0001596961
false
0001596961
2023-08-08
2023-08-08
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d)
of
the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): August 8, 2023
RumbleOn, Inc.
(Exact
Name of Registrant as Specified in its Charter)
Nevada |
|
001-38248 |
|
46-3951329 |
(State
or Other Jurisdiction
of Incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification No.) |
901 W Walnut Hill Lane
Irving, Texas 75038 |
|
75038 |
(Address
of Principal Executive Offices) |
|
(Zip
Code) |
(214)
771-9952
(Registrant’s
telephone number, including area code)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
| ☐ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of Each Class |
|
Trading
Symbol |
|
Name
of Exchange on Which Registered |
Class B Common Stock, $0.001 par value |
|
RMBL |
|
The
Nasdaq Stock Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement.
Standby
Purchase Agreement
On
August 8, 2023 (the “Effective Date”), RumbleOn, Inc., a Nevada corporation (the “Company” or “RumbleOn”),
entered into a Standby Purchase Agreement (the “Purchase Agreement”) with Mark Tkach (“Tkach”), William Coulter
(“Coulter”) and Stone House Capital Management, LLC, a Delaware limited liability company (“Stone House” and,
collectively with Tkach and Coulter, the “Standby Purchasers”). The Purchase Agreement provides that, among other things:
| ● | The Company proposes to
conduct a rights offering (the “Rights Offering”) in which it will distribute, at no charge, to each holder of record of
its outstanding shares of Class A common stock, par value $0.001 per share, Class B common stock, par value $0.001 per share (the
“Class B common stock”), and certain outstanding warrants to purchase shares of Class B common stock (collectively, the
“Eligible Securityholders”) non-transferable rights (the “Subscription Rights”) to subscribe for and
purchase shares of Class B common stock. The aggregate subscription price of all shares of Class B common stock to be offered
in the Rights Offering is approximately $100.0 million. The Company has not yet determined the per share purchase price
(the “Subscription Price”) payable for shares of Class B common stock to be issued upon the exercise of the Subscription
Rights. The Purchase Agreement provides that the Subscription Price will be set at a level which, in the good faith
discretion of a special committee of the Board of Directors of the Company, reflects a sufficient discount from recent trading
prices of the Class B common stock to achieve broad based participation by shareholders of the Company in the Rights Offering; provided,
however, that the Subscription Price shall not be higher than $6.15 per share of Class B common stock. The Company
has not yet set a record date for the Rights Offering or determined the duration of the subscription period during which
Subscription Rights will be exercisable. The Company will not commence the Rights Offering until it has filed a
registration statement covering the shares of Class B common stock issuable upon exercise of the Subscription Rights with the
Securities and Exchange Commission and such registration statement has been declared effective. |
| ● | Within two business days
after the closing of the Rights Offering, the Standby Purchasers will purchase from the Company in a private placement (the
“Backstop Private Placement”) any shares of Class B common stock included in the Rights Offering that were not
subscribed for and purchased by Eligible Securityholders (collectively, the “Backstop Securities”) for the same per
share Subscription Price payable by Eligible Securityholders electing to exercise their Subscription Rights in the Rights
Offering. The Purchase Agreement allocates the obligation to purchase unsubscribed shares among the Standby
Purchasers as follows: (i) Tkach: 25%; (ii) Coulter: 25%; and (iii) Stone House: 50%. The Standby Purchasers are
not entitled to receive a fee for the commitment made by them under the Purchase Agreement. They are, however, entitled
to receive reimbursement of reasonable expenses related to the Purchase Agreement and the Rights Offering. |
The
Purchase Agreement contains customary representations from the Company, on the one hand, and the Standby Purchasers, severally and not
jointly, on the other hand. It also contains customary covenants on the part of the parties, including, but not limited to, covenants
relating to the filing and effectiveness of the registration statement relating to the Rights Offering, the listing of the Class B common
stock sold to the Standby Purchasers on Nasdaq, public announcements, and indemnification. Under the Purchase Agreement, the Standby
Purchasers acknowledged that any shares of Class B common stock sold to them have not been registered under the Securities Act of 1933,
as amended (the “Securities Act”), and may not be sold absent registration or an available exemption. The Purchase Agreement
does not provide any registration rights to the Standby Purchasers in respect of any Backstop Securities that may be sold to them.
Pursuant
to the terms of the Purchase Agreement, the Backstop Private Placement is expected to close no later than two business days after the
closing of the Rights Offering. Completion of the Backstop Private Placement is subject to customary closing conditions, including completion
of the Rights Offering and the accuracy as of the closing of the representations and warranties made by each party. The Purchase Agreement
contains customary termination rights for each of the Company and the Standby Purchasers, including provisions contemplating that it
may be terminated (i) by mutual written consent of such parties; (ii) by either such party upon the other party’s uncured material
breach of any obligation under the Purchase Agreement; (iii) by the Company, if it determines not to proceed with the Rights Offering
or (iv) by the Standby Purchasers, if the proposed Rights Offering has not been consummated by December 1, 2023.
Subject
to the terms and conditions of the Purchase Agreement, the Company has also agreed to provide Stone House with the right to designate
one nominee to the Board of Directors of the Company not later than 60 days after the date of the Purchase Agreement.
The
foregoing description of the Purchase Agreement is qualified in its entirety by reference to the full text of the document, a copy of
which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Item
3.02 Unregistered Sales of Equity Securities.
The
information set forth in Item 1.01 above with regard to the Backstop Private Placement is incorporated herein by reference.
The
Company expects the issuance of the Backstop Securities to be made in reliance on the exemption from registration provided by Section
4(a)(2) of the Securities Act for a transaction by an issuer not involving any public offering. Each of the Standby Purchasers has represented
that it is an “accredited investor” and that it is acquiring the Backstop Securities for investment only and not with a view
to, or for resale in connection with, any distribution thereof not in compliance with applicable securities laws.
The
Company does not expect to pay or give, directly or indirectly, any commission or other remuneration, including underwriting discounts
and commissions, in connection with the issuance of the Backstop Securities.
Item
8.01 Other Events.
The
Company issued a press release announcing the proposed Rights Offering and entry into the Purchase Agreement in connection with the Backstop
Private Placement. A copy of the press release is attached as Exhibit 99.1 hereto and is incorporated herein by reference.
Forward-Looking
Statements
This
Current Report on Form 8-K contains statements that constitute “forward-looking statements” within the meaning of The Private
Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, those regarding the Company’s
plans to launch the Rights Offering, the transactions contemplated by the Purchase Agreement, the anticipated final terms, timing and
completion of the proposed Rights Offering and proposed Backstop Private Placement, the use of proceeds from the proposed Rights Offering
and proposed Backstop Private Placement and other matters. Forward-looking statements generally can be identified by words such as “anticipates,”
“believes,” “continues,” “could,” “estimates,” “expects,” “intends,”
“hopes,” “may,” “plan,” “possible,” “potential,” “predicts,”
“projects,” “should,” “targets,” “would” and similar expressions, although not all forward-looking
statements contain these identifying words. Such statements are subject to numerous important factors, risks and uncertainties that may
cause actual events or results to differ materially from current expectations and beliefs, including, but not limited to, risks and uncertainties
related to: whether the proposed transactions will be completed in a timely manner, or at all; the risk that all of the closing conditions
under the Purchase Agreement will not be satisfied; the occurrence of any event, change or other circumstance that could cause the Company
not to proceed with the Rights Offering or give rise to the termination of the Purchase Agreement; the determination of the final terms
of the proposed Rights Offering and proposed Backstop Private Placement; market and other conditions; the satisfaction of customary closing
conditions related to the proposed Rights Offering; risks related to the diversion of management’s attention from RumbleOn’s
ongoing business operations; the impact of general economic, industry or political conditions in the United States or internationally,
as well as the other risk factors set forth under the caption “Risk Factors” in RumbleOn’s Quarterly Report on Form
10-Q for the quarter ended March 31, 2023, RumbleOn’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 and in
any other subsequent filings made with the SEC by RumbleOn. There can be no assurance that RumbleOn will be able to complete the proposed
Rights Offering and proposed Backstop Private Placement on the anticipated terms, or at all. Any forward-looking statements contained
in this Current Report on Form 8-K speak only as of the date hereof, and RumbleOn specifically disclaims any obligation to update any
forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
RUMBLEON,
INC. |
|
|
|
Date:
August 11, 2023 |
By: |
/s/
Blake Lawson |
|
|
Blake
Lawson |
|
|
Chief
Financial Officer |
Exhibit 10.1
STANDBY PURCHASE AGREEMENT
This STANDBY PURCHASE AGREEMENT
(this “Agreement”) is made and entered into on August 8, 2023, by and among Mark Tkach (“Tkach”),
William Coulter (“Coulter”) and Stone House Capital Management, LLC, a Delaware limited liability company (“Stone
House” and, collectively with Tkach and Coulter, the “Standby Purchasers”), and RumbleOn, Inc., a Nevada
corporation (the “Company”).
RECITALS
WHEREAS, the Company proposes to
distribute, at no charge, to each holder of record of the Class A Common Stock, par value $0.001 per share (the “Class A Common
Stock”), of the Company and the Class B Common Stock, par value $0.001 per share (the “Class B Common Stock”),
of the Company as of a record date to be determined by the Board of Directors of the Company (the “Record Date”) (and
certain holders of warrants issued by the Company entitled to receive the same) non-transferable rights (the “Subscription Rights”)
to subscribe for and purchase shares of Class B Common Stock (the “Rights Offering”);
WHEREAS, the Company desires to
raise cash proceeds in the aggregate amount of approximately $100,000,000 in connection with the Rights Offering;
WHEREAS, in connection with the
Rights Offering, holders of the Company’s Class A Common Stock and Class B Common Stock of record as of the Record Date (and certain
holders of warrants issued by the Company entitled to receive the same) will receive one Subscription Right for each share of Class A
Common Stock and Class B Common Stock held by them as of the Record Date;
WHEREAS, each Subscription Right
will entitle the holder thereof to purchase the Share Purchase Number (as defined below) of shares of Class B Common Stock (the “Subscription
Privilege”) at the Subscription Price (as defined below);
WHEREAS, at least ten days prior
to the Record Date for the Rights Offering, the Board of Directors of the Company shall determine (i) the subscription price for the Subscription
Rights (the “Subscription Price”), which price shall be set at a level which, in the good faith discretion of a special
committee of the Board of Directors of the Company reflects as of the date of determination a sufficient discount from recent trading
prices of the Class B Common Stock to achieve broad based participation on the part of shareholders of the Company in the Rights Offering;
provided, however, that the Subscription Price shall not be higher than $6.15 per share of Class B Common Stock, and (ii) the number
of shares that the holder of a Subscription Right is entitled to purchase in respect of such Subscription Right (the “Share Purchase
Number”), which shall be set as nearly as possible to ensure that the total proceeds of the Rights Offering (assuming that all
Subscription Rights are exercised) will be equal to (but not exceed) $100,000,000; and
WHEREAS, in order to facilitate
the Rights Offering, the Company has offered to the Standby Purchasers the opportunity, and the Standby Purchasers have agreed and committed,
to purchase at the Subscription Price, upon the terms and subject to the conditions set forth this Agreement, any shares of Class B Common
Stock that are not purchased upon exercise of the Subscription Privilege in the Rights Offering (the “Unsubscribed Shares”
and such offering, the “Standby Offering”).
AGREEMENT
NOW THEREFORE, in consideration
of the foregoing, the terms and provisions set forth herein, the mutual benefits to be gained by the performance thereof and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section
1. Standby Purchase Commitment.
(a) Standby
Purchase Commitment. If and to the extent any Unsubscribed Shares are not purchased by holders of the Subscription Rights in connection
with the Rights Offering, each of the Standby Purchasers severally (and not jointly) agrees to purchase from the Company and pay for,
and the Company agrees to issue, deliver and sell to each such Standby Purchaser at the Subscription Price, a portion of the Unsubscribed
Shares equal to (or if the Company so elects, less than) the percentage set forth opposite the name of such Standby Purchaser in Annex
A hereto (the “Pro Rata Portion”). For the avoidance of doubt, in no event shall the Standby Purchasers be required
to purchase Unsubscribed Shares for more than $6.15 per share or for an aggregate purchase price in excess of the amount set forth opposite
such Standby Purchaser’s name on Annex A.
(b) Allocation
of Unsubscribed Shares. Promptly following the expiration of the Rights Offering, the Company shall determine the number of Unsubscribed
Shares. Upon the Company’s determination of the number of Unsubscribed Shares, which shall be deemed to be correct, absent manifest
error, the Company shall promptly notify each of the Standby Purchasers in writing of the number of shares of Class B Common Stock to
be purchased by such Standby Purchaser, which amount may be less than or equal to such Standby Purchaser’s Pro Rata Portion of the
Unsubscribed Shares (the “Allocated Shares”).
(c) Closing.
The closing of the purchase and sale of the Allocated Shares (the “Closing”) shall take place promptly following the
closing of the Rights Offering at the place, time and date to be determined by the Company, which date will be no later than two business
days after the closing of the Rights Offering (the “Closing Date”). At the Closing, the Company shall deliver or cause
to be delivered to each of the Standby Purchasers (or his designee) one or more certificates (or evidence of book-entry records) representing
the Allocated Shares to be issued to such Standby Purchaser (or his designee), and the Standby Purchaser shall deliver (or cause to be
delivered) to the Company, in cash or other immediately available funds, the aggregate Subscription Price relating to such Allocated Shares.
(d) Withdrawal
and Termination. At any time prior to the Closing Date, the Company may in its sole discretion withdraw or terminate the Rights Offering.
In the event that the Company withdraws or terminates the Rights Offering, each of the Standby Purchaser’s rights and obligations
under this Agreement shall terminate and the Company shall promptly return any payment previously made by such Standby Purchaser, without
interest or other income.
(e) Expense
Reimbursement. In consideration for each Standby Purchaser’s commitment to purchase his or its Allocated Shares upon the terms
set forth herein, the Company shall promptly reimburse or pay, as the case may be, on the Closing Date, or if this Agreement is terminated
prior to the Closing Date, within two (2) business days following such Standby Purchaser’s written request for reimbursement (accompanied
by reasonable supporting documentation), the reasonable out-of-pocket costs and expenses incurred by such Standby Purchaser in connection
with the negotiation, execution and delivery of this Agreement and the transactions contemplated hereby, including reasonable and documented
fees and disbursements of counsel to each Standby Purchaser.
Section 2. Certain Agreements
of the Standby Purchasers. Each of the Standby Purchasers agrees with the Company that, until such
time as the shares of Class B Common Stock to be issued pursuant to this Agreement are (as determined by the Company) no longer subject
to restrictions on transfer under the applicable laws referred to in the legend below, the certificates or book-entry notations with
respect to such shares shall bear a legend (and the Company’s share register shall bear a notation) substantially to the following
effect (it being understood that the Company will, or will direct the transfer agent for the Class B Common Stock to, remove the legend
on the certificates at such time as they are no longer subject to such restrictions):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933 OR ANY OTHER SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED, DELIVERED OR OTHERWISE TRANSFERRED
UNLESS REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO COMPLY WITH ALL SUCH RESTRICTIONS ON TRANSFER.
Section 3. Representations
and Warranties of each Standby Purchaser. Each of the Standby Purchasers severally represents and
warrants to the Company as follows:
(a) Formation.
In the case of Stone House, it has been duly formed and is validly existing as a limited liability company in good standing under
the laws of Delaware and has all requisite limited liability company power and authority to carry out the transactions contemplated by
this Agreement.
(b) Power and Capacity.
Such Standby Purchaser has full legal right and requisite power and capacity to enter into this Agreement and to exercise its rights and
to perform its obligations hereunder.
(c) Authorization of
Agreement; Enforceability. This Agreement has been (i) in the case of Stone House, duly authorized by all necessary limited liability
company action on the part of Stone House, and (ii) in the case of each Standby Purchaser, duly and validly executed and delivered by
such Standby Purchaser. This Agreement is valid, binding and enforceable against such Standby Purchaser in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting
creditors’ rights and to general equity principles.
(d) No Registration.
Such Standby Purchaser understands that the shares of Class B Common Stock to be issued pursuant to this Agreement have not been registered
under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of such Standby Purchaser’s representations as expressed herein or otherwise made pursuant hereto.
(e) Accredited Investor.
Such Standby Purchaser is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D promulgated under
the Securities Act.
(f) Information; Knowledge
of Business. Such Standby Purchaser is familiar with the business in which the Company is engaged. Such Standby Purchaser (i) has
knowledge and experience in financial and business matters, (ii) is familiar with the investments of the type that he or it is undertaking
to purchase, (iii) is fully aware of the risks and uncertainties involved in making an investment of this type and (iv) is capable of
evaluating the merits and risks of this investment. Such Standby Purchaser acknowledges that, prior to executing this Agreement, such
Standby Purchaser has had the opportunity to ask questions of and receive answers or obtain additional information from a representative
of the Company concerning the financial and other affairs of the Company.
(g) Availability of
Funds. Such Standby Purchaser has available sufficient funds to pay the Subscription Price for his or its Allocated Shares. For the
avoidance of doubt, the total number of Unsubscribed Shares may include all Class B Common Stock issuable in connection with the Rights
Offering.
(h) Investment Intent.
Such Standby Purchaser is acquiring his or its shares of Class B Common Stock for his or its own account with the intention of holding
such shares for investment and not with the view to, or for resale in connection with, any distribution thereof not in compliance with
applicable securities laws, and such Standby Purchaser has no present intention of participating, directly or indirectly, in any sale,
transfer or other distribution of the shares, except in compliance with applicable securities laws; provided, however, that this
representation and warranty does not limit such Standby Purchaser’s right to sell the shares of Class B Common Stock in compliance
with applicable federal and state securities laws.
(i) Securities Laws
Compliance. The shares of Class B Common Stock offered by this Agreement will not be offered for sale, sold, or otherwise transferred
by such Standby Purchaser except pursuant to a registration statement or in a transaction exempt from, or not subject to, registration
under the Securities Act and any applicable state securities laws.
(j) No
Manipulation or Stabilization of Price. Such Standby Purchaser has not taken and such Standby Purchaser will not take, directly or
indirectly, any action designed to or that would constitute, under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or otherwise, stabilization or manipulation of the price of any security of the Company in order to facilitate the sale
or resale of any securities of the Company, and such Standby Purchaser is not aware of any such action taken or to be taken by any person.
Section 4. Representations
and Warranties of the Company. The Company represents and warrants to each of the Standby Purchasers
as follows:
(a) Existence
and Good Standing; Authority. The Company is a corporation validly existing and in good standing under the laws of the State of Nevada
and has all requisite corporate power and authority to carry on its business as now conducted and to execute and deliver this Agreement
and to consummate the transactions contemplated hereby.
(b) Authorization
of Agreement; Enforceability. This Agreement has been duly authorized by all necessary corporate action on the part of the Company
and has been duly and validly executed and delivered by the Company. This Agreement is valid, binding and enforceable against the Company
in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors’ rights and to general equity principles.
(c) Due
Authorization and Issuance of Shares. All of the shares of Class B Common Stock to be issued pursuant to this Agreement will have
been duly authorized for issuance prior to the Closing, and, when issued and distributed in accordance with the terms of this Agreement
will be validly issued, fully paid and non-assessable; and none of such shares of Class B Common Stock will have been issued in violation
of the preemptive rights of any security holders of the Company arising as a matter of law or under or pursuant to the Company’s
Articles of Incorporation, as amended, the Company’s Amended and Restated Bylaws, as amended, or any material agreement or instrument
to which the Company is a party or by which it is bound.
(a) No
Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation of the transactions contemplated
hereby will not (i) conflict with, or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge
or encumbrance upon any of the assets of the Company pursuant to the terms of any agreement, indenture or instrument to which the Company
is a party or any order, rule or regulation of any court or governmental agency having jurisdiction over the Company or any of its property,
which such breach, default, lien, charge or encumbrance could reasonably be expected to have a Material Adverse Effect (as defined below),
or (ii) result in a violation of the Company’s Articles of Incorporation, as amended, or the Company’s Amended and Restated
Bylaws, as amended. Except as required by the Securities Act, the Exchange Act, and applicable state securities laws, no consent, authorization
or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance
of this Agreement by the Company.
(b) SEC Compliance. 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, for the 12 months preceding the date hereof (or such shorter
period as the Company was required by law or regulation to file such material) with the Securities and Exchange Commission (the “Commission”)
(the foregoing materials, including the exhibits thereto, 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 Company has never been an issuer subject to Rule 144(i) under the Securities
Act.
(c) Material Adverse Change.
Since June 30, 2023, except as disclosed in the SEC Reports, there has been no event, occurrence or development that has had or that could
reasonably be expected to have (i) a material adverse effect on the business, assets, results of operations or financial condition of
the Company and its subsidiaries, taken as a whole, or (ii) a material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under this Agreement (any of (i) or (ii), a “Material Adverse Effect”).
(d) No Violation of Corporate
Documents. The Company is not in violation of its Articles of Incorporation, as amended, or its Amended and Restated Bylaws, as amended,
or in default under any agreement, indenture or instrument to which the Company is a party, the effect of which violation or default has
had or would reasonably be expected to have a Material Adverse Effect.
(e) Litigation.
Except as disclosed in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or,
to the knowledge of the Company, threatened against the Company, any subsidiary of the Company or any of their respective properties before
or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
that has had or would reasonably be expected to have a Material Adverse Effect.
(f) Oaktree Credit Amendment.
As of the date hereof, the Company, Oaktree Fund Administration, LLC and the lenders party thereto have executed an amendment to the
Term Loan Credit Agreement (the “Oaktree Credit Agreement”) among the Company, as borrower, the lenders party thereto,
and Oaktree Fund Administration, LLC, as administrative agent and collateral agent. A copy of such amendment has been provided to the
Standby Purchasers. After giving effect to such amendment, no event of default has occurred and is continuing under the Oaktree Credit
Agreement.
(g) Acknowledgment Regarding
Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Standby Purchasers is acting solely
in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated thereby. The Company
further acknowledges that Stone House is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement and the transactions contemplated hereby and any advice given by Stone House or any of its representatives or
agents in connection with this Agreement and the transactions contemplated thereby is merely incidental to their purchase of the Allocated
Shares.
(h) Disclosure. From and
after the time of the filing of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, the Company
represents to the Standby Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the
Standby Purchasers by the Company or any of its subsidiaries, or any of their respective officers, directors, employees, affiliates or
agents in connection with the transactions contemplated by this Agreement; provided, however, that no representation is made under
this provision as to any Standby Purchaser that is an officer or director of the Company.
Section 5. Conditions
to Closing.
(a) Conditions
to the Obligations of the Parties. The obligations of the Company and each of the Standby Purchasers to consummate the transactions
contemplated hereunder in connection with the Standby Offering are subject to the fulfillment, prior to or on the Closing Date, of the
following conditions:
(i) the
Rights Offering shall have been consummated in accordance with the terms and conditions described on Annex B hereto and in the
prospectus to be filed by the Company with the Commission in connection with the Rights Offering (the “Prospectus”);
(ii) no
judgment, injunction, decree, regulatory proceeding or other legal restraint shall prohibit, or have the effect of rendering illegal,
the consummation of the Standby Offering or the transactions contemplated by this Agreement; and
(iii) from the date
hereof to the Closing Date, trading in the Class B Common Stock shall not have been suspended by the Commission or the NASDAQ Stock Market
(“NASDAQ”).
(b) Conditions
to Company’s Obligations. The obligations of the Company to consummate the transactions contemplated hereunder in connection
with the Standby Offering are subject to the fulfillment, prior to or on the Closing Date, of the following conditions:
(i) the
representations and warranties of each of the Standby Purchasers in Section 3 shall be true and correct in all material respects as of
the date hereof and as of the Closing Date as if made as of such date; and
(ii) each
of the Standby Purchasers shall have performed and complied in all material respects with his or its covenants and obligations hereunder.
(c) Conditions
to the Obligations of Each Standby Purchaser. The obligations of each of the Standby Purchasers to consummate the transactions contemplated
hereunder in connection with the Standby Offering are subject to the fulfillment, prior to or on the Closing Date, of the following conditions:
(i) the
representations and warranties of the Company in Section 4 shall be true and correct in all material respects (or, to the extent such
representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) as of the date hereof and as of
the Closing Date as if made as of such date (unless such representations and warranties are made as of a specific date, in which case
they shall be accurate in all material respects (or, to the extent such representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) as of such date); and
(ii) the
Company shall have performed and complied in all material respects with its covenants and obligations hereunder.
Section 6. Survival.
The representations and warranties of the parties contained in this Agreement shall survive the Closing hereunder. Section 9 shall survive
any termination of this Agreement for any reason.
Section 7. Covenants.
(a) SEC
Filings. The Company shall file the Registration Statement relating to the Rights Offering (the “Registration Statement”)
with the Commission as promptly as reasonably practicable after the date hereof and shall use best efforts to cause the Registration Statement
to become effective. In addition, as soon as reasonably practicable after the Company is advised or obtains knowledge thereof, the Company
shall advise each of the Standby Purchasers of (i) the time when any amendment or supplement to the Prospectus has been filed, (ii) the
issuance by the Commission of any stop order, or of the initiation or threatening of any proceeding, suspending the effectiveness of the
Registration Statement or any amendment thereto or any order preventing or suspending the use of any preliminary prospectus or the Prospectus
or any amendment or supplement thereto, (iii) the issuance by any state securities commission of any notice of any proceedings for the
suspension of the qualification of the shares of Class B Common Stock for offering or sale in any jurisdiction or of the initiation, or
the threatening, of any proceeding for such purpose, (iv) the receipt of any comments from the Commission directed toward the Registration
Statement or any document incorporated therein by reference, and (v) any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for additional information. The Company shall use its commercially reasonable
efforts to prevent the issuance of any such order or the imposition of any such suspension and, if any such order is issued or suspension
is imposed, to obtain the withdrawal thereof as promptly as possible.
(b) Information
About Standby Purchasers. Each of the Standby Purchasers agrees to furnish to the Company all information with respect to such Standby
Purchaser that may be necessary or appropriate and will ensure that any information furnished to the Company for the Prospectus by such
Standby Purchaser does not contain any untrue statement of material fact or omit to state a material fact required to be stated in the
Prospectus or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(c) Public
Announcements. Neither the Company nor any Standby Purchasers shall issue any public announcement, statement or other disclosure with
respect to this Agreement or the transactions contemplated hereby without the prior consent of the other party or parties hereto, which
consent shall not be unreasonably withheld or delayed, except if such public announcement, statement or other disclosure is required by
applicable law or applicable stock market regulations, in which case the disclosing party shall consult in advance with respect to such
disclosure with the other parties to the extent reasonably practicable.
(d) NASDAQ
Listing. The Company shall cause the shares of Class B Common Stock issued to each of the Standby Purchasers hereunder to be listed
on NASDAQ once such shares are (as determined by the Company) no longer subject to restrictions on transfer under the applicable laws
referred to in the legend set forth in Section 2.
(e) Indemnification.
(i) From
and after the execution of this Agreement, the Company shall indemnify and hold harmless each Standby Purchaser and its affiliates, equity
holders, members, partners, general partners, managers, and its and their respective representatives and controlling persons (each, an
“Indemnified Person”) from and against any and all losses, claims, damages, liabilities and costs and expenses arising
out of a claim asserted by a third party (collectively, “Losses”) that any such Indemnified Person may incur or to
which any such Indemnified Person may become subject arising out of or in connection with this Agreement, including the Rights Offering,
the use of the proceeds of the Rights Offering, or any claim, challenge, litigation, investigation or proceeding relating to any of the
foregoing, regardless of whether any Indemnified Person is a party thereto, whether or not such proceedings are brought by the Company,
affiliates of the Company, the Company’s creditors, the Company’s stockholders or any other person, and reimburse each Indemnified
Person upon demand for reasonable documented legal or other third-party expenses incurred in connection with investigating, preparing
to defend or defending, or providing evidence in or preparing to serve or serving as a witness with respect to, any lawsuit, investigation,
claim or other proceeding relating to any of the foregoing, irrespective of whether or not the Rights Offering or the transactions contemplated
by this Agreement are consummated or whether or not this Agreement is terminated; provided, however, that the foregoing indemnification
will not apply to Losses to the extent that they resulted from (a) any breach by such Indemnified Person of this Agreement, or (b) statements
or omissions in the Registration Statement or the Prospectus made in reliance upon or in conformity with information relating to such
Indemnified Person furnished to the Company in writing by or on behalf of such Indemnified Person expressly for use in the Registration
Statement or the Prospectus.
(ii) Promptly
after receipt by an Indemnified Person of notice of the commencement of any claim, challenge, litigation, investigation or proceeding
(an “Indemnified Claim”), such Indemnified Person will, if a claim is to be made hereunder against the Company in respect
thereof, notify the Company in writing of the commencement thereof; provided, that (a) the omission to so notify the Company will
not relieve the Company from any liability that it may have hereunder except to the extent it has been materially prejudiced by such failure
and (b) the omission to so notify the Company will not relieve the Company from any liability that it may have to such Indemnified Person
otherwise than on account of this Section 7(e). In case any such Indemnified Claims are brought against any Indemnified Person and it
notifies the Company of the commencement thereof, the Company will be entitled to participate therein, and, at its election by providing
written notice to such Indemnified Person, the Company will be entitled to assume the defense thereof, with counsel reasonably acceptable
to such Indemnified Person; provided, that if the parties (including any impleaded parties) to any such Indemnified Claims include
both such Indemnified Person and the Company and based on advice of such Indemnified Person’s counsel there are legal defenses available
to such Indemnified Person that are different from or additional to those available to the Company, such Indemnified Person shall have
the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such Indemnified Claims.
Upon receipt of notice from the Company to such Indemnified Person of its election to so assume the defense of such Indemnified Claims
with counsel reasonably acceptable to the Indemnified Person, the Company shall not be liable to such Indemnified Person for expenses
incurred by such Indemnified Person in connection with the defense thereof or participation therein (other than reasonable costs of investigation)
unless (1) such Indemnified Person shall have employed separate counsel (in addition to any local counsel) in connection with the assertion
of legal defenses in accordance with the proviso to the immediately preceding sentence (it being understood, however, that the Company
shall not be liable for the expenses of more than one separate counsel representing the Indemnified Persons who are parties to such Indemnified
Claims (in addition to one local counsel in each jurisdiction in which local counsel is required)), (2) the Company shall not have employed
counsel reasonably acceptable to such Indemnified Person to represent such Indemnified Person within a reasonable time after the Company
has received notice of commencement of the Indemnified Claims from, or delivered on behalf of, the Indemnified Person, (3) after the Company
assumes the defense of the Indemnified Claims, the Indemnified Person determines in good faith that the Company has failed or is failing
to defend such claim and provides written notice of such determination and the basis for such determination, and such failure is not reasonably
cured within ten (10) business days of receipt of such notice, or (4) the Company shall have authorized in writing the employment of counsel
for such Indemnified Person.
(iii) In
connection with any Indemnified Claim for which an Indemnified Person is assuming the defense in accordance with this Section 7(e), the
Company shall not be liable for any settlement of any Indemnified Claims effected by such Indemnified Person without the written consent
of the Company (which consent shall not be unreasonably withheld, conditioned or delayed). If any settlement of any Indemnified Claims
is consummated with the written consent of the Company or if there is a final judgment for the plaintiff in any such Indemnified Claims,
the Company agrees to indemnify and hold harmless each Indemnified Person from and against any and all Losses by reason of such settlement
or judgment to the extent such Losses are otherwise subject to indemnification by the Company hereunder in accordance with, and subject
to the limitations of, this Section 7(e). The Company shall not, without the prior written consent of an Indemnified Person (which consent
shall be granted or withheld, conditioned or delayed in the Indemnified Person’s sole discretion), effect any settlement of any
pending or threatened Indemnified Claims in respect of which indemnity or contribution has been sought hereunder by such Indemnified Person
unless (a) such settlement includes an unconditional release of such Indemnified Person in form and substance satisfactory to such Indemnified
Person from all liability on the claims that are the subject matter of such Indemnified Claims and (b) such settlement does not include
any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(iv) If
for any reason the foregoing indemnification is unavailable to any Indemnified Person or insufficient to hold it harmless from Losses
that are subject to indemnification pursuant to Section 7(e)(i), then the Company shall contribute to the amount paid or payable by such
Indemnified Person as a result of such Losses in such proportion as is appropriate to reflect not only the relative benefits received
by the Company, on the one hand, and such Indemnified Person, on the other hand, but also the relative fault of the Company, on the one
hand, and such Indemnified Person, on the other hand, as well as any relevant equitable considerations. The Company also agrees that no
Indemnified Persons shall have any liability based on their comparative or contributory negligence or otherwise to the Company, any person
asserting claims on behalf of or in right of any of the Company, or any other person in connection with an Indemnified Claim.
Section 8. Termination.
(a) By
a Standby Purchaser. Each Standby Purchaser may terminate this Agreement (i) upon the occurrence of a suspension of trading in the
Class B Common Stock by NASDAQ, any suspension of payments with respect to banks in the United States or a declaration of war or national
emergency in the United States, (ii) if the Company materially breaches its obligations under this Agreement and such breach is not cured
within ten (10) business days following written notice to the Company or (iii) if the Rights Offering has not been consummated by December
1, 2023.
(b) By
the Company. The Company may terminate this Agreement (i) in the event the Company, in its reasonable judgment, determines that it
is not in the best interests of the Company and its stockholders to proceed with the Rights Offering, (ii) if consummation of the Rights
Offering and/or the Standby Offering is prohibited by applicable law, rules or regulations, or (iii) if a Standby Purchaser materially
breaches his obligations under this Agreement and such breach is not cured within ten (10) business days following written notice to such
Standby Purchaser.
(c) Mutual
Consent. This Agreement shall terminate if the parties agree in writing to the termination hereof.
(d) Effect
of Termination. The Company and each of the Standby Purchasers hereby agree that any termination of this Agreement pursuant to this
Section 8, shall be without liability to the Company or any Standby Purchaser, other than, in the case of a termination pursuant to Section
8(a)(ii) or 8(b)(ii), any liability resulting from a breach by a party of his or its obligations hereunder occurring prior to the date
of termination.
Section
9. Board Nominee Right. Immediately prior to the Appointment Date, the board
of directors of the Company (the “Board”) shall
have expanded its size, if necessary, to create a vacancy for one (1) qualified nominee to be designated by Stone House. Stone House shall
have, upon and following the date of this Agreement, the right to designate, subject to the terms and conditions of this Agreement, one
nominee to the Board (the “Board Nominee”) which may be an employee or affiliate of
Stone House. Stone House shall provide the Company written notice of the identify of a Board Nominee proposed to be nominated by Stone
House. The Board shall in good faith and promptly (but in any case not later than the Appointment Date) consider whether such Board Nominee
is qualified and suitable to serve as a member of the Board under all applicable corporate governance policies and guidelines of the Company
and the Board and applicable legal, regulatory and stock exchange requirements (collectively, the “Applicable Requirements”).
The Board and the appropriate committees of the Board shall in good faith consider the qualifications, suitability of the Board Nominee,
and make any determinations with respect thereto in a manner consistent with considerations and determinations in respect of other members
of the Board. Stone House shall cause the Board Nominee to make himself or herself reasonably available for interviews, to consent to
such reference and background checks or other investigations and to provide such information (including information necessary to determine
any disclosure obligations of the Company) as the Board or any committee thereof may reasonably request. If the Board determines that
the Board Nominee meets the Applicable Requirements, then Stone House shall nominate, and the Board shall appoint such initial Board Nominee
to the Board by not later than the sixty (60) days after the date of this Agreement (the date of each such appointment, an “Appointment
Date”). Provided that such Board Nominee then meets the Applicable Requirements, then so long as
Stone House (together with its affiliates) collectively beneficially own, as of the date of mailing of the Company’s proxy circular,
proxy statement (or consent solicitation or similar document) for its annual meeting of shareholders (or consent in lieu thereof), at
least 10% of the Class B Common Stock, as determined in accordance with Rule 13d-3 of the Exchange Act (the “Nomination Condition”),
the Company shall nominate the Board Nominee for re-election as a director by the shareholders of the Company at the end of each term
of such Board Nominee as part of the slate proposed by the Company that is included in the proxy circular, proxy statement (or consent
solicitation or similar document) of the Company relating to the election of the Board. In the event that the Board determines that the
Board Nominee does not meet the Applicable Requirements, or if such Board Nominee ceases to be a member of the Board at any time and for
any reason, so long as the Nomination Condition has been satisfied at such time, Stone House may select another person as a designee as
its Board Nominee and, if the Board determines that such nominee meets the criteria set forth above (including the Applicable Requirements),
such designee shall become the Board Nominee and shall be promptly appointed by, or nominated for election by shareholders to, as applicable,
the Board. The Board shall undertake any review of any such new Board Nominee in accordance with this paragraph and shall complete such
review within a reasonable time following receipt by the Company of the identity of the Board Nominee, provided that
during the pendency of such review, such Board Nominee shall promptly provide the Board with such information, and shall make himself
or herself available to the Board, as the Board in its sole discretion, acting reasonably, deems necessary to complete its review of such
Board Nominee. Notwithstanding anything else contained in this Agreement to the contrary, if at any time following the Closing, the Board
Nominee is not a member of the Board for any reason and a new Board Nominee has not been appointed by Stone House, as long as at such
time the Nomination Condition has been satisfied and continues to be satisfied, Stone House shall be entitled to designate an observer
at meetings of the Board, and the Company shall provide all materials that are provided to other members of the Board in connection with
such meetings to such observer, unless such attendance or the provision of such materials would result in an actual conflict of interest
or violate any of the applicable corporate governance policies and guidelines or applicable legal, regulatory or stock exchange requirements
or would result in the loss of attorney-client privilege. It is understood that any such observer in its capacity as such (i) shall not
have any fiduciary duties to the Company, any of the Company’s affiliates, the Board or any shareholder of the Board or any other
person with respect to the business and affairs of the Company or any affiliate of the Company, whether existing at law or equity, but
(ii) shall be obligated to keep confidential any information provided to such observer in accordance with such reasonable terms as are
prescribed by the Board. The Board Nominee shall be subject to the policies and requirements of the Company and the Board, in a manner
consistent with the application of such policies and requirements to other members of the Board. The Company shall treat any Board Nominee
appointed or elected to the Board in the same manner as any other member of the Board as to (i) reimbursement of expenses incurred in
connection with Board service and (ii) indemnification and advance of expenses and coverage under director and officer insurance.
Section 10. Notices.
All notices, communications and deliveries required or permitted by this Agreement shall be made in writing signed by the party making
the same, shall specify the Section of this Agreement pursuant to which it is given or being made and shall be deemed given or made (a)
on the date delivered if delivered in person, (b) on the third (3rd) business day after it is mailed if mailed by registered or certified
mail (return receipt requested) (with postage and other fees prepaid) or (c) on the day after it is delivered, prepaid, to an overnight
express delivery service that confirms to the sender delivery on such day, as follows:
If to the Company:
RumbleOn, Inc.
901 W. Walnut Hill Lane
Irving, TX 75038
Attn: Chief Financial Officer
With a copy to:
Baker Botts L.L.P.
2001 Ross Avenue, Suite 900
Dallas, TX 75201
Attn: Geoffrey L. Newton
Sarah J. Dodson
If to the Standby Purchasers:
Mark Tkach
1188 East Camelback Road
Phoenix, AZ 85014
William Coulter
1188 East Camelback Road
Phoenix, AZ 85014
Stone House Capital Management, LLC
1019 Kane Concourse
Suite 202
Bay Harbor Islands, Florida 33154
with a copy to:
Haynes and Boone, LLP
30 Rockefeller Plaza, 26th Floor
New York, NY 10112
Attn: Rick A. Werner
Greg Kramer
Alla Digilova
or to such other representative or at such other address of a party
as such party hereto may furnish to the other parties in writing in accordance with this Section 10.
Section 11. Entire Agreement.
This Agreement constitutes the entire agreement and understanding among the Standby Purchasers and the Company, and supersedes all prior
agreements and understandings relating to the subject matter hereof.
Section 12. Governing Law;
Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the internal laws of the State
of Delaware. Each party acknowledges and agrees that any controversy that may arise under this Agreement is likely to involve complicated
and difficult issues, and therefore each such party hereby irrevocably and unconditionally waives any right such party may have to a
trial by jury in respect of any litigation directly or indirectly arising out of or relating to this agreement or the transactions contemplated
by this Agreement.
Section 13. Amendments.
This Agreement may be modified or amended only with the written consent of the Company and each of the Standby Purchasers.
Section 14. Severability.
If any provision of this Agreement shall be invalid under the applicable law of any jurisdiction, the remainder of this Agreement shall
not be affected thereby.
Section
15. Independent Nature of Standby Purchasers’ Obligations and Rights. The obligations of each Standby Purchaser under this Agreement and with respect to the Standby Offering
are several and not joint with the obligations of any other Standby Purchaser, and no Standby Purchaser shall be responsible in any way
for the performance of the obligations of any other Standby Purchaser under any this Agreement or with respect to the Standby Offering.
The decision of each Standby Purchaser to purchase shares of Class B Common Stock pursuant to this Agreement or in the Rights Offering
has been made by such Standby Purchaser independently of any other Standby Purchaser and independently of any information, materials,
statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial
or otherwise) or prospects of the Company which may have been made or given by any other Standby Purchaser or by any agent or employee
of any other Standby Purchaser, and no Standby Purchaser or any of its agents or employees shall have any liability to any other Standby
Purchaser (or any other person) relating to or arising from any such information, materials, statements or opinions. Nothing contained
in this Agreement, and no action taken by any Standby Purchaser pursuant thereto or with respect to the Rights Offering, shall be deemed
to constitute the Standby Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Standby Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated
by this Agreement or the Rights Offering. Each Standby Purchaser acknowledges that no other Standby Purchaser has acted as agent for
such Standby Purchaser in connection with making its investment hereunder and that no other Standby Purchaser will be acting as agent
of such Standby Purchaser in connection with monitoring its investment hereunder. Each Standby Purchaser shall be entitled to independently
protect and enforce its rights, including the rights arising out of this Agreement, and it shall not be necessary for any other Standby
Purchaser to be joined as an additional party in any proceeding or action for such purpose.
Section 17. Miscellaneous.
(a) The recitals to this Agreement
are incorporated herein and made a part hereof. The parties agree that the recitals are an integral part of this Agreement.
(b) Notwithstanding any term to
the contrary herein, no person other than the Company or the Standby Purchasers shall be entitled to rely on and/or have the benefit of,
as a third party beneficiary or under any other theory, any of the representations, warranties, agreements, covenants or other provisions
of this Agreement.
(c) The headings in this Agreement
are for purposes of reference only and shall not limit or otherwise affect the meaning of this Agreement.
(d) This
Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which, when taken
together, shall constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by electronic
mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original
graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original
signature.
(e) The
Standby Purchasers shall not assign this Agreement or any of their respective rights or obligations hereunder without the Company’s
prior written consent, except that any Standby Purchaser may assign their rights and obligations hereunder to any affiliated investment
fund.
[Signature
Page Follows]
IN WITNESS WHEREOF, each of the
parties has executed this Agreement on and as of the date first set forth above.
|
COMPANY: |
|
|
|
|
RUMBLEON, INC. |
|
|
|
|
By: |
/s/ Blake Lawson |
|
Name: |
Blake Lawson |
|
Title: |
CFO |
|
|
|
|
STANDBY PURCHASERS: |
|
|
|
|
MARK TKACH |
|
|
|
|
By: |
/s/ Mark Tkach |
|
Name: |
Mark Tkach |
|
|
|
|
WILLIAM COULTER |
|
|
|
|
By: |
/s/ William Coulter |
|
Name: |
William Coulter |
|
|
|
|
STONE HOUSE CAPITAL MANAGEMENT, LLC |
|
|
|
|
By: |
/s/ Mark Cohen |
|
Name: |
Mark Cohen |
|
Title: |
Managing Member |
[Signature Page to Standby Purchase Agreement]
ANNEX A
PRO RATA PORTIONS
Standby Purchaser | |
Pro Rata Portion | | |
Maximum Purchase Price | |
Mark Tkach | |
| 25 | % | |
$ | 25,000,000 | |
William Coulter | |
| 25 | % | |
$ | 25,000,000 | |
Stone House Capital Management, LLC | |
| 50 | % | |
$ | 50,000,000 | |
ANNEX B
Terms of the Rights Offering
Issuer |
RumbleOn, Inc. |
|
|
Securities |
One Subscription Right to purchase the Share Purchase Number of shares of Class B Common Stock for each share of Class A Common Stock or Class B Common Stock outstanding (or in the case of certain warrants, treated as outstanding) as of the Record Date. |
|
|
Registration |
The shares of Class B Common Stock issuable upon the exercise of the Subscription Rights will be registered under the Securities Act pursuant to a registration statement on an appropriate form to be filed by the Company with the Commission. |
|
|
Listing |
The shares of Class B Common Stock to be issued upon the exercise of the Subscription Rights will be listed on NASDAQ. |
|
|
Transfer |
The Subscription Rights will not be transferable. |
|
|
Subscription Rights |
Each Subscription Right will entitle the holder to purchase the Share Purchase Number of shares of Class B Common Stock at the Subscription Price. The Subscription Price will be paid in cash. Holders of Subscription Rights will not receive fractional shares of Class B Common Stock upon exercise. Instead, the number of shares issuable will be rounded down to the nearest whole number. |
|
|
Over-Subscription Rights
|
If the holder of a Subscription Right fully exercises its Subscription Rights and other holders do not fully exercise their Subscription Rights, such holder will have an over-subscription right that entitles it to purchase, at the same Subscription Price, additional shares of Class B Common Stock that remain unsubscribed at the Expiration Date. Each holder who fully exercises its Subscription Right shall be entitled to indicate the number of additional shares of Class B Common Stock to be purchased by such holder pursuant to its over-subscription right. If an insufficient number of shares of Class B Common Stock are available to fully satisfy all over-subscription right requests (i.e., if the additional shares would otherwise exceed the total Share Purchase Numbers of all Subscription Rights issued in the Rights Offering), the available shares of Class B Common Stock issuable will be distributed proportionately among rights holders who exercise their over-subscription right, based on the number of shares each holder initially subscribed for under the subscription right. |
|
|
Subscription Price |
A price to be determined by a special committee of the Board of Directors of the Company. The price will be set at a level which, in the good faith discretion of the special committee reflects as of the date of determination a sufficient discount from recent trading prices of the Class B Common Stock to achieve broad based participation on the part of shareholders of the Company in the Rights Offering; provided, however, that the Subscription Price shall not be higher than $6.15 per share of Class B Common Stock. The aggregate Subscription Price for the offering shall in no event exceed $100,000,000. |
|
|
Record Date |
The Record Date for the Rights Offering will be set by the Board of Directors in accordance with the applicable requirements of the NASDAQ listing rules. |
|
|
Expiration Date |
The Rights Offering will expire at 5:00 p.m., Eastern Time, on a date set by the Board of Directors, which will be no more than 25 days after the commencement of the Rights Offering, subject to extension or earlier termination. |
Exhibit 99.1
RumbleOn Announces Planned $100 Million Fully
Backstopped Rights Offering
August 9, 2023
IRVING, Texas – RumbleOn, Inc. (NASDAQ: RMBL) (the “Company”
or “RumbleOn”), the nation’s first and largest publicly traded powersports platform, today announced that it plans
to make a $100 million rights offering to holders of the company’s Class A common stock and Class B common stock (and certain
holders of warrants issued by the Company entitled to receive the same).
Pursuant to the terms of the fully backstopped rights offering, the
Company intends to issue, for no consideration, subscription rights that will entitle eligible holders as of the applicable record date
to purchase their pro rata portion of $100 million of Class B common stock.
The Company has entered into a purchase agreement with certain existing
stockholders (the “Backstop Purchasers”) to backstop the $100 million rights offering in full. The purchase agreement commits
the Backstop Purchasers to purchase in a private placement (the “Backstop Private Placement”) any and all shares of Class
B common stock that remain unsubscribed for in the rights offering on the same terms as the proposed rights offering. Pursuant to the
terms of the purchase agreement, the Backstop Private Placement is expected to close shortly after the expiration of the rights offering
subscription period.
The Backstop Purchasers’ obligation to purchase the securities
pursuant to the purchase agreement and to fulfill their backstop commitment and the Company’s obligation to issue the securities
in the Backstop Private Placement are subject to certain customary closing conditions, including completion of the proposed rights offering.
The rights offering and the Backstop Private Placement are expected to close in the fourth quarter of 2023.
The Company plans to file a registration statement with the U.S. Securities
and Exchange Commission (the “SEC”) relating to the rights offering as promptly as reasonably practicable. The Company is
working on developing the terms of the rights offering and has not yet set the subscription ratio or subscription price. In addition,
no record date has been set. Additional information about the proposed rights offering will be provided in the registration statement,
once filed with the SEC.
The Company is planning to conduct the rights offering to enable it
to comply with a covenant in its recently amended credit agreement. It is expected that the net proceeds of the rights offering will be
used to repay debt under its amended credit facility with the remainder being available to fund the growth and development of its business,
including for possible acquisitions.
The securities to be offered in the proposed rights offering and proposed
Backstop Private Placement have not yet been registered under the Securities Act of 1933, as amended (the “Securities Act”).
The securities to be offered in the proposed rights offering may not be offered or sold nor may offers to buy be accepted prior to the
time the registration statement relating to the rights offering has been filed with the SEC and has become effective.
Other Important Information
The securities to be sold in the proposed rights offering and proposed
Backstop Private Placement have not been registered under the Securities Act or the securities laws of any state or other applicable jurisdiction,
and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements
of the Securities Act and applicable state or other jurisdictions’ securities laws.
This press release shall not constitute an offer to sell or the solicitation
of an offer to buy the securities to be issued in the proposed rights offering or proposed Backstop Private Placement, nor shall there
be any offer, solicitation or sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Any offering of the securities under the registration statement related to the rights offering will only be made by means of a prospectus.
About RumbleOn
RumbleOn is the nation’s first and largest publicly traded, technology-enhanced
dealership group platform in the powersports industry. Headquartered in the Dallas Metroplex, RumbleOn provides the only technology-led
platform in powersports with a broad footprint of physical locations, full-line manufacturer representation, and high-quality used inventory
to transform the entire customer experience.
Forward-Looking Statements
The Company’s press release contains statements that constitute
“forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking
statements include, but are not limited to, those regarding the Company’s plans to launch a rights offering, the transactions contemplated
by the purchase agreement, the anticipated final terms, timing and completion of the proposed rights offering and proposed Backstop Private
Placement, the use of proceeds from the proposed rights offering and proposed Backstop Private Placement, and the Company’s plans,
strategies, and prospects for its business. Forward-looking statements generally can be identified by words such as “anticipates,”
“believes,” “continues,” “could,” “estimates,” “expects,” “intends,”
“hopes,” “may,” “plan,” “possible,” “potential,” “predicts,” “projects,”
“should,” “targets,” “would” and similar expressions, although not all forward-looking statements
contain these identifying words. Such statements are subject to numerous important factors, risks and uncertainties that may cause actual
events or results to differ materially from current expectations and beliefs, including, but not limited to, risks and uncertainties related
to: whether the proposed transactions will be completed in a timely manner, or at all; the risk that all of the closing conditions under
the purchase agreement are not satisfied; the occurrence of any event, change or other circumstance that could cause the Company not to
proceed with the rights offering or give rise to the termination of the purchase agreement; the determination of the final terms of the
proposed rights offering and proposed Backstop Private Placement; the satisfaction of customary closing conditions related to the proposed
rights offering; risks related to the diversion of management’s attention from RumbleOn’s ongoing business operations; the
impact of general economic, industry or political conditions in the United States or internationally, as well as the other risk
factors set forth under the caption “Risk Factors” in the Form S-3 to be filed with the SEC, in RumbleOn’s Quarterly
Report on Form 10-Q for the quarter ended March 30, 2023 and in any other subsequent filings made with the SEC by RumbleOn. There can
be no assurance that RumbleOn will be able to complete the proposed rights offering and proposed Backstop Private Placement on the anticipated
terms, or at all. Any forward-looking statements contained in this press release speak only as of the date hereof, and RumbleOn specifically
disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise,
except as required by law.
Investor Inquiries:
Dawn Francfort
ICR, Inc.
investors@rumbleon.com
Will Newell
investors@rumbleon.com
v3.23.2
X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
+ References
+ Details
Name: |
dei_AmendmentFlag |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
+ References
+ Details
Name: |
dei_DocumentPeriodEndDate |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:dateItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
+ References
+ Details
Name: |
dei_DocumentType |
Namespace Prefix: |
dei_ |
Data Type: |
dei:submissionTypeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
+ References
+ Details
Name: |
dei_EntityAddressAddressLine1 |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- Definition
+ References
+ Details
Name: |
dei_EntityAddressCityOrTown |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCode for the postal or zip code
+ References
+ Details
Name: |
dei_EntityAddressPostalZipCode |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the state or province.
+ References
+ Details
Name: |
dei_EntityAddressStateOrProvince |
Namespace Prefix: |
dei_ |
Data Type: |
dei:stateOrProvinceItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityCentralIndexKey |
Namespace Prefix: |
dei_ |
Data Type: |
dei:centralIndexKeyItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionIndicate if registrant meets the emerging growth company criteria.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityEmergingGrowthCompany |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
+ References
+ Details
Name: |
dei_EntityFileNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:fileNumberItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
+ References
+ Details
Name: |
dei_EntityIncorporationStateCountryCode |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarStateCountryItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityRegistrantName |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityTaxIdentificationNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:employerIdItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionLocal phone number for entity.
+ References
+ Details
Name: |
dei_LocalPhoneNumber |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 13e -Subsection 4c
+ Details
Name: |
dei_PreCommencementIssuerTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 14d -Subsection 2b
+ Details
Name: |
dei_PreCommencementTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTitle of a 12(b) registered security.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b
+ Details
Name: |
dei_Security12bTitle |
Namespace Prefix: |
dei_ |
Data Type: |
dei:securityTitleItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the Exchange on which a security is registered.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection d1-1
+ Details
Name: |
dei_SecurityExchangeName |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarExchangeCodeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Section 14a -Number 240 -Subsection 12
+ Details
Name: |
dei_SolicitingMaterial |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
+ References
+ Details
Name: |
dei_TradingSymbol |
Namespace Prefix: |
dei_ |
Data Type: |
dei:tradingSymbolItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Securities Act -Number 230 -Section 425
+ Details
Name: |
dei_WrittenCommunications |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
RumbleOn (NASDAQ:RMBL)
Historical Stock Chart
From Jun 2024 to Jul 2024
RumbleOn (NASDAQ:RMBL)
Historical Stock Chart
From Jul 2023 to Jul 2024