RumbleOn(RMBL) - 2025 Q2 - Quarterly Results

AMENDMENT NO. 10 TO TERM LOAN CREDIT AGREEMENT Preliminary Statements This section introduces Amendment No. 10 to the Term Loan Credit Agreement, identifying parties and the Borrower's requested amendments - Amendment No. 10, dated August 10, 2025, is between Rumbleon, Inc. (Borrower), Subsidiary Guarantors, Oaktree Fund Administration, LLC (Agent), and Lenders[2] - It amends the Term Loan Credit Agreement dated August 31, 2021, which had already been amended nine times previously[4] - The Borrower requested amendments to certain provisions of the Existing Credit Agreement, and Lenders agreed[5] Section 1. Definitions Capitalized terms in Amendment No. 10, if undefined, retain meanings from the Existing Credit Agreement as modified - Capitalized terms not defined in this Amendment retain their meanings from the Existing Credit Agreement, as amended[6] Section 2. Amendments to Existing Credit Agreement This section details specific changes to the Existing Credit Agreement, including textual modifications and new Exhibits - The Existing Credit Agreement is amended by deleting stricken text and adding double-underlined text as detailed in Exhibit A[7] - New Exhibits N and O are added to the Existing Credit Agreement as Exhibit B and Exhibit C, respectively[8] Section 3. Conditions of Effectiveness Section 2's effectiveness requires execution, fee payment, Q4 2024 financials, a $10,000,000 capital raise commitment, and a solvency certificate - Effectiveness of Section 2 is conditional on the "Tenth Amendment Effective Date" when specific conditions are met[9] - Conditions include execution of the Amendment by all parties, payment of all required fees and expenses by August 10, 2025[9][10] - Loan Parties must deliver quarterly financial statements for the fiscal quarter ending December 31, 2024[11] - Administrative Agent must receive a commitment letter for a capital raise of at least $10,000,000 through common equity or subordinated debt[12] - A Responsible Officer of the Borrower must certify the solvency of the Borrower and its Subsidiaries, consolidated, before and after the transactions[13] Section 4. Post-Closing Covenants Borrower must fulfill post-closing covenants by August 26, 2025, including capital raise, loan repayment, and lease/warrant amendments - Borrower must consummate the Tenth Amendment Capital Raise Transactions and receive at least $10,000,000 by August 26, 2025[15] - Borrower must repay an aggregate of not less than $20,000,000 of loans by August 26, 2025, with at least $10,000,000 from the capital raise[16][17] - Lease agreements must be extended to August 31, 2034, and the Floor Plan Facility Agreement's "Commitment Termination Date" extended to September 30, 2029, by August 26, 2025[18] - Warrant Agreements must be amended by August 26, 2025, to reset the strike price at a 25% premium to the 30-day post-announcement VWAP of Class B Common Stock and extend the term to five years from the Tenth Amendment Effective Date[19] - Failure to comply with these covenants constitutes an immediate Event of Default[14] Section 5. Representations and Warranties Borrower warrants due authorization, legal compliance, no continuing default, and accuracy of Credit Agreement representations - Borrower represents that the Amendment's execution and performance are duly authorized and do not violate organizational documents, material contractual obligations, or applicable law[20] - The Amendment constitutes a legal, valid, and binding obligation of the Borrower[21] - After the Tenth Amendment Effective Date, no Default or Event of Default has occurred and is continuing[22] - Representations and warranties in Article V of the Credit Agreement are true and correct in all material respects as of the Tenth Amendment Effective Date[23] Section 6. Reference to and Effect on the Existing Credit Agreement and the Loan Documents Amendment No. 10 ratifies existing Loan Documents, constitutes a Loan Document itself, and is not a novation - This Amendment does not limit, impair, or waive rights under the Existing Credit Agreement or other Loan Documents, which are ratified and affirmed[25] - The Collateral Documents continue to secure all Loan Party obligations[25] - This Amendment constitutes a Loan Document from the Tenth Amendment Effective Date[26] - The amendment is not a novation, and no Default or Event of Default exists after the Tenth Amendment Effective Date[25] Section 7. Execution in Counterparts The Amendment may be executed in multiple counterparts, with electronic delivery of signatures being effective - The Amendment may be executed in counterparts, and electronic signatures (e.g., .pdf) are effective[27] Section 8. Notices All communications and notices for this Amendment must follow procedures in Section 10.02 of the Credit Agreement - Notices and communications are governed by Section 10.02 of the Credit Agreement[28] Section 9. Severability Invalid Amendment provisions do not affect others; parties will negotiate replacements for similar economic effect - If any provision is illegal, invalid, or unenforceable, the rest of the Amendment remains valid, and parties will negotiate replacements[29] Section 10. Successors This Amendment's provisions bind and benefit parties and their permitted successors and assigns per Section 10.07 of the Credit Agreement - Provisions are binding on and benefit parties and their permitted successors and assigns[30] Section 11. Governing Law, Jurisdiction, Service of Process; Waiver of Right to Trial by Jury Sections 10.14 and 10.15 of the Credit Agreement, covering governing law, jurisdiction, and jury trial waiver, are incorporated - Sections 10.14 and 10.15 of the Credit Agreement (governing law, jurisdiction, service of process, jury trial waiver) are incorporated by reference[31] Section 12. Required Lenders The Agent notifies the Borrower that Lenders party to this Amendment represent all Lenders under the Existing Credit Agreement - The Lenders party to this Amendment represent all Lenders under the Existing Credit Agreement[31] Section 13. Change of Name and Address for Notices Borrower notifies of name change to RideNow Group, Inc., symbol to RDNW, and new notice address, effective August 13, 2025 - Borrower intends to change its name to "RideNow Group, Inc." and its Nasdaq trading symbol to "RDNW", effective August 13, 2025[32] - A new address and telephone number for notices are designated, effective August 13, 2025[32] TERM LOAN CREDIT AGREEMENT (AS AMENDED) Table of Contents This section provides the Term Loan Credit Agreement's table of contents, outlining its structure and guiding detailed provisions - The Table of Contents lists Articles I through X, covering definitions, commitments, taxes, conditions, representations, covenants, events of default, administrative agent roles, and miscellaneous provisions[84][85][86][88][90][91][93][94][96] - It also details various schedules (e.g., Collateral Documents, Guarantors, Litigation) and exhibits (e.g., Committed Loan Notice, Term Note, Compliance Certificate, Cash Flow Projection)[100][101] ARTICLE I - Definitions and Accounting Terms This article establishes foundational terminology and accounting principles for the Credit Agreement, defining terms and setting rules for consistent application - Defines key terms such as "Adjusted Term SOFR," "Administrative Agent," "Affiliate," "Applicable Rate," "Benchmark Replacement," "Consolidated EBITDA," "Consolidated Total Net Debt," "Event of Default," "Loan Parties," "Material Adverse Effect," "Permitted Liens," "Required Lenders," and "Term Loans"[113][114][117][124][137][182][193][215][307][346][371][420] - Establishes accounting principles (GAAP or IFRS election), rounding rules for financial ratios, and guidelines for currency conversions[448][450][452][456][457][458] Applicable Rate Changes (on and after Tenth Amendment Effective Date) | Loan Type | Rate (Prior to Tenth Amendment) | Rate (On and after Tenth Amendment) | | :---------- | :------------------------------ | :---------------------------------- | | SOFR Loans | 8.25% | 7.75% | | Base Rate Loans | 7.25% | 6.75% | Floor Rate Changes (on and after Tenth Amendment Effective Date) | Period | Floor Rate | | :----- | :--------- | | Prior to Tenth Amendment Effective Date | 1.00% | | On and after Tenth Amendment Effective Date | 3.00% | ARTICLE II - The Commitments and Credit Extensions This article details loan issuance, interest rates, prepayments, commitment termination, and defaulting lenders, ensuring clarity on funding and repayment - Initial Term Loans are a single borrowing, not reborrowable. Delayed Draw Term Loans can be made up to five times, also not reborrowable, and become part of the Initial Term Loans upon funding[464][465] - Optional prepayments of any Class of Term Loans are permitted without premium or penalty (except as per Section 2.03(e)), with specific notice requirements[473][474] - Mandatory prepayments are required for Excess Cash Flow (50% if > $2.5M), Net Cash Proceeds from asset Dispositions/Casualty Events (100% if > $250K single or $1M aggregate), and Net Cash Proceeds from certain Indebtedness/Equity Issuances[476][478][486] - A Call Premium (Make-Whole Amount or Repayment Fee) is applicable for certain prepayments or accelerations, with rates varying based on the timing relative to the Make-Whole Expiry Date[502][503] - Unused Delayed Draw Term Commitments terminate on the earlier of 18 months after Closing Date or specific termination events[505] ARTICLE III - Taxes, Increased Costs Protection and Illegality This article addresses tax implications, increased costs, and legal changes, outlining Borrower indemnification, Lender compensation, and benchmark rate replacement - Borrower indemnifies Agents and Lenders for "Indemnified Taxes" and "Other Taxes," ensuring net payments are received[539][540] - Lenders can request additional compensation for increased costs or reduced returns due to changes in law affecting loans or capital adequacy[552][553] - If a benchmark rate (e.g., Term SOFR) becomes unavailable or unlawful, the Administrative Agent and Borrower may amend the agreement to replace it with a "Benchmark Replacement" and make "Conforming Changes"[569][571] ARTICLE IV - Conditions Precedent to Credit Extensions This article specifies mandatory conditions for credit extensions, including Loan Document execution, fee payment, acquisition, financial statements, and accurate representations - Conditions for the Closing Date include executed Loan Documents, payment of fees, consummation of the Equity Contribution ($170M minimum) and Acquisition, delivery of audited/unaudited financial statements, and true/correct Specified Acquisition Agreement Representations and Specified Representations[577][578][579][580][582][583] - Conditions for subsequent Delayed Draw Term Loans include true/correct representations and warranties (Specified Representations for Permitted Acquisitions), no Default (no Event of Default for Permitted Acquisitions), receipt of a Credit Extension Request, Consolidated Total Net Leverage Ratio not exceeding 2.50:1.00 (Pro Forma Basis), and use of proceeds for Permitted Acquisitions/investments[586][588][589][590] ARTICLE V - Representations and Warranties This article contains comprehensive representations and warranties by the Borrower regarding legal, financial, and operational standing, including solvency and loan proceeds - Borrower warrants its legal existence, power, and authority, and compliance with all applicable laws (including USA PATRIOT Act and anti-money laundering laws)[596] - Financial statements are presented fairly in all material respects, and no Material Adverse Effect has occurred since the most recent audited financial statement[600][601] - Borrower and its Subsidiaries are Solvent on a consolidated basis after giving effect to the Transaction[617] - Proceeds of Initial Term Loans are for Transactions and upfront fees; Incremental Facility proceeds for working capital, acquisitions, investments, and general corporate purposes; Delayed Draw Term Loans for Permitted Acquisitions and earn-outs[619][620] - No Covered Entity or Covered Entity Controlling Person is a Sanctioned Person, and proceeds will not be used in violation of Anti-Terrorism Laws or FCPA[621][622] ARTICLE VI - Affirmative Covenants This article outlines the Borrower's ongoing positive obligations, including financial reporting, legal compliance, security interests, loan proceeds, and critical milestones - Borrower must deliver audited annual financial statements (within 120 days) and unaudited quarterly financial statements (within 60 days), along with Compliance Certificates and management's discussion and analysis[626][627][631] - Monthly cash reports and Cash Flow Projections (with variance reports) are required, commencing after the Tenth Amendment Effective Date[629][630] - Borrower must ensure the Collateral and Guarantee Requirement is satisfied, including pledging Equity Interests and granting perfected Liens on assets[645][646] - Borrower must use commercially reasonable best efforts to dispose of "Specified Property" by December 31, 2023, and use Net Cash Proceeds to prepay loans[665] - Borrower must consummate a Rights Offering by December 1, 2023, to raise at least $100,000,000 and use Net Cash Proceeds to prepay loans[666] - Borrower must deliver a "no outs" commitment letter for a capital raise of at least $30,000,000 by December 1, 2024, with specific equity and floor plan financing components[671][672] - Refinancing Commitment Milestones require commencing a refinancing process and receiving a bona fide offer by September 30, 2026, and full repayment of outstanding Loans by November 30, 2026[675] ARTICLE VII - Negative Covenants This article imposes strict limitations on the Borrower, restricting Liens, Investments, Indebtedness, corporate changes, asset dispositions, and restricted payments - Prohibits Liens except for permitted categories, including those under Loan Documents, existing Liens, tax Liens, purchase money Liens, and Liens securing Floor Plan Financings[677][678][679][680][681] - Restricts Investments to specified categories, including Cash Equivalents, intercompany investments, Permitted Acquisitions (subject to conditions), and limited other investments[682][683][684][685][686] - Limits Indebtedness to specific types, such as Loan Document Indebtedness, Permitted Refinancings, certain Guarantee Obligations, Floor Plan Financings, and the Convertible Notes (with specific conditions)[688][689][690][691][692] - Restricts fundamental changes (mergers, liquidations) and dispositions of assets, with exceptions for intercompany transactions, Permitted Acquisitions, and the 2023 Specified Property Disposition[696][697][698] - Limits Restricted Payments (dividends, share repurchases) to specific exceptions, including payments to the Borrower/Restricted Subsidiaries, equity issuances, and limited repurchases for employees[699][700][701] - Prohibits transactions with Affiliates unless on arm's-length terms or specifically permitted[702] - Restricts prepayments of "Specified Debt" (including Convertible Notes) with exceptions for Permitted Refinancings and limited other prepayments based on leverage ratios[704] Maximum Consolidated Total Net Leverage Ratio | Four Fiscal Quarters Ending | Maximum Consolidated Total Net Leverage Ratio | | :-------------------------- | :------------------------------------------ | | December 31, 2023 | 5.50 to 1.00 |\ | March 31, 2024 | 5.00 to 1.00 |\ | June 30, 2024 | 5.50 to 1.00 |\ | September 30, 2024 | 5.50 to 1.00 |\ | December 31, 2024 | 9.50 to 1.00 |\ | March 31, 2025 | 9.50 to 1.00 |\ | June 30, 2025 | 7.00 to 1.00 |\ | September 30, 2025 | 6.75 to 1.00 |\ | December 31, 2025 | 6.50 to 1.00 |\ | March 31, 2026 | 6.50 to 1.00 |\ | June 30, 2026 | 6.25 to 1.00 |\ | September 30, 2026 | 6.00 to 1.00 |\ | December 31, 2026 | 5.75 to 1.00 |\ | March 31, 2027 | 5.50 to 1.00 |\ | June 30, 2027 | 5.25 to 1.00 | Maximum Consolidated Senior Secured Net Leverage Ratio | Four Fiscal Quarters Ending | Maximum Consolidated Senior Secured Net Leverage Ratio | | :-------------------------- | :--------------------------------------------------- | | December 31, 2023 | 5.50 to 1.00 |\ | March 31, 2024 | 5.00 to 1.00 |\ | June 30, 2024 | 5.00 to 1.00 |\ | September 30, 2024 | 5.00 to 1.00 |\ | December 31, 2024 | 9.00 to 1.00 |\ | March 31, 2025 | 9.00 to 1.00 |\ | June 30, 2025 | 6.75 to 1.00 |\ | September 30, 2025 | 6.50 to 1.00 |\ | December 31, 2025 | 6.25 to 1.00 |\ | March 31, 2026 | 6.25 to 1.00 |\ | June 30, 2026 | 6.00 to 1.00 |\ | September 30, 2026 | 5.75 to 1.00 |\ | December 31, 2026 | 5.50 to 1.00 |\ | March 31, 2027 | 5.25 to 1.00 |\ | June 30, 2027 | 5.00 to 1.00 | Minimum Liquidity Requirements (On and after Tenth Amendment Effective Date) | Calendar Months Ending | Minimum Liquidity | | :--------------------- | :---------------- | | August 31, 2025 - November 30, 2025 | $20,000,000 | | December 31, 2025 - February 28, 2026 | $20,000,000 | | March 31, 2026 - May 31, 2026 | $22,000,000 | | June 30, 2026 - August 31, 2026 | $24,000,000 | | September 30, 2026 - November 30, 2026 | $26,000,000 | | December 31, 2026 - February 28, 2027 | $28,000,000 | | March 31, 2027 - August 31, 2027 | $30,000,000 | - Prohibits engaging in any other form of consumer warehouse lending outside of the existing Consumer Warehouse Facility[719] ARTICLE VIII - Events of Default and Remedies This article defines events of default, specifies remedies for Agents and Lenders, including loan acceleration, and outlines a "Cure Right" for financial defaults - Events of Default include failure to pay principal (when due) or interest/other amounts (within 5 Business Days), breach of specific covenants (e.g., financial statements, capital raise, Article VII), incorrect representations, cross-default on Indebtedness > $Threshold Amount, insolvency proceedings, inability to pay debts, judgments > $Threshold Amount, invalidity of Collateral Documents, Change of Control, ERISA Events, and failure to meet Refinancing Commitment Milestones[721][722][723][724][725] - Upon an Event of Default, the Administrative Agent (at Required Lenders' request) can terminate commitments, accelerate all outstanding loans and other obligations (including Call Premium)[726] - A "Specified Event of Default" (including bankruptcy/insolvency) automatically triggers the Call Premium, which is deemed liquidated damages[727][728] - Borrower has a "Cure Right" for Financial Covenant Defaults by making a Specified Cure Equity Contribution or receiving Specified Cure Debt Proceeds within a "Cure Period," which increases Consolidated EBITDA or Liquidity for recalculation[734][735] - Limitations on Cure Right: at least two fiscal quarters without exercise in any four consecutive quarters, not more than four times during the agreement term, and specific rules for applying cure amounts to leverage vs. liquidity[738] ARTICLE IX - Administrative Agent and Other Agents This article defines the roles, responsibilities, and protections for the Administrative Agent and Collateral Agent, covering appointment, liability, and erroneous payments - Lenders irrevocably appoint and authorize the Administrative Agent to act on their behalf under Loan Documents, including as collateral agent for Liens on Collateral[741][742] - Agents are not liable for actions taken or omitted (except for gross negligence/willful misconduct) and can rely on information and advice[745][746] - Lenders indemnify Agent-Related Persons for Indemnified Liabilities (unless due to gross negligence/willful misconduct)[751] - The Administrative Agent may resign, with a successor appointed by Required Lenders (with Borrower's consent outside of Event of Default)[753] - Collateral Liens are automatically released upon full payment of Obligations, transfer of property, or release of a Guarantor under permitted conditions[759] - Provisions for handling "Erroneous Payments" ensure such payments remain the property of the Administrative Agent and do not discharge Borrower's obligations, with mechanisms for recovery and subrogation[769][770][772][773] ARTICLE X - Miscellaneous This article contains general provisions governing the Credit Agreement, including amendments, waivers, notices, indemnification, assignments, governing law, and fiduciary responsibility - Amendments or waivers generally require written consent of Required Lenders and the Borrower, with specific actions requiring consent of all affected Lenders (e.g., extending maturity, reducing principal/interest)[778][779] - Borrower indemnifies Indemnitees for losses, liabilities, damages, claims, and expenses related to the Loan Documents and transactions, with exceptions for gross negligence, bad faith, or willful misconduct[796] - Lenders can assign rights to "Eligible Assignees" or sell "Participations," subject to conditions, including restrictions on assignments to natural persons or "Specified Competitors"[800][801][807] - Governing law is New York State, with specific carve-outs for Delaware law regarding the Acquisition Agreement. Parties waive the right to trial by jury[821][824] - Borrower acknowledges that the Administrative Agent and Lenders act solely as principals and have no advisory or fiduciary responsibility[832]