Exhibit 10.4

 

August 16, 2017

 

I-AM Capital Acquisition Company 

1345 Avenue of the Americas, 2nd Floor

New York, NY 10105

 

Re:       Initial Public Offering

 

Gentlemen:

 

This letter (this “Letter Agreement”) is being delivered to you in accordance
with the Underwriting Agreement (the “Underwriting Agreement”) proposed to be
entered into by and between I-AM Capital Acquisition Company, a Delaware
corporation (the “Company”), and Maxim Group LLC, as representative of the
several underwriters named therein (the “Underwriters”), relating to an
underwritten initial public offering (the “Public Offering”), of up to 5,750,000
of the Company’s units (the “Units”), each Unit comprised of one share of the
Company’s common stock, par value $0.0001 per share (the “Common Stock”), one
warrant (each, a “Warrant”) and one right to receive one-tenth (1/10) of one
share of Common Stock (the “Rights”). Each 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 a registration statement on Form S-1 and prospectus (the “Prospectus”) filed
by the Company with the Securities and Exchange Commission (the “Commission”)
and the Company shall apply to have the Units listed on the Nasdaq Capital
Market. Certain capitalized terms used herein are defined in paragraph 11
hereof.

 

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, I-AM Capital Partners LLC (the “Sponsor”) and the undersigned
individuals, each of whom is a director, or officer of the Company (each, an
“Insider” and collectively, the “Insiders”), hereby agrees with the Company as
follows:

 

1. The Sponsor and each Insider agrees that if the Company seeks stockholder
approval of a proposed Business Combination, then in connection with such
proposed Business Combination, it, he or she shall (i) vote any shares of Common
Stock owned by it, him or her in favor of such proposed Business Combination and
(ii) not redeem any shares of Common Stock owned by it, him or her in connection
with such stockholder approval. The Sponsor and each Insider agrees not to (i)
tender any Shares of Common Stock in connection with a tender offer conducted in
conjunction with a Business Combination and (ii) request that more than $600,000
of interest be withdrawn from the Trust Account for working capital purposes.

 

2. The Sponsor and each Insider agrees that in the event that the Company fails
to consummate a Business Combination (as defined in the Underwriting Agreement)
within 12 months from the date of the closing of the Public Offering (or up to
21 months from the closing of the Public Offering if the Company extends the
period of time to consummate a Business Combination in accordance with the
Company’s amended and restated certificate of incorporation (the “Charter”)), or
such later period approved by the Company’s stockholders in accordance with the
Charter, the Sponsor and Insiders 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 10 business days
thereafter, subject to lawfully available funds therefor, 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 (which interest shall
be net of taxes payable and up to a maximum of $600,000 of working capital
released to the Company, including repayment from interest of loans made to the
Company by the Sponsor or application of withdrawn or accrued interest to the
Sponsor’s obligation to loan the Company money in connection with an extension
as described in the Charter, and less up to $50,000 of interest to pay
liquidation expenses), divided by the number of then outstanding public 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
and each Insider agrees not to propose any amendment to the Charter 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
12 months from the closing of the Public Offering (or up to 21 months from the
closing of the Public Offering if the Company extends the period of time to
consummate a Business Combination in accordance with the Charter), 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 (which interest shall be net of taxes payable and up
to a maximum of $600,000 of working capital released to the Company), divided by
the number of then outstanding Offering Shares.

 

 

 

 

The Sponsor and each Insider acknowledges that it, he or she 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 Shares held by it. The Sponsor and each
Insider further waives, with respect to any shares of the Common Stock held by
it, him or her, if any, 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 and
Insiders shall be entitled to redemption and liquidation rights with respect to
any shares of the Common Stock (other than the Founder Shares) they hold if the
Company fails to consummate a Business Combination within 12 months from the
date of the closing of the Public Offering (or up to 21 months from the closing
of the Public Offering if the Company extends the period of time to consummate a
Business Combination in accordance with the Charter)).

 

3. Subject to the provisions set forth in paragraphs 7(a) and (b) below, during
the period commencing on the effective date of the Underwriting Agreement and
ending 180 days after such date, the Sponsor and each Insider 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, file (or participate in the filing of) a registration statement
with the Commission 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, Rights or any securities convertible into, or
exercisable, or exchangeable for, shares of Common Stock owned by it, if any,
(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, Rights or any securities convertible into, or
exercisable, or exchangeable for, shares of Common Stock owned by it, if any,
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). The foregoing sentence shall not
apply to the registration of the offer and sale of Units contemplated by the
Underwriting Agreement and the sale of the Units to the Underwriters. The
Sponsor and each Insider acknowledges and agrees that, prior to the effective
date of any release or waiver, of the restrictions set forth in this paragraph 3
or paragraph 7 below, the Company shall announce the impending release or waiver
by press release through a major news service at least two business days before
the effective date of the release or waiver. Any release or waiver granted shall
only be effective two business days after the publication date of such press
release. The provisions of this paragraph will not apply if (i) the release or
waiver is effected solely to permit a transfer of securities that is not for
consideration and (ii) the transferee has agreed in writing to be bound by the
same terms described in this Letter Agreement to the extent and for the duration
that such terms remain in effect at the time of the transfer.

 

4. In the event of the liquidation of the Trust Account, the Sponsor (the
“Indemnitor”) agrees to indemnify and hold harmless the Company against any and
all loss, liability, claim, damage and expense whatsoever (including, but not
limited to, any and all legal or other expenses reasonably incurred in
investigating, preparing or defending against any litigation, whether pending or
threatened, or any claim whatsoever) to which the Company may become subject as
a result of any claim by (i) any third party for services rendered or products
sold to the Company or (ii) a prospective target business with which the Company
has entered into an acquisition agreement (a “Target”); provided, however, that
such indemnification of the Company by the Indemnitor shall apply only to the
extent necessary to ensure that such claims by a third party for services
rendered or products sold to the Company or a Target do not reduce the amount of
funds in the Trust Account to below (i) $10.15 per Offering Share (or up to
$10.3285 per Offering Share if the Company extends the period of time to
consummate a Business Combination in accordance with the Charter) or (ii) such
lesser amount per share of the Offering Shares held in the Trust Account due to
reductions in the value of the trust assets as of the date of the liquidation of
the Trust Account, in each case, net of the amount of interest earned on the
property in the Trust Account which may be withdrawn to pay taxes and up to a
maximum of $600,000 for working capital purposes, except as to any claims by a
third party who executed a waiver of any and all rights to seek access to the
Trust Account and except as to any claims under the Company’s indemnity of the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. In the event that any such executed waiver
is deemed to be unenforceable against such third party, the Indemnitor shall not
be responsible to the extent of any liability for such third party claim. The
Indemnitor shall have the right to defend against any such claim with counsel of
its choice reasonably satisfactory to the Company if, within 15 days following
written receipt of notice of the claim to the Indemnitor, the Indemnitor
notifies the Company in writing that it shall undertake such defense.

 

 

 

 

5. To the extent that the Underwriters do not exercise their over-allotment
option to purchase an additional 750,000 Units within 45 days from the date of
the Prospectus (and as further described in the Prospectus), the Sponsor and
Insiders agree that they shall forfeit, at no cost, a number of Founder Shares
in the aggregate equal to 187,500 multiplied by a fraction, (i) the numerator of
which is 750,000 minus the number of Units purchased by the Underwriters upon
the exercise of their over-allotment option, and (ii) the denominator of which
is 750,000. The forfeiture will be adjusted to the extent that the
over-allotment option is not exercised in full by the Underwriters so that the
stockholders prior to the Public Offering will own an aggregate of 20% of the
Company’s issued and outstanding shares of Common Stock after the Public
Offering (not including the private placement shares and the shares issued to
the Underwriters). The Sponsor and Insiders further agree that to the extent
that the size of the Public Offering is increased or decreased, the Company will
purchase or sell shares of Common Stock or effect a stock dividend or share
contribution back to capital, as applicable, immediately prior to the
consummation of the Public Offering in such amount as to maintain the ownership
of the stockholders prior to the Public Offering at 20% of its issued and
outstanding shares of Common Stock upon the consummation of the Public Offering
(not including the private placement shares and the shares issued to the
Underwriters). In connection with such increase or decrease in the size of the
Public Offering, then (A) the references to 750,000 in the numerator and
denominator of the formula in the first sentence of this paragraph shall be
changed to a number equal to 15% of the number of shares included in the Units
issued in the Public Offering and (B) the reference to 187,500 in the formula
set forth in the first sentence of this paragraph shall be adjusted to such
number of shares of the Common Stock that the Sponsor and Insiders would have to
return to the Company in order to hold an aggregate of 20% of the Company’s
issued and outstanding shares after the Public Offering (not including the
private placement shares and the shares issued to the Underwriters).

 

6. (a) The Sponsor and each Insider 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
12 months after the closing of the Public Offering (or up to 21 months from the
closing of the Public Offering if the Company extends the period of time to
consummate a Business Combination in accordance with the Charter).

 

(b) The Sponsor and each Insider 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 or Insider of his, her or its obligations (as applicable)
under paragraphs 1, 2, 3, 4, 5, 6(a), 7(a), 7(b), and 9 of 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.

 

7. (a) The Sponsor and each Insider agrees that it, he or she shall not Transfer
(as defined below) any Founder Shares until the earlier of (i) one year after
the completion of a Business Combination or earlier if, subsequent to a Business
Combination, (x) the last sale price of the Common Stock equals or exceeds
$12.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) for any 20 trading days within
any 30-trading day period commencing at least 150 days after a Business
Combination or (y) the date following the completion of a Business Combination
on which the Company completes a liquidation, merger, stock exchange or other
similar transaction that results in all of the Company’s stockholders having the
right to exchange their shares of Common Stock for cash, securities or other
property (the “Founder Shares Lock-up Period”).

 

(b) The Sponsor and each Insider agrees that it, he or she shall not effectuate
any Transfer of Private Placement Units and the securities contained therein,
until the completion of a Business Combination (the “Private Placement Units
Lock-up Period”, together with the Founder Shares Lock-up Period, the “Lock-up
Periods”).

 

 

 

 

(c) Notwithstanding the provisions set forth in paragraphs 7(a) and (b),
Transfers of the Founder Shares, Private Placement Units and securities
contained therein are permitted to (a)  the Company’s officers or directors, any
affiliates or family members of any of the Company’s officers or directors, any
members of the Sponsor or any affiliates of the Sponsor or any of its members;
(b) in the case of an individual, by a gift to a member of one of the members of
the individual’s immediate family or to a trust, the beneficiary of which is a
member of one of the individual’s immediate family, an affiliate of such person
or to a charitable organization; (c) in the case of an individual, by virtue of
laws of descent and distribution upon death of the individual; (d) in the case
of an individual, pursuant to a qualified domestic relations order; (e) by
private sales or transfers made in connection with the consummation of a
Business Combination at prices no greater than the price at which the securities
were originally purchased; or (f) in the event of the Company’s liquidation
prior to the completion 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 and the
other terms described in this Letter Agreement to the extent and for the
duration that such terms remain in effect at the time of the transfer.

 

8. The Sponsor and each Insider represents and warrants that it, he or she has
never been suspended or expelled from membership in any securities or
commodities exchange or association or had a securities or commodities license
or registration denied, suspended or revoked. Each Insider’s biographical
information furnished to the Company is true and accurate in all respects and
does not omit any material information with respect to the undersigned’s
background. Each Insider’s questionnaire furnished to the Company and the
information about the Insider in the Prospectus is true and accurate in all
respects. Each Insider represents and warrants that: the undersigned is not
subject to or a respondent in any legal action for, any injunction,
cease-and-desist order or order or stipulation to desist or refrain from any act
or practice relating to the offering of securities in any jurisdiction; the
undersigned has never been convicted of, or pleaded guilty to, any crime
(i) involving fraud, (ii) relating to any financial transaction or handling of
funds of another person, or (iii) pertaining to any dealings in any securities
and the undersigned is not currently a defendant in any such criminal
proceeding.

 

9. Except as disclosed in the Prospectus, neither the Sponsor or any Insider nor
any affiliate of the Sponsor or any Insider, nor any director or officer of the
Company, shall receive from the Company 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 a Business Combination (regardless of the type of
transaction that it is), other than the following, none of which will be made
from the proceeds of the Public Offering held in the Trust Account prior to the
completion of a Business Combination: (a) repayment of loans of up to an
aggregate of $300,000 made to the Company by the Sponsors; (b) payment to the
Sponsor for office space, utilities and secretarial support for a total of
$10,000 per month; (c) reimbursement for any reasonable out-of-pocket expenses
related to identifying, investigating and consummating a Business Combination,
and (d) repayment of loans, if any, and on such terms as to be determined by the
Company from time to time, made by the Sponsor or certain of the Company’s
officers and directors to finance transaction costs in connection with an
intended Business Combination, provided, that, if the Company does not
consummate a Business Combination, a portion of the working capital held outside
the Trust Account may be used by the Company to repay such loaned amounts so
long as no other proceeds from the Trust Account are used for such repayment. In
the event that the Company does not consummate a Business Combination, the
Sponsor of the Company hereby waives its right to be repaid for any loan the
Sponsor has made to the Company, including loans to extend the period of time
during which the Company must consummate a Business Combination (other than from
funds available to the Company not held in the Trust Account, including interest
permitted to be withdrawn). Up to $1,500,000 of such loans (including any loans
made in connection with the extension of the time available for the Company to
consummate a Business Combination) may be convertible into units of the post
Business Combination entity at a price of $10.00 per unit at the option of the
lender. Such units would be identical to the Private Placement Units.

 

10. The Sponsor and each Insider 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 and, as applicable, to serve as a
director on the board of directors of the Company and hereby consents to being
named in the prospectus as a director or director nominee of the Company.

 

 

 

 

11. As used herein, (i) “Business Combination” shall mean a merger, capital
stock exchange, asset acquisition, stock purchase, reorganization or similar
initial business combination, involving the Company and one or more businesses;
(ii) “Founder Shares” shall mean the 1,437,500 shares of the Common Stock of the
Company initially acquired by the Sponsor for an aggregate purchase price of
$25,000, or approximately $0.0001 per share, prior to the consummation of the
Public Offering; (iii) “Private Placement Units” shall mean up to 254,500 units
(or 280,750 units if the underwriters’ over-allotment option is exercised in
full) of the Company that are to be acquired by the Sponsor for an aggregate
purchase price of $2,545,000 in the aggregate (or $2,807,500 in the aggregate if
the underwriters’ over-allotment option is exercised in full), or $10.00 per
Unit, 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).

 

12. 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.

 

13. 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 Sponsors and Insiders and their respective successors and permitted assigns.
Any transfer made in contravention of this Letter Agreement shall be null and
void.

 

14. 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.

 

15. 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.

 

16. This Letter Agreement shall terminate on the earlier of (i) the expiration
of the Lock-up Periods or (ii) the liquidation of the
Company; provided, however, that this Letter Agreement shall earlier terminate
in the event that the Public Offering is not consummated and closed by December
31, 2017, provided further that paragraph 4 of this Letter Agreement shall
survive such liquidation.

 

[Signature page follows]

 

 

 

 

Sincerely,

 

I-AM CAPITAL PARTNERS LLC

 

By: /s/ Suhel Kanuga    

Name: Suhel Kanuga

Title:   Managing Member

        By: /s/ F. Jacob Cherian     F. Jacob Cherian         By: /s/ Suhel
Kanuga     Suhel Kanuga         By: /s/ Donald Caldwell     Donald Caldwell    
    By: /s/ Roman Franklin     Roman Franklin         By: /s/ Max Hooper    

Max Hooper

 

  By: /s/ Frank Leavy    

Frank Leavy

 

  Acknowledged and Agreed:  

 

I-AM CAPITAL ACQUISITION COMPANY         By: /s/ F. Jacob Cherian     Name:
   F. Jacob Cherian     Title: Chief Executive Officer  

 

[Signature page to Insider Letter]