts during liquidation <sup>(5)</sup> | (51061) |
| Net adjustments to reflect the change to the liquidation basis of accounting | (57727) |
| Estimated value of net assets in liquidation as of December 31, 2021 | $535761 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*1.* *Under the liquidation basis of accounting, all assets are recorded at net realizable value. This adjustment reflects the increase in the then carrying value of our Assets Held for Sale to net realizable value.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*2.* *Under the liquidation basis of accounting, assets are recorded at net realizable value. This adjustment is to adjust prepaid and other assets to net realizable value.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*3.* *Under the liquidation basis of accounting, we recorded lease liabilities at the amount in which they are expected to be settled in cash. This adjustment was to record our lease liability at the cash settlement amount.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*4.* *Under the liquidation basis of accounting, we recorded contractual interest expected to be incurred through the liquidation term. This adjustment is to accrue for the interest expected to be incurred relating to our notes payable - related party.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*5.* *Under the liquidation basis of accounting, we recorded the projected net operating cash flows for Prime Subaru Manchester through the date of expected transfer. Additionally, we recorded our corporate expenses expected to be incurred during liquidation.* 

**5. Dispositions**

**2021 Dispositions:**

In December 2021, GPB Prime sold the Toyota Route 2 dealership and the related real estate to a third-party. The Partnership received net proceeds of $33.4 million and $9.3 million, respectively, and recognized a net loss on disposal of the dealership of $1.0 million and a net gain on disposal of related real estate of $1.1 million, recorded in (gain) loss on sale of dealerships, property and equipment, net in the Consolidated Statements of Operations for the year ended December 31, 2021. The proceeds relating to this disposition were used in part to pay down debt.

In November 2021, GPB Prime sold 23 dealerships and the related real estate to Group 1. The Partnership received net proceeds of $505.0 million and $215.9 million, respectively, and recognized a net gain on disposal of the dealerships of $267.8 million and a net

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gain on disposal of related real estate of $18.7 million, respectively, recorded in (gain) loss on sale of dealerships, property and equipment, net in the Consolidated Statements of Operations for the year ended December 31, 2021. The proceeds relating to this disposition were used in part to pay down debt.

In November 2021, Capstone Automotive Group, LLC ("Capstone") and GPB Portfolio Automotive, LLC, holding company subsidiaries of the Partnership, sold four dealerships and the related real estate in the New York Metro reporting unit to Group 1. The Partnership received net proceeds of $50.5 million and $10.8 million, respectively, and recognized a net gain on disposal of the dealership of $22.3 million and a net loss on disposal of related real estate of $0.4 million, respectively, recorded in (gain) loss on sale of dealerships, property and equipment, net in the Consolidated Statements of Operations for the year ended December 31, 2021. The proceeds relating to this disposition were used in part to pay down debt.

In November and December 2021, the total proceeds for the dealerships and related real estate sold as described above was $824.9 million.

In April 2021, GPB Prime sold the Prime Chevrolet Hyannis and Prime Subaru Hyannis dealerships to a third-party. The Partnership received net proceeds of $6.6 million, and recognized a net loss on disposal of the dealership of $0.6 million recorded in (gain) loss on sale of dealerships, property and equipment, net in the Consolidated Statements of Operations for the year ended December 31, 2021. The proceeds relating to this disposition were used in part to pay down debt.

In March 2021, GPB Prime sold Prime Toyota Boston to a third-party. The Partnership received net proceeds of $10.3 million, and recognized a net loss on disposal of the dealership of $0.4 million recorded in (gain) loss on sale of dealerships, property and equipment, net in the Consolidated Statements of Operations for the year ended December 31, 2021. The proceeds relating to this disposition were used in part to pay down debt.

In March 2021, GPB Prime sold the Hyannis Toyota and Orleans Toyota dealerships and the related real estate to a third-party. The Partnership received net proceeds of $23.8 million and $16.6 million, respectively, and recognized a net loss on disposal of the dealership of $0.7 million and a net gain on disposal of the related real estate of $1.4 million, respectively, recorded in (gain) loss on sale of dealerships, property and equipment, net in the Consolidated Statements of Operations for the year ended December 31, 2021. The proceeds relating to this disposition were used in part to pay down debt.

**2020 Dispositions:**

In September 2020, Capstone sold all of the remaining FX Caprara dealerships and the related real estate to a third-party. The Partnership received net proceeds of $1.6 million and $5.6 million, respectively, and recognized a net loss on disposal of the dealership and related real estate of $0.8 million and $0.8 million, respectively, recorded in (gain) loss on sale of dealerships, property and equipment in the Consolidated Statements of Operations for the year ended December 31, 2020.

During September and October 2020, Capstone sold all of the remaining Kenny Ross Auto Group (KRAG) dealerships and the related real estate to a third-party. The Partnership received net proceeds of $23.3 million and the related real estate for net proceeds of $36.1 million, respectively, and recognized a net loss on disposal of the dealership and related real estate of $6.0 million and $2.8 million, respectively, recorded in (gain) loss on sale of dealerships, property and equipment in the Consolidated Statements of Operations.

In October 2020, Capstone sold all of the Ron Carter dealerships and related real estate to a third-party. The Partnership received net proceeds of $19.3 million and $20.9 million, respectively. The real estate proceeds included a $2.0 million note bearing 7% interest due to Capstone Automotive Group, LLC in October 2022 which is recorded as a component of other assets in the Consolidated Balance Sheet at December 31, 2020. The Partnership recognized a net loss on disposal of the dealership of $2.9 million and a net gain on the disposal of related real estate of $0.8 million, respectively, recorded in (gain) loss on sale of dealerships, property and equipment in the Consolidated Statements of Operations.

In October 2020, Capstone sold the Subaru Vermont dealership to an entity related to the Former CEO of Automile for net proceeds of $5.3 million and the related real estate for net proceeds of $12.5 million, respectively. The Partnership recognized a net gain on disposal of the dealership of $1.3 million and net loss of $1.1 million on the disposal of the related real estate recorded in (gain) loss on sale of dealerships, property and equipment in the Consolidated Statements of Operations.

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All of the dispositions were in the ordinary course of business within the mandate for the automotive strategy outlined in the Private Placement Memorandum (the "PPM"), and thus were not considered a strategic shift in the Partnership's operation.

**6. Receivables**

Under the liquidation basis of accounting, receivables consisted of the following at:

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| | | |
|:---|:---|:---|
| | **December 31,**  | **December 31,**  |
| <br>(Dollars in thousands) | **2022** | **2021** |
| **Receivables** |  |  |
| Manufacturer receivables | $854 | $5676 |
| Trade receivables | 1010 | 573 |
| Finance and insurance receivables | 1158 | 2390 |
| Total | $3022 | $8639 |

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During the year ended December 31, 2022, we increased our estimate of the net realizable value of receivables by $1.9 million primarily attributable to Internal Revenue Service refunds as a result of the completion of annual tax filings which is reflected as an increase in receivables on the Consolidated Statement of Changes in Net Assets in Liquidation.

**7. Property and Equipment**

Under the liquidation basis of accounting, property and equipment is recorded at the amount expected to be collected on the ultimate disposition of the assets. Upon the transition to the liquidation basis of accounting, we no longer record depreciation expense.

At December 31, 2022 and 2021, our property and equipment of $2.1 million and $1.4 million, respectively, was included in assets held for sale, See "Footnote 9. Assets Held for Sale."

Under the going concern basis of accounting, depreciation expense related to property and equipment for the years ended December 31, 2021, and 2020 was $7.3 million and $9.3 million, respectively.

In December 2021 and 2020, the Partnership recorded an impairment loss of $0.9 million and $0.4 million, respectively related to property owned by the Partnership, which has been classified as a component of asset impairment in the Consolidated Statements of Operations.

In October 2021, Capstone sold the Bob's Buick GMC related real estate to a third-party. The partnership received net proceeds of $3.3 million and recognized a net loss of $0.1 million recorded in (gain) loss on sale of dealerships, property and equipment, net in the Consolidated Statements of Operations for the year ended December 31, 2021. The proceeds relating to this disposition were used to pay down debt.

In May 2021, GPB Prime, sold a parcel of land relating to the Prime Toyota Boston, to a third-party. The Partnership received net proceeds of $16.1 million, and recognized a net gain on disposal of the real estate of $4.0 million recorded in (gain) loss on sale of dealerships, property and equipment, net in the Consolidated Statements of Operations. The proceeds relating to this disposition were used to pay down debt.

In April 2021, the Partnership sold the remaining KRAG related real estate to a third-party. The Partnership received net proceeds of $11.8 million, and recognized a net loss on disposal of the real estate of $0.5 million recorded in (gain) loss on sale of dealerships, property and equipment, net in the Consolidated Statements of Operations. The proceeds relating to this disposition were used to pay down debt.

In March 2021, the Partnership sold a vacant parcel of real estate for net proceeds of $2.9 million and a net loss of $0.1 million recorded in (gain) loss on sale of dealerships, property and equipment, net in the Consolidated Statements of Operations. The proceeds were used in part to repay all outstanding debt relating to real estate.

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**8. Goodwill and Franchise Rights**

The changes in the carrying amount of goodwill and intangible franchise rights consisted of the following:

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| | |
|:---|:---|
| (Dollars in thousands) | **Total** |
| **Goodwill** |  |
| Balance at December 31, 2020 | 142065 |
| &nbsp;&nbsp;Reclassification to held for sale | (7597) |
| &nbsp;&nbsp;Reductions through disposals | (134468) |
| Balance at December 31, 2021 | $— |
| **Franchise Rights** |  |
| Balance at December 31, 2020 | 126139 |
| &nbsp;&nbsp;Reclassification to held for sale | (7600) |
| &nbsp;&nbsp;Reductions through disposals | (118539) |
| Balance at December 31, 2021 | $— |

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Based on the qualitative assessments in 2020, the Partnership determined that it should perform a quantitative test to assess the amount of impairment associated with the Partnership's franchise rights and goodwill. These tests indicated the carrying value of franchise rights at certain dealerships was greater than fair value and the Partnership recorded an impairment charge as a component of asset impairment on the Consolidated Statements of Operations of $0.8 million. The Partnership determined these assets were impaired resulting from the acquired dealerships falling short of pre-acquisition financial projections for the year ending December 31, 2020. Based on the qualitative assessments in 2021 and the information available in connection with the Group 1 Sale at the time of the assessment, the Partnership determined that the carrying value of the franchise rights and the carrying value of the reporting units for purposes of the impairment assessment more likely than not exceeded the respected fair values and no impairment charges were recorded.

Under the liquidation basis of accounting, all of our goodwill and intangible assets were classified as held for sale and were recorded on the Consolidated Statements of Net Assets in Liquidation at the amount of their estimated cash proceeds or other consideration from liquidation, see "Footnote 9. Assets Held for Sale."

**9. Assets and Liabilities Held for Sale**

During the three months ended March 31, 2022, the Partnership committed to a plan to dispose of one property, 18675 Route 11 in Watertown, New York. As of December 31, 2022, this property, valued at $1.2 million, remained in assets held for sale on the Consolidated Statements of Net Assets in Liquidation as we have not yet completed the sale of this property.

As of December 31, 2022, the assets and liabilities of Prime Subaru Manchester, which included net inventory and equipment of $2.7 million and $0.9 million, respectively, remained in assets and liabilities held for sale on the Consolidated Statements of Net Assets in Liquidation as ownership has not yet transferred to Group 1. The closing consideration of $33.4 million which was held in escrow by Group 1 in connection with their anticipated purchase of Prime Subaru Manchester was released to the Partnership on April 12, 2022 resulting in a reduction of assets held for sale and an increase in cash and cash equivalents.

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The following table reconciles the major classes of assets and liabilities classified as held for sale as of December 31, 2022 and December 31, 2021, in the accompanying Consolidated Statements of Net Assets in Liquidation:

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| | | |
|:---|:---|:---|
| | **December 31,**  | **December 31,**  |
| <br>(Dollars in thousands) | **2022** | **2021** |
| **Assets held for sale** |  |  |
| Inventories | $2749 | 2780 |
| Franchise rights |  | 7600 |
| Goodwill |  | 22400 |
| Property and equipment | 2125 | 1433 |
| Total assets held for sale | $4874 | 34213 |
| **Liabilities held for sale** |  |  |
| Operating lease liabilities | (1127) | (2392) |

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For the years ended December 31, 2021 and 2020 there was $0.9 million and $1.6 million, respectively, of impairment has been recorded as a component of asset impairment on the Consolidated Statements of Operations.

Under the liquidation basis of accounting, all of our assets and liabilities held for sale are recorded on the Consolidated Statements of Net Assets in Liquidation at the amount of their estimated cash proceeds or other consideration from liquidation.

During the year ended December 31, 2022, we increased our estimate of the net realizable value of assets held for sale by $1.1 million due to the change in inventory and property and equipment levels used to operate the Prime Subaru Manchester dealership which is reflected as an increase in assets held for sale on the Consolidated Statement of Changes in Net Assets in Liquidation.

**10. Accrued Expenses and Other Liabilities**

During the year ended December 31, 2022, we decreased our estimate of accrued expenses and other current liabilities by $10.9 million due to management's evaluation of the probability of the actual accrued expenses that are expected to be paid during the remainder of the liquidation period which is reflected as a decrease in accrued expenses and other liabilities on the Consolidated Statement of Changes in Net Assets in Liquidation.

The decrease in accrued expenses and other liabilities was primarily attributed to the decrease of the health and worker's compensation insurance payable reserve of $4.5 million based on current assessments subsequent to the Group 1 Sale, and a decrease to the Finance and Insurance payable reserve of $3.4 million as a result of a settlement with the provider. This, coupled with decreases in the projected professional fee and employee expenses of $2.1 million accounted for substantially all of the decrease in accrued expenses and other liabilities which is reflected on the Consolidated Statement of Changes in Net Assets in Liquidation.

**11. Borrowings**

***Floorplan Financing Agreements***

Historically, the Partnership's subsidiaries were party to financing agreements with M&T Bank (as part of an eight member syndicate), J.P. Morgan Chase ("Chase"), Ford Motor Credit Company ("FMCC"), Ally Bank and Ally Financial ("Ally"), GM Financial ("GMF"), and Truist Financial (formerly Branch Banking and Trust Partnership) for the purpose of financing the purchase of new, used and loaner vehicles for certain brands, in addition to providing operational liquidity in the form of mortgages and term debt which is explained in the "Long Term Debt" section below. As a result of the Group 1 Sale, M&T Bank provides floorplan financing for the remaining operating dealership, Prime Subaru Manchester and all other third party debt has been re-paid in 2021. In January 2022, the Partnership and GPB Prime entered into an Amendment, that, among other things, (i) allows for distribution to the Partnership and GPB Holdings II, LP of $570.0 million representing a portion of the proceeds received from the Group 1 Sale; (ii) changes the definition of floor plan borrowers to mean Prime Subaru Manchester; (iii) decreases the credit limit that may be borrowed for vehicle floorplan financing from $360.0 million to up to $8.8 million; and (iv) replaces the benchmark interest rates for borrowings from the London Interbank Offered Rate (LIBOR) to the SOFR subject to certain adjustments in the Amendment. The M&T Credit Agreement was amended primarily to reflect that we only own one remaining new vehicle dealership and no longer require the same amounts of debt financing as was

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previously in place. Proceeds from the Group 1 Sale were used in part to repay all other amounts outstanding under the M&T Credit Agreement.

On December 28, 2021, the Partnership and GPB Prime reached an agreement in principal with M&T Bank to allow for a distribution to the Partnership and GPB Holdings II, LP, a sum of $570.0 million, of which, $188.8 was distributed to GPB Holdings II, LP, an affiliate of the Partnership. In January 2022, the Partnership entered into the Amendment to the M&T Credit Agreement which, among other things, reaffirmed the agreement in principle to allow for this distribution.

The maximum financing available under the Amendment was $7.0 million for new vehicles, including loaner vehicles, and $1.8 million for used vehicles, as of December 31, 2022 and 2021. Financing available for new vehicles, including loaner vehicles, and used vehicles combined was $6.3 million and $5.4 million as of December 31, 2022 and 2021, respectively. Amounts outstanding under these agreements may at times exceed the stated limits on a temporary basis. Interest rates are based on the SOFR or the LIBOR plus an applicable margin. The interest rate was 6.25% and 1.85% as of December 31, 2022 and 2021, respectively.

The outstanding payable under these floorplan financing agreements of $2.5 million and $3.4 million is reflected as floorplan payable on the Consolidated Statements of Net Assets in Liquidation as of December 31, 2022 and 2021, respectively. Total floorplan interest expense from borrowings related to financial institutions was $3.0 million and $10.5 million for the years ended December 31, 2021 and 2020, respectively and is included in interest expense in the Consolidated Statements of Operations. Floor plan interest paid during the year ended December 31, 2022 was $0.2 million and was recorded as a reduction of liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statement of Net Assets in Liquidation.

On December 30, 2022, Prime Subaru Manchester and M&T Bank entered into a Demand Note for the purpose of financing the purchase of new, used and loaner vehicles for certain brands. The maximum financing available under this Demand Note is $8.75 million. The interest rate is 1.87 percentage points above the 1-Month Term SOFR, adjusted daily. This Demand Note replaces the previously mentioned M&T Credit Agreement and amendments and no longer includes restrictions that were previously imposed with respect to GPB Prime's ability to distribute assets to the Partnership.

***Long Term Debt***

Total interest expense from borrowings related to financial institutions was $8.6 million and $13.7 million for the years ended December 31, 2021 and 2020, respectively and is included in interest expense in the Consolidated Statements of Operations.

Proceeds received from the dispositions discussed in "Footnote 5. Dispositions" were used in part to pay down the related long term debt amounts outstanding. As of December 31, 2021 all term loans were re-paid in full.

***Paycheck Protection Program Loans***

In 2020, the Partnership's subsidiaries entered into Paycheck Protection Program loans ("PPP Loans"), for a total initial amount of $20.0 million across 30 loans. Interest accrued at 1% per annum. Per H.R. 7010, the Paycheck Protection Program Flexibility Act of 2020, all payment of principal, interest, and fees was deferred until the date on which the amount of loan forgiveness, as determined by the SBA, was remitted to the lender. Twenty-nine loans have been approved for forgiveness in whole or in part. For the years ended December 31, 2021 and 2020, $19.8 million and nil, respectively, was forgiven and is included in gain on forgiveness of PPP Loans on the Consolidated Statements of Operations.

**12. Employee Benefit Plans**

The Partnership's dealerships sponsor defined contribution plans for all eligible employees, which are defined as generally full-time employees at least 18 years of age. The Partnership may make a discretionary matching contribution to be determined by management. Contributions to the plans made by the Partnership were $1.8 million and $1.9 million for the years ended December 31, 2021 and 2020 respectively, which are included in selling, general and administrative expenses on the Consolidated Statements of Operations. Contributions paid into the plan during the year ended December 31, 2022 were immaterial to the Consolidated Financial Statements.

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**13. Leases**

***Operating and Finance Leases***

Prior to the sale of substantially of our dealerships and real estate, the Partnership leased certain properties under agreements which expired through 2038. Leases with an initial term of 12 months or less were not recorded on the Consolidated Balance Sheets. Lease expense was recognized for these leases on a straight-line basis over the lease term. Most leases included one or more options to renew, with renewal terms that could extend the lease term from one to five more years. Lease renewal options were exercised at the sole discretion of the Partnership. Certain of these lease agreements contained purchase options for the Partnership to acquire the related properties at an established price within a stated period of time.

The lessor of certain agreements, entered into in December 2018 and February 2019, is an entity owned by the Former CEO of Automile. The leases required annual rent payments ranging from approximately $1.7 million to $2.2 million through February 2034. Rent expense under these lease agreements in 2021 and 2020 totaled approximately $1.4 million and $1.7 million, respectively and are recorded as a component of rent expense in the Consolidated Statements of Operations.

The Partnership was party to both operating and finance lease contracts where property was leased from others ("lessee" contracts) and where others leased property from the Partnership ("lessor" contracts), for real estate (dealership locations and vehicle storage lots).

As a result of the sale of all substantially all of our dealerships and real estate in 2021 whereby the existing leases were transferred to the respective buyers, the only two leases the Partnership continues to be party to are for the real estate that Prime Subaru Manchester operates on, which is included as liabilities held for sale and an unoccupied former dealership, which is included as operating lease liabilities on the Consolidated Statements of Net Assets in Liquidation. At December 31, 2021, the right-of-use asset associated with the Prime Subaru Manchester lease was fully impaired in liquidation as we do not anticipate we will receive proceeds in the disposition of this lease with a charge to Partners' Capital of $2.2 million as presented as a component of the increase due to estimated net realizable value of Assets Held for Sale in "Footnote 4. Net Assets in Liquidation." The right-of-use asset associated with the leased space for the former dealership was fully impaired in 2021, due to the fact we are no longer occupying the space with a charge to impairment expense of $0.8 million reflected as a component of asset impairment expense on the Consolidated Statement of Operations.

In 2021 and 2020, the Partnership recorded an impairment loss of $0.9 million and nil, respectively, which has been classified as a component of asset impairment in the Consolidated Statements of Operations.

Components of operating and finance lease expense includes (1) amortization of right-of-use-assets - finance included as a component of depreciation and amortization on the Consolidated Statements of Operations; (2) interest on lease liabilities is included as a component of interest expense on the Consolidated Statements of Operations; and (3) amortization of right-of-use assets - operating and short term lease cost are included as a component of rent expense on the Consolidated Statements of Operations. These components for the years ended December 31, 2021 and 2020 consist of the following:

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| | | |
|:---|:---|:---|
| (Dollars in thousands) | **2021** | **2020** |
| Finance lease costs |  |  |
| &nbsp;&nbsp;Amortization of right-of-use assets - finance | $1832 | $2006 |
| &nbsp;&nbsp;Interest on lease liabilities | 1542 | 1769 |
| Amortization of right-of-use assets - operating | 4618 | 4951 |
| Short term lease cost | 1595 | 3380 |
| Total lease cost | $9587 | $12106 |

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Contractual maturities of our lease as of December 31, 2022 consisted of the following:

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| | |
|:---|:---|
| (Dollars in thousands) | **Operating** |
| 2023 | $274 |
| 2024 | 274 |
| 2025 | 274 |
| 2026 | 106 |
| Total lease payments | 928 |

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The table above excludes the Prime Subaru Manchester lease obligation which is included in liabilities held for sale.

**14. Redeemable Non-Controlling Interests and Non-Controlling Interests**

***Redeemable Non-Controlling Interests***

In August 2020, the Partnership and Toyota Motor Sales ("TMS") settled a dispute via a confidential settlement arrangement. As part of this resolution, the current CEO of GPB Prime agreed to make an investment of $3.7 million in the subsidiary which holds the Partnership's Toyota dealerships. In connection with the CEO's investment of $3.7 million, the agreement between the Partnership and the CEO provides terms that upon certain triggers, including a mandatory repurchase requirement upon the death of the holder, the Partnership is required to repurchase all of the interest. As a result, the non-controlling interest was adjusted to $4.0 million and was classified as a component of redeemable non-controlling interest in the Consolidated Balance Sheet as of December 31, 2020. For the year ended December 31, 2021 interest expense of approximately $1.2 million was recorded and is included in other income in the Consolidated Statements of Operations. In November 2021, the Partnership paid $5.2 million to satisfy in full, the redeemable non-controlling interest obligation.

The Partnership entered into a repurchase agreement in 2017 with the Former CEO of Automile ("David Rosenberg"), a related party who held a non-controlling interest in a subsidiary of the Partnership. The agreement provides a put repurchase feature, including a mandatory repurchase requirement upon the death of the holder.

On April 1, 2019, the Former CEO of Automile elected to have his interest redeemed. Based on the amended and restated repurchase agreement dated March 1, 2019, the defined purchase price for the interest was set at $23.6 million. This amount was to be paid in four equal installments of $5.9 million, beginning on July 1, 2019 and thereafter annually on April 1, 2020 through April 1, 2022.

Due to the of bank restrictions, see "Footnote 11. Borrowings", the Partnership did not make the required payment due on July 1, 2019. As a result, the amount due on July 1, 2019 of $5.9 million accrued interest at LIBOR plus 5.0% per annum.

The second required payment of $5.9 million, due April 1, 2020, was also not paid, and accrued interest at LIBOR plus 5.0% effective April 2, 2020.

Pursuant to the repurchase agreement, management has determined that no further adjustments to the liability will be required subsequent to the election of the repurchase, other than the accrual of interest, as noted below. For the year ended December 31, 2021, an accrual of $5.7 million was recorded in the Consolidated Statements of Operations to account for the 2021 interest and a final settlement reached between Mr. Rosenberg and the Partnership further described in "Footnote 17. Commitment and Contingencies." In November 2021, the Partnership paid $25.0 million to Mr. Rosenberg to satisfy the outstanding redeemable non-controlling interest liability. In addition, as part of a legal settlement, the Partnership paid $5.0 million to Mr. Rosenberg which is included in selling, general, and administrative expenses included in the Consolidated Statements of Operations for the year ended December 31, 2021

***Non-Controlling Interests***

The dealerships acquired from the Ron Carter Group each have members holding an aggregate 25% non-controlling interest in those entities.

An affiliated entity to the Partnership, GPB Holdings II, LP, holds a 33.5% non-controlling interest in GPB Prime. In 2021, as a result of the proceeds from dispositions of dealerships, property and equipment, see "Footnote 5. Dispositions", the Partnership distributed $188.8 million to GPB Holdings II, LP.

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On March 8, 2022, the Partnership and GPB Prime reached an agreement in principle with M&T Bank to allow for an additional $85.0 million distribution to the Partnership and GPB Holdings II, LP, of which $28.5 million was distributed to GPB Holdings II, LP, an affiliated entity to the Partnership which holds a 33.5% non-controlling interest in GPB Prime.

On April 26, 2022, the Partnership and GPB Prime reached an agreement in principle with M&T Bank to allow for an additional $30.0 million distribution to the Partnership and GPB Holdings II, LP, of which $10.1 million was distributed to GPB Holdings II, LP.

On December 27, 2022, the Partnership distributed $0.1 million to the former general manager of two dealerships of the New York Metro reporting unit, who holds 4% non-controlling interest, in the two New York Metro dealerships.

In December 2021, $2.2 million of distributions to non-controlling interests that had yet to be paid were recorded in due to related parties on the Consolidated Statements of Net Assets in Liquidation and subsequently paid in January 2022.

On January 5, 2023, the Partnership and GPB Prime reached an agreement for an additional $24.0 million distribution to the Partnership and GPB Holdings II, LP, of which $8.0 million was distributed to GPB Holdings II, LP.

**15. Partners' Capital**

***Capital Contributions***

The Partnership was authorized to issue up to $750.0 million of Class A and Class B Limited Partnership Units.

As of December 31, 2022, there were 7,884.08 Class A Limited Partnership Units, 3,543.39 Class A-1 Limited Partnership Units, 1,504.04 Class B Limited Partnership Units and 589.08 Class B-1 Units issued and outstanding.

As of December 31, 2021, there were 7,879.94 Class A Limited Partnership Units, 3,547.51 Class A-1 Limited Partnership Units, 1,504.04 Class B Limited Partnership Units and 589.08 Class B-1 Units outstanding. Each class of limited partnership interests is restricted and cannot be transferred without the consent of the General Partner. The unit issuance fees for Class B and Class B-1 Limited Partners are different than the fees paid by Class A and Class A-1 Limited Partners. These fees are direct and incremental costs of raising capital from issued Units and are reflected as unit offering costs in the Consolidated Statements of Partners' Capital. GPB Auto SLP, LLC ("SLP" or the "Special LP"), an affiliate of the General Partner, is entitled to receive a performance allocation from the Partnership as discussed below.

***Distributions***

After payment of any tax distributions and payment and reservation of all amounts deemed necessary by the General Partner in its sole discretion, the Partnership has, at times since inception, made Class A and Class A-1 ordinary cash distributions at a rate of 8% of each Limited Partners' adjusted Units per annum through 2018. Adjusted Units are calculated based on gross capital contributions of $50,000 less 11% selling fees equaling 1 adjusted unit. For example, if a Limited Partner subscribed into Class A for $50,000 with 11% selling fees, resulting in a net capital contribution of $44,500, that investor would receive a yearly distribution of $4,000. The calculation for this Limited Partner is 1 unit multiplied by the 8% distribution rate. Class B and Class B-1 investors have received ordinary cash distributions at a rate of 8.7% of gross capital contributions. As of December 31, 2022 and through the date of this filing, none of the Limited Partners have reached the second tier of priority noted below (capitalized terms herein shall have the definition in accordance with the LPA and PPM).

● First, 100% to the Limited Partners, in proportion to their respective Net Capital Contributions, until each Limited Partner has received cumulative distributions equal to such Limited Partners' Net Capital Contribution Amount;

● Second, 100% to the Limited Partners, in proportion to their respective Unreturned Capital Contributions, until each Limited Partner has received cumulative distributions equal to such Limited Partners' aggregate Capital Contributions;

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● Third, 100% to the Limited Partners, in proportion to their respective Accrued Preferred Returns, until each Limited Partner has received cumulative distributions equal to the sum of such Limited Partners' aggregate Capital Contributions and Limited Partner Preferred Return;

● Fourth, 100% to the Special Partner until the cumulative distributions made to the Special Partner equal 20% of the sum of all amounts distributed to each Limited Partner in excess of such Limited Partners' Net Capital Contribution Amount and to the Special Partner; and

● Thereafter, amounts available for distribution by the Partnership will be distributed 80% to the Limited Partners and 20% to the Special Partner, with such amounts distributed to the Limited Partners in proportion to their respective aggregate Capital Contributions.

In the first quarter of 2019, the Partnership transitioned to a quarterly dynamic distribution rate, paid in arrears. The General Partner determines distribution amounts, if any, following the end of the calendar quarter, and generally paid out any approved distributions prior to the end of the subsequent quarter. Distribution rates under this policy have historically fluctuated from quarter to quarter based on, among other things, the performance of the Partnership. As a result, Limited Partners should not expect future distribution rates to be consistent at the same rate as the past ones. In accordance with the first step of the Partnership's distribution waterfall, all of the Partnership's distributions made to date have been a return of capital contributions made to the Partnership by investors. The source of these return of capital distributions have included, and may in the future continue to include, cash flow from operations and investor contributions. As of February 2021, all distributions, if any, need to be approved by the Monitor until further notice.

As of December 31, 2021, there were state tax withholding distributions accrued on behalf of the Limited Partners of $6.9 million included as distributions payable for tax withholding on the Statements of Net Assets in Liquidation.

During the year ended December 31, 2022, there were state tax withholding distributions made on behalf of the Limited Partners of $1.4 million which is reflected as tax distributions made in excess of liabilities recorded on the Consolidated Statement of Changes in Net Assets in Liquidation.

As of December 31, 2022, there were state tax withholding distributions accrued on behalf of the Limited Partners of $1.4 million included as a component of liability for estimated costs in excess of estimated receipts during liquidation. on the Consolidated Statement of Net Assets in Liquidation.

Net profits and net losses are to be allocated to the Limited Partners according to their capital accounts in a manner sufficient to cause each Limited Partners' capital account to equal the amounts such Limited Partners would receive upon the liquidation of the Partnership. Net profits and net losses are determined on an accrual basis of accounting in accordance with US GAAP.

***Redemptions***

As per the LPA and PPM, Limited Partners who have held their Units for at least one year may request that the Partnership repurchase all, but not less than all, of their Units. A Limited Partners' ability to request a redemption may not be construed to mean a Limited Partner has any right to demand or receive the return of such Limited Partners' capital contribution or otherwise modify any limitations under the PPM. The Partnership intends to redeem Units on a quarterly basis on the last business day of each calendar quarter and will not redeem in excess of 10% of the Units during any 12-month period, provided that the Partnership will not redeem any Units held by a Limited Partner prior to the time that is 60 calendar days after the Partnership receives the required written notice from the Limited Partner. The redemption price for redeemed Units will be 97% of the net asset value of such Units as of the close of business on the applicable redemption date, minus any fees incurred by the Partnership in connection with the redemption, including legal and administrative costs for redemption. The General Partner reserves the right in its sole discretion at any time and from time to time to (1) reject any request for redemption, (2) change the price or prior notice period for redemptions, or (3) terminate, suspend and/or reestablish the Partnership's redemption program. The General Partner will determine from time to time whether the Partnership has sufficient excess cash from operations to repurchase Units. Generally, the cash available for redemptions will be limited to 10% of the Partnership's operating cash flow from the previous fiscal year. If the funds set aside for the redemption program are not sufficient to accommodate all requests as of any calendar quarter end, then at such future time, if any, when sufficient funds become available in the General

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Partner's sole discretion, pending requests will be honored among all requesting Limited Partners in accordance with their order of receipt.

In August 2018, the General Partner suspended all redemptions.

**16. Related Party Transactions**

**FEES AND EXPENSES**

The Partnership has entered into numerous related party transactions. The Partnership has incurred the following fees and expenses:

***Managerial Assistance Fee***

Per the LPA and PPM, GPB, as General Partner is entitled to receive an annualized managerial assistance fee (the "Managerial Assistance Fee"), for providing managerial assistance services to the Partnership and the dealership. Those services include conducting the day-to-day operations of the Partnership inclusive of the identification, management and disposition of underlying portfolio companies and/or dealerships, and other duties assumed and stated under the LPA. The Managerial Assistance Fee does not include expenses related to In-House services and operations support services provided to the Partnership or its operating companies. Such expenses are in addition to, and not in lieu of, the Managerial Assistance Fee. The Managerial Assistance Fee is payable by the Partnership quarterly in advance of 2.0% per annum for Class A and B Units and 1.75% per annum for Class A-1 and B-1 Units calculated on each Limited Partners' Gross Capital Contributions. GPB, in its sole discretion, may defer, reduce or waive all or a portion of the Managerial Assistance Fee with respect to one or more Limited Partners for any period of time (and intends to waive the Managerial Assistance Fee with respect to the Special LP, as defined below, and its affiliates that invest in the Partnership). Managerial Assistance Fees charged to expense and included in the Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 were $12.2 million and $12.9 million, respectively. During the year ended December 31, 2022, GPB reduced the Management Assistance Fees expected to be paid during the liquidation term resulting in a reduction in the liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statements of Net Assets in Liquidation of $10.8 million. During the year ended December 31, 2022, the Partnership paid $8.5 million in managerial assistance fees which reduced the liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statement of Net Assets in Liquidation.

***Partnership Expenses***

The Partnership pays its own operating expenses. GPB is responsible for its or its affiliates' general and administrative costs and expenses and its day-to-day overhead expenses of managing the Partnership and is not entitled to be reimbursed by the Partnership for such expenses other than for the portion of the total compensation of GPB's or its affiliates (including holding companies) officers and employees relating to the time such officers or employees provide In-House services or Operations Support Services to the Partnership or its dealerships. Such expenses are in addition to, and not in lieu of, the Managerial Assistance Fee. "In-House services" include but are not limited to accounting, legal, compliance, information technology, human resources, and operational and management services to the Partnership or the dealerships. Operations Support Services include but are not limited to operational support and consulting services and similar services to, or in connection with, the identification, acquisition, holding and improvement of the dealerships. In addition, GPB pays expenses on the Partnership's behalf when operationally feasible and obtains reimbursement. Partnership expenses included as a component of selling, general and administrative expenses in the Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 were $6.0 million and $1.8 million, respectively. The balance associated with Partnership expenses payable was $0.1 and $0.6 million of December 31, 2022 and 2021, respectively, and was included as a component of due to related parties in the Consolidated Statements of Net Assets in Liquidation. Partnership expenses paid for the year ended December 31, 2022 were $6.9 million, which reduced the liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statements of Net Assets in Liquidation by a corresponding amount. For the year ended December 31, 2021, the Partnership reimbursed Highline $1.2 million for professional fees that are included as a component of selling, general and administrative expenses in the Consolidated Statements of Operations. The partnership expenses paid for by the Partnership to GPB are passed along to vendors that are unrelated parties which are included in general and administrative expenses - corporate in "Footnote 3. Liability for Estimated Costs in Excess of Estimated Receipts During Liquidation".

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**NOTES PAYABLE TO RELATED PARTIES**

In 2017, the Partnership entered into two loan agreements with an affiliate of the Partnership, GPB Automotive Income Sub-Fund, Ltd. ("GPB AISF"), an offshore financing facility formed for the benefit of the Partnership, ("AISF Note 5 and AISF Note 6") for a total of $11.8 million and incurred debt issuance costs of $2.0 million. In 2019, the Partnership entered into one loan agreement ("AISF Note 7") with GPB AISF for $3.3 million and incurred debt issuance costs of $0.6 million.

Each AISF note matures four years from the issuance date, and accrues interest at 8.75% per annum, payable monthly in arrears. In July 2021, AISF Note 5 and AISF Note 6 were amended to increase the interest rate to 12.5% and to extend the maturity date to December 2022. Interest expense relating to these loans reflected as a component of interest expense to related parties on the Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 was $1.4 million and $3.3 million, respectively. The amortization of the capitalized debt issuance costs reflected as a component of interest expense to related parties in the Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 was $0.5 million and $1.8 million, respectively. The balance of accrued interest associated with these loans was $2.7 million and $1.8 million as of December 31, 2022 and 2021, respectively, and was included as a component of Notes related parties in the Consolidated Statements of Net Assets in Liquidation.

AISF Note 5, AISF Note 6, and AISF Note 7 entered into default in 2021. In August 2021, a waiver for the event of default was issued and the interest payments were deferred until December 2022 for AISF Note 5, AISF Note 6, and AISF Note 7. Upon maturity, payments have not been made for AISF Note 5 and AISF Note 6. Additional interest has been accrued through June 2023 of $0.8 million for AISF Note 5, AISF Note 6, and AIFS Note 7, as that represents the Partnership's estimate of the expected date of repayment, and was included as a component of due to related parties on the Consolidated Statements of Net Assets in Liquidation as of December 31, 2022 and a component of increase in notes payable - related party on the Statement of Changes in Net Assets in Liquidation.

Notes payable - related party consisted of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
| (Dollars in thousands) |  |  | **December 31,**  | **December 31,**  |
| **Note** | **Face Value** | **Maturity Date** | **2022** | **2021** |
| AISF Note 5 | $6556 | 12/31/2022 | $6556 | $6556 |
| AISF Note 6 | 5203 | 12/31/2022 | 5203 | 5203 |
| AISF Note 7 | 3272 | 4/24/2023 | 3272 | 3026 |
| Total |  |  | 15031 | 14785 |
| Add: accrued interest in liquidation |  |  | 2651 | 1850 |
| Total notes payable - related party |  |  | $17682 | $16635 |

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**DUE FROM AFFILIATED COMPANIES**

The Partnership incurred expenses for payroll and employee benefits, professional fees, consulting and outside services, and other services on behalf of affiliated entities. These expenses were initially paid by the Partnership and then charged on a pro-rata basis to each of the other limited partnerships managed by GPB, which operated dealerships. The Partnership had non-interest-bearing receivables from these holding companies for allocated expenses of $1.6 million at December 31, 2020. The receivables as of December 31, 2020, were gross of a $1.2 million allowance for doubtful accounts. In 2021, these balances have been forgiven and a loss was recorded as a component of selling, general and administrative expenses on the Consolidated Statements of Operations for the year ended December 31, 2021.

**OTHER RELATED PARTY TRANSACTIONS**

During 2021 and 2020, certain dealerships owned by the Partnership purchased vehicles from dealerships owned by GPB Holdings, LP, totaling nil and $2.2 million, respectively**.** No such transactions occurred during 2022.

During 2021 and 2020, certain dealerships owned by the Partnership purchased vehicles from a dealership owned by GPB Holdings II, LP, totaling $1.5 million and $1.7 million, respectively**.** No such transactions occurred during 2022.

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During 2021 and 2020, certain dealerships owned by the Partnership sold vehicles to a dealership owned by GPB Holdings II, LP, totaling $1.1 million and $0.5 million, respectively. No such transactions occurred during 2022.

The member of the General Partner (David Gentile, "Member") is a former partner of an accounting firm that performed accounting services for the Partnership. The Member's father is also a current partner at the accounting firm. The Partnership recorded professional fees expense reflected as a component of selling, general and administrative expenses in the Consolidated Statements of Operations for the years ended December 31, 2021 and 2020 of nil and $0.3 million, respectively. The Partnership no longer engages the services of this accounting firm.

In October 2020, the Member purchased a car from GPB Prime valued at $0.2 million.

GPB's principals, certain other individuals and entities that have assisted and may in the future assist in our operations are and / or will be members in GPB Auto SLP, LLC, a Delaware limited liability company (the "Special LP"). The Special LP will receive a profit allocation, commonly referred to as "carried interest", from the Partnership in accordance with the waterfall provisions in the LPA. There have been no profit allocations allocated to the Special LP.

As compensation for the services to be rendered by Highline, the Partnership pays an OSP to Highline for an annual amount agreed to by GPB and Highline, subject to the Board's approval, following Highline's delivery of the annual written budget to GPB detailing the fees, costs and expenses that will be incurred by Highline in providing its Services. The Partnership recorded OSP fees as a component of selling, general and administrative expenses in the Consolidated Statements of Operations of $3.6 million and $1.5 million, for the year ended December 31, 2021 and 2020, respectively.

OSP fees paid for the year ended December 31, 2022 were $1.1 million which reduced the liability for estimated costs in excess of estimated receipts during liquidation in the Consolidated Statements of Net Assets in Liquidation. Additionally, projected OSP fees to be paid during liquidation were revised resulting in a further reduction of $1.7 million to the liability for estimated costs in excess of estimated receipts during liquidation in the Consolidated Statements of Net Assets in Liquidation.

***Guarantees***

The Member provided personal guarantees on certain floorplan and real estate loans prior to 2018. The initial amounts guaranteed totaled $48.7 million. Pursuant to the PPM, the Member of the General Partner can charge a fee to the Partnership for providing such guarantee services. The guarantee fees payable to the Member of the General Partner was calculated at $1.0 million based on 1.99% of the amount of the loans initially guaranteed. $1.0 million was due and payable to the Member of the General Partner which is reflected as a component of due to related parties in the Consolidated Statement of Net Assets in Liquidation as of December 31, 2022 and 2021. The guarantee fees were amortized over the life of the loans and were fully amortized in 2021.

**17. Commitments and Contingencies**

We, our General Partner, and our former dealerships are involved in a number of regulatory, litigation, arbitration and other proceedings or investigations, many of which expose us to potential financial loss. We are advancing funds, pursuant to indemnification clauses in the LPA, to officers, directors and representatives of the dealerships, as well as GPB, its principals, representatives, and affiliates, for any costs they may incur in connection with their legal defense of such disputes as required by various agreements or governing law. This advancing of funds does not cover any potential future outcomes or settlements that result from these disputes.

We establish reserves or escrows for legal actions when potential losses associated with the actions become probable and the costs can be reasonably estimated. The actual costs of resolving legal actions may be substantially higher or lower than the amounts reserved or placed in escrow for those actions. Distributions may be delayed or withheld until such reserves are no longer needed or the escrow period expires. If liabilities exceed the amounts reserved or placed in escrow, Limited Partners may need to fund the difference by refunding some or all distributions previously received. In 2022, the Partnership paid $5.0 million of legal indemnification costs which reduced the liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statements of Net Assets in Liquidation by a corresponding amount. In 2021, the Partnership expensed $4.0 million of legal indemnification expenses recorded in selling, general and administrative expenses in the Consolidated Statements of Operations.

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With respect to all significant litigation and regulatory matters facing us and our General Partner, we have considered the likelihood of an adverse outcome. It is possible that we could incur losses pertaining to these matters that may have a material adverse effect on net assets in liquidation in any future reporting period. We understand that the General Partner is currently paying legal costs associated with these actions for itself and certain indemnified parties. The Partnership expects to provide partial or in many cases complete reimbursement to the General Partner as required by various agreements or governing law, but the amount is not reasonably estimable at this time.

***Regulatory and Governmental Matters***

GPB and certain of its principals and affiliates face various regulatory and governmental matters. GPB seeks to comply with all laws, rules, regulations and investigations into any potential or alleged violation of law. In such situations where GPB disagrees with the Government's allegations made against it, GPB intends to vigorously defend itself in court. These matters could have a material adverse effect on GPB and the Partnership's business, or results of operations.

***Appointment of Monitor and Application for Receivership***

On February 11, 2021, the EDNY Court in the SEC Action appointed the monitor over GPB until further order of the Court. The EDNY Court appointed the Monitor in response to a request from the SEC, which asserted that the Monitor was necessary to protect investors in light of the alleged misconduct of GPB Capital's former CEO, David Gentile. In its February 4, 2021 Complaint in the SEC Action, the SEC alleged that Mr. Gentile, as the owner and then-CEO of GPB Capital, along with Jeffry Schneider, the owner of GPB's placement agent, lied to investors about the source of money used to make 8% annualized distribution payments to investors. According to the SEC, Mr. Gentile and others allegedly told investors that the distribution payments were paid exclusively with monies generated by GPB portfolio companies, but as alleged, GPB actually used investor money to pay portions of the annualized 8% distributions. The Complaint further contains allegations that Mr. Gentile and others manipulated financial statements of certain limited partnership funds that GPB manages to perpetuate the deception by giving the false appearance that the funds' income was closer to generating sufficient income to cover the distribution payments than it actually was. Moreover, the Complaint alleges that Mr. Gentile engaged in undisclosed self-dealing, including by omitting from investor communications certain conflicts of interest and fees and other compensation that he received, totaling approximately $8.0 million.

In support of the Order, the SEC contended that the Monitor would provide assurances to investors, GPB's counterparties, and the public that an unbiased and qualified person who was not beholden to Mr. Gentile, was vetting any significant transactions and decisions, and looking out for the interests of investors. Accordingly, pursuant to the Order, GPB shall (i) grant the Monitor access to all non-privileged books, records and account statements for the GPB-managed funds, including the Partnership, as well as their portfolio companies; and (ii) cooperate fully with requests by the Monitor reasonably calculated to fulfill the Monitor's duties. As noted below, the Order was amended on April 14, 2021.

The Monitor is required to assess the Partnership's operations and business, and make recommendations to the EDNY Court, which may include continuation of GPB's operations subject to the Monitorship, a liquidation of assets, or filing for reorganization in bankruptcy. The Order provides that the Monitor will remain in place until terminated by order of the EDNY Court, and grants the Monitor the authority to approve or disapprove proposed material corporate transactions by GPB, the Partnership and its subsidiaries, extensions of credit by them outside the ordinary course of business, decisions to make distributions to the Limited Partners of the Partnership, or any decision to file any bankruptcy or receiver petition for any of them, among other actions. The Monitor is not required to approve the issuance of the Consolidated Financial Statements included within this Form 10-K, nor has management sought or obtained approval from the Monitor.

On April 14, 2021, the EDNY Court entered an Amended Order, providing that, in addition to the SEC and GPB, certain State regulators will receive access to the periodic reports filed by the Monitor pursuant to the Order.

On May 31, 2022, Mr. Gentile filed a motion in the SEC Action to modify the Amended Order pursuant to Rule 60(b) of the Federal Rules of Civil Procedure. In his Rule 60(b) Motion, Mr. Gentile is seeking a court order to, among other things, (i) narrow the scope of the Monitor's responsibilities; and (ii) direct the Monitor to ensure that GPB does not sell or otherwise dispose of assets or portfolio companies that the Partnership owns before the completion of a "strategic assessment" to be conducted by three managers Mr. Gentile purportedly appointed to GPB on May 27, 2022. On that same day, May 31, 2022, the Monitor notified Mr. Gentile and GPB that Mr.

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Gentile's purported appointment of three new managers to GPB without Monitor approval was, amongst other things, in violation of the Amended Order. Mr. Gentile and GPB were, at that time, given ten (10) business days to cure the violation of the Amended Order. The cure period has expired without any steps having been taken to comply with the Monitor's notification of violation of the Amended Order.

On June 13, 2022, the SEC filed by Order to Show Cause in the SEC Action an application to (i) convert the existing Monitorship over GPB and the GPB-managed funds to a Receivership, and appoint the previously-appointed Monitor, Joseph T. Gardemal III, as Receiver; and (ii) impose a litigation injunction on cases filed against GPB and the GPB-managed funds. The Receivership Application and the Proposed Order were filed with the EDNY Court with consent of GPB's management.

The Receivership Application seeks appointment of Mr. Gardemal as Receiver in order to, in part, streamline the process by which GPB and the GPB-managed funds liquidate remaining portfolio company assets and distribute money to Limited Partners, subject to the EDNY Court's supervision. The Proposed Order grants to Mr. Gardemal, generally, all powers and authorities previously possessed by the entities subject to the Proposed Order, as well as the powers possessed by the officers, directors, managers and others previously in charge of those entities, and permits him to, among other things, take all such actions necessary to preserve receivership assets.

Additionally, the Receivership Application includes a proposed stay of all Federal and State actions (as well as any arbitrations) presently pending against GPB and the GPB-managed funds, and provides for a centralized claims process for GPB Limited Partners, in the EDNY Court, to prevent potentially disparate actions in different courts that could negatively impact the assets proposed to be subject to the EDNY Court's jurisdiction and control.

The Rule 60(b) Motion and the validity of the appointment of the new managers are presently under consideration by the EDNY Court, along with the Receivership Application. Currently, there can be no assurance as to the outcome of the Rule 60(b) Motion or the Receivership Application.

***Federal Matters***

On February 4, 2021, the SEC filed an action against GPB, Ascendant, AAS, David Gentile, Jeffry Schneider and Jeffrey Lash in the EDNY Court. No GPB-managed partnership is a named defendant in the SEC Action. The SEC Action alleges several violations of the federal securities laws, including securities fraud. The SEC is seeking disgorgement and civil monetary penalties, among other remedies.

Also, on February 4, 2021, the USAO brought the Criminal Case against Mr. Gentile, Mr. Schneider, and Mr. Lash. The indictment in the Criminal Case alleges conspiracy to commit securities fraud, conspiracy to commit wire fraud, and securities fraud against all three individuals. Mr. Gentile and Mr. Lash were also charged with two counts of wire fraud. We understand that the USAO intends to seek criminal forfeiture. Mr. Gentile resigned from all management and board positions with GPB and Highline, and the GPB-managed funds, including the Partnership, and subsidiaries of the Partnership, promptly following his indictment.

***State Matters***

On May 27, 2020, the Massachusetts filed an Administrative Complaint against GPB for alleged violations of the Massachusetts Uniform Securities Act. No GPB-managed fund is a named defendant. The complaint alleges, among other things, that the offering documents for several GPB-managed funds, including the Partnership, included material misstatements or omissions. Massachusetts is seeking both monetary and administrative relief, including disgorgement and rescission to Massachusetts residents who purchased the GPB-managed funds. This matter is currently stayed, pending resolution of the Criminal Case.

On February 4, 2021, seven state securities regulators (from Alabama, Georgia, Illinois, Missouri, New Jersey, New York, and South Carolina, collectively the "States") each filed suit against GPB. No GPB-managed fund is a named defendant in any of the suits. Several of the suits also named Ascendant, AAS, Mr. Gentile, Mr. Schneider, and Mr. Lash as defendants. The States' lawsuits allege, among other things, that the offering documents for several GPB-managed funds, including the Partnership, included material misstatements and omissions. The States are seeking both monetary and administrative relief, including disgorgement and rescission. The cases brought by the States have been stayed pending the conclusion of the related Criminal Case. The State of New Jersey has voluntarily dismissed its case, without prejudice to re-file it following the conclusion of the Criminal Case.

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***Actions Asserted Against GPB and Others, Not Including the Partnership***

**Ismo J. Ranssi, derivatively on behalf of Armada Waste Management, LP, v. GPB Capital Holdings, LLC, et al. (New York Supreme Court, New York County, Index No. 654059/2020)**

In August 2020, plaintiffs filed a derivative action against GPB, Ascendant, AAS, Axiom, David Gentile, Mark D. Martino, and Jeffry Schneider in New York Supreme Court. GPB Waste Management, LP is named as a nominal defendant. The Partnership is not a named defendant. The Complaint alleges, among other things, that the offering documents for certain GPB managed funds include material misstatements and omissions. Plaintiffs bring causes of action against GPB for breach of fiduciary duty, breach of contract, unjust enrichment, and an equitable accounting, and against all other defendants for breach of fiduciary duty and aiding and abetting breach of fiduciary duty, and unjust enrichment. The plaintiffs seek a declaration from the Court that defendants breached duties owed to them, and that defendants must indemnify GPB Waste Management, LP for costs in connection with the suit. Plaintiffs also seek unspecified damages and an equitable accounting, and an Order that defendants disgorge all fees obtained through the sale of GPB Waste Management, LP "securities". Any potential losses associated with this matter cannot be estimated at this time.

**Galen G. Miller and E. Ruth Miller, derivatively on behalf of GPB Holdings II, LP, v. GPB Capital Holdings, LLC, et al. (New York Supreme Court, New York County, Index No. 656982/2019)**

In November 2019, plaintiffs filed a derivative action against GPB, Ascendant, AAS, Axiom, Michael Cohn, Steven Frangioni, David Gentile, William Jacoby, Minchung Kgil, Mark D. Martino, and Jeffry Schneider in New York Supreme Court, New York County. The Partnership was named only as a nominal defendant. An Amended Complaint was filed on or about March 2, 2020, alleging, among other things, that the offering documents for certain GPB-managed funds include material misstatements and omissions. The Amended Complaint alleges causes of action for breach of fiduciary duty against all defendants; aiding and abetting breach of fiduciary duty against Ascendant, AAS, Axiom and Mr. Martino; breach of contract against GPB; unjust enrichment against all defendants; and an equitable accounting against GPB. The plaintiffs are seeking disgorgement of alleged unjust enrichment, unspecified damages as a result of alleged wrongful acts, costs of the action, and an equitable accounting. Any potential losses associated with this matter cannot be estimated at this time.

**GPB Lender, LLC v. GPB Capital Holdings, LLC (New York Supreme Court, Nassau County, Index No. 604887/2022)**

On or about April 14, 2022, plaintiff GPB Lender, LLC, a related entity, filed a lawsuit against GPB Capital Holdings, LLC in New York Supreme Court, Nassau County, for breaches of a promissory note and breaches of contract related to a 2016 loan agreement and a 2019 loan agreement entered into between the parties. Plaintiff alleged that it is owed approximately $2.0 million in unpaid principal and interest under the promissory note. Plaintiff also alleged that it is owed approximately $0.4 million in unpaid principal and interest under the two loan agreements. On January 30, 2023, the Court granted GPB Lender, LLC's motion for summary judgment in the principal amount of approximately $2.5 million, plus interest. No costs are expected to be charged to the Partnership.

**Cient LLC v. GPB Capital Holdings, LLC (New York Supreme Court, Nassau County, Index No. 604886/2022)**

On or about April 14, 2022, plaintiff Cient LLC, a related entity, filed a lawsuit against GPB Capital Holdings, LLC in New York Supreme Court, Nassau County, for breach of a loan agreement and breach of contract relating to a 2019 loan agreement entered into by the parties. Plaintiff alleged that approximately $0.8 million in unpaid principal remains due, along with accrued and unpaid interest. On January 30, 2023, the Court granted Cient LLC's motion for summary judgment in the principal amount of $0.9 million, plus interest. No costs are expected to be charged to the Partnership.

**Plymouth Rock Holding LLC v. GPB Capital Holdings, LLC (New York Supreme Court, Nassau County, Index No. 604873/2022)**

On or about April 14, 2022, plaintiff Plymouth Rock Holding, LLC, a related entity, filed a lawsuit against GPB Capital Holdings, LLC in New York Supreme Court, Nassau County, for breach of a loan agreement and breach of contract relating to a 2019 loan agreement entered into by the parties. Plaintiff alleged that approximately $0.3 million in unpaid principal remains due, along with accrued and unpaid interest. On January 30, 2023, the Court granted Plymouth Rock Holding LLC's motion for summary judgment in the principal amount of $0.4 million, plus interest. No costs are expected to be charged to the Partnership.

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***Actions Asserted Against GPB and Others, Including the Partnership***

For all matters below in which the Partnership is a defendant and where the partnership disagrees with the allegations against, we intend to vigorously defend against the allegations, however no assurances can be given that we will be successful in doing so.

**Tom Alberto, et al. v. GPB Capital Holdings, LLC, et al. (American Arbitration Association, Case Number: 01-22-0001-5433)**

On or about April 13, 2022, claimants, investors in funds managed by GPB Capital Holdings, LLC, commenced an arbitration with the American Arbitration Association against GPB Capital Holdings, LLC, GPB Automotive Portfolio, LP, GPB Holdings II, LP, GPB Cold Storage, LP, GPB Holdings, LP, GPB Holdings II, LP, GPB Holdings Qualified, LP, GPB Holdings III, LP, GPB NYC Development, LP, and GPB Waste Management, LP, along with other non-GPB parties. All claimants were customers of Concorde Investment Services, LLC ("Concorde"), and each purchased his or her limited partnership interest in a GPB-managed fund through Concorde. Claimants asserted claims based on fraud, breach of fiduciary duty, breach of contract, among others, and claimed to have suffered millions of dollars in damages.

GPB contended that the arbitration was improperly filed, and as such commenced a proceeding in New York State Supreme Court (GPB Capital Holdings, LLC et al. v. Tom Alberto et al., Index No. 656432/2022), solely for the purpose of seeking a stay of the arbitration. In July 2022, following the Court's entry of an Order temporarily staying the arbitration, the parties stipulated and agreed to the entry of a court order entering judgment for GPB and the other petitioners. The arbitration will be permanently stayed upon the Court so-ordering the parties stipulation. In a letter dated December 20, 2022, the American Arbitration Association informed the parties to the arbitration that, as of December 20, 2022, the arbitration was closed.

**Michael Peirce, derivatively on behalf of GPB Automotive Portfolio, LP v. GPB Capital Holdings, LLC, Ascendant Capital, LLC, Ascendant Alternative Strategies, LLC, Axiom Capital Management, Inc., Steven Frangioni, David Gentile, William Jacoby, Minchung Kgil, Mark D. Martino and Jeffry Schneider, -and- GPB Automotive Portfolio, LP, Nominal Defendant (New York Supreme Court, New York County, Case No. 652858/2020)**

In July 2020, plaintiff filed a derivative action in New York Supreme Court against GPB, Ascendant, AAS, Axiom, Steve Frangioni, David Gentile, William Jacoby, Minchung Kgil, Mark Martino, and Jeffry Schneider. The Complaint alleges various breaches of fiduciary duty and/or aiding and abetting the breaches of fiduciary duty against all defendants, breach of contract against GPB, unjust enrichment, and an equitable accounting. Plaintiffs are seeking declaratory relief, disgorgement, restitution, an equitable accounting, and unspecified damages. Any potential losses associated with this matter cannot be estimated at this time.

**Alfredo J. Martinez, et al. v. GPB Capital Holdings, LLC (Delaware Chancery Court, Case No. 2019-1005)**

In December 2019, plaintiffs filed a civil action in Delaware Court of Chancery to compel inspection books and records from GPB, as General Partner, and from the Partnership, GPB Holdings I, GPB Holdings II, and GPB Waste Management. In June 2020, the court dismissed plaintiffs' books and records request, but allowed a contract claim for specific performance to proceed as a plenary action. The plaintiffs are seeking unspecified damages and penalties. Any potential losses associated with this matter cannot be estimated at this time.

**Alfredo J. Martinez and HighTower Advisors v. GPB Capital Holdings, LLC, et al. (Delaware Chancery Court, Case No. 2020-0545)** 

In July 2020, plaintiff filed a complaint against GPB, Armada Waste Management GP, LLC, Armada Waste Management, LP, the Partnership, GPB Holdings II, LP, and GPB Holdings, LP in the Delaware Court of Chancery to compel inspection of GPB's books and records based upon specious and unsubstantiated allegations regarding alleged fraudulent activity, mismanagement, and breaches of fiduciary duty. The plaintiffs are seeking an order compelling GPB to permit inspection of documents related to Armada Waste, as well as for costs and fees. Any potential losses associated with this matter cannot be estimated at this time.

**Lance Cotten, Alex Vavas and Eric Molbegat v. GPB Capital Holdings, LLC, Automile Holdings LLC D/B/A Prime Automotive Group, David Gentile, David Rosenberg, Philip Delzotta, Joseph Delzotta, and any other related entities (New York Supreme Court, Nassau County, Case No. 604943/2020)**

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In May 2020, plaintiffs filed a civil action in New York Supreme Court, Nassau County against GPB, Automile Holdings LLC d/b/a Prime Automotive Group, David Gentile, David Rosenberg, Philip Delzotta, Joseph Delzotta, and other related entities. The complaint alleges that defendants engaged in systematic fraudulent and discriminatory schemes against customers and engaged in retaliatory actions against plaintiffs, who were employed by Garden City Nissan from August until October 2019. The plaintiffs are seeking damages pursuant to New York Labor Law Section 740, which provides for compensation for lost wages, benefits, and other remuneration, and liquidated damages for alleged violations of Executive Law Section 296. No costs associated with the resolution of this matter are expected to be charged to the Partnership.

**Monica Ortiz, on behalf of herself and other individuals similarly situated v. GPB Capital Holdings LLC; Automile Holdings, LLC d/b/a Prime Automotive Group; David Gentile; David Rosenberg; Philip Delzotta; Joseph Delzotta; and other affiliated entities and individuals (New York Supreme Court, Nassau County, Case No. 604918/2020)**

In May 2020, plaintiffs filed a class action in New York Supreme Court, Nassau County against GPB, Automile Holdings LLC d/b/a Prime Automotive Group, David Gentile, David Rosenberg, Philip Delzotta, Joseph Delzotta, and other affiliated entities and individuals. In November 2020, the plaintiffs voluntarily discontinued the action only as against David Rosenberg. The Complaint alleges deceptive and misleading business practices of the named Defendants with respect to the marketing, sale, and/or leasing of automobiles and the financial and credit products related to the same throughout the State of New York. Plaintiffs allege defendants' collection of fraudulent rebates exceeds $1,000,000. The plaintiffs are seeking class-wide injunctive relief requiring defendant dealerships to disclose financing options, rebates, interest rates, and risk of repossession; monetary and punitive damages for violation of New York General Business Laws, unjust enrichment, negligent misrepresentation, and breach of contract; and also seek costs and fees. Any potential losses associated with this matter cannot be estimated at this time.

**In re: GPB Capital Holdings, LLC Litigation (formerly, Adam Younker, Dennis and Cheryl Schneider, Elizabeth Plaza, and Plaza Professional Center Inc. PFT Sharing v. GPB Capital Holdings, LLC, et al. and Peter G. Golder, individually and on behalf of all others similarly situated, v. GPB Capital Holdings, LLC, et al. (New York Supreme Court, New York County, Case No. 157679/2019)**

In May 2020, plaintiffs filed a consolidated class action complaint in New York Supreme Court, New York County against GPB, GPB Holdings, GPB Holdings II, GPB Holdings III, the Partnership, GPB Cold Storage, GPB Waste Management, David Gentile, Jeffrey Lash, Macrina Kgil, a/k/a Minchung Kgil, William Edward Jacoby, Scott Naugle, Jeffry Schneider, AAS, Ascendant, and Axiom Capital Management. The Complaint alleges, among other things, that the offering documents for certain GPB-managed funds, include material misstatements and omissions. The plaintiffs are seeking disgorgement, unspecified damages, and other equitable relief. Any potential losses associated with this matter cannot be estimated at this time.

**Phillip J. Cadez, et al. v. GPB Capital Holdings, LLC, et al. (Delaware Chancery Court, Case No. 2020-0402)** 

In May 2020, plaintiffs filed a derivative action in Delaware Court of Chancery against GPB, David Gentile, Jeffrey Lash, and Jeffry Schneider. The complaint also names GPB Holdings, LP, and the Partnership as nominal defendants. Previously, plaintiffs had filed a complaint to compel inspection of books and records, which had been dismissed without prejudice.

In the current action, plaintiffs are alleging breaches of fiduciary duties and/or the aiding and abetting of those breaches, unjust enrichment, and with regard to GPB, breach of the Partnerships' Limited Partnership Agreements. Plaintiffs are seeking unspecified damages based on the causes of action pled, equitable relief in the form of a directive to remove GPB as the General Partner of GPB Holdings, LP and the Partnership, a constructive trust, costs of the action (including attorneys' fees), and other declaratory and equitable relief. Any potential losses associated with this matter cannot be estimated at this time.

**Jeff Lipman and Carol Lipman, derivatively on behalf of GPB Holdings II, LP and GPB Automotive Portfolio, LP v. GPB Capital Holdings, LLC, et al. (Delaware Chancery Court, Case No. 2020-0054)**

In January 2020, plaintiffs filed a derivative action in Delaware Court of Chancery against GPB, David Gentile, Jeffrey Lash, and Jeffry Schneider. The Complaint alleges breaches of fiduciary duty and/or aiding and abetting breaches of fiduciary duty against each of the defendants, and declaratory relief from the Court related to allegations of fraud, gross negligence, and willful misconduct. The plaintiffs seek unspecified damages and declaratory forms of relief. Any potential losses associated with this matter cannot be estimated at this time.

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**Mary Purcell, et al. v. GPB Holdings II, LP, et al. (Cal. Supreme Court, Orange County, Case No. 30-2019-01115653-CU-FR-CJC)**

In December 2019, plaintiffs filed a civil action in Superior Court in Orange County, California against Rodney Potratz, FSC Securities Corporation, GPB Holdings II, the Partnership, GPB, David Gentile, Roger Anscher, William Jacoby, Jeffrey Lash, Ascendant, Trevor Carney, Jeffry Schneider, and DOES 1 - 15, inclusive. An Amended Complaint was filed on or about June 10, 2020. In the Amended Complaint, Plaintiffs allege breach of contract against GPB Capital and DOES 1-15, inclusive; statutory and common law fraud against all defendants; breach of fiduciary duty against all defendants; and negligence against all defendants. Plaintiffs allege losses in excess of $4.8 million and are seeking rescission, compensatory damages, unspecified equitable relief and punitive damages, and interest and attorneys' fees in unspecified amounts. Any potential losses associated with this matter cannot be estimated at this time.

**Barbara Deluca and Drew R. Naylor, on behalf of themselves and other similarly situated Limited Partners, v. GPB Automotive Portfolio, LP et al. (S.D.N.Y., Case No. 19-CV-10498)**

In November 2019, plaintiffs filed a putative class action complaint in the United States District Court for the Southern District of New York against GPB, GPB Automotive Portfolio, LP, the Partnership, David Gentile, Jeffery Lash, AAS, Axiom, Jeffry Schneider, Mark Martino, and Ascendant. The Complaint alleges fraud and material omissions and misrepresentations to induce investment and losses in excess of $1.27 billion. The plaintiffs are seeking disgorgement, compensatory, consequential, and general damages; disgorgement; rescission; restitution; punitive damages; and the establishment of a constructive trust. Any potential losses associated with this matter cannot be estimated at this time.

**Kinnie Ma Individual Retirement Account, et al., individually and on behalf of all others similarly situated, v. Ascendant Capital, LLC, et al. (W.D. Texas, Case No. 19-CV-01050)**

In October 2019, plaintiffs filed a putative class action in the United States District Court for the Western District of Texas against GPB, certain GPB-managed limited partnerships, including the Partnership, for which GPB is the General Partner, AAS, and Ascendant, as well as certain principals of the GPB-managed limited partnerships, auditors, broker-dealers, a fund administrator, and other individuals. The Complaint alleges violations and/or aiding and abetting violations of the Texas Securities Act, fraud, substantial assistance in the commission of fraud, breach of fiduciary duty, substantial assistance in breach of fiduciary duty, and negligence. Plaintiffs allege losses in excess of $1.8 billion and are seeking compensatory damages in an unspecified amount, rescission, fees and costs, and class certification. Any potential losses associated with this matter cannot be estimated at this time.

On June 1, 2022, the Western District of Texas Court consolidated this matter with Barasch v. GPB Capital, et al. (19-cv-01079); only the Kinnie Ma case continues, including the claims at issue in the Stanley S. and Millicent R Barasch Trust and Loretta Dehay (as described below), which were consolidated under the Kinnie Ma docket number. On June 23, 2022, the Court denied Defendants David Gentile and Jeffry Schneider's motion to stay the case pending the resolution of the criminal case, U.S. v. Gentile, et al., No. 1:21-CR-54-DG (E.D.N.Y. Jan. 29, 2021). Plaintiffs filed a Consolidated Complaint on July 1, 2022; defendants filed answers thereafter. As of the beginning of 2023, this case remains active and discovery is proceeding.

**Stanley S. and Millicent R. Barasch Trust and Loretta Dehay, individually and on behalf of others similar situated v. GPB Capital Holdings, LLC, et al. (W.D. Texas, Case No. 19 Civ. 01079)**

In November 2019, plaintiffs filed a putative class action in the United States District Court for the Western District of Texas against, the Partnership and other GPB-managed limited partnerships, AAS, and Ascendant, as well as certain principals of the GPB-managed funds, auditors, a fund administrator, and individuals. (The original Complaint named Millicent R. Barasch as the plaintiff, but since her death, her trust has successfully moved to substitute for all purposes in this litigation.) The Complaint alleges civil conspiracy, fraud, substantial assistance in the commission of fraud, breach of fiduciary duty, substantial assistance in the breach of fiduciary duty, negligence, violations of the Texas Securities Act, and aiding and abetting violations of the Texas Securities Act. Plaintiffs allege losses in excess of $1.8 billion and are seeking compensatory and other unspecified damages, declaratory relief, rescission, and costs and fees. Any potential losses associated with this matter cannot be estimated at this time.

On June 1, 2022, the Western District of Texas Court consolidated this matter into Kinnie Ma v. Ascendant Capital, LLC et al. (19-cv-01050). The claims at issue in this case continue under the Kinnie Ma docket number.

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**Concorde Investment Services, LLC v. GPB Capital Holdings, LLC, et al. (New York Supreme Court, New York County, Index No. 650928/2021)**

In February 2021, Concorde Investment Services, LLC filed suit in New York State Supreme Court, New York County against GPB, certain limited partnerships for which GPB is the General Partner, and others. The Complaint alleges breaches of contract, fraudulent inducement, negligence, interference with contract, interference with existing economic relations, interference with prospective economic advantage, indemnity, and declaratory relief, and includes a demand for arbitration. Plaintiff's demands include compensatory damages of at least $5.0 million, punitive damages, and a declaration that Concorde is contractually indemnified by the Defendants.

In October 2021, the Supreme court ordered the action be stayed so that the Plaintiffs could pursue claims in arbitration. By the same Order, the Court denied the Defendants' motions to dismiss the Complaint. Any potential losses associated with this action cannot be estimated at this time.

**Jeffry Schneider v. GPB Capital Holdings, LLC et al., Case No. 2021-0963 (Court of Chancery, DE)**

In November 2021, Plaintiff, a former affiliate of GPB Capital Holdings, LLC, filed a Complaint in Chancery Court in Delaware against GPB Capital Holdings, LLC and each of the funds it manages, including the Partnership, seeking a ruling that he is contractually entitled to mandatory advancement of legal fees by GPB Capital with respect to several lawsuits in which Plaintiff is named. On March 24, 2022, the Chancery Court issued a bench ruling, finding that Plaintiff was entitled to advancement of his legal fees from GPB Capital. Any potential losses associated with this action cannot be estimated at this time.

**David Gentile v. GPB Capital Holdings, LLC et al., Case No. 2021-1102-SG (Court of Chancery, DE)**

On or about December 20, 2021, Plaintiff David Gentile, founder and former Chief Executive Officer of GPB Capital Holdings, LLC, filed a Complaint in Chancery Court in Delaware against GPB Capital Holdings, LLC and each of the funds it manages, including the Partnership, seeking entry of an Order governing his contractual entitlement to advancement of legal fees by GPB Capital with respect to several lawsuits in which Plaintiff is named. On April 12, 2022, the Chancery Court entered the parties' Stipulation and Advancement Order governing Plaintiff's entitlement to advancement of attorneys' fees and expenses.Any potential losses associated with this action cannot be estimated at this time.

***Dealership Related Litigation***

**AMR Auto Holdings – SM, LLC d/b/a Prime Subaru Manchester v. Subaru of New England, Inc. (New Hampshire Motor Vehicle Industry Board, Case No. 2021-01)**

Prime Subaru Manchester has a franchise agreement ("Subaru Dealer Agreement") with Subaru of New England, Inc., the distributor of Subaru vehicles in New Hampshire ("SNE"), pursuant to which Prime Subaru Manchester owns and operates a Subaru dealership in Manchester, New Hampshire. On September 13, 2021, Prime Subaru Manchester notified SNE that it proposed to transfer substantially all of the assets of its dealership to Group 1, pursuant to the purchase agreement. To comply with the requirements of the Subaru Dealer Agreement and New Hampshire law, Prime Subaru Manchester asked for SNE's consent to the transfer to Group 1. SNE refused to approve the transfer to Group 1 (the "Turndown"). On December 10, 2021, Prime Subaru Manchester, as Protestor, filed a Protest action against SNE, as Respondent, with the New Hampshire Motor Vehicle Industry Board (the "NHMVIB") (Case No. 2021-01), claiming that the Turndown by SNE breached the Subaru Dealer Agreement and New Hampshire law, and seeking a finding and ruling from the NHMVIB, among others, that SNE unreasonably and in violation of law withheld its consent to the proposed transfer of the assets of Prime Subaru Manchester to Group 1, as well as awarding costs and attorney's fees to Prime Subaru Manchester.

After discovery by both sides, the NHMVIB held a final hearing on the Protest action on August 2, 2022. On August 10, 2022, the NHMVIB deliberated and a Final Order on Hearing was issued by the NHMVIB on August 12, 2022 in which it was ordered that Prime Subaru Manchester's Protest was granted because SNE unreasonably withheld consent of the sale of the dealership to Group 1 in violation of New Hampshire law, and SNE's claims were denied.

On or about September 1, 2022, SNE filed with the NHMVIB a Motion for Rehearing, asking the NHMVIB to reconsider its Final Order in favor of Prime Subaru Manchester. On September 12, 2022, Prime Subaru Manchester filed a Reply to SNE's Motion for Rehearing with the NHMVIB. On October 4, 2022, the NHMVIB deliberated and, on October 11, 2022, issued an Order denying SNE's

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Motion for Rehearing. On November 10, 2022, SNE filed an appeal with the Hillsborough Northern District Superior Court of New Hampshire, seeking to overturn the Final Order of the NHMVIB and to obtain an order that SNE's Turndown was in compliance with New Hampshire law. Prime Subaru Manchester intends to contest the appeal vigorously.

In the interim, pending the resolution of the appeal filed by SNE, the Partnership will continue to operate the dealership until the earlier of an ownership transfer or November 2023, twenty four months from the closing date, at which time, any cost associated with closing the dealership and liquidating the assets will be borne by Group 1. If a resolution of the Protest and completion of the sale of assets to Group 1 occurs prior to November 2023, the remaining estimated net cash inflows from the Prime Subaru Manchester operation will be reversed from the liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statements of Net Assets in Liquidation by a corresponding amount, however, any such reversals are not expected to have a material impact on the Partnership's Consolidated Financial Statements.

***Actions asserted by GPB***

**GPB Capital Holdings, LLC et al. v. Patrick Dibre (New York Supreme Court, Nassau County, Case No. 606417/2017)**

In July 2017, GPB, the Partnership, GPB Holdings I, LP, GPB Holdings Automotive, LLC, and GPB Portfolio Automotive, LLC filed suit in New York State Supreme Court, Nassau County against Patrick Dibre, one of their former operating partners, for breach of contract, breach of fiduciary duty, fraud and conversion arising out of the Defendant's sale of certain automobile dealerships to the GPB Plaintiffs. Mr. Dibre answered GPB's Complaint, and asserted counterclaims alleging breach of contract and unjust enrichment. Plaintiffs have since filed amended complaints, narrowing the prior claims to focus on certain specific provisions in the documents governing the sale of the dealerships at issue. The plaintiffs seek damages based on the value of the subject dealerships related to the alleged breach, and also seek an order of specific performance compelling Mr. Dibre to fulfill other obligations under the governing documents. Any potential losses associated with this matter cannot be estimated at this time.

Certain of these outstanding matters include speculative, substantial or indeterminate monetary amounts. We record a liability when we believe that it is probable a loss will be incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be estimated, we disclose the reasonably possible loss. We evaluate developments in our legal matters that could affect the amount of liability that has been previously accrued, if any, and the matters and related reasonably possible losses disclosed, and make adjustments as appropriate. Significant judgement is required to determine both the likelihood of there being and the estimated amount of a loss related to such matters. Under the liquidation basis of accounting pursuant to ASC 205-30, we continue to evaluate these legal matters and potential future losses in accordance with FASB ASC 450, Contingencies.

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**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on behalf by the undersigned, thereunto duly authorized.

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| | |
|:---|:---|
| GPB Automotive Portfolio, LP | GPB Automotive Portfolio, LP |
| (Registrant) | (Registrant) |
| By: | */s/ Rob Chmiel* |
|  | Robert Chmiel |
|  | Chief Executive Officer |
|  | (Principal Executive Officer) |
| By: | */s/ Evan Cutler* |
|  | Evan Cutler |
|  | Chief Financial Officer, Highline |
|  | Management, Inc. |
|  | (Principal Financial and Accounting Officer) |

---

Date: March 28, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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| | |
|:---|:---|
| GPB Capital Holdings, LLC as General Partner of the Partnership | GPB Capital Holdings, LLC as General Partner of the Partnership |
| By: | */s/ Rob Chmiel* |
|  | Robert Chmiel |
|  | Manager |

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## Exhibit 10.2

**Exhibit 10.2**

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| | |
|:---|:---|
| ![Graphic](tmb-20221231xex10d2001.jpg) | ![Graphic](tmb-20221231xex10d2002.jpg) |

---

**VARIABLE RATE DEMAND NOTE**

**(Auto Dealer – Floor Plan)**

---

| | |
|:---|:---|
| As of December 30, 2022 | &nbsp;&nbsp;$8750000.00 |

---

**BORROWER** (Name): AMR AUTO HOLDINGS – SM, LLC

(Organizational Structure): limited liability company

(State Law organized under): Delaware

(Address of residence/chief executive office): 205 John E. Devine Drive, Manchester, New Hampshire 03103

**BANK:** M&T BANK, a New York banking corporation with its principal banking office at One M&T Plaza, Buffalo, NY 14203. Attention: Office of General Counsel

**1.** **DEFINITIONS.** Each capitalized term shall have the meaning specified herein or in the Variable Rate Rider or Schedule respectively, and the following terms shall have the indicated meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **"Applicable Rate"** shall mean either the Variable Loan Rate or the Base Rate, or such other interest rate (if any) as may be provided for herein, as applicable from time to time in accordance with the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **"Approved Principal Amount"** shall mean Eight Million Seven Hundred Fifty Thousand and 00/100 Dollars ($8,750,000.00)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **"Approved Principal Amount Allocation"** shall mean the following amounts for each respective vehicle class **:** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>New Vehicles</u> **.** Up to $6,250,000.00 of the Approved Principal Amount may at any one time be borrowed to finance the purchase of New Vehicles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>Used Vehicles</u> **.** Up to $1,000,000.00 of the Approved Principal Amount may at any one time be borrowed to finance the purchase of Used Vehicles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) <u>Auction Vehicles</u>. Up to $750,000.00 of the Approved Principal Amount may at any one time be borrowed to finance the purchase of Auction Vehicles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) <u>Loaner or Service Vehicles</u>. Up to $750,000.00 of the Approved Principal Amount may at any one time be borrowed to finance the purchase of Loaner or Service Vehicles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** **"Authorized Person"** shall have the meaning ascribed to it in the Schedule. Mention of the Authorized Person's name is for reference purposes only and the Bank may rely on a person's title to ascertain whether someone is an Authorized Person who may act on behalf of the Borrower in connection herewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** **"Bank Affiliate"** as used in this Note shall mean any banking or lending affiliates of the Bank, any party acting as a participant lender in the credit arrangements contemplated herein, or any third party acting on the Bank's behalf.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**f.** **"Base Rate Loan"** shall mean a Loan which bears interest at the Base Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**g.** **"Draft"** shall have the meaning ascribed to it in the Loan Agreement (Floor Plan Financing), between the Borrower and Bank (as amended, restated, supplemented, or otherwise modified from time to time).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**h.** **"Draw Date"** shall mean, in relation to each Loan, the date that such Loan is made or deemed to be made to Borrower pursuant to this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**i.** **"Loan"** shall mean a loan made to Borrower by the Bank pursuant to this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**j.** **"New York Business Day"** shall mean any day other than Saturday, Sunday or other day on which commercial banking institutions in New York, New York are authorized or required by law or other governmental action to remain closed for business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**k.** **"Note"** shall mean this Variable Rate Demand Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**l.** **"Outstanding Principal Amount"** shall mean, at any point in time, the actual outstanding principal amount under this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**m.** **"Schedule"** shall mean that certain Schedule to this Note attached hereto and made a part hereof (including any replacements, amendments, modifications, extensions, renewals or substitutions thereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**n.** **"Variable Loan Rate"** shall mean, with respect to each Approved Principal Amount Allocation listed below, the rate per annum rate equal to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) **New Vehicles:** 

⌧ 1.87 percentage points above the greater of (a) the applicable Variable Loan Rate (as defined in the attached Variable Rate Rider), adjusting daily**,** or (b) 0% (the "Index Floor").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) **Used Vehicles**:

⌧ 1.87 percentage points above the greater of (a) the applicable Variable Loan Rate, adjusting daily **,** or (b) 0% (the "Index Floor").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) **Auction Vehicles**:

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⌧ 1.87 percentage points above the greater of (a) the applicable Variable Loan Rate, adjusting daily**,** or (b) 0% (the "Index Floor").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) **Loaner or Service Vehicles**:

⌧ 1.87 percentage points above the greater of (a) the applicable Variable Loan Rate, adjusting daily**,** or (b) **0**% (the "Index Floor").

If no rate is specified above, interest shall accrue at the Maximum Legal Rate (defined below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**o.** **"Variable Rate Loan"** shall mean a Loan that bears interest at the Variable Loan Rate.

&nbsp;&nbsp;&nbsp;&nbsp;**2.** **PAYMENT OF PRINCIPAL, INTEREST AND EXPENSES.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **Promise to Pay.** For value received, and intending to be legally bound, Borrower promises to pay to the order of the Bank, ON DEMAND, the Approved Principal Amount or the Outstanding Principal Amount, if less, plus any other sums in excess of the Approved Principal Amount the Bank advances on Borrower's behalf from time to time as a result of drafts drawn against Borrower's account maintained at the Bank, plus interest as set forth below and all reasonable documented out-of-pocket fees and costs (including without limitation the Bank's attorneys' fees and disbursements) the Bank incurs in order to administer, service or modify the credit facility evidenced by this Note, to collect any amount due under this Note, to negotiate or document a workout or restructuring, or to preserve its rights or realize upon any guaranty or other security for the payment of this Note ("**Expenses**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **Allocation.** The Borrower agrees to the allocations of the Approved Principal Amount that may at any one time be borrowed to finance the purchase of New Vehicles, Used Vehicles, Auction Vehicles and/or Loaner or Service Vehicles (as applicable) set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **Interest.** Each Loan shall earn interest on the Outstanding Principal Amount thereof calculated on the basis of a 360-day year for the actual number of days of each year (365 or 366) from and including the Draw Date to, but not including, the date all amounts hereunder are paid in full at a rate per annum that shall on each day be the Applicable Rate. Except as set forth herein, the Applicable Rate shall be the applicable Variable Loan Rate. When the Applicable Rate is the Base Rate, any change in the Base Rate resulting from a change in the Prime Rate shall be effective on the date of such change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**d.** **Maximum Legal Rate.** It is the intent of the Bank and Borrower that in no event shall interest be payable at a rate in excess of the maximum rate permitted by applicable law (the "**Maximum Legal Rate**"). Solely to the extent necessary to prevent interest under this Note from exceeding the Maximum Legal Rate, any amount that would be treated as excessive under a final judicial interpretation of applicable law shall be deemed to have been a mistake and automatically canceled, and, if received by the Bank, shall be refunded to Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**e.** **Payments; Late Charge; Default Rate.** Payments shall be made in immediately available United States funds at any banking office of the Bank. Absent demand for payment in full, Borrower shall pay all accrued and unpaid interest, in amounts that may vary, on the first Business Day of the month, or as otherwise invoiced by the Bank. If any payment is not received within ten days of its due date, Borrower shall pay a late charge equal to the greatest of (a) 5% of the delinquent amount, (b) the Bank's then current late charge as announced by the Bank from time to time, or (c) $50.00. In addition, if the Bank has not actually received any payment under this Note within thirty days after its due date, from and after such thirtieth day the interest rate for all amounts outstanding under this Note shall automatically increase to 5 percentage points above the higher of the Base Rate or the Variable Loan Rate (the "**Default Rate**"), and any judgment entered hereon or otherwise in connection with any suit to collect amounts due hereunder shall bear interest at such Default rate. Payments may be applied in any order in the sole discretion of the Bank, but prior to demand, shall be applied first to past due interest, Expenses, late charges, and principal payments, if any, which are past due, then to current interest and Expenses and late charges, and last to remaining principal. The Borrower hereby authorizes the Bank to charge any deposit account that the Borrower may maintain with the Bank for any payment required hereunder without prior notice to the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**f.** **Interest Accrual; Application of Payments.** Interest will continue to accrue on the Outstanding Principal Amount until the Outstanding Principal Amount is paid in full. In connection with any daily adjusting interest rate, payment invoices may reflect estimated interest accruals for a portion of each billing period (to facilitate timely distribution of invoices in advance of each payment date), followed by appropriate interest accrual adjustments reflected in the invoice for the succeeding billing period. All installment payments (excluding voluntary prepayments of principal) will be applied as of the date each payment is received and processed. Payments may be applied in any order in the sole discretion of the Bank, but, prior to demand for payment in full, may be applied chronologically (i.e., oldest invoice first) to unpaid amounts due and owing, in the following order: first to accrued interest, then to principal, then to late charges and other fees, and then to all other Expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**g.** **Increased Costs.** If the Bank shall determine that, due to either (a) the introduction of any change in (or in the interpretation of) any requirement of law or (b) compliance with any guideline or request from any central bank or other governmental or regulatory authority (whether or not having the force of law), there shall be any increase in the cost to the Bank of agreeing to make or making, funding or maintaining any loans hereunder, then Borrower shall be liable for, and shall from time to time, upon demand therefor by the Bank, pay to the Bank such additional amounts as are sufficient to compensate the Bank for such increased costs

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**h.** **Curtailments.** Borrower shall make such regular reductions in outstanding Loans with respect to any vehicle or vehicles (whether new, used, auction or otherwise) as set forth in the Schedule to this Note or as the Bank may otherwise specify from time to time, in its sole discretion. Notwithstanding the application of such curtailments, Borrower acknowledges and agrees that all amounts owing by Borrower pursuant to this Note shall be repayable upon demand.

&nbsp;&nbsp;&nbsp;&nbsp;**3.** **LOANS.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **General.** Except as otherwise provided herein, each Loan hereunder shall be in the form of Variable Rate Loan. The Bank may make any Loan in reliance upon any oral, telephonic, written, teletransmitted or other request (the "Request(s)") that the Bank in good faith believes to be valid and to have been made by Borrower or on behalf of Borrower by an Authorized Person. The Bank may act on the Request of any Authorized Person until the Bank shall have received from Borrower, and had a reasonable time to act on, written notice revoking the authority of such Authorized Person.

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The Bank shall incur no liability to Borrower or to any other person as a direct or indirect result of making any Loan pursuant to this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **Request for Loans.** In making any Request for a Loan, Borrower shall specify the aggregate amount of such Loan and the Draw Date; provided, however, if a Request is received by the Bank after 2:00 p.m. (Eastern Standard Time) on any given day, the earliest possible Draw Date will be the next New York Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**c.** **Delivery of Requests and Notices.** Delivery of a Request for a Variable Rate Loan shall be made to the Bank at the address set forth in the Section 13 of this Note, or such other address designated by the Bank from time to time.

**4.** **CONVERSION UPON DEFAULT.** Unless the Bank shall otherwise consent in writing, if (i) Borrower fails to pay when due, in whole or in part, the indebtedness under the Note (whether by demand or otherwise), or (ii) there exists a condition or event which, with the passage of time, the giving of notice or both, shall constitute an event of default under any of Borrower's agreements with the Bank, if any, the Bank, in its sole discretion, may convert any Variable Rate Loan to a Base Rate Loan. Nothing herein shall be construed to be a waiver by the Bank to have any Loan accrue interest at the Default Rate of interest (which shall be calculated from the higher of the Variable Loan Rate or the Base Rate, as described above).

**5.** **SETOFF.** The Bank shall have the right to set off against the amounts owing under this Note any property of Borrower or any guarantor or endorser of this Note held in a deposit or other account with the Bank or any of its affiliates, whether for safekeeping or otherwise, or otherwise owing by the Bank or any of its affiliates in any capacity to Borrower or any guarantor or endorser of this Note. Such set-off shall be deemed to have been exercised immediately at the time the Bank or such affiliate elects to do so. The Borrower and each endorser and guarantor hereof grant to the Bank a continuing lien on and security interest in any and all deposits or other sums at any time credited by or due from the Bank or any Bank Affiliate (as hereinafter defined) to the Borrower and/or each endorser or guarantor hereof and any cash, securities, instruments or other property of the Borrower and each endorser and guarantor hereof in the possession of the Bank or any Bank Affiliate, whether for safekeeping or otherwise, or in transit to or from the Bank or any Bank Affiliate (regardless of the reason the Bank or Bank Affiliate had received the same or whether the Bank or Bank Affiliate has conditionally released the same) as security for the full and punctual payment and performance of all of the liabilities and obligations of the Borrower and/or any endorser or guarantor hereof to the Bank or any Bank Affiliate and such deposits and other sums may be applied or set off against such liabilities and obligations of the Borrower or any endorser or guarantor hereof to the Bank or any Bank Affiliate at any time, whether or not such are then due, whether or not demand has been made and whether or not other collateral is then available to the Bank or any Bank Affiliate.

**6.** **ADVANCES; AUTHORIZED REPRESENTATIVES.** This Note is issued by Borrower to the Bank in connection with a certain line of credit or loan limit made available by the Bank to Borrower (the "**Credit**"). The Bank may make any Loan or advance pursuant to the Credit including the advancing of any funds advanced by the Bank on Borrower's behalf or to Borrower as a result of a Draft in reliance upon any oral, telephonic, written, teletransmitted or other request (the "**Request(s)**") that the Bank in good faith believes to be valid and to have been made by Borrower or in the name of or on behalf of Borrower by an Authorized Person. Notwithstanding that individual names may have been provided to the Bank, the Bank shall be permitted at any time to rely solely on the title of an individual to ascertain whether that individual is an Authorized Person. The Bank may act on the Request of any Authorized Person until the Bank shall have received from Borrower, and had a reasonable time to act on, written notice revoking the authority of such Authorized Person. Borrower acknowledges that the transmission between Borrower and Bank of any Request or other instructions with respect to the Credit involves the possibility of errors, omissions, misinterpretations, fraud and mistakes, and agrees to adopt such internal measures and operational procedures as may be necessary to prevent such occurrences. By reason thereof, Borrower hereby assumes all risk of loss and responsibility for, and releases and discharges the Bank from any and all responsibility or liability for, and agrees to indemnify, reimburse on demand and hold Bank harmless from, any and all claims, actions, damages, losses, liability and expenses by reason of, arising out of, or in any way connected with or related to: (i) Bank's accepting, relying on and acting upon any Request or other instructions with respect to the Credit; or (ii) any such error, omission, misinterpretation, fraud or mistake, provided such error, omission, misinterpretation, fraud or mistake is not directly caused by the Bank's gross negligence or willful misconduct. The Bank shall incur no liability to Borrower or to any other person as a direct or indirect result of making any Loan pursuant to this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;**7.** **DEMAND, DISCRETIONARY FACILITY.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**a.** **Discretionary Facility.** The Bank shall have the sole and absolute discretion whether to make any Loan (or any portion of any Loan) requested by borrower regardless of any general availability under the Approved Principal Amount. The Bank may modify, restrict, suspend or terminate the credit under this Note at any time for any reason and without affecting Borrower's then existing obligation under this Note. Any Request for a Loan hereunder shall be limited in amount, such that the sum of (i) the principal amount of such Request; (ii) the Outstanding Principal Amount under this Note; and (iii) the aggregate face amounts of (or, if greater, Borrower's aggregate reimbursement obligations to the Bank (or any of its affiliates) in connection with) any letters of credit issued by the Bank (or any of its affiliates) at the request (or for the benefit of) Borrower, pursuant to this credit; does not exceed the Approved Principal Amount under this Note. Notwithstanding the above, the Bank shall have the sole and absolute discretion whether to make any Loan (or any portion of any Loan) requested by Borrower, regardless of any general availability under the Approved Principal Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**b.** **Demand Facility.** This Note is payable on demand, and all amounts hereunder shall become immediately due and payable upon demand by the Bank; provided, however, that the Outstanding Principal Amount of this Note and all accrued and unpaid interest shall automatically become immediately due and payable upon the occurrence of a Bankruptcy Event with regard to Borrower or any guarantor or endorser of this Note. Borrower hereby waives protest, presentment and notice of any kind in connection with this Note.

**8.** **BANK RECORDS CONCLUSIVE.** The Bank shall set forth on a schedule maintained on its computer the date and original principal amount of each Loan and the date and amount of each payment to be applied to the Outstanding Principal Amount of this Note. The Outstanding Principal Amount set forth on any such schedule shall be presumptive evidence of the Outstanding Principal Amount of this Note and of all Loans. No failure by the Bank to make, and no error by the Bank in making, any annotation on any such schedule shall affect the Borrower's obligation to pay the principal and interest of each Loan or any other obligation of Borrower to the Bank pursuant to this Note.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**9.** **PURPOSE.** Borrower certifies (a) that no Loan will be used to purchase or carry margin stock except with the Bank's express prior written consent for each such purchase and (b) that all Loans shall be used for a business purpose, and not for any personal, family or household purpose.

**10.** **AUTHORIZATION.** Borrower, if a corporation, partnership, limited liability company, trust or other entity, represents that it is duly organized and in good standing or duly constituted in the state of its organization and is duly authorized to do business in all jurisdictions material to the conduct of its business; that the execution, delivery and performance of this Note have been duly authorized by all necessary regulatory and corporate or partnership action or by its governing instrument; that this Note has been duly executed by an authorized officer, partner or trustee and constitutes a valid and binding obligation enforceable against Borrower and not in violation of any law, court order or agreement by which Borrower is bound; and that Borrower's performance is not threatened by any pending or threatened litigation.

**11.** **USA PATRIOT ACT NOTICE.** Bank hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act ("Patriot Act"), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow Bank to identify the Borrower in accordance with the Patriot Act. The Borrower agrees to, promptly following a request by Bank, provide all such other documentation and information that Bank requests in order to comply with its ongoing obligations under applicable "know your customer" and anti-money laundering rules and regulations, including the Patriot Act.

**12.** **MISCELLANEOUS.** This Note, together with any related loan and security agreements and guaranties, contains the entire agreement between the Bank and Borrower with respect to the Note, and supersedes every course of dealing, other conduct, oral agreement and representation previously made by the Bank. All rights and remedies of the Bank under applicable law and this Note or amendment of any provision of this Note are cumulative and not exclusive. No single, partial or delayed exercise by the Bank of any right or remedy shall preclude the subsequent exercise by the Bank at any time of any right or remedy of the Bank without notice. No waiver or amendment of any provision of this Note shall be effective unless made specifically in writing by the Bank. No course of dealing or other conduct, no oral agreement or representation made by the Bank, and no usage of trade, shall operate as a waiver of any right or remedy of the Bank. No waiver of any right or remedy of the Bank shall be effective unless made specifically in writing by the Bank. Borrower agrees that in any legal proceeding, a copy of this Note kept in the Bank's course of business may be admitted into evidence as an original. This Note is a binding obligation enforceable against Borrower and its successors and assigns and shall inure to the benefit of the Bank and its successors and assigns. If a court deems any provision of this Note invalid, the remainder of the Note shall remain in effect. Section headings are for convenience only. Singular number includes plural and neuter gender includes masculine and feminine as appropriate.

**13.** **NOTICES.** Any demand or notice hereunder or under any applicable law pertaining hereto shall be in writing and duly given if delivered to Borrower (at its address on the Bank's records) or to the Bank (at the address on page one) and separately to the Bank officer responsible for Borrower's relationship with the Bank as stated in the Schedule to this Note). Such notice or demand shall be deemed sufficiently given for all purposes when delivered (i) by personal delivery and shall be deemed effective when delivered, or (ii) by mail or courier and shall be deemed effective three (3) New York Business Days after deposit in an official depository maintained by the United States Post Office for the collection of mail or one (1) New York Business Day after delivery to a nationally recognized overnight courier service (*e.g.,* Federal Express). Notice by e-mail is not valid notice under this or any other agreement between Borrower and the Bank.

**14.** **JOINT AND SEVERAL.** If there is more than one Borrower, each of them shall be jointly and severally liable for all amounts which become due under this Note and the term "Borrower" shall include each as well as all of them, provided, however, the release by the Bank of the Borrower or any one or more endorsers or guarantors shall not release any other person obligated on account of this Note. Any and all present and future debts of the Borrower to any endorser or guarantor of this Note are subordinated to the full payment and performance of all present and future debts and obligations of the Borrower to the Bank. Each reference in this Note to the Borrower, any endorser, and any guarantor, is to such person individually and also to all such persons jointly. No person obligated on account of this Note may seek contribution from any other person also obligated, unless and until all liabilities, obligations and indebtedness to the Bank of the person from whom contribution is sought have been irrevocably satisfied in full. The release or compromise by the Bank of any collateral shall not release any person obligated on account of this Note.

The Borrower and each endorser and guarantor of this Note shall indemnify, defend and hold the Bank and the Bank Affiliates and their directors, officers, employees, agents and attorneys (each an "**Indemnitee**") harmless against any claim brought or threatened against any Indemnitee by the Borrower, by any endorser or guarantor, or by any other person (as well as from attorneys' reasonable fees and expenses in connection therewith) on account of the Bank's relationship with the Borrower or any endorser or guarantor hereof (each of which may be defended, compromised, settled or pursued by the Bank with counsel of the Bank's selection, but at the expense of the Borrower and any endorser and/or guarantor), except for any claim arising out of the gross negligence or willful misconduct of the Bank.

**15.** **GOVERNING LAW; JURISDICTION.** This Note has been delivered to and accepted by the Bank and will be deemed to be made in the State of New York. Except as provided under federal law, this Note will be interpreted in accordance with the laws of the State of New York excluding its conflict of laws rules. **BORROWER HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK IN A COUNTY OR JUDICIAL DISTRICT WHERE THE BANK MAINTAINS A BRANCH, AND CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT BORROWER'S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS NOTE WILL PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST BORROWER INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION.** Borrower acknowledges and agrees that the venue provided above is the most convenient forum for both the Bank and Borrower. Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Note.

**16.** **WAIVER OF JURY TRIAL. BORROWER AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY BORROWER AND THE BANK MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS NOTE OR THE TRANSACTIONS RELATED HERETO. BORROWER REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. BORROWER**

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**ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO THIS NOTE BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.**

**Preauthorized Transfers from Deposit Account.** If a deposit account number is provided in the following blank Borrower hereby authorizes the Bank to debit available funds in Borrower's deposit account # with the Bank automatically for any amount which becomes due under this Note or as directed by an Authorized Person, by telephone.

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**VARIABLE RATE RIDER**

**(1-Month Term SOFR, Adjusting Daily)**

Borrower: AMR Auto Holdings – SM, LLC

Promissory Note Original/Maximum Principal Amount: $8,750,000.00

Promissory Note Date: As of December 30, 2022

**DEFINITIONS.** The above-referenced Promissory Note is referred to herein as the "Note" and all references to the "Note" shall be deemed to include the Note and this Rider. As used in the Note and this Rider, each capitalized term shall have the meaning specified in the Note, and the following terms shall have the indicated meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. **"Base Rate"** shall mean the rate per annum equal to the greater of (i) two (2) percentage points above the rate of interest announced by the Bank each day as its prime rate of interest ("Prime Rate"), or (ii) 3.25% (the "Base Rate Floor").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. **"Business Day"** shall mean any day other than Saturday, Sunday or other day on which commercial banking institutions in New York, New York are authorized or required by law or other governmental action to remain closed for business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. **"CME"** shall mean CME Group Benchmark Administration Ltd.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. **"Interest Period"** shall mean, as to any SOFR Loan, the applicable period of time (**one day**, subject to the following terms) during which a particular setting of the SOFR Loan Rate remains in effect, with the first such Interest Period commencing on the date of this Note (or, as applicable, the date of the first advance of any SOFR Loan hereunder) and extending to but not including the next succeeding Rate Adjustment Date, with such Rate Adjustment Date and each Rate Adjustment Date thereafter constituting the beginning of each succeeding Interest Period; provided, however, that if a Rate Adjustment Date would fall on a day that is not a U.S. Government Securities Business Day, such Rate Adjustment Date (and the Interest Period extending to but not including such Rate Adjustment Date) shall be extended to the next succeeding U.S. Government Securities Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. **"Rate Adjustment Date"** shall mean each U.S. Government Securities Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. **"SOFR"** shall mean, with respect to any U.S. Government Securities Business Day, a rate per annum equal to the secured overnight financing rate for such U.S. Government Securities Business Day as published by the SOFR Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. "**SOFR Administrator**" shall mean the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. **"SOFR Loan"** shall mean any loan or other advance of funds made to the Borrower by the Bank pursuant to the Note that accrues interest at the SOFR Loan Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. **"SOFR Loan Rate"** shall mean, for the duration of any Interest Period with respect to a SOFR Loan, the rate per annum (rounded upward to the nearest 1/16 of 1%) equal to Term SOFR published each U.S. Government Securities Business Day . Notwithstanding the foregoing, if, as of 5:00 p.m. (ET) on any U.S. Government Securities Business Day, Term SOFR has not been published, then the rate used will be such Term SOFR as published for the first preceding U.S. Government Securities Business Day so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Rate Determination Date. Notwithstanding any provision above, the practice of rounding to determine the SOFR Loan Rate may be discontinued at any time in the Bank's sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j. **"Term SOFR"** shall mean the **1-Month** CME SOFR Term Reference Rate administered by CME (or any successor forward- looking term rate derived from SOFR published by any successor administrator thereof, as may be recommended by the Federal Reserve Bank of New York) and published on the applicable commercially available screen page as may be designated by the Bank from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k. **"Term SOFR Conforming Changes"** means, with respect to the use or administration of Term SOFR, any technical, administrative or operational changes (including, without limitation, changes to the definitions of "Business Day," "U.S. Government Securities Business Day," or "Interest Period," timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions and other technical, administrative or operational matters) that the Bank decides may be appropriate to reflect the adoption and implementation of Term SOFR and to permit the administration thereof by the Bank in a manner substantially consistent with market practice (or, if the Bank decides that adoption of any portion of such market practice is not administratively feasible or if the Bank determines that no market practice for the administration of Term SOFR exists, in such other manner of administration as the Bank decides is reasonably necessary in connection with the administration of the loan evidenced hereby).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l. **"U.S. Government Securities Business Day"** shall mean any day other than Saturday, Sunday or other day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed

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for the entire day for purposes of trading in United States government securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m. **"Variable Loan Rate"** shall mean the SOFR Loan Rate.

**ADDITIONAL PROVISIONS.**

**Timing of Requests for Advances.** In addition to and without compromising any additional requirements referenced in the Note, to the extent future advances are contemplated in the Note, the Bank reserves the right to require that any Borrower request for an advance must be delivered to the Bank at least three (3) U.S. Government Securities Business Days prior to the requested date of funding the advance.

**Modification to Payment Due Date.** Notwithstanding any provision to the contrary in the Note, if in any particular month the applicable payment due date is not a Business Day, the payment due date shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such payment due date shall be the immediately preceding Business Day.

**Term SOFR Conforming Changes**. In connection with the use or administration of Term SOFR, the Bank will have the right to make Term SOFR Conforming Changes from time to time and, notwithstanding anything to the contrary herein, any amendments implementing such Term SOFR Conforming Changes will become effective without any further action or consent of the Borrower or any other party hereto. The Bank will promptly notify the Borrower of the effectiveness of any Term SOFR Conforming Changes.

**Disclosure Regarding Term SOFR.** Borrower acknowledges and understands that (i) Term SOFR is established, administered and regulated by third parties, and its continuing existence and ongoing viability as a source and basis for establishing contractual interest rates is entirely outside the control of the Bank, (ii) Term SOFR is a derivative of SOFR, based on expectations derived from the derivatives markets and dependent upon derivatives market liquidity, (iii) certain industry groups have advised that Term SOFR is not recommended for all financing facilities, and (iv), the Bank does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to Term SOFR, or any component definition thereof or rates referenced in the definition thereof, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement) or (b) the effect, implementation or composition of any Term SOFR Conforming Changes. Notwithstanding the above, Borrower has knowingly and voluntarily requested and/or accepted utilization of Term SOFR for all purposes provided for herein, accepting any inherent risks associated with such utilization, and hereby waives any claims or defenses against the Bank in connection therewith.

**Prepayment; Breakage Fee.** If (i) Borrower pays the principal balance, in whole or in part, on any SOFR Loan, on any day other than on Rate Adjustment Date (including as a result of an event of default), (ii) the SOFR Loan Rate is converted to the Base Rate on any day other than a Rate Adjustment Date; or (iii) to the extent applicable, Borrower fails to draw down or accept an advance, in whole or in part, of a SOFR Loan after giving a request therefor or otherwise tries to revoke any SOFR Loan, in whole or in part, then Borrower shall be liable for and shall pay the Bank, on demand, the higher of $250.00 or the actual amount of the liabilities, expenses, costs or funding losses that are a direct or indirect result of such prepayment or other condition described above, whether such liability, expense, cost or loss is by reason of (a) any reduction in yield, by reason of the liquidation or reemployment of any deposit or other funds acquired by the Bank, (b) the fixing of the interest rate payable on any SOFR Loans, or (c) otherwise (collectively, the "Breakage Fee"). The determination by the Bank of the foregoing amount shall, in the absence of manifest error, be conclusive and binding upon Borrower.

**Conversion to Base Rate Upon Default.** Unless the Bank shall otherwise and in its sole discretion consent in writing, if (i) an event of default (with respect to any payment obligation or otherwise, as may be defined or described in the Note or related documents) has occurred and is continuing, or (ii) there exists a condition or event that, with the passage of time, the giving of notice, or both, shall constitute such an event of default, the Bank, in its sole discretion, may convert the applicable interest rate to the Base Rate, and each reference in the Note and herein to the applicable interest rate shall be deemed to be a reference to the Base Rate. Nothing herein shall be construed to be a waiver by the Bank of its right to have the outstanding principal balance accrue interest at the Default Rate, accelerate the indebtedness and/or exercise any other remedies available to the Bank under the terms hereof or applicable law.

**Repayment Upon Conversion to Base Rate.** Except as otherwise provided herein, during the time of any conversion of the applicable interest rate to the Base Rate, whether temporary or permanent, and whether pursuant to an event of default or otherwise, and without compromising any other rights and remedies of the Bank, and in the absence of the Bank exercising any such other rights or remedies as may be applicable, Borrower shall continue to repay all indebtedness in accordance with the terms of the Note. The determination by the Bank of the foregoing amounts shall, in the absence of manifest error, be conclusive and binding upon Borrower.

**Illegality.** If the Bank shall determine that the introduction of any law (statutory or common), treaty, rule, regulation, guideline or determination of an arbitrator or of a governmental authority or in the interpretation or administration thereof, has made it unlawful, or that any central bank or other governmental or regulatory authority has asserted that it is unlawful or otherwise impermissible for the Bank to make or maintain loans using the then-current applicable interest rate index, then, on notice thereof by the Bank to Borrower, the Bank may (i) suspend the maintaining of the loan hereunder using the then-current applicable interest rate index until the Bank shall have notified Borrower that the circumstances giving rise to such determination shall no longer exist, and/or (ii) convert the applicable interest rate for the loan hereunder to the Base Rate, subject to the terms of the section below entitled "Inability to Determine Term SOFR; Effect of

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Benchmark Transition Event".

**Inability to Determine Term SOFR; Effect of Benchmark Transition Event.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If the Bank shall determine (which determination shall be conclusive and binding on Borrower) that for any reason the SOFR Loan Rate cannot be determined, other than as a result of a Benchmark Transition Event, the Bank will give notice of such determination to Borrower. Thereafter, the Bank may not make or maintain the loan hereunder using the SOFR Loan Rate until the Bank revokes such notice in writing, and until such revocation, the Bank may convert the applicable interest rate to the Base Rate, subject to the provisions below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Benchmark Replacement. Notwithstanding anything to the contrary herein or in the Note or any related agreement, upon the occurrence of a Benchmark Transition Event and its related Benchmark Replacement Date prior to any setting of the then-current Benchmark, (x) if a Benchmark Replacement is determined in accordance with clause (1) of the definition of "Benchmark Replacement" for such Benchmark Replacement Date in connection with a Benchmark Transition Event, such Benchmark Replacement will replace such Benchmark for all purposes hereunder in respect of such Benchmark setting and subsequent Benchmark settings without any amendment or further action or consent of any other party hereto, and (y) if a Benchmark Replacement is determined in accordance with clause (2) of the definition of "Benchmark Replacement" for such Benchmark Replacement Date, the Bank may unilaterally amend the terms of the Note to replace the then-current Benchmark with a Benchmark Replacement, with any such amendment to become effective as soon as practicable for the Bank and upon notice to the Borrower, without any further action or consent of the Borrower. No replacement of the then-current Benchmark with a Benchmark Replacement pursuant to clause (y) above will occur prior to the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 180th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 180 days after such statement or publication, the date of such statement or publication). Borrower shall pay all out-of-pocket costs (including reasonable attorneys' fees) incurred by the Bank in connection with any negotiation, documentation or enforcement of the terms hereof or any related matters contemplated in this Section titled "Inability to Determine Term SOFR; Effect of Benchmark Transition Event" ("this Section").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Benchmark Replacement Conforming Changes. In connection with the implementation or administration of a Benchmark Replacement, the Bank will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary in the Note or in any related document or agreement, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of the Borrower or any other party hereto. The Bank shall not be liable to the Borrower for any Benchmark Replacement Conforming Changes made by the Bank in good faith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notices; Standards for Decisions and Determinations. The Bank will provide notification to the Borrower (which may at the Bank's discretion be electronic, part of a billing statement, a general notice to customers or other communication) of the implementation of any Benchmark Replacement and the effectiveness of any Benchmark Replacement Conforming Changes, within a reasonable time prior to such implementation and effectiveness, as applicable. Any determination, decision or election that may be made by the Bank pursuant to this Section, including, without limitation, any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding upon the Borrower and any other parties hereto absent manifest error and may be made in the Bank's sole discretion and without consent from the Borrower or any other party hereto, except, in each case, as expressly required pursuant to this Section, and shall not be the basis of any claim of liability of any kind or nature against the Bank by any party hereto, all such claims being hereby waived individually by each party hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Benchmark Unavailability Period. Upon the Borrower's receipt of notice of the commencement of a Benchmark Unavailability Period and until a Benchmark Replacement is determined in accordance with this Section, the Borrower may revoke (as applicable) any pending request for an advance/borrowing of, conversion to, or continuation of a loan based on the SOFR Loan Rate (or the then-current Benchmark) to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request (as applicable) into a request for an advance/borrowing of or conversion to a loan that shall accrue interest at the Base Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Bank does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to the Benchmark, any component definition thereof or rates referenced in the definition thereof or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Benchmark or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Benchmark Replacement Conforming Changes. The Bank may select information sources or services in its reasonable discretion to ascertain the Benchmark, in each case pursuant to the terms hereof, and shall have no liability to the Borrower or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Certain Defined Terms. As used in this Section:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. "Benchmark" means the SOFR Loan Rate or any subsequent Benchmark Replacement that has become effective hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. "Benchmark Replacement" means the first alternative set forth in the order below that is applicable and can be determined by the Bank for the applicable Benchmark Replacement Date:

1) The sum of (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;

2) The sum of: (a) the alternate benchmark rate that has been selected by the Bank giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the then-current Benchmark for U.S. dollar-denominated syndicated or bilateral credit facilities and (b) the related Benchmark Replacement Adjustment;

provided that, if the Benchmark Replacement as so determined would be less than the current benchmark rate floor with respect to the SOFR Loan Rate (if any, the "Floor"), the Benchmark Replacement will be deemed to be such Floor for the purposes hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. "Benchmark Replacement Adjustment" means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Bank giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such then-current Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such then-current Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated or bilateral credit facilities at such time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. "Benchmark Replacement Conforming Changes" means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including, without limitation, changes to the definitions of "Business Day," "U.S. Government Securities Business Day," or "Interest Period," timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions and other technical, administrative or operational matters) that the Bank decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Bank in a manner substantially consistent with market practice (or, if the Bank decides that adoption of any portion of such market practice is not administratively feasible or if the Bank determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Bank decides is reasonably necessary in connection with the administration of the loan evidenced hereby).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. "Benchmark Replacement Date" means the earlier to occur of the following events with respect to the then-current Benchmark:

1) in the case of clause (a) of the definition of "Benchmark Transition Event," the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of the Benchmark permanently or indefinitely ceases to provide the Benchmark; or

2) in the case of clause (b) of the definition of "Benchmark Transition Event," the later of (i) the date of the public statement or publication of information referenced therein and (ii) the announced or stated date as of which all applicable tenors of such Benchmark will no longer be representative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. "Benchmark Transition Event" means, with respect to any then-current Benchmark, the occurrence of a public statement or publication of information by or on behalf of the administrator of the then-current Benchmark, the regulatory supervisor for the administrator of such Benchmark, the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark, a resolution authority with jurisdiction over the administrator for such Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark, announcing or stating that (a) such administrator has ceased, or will cease on a specified date, to provide such Benchmark (or all tenors of such Benchmark applicable to the loan evidenced hereby), permanently or indefinitely, <u>provided</u> that, at the time of such statement or publication, there is no successor administrator that will continue to provide any applicable tenors of such Benchmark or (b) all applicable tenors of such Benchmark are or as of a specified date will no longer be representative of the underlying market and economic reality that such Benchmark is intended to measure and indicating that representativeness will not be restored.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. "Benchmark Unavailability Period" means the period (if any) (x) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder in accordance with this Section and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder in accordance with this Section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. "Daily Simple SOFR" shall mean for any day (a "SOFR Rate Day"), a rate per annum equal to SOFR for the day (such day "*i*") that is five (5) U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day, or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in

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each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator's Website. If by 5:00 pm (ET) on the second (2<sup>nd</sup>) U.S. Government Securities Business Day immediately following any day "*i*", the SOFR in respect of such day "*i*" has not been published on the SOFR Administrator's Website (and a Benchmark Replacement Date with respect to the Daily Simple SOFR has not occurred), then the SOFR for such day "*i*" will be the SOFR as published in respect of the first preceding U.S. Government Securities Business Day for which such SOFR was published on the SOFR Administrator's Website; <u>provided</u> that any SOFR determined pursuant to this sentence shall be utilized for purposes of calculation of Daily Simple SOFR for no more than three (3) consecutive SOFR Rate Days. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. "Relevant Governmental Body" means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York or any successor thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. "SOFR Administrator's Website" shall mean the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. "SOFR Rate Day" shall have the meaning specified in the definition of Daily Simple SOFR.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. "Unadjusted Benchmark Replacement" means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.

**Acknowledgment.** Borrower acknowledges that it has read and understands all the provisions of this Rider and has been advised by counsel as necessary or appropriate.

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**Schedule**

**To Variable Rate Demand Note**

**(Auto Dealer – Floor Plan)**

Borrower:AMR Auto Holdings – SM, LLC

Bank: M&T Bank

Schedule Date: As of December 30, 2022.

This Schedule to Variable Rate Demand Note (Auto Dealer – Floor Plan) (this "Schedule") is executed and delivered by the Borrower and the Bank in connection with, and is incorporated into and made a part of, that certain Variable Rate Demand Note (Auto Dealer – Floor Plan), dated as of December 30, 2022, together with any amendment, modification or replacement thereof (collectively, the "Note"). This Schedule defines certain terms used in the Note and adds other terms and conditions to the Loan evidenced by the Note. To the extent any provision in this Schedule may be inconsistent with any provisions in the Note, the provisions of this Schedule shall control.

**Definitions.** As used in this Schedule, each capitalized term shall have the meaning specified in that certain Loan Agreement (Floor Plan Financing) dated on or about December 30, 2022 and/or the Note, except as otherwise defined herein.

**Advances:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Advances for New Vehicles: 100% of invoice from the Manufacturer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Advances for Used Vehicles: 80% of NADA wholesale value.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Advances for Auction Vehicles: 100% of auction price plus applicable fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Advances for Loaner or Service Vehicles: 100% of auction price plus applicable fees (if Auction) or 80% of NADA wholesale value (if Used).

**Allowable Age of Vehicles:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Used Vehicles: five (5) model years old and newer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Auction Vehicles: five (5) model years old and newer.

**"Authorized Person"** shall mean, individually, Kevin Westfall, as Manager.

**Fees:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Audit fees: $0 charged to the Borrower for the first Bank audit each month; $450 charged to the Borrower for any subsequent Bank audit within each month. Audit is for Bank use only and may not be relied upon by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Late charges and late charge-related fees: As set forth in the Note

**Curtailments:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) New Vehicles: 5% monthly after twelve (12) months on floor plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Used Vehicles: 5% monthly after ninety (90) days on floor plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Auction Vehicles: 5% monthly after ninety (90) days on floor plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Loaner of Service Vehicles: %5 monthly after ninety (90) days on floor plan.

**Notice Address of Bank Loan Officer under "Notices" Section of the Note:**

M&T Bank

24 Albion Road, Suite 240

Lincoln, Rhode Island 02865

Attn.: John E. Brissette, Senior Vice President

**Manufacturer(s).** Reference to Manufacturer shall mean the following manufacturer of motor vehicles including all divisions and affiliates of such manufacturer: **Subaru**

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If more than one Manufacturer is listed, the term "Manufacturer" shall mean collectively all of the listed Manufacturers.

**Tax ID # of Borrower:** 35-2604501

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**LOAN AGREEMENT**

**(Floor Plan Financing)**

Date: As of December 30, 2022

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|:---|:---|
| **Borrower:** | AMR Auto Holdings – SM, LLC, a Delaware corporation with its principal place of business located at 205 John E. Devine Drive, Manchester, New Hampshire 03103. |

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| **Bank:** | M&T Bank, a New York state chartered bank, with an address of One M&T Plaza (Attn: Legal Department), Buffalo, New York 14203 |

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WHEREAS, the Borrower wishes to enter into a floor plan arrangement with the Bank for the financing of the Borrower's acquisition of vehicles. In connection with such floor plan arrangement, the Borrower has executed and delivered to the Bank a Variable Rate Demand Note (Auto Dealer – Floor Plan) as identified below; and

WHEREAS, the Borrower and the Bank wish to enter into this Loan Agreement (this "Agreement") to set forth certain terms and conditions with regard to the financial accommodations the Bank is extending to the Borrower.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Bank and the Borrower hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** **Definitions**.

Unless defined herein otherwise, all capitalized terms shall have the same meanings as set forth in the Note. In addition, the following terms shall have the indicated meanings:

*"Account Pledge Agreement"* shall mean the Pledge and Assignment of Deposit Account executed and delivered by the Automile Holdings, LLC to the Bank dated on or about the date hereof, as it may be amended, modified or replaced from time to time.

*"Action"* shall have the meaning ascribed to it in Section 10 of this Agreement.

*"Affiliate"* shall have the meaning ascribed to it in the Note.

*"Agreement"* shall have the meaning ascribed to it in the preamble to this Agreement. *"Allocation"* shall have the meaning ascribed to it in Section 2.2 of this Agreement. *"Approval"* shall have the meaning ascribed to it in Section 10 of this Agreement. "*Approved Principal Amount*" shall have the meaning ascribed to it in the Note.

*"Auction Vehicle(s)"* shall mean motor vehicles purchased by Borrower from an auto auction which are not older than the number of years set forth in the Schedule.

*"Auction Vehicle Allocation*" shall mean the amount of the Approved Principal Amount allocated to finance Auction Vehicles as set forth in the Note. If no portion of the Credit is allocated to Auction Vehicles or there is no stated amount for Auction Vehicles allocation in the Note, the Auction Vehicle Allocation shall be zero.

*"Credit"* shall have the meaning ascribed to it in the Note*.*

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"*Collateral*" shall have the meaning set forth in the Security Agreement and the Account Pledge Agreement and shall include in any event, without limitation, any vehicle inventory.

*"Collateral Account"* shall have the meaning ascribed to it in Section 12 of this Agreement.

*"Draft"* shall mean drafts by the Manufacturer drawn against the Borrower's line of credit or loan limit made available by the Bank to Borrower.

"*ERISA*" shall have the meaning ascribed to it in Section 11(l) of this Agreement.

*"Floor Plan Interest Reduction Balance"* shall have the meaning ascribed to it in Section 2.6 of this Agreement.

*"Floor Plan Interest Reduction"* shall have the meaning ascribed to it in Section 2.6 of this Agreement.

"*G.A.A.P*." shall mean, with respect to any date of determination, generally accepted accounting principles as used by the Financial Accounting Standards Board and/or the American Institute of Certified Public Accountants consistently applied and maintained throughout the periods indicated.

"*Governing Documents*" shall have the meaning ascribed to it in Section 10 of this Agreement. "*Loan(s)*" shall have the meaning set forth in the Note.

"*Manufacturer(s)*" shall mean the vehicle manufacturer with which the Borrower has an agreement to market vehicles. "*NADA*" shall mean the National Automobile Dealers Association.

*"New Vehicle(s)*" shall mean new unused motor vehicles purchased by Borrower directly from the Manufacturer or swapped from another automobile franchise dealership and accompanied by a Manufacturer's statement of origin and which are not demonstrator or rental/service motor vehicles.

"*New Vehicle Allocation*" shall mean the amount of the Approved Principal Amount allocated to finance the purchase of New Vehicles (as set forth on the Note). If no part of the Credit is allocated to New Vehicles or there is no stated amount for New Vehicles allocation in the Note, the New Vehicle Allocation shall be zero.

"*Note*" shall mean that certain Variable Rate Demand Note (Auto Dealer – Floor Plan) dated on or about the date hereof, together with the Schedule, executed and delivered by the Borrower to the Bank in the face amount of the Approved Principal Amount, and any replacements, amendments, modifications, extensions, renewals or substitutions thereof.

"*Obligations*" shall mean any and all indebtedness or other obligations of the Borrower to the Bank in any capacity, now existing or hereafter incurred, however created or evidenced, regardless of kind, class or form, whether direct, indirect, absolute or contingent (including obligations pursuant to any guaranty, endorsement, other assurance of payment or otherwise), whether joint or several, whether from time to time reduced and thereafter increased, or entirely extinguished and thereafter reincurred, together with all extensions, renewals and replacements thereof, and all interest, fees, charges, costs or expenses which accrue on or in connection with the foregoing, including any indebtedness or obligations (i) not yet outstanding but contracted for, or with regard to which any other commitment by the Bank exists; (ii) arising prior to, during or after any pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding; (iii) owed by the Borrower to others and which the Bank obtained, or may obtain, by assignment or otherwise; and (iv) payable under this Agreement.

"*Outstanding Principal Amount*" shall have the meaning ascribed to it in the Note.

"*Plan*" shall have the meaning ascribed to it in Section 11(l) of this Agreement.

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"*Proceeds*" shall mean cash and non-cash proceeds, present and future, and includes any debts owing to the Borrower by reason of the sale or other disposition of any Collateral and any cash, checks, trade-ins, accounts, chattel paper, notes, drafts, or other instruments whenever received and any items of Collateral disposed of by the Borrower which are returned to or repossessed by the Borrower.

"*Schedule*" shall mean that certain Schedule to Variable Rate Demand Note (Auto Dealer – Floor Plan) dated on or about the date hereof attached to and made a part of the Note, and any replacements, amendments, modifications, extensions, renewals or substitutions thereof.

"*Security Agreement*" shall mean the General Security Agreement executed and delivered by the Borrower to the Bank dated on or about the date hereof, as it may be amended, modified or replaced from time to time.

"*Subsidiary*" means any corporation or other business entity of which at least fifty percent (50%) of the voting stock or other ownership interest is owned by the Borrower directly or indirectly through one or more Subsidiaries. If the Borrower has no Subsidiaries, the provisions of this Agreement relating to the Subsidiaries shall be disregarded, without affecting the applicability of such provisions to the Borrower alone.

*"Third Party Seller"* has the meaning given to it in Section 4.2(c).

"*Transaction Documents*" shall mean this Agreement, the Note, the Security Agreement, the Account Pledge Agreement, and all documents, instruments or other agreements by the Borrower, Automile Holdings, LLC, or any guarantor in favor of the Bank in connection (directly or indirectly) with the Obligations, whether now or hereafter in existence, including promissory notes, security agreements, guaranties and letter of credit reimbursement agreements.

"*Used Vehicles*" shall mean motor vehicles that have been previously titled and are not older than the number of prior model years set forth in the Schedule.

"*Used Vehicle Allocation*" shall mean the amount of the Approved Principal Amount allocated to finance the purchase of Used Vehicles (as set forth on the Note). If no part of the Credit is allocated to Used Vehicles or there is no stated amount for Used Vehicle Allocation in the Note, the Used Vehicle Allocation shall be zero.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** **Advances**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1<u>Loans for Floor Plan Financing</u>. Bank agrees, in its sole discretion, to make Loans to or for the account of Borrower, upon Borrower's request therefor, in an aggregate amount of up to the Approved Principal Amount as set forth in the Note or such other amounts as may from time to time be established by Bank, subject to the terms and conditions set forth herein. The Loans shall be made for the purpose of financing the purchase or carrying of inventory by the Borrower to be held by the Borrower for sale to the Borrower's customers or for such other use as approved by the Bank, all in the ordinary course of the Borrower's business. The Loans shall be evidenced by the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2<u>Allocation</u>. Subject to the terms and conditions of this Agreement, the Bank shall make advances to the Borrower respecting the Loans up to the Approved Principal Amount, subject to the terms, advance rates and allocations set forth as follows. The Note sets forth the applicable allocation (the "**Allocation**"), if any, of the amount of the Credit available to finance New Vehicles, Used Vehicles, and Auction Vehicles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)New Vehicles. The Borrower may request a Loan for the purchase of a New Vehicle as long as the aggregate outstanding principal amount of all Loans for the purchase of New Vehicles and the requested Loan does not exceed the New Vehicle Allocation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Auction Vehicles. The Borrower may request a Loan for the purchase of an Auction Vehicle as long as the aggregate outstanding principal amount of all Loans for the purchase of Auction Vehicles and the requested Loan does not exceed the Auction Vehicle Allocation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Used Vehicles. The Borrower may request a Loan for the purchase of a Used Vehicle as long as the aggregate outstanding principal amount of all Loans for the purchase of Used Vehicles and the requested Loan does not exceed the Used Vehicle Allocation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3<u>Increase or Decrease in Amounts of the Credit</u>. The Bank may increase or decrease the Approved Principal Amount available under this Agreement and the Note and/or change the Allocation in its sole and absolute discretion by giving the Borrower written notice, and such change shall become effective coincidental with said notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4<u>Overadvances</u>. Any Loan that may be made, at the Bank's sole discretion, in excess of the Approved Principal Amount or the applicable Allocation shall not limit the obligations of the Borrower or any of Bank's rights or remedies hereunder or under the Transaction Documents or otherwise; all such Loans shall be due and payable to the Bank in accordance with the terms of the Note, and shall bear interest at the rate set forth in the Note. All checks or other items paid by Bank which cause an overdraft in any deposit account maintained by Borrower with Bank shall, at the option of the Bank, constitute an advance to Borrower pursuant to this Agreement respecting the Loans, repayable on demand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5<u>Advance Procedures</u>. No advance request (request for a Loan) by Borrower will be granted unless (a) it is for the purchase of specifically-identified goods to be held by Borrower for resale to Borrower's customers or for such other use approved by the Bank, all in the ordinary course of Borrower's business; and (b) Borrower submits or causes the submission of documentation or other evidence in support of each such advance request to the Bank in form and substance as required by the Bank in its sole discretion. The Bank shall have no obligation to make an advance (a Loan) if, after giving effect to such advance, (i) the aggregate outstanding principal balance of the Loans would exceed the Approved Principal Amount or (ii) the outstanding principal balance respecting any applicable Allocations would exceed such applicable Allocation. The Bank is not obligated to pay any invoices of the Manufacturer and, in the event that the Bank declines to pay any such invoice, the Bank shall so notify the Borrower and forward such invoice to the Borrower. Each advance made by the Bank in its sole discretion shall, in any event, be subject to the conditions precedent that: (i) there has been no material adverse change (as determined by the Bank in its sole discretion) in the assets, liabilities, financial condition or business of Borrower or any guarantor of the Obligations since the date of any financial statements delivered to the Bank before or after the date of this Agreement; and (ii) the representations and warranties contained in this Agreement are true and correct in all material respects, and that the Borrower shall have so certified to the Bank. Any request for an advance shall be deemed a certification by the Borrower as to the truth and accuracy in all material respects of the representations and warranties contained in this Agreement as of the date of such request. Regardless of the form of such advance request, unless otherwise specifically agreed, the Bank may refuse, in its sole discretion and for any or no reason whatsoever to make any advance requested by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 <u>Floor Plan Interest Reduction Balance</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.Floor Plan Interest Reduction Balance. The Bank may, upon written request from the Borrower and confirmation by the Bank, establish for the Borrower a floor plan aggregate interest reduction payment feature (the "Floor Plan Interest Reduction Balance"). The Floor Plan Interest Reduction Balance does not constitute a deposit account, and the Borrower shall have no right or interest in any amounts in such Floor Plan Interest Reduction Balance. The Floor Plan Interest Reduction Balance is intended to permit voluntary reductions in the Outstanding Principal Amount of Loans under the Credit pursuant to this Agreement and the Note. Any amounts paid by the Borrower into the Floor Plan Interest Reduction Balance shall be available for re-advance to the Borrower only in accordance with this Section 2.6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.<u>Payments and Advances</u>. The Borrower may, at its discretion, make payments to the Floor Plan Interest Reduction Balance, which payments shall represent and be deemed to be prepayments of the Loans. So long as there is no continuing default or event of default under the Transaction Documents , or any demand by the Bank for payment thereunder, amounts in the Floor Plan Interest Reduction Balance may be re-advanced to the Borrower pursuant to Section 2.5 hereof and subject to such other procedures established by the Bank with respect to Floor Plan Interest Reduction Balance. Such advances shall be subject to all of the terms, conditions, and limitations set forth in this Section 2.6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.<u>Application to Reduce Principal</u>. For purposes of computing the interest due with respect to Loans, the Outstanding Principal Amount on account of the Loans shall be deemed reduced by the average daily amount as of the close of business on deposit in the Floor Plan Interest Reduction Balance during the period for which interest is being calculated (the "**Floor Plan Interest Reduction**") and interest will be determined as set forth in Section 9.2 of this Agreement after giving effect to the Floor Plan Interest Reduction; <u>provided</u>, <u>however</u>, notwithstanding the amount on deposit in the Floor Plan Interest Reduction Balance at any time, the maximum amount of the Floor Plan Interest Reduction under this Section 2.6 shall not exceed an amount equal to 50% of the Outstanding Principal Amount of the Loans for the relevant period. Notwithstanding anything herein to the contrary, the Floor Plan Interest

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Reduction shall not: (i) subject the affected Outstanding Principal Amount of Loans to the unused commitment fee, if any, applicable under this Agreement or the Note; (ii) limit or modify any principal payment requirements; (iii) reduce the Outstanding Principal Amount of Loans for purposes of determining any remaining availability under the Credit; (iv) be used for the satisfaction of any curtailment requirements, (v) impair the Bank's discretion with respect to Loan advances; (v) impair or alter the right of the Bank to make demand for payment as set forth in this Agreement or the Note, or (vi) modify any other terms set forth elsewhere in this Agreement or the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.<u>Termination of Floor Plan Interest Reduction Balance</u>. At any time, upon thirty (30) days written notice to the Borrower, the Bank may terminate the Floor Plan Interest Reduction Balance, unless sooner terminated pursuant to the following sentence of this paragraph. The Bank may terminate the Floor Plan Interest Reduction Balance without prior notice upon the occurrence and during the continuance of any default or event of default, or upon demand by the Bank for immediate payment in full of the Loans. Upon any such termination of the Floor Plan Interest Reduction Balance, the amounts held therein shall be (i) applied to the payment of the Loans as set forth in Section 9 of this Agreement, or (ii) so long as no default or event of default has occurred and is continuing, and absent a demand by the Bank for payment of the Loans, at the option of the Borrower, remitted to the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.<u>Bank's Records Conclusive</u>. No failure by the Bank in accounting for the Floor Plan Interest Reduction Balance or Floor Plan Interest Reduction shall affect the Borrower's obligation to pay in full the principal and interest on account of the Loans and all other Obligations of the Borrower to the Bank. The records of the Bank with respect to the Floor Plan Interest Reduction Balance and calculation of the Floor Plan Interest Reduction shall be conclusive, absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** **Purpose**.

The proceeds of each Loan shall be used by the Borrower only to finance the purchase of New Vehicles from the Manufacturer and, if applicable, Used Vehicles and Auction Vehicles in the normal course of business in accordance with the terms of the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** **Financing of Vehicle Inventory**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1<u>New Vehicles</u>. The Bank has entered or will enter into an appropriate agreement with each Manufacturer which will provide for the Bank to pay to the Manufacturer the purchase price for the New Vehicles the Borrower purchases from the Manufacturer; provided, however, that the Loan for the New Vehicle shall not exceed the lesser of (i) the Manufacturer's invoice price for such New Vehicle or (ii) the Borrower's acquisition price for such New Vehicle as stated in the bill of sale/invoice. Such agreements may be subject to such monetary and other limitations and contain such other terms and conditions as the Bank may now or hereafter agree to and shall be subject to change or termination by the Bank at any time without notification to or consent by the Borrower. Subject to the terms of such agreements, including, without limitation, those relating to the time and manner of payment, the Bank may pay to the Manufacturer the purchase price of each New Vehicle ordered by the Borrower from such Manufacturer upon receipt by the Bank of shipping documents, invoices or other evidence satisfactory to the Bank, in its sole discretion, of the shipment or delivery of the vehicles concerned. The Bank in no way assumes any responsibility as to the vehicles ordered by the Borrower or the shipment thereof, including, without limitation, compliance of the vehicles with the Borrower's orders, condition of vehicles, delay or failure of arrival, any action or inaction of the shipper, any matter relating to insurance during shipment, any defect in or the validity or invalidity of the shipping documents, invoices or other papers relating thereto or the liability of any party thereto, or otherwise. Payment by the Bank to the Manufacturer for the indicated purchase price shall in all cases constitute a Loan. The Bank shall advise the Borrower of the making of advances pursuant to such agreement and of the vehicles concerned in such manner and at such times as may be mutually satisfactory to the Borrower and to the Bank; provided, however, the Bank's failure to provide the Borrower with such notice shall not grant the Borrower a cause of action against the Bank or make the Bank liable to the Borrower for corresponding damages, if any. Notwithstanding any other term of the Agreement to the contrary, any draft by a manufacturer under a manufacturer drafting agreement ("Drafting Agreement") that is funded by Bank in accordance with the terms of such Drafting Agreement shall constitute a Loan advance, for which Borrower shall be automatically liable under this Agreement, pursuant to the terms thereof. Borrower authorizes Bank to enter into, and consents to Bank entering into, a Drafting Agreement with a Manufacturer without prior review of such Drafting Agreement. If requested by Borrower in writing, for information purposes, Bank shall furnish to Borrower a copy of a Drafting Agreement related to Borrower.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Documentation</u>. In the event the Borrower wants to finance the acquisition of New Vehicle inventory, the Borrower shall execute and deliver to the Bank its standard form of "Request of Advance on Dealer Owned Inventory", or such other paper or electronic form (submitted to Bank electronically or by other means) as the Bank may instruct, appropriately completed. The Bank, in its sole discretion, may approve such request and make a Loan to the Borrower in the amount requested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Used Vehicles</u>. This section is applicable only if there is a Used Vehicle Allocation contained in the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.<u>Documentation</u>. In the event the Borrower wants to finance the acquisition of Used Vehicle inventory, the Borrower shall execute and deliver to the Bank its standard form of "Request of Advance on Dealer Owned Inventory", or such other paper or electronic form (submitted to Bank electronically or by other means) as the Bank may instruct, appropriately completed. The Bank, in its sole discretion, may approve such request and make a Loan to the Borrower the amount requested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.<u>Limitation on the Financing of Used Cars</u>. The Borrower hereby agrees that financing of Used Vehicle inventory hereunder is applicable to the financing by the Borrower of any vehicle acquired by the Borrower and is subject to such other restrictions as the Bank may specify from time to time in its sole discretion and without notice to the Borrower, including, without limitation, the percentage of NADA value which the Bank will finance, the age of used cars which the Bank will finance defined in a schedule to the Note and the ratio of non-financed used vehicles to financed Used Vehicles. This section does not apply to (i) vehicles acquired directly from the Manufacturer or distributor and financed by the Bank, (ii) demonstrators financed by the Bank or (iii) vehicles which are in fact in new and unused condition but which have been acquired by purchase from another dealer and financed by the Bank. It also applies to Used Vehicles acquired in the normal course of business. For each advance request used to finance the purchase or carrying of Used Vehicles where the advance is made to Borrower or to a party other than an auction approved by the Bank, the Bank will advance no more than the lesser of: (i) Borrower's acquisition price for such Used Vehicle as stated in the bill of sale/invoice, or (ii) the percentage set forth in the Schedule, of the current NADA wholesale/trade value for such Used Vehicle.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Auction Vehicles</u>. This section is applicable only if there is an Auction Vehicle Allocation contained in the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.<u>Documentation</u>. In the event the Borrower wants to finance the acquisition of Auction Vehicle inventory, the approved auction facility shall execute and deliver to the Bank a bill of sale and proof of clear title or Manufacturer's statement of origin for every unit purchased by the Borrower, appropriately completed. The Bank, in its sole discretion, may approve such request and the Bank shall make a Loan to the Borrower the amount requested.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.<u>Limitation on the Financing of Auction Vehicles</u>. The Borrower hereby acknowledges and agrees that financing of Auction Vehicle inventory hereunder is applicable to the financing by the Borrower of any vehicle acquired by the Borrower from an approved auto auction and is subject to such restrictions as the Bank may specify from time to time in its sole discretion without notice to the Borrower. This section does not apply to (i) vehicles acquired directly from the Manufacturer or distributor and financed by the Bank, (ii) demonstrators financed by the Bank, in Bank's discretion; or (iii) vehicles which are in fact in new and unused condition but which have been acquired by purchase from another dealer and financed by the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.<u>Payments to Approved Third Party Sellers</u>. Either the Borrower, or a Bank approved third party seller, including, but not limited to, an auction house ("Third Party Seller") on behalf of the Borrower, may communicate wire instructions (a "Payment Order") to the Bank in which to fund a Loan to be used to purchase inventory from such Third Party Seller. The Bank will verify the authenticity of the Payment Order by comparing the instructions that the Bank has on file for the Third Party Seller (if the Bank has dealt with the Third Party Seller before). If the Bank has not dealt with the Third Party Seller before, the Bank will call the financial institution indicated in the Payment Order and verify that the routing number and the account number are associated with Third Party Seller's account at such financial institution. The Borrower agrees that the Bank's means of authenticating the Payment Order is commercially reasonable given the Borrower's needs and circumstances. The Borrower agrees to be bound by any Payment Oder whether or not such Payment Order is authorized or correct, as long as the Bank verifies the Payment Order in accordance with the procedures set forth in this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4<u>Dealer to Dealer Transactions</u>. In the event the Borrower wishes to finance the acquisition of a vehicle (new, used or auction to the extent there is a New, Used or Auction Allocation, as the case may be, contained in the Note) from

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another automobile franchise dealership, the Borrower shall execute and deliver to the Bank its standard form of "Request of Advance on Dealer Owned Inventory" or such other paper or electronic form (submitted to Bank electronically or by other mean as the Bank may instruct), appropriately completed. The Bank, in its sole discretion, may approve such request and the Bank shall make a Loan to the Borrower the amount requested and shall be subject to the applicable Allocation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.** **Curtailments**.

The Borrower shall make such regular reductions in outstanding Loans with respect to any vehicle or vehicles (whether new, used or auction) as the Bank may specify or modify from time to time, in its sole discretion and without notice to the Borrower, including, without limitation, modification of any curtailments which may be set forth in the Schedule. Notwithstanding the application of such curtailments, the Borrower acknowledges and agrees that all amounts owing by the Borrower pursuant to the Note shall be repayable upon demand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.** **Sale of Vehicle Inventory**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1Except as the Bank may otherwise consent in writing with respect to specific items of Collateral, the Borrower agrees to receive and hold all items of Collateral consisting of vehicles financed hereunder for the sole purpose of storing and exhibiting the same, at the Borrower's address specified on page one, and at the Borrower's risk of loss or injury in order to procure the sale of each item thereof in the ordinary course of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2So long as the Borrower (i) is not in default under the Transaction Documents; or (ii) has not been notified by the Bank to the contrary, the Borrower may exhibit and sell Collateral consisting of vehicles to retail buyers in the ordinary course of the Borrower's business as a retail dealer for cash and for cash and property then taken in trade; provided, however, that no sale, transfer or other disposition shall be in the ordinary course of business if it is in bulk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3In any sale or other disposition of Collateral consisting of vehicles, the sale price shall not be less than the amount of the Loan made with respect to such vehicle. Notwithstanding the foregoing, from time to time the Borrower may, in the ordinary course of business sell vehicles for less than the amount of the Loan used to acquire such vehicle; provided, however, such a sale shall not relieve the Borrower from the obligation to pay the full amount of such Loan used to acquire the vehicle and deliver the Proceeds from such sale to the Bank pursuant to Section 9 of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.** **Demonstrators**.

So long as the Borrower (i) is not in default under the Transaction Documents; or (ii) has not been notified by the Bank to the contrary, the Borrower may in the ordinary course of business allow a reasonable number (subject to the Bank's continuing review, right of modification, restriction, supervision, or termination) of items of Collateral consisting of vehicles to be used by the Borrower's salesmen, officers, other employees, relatives or persons or entities to whom the Borrower is indebted or owes obligations (as long as such indebtedness or obligations were incurred in the ordinary course of the Borrower's business) for demonstration or other purposes (including the satisfaction, in whole or in part, of debt or obligations incurred in the ordinary course of the Borrower's business). The use of a vehicle as a demonstrator shall not impair the Bank's rights in and to such vehicle, which shall continue to constitute inventory of the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.** **Examination of Books and Records**.

The Bank or its agents may at any time examine the Collateral, the Borrower's books, and records in reference to such Collateral, the sale, disposition and proceeds thereof, and the disposition of such proceeds, and make copies of such books and records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.** **Payments**.

Notwithstanding the payment obligations set forth in this paragraph, all loans and advances made respecting the Loans shall be payable to Bank on DEMAND. The Borrower shall repay the Loans as follows:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1<u>Repayment.</u> The Borrower agrees that when any item of Collateral consisting of vehicle inventory is sold or otherwise disposed of, the Borrower will immediately account to the Bank for the Proceeds and will deliver to the Bank such Proceeds and such assignments or endorsements as may be requisite or requested by the Bank upon the sooner of: (i) within three (3) business days of receipt of Proceeds or (ii) within ten (10) business days from the date of sale of Collateral, unless sold or disposed as a fleet sale to a federal, state, or municipal agency, administration, or office, then within sixty (60) business days provided that Borrower's purchase order with said fleet customer preserves Bank's security interest in the Collateral until receipt of Proceeds. Failure to remit Proceeds as stated above may result in the assessment of a late fee as described in the Schedule, in Bank's discretion. The Bank shall be entitled to the Proceeds and shall have a security interest in them. Pending such accounting and delivery, the Borrower will hold the Proceeds in trust for the Bank as the Bank's property, but at the Borrower's risk, in the identical form received, and separate and apart from the Borrower's property. If all or any portion of the Proceeds or consideration for the sale of a vehicle is non-cash (including, without limitation, any satisfaction in whole or in part of an obligation owed by the Borrower), the Borrower shall immediately deliver to the Bank sufficient funds to satisfy in full all of the principal, interest, costs and expenses then unpaid with respect to the Loan used to acquire such vehicle. The provisions of this section shall not be deemed a limitation on the Bank's right to make demand at any time for payment in full of the Loans. If at any time the Outstanding Principal Amount exceeds the Approved Principal Amount, the Borrower shall immediately pay so much of the Outstanding Principal Amount, together with accrued interest on the portion being paid, as shall be necessary in order that the unpaid balance, after giving effect to such payment, shall not be in excess of the Approved Principal Amount. In any event, all amounts outstanding shall be due and payable ON DEMAND.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2<u>Interest</u>. Interest respecting the Loans will be charged to Borrower on the principal amount outstanding from time to time (and, if and to the extent applicable upon the terms and subject to the conditions and limitations (including limitations as to amount) set forth in Section 2.6 hereof, giving effect to any applicable FLAIR Reduction) at the interest rate specified in the Note in accordance with the terms of the Note. If not specified in the Note, interest will be charged at the highest rate per annum allowable under applicable law based on a 360-day year and the actual number of days elapsed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3<u>Demand</u>. All loans and advances made respecting the Loans shall be payable to Bank on DEMAND, notwithstanding the inclusion of events of default in this Agreement or in any other Transaction Document and whether or not any event of default has occurred under any of the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4<u>Authorized Persons; Advances</u>. Any person duly authorized by a general borrowing resolution of the Borrower, or in the absence of such a resolution, the President, Treasurer or any Vice President of the Borrower, or any person otherwise authorized in this paragraph, may request discretionary loans hereunder, either orally or otherwise, but the Bank at its option may require that all requests for loans hereunder shall be in writing. The Bank shall incur no liability to Borrower in acting upon any request referred to herein which the Bank believes in good faith to have been made by an authorized person or persons. Each loan hereunder may be credited by Bank to any deposit account of Borrower with Bank or with any other bank with which Borrower maintains a deposit account, or may be paid to Borrower (or as Borrower instructs) or may be applied to any Obligations, as Bank may in each instance elect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.** **Representations and Warranties**.

The Borrower represents and warrants and, so long as this Agreement is in effect, shall be deemed to continuously represent and warrant that: (i) the Borrower and each Subsidiary (if either is not an individual) is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was formed and has all requisite power to enter into this Agreement, the Note and the other Transaction Documents and to carry out the provisions hereof and thereof and has duly authorized the execution, delivery and performance of this Agreement, the Note and the other Transaction Documents; (ii) the Borrower and each Subsidiary is duly authorized to do business in each jurisdiction in which failure to be so qualified would reasonably be expected to have a material adverse effect on its business or assets and has the power and authority to own each of its assets and to use them in the ordinary course of business now and in the future; (iii) the execution and delivery of this Agreement, the Note and the other Transaction Documents and the performance of the obligations hereunder and thereunder do not violate any provision of law, any order, rule or regulation of any court or governmental agency or its charter, articles of incorporation or bylaws or constitute a default under any material agreement or other instrument to which it is a party or by which it is bound; (iv) it has duly executed and delivered this Agreement, the Note and the other Transaction Documents and each constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms; (v) the Borrower and each Subsidiary conducts its business and operations and the ownership of its assets in compliance in all material

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respects with each applicable statute, regulation and other law, including environmental laws; (vi) all material approvals, including authorizations, permits, consents, franchises, licenses, registrations, filings, declarations, reports and notices (the "Approvals") necessary for the conduct of the Borrower's and each Subsidiary's business and for the Credit have been duly obtained and are in full force and effect; (vii) the Borrower and each Subsidiary is in compliance with the Approvals; (viii) the Borrower and each Subsidiary (if either is not an individual) is in compliance in all material respects with its certificate of incorporation, by-laws, partnership agreement, articles of organization, operating agreement or other applicable organizational or governing document as may be applicable to the Borrower or a Subsidiary depending on its organizational structure ("Governing Documents"); (ix) the Borrower and each Subsidiary is in compliance in all material respects with each agreement to which it is a party or by which it or any of its assets is bound; (x) the execution, delivery and performance by the Borrower of this Agreement and all related documents, including the Transaction Documents, (1) are in furtherance of the Borrower's purposes and within its power and authority; (2) do not (A) violate any statute, regulation or other law or any judgment, order or award of any court, agency or other governmental authority or of any arbitrator with respect to the Borrower or any Subsidiary or (B) violate the Borrower's or any Subsidiary's Governing Documents (if either is not an individual), constitute a default under any agreement binding on the Borrower or any Subsidiary or result in a lien or encumbrance on any assets of the Borrower or any Subsidiary; and (3) if the Borrower or any Subsidiary is not an individual, have been duly authorized by all necessary organizational actions; (xi) the Borrower and each Subsidiary has good and marketable title to each of its assets free of security interests, mortgages or other liens or encumbrances, except as permitted under permitted liens or pursuant to the Bank's prior written consent; (xii) there is no pending or threatened litigation, claim, audit, investigation, action or other legal proceeding or judgment, order or award of any court, agency or other governmental authority or arbitrator (any, an "Action") which involves the Borrower, its Subsidiaries or their respective assets and might have a material adverse effect upon the Borrower or any Subsidiary or threaten the validity of the Loans, any Transaction Document or any related document or action; (xiii) neither this Agreement nor any certificate, financial statement or other writing provided to the Bank by or on behalf of the Borrower or any Subsidiary contains any statement of fact that is incorrect or misleading in any material respect or omits to state any fact necessary to make any such statement not incorrect or misleading; (xiv) the Borrower has not failed to disclose to the Bank any fact that might have a material adverse effect on the Borrower or any Subsidiary; and (xv) Borrower's chief executive office is correctly stated in the preamble to this Agreement, and Borrower shall, during the term of this Agreement, keep the Bank currently and accurately informed in writing of each of its other places of business, and shall not change the location of such chief executive office or open or close, move or change any existing or new place of business without giving the Bank at least thirty (30) days prior written notice thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.** **Covenants.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Financial Reporting</u> **.** So long as this Agreement is in effect, the Borrower shall deliver or cause to be delivered to the Bank: i) as soon as available, but in any event within twenty (20) days after the last day of each month, a full and complete copy of the Borrower's dealership statement on the Manufacturer's form of statement for the month just ended; ii) within one hundred twenty (120) days after the end of each fiscal year, consolidating and consolidated statements of the Borrower's and each Subsidiary's income and cash flows and its consolidating and consolidated balance sheet as of the end of such fiscal year, setting forth comparative figures for the preceding fiscal year and to be (check applicable box, if no box is checked the financial statements shall be audited):

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| | | |
|:---|:---|:---|
| ◻ **audited** | ⌧ **reviewed or an equivalent thereof** | ◻ **compiled** |

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by an independent certified public accountant acceptable to the Bank; all such statements, when requested by the Bank, shall be certified by the Borrower's chief financial officer to be correct and in accordance with the Borrower's and each Subsidiary's records and to present fairly the results of the Borrower's and each Subsidiary's operations and cash flows and its financial position at year end; (iii) with each statement of income, when requested by the Bank, a certificate executed by the Borrower's chief executive and chief financial officers or other such person responsible for the financial management of the Borrower (A) setting forth the computations required to establish the Borrower's compliance with each financial covenant, if any, during the statement period, (B) stating that the signers of the certificate have reviewed this Agreement and the operations and condition (financial or other) of the Borrower and each of its Subsidiaries during the relevant period and (C) stating that no event of default occurred during the period, or if an event of default did occur, describing its nature, the date(s) of its occurrence or period of existence and what action the Borrower has taken with respect thereto; and (iv) from time to time such financial data and information about

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Borrower, Borrower's principals and guarantors including, but not limited to, tax returns for Borrower, principals and guarantors and audited financial statements for any such entities or persons. Failure to submit financing reporting by the due date described in this Section 11(a) may result in the assessment of a late fee as described in a schedule to the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Accounting; Tax Returns and Payment of Claims</u> **.** The Borrower and each Subsidiary will maintain a system of accounting and reserves in accordance with G.A.A.P., has filed and will file each tax return required of it and has paid and will pay when due each tax, assessment, fee, charge, fine and penalty imposed by any taxing authority upon it or any of its assets, income or franchises, as well as all amounts owed to mechanics, materialmen, landlords, suppliers and the like in the normal course of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Generally Accepted Accounting Principles.</u> Any financial calculation to be made, all financial statements and other financial information to be provided, and all books and records, system of accounting and reserves to be kept in connection with the provisions of this Agreement, shall be in accordance with G.A.A.P. consistently applied during each interval and from interval to interval; provided, however, that in the event changes in G.A.A.P. shall be mandated by the Financial Accounting Standards Board or any similar accounting body of comparable standing, or should be recommended by Borrower's certified public accountants, to the extent such changes would affect any financial calculations to be made in connection herewith, such changes shall be implemented in making such calculations only from and after such date as Borrower and the Bank shall have amended this Agreement to the extent necessary to reflect such changes in the financial and other covenants to which such calculations relate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Books and Records; Inspections.</u> Upon reasonably prior notice by Bank, the Borrower will permit, and cause its Subsidiaries to permit, the Bank's officers, attorneys or other agents to inspect its and its Subsidiary's premises and the Collateral, examine and copy its records and discuss its and its Subsidiary's business, operations and financial or other condition with its and its Subsidiary's responsible officers and independent accountants. The Borrower hereby authorizes the Bank to directly contact and communicate with any accountant employed by Borrower in connection with the review and/or maintenance of Borrower's books and records or preparation of any financial reports delivered by or at the request of Borrower to Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Payments and Performance</u>. Borrower will duly and punctually pay all Obligations becoming due to the Bank and will duly and punctually perform all Obligations on its part to be done or performed under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Operating Accounts</u> **.** Maintain, and cause its Subsidiaries to maintain, all bank accounts with the Bank, at the Bank's option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Changes in Management and Control.</u> If the Borrower is not an individual, immediately upon any change in the identity of the Borrower's chief executive officers or in its beneficial ownership, the Borrower will provide to the Bank a certificate executed by its senior individual authorized to transact business on behalf of the Borrower, specifying such change.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Notice of Material Adverse and Other Changes.</u> Immediately upon acquiring reason to know of (i) any event or condition that could reasonably be expected to have a material adverse effect upon the Borrower or any Subsidiary, a breach or potential breach of a covenant, representation or warranty under this Agreement, or (ii) any Action, the Borrower will provide to the Bank a certificate executed by the Borrower's senior individual authorized to transact business on behalf of the Borrower, specifying the date(s) and nature of the event or the Action and what action the Borrower or its Subsidiary has taken or proposes to take with respect to it. Borrower will immediately notify the Bank in writing of any litigation, filing, or of any investigative proceedings of a governmental agency or authority commenced or threatened against it which would or might be materially adverse to the financial condition of Borrower or any guarantor of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i) <u>Insurance.</u> Maintain its, and cause its Subsidiaries to maintain, property in good repair and will on request provide the Bank with evidence of insurance coverage satisfactory to the Bank, including fire and hazard, liability, workers' compensation and business interruption insurance and flood hazard insurance as required.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j) <u>Taxes.</u> Borrower will promptly pay all real and personal property taxes, assessments and charges and all franchise, income, unemployment, retirement benefits, withholding, sales and other taxes assessed against it or payable by it before delinquent; provided that this covenant shall not apply to any tax assessment or charge which is being contested in good faith and with respect to which reserves have been established and are being maintained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k) <u>Maintenance.</u> Borrower will keep and maintain its properties, if any, in good repair, working order and condition. Borrower will immediately notify the Bank of any loss or damage to or any occurrence which would adversely affect the value of any such property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m) Except for that certain Purchase Agreement by and among Group 1 Automotive, Inc., GPB Portfolio Automotive, LLC, Capstone Automotive Group, LLC, Capstone Automotive Group II, LLC, Automile Parent Holdings, LLC, Automile TY Holdings, LLC and Prime Real Estate Holdings, LLC, dated as of September 12, 2021 pursuant to which Borrower's owner, Automile Holdings, LLC, has agreed to sell substantially all of the assets of Borrower to Group 1 Automotive, Inc. (the "Group 1 Purchase Agreement"), Borrower shall not enter into a sale, assignment, transfer or delivery, by operation of law or otherwise, of all or substantially all of the assets of the Borrower to a third party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;n) Borrower shall not, without the Bank's prior written consent, engage in, agree to or approve (1) a plan of reorganization, (2) merger or consolidation, (3) division into (or of) one or more entities or series of entities or allocation or transfer of any of Borrower's assets or liabilities as a result of such a division, conversion to another form of business entity or dissolution of the Borrower or cessation by Borrower as a going business concern;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o) <u>Further Assurances.</u> Promptly upon the request of the Bank, the Borrower shall take, and cause its Subsidiaries to take, such action and execute and deliver to the Bank such additional documents, instruments, certificates, and agreements as the Bank may reasonably request from time to time to effectuate the purposes of the Transaction Documents and the transactions contemplated thereby, including, without limitation, causing any Subsidiary, entity or series of entities it may create hereafter through merger, division or otherwise, to execute agreements, in form and substance acceptable to the Bank, (i) assuming or guarantying the Borrower's obligations under this Agreement and all related agreements and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) pledging assets to the Bank to the same extent as the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**12.** **Collateral Account.** On or before the date hereof, Borrower shall cause Automile Holdings, LLC ("Automile") to deposit the sum of at least $8,750,000.00 into Automile's account no. 9876503294 (the "Collateral Account") with Bank and shall maintain a minimum balance of at least $8,750,000.00 at all times. The Collateral Account shall be pledged to Bank as additional collateral for the Obligations pursuant to the Account Pledge Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**13.** **Demand and Remedies.** 

Upon DEMAND, at the election of the Bank, all Obligations shall become immediately due and payable without notice. All of the Bank's rights and remedies not only under the provisions of this Agreement but also under the provisions of any other agreement or transaction and at law or in equity shall be cumulative and not alternative or exclusive, and may be exercised by the Bank at such time or times and in such order of preference as the Bank in its

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sole discretion may determine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**14.** **Expenses.** 

The Borrower shall pay to the Bank on demand all reasonable, documented out of pocket costs and expenses (including all fees and disbursements of counsel retained for advice, suit, appeal or other proceedings or purpose and of any experts or agents it may retain), which the Bank may incur in connection with: (i) the administration of the Obligations, including any administrative fees the Bank may impose for the preparation of discharges, releases or assignments to third-parties; (ii) the enforcement and collection of any Obligations or any guaranty thereof; (iv) the exercise, performance, enforcement or protection of any of the rights of the Bank hereunder; or (v) the failure of the Borrower or any Subsidiary to perform or observe any provisions hereof. After such demand for payment of any cost, expense or fee under this Section or elsewhere under this Agreement, the Borrower shall pay interest at the highest default rate specified in any instrument evidencing any of the Obligations from the date payment is demanded by the Bank to the date reimbursed by the Borrower. All such costs, expenses or fees under this Agreement shall be added to the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**15.** **Term.** 

This Agreement shall remain in full force and effect until (i) all Obligations outstanding, or contracted or committed for (whether or not outstanding), shall be finally and irrevocably paid in full and (ii) all Transaction Documents have been terminated by the Bank and is supplementary to each and every other agreement between Borrower and Bank and shall not be so construed as to limit or otherwise derogate from any of the rights or remedies of Bank or any of the liabilities, obligations or undertakings of Borrower under any such agreement, nor shall any contemporaneous or subsequent agreement between Borrower and the Bank be construed to limit or otherwise derogate from any of the rights or remedies of Bank or any of the liabilities, obligations or undertakings of Borrower hereunder, unless such other agreement specifically refers to this Agreement and expressly so provides.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**16.** **Right of Setoff.** 

The Bank shall have the right to set off against the amounts owing under this Agreement and the other Transaction Documents any property of the Borrower, its subsidiary or any guarantor or endorser held in a deposit or other account, whether for safekeeping or otherwise, or otherwise with the Bank or its Affiliates or otherwise owing by the Bank or its Affiliates in any capacity to the Borrower, its Subsidiary or any guarantor of, or endorser of any of the Transaction Documents evidencing the Obligations. Such setoff shall be deemed to have been exercised immediately at the time the Bank or such Affiliate elect to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**17.** **USA PATRIOT Act Notice.** 

Bank hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act ("Patriot Act"), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow Bank to identify the Borrower in accordance with the Patriot Act. The Borrower agrees to, promptly following a request by Bank, provide all such other documentation and information that Bank requests in order to comply with its ongoing obligations under applicable "know your customer" and anti-money laundering rules and regulations, including the Patriot Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**18.** **Miscellaneous.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) <u>Notices.</u> Any demand or notice hereunder or under any applicable law pertaining hereto shall be in writing and duly given if delivered to Borrower (at its address on the Bank's records) or to the Bank (at the address on page one and separately to the Bank officer responsible for Borrower's relationship with the Bank at the officer's address as set forth in the Schedule). Such notice or demand shall be deemed sufficiently given for all purposes when delivered (i) by personal delivery and shall be deemed effective when delivered, or (ii) by mail or courier and shall be deemed effective three (3) business days after deposit in an official depository maintained by the United States Post Office for the collection of mail or one (1) business day after delivery to a nationally recognized overnight courier service (e.g., Federal Express). Notice by e-mail is not valid notice under this or any other agreement between Borrower and the Bank.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) <u>Indemnification</u> **.** If, after receipt of any payment of all or any part of, the Obligations, the Bank is, for any reason, compelled to surrender such payment to any person or entity because such payment is determined to be void or voidable as a preference, an impermissible setoff, or a diversion of trust funds, or for any other reason, the Transaction Documents shall continue in full force and the Borrower shall be liable, and shall indemnify and hold the Bank harmless for, the amount of such payment surrendered. The provisions of this Section shall be and remain effective notwithstanding any contrary action which may have been taken by the Bank in reliance upon such payment, and any such contrary action so taken shall be without prejudice to the Bank's rights under the Transaction Documents and shall be deemed to have been conditioned upon such payment having become final and irrevocable. The provisions of this Section shall survive the termination of this Agreement and the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) <u>Cumulative Nature and Non-Exclusive Exercise of Rights and Remedies.</u> All rights and remedies of the Bank pursuant to this Agreement and the Transaction Documents shall be cumulative, and no such right or remedy shall be exclusive of any other such right or remedy. In the event of any irreconcilable inconsistencies, this Agreement shall control. No single or partial exercise by the Bank of any right or remedy pursuant to this Agreement or otherwise shall preclude any other or further exercise thereof, or any exercise of any other such right or remedy, by the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) <u>Governing Law; Jurisdiction</u> **.** This Agreement has been delivered to and accepted by the Bank and will be deemed to be made in the State of New York. Except as otherwise provided under federal law, this Agreement will be interpreted in accordance with the laws of the State of New York excluding its conflict of laws rules. **BORROWER HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK IN A COUNTY OR JUDICIAL DISTRICT WHERE THE BANK MAINTAINS A BRANCH AND CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER AND AT BORROWER'S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS AGREEMENT WILL PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST BORROWER INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION.** Borrower acknowledges and agrees that the venue provided above is the most convenient forum for both the Bank and Borrower. Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e) <u>Joint and Several; Successors and Assigns.</u> If there is more than one Borrower, each of them shall be jointly and severally liable for all amounts, which become due, and the performance of all obligations under this Agreement, and the term "the Borrower" shall include each as well as all of them. This Agreement shall be binding upon the Borrower and upon its heirs and legal representatives, its successors and assignees, and shall inure to the benefit of, and be enforceable by, the Bank, its successors and assignees and each direct or indirect assignee or other transferee of any of the Obligations; provided, however, that this Agreement may not be assigned by the Borrower without the prior written consent of the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f) <u>Waivers; Changes in Writing.</u> No failure or delay of the Bank in exercising any power or right hereunder 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 Borrower expressly disclaims any reliance on any course of dealing or usage of trade or oral representation of the Bank (including representations to make loans to the Borrower) and agrees that none of the foregoing shall operate as a waiver of any right or remedy of the Bank. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless made specifically in writing by the Bank and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No modification to any provision of this Agreement shall be effective unless made in writing in an agreement signed by the Borrower and the Bank. The Borrower waives notice of intent to accelerate, notice of acceleration, notice of nonpayment, demand, presentment, protest or

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notice of protest of the Obligations, and all other notices, consents to any renewals or extensions of time of payment thereof, and generally waives any and all suretyship defenses and defenses in the nature thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g) <u>Waiver of Homestead</u>. To the maximum extent permitted under applicable law, the Borrower hereby waives and terminates any homestead rights and/or exemptions respecting any of its properties under the provisions of any applicable homestead laws, including without limitation, Section 5206 of the Civil Practice Law and Rules of New York.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h) <u>Deposit Collateral</u>. The Borrower hereby grants to the Bank a continuing lien and security interest in any and all deposits or other sums of Borrower at any time credited by or due from the Bank or any of its Affiliates to the Borrower and any cash, securities, instruments or other property of the Borrower in the possession of the Bank or any of its Affiliates, whether for safekeeping or otherwise, or in transit to or from the Bank or any of its Affiliates (regardless of the reason the Bank or any of its Affiliates had received the same or whether the Bank or any of its Affiliates has conditionally released the same) as security for the full and punctual payment and performance of all of the liabilities and obligations of the Borrower to the Bank or any of its Affiliates and such deposits and other sums may be applied or set off against such liabilities and obligations of the Borrower to the Bank or any of its Affiliates at any time, whether or not such are then due, whether or not demand has been made and whether or not other collateral is then available to the Bank or any of its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i) <u>Complete Agreement</u>. This Agreement and the other Transaction Documents constitute the entire agreement and understanding between and among the parties hereto relating to the subject matter hereof, and supersedes all prior proposals, negotiations, agreements and understandings among the parties hereto with respect to such subject matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j) <u>Binding Effect of Agreement</u>. This Agreement shall be binding upon and inure to the benefit of the respective heirs, executors, administrators, legal representatives, successors and assigns of the parties hereto, and shall remain in full force and effect (and the Bank shall be entitled to rely thereon) until released in writing by the Bank. The Bank may transfer and assign this Agreement and deliver it to the assignee, who shall thereupon have all of the rights of the Bank; and the Bank shall then be relieved and discharged of any responsibility or liability with respect to this Agreement. The Borrower may not assign or transfer any of its rights or obligations under this Agreement. Except as expressly provided herein or in the other Transaction Documents, nothing, expressed or implied, is intended to confer upon any party, other than the parties hereto, any rights, remedies, obligations or liabilities under or by reason of this Agreement or the other Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;k) <u>Reproductions</u>. This Agreement and all documents which have been or may be hereinafter furnished by Borrower to the Bank may be reproduced by the Bank by any photographic, photostatic, microfilm, xerographic or similar process, and any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made in the regular course of business).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;l) <u>Interpretation</u> **.** Unless the context otherwise clearly requires, references to plural includes the singular and references to the singular include the plural; references to "individual" shall mean a natural person and shall include a natural person doing business under an assumed name (*e.g.*, a "DBA"); the word "or" has the inclusive meaning represented by the phrase "and/or"; the word "including", "includes" and "include" shall be deemed to be followed by the words "without limitation"; and captions or section headings are solely for convenience and not part of the substance of this Agreement. Any representation, warranty, covenant or agreement herein shall survive execution and delivery of this Agreement and shall be deemed continuous. Each provision of this Agreement shall be interpreted as consistent with existing law and shall be deemed amended to the extent necessary to comply with any conflicting law. If any provision nevertheless is held invalid, the other provisions shall remain in effect. The Borrower agrees that in any legal proceeding, a photocopy of this Agreement kept in the Bank's course of business may be admitted into evidence as an original.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;m) <u>Waiver of Jury Trial.</u> **THE BORROWER AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY THE** 

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**BORROWER AND THE BANK MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTIONS RELATED HERETO. THE BORROWER REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. THE BORROWER ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.**

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![Graphic](tmb-20221231xex10d2011.jpg)

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![Graphic](tmb-20221231xex10d2012.jpg)

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## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

I, Robert Chmiel, certify that:

(1) I have reviewed this Annual Report on Form 10-K of GPB Automotive Portfolio, LP;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| March 28, 2023 | By: | /s/ Robert Chmiel |
|  |  | Robert Chmiel |
|  |  | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

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## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

I, Evan Cutler, certify that:

(1) I have reviewed this Annual Report on Form 10-K of GPB Automotive Portfolio, LP;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| March 28, 2023 | By: | /s/ Evan Cutler |
|  |  | Evan Cutler |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial and Accounting Officer) |

---

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## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT**

**TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the accompanying Annual Report on Form 10-K of GPB Automotive Portfolio, LP (the "Partnership") for the year ended December 31, 2022, as filed with the U.S. Securities and Exchange Commission (the "Report"), the undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge and belief, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

---

| | | |
|:---|:---|:---|
| March 28, 2023 | By: | /s/ Robert Chmiel |
|  |  | Robert Chmiel |
|  |  | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

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## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT**

**TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the accompanying Annual Report on Form 10-K of GPB Automotive Portfolio, LP (the "Partnership") for the year ended December 31, 2022, as filed with the U.S. Securities and Exchange Commission (the "Report"), the undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge and belief, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

---

| | | |
|:---|:---|:---|
| March 28, 2023 | By: | /s/ Evan Cutler |
|  |  | Evan Cutler |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial and Accounting Officer) |

---

------