SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this “Agreement”) is dated as of May 9,
2019, between RumbleOn, Inc., a Nevada corporation (the “Company”), and each
purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively the “Purchasers”).
 
WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to an exemption from the registration requirements of Section 5 of the
Securities Act (as defined below) contained in Section 4(a)(2) thereof and/or
Regulation D thereunder, the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires to purchase
from the Company, securities of the Company as more fully described in this
Agreement;
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:
 
ARTICLE I
 
DEFINITIONS
 
1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
for all purposes of this Agreement, the following terms have the meanings set
forth in this Section 1.1:
 
“Action” means any action, suit, inquiry, notice of violation, proceeding or
investigation pending or threatened before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign).
 
“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 405 under the
Securities Act.
 
“Board of Directors” means the board of directors of the Company.
 
“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.
 
“Closing” means the closing of the purchase and sale of the Shares pursuant to
Section 2.1.
 
“Closing Date” means the Trading Day on which all of the Subscription Documents
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers’ obligations to pay the Subscription
Amount and (ii) the Company’s obligations to deliver the Shares, in each case,
have been satisfied or waived, but in no event later than the third Trading Day
following the date hereof.
 
“Concurrent 144A Offering” means the offering and sale by the Company pursuant
to Rule 144A under the Securities Act of the Company’s Convertible Senior Notes
due 2024 under that certain Purchase Agreement by and between the Company and
JMP Securities LLC, as initial purchaser, in a transaction exempt from the
registration requirements of the Securities Act.
 
“Commission” means the United States Securities and Exchange Commission.
 
“Common Stock” means the Class B Common Stock of the Company, par value $0.001
per share, and any other class of securities into which such securities may
hereafter be reclassified or changed.
 
“Company Counsel” means Akerman LLP, with offices located at 350 East Las Olas
Boulevard, Fort Lauderdale, Florida 33301.
 
“Disqualification Events” shall have the meaning ascribed to such term in
Section 3.1(o).
 
“Effectiveness Period” shall have the meaning ascribed to such term in Section
5.1(b).
 
“Event Date” shall have the meaning ascribed to such terms in Section 5.1(c).
 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
 
“Initial Filing Date” shall have the meaning ascribed to such term in Section
5.1(a).
 
“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(q).
 
“Investor Questionnaire” means the investor questionnaire attached hereto as
Exhibit A.
 
“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).
 
“Liens” means a lien, charge, pledge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction.
 
“Lock-up Agreement” shall have the meaning ascribed to such term in Section
4.10.
 
“Material Adverse Effect” means (i) a material adverse effect on the legality,
validity or enforceability of any Subscription Document, (ii) a material adverse
effect on the results of operations, assets, business, prospects or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole,
or (iii) a material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under any Subscription
Document.
 
“Per Share Purchase Price” equals $5.00, subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this Agreement but
before the Closing Date.
 
“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
 
“Registrable Securities” shall have the meaning ascribed to such term in Section
5.1(a).
 
“Registration Statement” shall have the meaning ascribed to such term in Section
5.1(a).
 
“Required Approvals” shall have the meaning ascribed to such term in Section
3.1(e).
 
“Risk Factors” means the risk factors attached hereto as Exhibit B.
 
 
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“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
 
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
 
“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 
“Shares” means the shares of Common Stock issued to each Purchaser pursuant to
this Agreement.
 
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock).
 
“Solicitor” shall have the meaning ascribed to such term in Section 3.1(o).
 
“Subscription Amount” means, as to each Purchaser, the amount to be paid for
Shares purchased hereunder as specified below such Purchaser’s name on the
signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.
 
“Subscription Documents” means this Agreement, any other documents or agreements
executed in connection with the transactions contemplated hereunder.
 
“S-1 Registration Statement” shall have the meaning ascribed to such term in
Section 5.1(a).
 
“S-3 Registration Statement” shall have the meaning ascribed to such term in
Section 5.1(a).
 
“Subsidiary” means any subsidiary of the Company as set forth in the SEC
Reports, and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
 
“Trading Day” means a day on which the principal Trading Market is open for
trading.
 
“Trading Market” means any of the following markets or exchanges on which the
Common Stock is listed or quoted for trading on the date in question: the NYSE
MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange (or any successors to any of the
foregoing).
 
“Transaction Documents” means the Company’s presentation dated May 2019.
 
“Transfer Agent” means West Coast Stock Transfer, Inc., the current transfer
agent of the Company, with a mailing address of 721 N. Vulcan Avenue, Suite 205,
Encinitas, California 92024, and any successor transfer agent of the Company.
 
“Variable Rate Transactions” shall have the meaning ascribed to such term in
Section 4.9.
 
 
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ARTICLE II
 
PURCHASE AND SALE
 
2.1 Closing. On the Closing Date, upon the terms and subject to the conditions
set forth herein, the Company agrees to sell, and the Purchasers, severally and
not jointly, agree to purchase, up to an aggregate of 1,900,000 Shares (for a
purchase price of $9,500,000) in increments of $100,000, subject to lesser
amounts being accepted at the Company’s discretion; provided, however, that the
number of Shares sold pursuant to this Agreement shall not exceed 19.9% of the
Company’s issued and outstanding shares of Class A Common Stock of the Company,
par value $0.001 per share, and Common Stock at the time of Closing, on a
pre-transaction basis. On the Closing Date, each Purchaser shall deliver to the
Company such Purchaser’s Subscription Amount via wire transfer of immediately
available funds and the Company shall deliver to each Purchaser its respective
Shares as determined pursuant to Section 2.2(a), and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2. Upon
satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3,
the Closing shall occur at the offices of Company Counsel or such other location
as the parties shall mutually agree.
 
2.2 Deliveries.
 
(a) On or prior to the Closing Date, the Company shall deliver or cause to be
delivered to each Purchaser the following:
 
(i) this Agreement duly executed by the Company; and
 
(ii) a copy of the irrevocable instructions to the Transfer Agent instructing
the Transfer Agent to issuance in book entry form the Shares equal to such
Purchaser’s Subscription Amount divided by the Per Share Purchase Price,
registered in the name of such Purchaser.
 
(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered the following:
 
(i) to the Company, a completed Investor Questionnaire;
 
(ii) to the Company, this Agreement duly executed by such Purchaser; and
 
(iii) to the Company, such Purchaser’s Subscription Amount by wire transfer of
immediately available funds.
 
 
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2.3 Closing Conditions.
 
(a) The obligations of the Company hereunder in connection with the Closing are
subject to the following conditions being met:
 
(i) the accuracy in all material respects (or, to the extent representations or
warranties are qualified by materiality or Material Adverse Effect, in all
respects) on the Closing Date of the representations and warranties of the
Purchasers contained herein (unless as of a specific date therein in which case
they shall be accurate as of such date);
 
(ii) all obligations, covenants and agreements of each Purchaser required to be
performed at or prior to the Closing Date shall have been performed; and
 
(iii) the delivery by each Purchaser of the items set forth in Section 2.2(b) of
this Agreement.
 
(b) The respective obligations of the Purchasers hereunder in connection with
the Closing are subject to the following conditions being met:
 
(i) the accuracy in all material respects (or, to the extent representations or
warranties are qualified by materiality or Material Adverse Effect, in all
respects) when made and on the Closing Date of the representations and
warranties of the Company contained herein (unless as of a specific date therein
in which case they shall be accurate as of such date);
 
(ii) all obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been performed;
 
(iii) the delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement;
 
(iv) there shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and
 
(v) from the date hereof to the Closing Date, trading in the Common Stock shall
not have been suspended by the Commission or the Company’s principal Trading
Market, and, at any time prior to the Closing Date, trading in securities
generally as reported by Bloomberg L.P. shall not have been suspended or
limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any Trading Market, nor shall a
banking moratorium have been declared either by the United States or New York
State authorities nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of such Purchaser, makes
it impracticable or inadvisable to purchase the Shares at the Closing.
 
 

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ARTICLE III
 
REPRESENTATIONS AND WARRANTIES
 
3.1 Representations and Warranties of the Company. Except as set forth in the
SEC Reports, which SEC Reports shall be deemed a part hereof and shall qualify
any representation or otherwise made herein to the extent of the disclosure
contained in the SEC Reports, the Company hereby makes the following
representations and warranties to each Purchaser:
 
(a) Organization and Qualification. The Company and each of the Subsidiaries is
an entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as described in the SEC
Reports. Neither the Company nor any Subsidiary is in violation nor default of
any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the
Company and the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in a Material Adverse Effect.
 
(b) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
this Agreement and each of the other Subscription Documents and otherwise to
carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and each of the other Subscription Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby
have been duly authorized by all necessary action on the part of the Company and
no further action is required by the Company, the Board of Directors or the
Company’s stockholders in connection herewith or therewith other than in
connection with the Required Approvals. This Agreement and each other
Subscription Document to which the Company is a party has been (or upon delivery
will have been) duly executed by the Company and, when delivered in accordance
with the terms hereof and thereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
 
(c) No Conflicts. The execution, delivery and performance by the Company of this
Agreement and the other Subscription Documents to which it is a party, the
issuance and sale of the Shares and the consummation by it of the transactions
contemplated hereby and thereby do not and will not (i) conflict with or violate
any provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals, conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state securities laws
and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not have or reasonably be expected to result in a Material
Adverse Effect.
 
(d) Conduct of Business. Since December 31, 2018, the Company has conducted its
business in the ordinary course materially consistent with past practice. Since
December 31, 2018, there has not been any Material Adverse Effect with respect
to the Company or any of its Subsidiaries nor has there occurred any event that
is reasonably likely to result in a Material Adverse Effect with respect to the
Company or any of its Subsidiaries.
 
(e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Subscription Documents, other
than: (i) the filings required pursuant to Section 4.3 of this Agreement, (ii)
application(s) to each applicable Trading Market for the listing of the Shares
for trading thereon in the time and manner required thereby, and (iii) such
filings as are required to be made under applicable state securities laws
(collectively, the “Required Approvals”).
 
 

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(f) Issuance of the Shares. The Shares are duly authorized and, when issued and
paid for in accordance with the applicable Subscription Documents, will be duly
and validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company.
 
(g) Capitalization. The capitalization of the Company is as set forth in the SEC
Reports, except to the extent affected by the Concurrent 144A Offering. Except
as provided for in the Transaction Documents, the Company has not issued any
capital stock since its most recently filed periodic report under the Exchange
Act, other than pursuant to the vesting and delivery of awards under the
Company’s employee equity plans outstanding as of the date of the most recently
filed periodic report under the Exchange Act. No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Subscription Documents.
 
(h) SEC Reports; Financial Statements. Since January 9, 2017, the Company has
filed all reports, schedules, forms, statements and other documents required to
be filed by the Company under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof (the foregoing materials, including
the exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports”), on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
(“GAAP”), except as may be otherwise specified in such financial statements or
the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
 
(i) Disclosure Controls. The Company maintains disclosure controls and
procedures as required by Rule 13a-15 or 15d-15 under the Exchange Act. Such
disclosure controls and procedures are effective to ensure that all information
required to be disclosed by the Company is recorded and reported on a timely
basis to the individuals responsible for the preparation of the SEC Reports and
other public disclosure documents. The Company maintains internal control over
financial reporting (as defined in Rule 13a-15 or 15d-15, as applicable, under
the Exchange Act). Such internal control over financial reporting is effective
in providing reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with GAAP and includes policies and procedures that (i) pertain to
the maintenance of records that are in reasonable detail and accurately and
fairly reflect the transactions and dispositions of the assets of the Company,
(ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that
receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company, and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Company’s assets that could have a
material effect on its financial statements. No attorney representing the
Company or any of its Subsidiaries, whether or not employed by the Company or
any of its Subsidiaries, has reported evidence of a violation of securities
laws, breach of fiduciary duty or similar violation by the Company or any of its
officers, directors, employees or agents pursuant to the rules adopted pursuant
to Section 307 of the Sarbanes-Oxley Act.
 
(j) Internal Controls. The Company has disclosed, based on the most recent
evaluation by its chief executive officer and its chief financial officer prior
to the date hereof, to the Company’s auditors and the Audit Committee of Board
of Directors (i) any significant deficiencies in the design or operation of its
internal controls over financial reporting that are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report
financial information and has identified for the Company’s auditors and Audit
Committee of the Board of Directors any material weaknesses in internal control
over financial reporting and (ii) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company’s internal control over financial reporting. The Company has delivered
to the Company prior to the date hereof (A) a complete and correct summary of
any such disclosure and (B) any material communication made by management or the
Company’s auditors to the Audit Committee of the Board of Directors required or
contemplated by listing standards of Trading Market, the Audit Committee’s
charter or professional standards of the Public Company Accounting Oversight
Board. No material complaints from any source regarding accounting, internal
accounting controls or auditing matters, and no concerns from the Company’s
employees regarding questionable accounting or auditing matters, have been
received by the Company or, to the knowledge of the Company, the Company’s
independent registered public accounting firm.
 
 

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(k) Trading Market. The Company is in compliance in all material respects with
the applicable listing and corporate governance rules and regulations of Trading
Market. From January 1, 2017 through the date hereof, the Company has not
received any comment letter from the Commission or the staff thereof or, except
as disclosed in the SEC Reports, any correspondence from the Trading Market or
the staff thereof relating to the delisting or maintenance of listing of Common
Stock on Trading Market, other than such disclosures or documents that can be
obtained on the Commission’s website at www.sec.gov. The Company has not taken
and will not take any action designed to or that might reasonably be expected to
cause or result in an unlawful manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
 
(l) Certain Fees. Except with respect to the placement agency fees of $665,000
payable to JMP Securities and associated expense reimbursement, no brokerage or
finder’s fees or commissions are or will be payable by the Company or any
Subsidiary to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Subscription Documents. The Purchasers shall have no
obligation with respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this Section that may
be due in connection with the transactions contemplated by the Subscription
Documents.
 
(m) Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Shares, will not be or be an
Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. The Company shall conduct its business in a
manner so that it will not become an “investment company” subject to
registration under the Investment Company Act of 1940, as amended.
 
(n) Registration Rights. Except (i) as set forth in the SEC Reports, the
Transaction Documents, and Section 4.10 and Section 5.1 of this Agreement and
(ii) in connection with the Concurrent 144A Offering, no Person has any right to
cause the Company or any Subsidiary to effect the registration under the
Securities Act of any securities of the Company or any Subsidiary.
 
(o) No “Bad Actor” Disqualification. The Company has exercised reasonable care,
in accordance with Commission rules and guidance, and has conducted a factual
inquiry, the nature and scope of which reflect reasonable care under the
relevant facts and circumstances, to determine whether any Covered Person (as
defined below) is subject to any of the “bad actor” disqualifications described
in Rule 506(d)(1)(i) to (viii) under the Securities Act (“Disqualification
Events”). To the Company’s knowledge, after conducting such sufficiently
diligent factual inquiries, no Covered Person is subject to a Disqualification
Event, except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3)
under the Securities Act. The Company has complied, to the extent applicable,
with any disclosure obligations under Rule 506(e) under the Securities Act.
“Covered Persons” are those persons specified in Rule 506(d)(1) under the
Securities Act, including the Company; any predecessor or affiliate of the
Company; any director, executive officer, other officer participating in the
offering, general partner or managing member of the Company; any beneficial
owner of 20% or more of the Company’s outstanding voting equity securities,
calculated on the basis of voting power; any promoter (as defined in Rule 405
under the Securities Act) connected with the Company in any capacity at the time
of the sale of the Shares; and any person that has been or will be paid
(directly or indirectly) remuneration for solicitation of purchasers in
connection with the sale of the Shares (a “Solicitor”), any general partner or
managing member of any Solicitor, and any director, executive officer or other
officer participating in the offering of any Solicitor or general partner or
managing member of any Solicitor.
 
(p) Information Provided. The Company confirms that, to its knowledge, with the
exception of the proposed sale of the Shares under this Agreement and the
Subscription Documents relating hereto, neither the Company nor any other
persons acting on its behalf has provided any of the Purchasers or their agents
or counsel with any information that constitutes or might constitute material,
nonpublic information. The Company further confirms that until public disclosure
of the events described above, the Purchasers will be restricted by the insider
trading prohibitions under the Exchange Act from trading or “tipping” on the
basis of such information.
 
 

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(q) Intellectual Property. Except as would not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect, the Company owns
or possesses or has valid rights to use all patents, trademarks, service marks,
trade names, trademark registrations, service mark registrations, copyrights,
licenses, trade secrets and similar rights (“Intellectual Property Rights”), if
any, necessary for the conduct of the business of the Company as currently
carried on and as described in the Company’s SEC Reports. To the knowledge of
the Company, no action or use by the Company necessary for the conduct of its
business as currently carried on and as described in the Company’s SEC Reports
infringes any Intellectual Property Rights of others. Except as would not
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect, the Company has not received any notice alleging any
such infringement with asserted Intellectual Property Rights of others. Except
as would not reasonably be expected to result, individually or in the aggregate,
in a Material Adverse Effect (A) to the knowledge of the Company, there is no
infringement, misappropriation or violation by third parties of any of the
Intellectual Property Rights owned by the Company; (B) there is no pending or,
to the knowledge of the Company, threatened action, suit, proceeding or claim by
others challenging the rights of the Company in or to any such Intellectual
Property Rights, and the Company is unaware of any facts which would form a
reasonable basis for any such claim, that would, individually or in the
aggregate, together with any other claims in this Section 3.1(q), reasonably be
expected to result in a Material Adverse Effect; (C) the Intellectual Property
Rights owned by the Company and, to the knowledge of the Company, the
Intellectual Property Rights licensed to the Company, have not been adjudged by
a court of competent jurisdiction invalid or unenforceable, in whole or in part,
and there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any such
Intellectual Property Rights, and the Company is unaware of any facts which
would form a reasonable basis for any such claim that would, individually or in
the aggregate, together with any other claims in this Section 3.1(q), reasonably
be expected to result in a Material Adverse Effect; (D) there is no pending or,
to the Company’s knowledge, threatened action, suit, proceeding or claim by
others that the Company infringes, misappropriates or otherwise violates any
Intellectual Property Rights or other proprietary rights of others, the Company
has not received any written notice of such claim and the Company is unaware of
any other facts which would form a reasonable basis for any such claim that
would, individually or in the aggregate, together with any other claims in this
Section 3.1(q), reasonably be expected to result in a Material Adverse Effect;
and (E) to the Company’s knowledge, no employee of the Company is in violation
in any material respect of any term of any employment contract, patent
disclosure agreement, invention assignment agreement, non-competition agreement,
non-solicitation agreement, nondisclosure agreement or any restrictive covenant
to or with a former employer where the basis of such violation relates to such
employee’s employment with the Company, or actions undertaken by the employee
while employed with the Company and could reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect. To the Company’s
knowledge, all material trade secrets developed by and belonging to the Company
which have not been patented have been kept confidential. The Company is not a
party to or bound by any options, licenses or agreements with respect to the
Intellectual Property Rights of any other person or entity that are required to
be set forth in the Company’s SEC Reports and are not described therein. To the
Company’s knowledge, none of the technology employed by the Company has been
obtained or is being used by the Company in violation of any contractual
obligation binding on the Company or any of its officers, directors or
employees, or otherwise in violation of the rights of any persons.
 
3.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself
and for no other Purchaser, hereby represents and warrants as of the date hereof
and as of the Closing Date to the Company as follows (unless as of a specific
date therein, in which case they shall be accurate as of such date):
 
(a) Organization; Authority. Each Purchaser is either an individual or an entity
duly incorporated or formed, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power and authority
to enter into and to consummate the transactions contemplated by this Agreement
and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and performance by such Purchaser of
the transactions contemplated by this Agreement have been duly authorized by all
necessary corporate, partnership, limited liability company, investment
management or similar action, as applicable, on the part of such Purchaser. Each
Subscription Document to which it is a party has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except: (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
 
(b) Investment Purpose. Each Purchaser is acquiring the Shares for its own
account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof. Each Purchaser
acknowledges that the Shares will be issued in book entry form with a notation
of restriction as set forth in Section 4.1.
 
(c) Experience of Such Purchaser. Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Shares, and has so evaluated the
merits and risks of such investment. Such Purchaser is able to bear the economic
risk of an investment in the Shares and, at the present time, is able to afford
a complete loss of such investment.
 
(d) Accredited Investor Status.  Each Purchaser is an “accredited investor” as
that term is defined in Rule 501(a) of Regulation D, as promulgated under the
Securities Act and has delivered to the Company a completed Investor
Questionnaire.
 
 
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(e) Reliance on Exemptions.  Each Purchaser understands that the Shares are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and each
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of each Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of each
Purchaser to acquire the Shares.
 
(f) Information. Each Purchaser and its representatives, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and other information each Purchaser deemed material to making an
informed investment decision regarding its purchase of the Shares, which have
been requested by each Purchaser.  Purchaser acknowledges that it has reviewed a
copy of the Subscription Documents, including the Risk Factors, the Transaction
Documents and the SEC Reports. Each Purchaser and its advisors, if any, have
been afforded the opportunity to ask questions of the Company and its
management. Neither such inquiries, nor any other due diligence investigations
conducted by any Purchaser or its advisors, if any, or its representatives,
shall modify, amend or affect each Purchaser’s right to rely on the Company’s
representations and warranties contained in Section 3.1.  Each Purchaser
understands that its investment in the Shares involves a high degree of risk. 
Each Purchaser has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to its
acquisition of the Shares.
 
(g) General Solicitation.  Each Purchaser is not purchasing the Shares as a
result of any advertisement, article, notice or other communication regarding
the Shares published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general
solicitation or general advertisement. 
 
(h) Company Affiliated Investors. Each Purchaser acknowledges that certain
officers and directors of the Company may purchase Shares pursuant to this
Agreement.
 
(i) No Governmental Review. Each Purchaser understands that no United States
federal or state governmental authority has passed on or made any recommendation
or endorsement of the Shares, or the fairness or suitability of the investment
in the Shares, nor have such governmental authorities passed upon or endorsed
the merits of the offering of the Shares.
 
(j) Certain Transactions and Confidentiality. Other than consummating the
transactions contemplated hereunder, each Purchaser has not, nor has any Person
acting on behalf of or pursuant to any understanding with such Purchaser,
directly or indirectly executed any purchases or sales, including Short Sales,
of the securities of the Company during the period commencing as of the time
that such Purchaser first received a term sheet (written or oral) from the
Company or any other Person representing the Company setting forth the material
terms of the transactions contemplated hereunder and ending immediately prior to
the execution hereof. Other than to other Persons party to this Agreement or to
such Purchaser’s representatives, including, without limitation, its officers,
directors, partners, legal and other advisors, employees, agents and Affiliates,
such Purchaser has maintained the confidentiality of all disclosures made to it
in connection with this transaction (including the existence and terms of this
transaction).
 
ARTICLE IV
 
OTHER AGREEMENTS OF THE PARTIES
 
4.1 Transfer and Restrictive Legend.
 
(a) The Shares may only be disposed of in compliance with state and federal
securities laws. In connection with any transfer of Shares other than pursuant
to an effective registration statement, the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the
transferor and reasonably acceptable to the Company, the form and substance of
which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Shares
under the Securities Act.
 
 
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(b) The Purchasers agree to a restrictive notation on the Shares to be issued in
book entry form as follows:
 
THESE SHARES HAVE BEEN ACQUIRED FROM THE ISSUER WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND ARE RESTRICTED
SHARES AS THAT TERM IS DEFINED UNDER RULE 144, PROMULGATED UNDER THE SECURITIES
ACT. THESE SHARES MAY NOT BE SOLD, PLEDGED, TRANSFERRED, DISTRIBUTED, OR
OTHERWISE DISPOSED OF IN ANY MANNER UNLESS SUCH TRANSACTION IS (I) REGISTERED
UNDER THE SECURITIES ACT, (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A
UNDER SAID ACT, OR (III) SOLD PURSUANT TO A VALID EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS AS EVIDENCED BY AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO THE ISSUER, STATING THAT THE TRANSFER DOES NOT INVOLVE A
TRANSACTION REQUIRING REGISTRATION OF SUCH SHARES UNDER THE SECURITIES ACT.
 
4.2 Integration. The Company shall not sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in Section 2
of the Securities Act) that would be integrated with the offer or sale of the
Shares in a manner that would require the registration under the Securities Act
of the sale of the Shares or that would be integrated with the offer or sale of
the Shares for purposes of the rules and regulations of any Trading Market such
that it would require shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the closing of such
subsequent transaction.
 
4.3 Securities Laws Disclosure; Publicity. On the Trading Day immediately
following the Closing Date, the Company shall file a Current Report on Form 8-K
(the “Announcement 8-K”), including the Subscription Documents and the
Transaction Documents with the Commission. From and after the filing of the
Announcement 8-K, the Company represents to the Purchasers that it shall have
publicly disclosed all material, non-public information delivered to any of the
Purchasers by the Company or any of its Subsidiaries, or any of their respective
officers, directors, employees or agents in connection with the transactions
contemplated by the Subscription Documents and the Transaction Documents.
 
4.4 Use of Proceeds. The Company shall use the net proceeds from the sale of the
Shares hereunder as set forth in the Transaction Documents and for working
capital purposes.
 
4.5 Reservation of Common Stock. As of the date hereof, the Company has reserved
and the Company shall continue to reserve and keep available at all times, free
of preemptive rights, a sufficient number of shares of Common Stock for the
purpose of enabling the Company to issue Shares pursuant to this Agreement.
 
4.6 Listing of Common Stock. The Company hereby agrees to use best efforts to
maintain the listing or quotation of the Common Stock on the Trading Market on
which it is currently listed, and concurrently with the Closing, the Company
shall apply to list or quote all of the Shares on such Trading Market and
promptly secure the listing of all of the Shares on such Trading Market. The
Company further agrees, if the Company applies to have the Common Stock traded
on any other Trading Market, it will then include in such application all of the
Shares, and will take such other action as is necessary to cause all of the
Shares to be listed or quoted on such other Trading Market as promptly as
possible. The Company will then take all action reasonably necessary to continue
the listing and trading of its Common Stock on a Trading Market and will comply
in all respects with the Company’s reporting, filing and other obligations under
the bylaws or rules of the Trading Market. The Company agrees to maintain the
eligibility of the Common Stock for electronic transfer through the Depository
Trust Company or another established clearing corporation, including, without
limitation, by timely payment of fees to the Depository Trust Company or such
other established clearing corporation in connection with such electronic
transfer.
 
4.7 Certain Transactions and Confidentiality. Each Purchaser, severally and not
jointly with the other Purchasers, covenants that neither it nor any Affiliate
acting on its behalf or pursuant to any understanding with it will execute any
purchases, sales or effect any other transactions, including Short Sales of any
of the Company’s securities during the period commencing with the execution of
this Agreement and ending at such time that the transactions contemplated by the
Subscription Documents and Transaction Documents are first publicly announced
pursuant to the filing of the Announcement 8-K as described in Section 4.3. Each
Purchaser, severally and not jointly with the other Purchasers, covenants that
until such time as the transactions contemplated by the Subscription Documents
and Transaction Documents are publicly disclosed by the Company pursuant to the
filing of the Announcement 8-K as described in Section 4.3, such Purchaser will
maintain the confidentiality of the existence and terms of this transaction and
the information included in the Subscription Documents and Transaction
Documents.
 
 
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4.8 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with
respect to the Shares as required under Regulation D and to provide a copy
thereof, promptly upon request of any Purchaser. The Company shall take such
action as the Company shall reasonably determine is necessary in order to obtain
an exemption for, or to qualify the Shares for, sale to the Purchasers at the
Closing under applicable securities or “Blue Sky” laws of the states of the
United States, and shall provide evidence of such actions promptly upon request
of any Purchaser.
 
4.9 Restriction on Variable Rate Transactions. From the date hereof until the
one-year anniversary of the Closing Date, the Company shall be prohibited from
effecting or entering into an agreement to effect any issuance by the Company or
any of its subsidiaries of Common Stock or any outstanding convertible
instruments, options or warrants or similar securities (or a combination of
units thereof) involving a Variable Rate Transaction. “Variable Rate
Transaction” means a transaction in which the Company issues or sells any debt
or equity securities that are convertible into, exchangeable or exercisable for,
or include the right to receive additional shares of Common Stock either (A) at
a conversion price, exercise price or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for the shares of
Common Stock at any time after the initial issuance of such debt or equity
securities, or (B) with a conversion, exercise or exchange price that is subject
to being reset at some future date after the initial issuance of such debt or
equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for
the Common Stock. For the avoidance of doubt, the issuance of a security which
is subject to customary anti-dilution protections, including where the
conversion, exercise or exchange price is subject to adjustment as a result of
stock splits, reverse stock splits and other similar recapitalization or
reclassification events, shall not be deemed to be a “Variable Rate
Transaction.” Any Purchaser shall be entitled to obtain injunctive relief
against the Company to preclude any such issuance, which remedy shall be in
addition to any right to collect damages.
 
4.10 Restriction on Future Issuances. The Company agrees that, without the prior
written consent of JMP Securities LLC, it will not, for a period of ninety (90)
days after the date of the Closing Date, (a) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of capital stock of
the Company or any securities convertible into or exercisable or exchangeable
for shares of capital stock of the Company, (b) file or cause to be filed any
registration statement with the Commission relating to the offering of any
shares of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for shares of capital stock of the Company (except
for registration statements on Form S-4 or Form S-8, a resale registration
statement on Form S-3 for the shares of capital stock of the Company issued
hereunder, a resale registration statement on Form S-3 (or Form S-1, if the
Company is unable to use Form S-3) for the notes and shares of Common Stock
underlying the notes issued in the Concurrent 144A Offering, and a resale
registration statement on Form S-3 for the 540,358 shares of Common Stock issued
or to be issued by the Company as consideration in connection with the Company’s
purchase of AutoSport USA, Inc., as described in the Company’s Annual Report on
Form 10-K filed with the SEC on April 1, 2019) or (c) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of capital stock of the Company, whether any
such transaction described in clause (a), (b) or (c) above is to be settled by
delivery of shares of capital stock of the Company or such other securities, in
cash or otherwise. The restrictions contained in this Section 4.10 shall not
apply to (i) the Shares to be sold hereunder, (ii) the issuance by the Company
of shares of capital stock of the Company upon the exercise of a stock option or
warrant or the conversion or vesting of a security outstanding on the date
hereof, (iii) the issuance by the Company of equity awards of the Company under
any equity compensation plan of the Company, (iv) the issuance by the Company of
shares of capital stock of the Company or securities convertible into,
exchangeable for or that represent the right to receive shares of capital stock
of the Company in connection with the acquisition by the Company of the
securities, business, technology, property or other assets of another person or
entity, (v) the entry into the purchase agreement governing the Concurrent Rule
144A Offering or the issuance of shares of Common Stock upon the conversion of
the securities issued in the Concurrent Rule 144A Offering, (vi) the sale of
shares of capital stock of the Company to cover the payment of exercise prices
or the payment of taxes associated with the exercise or vesting of equity awards
under any equity compensation plan of the Company, or (vii) the filing of a
post-effective amendment to the Company’s registration statements on Forms S-3
(Reg. Nos. 333-223425, 333-225217 and 333-226514) and Forms S-8 (Reg. No.
333-219203, 333-223428 and 333-226440) with the Commission to maintain
effectiveness of such registration statements, provided that in each of (ii) and
(iii) above, the underlying shares of capital stock of the Company held by the
Company’s directors and officers shall be restricted from sale pursuant to the
Lock-up Agreement (defined below). In connection with the Concurrent Rule 144A
Offering, the Company has caused to be delivered to JMP Securities LLC prior to
the date of this Agreement a letter from each of the Company’s directors and
executive officers restricting certain acquisitions and dispositions of Company
securities (each, a “Lock-Up Agreement”). The Company will enforce the terms of
each Lock-Up Agreement and issue stop-transfer instructions to the transfer
agent for the Common Stock with respect to any transaction or contemplated
transaction that would constitute a breach of or default under the applicable
Lock-Up Agreement.
 
 

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ARTICLE V
 
REGISTRATION RIGHTS
 
5.1 Registration Procedures and Expenses; Liquidated Damages for Certain Events.
 
(a) The Company shall prepare and file with the Commission, as promptly as
reasonably practicable following Closing, but in no event later than 30 days
following the date hereof (the “Initial Filing Date”), a registration statement
on Form S-3 (or any successor to Form S-3), covering the resale of the
Registrable Securities (as defined below) (the “S-3 Registration Statement”) and
as soon as reasonably practicable thereafter but in no event later than 90 days
following the date hereof (180 days in the event of a review of the S-3
Registration Statement by the SEC), to effect such registration and any related
qualification or compliance with respect to all Registrable Securities held by
the Purchasers. For purposes of this Agreement, the term “Registrable
Securities” shall mean (i) the Shares; and (iii) any Common Stock of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, any Shares. In the event that Form
S-3 (or any successor form) is or becomes unavailable to register the resale of
the Registrable Securities at any time prior to the expiration of the
Purchasers’ registration rights pursuant to Article V, the Company shall prepare
and file with the SEC, as promptly as reasonably practicable following the
Closing but in no event later than the Initial Filing Date, a registration
statement on Form S-1 (or any successor to Form S-1), covering the resale of the
Registrable Securities (the “S-1 Registration Statement” and collectively the
S-3 Registration Statement, the “Registration Statement”) and as soon as
reasonably practicable thereafter but in no event later than 60 days following
the date hereof (120 days in the event of a review of the S-1 Registration
Statement by the SEC), to effect such registration and any related qualification
or compliance with respect to all Registrable Securities held by the Purchasers.
If the Company is not eligible to use Form S-3 at Initial Filing Date, and the
Company subsequently becomes eligible to use Form S-3 during the Effectiveness
Period (as defined below), the Company shall file, as promptly as reasonably
practicable, a new S-3 Registration Statement covering the resale of the
Registrable Securities and replace the S-1 Registration Statement with the new
S-3 Registration Statement upon the effectiveness of the new S-3 Registration
Statement.
 
(b) The Company shall, during the Effectiveness Period, use its reasonable best
efforts to:
 
(i) prepare and file with the Commission such amendments and supplements to the
Registration Statement and the Prospectus used in connection therewith as may be
necessary or advisable to keep the Registration Statement current and effective
for the resale of the Registrable Securities held by a Purchaser for a period
ending on the earlier of (i) the second anniversary of the Closing Date, (ii)
the date on which all Registrable Securities may be sold pursuant to Rule 144
during any three-month period without the requirement for the Company to be in
compliance with the current public information required under Rule 144(c)(1) or
(iii) such time as all Registrable Securities have been sold pursuant to a
registration statement or Rule 144 (collectively, the “Effectiveness Period”).
The Company shall notify each Purchaser promptly upon the Registration Statement
and each post-effective amendment thereto being declared effective by the
Commission and advise each Purchaser that the form of Prospectus contained in
the Registration Statement or post-effective amendment thereto, as the case may
be, at the time of effectiveness meets the requirements of Section 10(a) of the
Securities Act or that it intends to file a Prospectus pursuant to Rule 424(b)
under the Securities Act that meets the requirements of Section 10(a) of the
Securities Act;
 
(ii) furnish to each Purchaser with respect to the Registrable Securities
registered under the Registration Statement such number of copies of the
Registration Statement and the Prospectus (including supplemental prospectuses)
filed with the Commission in conformance with the requirements of the Securities
Act and other such documents as such Purchaser may reasonably request, in order
to facilitate the public sale or other disposition of all or any of the
Registrable Securities by such Purchaser;
 
(iii) make any necessary blue sky filings;
 
 

13

 
(iv) pay the expenses incurred by the Company and the Purchasers in complying
with Article V, including, all registration and filing fees, FINRA fees,
exchange listing fees, printing expenses, fees and disbursements of counsel for
the Company, blue sky fees and expenses and the expense of any special audits
incident to or required by any such registration (but excluding attorneys’ fees
of any Purchaser and any and all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities by the Purchasers);
 
(v) advise the Purchasers, promptly after it shall receive notice or obtain
knowledge of the issuance of any stop order by the Commission delaying or
suspending the effectiveness of the Registration Statement or of the initiation
of any proceeding for that purpose; and it will promptly use its reasonable best
efforts to prevent the issuance of any stop order or to obtain its withdrawal at
the earliest possible moment if such stop order should be issued; and
 
(vi) with a view to making available to the Purchaser the benefits of Rule 144
and any other rule or regulation of the Commission that may at any time permit
the Purchasers to sell Registrable Securities to the public without
registration, the Company covenants and agrees to: (i) make and keep public
information available, as such term is understood and defined in Rule 144, until
the earlier of (A) such date as all of the Registrable Securities qualify to be
resold immediately pursuant to Rule 144 or any other rule of similar effect
during any three-month period without the requirement for the Company to be in
compliance with the current public information required under Rule 144(c)(1) or
(B) such date as all of the Registrable Securities shall have been resold
pursuant to Rule 144 (and may be further resold without restriction); (ii) file
with the Commission in a timely manner all reports and other documents required
of the Company under the Securities Act and under the Exchange Act; and (iii)
furnish to any Purchaser upon request, as long as such Purchaser owns any
Registrable Securities, (A) a written statement by the Company as to whether it
has complied with the reporting requirements of the Securities Act and the
Exchange Act, (B) a copy of the Company’s most recent Annual Report on Form 10-K
or Quarterly Report on Form 10-Q, and (C) such other information as may be
reasonably requested in order to avail the Purchaser of any rule or regulation
of the Commission that permits the selling of any such Registrable Securities
without registration.
 
The Company understands that the Purchasers disclaim being an underwriter, but
acknowledges that a determination by the Commission that a Purchaser is deemed
an underwriter shall not relieve the Company of any obligations it has
hereunder. The Company will not name any Purchaser as an underwriter in a
Registration Statement or Prospectus.
 
(c) If (i) the Registration Statement is not filed on or prior to the Initial
Filing Date, or (ii) the Company fails to file with the Commission a request for
acceleration of the Registration Statement in accordance with Rule 461 under the
Securities Act, within five Trading Days after the date the Company is first
notified (orally or in writing) by the Commission that the Registration
Statement will not be “reviewed” or will not be subject to further review or
comment, or (iii) prior to the effective date of the Registration Statement, the
Company fails to file a pre-effective amendment and otherwise respond in writing
to comments made by the Commission in respect of such Registration Statement
within 21 days after the receipt of comments by or notice from the Commission
that such amendment or resolution of such comments is required in order for such
Registration Statement to be declared effective, or (iv) there occurs the
issuance of by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or (v) at any
time during the period commencing from the six-month anniversary of the date
hereof and ending at such time that all of the Registrable Securities may be
resold during any three-month period without the requirement for the Company to
be in compliance with the current public information required under Rule
144(c)(1), the Company shall fail to satisfy the current public information
requirement under Rule 144(c) (any of the foregoing being referred to as an
“Event”, and for purposes of clauses (i) and (v), the date on which such Event
occurs, and for purpose of clause (ii) the date on which such five Trading Day
period is exceeded, and for purpose of clause (iii) the date which such 21-day
period is exceeded, being the “Event Date”), then except during any period of
time during which the Registrable Securities may be resold pursuant to Rule 144
without volume limitations, in addition to any other rights the Purchasers may
have hereunder or under applicable law, on each such Event Date and on each
monthly anniversary of each such Event Date (if the applicable Event shall not
have been cured by such date) until the applicable Event is cured, the Company
shall pay to each Purchaser an amount in cash, as liquidated damages and not as
a penalty, equal to the product of 1.0% multiplied by the Purchase Price paid by
such Purchaser with respect to the Registrable Securities affected by such Event
and held by such Purchaser on such Event Date or monthly anniversary thereof, up
to a maximum of 10.0% of the Purchase Price for such Registrable Securities
provided that such maximum shall not apply if the applicable Event is the Event
described in clause (v). If the Company fails to pay any liquidated damages
pursuant to this Section in full within seven days after the date payable, the
Company will pay interest thereon at a rate of 12% per annum (or such lesser
maximum amount that is permitted to be paid by applicable law) to the
Purchasers, accruing daily from the date such liquidated damages are due until
such amounts, plus all such interest thereon, are paid in full. The liquidated
damages pursuant to the terms hereof shall apply on a daily pro rata basis for
any portion of a month prior to the cure of an Event.
 
 

14

 

ARTICLE VI
 
MISCELLANEOUS
 
6.1 Termination. This Agreement may be terminated by any Purchaser, as to such
Purchaser’s obligations hereunder only and without any effect whatsoever on the
obligations between the Company and the other Purchasers, by written notice to
the other parties, if the Closing has not been consummated on or before May 30,
2019; provided, however, that no such termination will affect the right of any
party to sue for any breach by any other party (or parties).
 
6.2 Fees and Expenses. Except as expressly set forth in the Subscription
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company and any exercise
notice delivered by a Purchaser), stamp taxes and other taxes and duties levied
in connection with the delivery of any Shares to the Purchasers.
 
6.3 Entire Agreement. The Subscription Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and thereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
 
6.4 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of: (a) the date of transmission, if such
notice or communication is delivered via facsimile or email attachment at the
facsimile number or email address as set forth on the signature pages attached
hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the
next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile or email attachment at the facsimile number or email
address as set forth on the signature pages attached hereto on a day that is not
a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day,
(c) the second (2nd) Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as set forth on the signature pages attached
hereto. To the extent that any notice provided pursuant to any Subscription
Document constitutes, or contains, material, non-public information regarding
the Company or any Subsidiaries, the Company shall simultaneously file such
notice with the Commission pursuant to a Current Report on Form 8-K.
 
6.5 Amendments; Waivers. No provision of this Agreement may be waived, modified,
supplemented or amended except in a written instrument signed, in the case of an
amendment, by the Company and the Purchasers. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right. Any proposed amendment or waiver
that disproportionately, materially and adversely affects the rights and
obligations of any Purchaser relative to the comparable rights and obligations
of the other Purchasers shall require the prior written consent of such
adversely affected Purchaser. Any amendment effected in accordance with
accordance with this Section 6.5 shall be binding upon each Purchaser and holder
of Shares and the Company.
 
6.6 Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
 
6.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger). Any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser assigns or transfers any Shares, provided that such
transferee agrees in writing to be bound, with respect to the transferred
Shares, by the provisions of the Subscription Documents that apply to the
“Purchasers.”
 
 

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6.8 No Third-Party Beneficiaries. JMP Securities LLC shall be the third party
beneficiary of the representations and warranties of the Company in Section 3.1
and the representations and warranties of the Purchasers in Section 3.2. This
Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as otherwise set forth
in this Section 6.8.
 
6.9 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Subscription Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State
of New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Subscription Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Subscription Documents), and hereby irrevocably waives, and agrees not to assert
in any Action or Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is improper or is
an inconvenient venue for such Proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
Action or Proceeding by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. If any party shall commence an
Action or Proceeding to enforce any provisions of the Subscription Documents,
then the prevailing party in such Action or Proceeding shall be reimbursed by
the non-prevailing party for its reasonable attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Action or Proceeding.
 
6.10 Survival. The representations and warranties contained herein shall survive
the Closing and the delivery of the Shares.
 
6.11 Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to each other party, it being understood that the parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
 
6.12 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
 
6.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) any of the other
Subscription Documents, whenever any Purchaser exercises a right, election,
demand or option under a Subscription Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.
 
6.14 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.
 
 

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6.15 Construction. The parties agree that each of them and/or their respective
counsel have reviewed and had an opportunity to revise the Subscription
Documents and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Subscription Documents or any amendments thereto.
In addition, each and every reference to share prices and shares of Common Stock
in any Subscription Document shall be subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this Agreement but
before the Closing Date.
 
6.16 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES. ACCORDINGLY, IN ANY ACTION, SUIT, OR
PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.
 
(Signature Pages Follow)
 
 

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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
RUMBLEON, INC.
Address for Notice:

By:

1350 Lakeshore Drive

Name: Steven R. Berrard  

Suite 160

Title: Chief Financial Officer 

Coppell, Texas 75019

 
With a copy to (which shall not constitute notice):
 
Akerman LLP
Attn: Michael Francis
         Christina Russo 

350 E. Las Olas Boulevard
Fort Lauderdale, FL 33301

 

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
 
 
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
 
 

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[PURCHASER SIGNATURE PAGES TO RUMBLEON SECURITIES PURCHASE AGREEMENT]
 
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
 
 
 
 
Name of Purchaser:
 
 
 
 
 
 
 
Signature of Authorized Signatory of Purchaser:
 
 
 
 
 
 
 
Name of Authorized Signatory:
 
 
 
 
 
 
 
Title of Authorized Signatory:
 
 
 
 
 
 
 
Email Address of Authorized Signatory:
 
 
 
 
 
 
 
Facsimile Number of Authorized Signatory:
 
 
 
 
 
 
 
Address for Notice to Purchaser:
 
 
 
 
 
Address for Delivery of Shares to Purchaser (if not same as address for
 
 
notice):
 
 

Social Security Number or Taxpayer ID of
Purchaser:                                                                                                                                                      
 
 
Subscription Amount:
 
$
 
 
Shares:
 
 
 
 

 
☐ Notwithstanding anything contained in this Agreement to the contrary, by
checking this box (i) the obligations of the above-signed to purchase the
securities set forth in this Agreement to be purchased from the Company by the
above-signed, and the obligations of the Company to sell such securities to the
above-signed, shall be unconditional and all conditions to Closing shall be
disregarded, (ii) the Closing shall occur on the third (3rd) Trading Day
following the date of this Agreement and (iii) any condition to Closing
contemplated by this Agreement (but prior to being disregarded by clause (i)
above) that required delivery by the Company or the above-signed of any
agreement, instrument, certificate or the like or purchase price (as applicable)
shall no longer be a condition and shall instead be an unconditional obligation
of the Company or the above-signed (as applicable) to deliver such agreement,
instrument, certificate or the like or purchase price (as applicable) to such
other party on the Closing Date.
 
 

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EXHIBIT A
 
INVESTOR QUESTIONNAIRE
 
IN CONNECTION WITH RUMBLEON, INC.'S PROPOSED SALE OF CLASS B COMMON STOCK (THE
“SHARES”) , PLEASE INDICATE IF YOU QUALIFY AS AN "ACCREDITED INVESTOR" UNDER ONE
OR MORE OF THE FOLLOWING (please check all that apply):
 
 
Any individual whose net worth, or joint net worth with that person’s spouse, at
the time of his or her purchase of the Shares, exceeds US$1,000,000. For
purposes of calculating net worth under this section, (i) the person's primary
residence shall not be included as an asset; (ii) indebtedness that is secured
by the person's primary residence, up to the estimated fair market value of the
primary residence at the time of the sale of the Shares, shall not be included
as a liability (except that if the amount of such indebtedness outstanding at
the time of sale of securities exceeds the amount outstanding 60 days before
such time, other than as a result of the acquisition of the primary residence,
the amount of such excess shall be included as a liability); and (iii)
indebtedness that is secured by the person's primary residence in excess of the
estimated fair market value of the primary residence at the time of the sale of
the Shares shall be included as a liability.
 
Any individual who had an individual income in excess of US$200,000 in each of
the two most recent years or joint income with that person’s spouse in excess of
US$300,000 in each of those years and reasonably expects to reach the same
income level in the current year.
 
Any director or executive officer of RumbleOn, Inc. For purposes of this
section, “executive officer” means the president; any vice president in charge
of a principal business unit, division or function, such as sales,
administration or finance; or any other person or persons who perform(s) similar
policymaking functions for RumbleOn, Inc..
 
Any organization described in section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership not formed
for the specific purpose of acquiring the Shares, with total assets in excess of
$5,000,000.
 
Any trust, with total assets in excess of US$5,000,000, not formed for the
specific purpose of acquiring the Shares, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) under the Securities Act
of 1933, as amended.
 
Any bank, as defined in Section 3(a)(2) of the Securities Act of 1933, or a
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act of 1933, whether acting in its individual or
fiduciary capacity
 
Any broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934, as amended.
 
Any insurance company as defined in Section 2(a)(13) of the Securities Act of
1933.
 
Any investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of such Act.
 
Any Small Business Investment Company licensed by the U. S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958.
 
 

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Any plan established and maintained by a state, its political subdivisions, or
any agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of $5,000,000.
 
Any employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 (“ERISA”), and either the decision to acquire the Shares
has been made by a plan fiduciary, as defined in Section 3(21) of ERISA, which
is either a bank, savings and loan association, insurance company or registered
investment advisor, or the employee benefit plan has total assets in excess of
$5,000,000, or if a self-directed plan, investment decisions are made solely by
persons who are accredited investors.
 
Any private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.
 
Any entity in which all of the equity owners are Accredited Investors, as
described above. Type of entity:
 
 
Names of Equity Owners:
 
1. __________________________________

2. __________________________________

3. __________________________________

4. __________________________________

 
By signing below, the Investor confirms that the information in this Investor
Questionnaire is true, correct and complete.
 
  ____________________________________
  Name of Investor
 
By: _______________________________

        Signature

Title:_______________________________

          (if any)

Date: ______________________________,2019 

 
 
 
 

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