case 13-13087-kg doc 984 filed 06/10/14 page 1 of 78

SOLICITATION VERSION

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

) In re: ) Chapter 11 ) FAH LIQUIDATING CORP., et al.,1 ) Case No. 13-13087 (KG) (f/k/a FISKER AUTOMOTIVE ) HOLDINGS, INC.) ) ) ) Debtors. ) (Jointly Administered) ) )

DISCLOSURE STATEMENT FOR THE DEBTORS’ SECOND AMENDED JOINT PLAN OF LIQUIDATION PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE

James H.M. Sprayregen, P.C. (admitted pro hac vice) Laura Davis Jones (DE Bar No. 2436) Anup Sathy, P.C. (admitted pro hac vice) James E. O’Neill (DE Bar No. 4042) Ryan Preston Dahl (admitted pro hac vice) Peter J. Keane (DE Bar No. 5503) KIRKLAND & ELLIS LLP PACHULSKI STANG ZIEHL & JONES LLP 300 North LaSalle 919 North Market Street, 17th Floor Chicago, Illinois 60654 P.O. Box 8705 Telephone: (312) 862-2000 Wilmington, Delaware 19899-8705 (Courier 19801) Facsimile: (312) 862-2200 Telephone: (302) 652-4100 Facsimile: (302) 652-4400 Counsel to the Debtors and Debtors in Possession

Dated: June 10, 2014

1 The Debtors, together with the last four digits of each Debtor’s federal tax identification number, are: FAH Liquidating

Corp. (f/k/a Fisker Automotive Holdings, Inc.) (9678); and FA Liquidating Corp. (f/k/a Fisker Automotive, Inc.) (9075). For the purpose of these chapter 11 cases, the service address for the Debtors is: 3080 Airway Avenue, Costa Mesa, California 92626.

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THE DEBTORS ARE PROVIDING THE INFORMATION IN THIS DISCLOSURE STATEMENT TO HOLDERS OF CLAIMS FOR PURPOSES OF SOLICITING VOTES TO ACCEPT OR REJECT THE DEBTORS’ SECOND AMENDED JOINT PLAN OF LIQUIDATION PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE. NOTHING IN THIS DISCLOSURE STATEMENT MAY BE RELIED UPON OR USED BY ANY ENTITY FOR ANY OTHER PURPOSE. PRIOR TO DECIDING WHETHER AND HOW TO VOTE ON THE PLAN, EACH HOLDER ENTITLED TO VOTE SHOULD CAREFULLY CONSIDER ALL OF THE INFORMATION IN THIS DISCLOSURE STATEMENT, INCLUDING THE RISK FACTORS DESCRIBED IN ARTICLE VIII HEREIN.

THE DEBTORS URGE EACH HOLDER OF A CLAIM OR AN INTEREST TO CONSULT WITH ITS OWN ADVISORS WITH RESPECT TO ANY LEGAL, FINANCIAL, SECURITIES, TAX, OR BUSINESS ADVICE IN REVIEWING THIS DISCLOSURE STATEMENT, THE PLAN, AND ALL OF THE ACTIONS NECESSARY TO EFFECTUATE THE PLAN. FURTHERMORE, THE BANKRUPTCY COURT’S APPROVAL OF THE ADEQUACY OF THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE THE BANKRUPTCY COURT’S APPROVAL OF THE PLAN.

THIS DISCLOSURE STATEMENT CONTAINS, AMONG OTHER THINGS, SUMMARIES OF THE PLAN, CERTAIN STATUTORY PROVISIONS, CERTAIN EVENTS IN THE DEBTORS’ CHAPTER 11 CASES, AND CERTAIN DOCUMENTS RELATED TO THE PLAN THAT MAY BE ATTACHED HERETO AND ARE INCORPORATED BY REFERENCE HEREIN. ALTHOUGH THE DEBTORS BELIEVE THAT THESE SUMMARIES ARE FAIR AND ACCURATE, THESE SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY TO THE EXTENT THAT THEY DO NOT SET FORTH THE ENTIRE TEXT OF SUCH DOCUMENTS OR STATUTORY PROVISIONS OR EVERY DETAIL OF SUCH EVENTS. IN THE EVENT OF ANY INCONSISTENCY OR DISCREPANCY BETWEEN A DESCRIPTION IN THIS DISCLOSURE STATEMENT AND THE TERMS AND PROVISIONS OF THE PLAN OR ANY OTHER DOCUMENTS INCORPORATED HEREIN BY REFERENCE, THE PLAN OR SUCH OTHER DOCUMENTS WILL GOVERN FOR ALL PURPOSES. FACTUAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT HAS BEEN PROVIDED BY THE DEBTORS’ MANAGEMENT EXCEPT WHERE OTHERWISE SPECIFICALLY NOTED. THE DEBTORS DO NOT REPRESENT OR WARRANT THAT THE INFORMATION CONTAINED HEREIN OR ATTACHED HERETO IS WITHOUT ANY MATERIAL INACCURACY OR OMISSION.

THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH SECTION 1125 OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE 3016(B) AND IS NOT NECESSARILY IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER SIMILAR LAWS.

THIS DISCLOSURE STATEMENT WAS NOT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE AUTHORITY AND NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE AUTHORITY HAVE PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DISCLOSURE STATEMENT OR UPON THE MERITS OF THE PLAN.

THIS DISCLOSURE STATEMENT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A AND SECTION 21E OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). SUCH STATEMENTS MAY CONTAIN WORDS SUCH AS “MAY,” “WILL,” “MIGHT,” “EXPECT,” “BELIEVE,” “ANTICIPATE,” “COULD,” “WOULD,” “ESTIMATE,” “CONTINUE,” “PURSUE,” OR THE NEGATIVE THEREOF OR COMPARABLE TERMINOLOGY, AND MAY INCLUDE, WITHOUT LIMITATION, INFORMATION REGARDING THE DEBTORS’ EXPECTATIONS WITH RESPECT TO FUTURE EVENTS. FORWARD-LOOKING STATEMENTS ARE INHERENTLY UNCERTAIN AND ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER FROM THOSE EXPRESSED OR IMPLIED IN THIS DISCLOSURE STATEMENT AND THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN. MAKING INVESTMENT DECISIONS BASED ON THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT AND/OR THE PLAN IS, THEREFORE, SPECULATIVE.

IN PREPARING THIS DISCLOSURE STATEMENT, THE DEBTORS RELIED ON FINANCIAL DATA DERIVED FROM THEIR BOOKS AND RECORDS OR THAT WAS OTHERWISE MADE


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AVAILABLE TO THEM AT THE TIME OF SUCH PREPARATION AND ON VARIOUS ASSUMPTIONS REGARDING THE DEBTORS’ BUSINESSES. ALTHOUGH THE DEBTORS BELIEVE THAT SUCH FINANCIAL INFORMATION FAIRLY REFLECTS THE FINANCIAL CONDITION OF THE DEBTORS AS OF THE DATE HEREOF AND THAT THE ASSUMPTIONS REGARDING FUTURE EVENTS REFLECT REASONABLE BUSINESS JUDGMENTS, NO REPRESENTATIONS OR WARRANTIES ARE MADE AS TO THE ACCURACY OF THE FINANCIAL INFORMATION CONTAINED HEREIN OR ASSUMPTIONS REGARDING THE DEBTORS’ BUSINESSES AND THEIR FUTURE RESULTS AND OPERATIONS. THE DEBTORS EXPRESSLY CAUTION READERS NOT TO PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.

THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE, AND MAY NOT BE CONSTRUED AS, AN ADMISSION OF FACT, LIABILITY, STIPULATION, OR WAIVER. THE DEBTORS OR THE LIQUIDATION TRUSTEE MAY SEEK TO INVESTIGATE, FILE, AND PROSECUTE CLAIMS AND MAY OBJECT TO CLAIMS AFTER THE CONFIRMATION OR EFFECTIVE DATE OF THE PLAN IRRESPECTIVE OF WHETHER THIS DISCLOSURE STATEMENT IDENTIFIES ANY SUCH CLAIMS OR OBJECTIONS TO CLAIMS.

THE DEBTORS ARE MAKING THE STATEMENTS AND PROVIDING THE FINANCIAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT AS OF THE DATE HEREOF, UNLESS OTHERWISE SPECIFICALLY NOTED. ALTHOUGH THE DEBTORS MAY SUBSEQUENTLY UPDATE THE INFORMATION IN THIS DISCLOSURE STATEMENT, THE DEBTORS HAVE NO AFFIRMATIVE DUTY TO DO SO, AND EXPRESSLY DISCLAIM ANY DUTY TO PUBLICLY UPDATE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS, OR OTHERWISE. HOLDERS OF CLAIMS AND INTERESTS REVIEWING THIS DISCLOSURE STATEMENT SHOULD NOT INFER THAT, AT THE TIME OF THEIR REVIEW, THE FACTS SET FORTH HEREIN HAVE NOT CHANGED SINCE THIS DISCLOSURE STATEMENT WAS FILED. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. THE DEBTORS RESERVE THE RIGHT TO FILE AN AMENDED PLAN AND RELATED AMENDED DISCLOSURE STATEMENT FROM TIME TO TIME, SUBJECT TO THE TERMS OF THE PLAN.

CONFIRMATION AND CONSUMMATION OF THE PLAN ARE SUBJECT TO CERTAIN MATERIAL CONDITIONS PRECEDENT DESCRIBED IN ARTICLE IX OF THE PLAN. THERE IS NO ASSURANCE THAT THE PLAN WILL BE CONFIRMED OR, IF CONFIRMED, THAT SUCH MATERIAL CONDITIONS PRECEDENT WILL BE SATISFIED OR WAIVED. YOU ARE ENCOURAGED TO READ THIS DISCLOSURE STATEMENT IN ITS ENTIRETY, INCLUDING BUT NOT LIMITED TO THE PLAN AND ARTICLE VIII OF THIS DISCLOSURE STATEMENT ENTITLED “RISK FACTORS,” BEFORE SUBMITTING YOUR BALLOT TO VOTE TO ACCEPT OR REJECT THE PLAN.

THE DEBTORS HAVE NOT AUTHORIZED ANY ENTITY TO GIVE ANY INFORMATION ABOUT OR CONCERNING THE PLAN OTHER THAN THAT WHICH IS CONTAINED IN THIS DISCLOSURE STATEMENT. THE DEBTORS HAVE NOT AUTHORIZED ANY REPRESENTATIONS CONCERNING THE DEBTORS OR THE VALUE OF THEIR PROPERTY OTHER THAN AS SET FORTH IN THIS DISCLOSURE STATEMENT.

IF THE PLAN IS CONFIRMED BY THE BANKRUPTCY COURT AND THE EFFECTIVE DATE OCCURS, ALL HOLDERS OF CLAIMS AND INTERESTS (INCLUDING THOSE HOLDERS OF CLAIMS OR INTERESTS WHO DO NOT SUBMIT BALLOTS TO ACCEPT OR REJECT THE PLAN, OR WHO ARE NOT ENTITLED TO VOTE ON THE PLAN) WILL BE BOUND BY THE TERMS OF THE PLAN AND ANY TRANSACTIONS CONTEMPLATED THEREBY.

THE DEBTORS AND THE COMMITTEE SUPPORT CONFIRMATION OF THE PLAN AND URGE ALL HOLDERS OF CLAIMS WHOSE VOTES ARE BEING SOLICITED TO ACCEPT THE PLAN.


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TABLE OF CONTENTS

Page

ARTICLE I. INTRODUCTION ................................................................................................................................. 1

ARTICLE II. TREATMENT OF CLAIMS AND INTERESTS ............................................................................. 4

ARTICLE III. SOLICITATION AND VOTING PROCEDURES ......................................................................... 6 A. Solicitation Packages. ....................................................................................................................... 6 B. Voting Rights. ................................................................................................................................... 7 C. Voting Deadline. ............................................................................................................................... 7 D. Voting Procedures. ............................................................................................................................ 7 E. Plan Objection Deadline. .................................................................................................................. 8 F. Confirmation Hearing. ...................................................................................................................... 8

ARTICLE IV. THE DEBTORS’ BACKGROUND .................................................................................................. 8 A. Overview of the Debtors’ Corporate History and Business Operations. ........................................... 8 B. Overview of the Debtors’ Prepetition Capital Structure. ................................................................ 11 C. Pending Litigation Proceedings. ..................................................................................................... 13 D. The Debtors’ Board of Directors and Executives. .......................................................................... 14 E. Events Leading to the Chapter 11 Cases. ........................................................................................ 14

ARTICLE V. EVENTS OF THE CHAPTER 11 CASES ...................................................................................... 17 A. First Day Pleadings and Other Case Matters. ................................................................................. 17 B. Claims Bar Date. ............................................................................................................................. 19 C. Pending Litigation Proceedings. ..................................................................................................... 20 D. WARN Proceeding. ........................................................................................................................ 20 E. The Committee’s Standing Motion. ................................................................................................ 20 F. The Debtors’ Prior Solicitation Process. ......................................................................................... 20 G. Credit Bid Decision and Appeal. .................................................................................................... 21 H. The Sale and Auction Process. ........................................................................................................ 21 I. The Wanxiang DIP Facility; Sale Transaction Closing .................................................................. 21 J. Debtors’ Investigation; Global Settlement. ..................................................................................... 22 K. The Committee’s Emergency Motion to Terminate Exclusivity. .................................................... 22 L. Wanxiang’s Alleged Reimbursement Rights. ................................................................................. 23 M. The Securities Actions. ................................................................................................................... 23

ARTICLE VI. SUMMARY OF THE PLAN ........................................................................................................... 24 A. Administrative Claims, Priority Tax Claims, DIP Facility Claims, and Professional Fee

Claims. ............................................................................................................................................ 24 B. Classification and Treatment of Claims and Interests. .................................................................... 26 C. Means for Implementation of the Plan. ........................................................................................... 31 D. Treatment of Executory Contracts and Unexpired Leases. ............................................................. 35 E. Provisions Governing Distributions. ............................................................................................... 38 F. The Liquidating Trust and the Liquidating Trustee. ....................................................................... 42 G. Procedures for Resolving Contingent, Unliquidated, and Disputed Claims and Interests. ............. 46 H. Settlement, Release, Injunction, and Related Provisions. ............................................................... 48 I. Substantial Consummation of the Plan. .......................................................................................... 52 J. Modification, Revocation, or Withdrawal of the Plan. ................................................................... 53 K. Retention of Jurisdiction. ................................................................................................................ 54 L. Miscellaneous Provisions. ............................................................................................................... 56

ARTICLE VII. STATUTORY REQUIREMENTS FOR CONFIRMATION OF THE PLAN ......................... 59 A. Confirmation Hearing. .................................................................................................................... 59 B. Confirmation Standards. ................................................................................................................. 60


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C. Alternative Plans. ............................................................................................................................ 61 D. Acceptance by Impaired Classes. .................................................................................................... 61 E. Confirmation Without Acceptance by All Impaired Classes. ......................................................... 62

ARTICLE VIII. CERTAIN RISK FACTORS TO BE CONSIDERED BEFORE VOTING ............................. 63 A. Risk Factors that May Affect Recovery Available to Holders of Allowed Claims and

Allowed Interests Under the Plan. .................................................................................................. 63 B. Certain Bankruptcy Law Considerations. ....................................................................................... 64 C. Disclosure Statement Disclaimer. ................................................................................................... 66 D. Liquidation Under Chapter 7. ......................................................................................................... 67

ARTICLE IX. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES ........................ 67 A. Certain United States Federal Income Tax Consequences to Holders of Allowed Claims ............. 68 B. Certain United States Federal Income Tax Consequences to the Debtors. ..................................... 70

ARTICLE X. RECOMMENDATION OF THE DEBTORS ................................................................................. 72


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EXHIBITS

EXHIBIT A Debtors’ Second Amended Joint Plan of Liquidation Pursuant to Chapter 11 of the Bankruptcy Code.

EXHIBIT B Debtors’ Corporate Structure as of the Petition Date.

EXHIBIT C Asset Purchase Agreement by and Among Fisker Automotive Holdings, Inc. and Fisker Automotive, Inc. as Sellers and Wanxiang America Corporation as Buyer (as amended by Amendment No. 1 to Asset Purchase Agreement and Amendment No. 2 to Asset Purchase Agreement)

EXHIBIT D Limited Liability Company Agreement for Wanxiang Automotive Acquisition Company LLC

EXHIBIT E Plan Settlement Term Sheet


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ARTICLE I. INTRODUCTION

This disclosure statement (this “Disclosure Statement”) provides information regarding the Debtors’ Second Amended Joint Plan of Liquidation Pursuant to Chapter 11 of the Bankruptcy Code (the “Plan”), which the Debtors are seeking to have confirmed by the Bankruptcy Court.1 A copy of the Plan is attached hereto as Exhibit A. The rules of interpretation set forth in Article I.B of the Plan shall govern the interpretation of this Disclosure Statement.

The Debtors’ board of directors has approved the Plan and believes the Plan is in the best interests of the Debtors’ Estates. As such, the Debtors recommend that all Holders of Claims entitled to vote accept the Plan by returning their ballots (each, a “Ballot”) so as to be actually received by the Notice and Claims Agent no later than July 16, 2014, at 4:00 p.m. (prevailing Eastern Time). Assuming the requisite acceptances to the Plan are obtained, the Debtors will seek the Bankruptcy Court’s approval of the Plan at the Confirmation Hearing.

The Debtors are a privately held enterprise. The Debtors were founded in 2007 with the goal of designing, assembling, and manufacturing premium plug-in hybrid electric vehicles (“PHEVs”). In April 2010, to facilitate these efforts, the Debtors entered into the Senior Loan Agreement with the United States Department of Energy (“DOE”), whereby DOE arranged for the Federal Financing Bank to make loans to the Debtors in an aggregate amount of up to approximately $530 million pursuant to the Advanced Technology Vehicles Manufacturing Incentive Program.2 Before the Petition Date, the Debtors drew a total of approximately $192 million pursuant to the Senior Loan Agreement, of which approximately $168.5 million remained outstanding as of the Petition Date. As described more fully below, on November 22, 2013, Hybrid Technology, LLC (together with its affiliate Hybrid Tech Holdings, LLC, “Hybrid”) purchased DOE’s interest in this Senior Loan (the “Senior Loan Purchase”) and succeeded to DOE’s position as the Debtors’ senior secured lender.

As more fully described below, the Debtors Filed for bankruptcy protection on the Petition Date. At the same time, the Debtors Filed a motion [Docket No. 13] (the “Sale Motion”) seeking, among other things, entry of an order by the Bankruptcy Court approving the sale of the Acquired Assets to Hybrid on the terms and conditions set forth in a purchase agreement annexed as Exhibit 1 to Exhibit B to the Sale Motion. Following a hearing before the Bankruptcy Court on January 10, 2014, the Debtors undertook a sale and auction process for the Acquired Assets and the Bankruptcy Court entered an order [Docket No. 508] (the “Bidding Procedures Order”) authorizing the Debtors to proceed with that process. See Jan. 10, 2014 Hr’g Tr. 135–138; see also Bidding Procedures Order ¶¶ 7, 25; Memorandum Opinion [Docket No. 483].

The Bidding Procedures Order established both Hybrid and Wanxiang America Corporation (“Wanxiang” or the “Purchaser”) as stalking horse bidders and established certain procedures to govern the Debtors’ bidding, auction, and sale process (the “Bidding Procedures”). The Debtors conducted an auction (the “Auction”) of the Acquired Assets from February 12, 2014 through February 14, 2014. At the conclusion of the Auction, the Debtors and the Committee jointly determined, in accordance with the Bidding Procedures Order, that the transaction contemplated by Wanxiang’s final bid was the highest and best bid at the Auction proposing a transaction valued at approximately $149.2 million. The Debtors and Wanxiang memorialized the terms of Wanxiang’s successful bid in the Purchase Agreement attached hereto as Exhibit C, which consists of, among other things, (a) $126.2 million in cash; (b) $8 million of assumed liabilities arising from Administrative and Priority Claims against the Debtors’ estates other than Claims arising from the Hybrid DIP Facility; and (c) Wanxiang’s contribution of a 20% equity

1 Unless otherwise specified herein, all capitalized terms used but not otherwise defined herein shall have the meaning set

forth in the Plan.

2 The Advanced Technology Vehicles Manufacturing Incentive Program was promulgated under section 136 of the Energy Independence and Security Act of 2007, Pub. L. 110–140, 121 Stat. 1492, 42 U.S.C. § 17013.


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interest in a Wanxiang affiliate ultimately designated to acquire the Debtors’ assets on the terms and conditions set forth in the LLC Agreement attached hereto as Exhibit D.

On February 18, 2014, the Bankruptcy Court held a hearing (the “Sale Hearing”) to consider the Debtors’ proposed sale of the Acquired Assets to Wanxiang. On February 19, 2014, the Bankruptcy Court entered an order [Docket No. 653] (the “Sale Order”) approving the Sale Transaction pursuant to the terms of the Purchase Agreement. The Debtors and Wanxiang diligently worked to close the Sale Transaction, and the Sale Transaction was consummated on March 24, 2014 [Docket No. 739].

At that time, the allocation of proceeds from the sale transaction was subject to material dispute among the Debtors, Hybrid, and the Committee. In particular, the parties had substantial disagreement with respect to the validity and perfection of liens securing certain inventory located outside the United States, the validity and perfection of liens securing intellectual property registered outside of the United States, and the value associated with such assets, as well as rights to adequate protection arising from the Hybrid DIP Order. Following the Sale Transaction, the Debtors therefore faced the material prospect of substantial litigation—with its associated expense, cost, and risk—among the Committee and Hybrid concerning the allocation of the Sale Proceeds.

The Debtors, the Committee, and Hybrid subsequently engaged in extensive, good-faith, arm’s-length negotiations to resolve their respective positions. These efforts were ultimately a success, and were initially memorialized in the Plan Settlement Term Sheet executed on April 11, 2014 and filed with the Bankruptcy Court at [Docket No. 774], attached hereto as Exhibit E. The Plan Settlement Term Sheet has been implemented through the Debtors’ Plan that the Debtors have now filed for approval and confirmation by the Bankruptcy Court with the support of both the Committee and Hybrid. Among other things, the terms of the global settlement and compromise between the Debtors, the Committee, and Hybrid, as more fully set forth in the Plan, includes: (1) the contribution of $20 million and 100% of the Equity Consideration to the Liquidating Trust for the benefit of the Debtors’ general unsecured creditors;3 (2) Hybrid’s commitment to fund, from its recovery, any Administrative and Priority Claims to the extent they exceed the $8 million that Wanxiang paid to satisfy such claims as part of the Sale Transaction; provided that if Administrative and Priority Claims are less than $8 million, Hybrid’s recovery will be increased by the difference; and (3) mutual releases among the parties.

Wanxiang believes that the consideration which the Liquidating Trust is entitled to receive under the Plan Settlement Term Sheet is subject to Wanxiang’s rights of reimbursement under Section 7.4 of the Purchase Agreement, which entitles Wanxiang to certain reimbursements from the proceeds realized from the Designated Causes of Action (as such term is defined in the Purchase Agreement). Wanxiang believes that a substantial portion of the $20 million in cash that the Liquidating Trust is entitled to receive under the Plan Settlement Term Sheet (the “Liquidating Trust Cash Payment”) constitutes proceeds realized from the Designated Causes of Action. Wanxiang asserts that the Committee disputes Wanxiang’s interpretation of Section 7.4 of the Purchase Agreement and believes that no portion of the Liquidating Trust Cash Payment constitutes proceeds realized from any Designated Causes of Action. Wanxiang and the Committee have engaged in good faith, arm’s-length negotiations in an effort to resolve their respective positions, but no resolution has been reached at this time. If such negotiations do not result in a settlement on Wanxiang’s position prior to the confirmation of the Plan, Wanxiang has said that it will argue that a portion of the Liquidating Trust Cash Payment must be escrowed or reserved by the Liquidating Trust until the dispute over the interpretation of Section 7.4 of the Purchase Agreement is settled between Wanxiang and the Liquidating Trust or adjudicated by the Bankruptcy Court. If Wanxiang ultimately prevails in its position, Wanxiang believes that any portion of the Liquidating Trust Cash Payment that is distributed to Wanxiang may not

3 Hybrid will not receive any distribution from these assets on account of any Senior Loan Claims or Related Party Note

Claims that it holds. Additionally, while the Debtors believe Hybrid’s agreement to cause the Equity Consideration to be contributed to the Liquidating Trust is a material component of the global settlement and compromise, the value of such Equity Consideration is necessarily speculative, and the Debtors believe it could potentially be zero. Accordingly, the calculations of estimated recoveries set forth in the table in Article II hereof do not reflect the value, if any, that may be attributable to the Equity Consideration.


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be available for distribution to creditors under the Plan and may otherwise reduce recoveries on account of Allowed General Unsecured Claims. Additionally, distributions to Holders of Allowed General Unsecured Claims could be delayed pending resolution of this dispute if such consideration had to be set aside or held in reserve.

The Committee believes that the global settlement between the Debtors, the Committee, and Hybrid was driven entirely or primarily by the value of unsecured creditors’ rights in the Debtors’ property located in Finland and governed by the Finnish Act on Priorities of Payment, which provides that, after the claims of parties holding outright pledges to such property, as well as the rights of lienholders, have been satisfied, fifty percent (50%) of the sales proceeds of such property are distributed to the holders of Finnish business mortgages (such as Hybrid, here), and the remaining fifty percent (50%) to unsecured creditors. The Committee believes that Designated Causes of Action (as such term is defined in the Purchase Agreement) represent little or no portion of the compromise of the dispute over the allocation of proceeds from the sale of the Debtors’ assets. Notwithstanding these beliefs, the Committee further believes that, pursuant to an agreement with the Committee on April 3, 2014, Wanxiang waived any and all rights to participate in the global settlement, including the right to receive any portion of the Liquidating Trust’s settlement consideration on account of Designated Causes of Action as set forth in Section 7.4 of the Purchase Agreement. Additionally, if Wanxiang is entitled to any portion of the Liquidating Trust’s settlement consideration pursuant to Section 7.4 of the Purchase Agreement, the Committee believes that the Liquidating Trust may satisfy such obligation with the payment or provision of any combination of cash, Equity Consideration, and other rights received as settlement consideration.

The Debtors believe that the Plan is in the best interest of the Debtors’ Estates, and therefore seek to confirm the Plan. The Plan provides for the implementation of the Liquidating Trust that will undertake the liquidation of the Debtors’ Estates and administer the distribution of the Debtors’ remaining assets and Sale Proceeds to the Debtors’ creditors and stakeholders. Additionally, the Plan implements the Debtors’ global compromise and settlement with Hybrid and the Committee. Accordingly, confirmation of the Plan will avoid the lengthy delay and significant cost—both of which would likely result in reduced stakeholder recoveries—that the Debtors believe litigation among Hybrid and the Committee would entail. Additionally, in the event that Hybrid prevailed, such litigation also posed significant risk to the potential recoveries of the Debtors’ General Unsecured Creditors and the successful resolution of these chapter 11 cases. Specifically, if Hybrid were successful, General Unsecured Creditors would likely receive no recovery on account of their Claims, and the Debtors’ Estates would likely be rendered administratively insolvent.

Before soliciting acceptances of a proposed plan, section 1125 of the Bankruptcy Code requires a plan proponent to prepare a written disclosure statement containing information of a kind, and in sufficient detail, to enable a hypothetical reasonable investor to make an informed judgment regarding acceptance of a chapter 11 plan. The Debtors submit this Disclosure Statement in accordance with such requirements. This Disclosure Statement includes, without limitation, information about:

the Debtors’ corporate history and corporate structure, prior business operations, and prepetition capital structure and indebtedness (Article IV hereof);

the events leading to the Chapter 11 Cases (Article IV hereof);

the significant pleadings Filed in the Chapter 11 Cases and certain relief granted by the Bankruptcy Court in connection therewith (Article V hereof);

the classification and treatment of Claims and Interests under the Plan, including the Holders of Claims entitled to vote and the procedures for voting on the Plan (Article VI hereof);

the method of distribution of any recoveries that may be available to certain Holders of Claims pursuant to the Plan, the process for resolving Disputed Claims, and other significant aspects of the Plan (Article VI hereof);

the releases contemplated by the Plan that are integral to the overall settlement of Claims pursuant to the Plan (Article VI hereof);

the statutory requirements for confirming the Plan (Article VII hereof);


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certain risk factors that Holders of Claims should consider before voting to accept or reject the Plan and information regarding alternatives to Confirmation of the Plan (Article VIII hereof); and

certain United States federal income tax consequences of the Plan (Article IX hereof).

In light of the foregoing, the Debtors believe this Disclosure Statement contains “adequate information” to enable a hypothetical reasonable investor to make an informed judgment about the Plan and complies with all aspects of section 1125 of the Bankruptcy Code.

The Plan and all documents to be executed, delivered, assumed, and/or performed in connection with the Consummation of the Plan, including the documents to be included in the Plan Supplement, are subject to revision and modification from time to time prior to the Effective Date (subject to the terms of the Plan).

ARTICLE II. TREATMENT OF CLAIMS AND INTERESTS

As set forth in Article III of the Plan and in accordance with sections 1122 and 1123(a)(1) of the Bankruptcy Code, all Claims and Interests (other than Administrative Claims, Priority Tax Claims, DIP Facility Claims, and Professional Fee Claims, which are unclassified Claims under the Plan) are classified into Classes for all purposes, including voting, Confirmation, and distributions pursuant to the Plan. A Claim or Interest is classified in a particular Class only to the extent that the Claim or Interest qualifies within the description of that Class. A Claim or Interest is also classified in a particular Class for the purpose of receiving distributions pursuant to the Plan only to the extent that such Claim or Interest is an Allowed Claim or Allowed Interest in that Class and has not been paid, released, or otherwise satisfied prior to the Effective Date.

The table below summarizes the treatment of all unclassified Claims under the Plan. The treatment and the projected recoveries of unclassified Claims are described in summary form below for illustrative purposes only. To the extent that any inconsistency exists between the summary contained in this Disclosure Statement and the Plan, the terms of the Plan shall govern.

Unclassified Claim Plan Treatment Estimated Allowed Claims Estimated Percent

Recovery Under the Plan

Administrative Claims Unimpaired $50,000–$250,000 100%

Priority Tax Claims Unimpaired $350,000–$500,000 100%

DIP Facility Claims Unimpaired $0 N/A4

Professional Fee Claims5 Unimpaired $3,200,000 100%

The table below summarizes the classification and treatment of all classified Claims and Interests against each Debtor (as applicable) under the Plan. The classification, treatment, and the projected recoveries of classified Claims are described in summary form below for illustrative purposes only, and are subject to material change. In particular, and as discussed in greater detail herein, the calculation of the estimated recoveries in the table below do not reflect the value, if any, that may be attributable to the Equity Consideration. Additionally, recoveries available to the Holders of General Unsecured Claims are estimates and actual recoveries may materially

4 Each of the Debtors’ DIP Facilities were paid in full upon consummation of the Debtors’ Sale Transaction with Wanxiang

and in accordance with applicable orders of the Court. The Debtors have continued to separately classify DIP Facility Claims pursuant to the Plan out of an abundance of caution.

5 The Professional Fee Claims set forth herein and in the Plan constitute the estimated Professional Fee Claims that remain unpaid or that have not been funded into the applicable professional fee escrow as of a hypothetical July 15, 2014 Effective Date, and this estimate is nonbinding and is subject to material revision.


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differ based on, among other things, whether the amount of Claims actually Allowed against the applicable Debtor exceed the estimates provided below. In such an instance, the recoveries available to the Holders of General Unsecured Claims could be materially lower when compared to the estimates provided below. To the extent that any inconsistency exists between the summaries contained in this Disclosure Statement and the Plan, the terms of the Plan shall govern.

Class Type of Claim or Interest Plan Treatment Estimated Allowed Claims or Interests

Estimated Percent Recovery Under the Plan

1 (all Debtors)

Other Priority Claims Unimpaired $600,000–$750,0006 100%

2 (all Debtors)

Senior Loan Claims Impaired $168,485,144.99 60%–66%

3 (all Debtors)

Other Secured Claims Unimpaired $07 100%

4 (all Debtors)

SVB Loan Secured Claims Impaired $350,000 100%

5A (Holdings)

General Unsecured Claims against Holdings

Impaired $0 N/A

5B (Fisker Automotive)

General Unsecured Claims against Fisker Automotive

Impaired $75,000,000–$250,000,000 8%–26.7%8

6 As discussed in greater detail in Article V.D hereof, the plaintiffs in the WARN Adversary Proceeding assert claims of

approximately $3.8 million, and assert that approximately $1.9 million is entitled to priority status. Because the Debtors believe such claims are without merit, the Debtors have ascribed zero value to such claims for purposes of the estimates set forth herein.

7 Pursuant to the Sale Transaction, substantially all of the Debtors’ assets were sold to the Purchaser subject to existing security interests that were senior to liens securing the Senior Loan. Therefore, prepetition creditors may no longer have recourse to the Debtors’ assets with respect to such Claims, and therefore do not hold Other Secured Claims. In the event that the collateral securing any Other Secured Claim is still owned by the Debtors, in all likelihood the Liquidating Trust will surrender such collateral in full satisfaction of such Other Secured Claim.

8 As noted above, Wanxiang believes that the consideration which the Liquidating Trust is entitled to receive under the Plan Settlement Term Sheet, including a substantial portion of the $20 million Liquidating Trust Cash Payment, is subject to Wanxiang’s rights of reimbursement under Section 7.4 of the Purchase Agreement. Wanxiang asserts that the Committee disputes Wanxiang’s interpretation of the Purchase Agreement, and believes that no portion of the Liquidating Trust Cash Payment is subject to Wanxiang’s reimbursement rights. This dispute could delay distributions to creditors if such consideration had to be set aside or held in reserve pending the resolution of this dispute. Moreover, if Wanxiang ultimately prevails in its position, Wanxiang believes that any portion of the Liquidating Trust Cash Payment that is distributed to Wanxiang would reduce recoveries on account of Allowed General Unsecured Claims.



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Class Type of Claim or Interest Plan Treatment Estimated Allowed Claims or Interests

Estimated Percent Recovery Under the Plan

6 (all Debtors)

Warranty Claims Impaired $7,000,000–$8,000,000 8%–26.7%

7 (all Debtors)

Intercompany Claims Impaired N/A 0%

8 (all Debtors)

Section 510(b) Claims Impaired N/A 0%

9 (all Debtors)

Intercompany Interests Impaired N/A 0%

10 (all Debtors)

Holdings Interests Impaired N/A 0%

ARTICLE III. SOLICITATION AND VOTING PROCEDURES

A. Solicitation Packages.

On April 30, 2014, the Debtors Filed a motion seeking entry of a proposed Disclosure Statement Order. For purposes of this Article III hereof, capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Disclosure Statement Order. Pursuant to the Disclosure Statement Order, Holders of Claims who are entitled to vote to accept or reject the Plan as of June 9, 2014 (the “Voting Record Date”), will receive appropriate solicitation materials (the “Solicitation Package”). The Solicitation Package may also be obtained: (a) from the Notice and Claims Agent by (i) visiting http://www.omnimgt.com/fiskerautomotive; (ii) writing to FA Liquidating Corp. (f/k/a Fisker Automotive, Inc.), c/o Rust Consulting/Omni Bankruptcy, 5955 DeSoto Ave., Suite 100, Woodland Hills, California 91367; or (iii) calling 1.866.989.3043; or (b) for a fee via PACER (except for Ballots) at http://www.deb.uscourts.gov.

Pursuant to the Disclosure Statement Order, the Solicitation Package will include the following materials:

the Disclosure Statement, as approved by the Bankruptcy Court (with all exhibits thereto, including the Plan and the exhibits to the Plan, if any);

the Solicitation Procedures;

notice of the Confirmation Hearing (the “Confirmation Hearing Notice”);

a cover letter from the Debtors: (a) describing the contents of the Solicitation Package; and (b) urging the Holders of Claims in each of the Voting Classes (as defined herein) to vote to accept the Plan;

a letter from the Committee to Holders of General Unsecured Claims, substantially in the form attached as Exhibit 3-B to the Disclosure Statement Order;

the appropriate Ballot with voting instructions with respect thereto, together with a pre-addressed, postage prepaid return envelope;

with respect to each Solicitation Package to be distributed to a Holder of Claims in Class 6, a Warranty Claimants Election Form; and

any supplemental documents the Debtors may File with the Bankruptcy Court or that the Bankruptcy Court orders to be made available.


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Certain Holders of Claims may not be entitled to vote because they are Unimpaired or are otherwise presumed to accept the Plan under section 1126(f) of the Bankruptcy Code. In addition, certain Holders of Claims may be Impaired but are receiving no distribution under the Plan, and are therefore deemed to reject the Plan and are not entitled to vote. Such Holders will receive only the Confirmation Hearing Notice and a non-voting status notice.

B. Voting Rights.

The Disclosure Statement Order also established the Voting Record Date for purposes of determining, among other things, which Holders of Claims and Interests are eligible to vote on the Plan. The Debtors are only distributing a Solicitation Package, including this Disclosure Statement and a Ballot to be used for voting to accept or reject the Plan, to the Holders of Claims or Interests entitled to vote to accept or reject the Plan as of the Voting Record Date. If, as of the Voting Record Date, you are a Holder of a Claim in Class 2 (Senior Loan Claims), Class 4 (SVB Loan Secured Claims), Class 5A (General Unsecured Claims against Holdings), Class 5B (General Unsecured Claims against Fisker Automotive), or Class 6 (Warranty Claims) (collectively, the “Voting Classes”), you may vote to accept or reject the Plan in accordance with the Solicitation Procedures by completing the Ballot and returning it in the envelopes provided. If your Claim or Interest is not included in one of these Voting Classes, you are not entitled to vote and you will not receive a Solicitation Package.

Each Class of Claims entitled to vote on the Plan will have accepted the Plan if: (a) the Holders of at least two-thirds in dollar amount of the Allowed Claims actually voting in each Class for each Debtor, as applicable, vote to accept the Plan; and (b) the Holders of more than one-half in number of the Allowed Claims actually voting in each Class for each Debtor, as applicable, vote to accept the Plan.

C. Voting Deadline.

The Disclosure Statement Order established a deadline to vote on the Plan of July 16, 2014, at 4:00 p.m., prevailing Eastern Time (the “Voting Deadline”). To be counted as a vote to accept or reject the Plan, a Ballot must be properly executed, completed, and delivered, whether by first class mail, overnight delivery, or personal delivery, so that the Ballot is actually received by the Notice and Claims Agent no later than the Voting Deadline.

D. Voting Procedures.

The Debtors have retained Rust Consulting/Omni Bankruptcy to serve as the Notice and Claims Agent. The Notice and Claims Agent is available to answer questions, provide additional copies of all materials, oversee the voting process, and process and tabulate Ballots for each Class entitled to vote to accept or reject the Plan.

BALLOTS

To be counted, all Ballots must be actually received by the Notice and Claims Agent by the Voting Deadline, which is July 16, 2014,

at 4:00 p.m., prevailing Eastern Time, at the following address:

FA Liquidating Corp. (f/k/a Fisker Automotive, Inc.) c/o Rust Consulting/Omni Bankruptcy

5955 DeSoto Ave., Suite 100 Woodland Hills, California 91367

If you have any questions on the procedure for voting on the Plan, please call the Debtors’ restructuring hotline maintained by the

Notice and Claims Agent at:

1.866.989.3043


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More detailed instructions regarding the procedures for voting on the Plan are contained on the Ballots distributed to Holders of Claims that are entitled to vote to accept or reject the Plan. All votes to accept or reject the Plan must be cast by using the appropriate Ballot. All Ballots must be properly executed, completed, and delivered according to their applicable voting instructions by: (a) first class mail, in the return envelope provided with each Ballot; (b) overnight delivery; or (c) personal delivery, so that the Ballots are actually received by the Notice and Claims Agent no later than the Voting Deadline at the return address set forth in the applicable Ballot. Any Ballot that is properly executed by the Holder of a Claim entitled to vote that does not clearly indicate an acceptance or rejection of the Plan or that indicates both an acceptance and a rejection of the Plan will not be counted. Ballots received by facsimile or by electronic means will not be counted.

Each Holder of a Claim entitled to vote to accept or reject the Plan may cast only one Ballot for each Claim held by such Holder. By signing and returning a Ballot, each Holder of a Claim entitled to vote will certify to the Bankruptcy Court and the Debtors that no other Ballots with respect to such Claim have been cast or, if any other Ballots have been cast with respect to such Claim, such earlier Ballots are superseded and revoked.

All Ballots will be accompanied by postage prepaid return envelopes. It is important to follow the specific instructions provided on each Ballot, as failing to do so may result in your Ballot not being counted.

E. Plan Objection Deadline.

The Disclosure Statement Order established July 16, 2014, at 4:00 p.m., prevailing Eastern Time, as the deadline to object to the Confirmation of the Plan (the “Plan Objection Deadline”). All objections to the Plan must be Filed with the Bankruptcy Court and served on the Debtors and certain other parties in interest in accordance with the Disclosure Statement Order and Solicitation Procedures so that they are actually received on or before the Plan Objection Deadline. The Debtors believe that the Plan Objection Deadline affords the Bankruptcy Court, the Debtors, and other parties in interest reasonable time to consider any objections to the Plan before the Confirmation Hearing.

F. Confirmation Hearing.

Assuming the requisite acceptances are obtained for the Plan, the Debtors intend to seek Confirmation of the Plan at the Confirmation Hearing. The Disclosure Statement Order scheduled the Confirmation Hearing to commence on July 28, 2014, at 10:00 a.m., prevailing Eastern Time, before the Honorable Kevin Gross, United States Bankruptcy Judge, in Courtroom No. 3 of the United States Bankruptcy Court for the District of Delaware, 824 North Market Street, 6th Floor, Wilmington, Delaware 19801. The Confirmation Hearing may be continued from time to time without further notice other than an adjournment announced in open court or a notice of adjournment Filed with the Bankruptcy Court and served on the entities who have Filed objections to the Plan, without further notice to other parties in interest. The Bankruptcy Court, in its discretion and before the Confirmation Hearing, may put in place additional procedures governing the Confirmation Hearing. The Plan may be modified, if necessary, before, during, or as a result of the Confirmation Hearing, without further notice to parties in interest.

ARTICLE IV. THE DEBTORS’ BACKGROUND

A. Overview of the Debtors’ Corporate History and Business Operations.

1. The Debtors’ History and Operations.

The Debtors were formed in 2007 with the goal of designing, engineering, and manufacturing premium plug-in hybrid electric vehicles (“PHEVs”). To this end, the Debtors developed an electric vehicle with extended range, which they trademarked as “EVer.” The Debtors established an international reputation as a leading developer of premium extended range PHEVs. The Debtors’ Karma sedan is the world’s first environmentally responsible luxury PHEV, and was developed by a highly skilled team of automotive designers and engineers located in the United States. The Karma sedan was also the centerpiece of the Debtors’ operations and won awards


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for excellence, innovation, and environmental responsibility from Time magazine (identifying the Karma as one of the “Green Design 100” in 2009), Top Gear Magazine (identifying the Karma as “Luxury Car of the Year” in 2011), and Automobile Magazine (identifying the Karma as “Design of the Year” in 2012).

The Karma sedans were formerly assembled by Valmet Automotive, Inc. (“Valmet”) in Uusikaupunki, Finland. The Debtors planned, however, to build future vehicles at a company-owned and -operated assembly facility in the United States to improve volumes and to leverage their design, engineering, and technical expertise.

To that end, in July 2010, the Debtors acquired a manufacturing facility covering approximately 3.2 million square feet located on approximately 142 acres at 801 Boxwood Road, Wilmington, Delaware (the “Delaware Facility”). The Debtors purchased the Delaware Facility through the General Motors bankruptcy proceedings for a cash purchase price of approximately $21 million. The Delaware Facility is equipped with a number of technical and utility systems for automotive manufacturing, including a paint facility, powerhouse capability, a conveyor system, a wastewater treatment facility, and an emissions abatement system. Due to the events and circumstances described herein, the Debtors never conducted active operations at the Delaware Facility.

The Debtors formerly obtained components and systems for the Karma’s assembly through a number of third-party supply relationships. For example, the Debtors had a licensing and tool use agreement with a General Motors affiliate. Through this relationship, the Debtors were able to purchase parts and components directly from suppliers that also sold to General Motors and use General Motors tooling to manufacture other parts or components. In addition, the Debtors relied on a number of “single source” suppliers for particular components. One such “single source” supplier was A123 Systems, Inc.9 (“A123”), with whom the Debtors contracted in January 2010, to act as the exclusive manufacturer of the Karma sedan’s high-voltage battery pack, as discussed more fully below.

The Debtors began delivering the Karma sedan for sale to the general public in October 2011. This milestone was the culmination of the Debtors’ four-year effort to bring the Karma sedan from design, to concept car, to finished product ready for the showroom floor. The Karma sedan retailed for approximately $100,000 to $120,000, subject to consumer specifications and corresponding purchase price adjustments. The Debtors assembled approximately 2,700 Karma sedans, and, as of the Petition Date, approximately 1,800 Karma sedans had been sold to individual customers.

Prior to the Debtors’ suspension of active operations, the Debtors also planned to develop and produce another platform, the “N” or “Nina Platform,” which included their prototype Atlantic sedan. The Debtors made significant progress towards developing the N Platform, including entering into a number of additional supply and service agreements with third-party vendors and suppliers. These agreements included an engine purchase, supply, and development agreement with Bayerische Motoren Werke Aktiengesellschaft, or BMW. The Debtors first unveiled the Atlantic sedan at the April 2012 New York Auto Show, but, for the reasons discussed herein, never engaged in active production of the Atlantic sedan or other N Platform derivatives.

As discussed in greater detail below, the Debtors were ultimately unable to achieve their operational and financial goals due to a combination of factors, including supply chain disruptions, design delays associated with Karma development, and the Debtors’ inability to access additional or incremental liquidity. The Debtors ceased Karma production indefinitely following a previously scheduled seasonal shutdown that began in July 2012. Since that time, the Debtors have been obliged to contract both their operational footprint and workforce given, among other reasons, the Debtors’ inability to access sufficient liquidity to maintain operations at a normalized level. The Debtors have not conducted active operations since the cessation of Karma production in 2012 and their limited access to liquidity since early 2013. Since that time, the Debtors have conducted only the limited business

9 A123 Systems, Inc. has since changed its name to B456 Systems, Inc.


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operations necessary to preserve the value of their Estates while they worked to pursue a viable restructuring strategy.

2. The Debtors’ Sales Network and Customers.

During prior, normal-course operations, the Debtors sold the Karma sedan in the United States and Canada through a network of independent retailers located throughout the United States and Canada (each, a “Retailer”). In addition, the Debtors sold the Karma sedan in Europe, the Middle East, and China through local, independent distributors (each, a “Distributor”). Typically, Retailers and Distributors would purchase vehicles from the Debtors and then hold the vehicles for sale to the general public. A “Retail Agreement” or “Distributorship Agreement” typically governed each relationship among the parties.

The Retail Agreements and Distributorship Agreements generally provided that the Retailers and Distributors would purchase vehicles directly from the Debtors and then hold those vehicles for sale in an assigned geographic territory. In certain circumstances, these Retailers and Distributors hold the right to compel the Debtors to repurchase their vehicles. Additionally, while the Retailers and Distributors bear primary responsibility for performing warranty repairs associated with sold vehicles, these warranty repairs may be subject to reimbursement from the Debtors. Parties in interest timely Filed Proofs of Claim in the Debtors’ chapter 11 cases claiming in the aggregate approximately $7–8 million on account of such Warranty Claims, not including claims that the Debtors or Liquidating Trust may dispute or have already disputed.10 The Debtors are continuing to review these Proofs of Claim to determine whether any such Warranty Claims should be Allowed Claims, and if so in what amount.

In connection with the cessation of their normal-course operations since the Debtors ceased Karma production in 2012, the Debtors have been unable to continue supporting their dealer network.

3. The Debtors’ Employees.

As of the Petition Date, the Debtors employed approximately 21 full-time, non-union employees, located primarily at the Debtors’ California location. These employees are primarily tasked with engineering, product development, financial, and reporting functions. The Debtors’ current staffing level reflects significant reductions in force and voluntary attrition that occurred in the spring of 2013 and in the months preceding the Petition Date.

Specifically, the Debtors’ largest reduction in force took place on approximately April 5, 2013, when the Debtors were obliged to make the difficult decision to eliminate approximately 160 U.S. employee positions. The Debtors made this difficult choice only after carefully considering their available liquidity and strategic alternatives, including with respect to the effect of issuing notices under the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq. and the California Labor Code § 1400 et seq. amidst their ongoing marketing and financing processes. The April 5 reduction in force and all subsequent reductions in force were largely driven by the Debtors’ limited available liquidity and acute cash needs. The Debtors carefully implemented their reductions in force to minimize the impact on affected employees while maintaining the essential human capital necessary to preserve value and facilitate the orderly administration of these Chapter 11 Cases.

Nevertheless, shortly after the April 5 reduction in force, certain complaints were filed alleging that the Debtors violated U.S. and California law by providing deficient WARN notices, which were subsequently consolidated into a class action lawsuit against the Debtors captioned Etzelsberger, et al. v. Fisker Automotive, Inc., Case No. 13-00540 CJC (RNB) (C.D. Cal.) (the “WARN Litigation”). On August 15, 2013, the court certified the class of approximately 160 former Fisker employees. On December 3, 2013, the Debtors filed a Suggestion of Bankruptcy informing the district court in California that the case was stayed pursuant section 362(a) of the

10 This amount is subject to increase and decrease as further detail supporting the Proofs of Claim becomes available for

analysis by the Debtors or the Liquidating Trust, as applicable.


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Bankruptcy Code. The WARN Litigation was pending as of the Petition Date.11 Additionally, on November 26, 2013, a class action adversary proceeding complaint was filed against the Debtors captioned Etzelsberger, et al. v. Fisker Automotive Holdings, Inc., Adv. Proc. No. 13-52517 (KG) (Bankr. D. Del.) (the “WARN Adversary Proceeding”). The WARN Adversary Proceeding—filed by the same plaintiff’s attorneys as the WARN Litigation—alleges similar violations as the WARN Litigation and seeks, among other things, general and priority unsecured claims against the Debtors’ Estates. The WARN Adversary Proceeding is addressed at length below.

4. Fisker GmbH.

Fisker Automotive GmbH (“Fisker GmbH”), a non-Debtor in these cases, is a wholly owned subsidiary of Fisker Automotive, Inc. organized under the laws of Germany. Fisker GmbH’s office was located in Munich, Germany, and provided international sales and marketing services to the Debtors. Fisker GmbH employed approximately five individuals in its Munich office. In the months leading up to the Chapter 11 Cases, Fisker GmbH’s operations were wound down, and, as of the Petition Date, Fisker GmbH had no active operations. On May 8, 2014, the Bankruptcy Court entered an order [Docket No. 867] authorizing the Debtors to take steps to authorize the dissolution of Fisker GmbH.

5. The Debtors’ Prepetition Corporate Structure.

The Debtors are privately held. FAH Liquidating Corp. (f/k/a Fisker Automotive Holdings, Inc.), which owns 100 percent of the equity interests of FA Liquidating Corp. (f/k/a Fisker Automotive, Inc.), is owned by a diverse group of venture capital, private equity, and sovereign wealth funds, as well as private individuals. The equity capital of FAH Liquidating Corp. (f/k/a Fisker Automotive Holdings, Inc.) consists of common stock and seven series of convertible preferred stock. A diagram of the Debtors’ prepetition corporate structure is attached hereto as Exhibit B.

B. Overview of the Debtors’ Prepetition Capital Structure.

As of the Petition Date, the Debtors had approximately $203.2 million in indebtedness and related obligations outstanding, consisting of the Senior Loan, the SVB Working Capital Facility, the DEDA Loan, and the Related Party Notes. As of the Petition Date, the obligations outstanding under these facilities, excluding accrued interest, can be summarized as follows:

$ millions Senior Loan $168.5 SVB Working Capital Facility $6.6 DEDA Loan $12.5 Related Party Notes $15.6

Total $203.2

In addition, the Debtors have obligations under a number of contractual and vendor related agreements, including with respect to various prepetition supply and assembly agreements. These obligations are discussed in turn.

11 The Debtors have asserted various defenses in the WARN Litigation, including, among other things, the faltering company

exception. The Debtors reserve all rights with respect to the WARN Litigation, the WARN Adversary Proceeding (as defined herein) and any Claims Filed in relation to either the WARN Litigation or the WARN Adversary Proceeding.


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1. The Senior Loan.

The Debtors and DOE (as predecessor in interest to Hybrid with respect to the Senior Loan) are parties to the Senior Loan Agreement, which arranged for the Debtors to receive loans from the federal government in the aggregate amount of up to approximately $530 million, of which the Debtors ultimately borrowed approximately $192.3 million.12 Obligations arising under the Senior Loan Agreement are secured by a first priority lien on certain of the Debtors’ assets, including, among other things, a first priority security interest in a debt service reserve account (the “Debt Service Reserve Account”) established pursuant to the Senior Loan Agreement, which was controlled by DOE and which formerly held approximately $20 million in restricted cash. As set forth more fully below, the Debtors and DOE engaged in substantial, good-faith negotiations during the spring of 2013 regarding the Debtors’ access to funds held in the Debt Service Reserve Account following certain defaults by the Debtors under their lending arrangement with DOE. However, and despite significant, good-faith efforts by the parties, these negotiations were ultimately unsuccessful, and in March 2013, DOE applied the funds held in the Debt Service Reserve Account to principal outstanding under the Senior Loan. As of the Petition Date, approximately $168.5 million in principal remained outstanding on the Senior Loan, and funding is no longer being provided under the Senior Loan Agreement.

As discussed below, DOE subsequently conducted a marketing process for the purchase of DOE’s interests in the Senior Loan and held a competitive auction for such interests on October 11, 2013. Hybrid was the winning bidder at that auction, and the sale of DOE’s interest in the Senior Loan Agreement ultimately closed on November 22, 2013, at which time Hybrid succeeded to DOE’s position as the Debtors’ senior secured lender.

2. The SVB Loan.

Fisker Automotive as borrower, Holdings as obligor, and SVB as lender, are parties to the SVB Loan Agreement, a term loan and asset-based revolving credit facility in the aggregate amount of $21.0 million. As of the Petition Date, a term loan of approximately $6.6 million remained outstanding pursuant to the SVB Loan Agreement, and SVB is no longer providing the Debtors funding under the SVB Loan Agreement. Obligations arising under the SVB Loan Agreement are also secured by a lien on substantially all of the Debtors’ personal property, subject to certain exceptions.

3. The DEDA Agreements.

The Debtors and the Delaware Economic Development Authority (“DEDA”), a body corporate and politic constituted as an instrumentality of the State of Delaware, are parties to the DEDA Loan Agreement, which provided for a $12.5 million interest-free loan to the Debtors, the proceeds of which were to be used to fund the Debtors’ infrastructure improvements and upgrades at the Delaware Facility. As of the Petition Date, approximately $12.5 million remained outstanding pursuant to the DEDA Loan Agreement. Obligations arising under the DEDA Loan Agreement are secured by a security interest in substantially all of the Debtors’ personal and real property, including the Delaware Facility, subject to certain exceptions. Pursuant to an intercreditor agreement, DEDA’s security interest is subordinate to that of Hybrid and SVB.

Fisker Automotive and DEDA are also parties to the DEDA Grant Agreement, pursuant to which DEDA granted up to $9.0 million to Fisker Automotive to be used to offset utility costs incurred while the Debtors renovated and upgraded the Delaware Facility. DEDA provided approximately $7.5 million in funding pursuant to the DEDA Grant, but is no longer providing the Debtors with additional funding. All or a portion of the DEDA Grant will convert to an interest-free loan upon the occurrence of certain conditions, including the Debtors’ failure

12 The Senior Loan Agreement was entered into pursuant to the Advanced Technology Vehicles Manufacturing Incentive

program, as set forth at section 136 of the Energy Independence and Security Act of 2007, Pub. L. No. 110-140, 121 Stat. 1492 (codified as 42 U.S.C. § 17013).


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to employ at least 1,495 fulltime employees at the Delaware Facility on March 1, 2015, or upon the occurrence of an event of default under the DEDA Loan Agreement.

4. Related Party Notes.

As described above, without access to additional funding under the Senior Loan Agreement and following the Debtors’ inability to obtain DOE’s consent to use cash held in the Debt Service Reserve Account, the Debtors had an immediate and critical need for liquidity. To address their urgent operating cash requirements, the Debtors entered into a series of unsecured loans totaling approximately $15.6 million, in the aggregate (exclusive of accrued interest), evidenced by various promissory notes (the “Related Party Notes”) in favor of the Related Party Lenders. The Related Party Lenders include FAH Loan Purchase Fund, LLC, an affiliate of Hybrid. The Debtors used proceeds from the Related Party Notes for prepetition general corporate purposes while the Debtors pursued a restructuring strategy to preserve and maximize value.

5. Other Secured Claims.

The Debtors’ prepetition capital structure also included certain claims that may be secured by either security agreements or statutory or possessory liens. For example, Valmet held certain work in progress and other inventory formerly owned by the Debtors and has asserted its right to liquidate this inventory to satisfy claims that may be owing to Valmet. Certain warehousemen and other parties have also asserted rights to foreclose on possessory or statutory liens with respect to goods in their possession or control. Certain of these parties, including Valmet, began exercising allegedly available remedies against the Debtors before the Petition Date.

Pursuant to the Sale Transaction, substantially all of the Debtors’ assets were sold to the Purchaser subject to existing security interests that were senior to liens securing the Senior Loan. Therefore, prepetition creditors may no longer have recourse to the Debtors’ assets with respect to such Claims, and therefore do not hold Other Secured Claims. In the event that the collateral securing any Other Secured Claim is still owned by the Debtors, in all likelihood the Liquidating Trust will surrender such collateral in full satisfaction of such Other Secured Claim.13

C. Pending Litigation Proceedings.

The Debtors are parties to a significant number of lawsuits, legal proceedings, collection proceedings, and claims arising out of their business operations. As of the Petition Date, many of these proceedings are in various stages of default or pending default as the Debtors had a limited ability to defend such actions due to, among other things, their limited financial resources.

In October 2013, a qui tam proceeding was filed against the Debtors by a private citizen on behalf of the United States, captioned United States, ex rel. Wiedner v. Fisker Automotive, Inc., Case No. 12-07847 (S.D.N.Y.). The qui tam complaint alleges, among other things, claims arising under the False Claims Act, 31 U.S.C. § 3729 et seq., in connection with the Senior Loan. This action was voluntarily dismissed without prejudice on December 10, 2013. As of the date hereof, the Debtors are unaware of any investigations directed against the Debtors by the Securities and Exchange Commission or any similar regulatory body, although the Debtors have no basis to determine whether or not such investigations may be occurring independently of the Debtors’ knowledge.

Additionally, as discussed above, the Debtors are parties to the pending WARN Litigation and the WARN Adversary Proceeding relating to the Debtors’ reduction in force that occurred in April 2013.

13 Parties have filed proofs of claim asserting Other Secured Claims totaling approximately $12.6 million.


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D. The Debtors’ Board of Directors and Executives.

Set forth below are the names, positions, and biographical information of the Debtors’ board of directors, as well as the Debtors’ current key executive officers, in each case as of the Petition Date. The board of directors oversees the business and affairs of the Debtors.

Name Position

Barry W. Huff Director

Bernard L. Zuroff Director

Marc Beilinson Chief Restructuring Officer

Barry W. Huff. Mr. Huff brings to the Board four decades of international financial experience with a deep understanding and development of thought leadership of Deloitte LLP. As Vice Chairman from 1995 to 2008, he oversaw and directed accounts for the multi-billion dollar accounting firm’s largest clients. Mr. Huff’s extensive automotive auditing experience as Deloitte’s Lead Client Service Partner and Advisory Partner to General Motors and Advisory Partner for tier-one automotive suppliers PPG Industries and Meritor.

Bernard L. Zuroff. Mr. Zuroff brings to the Board nearly thirty years of professional experience, including significant leadership and management experience relating to financial restructurings and other distressed situations. Mr. Zuroff previously served on the Board of Trustees and the Independent Committee of the Board of Trustees for Innkeepers USA, Inc. during its chapter 11 reorganization. Mr. Zuroff also previously served as the Group Vice President, General Counsel, and Secretary of McLeod USA Inc. from August 2006 to February 2008 where he, among other things, negotiated and completed a $120 million debt restructuring. Mr. Zuroff has also served in management and legal roles at ICG Communications, Inc., Resolution Trust Corporation, and Gorsuch, Kirgis LLC.

Marc Beilinson. Mr. Beilinson is the Managing Partner of Beilinson Advisory Group, LLC, a financial restructuring and hospitality advisory group that specializes in assisting distressed companies. Mr. Beilinson has more than 30 years of experience advising clients with respect to corporate reorganizations and restructurings, including experience in both the legal and financial-advisory space. Mr. Beilinson previously served as the Chief Restructuring Officer/CEO of Eagle Hospitality and Innkeepers USA. Mr. Beilinson also currently serves on the Board of Directors and Audit Committees of Athene Annuity, MF Global Assurance Company, and Caesars Acquisition Company, and has previously served on the Board of Directors of Wyndham Hotels, Apollo Real Estate Commercial Mortgage Inc., Innkeepers USA, and the University of California Davis School of Law. Mr. Beilinson previously practiced law as a restructuring professional for over 25 years and was previously a shareholder at Pachulski, Stang, Ziehl & Jones.

E. Events Leading to the Chapter 11 Cases.

Since their inception, the Debtors pursued a strategy committed to the design, development, engineering, and production of high performance and environmentally responsible PHEVs. This strategy was reflected by the Debtors’ loan agreements, through which the Debtors were obliged to, among other things, achieve sales in excess of 11,000 vehicles less than five years from their initial inception and to employ approximately 1,500 full-time employees in automobile manufacturing in the United States. The Debtors’ ability to achieve their original sales and production goals, however, was limited by a combination of negative press, lingering effects of the global financial recession, unforeseen business disruptions, and liquidity shortfalls, among other factors.

1. Challenging Operating Environment.

The Debtors, like most OEMs, were responsible for the overall engineering, design, and development of the Karma sedan. In this process, the Debtors leveraged the expertise of a wide range of suppliers and service providers to complete the engineering work and to manufacture the thousands of parts and components necessary to complete each Karma sedan. In addition, and as noted above, Karma assembly was contracted to Valmet—although, the Debtors’ business plan contemplated that assembly operations could ultimately be brought “in house” to the


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Delaware Facility. As a result, Karma production remained dependent on the seamless interaction of suppliers located across North America, Europe, and Asia.

Building the Fisker platform, supply chain, and network of Retailers and Distributors from scratch ultimately delayed the initial Karma launch from 2009 until 2011. This delay created significant challenges with respect to the Debtors’ February 2012 deadline to sell more than 11,000 Karma sedans at an average selling price of $87,900, as required by the Senior Loan Agreement.14 The Debtors further believe that sales were adversely affected by negative press with respect to Karma performance, the Debtors’ existing liquidity position, and the A123 battery recall.

In particular, these challenges were exacerbated by severe complications arising from the Debtors’ relationship with A123. As noted above, A123 was formerly the exclusive high-voltage battery pack manufacturer for the Karma sedan. The Debtors encountered a number of issues with the performance of the A123 battery packs, and, among other things, had to initiate a voluntary safety recall almost immediately following the Karma’s launch. A123 later suspended its production of Karma battery backs and sought bankruptcy protection in October 2012. During the course of the bankruptcy, A123 rejected its battery pack supply agreement with the Debtors, leaving the Debtors without a supplier of high-voltage battery packs. Facing these challenges, the Debtors have not restarted Karma production following a previously scheduled seasonal shutdown that began in July 2012.

The Debtors suffered an additional loss on October 29, 2012, when Hurricane Sandy and its related windstorms, storm surges, and floods, destroyed approximately 338 Karma sedans located at the port in Newark, New Jersey. These vehicles represented substantially all of Fisker’s then-available Karma inventory in the United States. The Debtors’ insurance carriers denied coverage for the loss. After filing suit, the Debtors settled their coverage claims for an amount far less than the approximately $30 million wholesale value of the destroyed vehicles in order to avoid the risk and cost of protracted litigation with their insurance carriers.

2. Prepetition Covenant Defaults and Capital-Raising Efforts.

As noted above, the Senior Loan Agreement requires the Debtors to achieve various performance milestones, including the Debtors’ obligation to sell 11,000 Karma sedans by February 29, 2012. Fisker did not achieve certain of these milestones in light of, among other things, the performance challenges discussed above. The Debtors’ operating position was further complicated in 2011 when DOE informed the Debtors that it would not honor future disbursement requests pursuant to the Senior Loan Agreement, and since that time all funding under the Senior Loan ceased. The Debtors subsequently engaged in good-faith negotiations with DOE regarding modification or waiver of certain conditions imposed by the Senior Loan Agreement, through which the Debtors agreed to raise additional equity capital to fund operations and improve the Debtors’ overall capitalization. Since DOE suspended its funding commitments in 2011, the Debtors raised approximately $500 million of new capital in three separate equity raises while continuing negotiations with DOE.

3. Prepetition Restructuring Efforts.

Commencing in early 2012, the Debtors began exploring strategic alternatives with respect to their business and operations. To facilitate this process, the Debtors retained Evercore Group L.L.C. (“Evercore”) on two separate occasions to explore strategic alliances, junior equity investment opportunities, or, potentially, a going-concern sale transaction with one or more parties with respect to the Debtors’ business. Evercore’s initial efforts led to the exchange of several letters of intent between the Debtors and a major automotive OEM with respect to a potential strategic alliance. Despite substantial negotiations, including meetings with the Debtors’ management, however, the parties were ultimately unable to agree to a transaction and terminated further discussions in July 2012.

14 As noted above, as of the Petition Date approximately 1,800 Karma sedans have been sold to individual customers.


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The Debtors then reengaged Evercore in December 2012 to search more broadly, and in early 2013 Evercore engaged a worldwide universe of more than 50 prospective strategic and financial investors through a structured process designed to publicize the opportunity and induce interest in a transaction. Again, management was actively involved with discussions with potentially interested parties, and approximately thirteen parties executed non-disclosure agreements and accessed an extensive electronic data room. Of these parties, two submitted preliminary non-binding proposals; however, the Debtors were again unable to reach definitive agreements with any of the potential purchasers, due to, among other things, the Debtors’ inability to: (a) secure additional financing from DOE, the Debtors’ senior secured lender at the time, to finance a potential sale transaction; (b) reach an agreement with DOE regarding the consensual use of cash collateral to fund a potential chapter 11 case; or (c) secure third-party financing to fund a potential chapter 11 sale process.

The Debtors then sought to market their assets for sale in three discrete groups, with the goal of reaching agreements with one or more bidders that would serve as stalking horses for a sale process in chapter 11 that would be funded by either DOE or third parties. Based on information gleaned from their interactions in the prior processes, Evercore re-solicited interest on this basis from fifteen parties. Again, however, the Debtors were unable to reach definitive agreements with any parties, again, largely due to funding issues.

In addition to these efforts to locate a transaction partner, the Debtors also took substantial additional steps to address their liquidity position and preserve operational stability as much as reasonably possible. The Debtors engaged restructuring advisors to facilitate the Debtors’ efforts to preserve liquidity and explore various restructuring options, while permitting executive management to continue to focus on the Debtors’ overall business plan and strategic alternatives. The Debtors’ management team, restructuring advisors, and Evercore also continued to negotiate with DOE to provide the Debtors with continued access to liquidity on a prepetition basis.

Despite their extensive efforts to preserve cash and execute on a restructuring transaction outside a chapter 11 process, no transaction with investors or purchasers materialized, and the Debtors’ liquidity position continued to deteriorate. As a result, the Debtors made the difficult decision to implement nonpaid employee furloughs and a series of headcount reductions beginning during the spring of 2013. Simultaneously, the Debtors engaged in negotiations with DOE regarding the use of DOE’s cash collateral to fund a restructuring process. However, and as noted above, these efforts were unsuccessful despite good-faith efforts by the parties, and DOE ultimately applied the cash held in the Debt Service Reserve Account to principal outstanding on the Senior Loan. This left the Debtors with less than $100,000 in cash.

Since that time, and prior to the Petition Date, the Debtors primarily subsisted on the limited, week-to-week funding from the Related Party Notes. Faced with such limited resources, the Debtors were forced to effectively hibernate their business in order to preserve cash and cut expenditures. While the Debtors continued to explore viable restructuring alternatives that would maximize the value of the Debtors’ Estates, including actively seeking and negotiating with potential stalking horse partners, the Debtors’ efforts were ultimately unsuccessful due to, among other things, the Debtors’ inability to obtain funding.

Meanwhile, DOE conducted a public marketing and auction process for the purchase of its interests in the Senior Loan. The DOE marketing and auction process commenced on September 17, 2013, when DOE publicized its plan to sell its interests through a competitive auction. The Debtors actively facilitated diligence and engaged with DOE throughout this process, and DOE received over twenty written expressions of interest in performing due diligence and participating in the auction process. Ultimately, Hybrid emerged as the successful bidder during the final, live phase of the auction held on October 11, 2013, and the parties closed the loan purchase on November 22, 2013.


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ARTICLE V. EVENTS OF THE CHAPTER 11 CASES

A. First Day Pleadings and Other Case Matters.

1. First and Second Day Pleadings.

The Debtors Filed on, or shortly after, the Petition Date certain motions and applications requesting various types of relief summarized below. The relief sought in these “first day” and “second day” pleadings enabled the Debtors to preserve value and efficiently administer these chapter 11 cases. The Filed first and second day pleadings include the following:

Hybrid DIP Facility and Cash Collateral. By this motion (the “Hybrid DIP Motion”), the Debtors requested interim and final authorization to enter into the Hybrid DIP Facility by and among Fisker Automotive as borrower, Holdings as guarantor, and Hybrid (in such capacity, the “Hybrid DIP Lender”). The Bankruptcy Court granted the relief requested by the Hybrid DIP Motion on a final basis on January 24, 2014 [Docket No. 521] (the “Hybrid DIP Order”).

Cash Management. By this motion, the Debtors obtained entry of an a final order [Docket No. 149] authorizing the Debtors to continue using their existing cash management system, bank accounts, and business forms.

Insurance. In order to avoid any potential lapse of coverage and the expense of acquiring new coverage, the Debtors requested authority to continue their insurance and pay prepetition premiums necessary to maintain insurance coverage. On November 26, 2013, the Bankruptcy Court granted such relief on a final basis [Docket No. 57].

Taxes. The Debtors believe that, in some cases, certain taxing authorities have the ability to exercise rights that would be detrimental to the Sale Transaction and Plan process, as well as any other actions related thereto if the Debtors failed to meet the obligations imposed upon them to remit certain taxes and fees. On November 26, 2013, the Bankruptcy Court granted such relief on a final basis [Docket No. 56].

Utilities. By this motion, the Debtors sought approval of procedures for, among other things, determining adequate assurance for utility providers, prohibiting utility providers from altering, refusing, or discontinuing services, and determining that the Debtors are not required to provide additional adequate assurance except as set forth in the procedures related thereto. On December 16, 2013, the Bankruptcy Court granted such relief on a final basis [Docket No. 163].

Wages. By this motion, the Debtors requested authority to pay employees’ wage Claims and related obligations in the ordinary course of business. Additionally, among other things, the Debtors requested authority to continue all of their prepetition benefit programs, including, among others, the medical, dental, and 401(k) plans. On November 26, 2013, the Bankruptcy Court granted such relief on a final basis [Docket No. 58].

2. Procedural and Administrative Motions.

To facilitate the efficient administration of the Chapter 11 Cases and to reduce the administrative burden associated therewith, the Debtors also Filed motions seeking authorization to implement certain procedural and administrative relief:

Joint Administration. By this motion, the Debtors requested authorization for the joint administration of the Chapter 11 Cases. On November 26, 2013, the Bankruptcy Court granted such relief on a final basis [Docket No. 52].


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Mailing Matrix. By this motion, the Debtors requested authorization to prepare and File a consolidated list of creditors in lieu of submitting separate mailing matrices for each Debtor. On November 26, 2013, the Bankruptcy Court granted such relief on a final basis [Docket No. 54].

Equity Trading. By this motion, the Debtors sought approval of procedures allowing the Debtors to monitor, and possibly object to, certain changes in ownership of the Debtors’ common stock to enable the Debtors to preserve the value of their net operating losses and other tax attributes. On November 26, 2013, the Bankruptcy Court granted such relief on an interim basis and scheduled a final hearing related thereto [Docket No. 59], and on December 13, 2013, the Bankruptcy Court granted such relief on a final basis [Docket No. 151].

3. Retention of Chapter 11 Professionals.

The Debtors also Filed several applications to obtain authority to retain various professionals to assist the Debtors in carrying out their duties under the Bankruptcy Code during the Chapter 11 Cases. These professionals include:

Rust Consulting/Omni Bankruptcy, as the Notice and Claims Agent for the Debtors, which retention was approved by the Bankruptcy Court on November 26, 2013 [Docket No. 61];

Rust Consulting/Omni Bankruptcy, as administrative advisor for the Debtors, which retention was approved by the Bankruptcy Court on December 13, 2013 [Docket No. 150]; and

Kirkland & Ellis LLP, as co-counsel to the Debtors, which retention was approved by the Bankruptcy Court on January 10, 2014 [Docket No. 427];

Pachulski Stang Ziehl & Jones LLP, as co-counsel to the Debtors, which retention was approved by the Bankruptcy Court on January 10, 2014 [Docket No. 428];

Beilinson Advisory Group as restructuring advisors to the Debtors, which retention was approved by the Bankruptcy Court on January 24, 2014 [Docket No. 522];

Evercore, as investment banker for the Debtors, which retention was approved by the Bankruptcy Court on March 31, 2014 [Docket No. 756].

AlixPartners, LLP, to provide intellectual property valuation services for the Debtors, which retention was approved by the Bankruptcy Court on April 15, 2014 [Docket No. 786].

4. Appointment of Official Committee of Unsecured Creditors.

On December 5, 2013, the U.S. Trustee appointed the Committee in these Chapter 11 Cases [Docket No. 102]. The Committee is comprised of (a) Magna E-Car USA, LLC; (b) Supercars & More SRL; (c) Kuster Automotive Door Systems GmbH; (d) TK Holdings Inc.; (e) Sven Etzelsberger; and (f) David M. Cohen, Esq.

The Committee Filed several applications to obtain authority to retain various professionals to assist the Committee in carrying out their duties under the Bankruptcy Code during the Chapter 11 Cases. These professionals include:

Emerald Capital Advisors, as financial advisors to the Committee, which retention was approved by the Bankruptcy Court on January 24, 2014 [Docket No. 551].

Brown Rudnick LLP, as co-counsel to the Committee, which retention was approved by the Bankruptcy Court on January 31, 2014 [Docket No. 570];


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Saul Ewing LLP, as co-counsel to the Committee, which retention was approved by the Bankruptcy Court on January 31, 2014 [Docket No. 571]; and

284 Partners, LLC, as intellectual property valuation expert for the Committee, which retention was approved by the Bankruptcy Court on April 15, 2014 [Docket No. 785].

B. Claims Bar Date.

On December 3, 2013, the Debtors Filed their Schedules with the Bankruptcy Court pursuant to section 521 of the Bankruptcy Code. The Bankruptcy Code allows a bankruptcy court to fix the time within which Proofs of Claim must be Filed in a chapter 11 case. Any creditor whose Claim is not scheduled in the Debtors’ Schedules or whose Claim is scheduled as disputed, contingent, or unliquidated must File a Proof of Claim.

On December 9, 2013, the Debtors Filed a motion requesting the Bankruptcy Court to enter an order approving, among other things: (a) January 27, 2014, at 5:00 p.m. prevailing Eastern Time (the “General Claims Bar Date”) as the deadline for all non-Governmental Units to File Claims in the Chapter 11 Cases; (b) May 21, 2014, at 5:00 p.m. prevailing Eastern Time as the deadline for all Governmental Units to File Claims in the Chapter 11 Cases; (c) procedures for Filing Proofs of Claim; and (d) the form and manner of notice of the bar dates [Docket No. 113], and on December 30, 2013, the Bankruptcy Court granted such relief on a final basis [Docket No. 252].

As of the General Claims Bar Date, approximately 543 Proofs of Claim were timely filed in these Chapter 11 Cases asserting a total of approximately $980 million. The Debtors are currently reviewing these Proofs of Claim to determine whether the asserted Claims should be Allowed, and if so, in what amount and priority. In that respect, on March 14, 2014, the Debtors filed two omnibus objections to certain Proofs of Claim [Docket Nos. 706 and 707] (the “First and Second Omnibus Objections”), objecting to a total of approximately 171 claims that assert amounts totaling in the aggregate approximately $45 million. On April 17, 2014, the Court entered orders [Docket Nos. 800 and 801] granting the relief sought in the First and Second Omnibus Objections, except with respect to the Debtors’ objections to approximately 22 claims, which objections were consensually adjourned and remain pending as of the date hereof. Additionally, on May 27, 2014, the Debtors filed a third omnibus objection to certain Proofs of Claim [Docket No. 936] (the “Third Omnibus Objection”), objecting to a total of approximately 48 claims that assert amounts totaling in the aggregate approximately $290 million, and also seeking to reclassify certain claims on account of damages arising from the purchase or sale of equity securities pursuant to section 510(b) of the Bankruptcy Code. The Third Omnibus Objection is pending as of the date hereof.

In the ordinary course of business, the Debtors incurred potential Warranty Claims pursuant to certain of the Debtors’ Warranty Agreements that provided for customary limited warranty programs. Holders of these Warranty Claims may include the Debtors’ former Retailers and Distributors, as well as Persons that own or formerly owned the Debtors’ vehicles. Parties in interest timely filed Proofs of Claim in the Debtors’ chapter 11 cases claiming in the aggregate approximately $7–8 million on account of such Warranty Claims, not including claims that the Debtors or Liquidating Trust may dispute or have already disputed.15 The Debtors are continuing to review these Proofs of Claim to determine whether any such Warranty Claims should be Allowed Claims, and if so in what amount. Additionally, and as described in greater detail below, Wanxiang has agreed to implement a Warranty Program, which holders of Allowed Warranty Claims will be automatically enrolled in unless such holders of Warranty Claims opt out of the Warranty Program, in which case such holders will receive a beneficial interest in its Pro Rata share of the Liquidating Trust Assets.

15 As noted above, this amount is subject to increase and decrease as further detail supporting the Proofs of Claim becomes

available for analysis by the Debtors or the Liquidating Trust, as applicable.


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C. Pending Litigation Proceedings.

As discussed above, the Debtors are parties to a significant number of lawsuits, legal proceedings, collection proceedings, and claims arising out of their business operations. The Debtors cannot predict with certainty the outcome of these lawsuits, legal proceedings, and claims.

With certain exceptions, the Filing of the Chapter 11 Cases operates as a stay with respect to the commencement or continuation of litigation against the Debtors that was or could have been commenced before the commencement of the Chapter 11 Cases. In addition, the Debtors’ liability with respect to litigation stayed by the commencement of the Chapter 11 Cases is generally subject to discharge, settlement, and release upon confirmation of a plan under chapter 11, with certain exceptions. Therefore, certain litigation Claims against the Debtors may be subject to discharge, settlement, or release in connection with the Chapter 11 Cases.

D. WARN Proceeding.

As noted above, the WARN Adversary Proceeding was filed on November 26, 2013. Per the filed complaint, the plaintiffs assert claims arising under the federal Workers Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq., (“WARN Act”) and related state law claims. Plaintiffs also assert that such claims are entitled to priority pursuant to sections 507(a)(4) and/or 507(a)(5) of the Bankruptcy Code on account of a reduction in force occurring on April 5, 2013. In particular, the plaintiffs assert that the April 5, 2013 reduction in force occurred within 180 days before the “cessation of the [Debtors’] business,” as that term is used by the priority provisions of the Bankruptcy Code. See 11 U.S.C. §§ 507(a)(4), (5).

The Debtors believe the claims asserted pursuant to the WARN Adversary Proceeding—including with respect to the priority asserted therein—are meritless. Among other things, the Debtors believe that any Claims arising on account of their April 5, 2013 reduction in force are not entitled to priority status under the Bankruptcy Code because such events did not occur within 180 days prior to a “cessation of [the Debtors’] business.” Moreover, the Debtors believe that any claims arising from their April 5, 2013 reduction in force are subject to a complete defense under the faltering company and unforeseen business exceptions provided under federal law as well as the faltering company exception under California state law, among others. The Debtors reserve all rights with respect to the Claims asserted pursuant to the WARN Adversary Proceeding.

E. The Committee’s Standing Motion.

On December 30, 2013, the Committee filed a motion [Docket No. 267] (the “Committee Standing Motion”), seeking standing to commence and prosecute certain causes of action on behalf of the Debtors’ Estates against the Debtors’ former directors and officers, prepetition lenders, and their affiliates or related parties for, among other things, (a) breaches of fiduciary duties and aiding and abetting such breaches; (b) avoidance actions with respect to liens securing the Senior Loan; and (c) disallowance, subordination, and recharacterization of certain Claims. The Committee Standing Motion remains pending as of the date hereof and has not been set for hearing. Subject to confirmation of the Plan and occurrence of the Effective Date, the relief requested by the Committee Standing Motion shall be moot.

F. The Debtors’ Prior Solicitation Process.

In connection with the Debtors’ originally proposed sale of the Acquired Assets to Hybrid and related Plan process, on November 25, 2013, the Debtors filed a motion seeking approval of the adequacy of the Disclosure Statement and approving solicitation and notice procedures with respect to confirmation of the Debtors’ proposed Plan. At a hearing on December 10, 2013, the Bankruptcy Court provisionally approved the adequacy of the Disclosure Statement, and on December 12, 2013, the Debtors caused Solicitation Packages to be mailed to Holders of Claims that were entitled to vote to accept or reject the Plan.

In light of, among other things, the modifications implemented by the Debtors with respect to the prior version of the Plan, the Debtors have elected to resolicit votes on their Plan, and votes cast with respect to the prior version of the Plan will not be counted.


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G. Credit Bid Decision and Appeal.

On the Petition Date, the Debtors Filed the Sale Motion seeking authorization of the sale of the Acquired Assets, representing substantially all of the Debtors’ assets, to Hybrid free and clear of all claims, liens, and other encumbrances pursuant to section 363 of the Bankruptcy Code. At a hearing held by the Bankruptcy Court on January 10, 2014, the Bankruptcy Court, pursuant to section 363(k) of the Bankruptcy Code, limited Hybrid’s right to credit bid on account of the Senior Loan to no more than $25 million, and on January 23, 2014, entered the Bidding Procedures Order authorizing the Debtors to proceed with an auction for the sale of the Acquired Assets. See Jan. 10, 2014 Hr’g Tr. 135–138; see also Bidding Procedures Order ¶¶ 7, 25; Memorandum Opinion [Docket No. 483].

While Hybrid subsequently sought leave to appeal the Bankruptcy Court’s credit bid decision prior to entry of the Sale Order, such leave was not granted, and Hybrid ultimately elected not to pursue an appeal of the Bankruptcy Court’s credit bid decision after entry of the Sale Order.

H. The Sale and Auction Process.

The Bidding Procedures Order authorized the Debtors to enter into stalking horse purchase agreements with both Hybrid and Wanxiang. To assist them with the Auction and sale process, on January 24, 2014, the Debtors retained Evercore as their investment banker [Docket No. 527]. As of that date, Evercore became fully involved with the Auction and sale process, including the pre-Auction marketing process, advising with respect to the Auction, coordinating and engaging with the Committee’s professionals, Hybrid, and Wanxiang, and engaging other potentially interested parties.

Ultimately, no additional bidders emerged, and the Debtors proceeded with the Auction with the two stalking horse bidders—Wanxiang and Hybrid. Over the course of a three-day auction commencing February 12, 2014, and that included 19 rounds of bidding, the value of the highest or otherwise best bid rose approximately $90 million before Wanxiang submitted the successful bid for the Acquired Assets. The Debtors and the Committee jointly valued Wanxiang’s successful bid at approximately $149.2 million. Wanxiang’s successful bid consisted of, among other things, (a) $126.2 million in cash; (b) $8 million of assumed liabilities arising from Administrative and Priority Claims against the Debtors’ estates, other than Claims arising from the Hybrid DIP Facility; and (c) Wanxiang’s contribution of the Equity Consideration, generally consisting a 20% common equity interest in a Wanxiang affiliate designated to acquire the Debtors’ assets.16 Additionally, Wanxiang will contribute certain causes of action to the Liquidating Trust, subject to a specified sharing of the proceeds from such causes of action between the Liquidating Trust and Wanxiang, as set forth in greater detail in section 7.4 of the Purchase Agreement.

I. The Wanxiang DIP Facility; Sale Transaction Closing

The Bankruptcy Court approved the Debtors’ proposed sale to Wanxiang pursuant to the Sale Order entered February 19, 2014. Subsequent to the entry of the Sale Order, the Debtors and Wanxiang diligently worked to close the Sale Transaction.

To provide the Debtors with funding through the closing of the Sale Transaction and the confirmation of this Plan, on February 28, 2014, the Debtors filed a motion [Docket No. 671] (the “Wanxiang DIP Motion”) seeking interim and final authorization to enter into the Wanxiang DIP Facility by and among Fisker Automotive as borrower, Holdings as guarantor, and Wanxiang (in such capacity, the “Wanxiang DIP Lender”). The Wanxiang DIP Lender agreed to provide the Wanxiang DIP Facility subject to the terms and conditions of the Wanxiang DIP Agreement. On March 20, 2014, the Bankruptcy Court granted the Debtors final relief to enter into the Wanxiang

16 The terms and conditions of the Equity Consideration are set forth more fully in the LLC Agreement.


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DIP Agreement and authorized the Debtors to borrow in an aggregate principal amount not to exceed $10.5 million (of which approximately $3.7 million was ultimately borrowed) [Docket No. 722] (the “Final Wanxiang DIP Order”).

The Closing Date (as defined in the Purchase Agreement) occurred on March 24, 2014, and the Debtors repaid the balance of the Hybrid DIP Facility and the Wanxiang DIP Facility at that time. After the closing, the Debtors retained ownership of the Excluded Assets as well as the Sale Proceeds, which will be liquidated and distributed to the Debtors’ creditors in accordance with the terms of the Plan.

J. Debtors’ Investigation; Global Settlement.

As discussed above, certain of the Debtors’ key stakeholders held divergent opinions regarding the appropriate allocation of the Sale Proceeds among the Debtors’ stakeholders. Specifically, while Hybrid claimed that it was entitled to virtually all of the Sale Proceeds due to its asserted liens on substantially all the Debtors’ assets, the Committee challenged the extent, validity, and perfection of these liens. Additionally, the Committee also asserted that all or part of Hybrid’s Claims were subject to subordination, reclassification, or disallowance—regardless of whether such Claims are secured. Moreover, the Sale Order (1) provided no finding or holding with respect to the perfection and allocation issues discussed above; (2) reserved all rights of the Debtors, the Committee, and Hybrid in respect thereto; and (3) preserved certain rights Hybrid may have with respect to both the cash and non-cash Sale Proceeds. Accordingly, despite the successful outcome of the Auction, the Debtors faced a material probability of litigation with the Committee and Hybrid concerning the allocation of the Sale Proceeds among the Debtors’ stakeholders. Such litigation would likely pose material risk to Hybrid, the Committee, and the Debtors’ Estates—particularly when compared with the recoveries available under the Plan. In addition, the Debtors believe such litigation would prolong these chapter 11 cases and entail significant costs on the Debtors’ Estates resulting in reductions to stakeholder recoveries.

Beginning in March 2014, the Debtors, with the assistance of their advisors, undertook a supplemental investigation to assess whether it could be in the best interests of the Debtors’ Estates to grant standing to the Committee as requested by the Committee Standing Motion, including by reviewing the factual allegations and legal claims asserted by the Committee against certain of the Debtors’ former directors and officers (including David Manion, Richard Li, and Bernhard Koehler) and Hybrid and its related entities, as set forth in the Committee Standing Motion. During the course of the investigation, the Debtors interviewed key personnel, including former and current directors, officers, and advisors. The Debtors also reviewed several types of documents and communications, including Board of Directors meeting minutes and materials, relevant pleadings, emails, deposition transcripts, and publicly available information. After developing the factual record and conducting a legal analysis, the Debtors were able to provide a preliminary assessment of the merit of both the legal issues and factual predicates underlying the various assertions advanced by both Hybrid and the Committee. Additionally, the Debtors analyzed the legal and factual bases relevant to Hybrid’s assertions that it may be entitled to approximately $13 million in superpriority administrative expense claims purportedly arising from diminution in value attributable to the Debtors’ DIP Facilities.

In an effort to resolve the parties’ differences and avoid costly litigation, the Debtors sought to develop a plan structure that reflected the diverse interests of the Debtors’ many stakeholders in a fair and balanced manner and that also had the Committee’s and Hybrid’s support. Therefore, the Debtors worked with the Committee and Hybrid in an effort to reach a settlement among them that was also acceptable to the Debtors. After several weeks of good-faith negotiations, the parties’ efforts culminated in a day-long negotiating session in early April 2014 that led to an agreement in principle among the Debtors, Hybrid, and the Committee. Over the next several days, the parties worked to finalize the deal, and develop the presently proposed Plan, which the Debtors believe is in the best interests of all their stakeholders.

K. The Committee’s Emergency Motion to Terminate Exclusivity.

Shortly after the Debtors filed their Plan and Disclosure Statement on April 30, 2014, the Committee filed an emergency motion to terminate the Debtors’ exclusivity periods [Docket No. 836] (the “Motion to Terminate”). The Committee’s Motion to Terminate remains pending as of the date hereof. Subject to confirmation of the Plan and occurrence of the Effective Date, the relief requested by the Motion to Terminate shall be moot.


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L. Wanxiang’s Alleged Reimbursement Rights.

1. Wanxiang’s Position.

Wanxiang believes that the consideration which the Liquidating Trust is entitled to receive under the Plan Settlement Term Sheet is subject to Wanxiang’s rights of reimbursement under Section 7.4 of the Purchase Agreement, which entitles Wanxiang to certain reimbursements from the proceeds realized from the Designated Causes of Action (as such term is defined in the Purchase Agreement). Wanxiang believes that a substantial portion of the $20 million in cash that the Liquidating Trust is entitled to receive under the Plan Settlement Term Sheet (the “Liquidating Trust Cash Payment”) constitutes proceeds realized from the Designated Causes of Action. Wanxiang asserts that the Committee disputes Wanxiang’s interpretation of Section 7.4 of the Purchase Agreement and believes that no portion of the Liquidating Trust Cash Payment constitutes proceeds realized from any Designated Causes of Action. Wanxiang and the Committee have engaged in good faith, arm’s-length negotiations in an effort to resolve their respective positions, but no resolution has been reached at this time. If such negotiations do not result in a settlement on Wanxiang’s position prior to the confirmation of the Plan, Wanxiang has said that it will argue that a portion of the Liquidating Trust Cash Payment must be escrowed or reserved by the Liquidating Trust until the dispute over the interpretation of Section 7.4 of the Purchase Agreement is settled between Wanxiang and the Liquidating Trust or adjudicated by the Bankruptcy Court. If Wanxiang ultimately prevails in its position, Wanxiang believes that any portion of the Liquidating Trust Cash Payment that is distributed to Wanxiang may not be available for distribution to creditors under the Plan and may otherwise reduce recoveries on account of Allowed General Unsecured Claims. Additionally, distributions to Holders of Allowed General Unsecured Claims could be delayed pending resolution of this dispute if such consideration had to be set aside or held in reserve.

2. Committee’s Position.


M. The Securities Actions.

During the pendency of the chapter 11 cases, certain parties (the “Securities Plaintiffs”) commenced three securities actions (Atlas Capital Management, LP v. Henrik Fisker, et al., Case No. 13-cv-02100 (SLR), (ii) CK Investments, LLC, et al. v. Henrik Fisker, et al., Case No. 14-cv-00118 (SLR), and (iii) PEAK6 Opportunities Fund L.L.C., et al. v. Henrik Fisker, et al., Case No. 14-cv-00119 (SLR) (collectively, the “Securities Actions”)), in the United States District Court for the District of Delaware, against certain of Holdings’ current and/or former officers, directors and controlling shareholders (collectively, “Non-Debtor Defendants”)17 for violations of sections 12(a)(2) 17 The Non-Debtor Defendants are Henrik Fisker, Bernhard Koehler, Joe Damour, Kleiner Perkins Caufield & Byers, Ray

Lane, Keith Daubenspeck, Peter McDonnell, Richard Li Tzar Kai, and Ace Strength , Ltd.


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and 15 of the Securities Act of 1933 and section 10(b) and Rule 10b-5 promulgated thereunder, and section 20(a) of the Securities Exchange Act of 1934. The Securities Plaintiffs allege that they are creditors of Holdings. The allegations related to the Securities Actions arise from, inter alia, what the Securities Plaintiffs assert were material omissions and materially false and misleading statements concerning Holdings’ financial results and business made between April 1, 2011 and April 17, 2013, inclusive, and the Non-Debtor Defendants’ conduct in connection therewith. The Securities Plaintiffs have alleged that they are purchasers of preferred stock of Holdings and/or membership units (“Membership Units”) in entities that exclusively purchased and/or held Holdings’ preferred stock.

Although the Securities Plaintiffs allege that Holdings participated in the conduct which forms the bases of the claims asserted by the Securities Plaintiffs, Holdings is not named as a defendant in the Securities Actions pursuant to the dictates of the automatic stay under the Bankruptcy Code (11 U.S.C. § 362(a)). The Securities Actions are proceeding, however, as against the Non-Debtor Defendants.

Substantially all of the Securities Plaintiffs have filed individual proofs of claim against Holdings for damages based upon the conduct outlined in the Securities Actions. The Securities Plaintiffs believe that each Securities Plaintiff is a general unsecured creditor of Holdings. However, depending upon whether such Securities Plaintiff is a direct purchaser of Holdings’ preferred stock or a purchaser of Membership Units, such Securities Plaintiff’s Claim may be subject to subordination pursuant to section 510(b) of the Bankruptcy Code.

ARTICLE VI. SUMMARY OF THE PLAN

This section provides a summary of the structure and means for implementation of the Plan and the classification and treatment of Claims and Interests under the Plan, and is qualified in its entirety by reference to the Plan (as well as the exhibits thereto and definitions therein).

The statements contained in this Disclosure Statement include summaries of the provisions contained in the Plan and in the documents referred to therein. The statements contained in this Disclosure Statement do not purport to be precise or complete statements of all the terms and provisions of the Plan or documents referred to therein, and reference is made to the Plan and to such documents for the full and complete statement of such terms and provisions of the Plan or documents referred to therein.

The Plan controls the actual treatment of Claims against, and Interests in, the Debtors under the Plan, and will, upon the occurrence of the Effective Date, be binding upon all Holders of Claims against and Interests in the Debtors and the Debtors’ Estates, all parties receiving property under the Plan, and other parties in interest. In the event of any conflict between this Disclosure Statement and the Plan or any other operative document, the terms of the Plan and/or such other operative document shall control.

A. Administrative Claims, Priority Tax Claims, DIP Facility Claims, and Professional Fee Claims.

1. Administrative Claims and Priority Tax Claims.

Unless otherwise agreed to by the Holder of an Allowed Administrative Claim or Allowed Priority Tax Claim, as applicable, and the Debtors or the Liquidating Trustee, as applicable, to the extent an Allowed Administrative Claim or Allowed Priority Tax Claim, as applicable, has not already been paid in full during the Chapter 11 Cases, Allowed Administrative Claims and Allowed Priority Tax Claims shall be satisfied in full with a Cash distribution from the Priority Claims Reserve.

Except as otherwise provided by a Final Order previously entered by the Bankruptcy Court (including the Bar Date Order) or as provided by Article II.B of the Plan, unless previously Filed, requests for payment of Administrative Claims, other than requests for payment of Professional Fee Claims, must be Filed and served on the Debtors no later than the Administrative Claims Bar Date pursuant to the procedures specified in the Confirmation Order and the notice of entry of the Confirmation Order.


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Holders of Administrative Claims that are required to File and serve a request for payment of such Administrative Claims that do not File and serve such a request by the Administrative Claims Bar Date shall be forever barred, estopped, and enjoined from asserting such Administrative Claims against the Debtors or their property, and such Administrative Claims shall be deemed compromised, settled, and released as of the Effective Date. Objections to such requests must be Filed and served on the requesting party by the Administrative Claims Objection Bar Date.

2. DIP Facility Claims.

(a) Wanxiang DIP Facility Claims

Except to the extent that a Holder of an Allowed Wanxiang DIP Facility Claim agrees to a less favorable treatment, to the extent that any Allowed Wanxiang DIP Facility Claim remain unpaid as of the Effective Date, such Allowed Wanxiang DIP Facility Claim shall be paid in full with a distribution from the Priority Claims Reserve on the Effective Date in full and final satisfaction, settlement, release, and discharge of, and in exchange for, each Allowed Wanxiang DIP Facility Claim.

(b) Hybrid DIP Facility Claims

Subject to the occurrence of each of the SVB Cash Distribution and the Hybrid Cash Distribution and the occurrence of the Effective Date, to the extent that any Hybrid DIP Facility Claims remains unpaid as of the Effective Date, such Hybrid DIP Facility Claims shall be waived and deemed to have been waived as of the Effective Date.

3. Professional Fee Claims.

(a) Professional Fee Escrow

If the Professional Fee Claims Estimate is greater than zero, as soon as reasonably practicable after the Confirmation Date and no later than the Effective Date, the Debtors shall establish and fund the Professional Fee Escrow. The Debtors shall fund the Professional Fee Escrow with Cash equal to the Professional Fee Claims Estimate. Except as provided in the Plan, the Professional Fee Escrow shall be funded on the Effective Date and maintained in trust for the Professionals and shall not be considered property of the Debtors’ Estates or a Liquidating Trust Asset. When all Allowed Professional Fee Claims have been paid in full, amounts remaining in the Professional Fee Escrow, if any, shall be transferred to the Priority Claims Reserve and shall be distributed in accordance with the Plan.

To the extent that funds held in the Professional Fee Escrow are unable to satisfy the amount of Allowed Professional Fee Claims owing to the Professionals after application of funds held in the applicable Professional Trust Account, such Professionals shall have an Allowed Administrative Claim for any such deficiency, which Allowed Administrative Claim shall be satisfied in accordance with the Plan.

(b) Final Fee Applications.

All final requests for payment of Professional Fee Claims shall be filed no later than the first Business Day that is 45 days after the Effective Date. After notice and a hearing in accordance with the procedures established by the Bankruptcy Code and prior Bankruptcy Court orders, the Allowed amounts of such Professional Fee Claims shall be determined by the Bankruptcy Court. Subject to Article II.C.1 of the Plan, the amount of Professional Fee Claims owing to the Professionals shall be paid in Cash to such Professionals from funds held in the Professional Fee Escrow, or as otherwise provided herein, when such Claims are allowed by an order of the Bankruptcy Court, which order is not subject to a stay.


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4. Priority Claims Reserve.

On or after the Effective Date, Hybrid shall promptly cause the Priority Claims Reserve Subsequent Funding to occur as needed to satisfy the amount of Allowed Priority Claims against the Estates, in accordance with Article II of the Plan.

Subject to the provisions of Article VI.B.1 of the Plan, the Manager shall administer the Priority Claims Reserve and direct the disbursement of assets from the Priority Claims Reserve for payment of Allowed Priority Claims; provided, that, prior to the Effective Date, the Debtors shall consult in good faith with Hybrid and give Hybrid or its designee reasonable written notice and an opportunity to object prior to the allowance of settlement of any Claim otherwise entitled to a distribution from the Priority Claims Reserve.

To the extent that funds held in the Priority Claims Reserve are insufficient to satisfy the amount of Allowed Priority Claims against the Estates, whether allowed as of the Effective Date or afterwards (but for the avoidance of doubt, such Claims must have been incurred and accrued prior to the Effective Date), after application of such funds in accordance with Article II of the Plan, Hybrid shall cause one or more instances of the Priority Claims Reserve Subsequent Funding to occur.

For the avoidance of doubt, funds held in the Priority Claims Reserve shall not be Liquidating Trust Assets and, to the extent Cash remains in the Priority Claims Reserve after payment of all Allowed Priority Claims, the Manager shall promptly remit such balance to Hybrid or Hybrid’s designee. For Federal income tax purposes, the Priority Claims Reserve shall be treated as a disregarded entity (or grantor trust) wholly owned by Hybrid, and Hybrid shall cause the Priority Claims Reserve to comply with all tax withholding and tax reporting obligations imposed by applicable law.

The Manager, all professionals retained by the Manager, and representatives of each of the foregoing shall be deemed exculpated and indemnified in all respects in a manner identical to the exculpation and indemnification provisions provided to the Liquidation Trustee under the terms of the Liquidating Trust Agreement.

5. Hybrid Reservation of Rights.

Hybrid reserves all rights to review and object, including through its designee, to Priority Claims asserted against the Debtors or their Estates in accordance with the terms of the Plan.

6. U.S. Trustee Statutory Fees.

The Debtors or the Liquidating Trustee, as applicable, shall pay all U.S. Trustee Fees for each quarter (including any fraction thereof) until the Chapter 11 Cases are converted, dismissed, or closed, whichever occurs first.

B. Classification and Treatment of Claims and Interests.

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, Priority Tax Claims, DIP Facility Claims, and Professional Fee Claims have not been classified and thus are excluded from the Classes of Claims and Interests set forth in Article III of the Plan.

1. Summary of Classification of Claims and Interests

All Claims and Interests, other than Administrative Claims, Priority Tax Claims, DIP Facility Claims, and Professional Fee Claims are classified in the Classes set forth in Article III of the Plan for all purposes, including voting, Confirmation, and distributions pursuant to the Plan and pursuant to sections 1122 and 1123(a)(1) of the Bankruptcy Code. A Claim or Interest is classified in a particular Class only to the extent that the Claim or Interest qualifies within the description of that Class and is classified in other Classes to the extent that any portion of the Claim or Interest qualifies within the description of such other Classes. A Claim or Interest is also classified in a particular Class for the purpose of receiving distributions pursuant to the Plan only to the extent that such Claim or


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Interest is an Allowed Claim or Allowed Interest in that Class and has not been paid, released, or otherwise satisfied prior to the Effective Date. The Debtors reserve the right to withdraw the Plan with respect to one or more Debtors while seeking Confirmation or approval of the Plan with respect to all other Debtors.

2. Class Identification.

The classification of Claims and Interests against each Debtor (as applicable) pursuant to the Plan is as set forth below. The Plan shall apply as a separate Plan for each of the Debtors, and the classification of Claims and Interests set forth in the Plan shall apply separately to each of the Debtors. All of the potential Classes for the Debtors are set forth in the Plan. Certain of the Debtors may not have Holders of Claims or Interests in a particular Class or Classes, and such Claims shall be treated as set forth in Article III.E of the Plan. For all purposes under the Plan, each Class will contain sub-Classes for each of the Debtors, as applicable.

Class Claims and Interests Status Voting Rights

1 Other Priority Claims Unimpaired Not Entitled to Vote

(Presumed to Accept)

2 Senior Loan Claims Impaired Entitled to Vote

3 Other Secured Claims Unimpaired Not Entitled to Vote


4 SVB Loan Secured Claims Impaired Entitled to Vote

5A General Unsecured Claims

against Holdings Impaired Entitled to Vote

5B General Unsecured Claims against Fisker Automotive

Impaired Entitled to Vote

6 Warranty Claims Impaired Entitled to Vote

7 Intercompany Claims Impaired Not Entitled to Vote (Deemed to Reject)

8 Section 510(b) Claims Impaired Not Entitled to Vote (Deemed to Reject)

9 Intercompany Interests Impaired Not Entitled to Vote (Deemed to Reject)

10 Holdings Interests Impaired Not Entitled to Vote (Deemed to Reject)

3. Classification of Claims and Interests.

(a) Class 1—Other Priority Claims.

(i) Classification: Class 1 consists of all Other Priority Claims.

(ii) Treatment: Except to the extent that a Holder of an Allowed Class 1 Claim agrees to a less favorable treatment of its Allowed Claim, in full and final satisfaction, compromise, settlement, and release of and in exchange for each Allowed Class 1 Other Priority Claim, each such Holder shall be paid in full with a distribution from the Priority Claims Reserve in accordance with the priorities set forth in Bankruptcy Code.

(iii) Voting: Class 1 is Unimpaired. Holders of Claims in Class 1 are not entitled to vote to accept or reject the Plan.


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(b) Class 2—Senior Loan Claims.

(i) Classification: Class 2 consists of all Senior Loan Claims.

(ii) Allowance: Senior Loan Claims shall be Allowed in the amount of the Hybrid Cash Distribution.

(iii) Treatment: On the Effective Date, each Allowed Class 2 Claim shall be satisfied, compromised, settled, and released in full in exchange for the Hybrid Cash Distribution.

(iv) Withdrawal of Deficiency Claim: The Holder of such Claim shall withdraw any Hybrid Deficiency Claim.

(v) Voting: Class 2 is Impaired. Holders of Claims in Class 2 are entitled to vote to accept or reject the Plan.

(c) Class 3—Other Secured Claims.

(i) Classification: Class 3 consists of all Other Secured Claims.

(ii) Treatment: Except to the extent that a Holder of an Allowed Class 3 Claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, and release of and in exchange for each Class 3 Claim, each such Holder shall receive, at the Liquidating Trustee’s election:

(A) with Hybrid’s consent, payment in full in Cash of such Holder’s Allowed Other Secured Claim with a distribution from the Priority Claims Reserve in accordance with the priorities set forth in Bankruptcy Code;

(B) the Liquidating Trust’s interest in the Collateral securing such Holder’s Allowed Other Secured Claim; or

(C) such other treatment rendering such Holder’s Allowed Other Secured Claim Unimpaired.

(iii) Voting: Class 3 is Unimpaired. Holders of Claims in Class 3 are not entitled to vote to accept or reject the Plan.

(d) Class 4—SVB Loan Secured Claims

(i) Classification: Class 4 consists of all SVB Loan Secured Claims.

(ii) Allowance: SVB Loan Secured Claims shall be Allowed in the amount of the SVB Cash Distribution.

(iii) Treatment: On the Effective Date, each Allowed Class 4 Claim shall be satisfied, compromised, settled, and released in full in exchange for the SVB Cash Distribution.

(iv) Voting: Class 4 is Impaired. Holders of Claims in Class 4 are entitled to vote to accept or reject the Plan.


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(e) Class 5A—General Unsecured Claims against Holdings.

(i) Classification: Class 5A consists of all General Unsecured Claims against Holdings.

(ii) Treatment: Except to the extent that a Holder of an Allowed Class 5A Claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, and release of and in exchange for each Class 5A Claim, Allowed Class 5A Claims shall receive a beneficial interest in its Pro Rata share of of the Liquidating Trust Assets.

(iii) Voting: Class 5A is Impaired. Holders of Claims in Class 5A are entitled to vote to accept or reject the Plan.

(f) Class 5B—General Unsecured Claims against Fisker Automotive.

(i) Classification: Class 5B consists of all General Unsecured Claims against Fisker Automotive.

(ii) Treatment: Except to the extent that a Holder of an Allowed Class 5B Claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, and release of and in exchange for each Class 5B Claim, Allowed Class 5B Claims shall receive a beneficial interest in its Pro Rata share of the Liquidating Trust Assets.

(iii) Voting: Class 5B is Impaired. Holders of Claims in Class 5B are entitled to vote to accept or reject the Plan.

(g) Class 6—Warranty Claims.

(i) Classification: Class 6 consists of all Warranty Claims.

(ii) Treatment: Except to the extent that a Holder of an Allowed Class 6 Claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, and release of and in exchange for each Class 6 Claim, each Holder of an Allowed Class 6 Claim shall receive:

(A) if such Holder elects to opt out of the Warranty Program, a beneficial interest in its Pro Rata share of the Liquidating Trust Assets.

(B) if such Holder does not elect to opt out of the Warranty Program, the treatment set forth in the Warranty Program.

(iii) Voting: Class 6 is Impaired. Holders of Claims in Class 6 are entitled to vote to accept or reject the Plan.

(h) Class 7—Intercompany Claims.

(i) Classification: Class 7 consists of all Intercompany Claims.

(ii) Treatment: Class 7 Claims will be canceled, released, and extinguished as of the Effective Date, and will be of no further force or effect, and Holders of Class 7 Claims will not receive any distribution on account of such Class 7 Claim; provided, however, the Liquidating Trustee may reinstate Class 7 Claims in its discretion solely to implement the Plan.


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(iii) Voting: Class 7 is Impaired. Holders of Claims in Class 7 are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and, therefore, are not entitled to vote to accept or reject the Plan.

(i) Class 8—Section 510(b) Claims.

(i) Classification: Class 8 consists of all Section 510(b) Claims.

(ii) Treatment: Class 8 Claims will be canceled, released, and extinguished as of the Effective Date, and will be of no further force or effect, and Holders of Class 8 Claims will not receive any distribution on account of such Class 8 Claims.

(iii) Voting: Class 8 is Impaired. Holders of Claims in Class 8 are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and, therefore, are not entitled to vote to accept or reject the Plan.

(j) Class 9—Intercompany Interests.

(i) Classification: Class 9 consists of all Intercompany Interests.

(ii) Treatment: Class 9 Interests will be canceled, released, and extinguished as of the Effective Date, and will be of no further force or effect, and Holders of Class 9 Interests will not receive any distribution on account of such Class 9 Interests; provided, however, the Liquidating Trustee may reinstate Class 9 Interests in its discretion solely to implement the Plan.

(iii) Voting: Class 9 is Impaired. Holders of Interests in Class 9 are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and, therefore, are not entitled to vote to accept or reject the Plan.

(k) Class 10—Holdings Interests.

(i) Classification: Class 10 consists of all Holdings Interests.

(ii) Treatment: Class 10 Interests will be canceled, released, and extinguished as of the Effective Date, and will be of no further force or effect, and Holders of Class 10 Interests will not receive any distribution on account of such Class 10 Interests.

(iii) Voting: Class 10 is Impaired. Holders of Interests in Class 10 are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and, therefore, are not entitled to vote to accept or reject the Plan.

4. The Warranty Program

As noted above, the Debtors incurred potential Warranty Claims in the ordinary course of business pursuant to certain of the Debtors’ Warranty Agreements that provided for customary limited warranty programs. These Warranty Claims may be held by the Debtors’ former Retailers and Distributors, as well as by Persons that own or formerly owned the Debtors’ vehicles. Pursuant to Section 1.10 of the Purchase Agreement, Wanxiang assumed and agreed to honor the Debtors’ obligations under the Debtors’ limited warranties on Karma sedans that existed as of the date of the Purchase Agreement in an amount not to exceed (a) $2,000 per each vehicle warrantied or (b) $400,000 in the aggregate (which amount will be increased by $1,000,000 when commercial production of the Karma sedan, or a substantially similar model, restarts and upon the production of the 250th vehicle).


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The Debtors and the Committee are negotiating with Wanxiang on potentially providing an enhanced Warranty Program that improves the treatment for Holders of Allowed Warranty Claims versus the treatment provided pursuant to the Purchase Agreement. However, there can be no guaranty that these negotiations will result in an enhanced Warranty Program, and Holders of Warranty Claims should not assume that any improved Warranty Program will be available.

Holders of Allowed Warranty Claims will automatically be included in this Warranty Program, unless such Holder elects to opt out of the Warranty Program, in which case such Warranty Claim holder will receive a beneficial interest in its Pro Rata share of the Liquidating Trust Assets pursuant to the applicable procedures set forth in the Solicitation Procedures. The Debtors will include in the Solicitation Package distributed to each Holder of Class 6 Warranty Claims a Warranty Claims Election Form, in substantially the form attached as Exhibit 4-B to the Disclosure Statement Order. The Warranty Claims Election Form contains clear instructions for executing and returning the Warranty Claims Election Form to inform the Debtors of the applicable Holder’s election to forego participation in the Warranty Program and to receive, instead, a beneficial interest in its Pro Rata share of the Liquidating Trust Assets. Any Holder of Class 6 Warranty Claims that fails to submit a Warranty Claims Election Form or that submits a Warranty Claims Election Form that is incomplete, improperly executed or delivered, or not actually received by the Administrative Advisor by 4:00 p.m. (prevailing Eastern time) on July 16, 2014, shall be deemed to accept participation in the Warranty Program as its treatment under the Plan.

5. Special Provision Governing Unimpaired Claims.

Except as otherwise provided in the Plan, nothing under the Plan shall affect the rights of the Liquidating Trustee, the Debtors, or the Debtors’ Estates in respect of any Unimpaired Claims, including all rights in respect of legal and equitable defenses to or setoffs or recoupments against any such Unimpaired Claims.

6. Elimination of Vacant Classes.

Any Class of Claims or Interests that does not have a Holder of an Allowed Claim or Allowed Interest or a Claim or Interest temporarily Allowed by the Bankruptcy Court as of the date of the Confirmation Hearing shall be deemed eliminated from the Plan for purposes of voting to accept or reject the Plan and for purposes of determining acceptance or rejection of the Plan by such Class pursuant to section 1129(a)(8) of the Bankruptcy Code.

7. Voting Classes; Presumed Acceptance by Non-Voting Classes.

If a Class contains Claims or Interests eligible to vote and no Holders of Claims or Interests eligible to vote in such Class vote to accept or reject the Plan, the Debtors shall request the Bankruptcy Court at the Confirmation Hearing to deem the Plan accepted by the Holders of such Claims or Interests in such Class.

8. Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy Code.

The Debtors shall seek Confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code with respect to any rejecting Class of Claims or Interests. The Debtors reserve the right to modify the Plan, with the reasonable consent of the Committee and Hybrid, in accordance with Article XI of the Plan to the extent, if any, that Confirmation pursuant to section 1129(b) of the Bankruptcy Code requires modification, including by modifying the treatment applicable to a Class of Claims or Interests to render such Class of Claims or Interests Unimpaired to the extent permitted by the Bankruptcy Code and the Bankruptcy Rules.

C. Means for Implementation of the Plan.

1. Sources of Consideration for Plan Distributions.

The Debtors’ Cash on hand, Sale Proceeds, the Debtors’ rights under the Purchase Agreement, the Excluded Assets, and Hybrid’s undertaking to cause one or more instances of the Priority Claims Reserve Subsequent Funding to occur shall be used to fund the distributions to Holders of Allowed Claims against the Debtors in accordance with the treatment of such Claims provided in the Plan.


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2. Hybrid Parties’ Claims Waiver.

Subject to the occurrence of each of the SVB Cash Distribution, the Hybrid Cash Distribution, and the Effective Date, each Hybrid Party shall waive and shall be deemed to have waived any distribution from the Debtors, their Estates, and the Liquidating Trust on account of any other Claims or Causes of Action such Entities hold or may hold against the Debtors or their Estates, including any Hybrid Deficiency Claim arising from the Senior Loans and/or any Claim arising from the Related Party Notes.

Notwithstanding anything in the Plan to the contrary, the Intercreditor Agreements shall remain in full force and effect and remain binding on the parties thereto (but, for the avoidance of doubt, shall not be enforceable by the Liquidating Trustee or any entity not party to the Intercreditor Agreements); provided that, to the extent any Subordinated Creditor receives any distribution under the Plan and Hybrid would otherwise be entitled to a pay-over of such distributions from the Subordinated Creditor under an Intercreditor Agreement or otherwise, Hybrid shall be deemed to waive its pay-over right and the Subordinated Creditor shall be entitled to retain such distributions to the full extent that such Subordinated Creditor receives the same Pro Rata distributions payable to Holders of the Allowed Claims of the same Class.

3. The Liquidating Trust.

On or prior to the Effective Date, the Debtors, on their own behalf and on behalf of the Beneficiaries, will execute the Liquidating Trust Agreement and will take all other steps necessary to establish the Liquidating Trust pursuant to the Liquidating Trust Agreement as further described in Article VII of the Plan. On the Effective Date, and in accordance with and pursuant to the terms of the Plan, the Debtors will transfer to the Liquidating Trust all of their rights, title, and interests in all of the Liquidating Trust Assets. For the avoidance of doubt, the Liquidating Trust is bound by the terms of the Plan and shall not commence any Cause of Action settled, released, exculpated, or enjoined pursuant to the Plan.

Notwithstanding anything to the contrary in the Plan, any disclosure or examination of any Privileged Documents shall be limited to the Liquidating Trustee and the attorneys that the Liquidating Trustee has retained on behalf of the Liquidating Trust for the purpose of pursuing Causes of Action or claims not released by the Debtors, those attorneys’ administrative support personnel, and any consulting, non-testifying experts retained by the Liquidating Trustee on behalf of the Liquidating Trust for the purpose of assisting the Liquidating Trust in pursuing such Causes of Action or claims. The Liquidating Trustee may not disclose any of the Privileged Documents (or the contents of the Privileged Documents), or otherwise take any actions that may constitute a waiver of the attorney client privilege, work product privilege, common interest privilege, or any other applicable privileges with respect to the Privileged Documents, without giving three (3) Business Days’ notice to the applicable affected party and an opportunity to object. Nothing in the Plan shall constitute a waiver of any privilege claims over any of the documents, including the Privileged Documents, that are produced to or received by the Liquidating Trust or Liquidating Trustee. For the avoidance of doubt, the Liquidating Trust is a successor-in-interest to the Debtors, and thus, the transfer of the Privileged Documents as provided herein does not impair or waive any privilege.

4. General Settlement of Claims.

Pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, and in consideration for the classification, distributions, releases, and other benefits provided under the Plan, on the Effective Date, the provisions of the Plan shall constitute a good-faith compromise and settlement of all Claims, Interests, and controversies resolved pursuant to the Plan. Without limiting the generality of the foregoing, the distributions for General Unsecured Claims are solely on account of the compromise and settlement of the dispute over the value of allegedly unperfected liens purportedly securing the Senior Loan and the extent of Hybrid's entitlement to the


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proceeds of the Estates' assets under Finnish and other applicable law pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019.18

A court may approve a proposed compromise or settlement, so long as the compromise or settlement is in the “best interest of the estate.” In re Neshaminy Office Bldg. Assocs., 62 B.R. 798, 803 (E.D. Pa. 1986). In making this determination, a court typically examines four factors: “(1) the probability of success in litigation; (2) the likely difficulties in collection; (3) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and (4) the paramount interest of the creditors.” In re Martin, 91 F.3d 389, 393 (3d Cir. 1996) (citations omitted). Further, a court need only determine that the proposed settlement or compromise is above the “lowest point in the range of reasonableness.” In re Pa. Truck Lines, Inc., 150 B.R. 595, 598 (E.D. Pa. 1992), aff’d, 8 F.3d 812 (3d Cir. 1993); see also In re World Health Alternatives, Inc., 344 B.R. 291, 296 (Bankr. D. Del. 2006) (noting that “the court does not have to be convinced that the settlement is the best possible compromise,” rather the court need only “conclude that the settlement is ‘within the reasonable range of litigation possibilities’” (citations omitted)).

The Debtors believe that their global compromise and settlement between the Debtors, the Committee, and Hybrid, as reflected by the Plan, is a sound exercise of the Debtors’ business judgment and is in the best interests of the Debtors’ Estates. Among other things, it resolves the material prospect of substantial litigation among the parties, which the Debtors believe would be expensive and lengthy due to the complexity of the issues presented. These included legal and factual issues regarding the rights to proceeds from the sale of the Debtors’ property located in foreign jurisdictions and governed by foreign laws, validity and perfection of liens securing certain inventory located outside the United States, the validity and perfection of liens securing intellectual property registered outside of the United States, and the value associated with such assets, as well as rights to adequate protection arising from the Hybrid DIP Order.

Moreover, after the Debtors conducted their investigation and analysis of the claims asserted, the Debtors believe that all parties possessed a colorable possibility of success on certain of the preceding list of issues if litigation were to go forward. Therefore, besides the detrimental cost and undue delay that such litigation would likely introduce into these chapter 11 cases, such litigation also posed significant risk to the potential recoveries of the Debtors’ General Unsecured Creditors and the successful resolution of these chapter 11 cases in the event that Hybrid prevailed. Specifically, if Hybrid were successful, General Unsecured Creditors would likely receive no recovery on account of their Claims, and the Debtors’ Estates would likely be rendered administratively insolvent. Instead, the global compromise and settlement mitigates this risk and also obtains support for the Plan from two of the Debtors’ primary constituencies—(a) their senior secured creditor and (b) the Committee, as representatives and fiduciaries of the Debtors general unsecured creditors. Accordingly, the Debtors believe that their global compromise and settlement with Hybrid and the Committee is fair, reasonable, and in the best interests of the Debtors’ Estates.

5. Corporate Action.

Upon the Effective Date, by virtue of the solicitation of votes in favor of this Plan and entry of the Confirmation Order, all actions contemplated by the Plan (including any action to be undertaken by the Liquidating Trustee) shall be deemed authorized, approved, and, to the extent taken prior to the Effective Date, ratified without any requirement for further action by Holders of Claims or Interests, the Debtors, or any other Entity or Person. All matters provided for in the Plan involving the corporate structure of the Debtors, and any corporate action required by the Debtors in connection therewith, shall be deemed to have occurred and shall be in effect, without any requirement of further action by the Debtors or the Debtors’ Estates.

18 Generally, the standards for approval of a settlement or compromise under section 1123 of the Bankruptcy Code are the

same as those under Bankruptcy Rule 9019. In re Coram Healthcare Corp., 315 B.R. 321, 334–35 (Bankr. D. Del. 2004).


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The authorizations and approvals contemplated by Article IV.E of the Plan shall be effective notwithstanding any requirements under applicable nonbankruptcy law.

6. Dissolution of Boards of the Debtors.

As of the Effective Date, the existing boards of directors of the Debtors shall be dissolved without any further action required on the part of the Debtors or the Debtors’ officers, directors, shareholders, and members and any all remaining officers or directors of each Debtor shall be dismissed without any further action required on the part of any such Debtor, the shareholders of such Debtor, or the officers and directors of such Debtor.

7. Effectuating Documents; Further Transactions.

Prior to the Effective Date, the Debtors, and on and after the Effective Date, the Liquidating Trustee is authorized to and may issue, execute, deliver, file, or record such contracts, securities, instruments, releases, and other agreements or documents and take such actions as may be necessary or appropriate to effectuate, implement, and further evidence the terms and conditions of the Plan, without the need for any approvals, authorization, or consents except for those expressly required pursuant to the Plan.

8. Exemption from Certain Taxes and Fees.

To the maximum extent provided by section 1146(a) of the Bankruptcy Code, any Post-Confirmation transfer from any Entity pursuant to, in contemplation of, or in connection with the Plan or pursuant to: (1) the issuance, distribution, transfer, or exchange of any debt, equity security, or other interest in the Debtors; or (2) the making, delivery, or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including any deeds, bills of sale, assignments, or other instruments of transfer executed in connection with any transaction arising out of, contemplated by, or in any way related to the Plan, shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, real estate transfer tax, mortgage recording tax, Uniform Commercial Code filing or recording fee, or other similar tax or governmental assessment, in each case to the extent permitted by applicable bankruptcy law, and the appropriate state or local government officials or agents shall forego collection of any such tax or governmental assessment and accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment.

9. Restructuring Fee.

On the Effective Date, the Restructuring Fee shall be disbursed from the Professional Fee Escrow in accordance with Section 2(b) of Exhibit 1 to the Order (A) Authorizing the Employment and Retention of Beilinson Advisory Group, LLC as Restructuring Advisors for the Debtors, Effective Nunc Pro Tunc to the Petition Date and (B) Waiving Certain Time-Keeping Requirements [Docket No. 522].

10. Preservation of Rights of Action.

Other than Causes of Action against an Entity that are waived, relinquished, exculpated, released, compromised, or settled in the Plan or by a Bankruptcy Court order (including, for the avoidance of doubt, any claims or Causes of Action released pursuant to Article IX.D of the Plan), the Debtors reserve and, as of the Effective Date, assign to the Liquidating Trust, any and all Causes of Action, including without limitation any actions specifically enumerated in the Plan Supplement and any actions against Bayerische Motoren Werke Aktiengesellschaft or its affiliates and representatives, whether arising before or after the Petition Date. On and after the Effective Date, the Liquidating Trustee, may pursue such Causes of Action in its sole discretion.

Subject in all respects to Article IX.D of the Plan, the Debtors shall not release any Avoidance Actions, and the Liquidating Trustee shall be authorized and empowered to enforce any such Avoidance Actions on and after the Effective Date in accordance with the terms of the Plan.


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No Entity may rely on the absence of a specific reference in the Plan, the Plan Supplement, or the Disclosure Statement to any Cause of Action against them as any indication that the Debtors or the Liquidating Trustee will not pursue any and all available Causes of Action against them. No preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion (judicial, equitable, or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of the Confirmation or Consummation. The Debtors reserve all rights arising under section 506(c) of the Bankruptcy Code with respect to all Secured Claims asserted against the Debtors or their Estates.

The Debtors reserve the Causes of Action notwithstanding the rejection of any Executory Contract or Unexpired Lease during the Chapter 11 Cases or pursuant to the Plan. Except as otherwise provided by the Plan Settlement Term Sheet, prior to the Effective Date, the Debtors, and on and after the Effective Date, the Liquidating Trustee, shall retain and shall have, including through its authorized agents or representatives, the exclusive right, authority, and discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action and to decline to do any of the foregoing without the consent or approval of any third party or further notice to or action, order, or approval of the Bankruptcy Court. Notwithstanding anything contained in the Plan to the contrary, the settlement of Claims and Causes of Action which are expressly to be settled by confirmation of the Plan itself, including without limitation, with respect to Claims and Causes of Action (i) against the Released Parties, including, without limitation, Hybrid and the Related Party lenders (ii) against SVB and DEDA, (iii) raised by the Committee Standing Motion, and (iv) described in the Plan Settlement Term Sheet, shall be resolved only by Confirmation of the Plan itself.

11. Committee Standing Motion.

On the Effective Date, the relief requested by the Committee Standing Motion shall be moot.

12. Closing of Debtors’ Cases

On the Effective Date, Fisker Automotive’s Chapter 11 Case shall be closed for all purposes, without further action by the Debtors or order of the Bankruptcy Court. For the avoidance of doubt, the closing of such case shall not have any effect, in any manner, on the Causes of Action that the Liquidating Trustee may assert in accordance with the Plan and the Liquidating Trust Agreement. The jointly administered case of FAH Liqiudating Corp., identified as Case No. 13-13087 (KG) (the “Main Case”) shall remain open and subject to the provisions of Article IV.K of the Plan. Notwithstanding anything to the contrary in the Bankruptcy Rules providing for earlier closure of the Main Case, when all Assets contributed to the Liquidating Trust in accordance with Article IV.C of the Plan have been liquidated and converted into Cash (other than those assets abandoned by the Liquidating Trust), and such Cash has been distributed in accordance with the Liquidating Trust Agreement and this Plan, the Liquidating Trustee shall seek authority from the Bankruptcy Court to close the Main Case in accordance with the Bankruptcy Code and the Bankruptcy Rules.

D. Treatment of Executory Contracts and Unexpired Leases.

1. Assumption and Assignment of Executory Contracts and Unexpired Leases.

On the Effective Date, except as otherwise provided in the Plan, each Executory Contract and Unexpired Lease not previously rejected, assumed, or assumed and assigned shall be deemed automatically rejected pursuant to sections 365 and 1123 of the Bankruptcy Code, unless such Executory Contract or Unexpired Lease: (1) is specifically described in the Plan as to be assumed in connection with confirmation of the Plan, or is specifically scheduled to be assumed or assumed and assigned pursuant to the Plan or the Plan Supplement; (2) is subject to a pending motion to assume such Unexpired Lease or Executory Contract as of the Effective Date; (3) was previously assumed or assumed and assigned to the Purchaser or another third party, as applicable, during the pendency of the Chapter 11 Cases; (4) is a contract, instrument, release, indenture, or other agreement or document entered into in connection with the Plan; (5) is a D&O Policy or an insurance policy (except with respect to any executory insurance policy or contract, if any, with Safeco Insurance, an affiliate of Liberty Mutual, which contract or policy shall be rejected pursuant to the Plan); (6) is the Purchase Agreement; or (7) is the LLC Agreement. Notwithstanding anything contained in the Plan to the contrary, the assumption of any Executory Contract or Unexpired Lease as provided in the Plan or in the Plan Supplement shall not impose, directly or indirectly, any


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obligation or other liability, monetary or otherwise, on the Liquidating Trust unless the Committee or, as applicable, the Liquidating Trust, with the approval of the Liquidating Trust Oversight Committee, each in their discretion, expressly agrees to such assumption as in the best interests of the Beneficiaries of the Liquidating Trust; provided that in all instances the Purchase Agreement and the LLC Agreement shall be assumed and assigned to the Liquidating Trust; provided further that Hybrid’s consent shall be required with respect to the assumption of any Executory Contract or Unexpired Lease that results in a Cure Cost payable as an Allowed Administrative Claim. For the avoidance of doubt, any Claims arising under the Purchase Agreement shall be treated as Administrative Claims in accordance with the Plan; provided, however, that the Purchaser’s right to the sharing of proceeds, if any, from Designated Causes of Action pursuant to Section 7.4 of the Purchase Agreement shall be satisfied after the Effective Date solely from the Liquidating Trust Assets.

2. Cure of Defaults for Assumed Executory Contracts and Unexpired Leases.

Any Cure Obligations under each Executory Contract and Unexpired Lease to be assumed pursuant to the Plan shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the Cure Obligation in Cash on the Effective Date, subject to the limitation described below, by the Debtors as an Administrative Claim or by Purchaser in accordance with the Purchase Agreement, as applicable, or on such other terms as the parties to such Executory Contracts or Unexpired Leases may otherwise agree. In the event of a dispute regarding (1) the amount of the Cure Obligation, (2) the ability of the Debtors’ Estates or any assignee to provide “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code) under the Executory Contract or Unexpired Lease to be assumed, or (3) any other matter pertaining to assumption, the Cure Obligations required by section 365(b)(1) of the Bankruptcy Code shall be satisfied following the entry of a Final Order or orders resolving the dispute and approving the assumption; provided that prior to the Effective Date, the Debtors, and on and after the Effective Date, the Liquidating Trustee, may settle any dispute regarding the amount of any Cure Cost without any further notice to any party or any action, order, or approval of the Bankruptcy Court.

At least fourteen (14) days before the Confirmation Hearing, the Debtors shall cause notice of proposed assumption and proposed Cure Obligations to be sent to applicable counterparties. Any objection by such counterparty must be filed, served, and actually received by the Debtors not later than fourteen (14) days after service of notice of the Debtors’ proposed assumption and associated Cure Obligations. Any counterparty to an Executory Contract or Unexpired Lease that fails to object timely to the proposed assumption or cure amount will be deemed to have assented to such assumption or Cure Obligation.

Assumption of any Executory Contract or Unexpired Lease pursuant to the Plan, or otherwise, shall result in the full release and satisfaction of any Claims or defaults, subject to satisfaction of the Cure Obligations, whether monetary or nonmonetary, including defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults, arising under any assumed Executory Contract or Unexpired Lease at any time before the effective date of assumption and/or assignment. Anything in the Schedules and any Proofs of Claim Filed with respect to an Executory Contract or Unexpired Lease that has been assumed and assigned shall be deemed disallowed and expunged, without further notice to or action, order, or approval of the Bankruptcy Court or any other Entity.

3. Claims Based on Rejection of Executory Contracts and Unexpired Leases.

Unless otherwise provided by an order of the Bankruptcy Court, any Proofs of Claim based on the rejection of the Debtors’ Executory Contracts or Unexpired Leases pursuant to the Plan or otherwise, must be Filed with Bankruptcy Court and served on the Debtors or, after the Effective Date, the Liquidating Trustee, as applicable, no later than fourteen (14) days after the earlier of the Effective Date or the effective date of rejection of such Executory Contract or Unexpired Lease. In addition, any objection to the rejection of an Executory Contract or Unexpired Lease must be filed with the Bankruptcy Court and served on the Debtors or, after the Effective Date, the Liquidating Trustee, as applicable, no later than fourteen (14) days after service of the Debtors’ proposed rejection of such Executory Contract or Unexpired Lease.

Any Holders of Claims arising from the rejection of an Executory Contract or Unexpired Lease for which Proofs of Claims were not timely Filed as set forth in the paragraph above shall not (1) be treated as a creditor with respect to such Claim, (2) be permitted to vote to accept or reject the Plan on account of any


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Claim arising from such rejection, or (3) participate in any distribution in the Chapter 11 Cases on account of such Claim, and any Claims arising from the rejection of an Executory Contract or Unexpired Lease not filed with the Bankruptcy Court within such time will be automatically disallowed, forever barred from assertion, and shall not be enforceable against the Debtors, the Liquidating Trustee, the Debtors’ Estates, or the property for any of the foregoing without the need for any objection by the Debtors or the Liquidating Trustee, as applicable, or further notice to, or action, order, or approval of the Bankruptcy Court or any other Entity, and any Claim arising out of the rejection of the Executory Contract or Unexpired Lease shall be deemed fully compromised, settled, and released, notwithstanding anything in the Schedules or a Proof of Claim to the contrary. All Allowed Claims arising from the rejection of the Debtors’ prepetition Executory Contracts or prepetition Unexpired Leases shall be classified as General Unsecured Claims against the appropriate Debtor, except as otherwise provided by order of the Bankruptcy Court.

4. Purchase Agreement; Designated Contracts.

The Debtors’ assumption or rejection of any Executory Contract or Unexpired Lease pursuant to the Plan shall be subject in all respects to the Purchaser’s rights and obligations, including any Cure Obligations assumed by the Purchaser in accordance with the Purchase Agreement, with respect to any such Executory Contracts or Unexpired Leases that constitute Designated Contracts (as defined in the Purchase Agreement) as set forth in the Purchase Agreement, including Section 1.5(c) thereof.

5. Modifications, Amendments, Supplements, Restatements, or Other Agreements.

Unless otherwise provided in the Plan, each assumed Executory Contract or Unexpired Lease shall include all modifications, amendments, supplements, restatements, or other agreements that in any manner affect such Executory Contract or Unexpired Lease, and all Executory Contracts and Unexpired Leases related thereto, if any, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, and any other interests, unless any of the foregoing agreements has been previously rejected or repudiated or is rejected or repudiated under the Plan.

Modifications, amendments, supplements, and restatements to prepetition Executory Contracts and Unexpired Leases that have been executed by the Debtors or the Debtors on behalf of the Debtors’ Estates during the Chapter 11 Cases shall not be deemed to alter the prepetition nature of the Executory Contract or Unexpired Lease, or the validity, priority, or amount of any Claims that may arise in connection therewith.

6. Insurance Policies.

Each insurance policy, including the D&O Policy, shall be assumed by the Debtors on behalf of the applicable Debtor effective as of the Effective Date, pursuant to sections 365 and 1123 of the Bankruptcy Code, to the extent such insurance policy is executory, unless such insurance policy previously was rejected by the Debtors or the Debtors’ Estates pursuant to a Bankruptcy Court order or is the subject of a motion to reject pending on the Effective Date, and coverage for defense and indemnity under the D&O Policy shall remain available to all individuals within the definition of “Insured” in the D&O Policy. Notwithstanding the foregoing, (x) upon the Effective Date, the Estates and the Liquidating Trust shall no longer have any interest in the D&O Policy or any payments made in accordance with their terms other than with respect to proceeds arising from, and coverage as to, claims or Causes of Action not settled and/or released pursuant to the Plan, and (y) any insurance policy or Executory Contract, if any, with Safeco Insurance, an affiliate of Liberty Mutual, shall be rejected pursuant to the Plan.

The Securities Plaintiffs have indicated that they may seek to pursue claims or causes of actions against the Debtors to the extent of available insurance proceeds under policies maintained by the Debtors on a prepetition


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basis.19 Because no such claim has actually been asserted or filed, the Debtors cannot opine on the claims or causes of action such parties may assert. However, to the extent any party seeks to exercise control over assets of the Debtors’ Estates or prosecute claims or causes of action released, exculpated, or enjoined pursuant to the Plan, such claims or causes of action would be subject to the Plan’s terms and to all rights or remedies in favor of the Debtors or the Liquidating Trust, as applicable.

The Securities Plaintiffs reserve all of their rights to recover against the proceeds of the Debtors’ directors and officers insurance policies notwithstanding the effect of the Plan.

7. Reservation of Rights.

Neither the exclusion nor inclusion of any contract or lease in the Plan Supplement, nor anything contained in the Plan, shall constitute an admission by the Debtors that any such contract or lease is in fact an Executory Contract or Unexpired Lease or that the Debtors’ Estates have any liability thereunder. In the event of a dispute regarding whether a contract or lease is or was executory or unexpired at the time of assumption or rejection, the Debtors or the Liquidating Trustee, as applicable, shall have 90 days following entry of a Final Order resolving such dispute to alter the treatment of such contract or lease as otherwise provided in the Plan.

E. Provisions Governing Distributions.

1. Calculation of Amounts to Be Distributed.

Each Holder of an Allowed Claim against the Debtors shall receive the full amount of the distributions that the Plan provides for Allowed Claims in the applicable Class from the Debtors or the Liquidating Trustee, on behalf of the Debtors or the Liquidating Trust, as applicable. In the event that any payment or act under the Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on the next succeeding Business Day, in which case such payment shall be deemed to have occurred when due. If and to the extent that there are Disputed Claims or Disputed Interests, distributions on account of any such Disputed Claims or Disputed Interests shall be made pursuant to the provisions set forth in Article VIII of the Plan. Notwithstanding anything to the contrary in the Plan, no Holder of an Allowed Claim shall, on account of such Allowed Claim, receive a distribution in excess of the Allowed amount of such Claim plus any interest accruing on such Claim that is actually payable in accordance with the Plan.

2. Rights and Powers of the Debtors, Liquidating Trustee, Manager, and Hybrid

(a) Powers of the Debtors, Liquidating Trustee, Manager, and Hybrid.

All distributions under the Plan shall be made on the Effective Date by the Debtors or thereafter by the Liquidating Trustee or the Manager, as applicable, or their designees, including with respect to distributions from the Priority Claims Reserve on account of Allowed Priority Claims; provided that prior to the Effective Date, the Debtors shall consult in good faith with Hybrid and give Hybrid or its designee reasonable written notice and an opportunity to object prior to any distributions from the Priority Claims Reserve.

After the Effective Date, (i) Hybrid and its designees or representatives as identified in the Plan Supplement (which, after the Effective Date, may include the Beilinson Advisory Group) shall have the right to object to, allow, or otherwise resolve any Priority Claim, and (ii) the Liquidating Trustee shall have the right to object, allow, or otherwise resolve any General Unsecured Claim and/or Warranty Claim. 19 See Plaintiffs’ Objection to Motion of the Debtors for Entry of an Order (A) Approving the Adequacy of the Debtors’

Disclosure Statement, (B) Approving Solicitation and Notice Procedures with Respect to Confirmation of the Debtors’ Proposed Joint Plan of Liquidation, (C) Approving the Form of Various Ballots and Notices in Connection Therewith, (D) Scheduling Certain Dates with Respect Thereto, and (E) Granting Related Relief [Docket No. 956].


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To the extent that the litigation or resolution of any Claim involves allowance of, or leaves unresolved, a Priority Claim and a General Unsecured Claim and/or Warranty Claim, then the Liquidating Trustee may object to, allow, or otherwise resolve such Priority Claim (other than the WARN Adversary Proceeding and the WARN Adversary Claims) with Hybrid’s consent in its sole discretion upon reasonable prior written notice and Hybrid and its designees or representatives may object to, allow, or otherwise resolve any such General Unsecured Claim and/or Warranty Claim with the Liquidating Trustee’s consent in its sole discretion upon reasonable prior written notice. Notwithstanding anything in the Plan to the contrary, on the Effective Date, Hybrid or its designees and the Liquidating Trustee shall have the right to defend the WARN Adversary Proceeding and the WARN Adversary Claims on behalf of the Estates; provided that any settlement with respect to the WARN Adversary Proceeding or WARN Adversary Claims shall either be (a) mutually agreeable to Hybrid and the Liquidating Trustee in their sole discretion or (b) subject to Bankruptcy Court approval following prior consultation between Hybrid or its designees and the Liquidating Trustee, and the Bankruptcy Court may take into account the reasonableness of how any such settlement is allocated between Holders of Priority Claims and Holders of General Unsecured Claims and/or Warranty Claims.

Each of Hybrid, the Liquidating Trustee, and the Manager shall use commercially reasonable efforts to coordinate in good faith regarding the reconciliation of Claims as provided in Article VI.B.1 of the Plan.

For the avoidance of doubt, to the extent Hybrid or its designees or representatives object to, allow, or otherwise resolve any Claim, including with respect to the WARN Adversary Claims and the defense of the WARN Adversary Proceeding, Hybrid shall do so at its sole cost and expense.

The Debtors, the Liquidating Trustee, and the Manager, as applicable, shall not be required to give any bond or surety or other security for the performance of its duties unless otherwise ordered by the Bankruptcy Court. Additionally, in the event that the Debtors or the Liquidating Trustee, as applicable, is so otherwise ordered, all costs and expenses of procuring any such bond or surety shall be paid for with Cash from the Liquidating Trust.

(b) Expenses Incurred On or After the Effective Date.

Except as otherwise ordered by the Bankruptcy Court, (i) the fees and expenses incurred by the Liquidating Trustee on or after the Effective Date (including taxes) and any reasonable compensation and expense reimbursement Claims (including attorney fees and expenses) made by the Liquidating Trustee shall be paid in Cash from the Liquidating Trust Assets without any further notice to or action, order, or approval of the Bankruptcy Court and (ii) the fees and expenses incurred by the Manager on or after the Effective Date (including taxes) and any reasonable compensation and expense reimbursement Claims (including attorney fees and expenses) made by the Manager shall be paid, upon 30 days’ notice to Hybrid containing sufficient back-up detail to ascertain reasonableness, in Cash from the Priority Claims Reserve without any further notice to or action, order, or approval of the Bankruptcy Court.

3. Delivery of Distributions and Undeliverable or Unclaimed Distributions.

(a) Record Date for Distribution.

On the Distribution Record Date, the Claims Register shall be closed and the Debtors, Hybrid, or the Liquidating Trustee or any other party responsible for making distributions shall instead be authorized and entitled to recognize only those record Holders listed on the Claims Register as of the close of business on the Distribution Record Date.

(b) Delivery of Distributions in General.

(i) Payments and Distributions on Disputed Claims.

Distributions made after the Effective Date to Holders of Disputed Claims that are not Allowed Claims as of the Effective Date but which later become Allowed Claims shall, in the Liquidating Trustee’s reasonable


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discretion, be deemed to have been made by the Liquidating Trustee on the Effective Date, unless the Liquidating Trustee and the applicable Holder of such Claim agree otherwise.

(ii) Special Rules for Distributions to Holders of Disputed Claims or Interests.

Notwithstanding any provision otherwise in the Plan and except as may be agreed to by, as applicable, the Debtors, Hybrid or the Liquidating Trustee, as applicable, on the one hand, and the Holder of a Disputed Claim or Interest, on the other hand, no partial payments and no partial distributions shall be made with respect to any Disputed Claim or Interests, other than with respect to Professional Claims, until all Disputed Claims or Interests held by the Holder of such Disputed Claim have become Allowed Claims or have otherwise been resolved by settlement or Final Order.

(iii) Distributions.

On and after the Effective Date, the Liquidating Trustee shall make the distributions required to be made on account of Allowed Claims or Interests under the Plan on such date. Any distribution that is not made on the Initial Distribution Date or on any other date specified in the Plan because the Claim that would have been entitled to receive that distribution is not an Allowed Claim on such date, shall be held by the Liquidating Trustee in the Disputed Claims Reserve and distributed on the next Subsequent Distribution Date that occurs after such Claim is Allowed. In accordance with Article VIII.D of the Plan, no interest shall accrue or be paid on the unpaid amount of any distribution paid pursuant to the Plan. For the avoidance of doubt, in no event shall the Liquidating Trustee or the Liquidating Trust be required to pay from the Liquidating Trust Assets moneys that are required to be funded by Hybrid pursuant to the Plan.

(c) Minimum; De Minimis Distributions.

No Cash payment of less than $100.00, in the reasonable discretion of the Debtors or the Liquidating Trustee, as applicable, shall be made to a Holder of an Allowed Claim on account of such Allowed Claim.

(d) Undeliverable Distributions and Unclaimed Property.

In the event that any distribution to any Holder is returned as undeliverable, no distribution to such Holder shall be made unless and until the Debtors or the Liquidating Trustee, as applicable, has determined the then current address of such Holder, at which time such distribution shall be made to such Holder without interest; provided, however, such distributions shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code at the expiration of six months from the date the initial distribution is made. After such date, all unclaimed property or interests in property shall revert (notwithstanding any applicable federal or state escheat, abandoned, or unclaimed property laws to the contrary) to the Liquidating Trust or the Priority Claims Reserve (as applicable) automatically and without need for a further order by the Bankruptcy Court for distribution in accordance with the Plan and the Claim of any Holder to such property or interest in property shall be released, settled, compromised, and forever barred.

(e) Cy Pres.

Notwithstanding anything to the contrary in the Plan, if the Liquidating Trustee determines that any Beneficiaries of the Liquidating Trust no longer exist or cannot otherwise be reasonably ascertained, or the Liquidating Trustee determines that the Liquidating Trust Assets are insufficient to make any further distribution economically justifiable, the Liquidating Trustee may, in its reasonable discretion, distribute the Liquidating Trust Assets that constitute Cash to a charitable organization upon the same terms and conditions provided for in the Plan. For the avoidance of doubt, the Liquidating Trust Assets subject to Article VI.C.5 of the Plan do not include the Priority Claims Reserve.

(f) Manner of Payment Pursuant to the Plan.

Any payment in Cash to be made pursuant to the Plan shall be made at the election of the Debtors or the Liquidating Trustee, as applicable, by check or by wire transfer.


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4. Compliance with Tax Requirements/Allocations.

In connection with the Plan, to the extent applicable, the Debtors, or the Liquidating Trustee, as applicable, shall comply with all tax withholding and reporting requirements imposed on it by any Governmental Unit, and all distributions pursuant to the Plan shall be subject to such withholding and reporting requirements.

Distributions in respect of Allowed Claims shall be allocated first to the principal amount of such Claims (as determined for federal income tax purposes) and then, to the extent the consideration exceeds the principal amount of the Claims, to any portion of such Claims for accrued but unpaid interest.

5. Claims Paid or Payable by Third Parties.

(a) Claims Paid by Third Parties; Recourse to Collateral.

The Debtors or the Liquidating Trustee, as applicable, shall be authorized to reduce in full a Claim, and such Claim shall be disallowed without a Claims objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court, to the extent that the Holder of such Claim receives payment in full on account of such Claim from a party that is not a Debtor or, as applicable, the Liquidating Trust, including on account of recourse to collateral held by third parties that secure such Claim. To the extent a Holder of a Claim receives a distribution on account of such Claim and receives payment from a party that is not a Debtor on account of such Claim, such Holder shall, within 14 days of receipt thereof, repay or return the distribution to the applicable Debtor, to the extent the Holder’s total recovery on account of such Claim from the third party and under the Plan exceeds the amount of such Claim as of the date of any such distribution under the Plan. The failure of such Holder to timely repay or return such distribution shall result in the Holder owing the applicable Debtor annualized interest at the Federal Judgment Rate on such amount owed for each Business Day after the 14-day grace period specified above until the amount is repaid.

Notwithstanding the foregoing, in the event a Holder of a Warranty Claim that elected to opt out of the Warranty Program receives consideration on account of a Warranty Claim under a Warranty Program established by this Plan or under the Purchase Agreement or otherwise, then any distribution from the Liquidating Trust to the Holder on account of such Warranty Claim shall be reduced by the fair value of the consideration received under the Warranty Program without any further notice to or action, order, or approval of the Bankruptcy Court.

(b) Claims Payable by Insurance, Third Parties; Recourse to Collateral.

No distributions under the Plan shall be made on account of an Allowed Claim that is payable pursuant to one of the Debtors’ insurance policies, surety agreements, other non-Debtor payment agreements, or collateral held by a third party, until the Holder of such Allowed Claim has exhausted all remedies with respect to such insurance policy, surety agreement, other non-Debtor payment agreement, or collateral, as applicable. To the extent that one or more of the Debtors’ insurers, sureties, or non-Debtor payors pays or satisfies in full or in part a Claim (if and to the extent adjudicated by a court of competent jurisdiction), or such collateral or proceeds from such collateral is used to satisfy such Claim, then immediately upon such payment, the applicable portion of such Claim shall be expunged without a Claim objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court.

(c) Applicability of Insurance Policies.

Notwithstanding anything to the contrary in the Plan or Confirmation Order, Confirmation and Consummation of the Plan shall not limit or affect the rights of any third-party beneficiary of any of the Debtor’s insurance policies with respect to such policies, including the D&O Policy, and the rights of the Debtors under any such insurance policies shall vest in such beneficiaries thereof as of the Effective Date.


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F. The Liquidating Trust and the Liquidating Trustee.

1. Liquidating Trust Creation.

On the Effective Date, the Liquidating Trust will be established and become effective for the benefit of the Beneficiaries. The Liquidating Trust Agreement shall (i) be in form and substance consistent in all respects with this Plan and be reasonably acceptable to each of the Committee, Hybrid, and the Debtors and (ii) contain customary provisions for trust agreements utilized in comparable circumstances, including any and all provisions necessary to ensure continued treatment of the Liquidating Trust as a grantor trust and the Beneficiaries as the grantors and owners thereof for federal income tax purposes. All relevant parties (including the Debtors, the Liquidating Trustee, and the Beneficiaries) will take all actions necessary to cause title to the Liquidating Trust Assets to be transferred to the Liquidating Trust.

The powers, authority, responsibilities, and duties of the Liquidating Trust, the Liquidating Trustee, and the Liquidating Trust Oversight Committee are set forth in and will be governed by the Liquidating Trust Agreement, the Plan, and the Confirmation Order.

2. Purpose of the Liquidating Trust.

The Liquidating Trust will be established for the primary purpose of liquidating its assets and making distributions in accordance with the Plan, Confirmation Order and the Liquidating Trust Agreement, with no objective to continue or engage in the conduct of a trade or business, except to the extent reasonably necessary to, and consistent with, the liquidating purpose of the Liquidating Trust.

3. Transfer of Assets to the Liquidating Trust.

The Debtors and the Liquidating Trustee will establish the Liquidating Trust on behalf of the Beneficiaries pursuant to the Liquidating Trust Agreement, with the Beneficiaries to be treated as the grantors and deemed owners of the Liquidating Trust Assets. The Debtors will irrevocably transfer, assign, and deliver to the Liquidating Trust, on behalf of the Beneficiaries, all of their rights, title, and interests in the Liquidating Trust Assets, including any claims, rights, and Causes of Action that the Debtors may hold against any Entity in accordance with the provisions of the Plan, notwithstanding any prohibition on assignment under non-bankruptcy law. The Liquidating Trust will accept and hold the Liquidating Trust Assets in the Liquidating Trust for the benefit of the Beneficiaries, subject to the Plan and the Liquidating Trust Agreement.

On the Effective Date, all Liquidating Trust Assets will vest and be deemed to vest in the Liquidating Trust in accordance with section 1141 of the Bankruptcy Code; provided, however, that the Liquidating Trust, with the consent of the Liquidating Trustee, may abandon or otherwise not accept any Liquidating Trust Assets that the Liquidating Trust believes, in good faith, have no value to the Liquidating Trust. Any Assets the Liquidating Trust so abandons or otherwise does not accept shall not vest in the Liquidating Trust. As of the Effective Date, all Liquidating Trust Assets vested in the Liquidating Trust shall be free and clear of all Liens, Claims and Interests except as otherwise specifically provided in the Plan or in the Confirmation Order. Upon the transfer by the Debtors of the Liquidating Trust Assets to the Liquidating Trust or abandonment of Liquidating Trust Assets by the Liquidating Trust, the Debtors will have no reversionary or further interest in or with respect to any Liquidating Trust Assets or the Liquidating Trust. Notwithstanding anything in the Plan to the contrary, the Liquidating Trust and the Liquidating Trustee shall be deemed to be fully bound by the terms of the Plan and the Confirmation Order.

For the avoidance of doubt, and notwithstanding anything in the Plan to the contrary, the Debtors shall not transfer or be deemed to have transferred to the Liquidating Trust any claims or Causes of Action (1) released pursuant to Article IX.D of the Plan or (2) exculpated pursuant to Article IX.F of the Plan to the extent of any such exculpation.


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4. Tax Treatment of the Liquidating Trust.

For all federal income tax purposes, the Beneficiaries of the Liquidating Trust will be treated as grantors and owners thereof and it is intended that the Liquidating Trust be classified as a Liquidating Trust under 26 C.F.R. § 301.7701–4 and that the Liquidating Trust is owned by the Beneficiaries. Accordingly, for federal income tax purposes, it is intended that the Beneficiaries be treated as if they had received a distribution of an undivided interest in the Liquidating Trust Assets and then contributed such interests to the Liquidating Trust. Accordingly, the Liquidating Trust will, in an expeditious but orderly manner, liquidate and convert to Cash the Liquidating Trust Assets, make timely distributions to the Beneficiaries pursuant to the Plan, and not unduly prolong the Liquidating Trust’s duration. The Liquidating Trust will not be deemed a successor in interest of the Debtors for any purpose other than as specifically set forth in the Plan or in the Liquidating Trust Agreement. The Liquidating Trust is intended to qualify as a “grantor trust” for federal income tax purposes with the Beneficiaries treated as grantors and owners of the trust.

The Liquidating Trust shall file returns for the Liquidating Trust, except with respect to the Disputed Claims Reserve, as a grantor trust pursuant to Treasury Regulation Section 1.671-4(a) and in accordance with the Plan. The Liquidating Trust’s taxable income, gain, loss, deduction or credit will be allocated to each holder in accordance with their relative beneficial interests in the Liquidating Trust.

As soon as possible after the Effective Date, the Liquidating Trust shall make a good faith valuation of assets of the Liquidating Trust, and such valuation shall be used consistently by all parties for all federal income tax purposes. The Liquidating Trust also shall file (or cause to be filed) any other statements, returns, or disclosures relating to the Liquidating Trust that are required by any Governmental Unit for taxing purposes.

The Liquidating Trust shall file all income tax returns with respect to any income attributable to the Disputed Claims Reserve and shall pay the federal, state and local income taxes attributable to the Disputed Claims Reserve, based on the items of income, deduction, credit or loss allocable thereto.

The Liquidating Trust may request an expedited determination of Taxes of the Debtors or of the Liquidating Trust, including the Disputed Claims Reserve, under Bankruptcy Code Section 505(b) for all returns filed for, or on behalf of, the Debtors and the Liquidating Trust for all taxable periods through the dissolution of the Liquidating Trust.

The Liquidating Trustee shall be responsible for filing all federal, state, local and foreign tax returns for the Debtors and the Liquidating Trust. The Liquidating Trust shall comply with all withholding and reporting requirements imposed by any federal, state, local, or foreign taxing authority, and all distributions made by the Liquidating Trust shall be subject to any such withholding and reporting requirements.

5. Equity Consideration.

The Liquidating Trust shall hold the Equity Consideration subject to the terms and conditions set forth in the LLC Agreement, including with respect to Section 8.2(f) thereof; provided that, the Liquidating Trust may cause the Equity Consideration to be held in a wholly-owned subsidiary of the Liquidating Trust or in a separate entity selected by the Liquidating Trustee to hold such Equity Consideration solely for the benefit of Beneficiaries to the extent provided by the LLC Agreement.

6. The Liquidating Trust Oversight Committee.

On the Effective Date, the Liquidating Trust Oversight Committee shall be formed pursuant to the Liquidating Trust Agreement. The Liquidating Trust Oversight Committee shall be comprised of no more than three (3) members, all of whom shall be selected by the Committee and all of whom shall be identified in the Plan Supplement.


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The Liquidating Trustee shall report all material matters (as described in the Liquidating Trust Agreement) to and seek approval for all material decisions (as described in the Liquidating Trust Agreement) from the Liquidating Trust Oversight Committee.

From and after the Effective Date, subject to the powers and rights of Hybrid as provided in Articles VI.B and VIII.A of the Plan, settlement by the Liquidating Trust of any General Unsecured Claims and Causes of Action shall require: (1) approval only of the Liquidating Trustee, if the amount claimed by the Liquidating Trust against a defendant, or Claim asserted by a claimant, is less than two million five hundred thousand dollars ($2,500,000); (2) approval only of the Liquidating Trustee and the Liquidating Trust Oversight Committee, if the amount claimed by the Liquidating Trust against a defendant, or Claim asserted by a claimant, is more than two million five hundred thousand dollars ($2,500,000) but less than five million dollars ($5,000,000); and (3) approval of the Liquidating Trustee, the Liquidating Trust Oversight Committee, and the Bankruptcy Court, if the amount claimed by the Liquidating Trust against a defendant, or Claim asserted by a claimant, exceeds five million dollars ($5,000,000).

7. Distribution; Withholding.

Notwithstanding anything in the Plan to the contrary, the Liquidating Trustee will make, or cause to be made, all distributions under the Plan and the Liquidating Trust Agreement other than (a) those distributions made by the Debtors on the Effective Date and (b) distributions from the Professional Fee Escrow in accordance with Article II.C of the Plan.

The Liquidating Trust may withhold from amounts distributable to any Entity any and all amounts, determined in the Liquidating Trustee’s sole discretion, required by the Plan, or applicable law, regulation, rule, ruling, directive, or other governmental requirement.

8. Insurance.

The Liquidating Trust may maintain customary insurance coverage for the protection of Entities serving as administrators and overseers of the Liquidating Trust on and after the Effective Date.

9. Other Rights and Duties.

In addition to the Liquidating Trustee’s rights and duties with respect to the Liquidating Trust, on and after the Effective Date, the Liquidating Trustee will be authorized to implement the Plan and any applicable orders of the Bankruptcy Court.

On the Effective Date, the Liquidating Trust shall: (1) take possession of all books, records, and files of the Debtors and their Estates, in all forms including electronic and hard copy, other than the Debtors’ Professionals’ Documents; and (2) provide for the retention and storage of such books, records, and files until such time as the Liquidating Trust determines, in accordance with the Liquidating Trust Agreement, that retention of same is no longer necessary or required.

Any and all rights to conduct investigations with respect to Causes of Action or claims not released by the Debtors shall vest with the Liquidating Trust and shall continue until dissolution of the Liquidating Trust, as if neither the Confirmation Date nor the Effective Date had occurred.

The filing of the final monthly report (for the month in which the Effective Date occurs) and all subsequent quarterly reports shall be the responsibility of the Liquidating Trustee.

10. Disputed Claims Reserve.

The Liquidating Trustee may maintain, in accordance with the Liquidating Trustee’s powers and responsibilities under the Plan and the Liquidating Trust Agreement, a Disputed Claims Reserve. The Liquidating Trustee may, in its reasonable discretion, distribute such amounts (net of any expenses, including any taxes relating thereto), as provided in the Plan and in the Liquidating Trust Agreement, as Disputed Claims are resolved pursuant


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to Article VIII of the Plan, and such amounts may be distributed on account of such Disputed Claims as if such Disputed Claims were Allowed Claims as of the Effective Date.

The Liquidating Trust will pay taxes on the taxable net income or gain allocable to Holders of Disputed Claims on behalf of such Holders. In the event, and to the extent, any Cash retained on account of Disputed Claims in the Disputed Claims Reserve is insufficient to pay the portion of any such taxes attributable to the taxable income arising from the assets allocable to, or retained on account of, Disputed Claims, such taxes shall be (a) reimbursed from any subsequent Cash amounts retained on account of Disputed Claims, or (b) to the extent such Disputed Claims have subsequently been resolved, deducted from any amounts distributable by the Liquidating Trust as a result of the resolutions of such Disputed Claims

11. Wind-Down.

In addition to the Liquidating Trustee’s rights and duties with respect to the Liquidating Trust, on and after the Effective Date, the Liquidating Trustee will be authorized to implement the Plan and any applicable orders of the Bankruptcy Court, and the Liquidating Trustee shall have the power and authority to take any action necessary to wind down and dissolve the Debtors’ Estates.

As soon as practicable after the Effective Date, the Liquidating Trustee shall: (1) cause the Debtors to comply with, and abide by, the terms of the Purchase Agreement; (2) file for each of the Debtors a certificate of dissolution or equivalent document, together with all other necessary corporate and company documents, to effect the dissolution of the Debtors under the applicable laws of their state of incorporation or formation (as applicable), including, but not limited to, any actions contemplated in Sections 275–283 of the General Corporation Law of the State of Delaware (the “DGCL”); (3) in the Liquidating Trustee’s reasonable discretion, complete and file all final or otherwise required federal, state, and local tax returns for each of the Debtors, and pursuant to section 505(b) of the Bankruptcy Code, may request an expedited determination of any unpaid tax liability of such Debtor or its Estate for any tax incurred during the administration of such Debtor’s Chapter 11 Case, as determined under applicable tax laws; and (4) take such other actions as the Liquidating Trustee may determine to be necessary or desirable to carry out the purposes of the Plan. For purposes of clause (2) of the preceding sentence, the Plan shall constitute a plan of distribution as contemplated in the DGCL. The certificate of dissolution or equivalent document may be executed by the Liquidating Trustee without need for any action or approval by the shareholders or Board of Directors of any Debtor. From and after the Effective Date, the Debtors (5) for all purposes shall be deemed to have withdrawn their business operations from any state in which the Debtors were previously conducting, or are registered or licensed to conduct, their business operations, and shall not be required to file any document, pay any sum, or take any other action in order to effectuate such withdrawal, (6) shall be deemed to have cancelled pursuant to this Plan all Interests, and (7) shall not be liable in any manner to any taxing authority for franchise, business, license, or similar taxes accruing on or after the Effective Date. For the avoidance of doubt, (8) the dissolution of the Debtors shall not have any effect, in any manner, on the Causes of Action that the Liquidating Trustee may assert in accordance with the Plan and the Liquidating Trust Agreement and (9) notwithstanding the Debtors’ dissolution, the Debtors shall be deemed to remain intact solely with respect to the preparation, filing, review, and resolution of applications for Professional Fee Claims.

12. Termination of the Liquidating Trust.

The Liquidating Trustee shall be discharged and the Liquidating Trust shall be terminated, at such time as (1) all Disputed Claims have been resolved, (2) all of the Liquidating Trust Assets have been liquidated, (3) all duties and obligations of the Liquidating Trustee hereunder have been fulfilled, (4) all distributions required to be made by the Liquidating Trust under the Plan and the Liquidating Trust Agreement have been made, and (5) both of the Chapter 11 Cases of the Debtors have been closed, but in no event shall the Liquidating Trust be dissolved later than five (5) years from the Effective Date unless the Bankruptcy Court, upon motion by the Liquidating Trustee within the six-month period prior to the fifth anniversary (or the end of any extension period approved by the Bankruptcy Court), determines that a fixed period extension (not to exceed three (3) years, together with any prior extensions, without a favorable letter ruling from the Internal Revenue Service that any further extension would not adversely affect the status of the Liquidating Trust as a liquidating trust for federal income tax purposes) is necessary to facilitate or complete the liquidation, recovery and distribution of the Liquidating Trust Assets; provided that the dissolution, or deemed dissolution, of the Liquidating Trust shall not affect or limit the ability of


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the Liquidating Trust to transfer the Equity Consideration in accordance with the LLC Agreement, including Section 8.2(f) thereof.

13. Transfer of Beneficial Interests.

Notwithstanding anything to the contrary in the Plan, beneficial interests in the Liquidating Trust shall not be transferrable except upon death of the interest holder or by operation of law.

14. Termination of the Liquidating Trustee.

The duties, responsibilities, and powers of the Liquidating Trustee will terminate in accordance with the terms of the Liquidating Trust Agreement.

15. Exculpation; Indemnification.

The Liquidating Trustee, the Liquidating Trust, professionals retained by the Liquidating Trust, and representatives of each of the foregoing will be exculpated and indemnified pursuant to the terms of the Liquidating Trust Agreement.

G. Procedures for Resolving Contingent, Unliquidated, and Disputed Claims and Interests.

1. Resolution of Disputed Claims.

(a) Allowance of Claims and Interests.

Prior to the Effective Date, the Debtors, and on and after the Effective Date, the Liquidating Trustee, shall have and shall retain any and all rights and defenses that the Debtors had with respect to any Claim or Interest, except with respect to any Claim or Interest deemed Allowed as of the Effective Date. Except as expressly provided in the Plan or in any order entered in the Chapter 11 Cases prior to the Effective Date (including the Confirmation Order), no Claim or Interest shall become an Allowed Claim or Interest unless and until such Claim or Interest is deemed Allowed under the Plan or the Bankruptcy Code or the Bankruptcy Court has entered a Final Order, including the Confirmation Order, in the Chapter 11 Cases allowing such Claim.

(b) Prosecution of Objections to Claims or Interests.

Subject in all respects to Article VI.B.1 of the Plan, other than with respect to Professional Fee Claims, prior to the Effective Date, the Debtors, and on or after the Effective Date, the Liquidating Trustee or Hybrid or its designee, as applicable, shall have the authority to File objections to Claims or Interests, and the exclusive authority to settle, compromise, withdraw, or litigate to judgment objections on behalf of the Debtors’ Estates to any and all Claims or Interests, regardless of whether such Claims or Interests are in a Class or otherwise.

Subject to the foregoing sentence, from and after the Effective Date, the Liquidating Trustee (a) may settle or compromise any Disputed Claim in accordance with the Liquidating Trust Agreement and Article VII of the Plan and (b) shall succeed to the Debtors’ rights with respect to any objections Filed by the Debtors that remain pending as of the Effective Date. From and after the Effective Date, the Liquidating Trustee shall have the sole authority to administer and adjust the Claims Register to reflect any such settlements or compromises without any further notice to or action, order, or approval of the Bankruptcy Court.

(c) Claims Estimation.

On and after the Effective Date, the Liquidating Trustee, may, at any time, request that the Bankruptcy Court estimate (a) any Disputed Claim pursuant to applicable law and (b) any contingent or unliquidated Claim pursuant to applicable law, including section 502(c) of the Bankruptcy Code, regardless of whether the Debtors or the Liquidating Trustee have previously objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction under 28 U.S.C. §§ 157 and 1334 to the maximum


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extent permitted by law as determined by the Bankruptcy Court to estimate any Disputed Claim, contingent Claim, or unliquidated Claim, including during the litigation concerning any objection to any Claim or during the pendency of any appeal relating to any such objection. Notwithstanding any provision otherwise in the Plan to the contrary, a Claim that has been expunged from the Claims Register but that is subject to appeal or has not been the subject of a Final Order, shall be deemed to be estimated at zero dollars, unless otherwise ordered by the Bankruptcy Court. In the event that the Bankruptcy Court estimates any Disputed Claim, contingent Claim, or unliquidated Claim, that estimated amount shall constitute either the Allowed amount of such Claim or a maximum limitation on such Claim for all purposes under the Plan, including for purposes of distributions, and the Debtors or the Liquidating Trustee, as applicable, may elect to pursue additional objections to the ultimate distribution on such Claim. If the estimated amount constitutes a maximum limitation on such Claim, the Debtors or the Liquidating Trustee, as applicable, may elect to pursue any supplemental proceedings to object to any ultimate distribution on account of such Claim. Notwithstanding section 502(j) of the Bankruptcy Code, in no event shall any Holder of a Claim that has been estimated pursuant to section 502(c) of the Bankruptcy Code or otherwise be entitled to seek reconsideration of such estimation unless such Holder has Filed a motion requesting the right to seek such reconsideration on or before 21 days after the date on which such Claim is estimated. All of the aforementioned Claims and objection, estimation, and resolution procedures are cumulative and not exclusive of one another. Claims may be estimated and subsequently compromised, settled, withdrawn, or resolved by any mechanism approved by the Bankruptcy Court.

(d) Expungement or Adjustment to Claims Without Objection.

Any Claim that has been paid, satisfied, or superseded may be expunged on the Claims Register by, as applicable, the Debtors or the Liquidating Trustee (or the Notice and Claims Agent at, as applicable, the Debtors’ or the Liquidating Trustee’s direction), and any Claim that has been amended may be adjusted thereon by, as applicable, the Debtors or the Liquidating Trustee without a Claims objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court.

(e) Deadline to File Objections to Claims or Interests.

Any objections to Claims or Interests shall be Filed no later than the Claims Objection Bar Date.

2. Allowance of DEDA Loan Claims.

On the Effective Date, the DEDA Loan Claims shall be deemed Allowed General Unsecured Claims against the Debtors’ Estates in an amount equal to $19,971,455.80; provided that the foregoing is without prejudice to (i) DEDA’s right to seek further allowance of any of DEDA’s attorneys’ fees and costs under the DEDA Agreements as a General Unsecured Claim and (ii) the right of a party in interest to object to such further claim.

3. Disallowance of Claims.

To the maximum extent provided by section 502(d) of the Bankruptcy Code, all Claims of any Entity from which property is recoverable by the Debtors or the Liquidating Trustee, as applicable, under section 542, 543, 550, or 553 of the Bankruptcy Code or that the Debtors or the Liquidating Trustee, as applicable, alleges is a transferee of a transfer that is avoidable under section 522(f), 522(h), 544, 545, 547, 548, 549, or 724(a) of the Bankruptcy Code shall be disallowed if (1) the Entity, on the one hand, and the Debtors or the Liquidating Trustee, as applicable, on the other hand, agree or the Bankruptcy Court has determined by Final Order that such Entity or transferee is liable to turnover any property or monies under any of the aforementioned sections of the Bankruptcy Code and (2) such Entity or transferee has failed to turnover such property by the date set forth in such agreement or Final Order.

4. Amendments to Claims.

After the Confirmation Date, a Claim or Interest may not be filed or amended without the authorization of the Bankruptcy Court and any such new or amended Claim Filed shall be deemed disallowed and expunged without any further notice to or action, order, or approval of the Bankruptcy Court; provided that, even with such Bankruptcy Court authorization, a Claim or Interest may be amended by the Holder of such Claim or Interest solely to decrease, but not to increase, unless otherwise provided by the Bankruptcy Court, the amount, number or priority.


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5. No Interest.

Unless otherwise specifically provided for in the Plan (including Article III of the Plan), by applicable law, or agreed-to by, as applicable, the Debtors or the Liquidating Trustee, interest shall not accrue or be paid on any Claim, and no Holder of any Claim shall be entitled to interest accruing on and after the Petition Date on account of any Claim. Without limiting the foregoing, interest shall not accrue or be paid on any Claim after the Effective Date to the extent the final distribution paid on account of such Claim occurs after the Effective Date.

H. Settlement, Release, Injunction, and Related Provisions.

1. Compromise and Settlement of Claims, Interests, and Controversies.

Pursuant to Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided pursuant to the Plan, and except as otherwise specifically provided in the Plan or in any contract, instrument, or other agreement or document created pursuant to the Plan, the distributions, rights, and treatment that are provided in the Plan shall be in complete settlement, compromise, and release, effective as of the Effective Date, of Claims, Interests, and Causes of Action of any nature whatsoever, including any interest accrued on Claims or Interests from and after the Petition Date, whether known or unknown, against, liabilities of, Liens on, obligations of, rights against, and Interests in, the Debtors or any of their assets or properties, regardless of whether any property shall have been distributed or retained pursuant to the Plan on account of such Claims and Interests, including demands, liabilities, and Causes of Action that arose before the Effective Date, any liability to the extent such Claims or Interests relate to services performed by employees of the Debtors before the Effective Date and that arise from a termination of employment, any contingent or non-contingent liability on account of representations or warranties issued on or before the Effective Date, and all debts of the kind specified in sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, in each case whether or not: (1) a Proof of Claim or proof of Interest based upon such debt, right, or Interest is Filed or deemed Filed pursuant to section 501 of the Bankruptcy Code; (2) a Claim or Interest based upon such debt, right, or Interest is Allowed pursuant to section 502 of the Bankruptcy Code; or (3) the Holder of such a Claim or Interest has accepted the Plan. Without limiting the generality of the foregoing, the distributions set forth at Article III.C.5 of the Plan and Article III.C.6 of the Plan, including the waiver of Related Party Note Claims, represent a compromise of the dispute over the value of allegedly unperfected liens purportedly securing the Senior Loan. Any default by the Debtors or their Affiliates with respect to any Claim or Interest that existed immediately before or on account of the filing of the Chapter 11 Cases shall be deemed cured on the Effective Date. The Confirmation Order shall be a judicial determination of the settlement, compromise, and release of all Claims and Interests, subject to the Effective Date occurring.

2. Release of Liens.

Except as otherwise provided in the Plan or in any contract, instrument, release, or other agreement or document created pursuant to the Plan, on the Effective Date and concurrently with the applicable distributions made pursuant to the Plan and, in the case of a Secured Claim, satisfaction in full of the portion of the Secured Claim that is Allowed as of the Effective Date, all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates shall be fully released, settled, and compromised and all rights, titles, and interests of any Holder of such mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates shall revert to the Debtors.

3. Subordinated Claims.

The allowance, classification, and treatment of all Allowed Claims and Interests and the respective distributions and treatments under the Plan take into account and conform to the relative priority and rights of the Claims and Interests in each Class in connection with any contractual, legal, and equitable subordination rights relating thereto, whether arising under general principles of equitable subordination, section 510(b) of the Bankruptcy Code, or otherwise. Pursuant to section 510 of the Bankruptcy Code, the Debtors reserve the right for the Debtors or the Liquidating Trustee, as applicable, to re-classify any Allowed Claim or Interest in accordance with any contractual, legal, or equitable subordination relating thereto.


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4. Debtor Release.

ON THE EFFECTIVE DATE AND EFFECTIVE AS OF THE EFFECTIVE DATE, EACH DEBTOR ON BEHALF OF ITSELF, ITS ESTATE, AND THE LIQUIDATING TRUST (SUCH THAT THE LIQUIDATING TRUST WILL NOT HOLD ANY CLAIMS OR CAUSES OF ACTION RELEASED PURSUANT TO ARTICLE IX.D OF THE PLAN), FOR THE GOOD AND VALUABLE CONSIDERATION PROVIDED BY EACH OF THE RELEASED PARTIES, SHALL BE DEEMED TO PROVIDE A FULL RELEASE TO EACH OF THE RELEASED PARTIES (AND EACH SUCH RELEASED PARTY SHALL BE DEEMED RELEASED BY EACH DEBTOR AND ITS ESTATE) AND THEIR RESPECTIVE PROPERTY FROM ANY AND ALL CAUSES OF ACTION AND ANY OTHER DEBTS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, ACTIONS, DERIVATIVE CLAIMS, REMEDIES, AND LIABILITIES WHATSOEVER, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING AS OF THE EFFECTIVE DATE, IN LAW, AT EQUITY, OR OTHERWISE, WHETHER FOR TORT, CONTRACT, VIOLATIONS OF FEDERAL OR STATE SECURITIES LAWS, OR OTHERWISE, BASED IN WHOLE OR IN PART UPON ANY ACT OR OMISSION, TRANSACTION, OR OTHER OCCURRENCE OR CIRCUMSTANCES EXISTING OR TAKING PLACE PRIOR TO OR ON THE EFFECTIVE DATE ARISING FROM OR RELATED IN ANY WAY TO THE DEBTORS, THE PLAN, OR THESE CHAPTER 11 CASES, INCLUDING THOSE THAT THE DEBTORS OR THE LIQUIDATING TRUST WOULD HAVE BEEN LEGALLY ENTITLED TO ASSERT OR THAT ANY HOLDER OF A CLAIM AGAINST OR INTEREST IN THE DEBTORS OR ANY OTHER ENTITY COULD HAVE BEEN LEGALLY ENTITLED TO ASSERT DERIVATIVELY OR ON BEHALF OF THE DEBTORS OR THEIR ESTATES; PROVIDED, HOWEVER, THAT THE FOREGOING “DEBTOR RELEASE” SHALL NOT OPERATE TO WAIVE OR RELEASE ANY CLAIMS OR CAUSES OF ACTION OF ANY DEBTOR OR THEIR RESPECTIVE CHAPTER 11 ESTATES AGAINST A RELEASED PARTY (1) ARISING UNDER ANY CONTRACTUAL OBLIGATION OWED TO THE DEBTORS THAT IS ENTERED INTO OR ASSUMED PURSUANT TO THE PLAN OR (2) ARISING UNDER THE PURCHASE AGREEMENT.

ENTRY OF THE CONFIRMATION ORDER SHALL CONSTITUTE THE BANKRUPTCY COURT’S APPROVAL, PURSUANT TO BANKRUPTCY RULE 9019, OF THE DEBTOR RELEASE, WHICH INCLUDES BY REFERENCE EACH OF THE RELATED PROVISIONS AND DEFINITIONS CONTAINED IN THE PLAN, AND, FURTHER, SHALL CONSTITUTE THE BANKRUPTCY COURT’S FINDING THAT THE DEBTOR RELEASE IS: (1) IN EXCHANGE FOR THE GOOD AND VALUABLE CONSIDERATION PROVIDED BY THE RELEASED PARTIES; (2) A GOOD-FAITH SETTLEMENT AND COMPROMISE OF THE CLAIMS RELEASED BY THE DEBTOR RELEASE; (3) IN THE BEST INTERESTS OF THE DEBTORS’ ESTATES AND ALL HOLDERS OF CLAIMS AND INTERESTS; (4) FAIR, EQUITABLE, AND REASONABLE; (5) GIVEN AND MADE AFTER DUE NOTICE AND OPPORTUNITY FOR HEARING; AND (6) A BAR TO ANY OF THE DEBTORS’ ESTATES ASSERTING ANY CLAIM OR CAUSE OF ACTION RELEASED PURSUANT TO THE DEBTOR RELEASE.

5. Third Party Release.

ON THE EFFECTIVE DATE AND EFFECTIVE AS OF THE EFFECTIVE DATE, THE RELEASING PARTIES SHALL BE DEEMED TO PROVIDE A FULL RELEASE TO THE RELEASED PARTIES AND THEIR RESPECTIVE PROPERTY FROM ANY AND ALL CAUSES OF ACTION AND ANY OTHER DEBTS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, ACTIONS, DERIVATIVE CLAIMS, REMEDIES, AND LIABILITIES WHATSOEVER, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING AS OF THE EFFECTIVE DATE, IN LAW, AT EQUITY, OR OTHERWISE, WHETHER FOR TORT, CONTRACT, VIOLATIONS OF FEDERAL OR STATE SECURITIES LAWS, OR OTHERWISE, BASED IN WHOLE OR IN PART UPON ANY ACT OR OMISSION, TRANSACTION, OR OTHER OCCURRENCE OR CIRCUMSTANCES EXISTING OR TAKING PLACE PRIOR TO OR ON THE EFFECTIVE DATE ARISING FROM OR RELATED IN ANY WAY TO THE DEBTORS, THE PLAN, OR THESE CHAPTER 11 CASES, INCLUDING THOSE THAT THE DEBTORS WOULD HAVE BEEN LEGALLY ENTITLED TO ASSERT OR THAT ANY HOLDER OF A CLAIM AGAINST OR INTEREST IN THE DEBTORS OR ANY OTHER ENTITY COULD HAVE BEEN LEGALLY ENTITLED TO ASSERT DERIVATIVELY OR ON BEHALF OF THE DEBTORS OR THEIR ESTATES, PROVIDED, HOWEVER, THAT, THE FOREGOING “THIRD PARTY RELEASE” SHALL NOT AFFECT ANY PROOFS OF CLAIM FILED AGAINST THE DEBTORS OR CLAIMS OR CAUSES OF ACTION PENDING AGAINST A


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RELEASED PARTY IN A COMPLAINT OR PLEADING FILED AS OF THE PETITION DATE IN A COURT OR ARBITRATION PANEL OF COMPETENT JURISDICTION; PROVIDED, FURTHER, HOWEVER, THAT, THE THIRD PARTY RELEASE SHALL PRECLUDE A RELEASING PARTY FROM AMENDING OR MODIFYING SUCH COMPLAINT OR PLEADING TO ASSERT CLAIMS OR CAUSES OF ACTION AGAINST A RELEASED PARTY THAT WAS NOT OTHERWISE A PARTY TO SUCH PROCEEDING AS OF THE PETITION DATE.

ENTRY OF THE CONFIRMATION ORDER SHALL CONSTITUTE THE BANKRUPTCY COURT’S APPROVAL, PURSUANT TO BANKRUPTCY RULE 9019, OF THE THIRD PARTY RELEASE, WHICH INCLUDES BY REFERENCE EACH OF THE RELATED PROVISIONS AND DEFINITIONS CONTAINED IN THE PLAN, AND, FURTHER, SHALL CONSTITUTE THE BANKRUPTCY COURT’S FINDING THAT THE THIRD PARTY RELEASE IS: (1) IN EXCHANGE FOR THE GOOD AND VALUABLE CONSIDERATION PROVIDED BY THE RELEASED PARTIES; (2) A GOOD-FAITH SETTLEMENT AND COMPROMISE OF THE CLAIMS RELEASED BY THE THIRD PARTY RELEASE; (3) IN THE BEST INTERESTS OF THE DEBTORS AND ALL HOLDERS OF CLAIMS AND INTERESTS; (4) FAIR, EQUITABLE, AND REASONABLE; (5) GIVEN AND MADE AFTER DUE NOTICE AND OPPORTUNITY FOR HEARING; AND (6) A BAR TO ANY OF THE RELEASING PARTIES ASSERTING ANY CLAIM RELEASED PURSUANT TO THE THIRD PARTY RELEASE. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE THIRD PARTY RELEASE SHALL NOT (1) OPERATE TO RELEASE ANY CLAIMS OR CAUSES OF ACTION HELD DIRECTLY (BUT NOT DERIVATIVELY) BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AGAINST ANY NON-DEBTOR OR (2) PRECLUDE THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION FROM ENFORCING ITS REGULATORY OR POLICE POWERS.

Any party permitted to vote on the Plan may opt out of this Third Party Release provided in Article IX.E of the Plan by checking the appropriate box to do so on such party’s Ballot. If such party checks the appropriate box, it will not be bound by the Third Party Release. The election to withhold consent to grant such release is at such party’s option, and any such party that fails to vote will be deemed to have consented to the Third Party Release. Likewise, any such party that votes to accept or reject the plan and submits a Ballot without checking the box to opt out of the Third Party Release will be deemed to consent to the Third Party Release. Accordingly, the Debtors urge any party permitted to vote on the Plan to thoroughly read such party’s Ballot, including with respect to such party’s right to opt out of the Third Party Release.

The Debtors believe the Third Party Release is entirely consensual under the established case law in the United States Bankruptcy Court for the District of Delaware. See Indianapolis Downs, LLC, 486 B.R. 286, 304–06 (Bankr. D. Del. 2013). The Debtors will be prepared to meet their burden to establish the basis for the releases, exculpations, and injunctions provided by the Plan as part of Confirmation of the Plan.

6. Exculpation.

The Exculpated Parties shall neither have, nor incur any liability to any Entity for any prepetition or postpetition act taken or omitted to be taken in connection with the Chapter 11 Cases, or related to formulating, negotiating, soliciting, preparing, disseminating, confirming, or implementing the Plan or consummating the Plan, the Disclosure Statement, or any contract, instrument, release, or other agreement or document created or entered into in connection with the Plan or any other prepetition or postpetition act taken or omitted to be taken in connection with or in contemplation of the restructuring or liquidation of the Debtors; provided that each Exculpated Party shall be entitled to rely upon the advice of counsel concerning his, her, or its duties pursuant to, or in connection with, the Plan or any other related document, instrument, or agreement. Without limiting the foregoing “Exculpation” provided under Article IX.F of the Plan, the rights of any Holder of a Claim or Interest to enforce rights arising under this Plan shall be preserved, including the right to compel payment of distributions in accordance with the Plan.

7. Injunction.

EXCEPT AS OTHERWISE PROVIDED IN THE PLAN OR THE CONFIRMATION ORDER, ALL ENTITIES WHO HAVE HELD, HOLD, OR MAY HOLD CLAIMS, INTERESTS, CAUSES OF ACTION, OR


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LIABILITIES THAT: (1) ARE SUBJECT TO COMPROMISE AND SETTLEMENT PURSUANT TO THE TERMS OF THE PLAN; (2) HAVE BEEN RELEASED PURSUANT TO ARTICLE IX.D OF THE PLAN; (3) HAVE BEEN RELEASED PURSUANT TO ARTICLE IX.E OF THE PLAN; (4) ARE SUBJECT TO EXCULPATION PURSUANT TO ARTICLE IX.F OF THE PLAN (BUT ONLY TO THE EXTENT OF THE EXCULPATION PROVIDED IN ARTICLE IX.F); OR (5) ARE OTHERWISE STAYED OR TERMINATED PURSUANT TO THE TERMS OF THE PLAN, ARE PERMANENTLY ENJOINED AND PRECLUDED, FROM AND AFTER THE EFFECTIVE DATE, FROM: (A) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING OF ANY KIND, INCLUDING ON ACCOUNT OF ANY CLAIMS, INTERESTS, CAUSES OF ACTIONS, OR LIABILITIES THAT HAVE BEEN COMPROMISED OR SETTLED AGAINST THE DEBTORS, THE LIQUIDATING TRUST, OR ANY ENTITY SO RELEASED OR EXCULPATED (OR THE PROPERTY OR ESTATE OF ANY ENTITY, DIRECTLY OR INDIRECTLY, SO RELEASED OR EXCULPATED, INCLUDING THE LIQUIDATING TRUST) ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY RELEASED, SETTLED, COMPROMISED, OR EXCULPATED CLAIMS, EQUITY INTERESTS, CAUSES OF ACTION, OR LIABILITIES; (B) ENFORCING, ATTACHING, COLLECTING, OR RECOVERING BY ANY MANNER OR MEANS ANY JUDGMENT, AWARD, DECREE, OR ORDER AGAINST THE DEBTORS, THE LIQUIDATING TRUST, OR ANY ENTITY SO RELEASED OR EXCULPATED (OR THE PROPERTY OR ESTATE OF THE DEBTORS OR ANY ENTITY SO RELEASED OR EXCULPATED) ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH RELEASED, SETTLED, COMPROMISED, OR EXCULPATED CLAIMS, EQUITY INTERESTS, CAUSES OF ACTION, OR LIABILITIES; (C) CREATING, PERFECTING, OR ENFORCING ANY LIEN, CLAIM, OR ENCUMBRANCE OF ANY KIND AGAINST THE DEBTORS, THE LIQUIDATING TRUST, OR ANY ENTITY SO RELEASED OR EXCULPATED (OR THE PROPERTY OR ESTATE OF THE DEBTORS OR ANY ENTITY SO RELEASED OR EXCULPATED) ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH RELEASED, SETTLED, COMPROMISED, OR EXCULPATED CLAIMS, EQUITY INTERESTS, CAUSES OF ACTION, OR LIABILITIES; (D) ASSERTING ANY RIGHT OF SETOFF OR SUBROGATION OF ANY KIND AGAINST ANY OBLIGATION DUE FROM THE DEBTORS OR ANY ENTITY SO RELEASED OR EXCULPATED (OR THE PROPERTY OR ESTATE OF THE DEBTORS OR ANY ENTITY SO RELEASED OR EXCULPATED) ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH RELEASED, SETTLED, COMPROMISED, OR EXCULPATED CLAIMS, EQUITY INTERESTS, CAUSES OF ACTION, OR LIABILITIES UNLESS SUCH ENTITY HAS TIMELY ASSERTED SUCH SETOFF RIGHT PRIOR TO CONFIRMATION IN A DOCUMENT FILED WITH THE BANKRUPTCY COURT EXPLICITLY PRESERVING SUCH SETOFF OR SUBROGATION, AND NOTWITHSTANDING AN INDICATION OF A CLAIM OR INTEREST OR OTHERWISE THAT SUCH ENTITY ASSERTS, HAS, OR INTENDS TO PRESERVE ANY RIGHT OF SETOFF OR SUBROGATION PURSUANT TO APPLICABLE LAW OR OTHERWISE; AND (E) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING OF ANY KIND AGAINST THE DEBTORS, THE LIQUIDATING TRUST, OR ANY ENTITY SO RELEASED OR EXCULPATED (OR THE PROPERTY OR ESTATE OF THE DEBTORS OR ANY ENTITY SO RELEASED OR EXCULPATED) ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH RELEASED, SETTLED, COMPROMISED, OR EXCULPATED CLAIMS, EQUITY INTERESTS, CAUSES OF ACTION, OR LIABILITIES RELEASED, SETTLED, OR COMPROMISED PURSUANT TO THE PLAN; PROVIDED THAT NOTHING CONTAINED IN THE PLAN SHALL PRECLUDE AN ENTITY FROM OBTAINING BENEFITS DIRECTLY AND EXPRESSLY PROVIDED TO SUCH ENTITY PURSUANT TO THE TERMS OF THE PLAN; PROVIDED, FURTHER, THAT NOTHING CONTAINED IN THE PLAN SHALL BE CONSTRUED TO PREVENT ANY ENTITY FROM DEFENDING AGAINST CLAIMS OBJECTIONS OR COLLECTION ACTIONS WHETHER BY ASSERTING A RIGHT OF SETOFF OR OTHERWISE TO THE EXTENT PERMITTED BY LAW.

8. Waiver of Statutory Limitations on Releases.

EACH RELEASING PARTY IN EACH OF THE RELEASES CONTAINED IN THE PLAN (INCLUDING UNDER ARTICLE IX OF THE PLAN) EXPRESSLY ACKNOWLEDGES THAT ALTHOUGH ORDINARILY A GENERAL RELEASE MAY NOT EXTEND TO CLAIMS WHICH THE RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR, WHICH IF KNOWN BY IT MAY HAVE MATERIALLY AFFECTED ITS SETTLEMENT WITH THE PARTY RELEASED, THEY HAVE CAREFULLY CONSIDERED AND TAKEN INTO ACCOUNT IN DETERMINING TO ENTER INTO THE ABOVE RELEASES THE POSSIBLE EXISTENCE OF SUCH UNKNOWN LOSSES OR CLAIMS. WITHOUT


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LIMITING THE GENERALITY OF THE FOREGOING, EACH RELEASING PARTY EXPRESSLY WAIVES ANY AND ALL RIGHTS CONFERRED UPON IT BY ANY STATUTE OR RULE OF LAW WHICH PROVIDES THAT A RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CLAIMANT DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY IT MAY HAVE MATERIALLY AFFECTED ITS SETTLEMENT WITH THE RELEASED PARTY, INCLUDING THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542. THE RELEASES CONTAINED IN ARTICLE IX OF THE PLAN ARE EFFECTIVE REGARDLESS OF WHETHER THOSE RELEASED MATTERS ARE PRESENTLY KNOWN, UNKNOWN, SUSPECTED OR UNSUSPECTED, FORESEEN OR UNFORESEEN.

9. Setoffs.

Except as otherwise provided in the Plan, prior to the Effective Date, the Debtors, and on and after the Effective Date, the Liquidating Trustee, pursuant to the Bankruptcy Code (including section 553 of the Bankruptcy Code), applicable nonbankruptcy law, or as may be agreed to by the Holder of a Claim or Interest, may set off against any Allowed Claim or Interest on account of any Proof of Claim or proof of Interest or other pleading Filed with respect thereto prior to the Confirmation Hearing and the distributions to be made pursuant to the Plan on account of such Allowed Claim or Interest (before any distribution is made on account of such Allowed Claim or Interest), any claims, rights, and Causes of Action of any nature that the Debtors’ Estates may hold against the Holder of such Allowed Claim or Interest, to the extent such claims, rights, or Causes of Action against such Holder have not been otherwise compromised or settled on or prior to the Effective Date (whether pursuant to the Plan or otherwise); provided that neither the failure to effect such a setoff nor the allowance of any Claim or Interest pursuant to the Plan shall constitute a waiver or release by the Debtors or the Liquidating Trustee, as applicable, of any such claims, rights, and Causes of Action that the Debtors’ Estates may possess against such Holder. In no event shall any Holder of Claims or Interests be entitled to set off any Claim or Interest against any claim, right, or Cause of Action of the Debtors’ Estates unless such Holder has timely Filed a Proof of Claim with the Bankruptcy Court preserving such setoff; provided that nothing in the Plan shall prejudice or be deemed to have prejudiced the Debtors’ or the Liquidating Trustee’s right to assert that any Holder’s setoff rights were required to have been asserted by motion or pleading filed with the Bankruptcy Court prior to the Effective Date.

10. GP Supercars

Nothing in Article IX.E of the Plan shall impair the ability of Committee Member GP Supercars & More SRL to continue to assert the Claims and Causes of Action against Henrik Fisker, Raymond J. Lane, and Bernhard Koehler in connection with the arbitration proceeding pending in Irvine, California, captioned as Case No. 50 457 t 00955 13 or in a court of appropriate jurisdiction or other appropriate forum if it is decided at some future date that such dispute is more properly resolved in such other forum.

11. Conditions to Certain Releases.

It is a condition to the releases of the Hybrid Parties pursuant to this Plan that all Related Party Note Claims held by each of Ace Strength International Limited; JR Holdings IV, Ltd.; GSR Ventures IV, L.P.; GSR Principals Fund IV, L.P.; GSR Special Situations I Limited; and FAH Loan Purchase Fund, LLC be released and expunged.

It is a condition to any releases of Raymond Lane pursuant to this Plan that all Related Party Note Claims held by SugarPine Kids Trust be released and expunged.

I. Substantial Consummation of the Plan.

1. Conditions Precedent to Consummation of the Plan.

It shall be a condition to Consummation of the Plan that the following conditions shall have been satisfied or waived pursuant to the provisions of Article X.B of the Plan:


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(a) the Bankruptcy Court shall have entered the Confirmation Order in form and substance materially consistent with this Plan in all respects and otherwise reasonably acceptable to the Debtors, Hybrid, and the Committee, which Confirmation Order shall include a provision with the specific findings set forth in Article IV.D of the Plan;

(b) the Plan Supplement, including any amendments, modifications, or supplements thereto shall be in form and substance materially consistent with this Plan in all respects and otherwise reasonably acceptable to the Debtors, Hybrid, and the Committee;

(c) the Liquidating Trustee shall have been appointed and the Liquidating Trust Agreement shall have been executed and become effective;

(d) all documents and agreements necessary to implement the Plan and the consummation of the Sale Transaction shall have (a) been tendered for delivery and (b) been effected or executed by all Entities party thereto, and all conditions precedent to the effectiveness of such documents and agreements shall have been satisfied or waived pursuant to the terms of such documents or agreements;

(e) the Liquidating Trust Cash Distribution shall have occurred;

(f) the Priority Claims Reserve shall have been established and funded; and

(g) the Professional Fee Escrow shall have been established and funded.

(h) the Hybrid Cash Distribution shall have occurred, other than with respect to amounts (if any) payable to Hybrid after the Effective Date in accordance with the Plan from the Professional Fee Escrow and/or the Priority Claims Reserve; and

(i) the SVB Cash Distribution shall have occurred.

The payments required to satisfy the Distribution Conditions Precedent shall be made contemporaneously with Consummation of the Plan, but such payments may be made only after the satisfaction of the Initial Conditions Precedent.

2. Waiver of Conditions.

The conditions to Confirmation of the Plan and Consummation of the Plan set forth in Article X of the Plan may be waived by the Debtors with the prior written consent from Hybrid and the Committee, each in their reasonable discretion.

3. Effect of Non-Occurrence of Conditions to the Effective Date.

If the Effective Date does not occur, the Plan shall be null and void in all respects and nothing contained in the Plan or the Disclosure Statement shall: (1) constitute a waiver or release of any claims by or Claims against or Interests in the Debtors; (2) prejudice in any manner the rights of the Debtors, the Debtors’ Estates, any Holders, or any other Entity; or (3) constitute an admission, acknowledgment, offer, or undertaking by the Debtors, the Debtors’ Estates, any Holders, or any other Entity in any respect.

J. Modification, Revocation, or Withdrawal of the Plan.

1. Modification and Amendments.

Subject to the limitations contained in the Plan, the Debtors reserve the right to modify the Plan as to material terms and seek Confirmation consistent with the Bankruptcy Code and, as appropriate, not resolicit votes on such modified Plan. Subject to certain restrictions and requirements set forth in section 1127 of the Bankruptcy


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Code and Bankruptcy Rule 3019 and those restrictions on modifications set forth in the Plan, the Debtors expressly reserve their rights to alter, amend, or modify materially the Plan with respect to the Debtors, one or more times, after Confirmation, and, to the extent necessary, may initiate proceedings in the Bankruptcy Court to so alter, amend, or modify the Plan, or remedy any defect or omission, or reconcile any inconsistencies in the Plan, the Disclosure Statement, or the Confirmation Order, in such matters as may be necessary to carry out the purposes and intent of the Plan. Any such modification or supplement shall be considered a modification of the Plan and shall be made in accordance with Article XI of the Plan. Any modifications to the Plan shall be consistent in all respects with the Plan Settlement Term Sheet and shall otherwise be reasonably acceptable to the Debtors, the Committee, and Hybrid.

Notwithstanding anything in the Plan to the contrary, any modification, alteration, or amendment to the Plan suggested or filed by the Debtors that would affect in any material way the economic or any other terms or effect of the settlements among the Committee, Hybrid, and the Debtors embodied in the Plan Settlement Term Sheet may become effective only with the prior written consent of Hybrid or the Committee (or Hybrid and the Committee) (as the case may be, depending on the party so affected).

Notwithstanding anything herein to the contrary, the Debtors, Hybrid, and the Committee each shall consider in good faith any additional modifications proposed by any of such parties in good faith, regardless of whether such additional modifications are contemplated by the Plan Settlement Term Sheet.

2. Effect of Confirmation on Modifications.

Entry of a Confirmation Order shall mean that all modifications or amendments to the Plan occurring after the solicitation thereof are approved pursuant to section 1127(a) of the Bankruptcy Code and do not require additional disclosure or resolicitation under Bankruptcy Rule 3019.

3. Revocation or Withdrawal of the Plan.

The Debtors reserve the right, after good-faith consultation with the Committee and Hybrid, to revoke or withdraw the Plan, including the right to revoke or withdraw the Plan for any Debtor or all Debtors, prior to the Confirmation Date. If the Debtors, in good-faith consultation with the Committee and Hybrid, revoke or withdraw the Plan with respect to any Debtor, or if Confirmation or Consummation does not occur with respect to any Debtor, then: (1) the Plan with respect to such Debtor shall be null and void in all respects; (2) any settlement or compromise embodied in the Plan with respect to such Debtor (including the fixing or limiting to an amount certain of any Claim or Interest or Class of Claims or Interests), assumption or rejection of Executory Contracts or Unexpired Leases effected by the Plan with respect to such Debtor, and any document or agreement executed pursuant to the Plan with respect to such Debtor, shall be deemed null and void; and (3) nothing contained in the Plan with respect to such Debtor shall: (a) constitute a waiver or release of any Claims or Interests; (b) prejudice in any manner the rights of the Debtors, the Debtors’ Estates, or any other Entity; or (c) constitute an admission, acknowledgement, offer, or undertaking of any sort by the Debtors, the Debtors’ Estates, or any other Entity.

K. Retention of Jurisdiction.

Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, on and after the Effective Date, the Bankruptcy Court shall retain such jurisdiction over the Chapter 11 Cases and all matters, arising out of, or related to, the Chapter 11 Cases and the Plan, including jurisdiction to:

(a) allow, disallow, determine, liquidate, classify, estimate, or establish the priority, Secured or unsecured status, or amount of any Claim or Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any and all objections to the Secured or unsecured status, priority, amount, or allowance of Claims or Interests;


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(b) decide and resolve all matters related to the granting and denying, in whole or in part, any applications for allowance of compensation or reimbursement of expenses to Professionals authorized pursuant to the Bankruptcy Code or the Plan;

(c) resolve any matters related to: (a) the assumption and assignment or rejection of any Executory Contract or Unexpired Lease to which a Debtor is party or with respect to which a Debtor may be liable in any manner and to hear, determine, and, if necessary, liquidate, any Claims arising therefrom, including Claims related to the rejection of an Executory Contract or Unexpired Lease, Cure Costs pursuant to section 365 of the Bankruptcy Code, or any other matter related to such Executory Contract or Unexpired Lease; (b) any potential contractual obligation under any Executory Contract or Unexpired Lease that is assumed; (c) the Debtors or Liquidating Trustee amending, modifying, or supplementing, after the Effective Date, pursuant to Article V of the Plan, any Executory Contracts or Unexpired Leases set forth on the list of Executory Contracts and Unexpired Leases to be assumed and assigned or rejected or otherwise; and (d) any dispute regarding whether a contract or lease is or was executory or expired;

(d) enforce Hybrid’s obligations to cause one or more instances of the Priority Claims Reserve Subsequent Funding to occur in accordance with Article II.D of the Plan;

(e) ensure that distributions to Holders of Allowed Claims and Interests are accomplished pursuant to the provisions of the Plan;

(f) adjudicate, decide, or resolve any motions, adversary proceedings, contested or litigated matters, and any other matters, and grant or deny any applications involving a Debtor that may be pending on the Effective Date;

(g) adjudicate, decide, or resolve any and all matters related to Causes of Action;

(h) enter and implement such orders as may be necessary or appropriate to execute, implement, or consummate the provisions of the Plan and all contracts, instruments, releases, indentures, and other agreements or documents created in connection with the Plan or the Disclosure Statement;

(i) enter and enforce any order for the sale of property pursuant to sections 363, 1123, or 1146(a) of the Bankruptcy Code;

(j) resolve any cases, controversies, suits, disputes, or Causes of Action that may arise in connection with the Consummation, interpretation, or enforcement of the Plan or any Entity’s obligations incurred in connection with the Plan;

(k) issue injunctions, enter and implement other orders, or take such other actions as may be necessary or appropriate to restrain interference by any Entity with Consummation or enforcement of the Plan;

(l) resolve any cases, controversies, suits, disputes, or Causes of Action with respect to the settlements, compromises, releases, injunctions, exculpations, and other provisions contained in Article IX of the Plan and enter such orders as may be necessary or appropriate to implement such releases, injunctions, and other provisions;

(m) resolve any cases, controversies, suits, disputes, or Causes of Action with respect to the repayment or return of distributions and the recovery of additional amounts owed by the Holder of a Claim or Interest for amounts not timely repaid pursuant to Article VI.E.1 of the Plan;


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(n) enter and implement such orders as are necessary or appropriate if the Confirmation Order is for any reason modified, stayed, reversed, revoked, or vacated;

(o) determine any other matters that may arise in connection with or relate to the Plan, the Disclosure Statement, the Confirmation Order, or any contract, instrument, release, indenture, or other agreement or document created in connection with the Plan or the Disclosure Statement;

(p) adjudicate any and all disputes arising from or relating to distributions under the Plan or any transactions contemplated therein;

(q) consider any modifications of the Plan, to cure any defect or omission, or to reconcile any inconsistency in any Bankruptcy Court order, including the Confirmation Order;

(r) determine requests for the payment of Claims and Interests entitled to priority pursuant to section 507 of the Bankruptcy Code;

(s) hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of the Plan, or the Confirmation Order, including disputes arising under agreements, documents, or instruments executed in connection with the Plan;

(t) hear and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;

(u) hear and determine all disputes involving the existence, nature, or scope of the Debtors’ release, including any dispute relating to any liability arising out of the termination of employment or the termination of any employee or retiree benefit program, regardless of whether such termination occurred prior to or after the Effective Date;

(v) enforce all orders previously entered by the Bankruptcy Court;

(w) hear any other matter not inconsistent with the Bankruptcy Code;

(x) enter an order concluding or closing the Chapter 11 Cases; and

(y) enforce the injunction, release, and exculpation provisions set forth in Article IX of the Plan.

L. Miscellaneous Provisions.

1. Immediate Binding Effect.

Subject to the terms of the Plan and notwithstanding Bankruptcy Rules 3020(e), 6004(h), or 7062 or otherwise, upon the occurrence of the Effective Date, the terms of the Plan, the Plan Supplement, and the Confirmation Order shall be immediately effective and enforceable and deemed binding upon the Debtors, Hybrid, the Debtors’ Estates, the Liquidating Trustee, and any and all Holders of Claims or Interests (regardless of whether such Claims or Interests are deemed to have accepted or rejected the Plan), all Entities that are parties to or are subject to the settlements, compromises, releases, and injunctions described in the Plan, each Entity acquiring property under the Plan or the Confirmation Order, and any and all non-Debtor parties to Executory Contracts and Unexpired Leases with the Debtors. All Claims and debts shall be as fixed, adjusted, or compromised, as applicable, pursuant to the Plan regardless of whether any Holder of a Claim or debt has voted on the Plan.


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2. Additional Documents.

On or before the Effective Date, the Debtors may File with the Bankruptcy Court such agreements and other documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan. The Debtors and all Holders of Claims or Interests receiving distributions pursuant to the Plan and all other parties in interest shall, prepare, execute, and deliver any agreements or documents and take any other actions as may be necessary or advisable to effectuate the provisions and intent of the Plan.

3. Dissolution of Committee.

On the Effective Date, the Committee shall dissolve and members thereof shall be compromised, settled, and released from all rights and duties from or related to the Chapter 11 Cases, except the Committee will remain intact solely with respect to the preparation, filing, review, and resolution of applications for Professional Fee Claims. The Debtors and the Liquidating Trustee shall no longer be responsible for paying any fees or expenses incurred after the Effective Date by the Committee Members.

4. Reservation of Rights.

Except as expressly set forth in the Plan, the Plan shall have no force or effect unless the Bankruptcy Court shall enter the Confirmation Order. Neither the Plan, any statement or provision contained in the Plan, nor any action taken or not taken by the Debtors or any Debtor with respect to the Plan, the Disclosure Statement, the Confirmation Order, or the Plan Supplement shall be or shall be deemed to be an admission or waiver of any rights of the Debtors or any Debtor with respect to the Holders of Claims or Interests prior to the Effective Date.

5. Successors and Assigns.

The rights, benefits, and obligations of any Entity named or referred to in the Plan or the Confirmation Order shall be binding on, and shall inure to the benefit of any heir, executor, administrator, successor or assign, Affiliate, officer, director, agent, representative, attorney, beneficiaries, or guardian, if any, of each Entity.

6. Service of Documents.

Any pleading, notice, or other document required by the Plan to be served on or delivered to the following entities and shall be served via first class mail, overnight delivery, or messenger on:

If to the Debtors to:

FAH Liquidating Corp. (f/k/a Fisker Automotive Holdings, Inc.) c/o Beilinson Advisory Group 3080 Airway Avenue Costa Mesa, California 92626 Attn.: Marc Beilinson

with copies to: Kirkland & Ellis LLP 300 North LaSalle Chicago, Illinois 60654 Attn.: Anup Sathy, P.C. and Ryan Preston Dahl

Pachulski Stang Ziehl & Jones LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, Delaware 19899-8705 (Courier 19801) Attn.: Laura Davis Jones, James E. O’Neill, and Peter J. Keane


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If to the Committee to:

Brown Rudnick LLP Seven Times Square New York, New York 10036 Attn.: Sunni Beville

If to the Purchaser to:

Sidley Austin LLP One South Dearborn Chicago, Illinois 60603 Attn.: Bojan Guzina

If to Hybrid to:

Keller & Benvenutti LLP 650 California Street, Suite 1900 San Francisco, California 94108 Attn.: Tobias S. Keller

Quinn Emanuel Urquhart & Sullivan, LLP 51 Madison Avenue, 22nd Floor New York, NY 10010 Attn.: Susheel Kirpalani

7. Term of Injunctions or Stays.

Unless otherwise provided in the Plan or in the Confirmation Order, all injunctions or stays in effect in the Chapter 11 Cases pursuant to sections 105 or 362 of the Bankruptcy Code or any order of the Bankruptcy Court, and extant on the Confirmation Date (excluding any injunctions or stays contained in the Plan or the Confirmation Order) shall remain in full force and effect to the maximum extent permitted by law. All injunctions or stays contained in the Plan or the Confirmation Order shall remain in full force and effect in accordance with their terms.

The Debtors believe that the terms of the Plan’s injunction and stay provisions and their postconfirmation applicability is a necessary component to implement the Plan’s global settlement, compromise, and release of the Claims against and Interests in the Debtors, including with respect to the settlement and compromise discussed above at Article VI.C.4. See, e.g., 11 U.S.C. § 362(c).

8. Entire Agreement.

Except as otherwise indicated, the Plan, the Confirmation Order, and the Plan Supplement supersede all previous and contemporaneous negotiations, promises, covenants, agreements, understandings, and representations on such subjects, all of which have become merged and integrated into the Plan.

9. Nonseverability of Plan Provisions.

If, prior to Confirmation, any term or provision of the Plan is held by the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void, or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration, or interpretation, the remainder of the terms and provisions of the Plan will remain in full force and effect and will in no way be affected, impaired, or invalidated by such holding, alteration, or interpretation. The Confirmation Order shall constitute a judicial determination and shall


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provide that each term and provision of the Plan, as it may have been altered or interpreted in accordance with the foregoing, is: (1) valid and enforceable pursuant to its terms; (2) integral to the Plan and may not be deleted or modified without the consent of the Debtors, the Committee, and Hybrid, such consent not to be unreasonably withheld; and (3) nonseverable and mutually dependent.

10. Waiver or Estoppel.

Each Holder of a Claim or an Interest shall be deemed to have waived any right to assert any argument, including the right to argue that its Claim or Interest should be Allowed in a certain amount, in a certain priority, Secured or not subordinated by virtue of an agreement made with the Debtors or their counsel, or any other Entity, if such agreement was not disclosed in the Plan, the Disclosure Statement, or papers Filed with the Bankruptcy Court before the Confirmation Date.

ARTICLE VII. STATUTORY REQUIREMENTS FOR CONFIRMATION OF THE PLAN

The following is a brief summary of the confirmation process. Holders of Claims and Interests are encouraged to review the relevant provisions of the Bankruptcy Code and to consult their own advisors with respect to the summary provided in the Disclosure Statement.

A. Confirmation Hearing.

Section 1128(a) of the Bankruptcy Code requires a bankruptcy court, after notice, to conduct a hearing to consider confirmation of a chapter 11 plan. Section 1128(b) of the Bankruptcy Code provides that any party in interest may object to confirmation of the Plan. The Bankruptcy Court has scheduled the Confirmation Hearing for July 28, 2014, at 10:00 a.m., prevailing Eastern Time. The Confirmation Hearing may be adjourned from time to time by the Bankruptcy Court without further notice except for an announcement of the adjourned date made at the Confirmation Hearing or the Filing of a notice of such adjournment served in accordance with the order approving the Disclosure Statement and Solicitation Procedures. Any objection to the Plan must: (1) be in writing; (2) conform to the Bankruptcy Rules and the Local Rules for the United States Bankruptcy Court for the District of Delaware; (3) state the name, address, phone number, and email address of the objecting party and the amount and nature of the Claim or Interest of such entity, if any; (4) state with particularity the basis and nature of any objection to the Plan and, if practicable, a proposed modification to the Plan that would resolve such objection; and (5) be Filed, contemporaneously with a proof of service, with the Bankruptcy Court and served so that it is actually received by the following notice parties set forth below no later than the Plan Objection Deadline. Unless an objection to the Plan is timely served and Filed, it may not be considered by the Bankruptcy Court.

Co-Counsel to the Debtors

James H.M. Sprayregen, P.C. (admitted pro hac vice) Anup Sathy, P.C. (admitted pro hac vice) Ryan Preston Dahl (admitted pro hac vice) KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, Illinois 60654

Laura Davis Jones (DE Bar No. 2436) James E. O’Neill (DE Bar No. 4042) Peter J. Keane (DE Bar No. 5503) PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, Delaware 19899-8705 (Courier 19801)


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Co-Counsel to the Committee Co-Counsel to Hybrid

Sunni P. Beville BROWN RUDNICK LLP One Financial Center Boston, Massachusetts 02111 Mark Minuti SAUL EWING LLP 222 Delaware Avenue, Suite 1200 P.O. Box 1266 Wilmington, Delaware 19899

Peter Benvenutti KELLER & BENVENUTTI LLP 650 California Street, Suite 1900 San Francisco, California 94108 Susheel Kirpalani QUINN EMANUEL URQUHART & SULLIVAN, LLP 51 Madison Avenue, 22nd Floor New York, New York 10010

U.S. Trustee

Office Of The United States Trustee The District of Delaware

844 King Street, Suite 2207 Wilmington, Delaware 19801

Attn: Mark Kenney, Esq.

B. Confirmation Standards.

At the Confirmation Hearing, the Bankruptcy Court will determine whether the Plan satisfies the requirements of section 1129 of the Bankruptcy Code. The Debtors believe that the Plan satisfies or will satisfy all of the statutory requirements of chapter 11 of the Bankruptcy Code and that they have complied or will have complied with all of the requirements of chapter 11 of the Bankruptcy Code. Specifically, the Debtors believe that the Plan satisfies or will satisfy the applicable confirmation requirements of section 1129 of the Bankruptcy Code, including those set forth below.

1. Feasibility.

The Bankruptcy Code requires that to confirm a chapter 11 plan, the Bankruptcy Court must find that confirmation of such plan is not likely to be followed by the liquidation or the need for further financial reorganization of the debtor(s) unless contemplated by the plan.

The Plan provides for the liquidation and distribution of the Debtors’ assets. Accordingly, the Debtors believe that all Plan obligations will be satisfied without the need for further reorganization of the Debtors.

2. Best Interests of Creditors.

Notwithstanding acceptance of the Plan by a voting Impaired Class, to confirm the Plan, the Bankruptcy Court must still independently determine that the Plan is in the best interests of each Holder of a Claim or Interest in any such Impaired Class that has not voted to accept the Plan, meaning that the Plan provides each such Holder with a recovery that has a value at least equal to the value of the recovery that each such Holder would receive if the debtor was liquidated under chapter 7 of the Bankruptcy Code on the Effective Date. Accordingly, if an Impaired Class does not unanimously vote to accept the Plan, the best interests test requires the Bankruptcy Court to find that the Plan provides to each member of such Impaired Class a recovery on account of the Class member’s Claim or Interest that has a value, as of the Effective Date, at least equal to the value of the recovery that each such Class member would receive if the Debtors were liquidated under chapter 7.

The Debtors believe that the Plan satisfies the best interests test because, among other things, the recoveries expected to be available to Holders of Allowed Claims under the Plan will be greater than the recoveries expected to be available in a chapter 7 liquidation.


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In a typical chapter 7 case, a trustee is elected or appointed to liquidate a debtor’s assets and to make distributions to creditors in accordance with the priorities established in the Bankruptcy Code. Generally, secured creditors are paid first from the proceeds of sales of their collateral. If any assets remain in the bankruptcy estate after satisfaction of secured creditors’ claims from their collateral, administrative expenses are next to be paid. Unsecured creditors are paid from any remaining sale proceeds, according to their respective priorities. Unsecured creditors with the same priority share in proportion to the amount of their allowed claims in relationship to the total amount of allowed claims held by all unsecured creditors with the same priority. Finally, interest holders receive the balance that remains, if any, after all creditors are paid.

Substantially all of the Debtors’ assets are being liquidated through the Debtors’ proposed Sale Transaction in accordance with the proposed Sale Order. Although the Plan effects a liquidation of the Debtors’ assets and a chapter 7 liquidation would achieve the same goal, the Debtors believe that the Plan provides a greater recovery to Holders of Allowed General Unsecured Claims than would a chapter 7 liquidation. Liquidating the Debtors’ Estates under the Plan likely provides Holders of Allowed General Unsecured Claims with a larger, more timely recovery because of the fees and expenses that would be incurred in a chapter 7 liquidation, including the potential added time and expense incurred by the chapter 7 trustee and any retained professionals in familiarizing themselves with the Chapter 11 Cases. Moreover, conversion to chapter 7 would require entry of a new bar date. See Fed. R. Bankr. P. 1019(2); 3002(c). Thus, the amount of Claims ultimately Filed and Allowed against the Debtors could materially increase, thereby reducing creditor recoveries versus those available under the Plan.

Accordingly, the Debtors believe that the Plan is in the best interests of creditors.

C. Alternative Plans.

The Debtors do not believe that there are any alternative plans for the reorganization or liquidation of the Debtors’ Estates. The Debtors believe that the Plan, as described herein, enables Holders of Claims and Interests to realize the greatest possible value under the circumstances and that, compared to any alternative plan, the Plan has the greatest chance to be confirmed and consummated.

D. Acceptance by Impaired Classes.

The Bankruptcy Code requires, as a condition to Confirmation, that, except as described in the following section, each class of claims or equity interests that is impaired under a plan, accept the plan. A class that is not “impaired” under a plan is presumed to have accepted the plan and, therefore, solicitation of acceptances with respect to such class is not required. Pursuant to section 1124 of the Bankruptcy Code, a class is “impaired” unless the plan: (1) leaves unaltered the legal, equitable, and contractual rights to which the claim or the equity interest entitles the holder of such claim or equity interest; (2) cures any default, reinstates the original terms of such obligation, and compensates the applicable party in question; or (3) provides that, on the consummation date, the holder of such claim or equity interest receives cash equal to the allowed amount of that claim or, with respect to any equity interest, any fixed liquidation preference to which the holder of such equity interest is entitled to any fixed price at which the debtor may redeem the security.

Section 1126(c) of the Bankruptcy Code defines acceptance of a plan by a class of impaired creditors as acceptance by holders of at least two-thirds (2/3) in dollar amount and more than one-half (1/2) in number of claims in that class, but for that purpose counts only those who actually vote to accept or to reject a plan. Thus, a Class of creditor Claims will have voted to accept the Plan only if two-thirds (2/3) in amount and a majority in number actually voting cast their Ballots in favor of acceptance, subject to Article III of the Plan.

Section 1126(d) of the Bankruptcy Code defines acceptance of a plan by a class of interests as acceptance by holders of at least two-thirds (2/3) in dollar amount of those interests who actually vote to accept or reject a plan. Votes that have been “designated” under section 1126(e) of the Bankruptcy Code are not included in the calculation of acceptance by a class of interests. Thus, a Class of Interests will have voted to accept the Plan only if two-thirds (2/3) in amount actually voting cast their Ballots in favor of acceptance, not counting designated votes, subject to Article III of the Plan.


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Article III.F of the Plan provides in full: “If a Class contains Claims or Interests eligible to vote and no Holders of Claims or Interests eligible to vote in such Class vote to accept or reject the Plan, the Plan shall be deemed accepted by the Holders of such Claims or Interests in such Class.” Such “deemed acceptance” by an impaired class in which no class members submit ballots satisfies section 1129(a)(10) of the Bankruptcy Code. In re Tribune Co., 464 B.R. 126, 183 (Bankr. D. Del. 2011) (“Would ‘deemed acceptance’ by a non-voting impaired class, in the absence of objection, constitute the necessary ‘consent’ to a proposed ‘per plan’ scheme? I conclude that it may.” (footnote omitted)); see In re Adelphia Commc’ns Corp., 368 B.R. 14, 259–63 (Bankr. S.D.N.Y. 2007).

E. Confirmation Without Acceptance by All Impaired Classes.

Section 1129(b) of the Bankruptcy Code allows a bankruptcy court to confirm a plan even if Impaired Classes entitled to vote on the plan have not accepted it or if an Impaired Class is deemed to reject the Plan, provided that the plan is accepted by at least one Impaired Class. Pursuant to section 1129(b) of the Bankruptcy Code, notwithstanding an impaired class’s rejection or deemed rejection of the plan, such plan will be confirmed, at the plan proponent’s request, in a procedure commonly known as “cram down,” so long as the plan does not “discriminate unfairly” and is “fair and equitable” with respect to each class of claims or equity interests that is impaired under, and has not accepted, the plan.

1. No Unfair Discrimination.

This test applies to Classes of Claims or Interests that are of equal priority and are receiving different treatment under the Plan. The test does not require that the treatment be the same or equivalent, but that such treatment be “fair.” In general, bankruptcy courts consider whether a plan discriminates unfairly in its treatment of Classes of Claims of equal rank (e.g., classes of the same legal character). The Debtors do not believe the Plan discriminates unfairly against any Impaired Class of Claims or Interests. The Debtors believe that the Plan and the treatment of all Classes of Claims and Interests satisfy the foregoing requirements for nonconsensual Confirmation.

2. Fair and Equitable Test.

This test applies to Classes of different priority and status (e.g., secured versus unsecured) and includes the general requirement that no Class of Claims receive more than 100% of the amount of the Allowed Claims in such class. As to the non-accepting Class, the test sets different standards depending on the type of Claims or Interests in such Class. As set forth below, the Debtors believe that the Plan satisfies the “fair and equitable” requirement because there is no Class of equal priority receiving more favorable treatment and no Class that is junior to such dissenting class that will receive or retain any property on account of the Claims or Interests in such Class.

(a) Secured Claims.

The condition that a plan be “fair and equitable” to a non-accepting class of secured claims includes the requirements that: (i) the holders of such secured claims retain the liens securing such claims to the extent of the allowed amount of the claims, whether the property subject to the liens is retained by the debtor or transferred to another entity under the plan; and (ii) each holder of a secured claim in the class receives deferred Cash payments totaling at least the allowed amount of such claim with a present value, as of the effective date of the plan, at least equivalent to the value of the secured claimant’s interest in the debtor’s property subject to the liens.

(b) Unsecured Claims.

The condition that a plan be “fair and equitable” to a non-accepting class of unsecured claims includes the following requirement that either: (i) the plan provides that each holder of a claim of such class receive or retain on account of such claim property of a value, as of the effective date of the plan, equal to the allowed amount of such claim; or (ii) the holder of any claim or any equity interest that is junior to the claims of such class will not receive or retain under the plan on account of such junior claim or junior equity interest any property.


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(c) Equity Interests.

The condition that a plan be “fair and equitable” to a non-accepting class of equity interests includes the requirements that either: (i) the plan provides that each holder of an equity interest in that class receives or retains under the plan on account of that equity interest property of a value, as of the effective date of the plan, equal to the greater of: (A) the allowed amount of any fixed liquidation preference to which such holder is entitled; (B) any fixed redemption price to which such holder is entitled; or (C) the value of such interest; or (ii) if the class does not receive the amount as required under (i) hereof, no class of equity interests junior to the non-accepting class may receive a distribution under the plan.

ARTICLE VIII. CERTAIN RISK FACTORS TO BE CONSIDERED BEFORE VOTING

Holders of Claims and Interests entitled to vote should read and carefully consider the risk factors set forth below, as well as the other information set forth in this Disclosure Statement and the documents delivered together with this Disclosure Statement, referred to or incorporated by reference in this Disclosure Statement, before voting to accept or reject the Plan. These factors should not be regarded as constituting the only risks present in connection with the Debtors’ business or the Plan and its implementation.

A. Risk Factors that May Affect Recovery Available to Holders of Allowed Claims and Allowed Interests Under the Plan.

1. Actual Amounts of Allowed Claims May Differ from Estimated Amounts of Allowed Claims, Thereby Adversely Affecting the Recovery of Some Holders of Allowed Claims and Allowed Interests.

The estimate of Allowed Claims and recoveries for Holders of Allowed Claims and Allowed Interests set forth in this Disclosure Statement are based on various assumptions. Should one or more of the underlying assumptions ultimately prove to be incorrect, the actual Allowed amounts of Claims may significantly vary from the estimated Claims contained in this Disclosure Statement. Moreover, the Debtors cannot determine with any certainty at this time, the number or amount of Claims that will ultimately be Allowed. Such differences may materially and adversely affect, among other things, the recoveries to Holders of Allowed Claims and Allowed Interests under the Plan.

2. Any Valuation of the Equity Interest in the Wanxiang Affiliate Designated to Acquire the Debtors’ Assets Is Speculative, and Could Potentially be Zero.

As noted above, and as more fully set forth and memorialized in the Purchase Agreement, Wanxiang’s successful bid for the Acquired Assets consisted of, among other things, a contribution of a 20% common equity interest in a Wanxiang affiliate designated to acquire the Debtors’ assets. Any valuation of this Equity Consideration is necessarily speculative, and the Debtors believe it could potentially be zero. Accordingly, the ultimate value attributable to the Equity Consideration, if any, could materially affect, among other things, recoveries to the Debtors’ creditors, including holders of General Unsecured Claims.

3. The Debtors Cannot Guaranty Recoveries Provided by the Plan.

Although the Debtors have made commercially reasonable efforts to estimate Allowed Claims, including Administrative Claims, Priority Tax Claims, and Other Priority Claims, it is possible that the actual amount of such Allowed claims is materially higher than the Debtors’ estimates. Creditor recoveries could be materially reduced or eliminated in this instance.

4. The Assets that the Liquidating Trust is Entitled to Receive Under the Plan Settlement Term Sheet May be Subject to Wanxiang’s Rights of Reimbursement.

Wanxiang has asserted that the consideration that the Liquidating Trust is entitled to receive under the Plan Settlement Term Sheet, including a substantial portion of the $20 million Liquidating Trust Cash Payment, is subject to Wanxiang’s rights of reimbursement under Section 7.4 of the Purchase Agreement, which entitles Wanxiang to


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certain reimbursements from the proceeds realized from the Designated Causes of Action (as such term is defined in the Purchase Agreement). The Committee disputes Wanxiang’s interpretation of the Purchase Agreement, and believes that no portion of the Liquidating Trust Cash Payment is subject to Wanxiang’s reimbursement rights, but if Wanxiang prevails on its position, the ultimate resolution of this matter, whether by settlement or final judgment, such reimbursement rights could materially diminish the assets available to the Liquidating Trust for distribution to General Unsecured Creditors and certain Holders of Warranty Claims, thereby materially reducing or even eliminating recoveries to such Holders. Additionally, Wanxiang believes that distributions to Holders of Allowed General Unsecured Claims could be delayed pending resolution of this dispute if such consideration had to be set aside or held in reserve.

5. Certain Claims Asserted Against the Debtors May Be Non-Dischargeable.

Sections 1141(d)(6) and 523(a) of the Bankruptcy Code limit a debtor’s ability to discharge certain claims, including claims arising under the federal False Claims Act, 31 U.S.C. § 3729 et seq. See 11 U.S.C. § 1141(d)(6). As noted above, at least one action arising under the False Claims Act has been asserted against the Debtors. Additional parties may seek to assert other Claims against the Debtors and allege that such Claims are not subject to the injunction provisions of the Plan. In the event the Debtors are subject to material liabilities not subject to the Plan’s injunction provisions, the Debtors may be unable to consummate or implement their Plan.

6. Certain Tax Implications of the Debtors’ Bankruptcy.

Holders of Allowed Claims should carefully review Article IX of this Disclosure Statement, “Certain United States Federal Tax Income Consequences,” to determine the tax implications of the Plan and the Chapter 11 Cases.

B. Certain Bankruptcy Law Considerations.

The occurrence or nonoccurrence of any or all of the following contingencies, and any others, may affect distributions available to Holders of Allowed Claims and Allowed Interests under the Plan but will not necessarily affect the validity of the vote of the Impaired Classes to accept or reject the Plan or necessarily require a re-solicitation of the votes of Holders of Claims in such Impaired Classes.

1. Parties in Interest May Object to the Plan’s Classification of Claims and Interests.

Section 1122 of the Bankruptcy Code provides that a plan may place a claim or an interest in a particular class only if such claim or interest is substantially similar to the other claims or interests in such class. The Debtors believe that the classification of the Claims and Interests under the Plan complies with the requirements set forth in the Bankruptcy Code because the Debtors created Classes of Claims and Interests, each encompassing Claims or Interests, as applicable, that are substantially similar to the other Claims and Interests in each such Class. Nevertheless, there can be no assurance that the Bankruptcy Court will reach the same conclusion.

2. Failure to Satisfy Vote Requirements.

In the event that votes are received in number and amount sufficient to enable the Bankruptcy Court to confirm the Plan, the Debtors intend to seek, as promptly as practicable thereafter, Confirmation of the Plan. In the event that sufficient votes are not received, the Debtors may seek to pursue another strategy to wind down the Estates, such as an alternative chapter 11 plan, a dismissal of the Chapter 11 Cases and an out-of-court dissolution, an assignment for the benefit of creditors, a conversion to a chapter 7 case, or other strategies. There can be no assurance that the terms of any such alternative strategies would be similar or as favorable to the Holders of Allowed Claims and Allowed Interests as those proposed in the Plan.

3. The Debtors May Not Be Able to Secure Confirmation of the Plan.

The Debtors will need to satisfy section 1129 of the Bankruptcy Code, which sets forth the requirements for confirmation of a chapter 11 plan and requires, among other things, a finding by a bankruptcy court that:


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(a) such plan “does not unfairly discriminate” and is “fair and equitable” with respect to any non-accepting classes; (b) confirmation of such plan is not likely to be followed by a liquidation or a need for further financial reorganization unless such liquidation or reorganization is contemplated by the plan; and (c) the value of distributions to non-accepting holders of claims and interests within a particular class under such plan will not be less than the value of distributions such holders would receive if the debtors were liquidated under chapter 7 of the Bankruptcy Code.

There can be no assurance that the requisite acceptances to confirm the Plan will be received. Even if the requisite acceptances are received, there can be no assurance that the Bankruptcy Court will confirm the Plan. A non-accepting Holder of an Allowed Claim or an Allowed Interest might challenge either the adequacy of this Disclosure Statement or whether the balloting procedures and voting results satisfy the requirements of the Bankruptcy Code or Bankruptcy Rules. Even if the Bankruptcy Court determines that this Disclosure Statement, the Solicitation Procedures, and the voting results are appropriate, the Bankruptcy Court can still decline to confirm the Plan if it finds that any of the statutory requirements for Confirmation have not been met, including the requirement that the terms of the Plan do not “unfairly discriminate” and are “fair and equitable” to non-accepting Classes. If the Plan is not confirmed, it is unclear what distributions, if any, Holders of Allowed Claims and Allowed Interests will receive with respect to their Allowed Claims and Allowed Interests.

The Debtors, subject to the terms and conditions of the Plan, reserve the right to modify the terms and conditions of the Plan as necessary for Confirmation. Any such modifications may result in a less favorable treatment of any Class than the treatment currently provided in the Plan. Such a less favorable treatment may include a distribution of property to the Class affected by the modification of a lesser value than currently provided in the Plan or no distribution of property whatsoever under the Plan.

4. Nonconsensual Confirmation.

In the event that any impaired class of claims or interests does not accept a chapter 11 plan, a bankruptcy court may nevertheless confirm a plan at the proponents’ request if at least one impaired class has accepted the plan (with such acceptance being determined without including the vote of any “insider” in such class), and, as to each impaired class that has not accepted the plan, the Bankruptcy Court determines that the plan “does not discriminate unfairly” and is “fair and equitable” with respect to the dissenting classes. The Debtors believe that the Plan satisfies these requirements and the Debtors may request such nonconsensual Confirmation in accordance with section 1129(b) of the Bankruptcy Code. Nevertheless, there can be no assurance that the Bankruptcy Court will reach this conclusion. In addition, the pursuit of nonconsensual Confirmation of the Plan may result in, among other things, increased expenses and the expiration of any commitment to provide support for the Plan, financially or otherwise.

5. Parties in Interest May Object to the Amount or Classification of a Claim.

Except as provided in the Plan, certain parties in interest, including the Debtors, reserve the right, under the Plan, to object to the amount or classification of any Claim. The estimates set forth in this Disclosure Statement cannot be relied upon by any Holder of a Claim where such Claim is or may be subject to an objection or is not yet Allowed. Any Holder of a Claim that is or may be subject to an objection, thus, may not receive its expected share of the estimated distributions described in this Disclosure Statement.

6. Risk of Nonoccurrence of the Effective Date.

Although the Debtors believe that the Effective Date may occur quickly after the Confirmation Date, there can be no assurance as to such timing or as to whether such an Effective Date will, in fact, occur.

7. Contingencies May Affect Votes of Impaired Classes to Accept or Reject the Plan.

The distributions available to Holders of Allowed Claims under the Plan can be affected by a variety of contingencies, including, without limitation, whether the Bankruptcy Court orders certain Allowed Claims and Allowed Interests to be subordinated to other Allowed Claims and Allowed Interests. The occurrence of any and all


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such contingencies, which may affect distributions available to Holders of Allowed Claims and Allowed Interests under the Plan, will not affect the validity of the vote taken by the Impaired Classes to accept or reject the Plan or require any sort of revote by the Impaired Classes.

8. Risk Affecting Potential Recoveries of Holders of Claims in the Voting Classes.

The Debtors cannot state with any degree of certainty what recovery will be available to Holders of Claims in the voting Classes. In particular, the Debtors cannot know, at this time, the number or size of Claims in the voting Classes which will ultimately be Allowed. The ultimate amount of Allowed Claims could materially reduce the recovery available to such creditors.

C. Disclosure Statement Disclaimer.

1. The Financial Information Contained in this Disclosure Statement has not Been Audited.

In preparing this Disclosure Statement, the Debtors and their advisors relied on financial data derived from their books and records that was available at the time of such preparation. Although the Debtors have used their reasonable business judgment to ensure the accuracy of the financial information, and any conclusions or estimates drawn from such financial information, provided in this Disclosure Statement, and while the Debtors believe that such financial information fairly reflects the financial condition of the Debtors, the Debtors are unable to warrant that the financial information contained herein, or any such conclusions or estimates drawn therefrom, is without inaccuracies.

2. Information Contained in this Disclosure Statement Is for Soliciting Votes.

The information contained in this Disclosure Statement is for the purposes of soliciting acceptances of the Plan and may not be relied upon for any other purpose.

3. This Disclosure Statement Was Not Reviewed or Approved by the United States Securities and Exchange Commission.

This Disclosure Statement was not filed with the United States Securities and Exchange Commission under the Securities Act or applicable state securities laws. Neither the United States Securities and Exchange Commission nor any state regulatory authority has passed upon the accuracy or adequacy of this Disclosure Statement, or the exhibits or the statements contained in this Disclosure Statement.

4. No Legal or Tax Advice Is Provided to You by this Disclosure Statement.

This Disclosure Statement is not legal advice to you. The contents of this Disclosure Statement should not be construed as legal, business, or tax advice. Each Holder of a Claim or an Interest should consult his or her own legal counsel, accountant, or other applicable advisor with regard to any legal, tax, and other matters concerning his or her Claim or Interest. This Disclosure Statement may not be relied upon for any purpose other than to determine how to vote on the Plan or object to Confirmation of the Plan.

5. No Admissions Made.

The information and statements contained in this Disclosure Statement will neither (a) constitute an admission of any fact or liability by any entity (including, without limitation, the Debtors) nor (b) be deemed evidence of the tax or other legal effects of the Plan on the Debtors, Holders of Allowed Claims or Allowed Interests, or any other parties in interest.

6. Failure to Identify Litigation Claims or Projected Objections.

No reliance should be placed on the fact that a particular litigation claim or projected objection to a particular Claim or Interest is, or is not, identified in this Disclosure Statement. The Debtors may seek to


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investigate, File, and prosecute Claims and Interests and may object to Claims or Interests after the Confirmation or Effective Date of the Plan irrespective of whether this Disclosure Statement identifies such Claims or Interests or objections to such Claims or Interests.

7. No Waiver of Right to Object or Right to Recover Transfers and Assets.

The vote by a Holder of a Claim or Interest for or against the Plan does not constitute a waiver or release of any claims, causes of action, or rights of the Debtors (or any entity, as the case may be) to object to that Holder’s Claim or Interest, or recover any preferential, fraudulent, or other voidable transfer of assets, regardless of whether any claims or causes of action of the Debtors or their respective Estates are specifically or generally identified in this Disclosure Statement.

8. Information Was Provided by the Debtors and Was Relied Upon by the Debtors’ Advisors.

The Debtors’ advisors have relied upon information provided by the Debtors in connection with the preparation of this Disclosure Statement. Although the Debtors’ advisors have performed certain limited due diligence in connection with the preparation of this Disclosure Statement, they have not independently verified the information contained in this Disclosure Statement.

9. Potential Exists for Inaccuracies, and the Debtors Have No Duty to Update.

The statements contained in this Disclosure Statement are made by the Debtors as of the date of this Disclosure Statement, unless otherwise specified in this Disclosure Statement, and the delivery of this Disclosure Statement after the date of this Disclosure Statement does not imply that there has not been a change in the information set forth in this Disclosure Statement since that date. While the Debtors have used their reasonable business judgment to ensure the accuracy of all of the information provided in this Disclosure Statement and in the Plan, the Debtors nonetheless cannot, and do not, confirm the current accuracy of all statements appearing in this Disclosure Statement. Further, although the Debtors may subsequently update the information in this Disclosure Statement, the Debtors have no affirmative duty to do so unless ordered to do so by the Bankruptcy Court.

10. No Representations Outside this Disclosure Statement Are Authorized.

No representations concerning or relating to the Debtors, the Chapter 11 Cases, or the Plan are authorized by the Bankruptcy Court or the Bankruptcy Code, other than as set forth in this Disclosure Statement. Any representations or inducements made to secure your acceptance or rejection of the Plan that are other than as contained in, or included with, this Disclosure Statement, should not be relied upon by you in arriving at your decision. You should promptly report unauthorized representations or inducements to the counsel to the Debtors and the U.S. Trustee.

D. Liquidation Under Chapter 7.

If no plan can be confirmed, the Debtors’ Chapter 11 Cases may be converted to cases under chapter 7 of the Bankruptcy Code, pursuant to which a trustee would be elected or appointed to liquidate the assets of the Debtors for distribution in accordance with the priorities established by the Bankruptcy Code.

ARTICLE IX. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of certain United States federal income tax consequences of the Plan to the Debtors and certain Holders of Allowed Claims. This summary is based on the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), Treasury Regulations thereunder (“Treasury Regulations”), and administrative and judicial interpretations and practice, all as in effect on the date of this Disclosure Statement and all of which are subject to change, with possible retroactive effect. Due to the lack of definitive judicial and administrative authority in a number of areas, substantial uncertainty may exist with respect to some of the tax consequences described below. No opinion of counsel has been obtained and the Debtors do not intend to seek a


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ruling from the Internal Revenue Service as to any of the tax consequences of the Plan discussed below. There can be no assurance that the Internal Revenue Service will not challenge one or more of the tax consequences of the Plan described below.

This summary does not apply to Holders of Allowed Claims that are not United States persons (as such term is defined in the Internal Revenue Code) or that are otherwise subject to special treatment under United States federal income tax law (including, without limitation, banks, governmental authorities or agencies, financial institutions, insurance companies, pass-through entities, tax-exempt organizations, brokers and dealers in securities, mutual funds, small business investment companies, employees, persons holding Allowed Claims that are a hedge against, or that are hedged against, currency risk or that are part of a straddle, constructive sale, or conversion transaction, and regulated investment companies). Moreover, this summary does not purport to cover all aspects of United States federal income taxation that may apply to the Debtors and Holders of Allowed Claims based upon their particular circumstances. Additionally, this summary does not discuss any tax consequences that may arise under any laws other than United States federal income tax law, including under state, local, or foreign tax law.

ACCORDINGLY, THE FOLLOWING SUMMARY OF CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE BASED UPON THE INDIVIDUAL CIRCUMSTANCES PERTAINING TO A HOLDER OF A CLAIM. ALL HOLDERS OF ALLOWED CLAIMS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS FOR THE FEDERAL, STATE, LOCAL, AND OTHER TAX CONSEQUENCES APPLICABLE UNDER THE PLAN.

INTERNAL REVENUE SERVICE CIRCULAR 230 DISCLOSURE: TO ENSURE COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE INTERNAL REVENUE SERVICE, ANY TAX ADVICE CONTAINED IN THIS DISCLOSURE STATEMENT (INCLUDING ANY ATTACHMENTS) IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING TAX-RELATED PENALTIES UNDER THE INTERNAL REVENUE CODE. TAX ADVICE CONTAINED IN THIS DISCLOSURE STATEMENT (INCLUDING ANY ATTACHMENTS) IS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED BY THIS DISCLOSURE STATEMENT. EACH TAXPAYER SHOULD SEEK ADVICE BASED ON THE TAXPAYER’S PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

A. Certain United States Federal Income Tax Consequences to Holders of Allowed Claims

1. Consequences to Holders of Allowed Class 2 and Class 4 Claims.

Pursuant to the Plan, Allowed Class 2 (Senior Loan Claims) and and Class 4 (SVB Claims) Claims will be exchanged for Cash. A Holder who receives Cash in exchange for its Claim pursuant to the Plan generally will recognize income, gain, or loss for United States federal income tax purposes in an amount equal to the difference between (a) the amount of Cash received in exchange for its Claim and (b) the Holder’s adjusted tax basis in its Claim. The character of such gain or loss as capital gain or loss or as ordinary income or loss will be determined by a number of factors, including the tax status of the Holder, the nature of the Claim in such Holder’s hands, whether the Claim constitutes a capital asset in the hands of the Holder, whether the Claim was purchased at a discount, and whether and to what extent the Holder has previously claimed a bad debt deduction with respect to its Claim. See the discussions of “accrued interest” and “market discount” below.

2. Consequences to Holders of Allowed Class 1, Class 3, Class 5A, and Class 5B Claims.

Pursuant to the Plan, the Debtors will liquidate and distribute certain assets to the Liquidating Trust. Each Holder of Allowed Class 1 (Other Priority Claims), Class 3 (Other Secured Claims), Class 5A (General Unsecured Claims against Holdings) and Class 5B (General Unsecured Claims against Fisker Automotive) Claims will be exchanged for their Pro Rata share of the beneficial interests in the Liquidating Trust.

Subject to definitive guidance from the IRS or a court of competent jurisdiction to the contrary, pursuant to Treasury Regulation Section 301.7701-4(d) and related regulations, the Debtors believe that the Liquidating Trust


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should be treated as a grantor trust setup for the benefit of the Holders of Class 1, Class 3, Class 5A, and Class 5B Claims. Holders that receive Liquidating Trust interests will be treated for United States federal income tax purposes as receiving their pro rata share of the Liquidating Trust’s assets from the Debtors in a taxable exchange and then depositing them in the Liquidating Trust in exchange for Liquidating Trust interests. Each such Holder should recognize gain or loss equal to the difference between (a) the fair market value of the Liquidating Trust interests received in exchange for such Claims and (b) such Holder’s adjusted tax basis in the Claims surrendered by such Holder.

The character of such gain or loss as capital gain or loss or as ordinary income or loss will be determined by a number of factors, including the tax status of the Holder, the nature of the Claim in such Holder’s hands, whether the Claim constitutes a capital asset in the hands of the Holder, whether the Claim was purchased at a discount, and whether and to what extent the Holder has previously claimed a bad debt deduction with respect to its Claim. See the discussions of “accrued interest” and “market discount” below. A Holder’s tax basis in the Liquidating Trust interests should equal their fair market value as of the Effective Date. A Holder’s holding period for the Liquidating Trust interests should begin on the day following the Effective Date.

Holders of Class 1, Class 3, Class 5A, and Class 5B Claims that receive Liquidating Trust interests will be required to report in their United States federal income tax returns their share of the Liquidating Trust’s items of income, gain, loss, deduction, and credit in the year recognized by the Liquidating Trust, which may include partnership income, gain, loss, deduction, and credit attributable to the Equity Consideration held by Liquidating Trust. This requirement may result in Holders being subject to tax on their allocable share of the Liquidating Trust’s taxable income prior to receiving any cash distributions from the Liquidating Trust.

As noted above, this summary does not apply to Holders of Allowed Claims that are not United States persons, as such term is defined in the Internal Revenue Code (“Non-U.S. Holders”). The tax consequences to Non-U.S. Holders is complex and will vary depending on the circumstances and activities of such Holder. Each Non-U.S. Holder of Class 1, Class 3, Class 5A, and Class 5B Claims is urged to consult with its own tax advisor regarding the U.S. federal, state local and non-U.S. tax consequences of receipt of the Liquidation Trust interests, including any tax consequences attributable to the Equity Consideration held by Liquidating Trust.

It is plausible that a Holder receiving the Liquidating Trust interests could treat the transaction as an “open” transaction for United States federal tax purposes, in which case the recognition of any gain or loss on the transaction might be deferred pending the determination of the amount of the proceeds ultimately received from the Liquidating Trust. The United States federal income tax consequences of an open transaction are uncertain and highly complex, and a holder should consult with its own tax advisor if it believes open transaction treatment might be appropriate.

HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE RECOGNITION OF GAIN OR LOSS, FOR FEDERAL INCOME TAX PURPOSES, ON THE SATISFACTION OF THEIR CLAIMS.

3. Accrued Interest.

A portion of the consideration received by Holders of Allowed Claims may be attributable to accrued interest on such Claims. Such amount should be taxable to that Holder as interest income if such accrued interest has not been previously included in the Holder’s gross income for United States federal income tax purposes. Conversely, Holders of Claims may be able to recognize a deductible loss to the extent any accrued interest on the Claims was previously included in the Holder’s gross income but was not paid in full by the Debtors.

If the fair value of the consideration is not sufficient to fully satisfy all principal and interest on Allowed Claims, the extent to which such consideration will be attributable to accrued interest is unclear. Under the Plan, the aggregate consideration to be distributed to Holders of Allowed Claims in each Class will be allocated first to the principal amount of Allowed Claims, with any excess allocated to unpaid interest that accrued on such Claims, if any. Certain legislative history indicates that an allocation of consideration as between principal and interest provided in a chapter 11 plan is binding for United States federal income tax purposes, while certain Treasury Regulations generally treat payments as allocated first to any accrued but unpaid interest and then as a payment of


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principal. The Internal Revenue Service could take the position that the consideration received by the Holder should be allocated in some way other than as provided in the Plan. Holders of Claims should consult their own tax advisors regarding the proper allocation of the consideration received by them under the Plan.

HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE ALLOCATION OF CONSIDERATION RECEIVED IN SATISFACTION OF THEIR CLAIMS AND THE FEDERAL INCOME TAX TREATMENT OF ACCRUED INTEREST.

4. Market Discount.

Under the “market discount” provisions of the Internal Revenue Code, some or all of any gain realized by a Holder of a Claim who exchanges the Claim for an amount may be treated as ordinary income (instead of capital gain), to the extent of the amount of “market discount” on the debt instruments constituting the exchanged Claim. In general, a debt instrument is considered to have been acquired with “market discount” if it is acquired other than on original issue and if its Holder’s adjusted tax basis in the debt instrument is less than (a) the sum of all remaining payments to be made on the debt instrument, excluding “qualified stated interest” or (b) in the case of a debt instrument issued with original issue discount, its adjusted issue price, in each case, by at least a de minimis amount (equal to 0.25% of the sum of all remaining payments to be made on the debt instrument, excluding qualified stated interest, multiplied by the number of remaining whole years to maturity).

Any gain recognized by a Holder on the taxable disposition of Allowed Claims (determined as described above) that were acquired with market discount should be treated as ordinary income to the extent of the market discount that accrued thereon while the Allowed Claims were considered to be held by the Holder (unless the Holder elected to include market discount in income as it accrued).

5. Information Reporting and Backup Withholding.

In general, information reporting requirements may apply to distributions or payments under the Plan. Additionally, under the backup withholding rules, a Holder of a Claim may be subject to backup withholding (currently at a rate of 28%) with respect to distributions or payments made pursuant to the Plan unless that Holder: (a) comes within certain exempt categories (which generally include corporations) and, when required, demonstrates that fact; or (b) timely provides a correct taxpayer identification number and certifies under penalty of perjury that the taxpayer identification number is correct and that the Holder is not subject to backup withholding because of a failure to report all dividend and interest income. Backup withholding is not an additional tax but is, instead, an advance payment that may be refunded to the extent it results in an overpayment of tax; provided that the required information is timely provided to the Internal Revenue Service.

The Debtors, or the applicable withholding agent, will withhold all amounts required by law to be withheld from payments of interest. The Debtors will comply with all applicable reporting requirements of the Internal Revenue Service.

THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN ARE COMPLEX. THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF UNITED STATES FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO A PARTICULAR HOLDER OF A CLAIM IN LIGHT OF SUCH HOLDER’S CIRCUMSTANCES AND INCOME TAX SITUATION. ALL HOLDERS OF CLAIMS AGAINST THE DEBTORS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE TRANSACTION CONTEMPLATED BY THE RESTRUCTURING, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR FOREIGN TAX LAWS, AND OF ANY CHANGE IN APPLICABLE TAX LAWS.

B. Certain United States Federal Income Tax Consequences to the Debtors.

The Debtors may recognize taxable gain or loss as a result of Consummation of the Plan upon the sale of its assets in an amount equal to the difference between the fair market value of the assets sold and the applicable Debtor’s tax basis in such assets. Thus the amount of gain or loss recognized will depend on the value of the assets


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sold, which cannot be known with certainty until the Plan is consummated. It is possible the Debtors will recognize taxable income or gain in connection with Consummation of the Plan and may not have sufficient net operating losses or other tax attributes to fully offset the amount of gain recognized, in which case the Debtors will be required to pay cash income taxes (federal and state) with respect to the amount of net income (and the Debtors’ ability to apply net operating losses against the alternative minimum taxable income may subject to limitation) and will reduce the amount of Cash proceeds available to be distributed to Holders of the Allowed Claims.

1. Cancellation of Debt Income.

Under the Internal Revenue Code, a taxpayer generally recognizes cancellation of debt income (“CODI”) to the extent that indebtedness of the taxpayer is cancelled for less than the amount owed by the taxpayer, subject to certain judicial or statutory exceptions. The most significant of these exceptions with respect to the Debtors is that taxpayers who are operating under the jurisdiction of a federal bankruptcy court are not required to recognize such income. In that case, however, the taxpayer must reduce its tax attributes, such as its net operating losses, general business credits, capital loss carryforwards, and tax basis in assets, by the amount of the CODI avoided. In this case, the Debtors expect that they will recognize significant CODI from the implementation of the Plan. As a result, the Debtors expect that their net operating losses will be reduced on account of such CODI. However, since the Debtors intend to liquidate, any remaining net operating losses will have no ongoing value to the Debtors or to the Holders of Claims or Holdings Interests.


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ARTICLE X. RECOMMENDATION OF THE DEBTORS

The Debtors believe that the Plan is in the best interests of all Holders of Claims against and Interests in the Debtors, and urge all Holders of Claims against and Interests in the Debtors entitled to vote to accept the Plan and to evidence such acceptance by returning their Ballots so they will be received by the Notice and Claims Agent by the Voting Deadline.

Dated: June 10, 2014 FAH Liquidating Corp. (f/k/a Fisker Automotive Holdings, Inc.) FA Liquidating Corp. (f/k/a Fisker Automotive, Inc.) By: /s/ Marc Beilinson Name: Marc Beilinson Title: Chief Restructuring Officer

Prepared by:

James H.M. Sprayregen, P.C. (admitted pro hac vice) Laura Davis Jones (DE Bar No. 2436) Anup Sathy, P.C. (admitted pro hac vice) James E. O’Neill (DE Bar No. 4042) Ryan Preston Dahl (admitted pro hac vice) Peter J. Keane (DE Bar No. 5503) KIRKLAND & ELLIS LLP PACHULSKI STANG ZIEHL & JONES LLP 300 North LaSalle 919 North Market Street, 17th Floor Chicago, Illinois 60654 P.O. Box 8705 Telephone: (312) 862-2000 Wilmington, Delaware 19899-8705 (Courier 19801) Facsimile: (312) 862-2200 Telephone: (302) 652-4100 Facsimile: (302) 652-4400 Counsel to the Debtors and Debtors in Possession


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EXHIBIT A

Debtors’ Second Amended Joint Plan of Liquidation Pursuant to Chapter 11 of the Bankruptcy Code

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

) In re: ) Chapter 11 ) FAH LIQUIDATING CORP., et al.,1 (f/k/a FISKER AUTOMOTIVE HOLDINGS, INC.)

) ) )

Case No. 13-13087 (KG)

Debtors. ) (Jointly Administered) )

DEBTORS’ SECOND AMENDED JOINT PLAN OF LIQUIDATION PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE

THIS CHAPTER 11 PLAN IS BEING SOLICITED FOR ACCEPTANCE OR REJECTION IN ACCORDANCE WITH SECTION 1125 AND WITHIN THE MEANING OF SECTION 1126 OF THE BANKRUPTCY CODE, 11 U.S.C. §§ 1125, 1126. THIS CHAPTER 11 PLAN WILL BE SUBMITTED TO THE BANKRUPTCY COURT FOR APPROVAL FOLLOWING SOLICITATION.

James H.M. Sprayregen, P.C. (admitted pro hac vice) Anup Sathy, P.C. (admitted pro hac vice) Ryan Preston Dahl (admitted pro hac vice)

Laura Davis Jones (DE Bar No. 2436) James E. O’Neill (DE Bar No. 4042) Peter J. Keane (DE Bar No. 5503)

KIRKLAND & ELLIS LLP PACHULSKI STANG ZIEHL & JONES LLP 300 North LaSalle Street 919 North Market Street, 17th Floor Chicago, Illinois 60654 P.O. Box 8705 Telephone: (312) 862-2000 Wilmington, Delaware 19899-8705 Facsimile: (312) 862-2200 (Courier 19801) Email: [email protected] Telephone: (302) 652-4100 [email protected] Facsimile: (302) 652-4400 [email protected] Email: [email protected] [email protected] [email protected] Counsel to the Debtors and Debtors in Possession Dated: June 4, 2014

1 The Debtors, together with the last four digits of each Debtor’s federal tax identification number, are: FAH Liquidating Corp.

(f/k/a Fisker Automotive Holdings, Inc.) (9678); and FA Liquidating Corp. (f/k/a Fisker Automotive, Inc.) (9075). For the purpose of these chapter 11 cases, the service address for the Debtors is: 3080 Airway Avenue, Costa Mesa, California 92626.

Case 13-13087-KG Doc 963 Filed 06/04/14 Page 1 of 54Case 13-13087-KG Doc 984-1 Filed 06/10/14 Page 2 of 55

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TABLE OF CONTENTS

ARTICLE I. DEFINED TERMS, RULES OF INTERPRETATION, COMPUTATION OF TIME, AND GOVERNING LAW ............................................................................................................................ 1 A. Defined Terms .................................................................................................................................. 1 B. Rules of Interpretation .................................................................................................................... 12 C. Computation of Time ...................................................................................................................... 13 D. Governing Law ............................................................................................................................... 13 E. Reference to Monetary Figures ....................................................................................................... 13 F. Controlling Document ..................................................................................................................... 13

ARTICLE II. ADMINISTRATIVE CLAIMS, PRIORITY TAX CLAIMS, DIP FACILITY CLAIMS, AND PROFESSIONAL FEE CLAIMS ................................................................................... 13 A. Administrative Claims; Priority Tax Claims ................................................................................... 13 B. DIP Facility Claims ......................................................................................................................... 14 C. Professional Fee Claims .................................................................................................................. 14 D. Priority Claims Reserve .................................................................................................................. 14 E. Hybrid Reservation of Rights.......................................................................................................... 15 F. U.S. Trustee Statutory Fees ............................................................................................................. 15

ARTICLE III. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS ............................. 15 A. Summary of Classification of Claims and Interests ........................................................................ 15 B. Class Identification ......................................................................................................................... 15 C. Classification of Claims and Interests ............................................................................................. 16 D. Special Provision Governing Unimpaired Claims .......................................................................... 19 E. Elimination of Vacant Classes ........................................................................................................ 19 F. Voting Classes; Presumed Acceptance by Non-Voting Classes ..................................................... 20 G. Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy Code .................. 20

ARTICLE IV. MEANS FOR IMPLEMENTATION OF THE PLAN ................................................................. 20 A. Sources of Consideration for Plan Distributions ............................................................................. 20 B. Hybrid Parties’ Claims Waiver ....................................................................................................... 20 C. The Liquidating Trust ..................................................................................................................... 20 D. General Settlement of Claims ......................................................................................................... 21 E. Corporate Action ............................................................................................................................. 21 F. Dissolution and Boards of the Debtors ........................................................................................... 21 G. Effectuating Documents; Further Transactions ............................................................................... 21 H. Exemption from Certain Taxes and Fees ........................................................................................ 21 I. Restructuring Fee ............................................................................................................................ 22 J. Preservation of Rights of Action ..................................................................................................... 22 K. Committee Standing Motion ........................................................................................................... 22 L. Closing of Debtors’ Cases ............................................................................................................... 23

ARTICLE V. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES ...................... 23 A. Assumption and Assignment of Executory Contracts and Unexpired Leases ................................ 23 B. Cure of Defaults for Assumed Executory Contracts and Unexpired Leases ................................... 23 C. Claims Based on Rejection of Executory Contracts and Unexpired Leases ................................... 24 D. Purchase Agreement; Designated Contracts ................................................................................... 24 E. Modifications, Amendments, Supplements, Restatements, or Other Agreements .......................... 25 F. Insurance Policies ........................................................................................................................... 25 G. Reservation of Rights ...................................................................................................................... 25

ARTICLE VI. PROVISIONS GOVERNING DISTRIBUTIONS ........................................................................ 25 A. Calculation of Amounts to Be Distributed ...................................................................................... 25


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B. Rights and Powers of the Debtors, Liquidating Trustee, Manager, and Hybrid .............................. 26 C. Delivery of Distributions and Undeliverable or Unclaimed Distributions ...................................... 27 D. Compliance with Tax Requirements/Allocations ............................................................................ 28 E. Claims Paid or Payable by Third Parties ......................................................................................... 28

ARTICLE VII. THE LIQUIDATING TRUST AND THE LIQUIDATING TRUSTEE .................................... 29 A. Liquidating Trust Creation .............................................................................................................. 29 B. Purpose of the Liquidating Trust ..................................................................................................... 29 C. Transfer of Assets to the Liquidating Trust .................................................................................... 29 D. Tax Treatment of the Liquidating Trust .......................................................................................... 30 E. Equity Consideration ....................................................................................................................... 30 F. The Liquidating Trust Oversight Committee .................................................................................. 31 G. Distribution; Withholding ............................................................................................................... 31 H. Insurance ......................................................................................................................................... 31 I. Other Rights and Duties .................................................................................................................. 31 J. Disputed Claims Reserve ................................................................................................................ 32 K. Wind-Down ..................................................................................................................................... 32 L. Termination of the Liquidating Trust .............................................................................................. 32 M. Transfer of Beneficial Interests ....................................................................................................... 33 N. Termination of the Liquidating Trustee .......................................................................................... 33 O. Exculpation; Indemnification .......................................................................................................... 33

ARTICLE VIII. PROCEDURES FOR RESOLVING CONTINGENT, UNLIQUIDATED, AND DISPUTED CLAIMS AND INTERESTS ................................................................................................. 33 A. Resolution of Disputed Claims ....................................................................................................... 33 B. Allowance of DEDA Loan Claims ................................................................................................. 34 C. Disallowance of Claims .................................................................................................................. 34 D. Amendments to Claims ................................................................................................................... 35 E. No Interest ....................................................................................................................................... 35

ARTICLE IX. SETTLEMENT, RELEASE, INJUNCTION, AND RELATED PROVISIONS ........................ 35 A. Compromise and Settlement of Claims, Interests, and Controversies ............................................ 35 B. Release of Liens .............................................................................................................................. 35 C. Subordinated Claims ....................................................................................................................... 36 D. Debtor Release ................................................................................................................................ 36 E. Third Party Release ......................................................................................................................... 36 F. Exculpation ..................................................................................................................................... 37 G. Injunction ........................................................................................................................................ 37 H. Waiver of Statutory Limitations on Releases .................................................................................. 38 I. Setoffs ............................................................................................................................................. 39 J. GP Supercars ................................................................................................................................... 39 K. Conditions to Certain Releases ....................................................................................................... 39

ARTICLE X. SUBSTANTIAL CONSUMMATION OF THE PLAN .................................................................. 39 A. Conditions Precedent to Consummation of the Plan ....................................................................... 39 B. Waiver of Conditions ...................................................................................................................... 40 C. Effect of Non-Occurrence of Conditions to the Effective Date ...................................................... 40

ARTICLE XI. MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN ............................. 40 A. Modification and Amendments ....................................................................................................... 40 B. Effect of Confirmation on Modifications ........................................................................................ 41 C. Revocation or Withdrawal of the Plan ............................................................................................ 41

ARTICLE XII. RETENTION OF JURISDICTION .............................................................................................. 41

ARTICLE XIII. MISCELLANEOUS PROVISIONS ............................................................................................ 43


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A. Immediate Binding Effect ............................................................................................................... 43 B. Additional Documents .................................................................................................................... 43 C. Dissolution of Committee ............................................................................................................... 44 D. Reservation of Rights ...................................................................................................................... 44 E. Successors and Assigns ................................................................................................................... 44 F. Service of Documents ..................................................................................................................... 44 G. Term of Injunctions or Stays ........................................................................................................... 45 H. Entire Agreement ............................................................................................................................ 45 I. Nonseverability of Plan Provisions ................................................................................................. 45 J. Waiver or Estoppel.......................................................................................................................... 45

EXHIBIT A. RELATED PARTY NOTE CLAIMS

EXHIBIT B. RELATED PARTY LENDERS AFFILIATE SCHEDULE


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INTRODUCTION

The Debtors propose the following Second Amended Joint Plan of Liquidation Pursuant to Chapter 11 of the Bankruptcy Code. Capitalized terms used in the Plan and not otherwise defined have the meanings ascribed to such terms in Article I of the Plan. On November 26, 2013, the Bankruptcy Court entered an order [Docket No. 52] authorizing the joint administration and procedural consolidation of these chapter 11 cases pursuant to Bankruptcy Rule 1015(b). Reference is made to the Disclosure Statement, filed in connection herewith, for a discussion of the Debtors’ history, as well as a summary and analysis of the Plan and certain related matters. Each Debtor is a proponent of the Plan within the meaning of section 1129 of the Bankruptcy Code.

ARTICLE I. DEFINED TERMS, RULES OF INTERPRETATION,

COMPUTATION OF TIME, AND GOVERNING LAW

A. Defined Terms

As used in this Plan, capitalized terms have the meanings set forth below.

1. “Acquired Assets” has the meaning ascribed to it in the Purchase Agreement; provided that, for the avoidance of doubt, the Sale Proceeds and the Excluded Assets shall not be Acquired Assets.

2. “Administrative Claims” means Claims for the costs and expenses of the administration of the Debtors’ Estates pursuant to section 503(b) of the Bankruptcy Code. For the avoidance of doubt, Claims asserting priority under Section 503(b)(9) of the Bankruptcy Code are included in the definition of Administrative Claims, and, if Allowed, shall be paid in accordance with the Plan.

3. “Administrative Claims Objection Bar Date” means the first Business Day that is 120 days following the Effective Date, except as specifically set forth in the Plan or a Final Order, including, without limitation, the Bar Date Order; provided that the Administrative Claims Objection Bar Date may be extended pursuant to an order of the Bankruptcy Court upon a motion filed by Hybrid or the Liquidating Trustee after notice and a hearing.

4. “Administrative Claims Bar Date” means the first Business Day that is 30 days following the Effective Date, except as specifically set forth in the Plan or a Final Order.

5. “Affiliate” shall have the meaning set forth in section 101(2) of the Bankruptcy Code.

6. “Allowed” means with respect to Claims: (a) any Claim, proof of which is timely Filed by the applicable Claims Bar Date (or for which Claim under the Plan, the Bankruptcy Code, or a Final Order of the Bankruptcy Court, a Proof of Claim is not or shall not be required to be Filed); (b) any Claim that is listed in the Schedules as not contingent, not unliquidated, and not disputed, and for which no Proof of Claim has been timely Filed; or (c) any Claim allowed pursuant to the Plan or a Final Order of the Bankruptcy Court; provided that, with respect to any Claim described in clauses (a) and (b) above, such Claim shall be considered allowed only if and to the extent that with respect to such Claim no objection to the allowance thereof has been interposed within the applicable period of time fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy Court, or such an objection is so interposed and the Claim shall have been Allowed by a Final Order. Any Claim that has been or is hereafter listed in the Schedules as contingent, unliquidated, or disputed, and for which no Proof of Claim is or has been timely Filed, is not considered Allowed and shall be expunged without further action by the Debtors and without further notice to any party or action, approval, or order of the Bankruptcy Court. “Allow” and “Allowing” shall have correlative meanings.

7. “Avoidance Actions” means any and all actual or potential claims and causes of action to avoid a transfer of property or an obligation incurred by the Debtors pursuant to any applicable section of the Bankruptcy Code, including sections 502, 510, 542, 544, 545, 547–553, and 724(a) of the Bankruptcy Code or under similar or related state or federal statutes and common law, including fraudulent transfer laws.


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8. “Ballot” means a ballot authorized by the Bankruptcy Court pursuant to the Disclosure Statement Order to indicate acceptance or rejection of the Plan and to opt out of the release provided by Article IX.E of the Plan.

9. “Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101–1532, as the same may be amended from time to time.

10. “Bankruptcy Court” means the United States Bankruptcy Court for the District of Delaware having jurisdiction over the Chapter 11 Cases, and, to the extent of the withdrawal of any reference under 28 U.S.C. § 157 and/or the General Order of the District Court pursuant to section 151 of title 28 of the United States Code, the United States District Court for the District of Delaware.

11. “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as applicable to the Chapter 11 Cases, promulgated under section 2075 of the Judicial Code and the general, local, and chambers rules of the Bankruptcy Court.

12. “Bar Date Order” means that certain Order (A) Setting a Bar Date for Filing Proofs of Claim, Including Claims Arising Under Section 503(b)(9) of the Bankruptcy Code, (B) Setting a Bar Date for the Filing of Proofs of Claim by Governmental Units, (C) Setting a Bar Date for the Filing of Requests for Allowance of Administrative Expense Claims, (D) Setting an Amended Schedules Bar Date, (E) Setting a Rejection Damages Bar Date, (F) Approving the Form of and Manner for Filing Proofs of Claim, (G) Approving Notice of the Bar Dates, and (H) Granting Related Relief [Docket No. 252].

13. “Beneficiaries” means Holders of Claims that are to be satisfied with post-Effective Date distributions from the Liquidating Trust Assets, each in their capacities as such.

14. “Business Day” means any day, other than a Saturday, Sunday, or “legal holiday” (as defined in Bankruptcy Rule 9006(a)).

15. “Cash” means the legal tender of the United States or the equivalent thereof.

16. “Cash Sale Proceeds” means the Sale Proceeds that are Cash. For the avoidance of doubt, the Cash Sale Proceeds shall be subject to the Carve Out (as defined in the Final Hybrid DIP Order and the Final Wanxiang DIP Order, as applicable) in all respects.

17. “Causes of Action” means any Claim, cause of action, controversy, right of setoff, cross claim, counterclaim, or recoupment and any claim on contracts or for breaches of duties imposed by law or in equity, demand, right, action, Lien, indemnity, guaranty, suit, obligation, liability, damage, judgment, account, defense, power, privilege, license, and franchise of any kind or character whatsoever, known, unknown, fixed or contingent, matured or unmatured, suspected or unsuspected, liquidated or unliquidated, disputed or undisputed, secured or unsecured, assertable directly or derivatively, whether arising before, on, or after the Petition Date, in contract or in tort, in law or in equity, or pursuant to any other theory of law, including Avoidance Actions.

18. “Chapter 11 Cases” means the jointly administered chapter 11 cases commenced by the Debtors on the Petition Date and styled In re FAH Liquidating Corp. (f/k/a Fisker Automotive Holdings, Inc.), No. 13-13087 (KG), which are currently pending before the Bankruptcy Court.

19. “Claim” means a “claim” (as defined in section 101(a)(5) of the Bankruptcy Code) against a Debtor.

20. “Claims Bar Date” means the bar date by which a Proof of Claim must be or must have been Filed, as established by (a) a Final Order of the Bankruptcy Court or (b) pursuant to the Plan.

21. “Claims Objection Bar Date” means the first Business Day that is 120 days after the Effective Date; provided that the Claims Objection Bar Date may be extended pursuant to an order of the Bankruptcy Court


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upon a motion filed by Hybrid with regard to Priority Claims or the Liquidating Trustee with regard to General Unsecured Claims and Warranty Claims after notice and a hearing.

22. “Claims Register” means the official register of Claims maintained by the Notice and Claims Agent.

23. “Class” means a category of Holders of Claims or Interests as set forth in Article III hereof pursuant to section 1122(a) of the Bankruptcy Code.

24. “Collateral Agency Agreement” means the Amended and Restated Collateral Agency Agreement, dated as of July 30, 2010, by and between Fisker Automotive, Holdings, and Midland Loan Services, Inc. as collateral agent, acknowledged and agreed-to by the DOE and SVB, and incorporating the Security Documents (as defined therein).

25. “Committee” means the official committee of unsecured creditors appointed in the Chapter 11 Cases pursuant to section 1102(a) of the Bankruptcy Code pursuant to that certain Notice of Appointment of Committee of Unsecured Creditors, filed by the U.S. Trustee on December 5, 2013 [Docket No. 102].

26. “Committee Members” means all current and former members of the Committee, including each of the following, in each case in their capacity as such: (a) David M. Cohen; (b) Sven Etzelsberger; (c) Kuster Automotive Door Systems GmbH; (d) Magna E-Car USA, LLC; (e) Supercars & More SRL; (f) TK Holdings Inc.; and (g) Visteon Corp.

27. “Committee Standing Motion” means the Motion of the Official Committee of Unsecured Creditors for Entry of an Order Pursuant to Bankruptcy Code §§ 1103(c) and 1109(b) Granting Leave, Standing and Authority to Commence, Prosecute and, if Appropriate, Settle Certain Causes of Action on Behalf of the Debtors’ Estates [Docket No. 267].

28. “Confirmation” means the entry of the Confirmation Order on the docket of the Chapter 11 Cases.

29. “Confirmation Date” means the date upon which the Bankruptcy Court enters the Confirmation Order on the docket of the Chapter 11 Cases, within the meaning of Bankruptcy Rules 5003 and 9021.

30. “Confirmation Hearing” means the hearing held by the Bankruptcy Court to consider Confirmation of the Plan pursuant to section 1129 of the Bankruptcy Code.

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

32. “Consummation” means the occurrence of the Effective Date.

33. “Cure Obligations” means: all (a) amounts (or such other amount as may be agreed upon by the parties under an Executory Contract or Unexpired Lease) required to cure any monetary defaults; and (b) other obligations required to cure any non-monetary defaults under any Executory Contract or Unexpired Lease that is to be assumed by the Debtors pursuant to sections 365 or 1123 of the Bankruptcy Code.

34. “D&O Policy” means all insurance policies for directors, members, trustees, and officers liability maintained by the Debtors’ Estates as of the Effective Date, including, for the avoidance of doubt: (a) that certain Policy No. 5943009 03, underwritten by Zurich American Insurance Company; and (b) that certain Policy No. 5943009 03, underwritten by National Union Fire Insurance Company of Pittsburgh.

35. “Debtor Release” means the release given on behalf of the Debtors and their Estates to the Released Parties as set forth in Article IX.D hereof.

36. “Debtors” means, collectively: (a) Holdings; and (b) Fisker Automotive.


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37. “Debtors’ Professionals’ Documents” means any documents and communications that are created by the Debtors’ Professionals (whether in electronic form or otherwise), including internal communications, regardless of whether such documents and communications are arising from or related to Causes of Action or are subject to attorney-client, work product, or common interest privilege claims; provided, however, that the Debtors’ Professionals’ Documents shall not include documents and communications (including without limitation e-mails or other electronic documents) relating in any way whatsoever to the Debtors or any of the Debtors’ affairs prior to the Petition Date or during the Chapter 11 Cases that were or are created or held at any time prior to the Effective Date by Marc Beilinson or the Beilinson Advisory Group, LLC.

38. “DEDA” means the Delaware Economic Development Authority, a body corporate and politic constituted as an instrumentality of the State of Delaware.

39. “DEDA Agreements” means, collectively: (a) the DEDA Loan Agreement; and (b) the DEDA Grant Agreement.

40. “DEDA Grant Agreement” means that certain Grant Agreement dated as of December 10, 2010, between Fisker Automotive and DEDA.

41. “DEDA Intercreditor Agreement” means that certain Subordination and Intercreditor Agreement by and among Fisker Automotive, as Borrower, the DOE and SVB, as senior lenders, and DEDA, as the Subordinate Lender, and dated as of December 10, 2010.

42. “DEDA Loan” means the lending facility provided under or related to the DEDA Loan Agreement.

43. “DEDA Loan Claim” means any Claim arising under or related to the DEDA Loan or the DEDA Agreements.

44. “DEDA Loan Agreement” means that certain Loan and Security Agreement, dated as of December 10, 2010, between the Debtors and DEDA.

45. “DGCL” shall have the meaning ascribed to it in Article VII.K hereof.

46. “DIP Facility Claims” means, collectively, (a) the Hybrid DIP Facility Claims; and (b) the Wanxiang DIP Facility Claims.

47. “Disclosure Statement” means the Disclosure Statement for the Debtors’ Second Amended Joint Plan of Liquidation Pursuant to Chapter 11 of the Bankruptcy Code, dated April 25, 2014, as amended, supplemented, or modified from time to time, including all exhibits and schedules thereto, as approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy Code.

48. “Disclosure Statement Order” means the Order (A) Approving the Adequacy of the Debtors’ Disclosure Statement, (B) Approving Solicitation and Notice Procedures With Respect to Confirmation of the Debtors’ Proposed Joint Plan of Liquidation, (C) Approving the Form of Various Ballots and Notices In Connection Therewith, (D) Scheduling Certain Dates With Respect Thereto, and (E) Granting Related Relief, entered on [●], 2014 [Docket No. ●].

49. “Disputed” means, with respect to any Claim or Interest, any Claim or Interest that is not yet Allowed.

50. “Disputed Claims Reserve” means a Cash reserve that may be funded with a portion of the Cash Sale Proceeds for distributions to Holders of Allowed Claims and Disputed Claims if and to the extent that such Disputed Claims become Allowed Claims.


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51. “Distribution Conditions Precedent” means the conditions set forth in Article X.A.8 and Article X.A.9 hereof.

52. “Distribution Record Date” means the first Business Day that is two (2) Business Days after the Confirmation Date.

53. “DOE” means the United States Department of Energy, an agency of the United States.

54. “Effective Date” means the date selected by the Debtors in consultation with the Committee and Hybrid which is no later than two (2) Business Days after the date on which: (a) the Confirmation Date has occurred; (b) no stay of the Confirmation Order is in effect; and (c) all conditions precedent specified in Article X of the Plan have been satisfied or waived (in accordance with 0 hereof).

55. “Entity” shall have the meaning set forth in section 101(15) of the Bankruptcy Code.

56. “Equity Consideration” shall have the meaning set forth in the Purchase Agreement.

57. “Estate” means, as to each Debtor, the estate created for such Debtor on the Petition Date pursuant to sections 301 and 541 of the Bankruptcy Code.

58. “Excluded Assets” shall have the meaning ascribed to it in the Purchase Agreement; provided that the Excluded Assets shall not include Cash Sale Proceeds.

59. “Exculpated Parties” means, collectively: (a) the Released Parties; and (b) the Committee and the Committee Members and each of the Committee’s agents, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, and other professionals, in each case in their capacity as such.

60. “Exculpation” means the exculpation provision set forth in Article IX.F hereof.

61. “Executory Contract” means a contract or lease to which one or more of the Debtors is a party that is subject to assumption or rejection under sections 365 or 1123 of the Bankruptcy Code.

62. “Federal Judgment Rate” means the federal judgment rate in effect as of the Effective Date.

63. “File,” “Filed,” or “Filing” means file, filed, or filing in the Chapter 11 Cases with the Bankruptcy Court or, with respect to the filing of a Proof of Claim, the Notice and Claims Agent.

64. “Final Hybrid DIP Order” mean the Final Order (I) Authorizing Postpetition Financing, (II) Granting Liens and Providing Superpriority Administrative Expense Priority, (III) Authorizing Use of Cash Collateral, (IV) Granting Adequate Protection, (V) Modifying the Automatic Stay, and (VI) Scheduling a Final Hearing Pursuant to Sections 105, 361, 362, 363 and 364 of the Bankruptcy Code and Bankruptcy Rules 2002, 4001, and 9014 [Docket No. 521].

65. “Final DIP Orders” means, collectively, the Final Hybrid DIP Order and the Final Wanxiang DIP Order.

66. “Final Order” means, as applicable, an order or judgment of the Bankruptcy Court or other court of competent jurisdiction with respect to the relevant subject matter, which has not been reversed, stayed, modified, or amended from time to time, and as to which the time to appeal or seek certiorari has expired and no appeal or petition for certiorari has been timely taken, or as to which any appeal that has been taken or any petition for certiorari that has been or may be Filed has been resolved by the highest court to which the order or judgment was appealed or from which certiorari was sought; provided that the possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy Rules or the Local Bankruptcy Rules of the Bankruptcy Court, may be filed relating to such order shall not prevent such order from being a Final Order.


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67. “Final Wanxiang DIP Order” means the Final Order (I) Authorizing Postpetition Financing, (II) Granting Liens and Providing Superpriority Administrative Expense Priority, (III) Authorizing Use of Cash Collateral, (IV) Granting Adequate Protection, (V) Modifying the Automatic Stay, and (VI) Scheduling a Final Hearing Pursuant to Sections 105, 361, 362, 363 and 364 of the Bankruptcy Code and Bankruptcy Rules 2002, 4001, and 9014 [Docket No. 722].

68. “Fisker Automotive” means FA Liquidating Corp., a Debtor in the Chapter 11 Cases.

69. “General Unsecured Claim” means any unsecured Claim, including any SVB Deficiency Claim, DEDA Loan Claim, and Related Party Note Claim, in each case that is not: (a) an Administrative Claim; (b) a Professional Fee Claim; (c) a Section 510(b) Claim; (d) a Priority Tax Claim; (e) an Other Priority Claim; (f) a Warranty Claim; or (g) a Hybrid Deficiency Claim; provided however, that in the event the Holder of a Warranty Claim elects to opt out of the Warranty Program as provided in the Solicitation Procedures, then such Warranty Claim shall be treated as a General Unsecured Claim in accordance with Article III.C.7 hereof.

70. “Governmental Unit” shall have the meaning set forth in section 101(27) of the Bankruptcy Code.

71. “Holder” means any Entity holding a Claim or an Interest.

72. “Holdings” means FAH Liquidating Corp., a Debtor in the Chapter 11 Cases.

73. “Holdings Interests” means all Interests in Holdings.

74. “Hybrid” means Hybrid Tech Holdings, LLC.

75. “Hybrid Cash Distribution” means distribution of the Hybrid Cash Payment to Holders of Allowed Senior Loan Claims in accordance with Article III.C.2 hereof, plus amounts (if any) payable to Hybrid in accordance with this Plan after the Effective Date from the Professional Fee Escrow and/or the Priority Claims Reserve.

76. “Hybrid Cash Payment” means all Cash owned by the Estates on the Effective Date after giving effect to: (a) the SVB Cash Distribution; (b) the Liquidating Trust Cash Distribution; (c) Cash transferred to the Professional Fee Escrow in accordance with Article II.C.1 hereof; and (d) funds transferred to the Priority Claims Reserve.

77. “Hybrid Deficiency Claim” means, with respect to the Senior Loan, any portion of the Senior Loan that is not satisfied pursuant to the Hybrid Cash Distribution.

78. “Hybrid DIP Facility” means that certain debtor-in-possession financing facility of up to $13.1 million entered into pursuant to the Final Hybrid DIP Order.

79. “Hybrid DIP Facility Claim” means any Claim arising under or related to the Hybrid DIP Facility.

80. “Hybrid DIP Lenders” means the lenders with respect to the Hybrid DIP Facility, each solely in their capacities as such.

81. “Hybrid Parties” means, collectively, Hybrid, Hybrid Technology, LLC, Ace Strength International Limited, FAH Loan Purchase Fund, LLC, Mr. David Manion, Mr. Richard Li Tzar-Kai, and with respect to each of the foregoing Entities, their respective Affiliates, current and former officers, directors, managers, principals, employees, agents, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, and other professionals, in each case in their capacity as such.

82. “Impaired” means, with respect to a Claim or Interest, or Class of Claims or Interests, “impaired” within the meaning of section 1124 of the Bankruptcy Code.


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83. “Indemnification Provision” means each of the Debtors’ indemnification provisions currently in place whether in the bylaws, certificates of incorporation, other formation documents, board resolutions, or employment contracts for the current and former directors, officers, employees, attorneys, other professionals and agents of the Debtors, and such current and former directors’ and officers’ respective Affiliates.

84. “Initial Conditions Precedent” means the conditions set forth in Article X.A.1 through Article X.A.7 hereof.

85. “Initial Distribution Date” means the date on which the Debtors or the Liquidating Trustee, as applicable, make initial distributions to Holders of Allowed Claims pursuant to the Plan.

86. “Intercompany Claim” means any Claim held by a Debtor against another Debtor.

87. “Intercompany Interest” means any Interest in a Debtor held by another Debtor.

88. “Intercreditor Agreements” means any agreements, other than the DEDA Intercreditor Agreement, by and among the Senior Secured Lender and any of the Debtors’ creditors and other related parties that set forth the various lien positions and the rights and liabilities of each such creditor, including but not limited to the Collateral Agency Agreement and the Valmet Intercreditor Agreement.

89. “Interest” means any interest, equity, or share in the Debtors, including all options, warrants, or other rights to obtain such an interest or share in such Debtor, whether or not certificated, transferable, preferred, common, voting, or denominated “stock” or a similar security, including any Claim subject to subordination under section 510(b) of the Bankruptcy Code arising therefrom.

90. “Judicial Code” means title 28 of the United States Code, 28 U.S.C. §§ 1–4001.

91. “Lien” shall have the meaning set forth in section 101(37) of the Bankruptcy Code.

92. “Liquidating Trust” means the trust to be established on the Effective Date in accordance with Article VII hereof.

93. “Liquidating Trust Agreement” means the agreement governing, among other things, the retention and duties of the Liquidating Trustee as described in Article VII hereof, which shall be in form and substance materially consistent with the Plan and otherwise reasonably acceptable to the Debtors, the Committee, and Hybrid and included as an exhibit to the Plan Supplement.

94. “Liquidating Trust Assets” means: (a) the Liquidating Trust Cash Payment; (b) the Equity Consideration; (c) all Causes of Action not previously settled or released by the Debtors or their Estates; (d) the Excluded Assets; (e) the Debtors’ rights under the Purchase Agreement, the LLC Agreement, including all rights of recovery under the Purchase Agreement and any ancillary agreements among the Debtors and the Purchaser; (f) all Privileged Documents; and (g) all other assets of the Debtors or of the Estates existing on the Effective Date after giving effect to all distributions required to be made as of or prior to the Effective Date, including all books, records, and files of the Debtors and of the Estates, in all forms, including electronic and hard copy. For the avoidance of doubt, the Liquidating Trust Assets shall not include (u) the Acquired Assets, (v) any claims or Causes of Action released pursuant to Article IX.D hereof or exculpated pursuant to Article IX.F hereof, (w) the Priority Claims Reserve, (x) funds held in the Professional Fee Escrow or the Professional Trust Accounts, (y) the SVB Cash Payment, or (z) the Hybrid Cash Payment. Notwithstanding anything in the Plan to the contrary, the Debtors’ Professionals’ Documents shall not be transferred to the Liquidating Trust and shall not be Liquidating Trust Assets.

95. “Liquidating Trust Cash Distribution” means Cash transferred to the Liquidating Trust on the Effective Date in an amount equal to the Liquidating Trust Cash Payment.

96. “Liquidating Trust Cash Payment” means Cash in an amount equal to $20,000,000.00.


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97. “Liquidating Trust Oversight Committee” shall have the meaning ascribed to it in the Liquidating Trust Agreement as described in Article VII hereof.

98. “Liquidating Trustee” means Emerald Capital Advisors Corp., solely in its capacity as such.

99. “LLC Agreement” means that certain Limited Liability Company Agreement for Wanxiang Automotive Acquisition Company LLC, dated as of March 21, 2014, entered-into pursuant to the Purchase Agreement and that sets forth the terms for, among other things, the Equity Consideration.

100. “Local Bankruptcy Rules” means the local rules of bankruptcy practice and procedure of the United States Bankruptcy Court for the District of Delaware.

101. “Main Case” shall have the meaning ascribed to it in Article IV.K hereof.

102. “Manager” means Emerald Capital Advisors Corp., solely in its capacity as manager of the Priority Claims Reserve, as described in Article II.D hereof.

103. “Notice and Claims Agent” means Rust Consulting/Omni Bankruptcy, in its capacity as notice and claims agent and administrative advisor for the Debtors’ Estates pursuant to 28 U.S.C. § 156(c).

104. “Other Priority Claim” means a Claim asserting a priority described in section 507(a) of the Bankruptcy Code, other than: (a) an Administrative Claim; (b) a Professional Fee Claim; (c) a Priority Tax Claim; (d) a Hybrid DIP Facility Claim; or (e) a Wanxiang DIP Facility Claim.

105. “Other Secured Claim” means a Secured Claim other than: (a) a Senior Loan Claim; (b) an SVB Loan Secured Claim; (c) a Hybrid DIP Facility Claim; or (d) a Wanxiang DIP Facility Claim.

106. “Person” shall have the meaning set forth in section 101(41) of the Bankruptcy Code.

107. “Petition Date” means November 22, 2013, the date on which the Debtors commenced the Chapter 11 Cases.

108. “Plan” means this Debtors’ Second Amended Joint Plan of Liquidation Pursuant to Chapter 11 of the Bankruptcy Code, as amended, supplemented, or modified from time to time, including the Plan Supplement, which is incorporated in the Plan by reference and made part of this Plan as if set forth in the Plan.

109. “Plan Settlement Term Sheet” shall mean that settlement term sheet, dated as of April 11, 2014, by and between the Debtors, the Committee, and the Hybrid Parties, attached as Exhibit A to [Docket No. 774].

110. “Plan Supplement” means the compilation of documents and forms of documents, schedules, and exhibits to the Plan, to be Filed prior to Confirmation, as amended, supplemented, or modified from time to time in accordance with the terms hereof, the Bankruptcy Code, and the Bankruptcy Rules, including: (a) a list of Executory Contracts and Unexpired Leases to be assumed pursuant to the Plan, and as may be amended by the Debtors in accordance with this Plan prior to the Effective Date; (b) a schedule of retained Causes of Action; (c) the Liquidating Trust Agreement and the identity of the Liquidating Trustee; (d) the LLC Agreement; and (e) the Warranty Program.

111. “Priority Claims” means, collectively: (a) Administrative Claims; (b) Hybrid DIP Facility Claims; (c) Wanxiang DIP Facility Claims; (d) Professional Fee Claims; (e) Priority Tax Claims; (f) Other Priority Claims; and (g) Other Secured Claims.

112. “Priority Claims Reserve” means a Cash reserve funded on the Effective Date from Cash Sale Proceeds in an amount equal to $8,000,000 less the amount of Cash transferred to the Professional Fee Escrow on the Effective Date, as described in Article II.D hereof. For the avoidance of doubt, the Priority Claims Reserve shall include the WARN Claims Reserve.


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113. “Priority Claims Reserve Subsequent Amount” means the amount of Allowed Priority Claims against the Estates, whether Allowed as of the Effective Date or afterwards (but for the avoidance of doubt, such Claims must have been incurred and accrued prior to the Effective Date), after application of the funds held in the Priority Claims Reserve as of the Effective Date, to be funded pursuant to the Priority Claims Reserve Subsequent Funding in accordance with Article II.D hereof.

114. “Priority Claims Reserve Subsequent Funding” means the funding by Hybrid in Cash into the Priority Claims Reserve of the Priority Claims Reserve Subsequent Amounts in accordance with Article II.D hereof. For the avoidance of doubt, there may be more than one instance of Priority Claims Reserve Subsequent Funding.

115. “Priority Tax Claim” means any Claim of a Governmental Unit of the kind specified in section 507(a)(8) of the Bankruptcy Code.

116. “Privileged Documents” means all documents and communications maintained by the Debtors and subject to attorney-client, work product, or common interest privilege claims.

117. “Pro Rata” means the proportion that an Allowed Claim in a particular Class bears to the aggregate amount of Allowed Claims in that Class, or the proportion that Allowed Claims in a particular Class bear to the aggregate amount of Allowed Claims in a particular Class and other Classes entitled to share in the same recovery as such Allowed Claim under the Plan.

118. “Professional” means any entity retained in the Chapter 11 Cases in accordance with sections 327, 363, or 1103 of the Bankruptcy Code and to be compensated for services rendered and expenses incurred pursuant to sections 326, 327, 328, 329, 330, 331, or 363 of the Bankruptcy Code.

119. “Professional Fee Claims” mean all Claims for accrued fees and expenses (including success fees) for services rendered and expenses incurred by a Professional from the Petition Date through and including the Effective Date, to the extent such fees and expenses have not been paid or are disallowed pursuant to an order of the Bankruptcy Court and regardless of whether a fee application has been filed for such fees and expenses.

120. “Professional Fee Escrow” means one or more interest-bearing escrow accounts to be funded on the Effective Date from the Sale Proceeds and the Excluded Assets in an amount equal to the Professional Fee Claims Estimate. For the avoidance of doubt, the Professional Fee Account (as defined in the Final DIP Orders) held by counsel for the Debtors and counsel for the Committee, respectively, may serve as the Professional Fee Escrow.

121. “Professional Fee Claims Estimate” means the amount of Professional Fee Claims that are estimated by each applicable Professional in good faith to be accrued but unpaid as of the Effective Date less funds held in trust in the Professional Trust Accounts for the applicable Professional.

122. “Professional Trust Accounts” means the Professional Fees Account (as defined in the Final DIP Orders) established pursuant to the Final DIP Orders.

123. “Proof of Claim” means a proof of Claim Filed against any of the Debtors in the Chapter 11 Cases.

124. “Purchase Agreement” means that certain Asset Purchase Agreement by and among the Debtors and the Purchaser dated as of January 27, 2014, as amended by that certain Amendment No. 1, dated as of February 12, 2014, by and among the Debtors and the Purchaser, and that certain Amendment No. 2, dated as of February 17, 2014, by and among the Debtors and the Purchaser.

125. “Purchaser” means Wanxiang America Corporation, together with its successors and permitted assigns.


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126. “Related Party Notes” means the various promissory notes in favor of each of the Related Party Lenders, including but not limited to the promissory notes set forth on Exhibit A hereto.

127. “Related Party Note Claim” means any Claim on related to or arising from the Related Party Notes.

128. “Related Party Lenders” means Ace Strength International Limited, FAH Loan Purchase Fund, LLC, GSR Principals Fund IV, L.P., GSR Special Situation I Limited, GSR Ventures IV, L.P., JR Holdings IV, Ltd., SugarPine Kids Trust, and certain of their respective Affiliates in their respective capacity as lenders from time to time under the Related Party Notes.

129. “Released Parties” means: (a) each of the Debtors’ current and former officers, directors, managers, principals, employees, agents, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, and other professionals, in each case solely in their capacity as such; (b) the Hybrid Parties; and (c) DEDA; provided that, as a condition to receiving or enforcing any release granted pursuant to Article IX.D or Article IX.E hereof, each Released Party and its Affiliates shall release or be deemed to have released the Releasing Parties, the Estates, and the Debtors for any and all Claims or Causes of Action arising from or related to their relationship with the Debtors, including any Related Party Note Claims, but not, for the avoidance of doubt, Professional Fee Claims; provided further that DEDA shall not be required to release or waive any recovery from the Debtors’ Estates on account of its Allowed General Unsecured Claim as provided herein as a condition to receiving or enforcing such release. For the avoidance of doubt, and notwithstanding anything herein to the contrary, in no event shall an Entity that checks the box on the Ballot and returns such Ballot in accordance with the Disclosure Statement Order to opt out of the third party release provided in Article IX.E hereof be a Released Party.

130. “Releasing Parties” means: (a) the Hybrid Parties; (b) the Released Parties; (c) all Holders of Claims who are deemed to accept the Plan; (d) DEDA; (e) with respect to any other Entities, Holders of Claims entitled to vote to accept the Plan that do not affirmatively opt out of the third party release provided by Article IX.E hereof pursuant to a duly executed Ballot; and (f) with respect to each of the foregoing Entities, their respective current and former officers, directors, managers, principals, employees, agents, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, and other professionals, in each case in their capacity as such; provided that, notwithstanding anything contained herein to the contrary, in no event shall an Entity that checks the box on the Ballot and returns such Ballot in accordance with the Disclosure Statement Order to opt out of the third party release provided in Article IX.E. hereof be a Released Party.

131. “Restructuring Fee” means Cash in an amount equal to $750,000.

132. “Sale Proceeds” means all proceeds from the Sale Transaction, including the Cash Sale Proceeds from the Sale Transaction, the right to enforce the Purchase Agreement, and the Equity Consideration.

133. “Sale Transaction” means that certain transaction between the Debtors and the Purchaser as set forth in the Purchase Agreement.

134. “Schedules” means, collectively, the schedules of assets and liabilities, schedules of Executory Contracts and Unexpired Leases, and statements of financial affairs Filed by the Debtors pursuant to section 521 of the Bankruptcy Code and in substantial accordance with the Official Bankruptcy Forms, as the same may have been amended, modified, or supplemented from time to time.

135. “Section 510(b) Claims” means any Claim subject to subordination under section 510(b) of the Bankruptcy Code; provided that a Section 510(b) Claim shall not include any Claim subject to subordination under section 510(b) of the Bankruptcy Code arising from or related to an Interest.

136. “Secured” means when referring to a Claim: (a) secured by a Lien on property in which the applicable Estate has an interest, which Lien is valid, perfected, and enforceable pursuant to applicable law or by reason of a Bankruptcy Court order, or that is subject to setoff pursuant to section 553 of the Bankruptcy Code, to the extent of the value of the creditor’s interest in such Estate’s interest in such property or to the extent of the


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amount subject to setoff, as applicable, as determined pursuant to section 506(a) of the Bankruptcy Code; or (b) otherwise Allowed pursuant to the Plan or a Final Order as a Secured Claim.

137. “Senior Loan” means the loan facilities provided pursuant to the Senior Loan Agreement.

138. “Senior Loan Agreement” means that certain Loan Arrangement and Reimbursement Agreement, dated as of April 22, 2010, between the Debtors and the Senior Secured Lender, as amended, supplemented or otherwise modified from time to time.

139. “Senior Loan Claim” means any Claim arising under or related to the Senior Loan, including any Hybrid Deficiency Claim.

140. “Senior Secured Lender” means Hybrid Tech Holdings, LLC, as successor in interest to the DOE with respect to the Senior Loan Agreement.

141. “Solicitation Procedures” means that form of solicitation procedures approved by and attached as an exhibit to the Disclosure Statement Order.

142. “Subordinated Creditor” means any creditor whose lien or payment rights may be subordinated to the Senior Secured Lender pursuant to an Intercreditor Agreement, or otherwise.

143. “Subsequent Distribution Date” means the date on which the Liquidating Trustee, in its reasonable discretion, elects to make distributions to Holders of Allowed Claims pursuant to the Plan.

144. “SVB” means Silicon Valley Bank.

145. “SVB Cash Distribution” means distribution of the SVB Cash Payment to Holders of Allowed SVB Loan Secured Claims in accordance with Article III.C.4 hereof.

146. “SVB Cash Payment” means Cash in an amount equal to $350,000.00.

147. “SVB Deficiency Claim” means, with respect to the SVB Loan, any portion of the SVB Loan that is not satisfied pursuant to the SVB Cash Distribution.

148. “SVB Loan” means the term loan facility and an asset-based revolving credit facility provided pursuant to the SVB Loan Agreement.

149. “SVB Loan Agreement” means that certain Loan Agreement dated as of July 30, 2010, between Fisker Automotive, as borrower, Holdings, as obligor, and SVB, as lender.

150. “SVB Loan Secured Claim” means the Secured Claim arising from the SVB Loan, which is an amount equal to the SVB Cash Payment. For the avoidance of doubt, the SVB Loan Secured Claims do not include any SVB Deficiency Claims.

151. “Unexpired Lease” means a lease of nonresidential real property to which one or more of the Debtors is a party that is subject to assumption or rejection under sections 365 or 1123 of the Bankruptcy Code.

152. “Unimpaired” means, with respect to a Class of Claims or Interests, a Claim or an Interest that is unimpaired within the meaning of section 1124 of the Bankruptcy Code.

153. “United States” means the United States of America and its agencies.

154. “U.S. Trustee” means the United States Trustee for the District of Delaware.


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155. “U.S. Trustee Fees” means fees arising under 28 U.S.C. § 1930(a)(6) and, to the extent applicable, accrued interest thereon arising under 31 U.S.C. § 3717.

156. “Valmet Intercreditor Agreement” means that certain Direct Agreement between Valmet Automotive, Inc. and Midland Loan Services, Inc., as Collateral Agent, dated as of April 22, 2010.

157. “WARN Adversary Claim” means any Claim arising from or related to the WARN Adversary Proceeding.

158. “WARN Adversary Proceeding” means that certain class action adversary proceeding captioned Sven Eztelsberger v. Fisker Automotive Holdings, Inc. and Fisker Automotive, Inc., Case No. 13-13087 (Bankr. D. Del. 2013).

159. “WARN Claims Reserve” means a sub-reserve of the Priority Claims Reserve, which shall hold Cash in an amount equal to $1,900,000 for the payment of any disputed WARN Adversary Claim until the WARN Adversary Proceeding has been resolved by Final Order. For the avoidance of doubt, the WARN Claims Reserve shall be included in, and not in addition to, the Priority Claims Reserve.

160. “Warranty Agreement” means any Executory Contract entered into by a Debtor prior to the Effective Date providing for maintenance or repairs to any Fisker Karma purchased prior to the Petition Date.

161. “Warranty Claim” means any Claim for any express or implied warranty relating to maintenance or repairs to any Fisker Karma purchased prior to the Petition Date, including any claims arising under a Warranty Agreement or dealership agreement.

162. “Warranty Program” means the program governing the treatment of certain Warranty Claims in accordance with Article III.C.7 hereof, which shall be in form and substance materially consistent with the Plan and otherwise reasonably acceptable to the Debtors, the Committee, and Purchaser, and included as an exhibit to the Plan Supplement.

163. “Wanxiang DIP Facility” means that certain debtor-in-possession financing facility entered into pursuant to the Final Wanxiang DIP Order.

164. “Wanxiang DIP Facility Claim” means any Claim arising under or related to the Wanxiang DIP Facility.

165. “Wanxiang DIP Lenders” means the lenders with respect to the Wanxiang DIP Facility, each solely in their capacities as such.

166. “Wind Down” means the wind down, dissolution, and liquidation of the Debtors’ Estates following the Effective Date as set forth in Article VII.K hereof.

B. Rules of Interpretation

For purposes herein: (1) in the appropriate context, each term, whether stated in the singular or the plural, shall include both the singular and the plural, and pronouns stated in the masculine, feminine, or neuter gender shall include the masculine, feminine, and the neuter gender; (2) any reference in the Plan to a contract, lease, instrument, release, indenture, or other agreement or document being in a particular form or on particular terms and conditions means that the referenced document shall be substantially in that form or substantially on those terms and conditions; (3) any reference in the Plan to an existing document or exhibit having been Filed or to be Filed shall mean that document or exhibit, as it may thereafter be amended, modified, or supplemented from time to time; (4) unless otherwise specified, all references in the Plan to “Articles” are references to Articles hereof or hereto; (5) unless otherwise stated, the words “herein,” “hereof,” and ‘‘hereto’’ refer to the Plan in its entirety rather than to a particular portion of the Plan; (6) captions and headings to Articles are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation hereof; (7) the rules of construction set forth in


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section 102 of the Bankruptcy Code shall apply; and (8) any term used in capitalized form in the Plan that is not otherwise defined but that is used in the Bankruptcy Code or the Bankruptcy Rules shall have the meaning assigned to that term in the Bankruptcy Code or the Bankruptcy Rules, as the case may be.

C. Computation of Time

The provisions of Bankruptcy Rule 9006(a) shall apply in computing any period of time prescribed or allowed in the Plan.

D. Governing Law

Except to the extent the Bankruptcy Code or Bankruptcy Rules apply, and subject to the provisions of any contract, lease, instrument, release, indenture, or other agreement or document entered into expressly in connection herewith, the rights and obligations arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without giving effect to the principles of conflict of laws thereof.

E. Reference to Monetary Figures

All references in the Plan to monetary figures shall refer to currency of the United States, unless otherwise expressly provided in the Plan.

F. Controlling Document

In the event of an inconsistency between the Plan and the Disclosure Statement, the terms of the Plan shall control in all respects. In the event of an inconsistency between the Plan and the Plan Supplement, the Plan shall control. In the event of any inconsistency between the Plan and the Confirmation Order, the Confirmation Order shall control.

ARTICLE II. ADMINISTRATIVE CLAIMS, PRIORITY TAX CLAIMS, DIP FACILITY CLAIMS, AND

PROFESSIONAL FEE CLAIMS

A. Administrative Claims; Priority Tax Claims

Unless otherwise agreed to by the Holder of an Allowed Administrative Claim or Allowed Priority Tax Claim, as applicable, and the Debtors or the Liquidating Trustee, as applicable, to the extent an Allowed Administrative Claim or Allowed Priority Tax Claim, as applicable, has not already been paid in full during the Chapter 11 Cases, Allowed Administrative Claims and Allowed Priority Tax Claims shall be satisfied in full with a Cash distribution from the Priority Claims Reserve.

Except as otherwise provided by a Final Order previously entered by the Bankruptcy Court (including the Bar Date Order) or as provided by Article II.B hereof, unless previously Filed, requests for payment of Administrative Claims, other than requests for payment of Professional Fee Claims, must be Filed and served on the Debtors no later than the Administrative Claims Bar Date pursuant to the procedures specified in the Confirmation Order and the notice of entry of the Confirmation Order.

Holders of Administrative Claims that are required to File and serve a request for payment of such Administrative Claims that do not File and serve such a request by the Administrative Claims Bar Date shall be forever barred, estopped, and enjoined from asserting such Administrative Claims against the Debtors or their property, and such Administrative Claims shall be deemed compromised, settled, and released as of the Effective Date. Objections to such requests must be Filed and served on the requesting party by the Administrative Claims Objection Bar Date.


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B. DIP Facility Claims

1. Wanxiang DIP Facility Claims

Except to the extent that a Holder of an Allowed Wanxiang DIP Facility Claim agrees to a less favorable treatment, to the extent that any Allowed Wanxiang DIP Facility Claim remain unpaid as of the Effective Date, such Allowed Wanxiang DIP Facility Claim shall be paid in full with a distribution from the Priority Claims Reserve on the Effective Date in full and final satisfaction, settlement, release, and discharge of, and in exchange for, each Allowed Wanxiang DIP Facility Claim.

2. Hybrid DIP Facility Claims

Subject to the occurrence of each of the SVB Cash Distribution and the Hybrid Cash Distribution and the occurrence of the Effective Date, to the extent that any Hybrid DIP Facility Claims remains unpaid as of the Effective Date, such Hybrid DIP Facility Claims shall be waived and deemed to have been waived as of the Effective Date.

C. Professional Fee Claims

1. Professional Fee Escrow

If the Professional Fee Claims Estimate is greater than zero, as soon as reasonably practicable after the Confirmation Date and no later than the Effective Date, the Debtors shall establish and fund the Professional Fee Escrow. The Debtors shall fund the Professional Fee Escrow with Cash equal to the Professional Fee Claims Estimate. Except as provided in the Plan, the Professional Fee Escrow shall be funded on the Effective Date and maintained in trust for the Professionals and shall not be considered property of the Debtors’ Estates or a Liquidating Trust Asset. When all Allowed Professional Fee Claims have been paid in full, amounts remaining in the Professional Fee Escrow, if any, shall be transferred to the Priority Claims Reserve and shall be distributed in accordance with the Plan.

To the extent that funds held in the Professional Fee Escrow are unable to satisfy the amount of Allowed Professional Fee Claims owing to the Professionals after application of funds held in the applicable Professional Trust Account, such Professionals shall have an Allowed Administrative Claim for any such deficiency, which Allowed Administrative Claim shall be satisfied in accordance with the Plan.

2. Final Fee Applications

All final requests for payment of Professional Fee Claims shall be filed no later than the first Business Day that is 45 days after the Effective Date. After notice and a hearing in accordance with the procedures established by the Bankruptcy Code and prior Bankruptcy Court orders, the Allowed amounts of such Professional Fee Claims shall be determined by the Bankruptcy Court. Subject to Article II.C.1 hereof, the amount of Professional Fee Claims owing to the Professionals shall be paid in Cash to such Professionals from funds held in the Professional Fee Escrow, or as otherwise provided herein, when such Claims are allowed by an order of the Bankruptcy Court, which order is not subject to a stay.

D. Priority Claims Reserve

On or after the Effective Date, Hybrid shall promptly cause the Priority Claims Reserve Subsequent Funding to occur as needed to satisfy the amount of Allowed Priority Claims against the Estates in accordance with Article II hereof.

Subject to the provisions of Article VI.B.1 hereof, the Manager shall administer the Priority Claims Reserve and direct the disbursement of assets from the Priority Claims Reserve for payment of Allowed Priority Claims; provided, that, prior to the Effective Date, the Debtors shall consult in good faith with Hybrid and give


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Hybrid or its designee reasonable written notice and an opportunity to object prior to the allowance of settlement of any Claim otherwise entitled to a distribution from the Priority Claims Reserve.

To the extent that funds held in the Priority Claims Reserve are insufficient to satisfy the amount of Allowed Priority Claims against the Estates, whether allowed as of the Effective Date or afterwards (but for the avoidance of doubt, such Claims must have been incurred and accrued prior to the Effective Date), after application of such funds in accordance with this Article II, Hybrid shall cause one or more instances of the Priority Claims Reserve Subsequent Funding to occur.

For the avoidance of doubt, funds held in the Priority Claims Reserve shall not be Liquidating Trust Assets and, to the extent Cash remains in the Priority Claims Reserve after payment of all Allowed Priority Claims, the Manager shall promptly remit such balance to Hybrid or Hybrid’s designee. For Federal income tax purposes, the Priority Claims Reserve shall be treated as a disregarded entity (or grantor trust) wholly owned by Hybrid, and Hybrid shall cause the Priority Claims Reserve to comply with all tax withholding and tax reporting obligations imposed by applicable law.

The Manager, all professionals retained by the Manager, and representatives of each of the foregoing shall be deemed exculpated and indemnified in all respects in a manner identical to the exculpation and indemnification provisions provided to the Liquidation Trustee under the terms of the Liquidating Trust Agreement.

E. Hybrid Reservation of Rights

Hybrid reserves all rights to review and object, including through its designee, to Priority Claims asserted against the Debtors or their Estates in accordance with the terms herein.

F. U.S. Trustee Statutory Fees

The Debtors or the Liquidating Trustee, as applicable, shall pay all U.S. Trustee Fees for each quarter (including any fraction thereof) until the Chapter 11 Cases are converted, dismissed, or closed, whichever occurs first.

ARTICLE III. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, Priority Tax Claims, DIP Facility Claims, and Professional Fee Claims have not been classified and thus are excluded from the Classes of Claims and Interests set forth in this Article III.

A. Summary of Classification of Claims and Interests

All Claims and Interests, other than Administrative Claims, Priority Tax Claims, DIP Facility Claims, and Professional Fee Claims are classified in the Classes set forth in this Article III for all purposes, including voting, Confirmation, and distributions pursuant to the Plan and pursuant to sections 1122 and 1123(a)(1) of the Bankruptcy Code. A Claim or Interest is classified in a particular Class only to the extent that the Claim or Interest qualifies within the description of that Class and is classified in other Classes to the extent that any portion of the Claim or Interest qualifies within the description of such other Classes. A Claim or Interest is also classified in a particular Class for the purpose of receiving distributions pursuant to the Plan only to the extent that such Claim or Interest is an Allowed Claim or Allowed Interest in that Class and has not been paid, released, or otherwise satisfied prior to the Effective Date. The Debtors reserve the right to withdraw the Plan with respect to one or more Debtors while seeking Confirmation or approval of the Plan with respect to all other Debtors.

B. Class Identification

The classification of Claims and Interests against each Debtor (as applicable) pursuant to the Plan is as set forth below. The Plan shall apply as a separate Plan for each of the Debtors, and the classification of Claims and


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Interests set forth herein shall apply separately to each of the Debtors. All of the potential Classes for the Debtors are set forth herein. Certain of the Debtors may not have Holders of Claims or Interests in a particular Class or Classes, and such Claims shall be treated as set forth in Article III.E hereof. For all purposes under the Plan, each Class will contain sub-Classes for each of the Debtors, as applicable.

Class Claims and Interests Status Voting Rights

1 Other Priority Claims Unimpaired Not Entitled to Vote


2 Senior Loan Claims Impaired Entitled to Vote

3 Other Secured Claims Unimpaired Not Entitled to Vote


4 SVB Loan Secured Claims Impaired Entitled to Vote

5A General Unsecured Claims

against Holdings Impaired Entitled to Vote

5B General Unsecured Claims against Fisker Automotive

Impaired Entitled to Vote

6 Warranty Claims Impaired Entitled to Vote

7 Intercompany Claims Impaired Not Entitled to Vote (Deemed to Reject)

8 Section 510(b) Claims Impaired Not Entitled to Vote (Deemed to Reject)

9 Intercompany Interests Impaired Not Entitled to Vote (Deemed to Reject)

10 Holdings Interests Impaired Not Entitled to Vote (Deemed to Reject)

C. Classification of Claims and Interests

1. Class 1—Other Priority Claims

(a) Classification: Class 1 consists of all Other Priority Claims.

(b) Treatment: Except to the extent that a Holder of an Allowed Class 1 Claim agrees to a less favorable treatment of its Allowed Claim, in full and final satisfaction, compromise, settlement, and release of and in exchange for each Allowed Class 1 Other Priority Claim, each such Holder shall be paid in full with a distribution from the Priority Claims Reserve in accordance with the priorities set forth in Bankruptcy Code.

(c) Voting: Class 1 is Unimpaired. Holders of Claims in Class 1 are not entitled to vote to accept or reject the Plan.


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2. Class 2—Senior Loan Claims

(a) Classification: Class 2 consists of all Senior Loan Claims.

(b) Allowance: Senior Loan Claims shall be Allowed in the amount of the Hybrid Cash Distribution.

(c) Treatment: On the Effective Date, each Allowed Class 2 Claim shall be satisfied, compromised, settled, and released in full in exchange for the Hybrid Cash Distribution.

(d) Withdrawal of Deficiency Claim: The Holder of such Claim shall withdraw any Hybrid Deficiency Claim.

(e) Voting: Class 2 is Impaired. Holders of Claims in Class 2 are entitled to vote to accept or reject the Plan.

3. Class 3—Other Secured Claims

(a) Classification: Class 3 consists of all Other Secured Claims.

(b) Treatment: Except to the extent that a Holder of an Allowed Class 3 Claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, and release of and in exchange for each Class 3 Claim, each such Holder shall receive, at the Liquidating Trustee’s election:

(i) with Hybrid’s consent, payment in full in Cash of such Holder’s Allowed Other Secured Claim with a distribution from the Priority Claims Reserve in accordance with the priorities set forth in Bankruptcy Code;

(ii) the Liquidating Trust’s interest in the Collateral securing such Holder’s Allowed Other Secured Claim; or

(iii) such other treatment rendering such Holder’s Allowed Other Secured Claim Unimpaired.

(c) Voting: Class 3 is Unimpaired. Holders of Claims in Class 3 are not entitled to vote to accept or reject the Plan.

4. Class 4—SVB Loan Secured Claims

(a) Classification: Class 4 consists of all SVB Loan Secured Claims.

(b) Allowance: SVB Loan Secured Claims shall be Allowed in the amount of the SVB Cash Distribution.

(c) Treatment: On the Effective Date, each Allowed Class 4 Claim shall be satisfied, compromised, settled, and released in full in exchange for the SVB Cash Distribution.

(d) Voting: Class 4 is Impaired. Holders of Claims in Class 4 are entitled to vote to accept or reject the Plan.

5. Class 5A—General Unsecured Claims against Holdings

(a) Classification: Class 5A consists of all General Unsecured Claims against Holdings.


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(b) Treatment: Except to the extent that a Holder of an Allowed Class 5A Claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, and release of and in exchange for each Class 5A Claim, Allowed Class 5A Claims shall receive a beneficial interest in its Pro Rata share of the Liquidating Trust Assets.

(c) Voting: Class 5A is Impaired. Holders of Claims in Class 5A are entitled to vote to accept or reject the Plan.

6. Class 5B—General Unsecured Claims against Fisker Automotive

(a) Classification: Class 5B consists of all General Unsecured Claims against Fisker Automotive.

(b) Treatment: Except to the extent that a Holder of an Allowed Class 5B Claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, and release of and in exchange for each Class 5B Claim, Allowed Class 5B Claims shall receive a beneficial interest in its Pro Rata share of the Liquidating Trust Assets.

(c) Voting: Class 5B is Impaired. Holders of Claims in Class 5B are entitled to vote to accept or reject the Plan.

7. Class 6—Warranty Claims

(a) Classification: Class 6 consists of all Warranty Claims.

(b) Treatment: Except to the extent that a Holder of an Allowed Class 6 Claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, and release of and in exchange for each Class 6 Claim, each Holder of an Allowed Class 6 Claim shall receive:

(i) if such Holder elects to opt out of the Warranty Program, a beneficial interest in its Pro Rata share of the Liquidating Trust Assets.

(ii) if such Holder does not elect to opt out of the Warranty Program, the treatment set forth in the Warranty Program.

(c) Voting: Class 6 is Impaired. Holders of Claims in Class 6 are entitled to vote to accept or reject the Plan.

8. Class 7—Intercompany Claims

(a) Classification: Class 7 consists of all Intercompany Claims.

(b) Treatment: Class 7 Claims will be canceled, released, and extinguished as of the Effective Date, and will be of no further force or effect, and Holders of Class 7 Claims will not receive any distribution on account of such Class 7 Claim; provided, however, the Liquidating Trustee may reinstate Class 7 Claims in its discretion solely to implement the Plan.

(c) Voting: Class 7 is Impaired. Holders of Claims in Class 7 are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and, therefore, are not entitled to vote to accept or reject the Plan.


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9. Class 8—Section 510(b) Claims

(a) Classification: Class 8 consists of all Section 510(b) Claims.

(b) Treatment: Class 8 Claims will be canceled, released, and extinguished as of the Effective Date, and will be of no further force or effect, and Holders of Class 8 Claims will not receive any distribution on account of such Class 8 Claims.

(c) Voting: Class 8 is Impaired. Holders of Claims in Class 8 are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and, therefore, are not entitled to vote to accept or reject the Plan.

10. Class 9—Intercompany Interests

(a) Classification: Class 9 consists of all Intercompany Interests.

(b) Treatment: Class 9 Interests will be canceled, released, and extinguished as of the Effective Date, and will be of no further force or effect, and Holders of Class 9 Interests will not receive any distribution on account of such Class 9 Interests; provided, however, the Liquidating Trustee may reinstate Class 9 Interests in its discretion solely to implement the Plan.

(c) Voting: Class 9 is Impaired. Holders of Interests in Class 9 are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and, therefore, are not entitled to vote to accept or reject the Plan.

11. Class 10—Holdings Interests

(a) Classification: Class 10 consists of all Holdings Interests.

(b) Treatment: Class 10 Interests will be canceled, released, and extinguished as of the Effective Date, and will be of no further force or effect, and Holders of Class 10 Interests will not receive any distribution on account of such Class 10 Interests.

(c) Voting: Class 10 is Impaired. Holders of Interests in Class 10 are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and, therefore, are not entitled to vote to accept or reject the Plan.

D. Special Provision Governing Unimpaired Claims

Except as otherwise provided in the Plan, nothing under the Plan shall affect the rights of the Liquidating Trustee, the Debtors, or the Debtors’ Estates in respect of any Unimpaired Claims, including all rights in respect of legal and equitable defenses to or setoffs or recoupments against any such Unimpaired Claims.

E. Elimination of Vacant Classes

Any Class of Claims or Interests that does not have a Holder of an Allowed Claim or Allowed Interest or a Claim or Interest temporarily Allowed by the Bankruptcy Court as of the date of the Confirmation Hearing shall be deemed eliminated from the Plan for purposes of voting to accept or reject the Plan and for purposes of determining acceptance or rejection of the Plan by such Class pursuant to section 1129(a)(8) of the Bankruptcy Code.


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F. Voting Classes; Presumed Acceptance by Non-Voting Classes

If a Class contains Claims or Interests eligible to vote and no Holders of Claims or Interests eligible to vote in such Class vote to accept or reject the Plan, the Debtors shall request the Bankruptcy Court at the Confirmation Hearing to deem the Plan accepted by the Holders of such Claims or Interests in such Class.

G. Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy Code

The Debtors shall seek Confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code with respect to any rejecting Class of Claims or Interests. The Debtors reserve the right to modify the Plan, with the reasonable consent of the Committee and Hybrid, in accordance with Article XI hereof to the extent, if any, that Confirmation pursuant to section 1129(b) of the Bankruptcy Code requires modification, including by modifying the treatment applicable to a Class of Claims or Interests to render such Class of Claims or Interests Unimpaired to the extent permitted by the Bankruptcy Code and the Bankruptcy Rules.

ARTICLE IV. MEANS FOR IMPLEMENTATION OF THE PLAN

A. Sources of Consideration for Plan Distributions

The Debtors’ Cash on hand, Sale Proceeds, the Debtors’ rights under the Purchase Agreement, the Excluded Assets, and Hybrid’s undertaking to cause one or more instances of the Priority Claims Reserve Subsequent Funding to occur shall be used to fund the distributions to Holders of Allowed Claims against the Debtors in accordance with the treatment of such Claims provided herein.

B. Hybrid Parties’ Claims Waiver

Subject to the occurrence of each of the SVB Cash Distribution, the Hybrid Cash Distribution, and the Effective Date, each Hybrid Party shall waive and shall be deemed to have waived any distribution from the Debtors, their Estates, and the Liquidating Trust on account of any other Claims or Causes of Action such Entities hold or may hold against the Debtors or their Estates, including any Hybrid Deficiency Claim arising from the Senior Loans and/or any Claim arising from the Related Party Notes.

Notwithstanding anything herein to the contrary, the Intercreditor Agreements shall remain in full force and effect and remain binding on the parties thereto (but, for the avoidance of doubt, shall not be enforceable by the Liquidating Trustee or any entity not party to the Intercreditor Agreements); provided that, to the extent any Subordinated Creditor receives any distribution under this Plan and Hybrid would otherwise be entitled to a pay-over of such distributions from the Subordinated Creditor under an Intercreditor Agreement or otherwise, Hybrid shall be deemed to waive its pay-over right and the Subordinated Creditor shall be entitled to retain such distributions to the full extent that such Subordinated Creditor receives the same Pro Rata distributions payable to Holders of the Allowed Claims of the same Class.

C. The Liquidating Trust

On or prior to the Effective Date, the Debtors, on their own behalf and on behalf of the Beneficiaries, will execute the Liquidating Trust Agreement and will take all other steps necessary to establish the Liquidating Trust pursuant to the Liquidating Trust Agreement as further described in Article VII hereof. On the Effective Date, and in accordance with and pursuant to the terms of the Plan, the Debtors will transfer to the Liquidating Trust all of their rights, title, and interests in all of the Liquidating Trust Assets.

Notwithstanding anything to the contrary in the Plan, any disclosure or examination of any Privileged Documents shall be limited to the Liquidating Trustee and the attorneys that the Liquidating Trustee has retained on behalf of the Liquidating Trust for the purpose of pursuing Causes of Action or claims not released by the Debtors, those attorneys’ administrative support personnel, and any consulting, non-testifying experts retained by the Liquidating Trustee on behalf of the Liquidating Trust for the purpose of assisting the Liquidating Trust in pursuing


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such Causes of Action or claims. The Liquidating Trustee may not disclose any of the Privileged Documents (or the contents of the Privileged Documents), or otherwise take any actions that may constitute a waiver of the attorney-client privilege, work product privilege, common interest privilege, or any other applicable privileges with respect to the Privileged Documents, without giving three (3) Business Days’ notice to the applicable affected party and an opportunity to object. Nothing in the Plan shall constitute a waiver of any privilege claims over any of the documents, including the Privileged Documents, that are produced to or received by the Liquidating Trust or Liquidating Trustee. For the avoidance of doubt, the Liquidating Trust is a successor-in-interest to the Debtors, and thus, the transfer of the Privileged Documents as provided herein does not impair or waive any privilege.

D. General Settlement of Claims

Pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, and in consideration for the classification, distributions, releases, and other benefits provided under the Plan, on the Effective Date, the provisions of the Plan shall constitute a good-faith compromise and settlement of all Claims, Interests, and controversies resolved pursuant to the Plan. Without limiting the generality of the foregoing, the distributions for General Unsecured Claims are solely on account of the compromise and settlement of the dispute over the value of allegedly unperfected liens purportedly securing the Senior Loan and the extent of Hybrid's entitlement to the proceeds of the Estates' assets under Finnish and other applicable law pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019.

E. Corporate Action

Upon the Effective Date, by virtue of the solicitation of votes in favor of this Plan and entry of the Confirmation Order, all actions contemplated by the Plan (including any action to be undertaken by the Liquidating Trustee) shall be deemed authorized, approved, and, to the extent taken prior to the Effective Date, ratified without any requirement for further action by Holders of Claims or Interests, the Debtors, or any other Entity or Person. All matters provided for in the Plan involving the corporate structure of the Debtors, and any corporate action required by the Debtors in connection therewith, shall be deemed to have occurred and shall be in effect, without any requirement of further action by the Debtors or the Debtors’ Estates.

The authorizations and approvals contemplated by this Article IV.E shall be effective notwithstanding any requirements under applicable nonbankruptcy law.

F. Dissolution and Boards of the Debtors

As of the Effective Date, the existing boards of directors of the Debtors shall be dissolved without any further action required on the part of the Debtors or the Debtors’ officers, directors, shareholders, and members and any all remaining officers or directors of each Debtor shall be dismissed without any further action required on the part of any such Debtor, the shareholders of such Debtor, or the officers and directors of such Debtor.

G. Effectuating Documents; Further Transactions

Prior to the Effective Date, the Debtors, and on and after the Effective Date, the Liquidating Trustee is authorized to and may issue, execute, deliver, file, or record such contracts, securities, instruments, releases, and other agreements or documents and take such actions as may be necessary or appropriate to effectuate, implement, and further evidence the terms and conditions of the Plan, without the need for any approvals, authorization, or consents except for those expressly required pursuant to the Plan.

H. Exemption from Certain Taxes and Fees

To the maximum extent provided by section 1146(a) of the Bankruptcy Code, any Post-Confirmation transfer from any Entity pursuant to, in contemplation of, or in connection with the Plan or pursuant to: (1) the issuance, distribution, transfer, or exchange of any debt, equity security, or other interest in the Debtors; or (2) the making, delivery, or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including any deeds, bills of sale, assignments, or other instruments of transfer executed in


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connection with any transaction arising out of, contemplated by, or in any way related to the Plan, shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, real estate transfer tax, mortgage recording tax, Uniform Commercial Code filing or recording fee, or other similar tax or governmental assessment, in each case to the extent permitted by applicable bankruptcy law, and the appropriate state or local government officials or agents shall forego collection of any such tax or governmental assessment and accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment.

I. Restructuring Fee

On the Effective Date, the Restructuring Fee shall be disbursed from the Professional Fee Escrow in accordance with Section 2(b) of Exhibit 1 to the Order (A) Authorizing the Employment and Retention of Beilinson Advisory Group, LLC as Restructuring Advisors for the Debtors, Effective Nunc Pro Tunc to the Petition Date and (B) Waiving Certain Time-Keeping Requirements [Docket No. 522].

J. Preservation of Rights of Action

Other than Causes of Action against an Entity that are waived, relinquished, exculpated, released, compromised, or settled in the Plan or by a Bankruptcy Court order (including, for the avoidance of doubt, any claims or Causes of Action released pursuant to Article IX.D hereof), the Debtors reserve and, as of the Effective Date, assign to the Liquidating Trust, any and all Causes of Action, including without limitation any actions specifically enumerated in the Plan Supplement and any actions against Bayerische Motoren Werke Aktiengesellschaft or its affiliates and representatives, whether arising before or after the Petition Date. On and after the Effective Date, the Liquidating Trustee may pursue such Causes of Action in its sole discretion.

Subject in all respects to Article IX.D of the Plan, the Debtors shall not release any Avoidance Actions, and the Liquidating Trustee shall be authorized and empowered to enforce any such Avoidance Actions on and after the Effective Date in accordance with the terms hereof.

No Entity may rely on the absence of a specific reference in the Plan, the Plan Supplement, or the Disclosure Statement to any Cause of Action against them as any indication that the Debtors or the Liquidating Trustee will not pursue any and all available Causes of Action against them. No preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion (judicial, equitable, or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of the Confirmation or Consummation. The Debtors reserve all rights arising under section 506(c) of the Bankruptcy Code with respect to all Secured Claims asserted against the Debtors or their Estates.

The Debtors reserve the Causes of Action notwithstanding the rejection of any Executory Contract or Unexpired Lease during the Chapter 11 Cases or pursuant to the Plan. Except as otherwise provided by the Plan Settlement Term Sheet, prior to the Effective Date, the Debtors, and on and after the Effective Date, the Liquidating Trustee, shall retain and shall have, including through its authorized agents or representatives, the exclusive right, authority, and discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action and to decline to do any of the foregoing without the consent or approval of any third party or further notice to or action, order, or approval of the Bankruptcy Court. Notwithstanding anything contained herein to the contrary, the settlement of Claims and Causes of Action which are expressly to be settled by confirmation of the Plan itself, including without limitation, with respect to Claims and Causes of Action (i) against the Released Parties, including, without limitation, Hybrid and the Related Party Lenders (ii) against SVB and DEDA, (iii) raised by the Committee Standing Motion, and (iv) described in the Plan Settlement Term Sheet, shall be resolved only by Confirmation of the Plan itself.

K. Committee Standing Motion

On the Effective Date, the relief requested by the Committee Standing Motion shall be moot.


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L. Closing of Debtors’ Cases

On the Effective Date, Fisker Automotive’s Chapter 11 Case shall be closed for all purposes, without further action by the Debtors or order of the Bankruptcy Court. For the avoidance of doubt, the closing of such case shall not have any effect, in any manner, on the Causes of Action that the Liquidating Trustee may assert in accordance with the Plan and the Liquidating Trust Agreement. The jointly administered case of FAH Liquidating Corp., identified as Case No. 13-13087 (KG) (the “Main Case”) shall remain open and subject to the provisions of this Article IV.K. Notwithstanding anything to the contrary in the Bankruptcy Rules providing for earlier closure of the Main Case, when all Assets contributed to the Liquidating Trust in accordance with Article IV.B above have been liquidated and converted into Cash (other than those assets abandoned by the Liquidating Trust), and such Cash has been distributed in accordance with the Liquidating Trust Agreement and this Plan, the Liquidating Trustee shall seek authority from the Bankruptcy Court to close the Main Case in accordance with the Bankruptcy Code and the Bankruptcy Rules.

ARTICLE V. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

A. Assumption and Assignment of Executory Contracts and Unexpired Leases

On the Effective Date, except as otherwise provided in the Plan, each Executory Contract and Unexpired Lease not previously rejected, assumed, or assumed and assigned shall be deemed automatically rejected pursuant to sections 365 and 1123 of the Bankruptcy Code, unless such Executory Contract or Unexpired Lease: (1) is specifically described in the Plan as to be assumed in connection with confirmation of the Plan, or is specifically scheduled to be assumed or assumed and assigned pursuant to the Plan or the Plan Supplement; (2) is subject to a pending motion to assume such Unexpired Lease or Executory Contract as of the Effective Date; (3) was previously assumed or assumed and assigned to the Purchaser or another third party, as applicable, during the pendency of the Chapter 11 Cases; (4) is a contract, instrument, release, indenture, or other agreement or document entered into in connection with the Plan; (5) is a D&O Policy or an insurance policy (except with respect to any executory insurance policy or contract, if any, with Safeco Insurance, an affiliate of Liberty Mutual, which contract or policy shall be rejected pursuant to the Plan); (6) is the Purchase Agreement; or (7) is the LLC Agreement. Notwithstanding anything contained herein to the contrary, the assumption of any Executory Contract or Unexpired Lease as provided herein or in the Plan Supplement shall not impose, directly or indirectly, any obligation or other liability, monetary or otherwise, on the Liquidating Trust unless the Committee or, as applicable, the Liquidating Trust, with the approval of the Liquidating Trust Oversight Committee, each in their discretion, expressly agrees to such assumption as in the best interests of the Beneficiaries of the Liquidating Trust; provided that in all instances the Purchase Agreement and the LLC Agreement shall be assumed and assigned to the Liquidating Trust; provided further that Hybrid’s consent shall be required with respect to the assumption of any Executory Contract or Unexpired Lease that results in a Cure Cost payable as an Allowed Administrative Claim. For the avoidance of doubt, any Claims arising under the Purchase Agreement shall be treated as Administrative Claims in accordance with this Plan; provided, however, that the Purchaser’s right to the sharing of proceeds, if any, from Designated Causes of Action pursuant to Section 7.4 of the Purchase Agreement shall be satisfied after the Effective Date solely from the Liquidating Trust Assets.

B. Cure of Defaults for Assumed Executory Contracts and Unexpired Leases

Any Cure Obligations under each Executory Contract and Unexpired Lease to be assumed pursuant to the Plan shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the Cure Obligation in Cash on the Effective Date, subject to the limitation described below, by the Debtors as an Administrative Claim or by Purchaser in accordance with the Purchase Agreement, as applicable, or on such other terms as the parties to such Executory Contracts or Unexpired Leases may otherwise agree. In the event of a dispute regarding (1) the amount of the Cure Obligation, (2) the ability of the Debtors’ Estates or any assignee to provide “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code) under the Executory Contract or Unexpired Lease to be assumed, or (3) any other matter pertaining to assumption, the Cure Obligations required by section 365(b)(1) of the Bankruptcy Code shall be satisfied following the entry of a Final Order or orders resolving the dispute and approving the assumption; provided that prior to the Effective Date, the Debtors, and on and after


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the Effective Date, the Liquidating Trustee, may settle any dispute regarding the amount of any Cure Cost without any further notice to any party or any action, order, or approval of the Bankruptcy Court.

At least fourteen (14) days before the Confirmation Hearing, the Debtors shall cause notice of proposed assumption and proposed Cure Obligations to be sent to applicable counterparties. Any objection by such counterparty must be filed, served, and actually received by the Debtors not later than fourteen (14) days after service of notice of the Debtors’ proposed assumption and associated Cure Obligations. Any counterparty to an Executory Contract or Unexpired Lease that fails to object timely to the proposed assumption or cure amount will be deemed to have assented to such assumption or Cure Obligation.

Assumption of any Executory Contract or Unexpired Lease pursuant to the Plan, or otherwise, shall result in the full release and satisfaction of any Claims or defaults, subject to satisfaction of the Cure Obligations, whether monetary or nonmonetary, including defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults, arising under any assumed Executory Contract or Unexpired Lease at any time before the effective date of assumption and/or assignment. Anything in the Schedules and any Proofs of Claim Filed with respect to an Executory Contract or Unexpired Lease that has been assumed and assigned shall be deemed disallowed and expunged, without further notice to or action, order, or approval of the Bankruptcy Court or any other Entity.

C. Claims Based on Rejection of Executory Contracts and Unexpired Leases

Unless otherwise provided by an order of the Bankruptcy Court, any Proofs of Claim based on the rejection of the Debtors’ Executory Contracts or Unexpired Leases pursuant to the Plan or otherwise, must be Filed with Bankruptcy Court and served on the Debtors or, after the Effective Date, the Liquidating Trustee, as applicable, no later than fourteen (14) days after the earlier of the Effective Date or the effective date of rejection of such Executory Contract or Unexpired Lease. In addition, any objection to the rejection of an Executory Contract or Unexpired Lease must be filed with the Bankruptcy Court and served on the Debtors or, after the Effective Date, the Liquidating Trustee, as applicable, no later than fourteen (14) days after service of the Debtors’ proposed rejection of such Executory Contract or Unexpired Lease.

Any Holders of Claims arising from the rejection of an Executory Contract or Unexpired Lease for which Proofs of Claims were not timely Filed as set forth in the paragraph above shall not (1) be treated as a creditor with respect to such Claim, (2) be permitted to vote to accept or reject the Plan on account of any Claim arising from such rejection, or (3) participate in any distribution in the Chapter 11 Cases on account of such Claim, and any Claims arising from the rejection of an Executory Contract or Unexpired Lease not filed with the Bankruptcy Court within such time will be automatically disallowed, forever barred from assertion, and shall not be enforceable against the Debtors, the Liquidating Trustee, the Debtors’ Estates, or the property for any of the foregoing without the need for any objection by the Debtors or the Liquidating Trustee, as applicable, or further notice to, or action, order, or approval of the Bankruptcy Court or any other Entity, and any Claim arising out of the rejection of the Executory Contract or Unexpired Lease shall be deemed fully compromised, settled, and released, notwithstanding anything in the Schedules or a Proof of Claim to the contrary. All Allowed Claims arising from the rejection of the Debtors’ prepetition Executory Contracts or prepetition Unexpired Leases shall be classified as General Unsecured Claims against the appropriate Debtor, except as otherwise provided by order of the Bankruptcy Court.

D. Purchase Agreement; Designated Contracts

The Debtors’ assumption or rejection of any Executory Contract or Unexpired Lease pursuant to the Plan shall be subject in all respects to the Purchaser’s rights and obligations, including any Cure Obligations assumed by the Purchaser in accordance with the Purchase Agreement, with respect to any such Executory Contracts or Unexpired Leases that constitute Designated Contracts (as defined in the Purchase Agreement) as set forth in the Purchase Agreement, including Section 1.5(c) thereof.


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E. Modifications, Amendments, Supplements, Restatements, or Other Agreements

Unless otherwise provided in the Plan, each assumed Executory Contract or Unexpired Lease shall include all modifications, amendments, supplements, restatements, or other agreements that in any manner affect such Executory Contract or Unexpired Lease, and all Executory Contracts and Unexpired Leases related thereto, if any, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, and any other interests, unless any of the foregoing agreements has been previously rejected or repudiated or is rejected or repudiated under the Plan.

Modifications, amendments, supplements, and restatements to prepetition Executory Contracts and Unexpired Leases that have been executed by the Debtors or the Debtors on behalf of the Debtors’ Estates during the Chapter 11 Cases shall not be deemed to alter the prepetition nature of the Executory Contract or Unexpired Lease, or the validity, priority, or amount of any Claims that may arise in connection therewith.

F. Insurance Policies

Each insurance policy, including the D&O Policy, shall be assumed by the Debtors on behalf of the applicable Debtor effective as of the Effective Date, pursuant to sections 365 and 1123 of the Bankruptcy Code, to the extent such insurance policy is executory, unless such insurance policy previously was rejected by the Debtors or the Debtors’ Estates pursuant to a Bankruptcy Court order or is the subject of a motion to reject pending on the Effective Date, and coverage for defense and indemnity under the D&O Policy shall remain available to all individuals within the definition of “Insured” in the D&O Policy. Notwithstanding the foregoing, (x) upon the Effective Date, the Estates and the Liquidating Trust shall no longer have any interest in the D&O Policy or any payments made in accordance with their terms other than with respect to proceeds arising from, and coverage as to, claims or Causes of Action not settled and/or released pursuant to the Plan, and (y) any insurance policy or Executory Contract, if any, with Safeco Insurance, an affiliate of Liberty Mutual, shall be rejected pursuant to the Plan.

G. Reservation of Rights

Neither the exclusion nor inclusion of any contract or lease in the Plan Supplement, nor anything contained in the Plan, shall constitute an admission by the Debtors that any such contract or lease is in fact an Executory Contract or Unexpired Lease or that the Debtors’ Estates have any liability thereunder. In the event of a dispute regarding whether a contract or lease is or was executory or unexpired at the time of assumption or rejection, the Debtors or the Liquidating Trustee, as applicable, shall have 90 days following entry of a Final Order resolving such dispute to alter the treatment of such contract or lease as otherwise provided in the Plan.

ARTICLE VI. PROVISIONS GOVERNING DISTRIBUTIONS

A. Calculation of Amounts to Be Distributed

Each Holder of an Allowed Claim against the Debtors shall receive the full amount of the distributions that the Plan provides for Allowed Claims in the applicable Class from the Debtors or the Liquidating Trustee, on behalf of the Debtors or the Liquidating Trust, as applicable. In the event that any payment or act under the Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on the next succeeding Business Day, in which case such payment shall be deemed to have occurred when due. If and to the extent that there are Disputed Claims or Disputed Interests, distributions on account of any such Disputed Claims or Disputed Interests shall be made pursuant to the provisions set forth in Article VIII. Notwithstanding anything to the contrary in the Plan, no Holder of an Allowed Claim shall, on account of such Allowed Claim, receive a distribution in excess of the Allowed amount of such Claim plus any interest accruing on such Claim that is actually payable in accordance with the Plan.


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B. Rights and Powers of the Debtors, Liquidating Trustee, Manager, and Hybrid

1. Powers of the Debtors, Liquidating Trustee, Manager, and Hybrid

All distributions under the Plan shall be made on the Effective Date by the Debtors or thereafter by the Liquidating Trustee or the Manager, as applicable, or their designees, including with respect to distributions from the Priority Claims Reserve on account of Allowed Priority Claims; provided that prior to the Effective Date, the Debtors shall consult in good faith with Hybrid and give Hybrid or its designee reasonable written notice and an opportunity to object prior to any distributions from the Priority Claims Reserve.

After the Effective Date, (i) Hybrid and its designees or representatives as identified in the Plan Supplement (which, after the Effective Date, may include the Beilinson Advisory Group) shall have the right to object to, allow, or otherwise resolve any Priority Claim, and (ii) the Liquidating Trustee shall have the right to object, allow, or otherwise resolve any General Unsecured Claim and/or Warranty Claim. To the extent that the litigation or resolution of any Claim involves allowance of, or leaves unresolved, a Priority Claim and a General Unsecured Claim and/or Warranty Claim, then the Liquidating Trustee may object to, allow, or otherwise resolve such Priority Claim (other than the WARN Adversary Proceeding and the WARN Adversary Claims) with Hybrid’s consent in its sole discretion upon reasonable prior written notice and Hybrid and its designees or representatives may object to, allow, or otherwise resolve any such General Unsecured Claim and/or Warranty Claim with the Liquidating Trustee’s consent in its sole discretion upon reasonable prior written notice. Notwithstanding anything herein to the contrary, on the Effective Date, Hybrid or its designees and the Liquidating Trustee shall have the right to defend the WARN Adversary Proceeding and the WARN Adversary Claims on behalf of the Estates; provided that any settlement with respect to the WARN Adversary Proceeding or WARN Adversary Claims shall either be (a) mutually agreeable to Hybrid and the Liquidating Trustee in their sole discretion or (b) subject to Bankruptcy Court approval following prior consultation between Hybrid or its designees and the Liquidating Trustee, and the Bankruptcy Court may take into account the reasonableness of how any such settlement is allocated between Holders of Priority Claims and Holders of General Unsecured Claims and/or Warranty Claims.

Each of Hybrid, the Liquidating Trustee, and the Manager shall use commercially reasonable efforts to coordinate in good faith regarding the reconciliation of Claims as provided in this Article VI.B.1.

For the avoidance of doubt, to the extent Hybrid or its designees or representatives object to, allow, or otherwise resolve any Claim, including with respect to the WARN Adversary Claims and the defense of the WARN Adversary Proceeding, Hybrid shall do so at its sole cost and expense.

The Debtors, the Liquidating Trustee, and the Manager, as applicable, shall not be required to give any bond or surety or other security for the performance of its duties unless otherwise ordered by the Bankruptcy Court. Additionally, in the event that the Debtors or the Liquidating Trustee, as applicable, is so otherwise ordered, all costs and expenses of procuring any such bond or surety shall be paid for with Cash from the Liquidating Trust.

2. Expenses Incurred On or After the Effective Date

Except as otherwise ordered by the Bankruptcy Court, (i) the fees and expenses incurred by the Liquidating Trustee on or after the Effective Date (including taxes) and any reasonable compensation and expense reimbursement Claims (including attorney fees and expenses) made by the Liquidating Trustee shall be paid in Cash from the Liquidating Trust Assets without any further notice to or action, order, or approval of the Bankruptcy Court and (ii) the fees and expenses incurred by the Manager on or after the Effective Date (including taxes) and any reasonable compensation and expense reimbursement Claims (including attorney fees and expenses) made by the Manager shall be paid, upon 30 days’ notice to Hybrid containing sufficient back-up detail to ascertain reasonableness, in Cash from the Priority Claims Reserve without any further notice to or action, order, or approval of the Bankruptcy Court.


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C. Delivery of Distributions and Undeliverable or Unclaimed Distributions

1. Record Date for Distribution

On the Distribution Record Date, the Claims Register shall be closed and the Debtors, Hybrid, or the Liquidating Trustee or any other party responsible for making distributions shall instead be authorized and entitled to recognize only those record Holders listed on the Claims Register as of the close of business on the Distribution Record Date.

2. Delivery of Distributions in General

(a) Payments and Distributions on Disputed Claims

Distributions made after the Effective Date to Holders of Disputed Claims that are not Allowed Claims as of the Effective Date but which later become Allowed Claims shall, in the Liquidating Trustee’s reasonable discretion, be deemed to have been made by the Liquidating Trustee on the Effective Date, unless the Liquidating Trustee and the applicable Holder of such Claim agree otherwise.

(b) Special Rules for Distributions to Holders of Disputed Claims or Interests

Notwithstanding any provision otherwise in the Plan and except as may be agreed to by, as applicable, the Debtors, Hybrid or the Liquidating Trustee, as applicable, on the one hand, and the Holder of a Disputed Claim or Interest, on the other hand, no partial payments and no partial distributions shall be made with respect to any Disputed Claim or Interests, other than with respect to Professional Claims, until all Disputed Claims or Interests held by the Holder of such Disputed Claim have become Allowed Claims or have otherwise been resolved by settlement or Final Order.

(c) Distributions

On and after the Effective Date, the Liquidating Trustee shall make the distributions required to be made on account of Allowed Claims or Interests under the Plan on such date. Any distribution that is not made on the Initial Distribution Date or on any other date specified in the Plan because the Claim that would have been entitled to receive that distribution is not an Allowed Claim on such date, shall be held by the Liquidating Trustee in the Disputed Claims Reserve and distributed on the next Subsequent Distribution Date that occurs after such Claim is Allowed. In accordance with Article VIII.D hereof, no interest shall accrue or be paid on the unpaid amount of any distribution paid pursuant to the Plan. For the avoidance of doubt, in no event shall the Liquidating Trustee or the Liquidating Trust be required to pay from the Liquidating Trust Assets moneys that are required to be funded by Hybrid pursuant to this Plan.

3. Minimum; De Minimis Distributions

No Cash payment of less than $100.00, in the reasonable discretion of the Debtors or the Liquidating Trustee, as applicable, shall be made to a Holder of an Allowed Claim on account of such Allowed Claim.

4. Undeliverable Distributions and Unclaimed Property

In the event that any distribution to any Holder is returned as undeliverable, no distribution to such Holder shall be made unless and until the Debtors or the Liquidating Trustee, as applicable, has determined the then current address of such Holder, at which time such distribution shall be made to such Holder without interest; provided, however, such distributions shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code at the expiration of six months from the date the initial distribution is made. After such date, all unclaimed property or interests in property shall revert (notwithstanding any applicable federal or state escheat, abandoned, or unclaimed property laws to the contrary) to the Liquidating Trust or the Priority Claims Reserve (as applicable) automatically and without need for a further order by the Bankruptcy Court for distribution in accordance with the Plan and the


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Claim of any Holder to such property or interest in property shall be released, settled, compromised, and forever barred.

5. Cy Pres

Notwithstanding anything to the contrary in the Plan, if the Liquidating Trustee determines that any Beneficiaries of the Liquidating Trust no longer exist or cannot otherwise be reasonably ascertained, or the Liquidating Trustee determines that the Liquidating Trust Assets are insufficient to make any further distribution economically justifiable, the Liquidating Trustee may, in its reasonable discretion, distribute the Liquidating Trust Assets that constitute Cash to a charitable organization upon the same terms and conditions provided for in the Plan. For the avoidance of doubt, the Liquidating Trust Assets subject to this Article VI.C.5 do not include the Priority Claims Reserve.

6. Manner of Payment Pursuant to the Plan

Any payment in Cash to be made pursuant to the Plan shall be made at the election of the Debtors or the Liquidating Trustee, as applicable, by check or by wire transfer.

D. Compliance with Tax Requirements/Allocations

In connection with the Plan, to the extent applicable, the Debtors, or the Liquidating Trustee, as applicable, shall comply with all tax withholding and reporting requirements imposed on it by any Governmental Unit, and all distributions pursuant hereto shall be subject to such withholding and reporting requirements.

Distributions in respect of Allowed Claims shall be allocated first to the principal amount of such Claims (as determined for federal income tax purposes) and then, to the extent the consideration exceeds the principal amount of the Claims, to any portion of such Claims for accrued but unpaid interest.

E. Claims Paid or Payable by Third Parties

1. Claims Paid by Third Parties; Recourse to Collateral

The Debtors or the Liquidating Trustee, as applicable, shall be authorized to reduce in full a Claim, and such Claim shall be disallowed without a Claims objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court, to the extent that the Holder of such Claim receives payment in full on account of such Claim from a party that is not a Debtor or, as applicable, the Liquidating Trust, including on account of recourse to collateral held by third parties that secure such Claim. To the extent a Holder of a Claim receives a distribution on account of such Claim and receives payment from a party that is not a Debtor on account of such Claim, such Holder shall, within 14 days of receipt thereof, repay or return the distribution to the applicable Debtor, to the extent the Holder’s total recovery on account of such Claim from the third party and under the Plan exceeds the amount of such Claim as of the date of any such distribution under the Plan. The failure of such Holder to timely repay or return such distribution shall result in the Holder owing the applicable Debtor annualized interest at the Federal Judgment Rate on such amount owed for each Business Day after the 14-day grace period specified above until the amount is repaid.

Notwithstanding the foregoing, in the event a Holder of a Warranty Claim that elected to opt out of the Warranty Program receives consideration on account of a Warranty Claim under a Warranty Program established by this Plan or under the Purchase Agreement or otherwise, then any distribution from the Liquidating Trust to the Holder on account of such Warranty Claim shall be reduced by the fair value of the consideration received under the Warranty Program without any further notice to or action, order, or approval of the Bankruptcy Court.

2. Claims Payable by Insurance, Third Parties; Recourse to Collateral

No distributions under the Plan shall be made on account of an Allowed Claim that is payable pursuant to one of the Debtors’ insurance policies, surety agreements, other non-Debtor payment agreements, or collateral held


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by a third party, until the Holder of such Allowed Claim has exhausted all remedies with respect to such insurance policy, surety agreement, other non-Debtor payment agreement, or collateral, as applicable. To the extent that one or more of the Debtors’ insurers, sureties, or non-Debtor payors pays or satisfies in full or in part a Claim (if and to the extent adjudicated by a court of competent jurisdiction), or such collateral or proceeds from such collateral is used to satisfy such Claim, then immediately upon such payment, the applicable portion of such Claim shall be expunged without a Claim objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court.

3. Applicability of Insurance Policies

Notwithstanding anything to the contrary in the Plan or Confirmation Order, Confirmation and Consummation of the Plan shall not limit or affect the rights of any third-party beneficiary of any of the Debtor’s insurance policies with respect to such policies, including the D&O Policy, and the rights of the Debtors under any such insurance policies shall vest in such beneficiaries thereof as of the Effective Date.

ARTICLE VII. THE LIQUIDATING TRUST AND THE LIQUIDATING TRUSTEE

A. Liquidating Trust Creation

On the Effective Date, the Liquidating Trust will be established and become effective for the benefit of the Beneficiaries. The Liquidating Trust Agreement shall (i) be in form and substance consistent in all respects with this Plan and be reasonably acceptable to each of the Committee, Hybrid, and the Debtors and (ii) contain customary provisions for trust agreements utilized in comparable circumstances, including any and all provisions necessary to ensure continued treatment of the Liquidating Trust as a grantor trust and the Beneficiaries as the grantors and owners thereof for federal income tax purposes. All relevant parties (including the Debtors, the Liquidating Trustee, and the Beneficiaries) will take all actions necessary to cause title to the Liquidating Trust Assets to be transferred to the Liquidating Trust. The powers, authority, responsibilities, and duties of the Liquidating Trust, the Liquidating Trustee, and the Liquidating Trust Oversight Committee, are set forth in and will be governed by the Liquidating Trust Agreement, the Plan, and the Confirmation Order.

B. Purpose of the Liquidating Trust

The Liquidating Trust will be established for the primary purpose of liquidating its assets and making distributions in accordance with the Plan, Confirmation Order and the Liquidating Trust Agreement, with no objective to continue or engage in the conduct of a trade or business, except to the extent reasonably necessary to, and consistent with, the liquidating purpose of the Liquidating Trust.

C. Transfer of Assets to the Liquidating Trust

The Debtors and the Liquidating Trustee will establish the Liquidating Trust on behalf of the Beneficiaries pursuant to the Liquidating Trust Agreement, with the Beneficiaries to be treated as the grantors and deemed owners of the Liquidating Trust Assets. The Debtors will irrevocably transfer, assign, and deliver to the Liquidating Trust, on behalf of the Beneficiaries, all of their rights, title, and interests in the Liquidating Trust Assets, including any claims, rights, and Causes of Action that the Debtors may hold against any Entity in accordance with the provisions herein, notwithstanding any prohibition on assignment under non-bankruptcy law. The Liquidating Trust will accept and hold the Liquidating Trust Assets in the Liquidating Trust for the benefit of the Beneficiaries, subject to the Plan and the Liquidating Trust Agreement.

On the Effective Date, all Liquidating Trust Assets will vest and be deemed to vest in the Liquidating Trust in accordance with section 1141 of the Bankruptcy Code; provided, however, that the Liquidating Trust, with the consent of the Liquidating Trustee, may abandon or otherwise not accept any Liquidating Trust Assets that the Liquidating Trust believes, in good faith, have no value to the Liquidating Trust. Any Assets the Liquidating Trust so abandons or otherwise does not accept shall not vest in the Liquidating Trust. As of the Effective Date, all Liquidating Trust Assets vested in the Liquidating Trust shall be free and clear of all Liens, Claims and Interests


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except as otherwise specifically provided in the Plan or in the Confirmation Order. Upon the transfer by the Debtors of the Liquidating Trust Assets to the Liquidating Trust or abandonment of Liquidating Trust Assets by the Liquidating Trust, the Debtors will have no reversionary or further interest in or with respect to any Liquidating Trust Assets or the Liquidating Trust. Notwithstanding anything herein to the contrary, the Liquidating Trust and the Liquidating Trustee shall be deemed to be fully bound by the terms of the Plan and the Confirmation Order.

For the avoidance of doubt, and notwithstanding anything herein to the contrary, the Debtors shall not transfer or be deemed to have transferred to the Liquidating Trust any claims or Causes of Action (1) released pursuant to Article IX.D hereof or (2) exculpated pursuant to Article IX.F hereof to the extent of any such exculpation.

D. Tax Treatment of the Liquidating Trust

For all federal income tax purposes, the Beneficiaries of the Liquidating Trust will be treated as grantors and owners thereof and it is intended that the Liquidating Trust be classified as a Liquidating Trust under 26 C.F.R. § 301.7701–4 and that the Liquidating Trust is owned by the Beneficiaries. Accordingly, for federal income tax purposes, it is intended that the Beneficiaries be treated as if they had received a distribution of an undivided interest in the Liquidating Trust Assets and then contributed such interests to the Liquidating Trust. Accordingly, the Liquidating Trust will, in an expeditious but orderly manner, liquidate and convert to Cash the Liquidating Trust Assets, make timely distributions to the Beneficiaries pursuant to the Plan, and not unduly prolong the Liquidating Trust’s duration. The Liquidating Trust will not be deemed a successor in interest of the Debtors for any purpose other than as specifically set forth herein or in the Liquidating Trust Agreement. The Liquidating Trust is intended to qualify as a “grantor trust” for federal income tax purposes with the Beneficiaries treated as grantors and owners of the trust.

The Liquidating Trust shall file returns for the Liquidating Trust, except with respect to the Disputed Claims Reserve, as a grantor trust pursuant to Treasury Regulation Section 1.671-4(a) and in accordance with this section of the Plan. The Liquidating Trust’s taxable income, gain, loss, deduction or credit will be allocated to each holder in accordance with their relative beneficial interests in the Liquidating Trust.

As soon as possible after the Effective Date, the Liquidating Trust shall make a good faith valuation of assets of the Liquidating Trust, and such valuation shall be used consistently by all parties for all federal income tax purposes. The Liquidating Trust also shall file (or cause to be filed) any other statements, returns, or disclosures relating to the Liquidating Trust that are required by any Governmental Unit for taxing purposes.

The Liquidating Trust shall file all income tax returns with respect to any income attributable to the Disputed Claims Reserve and shall pay the federal, state and local income taxes attributable to the Disputed Claims Reserve, based on the items of income, deduction, credit or loss allocable thereto.

The Liquidating Trust may request an expedited determination of Taxes of the Debtors or of the Liquidating Trust, including the Disputed Claims Reserve, under Bankruptcy Code Section 505(b) for all returns filed for, or on behalf of, the Debtors and the Liquidating Trust for all taxable periods through the dissolution of the Liquidating Trust.

The Liquidating Trustee shall be responsible for filing all federal, state, local and foreign tax returns for the Debtors and the Liquidating Trust. The Liquidating Trust shall comply with all withholding and reporting requirements imposed by any federal, state, local, or foreign taxing authority, and all distributions made by the Liquidating Trust shall be subject to any such withholding and reporting requirements.

E. Equity Consideration

The Liquidating Trust shall hold the Equity Consideration subject to the terms and conditions set forth in the LLC Agreement, including with respect to Section 8.2(f) thereof; provided that, the Liquidating Trust may cause the Equity Consideration to be held in a wholly-owned subsidiary of the Liquidating Trust or in a separate entity


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selected by the Liquidating Trustee to hold such Equity Consideration solely for the benefit of Beneficiaries to the extent provided by the LLC Agreement.

F. The Liquidating Trust Oversight Committee

On the Effective Date, the Liquidating Trust Oversight Committee shall be formed pursuant to the Liquidating Trust Agreement. The Liquidating Trust Oversight Committee shall be comprised of no more than three members, all of whom shall be selected by the Committee and all of whom shall be identified in the Plan Supplement.

The Liquidating Trustee shall report all material matters (as described in the Liquidating Trust Agreement) to and seek approval for all material decisions (as described in the Liquidating Trust Agreement) from the Liquidating Trust Oversight Committee.

From and after the Effective Date, subject to the powers and rights of Hybrid as provided in Articles VI.B and VIII.A hereof, settlement by the Liquidating Trust of any General Unsecured Claims and Causes of Action shall require: (1) approval only of the Liquidating Trustee, if the amount claimed by the Liquidating Trust against a defendant, or Claim asserted by a claimant, is less than two million five hundred thousand dollars ($2,500,000); (2) approval only of the Liquidating Trustee and the Liquidating Trust Oversight Committee, if the amount claimed by the Liquidating Trust against a defendant, or Claim asserted by a claimant, is more than two million five hundred thousand dollars ($2,500,000) but less than five million dollars ($5,000,000); and (3) approval of the Liquidating Trustee, the Liquidating Trust Oversight Committee, and the Bankruptcy Court, if the amount claimed by the Liquidating Trust against a defendant, or Claim asserted by a claimant, exceeds five million dollars ($5,000,000).

G. Distribution; Withholding

Notwithstanding anything in the Plan to the contrary, the Liquidating Trustee will make, or cause to be made, all distributions under the Plan and the Liquidating Trust Agreement other than (a) those distributions made by the Debtors on the Effective Date and (b) distributions from the Professional Fee Escrow in accordance with Article II.C hereof.

The Liquidating Trust may withhold from amounts distributable to any Entity any and all amounts, determined in the Liquidating Trustee’s sole discretion, required by the Plan, or applicable law, regulation, rule, ruling, directive, or other governmental requirement.

H. Insurance

The Liquidating Trust may maintain customary insurance coverage for the protection of Entities serving as administrators and overseers of the Liquidating Trust on and after the Effective Date.

I. Other Rights and Duties

In addition to the Liquidating Trustee’s rights and duties with respect to the Liquidating Trust, on and after the Effective Date, the Liquidating Trustee will be authorized to implement the Plan and any applicable orders of the Bankruptcy Court.

On the Effective Date, the Liquidating Trust shall: (1) take possession of all books, records, and files of the Debtors and their Estates, in all forms including electronic and hard copy, other than the Debtors’ Professionals’ Documents; and (2) provide for the retention and storage of such books, records, and files until such time as the Liquidating Trust determines, in accordance with the Liquidating Trust Agreement, that retention of same is no longer necessary or required.

Any and all rights to conduct investigations with respect to Causes of Action or claims not released by the Debtors shall vest with the Liquidating Trust and shall continue until dissolution of the Liquidating Trust, as if neither the Confirmation Date nor the Effective Date had occurred.


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The filing of the final monthly report (for the month in which the Effective Date occurs) and all subsequent quarterly reports shall be the responsibility of the Liquidating Trustee.

J. Disputed Claims Reserve

The Liquidating Trustee may maintain, in accordance with the Liquidating Trustee’s powers and responsibilities under the Plan and the Liquidating Trust Agreement, a Disputed Claims Reserve. The Liquidating Trustee may, in its reasonable discretion, distribute such amounts (net of any expenses, including any taxes relating thereto), as provided herein and in the Liquidating Trust Agreement, as Disputed Claims are resolved pursuant to Article VIII hereof, and such amounts may be distributed on account of such Disputed Claims as if such Disputed Claims were Allowed Claims as of the Effective Date.

The Liquidating Trust will pay taxes on the taxable net income or gain allocable to Holders of Disputed Claims on behalf of such Holders. In the event, and to the extent, any Cash retained on account of Disputed Claims in the Disputed Claims Reserve is insufficient to pay the portion of any such taxes attributable to the taxable income arising from the assets allocable to, or retained on account of, Disputed Claims, such taxes shall be (a) reimbursed from any subsequent Cash amounts retained on account of Disputed Claims, or (b) to the extent such Disputed Claims have subsequently been resolved, deducted from any amounts distributable by the Liquidating Trust as a result of the resolutions of such Disputed Claims.

K. Wind-Down

In addition to the Liquidating Trustee’s rights and duties with respect to the Liquidating Trust, on and after the Effective Date, the Liquidating Trustee will be authorized to implement the Plan and any applicable orders of the Bankruptcy Court, and the Liquidating Trustee shall have the power and authority to take any action necessary to wind down and dissolve the Debtors’ Estates.

As soon as practicable after the Effective Date, the Liquidating Trustee shall: (1) cause the Debtors to comply with, and abide by, the terms of the Purchase Agreement; (2) file for each of the Debtors a certificate of dissolution or equivalent document, together with all other necessary corporate and company documents, to effect the dissolution of the Debtors under the applicable laws of their state of incorporation or formation (as applicable), including, but not limited to, any actions contemplated in Sections 275–283 of the General Corporation Law of the State of Delaware (the “DGCL”); (3) in the Liquidating Trustee’s reasonable discretion, complete and file all final or otherwise required federal, state, and local tax returns for each of the Debtors, and pursuant to section 505(b) of the Bankruptcy Code, may request an expedited determination of any unpaid tax liability of such Debtor or its Estate for any tax incurred during the administration of such Debtor’s Chapter 11 Case, as determined under applicable tax laws; and (4) take such other actions as the Liquidating Trustee may determine to be necessary or desirable to carry out the purposes of the Plan. For purposes of clause (2) of the preceding sentence, the Plan shall constitute a plan of distribution as contemplated in the DGCL. The certificate of dissolution or equivalent document may be executed by the Liquidating Trustee without need for any action or approval by the shareholders or Board of Directors of any Debtor. From and after the Effective Date, the Debtors (5) for all purposes shall be deemed to have withdrawn their business operations from any state in which the Debtors were previously conducting, or are registered or licensed to conduct, their business operations, and shall not be required to file any document, pay any sum, or take any other action in order to effectuate such withdrawal, (6) shall be deemed to have cancelled pursuant to this Plan all Interests, and (7) shall not be liable in any manner to any taxing authority for franchise, business, license, or similar taxes accruing on or after the Effective Date. For the avoidance of doubt, (8) the dissolution of the Debtors shall not have any effect, in any manner, on the Causes of Action that the Liquidating Trustee may assert in accordance with the Plan and the Liquidating Trust Agreement and (9) notwithstanding the Debtors’ dissolution, the Debtors shall be deemed to remain intact solely with respect to the preparation, filing, review, and resolution of applications for Professional Fee Claims.

L. Termination of the Liquidating Trust

The Liquidating Trustee shall be discharged and the Liquidating Trust shall be terminated, at such time as (1) all Disputed Claims have been resolved, (2) all of the Liquidating Trust Assets have been liquidated, (3) all


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duties and obligations of the Liquidating Trustee hereunder have been fulfilled, (4) all distributions required to be made by the Liquidating Trust under the Plan and the Liquidating Trust Agreement have been made, and (5) both of the Chapter 11 Cases of the Debtors have been closed, but in no event shall the Liquidating Trust be dissolved later than five (5) years from the Effective Date unless the Bankruptcy Court, upon motion by the Liquidating Trustee within the six-month period prior to the fifth anniversary (or the end of any extension period approved by the Bankruptcy Court), determines that a fixed period extension (not to exceed three (3) years, together with any prior extensions, without a favorable letter ruling from the Internal Revenue Service that any further extension would not adversely affect the status of the Liquidating Trust as a liquidating trust for federal income tax purposes) is necessary to facilitate or complete the liquidation, recovery and distribution of the Liquidating Trust Assets; provided that the dissolution, or deemed dissolution, of the Liquidating Trust shall not affect or limit the ability of the Liquidating Trust to transfer the Equity Consideration in accordance with the LLC Agreement, including Section 8.2(f) thereof.

M. Transfer of Beneficial Interests

Notwithstanding anything to the contrary in the Plan, beneficial interests in the Liquidating Trust shall not be transferrable except upon death of the interest holder or by operation of law.

N. Termination of the Liquidating Trustee

The duties, responsibilities, and powers of the Liquidating Trustee will terminate in accordance with the terms of the Liquidating Trust Agreement.

O. Exculpation; Indemnification

The Liquidating Trustee, the Liquidating Trust, professionals retained by the Liquidating Trust, and representatives of each of the foregoing will be exculpated and indemnified pursuant to the terms of the Liquidating Trust Agreement.

ARTICLE VIII. PROCEDURES FOR RESOLVING CONTINGENT,

UNLIQUIDATED, AND DISPUTED CLAIMS AND INTERESTS

A. Resolution of Disputed Claims

1. Allowance of Claims and Interests

Prior to the Effective Date, the Debtors, and on and after the Effective Date, the Liquidating Trustee, shall have and shall retain any and all rights and defenses that the Debtors had with respect to any Claim or Interest, except with respect to any Claim or Interest deemed Allowed as of the Effective Date. Except as expressly provided in the Plan or in any order entered in the Chapter 11 Cases prior to the Effective Date (including the Confirmation Order), no Claim or Interest shall become an Allowed Claim or Interest unless and until such Claim or Interest is deemed Allowed under the Plan or the Bankruptcy Code or the Bankruptcy Court has entered a Final Order, including the Confirmation Order, in the Chapter 11 Cases allowing such Claim.

2. Prosecution of Objections to Claims or Interests

Subject in all respects to Article VI.B.1 hereof, other than with respect to Professional Fee Claims, prior to the Effective Date, the Debtors, and on or after the Effective Date, the Liquidating Trustee or Hybrid or its designee, as applicable, shall have the authority to File objections to Claims or Interests, and the exclusive authority to settle, compromise, withdraw, or litigate to judgment objections on behalf of the Debtors’ Estates to any and all Claims or Interests, regardless of whether such Claims or Interests are in a Class or otherwise.

Subject to the foregoing sentence, from and after the Effective Date, the Liquidating Trustee (a) may settle or compromise any Disputed Claim in accordance with the Liquidating Trust Agreement and Article VII hereof and


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(b) shall succeed to the Debtors’ rights with respect to any objections Filed by the Debtors that remain pending as of the Effective Date. From and after the Effective Date, the Liquidating Trustee shall have the sole authority to administer and adjust the Claims Register to reflect any such settlements or compromises without any further notice to or action, order, or approval of the Bankruptcy Court.

3. Claims Estimation

On and after the Effective Date, the Liquidating Trustee, may, at any time, request that the Bankruptcy Court estimate (a) any Disputed Claim pursuant to applicable law and (b) any contingent or unliquidated Claim pursuant to applicable law, including section 502(c) of the Bankruptcy Code, regardless of whether the Debtors or the Liquidating Trustee have previously objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction under 28 U.S.C. §§ 157 and 1334 to the maximum extent permitted by law as determined by the Bankruptcy Court to estimate any Disputed Claim, contingent Claim, or unliquidated Claim, including during the litigation concerning any objection to any Claim or during the pendency of any appeal relating to any such objection. Notwithstanding any provision otherwise in the Plan to the contrary, a Claim that has been expunged from the Claims Register but that is subject to appeal or has not been the subject of a Final Order, shall be deemed to be estimated at zero dollars, unless otherwise ordered by the Bankruptcy Court. In the event that the Bankruptcy Court estimates any Disputed Claim, contingent Claim, or unliquidated Claim, that estimated amount shall constitute either the Allowed amount of such Claim or a maximum limitation on such Claim for all purposes under the Plan, including for purposes of distributions, and the Debtors or the Liquidating Trustee, as applicable, may elect to pursue additional objections to the ultimate distribution on such Claim. If the estimated amount constitutes a maximum limitation on such Claim, the Debtors or the Liquidating Trustee, as applicable, may elect to pursue any supplemental proceedings to object to any ultimate distribution on account of such Claim. Notwithstanding section 502(j) of the Bankruptcy Code, in no event shall any Holder of a Claim that has been estimated pursuant to section 502(c) of the Bankruptcy Code or otherwise be entitled to seek reconsideration of such estimation unless such Holder has Filed a motion requesting the right to seek such reconsideration on or before 21 days after the date on which such Claim is estimated. All of the aforementioned Claims and objection, estimation, and resolution procedures are cumulative and not exclusive of one another. Claims may be estimated and subsequently compromised, settled, withdrawn, or resolved by any mechanism approved by the Bankruptcy Court.

4. Expungement or Adjustment to Claims Without Objection

Any Claim that has been paid, satisfied, or superseded may be expunged on the Claims Register by, as applicable, the Debtors or the Liquidating Trustee (or the Notice and Claims Agent at, as applicable, the Debtors’ or the Liquidating Trustee’s direction), and any Claim that has been amended may be adjusted thereon by, as applicable, the Debtors or the Liquidating Trustee without a Claims objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court.

5. Deadline to File Objections to Claims or Interests

Any objections to Claims or Interests shall be Filed no later than the Claims Objection Bar Date.

B. Allowance of DEDA Loan Claims

On the Effective Date, the DEDA Loan Claims shall be deemed General Unsecured Claims Allowed against the Debtors’ Estates in an amount equal to [$20,094,735.35].

C. Disallowance of Claims

To the maximum extent provided by section 502(d) of the Bankruptcy Code, all Claims of any Entity from which property is recoverable by the Debtors or the Liquidating Trustee, as applicable, under section 542, 543, 550, or 553 of the Bankruptcy Code or that the Debtors or the Liquidating Trustee, as applicable, alleges is a transferee of a transfer that is avoidable under section 522(f), 522(h), 544, 545, 547, 548, 549, or 724(a) of the Bankruptcy Code shall be disallowed if (1) the Entity, on the one hand, and the Debtors or the Liquidating Trustee, as applicable, on the other hand, agree or the Bankruptcy Court has determined by Final Order that such Entity or transferee is liable


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to turnover any property or monies under any of the aforementioned sections of the Bankruptcy Code and (2) such Entity or transferee has failed to turnover such property by the date set forth in such agreement or Final Order.

D. Amendments to Claims

After the Confirmation Date, a Claim or Interest may not be filed or amended without the authorization of the Bankruptcy Court and any such new or amended Claim Filed shall be deemed disallowed and expunged without any further notice to or action, order, or approval of the Bankruptcy Court; provided that, even with such Bankruptcy Court authorization, a Claim or Interest may be amended by the Holder of such Claim or Interest solely to decrease, but not to increase, unless otherwise provided by the Bankruptcy Court, the amount, number or priority.

E. No Interest

Unless otherwise specifically provided for in the Plan (including Article III hereof), by applicable law, or agreed-to by, as applicable, the Debtors or the Liquidating Trustee, interest shall not accrue or be paid on any Claim, and no Holder of any Claim shall be entitled to interest accruing on and after the Petition Date on account of any Claim. Without limiting the foregoing, interest shall not accrue or be paid on any Claim after the Effective Date to the extent the final distribution paid on account of such Claim occurs after the Effective Date.

ARTICLE IX. SETTLEMENT, RELEASE, INJUNCTION, AND RELATED PROVISIONS

A. Compromise and Settlement of Claims, Interests, and Controversies

Pursuant to Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided pursuant to the Plan, and except as otherwise specifically provided in the Plan or in any contract, instrument, or other agreement or document created pursuant to the Plan, the distributions, rights, and treatment that are provided in the Plan shall be in complete settlement, compromise, and release, effective as of the Effective Date, of Claims, Interests, and Causes of Action of any nature whatsoever, including any interest accrued on Claims or Interests from and after the Petition Date, whether known or unknown, against, liabilities of, Liens on, obligations of, rights against, and Interests in, the Debtors or any of their assets or properties, regardless of whether any property shall have been distributed or retained pursuant to the Plan on account of such Claims and Interests, including demands, liabilities, and Causes of Action that arose before the Effective Date, any liability to the extent such Claims or Interests relate to services performed by employees of the Debtors before the Effective Date and that arise from a termination of employment, any contingent or non-contingent liability on account of representations or warranties issued on or before the Effective Date, and all debts of the kind specified in sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, in each case whether or not: (1) a Proof of Claim or proof of Interest based upon such debt, right, or Interest is Filed or deemed Filed pursuant to section 501 of the Bankruptcy Code; (2) a Claim or Interest based upon such debt, right, or Interest is Allowed pursuant to section 502 of the Bankruptcy Code; or (3) the Holder of such a Claim or Interest has accepted the Plan. Without limiting the generality of the foregoing, the distributions set forth at Article III.C.5 hereof and Article III.C.6 hereof, including the waiver of Related Party Note Claims, represent a compromise of the dispute over the value of allegedly unperfected liens purportedly securing the Senior Loan. Any default by the Debtors or their Affiliates with respect to any Claim or Interest that existed immediately before or on account of the filing of the Chapter 11 Cases shall be deemed cured on the Effective Date. The Confirmation Order shall be a judicial determination of the settlement, compromise, and release of all Claims and Interests, subject to the Effective Date occurring.

B. Release of Liens

Except as otherwise provided in the Plan or in any contract, instrument, release, or other agreement or document created pursuant to the Plan, on the Effective Date and concurrently with the applicable distributions made pursuant to the Plan and, in the case of a Secured Claim, satisfaction in full of the portion of the Secured Claim that is Allowed as of the Effective Date, all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates shall be fully released, settled, and compromised and all rights, titles,


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and interests of any Holder of such mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates shall revert to the Debtors.

C. Subordinated Claims

The allowance, classification, and treatment of all Allowed Claims and Interests and the respective distributions and treatments under the Plan take into account and conform to the relative priority and rights of the Claims and Interests in each Class in connection with any contractual, legal, and equitable subordination rights relating thereto, whether arising under general principles of equitable subordination, section 510(b) of the Bankruptcy Code, or otherwise. Pursuant to section 510 of the Bankruptcy Code, the Debtors reserve the right for the Debtors or the Liquidating Trustee, as applicable, to re-classify any Allowed Claim or Interest in accordance with any contractual, legal, or equitable subordination relating thereto.

D. Debtor Release

ON THE EFFECTIVE DATE AND EFFECTIVE AS OF THE EFFECTIVE DATE, EACH DEBTOR ON BEHALF OF ITSELF, ITS ESTATE, AND THE LIQUIDATING TRUST (SUCH THAT THE LIQUIDATING TRUST WILL NOT HOLD ANY CLAIMS OR CAUSES OF ACTION RELEASED PURSUANT TO THIS ARTICLE IX.D), FOR THE GOOD AND VALUABLE CONSIDERATION PROVIDED BY EACH OF THE RELEASED PARTIES, SHALL BE DEEMED TO PROVIDE A FULL RELEASE TO EACH OF THE RELEASED PARTIES (AND EACH SUCH RELEASED PARTY SHALL BE DEEMED RELEASED BY EACH DEBTOR AND ITS ESTATE) AND THEIR RESPECTIVE PROPERTY FROM ANY AND ALL CAUSES OF ACTION AND ANY OTHER DEBTS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, ACTIONS, DERIVATIVE CLAIMS, REMEDIES, AND LIABILITIES WHATSOEVER, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING AS OF THE EFFECTIVE DATE, IN LAW, AT EQUITY, OR OTHERWISE, WHETHER FOR TORT, CONTRACT, VIOLATIONS OF FEDERAL OR STATE SECURITIES LAWS, OR OTHERWISE, BASED IN WHOLE OR IN PART UPON ANY ACT OR OMISSION, TRANSACTION, OR OTHER OCCURRENCE OR CIRCUMSTANCES EXISTING OR TAKING PLACE PRIOR TO OR ON THE EFFECTIVE DATE ARISING FROM OR RELATED IN ANY WAY TO THE DEBTORS, THE PLAN, OR THESE CHAPTER 11 CASES, INCLUDING THOSE THAT THE DEBTORS OR THE LIQUIDATING TRUST WOULD HAVE BEEN LEGALLY ENTITLED TO ASSERT OR THAT ANY HOLDER OF A CLAIM AGAINST OR INTEREST IN THE DEBTORS OR ANY OTHER ENTITY COULD HAVE BEEN LEGALLY ENTITLED TO ASSERT DERIVATIVELY OR ON BEHALF OF THE DEBTORS OR THEIR ESTATES; PROVIDED, HOWEVER, THAT THE FOREGOING “DEBTOR RELEASE” SHALL NOT OPERATE TO WAIVE OR RELEASE ANY CLAIMS OR CAUSES OF ACTION OF ANY DEBTOR OR THEIR RESPECTIVE CHAPTER 11 ESTATES AGAINST A RELEASED PARTY (1) ARISING UNDER ANY CONTRACTUAL OBLIGATION OWED TO THE DEBTORS THAT IS ENTERED INTO OR ASSUMED PURSUANT TO THE PLAN OR (2) ARISING UNDER THE PURCHASE AGREEMENT.

ENTRY OF THE CONFIRMATION ORDER SHALL CONSTITUTE THE BANKRUPTCY COURT’S APPROVAL, PURSUANT TO BANKRUPTCY RULE 9019, OF THE DEBTOR RELEASE, WHICH INCLUDES BY REFERENCE EACH OF THE RELATED PROVISIONS AND DEFINITIONS CONTAINED IN THE PLAN, AND, FURTHER, SHALL CONSTITUTE THE BANKRUPTCY COURT’S FINDING THAT THE DEBTOR RELEASE IS: (1) IN EXCHANGE FOR THE GOOD AND VALUABLE CONSIDERATION PROVIDED BY THE RELEASED PARTIES; (2) A GOOD-FAITH SETTLEMENT AND COMPROMISE OF THE CLAIMS RELEASED BY THE DEBTOR RELEASE; (3) IN THE BEST INTERESTS OF THE DEBTORS’ ESTATES AND ALL HOLDERS OF CLAIMS AND INTERESTS; (4) FAIR, EQUITABLE, AND REASONABLE; (5) GIVEN AND MADE AFTER DUE NOTICE AND OPPORTUNITY FOR HEARING; AND (6) A BAR TO ANY OF THE DEBTORS’ ESTATES ASSERTING ANY CLAIM OR CAUSE OF ACTION RELEASED PURSUANT TO THE DEBTOR RELEASE.

E. Third Party Release

ON THE EFFECTIVE DATE AND EFFECTIVE AS OF THE EFFECTIVE DATE, THE RELEASING PARTIES SHALL BE DEEMED TO PROVIDE A FULL RELEASE TO THE RELEASED PARTIES AND


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THEIR RESPECTIVE PROPERTY FROM ANY AND ALL CAUSES OF ACTION AND ANY OTHER DEBTS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, ACTIONS, DERIVATIVE CLAIMS, REMEDIES, AND LIABILITIES WHATSOEVER, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING AS OF THE EFFECTIVE DATE, IN LAW, AT EQUITY, OR OTHERWISE, WHETHER FOR TORT, CONTRACT, VIOLATIONS OF FEDERAL OR STATE SECURITIES LAWS, OR OTHERWISE, BASED IN WHOLE OR IN PART UPON ANY ACT OR OMISSION, TRANSACTION, OR OTHER OCCURRENCE OR CIRCUMSTANCES EXISTING OR TAKING PLACE PRIOR TO OR ON THE EFFECTIVE DATE ARISING FROM OR RELATED IN ANY WAY TO THE DEBTORS, THE PLAN, OR THESE CHAPTER 11 CASES, INCLUDING THOSE THAT THE DEBTORS WOULD HAVE BEEN LEGALLY ENTITLED TO ASSERT OR THAT ANY HOLDER OF A CLAIM AGAINST OR INTEREST IN THE DEBTORS OR ANY OTHER ENTITY COULD HAVE BEEN LEGALLY ENTITLED TO ASSERT DERIVATIVELY OR ON BEHALF OF THE DEBTORS OR THEIR ESTATES, PROVIDED, HOWEVER, THAT, THE FOREGOING “THIRD PARTY RELEASE” SHALL NOT AFFECT ANY PROOFS OF CLAIM FILED AGAINST THE DEBTORS OR CLAIMS OR CAUSES OF ACTION PENDING AGAINST A RELEASED PARTY IN A COMPLAINT OR PLEADING FILED AS OF THE PETITION DATE IN A COURT OR ARBITRATION PANEL OF COMPETENT JURISDICTION; PROVIDED, FURTHER, HOWEVER, THAT, THE THIRD PARTY RELEASE SHALL PRECLUDE A RELEASING PARTY FROM AMENDING OR MODIFYING SUCH COMPLAINT OR PLEADING TO ASSERT CLAIMS OR CAUSES OF ACTION AGAINST A RELEASED PARTY THAT WAS NOT OTHERWISE A PARTY TO SUCH PROCEEDING AS OF THE PETITION DATE. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE THIRD PARTY RELEASE SHALL NOT (1) OPERATE TO RELEASE ANY CLAIMS OR CAUSES OF ACTION HELD DIRECTLY (BUT NOT DERIVATIVELY) BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AGAINST ANY NON-DEBTOR OR (2) PRECLUDE THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION FROM ENFORCING ITS REGULATORY OR POLICE POWERS.

ENTRY OF THE CONFIRMATION ORDER SHALL CONSTITUTE THE BANKRUPTCY COURT’S APPROVAL, PURSUANT TO BANKRUPTCY RULE 9019, OF THE THIRD PARTY RELEASE, WHICH INCLUDES BY REFERENCE EACH OF THE RELATED PROVISIONS AND DEFINITIONS CONTAINED IN THE PLAN, AND, FURTHER, SHALL CONSTITUTE THE BANKRUPTCY COURT’S FINDING THAT THE THIRD PARTY RELEASE IS: (1) IN EXCHANGE FOR THE GOOD AND VALUABLE CONSIDERATION PROVIDED BY THE RELEASED PARTIES; (2) A GOOD-FAITH SETTLEMENT AND COMPROMISE OF THE CLAIMS RELEASED BY THE THIRD PARTY RELEASE; (3) IN THE BEST INTERESTS OF THE DEBTORS AND ALL HOLDERS OF CLAIMS AND INTERESTS; (4) FAIR, EQUITABLE, AND REASONABLE; (5) GIVEN AND MADE AFTER DUE NOTICE AND OPPORTUNITY FOR HEARING; AND (6) A BAR TO ANY OF THE RELEASING PARTIES ASSERTING ANY CLAIM RELEASED PURSUANT TO THE THIRD PARTY RELEASE.

F. Exculpation

The Exculpated Parties shall neither have, nor incur any liability to any Entity for any prepetition or postpetition act taken or omitted to be taken in connection with the Chapter 11 Cases, or related to formulating, negotiating, soliciting, preparing, disseminating, confirming, or implementing the Plan or consummating the Plan, the Disclosure Statement, or any contract, instrument, release, or other agreement or document created or entered into in connection with the Plan or any other prepetition or postpetition act taken or omitted to be taken in connection with or in contemplation of the restructuring or liquidation of the Debtors; provided that each Exculpated Party shall be entitled to rely upon the advice of counsel concerning his, her, or its duties pursuant to, or in connection with, the Plan or any other related document, instrument, or agreement. Without limiting the foregoing “Exculpation” provided under this Article IX.F, the rights of any Holder of a Claim or Interest to enforce rights arising under this Plan shall be preserved, including the right to compel payment of distributions in accordance with the Plan.

G. Injunction

EXCEPT AS OTHERWISE PROVIDED IN THE PLAN OR THE CONFIRMATION ORDER, ALL ENTITIES WHO HAVE HELD, HOLD, OR MAY HOLD CLAIMS, INTERESTS, CAUSES OF ACTION, OR


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LIABILITIES THAT: (1) ARE SUBJECT TO COMPROMISE AND SETTLEMENT PURSUANT TO THE TERMS OF THE PLAN; (2) HAVE BEEN RELEASED PURSUANT TO ARTICLE IX.D HEREOF; (3) HAVE BEEN RELEASED PURSUANT TO ARTICLE IX.E HEREOF; (4) ARE SUBJECT TO EXCULPATION PURSUANT TO ARTICLE IX.F HEREOF (BUT ONLY TO THE EXTENT OF THE EXCULPATION PROVIDED IN ARTICLE IX.F); OR (5) ARE OTHERWISE STAYED OR TERMINATED PURSUANT TO THE TERMS OF THE PLAN, ARE PERMANENTLY ENJOINED AND PRECLUDED, FROM AND AFTER THE EFFECTIVE DATE, FROM: (A) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING OF ANY KIND, INCLUDING ON ACCOUNT OF ANY CLAIMS, INTERESTS, CAUSES OF ACTIONS, OR LIABILITIES THAT HAVE BEEN COMPROMISED OR SETTLED AGAINST THE DEBTORS, THE LIQUIDATING TRUST, OR ANY ENTITY SO RELEASED OR EXCULPATED (OR THE PROPERTY OR ESTATE OF ANY ENTITY, DIRECTLY OR INDIRECTLY, SO RELEASED OR EXCULPATED, INCLUDING THE LIQUIDATING TRUST) ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY RELEASED, SETTLED, COMPROMISED, OR EXCULPATED CLAIMS, EQUITY INTERESTS, CAUSES OF ACTION, OR LIABILITIES; (B) ENFORCING, ATTACHING, COLLECTING, OR RECOVERING BY ANY MANNER OR MEANS ANY JUDGMENT, AWARD, DECREE, OR ORDER AGAINST THE DEBTORS, THE LIQUIDATING TRUST, OR ANY ENTITY SO RELEASED OR EXCULPATED (OR THE PROPERTY OR ESTATE OF THE DEBTORS OR ANY ENTITY SO RELEASED OR EXCULPATED) ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH RELEASED, SETTLED, COMPROMISED, OR EXCULPATED CLAIMS, EQUITY INTERESTS, CAUSES OF ACTION, OR LIABILITIES; (C) CREATING, PERFECTING, OR ENFORCING ANY LIEN, CLAIM, OR ENCUMBRANCE OF ANY KIND AGAINST THE DEBTORS, THE LIQUIDATING TRUST, OR ANY ENTITY SO RELEASED OR EXCULPATED (OR THE PROPERTY OR ESTATE OF THE DEBTORS OR ANY ENTITY SO RELEASED OR EXCULPATED) ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH RELEASED, SETTLED, COMPROMISED, OR EXCULPATED CLAIMS, EQUITY INTERESTS, CAUSES OF ACTION, OR LIABILITIES; (D) ASSERTING ANY RIGHT OF SETOFF OR SUBROGATION OF ANY KIND AGAINST ANY OBLIGATION DUE FROM THE DEBTORS OR ANY ENTITY SO RELEASED OR EXCULPATED (OR THE PROPERTY OR ESTATE OF THE DEBTORS OR ANY ENTITY SO RELEASED OR EXCULPATED) ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH RELEASED, SETTLED, COMPROMISED, OR EXCULPATED CLAIMS, EQUITY INTERESTS, CAUSES OF ACTION, OR LIABILITIES UNLESS SUCH ENTITY HAS TIMELY ASSERTED SUCH SETOFF RIGHT PRIOR TO CONFIRMATION IN A DOCUMENT FILED WITH THE BANKRUPTCY COURT EXPLICITLY PRESERVING SUCH SETOFF OR SUBROGATION, AND NOTWITHSTANDING AN INDICATION OF A CLAIM OR INTEREST OR OTHERWISE THAT SUCH ENTITY ASSERTS, HAS, OR INTENDS TO PRESERVE ANY RIGHT OF SETOFF OR SUBROGATION PURSUANT TO APPLICABLE LAW OR OTHERWISE; AND (E) COMMENCING OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING OF ANY KIND AGAINST THE DEBTORS, THE LIQUIDATING TRUST, OR ANY ENTITY SO RELEASED OR EXCULPATED (OR THE PROPERTY OR ESTATE OF THE DEBTORS OR ANY ENTITY SO RELEASED OR EXCULPATED) ON ACCOUNT OF OR IN CONNECTION WITH OR WITH RESPECT TO ANY SUCH RELEASED, SETTLED, COMPROMISED, OR EXCULPATED CLAIMS, EQUITY INTERESTS, CAUSES OF ACTION, OR LIABILITIES RELEASED, SETTLED, OR COMPROMISED PURSUANT TO THE PLAN; PROVIDED THAT NOTHING CONTAINED IN THE PLAN SHALL PRECLUDE AN ENTITY FROM OBTAINING BENEFITS DIRECTLY AND EXPRESSLY PROVIDED TO SUCH ENTITY PURSUANT TO THE TERMS OF THE PLAN; PROVIDED, FURTHER, THAT NOTHING CONTAINED IN THE PLAN SHALL BE CONSTRUED TO PREVENT ANY ENTITY FROM DEFENDING AGAINST CLAIMS OBJECTIONS OR COLLECTION ACTIONS WHETHER BY ASSERTING A RIGHT OF SETOFF OR OTHERWISE TO THE EXTENT PERMITTED BY LAW.

H. Waiver of Statutory Limitations on Releases

EACH RELEASING PARTY IN EACH OF THE RELEASES CONTAINED IN THE PLAN (INCLUDING UNDER THIS Article IX OF THE PLAN) EXPRESSLY ACKNOWLEDGES THAT ALTHOUGH ORDINARILY A GENERAL RELEASE MAY NOT EXTEND TO CLAIMS WHICH THE RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR, WHICH IF KNOWN BY IT MAY HAVE MATERIALLY AFFECTED ITS SETTLEMENT WITH THE PARTY RELEASED, THEY HAVE CAREFULLY CONSIDERED AND TAKEN INTO ACCOUNT IN DETERMINING TO ENTER INTO THE ABOVE RELEASES THE POSSIBLE EXISTENCE OF SUCH UNKNOWN LOSSES OR CLAIMS. WITHOUT


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LIMITING THE GENERALITY OF THE FOREGOING, EACH RELEASING PARTY EXPRESSLY WAIVES ANY AND ALL RIGHTS CONFERRED UPON IT BY ANY STATUTE OR RULE OF LAW WHICH PROVIDES THAT A RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CLAIMANT DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY IT MAY HAVE MATERIALLY AFFECTED ITS SETTLEMENT WITH THE RELEASED PARTY, INCLUDING THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542. THE RELEASES CONTAINED IN Article IX OF THE PLAN ARE EFFECTIVE REGARDLESS OF WHETHER THOSE RELEASED MATTERS ARE PRESENTLY KNOWN, UNKNOWN, SUSPECTED OR UNSUSPECTED, FORESEEN OR UNFORESEEN.

I. Setoffs

Except as otherwise provided in the Plan, prior to the Effective Date, the Debtors, and on and after the Effective Date, the Liquidating Trustee, pursuant to the Bankruptcy Code (including section 553 of the Bankruptcy Code), applicable nonbankruptcy law, or as may be agreed to by the Holder of a Claim or Interest, may set off against any Allowed Claim or Interest on account of any Proof of Claim or proof of Interest or other pleading Filed with respect thereto prior to the Confirmation Hearing and the distributions to be made pursuant to the Plan on account of such Allowed Claim or Interest (before any distribution is made on account of such Allowed Claim or Interest), any claims, rights, and Causes of Action of any nature that the Debtors’ Estates may hold against the Holder of such Allowed Claim or Interest, to the extent such claims, rights, or Causes of Action against such Holder have not been otherwise compromised or settled on or prior to the Effective Date (whether pursuant to the Plan or otherwise); provided that neither the failure to effect such a setoff nor the allowance of any Claim or Interest pursuant to the Plan shall constitute a waiver or release by the Debtors or the Liquidating Trustee, as applicable, of any such claims, rights, and Causes of Action that the Debtors’ Estates may possess against such Holder. In no event shall any Holder of Claims or Interests be entitled to set off any Claim or Interest against any claim, right, or Cause of Action of the Debtors’ Estates unless such Holder has timely Filed a Proof of Claim with the Bankruptcy Court preserving such setoff; provided that nothing in the Plan shall prejudice or be deemed to have prejudiced the Debtors’ or the Liquidating Trustee’s right to assert that any Holder’s setoff rights were required to have been asserted by motion or pleading filed with the Bankruptcy Court prior to the Effective Date.

J. GP Supercars

Nothing in Article IX.E hereof shall impair the ability of Committee Member GP Supercars & More SRL to continue to assert the Claims and Causes of Action against Henrik Fisker, Raymond J. Lane, and Bernhard Koehler in connection with the arbitration proceeding pending in Irvine, California, captioned as Case No. 50 457 t 00955 13 or in a court of appropriate jurisdiction or other appropriate forum if it is decided at some future date that such dispute is more properly resolved in such other forum.

K. Conditions to Certain Releases

It is a condition to the releases of the Hybrid Parties pursuant to this Plan that all Related Party Note Claims held by each of Ace Strength International Limited; JR Holdings IV, Ltd.; GSR Ventures IV, L.P.; GSR Principals Fund IV, L.P.; GSR Special Situations I Limited; and FAH Loan Purchase Fund, LLC be released and expunged.

It is a condition to any releases of Raymond Lane pursuant to this Plan that all Related Party Note Claims held by SugarPine Kids Trust be released and expunged.

ARTICLE X. SUBSTANTIAL CONSUMMATION OF THE PLAN

A. Conditions Precedent to Consummation of the Plan

It shall be a condition to Consummation of the Plan that the following conditions shall have been satisfied or waived pursuant to the provisions of 0 hereof:


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1. the Bankruptcy Court shall have entered the Confirmation Order in form and substance materially consistent with this Plan in all respects and otherwise reasonably acceptable to the Debtors, Hybrid, and the Committee, which Confirmation Order shall include a provision with the specific findings set forth in Article IV.D hereof;

2. the Plan Supplement, including any amendments, modifications, or supplements thereto shall be in form and substance materially consistent with this Plan in all respects and otherwise reasonably acceptable to the Debtors, Hybrid, and the Committee;

3. the Liquidating Trustee shall have been appointed and the Liquidating Trust Agreement shall have been executed and become effective;

4. all documents and agreements necessary to implement the Plan and the consummation of the Sale Transaction shall have (a) been tendered for delivery and (b) been effected or executed by all Entities party thereto, and all conditions precedent to the effectiveness of such documents and agreements shall have been satisfied or waived pursuant to the terms of such documents or agreements;

5. the Liquidating Trust Cash Distribution shall have occurred;

6. the Priority Claims Reserve shall have been established and funded;

7. the Professional Fee Escrow shall have been established and funded;

8. the Hybrid Cash Distribution shall have occurred, other than with respect to amounts (if any) payable to Hybrid after the Effective Date in accordance with this Plan from the Professional Fee Escrow and/or the Priority Claims Reserve; and

9. the SVB Cash Distribution shall have occurred.

The payments required to satisfy the Distribution Conditions Precedent shall be made contemporaneously with Consummation of the Plan, but such payments may be made only after the satisfaction of the Initial Conditions Precedent.

B. Waiver of Conditions

The conditions to Confirmation of the Plan and Consummation of the Plan set forth in this Article X may be waived by the Debtors with the prior written consent from Hybrid and the Committee, each in their reasonable discretion.

C. Effect of Non-Occurrence of Conditions to the Effective Date

If the Effective Date does not occur, the Plan shall be null and void in all respects and nothing contained in the Plan or the Disclosure Statement shall: (1) constitute a waiver or release of any claims by or Claims against or Interests in the Debtors; (2) prejudice in any manner the rights of the Debtors, the Debtors’ Estates, any Holders, or any other Entity; or (3) constitute an admission, acknowledgment, offer, or undertaking by the Debtors, the Debtors’ Estates, any Holders, or any other Entity in any respect.

ARTICLE XI. MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN

A. Modification and Amendments

Subject to the limitations contained in the Plan, the Debtors reserve the right to modify the Plan as to material terms and seek Confirmation consistent with the Bankruptcy Code and, as appropriate, not resolicit votes on such modified Plan. Subject to certain restrictions and requirements set forth in section 1127 of the Bankruptcy


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Code and Bankruptcy Rule 3019 and those restrictions on modifications set forth in the Plan, the Debtors expressly reserve their rights to alter, amend, or modify materially the Plan with respect to the Debtors, one or more times, after Confirmation, and, to the extent necessary, may initiate proceedings in the Bankruptcy Court to so alter, amend, or modify the Plan, or remedy any defect or omission, or reconcile any inconsistencies in the Plan, the Disclosure Statement, or the Confirmation Order, in such matters as may be necessary to carry out the purposes and intent of the Plan. Any such modification or supplement shall be considered a modification of the Plan and shall be made in accordance with Article XI hereof. Any modifications to the Plan shall be consistent in all respects with the Plan Settlement Term Sheet and shall otherwise be reasonably acceptable to the Debtors, the Committee, and Hybrid.

Notwithstanding anything herein to the contrary, any modification, alteration, or amendment to the Plan suggested or filed by the Debtors that would affect in any material way the economic or any other terms or effect of the settlements among the Committee, Hybrid, and the Debtors embodied in the Plan Settlement Term Sheet may become effective only with the prior written consent of Hybrid or the Committee (or Hybrid and the Committee) (as the case may be, depending on the party so affected).

Notwithstanding anything herein to the contrary, the Debtors, Hybrid, and the Committee each shall consider in good faith any additional modifications proposed by any of such parties in good faith, regardless of whether such additional modifications are contemplated by the Plan Settlement Term Sheet.

B. Effect of Confirmation on Modifications

Entry of a Confirmation Order shall mean that all modifications or amendments to the Plan occurring after the solicitation thereof are approved pursuant to section 1127(a) of the Bankruptcy Code and do not require additional disclosure or resolicitation under Bankruptcy Rule 3019.

C. Revocation or Withdrawal of the Plan

The Debtors reserve the right, after good-faith consultation with the Committee and Hybrid, to revoke or withdraw the Plan, including the right to revoke or withdraw the Plan for any Debtor or all Debtors, prior to the Confirmation Date. If the Debtors, in good-faith consultation with the Committee and Hybrid, revoke or withdraw the Plan with respect to any Debtor, or if Confirmation or Consummation does not occur with respect to any Debtor, then: (1) the Plan with respect to such Debtor shall be null and void in all respects; (2) any settlement or compromise embodied in the Plan with respect to such Debtor (including the fixing or limiting to an amount certain of any Claim or Interest or Class of Claims or Interests), assumption or rejection of Executory Contracts or Unexpired Leases effected by the Plan with respect to such Debtor, and any document or agreement executed pursuant to the Plan with respect to such Debtor, shall be deemed null and void; and (3) nothing contained in the Plan with respect to such Debtor shall: (a) constitute a waiver or release of any Claims or Interests; (b) prejudice in any manner the rights of the Debtors, the Debtors’ Estates, or any other Entity; or (c) constitute an admission, acknowledgement, offer, or undertaking of any sort by the Debtors, the Debtors’ Estates, or any other Entity.

ARTICLE XII. RETENTION OF JURISDICTION

Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, on and after the Effective Date, the Bankruptcy Court shall retain such jurisdiction over the Chapter 11 Cases and all matters, arising out of, or related to, the Chapter 11 Cases and the Plan, including jurisdiction to:

1. allow, disallow, determine, liquidate, classify, estimate, or establish the priority, Secured or unsecured status, or amount of any Claim or Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any and all objections to the Secured or unsecured status, priority, amount, or allowance of Claims or Interests;


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2. decide and resolve all matters related to the granting and denying, in whole or in part, any applications for allowance of compensation or reimbursement of expenses to Professionals authorized pursuant to the Bankruptcy Code or the Plan;

3. resolve any matters related to: (a) the assumption and assignment or rejection of any Executory Contract or Unexpired Lease to which a Debtor is party or with respect to which a Debtor may be liable in any manner and to hear, determine, and, if necessary, liquidate, any Claims arising therefrom, including Claims related to the rejection of an Executory Contract or Unexpired Lease, Cure Costs pursuant to section 365 of the Bankruptcy Code, or any other matter related to such Executory Contract or Unexpired Lease; (b) any potential contractual obligation under any Executory Contract or Unexpired Lease that is assumed; (c) the Debtors or Liquidating Trustee amending, modifying, or supplementing, after the Effective Date, pursuant to Article V hereof, any Executory Contracts or Unexpired Leases set forth on the list of Executory Contracts and Unexpired Leases to be assumed and assigned or rejected or otherwise; and (d) any dispute regarding whether a contract or lease is or was executory or expired;

4. enforce Hybrid’s obligations to cause one or more instances of the Priority Claims Reserve Subsequent Funding to occur in accordance with Article II.D of the Plan;

5. ensure that distributions to Holders of Allowed Claims and Interests are accomplished pursuant to the provisions of the Plan;

6. adjudicate, decide, or resolve any motions, adversary proceedings, contested or litigated matters, and any other matters, and grant or deny any applications involving a Debtor that may be pending on the Effective Date;

7. adjudicate, decide, or resolve any and all matters related to Causes of Action;

8. enter and implement such orders as may be necessary or appropriate to execute, implement, or consummate the provisions of the Plan and all contracts, instruments, releases, indentures, and other agreements or documents created in connection with the Plan or the Disclosure Statement;

9. enter and enforce any order for the sale of property pursuant to sections 363, 1123, or 1146(a) of the Bankruptcy Code;

10. resolve any cases, controversies, suits, disputes, or Causes of Action that may arise in connection with the Consummation, interpretation, or enforcement of the Plan or any Entity’s obligations incurred in connection with the Plan;

11. issue injunctions, enter and implement other orders, or take such other actions as may be necessary or appropriate to restrain interference by any Entity with Consummation or enforcement of the Plan;

12. resolve any cases, controversies, suits, disputes, or Causes of Action with respect to the settlements, compromises, releases, injunctions, exculpations, and other provisions contained in Article IX hereof and enter such orders as may be necessary or appropriate to implement such releases, injunctions, and other provisions;

13. resolve any cases, controversies, suits, disputes, or Causes of Action with respect to the repayment or return of distributions and the recovery of additional amounts owed by the Holder of a Claim or Interest for amounts not timely repaid pursuant to Article VI.E.1 hereof;

14. enter and implement such orders as are necessary or appropriate if the Confirmation Order is for any reason modified, stayed, reversed, revoked, or vacated;


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15. determine any other matters that may arise in connection with or relate to the Plan, the Disclosure Statement, the Confirmation Order, or any contract, instrument, release, indenture, or other agreement or document created in connection with the Plan or the Disclosure Statement;

16. adjudicate any and all disputes arising from or relating to distributions under the Plan or any transactions contemplated therein;

17. consider any modifications of the Plan, to cure any defect or omission, or to reconcile any inconsistency in any Bankruptcy Court order, including the Confirmation Order;

18. determine requests for the payment of Claims and Interests entitled to priority pursuant to section 507 of the Bankruptcy Code;

19. hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of the Plan, or the Confirmation Order, including disputes arising under agreements, documents, or instruments executed in connection with the Plan;

20. hear and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;

21. hear and determine all disputes involving the existence, nature, or scope of the Debtors’ release, including any dispute relating to any liability arising out of the termination of employment or the termination of any employee or retiree benefit program, regardless of whether such termination occurred prior to or after the Effective Date;

22. enforce all orders previously entered by the Bankruptcy Court;

23. hear any other matter not inconsistent with the Bankruptcy Code;

24. enter an order concluding or closing the Chapter 11 Cases; and

25. enforce the injunction, release, and exculpation provisions set forth in Article IX hereof.

ARTICLE XIII. MISCELLANEOUS PROVISIONS

A. Immediate Binding Effect

Subject to the terms hereof and notwithstanding Bankruptcy Rules 3020(e), 6004(h), or 7062 or otherwise, upon the occurrence of the Effective Date, the terms of the Plan, the Plan Supplement, and the Confirmation Order shall be immediately effective and enforceable and deemed binding upon the Debtors, Hybrid, the Debtors’ Estates, the Liquidating Trustee, and any and all Holders of Claims or Interests (regardless of whether such Claims or Interests are deemed to have accepted or rejected the Plan), all Entities that are parties to or are subject to the settlements, compromises, releases, and injunctions described in the Plan, each Entity acquiring property under the Plan or the Confirmation Order, and any and all non-Debtor parties to Executory Contracts and Unexpired Leases with the Debtors. All Claims and debts shall be as fixed, adjusted, or compromised, as applicable, pursuant to the Plan regardless of whether any Holder of a Claim or debt has voted on the Plan.

B. Additional Documents

On or before the Effective Date, the Debtors may File with the Bankruptcy Court such agreements and other documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan. The Debtors and all Holders of Claims or Interests receiving distributions pursuant to the Plan and all other parties in interest shall, prepare, execute, and deliver any agreements or documents and take any other actions as may be necessary or advisable to effectuate the provisions and intent of the Plan.


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C. Dissolution of Committee

On the Effective Date, the Committee shall dissolve and members thereof shall be compromised, settled, and released from all rights and duties from or related to the Chapter 11 Cases, except the Committee will remain intact solely with respect to the preparation, filing, review, and resolution of applications for Professional Fee Claims. The Debtors and the Liquidating Trustee shall no longer be responsible for paying any fees or expenses incurred after the Effective Date by the Committee Members.

D. Reservation of Rights

Except as expressly set forth in the Plan, the Plan shall have no force or effect unless the Bankruptcy Court shall enter the Confirmation Order. Neither the Plan, any statement or provision contained in the Plan, nor any action taken or not taken by the Debtors or any Debtor with respect to the Plan, the Disclosure Statement, the Confirmation Order, or the Plan Supplement shall be or shall be deemed to be an admission or waiver of any rights of the Debtors or any Debtor with respect to the Holders of Claims or Interests prior to the Effective Date.

E. Successors and Assigns

The rights, benefits, and obligations of any Entity named or referred to in the Plan or the Confirmation Order shall be binding on, and shall inure to the benefit of any heir, executor, administrator, successor or assign, Affiliate, officer, director, agent, representative, attorney, beneficiaries, or guardian, if any, of each Entity.

F. Service of Documents

Any pleading, notice, or other document required by the Plan to be served on or delivered to the following entities and shall be served via first class mail, overnight delivery, or messenger on.

If to the Debtors, to:

FAH Liquidating Corp. (f/k/a Fisker Automotive Holdings, Inc.) c/o Beilinson Advisory Group 3080 Airway Avenue Costa Mesa, California 92626 Attn.: Marc Beilinson

With copies to: Kirkland & Ellis LLP 300 North LaSalle Chicago, Illinois 60654 Attn.: Anup Sathy, P.C. and Ryan Preston Dahl

With copies to: Pachulski Stang Ziehl & Jones LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, Delaware 19801 Attn.: Laura Davis Jones, James E. O’Neill

If to the Committee to: Brown Rudnick LLP One Financial Center Boston, Massachusetts 02111 Attn.: Sunni Beville

If to the Purchaser to: Sidley Austin LLP One South Dearborn Chicago, Illinois 60603 Attn.: Bojan Guzina

If to Hybrid to: Keller & Benvenutti LLP 650 California Street, Suite 1900 San Francisco, California 94108 Attn.: Tobias S. Keller


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-and- Quinn Emanuel Urquhart & Sullivan, LLP 51 Madison Avenue, 22nd Floor New York, NY 10010 Attn.: Susheel Kirpalani

G. Term of Injunctions or Stays

Unless otherwise provided in the Plan or in the Confirmation Order, all injunctions or stays in effect in the Chapter 11 Cases pursuant to sections 105 or 362 of the Bankruptcy Code or any order of the Bankruptcy Court, and extant on the Confirmation Date (excluding any injunctions or stays contained in the Plan or the Confirmation Order) shall remain in full force and effect to the maximum extent permitted by law. All injunctions or stays contained in the Plan or the Confirmation Order shall remain in full force and effect in accordance with their terms.

H. Entire Agreement

Except as otherwise indicated, the Plan, the Confirmation Order, and the Plan Supplement supersede all previous and contemporaneous negotiations, promises, covenants, agreements, understandings, and representations on such subjects, all of which have become merged and integrated into the Plan.

I. Nonseverability of Plan Provisions

If, prior to Confirmation, any term or provision of the Plan is held by the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void, or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration, or interpretation, the remainder of the terms and provisions of the Plan will remain in full force and effect and will in no way be affected, impaired, or invalidated by such holding, alteration, or interpretation. The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of the Plan, as it may have been altered or interpreted in accordance with the foregoing, is: (1) valid and enforceable pursuant to its terms; (2) integral to the Plan and may not be deleted or modified without the consent of the Debtors, the Committee, and Hybrid, such consent not to be unreasonably withheld; and (3) nonseverable and mutually dependent.

J. Waiver or Estoppel

Each Holder of a Claim or an Interest shall be deemed to have waived any right to assert any argument, including the right to argue that its Claim or Interest should be Allowed in a certain amount, in a certain priority, Secured or not subordinated by virtue of an agreement made with the Debtors or their counsel, or any other Entity, if such agreement was not disclosed in the Plan, the Disclosure Statement, or papers Filed with the Bankruptcy Court before the Confirmation Date.


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KE 28420557

Respectfully submitted, as of the date first set forth above,

FAH Liquidating Corp. (f/k/a Fisker Automotive Holdings, Inc.) FA Liquidating Corp. (f/k/a Fisker Automotive, Inc.)

By: Name: Marc Beilinson Title: Chief Restructuring Officer

Prepared by:

Laura Davis Jones (DE Bar No. 2436) James E. O’Neill (DE Bar No. 4042) Peter J. Keane (DE Bar No. 5503)

PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, Delaware 19899-8705 (Courier 19801) Telephone: (302) 652-4100 - and - James H.M. Sprayregen, P.C. (admitted pro hac vice) Anup Sathy, P.C. (admitted pro hac vice) Ryan Preston Dahl (admitted pro hac vice)

KIRKLAND & ELLIS LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Counsel to the Debtors and Debtors in Possession


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KE 28420557

EXHIBIT A

RELATED PARTY NOTES


48

KE 28420557

Date2 Amount Counterparty Type of Note

April 9, 2013 $28,333.00 Ace Strength International Limited Part of Grid Note Dated May 15, 2013

April 16, 2013 $1,000,000.00 Ace Strength International Limited Part of Grid Note Dated May 15, 2013

April 16, 2013 $1,000,000.00 SugarPine Kids Trust Standalone Note

April 22, 2013 $500,000.00 Ace Strength International Limited Part of Grid Note Dated May 15, 2013

April 22, 2013 $500,000.00 SugarPine Kids Trust Standalone Note

May 7, 2013 $250,000.00 Ace Strength International Limited Part of Grid Note Dated May 15, 2013

May 7, 2013 $250,000.00 SugarPine Kids Trust Standalone Note





May 30, 2013 $1,000,000.00 Ace Strength International Limited Part of Grid Note Dated May 15, 2013

May 31, 2013 $1,000,000.00 JR Holdings IV, Ltd. Standalone Note

September 13, 2012 $252,980.00 GSR Ventures IV, L.P. Standalone Note

September 13, 2012 $7,020.00 GSR Principals Fund IV, L.P. Standalone Note

September 20, 2013 $90,489.00 GSR Ventures IV, L.P. Standalone Note

September 20, 2013 $2,511.00 GSR Principals Fund IV, L.P. Standalone Note

September 23, 2013 $150,000.00 GSR Special Situation I Limited Standalone Note

September 27, 2013 $380,000.00 GSR Special Situation I Limited Standalone Note

October 4, 2013 $272,000.00 GSR Special Situation I Limited Standalone Note



June 30, 2013 $20,000,000 FAH Loan Purchase Fund LLC Standalone Note

2 Dates reflected as set forth in the applicable promissory note.


49

KE 28420557

EXHIBIT B

RELATED PARTY LENDERS AFFILIATE SCHEDULE


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Related Party Lender Affiliate of:

Ace Strength International Limited Hybrid Parties

SugarPine Kids Trust Ray Lane

JR Holdings IV, Ltd. Hybrid Parties

GSR Ventures IV, L.P. Hybrid Parties

GSR Principals Fund IV, L.P. Hybrid Parties

GSR Special Situation I Limited Hybrid Parties

FAH Loan Purchase Fund, LLC Hybrid Parties


KE 29008771

EXHIBIT B

Debtors’ Corporate Structure as of the Petition Date


Fisker Automotive Holdings, Inc.(Delaware)

Fisker Automotive, Inc.(Delaware)

Fisker Automotive GmbH(Germany)

(non-Debtor)

Fisker Automotive Holdings, Inc. Shareholders

Corporate Organizational Chart

K&E 25598626


KE 29008771

EXHIBIT C

Asset Purchase Agreement by and Among Fisker Automotive Holdings, Inc. and Fisker Automotive, Inc. as Sellers

and Wanxiang America Corporation as Buyer (as amended by Amendment No. 1 to Asset Purchase Agreement and Amendment No. 2 to Asset Purchase Agreement)


Execution Copy

CH1 8904762

ASSET PURCHASE AGREEMENT

by and among

FISKER AUTOMOTIVE HOLDINGS, INC.

and

FISKER AUTOMOTIVE, INC.

AS SELLERS

and

WANXIANG AMERICA CORPORATION

AS BUYER

Dated as of January 27, 2014


i CH1 8904762

TABLE OF CONTENTS

Page

ARTICLE 1 PURCHASE AND SALE OF THE ACQUIRED ASSETS .................................2

1.1 Transfer of Acquired Assets ........................................................................2 1.2 Excluded Assets ...........................................................................................4 1.3 Assumption of Assumed Liabilities .............................................................6 1.4 Excluded Liabilities .....................................................................................7 1.5 Assigned Contracts and Excluded Contracts .............................................10 1.6 Delayed Conveyance of Certain Property ..................................................11 1.7 Deemed Consents and Cures .....................................................................12 1.8 Other Assets ...............................................................................................13 1.9 Delaware Facility .......................................................................................13 1.10 Limited Warranty Program ........................................................................13 1.11 Inaccuracies of Sellers’ Representations and Warranties ..........................13

ARTICLE 2 CONSIDERATION; CLOSING AND DELIVERIES .......................................14

2.1 Consideration .............................................................................................14 2.2 Closing .......................................................................................................14 2.3 Sellers’ Deliveries ......................................................................................14 2.4 Buyer’s Deliveries .....................................................................................16 2.5 Deposit .......................................................................................................16

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLERS ..........................16

3.1 Corporate Organization ..............................................................................16 3.2 Authorization and Validity ........................................................................17 3.3 Litigation ....................................................................................................17 3.4 Environmental Matters...............................................................................17 3.5 Intellectual Property ...................................................................................18 3.6 Brokerage ...................................................................................................19 3.7 Export Controls ..........................................................................................19

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER ..............................19

4.1 Corporate Organization ..............................................................................19 4.2 Authorization and Validity ........................................................................19 4.3 Litigation ....................................................................................................19 4.4 No Conflict or Violation ............................................................................19 4.5 Consents, Approvals and Notifications......................................................20 4.6 Availability of Funds .................................................................................20 4.7 Adequate Assurances Regarding Assigned Contracts ...............................20 4.8 Brokerage ...................................................................................................20

ARTICLE 5 COVENANTS OF SELLERS ...............................................................................20


ii CH1 8904762

5.1 Actions Before Closing Date .....................................................................20 5.2 Obligations of Sellers after Entry of Sale Order ........................................21 5.3 Access to Properties and Records; Confidentiality ....................................21 5.4 Rejection of Assigned Contracts ................................................................21 5.5 Further Assurances.....................................................................................22

ARTICLE 6 COVENANTS OF BUYER ...................................................................................22

6.1 Actions Before Closing Date .....................................................................22 6.2 Consents .....................................................................................................22 6.3 Adequate Assurances Regarding Assigned Contracts ...............................23 6.4 Cure of Defaults .........................................................................................23 6.5 Availability of Business Records ...............................................................23 6.6 Buyer’s Obligation to Perform; Cooperation with Sellers’

Enforcement of Rights ...............................................................................24 6.7 Further Assurances.....................................................................................24 6.8 Employment Matters; Cooperation Regarding Service Providers

and Employee Matters ...............................................................................24

ARTICLE 7 BANKRUPTCY PROCEDURES ........................................................................25

7.1 Bankruptcy Actions ...................................................................................25 7.2 Bidding Procedures ....................................................................................26 7.3 Approval ....................................................................................................26 7.4 Plan Consideration .....................................................................................26

ARTICLE 8 TAXES AND FEES ...............................................................................................26

8.1 Taxes Related to Purchase of Assets .........................................................26 8.2 Cooperation on Tax Matters ......................................................................27 8.3 Allocation of Purchase Price and Purchase Price Allocation Forms .........27 8.4 Tax Adjustments ........................................................................................27

ARTICLE 9 CONDITIONS PRECEDENT TO PERFORMANCE BY PARTIES ..............28

9.1 Conditions Precedent to Performance by Sellers and Buyer .....................28 9.2 Conditions Precedent to Performance by Sellers .......................................29 9.3 Conditions Precedent to Performance by Buyer ........................................29 9.4 Waiver of Condition; Frustration of Conditions ........................................30

ARTICLE 10 TERMINATION AND EFFECT OF TERMINATION ..................................31

10.1 Right of Termination..................................................................................31 10.2 Termination ................................................................................................31 10.3 Effect of Termination .................................................................................32 10.4 Expense Reimbursement ............................................................................33 10.5 Release of Deposit Upon Termination .......................................................34


iii CH1 8904762

ARTICLE 11 ADDITIONAL AGREEMENTS ........................................................................34

11.1 Litigation Support ......................................................................................34 11.2 Insurance Matters .......................................................................................35 11.3 Name Change .............................................................................................35 11.4 Access to Books and Records; Confidentiality. .........................................35

ARTICLE 12 MISCELLANEOUS ............................................................................................36

12.1 Successors and Assigns ..............................................................................36 12.2 Governing Law; Jurisdiction ......................................................................36 12.3 Warranties Exclusive .................................................................................37 12.4 No Survival of Representations and Warranties ........................................38 12.5 No Recourse for Certain Breaches .............................................................38 12.6 Mutual Drafting .........................................................................................38 12.7 Waiver of Bulk Sales Laws ........................................................................39 12.8 Expenses ....................................................................................................39 12.9 Severability ................................................................................................39 12.10 Notices .......................................................................................................39 12.11 Amendments; Waivers ...............................................................................41 12.12 Public Announcements ..............................................................................41 12.13 Entire Agreement .......................................................................................41 12.14 Parties in Interest........................................................................................42 12.15 DAMAGES ................................................................................................42 12.16 WAIVER OF JURY TRIAL ......................................................................42 12.17 Headings ....................................................................................................43 12.18 Construction ...............................................................................................43 12.19 Currency .....................................................................................................43 12.20 Time of Essence .........................................................................................43 12.21 Counterparts ...............................................................................................43

ARTICLE 13 DEFINITIONS .....................................................................................................43

13.1 Certain Terms Defined ...............................................................................43 13.2 All Terms Cross-Referenced......................................................................51


iv CH1 8904762

EXHIBITS

Exhibit A .................................................................................... Equity Consideration Term Sheet

Exhibit B ......................................................................................................... Form of Bill of Sale

Exhibit C .......................................................... Form of Assignment and Assumption Agreement

Exhibit D ............................................................................ Form of Sellers Secretary’s Certificate

Exhibit E .................................................... Form of Intellectual Property Assignment Agreement

Exhibit F........................................................................... Form of Non-Foreign Status Certificate

Exhibit G ............................................................................. Form of Buyer Secretary’s Certificate

Exhibit H .......................................................................................................... Form of Sale Order

Exhibit I ................................................................................. Form of Buyer Officer’s Certificate

Exhibit J ................................................................................ Form of Sellers Officer’s Certificate

SCHEDULES

Schedule 1.1(b) ............................................................................................ Real Property Leases Schedule 1.1(i) .............................................................................................................. IP Licenses Schedule 1.1(k) ................................................................................... Certain Assigned Contracts Schedule 1.2(a) ............................................................................. Excluded Real Property Leases Schedule 1.2(c) ................................................................................................ Excluded Contracts Schedule 1.2(r) ......................................................................................... Certain Excluded Assets Schedule 1.5(c) ............................................................................................. Designated Contracts


1 CH1 8904762

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of January 27, 2014, is made by and among Fisker Automotive Holdings, Inc., a Delaware corporation (“Fisker Holdings”), and Fisker Automotive, Inc., a Delaware corporation (“Fisker Automotive” and, together with Fisker Holdings, “Sellers” and each a “Seller”), on the one hand, and Wanxiang America Corporation, a Kentucky corporation (“Buyer”), on the other hand. Buyer and Sellers are sometimes referred to in this Agreement, individually as a “Party” and collectively as the “Parties”. Capitalized terms used in this Agreement are defined or cross-referenced in Article 13.

BACKGROUND INFORMATION

WHEREAS, Sellers filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court on November 22, 2013 (the “Petition Date”) which are being jointly administered under the caption In re Fisker Automotive Holdings, Inc., Case No. 13-13087 (the “Seller Chapter 11 Cases”);

WHEREAS, Sellers filed a Joint Plan of Liquidation, dated December 10, 2013, with the Bankruptcy Court in connection with the Seller Chapter 11 Cases (the “Existing Plan”);

WHEREAS, on the terms and subject to the conditions set forth in this Agreement, Buyer desires to purchase from Sellers, and Sellers desire to sell to Buyer, the Acquired Assets, in a sale authorized by the Bankruptcy Court pursuant to, inter alia, Sections 105, 363, and 365 of the Bankruptcy Code;

WHEREAS, on the terms and subject to the conditions set forth in this Agreement, Buyer also desires to assume, and Sellers desire to assign and transfer to Buyer, the Assumed Liabilities;

WHEREAS, Buyer and Sellers desire to enter into this Agreement providing for the purchase by Buyer and sale by Sellers of the Acquired Assets and the assumption by Buyer of the Assumed Liabilities;

WHEREAS, the Parties acknowledge and agree that the purchase by Buyer of the Acquired Assets and the assumption by Buyer of the Assumed Liabilities are being made at arm’s length and in good faith and without intent to hinder, delay or defraud creditors of Sellers or their Affiliates;

WHEREAS, the boards of directors of Sellers have approved this Agreement and the transactions contemplated hereby (including the purchase and sale of the Acquired Assets and the assumption by Buyer of the Assumed Liabilities) upon the terms and conditions set forth in this Agreement and in accordance with the Delaware General Corporation Law; and

WHEREAS, the board of directors of Buyer has approved this Agreement and the transactions contemplated hereby (including the purchase and sale of the Acquired Assets and the assumption by Buyer of the Assumed Liabilities) upon the terms and conditions set forth in this Agreement and in accordance with the Kentucky Business Corporation Act.


2 CH1 8904762

NOW, THEREFORE, in consideration of the foregoing and their respective representations, warranties, covenants and undertakings herein contained, and intending to be legally bound, Sellers and Buyer hereby agree as follows.

ARTICLE 1 PURCHASE AND SALE OF THE ACQUIRED ASSETS

1.1 Transfer of Acquired Assets. At, and effective as of, the Closing, and upon the terms and subject to the conditions set forth in this Agreement and the Sale Order, Sellers shall sell, assign, transfer, convey and deliver to an Affiliate of Buyer designated by Buyer prior to the Closing (the “Designated Affiliate”) (or to one or more subsidiaries of the Designated Affiliate), and Buyer or the Designated Affiliate (or one or more subsidiaries of the Designated Affiliate) shall purchase and accept from Sellers, all of Sellers’ right, title and interest in, to and under all the Acquired Assets, free and clear of all Claims and Liens (other than Permitted Liens and Assumed Liabilities) to the extent provided by the Bankruptcy Code (including Sections 105 and 363(f) thereof) or by Order of the Bankruptcy Court (including the Sale Order). Acquired Assets shall be allocated among and conveyed to the Designated Affiliate (or to one or more subsidiaries of the Designated Affiliate) in accordance with Buyer’s written designation. For purposes of this Agreement, “Acquired Assets” means all of the properties, assets, interests, goodwill and rights, wherever located, of Sellers, including the following (but specifically excluding in all cases the Excluded Assets):

(a) all of the real property owned by Sellers, together with any Improvements thereon, and all easements, rights of way, servitudes, tenements, appurtenances, privileges and other rights with respect thereto, owned by Sellers, including, subject to Section 1.9, the Delaware Facility (collectively, the “Owned Real Property”), other than any Owned Real Property that is an Excluded Asset, if any (the “Purchased Owned Real Property”);

(b) all of Sellers’ rights under leases, subleases, licenses or occupancy agreements of real property listed on Schedule 1.1(b) (the “Real Property Leases”), other than Excluded Real Property Leases (the “Assumed Real Property Leases”);

(c) all notes receivable, accounts receivable and other receivables of Sellers as of the Closing Date;

(d) all credits, prepaid expenses, deferred charges, advance payments, security deposits and prepaid items of Sellers as of the Closing Date;

(e) all inventory of any kind or nature, whether or not prepaid, and wherever located, held or owned by Sellers on the Closing Date, including all (i) semi-finished and finished goods, work-in-process, goods on consignment, raw materials, components, parts, service parts, packaging materials, operating supplies, fuels and other similar materials (the “Inventory”) and (ii) rights of Sellers, to the extent transferable, to the warranties received from suppliers with respect to the foregoing;


3 CH1 8904762

(f) all of Sellers’ (i) machinery, manufacturing equipment, engineering equipment and tooling and (ii) rights, to the extent transferable, to the warranties and licenses received from manufacturers and sellers of the foregoing;

(g) all other tangible personal property and interests therein owned by Sellers (or which they have a legal right to use) as of the Closing Date, including all equipment, furniture and furnishings of Sellers;

(h) to the extent owned by Sellers, any computer hardware, equipment and peripherals of any kind and of any platform, including desktop and laptop personal computers, handheld computerized devices, servers, mid-range and mainframe computers, process control and distributed control systems, but specifically excluding any Computer Software that may be located on the foregoing;

(i) all of Sellers’ rights under each license of Intellectual Property by Sellers to a third party and all licenses of Intellectual Property Rights by a third party to Sellers (other than licenses to Open Source Software and any license that constitutes an Excluded Contract) including each such license listed on Schedule 1.1(i) (“IP Licenses”);

(j) all Intellectual Property Rights owned by Sellers, together with all rights to use, recover and collect for any past, present or future infringements or misappropriations of Intellectual Property Rights (the “Owned IP”) and all IP Documentation that is owned by or licensed to, and in the possession of Sellers;

(k) all of Sellers’ rights under the Contracts other than the Excluded Contracts, including those listed on Schedule 1.1(k) (such Contracts, together with the Assumed Real Property Leases and the IP Licenses, the “Assigned Contracts”);

(l) subject to obtaining all necessary Consents, all of Sellers’ rights under the Permits (the “Assigned Permits”);

(m) any and all insurance proceeds, condemnation awards or other compensation in respect of loss or damage to any Acquired Asset to the extent occurring after November 22, 2013, and all rights and Claims of the Sellers to any such insurance proceeds, condemnation awards or other compensation that have not been paid by the Closing;

(n) all of Sellers’ manufacturer identifier numbers issued by the National Highway Traffic Safety Administration;

(o) copies of all Business Records;

(p) all telephone, telex and telephone facsimile numbers and other directory listings utilized by Sellers primarily in connection with the Business;

(q) all Claims or other rights of, or benefits to, Sellers whether arising out of events occurring prior to, on or after the Closing Date, including any rights under or pursuant to all warranties, representations, indemnities, agreements to hold harmless and guarantees made by


4 CH1 8904762

suppliers, manufacturers or contractors but, in each of the foregoing cases of this clause (q), only to the extent related to either Acquired Assets or Assumed Liabilities (including any claims for past infringement or misappropriation);

(r) all Employee Benefit Plans, the assets thereof and any assets of Sellers held under or with respect to any Employee Benefit Plan (including all Claims, refunds, adjustments, proceeds and recoveries, and any other rights and benefits under such Employee Benefit Plans), except, in each case, for any such Employee Benefit Plan that is excluded pursuant to Section 1.8;

(s) all Claims of Sellers or of their respective bankruptcy estates of any nature or description, arising or based in whole or in part upon events, actions or inaction occurring prior to the Closing Date (and whether or not asserted prior to the Closing Date), except for the Designated Causes of Action;

(t) all cash (including restricted cash) and cash equivalents, marketable securities, commercial paper, checks in transit and undeposited checks of Sellers;

(u) all intercompany receivables of any Seller from the other Seller or any subsidiary of any Seller;

(v) all robots, inventory, car parts and back-up servers and related hardware, in each case, located at the Delaware Facility; and

(w) all other properties, assets, goodwill and rights of whatever kind and nature, tangible or intangible, that are owned by Sellers as of the Closing Date that are not Excluded Assets.

Notwithstanding anything in this Agreement to the contrary, this Agreement shall not constitute or be deemed an agreement to, and Sellers shall not be obligated to, assign, transfer, convey or deliver (or cause to be assigned, transferred, conveyed or delivered) to Buyer, any Delayed Acquired Asset or Delayed Assumed Liability until such time as all Legal Impediments are removed or all Consents necessary for the legal transfer or assumption thereof are obtained or delivered in respect of such Delayed Acquired Asset or Delayed Assumed Liability, as applicable. Each of the Parties agrees that the Delayed Acquired Assets shall be assigned, transferred, conveyed and delivered, and any Delayed Acquired Liabilities shall be assumed, in accordance with the provisions of Section 1.6. Following such assignment, transfer, conveyance and delivery of any Delayed Acquired Asset, or the assumption of any Delayed Assumed Liability, the applicable Delayed Acquired Asset or Delayed Assumed Liability shall be treated for all purposes of this Agreement as an “Acquired Asset” or as an “Assumed Liability,” as the case may be, and for all purposes hereof, unless otherwise waived in writing by Sellers, “Acquired Assets” shall not include any Delayed Acquired Asset and “Assumed Liabilities” shall not include any “Delayed Assumed Liability” until the Legal Impediments are removed or all Consents necessary for the legal transfer or assumption thereof are obtained or delivered in respect of such Delayed Acquired Asset or Delayed Assumed Liability.

1.2 Excluded Assets. Notwithstanding anything to the contrary in this Agreement (including Section 1.1), the Acquired Assets do not include any right, property, interest or asset


5 CH1 8904762

of Sellers listed or described in clause (a) through (s) of this Section 1.2 (all such rights, properties, interests and assets not being acquired by Buyer are herein referred to as the “Excluded Assets”):

(a) the Real Property Leases set forth on Schedule 1.2(a), which Schedule 1.2(a) may be amended in accordance with Section 1.5 (the “Excluded Real Property Leases”), if any;

(b) all bank accounts of Sellers and their Affiliates;

(c) all Contracts set forth on Schedule 1.2(c), which Schedule 1.2(c) may be amended in accordance with Section 1.5 (such Contracts, together with the Excluded Real Property Leases, the “Excluded Contracts”), if any;

(d) all Claims or other rights of, or benefits to, Sellers relating to any litigation, arbitration or other proceeding involving Sellers pending, threatened, adjudicated, settled or instituted prior to or as of the Closing Date in each case, to the extent related to any Excluded Asset or any Excluded Liability;

(e) all Retained Books and Records;

(f) all Claims, refunds, adjustments, proceeds and recoveries, and any other rights of and benefits to, Sellers under or with respect to (i) any Excluded Asset and (ii) any proceeding before any Government relating to the period prior to the Closing to the extent related to any Excluded Asset or Excluded Liability;

(g) all losses, loss carry forwards and rights to receive refunds, credits, Claims, refunds and credits from net operating loss carry backs or other Tax asset, in all cases, with respect to any and all Taxes of Sellers, including interest receivable with respect to any of the foregoing;

(h) all Causes of Action (as defined in the Plan) to the extent related to any Excluded Asset or any Excluded Liability;

(i) all Designated Causes of Action;

(j) all shares of capital stock or other equity interests of Sellers or the Non-Seller Subsidiary;

(k) all rights of, or benefits to, Sellers arising under this Agreement and the Ancillary Agreements;

(l) all Claims or other rights of, or benefits to, Sellers, whether arising out of events occurring prior to, on or after the Closing Date, including any rights under or pursuant to all warranties, representations, indemnities, agreements to hold harmless and guarantees made by suppliers, manufacturers and contractors but, in each of the foregoing cases of this clause (l), only to the extent they relate to either Excluded Liabilities or Excluded Assets;


6 CH1 8904762

(m) all Claims or other rights of, or benefits to, Sellers against or with respect to any director, officer, stockholder or other Related Person of, or any former director, officer, stockholder or other Related Person of, Sellers (whether or not asserted prior to the Closing Date), including any Claims or other rights of, or benefits to, Sellers against any such Person or any third party for indemnification, contribution, subrogation or reimbursement for expenses advanced or indemnification provided to any director, officer, stockholder or other Related Person of, or any former director, officer, stockholder or other Related Person of, Sellers, but in each of the foregoing cases of this clause (m), only as to such director, officer, stockholder or other Related Person in his or her capacity as such;

(n) all assets subject to the International Traffic in Arms Regulations of the U.S. Department of State, if any;

(o) any asset that Buyer elects to exclude pursuant to Sections 1.8 or 1.11;

(p) any Contract that Buyer elects to exclude pursuant to Section 1.5;

(q) the Delaware Facility, if Buyer so elects pursuant to Section 1.9;

(r) all assets set forth on Schedule 1.2(r), which Schedule 1.2(r) may be amended in accordance with Section 1.8 or Section 1.9; and

(s) all directors and officers liability insurance policies of Sellers (and any rights, Claims or proceeds thereunder).

1.3 Assumption of Assumed Liabilities. At, and effective as of, the Closing, Sellers shall assign, transfer, convey and deliver to Buyer or the Designated Affiliate (or to one or more subsidiaries of the Designated Affiliate), and Buyer or the Designated Affiliate (or one or more subsidiaries of the Designated Affiliate) shall irrevocably assume and agree to pay, perform, discharge and fulfill, and if applicable, comply with, all of the Assumed Liabilities in accordance with their respective terms. For the purposes of this Agreement, “Assumed Liabilities” shall mean only the following obligations, liabilities and commitments of Sellers:

(a) all liabilities and obligations of Sellers under the Assigned Contracts that are first incurred and arise after the Closing Date;

(b) all cure costs required to be paid pursuant to Section 365 of the Bankruptcy Code in connection with the assumption and assignment of the Assigned Contracts (“Cure Costs”);

(c) the sponsorship and Liabilities of the Employee Benefit Plans, if any, except for any such Employee Benefit Plan that is excluded pursuant to Section 1.8;

(d) the Designated Contract Obligations;

(e) all liabilities and obligations of Sellers under the Assigned Permits first arising after the Closing Date; and


7 CH1 8904762

(f) all liabilities and obligations of Sellers for (i) Transaction Taxes payable in connection with the transactions contemplated by this Agreement, (ii) Taxes and assessments relating to the Delaware Facility for all periods (and portions thereof) through and including the Closing Date or, if the Delaware Facility is an Acquired Asset, then Taxes and assessments relating to the Delaware Facility for all periods, (iii) other Taxes relating to the Acquired Assets for periods (or portions thereof) beginning on the day after the Closing Date, in the case of (i), (ii) and (iii), in accordance with Article 8 and (iv) the obligations of Sellers assumed by Buyer pursuant to Section 1.10.

Subject to Section 12.5, this Section 1.3 shall in no way limit Claims or defenses Buyer may have against any Person other than Sellers. The transactions contemplated by this Agreement shall in no way expand the rights or remedies of any third party against Buyer or Sellers as compared to the rights and remedies which such third party would have had against Sellers absent the Seller Chapter 11 Cases had Buyer not assumed such Assumed Liabilities.

1.4 Excluded Liabilities.

(a) Buyer shall not assume or be obligated to pay, perform, discharge, fulfill or comply with any liability or obligation of any of Sellers, direct or indirect, known or unknown, absolute or contingent, not expressly assumed by Buyer pursuant to Section 1.3 (all such liabilities and obligations not being assumed being herein called the “Excluded Liabilities”), and the Excluded Liabilities shall include, to the extent not expressly assumed by Buyer pursuant to Section 1.3, the following:

(i) all obligations and liabilities to the extent arising in connection with or related to the Excluded Assets;

(ii) all obligations and liabilities (A) with respect to Transferred Employees that arise or are incurred prior to the Closing Date or (B) with respect to any current, former and future employees and other Related Persons of Sellers who do not become Transferred Employees that arise or are incurred at any time, (without limiting the generality of the foregoing provisions in any way, such Excluded Liabilities under this Section 1.4(a)(ii) include (x) all obligations and liabilities under any employment, severance, retention, termination or other agreement or arrangement or under any Law (including the WARN Act), (y) all obligations and liabilities arising out of or related to employment, compensation, benefits, other terms and conditions of employment or termination of employment, in each case of or by Sellers, and (z) all obligations and liabilities of Sellers with respect to payroll, vacation, sick leave, workers’ compensation or occupational disease claims or benefits, unemployment benefits, pension benefits, employee stock option or profit sharing plans, health plans or benefits or any other employee plans or benefits or other compensation of any kind to any employee, former employee or other Related Person of Sellers);

(iii) all obligations and liabilities of Sellers under this Agreement or any Ancillary Agreement;


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(iv) all obligations and liabilities of Sellers relating to litigation or arbitration or other proceedings with, or to indemnify or advance expenses to, directors, officers, stockholders or other Related Persons of Sellers or former directors, officers, stockholders or other Related Persons of Sellers;

(v) all obligations and liabilities relating to any litigation, arbitration, Claim, action, investigation, suit or other proceeding (A) involving Sellers, or related to the Acquired Assets or Assumed Liabilities, pending, threatened, adjudicated, settled or instituted prior to or as of the Closing Date or (B) to the extent related to facts, actions, omissions, circumstances or conditions existing, occurring or accruing prior to or as of the Closing Date;

(vi) all accounts payable and other obligations and liabilities of Sellers arising prior to the Petition Date, excluding Cure Costs required to be paid pursuant to Section 365 of the Bankruptcy Code in connection with the assumption and assignment of the Assigned Contracts (but, for the avoidance of doubt, expressly excluding any such liabilities referred to in Section 1.3);

(vii) all Taxes of Sellers (other than Taxes assumed pursuant to Section 1.3(f));

(viii) all obligations and liabilities of Sellers with respect to intercompany accounts payable or accrued liabilities to Sellers (or to any of their respective Related Persons);

(ix) all obligations and liabilities of Sellers in respect of indebtedness for borrowed money;

(x) all obligations and liabilities of Sellers with respect to services, products, or service or product warranties provided, designed, manufactured, marketed, sold or distributed prior to the Closing (including all obligations and liabilities of Sellers with respect to design or manufacturing defects or product liability occurrences), in each case, whether discovered prior to, on or after the Closing Date;

(xi) all obligations and liabilities of Sellers (including fines, penalties, damages and any investigatory, corrective or remedial obligation) arising under Environmental Laws and relating to (A) any Excluded Asset, (B) any property, facility or location or (C) any operations, events, conditions or circumstances occurring or existing on or prior to the Closing Date, including any release, threatened release, treatment, storage, disposal, or arrangement for disposal of or any exposure of any Person to Hazardous Materials occurring or existing on or prior to the Closing Date (whether or not constituting a breach of any representation or warranty herein);

(xii) all obligations and liabilities for any legal accounting, investment banking, brokerage or similar fees or expenses incurred by Sellers or any Affiliate


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of Sellers in connection with, resulting from or attributable to the transactions contemplated by this Agreement;

(xiii) all obligations and liabilities of Sellers arising out of facts and circumstances in existence prior to the Closing and from or related to any breach, default under, failure to perform, torts related to the performance of, violation of law, infringements or indemnities under, guaranties pursuant to and overcharges, underpayments or penalties on the part of Sellers under any of the Assigned Contracts prior to the Closing except for the applicable Cure Costs;

(xiv) all obligations and liabilities arising from or related to the operation or condition of the Acquired Assets or the Assumed Liabilities prior to the Closing or facts, actions, omissions, circumstances or conditions existing, occurring or accruing with respect to the Acquired Assets or the Assumed Liabilities prior to the Closing;

(xv) all obligations and liabilities resulting from, caused by or arising out of, or which relate to, directly or indirectly, the conduct of Sellers or ownership or lease of any properties or assets or any properties or assets previously used by Sellers or any Affiliate of Sellers, or other actions or omissions of Sellers or any of their Affiliates, including any amounts due or that may become due or owing under the Assumed Contracts with respect to the period prior to the Closing (except for Cure Costs);

(xvi) all accounts payable of Sellers arising prior to the Closing (except for Cure Costs);

(xvii) all obligations and liabilities resulting from, caused by or arising out of, or that relate to the business dealings or relationship between Sellers and any dealers under Contract, Law or otherwise or the termination of any dealer agreement or other arrangement or understanding with any dealer (except for Cure Costs);

(xviii) all obligations and liabilities arising out of or resulting from non-compliance with any Law by Sellers;

(xix) all obligations and liabilities for infringement or misappropriation arising from the development, modification or use of any Intellectual Property Rights prior to the Closing;

(xx) all obligations and liabilities in respect of royalty payments to any third party or other fees or payments relating to the IP Licenses arising prior to the Closing (except for Cure Costs); and

(xxi) all obligations and liabilities arising from state, provincial or bankruptcy law theories of recovery, including fraudulent transfer.


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(b) In the event of any conflict between the terms of Section 1.3 and the terms of this Section 1.4, the terms of Section 1.3 will prevail.

(c) The Parties acknowledge and agree that the disclosure of any obligation or liability on any Schedule to this Agreement shall not create an Assumed Liability or other liability of Buyer, except where such disclosed obligation has been expressly assumed by Buyer as an Assumed Liability in accordance with the provisions of Section 1.3.

1.5 Assigned Contracts and Excluded Contracts.

(a) From and after the date hereof until the Business Day immediately preceding the date of the Sale Hearing, Sellers shall not reject or alter (or attempt to alter) the terms of any executory Contract (including IP Licenses) or any executory Real Property Lease to which any Seller is a party (collectively, the “Business Contracts”) unless otherwise agreed to in writing by Buyer. Sellers shall provide timely and proper written notice of the motion seeking entry of the Sale Order to all parties to the Business Contracts and take all other actions necessary to cause such Business Contracts to be assumed by Sellers and assigned to Buyer pursuant to Section 365 of the Bankruptcy Code to the extent that such Business Contracts are Assigned Contracts at Closing.

(b) On or prior to the date that is two (2) Business Days before the date of the Auction, Buyer may designate in a writing delivered to Sellers any Assigned Contract otherwise included as an Acquired Asset to be an Excluded Real Estate Lease or Excluded Contract, as applicable, for all purposes of this Agreement or any Business Contract otherwise included as an Excluded Contract to be an Assigned Contract for all purposes of this Agreement and, upon any such designation, Schedule 1.1(b), Schedule 1.1(k), Schedule 1.2(a) and Schedule 1.2(c), as applicable, shall automatically be deemed amended, as applicable, to reflect such designation. To the extent Buyer designates any Assigned Contract as an Excluded Real Property Lease or Excluded Contract, as applicable, Sellers may in their discretion elect to reject such Excluded Contract and the Sale Order shall authorize, but not direct, Sellers to reject such Excluded Contract. Buyer shall pay and be solely responsible for all costs of moving any Acquired Asset from the Leased Real Property designated as Excluded Assets, and for any damages to the Leased Real Property caused by Buyer, its Affiliates or its agents or representatives in connection with such move.

(c) On or prior to the date that is two (2) Business Days before the date of the Auction, Buyer shall deliver to Sellers Schedule 1.5(c), which shall comprise a list of Business Contracts that Buyer wishes to designate as “Designated Contracts”. The Designated Contracts shall be automatically deemed removed from Schedule 1.1(b), Schedule 1.1(k), Schedule 1.2(a) and Schedule 1.2(c), as applicable and shall not be Assigned Contracts or Excluded Contracts as of the Closing Date. Except as otherwise provided herein, Sellers shall not seek to reject the Designated Contracts for a period of sixty (60) days following the Closing Date (the “Retention Period”). Buyer may, at its sole discretion and at any time during the Retention Period, deliver to Sellers one (1) or more written notices (each, a “Rejection Notice”) notifying Sellers of Buyer’s intent not to assume any Designated Contract(s). Upon receipt of such a Rejection Notice,


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notwithstanding anything in this Agreement to the contrary, the Designated Contract(s) identified in such Rejection Notice shall automatically be deemed Excluded Contracts for all purposes under this Agreement and Schedule 1.1(b) Schedule 1.1(k), Schedule 1.2(a) and Schedule 1.2(c), as applicable, shall automatically be deemed to have been amended, as applicable, to reflect such designation. To the extent Buyer delivers a Rejection Notice with respect to a Designated Contract, Sellers may in their discretion elect to or elect not to reject such Designated Contract; provided that Buyer shall not be responsible for any liabilities or obligations under such Designated Contract accruing from and after the date on which such Rejection Notice is delivered to Sellers. Buyer may, at its sole discretion and at any time during the Retention Period, deliver to Sellers one (1) or more written notices (each, an “Assumption Notice”) requesting assumption and assignment of any Designated Contract(s). Upon receipt of any such Assumption Notice, Sellers shall take all actions reasonably necessary to seek to assume and assign to Buyer, and Buyer shall take all actions reasonably necessary to seek to assume, (at Buyer’s cost and expense) pursuant to Section 365 of the Bankruptcy Code the Designated Contract(s) set forth in the applicable Assumption Notice, and Buyer shall be responsible for satisfying any Cure Costs relating to such Designated Contracts. Notwithstanding anything in this Agreement to the contrary, on the date any Assumption Notice is delivered to Sellers with respect to any Designated Contract pursuant to this Section 1.5(c), such Designated Contract shall automatically be deemed an Assigned Contract for all purposes under this Agreement. With respect to any Designated Contract, Buyer shall perform all of Sellers’ obligations under such Designated Contract and shall compensate Sellers for all costs and expenses, in each case, first arising after the Closing Date and actually incurred by Sellers after the Closing under such Designated Contract until the earliest of the date such Designated Contract is assigned to Buyer, the date Buyer delivers a Rejection Notice relating to such Designated Contract and the last day of the Retention Period (the “Designated Contract Obligations”). Immediately following the expiration of the Retention Period, all Designated Contracts for which Sellers have not received either a Rejection Notice or an Assumption Notice shall automatically be deemed Excluded Contracts for all purposes under this Agreement. The covenants set forth in this Section 1.5(c) shall survive the Closing.

1.6 Delayed Conveyance of Certain Property.

(a) To the extent permitted by Law and to the extent otherwise permissible in light of any Legal Impediment or required Consent, following the Closing, Sellers shall hold each Delayed Acquired Asset or Delayed Assumed Liability for the use and benefit, insofar as commercially reasonably practicable and to the extent it may lawfully do so, of Buyer (at the expense of Buyer). In addition, to the extent permitted by Law and to the extent otherwise permissible in light of any Legal Impediment or required Consent, Sellers shall take such other actions (as reasonably requested by, and at the sole expense of, Buyer) in order to place Buyer, insofar as commercially reasonably practicable and to the extent Sellers may lawfully do so, in the same position as if such Delayed Acquired Asset or such Delayed Assumed Liability had been transferred, assigned, conveyed, delivered or assumed as contemplated hereby and so that all the benefits and burdens relating to such Delayed Acquired Asset or such Delayed Assumed Liability, including possession, use, risk of loss, potential for gain, and dominion, control and command over


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such asset, are to inure, from and after the Closing Date, to Buyer. To the extent permitted by Law and to the extent otherwise permissible in light of any Legal Impediment or required Consent, Buyer shall be entitled to, and shall be responsible for, the management and the benefits and burdens of any Delayed Acquired Asset or any Delayed Assumed Liability not yet transferred to or assumed by it as a result of the failure to remove any Legal Impediment or obtain any required Consent on or prior to the Closing, and, subject to the other provisions of this Agreement (including Section 6.2), the Parties agree to use commercially reasonable efforts to cooperate and coordinate with respect to obtaining any Consent or removing any Legal Impediment, including by providing any financial information and pro forma financial information of the relevant Party and its Affiliates reasonably required by the party from whom a Consent is sought to be obtained or from whom a Legal Impediment is sought to be removed. Each of the Parties agrees that, until a Delayed Assumed Liability is assumed by Buyer, Buyer shall indemnify and hold harmless Sellers and their Related Persons from such Delayed Assumed Liability. Nothing herein shall require Sellers or their Related Persons to expend any money or commence any litigation to obtain the removal of any Legal Impediment or obtain any required Consent.

(b) If and when the Legal Impediments and the Consents, the failure to remove or the absence of which caused the deferral of the transfer or assumption of any Acquired Asset or Assumed Liability pursuant to Section 1.6(a), are removed or obtained, as the case may be, the transfer and assumption of the applicable Acquired Asset or Assumed Liability shall be promptly effected in accordance with the terms of this Agreement and any applicable Ancillary Agreements, without the payment of additional consideration.

(c) In connection with Sellers’ retention of an Acquired Asset or Assumed Liability due to the deferral of the transfer or assumption of such Acquired Asset or Assumed Liability pursuant to this Section 1.6, none of Sellers or their Related Persons shall be obligated to expend any money, unless the necessary funds are advanced by Buyer.

(d) In the event that at any time or from time to time, any Party shall receive or otherwise possess any asset that is acquired by, or retained by, any other Party pursuant to this Agreement, such Party shall promptly transfer, or cause to be transferred, such asset to the Party so entitled thereto. Prior to any such transfer, the Party receiving or possessing such asset shall hold such asset in trust for any such other Party.

1.7 Deemed Consents and Cures. For all purposes of this Agreement (including all representations and warranties of Sellers contained herein), Sellers shall be deemed to have obtained all required consents in respect of the assignment of any Assigned Contract if, and to the extent that, pursuant to the Sale Order or other Bankruptcy Court Order or applicable Law, Sellers are authorized to assume and assign such Assigned Contracts to Buyer pursuant to Section 365 of the Bankruptcy Code without any third-party consent and any applicable Cure Costs have been satisfied by Buyer, on behalf of Sellers, as provided in this Agreement.


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1.8 Other Assets. On or prior to the date that is two (2) Business Days before the Auction Date, Buyer shall notify Sellers in writing of any Employee Benefit Plan or any other Acquired Asset (other than, in the case of any other Acquired Assets, any Contract) that Buyer desires to designate as Excluded Assets, and upon delivery of such notice to Sellers, all such Acquired Assets shall be automatically deemed to be Excluded Assets and added to Schedule 1.2(r), and none of such assets or properties shall be sold or assigned to Buyer pursuant hereto.

1.9 Delaware Facility. On or prior to the date that is two (2) Business Days before the Auction Date, Buyer shall be able to perform any environmental due diligence on the Delaware Facility it so desires so long as such due diligence does not violate the terms and conditions of the Brownfields Development Agreement, and shall be granted reasonable access to the Delaware Facility in connection therewith. On or prior to the date that is two (2) Business Days before the Auction Date, Buyer may notify Sellers in writing that Buyer elects to designate the Delaware Facility as an Excluded Asset, and upon delivery of such notice to Sellers, the Delaware Facility shall be automatically deemed to be an Excluded Asset and added to Schedule 1.2(r), and shall not be sold or assigned to Buyer pursuant hereto. If Buyer does not elect to designate the Delaware Facility as an Excluded Asset, and Buyer or an Affiliate of Buyer sells the Delaware Facility to a third party purchaser prior to the second anniversary of the Closing Date, then, after Buyer and its Affiliates are reimbursed from the proceeds of such sale for any and all of their costs and expenses incurred after the Closing related to the Delaware Facility, including costs and expenses related to ownership and maintenance of, and improvements to, the Delaware Facility, costs and expenses incurred by Buyer or any of its Affiliates in connection with the marketing and sale of the Delaware Facility, including costs and expenses of advisors, brokers, consultants, attorneys, accountants and other third parties incurred by Buyer or any of its Affiliates in connection with such sale, and Taxes and closing costs payable by Buyer and its Affiliates in connection with such sale, and after the satisfaction of any indebtedness necessary to release any Liens senior to the DoE Liens, the remaining proceeds shall be applied as follows: (a) Buyer shall be entitled to the first $8,500,000 of such proceeds; (b) Sellers shall be entitled to the next $1,500,000 of such proceeds, to the extent such proceeds, in the aggregate, exceed $8,500,000; (c) Buyer shall be entitled to 60% and Sellers shall be entitled to 40% of the next $5,000,000 of proceeds, to the extent such proceeds, in the aggregate, exceed $10,000,000 and (d) Buyer shall be entitled to 50% and Sellers shall be entitled to 50% of any additional proceeds, to the extent such proceeds, in the aggregate, exceed $15,000,000.

1.10 Limited Warranty Program. Buyer hereby assumes and agrees to honor the obligations of Sellers under the Sellers’ limited warranties on “Karma” sedans existing as of the date hereof in an amount not to exceed (i) $2,000 per each vehicle warrantied or (ii) $400,000 in the aggregate; provided that, at such point in time when Buyer and its Affiliates have restarted commercial production of the “Karma” sedan (or substantially equivalent model under a different name) and upon the production of the 250th such vehicle, the aggregate obligation set forth in clause (ii) will be increased by $1,000,000.

1.11 Inaccuracies of Sellers’ Representations and Warranties. If any of Sellers’ representations and warranties is untrue or incorrect in any material respect on and as of the Closing Date (except for representations and warranties made as of a specified date, which shall be true and correct as of that date) and such failure to be true and correct in any material respect


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(a) materially increases Buyer’s costs of assuming or owning any Acquired Asset or operating the Long-Term Business after the Closing or (b) materially increases the scope or amount of any Assumed Liability, then Buyer shall have the right to designate any such Acquired Asset as an Excluded Asset and to designate any such Assumed Liability as an Excluded Liability, provided that in no event shall Buyer have the right under this Section 1.11 to designate the liabilities set forth in Section 1.3(f)(ii) (Delaware Facility Taxes) as Excluded Liabilities. If Buyer makes any such designation, then (i) such previously considered Acquired Asset shall be automatically deemed removed from the Schedules related to Acquired Assets, automatically deemed added to the Schedules related to Excluded Assets and not sold or assigned to Buyer pursuant to this Agreement and (ii) such previously considered Assumed Liability shall be automatically deemed removed from the Schedules related to Assumed Liabilities, automatically deemed added to the Schedules related to Excluded Liabilities and not assumed by Buyer pursuant to this Agreement, provided that in no event shall the liabilities set forth in Section 1.3(f)(ii) (Delaware Facility Taxes) be automatically deemed Excluded Liabilities as a result of any designation made by Buyer pursuant to this Section 1.11. For the avoidance of doubt, the removal of any Acquired Asset or Assumed Liability from the Schedules relating to the Acquired Assets or Assumed Liabilities shall not modify, amend or waive any other provision of this Agreement or the Ancillary Agreements, including, but not limited to, the provisions of Article II hereof.

ARTICLE 2 CONSIDERATION; CLOSING AND DELIVERIES

2.1 Consideration. The aggregate consideration for the sale and transfer of the Acquired Assets is (i) Thirty Five Million Two Hundred Fifty Thousand Dollars ($35,250,000) (the “Purchase Price”), plus (ii) the assumption by Buyer at the Closing of the Assumed Liabilities, plus (iii) a 20% equity interest in the Designated Affiliate, as more fully described in the term sheet attached as Exhibit A hereto (the “Equity Consideration”) plus (iv) an amount in cash (the “DIP Loan Payment Amount”) equal to the lesser of (x) the outstanding principal balance of the Hybrid DIP Facility at Closing and (y) Nine Million One Hundred Forty Thousand Dollars ($9,140,000).

2.2 Closing. The sale, transfer, assignment and delivery by Sellers of the Acquired Assets to Buyer and the assumption by Buyer of the Assumed Liabilities, on the terms and subject to the conditions set forth in this Agreement, will be effected on the Closing Date (the “Closing”) and will take place at the offices of Kirkland & Ellis LLP, 300 North LaSalle Street, Chicago, Illinois 60654 at 10:00 a.m. Central Standard Time on the second Business Day immediately following the satisfaction or waiver by the appropriate Party of all the conditions contained in Article 9 (other than conditions which by their terms or their nature are to be performed or measured as of the Closing Date (provided such conditions are satisfied at the Closing or waived by the applicable Party)), or on such other date or at such other place and time as may be agreed to by the Parties (the “Closing Date”). The Parties shall use all reasonable best efforts to consummate the Closing as promptly as possible and in no event later than 14 days following the date of entry of the Sale Order, subject to the terms and conditions of this Agreement.

2.3 Sellers’ Deliveries.


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(a) Subject to fulfillment or waiver of the conditions set forth in Section 9.1 and Section 9.2 (other than Section 9.2(d)), at the Closing, Sellers shall deliver to Buyer the following documents consistent with the terms of this Agreement:

(i) a bill of sale with respect to the Acquired Assets (other than the Assigned Contracts), duly executed by Sellers, in the form of Exhibit B hereto;

(ii) an assignment and assumption agreement with respect to the Assigned Contracts and the Assumed Liabilities, duly executed by Sellers, in the form of Exhibit C hereto;

(iii) one or more quit claim deeds (as may be applicable) with regard to each parcel of the Purchased Owned Real Property, duly executed by Sellers and in a form reasonably acceptable to Buyer and Sellers, subject only to Permitted Liens;

(iv) an officer’s certificate of Sellers certifying as to the resolutions of the board of directors of each Seller approving and authorizing this Agreement and the transactions contemplated by this Agreement, and in the form of Exhibit D hereto;

(v) an intellectual property assignment agreement with respect to the Owned IP, duly executed by Sellers, in the form of Exhibit E hereto;

(vi) certificates of title, assignments of Contracts and other instruments of transfer, conveyance, delivery and assignment (including customary owner’s affidavits and assignments of patents, patent applications, trademark registrations and trademark applications) as and to the extent reasonably necessary to evidence the transfer, conveyance, delivery and assignment to Buyer of Sellers’ right, title and interest in and to the Acquired Assets (collectively, the “Additional Asset Conveyance Documents”);

(vii) such assignments of Contracts and other instruments of assumption as and to the extent reasonably necessary to evidence the valid and effective assumption by Buyer of the Assumed Liabilities (collectively, the “Additional Liabilities Assumption Documents”); and

(viii) an affidavit of non-foreign status that complies with Section 1445 of the Code, duly executed by Sellers, in the form of Exhibit F hereto.

(b) Notwithstanding anything in this Agreement or any Ancillary Agreement to the contrary, Sellers’ obligation to convey to Buyer all rights of Sellers under the Assigned Permits consists solely of providing: (i) if required by Law, notices of intent to transfer the Assigned Permits to Buyer in accordance with the Government regulations governing such Permit transfer, and (ii) information as required by the Government regulations governing such Permit transfer. Furthermore, in no event shall any Seller, any of its Related Persons, or any of their Related Persons be required to deliver any agreement or instrument (other than customary owner’s affidavits in connection with the


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Purchased Owned Real Property) that (i) requires any Seller, any of its Related Persons or any of their Related Persons to make any additional representations, warranties or covenants, express or implied, not contained in this Agreement (other than such representations, warranties or covenants in favor of the applicable Government as required by non-U.S. law for registration or recordation of assignment of patents or trademarks) or (ii) otherwise expands the liabilities or obligations of, or requires any payments to be made or expenses to be incurred by, any Seller, any of its Affiliates or any of their respective Related Persons related to the transactions contemplated hereby.

2.4 Buyer’s Deliveries. Subject to fulfillment or waiver of the conditions set forth in Section 9.1 and Section 9.3 (other than Section 9.3(f)), at the Closing, Buyer shall:

(a) pay an amount equal to the cash component of the Purchase Price plus the DIP Loan Payment Amount to Sellers, by wire transfer of immediately available funds to an account or accounts designated in writing by Sellers no less than two (2) Business Days prior to the Closing Date;

(b) deliver a secretary’s certificate certifying as to the resolutions of the board of directors of Buyer approving and authorizing this Agreement and the transactions contemplated by this Agreement and in the form of Exhibit G hereto;

(c) deliver to Sellers an assignment and assumption agreement with respect to the Assigned Contracts and the Assumed Liabilities, duly executed by Buyer, in the form of Exhibit B hereto;

(d) deliver to Sellers each of the Additional Asset Conveyance Documents and Additional Liabilities Assumption Documents; and

(e) deliver to the Committee evidence of the Equity Consideration, in form and substance reasonably satisfactory to the Committee.

2.5 Deposit. Within five (5) Business Days following the execution of this Agreement, (i) Buyer and Sellers shall execute and deliver the Escrow Agreement and (ii) Buyer shall deposit with the Escrow Agent Five Million Dollars ($5,000,000) in immediately available funds (the “Deposit”). The Deposit, together with any interest thereon, if any, shall be applied against the Purchase Price at Closing in accordance with the Escrow Agreement. If this Agreement shall be terminated pursuant to Section 10.2, the Deposit, together with any interest earned thereon, shall be delivered to Buyer or Sellers, as applicable, in accordance with the Escrow Agreement and Section 10.5.

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLERS

Sellers hereby jointly and severally represent and warrant to Buyer as follows:

3.1 Corporate Organization. Each Seller is a corporation duly incorporated, validly existing and in good standing under the Laws of the state of its incorporation, has all requisite corporate power and authority to own its properties and assets and to conduct its business as now


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conducted and is in good standing and qualified or licensed to do business in each jurisdiction where the character of its business or the nature of its properties makes such qualification or licensing necessary, except where the failure to be so qualified would have a Material Adverse Effect. Subject to any necessary authority from the Bankruptcy Court, Sellers have all requisite corporate or other power and authority to own their respective properties and assets and to conduct their respective businesses as now conducted. Sellers do not beneficially own any equity interest or other interest convertible into any equity interest in any Person other than their wholly-owned subsidiary Fisker Automotive GmbH (the “Non-Seller Subsidiary”). The Non-Seller Subsidiary does not have any right, title or interest in, to or under any property or assets, other than assets that are of deminimis value and immaterial in the aggregate.

3.2 Authorization and Validity. Subject to the Bankruptcy Court’s entry of the Sale Order, each Seller has all requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is or will be a party, and subject to the Bankruptcy Court’s entry of the Sale Order, each Seller has the requisite corporate power and authority to perform and carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution, delivery and consummation of this Agreement and the Ancillary Agreements by the Sellers party thereto and the performance by Sellers of their respective obligations hereunder and thereunder have been duly authorized and approved by all necessary action by the board of directors of each Seller, and, subject to any necessary authority from the Bankruptcy Court, no other organizational proceedings on the part of any Seller is necessary to authorize such execution, delivery and performance. This Agreement has been duly executed by Sellers, and the Ancillary Agreements when delivered will be, duly executed by the Sellers party thereto and constitute or will constitute its or their, as applicable, valid and binding obligation, enforceable against it or them, as applicable, in accordance with the terms herein and therein, except that such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar Laws affecting or relating to the enforcement of creditors’ rights generally, and is subject to general principles of equity.

3.3 Litigation. As of the date of this Agreement, to Sellers’ Knowledge, there are no Claims, suits, proceedings, arbitrations or investigations pending or threatened before any Government, including with respect to any Environmental Laws or any material Intellectual Property Rights, brought by or against any of Sellers that would reasonably be expected to have a Material Adverse Effect.

3.4 Environmental Matters. Except as posted in Sellers’ electronic dataroom in the folder titled “Environmental Matters” as of the date hereof, to Sellers’ Knowledge:

(a) Sellers are in compliance in all material respects with and, since January 1, 2011, have complied in all material respects with all applicable Environmental Laws and Environmental Permits, except as would not reasonably be expected to have a Material Adverse Effect;

(b) (i) Sellers possess all Environmental Permits required for the operation of the business as presently contemplated to be conducted in the near term, except as would not reasonably be expected to have a Material Adverse Effect; and (ii) as of the date of


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this Agreement, each such issued Environmental Permit is valid and in full force and effect, and no such Environmental Permit is subject to any pending or threatened administrative or judicial proceeding to revoke, cancel, suspend, deny or declare such Environmental Permit invalid in any material respect, except, in each case of this clause (ii), as would not reasonably be expected to have a Material Adverse Effect;

(c) Sellers have made available to Buyer copies of all Environmental Reports that are in the possession of Sellers; and

(d) Since June 8, 2011, Sellers have not received a written complaint, Order, directive, Claim, suit or proceeding from any Government or any other Person with respect to (i) any material violation of Environmental Laws or (ii) any release, spill, leak, discharge or emission of any Hazardous Materials that has not been fully resolved to the satisfaction of the issuing party, except, in each case of (i) and (ii), that would reasonably be expected to have a Material Adverse Effect.

3.5 Intellectual Property. To Sellers’ Knowledge:

(a) all (i) registered Intellectual Property Rights owned by any Seller and (ii) pending applications for registrations of Intellectual Property Rights owned by or filed in the name of any Seller, in each case of (i) and (ii), are in full force and effect, have not been abandoned or passed into the public domain and with respect to such issued or registered Intellectual Property Rights, are valid and enforceable, except, in each case of this Section 3.5(a), as would not reasonably be expected to have a Material Adverse Effect and Sellers have not used the Owned IP in a manner that would reasonably be expected to result in a Material Adverse Effect; and

(b) (i) neither Sellers nor any other party to any of the Material IP Licenses has commenced any action against any of the parties to such Material IP Licenses or given or received any written notice of any material default or violation under any Material IP License that was not withdrawn or dismissed, except for payment defaults and those defaults that will be cured in accordance with the Sale Order (or that need not be cured under the Bankruptcy Code to permit the assumption and assignment of the Material IP Licenses or that are Excluded Contracts) and actions, defaults or violations that would not reasonably be expected to have a Material Adverse Effect; (ii) each of the Material IP Licenses is, or will be at the Closing, valid, binding and in full force and effect against the applicable Seller, except as would not reasonably be expected to have a Material Adverse Effect; (iii) none of the other parties under any of the Material IP Licenses has provided Sellers with any written notice that it currently plans or intends to terminate any such Material IP License, or otherwise cease its performance thereunder related to such Material IP Licenses, except for such notices of termination or cessations that would not reasonably be expected to have a Material Adverse Effect; (iv) except as a result of the Seller Chapter 11 Cases, each Seller has performed all material obligations required to be performed by it to date under the material IP Licenses and is not in material breach or default thereunder, except as would not reasonably be expected to have a Material Adverse Effect; and (v) Sellers have used commercially reasonable efforts to make copies of the Material IP Licenses available to Buyer.


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3.6 Brokerage. No Person is entitled to any brokerage commissions, finders’ fees, or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of Sellers or any of their respective Affiliates.

3.7 Export Controls. All of the Acquired Assets are controlled by the Department of Commerce under the Export Administration Regulations and are classified as “EAR99.” Neither Seller holds or possesses any export control, strategic or classified goods, services or technology or embargo license, agreement, permit, approval, security clearance or other authorization issued by any U.S. Government or any foreign Government. Except for that certain Loan Agreement and Reimbursement Agreement, dated as of April 22, 2010, by and between Sellers and the United States Department of Energy, and the documents and agreements related thereto, neither Seller is a party to any Contract or sub-contract with any U.S. Government (“Government Contract”), nor is any Seller a party to any sub-contract under any Government Contract.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Sellers as follows:

4.1 Corporate Organization. Buyer is a corporation duly organized, validly existing and in good standing under the Laws of the State of Kentucky and has all requisite organizational power and authority to own its properties and assets and to conduct its business as now conducted.

4.2 Authorization and Validity. Buyer has all requisite organizational power and authority to execute and deliver this Agreement and any Ancillary Agreement to which it is or will be a party and subject to the Bankruptcy Court’s entry of the Sale Order, Buyer has the requisite corporate power and authority to perform and carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution, delivery and consummation of this Agreement and the Ancillary Agreements by Buyer and the performance by Buyer of its obligations hereunder and thereunder have been duly authorized and approved by all necessary action by the board of directors of Buyer and no other organizational proceedings on the part of any Buyer is necessary to authorize such execution, delivery and performance. This Agreement has been duly executed by Buyer, and the Ancillary Agreements when delivered will be duly executed by Buyer, and constitute or will constitute Buyer’s valid and binding obligation, enforceable against it in accordance with the terms herein and therein, except that such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar Laws affecting or relating to the enforcement of creditors’ rights generally, and is subject to general principles of equity.

4.3 Litigation. There are no material actions, suits, proceedings or orders pending or, to Buyer’s knowledge, threatened against Buyer at law or in equity, or before or by any Government relating to this Agreement or the transactions contemplated hereby.

4.4 No Conflict or Violation. The execution, delivery and performance by Buyer of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby do not and will not (a) violate or conflict with any


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provision of the certificate of incorporation or bylaws of Buyer, (b) violate in any material respect any provision of Law, or any Order applicable to Buyer or (c) result in a breach of or constitute (with due notice or lapse of time or both) a default under any material contract to which Buyer is a party, by which it is bound or to which any of its properties or assets is subject.

4.5 Consents, Approvals and Notifications. The execution, delivery and performance by Buyer of this Agreement and the Ancillary Agreements to which Buyer is or will be a party do not require the Consent of, or filing with or notification of, any Government or any other Person except as required for entry of the Sale Order by the Bankruptcy Court or for such Consents and filings, the failure to obtain or make would not reasonably be expected to have a material adverse effect on the ability of Buyer to consummate the transactions contemplated hereby.

4.6 Availability of Funds. Buyer has, and on and after the Closing Date will have, sufficient funds available to make the payments required to be made by it pursuant to this Agreement and to perform its obligations hereunder.

4.7 Adequate Assurances Regarding Assigned Contracts. Buyer is and will be capable of satisfying the conditions contained in Sections 365(b)(1)(C) and 365(f) of the Bankruptcy Code with respect to the Assigned Contracts.

4.8 Brokerage. No Person is entitled to any brokerage commissions, finders fees, expenses or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of Buyer or any of its Affiliates.

ARTICLE 5 COVENANTS OF SELLERS

Sellers hereby covenant to Buyer as follows:

5.1 Actions Before Closing Date. Without the prior written consent of Buyer (such consent not to be unreasonably withheld, conditioned or delayed) or the authorization of the Bankruptcy Court after notice and a hearing, between the date hereof through the earlier of the Closing Date or the date this Agreement is terminated in accordance with its terms, and except as required or expressly permitted pursuant to the terms hereof or of any Ancillary Agreement or as set forth on Schedule 5.1, Sellers shall not (a) sell, assign, transfer, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any of the Acquired Assets, IP Licenses, or any other of the properties, assets or equipment (except in all cases for Permitted Liens described in Section (c) of the definition of such term herein that attach prior to the Closing and that are yet not due and payable prior to the Closing), (b) sell, assign, transfer, lease, sublease, mortgage, pledge, otherwise encumber or dispose of or grant any third party any right to any of the Owned IP (except in all cases for Permitted Liens described in Section (c) of the definition of such term herein that attach prior to the Closing and that are yet not due and payable prior to the Closing), (c) acquire by merging or consolidating with, or agreeing to merge or consolidate with, or purchase substantially all the assets of, or otherwise acquire any business or any corporation, partnership, association or other business organization or division thereof, (d) fail to use commercially reasonable efforts to maintain adequate security at locations in California and


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Delaware where material Acquired Assets are located or (e) enter into any Contract to take any action prohibited by any of the preceding clauses of this Section 5.1. Promptly after the execution of this Agreement, Sellers shall use commercially reasonable efforts to deliver to Buyer a complete and correct list (x) of all material Permits (including Environmental Permits) and all pending applications therefor obtained by either Seller necessary to the operation of the Long-Term Business, (y) of all Material IP Licenses and (z) each warehouse, port or other location (other than the Real Property) where Inventory is located, as well as any Contract or Real Property Lease relating to Sellers’ use of such location. For all purposes of this Agreement, the “reasonable best efforts” and “commercially reasonable efforts” of Sellers, in each case, will be interpreted with due consideration for the circumstances and status of Sellers at the applicable time (including after the Closing), including the assets, employees and other resources (or absence thereof) of Sellers and the status of the Sellers as debtors under the Seller Chapter 11 Cases.

5.2 Obligations of Sellers after Entry of Sale Order. From and after the date that the Sale Order is entered, Sellers shall use reasonable best efforts to cause the Closing to occur as promptly as practicable, and Sellers shall not intentionally take any action that is reasonably likely to prevent or delay the consummation of the transactions contemplated hereby unless otherwise required by the Bankruptcy Court or Law. The “reasonable best efforts” of Sellers shall not require Sellers or any of their Related Persons to expend any money to remedy any breach of any representation or warranty hereunder, to commence any litigation or arbitration proceeding, to offer or grant any accommodation (financial or otherwise) to any third party, to obtain any Consent required for the consummation of the transactions contemplated hereby or to provide financing to Buyer for the consummation of the transactions contemplated hereby; provided that, if Sellers or any of their Affiliates elect to remedy such breach, Sellers shall not be deemed to be in breach of such representation or warranty, or in violation of any covenant, for purposes of determining Buyer’s obligations to consummate the transactions contemplated by this Agreement.

5.3 Access to Properties and Records; Confidentiality. Prior to the earlier to occur of the Closing Date or the date on which this Agreement is terminated in accordance with its terms, Sellers shall afford to Buyer and to the accountants, counsel and representatives of Buyer, reasonable access during normal business hours and upon reasonable notice to all books and records and selected personnel of Sellers to the extent Buyer shall reasonably deem necessary and desirable if (a) permitted under Law, (b) such books and records are not subject to confidentiality agreements that would be violated by such access and (c) disclosing such books and records would not reasonably be expected to adversely affect any attorney client privilege, work product or similar privilege. Such access shall be exercised in such a manner as not to interfere unreasonably with the operation of the Sellers. In no event shall any environmental due diligence be conducted by Buyer that would violate the terms and conditions of the Brownfields Development Agreement.

5.4 Rejection of Assigned Contracts. Except as provided in Section 1.5, Sellers shall not reject any Assigned Contracts pursuant to the Seller Chapter 11 Cases without the prior written consent of Buyer.


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5.5 Further Assurances. Upon the request and at the sole expense of Buyer at any time after the Closing Date (but without additional consideration), Sellers shall execute and deliver such documents as Buyer or their counsel may reasonably request to effectuate the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, if at any time on or after the Closing, Sellers or any of their respective Affiliates or Related Persons comes into possession or control of any Acquired Assets, Sellers shall promptly but in no event later than ten (10) Business Days after coming into possession or control, deliver (or cause to be delivered) all of Sellers’ right, title and interest to such Acquired Assets to Buyer for no additional consideration in accordance with the terms of this Agreement.

ARTICLE 6 COVENANTS OF BUYER

Buyer hereby covenants to Sellers as follows:

6.1 Actions Before Closing Date. From and after the date the Sale Order is entered, Buyer shall use reasonable best efforts to cause the Closing to occur as promptly as practicable and Buyer shall not, and shall not permit any of their respective Affiliates to, intentionally take any action that is reasonably likely to prevent or delay the consummation of the transactions contemplated hereby. The “reasonable best efforts” of Buyer shall not require Buyer or any of its Affiliates to expend any money to remedy any breach of any representation or warranty hereunder, to commence any litigation or arbitration proceeding or to offer or grant any accommodation (financial or otherwise) to any third party; provided that, if Buyer or any of their Affiliates elect to remedy such breach, Buyer shall not be deemed to be in breach of such representation or warranty, or in violation of any covenant, for purposes of determining Sellers’ obligations to consummate the transactions contemplated by this Agreement. The “reasonable best efforts” of Buyer shall require Buyer, beginning on the date of this Agreement until the earlier of the termination of this Agreement or the Closing, to reasonably promptly respond (or instruct Buyer’s counsel to reasonably promptly respond) to Sellers’ reasonable requests and inquiries with respect to matters relating to this Agreement, including with respect to the closing conditions set forth in Article 9, and to work diligently (and to instruct Buyer’s counsel to work diligently) on all pre-Closing actions required by this Agreement and in preparing all items required for the Closing, including the closing deliveries set forth in Sections 2.3 and 2.4.

6.2 Consents. Buyer acknowledges that certain Consents to the transactions contemplated by this Agreement may be required from parties to Contracts to which Sellers or their Affiliates are party and that such Consents have not been obtained and may not be obtained. Buyer agrees that neither Sellers nor any of their Affiliates nor any of their respective Related Persons in their respective capacities as such shall have any liability whatsoever to Buyer (and Buyer shall not be entitled to assert any claims) arising out of or relating to the failure to obtain any Consents that may have been, or may be, required in connection with the transactions contemplated by this Agreement, or because of the default, acceleration or termination of or loss of right under any such Contract as a result of such failure. Buyer further agrees that except as provided in Section 9.3(d), no representation, warranty or covenant of Sellers contained herein shall be breached or deemed breached and no condition of Buyer shall be deemed not to be satisfied as a result of the failure to obtain any Consent, as a result of any default, acceleration or termination or loss of right resulting from such failure, or as a result of any lawsuit, action,


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claim, proceeding or investigation commenced or threatened by or on behalf of any Person arising out of or relating to the failure to obtain any Consent or any default, acceleration or termination or loss of right resulting from such failure. Subject to the foregoing, at Buyer’s written request prior to the Closing, if such Consent is required notwithstanding the provisions of Section 365 of the Bankruptcy Code, the Parties shall use their commercially reasonable efforts to cooperate and to obtain any such Consents and any Consents with respect to any Real Property Lease or Permit; provided that such efforts shall not include any requirement of any Party or any of their Affiliates to expend money, commence any litigation or arbitration proceeding or offer or grant any accommodation (financial or otherwise) to any Person. The Parties will use their commercially reasonable efforts to cooperate and to either (a) obtain a Consent to assignment, in form and substance reasonably satisfactory to Buyer, to the transactions contemplated hereby with respect to (i) the Amended and Restated Trademark License, Dated as of September 4, 2008, between Fisker Automotive, Inc. and Fisker Coachbuild, LLC and (ii) the Amended and Restated Supply Agreement between Quantum Fuel Systems Technologies and Fisker Automotive, Inc. dated November 8, 2010 and the Powertrain Development Agreement between Quantum Fuel Systems Technologies Worldwide, Inc. and Fisker Automotive, Inc. dated January 25, 2008 (together with (i), the “Required Agreements”), or (b) entry of an Order of the Bankruptcy Court (or other court of competent jurisdiction) in form and substance reasonably acceptable to the Buyer authorizing the Sellers’ assignment of the Required Agreements to the Buyer and the Buyer’s assumption thereof pursuant to Section 365 of the Bankruptcy Code; provided, that Buyer will be responsible for any Cure Costs related to the Required Agreements; provided further that the Parties’ efforts shall not include any requirement of any Party or any of their Affiliates to expend money, commence any litigation or arbitration proceeding or offer or grant any accommodation (financial or otherwise) to any Person, except to the extent of filing and arguing a motion seeking the Order contemplated by clause (b) above and except for Cure Costs to be paid by the Buyer.

6.3 Adequate Assurances Regarding Assigned Contracts. With respect to each Assigned Contract, to the extent requested by the Bankruptcy Court or reasonably requested by Sellers or the counterparty to such Contract, Buyer shall provide the Bankruptcy Court, Sellers or such counterparty, as the case may be, adequate assurance of the future performance of such Assigned Contract by Buyer.

6.4 Cure of Defaults. Buyer shall, on or prior to the assumption by Buyer of any Assumed Real Property Lease or Assigned Contract, cure any and all defaults under such Assumed Real Property Lease or Assigned Contract that are required to be cured under the Bankruptcy Code, so that such Assumed Real Property Lease or Assigned Contract may be assumed by Sellers and assigned to Buyer in accordance with the provisions of Section 365 of the Bankruptcy Code.

6.5 Availability of Business Records. After the Closing Date, Buyer shall provide to Sellers and their Affiliates (after reasonable notice and during normal business hours and without charge to Sellers or their Affiliates) access to all Business Records related to the Long-Term Business or the Acquired Assets or Assumed Liabilities for periods prior to the Closing and shall preserve such Business Records until six (6) years after the Closing Date. Such access includes access to any information in electronic or digital form to the extent reasonably available and the right to photocopy or make electronic or digital copies. Buyer acknowledges that Sellers and


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their Affiliates have the right to retain copies of Business Records for periods prior to the Closing. Prior to destroying any Business Records for periods prior to the Closing, Buyer shall notify Sellers thirty (30) days in advance of any such proposed destruction of its intent to destroy such Business Records, and Buyer will permit Sellers (or their designee) to retain such Business Records (at Sellers’ or such designee’s sole cost and expense). With respect to any litigation and Claims that are Excluded Liabilities, Buyer shall (at Sellers’ sole cost and expense) render all reasonable assistance that Sellers may request in defending such litigation or claim and shall make available to Sellers, their counsel and their other agents, advisors or representatives, Buyer’s personnel most knowledgeable about the matter in question. The Parties acknowledge that all Business Records are Acquired Assets to be acquired by Buyer at the Closing. If, after the Closing, Buyer (or any Affiliate or creditor of Buyer) receives any payment or revenue that belongs to Sellers pursuant to this Agreement or any Ancillary Agreement, Buyer shall promptly remit or cause to be remitted the same to Sellers without set-off or deduction of any kind or nature. If after the Closing, Sellers (or any Affiliate of or successor to Sellers) receive any payment or revenue that belongs to Buyer pursuant to this Agreement or any Ancillary Agreement, Sellers shall promptly remit or cause to be remitted the same to Buyer without set-off or deduction of any kind or nature.

6.6 Buyer’s Obligation to Perform; Cooperation with Sellers’ Enforcement of Rights. Buyer shall pay, perform and discharge all Assumed Liabilities when due or obligated and will indemnify and hold Sellers, each of their Affiliates and each of their respective Related Persons in their respective capacities as such harmless for any and all damages, fines, judgments, costs or expenses (including reasonable attorneys’ fees) suffered by any of them from any breach of the covenants and agreements of Buyer in this Section 6.6.

6.7 Further Assurances. Upon the request and at the sole expense of Sellers at any time after the Closing Date (but without additional consideration), Buyer shall execute and deliver such documents as Sellers or their counsel may reasonably request to effectuate the transactions contemplated by this Agreement. Without limiting the foregoing, if at any time on or after the Closing Buyer, or any of its Affiliates, comes into possession or control of any Excluded Assets, Buyer shall promptly but in no event later than ten Business Days after coming into possession or control, return (or cause to be returned) such Excluded Assets to Sellers for no additional consideration.

6.8 Employment Matters; Cooperation Regarding Service Providers and Employee Matters.

(a) At least two (2) Business Days prior to the anticipated Closing Date, Buyer will notify Sellers of the identity of the employees of Sellers to whom Buyer (or, in Buyer’s discretion, one (1) or more Affiliates of Buyer) intends in its sole and absolute discretion to offer employment, if any (each, a “Specified Employee” and together, the “Specified Employees”), such offers to be made no later than one (1) day prior to the Closing Date and to be effective as of the Closing Date. Each such offer of employment shall be subject to such compensation and other terms and conditions of employment as Buyer shall determine in their sole and absolute discretion. Neither Buyer nor any of its Affiliates has any obligation hereunder or otherwise to offer employment, or any given terms and conditions of employment, to any employee or other Related Person of Sellers.


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Each such Specified Employee who timely accepts an offer of employment from Buyer or an Affiliate of Buyer within such time period and in such manner as may be required by Buyer or such applicable Affiliate in their respective discretion, and who is hired by and commences working for Buyer or an Affiliate of Buyer as provided in such offer, is referred to herein as a “Transferred Employee”. Nothing in this Section 6.8 shall (a) be treated or construed as an amendment of, or undertaking to amend, any benefit plan or (b) be construed to prohibit Sellers or any of Sellers’ Affiliates from amending or terminating any benefit plan. The provisions of this Section 6.8 are solely for the benefit of the respective parties to this Agreement, and nothing in this Section 6.8, express or implied, shall confer upon any current, former or future employee or other Related Person of Sellers or any of Sellers’ Affiliates, or legal representative or beneficiary thereof or other Person, any rights or remedies, including any right to employment or continued employment with Buyer or any of their Affiliates for any specified period, or compensation or benefits or other terms and conditions of employment of any nature or kind whatsoever under this Agreement, or a right in any employee or beneficiary of such employee or other Person under an Employee Benefit Plan that such employee, beneficiary or other Person would not otherwise have under the terms of such plan.

(b) Subject to applicable Laws, Sellers shall cooperate with Buyer and shall permit Buyer or, as applicable, one or more Affiliates of Buyer a reasonable period during normal business hours prior to the Closing Date, (i) to meet with employees and other service providers at such times as Buyer or any of their respective Affiliates shall reasonably request, (ii) to speak with such employees’ and other service providers’ managers and supervisors (in each case with appropriate authorizations and releases from such service providers) who are being considered for employment by Buyer or any of their respective Affiliates, (iii) to distribute to such employees and other service providers such forms and other documents relating to potential employment by or services to Buyer or any of their respective Affiliates after the Closing and (iv) subject to any restrictions imposed under applicable Law, to permit Buyer, upon request, to review personnel files and other relevant employment information regarding such employees and other service providers.

(c) Following the Closing, Sellers and Buyer shall cooperate reasonably with each other to provide an orderly administrative transition to Buyer or, as applicable, one or more Affiliates of Buyer of the Transferred Employees, including the provision by Sellers to Buyer of all necessary or appropriate documents, records, materials, accounting files and Tax information with respect to each Transferred Employee to the extent available to and under the control of Sellers. To the extent information (including personnel records) about past, present or future employees of Sellers is in Buyer’s possession after the Closing, Buyer will maintain its confidentiality in material compliance with applicable Law.

ARTICLE 7 BANKRUPTCY PROCEDURES

7.1 Bankruptcy Actions. Upon completion of the Auction and provided Buyer is the Successful Bidder (as defined in the Bidding Procedures) at the Auction, or if no Auction is held


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pursuant to the terms of the Bidding Procedures, the Sellers shall seek the entry of an Order of the Bankruptcy Court substantially in the form attached hereto as Exhibit H and otherwise reasonably acceptable to Sellers and Buyer (the “Sale Order”). Sellers shall use commercially reasonable efforts to (i) file all pleadings with the Bankruptcy Court as are necessary or appropriate to secure entry of the Bidding Procedures Order and, upon completion of the Auction and provided Buyer is the Successful Bidder, or if no Auction is held pursuant to the terms of the Bidding Procedures, the Sale Order and (ii) cause the Bidding Procedures Motion to be served on the parties entitled to notice thereof pursuant to the Bankruptcy Code and the Rules, and shall diligently pursue the entry of the Bidding Procedures Order and entry of the Sale Order by the Bankruptcy Court. Buyer shall use commercially reasonable efforts to support the Bidding Procedures Motion and to obtain the Bankruptcy Court’s entry of the Bidding Procedures Order and, as applicable, the Sale Order or any other Order reasonably necessary in connection with the transactions contemplated by this Agreement and the Ancillary Agreements. Furthermore, Buyer covenants and agrees to cooperate with Sellers in connection with furnishing information or documents to Sellers to satisfy the requirements of adequate assurance of future performance under Section 365 of the Bankruptcy Code.

7.2 Bidding Procedures. The bidding procedures (the “Bidding Procedures”) to be employed with respect to this Agreement and the Auction, if any, are those attached as Exhibit 1 to the Bidding Procedures Order.

7.3 Approval. At the Sale Hearing, if Buyer is the successful bidder at the Auction (or if no Auction is held in accordance with the terms of the Bidding Procedures Order), Sellers shall immediately seek the entry of the Sale Order.

7.4 Plan Consideration. Upon approval of a disclosure statement that is not materially inconsistent with the Plan and confirmation of the Plan by the Bankruptcy Court, Sellers shall (i) contribute the Equity Consideration to the Liquidation Trust on the terms and conditions set forth herein and in the Plan; and (ii) contribute the Designated Causes of Action to the Liquidation Trust on the terms and conditions set forth in the Plan, provided however, that (x) the Designated Affiliate shall be entitled to up to $5,000,000 from the first proceeds realized from the Designated Causes of Action to reimburse the Designated Affiliate for fifty (50%) percent of any amounts actually paid by the Designated Affiliate or its subsidiaries to satisfy, or reduce the amount of, any indebtedness arising prior to the Closing and secured by a Permitted Lien described in sections (b) through (f) of the definition of such term herein and which Buyer is not otherwise obligated to pay or satisfy under this Agreement and (y) 40% of any remaining proceeds realized from the Designated Causes of Action shall be payable to the Designated Affiliate until the DIP Payment Amount has been repaid in full.

ARTICLE 8 TAXES AND FEES

8.1 Taxes Related to Purchase of Assets. All state and local sales, use, gross-receipts, transfer, gains, excise, value-added or other similar Taxes incurred in connection with the transfer of the Acquired Assets and the assumption of the Assumed Liabilities, and all recording and filing fees that may be imposed by reason of the sale, transfer, assignment and delivery of the Acquired Assets and the assumption of the Assumed Liabilities (collectively, “Transaction


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Taxes”), shall be paid by Buyer on or prior to their due date and Buyer shall indemnify, defend and hold harmless Sellers and their Affiliates (and its and their Related Persons) from and against any and all liability for the payment of such Transaction Taxes and the filing of any Tax Returns related thereto. Buyer and Sellers shall cooperate in providing each other Party with transfer tax declarations or any appropriate resale exemption certifications and other similar documentation to qualify for exemption from, or reduction of, any Transaction Taxes. For the avoidance of doubt, Transaction Taxes shall not include any Taxes that are computed on the basis of, or by reference to, Sellers’ gross or net income, overall gross receipts, or capital.

8.2 Cooperation on Tax Matters. Sellers shall, until the earlier of (a) ten (10) years following the Closing and (b) the liquidation of the Sellers (but in no event for less than sixty (60) days following the Closing), and Buyer shall (and shall cause its Affiliates to), use their commercially reasonable efforts to cooperate with each other and make available or cause to be made available to each other for consultation, inspection and copying (at such other Party’s expense), in a timely fashion, such personnel, Tax data, relevant Tax Returns or portions thereof and filings, files, books, records, documents, financial, technical and operating data, computer records and other information as may be reasonably required (x) for the preparation by such other Party or its Affiliates of any Tax Returns or (y) in connection with any Tax audit or proceeding including one Party (or an Affiliate thereof) to the extent such Tax audit or proceeding relates to or arises from the transactions contemplated by this Agreement. Before disposing of any such records or information, Sellers shall give notice to Buyer and Buyer shall be entitled to take delivery of any or all such records and information.

8.3 Allocation of Purchase Price and Purchase Price Allocation Forms. The Purchase Price, the Assumed Liabilities and other relevant items shall be allocated among the Acquired Assets in accordance with Section 1060 of the Code. Buyer shall prepare and deliver to Sellers an allocation schedule setting forth Buyer’s determination of the allocation (the “Allocation Schedule”) within ninety (90) days after Closing Date. The Allocation Schedule shall identify the transferor and transferee thereof and shall be prepared in accordance with Treas. Reg. Section 1.1060-1 (or any comparable provision of state or local Tax Law) or any successor provision. The Allocation Schedule delivered by Buyer shall be subject to Sellers’ reasonable comments and to approval of Sellers, which shall not be unreasonably withheld, conditioned or delayed. The Parties on behalf of themselves and their respective Affiliates agree that they will report the federal, state, local and other Tax consequences of the purchase and sale hereunder (including in filings on IRS Form 8594) in a manner consistent with such allocation and that they will not take any position inconsistent therewith in connection with any Tax Return, refund claim, litigation or otherwise, unless and to the extent required to do so pursuant to applicable Law. Notwithstanding any other provision of this Agreement, this Section 8.3 survives any termination or expiration of this Agreement.

8.4 Tax Adjustments. Taxes (other than Transaction Taxes and other than Taxes assumed by Buyer pursuant to Section 1.3(f)(ii)) imposed upon or assessed directly against the Acquired Assets for the Tax period in which the Closing occurs (the “Proration Period”) will be apportioned and prorated between Sellers and Buyer as of the Closing Date with Buyer bearing the expense of Buyer’s proportionate share of such Taxes which shall be equal to the product obtained by multiplying (i) a fraction, the numerator being the amount of the Taxes and the denominator being the total number of days in the Proration Period, times (ii) the number of days


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in the Proration Period following the Closing Date, and Sellers shall bear the remaining portion of such Taxes. If the precise amount of any such Tax cannot be ascertained on the Closing Date, apportionment and proration shall be computed on the basis of the amount payable for each respective item during the Tax period immediately preceding the Proration Period and any proration shall be adjusted thereafter on the basis of the actual charges for such items in the Proration Period. When the actual amounts become known, such proration shall be recalculated by Buyer and Sellers, and Buyer or Sellers, as the case may be, promptly (but not later than ten (10) days after notice of payment due and delivery of reasonable supporting documentation with respect to such amounts) shall make any additional payment or refund so that the correct prorated amount is paid by each of Buyer and Sellers. For purposes of this Section 8.4, Buyer shall include the Designated Affiliate (and its subsidiaries as applicable).

ARTICLE 9 CONDITIONS PRECEDENT TO PERFORMANCE BY PARTIES

9.1 Conditions Precedent to Performance by Sellers and Buyer. The respective obligations of Sellers and Buyer to consummate the transactions contemplated by this Agreement are subject to the satisfaction or waiver by Buyer and Sellers, on or prior to the Closing Date, of the following conditions:

(a) Sale Order. The Bankruptcy Court shall have entered the Sale Order, and such Sale Order shall be in effect on the Closing Date and (i) shall not have been stayed, reversed, stayed pending appeal or vacated and (ii) shall not have been amended, supplemented or otherwise modified without the Parties’ consent (such consent not to be unreasonably withheld, conditioned, or delayed).

(b) No Violation of Orders. No preliminary or permanent injunction or other Order that declares this Agreement invalid or unenforceable in any material respect or that prevents the consummation of the transactions contemplated hereby or thereby shall be in effect on the Closing Date.

(c) No Proceeding. No action or proceeding shall be pending before any Government seeking or threatening to restrain or prohibit the consummation of the transactions contemplated by this Agreement or involving a claim that consummation thereof would result in the violation of any Law of any Government having appropriate jurisdiction.

(d) No Termination of Agreement. This Agreement shall not have been terminated in accordance with Article 10.

(e) Equity Consideration. Definitive documentation of the terms of the Equity Consideration shall be substantially on the terms set forth in Exhibit A and otherwise reasonably satisfactory to Buyer and the Committee.

Any condition specified in this Section 9.1 may be waived only by written instrument executed by Buyer and Sellers.


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9.2 Conditions Precedent to Performance by Sellers. The obligations of Sellers to consummate the transactions contemplated by this Agreement are subject to the satisfaction, on or before the Closing Date, of the following conditions, any one or more of which may be waived by Sellers in their sole discretion in a written instrument executed and delivered by Sellers:

(a) Representations and Warranties of Buyer. Each of the representations and warranties contained in Article 4 of this Agreement (other than the Buyer Fundamental Representations) shall be true and correct (without taking into account materiality qualifications) as of the Closing Date as if made anew as of such date (except to the extent any such representation and warranty expressly relates to an earlier date, in which case as of such earlier date), except for any failure of such representations and warranties to be true and correct as does not have, individually or in the aggregate, a Buyer Material Adverse Effect, and each of the Buyer Fundamental Representations shall be true and correct as of the Closing Date as if made anew as of such date, and Sellers shall have received on the Closing Date a certificate from Buyer in the applicable form attached hereto as Exhibit I dated as of the Closing Date and signed by a duly authorized signatory of Buyer to that effect.

(b) Performance of the Obligations of Buyer. Buyer shall have performed in all material respects all obligations required under this Agreement to be performed by it on or before the Closing Date (except with respect to the obligation to pay the Purchase Price in accordance with the terms of this Agreement, which obligation shall be performed in all respects as required under this Agreement), and Sellers shall have received on the Closing Date a certificate from Buyer in the applicable form attached hereto as Exhibit I dated the Closing Date and signed by a duly authorized signatory of Buyer to that effect.

(c) Cure of Defaults. Buyer shall have, at or prior to the Closing, cured any and all defaults under the Assigned Contracts that are required to be cured under the Bankruptcy Code or shall have made adequate provision for the payment of such Cure Amounts at the later of (i) the Closing and (ii) the date on which the assignment of such Assigned Contracts becomes effective, and shall have provided all assurances of future performance required to be provided by Buyer hereunder, so that the Assigned Contracts may be assumed by Sellers and assigned to Buyer in accordance with the provisions of Section 365 of the Bankruptcy Code and the terms of the Bidding Procedures Order and the Sale Order.

(d) Buyer’s Deliveries. Buyer shall have delivered to Sellers all of the items set forth in Section 2.4.

9.3 Conditions Precedent to Performance by Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to the satisfaction, on or before the Closing Date, of the following conditions, any one or more of which may be waived by Buyer in its sole discretion in a written instrument executed and delivered by Buyer:


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(a) Representations and Warranties of Sellers. Each of the representations and warranties contained in Article 3 of this Agreement (other than the Seller Fundamental Representations) shall be true and correct (without taking into account materiality qualifications) as of the Closing Date as if made anew as of such date (except to the extent any such representation and warranty expressly relates to an earlier date, in which case as of such earlier date), except for failure of such representations and warranties to be true and correct as does not have, individually or in the aggregate, a Material Adverse Effect, and each of the Seller Fundamental Representations shall be true and correct as of the Closing Date, and Buyer shall have received on the Closing Date a certificate in the form attached hereto as Exhibit J dated as of the Closing Date and signed by a duly authorized signatory of each of Sellers to that effect.

(b) Performance of the Obligations of Sellers. Sellers shall have performed in all material respects all obligations required under this Agreement to be performed by them on or before the Closing Date, and Buyer shall have received on the Closing Date a certificate in the form attached hereto as Exhibit J dated as of the Closing Date and signed by a duly authorized signatory of each of Sellers to that effect.

(c) CFIUS. CFIUS has not indicated that Buyer or Sellers may not close the transactions contemplated herein or requested that the closing of the transactions contemplated by this Agreement be delayed.

(d) Necessary Consents. Sellers shall have obtained either (i) a Consent to assignment, in form and substance reasonably satisfactory to Buyer, to the transactions contemplated hereby with respect to each of the Required Agreements, or (ii) entry of an Order of the Bankruptcy Court (or other court of competent jurisdiction) in form and substance reasonably acceptable to the Buyer authorizing the Sellers’ assignment of the Required Agreements to Buyer and Buyer’s assumption thereof pursuant to Section 365 of the Bankruptcy Code; provided, that Buyer will be responsible for any Cure Costs related to the Required Agreements.

(e) Material Adverse Effect. Since November 22, 2013, no Material Adverse Effect shall have occurred and be continuing (as determined on the Closing Date).

(f) Sellers’ Deliveries. Sellers shall have delivered to Buyer all of the items set forth in Section 2.3(a) of this Agreement.

(g) Governmental Consents. The Parties shall have received all material approvals and actions of or by all Governments that are necessary to consummate the transactions contemplated hereby to the extent necessary so as not to constitute a Material Adverse Effect.

9.4 Waiver of Condition; Frustration of Conditions. All conditions to the Closing shall be deemed to have been satisfied or waived from and after the Closing. Neither Buyer nor Sellers may rely on the failure of any condition set forth in this Article 9, as applicable, to be satisfied if such failure was caused by such Party’s failure to use, as required by this Agreement, its reasonable best efforts to consummate the transactions contemplated hereby.


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ARTICLE 10 TERMINATION AND EFFECT OF TERMINATION

10.1 Right of Termination. Notwithstanding anything to the contrary contained herein, this Agreement may be terminated only as provided in this Article 10. In the case of any such termination, the terminating Party shall give notice to the other Parties specifying the provision pursuant to which this Agreement is being terminated.

10.2 Termination. This Agreement may be terminated at any time before Closing:

(a) by mutual written consent of Sellers and Buyer;

(b) by Buyer, on any date that is more than sixty (60) days after the date hereof (the “Termination Date”), if the Closing has not then occurred; provided, however, that Buyer shall have no right to terminate this Agreement under this Section 10.2(b) if Buyer’s failure to fulfill any of its obligations under this Agreement is the reason that the Closing has not occurred on or before said date;

(c) by Sellers, on or after the Termination Date, if any condition contained in Section 9.1 or Section 9.2 has not been satisfied or waived as of such time; provided, however, that Sellers shall have no right to terminate this Agreement under this Section 10.2(c) if Sellers’ failure to fulfill any of their respective obligations under this Agreement is the reason that the Closing has not occurred on or before said date;

(d) by Buyer, if Buyer is the Successful Bidder (as such term is defined in the Bidding Procedures Order) at the Auction and the Sale Hearing has not been commenced on or prior to the earlier of the fifth Business Day after the completion of the Auction and the date specified in the Bidding Procedures Order; provided that the failure to commence the Sale Hearing on or prior to such time is not the result of or caused by Buyer’s material breach of this Agreement;

(e) by Buyer, if the Bankruptcy Court shall fail to enter the Sale Order on or prior to the date that is forty-five (45) days after the date hereof; provided that the failure to obtain the entry of the Sale Order is not the result of or caused by Buyer’s material breach of this Agreement;

(f) by Buyer, if the Seller Chapter 11 Cases are dismissed or converted to liquidation proceedings under Chapter 7 of the Bankruptcy Code, or if Sellers shall have filed a pleading requesting any such relief;

(g) by either Sellers or Buyer if (i) the Auction has occurred and Buyer was not the Successful Bidder at the Auction or (ii) the Bankruptcy Court otherwise approves a Competing Transaction;

(h) by either Buyer or Sellers, immediately upon an Order becoming final and non-appealable that declares this Agreement invalid or unenforceable in any material respect or that prevents the consummation of the transactions contemplated hereby or thereby (a “Termination Order”); provided, however, that neither Sellers nor Buyer shall


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have the right to terminate this Agreement pursuant to this Section 10.2(h) if such Party or any of its Affiliates has sought entry of, or has failed to use its reasonable best efforts to oppose entry of, such Termination Order;

(i) by Buyer, in the event (i) of any material inaccuracy in any of Sellers’ representations or warranties contained in this Agreement or any material breach of any of Sellers’ covenants or agreements contained in this Agreement, which, individually or in the aggregate with all other such inaccuracies and breaches, (A) would result in a failure of a condition set forth in Section 9.3, and (B) is either incapable of being cured or, if capable of being cured, is not cured in all material respects within the earlier of (x) ten (10) calendar days after written notice thereof and (y) the Termination Date, or (ii) since the date of this Agreement, a Material Adverse Effect shall have occurred and be continuing (as determined on the date of such termination); provided that the right of termination pursuant to this Section 10.2(i) shall not be available to Buyer at any time that Buyer has violated or is in breach of any covenant, representation or warranty hereunder if such breach has prevented satisfaction of Sellers’ conditions to Closing hereunder and has not been waived by Sellers or, if capable of cure, has not been cured by Buyer;

(j) by Sellers, in the event of any material inaccuracy in any of Buyer’s representations or warranties contained in this Agreement or any material breach of any of Buyer’s covenants or agreements contained in this Agreement, which, individually or in the aggregate with all other such inaccuracies and breaches, (i) would result in a failure of a condition set forth in Section 9.2, and (ii) is either incapable of being cured or, if capable of being cured, is not cured in all material respects within the earlier of (x) ten (10) calendar days after written notice thereof and (y) the Termination Date; provided that the right of termination pursuant to this Section 10.2(j) shall not be available to Sellers at any time that Sellers have violated or are in breach of any covenant, representation or warranty hereunder if such breach has prevented satisfaction of Buyer’s conditions to Closing hereunder and has not been waived by Buyer or, if capable of cure, has not been cured by Sellers; or

(k) by Sellers, if the Board of Directors of either Seller determines in good faith that continued performance would be inconsistent with the exercise of its fiduciary duties under applicable Law.

10.3 Effect of Termination. In the event of any termination of this Agreement pursuant to Section 10.2, this Agreement (other than the provisions set forth in this Section 10.3, Section 10.4, Section 10.5 and Article 12, which shall survive termination of this Agreement) shall forthwith become null and void and be deemed of no further force and effect and, except as set forth in this Section 10.3 and Section 10.4, none of Sellers, Buyer or any of their respective Related Persons shall have any liability or obligation arising under or in connection with this Agreement.


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10.4 Expense Reimbursement.

(a) If this Agreement is terminated for any reason, other than a termination of this Agreement pursuant to Section 10.2(a), Section 10.2(c), Section 10.2(j) or Section 10.2(k), and Sellers consummate a Competing Transaction within twelve (12) months following such termination, then Sellers shall reimburse Buyer for up to Five Hundred Thousand Dollars ($500,000) of reasonable, documented out-of-pocket fees and expenses of attorneys, accountants and other consultants not previously paid pursuant to Section 12.8 and incurred by Buyer in connection with negotiating and documenting this Agreement and the transactions contemplated hereby, including negotiating and documenting arrangements regarding the formation of the Designated Affiliate and other terms relating to the Equity Consideration and related documentation relating to governance and the rights and obligations of the owners thereof (the “Expense Reimbursement”), which Expense Reimbursement shall be paid no later than one (1) Business Day immediately following the consummation by Sellers of a Competing Transaction.

(b) If this Agreement is terminated pursuant to Section 10.2(k), then Sellers shall pay, or cause to be paid, to Buyer in immediately available funds, the Expense Reimbursement within three (3) Business Days of the date of such termination.

(c) In the event of a termination of this Agreement in the circumstances described in Section Error! Reference source not found. or Section 10.4(a), the Expense Reimbursement shall be the sole and exclusive remedy of Buyer and its Related Persons against Sellers and its Related Persons under this Agreement, and Buyer (on behalf of itself and its Related Persons) hereby irrevocably waives and releases the Seller Parties, as a condition to receipt of the Expense Reimbursement (but, subject to the receipt thereof by Buyer), from any and all statutory, equitable, legal or common law Claims or remedies that Buyer or any of its Related Persons may have against any of the Seller Parties in respect of any breach of or default under this Agreement. For purposes hereof, “Seller Parties” shall mean, collectively, Sellers and any of their respective former, current or future directors, officers, employees, agents, general or limited partners, managers, members, stockholders, Affiliates or assignees or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder, Affiliate or assignee of any of the foregoing and any other Related Persons of either Seller.

(d) Sellers acknowledge and agree that (i) the payment of the Expense (d) Sellers acknowledge and agree that (i) the payment of the Expense Reimbursement is an integral part of the transactions contemplated by this Agreement, (ii) in the absence of Sellers’ obligations to pay the Expense Reimbursement to Buyer, Buyer would not have entered into this Agreement, (iii) time is of the essence with respect to the payment of the Expense Reimbursement and (iv) the Expense Reimbursement shall constitute an administrative expense of Sellers’ bankruptcy estates under Section 503(b)(1)(A) and 507(a)(2) of the Bankruptcy Code. If Sellers fail to take any action reasonably necessary to cause the delivery of the Expense Reimbursement under circumstances where Buyer is entitled to the Expense Reimbursement and, in order to obtain such Expense Reimbursement, Buyer commences a contested matter or


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adversary proceeding in the Seller Chapter 11 Cases which results in a final, non-appealable judgment in favor of Buyer, Sellers shall pay to Buyer, in addition to the Expense Reimbursement, an amount in cash equal to the costs and expenses (including reasonable attorney’s fees) incurred by Buyer in connection with such contested matter or adversary proceeding.

(e) The Parties further acknowledge that the damages resulting from termination of this Agreement under circumstances where Buyer is entitled to the Expense Reimbursement are uncertain and incapable of accurate calculation and that the delivery of the Expense Reimbursement to the Buyer is not a penalty but rather shall constitute liquidated damages in a reasonable amount that will compensate Buyer in the circumstances where Buyer is entitled to the Expense Reimbursement for the efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the Transactions contemplated hereby, and that, without these agreements, Buyer would not enter into this Agreement.

10.5 Release of Deposit Upon Termination. If this Agreement is terminated pursuant to Section 10.2(j), Sellers shall be entitled to receive the Deposit and any interest thereon in accordance with the Escrow Agreement. If this Agreement is terminated for any reason, other than a termination of this Agreement pursuant to Section 10.2(j), Buyer shall be entitled to receive the Deposit and any interest thereon in accordance with the Escrow Agreement. Upon Termination of this Agreement, Buyer and Sellers shall take all actions reasonably required to cause the Deposit and any interest thereon to be released in accordance with this Section 10.5.

ARTICLE 11 ADDITIONAL AGREEMENTS

11.1 Litigation Support. In the event and for so long as any Party or any of its Affiliates actively is contesting or defending against any action, suit, audit, proceeding, hearing, investigation, charge, complaint, claim, or demand in connection with (a) any transaction contemplated by this Agreement or the Ancillary Agreements or (b) any fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction on or prior to the Closing Date involving Sellers or the Long-Term Business, the other Parties will cooperate with the contesting or defending Person and its counsel in the contest or defense, make available its personnel, and provide such testimony and access to its books and records as shall be necessary in connection with the contest or defense, all at the sole cost and expense of the contesting or defending Person; provided that no Party shall be obligated to provide such cooperation to the extent such cooperation would reasonably be expected to (w) be prohibited by Law, (x) violate any existing confidentiality obligations, (y) waive any attorney client, work product or other legal privilege or (z) take a position adverse to such Party or any of its former, current or future directors, officers, employees, agents, general or limited partners, managers, members, stockholders, Affiliates or assignees. The obligations in this Section 11.1 shall not apply if the contesting or defending Person is entitled to indemnification therefor pursuant to this Agreement.


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11.2 Insurance Matters. To the extent any of the insurance policies maintained by Sellers or any of their Affiliates related (“Sellers’ Insurance Policies”) permit claims to be made thereunder with respect to losses incurred by Buyer or with respect to any of the Acquired Assets or the Assumed Liabilities after the Closing, Buyer shall have the right (but not the obligation) to submit and pursue claims under Sellers’ Insurance Policies with respect to such post-Closing losses.

11.3 Name Change. No later than five Business Days after the Closing Date, each Seller shall file amendments with the appropriate Government changing its name to a name that does not contain the word “Fisker” or any other registered or applied-for trademark or trade name included in the Owned IP transferred by Sellers to Buyer hereunder (the “Restricted Names”). No later than thirty days after the Closing Date, Sellers shall change the name of the Non-Seller Subsidiary to a name that does not contain any of the Restricted Names. From and after the Closing, Sellers shall cease the use of the Restricted Names (other than in reference to Sellers’ historic use of the name), and, at Buyer’s written request and Buyer’s expense, shall remove all Restricted Names from the Excluded Assets.

11.4 Access to Books and Records; Confidentiality.

(a) For a period of twenty-four months after the Closing Date (or such shorter period as Sellers maintain their corporate existence), each Party and their representatives shall have reasonable access to, and each shall have the right to photocopy all of the books and records relating to the Long-Term Business or the Acquired Assets, including all employee records or other personnel and medical records required by Law, legal process or subpoena, in the possession of the other Party to the extent that such access may be reasonably required by such Party. Such access shall be afforded by the Party in possession of such books and records upon receipt of reasonable advance notice and during normal business hours; provided, however, that (A) any such investigation shall be conducted in such a manner as not to interfere unreasonably with the operation of the business of any Party or its Affiliates, (B) no Party shall be required to take any action which would constitute a waiver of the attorney-client privilege, work product or similar privilege, and (C) no Party need supply the other Party with any information which such party is under a legal obligation not to supply. The Party exercising this right of access shall be solely responsible for any costs or expenses incurred by it pursuant to this Section 11.4.

(b) After the Closing, each Seller shall maintain as confidential, and shall, to the extent either Seller controls the Non-Seller Subsidiary, cause the Non-Seller Subsidiary to maintain as confidential, and shall not use or disclose, and, to the extent either Seller controls the Non-Seller Subsidiary, shall cause the Non-Seller Subsidiary not to use or disclose, (except as required by Law or as authorized in writing by Buyer) any confidential information with respect to the Acquired Assets, the Assumed Liabilities or the Long-Term Business (“Confidential Information”). Each Seller further agrees to take all commercially reasonable steps (and to use commercially reasonable efforts to cause each of its Affiliates to take all commercially reasonable steps) to safeguard such Confidential Information and to protect it against disclosure, misuse, espionage, loss and theft. In the event any Seller is required by Law to disclose any Confidential


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Information, to the extent commercially practicable, such Seller shall promptly notify Buyer in writing, which notification shall include the nature of the legal requirement and the extent of the required disclosure, and shall cooperate with Buyer, at Buyer’s expense, to preserve the confidentiality of such information consistent with applicable Law.

ARTICLE 12 MISCELLANEOUS

12.1 Successors and Assigns.

(a) Except as otherwise provided in this Agreement (including Section 12.1(b), no Party may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other Parties and any such attempted assignment without such prior written consent shall be void and of no legal force or effect. This Agreement inures to the benefit of and is binding upon the successors and permitted assigns of the Parties. For all purposes hereof, a transfer, sale or disposition of a majority of the voting capital stock or other voting interests of Buyer (whether by contract or otherwise) shall be deemed not to be an assignment hereunder.

(b) Buyer may assign any or all of its rights, interests, and obligations hereunder, including the right to accept any or all Acquired Assets or assume any or all Assumed Liabilities in accordance with the terms of this Agreement, to the Designated Affiliate (or to one or more subsidiaries of the Designated Affiliate) as contemplated by Sections 1.1 and 1.2. No assignment of any obligations hereunder shall relieve Buyer of any of its obligations under this Agreement, including its obligation to pay the Purchase Price, until, with respect to the Assumed Liabilities, such time as such Affiliate or Affiliates actually assume the Assumed Liabilities, following which assumption Buyer shall have no obligation with respect thereto. Upon any such permitted assignment, Buyer, on the one hand, and its assignees or designees, on the other hand, will be jointly and severally liable for all of Buyer’s obligations under this Agreement (except, with respect to the Assumed Liabilities, as set forth in the immediately preceding sentence), and the references in this Agreement to Buyer shall also apply to any such assignee or designee unless the context otherwise requires. To the extent that Buyer assigns its rights, interests and obligations hereunder to one or more of its Affiliates or designees, such Affiliate or designee shall deliver to Sellers certificates similar in form and substance to the certificates required to be delivered by Buyer pursuant to Section 2.4, and the certificate attached as Exhibit G hereto, certifying to such matters with respect to itself.

12.2 Governing Law; Jurisdiction. This Agreement shall be construed, performed and enforced in accordance with, and governed by, the Laws of the State of Delaware (without giving effect to the principles of conflicts of Laws thereof that would cause the application of the Law of another jurisdiction), except to the extent that the Laws of such State are superseded by the Bankruptcy Code; provided that the validity and enforceability of all conveyance documents or instruments executed and delivered pursuant to this Agreement insofar as they affect title to real property shall be governed by and construed in accordance with the Laws of the jurisdiction in which the Real Property is located. For so long as Sellers are subject to the jurisdiction of the Bankruptcy Court, the Parties hereto irrevocably elect as the sole judicial forum for the


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adjudication of any matters arising under or in connection with this Agreement, and consent to the exclusive jurisdiction of, the Bankruptcy Court. After Sellers are no longer subject to the jurisdiction of the Bankruptcy Court, any legal action or proceeding with respect to this Agreement or the transactions contemplated hereby may be brought only in the courts of the State of Delaware sitting in Wilmington, Delaware or of the United States for the District of Delaware, and by execution and delivery of this Agreement, each of the Parties consents to the exclusive jurisdiction of those courts. Each of the Parties irrevocably waives any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any action or proceeding in any such jurisdiction in respect of this Agreement, the Ancillary Agreements or the transactions contemplated hereby or thereby.

12.3 Warranties Exclusive.

(a) The representations, warranties, covenants and agreements contained in this Agreement and the Ancillary Agreements are the only representations, warranties, covenants or agreements given by Sellers and all other express or implied warranties are disclaimed. Buyer acknowledges and agrees that (i) except as provided in Article 3, the Acquired Assets are conveyed “AS IS,” “WHERE IS” and “WITH ALL FAULTS” and that ALL WARRANTIES OF MERCHANTABILITY, QUALITY, CONDITION, USAGE OR SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED, (ii) it has not relied on any representation or warranty of Sellers or their Affiliates or their respective Related Persons, other than the express representations and warranties expressly set forth in Article 3 of this Agreement, and it has not relied on any covenant or agreement of Sellers or their Affiliates or their respective Related Persons, other than the express covenants and agreements of Sellers expressly set forth in this Agreement or in any Ancillary Agreements, (iii) Buyer has made its own investigation of the Acquired Assets and Assumed Liabilities and, based on such investigation and its own conclusions derived from such investigation, have elected to proceed with the transactions contemplated hereby and (iv) no material or information provided by or communications made by (or on behalf of) Sellers or their Affiliates or their respective Related Persons will create any representation or warranty of any kind, whether express or implied, with respect to the Acquired Assets and the title thereto, the operation of the Acquired Assets or the Assumed Liabilities or the prospects (financial and otherwise), risks and other incidents of the Acquired Assets or the Assumed Liabilities.

(b) Without limiting the generality of the foregoing, Buyer acknowledges and agrees that none of Sellers or their Affiliates or their respective Related Persons has made any representation or warranty, express or implied, as to the accuracy or completeness of any information regarding the Acquired Assets or the Assumed Liabilities, except as expressly set forth in Article 3 of this Agreement. Buyer further agrees that none of Sellers or their Affiliates or their respective Related Persons will have or be subject to any liability to Buyer or any other Person resulting from the distribution to Buyer, or Buyer’s use of, any such information and any information, document or material made available to Buyer or its Related Persons in that certain management presentation of Sellers, in certain “data rooms” and online “data sites” or any other form in expectation of the transactions contemplated by this Agreement.


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(c) Buyer is taking full responsibility for making its own evaluation of the adequacy and accuracy of any estimates, projections and other forecasts and plans (including the reasonableness of the assumptions underlying such estimates, projections and forecasts). Accordingly, Buyer acknowledges and agrees that none of Sellers or their Affiliates or their respective Related Persons makes, and Buyer is not relying upon, any representations or warranties whatsoever with respect to any estimates, projections and other forecasts and plans (including the reasonableness of the assumptions underlying such estimates, projections and forecasts), and Buyer shall have no claim against Sellers or their Affiliates or their respective Related Persons arising from or relating to any estimates, projections and other forecasts and plans.

12.4 No Survival of Representations and Warranties. The representations and warranties, covenants and agreements set forth in this Agreement or in any Ancillary Agreement to the extent contemplating or requiring performance prior to the Closing, shall not survive the Closing. Each of the representations and warranties set forth in this Agreement or in any Ancillary Agreement shall terminate effective immediately as of the Closing such that no claim for breach of any such representation or warranty, detrimental reliance or other right or remedy (whether in contract, in tort or at law or equity) may be brought after the Closing. The covenants and agreements of any Party set forth in this Agreement and in any Ancillary Agreement, to the extent contemplating or requiring performance by such Party prior to the Closing, shall terminate effective immediately as of the Closing such that no claim for breach of any such covenant, detrimental reliance or other right or remedy (whether in contract, in tort or at law or equity) may be brought after the Closing. Each covenant and agreement requiring performance at or after the Closing shall expressly survive Closing and nothing in this Section 12.4 shall be deemed to limit any rights or remedies of any Person for breach of any such covenant (with it being understood that nothing herein shall limit or affect Buyer’s or any of its Affiliates’ liability for the failure to pay the Purchase Price, assume the Assumed Liabilities or pay other amounts as required under this Agreement). Buyer acknowledges and agrees that the representations, warranties, covenants and agreements contained in Section 12.3 and this Section 12.4 are an integral part of the transactions contemplated by this Agreement and that, without these agreements, Sellers would not enter into this Agreement.

12.5 No Recourse for Certain Breaches. Buyer agrees that, except for claims or recourse that cannot be waived under applicable Law, from and after the Closing, no claim shall be brought or maintained by or on behalf of Buyer or its Affiliates or Related Persons against any of Sellers or their Affiliates or their respective Related Persons (in their respective capacities as such), and no recourse shall be sought or granted against any of them, by virtue of or based upon any alleged misrepresentation or inaccuracy in or breach of any of the representations, warranties or covenants of Sellers set forth or contained in this Agreement and that, without these agreements, Sellers would not enter into this Agreement.

12.6 Mutual Drafting. This Agreement is the result of the joint efforts of Buyer and Sellers, and each of them and their respective counsel have reviewed this Agreement and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the Parties, and the language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and therefore there shall be no construction against either Party based on any presumption of that Party’s involvement in the drafting thereof.


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12.7 Waiver of Bulk Sales Laws. Each of the Parties acknowledges and agrees that neither Seller will comply with, and hereby waives compliance by Sellers with, any “bulk sales”, “bulk transfer” or similar law relating to the transactions contemplated hereby.

12.8 Expenses. Within one (1) Business Day after receipt by the Escrow Agent of the Deposit, Sellers shall reimburse Buyer for $250,000 of legal fees and expenses incurred by Buyer in connection with this Agreement and the transactions contemplated hereby (or, at Buyer’s direction, pay such amount directly to Buyer’s counsel). Except as otherwise provided herein, each of the Parties hereto shall pay its own expenses in connection with this Agreement and the transactions contemplated hereby, including any legal, accounting, banking, consulting and advisory fees, whether or not the transactions contemplated hereby are consummated. Buyer shall pay the cost of all Transaction Taxes payable upon or in connection with, and all surveys, title insurance policies, title and environmental consultant reports obtained in connection with this Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby.

12.9 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable Law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement. In the event that any part of this Agreement is declared by any court or other judicial or administrative body to be null, void or unenforceable, said provision survives to the extent it is not so declared, and all of the other provisions of this Agreement remain in full force and effect only if, after excluding the portion deemed to be unenforceable, the remaining terms provide for the consummation of the transactions contemplated hereby in substantially the same manner as originally set forth at the later of the date this Agreement was executed or last amended in accordance with Section 12.11.

12.10 Notices. All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) if personally delivered, on the date of delivery, (b) if delivered by express courier service of national standing (with charges prepaid), on the Business Day following the date of delivery to such courier service, (c) if deposited in the United States mail, first-class postage prepaid, on the fifth Business Day following the date of such deposit, (d) if delivered by facsimile, upon confirmation of successful transmission, (i) on the date of such transmission, if such transmission is completed at or prior to 5:00 p.m., local time of the recipient party on a Business Day, and (ii) on the next Business Day following the date of transmission, if such transmission is completed after 5:00 p.m., local time of the recipient party, on a Business Day or is transmitted on a day that is not a Business Day, or (e) if delivered by Internet mail (with a delivery report); provided that the relevant computer record indicates a full and successful transmission or no failure message is generated (i) on the date of such transmission, if such transmission is completed at or prior to 5:00 p.m., local time of the recipient party on a Business Day, and (ii) on the next Business Day following the date of transmission, if such transmission is completed after 5:00 p.m., local time of the recipient party or is transmitted on a day that is not a Business Day. All notices, demands and other communications hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the


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party to receive such notice. All notices to be delivered by any party hereto shall also be delivered to the Official Committee of Unsecured Creditors as set forth below:

Notices to Sellers:

Fisker Automotive Holdings, Inc. and Fisker Automotive, Inc. 5515 E. La Palma Ave. Anaheim, California 92807 Attention: Marc Beilinson Telephone: (310) 990-2990 Email: [email protected] with a copy to (which shall not constitute notice):

Kirkland & Ellis LLP 300 North LaSalle Street Chicago, Illinois 60654 Attention: Ryan Preston Dahl Steve Toth Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Email: [email protected] [email protected]

Notices to Buyer:

Wanxiang America Corporation 88 Airport Road Elgin, Illinois 60123 Attention: Paul Cumberland Telephone: (847) 628-8623 Facsimile: (847) 931-4838 Email: [email protected]

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

Sidley Austin LLP One South Dearborn Chicago, Illinois 60603 Attention: Bojan Guzina and John R. Box Telephone: (312) 853-7000 Facsimile: (312) 853-7036 Email: [email protected] and [email protected]

Notices to Official Committee of Unsecured Creditors:



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Brown Rudnick LLP One Financial Center Boston, MA 0211 Attention: William Baldiga Telephone: (617) 856-8586 Facsimile: (617) 856-8201 Email: [email protected]

12.11 Amendments; Waivers. This Agreement may be amended or modified, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the Parties, or in the case of a waiver, by the Party waiving compliance. Any waiver by any Party of any condition, or of the breach of any provision, term, covenant, representation or warranty contained in this Agreement, in any one or more instances, is not deemed to be nor construed as a furthering or continuing waiver of any such condition, or of the breach of any other provision, term, covenant, representation or warranty of this Agreement.

12.12 Public Announcements. Prior to the Closing, no Party shall make any press release or public announcement concerning the transactions contemplated by this Agreement without the prior written approval of the other Parties, unless a press release or public announcement is required by Law or Order of the Bankruptcy Court. If any such announcement or other disclosure is required by Law or Order of the Bankruptcy Court, the disclosing Party shall give the non-disclosing Party prior notice of, and an opportunity to comment on, the proposed disclosure. The Parties acknowledge that Sellers will file this Agreement with the Bankruptcy Court in connection with obtaining the Sale Order and Bidding Procedures Order. The Parties shall not be restricted from making any public announcements or issuing any press releases after the Closing.

12.13 Entire Agreement. This Agreement and the Ancillary Agreements contain the entire understanding among the Parties with respect to the transactions contemplated hereby and supersede and replace all prior and contemporaneous agreements and understandings, oral or written, with regard to such transactions. Any documents and instruments delivered pursuant to any provision hereof are expressly made a part of this Agreement as fully as though completely set forth herein.


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12.14 Parties in Interest.

(a) Nothing in this Agreement is intended to confer any rights or remedies under or by reason of this Agreement on any Persons other than Sellers and Buyer and their respective successors and permitted assigns; provided that (i) each covenant or agreement of Buyer in this Agreement is expressly for the benefit of Sellers and their Affiliates and shall be enforceable by Sellers and their Affiliates (including the estate(s) of Sellers in the Seller Chapter 11 Cases) and (ii) any Related Person of Sellers or their Affiliates or any Related Person of Buyer or their Affiliates, as applicable, may enforce the terms of any provision of this Agreement in which such Related Person is referenced as a beneficiary of such provision.

(b) Without limiting or amending the obligations of Buyer hereunder, to the extent that any obligation or liability of Buyer hereunder is to be performed or paid by an Affiliate of Buyer, this Agreement shall constitute an obligation of Buyer to cause such Affiliate to perform. Nothing in this Agreement is intended to relieve or discharge the obligations or liability of any third Persons to Sellers or Buyer or their respective Affiliates. No provision of this Agreement gives any third Persons any right of subrogation or action over or against Sellers or Buyer or their respective Affiliates.

(c) Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement, express or implied, shall confer upon any current, former or future employee or other Related Person of Sellers or any of Sellers’ Affiliates, or legal representative or beneficiary thereof or other Person, any rights or remedies, including any right to employment or continued employment with Buyer or any of its Affiliates for any specified period, or compensation or benefits or other terms and conditions of employment of any nature or kind whatsoever under this Agreement, or a right in any employee or beneficiary of such employee or other Person under an Employee Benefit Plan that such employee, beneficiary or other Person would not otherwise have under the terms of such plan.

12.15 DAMAGES. NO PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, EXEMPLARY, SPECIAL, INDIRECT OR PUNITIVE DAMAGES (INCLUDING LOST PROFITS, LOSS OF PRODUCTION OR OTHER DAMAGES ATTRIBUTABLE TO BUSINESS INTERRUPTION) ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT. THE EXCLUSION OF CONSEQUENTIAL, INCIDENTAL, EXEMPLARY, SPECIAL, INDIRECT OR PUNITIVE DAMAGES AS SET FORTH IN THE PRECEDING SENTENCE SHALL NOT LIMIT THE RIGHTS OF ANY PERSON ENTITLED TO INDEMNIFICATION UNDER THIS AGREEMENT TO ANY SUCH DAMAGES PAYABLE TO THIRD PERSONS IN CONNECTION WITH A MATTER FOR WHICH A PERSON ENTITLED TO INDEMNIFICATION UNDER THIS AGREEMENT.

12.16 WAIVER OF JURY TRIAL. THE PARTIES TO THIS AGREEMENT EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL OF ANY CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT OR (II) IN ANY WAY CONNECTED WITH OR RELATED


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OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

12.17 Headings. The Article and Section headings in this Agreement are for reference purposes only and do not affect the meaning or interpretation of this Agreement.

12.18 Construction. Unless the context of this Agreement otherwise requires, (a) words of any gender include the other gender, (b) words using the singular or plural number also include the plural or singular number, respectively, (c) the terms “hereof,” “herein,” “hereby,” and derivative or similar words refer to this entire Agreement as a whole and not to any other particular Article, Section or other subdivision, (d) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” (e) “shall,” “will,” or “agrees” are mandatory, and “may” is permissive, (f) “or” is not exclusive and (g) “deliver” or “delivery” shall not mean delivery of physical possession.

12.19 Currency. Except where otherwise expressly provided, all amounts in this Agreement are stated and shall be paid in United States currency, and without discount, rebate or reduction and subject to no counterclaim or offset (other than withholding Tax obligations required to be withheld by law), on the dates specified herein.

12.20 Time of Essence. Time is of the essence of this Agreement.

12.21 Counterparts. This Agreement may be executed in counterparts, each of which is deemed an original, but all of which constitute the same agreement. This Agreement and any signed agreement entered into in connection herewith or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by facsimile (or other electronic transmission), shall be treated in all manner and respects as an original contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person.

ARTICLE 13 DEFINITIONS

13.1 Certain Terms Defined. As used in this Agreement, the following terms have the following meanings:

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such first Person where “control” means the possession, directly or indirectly, of the power to direct or cause the


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direction of the management policies of a Person, through the ownership of voting securities, by contract, as trustee, executor or otherwise.

“Affiliated Party” means, any officer, director, governing body member, stockholder, partner or Affiliate, as applicable, of any Seller or any individual related by marriage or adoption to any such individual or any entity in which any such Person owns any beneficial interest.

“Ancillary Agreement” means collectively, any agreement to be executed by any of Sellers or any Affiliate thereof, on the one hand, and Buyer or any Affiliate thereof on the other hand, in connection with the transactions contemplated by this Agreement.

“Auction” means the auction conducted by Sellers pursuant to the Bidding Procedures Order.

“Auction Date” means the scheduled date of the Auction as set forth in the Bidding Procedures Order (or the date to which such Auction may be adjourned).

“Bankruptcy Code” means Title 11 of the United States Code.

“Bankruptcy Court” means the United States Bankruptcy Court for the District of Delaware or such other court having jurisdiction over the Seller Chapter 11 Cases originally administered in the United States Bankruptcy Court of the District of Delaware.

“Bidding Procedures Motion” means that certain Motion of Creditors’ Committee for Entry of Orders (I)(A) Approving Bid Procedures in Connection with the Sale of Certain Assets of the Debtors, (B) Scheduling Hearing to Consider Approval of the Sale of Assets, (C) Approving Form and Manner of Notice Thereof, (D) Authorizing and Directing Debtors to Enter Into Stalking Horse Purchase Agreement, (E) Approving Expense Reimbursement, and (F) Granting Related Relief; and (II) Authorizing Debtors to Obtain Replacement Post-Petition Secured Financing, Utilize Cash Collateral, Grant Adequate Protection, Modify the Automatic Stay and Scheduling a Final Hearing with Respect to Same, filed with the Bankruptcy Court on December 30, 2013.

“Bidding Procedures Order” means that certain Order (I) Approving Bid Procedures in Connection With the Sale of Certain Assets of the Debtors; (Ii) Scheduling Hearing to Consider Approval of the Sale of Assets; (III) Approving Form and Manner of Notice Thereof; (IV) Authorizing the Debtors to Enter Into Stalking Horse Purchase Agreements; (V) Approving Expense Reimbursement; and (VI) Granting Related Relief as entered by the Bankruptcy Court at Docket No. 508 on January 23, 2014.

“Brownfields Development Agreement” means that certain Brownfields Development Agreement dated May 28, 2010 by and between Fisker Automotive, Inc. and the Delaware Department of Natural Resources and Environmental Control.

“Business Day” means any day other than Saturday, Sunday and any day that is a legal holiday or a day on which banking institutions in New York, New York are authorized by Law or other Governmental action to close.


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“Business Records” means all books, files and records of Sellers, including customer lists, historical customer files, circulation data, research records, subscription lists, information databases, market surveys, reports, plans, data, accounting and Tax records, training manuals, safety reports, Environmental Reports, maintenance schedules, operating and production records, inventory records, business plans, marketing materials and marketing and all other studies, documents and records but excluding any Retained Books and Records.

“Buyer Fundamental Representations” means the representations and warranties set forth in Section 4.1 (Corporate Organization), Section 4.2 (Authorization and Validity) and Section 4.8 (Brokerage).

“Buyer Material Adverse Effect” means any event, change or circumstance that, individually or in the aggregate, results or would reasonably be expected to result in a material adverse change or effect on the ability of Buyer to consummate the transactions contemplated by this Agreement.

“CFIUS” means the Committee on Foreign Investment in the United States.

“Claims” means all claims, defenses, cross claims, counter claims, debts, suits, remedies, liabilities, demands, rights, obligations, damages, expenses, rights to refunds, reimbursement, recovery, indemnification or contribution, attorneys’ or other professionals’ fees and causes of action whatsoever, whether based on or sounding in or alleging (in whole or in part) tort, contract, negligence, gross negligence, strict liability, bad faith, contribution, subrogation, respondeat superior, violations of federal or state securities laws, breach of fiduciary duty, any other legal theory or otherwise, whether individual, class, direct or derivative in nature, liquidated or unliquidated, fixed or contingent, whether at law or in equity, whether based on federal, state or foreign law or right of action, foreseen or unforeseen, mature or not mature, known or unknown, disputed or undisputed, accrued or not accrued, contingent or absolute (including all causes of action arising under Sections 510, 544 through 551 and 553 of the Bankruptcy Code or under similar state Laws, including fraudulent conveyance claims, and all other causes of action of a trustee and debtor-in-possession under the Bankruptcy Code) or rights of set-off.

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

“Committee” means the official committee of unsecured creditors appointed in the Seller Chapter 11 Cases pursuant to Section 1102(a) of the Bankruptcy Code pursuant to that certain Notice of Appointment of Official Creditor Committee, filed by the U.S. Trustee on December 5, 2013.

“Competing Transaction” means any direct or indirect acquisition, sale, divestiture (including by merger, acquisition or other business combination involving any Seller), public offering, recapitalization, business combination or reorganization, whether in one transaction or a series of related transactions, of or involving all or substantially all the assets of any Seller, other than any such transaction or series of related transactions with Buyer or any Affiliates thereof.


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“Computer Software” means any and all software (including computer programs, applications software and software implementations of algorithms), whether in source code or object code form, and all documentation related to the foregoing.

“Consent” means any consent, approval, authorization, qualification, waiver or notification of a Government or any other Person.

“Contract” means any written or oral contract, agreement, license, sublicense, lease, sublease, easement, mortgage, instruments, guaranties, commitment, undertaking or other similar arrangement, whether express or implied, to which any Seller is a party, other than the Permits and Real Property Leases.

“Delaware Facility” means the manufacturing facility located at 801 Boxwood Road, Wilmington, Delaware and the underlying land and related Improvements.

“Delayed Acquired Assets” means any Acquired Assets that this Agreement provides or contemplates are to be transferred to Buyer and that require the removal of a Legal Impediment or the receipt or delivery of a Consent for such transfer, which Legal Impediment is not removed or Consent is not obtained or delivered on or prior to the Closing Date.

“Delayed Assumed Liabilities” means any Assumed Liabilities that this Agreement provides or contemplates are to be assumed by Buyer and that require the removal of a Legal Impediment or the receipt or delivery of a Consent for such assumption, which Legal Impediment is not removed or Consent is not obtained or delivered on or prior to the Closing Date.

“Designated Causes of Action” (a) all commercial tort causes of action not related to the Acquired Assets or Assumed Liabilities, including all pending and potential causes of action against all present and former directors, officers and all other representatives of the Sellers, and any persons acting in concert with (or aiding and abetting) the same, (b) all causes of action arising under Part V of the Bankruptcy Code, (c) any rights of recovery against BMW Group under prepetition agreements with Sellers (by way of offset against BMW’s claims against the Sellers’ estates or affirmative recovery), and (d) all rights under and to insurance policies that may pertain to any of them.

“DoE Facility” means (a) that certain Loan Arrangement and Reimbursement Agreement, dated as of April 22, 2010, by and between the Sellers and the United States Department of Energy, (b) that certain Note Purchase Agreement, dated as of April 22, 2010, by and between Fisker Automotive, the United States Department of Energy and the Federal Financing Bank, a body corporate and instrumentality of the United States (“FFB”), (c) that certain Future Advance Promissory Note, dated as of April 22, 2010, in the maximum principal amount of $169,300,000, issued by Fisker Automotive to FBB, (d) that certain Future Advance Promissory Note, dated as of April 22, 2010, in the maximum principal amount of $359,360,000, issued by Fisker Automotive to FBB and (e) any collateral, security, agency or other related loan documents, in each case, as amended.

“DoE Liens” means Liens on any rights, title, interests or assets (tangible or intangible) of the Sellers pursuant to the DoE Facility.


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“Employee Benefit Plan” means any “employee benefit plan” (as such term is defined in ERISA § 3(3)) and any other material employee benefit plan, program or arrangement of any kind maintained by Sellers or their ERISA Affiliates for the benefit of their employees or otherwise with respect to which Sellers or any of their ERISA Affiliates has any liability.

“Environmental Laws” means all Laws and Orders on or prior to the Closing Date, and all common law relating to pollution or protection of the environment, including the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Sec. 9601 et seq., as amended, the federal Resource Conservation and Recovery Act, 42 U.S.C. Sec. 6901 et seq., as amended, and similar state statutes.

“Environmental Permits” means all environmental permits, authorizations, approvals, registrations, and licenses issued by any Government (and pending applications for the foregoing) pursuant to Environmental Laws.

“Environmental Reports” means any environmental report assessing compliance with any Environmental Laws, and any Phase I or II environmental site assessments or comparable environmental investigation reports, in each case which Sellers have received from an unaffiliated third party with respect to the Long-Term Business or the Transferred Real Property; provided, Environmental Reports do not include any safety, health and environmental audit reports, or internal investigation reports, prepared under the direction of Sellers’ legal department and privileged under the attorney-client privilege, attorney work-product privilege, or state or federal environmental self-auditing privilege or policy.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any entity treated as a single employer with Sellers pursuant to Section 414 of the Code.

“Escrow Agent” means Wells Fargo Bank, National Association, the escrow agent under the Escrow Agreement.

“Escrow Agreement” means the escrow agreement by and among Sellers, Buyers and Escrow Agent, dated as of the date hereof.

“Government” means any United States federal, state or local, or any supra-national, foreign or non-U.S., government, political subdivision, governmental, regulatory or administrative authority, instrumentality, agency body or commission, self-regulatory organization, court, tribunal or judicial or arbitral body.

“Hazardous Materials” means any hazardous or toxic substance or waste or any contaminant or pollutant regulated under or for which liability or standards of care are imposed by Environmental Laws, including “hazardous substances” as currently defined by the Federal Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, and “hazardous wastes” as currently defined by the Resource Conservation and Recovery Act, as amended.


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“Hybrid DIP Facility” means that certain Binding Commitment and Agreement for DIP Financing and Use of Cash Collateral dated November 22, 2013, by and among Fisker Automotive as the borrower, Fisker Holdings as the guarantor, and Hybrid Technology, LLC in its capacity as a post-petition lender to the Sellers, as amended, supplemented or otherwise modified from time to time.

“Improvements” means the buildings, improvements and structures now existing on the Real Property or demised under the Real Estate Leases, but only to the extent such buildings, improvements and structures constitute fixtures under applicable Law.

“Intellectual Property Rights” means all rights in and to the following: (i) patents (including all reissues, divisions, continuations, continuations-in-part and extensions thereof), patent applications, patent rights, patent applications, statutory invention registrations and documented unpatented invention disclosures, (ii) trademarks, service marks, trade names, service names, brand names, trade dress and logos and registrations and applications for registration thereof, together with all of the goodwill associated therewith, (iii) copyrightable works and works of authorship, and registrations and applications for registration thereof, (iv) internet domain names, (vi) trade secrets and confidential information, (vii) Computer Software and (viii) any other intellectual property rights.

“IP Documentation” means all documentation related to, and all tangible embodiments (including in electronic format) of, Intellectual Property Rights.

“Law” means any United States federal, state or local, or any non-U.S., laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any Government (including those pertaining to electrical, building, zoning, environmental and occupational safety and health requirements) or common law of any Government.

“Leased Real Property” means the real property that is the subject of the Real Property Leases.

“Legal Impediment” means a legal impediment preventing or restricting the transfer of an Acquired Asset or the assumption of an Assumed Liability, as the case may be, as of the Closing Date.

“Lien” means any mortgage, pledge, charge, security interest, encumbrance, lien (statutory or other), hypothecation, restriction, easement, encroachment, security agreement, including any conditional sale or other title retention agreement and any lease having substantially the same effect as the foregoing, and (ii) any leasehold interest, license or other right in favor of a third party to use any portion of the Purchased Assets. For the avoidance of doubt, licenses of Intellectual Property Rights shall not constitute Liens.

“Long-Term Business” means the design, research and development, assembly, sourcing, manufacturing, marketing, sale and distribution of plug-in hybrid electric vehicles, in each case as conducted by Sellers during the twenty-four months prior to the date hereof.

“Material Adverse Effect” means any event, change or circumstance after December 30, 2013 that, individually or in the aggregate, results or would reasonably be expected to result in a


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material adverse change or effect on the Acquired Assets or the value thereof, taken as a whole (in each case, to be interpreted with due consideration for the circumstances, condition and status of the Acquired Assets and Sellers (including the assets, employees and other resources (or absence thereof)) as of December 30, 2013 and the status of the Sellers as debtors under the Seller Chapter 11 Cases) or the ability of Sellers to consummate the transactions contemplated by this Agreement; provided that none of the following changes or effects, either alone or taken together with other changes or effects or whether arising directly or indirectly, shall be taken into account in determining whether there has been a Material Adverse Effect: (i) changes, or effects arising from or relating to changes, of Laws; (ii) changes arising from or relating to, or effects of, layoffs, strikes, work stoppages or other labor disturbances; (iii) changes arising from or relating to, or effects of, increases in costs of commodities or supplies; (iv) changes arising from or relating to, or effects of, the announcement of Buyer as the purchaser of the Acquired Assets and the identity of Buyer and their Affiliates, and their respective shareholders, officers, directors and employees; (v) changes, or effects arising from or relating to changes, affecting the industries in which the Sellers operate or operated, or the Acquired Assets were, are or may be used, generally (including any change, or any effect arising from or relating to any change); (vi) changes, or effects arising from or relating to changes, in economic, regulatory or political conditions generally; (vii) changes, or effects arising from or relating to changes, in financial, banking, or securities markets (including (A) any disruption of any of the foregoing markets, (B) any change in currency exchange rates, (C) any decline in the price of any security or any market index and (D) any increased cost of capital or pricing related to any financing); (viii) any failure, in and of itself, to achieve any projections, forecasts, estimates, performance metrics or operating statistics (whether or not shared with Buyer or its Affiliates); (ix) changes arising from or relating to, or effects of, any act(s) of war or of terrorism; (x) changes arising from or relating to, or effects of, weather or meteorological events; or (xi) changes arising from or relating to, or effects of, any motion, application, pleading or Order filed under or in connection with, or the commencement or existence of continuation of, the Seller Chapter 11 Cases or any motion, application, pleading or Order filed by any Government applicable to the electric vehicle industry generally.

“Material IP License” means (a) each license of or grant of material rights to Intellectual Property Rights granted by Sellers to a third party (other than non-exclusive, non-sublicensable licenses to customers, suppliers, vendors, distributors and dealerships granted in the ordinary course of business) and (b) each license of or grant of material rights to Intellectual Property Rights granted by a third party to Sellers (other than licenses to commercially available “off the shelf” software and licenses to Open Source Software), in each case in effect as of the date of this Agreement.

“Open Source Software” means any software that is subject to any “open source,” “copyleft,” or other similar types of license terms (including any GNU General Public License, Library General Public License, Lesser General Public License and the like and including any licensed approved by the Open Source Initiative and listed at http://www.opensource.org/licenses) or any other license that requires as a condition of use, modification or distribution of such Computer Software that such Computer Software or other Computer Software combined or distributed with it be (a) disclosed or distributed in source code form, (b) licensed for the purpose of making derivative works, (c) redistributable at no charge or (d) licensed subject to a patent non-assert or royalty-free patent license.


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“Order” means any judgment, order, injunction, decree, writ, permit or license of any Government or any arbitrator.

“Permits” means the permits, authorizations, approvals, registrations, and licenses issued by any Government (and pending applications for the foregoing) to either of Sellers or with respect to the Acquired Assets or Assumed Liabilities.

“Permitted Liens” means (a) any Lien that is not extinguished by the Sale Order under applicable Law, it being understood that the Sale Order shall extinguish Liens to the maximum extent permissible under applicable Law, (b) any Lien that has priority over the DoE Liens or any other Liens held by Hybrid Tech Holdings, LLC, a Delaware limited liability company, as of November 22, 2013, (c) Liens for Taxes, assessments and Government or other similar charges, (d) purchase money Liens, (e) Liens of lessors, lessees, sublessors, sublessees, licensors, sublicensors, licensees or sublicensees arising under lease arrangements or license arrangements, (f) mechanics liens and similar Liens for labor, materials, or supplies (but, in each instance of clauses (b) through (f), not including Cure Costs), (g) zoning, building codes and other land use laws regulating the use or occupancy of Real Property or the activities conducted thereon that are imposed by any Government having jurisdiction over such Real Property, (h) easements, servitudes, covenants running with the land, conditions, restrictions and other similar matters affecting title to assets which either (x) the title company has agreed to affirmatively insure against loss caused thereby in the applicable title policy, by way of ALTA coverage or other affirmative coverage, reasonably acceptable to Buyer, or (y) do not materially impair the operation or occupancy of the assets in question as currently operated or occupied, (i) any state of facts shown by a current ALTA survey that do not materially and adversely effect the operation of the Real Property in question as currently operated, and (j) the Assumed Liabilities and Liens arising in connection therewith.

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or Government.

“Plan” means a plan of liquidation for the Debtors consistent in all material respects with the terms hereof filed with the Court for confirmation.

“Real Property” means the Owned Real Property and the Leased Real Property.

“Related Person” means, with respect to any Person, all past, present and future directors, officers, members, managers, stockholders, employees, controlling persons, agents, professionals, financial advisors, restructuring advisors, attorneys, accountants, investment bankers, Affiliates or representatives of (i) any such Person and (ii) of any Affiliate of such Person; provided, however, that notwithstanding the foregoing, Sellers shall be deemed not to be “Related Persons” of each other.

“Retained Books and Records” means (i) all corporate seals, minute books, charter documents, corporate stock record books, original Tax and financial records and such other files, books and records to the extent they relate to any of the Excluded Assets or Excluded Liabilities or the organization or capitalization of Sellers or of any Affiliate of Sellers or the sale of all or a portion of the outstanding capital stock of either of Sellers or substantially all of their assets and


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(ii) all books, files and records that would otherwise constitute a Business Record but for the fact that disclosure of such books, files or records would violate any legal constraints or obligations regarding confidentiality thereof or waive any attorney-client, work product or other legal privilege.

“Rule” or “Rules” means the Federal Rules of Bankruptcy Procedure.

“Sale Hearing” means the hearing at which the Bankruptcy Court will consider approving the sale of Acquired Assets and entering the Sale Order.

“Seller Fundamental Representations” means the representations and warranties set forth in Section 3.1 (Corporate Organization), Section 3.2 (Authorization and Validity) and Section 3.7 (Export Controls).

“Sellers’ Knowledge” or any other similar term or knowledge qualification means the present actual knowledge of Marc Beilinson, Barney Koehler and Samuel Koroglu.

“Tax Return” means any report, return, information return, filing or other information, including any schedules, exhibits or attachments thereto, and any amendments to any of the foregoing filed or required to be filed or maintained in connection with the calculation, determination, assessment or collection of any Taxes (including estimated Taxes).

“Taxes” means all taxes, however denominated, including any interest, penalties or additions to tax that may become payable in respect thereof, imposed by any Government, which taxes include all income taxes, Transaction Taxes, payroll and employee withholding, unemployment insurance, social security (or similar), sales and use, excise, franchise, gross receipts, occupation, real and personal property, stamp, transfer, workmen’s compensation, customs duties, registration, documentary, value added, alternative or add-on minimum, estimated, environmental (including taxes under Section 59A of the Code) and other obligations of the same or a similar nature, whether arising before, on or after the Closing Date, together with any interest or any penalty, addition to tax or additional amount imposed thereto.

“Transferred Real Property” means the Purchased Owned Real Property and the Assumed Real Property Leases.

“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988, as amended, and any similar state, local and other Laws.

13.2 All Terms Cross-Referenced. Each of the following terms is defined in the Section set forth opposite such term:

Term Section Acquired Assets 1.1 Additional Asset Conveyance Documents 2.3(a)(vi) Additional Liabilities Assumption Documents 2.3(a)(vii) Agreement Preamble Allocation Schedule 8.3


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Term Section Assigned Contracts 1.1(k) Assigned Permits 1.1(l) Assumed Liabilities 1.3 Assumed Real Property Leases 1.1(b) Assumption Notice 1.5(c) Bidding Procedures 7.2 Business Contracts 1.5(a) Buyer Preamble Closing 2.2 Closing Date 2.2 Confidential Information 11.4(b) Cure Costs 1.3(b) Deposit 2.5 Designated Affiliate 1.1 Designated Contract Obligations 1.5(c) Designated Contracts 1.5(c) DIP Loan Payment Amount 2.1 Equity Consideration 2.1 Excluded Assets 1.2 Excluded Contracts 1.2(c) Excluded Liabilities 1.4(a) Excluded Real Property Leases 1.2(a) Existing Plan Recitals Expense Reimbursement 10.4(a) Fisker Automotive Preamble Fisker Holdings Preamble Government Contract 3.7 Inventory 1.1(e) IP Licenses 1.1(i) Material IP Licenses 3.5(a) Non-Seller Subsidiary 3.1 Owned IP 1.1(j) Owned Real Property 1.1(a) Party/Parties Preamble Petition Date Recitals Proration Period 8.4 Purchase Price 2.1 Purchased Owned Real Property 1.1(a) Real Property Leases 1.1(b) Rejection Notice 1.5(c) Required Agreements 6.2 Restricted Names 11.3 Retention Period 1.5(c) Sale Order 7.1


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Term Section Seller/Sellers Preamble Seller Chapter 11 Cases Recitals Sellers’ Insurance Policies 11.2 Seller Parties 10.4(c) Specified Employees 6.8 Termination Date 10.2(b) Termination Order 10.2(h) Transaction Taxes 8.1 Transferred Employee 6.8

(Signatures are on the following page.)


KE 30108168.5

Amendment No. 2 to Asset Purchase Agreement

This Amendment No. 2 to Asset Purchase Agreement (this “Amendment”), dated as of February 17, 2014, is entered into by and among Fisker Automotive Holdings, Inc., a Delaware corporation (“Fisker Holdings”), and Fisker Automotive, Inc., a Delaware corporation (“Fisker Automotive” and, together with Fisker Holdings, “Sellers” and each a “Seller”), on the one hand, and Wanxiang America Corporation, a Kentucky corporation (“Buyer”), on the other hand, in connection with that certain Asset Purchase Agreement dated as of January 27, 2014 (the “Purchase Agreement”), as amended by Amendment No. 1 to Asset Purchase Agreement, dated February 12, 2014, by and among the same parties. Certain terms used in this Amendment and not defined in the body of this Amendment shall have the meanings given to such terms in the Purchase Agreement.

1. Amendment Provisions. As of the date hereof, the Purchase Agreement shall be amended as follows.

(a) Section 2.1 of the Purchase Agreement is hereby amended and restated to read as follows:

“2.1 Consideration. The aggregate consideration for the sale and transfer of the Acquired Assets is (i) an amount in cash equal to (A) One Hundred Seventeen Million Sixty Thousand Dollars ($117,060,000) (the “Purchase Price”), plus (B) the amount, if any, by which the aggregate amount of (x) allowed Claims that are Assumed Liabilities pursuant to Section 1.3(g)(i) and (y) fees and expenses that are Assumed Liabilities pursuant to Section 1.3(g)(ii), as finally determined by the Bankruptcy Court, is less than the Assumed Priority Claims Cap, without any further action or obligation on any party, plus (ii) the assumption by Buyer at the Closing of the Assumed Liabilities, plus (iii) a 20% common equity interest in the Designated Affiliate, as more fully described in the term sheet attached as Exhibit A hereto (the “Equity Consideration”) plus (iv) an amount in cash (the “DIP Loan Payment Amount”) equal to the lesser of (x) the outstanding principal balance of the Hybrid DIP Facility at Closing and (y) Nine Million One Hundred Forty Thousand Dollars ($9,140,000).” (b) The last sentence of Section 2.2 of the Purchase Agreement is hereby amended

and restated to read as follows: “The Parties shall use all reasonable best efforts to consummate the Closing as promptly as possible, subject to the terms and conditions of this Agreement.”

(c) A new Section 9.1(f) of the Purchase Agreement is hereby inserted to read as follows:

“(f) Any applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, relating to the transactions contemplated hereby shall have expired or been earlier terminated and any waiting periods (and any extension thereof) or approvals required under any applicable foreign antitrust Laws, if any,


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relating to the transactions contemplated hereby shall have expired (or been earlier terminated) or obtained, as applicable.”

(d) The following Section 11.5 is hereby added to the Purchase Agreement:

“11.5 Antitrust Notification.

(a) Sellers and Buyer shall, (i) as soon as reasonably practicable, file with the United States Federal Trade Commission (the “FTC”) and the United States Department of Justice (“DOJ”), the notification form required pursuant to the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) for the transactions contemplated by this Agreement, which form shall specifically request early termination of the waiting period prescribed by the HSR Act, (ii) use their respective commercially reasonable efforts to cooperate with each other in determining as promptly as practicable whether any filings are required to be made with, or consents, permits, authorizations, waivers, clearances, approvals, and expirations or terminations of waiting periods are required to be obtained from, under any applicable foreign anti-trust Laws (collectively “Required Foreign Anti-Trust Approvals”) in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and (iii) as soon as reasonably practicable, make any filings related to or seeking any Required Foreign Anti-Trust Approvals.

(b) Each of Sellers, and Buyer shall furnish to the other such necessary information and reasonable assistance as the other may request in connection with its preparation of any filing or submission that is necessary under the HSR Act or in connection with obtaining any Required Foreign Anti-Trust Approvals. Each party shall use its commercially reasonable efforts to obtain any clearance required under the HSR Act and Required Foreign Anti-Trust Approvals for the consummation of the transactions contemplated hereby as promptly as practicable; provided that for purposes hereof “commercially reasonable efforts” of Buyer shall not include opposing any motion or action for a temporary, preliminary or permanent injunction against the transactions contemplated hereby and provided further that, notwithstanding anything to the contrary in this Section 11.5 or elsewhere in this Agreement, in no event shall Buyer, or any of their respective Affiliates, be obligated in connection with the receipt of any consent, permit, authorization, ruling or approval from any Governmental or required under applicable Law, to propose or agree to accept any undertaking or condition, to enter into any consent decree, to make any divestiture or accept any operational restriction, or take or commit to make payments or enter into any commercial arrangement, or commit, or commit to take, any action.

(c) Sellers and Buyer shall keep each other apprised of the status of any material communications with, and any inquiries or requests for additional information from, any Government.


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(d) The Parties hereto commit to instruct their respective counsel to cooperate with each other to facilitate and expedite the identification and resolution of any issues arising under the HSR Act or in connection with obtaining Required Foreign Anti-Trust Approvals at the earliest practicable dates. Such cooperation shall include instructing counsel (i) to keep each other appropriately informed of material communications from and to personnel of the reviewing Government and (ii) to confer with each other regarding appropriate contacts with and response to personnel of such Government and the content of any such contacts or presentations. Neither Sellers nor Buyer shall participate in any material meeting or discussion with any Government related to filing under the HSR Act or obtaining Required Foreign Anti-Trust Approvals in connection with the transactions contemplated hereby without giving the other party prior notice of the meeting or discussion and, to the extent permitted by the relevant Government, the opportunity to attend and participate in such meeting or discussion (which, at the request of either Sellers or Buyer, shall be limited to outside antitrust counsel only).

2. Deposit. The amount of the Deposit is hereby increased to forty-four million, seven hundred sixty thousand dollars ($44,760,000), and Buyer shall fund such increased Deposit in accordance with the Escrow Agreement, as amended.

3. Miscellaneous.

(a) Except as expressly provided in this Amendment, each of the terms and provisions of the Purchase Agreement and Ancillary Agreements shall remain in full force and effect in accordance with their respective terms. The amendments set forth herein are limited precisely as written and shall not be deemed to be an amendment or waiver to any other term or condition of the Purchase Agreement or any of the documents referred to therein. From and after the date of this Amendment, all references in the Purchase Agreement or in any of the schedules, instruments or agreements executed in connection therewith, to the “Purchase Agreement” or to “this Agreement” shall be deemed to be references to the Purchase Agreement, as amended hereby.

(b) This Amendment shall be governed by, and construed in accordance with, Section 10.2 of the Purchase Agreement. This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same instrument. Facsimile or pdf. signatures shall be acceptable and binding.

* * * * * * *


KE 29008771

EXHIBIT D

Limited Liability Company Agreement for Wanxiang Automotive Acquisition Company LLC


Execution Copy

LIMITED LIABILITY COMPANY AGREEMENT

FOR

WANXIANG AUTOMOTIVE ACQUISITION COMPANY LLC

Dated as of March 21, 2014

THE EQUITY INTERESTS REPRESENTED BY UNITS PURSUANT TO THIS LIMITED LIABILITY COMPANY AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH UNITS MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION UNDER THE 1933 ACT AND SUCH LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.


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TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS .......................................................................................................................................... 1

1.1 Certain Definitions ............................................................................................................................ 1

ARTICLE II ORGANIZATIONAL MATTERS ........................................................................................................... 9

2.1 Legal Status ....................................................................................................................................... 9 2.2 Name ................................................................................................................................................. 9 2.3 Purpose .............................................................................................................................................. 9 2.4 Term .................................................................................................................................................. 9

ARTICLE III MEMBERS AND UNITS ....................................................................................................................... 9

3.1 Ownership of Units ........................................................................................................................... 9 3.2 Units .................................................................................................................................................. 9 3.3 Additional Units ................................................................................................................................ 9 3.4 Voting Rights .................................................................................................................................... 9 3.5 Actions Requiring Preferred Unit Approval ..................................................................................... 9

ARTICLE IV CAPITAL CONTRIBUTIONS ............................................................................................................ 11

4.1 Capital Contributions ...................................................................................................................... 11 4.2 Loans ............................................................................................................................................... 11 4.3 Return of Contributions; Interest .................................................................................................... 12 4.4 Capital Accounts ............................................................................................................................. 12

ARTICLE V DISTRIBUTIONS ................................................................................................................................. 13

5.1 General Distributions ...................................................................................................................... 13 5.2 Timing of Distributions ................................................................................................................... 13 5.3 Tax Distributions ............................................................................................................................ 13 5.4 Preferred Unit Redemption ............................................................................................................. 15

ARTICLE VI ALLOCATIONS AND OTHER MATTERS ....................................................................................... 15

6.1 Allocations of Net Income and Net Loss ........................................................................................ 15 6.2 Intentionally Deleted ....................................................................................................................... 15 6.3 Other Allocation Rules. ................................................................................................................... 15 6.4 Tax Allocations ............................................................................................................................... 16 6.5 Offsetting Allocations ..................................................................................................................... 16 6.6 Indemnification and Reimbursement for Payments on Behalf of a Unit Holder ............................ 16

ARTICLE VII MANAGEMENT ................................................................................................................................ 16

7.1 Management of the Company ......................................................................................................... 16 7.2 Powers and Authorities of the Board of Managers ......................................................................... 17 7.3 Limited Liability Company Qualifications and Filings................................................................... 18 7.4 Resignation ..................................................................................................................................... 18 7.5 Vacancies ........................................................................................................................................ 18 7.6 Expenses of the Board of Managers ................................................................................................ 18 7.7 Required Approvals and Notifications ............................................................................................ 18 7.8 Appointment of Officers ................................................................................................................. 18 7.9 Term of Office, Removal and Vacancies ........................................................................................ 18

ARTICLE VIII RESTRICTIONS ON TRANSFERS ................................................................................................. 18


TABLE OF CONTENTS (continued) Page

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8.1 Restrictions ..................................................................................................................................... 18 8.2 Other Restrictions on Transfer. ....................................................................................................... 19 8.3 Rights of First Offer ........................................................................................................................ 19 8.4 Rights of First Refusal .................................................................................................................... 20 8.5 Duration of ARTICLE VIII ............................................................................................................ 21

ARTICLE IX CO-SALE RIGHTS, SALE OF THE COMPANY AND OTHER RIGHTS ....................................... 21

9.1 Co-Sale Rights and Obligations ...................................................................................................... 21 9.2 Sale of the Company; Allocation of Sale Proceeds ......................................................................... 22 9.3 Limited Preemptive Rights. ............................................................................................................ 22 9.4 Duration of Certain Provisions ........................................................................................................ 23 9.5 Piggyback Registration Rights ........................................................................................................ 23 9.6 Reorganization ................................................................................................................................ 23

ARTICLE X EXCULPATION AND INDEMNIFICATION ..................................................................................... 24

10.1 Exculpation; Reliance ..................................................................................................................... 24 10.2 Indemnification. .............................................................................................................................. 24 10.3 Insurance ......................................................................................................................................... 25

ARTICLE XI BOOKS; RECORDS; TAX MATTERS .............................................................................................. 25

11.1 Books and Records.......................................................................................................................... 25 11.2 Financial Statements; Information Rights ....................................................................................... 25 11.3 Reports to Current and Former Unit Holders .................................................................................. 25 11.4 Accounting Methods ....................................................................................................................... 25 11.5 Fiscal Year ...................................................................................................................................... 25 11.6 Tax Matters Partner ......................................................................................................................... 25

ARTICLE XII ADMISSION AS A MEMBER ........................................................................................................... 26

12.1 Admissions ...................................................................................................................................... 26

ARTICLE XIII WITHDRAWAL AND DISSOLUTION ........................................................................................... 26

13.1 Withdrawal ...................................................................................................................................... 26 13.2 Events of Dissolution ...................................................................................................................... 26 13.3 Distributions; Allocations. .............................................................................................................. 26 13.4 Conduct of Winding-Up .................................................................................................................. 27

ARTICLE XIV REPRESENTATIONS, WARRANTIES, AGREEMENTS AND OTHER MATTERS .................. 27

14.1 Representations, Warranties and Agreements of Unit Holders ....................................................... 27 14.2 Representations and Warranties of the Company ........................................................................... 28 14.3 Waiver of Corporate Opportunity ................................................................................................... 28

ARTICLE XV GENERAL PROVISIONS .................................................................................................................. 29

15.1 Remedies ......................................................................................................................................... 29 15.2 Waiver ............................................................................................................................................. 29 15.3 Notices ............................................................................................................................................ 29 15.4 Entire Agreement ............................................................................................................................ 29 15.5 Amendments and Modifications ..................................................................................................... 29 15.6 Binding Effect; Benefits .................................................................................................................. 30 15.7 Severability ..................................................................................................................................... 30 15.8 Headings ......................................................................................................................................... 30 15.9 No Strict Construction .................................................................................................................... 30 15.10 Interpretation ................................................................................................................................... 30


TABLE OF CONTENTS (continued) Page

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15.11 Counterparts .................................................................................................................................... 30 15.12 Governing Law ............................................................................................................................... 30 15.13 Consent to Jurisdiction .................................................................................................................... 30


LIMITED LIABILITY COMPANY AGREEMENT

FOR


This Limited Liability Company Agreement (this “Agreement”) for Wanxiang Automotive Acquisition Company LLC (the “Company”) is made as of March 21, 2014 among Wanxiang Clean Energy USA LLC (“Wanxiang”), Fisker Automotive Holdings, Inc., a Delaware corporation (“FAH”), and any other Unit Holder (as defined below) who may from time to time become a Member (as defined below) in accordance with the provisions of this Agreement.

R E C I T A L S

A. The Company was formed as a Delaware limited liability company on February 18, 2014 by the filing of a Certificate of Formation (as in effect from time to time, the “Certificate of Formation”) with the Secretary of State of the State of Delaware.

B. FAH and Fisker Automotive, Inc., a Delaware corporation (together with FAH, the “Sellers”), filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court on November 22, 2013, which were jointly administered under the caption In re Fisker Automotive Holdings, Inc., Case No. 13-13087.

C. The Company is issuing Series A Preferred Units, Series B Preferred Units and Common Units to Wanxiang in exchange for cash, and is issuing Series B Preferred Units and Common Units to FAH pursuant to the Asset Purchase Agreement, dated as of January 27, 2014, as amended (the “Asset Purchase Agreement”), among the Sellers and Wanxiang America Corporation.

A G R E E M E N T S

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I DEFINITIONS

1.1 Certain Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:

(a) “Affiliate” of a Person means any other Person Controlling, Controlled by or under common Control with such Person.

(b) “Bankruptcy Court” has the meaning specified in the Asset Purchase Agreement.

(c) “Board” or “Board of Managers” means the individuals who are authorized to manage the business and affairs of the Company pursuant to ARTICLE VII hereof.

(d) “Capital Account” has the meaning given to it in Section 4.4.

(e) “Capital Account Excess” means, with respect to any Unit Holder, the excess (if any) of such Unit Holder’s Capital Account over such Unit Holder’s Target Capital Account.

(f) “Capital Account Shortfall” means, with respect to any Unit Holder, the excess (if any) of such Unit Holder’s Target Capital Account over such Unit Holder’s Capital Account.


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(g) “Capital Contribution” means, with respect to each Unit, a contribution to the capital of the Company, including the purchase price paid to the Company for such Unit and any other contribution made to the Company with respect to such Unit, which for the avoidance of doubt, with respect to the Series A Preferred Units, shall include any amounts that are paid to satisfy, or reduce the amount of, any indebtedness arising prior to the Closing (as defined in the Asset Purchase Agreement) and secured by a Permitted Lien (as defined in the Asset Purchase Agreement) described in sections (b) through (f) of the definition of such term in the Asset Purchase Agreement.

(h) “Class” means an outstanding class, series or other type of securities of the Company.

(i) “Code” means the Internal Revenue Code of 1986, as amended.

(j) “Common Manager” has the meaning given to it in Section 7.1.

(k) “Common Member” means a Common Unit Holder that is a Member.

(l) “Common Unit” means the limited liability company interests in the Company designated as “Common Units” with such rights, powers and duties as set forth in this Agreement.

(m) “Common Unit Equivalents” means any (a) securities that are pari passu with the Common Units with respect to Distributions and liquidation, including any “phantom” units, unit appreciation rights or similar rights that are linked to the value of Common Units, (b) any warrants, options or other rights to subscribe for, purchase or otherwise acquire any Common Units or securities that are pari passu with the Common Units with respect to Distributions and liquidation, or (c) any securities convertible into or exchangeable for Common Units or securities that are pari passu with the Common Units with respect to Distributions and liquidation.

(n) “Common Unit Holder” means an owner of one or more issued and outstanding Common Units, who may or may not also be a Member.

(o) “Company” has the meaning given to it in the preamble.

(p) “Company Group” means the Company and its Subsidiaries.

(q) “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise, and “Controlling” and “Controlled” shall have the correlative meanings.

(r) “Courier” has the meaning given to it in Section 15.3.

(s) “Delaware Act” has the meaning given to it in Section 2.1.

(t) “Depreciation” means for each fiscal year or other period, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to a Company asset for that year, except that if the Gross Asset Value of the asset differs from its adjusted basis for federal income tax purposes at the beginning of that year, Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization, or other cost recovery deduction for that year bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization, or other cost recovery deduction for that year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Board of Managers.

(u) “Designated Causes of Action” has the meaning specified in the Asset Purchase Agreement.


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(v) “Distribution” means any distribution by the Company to any Unit Holder, including distributions payable in cash, property or securities, except that none of the following shall be a Distribution: (i) any distribution of securities of any Class pro rata to holders of securities of such Class or (ii) subdivision (by Unit split or otherwise) or any combination (by reverse Unit split or otherwise) of any outstanding Units.

(w) “Estimated Tax Amount” has the meaning given to it in Section 5.3(d).

(x) “Excluded Offering” means any issuance of Units or Unit Equivalents: (i) to an Independent Third Party in consideration for the acquisition of an Independent Third Party’s business by a member of the Company Group (whether by acquisition of stock or assets, or by merger, consolidation or other similar transaction), the acquisition of any stock or assets of any Independent Third Party or the formation of a joint venture with any Independent Third Party, (ii) to the current or future officers, employees or directors (other than directors employed by a Wanxiang Company) of any member of the Company Group or to any entity controlled by any of such officers, employees or directors (other than directors employed by Wanxiang or an Affiliate of Wanxiang), or (iii) to any of the Company Group's lenders in connection with the incurrence, renewal or maintenance of indebtedness.

(y) “Exempt Transfer” means (i) any Transfer to a Permitted Transferee, Wanxiang (or an Affiliate of Wanxiang) or the Company, (ii) any Transfer in connection with a Public Offering or a Sale of the Company, (iii) any Transfer by Wanxiang, (iv) any Transfer, pursuant to the Plan, of Trust Common Units or Trust Series B Preferred Units by FAH to the Trust or (v) any Transfer in accordance with Section 8.2(f), 8.3 or 8.4, as the case may be, or pursuant to Section 9.1(a) or 9.1(b).

(z) “Family” of an individual means (i) that individual, (ii) that individual’s spouse (but only while married to that individual), (iii) that individual’s ancestors or descendents (natural and adopted), and (iv) any custodian or personal representative (in each case, in its capacity as such) for any Person described in clauses (i), (ii) or (iii) of this sentence.

(aa) “Family Group” of a Person means (i) a member of that Person’s Family, (ii) a Family Trust for that Person, or (iii) an entity that is (directly or indirectly) 100% owned by that Person, by that Person’s Family or by a Family Trust for that Person.

(bb) “Family Trust” for a Person means a trust primarily for the benefit of that Person’s Family.

(cc) “Gross Asset Value” means, with respect to any Company asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

(i) The initial Gross Asset Value of any asset contributed by a Unit Holder to the Company shall be the gross fair market value of such asset at the time of such contribution, as determined by the Board of Managers in its reasonable good faith discretion;

(ii) In order to preserve the economic interests of each Unit Holder in the Company, the Board of Managers will adjust the Gross Asset Values of all Company assets to equal their respective gross fair market values, as determined by the Tax Matters Partner in its reasonable good faith discretion, immediately prior to the following times: (i) the acquisition of additional Units in the Company by any new or existing Unit Holder in exchange for a contribution to the Company's capital, (ii) the issuance of Units for services, (iii) the distribution by the Company to a Unit Holder of more than a de minimis amount of Company property, (iv) the withdrawal of a Unit Holder, and (v) the liquidation of the Company;

(iii) The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Section 734(b) or 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining


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Capital Accounts pursuant to Treas. Reg. §1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this item ((iii)) to the extent an adjustment is made at that time pursuant to item (ii) of this definition;

(iv) The Gross Asset Value of any Company asset distributed in kind to any Unit Holder shall be adjusted to equal its gross fair market value, as determined by the Board of Managers in its reasonable good faith discretion, on the date of distribution;

(v) The initial Gross Asset Value of any asset contributed by Wanxiang or any of its Affiliates shall be deemed to be $0.

(dd) “Highest Marginal Rate” means the highest marginal individual U.S. federal, state and local income tax rates imposed by Section 1 of the Code and, if the Unit Holder’s income were subject to the alternative minimum tax, Section 55 of the Code, and by the equivalent provisions of state and local personal income tax law (taking into account the allocation and apportionment of the Company’s income to each state to which the Company’s income is ultimately allocated or apportioned).

(ee) “Holder Information” has the meaning given to it in Section 14.3.

(ff) “Incorporation Event” has the meaning given to it in Section 9.6.

(gg) “Indemnitee” has the meaning given to it in Section 10.2.

(hh) “Independent Third Party” means any Person that is not a Wanxiang Company.

(ii) “Initial Wanxiang Common Units” means the Common Units initially issued to Wanxiang, including any Units or securities of any successor issued or issuable with respect to such Common Units, including by way of a split, dividend, exchange or other recapitalization.

(jj) “Mail” has the meaning given to it in Section 15.3.

(kk) “Manager” has the meaning given to it in Section 7.1.

(ll) “Member” means a Unit Holder that has been admitted to the Company as a Member in accordance with the provisions hereof.

(mm) “Member Loan Notice” has the meaning given to it in Section 4.2.

(nn) “Net Income” and “Net Loss” mean, for each fiscal year or other period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

(i) Any income of the Company that is exempt from federal income tax shall be added to such taxable income or loss;

(ii) Any expenditures of the Company described in Code Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) of the Code expenditures pursuant to Treas. Reg. §1.704-1(b)(2)(iv)(i) shall be subtracted from such taxable income or loss;

(iii) Gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of the asset differs from its Gross Asset Value;


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(iv) In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year, computed in accordance with the terms hereof;

(v) In the event the Gross Asset Value of any Company asset is adjusted pursuant to the terms of this Agreement, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Income and Net Loss; and

(vi) to the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Sections 732(d), 734(b) or 743(b) is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis)

(vii) Notwithstanding any other provision herein, any items of income, gain, loss or deduction specially allocated pursuant to Sections 6.1(b) and 6.5 shall not be taken into account in computing Net Income or Net Loss.

(viii) The amounts of Company income, gain, loss or deduction available to be specially allocated pursuant to Section 6.1(b) shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vii) above.

(oo) “Nonrecourse Liability” has the meaning set forth in Treasury Regulations Section 1.704-2(b)(3).

(pp) “Permitted Person” has the meaning given to it in Section 14.3.

(qq) “Permitted Transferee” means (i) with respect to an individual, any Person in the Family Group of such individual and (ii) with respect to any other Person, any Affiliate of such Person.

(rr) “Person” means any individual, partnership, corporation, limited liability company, joint venture, trust, estate, association or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

(ss) “Piggyback Event” has the meaning given to it in Section 9.5.

(tt) “Plan” means the Debtors’ Joint Plan of Liquidation (as thereafter amended and supplemented from time to time) consistent in all respects with the Asset Purchase Agreement, as filed with and confirmed by the Bankruptcy Court on or after the date hereof.

(uu) “Preferred Manager” has the meaning given to it in Section 7.1.

(vv) “Preemptive Notice” has the meaning given to it in Section 9.3.

(ww) “Preferred Units” means the Series A Preferred Units and the Series B Preferred Units.

(xx) “Proposed Securities” has the meaning given to it in Section 8.4.

(yy) “Public Offering” means a public offering of Units (or shares or other securities of any successor of the Company) pursuant to an effective registration statement under the Securities Act (except any registration statement on Form S-4 or Form S-8 or any successor form).

(zz) “Regulation D” means Regulation D promulgated under the Securities Act, as amended from time to time, and any successor regulation thereto.


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(aaa) “Requisite Percentage of the Common Units” means with respect to the Members, the Member or Members owning a majority of the Common Units.

(bbb) “Requisite Percentage of the Series A Preferred Units” means, with respect to the Members, the Member or Members owning a majority of the Series A Preferred Units.

(ccc) “Requisite Percentage of the Trust Series B Preferred Units” means, with respect to the Members, the Member or Members owning a majority of the Trust Series B Preferred Units.

(ddd) “Requisite Percentage of the Trust Common Units” means, with respect to the Members, the Member or Members owning a majority of the Trust Common Units.

(eee) “ROFO Notice” has the meaning given in Section 8.3.

(fff) “ROFO Offer Period” has the meaning given in Section 8.3.

(ggg) “ROFO Solicitation Period” has the meaning given in Section 8.3.

(hhh) “ROFR Notice” has the meaning given in Section 8.4.

(iii) “ROFR Period” has the meaning given in Section 8.4.

(jjj) “Sale of the Company” means the Transfer (in a single transaction or a series of related transactions) of the Company to any Independent Third Party or group of Independent Third Parties pursuant to which such Independent Third Party or group of Independent Third Parties acquire (i) a majority of the Common Units (whether by merger, consolidation, sale, transfer, assignment, pledge, encumbrance or other disposition (irrespective of whether any of the foregoing are effected, with or without consideration, voluntarily or involuntarily, by operation of law or otherwise, or whether inter vivos or upon death) of Units, reorganization, recapitalization or otherwise), or (ii) all or substantially all of the assets of the Company and its Subsidiaries, determined on a consolidated basis.

(kkk) “Securities” means (i) all Units and (ii) all Unit Equivalents, including securities of the Company or any successor issued or issuable with respect to the securities referred to in clauses (i), or (ii) above, including by way of a split, dividend, exchange or other recapitalization.

(lll) “Securities Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder, in each case as amended from time to time, or any successor thereto.

(mmm) “Sellers” has the meaning given to it in the recitals.

(nnn) “Series A Liquidation Preference” means with respect to any Series A Preferred Unit, the Series A Unreturned Amount with respect to such unit, plus the Series A Preferred Return with respect to such Unit (calculated as if a distribution were being made at the time the Series A Liquidation Preference is required to be determined).

(ooo) “Series A Preferred Member” means a Series A Preferred Unit Holder that is a Member.

(ppp) “Series A Preferred Return” means, with respect to any Distribution, and each Series A Preferred Unit, the amount accruing on a daily basis on the Series A Unreturned Amount with respect to such Series A Preferred Unit, from (i) with respect to the first Distribution, the date such Series A Preferred Unit is first issued by the Company, and (ii) with respect to any other Distribution, the date of the immediately preceding distribution, at the rate of 12% per annum (calculated based on a year consisting of 365 days), compounding and accumulating on March 31, June 30, September 30 and December 31 of each year.


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(qqq) “Series A Preferred Unit Holder” means an owner of one or more issued and outstanding Series A Preferred Units, who may or may not also be a Member.

(rrr) “Series A Preferred Units” means Units of the Company designated as “Series A Preferred Units” upon issuance thereof and having the rights, powers, priorities, preferences, priorities and obligations set forth herein.

(sss) “Series A Unreturned Amount” as of any time of determination, and with respect to a Series A Preferred Unit, means (i) the aggregate amount of Capital Contributions made with respect to such Series A Preferred Unit prior to such time; plus (ii) the aggregate amount of Shortfall Amounts with respect to such Series A Preferred Unit prior to such time, minus, (iii) the aggregate amount distributed by the Company with respect to such Series A Preferred Unit pursuant to clause (ii) of Section 5.1(a) prior to such time.

(ttt) “Series B Liquidation Preference” as of any time of determination, and with respect to a Series B Preferred Unit, means (i) $31.25 million divided by the total number of outstanding Series B Preferred Units; minus, (ii) the aggregate amount distributed by the Company with respect to such Series B Preferred Unit pursuant to clause (iii) of Section 5.1(a) prior to such time.

(uuu) “Series B Preferred Unit Holder” means an owner of one or more issued and outstanding Series B Preferred Units, who may or may not also be a Member.

(vvv) “Series B Preferred Units” means Units of the Company designated as “Series B Preferred Units” upon issuance thereof and having the rights, powers, priorities, preferences, priorities and obligations set forth herein.

(www) “Shortfall Amount” has the meaning given in Section 5.1(a).

(xxx) “Subsidiary” means any Person of which the Company owns securities having a majority of the voting power in electing the board of directors (or similar governing body) directly or through one or more subsidiaries or, in the case of any limited liability company, partnership, limited liability partnership or other similar entity, securities conveying, directly or indirectly, a majority of the economic interests in such entity.

(yyy) “Target Capital Account” means at any point in time and with respect to any Unit Holder, an amount equal to the hypothetical distribution such Unit Holder would receive if all property of the Company were sold for cash equal to its Gross Asset Value (taking into account any adjustment to Gross Asset Value for such fiscal year or other period), all liabilities allocable to such property were then due and were satisfied according to their terms, all minimum gain chargebacks required by Section 6.1(b) hereof were made, and all remaining proceeds from such sale were distributed pursuant to Section 5.1. For the avoidance of doubt, amounts deemed constructively distributed pursuant to the computation of Target Capital Account balances shall not be treated as having been actually distributed for purposes of calculating a Unit Holder’s entitlements to actual distributions pursuant to Section 5.1.

(zzz) “Tax Amount” has the meaning given to it in Section 5.3(b).

(aaaa) “Tax Distributions” means the distributions described in Section 5.3(a).

(bbbb) “Tax Matters Partner” has the meaning given to it in Section 11.6.

(cccc) “Tax Shortfall Distributions” has the meaning given to it in Section 5.3(a).

(dddd) “Third Party Offer” has the meaning given in Section 8.3.


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(eeee) “Transfer” means any transfer, sale, assignment, pledge, lien, encumbrance or other disposition of any kind (including any of the foregoing that are effected or incurred by gift, for consideration, without consideration, voluntarily, involuntarily, for collateral purposes, upon foreclosure, in a judicial sale, incident to divorce, during lifetime, upon death, dissolution, wind-up or liquidation, by operation of law or otherwise). “Transfer” includes making a spouse the sole holder of record of securities, where (before doing so) that spouse is not the holder of record of the securities but has an undivided community property interest in such securities. A “Transfer” of a security also includes any swap or other transaction (including a short sale covered by that security) that transfers all or part of the economic consequence of ownership (or any other incident of ownership) of that security. “Transfer” does not, however, include a sale or exchange of any security occurring in and solely by virtue of a merger or consolidation to which the Company is a constituent party.

(ffff) “Treasury Regulations” means final or temporary income tax regulations promulgated under the Code and effective as of the date hereof. Such term shall, in the Board of Manager’s sole discretion, be deemed to include any future amendments to such regulations and any corresponding provisions of succeeding regulations (whether or not such amendments and corresponding provisions are mandatory or discretionary).

(gggg) “Trust” means the liquidating trust established by the Plan.

(hhhh) “Trust Common Unit Holder” means an owner of one or more issued and outstanding Trust Common Units, who may or may not also be a Member.

(iiii) “Trust Common Units” means the Common Units originally issued to FAH as part of the Equity Consideration (as defined in the Asset Purchase Agreement).

(jjjj) “Trust Series B Preferred Unit Holder” means an owner of one or more issued and outstanding Trust Series B Preferred Units, who may or may not also be a Member.

(kkkk) “Trust Series B Preferred Units” means the Series B Preferred Units as part of the Equity Consideration (as defined in the Asset Purchase Agreement).

(llll) “Unit” means (i) the limited liability company interests in the Company that are represented by Series A Preferred Units, Series B Preferred Units and Common Units, and (ii) any securities issued or issuable with respect thereto (including securities issued or issuable pursuant to a dividend, split, reclassification or like action, or pursuant to a merger or exchange, and including stock of any corporate successor of the Company).

(mmmm) “Unit Equivalents” means any (a) warrants, options or other rights to subscribe for, purchase or otherwise acquire any Units or (b) any securities convertible into or exchangeable for Units.

(nnnn) “Unit Holder” means an owner of one or more issued and outstanding Units, who may or may not also be a Member.

(oooo) “Wanxiang” has the meaning given in the preamble.

(pppp) “Wanxiang Company” means Wanxiang and any Affiliate of Wanxiang that is not a member of the Company Group.

(qqqq) “Winding Up Year” means the fiscal year or period in which the winding up of the Company is completed.


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ARTICLE II ORGANIZATIONAL MATTERS

2.1 Legal Status. The Company is a limited liability company organized and existing under the Delaware Limited Liability Company Act, as amended from time to time (the “Delaware Act”). The Company shall be governed by the Delaware Act and the provisions of this Agreement.

2.2 Name. The name of the Company is Wanxiang Automotive Acquisition Company LLC. The Board of Managers may change the name of the Company at any time and from time to time.

2.3 Purpose. The purpose of the Company is to engage in any lawful act or activity for which limited liability companies may be organized under the Delaware Act.

2.4 Term. The term of the Company commenced on the date specified in the Certificate of Formation filed for record in the Office of the Secretary of State of the State of Delaware and shall continue until the Company is dissolved pursuant to ARTICLE XIII hereof.

ARTICLE III MEMBERS AND UNITS

3.1 Ownership of Units. The Persons whose names are set forth on the signature page to this Agreement have been admitted as Members, and own the Units, as of the date of this Agreement, as is set forth on Exhibit A hereto. The Board of Managers may update Exhibit A hereto (without the consent of any Members) from time to time to reflect any permitted change in ownership of Units, including any permitted change as a result of any Transfer or issuance of Units in accordance with this Agreement. The ownership of Units shall not be certificated.

3.2 Units. The limited liability company interests in the Company shall be represented by three Classes: Series A Preferred Units, Series B Preferred Units and Common Units. The rights, powers, and duties of Series A Preferred Unit Holders, Series B Preferred Unit Holders and Common Unit Holders shall be as provided herein.

3.3 Additional Units. Subject to the provisions of Section 9.3, the Company may from time to time issue additional Units to such Persons as the Board of Managers shall determine, for such consideration as shall be determined by the Board of Managers. The Board of Managers may admit to the Company as Members those Persons to whom such additional Units are issued. Without limiting the foregoing, it is understood and agreed that the Company has the right to issue additional Series A Preferred Units to Wanxiang or its designees in exchange for additional Capital Contributions; provided that nothing herein shall require Wanxiang to make any additional Capital Contributions. Notwithstanding the foregoing, in no event shall the Company issue any additional Series B Preferred Units following the date hereof.

3.4 Voting Rights. The Series A Preferred Units and Common Units shall each be voting Units and shall be entitled to one vote per Unit on all matters on which holders of such Units are entitled to vote. The Series B Preferred Units shall not be entitled to any vote.

3.5 Actions Requiring Preferred Unit Approval. For as long as there is a Series A Unreturned Amount with respect to any Series A Preferred Unit, the Company shall not and shall not permit any Subsidiary to, in each case without the approval of the Requisite Percentage of the Series A Preferred Units:

(a) effect any Sale of the Company or any other lease, license or other disposition of all or substantially all of the assets of the Company or any of its Subsidiaries, or of any divisions of the Company or any of its Subsidiaries, in any transaction or series of transactions, unless, in each case, the amount payable to the Series A Preferred Holders in respect of each Series A Preferred Unit as a result of such transaction(s) is at least equal to the Series A Liquidation Preference with respect to such Series A Preferred Unit (determined as of the closing of any such transaction);


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(b) effect any liquidation or dissolution of the Company or any of its Subsidiaries, unless, in each case, the amount payable to the Series A Preferred Holders in respect of each Series A Preferred Unit in such liquidation or dissolution is at least equal to the Series A Liquidation Preference with respect to such Series A Preferred Unit (determined as of the date any such payment is made);

(c) effect any sale, recapitalization, reorganization, reclassification, consolidation or merger of the Company or any of its Subsidiaries, unless, in each case, the amount payable to the Series A Preferred Holders in respect of each Series A Preferred Unit as a result of such transaction is at least equal to the Series A Liquidation Preference with respect to such Series A Preferred Unit (determined as of the date an such payment is made);

(d) redeem, repurchase or otherwise acquire any Units, except as required pursuant to Section 5.4 of this Agreement;

(e) amend or modify this Agreement or the Certificate of Formation of the Company;

(f) amend or modify the member agreement, limited liability company agreement, bylaws, certificate of formation or similar organizational documents of any Subsidiaries of the Company;

(g) make any loan or advance to, or acquire any stock or other securities of, any Person;

(h) create, incur, assume, guarantee, refinance, materially modify, extend or prepay any indebtedness of the Company or any Subsidiary or grant an encumbrance over any assets of the Company or any Subsidiary, other than trade credit incurred in the ordinary course of business;

(i) make any investment other than pursuant to and in accordance with a written investment policy approved by the Board of Managers;

(j) enter into, modify or terminate any contract or agreement for which the annual amount due from or to the Company or any Subsidiary exceeds $250,000 or the term of such contract or agreement is greater than one year and is not terminable upon thirty (30) days or less notice without any fee, charge or penalty;

(k) approve an operating and capital expenditure budget for the Company and its Subsidiaries for each fiscal year;

(l) adopt or modify financial accounting or tax practices, including the establishment or modification of policies pertaining to financial reserves or changing the fiscal year;

(m) otherwise enter into or be a party to any transaction with any manager, director, officer, or employee of the Company or any of its Subsidiaries or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such Person, including without limitation any “management bonus” or similar plan providing payments to employees in connection with a Sale of the Company (as such term is defined herein), except for transactions resulting in payments to or by the Company or any of its Subsidiaries in an aggregate amount less than $100,000 per year which are made in the ordinary course of business and pursuant to reasonable requirements of the Company’s, and its Subsidiaries’, business and upon fair and reasonable terms that are approved by a majority of the Board of Managers;

(n) hire, terminate, or change the compensation of the executive officers, including approving any grants or awards of Units or Unit Equivalents, or enter into, modify or terminate any employment or consulting agreements related thereto;

(o) sell or acquire any asset in excess of $250,000;


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(p) form any direct or indirect Subsidiary of the Company that is not wholly owned, directly or indirectly, by the Company;

(q) adopt, amend or modify any equity incentive plan of the Company or any of its Subsidiaries, or increase the number of Units reserved for issuance or distribution to employees, directors or consultants of the Company or such Subsidiary thereunder;

(r) commence, settle or establish reserves with respect to any litigation, arbitration or administrative proceeding involving the Company or any of its Subsidiaries that involves an uninsured expense in excess of $250,000;

(s) liquidate, dissolve or wind-up the business or affairs of the Company or any of its Subsidiaries, file or seek protection pursuant to U.S. federal bankruptcy laws (whether voluntary or involuntary), make a general assignment for the benefit of its creditors, or commit to any of the foregoing;

(t) incur any capital expenditure more than 3% in excess of the amount budgeted therefor pursuant to a budget previously approved pursuant to this Section 3.5;

(u) appoint or change the appointment of the Company’s or any of its Subsidiaries’ auditors;

(v) obtain and maintain insurance policies, including, without limitation, the limits and exclusions thereof;

(w) approve any marketing or branding plan for the Company or any of its Subsidiaries and any investments made by the Company or any of its Subsidiaries;

(x) approve construction plans, specifications and schedules, and material modifications thereto, for the Company and any of its Subsidiaries if the cost or expenditure to be incurred in connection therewith are reasonably expected to exceed $250,000; or

(y) engage in any new line of business; or

(z) enter into any agreement to do any of the foregoing.

ARTICLE IV CAPITAL CONTRIBUTIONS

4.1 Capital Contributions.

(a) Each of the holders of Units has made one or more Capital Contributions to the Company equal in the aggregate to the amount set forth opposite such Unit Holder’s name on Exhibit A hereto.

(b) No Member or Unit Holder shall be required to make any contributions to the capital of the Company, except the contributions referred to in Section 4.1(a) above. Without limitation of the preceding sentence, no Unit Holder shall be required to pay to the Company or any other Unit Holder any deficit or negative balance which may exist from time to time in such Unit Holder’s Capital Account, including, without limitation, any deficit that may exist after the dissolution and complete liquidation of the Company.

4.2 Loans.

(a) Subject to the conditions set forth in this Section 4.2 and, if applicable, Section 9.3, any Unit Holder may make loans to the Company (“Member Loans”) at such times and on such terms as are agreed upon by the Board of Managers. Member Loans shall not be considered contributions of capital to the Company.


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(b) Subject to Section 4.2(c), prior to entering into a Member Loan, the Company shall deliver a written notice to all Common Unit Holders (other than any Common Unit Holder proposing to make such Member Loan) that discloses in detail the principal amount and proposed terms of such proposed Member Loan (a “Member Loan Notice”). Each Common Unit Holder receiving a Member Loan Notice shall be entitled to make a Member Loan on the same terms and conditions specified in the Member Loan Notice and in a principal amount of up to such Common Unit Holder’s pro rata share (determined based on such Member’s pro-rata ownership of the outstanding Common Units of the Company on a fully-diluted basis taking into account the conversion or exercise of all Common Unit Equivalents then outstanding) of the principal amount set forth in the Member Loan Notice by delivering written notice of such election to the Company prior to the close of business on the date thirty (30) days following delivery of the Member Loan Notice. Following such 30-day period, the Company shall be entitled to enter into the proposed Member Loan described in the Member Loan Notice, in principal amount equal to the principal amount described in the Member Loan Notice minus the aggregate principal amount of the Member Loans that the Company enters into with Common Unit Holders pursuant to the preceding sentence.

(c) The Members hereby acknowledge and agree that Wanxiang, due to timing constraints, confidentiality considerations, or other reasons, may make a Member Loan in advance of the Company’s complying with the requirements of Section 4.2(a), and each Member consents to such Member Loan, provided that, as promptly as practicable thereafter, the Company complies with the requirements of Section 4.2(b) with respect thereto.

4.3 Return of Contributions; Interest. A Unit Holder shall not have a separate right to receive a return of such Unit Holder’s Capital Contributions (including such Unit Holder’s Initial Capital Contribution) or to receive interest thereon, but shall have such distribution rights as are provided herein.

4.4 Capital Accounts. A capital account (“Capital Account”) shall be established and maintained for each Unit Holder in accordance with the following provisions:

(a) To each Unit Holder’s Capital Account shall be credited (i) the amount of cash and the Gross Asset Value of any other property contributed to the capital of the Company, (ii) allocations to such Unit Holder of Net Income pursuant to Section 6.1, (iii) any items in the nature of income or gain that are specially allocated to such Unit Holder pursuant to ARTICLE VI to the extent not already allocated pursuant to Section 6.1, and (iv) the amount of any Company liabilities assumed by such Unit Holder or that are secured by any Company property distributed to such Unit Holder to the extent the value of such property is equal to or greater than such liability at the time of such distribution.

(b) To each Unit Holder’s Capital Account there shall be debited (i) the amount of cash and the Gross Asset Value of any property (other than cash) distributed to such Unit Holder by the Company, (ii) allocations to such Unit Holder of Company Net Loss pursuant to Section 6.1, (iii) any items of deductions or losses that are specially allocated to such Unit Holder pursuant to ARTICLE VI to the extent not already allocated pursuant to Section 6.1, and (iv) the amount of any liabilities of such Unit Holder assumed by the Company or that are secured by property contributed to the Company by such Unit Holder.

(c) If Gross Asset Values of Company property are adjusted upon the occurrence of certain events in accordance with this Agreement (including without limitation pursuant to clause (ii) of the definition of “Gross Asset Value”), the Tax Matters Partner shall adjust the Capital Accounts of each Unit Holder immediately prior to the occurrence of the event that triggers the Gross Asset Value adjustment to reflect such revaluation on the Company’s books. The Capital Accounts shall be adjusted to reflect the manner in which the unrealized income, gain, loss or deduction inherent in such property would be allocated among the Unit Holders pursuant to the terms of this Agreement if there were a taxable disposition of such property for such Gross Asset Value on that date. Furthermore, the Tax Matters Partner, in a manner consistent with Treasury Regulation §1.704-1(b)(2)(iv)(g), shall adjust the Capital Accounts as necessary to reflect any items of Net Income or Net Loss that are computed based on the Gross Asset Value of the Company property.


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(d) In the event Units in the Company are Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the Transferred Units. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulation §1.704-1(b) and shall be interpreted and applied in a manner consistent with such Treasury Regulations.

ARTICLE V DISTRIBUTIONS

5.1 General Distributions.

(a) Subject to Section 5.1(b) and Section 5.3 regarding Tax Distributions, the Board of Managers may in its sole discretion cause the Company to make Distributions at any time or from time to time to the Unit Holders, which shall be made according to the following order of priority:

(i) First, to the Series A Preferred Unit Holders (pro rata in accordance with the outstanding Series A Preferred Return due to such holders as of the time of the applicable Distribution) until such time as the Company distributes solely as a result of such Distribution an amount in respect of the Series A Preferred Units equal to the “Series A Preferred Return” with respect to such Distribution; provided, however, that if with respect to any Distribution, the aggregate amount paid by the Company pursuant to this clause (i) is less than the “Series A Preferred Return” with respect to such Distribution, the amount of the shortfall with respect to each Series A Preferred Unit shall be deemed a “Shortfall Amount” with respect to such Series A Preferred Unit;

(ii) Second, to the Series A Preferred Unit Holders (pro rata in accordance with their respective Series A Unreturned Amounts attributable to their Series A Preferred Units) until such time as the Company has made distributions pursuant to this Section 5.1(a)(ii) in respect of the Series A Preferred Units in a cumulative aggregate amount equal to 100% of the Series A Unreturned Amounts;

(iii) Third, to the Series B Preferred Unit Holders (pro rata in accordance with their ownership of the Series B Preferred Units) until such time as the Company has made distributions pursuant to this Section 5.1(a)(iii) in respect of the Series B Preferred Units in a cumulative aggregate amount equal to $31.25 million;

(iv) Thereafter, to the holders of the Common Units pro rata in accordance with their respective ownership of such Common Units.

(b) All proceeds received in connection with the Sale of the Company will be apportioned and distributed among the participating Unit Holders pursuant to this Section 5.1, whether the Sale of the Company takes the form of an asset sale, sale of the Units or otherwise.

5.2 Timing of Distributions.

(a) Subject to Section 5.1(b), this Section 5.2, Section 5.3 and applicable law, including Section 18-607 of the Delaware Act, the Board of Managers shall determine whether, when and to what extent Distributions shall be made.

(b) A Distribution pursuant to Section 5.1 or Section 5.3 shall be made to the Persons shown on the Company’s books and records as Unit Holders as of the date of such Distribution.

5.3 Tax Distributions.

(a) Notwithstanding Sections 5.1 and 5.2(a), at least ten business days before each date prescribed by the Code for calendar-year corporations to pay quarterly installments of estimated tax, the Company shall distribute to each Unit Holder an amount of cash equal to the Unit Holder’s allocable share of the excess of (i) the Estimated


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Tax Amount attributable to the holders of Units for the quarter of the fiscal year of the Company with respect to which such Distribution is being made and all previous quarters of such fiscal year over (ii) the amount of Distributions (if any) previously made pursuant to this Section 5.3(a) for such fiscal year of the Company (“Tax Distributions”). If (x) the aggregate amount of such Tax Distributions with respect to any fiscal year of the Company is less than (y) the Company’s Tax Amount attributable to the holders of Units for such fiscal year, the Company shall distribute an amount of cash equal to the balance of such Tax Amount (“Tax Shortfall Distributions”) to the holders of Units in proportion to each such holder’s share of deficit of (x) compared to (y). The Company shall make such Tax Shortfall Distributions on or before the date prescribed by the Code (without extensions) for calendar-year corporations to file federal income tax returns.

(b) The Company’s “Tax Amount” for a fiscal year of the Company shall be the federal, state, local and foreign income taxes which would be payable for the Company if the Company were taxed for such fiscal year at the Highest Marginal Rate (determined without regard to tax rate or tax benefit “make-up” provisions, such as in Section 11(b)(1) and Section 151(d)(3) of the Code) applicable to any Unit Holder or its direct or indirect flow-through owners on the Company’s taxable income for the Company’s fiscal year. The amounts of tax withheld by the Company in respect of income taxes imposed on Unit Holders (or owners directly or indirectly of such Unit Holders) shall be credited against Distributions to such Unit Holders.

(c) The Company’s Tax Amount shall be reasonably determined initially by the Board of Managers but shall be subject to subsequent adjustment pursuant to audit, litigation, settlement, amended return, or the like.

(d) The Company’s “Estimated Tax Amount” for the Company’s fiscal year (or fiscal period) shall be the Company’s Tax Amount for such fiscal year (or fiscal period) as reasonably estimated from time to time by the Board of Managers. In making such estimate, the Board of Managers shall take into account amounts shown on IRS Form 1065 to be filed by the Company and similar state or local forms filed by the Company for the preceding fiscal year and other adjustments as in the reasonable judgment of the Board of Managers are necessary or appropriate to reflect the estimated operations of the Company for the fiscal year (or fiscal period).

(e) For purposes of this Section 5.3, the Company’s Tax Amount and Estimated Tax Amount that is deemed to be attributable to the Unit Holders shall be reasonably determined, in good faith, by the Board of Managers based upon the income, gains, deductions, losses and credits allocable to such Unit Holder pursuant to Sections 6.4 and 6.5 for the fiscal year (or fiscal period) in question.

(f) Any Tax Distributions made pursuant to this Section 5.3 shall be recouped by the Company as offsets against subsequent distributions under this Agreement (other than Tax Distributions under this Section 5.3).

(g) For purposes of the foregoing: (i) penalties will be excluded, (ii) the benefits of (A) the deductibility of state income taxes and allowable credits in effect for each of the respective tax periods will be taken into account and (B) hypothetical net operating loss carry-forwards attributable to the Company will be taken into account (in case of both (A) and (B), calculated on a basis consistent with the assumption that no Unit Holder will be deemed to have any income, gain, loss, deduction or credit from any source other than such Unit Holder’s interest in the Company); (iii) the benefits of net operating losses arising during any period shall be determined without regard to any elections relating to carry backs and carry forwards, (iv) the benefits of all other carry forwards and carry backs shall be determined in a manner consistent with (ii)(B) and (iii) above; and (v) computations shall be made on an annual basis, but interim calculations may be made on a good faith basis to permit Unit Holders to make estimated tax payments from time to time.

(h) Notwithstanding anything to the contrary herein, in the event that any state, local or other income tax imposed on the Company as an entity (such as the Illinois Personal Property Replacement Income Tax) is reduced by reason of the holding of an interest by any Unit Holder, no part of the expense of the Company for such tax shall not be allocated to such Unit Holder. In addition, if the Company is obligated under applicable law to pay any amount to a governmental agency because of a Unit Holder’s status as a Unit Holder of the Company for federal or state withholding or other taxes (such as the Illinois Personal Property Replacement Income Tax), such amount shall reduce the distributions which would otherwise be made to such Unit Holder pursuant to this ARTICLE V.


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(i) Notwithstanding anything to the contrary herein, no Tax Distributions shall be made in connection with or as a result of a Sale of the Company or any liquidation or merger of the Company.

5.4 Preferred Unit Redemption. In the event the Company receives proceeds from Designated Causes of Action (it being understood, for the avoidance of doubt, that receipt of any such proceeds is subject to the terms and conditions of the Asset Purchase Agreement, including Section 7.4 thereof), it shall use such proceeds to purchase and redeem from Wanxiang, at a price equal to the Series A Liquidation Preference per Series A Preferred Unit so purchased and redeemed, the maximum number of Series A Preferred Units that may be purchased and redeemed with such proceeds. In addition, the Company may, if authorized by the Board of Managers, use the proceeds of any financing or Public Offering, or other sources of available cash, to (i) redeem Series A Preferred Units at a price per Unit equal to the Series A Liquidation Preference, and (ii) in the event the aggregate Series A Liquidation Preference is zero, redeem Series B Preferred Units at a price per Unit equal to the Series B Liquidation Preference. Notwithstanding any provision to the contrary herein, neither any redemption nor the payment of the purchase price therefor in accordance with this Section 5.4 shall entitle any Person to have any other Units redeemed or give rise to any right to any distribution.

ARTICLE VI ALLOCATIONS AND OTHER MATTERS

6.1 Allocations of Net Income and Net Loss.

(a) Except as otherwise provided in this Article VI, Net Income and Net Losses of the Company for each fiscal year or portion thereof as the case may be shall be allocated as follows:

(i) Net Income for any fiscal year or other period shall be allocated to the Unit Holders having Capital Account Shortfalls for such fiscal year or other period (as determined after taking into account all contributions, distributions and special allocations during such fiscal year or other period) to the extent of, and in proportion to, their then respective Capital Account Shortfalls.

(ii) Net Losses for any fiscal year or other period shall be allocated to the Unit Holders having Capital Account Excesses for such fiscal year or other period (as determined after taking into account all contributions, distributions and special allocations during such fiscal year or other period) to the extent of, and in proportion to, their then respective Capital Account Excesses.

(b) The provisions of this Agreement are intended to comply with Section 704 of the Code and the Treasury Regulations thereunder and shall be interpreted and applied in a manner consistent with such Section and such Treasury Regulations. The Board of Managers shall make such allocations as may be required in order to comply with Section 704 of the Code and the Treasury Regulations thereunder, including any allocations necessary to satisfy the minimum gain and partner minimum gain chargeback requirements of Section 1.704-2 of the Treasury Regulations and the requirements for a “qualified income offset” as defined in Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations.

6.2 Intentionally Deleted.

6.3 Other Allocation Rules.

(a) In the event Unit Holders are admitted to the Company pursuant to this Agreement on different dates, the Company constituent items of income, gain, loss, deduction and credit allocated to the Unit Holders for each Company taxable year during which Unit Holders are so admitted shall be allocated among the Unit Holders by taking into account their varying interests during such year using any convention permitted by Code Section 706 and selected by the Board of Managers.

(b) In the event a Unit Holder Transfers its Units during a Company taxable year, the allocation of Company constituent items of income, gain, loss, deduction and credit allocated to such Unit Holder and its


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transferee for such Company taxable year shall be made between such Unit Holder and its transferee in accordance with Code Section 706 using any convention permitted by Code Section 706 and selected by the Board of Managers.

(c) Nonrecourse Liabilities will be allocated among the Unit Holders based upon any methodology permitted under Treasury Regulations §1.752-3.

6.4 Tax Allocations.

(a) Items of income, gain, loss, and deduction that are recognized by the Company shall be allocated, for federal, state and local income tax purposes, among the Unit Holders consistent with the allocations of such items under Section 6.1(a) and 6.1(b).

(b) To the extent appreciation or depreciation in Gross Asset Values is reflected in Capital Accounts prior to recognition for tax purposes, allocations shall be made in accordance with Code Section 704(c), the Treasury Regulations thereunder and Treasury Regulations Section 1.704-1(b)(4)(i), provided that the Board of Managers shall determine the method of making allocations that implement the provisions of Code Section 704(c) among the permitted methods described in Treasury Regulations Section 1.704-3.

(c) Any elections or other decisions relating to such allocations shall be made by the Board of Managers in any manner that reasonably reflects the purpose and intent of this Agreement. Allocations pursuant to this Section 6.4 are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Unit Holder’s Capital Account or share of Net Income, Net Loss or Distributions pursuant to any provisions of this Agreement.

6.5 Offsetting Allocations. If and to the extent that any Unit Holder is deemed to recognize any item of income, gain, deduction or loss as a result of any transaction between such Unit Holder and the Company pursuant to Sections 83, 482, or 7872 of the Code or any similar provision now or hereafter in effect, the Board shall use its reasonable best efforts to allocate any corresponding Net Income or Net Loss of the Company to the Unit Holder who recognizes such item in order to reflect the Unit Holders’ economic interest in the Company.

6.6 Indemnification and Reimbursement for Payments on Behalf of a Unit Holder. If the Company is required by law to make any payment to a Governmental Entity that is specifically attributable to a Unit Holder or a Unit Holder’s status as such, (including, without limitation, federal withholding taxes, state personal property taxes, and state unincorporated business taxes such as the Illinois Personal Property Tax), then such Unit Holder shall indemnify and reimburse the Company in full for the entire amount paid (including interest, penalties and related expenses). The Board may offset Distributions to which a Person is otherwise entitled under this Agreement against such Person’s obligation to indemnify and reimburse the Company under this Section 6.6. A Unit Holder’s obligation to indemnify and reimburse the Company under this Section 6.6 shall survive the termination, dissolution, liquidation and winding up of the Company, and for purposes of this Section 6.6, the Company shall be treated as continuing in existence. The Company may pursue and enforce all rights and remedies it may have against each Unit Holder under this Section 6.6, including instituting a lawsuit to collect such indemnification and contribution with interest calculated at a rate equal to the Base Rate plus three percentage points per annum (but not in excess of the highest rate per annum permitted by law). To the extent that any Unit Holder pays interest under this Section 6.6, it shall not be treated as a Capital Contribution but shall be treated as interest income of the Company and shall be distributed to the Unit Holders (other than the Unit Holders who paid the interest) in accordance with Sections 5.1. For the avoidance of doubt, amounts indemnified and reimbursed to the Company pursuant to this Section 6.6 shall not be treated as Capital Contributions.

ARTICLE VII MANAGEMENT

7.1 Management of the Company.

(a) The business and affairs of the Company shall be managed by or under the direction of its Board of Managers. Except where the approval of the Members is expressly required by this Agreement or by non-


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waivable provisions of the Delaware Act, the Board of Managers shall have full and complete authority, power and discretion to direct, manage and control the business, affairs and properties of the Company.

(b) As used herein, “Manager” means a member of the Board of Managers, “Preferred Managers” means the Managers elected by the Requisite Percentage of the Series A Preferred Units and “Common Managers” means the Managers elected by the Requisite Percentage of the Common Units; provided that, so long as the Wanxiang Companies own at least fifty percent (50%) of the Initial Wanxiang Common Units, Wanxiang shall be entitled to designate a number of Common Managers comprising a majority of the Common Managers (the “Wanxiang Managers”), and the remaining Common Managers shall be elected by the Requisite Percentage of the Common Units. Initially, the Board of Managers shall consist of three (3) Managers, one (1) of whom shall be a Preferred Manager, and two (2) of whom shall be Common Managers. The initial Preferred Manager shall be Pin Ni, and the initial Common Managers shall be Daniel Li and Pingyi Li. Thereafter, (i) so long as the Wanxiang Companies own at least fifty percent (50%) of the Initial Wanxiang Common Units, the Board of Managers shall consist of that number of Managers as shall be designated by Wanxiang, and at such time as the Wanxiang Companies own fifty percent (50%) or less of the Initial Wanxiang Common Units, the Board of Managers shall consist of that number of Managers as shall be designated by the Member or Members holding a Requisite Percentage of the Common Units from time to time, (ii) the number of Preferred Managers shall be the number that least exceeds one-third of the total number of Managers, provided that if the Series A Unreturned Amount is $0, there shall be zero Preferred Managers, and (iii) the number of Common Managers shall be the number of Managers minus the number of Preferred Managers. The Member or Members holding a Requisite Percentage of the Common Units shall have the right to remove any Common Manager from the Board of Managers at any time, and to fill any vacancy arising from time to time with respect to any of the Common Managers, provided that, so long as the Wanxiang Companies own at least fifty percent (50%) of the Initial Wanxiang Common Units, Wanxiang shall have the sole right to remove any Wanxiang Manager and to fill any vacancy arising from time to time with respect to any of the Common Managers if the number of Wanxiang Managers does not (or, following the filling of such vacancy, would not) comprise a majority of the Common Managers. The Member or Members holding a Requisite Percentage of the Series A Preferred Units shall have the right to remove any Preferred Manager from the Board of Managers at any time, and to fill any vacancy arising from time to time with respect to any of the Preferred Managers.

(c) Subject to the remainder of this Section 7.1(c), (i) each Preferred Manager shall, in the performance of his or her duties as such, owe to the Preferred Members (and only to such Preferred Members), fiduciary duties, including duties of loyalty and care, of the type owed by the directors of a corporation to the stockholders of such corporation under the laws of the State of Delaware and (ii) each Common Manager shall, in the performance of his or her duties as such, owe to the Common Members (and only to such Common Members), fiduciary duties, including duties of loyalty and care, of the type owed by the directors of a corporation to the stockholders of such corporation under the laws of the State of Delaware. The Company and each Member acknowledge that the Common Managers and Preferred Managers elected by the Members owning Common Units or Series A Preferred Units, as applicable, or that are employees of any such Members, are elected to represent and serve the interest of the Class that elected such Manager and shall only have fiduciary duties to the holders of such Units, and shall not have duties (including fiduciary duties or otherwise) to the holders of any Class that did not elect such Manager; provided that the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing. No Manager shall have any liability to the Company or to any Member as the result of any action or omission as a Manager which the Manager reasonably believes to be in the best interest of the class of Members that elected such Manager. The Company and the Members hereby agree that a Member or Manager or other Person shall not be liable to the Company or to another Member or Manager or to another Person that is a party to or is otherwise bound by this Agreement for breach of fiduciary duty for the Member’s or Manager’s or other Person's good faith reliance on the provisions of this Agreement.

7.2 Powers and Authorities of the Board of Managers. Management of the Company shall be vested in the Board of Managers. The Board of Managers shall manage the day-to-day business and affairs of the Company. Except as otherwise provided in this Agreement, all decisions, determinations, actions, approvals or consents relating to the management and control of the conduct of the business of the Company and its affairs shall be made by the Board of Managers, including decisions, determinations, actions, approvals and consents relating to any of the following: (i) the selection of representatives of the Company to serve on the management, supervisory or other governing boards or bodies of any company or other organization in which the Company owns an interest;


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(ii) the hiring and termination of employees of the Company Group; (iii) the determination of compensation for members of the Company Group’s executive management; and (iv) distributions to Members.

7.3 Limited Liability Company Qualifications and Filings. The Board of Managers shall cause to be filed such certificates or documents as may be determined by the Board of Managers in their sole discretion to be necessary or appropriate for the continuation, qualification and operation of a limited liability company in the State of Delaware and any other jurisdiction in which the Company may elect to do business.

7.4 Resignation. Any Manager may resign at any time by giving written notice to the Company. The resignation of a member of the Board of Managers who is also a Member shall not affect such individual’s rights as a Member and shall not constitute a withdrawal of a Member.

7.5 Vacancies. Any vacancy occurring for any reason in any Manager position shall be filled in accordance with Section 7.1.

7.6 Expenses of the Board of Managers. The Company shall pay the reasonable out-of-pocket expenses incurred by a Manager in connection with discharging any of his duties as a member of the Board of Managers upon submission to the Company of appropriate receipts or other evidence of payment.

7.7 Required Approvals and Notifications. Unless otherwise provided in this Agreement and subject to applicable law, any decision, action, approval or consent required or permitted to be taken by the Board of Managers, may be taken by the Board of Managers only by (1) the affirmative vote of a majority of the Managers, at a meeting of the Board of Managers where a majority of the Board of Managers is present in person, or (2) without such meeting, without prior notice and without a vote, by written consent, setting forth the action so taken, signed by a majority of the Managers; provided that all other Managers shall be given prompt notice of the action so taken. The Members taking any action, approval or consent required or permitted to be taken hereunder shall promptly notify the other Members of such action, approval or consent. For purposes of this Section 7.7, a Person shall be deemed to be present in person if such Person is present by means of telephone, video-conferencing or any comparable arrangement. No Manager or Member, in its capacity as such, shall have the authority to bind the Company except to the extent expressly authorized to do so by resolution of the Board of Managers; provided that nothing in this sentence shall affect the validity of any decision, action, approval or consent of the Board of Managers or Members adopted in the manner contemplated by subsections (a) or (b) of this Section 7.7. No vote, approval or consent by any Member or Unit Holder is needed for: (i) any conversion of the Company into a different form of entity as contemplated by Section 18-216 of the Act, provided that in any such conversion all Units of the same class are treated in an identical manner; or (ii) any compromise of any obligation of a Member (or other Unit Holder) to make a contribution (or to return money or other property paid or distributed in violation of the Act).

7.8 Appointment of Officers. The Board of Managers may appoint such officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Managers.

7.9 Term of Office, Removal and Vacancies. Any officer elected or appointed by the Board of Managers may be removed at any time by the Board of Managers. Any vacancy occurring in any office of the Company may be filled by the Board of Managers.

ARTICLE VIII RESTRICTIONS ON TRANSFERS

8.1 Restrictions. No holder of Securities (including a Permitted Transferee) may Transfer Securities except (a) in an Exempt Transfer, or (b) with the prior written consent of the Board of Managers (which consent may be withheld for any or no reason).


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8.2 Other Restrictions on Transfer.

(a) Any Person (including any Permitted Transferee) to whom Securities are to be Transferred (except pursuant to a Public Offering or Sale of the Company) shall execute and deliver, as a condition to such Transfer, all documents deemed reasonably necessary by the Company, in consultation with its counsel, to evidence such party’s joinder in and to this Agreement, including a Joinder in substantially the form of Exhibit B attached hereto. Each such transferor of Securities shall, prior to the Transfer, cause the transferee thereof to so execute and deliver such documents and any spousal consent required by Section 8.2(b).

(b) No Securities may be Transferred to any Person (including any Permitted Transferee) if the proposed transferee is a married individual, unless, prior to that Transfer, the transferee furnishes a spousal consent (in form and substance satisfactory to the Company) whereby the spouse of that transferee agrees that his or her community property interest, if any, in the Securities held from time to time by the transferee is subject to this Agreement.

(c) No Transfer of Securities shall be permitted, and no transferee (including a Permitted Transferee) of Securities shall be admitted to the Company as a Member, if, in the opinion of the Board of Managers, such Transfer or admission alone or in conjunction with one or more other Transfers or admissions would (i) result in a violation of applicable securities laws, (ii) result in the Company being taxable as a corporation, (iii) cause a termination of the Company under section 708(b)(1)(B) or any other section of the Code, (iv) result in the Company becoming a “publicly traded partnership” within the meaning of sections 469(k)(2) and 7704(b) of the Code, or (v) require the Company to register under the Investment Company Act of 1940, as amended; provided, however, that the Board of Managers may waive the application of this Section 8.2(c) with respect to any Transfer.

(d) No Transfer of Securities shall be permitted to any Person (including a Permitted Transferee) who is a competitor of the Company Group; provided, however, that the Board of Managers may waive the application of this Section 8.2(d) with respect to any Transfer. A reasonable determination by the Board of Managers regarding whether a Person is such a competitor shall be binding and conclusive on the Unit Holders; provided, further, that in no event shall Wanxiang or any of its Affiliates be deemed a competitor of the Company Group.

(e) Except as otherwise provided herein, Securities that are Transferred shall thereafter continue to be subject to all restrictions (including restrictions on Transfer imposed by this ARTICLE VIII) and obligations imposed by this Agreement with respect to Units and Transfers thereof.

(f) The Trust shall not Transfer Units to the beneficiaries of the Trust, pursuant to a dissolution, liquidation, winding up, termination or otherwise, directly or indirectly, without the prior written consent of Wanxiang; provided that, upon dissolution of the Trust, the Trust shall be permitted to Transfer all, but not less than all, of its Units to one entity, the beneficial owners of which consist solely of the beneficiaries of the Trust; provided, further, that such entity shall not thereafter Transfer Units to its beneficial owners, directly or indirectly, without the prior written consent of Wanxiang.

8.3 Rights of First Offer.

(a) If any holder of Common Units or Series B Preferred Units other than a Wanxiang Company desires to Transfer any Units other than (i) in an Exempt Transfer or (ii) pursuant to Section 8.2(f), 8.4 or 9.1, such Seller must first deliver a written notice to Wanxiang (a “ROFO Notice”) that discloses such intent. During the thirty (30) day period after such ROFO Notice is received by Wanxiang (the “ROFO Offer Period”), Wanxiang (or its designee) may submit to such holder an offer to purchase all, but not less than all, of such Units for cash, which offer shall specify the purchase price and other economic terms of the offer. If Wanxiang (or its designee) submits such an offer, such holder shall have a thirty (30) day period after receipt thereof to determine whether to accept such offer. If such holder notifies Wanxiang (or its designee) that it accepts such offer during such thirty (30) day period, the Transfer of such Units to Wanxiang (or its designee) shall be consummated as soon as practical following the delivery of such notice,


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but in no event shall Wanxiang (or its designee) be required to consummate such Transfer prior to the close of business on the sixtieth (60th) day following delivery of its offer to purchase such Units. Wanxiang (or its designee) shall be entitled to receive customary representations and warranties from such holder as to ownership, title and authority to Transfer regarding such Units and to receive such other instruments as may be reasonably necessary to effect the Transfer of such Units. If such holder notifies Wanxiang that it rejects such offer or fails to accept such offer prior to the expiration of such thirty (30) day period, or the ROFO Offer Period expires without Wanxiang (or its designee) submitting an offer, such holder shall be permitted, for a period of ninety (90) days thereafter (the “ROFO Solicitation Period”), to solicit and receive Third Party Offers (as defined below) with respect to such Units. If such holder does not receive and accept a Third Party Offer meeting the requirements of Section 8.3(b) below and complete the sale of such Units pursuant thereto, in each case within the ROFO Solicitation Period, then it (i) shall not consummate a transaction with respect to such Third Party Offer, and (ii) shall not Transfer such Units except in accordance with the provisions of Section 8.2(f) or 8.4.

(b) Except in the case of a Transfer pursuant to Section 8.4, if any holder of Common Units or Series B Preferred Units other than a Wanxiang Company receives a bona fide written offer (a “Third Party Offer”) to purchase for cash any of the Units held by it, it shall not enter into a definitive agreement with respect to, or consummate the transactions contemplated by, such Third Party Offer unless (i) such third Person is acting as principal and dealing at arm’s length with such holder, (ii) such Third Party Offer was submitted during the ROFO Solicitation Period, (iii) the economic terms of the Third Party Offer (including purchase price) are no less favorable (individually and in the aggregate) to such holder than those, if any, which were most recently offered by Wanxiang (or its designee) during the ROFO Offer Period, (iv) the definitive agreement with respect to such Third Party Offer requires completion of the sale of such Units to be completed prior to the expiration of the ROFO Solicitation Period, and (v) the Transfer of such Units to the purchaser(s) thereof is permitted by, and meets the requirements of, Sections 8.1 and 8.2 of this Agreement.

8.4 Rights of First Refusal. If any holder of Common Units or Series B Preferred Units other than a Wanxiang Company has previously delivered a ROFO Notice to Wanxiang pursuant to Section 8.3(a), but has failed to complete a Transfer of all of the Units in accordance with the procedures set forth in Section 8.3, then, if it desires to Transfer any Units (the “Proposed Securities”) other than in an Exempt Transfer, it must first deliver a written notice to Wanxiang (a “ROFR Notice”) that discloses in detail the identity of the proposed transferee (including all parties that directly or indirectly hold interests in such Person), the proposed number, amount and type of the Proposed Securities to be Transferred, all of the other proposed terms and conditions of the proposed Transfer, and any other information reasonably requested by Wanxiang, together with a complete and accurate copy of the proposed transferee’s written offer to purchase the Proposed Securities from such holder. Upon delivery of the ROFR Notice to Wanxiang, Wanxiang (or its designee) may elect to purchase all (but not less than all) of the Proposed Securities at the price and on the terms specified in the Transfer Notice, by delivering written notice of such election to such holder prior to the close of business on the date thirty (30) days following delivery of the ROFR Notice (the “ROFR Period”). If Wanxiang (or its designee) has elected to purchase the Proposed Securities, the Transfer of the Proposed Securities to Wanxiang (or its designee) shall be consummated as soon as practical following the delivery of the election notice, but in no event shall Wanxiang (or its designee) be required to consummate such Transfer prior to the close of business on the sixtieth (60th) day following delivery of the ROFR Notice. Wanxiang (or its designee) shall be entitled to receive customary representations and warranties from such holder as to ownership, title and authority to Transfer regarding the Proposed Securities and to receive such other instruments as may be reasonably necessary to effect the Transfer of the Proposed Securities. If Wanxiang (and any designee) have failed to elect to purchase all of the Proposed Securities prior to the expiration of the ROFR Period, then such holder may Transfer all (but not less than all) of the Proposed Securities to the proposed transferee at a price not less than the price specified in the Transfer Notice, and on terms no less favorable (individually or in the aggregate) to such holder than the terms specified in the Transfer Notice, within ninety (90) days following the expiration of the ROFR Period. Any Proposed Securities not Transferred within such ninety day period shall be subject to the provisions of this Section 8.4 with respect to any subsequent Transfer prior to the fifth (5th) anniversary of the date hereof, and subject to the provisions of Section 8.3 with respect to any subsequent Transfer on or after the fifth (5th) anniversary of the date hereof.


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8.5 Duration of ARTICLE VIII. Notwithstanding anything to the contrary contained in this Agreement, the provisions of this ARTICLE VIII shall terminate upon (and shall not apply to or restrict in any way) the consummation of a Public Offering.

ARTICLE IX CO-SALE RIGHTS, SALE OF THE COMPANY AND OTHER RIGHTS

9.1 Co-Sale Rights and Obligations.

(a) If the Requisite Percentage of the Common Units and, if there is a Series A Unreturned Amount, the Requisite Percentage of the Series A Preferred Units approve a Sale of the Company, then (subject to the remainder of this Section 9.1) each other Unit Holder (including each Permitted Transferee) must, if requested by Wanxiang, Transfer in that transaction all (or such portion as Wanxiang requests) of that Unit Holder’s Securities, on terms and conditions approved by Wanxiang; provided that, a Member may only be required to Transfer the same percentage of the Member’s Securities of any Class as the percentage of Units or other Securities of such Class that Wanxiang is Transferring in that transaction, on the same terms and conditions, and for the same consideration (if any) per Unit or other Security with respect to Units or other Securities of the same Class, as those applicable to the Wanxiang Companies with respect to such Class, unless the Member otherwise provides consent. For the avoidance of doubt, the obligations of the Unit Holders pursuant to the foregoing sentence shall apply irrespective of the amount of consideration (if any) to be paid to such Unit Holders pursuant to such Sale of the Company, so long as the same consideration (if any) per Unit or other Security applies to all Units of the same Class.

(b) If the Requisite Percentage of the Common Units and, if there is a Series A Unreturned Amount, the Requisite Percentage of the Series A Preferred Units approve a Sale of the Company, then (subject to the remainder of this Section 9.1) each other Member may elect (by giving notice to the Company and Wanxiang within ten days after notice of the transaction is given to such Member) to Transfer in that transaction the same percentage of the Member’s Securities of any Class as the percentage of Securities of such Class that Wanxiang is Transferring in that transaction, on terms and conditions as those applicable to Wanxiang and its Affiliates with respect to such Class. If the purchaser of any Securities to be Transferred in the transaction refuses to purchase all of the Securities of any Class that each Member (other than the Wanxiang Companies) has properly elected to include in the transaction pursuant to this Section 9.1(b), the Wanxiang Companies may only Transfer to such purchaser a portion of their Securities of such Class equal to the portion of Securities (as are then vested or exercisable) of such Class that such purchaser is willing to acquire from such Members or, in the alternative, Wanxiang or its Affiliates must purchase from such Member such Securities (as are then vested or exercisable) at the same price and on substantially similar terms and conditions with respect to such Class as the Wanxiang Companies are Transferring in the transaction.

(c) Each Unit Holder who is required to participate in a Sale of the Company under Section 9.1(a) or elects to participate in a transaction under Section 9.1(b) must: (i) if requested by the Company, give the same representations, warranties, covenants and indemnities, on a several, and not joint and several, basis as Wanxiang is giving in the transaction; and (ii) pay the Unit Holder’s pro-rata share (based on the proceeds received in connection with the transaction) of any costs of the transaction that are not otherwise paid by the Company or the acquiring Person. Notwithstanding anything to the contrary set forth herein, in connection with a Sale of the Company pursuant to Section 9.1(a), (A) any indemnification obligation of any Unit Holder for breaches of representations, warranties and covenants made by or with respect to the Company shall be several and pro-rata based on the aggregate consideration payable with respect to its Units, (B) no Unit Holder shall be liable for indemnification obligations in excess of the net cash proceeds received by such Unit Holder in the Sale of the Company and (C) no Unit Holder shall be required to provide indemnification with respect to the breach of another Unit Holder’s individual representations as to title, existence, due authorization, ownership, no conflicts and no liens, in each of the foregoing cases without such Unit Holder’s Consent. Costs incurred by a Unit Holder on the Unit Holder’s own behalf are not treated as costs of the transaction in such Unit Holder’s capacity as such. Each Unit Holder must, with respect to any Sale of the Company or a transaction under Section 9.1(b) in which it is participating: (A) cooperate fully with the transaction and take all steps reasonably requested by Wanxiang


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to effect the transaction, (B) if given the opportunity, consent to and vote in favor of the transaction, and (C) not exercise any dissenter’s, appraisal or like rights with respect to the transaction. No Unit Holder may disclose to any Person (except as required by law or to the Unit Holder’s legal counsel or financial adviser or to another Unit Holder, in each case on a confidential basis, or except with the Company’s prior written consent) any information related to a potential Sale of the Company or a transaction under Section 9.1(b); provided that following the consummation of such Sale of the Company or transaction under Section 9.1(b), such Unit Holder may disclose: (1) such information to such Person’s Affiliates and its and their respective limited partners, lenders, investors or prospective investors or lenders (2) such information that no longer remains confidential and (3) such information as is customary for such Person in the ordinary course.

(d) If the Company or Wanxiang enter into any negotiation or transaction for which Rule 506 of Regulation D (or any similar rule then in effect) promulgated by the SEC may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), such Unit Holders who are not accredited investors, acting as a group, who are required or elect to Transfer pursuant to Sections 9.1(a) or 9.1(b) shall, at the request of the Company, appoint a purchaser representative (as such term is defined in Rule 501 of Regulation D) reasonably acceptable to the Company. If such Unit Holders appoint a purchaser representative reasonably acceptable to the Company, the Company shall pay the fees of such purchaser representative, but if such Unit Holders decline to appoint a purchaser representative reasonably acceptable to the Company, such Unit Holders shall appoint another purchaser representative, and such Unit Holders shall be responsible for the fees of the purchaser representative so appointed.

(e) Notwithstanding any implication herein to the contrary, the obligations of the Unit Holders with respect to a Sale of the Company or a transaction under Section 9.1(b) in which they are participating are subject to the satisfaction of the condition that upon the consummation of the transaction, all of such participating Unit Holders shall, subject to Section 9.2, receive substantially the same form and amount of consideration per Class, or if any such participating Unit Holders are given an option as to the form and amount of consideration to be received, all such participating Unit Holders shall be given the same option.

9.2 Sale of the Company; Allocation of Sale Proceeds. Anything contained in this Agreement or otherwise to the contrary notwithstanding, in connection with any Sale of the Company or transaction under Section 9.1(b), the net proceeds available to all Unit Holders (after payment of all liabilities of the Company required to be satisfied) shall be allocated among all Unit Holders participating in such transaction as if such net proceeds were to be distributed to such Unit Holders in accordance with Section 5.1 of this Agreement.

9.3 Limited Preemptive Rights.

(a) If after the date hereof the Board of Managers authorizes the issuance of any Common Units or Common Unit Equivalents, the Company shall notify each Member who holds Common Units regarding such issuance, which notice shall describe in reasonable detail the purchase price, the payment terms, the period in which the preemptive rights under this Section 9.3 can be exercised and the number of such Common Units or Common Unit Equivalents that such Member is entitled to purchase (the “Preemptive Notice”). Subject to Section 9.3(b), each Member who holds Common Units (or any assignee) shall have the preemptive right (exercisable by giving notice to the Company within thirty business days after the Company gives such notice to the Member) to purchase up to such Member’s pro rata share (determined based on such Member’s pro-rata ownership of the outstanding Common Units of the Company on a fully-diluted basis taking into account the conversion or exercise of all Common Unit Equivalents then outstanding) of such Common Units or Common Unit Equivalents that are proposed to be issued, at the same price and otherwise on the same terms as set forth in the Preemptive Notice. If the Company is offering other securities in connection with the proposed issuance that is the subject of this preemptive right, then, if the Company requests, each Member (or its assignee) must, in order to exercise this preemptive right, also purchase such other securities in the same proportionate strip and on the same price and otherwise on the same terms as the Company requires of all purchasers in such offering. If any such Member (or its assignee) exercises the preemptive rights pursuant to this Section 9.3(a), such Member (or its assignee) shall execute all documentation, and take all actions, as may be reasonably requested by the Company in connection therewith.


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(b) Notwithstanding the foregoing, Section 9.3(a) does not apply to (and Members have no preemptive rights with respect to) the issuance of securities: (i) in a Public Offering, (ii) as a distribution on or with respect to outstanding Securities, (iii) upon the conversion, exchange or exercise of any Unit Equivalent or (iv) in any Excluded Offering. Also, Section 9.3(a) does not create any preemptive rights for any Member who is not (or who the Company reasonably believes is not), as of the issuance of the securities that would otherwise be subject to preemptive rights, an “accredited investor” as such term is defined in Regulation D.

(c) The Members hereby acknowledge and agree that the Company, due to timing constraints, confidentiality considerations, or other reasons, may request that Wanxiang acquire Units or Unit Equivalents in a New Offering in advance of complying with the requirements of Section 9.3(a), and each Member consents to such issuance, provided that, as promptly as practicable thereafter, either (i) the Company complies with the requirements of Section 9.3(a) with respect thereto or (ii) Wanxiang offers the other Members the right to acquire from Wanxiang that number of Units or Unit Equivalents that such Member would have been offered by the Company under Section 9.3(a). Furthermore, in the event Wanxiang elects to Transfer such securities in accordance with the foregoing sentence, each Member waives any right that such Member may have pursuant to Section 9.1(b). Nothing in this clause (c) shall obligate or require any Member to advance funds to the Company, and any decision to acquire Units or Unit Equivalents shall be in the sole and absolute discretion of each Member.

9.4 Duration of Certain Provisions. Notwithstanding anything to the contrary contained in this Agreement:

(a) The rights and obligations under Section 9.1(a) shall terminate upon the consummation of a Sale of the Company; and

(b) The rights and obligations under Sections 9.1(b) and 9.3 shall terminate upon a Sale of the Company or upon the consummation of a Public Offering.

9.5 Piggyback Registration Rights. If, at any time or times, the Company determines to file with the SEC a registration statement covering Common Units (or Securities received in exchange for or upon conversion from Common Units pursuant to an Incorporation Event) (a “Piggyback Event”), each Member shall have the right to request in writing that the Company include in such registration statement up to the same percentage of Units that Wanxiang is including in such registration statement, and the Company shall use best reasonable efforts to include those Units in the registration statement and to have the registration statement declared effective. If the managing underwriter(s) advises the Company that, in its opinion (or, if the offering is not underwritten, upon the Company’s reasonable determination that), inclusion of all of the Units of such Unit Holders would adversely affect the Public Offering, then the number of such Unit Holder’s and Wanxiang’s Units being offered shall be reduced on a pro rata basis. The Company shall pay the fees and expenses associated with the Piggyback Event, other than any Member’s pro rata portion of the fees and disbursements of underwriting, brokerage discounts and commissions, and transfer taxes. Notwithstanding anything contained in this Section 9.5, the Company and Wanxiang reserve the right to grant other Unit Holders registration rights, and the Company shall grant Wanxiang any registration rights it may require from time to time in connection with its interest in the Company.

9.6 Reorganization.

(a) If approved by the Board, the Company may be converted into a corporation (by merger, recapitalization, consolidation, reorganization, security exchange or otherwise) (an “Incorporation Event”) and the Units may be exchanged for or converted into Securities (including options, warrants or other convertible securities) of such corporation that, to the extent possible, reflect and are consistent with the Units as in effect immediately prior to such transaction as long as the Unit Holders, as a result of holding such Securities, are in substantially the same economic position they were in, and retain substantially similar rights and obligations as, immediately prior to such Incorporation Event, determined without regard to any change in economic position attributable to the fact that such Securities represent an interest in a corporation or other entity rather than an interest in a limited liability company.

(b) If an Incorporation Event is approved by the Board, then to the extent requested or required by the Company, each Unit Holder will raise no objection against such proposed Incorporation


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Event and will take all such other necessary or desirable actions reasonably requested by the Company in connection with the consummation of such Incorporation Event, including waiving any applicable dissenters’ rights, appraisal rights, approval rights or similar rights in connection with such Incorporation Event, and executing all agreements, documents and instruments in connection therewith reasonably required to effect such Incorporation Event.

(c) Notwithstanding anything in this Agreement to the contrary, in no event shall the Company elect to be treated as a corporation for U.S. federal income tax purposes or otherwise convert to a corporation (by merger, conversion, reorganization, or otherwise) if such election is effective for any date on or prior to the Closing (as defined in the Asset Purchase Agreement).

ARTICLE X EXCULPATION AND INDEMNIFICATION

10.1 Exculpation; Reliance. No Member, Manager or officer of the Company, or any Person that is or was serving at the request of the Company as a manager, member of the board of managers, director, or officer of another limited liability company, corporation, partnership, joint venture, trust or other entity or enterprise shall be liable to the Company or to any Member or Unit Holder for any action (or omission to act) taken with respect to the Company except (a) for any breach of his or her duty of loyalty to the Company under Section 7.1(c), (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under § 18-607 of the Delaware Act (Limitations on distribution) or (d) for any transaction from which the Member, Manager, officer or Person derived an improper personal benefit. A Member or Manager shall be fully protected in relying in good faith upon the records of the Company and upon such information, reports or statements presented to the Company by any of its other Managers, Members, officers, employees or committees of the Company, or by any other Person as to matters the Member or Manager reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by the Company, including information, opinions, reports or statements as to the value or amount of the assets, liabilities, profits or losses of the Company or any other facts pertinent to the existence or amount of assets from which distributions to Unit Holders might properly be paid.

10.2 Indemnification.

(a) The Company shall, to the maximum extent permitted by law, indemnify any Person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such Person is or was a Member, Unit Holder, Manager, Affiliate of a Member, or officer of the Company, or is or was serving at the request of the Company as a manager, member of the board of managers, director, or officer of another limited liability company, corporation, partnership, joint venture, trust or other entity or enterprise (each, an “Indemnitee”), against any loss, damage, liability or expense (including attorneys’ fees, costs of investigation and amount paid in settlement) incurred by or imposed upon the Indemnitee in connection with any such action, suit or proceeding, unless the Indemnitee (i) did not act in good faith and in a manner that such Indemnitee reasonably believed to be in the best interest of the Company, (ii) was either grossly negligent or engaged in willful malfeasance or (iii) breached this Agreement or any other agreement with the Company in any material respect. Notwithstanding the foregoing, no indemnification shall be payable hereunder to any Indemnitee in respect of any action in which such Indemnitee is a plaintiff, other than an action for indemnification under this Section 10.2. The Board of Managers may elect to cause the Company to indemnify any employee of the Company Group, and if so elected, such employee shall be entitled to the benefits as an Indemnitee hereunder, subject to the conditions of this Section 10.2.

(b) The Company shall pay the expenses incurred by an Indemnitee in defending any action, suit or proceeding, or in opposing any claim arising in connection with any potential or threatened action, suit or proceeding, in each case for which indemnification may be sought pursuant to this ARTICLE X, in advance of the final disposition thereof, upon receipt of a written undertaking by such Indemnitee to repay such payment if it shall be determined that such Indemnitee is not entitled to indemnification therefor as provided herein.


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(c) The rights to indemnification and advancement of expenses conferred in this ARTICLE X shall not be exclusive of any other right which any Indemnitee may have or hereafter acquire under any law, statute, rule, regulation, charter document, by-law, contract or agreement and shall inure to the benefit of the executors, administrators, personal representatives, successors and permitted assigns of each such Indemnitee.

(d) Recourse by an Indemnitee for indemnity under this ARTICLE X shall be only against the Company as an entity and no Member or Unit Holder shall by reason of being a Member or Unit Holder be liable for the Company’s obligations under this ARTICLE X.

(e) Rights and benefits conferred on an Indemnitee under this ARTICLE X shall be considered a contract right and shall not be retroactively abrogated or restricted without the written consent of the Indemnitee affected by the proposed abrogation or restriction.

(f) Notwithstanding the foregoing, this Section 10.2 does not apply to any action, suit or proceeding by the Company to enforce any contract rights.

10.3 Insurance. The Company shall have power to purchase and maintain insurance on behalf of any Person who is or was a Manager, officer, employee or agent of the Company, or is or was serving at the request of the Company as a manager, member of the board of managers, director, officer, trustee, employee or agent of another corporation, partnership, joint venture, limited liability company, trust or other enterprise, against any liability asserted against such Person and incurred by such Person in any such capacity, or arising out of his or her status as such, whether or not the Company would have the power to indemnify such Person against such liability under the provisions of this Agreement.

ARTICLE XI BOOKS; RECORDS; TAX MATTERS

11.1 Books and Records. Proper and complete books and records of the Company, in which shall be entered fully and accurately the transactions of the Company, shall be kept and maintained at all times at the principal offices of the Company or, subject to the provisions of the Delaware Act, at such other place as the Board of Managers may from time to time determine.

11.2 Financial Statements; Information Rights. Promptly following receipt thereof, the Company shall Mail to each Member audited financial statements of the Company and its consolidated Subsidiaries for the fiscal year most recently ended. In addition, the Company shall furnish each Member with quarterly unaudited financial statements of the Company and its consolidated Subsidiaries.

11.3 Reports to Current and Former Unit Holders. The Company shall cause its independent public accountants to prepare, and the Company shall use reasonable efforts to Mail to each Unit Holder and, to the extent necessary, each former Unit Holder within ninety (90) days (but in no event later than 240 days) following the end of each fiscal year of the Company, the Schedule K-1 and other information required to enable such Unit Holder or former Unit Holder (including in each case any direct or indirect flow-through owner) to prepare his or her income tax return for such fiscal year.

11.4 Accounting Methods. The Company shall use United States generally accepted accounting principles.

11.5 Fiscal Year. The fiscal year of the Company shall end on December 31 of each year.

11.6 Tax Matters Partner. Unless otherwise required by law, the tax matters partner for the Company within the meaning of Section 6231(a)(7) of the Code and corresponding provisions of state and local law (the “Tax Matters Partner”) shall be a Member designated from time to time by the Board of Managers. The initial Tax Matters Partner shall be Wanxiang. The Tax Matters Partner shall take such actions as may be necessary to cause each other Member to become a “notice partner” within the meaning of Section 6223 of the Code, shall promptly


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furnish to the Members a copy of all tax related notices or other written communications received by the Tax Matters Partner from the Internal Revenue Service or any state taxing authority (except as to notices or communications sent directly to the Members), and shall keep the Members advised of all significant developments in such matters. The Tax Matters Partner shall not, without the Approval of the Board of Managers, enter into any agreement, make any election (other than an election under Section 754 of the Code, which it may make in its sole discretion), grant any consent, or waive any rights in its capacity as Tax Matters Partner. In no event shall the provisions of this Section 11.6 be construed as authorizing the Tax Matters Partner to take any action left to the determination of a Member under Sections 6222 through 6231 of the Code. The provisions of this Section 11.6 shall survive any liquidation and dissolution of the Company and any withdrawal by a Member. Unless otherwise provided in this Agreement, all tax and accounting determinations and elections shall be made reasonably and in good faith by the Board of Managers. In making such allocations pursuant to this Section 11.6 and in making determinations regarding Tax Distributions, the Board of Managers may rely on reasonable assumptions and estimates.

ARTICLE XII ADMISSION AS A MEMBER

12.1 Admissions. The terms of this Agreement shall be binding upon any transferee of any Units. Upon the request of the transferring Unit Holder, the Company or any other Unit Holder, each such transferee shall execute and deliver to the Company a Joinder in substantially the form of Exhibit B attached hereto. No Transfer of Units shall be effective until delivery by the transferee of such Joinder. Upon the receipt of such Joinder, the Company shall admit the transferee as a Member and the Board shall update Exhibit A hereof to reflect such admission. Upon admission of the transferee as a Member, the Transferee shall have, to the extent of the Units transferred, the rights and powers and shall be subject to the restrictions and liabilities of a Member under this Agreement, the Certificate of Formation and the Delaware Act. Whether or not the transferee of a Unit becomes a Member, the transferring Unit Holder is not released from any liability to the Company under this Agreement, the Certificate of Formation or the Delaware Act arising prior to the date of the Transfer. A transferee of a Unit not admitted into the Company as an additional or substituted Member has no right to receive any information or account of Company transactions, to inspect the Company’s books, to vote on Company matters, or to exercise any other rights of a Member or otherwise under this Agreement other than to receive the share of distributions, Net Income, Net Losses and credits (including all items thereof), or other compensation by way of income, to which the assignee’s assignor otherwise would be entitled as to the Units.

ARTICLE XIII WITHDRAWAL AND DISSOLUTION

13.1 Withdrawal. A Member shall not voluntarily withdraw from the Company without the prior written consent of all of the Members.

13.2 Events of Dissolution. The Company shall be dissolved by the written consent of the Member or Members holding a Requisite Percentage of the Common Units and, if there is a Series A Unreturned Amount, a Requisite Percentage of the Series A Preferred Units, or as otherwise provided by the Delaware Act.

13.3 Distributions; Allocations.

(a) The assets of the Company on winding-up shall be applied first to the expenses of the winding-up, and thereafter all of the remaining assets of the Company shall be distributed in the following order: (i) first, to creditors of the Company, including any Unit Holder who is also a creditor (by virtue of any Member Loan or otherwise), in the order of priority as provided by law; and (ii) thereafter, to the Unit Holders, in accordance with Section 5.1.

(b) It is the intent of the parties hereto that the liquidation amounts distributable to Unit Holders pursuant to Section 13.3(a) shall be equal to the Unit Holders’ respective ending Capital Accounts. Therefore, notwithstanding anything to the contrary in this Agreement, to the extent not inconsistent with the applicable Treasury Regulations under Section 704 of the Code, if, upon the dissolution of the Company, any Unit Holders’ ending Capital Account (determined immediately after all Net Income and


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Net Loss, and other items of income, gain, loss and deduction have been tentatively allocated under this Agreement and reflected in the Capital Accounts of the Unit Holders as if this Section 13.3(b) were not in this Agreement) is less than such Unit Holder’s liquidation amount, then (i) such Unit Holder shall be specially allocated items of income or gain (including gross income) for such year (and, if necessary, for the preceding year if the Company has not yet filed its tax return for such preceding year), and (ii) the other Unit Holders shall be specially allocated items of loss or deduction for such year (and, if necessary, for the preceding year if the Company has not yet filed its tax return for such preceding year), until each such Unit Holder’s actual Capital Account equals the liquidation amount for such Unit Holder. The special allocation provision provided by this Section 13.3(b) shall be applied in such a manner so as to cause the difference between each Unit Holder’s liquidation amount and the balance in its Capital Account (determined after this allocation, but immediately prior to the distributions pursuant to Section 13.3(a)) to be the smallest dollar amount possible. Nothing contained in this Section 13.3(b) shall change the manner in which the remaining assets of the Company shall be distributed pursuant to Section 13.3(a).

13.4 Conduct of Winding-Up. The winding-up of the business and affairs of the Company shall be conducted by the Board of Managers except as otherwise required by law.

ARTICLE XIV REPRESENTATIONS, WARRANTIES, AGREEMENTS AND OTHER MATTERS

14.1 Representations, Warranties and Agreements of Unit Holders. Each Unit Holder, individually, represents and warrants to the Company and the other Unit Holders and agrees and acknowledges, as follows.

(a) The execution, delivery and performance of this Agreement by such Unit Holder do not and shall not conflict with, violate or cause a breach of any agreement, contract or instrument to which such Unit Holder is a party or any judgment, order or decree to which such Unit Holder is subject.

(b) Such Unit Holder has no and shall not grant any proxy or become party to any voting trust or other agreement which is inconsistent with, conflicts with or violates any provision of this Agreement.

(c) If such Unit Holder is a corporation, partnership, limited liability company, trust, custodianship, estate or other entity, this Agreement has been duly executed by a duly authorized person on its behalf.

(d) If such Unit Holder is a corporation, partnership, limited liability company, trust, custodianship, estate or other entity, this Agreement has been duly executed by a duly authorized Person on its behalf and constitutes the legally binding obligation of such Unit Holder, enforceable against such Unit Holder in accordance with its terms (except to the extent that enforcement may be affected by laws relating to bankruptcy, reorganization, insolvency and creditors’ rights generally and by the availability of injunctive relief, specific performance and other equitable remedies).

(e) Such Unit Holder’s interest in the Company is intended to be and is being acquired solely for its own account for the purpose of investment and not with a view to any sale or other distribution of all or any party thereof in violation of the Securities Act or any applicable state securities laws.

(f) Such Unit Holder is aware that the Units have not been registered under the Securities Act or any applicable state securities laws, that such Units cannot be sold or otherwise disposed of unless they are registered thereunder or unless an exception is available, that the Company has no present intention of so registering such interests under the Securities Act or applicable state securities laws, and that accordingly, such Unit Holder is able and is prepared to bear the economic risk of making its Capital Contribution and to suffer a complete loss of its investment.

(g) Such Unit Holder’s knowledge and experience in financial and business matters are such that it is capable of evaluating the risks of making its Capital Contribution.


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14.2 Representations and Warranties of the Company. The Company represents and warrants to each Unit Holder as follows.

(a) The Company is validly existing and in good standing under the laws of the State of Delaware. The Company has full limited liability company power and authority to enter into and perform its obligations under this Agreement. The execution and delivery by the Company of this Agreement and the performance by the Company of its obligations hereunder have been duly authorized and approved by all requisite limited liability company action. This Agreement has been duly executed and delivered by a duly authorized officer or manager of the Company.

(b) The execution, delivery and performance of this Agreement by the Company do not and shall not conflict with, violate or cause a breach of any of the terms or provisions of the Certificate of Formation of the Company, or of any agreement, contract or instrument to which the Company is a party, or any judgment, order or decree to which the Company is subject.

(c) This Agreement has been duly executed by a duly authorized Person on its behalf and constitutes the legally binding obligation of the Company, enforceable against the Company in accordance with its terms (except to the extent that enforcement may be affected by laws relating to bankruptcy, reorganization, insolvency and creditors’ rights generally and by the availability of injunctive relief, specific performance and other equitable remedies).

14.3 Waiver of Corporate Opportunity. Each of the Company and the Members acknowledges that each Member and its Affiliates, and each of their respective directors, officers, employees, members, partners, agents and representatives, including, without limitation, any Managers designated or elected by such Member and employees, if any, seconded to the Company by such Member or employed jointly by the Company and such Member (collectively, the “Permitted Persons”), will likely have, from time to time, information that may be of interest to the Company (“Holder Information”) regarding a wide variety of matters, including, without limitation, (a) such Member’s (and its Affiliates’) technologies, plans and services, and plans and strategies relating thereto, (b) current and future investments the Member and its Affiliates have made, may make, may consider or may become aware of with respect to other Persons and other technologies, products and services, including, without limitation, technologies, products and services that may be competitive with the Company and (c) developments with respect to the technologies, products and services, and plans and strategies relating thereto, of other Persons, including, without limitation, Persons that may be competitive with the Company. The Company and each Member recognizes that such Holder Information may be of interest to the Company. Such Holder Information may or may not be known by a Manager designated or elected by a Member. The Company and each Member, as a material part of the consideration for this Agreement, agrees that any Permitted Person shall have no duty to disclose any Holder Information to the Company or permit the Company to participate in any projects or investments based on any Holder Information, or to otherwise take advantage of any opportunity that may be of interest to the Company if it were aware of such Holder Information, and hereby waives, to the extent permitted by law, any claim based on the corporate opportunity doctrine or otherwise that could limit the ability of any Permitted Person to pursue opportunities based on such Holder Information or that would require any Permitted Person to disclose any such Holder Information to the Company or offer any opportunity relating thereto to the Company. Any Permitted Person may have other business interests and may engage in any other business or trade, profession or employment whatsoever, on its own account, or in partnership with, or as an employee, officer, director or stockholder of any other Person, and no Permitted Person shall be required to devote its or his or her entire time to the business of the Company. Without limiting the generality of the foregoing, any Permitted Person (i) may engage in the same or similar activities or lines of business as the Company or develop or market any products or services that compete, directly or indirectly, with those of the Company, (ii) may invest or own any interest publicly or privately in, or develop a business relationship with, any Person engaged in the same or similar activities or lines of business as, or otherwise in competition with, the Company and (iii) do business with any client or customer of the Company or any other Permitted Person. Neither the Company nor any other Member nor any Affiliate thereof by virtue of this Agreement shall have any rights in and to any such independent venture or the income or profits derived therefrom, regardless of whether or not such venture was presented to a Permitted Person as a direct or indirect result of its or his or her connection with the Company.


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ARTICLE XV GENERAL PROVISIONS

15.1 Remedies. No remedy conferred upon any party to this Agreement is intended to be exclusive of any other remedy herein or by law provided or permitted, but each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute.

15.2 Waiver. None of the terms of this Agreement shall be deemed to have been waived by any party hereto, unless such waiver is in writing and signed by that party. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement or any further breach of the provision so waived.

15.3 Notices. Any notice provided for in this Agreement must be in writing and must be delivered by hand, by facsimile, by local messenger, by nationally recognized overnight service (“Courier”), or by United States mail, postage prepaid, registered or certified mail, return receipt requested (“Mail”). Notices shall be deemed given: (1) when received, if delivered by hand or local messenger; (2) when sent, if sent by facsimile during the recipient’s normal business hours; (3) on the first business day after being sent, if sent by facsimile other than during the recipient’s normal business hours; (4) one business day after being delivered to the Courier for next day delivery, if sent by Courier; and (5) three business days after being deposited in the United States mail, if Mailed. A notice delivered by facsimile shall only be effective, however, if the notice is also given by hand, local messenger or Courier no later than two business days after its delivery by facsimile. All such notices must be addressed to the applicable parties hereto as follows:

If to the Company:

Wanxiang Automotive Acquisition Company LLC 88 Airport Road Elgin, Illinois 60123 Facsimile: (847) 931-4838 Attn: Paul Cumberland


Sidley Austin LLP One South Dearborn Street Chicago, Illinois 60603 Attention: Bojan Guzina and John R. Box Facsimile: (312) 853-7036

If to any Member, at the last known address of such Member as disclosed by the books and records of the Company, and/or to such other Persons and/or at such other addresses as may be designated by written notice served in accordance with the provisions hereof.

15.4 Entire Agreement. Except with respect to the Incentive Grant Award and any other agreements entered into by the Company from time to time in connection with the Transfer of Units, this Agreement contains the entire agreement, and supersedes all prior agreements and understandings and arrangements, oral or written, among the parties hereto with respect to the subject matter hereof.

15.5 Amendments and Modifications. This Agreement and the Certificate of Formation may be modified, amended or changed in any respect with the written consent of the Requisite Percentage of the Common Units; provided that all other Members shall be given prompt notice of such modification, amendment or change; provided further, however, that in no event shall any such amendment, modification or change adversely affect the rights or obligations of any one Unit Holder or any group of Unit Holders, as applicable, without the prior written consent of such Unit Holder or group, as applicable, unless such amendment, modification or change adversely affects the same rights and obligations of all Unit Holders in the same manner and to the same extent (e.g.,


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proportionately); provided further, however, that, no such amendment, modification or change may create an additional liability or obligation of any Unit Holder, including, without limitation, by increasing any Unit Holder's required contributions to the Company's capital, without the prior written consent of such Unit Holder; provided further, however, no such amendment, modification or change to any section specifically granting rights to or imposing obligations on the Trust Common Unit Holders or Trust Series B Preferred Unit Holders (including, but not limited to, rights pursuant to Sections 8.3, 8.4, 9.1, 9.3 or 9.4) may be made without the written consent of the Requisite Percentage of the Trust Common Units or Requisite Percentage of the Trust Series B Preferred Unit Holders, as applicable. The foregoing sentence may not be amended, modified or changed without the prior written consent of all parties to this Agreement.

15.6 Binding Effect; Benefits. All of the terms and provisions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns.

15.7 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be unenforceable or invalid under applicable law, such provision shall be ineffective only to the extent of such unenforceability or invalidity, and the remaining provisions of this Agreement shall continue to be binding and in full force and effect.

15.8 Headings. The section and other headings contained in this Agreement are for convenience only and shall not be deemed to limit, characterize or interpret any provisions of this Agreement.

15.9 No Strict Construction. The parties hereto jointly participated in the negotiation and drafting of this Agreement. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their collective mutual intent, this Agreement shall be construed as if drafted jointly by the parties hereto, and no rule of strict construction shall be applied against any Person.

15.10 Interpretation. As used in this Agreement, the masculine, feminine or neuter gender shall be deemed to include the others whenever the context so indicates or requires. Terms defined in the singular have a comparable meaning when used in the plural and vice versa. Terms defined in the current tense shall have a comparable meaning when used in the past or future tense and vice versa. Terms defined as a noun shall have a comparable meaning when used as an adjective, adverb, or verb and vice versa. Whenever the term “include” or “including” is used in this Agreement, it shall mean “including, without limitation,” (whether or not such language is specifically set forth) and shall not be deemed to limit the range of possibilities to those items specifically enumerated. Unless otherwise limited, the words “hereof”, “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision. Each reference herein to any entity includes any successor thereto.

15.11 Counterparts. This Agreement may be executed by counterpart signature, each of which signature shall be deemed an original, all of which together shall constitute one in the same instrument. Furthermore, delivery of a copy of such signature by facsimile transmission or other electronic exchange methodology shall constitute a valid and binding execution and delivery of this Agreement by such party, and such electronic copy shall constitute an enforceable original document.

15.12 Governing Law. This Agreement and the rights of the parties hereunder shall be construed and interpreted in accordance with the laws of the State of Delaware applicable to agreements made and to the performance wholly within that jurisdiction.

15.13 Consent to Jurisdiction. The parties hereto irrevocably consent and submit to the non-exclusive jurisdiction of any local, state or federal court within the County of Cook in the State of Illinois for enforcement by the Members. All Unit Holders irrevocably waive any objection they may have to venue or the defense of an inconvenient forum to the maintenance of such actions or proceedings to enforce this Agreement.

[Signature Page Follows]


IN WITNESS WFIEREOF, the parties have executed this Limited Liability Company Agreement as of the date first above written.

The Company:


By: Name: Paul Cumberland Title: Director of Investments

Members:

WANXIANG CLEAN ENERGY USA LLC

By: Name: Daniel (Gang) Li Title: Vice President and Assistant Secretary

FISKER AUTOMOTIVE HOLDINGS, INC.

By: Name: Al cwil I, Asoo

Title: 1,ef Re off,'cer


EXHIBIT A

(as of March 21, 2014)

Series A Preferred Units Series B Preferred Units Common Units

Unit Holder

Number Aggregate Capital

Contribution Number

Number

Wanxiang Clean Energy USA LLC 1,000 $138,000,000.00 800

800

Fisker Automotive Holdings, Inc. — — 200

200

TOTAL 1,000 $138,000,000.00 1,000

1,000


EXHIBIT B

FORM OF JOINDER1

TO

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

[____________], 20[__]

This is a JOINDER (this “Joinder”) to the LIMITED LIABILITY COMPANY OPERATING AGREEMENT of Wanxiang Automotive Acquisition Company LLC, a Delaware limited liability company (the “Company”), dated as of March 21, 2014 among Wanxiang Clean Energy USA LLC (“Wanxiang”), Fisker Automotive Holdings, Inc., a Delaware corporation (“FAH”), and each other party thereto and each person subsequently admitted as a member of the Company (as amended from time to time, the “LLC Agreement”). Capitalized terms used and not defined herein shall have the meanings ascribed in such terms in the LLC Agreement.

WHEREAS, [_______] (the “Transferee”) (a) desires to acquire from [____] Units of the Company from [_____] (the “Transferor”) and the Transferor desires to transfer such Units to the Transferee (the “Transfer”) and (b) desires to become a Member of the Company, with all of the rights and obligations provided in the LLC Agreement;

WHEREAS, the Board of Managers of the Company has approved the admission of the Transferee as an additional Member pursuant to Section 12.1 of the LLC Agreement; and

WHEREAS, the Transferee agrees to become a party to the LLC Agreement in accordance with the terms hereof.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Joinder hereby agree as follows:

1. Representations and Warranties.. The Transferee specifically makes the representations and warranties set forth in, and agrees and acknowledges to the matters covered by, Section 14.1 of the LLC Agreement. The Transferee and Transferor represent and warrant that the Transfer complies with all of the provisions of the LLC Agreement.

2. Agreement to be Bound. Upon execution of this Joinder, the Transferee shall become a party to the LLC Agreement and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the LLC Agreement as though an original party thereto and as a Member thereunder.

3. Successors and Assigns. Except as otherwise provided herein, this Joinder shall bind and inure to the benefit of and be enforceable by the Company and its successors and assigns.

4. Counterparts. This Joinder may be executed in separate counterparts (by facsimile, photo or other electronic means), each of which shall be an original and all of which taken together shall constitute one and the same agreement.

5. Governing Law. This Joinder shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any rules, principles or provisions of choice of law or conflicts of laws.

1 The parties to this Agreement expressly agree that the Company may require additional provisions in connection with any transfer.


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IN WITNESS WHEREOF, the Transferee, the Transferor and the Company have executed this Joinder as of the date first set forth above.

Transferor:

By: _____________________________________ Name: Title:

Transferee:

By: _____________________________________ Name: Title: Residence or Principal Place of Business: _________________________________ _________________________________

The Company:


By: Name: Title:


KE 29008771

EXHIBIT E

Plan Settlement Term Sheet


1

KE 30841555.6

FA LIQUIDATING CORP. (F/K/A FISKER AUTOMOTIVE, INC.)

FAH LIQUIDATING CORP. (F/K/A FISKER AUTOMOTIVE HOLDINGS, INC.)

April 11, 2014

Plan Settlement Term Sheet THIS PLAN SETTLEMENT TERM SHEET SHALL BE A BINDING AGREEMENT ON THE PARTIES UPON EXECUTION, SUBJECT TO ANY NECESSARY COURT APPROVALS

PLAN SETTLEMENT TERM SHEET SUMMARY

General Framework This Plan Settlement Term Sheet describes the terms of revisions to the Debtors’ First Amended Joint Plan of Liquidation Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 284] (as the same may have been amended from time to time prior to the modifications contemplated by this Plan Settlement Term Sheet, the “Original Plan”).

The plan modifications set forth herein (collectively, the “Plan Modifications”) shall be memorialized and implemented through a settlement to be approved pursuant to the Modified Plan under Section 1123(b)(3) of the Bankruptcy Code and Bankruptcy Rule 9019. The Plan Modifications shall be consistent in all respects with this Plan Settlement Term Sheet and otherwise reasonably acceptable to the Debtors, the Committee, and Hybrid.

The “Modified Plan” shall mean the Original Plan as modified by the Plan Modifications and otherwise reasonably acceptable to the Debtors, the Committee, and Hybrid.

Capitalized terms used but not defined herein shall have the meanings set forth in the Original Plan or the Wanxiang APA (as defined herein), as applicable.

Wanxiang APA “Wanxiang APA” means that certain Asset Purchase Agreement dated as of January 27, 2014 by and among the Debtors and Wanxiang America Corporation (as the same may have been amended, supplemented, or modified from time to time in accordance with its terms, the “Wanxiang APA”).


2

KE 30841555.6

Liquidating Trust “Liquidating Trust” means a liquidating trust to be established on the Effective Date to effectuate the Modified Plan. The Liquidating Trust shall be memorialized in an agreement materially consistent with the Modified Plan and otherwise reasonably acceptable to the Debtors and the Committee.

As of and on the Effective Date, and after giving effect to distributions intended to occur on the Effective Date (including all distributions to Hybrid), the Debtors, on behalf of themselves and their Estates, shall transfer all their assets not otherwise distributed on the Effective Date to the Liquidating Trust. The Liquidating Trust shall separately administer warranty obligations to be honored pursuant to the Wanxiang APA, and as may be further agreed-to by Wanxiang America Corporation.1

The Debtors and, after the Effective Date, the Liquidating Trustee shall use commercially reasonable efforts to cause the Debtors to dissolve on the Effective Date or promptly thereafter to the extent permitted by applicable law; provided that, notwithstanding any dissolution, the Debtors shall be deemed to remain in place for all purposes with respect to fee applications filed in the Chapter 11 Cases.

For the avoidance of doubt, Causes of Action released, settled, or compromised pursuant to the Modified Plan will not be transferred to the Liquidating Trust.

Liquidating Trustee To be determined by the Committee in its reasonable discretion after conducting interviews.

Hybrid “Hybrid” means Hybrid Tech Holdings, LLC.

Administrative and Priority Claims

The Modified Plan shall provide for payment of Allowed Administrative Claims and Allowed Priority Claims in the amount of $8,000,000 with cash in the Debtors’ possession immediately prior to the Effective Date (the “Priority Claims Reserve”), to be paid only after prior application of all funds held in the Professional Fees Account (as defined in the Final DIP Order). The Priority Claims Reserve shall include a sub-reserve of $1.9 million for the disputed Administrative and Priority Claims relating to the WARN adversary proceeding.

To the extent the Priority Claims Reserve is insufficient to pay all such Allowed Administrative Claims and Allowed Priority Claims in full,

1 The Debtors and the Committee, in consultation with Hybrid, reserve the right to agree to modify or adjust the

treatment afforded to holders of allowed warranty claims pursuant to the Modified Plan; provided that such modified treatment with respect to warranty claims shall not adversely modify or impair Hybrid’s rights under the Modified Plan as provided herein.


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such Claims shall be funded by Hybrid. To the extent the Priority Claims Reserve exceeds all such Allowed Administrative Claims and Allowed Priority Claims, such excess shall be distributed to Hybrid. For the avoidance of doubt, Hybrid and, prior to the Effective Date, the Debtors, each reserve the right to review and object to any claims asserted against the Priority Claims Reserve.

Hybrid and its designees or representatives (which, after the Effective Date, may include Beilinson Advisory Group) shall have the right to object to, allow, or otherwise resolve any Administrative or Priority Claim. The Liquidating Trustee shall have the right to object, allow, or otherwise resolve any General Unsecured Claims. To the extent that the litigation or resolution of any claim involves allowance of, or leaves unresolved, an Administrative or Priority Claim and a General Unsecured Claim, then the Liquidating Trustee may object to, allow, or otherwise resolve such Administrative and Priority Claims (other than the WARN adversary proceeding and related claims) with Hybrid’s consent in its sole discretion upon reasonable prior written notice, and Hybrid and its designees or representatives may object to, allow, or otherwise resolve such General Unsecured Claims with the Liquidating Trustee’s consent in its sole discretion upon reasonable prior written notice. On the Effective Date, Hybrid or its designees and the Liquidating Trustee shall have the right to defend the WARN adversary proceeding pending in these chapter 11 cases and related claims on behalf of the Debtors’ estates; provided that any settlement with respect to the WARN adversary proceeding or related claims shall either be (1) mutually agreeable to Hybrid and the Liquidating Trustee in their sole discretion or (2) subject to Bankruptcy Court approval following prior consultation between Hybrid or its designees and the Liquidating Trustee and the Bankruptcy Court may take into account the reasonableness of how any such settlement is allocated between priority and unsecured claim treatment. Each of Hybrid and the Liquidation Trustee shall use commercially reasonable efforts to coordinate in good faith regarding the reconciliation of Claims as provided herein.


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Plan Distributions

The Modified Plan shall provide for, on the Effective Date, contribution to the Liquidating Trust of:

• One hundred percent (100%) of the Equity Consideration;

• $20 million in cash to the Liquidating Trust for the benefit of holders of Allowed General Unsecured Claims;

• All rights to recover additional compensation under the Wanxiang APA (e.g., proceeds sharing from the sale of Delaware); and

• All Causes of Action other than Causes of Action against the Released Parties.

The foregoing distributions represent a compromise of the dispute over the value of allegedly unperfected liens purportedly securing the Senior Loan. The Hybrid Parties shall waive their rights to any distributions that represent the proceeds of the foregoing.

The Modified Plan shall provide for, on the Effective Date, a distribution to Hybrid of all cash in the Debtors’ estates on the Effective Date after funding:

• the cash payment ($20 million) to the Liquidating Trust (as set forth above);

• the SVB Cash Payment (which, for the avoidance of doubt, shall be cash in an amount equal to $350,000); and

• the $8.0 million of cash to be deposited in the Priority Claims Reserve which shall be held by a party (which may, but shall not be required to, include the Liquidating Trustee) reasonably acceptable to Hybrid, the Debtors, and the Committee, without prejudice to Hybrid’s right to review and object to any such claims as provided herein.

Releases The Modified Plan shall provide that:

• Hybrid, Hybrid Technology, LLC, Ace Strength International Limited, FAH Loan Purchase Fund, LLC, Mr. David Manion, and Mr. Richard Li Tzar-Kai, and all affiliated persons and entities (collectively, the “Hybrid Parties”) shall be Released Parties;

• each of the Hybrid Parties shall be Releasing Parties and deemed to be Releasing Parties;


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• Plan to provide for release of all third party causes of action solely to extent such creditor does not elect to opt out of release; provided that no Entity that opts out of the third party release shall be a Released Party; and

• each of the Debtors’ other current and former officers, directors, managers, principals, employees, agents, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, and other professionals, in each case in their capacity as such, and their respective Affiliates shall be Released Parties pursuant to the Plan; provided that as a condition to receiving releases under the Plan each Released Party and its Affiliates shall provide a release or be deemed to have provided a release to the Releasing Parties for any and all claims (other than Professional Fee Claims) arising from or relating to their relationship with the Debtors.

Plan Support Hybrid and each member of the Committee will: (a) vote in favor of, and support, confirmation and consummation of the Modified Plan with respect to all Claims owned or beneficially controlled by Hybrid or such member of the Committee, respectively; and (b) not opt out of the releases provided by the Modified Plan; provided that with respect to members of the Committee, the third party release shall not affect any Committee member’s claims or causes of action pending against a Released Party in a complaint or pleading filed as of the Petition Date in a court or arbitration panel of competent jurisdiction; provided further the third party release shall preclude a Committee member from amending or modifying such complaint or pleading to assert claims or causes of action against a Released Party that was not otherwise a party to such proceeding as of the Petition Date; and, provided further, for the sake of clarity, nothing herein shall impair the ability of GP Supercars & More SRL, a Committee member, to continue to assert the claims and causes of action, against Henrik Fisker, Raymond J. Lane and Bernhard Koehler who are presently party Respondents in that arbitration, presently pending as an arbitration in Irvine, California, as Case No. 50 457 T 00955 13, in a court of appropriate jurisdiction or other appropriate forum if it is decided at some future date that such dispute is more properly resolved in such other forum.

The Debtors shall resolicit acceptances or rejections of the Modified Plan on account of the Plan Modifications. The Debtors shall use their reasonable best efforts to obtain confirmation of the Modified Plan no later than May 31, 2014. The Debtors shall use commercially reasonable efforts to cause the Effective Date to occur not later than 14 days after entry of the Confirmation Order.


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The Committee shall provide a letter supporting the Modified Plan and recommending that unsecured creditors vote in support of the Modified Plan.

Standing & Exclusivity Motions

The Confirmation Order will provide that the claims and causes of action putatively asserted by the Committee on behalf of the Estates pursuant to that certain Complaint attached as Exhibit A to the Motion of the Official Committee of Unsecured Creditors for Entry of an Order Pursuant to Bankruptcy Code §§ 1103(C) and 1109(B) Granting Leave, Standing and Authority to Commence, Prosecute and, if Appropriate, Settle Certain Causes of Action on Behalf of the Debtors’ Estates filed at [Docket No. 267] in the above-captioned chapter 11 cases (the “Standing Motion”) will be moot upon entry of the Confirmation Order and the occurrence of the Effective Date.

The Standing Motion and the Motion to Extend Exclusivity Period for Filing a Chapter 11 Plan and Disclosure Statement filed by the Debtors at [Docket No. 731] will be adjourned until May 31, 2014.

D&O Insurance

Coverage for defense and indemnity under the primary and excess D&O policies obtained by the Debtors shall remain available to all individuals within the definition of “Insured” in those policies. The Debtors’ estates and the Liquidating Trust no longer have any interest in the D&O policies or any payments made in accordance with their terms other than with respect to proceeds arising from claims or Causes of Action not settled and/or released pursuant to the Plan.

Governing Law & Jurisdiction

This Plan Settlement Term Sheet shall be construed, performed and enforced in accordance with, and governed by, the laws of the State of Delaware (without giving effect to the principles of conflicts of Laws thereof that would cause the application of the Law of another jurisdiction), except to the extent that the laws of such State are superseded by the Bankruptcy Code

Each of the Debtors, Hybrid, and the Committee hereto irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Plan Settlement Term Sheet, and consent to the exclusive jurisdiction of, the Bankruptcy Court.

Integration This Plan Settlement Term Sheet contains the entire understanding among the Parties with respect to the transactions contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings, oral or written, with regard to such transactions.

Counterparts This Plan Settlement Term Sheet may be executed in counterparts, each of which is deemed an original, but all of which constitute the same agreement. To the extent signed and delivered by facsimile or other


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electronic transmission, signature pages hereto shall be treated in all manner and respects as an original and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person.

Press Release The parties shall issue a joint press release announcing this Plan Settlement Term Sheet.

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