Blueprint





  Exhibit 10.4











 



SUBORDINATION AGREEMENT

 


This
Subordination Agreement is made as of April 30, 2018 by and among
the undersigned creditors (collectively, “Creditors”, and each, a
“Creditor”), RUMBLEON,
INC., a Nevada corporation (“Parent”), NEXTGEN PRO,
LLC, a Delaware limited liability company (“NextGen Pro”), RMBL
MISSOURI, LLC, a Delaware limited liability company
(“RMBL
Missouri”), RMBL TEXAS, LLC, a Delaware limited
liability company (“RMBL Texas”), and each of
their Qualified Subsidiaries from time to time party hereto
(together with Parent, NextGen Pro, RMBL Missouri and RMBL Texas,
individually, each, a “Borrower”, and
collectively, “Borrowers”), and HERCULES
CAPITAL, INC. (“Agent”), in its capacity
as administrative agent for itself and Lender (as defined in the
Loan Agreement (as defined below)).

 



RECITALS

 

 

A. Borrowers have
requested certain loans and other credit accommodations pursuant to
the terms of that certain Loan and Security Agreement dated as of
April 30, 2018 by and between Borrowers, Agent and certain lenders
from time to time party to thereto (as amended, restated,
supplemented or otherwise modified from time to time, the
“Loan
Agreement”), and have granted a security interest in
substantially all assets to secure the obligations
thereunder.

 

B. Each Creditor has
extended loans or other credit accommodations to Borrowers and may
in the future extend additional loans or credit accommodations to
Borrowers from time to time, subject to the terms of the Loan
Agreement, including without limitation that certain Promissory
Note, dated March 31, 2017, in original principal amount of
$370,556 issued to Blue Flame Capital, LLC, that certain Promissory
Note, dated March 31, 2017, in original principal amount of
$148,222 issued to Lori Sue Chesrown, and that certain Promissory
Note, dated March 31, 2017, in original principal amount of
$148,222 issued to Ralph Wegis (collectively, the
“Subordinated
Notes” and each, a “Subordinated
Note”).

 

C. Each Creditor is
willing to subordinate: (i) all of any Borrower’s
indebtedness and obligations to such Creditor, whether presently
existing or arising in the future (the “Subordinated Debt”) to
all of Borrowers’ indebtedness and obligations to Agent and
Lender; and (ii) all of such Creditor’s security
interests, if any, in any Borrower’s property, to all of
Agent’s security interests in Borrowers’ property , all
in accordance with the provisions set forth herein.

 



AGREEMENT

 


NOW,
THEREFORE, THE PARTIES AGREE AS FOLLOWS:

 

1. Each Creditor
subordinates to Agent any security interest or lien that such
Creditor may have in any property of any Borrower. Notwithstanding
the respective dates of attachment or perfection of the security
interest of a Creditor and the security interest of Agent, the
security interest of Agent in the Collateral, as defined in the
Loan Agreement, shall at all times be prior to the security
interest of such Creditor. Capitalized terms not otherwise defined
herein shall have the same meaning as in the Loan
Agreement.

 

2. Except as expressly
set forth in Section 3, all Subordinated Debt is subordinated in
right of payment to all obligations of any Borrower to Agent and
Lender now existing or hereafter arising, together with all costs
of collecting such obligations (including attorneys’ fees),
including, without limitation, all interest accruing after the
commencement by or against any Borrower of any Bankruptcy,
reorganization or similar proceeding, and all obligations under the
Loan Agreement (the “Senior
Debt”).

 







1








 






 

3. No Creditor will
demand or receive from any Borrower (and no Borrower will pay to
such Creditor) all or any part of the Subordinated Debt, by way of
payment, prepayment, setoff, lawsuit or otherwise, nor will such
Creditor exercise any remedy with respect to the Collateral, nor
will such Creditor commence, or cause to commence, prosecute or
participate in any administrative, legal or equitable action
against any Borrower, for so long as any portion of the Senior Debt
remains outstanding. Notwithstanding the foregoing, Creditors shall
be permitted to receive, and Borrowers shall be permitted to pay,
the following payments:

 




a.

If an Advance has
been made pursuant to Tranche III of the Loan Agreement, regularly
scheduled payments as set forth in the Subordinated Notes in the
form attached hereto, but only if no Event of Default has occurred
and is continuing as of the date of such payment and no Event of
Default would result from such payment.





 




b.

If no Advance has
been made pursuant to Tranche III of the Loan Agreement, (a)
regularly scheduled payments of interest as set forth in the
Subordinated Notes in the form attached hereto, but only if no
Event of Default has occurred and is continuing as of the date of
such payment and no Event of Default would result from such
payment, and (b) regularly scheduled payments of principal as set
forth in the Subordinated Notes in the form attached hereto, but
only if (i) after giving pro forma effect to such payment,
Borrowers would have cash in Deposit Accounts or Investment
Accounts subject to Account Control Agreements (as such terms are
defined in the Loan Agreement) in favor of Agent in an amount not
less than $7,500,000, on a consolidated basis, or (ii) as of the
end of the last fiscal quarter for which financial statements were
required to be delivered to Agent pursuant to the Loan Agreement,
Parent maintained Adjusted EBITDA (as defined in the Loan
Agreement) for the twelve month period ended as of such date, of
not less than $2,000,000.





 


For
purposes of the foregoing determinations, amounts of permitted
payments shall be determined in the aggregate for all Subordinated
Notes and taking into account the aggregate payments due in respect
of the Subordinated Notes.

 

4. Each Creditor shall
promptly deliver to Agent in the form received (except for
endorsement or assignment by such Creditor where required by Agent)
for application to the Senior Debt any payment, distribution,
security or proceeds received by such Creditor with respect to the
Subordinated Debt other than in accordance with this
Agreement.

 

5. In the event of any
Borrower’s insolvency, reorganization or any case or
proceeding under any Bankruptcy or insolvency law or laws relating
to the relief of debtors, these provisions shall remain in full
force and effect, and Agent’s and Lender’s claims
against such Borrower shall be paid in full before any payment is
made to any Creditor.

 

6. For so long as any
of the Senior Debt remains unpaid, each Creditor irrevocably
appoints Agent as such Creditor’s attorney-in-fact, and
grants to Agent a power of attorney with full power of
substitution, in the name of such Creditor or in the name of Agent,
for the use and benefit of Agent, without notice to such Creditor,
to perform at Agent’s option the following acts in any
Bankruptcy, insolvency or similar proceeding involving a
Borrower:

 




(a)

To file the
appropriate claim or claims in respect of the Subordinated Debt on
behalf of such Creditor if such Creditor does not do so prior to 30
days before the expiration of the time to file claims in such
proceeding and if Agent elects, in its sole discretion, to file
such claim or claims; or





 




 

2








 






 




(b)

To accept or reject
any plan of reorganization or arrangement on behalf of such
Creditor and to otherwise vote such Creditor’s claims in
respect of any Subordinated Debt in any manner that Agent deems
appropriate for the enforcement of its rights
hereunder.





 

7. In the event of a
Borrower’s insolvency, reorganization or any case or
proceeding, arrangement or transaction under any federal or state
bankruptcy or insolvency law or similar laws or proceedings
involving a Borrower, for so long as any of the Senior Debt remains
unpaid, if Agent, Lender or any of them shall seek to provide a
Borrower or any other Loan Party with any financing under
Section 364 of the Bankruptcy Code , or Agent or Lender
support or consent to such financing provided by a third party, or
consent to any order for the use of cash collateral under
Section 363 of the Bankruptcy Code (each, a
“DIP
Financing” or “Cash Collateral Use”),
with such DIP Financing or Cash Collateral Use to be secured by all
or any portion of the Collateral (including assets that, but for
the application of Section 552 of the Bankruptcy Code (or any
similar provision of any foreign laws relating to the relief of
debtors) would be Collateral), then each Creditor agrees that it
will raise no objection and will not support, directly or
indirectly, any objection to such DIP Financing or Cash Collateral
Use nor object to the liens or claims granted in connection
therewith on any grounds, including a failure to provide
“adequate protection” for the liens, if any, securing
any Subordinated Debt (and will not request any adequate protection
as a result of such DIP Financing or Cash Collateral Use, and will
not support any debtor-in-possession financing or Cash Collateral
Use which would compete with such DIP Financing or Cash Collateral
Use which is provided to or consented to by Agent or Lender). In
addition, each Creditor agrees that it will not provide nor seek to
provide or support any debtor-in-possession financing without the
prior written consent of Agent.

 

8. Each Creditor shall
immediately affix a legend to the instruments evidencing the
Subordinated Debt stating that the instruments are subject to the
terms of this Agreement. No amendment of the documents evidencing
or relating to the Subordinated Debt shall directly or indirectly
modify the provisions of this Agreement in any manner which might
terminate or impair the subordination of the Subordinated Debt or
the subordination of the security interest or lien that such
Creditor may have in any property of a Borrower. In addition, such
instruments shall not be amended to (i) increase the rate of
interest with respect to the Subordinated Debt, or
(ii) accelerate the payment of the principal or interest or
any other portion of the Subordinated Debt. Each Creditor
represents and warrants that a true copy of the Subordinated Note,
as in effect as of the date hereof is attached as Exhibit A hereto, and that no
Subordinated Note has been assigned to any other
person.

 

9. This Agreement
shall remain effective for so long as Agent or Lender has any
obligation to make credit extensions to a Borrower or any Borrower
owes any amounts to Agent or Lender under the Loan Agreement or
otherwise. If, at any time after payment in full of the Senior Debt
any payments of the Senior Debt must be disgorged by Agent or
Lender for any reason (including, without limitation, the
Bankruptcy of a Borrower), this Agreement and the relative rights
and priorities set forth herein shall be reinstated as to all such
disgorged payments as though such payments had not been made and
each Creditor shall immediately pay over to Agent all payments
received with respect to the Subordinated Debt to the extent that
such payments would have been prohibited hereunder. At any time and
from time to time, without notice to Creditors, Agent or Lender may
take such actions with respect to the Senior Debt as Agent and
Lender, respectively, in its sole discretion, may deem appropriate,
including, without limitation, terminating advances to a Borrower,
increasing the principal amount (which may include any DIP
Financing), extending the time of payment, increasing applicable
interest rates, renewing, compromising or otherwise amending the
terms of any documents affecting the Senior Debt and any collateral
securing the Senior Debt, and enforcing or failing to enforce any
rights against a Borrower or any other person. No such action or
inaction shall impair or otherwise affect Agent’s or
Lender’s rights hereunder.

 

10. This Agreement
shall bind any successors or assignees of a Creditor and shall
benefit any successors or assigns of Agent. This Agreement is
solely for the benefit of each Creditor, Agent and Lender and not
for the benefit of any Borrower or any other party. Each Creditor
further agrees that if a Borrower is in the process of refinancing
a portion of the Senior Debt with a new lender, and if Agent makes
a request of such Creditor, such Creditor shall agree to enter into
a new subordination agreement with the new lender on substantially
the terms and conditions of this Agreement.

 




 

3








 






 

11. This Agreement may
be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one
instrument.

 

12. This Agreement
shall be governed by, and construed in accordance with, the
internal laws of the State of California, without regard to
principles of conflicts of law. Jurisdiction shall lie in the State
of California. THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL
BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER
CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, EACH PARTY,
AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY AND VOLUNTARILY, AND
FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO TRIAL BY
JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN
THE UNDERSIGNED PARTIES. If the jury waiver set forth in this
Section is not enforceable, then any dispute, controversy or
claim arising out of or relating to this Agreement or any of the
transactions contemplated herein shall be resolved by judicial
reference pursuant to Code of Civil Procedure Section 638 et
seq before a mutually acceptable referee or, if none is selected,
then a referee chosen by the Presiding Judge of the California
Superior Court for Santa Clara County, provided this provision
shall not restrict any party from seeking to enforce any
prejudgment remedies.

 

13. This Agreement
represents the entire agreement with respect to the subject matter
hereof, and supersedes all prior negotiations, agreements and
commitments. No Creditor is relying on any representations by
Agent, Lender or any Borrower in entering into this Agreement, and
each Creditor has kept and will continue to keep itself fully
apprised of the financial and other condition of a Borrower. This
Agreement may be amended only by written instrument signed by each
Creditor, Agent and Borrowers.

 

14. In the event of any
legal action to enforce the rights of a party under this Agreement,
the party prevailing in such action shall be entitled, in addition
to such other relief as may be granted, all reasonable costs and
expenses, including reasonable attorneys’ fees, incurred in
such action.

 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 




 

4








 






[SIGNATURE
PAGE TO SUBORDINATION AGREEMENT]

 


IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

 


AGENT:

 


HERCULES CAPITAL,
INC.

 



By: /s/ Zhuo
Huang                       









Name: Zhuo
Huang                                         









Title: Associate General
Counsel 







 


 


 


 


 


 




 








 






 


[SIGNATURE
PAGE TO SUBORDINATION AGREEMENT]

 


IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

 

 


CREDITORS:

 


BLUE
FLAME CAPITAL, LLC

 



By: /s/ Denmar J.
Dixon








Name: Denmar J.
Dixon








Title: Managing
Partner






 


 


 


 


 


 


 




 








 






[SIGNATURE
PAGE TO SUBORDINATION AGREEMENT]

 


IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

 


CREDITORS:

 


LORI
SUE CHESROWN

 



By: /s/ Lori Sue
Chesrown








Name: Lori Sue
Chesrown








Title:                                                                            





 


 


 


 


 


 


 


 

 




 








 






 


[SIGNATURE
PAGE TO SUBORDINATION AGREEMENT]

 


IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

 


CREDITORS:

 


RALPH
WEGIS

 



By: /s/ Ralph
Wegis 








Name: Ralph
Wegis  








Title:                                                                            





 


 


 


 


 


 


 


 




 








 






 


[SIGNATURE
PAGE TO SUBORDINATION AGREEMENT]

 


IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

 


BORROWERS:

 


RUMBLEON,
INC.

 



Signature:            



/s/ Steven R.
Berrard______







Print
Name:     


_ Steven R.
Berrard______







Title:             



__Chief Financial
Officer__





 

 


NEXTGEN
PRO, LLC

 



Signature:         



/s/ Steven R.
Berrard______







Print
Name:    


_ Steven R.
Berrard______







Title:                  



___Manager_____________





 

 


RMBL
MISSOURI, LLC

 



Signature:         



/s/ Steven R.
Berrard______







Print
Name:   


_ Steven R.
Berrard______







Title:           



__Manager______________





 

 


RMBL
TEXAS, LLC

 



Signature:      



/s/ Steven R.
Berrard______







Print
Name:     


_ Steven R.
Berrard______







Title:              



__Manager______________





 


 

 


 

 


 

 




 








 






 


EXHIBIT
A

 


SUBORDINATED
NOTES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 




 








 






 

 

 


THIS
NOTE AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.

 


	
PROMISSORY
NOTE

	
 DUE MARCH 31, 2020






 


	

US $
370, 556

	
 

	

Date of
Issuance: March 31, 2017






 


FOR
VALUE RECEIVED, RumbleON, Inc., a Nevada corporation (the
"Company"),
hereby unconditionally promises to pay to the order of BLUE FLAME CAPITAL, LLC (the
"Holder"),
or their permitted assigns, the aggregate principal sum of THREE
HUNDRED SEVENTY THOUSAND FIVE HUNDRED FIFTY-SIX DOLLARS
($370,556.00) (the "Principal Amount"),
together with interest on the unpaid principal balance of this
Promissory Note (this "Note") at the rate
specified herein. All payments of principal and interest by the
Company under this Note shall be made in United States dollars in
immediately available funds to the account specified by the
Holder.

 

1. Definitions. Unless the context
otherwise requires, when used herein the following terms shall have
the meanings indicated:

 

(a) "Affiliate" means, with
respect to any person or entity, any person or entity which
directly or indirectly controls, is controlled by or is under
common control with such person or entity, as applicable. As used
in this definition, "control" (including, with correlative
meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly of power to direct or cause
the direction of management or policies (whether through ownership
of securities or partnership or other ownership interests, by
contract or otherwise).

 

(b) "Maturity Date" means the
third anniversary of the date of issuance of this
Note.

 

(c) "Outstanding Balance"
means all outstanding principal under the Note and any accrued and
unpaid interest thereon.

 

(d) "Person" means an
individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint
venture, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically
listed herein.


 




 








 






 

2. Transfer. This Note is
transferable and assignable by the Holder to any Person previously
approved, in writing, by the Company; provided, however, that no approval
shall be required in connection with any transfer or assignment of
this Note to an Affiliate of the Holder in compliance with
applicable securities laws. The Company agrees to issue from time
to time a replacement Note in the form hereof to facilitate such
approved transfers and assignments. In addition, after delivery of
an indemnity in form and substance reasonably satisfactory to the
Company, the Company also agrees to promptly issue a replacement
Note if this Note is lost, stolen, mutilated or
destroyed.

 

3. Payment of Principal and Interest;
Prepayment.  

 

(a) Interest shall
accrue from the date hereof and shall continue to accrue on the
outstanding and unpaid Principal Amount until paid in full. From
the date hereof through and until the second anniversary of the
date hereof, interest shall accrue on the outstanding and unpaid
Principal Amount at the rate of 6.5% per annum. From the second
anniversary of the date hereof and until the Maturity Date,
interest shall accrue on the outstanding and unpaid Principal
Amount at the rate of 8.5% per annum. Interest shall be computed on
the basis of a 365-day year for the actual number of days in the
interest period. All Interest shall be paid to Holder semi-annually
in arrears on the last day of each six month anniversary of the
date hereof, including, if applicable, on the Maturity
Date.

 

(b) The Company may, at
its option, at any time, and without penalty, prepay all or any
portion of the principal amount or accrued but unpaid interest on
this Note without the prior written consent of the
Holder.

 

4. Event of Default.
 

 


The
occurrence of any of the following events shall constitute an
"Event of
Default" hereunder:

 

 

(a) the failure of the
Company to make any payment of principal or interest on this Note
when due, whether at maturity, upon acceleration or
otherwise;

 

(b) (i) the Company or
a subsidiary of the Company (a "Subsidiary") makes a
determination to discontinue (or does cease to conduct) business,
makes an assignment for the benefit of creditors or admits in
writing its inability to pay its debts generally as they become
due; (ii) an order, judgment or decree is entered adjudicating the
Company or a Subsidiary as bankrupt or insolvent; (iii) any order
for relief with respect to the Company or a Subsidiary is entered
under the U.S. Bankruptcy Code or any other applicable bankruptcy
or insolvency law; (iv) the Company or a Subsidiary petitions or
applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Company or a Subsidiary or
of any substantial part of the assets of the Company or a
Subsidiary commences any proceeding relating to it under any
bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any jurisdiction; or (v)
any such petition or application in (iv) above is filed, or any
such proceeding is commenced, against the Company or a Subsidiary
and either (x) the Company or such Subsidiary by any act indicates
its approval thereof, consents thereto or acquiesces therein or (y)
such petition, application or proceeding is not dismissed within
sixty (60) days;


 




 








 






 

(c) unless waived by
the Holder, if the Company fails to observe or perform in any
material respect any of its covenants contained in the Note and
such failure continues for more than thirty (30) days after
delivery of written notice thereof;

 

(d) unless waived by
the Holder, the Company's material breach of any other term or
provision in this Note and such failure continues for more than
thirty (30) days after delivery of written notice thereof;
or

 

(e) the Company's
indebtedness for borrowed money is accelerated as a result of a
default or breach under any agreement for such borrowed money,
including but not limited to loan agreements, or material breach
under any real property lease agreements and material capital
equipment lease agreements, by which the Company is bound or
obligated, which breach is not cured by the Company within the
applicable time periods thereof.

 


Upon
the occurrence of any Event of Default, the Outstanding Balance
under this Note shall become immediately due and payable upon
election of the Holder. Upon the occurrence of any Event of
Default, the Holder may, in addition to declaring all amounts due
hereunder to be immediately due and payable, pursue any available
remedy, whether at law or in equity, including, without limitation,
exercising its rights under this Note. If an Event of Default
occurs, the Company shall pay to the Holder the reasonable
attorneys' fees and disbursement and all other reasonable
out-of-pocket costs incurred by the Holder in order to collect
amounts due and owing under this Note or otherwise to enforce the
Holder's rights and remedies hereunder.

 

5. Amendments in Writing. Any term
of this Note may be amended, modified (including, without
limitation, any extension of the Maturity Date) or waived upon the
written consent of the Company and the Holder. No such waiver or
consent in any one instance shall be construed to be a continuing
waiver or a waiver in any other instance unless it expressly so
provides.

 

6. Waivers. The Company hereby
forever waives presentment, demand, presentment for payment,
protest, notice of protest, notice of dishonor of this Note and all
other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note.

 

7. Governing Law; Jurisdiction;
Venue. This Note, and all matters arising directly and
indirectly herefrom (the "Covered Matters"), shall
be governed in all respects by the laws of the State of Nevada as
such laws are applied to agreements between parties in the State of
Nevada. The Company irrevocably submits to the personal
jurisdiction of the courts of the State of Nevada and the United
States District Court located nearest the Company's principal place
of business for the purpose of any suit, action, proceeding or
judgment relating to or arising out of the Covered Matters. Service
of process on the Company in connection with any such suit, action
or proceeding may be served on the Company anywhere in the world by
the same methods as are specified for the giving of notices under
this Note. The Company irrevocably consents to the jurisdiction of
any such court in any such suit, action or proceeding and to the
laying of venue in such court. The Company irrevocably waives any
objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum.


 




 








 






 

8. Notices. All notices and other
communications given or made pursuant to this Note shall be in
writing and shall be deemed effectively given (a) upon personal
delivery to the party to be notified; (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours
of the recipient, and if not so confirmed, then on the next
business day; (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage
prepaid; or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent
to the Holder at the address set forth on the books and records of
the Company or at such other place as may be designated by the
Holder in writing to the Company in accordance with the provisions
of this Section 8, and to the Company at the Company's principal
place of business, or to such e-mail address, facsimile number or
address as subsequently modified by written notice in accordance
with the provisions of this Section 8.

 

9. Successors and Assigns. This
note shall be binding upon the successors or assigns of the Company
and shall inure to the benefit of the successors and permitted
assigns of the Holder.


 


 


 


[SIGNATURE
PAGE FOLLOWS]


 




 








 






IN
WITNESS WHEREOF, the Company has executed this Promissory Note as
of the date first above written.


 


	
 

	

RumbleON,
Inc.



a Nevada corporation


 


 


	
 

	

By_/s/
Steven R. Berrard_________________


Name:
Steven R. Berrard


Title:
CFO


 


Address:



4521 Sharon Road, Suite 370


Charlotte,
North Carolina 28211


 







 

 


 




 








 





 


THIS
NOTE AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.

 


	

PROMISSORY
NOTE

	
 

	

DUE
March 31, 2020


	
 

	
 

	
 


	

US
$148,222

	
 

	

Date of
Issuance: March 31, 2017






 


FOR
VALUE RECEIVED, RumbleON, Inc., a Nevada corporation (the
"Company"),
hereby unconditionally promises to pay to the order of LORI SUE CHESROWN (the
"Holder"),
or their permitted assigns, the aggregate principal sum of ONE
HUNDRED FORTY EIGHT THOUSAND TWO HUNDRED TWENTY-TWO DOLLARS
($148,222.00) (the
"Principal
Amount"), together with interest on the unpaid principal
balance of this Promissory Note (this "Note") at the rate
specified herein. All payments of principal and interest by the
Company under this Note shall be made in United States dollars in
immediately available funds to the account specified by the
Holder.

 

10. Definitions. Unless the context
otherwise requires, when used herein the following terms shall have
the meanings indicated:

 

(a) "Affiliate" means, with
respect to any person or entity, any person or entity which
directly or indirectly controls, is controlled by or is under
common control with such person or entity, as applicable. As used
in this definition, "control" (including, with correlative
meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly of power to direct or cause
the direction of management or policies (whether through ownership
of securities or partnership or other ownership interests, by
contract or otherwise).

 

(b) "Maturity Date" means the
third anniversary of the date of issuance of this
Note.

 

(c) "Outstanding Balance"
means all outstanding principal under the Note and any accrued and
unpaid interest thereon.

 

(d) "Person" means an
individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint
venture, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically
listed herein.


 




 

1








 






 

11. Transfer. This Note is
transferable and assignable by the Holder to any Person previously
approved, in writing, by the Company; provided, however, that no approval
shall be required in connection with any transfer or assignment of
this Note to an Affiliate of the Holder in compliance with
applicable securities laws. The Company agrees to issue from time
to time a replacement Note in the form hereof to facilitate such
approved transfers and assignments. In addition, after delivery of
an indemnity in form and substance reasonably satisfactory to the
Company, the Company also agrees to promptly issue a replacement
Note if this Note is lost, stolen, mutilated or
destroyed.

 

12. Payment of Principal and Interest;
Prepayment.  

 

(a) Interest shall
accrue from the date hereof and shall continue to accrue on the
outstanding and unpaid Principal Amount until paid in full. From
the date hereof through and until the second anniversary of the
date hereof, interest shall accrue on the outstanding and unpaid
Principal Amount at the rate of 6.5% per annum. From the second
anniversary of the date hereof and until the Maturity Date,
interest shall accrue on the outstanding and unpaid Principal
Amount at the rate of 8.5% per annum. Interest shall be computed on
the basis of a 365-day year for the actual number of days in the
interest period. All Interest shall be paid to Holder semi-annually
in arrears on the last day of each six month anniversary of the
date hereof, including, if applicable, on the Maturity
Date.

 

(b) The Company may, at
its option, at any time, and without penalty, prepay all or any
portion of the principal amount or accrued but unpaid interest on
this Note without the prior written consent of the
Holder.

 

13. Event of Default.
 

 


The
occurrence of any of the following events shall constitute an
"Event of
Default" hereunder:

 

 

(a) the failure of the
Company to make any payment of principal or interest on this Note
when due, whether at maturity, upon acceleration or
otherwise;

 

(b) (i) the Company or
a subsidiary of the Company (a "Subsidiary") makes a
determination to discontinue (or does cease to conduct) business,
makes an assignment for the benefit of creditors or admits in
writing its inability to pay its debts generally as they become
due; (ii) an order, judgment or decree is entered adjudicating the
Company or a Subsidiary as bankrupt or insolvent; (iii) any order
for relief with respect to the Company or a Subsidiary is entered
under the U.S. Bankruptcy Code or any other applicable bankruptcy
or insolvency law; (iv) the Company or a Subsidiary petitions or
applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Company or a Subsidiary or
of any substantial part of the assets of the Company or a
Subsidiary commences any proceeding relating to it under any
bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any jurisdiction; or (v)
any such petition or application in (iv) above is filed, or any
such proceeding is commenced, against the Company or a Subsidiary
and either (x) the Company or such Subsidiary by any act indicates
its approval thereof, consents thereto or acquiesces therein or (y)
such petition, application or proceeding is not dismissed within
sixty (60) days;


 




 

2








 






 

(c) unless waived by
the Holder, if the Company fails to observe or perform in any
material respect any of its covenants contained in the Note and
such failure continues for more than thirty (30) days after
delivery of written notice thereof;

 

(d) unless waived by
the Holder, the Company's material breach of any other term or
provision in this Note and such failure continues for more than
thirty (30) days after delivery of written notice thereof;
or

 

(e) the Company's
indebtedness for borrowed money is accelerated as a result of a
default or breach under any agreement for such borrowed money,
including but not limited to loan agreements, or material breach
under any real property lease agreements and material capital
equipment lease agreements, by which the Company is bound or
obligated, which breach is not cured by the Company within the
applicable time periods thereof.

 


Upon
the occurrence of any Event of Default, the Outstanding Balance
under this Note shall become immediately due and payable upon
election of the Holder. Upon the occurrence of any Event of
Default, the Holder may, in addition to declaring all amounts due
hereunder to be immediately due and payable, pursue any available
remedy, whether at law or in equity, including, without limitation,
exercising its rights under this Note. If an Event of Default
occurs, the Company shall pay to the Holder the reasonable
attorneys' fees and disbursement and all other reasonable
out-of-pocket costs incurred by the Holder in order to collect
amounts due and owing under this Note or otherwise to enforce the
Holder's rights and remedies hereunder.

 

14. Amendments in Writing. Any term
of this Note may be amended, modified (including, without
limitation, any extension of the Maturity Date) or waived upon the
written consent of the Company and the Holder. No such waiver or
consent in any one instance shall be construed to be a continuing
waiver or a waiver in any other instance unless it expressly so
provides.

 

15. Waivers. The Company hereby
forever waives presentment, demand, presentment for payment,
protest, notice of protest, notice of dishonor of this Note and all
other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note.

 

16. Governing Law; Jurisdiction;
Venue. This Note, and all matters arising directly and
indirectly herefrom (the "Covered Matters"), shall
be governed in all respects by the laws of the State of Nevada as
such laws are applied to agreements between parties in the State of
Nevada. The Company irrevocably submits to the personal
jurisdiction of the courts of the State of Nevada and the United
States District Court located nearest the Company's principal place
of business for the purpose of any suit, action, proceeding or
judgment relating to or arising out of the Covered Matters. Service
of process on the Company in connection with any such suit, action
or proceeding may be served on the Company anywhere in the world by
the same methods as are specified for the giving of notices under
this Note. The Company irrevocably consents to the jurisdiction of
any such court in any such suit, action or proceeding and to the
laying of venue in such court. The Company irrevocably waives any
objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum.


 




 

3








 






 

17. Notices. All notices and other
communications given or made pursuant to this Note shall be in
writing and shall be deemed effectively given (a) upon personal
delivery to the party to be notified; (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours
of the recipient, and if not so confirmed, then on the next
business day; (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage
prepaid; or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent
to the Holder at the address set forth on the books and records of
the Company or at such other place as may be designated by the
Holder in writing to the Company in accordance with the provisions
of this Section 8, and to the Company at the Company's principal
place of business, or to such e-mail address, facsimile number or
address as subsequently modified by written notice in accordance
with the provisions of this Section 8.

 

18. Successors and Assigns. This
note shall be binding upon the successors or assigns of the Company
and shall inure to the benefit of the successors and permitted
assigns of the Holder.


 


 


 


[SIGNATURE
PAGE FOLLOWS]


 




 

4








 






IN
WITNESS WHEREOF, the Company has executed this Promissory Note as
of the date first above written.


 


	
 

	

RumbleON,
Inc.



a Nevada corporation


 


 


	
 

	

By_/s/
Steven R. Berrard_________________


Name:
Steven R. Berrard


Title:
CFO


 


Address:



4521 Sharon Road, Suite 370


Charlotte,
North Carolina 28211







 


 




 








 






 


THIS
NOTE AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.

 

 


	

PROMISSORY
NOTE

	
 

	

DUE
March 31, 2020


	
 

	
 

	
 


	

US
$148,222

	
 

	

Date of
Issuance: March 31, 2017






 


FOR
VALUE RECEIVED, RumbleON, Inc., a Nevada corporation (the
"Company"),
hereby unconditionally promises to pay to the order of RALPH WEGIS (the "Holder"), or their
permitted assigns, the aggregate principal sum of ONE HUNDRED FORTY
EIGHT THOUSAND TWO HUNDRED TWENTY-TWO DOLLARS ($148,222.00) (the "Principal Amount"),
together with interest on the unpaid principal balance of this
Promissory Note (this "Note") at the rate
specified herein. All payments of principal and interest by the
Company under this Note shall be made in United States dollars in
immediately available funds to the account specified by the
Holder.

 

 

19. Definitions. Unless the context
otherwise requires, when used herein the following terms shall have
the meanings indicated:

 

(a) "Affiliate" means, with
respect to any person or entity, any person or entity which
directly or indirectly controls, is controlled by or is under
common control with such person or entity, as applicable. As used
in this definition, "control" (including, with correlative
meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly of power to direct or cause
the direction of management or policies (whether through ownership
of securities or partnership or other ownership interests, by
contract or otherwise).

 

(b) "Maturity Date" means the
third anniversary of the date of issuance of this
Note.

 

(c) "Outstanding Balance"
means all outstanding principal under the Note and any accrued and
unpaid interest thereon.

 

(d) "Person" means an
individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint
venture, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically
listed herein.


 




 

1








 






 

20. Transfer. This Note is
transferable and assignable by the Holder to any Person previously
approved, in writing, by the Company; provided, however, that no approval
shall be required in connection with any transfer or assignment of
this Note to an Affiliate of the Holder in compliance with
applicable securities laws. The Company agrees to issue from time
to time a replacement Note in the form hereof to facilitate such
approved transfers and assignments. In addition, after delivery of
an indemnity in form and substance reasonably satisfactory to the
Company, the Company also agrees to promptly issue a replacement
Note if this Note is lost, stolen, mutilated or
destroyed.

 

21. Payment of Principal and Interest;
Prepayment.  

 

(a) Interest shall
accrue from the date hereof and shall continue to accrue on the
outstanding and unpaid Principal Amount until paid in full. From
the date hereof through and until the second anniversary of the
date hereof, interest shall accrue on the outstanding and unpaid
Principal Amount at the rate of 6.5% per annum. From the second
anniversary of the date hereof and until the Maturity Date,
interest shall accrue on the outstanding and unpaid Principal
Amount at the rate of 8.5% per annum. Interest shall be computed on
the basis of a 365-day year for the actual number of days in the
interest period. All Interest shall be paid to Holder semi-annually
in arrears on the last day of each six month anniversary of the
date hereof, including, if applicable, on the Maturity
Date.

 

(b) The Company may, at
its option, at any time, and without penalty, prepay all or any
portion of the principal amount or accrued but unpaid interest on
this Note without the prior written consent of the
Holder.

 

22. Event of Default.
 

 


The
occurrence of any of the following events shall constitute an
"Event of
Default" hereunder:

 

 

(a) the failure of the
Company to make any payment of principal or interest on this Note
when due, whether at maturity, upon acceleration or
otherwise;

 

(b) (i) the Company or
a subsidiary of the Company (a "Subsidiary") makes a
determination to discontinue (or does cease to conduct) business,
makes an assignment for the benefit of creditors or admits in
writing its inability to pay its debts generally as they become
due; (ii) an order, judgment or decree is entered adjudicating the
Company or a Subsidiary as bankrupt or insolvent; (iii) any order
for relief with respect to the Company or a Subsidiary is entered
under the U.S. Bankruptcy Code or any other applicable bankruptcy
or insolvency law; (iv) the Company or a Subsidiary petitions or
applies to any tribunal for the appointment of a custodian,
trustee, receiver or liquidator of the Company or a Subsidiary or
of any substantial part of the assets of the Company or a
Subsidiary commences any proceeding relating to it under any
bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any jurisdiction; or (v)
any such petition or application in (iv) above is filed, or any
such proceeding is commenced, against the Company or a Subsidiary
and either (x) the Company or such Subsidiary by any act indicates
its approval thereof, consents thereto or acquiesces therein or (y)
such petition, application or proceeding is not dismissed within
sixty (60) days;


 




 

2








 






 

(c) unless waived by
the Holder, if the Company fails to observe or perform in any
material respect any of its covenants contained in the Note and
such failure continues for more than thirty (30) days after
delivery of written notice thereof;

 

(d) unless waived by
the Holder, the Company's material breach of any other term or
provision in this Note and such failure continues for more than
thirty (30) days after delivery of written notice thereof;
or

 

(e) the Company's
indebtedness for borrowed money is accelerated as a result of a
default or breach under any agreement for such borrowed money,
including but not limited to loan agreements, or material breach
under any real property lease agreements and material capital
equipment lease agreements, by which the Company is bound or
obligated, which breach is not cured by the Company within the
applicable time periods thereof.

 


Upon
the occurrence of any Event of Default, the Outstanding Balance
under this Note shall become immediately due and payable upon
election of the Holder. Upon the occurrence of any Event of
Default, the Holder may, in addition to declaring all amounts due
hereunder to be immediately due and payable, pursue any available
remedy, whether at law or in equity, including, without limitation,
exercising its rights under this Note. If an Event of Default
occurs, the Company shall pay to the Holder the reasonable
attorneys' fees and disbursement and all other reasonable
out-of-pocket costs incurred by the Holder in order to collect
amounts due and owing under this Note or otherwise to enforce the
Holder's rights and remedies hereunder.

 

23. Amendments in Writing. Any term
of this Note may be amended, modified (including, without
limitation, any extension of the Maturity Date) or waived upon the
written consent of the Company and the Holder. No such waiver or
consent in any one instance shall be construed to be a continuing
waiver or a waiver in any other instance unless it expressly so
provides.

 

24. Waivers. The Company hereby
forever waives presentment, demand, presentment for payment,
protest, notice of protest, notice of dishonor of this Note and all
other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note.

 

25. Governing Law; Jurisdiction;
Venue. This Note, and all matters arising directly and
indirectly herefrom (the "Covered Matters"), shall
be governed in all respects by the laws of the State of Nevada as
such laws are applied to agreements between parties in the State of
Nevada. The Company irrevocably submits to the personal
jurisdiction of the courts of the State of Nevada and the United
States District Court located nearest the Company's principal place
of business for the purpose of any suit, action, proceeding or
judgment relating to or arising out of the Covered Matters. Service
of process on the Company in connection with any such suit, action
or proceeding may be served on the Company anywhere in the world by
the same methods as are specified for the giving of notices under
this Note. The Company irrevocably consents to the jurisdiction of
any such court in any such suit, action or proceeding and to the
laying of venue in such court. The Company irrevocably waives any
objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum.


 




 

3








 






 

26. Notices. All notices and other
communications given or made pursuant to this Note shall be in
writing and shall be deemed effectively given (a) upon personal
delivery to the party to be notified; (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours
of the recipient, and if not so confirmed, then on the next
business day; (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage
prepaid; or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent
to the Holder at the address set forth on the books and records of
the Company or at such other place as may be designated by the
Holder in writing to the Company in accordance with the provisions
of this Section 8, and to the Company at the Company's principal
place of business, or to such e-mail address, facsimile number or
address as subsequently modified by written notice in accordance
with the provisions of this Section 8.

 

27. Successors and Assigns. This
note shall be binding upon the successors or assigns of the Company
and shall inure to the benefit of the successors and permitted
assigns of the Holder.


 


 


 


[SIGNATURE
PAGE FOLLOWS]


 




 

4








 






IN
WITNESS WHEREOF, the Company has executed this Promissory Note as
of the date first above written.


 


	
 

	

RumbleON,
Inc.



a Nevada corporation


 


 


	
 

	

By_/s/
Steven R. Berrard_________________


Name:
Steven R. Berrard


Title:
CFO


 


Address:



4521 Sharon Road, Suite 370


Charlotte,
North Carolina 28211