Big Rock Partners Acquisition Corp. Suite 230 Delray Beach, Florida 33483
Exhibit 10.9
0000 X. Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx Xxxxx, Xxxxxxx 00000
November
20, 2017
Big
Rock Partners Sponsor, LLC
0000 X.
Xxxxxxx Xxxxxxx
Xxxxx
000
Xxxxxx
Xxxxx, Xxxxxxx 00000
Ladies
and Gentlemen:
This
securities subscription agreement (the “Agreement”) is entered into on
November 20, 2017 by and between Big Rock Partners Sponsor, LLC, a
Delaware limited liability company (the “ Subscriber ” or “
you ”), and Big Rock
Partners Acquisition Corp., a Delaware corporation (the
“Company”,
“we” or
“us”). Pursuant
to the terms hereof, the Subscriber hereby agrees to purchase from
the Company, and the Company hereby agrees to sell to the
Subscriber, on the Closing (as defined in Section 1.1) (i) 250,000
Private Placement Units (the “Initial Units”), each consisting
of one (1) share of the Company’s common stock, $0.001 par
value per share (the “Shares”), (ii) one (1) right (the
“Rights”)
entitling the holder to receive one-tenth (1/10) of one Share upon
the consummation of an initial business combination, and (iii)
one-half (1/2) of one warrant (the “Warrants”). Additionally, pursuant
to the terms hereof, Subscriber hereby agrees to purchase from the
Company, and the Company hereby agrees to sell to the Subscriber,
up to 22,500 Private Placement Units (the “Additional Units” and together
with the Initial Units, the “Units”) to the extent the
underwriters of the proposed initial public offering
(“IPO”) of the
Units exercise their over-allotment option (the “Over-allotment Option”) in full.
The Company and the Subscriber’s agreements regarding such
Units are as follows:
1. Purchase of
Securities.
1.1. Closing.
The closing of the sale and purchase of the Initial Units shall
take place simultaneously with, and subject to, the consummation of
the IPO and the closing of the purchase and sale of Additional
Units shall take place simultaneously with, and subject to, the
closing of the Over-Allotment Option (each a “Closing Date”).
1.2. Purchase
of Units. For the sum of $2,500,000 (the “Initial Purchase Price”), payable
in cash at the Closing, the Company shall issue the Initial Units
to the Subscriber, on the terms and subject to the conditions set
forth in this Agreement. In addition, Subscriber hereby
conditionally agrees to purchase up to an additional 22,500
Additional Units at $10.00 per Unit, in an amount necessary to
maintain in the Trust Account (as defined in Section 3 below) at
$10.00 per unit sold in the IPO, for up to an additional purchase
price of $225,000.00 (the “Additional Purchase Price,” and
together with the Initial Purchase Price, the “Purchase Price”). Subscriber shall
deliver the Purchase Price to the Trust Account (defined below) or
into an escrow account maintained by Akerman LLP, counsel for the
Company, at least one (1) business day prior to the date of
effectiveness of the registration statement filed by the Company in
connection with the IPO (the “Registration
Statement”).
2. Representations, Warranties and
Agreements.
2.1. Subscriber’s
Representations, Warranties and Agreements. To induce the
Company to issue the Units to the Subscriber, the Subscriber hereby
represents and warrants to the Company and agrees with the Company
as follows:
2.1.1. No
Government Recommendation or Approval. The Subscriber
understands that no federal or state agency has passed upon or made
any recommendation or endorsement of the offering of the
Units.
2.1.2. No
Conflicts. The execution, delivery and performance of this
Agreement and the consummation by the Subscriber of the
transactions contemplated hereby do not violate, conflict with or
constitute a default under (i) the formation and governing
documents of the Subscriber, (ii) any agreement, indenture or
instrument to which the Subscriber is a party or (iii) any law,
statute, rule or regulation to which the Subscriber is subject, or
any agreement, order, judgment or decree to which the Subscriber is
subject.
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2.1.3. Authority.
Upon execution and delivery by you, this Agreement is a legal,
valid and binding agreement of Subscriber, enforceable against
Subscriber in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting the enforcement of
creditors’ rights generally and subject to general principles
of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
2.1.4. Experience,
Financial Capability and Suitability. Subscriber is: (i)
sophisticated in financial matters and is able to evaluate the
risks and benefits of the investment in the Units and (ii) able to
bear the economic risk of its investment in the Units for an
indefinite period of time because the Units (and underlying
securities) have not been registered under the Securities Act (as
defined below) and therefore cannot be sold unless subsequently
registered under the Securities Act or an exemption from such
registration is available. Subscriber is capable of evaluating the
merits and risks of its investment in the Company and has the
capacity to protect its own interests. Subscriber must bear the
economic risk of this investment until the Units are sold pursuant
to an effective registration statement under the Securities Act or
an exemption from registration available with respect to such sale.
Subscriber is able to afford a complete loss of Subscriber’s
investment in the Units.
2.1.5. Access
to Information; Independent Investigation. Prior to the
execution of this Agreement, the Subscriber has had the opportunity
to ask questions of and receive answers from representatives of the
Company concerning an investment in the Company, as well as the
finances, operations, business and prospects of the Company, and
the opportunity to obtain additional information to verify the
accuracy of all information so obtained. In determining whether to
make this investment, Subscriber has relied solely on
Subscriber’s own knowledge and understanding of the Company
and its business based upon Subscriber’s own due diligence
investigation and the information furnished pursuant to this
paragraph. Subscriber understands that no person has been
authorized to give any information or to make any representations
which were not furnished pursuant to this Section 2 and Subscriber
has not relied on any other representations or information in
making its investment decision, whether written or oral, relating
to the Company, its operations and/or its prospects.
2.1.6. Regulation
D Offering. Subscriber represents that it is an
“accredited investor” as such term is defined in Rule
501(a) of Regulation D under the Securities Act of 1933, as amended
(the “Securities
Act”) and acknowledges the sale contemplated hereby is
being made in reliance on a private placement exemption to
“accredited investors” within the meaning of Section
501(a) of Regulation D under the Securities Act or similar
exemptions under state law.
2.1.7. Investment
Purposes. The Subscriber is purchasing the Units solely for
investment purposes, for the Subscriber’s own account and not
for the account or benefit of any other person, and not with a view
towards the distribution or dissemination thereof. The Subscriber
did not decide to enter into this Agreement as a result of any
general solicitation or general advertising within the meaning of
Rule 502 under the Securities Act.
2.1.8. Restrictions
on Transfer; Shell Company. Subscriber understands the Units
are being offered in a transaction not involving a public offering
within the meaning of the Securities Act. Subscriber understands
the Units will be “restricted securities” within the
meaning of Rule 144(a)(3) under the Securities Act, and Subscriber
understands that the certificates representing the Units will
contain a legend in respect of such restrictions. If in the future
the Subscriber decides to offer, resell, pledge or otherwise
transfer the Units, such Units may be offered, resold, pledged or
otherwise transferred only pursuant to (i) registration under the
Securities Act, or (ii) an available exemption from registration.
Subscriber agrees that if any transfer of its Units or any interest
therein is proposed to be made, as a condition precedent to any
such transfer, Subscriber may be required to deliver to the Company
an opinion of counsel satisfactory to the Company. Absent
registration or an exemption, the Subscriber agrees not to resell
the Units. Subscriber further acknowledges that because the Company
is a shell company, Rule 144 may not be available to the Subscriber
for the resale of the Units until one year following consummation
of the initial business combination by the Company, despite
technical compliance with the requirements of Rule 144 and the
release or waiver of any contractual transfer
restrictions.
2.1.9. No
Governmental Consents. No governmental, administrative or
other third party consents or approvals are required, necessary or
appropriate on the part of Subscriber in connection with the
transactions contemplated by this Agreement.
2.2. Company’s
Representations, Warranties and Agreements. To induce the
Subscriber to purchase the Units, the Company hereby represents and
warrants to the Subscriber and agrees with the Subscriber as
follows:
2.2.1. Organization
and Corporate Power. The Company is a Delaware corporation
and is qualified to do business in every jurisdiction in which the
failure to so qualify would reasonably be expected to have a
material adverse effect on the financial condition, operating
results or assets of the Company. The Company possesses all
requisite corporate power and authority necessary to carry out the
transactions contemplated by this Agreement.
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2.2.2. No
Conflicts. The execution, delivery and performance of this
Agreement and the consummation by the Company of the transactions
contemplated hereby do not violate, conflict with or constitute a
default under (i) the certificate of incorporation of the Company,
(ii) any agreement, indenture or instrument to which the Company is
a party or (iii) any law, statute, rule or regulation to which the
Company is subject, or any agreement, order, judgment or decree to
which the Company is subject.
2.2.3. Title
to Securities. Upon issuance in accordance with, and payment
pursuant to, the terms hereof, the Units and Shares, and upon
exercise of the Rights and Warrants, the Shares issuable
thereunder, will be duly and validly issued, fully paid and
nonassessable. Upon issuance in accordance with, and payment
pursuant to, the terms hereof, and registration in the
Company’s register of stockholders, the Subscriber will have
or receive good title to the Units, free and clear of all liens,
claims and encumbrances of any kind, other than (a) transfer
restrictions hereunder and other agreements to which the Units may
be subject, (b) transfer restrictions under federal and state
securities laws, and (c) liens, claims or encumbrances imposed due
to the actions of the Subscriber.
2.2.4. No
Adverse Actions. There are no actions, suits, investigations
or proceedings pending, threatened against or affecting the Company
which (i) seek to restrain, enjoin, prevent the consummation of or
otherwise affect the transactions contemplated by this Agreement or
(ii) question the validity or legality of any transactions or seek
to recover damages or to obtain other relief in connection with any
transactions.
3. Waiver of Liquidation Distributions;
Redemption Rights. In connection with the Units purchased
pursuant to this Agreement, the Subscriber hereby waives any and
all right, title, interest or claim of any kind in or to any
distributions by the Company from the trust account which will be
established for the benefit of the Company’s public
stockholders and into which the Purchase Price and substantially
all of the proceeds of the IPO will be deposited (the
“Trust
Account”), in the event of a liquidation of the
Company upon the Company’s failure to timely complete an
initial business combination. For purposes of clarity, in the event
the Subscriber purchases Units in the IPO or Units or Shares in the
aftermarket, any additional Units or Shares so purchased shall be
eligible to receive any liquidating distributions by the
Company.
4. Restrictions on
Transfer.
4.1. Securities
Law Restrictions. In addition to any restrictions to be
contained in that certain letter agreement (commonly known as an
“Insider
Letter”) dated as of the closing of the IPO by and
between Subscriber and the Company, Subscriber agrees not to sell,
transfer, pledge, hypothecate or otherwise dispose of all or any
part of the Units unless, prior thereto (a) a registration
statement on the appropriate form under the Securities Act and
applicable state securities laws with respect to the Units proposed
to be transferred shall then be effective or (b) the Company has
received an opinion from counsel reasonably satisfactory to the
Company, that such registration is not required because such
transaction is exempt from registration under the Securities Act
and the rules promulgated by the Securities and Exchange Commission
thereunder and with all applicable state securities
laws.
4.2. Restrictive
Legends. Any certificates representing the Units shall have
endorsed thereon legends substantially as follows:
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS
AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED,
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS
OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS
WHICH, IN THE OPINION OF COUNSEL, IS AVAILABLE.”
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO LOCKUP
PURSUANT TO AN INSIDER LETTER BETWEEN, AMONG OTHERS, BIG ROCK
PARTNERS ACQUISITION CORP. AND BIG ROCK PARTNERS SPONSOR, LLC AND
MAY ONLY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED DURING THE TERM OF THE LOCKUP PURSUANT TO THE TERMS SET
FORTH IN THE INSIDER LETTER.”
4.3. Additional
Units or Substituted Securities. In the event of the
declaration of a share dividend, the declaration of an
extraordinary dividend payable in a form other than Units, a
spin-off, a share split, an adjustment in conversion ratio, a
recapitalization or a similar transaction affecting the
Company’s outstanding Units without receipt of consideration,
any new, substituted or additional securities or other property
which are by reason of such transaction distributed with respect to
any Units subject to this Section 4 or into which such Units
thereby become convertible shall immediately be subject to this
Section 4. Appropriate adjustments to reflect the distribution of
such securities or property shall be made to the number and/or
class of Units subject to this Section 4.
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4.4. Registration
Rights. Subscriber acknowledges that the Units are being
purchased pursuant to an exemption from the registration
requirements of the Securities Act and will become freely tradable
only after certain conditions are met or they are registered
pursuant to a Registration Rights Agreement (the
“Registration Rights
Agreement”) to be entered into with the Company on or
prior to the closing of the IPO.
5. Other Agreements.
5.1. Further
Assurances. Subscriber agrees to execute such further
instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
5.2. Notices.
All notices, statements or other documents which are required or
contemplated by this Agreement shall be: (i) in writing and
delivered personally or sent by first class registered or certified
mail, overnight courier service or facsimile or electronic
transmission to the address designated in writing, (ii) by
facsimile to the number most recently provided to such party or
such other address or fax number as may be designated in writing by
such party and (iii) by electronic mail, to the electronic mail
address most recently provided to such party or such other
electronic mail address as may be designated in writing by such
party. Any notice or other communication so transmitted shall be
deemed to have been given on the day of delivery, if delivered
personally, on the business day following receipt of written
confirmation, if sent by facsimile or electronic transmission, one
(1) business day after delivery to an overnight courier service or
five (5) days after mailing if sent by mail.
5.3. Entire
Agreement. This Agreement, together with (a) that certain
Insider Letter to be entered into between Subscriber and the
Company, and (b) that certain Registration Rights Agreement to be
entered into among Subscriber and the Company, each substantially
in the form to be filed as an exhibit to the Registration Statement
on Form S-1 associated with the Company’s IPO, embodies the
entire agreement and understanding between the Subscriber and the
Company with respect to the subject matter hereof and supersedes
all prior oral or written agreements and understandings relating to
the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this
Agreement shall affect, or be used to interpret, change or
restrict, the express terms and provisions of this
Agreement.
5.4. Modifications
and Amendments. The terms and provisions of this Agreement
may be modified or amended only by written agreement executed by
all parties hereto.
5.5. Waivers
and Consents. The terms and provisions of this Agreement may
be waived, or consent for the departure therefrom granted, only by
a written document executed by the party entitled to the benefits
of such terms or provisions. No such waiver or consent shall be
deemed to be or shall constitute a waiver or consent with respect
to any other terms or provisions of this Agreement, whether or not
similar. Each such waiver or consent shall be effective only in the
specific instance and for the purpose for which it was given, and
shall not constitute a continuing waiver or consent.
5.6. Assignment.
The rights and obligations under this Agreement may not be assigned
by either party hereto without the prior written consent of the
other party.
5.7. Benefit.
All statements, representations, warranties, covenants and
agreements in this Agreement shall be binding on the parties hereto
and shall inure to the benefit of the respective successors and
permitted assigns of each party hereto. Nothing in this Agreement
shall be construed to create any rights or obligations except among
the parties hereto, and no person or entity shall be regarded as a
third-party beneficiary of this Agreement.
5.8. Governing
Law. This Agreement and the rights and obligations of the
parties hereunder shall be construed in accordance with and
governed by the laws of the State of Delaware applicable to
contracts wholly performed within the borders of such state,
without giving effect to the conflict of law principles
thereof.
5.9. Severability.
In the event that any court of competent jurisdiction shall
determine that any provision, or any portion thereof, contained in
this Agreement shall be unreasonable or unenforceable in any
respect, then such provision shall be deemed limited to the extent
that such court deems it reasonable and enforceable, and as so
limited shall remain in full force and effect. In the event that
such court shall deem any such provision, or portion thereof,
wholly unenforceable, the remaining provisions of this Agreement
shall nevertheless remain in full force and effect.
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5.10. No
Waiver of Rights, Powers and Remedies. No failure or delay
by a party hereto in exercising any right, power or remedy under
this Agreement, and no course of dealing between the parties
hereto, shall operate as a waiver of any such right, power or
remedy of such party. No single or partial exercise of any right,
power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right,
power or remedy, shall preclude such party from any other or
further exercise thereof or the exercise of any other right, power
or remedy hereunder. The election of any remedy by a party hereto
shall not constitute a waiver of the right of such party to pursue
other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party
receiving such notice or demand to any other or further notice or
demand in similar or other circumstances or constitute a waiver of
the rights of the party giving such notice or demand to any other
or further action in any circumstances without such notice or
demand.
5.11. Survival
of Representations and Warranties. All representations and
warranties made by the parties hereto in this Agreement or in any
other agreement, certificate or instrument provided for or
contemplated hereby, shall survive the execution and delivery
hereof and any investigations made by or on behalf of the
parties.
5.12. No
Broker or Finder. Each of the parties hereto represents and
warrants to the other that no broker, finder or other financial
consultant has acted on its behalf in connection with this
Agreement or the transactions contemplated hereby in such a way as
to create any liability on the other. Each of the parties hereto
agrees to indemnify and save the other harmless from any claim or
demand for commission or other compensation by any broker, finder,
financial consultant or similar agent claiming to have been
employed by or on behalf of such party and to bear the cost of
legal expenses incurred in defending against any such
claim.
5.13. Headings
and Captions. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference
only and shall in no way modify or affect the meaning or
construction of any of the terms or provisions hereof.
5.14. Counterparts.
This Agreement may be executed in one or more counterparts, all of
which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission
or any other form of electronic delivery, such signature shall
create a valid and binding obligation of the party executing (or on
whose behalf such signature is executed) with the same force and
effect as if such signature page were an original
thereof.
5.15. Construction.
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. If an ambiguity or question of intent
or interpretation arises, this Agreement will be construed as if
drafted jointly by the parties hereto and no presumption or burden
of proof will arise favoring or disfavoring any party hereto
because of the authorship of any provision of this Agreement. The
words “ include
,” “ includes
,” and “ including ” will be deemed to be
followed by “ without
limitation .” Pronouns in masculine, feminine, and
neuter genders will be construed to include any other gender, and
words in the singular form will be construed to include the plural
and vice versa, unless the context otherwise requires. The words
“ this Agreement
,” “ herein
,” “ hereof
,” “ hereby
,” “ hereunder
,” and words of similar import refer to this Agreement as a
whole and not to any particular subdivision unless expressly so
limited. The parties hereto intend that each representation,
warranty, and covenant contained herein will have independent
significance. If any party hereto has breached any representation,
warranty, or covenant contained herein in any respect, the fact
that there exists another representation, warranty or covenant
relating to the same subject matter (regardless of the relative
levels of specificity) which such party hereto has not breached
will not detract from or mitigate the fact that such party hereto
is in breach of the first representation, warranty, or
covenant.
6. Voting and Tender of
Securities. Subscriber agrees to vote any Shares owned by it
in favor of an initial business combination that the Company
negotiates and submits for approval to the Company’s
stockholders and Subscriber shall not seek redemption with respect
to such Shares in connection with any proposed initial business
combination or in connection with certain amendments to the
Company’s amended and restated certificate of incorporation
as described in the Registration Statement. Additionally, the
Subscriber agrees not to tender any Units, Shares, or Warrants, in
whole or in part, in connection with a tender offer presented to
the Company’s stockholders in connection with an initial
business combination negotiated by the Company.
7. Terms of the Warrants underlying
Units. The Warrants underlying the Units purchased hereunder
will be non-redeemable so long as they are held by the Subscriber
(or any of its permitted transferees), and may be exercisable on a
“cashless” basis if held by the Subscriber (or any of
its permitted transferees). Once transferred by the Subscriber to
someone other than a permitted transferee, the Warrants underlying
the Units purchased hereunder will be redeemable and exercisable in
the same manner as the Warrants purchased by investors in the
IPO.
[Signature Page Follows]
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If the
foregoing accurately sets forth our understanding and agreement,
please sign the enclosed copy of this Agreement and return it to
us.
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Very
truly yours,
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By:
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/s/
Xxxx Xxxxxxx
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Name:
Xxxx Xxxxxxx
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Title:
Chief Financial Officer
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Accepted
and agreed as of the date first written above.
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BIG
ROCK PARTNERS SPONSOR, LLC
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By:
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/s/
Xxxxxxx Xxxxxxxx
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Name:
Xxxxxxx Xxxxxxxx
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Title:
Managing Member
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