Exhibit 10.4

 
 
November 20, 2017
 
 
 
 
Big Rock Partners Acquisition Corp.
2645 N. Federal Highway
Suite 230
Delray Beach, FL  33483
 
EarlyBirdCapital, Inc.
366 Madison Avenue
New York, New York 10017
 
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,
 
 
 
 
BIG ROCK PARTNERS SPONSOR, LLC
 
 
 
 
 
 
By:  
/s/ Richard Ackerman

 
 
 
Name: Richard Ackerman

 
 
 
Title: Managing Member

 

 
 
Acknowledged and Agreed:
 
 
 
BIG ROCK PARTNERS ACQUISITION CORP.
 
 
 
 
 
 
By:  
/s/ Lori Wittman

 
 
 
Name: Lori Wittman

 
 
 
Title: Chief Financial Offier

 

 

 
 
 EARLYBIRDCAPITAL, INC.
 
 
 
 
 
 
By:  
/s/ Steven Levine

 
 
 
Name: Steven Levine

 
 
 
Title: CEO

 

 
 
 
[Signature Page to Letter Agreement]