Item 1.01. Entry into a Material Definitive Agreement.
Convertible Debentures
As previously disclosed in the Current Report
on Form 8-K filed by Rubicon Technologies, Inc. (the “Company”) with
the Securities and Exchange Commission on December 22, 2022, the Company, on December 16, 2022, entered into a securities purchase agreement
(the “Securities Purchase Agreement”), among other ancillary agreements,
with certain accredited investors, for the issuance and sale, by the Company to such investors, of convertible debentures (the “Convertible
Debentures”) which are convertible into shares of the Company’s Class A common stock, par value $0.0001 (as converted,
the “Conversion Shares”), which Convertible Debentures may be purchased
over the course of a first closing (the “First Closing”) or second
closing (the “Second Closing”). The Securities Purchase Agreement
contains customary representations, warranties, and covenants for the sale and purchase of the Convertible Debentures. The First Closing
occurred on December 16, 2022.
On February 1, 2023, the Company consummated
the Second Closing, in which Convertible Debentures were sold in two tranches. With regards to the first tranche of the Second
Closing (the “First Tranche”), the Company and certain accredited
investors (the “First Tranche Buyers”) entered into a securities
purchase agreement (the “First Tranche SPA”), pursuant to which
the First Tranche Buyers purchased from the Company Convertible Debentures in an aggregate amount of $1,226,000.00, net of an
original issuance discount of approximately $163,467.00, for a total principal amount of approximately $1,389,467.00 in Convertible
Debentures (the “First Tranche Convertible Debentures”). The
First Tranche Convertible Debentures mature on August 1, 2024, 18 months after issuance. The First Tranche Convertible Debentures
are convertible into shares of the Company’s Class A common stock at an initial conversion price equal to the lower of 110%
of: (i) the average closing price of the Company’s Class A common stock for the five (5) trading days immediately preceding
the date of the respective closing or (ii) the closing price of the Company’s Class A common stock immediately preceding the
date of the respective closing, subject to adjustments as further specified in the First Tranche Convertible Debentures. The First
Tranche Convertible Debentures will be fully repayable in cash upon maturity.
In connection with closing of the First
Tranche on February 1, 2023, the Company also entered into, with the First Tranche Buyers, (i) a registration rights agreement (the
“First Tranche RRA”) pursuant to which the Company agreed to file
a registration statement registering the resale of the Conversion Shares withing 90 days of the Second Closing, and to cause any
such registration statement to become effective within 120 days after filing, and (ii) a lockup agreement (the “First
Tranche Lockup Agreement”) pursuant to which the First Tranche Buyers agreed to not offer, sell, contract to sell,
hypothecate, pledge or otherwise dispose of, directly or indirectly, any Conversion Shares. Each First Tranche Lockup Agreement
provides that the resale of the Conversion Shares is subject to a lock-up period that shall be the earlier of (i) 18 months and (ii)
such date as YA II PN, Ltd. notifies the Company it has completely sold all shares of the Company’s Class A common stock under
its self-liquidating convertible debenture issued pursuant to the securities purchase agreement, dated as of November 30, 2022, by
and between the Company and YA II PN, Ltd.
In connection with the closing of the second
tranche of the Second Closing (the “Second Tranche”), the Company
and Guardians of New Zealand Superannuation (the “Second Tranche
Buyer”) entered into a securities purchase agreement (the “Second
Tranche SPA”), pursuant to which the Second Tranche Buyer purchased from the Company Convertible Debentures in an
aggregate amount of $4,500,000.00, net of an original issuance discount of $643,500.00, for a total principal amount of
$5,143,500.00 in Convertible Debentures (the “Second Tranche Convertible
Debentures,” and, together with the First Tranche Convertible Debentures, the “Second
Closing Convertible Debentures”). The Second Tranche Convertible Debentures mature on August 1, 2024, 18 months
after issuance. The Second Tranche Convertible Debentures are convertible into shares of the Company’s Class A common stock at
an initial conversion price equal to the lower of 110% of: (i) the average closing price of the Company’s Class A common stock
for the five (5) trading days immediately preceding the date of the respective closing or (ii) the closing price of the
Company’s Class A common stock immediately preceding the date of the respective closing, subject to adjustments as further
specified in the Second Tranche Convertible Debentures. The Second Tranche Convertible Debentures will be fully repayable in cash
upon maturity.
In connection with closing of the Second
Tranche on February 1, 2023, the Company also entered into, with the Second Tranche Buyer, (i) a registration rights agreement (the
“Second Tranche RRA”) pursuant to which the Company agreed to
file a registration statement registering the resale of the Conversion Shares withing 90 days of the Second Closing, and to cause
any such registration statement to become effective within 120 days after filing, and (ii) a lockup agreement (the “Second
Tranche Lockup Agreement”) pursuant to which the Second Tranche Buyer agreed to not offer, sell, contract to sell,
hypothecate, pledge or otherwise dispose of, directly or indirectly, any Conversion Shares. The Second Tranche Lockup Agreement
provides that the resale of the Conversion Shares is subject to a lock-up period that shall be the earlier of (i) 18 months and (ii)
such date as YA II PN, Ltd. notifies the Company it has completely sold all shares of the Company’s Class A common stock under
its self-liquidating convertible debenture issued pursuant to the securities purchase agreement, dated as of November 30, 2022, by
and between the Company and YA II PN, Ltd.
The Second Closing Convertible Debentures and
related agreements have substantially similar terms as the Convertible Debentures and related agreements issued at the First Closing.
The offer and sale of
the Second Closing Convertible Debentures and Conversion Shares have not been registered under the Securities Act of 1933, as amended
(the “Securities Act”), or applicable state securities laws, and accordingly may not be offered or sold in the
United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of
the Securities Act and such applicable state securities laws.
The above descriptions
of the terms of the First Tranche SPA, First Tranche Convertible Debentures, First Tranche RRA, First Tranche Lockup Agreement, Second
Tranche SPA, Second Tranche Convertible Debentures, Second Tranche RRA and Second Tranche Lockup Agreement do not purport to be complete
and are qualified in their entirety by reference to the full text of such agreements and instruments, forms of which are attached to this
Current Report on Form 8-K as Exhibit 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, and 10.8, respectively, and are incorporated by reference
herein.
