November 20, 2017
Exhibit 10.4
November
20, 2017
0000 X.
Xxxxxxx Xxxxxxx
Xxxxx
000
Xxxxxx
Xxxxx, XX 00000
EarlyBirdCapital,
Inc.
000
Xxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Re:
Initial Public Offering
Ladies
and Gentlemen:
This
letter (this “Letter Agreement”) is being delivered to
you in accordance with the Underwriting Agreement (the
“Underwriting Agreement”) entered into by and between
Big Rock Partners Acquisition Corp., a Delaware corporation (the
“Company”), and EarlyBirdCapital, Inc., as
representative of the several underwriters (the
“Underwriters”), relating to an underwritten initial
public offering (the “Public Offering”), of
6,000,000 of the Company’s units (the
“Units”), each comprised of one share of the
Company’s common stock, par value $0.001 per share (the
“Common Stock”), one right (each, a
“Right”) and one-half of one warrant (each, a
“Warrant”). Each Right
entitles the holder thereof to receive one-tenth (1/10) of one
share of Common Stock upon the consummation of a Business
Combination. Each whole Warrant entitles the holder thereof to
purchase one share of the Common Stock at a price of $11.50
per share, subject to adjustment. The Units shall be sold in the
Public Offering pursuant to the registration
statements on Form S-1, Nos. 333-220947
and 333-221659 and the prospectus (the
“Prospectus”) filed by the Company with the Securities
and Exchange Commission (the “Commission”) and the
Company has applied to have the Units listed on the NASDAQ Capital
Market. Capitalized terms used herein and not
otherwise defined shall have the meaning ascribed to them in
Section 9.
In
order to induce the Company and the Underwriters to enter into the
Underwriting Agreement and to proceed with the Public Offering and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Big Rock Partners
Sponsor, LLC (the “Sponsor”) hereby agrees with the
Company as follows:
1. The Sponsor agrees
that if the Company seeks stockholder approval of a proposed
Business Combination, then in connection with such proposed
Business Combination, it shall vote all shares
of Common Stock owned by it in favor of such proposed
Business Combination.
2. The Sponsor hereby
agrees that in the event that the Company fails to consummate a
Business Combination within the time period set forth in the
Company’s amended and restated certificate of incorporation,
as the same may be amended from time to time, the Sponsor shall
take all reasonable steps to cause the Company to (i) cease
all operations except for the purpose of winding up, (ii) as
promptly as reasonably possible but not more than ten business days
thereafter, redeem 100% of the Common Stock sold as part of the
Units in the Public Offering (the “Offering Shares”),
at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including interest not
previously released to the Company to pay its franchise and income
taxes, divided by the number of then outstanding Offering Shares,
which redemption will completely extinguish Public
Stockholders’ rights as stockholders (including the right to
receive further liquidation distributions, if any), subject to
applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the
Company’s remaining stockholders and the Company’s
board of directors, dissolve and liquidate, subject in each case to
the Company’s obligations under Delaware law to provide for
claims of creditors and other requirements of applicable law. The
Sponsor agrees to not propose any amendment to the Company’s
amended and restated certificate of incorporation that would affect
the substance or timing of the Company’s obligation to redeem
100% of the Offering Shares if the Company does not complete a
Business Combination within the time period set forth in the
Company’s amended and restated certificate of incorporation,
as the same may be amended from time to time, unless the Company
provides its Public Stockholders with the opportunity to redeem
their shares of Common Stock upon approval of any such amendment at
a per share price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account including interest earned on
the funds held in the Trust Account and not previously released to
the Company to pay its franchise and income taxes, divided by the
number of then outstanding Offering Shares.
The
Sponsor acknowledges that it has no right, title, interest or claim
of any kind in or to any monies held in the Trust Account or any
other asset of the Company as a result of any liquidation of the
Company with respect to the Founder’s Shares. The Sponsor
hereby further waives, with respect to any shares of the Common
Stock held by it, him or her, any redemption rights it, he or she
may have in connection with the consummation of a Business
Combination, including, without limitation, any such rights
available in the context of a stockholder vote to approve such
Business Combination or in the context of a tender offer made by
the Company to purchase shares of the Common Stock, although the
Sponsor shall be entitled to redemption and liquidation rights with
respect to any shares of the Common Stock (other than the
Founder’s Shares) it or they hold if the Company fails to
consummate a Business Combination within the time period set
forth in the Company's amended and resetated certificate of
incorporation, as the same may be amended from time to
time.
3. During the period
commencing on the effective date of the Underwriting Agreement and
ending 180 days after such date, the undersigned shall not (i)
sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or establish or
increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder, with respect
to any Units, shares of Common Stock, Warrants or any securities
convertible into, or exercisable, or exchangeable for, shares of
Common Stock owned by him, her or it, (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of any Units, shares
of Common Stock, Warrants or any securities convertible into, or
exercisable, or exchangeable for, shares of Common Stock owned by
him, her or it, whether any such transaction is to be settled by
delivery of such securities, in cash or otherwise, or (iii)
publicly announce any intention to effect any transaction specified
in clause (i) or (ii).
4. In order to
minimize potential conflicts of interest that may arise from
multiple corporate affiliations, the Sponsor hereby agrees that
until the earliest of the Company’s initial Business
Combination or liquidation, the Sponsor shall present to the
Company for its consideration, prior to presentation to any other
entity, any target business that has a fair market value of at
least 80% of the assets held in the Trust Account (excluding
deferred underwriting commissions and taxes payable on the income
accrued on the Trust Account), subject to any pre-existing
fiduciary or contractual obligations the Sponsor might
have.
(a) The Sponsor hereby
agrees not to participate in the formation of, or become an officer
or director of, any other blank check company until the Company has
entered into a definitive agreement with respect to a Business
Combination or the Company has failed to complete a Business
Combination within the required time period set forth in the
Company’s amended and restated certificate of incorporation,
as the same may be amended from time to time.
(b) The Sponsor hereby
agrees and acknowledges that: (i) each of the Underwriters and the
Company would be irreparably injured in the event of a breach by
the Sponsor of its obligations in this Letter Agreement, (ii)
monetary damages may not be an adequate remedy for such breach and
(iii) the non-breaching party shall be entitled to injunctive
relief, in addition to any other remedy that such party may have in
law or in equity, in the event of such breach.
5.
(a)
On the date of the Prospectus, the Founder’s Shares, a
portion of which will be subject to forfeiture in the event the
Underwriters do not exercise their over-allotment option in full,
will be placed into an escrow account maintained in New York, New
York by Continental Stock Transfer & Trust Company, acting as
escrow agent.
(b) The
Sponsor agrees that it shall not effectuate any Transfer of Private
Placement Units or securities underlying such units, until after
the completion of a Business Combination.
(c) Notwithstanding
the provisions of paragraph 5(b), Transfers of the
Private Placement Units and securities underlying the Private
Placement Units are permitted (a) to the Company’s officers,
directors, consultants or their affiliates; (b) to an
entity’s members; (c) to relatives and trusts for estate
planning purposes; (d) pursuant to a qualified domestic relations
order; (e) by private sales made at or after the consummation of a
Business Combination at prices no greater than the price at which
the units were originally purchased; or (f) to the
Company for no value for cancellation in connection with the
consummation of a Business Combination; provided, however, that in
the case of clauses (a) through (e) these permitted transferees
must enter into a written agreement agreeing to be bound by these
transfer restrictions.
6. Except as disclosed
in the Prospectus, under the heading "Prospectus Summary -
The Offering - Limited payments to insiders," neither the
Sponsor nor any affiliate of the Sponsor, nor any director or
officer of the Company, shall receive any finder’s fee,
reimbursement, consulting fee, monies in respect of any repayment
of a loan or other compensation prior to, or in connection with any
services rendered in order to effectuate the consummation of the
Company’s initial Business Combination (regardless of the
type of transaction that it is).
7. The Sponsor has
full right and power, without violating any agreement to which it
is bound (including, without limitation, any non-competition or
non-solicitation agreement with any employer or former employer),
to enter into this Letter Agreement.
8. The Sponsor hereby
agrees to not propose, or vote in favor of, an amendment to the
Company’s amended and restated certificate of incorporation
to be effective prior to the consummation of a
Business Combination that
would restrict Public Stockholders from converting or selling their
shares to the Company in connection with a Business
Combination or affect the substance or timing of the
Company’s obligation to redeem 100% of the Offering Shares if
the Company does not complete a Business Combination within the
required time period unless the Company provides
holders of Offering Shares with the opportunity to have their
shares redeemed upon such approval in accordance with the
certificate of incorporation.
9. As used herein,
(i) “Business Combination” shall mean a merger,
capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination, involving the
Company and one or more businesses or entities;
(ii) “Founder’s Shares” shall mean the
shares of Common Stock of the Company held by the initial
stockholders of the Company prior to the consummation of the Public
Offering; (iii) “Private Placement Units” shall
mean the 250,000 units consists of one share of Common
Stock, one Right and one-half of one Warrant (or up to
272,500 units if the Underwriters’
over-allotment option is exercised in full) that are acquired for
an aggregate purchase price of $2,500,000 (or
$2,725,000 if the Underwriters’
over-allotment option is exercised in full), in a private placement
that shall occur simultaneously with the consummation of the Public
Offering; (iv) “Public Stockholders” shall mean
the holders of securities issued in the Public Offering;
(v) “Trust Account” shall mean the trust fund into
which a portion of the net proceeds of the Public Offering shall be
deposited; and (vi) “Transfer” shall mean the
(a) sale of, offer to sell, contract or agreement to sell,
hypothecate, pledge, grant of any option to purchase or otherwise
dispose of or agreement to dispose of, directly or indirectly, or
establishment or increase of a put equivalent position or
liquidation with respect to or decrease of a call equivalent
position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of
the Commission promulgated thereunder with respect to, any
security, (b) entry into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of any security, whether any such
transaction is to be settled by delivery of such securities, in
cash or otherwise, or (c) public announcement of any intention
to effect any transaction specified in clause (a) or
(b).
10. This Letter
Agreement constitutes the entire agreement and understanding of the
parties hereto in respect of the subject matter hereof and
supersedes all prior understandings, agreements, or representations
by or among the parties hereto, written or oral, to the extent they
relate in any way to the subject matter hereof or the transactions
contemplated hereby. This Letter Agreement may not be changed,
amended, modified or waived (other than to correct a typographical
error) as to any particular provision, except by a written
instrument executed by all parties hereto.
11. No party hereto may
assign either this Letter Agreement or any of its rights,
interests, or obligations hereunder without the prior written
consent of the other party. Any purported assignment in violation
of this paragraph shall be void and ineffectual and shall not
operate to transfer or assign any interest or title to the
purported assignee. This Letter Agreement shall be binding on the
Sponsor and its successors and assigns.
12. This Letter
Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving
effect to conflicts of law principles that would result in the
application of the substantive laws of another jurisdiction. The
parties hereto (i) all agree that any action, proceeding, claim or
dispute arising out of, or relating in any way to, this Letter
Agreement shall be brought and enforced in the courts of New York
City, in the State of New York, and irrevocably submits to such
jurisdiction and venue, which jurisdiction and venue shall be
exclusive and (ii) waives any objection to such exclusive
jurisdiction and venue or that such courts represent an
inconvenient forum.
13. Any notice, consent
or request to be given in connection with any of the terms or
provisions of this Letter Agreement shall be in writing and shall
be sent by express mail or similar private courier service, by
certified mail (return receipt requested), by hand delivery or
facsimile transmission.
14. The Sponsor
acknowledges and understands that the Underwriters and the Company
will rely upon the agreements, representations and warranties set
forth herein in proceeding with the Public Offering. Nothing
contained herein shall be deemed to render the Underwriters a
representative of, or a fiduciary with respect to, the Company, its
stockholders or any creditor or vendor of the Company with respect
to the subject matter hereof.
15. This Letter
Agreement shall terminate on the earlier of (i) the consummation of
the Business Combination or (ii) the liquidation of the Company;
provided, however, that such termination shall not relieve the
undersigned from liability for any breach of this agreement prior
to its termination.
[Signature
page follows]
43363128;1
Sincerely,
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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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Acknowledged
and Agreed:
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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 Offier
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EARLYBIRDCAPITAL,
INC.
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By:
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/s/ Xxxxxx
Xxxxxx
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Name: Xxxxxx
Xxxxxx
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Title:
CEO
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[Signature
Page to Letter Agreement]
