Exhibit 10.3

 
FIRST AMENDMENT AND WAIVER TO LOAN AND SECURITY AGREEMENT
 
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as
of October 30, 2018 (the “First Amendment Effective Date”), is entered into by
and among RUMBLEON, INC., a Nevada corporation (“Parent”), RMBL MISSOURI, LLC, a
Delaware limited liability company (“RMBL Missouri”), RMBL TEXAS, LLC, a
Delaware limited liability company (“RMBL Texas”), NEXTGENPRO, LLC, a Delaware
limited liability company (“NextGen Pro”, and together with Parent, RMBL
Missouri and RMBL Texas, the “Existing Borrowers”), RMBL TENNESSEE, LLC, a
Delaware limited liability company (“RMBL Tennessee”), RMBL EXPRESS, LLC, a
Delaware limited liability company (“RMBL Express”), WHOLESALE, LLC, a Tennessee
limited liability company (“Wholesale”), and WHOLESALE EXPRESS, LLC, a Tennessee
limited liability company (“Wholesale Express”, and together with RMBL
Tennessee, RMBL Express and Wholesale, collectively, “New Borrowers”, and
Existing Borrowers and New Borrowers, together with any Qualified Subsidiaries
from time to time party hereto, collectively “Borrowers”, and each, a
“Borrower”), the several banks and other financial institutions or entities from
time to time party thereto as Lender, and HERCULES CAPITAL, INC., a Maryland
corporation, in its capacity as administrative agent and collateral agent for
Lender (in such capacity, together with its successors and assigns in such
capacity, “Agent”).
 
A. Existing Borrowers, Lender and Agent are parties to a Loan and Security
Agreement, dated as of April 30, 2018 (as amended, restated or modified from
time to time, the “Loan Agreement”).
 
B. Each of the New Borrowers have entered into a Joinder Agreement as of the
First Amendment Effective Date.
 
C. Existing Borrowers have requested consent to the consummation of the
Wholesale Transaction, as described below.
 
D. Pursuant to Section 11.3(b) of the Loan Agreement, the parties desire to
enter into this Amendment to modify the terms of the Loan Agreement as set forth
in this Amendment, including, without limitation, to permit the consummation of
the Wholesale Transaction, in each case, on the terms and subject to the
conditions set forth in this Amendment.
 
SECTION 1 DEFINITIONS; INTERPRETATION.
 
(a) Terms Defined in Loan Agreement. All capitalized terms used in this
Amendment (including in the recitals hereof) and not otherwise defined herein
shall have the meanings assigned to them in the Loan Agreement.
 
(b) Rules of Construction. The rules of construction that appear in the last
paragraph of Section 1.1 of the Loan Agreement shall be applicable to this
Amendment and are incorporated herein by this reference.
 
SECTION 2 AMENDMENTS TO THE LOAN AGREEMENT.
 
(a) The Loan Agreement shall be amended as follows effective as of the date
hereof:
 
(i) The following defined terms in Section 1.1 of the Loan Agreement are hereby
amended and restated as set forth below, or, if applicable, are added to Section
1.1 of the Loan Agreement in appropriate alphabetical order:
 
“Amortization Date” means June 30, 2019, provided, that if the Interest-Only
Extension Condition is met, the Amortization Date shall be extended to December
30, 2019.
 
 
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“Budget” means a budget for Parent and its Subsidiaries, on a consolidated
basis, acceptable to Agent, provided that in any event a budget reflecting
Revenue, Adjusted EBITDA, if applicable, and Gross Profit, if applicable, of no
less than the amounts set forth in the projections delivered to Agent as of the
First Amendment Effective Date will be acceptable to Agent, provided further
that, if a Borrower consummates a Permitted Acquisition and such Permitted
Acquisition is reasonably likely to affect the projections previously delivered,
as reasonably determined by Agent based on its review of the proposed
transaction, at all times thereafter, a budget will be acceptable to Agent if
reflecting Revenue, Adjusted EBITDA, if applicable, and Gross Profit, if
applicable, of no less than the amounts set forth in the updated projections
reasonably approved by Agent in connection with such transaction.
 
“First Amendment” means the First Amendment to this Agreement, dated as of
October 30, 2018.
 
“First Amendment Effective Date” means October 30, 2018.
 
“Interest Only Extension Condition” means that prior to December 15, 2019, a
Growth Capital Term Loan Advance in principal amount of $5,000,000 shall have
been made pursuant to Tranche III.
 
“Inventory Financing Agreement” means that certain Inventory Financing and
Security Agreement, by and among Inventory Financing Lenders and RMBL Missouri,
dated February 16, 2018, as modified by that certain Addendum No. 1 dated as of
June 29, 2018 and that certain Addendum No. 2 dated as of September 25, 2018,
and as may be further modified or amended in compliance with the Inventory
Financing Intercreditor Agreement and similar agreements entered into with any
Inventory Financing Lender.
 
“Inventory Financing Lenders” means, with respect to the Inventory Financing
Agreement, Ally Bank and Ally Financial Inc., collectively, and with respect to
the Wholesale Inventory Financing, NextGear Capital, Inc., in each case,
together with each of their assigns or successors in interest, and any
additional or replacement lenders providing inventory financing to any Borrower
other than Parent, provided that such lender shall be domiciled in the United
States and shall be in the business of extending credit of such type in the
ordinary course of business.
 
“Performance Milestone III” means Borrower Representative shall have provided
evidence reasonably satisfactory to Agent that Parent, on a consolidated basis,
shall have achieved: (i) Adjusted EBITDA for any consecutive six month period
prior to December 15, 2019 of at least $5,000,000 for such period; and (ii) as
of the date such evidence is provided, no Event of Default shall have occurred
and be continuing.
 
“Permitted Inventory Financing Cash Collateral” means cash collateral required
to be provided pursuant to any Inventory Financing Agreement, provided that (a)
with respect to a Qualified Inventory Financing, (i) the aggregate amount of
such cash collateral shall not in any event exceed the greater of (A) $250,000
and (B) 10.0% of the approved credit line pursuant to such Qualified Inventory
Financing, (b) with respect to a Wholesale Inventory Financing, $7,000,000, and
(c) at any time, no additional cash collateral shall be provided if doing so
would result in an Event of Default or could reasonably be expected to result in
an Event of Default.
 
“Qualified Cash” means the aggregate balance maintained in all Borrowers’
Deposit Accounts and accounts in which Investment Property of Borrowers is
maintained, in each case, that are subject to an Account Control Agreement in
favor of Agent and pursuant to which Agent has a first lien perfected security
interest, and, for the avoidance of doubt, excluding any Permitted Inventory
Financing Cash Collateral.
 
 
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“Term Loan Maturity Date” means, with respect to Tranche I, May 1, 2021, and
with respect to Tranche II, Tranche III and Tranche IV, October 1, 2021.
 
“Tranche” means any of Tranche I, Tranche II, Tranche III or Tranche IV.
 
“Wholesale Express Acquisition” means the acquisition of all of the issued and
outstanding membership interests of Wholesale Express, LLC, a Tennessee limited
liability company, by Parent, pursuant to that certain Membership Interest
Purchase Agreement, dated as of October 26, 2018 (the “Wholesale Express
Purchase Agreement”, and together with all schedules, exhibits and annexes
thereto, all side letters and material ancillary agreements entered into in
connection therewith, the “Wholesale Express Purchase Documents”).
 
“Wholesale Inventory Financing” means Indebtedness owing to Inventory Financing
Lenders pursuant to the Wholesale Inventory Financing Documents, provided that
(i) no Borrower other than Wholesale shall be a borrower pursuant thereto, (ii)
no Borrower other than Parent and RMBL Tennessee shall be a guarantor with
respect thereto, (iii) the obligations pursuant to such facility shall not be
secured by any Lien other than a Lien on property of Wholesale, (iv) the
Wholesale Inventory Financing Documents shall not prohibit (A) the Indebtedness
incurred or Liens granted pursuant to this Agreement (including with respect to
Wholesale) or (B) the payment of any amounts when due pursuant to this Agreement
(including by Wholesale), (v) the Wholesale Inventory Financing Intercreditor
Agreement shall be in full force and effect, (vi) the aggregate amount of
Indebtedness outstanding thereunder shall not exceed $75,000,000 at any time,
(vii) the advance rates shall not deviate materially from the advance rate
structure pursuant to the inventory financing arrangements provided by NextGear
Capital, Inc. as in effect on the First Amendment Effective Date, and (viii) the
interest rate and applicable fees shall not be higher and the cash collateral or
deposit required shall not be a higher percentage of the approved credit limit,
in each case, relative to the inventory financing arrangements provided by
NextGear Capital, Inc. as in effect on the First Amendment Effective Date.
 
“Wholesale Inventory Financing Intercreditor Agreement” means an intercreditor
agreement, to be entered into subsequent to the First Amendment Effective Date
in accordance with Appendix II (Item 4) of the First Amendment, by and among
NextGear Capital, Inc. and Agent, in form and substance satisfactory to Agent in
Agent’s reasonable discretion, as amended, restated, supplemented or otherwise
modified from time to time, or any similar agreement entered into by and among
any Inventory Financing Lender and Agent, in form and substance satisfactory to
Agent, in Agent’s reasonable discretion with respect to a Wholesale Inventory
Financing as in effect from time to time.
 
“Wholesale Inventory Financing Documents” means (i) that certain Demand
Promissory Note and Loan and Security Agreement, dated as of the First Amendment
Effective Date, (ii) that certain Amendment to Demand Promissory Note and Loan
and Security Agreement, dated as of the First Amendment Effective Date, (iii)
that certain Corporate Guaranty, dated as of the First Amendment Effective Date
by Parent and (iv) that certain Corporate Guaranty, dated as of the First
Amendment Effective Date by RMBL Tennessee, in each case, as amended, restated,
supplemented or otherwise modified from time to time, or any similar agreements
entered into with respect to a replacement inventory financing facility provided
by an Inventory Financing Lender, in each case, consistent with the defined term
“Wholesale Inventory Financing” and any other restriction with respect thereto
pursuant to this Agreement.
 
 
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“Wholesale Merger” means the merger of Wholesale Holdings, Inc., a Tennessee
corporation (“Wholesale Holdings”), into RMBL Tennessee, pursuant to that
certain Agreement and Plan of Merger, dated as of October 26, 2018 (as amended
by that certain Amendment to Merger Agreement, dated as of October 29, 2018, the
“Wholesale Merger Agreement”, and together with all schedules, exhibits and
annexes thereto, all side letters and material ancillary agreements entered into
in connection therewith, the “Wholesale Merger Documents”), by and among the
Parent, RMBL Tennessee, the shareholders of Wholesale Holdings, Wholesale, LLC,
a wholly-owned subsidiary of Wholesale Holdings formerly known as Wholesale,
Inc., Steven Brewster, a Tennessee resident, as the representative of the
shareholders of Wholesale Holdings, and, for the limited purpose of Section 5.8
of the Wholesale Merger Agreement, Marshall Chesrown and Steven R. Berrard,
pursuant to which Wholesale Holdings shall merge with and into RMBL Tennessee,
with RMBL Tennessee as the surviving entity. Wholesale, LLC, a Tennessee limited
liability company (f/k/a Wholesale, Inc., a Tennessee corporation) is a
wholly-owned direct subsidiary of RMBL Tennessee and an indirect Subsidiary of
Parent.
 
“Wholesale Transaction” means, collectively the Wholesale Merger and the
Wholesale Express Acquisition.
 
“Wholesale Transaction Documents” means, collectively the Wholesale Merger
Documents and the Wholesale Express Purchase Documents.
 
(ii) The specified clauses of the defined term “Permitted Indebtedness” set
forth in Section 1.1 of the Agreement are amended and restated as set forth
below:
 
(b)           Indebtedness of up to $1,000,000 outstanding at any time secured
by a Lien described in clause (f) of the defined term “Permitted Liens”,
provided in the case of acquired Equipment such Indebtedness does not exceed the
cost of the Equipment financed with such Indebtedness;
 
(f)           reimbursement obligations in connection with letters of credit
that are secured by Cash and issued on behalf of a Borrower or a Subsidiary in
an amount not to exceed $500,000 at any time outstanding, and reimbursement
obligations in connection with letters of credit serving as a lease deposit;
 
(h)           (i) Indebtedness pursuant to a Qualified Inventory Financing, and
(ii) Indebtedness of Wholesale, as a borrower, pursuant to the Wholesale
Inventory Financing, and any unsecured guaranty obligations of Parent and RMBL
Tennessee with respect to the Wholesale Inventory Financing;
 
(i)           Indebtedness of any Person whose assets or Equity Interests are
acquired by a Borrower or any of its Subsidiaries in a Permitted Acquisition
provided, that the aggregate amount of such Indebtedness outstanding at any time
does not exceed $250,000 and was not incurred in connection with, or in
contemplation of, such Permitted Acquisition;
 
(l)           other Indebtedness, including Indebtedness covered by, but in
excess of the amounts permitted under clauses (b), (f) and (i) above, at any
time outstanding in an amount not to exceed $2,000,000, (which amount shall be
reduced by the aggregate amount of Indebtedness described in clauses (b), (f)
and (i) above, in each case up to the amount permitted thereunder, that is
outstanding as of the date of determination).
 
(iii) The specified clauses of the defined term “Permitted Investments” set
forth in Section 1.1 of the Agreement are amended and restated as set forth
below:
 
 
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(b)           (i) all repurchases of stock from former employees, directors, or
consultants of Borrower under the terms of applicable repurchase agreements at
the original issuance price of such securities in an aggregate amount not to
exceed $100,000 in any fiscal year, provided that no Event of Default has
occurred and is continuing or could exist after giving effect to the
repurchases, and (ii) all repurchases of stock from former employees, directors,
officers or consultants pursuant to the Wholesale Transaction Documents;
 
(j)           joint ventures or strategic alliances in the ordinary course of
Borrowers’ business consisting of the nonexclusive licensing of technology, the
development of technology or the providing of technical support, provided that
cash Investments (if any) by any Borrower do not exceed $750,000 in the
aggregate in any fiscal year;
 
(l)           additional Investments, including Investments covered by, but in
excess of the amounts permitted under, clauses (b)(i) and (j) above, that do not
exceed $1,500,000 during the term of this Agreement (less the amount of
Investments described in clauses (b)(i) and (j) above made, in each case, up to
the amount permitted thereunder, from the Closing Date through the date of
determination).
 
(iv) The specified clauses of the defined term “Permitted Liens” set forth in
Section 1.1 of the Agreement are amended and restated as set forth below:
 
(m)           (i) Liens on Cash securing obligations permitted under clause (f)
of the definition of Permitted Indebtedness and (ii) security deposits in
connection with real property leases, the combination of (i) and (ii) in an
aggregate amount not to exceed $500,000 at any time;
 
(o)           Liens securing Indebtedness pursuant to a Qualified Inventory
Financing or a Wholesale Inventory Financing, provided that (i) such Liens are
subject to the Inventory Financing Intercreditor Agreement or Wholesale
Inventory Financing Intercreditor Agreement, as applicable, (ii) any cash
collateral subject to a Lien in favor of Inventory Financing Lenders shall not
exceed the amount of the Permitted Inventory Financing Cash Collateral, and
(iii) with respect to the Wholesale Inventory Financing, such Liens are limited
to the assets of Wholesale.
 
(v) The defined term “Permitted Transfers” set forth in Section 1.1 of the
Agreement is amended by amending and restating clause (e) thereof as follows:
 
(e)           other transfers of assets having a fair market value of not more
than $750,000 in the aggregate in any fiscal year.
 
(vi) The defined term “Qualified Inventory Financing” set forth in Section 1.1
of the Agreement is hereby amended and restated as follows:
 
“Qualified Inventory Financing” means Indebtedness owing to Inventory Financing
Lenders pursuant to an Inventory Financing Agreement (excluding, for the
avoidance of doubt, the Wholesale Inventory Financing), provided that (i) any
Inventory Financing Lender shall have entered into and continue to be subject to
the Inventory Financing Intercreditor Agreement with respect to any Inventory
Financing Agreement to which it is a party, (ii) the aggregate amount of such
Indebtedness at any time outstanding shall not exceed an amount equal (x) 85% of
the aggregate book value of all Inventory of Borrowers, on consolidated basis
less (y) the aggregate amount of cash collateral maintained by such Inventory
Financing Lenders, (iii) the advance rates shall not deviate materially from the
advance rate structure pursuant to the inventory financing arrangements as in
effect on the First Amendment Effective Date, and (iv) the interest rate and
applicable fees shall not be higher and the cash collateral or deposit required
shall not be a higher percentage of the approved credit limit, in each case,
relative to the inventory financing arrangements as in effect on the First
Amendment Effective Date.
 
 
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(vii) Section 1.1 of the Loan Agreement is hereby amended to delete each of the
following defined terms:
 
“Performance Milestone I”
 
“Performance Milestone II”
 
(viii) Section 2.1(a) of the Loan Agreement is hereby amended and restated to
read as follows:
 
(a)           Growth Capital Term Commitment. As of the Closing Date, Lender
severally (and not jointly) has made a Growth Capital Term Loan Advance in
principal amount of $5,000,000 (“Tranche I”). On the First Amendment Effective
Date, Lender will severally (and not jointly) make, and Borrower Representative
shall request, a Growth Capital Term Loan Advance in principal amount of
$5,000,000 (“Tranche II”). During the period commencing upon Borrowers’
achievement of Performance Milestone III and ending December 15, 2019, Borrower
Representative may request an additional Growth Capital Term Loan Advance in an
amount of $5,000,000 (“Tranche III”). Upon Borrower Representative’s request and
approval by Lender’s investment committee, in its sole discretion, Borrower
Representative may request additional Growth Capital Term Loan Advances in an
aggregate principal amount $5,000,000 (“Tranche IV”). The aggregate principal
Growth Capital Term Loan Advances outstanding shall not exceed the Maximum
Growth Capital Term Loan Amount.
 
(ix) Section 2.1(d) of the Loan Agreement is hereby amended and restated to read
as follows:
 
(d)           Payment. Borrowers will pay interest on each Growth Capital Term
Loan Advance on the first Business Day of each month, beginning the month after
the Advance Date continuing until (but not including) the Amortization Date.
Borrowers shall repay the aggregate principal balance of the Growth Capital Term
Loan Advances under each Tranche that is outstanding on the day immediately
preceding the Amortization Date, in equal monthly installments of principal and
interest (mortgage style) beginning on the Amortization Date and continuing on
the first Business Day of each month thereafter until the Secured Obligations
(other than inchoate indemnity obligations) are repaid, provided that if the
Term Loan Interest Rate is adjusted in accordance with its terms, or the
Amortization Date is extended, the amount of each subsequent monthly installment
shall be recalculated. If the Interest-Only Extension Condition is met after
June 30, 2019, Borrowers may from the first Business Day of each month after the
date the Interest-Only Extension Condition is met, make payments of interest
only through the Amortization Date, as extended in accordance with its terms,
provided that in no event shall any payment of principal and interest made prior
to the date the Interest-Only Extension Condition was met be refunded. The
entire principal balance of the Growth Capital Term Loan Advances pursuant to
each Tranche and all accrued but unpaid interest hereunder, shall be due and
payable on the applicable Term Loan Maturity Date. Borrowers shall make all
payments under this Agreement without setoff, recoupment or deduction and
regardless of any counterclaim or defense. Lender will initiate debit entries to
the applicable Borrower’s account as authorized on the ACH Authorization (i) on
each payment date of all periodic obligations payable to Lender under each
Growth Capital Term Loan Advance and (ii) out-of-pocket legal fees and costs
incurred by Agent or Lender in connection with Section 11.11 of this Agreement;
provided that, with respect to clause (i) above, in the event that Lender or
Agent informs Borrower Representative that Lender will not initiate a debit
entry to such Borrower’s account for a certain amount of the periodic
obligations due on a specific payment date, Borrowers shall pay to Lender such
amount of periodic obligations in full in immediately available funds on such
payment date; provided, further, that, with respect to clause (i) above, if
Lender or Agent informs Borrower Representative that Lender will not initiate a
debit entry as described above later than the date that is three (3) Business
Days prior to such payment date, Borrowers shall pay to Lender such amount of
periodic obligations in full in immediately available funds on the date that is
three (3) Business Days after the date on which Lender or Agent notifies
Borrower Representative thereof; provided, further, that, with respect to clause
(ii) above, in the event that Lender or Agent informs Borrower Representative
that Lender will not initiate a debit entry to a Borrower’s account for
specified out-of-pocket legal fees and costs incurred by Agent or Lender,
Borrowers shall pay to Lender such amount in full in immediately available funds
within three (3) Business Days.
 
 
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(x) Section 2.4 of the Loan Agreement is hereby amended and restated to read as
follows:
 
2.4           Prepayment. At its option, upon at least seven (7) Business Days
prior written notice to Agent, Borrowers may prepay all, but not less than all,
of the outstanding Advances by paying the entire principal balance, all accrued
and unpaid interest thereon, together with the applicable prepayment charge
equal to the following percentage of the Advance amount being prepaid: (x) with
respect to amounts advanced pursuant to Tranche I prepaid on or prior to the one
year anniversary of the Closing Date, 3.0%, and (y) with respect to amounts
advanced pursuant to any Tranche other than Tranche I prepaid on or prior to the
one year anniversary of the First Amendment Effective Date, 3.0%; and thereafter
through the date that is forty-five (45) days prior to the applicable Term Loan
Maturity Date, 1.0% (each, a “Prepayment Charge”), provided that if the Secured
Obligations are prepaid from the proceeds of the issuance of Indebtedness,
Borrowers shall afford Agent the opportunity to provide a term sheet to
refinance the Secured Obligations (but no Borrower shall be required to enter
into a refinancing transaction with Agent or any Lender even if on substantially
similar terms as the proposed issuance). Borrowers agree that the Prepayment
Charge is a reasonable calculation of Lender’s lost profits in view of the
difficulties and impracticality of determining actual damages resulting from an
early repayment of the Advances. Borrowers shall prepay the outstanding amount
of all principal and accrued interest through the prepayment date and the
Prepayment Charge upon the occurrence of a Change in Control.
 
(xi) Section 2.5 of the Loan Agreement is hereby amended and restated to read as
follows:
 
2.5            End of Term Charge. Borrowers shall pay Lender (i) on the
earliest to occur of (A) the Term Loan Maturity Date applicable to Tranche I,
(B) the date that Borrowers prepay the outstanding Secured Obligations (other
than any inchoate indemnity obligations and any other obligations which, by
their terms, are to survive the termination of this Agreement) in full, or (C)
the date that the Secured Obligations otherwise become due and payable, a charge
of $562,500, and (ii) on the earliest to occur of (A) the Term Loan Maturity
Date applicable to Tranche II and Tranche III, (B) the date that Borrowers
prepay the outstanding Secured Obligations (other than any inchoate indemnity
obligations and any other obligations which, by their terms, are to survive the
termination of this Agreement) in full, or (C) the date that the Secured
Obligations otherwise become due and payable, a charge equal to the sum of
$295,000 and (iii) 2.35% of any principal amount paid or prepaid in respect of a
Growth Capital Term Loan Advance made pursuant to Tranche IV. Notwithstanding
the required payment date of such charge, it shall be deemed earned in full by
Lender as of the First Amendment Effective Date, except that amounts payable
based on Growth Capital Term Loan Advances made pursuant to Tranche IV shall be
deemed earned on the applicable Advance Date with respect to such Advances.
 
(xii) Section 3.2 of the Loan Agreement is hereby amended by adding the
following sentence at the end thereof: “Notwithstanding anything to the contrary
set forth in this Agreement, (x) the terms of any Inventory Financing
Intercreditor Agreement and Wholesale Inventory Financing Intercreditor
Agreement shall control the required priority of Agent’s security interest in
the Collateral, to the extent applicable, and any reference to Agent having a
“first lien” or “highest priority lien” in the Collateral shall, to the extent
applicable, be subject to the priority set forth in such Inventory Financing
Intercreditor Agreement or Wholesale Inventory Financing Intercreditor Agreement
and (y) with respect to Collateral of Wholesale, prior to the execution and
delivery of the Wholesale Inventory Financing Intercreditor Agreement, any
reference to Agent having a “first lien” or “highest priority lien” in the
Collateral shall be amended to state that Agent has a “second lien” or “junior
priority lien” in the Collateral.”
 
(xiii) Section 4.2(a) of the Loan Agreement is hereby amended and restated to
read as follows:
 
(a)           Agent shall have received (i) an Advance Request for the relevant
Advance as required by Section 2.1(b), duly executed by Borrower
Representative’s Chief Executive Officer or Chief Financial Officer and (ii)
with respect to the Advance pursuant to Tranche III, a warrant to purchase Class
B Common Stock of Parent, in form and having a “Warrant Price” and “Applicable
Number” that is the same as such warrant issued to Lender as of the First
Amendment Effective Date.
 
 
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(xiv) Section 7.1(i) of the Loan Agreement is hereby amended and restated to
read as follows:
 
(i)           any material statement, or notice of increased commitment, change
in terms, non-renewal or default or any demand for payment pursuant to a
Qualified Inventory Financing or Wholesale Inventory Financing; and
 
(xv) Section 7.2 of the Loan Agreement is hereby amended by adding the following
sentence at the end thereof: “This Section 7.2 shall not apply to Wholesale.”.
 
(xvi) Section 7.4 of the Loan Agreement is hereby amended to amend and restate
clause (d) as follows: “(d) as permitted pursuant to any Inventory Financing
Intercreditor Agreement or any subordination agreement related to Subordinated
Indebtedness, or prepayments of amounts owing under the Wholesale Inventory
Financing in the ordinary course of business,”
 
(xvii) Section 7.6 of the Loan Agreement is hereby amended to replace the
reference to “$250,000” therein to “$1,000,000”.
 
(xviii) Section 7.11 of the Loan Agreement is hereby amended to amend and
restate the final sentence at the end of such Section: “With respect to any
leased location or location where Collateral (other than vehicles not
constituting Inventory) is held by a bailee, Borrowers shall deliver a landlord
waiver or bailee agreement in favor of Agent, in form and substance reasonably
satisfactory to Agent, provided that for locations existing as of the Closing
Date and for which a landlord waiver or bailee agreement would be required,
Borrowers may deliver the same within thirty (30) days of the Closing Date
(subject to extension from time to time in Agent’s reasonable discretion if
Borrowers have demonstrated their use of commercially reasonable efforts to
obtain such landlord waivers and agreements), and for locations existing as of
the First Amendment Effective Date and for which a landlord waiver or bailee
agreement would be required, Borrowers may deliver the same within thirty (30)
days of the First Amendment Effective Date (subject to extension from time to
time in Agent’s reasonable discretion if Borrowers have demonstrated their use
of commercially reasonable efforts to obtain such landlord waivers and
agreements), and provided further that no landlord waiver or bailee agreement
shall be required to the extent that Collateral (other than vehicles not
constituting Inventory) at all leased or bailee locations not subject to such a
landlord waiver or bailee agreement does not exceed $750,000 at any time.”
 
(xix) Section 7.12 of the Loan Agreement is hereby amended by amending and
restating the last sentence thereof to read as follows: “Any Subsidiary,
including RMBL Missouri but excluding Wholesale, that receives proceeds from the
sale of Inventory, shall, after settlement of any amounts due in respect of a
Qualified Inventory Financing, with respect to the Inventory sold, immediately
transfer the excess proceeds, if any, to a Deposit Account that is subject to an
Account Control Agreement in favor of Agent pursuant to which Agent is the first
lien or controlling secured party, as applicable.”
 
(xx) Section 7.21 of the Loan Agreement is hereby amended and restated to read
as follows:
 
7.21           Financial Covenants.
 
(a)           For each fiscal quarter prior to the draw of Tranche III,
Borrowers shall either (i) achieve Adjusted EBITDA and Gross Profit for such
fiscal quarter, in an amount not less than the amounts set forth in the schedule
below for the relevant period (the “Performance Covenant”) or (ii) maintain
Qualified Cash of at least $10,000,000 at all times (the “Liquidity Covenant”),
provided that if at any time the Performance Covenant is not met for the
immediately preceding fiscal quarter, after the Compliance Certificate is
delivered for such fiscal quarter, Borrowers shall not be in default under this
Section 7.21(a) if Borrowers maintain compliance with the Liquidity Covenant at
all times thereafter until such time as the Performance Covenant is met (at
which time quarterly testing shall resume).
 
 
 
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Fiscal Quarter Ended
 
Minimum Gross Profit
 
Minimum EBITDA
 
December 31, 2018
 
$9,600,000
 
Not applicable
 
March 31, 2019
 
$16,300,000
 
$1
 
June 30, 2019
 
$20,500,000
 
$1,000,000
 
September 30, 2019
 
$25,000,000
 
$1,500,000
 
December 31, 2019
 
$28,300,000
 
$2,000,000
 
March 31, 2020
 
$31,800,000
 
$2,000,000
 
June 30, 2020
 
$33,700,000
 
$2,000,000
 
September 30, 2020
 
$36,200,000
 
$2,000,000
 
December 31, 2020
 
$39,900,000
 
$2,000,000
 

 
(b)           Beginning with the draw of Tranche III, Borrowers shall be subject
to the following financial covenants:
 
(i)           Parent shall achieve Revenue for each quarterly period in an
amount of at least 75% of the amount set forth in the Budget for such period,
tested quarterly.
 
(ii)           If during any fiscal quarter, the average of Qualified Cash
during the fiscal quarter is less than $15,000,000, then Parent shall achieve
quarterly Adjusted EBITDA of not less than $2,000,000 for such quarter, tested
quarterly.
 
(xxi) A new Section 7.25 is hereby added to the Loan Agreement to read as
follows:
 
7.25           Additional Limitations on Wholesale. For as long as a Wholesale
Inventory Financing is in effect, (a) (i) on and after the First Amendment
Effective Date and until the earlier to occur of (A) November 6, 2018 and (B)
the effective date of the Wholesale Inventory Financing Intercreditor Agreement,
any Borrower shall be permitted to make Investments in Wholesale, (ii) if the
Wholesale Inventory Financing Intercreditor Agreement is in effect on or before
November 6, 2018, after the effective date of the Wholesale Inventory Financing
Intercreditor Agreement, no Borrower shall be permitted to make any Investment
in Wholesale unless the amount of Qualified Cash immediately prior to and after
giving pro forma effect to such Investment is at least $10,000,000 and (iii) if
the Wholesale Inventory Financing Intercreditor Agreement is not in effect on or
before November 6, 2018, (A) after November 6, 2018 and until the effective date
of the Wholesale Inventory Financing Intercreditor Agreement, no Borrower shall
be permitted to make any Investment in Wholesale unless the amount of Qualified
Cash immediately prior to and after giving pro forma effect to such Investment
is at least $13,000,000 and (B) after the effective date of the Wholesale
Inventory Financing Intercreditor Agreement, no Borrower shall be permitted to
make any Investment in Wholesale unless the amount of Qualified Cash immediately
prior to and after giving pro forma effect to such Investment is at least
$10,000,000; (b) no Borrower shall transfer material assets to Wholesale; (c) no
Borrower shall merge with or into Wholesale; and (d) Wholesale shall not (i)
conduct any material business other than the business conducted as of the First
Amendment Effective Date and any business incidental thereto or otherwise
applicable to the other Borrowers hereunder; (ii) own any material assets other
than Inventory consisting of pre-owned cars and other assets reasonably
necessary in connection with the business permitted to be conducted by Wholesale
or otherwise applicable to other Borrowers hereunder; or (iii) own any
Subsidiary or enter into any Permitted Acquisition.
 
 
9

 
 
(xxii) Section 9.6 of the Loan Agreement is hereby amended and restated to read
as follows:
 
9.6           Attachments; Judgments. Any material portion of any Borrower’s
assets is attached or seized, or a levy is filed against any such assets, or a
judgment or judgments is/are entered for the payment of money (not covered by
independent third party insurance as to which liability has been accepted
(subject to customary reservation of rights) by such insurance carrier),
individually or in the aggregate, of at least $750,000, or any Borrower is
enjoined or in any way prevented by court order from conducting any material
part of its business;
 
(xxiii) Section 9.7 of the Loan Agreement is hereby amended and restated to read
as follows:
 
9.7           Other Obligations. The occurrence of any default and the passing
of any applicable grace period under any agreement or obligation of any Borrower
(including pursuant to any Inventory Financing Agreement or Wholesale Inventory
Financing Documents) involving any Indebtedness in excess of $750,000, which
could entitle or permit any Person to accelerate such Indebtedness, or any other
material agreement or obligation, if a Material Adverse Effect could reasonably
be expected to result from such default; or
 
(xxiv) Exhibit C to the Loan Agreement is hereby supplemented with respect to
New Borrowers as set forth in Exhibit C attached hereto.
 
(xxv) Exhibit D to the Loan Agreement is hereby supplemented with respect to New
Borrowers as set forth in Exhibit D attached hereto.
 
(xxvi) Exhibit E to the Loan Agreement is hereby supplemented with respect to
New Borrowers as set forth in Exhibit E attached hereto.
 
(xxvii) Exhibit F to the Loan Agreement is hereby amended and restated as set
forth in Exhibit F attached hereto.
 
(xxviii) Schedule 1.1 to the Loan Agreement is hereby amended and restated as
set forth in Schedule 1.1 attached hereto.
 
(xxix) Schedule 5.14 to the Loan Agreement is hereby supplemented with respect
to New Borrowers as set forth in Schedule 5.14 attached hereto.
 
(b) Wholesale Transaction as “Permitted Acquisition”. Notwithstanding the
conditions set forth in the defined term “Permitted Acquisition”, the Wholesale
Transaction shall be deemed to be a Permitted Acquisition and Permitted
Investment, in each case for all purposes of the Loan Agreement.
 
(c) References Within Loan Agreement. Each reference in the Loan Agreement to
“this Agreement” and the words “hereof,” “herein,” “hereunder,” or words of like
import, shall mean and be a reference to the Loan Agreement as amended by this
Amendment. This Amendment shall be a Loan Document.
 
SECTION 3 Conditions of Effectiveness. The effectiveness of this Amendment shall
be subject to Agent’s receipt of the documents and satisfaction of the
conditions as set forth in Appendix I hereto.
 
SECTION 4 Post-Closing Deliveries. Borrowers agree to satisfy the conditions and
deliver the documents set forth in Appendix I hereto within the period set forth
therein, provided that a failure to comply with this Section 4 shall constitute
an immediate Event of Default without cure period.
 
 
10

 
 
SECTION 5 Representations and Warranties. To induce Agent and Lender to enter
into this Amendment, each Borrower hereby confirms, as of the date hereof, (a)
that the representations and warranties made by it in Section 5 of the Loan
Agreement and in the other Loan Documents are true and correct in all material
respects; provided, however, that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof; and (b) that there has not been and
there does not exist a Material Adverse Effect.
 
SECTION 6 Miscellaneous.
 
(a) Loan Documents Otherwise Not Affected; Reaffirmation. Except as expressly
amended pursuant hereto or referenced herein, the Loan Agreement and the other
Loan Documents shall remain unchanged and in full force and effect and are
hereby ratified and confirmed in all respects. Lender’s and Agent’s execution
and delivery of, or acceptance of, this Amendment shall not be deemed to create
a course of dealing or otherwise create any express or implied duty by any of
them to provide any other or further amendments, consents or waivers in the
future. Each Borrower hereby reaffirms the security interest granted pursuant to
the Loan Documents and hereby reaffirms that such grant of security in the
Collateral secures all Secured Obligations under the Loan Agreement and the
other Loan Documents.
 
(b) Conditions. For purposes of determining compliance with the conditions
specified in Section 4, each Lender that has signed this Amendment shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless Agent shall have received
notice from such Lender prior to the date hereof specifying its objection
thereto.
 
(c) Release. In consideration of the agreements of Agent and Lender contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Borrower, on behalf of itself
and its successors, assigns, and other legal representatives, hereby fully,
absolutely, unconditionally and irrevocably releases, remises and forever
discharges Agent and Lender, and its successors and assigns, and its present and
former shareholders, affiliates, subsidiaries, divisions, predecessors,
directors, officers, attorneys, employees, agents and other representatives
(Agent, Lender and all such other persons being hereinafter referred to
collectively as the “Releasees” and individually as a “Releasee”), of and from
all demands, actions, causes of action, suits, covenants, contracts,
controversies, agreements, promises, sums of money, accounts, bills, reckonings,
damages and any and all other claims, counterclaims, defenses, rights of
set-off, demands and liabilities whatsoever of every name and nature, known or
unknown, suspected or unsuspected, both at law and in equity, which any
Borrower, or any of its successors, assigns, or other legal representatives may
now or hereafter own, hold, have or claim to have against the Releasees or any
of them for, upon, or by reason of any circumstance, action, cause or thing
whatsoever which arises at any time on or prior to the day and date of this
Amendment, including, without limitation, for or on account of, or in relation
to, or in any way in connection with the Loan Agreement, or any of the other
Loan Documents or transactions thereunder or related thereto. Each Borrower
waives the provisions of California Civil Code section 1542, which states:
 
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.
 
Each Borrower understands, acknowledges and agrees that the release set forth
above may be pleaded as a full and complete defense and may be used as a basis
for an injunction against any action, suit or other proceeding which may be
instituted, prosecuted or attempted in breach of the provisions of such release.
Each Borrower agrees that no fact, event, circumstance, evidence or transaction
which could now be asserted or which may hereafter be discovered shall affect in
any manner the final, absolute and unconditional nature of the release set forth
above. The provisions of this section shall survive payment in full of the
Secured Obligations, full performance of all the terms of this Amendment and the
other Loan Documents.
 
 
11

 
 
(d) No Reliance. Each Borrower hereby acknowledges and confirms to Agent and
Lender that such Borrower is executing this Amendment on the basis of its own
investigation and for its own reasons without reliance upon any agreement,
representation, understanding or communication by or on behalf of any other
Person.
 
(e) Costs and Expenses. Each Borrower agrees to pay to Agent the date hereof the
reasonable out-of-pocket costs and expenses of Agent and Lender party hereto,
and the fees and disbursements of counsel to Agent and Lender party hereto in
connection with the negotiation, preparation, execution and delivery of this
Amendment and any other documents to be delivered in connection herewith on the
date hereof, and including any recording tax due in connection with the filing
of any UCC Financing Statement.
 
(f) Binding Effect. This Amendment binds and is for the benefit of the
successors and permitted assigns of each party.
 
(g) Governing Law. This Amendment and the other Loan Documents shall be governed
by, and construed and enforced in accordance with, the laws of the State of
California, excluding conflict of laws principles that would cause the
application of laws of any other jurisdiction.
 
(h) Complete Agreement; Amendments. This Amendment and the Loan Documents
represent the entire agreement about this subject matter and supersede prior
negotiations or agreements with respect to such subject matter. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Amendment and the Loan
Documents merge into this Amendment and the Loan Documents.
 
(i) Severability of Provisions. Each provision of this Amendment is severable
from every other provision in determining the enforceability of any provision.
 
(j) Counterparts. This Amendment may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, is an original, and all taken together, constitute one Amendment.
Delivery of an executed counterpart of a signature page of this Amendment by
facsimile, portable document format (.pdf) or other electronic transmission will
be as effective as delivery of a manually executed counterpart hereof.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
 
 
 
12

 
[SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT]
 
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of
the date first above written.
 
 
EXISTING BORROWERS:
 
RUMBLEON, INC.
 
Signature: /s/ Marshall Chesrown 
 
Print Name: Marshall Chesrown 

 
Title: Chief Executive Officer

 
NEXTGEN PRO, LLC
 
Signature:  /s/ Marshall Chesrown 
 
Print Name: Marshall Chesrown 

 
Title: President
 

RMBL MISSOURI, LLC
 
Signature:  /s/ Marshall Chesrown 
 
Print Name: Marshall Chesrown 

 
Title: Manager
 
RMBL TEXAS, LLC
 
Signature:  /s/ Marshall Chesrown 
 
Print Name: Marshall Chesrown 

 
Title: Manager
 

 
 
 

 
 
[SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT]
 
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of
the date first above written.

 
NEW BORROWERS:
 
RMBL TENNESSEE, LLC
 
Signature: /s/ Marshall Chesrown 
 
Print Name: Marshall Chesrown 

 
Title: Manager
 

RMBL EXPRESS, LLC
 
Signature:  /s/ Marshall Chesrown 
 
Print Name: Marshall Chesrown 

 
Title: Chief Executive Officer
 

WHOLESALE, LLC
 
Signature: /s/ Thomas Aucamp
 
Print Name: Thomas Aucamp

 
Title: Chief Administrative Officer and Corporate Secretary

 

WHOLESALE EXPRESS, LLC
 
Signature:  /s/ Thomas Aucamp
 
Print Name: Thomas Aucamp

 
Title: Chief Administrative Officer and Corporate Secretary
 

 
 

 
 
[SIGNATURE PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT]
 
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of
the date first above written.
 
 
AGENT:
 
HERCULES CAPITAL, INC.
 
Signature: /s/ Zhuo Huang
 
Print Name:  Zhuo Huang
 
Title: Associate General Counsel
 
 
 
LENDER:
 
HERCULES CAPITAL, INC.
 
Signature: /s/ Zhuo Huang
 
Print Name: Zhuo Huang
 
Title: Associate General Counsel

 
 
 

 
 
APPENDIX I
 
CLOSING CONDITIONS
 
1.
Agent shall have received satisfactory evidence of Parent’s receipt of
$15,000,000 in net cash proceeds (not including any proceeds from the conversion
or cancellation of Indebtedness) from the issuance of its Equity Interests
immediately prior to the consummation of the Wholesale Transaction.
 
2.
All conditions to the consummation of the Wholesale Transaction in accordance
with the Wholesale Transaction Documents shall have been satisfied.
 
3.
Agent shall have received the following, each of which shall be in form and
substance satisfactory to Agent:
 
(a)
a Perfection Certificate, which shall be true and complete, after giving pro
forma effect to the Wholesale Transaction;
 
(b)
this Amendment, duly executed by Borrowers, Agent and Lender;
 
(c)
a warrant to purchase common stock of Parent;
 
(d)
an Advance Request with respect to the Growth Capital Advance to be made on the
First Amendment Effective Date;
 
(e)
a Joinder Agreement, duly executed by each New Borrower;
 
(f)
a copy of the Inventory Financing Agreement, as in effect with NextGear Capital
as of the First Amendment Effective Date, and all schedules, exhibits, annexes,
appendices and amendments thereto, all side letters and material ancillary
agreements entered into in connection therewith (other than the Wholesale
Inventory Financing Intercreditor Agreement), and a copy of any consent, waiver
or modification pursuant to or guaranty or collateral security document entered
into by another Borrower in connection with such Inventory Financing Agreement
and the Wholesale Transaction;
 
(g)
a duly executed certificate of an officer, manager or member of each Borrower
certifying and attaching copies of (A) the Charter, certified as of a recent
date by the jurisdiction of organization of such Borrower; (B) the bylaws,
operating agreement or similar governing document of such Borrower; (C)
resolutions of such Borrower’s Board, members or managers, evidencing approval
of (1) this Amendment or the Joinder Agreement, as applicable, and with respect
to Parent and (2) the warrant issued in connection with this Amendment and
issuance of Equity Interests in accordance with its terms; (D) resolutions of
the holders of such Borrower’s Equity Interests in connection with the
transactions contemplated by this Agreement, to the extent required pursuant to
the terms of the Charter or other governing document, in each case, as in effect
as of the First Amendment Effective Date; and (E) a schedule setting forth the
name, title and specimen signature of officers or other authorized signers on
behalf of such Borrower to the extent not already delivered to Agent;
 
(h)
true and complete copies of fully executed Wholesale Transaction Documents; and
 
(i)
an updated Budget giving pro forma effect to the Wholesale Transaction,
acceptable to Agent.
 
4.
Agent shall have received satisfactory evidence that all Indebtedness to be
repaid pursuant to the terms of the Wholesale Transaction Documents shall have
been paid in full, and all Liens granted in connection therewith shall have been
terminated, and arrangements with respect to any filings evidencing such
terminations satisfactory to Agent shall have been made.
 
 

 
 
Agent shall have received a commitment fee of $125,000, which may be deducted
from the Advance made on the First Amendment Effective Date.
 
 
 
 
 
 

 

 
APPENDIX II
POST-CLOSING DELIVERIES
 
1.
Within 30 days of the First Amendment Effective Date, Agent shall have received
landlord waivers and bailee agreements as required pursuant to Section 7.11 of
the Loan Agreement with respect to any locations maintained by a New Borrower.
 
2.
Within 30 days of the First Amendment Effective Date, Agent shall have received
Account Control Agreements with respect to all Deposit Accounts and any accounts
where Investment Property is maintained, as required by Section 7.12 of the Loan
Agreement, with respect to Deposit accounts or accounts where Investment
Property is maintained as may be maintained by any New Borrower.
 
3.
Within 30 days of the First Amendment Effective Date, Agent shall have received
certificate of insurance and endorsements with respect to each New Borrower as
required by Section 6.2 of the Loan Agreement, with respect to insurance
required to be maintained by any New Borrower.
 
4.
Within 30 days of the First Amendment Effective Date, Agent shall have received
the duly executed Wholesale Inventory Financing Intercreditor Agreement, duly
executed by the parties thereto; provided that Agent shall use best efforts to
consent to and execute and deliver such Wholesale Inventory Financing
Intercreditor Agreement (such consent, execution and delivery not be
unreasonably withheld, conditioned or delayed) and Agent shall negotiate in good
faith with NextGear Capital, Inc.
 
 

 
 
EXHIBIT C
 
NAME, LOCATIONS, AND OTHER INFORMATION FOR NEW BORROWERS
 
1.
Borrower Representative hereby represents and warrants to Agent, on behalf of
each New Borrower, that each of New Borrower’s current names and organizational
status is as follows:
 
Name:
Type of organization:
State of organization:
Organization file number:
Fiscal year end:
Federal taxpayer identification number:
Former Name(s):
RMBL Express, LLC
limited liability company
Delaware
File #7091687
December 31
82-2190594
N/A
 
 
Name:
Type of organization:
State of organization:
Organization file number:
Fiscal year end:
Federal taxpayer identification number:
Former Name(s):
RMBLTennessee, LLC
limited liability company
Delaware
File #7076747
December 31
83-2073629
N/A
 
 
Name:
Type of organization:
State of organization:
Organization file number:
Fiscal year end:
Federal taxpayer identification number:
Former Name(s):
Wholesale Express, LLC
limited liability company
Tennessee
File#000824155
December 31
81-0798547
N/A
 
 
Name:
Type of organization:
State of organization:
Organization file number:
Fiscal year end:
Federal taxpayer identification number:
Former Name(s):
Wholesale, LLC
limited liability company
Tennessee
File#000445847
December 31
76-0729552
Wholesale, Inc.
 

 
2.
Borrower Representative hereby represents and warrants to Agent, on behalf of
New Borrowers, that each New Borrower’s chief executive office is located at the
following location:
 
1350 Lakeshore Drive, Suite 160
Coppell, TX 75019
 
3.
Borrower Representative hereby represents and warrants to Agent, on behalf of
New Borrowers, that New Borrowers also utilize the following locations:
 
4521 Sharon Road
Suite 370
Charlotte, North Carolina 28211
 
 
 

 
 
Wholesale Express, LLC:
Woodfield Office Park
29548 Southfield Road, Suite 200
Southfield, Michigan 48076
 
7901-7905 Eastgate Boulevard
Mount Juliet, Tennessee 37122
 
1930 South Alma School Road, Suite A-206
Mesa, Arizona 85210
 
Wholesale, LLC:
 
7 Industrial Parkway, Unit No. 24
 
Livingston, New Jersey 07039
 
Richmond Professional Suites
711 S 11th St, Suite 101
Richmond, Texas 77469
 
1809 Gallatin Pike
 
Nashville, Tennessee
 
8037 Eastgate Boulevard
Mount Juliet, Tennessee 37122
 
Bailee locations: None.
 
 
 

 
 
EXHIBIT D
 
NEW BORROWERS’ PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
 
PATENTS
 
None.
 
TRADEMARKS
 
None.
 
COPYRIGHTS
 
None.
 
LICENSES
 
Company
 
Type of License
 
Description of License Agreement
 
Wholesale, LLC
In-bound license
Master Data License Agreement by and between Manheim Remarketing, Inc. and
Wholesale, Inc., dated April 11, 2017

 

 

 
EXHIBIT E
 
DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS
 
[On file with Agent]
 
 
 
 
 
 
 

 

 
EXHIBIT F
 
COMPLIANCE CERTIFICATE
 
Hercules Capital, Inc.
400 Hamilton Avenue, Suite 310
Palo Alto, CA 94301
 
Reference is made to that certain Loan and Security Agreement dated as of April
30, 2018 (as amended, restated, supplemented or otherwise modified from time to
time, the “Loan Agreement”), by and among RUMBLEON, INC., a Nevada corporation,
NEXTGEN PRO, LLC, a Delaware limited liability company, RMBL MISSOURI, LLC, a
Delaware liability company, RMBL TEXAS, LLC, a Delaware limited liability
company, RMBL TENNESSEE, LLC, a Delaware limited liability company, RMBL
EXPRESS, LLC, a Delaware limited liability company, WHOLESALE, LLC, a Tennessee
limited liability company, WHOLESALE EXPRESS, LLC, a Tennessee limited liability
company, and each of their Qualified Subsidiaries from time to time party to the
Loan Agreement (individually, each, a “Borrower”, and collectively,
“Borrowers”), the several banks and other financial institutions or entities
from time to time parties to this Agreement (collectively, “Lender”) and
HERCULES CAPITAL, INC., a Maryland corporation, in its capacity as
administrative agent and administrative agent for Lender (in such capacity
“Agent”). All capitalized terms not defined herein shall have the same meaning
as defined in the Loan Agreement.
 
The undersigned is an Officer of the Borrower Representative, knowledgeable of
all Borrowers’ financial matters, and is authorized to provide certification of
information regarding Borrowers; hereby certifies, in such capacity, that in
accordance with the terms and conditions of the Loan Agreement, each Borrower is
in compliance in all material respects for the period ending ___________ with
all covenants, conditions and terms and hereby reaffirms that as of the date of
the fiscal quarter ended _________________ all representations and warranties
contained therein (except Sections 5.3 and 5.4) are true and correct on and as
of the date of this Compliance Certificate with the same effect as though made
on and as of such date, except to the extent such representations and warranties
expressly relate to an earlier date, after giving effect in all cases to any
standard(s) of materiality contained in the Loan Agreement as to such
representations and warranties. Attached are the required documents and
calculations supporting the above certification. The undersigned further
certifies that the financial statements and calculations are prepared in
accordance with GAAP (to the extent required pursuant to the terms of the Loan
Agreement) and are consistent from one period to the next except as explained
below.
 
REPORTING REQUIREMENT
 
REQUIRED
 
CHECK IF ATTACHED
 
Monthly Financial Statements (Section 7.1(a))
 
Monthly, within 30 days
 
☐
 
 
 
 
Quarterly Financial Statements (or link to 10-Q filing) (Section 7.1(b))
 
Quarterly, within 45 days or such later date as permitted by the SEC or under
the applicable securities laws (which may be delivered by link through investor
relations page)
 
☐
 
 
 
 
Annual Financial Statements (or link to 10-K) (Section 7.1(c))
 
Annually, within 90 days or such later date as is permitted by the SEC or under
the applicable securities laws (which may be delivered by link through investor
relations page)
 
☐
 
 
 
 

 
 

 
 
Compliance Certificate (Section 7.1(d))
 
Together with Monthly or Quarterly Statements
 
☐
 
 
 
 
A/R Agings Report (if A/R > $1,000,000) (Section 7.1(e))
 
Monthly, within 30 days
 
☐
 
 
 
 
A/P Agings Report (if A/P > $600,000) (Section 7.1(e))
 
Monthly, within 30 days
 
☐
 
 
 
 
Budget and Projections (Section 7.1(g))
 
Annually, within 60 days of fiscal year end, and promptly upon any Board
approved update
 
☐
 
 
 
 
Daily Inventory Report (including detail of financed / not financed Inventory)
for Qualified Inventory Financing (Section 7.1(h))
 
Every Business Day
 
☐
 
 
 
 
Material Statement, Report or Notice of any increased commitment, change in
terms, non-renewal or default or any demand for payment received pursuant to
Qualified Inventory Financing or Wholesale Inventory Financing (Section 7.1(i))
 
When received
 
☐
 
 
 
 
FINANCIAL COVENANTS
 
REQUIRED
 
ACTUAL
 
Minimum Cash / Minimum Gross Profit and EBITDA (prior to Tranche III Advance)
 
Maintain levels of Gross Profit and EBITDA set forth in Section 7.21(a), tested
quarterly: [is met/not met/not required to be met];
OR
Maintain Minimum Cash of at least $10,000,000: [is met/not met/not required to
be met]
 
☐ not applicable
 
 
 
As of most recent fiscal quarter ended:
Required Gross Profit
$                        
Actual Gross Profit
$                        
Required EBITDA
$                        
Actual EBITDA
$                        
 
 
 
Unrestricted First Lien Cash: $ 
 

 
 

 
 
Minimum Quarterly Revenue (after Tranche III Advance)
 
75% of Budget
 
☐ not applicable
Budget Quarterly Revenue
$                        
Actual Quarterly Revenue
$                        
% of Budget
 
Minimum Quarterly Adjusted EBITDA, if average cash balance is less than
$15,000,000 (after Tranche III Advance)
 
$2,000,000
 
☐ not applicable
$                        
 
OTHER COVENANTS
 
REQUIRED
 
ACTUAL
 
Equipment Financing
 
Not to exceed $1,000,000 outstanding at any time
 
$                        
 
Letters of Credit (cash secured) except for security for leases
 
Not to exceed $500,000 outstanding at any time
 
$                        
 
Acquired Indebtedness
 
Not to exceed $250,000 outstanding at any time
 
$                        
 
Other Indebtedness
 
Not to exceed $2,000,000 (less on Equipment Financing, Letters of Credit and
Acquired Indebtedness outstanding) outstanding at any time
 
$                        
 
Qualified Inventory Financing
 
Not to exceed 85% of aggregate Inventory value less Inventory Financing Lenders’
aggregate cash collateral
 
(1) Aggregate Inventory value:
$                        
(2) Aggregate Inventory financing Lender cash collateral
$                        
Maximum Inventory financing permitted (line 1 less line 2)
$                        
Actual Inventory financing amount outstanding
$                        
 
Wholesale Inventory Financing
 
Not to exceed $75,000,000 outstanding at any time
 
$                        
 

 
 

 
 
Repurchases of stock from employees, directors or consultants
 
Not to exceed $100,000 in any fiscal year (excluding repurchases in connection
with the Wholesale Transaction Documents, which repurchases shall not count
toward this cap)
 
$                        
 
Joint Ventures
 
Cash contributions not to exceed $750,00 in any fiscal year
 
$                        
 
Additional Investments
 
Not to exceed $1,500,000 (less Repurchases and Joint Ventures made during the
term) during the term
 
$                        
 
Investments in Foreign Subsidiaries
 
As approved by Agent
 
$                        
 
Cash Collateral and Security Deposits
 
Not to exceed $500,000 at any time
 
$                        
 
Landlord Waivers and Bailee Agreements
 
For locations where Collateral (other than non-Inventory vehicles) in excess of
$750,000 is maintained
 
☐ all applicable locations covered
☐ landlord waiver or bailee agreement required for the following new location:
 
 
 
 

 
 

 
 
The undersigned hereby also confirms the below accounts represent all depository
accounts and securities accounts presently open in the name of each Borrower or
Subsidiary, as applicable.
 
 
 
Depository AC #
Financial Institution
Account Type (Depository / Securities)
Last Month Ending Account Balance
Purpose of Account
BORROWER Name/Address:
 
 
1
 
 
 
 
 
2
 
 
 
 
 
3
 
 
 
 
 
4
 
 
 
 
 
5
 
 
 
 
 
6
 
 
 
 
 
7
 
 
 
 
 
 
BORROWER SUBSIDIARY COMPANY Name/Address
 
 
1
 
 
 
 
 
2
 
 
 
 
 
3
 
 
 
 
 
4
 
 
 
 
 
5
 
 
 
 
 
6
 
 
 
 
 
7
 
 
 
 
 
 

 
 

 
 
SCHEDULE 1.1
 
COMMITMENTS
 
LENDER
 
TRANCHE I COMMITMENT
 
TRANCHE II COMMITMENT
 
TRANCHE III COMMITMENT
 
TRANCHE IV COMMITMENT
 
Hercules Capital, Inc.
 
$5,000,000
 
$5,000,000
 
$5,000,000
 
$5,000,000, in Agent’s sole discretion, upon approval by Agent’s investment
committee
 
TOTAL COMMITMENTS
 
$5,000,000
 
$5,000,000
 
$5,000,000
 
$5,000,000, in Agent’s sole discretion, upon approval by Agent’s investment
committee
 

 
 

 
 
SCHEDULE 5.14
 
SUBSIDIARIES
 
RMBL Express, LLC, a Delaware limited liability company
 
RMBL Tennessee, LLC, a Delaware limited liability company
 
Wholesale, LLC, a Tennessee limited liability company
 
Wholesale Express, LLC, a Tennessee limited liability company