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  Exhibit 4.1

 

WARRANT TO PURCHASE CLASS B COMMON STOCK

OF

RUMBLEON, INC.

 

ISSUED
ON April 30, 2018

 

VOID
AFTER 5:30 P.M., EASTERN TIME, ON April 30, 2023

 

THIS
WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), AND MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT
COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF
APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREFROM.

 

FOR
VALUE RECEIVED, RUMBLEON, INC., a Nevada corporation (the
“Company”),
hereby agrees to sell upon the terms and conditions hereinafter set
forth, but no later than 5:30 p.m., Eastern Time, on the Expiration
Date (as hereinafter defined) to Hercules Capital, Inc. or its
registered assigns (the “Holder”), under the terms as
hereinafter set forth, the Applicable
Number of fully paid and non-assessable shares of the
Company’s Class B Common Stock, par value $0.001 per share
(the “Warrant
Shares”), at a per share purchase price equal to $5.50
per share (the “Warrant
Price”), pursuant to this warrant (this
“Warrant”). The
term “Applicable
Number” shall mean 81,818 shares, provided that upon
Lender making an Advance pursuant to the Tranche IV , in each case,
as defined in the Loan and Security Agreement, dated as of the date
hereof (as amended, restated, supplemented or otherwise modified
from time to time, the “Loan
Agreement”), by and among the Company, certain other
borrowers party thereto, the several banks and other financial
institutions or entities from time to time parties to this
Agreement and Hercules Capital, Inc., in its capacity as
administrative agent and collateral agent for lenders, the
Applicable Number shall be 109,091. The number of Warrant Shares to
be so issued and the Warrant Price are subject to adjustment in
certain events as hereinafter set forth. The term
“Class B Common Stock” shall mean, when
used herein, unless the context otherwise requires, the stock and
other securities and property at the time receivable upon the
exercise of this Warrant.

 

1. Definitions

 

a. “Act” has the meaning set forth in
the legend above.

 

b. “Aggregate Exercise Price” has the
meaning set forth in Section 10(c) hereof.

 

c. “Applicable Number” has the meaning
set forth in the preamble hereto.

 

d. “Articles” means the
Company’s Articles of Incorporation, as may be amended from
time to time.

 

e. “Business Day” means a day Monday
through Friday on which banks are generally open for business in
New York City.

 

f. “Buy-In” has the meaning set forth
in Section 6 hereof.

 

g. “Class B Common Stock” has the meaning set
forth in the preamble hereto.

 

h. “Common Stock” means the common
stock of the Company, as defined in the Articles, and including the
Class A Common Stock and the Class B Common Stock.

 

i. “Company” has the meaning set forth
in the preamble hereto.

 

j. “Dilutive Issuance” has the meaning
set forth in Section 7(d) hereof.

 

 

 

 

k. “Excluded Securities”
means:

 

(i) shares of Class B
Common Stock, or options to acquire shares of Class B Common Stock,
issued to directors, officers, employees and consultants of the
Company or any subsidiary pursuant to any qualified or
non-qualified stock option plan or agreement, stock purchase plan
or agreement, stock restriction agreement, employee stock ownership
plan, consultant equity compensation plan or arrangement approved
by the Board of Directors of the Company or an authorized committee
thereof, including any repurchase or stock restriction agreement,
or such other options, issuances, arrangements, agreements or plans
intended principally as a means of providing compensation for
employment or services and approved by the Board of Directors of
the Company;

 

(ii) shares
of Class B Common Stock, or warrants or options to purchase Class B
Common Stock, issued in connection with bona fide acquisitions,
mergers or similar transactions, the terms of which are approved by
the Board of Directors of the Company; and

 

(iii) shares
of Class B Common Stock issued upon exercise or conversion of any
options, warrants or convertible notes of the Company set forth on
the capitalization table set forth on Schedule A hereto.

 

l. “Expiration Date” means April 30,
2023.

 

m. “fair market value” has the meaning
set forth in Section 2(a) hereof.

 

n. “Filing Date” has the meaning set
forth in Section 10(a) hereof.

 

o. “Final Prospectus” has the meaning
set forth in Section 10(f) hereof.

 

p. “Fully-Diluted Basis” means, at any
given time and without duplication, the aggregate number of Common
Stock and Preferred Stock (as such terms are defined in the
Articles) and any other shares of the Company outstanding at such
time plus the aggregate number of Common Stock and Preferred Stock
and any other shares of the Company issuable (subject to
readjustment upon the actual issuance thereof) upon the exercise,
conversion or exchange of any option, right, warrant or convertible
or exchangeable security outstanding at such time.

 

q. “Holder” has the meaning set forth
in the preamble hereto.

 

r. “Indemnified Party” has the meaning
set forth in Section 10(f) hereof.

 

s. “Indemnifying Party” has the
meaning set forth in Section 10(f) hereof.

 

t. “Loan Agreement” has the meaning set forth in the
preamble hereto.

 

u. “Net Issuance” has the meaning set
forth in Section 2(a) hereof.

 

v. “New Issuance” means (A) any
issuance or sale by the Company of any class of shares of the
Company (including the issuance or sale of any shares owned or held
by or for the account of the Company) other than Excluded
Securities, (B) any issuance or sale by the Company of any options,
rights or warrants to subscribe for any class of shares of the
Company other than Excluded Securities, or (C) the issuance or sale
of any securities convertible into or exchangeable for any class of
shares of the Company other than Excluded Securities.

 

w. “New Issuance Price” has the
meaning set forth in Section 7(d) hereof.

 

x. “Penalty Period” has the meaning
set forth in Section 10(c) hereof.

 

y. “Purchase Price” means, with
respect to any exercise of this Warrant, an amount equal to the
Warrant Price as of the relevant time multiplied by the number of
shares of Common Stock requested to be exercised under this Warrant
pursuant to such exercise.

 

 

2

 

 

z. “Registrable Securities” means the
Warrant Shares; provided, however, that the Warrant
Shares shall only be treated as Registrable Securities if and only
for so long as they (i) have not been disposed of pursuant to a
Registration Statement declared effective by the SEC, (ii) have not
been sold in a transaction exempt from the registration and
prospectus delivery requirements of the Act so that all transfer
restrictions and restrictive legends with respect thereto are
removed upon the consummation of such sale or (iii) are held by the
Holder or a permitted transferee pursuant to Section
10(i).

 

aa. “Registration Default” has the
meaning set forth in Section 10(c) hereof.

 

bb. “Registration Expenses” means all
expenses incurred by the Company in complying with Section 10
hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees
and expenses 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 the fees of legal counsel for
the Holder).

 

cc. “Registration Period” has the
meaning set forth in Section 10(d) hereof.

 

dd. “Registration Statement” has the
meaning set forth in Section 10(a) hereof.

 

ee. “Selling Expenses” means all
selling commissions applicable to the sale of Registrable
Securities and all fees and expenses of legal counsel for the
Holder.

 

ff. “Trading Day” means a day on which
the New York Stock Exchange is open for trading.

 

gg. “Trading Market” means any of the
following markets or exchanges on which the Class B Common Stock is
listed or quoted for trading on the date in question: the NYSE
American, LLC, The NASDAQ Capital Market, The NASDAQ Global Market,
The NASDAQ Global Select Market, or the New York Stock Exchange (or
any successors to any of the foregoing).

 

hh. “Transfer Notice” has the meaning
set forth in Section 3(b) hereof.

 

ii. “VWAP” means, for any date, the
price determined by the first of the following clauses that
applies: (a) if the Class B Common Stock is then listed or quoted
on a Trading Market, the daily volume weighted average price of the
Class B Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Class B Common Stock is then
listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)), (b) if Class B Common Stock is not then listed or quoted
for trading on a Trading Market, the volume weighted average price
of a share of Class B Common Stock for such date (or the nearest
preceding date) on the OTCQB or OTCQX as applicable, (c) if Class B
Common Stock is not then listed or quoted for trading on the OTCQB
or OTCQX and if prices for Class B Common Stock are then reported
in the “Pink Sheets” published by OTC Markets Group,
Inc. (or a similar organization or agency succeeding to its
functions of reporting prices), the most recent bid price per share
of Class B Common Stock so reported, or (d) in all other cases, the
fair market value of the Class B Common Stock as determined by an
independent appraiser selected in good faith by the Holder and
reasonably acceptable to the Company, the fees and expenses of
which shall be paid by the Company.

 

jj. “Warrant” means this Warrant and
any subsequent Warrant issued in accordance with the terms
hereof.

 

kk. “Warrant Price” has the meaning set forth in the
preamble hereto.

 

ll. “Warrant Register” has the meaning
set forth in Section 9(c) hereof.

 

mm. “Warrant Share Delivery Date” has
the meaning set forth in Section 6 hereof.

 

nn. “Warrant Shares” means has the
meaning set forth in the preamble hereto.

 

 

3

 

 

2. Exercise of
Warrant.

 

a. The Holder or its
assignee may exercise this Warrant according to its terms by
completing the subscription form attached hereto and surrendering
this Warrant to the Company at the address set forth in Section 14,
accompanied by payment in full of the Purchase Price, as specified
in the subscription form, or as otherwise provided in this Warrant,
prior to 5:30 p.m., Eastern Time on the Expiration Date. Payment of
the purchase price may be made (i) in cash or certified check or by
bank draft in lawful money of the United States of America or (ii)
in accordance with the net issuance formula below
(“Net
Issuance”).

 

If the
Holder elects the Net Issuance method of payment, then the Company
shall issue to Holder upon exercise such number of shares of Class
B Common Stock determined in accordance with the following
formula:

 

  X=Y(A-B)

A

 

Where X
= the number of shares of Class B Common Stock to be issued to the
Holder;

 

Y = the
number of shares of Class B Common Stock with respect to which the
Holder is exercising its rights under this Warrant;

 

A = the
fair market value of one (1) share of Class B Common Stock on the
date of exercise; and

 

B = the
Warrant Price.

 

For
purposes of the above calculation, “fair market value” shall
mean:

 

(i) 

if the Class B
Common Stock is listed or traded on the NASDAQ stock market or any
United States securities exchange or quoted on any securities
quotation service operated by NASDAQ (including the OTC Bulletin
Board), the twenty day volume weighted average trading price for
the twenty Trading Days ending on the second Trading Day prior to
the date of exercise; or

 

(ii) 

if at any time the
Class B Common Stock is not listed or traded on any United States
stock exchange or quoted on any securities quotation service
operated by NASDAQ, the fair market value determined in good faith
by the Board of Directors of the Company and approved in good faith
by the Holder. In the event that the Holder does not accept the
valuation determined by the board of directors of the Company, then
the Company and the Holder shall, in good faith, select an
independent valuation firm mutually acceptable to each of them to
conduct a valuation of the price of a Warrant Share. The Holder may
elect, in its sole discretion, to receive the number of shares of
Class B Common Stock issuable to it upon exercise of this Warrant
calculated using the fair market value as determined in good faith
by the Board of Directors of the Company. Upon the determination of
the independent valuation firm, the Company and the Holder will
make adjustments to the issuance of Class B Common Stock based on
the determination of such independent valuation firm. The
determination of such independent valuation firm shall be
conclusive, absent manifest error, as between the Company and the
Holder for purposes herein. The Company shall pay all costs and
expenses associated with the engagement of the independent
valuation firm; provided that a valuation is
not required more than once in any given twelve (12) consecutive
month period. If at any time there will be more than one Holder,
then any determination of the fair market value, made with respect
to a Holder, shall apply to all the Holders, unless any party
proves that a material change in the valuation of the Company has
occurred since the valuation was determined.

 

 

4

 

 

b. This Warrant may be
exercised in whole or in part so long as any exercise in part
hereof would not involve the issuance of fractional shares of
Warrant Shares. If exercised in part, the Company shall deliver to
the Holder a new Warrant, identical in form, in the name of the
Holder, evidencing the right to purchase the number of Warrant
Shares as to which this Warrant has not been exercised, which new
Warrant shall be signed by the Chairman, Chief Executive Officer or
President and the Secretary or Assistant Secretary of the
Company.

 

c. No fractional
shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. The Company shall pay cash in lieu of
fractional shares with respect to the Warrants based upon the fair
market value of such fractional shares of Class B Common Stock
(which, for purposes of this Section 2(c), shall be the closing
price of such shares on the exchange or market on which the Class B
Common Stock is then traded) at the time of exercise of this
Warrant.

 

3. Disposition of Warrant Shares and
Warrant.

 

a. The Holder hereby
acknowledges that (i) this Warrant and any Warrant Shares purchased
pursuant hereto are, as of the date hereof, not registered: (A)
under the Act on the ground that the issuance of this Warrant is
exempt from registration under Section 4(2) of the Act as not
involving any public offering or (B) under any applicable state
securities law because the issuance of this Warrant does not
involve any public offering and (ii) the Company’s reliance
on the Section 4(2) exemption of the Act and under applicable state
securities laws is predicated in part on the representations hereby
made to the Company by the Holder. The Holder represents and
warrants that it is (i) an “accredited investor” within
the meaning of Rule 501(a) of Regulation D under the Securities
Act, (ii) (A) familiar with the business and affairs of the Company
and (B) knowledgeable and experienced in financial and business
matters to the extent that such Holder is capable of evaluating the
merits and risks of an investment in the Warrant and the Warrant
Shares, and (iii) acquiring this Warrant and will acquire the
Warrant Shares for investment for its own account, with no present
intention of dividing his, her or its participation with others or
reselling or otherwise distributing the same such that Holder may
be deemed an “underwriter” as such term is defined
under the Securities Act of 1933, as amended.

 

b. Subject to
compliance with applicable federal and state securities laws and
the immediately following sentence, and if such intended transferee
is not an affiliate of the Holder and the intended transferee
provides a duly executed written confirmation that the
representations and warranties in Section 3(a) of this Warrant are
true and correct as to such intended transferee, this Warrant and
all rights hereunder are transferable, in whole or in part, without
charge to the Holder (except for transfer taxes) upon surrender of
this Warrant properly endorsed. The Holder hereby agrees that it
will not sell or transfer all or any part of this Warrant and/or
Warrant Shares unless and until it shall first have given notice to
the Company describing such sale or transfer and, if requested by
the Company in writing, furnished to the Company either (i) an
opinion, reasonably satisfactory to counsel for the Company, of
counsel (skilled in securities matters, selected by the Holder and
reasonably satisfactory to the Company) to the effect that the
proposed sale or transfer may be made without registration under
the Act and without registration or qualification under any state
law, or (ii) an interpretative letter from the Securities and
Exchange Commission to the effect that no enforcement action will
be recommended if the proposed sale or transfer is made without
registration under the Act. Each taker and holder of this Warrant,
by taking or holding the same, consents and agrees that this
Warrant, when endorsed in blank, shall be deemed negotiable subject
to the transfer restrictions provided for herein, and that the
holder hereof, when this Warrant shall have been so endorsed and
its transfer recorded on the Company’s books, shall be
treated by the Company and all other persons dealing with this
Warrant as the absolute owner hereof for any purpose and as the
person entitled to exercise the rights represented by this Warrant
and, notwithstanding any other provision of this Warrant to the
contrary, shall be the Holder as referred to in this
Warrant.

 

The
proper transfer of this Warrant shall be recorded in the registry
referred to in Section 9(c) upon receipt by the Company of a notice
of transfer in the form attached hereto as Exhibit II (the
“Transfer
Notice”), at its principal offices and the payment to
the Company of all transfer taxes and other governmental charges
imposed on such transfer. Until the Company receives such Transfer
Notice, the Company may treat the registered owner hereof as the
owner for all purposes.

 

 

5

 

 

c. If, at the time of
issuance of the shares issuable upon exercise of this Warrant, no
Registration Statement is in effect with respect to such shares
under applicable provisions of the Act, the Company may at its
election require that the Holder provide the Company with written
reconfirmation of the Holder’s investment intent and that any
stock certificate delivered to the Holder of a surrendered Warrant
shall bear legends reading substantially as follows:

 

“THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THIS CERTIFICATE
THAT REGISTRATION IS NOT REQUIRED UNDER SAID
ACT.”

 

In
addition, so long as the foregoing legend may remain on any stock
certificate delivered to the Holder, the Company may maintain
appropriate “stop transfer” orders with respect to such
certificates and the shares represented thereby on its books and
records and with those to whom it may delegate registrar and
transfer functions.

 

4. Reservation of Shares. The
outstanding shares of capital stock of the Company as of the issue
date of this Warrant is as set forth on Schedule A hereto. The Company
hereby agrees that at all times there shall be reserved for
issuance upon the exercise of this Warrant such number of shares of
its Class B Common Stock as shall be required for issuance upon
exercise of this Warrant and shall at all times have a sufficient
number of authorized shares so as to permit the issuance of the
shares of Class B Common Stock upon exercise of this Warrant. The
Company further agrees that all Warrant Shares represented by this
Warrant will be duly authorized and will, upon issuance and against
payment of the exercise price, be validly issued, fully paid and
non-assessable.

 

5. Exchange, Transfer or Assignment of
Warrant. This Warrant is exchangeable, without expense, at
the option of the Holder, upon presentation and surrender hereof to
the Company or at the office of its stock transfer agent, if any,
for other Warrants of different denominations, entitling the Holder
or Holders thereof to purchase in the aggregate the same number of
shares of Class B Common Stock purchasable hereunder. Upon
surrender of this Warrant to the Company or at the office of its
stock transfer agent, if any, with funds sufficient to pay any
transfer tax, the Company shall, without charge, execute and
deliver a new Warrant in the name of the assignee named in such
instrument of assignment and this Warrant shall promptly be
canceled.

 

6. Delivery of Stock Certificate Upon
Exercise. Within the third day after the Notice of Exercise
is delivered pursuant to this Warrant (the “Warrant Share Delivery Date”) and
payment of the Warrant Price (which payment shall be deemed to have
occurred when the funds are immediately available to the Company),
if applicable, the Company will cause to be issued in the name of
and delivered to the registered Holder hereof or its assigns, or
such Holder’s nominee or nominees, a certificate or
certificates for the full number of shares of Class B Common Stock
of the Company to which such Holder shall be entitled upon exercise
(and in the case of partial exercise, a Warrant of like tenor for
the unexercised portion remaining subject to exercise prior to the
Expiration Date set forth herein). For all corporate purposes, such
certificate or certificates shall be deemed to have been issued and
such Holder or Holder’s designee to be named therein shall be
deemed to have become a holder of record of such shares of Class B
Common Stock as of the date the duly executed exercise form
pursuant to this Warrant, together with the full payment of the
Warrant Price, is received by the Company as aforesaid. No fraction
of a share or scrip certificate for such fraction shall be issued
upon exercise of this Warrant; in lieu thereof, the Company will
pay or cause to be paid to such Holder cash equal to a like
fraction at the prevailing fair market price for such share as
determined in good faith by the Company. If the Company fails for
any reason to deliver to the Holder the Warrant Shares subject to a
Notice of Exercise by the second Trading Day following the Warrant
Share Delivery Date, the Company shall pay to the Holder, in cash,
as liquidated damages and not as a penalty, for each $1,000 of
Warrant Shares subject to such exercise (based on the VWAP of the
Class B Common Stock on the date of the applicable Notice of
Exercise), $10 per Trading Day (increasing to $20 per Trading Day
on the fifth Trading Day after such liquidated damages begin to
accrue) for each Trading Day after the second Trading Day following
such Warrant Share Delivery Date until such Warrant Shares are
delivered or Holder rescinds such exercise. In addition, if the
Company fails to cause its transfer agent to transmit to the Holder
the Warrant Shares pursuant to an exercise on or before the second
Trading Day following the Warrant Share Delivery Date, and if after
such date the Holder is required by its broker to purchase (in an
open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Class B Common Stock
to deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder anticipated receiving upon such exercise (a
“Buy-In”), then
the Company shall (A) pay in cash to the Holder the amount, if any,
by which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Class B Common
Stock so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue
times (2) the price at which the sell order giving rise to such
purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored
(in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Class B Common Stock that
would have been issued had the Company timely complied with its
exercise and delivery obligations hereunder. For example, if the
Holder purchases Class B Common Stock having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted exercise
of shares of Class B Common Stock with an aggregate sale price
giving rise to such purchase obligation of $10,000, under clause
(A) of the immediately preceding sentence the Company shall be
required to pay the Holder $1,000. The Holder shall provide the
Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In and, upon request of the Company, evidence
of the amount of such loss. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver shares of
Class B Common Stock upon exercise of the Warrant as required
pursuant to the terms hereof.

 

 

6

 

 

7. Adjustment of Warrant Price and Number
of Warrant Shares. The number of Warrant Shares purchasable
upon the exercise of this Warrant and the Warrant Price shall be
subject to adjustment as follows:

 

a. Recapitalization, Reclassification and
Succession. If any recapitalization of the Company or
reclassification of its Common Stock or any merger or consolidation
of the Company into or with a corporation or other business entity,
or the sale or transfer of all or substantially all of the
Company’s assets or of any successor corporation’s
assets to any other corporation or business entity (any such
corporation or other business entity being included within the
meaning of the term “successor corporation”) shall be
effected, at any time while this Warrant remains outstanding and
unexpired, then, as a condition of such recapitalization,
reclassification, merger, consolidation, sale or transfer, lawful
and adequate provision shall be made whereby the Holder of this
Warrant thereafter shall have the right to receive upon the
exercise hereof as provided in Section 2 and in lieu of the shares
of Common Stock immediately theretofore issuable upon the exercise
of this Warrant, such shares of capital stock, securities or other
property as may be issued or payable with respect to or in exchange
for a number of outstanding shares of Common Stock equal to the
number of shares of Common Stock immediately theretofore issuable
upon the exercise of this Warrant had such recapitalization,
reclassification, merger, consolidation, sale or transfer not taken
place, and in each such case, the terms of this Warrant shall be
applicable to the shares of stock or other securities or property
receivable upon the exercise of this Warrant after such
consummation.

 

b. Subdivision or Combination of
Shares. If the Company at any time while this Warrant
remains outstanding and unexpired shall subdivide or combine its
Common Stock, the number of Warrant Shares purchasable upon
exercise of this Warrant shall be adjusted in accordance with
Section 7(d)(i).

 

c. Stock Dividends and
Distributions. If the Company at any time while this Warrant
is outstanding and unexpired shall issue or pay the holders of its
Common Stock, or take a record of the holders of its Common Stock
for the purpose of entitling them to receive, a dividend payable
in, or other distribution of, Common Stock, then the Warrant Price
shall be adjusted in accordance with Section 7(d)(ii).

 

d. Anti-Dilution.

 

(i) If, at any time
during the one-year period commencing on the date of issuance of
this Warrant, (A) the Company shall make a New Issuance for no
consideration or for a consideration per share less than the
Warrant Price in effect immediately prior to such New Issuance (a
“Dilutive
Issuance”) or (B) the total consideration paid
(including exercise price of any option, right or warrant to
subscribe for any class of shares of the Company or the conversion
price of any security convertible into or exchangeable for any
class of shares of the Company) (other than an option, right or
warrant that is an Excluded Security) is when issued or is later
adjusted downward to a price that is less than the exercise price
in effect immediately prior to such downward adjustment (such lower
consideration price or adjusted exercise price or conversion price,
the “New Issuance
Price”), then immediately after such Dilutive Issuance
or downward adjustment of such exercise price or conversion price,
the Warrant Price then in effect shall be reduced to an amount
equal to the New Issuance Price. For purposes of this Warrant, if a
part or all of the consideration received by the Company in
connection with a New Issuance consists of property other than
cash, such consideration shall be deemed to have a fair market
value as defined in Section 2(a) above.

 

(ii) If,
at any time after the one-year period commencing on the date of
issuance of this Warrant, the Company makes a Dilutive Issuance,
then, upon such issuance, the Warrant Price shall be reduced to
equal the amount computed using the following formula:

 

A * [(C
+ D)/B]

 

where:

 

A   =   the
Warrant Price in effect immediately prior to the Dilutive
Issuance;

B   =   the
number of shares of Common Stock outstanding immediately after the
New Issuance (calculated on a Fully-Diluted Basis);

 

 

7

 

 

C   =   the
number of shares of Common Stock outstanding immediately prior to
the New Issuance (calculated on a Fully-Diluted Basis);
and

D  =  the
number of shares of Common Stock that would be issuable for the
total consideration to be received for the New Issuance if the
purchaser paid the Warrant Price in effect immediately prior to the
New Issuance.

 

(iii) Upon
each adjustment in the Warrant Price pursuant to this Section 7,
the number of Warrant Shares purchasable hereunder shall be
adjusted, to the nearest whole share, to the product obtained by
multiplying the number of Warrant Shares purchasable immediately
prior to such adjustment by a fraction, (i) the numerator of which
shall be the Warrant Price immediately prior to such adjustment,
and (ii) the denominator of which shall be the Warrant Price
immediately thereafter.

 

e. Certain Shares Excluded. The
number of shares of Class B Common Stock outstanding at any given
time for purposes of the adjustments set forth in this Section 7
shall exclude any shares then directly or indirectly held in the
treasury of the Company.

 

f. No Impairment. The Company will
not, in any way whatsoever, including by amendment of the Articles,
avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder, or impair the economic
interest of the Holder, but will at all times in good faith assist
in the carrying out of all of the provisions hereof and in the
taking of all such actions and making of all such adjustments as
may be necessary or appropriate in order to protect the rights and
economic interests of the Holder against impairment.

 

8. Representations,
Warranties And Covenants of the Company.

 

a. Reservation of Common Stock.
The Warrant Shares have been duly and validly reserved and, when
issued in accordance with the provisions of this Warrant, will be
validly issued, fully paid and non-assessable, and will be free of
any taxes, liens, charges or encumbrances of any nature whatsoever;
provided that the
Common Stock issuable pursuant to this Warrant may be subject to
restrictions on transfer under state and/or federal securities
laws. The Company has made available to the Holder true, correct
and complete copies of its Articles and current bylaws. The
issuance of certificates for shares of Common Stock upon exercise
of this Warrant shall be made without charge to the Holder for any
issuance tax in respect thereof, or other cost incurred by the
Company in connection with such exercise and the related issuance
of shares of Common Stock; provided that the Company shall
not be required to pay any tax that may be payable in respect of
any transfer and the issuance and delivery of any certificate in a
name other than that of the Holder.

 

b. Due Authority. The execution,
delivery and issuance by the Company of this Warrant and the
performance of all obligations of the Company hereunder, including
the issuance to Holder of the Warrant Shares, have been duly
authorized by all necessary corporate action on the part of the
Company. This Warrant constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium, or other laws affecting the enforcement of
creditors’ rights in general, and except that the
enforceability of this Warrant is subject to general principles of
equity.

 

c. Consents and Approvals. No
consent or approval of, giving of notice to, registration with, or
taking of any other action in respect of any state, federal or
other governmental authority or agency is required with respect to
the execution, delivery and performance by the Company of its
obligations under this Warrant, except for the filing of notices
pursuant to Regulation D under the Act, and any filing required by
applicable state securities law and any required filings or
notifications regarding the issuance or listing of additional
shares with NASDAQ.

 

d. Exempt Transaction. Subject to
the accuracy of the Holder’s representations in Section 10,
the issuance of the Class B Common Stock upon exercise of this
Warrant will constitute a transaction exempt from (i) the
registration requirements of Section 5 of the Act and (ii) the
qualification requirements of the applicable state securities
laws.

 

 

8

 

 

e. Compliance with Rule 144. If
the Holder proposes to sell Class B Common Stock issuable upon the
exercise of this Warrant and in compliance with Rule 144, then,
upon Holder’s written request to the Company, the Company
shall furnish to the Holder, within ten days after receipt of such
request, a written statement confirming the Company’s
compliance with the filing requirements of the SEC as set forth in
such Rule, as such Rule may be amended from time to
time.

 

9. Notice To Holders.

 

a. Notice of Record Date. In
case:

 

(i) the Company shall
take a record of the holders of its Common Stock (or other stock or
securities at the time receivable upon the exercise of this
Warrant) for the purpose of entitling them to receive any dividend
(other than a cash dividend payable out of earned surplus of the
Company) or other distribution, or any right to subscribe for or
purchase any shares of stock of any class or any other
securities;

 

(ii) of
any capital reorganization of the Company, any reclassification of
the capital stock of the Company, any consolidation with or merger
of the Company into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another
corporation; or

 

(iii) of
any voluntary dissolution, liquidation or winding-up of the
Company;

 

then,
and in each such case, the Company will mail or cause to be mailed
to the Holder hereof a notice specifying, as the case may be, (A)
the date on which a record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (B) the date
on which such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the
holders of record of Common Stock (or such stock or securities at
the time receivable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other
stock or securities) for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger,
conveyance, dissolution or winding-up. Unless otherwise agreed to
by the parties, such notice shall be mailed at least 10 days prior
to the record date therein specified; provided, however, failure to
provide any such notice shall not affect the validity of such
transaction.

 

b. Notice of Adjustment. Whenever
any adjustment shall be made pursuant to Section 7 hereof, the
Company shall promptly notify the Holder of this Warrant of the
event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated and the Warrant
Price and number of Warrant Shares purchasable upon exercise of
this Warrant after giving effect to such adjustment.

 

c. Warrant Register. The Company
shall maintain a registry showing the name and address of the
registered holder of this Warrant (the “Warrant Register”). The Holder may
change such address by giving written notice of the change to the
Company.

 

10. Registration
Rights

 

a. Filing of Registration
Statement. As soon as reasonably practicable, but in no
event later than 90 days after the issue date of this Warrant (such
date of filing is referred to as the “Filing Date”), the Company shall
file a registration statement covering the resale of the
Registrable Securities on a registration statement (the
“Registration
Statement”) with the SEC and effect the registration,
qualifications or compliances (including, without limitation, the
execution of any required undertaking to file post-effective
amendments, appropriate qualifications or exemptions under
applicable blue sky or other state securities laws and appropriate
compliance with applicable securities laws, requirements or
regulations) as promptly as possible after the filing thereof, but
in any event prior to the date that is 180 days after the issue
date of this Warrant. The Registration Statement will be on Form
S-3; provided that
if Form S-3 is not available for use by the Company on the Filing
Date, then the Registration Statement will be on such form as is
then available.

 

 

9

 

 

b. Expenses. All Registration
Expenses incurred in connection with any registration,
qualification, exemption or compliance pursuant to this Section 10
shall be borne by the Company. All Selling Expenses relating to the
sale of securities registered by or on behalf of the Holder shall
be borne by the Holder.

 

c. Registration Defaults. The
Company further agrees that, in the event that the Registration
Statement (i) has not been filed with the SEC within 90 days after
the issue date of this Warrant, (ii) has not been declared
effective by the SEC within 180 days after the issue date of this
Warrant, or (iii) after the Registration Statement is declared
effective by the SEC, is suspended by the Company or ceases to
remain continuously effective as to all Registrable Securities for
which it is required to be effective, other than, in each case,
within the time period(s) permitted by Section 10(g)(ii) (each such
event referred to in clauses (i), (ii) and (iii), (a
“Registration
Default”)), for any thirty-day period (a
“Penalty
Period”) during which the Registration Default remains
uncured (which initial thirty-day period shall commence on the
fifth Business Day after the date of such Registration Default if
such Registration Default has not been cured by such date), the
Company shall pay to the Holder an amount equal to one percent (1%)
of the aggregate Purchase Price due and payable upon full exercise
of the Warrants (the “Aggregate Exercise Price”) for
each Penalty Period during which the Registration Default remains
uncured; provided,
however, that if
the Holder fails to provide the Company with any information that
is required to be provided in the Registration Statement with
respect to the Holder as set forth herein, then the commencement of
the Penalty Period described above shall be extended until five
Business Days following the date of receipt by the Company of such
required information; provided further, that the amount
payable to the Holder hereunder for any partial Penalty Period
shall be prorated for the number of actual days during such Penalty
Period during which a Registration Default remains uncured; and
provided
further, that in no
event shall the Company be required to pay to the Holder pursuant
to this Section 10(c) an aggregate amount that exceeds 10% of the
Aggregate Exercise Price. The Company shall deliver said cash
payment to the Holder by the fifth Business Day after the end of
such Penalty Period. If the Company fails to pay said cash payment
to the Holder in full by the fifth Business Day after the end of
such Penalty Period, the Company will pay interest thereon at a
rate of 10% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing
daily from the date such liquidated damages are due until such
amounts, plus all such interest thereon, are paid in
full.

 

d. Registration Period Covenants.
In the case of the registration, qualification, exemption or
compliance effected by the Company pursuant to this Warrant, the
Company shall, upon reasonable request, inform the Holder as to the
status of such registration, qualification, exemption and
compliance. At its expense, during the Registration Period, the
Company shall:

 

(i) except for such
times as the Company is permitted hereunder to suspend the use of
the prospectus forming part of the Registration Statement under
Section 10(g)(ii), use its commercially reasonable efforts to keep
such registration, and any qualification, exemption or compliance
under state securities laws that the Company determines to obtain,
continuously effective with respect to the Holder, and to keep such
Registration Statement free of any material misstatements or
omissions, until the earlier of the following: (i) the second
anniversary of the issue date of this Warrant and (ii) the date all
Warrant Shares may be sold under Rule 144 during any 90 day period.
The period of time during which the Company is required hereunder
to keep the Registration Statement effective is referred to herein
as the “Registration
Period;”

 

(ii) advise
the Holders:

 

A. within two Business
Days when the Registration Statement or any amendment thereto has
been filed with the SEC and when the Registration Statement or any
post-effective amendment thereto has become effective;

 

B. within five
Business Days of any request by the SEC for amendments or
supplements to the Registration Statement or the prospectus
included therein or for additional information;

 

C. within five
Business Days of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for such purpose;

 

 

10

 

 

D. within five
Business Days of the receipt by the Company of any notification
with respect to the suspension of the qualification of the
Registrable Securities included therein for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and

 

E. within five
Business Days of the occurrence of any event that requires the
making of any changes in the Registration Statement or the
prospectus so that, as of such date, the statements therein are not
misleading and do not omit to state a material fact required to be
stated therein or necessary to make the statements therein (in the
case of the prospectus, in the light of the circumstances under
which they were made) not misleading;

 

(iii) use
its commercially reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of any Registration Statement as
soon as reasonably practicable;

 

(iv) promptly
deliver to the Holder, without charge, as many copies of the
prospectus included in such Registration Statement and any
amendment or supplement thereto as the Holder may reasonably
request in writing; and the Company consents to the use, consistent
with the provisions hereof, of the prospectus or any amendment or
supplement thereto by the Holder of Registrable Securities in
connection with the offering and sale of the Registrable Securities
covered by the prospectus or any amendment or supplement
thereto;

 

(v) if the Holder so
requests in writing, deliver to the Holder, without charge, (i) one
copy of the following documents, other than those documents
available via EDGAR: (A) its annual report to its stockholders, if
any (which annual report shall contain financial statements audited
in accordance with generally accepted accounting principles in the
United States of America by a firm of certified public accountants
of recognized standing), (B) if not included in substance in its
annual report to stockholders, its annual report on Form 10-K (or
similar form), (C) its definitive proxy statement with respect to
its annual meeting of stockholders, (D) each of its quarterly
reports to its stockholders, and, if not included in substance in
its quarterly reports to stockholders, its quarterly report on Form
10-Q (or similar form), and (E) a copy of the full Registration
Statement (the foregoing, in each case, excluding exhibits); and
(ii) if explicitly requested, all exhibits excluded by the
parenthetical to the immediately preceding clause (E);

 

(vi) prior
to any public offering of Registrable Securities pursuant to any
Registration Statement, promptly take such actions as may be
necessary to register or qualify or obtain an exemption for offer
and sale under the securities or blue sky laws of such United
States jurisdictions as any such Holders reasonably request in
writing, provided that the Company shall not for any such purpose
be required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction, and
do any and all other acts or things reasonably necessary or
advisable to enable the offer and sale in such jurisdictions of the
Registrable Securities covered by such Registration
Statement;

 

(vii) upon
the occurrence of any event contemplated by Section 10(d)(ii)(E)
above, except for such times as the Company is permitted hereunder
to suspend the use of the prospectus forming part of the
Registration Statement, the Company shall use its commercially
reasonable efforts to as soon as reasonably practicable prepare a
post-effective amendment to the Registration Statement or a
supplement to the related prospectus, or file any other required
document so that, as thereafter delivered to purchasers of the
Registrable Securities included therein, the prospectus will not
include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;

 

(viii) otherwise
use its commercially reasonable efforts to comply in all material
respects with all applicable rules and regulations of the SEC that
could affect the sale of the Registrable Securities;

 

(ix) use
its commercially reasonable efforts to cause all Registrable
Securities to be listed on each securities exchange or market, if
any, on which equity securities issued by the Company have been
listed;

 

 

11

 

 

(x) use its
commercially reasonable efforts to take all other steps necessary
to effect the registration of the Registrable Securities
contemplated hereby and to enable the Holders to sell Registrable
Securities under Rule 144;

 

(xi) provide
to the Holder and its representatives, if requested, the
opportunity to conduct a reasonable inquiry of the Company’s
financial and other records during normal business hours and make
available on reasonable prior notice and during normal business
hours its officers, directors and employees for questions regarding
information that the Holder may reasonably request in order to
fulfill any due diligence obligation on its part; and

 

(xii) permit
a single counsel for the Holder to review the Registration
Statement and all amendments and supplements thereto, at least two
Business Days prior to the filing thereof with the
SEC;

 

provided that, in
the case of clauses (xi) and (xii) above, the Company shall not be
required (A) to delay the filing of the Registration Statement or
any amendment or supplement thereto as a result of any ongoing
diligence inquiry by or on behalf of the Holder or to receive any
comments to the Registration Statement or any amendment or
supplement thereto by or on behalf of the Holder if such inquiry or
comments would require or result in a delay in the filing of such
Registration Statement, amendment or supplement, as the case may
be, or (B) to provide, and shall not provide, the Holder or its
representatives with material, non-public information unless the
Holder agrees to receive such information and enters into a written
confidentiality agreement with the Company in a form reasonably
acceptable to the Company.

 

e. Certain Limitations. The Holder
shall have no right to take any action to restrain, enjoin or
otherwise delay any registration pursuant to Section 10 hereof as a
result of any controversy that may arise with respect to the
interpretation or implementation of the Warrants.

 

f. Indemnity. To the extent
permitted by law, the Company shall indemnify the Holder and each
person controlling the Holder within the meaning of Section 15 of
the Act, with respect to which any registration that has been
effected pursuant to this Section 10, against all claims, losses,
damages and liabilities (or action in respect thereof), including
any of the foregoing incurred in settlement of any litigation,
commenced or threatened (subject to Section 10(f)(iii) below),
arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in the Registration
Statement, prospectus, any amendment or supplement thereof, or
other document incident to any such registration, qualification or
compliance or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in light of the
circumstances in which they were made, or any violation by the
Company of any rule or regulation promulgated by the Act applicable
to the Company and relating to any action or inaction required of
the Company in connection with any such registration, qualification
or compliance, and will reimburse the Holder and each person
controlling the Holder, for reasonable legal and other
out-of-pocket expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability
or action as incurred; provided that the Company will
not be liable in any such case to the extent that any untrue
statement or omission or allegation thereof is made in reliance
upon and in conformity with written information furnished to the
Company by or on behalf of the Holder for use in preparation of
such Registration Statement, prospectus, amendment or supplement;
provided
further that the
Company will not be liable in any such case where the claim, loss,
damage or liability arises out of or is related to the failure of
the Holder to comply with the covenants and agreements contained in
this Warrant respecting sales of Registrable Securities, and except
that the foregoing indemnity agreement is subject to the condition
that, insofar as it relates to any such untrue statement or alleged
untrue statement or omission or alleged omission made in the
preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the SEC at the time the Registration
Statement becomes effective or in the amended prospectus filed with
the SEC pursuant to Rule 424(b) or in the prospectus subject to
completion under Rule 434 of the Act, which together meet the
requirements of Section 10(a) of the Act (the “Final Prospectus”), such indemnity
shall not inure to the benefit of the Holder or any such
controlling person, if a copy of the Final Prospectus furnished by
the Company to the Holder for delivery was not furnished to the
person or entity asserting the loss, liability, claim or damage at
or prior to the time such furnishing is required by the Act and the
Final Prospectus would have cured the defect giving rise to such
loss, liability, claim or damage.

 

 

12

 

 

(i) The Holder will
severally, and not jointly, indemnify the Company, each of its
directors and officers, and each person who controls the Company
within the meaning of Section 15 of the Act, against all claims,
losses, damages and liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any
litigation, commenced or threatened (subject to Section 10(f)(iii)
below), arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in the Registration
Statement, prospectus, or any amendment or supplement thereof,
incident to any such registration, or based on any omission (or
alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in light of the circumstances in which they were made,
and will reimburse the Company, such directors and officers, and
each person controlling the Company for reasonable legal and any
other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action as
incurred, in each case to the extent, but only to the extent, that
such untrue statement or omission or allegation thereof is made in
reliance upon and in conformity with written information furnished
to the Company by or on behalf of the Holder for use in preparation
of the Registration Statement, prospectus, amendment or supplement;
provided that the
indemnity shall not apply to the extent that such claim, loss,
damage or liability results from the fact that a current copy of
the prospectus was not made available to the person or entity
asserting the loss, liability, claim or damage at or prior to the
time such furnishing is required by the Act and the Final
Prospectus would have cured the defect giving rise to such loss,
claim, damage or liability. Notwithstanding the foregoing, the
Holder’s aggregate liability pursuant to this subsection (b)
shall be limited to the net amount received by the Holder from the
sale of the Registrable Securities giving rise to such claims,
losses, damages and liabilities (and actions in respect
thereof).

 

(ii) Each
party entitled to indemnification under this Section 10(f) (the
“Indemnified
Party”) shall give notice to the party required to
provide indemnification (the “Indemnifying Party”) promptly
after such Indemnified Party has actual knowledge of any claim as
to which indemnity may be sought, and shall permit the Indemnifying
Party (at its expense) to assume the defense of any such claim or
any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose
approval shall not unreasonably be withheld or delayed), and the
Indemnified Party may participate in such defense at such
Indemnified Party’s expense; provided further that the failure of any
Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this
Warrant, unless such failure is materially prejudicial to the
Indemnifying Party in defending such claim or litigation. An
Indemnifying Party shall not be liable for any settlement of an
action or claim effected without its written consent (which consent
will not be unreasonably withheld or delayed). No Indemnifying
Party, in its defense of any such claim or litigation, shall,
except with the consent (such consent not to be unreasonably
withheld or delayed) of the Indemnified Party consent to entry of
any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation.

 

(iii) If
the indemnification provided for in this Section 10(f) is held by a
court of competent jurisdiction to be unavailable to an Indemnified
Party or is insufficient to hold such Indemnified Party harmless
with respect to any loss, liability, claim, damage or expense
referred to therein, then the Indemnifying Party shall contribute
to the amount paid or payable by such Indemnified Party as a result
of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on
the other in connection with the statements or omissions that
resulted in such loss, liability, claim, damage or expense as well
as any other relevant equitable considerations. The relative fault
of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the
parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the Holder’s aggregate
liability pursuant to this subsection (iv) shall be limited to the
net amount received by the Holder from the sale of Registrable
Securities giving rise to such loss, liability, claim, damage or
expense (or actions in respect thereof) less all other amounts paid
as damages in respect thereto.

 

g. Additional Covenants and Agreements of
the Holder. The Holder agrees that, upon receipt of any
notice from the Company of the happening of any event requiring the
preparation of a supplement or amendment to a prospectus relating
to Registrable Securities so that, as thereafter delivered to the
Holder, such prospectus shall not contain an untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, the Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement and
prospectus contemplated by Section 10(a) until its receipt of
copies of the supplemented or amended prospectus from the Company
and, if so directed by the Company, the Holder shall deliver to the
Company all copies, other than permanent file copies then in the
Holder’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such
notice.

 

(i) The Holder shall
suspend, upon request of the Company, any disposition of
Registrable Securities pursuant to the Registration Statement and
prospectus contemplated by Section 10(a) during no more than 90
calendar days (which need not be consecutive days) during any
12-month period to the extent that the Board of Directors of the
Company determines in good faith that the sale of Registrable
Securities under the Registration Statement would be reasonably
likely to cause a violation of the Act or Exchange
Act.

 

(ii) As
a condition to the inclusion of its Registrable Securities, the
Holder shall furnish to the Company such information regarding the
Holder and the distribution proposed by the Holder as the Company
may reasonably request in writing, including completing a
Registration Statement questionnaire in the form provided by the
Company, or as shall be required in connection with any
registration referred to in this Section 10.

 

(iii) The
Holder hereby covenants with the Company (A) not to make any sale
of the Registrable Securities without effectively causing the
prospectus delivery requirements under the Act to be satisfied, and
(B) if such Registrable Securities are to be sold by any method or
in any transaction other than on a national securities exchange,
Nasdaq or in the over-the-counter market, in privately negotiated
transactions, or in a combination of such methods, to notify the
Company at least five Business Days prior to the date on which the
Holder first offers to sell any such Registrable
Securities.

 

(iv) The
Holder acknowledges and agrees that the Registrable Securities sold
pursuant to the Registration Statement are not transferable on the
books of the Company unless the stock certificate submitted to the
transfer agent evidencing such Registrable Securities is
accompanied by a certificate reasonably satisfactory to the Company
to the effect that (A) the Registrable Securities have been sold in
accordance with such Registration Statement and (B) the requirement
of delivering a current prospectus has been satisfied.

 

(v) The Holder agrees
not to take any action with respect to any distribution deemed to
be made pursuant to such Registration Statement that would
constitute a violation of Regulation M under the Exchange Act or
any other applicable rule, regulation or law.

 

(vi) At
the end of the Registration Period, the Holders shall discontinue
sales of shares pursuant to such Registration Statement upon
receipt of notice from the Company of its intention to remove from
registration the shares covered by such Registration Statement
which remain unsold, and such Holders shall notify the Company of
the number of shares registered which remain unsold immediately
upon receipt of such notice from the Company.

 

h. Additional Covenants and Agreements of
the Company. With a view to making available to the Holder
the benefits of certain rules and regulations of the SEC that at
any time permit the sale of the Registrable Securities to the
public without registration, so long as the Holder still own
Registrable Securities, the Company shall use its commercially
reasonable efforts to:

 

(i) make and keep
public information available, as those terms are understood and
defined in Rule 144, at all times;

 

(ii) file
with the SEC in a timely manner all reports and other documents
required of the Company under the Exchange Act; and

 

(iii) so
long as the Holder owns any Registrable Securities, make available
or furnish to the Holder, upon any reasonable request, a written
statement by the Company as to its compliance with Rule 144 and of
the Exchange Act, a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the
Company as the Holder may reasonably request in availing itself of
any rule or regulation of the SEC allowing the Holder to sell any
such securities without registration.

 

 

13

 

 

i. Assignment of Registration
Rights. The rights to cause the Company to register
Registrable Securities granted to the Holder by the Company under
Section 10(a) may be assigned by the Holder in connection with a
transfer by the Holder to a single transferee of the Warrants and
all Registrable Securities, provided, however, that (i) such transfer
complies with all applicable securities laws and with the terms and
provisions of Section 10 of each of the Warrants; (ii) the Holder
gives prior written notice to the Company; and (iii) such
transferee agrees in writing to comply with the terms and
provisions of each of the Warrants, and has provided the Company
with a completed Registration Statement questionnaire in such form
as is reasonably requested by the Company. Except as specifically
permitted by this Section 10(i), the rights of the Holder with
respect to Registrable Securities as set out herein shall not be
transferable to any other person.

 

j. Waiver of Registration Rights.
The rights of the Holder under any provision of this Section 10 may
be waived (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of
time or indefinitely) or amended by an instrument in writing signed
by the Holders holding not less than a majority of the Registrable
Securities; provided, however, that no consideration
shall be offered or paid to any person to amend or consent to a
waiver or modification of any provision of this Section 10 unless
the same consideration also is offered to all holders of
Registrable Securities.

 

11. Loss, Theft, Destruction or
Mutilation. Upon receipt by the Company of evidence
reasonably satisfactory to it of the ownership and the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss,
theft or destruction, of indemnity reasonably satisfactory to the
Company and, in the case of mutilation, upon surrender and
cancellation thereof, the Company will execute and deliver a new
Warrant of like tenor dated the date hereof.

 

12. Warrant Holder not a
Stockholder. The Holder of this Warrant, in its capacity as
a warrant holder, shall not be entitled by reason of this Warrant
to any rights whatsoever as a stockholder of the
Company.

 

13. [Reserved]

 

14. Notices. Any notice required or
contemplated by this Warrant shall be deemed to have been duly
given if transmitted by registered or certified mail, return
receipt requested, or nationally recognized overnight delivery
service, to the Company at its principal executive offices at 4251
Sharon Road, Suite 370, Charlotte, NC 28211, Attention: Chief
Executive Officer, or to the Holder at the name and address set
forth in the Warrant Register maintained by the
Company.

 

15. Choice of Law. THIS WARRANT IS
ISSUED UNDER AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW.

 

16. Jurisdiction and Venue. The
Company and the Holder hereby agree that any dispute which may
arise between them arising out of or in connection with this
Warrant shall be adjudicated before a court located in Santa Clara
County, California and they hereby submit to the exclusive
jurisdiction of the federal and state courts of the State of
California located in Santa Clara County with respect to any action
or legal proceeding commenced by any party, and irrevocably waive
any objection they now or hereafter may have respecting the venue
of any such action or proceeding brought in such a court or
respecting the fact that such court is an inconvenient forum,
relating to or arising out of this Warrant or any acts or omissions
relating to the sale of the securities hereunder, and consent to
the service of process in the manner set forth in Section 13 of
this Warrant.

 

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

 

14

 

 

 

[SIGNATURE
PAGE TO WARRANT TO PURCHASE STOCK]

 

IN
WITNESS WHEREOF, the undersigned has duly executed this Warrant as
of the date set forth above.

 

 

RUMBLEON,
INC.

 

 

By:
/s/ Steven R.
Berrard

       Name:
Steven R. Berrard

       Title:
Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE A

 

CAPITALIZATION

 

	

Class

	

No. of Authorized Shares

	

No. of Shares Outstanding

	

No. of Shares

Issuable upon

Exercise of any

Options, Warrants

or Convertible

Notes

	

Class A
Common Stock, $0.001 par value

 

	

 1,000,000

 

	

 1,000,000

 

	

 -

 

	

Class B
Common Stock, $0.001 par value

 

	

99,000,000

 

	

11,928,541

 

	

218,250

 

	

Preferred
Stock, $0.001 par value

 

	

  10,000,000

 

	

0

 

	

  -

 

 

 

There
are 741,000 restricted stock units outstanding, which have been
granted under the Company’s Stock Incentive
Plan.

 

 

 

 

 

EXHIBIT I

 

FORM OF
EXERCISE

 

(to be
executed by the registered holder hereof)

 

1.            

In lieu of
exercising the attached Warrant for cash, certified check or bank
draft, the undersigned hereby elects to effect the Net Issuance
provision of Section 2 of this Warrant and receive ______________
(leave blank if you choose Alternative No.2 below) shares of Class
B Common Stock, par value $0.001 per share (“Class B Common
Stock”), of RumbleON, Inc. issuable pursuant to the terms of
the Warrant. (Initial here if the undersigned elects this
alternative) _____

 

2.            

The undersigned
hereby exercises the right to purchase _____________ (leave blank
if you choose Alternative No.1 above) shares of Class B Common
Stock of RumbleON, Inc., evidenced by the within this Warrant
Certificate for an Warrant Price equal to [$________] per share and
herewith makes payment of the Purchase Price in full of
$_________.

 

3.            

Kindly issue
certificates for shares of Class B Common Stock (and for the
unexercised balance of the Warrants evidenced by the within
Warrant, if any) in accordance with the instructions given
below.

 

Dated:
________________, 20__.

 

 

 

 

Instructions
for registration of stock:

 

 

 

Name
(Please Print)

 

Social Security or
other identifying
Number:                      

 

 

Address:                                                                 

City/State
and Zip Code

 

 

Instructions
for registration of certificate representing

the
unexercised balance of Warrants (if any)

 

 

 

 

Name
(Please Print)

Social Security or
other identifying
Number:                        

 

 

Address:                                                                 

City,
State and Zip Code

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT II

 

TRANSFER
NOTICE

 

(To
transfer or assign the foregoing Warrant execute this form and
supply required information. Do not use this form to purchase
shares.)

 

FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby transferred and assigned to

 

 

(Please
Print)

 

whose address
is                                                                                                            

 

 

Dated:                                                                                      

 

Holder’s
Signature:                                                                                      

 

Holder’s
Address:                                             

 

 

 

 

Signature
Guaranteed:                                                                                                            

 

NOTE:
The signature to this Transfer Notice must correspond with the name
as it appears on the face of the Warrant, without alteration or
enlargement or any change whatever. Officers of corporations and
those acting in a fiduciary or other representative capacity should
file proper evidence of authority to assign the foregoing
Warrant.Blueprint

  Exhibit 10.1

 

LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT is made and dated
as of April 30, 2018 and is entered into by and among 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”),
the several banks and other financial institutions or entities from
time to time parties to this Agreement (collectively,
“Lender”)
and HERCULES CAPITAL, INC., a Maryland corporation, in its capacity
as administrative agent and collateral agent for Lender (in such
capacity, “Agent”).

 

RECITALS

 

A. Borrowers have requested Lender to make available
to Borrowers one or
more growth capital term loans in an aggregate principal amount of
up to $20,000,000; and

 

B. Lender
is willing to make such growth capital term loans on the terms and
conditions set forth in this Agreement.

 

AGREEMENT

 

NOW,
THEREFORE, Borrowers, Agent and Lender agree as
follows:

 

SECTION 1. DEFINITIONS
AND RULES OF CONSTRUCTION

 

1.1              Unless
otherwise defined herein, the following capitalized terms shall
have the following meanings:

 

“Account Control
Agreement(s)” means any
agreement entered into by and among Agent, Borrowers and a third
party bank or other institution (including a Securities
Intermediary) in which any Borrower maintains a Deposit Account or
an account holding Investment Property and which perfects
Agent’s first priority security interest in the subject
account or accounts.

 

“ACH
Authorization” means the
ACH Debit Authorization Agreement in substantially the form
of Exhibit
H.

 

“Adjusted
EBITDA” means for any
period of determination, for Parent and each of its Subsidiaries,
on a consolidated basis, an amount equal to Net Income for such
period plus (a) the following to the extent deducted in calculating
Net Income for such period: (i) Interest Expense for such period,
(ii) federal, state, local and foreign income taxes for such
period, (iii) depreciation and amortization expense for such
period, (iv) all non-cash expenses related to stock based
compensation for such period, (v) extraordinary or non-recurring
items reducing Net Income for such period in an amount not to
exceed 10% of Adjusted EBITDA to the extent in excess of $0 or as
otherwise approved by Agent, and (vi) all non-cash items, other than described
in clauses (a)(i) through
(v) above, deducted to arrive
at Net Income for such period, and minus (b) the following the
extent included in calculating such Net Income for such period: (i)
interest income for such period, (ii) federal, state, local and
foreign income tax credits for such period, (iii) extraordinary or
non-recurring income or gains for such period, (iv) capitalized
software development costs for such period and (v) all non-cash
items, other than described in clause (b)(i) through
(iv) above, increasing Net
Income for such period.

 

“Advance”
means a Growth Capital Term Loan Advance.

 

“Advance
Date” means the funding
date of any Advance.

 

 

 

 

“Advance
Request” means a request
for an Advance submitted by Borrower Representative to Agent in
substantially the form of Exhibit A.

 

“Affiliate”
means (a) any Person that directly or indirectly controls, is
controlled by, or is under common control with the Person in
question, (b) any Person directly or indirectly owning, controlling
or holding with power to vote ten percent (10%) or more of the
outstanding voting securities of another Person, (c) any Person ten
percent (10%) or more of whose outstanding voting securities are
directly or indirectly owned, controlled or held by another Person
with power to vote such securities, or (d) any Person related by
blood or marriage to any Person described in subsection (a), (b) or
(c) of this defined term. As
used in the definition of “Affiliate,” the term
“control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting
securities, by contract or otherwise.

 

“Agent”
has the meaning given to it in the preamble to this
Agreement.

 

“Agreement”
means this Loan and Security Agreement, as amended, restated,
supplemented or otherwise modified from time to
time.

 

“Amortization
Date” means (i) with
respect to any Advance pursuant to Tranche I or Tranche II,
December 1, 2018, provided however, if (A) as of December 1, 2018,
or (B) as of any Amortization Date, as extended from time to time,
then in effect, or (C) as of the last day of any month
after
the Amortization Date then in effect
has passed, but prior to September 30, 2019, Borrowers have
satisfied the Interest Only Extension Condition, then the
Amortization Date may be extended to be three (3) months after the
later of (x) the Amortization Date in effect prior to such
extension, and (y) if Borrower has commenced principal payments,
the first day of the fourth month after the date the Interest Only
Extension Condition is satisfied, provided that in no event shall
the Amortization Date with respect to any Advance pursuant to
Tranche I or Tranche II be extended to be later than November 1,
2019, (ii) with respect to any Advance pursuant to Tranche III,
February 1, 2021, and (iii) with respect to any Advance pursuant to
Tranche IV, as agreed among Borrowers and
Agent.

 

“Anti-Corruption
Laws” shall mean all
laws, rules, and regulations of any jurisdiction applicable to any
Borrower or any of its Affiliates from time to time concerning or
relating to bribery or corruption, including without limitation the
United States Foreign Corrupt Practices Act of 1977, as amended,
the UK Bribery Act 2010 and other similar legislation in any other
jurisdictions.

 

“Anti-Terrorism
Laws” means any laws,
rules, regulations or orders relating to terrorism or money
laundering, including without limitation Executive Order No. 13224
(effective September 24, 2001), the USA PATRIOT Act, the laws
comprising or implementing the Bank Secrecy Act, and the laws
administered by OFAC.

 

“Assignee”
has the meaning given to it in Section
11.13.

 

“Blocked
Person” means any Person:
(a) listed in the annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224, (b) a Person owned or
controlled by, or acting for or on behalf of, any Person that is
listed in the annex to, or is otherwise subject to the provisions
of, Executive Order No. 13224, (c) a Person with which any Lender
is prohibited from dealing or otherwise engaging in any transaction
by any Anti-Terrorism Law, (d) a Person that commits, threatens or
conspires to commit or supports “terrorism” as defined
in Executive Order No. 13224, or (e) a Person that is named a
“specially designated national” or “blocked
person” on the most current list published by OFAC or other
similar list.

 

“Board”
means, with respect to any Person that is a corporation, its board
of directors, with respect to any Person that is a limited
liability company, its board of managers, board of members or
similar governing body, and with respect to any other Person that
is a legal entity, such Person’s governing body in accordance
with its Organizational Documents.

 

 

2

 

 

“Borrower
Products” means all
products, software, service offerings, technical data or technology
currently being designed, manufactured or sold by a Borrower or
which a Borrower intends to sell, license, or distribute in the
future including any products or service offerings under
development, collectively, together with all products, software,
service offerings, technical data or technology that have been
sold, licensed or distributed by a Borrower since each of its
formation.

 

“Borrower
Representative” means
Parent.

 

 

“Budget”
means a budget for Parent and its Subsidiaries, on a consolidated
basis, acceptable to Agent, provided that in any event a budget
reflecting Revenue, Adjusted EBITDA, if applicable, and Gross
Profit, if applicable, of no less than the amounts set forth in the
projections delivered to Agent as of the Closing Date will be
acceptable to Agent, provided further that, if a Borrower
consummates a Permitted Acquisition and such Permitted Acquisition
is reasonably likely to affect the projections previously
delivered, as reasonably determined by Agent based on its review of
the proposed transaction, at all times thereafter, a budget will be
acceptable to Agent if reflecting Revenue, Adjusted EBITDA, if
applicable, and Gross Profit, if applicable, of no less than the
amounts set forth in the updated projections reasonably approved by
Agent in connection with such transaction.

 

“Business
Day” means any day other
than Saturday, Sunday and any other day on which banking
institutions in the State of California are closed for
business.

 

“Cash”
means all cash, cash equivalents and liquid
funds.

 

“Change in
Control” means (i) any
consolidation or merger (or similar transaction or series of
related transactions) of Parent, (ii) sale or exchange of
outstanding shares (or similar transaction or series of related
transactions) of Parent in which holders of outstanding shares
immediately before consummation of such transaction or series of
related transactions (or such holders’ Affiliates) do not,
immediately after consummation of such transaction or series of
related transactions, retain shares representing more than fifty
percent (50%) of the voting power of the surviving entity of such
transaction or series of related transactions (or the parent of
such surviving entity if such surviving entity is wholly owned by
such parent), in each case without regard to whether Parent is the
surviving entity, or (iii) any transaction or series of related
transactions, resulting in a Borrower (other than Parent) no longer
being a direct or indirect wholly-owned Subsidiary of Parent,
provided that the following shall not constitute or cause on their
own a “Change in Control”: (x) any transfers to any
trust or otherwise for estate planning purposes and (y) sales
on a public exchange or market in one or more transactions
(regardless of whether related) except for such sales resulting in
a single “person” or “group” (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), other
than Marshall Chesrown, becoming, or obtaining rights (whether by
means of warrants, options or otherwise) to become, the
“beneficial owner” (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act) of more than fifty percent (50%) of
the voting power for the election of directors of
Parent.

 

“Charter”
means, with respect to any Person, such Person’s formation
documents, as in effect from time to time.

 

“Claims”
has the meaning given to it in Section
11.10.

 

“Closing
Date” means the date of
this Agreement.

 

“Collateral”
means the property described in Section
3.

 

“Compliance
Certificate” means a
certificate in the form attached hereto as Exhibit
F

 

“Confidential
Information” has the
meaning given to it in Section
11.12.

 

 

3

 

 

“Contingent
Obligation” means, as
applied to any Person, any direct or indirect liability of that
Person with respect to (i) any guarantee, contingent or otherwise,
of any Indebtedness, lease, letter of credit or other obligation of
another, including any such obligation directly or indirectly
guaranteed, endorsed, co-made or discounted or sold with recourse
by that Person, or in respect of which that Person is otherwise
directly or indirectly liable; (ii) any obligations with respect to
undrawn letters of credit, company credit cards or merchant
services issued for the account of that Person; and (iii) all net
mark-to-market obligations arising under any interest rate,
currency or commodity swap agreement, interest rate cap agreement,
interest rate collar agreement, or other similar agreement or
arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices;
provided, however, that the term “Contingent
Obligation” shall not include endorsements for collection or
deposit in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the
stated or determined amount of the primary obligation in respect of
which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in
respect thereof as determined by such Person in good faith;
provided, however, that such amount shall not in any event exceed
the maximum amount of the obligations under the guarantee or other
support arrangement nor, in the case of obligations described
in clause (iii)
above, exceed the amount of the
obligation after all netting agreements.

 

“Copyright
License” means any
written agreement granting any right to use any Copyright or
Copyright registration, now owned or hereafter acquired by a
Borrower or in which a Borrower now holds or hereafter acquires any
interest.

 

“Copyrights”
means all copyrights, whether registered or unregistered, held
pursuant to the laws of the United States of America, any State
thereof, or of any other country.

 

“Deposit
Accounts” means any
“deposit accounts,” as such term is defined in the UCC,
and includes any checking account, savings account, or certificate
of deposit.

 

“Domestic
Subsidiary” means any
Subsidiary that is not a Foreign Subsidiary.

 

“Due Diligence
Fee” means $20,000, which
fee has been paid to Lender prior to the Closing Date, and shall be
deemed fully earned on such date regardless of the early
termination of this Agreement.

 

“Eligible Foreign
Subsidiary” means any
Foreign Subsidiary whose execution of a Joinder Agreement could not
result in a material adverse tax consequence to
Borrowers.

 

“Equity
Interests” means, with
respect to any Person, the capital stock, partnership or limited
liability company interest, or other equity securities or equity
ownership interests of such Person.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated
thereunder.

 

“Event of
Default” has the meaning
given to it in Section
9.

 

“Exchange
Act” means the Securities
Exchange Act of 1934, as amended.

 

“Excluded
Taxes” means any of the
following Taxes imposed on or with respect to a Recipient or
required to be withheld or deducted from a payment to a Recipient,
(a) Taxes imposed on or measured by net income (however
denominated), franchise Taxes, and branch profits Taxes, in each
case, (i) imposed as a result of such Recipient being
organized under the laws of, or having its principal office or, in
the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision
thereof) or (ii) that are Other Connection Taxes, (b) in
the case of a Lender, U.S. federal withholding Taxes
imposed on amounts payable to or for the account of such Lender
with respect to an applicable interest in an Advance or a
commitment to make Advances pursuant to a law in effect on the date
on which (i) such Lender acquires such interest in the Loan or
commitment to make Advances or (ii) such Lender changes its
lending office, except in each case to the extent that, amounts
with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender became a
party hereto or to such Lender immediately before it changed its
lending office, (c) Taxes attributable to such
Recipient’s failure to comply with Section 2.9
and (d) any withholding Taxes
imposed under FATCA, provided that
following an Event of Default, subsections (b) and (d) shall not be
considered “Excluded Taxes” to the extent Lender (or
any successor or assign of Lender) assigns its interests in the
Loan or any Financing Document following such Event of
Default.

 

 

4

 

 

“FATCA”
means sections 1471 through 1474 of the Code, as of the
date of this Agreement (or any amended or successor version that is
substantively comparable and not materially more onerous to comply
with), any current or future regulations or official
interpretations thereof, any intergovernmental agreement or foreign
legislation (including official administrative rules or practices)
implemented to give effect to any intergovernmental agreements
entered into thereunder and any agreements entered into pursuant to
section 1471(b) of the Code.

 

“Facility
Charge” means (i) at the
Closing Date, $150,000, in respect of Tranche I, Tranche II and
Tranche III, and (ii) 1.0% of the principal amount of any Advance
pursuant to Tranche IV.

 

“Financial
Statements” has the
meaning given to it in Section
7.1.

 

“Foreign
Subsidiary” means any
Subsidiary other than a Subsidiary organized under the laws of any
state within the United States of America.

 

“GAAP”
means generally accepted accounting principles in the United States
of America, as in effect from time to time, provided that to the
extent any change in GAAP affect the determination of financial
covenant compliance, milestones or other limitations or
requirements under this Agreement, upon written notice by Borrower
or Agent, the parties hereto agree to negotiate in good faith with
respect to an amendment to the terms of this Agreement to adjust
for such change, provided further that until such amendment is so
agreed, all calculations with respect to financial covenant
compliance, milestones or other limitations or requirements under
this Agreement shall be made in accordance with GAAP as in effect
prior to such change in GAAP.

 

“Gross
Margin” means, for any
period, the ratio, expressed as a percentage, of (a) an amount
equal to (i) Revenue for such period, less (ii) costs of Revenue
for such period to (b) Revenue for such period, determined in
accordance with GAAP and consistently with past
practices.

 

“Gross
Profit” means, for any
period, Revenue, for such period, minus costs of goods sold, for
such period, determined in accordance with GAAP and consistently
with past practices.

 

“Growth Capital Term
Commitment” means as to
any Lender, the obligation of such Lender, if any, to make a Growth
Capital Term Loan Advance to Borrowers in a principal amount not to
exceed the amount set forth under the heading “Growth Capital
Term Commitment” opposite such Lender’s name on
Schedule
1.1.

 

“Growth Capital Term
Loan Advance” means an
Advance pursuant to Section
2.1(a)

 

“Indebtedness”
means indebtedness of any kind, including (a) all indebtedness for
borrowed money or the deferred purchase price of property or
services (excluding trade credit entered into in the ordinary
course of business due within ninety (90) days), including
reimbursement and other obligations with respect to surety bonds
and letters of credit, (b) all obligations evidenced by notes,
bonds, debentures or similar instruments, (c) all capital lease
obligations, and (d) all Contingent Obligations; provided, however,
Indebtedness shall not include obligations to make payment on the
Equity Interests of the Parent.

 

“Intellectual
Property” means all of
each Borrower’s Copyrights, Trademarks, Patents, Licenses,
trade secrets and inventions; mask works; each Borrower’s
applications therefor and reissues, extensions, or renewals
thereof; and each Borrower’s goodwill associated with any of
the foregoing, together with each Borrower’s rights to sue
for past, present and future infringement of Intellectual Property
and the goodwill associated therewith.

 

“Interest
Expense” is, for any
period of determination, for Parent and each of its Subsidiaries on
a consolidated basis, an amount equal to the sum of all interest
charges (including imputed interest charges with respect to
capitalized lease obligations and all amortization of debt discount
and expense) of such Person for such period.

 

 

5

 

 

“Interest Only
Extension Condition”
shall mean satisfaction of each of the following events: (a) no
default or Event of Default shall have occurred and be continuing;
and (b) either (i) Borrower Representative shall have provided
evidence reasonably satisfactory to Agent that Parent, on a
consolidated basis, shall have achieved Gross Profit and Adjusted
EBITDA for the most recent fiscal quarter then ended in an amount
not less than 80% of the projected Gross Profit and Adjusted EBITDA
for such fiscal quarter, as set forth in the Budget, or (ii)
Borrower Representative shall have provided evidence reasonably
satisfactory to Agent that (A) Parent, on a consolidated basis,
shall have achieved Gross Profit and Adjusted EBITDA for the most
recent fiscal quarter then ended in an amount not less than 75% of
the projected Gross Profit and Adjusted EBITDA for such fiscal
quarter, as set forth in the Budget, and
(B) Parent shall have received net
cash proceeds from the issuance of its Equity Interest (not
including any proceeds from the conversion of indebtedness) of at
least $5,000,000 during the period commencing on the first day of
such fiscal quarter and ending on the Amortization Date as then in
effect.

 

“Inventory Financing
Agreement” means that
certain Inventory Financing and Security Agreement, by and among
Inventory Financing Lenders and RMBL Missouri, dated February 16,
2018, as it may be amended in compliance with the Inventory
Financing Intercreditor Agreement and similar agreements entered
into with any Inventory Financing Lender.

 

“Inventory Financing
Intercreditor Agreement”
means an intercreditor agreement by and among any Inventory
Financing Lender, Agent and Borrowers in form and substance
satisfactory to Agent in Agent’s reasonable discretion (it
being understood that the Inventory Financing Intercreditor
Agreement dated of even date with this Agreement shall be deemed
satisfactory in form and substance), pursuant to which the Liens
securing Indebtedness of any Borrower pursuant to any Inventory
Financing Agreement shall be subordinated to Agent’s Lien
except that the Lien granted to such Inventory Financing Lender may
be prior to Agent’s Lien with respect to the following
Collateral: (i) Inventory financed pursuant to the applicable
Inventory Financing Agreement, (ii) Permitted Inventory Financing
Cash Collateral, and (iii) cash proceeds from the sale of such
financed Inventory until the earlier of payment to Inventory
Financing Lender of the advance associated with such financed
Inventory and the date that is 30 days after the sale of such
financed Inventory, or, if a default or event of default has
occurred of which Agent has been duly notified, all cash proceeds
from the sale of Inventory constituting financed Inventory as of
the date the default or event of default occurred (or if Inventory
Financing Lender notifies Agent of the default or event of default
more than 30 days after the occurrence of the default or event of
default, all cash proceeds from Inventory constituting financed
Inventory as of the date that is 30 days prior to the date notice
of the default or event of default is duly given to Agent),
provided further, that if an Advance pursuant to Tranche III has
been made, Agent agrees that it will negotiate in good faith with
respect to an Inventory Financing Intercreditor Agreement pursuant
to which an Inventory Financing Lender may have a first priority
Lien (prior to Agent’s Lien) on all Inventory of the
applicable Borrower and certain cash proceeds thereof, as approved
by Agent in its sole discretion, subject to Borrowers maintenance
of a minimum cash balance of at least $2,000,000 in Deposit
Accounts and accounts in which Investment Property is maintained,
in each case, subject to an Account Control Agreement in favor of
Agent, if the amount of total Indebtedness pursuant to inventory
financing arrangements exceeds 70% of total value of the aggregate
book value of Inventory of Borrowers, on a consolidated basis (such
minimum cash requirement to be set forth in an amendment to this
Agreement, if so requested by Agent).

 

“Inventory Financing
Lenders” means Ally Bank
and Ally Financial Inc., collectively and each of their assigns or
successors in interest, and any additional or replacement lenders
providing inventory financing to any Borrower other than Parent,
provided that such lender shall be domiciled in the United States
and shall be in the business of extending credit of such type in
the ordinary course of business.

 

“Investment”
means any beneficial ownership (including stock, partnership or
limited liability company interests) of or in any Person, or any
loan, advance or capital contribution to any Person or the
acquisition of any asset of another Person.

 

“Joinder
Agreements” means for
each Qualified Subsidiary, a completed and executed Joinder
Agreement in substantially the form attached hereto as
Exhibit
G.

 

“Lender”
has the meaning given to it in the preamble to this
Agreement.

 

 

6

 

 

“License”
means any Copyright License, Patent License, Trademark License or
other license of rights or interests.

 

“Lien”
means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, levy, lien
or charge of any kind, whether voluntarily incurred or arising by
operation of law or otherwise, against any property, any
conditional sale or other title retention agreement, and any lease
in the nature of a security interest.

 

“Loan”
means the Advances made under this Agreement.

 

“Loan
Documents” means this
Agreement, the Notes (if any), the ACH Authorization, the Account
Control Agreements, the Joinder Agreements, all UCC Financing
Statements, the Warrant, and any other documents executed in
connection with the Secured Obligations or the transactions
contemplated hereby, as the same may from time to time be amended,
modified, supplemented or restated.

 

“Material Adverse
Effect” means a material
adverse effect upon: (i) the business, operations, properties,
assets or financial condition of Borrowers and each of its
Subsidiaries taken as a whole; or (ii) the ability of
Borrowers to perform or pay the Secured Obligations in accordance
with the terms of the Loan Documents, or the ability of Agent or
Lender to enforce any of its material rights or remedies with
respect to the Secured Obligations; or (iii) the Collateral or
Agent’s Liens on the Collateral or the priority of such
Liens.

 

“Maximum Growth Capital
Term Loan Amount” means
$20,000,000.

 

“Maximum
Rate” shall have the
meaning assigned to such term in Section
2.2.

 

“Net
Income” is, for any
period of determination, for Parent and its Subsidiaries on a
consolidated basis, the net income of Parent and its Subsidiaries
determined in accordance with GAAP for such
period.

 

“NextGen
Pro” has the meaning
assigned to it in the preamble to this
Agreement.

 

“Non-Disclosure
Agreement” means that
certain Non-Disclosure Agreement/Confidentiality Agreement by and
between Borrower Representative and Agent dated as of August 17,
2017.

 

“Note”
means the Term Note.

 

“OFAC”
is the U.S. Department of Treasury Office of Foreign Assets
Control.

 

“OFAC
Lists” are, collectively,
the Specially Designated Nationals and Blocked Persons List
maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed.
Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or
other restricted Persons maintained pursuant to any of the rules
and regulations of OFAC or pursuant to any other applicable
Executive Orders.

 

“Organizational
Documents” means with
respect to any Person, such Person’s formation documents, and
(a) if such Person is a corporation, its bylaws, (b) if such Person
is a limited liability company, its limited liability company
agreement (or similar agreement), and (c) if such Person is a
partnership, its partnership agreement (or similar agreement), each
of the foregoing with all current amendments or modifications
thereto.

 

“Other Connection
Taxes” means, with
respect to any Recipient, Taxes imposed as a result of a present or
former connection between such Recipient and the jurisdiction
imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed
its obligations under, received payments under, received or
perfected a security interest under, engaged in any other
transaction pursuant to or enforced any Loan Document, or sold or
assigned an interest in any Loan or Loan
Document).

 

 

7

 

 

“Parent”
has the meaning assigned to it in the preamble to this
Agreement.

 

“Patent
License” means any
written agreement granting any right with respect to any invention
on which a Patent is in existence or a Patent application is
pending, in which agreement a Borrower now holds or hereafter
acquires any interest.

 

“Patents”
means all letters patent of, or rights corresponding thereto, in
the United States of America or in any other country, all
registrations and recordings thereof, and all applications for
letters patent of, or rights corresponding thereto, in the United
States of America or any other country. No Patent of the Borrowers
on the date of this Agreement shall be deemed to be necessary or
material to the Borrowers’ business.

 

 

“Performance Milestone
I” means (a) either (i)
Borrower Representative shall have provided evidence reasonably
satisfactory to Agent that Parent, on a consolidated basis, shall
have achieved Gross Profit and Adjusted EBITDA for each of the
fiscal quarters ending June 30, 2018 and
September 30, 2018 in an amount not
less than 80% of the projected Gross Profit and Adjusted EBITDA for
each such quarter as set forth in the Budget, or (ii) Borrower
Representative shall have provided evidence reasonably satisfactory
to Agent that (A) Parent, on a consolidated basis, shall have
achieved Gross Profit and Adjusted EBITDA for the fiscal quarter
ending June 30, 2018 or the fiscal quarter ending September 30, 2018 in an
amount not less than 75% of the projected Gross Profit and Adjusted
EBITDA for such quarter as set forth in the Budget, and (B) Parent
shall have received net cash proceeds from the issuance of its
Equity Interests (not including any proceeds from the conversion of
indebtedness) of at least $5,000,000 not later than December 31,
2018; and (b) as of the date such evidence is provided, no Event of
Default shall have occurred and be continuing.

 

“Performance Milestone
II” means Borrower
Representative shall have provided evidence reasonably satisfactory
to Agent that Parent, on a consolidated basis, shall have achieved:
(i) Adjusted EBITDA for a fiscal quarter ending on or prior to
December 31, 2018 of at least $1.00 for such quarterly period, and
shall have demonstrated, to Lender’s reasonable satisfaction,
projections for continued positive Adjusted EBITDA during
subsequent periods; and (ii) $35,000,000 or more in Revenue
for at least one fiscal quarter ending on or prior to December 31,
2018 with associated Gross Margin for such fiscal quarter of not
less than 13.0%; and as of the date such evidence is provided, no
Event of Default shall have occurred and be
continuing.

 

“Permitted
Acquisition” means any
acquisition (including by way of merger) by a Borrower of all or
substantially all of the assets of another Person, or of a division
or line of business of another Person, or capital stock of another
Person, in each case located entirely within the United States of
America, which is conducted in accordance with the following
requirements:

 

(a) such
acquisition is of a business or Person engaged in a line of
business related to that of the Parent or its
Subsidiaries;

 

(b) if
such acquisition is structured as a stock acquisition, then the
Person so acquired shall either (i) become a wholly-owned
Subsidiary of a Borrower or of a Subsidiary and such Borrower shall
comply, or cause such Subsidiary to comply, with
Section 7.13
hereof or (ii) such Person shall be
merged with and into a Borrower (with such Borrower being the
surviving entity);

 

(c) if
such acquisition is structured as an acquisition of assets, such
assets shall be acquired by a Borrower, and shall be free and clear
of Liens other than Permitted Liens;

 

(d) both
immediately before and after such acquisition no default or Event
of Default shall have occurred and be continuing;

 

(e) Borrowers
have provided Agent with any term sheet or letter of intent for any
such acquisition together with all documents to be entered into in
connection therewith and all exhibits and schedules thereto
together with pro forma combined financial statements and updated
pro forma combined projections;

 

 

8

 

 

(f) Borrowers
have provided Agent with written confirmation, supported by
reasonably detailed calculations, that

 

(i) To
the extent Borrowers are not then subject to Section 7.21,
the acquired Person, business line or
assets did not have pro forma Adjusted EBITDA of less than $1.00 during the
consecutive twelve (12) month period most recently concluded prior
to the date of the proposed acquisition;

 

(ii) to
the extent then applicable, based on pro forma combined financial
statements and updated pro forma combined projections, Borrowers
would have been in compliance with the financial covenants set
forth in Section
7.21, as of the end of the
preceding fiscal quarter ended immediately prior to the
consummation of the proposed acquisition, and is projected to be in
compliance with such financial covenants at the end of each of the
following four fiscal quarter periods following the consummation of
such proposed acquisition; and

 

(iii) after
giving effect to the proposed transaction, Borrowers shall maintain
Cash in an aggregate amount of at least (A) $5,000,000, if the
proposed acquisition is consummated prior to any Advance pursuant
to Tranche III, and (B) $10,000,000, if the proposed acquisition is
consummated after the Advance pursuant to Tranche III is
made;

 

(g) the
consideration payable in respect of such acquisition (including
deferred or contingent consideration) shall not exceed (A)
$5,000,000 per fiscal year, if the proposed acquisition is
consummated prior to any Advance pursuant to Tranche III, and (B)
$10,000,000 per fiscal year, if the proposed acquisition is
consummated after the Advance pursuant to Tranche III is made,
provided that purchase consideration funded substantially
contemporaneously with (and in any event prior to) the consummation
of such acquisition from the sale and issuance of Parent’s
Equity Interests in a transaction not resulting in a Change in
Control shall be disregarded in determining compliance with
this clause
(g);

 

(h) any
Indebtedness owing by a Borrower to the seller of assets or Equity
Interests to a Borrower in connection with the consummation of such
acquisition is subordinated to the Secured Obligations on terms and
conditions reasonably acceptable to Agent; and

 

(i) Agent
has determined, based upon review of the foregoing documents and
financial statements, that such transaction is not reasonably
expected to materially and adversely affect Borrower’s
ability to repay the Secured Obligations when due, Agent’s
security interest in the Collateral or Agent’s rights and
remedies pursuant to the Loan Documents or pursuant to applicable
law.

 

“Permitted
Indebtedness”
means:

 

(a) Indebtedness
of a Borrower in favor of Lender or Agent arising under this
Agreement or any other Loan Document;

 

(b) Indebtedness
of up to $200,000 outstanding at any time secured by a Lien
described in clause (f)
of the defined term “Permitted
Liens”, provided in the case of acquired Equipment such
Indebtedness does not exceed the cost of the Equipment financed
with such Indebtedness;

 

(c) Indebtedness
to trade creditors incurred in the ordinary course of business,
including Indebtedness incurred in the ordinary course of business
with company credit cards;

 

(d) Indebtedness
that also constitutes a Permitted Investment;

 

 

9

 

 

(e) Subordinated
Indebtedness;

 

(f) reimbursement
obligations in connection with letters of credit that are secured
by Cash and issued on behalf of a Borrower or a Subsidiary in an
amount not to exceed $250,000 at any time outstanding, and
reimbursement obligations in connection with letters of credit
serving as a lease deposit;

 

(g) intercompany
Indebtedness as long as each of the Subsidiary obligor and the
Subsidiary obligee under such Indebtedness is a Qualified
Subsidiary that has executed a Joinder Agreement;

 

(h) Indebtedness
pursuant to a Qualified Inventory Financing;

 

(i) Indebtedness
of any Person whose assets or Equity Interests are acquired by a
Borrower or any of its Subsidiaries in a Permitted Acquisition
provided, that the aggregate amount of such Indebtedness
outstanding at any time does not exceed $100,000 and was not
incurred in connection with, or in contemplation of, such Permitted
Acquisition;

 

(j) Indebtedness
consisting of deferred consideration payable in connection with the
consummation of a Permitted Acquisition, provided that such
Indebtedness is subordinated to the Secured Obligations on terms
and conditions reasonably acceptable to Agent;

 

(k) Indebtedness
owed to any Person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or
liability insurance, pursuant to reimbursement or indemnification
obligations to such Person, in each case incurred in the ordinary
course of business; and

 

(l) other
Indebtedness, including Indebtedness covered by, but in excess of
the amounts permitted under clauses (b), (f) and (i) above, at any
time outstanding in an amount not to exceed $750,000, (which amount
shall be reduced by the aggregate amount of Indebtedness described
in clauses (b), (f) and
(i) above, in each case up to
the amount permitted thereunder, that is outstanding as of the date
of determination).

 

“Permitted Inventory
Financing Cash Collateral” means cash collateral required to be
provided pursuant to any Inventory Financing Agreement, provided
that (a) the aggregate amount of such cash collateral shall not in
any event exceed the greater of (i) $250,000 and (ii) 10.0% of the
approved credit line pursuant to such Qualified Inventory
Financing, and (b) at any time, no additional cash collateral shall
be provided if doing so would result in an Event of Default or
could reasonably be expected to result in an Event of
Default.

 

“Permitted
Investment”
means:

 

(a) (i)
marketable direct obligations issued or unconditionally guaranteed
by the United States of America or any agency or any State thereof
maturing within one year from the date of acquisition thereof
currently having a rating of at least A-2 or P-2 from either
Standard & Poor’s Corporation or Moody’s Investors
Services, (ii) commercial paper maturing no more than one year from
the date of creation thereof and currently having a rating of at
least A-2 or P-2 from either Standard & Poor’s
Corporation or Moody’s Investors Services, (iii) certificates
of deposit issued by any bank with assets of at least $500,000,000
maturing no more than one year from the date of investment therein,
and (iv) money market accounts;

 

(b) all
repurchases of stock from former employees, directors, or
consultants of Borrower under the terms of applicable repurchase
agreements at the original issuance price of such securities in an
aggregate amount not to exceed $100,000 in any fiscal year,
provided that no Event of Default has occurred and is continuing or
could exist after giving effect to the repurchases;

 

 

10

 

 

(c) Investments
accepted in connection with Permitted Transfers;

 

(d) Investments
(including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in
settlement of delinquent obligations of, and other disputes with,
customers or suppliers arising in the ordinary course of a
Borrower’s business;

 

(e) Investments
consisting of (i) notes receivable of, or prepaid royalties
and other credit extensions, to customers and suppliers who are not
Affiliates, in the ordinary course of business, provided that
this clause (e)
shall not apply to Investments of any
Borrower in any Subsidiary and (ii) prepaid insurance premiums
and prepaid rent to carriers and landlords, respectively, that are
not Affiliates, in the ordinary course of
business;

 

(f) Investments
consisting of loans not involving the net transfer on a
substantially contemporaneous basis of cash proceeds to employees,
officers or directors relating to the purchase of capital stock of
Parent pursuant to employee stock purchase plans or other similar
agreements approved by Parent’s Board;

 

(g) Investments
consisting of travel and relocation advances in the ordinary course
of business;

 

(h) Investments
of any Borrower in any other Borrower, Investments of Parent in any
Borrower and Investments in newly-formed Domestic Subsidiaries,
provided each such newly-formed Domestic Subsidiary has entered
into a Joinder Agreement in accordance with Section 7.13
prior to or simultaneously with such
newly-formed Domestic Subsidiary making an
Investment;

 

(i) Investments
in Foreign Subsidiaries approved in advance in writing by
Agent;

 

(j) joint
ventures or strategic alliances in the ordinary course of
Borrowers’ business consisting of the nonexclusive licensing
of technology, the development of technology or the providing of
technical support, provided that cash Investments (if any) by any
Borrower do not exceed $100,000 in the aggregate in any fiscal
year;

 

(k) Permitted
Acquisitions; and

 

(l) additional
Investments, including Investments covered by, but in excess of the
amounts permitted under, clauses (b) and (j) above, that do not
exceed $750,000 during the term of this Agreement (less the amount
of Investments described in clauses (b) and
(j) above made, in each case,
up to the amount permitted thereunder, from the Closing Date
through the date of determination).

 

“Permitted
Liens” means any and all
of the following:

 

(a) Liens
in favor of Agent or Lender;

 

(b) Liens
for taxes, fees, assessments or other governmental charges or
levies, either not delinquent or being contested in good faith by
appropriate proceedings; provided, that Borrowers maintain adequate
reserves therefor in accordance with GAAP;

 

(c) Liens
securing claims or demands of materialmen, artisans, mechanics,
carriers, warehousemen, landlords and other like Persons arising in
the ordinary course of Borrowers’ business and imposed
without action of such parties; provided, that the payment thereof
is not yet delinquent, subject to any grace period, by more than
fifteen (15) days or payment is disputed by Borrowers in good
faith, subject to reserves with respect to such obligation is in
accordance with GAAP;

 

 

11

 

 

(d) Liens
arising from judgments, decrees or attachments in circumstances
which do not constitute an Event of Default hereunder;

 

(e) the
following deposits, to the extent made in the ordinary course of
business: deposits under worker’s compensation, unemployment
insurance, social security and other similar laws, or to secure the
performance of bids, tenders or contracts (other than for the
repayment of borrowed money) or to secure indemnity, performance or
other similar bonds for the performance of bids, tenders or
contracts (other than for the repayment of borrowed money) or to
secure statutory obligations (other than Liens arising under ERISA
or environmental Liens) or surety or appeal bonds, or to secure
indemnity, performance or other similar bonds;

 

(f) Liens
on Equipment or software or other intellectual property
constituting purchase money Liens and Liens in connection with
capital leases securing Indebtedness in an amount not in excess of
the amount set forth in clause (b)
(or clause (l)
if applicable) of “Permitted
Indebtedness”;

 

(g) Liens
incurred in connection with Subordinated Indebtedness;

 

(h) leasehold
interests in leases or subleases and licenses granted in the
ordinary course of business and not interfering in any material
respect with the business of the licensor;

 

(i) Liens
in favor of customs and revenue authorities arising as a matter of
law to secure payment of custom duties that are promptly paid on or
before the date they become due;

 

(j) Liens
on insurance proceeds securing the payment of financed insurance
premiums that are promptly paid on or before the date they become
due (provided that such Liens extend only to such insurance
proceeds and not to any other property or assets);

 

(k) statutory
and common law rights of set-off and other similar rights as to
deposits of cash and securities in favor of banks, other depository
institutions and brokerage firms;

 

(l) easements,
zoning restrictions, rights-of-way and similar encumbrances on real
property imposed by law or arising in the ordinary course of
business so long as they do not materially impair the value or
marketability of the related property as it is then being
used;

 

(m) (i)
Liens on Cash securing obligations permitted under
clause
(f) of the definition of
Permitted Indebtedness and (ii) security deposits in connection
with real property leases, the combination of (i) and (ii) in an
aggregate amount not to exceed $250,000 at any
time;

 

(n) Liens
securing Indebtedness described in clause (i)
of the defined term “Permitted
Indebtedness”, provided that such Liens shall be limited to
specific financed assets; and

 

(o) Liens
securing Indebtedness pursuant to a Qualified Inventory Financing,
provided that such Liens are subject to the Inventory Financing
Intercreditor Agreement and that any cash collateral subject to a
Lien in favor of Inventory Financing Lenders shall not exceed the
amount of the Permitted Inventory Financing Cash
Collateral.

 

“Permitted
Transfers”
means:

 

(a) sales
or leases of Inventory in the ordinary course of
business;

 

 

12

 

 

(b) non-exclusive
licenses and similar arrangements for the use of Intellectual
Property in the ordinary course of business and licenses that could
not result in a legal transfer of title of the licensed property
but that may be exclusive in respects other than territory and that
may be exclusive as to territory only as to discreet geographical
areas outside of the United States of America in the ordinary
course of business;

 

(c) dispositions
of worn-out, obsolete or surplus Inventory and Equipment in the
ordinary course of business;

 

(d) transfers
among Borrowers; and

 

(e) other
transfers of assets having a fair market value of not more than
$100,000 in the aggregate in any fiscal year.

 

“Person”
means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, other entity
or government.

 

“Prepayment
Charge” shall have the
meaning assigned to such term in Section 2.4.

 

“Qualified Inventory
Financing” means
Indebtedness owing to Inventory Financing Lenders pursuant to an
Inventory Financing Agreement, provided that (i) any Inventory
Financing Lender shall have entered into and continue to be subject
to the Inventory Financing Intercreditor Agreement with respect to
any Inventory Financing Agreement to which it is a party, (ii) the
aggregate outstanding amount of the aggregate amount of such
Indebtedness at any time outstanding shall not exceed an amount
equal (x) 85% of the aggregate book value of all Inventory of
Borrowers, on consolidated basis less (y) the aggregate amount of
cash collateral maintained by such Inventory Financing Lenders,
(iii) the advance rates shall not deviate materially from the
advance rate structure pursuant to the inventory financing
arrangements as in effect on the Closing Date, and (iv) the
interest rate and applicable fees shall not be higher and the cash
collateral or deposit required shall not be a higher percentage of
the approved credit limit, in each case, relative to the inventory
financing arrangements as in effect on the Closing
Date.

 

“Qualified
Subsidiary” means any
direct or indirect Domestic Subsidiary or Eligible Foreign
Subsidiary.

 

“Receivables”
means (i) all of each Borrower’s Accounts, Instruments,
Documents, Chattel Paper, Supporting Obligations, letters of
credit, proceeds of any letter of credit, and Letter of Credit
Rights, and (ii) all customer lists, software, and business records
related thereto.

 

“Recipient”
means (a)  Agent, or (b)  Lender, as
applicable.

 

“Required
Lenders” means at any
time, the holders of more than 50% of the sum of the aggregate
unpaid principal amount of the Growth Capital Term Loan Advances
then outstanding.

 

“Revenue”
means revenue of Parent, determined on a consolidated basis, in
accordance with GAAP.

 

“RMBL
Missouri” has the meaning
assigned to it in the preamble to this
Agreement.

 

“RMBL
Texas” has the meaning
assigned to it in the preamble to this
Agreement.

 

“Sanctioned
Country” shall mean, at
any time, a country or territory which is the subject or target of
any Sanctions.

 

 

13

 

 

“Sanctioned
Person” shall mean, at
any time, (a) any Person listed in any Sanctions-related list of
designated Persons maintained by the Office of Foreign Assets
Control of the U.S. Department of the Treasury or the U.S.
Department of State, or by the United Nations Security Council, the
European Union or any EU member state, (b) any Person operating,
organized or resident in a Sanctioned Country or (c) any Person
controlled by any such Person.

 

“Sanctions”
shall mean economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by (a) the U.S.
government, including those administered by the Office of Foreign
Assets Control of the U.S. Department of the Treasury or the U.S.
Department of State, or (b) the United Nations Security Council,
the European Union or Her Majesty’s Treasury of the United
Kingdom.

 

“Secured
Obligations” means
Borrowers’ obligations under this Agreement and any Loan
Document (other than the Warrant), including any obligation to pay
any amount now owing or later arising.

 

“Shares”
means one hundred percent (100%) of the issued and outstanding
capital stock, membership units or other securities owned or held
of record by each Borrower in any of its Subsidiary, provided that
with respect to any Foreign Subsidiary other than a Qualified
Subsidiary or any Foreign Subsidiary that is a Borrower hereunder
or guarantor with respect to the Secured Obligations, from time to
time, “Shares” shall be limited to 65% of the shares of
capital stock entitled to vote.

 

“Subordinated
Indebtedness” means
Indebtedness (other than Qualified Inventory Financing)
subordinated to the Secured Obligations in amounts and on terms and
conditions satisfactory to Agent in its sole discretion and subject
to a subordination agreement in form and substance satisfactory to
Agent in its sole discretion.

 

“Subsidiary”
means an entity, whether corporate, partnership, limited liability
company, joint venture or otherwise, in which a Borrower owns or
controls 50% or more of the outstanding voting
securities.

 

“Taxes”
shall have the meaning assigned to such term in Section
2.9.

 

“Term Loan Interest
Rate” means, for any day
a per annum rate of interest equal to the greater of either (i) the
prime rate as reported in The Wall Street Journal plus 5.75%, and
(ii) 10.25%.

 

“Term Loan Maturity
Date” means May 1, 2021,
provided that if Borrower achieves the Performance Milestone II,
the Term Loan Maturity Date shall be November 1,
2021.

 

“Term
Note” means a promissory
note in substantially the form of Exhibit
B.

 

“Trademark
License” means any
written agreement granting any right to use any Trademark or
Trademark registration, now owned or hereafter acquired by a
Borrower or in which a Borrower now holds or hereafter acquires any
interest.

 

“Trademarks”
means all trademarks (registered, common law or otherwise) and any
applications in connection therewith, including registrations,
recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United
States of America, any State thereof or any other country or any
political subdivision thereof.

 

“Tranche
I” has the meaning set
forth in Section
2.1(a).

 

“Tranche
II” has the meaning set
forth in Section
2.1(a).

 

“Tranche
III” has the meaning set
forth in Section
2.1(a).

 

 

14

 

 

“Tranche
IV” has the meaning set
forth in Section
2.1(a).

 

“UCC” means the Uniform Commercial Code as the
same is, from time to time, in effect in the State of California;
provided, that in the event that, by reason of mandatory provisions
of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent’s Lien on any Collateral is
governed by the Uniform Commercial Code as the same is, from time
to time, in effect in a jurisdiction other than the State of
California, then the term “UCC” shall mean the Uniform
Commercial Code as in effect, from time to time, in such other
jurisdiction solely for purposes of the provisions thereof relating
to such attachment, perfection, priority or remedies and for
purposes of definitions related to such
provisions.

 

“Warrant”
means any warrant entered into in connection with the Loan, as may
be amended, restated or modified from time to
time.

 

Unless
otherwise specified, all references in this Agreement or any Annex
or Schedule hereto to a “Section,”
“subsection,” “Exhibit,”
“Annex,” or “Schedule” shall refer to the
corresponding Section, subsection, Exhibit, Annex, or Schedule in
or to this Agreement. Unless otherwise specifically provided
herein, any accounting term used in this Agreement or the other
Loan Documents shall have the meaning customarily given such term
in accordance with GAAP, and all financial computations hereunder
shall be computed in accordance with GAAP, consistently applied.
Unless otherwise defined herein or in the other Loan Documents,
terms that are used herein or in the other Loan Documents and
defined in the UCC shall have the meanings given to them in the
UCC.

 

SECTION 2. THE
LOAN

 

2.1              Growth
Capital Term Loan Advances.

 

(a) Growth
Capital Term Commitment. Subject to the terms and conditions of
this Agreement, Lender will severally (and not jointly) make in an
amount not to exceed its respective Growth Capital Term Commitment,
and Borrowers agree to draw, a Growth Capital Term Loan Advance of
$5,000,000 on the Closing Date (“Tranche
I”). During the period
commencing on Borrower’s achievement of Performance Milestone
I and ending December 31, 2018, Lender will severally (and not
jointly) make in an amount not to exceed its respective Growth
Capital Term Commitment, and Borrowers agree to draw, a Growth
Capital Term Loan Advance of $2,500,000 (“Tranche
II”). During the period
commencing upon Borrowers’ achievement of Performance
Milestone II and ending March 31, 2019, Borrower Representative may
request an additional Growth Capital Term Loan Advances in an
amount of $7,500,000 (“Tranche
III”). Upon Borrower
Representative’s request and approval by Lender’s
investment committee, in its sole discretion, Borrower
Representative may request additional Growth Capital Term Loan
Advances in an aggregate amount $5,000,000
(“Tranche
IV”). The aggregate
outstanding Growth Capital Term Loan Advances shall not exceed the
Maximum Growth Capital Term Loan Amount.

 

(b) Advance
Request. To obtain a Growth Capital Term Loan Advance, Borrower
shall complete, sign and deliver an Advance Request at least three
(3) Business Days before the Advance Date, other than the Growth
Capital Term Loan Advance to be made on the Closing Date, which
shall be at least one (1) Business Day before the Advance Date, to
Agent. Lender shall fund each Growth Capital Term Loan Advance in
the manner requested by the Advance Request provided that each of
the conditions precedent to such Growth Capital Term Loan Advance
is satisfied as of the requested Advance Date.

 

(c) Interest.
The principal balance of each Growth Capital Term Loan Advance
shall bear interest thereon from such Advance Date at the Term Loan
Interest Rate based on a year consisting of 360 days, with interest
computed daily based on the actual number of days elapsed. The Term
Loan Interest Rate will float and change on the day the prime rate
changes from time to time.

 

 

 

15

 

 

(d) Payment.
Borrowers will pay interest on each Growth Capital Term Loan
Advance on the first Business Day of each month, beginning the
month after the Advance Date continuing until (but not including)
the Amortization Date. Borrowers shall repay the aggregate
principal balance of the Growth Capital Term Loan Advances that is
outstanding on the day immediately preceding the Amortization Date,
in equal monthly installments of principal and interest (mortgage
style) beginning on the Amortization Date and continuing on the
first Business Day of each month thereafter until the Secured
Obligations (other than inchoate indemnity obligations) are repaid,
provided that if the Term Loan Interest Rate is adjusted in
accordance with its terms, or
the Amortization Date or the Term Loan Maturity Date is extended,
the amount of each subsequent monthly installment shall be
recalculated, and provided further, that if, with respect to
Advances pursuant to Tranche I or Tranche II, Borrowers achieve the
Interest Only Extension Condition after principal payments have
commenced in accordance with the Amortization Date previously in
effect, then commencing on the first Business Day of the following
month and each month thereafter until the Amortization Date, as
extended, Borrower shall make payments of interest only, and on the
Amortization Date, as extended, shall resume payment of equal
monthly installments of principal and interest (as recalculated
based on the extended Amortization Date), as set forth above. The
entire principal balance of the Growth Capital Term Loan Advances
and all accrued but unpaid interest hereunder, shall be due and
payable on the Term Loan Maturity Date. Borrowers shall make all
payments under this Agreement without setoff, recoupment or
deduction and regardless of any counterclaim or defense. Lender
will initiate debit entries to the applicable Borrower’s
account as authorized on the ACH Authorization (i) on each payment
date of all periodic obligations payable to Lender under each
Growth Capital Term Loan Advance and (ii) out-of-pocket legal fees
and costs incurred by Agent or Lender in connection with
Section
11.11 of this Agreement;
provided that, with respect to clause (i)
above, in the event that Lender or
Agent informs Borrower Representative that Lender will not initiate
a debit entry to such Borrower’s account for a certain amount
of the periodic obligations due on a specific payment date,
Borrowers shall pay to Lender such amount of periodic obligations
in full in immediately available funds on such payment date;
provided, further, that, with respect to clause (i)
above, if Lender or Agent informs
Borrower Representative that Lender will not initiate a debit entry
as described above later than the date that is three (3) Business
Days prior to such payment date, Borrowers shall pay to Lender such
amount of periodic obligations in full in immediately available
funds on the date that is three (3) Business Days after the date on
which Lender or Agent notifies Borrower Representative thereof;
provided, further, that, with respect to clause (ii)
above, in the event that Lender or
Agent informs Borrower Representative that Lender will not initiate
a debit entry to a Borrower’s account for specified
out-of-pocket legal fees and costs incurred by Agent or Lender,
Borrowers shall pay to Lender such amount in full in immediately
available funds within three (3) Business Days.

 

2.2 Maximum
Interest. Notwithstanding any provision in this Agreement or any
other Loan Document, it is the parties’ intent not to
contract for, charge or receive interest at a rate that is greater
than the maximum rate permissible by law that a court of competent
jurisdiction shall deem applicable hereto (which under the laws of
the State of California shall be deemed to be the laws relating to
permissible rates of interest on commercial loans) (the
“Maximum
Rate”). If a court of
competent jurisdiction shall finally determine that Borrowers have
actually paid to Lender an amount of interest in excess of the
amount that would have been payable if all of the Secured
Obligations had at all times borne interest at the Maximum Rate,
then such excess interest actually paid by Borrowers shall be
applied as follows: first, to the payment of the Secured
Obligations consisting of the outstanding principal; second, after
all principal is repaid, to the payment of Lender’s accrued
interest, costs, expenses, professional fees and any other Secured
Obligations; and third, after all Secured Obligations are repaid,
the excess (if any) shall be refunded to
Borrowers.

 

2.3 Default
Interest. In the event any payment is not paid on the scheduled
payment date (other than due to failure to pay due solely to an
administrative or operational error of Agent or Lender or the
applicable Borrower’s bank if Borrowers had the funds to make
the payment when due and make the payment within three (3) Business
Days following Borrowers’ knowledge of such failure to pay),
an amount equal to five percent (5%) of the past due amount shall
be payable on demand. In addition, upon the occurrence and during
the continuation of an Event of Default hereunder, all Secured
Obligations, including principal, interest and, to the extent
demand for payment has been made, professional fees, shall bear
interest at a rate per annum equal to the rate set forth in
Section
2.1(c), plus five percent (5%)
per annum. In the event any interest is not paid when due
hereunder, delinquent interest shall be added to principal monthly
and shall bear interest on interest, compounded at the rate set
forth in Section 2.1(c)
or  Section
2.4, as
applicable.

 

 

16

 

 

2.4 Prepayment.
At its option, upon at least seven (7) Business Days prior written
notice to Agent, Borrowers may prepay all, but not less than all,
of the outstanding Advances by paying the entire principal balance,
all accrued and unpaid interest thereon, together with
the applicable prepayment charge equal
to the following percentage of the Advance amount being prepaid:
with respect to amounts prepaid on or prior to the one year
anniversary of the Closing Date, 3.0%; after the one year
anniversary of the Closing Date, through the two year anniversary
of the Closing Date, 2.0%; and after the two year anniversary of
the Closing Date through the date that is forty-five (45) days
prior to the then current Term Loan Maturity Date, 1.0% (each, a
“Prepayment
Charge”), provided that
if the Secured Obligations are prepaid from the proceeds of the
issuance of Indebtedness, Borrowers shall afford Agent the
opportunity to provide a term sheet to refinance the Secured
Obligations (but no Borrower shall be required to enter into a
refinancing transaction with Agent or any Lender even if on
substantially similar terms as the proposed issuance). Borrowers
agree that the Prepayment Charge is a reasonable calculation of
Lender’s lost profits in view of the difficulties and
impracticality of determining actual damages resulting from an
early repayment of the Advances. Borrowers shall prepay the
outstanding amount of all principal and accrued interest through
the prepayment date and the Prepayment Charge upon the occurrence
of a Change in Control.

 

2.5 End
of Term Charge. On the earliest to occur of (i) the Term Loan
Maturity Date, (ii) the date that Borrowers prepay the outstanding
Secured Obligations (other than any inchoate indemnity obligations
and any other obligations which, by their terms, are to survive the
termination of this Agreement) in full, or (iii) the date that the
Secured Obligations otherwise become due and payable, Borrowers
shall pay Lender a charge of 4.55% of the Growth Capital Term
Commitment pursuant to Tranche I and Tranche II, 2.95% of
the Growth Capital Term Commitment pursuant to Tranche III,
and 2.35% of any principal amount paid or prepaid in respect of
Tranche IV. Notwithstanding the required payment date of such
charge, it shall be deemed earned by Lender as of the Closing Date
with regard to Tranche I, Tranche II and Tranche III, and on the
applicable Advance Date with regards to Tranche IV.

 

2.6 Due
Diligence Fee. The Due Diligence Fee has been paid by Borrowers
prior to the Closing Date.

 

2.7 Notes.
If so requested by Lender by written notice to Borrower
Representative, then Borrowers shall execute and deliver to Lender
(and/or, if applicable and if so specified in such notice, to any
Person who is an assignee of Lender pursuant to Section
11.13) (promptly after Borrower
Representative’s receipt of such notice) a Note or Notes to
evidence Lender’s Loans.

 

2.8 Pro
Rata Treatment; Application of Payments. Each payment (including
prepayment) on account of any fee and any reduction of the Growth
Capital Term Loan Advances shall be made pro rata according to the
Growth Capital Term Commitments of the relevant Lender. Lender has
the exclusive right to determine the order and manner in which all
payments then due and payable with respect to the Secured
Obligations may be applied. No Borrower shall have a right to
specify the order or the accounts to which Lender shall allocate or
apply any payments made by a Borrower to Lender or otherwise
received by Lender under this Agreement when any such allocation or
application is not expressly specified elsewhere in this
Agreement.

 

2.9 Withholding.
Payments received by Agent or Lender from any Borrower under any
Loan Document will be made free and clear of and without deduction
for any taxes, levies, deductions, withholdings, assessments, fees
or other charges imposed by any governmental authority
(“Taxes”)
other than Excluded Taxes. Specifically, however, if at any time
any governmental authority, applicable law, regulation or
international agreement requires any Borrower to make any
withholding or deduction from any such payment or other sum payable
hereunder to Agent or Lender, authority other than Excluded Taxes
such payment or other sum payable hereunder shall be increased to
the extent necessary to ensure that, after the making of such
required withholding or deduction, Agent or Lender, as applicable
receives a net sum equal to the sum which it would have received
had no withholding or deduction been required, and the applicable
Borrower shall pay the full amount withheld or deducted to the
relevant governmental authority. The applicable Borrower will, upon
request, furnish Agent with proof reasonably satisfactory to Agent
indicating that such Borrower has made such withholding payment.
The agreements and obligations of Borrowers contained in
this Section 2.9
shall survive the termination of this
Agreement. Agent and Lender will use commercially
reasonable efforts to cooperate with Borrowers to minimize any withholding
taxes to the maximum extent permitted by applicable law, including
by providing a properly completed and duly executed
Form W-9 or applicable Form
W-8, provided such
cooperation does not subject Agent or Lender to any unreimbursed
cost or expense and would not otherwise be materially
disadvantageous to Lender or Agent.

 

 

17

 

 

SECTION 3. SECURITY
INTEREST

 

3.1              As
security for the prompt and complete payment when due (whether on
the payment dates or otherwise) of all the Secured Obligations,
each Borrower grants to Agent a security interest in all of
Borrower’s right, title,
and interest in, to and under all of Borrower’s personal
property and other assets including without limitation the
following (except as set forth herein) whether now
owned or hereafter acquired (collectively, the “Collateral”):
(a) Receivables; (b) Equipment; (c) Fixtures; (d) General
Intangibles; (e) Inventory; (f) Investment Property; (g) Deposit
Accounts; (h) Cash; (i) Goods; and all other tangible and
intangible personal property of Borrower whether now or hereafter
owned or existing, leased, consigned by or to, or acquired by,
Borrower and wherever located, and any of Borrowers’ property
in the possession or under the control of Agent; and, to the extent
not otherwise included, all Proceeds of each of the foregoing and
all accessions to, substitutions and replacements for, and rents,
profits and products of each of the foregoing.

 

3.2 Notwithstanding
the broad grant of the security interest set forth in
Section
3.1, above, to the extent
excluded from the collateral pursuant to every Qualified Inventory
Financing, the Collateral shall not include (a) more than 65% of
the presently existing and hereafter arising issued and outstanding
shares of capital stock owned by a Borrower of any Foreign
Subsidiary (other than an Eligible Foreign Subsidiary) which shares
entitle the holder thereof to vote for directors or any other
matter, and (b) nonassignable licenses or contracts, which by their
terms or applicable law require the consent of the licensor thereof
or another party (but only to the extent such prohibition on
transfer is enforceable under applicable law, including, without
limitation, Sections 9406, 9407 and 9408 of the UCC), provided
further, that upon the lapse of such prohibition or such consent
being provided with respect to any license or contract, such
license or contract shall automatically be included in the
Collateral.

 

3.3 Pledge
of Shares. Each Borrower hereby pledges, assigns and grants to
Agent a security interest in the Shares, together with all proceeds
and substitutions thereof, all cash, stock and other moneys and
property paid thereon, all rights to subscribe for securities
declared or granted in connection therewith, and all other cash and
noncash proceeds of the foregoing, as security for the performance
of the Secured Obligations. Borrowers represent and warrant that as
of the Closing Date, none of the Shares are evidenced by
certificates. To the extent required by the terms and conditions
governing the Shares, the applicable Borrower shall cause the books
of each entity whose Shares are pledged pursuant hereto and any
transfer agent to reflect the pledge of the Shares. Upon the
occurrence of an Event of Default hereunder, Agent may effect the
transfer of the Shares included in the Collateral into the name of
Agent and cause new certificates representing such securities to be
issued in the name of Agent or its transferee. Each Borrower will
execute and deliver such documents, and take or cause to be taken
such actions, as Agent may reasonably request to perfect or
continue the perfection of Agent’s security interest in the
Shares. Unless an Event of Default shall have occurred and be
continuing, each Borrower shall be entitled to exercise any voting
rights with respect to the Shares and to give consents, waivers and
ratifications in respect thereof, provided that no vote shall be
cast or consent, waiver or ratification given or action taken which
would violate or result in the violation of any of the terms of
this Agreement, or which would adversely affect Agent’s
security interest. All such rights to vote and give consents,
waivers and ratifications shall terminate upon the occurrence and
continuance of an Event of Default. If any Shares not evidenced by
certificates as of the Closing Date subsequently become evidenced
by certificates, or if a Borrower subsequently acquires any Shares
evidenced by certificates, such Borrower shall promptly deliver to
Agent the certificates evidencing the Shares together with a stock
power or other similar instrument of transfer duly executed in
blank by such Borrower to be held by Agent as possessory
collateral.

 

SECTION 4. CONDITIONS
PRECEDENT TO LOAN

 

The
obligations of Lender to make the Loans hereunder are subject to
the satisfaction by Borrowers of the following
conditions:

 

 

 

18

 

 

4.1 Initial
Advance. On or prior to the Closing Date or initial Advance, to the
extent indicated below, Borrowers shall have delivered to Agent the
following:

 

(a) duly
executed copies of the following, in form and substance acceptable
to Agent:

 

(i) this
Agreement;

 

(ii) the
completed ACH Authorization;

 

(iii) the
intellectual property security agreement;

 

(iv) Account
Control Agreements with respect to all Deposit Accounts and any
accounts where Investment Property is maintained, as required
by Section 7.12
hereof, prior to the initial
Advance;

 

(v) a
duly executed certificate of an officer of each Borrower certifying
and attaching copies of (A) the Charter, certified as of a recent
date by the jurisdiction of organization of such Borrower; (B) the
bylaws, operating agreement or similar governing document of such
Borrower; (C) resolutions of such Borrower’s Board or consent
of sole member evidencing approval of (1) the Loan and other
transactions contemplated by the Loan Documents, and with respect
to Parent, (2) the Warrant and issuance of Equity Interests in
accordance with its terms; (D) resolutions of the holders of such
Borrower’s Equity Interests in connection with the
transactions contemplated by this Agreement, to the extent required
pursuant to the terms of the Charter or other governing document,
in each case, as in effect as of the Closing Date, and (E) a
schedule setting forth the name, title and specimen signature of
officers or other authorized signers on behalf of each
Borrower;

 

(vi) a
legal opinion of Borrowers’ counsel;

 

(vii) a
subordination agreement, duly executed by each of Blue Flame
Capital, LLC, Lori Sue Chesrown and Ralph Wegis;

 

(viii) a
subordination agreement, duly executed by Halcyon Consulting,
LLC;

 

(ix) an
Inventory Financing Intercreditor Agreement, duly executed by Ally
Bank and Ally Financial Inc.;

 

(x) any
other Loan Documents (other than the Warrant, which shall be
delivered pursuant to subsection (b)
below);

 

(xi) and
all other documents and instruments reasonably required by Agent to
effectuate the transactions contemplated hereby or to create and
perfect the Liens of Agent with respect to all Collateral (provided
that no certificates of title need be delivered or
endorsed);

 

(b) Originals
of the following, in form and substance acceptable to
Agent:

 

(i) the
Warrant, and

 

(ii) any
certificates evidencing Shares pledged pursuant to
Section
3.3, together with any unit
powers or other instruments of transfer;

 

(c) a
certificate of good standing for each Borrower from its state of
incorporation and similar certificates from all other jurisdictions
in which it does business and where the failure to be qualified
could have a Material Adverse Effect;

 

 

19

 

 

(d) payment
of the Facility Charge and reimbursement of Agent’s and
Lender’s current expenses reimbursable pursuant to this
Agreement, which amounts may be deducted from the initial
Advance;

 

(e) all
certificates of insurance, endorsements, and copies of each
insurance policy required pursuant to Section
6.2, except to the extent
delivery after the Closing Date is permitted in accordance
with Section
7.24; and

 

(f) such
other documents as Agent may reasonably request.

 

4.2 All
Advances. On each Advance Date:

 

(a) Agent
shall have received (i) an Advance Request for the relevant
Advance as required by Section
2.1(b), duly executed by
Borrower Representative’s Chief Executive Officer or Chief
Financial Officer, and (ii) any other documents Agent may
reasonably request.

 

(b) The
representations and warranties set forth in this Agreement shall be
true and correct in all material respects on and as of the Advance
Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly
relate to an earlier date.

 

(c) Borrowers
shall be in compliance with all the terms and provisions set forth
herein and in each other Loan Document on its part to be observed
or performed in all material respects, and at the time of and
immediately after such Advance no Event of Default shall have
occurred and be continuing.

 

(d) Each
Advance Request shall be deemed to constitute a representation and
warranty by Borrowers on the relevant Advance Date as to the
matters specified in paragraphs (b) and (c) of this
Section 4.2
and as to the matters set forth in the
Advance Request.

 

4.3 No
Default. As of the Closing Date and each Advance Date, (i) no fact
or condition exists that could (or could, with the passage of time,
the giving of notice, or both) reasonably be expected to constitute
an Event of Default and (ii) no event that could reasonably be
expected to have a Material Adverse Effect has occurred and is
continuing.

 

SECTION 5. REPRESENTATIONS
AND WARRANTIES OF BORROWERS

 

Borrowers
represent and warrant that:

 

5.1 Organizational
Status. Each Borrower is duly organized, legally existing and in
good standing under the laws of its jurisdiction of organization,
and is duly qualified as a foreign corporation in all jurisdictions
in which the nature of its business or location of its properties
require such qualifications and where the failure to be qualified
could reasonably be expected to have a Material Adverse Effect.
Each Borrower’s present name, former names (if any),
locations, place of formation, tax identification number,
organizational identification number and other information are
correctly set forth in Exhibit
C, or as such Borrower has
subsequently notified Agent after the Closing Date in accordance
with this Agreement (including in any Compliance
Certificate).

 

5.2 Collateral.
Each Borrower owns the Collateral free of all Liens, except for
Permitted Liens. Each Borrower has the power and authority to grant
to Agent a Lien in the Collateral as security for the Secured
Obligations.

 

 

20

 

 

5.3 Consents.
Each Borrower’s execution, delivery and performance of this
Agreement and all other Loan Documents, and Parent’s issuance
of the Warrant and the Equity Interests issuable upon exercise of
the Warrant, (i) have been duly authorized by all necessary
action in accordance with Borrower’s Organizational
Documents, (ii) will not result in the creation or imposition
of any Lien upon the Collateral, other than Permitted Liens and the
Liens created by this Agreement and the other Loan Documents, (iii)
do not violate any provisions of a Borrower’s Organizational
Documents, or any, law, regulation, order, injunction, judgment,
decree or writ to which a Borrower is subject and (iv) do not
violate any material contract or agreement in any material respect
or require the consent or approval of any other Person which has
not already been obtained. The individual or individuals executing
the Loan Documents and the Warrant are duly authorized to do
so.

 

5.4 Material
Adverse Effect. No event that has had, or could reasonably be
expected to have, a Material Adverse Effect has occurred and is
continuing.

 

5.5 Actions
Before Governmental Authorities. There are no actions, suits or
proceedings at law or in equity or by or before any governmental
authority now pending or, to the knowledge of a Borrower,
threatened against a Borrower or its property, that is reasonably
expected to result in a Material Adverse Effect.

 

5.6 Laws.

 

(a) Neither
any Borrower nor any of its Subsidiaries is in violation of any
law, rule or regulation, or in default with respect to any
judgment, writ, injunction or decree of any governmental authority,
where such violation or default is reasonably expected to result in
a Material Adverse Effect. No Borrower is in default
in any material respect under any agreement or instrument
evidencing Indebtedness material to the Borrowers as a whole, or any other
agreement necessary or material
to the operation or conduct of the business of the Borrowers to
which any Borrower is a party or by which it is bound, subject to
any applicable grace period.

 

(b) Neither
a Borrower nor any of its Subsidiaries is an “investment
company” or a company “controlled” by an
“investment company” under the Investment Company Act
of 1940, as amended. Neither a Borrower nor any of its Subsidiaries
is engaged as one of its important activities in extending credit
for margin stock (under Regulations X, T and U of the Federal
Reserve Board of Governors). Each Borrower and each of its
Subsidiaries has complied in all material respects with the Federal
Fair Labor Standards Act. Neither a Borrower nor any of its
Subsidiaries is a “holding company” or an
“affiliate” of a “holding company” or a
“subsidiary company” of a “holding company”
as each term is defined and used in the Public Utility Holding
Company Act of 2005. Neither a Borrower’s nor any of its
Subsidiaries’ properties or assets has been used by a
Borrower or such Subsidiary or, to a Borrower’s Knowledge, by
previous Persons, in disposing, producing, storing, treating, or
transporting any hazardous substance other than in material
compliance with applicable laws. Each Borrower and each of its
Subsidiaries has obtained all consents, approvals and
authorizations of, made all declarations or filings with, and given
all notices to, all governmental authorities that are necessary to
continue in all material
respects their respective businesses as currently
conducted.

 

(c) None
of Borrowers, any of its Subsidiaries, or any of Borrowers’
or its Subsidiaries’ Affiliates or any of their respective
agents acting or benefiting in any capacity in connection with the
transactions contemplated by this Agreement is (i) in violation of
any Anti-Terrorism Law, (ii) engaging in or conspiring to engage in
any transaction that evades or avoids, or has the purpose of
evading or avoiding or attempts to violate, any of the prohibitions
set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person.
None of Borrowers, any of its Subsidiaries, or to the knowledge of
any Borrower and any of their Affiliates or agents, acting or
benefiting in any capacity in connection with the transactions
contemplated by this Agreement, (x) conducts any business or
engages in making or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person, or (y) deals
in, or otherwise engages in any transaction relating to, any
property or interest in property blocked pursuant to Executive
Order No. 13224, any similar executive order or other
Anti-Terrorism Law. None of the funds to be provided under this
Agreement will be used, directly or indirectly, (a) for any
activities in violation of any applicable anti-money laundering,
economic sanctions and anti-bribery laws and regulations laws and
regulations or (b) for any payment to any governmental official or
employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain
any improper advantage, in violation of the United States Foreign
Corrupt Practices Act of 1977, as amended.

 

 

21

 

 

5.7 Information
Correct and Current. No information, report, Advance Request,
financial statement, exhibit or schedule furnished, by or on behalf
of Borrowers to Agent in connection with any Loan Document or
included therein or delivered pursuant thereto contained, or, when
taken as a whole, contains or will contain any material
misstatement of fact or, when taken together with all other such
information or documents, omitted, omits or will omit to state any
material fact necessary to make the statements therein, in the
light of the circumstances under which they were, are or will be
made, not materially misleading at the time such statement was made
or deemed made. Additionally, any and all financial or business
projections provided by a Borrower to Agent, whether prior to or
after the Closing Date, were (i) provided in good faith and based
on the most current data and information available to Borrowers,
and (ii) the most current of such projections provided to
Parent’s Board (it being understood that such projections are
subject to significant uncertainties and contingencies, many of
which are beyond the control of the Borrowers, that no assurance is
given that any particular projections will be realized and that
actual results may differ materially).

 

5.8 Tax
Matters. Except to the extent contested in good faith with adequate
reserves under GAAP, (a) each Borrower has filed all material
federal, state and local tax returns that it is required to file,
(b) each Borrower has duly paid or fully reserved for all taxes or
installments thereof (including any interest or penalties) as and
when due, which have or may become due pursuant to such returns,
and (c) as of the Closing Date, each Borrower has paid or fully
reserved for any tax assessment received by such Borrower for the
three (3) years preceding the Closing Date, if any (including any
taxes being contested in good faith and by appropriate
proceedings).

 

5.9 Intellectual
Property Claims. Borrowers are the sole owner of, or otherwise has
the right to use, the Intellectual Property material to
Borrowers’ business. Each of the Borrowers’ Copyrights,
Trademarks and Patents material to the Borrowers’ business is
valid and enforceable, the Intellectual Property material to the
Borrowers’ business has not been judged invalid or
unenforceable, in whole or in part, and no claim has been made in
writing to a Borrower that any material part of the Intellectual
Property material or necessary to the conduct of the
Borrowers’ business violates the rights of any third party,
except to the extent Borrowers have provided evidence satisfactory
to Agent that such claim is without merit or otherwise not
reasonably likely to be successful. Exhibit D
is a true, correct and complete list
of each of Borrowers’ Patents, registered Trademarks,
registered Copyrights, and material agreements under which a
Borrower licenses Intellectual Property from third parties (other
than shrink-wrap software licenses), together with application or
registration numbers, as applicable, owned by a Borrower or any
Subsidiary, in each case as of the Closing Date. No Borrower is in
material breach of, nor has any Borrower failed to perform any
material obligations under, any of the foregoing contracts,
licenses or agreements material to the Borrowers’
business and, to any
Borrower’s knowledge, no third party to any such contract,
license or agreement material
to the Borrowers’ business is in material breach thereof or
has failed to perform any material obligations thereunder, except
to the extent such breach or failure to perform could not
reasonably be expected to result in a Material Adverse Effect,
Borrowers have notified Agent of such breach or failure to perform,
and Borrowers are taking actions to mitigate such circumstances
satisfactory to Agent.

 

5.10 Intellectual
Property. Borrowers have all material rights with respect to
Intellectual Property necessary or material in the operation or
conduct of Borrowers’ business as currently conducted and
proposed to be conducted by Borrowers. Without limiting the
generality of the foregoing, and in the case of Borrowers’
Licenses, except for restrictions that are unenforceable under
Division 9 of the UCC, Borrowers have the right, to the extent
required to operate Borrowers’ business, to freely transfer,
license or assign Intellectual Property necessary or material in
the operation or conduct of Borrowers’ business as currently
conducted and proposed to be conducted by Borrowers, without
condition, restriction or payment of any kind (other than license
payments in the ordinary course of business and customary covenants in inbound license
agreements) to any third party,
and Borrowers own or have the right to use, pursuant to valid
licenses, all software development tools, library functions,
compilers and all other third-party software and other items that
are material to Borrowers’ business and used in the design,
development, promotion, sale, license, manufacture, import, export,
use or distribution of Borrower Products except customary covenants
in inbound license agreements and equipment leases where a Borrower
is the licensee or lessee.

 

 

22

 

 

5.11 Borrower
Products. No Intellectual Property necessary or material in the
operation or conduct of Borrowers’ business as currently
conducted and proposed to be conducted and owned by a Borrower or
Borrower Product that constitutes Intellectual Property has been or is subject to
any actual or, to the knowledge of any Borrower, threatened
litigation, proceeding (including any proceeding in the United
States Patent and Trademark Office or any corresponding foreign
office or agency) or outstanding decree, order, judgment,
settlement agreement or stipulation that restricts in any
material respect the applicable
Borrower’s use, transfer or licensing thereof or that
could reasonably be expected to affect
the validity, use or enforceability thereof. There is no decree,
order, judgment, agreement, stipulation, arbitral award or other
provision entered into in connection with any litigation or
proceeding that obligates any Borrower to grant licenses or
ownership interest in any future Intellectual Property necessary or
material to the operation or conduct of the business of Borrowers
or Borrower Products. No
Borrower has received any written
notice or claim challenging or questioning any Borrower’s
ownership in any such Intellectual Property (or written notice of
any claim challenging or questioning the ownership in any licensed
such Intellectual Property of the owner thereof) or suggesting that
any third party has any claim of legal or beneficial ownership with
respect thereto nor, to any Borrower’s knowledge, is there a
reasonable basis for any such claim, except for claims with respect
to which Borrowers have provided evidence satisfactory to Agent
that such claim is without merit or otherwise not reasonably likely
to be successful. Neither any Borrower’s use of its
Intellectual Property material
in the conduct of its business as currently conducted or proposed
to be conducted, nor the production and sale of a Borrower Product
infringes the Intellectual Property or other rights of
others.

 

5.12 Financial
Accounts. Exhibit
E, as may be updated by
Borrowers in a written notice provided to Agent after the Closing
Date, is a true, correct and complete list of (a) all banks
and other financial institutions at which a Borrower or any
Subsidiary maintains Deposit Accounts and (b) all institutions at
which a Borrower or any Subsidiary maintains an account holding
Investment Property, and such exhibit correctly identifies the
name, address and telephone number of each bank or other
institution, the name in which the account is held, a description
of the purpose of the account, and the complete account number
therefor, provided that Borrowers may provide the details regarding
any Deposit Account or other account in which initial Permitted
Inventory Financing Cash Collateral is maintained shall be provided
within five (5) Business Days of the Closing
Date.

 

5.13 [Intentionally
Omitted].

 

5.14 Capitalization
and Subsidiaries. Parent’s capitalization as of the Closing
Date is set forth on Schedule 5.14
annexed hereto. No Borrower owns any
stock, partnership interest or other securities of any Person,
except for Permitted Investments. Attached as Schedule
5.14, as may be updated by
Borrowers in a written notice provided after the Closing Date, is a
true, correct and complete list of each
Subsidiary.

 

5.15 Foreign
Subsidiary Voting Rights. No decision or action in any governing
document of any Foreign Subsidiary (other than an Eligible Foreign
Subsidiary) requires a vote of greater than 50.1% of the Equity
Interests or voting rights of such Foreign Subsidiary.

 

SECTION 6. INSURANCE;
INDEMNIFICATION

 

6.1              Coverage.
Each Borrower shall cause to be carried and maintained commercial
general liability insurance, on an occurrence form, against risks
customarily insured against in Borrowers’ line of business.
Such risks shall include the risks of bodily injury, including
death, property damage, personal injury, advertising injury, and
contractual liability per the terms of the indemnification
agreement found in Section 6.3.
Borrowers must maintain a minimum of $1,000,000 of commercial
general liability insurance for each occurrence. Borrowers have and
agree to maintain a minimum of $2,000,000 of directors’ and
officers’ insurance for each occurrence and $5,000,000 in the
aggregate. So long as there are any Secured Obligations
outstanding, Borrowers shall also cause to be carried and
maintained insurance upon the Collateral, insuring against all
risks of physical loss or damage howsoever caused, in an amount not
less than the full replacement cost of the Collateral, provided
that such insurance may be subject to standard exceptions and
deductibles.

 

 

23

 

 

6.2 Certificates.
Borrowers shall deliver to Agent certificates of insurance that
evidence Borrowers’ compliance with its insurance obligations
in Section 6.1
and the obligations contained in
this Section
6.2. Borrowers’ insurance
certificate shall state Agent (shown as “Hercules Capital,
Inc.”, as “Agent”) is an additional insured for
commercial general liability, a lender loss payee for all risk
property damage insurance, subject to the insurer’s approval,
and a lender loss payee for property insurance and additional
insured for liability insurance for any future insurance that
Borrowers may acquire from such insurer. Attached to the
certificates of insurance will be additional insured endorsements
for liability and lender’s loss payable endorsements for all
risk property damage insurance. All certificates of insurance will
provide for a minimum of thirty (30) days advance written notice to
Agent of cancellation (other than cancellation for non-payment of
premiums, for which ten (10) days’ advance written notice
shall be sufficient) or any other change adverse to Agent’s
interests. Any failure of Agent to scrutinize such insurance
certificates for compliance is not a waiver of any of Agent’s
rights, all of which are reserved. Borrowers shall provide Agent
with copies of each insurance policy, and upon entering or amending
any insurance policy required hereunder, Borrowers shall provide
Agent with copies of such policies and shall promptly deliver to
Agent updated insurance certificates with respect to such
policies.

 

6.3 Indemnity.
Borrowers agree to indemnify and hold Agent, Lender and their
officers, directors, employees, agents, in-house attorneys,
representatives and shareholders (each, an
“Indemnified
Person”) harmless from
and against any and all claims, costs, expenses, damages and
liabilities (including such claims, costs, expenses, damages and
liabilities based on liability in tort, including strict liability
in tort), including reasonable attorneys’ fees and
disbursements and other costs of investigation or defense
(including those incurred upon any appeal) (collectively,
“Liabilities”),
that may be instituted or asserted against or incurred by such
Indemnified Person as the result of credit having been extended,
suspended or terminated under this Agreement and the other Loan
Documents or the administration of such credit, or in connection
with or arising out of the transactions contemplated hereunder and
thereunder, or any actions or failures to act in connection
therewith, or arising out of the disposition or utilization by
Agent or Lender after an Event of Default of the Collateral,
excluding in all cases Liabilities to the extent resulting from any
Indemnified Person’s gross negligence or willful misconduct.
Borrowers agree to pay, and to save Agent and Lender harmless from,
any and all liabilities with respect to, or resulting from any
delay in paying, any and all excise, sales or other similar taxes
(excluding taxes imposed on or measured by the net income of Agent
or Lender) that may be payable or determined to be payable with
respect to any of the Collateral or this Agreement. In no event
shall any Indemnified Person be liable on any theory of liability
for any special, indirect, consequential or punitive damages
(including any loss of profits, business or anticipated savings).
This Section 6.3
shall survive the repayment of
indebtedness under, and otherwise shall survive the expiration or
other termination of, the Loan Agreement.

 

SECTION 7. COVENANTS
OF BORROWERS

 

Each
Borrower agrees as follows:

 

7.1 Financial
Reports. Borrower Representative shall furnish to Agent the
financial statements and reports listed hereinafter (the
“Financial
Statements”):

 

(a) through
the period ending October 31, 2018, as soon as practical (and in
any case within 30 days) after the end each month, unaudited
management prepared reports in a form agreed among Borrowers and
Agent prior to the Closing Date, and in any event including a
statement of profits and losses, a report of cash balances, a
report of accounts receivable and accounts payable, and an
inventory report and, thereafter, as soon as practicable (and in
any event within 30 days) after the end of the first two months of
each fiscal quarter of Parent, unaudited internally prepared
interim financial statements as of the end of such
month;

 

 

24

 

 

(b) as
soon as practicable (and in any event within 45 days) after the end
of each fiscal quarter of Parent, unaudited interim and
year-to-date financial statements as of the end of such fiscal
quarter (prepared on a consolidated and consolidating basis)
including balance sheet and related statements of income and cash
flows accompanied by a report detailing any material contingencies
(including the commencement of any material litigation by or
against any Borrower) or any other occurrence that could reasonably
be expected to have a Material Adverse Effect, certified by
Borrower Representative’s Chief Executive Officer or Chief
Financial Officer as having been prepared in accordance with GAAP,
(i) except for the absence of footnotes, and (ii) subject to normal
year-end adjustments; as well as the most recent capitalization
table for Parent, including the weighted average exercise price of
employee stock options; provided, however, that in lieu of the
reporting requirements pursuant to this Section
7.1(b), Parent may provide to
Agent a link to its quarterly report on Form 10-Q filed pursuant to
the Exchange Act through its investor relations web
page;

 

(c) as
soon as practicable (and in any event within 90 days) after the end
of each fiscal year, unqualified audited financial statements as of
the end of such year including balance sheet and related statements
of income and cash flows, and setting forth in comparative form the
corresponding figures for the preceding fiscal year, certified by a
firm of independent certified public accountants selected by
Borrowers and reasonably acceptable to Agent, accompanied by any
management report from such accountants; provided, however, that in
lieu of the reporting requirements pursuant to this
Section
7.1(c), Parent may provide to
Agent a link to its annual report on Form 10-K filed pursuant to
the Exchange Act through its investor relations web
page;

 

(d) as
soon as practicable (and in any event together with monthly
financial statements delivered pursuant to subsection (a)
above and together with quarterly
financial statements delivered pursuant to subsection (b)
above), a Compliance Certificate in
the form of Exhibit
F;

 

(e) as
soon as practicable (and in any event within 30 days) after the end
of each month, (i) a report showing agings of accounts receivable,
to the extent accounts receivable as of the last day of such month
exceed $1,000,000 and (ii) a report showing agings of accounts
payable, to the extent accounts payable as of the last day of such
month exceed $600,000;

 

(f) through
its investor relations web page, copies of any proxy statements,
financial statements or reports that Parent has made available to
holders of its capital stock, and copies of any regular, periodic
and special reports or registration statements that Parent files
with the Securities and Exchange Commission or any governmental
authority that may be substituted therefor, or any national
securities exchange;

 

(g) financial
and business projections and budget promptly following their
approval by Parent’s Board, and in any event, within 60 days
after the end of Parent’s fiscal year, which projections and
budget shall be in format acceptable to Agent, it being understood
that the format of the projections and budget delivered to Agent as
of the Closing Date is acceptable, and which projections and budget
shall be consistent with financial covenant compliance (if
applicable) and Borrower’s ability to pay the Secured
Obligations when due, and promptly after any update to such
projections or budget is approved by Parent’s Board, such
updated projections and budget, as well as such other budgets,
plans or financial information as Agent may reasonably request,
provided that if any projections or budget delivered to Agent do
not reflect levels consistent with financial covenant compliance
(if applicable) or Borrower’s ability to pay the Secured
Obligations when due, then Borrower shall promptly (and in any
event within 10 Business
Days) deliver to Agent a proposal or
plan reasonably satisfactory to
Agent to address the circumstances;

 

(h) a
daily inventory report, which shall indicate with respect to each
item of Inventory whether it is financed pursuant to a Qualified
Inventory Financing, on each Business Day, with respect to the
preceding Business Day, in form approved by Agent as of the Closing
Date or as subsequently agreed among the parties;
provided, however, Borrowers shall not
be in breach of this clause (h) if they fail less than four times
in any calendar month to timely provide such daily
reports;

 

 

25

 

 

(i) any
material statement, or notice of increased commitment, change in
terms, non-renewal or default or any demand for payment pursuant to
a Qualified Inventory Financing; and

 

(j) immediate
notice if a Borrower or any Subsidiary has knowledge that a
Borrower, or any Subsidiary or Affiliate of a Borrower, is listed
on the OFAC Lists or (a) is convicted on,
(b) pleads nolo contendere
to, (c) is indicted on, or
(d) is arraigned and held over on charges involving money
laundering or predicate crimes to money
laundering.

 

No
Borrower shall make any change in its (a) accounting policies or
reporting practices (except as required by GAAP), or (b) fiscal
years or fiscal quarters. The fiscal year of each Borrower shall
end on December 31.

 

The executed Compliance Certificate may be sent
via email to Agent at legal@herculestech.com, with a copy to
tharris@htgc.com. All Financial Statements required to be delivered
pursuant to clauses (a), (b)
and (c) shall be sent via
e-mail to financialstatements@herculestech.com with a copy to
legal@herculestech.com and tharris@htgc.com provided, that if
e-mail is not available or sending such Financial Statements via
e-mail is not possible, they shall be faxed to Agent at: (650)
473-9194, attention Account Manager: RumbleON, Inc. Notwithstanding
the foregoing, documents required to be delivered under
Sections
7.1(a), (b), (c) or (f) (to the
extent any such documents are included in materials otherwise filed
with the Securities Exchange Commission) may be delivered
electronically and if so delivered, shall be deemed to have been
delivered on the date on which Borrower emails a link thereto to
Agent.

 

7.2 Management
Rights. Borrowers shall permit any representative that Agent or
Lender authorizes, including its attorneys and accountants, to
inspect the Collateral and examine and make copies and abstracts of
the books of account and records of Borrowers at reasonable times
and upon reasonable notice during normal business hours; provided,
however, that so long as no Event of Default has occurred and is
continuing, such examinations shall be limited to no more often
than twice per fiscal year. In addition, any such representative
shall have the right to meet with management and officers of
Borrowers to discuss such books of account and records. In
addition, Agent or Lender may at reasonable times and intervals
consult with and advise the management and officers of Borrowers
concerning significant business issues affecting Borrowers. Such
consultations and advice shall
not unreasonably interfere with Borrowers’ business
operations. The parties intend that the rights granted Agent shall
constitute “management rights” within the meaning of 29
C.F.R. Section 2510.3-101(d)(3)(ii), but that any advice,
recommendations or participation by Agent or Lender with respect to
any business issues shall not be deemed to give Agent or Lender,
nor be deemed an exercise by Agent or Lender of, control over
Borrowers’ management or policies, and the
Borrowers shall have no obligation to
act upon or follow any such advice or recommendation
or to allow the Agent or Lender to
attend meetings of the Board of the Parent.

 

7.3 Further
Assurances. Each Borrower shall from time to time execute, deliver
and file, alone or with Agent, any financing statements, security
agreements, collateral assignments, notices, control agreements, or
other documents to perfect or give the highest priority to
Agent’s Lien on the Collateral, subject to Permitted Liens.
Each Borrower shall from time to time procure any instruments or
documents as may be reasonably requested by Agent, and take all
further action that may be necessary, or that Agent may reasonably
request, to perfect and protect the Liens granted hereby and
thereby; provided, however, certificates of title for vehicles need
not be delivered or endorsed so long as no Event of Default is then
continuing. In addition, and for such purposes only, each Borrower
hereby authorizes Agent to execute and deliver on behalf of such
Borrower and to file such financing statements (including an
indication that the financing statement covers “all assets or
all personal property” of such Borrower in accordance with
Section 9-504 of the UCC), collateral assignments, notices, control
agreements, security agreements and other documents without the
signature of such Borrower either in Agent’s name or in the
name of Agent as agent and attorney-in-fact for such Borrower. Each
Borrower shall protect and defend such Borrower’s title to
the Collateral and Agent’s Lien thereon against all Persons
claiming any interest adverse to such Borrower or Agent other than
Permitted Liens.

 

 

26

 

 

7.4 Indebtedness.
No Borrower shall create, incur, assume, guarantee or be or remain
liable with respect to any Indebtedness, or permit any Subsidiary
so to do, other than Permitted Indebtedness, or prepay any
Indebtedness or take any actions which impose on any Borrower an
obligation to prepay any Indebtedness, except for (a) the
conversion of Indebtedness into equity securities and the payment
of cash in lieu of fractional shares in connection with such
conversion, (b) purchase money Indebtedness pursuant to its then
applicable payment schedule, (c) prepayment by any Subsidiary of
(i) intercompany Indebtedness owed by such Subsidiary to any
Borrower, or (ii) if such Subsidiary is not a Borrower,
intercompany Indebtedness owed by such Subsidiary to another
Subsidiary that is not a Borrower, (d) as permitted pursuant to any
Inventory Financing Intercreditor Agreement or any subordination
agreement related to Subordinated Indebtedness, or (e) as otherwise
permitted hereunder or approved in writing by Agent.

 

7.5 Collateral.
Each Borrower shall at all times keep the Collateral and all other
property and assets used in Borrowers’ business or in which
such Borrower now or hereafter holds any interest free and clear
from any Liens whatsoever (except for Permitted Liens), and shall
give Agent prompt written notice of any legal process affecting the
Collateral, such other property or assets, or any Liens thereon,
provided however, that the Collateral and such other property and
assets may be subject to Permitted Liens. No Borrower shall agree
with any Person other than Agent, Lender, Inventory Financing
Lenders and holders of Subordinated Indebtedness not to encumber
its property. Each Borrower shall cause each of its Subsidiaries to
protect and defend such Subsidiary’s title to its assets from
and against all Persons claiming any interest adverse to such
Subsidiary, and each Borrower shall cause each of its Subsidiaries
at all times to keep such Subsidiary’s property and assets
free and clear from any Liens whatsoever (except for Permitted
Liens) and shall give Agent prompt written notice of any legal
process affecting such Subsidiary’s assets.

 

7.6 Investments;
Capital Expenditures. Each Borrower shall not directly or
indirectly acquire or own, or make any Investment in or to any
Person, or permit any of each of its Subsidiaries so to do, other
than Permitted Investments, and shall not permit aggregate capital
expenditures (other than software development costs, which may be
capitalized), determined in accordance with GAAP, to exceed
$250,000 per fiscal year.

 

7.7 Distributions.
No Borrower shall, and shall not allow any Subsidiary to, (a)
repurchase or redeem any class of stock or other Equity Interest
other than repurchases described in clause (b)
of the defined term “Permitted
Investments” or in accordance with clause (l)
of the defined term “Permitted
Investments”, (b) declare or pay any cash dividend or make a
cash distribution on any class of stock or other Equity Interest,
except that a Subsidiary may pay dividends or make distributions to
a Borrower; (c) except for Permitted Investments, lend money to any
employees, officers or directors or guarantee the payment of any
such loans granted by a third party in excess of $100,000 in the
aggregate; or (d) waive, release or forgive any Indebtedness owed
by any employees, officers or directors in excess of $100,000 in
the aggregate.

 

7.8 Transfers.
Except for Permitted Transfers, no Borrower shall, or shall allow
any Subsidiary to, voluntarily or involuntarily transfer, sell,
lease, license, lend or in any other manner convey any equitable,
beneficial or legal interest in any material portion of its assets
(it being understood and agreed that the issuance of Equity
Interests in the Parent shall not violate this Section
7.8).

 

7.9 Mergers
or Acquisitions. Except for Permitted Acquisitions, no Borrower
shall merge or consolidate, or permit any of each of its
Subsidiaries to merge or consolidate, with or into any other
business organization (other than mergers or consolidations of (a)
a Subsidiary which is not a Borrower into another Subsidiary or
into a Borrower or (b) a Borrower into another Borrower), or
acquire, or permit any of each of its Subsidiaries to acquire, all
or substantially all of the capital stock or property of another
Person.

 

 

27

 

 

7.10 Taxes.
Borrowers and each of its Subsidiaries shall pay when due (or
within any applicable grace period) all material taxes, fees or
other charges of any nature whatsoever (together with any related
interest or penalties) now or hereafter imposed or assessed against
a Borrower or the Collateral or upon a Borrower’s ownership,
possession, use, operation or disposition thereof or upon a
Borrower’s rents, receipts or earnings arising therefrom.
Each Borrower shall file on or before the due date therefor all
personal property tax returns in respect of the Collateral, or file
for appropriate extensions by such due date. Notwithstanding the
foregoing, a Borrower may contest, in good faith and by appropriate
proceedings, taxes for which such Borrower maintains adequate
reserves therefor in accordance with GAAP.

 

7.11 Certain
Changes. Neither a Borrower nor any Subsidiary shall change its
jurisdiction of organization, organizational form or legal name
without twenty (20) days’ prior written notice to Agent.
Neither a Borrower nor any Subsidiary shall suffer a Change in
Control. Neither a Borrower nor any Subsidiary shall relocate its
chief executive office or its principal place of business unless:
(i) it has provided prior written notice to Agent; and (ii) such
relocation shall be within the continental United States of
America. Neither a Borrower nor any Qualified Subsidiary shall
relocate Collateral (excluding vehicles not constituting
Inventory), other than (w) sales of Inventory in the ordinary
course of business, (x) Inventory in transit in the ordinary course
of business, (y) relocations of Collateral from a location
described on Exhibit C
to another location described
on Exhibit C
or another location that is, from time
to time, subject to a landlord waiver or bailee agreement, in form
and substance satisfactory to Agent, in favor of Agent, or (z) to
the extent after giving effect to such relocation, the aggregate
value of Collateral (other than vehicles not constituting
Inventory) which is at locations not subject to a landlord waiver
or bailee agreement does not exceed $400,000 (excluding for such
purposes the value of Inventory in transit in the ordinary course
of business). With respect to any leased location or location where
Collateral (other than vehicles not constituting Inventory) is held
by a bailee, Borrowers shall deliver a landlord waiver or bailee
agreement in favor of Agent, in form and substance reasonably
satisfactory to Agent, provided that for locations existing as of
the Closing Date and for which a landlord waiver or bailee
agreement would be required, Borrowers may deliver the same within
thirty (30) days of the Closing Date (subject to extension from
time to time in Agent’s discretion if Borrowers have
demonstrated their use of commercially reasonable efforts to obtain
such landlord waivers and agreements), and provided that no
landlord waiver or bailee agreement shall be required to the extent
that Collateral (other than vehicles not constituting Inventory) at
all leased or bailee locations not subject to such a landlord
waiver or bailee agreement does not exceed $400,000 at any
time.

 

7.12 Deposit
Accounts; Cash Management. Neither a Borrower nor any Qualified
Subsidiary shall maintain any Deposit Accounts, or accounts holding
Investment Property except for (i) the Deposit Account used
exclusively for maintaining the Permitted Inventory Financing Cash
Collateral with a balance not in excess of the amount permitted
herein (for which no Account Control Agreement shall be required),
or (ii) with respect to which Agent has an Account Control
Agreement. Any Subsidiary, including RMBL Missouri, that receives
proceeds from the sale of Inventory, shall, after settlement of any
amounts due in respect of a Qualified Inventory Financing with
respect to the Inventory sold, immediately transfer the excess
proceeds, if any, to a Deposit Account that is subject to an
Account Control Agreement in favor of Agent pursuant to which Agent
is the first lien or controlling secured party, as
applicable.

 

7.13 Formation
of Subsidiaries. Borrower Representative shall notify Agent of each
Subsidiary formed subsequent to the Closing Date and, within 30
days, shall cause any Qualified Subsidiary to execute and deliver
to Agent a Joinder Agreement. In the event of a restructuring
resulting in Parent no longer
being a publicly traded entity and one or more holding companies
owning all or substantially all
of the shares of Parent, Borrowers shall cause such Person to enter
into a Joinder Agreement.

 

7.14 [Reserved.]

 

7.15 Notification
of Event of Default. Borrower Representative shall notify Agent
immediately of the occurrence of any Event of Default.

 

 

28

 

 

7.16 [Reserved.]

 

7.17 Use
of Proceeds. Each Borrower agrees that the proceeds of the Loans
shall be used solely to pay related fees and expenses in connection
with this Agreement and for working capital and general business
purposes. The proceeds of the Loans will not be used in violation
of Anti-Corruption Laws or applicable Sanctions.

 

7.18 Foreign
Subsidiary Voting Rights. Each Borrower shall not, and shall not
permit any Subsidiary, to amend or modify any governing document of
any Foreign Subsidiary of such Borrower (other than an Eligible
Foreign Subsidiary) the effect of which is to require a vote of
greater than 50.1% of the Equity Interests or voting rights of such
entity for any decision or action of such entity.

 

7.19 [Reserved.]

 

7.20 Compliance
with Laws.

 

(a) Each
Borrower shall maintain, and shall cause each of its Subsidiaries
to maintain compliance in all material respects with all applicable
laws, rules or regulations (including, without limitation,
dealership laws, laws applicable to the brokering of loans and
consumer protection laws), and shall, or cause its Subsidiaries to,
obtain and maintain all required governmental authorizations,
approvals, licenses, franchises, permits or registrations
reasonable necessary in connection with the conduct of
Borrowers’ business.

 

(b) Neither
a Borrower nor any of its Subsidiaries shall, nor shall a Borrower
or any of its Subsidiaries permit any Affiliate to, directly or
indirectly, knowingly enter into any documents, instruments,
agreements or contracts with any Person listed on the OFAC Lists.
Neither a Borrower, nor any of its Subsidiaries shall, nor shall a
Borrower or any of its Subsidiaries, permit any Affiliate to,
directly or indirectly, (i) conduct any business or engage in
any transaction or dealing with any Blocked Person, including,
without limitation, the making or receiving of any contribution of
funds, goods or services to or for the benefit of any Blocked
Person, (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224 or any similar executive order or
other Anti-Terrorism Law, or (iii) engage in or conspire to
engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in Executive Order No. 13224 or other
Anti-Terrorism Law.

 

(c) Each
Borrower has implemented and maintains in effect policies and
procedures designed to ensure compliance by a Borrower, each of its
Subsidiaries and their respective directors, officers, employees
and agents with Anti-Corruption Laws and applicable Sanctions, and
each Borrower, each of its Subsidiaries and, to the knowledge of
each Borrower, its directors, officers, employees and agents, are
in compliance with Anti-Corruption Laws and applicable Sanctions in
all material respects.

 

(d) None
of Borrowers, any of its Subsidiaries or to the knowledge of
Borrowers, any director, officer, employee or agent for Borrowers
or any of its Subsidiaries that will act in any capacity in
connection with or benefit from the credit facility established
hereby, is a Sanctioned Person. No Loan, use of proceeds or other
transaction contemplated by this Agreement will violate
Anti-Corruption Laws or applicable Sanctions.

 

7.21 Financial
Covenants.

 

Beginning
with the draw of Tranche III, Borrowers shall be subject to the
following financial covenants:

 

(a) Parent
shall achieve Revenue for each quarterly period in an amount of at
least 75% of the amount set forth in the Budget for such period,
tested quarterly.

 

 

29

 

 

(b) If
during any fiscal quarter, the average balance of all Deposit
Accounts of Borrowers and accounts in which Investment Property of
Borrowers is maintained that are subject to an Account Control
Agreement in favor of Lender is less than $15,000,000, then Parent
shall achieve quarterly Adjusted EBITDA of not less than $2,000,000
for such quarter, tested quarterly.

 

7.22 Intellectual
Property. Each Borrower shall (i) protect, defend and maintain the
validity and enforceability of its Intellectual Property that is
material to the business of Borrowers as a whole; (ii) promptly
advise Agent in writing of material infringements of its
Intellectual Property that is material to the business of Borrowers
as a whole; and (iii) not allow any Intellectual Property material
to Borrowers’ business to be abandoned, forfeited or
dedicated to the public without Agent’s written consent. If a
Borrower (i) obtains any Patent, registered Trademark, registered
Copyright, registered mask work, or any pending application for any
of the foregoing, whether as owner, licensee or otherwise, or (ii)
applies for any Patent or the registration of any Trademark, then
such Borrower shall promptly provide written notice thereof to
Agent and shall execute such intellectual property security
agreements and other documents and take such other actions as Agent
may request in its good faith business judgment to perfect and
maintain a first priority perfected security interest in favor of
Agent in such property. If a Borrower decides to register any
Copyrights or mask works in the United States Copyright Office,
such Borrower shall: (x) provide Agent notice of such
Borrower’s intent to register such Copyrights or mask works
together with a copy of the application it intends to file with the
United States Copyright Office (excluding exhibits thereto); (y)
execute an intellectual property security agreement and such other
documents and take such other actions as Agent may request in its
good faith business judgment to perfect and maintain a first
priority perfected security interest in favor of Agent in the
Copyrights or mask works intended to be registered with the United
States Copyright Office; and (z) record such intellectual property
security agreement with the United States Copyright Office
contemporaneously (or promptly thereafter) with filing the
Copyright or mask work application(s) with the United States
Copyright Office. Borrowers shall promptly provide to Agent copies
of all applications that it files for Patents or for the
registration of Trademarks, Copyrights or mask works, together with
evidence of the recording of the intellectual property security
agreement required for Agent to perfect and maintain a first
priority perfected security interest in such property.

 

7.23 Transactions
with Affiliates. No Borrower shall or shall permit any Subsidiary
to, directly or indirectly, enter into or permit to exist any
transaction of any kind with any Affiliate of any Borrower or such
Subsidiary on terms that are less favorable to Borrowers or such
Subsidiary, as the case may be, than those that might be obtained
in an arm’s length transaction from a Person who is not an
Affiliate of a Borrower or such Subsidiary.

 

7.24 Post-Closing
Deliveries. Borrowers shall have delivered

 

(a) the
landlord waivers and bailee agreements as required pursuant
to Section
7.11;

 

(b) within
30 days of the Closing Date, the insurance certificate and
endorsement with respect to commercial property insurance in
accordance with Section
6.2; and

 

(c) within
5 Business Days of the Closing Date, the details regarding any
Deposit Account or other account in which Permitted Inventory
Financing Cash Collateral is maintained.

 

SECTION 8. [Reserved.]

 

 

30

 

 

SECTION 9. EVENTS
OF DEFAULT

 

The
occurrence of any one or more of the following events shall be an
Event of Default:

 

9.1 Payments.
Borrowers fail to pay any amount due under this Agreement or any of
the other Loan Documents on the due date; provided, however, that
an Event of Default shall not occur on account of a failure to pay
due solely to an administrative or operational error of Agent or
Lender or the applicable Borrower’s bank if Borrowers had the
funds to make the payment when due and make the payment within
three (3) Business Days following Borrowers’ knowledge of
such failure to pay; or

 

9.2 Covenants.
A Borrower breaches or defaults in the performance of any covenant
or Secured Obligation under this Agreement, or any of the other
Loan Documents or any other agreement among any Borrower, Agent and
Lender, and (a) with respect to a default under any covenant
under this Agreement (other than the Sections specifically
identified in clause (b)
hereof), any other Loan Document or
any other agreement between any Borrower and Agent or Lender, such
default continues for more than twenty (20) days, or (b) with
respect to a default under any of Sections 6.1,
6.2, 7.1, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.11,
7.12,
7.15,
7.17,
7.18,
7.20(b),
(c) or (d), 7.21,
or 7.24
the occurrence of such default;
or

 

9.3 Material
Adverse Effect. A circumstance has occurred that could reasonably
be expected to have a Material Adverse Effect; or

 

9.4 Representations.
Any representation or warranty made by any Borrower in any Loan
Document or in the Warrant shall have been false or misleading in
any material respect when made or when deemed made; or

 

9.5 Insolvency.
(i)(A) Any Borrower shall make an assignment for the benefit
of creditors; or (B) Borrowers, as a whole, shall be unable to
pay their debts as they become due, or be unable to pay or perform
their material obligations under the Loan Documents, or shall
become insolvent; or (C) any Borrower shall file a voluntary
petition in bankruptcy; or (D) any Borrower shall file any
petition, answer, or document seeking for itself any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or
future statute, law or regulation pertinent to such circumstances;
or (E) any Borrower shall seek or consent to or acquiesce in
the appointment of any trustee, receiver, or liquidator of any
Borrower or of all or any material part of the assets or property
of Borrowers, as a whole; or (F)  any Borrower (other than a
Borrower that has no material operations) shall cease operations of
its business as its business has normally been conducted, or
Borrowers, as a whole, terminate substantially all of their
employees; or (G) any Borrower or its directors or a majority
of the holders of its Equity Interests shall take any action
initiating any of the foregoing actions described in
clauses (A)
through (F); or (ii) either
(A) thirty (30) days shall have expired after the commencement
of an involuntary action against any Borrower seeking
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or
future statute, law or regulation, without such action being
dismissed or all orders or proceedings thereunder affecting the
operations or the business of any Borrower being stayed; or
(B) a stay of any such order or proceedings shall thereafter
be set aside and the action setting it aside shall not be appealed
within ten (10) days; or (C) any Borrower shall file any
answer admitting or not contesting the material allegations of a
petition filed against any Borrower in any such proceedings; or
(D) the court in which such proceedings are pending shall
enter a decree or order granting the relief sought in any such
proceedings; or (E) thirty (30) days shall have expired after the
appointment, without the consent or acquiescence of any Borrower,
of any trustee, receiver or liquidator of such Borrower or of all
or any material part of the properties of Borrowers, taken as a
whole without such appointment being vacated;
or

 

 

31

 

 

9.6 Attachments;
Judgments. Any material portion of any Borrower’s assets is
attached or seized, or a levy is filed against any such assets, or
a judgment or judgments is/are entered for the payment of
money (not covered by
independent third party insurance as to which liability has been
accepted (subject to customary reservation of rights) by such
insurance carrier), individually or in the aggregate, of at least
$250,000, or any Borrower is enjoined or in any way prevented by
court order from conducting any material part of its
business;

 

9.7 Other
Obligations. The occurrence of any default and the passing of any
applicable grace period under any agreement or obligation of any
Borrower (including pursuant to the Inventory Financing Agreement)
involving any Indebtedness in excess of $250,000, which could
entitle or permit any Person to accelerate such Indebtedness, or
any other material agreement or obligation, if a Material Adverse
Effect could reasonably be expected to result from such default;
or

 

9.8 Stop
Trade. At any time, an SEC stop trade order or NASDAQ market
trading suspension of the Common Stock of Parent shall be in effect
for five (5) consecutive days or five (5) days during a period of
ten (10) consecutive days, excluding in all cases a suspension of
all trading on a public market, provided that Borrower shall not
have been able to cure such trading suspension within thirty (30)
days of the notice thereof or list the Common Stock on another
public market within sixty (60) days of such notice.

 

SECTION 10. REMEDIES

 

10.1              General.
Upon and during the continuance of any one or more Events of
Default, (i) Agent may, and at the direction of the Required
Lenders shall, accelerate and demand payment of all or any part of
the Secured Obligations together with a Prepayment Charge and
declare them to be immediately due and payable (provided, that upon
the occurrence of an Event of Default of the type described
in Section
9.5, all of the Secured
Obligations shall automatically be accelerated and made due and
payable, in each case without any further notice or act), (ii)
Agent may, at its option, sign and file in any Borrower’s
name any and all collateral assignments, notices, control
agreements, security agreements and other documents it deems
necessary or appropriate to perfect or protect the repayment of the
Secured Obligations, and in furtherance thereof, each Borrower
hereby grants Agent an irrevocable power of attorney coupled with
an interest, and (iii) Agent may notify any of any Borrower’s
account debtors to make payment directly to Agent, compromise the
amount of any such account on such Borrower’s behalf and
endorse Agent’s name without recourse on any such payment for
deposit directly to Agent’s account. Agent may, and at the
direction of the Required Lenders shall, exercise all rights and
remedies with respect to the Collateral under the Loan Documents or
otherwise available to it under the UCC and other applicable law,
including the right to release, hold, sell, lease, liquidate,
collect, realize upon, or otherwise dispose of all or any part of
the Collateral and the right to occupy, utilize, process and
commingle the Collateral. All Agent’s rights and remedies
shall be cumulative and not exclusive.

 

10.2 Collection;
Foreclosure. Upon the occurrence and during the continuance of any
Event of Default, Agent may, and at the direction of the Required
Lenders shall, at any time or from time to time, apply, collect,
liquidate, sell in one or more sales, lease or otherwise dispose
of, any or all of the Collateral, in its then condition or
following any commercially reasonable preparation or processing, in
such order as Agent may elect. Any such sale may be made either at
public or private sale at its place of business or elsewhere. Each
Borrower agrees that any such public or private sale may occur upon
ten (10) calendar days’ prior written notice to Borrower
Representative. Agent may require any Borrower to assemble the
Collateral and make it available to Agent at a place designated by
Agent. The proceeds of any sale, disposition or other realization
upon all or any part of the Collateral shall be applied by Agent in
the following order of priorities:

 

 

32

 

 

First, to Agent and Lender in an amount sufficient
to pay in full Agent’s and Lender’s reasonable costs
and professionals’ and advisors’ fees and expenses as
described in Section
11.11;

 

Second, to Lender in an amount equal to the then
unpaid amount of the Secured Obligations (including principal,
interest, subject to increase in accordance with
Section
2.3), in such order and
priority as Agent may choose in its sole discretion;
and

 

Finally,
after the full and final payment in Cash of all of the Secured
Obligations (other than inchoate obligations), to any creditor
holding a junior Lien on the Collateral, or to Borrowers or each of
its representatives or as a court of competent jurisdiction may
direct.

 

Agent
shall be deemed to have acted reasonably in the custody,
preservation and disposition of any of the Collateral if it
complies with the obligations of a secured party under the
UCC.

 

10.3 No
Waiver. Agent shall be under no obligation to marshal any of the
Collateral for the benefit of any Borrower or any other Person, and
each Borrower expressly waives all rights, if any, to require Agent
to marshal any Collateral.

 

10.4 Shares.
Each Borrower recognizes that Agent may be unable to effect a
public sale of any or all the Shares, by reason of certain
prohibitions contained in federal securities laws and applicable
state securities laws or otherwise, and may be compelled to resort
to one or more private sales thereof to a restricted group of
purchasers which will be obliged to agree, among other things, to
acquire such securities for their own account for investment and
not with a view to the distribution or resale thereof. Each
Borrower acknowledge and agree that any such private sale may
result in prices and other terms less favorable than if such sale
were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a
commercially reasonable manner. Agent shall be under no obligation
to delay a sale of any of the Shares for the period of time
necessary to permit the issuer thereof to register such securities
for public sale under federal securities laws or under applicable
state securities laws, even if such issuer would agree to do
so.

 

10.5 Cumulative
Remedies. The rights, powers and remedies of Agent hereunder shall
be in addition to all rights, powers and remedies given by statute
or rule of law and are cumulative. The exercise of any one or more
of the rights, powers and remedies provided herein shall not be
construed as a waiver of or election of remedies with respect to
any other rights, powers and remedies of Agent. Only Agent can
exercise the remedies set forth in this Section 10
it being understood that no Lender can
act under this Section 10
except through the
Agent.

 

SECTION 11. MISCELLANEOUS

 

11.1              Severability.
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under such law, such provision shall be
ineffective only to the extent and duration of such prohibition or
invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Agreement.

 

11.2 Notice.
Except as otherwise provided herein, any notice, demand, request,
consent, approval, declaration, service of process or other
communication (including the delivery of Financial Statements) that
is required, contemplated, or permitted under the Loan Documents or
with respect to the subject matter hereof shall be in writing, and
shall be deemed to have been validly served, given, delivered, and
received upon the earlier of: (i) the day of transmission by
electronic mail or hand delivery or delivery by an overnight
express service or overnight mail delivery service; or
(ii) the third calendar day after deposit in the United States
of America mails, with proper first class postage prepaid, in each
case addressed to the party to be notified as follows:

 

 

33

 

 

(a) If
to Agent:

 

HERCULES
CAPITAL, INC.

 

Legal
Department

Attention:
Chief Legal Officer and Thomas Harris

400
Hamilton Avenue, Suite 310

Palo
Alto, CA 94301

email:
legal@herculestech.com; tharris@htgc.com

Telephone:
650-289-3060

 

(b) If
to Lender:

 

HERCULES
CAPITAL, INC.

 

Legal
Department

Attention:
Chief Legal Officer and Thomas Harris

400
Hamilton Avenue, Suite 310

Palo
Alto, CA 94301

email:
legal@herculestech.com; tharris@htgc.com

Telephone:
650-289-3060

 

(c) If
to Borrowers:

 

RumbleON,
Inc.

Attention:
Tom Aucamp

 

4521
Sharon Road

Suite
370

Charlotte,
NC 28211

email:
tom@rumbleon.com

Telephone:
704-445-4753

 

or
to such other address as each party may designate for itself by
like notice.

 

11.3 Entire
Agreement; Amendments.

 

(a) This
Agreement and the other Loan Documents constitute the entire
agreement and understanding of the parties hereto in respect of the
subject matter hereof and thereof, and supersede and replace in
their entirety any prior proposals, term sheets, non-disclosure or
confidentiality agreements, letters, negotiations or other
documents or agreements, whether written or oral, with respect to
the subject matter hereof or thereof (including Agent’s
proposal letter dated March 7, 2018 and the Non-Disclosure
Agreement).

 

(b) Neither
this Agreement, any other Loan Document, nor any terms hereof or
thereof may be amended, supplemented or modified except in
accordance with the provisions of this Section
11.3(b). The Required Lenders
and Borrowers party to the relevant Loan Document may, or, with the
written consent of the Required Lenders, Agent and Borrowers party
to the relevant Loan Document may, from time to time, (i) enter
into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions
to this Agreement or the other Loan Documents or changing in any
manner the rights of Lender or of Borrowers hereunder or thereunder
or (ii) waive, on such terms and conditions as the Required Lenders
or Agent, as the case may be, may specify in such instrument, any
of the requirements of this Agreement or the other Loan Documents
or any default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or
modification shall (A) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled
date of any amortization payment in respect of any Growth Capital
Term Loan Advance, reduce the stated rate of any interest or fee
payable hereunder, or extend the scheduled date of any payment
thereof, in each case without the written consent of each Lender
directly affected thereby; (B) eliminate or reduce the voting
rights of any Lender under this Section 11.3(b)
without the written consent of such
Lender; (C) reduce any percentage specified in the definition of
Required Lenders, consent to the assignment or transfer by
Borrowers of any of its rights and obligations under this Agreement
and the other Loan Documents, release all or substantially all of
the Collateral or release a Borrower (other than a Borrower that
has no material operations) from its obligations under the Loan
Documents, in each case without the written consent of all Lenders;
or (D) amend, modify or waive any provision of Section 11.17
without the written consent of Agent.
Any such waiver and any such amendment, supplement or modification
shall apply equally to each Lender and shall be binding upon
Borrowers, Lender, Agent and all future holders of the
Loans.

 

 

34

 

 

11.4 No
Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.

 

11.5 No
Waiver. The powers conferred upon Agent and Lender by this
Agreement are solely to protect its rights hereunder and under the
other Loan Documents and its interest in the Collateral and shall
not impose any duty upon Agent or Lender to exercise any such
powers. No omission or delay by Agent or Lender at any time to
enforce any right or remedy reserved to it, or to require
performance of any of the terms, covenants or provisions hereof by
Borrowers at any time designated, shall be a waiver of any such
right or remedy to which Agent or Lender is entitled, nor shall it
in any way affect the right of Agent to enforce such provisions
thereafter.

 

11.6 Survival.
All agreements, representations and warranties contained in this
Agreement and the other Loan Documents or in any document delivered
pursuant hereto or thereto shall be for the benefit of Agent and
Lender and shall survive the execution and delivery of this
Agreement. Section 6.3
shall survive the termination of this
Agreement.

 

11.7 Successors
and Assigns. The provisions of this Agreement and the other Loan
Documents shall inure to the benefit of and be binding on each
Borrower and its permitted assigns (if any). No Borrower shall
assign its obligations under this Agreement or any of the other
Loan Documents without Agent’s express prior written consent,
and any such attempted assignment shall be void and of no effect.
Agent and Lender may assign, transfer, or endorse its rights
hereunder and under the other Loan Documents without prior notice
to Borrowers, and all of such rights shall inure to the benefit of
Agent’s and Lender’s successors and assigns; provided
that as long as no Event of Default has occurred and is continuing,
neither Agent nor any Lender may assign, transfer or endorse its
rights hereunder or under the Loan Documents to any party that is a
direct competitor of Borrowers (as reasonably determined by Agent),
it being acknowledged that in all cases, any transfer to an
Affiliate of any Lender or Agent shall be allowed.

 

11.8 Governing
Law. This Agreement and the other Loan Documents have been
negotiated and delivered to Agent and Lender in the State of
California, and shall have been accepted by Agent and Lender in the
State of California. Payment to Agent and Lender by Borrowers of
the Secured Obligations is due in the State of California. This
Agreement and the other Loan Documents shall be governed by, and
construed and enforced in accordance with, the laws of the State of
California, excluding conflict of laws principles that would cause
the application of laws of any other jurisdiction.

 

11.9 Consent
to Jurisdiction and Venue. All judicial proceedings (to the extent
that the reference requirement of Section 11.10
is not applicable) arising in or under
or related to this Agreement or any of the other Loan Documents may
be brought in any state or federal court located in the State of
California. By execution and delivery of this Agreement, each party
hereto generally and unconditionally: (a) consents to
nonexclusive personal jurisdiction in Santa Clara County, State of
California; (b) waives any objection as to jurisdiction or
venue in Santa Clara County, State of California; (c) agrees
not to assert any defense based on lack of jurisdiction or venue in
the aforesaid courts; and (d) irrevocably agrees to be bound
by any judgment rendered thereby in connection with this Agreement
or the other Loan Documents. Service of process on any party hereto
in any action arising out of or relating to this Agreement shall be
effective if given in accordance with the requirements for notice
set forth in Section
11.2, and shall be deemed
effective and received as set forth in Section
11.2. Nothing herein shall
affect the right to serve process in any other manner permitted by
law or shall limit the right of either party to bring proceedings
in the courts of any other jurisdiction.

 

 

35

 

 

11.10 Mutual
Waiver of Jury Trial / Judicial Reference.

 

(a) Because
disputes arising in connection with complex financial transactions
are most quickly and economically resolved by an experienced and
expert Person and the parties wish applicable state and federal
laws to apply (rather than arbitration rules), the parties desire
that their disputes be resolved by a judge applying such applicable
laws. EACH OF BORROWERS, AGENT AND LENDER SPECIFICALLY WAIVES ANY
RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM,
CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM
(COLLECTIVELY, “CLAIMS”)
ASSERTED BY BORROWERS AGAINST AGENT, LENDER OR THEIR RESPECTIVE
ASSIGNEE OR BY AGENT, LENDER OR THEIR RESPECTIVE ASSIGNEE AGAINST A
BORROWER. This waiver extends to all such Claims, including Claims
that involve Persons other than Agent, Borrowers and Lender; Claims
that arise out of or are in any way connected to the relationship
among Borrowers, Agent and Lender; and any Claims for damages,
breach of contract, tort, specific performance, or any equitable or
legal relief of any kind, arising out of this Agreement, any other
Loan Document.

 

(b) If
the waiver of jury trial set forth in Section
11.10(a) is ineffective or
unenforceable, the parties agree that all Claims shall be resolved
by reference to a private judge sitting without a jury, pursuant to
Code of Civil Procedure Section 638, before a mutually acceptable
referee or, if the parties cannot agree, a referee selected by the
Presiding Judge of the Santa Clara County, California. Such
proceeding shall be conducted in Santa Clara County, California,
with California rules of evidence and discovery applicable to such
proceeding.

 

(c) In
the event Claims are to be resolved by judicial reference, either
party may seek from a court identified in Section
11.9, any prejudgment order,
writ or other relief and have such prejudgment order, writ or other
relief enforced to the fullest extent permitted by law
notwithstanding that all Claims are otherwise subject to resolution
by judicial reference.

 

11.11 Professional
Fees. Each Borrower promises to pay Agent’s fees and expenses
necessary to finalize the loan documentation, including but not
limited to reasonable attorneys’ fees, UCC searches, filing
costs, and other miscellaneous expenses. In addition, each Borrower
promises to pay any and all reasonable attorneys’ and other
reasonable out of pocket professionals’ fees and expenses
incurred by Agent after the Closing Date in connection with or
related to: (a) the Loan; (b) the administration, collection, or enforcement of the
Loan; (c) the amendment or modification of the Loan Documents;
(d) any waiver, consent, release, or termination under the
Loan Documents; (e) the protection, preservation, audit, field
exam, sale, lease, liquidation, or disposition of Collateral or the
exercise of remedies with respect to the Collateral; (f) any
legal, litigation, administrative, arbitration, or out of court
proceeding in connection with or related to a Borrower or the
Collateral, and any appeal or review thereof; and (g) any
bankruptcy, restructuring, reorganization, assignment for the
benefit of creditors, workout, foreclosure, or other action related
to a Borrower, the Collateral, the Loan Documents, including
representing Agent in any adversary proceeding or contested matter
commenced or continued by or on behalf of a Borrower’s
estate, and any appeal or review thereof.

 

 

36

 

 

11.12 Confidentiality.
Agent and Lender acknowledge that certain items of Collateral and
information provided to Agent and Lender by a Borrower are
confidential and proprietary information of Borrowers, if and to
the extent such information either (i) is marked as confidential by
such Borrower at the time of disclosure, or (ii) should reasonably
be understood to be confidential (the “Confidential
Information”).
Accordingly, Agent and Lender agree that any Confidential
Information it has obtained and may obtain in connection with this
Agreement and the Loan Documents shall not be disclosed to any
other Person or entity in any manner whatsoever, in whole or in
part, without the prior written consent of Borrowers, except that
Agent and Lender may disclose any such information: (a) to its
own directors, officers, employees, accountants, counsel and other
professional advisors and to its Affiliates if Agent or Lender in
their sole discretion determines that any such party should have
access to such information in connection with such party’s
responsibilities in connection with the Loan or this Agreement and,
provided that such recipient of such Confidential Information
either (i) agrees to be bound by the confidentiality provisions of
this paragraph or (ii) is otherwise subject to confidentiality
restrictions that reasonably protect against the disclosure of
Confidential Information; (b) if such information is generally
available to the public; (c) if required or appropriate in any
report, statement or testimony submitted to any governmental
authority having or claiming to have jurisdiction over Agent or
Lender; (d) if required or appropriate in response to any
summons or subpoena or in connection with any litigation, to the
extent permitted or deemed advisable by Agent’s or
Lender’s counsel; (e) to comply with any legal
requirement or law applicable to Agent or Lender; (f) to the
extent reasonably necessary in connection with the exercise of any
right or remedy under any Loan Document, including Agent’s
sale, lease, or other disposition of Collateral after default;
(g) to any participant or assignee of Agent or Lender or any
prospective participant or assignee; provided, that such
participant or assignee or prospective participant or assignee
agrees in writing to be bound by this Section prior to disclosure;
or (h) otherwise with the prior consent of any Borrower;
provided, that any disclosure made in violation of this Agreement
shall not affect the obligations of any Borrower or any of its
Affiliates or any guarantor under this Agreement or the other Loan
Documents. Agent and Lender are aware of their obligations with
respect to material non-public Confidential Information of a
publicly traded company and both Agent and Lender agree on behalf
of themselves and their Affiliates that they will not engage in
transactions in or relating to the securities of the Parent while
in possession of material non-public Confidential Information.
Agent’s and Lender’s obligations under this
Section
11.12 shall supersede all of
their respective obligations under the Non-Disclosure
Agreement.

 

11.13 Assignment
of Rights. Each Borrower acknowledges and understands that Agent or
Lender may, subject to Section
11.7, sell and assign all or
part of its interest hereunder and under the Loan Documents to any
Person or entity (an “Assignee”).
After such assignment the term “Agent”
or “Lender”
as used in the Loan Documents shall mean and include such Assignee,
and such Assignee shall be vested with all rights, powers and
remedies of Agent and Lender hereunder with respect to the interest
so assigned; but with respect to any such interest not so
transferred, Agent and Lender shall retain all rights, powers and
remedies hereby given. No such assignment by Agent or Lender shall
relieve any Borrower of any of its obligations hereunder. Lender
agrees that in the event of any transfer by it of the Note(s)(if
any), it will endorse thereon a notation as to the portion of the
principal of the Note(s), which shall have been paid at the time of
such transfer and as to the date to which interest shall have been
last paid thereon.

 

11.14 Revival
of Secured Obligations. This Agreement and the Loan Documents shall
remain in full force and effect and continue to be effective if any
petition is filed by or against any Borrower for liquidation or
reorganization, if any Borrower becomes insolvent or makes an
assignment for the benefit of creditors, if a receiver or trustee
is appointed for all or any significant part of any
Borrower’s assets, or if any payment or transfer of
Collateral is recovered from Agent or Lender. The Loan Documents
and the Secured Obligations and Collateral security shall continue
to be effective, or shall be revived or reinstated, as the case may
be, if at any time payment and performance of the Secured
Obligations or any transfer of Collateral to Agent, or any part
thereof is rescinded, avoided or avoidable, reduced in amount, or
must otherwise be restored or returned by, or is recovered from,
Agent, Lender or by any obligee of the Secured Obligations, whether
as a “voidable preference,” “fraudulent
conveyance,” or otherwise, all as though such payment,
performance, or transfer of Collateral had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced,
avoided, avoidable, restored, returned, or recovered, the Loan
Documents and the Secured Obligations shall be deemed, without any
further action or documentation, to have been revived and
reinstated except to the extent of the full, final, and
indefeasible payment to Agent or Lender in Cash.

 

 

37

 

 

11.15 Counterparts.
This Agreement and any amendments, waivers, consents or supplements
hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which
when so delivered shall be deemed an original, but all of which
counterparts shall constitute but one and the same
instrument.

 

11.16 No
Third Party Beneficiaries. No provisions of the Loan Documents are
intended, nor will be interpreted, to provide or create any
third-party beneficiary rights or any other rights of any kind in
any Person other than Agent, Lender and Borrowers unless
specifically provided otherwise herein, and, except as otherwise so
provided, all provisions of the Loan Documents will be personal and
solely among Agent, Lender and Borrowers.

 

11.17 Agency.

 

(a) Lender
hereby irrevocably appoints Hercules Capital, Inc. to act on its
behalf as Agent hereunder and under the other Loan Documents and
authorizes Agent to take such actions on its behalf and to exercise
such powers as are delegated to Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably
incidental thereto.

 

(b) Lender
agrees to indemnify Agent in its capacity as such (to the extent
not reimbursed by Borrowers and without limiting the obligation of
Borrowers to do so), according to its respective Growth Capital
Term Commitment percentages (based upon the total outstanding
Growth Capital Term Commitments) in effect on the date on which
indemnification is sought under this Section
11.17, from and against any and
all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time be imposed on, incurred by or
asserted against Agent in any way relating to or arising out of,
this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or
omitted by Agent under or in connection with any of the foregoing;
The agreements in this Section shall survive the payment of the
Loans and all other amounts payable hereunder.

 

(c) Agent
in Its Individual Capacity. The Person serving as Agent hereunder
shall have the same rights and powers in its capacity as a Lender
as any other Lender and may exercise the same as though it were not
Agent and the term “Lender” shall, unless otherwise
expressly indicated or unless the context otherwise requires,
include each such Person serving as Agent hereunder in its
individual capacity.

 

(d) Exculpatory
Provisions. Agent shall have no duties or obligations except those
expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, Agent shall
not:

 

(i)

be
subject to any fiduciary or other implied duties, regardless of
whether any default or any Event of Default has occurred and is
continuing;

 

(ii)

have
any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that
Agent is required to exercise as directed in writing by Lender,
provided that Agent shall not be required to take any action that,
in its opinion or the opinion of its counsel, may expose Agent to
liability or that is contrary to any Loan Document or applicable
law; and

 

(iii)

except
as expressly set forth herein and in the other Loan Documents, have
any duty to disclose, and Agent shall not be liable for the failure
to disclose, any information relating to Borrowers or any of its
Affiliates that is communicated to or obtained by any Person
serving as Agent or any of its Affiliates in any
capacity.

 

 

38

 

 

(e) Agent
shall not be liable for any action taken or not taken by it (i)
with the consent or at the request of Lender or as Agent shall
believe in good faith shall be necessary, under the circumstances
or (ii) in the absence of its own gross negligence or willful
misconduct.

 

(f) Agent
shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document,
(ii) the contents of any certificate, report or other document
delivered hereunder or thereunder or in connection herewith or
therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein
or therein or the occurrence of any default or Event of Default,
(iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement,
instrument or document or (v) the satisfaction of any condition set
forth in Section 4
or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to
Agent.

 

(g) Reliance
by Agent. Agent may rely, and shall be fully protected in acting,
or refraining to act, upon, any resolution, statement, certificate,
instrument, opinion, report, notice, request, consent, order, bond
or other paper or document that it has no reason to believe to be
other than genuine and to have been signed or presented by the
proper party or parties or, in the case of cables, telecopies and
telexes, to have been sent by the proper party or parties. In the
absence of its gross negligence or willful misconduct, Agent may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to Agent and conforming to the
requirements of the Loan Agreement or any of the other Loan
Documents. Agent may consult with counsel, and any opinion or legal
advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, not taken or suffered by
Agent hereunder or under any Loan Documents in accordance
therewith. Agent shall have the right at any time to seek
instructions concerning the administration of the Collateral from
any court of competent jurisdiction. Agent shall not be under any
obligation to exercise any of the rights or powers granted to Agent
by this Agreement, the Loan Agreement and the other Loan Documents
at the request or direction of Lenders unless Agent shall have been
provided by Lender with adequate security and indemnity against the
costs, expenses and liabilities that may be incurred by it in
compliance with such request or direction.

 

11.18 Publicity.
None of the parties hereto nor any of its respective member
businesses and Affiliates shall, without the other parties’
prior written consent (which shall not be unreasonably withheld or
delayed), publicize or use (a) the other party’s name
(including a brief description of the relationship among the
parties hereto), logo or hyperlink to such other parties’ web
site, separately or together, in written and oral presentations,
advertising, promotional and marketing materials, client lists,
public relations materials or on its web site (together, the
“Publicity
Materials”); (b) the
names of officers of such other parties in the Publicity Materials;
and (c) such other parties’ name, trademarks, servicemarks in
any news or press release concerning such party; provided however,
notwithstanding anything to the contrary herein, no such consent
shall be required (i) to the extent necessary or customary to
comply with the requests of any regulators, legal requirements or
laws applicable to such party (including all disclosure
requirements of the Parent pursuant to the securities laws), or
pursuant to any listing agreement with any national securities
exchange and (ii) to comply with Section
11.12.

 

11.19 Multiple
Borrowers.

 

(a) Borrowers’
Agent. Each of Borrowers hereby irrevocably appoints Borrower
Representative as its agent, attorney-in-fact and legal
representative for all purposes, including requesting disbursement
of the Growth Capital Term Loan Advance and receiving account
statements and other notices and communications to Borrowers (or
any of them) from Agent or any Lender. Agent may rely, and shall be
fully protected in relying, on any request for the Growth Capital
Term Loan Advance, disbursement instruction, report, information or
any other notice or communication made or given by Borrower
Representative, whether in its own name or on behalf of one or more
of the other Borrowers, and Agent shall not have any obligation to
make any inquiry or request any confirmation from or on behalf of
any other Borrower as to the binding effect on it of any such
request, instruction, report, information, other notice or
communication, nor shall the joint and several character of
Borrowers’ obligations hereunder be affected
thereby.

 

 

39

 

 

(b) Waivers.
Each Borrower hereby waives: (i) any right to require Agent to
institute suit against, or to exhaust its rights and remedies
against, any other Borrower or any other Person, or to proceed
against any property of any kind which secures all or any part of
the Secured Obligations, or to exercise any right of offset or
other right with respect to any reserves, credits or deposit
accounts held by or maintained with Agent or any Indebtedness of
Agent or any Lender to any other Borrower, or to exercise any other
right or power, or pursue any other remedy Agent or any Lender may
have; (ii) any defense arising by reason of any disability or other
defense (other than performance) of any other Borrower or any
guarantor or any endorser, co-maker or other Person, or by reason
of the cessation from any cause whatsoever of any liability of any
other Borrower or any guarantor or any endorser, co-maker or other
Person (other than because of performance), with respect to all or
any part of the Secured Obligations, or by reason of any act or
omission of Agent or others which directly or indirectly results in
the discharge or release of any other Borrower or any guarantor or
any other Person or any Secured Obligations or any security
therefor, whether by operation of law or otherwise; (iii) any
defense arising by reason of any failure of Agent to obtain,
perfect, maintain or keep in force any Lien on, any property of any
Borrower or any other Person; (iv) any defense based upon or
arising out of any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, liquidation or dissolution
proceeding commenced by or against any other Borrower or any
guarantor or any endorser, co-maker or other Person, including
without limitation any discharge of, or bar against collecting, any
of the Secured Obligations (including without limitation any
interest thereon), in or as a result of any such proceeding. Until
all of the Secured Obligations have been paid, performed, and
discharged in full, nothing shall discharge or satisfy the
liability of any Borrower hereunder except the full performance and
payment of all of the Secured Obligations. If any claim is ever
made upon Agent for repayment or recovery of any amount or amounts
received by Agent in payment of or on account of any of the Secured
Obligations, because of any claim that any such payment constituted
a preferential transfer or fraudulent conveyance, or for any other
reason whatsoever, and Agent repays all or part of said amount by
reason of any judgment, decree or order of any court or
administrative body having jurisdiction over Agent or any of its
property, or by reason of any settlement or compromise of any such
claim effected by Agent with any such claimant (including without
limitation the any other Borrower), then and in any such event,
each Borrower agrees that any such judgment, decree, order,
settlement and compromise shall be binding upon such Borrower,
notwithstanding any revocation or release of this Agreement or the
cancellation of any note or other instrument evidencing any of the
Secured Obligations, or any release of any of the Secured
Obligations, and each Borrower shall be and remain liable to Agent
and Lender under this Agreement for the amount so repaid or
recovered, to the same extent as if such amount had never
originally been received by Agent or any Lender, and the provisions
of this sentence shall survive, and continue in effect,
notwithstanding any revocation or release of this Agreement. Until
payment in full of the Secured Obligations (other than obligations
that survive the termination of the Loan Documents) each Borrower
hereby expressly and unconditionally waives all rights of
subrogation, reimbursement and indemnity of every kind against any
other Borrower, and all rights of recourse to any assets or
property of any other Borrower, and all rights to any collateral or
security held for the payment and performance of any Secured
Obligations, including (but not limited to) any of the foregoing
rights which a Borrower may have under any present or future
document or agreement with any other Borrower or other Person, and
including (but not limited to) any of the foregoing rights which
any Borrower may have under any equitable doctrine of subrogation,
implied contract, or unjust enrichment, or any other equitable or
legal doctrine.

 

 

40

 

 

(c) Consents.
Each Borrower hereby consents and agrees that, without notice to or
by such Borrower and without affecting or impairing in any way the
obligations or liability of such Borrower hereunder, Agent may,
from time to time before or after revocation of this Agreement, do
any one or more of the following in its sole and absolute
discretion: (i) accept partial payments of, compromise or settle,
renew, extend the time for the payment, discharge, or performance
of, refuse to enforce, and release all or any parties to, any or
all of the Secured Obligations; (ii) grant any other indulgence to
any Borrower or any other Person in respect of any or all of the
Secured Obligations or any other matter; (iii) accept, release,
waive, surrender, exchange, modify, impair, or extend the time for
the performance, discharge, or payment of, any and all property of
any kind securing any or all of the Secured Obligations or any
guaranty of any or all of the Secured Obligations, or on which
Agent at any time may have a Lien, or refuse to enforce its rights
or make any compromise or settlement or agreement therefor in
respect of any or all of such property; (iv) substitute or add, or
take any action or omit to take any action which results in the
release of, any one or more other Borrowers or any endorsers or
guarantors of all or any part of the Secured Obligations,
including, without limitation one or more parties to this
Agreement, regardless of any destruction or impairment of any right
of contribution or other right of such Borrower; (v) apply any sums
received from any other Borrower, any guarantor, endorser, or
co-signer, or from the disposition of any Collateral or security,
to any Indebtedness whatsoever owing from such Person or secured by
such Collateral or security, in such manner and order as Agent
determines in its sole discretion (subject to the terms of this
Agreement), and regardless of whether such Indebtedness is part of
the Secured Obligations, is secured, or is due and payable. Each
Borrower consents and agrees that Agent shall be under no
obligation to marshal any assets in favor of Borrower, or against
or in payment of any or all of the Secured Obligations. Each
Borrower further consents and agrees that Agent shall have no
duties or responsibilities whatsoever with respect to any property
securing any or all of the Secured Obligations. Without limiting
the generality of the foregoing, Agent shall have no obligation to
monitor, verify, audit, examine, or obtain or maintain any
insurance with respect to, any property securing any or all of the
Secured Obligations.

 

(d) Independent
Liability. Each Borrower hereby agrees that one or more successive
or concurrent actions may be brought hereon against such Borrower,
in the same action in which any other Borrower may be sued or in
separate actions, as often as deemed advisable by Agent. Each
Borrower is fully aware of the financial condition of each other
Borrower and is executing and delivering this Agreement based
solely upon its own independent investigation of all matters
pertinent hereto, and such Borrower is not relying in any manner
upon any representation or statement of Agent or any Lender with
respect thereto. Each Borrower represents and warrants that it is
in a position to obtain, and each Borrower hereby assumes full
responsibility for obtaining, any additional information concerning
any other Borrower’s financial condition and any other matter
pertinent hereto as such Borrower may desire, and such Borrower is
not relying upon or expecting Agent to furnish to it any
information now or hereafter in Agent’s possession concerning
the same or any other matter.

 

(e) Subordination.
All Indebtedness of any Borrower now or hereafter arising held by
another Borrower is subordinated to the Secured Obligations and any
Borrower holding the Indebtedness shall take all actions reasonably
requested by Agent to effect, to enforce and to give notice of such
subordination.

 

[REMAINDER OF SIGNATURE PAGE INTENTIONALLY LEFT BLANK]

 

 

41

 

[SIGNATURE PAGE TO LOAN AND SECURITY AGREEMENT]

 

IN
WITNESS WHEREOF, Borrowers, Agent and Lender have duly executed and
delivered this Loan and Security Agreement as of the day and year
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______________

 

 

 

 

 

Accepted in Palo Alto, California:

 

AGENT:

 

HERCULES
CAPITAL, INC.

 

Signature:        

_/s/ Zhuo Huang
_________

 

Print
Name:      

_Zhuo Huang
__________

 

Title:    

_Associate General
Counsel_

 

 

LENDER:

 

HERCULES
CAPITAL, INC.

 

Signature:        

_/s/ Zhuo Huang
_________

 

Print
Name:      

_ Zhuo Huang
__________

 

Title:       

_Associate General
Counsel_

 

 

 

 

Table of Exhibits and Schedules

 

Exhibit A: 

Advance
Request

 

Attachment
to Advance Request

 

Exhibit
B:           

Term
Note

 

Exhibit
C:       

Name,
Locations, and Other Information for Borrowers

 

Exhibit
D:      

Borrowers’
Patents, Trademarks, Copyrights and Licenses

 

Exhibit
E:    

Borrowers’
Deposit Accounts and Investment Accounts

 

Exhibit
F:       

Compliance
Certificate

 

Exhibit G:  

Joinder
Agreement

 

Exhibit
H:   

ACH
Debit Authorization Agreement

 

Schedule
1.1                

Commitments

Schedule
5.14        

Capitalization

 

 

 

 

EXHIBIT A

 

ADVANCE REQUEST

 

To:            

Agent:                                                                            

Date:                                                    

 

Hercules Capital, Inc. (the
“Agent”)

 

400
Hamilton Avenue, Suite 310

 

Palo
Alto, CA 94301

 

email:
legal@herculestech.com; tharris@htgc.com

 

Attn:
Legal Department; Thomas Haris

 

Re: Loan and Security Agreement dated as of April 30, 2018 (as
amended, restated, supplemented or otherwise modified from time to
time, the “Agreement”),
by and among RUMBLEON, INC., a Nevada corporation, NEXTGEN PRO,
LLC, a Delaware limited liability company, RMBL MISSOURI, LLC, a
Delaware limited liability company, RMBL TEXAS, LLC, a Delaware
limited liability company, and each of their Qualified Subsidiaries
from time to time party to the Loan Agreement (individually, each,
a “Borrower”,
and collectively, “Borrowers”),
the several banks and other financial institutions or entities from
time to time parties to this Agreement (collectively,
“Lender”)
and HERCULES CAPITAL, INC., a Maryland corporation, in its capacity
as administrative agent and collateral agent for Lender (in such
capacity, “Agent”).

 

Borrower Representative, on behalf of Borrowers, hereby requests
Agent to cause Lender to make an Advance in the amount of
_____________________ Dollars ($________________) on
______________, _____ (the “Advance
Date”) pursuant to the
Agreement. Capitalized words and other terms used but not otherwise
defined herein are used with the same meanings as defined in the
Agreement.

 

Please:

 

(a)            

Issue a check payable to a
Borrower                  

☐

 

or

 

(b)            

Wire Funds to a Borrower’s
account         

☐

 

Bank:                           

Address:                           

 

ABA
Number:                           

Account
Number:                        

Account
Name:                                                                

Contact
Person:                                                                

Phone
Number:                                                                

To Verify Wire
Info:                                                                

Email
address:                           

 

Borrower Representative represents that the
conditions precedent to the Advance set forth in the Agreement are
satisfied and shall be satisfied upon the making of such Advance,
including but not limited to: (i) that no event that has had
or could reasonably be expected to have a Material Adverse Effect
has occurred and is continuing; (ii) that the representations
and warranties set forth in the Agreement are true and correct in
all material respects on and as of the Advance Date with the same
effect as though made on and as of such date, except to the extent
such representations and warranties expressly relate to an earlier
date; (iii) that each Borrower is in compliance with all the
terms and provisions set forth in each Loan Document on its part to
be observed or performed in all material respects; and
(iv) that as of the Advance Date, no fact or condition exists
that constitutes (or could,
with the passage of time, the giving of notice, or both reasonably
be expected to constitute) an Event of Default under the Loan
Documents. Borrower Representative understands and acknowledges
that Agent has the right to review the financial information
supporting this representation and, based upon such review, Lender
may decline to fund the requested Advance.

 

 

 

 

Borrower
Representative hereby represents that each Borrower’s
jurisdiction of organization, organizational form, legal name and
locations have not changed since the date of the Agreement or, if
the Attachment to this Advance Request is completed, are as set
forth in the Attachment to this Advance Request.

 

Borrower Representative agrees to notify Agent
promptly before the funding of the Loan if any of the matters which
have been represented above shall not be true and correct on the
Advance Date and if Agent has
received no such notice before the Advance Date then the statements
set forth above shall be deemed to have been made and shall be
deemed to be true and correct as of the Advance
Date.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

 

 

 

 

 

[SIGNATURE PAGE TO ADVANCE REQUEST]

 

This
Advance Request is duly executed as of the date set forth
above.

 

RUMBLEON,
INC.

 

SIGNATURE:                                                               

 

TITLE:                       

 

PRINT
NAME:                                 

 

 

 

 

ATTACHMENT TO ADVANCE REQUEST

 

Dated: _______________________

 

Borrower Representative hereby represents and warrants to Agent, on
behalf of each Borrower, that each of Borrowers’ current
names and organizational status is as follows:

 

	

[Name:

	

RumbleON, Inc.

	

Type of organization:

	

corporation

	

State of organization:

	

Nevada

	

Organization file number:

	

Business ID - NV20131625617

	

Name:

	

NextGen Pro, LLC

	

Type of organization:

	

limited liability company

	

State of organization:

	

Delaware

	

Organization file number:

	

File #6297691

	

Name:

	

RMBL Missouri, LLC

	

Type of organization:

	

limited liability company

	

State of organization:

	

Delaware

	

Organization file number:

	

File # 6326654

	

Name:

	

RMBL
Texas, LLC

	

Type
of organization:

	

limited
liability company

	

State
of organization:

	

Delaware

	

Organization
file number:

	

File #6681648] 1

Borrower Representative hereby represents and warrants to Agent, on
behalf of Borrowers, that the street addresses, cities, states and
postal codes of each Borrower’s current locations (in
addition to those leased and bailee locations listed on Exhibit C
to the Agreement) are as follows:

 

[1431
Greenway Drive

Suite
775

Irving,
TX 75038

 

RumbleOn,
Inc.

4521
Sharon Road

Suite
370

Charlotte,
North Carolina 28211

 

 

RMBL
Missouri, LLC

2100
E Outer Road

Scott City, MO. 63780]2

 

1
Update for Tranches II, III and IV as needed

2
Update for Tranches II, III and IV as needed

 

 

 

 

EXHIBIT B

 

SECURED TERM PROMISSORY NOTE

 

	

$[______________]

 

	
 

	

Advance Date: [____________]

 

	
 

	
 

	

Maturity Date: [_____________], subject to extension in accordance
with the terms of the Loan Agreement

 

 

FOR VALUE RECEIVED, each of RUMBLEON, INC., a
Nevada corporation, NEXTGEN PRO, LLC, a Delaware limited liability
company, RMBL MISSOURI, LLC, a Delaware limited liability company,
RMBL TEXAS, LLC, a Delaware limited liability company, and each of
their Qualified Subsidiaries from time to time party to the Loan
Agreement (individually, each, a “Borrower”,
and collectively, “Borrowers”),
from time to time, hereby promises to pay to the order of Hercules
Capital, Inc., a Delaware limited partnership or the holder of this
Secured Term Promissory Note (the “Lender”)
at 400 Hamilton Avenue, Suite 310, Palo Alto, CA 94301 or such
other place of payment as the holder of this Secured Term
Promissory Note (this “Term
Note”) may specify from
time to time in writing, in lawful money of the United States of
America, the principal amount of $[_____________] or such other
principal amount as Lender has advanced to Borrowers, together with
interest at a rate as set forth in Section 2.1(c)
of the Loan Agreement based upon a
year consisting of 360 days, with interest computed daily based on
the actual number of days in each month.

 

This Term Note is the Term Note referred to in,
and is executed and delivered in connection with, that certain Loan
and Security Agreement dated as of April 30, 2018, by and among
Borrowers, Hercules Capital, Inc., a Maryland corporation (the
“Agent”)
and the several banks and other financial institutions or entities
from time to time party thereto as lender (as the same may from
time to time be amended, modified or supplemented in accordance
with its terms, the “Loan
Agreement”), and is
entitled to the benefit and security of the Loan Agreement and the
other Loan Documents (as defined in the Loan Agreement), to which
reference is made for a statement of all of the terms and
conditions thereof. All payments shall be made in accordance with
the Loan Agreement. All terms defined in the Loan Agreement shall
have the same definitions when used herein, unless otherwise
defined herein. An Event of Default under the Loan Agreement shall
constitute a default under this Term Note.

 

Each
Borrower waives presentment and demand for payment, notice of
dishonor, protest and notice of protest under the UCC or any
applicable law. Each Borrower agrees to make all payments under
this Term Note without setoff, recoupment or deduction and
regardless of any counterclaim or defense. Borrowers shall be
jointly and severally liable with respect to all Secured
Obligations pursuant to this Term Note and the Loan Agreement. This
Term Note has been negotiated and delivered to Lender and is
payable in the State of California. This Term Note shall be
governed by and construed and enforced in accordance with, the laws
of the State of California, excluding any conflicts of law rules or
principles that would cause the application of the laws of any
other jurisdiction.

 

 

 

 

[SIGNATURE PAGE TO TERM NOTE]

 

The
undersigned have duly executed this Term Note.

 

	
 

	
 

RUMBLEON,
INC.

 

SIGNATURE:                                                               

TITLE:                       

PRINT
NAME:               

 

NEXTGEN
PRO, LLC

 

SIGNATURE:                                                               

TITLE:                       

PRINT
NAME:                

 

RMBL
MISSOURI, LLC

 

SIGNATURE:                                                               

TITLE:                       

PRINT
NAME:               

 

RMBL
TEXAS, LLC

 

SIGNATURE:                                                               

TITLE:                       

PRINT
NAME:                 

 

 

 

 

EXHIBIT C

 

NAME, LOCATIONS, AND OTHER INFORMATION FOR BORROWER

 

1.

Borrower
Representative hereby represents and warrants to Agent, on behalf
of each Borrower, that each of Borrowers’ current names and
organizational status is as follows:

 

	

Name:

	

RumbleON, Inc.

	

Type of organization:

	

corporation

	

State of organization:

	

Nevada

	

Organization file number:

	

Business ID - NV20131625617

	

Fiscal year end:

	

31-Dec

	

Federal taxpayer identification number:

	

46-3951329

	

Former Name(s):

	

Smart Server, Inc. (10/24/2013-2/13/2017)

	
 

	
 

	

Name:

	

NextGen Pro, LLC

	

Type of organization:

	

limited liability company

	

State of organization:

	

Delaware

	

Organization file number:

	

File #6297691

	

Fiscal year end:

	

31-Dec

	

Federal taxpayer identification number:

	

35-2584798

	

Former Name(s):

	

N/A

	
 

	
 

	

Name:

	

RMBL Missouri, LLC

	

Type of organization:

	

limited liability company

	

State of organization:

	

Delaware

	

Organization file number:

	

File # 6326654

	

Fiscal year end:

	

31-Dec

	

Federal taxpayer identification number:

	

81-5484099

	

Former Name(s):

	

LBMR Dealer MO, LLC (2/24/2017-2/28/2017)

	
 

	
 

	

Name:

	

RMBL Texas, LLC

	

Type of organization:

	

limited liability company

	

State of organization:

	

Delaware

	

Organization file number:

	

File #6681648

	

Fiscal year end:

	

31-Dec

	

Federal taxpayer identification number:

	

82-4802484

	

Former Name(s):

	

N/A

 

2.

Borrower Representative hereby
represents and warrants to
Agent, on behalf of Borrowers, that each Borrower’s chief
executive office is located at the following
location:

 

1431
Greenway Drive

Suite
775

Irving,
TX. 75038

 

 

 

 

3.

Borrower
Representative hereby represents and warrants to Agent, on behalf
of Borrowers, that the Borrowers also utilize the following
locations:

 

RumbleOn,
Inc.

4521
Sharon Road

Suite
370

Charlotte,
North Carolina 28211

 

 

RMBL
Missouri, LLC

2100
E Outer Road

Scott
City, MO. 63780

 

 

Bailee
locations as set forth on Schedule attached hereto.

 

 

 

 

 

SCHEDULE OF BAILEE LOCATIONS

 

	

Bailee

 

	

Locations

 

	

ADESA, INC.

 

	

Adesa Golden Gate

18501 W. Stanford Road

Tracy, CA 95377

 

Adesa Kansas City

15511 Adesa Drive

Belton, MO 64012

	

COPART, INC.

 

	

All locations owned or operated by Copart in which vehicles owned
by Borrowers, regardless of whether there is an existing lien on
such vehicle, are located.

The current list of all Copart North American locations can be
found at:

https://www.copart.com/locations/?region=NORTH_AMERICA

 

	

CYCLEEXPRESS, LLC (D/B/A NPA AUCTIONS)

 

	

NPA Atlanta

4800 North Commerce Drive, Suite 200

East Point, GA 30344

 

NPA Cincinnati

10132 Business Center Drive

Cincinnati, OH 45246

 

NPA Dallas

900 Gerault Road

Flower Mound, TX 75028

 

NPA Denver

8300 Blakeland Drive

Littleton, CO 80125

 

NPA Philadelphia

2578 Pearl Buck Road

Bristol, PA 19007

 

NPA San Diego

12400 Stowe Drive

Poway, CA 92064

	

LABRIER INVESTMETNS, LLC

 

	

3258 South East Outer Road South

Scott City, MO 63780

	

MANHEIM, INC.

 

	

Manhiem Indy

3110 S. Post Road

Indianapolis IN 46239

Manhiem Statesville

145 Auction Lane

Statesville, NC 28625

 

 

 

 

 

 

 

EXHIBIT D

 

BORROWER’S PATENTS, TRADEMARKS, COPYRIGHTS AND
LICENSES

 

PATENTS

 

	

Owner

 

	

Description

 

	

Patent / ApplicationNumber

 

	

Issue / Application Date

 

	

NEXTGEN PRO, LLC

 

	

NEAR FIELD COMMUNICATION (NFC) VEHICLE IDENTIFICATION SYSTEM AND
PROCESS

 

	

14/614,160

 

	

02/04/2015

 

 

 

TRADEMARKS

 

	

Owner

 

	

Description

 

	

Registration/ Serial Number

 

	

Registration/ Application Date

 

	

RUMBLEON, INC.

 

	

 

	

87/537,145

 

	

07/21/2017

 

	

RUMBLEON, INC.

 

	

 

	

87/532,685

 

	

07/18/2017

 

	

RUMBLEON, INC.

 

	

RUMBLEON

 

	

5,340,911

 

	

11/21/2017

 

	

RUMBLEON, INC.

 

	

 

	

87/532,644

 

	

07/18/2017

 

	

RUMBLEON, INC.

 

	

RUMBLEON

 

	

87/430,981

 

	

04/29/2017

 

	

NEXTGEN PRO, LLC

 

	

 

	

4,662,863

 

	

12/30/2014

 

 

COPYRIGHTS AND LICENSES

 

 

None

 

 

 

 

EXHIBIT E

 

DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS

 

(a)

 

	

Accountholder

 

	

Account Numbers

 

	

Bank

 

	

Address

 

	

Description of Use

 

	

RumbleOn, Inc.

 

	

##########

 

	

Wells Fargo

 

	

4525 Sharon Road, 4th Floor

Charlotte, NC 28211

 

	

General business account.

 

	

RMBL Missouri, LLC

 

	

##########

 

	

Wells Fargo

 

	

4525 Sharon Road, 4th Floor

Charlotte, NC 28211

 

	

General business account.

 

	

NextGen Pro, LLC

 

	

##########

 

	

Wells Fargo

 

	

4525 Sharon Road, 4th Floor

Charlotte, NC 28211

 

	

Transactions between dealer partners and the
Companies.

 

 

 

(b)

 

None

 

 

 

 

EXHIBIT F

 

COMPLIANCE CERTIFICATE

 

Hercules Capital, Inc.

 

400 Hamilton Avenue, Suite 310

 

Palo Alto, CA 94301

 

Reference
is made to that certain

 

Loan and Security Agreement dated as of April 30,
2018, by and among RUMBLEON, INC., a Nevada corporation, NEXTGEN
PRO, LLC, a Delaware limited liability company, RMBL MISSOURI, LLC,
a Delaware liability company, RMBL TEXAS, LLC, a Delaware limited
liability company, and each of their Qualified Subsidiaries from
time to time party to the Loan Agreement (individually, each, a
“Borrower”,
and collectively, “Borrowers”),
the several banks and other financial institutions or entities from
time to time parties to this Agreement (collectively,
“Lender”)
and HERCULES CAPITAL, INC., a Maryland corporation, in its capacity
as administrative agent and administrative agent for Lender (in
such capacity “Agent”).
All capitalized terms not defined herein shall have the same
meaning as defined in the Loan Agreement.

 

The undersigned is an Officer of the Borrower
Representative, knowledgeable of all Borrowers’ financial
matters, and is authorized to provide certification of information
regarding Borrowers; hereby certifies, in such capacity, that in
accordance with the terms and conditions of the Loan Agreement,
each Borrower is in compliance in all material respects for the
period ending ___________ with all covenants, conditions and terms
and hereby reaffirms that as of the date of the fiscal quarter
ended _________________ all representations and warranties
contained therein (except Sections 5.3
and
5.4) are true and correct on and as of the date of
this Compliance Certificate with the same effect as though made on
and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date, after giving effect
in all cases to any standard(s) of materiality contained in the
Loan Agreement as to such representations and warranties. Attached
are the required documents and calculations supporting the above
certification. The undersigned further certifies that the financial
statements and calculations are
prepared in accordance with GAAP (to the extent required pursuant
to the terms of the Loan Agreement) and are consistent from one
period to the next except as explained below.

 

	

REPORTING REQUIREMENT

 

	

REQUIRED

 

	

CHECK IF ATTACHED

 

	

Monthly Financial Statements
(Section
7.1(a))

 

	

Monthly, within 30 days

 

	

☐

 

 

 

	

Quarterly Financial Statements (or link to
10-Q filing) (Section
7.1(b))

 

	

Quarterly, within 45 days or such later date as permitted by the
SEC or under the applicable securities laws (which may be delivered
by link through investor relations page)

 

	

☐

 

 

 

	

Annual Financial Statements (or link to
10-K) (Section
7.1(c))

 

	

Annually, within 90 days or such later date as is permitted by the
SEC or under the applicable securities laws (which may be delivered
by link through investor relations page)

 

	

☐

 

 

 

 

 

 

 

 

 

	

Compliance Certificate (Section 7.1(d))

 

	

Together with Monthly or Quarterly Statements

 

	

☐

 

 

 

	

A/R Agings Report (if A/R > $1,000,000)
(Section
7.1(e))

 

	

Monthly, within 30 days

 

	

☐

 

 

 

	

A/P Agings Report (if A/P > $600,000)
(Section 7.1(e))

 

	

Monthly, within 30 days

 

	

☐

 

 

 

	

Budget and Projections (Section 7.1(g))

 

	

Annually, within 60 days of fiscal year end, and promptly upon any
Board approved update

 

	

☐

 

 

 

	

Daily Inventory Report (including detail of
financed / not financed Inventory) (Section 7.1(h))

 

	

Every Business Day

 

	

☐

 

 

 

	

Material Statement, Report or Notice of any
increased commitment, change in terms, non-renewal or default or
any demand for payment received pursuant to Qualified Inventory
Financing (Section
7.1(i))

 

	

When received

 

	

☐

 

 

 

	

FINANCIAL COVENANTS

 

	

REQUIRED

 

	

ACTUAL

 

	

Minimum Quarterly Revenue (after Tranche III Advance)

 

	

75% of Budget

 

	

☐
not
applicable

Budget Quarterly Revenue

$                        

Actual Quarterly Revenue

$                        

% of Budget

 

	

Minimum Quarterly Adjusted EBITDA, if average cash balance is less
than $15,000,000 (after Tranche III Advance)

 

	

$2,000,000

 

	

☐
not
applicable

$                        

 

	

OTHER COVENANTS

 

	

REQUIRED

 

	

ACTUAL

 

	

Equipment Financing

 

	

Not to exceed $200,000

 

	

$                        

 

	

Letters of Credit (cash secured) except for security for
leases

 

	

Not to exceed $250,000

 

	

$                        

 

 

 

 

 

 

	

Acquired Indebtedness

 

	

Not to exceed $100,000

 

	

$                        

 

	

Other Indebtedness

 

	

Not to exceed $750,000 (less on Equipment Financing, Letters of
Credit and Acquired Indebtedness outstanding)

 

	

$                        

 

	

Inventory Financing

 

	

Not to exceed 85% of aggregate Inventory value less Inventory
Financing Lenders’ aggregate cash collateral

 

	

(1) Aggregate Inventory value:

$                        

(2) Aggregate Inventory financing Lender cash
collateral

$                        

Maximum Inventory financing permitted (line 1 less line
2)

$                        

Actual Inventory financing amount outstanding

$                        

 

	

Repurchases of stock from employees, directors or
consultants

 

	

Not to exceed $100,000

 

	

$                        

 

	

Joint Ventures

 

	

Cash contributions not to exceed $100,00

 

	

$                        

 

	

Additional Investments

 

	

Not to exceed $750,000 (less Repurchases and Joint Ventures made
during the term)

 

	

$                        

 

	

Investments in Foreign Subsidiaries

 

	

As approved by Agent

 

	

$                        

 

	

Cash Collateral and Security Deposits

 

	

Not to exceed $250,000

 

	

$                        

 

	

Landlord Waivers and Bailee Agreements

 

	

For locations where Collateral (other than non-Inventory vehicles)
in excess of $400,000 is maintained

 

	

☐ all applicable
locations covered

☐ landlord waiver or
bailee agreement required for the following new
location:

 

 

 

 

 

The undersigned hereby also confirms the below accounts represent
all depository accounts and securities accounts presently open in
the name of each Borrower or Subsidiary, as
applicable.

 

	
 

	
 

	

Depository AC #

 

	

Financial Institution

 

	

Account Type (Depository / Securities)

 

	

Last Month Ending Account Balance

 

	

Purpose of Account

 

	

BORROWER Name/Address:

 

	
 

	
 

	

1

 

	
 

	
 

	
 

	
 

	
 

	

2

 

	
 

	
 

	
 

	
 

	
 

	

3

 

	
 

	
 

	
 

	
 

	
 

	

4

 

	
 

	
 

	
 

	
 

	
 

	

5

 

	
 

	
 

	
 

	
 

	
 

	

6

 

	
 

	
 

	
 

	
 

	
 

	

7

 

	
 

	
 

	
 

	
 

	
 

	
 

	

BORROWER SUBSIDIARY COMPANY Name/Address

 

	
 

	
 

	

1

 

	
 

	
 

	
 

	
 

	
 

	

2

 

	
 

	
 

	
 

	
 

	
 

	

3

 

	
 

	
 

	
 

	
 

	
 

	

4

 

	
 

	
 

	
 

	
 

	
 

	

5

 

	
 

	
 

	
 

	
 

	
 

	

6

 

	
 

	
 

	
 

	
 

	
 

	

7

 

	
 

	
 

	
 

	
 

	
 

	
 

 

 

 

 

 

[SIGNATURE PAGE TO COMPLIANCE CERTIFICATE]

 

Very
Truly Yours,

 

RUMBLEON,
INC.

 

SIGNATURE: 

 

TITLE: 

 

PRINT NAME: 

 

 

 

 

EXHIBIT G

 

FORM OF JOINDER AGREEMENT

 

This Joinder Agreement (the
“Joinder
Agreement”) is made and
dated as of [ ], and is
entered into by and between__________________, a ___________
corporation (“Subsidiary”),
and HERCULES CAPITAL, INC., a Maryland corporation (as
“Agent”).

 

RECITALS

 

A. Subsidiary’s Affiliate, RumbleON, Inc.
(“Company”)
[has entered/desires to enter] into that certain Loan and Security
Agreement dated as of April 30, 2018, with the several banks and
other financial institutions or entities from time to time party
thereto as lender (collectively, the “Lender”)
and Agent, as such agreement may be amended (the
“Loan
Agreement”), together
with the other agreements executed and delivered in connection
therewith;

 

B. Subsidiary
acknowledges and agrees that it will benefit both directly and
indirectly from Company’s execution of the Loan Agreement and
the other agreements executed and delivered in connection
therewith;

 

AGREEMENT

 

NOW
THEREFORE, Subsidiary and Agent agree as follows:

 

1.

The
recitals set forth above are incorporated into and made part of
this Joinder Agreement. Capitalized terms not defined herein shall
have the meaning provided in the Loan Agreement.

 

2.

By signing this Joinder Agreement, Subsidiary
shall be bound by the terms and conditions of the Loan Agreement
the same as if it were a Borrower (as defined in the Loan
Agreement) under the Loan Agreement, mutatis mutandis, provided
however, that (a) with respect to (i) Section 5.1
of the Loan Agreement, Subsidiary
represents that it is an entity duly organized, legally existing
and in good standing under the laws of [____________], (b) neither
Agent nor Lender shall have any duties, responsibilities or
obligations to Subsidiary arising under or related to the Loan
Agreement or the other Loan Documents, (c) that if Subsidiary is
covered by Company’s insurance, Subsidiary shall not be
required to maintain separate insurance or comply with the
provisions of Sections 6.1 and
6.2 of the Loan Agreement, and
(d) that as long as Company satisfies the requirements of
Section
7.1 of the Loan Agreement,
Subsidiary shall not have to provide Agent separate Financial
Statements. To the extent that Agent or Lender has any duties,
responsibilities or obligations arising under or related to the
Loan Agreement or the other Loan Documents, those duties,
responsibilities or obligations shall flow only to Company and not
to Subsidiary or any other Person or entity. By way of example (and
not an exclusive list): (i) Agent’s providing notice to
Company in accordance with the Loan Agreement or as otherwise
agreed among Company, Agent and Lender shall be deemed provided to
Subsidiary; (ii) a Lender’s providing an Advance to Company
shall be deemed an Advance to Subsidiary; and (iii) Subsidiary
shall have no right to request an Advance or make any other demand
on Lender.

 

3.

Subsidiary
agrees not to certificate its equity securities without
Agent’s prior written consent, which consent may be
conditioned on the delivery of such equity securities to Agent in
order to perfect Agent’s security interest in such equity
securities.

 

4.

Subsidiary
acknowledges that it benefits, both directly and indirectly, from
the Loan Agreement, and hereby waives, for itself and on behalf on
any and all successors in interest (including without limitation
any assignee for the benefit of creditors, receiver, bankruptcy
trustee or itself as debtor-in-possession under any bankruptcy
proceeding) to the fullest extent provided by law, any and all
claims, rights or defenses to the enforcement of this Joinder
Agreement on the basis that (a) it failed to receive adequate
consideration for the execution and delivery of this Joinder
Agreement or (b) its obligations under this Joinder Agreement are
avoidable as a fraudulent conveyance.

 

5.

As
security for the prompt, complete and indefeasible payment when due
(whether on the payment dates or otherwise) of all the Secured
Obligations, Subsidiary grants to Agent a security interest in all
of Subsidiary’s right, title, and interest in and to the
Collateral.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 [SIGNATURE PAGE TO JOINDER AGREEMENT]

 

SUBSIDIARY:

 

[ 

]

 

 

By:                                                             

Name:                                                             

Title:                                                             

 

Address:

[                                                            

]

[                                                            

]

[                                                            

]

 

Telephone:
[                                                             

]

email:
[                                                             

]

 

 

 

AGENT:

 

HERCULES
CAPITAL, INC.

 

 

 

By:            

 

Name:                       

 

Title:            

 

 

 

Address:

 

400 Hamilton Ave., Suite 310

 

Palo Alto, CA 94301

 

email: legal@herculestech.com; tharris@htgc.com

 

Telephone: 650-289-3060

 

 

 

 

EXHIBIT H

 

ACH DEBIT AUTHORIZATION AGREEMENT

 

Hercules Capital, Inc.

 

400 Hamilton Avenue, Suite 310

 

Palo Alto, CA 94301

 

Re: Loan and Security Agreement dated as of April
30, 2018 (as amended, restated, supplemented or otherwise modified
from time to time, the “Agreement”)
by and among RUMBLEON, INC., NEXTGEN PRO, LLC, RMBL MISSOURI, LLC,
RMBL TEXAS, LLC, and each of their Qualified Subsidiaries from time
to time party to the Loan Agreement (individually, each, a
“Borrower”,
and collectively, “Borrowers”)
and Hercules Capital, Inc., as administrative agent
(“Agent”)
and the lenders party thereto (collectively,
“Lender”).

 

In connection with the above referenced Agreement, the undersigned
Borrower hereby authorizes Agent to initiate debit entries for (i)
the periodic payments due under the Agreement and (ii)
out-of-pocket legal fees and costs incurred by Agent or Lender
pursuant to Section 11.11
of the Agreement to its account
indicated below. The undersigned authorizes the depository
institution named below to debit to such
account.

 

	

 DEPOSITORY
NAME

 

	

BRANCH

 

	

CITY

 

	

STATE AND ZIP CODE

 

	

TRANSIT/ABA NUMBER

 

	

ACCOUNT NUMBER

 

 

 

This authority will remain in full force and effect so long as any
amounts are due under the Agreement.

 

RUMBLEON, INC.

 

By:                                                                    

 

Name:                                                                    

 

Date:                                                                    

 

 

 

 

 

 

SCHEDULE
1.1

 

COMMITMENTS

 

	

LENDER

 

	

TRANCHE I COMMITMENT

 

	

TRANCHE II COMMITMENT

 

	

TRANCHE III COMMITMENT

 

	

TRANCHE IV COMMITMENT

 

	

Hercules Capital, Inc.

 

	

$5,000,000

 

	

$2,500,000

 

	

$7,500,000

 

	

$5,000,000, in Agent’s sole discretion, upon approval by
Agent’s investment committee

 

	

TOTAL COMMITMENTS

 

	

$5,000,000

 

	

$2,500,000

 

	

$7,500,000

 

	

$5,000,000, in Agent’s sole discretion, upon approval by
Agent’s investment committee

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE
5.14

 

CAPITALIZATION AND SUBSIDIARIES

 

Parent:

 

	

Class

	

No. of Authorized Shares

	

No. of Shares Outstanding

	

No. of Shares

Issuable upon

Exercise of any

Options, Warrants

or Convertible

Notes

	

Class A
Common Stock, $0.001 par value

 

	

 1,000,000

 

	

 1,000,000

 

	

 -

 

	

Class B
Common Stock, $0.001 par value

 

	

99,000,000

 

	

11,928,541

 

	

218,250

 

	

Preferred
Stock, $0.001 par value

 

	

  10,000,000

 

	

0

 

	

  -

 

 

There
are 741,000 restricted stock units outstanding, which have been
granted under the Company’s Stock Incentive
Plan.

 

Subsidiaries:

 

	

Entity

	

Owner

	

Ownership %

	

NextGen
Pro, LLC

	

RumbleON

	

100%

	

RMBL
Missouri, LLC

	

RumbleON

	

100%

	

RMBL
Texas, LLC

	

RumbleON

	

100%

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