FIRST AMENDMENT AND WAIVER TO LOAN AND SECURITY AGREEMENT
Exhibit 10.3
FIRST AMENDMENT AND WAIVER TO LOAN AND SECURITY
AGREEMENT
THIS
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
“Amendment”), dated as of
October 30, 2018 (the “First Amendment Effective
Date”), is entered into by and among RUMBLEON, INC., a Nevada corporation
(“Parent”),
RMBL MISSOURI, LLC, a Delaware limited liability company
(“RMBL
Missouri”), RMBL TEXAS,
LLC, a Delaware limited liability company
(“RMBL
Texas”), NEXTGENPRO, LLC,
a Delaware limited liability company (“NextGen
Pro”, and together with
Parent, RMBL Missouri and RMBL Texas, the
“Existing
Borrowers”), RMBL
TENNESSEE, LLC, a Delaware limited liability company
(“RMBL
Tennessee”), RMBL
EXPRESS, LLC, a Delaware limited liability company
(“RMBL
Express”), WHOLESALE,
LLC, a Tennessee limited liability company
(“Wholesale”),
and WHOLESALE EXPRESS, LLC, a Tennessee limited liability company
(“Wholesale
Express”, and together
with RMBL Tennessee, RMBL Express and Wholesale, collectively,
“New
Borrowers”, and Existing
Borrowers and New Borrowers, together with any Qualified
Subsidiaries from time to time party hereto, collectively
“Borrowers”, and each, a
“Borrower”), the several
banks and other financial institutions or entities from time to
time party thereto as Lender, and HERCULES CAPITAL, INC., a
Maryland corporation, in its capacity as administrative agent and
collateral agent for Lender (in such capacity, together with its
successors and assigns in such capacity, “Agent”).
A. Existing Borrowers,
Lender and Agent are parties to a Loan and Security Agreement,
dated as of April 30, 2018 (as amended, restated or modified
from time to time, the “Loan
Agreement”).
B. Each of the New
Borrowers have entered into a Joinder Agreement as of the First
Amendment Effective Date.
C. Existing Borrowers
have requested consent to the consummation of the Wholesale
Transaction, as described below.
D. Pursuant to
Section 11.3(b) of
the Loan Agreement, the parties desire to enter into this Amendment
to modify the terms of the Loan Agreement as set forth in this
Amendment, including, without limitation, to permit the
consummation of the Wholesale Transaction, in each case, on the
terms and subject to the conditions set forth in this
Amendment.
SECTION
1 DEFINITIONS;
INTERPRETATION.
(a) Terms Defined in Loan Agreement. All
capitalized terms used in this Amendment (including in the recitals
hereof) and not otherwise defined herein shall have the meanings
assigned to them in the Loan Agreement.
(b) Rules of Construction. The rules of
construction that appear in the last paragraph of Section 1.1 of the Loan
Agreement shall be applicable to this Amendment and are
incorporated herein by this reference.
SECTION
2 AMENDMENTS
TO THE LOAN AGREEMENT.
(a) The Loan Agreement
shall be amended as follows effective as of the date
hereof:
(i) The following
defined terms in Section
1.1 of the Loan Agreement are hereby amended and restated as
set forth below, or, if applicable, are added to Section 1.1 of the Loan
Agreement in appropriate alphabetical order:
“Amortization
Date” means June 30,
2019, provided, that if the Interest-Only Extension Condition is
met, the Amortization Date shall be extended to December 30,
2019.
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“Budget”
means a budget for Parent and its Subsidiaries, on a consolidated
basis, acceptable to Agent, provided that in any event a budget
reflecting Revenue, Adjusted EBITDA, if applicable, and Gross
Profit, if applicable, of no less than the amounts set forth in the
projections delivered to Agent as of the First Amendment Effective
Date will be acceptable to Agent, provided further that, if a
Borrower consummates a Permitted Acquisition and such Permitted
Acquisition is reasonably likely to affect the projections
previously delivered, as reasonably determined by Agent based on
its review of the proposed transaction, at all times thereafter, a
budget will be acceptable to Agent if reflecting Revenue, Adjusted
EBITDA, if applicable, and Gross Profit, if applicable, of no less
than the amounts set forth in the updated projections reasonably
approved by Agent in connection with such
transaction.
“First Amendment” means
the First Amendment to this Agreement, dated as of October 30,
2018.
“First Amendment Effective
Date” means October 30, 2018.
“Interest Only
Extension Condition”
means that prior to December 15, 2019, a Growth Capital Term Loan
Advance in principal amount of $5,000,000 shall have been made
pursuant to Tranche III.
“Inventory Financing
Agreement” means that
certain Inventory Financing and Security Agreement, by and among
Inventory Financing Lenders and RMBL Missouri, dated February 16,
2018, as modified by that certain Addendum No. 1 dated as of June
29, 2018 and that certain Addendum No. 2 dated as of September 25,
2018, and as may be further modified or amended in compliance with
the Inventory Financing Intercreditor Agreement and similar
agreements entered into with any Inventory Financing
Lender.
“Inventory Financing
Lenders” means, with
respect to the Inventory Financing Agreement, Ally Bank and Ally
Financial Inc., collectively, and with respect to the Wholesale
Inventory Financing, NextGear Capital, Inc., in each case, together
with each of their assigns or successors in interest, and any
additional or replacement lenders providing inventory financing to
any Borrower other than Parent, provided that such lender shall be
domiciled in the United States and shall be in the business of
extending credit of such type in the ordinary course of
business.
“Performance Milestone
III” means Borrower
Representative shall have provided evidence reasonably satisfactory
to Agent that Parent, on a consolidated basis, shall have achieved:
(i) Adjusted EBITDA for any consecutive six month period prior to
December 15, 2019 of at least $5,000,000 for such period; and (ii)
as of the date such evidence is provided, no Event of Default shall
have occurred and be continuing.
“Permitted Inventory
Financing Cash Collateral” means cash collateral required to be
provided pursuant to any Inventory Financing Agreement, provided
that (a) with respect to a Qualified Inventory Financing, (i) the
aggregate amount of such cash collateral shall not in any event
exceed the greater of (A) $250,000 and (B) 10.0% of the approved
credit line pursuant to such Qualified Inventory Financing, (b)
with respect to a Wholesale Inventory Financing, $7,000,000, and
(c) at any time, no additional cash collateral shall be provided if
doing so would result in an Event of Default or could reasonably be
expected to result in an Event of Default.
“Qualified
Cash” means the
aggregate balance maintained in all Borrowers’ Deposit
Accounts and accounts in which Investment Property of Borrowers is
maintained, in each case, that are subject to an Account Control
Agreement in favor of Agent and pursuant to which Agent has a first
lien perfected security interest, and, for the avoidance of doubt,
excluding any Permitted Inventory Financing Cash
Collateral.
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“Term Loan Maturity
Date” means, with respect
to Tranche I, May 1, 2021, and with respect to Tranche II,
Tranche III and Tranche IV, October 1, 2021.
“Tranche”
means any of Tranche I, Tranche II, Tranche III or Tranche
IV.
“Wholesale Express
Acquisition” means the acquisition of all of the
issued and outstanding membership interests of Wholesale Express,
LLC, a Tennessee limited liability company, by Parent, pursuant to
that certain Membership Interest Purchase Agreement, dated as of
October 26, 2018 (the “Wholesale Express Purchase
Agreement”, and together with all schedules, exhibits
and annexes thereto, all side letters and material ancillary
agreements entered into in connection therewith, the
“Wholesale Express
Purchase Documents”).
“Wholesale Inventory
Financing” means
Indebtedness owing to Inventory Financing Lenders pursuant to the
Wholesale Inventory Financing Documents, provided that (i) no
Borrower other than Wholesale shall be a borrower pursuant thereto,
(ii) no Borrower other than Parent and RMBL Tennessee shall be a
guarantor with respect thereto, (iii) the obligations pursuant to
such facility shall not be secured by any Lien other than a Lien on
property of Wholesale, (iv) the Wholesale Inventory Financing
Documents shall not prohibit (A) the Indebtedness incurred or Liens
granted pursuant to this Agreement (including with respect to
Wholesale) or (B) the payment of any amounts when due pursuant to
this Agreement (including by Wholesale), (v) the Wholesale
Inventory Financing Intercreditor Agreement shall be in full force
and effect, (vi) the aggregate amount of Indebtedness
outstanding thereunder shall not exceed $75,000,000 at any time,
(vii) the advance rates shall not deviate materially from the
advance rate structure pursuant to the inventory financing
arrangements provided by NextGear Capital, Inc. as in effect on the
First Amendment Effective Date, and (viii) the interest rate and
applicable fees shall not be higher and the cash collateral or
deposit required shall not be a higher percentage of the approved
credit limit, in each case, relative to the inventory financing
arrangements provided by NextGear Capital, Inc. as in effect on the
First Amendment Effective Date.
“Wholesale Inventory
Financing Intercreditor Agreement” means an intercreditor agreement, to be
entered into subsequent to the First Amendment Effective Date in
accordance with Appendix II (Item 4) of the First Amendment, by and
among NextGear Capital, Inc. and Agent, in form and substance
satisfactory to Agent in Agent’s reasonable discretion, as
amended, restated, supplemented or otherwise modified from time to
time, or any similar agreement entered into by and among any
Inventory Financing Lender and Agent, in form and substance
satisfactory to Agent, in Agent’s reasonable discretion with
respect to a Wholesale Inventory Financing as in effect from time
to time.
“Wholesale Inventory
Financing Documents”
means (i) that certain Demand Promissory Note and Loan and Security
Agreement, dated as of the First Amendment Effective Date, (ii)
that certain Amendment to Demand Promissory Note and Loan and
Security Agreement, dated as of the First Amendment Effective Date,
(iii) that certain Corporate Guaranty, dated as of the First
Amendment Effective Date by Parent and (iv) that certain Corporate
Guaranty, dated as of the First Amendment Effective Date by RMBL
Tennessee, in each case, as amended, restated, supplemented or
otherwise modified from time to time, or any similar agreements
entered into with respect to a replacement inventory financing
facility provided by an Inventory Financing Lender, in each case,
consistent with the defined term “Wholesale Inventory
Financing” and any other restriction with respect thereto
pursuant to this Agreement.
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“Wholesale Merger” means
the merger of Wholesale Holdings, Inc., a Tennessee corporation
(“Wholesale
Holdings”), into RMBL Tennessee, pursuant to that
certain Agreement and Plan of Merger, dated as of October 26, 2018
(as amended by that certain Amendment to Merger Agreement, dated as
of October 29, 2018, the “Wholesale Merger
Agreement”, and together with all schedules, exhibits
and annexes thereto, all side letters and material ancillary
agreements entered into in connection therewith, the
“Wholesale Merger
Documents”), by and among the Parent, RMBL Tennessee,
the shareholders of Wholesale Holdings, Wholesale, LLC, a
wholly-owned subsidiary of Wholesale Holdings formerly known as
Wholesale, Inc., Xxxxxx Xxxxxxxx, 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, Xxxxxxxx Xxxxxxxx and Xxxxxx X. Xxxxxxx, pursuant to
which Wholesale Holdings shall merge with and into RMBL Tennessee,
with RMBL Tennessee as the surviving entity. Wholesale, LLC, a Tennessee limited liability
company (f/k/a Wholesale, Inc., a Tennessee corporation) is a
wholly-owned direct subsidiary of RMBL Tennessee and an indirect
Subsidiary of Parent.
“Wholesale Transaction”
means, collectively the Wholesale Merger and the Wholesale Express
Acquisition.
“Wholesale Transaction
Documents” means, collectively the Wholesale Merger
Documents and the Wholesale Express Purchase
Documents.
(ii) The
specified clauses of the defined term “Permitted
Indebtedness” set forth in Section 1.1 of the
Agreement are amended and restated as set forth below:
(b) Indebtedness
of up to $1,000,000 outstanding at any time secured by a Lien
described in clause (f) of the defined term “Permitted
Liens”, provided in the case of acquired Equipment such
Indebtedness does not exceed the cost of the Equipment financed
with such Indebtedness;
(f) reimbursement
obligations in connection with letters of credit that are secured
by Cash and issued on behalf of a Borrower or a Subsidiary in an
amount not to exceed $500,000 at any time outstanding, and
reimbursement obligations in connection with letters of credit
serving as a lease deposit;
(h) (i)
Indebtedness pursuant to a Qualified Inventory Financing, and (ii)
Indebtedness of Wholesale, as a borrower, pursuant to the Wholesale
Inventory Financing, and any unsecured guaranty obligations of
Parent and RMBL Tennessee with respect to the Wholesale Inventory
Financing;
(i) Indebtedness
of any Person whose assets or Equity Interests are acquired by a
Borrower or any of its Subsidiaries in a Permitted Acquisition
provided, that the aggregate amount of such Indebtedness
outstanding at any time does not exceed $250,000 and was not
incurred in connection with, or in contemplation of, such Permitted
Acquisition;
(l) other
Indebtedness, including Indebtedness covered by, but in excess of
the amounts permitted under clauses (b), (f) and (i) above, at any
time outstanding in an amount not to exceed $2,000,000, (which
amount shall be reduced by the aggregate amount of Indebtedness
described in clauses (b), (f) and (i) above, in each case up to the
amount permitted thereunder, that is outstanding as of the date of
determination).
(iii) The
specified clauses of the defined term “Permitted
Investments” set forth in Section 1.1 of the
Agreement are amended and restated as set forth below:
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(b) (i)
all repurchases of stock from former employees, directors, or
consultants of Borrower under the terms of applicable repurchase
agreements at the original issuance price of such securities in an
aggregate amount not to exceed $100,000 in any fiscal year,
provided that no Event of Default has occurred and is continuing or
could exist after giving effect to the repurchases, and (ii) all
repurchases of stock from former employees, directors, officers or
consultants pursuant to the Wholesale Transaction
Documents;
(j) joint
ventures or strategic alliances in the ordinary course of
Borrowers’ business consisting of the nonexclusive licensing
of technology, the development of technology or the providing of
technical support, provided that cash Investments (if any) by any
Borrower do not exceed $750,000 in the aggregate in any fiscal
year;
(l) additional
Investments, including Investments covered by, but in excess of the
amounts permitted under, clauses (b)(i) and (j) above, that do not
exceed $1,500,000 during the term of this Agreement (less the
amount of Investments described in clauses (b)(i) and (j) above
made, in each case, up to the amount permitted thereunder, from the
Closing Date through the date of determination).
(iv) The
specified clauses of the defined term “Permitted Liens”
set forth in Section 1.1 of the
Agreement are amended and restated as set forth below:
(m) (i)
Liens on Cash securing obligations permitted under clause (f) of
the definition of Permitted Indebtedness and (ii) security deposits
in connection with real property leases, the combination of (i) and
(ii) in an aggregate amount not to exceed $500,000 at any
time;
(o) Liens
securing Indebtedness pursuant to a Qualified Inventory Financing
or a Wholesale Inventory Financing, provided that (i) such Liens
are subject to the Inventory Financing Intercreditor Agreement or
Wholesale Inventory Financing Intercreditor Agreement, as
applicable, (ii) any cash collateral subject to a Lien in favor of
Inventory Financing Lenders shall not exceed the amount of the
Permitted Inventory Financing Cash Collateral, and (iii) with
respect to the Wholesale Inventory Financing, such Liens are
limited to the assets of Wholesale.
(v) The defined term
“Permitted Transfers” set forth in Section 1.1 of the
Agreement is amended by amending and restating clause (e) thereof as
follows:
(e) other
transfers of assets having a fair market value of not more than
$750,000 in the aggregate in any fiscal year.
(vi) The
defined term “Qualified Inventory Financing” set forth
in Section 1.1 of the Agreement is hereby amended and restated as
follows:
“Qualified Inventory
Financing” means Indebtedness owing to Inventory
Financing Lenders pursuant to an Inventory Financing Agreement
(excluding, for the avoidance of doubt, the Wholesale Inventory
Financing), provided that (i) any Inventory Financing Lender shall
have entered into and continue to be subject to the Inventory
Financing Intercreditor Agreement with respect to any Inventory
Financing Agreement to which it is a party, (ii) the aggregate
amount of such Indebtedness at any time outstanding shall not
exceed an amount equal (x) 85% of the aggregate book value of all
Inventory of Borrowers, on consolidated basis less (y) the
aggregate amount of cash collateral maintained by such Inventory
Financing Lenders, (iii) the advance rates shall not deviate
materially from the advance rate structure pursuant to the
inventory financing arrangements as in effect on the First Amendment Effective Date, and (iv)
the interest rate and applicable fees shall not be higher and the
cash collateral or deposit required shall not be a higher
percentage of the approved credit limit, in each case, relative to
the inventory financing arrangements as in effect on the
First Amendment Effective
Date.
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(vii) Section
1.1 of the Loan Agreement is hereby amended to delete each
of the following defined terms:
“Performance
Milestone I”
“Performance
Milestone II”
(viii) Section
2.1(a) of the Loan Agreement is hereby amended and restated
to read as follows:
(a) Growth
Capital Term Commitment. As of the Closing Date, Lender severally
(and not jointly) has made a Growth Capital Term Loan Advance in
principal amount of $5,000,000 (“Tranche
I”). On the First
Amendment Effective Date, Lender will severally (and not jointly)
make, and Borrower Representative shall request, a Growth Capital
Term Loan Advance in principal amount of $5,000,000
(“Tranche
II”). During the period
commencing upon Borrowers’ achievement of Performance
Milestone III and ending December 15, 2019, Borrower Representative
may request an additional Growth Capital Term Loan Advance in an
amount of $5,000,000 (“Tranche
III”). Upon Borrower
Representative’s request and approval by Lender’s
investment committee, in its sole discretion, Borrower
Representative may request additional Growth Capital Term Loan
Advances in an aggregate principal amount $5,000,000
(“Tranche
IV”). The aggregate
principal Growth Capital Term Loan Advances outstanding shall not
exceed the Maximum Growth Capital Term Loan
Amount.
(ix) Section
2.1(d) of the Loan Agreement is hereby amended and restated
to read as follows:
(d) Payment.
Borrowers will pay interest on each Growth Capital Term Loan
Advance on the first Business Day of each month, beginning the
month after the Advance Date continuing until (but not including)
the Amortization Date. Borrowers shall repay the aggregate
principal balance of the Growth Capital Term Loan Advances under
each Tranche that is outstanding on the day immediately preceding
the Amortization Date, in equal monthly installments of principal
and interest (mortgage style) beginning on the Amortization Date
and continuing on the first Business Day of each month thereafter
until the Secured Obligations (other than inchoate indemnity
obligations) are repaid, provided that if the Term Loan Interest
Rate is adjusted in accordance with its terms, or the Amortization Date is extended, the amount
of each subsequent monthly installment shall be recalculated. If
the Interest-Only Extension Condition is met after June 30, 2019,
Borrowers may from the first Business Day of each month after the
date the Interest-Only Extension Condition is met, make payments of
interest only through the Amortization Date, as extended in
accordance with its terms, provided that in no event shall any
payment of principal and interest made prior to the date the
Interest-Only Extension Condition was met be refunded. The entire
principal balance of the Growth Capital Term Loan Advances pursuant
to each Tranche and all accrued but unpaid interest hereunder,
shall be due and payable on the applicable Term Loan Maturity Date.
Borrowers shall make all payments under this Agreement without
setoff, recoupment or deduction and regardless of any counterclaim
or defense. Lender will initiate debit entries to the applicable
Borrower’s account as authorized on the ACH Authorization (i)
on each payment date of all periodic obligations payable to Lender
under each Growth Capital Term Loan Advance and (ii) out-of-pocket
legal fees and costs incurred by Agent or Lender in connection
with Section 11.11
of this Agreement; provided that, with
respect to clause (i)
above, in the event that Lender or
Agent informs Borrower Representative that Lender will not initiate
a debit entry to such Borrower’s account for a certain amount
of the periodic obligations due on a specific payment date,
Borrowers shall pay to Lender such amount of periodic obligations
in full in immediately available funds on such payment date;
provided, further, that, with respect to clause (i)
above, if Lender or Agent informs
Borrower Representative that Lender will not initiate a debit entry
as described above later than the date that is three (3) Business
Days prior to such payment date, Borrowers shall pay to Lender such
amount of periodic obligations in full in immediately available
funds on the date that is three (3) Business Days after the date on
which Lender or Agent notifies Borrower Representative thereof;
provided, further, that, with respect to clause (ii)
above, in the event that Lender or
Agent informs Borrower Representative that Lender will not initiate
a debit entry to a Borrower’s account for specified
out-of-pocket legal fees and costs incurred by Agent or Lender,
Borrowers shall pay to Lender such amount in full in immediately
available funds within three (3) Business Days.
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(x) Section 2.4 of the Loan
Agreement is hereby amended and restated to read as
follows:
2.4 Prepayment.
At its option, upon at least seven (7) Business Days prior written
notice to Agent, Borrowers may prepay all, but not less than all,
of the outstanding Advances by paying the entire principal balance,
all accrued and unpaid interest thereon, together with
the applicable prepayment charge equal
to the following percentage of the Advance amount being prepaid:
(x) with respect to amounts advanced pursuant to Tranche I prepaid
on or prior to the one year anniversary of the Closing Date, 3.0%,
and (y) with respect to amounts advanced pursuant to any Tranche
other than Tranche I prepaid on or prior to the one year
anniversary of the First Amendment Effective Date, 3.0%; and
thereafter through the date that is forty-five (45) days prior to
the applicable Term Loan Maturity Date, 1.0% (each, a
“Prepayment
Charge”), provided that
if the Secured Obligations are prepaid from the proceeds of the
issuance of Indebtedness, Borrowers shall afford Agent the
opportunity to provide a term sheet to refinance the Secured
Obligations (but no Borrower shall be required to enter into a
refinancing transaction with Agent or any Lender even if on
substantially similar terms as the proposed issuance). Borrowers
agree that the Prepayment Charge is a reasonable calculation of
Lender’s lost profits in view of the difficulties and
impracticality of determining actual damages resulting from an
early repayment of the Advances. Borrowers shall prepay the
outstanding amount of all principal and accrued interest through
the prepayment date and the Prepayment Charge upon the occurrence
of a Change in Control.
(xi) Section
2.5 of the Loan Agreement is hereby amended and restated to
read as follows:
2.5
End of Term Charge. Borrowers shall pay Lender (i) on the earliest
to occur of (A) the Term Loan Maturity Date applicable to Tranche
I, (B) the date that Borrowers prepay the outstanding Secured
Obligations (other than any inchoate indemnity obligations and any
other obligations which, by their terms, are to survive the
termination of this Agreement) in full, or (C) the date that the
Secured Obligations otherwise become due and payable, a charge of
$562,500, and (ii) on the earliest to occur of (A) the Term Loan
Maturity Date applicable to Tranche II and Tranche III, (B) the
date that Borrowers prepay the outstanding Secured Obligations
(other than any inchoate indemnity obligations and any other
obligations which, by their terms, are to survive the termination
of this Agreement) in full, or (C) the date that the Secured
Obligations otherwise become due and payable, a charge equal to the
sum of $295,000 and (iii) 2.35% of any principal amount paid
or prepaid in respect of a Growth Capital Term Loan Advance made
pursuant to Tranche IV. Notwithstanding the required payment date
of such charge, it shall be deemed earned in full by Lender as of
the First Amendment Effective Date, except that amounts payable
based on Growth Capital Term Loan Advances made pursuant to Tranche
IV shall be deemed earned on the applicable Advance Date with
respect to such Advances.
(xii) Section
3.2 of the Loan Agreement is
hereby amended by adding the following sentence at the end thereof:
“Notwithstanding anything to the contrary set forth in this
Agreement, (x) the terms of any Inventory Financing Intercreditor
Agreement and Wholesale Inventory Financing Intercreditor Agreement
shall control the required priority of Agent’s security
interest in the Collateral, to the extent applicable, and any
reference to Agent having a “first lien” or
“highest priority lien” in the Collateral shall, to the
extent applicable, be subject to the priority set forth in such
Inventory Financing Intercreditor Agreement or Wholesale Inventory
Financing Intercreditor Agreement and (y) with respect to
Collateral of Wholesale, prior to the execution and delivery of the
Wholesale Inventory Financing Intercreditor Agreement, any
reference to Agent having a “first lien” or
“highest priority lien” in the Collateral shall be
amended to state that Agent has a “second lien” or
“junior priority lien” in the
Collateral.”
(xiii) Section
4.2(a) of the Loan Agreement is hereby amended and restated
to read as follows:
(a) Agent
shall have received (i) an Advance Request for the relevant Advance
as required by Section
2.1(b), duly executed by Borrower Representative’s
Chief Executive Officer or Chief Financial Officer and (ii) with
respect to the Advance pursuant to Tranche III, a warrant to
purchase Class B Common Stock of Parent, in form and having a
“Warrant Price” and “Applicable Number”
that is the same as such warrant issued to Lender as of the First
Amendment Effective Date.
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(xiv) Section
7.1(i) of the Loan Agreement is hereby amended and restated
to read as follows:
(i) any
material statement, or notice of increased commitment, change in
terms, non-renewal or default or any demand for payment pursuant to
a Qualified Inventory Financing or Wholesale Inventory Financing;
and
(xv) Section
7.2 of the Loan Agreement is
hereby amended by adding the following sentence at the end thereof:
“This Section 7.2
shall not apply to
Wholesale.”.
(xvi) Section
7.4 of the Loan Agreement is hereby amended to amend and
restate clause (d) as follows: “(d) as permitted pursuant to any Inventory Financing
Intercreditor Agreement or any subordination agreement related to
Subordinated Indebtedness, or prepayments of amounts owing
under the Wholesale Inventory Financing in the ordinary course of
business,”
(xvii) Section
7.6 of the Loan Agreement is hereby amended to replace the
reference to “$250,000” therein to
“$1,000,000”.
(xviii) Section
7.11 of the Loan Agreement is hereby amended to amend and
restate the final sentence at the end of such Section: “With
respect to any leased location or location where Collateral (other
than vehicles not constituting Inventory) is held by a bailee,
Borrowers shall deliver a landlord waiver or bailee agreement in
favor of Agent, in form and substance reasonably satisfactory to
Agent, provided that for locations existing as of the Closing Date
and for which a landlord waiver or bailee agreement would be
required, Borrowers may deliver the same within thirty (30) days of
the Closing Date (subject to extension from time to time in
Agent’s reasonable discretion if Borrowers have demonstrated
their use of commercially reasonable efforts to obtain such
landlord waivers and agreements), and for locations existing as of
the First Amendment Effective Date and for which a landlord waiver
or bailee agreement would be required, Borrowers may deliver the
same within thirty (30) days of the First Amendment Effective Date
(subject to extension from time to time in Agent’s reasonable
discretion if Borrowers have demonstrated their use of commercially
reasonable efforts to obtain such landlord waivers and agreements),
and provided further that no landlord waiver or bailee agreement
shall be required to the extent that Collateral (other than
vehicles not constituting Inventory) at all leased or bailee
locations not subject to such a landlord waiver or bailee agreement
does not exceed $750,000 at any time.”
(xix) Section
7.12 of the Loan Agreement is hereby amended by amending and
restating the last sentence thereof to read as follows: “Any
Subsidiary, including RMBL Missouri but excluding Wholesale, that
receives proceeds from the sale of Inventory, shall, after
settlement of any amounts due in respect of a Qualified Inventory
Financing, with respect to the Inventory sold, immediately transfer
the excess proceeds, if any, to a Deposit Account that is subject
to an Account Control Agreement in favor of Agent pursuant to which
Agent is the first lien or controlling secured party, as
applicable.”
(xx) Section
7.21 of the Loan Agreement is hereby amended and restated to
read as follows:
7.21 Financial
Covenants.
(a) For
each fiscal quarter prior to the draw of Tranche III, Borrowers
shall either (i) achieve Adjusted EBITDA and Gross Profit for such
fiscal quarter, in an amount not less than the amounts set forth in
the schedule below for the relevant period (the “Performance Covenant”) or
(ii) maintain Qualified Cash of at least $10,000,000 at all times
(the “Liquidity
Covenant”), provided that if at any time the
Performance Covenant is not met for the immediately preceding
fiscal quarter, after the Compliance Certificate is delivered for
such fiscal quarter, Borrowers shall not be in default under this
Section 7.21(a) if
Borrowers maintain compliance with the Liquidity Covenant at all
times thereafter until such time as the Performance Covenant is met
(at which time quarterly testing shall resume).
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:
Signature:
/s/
Xxxxxxxx Xxxxxxxx
Print Name:
Xxxxxxxx Xxxxxxxx
Title: Chief
Executive Officer
NEXTGEN
PRO, LLC
Signature:
/s/
Xxxxxxxx Xxxxxxxx
Print Name:
Xxxxxxxx Xxxxxxxx
Title:
President
RMBL
MISSOURI, LLC
Signature:
/s/
Xxxxxxxx Xxxxxxxx
Print Name:
Xxxxxxxx Xxxxxxxx
Title:
Manager
RMBL
TEXAS, LLC
Signature:
/s/
Xxxxxxxx Xxxxxxxx
Print Name:
Xxxxxxxx Xxxxxxxx
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/
Xxxxxxxx Xxxxxxxx
Print Name:
Xxxxxxxx Xxxxxxxx
Title:
Manager
RMBL
EXPRESS, LLC
Signature:
/s/
Xxxxxxxx Xxxxxxxx
Print Name:
Xxxxxxxx Xxxxxxxx
Title: Chief
Executive Officer
WHOLESALE,
LLC
Signature:
/s/ Xxxxxx
Xxxxxx
Print Name: Xxxxxx
Xxxxxx
Title: Chief
Administrative Officer and Corporate Secretary
WHOLESALE EXPRESS,
LLC
Signature:
/s/ Xxxxxx
Xxxxxx
Print Name: Xxxxxx
Xxxxxx
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/ Xxxx
Xxxxx
Print Name:
Xxxx Xxxxx
Title: Associate
General Counsel
LENDER:
HERCULES CAPITAL,
INC.
Signature:
/s/ Xxxx
Xxxxx
Print Name: Xxxx
Xxxxx
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
00-0000000
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
00-0000000
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
00-0000000
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
00-0000000
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:
0000
Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
3.
Borrower
Representative hereby represents and warrants to Agent, on behalf
of New Borrowers, that New Borrowers also utilize the following
locations:
0000
Xxxxxx Xxxx
Xxxxx
000
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
Wholesale Express,
LLC:
Woodfield Office
Park
00000
Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxxxxx 00000
0000-0000 Xxxxxxxx
Xxxxxxxxx
Xxxxx
Xxxxxx, Xxxxxxxxx 00000
0000
Xxxxx Xxxx Xxxxxx Xxxx, Xxxxx X-000
Xxxx,
Xxxxxxx 00000
Wholesale,
LLC:
0
Xxxxxxxxxx Xxxxxxx, Xxxx Xx. 00
Richmond
Professional Suites
000 X 00xx Xx,
Xxxxx 000
Xxxxxxxx, Xxxxx
00000
0000
Xxxxxxxx Xxxx
0000
Xxxxxxxx Xxxxxxxxx
Xxxxx
Xxxxxx, Xxxxxxxxx 00000
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.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Reference is made to that certain Loan and
Security Agreement dated as of April 30, 2018 (as amended,
restated, supplemented or otherwise modified from time to time, the
“Loan
Agreement”), by and among
RUMBLEON, INC., a Nevada corporation, NEXTGEN PRO, LLC, a Delaware
limited liability company, RMBL MISSOURI, LLC, a Delaware liability
company, RMBL TEXAS, LLC, a Delaware limited liability company,
RMBL TENNESSEE, LLC, a Delaware limited liability company, RMBL
EXPRESS, LLC, a Delaware limited liability company, WHOLESALE, LLC,
a Tennessee limited liability company, WHOLESALE EXPRESS, LLC, a
Tennessee limited liability company, and each of their Qualified
Subsidiaries from time to time party to the Loan Agreement
(individually, each, a “Borrower”,
and collectively, “Borrowers”),
the several banks and other financial institutions or entities from
time to time parties to this Agreement (collectively,
“Lender”)
and HERCULES CAPITAL, INC., a Maryland corporation, in its capacity
as administrative agent and administrative agent for Lender (in
such capacity “Agent”).
All capitalized terms not defined herein shall have the same
meaning as defined in the Loan Agreement.
The undersigned is an Officer of the Borrower
Representative, knowledgeable of all Borrowers’ financial
matters, and is authorized to provide certification of information
regarding Borrowers; hereby certifies, in such capacity, that in
accordance with the terms and conditions of the Loan Agreement,
each Borrower is in compliance in all material respects for the
period ending ___________ with all covenants, conditions and terms
and hereby reaffirms that as of the date of the fiscal quarter
ended _________________ all representations and warranties
contained therein (except Sections 5.3
and
5.4) are true and correct on and as of the date of
this Compliance Certificate with the same effect as though made on
and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date, after giving effect
in all cases to any standard(s) of materiality contained in the
Loan Agreement as to such representations and warranties. Attached
are the required documents and calculations supporting the above
certification. The undersigned further certifies that the financial
statements and calculations are
prepared in accordance with GAAP (to the extent required pursuant
to the terms of the Loan Agreement) and are consistent from one
period to the next except as explained below.
|
REPORTING REQUIREMENT
|
REQUIRED
|
CHECK IF ATTACHED
|
|
Monthly Financial Statements (Section 7.1(a))
|
Monthly, within 30 days
|
☐
|
|
Quarterly Financial Statements (or link to 10-Q filing)
(Section
7.1(b))
|
Quarterly, within 45 days or such later date as permitted by the
SEC or under the applicable securities laws (which may be delivered
by link through investor relations page)
|
☐
|
|
Annual Financial Statements (or link to 10-K) (Section 7.1(c))
|
Annually, within 90 days or such later date as is permitted by the
SEC or under the applicable securities laws (which may be delivered
by link through investor relations page)
|
☐
|
|
Compliance Certificate (Section
7.1(d))
|
Together with Monthly or Quarterly Statements
|
☐
|
|
A/R Agings Report (if A/R > $1,000,000) (Section 7.1(e))
|
Monthly, within 30 days
|
☐
|
|
A/P Agings Report (if A/P > $600,000) (Section 7.1(e))
|
Monthly, within 30 days
|
☐
|
|
Budget and Projections (Section
7.1(g))
|
Annually, within 60 days of fiscal year end, and promptly upon any
Board approved update
|
☐
|
|
Daily Inventory Report (including detail of financed / not financed
Inventory) for Qualified Inventory Financing (Section 7.1(h))
|
Every Business Day
|
☐
|
|
Material Statement, Report or Notice of any increased commitment,
change in terms, non-renewal or default or any demand for payment
received pursuant to Qualified Inventory Financing or Wholesale
Inventory Financing (Section
7.1(i))
|
When received
|
☐
|
|
FINANCIAL COVENANTS
|
REQUIRED
|
ACTUAL
|
|
Minimum Cash / Minimum Gross Profit and EBITDA (prior to Tranche
III Advance)
|
Maintain levels of Gross Profit and EBITDA set forth in
Section 7.21(a),
tested quarterly: [is met/not met/not required to be
met];
OR
Maintain Minimum Cash of at least $10,000,000: [is met/not met/not
required to be met]
|
☐ not
applicable
As of most recent fiscal quarter ended:
Required Gross Profit
$
Actual Gross Profit
$
Required EBITDA
$
Actual EBITDA
$
Unrestricted First Lien Cash: $
|
|
Minimum Quarterly Revenue (after Tranche III Advance)
|
75% of Budget
|
☐ not
applicable
Budget Quarterly Revenue
$
Actual Quarterly Revenue
$
% of Budget
|
|
Minimum Quarterly Adjusted EBITDA, if average cash balance is less
than $15,000,000 (after Tranche III Advance)
|
$2,000,000
|
☐ not
applicable
$
|
|
OTHER COVENANTS
|
REQUIRED
|
ACTUAL
|
|
Equipment Financing
|
Not to exceed $1,000,000 outstanding at any time
|
$
|
|
Letters of Credit (cash secured) except for security for
leases
|
Not to exceed $500,000 outstanding at any time
|
$
|
|
Acquired Indebtedness
|
Not to exceed $250,000 outstanding at any time
|
$
|
|
Other Indebtedness
|
Not to exceed $2,000,000 (less on Equipment Financing, Letters of
Credit and Acquired Indebtedness outstanding) outstanding at any
time
|
$
|
|
Qualified Inventory Financing
|
Not to exceed 85% of aggregate Inventory value less Inventory
Financing Lenders’ aggregate cash collateral
|
(1) Aggregate Inventory value:
$
(2) Aggregate Inventory financing Lender cash
collateral
$
Maximum Inventory financing permitted (line 1 less line
2)
$
Actual Inventory financing amount outstanding
$
|
|
Wholesale Inventory Financing
|
Not to exceed $75,000,000 outstanding at any time
|
$
|
|
Repurchases of stock from employees, directors or
consultants
|
Not to exceed $100,000 in any fiscal year (excluding repurchases in
connection with the Wholesale Transaction Documents, which
repurchases shall not count toward this cap)
|
$
|
|
Joint Ventures
|
Cash contributions not to exceed $750,00 in any fiscal
year
|
$
|
|
Additional Investments
|
Not to exceed $1,500,000 (less Repurchases and Joint Ventures made
during the term) during the term
|
$
|
|
Investments in Foreign Subsidiaries
|
As approved by Agent
|
$
|
|
Cash Collateral and Security Deposits
|
Not to exceed $500,000 at any time
|
$
|
|
Landlord Waivers and Bailee Agreements
|
For locations where Collateral (other than non-Inventory vehicles)
in excess of $750,000 is maintained
|
☐ all applicable
locations covered
☐ landlord waiver or
bailee agreement required for the following new
location:
|
The undersigned hereby also confirms the below accounts represent
all depository accounts and securities accounts presently open in
the name of each Borrower or Subsidiary, as
applicable.
|
|
|
Depository AC #
|
Financial Institution
|
Account Type (Depository / Securities)
|
Last Month Ending Account Balance
|
Purpose of Account
|
|
BORROWER Name/Address:
|
|
|||||
|
|
1
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
||||||
|
BORROWER SUBSIDIARY COMPANY Name/Address
|
|
|||||
|
|
1
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
||||||
SCHEDULE
1.1
COMMITMENTS
|
LENDER
|
TRANCHE I COMMITMENT
|
TRANCHE II COMMITMENT
|
TRANCHE III COMMITMENT
|
TRANCHE IV COMMITMENT
|
|
Hercules Capital, Inc.
|
$5,000,000
|
$5,000,000
|
$5,000,000
|
$5,000,000, in Agent’s sole discretion, upon approval by
Agent’s investment committee
|
|
TOTAL COMMITMENTS
|
$5,000,000
|
$5,000,000
|
$5,000,000
|
$5,000,000, in Agent’s sole discretion, upon approval by
Agent’s investment committee
|
SCHEDULE
5.14
SUBSIDIARIES
RMBL
Express, LLC, a Delaware limited liability company
RMBL
Tennessee, LLC, a Delaware limited liability company
Wholesale,
LLC, a Tennessee limited liability company
Wholesale
Express, LLC, a Tennessee limited liability company
