Material Agreement, Financial Obligation, Termination of Material Agreement (Form 8-K)

On June 15, 2026, CarParts.com, Inc. (the "Company") entered into a Loan and Security Agreement (the "Credit Agreement") with First Business Specialty Finance, LLC ("FBSF") providing for an asset-based revolving credit facility in an aggregate maximum principal amount of up to $25,000,000 (the "Credit Facility"), secured by substantially all of the assets of the Company. Certain of the Company's subsidiaries will act as guarantors of the Credit Facility pursuant to a Security Agreement, dated as of June 15, 2026, between FBSF and the subsidiary guarantors party thereto (the "Security Agreement").

The Credit Facility provides for loans, plus all letter of credit liabilities, up to the lesser of (i) $25,000,000, or (ii) the amount available under a "borrowing base" calculated primarily by reference to the Company's cash and cash equivalents, accounts receivables, and inventory.

The loans under the Credit Facility accrue interest at a varying rate equal to the 1 Month Term SOFR published by CME Group Benchmarks Administration Limited plus 3.25% per annum. The interest rate is subject to reduction upon delivery of annual audited financial statements as follows: (i) a 0.25% reduction if the Fixed Charge Coverage Ratio (as defined in the Credit Agreement) for the prior fiscal year is between 1.10x and 1.25x (inclusive), or (ii) a 0.50% reduction if the Fixed Charge Coverage Ratio for the prior fiscal year exceeds 1.25x, in each case provided no Event of Default (as defined in the Credit Agreement) is continuing. The Credit Facility matures on March 31, 2028, and automatically renews for successive one-year periods unless either party provides at least 30 days' prior written notice of termination.

If the Credit Facility is terminated prior to the maturity date, the Company must pay a prepayment premium equal to (a) if the Credit Facility is terminated prior to June 15, 2027, $750,000 or (b) if the Credit Facility is terminated on or after June 15, 2027, $500,000. The Credit Facility is also subject to mandatory prepayments from the net proceeds of certain asset dispositions and sales of equity interests in the Company's subsidiaries.

The Credit Agreement contains customary negative covenants restricting the Company's and its subsidiaries' ability to create, incur, assume or become liable for indebtedness; make certain investments; dispose of assets; pay dividends or repurchase the Company's stock; create, incur or assume liens; consummate mergers or acquisitions; enter into affiliate transactions; or amend the Company's organizational documents.

The Credit Agreement also contains customary representations and warranties, affirmative covenants and events of default, including payment defaults, breach of representations and warranties, covenant defaults, cross-acceleration to other debt, and material adverse changes in the Company's business. If an event of default occurs, FBSF will be entitled to take various actions, including the acceleration of all amounts due under the Credit Facility and all actions permitted to be taken by a secured creditor. In addition, if the sum of the Company's cash balance and availability under the Credit Facility is less than $15,000,000, or if the Company's availability under the Credit Facility is less than $7,500,000, then the Company must maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of not less than 1.10 to 1.0, tested quarterly on a trailing four-quarter basis.

In connection with entering into the Credit Facility, the Company and JPMorgan Chase Bank terminated the Company's revolving credit facility with JPMorgan Chase Bank (the "JPM Credit Facility"). At the time it was terminated, there were no amounts outstanding under the JPM Credit Facility.

The foregoing descriptions of the Credit Agreement and the Security Agreement are subject to and qualified in their entirety by reference to the full text of the Credit Agreement and Security Agreement, which are filed as Exhibits 10.1 and 10.2, respectively, hereto.

The information in Item 1.01 regarding the JPM Credit Facility is incorporated into this Item 1.02 by reference.

The information in Item 1.01 regarding the Credit Facility is incorporated into this Item 2.03 by reference.