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  Exhibit 10.3

 

FIRST AMENDMENT AND WAIVER TO LOAN AND SECURITY
AGREEMENT

 

THIS
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
“Amendment”), dated as of
October 30, 2018 (the “First Amendment Effective
Date”), is entered into by and among RUMBLEON, INC., a Nevada corporation
(“Parent”),
RMBL MISSOURI, LLC, a Delaware limited liability company
(“RMBL
Missouri”), RMBL TEXAS,
LLC, a Delaware limited liability company
(“RMBL
Texas”), NEXTGENPRO, LLC,
a Delaware limited liability company (“NextGen
Pro”, and together with
Parent, RMBL Missouri and RMBL Texas, the
“Existing
Borrowers”), RMBL
TENNESSEE, LLC, a Delaware limited liability company
(“RMBL
Tennessee”), RMBL
EXPRESS, LLC, a Delaware limited liability company
(“RMBL
Express”), WHOLESALE,
LLC, a Tennessee limited liability company
(“Wholesale”),
and WHOLESALE EXPRESS, LLC, a Tennessee limited liability company
(“Wholesale
Express”, and together
with RMBL Tennessee, RMBL Express and Wholesale, collectively,
“New
Borrowers”, and Existing
Borrowers and New Borrowers, together with any Qualified
Subsidiaries from time to time party hereto, collectively
“Borrowers”, and each, a
“Borrower”), the several
banks and other financial institutions or entities from time to
time party thereto as Lender, and HERCULES CAPITAL, INC., a
Maryland corporation, in its capacity as administrative agent and
collateral agent for Lender (in such capacity, together with its
successors and assigns in such capacity, “Agent”).

 

A. Existing Borrowers,
Lender and Agent are parties to a Loan and Security Agreement,
dated as of April 30, 2018 (as amended, restated or modified
from time to time, the “Loan
Agreement”).

 

B. Each of the New
Borrowers have entered into a Joinder Agreement as of the First
Amendment Effective Date.

 

C. Existing Borrowers
have requested consent to the consummation of the Wholesale
Transaction, as described below.

 

D. Pursuant to
Section 11.3(b) of
the Loan Agreement, the parties desire to enter into this Amendment
to modify the terms of the Loan Agreement as set forth in this
Amendment, including, without limitation, to permit the
consummation of the Wholesale Transaction, in each case, on the
terms and subject to the conditions set forth in this
Amendment.

 

SECTION
1 DEFINITIONS;
INTERPRETATION.

 

(a) Terms Defined in Loan Agreement. All
capitalized terms used in this Amendment (including in the recitals
hereof) and not otherwise defined herein shall have the meanings
assigned to them in the Loan Agreement.

 

(b) Rules of Construction. The rules of
construction that appear in the last paragraph of Section 1.1 of the Loan
Agreement shall be applicable to this Amendment and are
incorporated herein by this reference.

 

SECTION
2 AMENDMENTS
TO THE LOAN AGREEMENT.

 

(a) The Loan Agreement
shall be amended as follows effective as of the date
hereof:

 

(i) The following
defined terms in Section
1.1 of the Loan Agreement are hereby amended and restated as
set forth below, or, if applicable, are added to Section 1.1 of the Loan
Agreement in appropriate alphabetical order:

 

“Amortization
Date” means June 30,
2019, provided, that if the Interest-Only Extension Condition is
met, the Amortization Date shall be extended to December 30,
2019.

 

 

1

 

 

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

 

“First Amendment” means
the First Amendment to this Agreement, dated as of October 30,
2018.

 

“First Amendment Effective
Date” means October 30, 2018.

 

“Interest Only
Extension Condition”
means that prior to December 15, 2019, a Growth Capital Term Loan
Advance in principal amount of $5,000,000 shall have been made
pursuant to Tranche III.

 

“Inventory Financing
Agreement” means that
certain Inventory Financing and Security Agreement, by and among
Inventory Financing Lenders and RMBL Missouri, dated February 16,
2018, as modified by that certain Addendum No. 1 dated as of June
29, 2018 and that certain Addendum No. 2 dated as of September 25,
2018, and as may be further modified or amended in compliance with
the Inventory Financing Intercreditor Agreement and similar
agreements entered into with any Inventory Financing
Lender.

 

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

 

“Performance Milestone
III” means Borrower
Representative shall have provided evidence reasonably satisfactory
to Agent that Parent, on a consolidated basis, shall have achieved:
(i) Adjusted EBITDA for any consecutive six month period prior to
December 15, 2019 of at least $5,000,000 for such period; and (ii)
as of the date such evidence is provided, no Event of Default shall
have occurred and be continuing.

 

“Permitted Inventory
Financing Cash Collateral” means cash collateral required to be
provided pursuant to any Inventory Financing Agreement, provided
that (a) with respect to a Qualified Inventory Financing, (i) the
aggregate amount of such cash collateral shall not in any event
exceed the greater of (A) $250,000 and (B) 10.0% of the approved
credit line pursuant to such Qualified Inventory Financing, (b)
with respect to a Wholesale Inventory Financing, $7,000,000, and
(c) at any time, no additional cash collateral shall be provided if
doing so would result in an Event of Default or could reasonably be
expected to result in an Event of Default.

 

“Qualified
Cash” means the
aggregate balance maintained in all Borrowers’ Deposit
Accounts and accounts in which Investment Property of Borrowers is
maintained, in each case, that are subject to an Account Control
Agreement in favor of Agent and pursuant to which Agent has a first
lien perfected security interest, and, for the avoidance of doubt,
excluding any Permitted Inventory Financing Cash
Collateral.

 

 

2

 

 

“Term Loan Maturity
Date” means, with respect
to Tranche I, May 1, 2021, and with respect to Tranche II,
Tranche III and Tranche IV, October 1, 2021.

 

“Tranche”
means any of Tranche I, Tranche II, Tranche III or Tranche
IV.

 

“Wholesale Express
Acquisition” means the acquisition of all of the
issued and outstanding membership interests of Wholesale Express,
LLC, a Tennessee limited liability company, by Parent, pursuant to
that certain Membership Interest Purchase Agreement, dated as of
October 26, 2018 (the “Wholesale Express Purchase
Agreement”, and together with all schedules, exhibits
and annexes thereto, all side letters and material ancillary
agreements entered into in connection therewith, the
“Wholesale Express
Purchase Documents”).

 

“Wholesale Inventory
Financing” means
Indebtedness owing to Inventory Financing Lenders pursuant to the
Wholesale Inventory Financing Documents, provided that (i) no
Borrower other than Wholesale shall be a borrower pursuant thereto,
(ii) no Borrower other than Parent and RMBL Tennessee shall be a
guarantor with respect thereto, (iii) the obligations pursuant to
such facility shall not be secured by any Lien other than a Lien on
property of Wholesale, (iv) the Wholesale Inventory Financing
Documents shall not prohibit (A) the Indebtedness incurred or Liens
granted pursuant to this Agreement (including with respect to
Wholesale) or (B) the payment of any amounts when due pursuant to
this Agreement (including by Wholesale), (v) the Wholesale
Inventory Financing Intercreditor Agreement shall be in full force
and effect, (vi) the aggregate amount of Indebtedness
outstanding thereunder shall not exceed $75,000,000 at any time,
(vii) the advance rates shall not deviate materially from the
advance rate structure pursuant to the inventory financing
arrangements provided by NextGear Capital, Inc. as in effect on the
First Amendment Effective Date, and (viii) the interest rate and
applicable fees shall not be higher and the cash collateral or
deposit required shall not be a higher percentage of the approved
credit limit, in each case, relative to the inventory financing
arrangements provided by NextGear Capital, Inc. as in effect on the
First Amendment Effective Date.

 

“Wholesale Inventory
Financing Intercreditor Agreement” means an intercreditor agreement, to be
entered into subsequent to the First Amendment Effective Date in
accordance with Appendix II (Item 4) of the First Amendment, by and
among NextGear Capital, Inc. and Agent, in form and substance
satisfactory to Agent in Agent’s reasonable discretion, as
amended, restated, supplemented or otherwise modified from time to
time, or any similar agreement entered into by and among any
Inventory Financing Lender and Agent, in form and substance
satisfactory to Agent, in Agent’s reasonable discretion with
respect to a Wholesale Inventory Financing as in effect from time
to time.

 

“Wholesale Inventory
Financing Documents”
means (i) that certain Demand Promissory Note and Loan and Security
Agreement, dated as of the First Amendment Effective Date, (ii)
that certain Amendment to Demand Promissory Note and Loan and
Security Agreement, dated as of the First Amendment Effective Date,
(iii) that certain Corporate Guaranty, dated as of the First
Amendment Effective Date by Parent and (iv) that certain Corporate
Guaranty, dated as of the First Amendment Effective Date by RMBL
Tennessee, in each case, as amended, restated, supplemented or
otherwise modified from time to time, or any similar agreements
entered into with respect to a replacement inventory financing
facility provided by an Inventory Financing Lender, in each case,
consistent with the defined term “Wholesale Inventory
Financing” and any other restriction with respect thereto
pursuant to this Agreement.

 

 

3

 

 

“Wholesale Merger” means
the merger of Wholesale Holdings, Inc., a Tennessee corporation
(“Wholesale
Holdings”), into RMBL Tennessee, pursuant to that
certain Agreement and Plan of Merger, dated as of October 26, 2018
(as amended by that certain Amendment to Merger Agreement, dated as
of October 29, 2018, the “Wholesale Merger
Agreement”, and together with all schedules, exhibits
and annexes thereto, all side letters and material ancillary
agreements entered into in connection therewith, the
“Wholesale Merger
Documents”), by and among the Parent, RMBL Tennessee,
the shareholders of Wholesale Holdings, Wholesale, LLC, a
wholly-owned subsidiary of Wholesale Holdings formerly known as
Wholesale, Inc., Steven Brewster, a Tennessee resident, as the
representative of the shareholders of Wholesale Holdings, and, for
the limited purpose of Section 5.8 of the Wholesale Merger
Agreement, Marshall Chesrown and Steven R. Berrard, pursuant to
which Wholesale Holdings shall merge with and into RMBL Tennessee,
with RMBL Tennessee as the surviving entity. Wholesale, LLC, a Tennessee limited liability
company (f/k/a Wholesale, Inc., a Tennessee corporation) is a
wholly-owned direct subsidiary of RMBL Tennessee and an indirect
Subsidiary of Parent.

 

“Wholesale Transaction”
means, collectively the Wholesale Merger and the Wholesale Express
Acquisition.

 

“Wholesale Transaction
Documents” means, collectively the Wholesale Merger
Documents and the Wholesale Express Purchase
Documents.

 

(ii) The
specified clauses of the defined term “Permitted
Indebtedness” set forth in Section 1.1 of the
Agreement are amended and restated as set forth below:

 

(b)           Indebtedness
of up to $1,000,000 outstanding at any time secured by a Lien
described in clause (f) of the defined term “Permitted
Liens”, provided in the case of acquired Equipment such
Indebtedness does not exceed the cost of the Equipment financed
with such Indebtedness;

 

(f)           reimbursement
obligations in connection with letters of credit that are secured
by Cash and issued on behalf of a Borrower or a Subsidiary in an
amount not to exceed $500,000 at any time outstanding, and
reimbursement obligations in connection with letters of credit
serving as a lease deposit;

 

(h)           (i)
Indebtedness pursuant to a Qualified Inventory Financing, and (ii)
Indebtedness of Wholesale, as a borrower, pursuant to the Wholesale
Inventory Financing, and any unsecured guaranty obligations of
Parent and RMBL Tennessee with respect to the Wholesale Inventory
Financing;

 

(i)           Indebtedness
of any Person whose assets or Equity Interests are acquired by a
Borrower or any of its Subsidiaries in a Permitted Acquisition
provided, that the aggregate amount of such Indebtedness
outstanding at any time does not exceed $250,000 and was not
incurred in connection with, or in contemplation of, such Permitted
Acquisition;

 

(l)           other
Indebtedness, including Indebtedness covered by, but in excess of
the amounts permitted under clauses (b), (f) and (i) above, at any
time outstanding in an amount not to exceed $2,000,000, (which
amount shall be reduced by the aggregate amount of Indebtedness
described in clauses (b), (f) and (i) above, in each case up to the
amount permitted thereunder, that is outstanding as of the date of
determination).

 

(iii) The
specified clauses of the defined term “Permitted
Investments” set forth in Section 1.1 of the
Agreement are amended and restated as set forth below:

 

 

4

 

 

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

 

(j)           joint
ventures or strategic alliances in the ordinary course of
Borrowers’ business consisting of the nonexclusive licensing
of technology, the development of technology or the providing of
technical support, provided that cash Investments (if any) by any
Borrower do not exceed $750,000 in the aggregate in any fiscal
year;

 

(l)           additional
Investments, including Investments covered by, but in excess of the
amounts permitted under, clauses (b)(i) and (j) above, that do not
exceed $1,500,000 during the term of this Agreement (less the
amount of Investments described in clauses (b)(i) and (j) above
made, in each case, up to the amount permitted thereunder, from the
Closing Date through the date of determination).

 

(iv) The
specified clauses of the defined term “Permitted Liens”
set forth in Section 1.1 of the
Agreement are amended and restated as set forth below:

 

(m)           (i)
Liens on Cash securing obligations permitted under clause (f) of
the definition of Permitted Indebtedness and (ii) security deposits
in connection with real property leases, the combination of (i) and
(ii) in an aggregate amount not to exceed $500,000 at any
time;

 

(o)           Liens
securing Indebtedness pursuant to a Qualified Inventory Financing
or a Wholesale Inventory Financing, provided that (i) such Liens
are subject to the Inventory Financing Intercreditor Agreement or
Wholesale Inventory Financing Intercreditor Agreement, as
applicable, (ii) any cash collateral subject to a Lien in favor of
Inventory Financing Lenders shall not exceed the amount of the
Permitted Inventory Financing Cash Collateral, and (iii) with
respect to the Wholesale Inventory Financing, such Liens are
limited to the assets of Wholesale.

 

(v) The defined term
“Permitted Transfers” set forth in Section 1.1 of the
Agreement is amended by amending and restating clause (e) thereof as
follows:

 

(e)           other
transfers of assets having a fair market value of not more than
$750,000 in the aggregate in any fiscal year.

 

(vi) The
defined term “Qualified Inventory Financing” set forth
in Section 1.1 of the Agreement is hereby amended and restated as
follows:

 

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

 

 

5

 

 

(vii) Section
1.1 of the Loan Agreement is hereby amended to delete each
of the following defined terms:

 

“Performance
Milestone I”

 

“Performance
Milestone II”

 

(viii) Section
2.1(a) of the Loan Agreement is hereby amended and restated
to read as follows:

 

(a)           Growth
Capital Term Commitment. As of the Closing Date, Lender severally
(and not jointly) has made a Growth Capital Term Loan Advance in
principal amount of $5,000,000 (“Tranche
I”). On the First
Amendment Effective Date, Lender will severally (and not jointly)
make, and Borrower Representative shall request, a Growth Capital
Term Loan Advance in principal amount of $5,000,000
(“Tranche
II”). During the period
commencing upon Borrowers’ achievement of Performance
Milestone III and ending December 15, 2019, Borrower Representative
may request an additional Growth Capital Term Loan Advance in an
amount of $5,000,000 (“Tranche
III”). Upon Borrower
Representative’s request and approval by Lender’s
investment committee, in its sole discretion, Borrower
Representative may request additional Growth Capital Term Loan
Advances in an aggregate principal amount $5,000,000
(“Tranche
IV”). The aggregate
principal Growth Capital Term Loan Advances outstanding shall not
exceed the Maximum Growth Capital Term Loan
Amount.

 

(ix) Section
2.1(d) of the Loan Agreement is hereby amended and restated
to read as follows:

 

(d)           Payment.
Borrowers will pay interest on each Growth Capital Term Loan
Advance on the first Business Day of each month, beginning the
month after the Advance Date continuing until (but not including)
the Amortization Date. Borrowers shall repay the aggregate
principal balance of the Growth Capital Term Loan Advances under
each Tranche that is outstanding on the day immediately preceding
the Amortization Date, in equal monthly installments of principal
and interest (mortgage style) beginning on the Amortization Date
and continuing on the first Business Day of each month thereafter
until the Secured Obligations (other than inchoate indemnity
obligations) are repaid, provided that if the Term Loan Interest
Rate is adjusted in accordance with its terms, or the Amortization Date is extended, the amount
of each subsequent monthly installment shall be recalculated. If
the Interest-Only Extension Condition is met after June 30, 2019,
Borrowers may from the first Business Day of each month after the
date the Interest-Only Extension Condition is met, make payments of
interest only through the Amortization Date, as extended in
accordance with its terms, provided that in no event shall any
payment of principal and interest made prior to the date the
Interest-Only Extension Condition was met be refunded. The entire
principal balance of the Growth Capital Term Loan Advances pursuant
to each Tranche and all accrued but unpaid interest hereunder,
shall be due and payable on the applicable Term Loan Maturity Date.
Borrowers shall make all payments under this Agreement without
setoff, recoupment or deduction and regardless of any counterclaim
or defense. Lender will initiate debit entries to the applicable
Borrower’s account as authorized on the ACH Authorization (i)
on each payment date of all periodic obligations payable to Lender
under each Growth Capital Term Loan Advance and (ii) out-of-pocket
legal fees and costs incurred by Agent or Lender in connection
with Section 11.11
of this Agreement; provided that, with
respect to clause (i)
above, in the event that Lender or
Agent informs Borrower Representative that Lender will not initiate
a debit entry to such Borrower’s account for a certain amount
of the periodic obligations due on a specific payment date,
Borrowers shall pay to Lender such amount of periodic obligations
in full in immediately available funds on such payment date;
provided, further, that, with respect to clause (i)
above, if Lender or Agent informs
Borrower Representative that Lender will not initiate a debit entry
as described above later than the date that is three (3) Business
Days prior to such payment date, Borrowers shall pay to Lender such
amount of periodic obligations in full in immediately available
funds on the date that is three (3) Business Days after the date on
which Lender or Agent notifies Borrower Representative thereof;
provided, further, that, with respect to clause (ii)
above, in the event that Lender or
Agent informs Borrower Representative that Lender will not initiate
a debit entry to a Borrower’s account for specified
out-of-pocket legal fees and costs incurred by Agent or Lender,
Borrowers shall pay to Lender such amount in full in immediately
available funds within three (3) Business Days.

 

 

6

 

 

(x) Section 2.4 of the Loan
Agreement is hereby amended and restated to read as
follows:

 

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

 

(xi) Section
2.5 of the Loan Agreement is hereby amended and restated to
read as follows:

 

2.5           
End of Term Charge. Borrowers shall pay Lender (i) on the earliest
to occur of (A) the Term Loan Maturity Date applicable to Tranche
I, (B) the date that Borrowers prepay the outstanding Secured
Obligations (other than any inchoate indemnity obligations and any
other obligations which, by their terms, are to survive the
termination of this Agreement) in full, or (C) the date that the
Secured Obligations otherwise become due and payable, a charge of
$562,500, and (ii) on the earliest to occur of (A) the Term Loan
Maturity Date applicable to Tranche II and Tranche III, (B) the
date that Borrowers prepay the outstanding Secured Obligations
(other than any inchoate indemnity obligations and any other
obligations which, by their terms, are to survive the termination
of this Agreement) in full, or (C) the date that the Secured
Obligations otherwise become due and payable, a charge equal to the
sum of $295,000 and (iii) 2.35% of any principal amount paid
or prepaid in respect of a Growth Capital Term Loan Advance made
pursuant to Tranche IV. Notwithstanding the required payment date
of such charge, it shall be deemed earned in full by Lender as of
the First Amendment Effective Date, except that amounts payable
based on Growth Capital Term Loan Advances made pursuant to Tranche
IV shall be deemed earned on the applicable Advance Date with
respect to such Advances.

 

(xii) Section
3.2 of the Loan Agreement is
hereby amended by adding the following sentence at the end thereof:
“Notwithstanding anything to the contrary set forth in this
Agreement, (x) the terms of any Inventory Financing Intercreditor
Agreement and Wholesale Inventory Financing Intercreditor Agreement
shall control the required priority of Agent’s security
interest in the Collateral, to the extent applicable, and any
reference to Agent having a “first lien” or
“highest priority lien” in the Collateral shall, to the
extent applicable, be subject to the priority set forth in such
Inventory Financing Intercreditor Agreement or Wholesale Inventory
Financing Intercreditor Agreement and (y) with respect to
Collateral of Wholesale, prior to the execution and delivery of the
Wholesale Inventory Financing Intercreditor Agreement, any
reference to Agent having a “first lien” or
“highest priority lien” in the Collateral shall be
amended to state that Agent has a “second lien” or
“junior priority lien” in the
Collateral.”

 

(xiii) Section
4.2(a) of the Loan Agreement is hereby amended and restated
to read as follows:

 

(a)           Agent
shall have received (i) an Advance Request for the relevant Advance
as required by Section
2.1(b), duly executed by Borrower Representative’s
Chief Executive Officer or Chief Financial Officer and (ii) with
respect to the Advance pursuant to Tranche III, a warrant to
purchase Class B Common Stock of Parent, in form and having a
“Warrant Price” and “Applicable Number”
that is the same as such warrant issued to Lender as of the First
Amendment Effective Date.

 

 

7

 

 

(xiv) Section
7.1(i) of the Loan Agreement is hereby amended and restated
to read as follows:

 

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

 

(xv) Section
7.2 of the Loan Agreement is
hereby amended by adding the following sentence at the end thereof:
“This Section 7.2
shall not apply to
Wholesale.”.

 

(xvi) Section
7.4 of the Loan Agreement is hereby amended to amend and
restate clause (d) as follows: “(d) as permitted pursuant to any Inventory Financing
Intercreditor Agreement or any subordination agreement related to
Subordinated Indebtedness, or prepayments of amounts owing
under the Wholesale Inventory Financing in the ordinary course of
business,”

 

(xvii) Section
7.6 of the Loan Agreement is hereby amended to replace the
reference to “$250,000” therein to
“$1,000,000”.

 

(xviii) Section
7.11 of the Loan Agreement is hereby amended to amend and
restate the final sentence at the end of such Section: “With
respect to any leased location or location where Collateral (other
than vehicles not constituting Inventory) is held by a bailee,
Borrowers shall deliver a landlord waiver or bailee agreement in
favor of Agent, in form and substance reasonably satisfactory to
Agent, provided that for locations existing as of the Closing Date
and for which a landlord waiver or bailee agreement would be
required, Borrowers may deliver the same within thirty (30) days of
the Closing Date (subject to extension from time to time in
Agent’s reasonable discretion if Borrowers have demonstrated
their use of commercially reasonable efforts to obtain such
landlord waivers and agreements), and for locations existing as of
the First Amendment Effective Date and for which a landlord waiver
or bailee agreement would be required, Borrowers may deliver the
same within thirty (30) days of the First Amendment Effective Date
(subject to extension from time to time in Agent’s reasonable
discretion if Borrowers have demonstrated their use of commercially
reasonable efforts to obtain such landlord waivers and agreements),
and provided further that no landlord waiver or bailee agreement
shall be required to the extent that Collateral (other than
vehicles not constituting Inventory) at all leased or bailee
locations not subject to such a landlord waiver or bailee agreement
does not exceed $750,000 at any time.”

 

(xix) Section
7.12 of the Loan Agreement is hereby amended by amending and
restating the last sentence thereof to read as follows: “Any
Subsidiary, including RMBL Missouri but excluding Wholesale, that
receives proceeds from the sale of Inventory, shall, after
settlement of any amounts due in respect of a Qualified Inventory
Financing, with respect to the Inventory sold, immediately transfer
the excess proceeds, if any, to a Deposit Account that is subject
to an Account Control Agreement in favor of Agent pursuant to which
Agent is the first lien or controlling secured party, as
applicable.”

 

(xx) Section
7.21 of the Loan Agreement is hereby amended and restated to
read as follows:

 

7.21           Financial
Covenants.

 

(a)           For
each fiscal quarter prior to the draw of Tranche III, Borrowers
shall either (i) achieve Adjusted EBITDA and Gross Profit for such
fiscal quarter, in an amount not less than the amounts set forth in
the schedule below for the relevant period (the “Performance Covenant”) or
(ii) maintain Qualified Cash of at least $10,000,000 at all times
(the “Liquidity
Covenant”), provided that if at any time the
Performance Covenant is not met for the immediately preceding
fiscal quarter, after the Compliance Certificate is delivered for
such fiscal quarter, Borrowers shall not be in default under this
Section 7.21(a) if
Borrowers maintain compliance with the Liquidity Covenant at all
times thereafter until such time as the Performance Covenant is met
(at which time quarterly testing shall resume).

 

 

 

8

 

 

	

Fiscal Quarter Ended

 

	

Minimum Gross Profit

 

	

Minimum EBITDA

 

	

December 31, 2018

 

	

$9,600,000

 

	

Not applicable

 

	

March 31, 2019

 

	

$16,300,000

 

	

$1

 

	

June 30, 2019

 

	

$20,500,000

 

	

$1,000,000

 

	

September 30, 2019

 

	

$25,000,000

 

	

$1,500,000

 

	

December 31, 2019

 

	

$28,300,000

 

	

$2,000,000

 

	

March 31, 2020

 

	

$31,800,000

 

	

$2,000,000

 

	

June 30, 2020

 

	

$33,700,000

 

	

$2,000,000

 

	

September 30, 2020

 

	

$36,200,000

 

	

$2,000,000

 

	

December 31, 2020

 

	

$39,900,000

 

	

$2,000,000

 

 

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

 

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

 

(ii)           If
during any fiscal quarter, the average of Qualified Cash during the
fiscal quarter is less than $15,000,000, then Parent shall achieve
quarterly Adjusted EBITDA of not less than $2,000,000 for such
quarter, tested quarterly.

 

(xxi) A
new Section 7.25 is
hereby added to the Loan Agreement to read as follows:

 

7.25           Additional
Limitations on Wholesale. For as long as a Wholesale Inventory
Financing is in effect, (a) (i) on and after the First Amendment
Effective Date and until the earlier to occur of (A) November 6,
2018 and (B) the effective date of the Wholesale Inventory
Financing Intercreditor Agreement, any Borrower shall be permitted
to make Investments in Wholesale, (ii) if the Wholesale Inventory
Financing Intercreditor Agreement is in effect on or before
November 6, 2018, after the effective date of the Wholesale
Inventory Financing Intercreditor Agreement, no Borrower shall be
permitted to make any Investment in Wholesale unless the amount of
Qualified Cash immediately prior to and after giving pro forma
effect to such Investment is at least $10,000,000 and (iii) if the
Wholesale Inventory Financing Intercreditor Agreement is not in
effect on or before November 6, 2018, (A) after November 6, 2018
and until the effective date of the Wholesale Inventory Financing
Intercreditor Agreement, no Borrower shall be permitted to make any
Investment in Wholesale unless the amount of Qualified Cash
immediately prior to and after giving pro forma effect to such
Investment is at least $13,000,000 and (B) after the effective date
of the Wholesale Inventory Financing Intercreditor Agreement, no
Borrower shall be permitted to make any Investment in Wholesale
unless the amount of Qualified Cash immediately prior to and after
giving pro forma effect to such Investment is at least $10,000,000;
(b) no Borrower shall transfer material assets to Wholesale; (c) no
Borrower shall merge with or into Wholesale; and (d) Wholesale
shall not (i) conduct any material business other than the business
conducted as of the First Amendment Effective Date and any business
incidental thereto or otherwise applicable to the other Borrowers
hereunder; (ii) own any material assets other than Inventory
consisting of pre-owned cars and other assets reasonably necessary
in connection with the business permitted to be conducted by
Wholesale or otherwise applicable to other Borrowers hereunder; or
(iii) own any Subsidiary or enter into any Permitted
Acquisition.

 

 

9

 

 

(xxii) Section
9.6 of the Loan Agreement is hereby amended and restated to
read as follows:

 

9.6           Attachments;
Judgments. Any material portion of any Borrower’s assets is
attached or seized, or a levy is filed against any such assets, or
a judgment or judgments is/are entered for the payment of money
(not covered by independent third party insurance as to which
liability has been accepted (subject to customary reservation of
rights) by such insurance carrier), individually or in the
aggregate, of at least $750,000, or any Borrower is enjoined or in
any way prevented by court order from conducting any material part
of its business;

 

(xxiii) Section
9.7 of the Loan Agreement is hereby amended and restated to
read as follows:

 

9.7           Other
Obligations. The occurrence of any default and the passing of any
applicable grace period under any agreement or obligation of any
Borrower (including pursuant to any Inventory Financing Agreement
or Wholesale Inventory Financing Documents) involving any
Indebtedness in excess of $750,000, which could entitle or permit
any Person to accelerate such Indebtedness, or any other material
agreement or obligation, if a Material Adverse Effect could
reasonably be expected to result from such default; or

 

(xxiv) Exhibit
C to the Loan Agreement is hereby supplemented with respect
to New Borrowers as set forth in Exhibit C attached
hereto.

 

(xxv) Exhibit
D to the Loan Agreement is hereby supplemented with respect
to New Borrowers as set forth in Exhibit D attached
hereto.

 

(xxvi) Exhibit
E to the Loan Agreement is hereby supplemented with respect
to New Borrowers as set forth in Exhibit E attached
hereto.

 

(xxvii) Exhibit
F to the Loan Agreement is hereby amended and restated as
set forth in Exhibit F attached
hereto.

 

(xxviii) Schedule
1.1 to the Loan Agreement is hereby amended and restated as
set forth in Schedule
1.1 attached hereto.

 

(xxix) Schedule
5.14 to the Loan Agreement is hereby supplemented with
respect to New Borrowers as set forth in Schedule 5.14 attached
hereto.

 

(b) Wholesale Transaction as “Permitted
Acquisition”. Notwithstanding the conditions set forth
in the defined term “Permitted Acquisition”, the
Wholesale Transaction shall be deemed to be a Permitted Acquisition
and Permitted Investment, in each case for all purposes of the Loan
Agreement.

 

(c) References Within Loan Agreement. Each
reference in the Loan Agreement to “this Agreement” and
the words “hereof,” “herein,”
“hereunder,” or words of like import, shall mean and be
a reference to the Loan Agreement as amended by this Amendment.
This Amendment shall be a Loan Document.

 

SECTION
3 Conditions of Effectiveness. The
effectiveness of this Amendment shall be subject to Agent’s
receipt of the documents and satisfaction of the conditions as set
forth in Appendix I
hereto.

 

SECTION
4 Post-Closing Deliveries. Borrowers agree
to satisfy the conditions and deliver the documents set forth in
Appendix I hereto
within the period set forth therein, provided that a failure to
comply with this Section
4 shall constitute an immediate Event of Default without
cure period.

 

 

10

 

 

SECTION
5 Representations and Warranties. To
induce Agent and Lender to enter into this Amendment, each Borrower
hereby confirms, as of the date hereof, (a) that the
representations and warranties made by it in Section 5 of the Loan
Agreement and in the other Loan Documents are true and correct in
all material respects; provided, however, that such materiality
qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in
the text thereof; and (b) that there has not been and there does
not exist a Material Adverse Effect.

 

SECTION
6 Miscellaneous.

 

(a) Loan Documents Otherwise Not Affected;
Reaffirmation. Except as expressly amended pursuant hereto
or referenced herein, the Loan Agreement and the other Loan
Documents shall remain unchanged and in full force and effect and
are hereby ratified and confirmed in all respects. Lender’s
and Agent’s execution and delivery of, or acceptance of, this
Amendment shall not be deemed to create a course of dealing or
otherwise create any express or implied duty by any of them to
provide any other or further amendments, consents or waivers in the
future. Each Borrower hereby reaffirms the security interest
granted pursuant to the Loan Documents and hereby reaffirms that
such grant of security in the Collateral secures all Secured
Obligations under the Loan Agreement and the other Loan
Documents.

 

(b) Conditions. For purposes of determining
compliance with the conditions specified in Section 4, each Lender that has
signed this Amendment shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless Agent shall have
received notice from such Lender prior to the date hereof
specifying its objection thereto.

 

(c) Release. In consideration of the agreements of
Agent and Lender contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, each Borrower, on behalf of itself and its
successors, assigns, and other legal representatives, hereby fully,
absolutely, unconditionally and irrevocably releases, remises and
forever discharges Agent and Lender, and its successors and
assigns, and its present and former shareholders, affiliates,
subsidiaries, divisions, predecessors, directors, officers,
attorneys, employees, agents and other representatives (Agent,
Lender and all such other persons being hereinafter referred to
collectively as the “Releasees” and individually as a
“Releasee”), of
and from all demands, actions, causes of action, suits, covenants,
contracts, controversies, agreements, promises, sums of money,
accounts, bills, reckonings, damages and any and all other claims,
counterclaims, defenses, rights of set-off, demands and liabilities
whatsoever of every name and nature, known or unknown, suspected or
unsuspected, both at law and in equity, which any Borrower, or any
of its successors, assigns, or other legal representatives may now
or hereafter own, hold, have or claim to have against the Releasees
or any of them for, upon, or by reason of any circumstance, action,
cause or thing whatsoever which arises at any time on or prior to
the day and date of this Amendment, including, without limitation,
for or on account of, or in relation to, or in any way in
connection with the Loan Agreement, or any of the other Loan
Documents or transactions thereunder or related thereto. Each
Borrower waives the provisions of California Civil Code section
1542, which states:

 

A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER, MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.

 

Each
Borrower understands, acknowledges and agrees that the release set
forth above may be pleaded as a full and complete defense and may
be used as a basis for an injunction against any action, suit or
other proceeding which may be instituted, prosecuted or attempted
in breach of the provisions of such release. Each Borrower agrees
that no fact, event, circumstance, evidence or transaction which
could now be asserted or which may hereafter be discovered shall
affect in any manner the final, absolute and unconditional nature
of the release set forth above. The provisions of this section
shall survive payment in full of the Secured Obligations, full
performance of all the terms of this Amendment and the other Loan
Documents.

 

 

11

 

 

(d) No Reliance. Each Borrower hereby
acknowledges and confirms to Agent and Lender that such Borrower is
executing this Amendment on the basis of its own investigation and
for its own reasons without reliance upon any agreement,
representation, understanding or communication by or on behalf of
any other Person.

 

(e) Costs and Expenses. Each Borrower agrees
to pay to Agent the date hereof the reasonable out-of-pocket costs
and expenses of Agent and Lender party hereto, and the fees and
disbursements of counsel to Agent and Lender party hereto in
connection with the negotiation, preparation, execution and
delivery of this Amendment and any other documents to be delivered
in connection herewith on the date hereof, and including any
recording tax due in connection with the filing of any UCC
Financing Statement.

 

(f) Binding Effect. This Amendment binds and
is for the benefit of the successors and permitted assigns of each
party.

 

(g) Governing Law. This Amendment and the
other Loan Documents shall be governed by, and construed and
enforced in accordance with, the laws of the State of California,
excluding conflict of laws principles that would cause the
application of laws of any other jurisdiction.

 

(h) Complete Agreement; Amendments. This
Amendment and the Loan Documents represent the entire agreement
about this subject matter and supersede prior negotiations or
agreements with respect to such subject matter. All prior
agreements, understandings, representations, warranties, and
negotiations between the parties about the subject matter of this
Amendment and the Loan Documents merge into this Amendment and the
Loan Documents.

 

(i) Severability of Provisions. Each
provision of this Amendment is severable from every other provision
in determining the enforceability of any provision.

 

(j) Counterparts. This Amendment may be
executed in any number of counterparts and by different parties on
separate counterparts, each of which, when executed and delivered,
is an original, and all taken together, constitute one Amendment.
Delivery of an executed counterpart of a signature page of this
Amendment by facsimile, portable document format (.pdf) or other
electronic transmission will be as effective as delivery of a
manually executed counterpart hereof.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

12

 

[SIGNATURE
PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY
AGREEMENT]

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this
Amendment, as of the date first above written.

 

	
 

	

EXISTING
BORROWERS:

 

RUMBLEON,
INC.

 

Signature:
/s/ 
Marshall Chesrown 

 

Print Name:
Marshall Chesrown 

 

Title: Chief
Executive Officer

 

NEXTGEN
PRO, LLC

 

Signature: 
/s/ 
Marshall Chesrown 

 

Print Name:
Marshall Chesrown 

 

Title:
President

  

RMBL
MISSOURI, LLC

 

Signature: 
/s/ 
Marshall Chesrown 

 

Print Name:
Marshall Chesrown 

 

Title:
Manager

  

RMBL
TEXAS, LLC

 

Signature: 
/s/ 
Marshall Chesrown 

 

Print Name:
Marshall Chesrown 

 

Title:
Manager

 

 

 

 

 

 

[SIGNATURE
PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY
AGREEMENT]

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this
Amendment, as of the date first above written.

	
 

	

NEW BORROWERS:

 

RMBL
TENNESSEE, LLC

 

Signature:
/s/ 
Marshall Chesrown 

 

Print Name:
Marshall Chesrown 

 

Title:
Manager

  

RMBL
EXPRESS, LLC

 

Signature: 
/s/ 
Marshall Chesrown 

 

Print Name:
Marshall Chesrown 

 

Title: Chief
Executive Officer

  

WHOLESALE,
LLC

 

Signature:
/s/ Thomas
Aucamp

 

Print Name: Thomas
Aucamp

 

Title: Chief
Administrative Officer and Corporate Secretary

  

WHOLESALE EXPRESS,
LLC

 

Signature: 
/s/ Thomas
Aucamp

 

Print Name: Thomas
Aucamp

 

Title: Chief
Administrative Officer and Corporate Secretary

  

 

 

 

 

[SIGNATURE
PAGE TO FIRST AMENDMENT TO LOAN AND SECURITY
AGREEMENT]

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this
Amendment, as of the date first above written.

 

	
 

	

AGENT:

 

HERCULES CAPITAL,
INC.

 

Signature:
/s/ Zhuo
Huang

 

Print Name: 
Zhuo Huang

 

Title: Associate
General Counsel

 

 

 

LENDER:

 

HERCULES CAPITAL,
INC.

 

Signature:
/s/ Zhuo
Huang

 

Print Name: Zhuo
Huang

 

Title: Associate
General Counsel

 

 

 

 

 

APPENDIX I

 

CLOSING CONDITIONS

 

1.

Agent
shall have received satisfactory evidence of Parent’s receipt
of $15,000,000 in net cash proceeds (not including any proceeds
from the conversion or cancellation of Indebtedness) from the
issuance of its Equity Interests immediately prior to the
consummation of the Wholesale Transaction.

 

2.

All
conditions to the consummation of the Wholesale Transaction in
accordance with the Wholesale Transaction Documents shall have been
satisfied.

 

3.

Agent
shall have received the following, each of which shall be in form
and substance satisfactory to Agent:

 

(a)

a
Perfection Certificate, which shall be true and complete, after
giving pro forma effect to the Wholesale Transaction;

 

(b)

this
Amendment, duly executed by Borrowers, Agent and
Lender;

 

(c)

a
warrant to purchase common stock of Parent;

 

(d)

an
Advance Request with respect to the Growth Capital Advance to be
made on the First Amendment Effective Date;

 

(e)

a
Joinder Agreement, duly executed by each New Borrower;

 

(f)

a copy of the Inventory Financing Agreement, as in
effect with NextGear Capital as of the First Amendment Effective
Date, and all schedules, exhibits, annexes, appendices and
amendments thereto, all side letters and material ancillary
agreements entered into in connection therewith (other than the
Wholesale Inventory Financing Intercreditor Agreement), and a copy of any consent, waiver or
modification pursuant to or guaranty or collateral security
document entered into by another Borrower in connection with such
Inventory Financing Agreement and the Wholesale
Transaction;

 

(g)

a
duly executed certificate of an officer, manager or member of each
Borrower certifying and attaching copies of (A) the Charter,
certified as of a recent date by the jurisdiction of organization
of such Borrower; (B) the bylaws, operating agreement or similar
governing document of such Borrower; (C) resolutions of such
Borrower’s Board, members or managers, evidencing approval of
(1) this Amendment or the Joinder Agreement, as applicable, and
with respect to Parent and (2) the warrant issued in connection
with this Amendment and issuance of Equity Interests in accordance
with its terms; (D) resolutions of the holders of such
Borrower’s Equity Interests in connection with the
transactions contemplated by this Agreement, to the extent required
pursuant to the terms of the Charter or other governing document,
in each case, as in effect as of the First Amendment Effective
Date; and (E) a schedule setting forth the name, title and specimen
signature of officers or other authorized signers on behalf of such
Borrower to the extent not already delivered to Agent;

 

(h)

true
and complete copies of fully executed Wholesale Transaction
Documents; and

 

(i)

an
updated Budget giving pro forma effect to the Wholesale
Transaction, acceptable to Agent.

 

4.

Agent
shall have received satisfactory evidence that all Indebtedness to
be repaid pursuant to the terms of the Wholesale Transaction
Documents shall have been paid in full, and all Liens granted in
connection therewith shall have been terminated, and arrangements
with respect to any filings evidencing such terminations
satisfactory to Agent shall have been made.

 

 

 

 

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

 

 

 

 

 

 

 

 

APPENDIX II

POST-CLOSING DELIVERIES

 

1.

Within 30 days of the First Amendment Effective
Date, Agent shall have received landlord waivers and bailee
agreements as required pursuant to Section 7.11
of the Loan Agreement with respect to
any locations maintained by a New Borrower.

 

2.

Within 30 days of the First Amendment Effective
Date, Agent shall have received Account Control Agreements with
respect to all Deposit Accounts and any accounts where Investment
Property is maintained, as required by Section 7.12
of the Loan Agreement, with respect to
Deposit accounts or accounts where Investment Property is
maintained as may be maintained by any New
Borrower.

 

3.

Within 30 days of the First
Amendment Effective Date, Agent shall have received certificate of
insurance and endorsements with respect to each New Borrower as
required by Section
6.2 of the
Loan Agreement, with respect to insurance required to be maintained
by any New Borrower.

 

4.

Within
30 days of the First Amendment Effective Date, Agent shall have
received the duly executed Wholesale Inventory Financing
Intercreditor Agreement, duly executed by the parties thereto;
provided that Agent shall use best efforts to consent to and
execute and deliver such Wholesale Inventory Financing
Intercreditor Agreement (such consent, execution and delivery not
be unreasonably withheld, conditioned or delayed) and Agent shall
negotiate in good faith with NextGear Capital, Inc.

 

 

 

 

EXHIBIT C

 

NAME, LOCATIONS, AND OTHER INFORMATION FOR NEW
BORROWERS

 

1.

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

 

	

Name:

Type of organization:

State of organization:

Organization file number:

Fiscal year end:

Federal taxpayer identification number:

Former Name(s):

	

RMBL Express, LLC

limited liability company

Delaware

File #7091687

December 31

82-2190594

N/A

	
 

	
 

	

Name:

Type of organization:

State of organization:

Organization file number:

Fiscal year end:

Federal taxpayer identification number:

Former Name(s):

	

RMBLTennessee, LLC

limited liability company

Delaware

File #7076747

December 31

83-2073629

N/A

	
 

	
 

	

Name:

Type of organization:

State of organization:

Organization file number:

Fiscal year end:

Federal taxpayer identification number:

Former Name(s):

	

Wholesale Express, LLC

limited liability company

Tennessee

File#000824155

December 31

81-0798547

N/A

	
 

	
 

	

Name:

Type of organization:

State of organization:

Organization file number:

Fiscal year end:

Federal taxpayer identification number:

Former Name(s):

	

Wholesale, LLC

limited liability company

Tennessee

File#000445847

December 31

76-0729552

Wholesale, Inc.

 

 

2.

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

 

1350
Lakeshore Drive, Suite 160

Coppell,
TX 75019

 

3.

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

 

4521
Sharon Road

Suite
370

Charlotte,
North Carolina 28211

 

 

 

 

 

Wholesale Express,
LLC:

Woodfield Office
Park

29548
Southfield Road, Suite 200

Southfield,
Michigan 48076

 

7901-7905 Eastgate
Boulevard

Mount
Juliet, Tennessee 37122

 

1930
South Alma School Road, Suite A-206

Mesa,
Arizona 85210

 

Wholesale,
LLC:

 

7
Industrial Parkway, Unit No. 24

 

Livingston, New Jersey 07039

 

Richmond
Professional Suites

711 S 11th St,
Suite 101

Richmond, Texas
77469

 

1809
Gallatin Pike

 

Nashville, Tennessee

 

8037
Eastgate Boulevard

Mount
Juliet, Tennessee 37122

 

Bailee
locations: None.

 

 

 

 

 

EXHIBIT D

 

NEW BORROWERS’ PATENTS, TRADEMARKS, COPYRIGHTS AND
LICENSES

 

PATENTS

 

None.

 

TRADEMARKS

 

None.

 

COPYRIGHTS

 

None.

 

LICENSES

 

	

Company

 

	

Type of License

 

	

Description of License Agreement

 

	

Wholesale,
LLC

	

In-bound
license

	

Master
Data License Agreement by and between Manheim Remarketing, Inc. and
Wholesale, Inc., dated April 11, 2017

 

 

 

EXHIBIT E

 

DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS

 

[On file with Agent]

 

 

 

 

 

 

 

 

 

EXHIBIT F

 

COMPLIANCE CERTIFICATE

 

Hercules Capital, Inc.

400 Hamilton Avenue, Suite 310

Palo Alto, CA 94301

 

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

 

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

 

	

REPORTING REQUIREMENT

 

	

REQUIRED

 

	

CHECK IF ATTACHED

 

	

Monthly Financial Statements (Section 7.1(a))

 

	

Monthly, within 30 days

 

	

☐

 

 

 

 

	

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

 

	

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

 

	

☐

 

 

 

 

	

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

 

	

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

 

	

☐

 

 

 

 

 

 

 

 

	

Compliance Certificate (Section
7.1(d))

 

	

Together with Monthly or Quarterly Statements

 

	

☐

 

 

 

 

	

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

 

	

Monthly, within 30 days

 

	

☐

 

 

 

 

	

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

 

	

Monthly, within 30 days

 

	

☐

 

 

 

 

	

Budget and Projections (Section
7.1(g))

 

	

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

 

	

☐

 

 

 

 

	

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

 

	

Every Business Day

 

	

☐

 

 

 

 

	

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

 

	

When received

 

	

☐

 

 

 

 

	

FINANCIAL COVENANTS

 

	

REQUIRED

 

	

ACTUAL

 

	

Minimum Cash / Minimum Gross Profit and EBITDA (prior to Tranche
III Advance)

 

	

Maintain levels of Gross Profit and EBITDA set forth in
Section 7.21(a),
tested quarterly: [is met/not met/not required to be
met];

OR

Maintain Minimum Cash of at least $10,000,000: [is met/not met/not
required to be met]

 

	

☐ not
applicable

 

 

 

As of most recent fiscal quarter ended:

Required Gross Profit

$                        

Actual Gross Profit

$                        

Required EBITDA

$                        

Actual EBITDA

$                        

 

 

 

Unrestricted First Lien Cash: $ 

 

 

 

 

 

	

Minimum Quarterly Revenue (after Tranche III Advance)

 

	

75% of Budget

 

	

☐ not
applicable

Budget Quarterly Revenue

$                        

Actual Quarterly Revenue

$                        

% of Budget

 

	

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

 

	

$2,000,000

 

	

☐ not
applicable

$                        

 

	

OTHER COVENANTS

 

	

REQUIRED

 

	

ACTUAL

 

	

Equipment Financing

 

	

Not to exceed $1,000,000 outstanding at any time

 

	

$                        

 

	

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

 

	

Not to exceed $500,000 outstanding at any time

 

	

$                        

 

	

Acquired Indebtedness

 

	

Not to exceed $250,000 outstanding at any time

 

	

$                        

 

	

Other Indebtedness

 

	

Not to exceed $2,000,000 (less on Equipment Financing, Letters of
Credit and Acquired Indebtedness outstanding) outstanding at any
time

 

	

$                        

 

	

Qualified Inventory Financing

 

	

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

 

	

(1) Aggregate Inventory value:

$                        

(2) Aggregate Inventory financing Lender cash
collateral

$                        

Maximum Inventory financing permitted (line 1 less line
2)

$                        

Actual Inventory financing amount outstanding

$                        

 

	

Wholesale Inventory Financing

 

	

Not to exceed $75,000,000 outstanding at any time

 

	

$                        

 

 

 

 

 

	

Repurchases of stock from employees, directors or
consultants

 

	

Not to exceed $100,000 in any fiscal year (excluding repurchases in
connection with the Wholesale Transaction Documents, which
repurchases shall not count toward this cap)

 

	

$                        

 

	

Joint Ventures

 

	

Cash contributions not to exceed $750,00 in any fiscal
year

 

	

$                        

 

	

Additional Investments

 

	

Not to exceed $1,500,000 (less Repurchases and Joint Ventures made
during the term) during the term

 

	

$                        

 

	

Investments in Foreign Subsidiaries

 

	

As approved by Agent

 

	

$                        

 

	

Cash Collateral and Security Deposits

 

	

Not to exceed $500,000 at any time

 

	

$                        

 

	

Landlord Waivers and Bailee Agreements

 

	

For locations where Collateral (other than non-Inventory vehicles)
in excess of $750,000 is maintained

 

	

☐ all applicable
locations covered

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

 

 

 

 

 

 

 

 

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

 

	
 

	
 

	

Depository AC #

	

Financial Institution

	

Account Type (Depository / Securities)

	

Last Month Ending Account Balance

	

Purpose of Account

	

BORROWER Name/Address:

	
 

	
 

	

1

	
 

	
 

	
 

	
 

	
 

	

2

	
 

	
 

	
 

	
 

	
 

	

3

	
 

	
 

	
 

	
 

	
 

	

4

	
 

	
 

	
 

	
 

	
 

	

5

	
 

	
 

	
 

	
 

	
 

	

6

	
 

	
 

	
 

	
 

	
 

	

7

	
 

	
 

	
 

	
 

	
 

	
 

	

BORROWER SUBSIDIARY COMPANY Name/Address

	
 

	
 

	

1

	
 

	
 

	
 

	
 

	
 

	

2

	
 

	
 

	
 

	
 

	
 

	

3

	
 

	
 

	
 

	
 

	
 

	

4

	
 

	
 

	
 

	
 

	
 

	

5

	
 

	
 

	
 

	
 

	
 

	

6

	
 

	
 

	
 

	
 

	
 

	

7

	
 

	
 

	
 

	
 

	
 

	
 

 

 

 

 

SCHEDULE
1.1

 

COMMITMENTS

 

	

LENDER

 

	

TRANCHE I COMMITMENT

 

	

TRANCHE II COMMITMENT

 

	

TRANCHE III COMMITMENT

 

	

TRANCHE IV COMMITMENT

 

	

Hercules Capital, Inc.

 

	

$5,000,000

 

	

$5,000,000

 

	

$5,000,000

 

	

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

 

	

TOTAL COMMITMENTS

 

	

$5,000,000

 

	

$5,000,000

 

	

$5,000,000

 

	

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

 

 

 

 

 

SCHEDULE
5.14

 

SUBSIDIARIES

 

RMBL
Express, LLC, a Delaware limited liability company

 

RMBL
Tennessee, LLC, a Delaware limited liability company

 

Wholesale,
LLC, a Tennessee limited liability company

 

Wholesale
Express, LLC, a Tennessee limited liability companyBlueprint

Exhibit 10.6 

 

FORM OF

SECURITIES PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (this “Agreement”)
is dated as of October 25, 2018, between RumbleOn, Inc., a Nevada
corporation (the “Company”),
and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser”
and collectively the “Purchasers”).

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant
to an exemption from the registration requirements of Section 5 of
the Securities Act (as defined below) contained in Section 4(a)(2)
thereof and/or Regulation D thereunder, the Company desires to
issue and sell to each Purchaser, and each Purchaser, severally and
not jointly, desires to purchase from the Company, securities of
the Company as more fully described in this Agreement;
and

 

WHEREAS, in
connection with the offering, the Company, together with National
Securities Corporation and Craig Hallum Capital Group LLC
(collectively, the “Placement Agents”), have
entered into an escrow agreement, in the form attached hereto as
Exhibit A (the
“Escrow
Agreement”), with Continental Stock Transfer &
Trust Company (the “Escrow Agent”), to hold
the Subscription Amount (as defined below), to be released at the
Closing (as defined below) to the Company in accordance with the
Escrow Agreement.

 

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company
and each Purchaser agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1 Definitions. In
addition to the terms defined elsewhere in this Agreement, for all
purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:

 

“Action”
means any action, suit, inquiry, notice of violation, proceeding or
investigation pending or threatened before or by any court,
arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign).

 

“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act.

 

“Board of
Directors” means
the board of directors of the Company.

 

“Business
Day” means any day
except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by
law or other governmental action to close.

 

“Closing”
means the closing of the purchase and sale of the Shares pursuant
to Section 2.1.

 

“Closing
Date” means the
Trading Day on which all of the Subscription Documents have been
executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers’ obligations to pay the Subscription
Amount and (ii) the Company’s obligations to deliver the Shares,
in each case, have been satisfied or waived, but in no event later
than the third Trading Day following the date hereof.

 

“Commission”
means the United States Securities and Exchange
Commission.

 

“Common
Stock” means the
Class B Common Stock of the Company, par value $0.001 per share,
and any other class of securities into which such securities may
hereafter be reclassified or changed.

 

“Company
Counsel” means
Akerman LLP, with offices located at 350 East Las Olas Boulevard,
Fort Lauderdale, Florida 33301.

 

“Disqualification Events”
shall have the meaning ascribed to such term in Section
3.1(o).

 

“Effectiveness Period”
shall have the meaning ascribed to such term in Section
5.1(b).

 

 

A-1

 

 

“Event
Date” shall have the
meaning ascribed to such terms in Section
5.1(c).

 

“Exchange
Act” means the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

 

“Initial Filing Date”
shall have the meaning ascribed to such term in Section
5.1(a).

 

“Intellectual Property
Rights” shall have the
meaning ascribed to such term in Section
3.1(q).

 

“Investor
Questionnaire”
means the investor questionnaire attached hereto as Exhibit B.

 

“GAAP”
shall have the meaning ascribed to such term in Section
3.1(h).

 

“Liens”
means a lien, charge, pledge, security interest, encumbrance, right
of first refusal, preemptive right or other
restriction.

 

“Lock-up Agreement” shall
have the meaning ascribed to such term in Section
4.10.

 

“Material Adverse
Effect” means (i)
a material adverse effect on the legality, validity or
enforceability of any Subscription Document, (ii) a material
adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and
the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s
ability to perform in any material respect on a timely basis its
obligations under any Subscription Document.

 

“Per Share Purchase
Price” equals
$7.10, subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement but
before the Closing Date.

 

“Person”
means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or
partial proceeding, such as a deposition), whether commenced or
threatened.

 

“Registrable Securities”
shall have the meaning ascribed to such term in Section
5.1(a).

 

“Registration Statement”
shall have the meaning ascribed to such term in Section
5.1(a).

 

“Required
Approvals” shall
have the meaning ascribed to such term in Section
3.1(e).

 

“Risk
Factors” means the
risk factors attached hereto as Exhibit C.

 

“Rule
144” means Rule
144 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.

 

“Rule
424” means Rule
424 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.

 

“SEC
Reports” shall
have the meaning ascribed to such term in Section
3.1(h).

 

“Securities
Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

 

“Shares”
means the shares of Common Stock issued to each Purchaser pursuant
to this Agreement.

 

“Short
Sales” means all
“short sales” as defined in Rule 200 of
Regulation SHO under the Exchange Act (but shall not be deemed to
include the location and/or reservation of borrowable shares of
Common Stock).

 

 

A-2

 

 

“Solicitor”
shall have the meaning ascribed to such term in Section
3.1(o).

 

“Subscription
Amount” means, as
to each Purchaser, the amount to be paid for Shares purchased
hereunder as specified below such Purchaser’s name on the signature page of this
Agreement and next to the heading “Subscription Amount,” in United States dollars and in
immediately available funds.

 

“Subscription
Documents” means
this Agreement, any other documents or agreements executed in
connection with the transactions contemplated
hereunder.

 

“S-1 Registration
Statement” shall have the meaning ascribed to such
term in Section 5.1(a).

 

“S-3 Registration
Statement” shall have the meaning ascribed to such
term in Section 5.1(a).

 

“Subsidiary”
means any subsidiary of the Company as set forth in the SEC
Reports, and shall, where applicable, also include any direct or
indirect subsidiary of the Company formed or acquired after the
date hereof.

 

“Trading
Day” means a day
on which the principal Trading Market is open for
trading.

 

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

 

“Transaction
Documents” means
the Company’s presentation dated September 2018 and the form
of agreements, including exhibits thereto, in connection with the
Company’s proposed acquisition of Wholesale Holdings, Inc.
and Wholesale Express, LLC.

 

“Transfer
Agent” means West
Coast Stock Transfer, Inc., the current transfer agent of the
Company, with a mailing address of 721 N. Vulcan Avenue, Suite 205,
Encinitas, California 92024, and any successor transfer agent of
the Company.

 

“Variable Rate
Transactions” shall have the meaning ascribed to such
term in Section 4.9.

 

ARTICLE II

PURCHASE AND
SALE

 

2.1 Closing. On the
Closing Date, upon the terms and subject to the conditions set
forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company
agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, up to an aggregate of $23,000,000 of Shares in
increments of $100,000, subject to lesser amounts being accepted at
the Company’s discretion; provided, however, that the number of Shares sold
pursuant to this Agreement shall not exceed 19.9% of the
Company’s issued and outstanding shares of Class A Common
Stock of the Company, par value $0.001 per share, and Common Stock
at the time of Closing, on a pre-transaction basis. On or prior to
the Closing Date, each Purchaser shall deliver to the Escrow Agent
such Purchaser’s
Subscription Amount via wire transfer of immediately available
funds in accordance with the Escrow Agreement. On the Closing Date,
each Purchaser shall release such Purchaser’s Subscription
Amount from escrow in accordance with the Escrow Agreement and the
Company shall deliver to each Purchaser its respective Shares as
determined pursuant to Section 2.2(a), and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2.
Upon satisfaction of the covenants and conditions set forth in
Sections 2.2 and 2.3, the Closing shall occur at the offices of
Company Counsel or such other location as the parties shall
mutually agree.

 

2.2 Deliveries.

 

(a) On or prior to the
Closing Date, the Company shall deliver or cause to be delivered to
each Purchaser the following:

 

(i) this Agreement duly
executed by the Company; and

 

(ii) a
copy of the irrevocable instructions to the Transfer Agent
instructing the Transfer Agent to issuance in book entry form the
Shares equal to such Purchaser’s Subscription Amount divided by the
Per Share Purchase Price, registered in the name of such
Purchaser.

 

 

A-3

 

 

(b) On or prior to the
Closing Date, each Purchaser shall deliver or cause to be delivered
the following:

 

(i) to the Company, a
completed Investor Questionnaire;

 

(ii) to
the Company, this Agreement duly executed by such
Purchaser;

 

(iii) to
the Escrow Agent, such Purchaser’s Subscription Amount by
wire transfer of immediately available funds in accordance with the
Escrow Agreement; and

 

(iv) to
the Company, such Purchaser’s Subscription Amount by release
of such Purchaser’s Subscription Amount from escrow in
accordance with the Escrow Agreement.

 

2.3 Closing
Conditions.

 

(a) The obligations of
the Company hereunder in connection with the Closing are subject to
the following conditions being met:

 

(i) the accuracy in all
material respects (or, to the extent representations or warranties
are qualified by materiality or Material Adverse Effect, in all
respects) on the Closing Date of the representations and warranties
of the Purchasers contained herein (unless as of a specific date
therein in which case they shall be accurate as of such
date);

 

(ii) all
obligations, covenants and agreements of each Purchaser required to
be performed at or prior to the Closing Date shall have been
performed; and

 

(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b)
of this Agreement.

 

(b) The respective
obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being
met:

 

(i) the accuracy in all
material respects (or, to the extent representations or warranties
are qualified by materiality or Material Adverse Effect, in all
respects) when made and on the Closing Date of the representations
and warranties of the Company contained herein (unless as of a
specific date therein in which case they shall be accurate as of
such date);

 

(ii) all
obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been
performed;

 

(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement;

 

(iv) there
shall have been no Material Adverse Effect with respect to the
Company since the date hereof; and

 

(v) from the date
hereof to the Closing Date, trading in the Common Stock shall not
have been suspended by the Commission or the Company’s principal Trading Market, and, at
any time prior to the Closing Date, trading in securities generally
as reported by Bloomberg L.P. shall not have been suspended or
limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any
Trading Market, nor shall a banking moratorium have been declared
either by the United States or New York State authorities nor shall
there have occurred any material outbreak or escalation of
hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any
financial market which, in each case, in the reasonable judgment of
such Purchaser, makes it impracticable or inadvisable to purchase
the Shares at the Closing.

 

 

A-4

 

 

ARTICLE III

REPRESENTATIONS AND
WARRANTIES

 

3.1 Representations and
Warranties of the Company. Except as set forth in the SEC
Reports, which SEC Reports shall be deemed a part hereof and shall
qualify any representation or otherwise made herein to the extent
of the disclosure contained in the SEC Reports, or as set forth in
the Schedules attached hereto, the Company hereby makes the
following representations and warranties to each
Purchaser:

 

(a) Organization and
Qualification. The Company and each of the Subsidiaries is
an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation or organization, with the requisite power and
authority to own and use its properties and assets and to carry on
its business as described in the SEC Reports. Neither the Company
nor any Subsidiary is in violation nor default of any of the
provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.
Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation
or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be
expected to result in a Material
Adverse Effect.

 

(b) Authorization;
Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Subscription
Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and each
of the other Subscription Documents by the Company and the
consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders in connection
herewith or therewith other than in connection with the Required
Approvals. This Agreement and each other Subscription Document to
which the Company is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited
by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.

 

(c) No Conflicts.
The execution, delivery and performance by the Company of this
Agreement and the other Subscription Documents to which it is a
party, the issuance and sale of the Shares and the consummation by
it of the transactions contemplated hereby and thereby do not and
will not (i) conflict with or violate any provision of the
Company’s or any
Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or
charter documents, (ii) conflict with, or constitute a default (or
an event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the
properties or assets of the Company or any Subsidiary, or give to
others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or
by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse
Effect.

 

(d) Conduct of Business. Since June
30, 2018, the Company has conducted its business in the ordinary
course materially consistent with past practice. Since June 30,
2018, there has not been any Material Adverse Effect with respect
to the Company or any of its Subsidiaries nor has there occurred
any event that is reasonably likely to result in a Material Adverse
Effect with respect to the Company or any of its
Subsidiaries.

 

(e) Filings, Consents and
Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the
Company of the Subscription Documents, other than: (i) the filings
required pursuant to Section 4.3 of this Agreement, (ii)
application(s) to each applicable Trading Market for the listing of
the Shares for trading thereon in the time and manner required
thereby, and (iii) such filings as are required to be made under
applicable state securities laws (collectively, the “Required
Approvals”).

 

 

A-5

 

 

(f) Issuance of the
Shares. The Shares are duly authorized and, when issued and
paid for in accordance with the applicable Subscription Documents,
will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens imposed by the Company.

 

(g) Capitalization.
The capitalization of the Company is as set forth in the SEC
Reports. Except as provided for in the Transaction Documents, the
Company has not issued any capital stock since its most recently
filed periodic report under the Exchange Act, other than pursuant
to the vesting and delivery of awards under the Company’s employee equity plans outstanding
as of the date of the most recently filed periodic report under the
Exchange Act. No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate
in the transactions contemplated by the Subscription
Documents.

 

(h) SEC Reports; Financial
Statements. Since January 9, 2017, the Company has filed all
reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof
(the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, being collectively
referred to herein as the “SEC
Reports”), on a
timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of
the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of
the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present
in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.

 

(i) Disclosure Controls. The
Company maintains disclosure controls and procedures as required by
Rule 13a-15 or 15d-15 under the Exchange Act. Such disclosure
controls and procedures are effective to ensure that all
information required to be disclosed by the Company is recorded and
reported on a timely basis to the individuals responsible for the
preparation of the SEC Reports and other public disclosure
documents. The Company maintains internal control over financial
reporting (as defined in Rule 13a-15 or 15d-15, as applicable,
under the Exchange Act). Such internal control over financial
reporting is effective in providing reasonable assurance regarding
the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP
and includes policies and procedures that (i) pertain to the
maintenance of records that are in reasonable detail and accurately
and fairly reflect the transactions and dispositions of the assets
of the Company, (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company, and
(iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on its
financial statements. No attorney representing the Company or any
of its Subsidiaries, whether or not employed by the Company or any
of its Subsidiaries, has reported evidence of a violation of
securities laws, breach of fiduciary duty or similar violation by
the Company or any of its officers, directors, employees or agents
pursuant to the rules adopted pursuant to Section 307 of the
Sarbanes-Oxley Act.

 

(j) Internal Controls. The Company
has disclosed, based on the most recent evaluation by its chief
executive officer and its chief financial officer prior to the date
hereof, to the Company’s auditors and the Audit Committee of
Board of Directors (i) any significant deficiencies in the
design or operation of its internal controls over financial
reporting that are reasonably likely to adversely affect the
Company’s ability to record, process, summarize and report
financial information and has identified for the Company’s
auditors and Audit Committee of the Board of Directors any material
weaknesses in internal control over financial reporting and
(ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the
Company’s internal control over financial reporting. The
Company has delivered to the Company prior to the date hereof

(A) a complete and correct summary of any
such disclosure and (B) any material communication made by
management or the Company’s auditors to the Audit Committee
of the Board of Directors required or contemplated by listing
standards of Trading Market, the Audit Committee’s charter or
professional standards of the Public Company Accounting Oversight
Board. No material complaints from any source regarding accounting,
internal accounting controls or auditing matters, and no concerns
from the Company’s employees regarding questionable
accounting or auditing matters, have been received by the Company
or, to the knowledge of the Company, the Company’s
independent registered public accounting firm.

 

 

A-6

 

 

(k) Trading Market. The Company is
in compliance in all material respects with the applicable listing
and corporate governance rules and regulations of Trading Market.
From January 1, 2017 through the date hereof, the Company has not
received any comment letter from the Commission or the staff
thereof or, except as disclosed in the SEC Reports, any
correspondence from the Trading Market or the staff thereof
relating to the delisting or maintenance of listing of Common Stock
on Trading Market, other than such disclosures or documents that
can be obtained on the Commission’s website at www.sec.gov.
The Company has not taken and will not take any action designed to
or that might reasonably be expected to cause or result in an
unlawful manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.

 

(l) Certain Fees.
Except as set forth on Schedule 3.1(l), no brokerage or
finder’s fees or
commissions are or will be payable by the Company or any Subsidiary
to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Subscription Documents. The
Purchasers shall have no obligation with respect to any fees or
with respect to any claims made by or on behalf of other Persons
for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by the Subscription
Documents.

 

(m) Investment
Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Shares, will not be or
be an Affiliate of, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended. The Company shall
conduct its business in a manner so that it will not become an
“investment
company” subject to
registration under the Investment Company Act of 1940, as
amended.

 

(n) Registration
Rights. Except as set forth in the SEC Reports, the
Transaction Documents and Section 5.1 of this Agreement, no
Person has any right to cause the Company or any Subsidiary to
effect the registration under the Securities Act of any securities
of the Company or any Subsidiary.

 

(o) No “Bad Actor”
Disqualification. The Company has exercised reasonable care,
in accordance with Commission rules and guidance, and has conducted
a factual inquiry, the nature and scope of which reflect reasonable
care under the relevant facts and circumstances, to determine
whether any Covered Person (as defined below) is subject to any of
the “bad actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act
(“Disqualification
Events”). To the Company’s knowledge, after
conducting such sufficiently diligent factual inquiries, no Covered
Person is subject to a Disqualification Event, except for a
Disqualification Event covered by Rule 506(d)(2) or (d)(3) under
the Securities Act. The Company has complied, to the extent
applicable, with any disclosure obligations under Rule 506(e) under
the Securities Act. “Covered Persons” are
those persons specified in Rule 506(d)(1) under the Securities Act,
including the Company; any predecessor or affiliate of the Company;
any director, executive officer, other officer participating in the
offering, general partner or managing member of the Company; any
beneficial owner of 20% or more of the Company’s outstanding
voting equity securities, calculated on the basis of voting power;
any promoter (as defined in Rule 405 under the Securities Act)
connected with the Company in any capacity at the time of the sale
of the Shares; and any person that has been or will be paid
(directly or indirectly) remuneration for solicitation of
purchasers in connection with the sale of the Shares (a
“Solicitor”), any general
partner or managing member of any Solicitor, and any director,
executive officer or other officer participating in the offering of
any Solicitor or general partner or managing member of any
Solicitor.

 

(p) Information Provided. The
Company confirms that, to its knowledge, with the exception of (i)
the proposed sale of the Shares under this Agreement and the
Subscription Documents relating thereto and (ii) the potential
acquisition of a business disclosed to the Purchasers and the
Transaction Documents relating thereto, neither the Company nor any
other persons acting on its behalf has provided any of the
Purchasers or their agents or counsel with any information that
constitutes or might constitute material, nonpublic information.
The Company further confirms that until public disclosure of the
events described in (i) and (ii) above, the Purchasers will be
restricted by the insider trading prohibitions under the Exchange
Act from trading or “tipping” on the basis of such
information.

 

 

A-7

 

 

(q) Intellectual Property. Except
as would not reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Effect, the Company owns or
possesses or has valid rights to use all patents, trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses, trade secrets and similar
rights (“Intellectual Property
Rights”), if any, necessary for the conduct of the
business of the Company as currently carried on and as described in
the Company’s SEC Reports. To the knowledge of the Company,
no action or use by the Company necessary for the conduct of its
business as currently carried on and as described in the
Company’s SEC Reports infringes any Intellectual Property
Rights of others. Except as would not reasonably be expected to
result, individually or in the aggregate, in a Material Adverse
Effect, the Company has not received any notice alleging any such
infringement with asserted Intellectual Property Rights of others.
Except as would not reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Effect (A) to the
knowledge of the Company, there is no infringement,
misappropriation or violation by third parties of any of the
Intellectual Property Rights owned by the Company; (B) there is no
pending or, to the knowledge of the Company, threatened action,
suit, proceeding or claim by others challenging the rights of the
Company in or to any such Intellectual Property Rights, and the
Company is unaware of any facts which would form a reasonable basis
for any such claim, that would, individually or in the aggregate,
together with any other claims in this Section 3.1(q), reasonably
be expected to result in a Material Adverse Effect; (C) the
Intellectual Property Rights owned by the Company and, to the
knowledge of the Company, the Intellectual Property Rights licensed
to the Company, have not been adjudged by a court of competent
jurisdiction invalid or unenforceable, in whole or in part, and
there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property Rights, and
the Company is unaware of any facts which would form a reasonable
basis for any such claim that would, individually or in the
aggregate, together with any other claims in this Section 3.1(q),
reasonably be expected to result in a Material Adverse Effect; (D)
there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others that the
Company infringes, misappropriates or otherwise violates any
Intellectual Property Rights or other proprietary rights of others,
the Company has not received any written notice of such claim and
the Company is unaware of any other facts which would form a
reasonable basis for any such claim that would, individually or in
the aggregate, together with any other claims in this Section
3.1(q), reasonably be expected to result in a Material Adverse
Effect; and (E) to the Company’s knowledge, no employee of
the Company is in violation in any material respect of any term of
any employment contract, patent disclosure agreement, invention
assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to
or with a former employer where the basis of such violation relates
to such employee’s employment with the Company, or actions
undertaken by the employee while employed with the Company and
could reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Effect. To the Company’s
knowledge, all material trade secrets developed by and belonging to
the Company which have not been patented have been kept
confidential. The Company is not a party to or bound by any
options, licenses or agreements with respect to the Intellectual
Property Rights of any other person or entity that are required to
be set forth in the Company’s SEC Reports and are not
described therein. To the Company’s knowledge, none of the
technology employed by the Company has been obtained or is being
used by the Company in violation of any contractual obligation
binding on the Company or any of its officers, directors or
employees, or otherwise in violation of the rights of any
persons.

 

3.2 Representations and
Warranties of the Purchasers. Each Purchaser, for itself and
for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows
(unless as of a specific date therein, in which case they shall be
accurate as of such date):

 

(a) Organization;
Authority. Each Purchaser is either an individual or an
entity duly incorporated or formed, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
formation with full right, corporate, partnership, limited
liability company or similar power and authority to enter into and
to consummate the transactions contemplated by this Agreement and
otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and performance by
such Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate, partnership,
limited liability company, investment management agreement or
similar action, as applicable, on the part of such Purchaser. Each
Subscription Document to which it is a party has been duly executed
by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Purchaser, enforceable against
it in accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited
by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by
applicable law.

 

(b) Investment
Purpose. Each Purchaser is
acquiring the Shares for its own account for investment only and
not with a view towards, or for resale in connection with, the
public sale or distribution thereof. Each Purchaser acknowledges
that the Shares will be issued in book entry form with a notation
of restriction as set forth in Section 4.1.

 

 

A-8

 

 

(c) Experience
of Such Purchaser. Such Purchaser, either alone or together
with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the merits and risks of the prospective investment in
the Shares, and has so evaluated the merits and risks of such
investment. Such Purchaser is able to bear the economic risk of an
investment in the Shares and, at the present time, is able to
afford a complete loss of such investment.

 

(d)    Accredited
Investor Status.  Each
Purchaser is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D, as promulgated
under the Securities Act and has delivered to the Company a completed
Investor Questionnaire.

 

(e)     Reliance
on Exemptions.  Each
Purchaser understands that the Shares are being offered and sold to
it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of,
and each Purchaser’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of each
Purchaser set forth herein in order to determine the availability
of such exemptions and the eligibility of each Purchaser to acquire
the Shares.

 

(f)   Information.
Each Purchaser and its representatives, if any, have been furnished
with all materials relating to the business, finances and
operations of the Company and other information each Purchaser
deemed material to making an informed investment decision regarding
its purchase of the Shares, which have been requested by each
Purchaser.  Purchaser acknowledges that it has reviewed a copy
of the Subscription Documents, including the Risk Factors, the
Transaction Documents and the SEC Reports. Each Purchaser and
its advisors, if any, have been afforded the opportunity to ask
questions of the Company and its management. Neither such
inquiries, nor any other due diligence investigations conducted by
any Purchaser or its advisors, if any, or its representatives,
shall modify, amend or affect each Purchaser’s right to rely
on the Company’s representations and warranties contained in
Section 3.1.  Each Purchaser understands that its investment
in the Shares involves a high degree of risk.  Each Purchaser
has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with
respect to its acquisition of the Shares.

 

(g)  General
Solicitation.  Each
Purchaser is not purchasing the Shares as a result of any
advertisement, article, notice or other communication regarding the
Shares published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or
any other general solicitation or general
advertisement. 

 

(h) Company Affiliated Investors.
Each Purchaser acknowledges that certain officers and directors of
the Company may purchase Shares pursuant to this
Agreement.

 

(i) No Governmental Review. Each
Purchaser understands that no United States federal or state
governmental authority has passed on or made any recommendation or
endorsement of the Shares, or the fairness or suitability of the
investment in the Shares, nor have such governmental authorities
passed upon or endorsed the merits of the offering of the
Shares.

 

(j) Certain Transactions
and Confidentiality. Other than consummating the
transactions contemplated hereunder, each Purchaser has not, nor
has any Person acting on behalf of or pursuant to any understanding
with such Purchaser, directly or indirectly executed any purchases
or sales, including Short Sales, of the securities of the Company
during the period commencing as of the time that such Purchaser
first received a term sheet (written or oral) from the Company or
any other Person representing the Company setting forth the
material terms of the transactions contemplated hereunder and
ending immediately prior to the execution hereof. Other than to
other Persons party to this Agreement or to such
Purchaser’s
representatives, including, without limitation, its officers,
directors, partners, legal and other advisors, employees, agents
and Affiliates, such Purchaser has maintained the confidentiality
of all disclosures made to it in connection with this transaction
(including the existence and terms of this
transaction).

 

ARTICLE IV

OTHER AGREEMENTS OF
THE PARTIES

 

4.1 Transfer and Restrictive
Legend.

 

(a) The Shares may only
be disposed of in compliance with state and federal securities
laws. In connection with any transfer of Shares other than pursuant
to an effective registration statement, the Company may require the
transferor thereof to provide to the Company an opinion of counsel
selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Shares
under the Securities Act.

 

 

A-9

 

 

(b) The Purchasers
agree to a restrictive notation on the Shares to be issued in book
entry form as follows:

 

THESE
SHARES HAVE BEEN ACQUIRED FROM THE ISSUER WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) AND ARE RESTRICTED SHARES AS THAT TERM IS DEFINED UNDER
RULE 144, PROMULGATED UNDER THE SECURITIES ACT. THESE SHARES MAY
NOT BE SOLD, PLEDGED, TRANSFERRED, DISTRIBUTED, OR OTHERWISE
DISPOSED OF IN ANY MANNER UNLESS SUCH TRANSACTION IS (I) REGISTERED
UNDER THE SECURITIES ACT, (II) UNLESS SOLD PURSUANT TO RULE 144 OR
RULE 144A UNDER SAID ACT, OR (III) SOLD PURSUANT TO A VALID
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS AS EVIDENCED BY AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE ISSUER, STATING
THAT THE TRANSFER DOES NOT INVOLVE A TRANSACTION REQUIRING
REGISTRATION OF SUCH SHARES UNDER THE SECURITIES ACT.

 

4.2 Integration.
The Company shall not sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Shares in a manner that would require the
registration under the Securities Act of the sale of the Shares or
that would be integrated with the offer or sale of the Shares for
purposes of the rules and regulations of any Trading Market such
that it would require shareholder approval prior to the closing of
such other transaction unless shareholder approval is obtained
before the closing of such subsequent transaction.

 

4.3 Securities Laws
Disclosure; Publicity. On the Trading Day immediately
following the Closing Date, the Company shall file a Current Report
on Form 8-K (the “Announcement
8-K”), including
the Subscription Documents and the Transaction Documents with the
Commission. From and after the filing of the Announcement 8-K, the
Company represents to the Purchasers that it shall have publicly
disclosed all material, non-public information delivered to any of
the Purchasers by the Company or any of its Subsidiaries, or any of
their respective officers, directors, employees or agents in
connection with the transactions contemplated by the Subscription
Documents and the Transaction Documents.

 

4.4 Use of
Proceeds. The Company shall use the net proceeds from the
sale of the Shares hereunder as set forth in the Transaction
Documents and for working capital purposes.

 

4.5 Reservation of Common
Stock. As of the date hereof, the Company has reserved and
the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of
Common Stock for the purpose of enabling the Company to issue
Shares pursuant to this Agreement.

 

4.6 Listing of Common
Stock. The Company hereby agrees to use best efforts to
maintain the listing or quotation of the Common Stock on the
Trading Market on which it is currently listed, and concurrently
with the Closing, the Company shall apply to list or quote all of
the Shares on such Trading Market and promptly secure the listing
of all of the Shares on such Trading Market. The Company further
agrees, if the Company applies to have the Common Stock traded on
any other Trading Market, it will then include in such application
all of the Shares, and will take such other action as is necessary
to cause all of the Shares to be listed or quoted on such other
Trading Market as promptly as possible. The Company will then take
all action reasonably necessary to continue the listing and trading
of its Common Stock on a Trading Market and will comply in all
respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market. The
Company agrees to maintain the eligibility of the Common Stock for
electronic transfer through the Depository Trust Company or another
established clearing corporation, including, without limitation, by
timely payment of fees to the Depository Trust Company or such
other established clearing corporation in connection with such
electronic transfer.

 

4.7 Certain Transactions
and Confidentiality. Each Purchaser, severally and not
jointly with the other Purchasers, covenants that neither it nor
any Affiliate acting on its behalf or pursuant to any understanding
with it will execute any purchases, sales or effect any other
transactions, including Short Sales of any of the
Company’s securities
during the period commencing with the execution of this Agreement
and ending at such time that the transactions contemplated by the
Subscription Documents and Transaction Documents are first publicly
announced pursuant to the filing of the Announcement 8-K as
described in Section 4.3. Each Purchaser, severally and not jointly
with the other Purchasers, covenants that until such time as the
transactions contemplated by the Subscription Documents and
Transaction Documents are publicly disclosed by the Company
pursuant to the filing of the Announcement 8-K as described in
Section 4.3, such Purchaser will maintain the confidentiality of
the existence and terms of this transaction and the information
included in the Subscription Documents and Transaction
Documents.

 

 

A-10

 

 

4.8 Form D; Blue Sky
Filings. The Company agrees to timely file a Form D with
respect to the Shares as required under Regulation D and to provide
a copy thereof, promptly upon request of any Purchaser. The Company
shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for, or to qualify the
Shares for, sale to the Purchasers at the Closing under applicable
securities or “Blue
Sky” laws of the states
of the United States, and shall provide evidence of such actions
promptly upon request of any Purchaser.

 

4.9 Restriction on Variable Rate
Transactions. From the date hereof until the one-year
anniversary of the Closing Date, the Company shall be prohibited
from effecting or entering into an agreement to effect any issuance
by the Company or any of its subsidiaries of Common Stock or any
outstanding convertible instruments, options or warrants or similar
securities (or a combination of units thereof) involving a Variable
Rate Transaction. “Variable Rate
Transaction” means a transaction in which the Company
(i) issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the
right to receive additional shares of Common Stock either (A) at a
conversion price, exercise price or exchange rate or other price
that is based upon and/or varies with the trading prices of or
quotations for the shares of Common Stock at any time after the
initial issuance of such debt or equity securities, or (B) with a
conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such debt
or equity security or upon the occurrence of specified or
contingent events directly or indirectly related to the business of
the Company or the market for the Common Stock or (ii) enters into
any agreement, including, but not limited to, an agreement for an
equity line of credit or “at-the-market” offering,
whereby the Company may issue securities at a future determined
price (other than standard and customary “preemptive”
or “participation” rights and excluding any agreement
by the Company to issue shares of its Common Stock as consideration
in an acquisition, merger or similar business combination
transaction). For the avoidance of doubt, the issuance of a
security which is subject to customary anti-dilution protections,
including where the conversion, exercise or exchange price is
subject to adjustment as a result of stock splits, reverse stock
splits and other similar recapitalization or reclassification
events, shall not be deemed to be a “Variable Rate
Transaction.” Any Purchaser shall be entitled to obtain
injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect
damages.

 

4.10 Restriction
on Future Issuances. The Company agrees that, without the
prior written consent of the Private Placement Agents, it will not,
for a period of ninety (90) days after the date of the Closing
Date, (a) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of
capital stock of the Company or any securities convertible into or
exercisable or exchangeable for shares of capital stock of the
Company, (b) file or cause to be filed any registration statement
with the Commission relating to the offering of any shares of
capital stock of the Company or any securities convertible into or
exercisable or exchangeable for shares of capital stock of the
Company (except for registration statements on Form S-4 or Form S-8
and a resale registration statement on Form S-3 for the shares of
capital stock of the Company issued hereunder and pursuant to the
Transaction Documents) or (c) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of capital stock of the
Company, whether any such transaction described in clause (a), (b)
or (c) above is to be settled by delivery of shares of capital
stock of the Company or such other securities, in cash or
otherwise. The restrictions contained in this Section 4.10 shall
not apply to (A) sales of shares of capital stock of the
Company under any trading plan pursuant to Rule 10b5-1 under the
Securities Exchange Act of 1934, as amended, existing as of the
date of this Agreement or (B) dispositions or transfers of
shares of capital stock of the Company customarily excluded from
lock-up restrictions of this type. The restrictions contained in
this Section 4.10 shall not apply to (i) the Shares to be sold
hereunder, (ii) the issuance by the Company of shares of capital
stock of the Company upon the exercise of a stock option or warrant
or the conversion or vesting of a security outstanding on the date
hereof, (iii) the issuance by the Company of equity awards of the
Company under any equity compensation plan of the Company, (iv) the
issuance by the Company of shares of capital stock of the Company
or securities convertible into, exchangeable for or that represent
the right to receive shares of capital stock of the Company in
connection with the acquisition by the Company of the securities,
business, technology, property or other assets of another person or
entity, including the issuance by the Company of shares of capital
stock pursuant to the Transaction Documents, (v) the sale of shares
of capital stock of the Company to cover the payment of exercise
prices or the payment of taxes associated with the exercise or
vesting of equity awards under any equity compensation plan of the
Company, or (vi) the filing of a post-effective amendment to the
Company’s registration statements on Forms S-3 (Reg. Nos.
333-223425, 333-225217 and 333-226514) and Forms S-8 (Reg. No.
333-219203, 333-223428 and 333-226440) with the Commission to
maintain effectiveness of such registration statements, provided
that in each of (ii) and (iii) above, the underlying shares of
capital stock of the Company held by the Company’s directors
and officers shall be restricted from sale pursuant to the Lock-up
Agreement (defined below). The Company has caused to be delivered
to the Placement Agents prior to the date of this Agreement a
letter, in the form of Exhibit D hereto (the “Lock-Up Agreement”), from
each of the Company’s directors and executive officers. The
Company will enforce the terms of each Lock-Up Agreement and issue
stop-transfer instructions to the transfer agent for the Common
Stock with respect to any transaction or contemplated transaction
that would constitute a breach of or default under the applicable
Lock-Up Agreement.

 

 

A-11

 

 

ARTICLE V

REGISTRATION
RIGHTS

 

5.1 Registration Procedures and Expenses;
Liquidated Damages for Certain Events.

 

(a) The Company shall
prepare and file with the Commission, as promptly as reasonably
practicable following Closing, but in no event later than 30 days
following the date hereof (the “Initial Filing Date”), a
registration statement on Form S-3 (or any successor to Form S-3),
covering the resale of the Registrable Securities (as defined
below) (the “S-3
Registration Statement”) and as soon as reasonably
practicable thereafter but in no event later than 90 days following
the date hereof (180 days in the event of a review of the S-3
Registration Statement by the SEC), to effect such registration and
any related qualification or compliance with respect to all
Registrable Securities held by the Purchasers. For purposes of this
Agreement, the term “Registrable Securities”
shall mean (i) the Shares; and (iii) any Common Stock of the
Company issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in
replacement of, any Shares. In the event that Form S-3 (or any
successor form) is or becomes unavailable to register the resale of
the Registrable Securities at any time prior to the expiration of
the Purchasers’ registration rights pursuant to Article V,
the Company shall prepare and file with the SEC, as promptly as
reasonably practicable following the Closing but in no event later
than the Initial Filing Date, a registration statement on Form S-1
(or any successor to Form S-1), covering the resale of the
Registrable Securities (the “S-1 Registration
Statement” and collectively the S-3 Registration
Statement, the “Registration Statement”)
and as soon as reasonably practicable thereafter but in no event
later than 60 days following the date hereof (120 days in the event
of a review of the S-1 Registration Statement by the SEC), to
effect such registration and any related qualification or
compliance with respect to all Registrable Securities held by the
Purchasers. If the Company is not eligible to use Form S-3 at
Initial Filing Date, and the Company subsequently becomes eligible
to use Form S-3 during the Effectiveness Period (as defined below),
the Company shall file, as promptly as reasonably practicable, a
new S-3 Registration Statement covering the resale of the
Registrable Securities and replace the S-1 Registration Statement
with the new S-3 Registration Statement upon the effectiveness of
the new S-3 Registration Statement.

 

(b) The Company shall,
during the Effectiveness Period, use its reasonable best efforts
to:

 

(i) prepare and file
with the Commission such amendments and supplements to the
Registration Statement and the Prospectus used in connection
therewith as may be necessary or advisable to keep the Registration
Statement current and effective for the resale of the Registrable
Securities held by a Purchaser for a period ending on the earlier
of (i) the second anniversary of the Closing Date, (ii) the date on
which all Registrable Securities may be sold pursuant to Rule 144
during any three-month period without the requirement for the
Company to be in compliance with the current public information
required under Rule 144(c)(1) or (iii) such time as all Registrable
Securities have been sold pursuant to a registration statement or
Rule 144 (collectively, the “Effectiveness Period”).
The Company shall notify each Purchaser promptly upon the
Registration Statement and each post-effective amendment thereto
being declared effective by the Commission and advise each
Purchaser that the form of Prospectus contained in the Registration
Statement or post-effective amendment thereto, as the case may be,
at the time of effectiveness meets the requirements of Section
10(a) of the Securities Act or that it intends to file a Prospectus
pursuant to Rule 424(b) under the Securities Act that meets the
requirements of Section 10(a) of the Securities Act;

 

(ii) furnish
to each Purchaser with respect to the Registrable Securities
registered under the Registration Statement such number of copies
of the Registration Statement and the Prospectus (including
supplemental prospectuses) filed with the Commission in conformance
with the requirements of the Securities Act and other such
documents as such Purchaser may reasonably request, in order to
facilitate the public sale or other disposition of all or any of
the Registrable Securities by such Purchaser;

 

(iii) make
any necessary blue sky filings;

 

(iv) pay
the expenses incurred by the Company and the Purchasers in
complying with Article V, including, all registration and filing
fees, FINRA fees, exchange listing fees, printing expenses, fees
and disbursements of counsel for the Company, blue sky fees and
expenses and the expense of any special audits incident to or
required by any such registration (but excluding attorneys’
fees of any Purchaser and any and all underwriting discounts and
selling commissions applicable to the sale of Registrable
Securities by the Purchasers);

 

 

A-12

 

 

(v) advise the
Purchasers, promptly after it shall receive notice or obtain
knowledge of the issuance of any stop order by the Commission
delaying or suspending the effectiveness of the Registration
Statement or of the initiation of any proceeding for that purpose;
and it will promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain its withdrawal at the
earliest possible moment if such stop order should be issued;
and

 

(vi) with
a view to making available to the Purchaser the benefits of Rule
144 and any other rule or regulation of the Commission that may at
any time permit the Purchasers to sell Registrable Securities to
the public without registration, the Company covenants and agrees
to: (i) make and keep public information available, as such term is
understood and defined in Rule 144, until the earlier of (A) such
date as all of the Registrable Securities qualify to be resold
immediately pursuant to Rule 144 or any other rule of similar
effect during any three-month period without the requirement for
the Company to be in compliance with the current public information
required under Rule 144(c)(1) or (B) such date as all of the
Registrable Securities shall have been resold pursuant to Rule 144
(and may be further resold without restriction); (ii) file with the
Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and under the
Exchange Act; and (iii) furnish to any Purchaser upon request, as
long as such Purchaser owns any Registrable Securities, (A) a
written statement by the Company as to whether it has complied with
the reporting requirements of the Securities Act and the Exchange
Act, (B) a copy of the Company’s most recent Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, and (C) such other
information as may be reasonably requested in order to avail the
Purchaser of any rule or regulation of the Commission that permits
the selling of any such Registrable Securities without
registration.

 

The
Company understands that the Purchasers disclaim being an
underwriter, but acknowledges that a determination by the
Commission that a Purchaser is deemed an underwriter shall not
relieve the Company of any obligations it has hereunder. The
Company will not name any Purchaser as an underwriter in a
Registration Statement or Prospectus.

 

(c) If (i) the
Registration Statement is not filed on or prior to the Initial
Filing Date, or (ii) the Company fails to file with the Commission
a request for acceleration of the Registration Statement in
accordance with Rule 461 under the Securities Act, within five
Trading Days after the date the Company is first notified (orally
or in writing) by the Commission that the Registration Statement
will not be “reviewed” or will not be subject to
further review or comment, or (iii) prior to the effective date of
the Registration Statement, the Company fails to file a
pre-effective amendment and otherwise respond in writing to
comments made by the Commission in respect of such Registration
Statement within 21 days after the receipt of comments by or notice
from the Commission that such amendment or resolution of such
comments is required in order for such Registration Statement to be
declared effective, or (iv) there occurs the issuance of by the
Commission or any other federal or state governmental authority of
any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or
(v) at any time during the period commencing from the six-month
anniversary of the date hereof and ending at such time that all of
the Registrable Securities may be resold during any three-month
period without the requirement for the Company to be in compliance
with the current public information required under Rule 144(c)(1),
the Company shall fail to satisfy the current public information
requirement under Rule 144(c) (any of the foregoing being referred
to as an “Event”, and for purposes
of clauses (i) and (v), the date on which such Event occurs, and
for purpose of clause (ii) the date on which such five Trading Day
period is exceeded, and for purpose of clause (iii) the date which
such 21-day period is exceeded, being the “Event Date”), then except
during any period of time during which the Registrable Securities
may be resold pursuant to Rule 144 without volume limitations, in
addition to any other rights the Purchasers may have hereunder or
under applicable law, on each such Event Date and on each monthly
anniversary of each such Event Date (if the applicable Event shall
not have been cured by such date) until the applicable Event is
cured, the Company shall pay to each Purchaser an amount in cash,
as liquidated damages and not as a penalty, equal to the product of
1.0% multiplied by the Purchase Price paid by such Purchaser with
respect to the Registrable Securities affected by such Event and
held by such Purchaser on such Event Date or monthly anniversary
thereof, up to a maximum of 10.0% of the Purchase Price for such
Registrable Securities provided that such maximum shall not apply
if the applicable Event is the Event described in clause (v). If
the Company fails to pay any liquidated damages pursuant to this
Section in full within seven days after the date payable, the
Company will pay interest thereon at a rate of 12% per annum (or
such lesser maximum amount that is permitted to be paid by
applicable law) to the Purchasers, accruing daily from the date
such liquidated damages are due until such amounts, plus all such
interest thereon, are paid in full. The liquidated damages pursuant
to the terms hereof shall apply on a daily pro rata basis for any
portion of a month prior to the cure of an Event.

 

 

A-13

 

 

ARTICLE VI

MISCELLANEOUS

 

6.1 Termination.
This Agreement may be terminated by any Purchaser, as to such
Purchaser’s obligations
hereunder only and without any effect whatsoever on the obligations
between the Company and the other Purchasers, by written notice to
the other parties, if the Closing has not been consummated on or
before October 31, 2018; provided,
however, that
no such termination will affect the right of any party to sue for
any breach by any other party (or parties).

 

6.2 Fees and
Expenses. Except as expressly set forth in the Subscription
Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance
of this Agreement. The Company shall pay all Transfer Agent fees
(including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company and
any exercise notice delivered by a Purchaser), stamp taxes and
other taxes and duties levied in connection with the delivery of
any Shares to the Purchasers.

 

6.3 Entire
Agreement. The Subscription Documents, together with the
exhibits and schedules thereto, contain the entire understanding of
the parties with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.

 

6.4 Notices. Any
and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of: (a) the date of
transmission, if such notice or communication is delivered via
facsimile or email attachment at the facsimile number or email
address as set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the
next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile or email attachment at the
facsimile number or email address as set forth on the signature
pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the
second (2nd)
Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (d) upon actual
receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set
forth on the signature pages attached hereto. To the extent that
any notice provided pursuant to any Subscription Document
constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K.

 

6.5 Amendments;
Waivers. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and the
Purchasers. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of
any such right. Any proposed amendment or waiver that
disproportionately, materially and adversely affects the rights and
obligations of any Purchaser relative to the comparable rights and
obligations of the other Purchasers shall require the prior written
consent of such adversely affected Purchaser. Any amendment
effected in accordance with accordance with this Section 6.5 shall
be binding upon each Purchaser and holder of Shares and the
Company.

 

6.6 Headings. The
headings herein are for convenience only, do not constitute a part
of this Agreement and shall not be deemed to limit or affect any of
the provisions hereof.

 

6.7 Successors and
Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each
Purchaser (other than by merger). Any Purchaser may assign any or
all of its rights under this Agreement to any Person to whom such
Purchaser assigns or transfers any Shares, provided that such
transferee agrees in writing to be bound, with respect to the
transferred Shares, by the provisions of the Subscription Documents
that apply to the “Purchasers.”

 

6.8 No Third-Party
Beneficiaries. The Placement Agents shall be the third party
beneficiary of the representations and warranties of the Company in
Section 3.1 and the representations and warranties of the
Purchasers in Section 3.2. This Agreement is intended for the
benefit of the parties hereto and their respective successors and
permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as
otherwise set forth in this Section 6.8.

 

 

A-14

 

 

6.9 Governing Law.
All questions concerning the construction, validity, enforcement
and interpretation of the Subscription Documents shall be governed
by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal
Proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other
Subscription Documents (whether brought against a party hereto or
its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of
New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Subscription Documents), and hereby
irrevocably waives, and agrees not to assert in any Action or
Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is
improper or is an inconvenient venue for such Proceeding. Each
party hereby irrevocably waives personal service of process and
consents to process being served in any such Action or Proceeding
by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other
manner permitted by law. If any party shall commence an Action or
Proceeding to enforce any provisions of the Subscription Documents,
then the prevailing party in such Action or Proceeding shall be
reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other
costs and expenses incurred with the investigation, preparation and
prosecution of such Action or Proceeding.

 

6.10 Survival.
The representations and warranties contained herein shall survive
the Closing and the delivery of the Shares.

 

6.11 Execution.
This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

6.12 Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or
unenforceable.

 

6.13 Rescission
and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions
of) any of the other Subscription Documents, whenever any Purchaser
exercises a right, election, demand or option under a Subscription
Document and the Company does not timely perform its related
obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time
to time upon written notice to the Company, any relevant notice,
demand or election in whole or in part without prejudice to its
future actions and rights.

 

6.14 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then such action may be
taken or such right may be exercised on the next succeeding
Business Day.

 

6.15 Construction.
The parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise the Subscription
Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the
Subscription Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in
any Subscription Document shall be subject to adjustment for
reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock
that occur after the date of this Agreement but before the Closing
Date.

 

 

A-15

 

 

6.16 WAIVER
OF JURY TRIAL. EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES. ACCORDINGLY, IN ANY ACTION, SUIT, OR
PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE
GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY
JURY.

 

(Signature Pages Follow)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A-16

 

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

 

 

 

 RUMBLEON,
INC.

 

	
By:_________________

Name: Steven R.
Berrard

Title: Chief
Financial Officer

	
Address for
Notice:____________________

4521 Sharon Rd Ste
370

Charlotte NC
28211

 

 With
a copy to (which shall not constitute notice):

 

Akerman
LLP

Attn: Michael
Francis

Christina
Russo

350 E. Las Olas
Boulevard

Fort
Lauderdale, FL 33301

 

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

 

 

SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

 

A-17

 

 

[PURCHASER
SIGNATURE PAGES TO RUMBLEON SECURITIES PURCHASE
AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned, severally and not jointly with
other Purchasers, have caused this Securities Purchase Agreement to
be duly executed by their respective authorized signatories or
legally designated and authorized investment manager as of the date
first indicated above.

 

	
 

	
 

	
 

	

Name of
Purchaser:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

Signature of Authorized Signatory of Purchaser:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

Name of
Authorized Signatory:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

Title
of Authorized Signatory:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

Email
Address of Authorized Signatory:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

Address
for Notice to Purchaser:

	
 

	
 

	
 

	
 

	
 

	

Address
for Delivery of Shares to Purchaser (if not same as address
for

	
 

	
 

	

notice):

	
 

	
 

Social Security
Number or Taxpayer ID of
Purchaser:                                                                                                                                                      

 

 

	

Subscription
Amount:

	
 

	

$

	
 

	
 

	

Shares:

	
 

	
 

	
 

	
 

 

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

 

 

A-18

 

 

EXHIBIT A

 

ESCROW AGREEMENT

 

 

ESCROW AGREEMENT

 

This
ESCROW AGREEMENT (this “Agreement”) made as of October 25,
2018, by and among National Securities Corporation and Craig Hallum
Capital Group LLC (together, the “Placement Agents”), RumbleOn, Inc.
(the “Issuer”),
whose addresses and other information appear on the Information
Sheet (as defined herein) attached to this Agreement, and
Continental Stock Transfer & Trust Company, 1 State Street,
30th
Floor, New York, NY 10004 (the “Escrow Agent”).

 

WITNESSETH:

 

WHEREAS, the Issuer
is offering to “accredited investors” up to $23,000,000
of shares of the Issuer’s Class B Common Stock, par value
$0.001 per share (the “Securities”). The offering of the
Securities is herein referred to as the “Offering”;

 

WHEREAS, the Issuer
and the Placement Agents propose to establish an escrow account
(the “Escrow
Account”), to which subscription monies which are
received by the Escrow Agent from the prospective purchasers of the
Securities are to be credited, and the Escrow Agent is willing to
establish the Escrow Account on the terms and subject to the
conditions hereinafter set forth; and

 

WHEREAS, the Escrow
Agent has agreed to establish a special bank account at J.P. Morgan
Chase Bank (the “Bank”) into which the subscription
monies, which are received by the Escrow Agent from the prospective
purchasers and credited to the Escrow Account, are to be
deposited.

 

NOW,
THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto hereby agree as
follows:

 

1. Information Sheet. Each
capitalized term not otherwise defined in this Agreement shall have
the meaning set forth for such term on the information sheet which
is attached to this Agreement as Exhibit A and is incorporated
by reference herein and made a part hereof (the “Information Sheet”).

 

2. Establishment of the Bank
Account.

 

2.1. The
Escrow Agent shall establish a non-interest-bearing bank account at
the branch of Bank selected by the Escrow Agent, and bearing the
designation set forth on the Information Sheet (the
“Bank Account”);
while the funds are on deposit, the Escrow Agent may earn bank
credits or other consideration. The purpose of the Bank Account is
for (a) the deposit of all subscription monies (checks or wire
transfers) from prospective purchasers of the Securities which are
delivered to the Escrow Agent, (b) the holding of amounts of
subscription monies which are collected through the banking system
and (c) the disbursement of collected funds, all as described
herein.

 

 

 

A-19

 

 

2.2. On
or before the date of the initial deposit in the Bank Account
pursuant to this Agreement, the Placement Agents shall notify the
Escrow Agent in writing of the date of the commencement of the
Offering (the “Effective
Date”), and the Escrow Agent shall not be required to
accept any amounts for credit to the Escrow Account or for deposit
in the Bank Account prior to its receipt of such
notification.

 

2.3. The
“Offering
Period,” which shall be deemed to commence on the
Effective Date, shall consist of the number of calendar days or
business days set forth on the Information Sheet. The Offering
Period shall be extended at the Placement Agents’ discretion
(an “Extension
Period”) only if the Escrow Agent shall have received
written notice thereof prior to the expiration of the Offering
Period. The Extension Period, which shall be deemed to commence on
the next calendar day following the expiration of the Offering
Period, shall consist of the number of calendar days or business
days set forth on the Information Sheet. The last day of the
Offering Period, or the last day of the Extension Period (if the
Escrow Agent has received written notice thereof as herein above
provided), is referred to herein as the“Termination Date”. Except as
provided in Section 4.3 hereof, after the Termination Date,
prospective purchasers shall not deposit, and the Escrow Agent
shall not accept, any additional amounts representing payments by
prospective purchasers.

 

3. Deposits to the Bank
Account.

 

3.1. Prospective
purchasers shall promptly deliver to the Escrow Agent subscription
monies, which monies shall be in the form of checks or wire
transfers; “Money Orders” are not acceptable. Upon the
Escrow Agent’s receipt of such monies, they shall be credited
to the Escrow Account. All checks delivered to the Escrow Agent
shall be made payable to “CST&T AAF RumbleOn, Inc. 2018
Escrow Account.” Any check payable other than to the Escrow
Agent as required hereby shall be returned by the Escrow Agent to
the prospective purchaser, or if the Escrow Agent has insufficient
information to do so, then to the Placement Agents (together with
any Subscription Information, as defined below or other documents
delivered therewith), such check shall be deemed not to have been
delivered to the Escrow Agent pursuant to the terms of this
Agreement.

 

3.2. Promptly
after receiving subscription monies as described in Section 3.1,
the Escrow Agent shall deposit the same into the Bank Account.
Amounts of monies so deposited are hereinafter referred to as
“Escrow
Amounts”. The Escrow Agent shall cause the Bank to
process all Escrow Amounts for collection through the banking
system. Simultaneously with each
deposit to the Escrow Account, the Placement Agents shall inform
the Escrow Agent in writing of the name, address, and the tax
identification number of the purchaser, the amount of Securities
subscribed for by such purchase, and the aggregate dollar amount of
such subscription (collectively, the “Subscription
Information”).

 

3.3. The
Escrow Agent shall not accept or recognize for credit to the Escrow
Account, any deposit, including deposits made by bank wire, for
which the Escrow Agent has not received the appropriate
Subscription Information defined in paragraph 3.2.

 

 

 

A-20

 

 

3.4. The
Escrow Agent shall not be required to accept in the Escrow Account
any amounts representing payments by prospective purchasers,
whether by check or wire, except during the Escrow Agent’s
regular business hours.

 

3.5. Only
those Escrow Amounts that have been deposited into the Bank
Account, accompanied by the required subscriber information,
cleared the banking system and collected by the Escrow Agent, are
herein referred to as the “Fund.”

 

3.6. If
the Offering is terminated before the Termination Date, the Escrow
Agent shall refund any portion of the Fund prior to disbursement of
the Fund in accordance with Article 4 hereof upon instructions in
writing signed by both the Issuer and the Placement
Agents.

 

3.7. If
prior to the disbursement of the Fund in accordance with Section
4.2 below, the Escrow Agent has received notice from the Issuer
that the subscription of a prospective purchaser has been rejected
since such purchaser does not qualify as an investor in the
Offering, the Escrow Agent shall promptly refund to such purchaser
the amount of payment received from such purchaser which is then
held in the Fund or which thereafter clears the banking system,
without interest thereon or deduction therefrom, by drawing a check
on the Bank Account for the amount of such payment and transmitting
it to the purchaser.

 

4. Disbursement from the Bank
Account.

 

4.1. If
the Escrow Agent has received joint instructions from the Issuer
and the Placement Agents that the Offering is terminated, the
Escrow Agent shall promptly refund to each prospective purchaser
the amount of payment received from such purchaser which is then
held in the Fund or which thereafter clears the banking system,
without interest thereon or deduction there from, by drawing checks
on the Bank Account for the amounts of such payments and
transmitting them to the purchasers. In such event, the Escrow
Agent shall promptly notify the Issuer and the Placement Agent of
its distribution of the Fund.

 

4.2. If
at any time up to the close of regular banking hours on the
Termination Date, the Escrow Agent has received joint written
instructions from the Issuer and the Placement Agents that all
conditions for release of funds have been met for closing of the
Offering, the Escrow Agent shall promptly disburse the Fund in
accordance with instructions.

 

4.3. Upon
disbursement of the Fund pursuant to the terms of this Article 4,
the Escrow Agent shall be relieved of further obligations and
released from all liability under this Agreement. It is expressly
agreed and understood that in no event shall the aggregate amount
of payments made by the Escrow Agent exceed the amount of the
Fund.

 

5. Rights, Duties and Responsibilities of
Escrow Agent. It is understood and agreed that the duties of
the Escrow Agent are purely ministerial in nature, and
that:

 

5.1. The
Escrow Agent shall notify the Placement Agents, on a daily basis,
of the Escrow Amounts which have been deposited in the Bank Account
and of the amounts, constituting the Fund, which have cleared the
banking system and have been collected by the Escrow
Agent.

 

 

 

A-21

 

 

5.2. The
Escrow Agent shall not be responsible for or be required to enforce
any of the terms or conditions of the selling agreement or any
other agreement between the Placement Agents and the Issuer nor
shall the Escrow Agent be responsible for the performance by the
Placement Agents or the Issuer of their respective obligations
under this Agreement.

 

5.3. The
Escrow Agent shall not be required to accept from the Placement
Agents (or the Issuer) any Subscription Information pertaining to
prospective purchasers unless such Subscription Information is
accompanied by checks or wire transfers meeting the requirements of
Section 3.1, nor shall the Escrow Agent be required to keep records
of any information with respect to payments deposited by
prospective purchasers except as to the amount of such payments;
however, the Escrow Agent shall notify the Placement Agents within
a reasonable time of any discrepancy between the amount set forth
in any Subscription Information and the amount delivered to the
Escrow Agent therewith. Such amount need not be accepted for
deposit in the Escrow Account until such discrepancy has been
resolved.

 

5.4. The
Escrow Agent shall be under no duty or responsibility to enforce
collection of any check delivered to it hereunder. The Escrow
Agent, within a reasonable time, shall return to the Placement
Agents any check received which is dishonored, together with the
Subscription Information, if any, which accompanied such
check.

 

5.5. The
Escrow Agent shall be entitled to rely upon the accuracy, act in
reliance upon the contents, and assume the genuineness of any
notice, instruction, certificate, signature, instrument or other
document which is given to the Escrow Agent pursuant to this
Agreement without the necessity of the Escrow Agent verifying the
truth or accuracy thereof. The Escrow Agent shall not be obligated
to make any inquiry as to the authority, capacity, existence or
identity of any person purporting to give any such notice or
instructions or to execute any such certificate, instrument or
other document.

 

5.6. If
the Escrow Agent is uncertain as to its duties or rights hereunder
or shall receive instructions with respect to the Bank Account, the
Escrow Amounts or the Fund which, in its sole determination, are in
conflict either with other instructions received by it or with any
provision of this Agreement, it shall be entitled to hold the
Escrow Amounts, the Fund, or a portion thereof, in the Bank Account
pending the resolution of such uncertainty to the Escrow
Agent’s sole satisfaction, by final judgment of a court or
courts of competent jurisdiction or otherwise.

 

5.7. The
Escrow Agent shall not be liable for any action taken or omitted
hereunder, or for the misconduct of any employee, agent or attorney
appointed by it, except in the case of willful misconduct or gross
negligence. The Escrow Agent shall be entitled to consult with
counsel of its own choosing and shall not be liable for any action
taken, suffered or omitted by it in accordance with the advice of
such counsel.

 

5.8. The
Escrow Agent shall have no responsibility at any time to ascertain
whether or not any security interest exists in the Escrow Amounts,
the Fund or any part thereof or to file any financing statement
under the Uniform Commercial Code with respect to the Fund or any
part thereof.

 

 

 

A-22

 

 

6. Amendment; Resignation or Removal of
Escrow Agent. This Agreement may be altered or amended only
with the written consent of the Issuer, the Placement Agents and
the Escrow Agent. The Escrow Agent may resign and be discharged
from its duties hereunder at any time by giving written notice of
such resignation to the Issuer and the Placement Agents specifying
a date when such resignation shall take effect and upon delivery of
the Fund to the successor escrow agent designated by the Issuer or
the Placement Agents in writing. Such successor Escrow Agent shall
become the Escrow Agent hereunder upon the resignation date
specified in such notice. If the Issuer or the Placement Agents
fail to designate a successor Escrow Agent within thirty (30) days
after such notice, then the resigning Escrow Agent shall promptly
refund the amount in the Fund to each prospective purchaser,
without interest thereon or deduction. The Escrow Agent shall
continue to serve until its successor accepts the escrow and
receives the Fund. The Issuer shall have the right, with the prior
written consent of the Placement Agents, at any time to remove the
Escrow Agent and substitute a new escrow agent by giving notice
thereof to the Escrow Agent then acting. Upon its resignation and
delivery of the Fund as set forth in this Section 6, the Escrow
Agent shall be discharged of and from any and all further
obligations arising in connection with the escrow contemplated by
this Agreement. Without limiting the provisions of Section 8
hereof, the resigning Escrow Agent shall be entitled to be
reimbursed by the Issuer and the Placement Agents for any expenses
incurred in connection with its resignation, transfer of the Fund
to a successor escrow agent or distribution of the Fund pursuant to
this Section
6.

 

7. Representations and Warranties.
The Issuer and the Placement Agents hereby severally represent and
warrant to the Escrow Agent that:

 

7.1. No
party other than the parties hereto and the prospective purchasers
have, or shall have, any lien, claim or security interest in the
Escrow Amounts or the Fund or any part thereof.

 

7.2. No
financing statement under the Uniform Commercial Code is on file in
any jurisdiction claiming a security interest in or describing
(whether specifically or generally) the Escrow Amounts or the Fund
or any part thereof.

 

7.3. The
Subscription Information submitted with each deposit shall, at the
time of submission and at the time of the disbursement of the Fund,
be deemed a representation and warranty that such deposit
represents a bona fide payment by the purchaser described therein
for the amount of Securities set forth in such Subscription
Information.

 

7.4. All
of the information contained in the Information Sheet is, as of the
date hereof, and will be, at the time of any disbursement of the
Fund, true and correct in all material respects.

 

8. Fees and Expenses. The Escrow
Agent shall be entitled to the Escrow Agent Fees set forth on the
Information Sheet, payable as and when stated therein. In addition,
the Issuer and the Placement Agents jointly and severally agree to
reimburse the Escrow Agent for any reasonable expenses incurred in
connection with this Agreement, including, but not limited to,
reasonable counsel fees.

 

 

 

A-23

 

 

9. Indemnification and
Contribution.

 

9.1. The
Issuer and the Placement Agents (collectively referred to as the
“Indemnitors”)
jointly and severally agree to indemnify the Escrow Agent and its
officers, directors, employees, agents and shareholders
(collectively referred to as the “Indemnitees”) against, and hold
them harmless of and from, any and all loss, liability, cost,
damage and expense, including without limitation, reasonable
counsel fees, which the Indemnitees may suffer or incur by reason
of any action, claim or proceeding brought against the Indemnitees
arising out of or relating in any way to this Agreement or any
transaction to which this Agreement relates, unless such action,
claim or proceeding is the result of the willful misconduct or
gross negligence of the Indemnitees.

 

9.2. If
the indemnification provided for in Section 9.1 is applicable, but
for any reason is held to be unavailable, the Indemnitors shall
contribute such amounts as are just and equitable to pay, or to
reimburse the Indemnitees for, the aggregate of any and all losses,
liabilities, costs, damages and expenses, including counsel fees,
actually incurred by the Indemnitees as a result of or in
connection with, and any amount paid in settlement of, any action,
claim or proceeding arising out of or relating in any way to any
actions or omissions of the Indemnitors.

 

9.3. The
provisions of this Article 9 shall survive any termination of this
Agreement, whether by disbursement of the Fund, resignation of the
Escrow Agent or otherwise.

 

10. Termination
of Agreement. This Agreement
shall terminate on the final disposition of the Fund pursuant to
Section 4, provided that the rights of the Escrow Agent and the
obligations of the other parties hereto under Section 9 shall
survive the termination hereof and the resignation or removal of
the Escrow Agent.

 

11. Governing Law and Assignment.
This Agreement shall be construed in accordance with and governed
by the laws of the State of New York, without regard to the
conflicts of laws principles thereof, and shall be binding upon the
parties hereto and their respective successors and
assigns;provided,
however, that any
assignment or transfer by any party of its rights under this
Agreement or with respect to the Escrow Amounts or the Fund shall
be void as against the Escrow Agent unless (a) written notice
thereof shall be given to the Escrow Agent; and (b) the Escrow
Agent shall have consented in writing to such assignment or
transfer.

 

12. Notices. All notices required
to be given in connection with this Agreement shall be sent by
registered or certified mail, return receipt requested, or by hand
delivery with receipt acknowledged, or by the Express Mail service
offered by the United States Postal Service, and addressed, if to
the Issuer or the Placement Agents, at their respective addresses
set forth on the Information Sheet, and if to the Escrow Agent, at
its address set forth above, to the attention of the Trust
Department.

 

13. Severability. If any provision
of this Agreement or the application thereof to any person or
circumstance shall be determined to be invalid or unenforceable,
the remaining provisions of this Agreement or the application of
such provision to persons or circumstances other than those to
which it is held invalid or unenforceable shall not be affected
thereby and shall be valid and enforceable to the fullest extent
permitted by law.

 

 

 

A-24

 

 

14. Execution in Several
Counterparts. This Agreement may be executed in several
counterparts or by separate instruments and by facsimile
transmission and all of such counterparts and instruments shall
constitute one agreement, binding on all of the parties
hereto.

 

15. Entire Agreement. This
Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings (written or oral) of the
parties in connection therewith.

 

 

 

A-25

 

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

 

ESCROW
AGENT:

 

CONTINENTAL
STOCK TRANSFER

&
TRUST COMPANY

 

 

 

By:                                                                             

Name:                                                                       

Title:                                                                       

 

 

 

PLACEMENT
AGENTS:

 

NATIONAL
SECURITIES CORPORATION

 

 

 

By:                                                                             

Name:                                                                       

Title:                                                                       

 

 

CRAIG
HALLUM CAPITAL LLC

 

 

 

By:                                                                             

Name:                                                                       

Title:                                                                       

 

 

 

ISSUER:

 

RUMBLEON,
INC.

 

 

By:                                                                             

Name:                                                                       

Title:                                                                       

 

 

 

 

 

A-26

 

EXHIBIT
A

 

ESCROW
AGREEMENT INFORMATION SHEET

 

1.            

The Issuer

 

Name:           
RumbleOn, Inc.

Address:       
4521 Sharon Road

Suite
370

Charlotte, NC
28211

 

Tax
Identification Number: 46-3951329

 

2            

The Placement Agents

 

Name
:          
National Securities Corporation

Address:       
200 Vesey Street, 25th Floor

New
York, NY 10581

 

Name:           
Craig Hallum Capital Group LLC

Address:       
222 South Ninth Street – Suite 350

Minneapolis, MN
55402

 

3.            

The Securities

 

Description of the
Securities to be offered: Up to $23,000,000 of shares of the
Issuer’s Class B Common Stock.

 

4.            

Plan of Distribution of the Securities

 

Initial
Offering Period: Through October 15, 2018.

Extension Period,
if any: October 31, 2018.

 

5.            

Title of Escrow Account:

 

“CST&T
AAF RumbleOn, Inc. 2018 Escrow Account”

 

6.            

Escrow Agent Fees and Charges

 

$5,500
(for up to 50 investing shareholders); $7,500 (for up to 100
shareholders); $9,000 + $12.00/account (over 100
shareholders); $3,500 payable at signing of the Escrow
Agreement, plus estimated balance as invoiced is due 30 days after
launch. Any remaining fees will be invoiced at Closing. An
additional fee of $5,000 will be charged if the program is
terminated for any reason causing the deposited funds to be
returned. (Note:  $250.00 online “view only”
access to the bank account is included).  A fee of $500
will be payable for document review services related to each
amendment/extension to the Escrow Agreement.  In
addition, the Escrow Agent shall be paid a fee of $500.00 for each
additional closing beyond the Initial Offering
Period.  Should the Escrow Agent continue for more than
six months, the Escrow Agent shall receive a fee of $600.00 per
month, or any portion thereof, payable in advance or the first
business day of the month.

 

 

A-1

 

 

Distribution
charges:

 

$45.00
per check

$50.00
per wire

$100.00
per check returned (NSF) check

$100.00
lost check replacement fee

$50.00
per DWAC (share movement to DTC)

$10.00
per share certificate

 

 

A-2

 

 

EXHIBIT B

 

INVESTOR QUESTIONNAIRE

 

IN
CONNECTION WITH RUMBLEON, INC.'S PROPOSED SALE OF CLASS B COMMON
STOCK (THE “SHARES”) , PLEASE INDICATE IF YOU QUALIFY
AS AN "ACCREDITED INVESTOR" UNDER ONE OR MORE OF THE FOLLOWING
(please check all
that apply):

 

 

Any
individual whose net worth, or joint net worth with that
person’s spouse, at the time of his or her purchase of the
Shares, exceeds US$1,000,000. For purposes of calculating net worth
under this section, (i) the person's primary residence shall not be
included as an asset; (ii) indebtedness that is secured by the
person's primary residence, up to the estimated fair market value
of the primary residence at the time of the sale of the Shares,
shall not be included as a liability (except that if the amount of
such indebtedness outstanding at the time of sale of securities
exceeds the amount outstanding 60 days before such time, other than
as a result of the acquisition of the primary residence, the amount
of such excess shall be included as a liability); and (iii)
indebtedness that is secured by the person's primary residence in
excess of the estimated fair market value of the primary residence
at the time of the sale of the Shares shall be included as a
liability.

 

Any
individual who had an individual income in excess of US$200,000 in
each of the two most recent years or joint income with that
person’s spouse in excess of US$300,000 in each of those
years and reasonably expects to reach the same income level in the
current year.

 

Any
director or executive officer of RumbleOn, Inc. For purposes of
this section, “executive officer” means the president;
any vice president in charge of a principal business unit, division
or function, such as sales, administration or finance; or any other
person or persons who perform(s) similar policymaking functions for
RumbleOn, Inc.

 

Any
organization described in section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or
partnership (which the parties understand includes a limited
liability company) not formed for the specific purpose of acquiring
the Shares, with total assets in excess of $5,000,000.

 

Any
trust, with total assets in excess of US$5,000,000, not formed for
the specific purpose of acquiring the Shares, whose purchase is
directed by a sophisticated person as described in Rule
506(b)(2)(ii) under the Securities Act of 1933, as
amended.

 

Any
bank, as defined in Section 3(a)(2) of the Securities Act of 1933,
or a savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Securities Act of 1933, whether acting
in its individual or fiduciary capacity

 

Any
broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended.

 

Any
insurance company as defined in Section 2(a)(13) of the Securities
Act of 1933.

 

Any
investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section
2(a)(48) of such Act.

 

Any
Small Business Investment Company licensed by the U. S. Small
Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.

 

 

A-29

 

 

Any
plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such
plan has total assets in excess of $5,000,000.

 

Any
employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974 (“ERISA”), and either the
decision to acquire the Shares has been made by a plan fiduciary,
as defined in Section 3(21) of ERISA, which is either a bank,
savings and loan association, insurance company or registered
investment advisor, or the employee benefit plan has total assets
in excess of $5,000,000, or if a self-directed plan, investment
decisions are made solely by persons who are accredited
investors.

 

Any
private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940.

 

Any
entity in which all of the equity owners are Accredited Investors,
as described above.

 

 

By
signing below, the Investor confirms that the information in this
Investor Questionnaire is true, correct and complete.

 

 

 

 

 

 

Name of
Investor

 

 

By:________________________________ 

 
Signature

 

 

 

 

 

Title:_______________________________

 

               (if
any)

 

 

 

Date:______________________________ 

, 2018

 

 

 

 

A-30

 

 

EXHIBIT C

 

RISK FACTORS

 

 

In this Exhibit C – Risks Factors, we refer to RumbleOn, Inc.
as the “Company,” “we,” “us,”
and “our,” and similar words. Capitalized terms not
defined herein have the meanings set forth in the Securities
Purchase Agreement.

 

In addition to other information contained or incorporated by
reference in this Exhibit, you should carefully consider the risks
described below and incorporated herein by reference to our Annual
Report on Form 10-K for the fiscal year ended December 31, 2017,
and our subsequent periodic reports, in evaluating our company and
our business before making a decision to invest in our Class B
Common Stock. Additional risks not presently known to us or that we
currently deem immaterial could also materially and adversely
affect our financial condition, results of operations, business and
prospects. The trading price of our Class B Common Stock could
decline due to any of these risks, and you may lose all or part of
your investment.

 

Risks Related to the Proposed Acquisitions (the
“Acquisitions”) of Wholesale Holdings, Inc. and
Wholesale Express, LLC (together
“Wholesale”)

 

We cannot assure you that the proposed Acquisitions will be
completed on a timely basis or at all.

 

There
are a number of risks and uncertainties relating to the
Acquisitions. For example, the Acquisitions may not be completed,
or may not be completed in the time frame, on the terms or in the
manner currently anticipated, as a result of a number of factors,
including the failure of the parties to satisfy one or more of the
conditions to closing. There can be no assurance that the
conditions to closing of the Acquisitions will be satisfied or
waived or that other events will not intervene to delay or result
in the failure to close the Acquisitions.

 

In the
event the Acquisitions are not consummated, we may use the proceeds
from the offering of the Shares for working capital and general
corporate purposes, which may include purchases of additional
inventory held for sale, increased spending on marketing and
advertising and capital expenditures necessary to grow the
business, and for the repayment of outstanding indebtedness.
However, we would have broad authority to use such net proceeds for
other purposes that may not be accretive to our earnings per
share.

 

We may be unable to realize the anticipated synergies related to
the Acquisitions, which could have a material adverse effect on our
business, financial condition and results of
operations.

 

We
expect to realize significant synergies related to the
Acquisitions. We also expect to incur costs to achieve these
synergies. While we believe these synergies are achievable, our
ability to achieve such estimated synergies in the amounts and
timeframe expected is subject to various assumptions by our
management based on expectations that are subject to a number of
risks, which may or may not be realized, as well as the incurrence
of other costs in our operations that may offset all or a portion
of such synergies and other factors outside our control. As a
consequence, we may not be able to realize all of these synergies
within the time frame expected or at all, or the amounts of such
synergies could be significantly reduced. In addition, we may incur
additional and unexpected costs to realize these synergies. Failure
to achieve the expected synergies could significantly reduce the
expected benefits associated with the Acquisitions and adversely
affect our business following the Acquisitions. We have incurred
and will continue to incur substantial expenses in connection with
the negotiation and consummation of the transactions contemplated
by the Transaction Documents. These costs, as well as other
unanticipated costs and expenses, could have a material adverse
effect on our financial condition and operating results following
the consummation of the Acquisitions and many of these costs will
be borne by us even if the Acquisitions are not
consummated.

 

 

A-31

 

 

Following the consummation of the Acquisitions, we may be unable to
successfully integrate Wholesale’s business and realize the
anticipated benefits of the Acquisitions.

 

We and
Wholesale currently operate as independent companies. After the
closing of the Acquisitions, we will be required to devote
significant management attention and resources to integrating the
business and operations of Wholesale. Potential difficulties we may
encounter in the integration process include the
following:

 

	
 

	

●

	
 

	

the
inability to successfully combine our business and the businesses
of Wholesale in a manner that results in the anticipated benefits
and synergies of the Acquisitions not being realized in the time
frame currently anticipated or at all;

 

	
 

	

●

	
 

	

the
loss of sales, customers or business partners of ours or of
Wholesale’s as a result of such parties deciding not to
continue business at the same or similar levels with us or
Wholesale after the Acquisitions;

 

	
 

	

●

	
 

	

challenges
associated with operating the combined business in markets and
geographies in which we do not currently operate;

 

	
 

	

●

	
 

	

difficulty
integrating our direct sales and distribution channels with
Wholesale’s to effectively sell the vehicles of the combined
company following the closing of the Acquisitions;

 

	
 

	

●

	
 

	

the
complexities associated with managing our company and integrating
personnel from Wholesale, resulting in a significantly larger
combined company, while at the same time providing high quality
services to customers;

 

	

  

 

	

●

	
 

	

unanticipated
issues in coordinating accounting, information technology,
communications, administration and other systems;

 

	
 

	

●

	
 

	

difficulty
addressing possible differences in corporate culture and management
philosophies;

 

	
 

	

●

	
 

	

the
failure to retain key employees of ours or of
Wholesale;

 

	
 

	

●

	
 

	

potential
unknown liabilities and unforeseen increased expenses, delays or
regulatory conditions associated with the
Acquisitions;

 

	
 

	

●

	
 

	

performance
shortfalls as a result of the diversion of management’s
attention caused by consummating the Acquisitions and integrating
Wholesale’s operations; and

 

	
 

	

●

	
 

	

managing
the increased debt levels incurred in connection with the
Acquisitions.

 

An
inability to realize the anticipated benefits and cost synergies of
the Acquisitions, as well as any delays encountered in the
integration process, could have a material adverse effect on the
operating results of the combined company, which may materially
adversely affect the value of our Class B Common Stock following
the consummation of the Acquisitions.

 

In
addition, the actual integration may result in additional and
unforeseen expenses, and the anticipated benefit of our plan for
integration may not be realized. Actual synergies, if achieved at
all, may be lower than what we expect and may take longer to
achieve than anticipated. For example, the elimination of
duplicative costs may not be possible or may take longer than
anticipated, or the benefits from the Acquisitions may be offset by
costs incurred or delays in integrating the companies. If we are
not able to adequately address these challenges, we may be unable
to successfully integrate Wholesale’s operations into our own
or, even if we are able to combine the business operations
successfully, to realize the anticipated benefits of the
integration of the companies.

 

 

A-32

 

 

Our business relationships, those of Wholesale or the combined
company may be subject to disruption due to uncertainty associated
with the Acquisitions.

 

Parties
with which we or Wholesale do business may experience uncertainty
associated with the Acquisitions, including with respect to current
or future business relationships with us, Wholesale or the combined
company. Our and Wholesale’s business relationships may be
subject to disruption, as customers, distributors, suppliers,
vendors, and others may seek to receive confirmation that their
existing business relations with us or Wholesale, as the case may
be, will not be adversely impacted as a result of the Acquisitions
or attempt to negotiate changes in existing business relationships
or consider entering into business relationships with parties other
than us, Wholesale, or the combined company as a result of the
Acquisitions. Any of these other disruptions could have a material
adverse effect on our or Wholesale’s businesses, financial
condition, or results of operations or on the business, financial
condition or results of operations of the combined company, and
could also have an adverse effect on our ability to realize the
anticipated benefits of the Acquisitions.

 

If we are unable to maintain effective internal control over
financial reporting for the combined companies following the
Acquisitions, we may fail to prevent or detect material
misstatements in our financial statements, in which case investors
may lose confidence in the accuracy and completeness of our
financial statements.

 

We and
Wholesale currently maintain separate internal control over
financial reporting with different financial reporting processes
and different process control software. After the closing of
the Acquisitions, we plan to integrate our internal control over
financial reporting with those of Wholesale. We may encounter
difficulties and unanticipated issues in combining our respective
accounting systems due to the complexity of the financial reporting
processes. We may also identify errors or misstatements that could
require audit adjustments. If we are unable to implement and
maintain effective internal control over financial reporting
following completion of the Acquisitions, we may fail to prevent or
detect material misstatements in our financial statements, in which
case investors may lose confidence in the accuracy and completeness
of our financial reports and the market price of our securities may
decline.

 

Wholesale may have liabilities that are not known, probable or
estimable at this time.

 

As a
result of the Acquisitions, Wholesale will become subsidiaries of
the Company and remain subject to their past, current and future
liabilities. There could be unasserted claims or assessments
against or affecting Wholesale, including the failure to comply
with applicable laws, regulations, orders and consent decrees or
infringement or misappropriation of third party intellectual
property or other proprietary rights that we failed or were unable
to discover or identify in the course of performing our due
diligence investigation of Wholesale. In addition, there are
liabilities of Wholesale that are neither probable nor estimable at
this time that may become probable or estimable in the future,
including indemnification requests received from customers of
Wholesale relating to claims of infringement or misappropriation of
third party intellectual property or other proprietary rights, tax
liabilities arising in connection with ongoing or future tax audits
and liabilities in connection with other past, current and future
legal claims and litigation. Any such liabilities, individually or
in the aggregate, could have a material adverse effect on our
financial results. We may learn additional information about
Wholesale that adversely affects us, such as unknown, unasserted,
or contingent liabilities and issues relating to compliance with
applicable laws or infringement or misappropriation of third party
intellectual property or other proprietary rights.

 

As a result of the Acquisitions, we and Wholesale may be unable to
retain key employees.

 

Our
success after the Acquisitions will depend in part upon our ability
to retain key employees of ours and Wholesale. Key employees may
depart because of a variety of reasons relating to the
Acquisitions. If we and Wholesale are unable to retain key
personnel who are critical to the successful integration and future
operations of the combined company, we could face disruptions in
our operations, loss of existing customers, loss of key
information, expertise or know-how, and unanticipated
additional recruitment and training costs. In addition, the loss of
key personnel could diminish the anticipated benefits of the
Acquisitions.

 

 

A-33

 

 

EXHIBIT D

 

FORM OF LOCK-UP AGREEMENT

 

October
__, 2018

 

National
Securities Corporation

200
Vesey Street, 25th Floor

New
York, New York 10281

 

Ladies
and Gentlemen:

 

In
connection with the proposed Securities Purchase Agreement (the
“Securities Purchase Agreement”) between the
undersigned and RumbleOn, Inc., a Nevada corporation (the
“Company”), providing for the issuance and sale by the
Company (the “Offering”) of up to $23,000,000 of the
Company’s Class B Common Stock, $0.001 par value per share
(the “Shares”), the undersigned hereby agrees that,
without the prior written consent of National Securities
Corporation (“NSC”) and Craig Hallum Capital Group LLC
(“CH”, and together with NSC, the “Placement
Agents”), the undersigned will not, during the period
commencing on the date hereof and ending ninety (90) days after the
Closing Date (as defined in the Securities Purchase Agreement) (the
“Lock-Up Period”), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for
shares of capital stock of the Company, whether now owned or
hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition
(collectively, the “Lock-Up Securities”); (2) enter
into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of
Lock-Up Securities, whether any such transaction is to be settled
by delivery of shares of Lock-Up Securities, in cash or otherwise;
(3) make any demand for or exercise any right with respect to the
registration of any Lock-Up Securities; or (4) publicly disclose
the intention to make any offer, sale, pledge or disposition, or to
enter into any transaction, swap, hedge or other arrangement
relating to any Lock-Up Securities. Notwithstanding the foregoing,
and subject to the conditions below, the undersigned may transfer
Lock-Up Securities without the prior written consent of the
Placement Agents in connection with (a) transactions relating to
Lock-Up Securities acquired in open market transactions after the
completion of the Offering; provided that no filing under Section
16(a) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), shall be required or shall be
voluntarily made in connection with subsequent sales of Lock-Up
Securities acquired in such open market transactions; (b) transfers
of Lock-Up Securities as a bona fide gift, by will or intestacy or
to a family member or trust for the benefit of a family member (for
purposes of this lock-up agreement, “family member”
means any relationship by blood, marriage or adoption, not more
remote than first cousin); (c) transfers of Lock-Up Securities to a
charity or educational institution; (d) if the undersigned,
directly or indirectly, controls a corporation, partnership,
limited liability company or other business entity, any transfers
of Lock-Up Securities to any shareholder, partner or member of, or
owner of similar equity interests in, the undersigned, as the case
may be, or (e) the sales of Shares to cover the payment of the
exercise prices or the payment of taxes associated with the
exercise or vesting of equity awards under any equity compensation
plan of the Company; provided that in the case of any transfer
pursuant to the foregoing clauses (b), (c) or (d), (i) any such
transfer shall not involve a disposition for value, (ii) each
transferee shall sign and deliver to the Underwriter a lock-up
agreement substantially in the form of this lock-up agreement and
(iii) no filing under Section 16(a) of the Exchange Act shall be
required or shall be voluntarily made, except for a Form 5. The
undersigned also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent and registrar
against the transfer of the undersigned’s Lock-Up Securities
except in compliance with this lock-up agreement.

 

If the
undersigned is an officer or director of the Company, (i) the
undersigned agrees that the foregoing restrictions shall be equally
applicable to any issuer-directed or “friends and
family” Shares that the undersigned may purchase in the
Offering; (ii) the Placement Agents agree that, at least three (3)
business days before the effective date of any release or waiver of
the foregoing restrictions in connection with a transfer of Lock-Up
Securities, the Placement Agents will notify the Company of the
impending release or waiver; and (iii) the Company agrees to
announce the impending release or waiver by press release through a
major news service at least two (2) business days before the
effective date of the release or waiver. Any release or waiver
granted by the Placement Agents hereunder to any such officer or
director shall only be effective two (2) business days after the
publication date of such press release. The provisions of this
paragraph will not apply if (a) the release or waiver is effected
solely to permit a transfer of Lock-Up Securities not for
consideration and (b) the transferee has agreed in writing to be
bound by the same terms described in this lock-up agreement to the
extent and for the duration that such terms remain in effect at the
time of such transfer.

 

 

A-34

 

 

No
provision in this agreement shall be deemed to restrict or prohibit
the exercise, exchange or conversion by the undersigned of any
securities exercisable or exchangeable for or convertible into
Shares, as applicable; provided that the undersigned does not
transfer the Shares acquired on such exercise, exchange or
conversion during the Lock-Up Period, unless otherwise permitted
pursuant to the terms of this lock-up agreement. In addition, no
provision herein shall be deemed to restrict or prohibit the entry
into or modification of a so-called “10b5-1” plan at
any time (other than the entry into or modification of such a plan
in such a manner as to cause the sale of any Lock-Up Securities
within the Lock-Up Period).

 

The
undersigned understands that the Company and the Placement Agents
are relying upon this lock-up agreement in proceeding toward
consummation of the Offering. The undersigned further understands
that this lock-up agreement is irrevocable and shall be binding
upon the undersigned’s heirs, legal representative,
successors and assigns.

 

The
undersigned understands that, if the Securities Purchase Agreement
is not executed by October 31, 2018, or if the Securities Purchase
Agreement (other than the provisions thereof which survive
termination) shall terminate or be terminated prior to payment for
and delivery of the Shares to be sold thereunder, then this lock-up
agreement shall be void and of no further force or
effect.

 

Whether
or not the Offering actually occurs depends on a number of factors,
including market conditions. Any Offering will only be made
pursuant to a Securities Purchase Agreement, the terms of which are
subject to negotiation between the Company and the
undersigned.

 

Very
truly yours,

 

__________________________________________________

(Name -
Please Print)

 

__________________________________________________

(Signature)

 

__________________________________________________

(Name
of Signatory, in the case of entities - Please Print)

 

__________________________________________________

(Title
of Signatory, in the case of entities - Please Print)

 

Address:
___________________________________________

 

___________________________________________

 

___________________________________________

 

 

 

A-35

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