Exhibit 10.5

 

September 29, 2020

 

Qell Acquisition Corp. 

505 Montgomery Street, Suite 1100 

San Francisco, CA 94111

 

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”), dated as of
September 29, 2020, by and among Qell Acquisition Corp., a Cayman Islands
exempted company (the “Company”), and J.P. Morgan Securities LLC and Barclays
Capital Inc., as representatives (the “Representatives”) of the several
underwriters named therein (the “Underwriters”), relating to an underwritten
initial public offering (the “Public Offering”) of 37,950,000 of the Company’s
units (including 4,950,000 units that may be purchased pursuant to the
Underwriters’ option to purchase additional units, the “Units”), each comprised
of one of the Company’s Class A ordinary shares, par value $0.0001 per share
(the “Ordinary Shares”), and one-third of one redeemable warrant (each whole
warrant, a “Warrant”). Each Warrant entitles the holder thereof to purchase one
Ordinary Share at a price of $11.50 per share, subject to adjustment. The Units
will be sold in the Public Offering pursuant to a registration statement on
Form S-1 and a prospectus (the “Prospectus”) filed by the Company with the U.S.
Securities and Exchange Commission (the “Commission”). Certain capitalized terms
used herein are defined in paragraph 1 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, Qell Partners LLC (the “Sponsor”) and each of the undersigned
(each, an “Insider” and, collectively, the “Insiders”) hereby agree with the
Company as follows:

 

1.            Definitions. As used herein, (i) “Business Combination” shall mean
a merger, share exchange, asset acquisition, share purchase, reorganization or
similar business combination involving the Company and one or more businesses or
entities; (ii) “Founder Shares” shall mean the 9,487,500 Class B ordinary shares
of the Company, par value $0.0001 per share, outstanding prior to the
consummation of the Public Offering; (iii) “Private Placement Warrants” shall
mean the warrants that will be acquired by the Sponsor for an aggregate purchase
price of $9,600,000 (or up to $10,590,000 if the Underwriters exercise their
option to purchase additional units in full) in a private placement that shall
close simultaneously with the consummation of the Public Offering (including the
Ordinary Shares issuable upon exercise of such Private Placement Warrants
thereof); (iv) “Public Shareholders” shall mean the holders of Ordinary Shares
included in the Units issued in the Public Offering; (v) “Public Shares” shall
mean the Ordinary Shares included in the Units issued in the Public Offering;
(vi) “Trust Account” shall mean the trust account into which a portion of the
net proceeds of the Public Offering and the sale of the Private Placement
Warrants shall be deposited; (vii) “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 (the
“Exchange Act”), 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); and (viii) “Charter” shall mean the Company’s Amended and Restated
Memorandum and Articles of Association, as the same may be further amended from
time to time.

 

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2.Representations and Warranties.

 

(a)           The Sponsor and each Insider, with respect to itself, herself or
himself, represent and warrant to the Company that it, she or he has the full
right and power, without violating any agreement to which it, she or he 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 an officer of the Company and/or a
director on the Company’s Board of Directors (the “Board”), as applicable, and
each Insider hereby consents to being named in the Prospectus, road show and any
other materials as an officer and/or director of the Company, as applicable.

 

(b)           Each Insider represents and warrants, with respect to herself or
himself, that such Insider’s biographical information furnished to the Company
(including any such information included in the Prospectus) is true and accurate
in all material respects and does not omit any material information with respect
to such Insider’s background. The Insider’s questionnaire furnished to the
Company is true and accurate in all material respects. Each Insider represents
and warrants that such Insider 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; such Insider 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 such Insider is not currently a defendant in any
such criminal proceeding; and such Insider 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.

 

3.            Business Combination Vote. It is acknowledged and agreed that the
Company shall not enter into a definitive agreement regarding a proposed
Business Combination without the prior consent of the Sponsor. The Sponsor and
each Insider, with respect to itself or herself or himself, agrees that if the
Company seeks shareholder approval of a proposed initial Business Combination,
then in connection with such proposed initial Business Combination, it, she or
he, as applicable, shall vote all Founder Shares and any Public Shares held by
it, her or him, as applicable, in favor of such proposed initial Business
Combination (including any proposals recommended by the Board in connection with
such Business Combination) and not redeem any Public Shares held by it, her or
him, as applicable, in connection with such shareholder approval.

 

4.Failure to Consummate a Business Combination; Trust Account Waiver.

 

(a)           The Sponsor and each Insider hereby agree, with respect to itself,
herself or himself, that in the event that the Company fails to consummate its
initial Business Combination within the time period set forth in the Charter,
the Sponsor and each Insider 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, redeem 100% of the Public Shares, 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 income taxes (less up to $100,000 of
interest to pay dissolution expenses), divided by the number of then outstanding
Public Shares, which redemption will completely extinguish Public Shareholders’
rights as shareholders (including the right to receive further liquidation
distributions, if any); and (iii) as promptly as reasonably possible following
such redemption, subject to the approval of the Company’s remaining shareholders
and the Board, liquidate and dissolve, subject in the case of clauses (ii) and
(iii) to the Company’s obligations under Cayman Islands law to provide for
claims of creditors and in all cases subject to the other requirements of
applicable law. The Sponsor and each Insider agree not to propose any amendment
to the Charter (i) that would modify the substance or timing of the Company’s
obligation to provide holders of the Public Shares the right to have their
shares redeemed in connection with an initial Business Combination or to redeem
100% of the Public Shares if the Company does not complete an initial Business
Combination within the required time period set forth in the Charter or
(ii) with respect to any provision relating to the rights of holders of Public
Shares unless the Company provides its Public Shareholders with the opportunity
to redeem their Public Shares 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 income taxes, if any, divided
by the number of then-outstanding Public Shares.

 

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(b)           The Sponsor and each Insider, with respect to itself, herself or
himself, acknowledges that it, she or he 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, her or him, if any. The Sponsor and each Insider
hereby further waives, with respect to any Founder Shares and Public Shares held
by it, her or him, as applicable, any redemption rights it, she or he may have
in connection with (x) the completion of the Company’s initial Business
Combination, and (y) a shareholder vote to approve an amendment to the Charter
(i) that would modify the substance or timing of the Company’s obligation to
provide holders of the Public Shares the right to have their shares redeemed in
connection with an initial Business Combination or to redeem 100% of the Public
Shares if the Company has not consummated an initial Business Combination within
the time period set forth in the Charter or (ii) with respect to any provision
relating to the rights of holders of Public Shares (although the Sponsor and the
Insiders shall be entitled to liquidation rights with respect to any Public
Shares they hold if the Company fails to consummate a Business Combination
within the required time period set forth in the Charter).

 

5.            Fairness Opinion. The undersigned acknowledges and agrees that
prior to entering into a definitive agreement for a Business Combination with a
target business that is affiliated with the undersigned or any other Insiders of
the Company or their affiliates, such transaction must be approved by a majority
of the Company’s disinterested independent directors and the Company must obtain
an opinion from an independent investment banking firm or an independent
accounting firm that such Business Combination is fair to the Company from a
financial point of view.

 

6.            Barry Engle hereby agrees not to participate in the formation of,
or become an officer or director of, any other any other special purpose
acquisition company with a class of securities registered under the Exchange Act
until the Company has entered into a definitive agreement regarding an initial
Business Combination or has sooner failed to complete a Business Combination
within the required time period set forth in the Charter.

 

7.            Lock-up; Transfer Restrictions.

 

(a)           The Sponsor and the Insiders agree that they shall not Transfer
any Founder Shares (the “Founder Shares Lock-up”) until the earliest of (A) one
year after the completion of the Company’s initial Business Combination and
(B) the date following the completion of an initial Business Combination on
which the Company completes a liquidation, merger, share exchange,
reorganization or other similar transaction that results in all of the Public
Shareholders having the right to exchange their Ordinary Shares for cash,
securities or other property (the “Founder Shares Lock-up Period”).
Notwithstanding the foregoing, if, subsequent to a Business Combination, the
closing price of the Ordinary Shares equals or exceeds $12.00 per share (as
adjusted for share splits, share capitalizations, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading
day period commencing at least 150 days after the Company’s initial Business
Combination, the Founder Shares shall be released from the Founder Shares
Lock-up.

 

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(b)           Subject to the provisions set forth in paragraph 5(c), the Sponsor
and Insiders agree that they shall not effectuate any Transfer of Private
Placement Warrants or the Ordinary Shares underlying such Private Placement
Warrants until 30 days after the completion of an initial Business Combination.

 

(c)           Notwithstanding the provisions set forth in paragraphs
5(a) and (b), Transfers of the Founder Shares, Private Placement Warrants or
Ordinary Shares underlying the Private Placement Warrants are permitted (a) to
the Company’s officers or directors, any affiliates or family members of any of
the Company’s officers or directors, any members or partners of the Sponsor or
their affiliates, any affiliates of the Sponsor, or any employees of such
affiliates; (b) in the case of an individual, by gift to a member of one of the
individual’s immediate family or to a trust, the beneficiary of which is a
member of the individual’s immediate family, an affiliate of such individual 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 Founder
Shares, Private Placement Warrants or Ordinary Shares, as applicable, were
originally purchased; (f) by virtue of the Sponsor’s organizational documents
upon liquidation or dissolution of the Sponsor; (g) to the Company for no value
for cancellation in connection with the consummation of its initial Business
Combination, (h) in the event of the Company’s liquidation prior to the
completion of its initial Business Combination; or (i) in the event of
completion of a liquidation, merger, share exchange or other similar transaction
which results in all of the Company’s Public Shareholders having the right to
exchange their Ordinary Shares for cash, securities or other property subsequent
to the completion of an initial Business Combination; provided, however, that in
the case of clauses (a) through (f) these permitted transferees must enter into
a written agreement with the Company agreeing to be bound by these transfer
restrictions.

 

(d)           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, without the prior written consent of the Representatives,
Transfer any Units, Ordinary Shares, Warrants or any other securities
convertible into, or exercisable or exchangeable for, Ordinary Shares held by
it, her or him, as applicable, subject to certain exceptions enumerated in
Section 4(h) of the Underwriting Agreement.

 

8.            Remedies. The Sponsor and each of the Insiders hereby agree and
acknowledge that (i) each of the Underwriters and the Company would be
irreparably injured in the event of a breach by the Sponsor or such Insider of
its, her or his obligations, as applicable under paragraphs 3, 4, 5, 7, 10 and
11, (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.

 

9.            Payments by the Company. Except as disclosed in the Prospectus,
neither the Sponsor nor any affiliate of the Sponsor nor any director or officer
of the Company nor any affiliate of the directors and officers shall receive
from the Company any finder’s fee, reimbursement, consulting fee, monies in
respect of any payment 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).

 

10.          Director and Officer Liability Insurance. The Company will maintain
an insurance policy or policies providing directors’ and officers’ liability
insurance, and the Insiders shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any of the Company’s directors or officers.

 

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11.          Termination. This Letter Agreement shall terminate on the earlier
of (i) the expiration of the Founder Shares Lock-up Period and (ii) the
liquidation of the Company; provided, however, that this Letter Agreement shall
terminate in the event that the Public Offering is not consummated and closed by
December 31, 2020; provided further that paragraph 10 of this Letter Agreement
shall survive such liquidation.

 

12.          Indemnification. In the event of the liquidation of the Trust
Account upon the failure of the Company to consummate its initial Business
Combination within the time period set forth in the Charter, 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) 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
(except for the Company’s independent auditors) or (ii) any prospective target
business with which the Company has discussed entering into a transaction
agreement (a “Target”); provided, however, that such indemnification of the
Company by the Indemnitor (x) 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 the lesser of (i) $10.00 per Public Share and (ii) the actual amount per
Public Share held in the Trust Account as of the date of the liquidation of the
Trust Account if less than $10.00 per Public Share due to reductions in the
value of the trust assets, in each case net of interest that may be withdrawn to
pay the Company’s tax obligations, (y) shall not apply to any claims by a third
party or Target that executed a waiver of any and all rights to the monies held
in the Trust Account (whether or not such waiver is enforceable) and (z) shall
not apply to any claims under the Company’s indemnity of the Underwriters
against certain liabilities, including liabilities under the Securities Act of
1933, as amended. 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.

 

13.          Forfeiture of Founder Shares. To the extent that the Underwriters
do not exercise their option to purchase additional Units within 45 days from
the date of the Prospectus in full (as further described in the Prospectus), the
Sponsor agrees to automatically surrender to the Company for no consideration,
for cancellation at no cost, an aggregate number of Founder Shares so that the
number of Founder Shares will equal of 20% of the sum of the total number of
Ordinary Shares and Founder Shares outstanding at such time. The Sponsor and
Insiders further agree that to the extent that the size of the Public Offering
is increased or decreased, the Company will effect a share capitalization or a
share repurchase, as applicable, with respect to the Founder Shares immediately
prior to the consummation of the Public Offering in such amount as to maintain
the number of Founder Shares at 20% of the sum of the total number of Ordinary
Shares and Founder Shares outstanding at such time.

 

14.          Entire Agreement. 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 (1) each Insider that is
the subject of any such change, amendment, modification or waiver and (2) the
Sponsor.

 

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15.          Assignment. 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 parties. 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, each of the Insiders and each of their
respective successors, heirs, personal representatives and assigns and permitted
transferees.

 

16.          No Third-Party Beneficiaries. Nothing in this Letter Agreement
shall be construed to confer upon, or give to, any person or corporation other
than the parties hereto any right, remedy or claim under or by reason of this
Letter Agreement or of any covenant, condition, stipulation, promise or
agreement hereof. All covenants, conditions, stipulations, promises and
agreements contained in this Letter Agreement shall be for the sole and
exclusive benefit of the parties hereto and their successors, heirs, personal
representatives and assigns and permitted transferees.

 

17.          Counterparts. This Letter Agreement may be executed in any number
of original, facsimile or other electronic counterparts, and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.

 

18.          Effect of Headings. The paragraph headings herein are for
convenience only and are not part of this Letter Agreement and shall not affect
the interpretation thereof.

 

19.          Severability. This Letter Agreement shall be deemed severable, and
the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Letter Agreement or of any other
term or provision hereof. Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties hereto intend that there shall be
added as a part of this Letter Agreement a provision as similar in terms to such
invalid or unenforceable provision as may be possible and be valid and
enforceable.

 

20.          Governing Law. 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 submit to
such jurisdiction and venue, which jurisdiction and venue shall be exclusive,
and (ii) waive any objection to such exclusive jurisdiction and venue or that
such courts represent an inconvenient forum.

 

21.          Notices. 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 or
other electronic transmission.

 

[Signature Page Follows]

 

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  Sincerely,     Qell Partners LLC     By: /s/ Barry Engle   Name: Barry Engle  
Title: Manager     Barry Engle     By: /s/ Barry Engle

 

Acknowledge and Agreed:     Qell Acquisition Corp.     By: /s/ Barry Engle  
Name: Barry Engle   Title: Chief Executive Officer